DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION | 6 Months Ended |
Jul. 01, 2016shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | Colfax CORP |
Entity Central Index Key | 1,420,800 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Trading Symbol | CFX |
Entity Common Stock, Shares Outstanding | 122,659,511 |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Jul. 1, 2016 |
Document Fiscal Period Focus | Q2 |
Document Fiscal Year Focus | 2,016 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2016 | Jun. 26, 2015 | Jul. 01, 2016 | Jun. 26, 2015 | |
Income Statement [Abstract] | ||||
Net sales | $ 957,249 | $ 1,025,375 | $ 1,834,092 | $ 1,936,445 |
Cost of sales | 656,144 | 697,338 | 1,252,466 | 1,313,970 |
Gross profit | 301,105 | 328,037 | 581,626 | 622,475 |
Selling, general and administrative expense | 213,553 | 222,629 | 427,940 | 435,861 |
Restructuring and other related charges | 14,490 | 8,834 | 32,158 | 12,587 |
Operating income | 73,062 | 96,574 | 121,528 | 174,027 |
Interest expense | 8,711 | 14,249 | 17,831 | 26,293 |
Income before income taxes | 64,351 | 82,325 | 103,697 | 147,734 |
Provision for income taxes | 20,388 | 23,496 | 33,524 | 32,630 |
Net income | 43,963 | 58,829 | 70,173 | 115,104 |
Less: income attributable to noncontrolling interest, net of taxes | 4,209 | 5,702 | 7,804 | 9,921 |
Net income attributable to Colfax Corporation | $ 39,754 | $ 53,127 | $ 62,369 | $ 105,183 |
Net income per share - basic | $ 0.32 | $ 0.43 | $ 0.51 | $ 0.85 |
Net income per share - diluted | $ 0.32 | $ 0.42 | $ 0.51 | $ 0.84 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 01, 2016 | Jun. 26, 2015 | Jul. 01, 2016 | Jun. 26, 2015 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net income | $ 43,963 | $ 58,829 | $ 70,173 | $ 115,104 | |
Other comprehensive (loss) income: | |||||
Foreign currency translation, net of tax of $2,190, $0, $2,436 and $0 | (134,022) | 117,484 | (154,064) | (72,241) | |
Unrealized gain (loss) on hedging activities, net of tax of $1,181, $11,638, $(1,699) and $14,428 | 4,233 | (9,922) | (5,320) | 12,259 | |
Changes in deferred tax related to pension and other post-retirement benefit cost | 0 | 1,707 | 0 | 3,817 | |
Amounts reclassified from Accumulated other comprehensive loss: | |||||
Net pension and other post-retirement benefit cost, net of tax of $801, $1,733, $1,498 and $2,671 | [1] | 1,308 | 1,858 | 2,708 | 4,074 |
Other comprehensive (loss) income | (128,481) | 111,127 | (156,676) | (52,091) | |
Comprehensive (loss) income | (84,518) | 169,956 | (86,503) | 63,013 | |
Less: comprehensive income attributable to noncontrolling interest | 2,001 | 4,013 | 9,028 | 5,356 | |
Comprehensive (loss) income attributable to Colfax Corporation | $ (86,519) | $ 165,943 | $ (95,531) | $ 57,657 | |
[1] | Included in the computation of net periodic benefit (income) cost. See Note 10, “Net Periodic Benefit Cost - Defined Benefit Plans” for additional details. |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME [Parenthetical] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 01, 2016 | Jun. 26, 2015 | Jul. 01, 2016 | Jun. 26, 2015 | ||
Statement of Comprehensive Income [Abstract] | |||||
Foreign currency translation, tax | $ 2,190 | $ 0 | $ 2,436 | $ 0 | |
Unrealized gain (loss) on hedging activities, tax | 1,181 | 11,638 | (1,699) | 14,428 | |
Net pension and other post-retirement benefit cost, tax | [1] | $ 801 | $ 1,733 | $ 1,498 | $ 2,671 |
[1] | Included in the computation of net periodic benefit (income) cost. See Note 10, “Net Periodic Benefit Cost - Defined Benefit Plans” for additional details. |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2015 |
ASSETS | ||
Cash and cash equivalents | $ 184,672 | $ 197,469 |
Trade receivables, less allowance for doubtful accounts of $43,850 and $39,505 | 906,336 | 888,166 |
Inventories, net | 432,246 | 420,386 |
Other current assets | 263,806 | 253,744 |
Total current assets | 1,787,060 | 1,759,765 |
Property, plant and equipment, net | 635,351 | 644,536 |
Goodwill | 2,665,963 | 2,817,687 |
Intangible assets, net | 959,308 | 995,712 |
Other assets | 528,478 | 515,219 |
Total assets | 6,576,160 | 6,732,919 |
LIABILITIES AND EQUITY | ||
Current portion of long-term debt | 5,611 | 5,792 |
Accounts payable | 679,137 | 718,893 |
Accrued liabilities | 403,156 | 391,659 |
Total current liabilities | 1,087,904 | 1,116,344 |
Long-term debt, less current portion | 1,399,851 | 1,411,755 |
Other liabilities | 930,368 | 948,264 |
Total liabilities | 3,418,123 | 3,476,363 |
Equity: | ||
Common stock, $0.001 par value; 400,000,000 shares authorized; 122,659,511 and 123,486,425 issued and outstanding | 123 | 123 |
Additional paid-in capital | 3,189,835 | 3,199,267 |
Retained earnings | 619,669 | 557,300 |
Accumulated other comprehensive loss | (844,615) | (686,715) |
Total Colfax Corporation equity | 2,965,012 | 3,069,975 |
Noncontrolling interest | 193,025 | 186,581 |
Total equity | 3,158,037 | 3,256,556 |
Total liabilities and equity | $ 6,576,160 | $ 6,732,919 |
CONDENSED CONSOLIDATED BALANCE6
CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2015 |
Trade receivables, allowance for doubtful accounts | $ 43,850 | $ 39,505 |
Common Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 400,000,000 | 400,000,000 |
Common Stock, Shares, Issued | 122,659,511 | 123,486,425 |
Common Stock, Shares, Outstanding | 122,659,511 | 123,486,425 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENT OF EQUITY - 6 months ended Jul. 01, 2016 - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Noncontrolling Interest [Member] |
Balance at Dec. 31, 2015 | $ 3,256,556 | $ 123 | $ 3,199,267 | $ 557,300 | $ (686,715) | $ 186,581 |
Shares, Outstanding at Dec. 31, 2015 | 123,486,425 | |||||
Net income attributable to Colfax Corporation | 62,369 | 62,369 | ||||
Net income attributable to noncontrolling interest | 7,804 | 7,804 | ||||
Net income | 70,173 | |||||
Distributions to noncontrolling owners | (2,584) | (2,584) | ||||
Other comprehensive (loss) income, net of tax of $2.2 million | (156,676) | (157,900) | 1,224 | |||
Stock repurchase | $ (20,812) | $ (1) | (20,811) | |||
Stock repurchase (in shares) | (1,000,000) | (1,000,000) | ||||
Common stock-based award activity | $ 11,380 | $ 1 | 11,379 | |||
Common stock-based award activity (in shares) | 173,086 | |||||
Shares, Outstanding at Jul. 01, 2016 | 122,659,511 | |||||
Balance at Jul. 01, 2016 | $ 3,158,037 | $ 123 | $ 3,189,835 | $ 619,669 | $ (844,615) | $ 193,025 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENT OF EQUITY Statement of Stockholders' Equity [Parenthetical] $ in Millions | 6 Months Ended |
Jul. 01, 2016USD ($) | |
Statement of Stockholders' Equity [Parenthetical] [Abstract] | |
Other comprehensive (loss) income, tax | $ 2.2 |
CONDENSED CONSOLIDATED STATEME9
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 01, 2016 | Jun. 26, 2015 | |
Statement of Cash Flows [Abstract] | ||
Net income | $ 70,173 | $ 115,104 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, amortization and impairment charges | 74,001 | 71,113 |
Stock-based compensation expense | 10,967 | 8,716 |
Non-cash interest expense | 2,106 | 8,294 |
Deferred income tax (benefit) provision | (528) | 1,168 |
Changes in operating assets and liabilities: | ||
Trade receivables, net | (13,807) | (35,117) |
Inventories, net | (7,356) | (21,522) |
Accounts payable | (39,181) | (13,596) |
Changes in other operating assets and liabilities | (39,963) | (67,291) |
Net cash provided by operating activities | 56,412 | 66,869 |
Cash flows from investing activities: | ||
Purchases of fixed assets, net | (25,497) | (18,318) |
Net cash used in investing activities | (25,497) | (18,318) |
Cash flows from financing activities: | ||
Borrowings under term credit facility | 0 | 750,000 |
Payments under term credit facility | (18,750) | (1,214,122) |
Proceeds from borrowings on revolving credit facilities and other | 491,233 | 966,403 |
Repayments of borrowings on revolving credit facilities and other | (493,962) | (637,136) |
Proceeds from issuance of common stock, net | 413 | 2,987 |
Repurchases of common stock | (20,812) | 0 |
Other | (5,278) | (3,625) |
Net cash used in financing activities | (47,156) | (135,493) |
Effect of foreign exchange rates on Cash and cash equivalents | 3,444 | (6,296) |
Decrease in Cash and cash equivalents | (12,797) | (93,238) |
Cash and cash equivalents, beginning of period | 197,469 | 305,448 |
Cash and cash equivalents, end of period | $ 184,672 | $ 212,210 |
General (Text Block)
General (Text Block) | 6 Months Ended |
Jul. 01, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | General Colfax Corporation (the “Company” or “Colfax”) is a diversified global industrial manufacturing and engineering company that provides gas- and fluid-handling and fabrication technology products and services to customers around the world under the Howden, ESAB and Colfax Fluid Handling brand names. The Condensed Consolidated Financial Statements included in this quarterly report have been prepared by the Company in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements. The Condensed Consolidated Balance Sheet as of December 31, 2015 is derived from the Company’s audited financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted in accordance with the SEC’s rules and regulations for interim financial statements. The Condensed Consolidated Financial Statements included herein should be read in conjunction with the audited financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (the “ 2015 Form 10-K”), filed with the SEC on February 16, 2016 . The Condensed Consolidated Financial Statements reflect, in the opinion of management, all adjustments, which consist solely of normal recurring adjustments, necessary to present fairly the Company’s financial position and results of operations as of and for the periods indicated. Significant intercompany transactions and accounts are eliminated in consolidation. The Company makes certain estimates and assumptions in preparing its Condensed Consolidated Financial Statements in accordance with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses for the periods presented. Actual results may differ from those estimates. The results of operations for the three and six months ended July 1, 2016 are not necessarily indicative of the results of operations that may be achieved for the full year. Quarterly results are affected by seasonal variations in the Company’s business. As our gas- and fluid-handling customers seek to fully utilize capital spending budgets before the end of the year, historically our shipments have peaked during the fourth quarter. Also, all of our European operations typically experience a slowdown during the July and August and December holiday seasons. General economic conditions may, however, impact future seasonal variations. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements (Text Block) | 6 Months Ended |
