DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION | 6 Months Ended |
Jun. 29, 2018shares | |
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 | 118,925,914 |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Jun. 29, 2018 |
Document Fiscal Period Focus | Q2 |
Document Fiscal Year Focus | 2,018 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 925,288 | $ 847,962 | $ 1,806,213 | $ 1,581,592 |
Cost of sales | 637,854 | 589,898 | 1,248,159 | 1,083,699 |
Gross profit | 287,434 | 258,064 | 558,054 | 497,893 |
Selling, general and administrative expense | 204,784 | 176,882 | 405,303 | 351,715 |
Restructuring and other related charges | 16,946 | 11,060 | 24,875 | 15,833 |
Operating income | 65,704 | 70,122 | 127,876 | 130,345 |
Interest expense, net | 9,680 | 8,524 | 19,268 | 17,778 |
(Gain) loss on short term investments | (4,591) | 0 | 10,128 | 0 |
Income from continuing operations before income taxes | 60,615 | 61,598 | 98,480 | 112,567 |
(Benefit) provision for income taxes | (6,893) | 19,734 | (907) | 32,312 |
Net income from continuing operations | 67,508 | 41,864 | 99,387 | 80,255 |
(Loss) income from discontinued operations, net of taxes | (25,729) | 16,611 | (28,566) | 19,707 |
Net income | 41,779 | 58,475 | 70,821 | 99,962 |
Less: income attributable to noncontrolling interest, net of taxes | 3,322 | 5,081 | 7,829 | 8,026 |
Net income attributable to Colfax Corporation | $ 38,457 | $ 53,394 | $ 62,992 | $ 91,936 |
Net income (loss) per share - basic | ||||
Continuing operations | $ 0.52 | $ 0.30 | $ 0.74 | $ 0.59 |
Discontinued operations | (0.21) | 0.13 | (0.23) | 0.16 |
Consolidated operations | 0.31 | 0.43 | 0.51 | 0.75 |
Net income (loss) per share - diluted | ||||
Continuing operations | 0.52 | 0.30 | 0.74 | 0.58 |
Discontinued operations | (0.21) | 0.13 | (0.23) | 0.16 |
Consolidated operations | $ 0.31 | $ 0.43 | $ 0.51 | $ 0.74 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 41,779 | $ 58,475 | $ 70,821 | $ 99,962 |
Other comprehensive (loss) income: | ||||
Foreign currency translation, net of tax of $5,412, $1,013, $4,569 and $(1,082) | (222,473) | 107,911 | (140,798) | 167,911 |
Unrealized gain (loss) on hedging activities, net of tax of $6,033, $(8,859), $3,100 and $(8,623) | 12,154 | (13,416) | 7,020 | (14,353) |
Amounts reclassified from Accumulated other comprehensive income: | ||||
Amortization of pension and other post-retirement net actuarial loss, net of tax of $273, $1,176, $476 and $1,936 | 876 | 962 | 1,833 | 2,636 |
Amortization of pension and other post-retirement prior service cost, net of tax of $0, $23, $0 and $47 | 0 | 39 | 1 | 77 |
Other comprehensive (loss) income | (209,443) | 95,496 | (131,944) | 156,271 |
Comprehensive (loss) income | (167,664) | 153,971 | (61,123) | 256,233 |
Less: comprehensive (loss) income attributable to noncontrolling interest | (15,518) | 8,267 | (4,959) | 15,044 |
Comprehensive (loss) income attributable to Colfax Corporation | $ (152,146) | $ 145,704 | $ (56,164) | $ 241,189 |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Parenthetical] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation, tax | $ 5,412 | $ 1,013 | $ 4,569 | $ (1,082) |
Unrealized gain (loss) on hedging activities, tax | 6,033 | (8,859) | 3,100 | (8,623) |
Amortization of pension and other post-retirement net actuarial loss, tax | 273 | 1,176 | 476 | 1,936 |
Amortization of pension and other post-retirement prior service cost, tax | $ 0 | $ 23 | $ 0 | $ 47 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 29, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and cash equivalents | $ 257,700 | $ 262,019 |
Short term investments | 0 | 149,608 |
Trade receivables, less allowance for doubtful accounts of $29,320 and $31,488 | 986,271 | 970,199 |
Inventories, net | 490,159 | 429,627 |
Other current assets | 213,350 | 258,379 |
Total current assets | 1,947,480 | 2,069,832 |
Property, plant and equipment, net | 510,695 | 552,802 |
Goodwill | 2,505,377 | 2,538,544 |
Intangible assets, net | 960,154 | 1,017,203 |
Other assets | 538,997 | 531,316 |
Total assets | 6,462,703 | 6,709,697 |
LIABILITIES AND EQUITY | ||
Current portion of long-term debt | 6,180 | 5,766 |
Accounts payable | 586,276 | 587,129 |
Customer advances and billings in excess of costs incurred | 149,019 | 145,853 |
Accrued liabilities | 333,046 | 358,632 |
Total current liabilities | 1,074,521 | 1,097,380 |
Long-term debt, less current portion | 1,067,415 | 1,055,305 |
Other liabilities | 783,327 | 829,748 |
Total liabilities | 2,925,263 | 2,982,433 |
Equity: | ||
Common stock, $0.001 par value; 400,000,000 shares authorized; 118,925,914 and 123,245,827 issued and outstanding | 119 | 123 |
Additional paid-in capital | 3,100,201 | 3,228,174 |
Retained earnings | 914,634 | 846,490 |
Accumulated other comprehensive loss | (698,680) | (574,372) |
Total Colfax Corporation equity | 3,316,274 | 3,500,415 |
Noncontrolling interest | 221,166 | 226,849 |
Total equity | 3,537,440 | 3,727,264 |
Total liabilities and equity | $ 6,462,703 | $ 6,709,697 |
CONDENSED CONSOLIDATED BALANCE6
CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($) $ in Thousands | Jun. 29, 2018 | Dec. 31, 2017 |
Condensed Consolidated Balance Sheet (Parenthetical) [Abstract] | ||
Trade receivables, allowance for doubtful accounts | $ 29,320 | $ 31,488 |
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 | 118,925,914 | 123,245,827 |
Common Stock, Shares, Outstanding | 118,925,914 | 123,245,827 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENT OF EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Other Comprehensive Loss [Member] | Noncontrolling Interest [Member] |
Cumulative effect of accounting change, net of tax of $2,808 | $ 5,152 | $ (5,152) | |||||
Balance at Dec. 31, 2017 | $ 3,727,264 | $ 123 | $ 3,228,174 | 846,490 | $ (574,372) | $ 226,849 | |
Shares, Outstanding at Dec. 31, 2017 | 123,245,827 | ||||||
Net income attributable to Colfax Corporation | 62,992 | 62,992 | |||||
Net income attributable to noncontrolling interest | 7,829 | 7,829 | |||||
Net income | 70,821 | ||||||
Distributions to noncontrolling owners | (724) | (724) | |||||
Other comprehensive income, net of tax of $8,145 | (131,944) | (119,156) | (12,788) | ||||
Common stock repurchases, shares | (4,604,974) | ||||||
Common stock repurchases, value | (143,902) | $ (4) | (143,898) | ||||
Common stock-based award activity | 15,925 | $ 0 | 15,925 | ||||
Common stock-based award activity (in shares) | 285,061 | ||||||
Balance at Jun. 29, 2018 | $ 3,537,440 | $ 119 | $ 3,100,201 | $ 914,634 | $ (698,680) | $ 221,166 | |
Shares, Outstanding at Jun. 29, 2018 | 118,925,914 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENT OF EQUITY Statement of Stockholders' Equity [Parenthetical] $ in Thousands | Dec. 31, 2017USD ($) |
Cumulative effect of accounting change, tax | $ 2,808 |
CONDENSED CONSOLIDATED STATEME9
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 29, 2018 | Jun. 30, 2017 | |
Statement of Cash Flows [Abstract] | ||
Net income | $ 70,821 | $ 99,962 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, amortization and impairment charges | 71,958 | 68,606 |
Stock-based compensation expense | 12,835 | 11,931 |
Non-cash interest expense | 2,243 | 2,170 |
(Gain) loss on short term investments | 10,128 | 0 |
Deferred income tax benefit | (19,656) | (3,700) |
Gain on sale of facility | (7,839) | (11,734) |
Loss on sale of business | 4,337 | 0 |
Changes in operating assets and liabilities: | ||
Trade receivables, net | (65,186) | (59,419) |
Inventories, net | (53,993) | (29,932) |
Accounts payable | 19,878 | 5,470 |
Customer advances and billings in excess of costs incurred | 17,462 | (1,352) |
Changes in other operating assets and liabilities | (29,326) | 16,556 |
Net cash provided by operating activities | 33,662 | 98,558 |
Cash flows from investing activities: | ||
Purchases of fixed assets | (24,808) | (26,755) |
Proceeds from sale of facility | 14,634 | 16,106 |
Acquisitions, net of cash received | (50,912) | (49,999) |
Sale of business, net | 18,603 | 0 |
Sale of short term investments, net | 139,480 | 0 |
Net cash provided by (used in) investing activities | 96,997 | (60,648) |
Cash flows from financing activities: | ||
Payments under term credit facility | (56,250) | (28,126) |
Proceeds from borrowings on revolving credit facilities and other | 504,518 | 384,257 |
Repayments of borrowings on revolving credit facilities and other | (422,361) | (720,473) |
Proceeds from borrowings on senior unsecured notes | 0 | 374,451 |
Proceeds from issuance of common stock, net | 3,090 | 3,134 |
Common stock repurchases | (143,902) | 0 |
Other | (838) | (8,329) |
Net cash (used in) provided by financing activities | (115,743) | 4,914 |
Effect of foreign exchange rates on Cash and cash equivalents | (19,235) | 7,671 |
(Decrease) increase in Cash and cash equivalents | (4,319) | 50,495 |
Cash and Cash Equivalents- beginning of period | 262,019 | 221,730 |
Cash and Cash Equivalents- end of period | $ 257,700 | $ 272,225 |
General (Text Block)
General (Text Block) | 6 Months Ended |
Jun. 29, 2018 | |
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 leading diversified industrial technology company that provides air and gas handling and fabrication technology products and services to customers around the world under the Howden and ESAB brands. On December 11, 2017, the Company completed the sale of its Fluid Handling business (“Fluid Handling”) to CIRCOR International, Inc., a Delaware corporation (“CIRCOR” or “the Buyer”), pursuant to a definitive purchase agreement (the Purchase Agreement) signed on September 24, 2017. Accordingly, the accompanying Condensed Consolidated Financial Statements for all periods presented reflect the Fluid Handling business as a discontinued operation. See Note 3, Discontinued Operations, for further information. 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, 2017 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, 2017 (the “ 2017 Form 10-K”), filed with the SEC on February 16, 2018 . 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. Intercompany transactions and accounts are eliminated in consolidation. Certain prior period amounts have been reclassified to conform to current year presentations. 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 June 29, 2018 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 air and gas handling customers seek to fully utilize capital spending budgets before the end of the year, usually our shipments peak during the fourth quarter. Also, our European operations typically experience a slowdown during the July, 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 |
Jun. 29, 2018 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Pronouncements Accounting Guidance Implemented in 2018 Standards Adopted Description Effective Date Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers The standard outlines a single set of comprehensive principles for recognizing revenue under U.S. GAAP and supersedes existing revenue recognition guidance. The main principle of the standard is that revenue should be recognized 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. The Company applied the ASU and its related updates on a full retrospective basis as of January 1, 2018. The adoption of the ASU did not have a material impact on the consolidated financial statements; therefore, no cumulative catch-up adjustment was recorded for prior periods. See Note 5, “Revenue”, for additional information. January 1, 2018 ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities The standard requires various changes to the measurement and disclosure of equity investments. For the Company, the most relevant change under ASU 2016-01 is the elimination of the available-for-sale classification for equity securities with readily determinable fair values. The adoption of the standard as of January 1, 2018 resulted in a reclassification of a $5.2 million gain, net of tax, on short term investments from Accumulated other comprehensive loss to Retained earnings on the Company’s Condensed Consolidated Financial Statements. Additionally, as a result of the adoption of this ASU, any changes in fair value of the Company’s Short term investments is included in (Gain) loss on short term investments in the Condensed Consolidated Statement of Income. January 1, 2018 ASU No. 2016-15, Statement of Cash Flows (Topic 203) The guidance addresses eight specific cash flow issues and clarifies their presentation and classification in the Statement of Cash Flows. The Company has retrospectively adopted the standard on its consolidated financial statements as of January 1, 2018. The adoption of the ASU did not have a material impact on the