Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2016 | Mar. 01, 2016 | Jul. 03, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | GREATBATCH, INC. | ||
Entity Central Index Key | 1,114,483 | ||
Document Type | 10-K | ||
Document Period End Date | Jan. 1, 2016 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --01-01 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,342 | ||
Entity Common Stock, Shares Outstanding | 30,778,835 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 01, 2016 | Jan. 02, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 82,478 | $ 76,824 |
Accounts receivable, net of allowance for doubtful accounts of $1.0 million in 2015 and $1.4 million in 2014 | 207,342 | 124,953 |
Inventories | 252,166 | 129,242 |
Refundable income taxes | 11,730 | 1,716 |
Deferred income taxes | 0 | 6,168 |
Prepaid expenses and other current assets | 20,888 | 11,780 |
Total current assets | 574,604 | 350,683 |
Property, plant and equipment, net | 379,492 | 144,925 |
Amortizing intangible assets, net | 893,977 | 65,337 |
Indefinite-lived intangible assets | 90,288 | 20,288 |
Goodwill | 1,013,570 | 354,393 |
Deferred income taxes | 3,587 | 2,626 |
Other assets | 26,618 | 16,870 |
Total assets | 2,982,136 | 955,122 |
Current liabilities: | ||
Current portion of long-term debt | 29,000 | 11,250 |
Accounts payable | 84,362 | 46,436 |
Income taxes payable | 3,221 | 2,003 |
Deferred income taxes | 0 | 588 |
Accrued expenses | 97,257 | 48,384 |
Total current liabilities | 213,840 | 108,661 |
Long-term debt | 1,685,053 | 175,363 |
Deferred income taxes | 221,804 | 53,195 |
Other long-term liabilities | 10,814 | 4,541 |
Total liabilities | $ 2,131,511 | $ 341,760 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value, authorized 100,000,000 shares; no shares issued or outstanding in 2015 or 2014 | $ 0 | $ 0 |
Common stock, $0.001 par value, authorized 100,000,000 shares; 30,664,119 shares issued and 30,601,167 shares outstanding in 2015; 25,099,293 shares issued and 25,070,931 shares outstanding in 2014 | 31 | 25 |
Additional paid-in capital | 620,470 | 366,073 |
Treasury stock, at cost, 62,952 shares in 2015 and 28,362 shares in 2014 | (3,100) | (1,307) |
Retained earnings | 231,854 | 239,448 |
Accumulated other comprehensive income | 1,370 | 9,123 |
Total stockholders’ equity | 850,625 | 613,362 |
Total liabilities and stockholders’ equity | $ 2,982,136 | $ 955,122 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jan. 01, 2016 | Jan. 02, 2015 |
Current assets: | ||
Allowance for doubtful accounts | $ 1 | $ 1.4 |
Stockholders’ equity: | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 30,664,119 | 25,099,293 |
Common stock, shares outstanding | 30,601,167 | 25,070,931 |
Treasury stock, shares | 62,952 | 28,362 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Income Statement [Abstract] | |||
Sales | $ 800,414 | $ 687,787 | $ 663,945 |
Cost of sales | 565,279 | 456,389 | 444,632 |
Gross profit | 235,135 | 231,398 | 219,313 |
Operating expenses: | |||
Selling, general and administrative expenses | 102,530 | 90,602 | 88,107 |
Research, development and engineering costs, net | 52,995 | 49,845 | 54,077 |
Other operating expenses, net | 66,464 | 15,297 | 15,790 |
Total operating expenses | 221,989 | 155,744 | 157,974 |
Operating income | 13,146 | 75,654 | 61,339 |
Interest expense | 33,513 | 4,252 | 11,261 |
(Gain) loss on cost and equity method investments, net | (3,350) | (4,370) | 694 |
Other (income) expense, net | (1,317) | (807) | 546 |
Income (loss) before provision for income taxes | (15,700) | 76,579 | 48,838 |
Provision (benefit) for income taxes | (8,106) | 21,121 | 12,571 |
Net income (loss) | $ (7,594) | $ 55,458 | $ 36,267 |
Earnings (loss) per share: | |||
Basic (in dollars per share) | $ (0.29) | $ 2.23 | $ 1.51 |
Diluted (in dollars per share) | $ (0.29) | $ 2.14 | $ 1.43 |
Weighted average shares outstanding: | |||
Basic (in shares) | 26,363 | 24,825 | 23,991 |
Diluted (in shares) | 26,363 | 25,975 | 25,323 |
Comprehensive Income (Loss) | |||
Net income (loss) | $ (7,594) | $ 55,458 | $ 36,267 |
Foreign currency translation gain (loss) | (7,841) | (3,502) | 1,521 |
Net change in cash flow hedges, net of tax | 108 | (1,359) | (382) |
Defined benefit plan liability adjustment, net of tax | (20) | (374) | 272 |
Other comprehensive income (loss) | (7,753) | (5,235) | 1,411 |
Comprehensive income (loss) | $ (15,347) | $ 50,223 | $ 37,678 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Cash flows from operating activities: | |||
Net income (loss) | $ (7,594) | $ 55,458 | $ 36,267 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 44,632 | 37,197 | 35,966 |
Debt related charges included in interest expense | 11,320 | 773 | 6,366 |
Inventory step-up amortization | 22,986 | 260 | 0 |
Stock-based compensation | 9,376 | 13,186 | 14,101 |
Non-cash (gain) loss on cost and equity method investments, net | (275) | 4,370 | (694) |
Other non-cash (gains) losses, net | 1,093 | (3,214) | 255 |
Deferred income taxes | (10,298) | 531 | (29,856) |
Changes in operating assets and liabilities, net of acquisitions: | |||
Accounts receivable | 3,684 | (11,731) | 7,379 |
Inventories | (25,752) | (6,726) | (11,508) |
Prepaid expenses and other assets | (1,861) | (3,281) | (353) |
Accounts payable | 3,129 | (970) | 1,307 |
Accrued expenses | (28,605) | 1,214 | (1,176) |
Income taxes payable | (9,906) | 2,949 | (2,687) |
Net cash provided by operating activities | 12,479 | 81,276 | 56,755 |
Cash flows from investing activities: | |||
Proceeds from sale of orthopaedic product lines | 0 | 2,655 | 4,746 |
Acquisition of property, plant and equipment | (44,616) | (24,827) | (18,858) |
Proceeds from sale of property, plant and equipment | 746 | 4 | 300 |
Proceeds from sale (purchase of) cost and equity method investments, net | (6,300) | 2,248 | (3,732) |
Acquisitions, net of cash acquired | (423,389) | (16,002) | 0 |
Other investing activities, net | 0 | 0 | (740) |
Net cash used in investing activities | (473,559) | (35,922) | (18,284) |
Cash flows from financing activities: | |||
Principal payments of long-term debt | (1,232,175) | (10,000) | (458,282) |
Proceeds from issuance of long-term debt, net of discount | 1,749,750 | 0 | 425,000 |
Issuance of common stock | 6,583 | 8,278 | 12,807 |
Payment of debt issuance costs | (45,933) | 0 | (2,802) |
Purchase of non-controlling interests | (9,875) | 0 | 0 |
Other financing activities, net | (440) | (655) | (81) |
Net cash provided by (used in) financing activities | 467,910 | (2,377) | (23,358) |
Effect of foreign currency exchange rates on cash and cash equivalents | (1,176) | (1,618) | 68 |
Net increase in cash and cash equivalents | 5,654 | 41,359 | 15,181 |
Cash and cash equivalents, beginning of year | 76,824 | 35,465 | 20,284 |
Cash and cash equivalents, end of year | $ 82,478 | $ 76,824 | $ 35,465 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Balance at Dec. 28, 2012 | $ 480,860 | $ 24 | $ 320,618 | $ (452) | $ 147,723 | $ 12,947 |
Balance, shares at Dec. 28, 2012 | 23,732 | (20) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 9,333 | 9,333 | ||||
Net shares issued (acquired) under stock incentive plans | 11,465 | $ 0 | 12,245 | $ (780) | ||
Net shares issued under stock incentive plans, shares | 636 | (17) | ||||
Income tax benefit from stock options, restricted stock and restricted stock units | 242 | 242 | ||||
Shares contributed to 401(k) Plan | 2,477 | $ 0 | 2,477 | $ 0 | ||
Shares contributed to 401(k) Plan, shares | 91 | 0 | ||||
Issuance of shares in connection with acquisition | 0 | |||||
Issuance of roll-over options in connection with acquisition | 0 | |||||
Net income (loss) | 36,267 | 36,267 | ||||
Total other comprehensive income (loss) | 1,411 | 1,411 | ||||
Balance at Jan. 03, 2014 | 542,055 | $ 24 | 344,915 | $ (1,232) | 183,990 | 14,358 |
Balance, shares at Jan. 03, 2014 | 24,459 | (37) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 8,921 | 8,921 | ||||
Net shares issued (acquired) under stock incentive plans | 3,465 | $ 1 | 7,754 | $ (4,290) | ||
Net shares issued under stock incentive plans, shares | 640 | (86) | ||||
Income tax benefit from stock options, restricted stock and restricted stock units | 4,357 | 4,357 | ||||
Shares contributed to 401(k) Plan | 4,341 | $ 0 | 126 | $ 4,215 | ||
Shares contributed to 401(k) Plan, shares | 0 | 95 | ||||
Issuance of shares in connection with acquisition | 0 | |||||
Issuance of roll-over options in connection with acquisition | 0 | |||||
Net income (loss) | 55,458 | 55,458 | ||||
Total other comprehensive income (loss) | (5,235) | (5,235) | ||||
Balance at Jan. 02, 2015 | 613,362 | $ 25 | 366,073 | $ (1,307) | 239,448 | 9,123 |
Balance, shares at Jan. 02, 2015 | 25,099 | (28) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 9,364 | 9,364 | ||||
Net shares issued (acquired) under stock incentive plans | 504 | $ 1 | 5,764 | $ (5,261) | ||
Net shares issued under stock incentive plans, shares | 585 | (107) | ||||
Income tax benefit from stock options, restricted stock and restricted stock units | 5,639 | 5,639 | ||||
Shares contributed to 401(k) Plan | 3,920 | $ 0 | 452 | $ 3,468 | ||
Shares contributed to 401(k) Plan, shares | 0 | 72 | ||||
Issuance of shares in connection with acquisition | 245,368 | $ 5 | 245,363 | |||
Issuance of shares in connection with acquisition, shares | 4,980 | |||||
Issuance of roll-over options in connection with acquisition | 4,508 | 4,508 | ||||
Purchase of non-controlling interests in subsidiaries | (16,693) | (16,693) | ||||
Net income (loss) | (7,594) | (7,594) | ||||
Total other comprehensive income (loss) | (7,753) | (7,753) | ||||
Balance at Jan. 01, 2016 | $ 850,625 | $ 31 | $ 620,470 | $ (3,100) | $ 231,854 | $ 1,370 |
Balance, shares at Jan. 01, 2016 | 30,664 | (63) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 01, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation – The consolidated financial statements include the accounts of Greatbatch, Inc. and its wholly owned subsidiaries (collectively, the “Company” or “Greatbatch”). All intercompany balances and transactions have been eliminated in consolidation. Nature of Operations – On October 27, 2015, the Company acquired all of the outstanding common stock of Lake Region Medical Holdings, Inc. (“Lake Region Medical”) for a total purchase price including debt assumed of approximately $1.77 billion . As a result, the Company now has three reportable segments: Greatbatch Medical, QiG Group (“QiG”), and Lake Region Medical. In February 2016, Greatbatch announced that its Board of Directors has approved the spin-off of a portion of its QiG segment through a tax-free distribution of its QiG Group LLC subsidiary to the stockholders of Greatbatch on a pro rata basis (the “Spin-off”). Immediately prior to completion of the Spin-off, QiG Group LLC will be converted into a corporation organized under the laws of Delaware and change its name to Nuvectra Corporation (“Nuvectra”). The Spin-off is expected to be completed in March 2016. As a result of the Lake Region Medical acquisition and the pending Spin-off, the Company is reevaluating its operating and reporting segments, which is expected to be finalized in 2016 once the corporate and management reporting structure realignment is completed. Note 19 “Business Segment, Geographic and Concentration Risk Information” contains additional information on our reporting segments. Simultaneous with the close of the Lake Region Medical acquisition, the Company also announced its intention to rename the combined entity Integer Holdings Corporation. Integer is defined as complete, whole, and comprehensive, and represents the joining of Greatbatch and Lake Region Medical as well as the combined company's product and service offerings provided to customers. The new name is subject to Greatbatch shareholder approval at the May 2016 annual meeting. Greatbatch Medical designs and manufactures products where Greatbatch either owns the intellectual property or has unique manufacturing and assembly expertise. These products include medical devices and components for the cardiac, neuromodulation, orthopaedics, portable medical, vascular and energy markets among others. The Greatbatch Medical segment also offers value-added assembly and design engineering services for medical devices that utilize its component products. The QiG segment focuses on the design and development of medical device systems and components. QiG is in the process of developing applications for its neurostimulation technology platform for emerging indications such as spinal cord stimulation (“SCS”), sacral nerve stimulation (“SNS”), and deep brain stimulation (“DBS”), among others. QiG’s Algostim, LLC (“Algostim”) subsidiary is focused on the development and commercialization of its Algovita SCS system (“Algovita”), the first application of its neurostimulation technology platform and received PMA approval in the fourth quarter of 2015. QiG’s PelviStim LLC (“PelviStim”) subsidiary is focused on the commercialization of QiG’s neurostimulation technology platform for SNS. The QiG segment also includes NeuroNexus Technologies, Inc. (“NeuroNexus”), and Centro de Construcción de Cardioestimuladores del Uruguay (“CCC”). The Spin-off is expected to consist of QiG Group LLC and its subsidiaries Algostim, PelviStim and NeuroNexus. The operations of CCC and certain other existing QiG research and development capabilities will be retained and not included as part of the Spin-off. Lake Region Medical has operated as a new segment for Greatbatch since it was acquired during the fourth quarter of 2015. This segment specializes in the design, development, and manufacturing of products across the medical component and device spectrum, primarily serving the cardio, vascular and advanced surgical markets. Lake Region Medical offers fully integrated outsourced manufacturing, regulatory and engineering services, contract manufacturing, finished device assembly services, original device development, and supply chain management to its customers. The Company’s customers include large multi-national original equipment manufacturers (“OEMs”) and their affiliated subsidiaries. Fiscal Year End – The Company utilizes a fifty-two , fifty-three week fiscal year ending on the Friday nearest December 31. Fiscal years 2015 , 2014 and 2013 ended on January 1, 2016 , January 2, 2015 and January 3, 2014 . Fiscal years 2015 and 2014 each contained fifty-two weeks, while fiscal year 2013 contained fifty-three weeks. Fair Value Measurements – Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e . the “exit price”) in an orderly transaction between market participants at the measurement date. Accounting Standards Codification (“ASC”) 820, Fair Value Measurements, establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows: Level 1 – Valuation is based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Level 1 valuations do not entail a significant degree of judgment. Level 2 – Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market. Level 3 – Valuation is based on unobservable inputs that are significant to the overall fair value measurement. The degree of judgment in determining fair value is greatest for Level 3 valuations. The availability of observable inputs can vary and is affected by a wide variety of factors, including, the type of asset/liability, whether the asset/liability is established in the marketplace, and other characteristics particular to the valuation. To the extent that a valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, assumptions are required to reflect those that market participants would use in pricing the asset or liability at the measurement date. Note 18 “Fair Value Measurements” contains additional information on assets and liabilities recorded at fair value in the consolidated financial statements. Cash and Cash Equivalents – Cash and cash equivalents consist of cash and highly liquid, short-term investments with maturities at the time of purchase of three months or less. The carrying amount of cash and cash equivalents approximated their fair value as of January 1, 2016 and January 2, 2015 based upon the short-term nature of these instruments. Concentration of Credit Risk – Financial instruments that potentially subject the Company to concentration of credit risk consist principally of accounts receivable. A significant portion of the Company’s sales and/or accounts receivable are to four customers, all in the medical device industry, and, as such, the Company is directly affected by the condition of those customers and that industry. However, the credit risk associated with trade receivables is partially mitigated due to the stability of those customers. The Company performs on-going credit evaluations of its customers. Note 19 “Business Segment, Geographic and Concentration Risk Information” contains information on sales and accounts receivable for these customers. The Company maintains cash deposits with major banks, which from time to time may exceed insured limits. The Company performs on-going credit evaluations of its banks. Allowance for Doubtful Accounts – The Company provides credit, in the normal course of business, to its customers in the form of trade receivables. Credit is extended based on evaluation of a customer’s financial condition and collateral is not required. The Company maintains an allowance for those customer receivables that it does not expect to collect. The Company accrues its estimated losses from uncollectable accounts receivable to the allowance based upon recent historical experience, the length of time the receivable has been outstanding and other specific information as it becomes available. Provisions to the allowance for doubtful accounts are charged to current operating expenses. Actual losses are charged against this allowance when incurred. The carrying amount of trade receivables approximated their fair value as of January 1, 2016 and January 2, 2015 based upon the short-term nature of these assets. Inventories – Inventories are stated at the lower of cost, determined using the first-in first-out method, or market. Write-downs for excess, obsolete or expired inventory are based primarily on how long the inventory has been held as well as estimates of forecasted net sales of that product. A significant change in the timing or level of demand for products may result in recording additional write-downs for excess, obsolete or expired inventory in the future. Note 4 “Inventories” contains additional information on the Company’s inventory. Property, Plant and Equipment (“PP&E”) – PP&E is carried at cost less accumulated depreciation. Depreciation is computed by the straight-line method over the estimated useful lives of the assets, as follows: buildings and building improvements 7 - 40 years; machinery and equipment 3 - 10 years; office equipment 3 - 10 years; and leasehold improvements over the remaining lives of the improvements or the lease term, if less. The cost of repairs and maintenance are expensed as incurred; renewals and betterments are capitalized. Upon retirement or sale of an asset, its cost and related accumulated depreciation or amortization is removed from the accounts and any gain or loss is recorded in operating income or expense. Note 6 “Property, Plant and Equipment, Net” contains additional information on the Company’s PP&E. Business Combinations – The Company records its business combinations under the acquisition method of accounting. Under the acquisition method of accounting, the Company allocates the purchase price of each acquisition to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values at the date of acquisition. The fair value of identifiable intangible assets is based upon detailed valuations that use various assumptions made by management. Any excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired is allocated to goodwill. All direct acquisition-related costs are expensed as incurred. In circumstances where an acquisition involves a contingent consideration arrangement, the Company recognizes a liability equal to the fair value of the contingent payments it expects to make as of the acquisition date. The Company re-measures this liability each reporting period and records changes in the fair value through Other Operating Expenses, Net. Increases or decreases in the fair value of the contingent consideration liability can result from changes in discount periods and rates, as well as changes in the timing, amount of, or the likelihood of achieving the applicable contingent consideration. Amortizing Intangible Assets – Amortizing intangible assets consists primarily of purchased technology and patents, and customer lists. The Company amortizes its definite-lived intangible assets over their estimated useful lives utilizing an accelerated or straight-line method of amortization, which approximates the projected cash flows used to fair value those intangible assets at the time of acquisition. When the straight-line method of amortization is utilized, the estimated useful life of the intangible asset is shortened to assure that recognition of amortization expense corresponds with the expected cash flows. The amortization period for the Company’s amortizing intangible assets are as follows: purchased technology and patents 5 - 15 years; customer lists 7 - 20 years and other intangible assets 1 - 10 years. Refer to Note 7 “Intangible Assets” for additional information on the Company’s amortizing intangible assets. Impairment of Long-Lived Assets – The Company assesses the impairment of definite-lived long-lived assets or asset groups when events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that are considered in deciding when to perform an impairment review include: a significant decrease in the market price of the asset or asset group; a significant change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition; a significant change in legal factors or in the business climate that could affect the value of a long-lived asset or asset group, including an action or assessment by a regulator; an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction; a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group; or a current expectation that, more likely than not, a long-lived asset or asset group will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The term more likely than not refers to a level of likelihood that is more than 50 percent . Potential recoverability is measured by comparing the carrying amount of the asset or asset group to its related total future undiscounted cash flows. If the carrying value is not recoverable, the asset or asset group is considered to be impaired. Impairment is measured by comparing the asset or asset group’s carrying amount to its fair value. When it is determined that useful lives of assets are shorter than originally estimated, and no impairment is present, the rate of depreciation is accelerated in order to fully depreciate the assets over their new shorter useful lives. Goodwill and other indefinite lived intangible assets recorded are not amortized but are periodically tested for impairment. The Company assesses goodwill for impairment on the last day of each fiscal year, or more frequently if certain events occur as described above. Goodwill is evaluated for impairment through the comparison of the fair value of the reporting units to their carrying values. When evaluating goodwill for impairment, the Company may first perform an assessment of qualitative factors to determine if the fair value of the reporting unit is more-likely-than-not greater than its carrying amount. This qualitative assessment is referred to as a “step zero ” approach. If, based on the review of the qualitative factors, the Company determines it is more-likely-than-not that the fair value of the reporting unit is greater than its carrying value, the required two-step impairment test can be bypassed. If the Company does not perform a step zero assessment or if the fair value of the reporting unit is more-likely-than-not less than its carrying value, the Company must perform a two-step impairment test, and calculate the estimated fair value of the reporting unit. If, based upon the two-step impairment test, it is determined that the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of the goodwill within the reporting unit is less than its carrying value. Under the two-step approach, fair values for reporting units are determined based on discounted cash flows and market multiples. The Company completed its annual goodwill impairment assessment for 2015 by performing a step zero qualitative analysis. As part of this analysis, the Company evaluated factors including, but not limited to, macro-economic conditions, market and industry conditions, cost factors, competitive environment, share price fluctuations, results of the last impairment test, and the operational stability and the overall financial performance of the reporting units. After completing the analysis, the Company determined that it was more likely than not that its reporting units fair values are greater than the reporting units carrying values and the two-step impairment test is not necessary. Other indefinite lived intangible assets are assessed for impairment on the last day of each fiscal year, or more frequently if certain events occur as described above, by comparing the fair value of the intangible asset to its carrying value. The fair value is determined by using the income approach. Note 7 “Intangible Assets” contains additional information on the Company’s long-lived intangible assets. Debt Issuance Costs and Discounts – In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” This ASU requires that debt issuance costs be presented as a direct reduction to the carrying amount of the related debt in the balance sheet rather than as a deferred charge, consistent with the presentation of discounts on debt. ASU 2015-15, “Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements,” was issued in August 2015 to clarify that the U.S. Securities and Exchange Commission (“SEC”) staff would not object to an entity deferring and presenting debt issuance costs related to a line-of-credit arrangement as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. As permitted, during the fourth quarter of 2015, the Company elected to early adopt these ASUs and has elected to retrospectively apply this guidance. As a result, the Company has classified $35.9 million and $0.9 million as of January 1, 2016 and January 2, 2015, respectively, of deferred debt issuance costs associated with its term-debt from Other Assets to Long-Term Debt in the Consolidated Balance Sheets. Deferred debt issuance costs associated with the Company’s revolving credit facility of $4.8 million and $2.2 million as of January 1, 2016 and January 2, 2015, respectively, are classified within Other Assets. Debt issuance costs incurred in connection with the Company’s issuance of its revolving credit facility are amortized to Interest Expense on a straight-line basis over the contractual term of the credit facility. Unamortized debt issuance costs and unamortized debt discounts related to the Company’s term-debt are recorded as a reduction of the carrying value of the related debt. These debt issuance costs and discounts are amortized to Interest Expense using the effective interest method over the period from the date of issuance to the put option date (if applicable) or the maturity date, whichever is earlier. The amortization of debt issuance costs and discounts are included in Debt Related Amortization Included in Interest Expense in the Consolidated Statements of Cash Flows. Note 9 “Debt” contains additional information on the Company’s debt issuance costs and discounts. Other Long-Term Assets – Other long-term assets also include investments in equity securities of entities that are not publicly traded and which do not have readily determinable fair values. The Company accounts for investments in these entities under the cost or equity method depending on the type of ownership interest, as well as the Company’s ability to exercise influence over these entities. Equity method investments are initially recorded at cost, and are subsequently adjusted to reflect the Company’s share of earnings or losses of the investee. Cost method investments are recorded at historical cost. Each reporting period, management evaluates these cost and equity method investments to determine if there are any events or circumstances that are likely to have a significant effect on the fair value of the investment. Examples of such impairment indicators include, but are not limited to: a recent sale or offering of similar shares of the investment at a price below the Company’s cost basis; a significant deterioration in earnings performance; a significant change in the regulatory, economic or technological environment of the investee; or a significant doubt about an investee’s ability to continue as a going concern. If an impairment indicator is identified, management will estimate the fair value of the investment and compare it to its carrying value. The estimation of fair value considers all available financial information related to the investee, including, but not limited to, valuations based on recent third-party equity investments in the investee. If the fair value of the investment is less than its carrying value, the investment is impaired and a determination as to whether the impairment is other-than-temporary is made. Impairment is deemed to be other-than-temporary unless the Company has the ability and intent to hold the investment for a period sufficient for a market recovery up to the carrying value of the investment. Further, evidence must indicate that the carrying value of the investment is recoverable within a reasonable period. For other-than-temporary impairments, an impairment loss is recognized equal to the difference between the investment’s carrying value and its fair value. The Company has determined that these investments are not considered variable interest entities. The Company’s exposure related to these entities is limited to its recorded investment. These investments are in start-up research and development companies whose fair value is highly subjective in nature and subject to future fluctuations, which could be significant. Income Taxes – The consolidated financial statements of the Company have been prepared using the asset and liability approach in accounting for income taxes, which requires the recognition of deferred income taxes for the expected future tax consequences of net operating losses, credits, and temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided on deferred tax assets if it is determined, within each taxing jurisdiction, that it is more likely than not that the asset will not be realized. The Company accounts for uncertain tax positions using a more likely than not recognition threshold. The evaluation of uncertain tax positions is based on factors including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. These tax positions are evaluated on a quarterly basis. The Company recognizes interest expense related to uncertain tax positions as Provision for Income Taxes. Penalties, if incurred, are recognized as a component of Selling, General and Administrative Expenses (“SG&A”). The Company and its subsidiaries file a consolidated U.S. federal income tax return. State tax returns are filed on a combined or separate basis depending on the applicable laws in the jurisdictions where the tax returns are filed. The Company also files foreign tax returns on a separate company basis in the countries in which it operates. In November 2015, the FASB issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes.” This ASU requires entities that present a classified balance sheet to classify all deferred income taxes as noncurrent assets or noncurrent liabilities. Previous accounting principles required an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified balance sheet. As permitted, during the fourth quarter of 2015, the Company elected to early adopt this ASU and has elected to prospectively apply its guidance. As a result, all deferred tax assets or liabilities shown in the Consolidated Balance Sheet as of January 1, 2016, are classified as noncurrent. Prior periods were not retrospectively adjusted for the adoption of this ASU. See Note 14 “Income Taxes” for additional information. Convertible Subordinated Notes (“CSN”) – For convertible debt instruments that may be settled in cash upon conversion, the Company accounts for the liability and equity components of those instruments in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. Upon issuance, the Company determined the carrying amount of the liability component of CSN by measuring the fair value of a similar liability that does not have the associated conversion option. The carrying amount of the conversion option was then determined by deducting the fair value of the liability component from the initial proceeds received from the issuance of CSN. The carrying amount of the conversion option was recorded in Additional Paid-In Capital with an offset to Long-Term Debt and was amortized using the effective interest method over the period from the date of issuance to the maturity date. The amortization of discount related to the Company’s convertible debt instruments is included in Debt Related Amortization Included in Interest Expense in the Consolidated Statements of Cash Flows. See Note 9 “Debt” for additional information. Derivative Financial Instruments – The Company recognizes all derivative financial instruments in its consolidated financial statements at fair value . Changes in the fair value of derivative instruments are recorded in earnings unless hedge accounting criteria are met. The Company designated its interest rate swaps (See Note 9 “Debt”) and foreign currency contracts (See Note 15 “Commitments and Contingencies”) entered into as cash flow hedges. The effective portion of the changes in fair value of these cash flow hedges is recorded each period, net of tax, in Accumulated Other Comprehensive Income until the related hedged transaction occurs. Any ineffective portion of the changes in fair value of these cash flow hedges is recorded in earnings. In the event the hedged cash flow for forecasted transactions does not occur, or it becomes probable that they will not occur, the Company reclassifies the amount of any gain or loss on the related cash flow hedge to income (expense) at that time. Cash flows related to these derivative financial instruments are included in cash flows from operating activities. The cash flows from the termination of interest rate swap agreements are reported as operating activities in the consolidated statements of cash flows. Revenue Recognition – The Company recognizes revenue when it is realized or realizable and earned. This occurs when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable (including any price concessions under long-term agreements), the buyer is obligated to pay us (i.e., not contingent on a future event), the risk of loss is transferred, there is no obligation of future performance, collectability is reasonably assured and the amount of future returns can reasonably be estimated. With regards to the Company’s customers (including distributors), those criteria are met when title passes, generally at the point of shipment. Currently, the revenue recognition policy is the same for Greatbatch Medical, Lake Region Medical and QiG. In general, for customers with long-term contracts, we have negotiated fixed pricing arrangements. During new contract negotiations, price level decreases (concessions) for future sales may be offered to customers in exchange for volume and/or long-term commitments. Once the new contracts are signed, these prices are fixed and determinable for all future sales. The Company includes shipping and handling fees billed to customers in Sales. Shipping and handling costs associated with inbound and outbound freight are recorded in Cost of Sales. Taxes collected from customers relating to product sales and remitted to governmental authorities are accounted for on a net basis. Accordingly, such taxes are excluded from Sales and Cost of Sales. In certain instances the Company obtains component parts from its customers that are included in the final product sold back to the same customer. These amounts are excluded from Sales and Cost of Sales recognized by the Company. The cost of these customer supplied component parts amounted to $44.3 million , $48.1 million and $ 45.3 million in fiscal years 2015 , 2014 and 2013 , respectively. Environmental Costs – Environmental expenditures that relate to an existing condition caused by past operations and that do not provide future benefits are expensed as incurred. Liabilities are recorded when environmental assessments are made, the requirement for remedial efforts is probable and the amount of the liability can be reasonably estimated. Liabilities are recorded generally no later than the completion of feasibility studies. The Company has an ongoing monitoring and identification process to assess how the activities, with respect to known exposures, are progressing against the recorded liabilities, as well as to identify other potential remediation sites that are presently unknown. Restructuring – The Company continually evaluates alternatives to align the business with the changing needs of its customers and to lower operating costs. This includes the realignment of its existing manufacturing capacity, facility closures, or similar actions, either in the normal course of business or pursuant to significant restructuring programs. These actions may result in employees receiving voluntary or involuntary employee termination benefits, which may be pursuant to contractual agreements. Voluntary termination benefits are accrued when an employee accepts the related offer. Involuntary termination benefits are accrued upon the commitment to a termination plan and the benefit arrangement is communicated to affected employees, or when liabilities are determined to be probable and estimable, depending on the existence of a substantive plan for severance or termination. All other exit costs are expensed as incurred. Refer to Note 13 “Other Operating Expenses, Net” for additional information. Product Warranties – The Company allows customers to return defective or damaged products for credit, replacement, or exchange. The Company warrants that its products will meet customer specifications and will be free from defects in materials and workmanship . The Company accrues its estimated exposure to warranty claims, through Cost of Sales, based upon recent historical experience and other specific information as it becomes available. Note 15 “Commitments and Contingencies” contains additional information on the Company’s product warranties. Research, Development and Engineering Costs, Net (“RD&E”) – RD&E costs are expensed as incurred. The primary costs are salary and benefits for personnel, material costs used in development projects and subcontracting costs. Cost reimbursements for certain engineerin |
