Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jul. 01, 2017 | Aug. 08, 2017 | |
DEI [Abstract] | ||
Entity Registrant Name | COHERENT INC | |
Trading Symbol | COHR | |
Entity Central Index Key | 21,510 | |
Document Type | 10-Q | |
Document Period End Date | Jul. 1, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 24,631,458 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jul. 01, 2017 | Oct. 01, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 472,307 | $ 354,347 |
Restricted cash | 1,060 | 0 |
Short-term investments | 120 | 45,606 |
Accounts receivable—net of allowances | 277,853 | 165,715 |
Inventories | 402,849 | 212,898 |
Prepaid expenses and other assets | 74,827 | 37,073 |
Assets held-for-sale | 32,556 | 0 |
Total current assets | 1,261,572 | 815,639 |
Property and equipment, net | 268,622 | 127,443 |
Goodwill | 410,417 | 101,458 |
Intangible assets, net | 202,690 | 13,874 |
Non-current restricted cash | 12,524 | 0 |
Other assets | 122,604 | 102,734 |
Total assets | 2,278,429 | 1,161,148 |
Current liabilities: | ||
Short-term borrowings and current-portion of long-term obligations | 5,485 | 20,000 |
Accounts payable | 72,755 | 45,182 |
Income taxes payable | 71,427 | 19,870 |
Other current liabilities | 229,642 | 116,442 |
Total current liabilities | 379,309 | 201,494 |
Long-term obligations | 652,700 | 0 |
Other long-term liabilities | 178,378 | 48,826 |
Commitments and contingencies (Note 11) | ||
Stockholders’ equity: | ||
Common stock, Authorized | 245 | 242 |
Additional paid-in capital | 162,525 | 151,298 |
Accumulated other comprehensive income (loss) | 7,314 | (5,300) |
Retained earnings | 897,958 | 764,588 |
Total stockholders’ equity | 1,068,042 | 910,828 |
Total liabilities and stockholders’ equity | $ 2,278,429 | $ 1,161,148 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jul. 01, 2017 | Oct. 01, 2016 |
Condensed Consolidated Balance Sheets (Parenthetical) [Abstract] | ||
Allowance for Doubtful Accounts Receivable | $ 5,934 | $ 2,420 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares, Outstanding | 24,631,000 | 24,324,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 01, 2017 | Jul. 02, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 133,370 | $ 56,717 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 31,576 | 19,410 |
Amortization of intangible assets | 44,303 | 6,201 |
Gain on business combination | (5,416) | 0 |
Deferred income taxes | 1,964 | (3,356) |
Amortization of debt issuance cost | 2,970 | 0 |
Stock-based compensation | 19,078 | 14,821 |
Non-cash restructuring charges | 4,395 | 0 |
Other non-cash expense | 201 | 387 |
Changes in assets and liabilities, net of effect of acquisitions: | ||
Accounts receivable | (23,519) | (4,195) |
Inventories | 4,067 | (43,627) |
Prepaid expenses and other assets | (3,902) | (4,809) |
Other long-term assets | (3,319) | (577) |
Accounts payable | 6,535 | 9,824 |
Income taxes payable/receivable | 28,319 | (2,759) |
Other current liabilities | 39,849 | 4,519 |
Other long-term liabilities | 5,729 | 2,065 |
Cash flows from discontinued operations | (918) | 0 |
Net cash provided by operating activities | 285,282 | 54,621 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (45,352) | (28,310) |
Proceeds from dispositions of property and equipment | 1,002 | 422 |
Purchases of available-for-sale securities | 0 | (180,842) |
Proceeds from sales and maturities of available-for-sale securities | 25,113 | 144,966 |
Acquisition of businesses, net of cash acquired | (740,481) | 0 |
Cash flows from discontinued operations | (649) | 0 |
Net cash used in investing activities | (760,367) | (63,764) |
Cash flows from financing activities: | ||
Short-term borrowings | 7,602 | 54,792 |
Repayments of short-term borrowings | (29,240) | (34,792) |
Proceeds from long-term borrowings | 740,685 | 0 |
Repayments of long-term borrowings | (88,826) | 0 |
Cash paid to subsidiaries' minority shareholders | (816) | 0 |
Issuance of common stock under employee stock option and purchase plans | 8,111 | 7,249 |
Net settlement of restricted common stock | (15,690) | (5,414) |
Increase (Decrease) in Book Overdrafts | 0 | 880 |
Debt issuance costs | (26,367) | (2,530) |
Net cash provided by financing activities | 595,459 | 20,185 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 11,170 | (2,242) |
Net increase in cash, cash equivalents and restricted cash | 131,544 | 8,800 |
Cash, cash equivalents and restricted cash, beginning of period | 354,347 | 130,607 |
Cash, cash equivalents and restricted cash, end of period | 485,891 | 139,407 |
Noncash investing and financing activities: | ||
Unpaid property and equipment purchases | 1,950 | 2,538 |
Use of previously owned equity shares in acquisition | 20,685 | 0 |
Condensed consolidated statements of cash flows | ||
Cash and cash equivalents | 472,307 | 139,407 |
Restricted cash | 1,060 | 0 |
Non-current restricted cash | $ 12,524 | $ 0 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | ||||