consolidated financial statements. As such, no retrospective adjustment was recorded. January 1, 2018 ASU 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory The standard eliminates the exception that the tax effects of an intra-entity transfer (sales) are deferred until the transferred asset is sold to a third party or recovered through use. The resulting impact is the recognition of tax expense in the seller’s jurisdiction and any deferred tax asset in the buyer’s jurisdiction in the period the transfer occurs. The new guidance does not apply to intra entity sales of inventory whose tax effects will continue to be deferred until the inventory is sold to a third party. The Company adopted the ASU as of January 1, 2018 using a modified retrospective approach and concluded the ASU had no material impact on the consolidated financial statements; therefore, no cumulative catch-up adjustment was recorded. January 1, 2018 ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost The standard requires that the service cost component of net benefit costs of pension and post-retirement benefit plans be reported in the same line item as other compensation costs. Other components of net periodic pension cost and net periodic post-retirement benefit cost are required to be presented in the income statement separately from the service cost component, and only the service cost is eligible for capitalization. The Company adopted the ASU as of January 1, 2018 retrospectively for the presentation requirements and prospectively for the capitalization of the service cost. The adoption of the ASU did not have a material impact on the consolidated financial statements. No adjustment was recorded as a result of the adoption. January 1, 2018 Standards Adopted Description Effective Date ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs pursuant to SEC Staff Accounting Bulletin No. 118 (“SAB 118”) The standard addresses the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 U.S. Tax Cut and Jobs Act (“Tax Act”). SAB 118 allows registrants to include a provisional amount to account for the implications of the Tax Act where a reasonable estimate can be made and requires the completion of the accounting no later than one year from the date of enactment of the Tax Act or December 22, 2018. In its financial statements for the year ended December 31, 2017, the Company included a provisional estimate of approximately $52 million for the transition tax, payable over 8 years. Generally, the foreign earnings subject to the transition tax can be distributed without additional U.S. tax; however, if distributed, the amount could be subject to foreign taxes and U.S. state and local taxes. The Company also recorded a provisional tax benefit estimate of approximately $55 million for the re-measurement of its U.S. deferred tax assets and liabilities to a 21% effective tax rate. The Company continues to evaluate the implications of the Tax Act and have not made any adjustments to the provisional amounts recorded in the prior year. Additionally, the Company intends to file its 2017 U.S. income tax return in the second half of 2018 which may change the tax basis in temporary differences, tax pools, earning and profits and other elements of the income tax effects of the Tax Act estimated as of December 31, 2017. This may result in an adjustment to the tax provision and be reflected as a re-measurement amount recorded in the financial statements during the quarter in which the U.S. tax return is filed. December 31, 2017 New Accounting Guidance to be Implemented Standards Pending Adoption Description Anticipated Impact Effective/Adoption Date ASU 2016-02, Leases (Topic 842) The standard 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 standard also requires certain qualitative and quantitative disclosures designed to assess the amount, timing and uncertainty of cash flows arising from leases, along with additional key information about leasing arrangements. The new guidance can be adopted using a modified retrospective transition and provides for certain practical expedients. The Company is analyzing and updating data previously collected to evaluate the impact of adopting the ASU on its consolidated financial statements, and further assessing the related systems required to support increased reporting and disclosures requirements. The Company will adopt the package of practical expedients for all leases commenced before January 1, 2019. The adoption of the guidance will have a material effect on the consolidated balance sheets, resulting in the recording of an operating lease asset and liability. January 1, 2019 ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments The ASU is effective for fiscal periods beginning after December 15, 2019 and early adoption is permitted. The ASU 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 forward-looking information. The Company is currently evaluating the impact of adopting the ASU on its consolidated financial statements. January 1, 2020 ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities The ASU amends the current hedge accounting model and eliminates the requirement to separately measure and report hedge ineffectiveness and requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The ASU also eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. Companies are required to apply amendments to cash flow and net investment hedge relationship using modified retrospective method and apply prospective method for the presentation and disclosure requirements. The Company is currently evaluating the impact of adopting the ASU on its consolidated financial statements and the timing of adoption. January 1, 2019 ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income The standard provides entities the option to reclassify to retained earnings the tax effects resulting from the Tax Act related to items stranded in accumulated other comprehensive income. The new guidance may be applied retrospectively to each period in which the effect of the Tax Act is recognized in the period of adoption. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and the timing of adoption. January 1, 2019 Standards Pending Adoption Description Anticipated Impact Effective/Adoption Date Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income (GILTI), states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. The Tax Act subjects the Company to tax on the GILTI earned by certain of its foreign subsidiaries. The Company has included an estimate of GILTI in determining the annual effective tax rate; however, given the complexity of the GILTI provisions, the Company is still evaluating the effects of the GILTI provisions and have not yet determined the accounting policy. December 31, 2018 |
Discontinued Operations (Notes)
Discontinued Operations (Notes) | 6 Months Ended |
Jun. 29, 2018 | |
Discontinued Operations [Abstract] | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Discontinued Operations Sale of Fluid Handling Business The Company sold its Fluid Handling business to CIRCOR on December 11, 2017. After certain post-closing adjustments, total consideration for the sale was $860.6 million, consisting of $551.0 million of cash, 3.3 million shares of CIRCOR common stock (“CIRCOR Shares”), and assumption of $168.0 million of net retirement liabilities. All cash consideration has been collected as of June 29, 2018. During the three months ended June 29, 2018, the Company sold its CIRCOR Shares for $139.5 million , net of $5.8 million of underwriters' fees. A related gain of $4.6 million was recorded in the Consolidated Statements of Income for the three months ended June 29, 2018. The key components of (Loss) income from discontinued operations for the three and six months ended June 29, 2018 and June 30, 2017 were as follows: Three Months Ended Six Months Ended June 29, 2018 June 30, 2017 June 29, 2018 June 30, 2017 (In thousands) Net sales $ — $ 117,870 $ — $ 229,166 Cost of sales — 75,236 — 146,994 Selling, general and administrative expense (1) 2,123 30,592 4,594 60,955 Divestiture-related expense, net (2) 1,283 750 2,358 1,600 Restructuring and other related items — (10,589 ) — (8,262 ) Operating (loss) income (3,406 ) 21,881 (6,952 ) 27,879 Interest income (3) — 106 — 265 Loss on disposal (4,337 ) — (4,337 ) — (Loss) income from discontinued operations before income taxes (7,743 ) 21,987 (11,289 ) 28,144 Income tax expense (4) 17,986 5,376 17,277 8,437 (Loss) income from discontinued operations, net of taxes $ (25,729 ) $ 16,611 $ (28,566 ) $ 19,707 (1) Pursuant to the Purchase Agreement, the Company retained its asbestos-related contingencies and insurance coverages. However, as the Company did not retain an interest in the ongoing operations of the business subject to the contingencies, the Company has classified asbestos-related activity in its Condensed Consolidated Statements of Income as part of (Loss) income from discontinued operations. See Note 14, “Commitments and Contingencies” for further information. (2) Primarily related to professional and consulting fees associated with the divestiture including due diligence and preparation of regulatory filings, as well as employee benefit arrangements and other disposition-related activities. (3) Interest expense has not been allocated to the discontinued operations. (4) Income tax expense for the three months ended June 29, 2018 was primarily related to incremental tax expense recognized due to changes in the estimated gain allocation by jurisdiction. The Company did not have material cash flows for discontinued operations during the six months ended June 29, 2018. Cash provided by operating activities of discontinued operations for the six months ended June 30, 2017 was $47.3 million . Cash used in investing activities of discontinued operations was $2.9 million for the six months ended June 30, 2017 . There are no material items in the accompanying Condensed Consolidated Statements of Income that had been eliminated in consolidation prior to the disposal. |
Acquisitions Acquisition (Notes
Acquisitions Acquisition (Notes) | 6 Months Ended |
Jun. 29, 2018 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | Acquisitions During the six months ended June 29, 2018 , the Company completed an acquisition in the Fabrication Technology segment for net cash consideration of 323.1 million Swedish Krona ( $41.1 million ), subject to certain purchase price adjustments. |
Revenue (Notes)
Revenue (Notes) | 6 Months Ended |
Jun. 29, 2018 | |
Revenue Recognition, Milestone Method [Line Items] | |
Revenue from Contract with Customer [Text Block] | Revenue The Company accounts for revenue in accordance with Topic 606, “Revenue from Contracts with Customers,” which the Company adopted on January 1, 2018, using the full retrospective method. Accordingly, the Company recognizes revenue when control of promised goods or services is transferred to the customer. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for transferring the goods or services. The nature of the Company’s contracts gives rise to certain types of variable consideration, including rebates and other discounts. The Company includes estimated amounts of variable consideration in the transaction price to the extent that it is probable there will not be a significant reversal of revenue. Estimates are based on historical or anticipated performance and represent the Company’s best judgment at the time. Any estimates are evaluated on a quarterly basis until the uncertainty is resolved. The Company provides a variety of products and services to its customers. Most of the Company’s contracts consist of a single, distinct performance obligation or promise to transfer goods or services to a customer. For contracts that include multiple performance obligations, the Company allocates the total transaction price to each performance obligation using the Company’s best estimate of the standalone selling price of each identified performance obligation. A majority of revenue recognized by the Company relates to contracts with customers for standard or off-the-shelf products. As control typically transfers to the customer upon delivery of the product in these circumstances, revenue is generally recognized at that point in time. For service contracts, the Company recognizes revenue ratably over the period of performance as the customer simultaneously receives and consumes the benefits of the services provided. The following tables disaggregate the Company’s revenue by segment and timing of transfer: Three Months Ended June 29, 2018 June 30, 2017 Fabrication Technology Air and Gas Handling Fabrication Technology Air and Gas Handling (in thousands) Point in time $ 560,857 $ 101,755 $ 492,597 $ 129,509 Over time — 262,676 2,200 223,656 Total $ 560,857 $ 364,431 $ 494,797 $ 353,165 Six Months Ended June 29, 2018 June 30, 2017 Fabrication Technology Air and Gas Handling Fabrication Technology Air and Gas Handling (in thousands) Point in time $ 1,093,870 $ 315,161 $ 952,658 $ 336,683 Over time 260 396,922 2,200 290,051 Total $ 1,094,130 $ 712,083 $ 954,858 $ 626,734 In certain contracts, particularly within the Air and Gas Handling segment, the Company is engaged to engineer and build highly-customized, large-scale products and systems. In these circumstances, the Company produces an asset with no alternative use and has a right to payment for performance completed to date. As a result, revenue is recognized over time based on progress to date. To measure progress, the Company uses an input method based on costs incurred relative to total estimated costs. Under this method, contract revenues are recognized over the performance period of the contract. The amount recognized is directly proportionate to the costs incurred as a percentage of total estimated costs for the entirety of the contract. This method requires estimates to determine the appropriate cost and revenue recognition. Significant management judgments and estimates, including estimated costs to complete projects, must be made and used in connection with revenue recognized during each period. Current estimates may be revised as additional information becomes available. The revisions are recorded in income in the period in which they are determined using the cumulative catch-up method of accounting. As of June 29, 2018, the Air and Gas Handling business had $837.5 million of remaining performance obligations, which is also referred to as total backlog. Of that total backlog, the Company expects to recognize approximately 64% as revenue in 2018 and an additional 36% thereafter. Given the nature of these long-term contracts, the Company is often paid at various points throughout the process, based on the contractual terms. The Company applies the available practical expedient involving the existence of a significant financing component. As the Company generally does not receive payments greater than one year in advance or arrears of revenue recognition, the Company does not consider any arrangements to include financing components. Any recognized revenues in excess of customer billings are recorded as a component of Trade receivables. Billings to customers in excess of recognized revenues are recorded as a component of Customer advances and billings in excess of costs incurred. For long-term contracts, amounts are billed as work progresses, based on the specified timeline included in the contractual terms. Each contract is evaluated individually to determine the net asset or net liability position. As of June 29, 2018 and December 31, 2017, there were $203.6 million and $203.9 million , respectively, of revenues in excess of billings and $79.7 million and $94.2 million , respectively, of billings in excess of revenues on long-term contracts in the Condensed Consolidated Balance Sheets. For contracts recognized at a point in time, revenue recognition and billing typically occur simultaneously. The Company’s Fabrication Technology business formulates, develops, manufactures and supplies consumable products and equipment. The vast majority of total revenue from the Fabrication Technology business is recognized at a point in time. As a result, of the total amount of remaining unsatisfied performance obligations, the majority relate to ship and bill arrangements. Given the nature of this business, the total amount of unsatisfied performance obligations with an original contract duration of greater than one year as of June 29, 2018 is immaterial. In some circumstances for both over time and point in time contracts, customers are billed in advance of revenue recognition, resulting in contract liabilities. As of December 31, 2017 and 2016, total contract liabilities were $133.3 million and $137.6 million , respectively. During the three and six months ended June 29, 2018, revenue recognized that was included in the contract liability balance at the beginning of the year was $40.6 million and $97.9 million , respectively. Of this total 71.7% and 70.6% , respectively, was related to long-term contracts which have met the criteria for over time recognition. During the three and six months ended June 30, 2017, revenue recognized that was included in the contract liability balance at the beginning of the year was $31.9 million and $97.7 million , respectively. Of this total 68.4% and 73.2% , respectively, was related to long-term contracts which have met the criteria for over time recognition. As of June 29, 2018 and June 30, 2017, total contract liabilities were $143.8 million and $130.1 million , respectively. The period of benefit for the Company’s incremental costs of obtaining a contract would generally have less than a one-year duration; therefore, the Company applies the practical expedient available and expenses costs to obtain a contract when incurred. |
Net Income Per Share (Text Bloc
Net Income Per Share (Text Block) | 6 Months Ended |
Jun. 29, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | Net Income Per Share from Continuing Operations Net income per share from continuing operations was computed as follows: Three Months Ended Six Months Ended June 29, 2018 June 30, 2017 June 29, 2018 June 30, 2017 (In thousands, except share data) Computation of Net income per share from continuing operations: Net income from continuing operations attributable to Colfax Corporation (1) $ 64,186 $ 36,783 $ 91,558 $ 72,229 Weighted-average shares of Common stock outstanding - basic 122,685,878 123,203,512 123,106,702 123,150,462 Net income per share from continuing operations - basic $ 0.52 $ 0.30 $ 0.74 $ 0.59 Computation of Net income per share from continuing operations - diluted: Net income from continuing operations attributable to Colfax Corporation (1) $ 64,186 $ 36,783 $ 91,558 $ 72,229 Weighted-average shares of Common stock outstanding - basic 122,685,878 123,203,512 123,106,702 123,150,462 Net effect of potentially dilutive securities - stock options and restricted stock units 286,867 750,614 403,664 730,560 Weighted-average shares of Common stock outstanding - diluted 122,972,745 123,954,126 123,510,366 123,881,022 Net income per share from continuing operations - diluted $ 0.52 $ 0.30 $ 0.74 $ 0.58 (1) Net income from continuing operations attributable to Colfax Corporation for the respective periods is calculated using Net income from continuing operations less the income attributable to noncontrolling interest, net of taxes. 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 June 29, 2018 and June 30, 2017 excludes 3.8 million and 2.9 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 June 29, 2018 and June 30, 2017 excludes approximately 3.4 million and 2.8 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 |
Jun. 29, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Income Taxes During the three and six months ended June 29, 2018 , Income from continuing operations before income taxes was $60.6 million and $98.5 million , respectively, while the income tax benefit was $6.9 million and $0.9 million , respectively. The effective tax rates were (11.4)% and (0.9)% for the three and six months ended June 29, 2018 , respectively. The effective tax rates differ from the 2018 U.S. federal statutory rate of 21% mainly due to net discrete tax benefits primarily attributed to the effective settlement of uncertain tax positions, an enacted tax rate change in a foreign jurisdiction, valuation allowance reversals and the expected realization of certain U.S. tax credits offset in part by international taxes which are higher than the U.S. tax rate, losses in certain jurisdictions where a tax benefit is not expected to be recognized in 2018 and U.S. tax on certain foreign earnings including GILTI. The provision for income taxes for three and six months ended June 29, 2018 includes $20.8 million and $26.9 million of net discrete tax benefits, respectively. During the three and six months ended June 30, 2017 , Income from continuing operations before income taxes was $61.6 million and $112.6 million , respectively, while the Provision for income taxes was $19.7 million and $32.3 million , respectively. The effective tax rates were 32.0% and 28.7% for the three and six months ended June 30, 2017 , respectively. The effective tax rate differed from the 2017 U.S. federal statutory rate of 35% primarily due to international tax rates, which were 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 2017 . The provision for income taxes for the six months ended June 30, 2017 included a $0.9 million net discrete tax benefit primarily associated with a South American jurisdiction. |
Equity (Text Block)
Equity (Text Block) | 6 Months Ended |
Jun. 29, 2018 | |
Equity [Abstract] | |
Shareholders' Equity and Share-based Payments [Text Block] | Equity Share Repurchase Program On February 12, 2018 , the Company’s Board of Directors authorized the repurchase of up to $100 million of the Company’s Common stock from time-to-time on the open market or in privately negotiated transactions. The Board of Directors increased the repurchase authorization by an additional $100 million on June 6, 2018 . The timing, amount and method of shares repurchased is determined by management based on its evaluation of market conditions and other factors. During the three months ended June 29, 2018, the Company repurchased 4,604,974 shares of the Company’s Common stock in open market transactions for $143.9 million . As of June 29, 2018, the remaining stock repurchase authorization provided by the Company’s Board of Directors was $56.1 million . On July 19, 2018, the Board of Directors increased the repurchase authorization again by an additional $100 million . 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 June 29, 2018 and June 30, 2017 . All amounts are net of tax and noncontrolling interest, if any. 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, 2018 $ (84,338 ) $ (525,324 ) $ 30,138 $ (579,524 ) Other comprehensive income (loss) before reclassifications: Foreign currency translation adjustment 706 (138,014 ) (373 ) (137,681 ) Gain on long-term intra-entity foreign currency transactions — 9,861 — 9,861 Gain on net investment hedges — — 8,539 8,539 Unrealized loss on cash flow hedges — — (1,710 ) (1,710 ) Other comprehensive income (loss) before reclassifications 706 (128,153 ) 6,456 (120,991 ) Amounts reclassified from Accumulated other comprehensive loss (1) 1,835 — — 1,835 Net Other comprehensive income (loss) 2,541 (128,153 ) 6,456 (119,156 ) Balance at June 29, 2018 $ (81,797 ) $ (653,477 ) $ 36,594 $ (698,680 ) 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, 2017 $ (181,189 ) $ (860,789 ) $ 53,633 $ (988,345 ) Other comprehensive (loss) income before reclassifications: Foreign currency translation adjustment (3,781 ) 158,603 (18 ) 154,804 Gain on long-term intra-entity foreign currency transactions — 6,136 — 6,136 Loss on net investment hedges — — (19,429 ) (19,429 ) Unrealized gain on cash flow hedges — — 5,015 5,015 Other comprehensive (loss) income before reclassifications (3,781 ) 164,739 (14,432 ) 146,526 Amounts reclassified from Accumulated other comprehensive loss (1) 2,727 — — 2,727 Net Other comprehensive (loss) income (1,054 ) 164,739 (14,432 ) 149,253 Balance at June 30, 2017 $ (182,243 ) $ (696,050 ) $ 39,201 $ (839,092 ) (1) Included in the computation of net periodic benefit cost. See Note 12, “Net Periodic Benefit Cost - Defined Benefit Plans” for additional details. |
Inventories, Net (Text Block)
Inventories, Net (Text Block) | 6 Months Ended |
Jun. 29, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | Inventories, Net Inventories, net consisted of the following: June 29, 2018 December 31, 2017 (In thousands) Raw materials $ 151,301 $ 141,827 Work in process 94,575 74,704 Finished goods 286,696 254,479 532,572 471,010 Less: customer progress payments — (2,308 ) Less: allowance for excess, slow-moving and obsolete inventory (42,413 ) (39,075 ) Inventories, net $ 490,159 $ 429,627 |
Debt (Text Block)
Debt (Text Block) | 6 Months Ended |