Acquisitions
Acquisitions | 12 Months Ended |
Jan. 01, 2016 | |
Business Combinations [Abstract] | |
ACQUISITIONS | 2. ACQUISITIONS Lake Region Medical Holdings, Inc. On October 27, 2015 , the Company acquired all of the outstanding common stock of Lake Region Medical Holdings, Inc. for a total purchase price including debt assumed of approximately $1.77 billion . Lake Region Medical specializes in the design, development, and manufacturing of products across the medical component and device spectrum primarily serving the cardio, vascular and advanced surgical markets. The aggregate consideration paid by the Company to the stockholders of Lake Region Medical consisted of the following (in thousands): Cash consideration paid to Lake Region Medical stockholders and equity award holders $ 478,490 Fair value of shares of Greatbatch common stock issued to Lake Region Medical stockholders 245,368 Fair value of replacement stock options attributable to pre-acquisition service 4,508 Total purchase consideration $ 728,366 The fair value of the Greatbatch common stock issued as part of the consideration was determined based upon the closing stock price of Greatbatch’s shares as of the acquisition date. The fair value of the Greatbatch stock options issued as part of the consideration was determined utilizing a Black-Scholes option pricing model as of the acquisition date. Concurrently with the closing of the acquisition, the Company repaid all of the outstanding debt of Lake Region Medical of approximately $1.0 billion . The cash portion of the purchase price and the repayment of Lake Region Medical’s debt was primarily funded through a new senior secured credit facility and the issuance of senior notes. See Note 9 “Debt” for additional information regarding the Company’s debt. The Company believes that the combination of Greatbatch and Lake Region Medical brings together two highly complementary organizations that can provide a new level of industry leading capabilities and services to original equipment manufacturer customers while building value for shareholders. Through this acquisition, the Company believes that it will be at the forefront of innovating technologies and products that help change the face of healthcare, providing its customers with a distinct advantage as they bring complete systems and solutions to market. In turn, Greatbatch’s customers will be able to accelerate patient access to life enhancing therapies. The transaction is consistent with Greatbatch's strategy of achieving profitable growth and continuous improvement to drive margin expansion. The operating results of Lake Region Medical have been included in the Company’s Lake Region Medical segment from the date of acquisition. For 2015, Lake Region Medical added $138.6 million to the Company’s revenue and increased the Company’s net loss by approximately $17.4 million . This transaction was accounted for under the acquisition method of accounting. Accordingly, the cost of the acquisition was allocated to the Lake Region Medical assets acquired and liabilities assumed based on their fair values as of the closing date of the acquisition, with the amount exceeding the fair value of the net assets acquired recorded as goodwill. The value assigned to certain assets and liabilities are preliminary and are subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed become available. The final allocation may include changes to the acquisition date fair value of intangible assets, goodwill, deferred taxes, as well as operating assets and liabilities, some of which may result in material adjustments. The following table summarizes the preliminary allocation of Lake Region Medical purchase price to the assets acquired and liabilities assumed (in thousands): Assets acquired Current assets $ 269,815 Property, plant and equipment 216,473 Amortizing intangible assets 849,000 Indefinite-lived intangible assets 70,000 Goodwill 661,788 Other non-current assets 1,629 Total assets acquired 2,068,705 Liabilities assumed Current liabilities 102,485 Debt assumed 1,044,675 Other long-term liabilities 193,179 Total liabilities assumed 1,340,339 Net assets acquired $ 728,366 The preliminary fair values of the assets acquired were determined using one of three valuation approaches: market, income or cost. The selection of a particular method for a given asset depended on the reliability of available data and the nature of the asset, among other considerations. The market approach estimates the value for a subject asset based on available market pricing for comparable assets. The income approach estimates the value for a subject asset based on the present value of cash flows projected to be generated by the asset. The projected cash flows were discounted at a required rate of return that reflects the relative risk of the asset and the time value of money. The projected cash flows for each asset considered multiple factors from the perspective of a marketplace participant including revenue projections from existing customers, attrition trends, technology life-cycle assumptions, marginal tax rates and expected profit margins giving consideration to historical and expected margins. The cost approach estimates the value for a subject asset based on the cost to replace the asset and reflects the estimated reproduction or replacement cost for the asset, less an allowance for loss in value due to depreciation or obsolescence, with specific consideration given to economic obsolescence if indicated. These fair value measurement approaches are based on significant unobservable inputs, including management estimates and assumptions. Current Assets and Liabilities – The fair value of current assets and liabilities, excluding inventory, was assumed to approximate their carrying value as of the acquisition date due to the short-term nature of these assets and liabilities. The fair value of in-process and finished goods inventory acquired was estimated by applying a version of the market approach called the comparable sales method. This approach estimates the fair value of the assets by calculating the potential revenue generated from selling the inventory and subtracting from it the costs related to the completion and sale of that inventory and a reasonable profit allowance. Based upon this methodology, the Company recorded the inventory acquired at fair value resulting in an increase in inventory of $23.0 million . Property, Plant and Equipment – The fair value of PP&E acquired was estimated by applying the cost approach for personal property, buildings and building improvements and the market approach for land. The cost approach was applied by developing a replacement cost and adjusting for depreciation and obsolescence. The value of the land acquired was derived from market prices for comparable properties. Intangible Assets – The purchase price was allocated to intangible assets as follows (dollars in thousands): Amortizing Intangible Assets Fair Value Assigned Weighted Average Amortization Period (Years) Estimated Useful Life (Years) Weighted Average Discount Rate Technology $ 160,000 7 19 11.5% Customer lists 689,000 14 29 11.5% $ 849,000 13 27 11.5% Indefinite-lived Intangible Assets Trademarks and tradenames $ 70,000 N/A N/A 11.5% The weighted average amortization period is less than the estimated useful life, as the Company is using an accelerated amortization method, which approximates the distribution of cash flows used to fair value those intangible assets. Technology – Technology consists of technical processes, patented and unpatented technology, manufacturing know-how, trade secrets and the understanding with respect to products or processes that have been developed by Lake Region Medical and that will be leveraged in current and future products. The fair value of technology acquired was determined utilizing the relief from royalty method, a form of the income approach, with a royalty rate that ranged from 0.5% to 7% . The estimated useful life of the technology is based upon management’s estimate of the product life cycle associated with the technology before they will be replaced by new technologies. Customer Lists – Customer lists represent the estimated fair value of non-contractual customer relationships Lake Region Medical has as of the acquisition date. The primary customers of Lake Region Medical include large original equipment manufacturers in various geographic locations around the world. These relationships were valued separately from goodwill at the amount that an independent third party would be willing to pay for these relationships. The fair value of customer lists was determined using the multi-period excess-earnings method, a form of the income approach. The estimated useful life of the existing customer base was based upon the historical customer annual attrition rate of 5% , as well as management’s understanding of the industry and product life cycles. Trademarks and Tradenames – Trademarks and tradenames represent the estimated fair value of Lake Region Medical’s corporate and product names. These tradenames were valued separately from goodwill at the amount that an independent third party would be willing to pay for use of these names. The fair value of the trademarks and tradenames was determined by utilizing the relief from royalty method, a form of the income approach, with a royalty rate that ranged from 0 .25% to 1% . Trademarks and tradenames were assumed to have an indefinite useful life based upon the significant value the Lake Region Medical name has with OEMs in the medical component and device industries, their long history of being an industry leader and producing quality and innovative components, and given managements current intention of using this tradename indefinitely, which was assumed to be consistent with what a reasonable market participant would also assume. Goodwill – The excess of the purchase price over the fair value of net tangible and intangible assets acquired and liabilities assumed was allocated to goodwill. Various factors contributed to the establishment of goodwill, including the value of Lake Region Medical’s highly trained assembled work force and management team, the incremental value resulting from Lake Region Medical’s industry leading capabilities and services to OEMs, enhanced synergies, and the expected revenue growth over time that is attributable to increased market penetration from future products and customers. The goodwill acquired in connection with the acquisition was allocated to the Lake Region Medical segment and is not deductible for tax purposes. Long-term Debt – The fair value of long-term debt was assumed to be equal to what was paid by Greatbatch at the time of closing in order to retire the debt, including prepayment penalties and fees. Centro de Construcción de Cardioestimuladores del Uruguay On August 12, 2014 , the Company purchased all of the outstanding common stock of Centro de Construcción de Cardioestimuladores del Uruguay , headquartered in Montevideo, Uruguay. CCC is an active implantable neuromodulation medical device systems developer and manufacturer that produces a range of medical devices including implantable pulse generators, programmer systems, battery chargers, patient wands and leads. This acquisition allows the Company to more broadly partner with medical device companies, complements the Company’s core discrete technology offerings and enhances the Company’s medical device innovation efforts. This transaction was accounted for under the acquisition method of accounting. Accordingly, the operating results of CCC have been included in the Company’s QiG segment from the date of acquisition. For 2014, CCC added approximately $ 5.8 million to the Company’s revenue and increased the Company’s net income by $1.2 million . The aggregate purchase price of $19.8 million was funded with cash on hand. The cost of the acquisition was allocated to the assets acquired and liabilities assumed from CCC based on their fair values as of the closing date of the acquisition, with the amount exceeding the fair value of the net assets acquired recorded as goodwill. The valuation of the assets acquired and liabilities assumed from CCC was finalized during 2015 and did not result in a material adjustment to the original valuation of net assets acquired, including goodwill and therefore was not reflected as a retrospective adjustment to the historical financial statements. The following table summarizes the allocation of the CCC purchase price to the assets acquired and liabilities assumed as of the acquisition date (in thousands): Assets acquired Current assets $ 10,670 Property, plant and equipment 1,131 Amortizing intangible assets 6,100 Goodwill 8,296 Total assets acquired 26,197 Liabilities assumed Current liabilities 4,842 Deferred income taxes 1,590 Total liabilities assumed 6,432 Net assets acquired $ 19,765 The fair values of the assets acquired were determined using one of three valuation approaches: market, income or cost. The selection of a particular method for a given asset depended on the reliability of available data and the nature of the asset, among other considerations. Current Assets and Liabilities – The fair value of current assets and liabilities, excluding inventory, was assumed to approximate their carrying value as of the acquisition date due to the short-term nature of these assets and liabilities. The fair value of in-process and finished goods inventory acquired was estimated by applying a version of the market approach called the comparable sales method. This approach estimates the fair value of the assets by calculating the potential revenue generated from selling the inventory and subtracting from it the costs related to the completion and sale of that inventory and a reasonable profit allowance. Based upon this methodology, the Company recorded the inventory acquired at fair value resulting in an increase in inventory of $0.3 million . Intangible Assets – The purchase price was allocated to intangible assets as follows (dollars in thousands): Amortizing Intangible Assets Fair Value Assigned Weighted Average Amortization Period (Years) Weighted Average Discount Rate Technology $ 1,400 10 18% Customer lists 4,600 10 18% Trademarks and tradenames 100 2 18% $ 6,100 10 18% Technology – Technology consists of technical processes, unpatented technology, manufacturing know-how, trade secrets and the understanding with respect to products or processes that have been developed by CCC and that will be leveraged in current and future products. The fair value of technology acquired was determined utilizing the relief from royalty method, a form of the income approach, with a royalty rate of 3% . The weighted average amortization period of the technology is based upon management’s estimate of the product life cycle associated with technology before they will be replaced by new technologies. Customer Lists – Customer lists represent the estimated fair value of non-contractual customer relationships CCC has as of the acquisition date. The primary customers of CCC include medical device companies in various geographic locations around the world. These relationships were valued separately from goodwill at the amount that an independent third party would be willing to pay for these relationships. The fair value of customer lists was determined using the multi-period excess-earnings method, a form of the income approach. The weighted average amortization period of the existing customer base was based upon the historical customer annual attrition rate of 15% , as well as management’s understanding of the industry and product life cycles. Trademarks and Tradenames – Trademarks and tradenames represent the estimated fair value of corporate and product names acquired from CCC. These tradenames were valued separately from goodwill at the amount that an independent third party would be willing to pay for use of these names. The fair value of the trademarks and tradenames was determined by utilizing the relief from royalty method, a form of the income approach, with a 0.5% royalty rate. Goodwill – The excess of the purchase price over the fair value of net tangible and intangible assets acquired and liabilities assumed was allocated to goodwill. Various factors contributed to the establishment of goodwill, including: the value of CCC’s highly trained assembled work force and management team; the incremental value that CCC’s technology will bring to QiG’s medical devices; and the expected revenue growth over time that is attributable to increased market penetration from future products and customers. The goodwill acquired in connection with the CCC acquisition was allocated to the QiG business segment and is not deductible for tax purposes. Pro Forma Results (Unaudited) – The following unaudited pro forma information presents the consolidated results of operations of the Company, Lake Region Medical, and CCC as if those acquisitions occurred as of the beginning of fiscal years 2014 (Lake Region Medical) and 2013 (CCC) (in thousands, except per share amounts): Year Ended January 1, January 2, January 3, Sales $ 1,445,689 $ 1,441,782 $ 677,657 Net income (loss) 2,405 (25,865 ) 37,612 Earnings (loss) per share: Basic $ 0.08 $ (0.87 ) $ 1.57 Diluted $ 0.08 $ (0.87 ) $ 1.49 The unaudited pro forma information presents the combined operating results of Greatbatch, Lake Region Medical, and CCC, with the results prior to the acquisition date adjusted to include the pro forma impact of the amortization of acquired intangible assets, the adjustment to interest expense reflecting the amount borrowed in connection with the acquisitions at Greatbatch’s interest rate, and the impact of income taxes on the pro forma adjustments utilizing the applicable statutory tax rate. Fiscal year 2015 pro forma earnings were adjusted to exclude $32.3 million of acquisition-related costs (change-in-control payments, investment banking fees, professional fees), $9.5 million of debt related charges (commitment fees, swap termination fees, debt extinguishment fees) and $23.0 million of nonrecurring amortization expense related to the fair value step-up of inventory incurred in 2015 as a result of the acquisition of Lake Region Medical. Fiscal year 2014 supplemental pro forma earnings were adjusted to include these charges. The unaudited pro forma consolidated basic and diluted earnings (loss) per share calculations are based on the consolidated basic and diluted weighted average shares of Greatbatch. The unaudited pro forma results are presented for illustrative purposes only and do not reflect the realization of potential cost savings, and any related integration costs. Certain costs savings may result from the acquisition; however, there can be no assurance that these cost savings will be achieved. These pro forma results do not purport to be indicative of the results that would have been obtained, or to be a projection of results that may be obtained in the future. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Jan. 01, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | 3. SUPPLEMENTAL CASH FLOW INFORMATION Year Ended January 1, January 2, January 3, (in thousands) Noncash investing and financing activities: Common stock contributed to 401(k) Plan $ 3,920 $ 4,341 $ 2,477 Property, plant and equipment purchases included in accounts payable 7,401 2,926 2,103 Common stock issued in connection with Lake Region Medical acquisition 245,368 — — Replacement stock options issued in connection with Lake Region Medical acquisition 4,508 — — Purchase of non-controlling interests in subsidiaries included in accrued expenses 6,818 — — Cash paid during the year for: Interest 13,057 3,521 4,989 Income taxes 6,312 13,565 44,165 Acquisition of noncash assets 2,013,604 22,434 — Liabilities assumed 1,340,339 6,432 — |
Inventories
Inventories | 12 Months Ended |
Jan. 01, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 4. INVENTORIES Inventories are comprised of the following (in thousands): At January 1, January 2, Raw materials $ 107,296 $ 73,354 Work-in-process 93,729 38,930 Finished goods 51,141 16,958 Total $ 252,166 $ 129,242 |
Assets Held For Sale
Assets Held For Sale | 12 Months Ended |
Jan. 01, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
ASSETS HELD FOR SALE | 5. ASSETS HELD FOR SALE Assets held for sale included in Prepaid Expenses and Other Current Assets, is comprised of the following (in thousands): At Asset Business Segment January 1, January 2, Building and building improvements Greatbatch Medical $ 996 $ 1,635 During 2014, the Company transferred $2.1 million of assets relating to the Company’s Orvin, Switzerland property to assets held for sale and recognized a $0.4 million impairment charge that was recorded in Other Operating Expenses, Net. During 2015, the Company sold $0.6 million of these assets held for sale with no additional gain or loss recognized. Refer to Note 13 “Other Operating Expenses, Net” for additional information regarding this transaction and Note 18 “Fair Value Measurements” for information regarding the fair value of the assets. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Jan. 01, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | 6. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment are comprised of the following (in thousands): At January 1, January 2, Manufacturing machinery and equipment $ 285,068 $ 167,173 Buildings and building improvements 130,184 89,258 Information technology hardware and software 43,947 31,725 Leasehold improvements 36,745 31,170 Furniture and fixtures 16,243 14,045 Land and land improvements 21,774 10,816 Construction work in process 76,835 14,129 Other 852 629 611,648 358,945 Accumulated depreciation (232,156 ) (214,020 ) Total $ 379,492 $ 144,925 Depreciation expense for property, plant and equipment was as follows (in thousands): Year Ended January 1, January 2, January 3, Depreciation expense $ 27,136 $ 23,320 $ 22,799 Construction work in process at January 1, 2016 and January 2, 2015 includes asset purchases related to the Company’s 2014 investment in capacity and capabilities initiatives. Additionally, construction work in process also relates to routine purchases of machinery, equipment, and information technology assets to support normal recurring operations. Refer to Note 13 “Other Operating Expenses, Net” for a description of the Company’s significant capital investment projects. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Jan. 01, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | 7. INTANGIBLE ASSETS Amortizing intangible assets, net are comprised of the following (in thousands): Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net Carrying Amount At January 1, 2016 Purchased technology and patents $ 255,776 $ (83,708 ) 1,444 $ 173,512 Customer lists 761,857 (40,815 ) (986 ) 720,056 Other 4,534 (4,946 ) 821 409 Total amortizing intangible assets $ 1,022,167 $ (129,469 ) $ 1,279 $ 893,977 At January 2, 2015 Purchased technology and patents $ 95,776 $ (75,894 ) $ 1,966 $ 21,848 Customer lists 72,857 (31,460 ) 1,374 42,771 Other 4,534 (4,619 ) 803 718 Total amortizing intangible assets $ 173,167 $ (111,973 ) $ 4,143 $ 65,337 Aggregate intangible asset amortization expense is comprised of the following (in thousands): Year Ended January 1, January 2, January 3, Cost of sales $ 7,403 $ 6,201 $ 6,822 SG&A 9,681 7,009 5,800 RD&E 412 667 545 Total intangible asset amortization expense $ 17,496 $ 13,877 $ 13,167 Estimated future intangible asset amortization expense based upon the current carrying value is as follows (in thousands): Estimated Amortization Expense 2016 $ 37,854 2017 43,991 2018 44,894 2019 44,960 2020 45,467 Thereafter 676,811 Total estimated amortization expense $ 893,977 The change in indefinite-lived intangible assets during 2015 is as follows (in thousands): Trademarks and Tradenames At January 2, 2015 $ 20,288 Indefinite-lived intangible assets acquired 70,000 At January 1, 2016 $ 90,288 The change in goodwill during 2015 is as follows (in thousands): Greatbatch Medical QiG Lake Region Medical Total At January 2, 2015 $ 304,297 $ 50,096 $ — $ 354,393 Goodwill acquired (Note 2) — — 661,788 661,788 Foreign currency translation (368 ) — (2,243 ) (2,611 ) At January 1, 2016 $ 303,929 $ 50,096 $ 659,545 $ 1,013,570 As of January 1, 2016 , no accumulated impairment loss has been recognized for the goodwill allocated to the Company’s Greatbatch Medical, QiG or Lake Region Medical segments. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Jan. 01, 2016 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
ACCRUED EXPENSES | 8. ACCRUED EXPENSES Accrued expenses are comprised of the following (in thousands): At January 1, January 2, Salaries and benefits $ 37,579 $ 20,770 Profit sharing and bonuses 6,781 18,524 Accrued interest 9,378 195 Purchase of non-controlling interest in subsidiaries 6,818 — Severance and change in control payments 11,969 1,878 Warranty and customer rebates 7,205 660 Other 17,527 6,357 Total $ 97,257 $ 48,384 |
Debt
Debt | 12 Months Ended |
Jan. 01, 2016 | |
Debt Disclosure [Abstract] | |
DEBT | 9. DEBT Long-term debt is comprised of the following (in thousands): At January 1, January 2, Senior secured term loan A $ 375,000 $ — Senior secured term loan B 1,025,000 — 9.125% senior notes, due 2023 360,000 — Variable rate term loan — 187,500 Revolving line of credit — — Less unamortized discount on term loan B and debt issuance costs (45,947 ) (887 ) Total debt 1,714,053 186,613 Less current portion of long-term debt 29,000 11,250 Total long-term debt $ 1,685,053 $ 175,363 Senior Secured Credit Facilities – In connection with the Lake Region Medical acquisition, on October 27, 2015, the Company replaced its existing credit facility with new senior secured credit facilities (the “Senior Secured Credit Facilities”) consisting of (i) a $200 million revolving credit facility (the “Revolving Credit Facility”), (ii) a $375 million term loan A facility (the “TLA Facility”), and (iii) a $1,025 million term loan B facility (the “TLB Facility”). The TLA Facility and TLB Facility are collectively referred to as the “Term Loan Facilities.” The TLB facility was issued at a 1% discount. Term Loan Facilities The TLA Facility and TLB Facility mature on October 27, 2021 and October 27, 2022 , respectively. Interest rates on the TLA Facility, as well as the Revolving Credit Facility, are at the Company’s option, either at: (i) the prime rate plus the applicable margin, which will range between 0.75% and 2.25% , based on the Company’s Total Net Leverage Ratio, as defined in the Senior Secured Credit Facilities agreement or (ii) the applicable LIBOR rate plus the applicable margin, which will range between 1.75% and 3.25% , based on the Company’s Total Net Leverage Ratio. Interest rates on the TLB Facility are, at the Company’s option, either at: (i) the prime rate plus 3.25% or (ii) the applicable LIBOR rate plus 4.25% , with LIBOR subject to a 1.00% floor. Subject to certain conditions, one or more incremental term loan facilities may be added to the Term Loan Facilities so long as, on a pro forma basis, the Company’s first lien net leverage ratio does not exceed 4.25 :1.00. As of January 1, 2016 , the estimated fair value of TLB is $1,013 million , based on quoted market prices for the debt, recent sales prices for the debt and consideration of comparable debt instruments with similar interest rates and trading frequency, among other factors, and is classified as Level 2 measurements within the fair value hierarchy. The par amount of TLA approximated its fair value as of January 1, 2016 based upon the debt being variable rate in nature. Revolving Credit Facility The Revolving Credit Facility matures on October 27, 2020 . The Revolving Credit Facility also includes a $15 million sublimit for swingline loans and a $30 million sublimit for standby letters of credit (which will subsequently decrease to $25 million on April 27, 2016 ). The Company is required to pay a commitment fee on the unused portion of the Revolving Credit Facility, which will range between 0.175% and 0.25% , depending on the Company’s Total Net Leverage Ratio. As of January 1, 2016, there were no borrowings on the Revolving Credit Facility, but available borrowing capacity was $186.6 million after giving effect to $13.4 million of outstanding standby letters of credit. Subject to certain conditions, commitments under the Revolving Credit Facility may be increased through an incremental revolving facility so long as, on a pro forma basis, the Company’s first lien net leverage ratio does not exceed 4.25 :1.00. Covenants The Revolving Credit Facility and the TLA Facility contain covenants requiring (A) a maximum Total Net Leverage Ratio of 6.50 :1.00, subject to step downs and (B) a minimum interest coverage ratio of adjusted EBITDA (as defined in the Senior Secured Credit Facilities) to interest expense of not less than 3.00 :1.00. The TLB Facility does not contain any financial maintenance covenants. The Senior Secured Credit Facilities also contain negative covenants that restrict the Company’s ability to (i) incur additional indebtedness; (ii) create certain liens; (iii) consolidate or merge; (iv) sell assets, including capital stock of the Company’s subsidiaries; (v) engage in transactions with the Company’s affiliates; (vi) create restrictions on the payment of dividends or other amounts to Greatbatch Ltd. from the Company’s restricted subsidiaries; (vii) pay dividends on capital stock or redeem, repurchase or retire capital stock; (viii) pay, prepay, repurchase or retire certain subordinated indebtedness; (ix) make investments, loans, advances and acquisitions; (x) make certain amendments or modifications to the organizational documents of the Company or its subsidiaries or the documentation governing other senior indebtedness of the Company; and (xi) change the Company’s type of business. These negative covenants are subject to a number of limitations and exceptions that are described in the Senior Secured Credit Facilities agreement. As of January 1, 2016 , the Company was in compliance with all financial and negative covenants under the Senior Secured Credit Facilities. The Senior Secured Credit Facilities provide for customary events of default. Upon the occurrence and during the continuance of an event of default, the outstanding advances and all other obligations under the Senior Secured Credit Facilities become immediately due and payable. The Senior Secured Credit Facilities are guaranteed by the Company, as a parent guarantor, and all of the Company’s present and future direct and indirect wholly-owned domestic subsidiaries (other than Greatbatch Ltd., non-wholly owned joint ventures and certain other excluded subsidiaries). The Senior Secured Credit Facilities are secured, subject to certain exceptions, by a first priority security interest in; 1) the present and future shares of capital stock of (or other ownership or profit interests in) Greatbatch Ltd. and each guarantor (except the Company); 2) sixty-six percent ( 66% ) of all present and future shares of voting capital stock of each specified first-tier foreign subsidiary; 3) substantially all of the Company’s, Greatbatch Ltd.’s and each other guarantor’s other personal property; and 4) all proceeds and products of the property and assets of the Company, Greatbatch Ltd. and the other guarantors. 9.125% Senior Notes due 2023 – On October 27, 2015, the Company completed a private offering of $360 million aggregate principal amount of 9.125% senior notes due on November 1, 2023 (the “Senior Notes”). All the Senior Notes are outstanding as of January 1, 2016 . Interest on the Senior Notes is payable on May 1 and November 1 of each year, beginning on May 1, 2016 . The Company may redeem the Senior Notes, in whole or in part, prior to November 1, 2018 at a price equal to 100% of the principal amount thereof plus a “make-whole” premium. Prior to November 1, 2018, the Company may redeem up to 40% of the aggregate principal amount of the Senior Notes using the proceeds from certain equity offerings at a redemption price equal to 109.125% of the aggregate principal amount of the Senior Notes. As of January 1, 2016 , the estimated fair value of the Senior Notes are $354.6 million , based on quoted market prices of these notes, recent sales prices for the notes and consideration of comparable debt instruments with similar interest rates and trading frequency, among other factors, and is classified as Level 2 measurements within the fair value hierarchy. The Senior Notes are senior unsecured obligations of the Company. The Senior Notes contain restrictive covenants that, among other things, limit the ability of the Company to: (i) incur or guarantee additional indebtedness or issue certain disqualified stock or preferred stock; (ii) create certain liens; (iii) pay dividends or make distributions in respect of capital stock; (iv) make certain other restricted payments; (v) enter into agreements that restrict certain dividends or other payments; (vi) enter into sale-leaseback agreements; (vii) engage in certain transactions with affiliates; and (viii) consolidate or merge with, or sell substantially all of their assets to, another person. These covenants are subject to a number of limitations and exceptions that are described in the indenture agreement of the Senior Notes. The Senior Notes provide for customary events of default, subject in certain cases to customary cure periods, in which the Senior Notes and any unpaid interest would become due and payable. As of January 1, 2016 , the weighted average interest rate on all outstanding borrowings is 5.69% . Contractual maturities of the Company’s debt facilities for the next five years and thereafter, excluding any discounts or premiums, as of January 1, 2016 are as follows (in thousands): 2016 $ 29,000 2017 31,344 2018 40,719 2019 47,750 2020 47,750 Thereafter 1,563,437 Total $ 1,760,000 Interest Rate Swaps – From time to time, the Company enters into interest rate swap agreements in order to hedge against potential changes in cash flows on its outstanding variable rate debt. During 2012, the Company entered into a three -year $150 million interest rate swap, which amortized $50 million per year. During 2014, the Company entered into an additional interest rate swap. The first $45 million of notional amount of the swap was effective February 20, 2015 , and the second $45 million of notional amount was scheduled to be effective February 22, 2016 . These swaps were accounted for as cash flow hedges. As a result of the Lake Region Medical acquisition, the forecasted cash flows that the Company’s interest rate swaps were hedging were no longer expected to occur. Accordingly, during 2015, the Company recognized an additional $2.8 million charge in Interest Expense relating to the termination of the interest rate swap contracts. On October 27, 2015, the Company terminated its outstanding interest rate swap agreements resulting in a $2.8 million payment to the interest rate swap counterparty. As of January 1, 2016 , the Company has no interest rate swap agreements outstanding. No portion of the change in fair value of the Company’s interest rate swaps during 2015 , 2014 , or 2013 were considered ineffective. The amount recorded as Interest Expense during 2015 , 2014 , and 2013 related to the Company’s interest rate swaps was $3.5 million , $0.5 million and $0.5 million , respectively. Convertible Subordinated Notes – In March 2007, the Company issued $197.8 million of CSN at a 5% discount. CSN accrued interest at 2.25% per annum. The effective interest rate of CSN, which took into consideration the amortization of the discount and deferred fees related to the issuance of these notes, was 8.5% . On February 20, 2013 , the Company redeemed all outstanding CSN. The contractual interest and discount amortization for CSN were as follows (in thousands): Year Ended January 1, January 2, January 3, Contractual interest $ — $ — $ 634 Discount amortization — — 5,368 Debt Issuance Costs and Discounts – In conjunction with the issuance of the Senior Secured Credit Facilities and the Senior Notes, the Company incurred $45.9 million of debt issuance costs. As stated in Note 1, the Company has elected to early-adopt ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” Following this ASU, unamortized debt issuance costs of $35.9 million and $0.9 million have been recorded as a reduction of the carrying value of the related debt as of January 1, 2016 and January 2, 2015, respectively. Additionally, as of January 1, 2016 and January 2, 2015, $4.8 million and $2.2 million , respectively, of debt issuance costs attributable to the Company’s revolving credit facilities remain recorded as a component of Other Assets on the Consolidated Balance Sheets. These costs will amortize into Interest Expense over the terms of the related credit facilities. The change in deferred debt issuance costs related to the Company’s revolving credit facilities is as follows (in thousands): At January 3, 2014 $ 2,786 Amortization during the period (586 ) At January 2, 2015 2,200 Financing costs deferred 4,152 Write-off during the period (907 ) Amortization during the period (654 ) At January 1, 2016 $ 4,791 The change in unamortized discount and debt issuance costs related to the Term Loan Facilities and Senior Notes is as follows (in thousands): Debt Issuance Costs Unamortized Discount on TLB Facility Total At January 3, 2014 $ 1,074 $ — $ 1,074 Amortization during the period (187 ) — (187 ) At January 2, 2015 887 — 887 Financing costs incurred 41,781 10,250 52,031 Write-off during the period (732 ) — (732 ) Amortization during the period (6,028 ) (211 ) (6,239 ) At January 1, 2016 $ 35,908 $ 10,039 $ 45,947 During 2015, the Company wrote off $1.6 million of debt issuance costs in connection with the extinguishment and modification of its term loan and revolving line of credit, respectively, which is included in Interest Expense on the Consolidated Statements of Operations. |