Statement of Comprehensive Income [Abstract] | |||||||
Net income | $ 61,117 | $ 18,650 | $ 133,370 | $ 56,717 | |||
Other comprehensive income (loss): | |||||||
Translation adjustment, net of taxes | [1],[2] | 19,893 | (6,396) | 15,815 | (1,334) | ||
Net gain (loss) on derivative instruments, net of taxes | [1],[3] | 0 | 0 | 0 | (28) | ||
Changes in unrealized gains (losses) on available-for-sale securities, net of taxes | [1],[4] | 0 | (37) | (3,334) | 2,426 | ||
Defined benefit pension plans, net of taxes | [5] | (401) | 0 | 133 | [1] | 0 | [1] |
Other comprehensive income (loss), net of tax | [1] | 19,492 | (6,433) | 12,614 | 1,064 | ||
Comprehensive income | 80,609 | 12,217 | 145,984 | 57,781 | |||
Translation adjustment functional to reporting currency, tax expenses (benefits) | 0 | 185 | 326 | (304) | |||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax | 0 | (17) | |||||
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax | 0 | $ (22) | (1,878) | $ 1,415 | |||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax | $ (56) | $ (35) | |||||
[1] | Reclassification adjustments were not significant during the three and nine months ended July 1, 2017 and July 2, 2016. | ||||||
[2] | Tax expenses (benefits) of $0 and $(326) were provided on translation adjustments during the three and nine months ended July 1, 2017, respectively. Tax expenses of $185 and $304 were provided on translation adjustments during the three and nine months ended July 2, 2016, respectively. | ||||||
[3] | Tax expenses (benefits) of $0 and $(17) were provided on net gain (loss) on derivative instruments during the three and nine months ended July 2, 2016, respectively. | ||||||
[4] | Tax expenses (benefits) of $0 and $(1,878) were provided on changes in unrealized gains (losses) on available-for-sale securities for the three and nine months ended July 1, 2017, respectively. Tax expenses (benefits) of $(22) and $1,415 were provided on changes in unrealized gains (losses) on available-for-sale securities for the three and nine months ended July 2, 2016, respectively. | ||||||
[5] | Tax benefits of $(56) and $(35) were provided on changes in defined benefit pension plans for the three and nine months ended July 1, 2017, respectively. |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 464,107 | $ 218,767 | $ 1,233,013 | $ 608,924 |
Cost of sales | 256,921 | 124,208 | 704,798 | 341,868 |
Gross profit | 207,186 | 94,559 | 528,215 | 267,056 |
Operating expenses: | ||||
Research and development | 30,483 | 21,441 | 88,103 | 61,536 |
Selling, general and administrative | 72,383 | 46,256 | 218,602 | 123,970 |
Gain from business combination | 0 | 0 | (5,416) | 0 |
Amortization of intangible assets | 3,743 | 574 | 13,060 | 1,975 |
Total operating expenses | 106,609 | 68,271 | 314,349 | 187,481 |
Income from operations | 100,577 | 26,288 | 213,866 | 79,575 |
Other income (expense): | ||||
Interest income | 282 | 351 | 560 | 854 |
Interest expense | (7,494) | (63) | (24,456) | (108) |
Other—net | (730) | 564 | 10,871 | (1,896) |
Total other income (expense), net | (7,942) | 852 | (13,025) | (1,150) |
Income from continuing operations before income taxes | 92,635 | 27,140 | 200,841 | 78,425 |
Provision for income taxes | 29,764 | 8,490 | 65,084 | 21,708 |
Net income from continuing operations | 62,871 | 18,650 | 135,757 | 56,717 |
Loss from discontinued operations, net of income taxes | (1,754) | 0 | (2,387) | 0 |
Net income | $ 61,117 | $ 18,650 | $ 133,370 | $ 56,717 |
Basic net income per share: | ||||
Income per share from continuing operations | $ 2.56 | $ 0.77 | $ 5.55 | $ 2.35 |
Loss per share from discontinued operations, net of income taxes (in USD per share) | (0.07) | 0 | (0.10) | 0 |
Net income per share (in USD per share) | 2.49 | 0.77 | 5.45 | 2.35 |
Diluted net income per share: | ||||
Income per share from continuing operations (in USD per share) | 2.53 | 0.76 | 5.49 | 2.33 |
Loss per share from discontinued operations, net of income taxes (in USD per share) | (0.07) | 0 | (0.10) | 0 |
Net income per share (in USD per share) | $ 2.46 | $ 0.76 | $ 5.39 | $ 2.33 |
Shares used in computation: | ||||
Basic (shares) | 24,537 | 24,192 | 24,460 | 24,108 |