Jul. 01, 2016 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU No. 2014-09”). ASU No. 2014-09 clarifies the principles for recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance affects entities that enter into contracts with customers to transfer goods or services, and supersedes prior GAAP guidance, namely Accounting Standards Codification Topic 605 — Revenue Recognition. ASU 2014-09 is to be applied on a full or modified retrospective basis. In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606) — Deferral of the Effective Date”, which delays the effective date of ASU No. 2014-09 by one year. As a result, ASU No. 2014-09 will be effective for fiscal years beginning after December 15, 2017, with early adoption permitted but not prior to the original effective date of annual periods beginning after December 15, 2016. During the six months ended July 1, 2016 , the FASB issued three additional Accounting Standards Updates that clarify the original guidance as laid out in ASU No. 2014-09. These Accounting Standards Updates focus on clarification of principal versus agent considerations, performance obligations and licensing, and provides for application of certain practical expedients and narrow-scope improvements. The Company plans to apply these Accounting Standards Updates on a full retrospective basis as of January 1, 2018 and is currently evaluating the impact on its Consolidated Financial Statements. In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330) — Simplifying the Measurement of Inventory” (“ASU No. 2015-11”). ASU No. 2015-11 requires an entity to measure inventory at the lower of cost and net realizable value, except for inventory that is measured using the last-in, first-out method or the retail inventory method. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. ASU No. 2015-11 is effective for fiscal years beginning after December 15, 2016 and is to be applied prospectively with early adoption permitted. The Company is currently evaluating the impact of adopting ASU No. 2015-11 on its Consolidated Financial Statements. In September 2015, the FASB issued ASU No. 2015-16, “Business Combinations (Topic 805) — Simplifying the Accounting for Measurement-Period Adjustments” (“ASU No. 2015-16”). ASU No. 2015-16 aims to simplify measurement period adjustments resulting from business combinations by requiring that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. 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, will be recorded in the same period’s financial statements as the measurement period adjustment. ASU No. 2015-16 is effective for fiscal years beginning after December 15, 2015, and is to be applied prospectively to adjustments to provisional amounts that occur after the effective date of ASU No. 2015-16. The adoption of ASU No. 2015-16 during the six months ended July 1, 2016 did not have a material impact on the Company’s Condensed Consolidated Financial Statements. See Note 3, “Acquisitions” for measurement period adjustments made during the six months ended July 1, 2016 , related to acquisitions that occurred during the year ended December 31, 2015 . In February 2016, the FASB issued Accounting Standards Update No. 2016-02, “Leases (Topic 842)” (“ASU No. 2016-02”). ASU No. 2016-02 requires a lessee to recognize assets and liabilities associated with the rights and obligations attributable to most leases but also recognize expenses similar to current lease accounting. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The new guidance must be adopted using a modified retrospective transition and provides for certain practical expedients. The Company is currently evaluating the impact of adopting ASU No. 2016-02 on its Consolidated Financial Statements. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, “Compensation - Stock Compensation (Topic 718) — Improvements to Employee Share-Based Payment Accounting” (“ASU No. 2016-09”). ASU No. 2016-09 is effective for fiscal periods beginning after December 15, 2016 with early adoption permitted. ASU No. 2016-09 aims to simplify the accounting for shared based payment accounting by recording all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement, eliminates the requirement that excess tax benefits be realized before they can be recognized, and provides the option to make an entity-wide accounting policy election to continue to estimate the amount of awards that are expected to vest or account for forfeitures as they occur. The effect for excess tax benefits not previously recognized will be recorded as a cumulative adjustment to retained earnings pursuant to a modified retrospective adoption method. Excess tax benefits and deficiencies will be accounted for as discrete items in the period the stock awards vest or otherwise are settled. Further, the guidance will require that excess tax benefits be presented as an operating activity on the statement of cash flows consistent with other income tax cash flows. ASU No. 2016-09 also increases share based withholding up to the maximum statutory tax rates in the applicable jurisdictions without causing the award to be classified as a liability. All provisions of ASU No. 2016-09 must be adopted in the same period. The Company plans to adopt ASU No. 2016-09 in the annual period beginning January 1, 2017. The Company is currently evaluating the impact of adopting ASU No. 2016-09 on its Consolidated Financial Statements. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU No. 2016-13”). ASU No. 2016-13 is effective for fiscal periods beginning after December 15, 2019 with early adoption permitted. ASU No. 2016-13 eliminates the probable initial recognition threshold under current U.S. GAAP and broadens the information an entity must consider when developing its expected credit loss estimates to include forecast information that affects the collectibility of the reported amount. The Company is currently evaluating the impact of adopting ASU No. 2016-13 on its Consolidated Financial Statements. |
Acquisitions (Notes)
Acquisitions (Notes) | 6 Months Ended |
Jul. 01, 2016 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | Acquisitions The Company completed the acquisitions of the Roots TM blowers and compressors business unit, also known as Industrial Air & Gas Technologies, from GE Oil & Gas (“Roots”) on June 30, 2015 , and Simsmart Technologies, Inc . (“Simsmart”) on October 5, 2015 . During the six months ended July 1, 2016 the Company adjusted provisional amounts with respect to these acquisitions that were recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. The aggregate adjustments, primarily attributable to the Company’s valuation of inventory and revision of estimates based on additional information obtained for a specific environmental reserve increased the Goodwill balance by $1.3 million during the six months ended July 1, 2016 . The Company continues to evaluate the acquired assets and liabilities assumed for Simsmart during the measurement period as certain valuations and studies have yet to be finalized, and accordingly, the assets acquired and liabilities assumed are subject to adjustment once the detailed analyses are complete. |
Net Income Per Share (Text Bloc
Net Income Per Share (Text Block) | 6 Months Ended |
Jul. 01, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | Net Income Per Share Net income per share was computed as follows: Three Months Ended Six Months Ended July 1, 2016 June 26, 2015 July 1, 2016 June 26, 2015 (In thousands, except share data) Computation of Net income per share - basic: Net income attributable to Colfax Corporation $ 39,754 $ 53,127 $ 62,369 $ 105,183 Weighted-average shares of Common stock outstanding - basic 122,827,512 124,250,487 122,958,853 124,103,220 Net income per share - basic $ 0.32 $ 0.43 $ 0.51 $ 0.85 Computation of Net income per share - diluted: Net income attributable to Colfax Corporation $ 39,754 $ 53,127 $ 62,369 $ 105,183 Weighted-average shares of Common stock outstanding - basic 122,827,512 124,250,487 122,958,853 124,103,220 Net effect of potentially dilutive securities - stock options and restricted stock units 208,945 1,011,251 184,584 1,078,247 Weighted-average shares of Common stock outstanding - diluted 123,036,457 125,261,738 123,143,437 125,181,467 Net income per share - diluted $ 0.32 $ 0.42 $ 0.51 $ 0.84 The weighted-average computation of the dilutive effect of potentially issuable shares of Common stock under the treasury stock method for the three months ended July 1, 2016 and June 26, 2015 excludes approximately 5.2 million and 2.2 million of outstanding stock-based compensation awards, respectively, as their inclusion would be anti-dilutive. The weighted-average computation of the dilutive effect of potentially issuable shares of Common stock under the treasury stock method for the six months ended July 1, 2016 and June 26, 2015 excludes approximately 5.1 million and 2.1 million of outstanding stock-based compensation awards, respectively, as their inclusion would be anti-dilutive. |
Income Taxes (Text Block)
Income Taxes (Text Block) | 6 Months Ended |
Jul. 01, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Income Taxes During the three and six months ended July 1, 2016 , Income before income taxes was $64.4 million and $103.7 million , respectively, while the Provision for income taxes was $20.4 million and $33.5 million , respectively. The effective tax rates were 31.7% and 32.3% for the three and six months ended July 1, 2016 , respectively, which differ from the U.S. federal statutory rate primarily due to international tax rates, which are lower than the U.S. tax rate, offset in part by losses in certain jurisdictions where a tax benefit is not expected to be recognized in 2016 . During the three and six months ended June 26, 2015 , Income before income taxes was $82.3 million and $147.7 million , respectively, while the Provision for income taxes was $23.5 million and $32.6 million , respectively. The effective tax rate was 28.5% for the three months ended June 26, 2015 , which differs from the U.S. federal statutory rate primarily due to international tax rates, which are lower than the U.S. tax rate, offset in part by losses in certain jurisdictions where a tax benefit was not expected to be recognized in 2015 . The effective tax rate was 22.1% for the six months ended June 26, 2015 , which differs from the U.S. federal statutory rate primarily due to a tax benefit of $13.0 million associated with the resolution of certain liabilities for unrecognized tax benefits and international tax rates, which are lower than the U.S. tax rate, offset in part by losses in certain jurisdictions where a tax benefit was not expected to be recognized in 2015 . |
Equity (Text Block)
Equity (Text Block) | 6 Months Ended |
Jul. 01, 2016 | |
Equity [Abstract] | |