Benefit Plans
Benefit Plans | 12 Months Ended |
Jan. 01, 2016 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |
BENEFIT PLANS | 10. BENEFIT PLANS Savings Plan – The Company sponsors a defined contribution 401(k) plan, for its U.S. based employees. The plan provides for the deferral of employee compensation under Section 401(k) and a discretionary Company match. In 2015 , 2014 , and 2013 , this match was 35% per dollar of participant deferral, up to 6% of the total compensation for legacy Greatbatch associates. Net costs related to this defined contribution plan were $2.3 million in 2015 , $2.2 million in 2014 , and $2.0 million in 2013 . In addition to the above, under the terms of the 401(k) plan document there is an annual discretionary defined contribution of up to 4% of each legacy Greatbatch employee’s eligible compensation based upon the achievement of certain performance targets. This amount is contributed to the 401(k) plan in the form of Company stock. Compensation cost recognized related to the defined contribution plan was $0.0 million , $4.2 million , $4.8 million in 2015 , 2014 , and 2013, respectively. As of January 1, 2016 , the 401(k) Plan held approximately 580,000 shares of Company stock. Subsequent to the Lake Region Medical acquisition, the Company continued the 401(k) plan previously provided to Lake Region Medical employees. This plan is available to most Lake Region employees whereby employees are allowed to contribute up to 50% of gross salary. The Company matches 50% of an employee’s contributions for the first 6% of the employee’s gross salary at a maximum contribution rate per employee of 3% of the employee’s gross salary. The employee’s contributions vest immediately, while the Company’s contributions vest over a five -year period. Net costs related to this defined contribution plan since the date of acquisition was $0.8 million in 2015. Defined Benefit Plans – The Company is required to provide its employees located in Switzerland, Mexico, France, and Germany certain statutorily mandated defined benefits. Under these plans, benefits accrue to employees based upon years of service, position, age and compensation. The defined benefit pension plan provided to the Company’s employees located in Switzerland is a funded contributory plan, while the plans that provide benefits to the Company’s employees located in Mexico, France, and Germany are unfunded and noncontributory. The liability and corresponding expense related to these benefit plans is based on actuarial computations of current and future benefits for employees. During 2012, the Company transferred most major functions performed at its facilities in Switzerland into other existing facilities. As a result, the Company curtailed its defined benefit plan provided to employees at those Swiss facilities during 2012. In accordance with ASC 715, this gain was recognized in Other Operating Expenses, Net as the related employees were terminated. Since Swiss plan assets were sufficient to cover all plan liabilities, during 2012 the plan assets were transferred into cash. During 2013, the plan assets that remained after settlement payments were made were transferred to an AA- rated insurance carrier who bears the pension risk and longevity risk, and will be used to cover the pension liability for the remaining retirees of the Swiss plan, as well as the remaining employees at that location. Information relating to the funding position of the Company’s defined benefit plans as of the plans measurement date of January 1, 2016 and January 2, 2015 were as follows (in thousands): Year Ended January 1, January 2, Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 2,843 $ 2,422 Projected benefit obligation acquired 4,316 — Service cost 439 203 Interest cost 165 75 Plan participants’ contribution 61 36 Actuarial loss 235 630 Benefits transferred in, net 258 155 Settlement/curtailment gain — (337 ) Foreign currency translation (325 ) (341 ) Projected benefit obligation at end of year 7,992 2,843 Change in fair value of plan assets: Fair value of plan assets at beginning of year 437 731 Employer contributions (refund) 69 (39 ) Plan participants’ contributions 61 36 Actual loss on plan assets (39 ) (101 ) Benefits transferred in, net 362 198 Settlements — (337 ) Foreign currency translation (19 ) (51 ) Fair value of plan assets at end of year 871 437 Projected benefit obligation in excess of plan assets at end of year $ 7,121 $ 2,406 Defined benefit liability classified as other current liabilities $ 46 $ 25 Defined benefit liability classified as long-term liabilities $ 7,075 $ 2,381 Accumulated benefit obligation at end of year $ 6,299 $ 1,938 Amounts recognized in Accumulated Other Comprehensive Income are as follows (in thousands): Year Ended January 1, January 2, Net loss occurring during the year $ 164 $ 736 Amortization of losses (156 ) (138 ) Prior service cost (1 ) (2 ) Amortization of prior service cost (9 ) (11 ) Foreign currency translation — (76 ) Pre-tax adjustment (2 ) 509 Taxes 22 (135 ) Net loss $ 20 $ 374 The amortization of amounts in Accumulated Other Comprehensive Income expected to be recognized as components of net periodic benefit expense during 2016 are as follows (in thousands): Amortization of net prior service cost $ 10 Amortization of net loss 172 Net pension cost is comprised of the following (in thousands): Year Ended January 1, 2016 January 2, 2015 Service cost $ 439 $ 203 Interest cost 165 75 Settlements loss — 105 Expected return on assets (11 ) (3 ) Recognized net actuarial loss 164 45 Net pension cost $ 757 $ 425 The weighted-average rates used in the actuarial valuations were as follows: Projected Benefit Obligation Net Pension Cost January 1, January 2, 2015 2014 2013 Discount rate 2.2 % 2.3 % 2.3 % 3.4 % 2.1 % Salary growth 2.9 % 3.0 % 3.0 % 3.1 % 2.4 % Expected rate of return on assets 2.0 % 2.3 % 2.3 % 2.5 % — % The discount rate used is based on the yields of AA bonds with a duration matching the duration of the liabilities plus approximately 50 basis points to reflect the risk of investing in corporate bonds. The expected rate of return on plan assets reflects earnings expectations on existing plan assets. Plan assets were comprised of the following (in thousands): Fair Value Measurements Using January 1, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Insurance contract $ 871 $ — $ 871 $ — Total $ 871 $ — $ 871 $ — Fair Value Measurements Using January 2, Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Insurance contract $ 437 $ — $ 437 $ — Total $ 437 $ — $ 437 $ — The fair value of Level 2 plan assets are obtained from quoted market prices in inactive markets or valuation models with observable market data inputs to estimate fair value. These observable market data inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data. Estimated benefit payments over the next ten years are as follows (in thousands): 2016 $ 166 2017 205 2018 225 2019 277 2020 265 2020-2024 1,619 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Jan. 01, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | 11. STOCK-BASED COMPENSATION The components and classification of stock-based compensation expense were as follows (in thousands): Year Ended January 1, January 2, January 3, Stock options $ 2,708 $ 2,523 $ 3,490 Restricted stock and units 6,668 6,417 5,843 401(k) stock contribution — 4,246 4,768 Total stock-based compensation expense $ 9,376 $ 13,186 $ 14,101 Cost of sales $ 795 $ 3,530 $ 3,864 Selling, general and administrative expenses 7,510 7,923 7,907 Research, development and engineering costs, net 982 1,440 1,194 Other operating expenses, net (Note 13) 89 293 1,136 Total stock-based compensation expense $ 9,376 $ 13,186 $ 14,101 During 2014 and 2013, the Company recorded stock modification expense related to employee separation costs incurred during 2014 and 2013 in connection with realignment initiatives. This modification expense was included within Other Operating Expenses, Net. Refer to Note 13 “Other Operating Expenses, Net” for further discussion of these initiatives. Summary of Plans The Company’s 2005 Stock Incentive Plan (“2005 Plan”) has been frozen to any new award issuances. Stock options remain outstanding under this plan. The Company’s 2009 Stock Incentive Plan (“2009 Plan”) authorizes the issuance of up to 1,350,000 shares of equity incentive awards including nonqualified and incentive stock options, restricted stock, restricted stock units, stock bonuses and stock appreciation rights subject to the terms of the 2009 Plan. The 2009 Plan limits the amount of restricted stock, restricted stock units and stock bonuses that may be awarded in the aggregate to 200,000 shares of the 1,350,000 shares authorized. The Company’s 2011 Stock Incentive Plan (“2011 Plan”), as amended, authorizes the issuance of up to 1,350,000 shares of equity incentive awards including nonqualified and incentive stock options, restricted stock, restricted stock units, stock bonuses and stock appreciation rights, subject to the terms of the 2011 Plan. The 2011 Plan does not limit the amount of restricted stock, restricted stock units or stock bonuses that may be awarded. As of January 1, 2016 , there were 289,734 and 75,361 shares available for future grants under the 2011 Plan and 2009 Plan, respectively. Due to plan sub-limits, of the shares available for grant, only 9,728 shares may be awarded under the 2009 Plan in the form of restricted stock, restricted stock units or stock bonuses. Stock Options Stock options granted generally vest over a three year period, expire 10 years from the date of grant, and are granted at exercise prices equal to or greater than the fair value of the Company’s common stock on the date of grant. Performance-based stock options have not been granted since 2010. The Company utilizes the Black-Scholes option pricing model to determine the fair value of stock options. Management is required to make certain assumptions with respect to selected model inputs. Expected volatility is based on the historical volatility of the Company’s stock over the most recent period commensurate with the estimated expected life of the stock options. The expected life of stock options, which represents the period of time that the stock options are expected to be outstanding, is based on historical data. The expected dividend yield is based on the Company’s history and expectation of future dividend payouts. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for a period commensurate with the estimated expected life. If factors change and result in different assumptions, the stock option expense that the Company records for future grants may differ significantly from what the Company recorded in the current period. Stock-based compensation expense is only recorded for those awards that are expected to vest. Pre-vesting forfeiture estimates for determining appropriate stock-based compensation expense are estimated at the time of grant based on historical experience. Revisions are made to those estimates in subsequent periods if actual forfeitures differ from estimated forfeitures. The weighted-average fair value and assumptions used are as follows: Year Ended January 1, January 2, January 3, Weighted average grant date fair value $ 12.18 $ 16.43 $ 8.38 Risk-free interest rate 1.55 % 1.73 % 0.73 % Expected volatility 26 % 39 % 39 % Expected life (in years) 4.7 5.3 5.3 Expected dividend yield 0 % 0 % 0 % Annual prevesting forfeiture rate 9 % 9 % 9 % The following table summarizes time and performance-vested stock option activity: Number of Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value (In Millions) Outstanding at December 28, 2012 2,060,772 $ 23.18 Granted 372,676 23.33 Exercised (551,092 ) 23.24 Forfeited or expired (88,686 ) 28.05 Outstanding at January 3, 2014 1,793,670 22.96 Granted 183,571 43.84 Exercised (353,625 ) 23.41 Forfeited or expired (33,279 ) 27.82 Outstanding at January 2, 2015 1,590,337 25.17 Granted 301,547 49.20 Replacement options granted in connection with the Lake Region Medical acquisition 119,900 12.41 Exercised (280,701 ) 23.45 Forfeited or expired (52,183 ) 42.45 Outstanding at January 1, 2016 1,678,900 $ 28.32 6.1 $ 40.6 Expected to vest at January 1, 2016 1,643,386 $ 27.90 6.1 $ 40.4 Exercisable at January 1, 2016 1,467,256 $ 25.50 5.8 $ 39.6 Intrinsic value is calculated for in-the-money options (exercise price less than market price) as the difference between the market price of the Company’s common shares as of January 1, 2016 ( $52.50 ) and the weighted average exercise price of the underlying stock options, multiplied by the number of options outstanding and/or exercisable. As of January 1, 2016 , $2.3 million of unrecognized compensation cost related to non-vested stock options is expected to be recognized over a weighted-average period of approximately 2 years. Shares are distributed from the Company’s authorized but unissued reserve upon the exercise of stock options or treasury stock if available. The Company does not intend to purchase treasury shares to fund the future exercises of stock options. Proceeds from the exercise of stock options are credited to common stock at par value and the excess is credited to additional paid-in capital. A small portion of the options outstanding qualify as incentive stock options (“ISO”) for income tax purposes. As such, a tax benefit is not recorded at the time the compensation cost related to the stock options is recorded for book purposes due to the fact that an ISO does not ordinarily result in a tax benefit unless there is a disqualifying disposition. Stock option grants of non-qualified stock options result in the creation of a deferred tax asset, which is a temporary difference, until the time that the option is exercised. The following table provides certain information relating to the exercise of stock options (in thousands): Year Ended January 1, January 2, January 3, Intrinsic value $ 8,231 $ 7,997 $ 6,807 Cash received 6,583 8,278 12,807 Tax benefit realized 1,954 1,704 727 Restricted Stock and Restricted Stock Units Time-vested restricted stock and restricted stock unit awards granted typically vest in equal annual installments over a three or four year period. The fair value of time-based as well as nonmarket-based performance restricted stock and restricted stock unit awards is equal to the fair value of the Company’s stock on the date of grant. The following table summarizes time-vested restricted stock and unit activity: Time-Vested Activity Weighted Average Fair Value Nonvested at December 28, 2012 80,269 $ 23.48 Granted 67,230 26.76 Vested (74,062 ) 23.93 Forfeited (5,862 ) 22.26 Nonvested at January 3, 2014 67,575 26.37 Granted 63,817 44.78 Vested (53,568 ) 34.16 Forfeited (9,992 ) 35.30 Nonvested at January 2, 2015 67,832 36.22 Granted 44,629 49.84 Vested (56,119 ) 37.93 Forfeited (17,107 ) 40.48 Nonvested at January 1, 2016 39,235 $ 47.40 Performance-based restricted stock units granted only vest if certain market-based performance metrics are achieved. The amount of shares that ultimately vest range from 0 shares to 577,825 shares based upon the total shareholder return of the Company relative to the Company’s compensation peer group over a three year performance period beginning in the year of grant. The fair value of the restricted stock units were determined by utilizing a Monte Carlo simulation model, which projects the value of Greatbatch stock versus the peer group under numerous scenarios and determines the value of the award based upon the present value of these projected outcomes. The following table summarizes performance-vested restricted stock and stock unit activity related to the Company’s plans: Performance- Vested Activity Weighted Average Fair Value Nonvested at December 28, 2012 782,446 $ 16.02 Granted 318,169 15.86 Vested (49,139 ) 14.68 Forfeited (271,798 ) 14.94 Nonvested at January 3, 2014 779,678 16.41 Granted 186,825 31.33 Vested (221,470 ) 18.51 Forfeited (28,870 ) 18.42 Nonvested at January 2, 2015 716,163 19.57 Granted 179,940 32.92 Vested (270,198 ) 15.30 Forfeited (48,080 ) 26.96 Nonvested at January 1, 2016 577,825 $ 25.11 The realized tax benefit (expense) from the vesting of restricted stock and restricted stock units was $3.4 million , $2.3 million and $(0.4) million for 2015 , 2014 , 2013 , respectively. As of January 1, 2016 , there was $7.2 million of total unrecognized compensation cost related to the restricted stock and restricted stock unit awards. That cost is expected to be recognized over a weighted-average period of approximately 2 years. The fair value of shares vested in 2015 , 2014 , 2013 was $16.1 million , $12.5 million and $4.0 million , respectively. |
Research, Development and Engin
Research, Development and Engineering Costs | 12 Months Ended |
Jan. 01, 2016 | |
Research and Development Expense [Abstract] | |
RESEARCH, DEVELOPMENT AND ENGINEERING COSTS, NET | 12. RESEARCH, DEVELOPMENT AND ENGINEERING COSTS, NET Research, Development and Engineering Costs, Net are comprised of the following (in thousands): Year Ended January 1, January 2, January 3, Research, development and engineering costs $ 59,767 $ 58,974 $ 62,652 Less: cost reimbursements (6,772 ) (9,129 ) (8,575 ) Total research, development and engineering costs, net $ 52,995 $ 49,845 $ 54,077 |
Other Operating Expenses, Net
Other Operating Expenses, Net | 12 Months Ended |
Jan. 01, 2016 | |
Other Income and Expenses [Abstract] | |
OTHER OPERATING EXPENSES, NET | 13. OTHER OPERATING EXPENSES, NET Other Operating Expenses, Net is comprised of the following (in thousands): Year Ended January 1, January 2, January 3, 2014 investments in capacity and capabilities $ 23,037 $ 8,925 $ — Orthopaedic facilities optimization 1,395 1,317 8,038 2013 operating unit realignment — 1,017 5,625 Legacy Lake Region Medical consolidations 1,961 — — Other consolidation and optimization costs (income) — (71 ) 1,095 Acquisition and integration costs (income) 33,449 3 (502 ) Asset dispositions, severance and other 6,622 4,106 1,534 Total other operating expenses, net $ 66,464 $ 15,297 $ 15,790 2014 investments in capacity and capabilities. In 2014, the Company announced several initiatives to invest in capacity and capabilities and to better align its resources to meet its customers’ needs and drive organic growth and profitability. These included the following: • Functions performed at the Company’s facility in Plymouth, MN to manufacture catheters and introducers will transfer into the Company’s existing facility in Tijuana, Mexico. This initiative is expected to be substantially completed by the first half of 2016 and is dependent upon our customers’ validation and qualification of the transferred products. • Functions performed at the Company’s facilities in Beaverton, OR and Raynham, MA to manufacture products for the portable medical market will transfer to a new facility in Tijuana, Mexico. This initiative is expected to be substantially completed by the end of the first quarter of 2016 and is dependent upon our customers’ validation and qualification of the transferred products. Products currently manufactured at the Beaverton facility, which do not serve the portable medical market, are planned to transfer to the Company’s Raynham facility. • The design engineering responsibilities previously performed at the Company’s Cleveland, OH facility were transferred to the Company’s facilities in Minnesota in 2015. • The realignment of the Company’s commercial sales operations was completed during the fourth quarter of 2015. The total capital investment expected for these initiatives is between $25.0 million and $28.0 million , of which $21.3 million has been expended through January 1, 2016 . Total restructuring charges expected to be incurred in connection with this realignment are between $34.0 million and $39.0 million , of which $32.0 million has been incurred through January 1, 2016 . Expenses related to this initiative are recorded within the applicable segment and corporate cost centers that the expenditures relate to and include the following: • Severance and retention: $5.0 million - $7.0 million ; • Accelerated depreciation and asset write-offs: $2.0 million - $3.0 million ; and • Other: $27.0 million - $29.0 million Other expenses primarily consist of costs to relocate certain equipment and personnel, duplicate personnel costs, disposal, and travel expenditures. All expenses are cash expenditures except accelerated depreciation and asset write-offs. The change in accrued liabilities related to the 2014 investments in capacity and capabilities is as follows (in thousands): Severance and Retention Accelerated Depreciation/ Asset Write-offs Other Total At January 2, 2015 $ 1,163 $ — $ 1,066 $ 2,229 Restructuring charges 2,729 235 20,073 23,037 Write-offs — (235 ) — (235 ) Cash payments (2,463 ) — (19,544 ) (22,007 ) At January 1, 2016 $ 1,429 $ — $ 1,595 $ 3,024 Orthopaedic facilities optimization. In 2010, the Company began updating its Indianapolis, IN facility to streamline operations, consolidate two buildings, increase capacity, further expand capabilities and reduce dependence on outside suppliers. This initiative was completed in 2011. In 2011, the Company began construction of an orthopaedic manufacturing facility in Fort Wayne, IN and transferred manufacturing operations being performed at its Columbia City, IN location into this new facility. This initiative was completed in 2012. During 2012, the Company transferred manufacturing and development operations performed at its facilities in Orvin and Corgemont, Switzerland into existing facilities in Fort Wayne, IN and Tijuana, Mexico. In connection with this consolidation, in 2013, the Company sold assets related to certain non-core Swiss orthopaedic product lines to an independent third party. The purchase agreement provided the Company with an earn out payment based upon the amount of inventory consumed by the purchaser within one year after the close of the transaction. As a result of this earn out, a gain of $2.7 million was recorded in Other Operating Expenses, Net during 2014. During 2014, the Company transferred $2.1 million of assets relating to the Company’s Orvin, Switzerland property to held for sale and recognized a $0.4 million impairment charge. During 2015, the Company sold $0.6 million of these assets held for sale with no additional gain or loss recognized. Refer to Note 5 “Assets Held For Sale” for additional information. During 2013, the Company began a project to expand its Chaumont, France facility in order to enhance its capabilities and fulfill larger volume customer supply agreements. This initiative is expected to be completed over the next year. The total capital investment expected to be incurred for these initiatives is between $30.0 million and $35.0 million , of which $28.4 million has been expended through January 1, 2016 . Total expense expected to be incurred for these initiatives is between $45.0 million and $48.0 million , of which $43.9 million has been incurred through January 1, 2016 . All expenses have been and will be recorded within the Greatbatch Medical segment and are expected to include the following: • Severance and retention: approximately $11.0 million ; • Accelerated depreciation and asset write-offs: approximately $13.0 million ; and • Other: $21.0 million - $24.0 million Other expenses include production inefficiencies, moving, revalidation, personnel, training, consulting, and travel costs associated with these consolidation projects. All expenses are cash expenditures except accelerated depreciation and asset write-offs. The change in accrued liabilities related to the orthopaedic facilities optimizations is as follows (in thousands): Severance and Retention Accelerated Depreciation/ Asset Write-offs Other Total At January 2, 2015 $ — $ — $ 287 $ 287 Restructuring charges — 88 1,307 1,395 Write-offs — (88 ) — (88 ) Cash payments — — (1,594 ) (1,594 ) At January 1, 2016 $ — $ — $ — $ — 2013 operating unit realignment . In 2013, the Company initiated a plan to realign its operating structure in order to optimize its continued focus on profitable growth. As part of this initiative, the sales and marketing and operations groups of its former Implantable Medical and Electrochem Solutions reportable segments were combined into one sales and marketing group and one operations group each serving Greatbatch Medical. This initiative was completed during 2014. Total restructuring charges incurred in connection with this realignment were $6.6 million . Expenses related to this initiative were recorded within the applicable segment that the expenditures relate to and included the following: • Severance and retention: $5.0 million ; and • Other: $1.6 million . Other expenses primarily consisted of relocation and travel expenditures. All expenses were cash expenditures. Legacy Lake Region Medical consolidations. In 2014, Lake Region Medical initiated plans to close its Arvada, Colorado site, consolidate its two Galway, Ireland sites into one facility, and take other restructuring actions that will result in a reduction in staff across manufacturing and administrative functions at certain locations. This initiative is expected to be substantially completed by the end of 2016. The total capital investment expected for this initiative since the acquisition date is between $4.0 million and $5.0 million , of which $0.9 million has been expended through January 1, 2016 . Total expense expected to be incurred for this initiative since the acquisition date is between $13.0 million and $15.0 million , of which $2.0 million has been incurred through January 1, 2016 . All expenses have been and will be recorded with the Lake Region Medical segment and are expected to include the following: • Employee costs: $5.0 million - $6.0 million ; and • Other: $8.0 million - $9.0 million Other expenses primarily consist of production inefficiencies, moving, revalidation, personnel, training, consulting, and travel costs associated with these consolidation projects. All expenses are cash expenditures and are being recorded in the Lake Region Medical segment. The change in accrued liabilities related to these legacy Lake Region Medical consolidation initiatives is as follows (in thousands): Employee Costs Other Exit Costs Total At October 27, 2015 $ 3,392 $ 653 $ 4,045 Restructuring charges 557 1,404 1,961 Write-offs — — — Cash payments (282 ) (1,461 ) (1,743 ) At January 1, 2016 $ 3,667 $ 596 $ 4,263 Acquisition and integration costs (income). During 2015, the Company incurred $23.7 million in transaction costs related to the acquisition of Lake Region Medical. These costs primarily relate to professional and consulting fees incurred in connection with due diligence efforts of this acquisition, of which $0.7 million are accrued as of January 1, 2016 . Expenses related to this initiative were recorded to corporate unallocated expenses. Additionally, during 2015, the Company incurred $8.6 million in Lake Region Medical integration costs, which consisted primarily of change-in-control payments to former Lake Region Medical executives, professional and consulting fees, and travel costs, of which $6.2 million are accrued as of January 1, 2016 in the Lake Region Medical segment. Total expense expected to be incurred on the integration of Lake Region Medical is between $40.0 million and $50.0 million and total capital expenditures are expected to be between $20.0 million to $25.0 million . During 2015, 2014, and 2013, the Company also incurred costs (income) related to the integration of CCC and NeuroNexus Technologies, Inc. (“NeuroNexus”). These expenses were primarily for retention bonuses, travel costs in connection with integration efforts, training, severance, and the change in fair value of the contingent consideration recorded in connection with the NeuroNexus acquisition, which resulted in a gain of $0.8 million and $0.7 million in 2014 and 2013, respectively, and was categorized in Level 3 of the fair value hierarchy. Asset dispositions, severance and other. During 2015 , 2014 , and 2013 , the Company recorded losses in connection with various asset disposals and/or write-downs. In addition, during 2015, the Company incurred legal and professional costs in connection with the expected Spin-off of Nuvectra of $6.0 million , of which $0.5 million are accrued as of January 1, 2016 . Expenses related to the expected Spin-off were recorded within the applicable segment and corporate cost centers to which the expenditures relate. The transaction is expected to be completed in March 2016. Deal related costs for the Spin-off are estimated to be between $10.0 million and $12.0 million . Refer to Note 19 “Business Segment, Geographic and Concentration Risk Information” for additional information on the expected Spin-off. During 2014, the Company incurred $0.9 million of expense related to the separation of the Company’s Senior Vice President, Human Resources. Additionally, during 2014, the Company recorded charges in connection with its business reorganization to align its contract manufacturing operations. Costs incurred primarily related to consulting and IT development and were completed in 2014. During 2013, Greatbatch Medical recorded a $0.9 million write-off related to its wireless sensing product line and QiG recorded a $0.5 million write-off of IPR&D. Refer to Note 18 “Fair Value Measurements” for additional information. |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 01, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 14. INCOME TAXES The U.S. and international components of income (loss) before provision for income taxes were as follows (in thousands): Year Ended January 1, January 2, January 3, U.S. $ (42,166 ) $ 56,801 $ 42,392 International 26,466 19,778 6,446 Total income (loss) before provision for income taxes $ (15,700 ) $ 76,579 $ 48,838 The provision (benefit) for income taxes was comprised of the following (in thousands): Year Ended January 1, January 2, January 3, Current: Federal $ (3,753 ) $ 16,293 $ 39,353 State (367 ) 1,299 1,604 International 6,312 2,998 1,470 2,192 20,590 42,427 Deferred: Federal (8,144 ) 1,211 (28,678 ) State (880 ) (310 ) 427 International (1,274 ) (370 ) (1,605 ) (10,298 ) 531 (29,856 ) Total provision (benefit) for income taxes $ (8,106 ) $ 21,121 $ 12,571 The provision (benefit) for income taxes differs from the U.S. statutory rate due to the following: Year Ended January 1, January 2, January 3, Statutory rate $ (5,495 ) 35.0 % $ 26,803 35.0 % $ 17,093 35.0 % Federal tax credits (1,850 ) 11.8 (1,600 ) (2.1 ) (3,651 ) (7.5 ) Foreign rate differential (3,180 ) 20.2 (3,276 ) (4.3 ) (348 ) (0.7 ) Uncertain tax positions (531 ) 3.4 412 0.6 831 1.7 State taxes, net of federal benefit (1,490 ) 9.5 507 0.7 1,148 2.3 Change in foreign tax rates (91 ) 0.6 (446 ) (0.6 ) (1,806 ) (3.7 ) Non-deductible transaction costs 4,867 (31.0 ) — — — — Valuation allowance 626 (4.0 ) (299 ) (0.4 ) 186 0.4 Other (962 ) 6.1 (980 ) (1.3 ) (882 ) (1.8 ) Effective tax rate $ (8,106 ) 51.6 % $ 21,121 27.6 % $ 12,571 25.7 % Deferred tax assets (liabilities) consist of the following (in thousands): At January 1, January 2, Tax credits $ 22,196 $ 5,828 Net operating loss carryforwards 153,949 6,721 Inventories 6,543 3,335 Accrued expenses 13,138 4,338 Stock-based compensation 9,512 9,341 Other 38 1,659 Gross deferred tax assets 205,376 31,222 Less valuation allowance (39,171 ) (10,709 ) Net deferred tax assets 166,205 20,513 Property, plant and equipment (32,772 ) (2,646 ) Intangible assets (347,896 ) (57,850 ) Convertible subordinated notes (3,754 ) (5,006 ) Gross deferred tax liabilities (384,422 ) (65,502 ) Net deferred tax liability $ (218,217 ) $ (44,989 ) Presented as follows: Current deferred tax asset $ — $ 6,168 Current deferred tax liability — (588 ) Noncurrent deferred tax asset 3,587 2,626 Noncurrent deferred tax liability (221,804 ) (53,195 ) Net deferred tax liability $ (218,217 ) $ (44,989 ) In November 2015, the FASB issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes.” This ASU requires entities that present a classified balance sheet to classify all deferred income taxes as noncurrent assets or noncurrent liabilities. Previous accounting principles required an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified balance sheet. As permitted, during the fourth quarter of 2015, the Company elected to early adopt this ASU and has elected to prospectively apply its guidance. As a result, all deferred tax assets or liabilities shown in the Consolidated Balance Sheet as of January 1, 2016, are classified as noncurrent. Prior periods were not retrospectively adjusted for the adoption of this ASU. As of January 1, 2016 , the Company has the following carryforwards available: Jurisdiction Tax Attribute Amount (in millions) Begin to Expire Federal Net Operating Loss $ 386.2 2019 International Net Operating Loss 42.2 2016 State Net Operating Loss 298.7 2016 Federal Foreign Tax Credit 17.0 2019 U.S. and State R&D Tax Credit 2.6 2018 State Investment Tax Credit 5.3 2016 Certain U.S. tax attributes are subject to limitations of Internal Revenue Code Section 382, which in general provides that utilization is subject to an annual limitation if an ownership change results from transactions increasing the ownership of certain shareholders or public groups in stock of a corporation by more than 50 percentage points over a three- year period. Such an ownership change occurred upon the consummation of the acquisition of Lake Region Medical. The Company does not anticipate that these limitations will affect utilization of these carryforwards prior to their expiration. The Company’s federal net operating loss carryforward and certain other federal tax credits reported on its income tax returns included uncertain tax positions taken in prior years. Due to the application of the accounting for uncertain tax positions, the actual tax attributes are larger than the tax amounts for which a deferred tax asset is recognized for financial statement purposes. In assessing the realizability of deferred tax assets, management considers, within each taxing jurisdiction, whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the consideration of the weight of both positive and negative evidence, management has determined that a portion of the deferred tax assets as of January 1, 2016 and January 2, 2015 related to certain foreign tax credits, state investment tax credits, and foreign and state net operating losses will not be realized. The increase in the valuation allowance during 2015 is primarily attributable to the acquisition of Lake Region Medical. The Company files annual income tax returns in the U.S., various state and local jurisdictions, and in various foreign jurisdictions. A number of years may elapse before an uncertain tax position, for which the Company has unrecognized tax benefits, is examined and finally settled. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, the Company believes that its unrecognized tax benefits reflect the most probable outcome. The Company adjusts these unrecognized tax benefits, as well as the related interest, in light of changing facts and circumstances. The resolution of an uncertain tax position, if recognized, would be recorded as an adjustment to the Provision (Benefit) for Income Taxes and the effective tax rate in the period of resolution. Below is a summary of changes to the unrecognized tax benefit (in thousands): Year Ended January 1, January 2, January 3, Balance, beginning of year $ 2,411 $ 1,858 $ 970 Additions relating to business combinations 7,443 — — Additions based upon tax positions related to the current year 274 268 325 Additions related to prior period tax positions 163 510 651 Reductions relating to settlements with tax authorities (550 ) (225 ) (88 ) Reductions as a result of a lapse of applicable statute of limitations (470 ) — — Balance, end of year $ 9,271 $ 2,411 $ 1,858 Greatbatch and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The tax years that remain open and subject to tax audits varies depending on the tax jurisdiction. The Internal Revenue Service finalized an audit of the 2012 and 2013 U.S. Federal income tax returns of the Company in the first quarter of 2015. The impact to the income tax expense was not material. The U.S. subsidiary of the former Lake Region Medical is still subject to U.S. federal, state, and local examinations for the taxable years 2006 to 2014. It is reasonably possible that a reduction of approximately $0.1 million of the balance of unrecognized tax benefits may occur within the next twelve months as a result of the lapse of the statute of limitations and/or audit settlements. As of January 1, 2016 , approximately $8.5 million of unrecognized tax benefits would favorably impact the effective tax rate (net of federal impact on state issues), if recognized. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of Provision (Benefit) for Income Taxes on the Consolidated Statement of Operations. During 2015, 2014, and 2013, the recorded amounts for interest and penalties, respectively, were not significant. As of January 1, 2016, no taxes have been provided on the undistributed earnings of certain foreign subsidiaries amounting to $84 million . The Company intends to permanently reinvest these earnings. Quantification of the deferred tax liability associated with these undistributed earnings is not practicable. |
Commitments And Contingencies
Commitments And Contingencies | 12 Months Ended |