Jun. 29, 2018 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Debt Long-term debt consisted of the following: June 29, 2018 December 31, 2017 (In thousands) Senior unsecured notes $ 403,595 $ 414,862 Term loans 559,949 615,095 Revolving credit facilities and other 110,051 31,114 Total debt 1,073,595 1,061,071 Less: current portion (6,180 ) (5,766 ) Long-term debt $ 1,067,415 $ 1,055,305 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 “DB Credit Agreement”). As of June 29, 2018 , the weighted-average interest rate of borrowings under the DB Credit Agreement was 3.49% , excluding accretion of original issue discount and deferred financing fees, and there was $1.2 billion available on the revolving credit facility. On April 19, 2017, the Company issued senior unsecured notes with an aggregate principal amount of €350 million (the “Euro Notes”). The Euro Notes are due in April 2025 and have an interest rate of 3.25% . The proceeds from the Euro Notes offering were used to repay borrowings under the DB Credit Agreement and bilateral credit facilities totaling €283.5 million , as well as for general corporate purposes, and are guaranteed by certain of the Company’s domestic subsidiaries (the "Guarantees"). In conjunction with the issuance, the Company recorded $6.0 million of deferred financing fees. The Euro Notes and the Guarantees have not been, and will not be, registered under the Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any other jurisdiction. As of June 29, 2018 , the Company had an original issue discount of $2.6 million and deferred financing fees of $8.1 million included in its Condensed Consolidated Balance Sheet, which will be accreted to Interest expense, primarily using the effective interest method, over the life of the applicable debt agreements. In addition to the debt agreements discussed above, the Company is party to various bilateral credit facilities with a borrowing capacity of $214.7 million . As of June 29, 2018 , outstanding borrowings under these facilities were $52.9 million , and had a weighted average borrowing rate of 1.19% . The Company is also party to letter of credit facilities with total capacity of $757.8 million . Total letters of credit of $392.1 million were outstanding as of June 29, 2018 . As of June 29, 2018, the Company is in compliance with the covenants under the DB Credit Agreement. |
Accrued Liabilities (Text Block
Accrued Liabilities (Text Block) | 6 Months Ended |
Jun. 29, 2018 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities Disclosure [Text Block] | Accrued Liabilities Accrued liabilities in the Condensed Consolidated Balance Sheets consisted of the following: June 29, 2018 December 31, 2017 (In thousands) Accrued payroll $ 97,716 $ 98,132 Accrued taxes 37,608 53,939 Accrued asbestos-related liability 53,834 50,311 Warranty liability - current portion 32,259 32,428 Accrued restructuring liability - current portion 14,561 12,509 Accrued third-party commissions 12,627 14,014 Other 84,441 97,299 Accrued liabilities $ 333,046 $ 358,632 Warranty Liability The activity in the Company’s warranty liability consisted of the following: Six Months Ended June 29, 2018 June 30, 2017 (In thousands) Warranty liability, beginning of period $ 34,177 $ 30,222 Accrued warranty expense 11,146 8,733 Changes in estimates related to pre-existing warranties 1,137 271 Cost of warranty service work performed (11,293 ) (11,403 ) Acquisitions — 13 Foreign exchange translation effect (1,189 ) 1,114 Warranty liability, end of period $ 33,978 $ 28,950 Accrued Restructuring Liability The Company’s restructuring programs include a series of 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 June 29, 2018 Balance at Beginning of Period Provisions Payments Foreign Currency Translation Balance at End of Period (3) (In thousands) Restructuring and other related charges: Air and Gas Handling : Termination benefits (1) $ 12,038 $ 10,358 $ (12,199 ) $ (501 ) $ 9,696 Facility closure costs (2) (217 ) 1,415 (1,040 ) 122 280 11,821 11,773 (13,239 ) (379 ) 9,976 Non-cash charges (2) 118 11,891 Fabrication Technology: Termination benefits (1) 660 5,817 (5,605 ) (36 ) 836 Facility closure costs (2) 42 7,148 (3,439 ) (2 ) 3,749 702 12,965 (9,044 ) (38 ) 4,585 Corporate and Other: Facility closure costs (2) 84 19 (103 ) — — 84 19 (103 ) — — Total $ 12,607 $ 24,757 $ (22,386 ) $ (417 ) $ 14,561 Non-cash charges (2) 118 $ 24,875 (1) Includes severance and other termination benefits, including outplacement services. (2) Includes the cost of relocating associates, relocating equipment and lease termination expense in connection with the closure of facilities. (3) As of June 29, 2018 , $14.6 million of the Company’s restructuring liability was included in Accrued liabilities. The Company has increased the scope of its expected restructuring actions and expects to incur charges of approximately $40 million to $50 million during the remainder of 2018 related to its restructuring activities. |
Net Periodic Benefit Cost-Defin
Net Periodic Benefit Cost-Defined Benefit Plans (Text Block) | 6 Months Ended |
Jun. 29, 2018 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | Net Periodic Benefit Cost - Defined Benefit Plans In connection with the sale of the Fluid Handling business, the Buyer assumed the Fluid Handling liability for all foreign defined benefit plans specific to the Fluid Handling business, a portion of the U.S. defined benefit plan, and certain other postretirement obligations. Net benefit cost for the Fluid Handling business is included in (Loss) income from discontinued operations, net of taxes , within the Condensed Consolidated Statements of Income. See Note 3, “Discontinued Operations” for further information. The following table sets forth the components of total net periodic benefit cost of the Company’s defined benefit pension plans and other post-retirement employee benefit plans: Three Months Ended Six Months Ended June 29, 2018 June 30, 2017 June 29, 2018 June 30, 2017 (In thousands) Pension Benefits - U.S. Plans: Service cost $ 40 $ 47 $ 81 $ 93 Interest cost 1,810 3,866 3,621 7,745 Expected return on plan assets (2,639 ) (5,340 ) (5,278 ) (10,679 ) Amortization 913 1,618 1,828 3,237 Net periodic benefit cost $ 124 $ 191 $ 252 $ 396 Pension Benefits - Non-U.S. Plans: Service cost $ 617 $ 1,053 $ 1,246 $ 1,998 Interest cost 5,668 6,667 9,550 13,179 Expected return on plan assets (6,444 ) (6,837 ) (11,119 ) (13,410 ) Amortization 258 683 526 1,673 Net periodic benefit cost $ 99 $ 1,566 $ 203 $ 3,440 Other Post-Retirement Benefits: Service cost $ 6 $ 11 $ 13 $ 21 Interest cost 123 242 246 485 Amortization (22 ) (100 ) (44 ) (200 ) Net periodic benefit cost $ 107 $ 153 $ 215 $ 306 During the three and six months ended June 30, 2017 , net periodic benefit cost of $1.2 million and $2.3 million , respectively, are included in (Loss) income from discontinued operations, net of taxes . |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements (Text Block) | 6 Months Ended |
Jun. 29, 2018 | |
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 $1.1 billion estimated fair value of the Company’s debt as of June 29, 2018 and December 31, 2017 , 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: June 29, 2018 Level Level Level Total (In thousands) Assets: Cash equivalents $ 25,095 $ — $ — $ 25,095 Foreign currency contracts related to sales - designated as hedges — 965 — 965 Foreign currency contracts related to sales - not designated as hedges — 1,121 — 1,121 Foreign currency contracts related to purchases - designated as hedges — 1,127 — 1,127 Foreign currency contracts related to purchases - not designated as hedges — 795 — 795 Deferred compensation plans — 7,716 — 7,716 $ 25,095 $ 11,724 $ — $ 36,819 Liabilities: Foreign currency contracts related to sales - designated as hedges $ — $ 2,727 $ — $ 2,727 Foreign currency contracts related to sales - not designated as hedges — 145 — 145 Foreign currency contracts related to purchases - designated as hedges — 146 — 146 Foreign currency contracts related to purchases - not designated as hedges — 2,031 — 2,031 Deferred compensation plans — 7,716 — 7,716 $ — $ 12,765 $ — $ 12,765 December 31, 2017 Level Level Level Total (In thousands) Assets: Cash equivalents $ 24,083 $ — $ — $ 24,083 Short term investments — 149,608 — 149,608 Foreign currency contracts related to sales - designated as hedges — 3,287 — 3,287 Foreign currency contracts related to sales - not designated as hedges — 43 — 43 Foreign currency contracts related to purchases - designated as hedges — 493 — 493 Foreign currency contracts related to purchases - not designated as hedges — 1,038 — 1,038 Deferred compensation plans — 6,374 — 6,374 $ 24,083 $ 160,843 $ — $ 184,926 Liabilities: Foreign currency contracts related to sales - designated as hedges $ — $ 1,257 $ — $ 1,257 Foreign currency contracts related to sales - not designated as hedges — 740 — 740 Foreign currency contracts related to purchases - designated as hedges — 1,332 — 1,332 Foreign currency contracts related to purchases - not designated as hedges — 449 — 449 Deferred compensation plans — 6,374 — 6,374 $ — $ 10,152 $ — $ 10,152 There were no transfers in or out of Level One, Two or Three during the six months ended June 29, 2018 . Foreign Currency Contracts As of June 29, 2018 and December 31, 2017 , the Company had foreign currency contracts with the following notional values: June 29, 2018 December 31, 2017 (In thousands) Foreign currency contracts sold - not designated as hedges $ 140,347 $ 37,143 Foreign currency contracts sold - designated as hedges 140,939 174,194 Foreign currency contracts purchased - not designated as hedges 161,822 103,975 Foreign currency contracts purchased - designated as hedges 47,906 59,055 Total foreign currency derivatives $ 491,014 $ 374,367 The Company recognized the following in its Condensed Consolidated Financial Statements related to its derivative instruments: Three Months Ended Six Months Ended June 29, 2018 June 30, 2017 June 29, 2018 June 30, 2017 (In thousands) Contracts Designated as Hedges: Foreign Currency Contracts - related to customer sales contracts: Unrealized (loss) gain $ (1,135 ) $ 1,628 $ 1,284 $ 2,717 Realized (loss) gain (3,600 ) 2,249 (4,392 ) 1,627 Foreign Currency Contracts - related to supplier purchase contracts: Unrealized (loss) gain (419 ) (194 ) (270 ) 639 Realized gain (loss) 1,638 (435 ) 1,793 (1,014 ) Unrealized gain (loss) on net investment hedges (1) 15,769 (15,954 ) 8,539 (19,429 ) Contracts Not Designated in a Hedge Relationship: Foreign Currency Contracts - related to customer sales contracts: Unrealized gain 735 1,462 1,649 260 Realized (loss) gain (600 ) 1,715 547 1,590 Foreign Currency Contracts - related to supplier purchases contracts: Unrealized (loss) gain (787 ) (286 ) (1,805 ) 604 Realized gain (loss) 204 (365 ) (324 ) (367 ) (1) The unrealized 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 |
Jun. 29, 2018 | |
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 16, “Commitments and Contingencies” in the Notes to Consolidated Financial Statements in the 2017 Form 10-K. Because the Company did not retain an interest in the ongoing operations of the divested Fluid Handling business, the retained asbestos-related activity has been classified in its Condensed Consolidated Statements of Operations as a component of (Loss) income from discontinued operations. Asbestos Contingencies Claims activity since December 31 related to asbestos claims is as follows: Six Months Ended June 29, 2018 June 30, 2017 (Number of claims) Claims unresolved, beginning of period 17,737 20,567 Claims filed (1) 2,090 2,339 Claims resolved (2) (2,253 ) (4,869 ) Claims unresolved, end of period 17,574 18,037 (1) Claims filed include all asbestos claims for which notification has been received or a file has been opened. (2) 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: June 29, 2018 December 31, 2017 (In thousands) Long-term asbestos insurance asset (1) $ 277,493 $ 284,454 Long-term asbestos insurance receivable (1) 78,920 73,489 Accrued asbestos liability (2) 53,834 50,311 Long-term asbestos liability (3) 298,865 310,326 (1) Included in Other assets in the Condensed Consolidated Balance Sheets. (2) Represents current accruals for probable and reasonably estimable asbestos-related liability costs that the Company believes the subsidiaries will pay, 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. (3) Included in Other liabilities in the Condensed Consolidated Balance Sheets. Management’s analyses are based on currently known facts and assumptions. 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 Company is also involved in 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 |