Shareholders' Equity and Share-based Payments [Text Block] | Equity Share Repurchase Program On October 11, 2015, the Company’s Board of Directors authorized the repurchase of up to $100.0 million of the Company’s Common stock from time-to-time on the open market or in privately negotiated transactions. The repurchase program is authorized until December 31, 2016. The timing and amount of shares repurchased is to be determined by management based on its evaluation of market conditions and other factors. During the six months ended July 1, 2016 , the Company repurchased 1,000,000 shares of its Common stock in open market transactions for approximately $20.8 million under a plan complying with Rule 10b5-1 under the Securities Exchange Act of 1934. As of July 1, 2016 , the remaining stock repurchase authorization provided by the Company’s Board of Directors is approximately $52 million . Share-Based Payments On May 13, 2016, the Company’s Board of Directors and stockholders approved the Colfax Corporation 2016 Omnibus Incentive Plan (the “2016 Plan”). Under the 2016 Plan, the Company has reserved up to 10.5 million shares of Common stock for potential issuance as stock-based awards. Upon approval of the 2016 Plan, awards are no longer granted under the previously existing Colfax Corporation Omnibus Incentive Plan, as amended and restated on April 2, 2012. Accumulated Other Comprehensive Loss The following tables present the changes in the balances of each component of Accumulated other comprehensive loss including reclassifications out of Accumulated other comprehensive loss for the six months ended July 1, 2016 and June 26, 2015 . All amounts are net of tax and noncontrolling interest. Accumulated Other Comprehensive Loss Components Net Unrecognized Pension And Other Post-Retirement Benefit Cost Foreign Currency Translation Adjustment Unrealized Gain On Hedging Activities Total (In thousands) Balance at January 1, 2016 $ (193,258 ) $ (528,620 ) $ 35,163 $ (686,715 ) Other comprehensive income (loss) before reclassifications: Foreign currency translation adjustment 468 (131,583 ) 779 (130,336 ) Loss on long-term intra-entity foreign currency transactions — (25,021 ) — (25,021 ) Loss on net investment hedges — — (5,705 ) (5,705 ) Unrealized gain on cash flow hedges — — 454 454 Other comprehensive income (loss) before reclassifications 468 (156,604 ) (4,472 ) (160,608 ) Amounts reclassified from Accumulated other comprehensive loss 2,708 — — 2,708 Net current period Other comprehensive income (loss) 3,176 (156,604 ) (4,472 ) (157,900 ) Balance at July 1, 2016 $ (190,082 ) $ (685,224 ) $ 30,691 $ (844,615 ) Accumulated Other Comprehensive Loss Components Net Unrecognized Pension And Other Post-Retirement Benefit Cost Foreign Currency Translation Adjustment Unrealized Gain On Hedging Activities Total (In thousands) Balance at January 1, 2015 $ (240,513 ) $ (227,059 ) $ 23,881 $ (443,691 ) Other comprehensive income (loss) before reclassifications: Foreign currency translation adjustment 4,530 (76,639 ) (155 ) (72,264 ) Gain on long-term intra-entity foreign currency transactions — 4,620 — 4,620 Gain on net investment hedges — — 10,212 10,212 Unrealized gain on cash flow hedges — — 2,015 2,015 Other 3,817 — — 3,817 Other comprehensive income (loss) before reclassifications 8,347 (72,019 ) 12,072 (51,600 ) Amounts reclassified from Accumulated other comprehensive loss 4,074 — — 4,074 Net current period Other comprehensive income (loss) 12,421 (72,019 ) 12,072 (47,526 ) Balance at June 26, 2015 $ (228,092 ) $ (299,078 ) $ 35,953 $ (491,217 ) The effect on Net income of amounts reclassified out of each component of Accumulated other comprehensive loss for the three and six months ended July 1, 2016 and June 26, 2015 is as follows: Three Months Ended July 1, 2016 Six Months Ended July 1, 2016 Amounts Reclassified From Accumulated Other Comprehensive Loss Tax Benefit Total Amounts Reclassified From Accumulated Other Comprehensive Loss Tax Benefit Total (In thousands) Pension and other post-retirement benefit cost: Amortization of net loss (1) $ 2,047 $ (775 ) $ 1,272 $ 4,082 $ (1,450 ) $ 2,632 Amortization of prior service cost (1) 62 (26 ) 36 124 (48 ) 76 $ 2,109 $ (801 ) $ 1,308 $ 4,206 $ (1,498 ) $ 2,708 Three Months Ended June 26, 2015 Six Months Ended June 26, 2015 Amounts Reclassified From Accumulated Other Comprehensive Loss Tax Benefit Total Amounts Reclassified From Accumulated Other Comprehensive Loss Tax Benefit Total (In thousands) Pension and other post-retirement benefit cost: Amortization of net loss (1) $ 3,522 $ (1,733 ) $ 1,789 $ 6,614 $ (2,671 ) $ 3,943 Amortization of prior service cost (1) 69 — 69 131 — 131 $ 3,591 $ (1,733 ) $ 1,858 $ 6,745 $ (2,671 ) $ 4,074 (1) Included in the computation of net periodic benefit (income) cost. See Note 10 , “Net Periodic Benefit Cost - Defined Benefit Plans” for additional details. During the six months ended July 1, 2016 , Noncontrolling interest increased by $1.2 million as a result of Other comprehensive income, primarily due to foreign currency translation adjustment. During the six months ended June 26, 2015 , Noncontrolling interest decreased by $4.6 million as a result of Other comprehensive loss, primarily due to foreign currency translation adjustment. |
Inventories, Net (Text Block)
Inventories, Net (Text Block) | 6 Months Ended |
Jul. 01, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | Inventories, Net Inventories, net consisted of the following: July 1, 2016 December 31, 2015 (In thousands) Raw materials $ 154,122 $ 160,640 Work in process 84,952 68,541 Finished goods 256,344 243,209 495,418 472,390 Less: customer progress payments (16,390 ) (15,876 ) Less: allowance for excess, slow-moving and obsolete inventory (46,782 ) (36,128 ) Inventories, net $ 432,246 $ 420,386 |
Debt (Text Block)
Debt (Text Block) | 6 Months Ended |
Jul. 01, 2016 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Debt Long-term debt consisted of the following: July 1, 2016 December 31, 2015 (In thousands) Term loans $ 695,751 $ 713,175 Trade receivables financing arrangement 83,124 75,800 Revolving credit facilities and other 626,587 628,572 Total Debt 1,405,462 1,417,547 Less: current portion (5,611 ) (5,792 ) Long-term debt $ 1,399,851 $ 1,411,755 The Company is party to a credit agreement by and among the Company, as the borrower, certain U.S. subsidiaries of the Company identified therein, as guarantors, each of the lenders party thereto and Deutsche Bank AG New York Branch, as administrative agent, swing line lender and global coordinator (the “Credit Agreement”). The Company had an original issue discount of $6.4 million and deferred financing fees of $7.1 million included in its Condensed Consolidated Balance Sheet as of July 1, 2016 , which will be accreted to Interest expense, primarily using the effective interest method, over the life of the Credit Agreement. As of July 1, 2016 , the weighted-average interest rate of borrowings under the Credit Agreement was 1.87% , excluding accretion of original issue discount, and there was $771.8 million available on the revolving credit facility. The Company is also party to letter of credit facilities with total capacity of $743.3 million . Total letters of credit of $348.2 million were outstanding as of July 1, 2016 . The Company is party to a receivables financing facility through a wholly-owned, special purpose bankruptcy-remote subsidiary which purchases trade receivables from certain of the Company’s subsidiaries on an ongoing basis and pledges them to support its obligation as borrower under the receivables financing facility. This special purpose subsidiary has a separate legal existence from its parent and its assets are not available to satisfy the claims of creditors of the selling subsidiaries or any other member of the consolidated group. Availability of funds may fluctuate over time given changes in eligible receivable balances, but will not exceed the program limit of $95 million . As of July 1, 2016 , the total outstanding borrowings under the receivables financing facility were $83.1 million and the interest rate was 1.29% . The scheduled termination date for the receivables financing facility is December 20, 2016 and may be extended from time to time. As of July 1, 2016, the Company is in compliance with the covenants under the Credit Agreement. |
Accrued Liabilities (Text Block
Accrued Liabilities (Text Block) | 6 Months Ended |
Jul. 01, 2016 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities Disclosure [Text Block] | Accrued Liabilities Accrued liabilities in the Condensed Consolidated Balance Sheets consisted of the following: July 1, 2016 December 31, 2015 (In thousands) Accrued payroll $ 108,459 $ 99,383 Advance payment from customers 42,583 45,590 Accrued taxes 47,214 51,834 Accrued asbestos-related liability 52,470 48,780 Warranty liability - current portion 36,172 36,128 Accrued restructuring liability - current portion 14,380 12,918 Accrued third-party commissions 9,333 10,275 Other 92,545 86,751 Accrued liabilities $ 403,156 $ 391,659 Warranty Liability The activity in the Company’s warranty liability consisted of the following: Six Months Ended July 1, 2016 June 26, 2015 (In thousands) Warranty liability, beginning of period $ 37,407 $ 51,135 Accrued warranty expense 13,750 8,685 Changes in estimates related to pre-existing warranties 2,322 (2,696 ) Cost of warranty service work performed (16,839 ) (12,641 ) Foreign exchange translation effect 705 (2,013 ) Warranty liability, end of period $ 37,345 $ 42,470 Accrued Restructuring Liability The Company’s restructuring programs include a series of restructuring actions to reduce the structural costs of the Company. A summary of the activity in the Company’s restructuring liability included in Accrued liabilities and Other liabilities in the Condensed Consolidated Balance Sheets is as follows: Six Months Ended July 1, 2016 Balance at Beginning of Period Provisions Payments Foreign Currency Translation Balance at End of Period (3) (In thousands) Restructuring and other related charges: Gas and Fluid Handling: Termination benefits (1) $ 3,979 $ 13,326 $ (7,405 ) $ (24 ) $ 9,876 Facility closure costs (2) 2,657 3,489 (6,007 ) 106 245 6,636 16,815 (13,412 ) 82 10,121 Non-cash charges 874 17,689 Fabrication Technology: Termination benefits (1) 6,031 10,396 (13,291 ) (38 ) 3,098 Facility closure costs (2) 426 2,761 (1,884 ) (35 ) 1,268 6,457 13,157 (15,175 ) (73 ) 4,366 Non-cash charges 1,312 14,469 Corporate and Other: Facility closure costs (2) 625 — (138 ) (53 ) 434 625 — (138 ) (53 ) 434 $ 13,718 29,972 $ (28,725 ) $ (44 ) $ 14,921 Non-cash charges 2,186 $ 32,158 (1) Includes severance and other termination benefits, including outplacement services. The Company recognizes the cost of involuntary termination benefits at the communication date or ratably over any remaining expected future service period. Voluntary termination benefits are recognized as a liability and an expense when employees accept the offer and the amount can be reasonably estimated. (2) Includes the cost of relocating associates, relocating equipment and lease termination expense in connection with the closure of facilities. (3) As of July 1, 2016 , $14.4 million and $0.5 million of the Company’s restructuring liability was included in Accrued liabilities and Other liabilities, respectively. The Company expects to incur restructuring and other related charges of approximately $48 million during the remainder of 2016 related to these restructuring activities. |
