COVER PAGE
COVER PAGE | 3 Months Ended |
Apr. 02, 2021shares | |
Entity Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Apr. 2, 2021 |
Document Transition Report | false |
Entity File Number | 001-34045 |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 54-1887631 |
Entity Address, Address Line One | 420 National Business Parkway, |
Entity Address, Address Line Two | 5th Floor |
Entity Address, City or Town | Annapolis Junction, |
Entity Address, State or Province | MD |
Entity Address, Postal Zip Code | 20701 |
City Area Code | (301) |
Local Phone Number | 323-9000 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 135,597,331 |
Entity Registrant Name | Colfax CORP |
Entity Central Index Key | 0001420800 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2021 |
Amendment Flag | false |
Common Stock | |
Entity Information [Line Items] | |
Title of 12(b) Security | Common Stock, par value $0.001 per share |
Trading Symbol | CFX |
Security Exchange Name | NYSE |
Tangible Equity Unit | |
Entity Information [Line Items] | |
Title of 12(b) Security | 5.75% Tangible Equity Units |
Trading Symbol | CFXA |
Security Exchange Name | NYSE |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Income Statement [Abstract] | ||
Net sales | $ 879,211 | $ 816,356 |
Cost of sales | 508,134 | 468,142 |
Gross profit | 371,077 | 348,214 |
Selling, general and administrative expense | 305,724 | 292,197 |
Restructuring and other related charges | 4,046 | 9,180 |
Operating income | 61,307 | 46,837 |
Interest expense, net | 25,660 | 24,796 |
Income from continuing operations before income taxes | 35,647 | 22,041 |
Income tax expense | 7,917 | 13,173 |
Net income from continuing operations | 27,730 | 8,868 |
Loss from discontinued operations, net of taxes | (7,490) | (3,360) |
Net income | 20,240 | 5,508 |
Less: income attributable to noncontrolling interest, net of taxes | 1,166 | 1,027 |
Net income attributable to Colfax Corporation | $ 19,074 | $ 4,481 |
Net income (loss) per share - basic | ||
Net income (loss) per share, continuing operations, basic (in usd per share) | $ 0.19 | $ 0.06 |
Net income (loss) per share, discontinued operations, basic (in usd per share) | (0.05) | (0.02) |
Net income (loss) per share, basic (in usd per share) | 0.14 | 0.03 |
Net income (loss) per share - diluted | ||
Continuing operations (in usd per share) | 0.19 | 0.06 |
Discontinued operation, (in usd per share) | (0.05) | (0.02) |
Consolidated operations (in usd per share) | $ 0.13 | $ 0.03 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 20,240 | $ 5,508 |
Other comprehensive income (loss): | ||
Foreign currency translation, net of tax expense of $2,280 and $519 | (53,181) | (172,792) |
Unrealized gain on hedging activities, net of tax expense of $4,243 and $3,873 | 12,381 | 11,036 |
Amounts reclassified from Accumulated other comprehensive loss: | ||
Amortization of pension and other post-retirement net actuarial gain, net of tax expense of $317 and $252 | 1,055 | 866 |
Other comprehensive loss | (39,745) | (160,890) |
Comprehensive loss | (19,505) | (155,382) |
Less: comprehensive income (loss) attributable to noncontrolling interest | 1,042 | (1,567) |
Comprehensive loss attributable to Colfax Corporation | $ (20,547) | $ (153,815) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Parenthetical] - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Foreign currency translation, tax | $ 2,280 | $ 519 |
Unrealized gain on hedging activities, tax | 4,243 | 3,873 |
Amortization of pension and other post-retirement net actuarial loss, tax | $ 317 | $ 252 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Apr. 02, 2021 | Dec. 31, 2020 |
ASSETS | ||
Cash and cash equivalents | $ 763,653 | $ 97,068 |
Trade receivables, less allowance for credit losses of $35,560 and $37,666 | 553,785 | 517,006 |
Inventories, net | 606,208 | 564,822 |
Prepaid expenses | 75,205 | 69,515 |
Other current assets | 79,114 | 113,418 |
Total current assets | 2,077,965 | 1,361,829 |
Property, plant and equipment, net | 479,240 | 486,960 |
Goodwill | 3,331,531 | 3,314,541 |
Intangible assets, net | 1,652,957 | 1,663,446 |
Lease asset - right of use | 170,620 | 173,942 |
Other assets | 354,301 | 350,831 |
Total assets | 8,066,614 | 7,351,549 |
LIABILITIES AND EQUITY | ||
Current portion of long-term debt | 727,369 | 27,074 |
Accounts payable | 406,744 | 330,251 |
Accrued liabilities | 424,298 | 454,333 |
Total current liabilities | 1,558,411 | 811,658 |
Long-term debt, less current portion | 1,481,997 | 2,204,169 |
Non-current lease liability | 137,329 | 139,230 |
Other liabilities | 597,808 | 608,618 |
Total liabilities | 3,775,545 | 3,763,675 |
Equity: | ||
Common stock, $0.001 par value; 400,000,000 shares authorized; 135,597,331 and 118,496,687 issued and outstanding as of April 2, 2021 and December 31, 2020, respectively | 135 | 118 |
Additional paid-in capital | 4,201,745 | 3,478,008 |
Retained earnings | 536,441 | 517,367 |
Accumulated other comprehensive loss | (491,727) | (452,106) |
Total Colfax Corporation equity | 4,246,594 | 3,543,387 |
Noncontrolling interest | 44,475 | 44,487 |
Total equity | 4,291,069 | 3,587,874 |
Total liabilities and equity | $ 8,066,614 | $ 7,351,549 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($) $ in Thousands | Apr. 02, 2021 | Dec. 31, 2020 |
Condensed Consolidated Balance Sheet (Parenthetical) [Abstract] | ||
Trade receivables, allowance for doubtful accounts | $ 35,560 | $ 37,666 |
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 | 135,597,331 | 118,496,687 |
Common Stock, Shares, Outstanding | 135,597,331 | 118,496,687 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENT OF EQUITY - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Loss | Noncontrolling Interest |
Balance at Dec. 31, 2019 | $ 3,489,628 | $ (4,818) | $ 118 | $ 3,445,597 | $ 479,560 | $ (4,818) | $ (483,845) | $ 48,198 |
Beginning Balance, Shares (in shares) at Dec. 31, 2019 | 118,059,082 | |||||||
Net income (loss) | 5,508 | 4,481 | 1,027 | |||||
Distributions to noncontrolling owners | (8) | (8) | ||||||
Other comprehensive loss, net of tax | (160,890) | (158,297) | (2,593) | |||||
Common stock-based award activity (in shares) | 268,323 | |||||||
Common stock-based award activity | 8,344 | 8,344 | ||||||
Balance at Apr. 03, 2020 | 3,337,764 | $ 118 | 3,453,941 | 479,223 | (642,142) | 46,624 | ||
Ending Balance, Shares (in shares) at Apr. 03, 2020 | 118,327,405 | |||||||
Balance at Dec. 31, 2020 | 3,587,874 | $ 118 | 3,478,008 | 517,367 | (452,106) | 44,487 | ||
Beginning Balance, Shares (in shares) at Dec. 31, 2020 | 118,496,687 | |||||||
Net income (loss) | 20,240 | 19,074 | 1,166 | |||||
Distributions to noncontrolling owners | (1,054) | (1,054) | ||||||
Other comprehensive loss, net of tax | (39,745) | (39,621) | (124) | |||||
Conversion of tangible equity units into common stock | 344,412 | |||||||
Common stock-based award activity (in shares) | 677,314 | |||||||
Common stock repurchases (in shares) | (21,082) | |||||||
Common stock offering, net of issuance costs | 711,321 | $ 16 | ||||||
Common stock offering, net of issuance costs (in shares) | 16,100,000 | |||||||
Common stock repurchases | (971) | (971) | ||||||
Common stock-based award activity | 13,404 | $ 1 | 13,403 | |||||
Balance at Apr. 02, 2021 | $ 4,291,069 | $ 135 | $ 4,201,745 | $ 536,441 | $ (491,727) | $ 44,475 | ||
Ending Balance, Shares (in shares) at Apr. 02, 2021 | 135,597,331 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENT OF EQUITY Statement of Stockholders' Equity [Parenthetical] - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Statement of Stockholders' Equity [Parenthetical] [Abstract] | ||
Other comprehensive income, tax | $ 6,840 | $ 4,644 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Statement of Cash Flows [Abstract] | ||
Net income | $ 20,240 | $ 5,508 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, amortization and other impairment charges | 62,785 | 58,336 |
Stock-based compensation expense | 7,807 | 6,124 |
Non-cash interest expense | 1,537 | 1,311 |
Deferred income tax benefit | (3,614) | (567) |
Loss on sale of property, plant and equipment | 257 | 976 |
Changes in operating assets and liabilities: | ||
Trade receivables, net | (39,950) | 29,445 |
Inventories, net | (32,743) | (16,431) |
Accounts payable | 83,442 | 30,592 |
Other operating assets and liabilities | (15,379) | (59,065) |
Net cash provided by operating activities | 84,382 | 56,229 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (24,537) | (31,113) |
Proceeds from sale of property, plant and equipment | 0 | 1,688 |
Acquisitions, net of cash received, and investments | (103,475) | (7,830) |
Net cash used in investing activities | (128,012) | (37,255) |
Cash flows from financing activities: | ||
Proceeds from borrowings on revolving credit facilities and other | 179,367 | 608,673 |
Repayments of borrowings on revolving credit facilities and other | (185,643) | (364,403) |
Proceeds from issuance of common stock, net | 716,632 | 2,220 |
Deferred consideration payments and other | (2,704) | (1,353) |
Net cash provided by financing activities | 707,652 | 245,137 |
Effect of foreign exchange rates on Cash and cash equivalents and Restricted cash | (1,438) | (8,139) |
Increase in Cash and cash equivalents and Restricted cash | 662,584 | 255,972 |
Cash and cash equivalents and Restricted Cash, beginning of period | 101,069 | 109,632 |
Cash and cash equivalents, end of period | $ 763,653 | $ 365,604 |
General
General | 3 Months Ended |