Jan. 01, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 15. COMMITMENTS AND CONTINGENCIES Litigation – In April 2013, the Company commenced an action against AVX Corporation and AVX Filters Corporation (collectively “AVX”) alleging that AVX had infringed on the Company’s patents by manufacturing and selling filtered feedthrough assemblies used in implantable pacemakers and cardioverter defibrillators that incorporate the Company’s patented technology. On January 26, 2016, a jury in the U.S. District Court for the District of Delaware returned a verdict finding that AVX infringed on two Greatbatch patents and awarded Greatbatch $37.5 million in damages. The finding is subject to post-trial proceedings, including a possible appeal by AVX. The Company has recorded no gains in connection with this litigation as no cash has been received. In January 2015, Lake Region Medical was notified by the New Jersey Department of Environmental Protection (“NJDEP”) of the NJDEP’s intent to revoke a no further action determination made by the NJDEP in favor of Lake Region Medical in 2002 pertaining to a property on which a subsidiary of Lake Region Medical operated a manufacturing facility in South Plainfield, New Jersey beginning in 1971. Lake Region Medical sold the property in 2004 and vacated the facility in 2007. We are cooperating with the NJDEP and believe the NJDEP’s notice of intent to revoke is unwarranted. In December 2014, the current owner of the property commenced litigation against Lake Region Medical, one of its executive officers and other unrelated third parties, alleging that the defendants caused or contributed to alleged groundwater contamination beneath the property. The Company believes these allegations are without merit and has concluded that any potential loss related to these allegations is not probable , and as such, no liability has been recorded as of January 1, 2016 . The Company is a party to various other legal actions arising in the normal course of business. Other than what is discussed in this note, the Company does not expect that the ultimate resolution of any other pending legal actions will have a material effect on its consolidated results of operations, financial position, or cash flows, litigation is subject to inherent uncertainties. As such, there can be no assurance that any pending legal action, which the Company currently believes to be immaterial, does not become material in the future. Environmental Matters – The Company’s Collegeville, PA facility, which was acquired as part of the Lake Region Medical acquisition, is subject to two administrative consent orders entered into with the U.S. Environmental Protection Agency (the “EPA”), which require ongoing groundwater treatment and monitoring at the site as a result of historic leaks from underground storage tanks. Upon approval by the EPA of the Company’s proposed post remediation care plan, which requires a continuation of the groundwater treatment and monitoring process at the site, the Company expects that the consent orders will terminate. During the first half of 2016, the Company expects a decision from the EPA on whether the Company’s post remediation care plan has been approved. The groundwater treatment process at the Collegeville facility consists of a groundwater extraction and treatment system and the performance of annual sampling of a defined set of groundwater wells as a means to monitor containment within approved boundaries. As of January 1, 2016 , there is $1.1 million recorded in Other Long-Term Liabilities in the Consolidated Balance Sheets in connection with this matter for the cost of on-going remediation. License Agreements – The Company is a party to various license agreements for technology that is utilized in certain of its products. The most significant of these agreements are the licenses for basic technology used in the production of wet tantalum capacitors, filtered feedthroughs and MRI compatible lead systems. Expenses related to license agreements were $2.4 million , $3.3 million , and $3.5 million , for 2015 , 2014 and 2013 , respectively, and are primarily included in Cost of Sales. Product Warranties – The Company generally warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. The change in product warranty liability was comprised of the following (in thousands): Year Ended January 1, January 2, Beginning balance $ 660 $ 1,819 Additions to warranty reserve 1,274 953 Liabilities assumed from acquisition 2,521 — Warranty claims paid (1,139 ) (2,112 ) Ending balance $ 3,316 $ 660 Operating Leases – The Company is a party to various operating lease agreements for buildings, machinery, equipment and software. The Company primarily leases buildings, which accounts for the majority of the future lease payments. Lease expense includes the effect of escalation clauses and leasehold improvement incentives which are accounted for ratably over the lease term. Operating lease expense was as follows (in thousands): Year Ended January 1, January 2, January 3, Operating lease expense $ 6,516 $ 4,281 $ 4,379 Minimum future estimated annual operating lease expenses are as follows (in thousands): 2016 $ 14,118 2017 10,951 2018 9,950 2019 8,979 2020 6,925 Thereafter 27,674 Total estimated operating lease expense $ 78,597 Purchase Commitments – Contractual obligations for purchase of goods or services are defined as agreements that are enforceable and legally binding on the Company and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The Company’s purchase orders are normally based on its current manufacturing needs and are fulfilled by its vendors within short time horizons. The Company enters into blanket orders with vendors that have preferred pricing and terms, however these orders are normally cancelable by us without penalty. As of January 1, 2016 , the total contractual obligation related to such expenditures is approximately $63.7 million and will primarily be financed by existing cash and cash equivalents, cash generated from operations, or the Company’s Senior Secured Credit Facilities. The Company also enters into contracts for outsourced services; however, the obligations under these contracts were not significant and the contracts generally contain clauses allowing for cancellation without significant penalty. Self-Insured Medical Plan – The Company self-funds the medical insurance coverage provided to its U.S. based employees. The Company had specific stop loss coverage for claims incurred during 2015 exceeding $250 thousand per associate for legacy Greatbatch employees and exceeding $275 thousand per associate for legacy Lake Region Medical employees with no annual maximum aggregate stop loss coverage. As of January 1, 2016 and January 2, 2015 , the Company had $4.0 million and $1.8 million accrued related to the self-insurance of its medical plans, respectively. This accrual is recorded in Accrued Expenses in the Consolidated Balance Sheet and is primarily based upon claim history. Foreign Currency Contracts – Historically, the Company has entered into forward contracts to purchase Mexican pesos in order to hedge the risk of peso-denominated payments associated with its operations in Tijuana, Mexico . In connection with the Lake Region Medical acquisition, the Company terminated its outstanding forward contracts resulting in a $2.4 million payment to the foreign currency contract counterparty during 2015. As of the date the contracts were terminated, the Company had $1.6 million recorded in Accumulated Other Comprehensive Income related to these contracts, which will be amortized to Cost of Sales as the inventory, which the contracts were hedging the cash flows to produce, is sold. The impact to the Company’s results of operations from its forward contracts was as follows (in thousands): Year Ended January 1, January 2, January 3, Increase (reduction) in Cost of Sales $ 1,948 $ (168 ) $ (1,154 ) Ineffective portion of change in fair value — — — Information regarding outstanding foreign currency contracts as of January 1, 2016 is as follows (dollars in thousands): Instrument Type of Hedge Aggregate Amount Start Date End Date $/Peso Fair Value Balance Sheet Location FX Contract Cash Flow $ 16,480 Jan 2016 Dec 2016 0.0584 $ (307 ) Accrued Expenses Self-Insured Workers’ Compensation – Prior to 2011, the Company was a member of a group self-insurance trust that provided workers’ compensation benefits to employees of the Company in Western New York (the “Trust”). Prior to being acquired by Greatbatch, Lake Region Medical self-insured the workers’ compensation benefits provided to its employees. As of January 1, 2016, the Company utilized a traditional insurance provider for workers’ compensation coverage for all associates. During 2015, the Company received an additional assessment from the Trust of $0.9 million . As of January 1, 2016 and January 2, 2015 , the Company had $3.9 million and $0.0 million , respectively, accrued for workers’ compensation claims. This accrual is recorded in Accrued Expenses in the Consolidated Balance Sheet and is primarily based upon claim history and assessments received. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Jan. 01, 2016 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | 16. EARNINGS (LOSS) PER SHARE The following table illustrates the calculation of Basic and Diluted EPS (in thousands, except per share amounts): Year Ended January 1, January 2, January 3, Numerator for basic EPS: Net income (loss) $ (7,594 ) $ 55,458 $ 36,267 Denominator for basic EPS: Weighted average shares outstanding 26,363 24,825 23,991 Effect of dilutive securities: Stock options, restricted stock and restricted stock units — 1,150 1,332 Denominator for diluted EPS 26,363 25,975 25,323 Basic EPS $ (0.29 ) $ 2.23 $ 1.51 Diluted EPS $ (0.29 ) $ 2.14 $ 1.43 The diluted weighted average share calculations do not include the following securities, which are not dilutive to the EPS calculations or the performance criteria have not been met: Year Ended January 1, January 2, January 3, Time-vested stock options, restricted stock and restricted stock units 1,718,135 175,549 18,480 Performance-vested stock options and restricted stock units 577,825 — — For the 2013 period, no shares related to CSN were included in the diluted EPS calculation as the average share price of the Company’s common stock for that period did not exceed CSN’s conversion price per share. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
Jan. 01, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | 17. ACCUMULATED OTHER COMPREHENSIVE INCOME Accumulated Other Comprehensive Income is comprised of the following (in thousands): Defined Benefit Plan Liability Cash Flow Hedges Foreign Currency Translation Adjustment Total Pre-Tax Amount Tax Net-of-Tax Amount At January 2, 2015 $ (1,181 ) $ (2,558 ) $ 11,450 $ 7,711 $ 1,412 $ 9,123 Unrealized loss on cash flow hedges — (4,413 ) — (4,413 ) 1,545 (2,868 ) Realized loss on foreign currency hedges — 1,948 — 1,948 (682 ) 1,266 Realized loss on interest rate swap hedges — 2,631 — 2,631 (921 ) 1,710 Net defined benefit plan liability adjustments 2 — — 2 (22 ) (20 ) Foreign currency translation loss — — (7,841 ) (7,841 ) — (7,841 ) At January 1, 2016 $ (1,179 ) $ (2,392 ) $ 3,609 $ 38 $ 1,332 $ 1,370 Defined Benefit Plan Liability Cash Flow Hedges Foreign Currency Translation Adjustment Total Pre-Tax Amount Tax Net-of-Tax Amount At January 3, 2014 $ (672 ) $ (468 ) $ 14,952 $ 13,812 $ 546 $ 14,358 Unrealized loss on cash flow hedges — (2,372 ) — (2,372 ) 829 (1,543 ) Realized gain on foreign currency hedges — (168 ) — (168 ) 59 (109 ) Realized loss on interest rate swap hedges — 450 — 450 (157 ) 293 Net defined benefit plan liability adjustments (509 ) — — (509 ) 135 (374 ) Foreign currency translation loss — — (3,502 ) (3,502 ) — (3,502 ) At January 2, 2015 $ (1,181 ) $ (2,558 ) $ 11,450 $ 7,711 $ 1,412 $ 9,123 The realized loss (gain) relating to the Company’s foreign currency and interest rate swap hedges were reclassified from Accumulated Other Comprehensive Income and included in Cost of Sales and Interest Expense, respectively, in the Consolidated Statements of Operations. Refer to Note 10 “Benefit Plans” for details on the change in defined benefit plan liability adjustments. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jan. 01, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 18. FAIR VALUE MEASUREMENTS Assets and Liabilities Measured at Fair Value on a Recurring Basis Fair value measurement standards apply to certain financial assets and liabilities that are measured at fair value on a recurring basis (each reporting period). For the Company, these financial assets and liabilities include its derivative instruments. The Company does not have any nonfinancial assets or liabilities that are measured at fair value on a recurring basis. Foreign Currency Contracts – The fair value of foreign currency contracts are determined through the use of cash flow models that utilize observable market data inputs to estimate fair value. These observable market data inputs include foreign exchange rate and credit spread curves. In addition to the above, the Company received fair value estimates from the foreign currency contract counterparty to verify the reasonableness of the Company’s estimates. The Company’s foreign currency contracts are categorized in Level 2 of the fair value hierarchy. The fair value of the Company’s foreign currency contracts will be realized as Cost of Sales as the inventory, which the contracts are hedging the cash flows to produce, is sold. Approximately $2.4 million is expected to be realized as additional Cost of Sales over the next twelve months. Interest Rate Swaps – The fair value of the Company’s interest rate swaps outstanding at January 2, 2015 was determined through the use of a cash flow model that utilized observable market data inputs. These observable market data inputs included LIBOR, swap rates, and credit spread curves. In addition to the above, the Company received a fair value estimate from the interest rate swap counterparty to verify the reasonableness of the Company’s estimate. This fair value calculation was categorized in Level 2 of the fair value hierarchy. The following tables provide information regarding assets and liabilities recorded at fair value on a recurring basis (in thousands): Fair Value Measurements Using Description At January 1, 2016 Quoted Prices in Active Markets for Identical (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities Foreign currency contracts (Note 15) $ 307 $ — $ 307 $ — Fair Value Measurements Using Description At January 2, Quoted Significant Significant Liabilities Foreign currency contracts $ 1,568 $ — $ 1,568 $ — Interest rate swaps 990 — 990 — Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Fair value standards also apply to certain assets and liabilities that are measured at fair value on a nonrecurring basis. The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short-term nature of these items. Refer to Note 9 “Debt” for further discussion regarding the fair value of the Company’s Senior Secured Credit Facilities and Senior Notes. A summary of the valuation methodologies for assets and liabilities measured on a nonrecurring basis is as follows: Cost and Equity Method Investments – The Company holds investments in equity and other securities that are accounted for as either cost or equity method investments, which are classified in Other Assets on the Consolidated Balance Sheets. The total carrying value of these investments is reviewed quarterly for changes in circumstance or the occurrence of events that suggest the Company’s investment may not be recoverable. The fair value of cost or equity method investments is not adjusted if there are no identified events or changes in circumstances that may have a material effect on the fair value of the investments. Gains and losses realized on cost and equity method investments are recorded in Other (Income) Expense, Net, unless separately stated. The aggregate recorded amount of cost and equity method investments at January 1, 2016 and January 2, 2015 was $20.6 million and $14.5 million , respectively. The Company’s equity method investment is in a Chinese venture capital fund focused on investing in life sciences companies. This fund accounts for its investments at fair value with the unrealized change in fair value of these investments recorded as income or loss to the fund in the period of change. As of January 1, 2016 , the Company owned 6.7% of this fund. During 2015 , 2014 and 2013 , the Company recognized impairment charges related to its cost method investments of $1.4 million , $0.0 million and $0.5 million , respectively. The fair value of these investments were determined by reference to recent sales data of similar shares to independent parties in an inactive market. This fair value calculation is categorized in Level 2 of the fair value hierarchy. During 2015 , 2014 , and 2013 , the Company recognized a net gain (loss) on equity method investments of $4.7 million , $1.2 million , and $(0.2) million , respectively. During 2015, the Company recorded a gain and received a $3.6 million cash distribution from its equity method investment, which was classified as a cash flow from operating activities in the Consolidated Statement of Cash Flows as it represented a return on investment. During 2014, the Company sold one of its cost method investments, which resulted in a pre-tax gain of $3.2 million . Long-Lived Assets – The Company reviews the carrying amount of its long-lived assets to be held and used for potential impairment whenever certain indicators are present as described in Note 1 “Summary of Significant Accounting Policies.” There were no impairment charges recorded during 2015 related to the Company’s long-lived assets. During 2014, the Company recorded a $0.4 million impairment charge related to its Orvin, Switzerland property held for sale. The fair value of these assets were determined based upon recent sales data of similar assets and discussions with potential buyers, and was categorized in Level 2 of the fair value hierarchy. During 2013, the Company wrote off $0.5 million of IPR&D allocated to its QiG segment as these projects were discontinued prior to reaching technological feasibility. Additionally, during 2013, the Company wrote off $0.9 million of inventory and technology related to Greatbatch Medical’s wireless sensing product line held for sale, as an agreement could not be reached with potential buyers. The above impairment charges were recorded in Other Operating Expenses, Net. Refer to Note 13 “Other Operating Expenses, Net” for further discussion. The following table provides information regarding assets and liabilities recorded at fair value on a nonrecurring basis as of January 1, 2016 and January 2, 2015 respectively (in thousands): Fair Value Measurements Using Description At January 1, 2016 Quoted Significant Significant Assets Cost method investment $ 1,100 $ — $ 1,100 $ — Fair Value Measurements Using Description At January 2, 2015 Quoted Significant Significant Assets Assets Held for Sale $ 1,635 $ — $ 1,635 $ — Fair Value of Other Financial Instruments Pension Plan Assets – The fair value of the Company’s pension plan assets disclosed in Note 10 “Benefit Plans” are determined based upon quoted market prices in inactive markets or valuation models with observable market data inputs to estimate fair value. These observable market data inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data. The Company’s pension plan assets are categorized Level 2 of the fair value hierarchy. |
Business Segment, Geographic an
Business Segment, Geographic and Concentration Risk Information | 12 Months Ended |
Jan. 01, 2016 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION | 19. BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION On October 27, 2015, the Company acquired all of the outstanding common stock of Lake Region Medical. As a result, the Company now has three reportable segments: Greatbatch Medical, QiG and Lake Region Medical. In February 2016, Greatbatch announced that its Board of Directors approved the spin-off of a portion of its QiG segment through a tax-free distribution of its QiG Group LLC subsidiary to the stockholders of Greatbatch on a pro rata basis. The portion of the QiG segment being spun-off will consist of QiG Group LLC and its subsidiaries: (i) Algostim, (ii) PelviStim, and (iii) Greatbatch’s NeuroNexus subsidiary. It is expected that Greatbatch stockholders will receive one share of Nuvectra common stock for every three shares of Greatbatch common stock held as of the record date. Upon completion of the pending Spin-off, Nuvectra will be an independent, publicly-traded company and Greatbatch will not own any shares of Nuvectra common stock. The operations of CCC and certain other existing QiG research and development capabilities will be retained by Greatbatch and not included as part of the Spin-off. The Spin-off is expected to be completed in March 2016. As a result of the Lake Region Medical acquisition and pending Spin-off, the Company is reevaluating its operating and reporting segments, which is expected to be finalized in 2016 once the corporate and management reporting structure realignment is completed. Greatbatch Medical designs and manufactures medical devices and components where Greatbatch either owns the intellectual property or has unique manufacturing and assembly expertise. Greatbatch Medical provides medical devices and components to the cardiac, neuromodulation, orthopaedics, portable medical, vascular and energy markets among others. Greatbatch Medical also offers value-added assembly and design engineering services for medical devices that utilize its component products. The QiG segment focuses on the design and development of medical device systems and components. QiG is in the process of developing applications for its neurostimulation technology platform for emerging indications such as SCS, SNS, and DBS, among others. The QiG segment is comprised of the QiG Group, LLC, NeuroNexus, and CCC. QiG facilitates the development of medical device systems through the establishment of limited liability companies (“LLCs”). These LLCs do not own, but have the exclusive right to use the technology of Greatbatch in specific fields of use and have an exclusive manufacturing agreement with Greatbatch Medical. As of January 2, 2015, QiG Group LLC owned 89% of two LLCs, Algostim and PelviStim, but was responsible for 100% of the expenses incurred by these LLCs. However, no distributions were to be made to the minority holders of the LLCs until QiG was reimbursed for all expenses paid. Minority interests in these LLCs were held by key opinion leaders and clinicians. During 2015, the Company purchased the non-controlling interest in these LLCs for $16.7 million . Of this amount, $6.8 million remained payable as of January 1, 2016 and was recorded in Accrued Expenses in the Consolidated Balance Sheet. For purposes of the Consolidated Statement of Cash Flows for the year ended January 1, 2016, this liability was treated as a non-cash financing transaction. As of January 1, 2016, QiG Group LLC now owns 100% of Algostim and PelviStim. The purchase of outstanding non-controlling interests included $6.9 million paid to Drees Holding LLC, of which Scott F. Drees, Chief Executive Officer (“CEO”) of Nuvectra, is the principal owner and the sole managing director. Mr. Drees received his interests in Algostim and PelviStim in connection with entering into a long-term consulting agreement with Nuvectra and prior to being appointed as its CEO in July 2015. Mr. Drees’ consulting agreement was terminated in connection with his agreeing to serve in the role of Nuvectra CEO. Algostim is focused on the development and commercialization of its Algovita SCS system, the first application of QiG’s neurostimulation technology platform. Algovita is indicated for the treatment of chronic pain of the trunk and limbs. Algovita received CE Mark approval during 2014. During the fourth quarter of 2015, QiG received final approval of its PMA application for Algovita, which it anticipates launching commercially in the United States during the first half of 2016. QiG revenue includes sales of neural interface technology, components and systems to the neuroscience and clinical markets from NeuroNexus, a limited release of Algovita in Europe, and CCC sales of various medical device products such as implantable pulse generators, programmer systems, battery chargers, patient wands and leads to medical device companies. Once the medical devices developed by CCC reach significant production levels, the responsibility for manufacturing these products may be transferred to Greatbatch Medical. After the pending Spin-off is completed, the Company’s design and development of complete medical device systems will be completed by the combined teams in Greatbatch Medical, Lake Region Medical, and CCC. Lake Region Medical has operated as a segment for Greatbatch since it was acquired during the fourth quarter of 2015. This segment specializes in the design, development, and manufacturing of products across the medical component and device spectrum, primarily serving the cardio, vascular and advanced surgical markets. Lake Region Medical offers fully integrated outsourced manufacturing, regulatory and engineering services, contract manufacturing, finished device assembly services, original device development, and supply chain management to its customers, who are located worldwide. As a result of the Lake Region Medical acquisition and pending Spin-off, the Company has recast its product line sales to reflect the reclassification of Greatbatch, Inc. and Lake Region net sales from the historical product lines to the product lines associated with those revenues that will be utilized for future revenue reporting. As of January 1, 2016, the Company’s product lines consist of the following: • Advanced Surgical, Orthopaedics, and Portable Medical: Includes legacy Greatbatch Orthopaedics and Portable Medical product line sales plus the legacy Lake Region Medical Advanced Surgical product line sales. Products include components, sub-assemblies, finished devices, implants, instruments and delivery systems for a range of surgical technologies to the advanced surgical market, including laparoscopy, orthopaedics and general surgery, biopsy and drug delivery, joint preservation and reconstruction, arthroscopy, and engineered tubing solutions. Products also include life-saving and life-enhancing applications comprising of automated external defibrillators, portable oxygen concentrators, ventilators, and powered surgical tools for the portable medical markets. • Cardio and Vascular: Includes the legacy Greatbatch Vascular product line sales plus the legacy Lake Region Medical Cardio and Vascular product line sales less the legacy Lake Region Medical Cardiac/Neuromodulation sales. Products include introducers, steerable sheaths, guidewires, catheters, and stimulation therapy components, subassemblies and finished devices that deliver therapies for various markets such as coronary and neurovascular disease, peripheral vascular disease, interventional radiology, vascular access, atrial fibrillation, and interventional cardiology, plus products for medical imaging and pharmaceutical delivery. • Cardiac/Neuromodulation: Includes the legacy Greatbatch Cardiac/Neuromodulation and QiG sales plus the legacy Lake Region Medical Cardiac/Neuromodulation sales previously included in their Cardio and Vascular product line sales. Products include batteries, capacitors, filtered and unfiltered feed-throughs, engineered components, implantable stimulation leads, and enclosures used in implantable medical devices. • Electrochem : Includes the legacy Greatbatch Energy, Military and Environmental product line sales. Products include primary and rechargeable batteries and battery packs for demanding applications such as down hole drilling tools. An analysis and reconciliation of the Company’s business segments, product lines and geographic information to the respective information in the Consolidated Financial Statements follows. Intersegment sales between Greatbatch Medical and QiG were not material for 2014 or 2013. Approximately $1.8 million of intersegment sales are included in Greatbatch Medical and $1.2 million intersegment sales are included in Lake Region Medical. Sales by geographic area are presented by allocating sales from external customers based on where the products are shipped (in thousands): Year Ended January 1, January 2, January 3, Product line sales: Advanced Surgical, Orthopaedics, and Portable Medical $ 243,385 $ 216,339 $ 208,990 Cardio and Vascular 143,260 58,770 48,357 Cardiac/Neuromodulation 356,064 330,921 328,455 Electrochem 59,449 81,757 78,143 Elimination of interproduct line sales (1,744 ) — — Total sales $ 800,414 $ 687,787 $ 663,945 Year Ended January 1, January 2, January 3, Business segment sales: Greatbatch Medical $ 649,977 $ 678,285 $ 660,902 QiG 13,571 9,502 3,043 Lake Region Medical 139,819 — — Elimination of intersegment sales (2,953 ) — — Total sales $ 800,414 $ 687,787 $ 663,945 Year Ended January 1, January 2, January 3, Segment income (loss) from operations: Greatbatch Medical $ 109,737 $ 126,312 $ 111,805 QiG (25,855 ) (23,256 ) (30,484 ) Lake Region Medical (16,416 ) — — Total segment income from operations 67,466 103,056 81,321 Unallocated operating expenses (54,320 ) (27,402 ) (19,982 ) Operating income 13,146 75,654 61,339 Unallocated other income (expense), net (28,846 ) 925 (12,501 ) Income (loss) before provision for income taxes $ (15,700 ) $ 76,579 $ 48,838 Year Ended January 1, January 2, January 3, Depreciation and amortization: Greatbatch Medical $ 30,160 $ 31,906 $ 31,112 QiG 1,862 2,101 1,539 Lake Region Medical 32,249 — — Total depreciation and amortization included in segment income from operations 64,271 34,007 32,651 Unallocated depreciation and amortization 3,347 3,450 3,315 Total depreciation and amortization $ 67,618 $ 37,457 $ 35,966 Year Ended January 1, January 2, January 3, Expenditures for tangible long-lived assets, excluding acquisitions: Greatbatch Medical $ 32,921 $ 19,006 $ 13,242 QiG 1,160 1,453 2,134 Lake Region Medical 7,525 — — Total reportable segments 41,606 20,459 15,376 Unallocated long-lived tangible assets 6,448 5,187 2,798 Total expenditures $ 48,054 $ 25,646 $ 18,174 At January 1, January 2, January 3, Identifiable assets: Greatbatch Medical $ 798,609 $ 761,225 $ 758,369 QiG 68,637 76,529 56,245 Lake Region Medical 1,971,071 — — Total reportable segments 2,838,317 837,754 814,614 Unallocated assets 143,819 117,368 75,015 Total assets $ 2,982,136 $ 955,122 $ 889,629 Year Ended January 1, January 2, January 3, Sales by geographic area: United States $ 401,380 $ 312,539 $ 325,090 Non-Domestic locations: Puerto Rico 136,898 127,702 117,961 Belgium 62,546 65,308 67,155 Rest of world 199,590 182,238 153,739 Total sales $ 800,414 $ 687,787 $ 663,945 At January 1, January 2, January 3, Long-lived tangible assets: United States $ 264,556 $ 113,851 $ 116,484 Rest of world 114,936 31,074 29,289 Total $ 379,492 $ 144,925 $ 145,773 A significant portion of the Company’s sales and accounts receivable were to four customers as follows: Sales Accounts Receivable Year Ended At January 1, January 2, January 3, January 1, January 2, Customer A 18 % 18 % 16 % 23 % 23 % Customer B 17 % 18 % 20 % 8 % 4 % Customer C 12 % 12 % 13 % 6 % 8 % Customer D 5 % 6 % 7 % 7 % 12 % 52 % 54 % 56 % 44 % 47 % |
Quarterly Sales and Earnings Da
Quarterly Sales and Earnings Data - Unaudited | 12 Months Ended |
Jan. 01, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY SALES AND EARNINGS DATA - UNAUDITED | 20. QUARTERLY SALES AND EARNINGS DATA—UNAUDITED 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. (in thousands, except per share data) 2015 Sales $ 317,567 $ 146,637 $ 174,890 $ 161,320 Gross profit 73,140 51,646 57,951 52,398 Net income (loss) (24,907 ) 22 9,283 8,008 EPS—basic (0.85 ) — 0.36 0.32 EPS—diluted (0.85 ) — 0.35 0.31 2014 Sales $ 169,726 $ 171,699 $ 172,081 $ 174,281 Gross profit 57,214 58,118 58,470 57,596 Net income 14,176 14,012 12,348 14,922 EPS—basic 0.57 0.56 0.50 0.61 EPS—diluted 0.54 0.54 0.48 0.58 Net income (loss) in the third and fourth quarters of 2015 include $13.0 million and $57.1 million , respectively, of charges incurred in connection with the Lake Region Medical acquisition (transaction and integration, inventory step-up amortization, debt related charges) and Spin-off of Nuvectra (professional and consulting fees). Sales for the fourth quarter of 2015 include $138.6 million from the acquisition of Lake Region Medical. Refer to Note 2 “Acquisitions.” |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Jan. 01, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation and Qualifying Accounts Disclosure | Schedule II—Valuation and Qualifying Accounts Col. C—Additions Col. A Description Col. B Balance at Beginning of Period Charged to Costs & Expenses Charged to Other Accounts- Describe Col. D Deductions - Describe Col. E Balance at End of Period January 1, 2016 Allowance for doubtful accounts $ 1,411 $ (70 ) $ 459 (3)(4) $ (846 ) (2) $ 954 Valuation allowance for deferred income tax assets $ 10,709 $ 788 (1) $ 27,836 (3)(4) $ (162 ) (5) $ 39,171 January 2, 2015 Allowance for doubtful accounts $ 2,001 $ 98 $ 14 (3)(4) $ (702 ) (2) $ 1,411 Valuation allowance for deferred income tax assets $ 11,661 $ (729 ) (1) $ — (4) $ (223 ) (1)(5) $ 10,709 January 3, 2014 Allowance for doubtful accounts $ 2,372 $ (93 ) $ (15 ) (4) $ (263 ) (2) $ 2,001 Valuation allowance for deferred income tax assets $ 12,768 $ (1,263 ) (1) $ 32 (4) $ 124 (1) $ 11,661 (1) Valuation allowance recorded in the provision for income taxes for certain net operating losses and tax credits. The net decrease in allowance in 2014 and 2013 primarily relates to the use of net operating loss carryforwards. (2) Accounts written off. (3) Balance recorded as a part of our 2015 acquisition of Lake Region Medical and our 2014 acquisition of Centro de Construcción de Cardioestimuladores del Uruguay. (4) Includes foreign currency translation effect. (5) Primarily relates to return to provision adjustments for prior years. |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 01, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation – The consolidated financial statements include the accounts of Greatbatch, Inc. and its wholly owned subsidiaries (collectively, the “Company” or “Greatbatch”). All intercompany balances and transactions have been eliminated in consolidation. |
Fiscal Year End | Fiscal Year End – The Company utilizes a fifty-two , fifty-three week fiscal year ending on the Friday nearest December 31. Fiscal years 2015 , 2014 and 2013 ended on January 1, 2016 , January 2, 2015 and January 3, 2014 . Fiscal years 2015 and 2014 each contained fifty-two weeks, while fiscal year 2013 contained fifty-three weeks. |
Fair Value Measurements | Fair Value Measurements – Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e . the “exit price”) in an orderly transaction between market participants at the measurement date. Accounting Standards Codification (“ASC”) 820, Fair Value Measurements, establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows: Level 1 – Valuation is based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Level 1 valuations do not entail a significant degree of judgment. Level 2 – Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market. Level 3 – Valuation is based on unobservable inputs that are significant to the overall fair value measurement. The degree of judgment in determining fair value is greatest for Level 3 valuations. The availability of observable inputs can vary and is affected by a wide variety of factors, including, the type of asset/liability, whether the asset/liability is established in the marketplace, and other characteristics particular to the valuation. To the extent that a valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, assumptions are required to reflect those that market participants would use in pricing the asset or liability at the measurement date. Note 18 “Fair Value Measurements” contains additional information on assets and liabilities recorded at fair value in the consolidated financial statements. |
Cash and Cash Equivalents | Cash and Cash Equivalents – Cash and cash equivalents consist of cash and highly liquid, short-term investments with maturities at the time of purchase of three months or less. The carrying amount of cash and cash equivalents approximated their fair value as of January 1, 2016 and January 2, 2015 based upon the short-term nature of these instruments. |
Concentration of Credit Risk | Concentration of Credit Risk – Financial instruments that potentially subject the Company to concentration of credit risk consist principally of accounts receivable. A significant portion of the Company’s sales and/or accounts receivable are to four customers, all in the medical device industry, and, as such, the Company is directly affected by the condition of those customers and that industry. However, the credit risk associated with trade receivables is partially mitigated due to the stability of those customers. The Company performs on-going credit evaluations of its customers. Note 19 “Business Segment, Geographic and Concentration Risk Information” contains information on sales and accounts receivable for these customers. The Company maintains cash deposits with major banks, which from time to time may exceed insured limits. The Company performs on-going credit evaluations of its banks. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts – The Company provides credit, in the normal course of business, to its customers in the form of trade receivables. Credit is extended based on evaluation of a customer’s financial condition and collateral is not required. The Company maintains an allowance for those customer receivables that it does not expect to collect. The Company accrues its estimated losses from uncollectable accounts receivable to the allowance based upon recent historical experience, the length of time the receivable has been outstanding and other specific information as it becomes available. Provisions to the allowance for doubtful accounts are charged to current operating expenses. Actual losses are charged against this allowance when incurred. The carrying amount of trade receivables approximated their fair value as of January 1, 2016 and January 2, 2015 based upon the short-term nature of these assets. |