Net Periodic Benefit Cost-Defin
Net Periodic Benefit Cost-Defined Benefit Plans (Text Block) | 6 Months Ended |
Jul. 01, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | Net Periodic Benefit Cost - Defined Benefit Plans The following table sets forth the components of net periodic benefit (income) cost of the Company’s defined benefit pension plans and other post-retirement employee benefit plans: Three Months Ended Six Months Ended July 1, 2016 June 26, 2015 July 1, 2016 June 26, 2015 (In thousands) Pension Benefits - U.S. Plans: Service cost $ 48 $ — $ 96 $ — Interest cost 4,353 4,288 8,705 8,581 Expected return on plan assets (6,120 ) (6,019 ) (12,241 ) (12,039 ) Amortization 1,619 1,898 3,234 3,799 Net periodic benefit (income) cost $ (100 ) $ 167 $ (206 ) $ 341 Pension Benefits-Non U.S. Plans: Service cost $ 856 $ 818 $ 1,691 $ 2,025 Interest cost 8,716 9,777 17,160 19,536 Expected return on plan assets (7,979 ) (9,153 ) (16,200 ) (17,809 ) Amortization 426 1,501 844 2,579 Net periodic benefit cost $ 2,019 $ 2,943 $ 3,495 $ 6,331 Other Post-Retirement Benefits: Service cost $ 15 $ 51 $ 31 $ 102 Interest cost 313 313 625 639 Amortization 64 192 128 367 Net periodic benefit cost $ 392 $ 556 $ 784 $ 1,108 |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements (Text Block) | 6 Months Ended |
Jul. 01, 2016 | |
Financial Instruments and Fair Value Measurements [Abstract] | |
Fair Value Assets and Liabilities Measured On Recurring and Nonrecurring Basis [Text Block] | Financial Instruments and Fair Value Measurements The carrying values of financial instruments, including Trade receivables and Accounts payable, approximate their fair values due to their short-term maturities. The estimated fair value of the Company’s debt of $1.4 billion as of both July 1, 2016 and December 31, 2015 was based on current interest rates for similar types of borrowings and is in Level Two of the fair value hierarchy. The estimated fair values may not represent actual values of the financial instruments that could be realized as of the balance sheet date or that will be realized in the future. A summary of the Company’s assets and liabilities that are measured at fair value for each fair value hierarchy level for the periods presented is as follows: July 1, 2016 Level Level Level Total (In thousands) Assets: Cash equivalents $ 21,322 $ — $ — $ 21,322 Foreign currency contracts related to sales - designated as hedges — 2,033 — 2,033 Foreign currency contracts related to sales - not designated as hedges — 658 — 658 Foreign currency contracts related to purchases - designated as hedges — 4,271 — 4,271 Foreign currency contracts related to purchases - not designated as hedges — 161 — 161 Deferred compensation plans — 4,034 — 4,034 $ 21,322 $ 11,157 $ — $ 32,479 Liabilities: Foreign currency contracts related to sales - designated as hedges $ — $ 9,670 $ — $ 9,670 Foreign currency contracts related to sales - not designated as hedges — 515 — 515 Foreign currency contracts related to purchases - designated as hedges — 580 — 580 Foreign currency contracts related to purchases - not designated as hedges — 467 — 467 Deferred compensation plans — 4,034 — 4,034 $ — $ 15,266 $ — $ 15,266 December 31, 2015 Level Level Level Total (In thousands) Assets: Cash equivalents $ 22,516 $ — $ — $ 22,516 Foreign currency contracts related to sales - designated as hedges — 988 — 988 Foreign currency contracts related to sales - not designated as hedges — 664 — 664 Foreign currency contracts related to purchases - designated as hedges — 1,554 — 1,554 Foreign currency contracts related to purchases - not designated as hedges — 338 — 338 Deferred compensation plans — 4,000 — 4,000 $ 22,516 $ 7,544 $ — $ 30,060 Liabilities: Foreign currency contracts related to sales - designated as hedges $ — $ 6,368 $ — $ 6,368 Foreign currency contracts related to sales - not designated as hedges — 969 — 969 Foreign currency contracts related to purchases - designated as hedges — 322 — 322 Foreign currency contracts related to purchases - not designated as hedges — 128 — 128 Deferred compensation plans — 4,000 — 4,000 $ — $ 11,787 $ — $ 11,787 There were no transfers in or out of Level One, Two or Three during the six months ended July 1, 2016 . Foreign Currency Contracts As of July 1, 2016 and December 31, 2015 , the Company had foreign currency contracts with the following notional values: July 1, 2016 December 31, 2015 (In thousands) Foreign currency contracts sold - not designated as hedges $ 87,767 $ 119,653 Foreign currency contracts sold - designated as hedges 187,661 206,366 Foreign currency contracts purchased - not designated as hedges 33,021 41,480 Foreign currency contracts purchased - designated as hedges 67,351 62,794 Total foreign currency derivatives $ 375,800 $ 430,293 The Company recognized the following in its Condensed Consolidated Financial Statements related to its derivative instruments: Three Months Ended Six Months Ended July 1, 2016 June 26, 2015 July 1, 2016 June 26, 2015 (In thousands) Contracts Designated as Hedges: Foreign Currency Contracts - related to customer sales contracts: Unrealized gain $ 2,063 $ 6,267 $ 858 $ 508 Realized (loss) gain (4,741 ) 3,050 (2,372 ) 3,502 Foreign Currency Contracts - related to supplier purchase contracts: Unrealized (loss) gain (894 ) 2,229 (1,241 ) (324 ) Realized gain (loss) 2,678 (3,263 ) 2,711 (1,950 ) Unrealized gain (loss) on net investment hedges (1) 4,868 (18,473 ) (5,705 ) 10,212 Contracts Not Designated in a Hedge Relationship: Foreign Currency Contracts - related to customer sales contracts: Unrealized (loss) gain (1,581 ) 1,746 447 2,272 Realized (loss) (78 ) (535 ) (91 ) (4,261 ) Foreign Currency Contracts - related to supplier purchases contracts: Unrealized gain (loss) 520 531 (516 ) 387 Realized (loss) gain (225 ) (165 ) (261 ) 414 (1) The unrealized gain (loss) on net investment hedges is attributable to the change in valuation of Euro denominated debt. |
Commitments and Contingencies (
Commitments and Contingencies (Text Block) | 6 Months Ended |
Jul. 01, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Commitments and Contingencies For further description of the Company’s litigation and contingencies, reference is made to Note 15, “Commitments and Contingencies” in the Notes to Consolidated Financial Statements in our 2015 Form 10-K. Asbestos and Other Product Liability Contingencies Claims activity since December 31 related to asbestos claims is as follows (1) : Six Months Ended July 1, 2016 June 26, 2015 (Number of claims) Claims unresolved, beginning of period 20,583 21,681 Claims filed (2) 2,908 2,502 Claims resolved (3) (2,283 ) (2,180 ) Claims unresolved, end of period 21,208 22,003 (1) Excludes claims filed by one legal firm that have been “administratively dismissed.” (2) Claims filed include all asbestos claims for which notification has been received or a file has been opened. (3) Claims resolved include all asbestos claims that have been settled, dismissed or that are in the process of being settled or dismissed based upon agreements or understandings in place with counsel for the claimants. The Company’s Condensed Consolidated Balance Sheets included the following amounts related to asbestos-related litigation: July 1, 2016 December 31, 2015 (In thousands) Current asbestos insurance asset (1) $ 29,678 $ 28,872 Long-term asbestos insurance asset (2) 271,238 284,095 Long-term asbestos insurance receivable (2) 112,428 96,007 Accrued asbestos liability (3) 52,470 48,780 Long-term asbestos liability (4) 335,028 350,394 (1) Included in Other current assets in the Condensed Consolidated Balance Sheets. (2) Included in Other assets in the Condensed Consolidated Balance Sheets. (3) Represents current reserves for probable and reasonably estimable asbestos-related liability cost that the Company believes its subsidiaries will pay through the next 15 years, overpayments by certain insurers and unpaid legal costs related to defending themselves against asbestos-related liability claims and legal action against the Company’s insurers, which is included in Accrued liabilities in the Condensed Consolidated Balance Sheets. (4)) Included in Other liabilities in the Condensed Consolidated Balance Sheets. Management’s analyses are based on currently known facts and a number of assumptions. However, projecting future events, such as new claims to be filed each year, the average cost of resolving each claim, coverage issues among layers of insurers, the method in which losses will be allocated to the various insurance policies, interpretation of the effect on coverage of various policy terms and limits and their interrelationships, the continuing solvency of various insurance companies, the amount of remaining insurance available, as well as the numerous uncertainties inherent in asbestos litigation could cause the actual liabilities and insurance recoveries to be higher or lower than those projected or recorded which could materially affect the Company’s financial condition, results of operations or cash flow. Other Litigation Matters The Lincoln Electric Company and Lincoln Global, Inc. (collectively, “Lincoln Electric”) filed suit against The ESAB Group, Inc. and ESAB AB in the United States District Court, Eastern District of Texas, alleging infringement of certain patents allegedly owned by Lincoln Electric. The complaint, as amended, seeks undisclosed damages plus interest, an award of attorneys’ fees and expenses, and injunctive relief. The defendants answered the complaint, denying Lincoln Electric’s infringement allegations and asserting affirmative defenses, on October 20, 2015. The litigation is in an early stage, and is not expected to have a material adverse effect on the financial condition, results of operations or cash flow of the Company. The defendants are vigorously defending against the claims. The Company is also involved in various other pending legal proceedings arising out of the ordinary course of the Company’s business. None of these legal proceedings are expected to have a material adverse effect on the financial condition, results of operations or cash flow of the Company. With respect to these proceedings and the litigation and claims described in the preceding paragraphs, management of the Company believes that it will either prevail, has adequate insurance coverage or has established appropriate accruals to cover potential liabilities. Any costs that management estimates may be paid related to these proceedings or claims are accrued when the liability is considered probable and the amount can be reasonably estimated. There can be no assurance, however, as to the ultimate outcome of any of these matters, and if all or substantially all of these legal proceedings were to be determined adverse to the Company, there could be a material adverse effect on the financial condition, results of operations or cash flow of the Company. |
Segment Information (Text Block
Segment Information (Text Block) | 6 Months Ended |