Jun. 29, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | Segment Information The Company conducts its continuing operations through the Air and Gas Handling and Fabrication Technology segments, which also represent the Company’s reportable segments. ▪ Air and Gas Handling - a global supplier of centrifugal and axial fans, rotary heat exchangers, gas compressors, ventilation control systems and software, and aftermarket services; and ▪ Fabrication Technology - a global supplier of welding equipment, cutting equipment, automated welding and cutting systems, and consumables. 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, which represents Operating income before Restructuring and other related charges. The Company’s segment results were as follows: Three Months Ended Six Months Ended June 29, 2018 June 30, 2017 June 29, 2018 June 30, 2017 (In thousands) Net sales: Air and Gas Handling $ 364,431 $ 353,165 $ 712,083 $ 626,734 Fabrication Technology 560,857 494,797 1,094,130 954,858 $ 925,288 $ 847,962 $ 1,806,213 $ 1,581,592 Segment operating income (1) : Air and Gas Handling $ 26,673 $ 34,702 $ 50,055 $ 57,525 Fabrication Technology 71,092 60,825 135,230 116,464 Corporate and other (15,115 ) (14,345 ) (32,534 ) (27,811 ) $ 82,650 $ 81,182 $ 152,751 $ 146,178 (1) The following is a reconciliation of Income from continuing operations before income taxes to segment operating income: Three Months Ended Six Months Ended June 29, 2018 June 30, 2017 June 29, 2018 June 30, 2017 (In thousands) Income from continuing operations before income taxes $ 60,615 $ 61,598 $ 98,480 $ 112,567 (Gain) loss on short term investments (4,591 ) — 10,128 — Interest expense, net 9,680 8,524 19,268 17,778 Restructuring and other related charges 16,946 11,060 24,875 15,833 Segment operating income $ 82,650 $ 81,182 $ 152,751 $ 146,178 |
Revenue (Policies)
Revenue (Policies) | 6 Months Ended |
Jun. 29, 2018 | |
Revenue [Abstract] | |
Revenue from Contract with Customer [Text Block] | Revenue The Company accounts for revenue in accordance with Topic 606, “Revenue from Contracts with Customers,” which the Company adopted on January 1, 2018, using the full retrospective method. Accordingly, the Company recognizes revenue when control of promised goods or services is transferred to the customer. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for transferring the goods or services. The nature of the Company’s contracts gives rise to certain types of variable consideration, including rebates and other discounts. The Company includes estimated amounts of variable consideration in the transaction price to the extent that it is probable there will not be a significant reversal of revenue. Estimates are based on historical or anticipated performance and represent the Company’s best judgment at the time. Any estimates are evaluated on a quarterly basis until the uncertainty is resolved. The Company provides a variety of products and services to its customers. Most of the Company’s contracts consist of a single, distinct performance obligation or promise to transfer goods or services to a customer. For contracts that include multiple performance obligations, the Company allocates the total transaction price to each performance obligation using the Company’s best estimate of the standalone selling price of each identified performance obligation. A majority of revenue recognized by the Company relates to contracts with customers for standard or off-the-shelf products. As control typically transfers to the customer upon delivery of the product in these circumstances, revenue is generally recognized at that point in time. For service contracts, the Company recognizes revenue ratably over the period of performance as the customer simultaneously receives and consumes the benefits of the services provided. The following tables disaggregate the Company’s revenue by segment and timing of transfer: Three Months Ended June 29, 2018 June 30, 2017 Fabrication Technology Air and Gas Handling Fabrication Technology Air and Gas Handling (in thousands) Point in time $ 560,857 $ 101,755 $ 492,597 $ 129,509 Over time — 262,676 2,200 223,656 Total $ 560,857 $ 364,431 $ 494,797 $ 353,165 Six Months Ended June 29, 2018 June 30, 2017 Fabrication Technology Air and Gas Handling Fabrication Technology Air and Gas Handling (in thousands) Point in time $ 1,093,870 $ 315,161 $ 952,658 $ 336,683 Over time 260 396,922 2,200 290,051 Total $ 1,094,130 $ 712,083 $ 954,858 $ 626,734 In certain contracts, particularly within the Air and Gas Handling segment, the Company is engaged to engineer and build highly-customized, large-scale products and systems. In these circumstances, the Company produces an asset with no alternative use and has a right to payment for performance completed to date. As a result, revenue is recognized over time based on progress to date. To measure progress, the Company uses an input method based on costs incurred relative to total estimated costs. Under this method, contract revenues are recognized over the performance period of the contract. The amount recognized is directly proportionate to the costs incurred as a percentage of total estimated costs for the entirety of the contract. This method requires estimates to determine the appropriate cost and revenue recognition. Significant management judgments and estimates, including estimated costs to complete projects, must be made and used in connection with revenue recognized during each period. Current estimates may be revised as additional information becomes available. The revisions are recorded in income in the period in which they are determined using the cumulative catch-up method of accounting. As of June 29, 2018, the Air and Gas Handling business had $837.5 million of remaining performance obligations, which is also referred to as total backlog. Of that total backlog, the Company expects to recognize approximately 64% as revenue in 2018 and an additional 36% thereafter. Given the nature of these long-term contracts, the Company is often paid at various points throughout the process, based on the contractual terms. The Company applies the available practical expedient involving the existence of a significant financing component. As the Company generally does not receive payments greater than one year in advance or arrears of revenue recognition, the Company does not consider any arrangements to include financing components. Any recognized revenues in excess of customer billings are recorded as a component of Trade receivables. Billings to customers in excess of recognized revenues are recorded as a component of Customer advances and billings in excess of costs incurred. For long-term contracts, amounts are billed as work progresses, based on the specified timeline included in the contractual terms. Each contract is evaluated individually to determine the net asset or net liability position. As of June 29, 2018 and December 31, 2017, there were $203.6 million and $203.9 million , respectively, of revenues in excess of billings and $79.7 million and $94.2 million , respectively, of billings in excess of revenues on long-term contracts in the Condensed Consolidated Balance Sheets. For contracts recognized at a point in time, revenue recognition and billing typically occur simultaneously. The Company’s Fabrication Technology business formulates, develops, manufactures and supplies consumable products and equipment. The vast majority of total revenue from the Fabrication Technology business is recognized at a point in time. As a result, of the total amount of remaining unsatisfied performance obligations, the majority relate to ship and bill arrangements. Given the nature of this business, the total amount of unsatisfied performance obligations with an original contract duration of greater than one year as of June 29, 2018 is immaterial. In some circumstances for both over time and point in time contracts, customers are billed in advance of revenue recognition, resulting in contract liabilities. As of December 31, 2017 and 2016, total contract liabilities were $133.3 million and $137.6 million , respectively. During the three and six months ended June 29, 2018, revenue recognized that was included in the contract liability balance at the beginning of the year was $40.6 million and $97.9 million , respectively. Of this total 71.7% and 70.6% , respectively, was related to long-term contracts which have met the criteria for over time recognition. During the three and six months ended June 30, 2017, revenue recognized that was included in the contract liability balance at the beginning of the year was $31.9 million and $97.7 million , respectively. Of this total 68.4% and 73.2% , respectively, was related to long-term contracts which have met the criteria for over time recognition. As of June 29, 2018 and June 30, 2017, total contract liabilities were $143.8 million and $130.1 million , respectively. The period of benefit for the Company’s incremental costs of obtaining a contract would generally have less than a one-year duration; therefore, the Company applies the practical expedient available and expenses costs to obtain a contract when incurred. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 29, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | The key components of (Loss) income from discontinued operations for the three and six months ended June 29, 2018 and June 30, 2017 were as follows: Three Months Ended Six Months Ended June 29, 2018 June 30, 2017 June 29, 2018 June 30, 2017 (In thousands) Net sales $ — $ 117,870 $ — $ 229,166 Cost of sales — 75,236 — 146,994 Selling, general and administrative expense (1) 2,123 30,592 4,594 60,955 Divestiture-related expense, net (2) 1,283 750 2,358 1,600 Restructuring and other related items — (10,589 ) — (8,262 ) Operating (loss) income (3,406 ) 21,881 (6,952 ) 27,879 Interest income (3) — 106 — 265 Loss on disposal (4,337 ) — (4,337 ) — (Loss) income from discontinued operations before income taxes (7,743 ) 21,987 (11,289 ) 28,144 Income tax expense (4) 17,986 5,376 17,277 8,437 (Loss) income from discontinued operations, net of taxes $ (25,729 ) $ 16,611 $ (28,566 ) $ 19,707 (1) Pursuant to the Purchase Agreement, the Company retained its asbestos-related contingencies and insurance coverages. However, as the Company did not retain an interest in the ongoing operations of the business subject to the contingencies, the Company has classified asbestos-related activity in its Condensed Consolidated Statements of Income as part of (Loss) income from discontinued operations. See Note 14, “Commitments and Contingencies” for further information. (2) Primarily related to professional and consulting fees associated with the divestiture including due diligence and preparation of regulatory filings, as well as employee benefit arrangements and other disposition-related activities. (3) Interest expense has not been allocated to the discontinued operations. (4) Income tax expense for the three months ended June 29, 2018 was primarily related to incremental tax expense recognized due to changes in the estimated gain allocation by jurisdiction. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 29, 2018 | |
Revenue [Abstract] | |
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | The following tables disaggregate the Company’s revenue by segment and timing of transfer: Three Months Ended June 29, 2018 June 30, 2017 Fabrication Technology Air and Gas Handling Fabrication Technology Air and Gas Handling (in thousands) Point in time $ 560,857 $ 101,755 $ 492,597 $ 129,509 Over time — 262,676 2,200 223,656 Total $ 560,857 $ 364,431 $ 494,797 $ 353,165 Six Months Ended June 29, 2018 June 30, 2017 Fabrication Technology Air and Gas Handling Fabrication Technology Air and Gas Handling (in thousands) Point in time $ 1,093,870 $ 315,161 $ 952,658 $ 336,683 Over time 260 396,922 2,200 290,051 Total $ 1,094,130 $ 712,083 $ 954,858 $ 626,734 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 6 Months Ended |
Jun. 29, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share - Basic and Diluted [Table Text Block] | Net income per share from continuing operations was computed as follows: Three Months Ended Six Months Ended June 29, 2018 June 30, 2017 June 29, 2018 June 30, 2017 (In thousands, except share data) Computation of Net income per share from continuing operations: Net income from continuing operations attributable to Colfax Corporation (1) $ 64,186 $ 36,783 $ 91,558 $ 72,229 Weighted-average shares of Common stock outstanding - basic 122,685,878 123,203,512 123,106,702 123,150,462 Net income per share from continuing operations - basic $ 0.52 $ 0.30 $ 0.74 $ 0.59 Computation of Net income per share from continuing operations - diluted: Net income from continuing operations attributable to Colfax Corporation (1) $ 64,186 $ 36,783 $ 91,558 $ 72,229 Weighted-average shares of Common stock outstanding - basic 122,685,878 123,203,512 123,106,702 123,150,462 Net effect of potentially dilutive securities - stock options and restricted stock units 286,867 750,614 403,664 730,560 Weighted-average shares of Common stock outstanding - diluted 122,972,745 123,954,126 123,510,366 123,881,022 Net income per share from continuing operations - diluted $ 0.52 $ 0.30 $ 0.74 $ 0.58 (1) Net income from continuing operations attributable to Colfax Corporation for the respective periods is calculated using Net income from continuing operations less the income attributable to noncontrolling interest, net of taxes. |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jun. 29, 2018 | |