Inventories | Inventories – Inventories are stated at the lower of cost, determined using the first-in first-out method, or market. Write-downs for excess, obsolete or expired inventory are based primarily on how long the inventory has been held as well as estimates of forecasted net sales of that product. A significant change in the timing or level of demand for products may result in recording additional write-downs for excess, obsolete or expired inventory in the future. Note 4 “Inventories” contains additional information on the Company’s inventory. |
Property, Plant and Equipment | Property, Plant and Equipment (“PP&E”) – PP&E is carried at cost less accumulated depreciation. Depreciation is computed by the straight-line method over the estimated useful lives of the assets, as follows: buildings and building improvements 7 - 40 years; machinery and equipment 3 - 10 years; office equipment 3 - 10 years; and leasehold improvements over the remaining lives of the improvements or the lease term, if less. The cost of repairs and maintenance are expensed as incurred; renewals and betterments are capitalized. Upon retirement or sale of an asset, its cost and related accumulated depreciation or amortization is removed from the accounts and any gain or loss is recorded in operating income or expense. Note 6 “Property, Plant and Equipment, Net” contains additional information on the Company’s PP&E. |
Business Combinations | Business Combinations – The Company records its business combinations under the acquisition method of accounting. Under the acquisition method of accounting, the Company allocates the purchase price of each acquisition to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values at the date of acquisition. The fair value of identifiable intangible assets is based upon detailed valuations that use various assumptions made by management. Any excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired is allocated to goodwill. All direct acquisition-related costs are expensed as incurred. In circumstances where an acquisition involves a contingent consideration arrangement, the Company recognizes a liability equal to the fair value of the contingent payments it expects to make as of the acquisition date. The Company re-measures this liability each reporting period and records changes in the fair value through Other Operating Expenses, Net. Increases or decreases in the fair value of the contingent consideration liability can result from changes in discount periods and rates, as well as changes in the timing, amount of, or the likelihood of achieving the applicable contingent consideration. |
Amortizing Intangible Assets | Amortizing Intangible Assets – Amortizing intangible assets consists primarily of purchased technology and patents, and customer lists. The Company amortizes its definite-lived intangible assets over their estimated useful lives utilizing an accelerated or straight-line method of amortization, which approximates the projected cash flows used to fair value those intangible assets at the time of acquisition. When the straight-line method of amortization is utilized, the estimated useful life of the intangible asset is shortened to assure that recognition of amortization expense corresponds with the expected cash flows. The amortization period for the Company’s amortizing intangible assets are as follows: purchased technology and patents 5 - 15 years; customer lists 7 - 20 years and other intangible assets 1 - 10 years. Refer to Note 7 “Intangible Assets” for additional information on the Company’s amortizing intangible assets. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets – The Company assesses the impairment of definite-lived long-lived assets or asset groups when events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that are considered in deciding when to perform an impairment review include: a significant decrease in the market price of the asset or asset group; a significant change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition; a significant change in legal factors or in the business climate that could affect the value of a long-lived asset or asset group, including an action or assessment by a regulator; an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction; a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group; or a current expectation that, more likely than not, a long-lived asset or asset group will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The term more likely than not refers to a level of likelihood that is more than 50 percent . Potential recoverability is measured by comparing the carrying amount of the asset or asset group to its related total future undiscounted cash flows. If the carrying value is not recoverable, the asset or asset group is considered to be impaired. Impairment is measured by comparing the asset or asset group’s carrying amount to its fair value. When it is determined that useful lives of assets are shorter than originally estimated, and no impairment is present, the rate of depreciation is accelerated in order to fully depreciate the assets over their new shorter useful lives. |
Goodwill and Intangible Assets | Goodwill and other indefinite lived intangible assets recorded are not amortized but are periodically tested for impairment. The Company assesses goodwill for impairment on the last day of each fiscal year, or more frequently if certain events occur as described above. Goodwill is evaluated for impairment through the comparison of the fair value of the reporting units to their carrying values. When evaluating goodwill for impairment, the Company may first perform an assessment of qualitative factors to determine if the fair value of the reporting unit is more-likely-than-not greater than its carrying amount. This qualitative assessment is referred to as a “step zero ” approach. If, based on the review of the qualitative factors, the Company determines it is more-likely-than-not that the fair value of the reporting unit is greater than its carrying value, the required two-step impairment test can be bypassed. If the Company does not perform a step zero assessment or if the fair value of the reporting unit is more-likely-than-not less than its carrying value, the Company must perform a two-step impairment test, and calculate the estimated fair value of the reporting unit. If, based upon the two-step impairment test, it is determined that the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of the goodwill within the reporting unit is less than its carrying value. Under the two-step approach, fair values for reporting units are determined based on discounted cash flows and market multiples. The Company completed its annual goodwill impairment assessment for 2015 by performing a step zero qualitative analysis. As part of this analysis, the Company evaluated factors including, but not limited to, macro-economic conditions, market and industry conditions, cost factors, competitive environment, share price fluctuations, results of the last impairment test, and the operational stability and the overall financial performance of the reporting units. After completing the analysis, the Company determined that it was more likely than not that its reporting units fair values are greater than the reporting units carrying values and the two-step impairment test is not necessary. Other indefinite lived intangible assets are assessed for impairment on the last day of each fiscal year, or more frequently if certain events occur as described above, by comparing the fair value of the intangible asset to its carrying value. The fair value is determined by using the income approach. Note 7 “Intangible Assets” contains additional information on the Company’s long-lived intangible assets. |
Debt | Debt Issuance Costs and Discounts – In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” This ASU requires that debt issuance costs be presented as a direct reduction to the carrying amount of the related debt in the balance sheet rather than as a deferred charge, consistent with the presentation of discounts on debt. ASU 2015-15, “Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements,” was issued in August 2015 to clarify that the U.S. Securities and Exchange Commission (“SEC”) staff would not object to an entity deferring and presenting debt issuance costs related to a line-of-credit arrangement as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. As permitted, during the fourth quarter of 2015, the Company elected to early adopt these ASUs and has elected to retrospectively apply this guidance. As a result, the Company has classified $35.9 million and $0.9 million as of January 1, 2016 and January 2, 2015, respectively, of deferred debt issuance costs associated with its term-debt from Other Assets to Long-Term Debt in the Consolidated Balance Sheets. Deferred debt issuance costs associated with the Company’s revolving credit facility of $4.8 million and $2.2 million as of January 1, 2016 and January 2, 2015, respectively, are classified within Other Assets. Debt issuance costs incurred in connection with the Company’s issuance of its revolving credit facility are amortized to Interest Expense on a straight-line basis over the contractual term of the credit facility. Unamortized debt issuance costs and unamortized debt discounts related to the Company’s term-debt are recorded as a reduction of the carrying value of the related debt. These debt issuance costs and discounts are amortized to Interest Expense using the effective interest method over the period from the date of issuance to the put option date (if applicable) or the maturity date, whichever is earlier. The amortization of debt issuance costs and discounts are included in Debt Related Amortization Included in Interest Expense in the Consolidated Statements of Cash Flows. Note 9 “Debt” contains additional information on the Company’s debt issuance costs and discounts. |
Other Long-Term Assets | Other Long-Term Assets – Other long-term assets also include investments in equity securities of entities that are not publicly traded and which do not have readily determinable fair values. The Company accounts for investments in these entities under the cost or equity method depending on the type of ownership interest, as well as the Company’s ability to exercise influence over these entities. Equity method investments are initially recorded at cost, and are subsequently adjusted to reflect the Company’s share of earnings or losses of the investee. Cost method investments are recorded at historical cost. Each reporting period, management evaluates these cost and equity method investments to determine if there are any events or circumstances that are likely to have a significant effect on the fair value of the investment. Examples of such impairment indicators include, but are not limited to: a recent sale or offering of similar shares of the investment at a price below the Company’s cost basis; a significant deterioration in earnings performance; a significant change in the regulatory, economic or technological environment of the investee; or a significant doubt about an investee’s ability to continue as a going concern. If an impairment indicator is identified, management will estimate the fair value of the investment and compare it to its carrying value. The estimation of fair value considers all available financial information related to the investee, including, but not limited to, valuations based on recent third-party equity investments in the investee. If the fair value of the investment is less than its carrying value, the investment is impaired and a determination as to whether the impairment is other-than-temporary is made. Impairment is deemed to be other-than-temporary unless the Company has the ability and intent to hold the investment for a period sufficient for a market recovery up to the carrying value of the investment. Further, evidence must indicate that the carrying value of the investment is recoverable within a reasonable period. For other-than-temporary impairments, an impairment loss is recognized equal to the difference between the investment’s carrying value and its fair value. The Company has determined that these investments are not considered variable interest entities. The Company’s exposure related to these entities is limited to its recorded investment. These investments are in start-up research and development companies whose fair value is highly subjective in nature and subject to future fluctuations, which could be significant. |
Income Taxes | Income Taxes – The consolidated financial statements of the Company have been prepared using the asset and liability approach in accounting for income taxes, which requires the recognition of deferred income taxes for the expected future tax consequences of net operating losses, credits, and temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided on deferred tax assets if it is determined, within each taxing jurisdiction, that it is more likely than not that the asset will not be realized. The Company accounts for uncertain tax positions using a more likely than not recognition threshold. The evaluation of uncertain tax positions is based on factors including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. These tax positions are evaluated on a quarterly basis. The Company recognizes interest expense related to uncertain tax positions as Provision for Income Taxes. Penalties, if incurred, are recognized as a component of Selling, General and Administrative Expenses (“SG&A”). The Company and its subsidiaries file a consolidated U.S. federal income tax return. State tax returns are filed on a combined or separate basis depending on the applicable laws in the jurisdictions where the tax returns are filed. The Company also files foreign tax returns on a separate company basis in the countries in which it operates. In November 2015, the FASB issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes.” This ASU requires entities that present a classified balance sheet to classify all deferred income taxes as noncurrent assets or noncurrent liabilities. Previous accounting principles required an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified balance sheet. As permitted, during the fourth quarter of 2015, the Company elected to early adopt this ASU and has elected to prospectively apply its guidance. As a result, all deferred tax assets or liabilities shown in the Consolidated Balance Sheet as of January 1, 2016, are classified as noncurrent. Prior periods were not retrospectively adjusted for the adoption of this ASU. See Note 14 “Income Taxes” for additional information. |
Convertible Subordinated Notes | Convertible Subordinated Notes (“CSN”) – For convertible debt instruments that may be settled in cash upon conversion, the Company accounts for the liability and equity components of those instruments in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. Upon issuance, the Company determined the carrying amount of the liability component of CSN by measuring the fair value of a similar liability that does not have the associated conversion option. The carrying amount of the conversion option was then determined by deducting the fair value of the liability component from the initial proceeds received from the issuance of CSN. The carrying amount of the conversion option was recorded in Additional Paid-In Capital with an offset to Long-Term Debt and was amortized using the effective interest method over the period from the date of issuance to the maturity date. The amortization of discount related to the Company’s convertible debt instruments is included in Debt Related Amortization Included in Interest Expense in the Consolidated Statements of Cash Flows. See Note 9 “Debt” for additional information. |
Derivative Financial Instruments | Derivative Financial Instruments – The Company recognizes all derivative financial instruments in its consolidated financial statements at fair value . Changes in the fair value of derivative instruments are recorded in earnings unless hedge accounting criteria are met. The Company designated its interest rate swaps (See Note 9 “Debt”) and foreign currency contracts (See Note 15 “Commitments and Contingencies”) entered into as cash flow hedges. The effective portion of the changes in fair value of these cash flow hedges is recorded each period, net of tax, in Accumulated Other Comprehensive Income until the related hedged transaction occurs. Any ineffective portion of the changes in fair value of these cash flow hedges is recorded in earnings. In the event the hedged cash flow for forecasted transactions does not occur, or it becomes probable that they will not occur, the Company reclassifies the amount of any gain or loss on the related cash flow hedge to income (expense) at that time. Cash flows related to these derivative financial instruments are included in cash flows from operating activities. The cash flows from the termination of interest rate swap agreements are reported as operating activities in the consolidated statements of cash flows. |
Revenue Recognition | Revenue Recognition – The Company recognizes revenue when it is realized or realizable and earned. This occurs when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable (including any price concessions under long-term agreements), the buyer is obligated to pay us (i.e., not contingent on a future event), the risk of loss is transferred, there is no obligation of future performance, collectability is reasonably assured and the amount of future returns can reasonably be estimated. With regards to the Company’s customers (including distributors), those criteria are met when title passes, generally at the point of shipment. Currently, the revenue recognition policy is the same for Greatbatch Medical, Lake Region Medical and QiG. In general, for customers with long-term contracts, we have negotiated fixed pricing arrangements. During new contract negotiations, price level decreases (concessions) for future sales may be offered to customers in exchange for volume and/or long-term commitments. Once the new contracts are signed, these prices are fixed and determinable for all future sales. The Company includes shipping and handling fees billed to customers in Sales. Shipping and handling costs associated with inbound and outbound freight are recorded in Cost of Sales. Taxes collected from customers relating to product sales and remitted to governmental authorities are accounted for on a net basis. Accordingly, such taxes are excluded from Sales and Cost of Sales. In certain instances the Company obtains component parts from its customers that are included in the final product sold back to the same customer. These amounts are excluded from Sales and Cost of Sales recognized by the Company. |
Environmental Costs | Environmental Costs – Environmental expenditures that relate to an existing condition caused by past operations and that do not provide future benefits are expensed as incurred. Liabilities are recorded when environmental assessments are made, the requirement for remedial efforts is probable and the amount of the liability can be reasonably estimated. Liabilities are recorded generally no later than the completion of feasibility studies. The Company has an ongoing monitoring and identification process to assess how the activities, with respect to known exposures, are progressing against the recorded liabilities, as well as to identify other potential remediation sites that are presently unknown. |
Restructuring | Restructuring – The Company continually evaluates alternatives to align the business with the changing needs of its customers and to lower operating costs. This includes the realignment of its existing manufacturing capacity, facility closures, or similar actions, either in the normal course of business or pursuant to significant restructuring programs. These actions may result in employees receiving voluntary or involuntary employee termination benefits, which may be pursuant to contractual agreements. Voluntary termination benefits are accrued when an employee accepts the related offer. Involuntary termination benefits are accrued upon the commitment to a termination plan and the benefit arrangement is communicated to affected employees, or when liabilities are determined to be probable and estimable, depending on the existence of a substantive plan for severance or termination. All other exit costs are expensed as incurred. Refer to Note 13 “Other Operating Expenses, Net” for additional information. |
Product Warranties | Product Warranties – The Company allows customers to return defective or damaged products for credit, replacement, or exchange. The Company warrants that its products will meet customer specifications and will be free from defects in materials and workmanship . The Company accrues its estimated exposure to warranty claims, through Cost of Sales, based upon recent historical experience and other specific information as it becomes available. Note 15 “Commitments and Contingencies” contains additional information on the Company’s product warranties. |
Research, Development and Engineering Costs, Net | Research, Development and Engineering Costs, Net (“RD&E”) – RD&E costs are expensed as incurred. The primary costs are salary and benefits for personnel, material costs used in development projects and subcontracting costs. Cost reimbursements for certain engineering services from customers for whom the Company designs products are recorded as an offset to engineering costs upon achieving development milestones specified in the contracts. These reimbursements do not cover the complete cost of the development projects. Additionally, the technology developed under these cost reimbursement projects is owned by the Company and is utilized for future products developed for other customers. In-process research and development (“IPR&D”) represents research projects acquired in a business combination which are expected to generate cash flows but have not yet reached technological feasibility. The primary basis for determining the technological feasibility of these projects is whether or not regulatory approval has been obtained. The Company classifies IPR&D acquired in a business combination as an indefinite-lived intangible asset until the completion or abandonment of the associated projects. Upon completion, the Company determines the useful life of the IPR&D and begins amortizing the assets to reflect their use over their remaining lives. Upon permanent abandonment, the remaining carrying amount of the associated IPR&D is written-off. The Company tests the IPR&D acquired for impairment at least annually, and more frequently if events or changes in circumstances indicate that the assets may be impaired. The impairment test consists of a comparison of the fair value of the intangible assets with their carrying amount. If the carrying amount exceeds its fair value, the Company would record an impairment loss in an amount equal to the excess. |
Stock-Based Compensation | Stock-Based Compensation – The Company records compensation costs related to stock-based awards granted to employees based upon their estimated fair value on the grant date. Compensation cost for service-based awards is recognized ratably over the applicable vesting period. Compensation cost for nonmarket-based performance awards is reassessed each period and recognized based upon the probability that the performance targets will be achieved. Compensation cost for market-based performance awards is expensed ratably over the applicable vesting period and is recognized each period whether the performance metrics are achieved or not. The Company utilizes the Black-Scholes option pricing model to estimate the fair value of stock options granted. For service-based and nonmarket-based performance restricted stock and restricted stock unit awards, the fair market value of the award is determined based upon the closing value of the Company’s stock price on the grant date. For market-based performance restricted stock unit awards, the fair market value of the award is determined utilizing a Monte Carlo simulation model, which projects the value of the Company’s stock under numerous scenarios and determines the value of the award based upon the present value of those projected outcomes. The amount of stock-based compensation expense recognized is based on the portion of the awards that are ultimately expected to vest. The Company estimates pre-vesting forfeitures at the time of grant by analyzing historical data and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The total expense recognized over the vesting period will only be for those awards that ultimately vest, excluding market and nonmarket performance award considerations. Note 11 “Stock-Based Compensation” contains additional information on the Company’s stock-based compensation. |
Foreign Currency Translation | Foreign Currency Translation – The Company translates all assets and liabilities of its foreign subsidiaries, where the U.S. dollar is not the functional currency, at the period-end exchange rate and translates income and expenses at the average exchange rates in effect during the period. The net effect of this translation is recorded in the consolidated financial statements as Accumulated Other Comprehensive Income. Translation adjustments are not adjusted for income taxes as they relate to permanent investments in the Company’s foreign subsidiaries. |
Defined Benefit Plans | Defined Benefit Plans – The Company recognizes in its balance sheet as an asset or liability the overfunded or underfunded status of its defined benefit plans provided to its employees located in Mexico, Switzerland, France and Germany. This asset or liability is measured as the difference between the fair value of plan assets, if any, and the benefit obligation of those plans. For these plans, the benefit obligation is the projected benefit obligation, which is calculated based on actuarial computations of current and future benefits for employees. Actuarial gains or losses and prior service costs or credits that arise during the period, but are not included as components of net periodic benefit expense, are recognized as a component of Accumulated Other Comprehensive Income. Defined benefit expenses are charged to Cost of Sales, SG&A and RD&E expenses as applicable. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share (“EPS”) – Basic EPS is calculated by dividing Net Income (Loss) by the weighted average number of shares outstanding during the period. Diluted EPS is calculated by adjusting the weighted average number of shares outstanding for potential common shares if dilutive to the EPS calculation and consist of stock options, unvested restricted stock and restricted stock units and, if applicable, contingently convertible instruments such as convertible debt. Note 16 “Earnings (Loss) Per Share” contains additional information on the computation of the Company’s EPS. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) – The Company’s comprehensive income (loss) as reported in the Consolidated Statements of Operations and Comprehensive Income (Loss) includes net income (loss), foreign currency translation adjustments, the net change in cash flow hedges, and defined benefit plan liability adjustments. The Consolidated Statements of Operations and Comprehensive Income (Loss) and Note 17 “Accumulated Other Comprehensive Income” contains additional information on the computation of the Company’s comprehensive income (loss). |
Use of Estimates | Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of sales and expenses during the reporting periods. Actual results could differ materially from those estimates. |
Reclassifications | Reclassifications – Certain prior period amounts have been reclassified to conform to current year presentation. Refer to Note 19, “Business Segment, Geographic and Concentration Risk Information,” for a description of the changes made to the Company’s prior period product line sales classification to reflect the current year presentation. Additionally, during the current year the Company disclosed the Proceeds from Sale of Property, Plant and Equipment and Inventory Step-up amortization separately in the Consolidated Statements of Cash Flows as these amounts were more material for disclosure in the current year. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Not Yet Adopted – In the normal course of business, management evaluates all new accounting pronouncements issued by the FASB, SEC, Emerging Issues Task Force (“EITF”), or other authoritative accounting bodies to determine the potential impact they may have on the Company’s Consolidated Financial Statements. Based upon this review, except as noted below, management does not expect any of the recently issued accounting pronouncements, which have not already been adopted, to have a material impact on the Company’s Consolidated Financial Statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which requires companies to recognize all leases as assets and liabilities on the consolidated balance sheet. This ASU retains a distinction between finance leases and operating leases, and the classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the current accounting literature. The result of retaining a distinction between finance leases and operating leases is that under the lessee accounting model in Topic 842, the effect of leases in a consolidated statement of comprehensive income and a consolidated statement of cash flows is largely unchanged from previous GAAP. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted. The Company is currently evaluating the impact that the adoption of this ASU will have on its Consolidated Financial Statements. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This ASU requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; requires entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset and requires entities to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option. The new ASU is effective for public companies for fiscal years beginning after December 15, 2017. Early adoption of the own credit provision is permitted. The Company is currently evaluating the impact that the adoption of this ASU will have on its Consolidated Financial Statements. In September 2015, the FASB issued ASU No. 2015-16, “Business Combinations (Topic 805): Simpl ifying the Accounting for Measurement-Period Adjustments,” which amends the guidance for measurement-period adjustments related to business combinations. The amended ASU requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustments are determined. The acquirer will be required to record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date and disclose what the amounts in the previous periods would have been if those changes were made as of the acquisition date. This ASU is effective for adjustments to provisional amounts that occur in annual periods and interim periods within those annual periods beginning after December 15, 2015. The Company is currently assessing the impact of adopting this ASU on its Consolidated Financial Statements. In July 2015, the FASB issued ASU No. 2015-11, “Simplifying the Measurement of Inventory,” which simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU is effective for public business entities for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company is currently assessing the impact of adopting this ASU on its Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” The core principle behind ASU No. 2014-09 is that an entity should recognize revenue in an amount that reflects the consideration to which the entity expects to be entitled in exchange for delivering goods and services. This model involves a five-step process that includes identifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract and recognizing revenue when the entity satisfies the performance obligations. This ASU allows two methods of adoption; a full retrospective approach where historical financial information is presented in accordance with the new standard, and a modified retrospective approach where this ASU is applied to the most current period presented in the financial statements. In August 2015, the FASB issued ASU No 2015-14 “Revenue from Contracts with Customers: Deferral of the Effective Date,” which deferred the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, with earlier application permitted as of annual reporting periods beginning after December 15, 2016. The Company is currently assessing the financial impact of adopting ASU 2014-09 and the methods of adoption; however, given the scope of the new standard, the Company is currently unable to provide a reasonable estimate regarding the financial impact or which method of adoption will be elected. In April 2014, the FASB issued ASU No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which amends the definition of a discontinued operation and requires entities to provide additional disclosures about disposal transactions that do not meet the discontinued operations criteria. The revised ASU changes how entities identify and disclose information about disposal transactions under U.S. GAAP. This ASU is effective prospectively for all disposals (except disposals classified as held for sale before the adoption date) or components initially classified as held for sale in periods beginning on or after December 15, 2014. This ASU is applicable for disposal transactions, if any, that the Company enters into after January 2, 2015. This ASU did not materially impact the Company’s Consolidated Financial Statements. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Jan. 01, 2016 | |
Business Acquisition [Line Items] | |
Schedule of Pro Forma Information | The following unaudited pro forma information presents the consolidated results of operations of the Company, Lake Region Medical, and CCC as if those acquisitions occurred as of the beginning of fiscal years 2014 (Lake Region Medical) and 2013 (CCC) (in thousands, except per share amounts): Year Ended January 1, January 2, January 3, Sales $ 1,445,689 $ 1,441,782 $ 677,657 Net income (loss) 2,405 (25,865 ) 37,612 Earnings (loss) per share: Basic $ 0.08 $ (0.87 ) $ 1.57 Diluted $ 0.08 $ (0.87 ) $ 1.49 |
Lake Region Medical [Member] | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition | The aggregate consideration paid by the Company to the stockholders of Lake Region Medical consisted of the following (in thousands): Cash consideration paid to Lake Region Medical stockholders and equity award holders $ 478,490 Fair value of shares of Greatbatch common stock issued to Lake Region Medical stockholders 245,368 Fair value of replacement stock options attributable to pre-acquisition service 4,508 Total purchase consideration $ 728,366 |
Schedule of Purchase Price Allocation | The following table summarizes the preliminary allocation of Lake Region Medical purchase price to the assets acquired and liabilities assumed (in thousands): Assets acquired Current assets $ 269,815 Property, plant and equipment 216,473 Amortizing intangible assets 849,000 Indefinite-lived intangible assets 70,000 Goodwill 661,788 Other non-current assets 1,629 Total assets acquired 2,068,705 Liabilities assumed Current liabilities 102,485 Debt assumed 1,044,675 Other long-term liabilities 193,179 Total liabilities assumed 1,340,339 Net assets acquired $ 728,366 |
Schedule of Intangible Assets Acquired | The purchase price was allocated to intangible assets as follows (dollars in thousands): Amortizing Intangible Assets Fair Value Assigned Weighted Average Amortization Period (Years) Estimated Useful Life (Years) Weighted Average Discount Rate Technology $ 160,000 7 19 11.5% Customer lists 689,000 14 29 11.5% $ 849,000 13 27 11.5% Indefinite-lived Intangible Assets Trademarks and tradenames $ 70,000 N/A N/A 11.5% |
Centro De Construccion De Cardioestimuladores Del Uruguay [Member] | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the allocation of the CCC purchase price to the assets acquired and liabilities assumed as of the acquisition date (in thousands): Assets acquired Current assets $ 10,670 Property, plant and equipment 1,131 Amortizing intangible assets 6,100 Goodwill 8,296 Total assets acquired 26,197 Liabilities assumed Current liabilities 4,842 Deferred income taxes 1,590 Total liabilities assumed 6,432 Net assets acquired $ 19,765 |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class | Intangible Assets – The purchase price was allocated to intangible assets as follows (dollars in thousands): Amortizing Intangible Assets Fair Value Assigned Weighted Average Amortization Period (Years) Weighted Average Discount Rate Technology $ 1,400 10 18% Customer lists 4,600 10 18% Trademarks and tradenames 100 2 18% $ 6,100 10 18% |
Supplemental Cash Flow Inform30
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Jan. 01, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow | Year Ended January 1, January 2, January 3, (in thousands) Noncash investing and financing activities: Common stock contributed to 401(k) Plan $ 3,920 $ 4,341 $ 2,477 Property, plant and equipment purchases included in accounts payable 7,401 2,926 2,103 Common stock issued in connection with Lake Region Medical acquisition 245,368 — — Replacement stock options issued in connection with Lake Region Medical acquisition 4,508 — — Purchase of non-controlling interests in subsidiaries included in accrued expenses 6,818 — — Cash paid during the year for: Interest 13,057 3,521 4,989 Income taxes 6,312 13,565 44,165 Acquisition of noncash assets 2,013,604 22,434 — Liabilities assumed 1,340,339 6,432 — |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Jan. 01, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories are comprised of the following (in thousands): At January 1, January 2, Raw materials $ 107,296 $ 73,354 Work-in-process 93,729 38,930 Finished goods 51,141 16,958 Total $ 252,166 $ 129,242 |