Jul. 01, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | Segment Information The Company conducts its operations through three operating segments: gas handling, fluid handling and fabrication technology. The gas-handling and fluid-handling operating segments are aggregated into a single reportable segment. A description of the Company’s reportable segments is as follows: ▪ Gas and Fluid Handling - a global supplier of a broad range of gas- and fluid-handling products, including heavy-duty centrifugal and axial fans, rotary heat exchangers, gas compressors, pumps, fluid-handling systems, controls and specialty valves, which serves customers in the power generation, oil, gas and petrochemical, mining, marine (including defense) and general industrial and other end markets; and ▪ Fabrication Technology - a global supplier of welding equipment and consumables, cutting equipment and consumables and automated welding and cutting systems. Certain amounts not allocated to the two reportable segments and intersegment eliminations are reported under the heading “Corporate and other.” The Company’s management evaluates the operating results of each of its reportable segments based upon Net sales and segment operating income (loss), which represents Operating income (loss) before Restructuring and other related charges. The Company’s segment results were as follows: Three Months Ended Six Months Ended July 1, 2016 June 26, 2015 July 1, 2016 June 26, 2015 (In thousands) Net sales: Gas and fluid handling $ 483,692 $ 504,875 $ 916,430 $ 927,084 Fabrication technology 473,557 520,500 917,662 1,009,361 $ 957,249 $ 1,025,375 $ 1,834,092 $ 1,936,445 Segment operating income (loss) (1) : Gas and fluid handling $ 45,093 $ 64,206 $ 79,016 $ 100,463 Fabrication technology 54,471 53,874 100,356 111,220 Corporate and other (12,012 ) (12,672 ) (25,686 ) (25,069 ) $ 87,552 $ 105,408 $ 153,686 $ 186,614 (1) The following is a reconciliation of Income before income taxes to segment operating income: Three Months Ended Six Months Ended July 1, 2016 June 26, 2015 July 1, 2016 June 26, 2015 (In thousands) Income before income taxes $ 64,351 $ 82,325 $ 103,697 $ 147,734 Interest expense 8,711 14,249 17,831 26,293 Restructuring and other related charges 14,490 8,834 32,158 12,587 Segment operating income $ 87,552 $ 105,408 $ 153,686 $ 186,614 The detail of the Company’s Net sales by product type is as follows: Three Months Ended Six Months Ended July 1, 2016 June 26, 2015 July 1, 2016 June 26, 2015 (In thousands) Gas handling $ 367,560 $ 365,786 $ 689,162 $ 666,025 Fluid handling 116,132 139,089 227,268 261,059 Welding and cutting 473,557 520,500 917,662 1,009,361 Total Net sales $ 957,249 $ 1,025,375 $ 1,834,092 $ 1,936,445 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 6 Months Ended |
Jul. 01, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share - Basic and Diluted [Table Text Block] | Net income per share was computed as follows: Three Months Ended Six Months Ended July 1, 2016 June 26, 2015 July 1, 2016 June 26, 2015 (In thousands, except share data) Computation of Net income per share - basic: Net income attributable to Colfax Corporation $ 39,754 $ 53,127 $ 62,369 $ 105,183 Weighted-average shares of Common stock outstanding - basic 122,827,512 124,250,487 122,958,853 124,103,220 Net income per share - basic $ 0.32 $ 0.43 $ 0.51 $ 0.85 Computation of Net income per share - diluted: Net income attributable to Colfax Corporation $ 39,754 $ 53,127 $ 62,369 $ 105,183 Weighted-average shares of Common stock outstanding - basic 122,827,512 124,250,487 122,958,853 124,103,220 Net effect of potentially dilutive securities - stock options and restricted stock units 208,945 1,011,251 184,584 1,078,247 Weighted-average shares of Common stock outstanding - diluted 123,036,457 125,261,738 123,143,437 125,181,467 Net income per share - diluted $ 0.32 $ 0.42 $ 0.51 $ 0.84 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jul. 01, 2016 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss [Table Text Block] | The following tables present the changes in the balances of each component of Accumulated other comprehensive loss including reclassifications out of Accumulated other comprehensive loss for the six months ended July 1, 2016 and June 26, 2015 . All amounts are net of tax and noncontrolling interest. Accumulated Other Comprehensive Loss Components Net Unrecognized Pension And Other Post-Retirement Benefit Cost Foreign Currency Translation Adjustment Unrealized Gain On Hedging Activities Total (In thousands) Balance at January 1, 2016 $ (193,258 ) $ (528,620 ) $ 35,163 $ (686,715 ) Other comprehensive income (loss) before reclassifications: Foreign currency translation adjustment 468 (131,583 ) 779 (130,336 ) Loss on long-term intra-entity foreign currency transactions — (25,021 ) — (25,021 ) Loss on net investment hedges — — (5,705 ) (5,705 ) Unrealized gain on cash flow hedges — — 454 454 Other comprehensive income (loss) before reclassifications 468 (156,604 ) (4,472 ) (160,608 ) Amounts reclassified from Accumulated other comprehensive loss 2,708 — — 2,708 Net current period Other comprehensive income (loss) 3,176 (156,604 ) (4,472 ) (157,900 ) Balance at July 1, 2016 $ (190,082 ) $ (685,224 ) $ 30,691 $ (844,615 ) Accumulated Other Comprehensive Loss Components Net Unrecognized Pension And Other Post-Retirement Benefit Cost Foreign Currency Translation Adjustment Unrealized Gain On Hedging Activities Total (In thousands) Balance at January 1, 2015 $ (240,513 ) $ (227,059 ) $ 23,881 $ (443,691 ) Other comprehensive income (loss) before reclassifications: Foreign currency translation adjustment 4,530 (76,639 ) (155 ) (72,264 ) Gain on long-term intra-entity foreign currency transactions — 4,620 — 4,620 Gain on net investment hedges — — 10,212 10,212 Unrealized gain on cash flow hedges — — 2,015 2,015 Other 3,817 — — 3,817 Other comprehensive income (loss) before reclassifications 8,347 (72,019 ) 12,072 (51,600 ) Amounts reclassified from Accumulated other comprehensive loss 4,074 — — 4,074 Net current period Other comprehensive income (loss) 12,421 (72,019 ) 12,072 (47,526 ) Balance at June 26, 2015 $ (228,092 ) $ (299,078 ) $ 35,953 $ (491,217 ) |
Amounts reclassified from Accumulated other comprehensive loss [Table Text Block] | The effect on Net income of amounts reclassified out of each component of Accumulated other comprehensive loss for the three and six months ended July 1, 2016 and June 26, 2015 is as follows: Three Months Ended July 1, 2016 Six Months Ended July 1, 2016 Amounts Reclassified From Accumulated Other Comprehensive Loss Tax Benefit Total Amounts Reclassified From Accumulated Other Comprehensive Loss Tax Benefit Total (In thousands) Pension and other post-retirement benefit cost: Amortization of net loss (1) $ 2,047 $ (775 ) $ 1,272 $ 4,082 $ (1,450 ) $ 2,632 Amortization of prior service cost (1) 62 (26 ) 36 124 (48 ) 76 $ 2,109 $ (801 ) $ 1,308 $ 4,206 $ (1,498 ) $ 2,708 Three Months Ended June 26, 2015 Six Months Ended June 26, 2015 Amounts Reclassified From Accumulated Other Comprehensive Loss Tax Benefit Total Amounts Reclassified From Accumulated Other Comprehensive Loss Tax Benefit Total (In thousands) Pension and other post-retirement benefit cost: Amortization of net loss (1) $ 3,522 $ (1,733 ) $ 1,789 $ 6,614 $ (2,671 ) $ 3,943 Amortization of prior service cost (1) 69 — 69 131 — 131 $ 3,591 $ (1,733 ) $ 1,858 $ 6,745 $ (2,671 ) $ 4,074 (1) Included in the computation of net periodic benefit (income) cost. See Note 10 , “Net Periodic Benefit Cost - Defined Benefit Plans” for additional details. |
Inventories, Net (Tables)
Inventories, Net (Tables) | 6 Months Ended |
Jul. 01, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | Inventories, net consisted of the following: July 1, 2016 December 31, 2015 (In thousands) Raw materials $ 154,122 $ 160,640 Work in process 84,952 68,541 Finished goods 256,344 243,209 495,418 472,390 Less: customer progress payments (16,390 ) (15,876 ) Less: allowance for excess, slow-moving and obsolete inventory (46,782 ) (36,128 ) Inventories, net $ 432,246 $ 420,386 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jul. 01, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | Long-term debt consisted of the following: July 1, 2016 December 31, 2015 (In thousands) Term loans $ 695,751 $ 713,175 Trade receivables financing arrangement 83,124 75,800 Revolving credit facilities and other 626,587 628,572 Total Debt 1,405,462 1,417,547 Less: current portion (5,611 ) (5,792 ) Long-term debt $ 1,399,851 $ 1,411,755 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jul. 01, 2016 | |
Schedule of Accrued Liabilities [Table Text Block] | Accrued liabilities in the Condensed Consolidated Balance Sheets consisted of the following: July 1, 2016 December 31, 2015 (In thousands) Accrued payroll $ 108,459 $ 99,383 Advance payment from customers 42,583 45,590 Accrued taxes 47,214 51,834 Accrued asbestos-related liability 52,470 48,780 Warranty liability - current portion 36,172 36,128 Accrued restructuring liability - current portion 14,380 12,918 Accrued third-party commissions 9,333 10,275 Other 92,545 86,751 Accrued liabilities $ 403,156 $ 391,659 |
Schedule of Product Warranty Liability [Table Text Block] | The activity in the Company’s warranty liability consisted of the following: Six Months Ended July 1, 2016 June 26, 2015 (In thousands) Warranty liability, beginning of period $ 37,407 $ 51,135 Accrued warranty expense 13,750 8,685 Changes in estimates related to pre-existing warranties 2,322 (2,696 ) Cost of warranty service work performed (16,839 ) (12,641 ) Foreign exchange translation effect 705 (2,013 ) Warranty liability, end of period $ 37,345 $ 42,470 |
Schedule of Restructuring Reserve by Type of Cost [Table Text Block] | A summary of the activity in the Company’s restructuring liability included in Accrued liabilities and Other liabilities in the Condensed Consolidated Balance Sheets is as follows: Six Months Ended July 1, 2016 Balance at Beginning of Period Provisions Payments Foreign Currency Translation Balance at End of Period (3) (In thousands) Restructuring and other related charges: Gas and Fluid Handling: Termination benefits (1) $ 3,979 $ 13,326 $ (7,405 ) $ (24 ) $ 9,876 Facility closure costs (2) 2,657 3,489 (6,007 ) 106 245 6,636 16,815 (13,412 ) 82 10,121 Non-cash charges 874 17,689 Fabrication Technology: Termination benefits (1) 6,031 10,396 (13,291 ) (38 ) 3,098 Facility closure costs (2) 426 2,761 (1,884 ) (35 ) 1,268 6,457 13,157 (15,175 ) (73 ) 4,366 Non-cash charges 1,312 14,469 Corporate and Other: Facility closure costs (2) 625 — (138 ) (53 ) 434 625 — (138 ) (53 ) 434 $ 13,718 29,972 $ (28,725 ) $ (44 ) $ 14,921 Non-cash charges 2,186 $ 32,158 (1) Includes severance and other termination benefits, including outplacement services. The Company recognizes the cost of involuntary termination benefits at the communication date or ratably over any remaining expected future service period. Voluntary termination benefits are recognized as a liability and an expense when employees accept the offer and the amount can be reasonably estimated. (2) Includes the cost of relocating associates, relocating equipment and lease termination expense in connection with the closure of facilities. (3) As of July 1, 2016 , $14.4 million and $0.5 million of the Company’s restructuring liability was included in Accrued liabilities and Other liabilities, respectively. |