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 June 29, 2018 and June 30, 2017 . All amounts are net of tax and noncontrolling interest, if any. 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, 2018 $ (84,338 ) $ (525,324 ) $ 30,138 $ (579,524 ) Other comprehensive income (loss) before reclassifications: Foreign currency translation adjustment 706 (138,014 ) (373 ) (137,681 ) Gain on long-term intra-entity foreign currency transactions — 9,861 — 9,861 Gain on net investment hedges — — 8,539 8,539 Unrealized loss on cash flow hedges — — (1,710 ) (1,710 ) Other comprehensive income (loss) before reclassifications 706 (128,153 ) 6,456 (120,991 ) Amounts reclassified from Accumulated other comprehensive loss (1) 1,835 — — 1,835 Net Other comprehensive income (loss) 2,541 (128,153 ) 6,456 (119,156 ) Balance at June 29, 2018 $ (81,797 ) $ (653,477 ) $ 36,594 $ (698,680 ) 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, 2017 $ (181,189 ) $ (860,789 ) $ 53,633 $ (988,345 ) Other comprehensive (loss) income before reclassifications: Foreign currency translation adjustment (3,781 ) 158,603 (18 ) 154,804 Gain on long-term intra-entity foreign currency transactions — 6,136 — 6,136 Loss on net investment hedges — — (19,429 ) (19,429 ) Unrealized gain on cash flow hedges — — 5,015 5,015 Other comprehensive (loss) income before reclassifications (3,781 ) 164,739 (14,432 ) 146,526 Amounts reclassified from Accumulated other comprehensive loss (1) 2,727 — — 2,727 Net Other comprehensive (loss) income (1,054 ) 164,739 (14,432 ) 149,253 Balance at June 30, 2017 $ (182,243 ) $ (696,050 ) $ 39,201 $ (839,092 ) (1) Included in the computation of net periodic benefit cost. See Note 12, “Net Periodic Benefit Cost - Defined Benefit Plans” for additional details. |
Inventories, Net (Tables)
Inventories, Net (Tables) | 6 Months Ended |
Jun. 29, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | Inventories, net consisted of the following: June 29, 2018 December 31, 2017 (In thousands) Raw materials $ 151,301 $ 141,827 Work in process 94,575 74,704 Finished goods 286,696 254,479 532,572 471,010 Less: customer progress payments — (2,308 ) Less: allowance for excess, slow-moving and obsolete inventory (42,413 ) (39,075 ) Inventories, net $ 490,159 $ 429,627 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 29, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | Long-term debt consisted of the following: June 29, 2018 December 31, 2017 (In thousands) Senior unsecured notes $ 403,595 $ 414,862 Term loans 559,949 615,095 Revolving credit facilities and other 110,051 31,114 Total debt 1,073,595 1,061,071 Less: current portion (6,180 ) (5,766 ) Long-term debt $ 1,067,415 $ 1,055,305 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 29, 2018 | |
Accrued Liabilities [Abstract] | |
Schedule of Accrued Liabilities [Table Text Block] | Accrued liabilities in the Condensed Consolidated Balance Sheets consisted of the following: June 29, 2018 December 31, 2017 (In thousands) Accrued payroll $ 97,716 $ 98,132 Accrued taxes 37,608 53,939 Accrued asbestos-related liability 53,834 50,311 Warranty liability - current portion 32,259 32,428 Accrued restructuring liability - current portion 14,561 12,509 Accrued third-party commissions 12,627 14,014 Other 84,441 97,299 Accrued liabilities $ 333,046 $ 358,632 |
Schedule of Product Warranty Liability [Table Text Block] | The activity in the Company’s warranty liability consisted of the following: Six Months Ended June 29, 2018 June 30, 2017 (In thousands) Warranty liability, beginning of period $ 34,177 $ 30,222 Accrued warranty expense 11,146 8,733 Changes in estimates related to pre-existing warranties 1,137 271 Cost of warranty service work performed (11,293 ) (11,403 ) Acquisitions — 13 Foreign exchange translation effect (1,189 ) 1,114 Warranty liability, end of period $ 33,978 $ 28,950 |
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 June 29, 2018 Balance at Beginning of Period Provisions Payments Foreign Currency Translation Balance at End of Period (3) (In thousands) Restructuring and other related charges: Air and Gas Handling : Termination benefits (1) $ 12,038 $ 10,358 $ (12,199 ) $ (501 ) $ 9,696 Facility closure costs (2) (217 ) 1,415 (1,040 ) 122 280 11,821 11,773 (13,239 ) (379 ) 9,976 Non-cash charges (2) 118 11,891 Fabrication Technology: Termination benefits (1) 660 5,817 (5,605 ) (36 ) 836 Facility closure costs (2) 42 7,148 (3,439 ) (2 ) 3,749 702 12,965 (9,044 ) (38 ) 4,585 Corporate and Other: Facility closure costs (2) 84 19 (103 ) — — 84 19 (103 ) — — Total $ 12,607 $ 24,757 $ (22,386 ) $ (417 ) $ 14,561 Non-cash charges (2) 118 $ 24,875 (1) Includes severance and other termination benefits, including outplacement services. (2) Includes the cost of relocating associates, relocating equipment and lease termination expense in connection with the closure of facilities. (3) As of June 29, 2018 , $14.6 million of the Company’s restructuring liability was included in Accrued liabilities |
Net Periodic Benefit Cost-Def33
Net Periodic Benefit Cost-Defined Benefit Plans (Tables) | 6 Months Ended |
Jun. 29, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Costs [Table Text Block] | The following table sets forth the components of total net periodic benefit cost of the Company’s defined benefit pension plans and other post-retirement employee benefit plans: Three Months Ended Six Months Ended June 29, 2018 June 30, 2017 June 29, 2018 June 30, 2017 (In thousands) Pension Benefits - U.S. Plans: Service cost $ 40 $ 47 $ 81 $ 93 Interest cost 1,810 3,866 3,621 7,745 Expected return on plan assets (2,639 ) (5,340 ) (5,278 ) (10,679 ) Amortization 913 1,618 1,828 3,237 Net periodic benefit cost $ 124 $ 191 $ 252 $ 396 Pension Benefits - Non-U.S. Plans: Service cost $ 617 $ 1,053 $ 1,246 $ 1,998 Interest cost 5,668 6,667 9,550 13,179 Expected return on plan assets (6,444 ) (6,837 ) (11,119 ) (13,410 ) Amortization 258 683 526 1,673 Net periodic benefit cost $ 99 $ 1,566 $ 203 $ 3,440 Other Post-Retirement Benefits: Service cost $ 6 $ 11 $ 13 $ 21 Interest cost 123 242 246 485 Amortization (22 ) (100 ) (44 ) (200 ) Net periodic benefit cost $ 107 $ 153 $ 215 $ 306 During the three and six months ended June 30, 2017 , net periodic benefit cost of $1.2 million and $2.3 million , respectively, are included in (Loss) income from discontinued operations, net of taxes . |
Financial Instruments and Fai34
Financial Instruments and Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 29, 2018 | |
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: June 29, 2018 Level Level Level Total (In thousands) Assets: Cash equivalents $ 25,095 $ — $ — $ 25,095 Foreign currency contracts related to sales - designated as hedges — 965 — 965 Foreign currency contracts related to sales - not designated as hedges — 1,121 — 1,121 Foreign currency contracts related to purchases - designated as hedges — 1,127 — 1,127 Foreign currency contracts related to purchases - not designated as hedges — 795 — 795 Deferred compensation plans — 7,716 — 7,716 $ 25,095 $ 11,724 $ — $ 36,819 Liabilities: Foreign currency contracts related to sales - designated as hedges $ — $ 2,727 $ — $ 2,727 Foreign currency contracts related to sales - not designated as hedges — 145 — 145 Foreign currency contracts related to purchases - designated as hedges — 146 — 146 Foreign currency contracts related to purchases - not designated as hedges — 2,031 — 2,031 Deferred compensation plans — 7,716 — 7,716 $ — $ 12,765 $ — $ 12,765 December 31, 2017 Level Level Level Total (In thousands) Assets: Cash equivalents $ 24,083 $ — $ — $ 24,083 Short term investments — 149,608 — 149,608 Foreign currency contracts related to sales - designated as hedges — 3,287 — 3,287 Foreign currency contracts related to sales - not designated as hedges — 43 — 43 Foreign currency contracts related to purchases - designated as hedges — 493 — 493 Foreign currency contracts related to purchases - not designated as hedges — 1,038 — 1,038 Deferred compensation plans — 6,374 — 6,374 $ 24,083 $ 160,843 $ — $ 184,926 Liabilities: Foreign currency contracts related to sales - designated as hedges $ — $ 1,257 $ — $ 1,257 Foreign currency contracts related to sales - not designated as hedges — 740 — 740 Foreign currency contracts related to purchases - designated as hedges — 1,332 — 1,332 Foreign currency contracts related to purchases - not designated as hedges — 449 — 449 Deferred compensation plans — 6,374 — 6,374 $ — $ 10,152 $ — $ 10,152 There were no transfers in or out of Level One, Two or Three during the six months ended June 29, 2018 . |
Schedule of Foreign Exchange Contracts, Notional Values | As of June 29, 2018 and December 31, 2017 , the Company had foreign currency contracts with the following notional values: June 29, 2018 December 31, 2017 (In thousands) Foreign currency contracts sold - not designated as hedges $ 140,347 $ 37,143 Foreign currency contracts sold - designated as hedges 140,939 174,194 Foreign currency contracts purchased - not designated as hedges 161,822 103,975 Foreign currency contracts purchased - designated as hedges 47,906 59,055 Total foreign currency derivatives $ 491,014 $ 374,367 |
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 June 29, 2018 June 30, 2017 June 29, 2018 June 30, 2017 (In thousands) Contracts Designated as Hedges: Foreign Currency Contracts - related to customer sales contracts: Unrealized (loss) gain $ (1,135 ) $ 1,628 $ 1,284 $ 2,717 Realized (loss) gain (3,600 ) 2,249 (4,392 ) 1,627 Foreign Currency Contracts - related to supplier purchase contracts: Unrealized (loss) gain (419 ) (194 ) (270 ) 639 Realized gain (loss) 1,638 (435 ) 1,793 (1,014 ) Unrealized gain (loss) on net investment hedges (1) 15,769 (15,954 ) 8,539 (19,429 ) Contracts Not Designated in a Hedge Relationship: Foreign Currency Contracts - related to customer sales contracts: Unrealized gain 735 1,462 1,649 260 Realized (loss) gain (600 ) 1,715 547 1,590 Foreign Currency Contracts - related to supplier purchases contracts: Unrealized (loss) gain (787 ) (286 ) (1,805 ) 604 Realized gain (loss) 204 (365 ) (324 ) (367 ) (1) The unrealized loss on net investment hedges is attributable to the change in valuation of Euro denominated debt. |
Commitments and Contingencies35
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 29, 2018 | |
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: Six Months Ended June 29, 2018 June 30, 2017 (Number of claims) Claims unresolved, beginning of period 17,737 20,567 Claims filed (1) 2,090 2,339 Claims resolved (2) (2,253 ) (4,869 ) Claims unresolved, end of period 17,574 18,037 (1) Claims filed include all asbestos claims for which notification has been received or a file has been opened. (2) 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: June 29, 2018 December 31, 2017 (In thousands) Long-term asbestos insurance asset (1) $ 277,493 $ 284,454 Long-term asbestos insurance receivable (1) 78,920 73,489 Accrued asbestos liability (2) 53,834 50,311 Long-term asbestos liability (3) 298,865 310,326 (1) Included in Other assets in the Condensed Consolidated Balance Sheets. (2) Represents current accruals for probable and reasonably estimable asbestos-related liability costs that the Company believes the subsidiaries will pay, 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. (3) Included in Other liabilities in the Condensed Consolidated Balance Sheets. |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 29, 2018 | |
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 June 29, 2018 June 30, 2017 June 29, 2018 June 30, 2017 (In thousands) Net sales: Air and Gas Handling $ 364,431 $ 353,165 $ 712,083 $ 626,734 Fabrication Technology 560,857 494,797 1,094,130 954,858 $ 925,288 $ 847,962 $ 1,806,213 $ 1,581,592 Segment operating income (1) : Air and Gas Handling $ 26,673 $ 34,702 $ 50,055 $ 57,525 Fabrication Technology 71,092 60,825 135,230 116,464 Corporate and other (15,115 ) (14,345 ) (32,534 ) (27,811 ) $ 82,650 $ 81,182 $ 152,751 $ 146,178 (1) The following is a reconciliation of Income from continuing operations before income taxes to segment operating income: Three Months Ended Six Months Ended June 29, 2018 June 30, 2017 June 29, 2018 June 30, 2017 (In thousands) Income from continuing operations before income taxes $ 60,615 $ 61,598 $ 98,480 $ 112,567 (Gain) loss on short term investments (4,591 ) — 10,128 — Interest expense, net 9,680 8,524 19,268 17,778 Restructuring and other related charges 16,946 11,060 24,875 15,833 Segment operating income $ 82,650 $ 81,182 $ 152,751 $ 146,178 |