Apr. 02, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General Colfax Corporation (the “Company” or “Colfax”) is a leading diversified technology company that provides fabrication technology and medical device products and services to customers around the world, principally under the ESAB and DJO brands. The Company conducts its operations through two operating segments, “Fabrication Technology”, which incorporates the operations of ESAB and its related brands, and “Medical Technology”, which incorporates the operations of DJO and its related brands. On March 4, 2021, the Company announced its intention to separate its fabrication technology and specialty medical technology businesses into two differentiated, independent, and publicly traded companies. The current Colfax entity will retain the specialty medical technology business under a new name, while the fabrication technology business will operate independently under the existing ESAB brand name. The separation is intended to be structured in a tax-free manner and is targeted to be completed in the first quarter of 2022. The assets, liabilities, revenues and expenses of the fabrication technology businesses are included in continuing operations of the Company in the accompanying Condensed Consolidated Financial Statements. 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. Certain prior period amounts have been reclassified to conform to the current period presentation. The Condensed Consolidated Balance Sheet as of December 31, 2020 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, 2020 (the “2020 Form 10-K”), filed with the SEC on February 18, 2021. 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. 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 as of 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. In the normal course of business, the Company incurs research and development costs related to new product development which are expensed as incurred and included in Selling, general and administrative expenses on the Company’s Condensed Consolidated Statements of Operations. Research and development costs were $19.9 million during the three months ended April 2, 2021, and $18.5 million during the three months ended April 3, 2020. The results of operations for the three months ended April 2, 2021 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 businesses, and European operations typically experience a slowdown during the July, August and December holiday seasons. Medical Technology sales typically peak in the fourth quarter. General economic conditions may, however, impact future seasonal variations. In December 2019, a novel coronavirus disease (“COVID-19”) was first reported in China. On March 11, 2020, due to worldwide spread of the virus, the World Health Organization characterized COVID-19 as a pandemic. The COVID-19 global pandemic has resulted in a widespread health crisis, and the resulting impact on governments, businesses and individuals and actions taken by them in response to the situation have resulted in widespread economic disruptions, significantly affecting broader economies, financial markets, and overall demand for the Company’s products. In 2021, these impacts continue to be observed, though to a lesser extent than 2020, primarily as a result of broadening access to COVID-19 vaccines and gradual relaxing of some government-mandated restrictions. The COVID-19 outbreak has caused increased uncertainty in estimates and assumptions affecting the reported amounts of assets and liabilities in the Condensed Consolidated Financial Statements as the extent and period of recovery from the COVID-19 outbreak and related economic disruption are difficult to forecast. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 3 Months Ended |
Apr. 02, 2021 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Accounting Guidance Implemented in 2021 Standard Description Effective Date ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans The ASU modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The adoption of this ASU did not have a material impact on the Company’s Condensed Consolidated Financial Statements. January 1, 2021 ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes The ASU eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of accounting for income taxes. The Company adopted this ASU as of January 1, 2021 on a prospective basis, and the adoption did not have a material impact on the Company’s Condensed Consolidated Financial Statements. January 1, 2021 |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Apr. 02, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations The Company retained certain asbestos-related contingencies and insurance coverages from divested businesses for which it did not retain an interest in the ongoing operations subject to the contingencies. The Company has classified asbestos-related selling, general and administrative activity in its Condensed Consolidated Statements of Operations as part of Loss from discontinued operations, net of taxes. During the three months ended April 2, 2021 and April 3, 2020, the Company recorded $0.9 million and $1.4 million, respectively, of asbestos-related costs, net of tax. See Note 13, “Commitments and Contingencies” for further information. The Company also recorded Loss from discontinued operations, net of tax of $6.6 million and $2.0 million for the three months ended April 2, 2021 and April 3, 2020, respectively, related to its divested air and gas handling business, including a settlement executed in 2021, as well as certain professional, legal, and consulting fees in 2020. Cash used in operating activities related to discontinued operations for the three months ended April 2, 2021 was $7.3 million. Cash provided by operating activities related to discontinued operations for the three months ended April 3, 2020 was $0.8 million. |
Acquisitions Acquisitions (Note
Acquisitions Acquisitions (Notes) | 3 Months Ended |
Apr. 02, 2021 | |
Business Combinations [Abstract] | |
Acquisition | Acquisitions The Company completed one acquisition in its Fabrication Technology segment and two acquisitions in its Medical Technology segment during the three months ended April 2, 2021 for total consideration, net of cash received, of $88.7 million. The acquisitions are accounted for under the acquisition method of accounting, and accordingly, the Condensed Consolidated Financial Statements include the financial position and results of operations from the respective acquisition date. The Company also made two investments in medical technology businesses during the three months ended April 2, 2021 for a total of $14.8 million. Both investments are carried at cost, as they do not have a readily determinable fair value. Acquisitions in the Medical Technology segment included Trilliant Surgical (“Trilliant”), a national provider of foot and ankle orthopedics implants. The product technologies of Trilliant support the Medical Technology segment’s focused expansion into the adjacent foot and ankle market. Trilliant has a broad product portfolio that covers the full universe of foot reconstructive and fixation procedures, and includes the novel Arsenal Foot Plating System, designed for greater flexibility and speed of implant placement. The acquisition was completed for $82.3 million cash consideration, subject to certain adjustments. Net working capital and intangible assets acquired represent 18% and 46% of the total consideration paid, respectively, with the residual amount primarily attributable to Goodwill. All of the Goodwill acquired is expected to be deductible for income tax purposes. The estimated proforma annual revenues of the Trilliant acquisition are approximately 1% of Colfax consolidated revenues. |
Revenue (Notes)
Revenue (Notes) | 3 Months Ended |
Apr. 02, 2021 | |
Revenue [Abstract] | |
Revenue | Revenue The Company’s Fabrication Technology segment formulates, develops, manufactures and supplies consumable products and equipment. Substantially all revenue from the Fabrication Technology business is recognized at a point in time. The Company disaggregates its Fabrication Technology revenue into the following product groups: Three Months Ended April 2, 2021 April 3, 2020 (In thousands) Equipment $ 173,750 $ 156,800 Consumables 394,378 368,737 Total $ 568,128 $ 525,537 Contracts with customers in the consumables product grouping generally have a shorter fulfillment period than equipment contracts. The Company’s Medical Technology segment provides products and services spanning the full continuum of patient care, from injury prevention to rehabilitation. While the Company’s Medical Technology sales are primarily derived from three sales channels including dealers and distributors, insurance, and direct to consumers and hospitals, substantially all its revenue is recognized at a point in time. The Company disaggregates its Medical Technology revenue into the following product groups: Three Months Ended April 2, 2021 April 3, 2020 (In thousands) Prevention & Recovery (1) $ 235,238 $ 223,785 Reconstructive 75,845 67,034 Total $ 311,083 $ 290,819 (1) For the periods presented, the Prevention & Recovery product group includes bone growth stimulation products, which were previously classified as part of the Reconstructive product group. Given the nature of the Fabrication Technology and Medical Technology businesses, the total amount of unsatisfied performance obligations with an original contract duration of greater than one year as of April 2, 2021 is immaterial. The nature of the Company’s contracts gives rise to certain types of variable consideration, including rebates, implicit price concessions, 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. In some circumstances, customers are billed in advance of revenue recognition, resulting in contract liabilities. As of December 31, 2020 and 2019, total contract liabilities were $36.6 million and $14.8 million, respectively. During the three months ended April 2, 2021 and April 3, 2020, revenue recognized that was included in the contract liability balance at the beginning of the year was $14.3 million and $4.9 million, respectively. As of April 2, 2021 and April 3, 2020, total contract liabilities were $40.0 million and $17.0 million, respectively, and were included in Accrued liabilities on the Company’s Condensed Consolidated Balance Sheets. The contract liabilities as of April 2, 2021 and December 31, 2020 include $11.8 million of certain one-time advance payments in the Medical Technology business. Allowance for Credit Losses The Company’s estimate of current expected credit losses on trade receivables considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. In calculating and applying its current expected credit losses, the Company disaggregates trade receivables into business segments due to risk characteristics unique to each segment given the individual lines of business and market. The business segments are further disaggregated based on either geography or product type. The Company uses a loss rate methodology in calculating its current expected credit losses, leveraging historical write-offs over a defined lookback period in deriving a historical loss rate. The expected credit loss model further considers current conditions and reasonable and supportable forecasts using an adjustment for current and projected macroeconomic factors. Management identified appropriate macroeconomic indicators based on tangible correlation to historical losses considering the location and risks associated with the Company. A summary of the activity in the Company’s allowance for credit losses included within Trade receivables in the Condensed Consolidated Balance Sheets is as follows: Three Months Ended April 2, 2021 Balance at Charged to Expense, net Write-Offs and Deductions Foreign Balance at (In thousands) Allowance for credit losses $ 37,666 $ 239 $ (1,062) $ (1,283) $ 35,560 |