Net Periodic Benefit Cost-Def28
Net Periodic Benefit Cost-Defined Benefit Plans (Tables) | 6 Months Ended |
Jul. 01, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Net Benefit Costs [Table Text Block] | The following table sets forth the components of net periodic benefit (income) cost of the Company’s defined benefit pension plans and other post-retirement employee benefit plans: Three Months Ended Six Months Ended July 1, 2016 June 26, 2015 July 1, 2016 June 26, 2015 (In thousands) Pension Benefits - U.S. Plans: Service cost $ 48 $ — $ 96 $ — Interest cost 4,353 4,288 8,705 8,581 Expected return on plan assets (6,120 ) (6,019 ) (12,241 ) (12,039 ) Amortization 1,619 1,898 3,234 3,799 Net periodic benefit (income) cost $ (100 ) $ 167 $ (206 ) $ 341 Pension Benefits-Non U.S. Plans: Service cost $ 856 $ 818 $ 1,691 $ 2,025 Interest cost 8,716 9,777 17,160 19,536 Expected return on plan assets (7,979 ) (9,153 ) (16,200 ) (17,809 ) Amortization 426 1,501 844 2,579 Net periodic benefit cost $ 2,019 $ 2,943 $ 3,495 $ 6,331 Other Post-Retirement Benefits: Service cost $ 15 $ 51 $ 31 $ 102 Interest cost 313 313 625 639 Amortization 64 192 128 367 Net periodic benefit cost $ 392 $ 556 $ 784 $ 1,108 |
Financial Instruments and Fai29
Financial Instruments and Fair Value Measurements (Tables) | 6 Months Ended |
Jul. 01, 2016 | |
Financial Instruments and Fair Value Measurements [Abstract] | |
Company's assets and liabilities measured at fair value for each fair value hierarchy level [Table Text Block] | A summary of the Company’s assets and liabilities that are measured at fair value for each fair value hierarchy level for the periods presented is as follows: July 1, 2016 Level Level Level Total (In thousands) Assets: Cash equivalents $ 21,322 $ — $ — $ 21,322 Foreign currency contracts related to sales - designated as hedges — 2,033 — 2,033 Foreign currency contracts related to sales - not designated as hedges — 658 — 658 Foreign currency contracts related to purchases - designated as hedges — 4,271 — 4,271 Foreign currency contracts related to purchases - not designated as hedges — 161 — 161 Deferred compensation plans — 4,034 — 4,034 $ 21,322 $ 11,157 $ — $ 32,479 Liabilities: Foreign currency contracts related to sales - designated as hedges $ — $ 9,670 $ — $ 9,670 Foreign currency contracts related to sales - not designated as hedges — 515 — 515 Foreign currency contracts related to purchases - designated as hedges — 580 — 580 Foreign currency contracts related to purchases - not designated as hedges — 467 — 467 Deferred compensation plans — 4,034 — 4,034 $ — $ 15,266 $ — $ 15,266 December 31, 2015 Level Level Level Total (In thousands) Assets: Cash equivalents $ 22,516 $ — $ — $ 22,516 Foreign currency contracts related to sales - designated as hedges — 988 — 988 Foreign currency contracts related to sales - not designated as hedges — 664 — 664 Foreign currency contracts related to purchases - designated as hedges — 1,554 — 1,554 Foreign currency contracts related to purchases - not designated as hedges — 338 — 338 Deferred compensation plans — 4,000 — 4,000 $ 22,516 $ 7,544 $ — $ 30,060 Liabilities: Foreign currency contracts related to sales - designated as hedges $ — $ 6,368 $ — $ 6,368 Foreign currency contracts related to sales - not designated as hedges — 969 — 969 Foreign currency contracts related to purchases - designated as hedges — 322 — 322 Foreign currency contracts related to purchases - not designated as hedges — 128 — 128 Deferred compensation plans — 4,000 — 4,000 $ — $ 11,787 $ — $ 11,787 There were no transfers in or out of Level One, Two or Three during the six months ended July 1, 2016 . |
Schedule of Foreign Exchange Contracts, Notional Values | As of July 1, 2016 and December 31, 2015 , the Company had foreign currency contracts with the following notional values: July 1, 2016 December 31, 2015 (In thousands) Foreign currency contracts sold - not designated as hedges $ 87,767 $ 119,653 Foreign currency contracts sold - designated as hedges 187,661 206,366 Foreign currency contracts purchased - not designated as hedges 33,021 41,480 Foreign currency contracts purchased - designated as hedges 67,351 62,794 Total foreign currency derivatives $ 375,800 $ 430,293 |
Schedule of Derivative Instruments, Gain (Loss) in Condensed Consolidated Financial Statements [Table Text Block] | The Company recognized the following in its Condensed Consolidated Financial Statements related to its derivative instruments: Three Months Ended Six Months Ended July 1, 2016 June 26, 2015 July 1, 2016 June 26, 2015 (In thousands) Contracts Designated as Hedges: Foreign Currency Contracts - related to customer sales contracts: Unrealized gain $ 2,063 $ 6,267 $ 858 $ 508 Realized (loss) gain (4,741 ) 3,050 (2,372 ) 3,502 Foreign Currency Contracts - related to supplier purchase contracts: Unrealized (loss) gain (894 ) 2,229 (1,241 ) (324 ) Realized gain (loss) 2,678 (3,263 ) 2,711 (1,950 ) Unrealized gain (loss) on net investment hedges (1) 4,868 (18,473 ) (5,705 ) 10,212 Contracts Not Designated in a Hedge Relationship: Foreign Currency Contracts - related to customer sales contracts: Unrealized (loss) gain (1,581 ) 1,746 447 2,272 Realized (loss) (78 ) (535 ) (91 ) (4,261 ) Foreign Currency Contracts - related to supplier purchases contracts: Unrealized gain (loss) 520 531 (516 ) 387 Realized (loss) gain (225 ) (165 ) (261 ) 414 (1) The unrealized gain (loss) on net investment hedges is attributable to the change in valuation of Euro denominated debt. |
Commitments and Contingencies30
Commitments and Contingencies (Tables) | 6 Months Ended |
Jul. 01, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule Of Loss Contingencies By Claims Quantities [Table Text Block] | Claims activity since December 31 related to asbestos claims is as follows (1) : Six Months Ended July 1, 2016 June 26, 2015 (Number of claims) Claims unresolved, beginning of period 20,583 21,681 Claims filed (2) 2,908 2,502 Claims resolved (3) (2,283 ) (2,180 ) Claims unresolved, end of period 21,208 22,003 (1) Excludes claims filed by one legal firm that have been “administratively dismissed.” (2) Claims filed include all asbestos claims for which notification has been received or a file has been opened. (3) Claims resolved include all asbestos claims that have been settled, dismissed or that are in the process of being settled or dismissed based upon agreements or understandings in place with counsel for the claimants. |
Schedule Of Asbestos Related Litigation [Table Text Block] | The Company’s Condensed Consolidated Balance Sheets included the following amounts related to asbestos-related litigation: July 1, 2016 December 31, 2015 (In thousands) Current asbestos insurance asset (1) $ 29,678 $ 28,872 Long-term asbestos insurance asset (2) 271,238 284,095 Long-term asbestos insurance receivable (2) 112,428 96,007 Accrued asbestos liability (3) 52,470 48,780 Long-term asbestos liability (4) 335,028 350,394 (1) Included in Other current assets in the Condensed Consolidated Balance Sheets. (2) Included in Other assets in the Condensed Consolidated Balance Sheets. (3) Represents current reserves for probable and reasonably estimable asbestos-related liability cost that the Company believes its subsidiaries will pay through the next 15 years, overpayments by certain insurers and unpaid legal costs related to defending themselves against asbestos-related liability claims and legal action against the Company’s insurers, which is included in Accrued liabilities in the Condensed Consolidated Balance Sheets. (4)) Included in Other liabilities in the Condensed Consolidated Balance Sheets. |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jul. 01, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The Company’s segment results were as follows: Three Months Ended Six Months Ended July 1, 2016 June 26, 2015 July 1, 2016 June 26, 2015 (In thousands) Net sales: Gas and fluid handling $ 483,692 $ 504,875 $ 916,430 $ 927,084 Fabrication technology 473,557 520,500 917,662 1,009,361 $ 957,249 $ 1,025,375 $ 1,834,092 $ 1,936,445 Segment operating income (loss) (1) : Gas and fluid handling $ 45,093 $ 64,206 $ 79,016 $ 100,463 Fabrication technology 54,471 53,874 100,356 111,220 Corporate and other (12,012 ) (12,672 ) (25,686 ) (25,069 ) $ 87,552 $ 105,408 $ 153,686 $ 186,614 (1) The following is a reconciliation of Income before income taxes to segment operating income: Three Months Ended Six Months Ended July 1, 2016 June 26, 2015 July 1, 2016 June 26, 2015 (In thousands) Income before income taxes $ 64,351 $ 82,325 $ 103,697 $ 147,734 Interest expense 8,711 14,249 17,831 26,293 Restructuring and other related charges 14,490 8,834 32,158 12,587 Segment operating income $ 87,552 $ 105,408 $ 153,686 $ 186,614 |
Revenue from External Customers by Products and Services [Table Text Block] | The detail of the Company’s Net sales by product type is as follows: Three Months Ended Six Months Ended July 1, 2016 June 26, 2015 July 1, 2016 June 26, 2015 (In thousands) Gas handling $ 367,560 $ 365,786 $ 689,162 $ 666,025 Fluid handling 116,132 139,089 227,268 261,059 Welding and cutting 473,557 520,500 917,662 1,009,361 Total Net sales $ 957,249 $ 1,025,375 $ 1,834,092 $ 1,936,445 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Dec. 31, 2015 | Sep. 25, 2015 | Jul. 01, 2016 | |
Goodwill, Purchase Accounting Adjustments | $ 1.3 | ||
Roots Blowers and Compressors [Member] | |||
Business Acquisition, Effective Date of Acquisition | Jun. 30, 2015 | ||
Simsmart Technologies [Member] | |||
Business Acquisition, Effective Date of Acquisition | Oct. 5, 2015 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2016 | Jun. 26, 2015 | Jul. 01, 2016 | Jun. 26, 2015 | |
Earnings Per Share [Abstract] | ||||
Net income attributable to Colfax Corporation | $ 39,754 | $ 53,127 | $ 62,369 | $ 105,183 |
Weighted-average shares of Common stock outstanding - basic | 122,827,512 | 124,250,487 | 122,958,853 | 124,103,220 |
Net income per share - basic | $ 0.32 | $ 0.43 | $ 0.51 | $ 0.85 |
Net effect of potentially dilutive securities - stock options and restricted stock units | 208,945 | 1,011,251 | 184,584 | 1,078,247 |
Weighted-average shares of Common stock outstanding - diluted | 123,036,457 | 125,261,738 | 123,143,437 | 125,181,467 |
Net income per share - diluted | $ 0.32 | $ 0.42 | $ 0.51 | $ 0.84 |
Net Income Per Share (Details T
Net Income Per Share (Details Textual) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2016 | Jun. 26, 2015 | Jul. 01, 2016 | Jun. 26, 2015 | |
Earnings Per Share [Abstract] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 5.2 | 2.2 | 5.1 | 2.1 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2016 | Jun. 26, 2015 | Jul. 01, 2016 | Jun. 26, 2015 | |
Unrecognized Tax Benefits, Decrease Resulting from Prior Period Tax Positions | $ 13,000 | |||