Assets Held For Sale (Tables)
Assets Held For Sale (Tables) | 12 Months Ended |
Jan. 01, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disclosure of Long Lived Assets Held-for-sale | Assets held for sale included in Prepaid Expenses and Other Current Assets, is comprised of the following (in thousands): At Asset Business Segment January 1, January 2, Building and building improvements Greatbatch Medical $ 996 $ 1,635 |
Property, Plant and Equipment33
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Jan. 01, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment are comprised of the following (in thousands): At January 1, January 2, Manufacturing machinery and equipment $ 285,068 $ 167,173 Buildings and building improvements 130,184 89,258 Information technology hardware and software 43,947 31,725 Leasehold improvements 36,745 31,170 Furniture and fixtures 16,243 14,045 Land and land improvements 21,774 10,816 Construction work in process 76,835 14,129 Other 852 629 611,648 358,945 Accumulated depreciation (232,156 ) (214,020 ) Total $ 379,492 $ 144,925 |
Depreciation Expense Disclosure | Depreciation expense for property, plant and equipment was as follows (in thousands): Year Ended January 1, January 2, January 3, Depreciation expense $ 27,136 $ 23,320 $ 22,799 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Jan. 01, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Amortizing intangible assets, net are comprised of the following (in thousands): Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net Carrying Amount At January 1, 2016 Purchased technology and patents $ 255,776 $ (83,708 ) 1,444 $ 173,512 Customer lists 761,857 (40,815 ) (986 ) 720,056 Other 4,534 (4,946 ) 821 409 Total amortizing intangible assets $ 1,022,167 $ (129,469 ) $ 1,279 $ 893,977 At January 2, 2015 Purchased technology and patents $ 95,776 $ (75,894 ) $ 1,966 $ 21,848 Customer lists 72,857 (31,460 ) 1,374 42,771 Other 4,534 (4,619 ) 803 718 Total amortizing intangible assets $ 173,167 $ (111,973 ) $ 4,143 $ 65,337 |
Schedule of Finite-Lived Intangible Assets, Amortization Expense | Aggregate intangible asset amortization expense is comprised of the following (in thousands): Year Ended January 1, January 2, January 3, Cost of sales $ 7,403 $ 6,201 $ 6,822 SG&A 9,681 7,009 5,800 RD&E 412 667 545 Total intangible asset amortization expense $ 17,496 $ 13,877 $ 13,167 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future intangible asset amortization expense based upon the current carrying value is as follows (in thousands): Estimated Amortization Expense 2016 $ 37,854 2017 43,991 2018 44,894 2019 44,960 2020 45,467 Thereafter 676,811 Total estimated amortization expense $ 893,977 |
Schedule of Indefinite-Lived Intangible Assets | The change in indefinite-lived intangible assets during 2015 is as follows (in thousands): Trademarks and Tradenames At January 2, 2015 $ 20,288 Indefinite-lived intangible assets acquired 70,000 At January 1, 2016 $ 90,288 |
Schedule of Goodwill | The change in goodwill during 2015 is as follows (in thousands): Greatbatch Medical QiG Lake Region Medical Total At January 2, 2015 $ 304,297 $ 50,096 $ — $ 354,393 Goodwill acquired (Note 2) — — 661,788 661,788 Foreign currency translation (368 ) — (2,243 ) (2,611 ) At January 1, 2016 $ 303,929 $ 50,096 $ 659,545 $ 1,013,570 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Jan. 01, 2016 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses are comprised of the following (in thousands): At January 1, January 2, Salaries and benefits $ 37,579 $ 20,770 Profit sharing and bonuses 6,781 18,524 Accrued interest 9,378 195 Purchase of non-controlling interest in subsidiaries 6,818 — Severance and change in control payments 11,969 1,878 Warranty and customer rebates 7,205 660 Other 17,527 6,357 Total $ 97,257 $ 48,384 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jan. 01, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt is comprised of the following (in thousands): At January 1, January 2, Senior secured term loan A $ 375,000 $ — Senior secured term loan B 1,025,000 — 9.125% senior notes, due 2023 360,000 — Variable rate term loan — 187,500 Revolving line of credit — — Less unamortized discount on term loan B and debt issuance costs (45,947 ) (887 ) Total debt 1,714,053 186,613 Less current portion of long-term debt 29,000 11,250 Total long-term debt $ 1,685,053 $ 175,363 |
Schedule of Maturities of Long-term Debt | Contractual maturities of the Company’s debt facilities for the next five years and thereafter, excluding any discounts or premiums, as of January 1, 2016 are as follows (in thousands): 2016 $ 29,000 2017 31,344 2018 40,719 2019 47,750 2020 47,750 Thereafter 1,563,437 Total $ 1,760,000 |
Schedule of Interest | The contractual interest and discount amortization for CSN were as follows (in thousands): Year Ended January 1, January 2, January 3, Contractual interest $ — $ — $ 634 Discount amortization — — 5,368 |
Schedule of Deferred Financing Costs | The change in deferred debt issuance costs related to the Company’s revolving credit facilities is as follows (in thousands): At January 3, 2014 $ 2,786 Amortization during the period (586 ) At January 2, 2015 2,200 Financing costs deferred 4,152 Write-off during the period (907 ) Amortization during the period (654 ) At January 1, 2016 $ 4,791 The change in unamortized discount and debt issuance costs related to the Term Loan Facilities and Senior Notes is as follows (in thousands): Debt Issuance Costs Unamortized Discount on TLB Facility Total At January 3, 2014 $ 1,074 $ — $ 1,074 Amortization during the period (187 ) — (187 ) At January 2, 2015 887 — 887 Financing costs incurred 41,781 10,250 52,031 Write-off during the period (732 ) — (732 ) Amortization during the period (6,028 ) (211 ) (6,239 ) At January 1, 2016 $ 35,908 $ 10,039 $ 45,947 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 12 Months Ended |
Jan. 01, 2016 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |
Schedule of Projected Benefit Obligation and Fair Value of Plan Assets | Information relating to the funding position of the Company’s defined benefit plans as of the plans measurement date of January 1, 2016 and January 2, 2015 were as follows (in thousands): Year Ended January 1, January 2, Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 2,843 $ 2,422 Projected benefit obligation acquired 4,316 — Service cost 439 203 Interest cost 165 75 Plan participants’ contribution 61 36 Actuarial loss 235 630 Benefits transferred in, net 258 155 Settlement/curtailment gain — (337 ) Foreign currency translation (325 ) (341 ) Projected benefit obligation at end of year 7,992 2,843 Change in fair value of plan assets: Fair value of plan assets at beginning of year 437 731 Employer contributions (refund) 69 (39 ) Plan participants’ contributions 61 36 Actual loss on plan assets (39 ) (101 ) Benefits transferred in, net 362 198 Settlements — (337 ) Foreign currency translation (19 ) (51 ) Fair value of plan assets at end of year 871 437 Projected benefit obligation in excess of plan assets at end of year $ 7,121 $ 2,406 Defined benefit liability classified as other current liabilities $ 46 $ 25 Defined benefit liability classified as long-term liabilities $ 7,075 $ 2,381 Accumulated benefit obligation at end of year $ 6,299 $ 1,938 |
Schedule of Defined Benefit Plan Amounts Recognized in Other Comprehensive Income (Loss) | Amounts recognized in Accumulated Other Comprehensive Income are as follows (in thousands): Year Ended January 1, January 2, Net loss occurring during the year $ 164 $ 736 Amortization of losses (156 ) (138 ) Prior service cost (1 ) (2 ) Amortization of prior service cost (9 ) (11 ) Foreign currency translation — (76 ) Pre-tax adjustment (2 ) 509 Taxes 22 (135 ) Net loss $ 20 $ 374 |
Schedule of Amounts in Accumulated Other Comprehensive Income (Loss) to be Recognized over Next Fiscal Year | The amortization of amounts in Accumulated Other Comprehensive Income expected to be recognized as components of net periodic benefit expense during 2016 are as follows (in thousands): Amortization of net prior service cost $ 10 Amortization of net loss 172 |
Schedule of Net Benefit Costs | Net pension cost is comprised of the following (in thousands): Year Ended January 1, 2016 January 2, 2015 Service cost $ 439 $ 203 Interest cost 165 75 Settlements loss — 105 Expected return on assets (11 ) (3 ) Recognized net actuarial loss 164 45 Net pension cost $ 757 $ 425 |
Schedule of Assumptions Used | The weighted-average rates used in the actuarial valuations were as follows: Projected Benefit Obligation Net Pension Cost January 1, January 2, 2015 2014 2013 Discount rate 2.2 % 2.3 % 2.3 % 3.4 % 2.1 % Salary growth 2.9 % 3.0 % 3.0 % 3.1 % 2.4 % Expected rate of return on assets 2.0 % 2.3 % 2.3 % 2.5 % — % |
Schedule of Allocation of Plan Assets | Plan assets were comprised of the following (in thousands): Fair Value Measurements Using January 1, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Insurance contract $ 871 $ — $ 871 $ — Total $ 871 $ — $ 871 $ — Fair Value Measurements Using January 2, Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Insurance contract $ 437 $ — $ 437 $ — Total $ 437 $ — $ 437 $ — |
Schedule of Expected Benefit Payments | Estimated benefit payments over the next ten years are as follows (in thousands): 2016 $ 166 2017 205 2018 225 2019 277 2020 265 2020-2024 1,619 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Jan. 01, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The components and classification of stock-based compensation expense were as follows (in thousands): Year Ended January 1, January 2, January 3, Stock options $ 2,708 $ 2,523 $ 3,490 Restricted stock and units 6,668 6,417 5,843 401(k) stock contribution — 4,246 4,768 Total stock-based compensation expense $ 9,376 $ 13,186 $ 14,101 Cost of sales $ 795 $ 3,530 $ 3,864 Selling, general and administrative expenses 7,510 7,923 7,907 Research, development and engineering costs, net 982 1,440 1,194 Other operating expenses, net (Note 13) 89 293 1,136 Total stock-based compensation expense $ 9,376 $ 13,186 $ 14,101 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The weighted-average fair value and assumptions used are as follows: Year Ended January 1, January 2, January 3, Weighted average grant date fair value $ 12.18 $ 16.43 $ 8.38 Risk-free interest rate 1.55 % 1.73 % 0.73 % Expected volatility 26 % 39 % 39 % Expected life (in years) 4.7 5.3 5.3 Expected dividend yield 0 % 0 % 0 % Annual prevesting forfeiture rate 9 % 9 % 9 % |
Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes time and performance-vested stock option activity: Number of Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value (In Millions) Outstanding at December 28, 2012 2,060,772 $ 23.18 Granted 372,676 23.33 Exercised (551,092 ) 23.24 Forfeited or expired (88,686 ) 28.05 Outstanding at January 3, 2014 1,793,670 22.96 Granted 183,571 43.84 Exercised (353,625 ) 23.41 Forfeited or expired (33,279 ) 27.82 Outstanding at January 2, 2015 1,590,337 25.17 Granted 301,547 49.20 Replacement options granted in connection with the Lake Region Medical acquisition 119,900 12.41 Exercised (280,701 ) 23.45 Forfeited or expired (52,183 ) 42.45 Outstanding at January 1, 2016 1,678,900 $ 28.32 6.1 $ 40.6 Expected to vest at January 1, 2016 1,643,386 $ 27.90 6.1 $ 40.4 Exercisable at January 1, 2016 1,467,256 $ 25.50 5.8 $ 39.6 |
Schedule Of Stock Option Exercise Information | The following table provides certain information relating to the exercise of stock options (in thousands): Year Ended January 1, January 2, January 3, Intrinsic value $ 8,231 $ 7,997 $ 6,807 Cash received 6,583 8,278 12,807 Tax benefit realized 1,954 1,704 727 |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | The following table summarizes time-vested restricted stock and unit activity: Time-Vested Activity Weighted Average Fair Value Nonvested at December 28, 2012 80,269 $ 23.48 Granted 67,230 26.76 Vested (74,062 ) 23.93 Forfeited (5,862 ) 22.26 Nonvested at January 3, 2014 67,575 26.37 Granted 63,817 44.78 Vested (53,568 ) 34.16 Forfeited (9,992 ) 35.30 Nonvested at January 2, 2015 67,832 36.22 Granted 44,629 49.84 Vested (56,119 ) 37.93 Forfeited (17,107 ) 40.48 Nonvested at January 1, 2016 39,235 $ 47.40 The following table summarizes performance-vested restricted stock and stock unit activity related to the Company’s plans: Performance- Vested Activity Weighted Average Fair Value Nonvested at December 28, 2012 782,446 $ 16.02 Granted 318,169 15.86 Vested (49,139 ) 14.68 Forfeited (271,798 ) 14.94 Nonvested at January 3, 2014 779,678 16.41 Granted 186,825 31.33 Vested (221,470 ) 18.51 Forfeited (28,870 ) 18.42 Nonvested at January 2, 2015 716,163 19.57 Granted 179,940 32.92 Vested (270,198 ) 15.30 Forfeited (48,080 ) 26.96 Nonvested at January 1, 2016 577,825 $ 25.11 |
Research, Development and Eng39
Research, Development and Engineering Costs (Tables) | 12 Months Ended |
Jan. 01, 2016 | |
Research and Development Expense [Abstract] | |
Schedule Of Research And Development Expense Details | Research, Development and Engineering Costs, Net are comprised of the following (in thousands): Year Ended January 1, January 2, January 3, Research, development and engineering costs $ 59,767 $ 58,974 $ 62,652 Less: cost reimbursements (6,772 ) (9,129 ) (8,575 ) Total research, development and engineering costs, net $ 52,995 $ 49,845 $ 54,077 |
Other Operating Expenses, Net (
Other Operating Expenses, Net (Tables) | 12 Months Ended |
Jan. 01, 2016 | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Other Operating Cost and Expense, by Component | Other Operating Expenses, Net is comprised of the following (in thousands): Year Ended January 1, January 2, January 3, 2014 investments in capacity and capabilities $ 23,037 $ 8,925 $ — Orthopaedic facilities optimization 1,395 1,317 8,038 2013 operating unit realignment — 1,017 5,625 Legacy Lake Region Medical consolidations 1,961 — — Other consolidation and optimization costs (income) — (71 ) 1,095 Acquisition and integration costs (income) 33,449 3 (502 ) Asset dispositions, severance and other 6,622 4,106 1,534 Total other operating expenses, net $ 66,464 $ 15,297 $ 15,790 |
Legacy Lake Region Medical Consolidation [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring Reserve by Type of Cost | The change in accrued liabilities related to these legacy Lake Region Medical consolidation initiatives is as follows (in thousands): Employee Costs Other Exit Costs Total At October 27, 2015 $ 3,392 $ 653 $ 4,045 Restructuring charges 557 1,404 1,961 Write-offs — — — Cash payments (282 ) (1,461 ) (1,743 ) At January 1, 2016 $ 3,667 $ 596 $ 4,263 |
Investments in Capacity and Capabilities [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring Reserve by Type of Cost | The change in accrued liabilities related to the 2014 investments in capacity and capabilities is as follows (in thousands): Severance and Retention Accelerated Depreciation/ Asset Write-offs Other Total At January 2, 2015 $ 1,163 $ — $ 1,066 $ 2,229 Restructuring charges 2,729 235 20,073 23,037 Write-offs — (235 ) — (235 ) Cash payments (2,463 ) — (19,544 ) (22,007 ) At January 1, 2016 $ 1,429 $ — $ 1,595 $ 3,024 |
Orthopaedic Facility Optimization [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring Reserve by Type of Cost | The change in accrued liabilities related to the orthopaedic facilities optimizations is as follows (in thousands): Severance and Retention Accelerated Depreciation/ Asset Write-offs Other Total At January 2, 2015 $ — $ — $ 287 $ 287 Restructuring charges — 88 1,307 1,395 Write-offs — (88 ) — (88 ) Cash payments — — (1,594 ) (1,594 ) At January 1, 2016 $ — $ — $ — $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 01, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | The U.S. and international components of income (loss) before provision for income taxes were as follows (in thousands): Year Ended January 1, January 2, January 3, U.S. $ (42,166 ) $ 56,801 $ 42,392 International 26,466 19,778 6,446 Total income (loss) before provision for income taxes $ (15,700 ) $ 76,579 $ 48,838 |
Schedule of Components of Income Tax Expense (Benefit) | The provision (benefit) for income taxes was comprised of the following (in thousands): Year Ended January 1, January 2, January 3, Current: Federal $ (3,753 ) $ 16,293 $ 39,353 State (367 ) 1,299 1,604 International 6,312 2,998 1,470 2,192 20,590 42,427 Deferred: Federal (8,144 ) 1,211 (28,678 ) State (880 ) (310 ) 427 International (1,274 ) (370 ) (1,605 ) (10,298 ) 531 (29,856 ) Total provision (benefit) for income taxes $ (8,106 ) $ 21,121 $ 12,571 |
Schedule of Effective Income Tax Rate Reconciliation | The provision (benefit) for income taxes differs from the U.S. statutory rate due to the following: Year Ended January 1, January 2, January 3, Statutory rate $ (5,495 ) 35.0 % $ 26,803 35.0 % $ 17,093 35.0 % Federal tax credits (1,850 ) 11.8 (1,600 ) (2.1 ) (3,651 ) (7.5 ) Foreign rate differential (3,180 ) 20.2 (3,276 ) (4.3 ) (348 ) (0.7 ) Uncertain tax positions (531 ) 3.4 412 0.6 831 1.7 State taxes, net of federal benefit (1,490 ) 9.5 507 0.7 1,148 2.3 Change in foreign tax rates (91 ) 0.6 (446 ) (0.6 ) (1,806 ) (3.7 ) Non-deductible transaction costs 4,867 (31.0 ) — — — — Valuation allowance 626 (4.0 ) (299 ) (0.4 ) 186 0.4 Other (962 ) 6.1 (980 ) (1.3 ) (882 ) (1.8 ) Effective tax rate $ (8,106 ) 51.6 % $ 21,121 27.6 % $ 12,571 25.7 % |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets (liabilities) consist of the following (in thousands): At January 1, January 2, Tax credits $ 22,196 $ 5,828 Net operating loss carryforwards 153,949 6,721 Inventories 6,543 3,335 Accrued expenses 13,138 4,338 Stock-based compensation 9,512 9,341 Other 38 1,659 Gross deferred tax assets 205,376 31,222 Less valuation allowance (39,171 ) (10,709 ) Net deferred tax assets 166,205 20,513 Property, plant and equipment (32,772 ) (2,646 ) Intangible assets (347,896 ) (57,850 ) Convertible subordinated notes (3,754 ) (5,006 ) Gross deferred tax liabilities (384,422 ) (65,502 ) Net deferred tax liability $ (218,217 ) $ (44,989 ) Presented as follows: Current deferred tax asset $ — $ 6,168 Current deferred tax liability — (588 ) Noncurrent deferred tax asset 3,587 2,626 Noncurrent deferred tax liability (221,804 ) (53,195 ) Net deferred tax liability $ (218,217 ) $ (44,989 ) |
Summary of Operating Loss and Tax Credit Carryforwards | As of January 1, 2016 , the Company has the following carryforwards available: Jurisdiction Tax Attribute Amount (in millions) Begin to Expire Federal Net Operating Loss $ 386.2 2019 International Net Operating Loss 42.2 2016 State Net Operating Loss 298.7 2016 Federal Foreign Tax Credit 17.0 2019 U.S. and State R&D Tax Credit 2.6 2018 State Investment Tax Credit 5.3 2016 |
Summary of Income Tax Contingencies | Below is a summary of changes to the unrecognized tax benefit (in thousands): Year Ended January 1, January 2, January 3, Balance, beginning of year $ 2,411 $ 1,858 $ 970 Additions relating to business combinations 7,443 — — Additions based upon tax positions related to the current year 274 268 325 Additions related to prior period tax positions 163 510 651 Reductions relating to settlements with tax authorities (550 ) (225 ) (88 ) Reductions as a result of a lapse of applicable statute of limitations (470 ) — — Balance, end of year $ 9,271 $ 2,411 $ 1,858 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jan. 01, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Product Warranty Liability | The change in product warranty liability was comprised of the following (in thousands): Year Ended January 1, January 2, Beginning balance $ 660 $ 1,819 Additions to warranty reserve 1,274 953 Liabilities assumed from acquisition 2,521 — Warranty claims paid (1,139 ) (2,112 ) Ending balance $ 3,316 $ 660 |
Operating Leases of Lessee Disclosure | Operating lease expense was as follows (in thousands): Year Ended January 1, January 2, January 3, Operating lease expense $ 6,516 $ 4,281 $ 4,379 |
Schedule of Future Minimum Rental Payments for Operating Leases | Minimum future estimated annual operating lease expenses are as follows (in thousands): 2016 $ 14,118 2017 10,951 2018 9,950 2019 8,979 2020 6,925 Thereafter 27,674 Total estimated operating lease expense $ 78,597 |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The impact to the Company’s results of operations from its forward contracts was as follows (in thousands): Year Ended January 1, January 2, January 3, Increase (reduction) in Cost of Sales $ 1,948 $ (168 ) $ (1,154 ) Ineffective portion of change in fair value — — — |
Schedule of Foreign Exchange Contracts, Statement of Financial Position | Information regarding outstanding foreign currency contracts as of January 1, 2016 is as follows (dollars in thousands): Instrument Type of Hedge Aggregate Amount Start Date End Date $/Peso Fair Value Balance Sheet Location FX Contract Cash Flow $ 16,480 Jan 2016 Dec 2016 0.0584 $ (307 ) Accrued Expenses |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Jan. 01, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table illustrates the calculation of Basic and Diluted EPS (in thousands, except per share amounts): Year Ended January 1, January 2, January 3, Numerator for basic EPS: Net income (loss) $ (7,594 ) $ 55,458 $ 36,267 Denominator for basic EPS: Weighted average shares outstanding 26,363 24,825 23,991 Effect of dilutive securities: Stock options, restricted stock and restricted stock units — 1,150 1,332 Denominator for diluted EPS 26,363 25,975 25,323 Basic EPS $ (0.29 ) $ 2.23 $ 1.51 Diluted EPS $ (0.29 ) $ 2.14 $ 1.43 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The diluted weighted average share calculations do not include the following securities, which are not dilutive to the EPS calculations or the performance criteria have not been met: Year Ended January 1, January 2, January 3, Time-vested stock options, restricted stock and restricted stock units 1,718,135 175,549 18,480 Performance-vested stock options and restricted stock units 577,825 — — |
Accumulated Other Comprehensi44
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended | |
Jan. 01, 2016 | Jan. 02, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Schedule of Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income is comprised of the following (in thousands): Defined Benefit Plan Liability Cash Flow Hedges Foreign Currency Translation Adjustment Total Pre-Tax Amount Tax Net-of-Tax Amount At January 2, 2015 $ (1,181 ) $ (2,558 ) $ 11,450 $ 7,711 $ 1,412 $ 9,123 Unrealized loss on cash flow hedges — (4,413 ) — (4,413 ) 1,545 (2,868 ) Realized loss on foreign currency hedges — 1,948 — 1,948 (682 ) 1,266 Realized loss on interest rate swap hedges — 2,631 — 2,631 (921 ) 1,710 Net defined benefit plan liability adjustments 2 — — 2 (22 ) (20 ) Foreign currency translation loss — — (7,841 ) (7,841 ) — (7,841 ) At January 1, 2016 $ (1,179 ) $ (2,392 ) $ 3,609 $ 38 $ 1,332 $ 1,370 | Defined Benefit Plan Liability Cash Flow Hedges Foreign Currency Translation Adjustment Total Pre-Tax Amount Tax Net-of-Tax Amount At January 3, 2014 $ (672 ) $ (468 ) $ 14,952 $ 13,812 $ 546 $ 14,358 Unrealized loss on cash flow hedges — (2,372 ) — (2,372 ) 829 (1,543 ) Realized gain on foreign currency hedges — (168 ) — (168 ) 59 (109 ) Realized loss on interest rate swap hedges — 450 — 450 (157 ) 293 Net defined benefit plan liability adjustments (509 ) — — (509 ) 135 (374 ) Foreign currency translation loss — — (3,502 ) (3,502 ) — (3,502 ) At January 2, 2015 $ (1,181 ) $ (2,558 ) $ 11,450 $ 7,711 $ 1,412 $ 9,123 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Jan. 01, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables provide information regarding assets and liabilities recorded at fair value on a recurring basis (in thousands): Fair Value Measurements Using Description At January 1, 2016 Quoted Prices in Active Markets for Identical (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities Foreign currency contracts (Note 15) $ 307 $ — $ 307 $ — Fair Value Measurements Using Description At January 2, Quoted Significant Significant Liabilities Foreign currency contracts $ 1,568 $ — $ 1,568 $ — Interest rate swaps 990 — 990 — |
Fair Value Measurements, Nonrecurring | The following table provides information regarding assets and liabilities recorded at fair value on a nonrecurring basis as of January 1, 2016 and January 2, 2015 respectively (in thousands): Fair Value Measurements Using Description At January 1, 2016 Quoted Significant Significant Assets Cost method investment $ 1,100 $ — $ 1,100 $ — Fair Value Measurements Using Description At January 2, 2015 Quoted Significant Significant Assets Assets Held for Sale $ 1,635 $ — $ 1,635 $ — |
Business Segment, Geographic 46
Business Segment, Geographic and Concentration Risk Information (Tables) | 12 Months Ended |
Jan. 01, 2016 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenues by Product Lines | Sales by geographic area are presented by allocating sales from external customers based on where the products are shipped (in thousands): Year Ended January 1, January 2, January 3, Product line sales: Advanced Surgical, Orthopaedics, and Portable Medical $ 243,385 $ 216,339 $ 208,990 Cardio and Vascular 143,260 58,770 48,357 Cardiac/Neuromodulation 356,064 330,921 328,455 Electrochem 59,449 81,757 78,143 Elimination of interproduct line sales (1,744 ) — — Total sales $ 800,414 $ 687,787 $ 663,945 |
Reconciliation of Revenue from Segments to Consolidated | Year Ended January 1, January 2, January 3, Business segment sales: Greatbatch Medical $ 649,977 $ 678,285 $ 660,902 QiG 13,571 9,502 3,043 Lake Region Medical 139,819 — — Elimination of intersegment sales (2,953 ) — — Total sales $ 800,414 $ 687,787 $ 663,945 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | Year Ended January 1, January 2, January 3, Segment income (loss) from operations: Greatbatch Medical $ 109,737 $ 126,312 $ 111,805 QiG (25,855 ) (23,256 ) (30,484 ) Lake Region Medical (16,416 ) — — Total segment income from operations 67,466 103,056 81,321 Unallocated operating expenses (54,320 ) (27,402 ) (19,982 ) Operating income 13,146 75,654 61,339 Unallocated other income (expense), net (28,846 ) 925 (12,501 ) Income (loss) before provision for income taxes $ (15,700 ) $ 76,579 $ 48,838 |
Reconciliation Of Depreciation And Amortization By Reportable Segment To Consolidated | Year Ended January 1, January 2, January 3, Depreciation and amortization: Greatbatch Medical $ 30,160 $ 31,906 $ 31,112 QiG 1,862 2,101 1,539 Lake Region Medical 32,249 — — Total depreciation and amortization included in segment income from operations 64,271 34,007 32,651 Unallocated depreciation and amortization 3,347 3,450 3,315 Total depreciation and amortization $ 67,618 $ 37,457 $ 35,966 |
Schedule Of Expenditures For Tangible Long-Lived Assets By Segment | Year Ended January 1, January 2, January 3, Expenditures for tangible long-lived assets, excluding acquisitions: Greatbatch Medical $ 32,921 $ 19,006 $ 13,242 QiG 1,160 1,453 2,134 Lake Region Medical 7,525 — — Total reportable segments 41,606 20,459 15,376 Unallocated long-lived tangible assets 6,448 5,187 2,798 Total expenditures $ 48,054 $ 25,646 $ 18,174 |
Reconciliation of Assets from Segment to Consolidated | At January 1, January 2, January 3, Identifiable assets: Greatbatch Medical $ 798,609 $ 761,225 $ 758,369 QiG 68,637 76,529 56,245 Lake Region Medical 1,971,071 — — Total reportable segments 2,838,317 837,754 814,614 Unallocated assets 143,819 117,368 75,015 Total assets $ 2,982,136 $ 955,122 $ 889,629 |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | Year Ended January 1, January 2, January 3, Sales by geographic area: United States $ 401,380 $ 312,539 $ 325,090 Non-Domestic locations: Puerto Rico 136,898 127,702 117,961 Belgium 62,546 65,308 67,155 Rest of world 199,590 182,238 153,739 Total sales $ 800,414 $ 687,787 $ 663,945 At January 1, January 2, January 3, Long-lived tangible assets: United States $ 264,556 $ 113,851 $ 116,484 Rest of world 114,936 31,074 29,289 Total $ 379,492 $ 144,925 $ 145,773 |
Schedule of Revenue by Major Customers by Reporting Segments | A significant portion of the Company’s sales and accounts receivable were to four customers as follows: Sales Accounts Receivable Year Ended At January 1, January 2, January 3, January 1, January 2, Customer A 18 % 18 % 16 % 23 % 23 % Customer B 17 % 18 % 20 % 8 % 4 % Customer C 12 % 12 % 13 % 6 % 8 % Customer D 5 % 6 % 7 % 7 % 12 % 52 % 54 % 56 % 44 % 47 % |
Quarterly Sales and Earnings 47
Quarterly Sales and Earnings Data - Unaudited (Tables) | 12 Months Ended |
Jan. 01, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. (in thousands, except per share data) 2015 Sales $ 317,567 $ 146,637 $ 174,890 $ 161,320 Gross profit 73,140 51,646 57,951 52,398 Net income (loss) (24,907 ) 22 9,283 8,008 EPS—basic (0.85 ) — 0.36 0.32 EPS—diluted (0.85 ) — 0.35 0.31 2014 Sales $ 169,726 $ 171,699 $ 172,081 $ 174,281 Gross profit 57,214 58,118 58,470 57,596 Net income 14,176 14,012 12,348 14,922 EPS—basic 0.57 0.56 0.50 0.61 EPS—diluted 0.54 0.54 0.48 0.58 |
Summary of Significant Accoun48
Summary of Significant Accounting Policies (Basis of Presentation) (Details) $ in Millions | Oct. 27, 2015USD ($) | Jan. 01, 2016USD ($)customerSegment | Jan. 02, 2015USD ($) | Jan. 03, 2014USD ($) |
Accounting Policies [Abstract] | ||||
Number of Reportable Segments | Segment | 3 | |||
Business Acquisition [Line Items] | ||||
Weeks In Reporting Period | Fifty-two | Fifty-two | Fifty-three | |
Number of Customers | customer | 4 | |||
Schedule of Assets Useful Life [Line Items] | ||||
Customer Supplied Components Excluded From Revenue | $ 44.3 | $ 48.1 | $ 45.3 | |
Foreign Currency Transaction Gain (Loss), Realized | $ 1.3 | $ 1.3 | $ (0.1) | |
Minimum [Member] | Patents [Member] | ||||
Schedule of Assets Useful Life [Line Items] | ||||
Intangible Asset, Useful Life | 5 years | |||
Minimum [Member] | Customer Lists [Member] | ||||
Schedule of Assets Useful Life [Line Items] | ||||
Intangible Asset, Useful Life | 7 years | |||
Minimum [Member] | Other Intangible Assets [Member] | ||||
Schedule of Assets Useful Life [Line Items] | ||||
Intangible Asset, Useful Life | 1 year | |||
Maximum [Member] | Patents [Member] | ||||
Schedule of Assets Useful Life [Line Items] | ||||
Intangible Asset, Useful Life | 15 years | |||
Maximum [Member] | Customer Lists [Member] | ||||
Schedule of Assets Useful Life [Line Items] | ||||
Intangible Asset, Useful Life | 20 years | |||
Maximum [Member] | Other Intangible Assets [Member] | ||||
Schedule of Assets Useful Life [Line Items] | ||||
Intangible Asset, Useful Life | 10 years | |||
Office Equipment [Member] | Minimum [Member] | ||||
Schedule of Assets Useful Life [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 3 years | |||
Office Equipment [Member] | Maximum [Member] | ||||
Schedule of Assets Useful Life [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 10 years | |||
Machinery and Equipment [Member] | Minimum [Member] | ||||
Schedule of Assets Useful Life [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 3 years | |||
Machinery and Equipment [Member] | Maximum [Member] | ||||
Schedule of Assets Useful Life [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 10 years | |||
Building and Building Improvements [Member] | Minimum [Member] | ||||
Schedule of Assets Useful Life [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 7 years | |||
Building and Building Improvements [Member] | Maximum [Member] | ||||
Schedule of Assets Useful Life [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 40 years | |||
Lake Region Medical [Member] | ||||
Business Acquisition [Line Items] | ||||
Total purchase consideration | $ 1,770 | |||
Schedule of Assets Useful Life [Line Items] | ||||
Intangible Asset, Useful Life | 27 years | |||
Lake Region Medical [Member] | Customer Lists [Member] | ||||
Schedule of Assets Useful Life [Line Items] | ||||
Intangible Asset, Useful Life | 29 years |
Summary of Significant Accoun49
Summary of Significant Accounting Policies (Debt Issuance Costs and Discounts) (Details) - USD ($) $ in Thousands | Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 |
Other Assets [Member] | Revolving Credit Facility [Member] | |||
New Accounting Pronouncement, Early Adoption [Line Items] | |||
Deferred debt issuance costs | $ 4,800 | $ 2,200 | |
New Accounting Pronouncement, Early Adoption, Effect [Member] | Other Assets [Member] | |||
New Accounting Pronouncement, Early Adoption [Line Items] | |||
Deferred debt issuance costs | 35,900 | 900 | |
Term Loan And Senior Notes [Member] | |||
New Accounting Pronouncement, Early Adoption [Line Items] | |||
Deferred debt issuance costs | 35,908 | 887 | $ 1,074 |
Term Loan And Senior Notes [Member] | New Accounting Pronouncement, Early Adoption, Effect [Member] | Long-term Debt [Member] | |||
New Accounting Pronouncement, Early Adoption [Line Items] | |||
Deferred debt issuance costs | $ 35,900 | $ 900 |
Acquisitions (Lake Region Medic
Acquisitions (Lake Region Medical - Narrative) (Details) - Lake Region Medical [Member] - USD ($) $ in Millions | Oct. 27, 2015 | Jan. 01, 2016 | Jan. 01, 2016 |
Business Acquisition [Line Items] | |||
Effective date of acquisition | Oct. 27, 2015 | ||
Name of acquired entity | Lake Region Medical Holdings, Inc. | ||
Total purchase consideration | $ 1,770 | ||
Description of acquired entity | Lake Region Medical specializes in the design, development, and manufacturing of products across the medical component and device spectrum primarily serving the cardio, vascular and advanced surgical markets. | ||
Repayments of Debt | $ 1,000 | ||
Reason for acquisition | The Company believes that the combination of Greatbatch and Lake Region Medical brings together two highly complementary organizations that can provide a new level of industry leading capabilities and services to original equipment manufacturer customers while building value for shareholders. | ||
Total revenue included from the acquired entity | $ 138.6 | $ 138.6 | |
Total net loss included from the acquired entity | $ 17.4 | ||
Increase in inventory | $ 23 | ||
Customer Lists [Member] | |||
Business Acquisition [Line Items] | |||
Customer annual attrition rate | 5.00% | ||
Minimum [Member] | Trademarks and Trade Names [Member] | |||
Business Acquisition [Line Items] | |||
Royalty rate | 0.25% | ||
Minimum [Member] | Technology [Member] | |||
Business Acquisition [Line Items] | |||
Royalty rate | 0.50% | ||
Maximum [Member] | Trademarks and Trade Names [Member] | |||
Business Acquisition [Line Items] | |||
Royalty rate | 1.00% | ||
Maximum [Member] | Technology [Member] | |||
Business Acquisition [Line Items] | |||
Royalty rate | 7.00% |
Acquisitions (Lake Region Med51
Acquisitions (Lake Region Medical - Summary of Purchase Price Allocation) (Details) - Lake Region Medical [Member] $ in Thousands | Oct. 27, 2015USD ($) |
Business Acquisition [Line Items] | |
Cash consideration paid to Lake Region Medical stockholders and equity award holders | $ 478,490 |
Total purchase consideration | 728,366 |
Common Stock [Member] | |
Business Acquisition [Line Items] | |
Fair value of common stock and replacement stock options | 245,368 |
Stock Options [Member] | |
Business Acquisition [Line Items] | |
Fair value of common stock and replacement stock options | $ 4,508 |
Acquisitions (Lake Region Med52
Acquisitions (Lake Region Medical - Summary of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands | Jan. 01, 2016 | Oct. 27, 2015 | Jan. 02, 2015 |
Assets acquired | |||
Goodwill | $ 1,013,570 | $ 354,393 | |
Lake Region Medical [Member] | |||
Assets acquired | |||
Current assets | $ 269,815 | ||
Property, plant and equipment | 216,473 | ||
Amortizing intangible assets | 849,000 | ||
Indefinite-lived intangible assets | 70,000 | ||
Goodwill | 661,788 | ||
Other non-current assets | 1,629 | ||
Total assets acquired | 2,068,705 | ||
Liabilities assumed | |||
Current liabilities | 102,485 | ||
Debt assumed | 1,044,675 | ||
Other long-term liabilities | 193,179 | ||
Total liabilities assumed | 1,340,339 | ||
Net assets acquired | $ 728,366 |
Acquisitions (Lake Region Med53
Acquisitions (Lake Region Medical - Summary of Intangible Assets) (Details) - USD ($) $ in Thousands | Oct. 27, 2015 | Jan. 01, 2016 |
Trademarks and Trade Names [Member] | ||
Business Acquisition [Line Items] | ||
Indefinite-lived intangible assets acquired | $ 70,000 | |
Lake Region Medical [Member] | ||
Business Acquisition [Line Items] | ||
Amortizing Intangible Assets Fair Value Assigned | $ 849,000 | |
Amortizing Intangible Assets Weighted Average Amortization Period | 13 years | |
Amortizing Intangible Assets Estimated Useful Life | 27 years | |
Amortizing Intangible Assets Weighted Average Discount Rate | 11.50% | |
Lake Region Medical [Member] | Trademarks and Trade Names [Member] | ||
Business Acquisition [Line Items] | ||
Indefinite-lived intangible assets acquired | $ 70,000 | |
Indefinite-lived Intangible Assets Weighted Average Discount Rate | 11.50% | |
Lake Region Medical [Member] | Technology [Member] | ||
Business Acquisition [Line Items] | ||
Amortizing Intangible Assets Fair Value Assigned | $ 160,000 | |
Amortizing Intangible Assets Weighted Average Amortization Period | 7 years | |
Amortizing Intangible Assets Estimated Useful Life | 19 years | |
Amortizing Intangible Assets Weighted Average Discount Rate | 11.50% | |
Lake Region Medical [Member] | Customer Lists [Member] | ||
Business Acquisition [Line Items] | ||
Amortizing Intangible Assets Fair Value Assigned | $ 689,000 | |
Amortizing Intangible Assets Weighted Average Amortization Period | 14 years | |
Amortizing Intangible Assets Estimated Useful Life | 29 years | |
Amortizing Intangible Assets Weighted Average Discount Rate | 11.50% |
Acquisitions (CCC - Narrative)
Acquisitions (CCC - Narrative) (Details) - USD ($) $ in Thousands | Oct. 27, 2015 | Aug. 12, 2014 | Jan. 01, 2016 | Jan. 01, 2016 | Jan. 02, 2015 |