Net Income Per Share (Text Bloc
Net Income Per Share (Text Block) | 3 Months Ended |
Apr. 02, 2021 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share from Continuing Operations | Net Income Per Share from Continuing Operations Net income per share from continuing operations was computed as follows: Three Months Ended April 2, 2021 April 3, 2020 (In thousands, except share and per share data) Computation of Net income per share from continuing operations - basic: Net income from continuing operations attributable to Colfax Corporation (1) $ 26,564 $ 7,841 Weighted-average shares of Common stock outstanding – basic 139,603,389 136,601,111 Net income per share from continuing operations – basic $ 0.19 $ 0.06 Computation of Net income per share from continuing operations - diluted: Net income from continuing operations attributable to Colfax Corporation (1) $ 26,564 $ 7,841 Weighted-average shares of Common stock outstanding – basic 139,603,389 136,601,111 Net effect of potentially dilutive securities - stock options, restricted stock units and tangible equity units 2,167,918 4,868,927 Weighted-average shares of Common stock outstanding – diluted 141,771,307 141,470,038 Net income per share from continuing operations – diluted $ 0.19 $ 0.06 (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, of $1.2 million for the three months ended April 2, 2021, and $1.0 million for the three months ended April 3, 2020, respectively. For three months ended April 2, 2021 and April 3, 2020, the weighted-average shares of Common stock outstanding - basic includes the impact of 18.4 million shares related to the issuance of Colfax’s tangible equity units. For the three months ended April 3, 2020, the weighted-average shares of Common stock outstanding - diluted includes the impact of an additional 3.7 million potentially issuable dilutive shares related to Colfax’s tangible equity units as a result of the Company’s share price in March 2020. See Note 8, “Equity” for details. |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 02, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | During the three months ended April 2, 2021, Income from continuing operations before income taxes was $35.6 million, while the income tax expense was $7.9 million. The effective tax rate was 22.2% for the three months ended April 2, 2021. The effective tax rate for the three months ended April 2, 2021 differed from the 2021 U.S. federal statutory rate of 21% mainly due to withholding taxes, taxable foreign exchange gains and other non-deductible expenses partially offset by the benefit of U.S. tax credits. During the three months ended April 3, 2020, Income from continuing operations before income taxes was $22.0 million, while the income tax expense was $13.2 million. The effective tax rate was 59.8% for the three months ended April 3, 2020. The effective tax rate for the three months ended April 3, 2020 differed from the 2020 U.S. federal statutory rate of 21% mainly due to the impact of additional U.S. tax on international operations and taxable foreign exchange gains offset in part by a discrete tax benefit associated with the enactment of a tax law change in India. Income taxes for the three months ended April 3, 2020 were calculated using the actual year-to-date effective tax rate, also known as the discrete method. The discrete method was used because of the high degree of uncertainty in estimating annual pretax earnings at that time caused by the COVID-19 pandemic market conditions. |
Equity
Equity | 3 Months Ended |
Apr. 02, 2021 | |
Equity [Abstract] | |
Equity | Equity Common Stock On March 19, 2021, the Company completed the underwritten public offering of 16.1 million shares of Colfax Common stock at a price to the public of $46.00 per share, resulting in net proceeds of approximately $711.3 million , after deducting offering expenses and underwriters’ discount and commissions. Share Repurchase Program In 2018, the Company’s Board of Directors authorized the repurchase of shares of the Company’s Common stock from time-to-time on the open market or in privately negotiated transactions. No repurchases of the Company’s Common stock have been made under this plan since the third quarter of 2018. As of April 2, 2021, the remaining stock repurchase authorization provided by the Board of Directors was $100 million. The timing, amount and method of shares repurchased is determined by management based on its evaluation of market conditions and other factors. There is no term associated with the remaining repurchase authorization. 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 three months ended April 2, 2021 and April 3, 2020. 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, 2021 $ (112,783) $ (360,977) $ 21,654 $ (452,106) Other comprehensive income (loss) before reclassifications: Foreign currency translation adjustment 709 (82,663) (2,201) (84,155) Gain on long-term intra-entity foreign currency transactions — 31,098 — 31,098 Gain on net investment hedges — — 12,381 12,381 Other comprehensive income (loss) before reclassifications 709 (51,565) 10,180 (40,676) Amounts reclassified from Accumulated other comprehensive loss 1,055 — — 1,055 Net Other comprehensive income (loss) 1,764 (51,565) 10,180 (39,621) Balance at April 2, 2021 $ (111,019) $ (412,542) $ 31,834 $ (491,727) 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, 2020 $ (106,500) $ (421,889) $ 44,544 $ (483,845) Other comprehensive income (loss) before reclassifications: Foreign currency translation adjustment 1,672 (170,679) (1,310) (170,317) Loss on long-term intra-entity foreign currency transactions — (1,027) — (1,027) Gain on net investment hedges — — 12,180 12,180 Other comprehensive income (loss) before reclassifications 1,672 (171,706) 10,870 (159,164) Amounts reclassified from Accumulated other comprehensive loss 867 — — 867 Net Other comprehensive income (loss) 2,539 (171,706) 10,870 (158,297) Balance at April 3, 2020 $ (103,961) $ (593,595) $ 55,414 $ (642,142) Tangible equity unit (“TEU”) offering On January 11, 2019, the Company issued 4.6 million tangible equity units at the stated amount of $100 per unit. Net cash of $447.7 million was received upon closing. A portion of the proceeds from the issuance of the TEUs were allocated initially to equity (the “TEU prepaid stock purchase contract”) and debt (the “TEU amortizing notes”) based on the relative fair value of the respective components of each TEU. See Note 10, “Debt ” for further information regarding the TEU amortizing notes. TEU prepaid stock purchase contracts Unless previously settled at the holder’s option, for each purchase contract the Company will deliver to holders on January 15, 2022 (subject to postponement in certain limited circumstances, the “mandatory settlement date”) a number of shares of common stock. The number of shares of common stock issuable upon settlement of each purchase contract (the “settlement rate”) will be determined using the arithmetic average of the volume average weighted price for the 20 consecutive trading days beginning on, and including, the 21st scheduled trading day immediately preceding January 15, 2022 (“the Applicable Market Value”) with reference to the following settlement rates: • if the Applicable Market Value of the common stock is greater than the threshold appreciation price of $25.00, the holder will receive 4.0000 shares of common stock for each purchase contract (the “minimum settlement rate”); • if the Applicable Market Value of the common stock is greater than or equal to the reference price of $20.81, but less than or equal to the threshold appreciation price of $25.00, the holder will receive a number of shares of common stock for each purchase contract having a value, based on the Applicable Market Value, equal to $100; and • if the Applicable Market Value of the common stock is less than the reference price of $20.81, the holder will receive 4.8054 shares of common stock for each purchase contract (the “maximum settlement rate”). Earnings per share Unless the TEU stock purchase contracts are redeemed by the Company or settled earlier at the unit holder’s option, they are mandatorily convertible into shares of Colfax common stock at not less than 4.0 shares per purchase contract or more than 4.8054 shares per purchase contract on January 15, 2022. This corresponds to not less than 18.4 million shares and not more than 22.1 million shares at the maximum. The 18.4 million minimum shares are included in the calculation of weighted-average shares of Common stock outstanding - basic. The difference between the minimum and maximum shares represents potentially dilutive securities. The Company includes them in its calculation of weighted-average shares of Common stock outstanding - diluted on a pro rata basis to the extent the effect is not anti-dilutive and the average Applicable Market Value is |
Inventories, Net (Text Block)
Inventories, Net (Text Block) | 3 Months Ended |
Apr. 02, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | Inventories, Net Inventories, net consisted of the following: April 2, 2021 December 31, 2020 (In thousands) Raw materials $ 116,562 $ 110,848 Work in process 44,613 40,517 Finished goods 504,806 476,297 665,981 627,662 Less: allowance for excess, slow-moving and obsolete inventory (59,773) (62,840) Inventories, net $ 606,208 $ 564,822 |