Income before income taxes | $ 64,351 | $ 82,325 | $ 103,697 | 147,734 |
Provision for income taxes | $ 20,388 | $ 23,496 | $ 33,524 | $ 32,630 |
Effective Income Tax Rate, Continuing Operations | 31.70% | 28.50% | 32.30% | 22.10% |
Equity (Details - AOCI Componen
Equity (Details - AOCI Components) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 01, 2016 | Jun. 26, 2015 | |
Changes in Accumulated Other Comprehensive Loss [Line Items] | ||
Beginning Balance | $ (686,715) | $ (443,691) |
Foreign currency translation adjustment | (130,336) | (72,264) |
(Loss) gain on long-term intra-entity foreign currency transactions | (25,021) | 4,620 |
(Loss) gain on net investment hedges | (5,705) | 10,212 |
Unrealized gain on cash flow hedges | 454 | 2,015 |
Other | 3,817 | |
Other comprehensive (loss) income before reclassifications | (160,608) | (51,600) |
Amounts reclassified from Accumulated other comprehensive loss | 2,708 | 4,074 |
Net current period other comprehensive (loss) income | (157,900) | (47,526) |
Ending balance | (844,615) | (491,217) |
Net Unrecognized Pension And Other Post-Retirement Benefit Cost [Member] | ||
Changes in Accumulated Other Comprehensive Loss [Line Items] | ||
Beginning Balance | (193,258) | (240,513) |
Foreign currency translation adjustment | 468 | 4,530 |
(Loss) gain on long-term intra-entity foreign currency transactions | 0 | 0 |
(Loss) gain on net investment hedges | 0 | 0 |
Unrealized gain on cash flow hedges | 0 | 0 |
Other | 3,817 | |
Other comprehensive (loss) income before reclassifications | 468 | 8,347 |
Amounts reclassified from Accumulated other comprehensive loss | 2,708 | 4,074 |
Net current period other comprehensive (loss) income | 3,176 | 12,421 |
Ending balance | (190,082) | (228,092) |
Foreign Currency Translation Adjustment [Member] | ||
Changes in Accumulated Other Comprehensive Loss [Line Items] | ||
Beginning Balance | (528,620) | (227,059) |
Foreign currency translation adjustment | (131,583) | (76,639) |
(Loss) gain on long-term intra-entity foreign currency transactions | (25,021) | 4,620 |
(Loss) gain on net investment hedges | 0 | 0 |
Unrealized gain on cash flow hedges | 0 | 0 |
Other | 0 | |
Other comprehensive (loss) income before reclassifications | (156,604) | (72,019) |
Amounts reclassified from Accumulated other comprehensive loss | 0 | 0 |
Net current period other comprehensive (loss) income | (156,604) | (72,019) |
Ending balance | (685,224) | (299,078) |
Unrealized Gain On Hedging Activities [Member] | ||
Changes in Accumulated Other Comprehensive Loss [Line Items] | ||
Beginning Balance | 35,163 | 23,881 |
Foreign currency translation adjustment | 779 | (155) |
(Loss) gain on long-term intra-entity foreign currency transactions | 0 | 0 |
(Loss) gain on net investment hedges | (5,705) | 10,212 |
Unrealized gain on cash flow hedges | 454 | 2,015 |
Other | 0 | |
Other comprehensive (loss) income before reclassifications | (4,472) | 12,072 |
Amounts reclassified from Accumulated other comprehensive loss | 0 | 0 |
Net current period other comprehensive (loss) income | (4,472) | 12,072 |
Ending balance | $ 30,691 | $ 35,953 |
Equity (Details - Amounts Recla
Equity (Details - Amounts Reclassified from Accumulated Other Comprehensive Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 01, 2016 | Jun. 26, 2015 | Jul. 01, 2016 | Jun. 26, 2015 | ||
Equity [Abstract] | |||||
Amortization of net loss, before tax | [1] | $ 2,047 | $ 3,522 | $ 4,082 | $ 6,614 |
Amortization of net loss, tax | [1] | (775) | (1,733) | (1,450) | (2,671) |
Amortization of net loss, net of tax | [1] | 1,272 | 1,789 | 2,632 | 3,943 |
Amortization of prior service cost, before tax | [1] | 62 | 69 | 124 | 131 |
Amortization of prior service cost, tax | [1] | (26) | 0 | (48) | 0 |
Amortization of prior service cost, net of tax | [1] | 36 | 69 | 76 | 131 |
Net pension and other post-retirement benefit cost reclassified, before tax | [1] | 2,109 | 3,591 | 4,206 | 6,745 |
Net pension and other post-retirement benefit cost, tax | [1] | (801) | (1,733) | (1,498) | (2,671) |
Net pension and other post-retirement benefit cost reclassified, net of tax of $697 and $938 | [1] | $ 1,308 | $ 1,858 | $ 2,708 | $ 4,074 |
[1] | Included in the computation of net periodic benefit (income) cost. See Note 10, “Net Periodic Benefit Cost - Defined Benefit Plans” for additional details. |
Equity Textuals (Details)
Equity Textuals (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Jul. 01, 2016 | Jun. 26, 2015 | May 13, 2016 | Oct. 11, 2015 | |
Equity [Abstract] | ||||
Stock Repurchase Program, Authorized Amount | $ 100,000 | |||
Stock Repurchase (in shares) | 1,000,000 | |||
Stock Repurchased and Retired During Period, Value | $ 20,812 | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | 52,000 | |||
Other Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest | $ 1,200 | $ (4,600) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 10,500,000 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 154,122 | $ 160,640 |
Work in process | 84,952 | 68,541 |
Finished goods | 256,344 | 243,209 |
Inventory, gross | 495,418 | 472,390 |
Less: customer progress payments | (16,390) | (15,876) |
Less: allowance for excess, slow-moving and obsolete inventory | (46,782) | (36,128) |
Inventories, net | $ 432,246 | $ 420,386 |
Debt Components (Details)
Debt Components (Details) - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Total Debt | $ 1,405,462 | $ 1,417,547 |
Less: current portion | (5,611) | (5,792) |
Long-term debt | 1,399,851 | 1,411,755 |
Term loans [Member] | ||
Debt Instrument [Line Items] | ||
Total Debt | 695,751 | 713,175 |
Trade receivables financing arrangement [Member] | ||
Debt Instrument [Line Items] | ||
Total Debt | 83,124 | 75,800 |
Revolving credit facilities and other [Member] | ||
Debt Instrument [Line Items] | ||
Total Debt | $ 626,587 | $ 628,572 |
Debt (Details Textual)
Debt (Details Textual) $ in Millions | 6 Months Ended |
Jul. 01, 2016USD ($) | |
Debt discount | $ 6.4 |
Deferred Finance Costs, Net | $ 7.1 |
Long-term Debt, Weighted Average Interest Rate | 1.87% |
Line of Credit Facility, Remaining Borrowing Capacity | $ 771.8 |
Letter of Credit Subfacility, Maximum Borrowing Capacity | 743.3 |
Letters of Credit, Amount Outstanding | $ 348.2 |
Debt Instrument, Covenant Compliance | As of July 1, 2016, the Company is in compliance with the covenants under the Credit Agreement. |
Trade receivables financing arrangement [Member] | |
Long-term Debt, Weighted Average Interest Rate | 1.29% |
Trade receivables financing arrangement, maximum borrowing capacity | $ 95 |
Trade receivables financing arrangement, outstanding borrowings | $ 83.1 |
Accrued Liabilities Chart (Deta
Accrued Liabilities Chart (Details) - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2015 | |
Accrued Liabilities [Abstract] | |||
Accrued payroll | $ 108,459 | $ 99,383 | |
Advance payments from customers | 42,583 | 45,590 | |
Accrued taxes | 47,214 | 51,834 | |
Accrued asbestos-related liability | [1] | 52,470 | 48,780 |
Warranty liability - current portion | 36,172 | 36,128 | |
Accrued restructuring liability - current portion | 14,380 | 12,918 | |
Accrued third-party commissions | 9,333 | 10,275 | |
Other | 92,545 | 86,751 | |
Accrued liabilities | $ 403,156 | $ 391,659 | |
[1] | Represents current reserves for probable and reasonably estimable asbestos-related liability cost that the Company believes its subsidiaries will pay through the next 15 years, overpayments by certain insurers and unpaid legal costs related to defending themselves against asbestos-related liability claims and legal action against the Company’s insurers, which is included in Accrued liabilities in the Condensed Consolidated Balance Sheets. |
Warranty Liability Rollforward
Warranty Liability Rollforward (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 01, 2016 | Jun. 26, 2015 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Warranty liability, beginning of period | $ 37,407 | $ 51,135 |
Accrued warranty expense | 13,750 | 8,685 |
Changes in estimates related to pre-existing warranties | 2,322 | (2,696) |
Cost of warranty service work performed | (16,839) | (12,641) |
Foreign exchange translation effect | 705 | (2,013) |
Warranty liability, end of period | $ 37,345 | $ 42,470 |
Restructuring Rollforward (Deta
Restructuring Rollforward (Details) $ in Thousands | 6 Months Ended | |
Jul. 01, 2016USD ($) | ||
Balance at Beginning of Period | $ 13,718 | |
Provisions | 32,158 | |
Payments | (28,725) | |
Foreign Currency Translation | (44) | |
Balance at End of Period | 14,921 | [1] |
Restructuring provisions before non-cash charges | 29,972 | |
Non-cash charges in restructuring provisions | 2,186 | |
Gas and Fluid Handling [Member] | ||
Balance at Beginning of Period | 6,636 | |
Provisions | 17,689 | |
Payments | (13,412) | |
Foreign Currency Translation | 82 | |
Balance at End of Period | 10,121 | |
Restructuring provisions before non-cash charges | 16,815 | |
Non-cash charges in restructuring provisions | 874 | |
Fabrication Technology [Member] | ||
Balance at Beginning of Period | 6,457 | |
Provisions | 14,469 | |
Payments | (15,175) | |
Foreign Currency Translation | (73) | |
Balance at End of Period | 4,366 | |
Restructuring provisions before non-cash charges | 13,157 | |
Non-cash charges in restructuring provisions | 1,312 | |
Corporate and Other [Member] | ||
Balance at Beginning of Period | 625 | |
Provisions | 0 | |
Payments | (138) | |
Foreign Currency Translation | (53) | |
Balance at End of Period | 434 | |
Termination benefits [Member] | Gas and Fluid Handling [Member] | ||
Balance at Beginning of Period | 3,979 | [2] |
Provisions | 13,326 | [2] |
Payments | (7,405) | [2] |
Foreign Currency Translation | (24) | [2] |
Balance at End of Period | 9,876 | [2] |
Termination benefits [Member] | Fabrication Technology [Member] | ||
Balance at Beginning of Period | 6,031 | [2] |
Provisions | 10,396 | [2] |
Payments | (13,291) | [2] |
Foreign Currency Translation | (38) | [2] |
Balance at End of Period | 3,098 | [2] |
Facility closure costs [Member] | Gas and Fluid Handling [Member] | ||
Balance at Beginning of Period | 2,657 | [3] |
Provisions | 3,489 | [3] |
Payments | (6,007) | [3] |
Foreign Currency Translation | 106 | [3] |
Balance at End of Period | 245 | [3] |
Facility closure costs [Member] | Fabrication Technology [Member] | ||
Balance at Beginning of Period | 426 | [3] |
Provisions | 2,761 | [3] |
Payments | (1,884) | [3] |
Foreign Currency Translation | (35) | [3] |
Balance at End of Period | 1,268 | [3] |
Facility closure costs [Member] | Corporate and Other [Member] | ||
Balance at Beginning of Period | 625 | [3] |
Provisions | 0 | [3] |
Payments | (138) | [3] |
Foreign Currency Translation | (53) | [3] |
Balance at End of Period | $ 434 | [3] |
[1] | As of July 1, 2016, $14.4 million and $0.5 million of the Company’s restructuring liability was included in Accrued liabilities and Other liabilities, respectively. | |