Lake Region Medical [Member] | |||||
Business Acquisition [Line Items] | |||||
Effective date of acquisition | Oct. 27, 2015 | ||||
Name of acquired entity | Lake Region Medical Holdings, Inc. | ||||
Description of acquired entity | Lake Region Medical specializes in the design, development, and manufacturing of products across the medical component and device spectrum primarily serving the cardio, vascular and advanced surgical markets. | ||||
Reason for acquisition | The Company believes that the combination of Greatbatch and Lake Region Medical brings together two highly complementary organizations that can provide a new level of industry leading capabilities and services to original equipment manufacturer customers while building value for shareholders. | ||||
Total revenue included from the acquired entity | $ 138,600 | $ 138,600 | |||
Total net income included from the acquired entity | $ (17,400) | ||||
Cash consideration paid to Lake Region Medical stockholders and equity award holders | $ 478,490 | ||||
Increase in inventory | $ 23,000 | ||||
Lake Region Medical [Member] | Customer Lists [Member] | |||||
Business Acquisition [Line Items] | |||||
Customer annual attrition rate | 5.00% | ||||
Centro De Construccion De Cardioestimuladores Del Uruguay [Member] | |||||
Business Acquisition [Line Items] | |||||
Effective date of acquisition | Aug. 12, 2014 | ||||
Name of acquired entity | Centro de Construcción de Cardioestimuladores del Uruguay | ||||
Description of acquired entity | CCC is an active implantable neuromodulation medical device systems developer and manufacturer that produces a range of medical devices including implantable pulse generators, programmer systems, battery chargers, patient wands and leads. | ||||
Reason for acquisition | This acquisition allows the Company to more broadly partner with medical device companies, complements the Company’s core discrete technology offerings and enhances the Company’s medical device innovation efforts. | ||||
Total revenue included from the acquired entity | $ 5,800 | ||||
Total net income included from the acquired entity | $ 1,200 | ||||
Cash consideration paid to Lake Region Medical stockholders and equity award holders | $ 19,800 | ||||
Increase in inventory | $ 300 | ||||
Centro De Construccion De Cardioestimuladores Del Uruguay [Member] | Technology-Based Intangible Assets [Member] | |||||
Business Acquisition [Line Items] | |||||
Royalty rate | 3.00% | ||||
Centro De Construccion De Cardioestimuladores Del Uruguay [Member] | Customer Lists [Member] | |||||
Business Acquisition [Line Items] | |||||
Customer annual attrition rate | 15.00% | ||||
Centro De Construccion De Cardioestimuladores Del Uruguay [Member] | Trademarks and Trade Names [Member] | |||||
Business Acquisition [Line Items] | |||||
Royalty rate | 0.50% |
Acquisitions (CCC - Summary of
Acquisitions (CCC - Summary of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands | Jan. 01, 2016 | Jan. 02, 2015 | Aug. 12, 2014 |
Assets acquired | |||
Goodwill | $ 1,013,570 | $ 354,393 | |
Centro De Construccion De Cardioestimuladores Del Uruguay [Member] | |||
Assets acquired | |||
Current assets | $ 10,670 | ||
Property, plant and equipment | 1,131 | ||
Amortizing intangible assets | 6,100 | ||
Goodwill | 8,296 | ||
Total assets acquired | 26,197 | ||
Liabilities assumed | |||
Current liabilities | 4,842 | ||
Deferred income taxes | 1,590 | ||
Total liabilities assumed | 6,432 | ||
Net assets acquired | $ 19,765 |
Acquisitions (CCC - Summary o56
Acquisitions (CCC - Summary of Intangible Assets) (Details) - Centro De Construccion De Cardioestimuladores Del Uruguay [Member] $ in Thousands | Aug. 12, 2014USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amortizing intangible assets | $ 6,100 |
Weighted Average Amortization Period (Years) | 10 years |
Weighted Average Discount Rate | 18.00% |
Patented Technology [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amortizing intangible assets | $ 1,400 |
Weighted Average Amortization Period (Years) | 10 years |
Weighted Average Discount Rate | 18.00% |
Customer Lists [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amortizing intangible assets | $ 4,600 |
Weighted Average Amortization Period (Years) | 10 years |
Weighted Average Discount Rate | 18.00% |
Trademarks and Trade Names [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amortizing intangible assets | $ 100 |
Weighted Average Amortization Period (Years) | 2 years |
Weighted Average Discount Rate | 18.00% |
Acquisitions (Pro Forma Informa
Acquisitions (Pro Forma Information) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Business Acquisition, Pro Forma Information [Abstract] | |||
Sales | $ 1,445,689 | $ 1,441,782 | $ 677,657 |
Net income (loss) | $ 2,405 | $ (25,865) | $ 37,612 |
Basic earnings per share (in dollars per share) | $ 0.08 | $ (0.87) | $ 1.57 |
Diluted earnings per share (in dollars per share) | $ 0.08 | $ (0.87) | $ 1.49 |
Lake Region Medical [Member] | |||
Business Acquisition [Line Items] | |||
Acquisition-related costs excluded from earnings | $ 32,300 | ||
Debt related costs excluded from earnings | 9,500 | ||
Nonrecurring amortization expense excluded from earnings | $ 23,000 |
Supplemental Cash Flow Inform58
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Noncash investing and financing activities: | |||
Common stock contributed to 401(k) Plan | $ 3,920 | $ 4,341 | $ 2,477 |
Property, plant and equipment purchases included in accounts payable | 7,401 | 2,926 | 2,103 |
Common stock issued in connection with Lake Region Medical acquisition | 245,368 | 0 | 0 |
Replacement stock options issued in connection with Lake Region Medical acquisition | 4,508 | 0 | 0 |
Purchase of non-controlling interests in subsidiaries included in accrued expenses | 6,818 | 0 | 0 |
Cash paid during the year for: | |||
Interest | 13,057 | 3,521 | 4,989 |
Income taxes | 6,312 | 13,565 | 44,165 |
Acquisition of noncash assets | 2,013,604 | 22,434 | 0 |
Liabilities assumed | $ 1,340,339 | $ 6,432 | $ 0 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jan. 01, 2016 | Jan. 02, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 107,296 | $ 73,354 |
Work-in-process | 93,729 | 38,930 |
Finished goods | 51,141 | 16,958 |
Inventories | $ 252,166 | $ 129,242 |
Assets Held For Sale (Details)
Assets Held For Sale (Details) - USD ($) $ in Thousands | Jan. 01, 2016 | Jan. 02, 2015 |
Building [Member] | Swiss Orthopaedic Product Line [Member] | Greatbatch Medical [Member] | ||
Assets Held For Sale Detail [Line Items] | ||
Current assets held-for-sale | $ 996 | $ 1,635 |
Assets Held For Sale (Narrative
Assets Held For Sale (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Assets Held For Sale Detail [Line Items] | |||
Held for sale asset impairment | $ 0 | $ 0.4 | $ 0.9 |
Orthopaedic Facility Optimization [Member] | |||
Assets Held For Sale Detail [Line Items] | |||
Assets held for sale | 2.1 | ||
Held for sale asset impairment | $ 0.4 | ||
Orthopaedic Facility Optimization [Member] | |||
Assets Held For Sale Detail [Line Items] | |||
Proceeds from assets held for sale | 0.6 | ||
Gain (loss) on assets held for sale | $ 0 |
Property, Plant and Equipment62
Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 |
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | $ 611,648 | $ 358,945 | |
Accumulated depreciation | (232,156) | (214,020) | |
Total | 379,492 | 144,925 | $ 145,773 |
Machinery and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 285,068 | 167,173 | |
Building and Building Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 130,184 | 89,258 | |
Computer Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 43,947 | 31,725 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 36,745 | 31,170 | |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 16,243 | 14,045 | |
Land and Land Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 21,774 | 10,816 | |
Construction in Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 76,835 | 14,129 | |
Other Capitalized Property Plant and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | $ 852 | $ 629 |
Property, Plant and Equipment63
Property, Plant and Equipment, Net (Depreciation Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 27,136 | $ 23,320 | $ 22,799 |
Intangible Assets (Narrative) (
Intangible Assets (Narrative) (Details) $ in Thousands | Jan. 01, 2016USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Accumulated impairment loss | $ 0 |
Intangible Assets (Amortizing I
Intangible Assets (Amortizing Intangible Assets) (Details) - USD ($) | Jan. 01, 2016 | Jan. 02, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,022,167,000 | $ 173,167,000 |
Accumulated Amortization | (129,469,000) | (111,973,000) |
Foreign Currency Translation | 1,279,000 | 4,143,000 |
Net Carrying Amount | 893,977,000 | 65,337,000 |
Purchased Technology And Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 255,776,000 | 95,776,000 |
Accumulated Amortization | (83,708,000) | (75,894,000) |
Foreign Currency Translation | 1,444,000 | 1,966,000 |
Net Carrying Amount | 173,512,000 | 21,848,000 |
Customer Lists [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 761,857,000 | 72,857,000 |
Accumulated Amortization | (40,815,000) | (31,460,000) |
Foreign Currency Translation | (986,000) | 1,374,000 |
Net Carrying Amount | 720,056,000 | 42,771,000 |
Other Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 4,534,000 | 4,534,000 |
Accumulated Amortization | (4,946,000) | (4,619,000) |
Foreign Currency Translation | 821,000 | 803,000 |
Net Carrying Amount | $ 409,000 | $ 718,000 |
Intangible Assets (Amortization
Intangible Assets (Amortization Expense by categories) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of Intangible Assets | $ 17,496 | $ 13,877 | $ 13,167 |
Cost of Sales [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of Intangible Assets | 7,403 | 6,201 | 6,822 |
Selling, General and Administrative Expenses [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of Intangible Assets | 9,681 | 7,009 | 5,800 |
Research and Development Expense [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of Intangible Assets | $ 412 | $ 667 | $ 545 |
Intangible Assets (Future Amort
Intangible Assets (Future Amortization Expense) (Details) - USD ($) $ in Thousands | Jan. 01, 2016 | Jan. 02, 2015 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,016 | $ 37,854 | |
2,017 | 43,991 | |
2,018 | 44,894 | |
2,019 | 44,960 | |
2,020 | 45,467 | |
Thereafter | 676,811 | |
Net Carrying Amount | $ 893,977 | $ 65,337 |
Intangible Assets (Change in In
Intangible Assets (Change in Indefinite-lived Assets and Goodwill) (Details) $ in Thousands | 12 Months Ended |
Jan. 01, 2016USD ($) | |
Indefinite-lived Intangible Assets [Roll Forward] | |
Indefinite-lived intangible assets, beginning | $ 20,288 |
Indefinite-lived intangible assets, ending | 90,288 |
Goodwill [Roll Forward] | |
Goodwill, beginning | 354,393 |
Goodwill acquired | 661,788 |
Foreign currency translation | (2,611) |
Goodwill, ending | 1,013,570 |
Greatbatch Medical [Member] | |
Goodwill [Roll Forward] | |
Goodwill, beginning | 304,297 |
Goodwill acquired | 0 |
Foreign currency translation | (368) |
Goodwill, ending | 303,929 |
QiG [Member] | |
Goodwill [Roll Forward] | |
Goodwill, beginning | 50,096 |
Goodwill acquired | 0 |
Foreign currency translation | 0 |
Goodwill, ending | 50,096 |
Lake Region Medical [Member] | |
Goodwill [Roll Forward] | |
Goodwill, beginning | 0 |
Goodwill acquired | 661,788 |
Foreign currency translation | (2,243) |
Goodwill, ending | 659,545 |
Trademarks and Trade Names [Member] | |
Indefinite-lived Intangible Assets [Roll Forward] | |
Indefinite-lived intangible assets, beginning | 20,288 |
Indefinite-lived intangible assets acquired | 70,000 |
Indefinite-lived intangible assets, ending | $ 90,288 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Jan. 01, 2016 | Jan. 02, 2015 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Salaries and benefits | $ 37,579 | $ 20,770 |
Profit sharing and bonuses | 6,781 | 18,524 |
Accrued interest | 9,378 | 195 |
Purchase of non-controlling interest in subsidiaries | 6,818 | 0 |
Severance and change in control payments | 11,969 | 1,878 |
Warranty and customer rebates | 7,205 | 660 |
Other | 17,527 | 6,357 |
Total | $ 97,257 | $ 48,384 |
Debt (Schedule of Long-Term Deb
Debt (Schedule of Long-Term Debt) (Details) - USD ($) $ in Thousands | Feb. 20, 2013 | Mar. 31, 2007 | Jan. 01, 2016 | Oct. 27, 2015 | Jan. 02, 2015 |
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 1,760,000 | ||||
Less unamortized discount on term loan B and debt issuance costs | (45,947) | $ (887) | |||
Long-term Debt | 1,714,053 | 186,613 | |||
Current portion of long-term debt | 29,000 | 11,250 | |||
Long-term debt | 1,685,053 | 175,363 | |||
Convertible Subordinated Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Redemption date | Feb. 20, 2013 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 2.25% | ||||
Interest rate during period | 8.50% | ||||
Loans Payable [Member] | Variable Rate Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | 0 | 187,500 | |||
Senior Notes [Member] | 9.125% Senior Notes due 2023 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 9.125% | ||||
Long-term debt, gross | 360,000 | 0 | |||
Secured Debt [Member] | Loans Payable [Member] | Term Loan A (TLA) Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | 375,000 | 0 | |||
Secured Debt [Member] | Loans Payable [Member] | Term Loan B (TLB) Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | 1,025,000 | 0 | |||
Secured Debt [Member] | Revolving Credit Facility [Member] | New Revolving Credit Facility 2015 [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 0 | $ 0 |
Debt (Senior Secured Credit Fac
Debt (Senior Secured Credit Facilities) (Details) - Secured Debt [Member] | Oct. 27, 2015USD ($)loan_facility | Apr. 27, 2016USD ($) | Jan. 01, 2016USD ($) |
Senior Secured Credit Facilities [Member] | |||
Debt Instrument [Line Items] | |||
Collateral, Percentage of present and future voting capital shares of first tier foreign subsidiaries | 66.00% | ||
Senior Secured Credit Facilities [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
First lien net leverage ratio | 4.25 | ||
Loans Payable [Member] | |||
Debt Instrument [Line Items] | |||
Number of additional term loan facilities that may be added (one or more) | loan_facility | 1 | ||
Loans Payable [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
First lien net leverage ratio | 4.25 | ||
Loans Payable [Member] | Term Loan A (TLA) Facility [Member] | |||
Debt Instrument [Line Items] | |||
Principle amount | $ 375,000,000 | ||
Debt maturity date | Oct. 27, 2021 | ||
Maximum leverage ratio | 6.50 | ||
Adjusted EBITDA to interest expense ratio | 3 | ||
Loans Payable [Member] | Term Loan A (TLA) Facility [Member] | Prime Rate [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Spread on variable rate | 0.75% | ||
Loans Payable [Member] | Term Loan A (TLA) Facility [Member] | Prime Rate [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Spread on variable rate | 2.25% | ||
Loans Payable [Member] | Term Loan A (TLA) Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Spread on variable rate | 1.75% | ||
Loans Payable [Member] | Term Loan A (TLA) Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Spread on variable rate | 3.25% | ||
Loans Payable [Member] | Term Loan B (TLB) Facility [Member] | |||
Debt Instrument [Line Items] | |||
Principle amount | $ 1,025,000,000 | ||
Discount percent | 1.00% | ||
Debt maturity date | Oct. 27, 2022 | ||
Debt fair value | $ 1,013,000,000 | ||
Loans Payable [Member] | Term Loan B (TLB) Facility [Member] | Prime Rate [Member] | |||
Debt Instrument [Line Items] | |||
Spread on variable rate | 3.25% | ||
Loans Payable [Member] | Term Loan B (TLB) Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Debt Instrument [Line Items] | |||
Spread on variable rate | 4.25% | ||
Interest rate floor | 1.00% | ||
Swingline Loans [Member] | New Revolving Credit Facility 2015 [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 15,000,000 | ||
Standby Letters of Credit [Member] | New Revolving Credit Facility 2015 [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 30,000,000 | ||
Standby Letters of Credit [Member] | New Revolving Credit Facility 2015 [Member] | Scenario, Forecast [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 25,000,000 | ||
Revolving Credit Facility [Member] | New Revolving Credit Facility 2015 [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 200,000,000 | ||
Debt maturity date | Oct. 27, 2020 | ||
Amount outstanding | 0 | ||
Remaining borrowing capacity | 186,600,000 | ||
Outstanding standby letters of credit | $ 13,400,000 | ||
Revolving Credit Facility [Member] | New Revolving Credit Facility 2015 [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Unused capacity commitment fee | 0.175% | ||
Revolving Credit Facility [Member] | New Revolving Credit Facility 2015 [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Unused capacity commitment fee | 0.25% |
Debt (Senior Notes) (Details)
Debt (Senior Notes) (Details) - USD ($) | Oct. 27, 2015 | Jan. 01, 2016 |
Debt Instrument [Line Items] | ||
Weighted average interest rate | 5.69% | |
Senior Notes [Member] | 9.125% Senior Notes due 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Principle amount | $ 360,000,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 9.125% | |
Debt maturity date | Nov. 1, 2023 | |
Debt fair value | $ 354,600,000 | |
Senior Notes [Member] | 9.125% Senior Notes due 2023 [Member] | Debt Instrument, Redemption, Period One [Member] | ||
Debt Instrument [Line Items] | ||
Debt redemption price prior to make-whole premium | 100.00% | |
Debt redemption percentage of principle amount redeemed if using proceeds from certain equity offerings | 40.00% | |
Debt redemption price if using proceeds from certain equity offerings | 109.125% |
Debt (Long-term Debt Maturity S
Debt (Long-term Debt Maturity Schedule) (Details) $ in Thousands | Jan. 01, 2016USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2,016 | $ 29,000 |
2,017 | 31,344 |
2,018 | 40,719 |
2,019 | 47,750 |
2,020 | 47,750 |
Thereafter | 1,563,437 |
Long-term Debt | $ 1,760,000 |
Debt (Interest Rate Swaps) (Det
Debt (Interest Rate Swaps) (Details) - USD ($) | 12 Months Ended | |||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | Dec. 28, 2012 | |
Derivative [Line Items] | ||||
Additional interest expense incurred for termination of interest rate swap agreements | $ 2,800,000 | |||
Payment for termination of interest rate swap agreements | 2,800,000 | |||
Interest expense | 33,513,000 | $ 4,252,000 | $ 11,261,000 | |
Interest Rate Swap [Member] | ||||
Derivative [Line Items] | ||||
Portion of the change in fair value considered ineffective | 0 | 0 | 0 | |
Interest expense | $ 3,500,000 | 500,000 | $ 500,000 | |
Interest Rate Swap 1 [Member] | ||||
Derivative [Line Items] | ||||
Interest Rate Swap Term | 3 years | |||
Notional Amount | $ 150,000,000 | |||
Annual notional amortizing amount | $ 50,000,000 | |||
Interest Rate Swap 2a [Member] | ||||
Derivative [Line Items] | ||||
Notional Amount | $ 45,000,000 | |||
Derivative, Inception Date | Feb. 20, 2015 | |||
Interest Rate Swap 2b [Member] | ||||
Derivative [Line Items] | ||||
Notional Amount | $ 45,000,000 | |||
Derivative, Inception Date | Feb. 22, 2016 |
Debt (Convertible Subordinated
Debt (Convertible Subordinated Notes) (Details) - USD ($) $ in Thousands | Feb. 20, 2013 | Mar. 31, 2007 | Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 |
Debt Instrument [Line Items] | |||||
Convertible subordinated debt | $ 197,800 | ||||
Convertible Subordinated Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Discount percentage | 5.00% | ||||
Debt Instrument, Interest Rate, Stated Percentage | 2.25% | ||||
Interest rate during period | 8.50% | ||||
Redemption date | Feb. 20, 2013 | ||||
Interest Expense, Debt, Excluding Amortization | $ 0 | $ 0 | $ 634 | ||
Amortization of Debt Discount (Premium) | $ 0 | $ 0 | $ 5,368 |
Debt (Contractual Interest and
Debt (Contractual Interest and Discount Amortization) (Details) - Convertible Subordinated Debt [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Debt Instrument [Line Items] | |||
Contractual interest | $ 0 | $ 0 | $ 634 |
Discount amortization | $ 0 | $ 0 | $ 5,368 |
Debt (Debt Issuance Costs and D
Debt (Debt Issuance Costs and Discounts) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Debt Instrument [Line Items] | |||
Payment of debt issuance costs | $ 45,933 | $ 0 | $ 2,802 |
Interest Expense [Member] | |||
Debt Instrument [Line Items] | |||
Write-off of debt issuance costs | 1,600 | ||
New Accounting Pronouncement, Early Adoption, Effect [Member] | Other Assets [Member] | |||
Debt Instrument [Line Items] | |||
Debt issuance costs | 35,900 | 900 | |
Term Loan And Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt issuance costs | 35,908 | 887 | 1,074 |
Write-off of debt issuance costs | 732 | ||
Term Loan And Senior Notes [Member] | New Accounting Pronouncement, Early Adoption, Effect [Member] | Long-term Debt [Member] | |||
Debt Instrument [Line Items] | |||
Debt issuance costs | 35,900 | 900 | |
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Debt issuance costs | 4,791 | 2,200 | $ 2,786 |
Write-off of debt issuance costs | 907 | ||
Revolving Credit Facility [Member] | Other Assets [Member] | |||
Debt Instrument [Line Items] | |||
Debt issuance costs | $ 4,800 | $ 2,200 |
Debt (Deferred Financing Fees)
Debt (Deferred Financing Fees) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Deferred Finance Costs [Roll Forward] | |||
Total, Beginning Balance | $ 887 | ||
Total, Amortization during the period | 11,320 | $ 773 | $ 6,366 |
Total, Ending Balance | 45,947 | 887 | |
Revolving Credit Facility [Member] | |||
Deferred Finance Costs [Roll Forward] | |||
Debt issuance costs, Beginning Balance | 2,200 | 2,786 | |
Debt issuance costs, Financing costs incurred | 4,152 | ||
Debt issuance costs, Write-off during the period | (907) | ||
Debt issuance costs, Amortization during the period | (654) | (586) | |
Debt issuance costs, Ending Balance | 4,791 | 2,200 | 2,786 |
Term Loan And Senior Notes [Member] | |||
Deferred Finance Costs [Roll Forward] | |||
Debt issuance costs, Beginning Balance | 887 | 1,074 | |
Debt issuance costs, Financing costs incurred | 41,781 | ||
Debt issuance costs, Write-off during the period | (732) | ||
Debt issuance costs, Amortization during the period | (6,028) | (187) | |
Debt issuance costs, Ending Balance | 35,908 | 887 | 1,074 |
Total, Beginning Balance | 887 | 1,074 | |
Total, Financing costs incurred | 52,031 | ||
Total, Write-off during the period | (732) | ||
Total, Amortization during the period | 6,239 | 187 | |
Total, Ending Balance | 45,947 | 887 | 1,074 |
Term Loan B (TLB) Facility [Member] | |||
Deferred Finance Costs [Roll Forward] | |||
Unamortized discount on TLB Facility, Beginning Balance | 0 | 0 | |
Unamortized discount on TLB Facility, Financing costs incurred | 10,250 | ||
Unamortized discount on TLB Facility, Write-off during the period | 0 | ||
Unamortized discount on TLB Facility, Amortization during the period | (211) | 0 | |
Unamortized discount on TLB Facility, Ending Balance | $ 10,039 | $ 0 | $ 0 |
Benefit Plans (Narrative) (Deta
Benefit Plans (Narrative) (Details) - USD ($) $ in Millions | 2 Months Ended | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Defined Contribution And Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Basis Points | 0.50% | |||
Defined Contribution Plan Cash [Member] | ||||
Defined Contribution And Benefit Plan Disclosure [Line Items] | ||||
Employer matching contribution, percentage of employees' gross pay | 35.00% | 35.00% | ||
Maximum contribution per employee, percent | 6.00% | 6.00% | ||
Legacy Greatbatch 401(k) Plan [Member] | Defined Contribution Plan Cash [Member] | ||||
Defined Contribution And Benefit Plan Disclosure [Line Items] | ||||
Employer matching contribution, percentage of employees' gross pay | 35.00% | |||
Maximum contribution per employee, percent | 6.00% | |||
Net costs recognized | $ 2.3 | $ 2.2 | $ 2 | |
Legacy Greatbatch 401(k) Plan [Member] | Defined Contribution Plan Stock [Member] | ||||
Defined Contribution And Benefit Plan Disclosure [Line Items] | ||||
Employer matching contribution, percentage of employees' gross pay | 4.00% | |||
Employer contribution cost | $ 0 | $ 4.2 | $ 4.8 | |
Shares Held In Employee Stock Plan | 580,000 | 580,000 | ||
Lakes Region Medical 401(k) Plan [Member] | Lake Region Medical 401(k) Plan [Member] | ||||
Defined Contribution And Benefit Plan Disclosure [Line Items] | ||||
Employer matching contribution, percentage of employees' gross pay | 6.00% | |||
Maximum contribution per employee, percent | 50.00% | |||
Net costs recognized | $ 0.8 | |||
Employer matching contribution, percentage | 50.00% | |||
Vesting period | 5 years | |||
Lakes Region Medical 401(k) Plan [Member] | Lake Region Medical 401(k) Plan [Member] | Maximum [Member] | ||||
Defined Contribution And Benefit Plan Disclosure [Line Items] | ||||
Employer matching contribution, percentage of employees' gross pay | 3.00% |
Benefit Plans (Change in Projec
Benefit Plans (Change in Projected Benefit Obligation) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2016 | Jan. 02, 2015 | |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||
Projected benefit obligation at beginning of year | $ 2,843 | $ 2,422 |
Projected benefit obligation acquired | 4,316 | 0 |
Service cost | 439 | 203 |
Interest cost | 165 | 75 |
Plan participants’ contribution | 61 | 36 |
Actuarial loss | 235 | 630 |
Benefits transferred in, net | 258 | 155 |
Settlement/curtailment gain | 0 | (337) |
Foreign currency translation | (325) | (341) |
Projected benefit obligation at end of year | $ 7,992 | $ 2,843 |
Benefit Plans (Change in Fair V
Benefit Plans (Change in Fair Value of Plan Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2016 | Jan. 02, 2015 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Fair value of plan assets at beginning of year | $ 437 | $ 731 |
Employer contributions (refund) | 69 | (39) |
Plan participants’ contribution | 61 | 36 |
Actual loss on plan assets | (39) | (101) |
Benefits transferred in, net | 362 | 198 |
Settlements | 0 | (337) |
Foreign currency translation | (19) | (51) |
Fair value of plan assets at end of year | 871 | 437 |
Projected benefit obligation in excess of plan assets at end of year | 7,121 | 2,406 |
Defined benefit liability classified as other current liabilities | 46 | 25 |
Defined benefit liability classified as long-term liabilities | 7,075 | 2,381 |
Accumulated benefit obligation at end of year | $ 6,299 | $ 1,938 |
Benefit Plans (Amount Recognize
Benefit Plans (Amount Recognized in Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |||
Net loss occurring during the year | $ 164 | $ 736 | |
Amortization of losses | (156) | (138) | |
Prior service cost | (1) | (2) | |
Amortization of prior service cost | (9) | (11) | |
Foreign currency translation | 0 | (76) | |
Pre-tax adjustment | (2) | 509 | |
Taxes | 22 | (135) | |
Net loss | $ 20 | $ 374 | $ (272) |
Benefit Plans (Amortization to
Benefit Plans (Amortization to be Recognized in Accumulated Other Comprehensive Income) (Details) $ in Thousands | 12 Months Ended |
Jan. 01, 2016USD ($) | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |
Amortization of net prior service credit | $ 10 |
Amortization of net loss | $ 172 |
Benefit Plans (Net Pension Cost
Benefit Plans (Net Pension Costs) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2016 | Jan. 02, 2015 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | ||
Service cost | $ 439 | $ 203 |
Interest cost | 165 | 75 |
Settlements loss | 0 | 105 |
Expected return on assets | (11) | (3) |
Recognized net actuarial loss | 164 | 45 |
Net pension cost | $ 757 | $ 425 |
Benefit Plans (Actuarial Valuat
Benefit Plans (Actuarial Valuations) (Details) | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Discount rate | 2.20% | 2.30% | |
Salary growth | 2.90% | 3.00% | |
Expected rate of return on assets | 2.00% | 2.30% | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Discount rate | 2.30% | 3.40% | 2.10% |
Salary growth | 3.00% | 3.10% | 2.40% |
Expected rate of return on assets | 2.30% | 2.50% | 0.00% |
Benefit Plans (Plan Assets Comp
Benefit Plans (Plan Assets Components) (Details) - USD ($) $ in Thousands | Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 |
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 871 | $ 437 | $ 731 |
Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Fair Value, Inputs, Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 871 | 437 | |
Fair Value, Inputs, Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Insurance Contract [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 871 | 437 | |
Insurance Contract [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Insurance Contract [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 871 | 437 | |
Insurance Contract [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 0 | $ 0 |
Benefit Plans (Estimated Benefi
Benefit Plans (Estimated Benefit Payments Over Next Ten Years) (Details) $ in Thousands | Jan. 01, 2016USD ($) |
Defined Benefit Plan, Expected Future Benefit Payments, Fiscal Year Maturity [Abstract] | |
2,016 | $ 166 |
2,017 | 205 |
2,018 | 225 |
2,019 | 277 |
2,020 | 265 |
2020-2024 | $ 1,619 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narratives) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum term of share based award | 10 years | ||
Closing stock price | $ 52.50 | ||
Unrecognized compensation cost related to non-vested stock options | $ 2,300 | ||
Period for recognition | 2 years | ||
Stock Options [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Restricted Stock and Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Period for recognition | 2 years | ||
Tax benefit (expense) from compensation expense | $ 3,400 | $ 2,300 | $ (400) |
Total unrecognized compensation cost | 7,200 | ||
Fair value of shares vested | $ 16,100 | $ 12,500 | $ 4,000 |
Restricted Stock and Restricted Stock Units [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 4 years | ||
Restricted Stock Units (RSUs) [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Potential performance based restricted stock units to be issued based on shareholder return | 0 | ||
Restricted Stock Units (RSUs) [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Potential performance based restricted stock units to be issued based on shareholder return | 577,825 | ||
Restricted Stock And Unit Awards [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
2009 Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized | 1,350,000 | ||
Number of shares available for grant | 75,361 | ||
2009 Plan [Member] | Restricted Stock and Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized | 200,000 | ||
Number of shares available for grant | 9,728 | ||
2011 Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized | 1,350,000 | ||
Number of shares available for grant | 289,734 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | $ 9,376 | $ 13,186 | $ 14,101 |
Cost of Sales [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | 795 | 3,530 | 3,864 |
Selling, General and Administrative Expenses [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | 7,510 | 7,923 | 7,907 |
Research and Development Expense [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | 982 | 1,440 | 1,194 |
Other Operating Expenses, net [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | 89 | 293 | 1,136 |
Employee Stock Option [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | 2,708 | 2,523 | 3,490 |
Restricted Stock And Unit Awards [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | 6,668 | 6,417 | 5,843 |
Defined Contribution Plan Stock [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation | $ 0 | $ 4,246 | $ 4,768 |
Stock-Based Compensation (Weigh
Stock-Based Compensation (Weighted-Average Fair Value and Assumptions) (Details 1) - $ / shares | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Weighted average grant date fair value | $ 12.18 | $ 16.43 | $ 8.38 |
Risk-free interest rate | 1.55% | 1.73% | 0.73% |
Expected volatility | 26.00% | 39.00% | 39.00% |
Expected life (in years) | 4 years 8 months | 5 years 3 months 18 days | 5 years 3 months 18 days |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Annual prevesting forfeiture rate | 9.00% | 9.00% | 9.00% |
Stock-Based Compensation (Time-
Stock-Based Compensation (Time-Vested Stock Option Activity) (Details 2) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Stock Options Time and Performance Based [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Stock Options Outstanding, Beginning | 1,590,337 | 1,793,670 | 2,060,772 |
Option Grants in Period, Gross | 301,547 | 183,571 | 372,676 |
Option Exercises in Period | (280,701) | (353,625) | (551,092) |
Option Forfeitures and Expirations in Period | (52,183) | (33,279) | (88,686) |
Stock Options Outstanding, Ending | 1,678,900 | 1,590,337 | 1,793,670 |
Options Expected to Vest, Number | 1,643,386 | ||
Options Exercisable, Number | 1,467,256 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Options Outstanding, Weighted Average Exercise Price, Beginning | $ 25.17 | $ 22.96 | $ 23.18 |
Option Grants in Period, Weighted Average Exercise Price | 49.20 | 43.84 | 23.33 |
Option Exercises in Period, Weighted Average Exercise Price | 23.45 | 23.41 | 23.24 |
Option Forfeitures and Expirations in Period, Weighted Average Exercise Price | 42.45 | 27.82 | 28.05 |
Options Outstanding, Weighted Average Exercise Price, Ending | 28.32 | $ 25.17 | $ 22.96 |
Options Expected to Vest, Weighted Average Exercise Price | 27.90 | ||
Options Exercisable, Weighted Average Exercise Price | $ 25.50 | ||
Options Outstanding, Weighted Average Remaining Contractual Term | 6 years 1 month | ||
Options Expected to Vest, Weighted Average Remaining Contractual Term | 6 years 1 month | ||
Options Exercisable, Weighted Average Remaining Contractual Term | 5 years 9 months | ||
Options Outstanding, Intrinsic Value | $ 40.6 | ||
Options Expected to Vest, Intrinsic Value | 40.4 | ||
Options Exercisable, Intrinsic Value | $ 39.6 | ||
Roll-over Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Option Grants in Period, Gross | 119,900 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Option Grants in Period, Weighted Average Exercise Price | $ 12.41 |
Stock-Based Compensation (Exerc
Stock-Based Compensation (Exercise of Stock Option) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Intrinsic value | $ 8,231 | $ 7,997 | $ 6,807 |
Cash received | 6,583 | 8,278 | 12,807 |
Tax benefit realized | $ 1,954 | $ 1,704 | $ 727 |
Stock-Based Compensation (Restr
Stock-Based Compensation (Restricted Stock and Restricted Stock Units)(Details) - $ / shares | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Restricted Stock And Restricted Stock Units Time Based [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Nonvested Restricted Stock Units and Awards, Beginning | 67,832 | 67,575 | 80,269 |
Restricted Stock Units and Awards Granted | 44,629 | 63,817 | 67,230 |
Restricted Stock Units and Awards Vested | (56,119) | (53,568) | (74,062) |
Restricted Stock Units and Awards Forfeited | (17,107) | (9,992) | (5,862) |
Nonvested Restricted Stock Units and Awards, Ending | 39,235 | 67,832 | 67,575 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Beginning | $ 36.22 | $ 26.37 | $ 23.48 |
Restricted Stock Units and Awards Granted, Weighted Average Fair Value | 49.84 | 44.78 | 26.76 |
Restricted Stock Units and Awards Vested, Weighted Average Fair Value | 37.93 | 34.16 | 23.93 |
Restricted Stock Units and Awards Forfeited, Weighted Average Fair Value | 40.48 | 35.30 | 22.26 |
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Ending | $ 47.40 | $ 36.22 | $ 26.37 |
Restricted Stock And Restricted Stock Units Performance Based [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Nonvested Restricted Stock Units and Awards, Beginning | 716,163 | 779,678 | 782,446 |
Restricted Stock Units and Awards Granted | 179,940 | 186,825 | 318,169 |
Restricted Stock Units and Awards Vested | (270,198) | (221,470) | (49,139) |
Restricted Stock Units and Awards Forfeited | (48,080) | (28,870) | (271,798) |
Nonvested Restricted Stock Units and Awards, Ending | 577,825 | 716,163 | 779,678 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Beginning | $ 19.57 | $ 16.41 | $ 16.02 |
Restricted Stock Units and Awards Granted, Weighted Average Fair Value | 32.92 | 31.33 | 15.86 |
Restricted Stock Units and Awards Vested, Weighted Average Fair Value | 15.30 | 18.51 | 14.68 |
Restricted Stock Units and Awards Forfeited, Weighted Average Fair Value | 26.96 | 18.42 | 14.94 |
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Ending | $ 25.11 | $ 19.57 | $ 16.41 |
Research, Development and Eng94
Research, Development and Engineering Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Research and development expense [Line Items] | |||
Total research, development and engineering costs, net | $ (52,995) | $ (49,845) | $ (54,077) |
Research, Development, and Engineering Costs [Member] | |||
Research and development expense [Line Items] | |||
Total research, development and engineering costs, net | (59,767) | (58,974) | (62,652) |
Customer Cost Reimbursements [Member] | |||
Research and development expense [Line Items] | |||
Total research, development and engineering costs, net | $ (6,772) | $ (9,129) | $ (8,575) |
Other Operating Expenses, Net95
Other Operating Expenses, Net (Narrative) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jan. 01, 2016USD ($) | Oct. 02, 2015USD ($) | Jan. 01, 2016USD ($)building | Jan. 02, 2015USD ($)departmental_groupfacility | Jan. 03, 2014USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||
Held for sale asset impairment | $ 0 | $ 400 | $ 900 | ||
Acquisition integration related costs accrued | $ 6,200 | 6,200 | |||
Fair value adjustments | 840 | 700 | |||
Indefinite-lived assets written-off | (500) | ||||
Spinoff [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Professional fees | 6,000 | ||||
Accrued professional fees | 500 | 500 | |||