Debt
Debt | 3 Months Ended |
Apr. 02, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt consisted of the following: April 2, 2021 December 31, 2020 (In thousands) Term loan $ 781,767 $ 781,557 Euro senior notes 408,611 425,045 2024 and 2026 notes 991,925 991,319 TEU amortizing notes 25,241 31,251 Revolving credit facilities and other 1,822 2,071 Total debt 2,209,366 2,231,243 Less: current portion (727,369) (27,074) Long-term debt $ 1,481,997 $ 2,204,169 Term Loan and Revolving Credit Facility The Company’s credit agreement (the “Credit Facility”) by and among the Company, as the borrower, certain U.S. subsidiaries of the Company, as guarantors, each of the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, Citizens Bank, N.A., as syndication agent, and the co-documentation agents named therein consists of a $975 million revolving credit facility (the “Revolver”) and a Term A-1 loan with an initial aggregate principal amount of $825 million (the “Term Loan”), each with a maturity date of December 6, 2024. The Revolver contains a $50 million swing line loan sub-facility. Certain U.S. subsidiaries of the Company guarantee the obligations under the Credit Facility. The Credit Facility contains customary covenants limiting the ability of Colfax and its subsidiaries to, among other things, incur debt or liens, merge or consolidate with others, dispose of assets, make investments or pay dividends. In addition, the Credit Facility contains financial covenants requiring Colfax to maintain (subject to certain exceptions) (i) a maximum total leverage ratio, calculated as the ratio of Consolidated Net Debt (as defined in the Credit Facility) to EBITDA (as defined in the Credit Facility) of 6.50:1.00 for the quarter ending March 31, 2021, 5.25:1.00 for the quarter ending June 30, 2021, 4.50:1.00 for the quarter ending September 30, 2021, 4.25:1.00 for the quarters ending December 31, 2021 and March 31, 2022, 4.00:1.00 for the quarters ending June 30, 2022 and September 30, 2022, and 3.50:1.00 as of December 31, 2022 and for each fiscal quarter ending thereafter, and (ii) a minimum interest coverage ratio of 2.75:1.00 for each fiscal quarter until June 30, 2021, and then 3.00:1.00 for the quarters ending September 30, 2021 and thereafter. The Credit Facility also includes a “springing” collateral provision (based upon the Gross Leverage Ratio as defined in the Amendment to the Credit Facility) which requires the obligations under the Amendment to the Credit Facility to be secured by substantially all personal property of Colfax and its U.S. subsidiaries and the equity of its first tier foreign subsidiaries, subject to customary exceptions, in the event Colfax’s gross leverage ratio under the Credit Facility is greater than 5.00:1.00 as of the last day of any fiscal quarter. The Credit Facility contains various events of default (including failure to comply with the covenants under the Credit Facility and related agreements) and upon an event of default the lenders may, subject to various customary cure rights, require the immediate payment of all amounts outstanding under the Term Loan and the Revolver. As of April 2, 2021, the Company was in compliance with the covenants under the Credit Facility. As of April 2, 2021, the weighted-average interest rate of borrowings under the Credit Facility was 1.86%, excluding accretion of original issue discount and deferred financing fees, and there was $975 million available on the Revolver. Euro Senior Notes The Company has senior unsecured notes with an aggregate principal amount of €350 million (the “Euro Notes”). The Euro Notes are due in April 2025, have an interest rate of 3.25% and are guaranteed by certain of our domestic subsidiaries (the “Guarantees”). The Euro Notes and the Guarantees have not been, and will not be, registered under the Securities Act of 1933, as amended, or the securities laws of any other jurisdiction. TEU Amortizing Notes Each TEU amortizing note has an initial principal amount of $15.6099, bears interest at a rate of 6.50% per annum, and has equal quarterly cash installments of $1.4375 per TEU amortizing note on each January 15, April 15, July 15 and October 15 with a final installment payment date of January 15, 2022. The quarterly cash installment constitutes a payment of interest and a partial repayment of principal. The Company paid $6.6 million on the TEU amortizing notes in both the three months ended April 2, 2021 and April 3, 2020, respectively. The TEU amortizing notes are the direct, unsecured and unsubordinated obligations of the Company and rank equally with all of the existing and future other unsecured and unsubordinated indebtedness of the Company. For more information on the Tangible equity units, refer to Note 8, “Equity.” 2024 Notes and 2026 Notes The Company had senior notes with aggregate principal amounts of $600 million (the “2024 Notes”), which were due on February 15, 2024 and had an interest rate of 6.0%. The Company has senior notes with aggregate principal amounts of $400 million (the “2026 Notes”), which are due on February 15, 2026 and have an interest rate of 6.375%. Each tranche of notes is guaranteed by certain domestic subsidiaries of the Company. The Company redeemed all of its outstanding 2024 Notes and $100 million of the outstanding principal amount of its 2026 Notes on April 24, 2021. See Note 15, “Subsequent Events” for further information. Other Indebtedness In addition to the debt agreements discussed above, the Company is party to various bilateral credit facilities with a borrowing capacity of $192.1 million. As of April 2, 2021, there were no outstanding borrowings under these facilities. The Company is party to letter of credit facilities with an aggregate capacity of $338.6 million. Total letters of credit of $64.9 million were outstanding as of April 2, 2021. In total, the Company had deferred financing fees of $21.0 million included in its Condensed Consolidated Balance Sheet as of April 2, 2021, which will be charged to Interest expense, net, primarily using the effective interest method, over the life of the applicable debt agreements. |
Accrued Liabilities (Text Block
Accrued Liabilities (Text Block) | 3 Months Ended |
Apr. 02, 2021 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities in the Condensed Consolidated Balance Sheets consisted of the following: April 2, 2021 December 31, 2020 (In thousands) Accrued compensation and related benefits $ 85,509 $ 98,455 Accrued taxes 52,031 57,286 Accrued asbestos-related liability 42,411 41,626 Warranty liability - current portion 15,799 15,543 Accrued restructuring liability - current portion 7,385 7,889 Accrued third-party commissions 26,990 25,480 Customer advances and billings in excess of costs incurred 40,051 36,737 Lease liability - current portion 37,791 39,695 Accrued interest 14,653 27,153 Other 101,678 104,469 Accrued liabilities $ 424,298 $ 454,333 Warranty Liability The activity in the Company’s warranty liability consisted of the following: Three Months Ended April 2, 2021 April 3, 2020 (In thousands) Warranty liability, beginning of period $ 15,543 $ 15,528 Accrued warranty expense 2,042 1,121 Changes in estimates related to pre-existing warranties 589 318 Cost of warranty service work performed (2,472) (1,910) Acquisition-related liability 321 — Foreign exchange translation effect (224) (1,309) Warranty liability, end of period $ 15,799 $ 13,748 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: Three Months Ended April 2, 2021 Balance at Beginning of Period Provisions Payments Foreign Currency Translation Balance at End of Period (3) (In thousands) Restructuring and other related charges: Fabrication Technology: Termination benefits (1) $ 5,336 $ 248 $ (559) $ (13) $ 5,012 Facility closure costs (2) 591 2,827 (2,831) (4) 583 5,927 3,075 (3,390) (17) 5,595 Non-cash charges (2) — 3,075 Medical Technology: Termination benefits (1) 1,884 358 (736) — 1,506 Facility closure costs (2) 297 613 (613) — 297 2,181 971 (1,349) — 1,803 Non-cash charges (2) — 971 Total Colfax Corporation: Total restructuring liability activity $ 8,108 $ 4,046 $ (4,739) $ (17) $ 7,398 Total Non-cash charges — $ 4,046 (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 April 2, 2021, $7.4 million of the Company’s restructuring liability was included in Accrued liabilities, whereas less than $0.1 million of the Company’s restructuring liability was included in Other liabilities. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 3 Months Ended |
Apr. 02, 2021 | |
Financial Instruments and Fair Value Measurements [Abstract] | |
Financial Instruments and Fair Value Measurements | 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 $2.3 billion estimated fair value of the Company’s debt as of April 2, 2021 and December 31, 2020 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: April 2, 2021 Level Level Level Total (In thousands) Assets: Cash equivalents $ 6,252 $ — $ — $ 6,252 Foreign currency contracts - not designated as hedges — 1,581 — 1,581 Deferred compensation plans — 11,802 — 11,802 $ 6,252 $ 13,383 $ — $ 19,635 Liabilities: Foreign currency contracts - not designated as hedges $ — $ 4,191 $ — $ 4,191 Deferred compensation plans — 11,802 — 11,802 $ — $ 15,993 $ — $ 15,993 December 31, 2020 Level Level Level Total (In thousands) Assets: Cash equivalents $ 7,420 $ — $ — $ 7,420 Foreign currency contracts - not designated as hedges — 2,194 — 2,194 Deferred compensation plans — 10,881 — 10,881 $ 7,420 $ 13,075 $ — $ 20,495 Liabilities: Foreign currency contracts - not designated as hedges $ — $ 1,781 $ — $ 1,781 Deferred compensation plans — 10,881 — 10,881 $ — $ 12,662 $ — $ 12,662 There were no transfers in or out of Level One, Two or Three during the three months ended April 2, 2021. Foreign Currency Contracts As of April 2, 2021 and December 31, 2020, the Company had foreign currency contracts related to purchases and sales with notional values of $309.4 million and $250.4 million, respectively. The Company recognized the following in its Condensed Consolidated Financial Statements related to its derivative instruments: Three Months Ended April 2, 2021 April 3, 2020 (In thousands) Contracts Designated as Hedges: Unrealized gain on net investment hedges (1) $ 12,381 $ 12,180 Contracts Not Designated in a Hedge Relationship: Foreign Currency Contracts Unrealized gain (loss) (2,611) 2,417 Realized gain (loss) 51 (197) (1) |