Recently Issued Accounting Pr37
Recently Issued Accounting Pronouncements Details Textual (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 29, 2018 | Dec. 31, 2017 | |
Tax Cuts And Jobs Act Of 2017, Transition Tax | $ 52,000 | |
Tax Cuts And Jobs Act Of 2017, Incomplete Accounting, Provisional Income Tax Expense (Benefit) | $ 55,000 | |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 5,152 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands, shares in Millions | Dec. 11, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Sale of Short-term Investments, net | $ 139,500 | $ 139,480 | $ 0 | |||
Expenses related to underwriting fees | 5,800 | |||||
Gain on short term investments | 4,591 | |||||
Disposal Group, Including Discontinued Operations, Statement of Income | ||||||
Net sales | 0 | $ 117,870 | 0 | 229,166 | ||
Cost of sales | 0 | 75,236 | 0 | 146,994 | ||
Selling, general and administrative expense | [1] | 2,123 | 30,592 | 4,594 | 60,955 | |
Divestiture-related expense, net | [2] | 1,283 | 750 | 2,358 | 1,600 | |
Restructuring and other related items | 0 | (10,589) | 0 | (8,262) | ||
Operating (loss) income | (3,406) | 21,881 | (6,952) | 27,879 | ||
Interest income | [3] | 0 | 106 | 0 | 265 | |
Loss on disposal | (4,337) | (4,337) | ||||
(Loss) income from discontinued operations before income taxes | (7,743) | 21,987 | (11,289) | 28,144 | ||
Income tax expense | [4] | 17,986 | 5,376 | 17,277 | 8,437 | |
(Loss) income from discontinued operations, net of taxes | $ (25,729) | $ 16,611 | $ (28,566) | 19,707 | ||
Disposal Group, Including Discontinued Operation, Additional Disclosures [Abstract] | ||||||
Cash Provided by Operating Activities, Discontinued Operations | 47,300 | |||||
Cash Used in Investing Activities, Discontinued Operations | $ 2,900 | |||||
Fluid Handling [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Total consideration | $ 860,600 | |||||
Cash consideration for sale | $ 551,000 | |||||
Shares consideration for sale, shares | 3.3 | |||||
Net retirement liabilities as part of the sale | $ 168,000 | |||||
[1] | Pursuant to the Purchase Agreement, the Company retained its asbestos-related contingencies and insurance coverages. However, as the Company did not retain an interest in the ongoing operations of the business subject to the contingencies, the Company has classified asbestos-related activity in its Condensed Consolidated Statements of Income as part of (Loss) income from discontinued operations. See Note 14, “Commitments and Contingencies” for further information. | |||||
[2] | Primarily related to professional and consulting fees associated with the divestiture including due diligence and preparation of regulatory filings, as well as employee benefit arrangements and other disposition-related activities. | |||||
[3] | Interest expense has not been allocated to the discontinued operations. | |||||
[4] | Income tax expense for the three months ended June 29, 2018 was primarily related to incremental tax expense recognized due to changes in the estimated gain allocation by jurisdiction. |
Acquisitions Acquisition (Detai
Acquisitions Acquisition (Details) - 6 months ended Jun. 29, 2018 kr in Millions, $ in Millions | SEK (kr) | USD ($) |
Fabrication Technology | ||
Business Combination, Consideration Transferred | kr 323.1 | $ 41.1 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Total Revenue | $ 40,600 | $ 31,900 | $ 97,900 | $ 97,700 |
Fabrication Technology | ||||
Revenue, Point in time | 560,857 | 492,597 | 1,093,870 | 952,658 |
Revenue, Over time | 2,200 | 260 | 2,200 | |
Total Revenue | 560,857 | 494,797 | 1,094,130 | 954,858 |
Air and Gas Handling | ||||
Revenue, Point in time | 101,755 | 129,509 | 315,161 | 336,683 |
Revenue, Over time | 262,676 | 223,656 | 396,922 | 290,051 |
Total Revenue | $ 364,431 | $ 353,165 | $ 712,083 | $ 626,734 |
Revenue Details Textual (Detail
Revenue Details Textual (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Costs in Excess of Billings | $ 203.6 | $ 203.6 | $ 203.9 | |||
Billings in Excess of Cost | 79.7 | 79.7 | 94.2 | |||
Contract with Customer, Liability, Revenue Recognized | $ 40.6 | $ 31.9 | $ 97.9 | $ 97.7 | ||
Percentage of Revenue related to Long-term contract | 71.70% | 68.40% | 70.60% | 73.20% | ||
Contract with Customer, Liability | $ 143.8 | $ 130.1 | $ 143.8 | $ 130.1 | $ 133.3 | $ 137.6 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-01-01 | ||||||
Revenue remaining performance obligation percentage recognized | 64.00% | 64.00% | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | ||||||
Revenue remaining performance obligation percentage recognized | 36.00% | 36.00% |
Revenue Detail Textuals -2 (Det
Revenue Detail Textuals -2 (Details) $ in Millions | Jun. 29, 2018USD ($) |
Air and Gas [Member] | |
Revenue, Remaining Performance Obligation | $ 837.5 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | ||
Earnings Per Share [Abstract] | |||||
Net income from continuing operations attributable to Colfax Corporation | [1] | $ 64,186 | $ 36,783 | $ 91,558 | $ 72,229 |
Weighted-average shares of Common stock outstanding - basic | 122,685,878 | 123,203,512 | 123,106,702 | 123,150,462 | |
Net income per share from continuing operations, basic | $ 0.52 | $ 0.30 | $ 0.74 | $ 0.59 | |
Net effect of potentially dilutive securities - stock options and restricted stock units | 286,867 | 750,614 | 403,664 | 730,560 | |
Weighted-average shares of Common stock outstanding - diluted | 122,972,745 | 123,954,126 | 123,510,366 | 123,881,022 | |
Net income per share from continuing operations, diluted | $ 0.52 | $ 0.30 | $ 0.74 | $ 0.58 | |
[1] | Net income from continuing operations attributable to Colfax Corporation for the respective periods is calculated using Net income from continuing operations less the income attributable to noncontrolling interest, net of taxes. |
Net Income Per Share (Details T
Net Income Per Share (Details Textual) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3.8 | 2.9 | 3.4 | 2.8 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Income from continuing operations before income taxes | $ 60,615 | $ 61,598 | $ 98,480 | $ 112,567 |
(Benefit) provision for income taxes | $ (6,893) | $ 19,734 | $ (907) | $ 32,312 |
Effective Income Tax Rate, Continuing Operations | (11.40%) | 32.00% | (0.90%) | 28.70% |
Discrete tax benefit | $ 20,800 | $ 26,900 | $ 900 |
Equity (Details - AOCI Componen
Equity (Details - AOCI Components) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 29, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | ||
Changes in Accumulated Other Comprehensive Loss [Line Items] | ||||
Beginning Balance | $ (574,372) | $ (988,345) | ||
Beginning Balance, adjusted for change of accounting principle | $ (579,524) | |||
Foreign currency translation adjustment | (137,681) | 154,804 | ||
Loss on long-term intra-entity foreign currency transactions | 9,861 | 6,136 | ||
Loss on net investment hedges | 8,539 | (19,429) | ||
Unrealized gain on cash flow hedges | (1,710) | 5,015 | ||
Other comprehensive income (loss) before reclassifications | (120,991) | 146,526 | ||
Amounts reclassified from Accumulated other comprehensive loss | [1] | 1,835 | 2,727 | |
Net current period other comprehensive income (loss) | (119,156) | 149,253 | ||
Ending Balance | (698,680) | (839,092) | ||
Net Unrecognized Pension And Other Post-Retirement Benefit Cost [Member] | ||||
Changes in Accumulated Other Comprehensive Loss [Line Items] | ||||
Beginning Balance | (84,338) | (181,189) | ||
Foreign currency translation adjustment | 706 | (3,781) | ||
Loss on long-term intra-entity foreign currency transactions | 0 | 0 | ||
Loss on net investment hedges | 0 | 0 | ||
Unrealized gain on cash flow hedges | 0 | 0 | ||
Other comprehensive income (loss) before reclassifications | 706 | (3,781) | ||
Amounts reclassified from Accumulated other comprehensive loss | [1] | 1,835 | 2,727 | |
Net current period other comprehensive income (loss) | 2,541 | (1,054) | ||
Ending Balance | (81,797) | (182,243) | ||
Foreign Currency Translation Adjustment [Member] | ||||
Changes in Accumulated Other Comprehensive Loss [Line Items] | ||||
Beginning Balance | (525,324) | (860,789) | ||
Foreign currency translation adjustment | (138,014) | 158,603 | ||
Loss on long-term intra-entity foreign currency transactions | 9,861 | 6,136 | ||
Loss on net investment hedges | 0 | 0 | ||
Unrealized gain on cash flow hedges | 0 | 0 | ||
Other comprehensive income (loss) before reclassifications | (128,153) | 164,739 | ||
Amounts reclassified from Accumulated other comprehensive loss | 0 | 0 | ||
Net current period other comprehensive income (loss) | (128,153) | 164,739 | ||
Ending Balance | (653,477) | (696,050) | ||
Unrealized Gain On Hedging Activities [Member] | ||||
Changes in Accumulated Other Comprehensive Loss [Line Items] | ||||
Beginning Balance | 30,138 | 53,633 | ||
Foreign currency translation adjustment | (373) | (18) | ||
Loss on long-term intra-entity foreign currency transactions | 0 | 0 | ||
Loss on net investment hedges | 8,539 | (19,429) | ||
Unrealized gain on cash flow hedges | (1,710) | 5,015 | ||
Other comprehensive income (loss) before reclassifications | 6,456 | (14,432) | ||
Amounts reclassified from Accumulated other comprehensive loss | 0 | 0 | ||
Net current period other comprehensive income (loss) | 6,456 | (14,432) | ||
Ending Balance | $ 36,594 | $ 39,201 | ||
[1] | Included in the computation of net periodic benefit cost. See Note 12, “Net Periodic Benefit Cost - Defined Benefit Plans” for additional details. |
Equity Equity Textual (Details)
Equity Equity Textual (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2018 | Jun. 29, 2018 | Jul. 19, 2018 | Jun. 06, 2018 | Feb. 12, 2018 | |
Stock Repurchase Program, Authorized Amount | $ 100,000 | $ 100,000 | $ 100,000 | ||
Stock Repurchased and Retired During Period, Shares | 4,604,974 | ||||
Stock Repurchased and Retired During Period, Value | $ 143,902 | ||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 56,087 | $ 56,087 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Thousands | Jun. 29, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 151,301 | $ 141,827 |
Work in process | 94,575 | 74,704 |
Finished goods | 286,696 | 254,479 |
Inventory, gross | 532,572 | 471,010 |
Less: customer progress payments | 0 | (2,308) |
Less: allowance for excess, slow-moving and obsolete inventory | (42,413) | (39,075) |
Inventories, net | $ 490,159 | $ 429,627 |
Debt Components (Details)
Debt Components (Details) - USD ($) $ in Thousands | Jun. 29, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Total Debt | $ 1,073,595 | $ 1,061,071 |
Less: current portion | (6,180) | (5,766) |
Long-term debt | 1,067,415 | 1,055,305 |
Senior unsecured notes [Member] | ||
Debt Instrument [Line Items] | ||
Total Debt | 403,595 | 414,862 |
Term Debt [Member] | ||
Debt Instrument [Line Items] | ||
Total Debt | 559,949 | 615,095 |
Revolving credit facilities and other [Member] | ||
Debt Instrument [Line Items] | ||
Total Debt | $ 110,051 | $ 31,114 |
Debt (Details Textual)
Debt (Details Textual) $ in Thousands, € in Millions | Apr. 19, 2017EUR (€) | Jun. 29, 2018USD ($) | Jun. 30, 2017USD ($) | Apr. 19, 2017USD ($) |
Proceeds from borrowings on senior unsecured notes | $ 0 | $ 374,451 | ||
Repayments of Debt | € | € 283.5 | |||
Deferred Finance Costs, Net | 8,100 | |||
Debt discount | 2,600 | |||
Letter of Credit Subfacility, Maximum Borrowing Capacity | 757,800 | |||
Letters of Credit, Amount Outstanding | $ 392,100 | |||
Debt Instrument, Covenant Compliance | As of June 29, 2018, the Company is in compliance with the covenants under the DB Credit Agreement. | |||
DB credit agreement [Member] | ||||
Long-term Debt, Weighted Average Interest Rate | 3.49% | |||
Line of Credit Facility, Remaining Borrowing Capacity | $ 1,200,000 | |||
Senior unsecured notes [Member] | ||||
Proceeds from borrowings on senior unsecured notes | € | € 350 | |||
Euro Bond Coupon Rate | 3.25% | |||
Deferred Finance Costs, Net | $ 6,000 | |||
Bilateral agreements [Member] | ||||
Long-term Debt, Weighted Average Interest Rate | 1.19% | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 214,700 | |||
Outstanding borrowings | $ 52,900 |
Accrued Liabilities Chart (Deta
Accrued Liabilities Chart (Details) - USD ($) $ in Thousands | Jun. 29, 2018 | Dec. 31, 2017 | |
Accrued Liabilities [Abstract] | |||
Accrued payroll | $ 97,716 | $ 98,132 | |