In Process Research And Development [Member] | QiG [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Indefinite-lived assets written-off | (500) | ||||
Wireless Sensing [Member] | Greatbatch Medical [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Write-off | $ 900 | ||||
Executive Vice President [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Severance costs | 900 | ||||
Minimum [Member] | Spinoff [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Transaction costs | 10,000 | ||||
Maximum [Member] | Spinoff [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Transaction costs | 12,000 | ||||
Lake Region Medical [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Acquisition transaction costs | 23,700 | 23,700 | |||
Acquisition transactions costs accrued | 700 | 700 | |||
Acquisition integration related costs | 8,600 | ||||
Lake Region Medical [Member] | Spinoff [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Transaction costs | 57,100 | $ 13,000 | |||
Lake Region Medical [Member] | Minimum [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total expense expected | 40,000 | 40,000 | |||
Expected capital investment | 20,000 | 20,000 | |||
Lake Region Medical [Member] | Maximum [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total expense expected | 50,000 | 50,000 | |||
Expected capital investment | 25,000 | 25,000 | |||
Orthopaedic Facility Optimization [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Proceeds from assets held for sale | 600 | ||||
Gain (loss) on assets held for sale | 0 | ||||
Operating Unit Realignment [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Costs to date | $ 6,600 | ||||
Operating Unit Realignment [Member] | Greatbatch Medical [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of sales and marketing groups | departmental_group | 1 | ||||
Number of operation groups | departmental_group | 1 | ||||
Operating Unit Realignment [Member] | Severance And Retention [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Costs to date | $ 5,000 | ||||
Operating Unit Realignment [Member] | Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Costs to date | $ 1,600 | ||||
Legacy Lake Region Medical Consolidation [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Capital investments expended | 900 | 900 | |||
Costs to date | 2,000 | 2,000 | |||
Number of facility consolidations | facility | 2 | ||||
Legacy Lake Region Medical Consolidation [Member] | Minimum [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected capital expenditures | 4,000 | 4,000 | |||
Total expense expected | 13,000 | 13,000 | |||
Legacy Lake Region Medical Consolidation [Member] | Minimum [Member] | Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total expense expected | 8,000 | 8,000 | |||
Legacy Lake Region Medical Consolidation [Member] | Minimum [Member] | Employee Severance [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total expense expected | 5,000 | 5,000 | |||
Legacy Lake Region Medical Consolidation [Member] | Maximum [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected capital expenditures | 5,000 | 5,000 | |||
Total expense expected | 15,000 | 15,000 | |||
Legacy Lake Region Medical Consolidation [Member] | Maximum [Member] | Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total expense expected | 9,000 | 9,000 | |||
Legacy Lake Region Medical Consolidation [Member] | Maximum [Member] | Employee Severance [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total expense expected | 6,000 | 6,000 | |||
Investments in Capacity and Capabilities [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Capital investments expended | 21,300 | 21,300 | |||
Costs to date | 32,000 | 32,000 | |||
Investments in Capacity and Capabilities [Member] | Minimum [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected capital expenditures | 25,000 | 25,000 | |||
Total expense expected | 34,000 | 34,000 | |||
Investments in Capacity and Capabilities [Member] | Minimum [Member] | Severance And Retention [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total expense expected | 5,000 | 5,000 | |||
Investments in Capacity and Capabilities [Member] | Minimum [Member] | Accelerated Depreciation And Asset Write Offs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total expense expected | 2,000 | 2,000 | |||
Investments in Capacity and Capabilities [Member] | Minimum [Member] | Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total expense expected | 27,000 | 27,000 | |||
Investments in Capacity and Capabilities [Member] | Maximum [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected capital expenditures | 28,000 | 28,000 | |||
Total expense expected | 39,000 | 39,000 | |||
Investments in Capacity and Capabilities [Member] | Maximum [Member] | Severance And Retention [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total expense expected | 7,000 | 7,000 | |||
Investments in Capacity and Capabilities [Member] | Maximum [Member] | Accelerated Depreciation And Asset Write Offs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total expense expected | 3,000 | 3,000 | |||
Investments in Capacity and Capabilities [Member] | Maximum [Member] | Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total expense expected | 29,000 | 29,000 | |||
Orthopaedic Facility Optimization [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Capital investments expended | 28,400 | 28,400 | |||
Costs to date | 43,900 | $ 43,900 | |||
Number of facility consolidations | building | 2 | ||||
Assets held for sale | $ 2,100 | ||||
Held for sale asset impairment | 400 | ||||
Orthopaedic Facility Optimization [Member] | Swiss Orthopaedic Product Line [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Assets held for sale, expected gain from earn-out payment | $ 2,700 | ||||
Orthopaedic Facility Optimization [Member] | Minimum [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected capital expenditures | 30,000 | $ 30,000 | |||
Total expense expected | 45,000 | 45,000 | |||
Orthopaedic Facility Optimization [Member] | Minimum [Member] | Severance And Retention [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total expense expected | 11,000 | 11,000 | |||
Orthopaedic Facility Optimization [Member] | Minimum [Member] | Accelerated Depreciation And Asset Write Offs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total expense expected | 13,000 | 13,000 | |||
Orthopaedic Facility Optimization [Member] | Minimum [Member] | Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total expense expected | 21,000 | 21,000 | |||
Orthopaedic Facility Optimization [Member] | Maximum [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected capital expenditures | 35,000 | 35,000 | |||
Total expense expected | 48,000 | 48,000 | |||
Orthopaedic Facility Optimization [Member] | Maximum [Member] | Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total expense expected | $ 24,000 | $ 24,000 |
Other Operating Expenses, Net96
Other Operating Expenses, Net (Details) | 12 Months Ended | ||
Jan. 01, 2016USD ($) | Jan. 02, 2015USD ($) | Jan. 03, 2014USD ($) | |
Operating Costs and Expenses [Abstract] | |||
Other operating (income) expense, net | $ 66,464,000 | $ 15,297,000 | $ 15,790,000 |
Investments in Capacity and Capabilities [Member] | |||
Operating Costs and Expenses [Abstract] | |||
Other operating (income) expense, net | 23,037,000 | 8,925,000 | 0 |
Operating Unit Realignment [Member] | |||
Operating Costs and Expenses [Abstract] | |||
Other operating (income) expense, net | 0 | 1,017,000 | 5,625,000 |
Legacy Lake Region Medical Consolidation [Member] | |||
Operating Costs and Expenses [Abstract] | |||
Other operating (income) expense, net | 1,961,000 | 0 | 0 |
Other Consolidation And Optimization Income (Costs) [Member] | |||
Operating Costs and Expenses [Abstract] | |||
Other operating (income) expense, net | 0 | (71,000) | 1,095,000 |
Orthopaedic facility optimization [Member] | |||
Operating Costs and Expenses [Abstract] | |||
Other operating (income) expense, net | 1,395,000 | 1,317,000 | 8,038,000 |
Integration costs [Member] | |||
Operating Costs and Expenses [Abstract] | |||
Other operating (income) expense, net | 33,449,000 | 3,000 | (502,000) |
Asset dispositions severance and other [Member] | |||
Operating Costs and Expenses [Abstract] | |||
Other operating (income) expense, net | $ 6,622,000 | $ 4,106,000 | $ 1,534,000 |
Legacy Lake Region Medical Consolidation [Member] | |||
Other Operating Income Expense Detail [Line Items] | |||
Number of facilities after consolidation | 1 |
Other Operating Expenses, Net97
Other Operating Expenses, Net (Changes in Accrued Liabilities) (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended |
Jan. 01, 2016 | Jan. 01, 2016 | |
Investments in Capacity and Capabilities [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, Beginning balance | $ 2,229 | |
Restructuring charges | 23,037 | |
Write-offs | (235) | |
Cash payments | (22,007) | |
Restructuring Reserve, Ending balance | $ 3,024 | 3,024 |
Orthopaedic Facility Optimization [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, Beginning balance | 287 | |
Restructuring charges | 1,395 | |
Write-offs | (88) | |
Cash payments | (1,594) | |
Restructuring Reserve, Ending balance | 0 | 0 |
Severance And Retention [Member] | Investments in Capacity and Capabilities [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, Beginning balance | 1,163 | |
Restructuring charges | 2,729 | |
Write-offs | 0 | |
Cash payments | (2,463) | |
Restructuring Reserve, Ending balance | 1,429 | 1,429 |
Severance And Retention [Member] | Orthopaedic Facility Optimization [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, Beginning balance | 0 | |
Restructuring charges | 0 | |
Write-offs | 0 | |
Cash payments | 0 | |
Restructuring Reserve, Ending balance | 0 | 0 |
Accelerated Depreciation And Asset Write Offs [Member] | Investments in Capacity and Capabilities [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, Beginning balance | 0 | |
Restructuring charges | 235 | |
Write-offs | (235) | |
Cash payments | 0 | |
Restructuring Reserve, Ending balance | 0 | 0 |
Accelerated Depreciation And Asset Write Offs [Member] | Orthopaedic Facility Optimization [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, Beginning balance | 0 | |
Restructuring charges | 88 | |
Write-offs | (88) | |
Cash payments | 0 | |
Restructuring Reserve, Ending balance | 0 | 0 |
Other Restructuring [Member] | Investments in Capacity and Capabilities [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, Beginning balance | 1,066 | |
Restructuring charges | 20,073 | |
Write-offs | 0 | |
Cash payments | (19,544) | |
Restructuring Reserve, Ending balance | 1,595 | 1,595 |
Other Restructuring [Member] | Orthopaedic Facility Optimization [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, Beginning balance | 287 | |
Restructuring charges | 1,307 | |
Write-offs | 0 | |
Cash payments | (1,594) | |
Restructuring Reserve, Ending balance | 0 | 0 |
Legacy Lake Region Medical Consolidation [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, Beginning balance | 4,045 | |
Restructuring charges | 1,961 | |
Write-offs | 0 | |
Cash payments | (1,743) | |
Restructuring Reserve, Ending balance | 4,263 | 4,263 |
Legacy Lake Region Medical Consolidation [Member] | Employee Severance [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, Beginning balance | 3,392 | |
Restructuring charges | 557 | |
Write-offs | 0 | |
Cash payments | (282) | |
Restructuring Reserve, Ending balance | 3,667 | 3,667 |
Legacy Lake Region Medical Consolidation [Member] | Other Restructuring [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, Beginning balance | 653 | |
Restructuring charges | 1,404 | |
Write-offs | 0 | |
Cash payments | (1,461) | |
Restructuring Reserve, Ending balance | $ 596 | $ 596 |
Income Taxes (Narratives) (Deta
Income Taxes (Narratives) (Details) $ in Millions | Jan. 01, 2016USD ($) |
Income Tax Disclosure [Abstract] | |
Reasonably possible reduction within next 12 months | $ 0.1 |
Unrecognized tax benefit | 8.5 |
Undistributed earnings of foreign subsidiaries | $ 84 |
Income Taxes (Income Before Inc
Income Taxes (Income Before Income Tax Domestic And Foreign) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Income Tax Disclosure [Line Items] | |||
Income (loss) from continuing operations before income taxes | $ (15,700) | $ 76,579 | $ 48,838 |
UNITED STATES [Member] | |||
Income Tax Disclosure [Line Items] | |||
Income (loss) from continuing operations before income taxes | (42,166) | 56,801 | 42,392 |
International [Member] | |||
Income Tax Disclosure [Line Items] | |||
Income (loss) from continuing operations before income taxes | $ 26,466 | $ 19,778 | $ 6,446 |
Income Taxes (Provision Benefit
Income Taxes (Provision Benefit of Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Current: | |||
Federal | $ (3,753) | $ 16,293 | $ 39,353 |
State | (367) | 1,299 | 1,604 |
International | 6,312 | 2,998 | 1,470 |
Total | 2,192 | 20,590 | 42,427 |
Deferred: | |||
Federal | (8,144) | 1,211 | (28,678) |
State | (880) | (310) | 427 |
International | (1,274) | (370) | (1,605) |
Total | (10,298) | 531 | (29,856) |
Effective tax rate | $ (8,106) | $ 21,121 | $ 12,571 |
Income Taxes (Effect Tax Rate R
Income Taxes (Effect Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Statutory rate | $ (5,495) | $ 26,803 | $ 17,093 |
Foreign rate differential | (3,180) | (3,276) | (348) |
Uncertain tax positions | (531) | 412 | 831 |
State taxes, net of federal benefit | (1,490) | 507 | 1,148 |
Change in foreign tax rates | (91) | (446) | (1,806) |
Non-deductible transaction costs | 4,867 | 0 | 0 |
Valuation allowance | 626 | (299) | 186 |
Other | (962) | (980) | (882) |
Effective tax rate | $ (8,106) | $ 21,121 | $ 12,571 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Statutory rate | 35.00% | 35.00% | 35.00% |
Effective Income Tax Rate Reconciliation, Tax Credit, Amount | $ 1,850 | $ 1,600 | $ 3,651 |
Federal tax credits | 11.80% | (2.10%) | (7.50%) |
Foreign rate differential | 20.20% | (4.30%) | (0.70%) |
Uncertain tax positions | 3.40% | 0.60% | 1.70% |
State taxes, net of federal benefit | 9.50% | 0.70% | 2.30% |
Change in foreign tax rates | 0.60% | (0.60%) | (3.70%) |
Non-deductible transaction costs | (31.00%) | 0.00% | 0.00% |
Valuation allowance | (4.00%) | (0.40%) | 0.40% |
Other | 6.10% | (1.30%) | (1.80%) |
Effective tax rate | 51.60% | 27.60% | 25.70% |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Jan. 01, 2016 | Jan. 02, 2015 |
Components of Deferred Tax Assets and Liabilities [Abstract] | ||
Tax credits | $ 22,196 | $ 5,828 |
Net operating loss carryforwards | 153,949 | 6,721 |
Inventories | 6,543 | 3,335 |
Accrued expenses | 13,138 | 4,338 |
Stock-based compensation | 9,512 | 9,341 |
Other | 38 | 1,659 |
Gross deferred tax assets | 205,376 | 31,222 |
Less valuation allowance | (39,171) | (10,709) |
Net deferred tax assets | 166,205 | 20,513 |
Property, plant and equipment | (32,772) | (2,646) |
Intangible assets | (347,896) | (57,850) |
Convertible subordinated notes | (3,754) | (5,006) |
Gross deferred tax liabilities | (384,422) | (65,502) |
Net deferred tax liability | $ (218,217) | $ (44,989) |
Income Taxes (Deferred Tax A103
Income Taxes (Deferred Tax Assets and Liabilities Current Noncurrent) (Details) - USD ($) $ in Thousands | Jan. 01, 2016 | Jan. 02, 2015 |
Components of Deferred Tax Assets and Liabilities [Abstract] | ||
Current deferred tax asset | $ 0 | $ 6,168 |
Current deferred tax liability | 0 | (588) |
Noncurrent deferred tax asset | 3,587 | 2,626 |
Noncurrent deferred tax liability | (221,804) | (53,195) |
Net deferred tax liability | $ (218,217) | $ (44,989) |
Income Taxes (Income Tax Carry
Income Taxes (Income Tax Carry Forward) (Details) $ in Millions | Jan. 01, 2016USD ($) |
Federal [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net Operating Loss | $ 386.2 |
International [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net Operating Loss | 42.2 |
State [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net Operating Loss | 298.7 |
Foreign Tax Credit Carryforward [Member] | Federal [Member] | |
Operating Loss Carryforwards [Line Items] | |
Tax Credit | 17 |
Research Tax Credit Carryforward [Member] | US and State [Member] | |
Operating Loss Carryforwards [Line Items] | |
Tax Credit | 2.6 |
Investment Tax Credit Carryforward [Member] | State [Member] | |
Operating Loss Carryforwards [Line Items] | |
Tax Credit | $ 5.3 |
Income Taxes (Unrecognized Tax
Income Taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance, beginning of year | $ 2,411 | $ 1,858 | $ 970 |
Additions relating to business combinations | 274 | 268 | 325 |
Additions based upon tax positions related to the current year | 7,443 | 0 | 0 |
Additions related to prior period tax positions | 163 | 510 | 651 |
Reductions relating to settlements with tax authorities | (550) | (225) | (88) |
Reductions as a result of a lapse of applicable statute of limitations | (470) | 0 | 0 |
Balance, end of year | $ 9,271 | $ 2,411 | $ 1,858 |
Commitments and Contingencie106
Commitments and Contingencies (Narratives) (Details) | Jan. 26, 2016USD ($)patent | Jan. 01, 2016USD ($) | Jan. 02, 2015USD ($) | Jan. 03, 2014USD ($) |
Gain Contingencies [Line Items] | ||||
Direct operating cost, royalty expense | $ 2,400,000 | $ 3,300,000 | $ 3,500,000 | |
Standard product warranty description | The Company generally warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. | |||
Purchase commitment description | Contractual obligations for purchase of goods or services are defined as agreements that are enforceable and legally binding on the Company and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The Company’s purchase orders are normally based on its current manufacturing needs and are fulfilled by its vendors within short time horizons. The Company enters into blanket orders with vendors that have preferred pricing and terms, however these orders are normally cancelable by us without penalty. | |||
Remaining minimum amount committed | $ 63,700,000 | |||
Maximum Loss Per Associate Under Stop Loss Insurance | 250,000 | |||
Accrued Self Insured Medical Plan Liability | 4,000,000 | 1,800,000 | ||
Increase in Workers' Compensation Liability | 900,000 | |||
Workers' Compensation Liability | 3,900,000 | $ 0 | ||
Gain (Loss) Related to Litigation Settlement | $ 0 | |||
Loss Contingency, Opinion of Counsel | The Company believes these allegations are without merit and has concluded that any potential loss related to these allegations is not probable | |||
Estimated Litigation Liability, Current | $ 0 | |||
Lake Region Medical [Member] | ||||
Gain Contingencies [Line Items] | ||||
Maximum Loss Per Associate Under Stop Loss Insurance | 275,000 | |||
Other Noncurrent Liabilities [Member] | ||||
Gain Contingencies [Line Items] | ||||
Accrual for Environmental Loss Contingencies | $ 1,100,000 | |||
Subsequent Event [Member] | Positive Outcome of Litigation [Member] | ||||
Gain Contingencies [Line Items] | ||||
Number of patents found infringed upon | patent | 2 | |||
Settlement amount | $ 37,500,000 |
Commitments and Contingencie107
Commitments and Contingencies (Change in Product Warranty Liability) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2016 | Jan. 02, 2015 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance | $ 660 | $ 1,819 |
Additions to warranty reserve | 1,274 | 953 |
Liabilities assumed from acquisition | 2,521 | 0 |
Warranty claims paid | (1,139) | (2,112) |
Ending balance | $ 3,316 | $ 660 |
Commitments and Contingencie108
Commitments and Contingencies (Operating Lease Expenses) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating lease expense | $ 6,516 | $ 4,281 | $ 4,379 |
Commitments and Contingencie109
Commitments and Contingencies (Minimum Future Estimated Operating Lease Expense) (Details) $ in Thousands | Jan. 01, 2016USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2,016 | $ 14,118 |
2,017 | 10,951 |
2,018 | 9,950 |
2,019 | 8,979 |
2,020 | 6,925 |
Thereafter | 27,674 |
Total estimated operating lease expense | $ 78,597 |
Commitments and Contingencie110
Commitments and Contingencies (Foreign Currency Contracts) (Details) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016USD ($)$ / MXN | Jan. 02, 2015USD ($) | Jan. 03, 2014USD ($) | |
Foreign Currency Cash Flow Hedges [Abstract] | |||
Increase (reduction) in Cost of Sales | $ 1,948 | $ (168) | $ (1,154) |
Ineffective portion of change in fair value | $ 0 | $ 0 | $ 0 |
Derivative [Line Items] | |||
Description of Types of Foreign Currency Cash Flow Hedging Instruments Used | Historically, the Company has entered into forward contracts to purchase Mexican pesos in order to hedge the risk of peso-denominated payments associated with its operations in Tijuana, Mexico | ||
Payment for termination of foreign currency contract | $ 2,400 | ||
Loss on termination of foreign currency contract | (2,400) | ||
Terminated FX Contract [Member] | |||
Derivative [Line Items] | |||
Loss on termination of foreign currency contract | $ 1,600 | ||
FX Contract 1 [Member] | |||
Derivative [Line Items] | |||
Derivative instrument | FX Contract | ||
Aggregate Notional Amount | $ 16,480 | ||
Start Date | Jan. 1, 2016 | ||
End Date | Dec. 31, 2016 | ||
$/Peso | $ / MXN | 0.0584 | ||
Other Current Liabilities [Member] | FX Contract 1 [Member] | |||
Derivative [Line Items] | |||
Foreign Currency Cash Flow Hedge Liability at Fair Value | $ 307 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 01, 2016 | Oct. 02, 2015 | Jul. 03, 2015 | Apr. 03, 2015 | Jan. 02, 2015 | Oct. 03, 2014 | Jul. 04, 2014 | Apr. 04, 2014 | Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Numerator for basic EPS: | |||||||||||
Net income (loss) | $ (7,594) | $ 55,458 | $ 36,267 | ||||||||
Denominator for basic EPS: | |||||||||||
Weighted average shares outstanding | 26,363 | 24,825 | 23,991 | ||||||||
Effect of dilutive securities stock options, restricted stock and restricted stock units | 0 | 1,150 | 1,332 | ||||||||
Denominator for diluted EPS | 26,363 | 25,975 | 25,323 | ||||||||
Basic (in dollars per share) | $ (0.85) | $ 0 | $ 0.36 | $ 0.32 | $ 0.57 | $ 0.56 | $ 0.50 | $ 0.61 | $ (0.29) | $ 2.23 | $ 1.51 |
Diluted (in dollars per share) | $ (0.85) | $ 0 | $ 0.35 | $ 0.31 | $ 0.54 | $ 0.54 | $ 0.48 | $ 0.58 | $ (0.29) | $ 2.14 | $ 1.43 |
Earnings (Loss) Per Share (Anti
Earnings (Loss) Per Share (Antidilutive Securities) (Details) - shares | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Anitdilutive Securities Excluded From Earnings Per Share [Abstract] | |||
Time-vested stock options, restricted stock and restricted stock units | 1,718,135 | 175,549 | 18,480 |
Performance-vested stock options and restricted stock units | 577,825 | 0 | 0 |
Incremental common share attributable to dilutive effect of conversion of debt securities | 0 |
Accumulated Other Comprehens113
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Defined Benefit Plan Liability | |||
Defined Benefit Plan Liability, Beginning | $ (1,181) | $ (672) | |
Net defined benefit plan liability adjustments | 2 | (509) | |
Defined Benefit Plan Liability, Ending | (1,179) | (1,181) | $ (672) |
Cash Flow Hedges | |||
Cash Flow Hedges, Beginning | (2,558) | (468) | |
Unrealized loss on cash flow hedges | (4,413) | (2,372) | |
Realized loss on foreign currency hedges | 1,948 | (168) | |
Realized loss on interest rate swap hedges | 2,631 | 450 | |
Cash Flow Hedges, End | (2,392) | (2,558) | (468) |
Foreign Currency Translation Adjustment | |||
Foreign Currency Translation Adjustment, Beginning | 11,450 | 14,952 | |
Foreign currency translation loss | (7,841) | (3,502) | |
Foreign Currency Translation Adjustment, End | 3,609 | 11,450 | 14,952 |
Total Pre-Tax Amount | |||
Total Pre-Tax Amount, Beginning | 7,711 | 13,812 | |
Unrealized loss on cash flow hedges | (4,413) | (2,372) | |
Realized loss on foreign currency hedges | 1,948 | (168) | |
Realized loss on interest rate swap hedges | 2,631 | 450 | |
Net defined benefit plan liability adjustments | 2 | (509) | |
Foreign currency translation loss | (7,841) | (3,502) | |
Total Pre-Tax Amount, End | 38 | 7,711 | 13,812 |
Tax | |||
Tax, Beginning | 1,412 | 546 | |
Unrealized loss on cash flow hedges | 1,545 | 829 | |
Realized loss on foreign currency hedges | (682) | 59 | |
Realized loss on interest rate swap hedges | (921) | (157) | |
Net defined benefit plan liability adjustments | (22) | 135 | |
Foreign currency translation loss | 0 | 0 | |
Tax, End | 1,332 | 1,412 | 546 |
Net-of-Tax Amount | |||
Net-of-Tax Amount, Beginning | 9,123 | 14,358 | |
Unrealized loss on cash flow hedges | (2,868) | (1,543) | |
Realized loss on foreign currency hedges | 1,266 | (109) | |
Realized loss on interest rate swap hedges | 1,710 | 293 | |
Net defined benefit plan liability adjustments | (20) | (374) | 272 |
Foreign currency translation gain (loss) | (7,841) | (3,502) | 1,521 |
Net-of-Tax Amount, End | $ 1,370 | $ 9,123 | $ 14,358 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narratives) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Foreign currency cash flow hedge gain (loss) to be reclassified during next 12 months | $ 2.4 | ||
Cost and equity method investments aggregate carrying amount | 20.6 | $ 14.5 | |
Income (Loss) from Equity Method Investments | 4.7 | 1.2 | $ (0.2) |
Proceeds from Equity Method Investment, Dividends or Distributions | 3.6 | ||
Cost-method investments, realized gains | 3.2 | ||
Held for sale asset impairment | 0 | 0.4 | 0.9 |
Indefinite-lived assets written-off | 0.5 | ||
Fair Value, Inputs, Level 2 [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Cost and equity method investments other than temporary impairment | $ 1.4 | $ 0 | $ 0.5 |
Chinese Venture Capital Fund [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Equity Method Investment, Ownership Percentage | 6.70% |
Fair Value Measurements (Assets
Fair Value Measurements (Assets and Liabilities Recorded at Fair Value on a Recurring Basis) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Jan. 01, 2016 | Jan. 02, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency contracts | $ 307 | $ 1,568 |
Interest rate swaps | 990 | |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency contracts | 0 | 0 |
Interest rate swaps | 0 | |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency contracts | 307 | 1,568 |
Interest rate swaps | 990 | |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency contracts | $ 0 | 0 |
Interest rate swaps | $ 0 |
Fair Value Measurements (Ass116
Fair Value Measurements (Assets and Liabilities Measured on Non-recurring Basis) (Details) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Thousands | Jan. 01, 2016 | Jan. 02, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cost method investment | $ 1,100 | |
Assets Held for Sale | $ 1,635 | |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cost method investment | 0 | |
Assets Held for Sale | 0 | |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cost method investment | 1,100 | |
Assets Held for Sale | 1,635 | |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cost method investment | $ 0 | |
Assets Held for Sale | $ 0 |
Business Segment, Geographic117
Business Segment, Geographic and Concentration Risk Information (Narrative) (Details) $ in Millions | 1 Months Ended | 12 Months Ended | |
Feb. 29, 2016 | Jan. 01, 2016USD ($)Segment | Jan. 02, 2015 | |
Noncontrolling Interest [Line Items] | |||
Number of Reportable Segments | Segment | 3 | ||
QiG [Member] | |||
Noncontrolling Interest [Line Items] | |||
Controlling Interest, Ownership Percentage | 100.00% | 89.00% | |
Controlling Interest, Liability of Expenses Incurred, Percentage | 100.00% | ||
Consideration to acquire additional noncontrolling interest | $ 16.7 | ||
Noncontrolling Interest, Consideration Paid to Related Party | 6.9 | ||
Greatbatch Medical [Member] | |||
Noncontrolling Interest [Line Items] | |||
Intersegment sales | 1.8 | ||
Lake Region Medical [Member] | |||
Noncontrolling Interest [Line Items] | |||
Intersegment sales | 1.2 | ||
Accrued Expenses [Member] | QiG [Member] | |||
Noncontrolling Interest [Line Items] | |||
Consideration to acquire additional noncontrolling interest payable | $ 6.8 | ||
Subsequent Event [Member] | |||
Noncontrolling Interest [Line Items] | |||
Stock conversion ratio | 3 |
Business Segment, Geographic118
Business Segment, Geographic And Concentration Risk Information (Sales by Product Lines) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 01, 2016 | Oct. 02, 2015 | Jul. 03, 2015 | Apr. 03, 2015 | Jan. 02, 2015 | Oct. 03, 2014 | Jul. 04, 2014 | Apr. 04, 2014 | Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | $ 317,567 | $ 146,637 | $ 174,890 | $ 161,320 | $ 169,726 | $ 171,699 | $ 172,081 | $ 174,281 | $ 800,414 | $ 687,787 | $ 663,945 |
Advanced Surgical, Orthopaedics, and Portable Medical [Member] | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 243,385 | 216,339 | 208,990 | ||||||||
Cardio And Vascular [Member] | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 143,260 | 58,770 | 48,357 | ||||||||
Cardiac/Neuromodulation [Member] | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 356,064 | 330,921 | 328,455 | ||||||||
Electrochem [Member] | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 59,449 | 81,757 | 78,143 | ||||||||
Interproduct-Line Eliminations [Member] | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | (1,744) | 0 | 0 | ||||||||
Operating Segments [Member] | Greatbatch Medical [Member] | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 649,977 | 678,285 | 660,902 | ||||||||
Operating Segments [Member] | QiG [Member] | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 13,571 | 9,502 | 3,043 | ||||||||
Operating Segments [Member] | Lake Region Medical [Member] | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 139,819 | 0 | 0 | ||||||||
Intersegment Eliminations [Member] | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | $ (2,953) | $ 0 | $ 0 |
Business Segment, Geographic119
Business Segment, Geographic And Concentration Risk Information (Reconciliation of Segment Information) (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Segment Reporting Information [Line Items] | |||
Operating income as reported | $ 13,146 | $ 75,654 | $ 61,339 |
Unallocated other income (expense), net | (28,846) | 925 | (12,501) |
Income (loss) before provision for income taxes | (15,700) | 76,579 | 48,838 |
Total depreciation and amortization | 67,618 | 37,457 | 35,966 |
Expenditures for tangible long-lived assets, excluding acquisitions | 48,054 | 25,646 | 18,174 |
Total assets | 2,982,136 | 955,122 | 889,629 |
Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating income as reported | 67,466 | 103,056 | 81,321 |
Total depreciation and amortization | 64,271 | 34,007 | 32,651 |
Expenditures for tangible long-lived assets, excluding acquisitions | 41,606 | 20,459 | 15,376 |
Total assets | 2,838,317 | 837,754 | 814,614 |
Operating Segments [Member] | Greatbatch Medical [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating income as reported | 109,737 | 126,312 | 111,805 |
Total depreciation and amortization | 30,160 | 31,906 | 31,112 |
Expenditures for tangible long-lived assets, excluding acquisitions | 32,921 | 19,006 | 13,242 |
Total assets | 798,609 | 761,225 | 758,369 |
Operating Segments [Member] | QiG [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating income as reported | (25,855) | (23,256) | (30,484) |
Total depreciation and amortization | 1,862 | 2,101 | 1,539 |
Expenditures for tangible long-lived assets, excluding acquisitions | 1,160 | 1,453 | 2,134 |
Total assets | 68,637 | 76,529 | 56,245 |
Operating Segments [Member] | Lake Region Medical [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating income as reported | (16,416) | 0 | 0 |
Total depreciation and amortization | 32,249 | 0 | 0 |
Expenditures for tangible long-lived assets, excluding acquisitions | 7,525 | 0 | 0 |
Total assets | 1,971,071 | 0 | 0 |
Unallocated Amount to Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating income as reported | (54,320) | (27,402) | (19,982) |
Total depreciation and amortization | 3,347 | 3,450 | 3,315 |
Expenditures for tangible long-lived assets, excluding acquisitions | 6,448 | 5,187 | 2,798 |
Total assets | $ 143,819 | $ 117,368 | $ 75,015 |
Business Segment, Geographic120
Business Segment, Geographic And Concentration Risk Information (Sales by Geographic Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 01, 2016 | Oct. 02, 2015 | Jul. 03, 2015 | Apr. 03, 2015 | Jan. 02, 2015 | Oct. 03, 2014 | Jul. 04, 2014 | Apr. 04, 2014 | Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Total sales | $ 317,567 | $ 146,637 | $ 174,890 | $ 161,320 | $ 169,726 | $ 171,699 | $ 172,081 | $ 174,281 | $ 800,414 | $ 687,787 | $ 663,945 |
UNITED STATES [Member] | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Total sales | 401,380 | 312,539 | 325,090 | ||||||||
PUERTO RICO [Member] | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Total sales | 136,898 | 127,702 | 117,961 | ||||||||
BELGIUM [Member] | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Total sales | 62,546 | 65,308 | 67,155 | ||||||||
Rest Of World [Member] | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Total sales | $ 199,590 | $ 182,238 | $ 153,739 |
Business Segment, Geographic121
Business Segment, Geographic And Concentration Risk Information (Long lived Tangible Assets by Region) (Details) - USD ($) $ in Thousands | Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 |
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Long-lived tangible assets | $ 379,492 | $ 144,925 | $ 145,773 |
UNITED STATES [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Long-lived tangible assets | 264,556 | 113,851 | 116,484 |
Rest Of World [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Long-lived tangible assets | $ 114,936 | $ 31,074 | $ 29,289 |
Business Segment, Geographic122
Business Segment, Geographic And Concentration Risk Information (Significant Customers) (Details) - customer | 12 Months Ended | ||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Revenue, Major Customer [Line Items] | |||
Number of Customers | 4 | ||
Entity-Wide Revenue, Major Customer, Percentage | 52.00% | 54.00% | 56.00% |
Entity Wide Accounts Receivable, Major Customer, Percentage | 44.00% | 47.00% | |
Customer A [Member] | |||
Revenue, Major Customer [Line Items] | |||
Entity-Wide Revenue, Major Customer, Percentage | 18.00% | 18.00% | 16.00% |
Entity Wide Accounts Receivable, Major Customer, Percentage | 23.00% | 23.00% | |
Customer B [Member] | |||
Revenue, Major Customer [Line Items] | |||
Entity-Wide Revenue, Major Customer, Percentage | 17.00% | 18.00% | 20.00% |
Entity Wide Accounts Receivable, Major Customer, Percentage | 8.00% | 4.00% | |
Customer C [Member] | |||
Revenue, Major Customer [Line Items] | |||
Entity-Wide Revenue, Major Customer, Percentage | 12.00% | 12.00% | 13.00% |
Entity Wide Accounts Receivable, Major Customer, Percentage | 6.00% | 8.00% | |
Customer D [Member] | |||
Revenue, Major Customer [Line Items] | |||
Entity-Wide Revenue, Major Customer, Percentage | 5.00% | 6.00% | 7.00% |
Entity Wide Accounts Receivable, Major Customer, Percentage | 7.00% | 12.00% | |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | |||
Revenue, Major Customer [Line Items] | |||
Number of Customers | 4 | 4 | 4 |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||
Revenue, Major Customer [Line Items] | |||
Number of Customers | 4 | 4 |
Quarterly Sales and Earnings123
Quarterly Sales and Earnings Data - Unaudited (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 01, 2016 | Oct. 02, 2015 | Jul. 03, 2015 | Apr. 03, 2015 | Jan. 02, 2015 | Oct. 03, 2014 | Jul. 04, 2014 | Apr. 04, 2014 | Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |
Business Acquisition [Line Items] | |||||||||||
Sales | $ 317,567 | $ 146,637 | $ 174,890 | $ 161,320 | $ 169,726 | $ 171,699 | $ 172,081 | $ 174,281 | $ 800,414 | $ 687,787 | $ 663,945 |
Gross profit | 73,140 | 51,646 | 57,951 | 52,398 | 57,214 | 58,118 | 58,470 | 57,596 | 235,135 | 231,398 | 219,313 |
Net income (loss) | $ (24,907) | $ 22 | $ 9,283 | $ 8,008 | $ 14,176 | $ 14,012 | $ 12,348 | $ 14,922 | $ (7,594) | $ 55,458 | $ 36,267 |
Earnings Per Share, Basic (in dollars per share) | $ (0.85) | $ 0 | $ 0.36 | $ 0.32 | $ 0.57 | $ 0.56 | $ 0.50 | $ 0.61 | $ (0.29) | $ 2.23 | $ 1.51 |
Earnings Per Share, Diluted (in dollars per share) | $ (0.85) | $ 0 | $ 0.35 | $ 0.31 | $ 0.54 | $ 0.54 | $ 0.48 | $ 0.58 | $ (0.29) | $ 2.14 | $ 1.43 |
Lake Region Medical [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual | $ 138,600 | $ 138,600 | |||||||||
Spinoff [Member] | Lake Region Medical [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Transaction costs | $ 57,100 | $ 13,000 |
Valuation and Qualifying Acc124
Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Jan. 01, 2016 | Jan. 02, 2015 | Jan. 03, 2014 | |||||
Allowance for Doubtful Accounts [Member] | |||||||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||||||
Balance at Beginning of Period | $ 1,411 | $ 2,001 | $ 2,372 | ||||
Charged to Costs & Expenses | (70) | 98 | (93) | ||||
Charged to Other Accounts | [2] | 459 | [1] | 14 | (15) | [1] | |
Deductions | [3] | (846) | (702) | (263) | |||
Balance at End of Period | 954 | 1,411 | 2,001 | ||||
Valuation Allowance of Deferred Tax Assets [Member] | |||||||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||||||
Balance at Beginning of Period | 10,709 | 11,661 | 12,768 | ||||
Charged to Costs & Expenses | [4] | 788 | (729) | (1,263) | |||
Charged to Other Accounts | [2] | 27,836 | 0 | 32 | |||
Deductions | (162) | [4],[5] | (223) | [4] | 124 | [5] | |
Balance at End of Period | $ 39,171 | $ 10,709 | $ 11,661 | ||||
[1] | Balance recorded as a part of our 2015 acquisition of Lake Region Medical and our 2014 acquisition of Centro de Construcción de Cardioestimuladores del Uruguay | ||||||
[2] | Includes foreign currency translation effect. | ||||||
[3] | Accounts written off. | ||||||
[4] | Valuation allowance recorded in the provision for income taxes for certain net operating losses and tax credits. The net decrease in allowance in 2014 and 2013 primarily relates to the use of net operating loss carryforwards. | ||||||
[5] | Primarily relates to return to provision adjustments for prior years. |