Commitments and Contingencies (
Commitments and Contingencies (Text Block) | 3 Months Ended |
Apr. 02, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies For further description of the Company’s litigation and contingencies, reference is made to Note 18, “Commitments and Contingencies” in the Notes to Consolidated Financial Statements in the Company’s 2020 Form 10-K. Since the Company did not retain an interest in the ongoing operations of its divested businesses, the retained asbestos-related activity has been classified in its Condensed Consolidated Statements of Operations as a component of Loss from discontinued operations, net of taxes. Asbestos Contingencies Asbestos-related claims activity since December 31 is as follows: Three Months Ended April 2, 2021 April 3, 2020 (Number of claims) Claims unresolved, beginning of period 14,809 16,299 Claims filed (1) 1,067 1,043 Claims resolved (2) (581) (600) Claims unresolved, end of period 15,295 16,742 (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: April 2, 2021 December 31, 2020 (In thousands) Long-term asbestos insurance asset (1) $ 229,879 $ 232,712 Long-term asbestos insurance receivable (1) 27,868 31,815 Accrued asbestos liability (2) 42,411 41,626 Long-term asbestos liability (3) 248,669 253,144 (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. General Litigation |
Segment Information (Text Block
Segment Information (Text Block) | 3 Months Ended |
Apr. 02, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company conducts its continuing operations through the Fabrication Technology and Medical Technology operating segments, which also represent the Company’s reportable segments. ▪ Fabrication Technology - a leading global supplier of consumable products and equipment for use in the cutting, joining and automated welding, as well as gas control equipment, providing a wide range of products with innovative technologies to solve challenges in a wide range of industries. • Medical Technology - a leader in orthopedic solutions, providing devices, software and services spanning the full continuum of patient care, from injury prevention to joint replacement to rehabilitation. Certain amounts not allocated to the two reportable segments and intersegment eliminations are reported under the heading “Corporate and other.” The Company’s management evaluates the operating results of each of its reportable segments based upon Net sales and segment operating income (loss), which represents Operating income (loss) before Restructuring and other related charges and European Union Medical Devices Regulation (“MDR”) and other costs. The Company’s segment results were as follows: Three Months Ended April 2, 2021 April 3, 2020 (In thousands) Net sales: Fabrication Technology $ 568,128 $ 525,537 Medical Technology 311,083 290,819 $ 879,211 $ 816,356 Segment operating income (loss) (1) : Fabrication Technology $ 82,305 $ 69,036 Medical Technology 2,162 3,804 Corporate and other (17,361) (14,078) $ 67,106 $ 58,762 (1) Following is a reconciliation of Income from continuing operations before income taxes to segment operating income: Three Months Ended April 2, 2021 April 3, 2020 (In thousands) Income from continuing operations before income taxes $ 35,647 $ 22,041 Interest expense, net 25,660 24,796 Restructuring and other related charges (1) 4,046 11,025 MDR and other costs (2) 1,753 900 Segment operating income $ 67,106 $ 58,762 (1) Restructuring and other related charges includes $1.8 million of expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three months ended April 3, 2020, only. (2) Primarily related to costs specific to compliance with medical device reporting regulations and other requirements of the European Union Medical Device Regulation of 2017. |
Subsequent Events (Notes)
Subsequent Events (Notes) | 3 Months Ended |
Apr. 02, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn April 24, 2021, the Company redeemed all of its outstanding 2024 Notes and $100 million of the outstanding principal amount of its 2026 Notes for $724.4 million in aggregate. The 2024 Notes were redeemed at a redemption price of 103.000% of its principal amount, and the 2026 Notes were redeemed at a redemption price of 106.375% of its principal amount, plus, in each case, accrued and unpaid interest through the date of redemption. In the second quarter of 2021, a net loss on the early extinguishment of debt of approximately $29.9 million will be recorded and will include $24.4 million of call premium on the retired debt.On April 23, 2021, the Company completed the acquisition of MedShape, Inc. (“MedShape), a provider of innovative surgical solutions for foot and ankle surgeons using its patented superelastic nickel titanium (NiTiNOL) and shape memory polymer technologies. The acquisition, which expands Company’s foot and ankle platform, was completed for cash consideration of $125 million, subject to certain adjustments. |
Recently Issued Accounting Pr_2
Recently Issued Accounting Pronouncements (Policies) | 3 Months Ended |
Apr. 02, 2021 | |
Accounting Policies [Abstract] | |
Basis of Accounting | 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. Certain prior period amounts have been reclassified to conform to the current period presentation. |
Use of Estimates | 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 as of 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.In the normal course of business, the Company incurs research and development costs related to new product development which are expensed as incurred and included in Selling, general and administrative expenses on the Company’s Condensed Consolidated Statements of Operations. Research and development costs were $19.9 million during the three months ended April 2, 2021, and $18.5 million during the three months ended April 3, 2020. |
New Accounting Pronouncements | Accounting Guidance Implemented in 2021 Standard Description Effective Date ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans The ASU modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The adoption of this ASU did not have a material impact on the Company’s Condensed Consolidated Financial Statements. January 1, 2021 ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes The ASU eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of accounting for income taxes. The Company adopted this ASU as of January 1, 2021 on a prospective basis, and the adoption did not have a material impact on the Company’s Condensed Consolidated Financial Statements. January 1, 2021 |
Recently Issued Accounting Pr_3
Recently Issued Accounting Pronouncements (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | Accounting Guidance Implemented in 2021 Standard Description Effective Date ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans The ASU modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The adoption of this ASU did not have a material impact on the Company’s Condensed Consolidated Financial Statements. January 1, 2021 ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes The ASU eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of accounting for income taxes. The Company adopted this ASU as of January 1, 2021 on a prospective basis, and the adoption did not have a material impact on the Company’s Condensed Consolidated Financial Statements. January 1, 2021 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Revenue [Abstract] | |
Schedule of Revenue by Major Customers by Reporting Segments | The Company’s Fabrication Technology segment formulates, develops, manufactures and supplies consumable products and equipment. Substantially all revenue from the Fabrication Technology business is recognized at a point in time. The Company disaggregates its Fabrication Technology revenue into the following product groups: Three Months Ended April 2, 2021 April 3, 2020 (In thousands) Equipment $ 173,750 $ 156,800 Consumables 394,378 368,737 Total $ 568,128 $ 525,537 Contracts with customers in the consumables product grouping generally have a shorter fulfillment period than equipment contracts. The Company’s Medical Technology segment provides products and services spanning the full continuum of patient care, from injury prevention to rehabilitation. While the Company’s Medical Technology sales are primarily derived from three sales channels including dealers and distributors, insurance, and direct to consumers and hospitals, substantially all its revenue is recognized at a point in time. The Company disaggregates its Medical Technology revenue into the following product groups: Three Months Ended April 2, 2021 April 3, 2020 (In thousands) Prevention & Recovery (1) $ 235,238 $ 223,785 Reconstructive 75,845 67,034 Total $ 311,083 $ 290,819 (1) For the periods presented, the Prevention & Recovery product group includes bone growth stimulation products, which were previously classified as part of the Reconstructive product group. |