Accrued taxes | 37,608 | 53,939 | |
Accrued asbestos-related liability | [1] | 53,834 | 50,311 |
Warranty liability - current portion | 32,259 | 32,428 | |
Accrued restructuring liability - current portion | 14,561 | 12,509 | |
Accrued third-party commissions | 12,627 | 14,014 | |
Other | 84,441 | 97,299 | |
Accrued liabilities | $ 333,046 | $ 358,632 | |
[1] | Represents current accruals for probable and reasonably estimable asbestos-related liability costs that the Company believes the subsidiaries will pay, 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 | |
Jun. 29, 2018 | Jun. 30, 2017 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Warranty liability, beginning of period | $ 34,177 | $ 30,222 |
Accrued warranty expense | 11,146 | 8,733 |
Changes in estimates related to pre-existing warranties | 1,137 | 271 |
Cost of warranty service work performed | (11,293) | (11,403) |
Acquisitions | 0 | 13 |
Foreign exchange translation effect | (1,189) | 1,114 |
Warranty liability, end of period | $ 33,978 | $ 28,950 |
Restructuring Rollforward (Deta
Restructuring Rollforward (Details) $ in Thousands | 6 Months Ended | |
Jun. 29, 2018USD ($) | ||
Balance at Beginning of Period | $ 12,607 | |
Provisions | 24,875 | |
Non cash charges | 118 | [1] |
Payments | (22,386) | |
Foreign Currency Translation | (417) | |
Balance at End of Period | 14,561 | [2] |
Restructuring Provisions before Non-Cash Charges | 24,757 | |
Air and Gas Handling | ||
Balance at Beginning of Period | 11,821 | |
Provisions | 11,891 | |
Non cash charges | 118 | [1] |
Payments | (13,239) | |
Foreign Currency Translation | (379) | |
Balance at End of Period | 9,976 | [2] |
Restructuring Provisions before Non-Cash Charges | 11,773 | |
Fabrication Technology | ||
Balance at Beginning of Period | 702 | |
Payments | (9,044) | |
Foreign Currency Translation | (38) | |
Balance at End of Period | 4,585 | [2] |
Restructuring Provisions before Non-Cash Charges | 12,965 | |
Corporate and other | ||
Balance at Beginning of Period | 84 | |
Provisions | 19 | |
Payments | (103) | |
Foreign Currency Translation | 0 | |
Balance at End of Period | 0 | [2] |
Termination benefits [Member] | Air and Gas Handling | ||
Balance at Beginning of Period | 12,038 | [3] |
Provisions | 10,358 | [3] |
Payments | (12,199) | [3] |
Foreign Currency Translation | (501) | [3] |
Balance at End of Period | 9,696 | [2],[3] |
Termination benefits [Member] | Fabrication Technology | ||
Balance at Beginning of Period | 660 | [3] |
Provisions | 5,817 | [3] |
Payments | (5,605) | [3] |
Foreign Currency Translation | (36) | [3] |
Balance at End of Period | 836 | [2],[3] |
Facility closure costs [Member] | Air and Gas Handling | ||
Balance at Beginning of Period | (217) | [1] |
Provisions | 1,415 | [1] |
Payments | (1,040) | [1] |
Foreign Currency Translation | 122 | [1] |
Balance at End of Period | 280 | [1],[2] |
Facility closure costs [Member] | Fabrication Technology | ||
Balance at Beginning of Period | 42 | [1] |
Provisions | 7,148 | [1] |
Payments | (3,439) | [1] |
Foreign Currency Translation | (2) | [1] |
Balance at End of Period | 3,749 | [1],[2] |
Facility closure costs [Member] | Corporate and other | ||
Balance at Beginning of Period | 84 | [1] |
Provisions | 19 | [1] |
Payments | (103) | [1] |
Foreign Currency Translation | 0 | [1] |
Balance at End of Period | $ 0 | [1],[2] |
[1] | Includes the cost of relocating associates, relocating equipment and lease termination expense in connection with the closure of facilities. | |
[2] | As of June 29, 2018, $14.6 million of the Company’s restructuring liability was included in Accrued liabilities. | |
[3] | Includes severance and other termination benefits, including outplacement services. |
Accrued Liabilities (Details Te
Accrued Liabilities (Details Textual) - USD ($) $ in Thousands | Jun. 29, 2018 | Dec. 31, 2017 |
Restructuring Cost and Reserve [Line Items] | ||
Accrued restructuring liability - current portion | $ 14,561 | $ 12,509 |
Minimum [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Expected Cost Remaining | 40,000 | |
Maximum [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Expected Cost Remaining | $ 50,000 |
Net Periodic Benefit Cost-Def55
Net Periodic Benefit Cost-Defined Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Discontinued Operation [Member] | ||||
Net periodic benefit cost (income) | $ 1,200 | $ 2,300 | ||
Pension Benefits-U.S. Plans: [Member] | ||||
Service cost | $ 40 | 47 | $ 81 | 93 |
Interest cost | 1,810 | 3,866 | 3,621 | 7,745 |
Expected return on plan assets | (2,639) | (5,340) | (5,278) | (10,679) |
Amortization | 913 | 1,618 | 1,828 | 3,237 |
Net periodic benefit cost (income) | 124 | 191 | 252 | 396 |
Pension Benefits - Non-U.S. Plans: [Member] | ||||
Service cost | 617 | 1,053 | 1,246 | 1,998 |
Interest cost | 5,668 | 6,667 | 9,550 | 13,179 |
Expected return on plan assets | (6,444) | (6,837) | (11,119) | (13,410) |
Amortization | 258 | 683 | 526 | 1,673 |
Net periodic benefit cost (income) | 99 | 1,566 | 203 | 3,440 |
Other Post-Retirement Benefits: [Member] | ||||
Service cost | 6 | 11 | 13 | 21 |
Interest cost | 123 | 242 | 246 | 485 |
Amortization | (22) | (100) | (44) | (200) |
Net periodic benefit cost (income) | $ 107 | $ 153 | $ 215 | $ 306 |
Fair Value Hierarchy (Details)
Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Jun. 29, 2018 | Dec. 31, 2017 |
Cash equivalents | $ 25,095 | $ 24,083 |
Short-term Investments | 0 | 149,608 |
Deferred compensation plans asset | 7,716 | 6,374 |
Deferred compensation plans liability | 7,716 | 6,374 |
Assets, Fair Value Disclosure | 36,819 | 184,926 |
Liabilities, Fair Value Disclosure | 12,765 | 10,152 |
Fair Value, Inputs, Level 1 [Member] | ||
Cash equivalents | 25,095 | 24,083 |
Assets, Fair Value Disclosure | 25,095 | 24,083 |
Fair Value, Inputs, Level 2 [Member] | ||
Short-term Investments | 149,608 | |
Deferred compensation plans asset | 7,716 | 6,374 |
Deferred compensation plans liability | 7,716 | 6,374 |
Assets, Fair Value Disclosure | 11,724 | 160,843 |
Liabilities, Fair Value Disclosure | 12,765 | 10,152 |
Foreign currency contracts related to customer sales contracts | ||
Foreign currency contracts designated as hedges, Assets | 965 | 3,287 |
Foreign currency contracts not designated as hedges, Assets | 1,121 | 43 |
Foreign currency contracts designated as hedges, Liabilities | 2,727 | 1,257 |
Foreign currency contracts not designated as hedges, Liability | 145 | 740 |
Foreign currency contracts related to customer sales contracts | Fair Value, Inputs, Level 2 [Member] | ||
Foreign currency contracts designated as hedges, Assets | 965 | 3,287 |
Foreign currency contracts not designated as hedges, Assets | 1,121 | 43 |
Foreign currency contracts designated as hedges, Liabilities | 2,727 | 1,257 |
Foreign currency contracts not designated as hedges, Liability | 145 | 740 |
Foreign currency contracts related to supplier purchase contracts | ||
Foreign currency contracts designated as hedges, Assets | 1,127 | 493 |
Foreign currency contracts not designated as hedges, Assets | 795 | 1,038 |
Foreign currency contracts designated as hedges, Liabilities | 146 | 1,332 |
Foreign currency contracts not designated as hedges, Liability | 2,031 | 449 |
Foreign currency contracts related to supplier purchase contracts | Fair Value, Inputs, Level 2 [Member] | ||
Foreign currency contracts designated as hedges, Assets | 1,127 | 493 |
Foreign currency contracts not designated as hedges, Assets | 795 | 1,038 |
Foreign currency contracts designated as hedges, Liabilities | 146 | 1,332 |
Foreign currency contracts not designated as hedges, Liability | $ 2,031 | $ 449 |
Foreign Currency Contracts Noti
Foreign Currency Contracts Notional Values (Details) - USD ($) $ in Thousands | Jun. 29, 2018 | Dec. 31, 2017 |
Derivative, Notional Amount | $ 491,014 | $ 374,367 |
Foreign currency contracts related to customer sales contracts | Not Designated As Hedging Instrument [Member] | ||
Derivative, Notional Amount | 140,347 | 37,143 |
Foreign currency contracts related to customer sales contracts | Designated As Hedging Instrument [Member] | ||
Derivative, Notional Amount | 140,939 | 174,194 |
Foreign currency contracts related to supplier purchase contracts | Not Designated As Hedging Instrument [Member] | ||
Derivative, Notional Amount | 161,822 | 103,975 |
Foreign currency contracts related to supplier purchase contracts | Designated As Hedging Instrument [Member] | ||
Derivative, Notional Amount | $ 47,906 | $ 59,055 |
Gain (Loss) On Derivative Instr
Gain (Loss) On Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | ||
Unrealized (loss) gain on net investment hedges | $ 8,539 | $ (19,429) | |||
Designated As Hedging Instrument [Member] | |||||
Unrealized (loss) gain on net investment hedges | [1] | $ 15,769 | $ (15,954) | 8,539 | (19,429) |
Designated As Hedging Instrument [Member] | Foreign currency contracts related to customer sales contracts | |||||
Unrealized gain (loss) on Foreign Currency Contracts | (1,135) | 1,628 | 1,284 | 2,717 | |
Realized gain (loss) on Foreign Currency Contracts | (3,600) | 2,249 | (4,392) | 1,627 | |
Designated As Hedging Instrument [Member] | Foreign currency contracts related to supplier purchase contracts | |||||
Unrealized gain (loss) on Foreign Currency Contracts | (419) | (194) | (270) | 639 | |
Realized gain (loss) on Foreign Currency Contracts | 1,638 | (435) | 1,793 | (1,014) | |
Not Designated As Hedging Instrument [Member] | Foreign currency contracts related to customer sales contracts | |||||
Unrealized gain (loss) on Foreign Currency Contracts | 735 | 1,462 | 1,649 | 260 | |
Realized gain (loss) on Foreign Currency Contracts | (600) | 1,715 | 547 | 1,590 | |
Not Designated As Hedging Instrument [Member] | Foreign currency contracts related to supplier purchase contracts | |||||
Unrealized gain (loss) on Foreign Currency Contracts | (787) | (286) | (1,805) | 604 | |
Realized gain (loss) on Foreign Currency Contracts | $ 204 | $ (365) | $ (324) | $ (367) | |
[1] | The unrealized loss on net investment hedges is attributable to the change in valuation of Euro denominated debt. |
Financial Instruments and Fai59
Financial Instruments and Fair Value Measurements (Details Textual) - USD ($) $ in Billions | Jun. 29, 2018 | Dec. 31, 2017 |
Financial Instruments and Fair Value Measurements [Abstract] | ||
Long-term Debt, Fair Value | $ 1.1 | $ 1.1 |
Claims Rollforward (Details)
Claims Rollforward (Details) - Asbestos_claims | 6 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | ||
Commitments and Contingencies Disclosure [Abstract] | |||
Claims unresolved, beginning of period | 17,737 | 20,567 | |
Claims filed | [1] | 2,090 | 2,339 |
Claims resolved | [2] | (2,253) | (4,869) |
Claims unresolved, end of period | 17,574 | 18,037 | |
[1] | Claims filed include all asbestos claims for which notification has been received or a file has been opened. | ||
[2] | 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 | Jun. 29, 2018 | Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Long-term asbestos insurance asset | [1] | $ 277,493 | $ 284,454 |
Long-term asbestos insurance receivable | [1] | 78,920 | 73,489 |
Accrued asbestos liability | [2] | 53,834 | 50,311 |
Long-term asbestos liability | [3] | $ 298,865 | $ 310,326 |
[1] | Included in Other assets in the Condensed Consolidated Balance Sheets. | ||
[2] | Represents current accruals for probable and reasonably estimable asbestos-related liability costs that the Company believes the subsidiaries will pay, 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. | ||
[3] | Included in Other liabilities in the Condensed Consolidated Balance Sheets. |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | ||
Net sales | $ 925,288 | $ 847,962 | $ 1,806,213 | $ 1,581,592 | |
Income from continuing operations before income taxes | 60,615 | 61,598 | 98,480 | 112,567 | |
(Gain) loss on short term investments | (4,591) | 0 | 10,128 | 0 | |
Interest expense | 9,680 | 8,524 | 19,268 | 17,778 | |
Restructuring and other related charges | 16,946 | 11,060 | 24,875 | 15,833 | |
Segment Operating Income (Loss) | [1] | 82,650 | 81,182 | 152,751 | 146,178 |
Air and Gas Handling | |||||
Net sales | 364,431 | 353,165 | 712,083 | 626,734 | |
Segment Operating Income (Loss) | [1] | 26,673 | 34,702 | 50,055 | 57,525 |
Fabrication Technology | |||||
Net sales | 560,857 | 494,797 | 1,094,130 | 954,858 | |
Segment Operating Income (Loss) | [1] | 71,092 | 60,825 | 135,230 | 116,464 |
Corporate and other | |||||
Segment Operating Income (Loss) | [1] | $ (15,115) | $ (14,345) | $ (32,534) | $ (27,811) |
[1] | The following is a reconciliation of Income from continuing operations before income taxes to segment operating income: |