[2] | Includes severance and other termination benefits, including outplacement services. The Company recognizes the cost of involuntary termination benefits at the communication date or ratably over any remaining expected future service period. Voluntary termination benefits are recognized as a liability and an expense when employees accept the offer and the amount can be reasonably estimated. | |
[3] | Includes the cost of relocating associates, relocating equipment and lease termination expense in connection with the closure of facilities. |
Accrued Liabilities (Details Te
Accrued Liabilities (Details Textual) - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2015 |
Restructuring Reserve, Current | $ 14,380 | $ 12,918 |
Restructuring Reserve, Noncurrent | 500 | |
Expected Remaining Restructuring and Related Charges For Year | $ 48,000 |
Net Periodic Benefit Cost-Def46
Net Periodic Benefit Cost-Defined Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2016 | Jun. 26, 2015 | Jul. 01, 2016 | Jun. 26, 2015 | |
Pension Benefits-U.S. Plans: [Member] | ||||
Service cost | $ 48 | $ 0 | $ 96 | $ 0 |
Interest cost | 4,353 | 4,288 | 8,705 | 8,581 |
Expected return on plan assets | (6,120) | (6,019) | (12,241) | (12,039) |
Amortization | 1,619 | 1,898 | 3,234 | 3,799 |
Net periodic benefit (income) cost | (100) | 167 | (206) | 341 |
Pension Benefits-Non U.S. Plans: [Member] | ||||
Service cost | 856 | 818 | 1,691 | 2,025 |
Interest cost | 8,716 | 9,777 | 17,160 | 19,536 |
Expected return on plan assets | (7,979) | (9,153) | (16,200) | (17,809) |
Amortization | 426 | 1,501 | 844 | 2,579 |
Net periodic benefit (income) cost | 2,019 | 2,943 | 3,495 | 6,331 |
Other Post-Retirement Benefits: [Member] | ||||
Service cost | 15 | 51 | 31 | 102 |
Interest cost | 313 | 313 | 625 | 639 |
Amortization | 64 | 192 | 128 | 367 |
Net periodic benefit (income) cost | $ 392 | $ 556 | $ 784 | $ 1,108 |
Fair Value Hierarchy (Details)
Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2015 |
Cash equivalents | $ 21,322 | $ 22,516 |
Deferred compensation plans | 4,034 | 4,000 |
Deferred compensation plans liability | 4,034 | 4,000 |
Assets, Fair Value Disclosure | 32,479 | 30,060 |
Liabilities, Fair Value Disclosure | 15,266 | 11,787 |
Fair Value, Inputs, Level 1 [Member] | ||
Cash equivalents | 21,322 | 22,516 |
Assets, Fair Value Disclosure | 21,322 | 22,516 |
Fair Value, Inputs, Level 2 [Member] | ||
Deferred compensation plans | 4,034 | 4,000 |
Deferred compensation plans liability | 4,034 | 4,000 |
Assets, Fair Value Disclosure | 11,157 | 7,544 |
Liabilities, Fair Value Disclosure | 15,266 | 11,787 |
Foreign currency contracts related to customer sales contracts | ||
Foreign currency contracts designated as hedges, Assets | 2,033 | 988 |
Foreign currency contracts not designated as hedges, Assets | 658 | 664 |
Foreign currency contracts designated as hedges, Liabilities | 9,670 | 6,368 |
Foreign currency contracts not designated as hedges, Liability | 515 | 969 |
Foreign currency contracts related to customer sales contracts | Fair Value, Inputs, Level 2 [Member] | ||
Foreign currency contracts designated as hedges, Assets | 2,033 | 988 |
Foreign currency contracts not designated as hedges, Assets | 658 | 664 |
Foreign currency contracts designated as hedges, Liabilities | 9,670 | 6,368 |
Foreign currency contracts not designated as hedges, Liability | 515 | 969 |
Foreign currency contracts related to supplier purchase contracts | ||
Foreign currency contracts designated as hedges, Assets | 4,271 | 1,554 |
Foreign currency contracts not designated as hedges, Assets | 161 | 338 |
Foreign currency contracts designated as hedges, Liabilities | 580 | 322 |
Foreign currency contracts not designated as hedges, Liability | 467 | 128 |
Foreign currency contracts related to supplier purchase contracts | Fair Value, Inputs, Level 2 [Member] | ||
Foreign currency contracts designated as hedges, Assets | 4,271 | 1,554 |
Foreign currency contracts not designated as hedges, Assets | 161 | 338 |
Foreign currency contracts designated as hedges, Liabilities | 580 | 322 |
Foreign currency contracts not designated as hedges, Liability | $ 467 | $ 128 |
Foreign Currency Contracts Noti
Foreign Currency Contracts Notional Values (Details) - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2015 |
Derivative, Notional Amount | $ 375,800 | $ 430,293 |
Foreign currency contracts related to customer sales contracts | Not Designated As Hedging Instrument [Member] | ||
Derivative, Notional Amount | 87,767 | 119,653 |
Foreign currency contracts related to customer sales contracts | Designated As Hedging Instrument [Member] | ||
Derivative, Notional Amount | 187,661 | 206,366 |
Foreign currency contracts related to supplier purchase contracts | Not Designated As Hedging Instrument [Member] | ||
Derivative, Notional Amount | 33,021 | 41,480 |
Foreign currency contracts related to supplier purchase contracts | Designated As Hedging Instrument [Member] | ||
Derivative, Notional Amount | $ 67,351 | $ 62,794 |
Gain (Loss) On Derivative Instr
Gain (Loss) On Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 01, 2016 | Jun. 26, 2015 | Jul. 01, 2016 | Jun. 26, 2015 | ||
Unrealized Gain (Loss) on Net Investment Hedges | $ (5,705) | $ 10,212 | |||
Designated As Hedging Instrument [Member] | |||||
Unrealized Gain (Loss) on Net Investment Hedges | [1] | $ 4,868 | $ (18,473) | (5,705) | 10,212 |
Designated As Hedging Instrument [Member] | Foreign currency contracts related to customer sales contracts | |||||
Unrealized Gain (Loss) on Foreign Currency Contracts | 2,063 | 6,267 | 858 | 508 | |
Realized (Loss) Gain on Foreign Currency Contracts | (4,741) | 3,050 | (2,372) | 3,502 | |
Designated As Hedging Instrument [Member] | Foreign currency contracts related to supplier purchase contracts | |||||
Unrealized Gain (Loss) on Foreign Currency Contracts | (894) | 2,229 | (1,241) | (324) | |
Realized (Loss) Gain on Foreign Currency Contracts | 2,678 | (3,263) | 2,711 | (1,950) | |
Not Designated As Hedging Instrument [Member] | Foreign currency contracts related to customer sales contracts | |||||
Unrealized Gain (Loss) on Foreign Currency Contracts | (1,581) | 1,746 | 447 | 2,272 | |
Realized (Loss) Gain on Foreign Currency Contracts | (78) | (535) | (91) | (4,261) | |
Not Designated As Hedging Instrument [Member] | Foreign currency contracts related to supplier purchase contracts | |||||
Unrealized Gain (Loss) on Foreign Currency Contracts | 520 | 531 | (516) | 387 | |
Realized (Loss) Gain on Foreign Currency Contracts | $ (225) | $ (165) | $ (261) | $ 414 | |
[1] | The unrealized gain (loss) on net investment hedges is attributable to the change in valuation of Euro denominated debt. |
Financial Instruments and Fai50
Financial Instruments and Fair Value Measurements (Details Textual) - USD ($) $ in Billions | Jul. 01, 2016 | Dec. 31, 2015 |
Financial Instruments and Fair Value Measurements [Abstract] | ||
Long-term Debt, Fair Value | $ 1.4 | $ 1.4 |
Claims Rollforward (Details)
Claims Rollforward (Details) - Asbestos_claims | 6 Months Ended | ||
Jul. 01, 2016 | Jun. 26, 2015 | ||
Claims unresolved, beginning of period | [1] | 20,583 | 21,681 |
Claims filed(2) | [1],[2] | 2,908 | 2,502 |
Claims resolved(3) | [1],[3] | (2,283) | (2,180) |
Claims unresolved, end of period | [1] | 21,208 | 22,003 |
[1] | Excludes claims filed by one legal firm that have been “administratively dismissed.” | ||
[2] | Claims filed include all asbestos claims for which notification has been received or a file has been opened. | ||
[3] | Claims resolved include all asbestos claims that have been settled, dismissed or that are in the process of being settled or dismissed based upon agreements or understandings in place with counsel for the claimants. |
Asbestos Litigation (Details 1)
Asbestos Litigation (Details 1) - USD ($) $ in Thousands | Jul. 01, 2016 | Dec. 31, 2015 | |
Current asbestos insurance asset(1) | [1] | $ 29,678 | $ 28,872 |
Long-term asbestos insurance asset(2) | [2] | 271,238 | 284,095 |
Long-term asbestos insurance receivable(2) | [2] | 112,428 | 96,007 |
Accrued asbestos liability(3) | [3] | 52,470 | 48,780 |
Long-term asbestos liability(4) | [4] | $ 335,028 | $ 350,394 |
[1] | Included in Other current assets in the Condensed Consolidated Balance Sheets. | ||
[2] | Included in Other assets in the Condensed Consolidated Balance Sheets. | ||
[3] | Represents current reserves for probable and reasonably estimable asbestos-related liability cost that the Company believes its subsidiaries will pay through the next 15 years, overpayments by certain insurers and unpaid legal costs related to defending themselves against asbestos-related liability claims and legal action against the Company’s insurers, which is included in Accrued liabilities in the Condensed Consolidated Balance Sheets. | ||
[4] | Included in Other liabilities in the Condensed Consolidated Balance Sheets. |
Commitments and Contingencies53
Commitments and Contingencies (Details Textual) | 6 Months Ended |
Jul. 01, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Claims Period | 15 years |
Loss Contingency, Allegations | The Lincoln Electric Company and Lincoln Global, Inc. (collectively, “Lincoln Electric”) filed suit against The ESAB Group, Inc. and ESAB AB in the United States District Court, Eastern District of Texas, alleging infringement of certain patents allegedly owned by Lincoln Electric. The complaint, as amended, seeks undisclosed damages plus interest, an award of attorneys’ fees and expenses, and injunctive relief. The defendants answered the complaint, denying Lincoln Electric’s infringement allegations and asserting affirmative defenses, on October 20, 2015. The litigation is in an early stage, and is not expected to have a material adverse effect on the financial condition, results of operations or cash flow of the Company. The defendants are vigorously defending against the claims. |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 01, 2016 | Jun. 26, 2015 | Jul. 01, 2016 | Jun. 26, 2015 | ||
Net sales | $ 957,249 | $ 1,025,375 | $ 1,834,092 | $ 1,936,445 | |
Income before income taxes | 64,351 | 82,325 | 103,697 | 147,734 | |
Interest expense | 8,711 | 14,249 | 17,831 | 26,293 | |
Restructuring and other related charges | 14,490 | 8,834 | 32,158 | 12,587 | |
Segment Operating Income (Loss) | [1] | 87,552 | 105,408 | 153,686 | 186,614 |
Gas Handling [Member] | |||||
Net sales | 367,560 | 365,786 | 689,162 | 666,025 | |
Fluid Handling [Member] | |||||
Net sales | 116,132 | 139,089 | 227,268 | 261,059 | |
Welding and Cutting [Member] | |||||
Net sales | 473,557 | 520,500 | 917,662 | 1,009,361 | |
Gas and Fluid Handling [Member] | |||||
Net sales | 483,692 | 504,875 | 916,430 | 927,084 | |
Segment Operating Income (Loss) | [1] | 45,093 | 64,206 | 79,016 | 100,463 |
Fabrication Technology [Member] | |||||
Net sales | 473,557 | 520,500 | 917,662 | 1,009,361 | |
Segment Operating Income (Loss) | [1] | 54,471 | 53,874 | 100,356 | 111,220 |
Corporate and Other [Member] | |||||
Segment Operating Income (Loss) | [1] | $ (12,012) | $ (12,672) | $ (25,686) | $ (25,069) |
[1] | The following is a reconciliation of Income before income taxes to segment operating income: |