Financing Receivable, Allowance for Credit Loss | A summary of the activity in the Company’s allowance for credit losses included within Trade receivables in the Condensed Consolidated Balance Sheets is as follows: Three Months Ended April 2, 2021 Balance at Charged to Expense, net Write-Offs and Deductions Foreign Balance at (In thousands) Allowance for credit losses $ 37,666 $ 239 $ (1,062) $ (1,283) $ 35,560 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share - Basic and Diluted | Net income per share from continuing operations was computed as follows: Three Months Ended April 2, 2021 April 3, 2020 (In thousands, except share and per share data) Computation of Net income per share from continuing operations - basic: Net income from continuing operations attributable to Colfax Corporation (1) $ 26,564 $ 7,841 Weighted-average shares of Common stock outstanding – basic 139,603,389 136,601,111 Net income per share from continuing operations – basic $ 0.19 $ 0.06 Computation of Net income per share from continuing operations - diluted: Net income from continuing operations attributable to Colfax Corporation (1) $ 26,564 $ 7,841 Weighted-average shares of Common stock outstanding – basic 139,603,389 136,601,111 Net effect of potentially dilutive securities - stock options, restricted stock units and tangible equity units 2,167,918 4,868,927 Weighted-average shares of Common stock outstanding – diluted 141,771,307 141,470,038 Net income per share from continuing operations – diluted $ 0.19 $ 0.06 (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, of $1.2 million for the three months ended April 2, 2021, and $1.0 million for the three months ended April 3, 2020, respectively. |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Equity [Abstract] | |
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 three months ended April 2, 2021 and April 3, 2020. 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, 2021 $ (112,783) $ (360,977) $ 21,654 $ (452,106) Other comprehensive income (loss) before reclassifications: Foreign currency translation adjustment 709 (82,663) (2,201) (84,155) Gain on long-term intra-entity foreign currency transactions — 31,098 — 31,098 Gain on net investment hedges — — 12,381 12,381 Other comprehensive income (loss) before reclassifications 709 (51,565) 10,180 (40,676) Amounts reclassified from Accumulated other comprehensive loss 1,055 — — 1,055 Net Other comprehensive income (loss) 1,764 (51,565) 10,180 (39,621) Balance at April 2, 2021 $ (111,019) $ (412,542) $ 31,834 $ (491,727) 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, 2020 $ (106,500) $ (421,889) $ 44,544 $ (483,845) Other comprehensive income (loss) before reclassifications: Foreign currency translation adjustment 1,672 (170,679) (1,310) (170,317) Loss on long-term intra-entity foreign currency transactions — (1,027) — (1,027) Gain on net investment hedges — — 12,180 12,180 Other comprehensive income (loss) before reclassifications 1,672 (171,706) 10,870 (159,164) Amounts reclassified from Accumulated other comprehensive loss 867 — — 867 Net Other comprehensive income (loss) 2,539 (171,706) 10,870 (158,297) Balance at April 3, 2020 $ (103,961) $ (593,595) $ 55,414 $ (642,142) |
Tangible Equity Units | A portion of the proceeds from the issuance of the TEUs were allocated initially to equity (the “TEU prepaid stock purchase contract”) and debt (the “TEU amortizing notes”) based on the relative fair value of the respective components of each TEU. See Note 10, “Debt ” for further information regarding the TEU amortizing notes. |
Inventories, Net (Tables)
Inventories, Net (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories, net consisted of the following: April 2, 2021 December 31, 2020 (In thousands) Raw materials $ 116,562 $ 110,848 Work in process 44,613 40,517 Finished goods 504,806 476,297 665,981 627,662 Less: allowance for excess, slow-moving and obsolete inventory (59,773) (62,840) Inventories, net $ 606,208 $ 564,822 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt consisted of the following: April 2, 2021 December 31, 2020 (In thousands) Term loan $ 781,767 $ 781,557 Euro senior notes 408,611 425,045 2024 and 2026 notes 991,925 991,319 TEU amortizing notes 25,241 31,251 Revolving credit facilities and other 1,822 2,071 Total debt 2,209,366 2,231,243 Less: current portion (727,369) (27,074) Long-term debt $ 1,481,997 $ 2,204,169 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Accrued Liabilities [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities in the Condensed Consolidated Balance Sheets consisted of the following: April 2, 2021 December 31, 2020 (In thousands) Accrued compensation and related benefits $ 85,509 $ 98,455 Accrued taxes 52,031 57,286 Accrued asbestos-related liability 42,411 41,626 Warranty liability - current portion 15,799 15,543 Accrued restructuring liability - current portion 7,385 7,889 Accrued third-party commissions 26,990 25,480 Customer advances and billings in excess of costs incurred 40,051 36,737 Lease liability - current portion 37,791 39,695 Accrued interest 14,653 27,153 Other 101,678 104,469 Accrued liabilities $ 424,298 $ 454,333 |
Schedule of Product Warranty Liability | The activity in the Company’s warranty liability consisted of the following: Three Months Ended April 2, 2021 April 3, 2020 (In thousands) Warranty liability, beginning of period $ 15,543 $ 15,528 Accrued warranty expense 2,042 1,121 Changes in estimates related to pre-existing warranties 589 318 Cost of warranty service work performed (2,472) (1,910) Acquisition-related liability 321 — Foreign exchange translation effect (224) (1,309) Warranty liability, end of period $ 15,799 $ 13,748 |
Schedule of Restructuring Reserve by Type of Cost | 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: Three Months Ended April 2, 2021 Balance at Beginning of Period Provisions Payments Foreign Currency Translation Balance at End of Period (3) (In thousands) Restructuring and other related charges: Fabrication Technology: Termination benefits (1) $ 5,336 $ 248 $ (559) $ (13) $ 5,012 Facility closure costs (2) 591 2,827 (2,831) (4) 583 5,927 3,075 (3,390) (17) 5,595 Non-cash charges (2) — 3,075 Medical Technology: Termination benefits (1) 1,884 358 (736) — 1,506 Facility closure costs (2) 297 613 (613) — 297 2,181 971 (1,349) — 1,803 Non-cash charges (2) — 971 Total Colfax Corporation: Total restructuring liability activity $ 8,108 $ 4,046 $ (4,739) $ (17) $ 7,398 Total Non-cash charges — $ 4,046 (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 April 2, 2021, $7.4 million of the Company’s restructuring liability was included in Accrued liabilities, whereas less than $0.1 million of the Company’s restructuring liability was included in Other liabilities. |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Financial Instruments and Fair Value Measurements [Abstract] | |
Company's assets and liabilities measured at fair value for each fair value hierarchy level | 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: April 2, 2021 Level Level Level Total (In thousands) Assets: Cash equivalents $ 6,252 $ — $ — $ 6,252 Foreign currency contracts - not designated as hedges — 1,581 — 1,581 Deferred compensation plans — 11,802 — 11,802 $ 6,252 $ 13,383 $ — $ 19,635 Liabilities: Foreign currency contracts - not designated as hedges $ — $ 4,191 $ — $ 4,191 Deferred compensation plans — 11,802 — 11,802 $ — $ 15,993 $ — $ 15,993 December 31, 2020 Level Level Level Total (In thousands) Assets: Cash equivalents $ 7,420 $ — $ — $ 7,420 Foreign currency contracts - not designated as hedges — 2,194 — 2,194 Deferred compensation plans — 10,881 — 10,881 $ 7,420 $ 13,075 $ — $ 20,495 Liabilities: Foreign currency contracts - not designated as hedges $ — $ 1,781 $ — $ 1,781 Deferred compensation plans — 10,881 — 10,881 $ — $ 12,662 $ — $ 12,662 |
Schedule of Derivative Instruments, Gain (Loss) in Condensed Consolidated Financial Statements | The Company recognized the following in its Condensed Consolidated Financial Statements related to its derivative instruments: Three Months Ended April 2, 2021 April 3, 2020 (In thousands) Contracts Designated as Hedges: Unrealized gain on net investment hedges (1) $ 12,381 $ 12,180 Contracts Not Designated in a Hedge Relationship: Foreign Currency Contracts Unrealized gain (loss) (2,611) 2,417 Realized gain (loss) 51 (197) (1) |
Schedule of Cash and Cash Equivalents | The following table summarizes the Company’s Cash and cash equivalents and Restricted cash: April 2, 2021 December 31, 2020 (In thousands) Cash and cash equivalents $ 763,653 $ 97,068 Restricted cash — 4,001 Cash and cash equivalents and Restricted cash $ 763,653 $ 101,069 |
Commitments and Contingencies_2
Commitments and Contingencies (Tables) | 3 Months Ended |
Apr. 02, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule Of Loss Contingencies By Claims Quantities | Asbestos-related claims activity since December 31 is as follows: Three Months Ended April 2, 2021 April 3, 2020 (Number of claims) Claims unresolved, beginning of period 14,809 16,299 Claims filed (1) 1,067 1,043 Claims resolved (2) (581) (600) Claims unresolved, end of period 15,295 16,742 (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 | The Company’s Condensed Consolidated Balance Sheets included the following amounts related to asbestos-related litigation: April 2, 2021 December 31, 2020 (In thousands) Long-term asbestos insurance asset (1) $ 229,879 $ 232,712 Long-term asbestos insurance receivable (1) 27,868 31,815 Accrued asbestos liability (2) 42,411 41,626 Long-term asbestos liability (3) 248,669 253,144 (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) | 3 Months Ended |
Apr. 02, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The Company’s segment results were as follows: Three Months Ended April 2, 2021 April 3, 2020 (In thousands) Net sales: Fabrication Technology $ 568,128 $ 525,537 Medical Technology 311,083 290,819 $ 879,211 $ 816,356 Segment operating income (loss) (1) : Fabrication Technology $ 82,305 $ 69,036 Medical Technology 2,162 3,804 Corporate and other (17,361) (14,078) $ 67,106 $ 58,762 (1) Following is a reconciliation of Income from continuing operations before income taxes to segment operating income: Three Months Ended April 2, 2021 April 3, 2020 (In thousands) Income from continuing operations before income taxes $ 35,647 $ 22,041 Interest expense, net 25,660 24,796 Restructuring and other related charges (1) 4,046 11,025 MDR and other costs (2) 1,753 900 Segment operating income $ 67,106 $ 58,762 (1) Restructuring and other related charges includes $1.8 million of expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three months ended April 3, 2020, only. (2) Primarily related to costs specific to compliance with medical device reporting regulations and other requirements of the European Union Medical Device Regulation of 2017. |
General General (Details)
General General (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Research and development expense | $ 19.9 | $ 18.5 |
Discontinued Operations - Narra
Discontinued Operations - Narratives (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 02, 2021 | Apr. 03, 2020 | Dec. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Asbestos related costs, net of tax | $ (900) | $ (1,400) | |
Cash provided by operating activities, discontinued operations | (7,300) | (800) | |
Accrued asbestos-related liability | 42,411 | $ 41,626 | |
Air and Gas Handling Business | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Loss on disposal of discontinued operation | $ (6,600) | $ (2,000) |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Business Acquisition [Line Items] | ||
Acquisition, net of cash received | $ 103,475 | $ 7,830 |
Intangible assets acquired, percentages of consideration | 46.00% | |
Acquisition, proforma revenue, percentage of company consolidated revenue | 1.00% | |
Medical Technology Businesses | ||
Business Acquisition [Line Items] | ||
Investments in medical technology businesses | $ 14,800 | |
Q1 2021 Acquisitions | ||
Business Acquisition [Line Items] | ||
Acquisition, net of cash received | 88,700 | |
Trilliant Surgical | ||
Business Acquisition [Line Items] | ||
Cash consideration | $ 82,300 | |
Net working capital acquired, percent of consideration | 18.00% |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Revenue from contract with customer | $ 879,211 | $ 816,356 |
Fabrication Technology | ||
Revenue from contract with customer | 568,128 | 525,537 |
Medical Technology | ||
Revenue from contract with customer | 311,083 | 290,819 |
Equipment | Fabrication Technology | ||
Revenue from contract with customer | 173,750 | 156,800 |
Consumables | Fabrication Technology | ||
Revenue from contract with customer | 394,378 | 368,737 |
Prevention & Recovery | Medical Technology | ||
Revenue from contract with customer | 235,238 | 223,785 |
Reconstructive | Medical Technology | ||
Revenue from contract with customer | $ 75,845 | $ 67,034 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) $ in Millions | 3 Months Ended | |||
Apr. 02, 2021USD ($)salesChannel | Apr. 03, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Revenue [Abstract] | ||||
Number of sales channels | salesChannel | 3 | |||
Contract liability | $ 40 | $ 17 | $ 36.6 | $ 14.8 |
Revenue recognized, contract liability | 14.3 | $ 4.9 | ||
Contract liability, one time advance payments | $ 11.8 |
Revenue - Allowance for Credit
Revenue - Allowance for Credit Loss Rollforward (Details) $ in Thousands | 3 Months Ended |
Apr. 02, 2021USD ($) | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |
Balance at Beginning of Period | $ 37,666 |
Charged to Expense, net | 239 |
Write-Offs and Deductions | (1,062) |
Foreign Currency Translation | (1,283) |
Balance at End of Period | $ 35,560 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Earnings Per Share [Abstract] | ||
Net Income (loss) from continuing operations attributable to Parent | $ 26,564 | $ 7,841 |
Weighted-average shares of Common stock outstanding - basic (in shares) | 139,603,389 | 136,601,111 |
Net income (loss) per share, continuing operations, basic (in usd per share) | $ 0.19 | $ 0.06 |
Net effect of potentially dilutive securities - stock options, restricted stock units and tangible equity units | 2,167,918 | 4,868,927 |
Weighted-average shares of Common stock outstanding - diluted (in shares) | 141,771,307 | 141,470,038 |
Continuing operations, (in usd per share) | $ 0.19 | $ 0.06 |
Net income from continuing operations, tax | $ 1,200 | $ 1,000 |
Net Income Per Share (Details T
Net Income Per Share (Details Textual) - shares shares in Millions | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Earnings Per Share, Basic | ||
Weighted Average Number Of Shares Outstanding, Tangible Equity Units, Diluted (in shares) | 3.7 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1.4 | 3.9 |
Tangible Equity Unit | ||
Earnings Per Share, Basic | ||
Weighted Average Number Of Shares Outstanding, Tangible Equity Units, Basic (in shares) | 18.4 | 18.4 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income (loss) from continuing operations before income taxes | $ 35,647 | $ 22,041 |
Income tax expense | $ 7,917 | $ 13,173 |
Effective tax rate | 22.20% | 59.80% |
Equity Textual (Details)
Equity Textual (Details) | Mar. 19, 2021USD ($)$ / sharesshares | Jan. 11, 2019USD ($)$ / shares | Apr. 02, 2021USD ($)$ / sharesshares |
Stock Repurchase Program, Authorized Amount | $ | $ 100,000,000 | ||
Tangible Equity Units Issued, Amount | $ | $ 4,600,000 | ||
Tangible Equity Units Issued, Par Value | $ / shares | $ 100 | ||
Tangible Equity Units Issued, Cash Proceeds | $ | $ 447,700,000 | ||
Tangible Equity Unit, Threshold Appreciation Price | $ / shares | $ 25 | ||
Tangible Equity Unit, Reference Price | $ / shares | $ 20.81 | ||
Stock Purchase Contracts Converted | 100,000 | ||
Common Stock | |||
Conversion of tangible equity units into common stock | 344,412 | ||
Underwritten Public Offering | |||
Sale of Stock, Number of Shares Issued in Transaction | 16,100,000 | ||
Sale of Stock, Price Per Share | $ / shares | $ 46 | ||
Sale of Stock, Consideration Received on Transaction | $ | $ 711,300,000 | ||
Minimum | |||
Shares Issued per Purchase Contract | 4 | ||
Tangible Equity Units, Threshold For Conversion | 18,400,000 | ||
Maximum | |||
Shares Issued per Purchase Contract | 4.8054 | ||
Tangible Equity Units, Threshold For Conversion | 22,100,000 |
Equity - AOCI Components (Detai
Equity - AOCI Components (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | $ (452,106) | |
Foreign currency translation adjustment | (84,155) | $ (170,317) |
Loss on long-term intra-entity foreign currency transactions | 31,098 | (1,027) |
Other comprehensive income (loss) before reclassifications | (40,676) | (159,164) |
Amounts reclassified from Accumulated other comprehensive loss | 1,055 | 867 |
Net current period other comprehensive income (loss) | (39,621) | (158,297) |
Ending Balance | (491,727) | |
Accumulated Other Comprehensive Loss | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | (452,106) | (483,845) |
Ending Balance | (491,727) | (642,142) |
Net Unrecognized Pension and Other Post-Retirement Benefit Cost | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | (112,783) | (106,500) |
Foreign currency translation adjustment | 709 | 1,672 |
Loss on long-term intra-entity foreign currency transactions | 0 | 0 |
Gain (loss) on net investment hedges | 0 | 0 |
Other comprehensive income (loss) before reclassifications | 709 | 1,672 |
Amounts reclassified from Accumulated other comprehensive loss | 1,055 | 867 |
Net current period other comprehensive income (loss) | 1,764 | 2,539 |
Ending Balance | (111,019) | (103,961) |
Foreign Currency Translation Adjustment | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | (360,977) | (421,889) |
Foreign currency translation adjustment | (82,663) | (170,679) |
Loss on long-term intra-entity foreign currency transactions | 31,098 | (1,027) |
Gain (loss) on net investment hedges | 0 | 0 |
Other comprehensive income (loss) before reclassifications | (51,565) | (171,706) |
Amounts reclassified from Accumulated other comprehensive loss | 0 | 0 |
Net current period other comprehensive income (loss) | (51,565) | (171,706) |
Ending Balance | (412,542) | (593,595) |
Unrealized Gain on Hedging Activities | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | 21,654 | 44,544 |
Foreign currency translation adjustment | (2,201) | (1,310) |
Loss on long-term intra-entity foreign currency transactions | 0 | 0 |
Gain (loss) on net investment hedges | 12,381 | 12,180 |
Other comprehensive income (loss) before reclassifications | 10,180 | 10,870 |
Amounts reclassified from Accumulated other comprehensive loss | 0 | 0 |
Net current period other comprehensive income (loss) | 10,180 | 10,870 |
Ending Balance | $ 31,834 | $ 55,414 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Thousands | Apr. 02, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 116,562 | $ 110,848 |
Work in process | 44,613 | 40,517 |
Finished goods | 504,806 | 476,297 |
Inventory, gross | 665,981 | 627,662 |
Less: allowance for excess, slow-moving and obsolete inventory | (59,773) | (62,840) |
Inventories, net | $ 606,208 | $ 564,822 |
Debt - Components (Details)
Debt - Components (Details) - USD ($) $ in Thousands | Apr. 02, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Total Debt | $ 2,209,366 | $ 2,231,243 |
Less: current portion | (727,369) | (27,074) |
Long-term debt | 1,481,997 | 2,204,169 |
Term loan | ||
Debt Instrument [Line Items] | ||
Total Debt | 781,767 | 781,557 |
Euro senior notes | ||
Debt Instrument [Line Items] | ||
Total Debt | 408,611 | 425,045 |
2024 and 2026 notes | ||
Debt Instrument [Line Items] | ||
Total Debt | 991,925 | 991,319 |
TEU amortizing notes | ||
Debt Instrument [Line Items] | ||
Total Debt | 25,241 | 31,251 |
Revolving credit facilities and other | ||
Debt Instrument [Line Items] | ||
Total Debt | $ 1,822 | $ 2,071 |
Debt -Textual (Details)
Debt -Textual (Details) $ / shares in Units, € in Millions | Feb. 05, 2019USD ($) | Dec. 17, 2018USD ($) | Apr. 19, 2017EUR (€) | Apr. 02, 2021USD ($)$ / shares | Sep. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Apr. 24, 2021USD ($) | Mar. 31, 2021 | May 01, 2020 |
Long-term Debt, Weighted Average Interest Rate | 1.86% | |||||||||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 975,000,000 | |||||||||||
Tangible Equity Unit, Initial Principal Amount | $ / shares | $ 15.6099 | |||||||||||
Tangible Equity Units Issued, State Rate Of Return | 6.50% | |||||||||||
Tangible Equity Unit, Quarterly Cash Distribution | $ / shares | $ 1.4375 | |||||||||||
Tangible Equity Unit, Repayment | $ 6,600,000 | |||||||||||
Letter of Credit Subfacility, Maximum Borrowing Capacity | 338,600,000 | |||||||||||
Letters of Credit, Amount Outstanding | 64,900,000 | |||||||||||
Debt Instrument, Unamortized Discount | 21,000,000 | |||||||||||
Term A1 Loan | ||||||||||||
Principal amount | $ 825,000,000 | |||||||||||
Senior Notes | ||||||||||||
Proceeds from borrowings on senior unsecured notes | € | € 350 | |||||||||||
Euro Bond Coupon Rate | 3.25% | |||||||||||
Bilateral agreements | ||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 192,100,000 | |||||||||||
2024 Notes | ||||||||||||
Proceeds from borrowings on senior unsecured notes | $ 600,000,000 | |||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | |||||||||||
2026 Notes | ||||||||||||
Proceeds from borrowings on senior unsecured notes | $ 400,000,000 | |||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 6.375% | |||||||||||
2026 Notes | Subsequent event | ||||||||||||
Principal redeemed | $ 100,000,000 | |||||||||||
New Revolving Credit Facility | DJO Global Inc Financing Facilities | ||||||||||||
Line of Credit Sub Facility Maximum Borrowing Capacity Available for Specific Future Transaction | $ 50,000,000 | |||||||||||
Revolving Credit Facility | New Revolving Credit Facility | DJO Global Inc Financing Facilities | ||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 975,000,000 | |||||||||||
Amended Credit Facility | ||||||||||||
Debt instrument covenant maximum total leverage ratio | 6.50 | |||||||||||
Debt instrument covenant minimum interest coverage ratio | 2.75 | |||||||||||
Debt instrument, gross leverage ratio | 5 | |||||||||||
Scenario, Forecast | Amended Credit Facility | ||||||||||||
Debt instrument covenant maximum total leverage ratio | 3.50 | 4 | 4.25 | 4.50 | 5.25 | |||||||
Debt instrument covenant minimum interest coverage ratio | 3 |
Accrued Liabilities Chart (Deta
Accrued Liabilities Chart (Details) - USD ($) $ in Thousands | Apr. 02, 2021 | Dec. 31, 2020 |
Accrued Liabilities [Abstract] | ||
Accrued payroll | $ 85,509 | $ 98,455 |
Accrued taxes | 52,031 | 57,286 |
Accrued asbestos-related liability | 42,411 | 41,626 |
Warranty liability - current portion | 15,799 | 15,543 |
Accrued restructuring liability - current portion | 7,385 | 7,889 |
Accrued third-party commissions | 26,990 | 25,480 |
Customer advances and billing in excess of costs incurred | 40,051 | 36,737 |
Operating Lease, Liability, Current | 37,791 | 39,695 |
Accrued interest | 14,653 | 27,153 |
Other | 101,678 | 104,469 |
Accrued liabilities | $ 424,298 | $ 454,333 |
Warranty Liability Rollforward
Warranty Liability Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Warranty liability, beginning of period | $ 15,543 | $ 15,528 |
Accrued warranty expense | 2,042 | 1,121 |
Changes in estimates related to pre-existing warranties | 589 | 318 |
Cost of warranty service work performed | (2,472) | (1,910) |
Acquisition-related liability | 321 | 0 |
Foreign exchange translation effect | (224) | (1,309) |
Warranty liability, end of period | $ 15,799 | $ 13,748 |
Restructuring Rollforward (Deta
Restructuring Rollforward (Details) $ in Thousands | 3 Months Ended |
Apr. 02, 2021USD ($) | |
Restructuring Reserve [Roll Forward] | |
Balance at Beginning of Period | $ 8,108 |
Provisions before non-cash charges | 4,046 |
Non cash impairment restructuring provisions | 0 |
Restructuring, Settlement and Impairment Provisions | 4,046 |
Payments | (4,739) |
Foreign Currency Translation | (17) |
Balance at End of Period | 7,398 |
Fabrication Technology | |
Restructuring Reserve [Roll Forward] | |
Balance at Beginning of Period | 5,927 |
Provisions before non-cash charges | 3,075 |
Non cash impairment restructuring provisions | 0 |
Restructuring, Settlement and Impairment Provisions | 3,075 |
Payments | (3,390) |
Foreign Currency Translation | (17) |
Balance at End of Period | 5,595 |
Medical Technology | |
Restructuring Reserve [Roll Forward] | |
Balance at Beginning of Period | 2,181 |
Provisions before non-cash charges | 971 |
Restructuring, Settlement and Impairment Provisions | 971 |
Payments | (1,349) |
Foreign Currency Translation | 0 |
Balance at End of Period | 1,803 |
Termination benefits | Fabrication Technology | |
Restructuring Reserve [Roll Forward] | |
Balance at Beginning of Period | 5,336 |
Provisions before non-cash charges | 248 |
Payments | (559) |
Foreign Currency Translation | (13) |
Balance at End of Period | 5,012 |
Termination benefits | Medical Technology | |
Restructuring Reserve [Roll Forward] | |
Balance at Beginning of Period | 1,884 |
Provisions before non-cash charges | 358 |
Payments | (736) |
Foreign Currency Translation | 0 |
Balance at End of Period | 1,506 |
Facility closure costs | Fabrication Technology | |
Restructuring Reserve [Roll Forward] | |
Balance at Beginning of Period | 591 |
Provisions before non-cash charges | 2,827 |
Payments | (2,831) |
Foreign Currency Translation | (4) |
Balance at End of Period | 583 |
Facility closure costs | Medical Technology | |
Restructuring Reserve [Roll Forward] | |
Balance at Beginning of Period | 297 |
Provisions before non-cash charges | 613 |
Payments | (613) |
Foreign Currency Translation | 0 |
Balance at End of Period | $ 297 |
Accrued Liabilities (Details Te
Accrued Liabilities (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 02, 2021 | Apr. 03, 2020 | Dec. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges and Other Related Charges | $ 4,046 | $ 11,025 | |
Accrued restructuring liability - current portion | 7,385 | $ 7,889 | |
Accrued Liabilities | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrued restructuring liability - current portion | 7,400 | ||
Other Noncurrent Liabilities | |||
Restructuring Cost and Reserve [Line Items] | |||
Accrued restructuring liability - current portion | $ 100 | ||
Cost of Sales | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Charges and Other Related Charges | $ 1,800 |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measurements (Details) - USD ($) $ in Millions | Apr. 02, 2021 | Dec. 31, 2020 |
Financial Instruments and Fair Value Measurements [Abstract] | ||
Long-term Debt, Fair Value | $ 2,300 | $ 2,300 |
Financial Instruments and Fai_4
Financial Instruments and Fair Value Measurements- Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Apr. 02, 2021 | Apr. 03, 2020 |
Cash equivalents | $ 6,252 | $ 7,420 |
Deferred compensation plans asset | 11,802 | 10,881 |
Assets, Fair Value Disclosure | 19,635 | 20,495 |
Deferred compensation plans liability | 11,802 | 10,881 |
Liabilities, Fair Value Disclosure | 15,993 | 12,662 |
Level One | ||
Cash equivalents | 6,252 | 7,420 |
Assets, Fair Value Disclosure | 6,252 | 7,420 |
Level Two | ||
Deferred compensation plans asset | 11,802 | 10,881 |
Assets, Fair Value Disclosure | 13,383 | 13,075 |
Deferred compensation plans liability | 11,802 | 10,881 |
Liabilities, Fair Value Disclosure | 15,993 | 12,662 |
Foreign currency contracts related to customer sales contracts | ||
Foreign currency contracts not designated as hedges, Assets | 1,581 | 2,194 |
Foreign currency contracts not designated as hedges, Liability | 4,191 | 1,781 |
Foreign currency contracts related to customer sales contracts | Level Two | ||
Foreign currency contracts not designated as hedges, Assets | 1,581 | 2,194 |
Foreign currency contracts not designated as hedges, Liability | $ 4,191 | $ 1,781 |
Financial Instruments and Fai_5
Financial Instruments and Fair Value Measurements - Foreign Currency Contracts Notional Values (Details) - USD ($) $ in Millions | Apr. 02, 2021 | Dec. 31, 2020 |
Financial Instruments and Fair Value Measurements [Abstract] | ||
Derivative Asset, Notional Amount | $ 309.4 | $ 250.4 |
Financial Instruments and Fai_6
Financial Instruments and Fair Value Measurements - Gain (Loss) On Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Designated As Hedging Instrument | ||
Unrealized (loss) gain on net investment hedges | $ 12,381 | $ 12,180 |
Not Designated As Hedging Instrument | Foreign currency contracts related to customer sales contracts | ||
Unrealized gain (loss) | (2,611) | 2,417 |
Realized gain (loss) | $ 51 | $ (197) |
Financial Instruments and Fai_7
Financial Instruments and Fair Value Measurements - Schedule of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Apr. 02, 2021 | Dec. 31, 2020 | Apr. 03, 2020 | Dec. 31, 2019 |
Fair Value Disclosures [Abstract] | ||||
Cash and cash equivalents | $ 763,653 | $ 97,068 | ||
Restricted Cash | 0 | 4,001 | ||
Cash and cash equivalents and Restricted cash | $ 763,653 | $ 101,069 | $ 365,604 | $ 109,632 |
Claims Rollforward (Details)
Claims Rollforward (Details) | 3 Months Ended | |
Apr. 02, 2021 | Apr. 03, 2020 | |
Loss Contingency Accrual [Roll Forward] | ||
Claims unresolved, beginning of period | 14,809 | 16,299 |
Claims filed | 1,067 | 1,043 |
Claims resolved | (581) | (600) |
Claims unresolved, end of period | 15,295 | 16,742 |
Asbestos Litigation (Details 1)
Asbestos Litigation (Details 1) - USD ($) $ in Thousands | Apr. 02, 2021 | Dec. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
Long-term asbestos insurance asset | $ 229,879 | $ 232,712 |
Long-term asbestos insurance receivable | 27,868 | 31,815 |
Accrued asbestos liability | 42,411 | 41,626 |
Long-term asbestos liability | $ 248,669 | $ 253,144 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | |
Apr. 02, 2021USD ($)segment | Apr. 03, 2020USD ($) | |
Number of Operating Segments | segment | 2 | |
Revenues | $ 879,211 | $ 816,356 |
Segment operating income | 67,106 | 58,762 |
Income (loss) from continuing operations before income taxes | 35,647 | 22,041 |
Interest expense | 25,660 | 24,796 |
Restructuring and other related charges | 4,046 | 11,025 |
MDR and other costs | 1,753 | 900 |
Fabrication Technology | ||
Revenues | 568,128 | 525,537 |
Segment operating income | 82,305 | 69,036 |
Medical Technology | ||
Revenues | 311,083 | 290,819 |
Segment operating income | 2,162 | 3,804 |
Corporate and other | ||
Segment operating income | $ (17,361) | (14,078) |
Cost of Sales | ||
Restructuring and other related charges | $ 1,800 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent event - USD ($) $ in Millions | Apr. 24, 2021 | Apr. 23, 2021 | Jul. 02, 2021 |
Subsequent Event [Line Items] | |||
Loss on extinguishment of debt | $ 29.9 | ||
Call premium on retired debt | $ 24.4 | ||
MedShape, Inc | |||
Subsequent Event [Line Items] | |||
Cash consideration | $ 125 | ||
2026 Notes | |||
Subsequent Event [Line Items] | |||
Principal redeemed | $ 100 | ||
Redemption price, percentage | 106.375% | ||
2024 and 2026 notes | |||
Subsequent Event [Line Items] | |||
Aggregate amount redeemed | $ 724.4 | ||
2024 Notes | |||
Subsequent Event [Line Items] | |||
Redemption price, percentage | 103.00% |