Diluted (shares) | 24,823 | 24,467 | 24,741 | 24,355 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Jul. 01, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting [Text Block] | BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. These interim condensed consolidated financial statements and notes thereto should be read in conjunction with the condensed consolidated financial statements and notes thereto filed by Coherent, Inc. on Form 10-K for the fiscal year ended October 1, 2016 . In the opinion of management, all adjustments necessary for a fair presentation of financial condition and results of operation as of and for the periods presented have been made and include only normal recurring adjustments. Interim results of operations are not necessarily indicative of results to be expected for the year or any other interim periods. Our fiscal year ends on the Saturday closest to September 30 and our third fiscal quarters include 13 weeks of operations in each fiscal year presented. Fiscal year 2017 and 2016 both include 52 weeks. The consolidated financial statements include the accounts of Coherent, Inc. and its direct and indirect subsidiaries (collectively, the "Company", "we", "our", "us" or "Coherent"). Intercompany balances and transactions have been eliminated. On November 7, 2016, we acquired Rofin-Sinar Technologies, Inc. and its direct and indirect subsidiaries ("Rofin"). The significant accounting policies of Rofin have been aligned to conform to those of Coherent, and the consolidated financial statements include the results of Rofin as of the acquisition date. The preparation of consolidated financial statements in conformity with Generally Accepted Accounting Principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. As a result of the acquisition of Rofin in the first quarter of fiscal 2017, we reorganized our prior two reporting segments (Specialty Laser Systems and Commercial Lasers and Components) into two new reporting segments for the combined company based upon the organizational structure of the combined company and how the chief operating decision maker ("CODM") receives and utilizes information provided to allocate resources and make decisions: OEM Laser Sources (“OLS”) and Industrial Lasers & Systems (“ILS”). Accordingly, our segment information was restated retroactively in the first quarter of fiscal 2017. Rofin's operating results have been included primarily in our Industrial Lasers & Systems segment. |
Recent Accounting Standards
Recent Accounting Standards | 9 Months Ended |
Jul. 01, 2017 | |
Accounting Policies [Abstract] | |
Recent Accounting Standards | RECENT ACCOUNTING STANDARDS Adoption of New Accounting Pronouncement In November 2016, the FASB issued amended guidance that require a statement of cash flows to explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new standard will become effective for our fiscal year beginning September 30, 2018. We elected to early adopt the standard in the first quarter of fiscal 2017 on a retrospective basis with no impact on our condensed consolidated financial statements and disclosures. In April 2015, the FASB issued amended guidance that simplifies the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amended guidance. The new standard became effective for our fiscal year beginning October 2, 2016. We elected to early adopt the standard in the second quarter of fiscal 2016 and had recorded debt issuance costs of $5.2 million in other assets as of October 1, 2016 for the debt commitment we entered into in the second quarter of fiscal 2016 because the debt was not outstanding as of October 1, 2016. The debt issuance costs related to the term loan facility were reclassified to debt in the first quarter of fiscal 2017 when we drew down the debt. |
Business Combinations
Business Combinations | 9 Months Ended |
Jul. 01, 2017 | |
Business Combinations [Abstract] | |
Business Combinations | 3. BUSINESS COMBINATIONS Fiscal 2017 Acquisitions Rofin On November 7, 2016, we completed our acquisition of Rofin pursuant to the Merger Agreement dated March 16, 2016. Rofin is one of the world's leading developers and manufacturers of high-performance industrial laser sources and laser-based solutions and components. Rofin's operating results have been included primarily in our Industrial Lasers & Systems segment. As a condition of the acquisition, we are required to divest ourselves of Rofin’s low power CO2 laser business based in Hull, United Kingdom (the "Hull Business"), and will report this business separately as a discontinued operation until it is divested (See Note 18, "Discontinued Operations"). In the third quarter of fiscal 2017, we entered into an agreement with a potential purchaser of the Hull Business and submitted our proposed purchaser to the European Commission for its review and approval, including the terms under which the purchase and operation of the Hull Business will occur. The European Commission has not yet determined whether it will approve or decline our proposed purchaser and the terms of such divestiture. Due to the timing of the acquisition, the total purchase consideration has been allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on a preliminary valuation analysis. These preliminary values may change in future reporting periods upon finalization of the valuation, which will occur no later than the fourth quarter of fiscal 2017. The total purchase consideration allocated to net assets acquired was approximately $936.3 million and consisted of the following (in thousands): Cash consideration to Rofin's shareholders $ 904,491 Cash settlement paid for Rofin employee stock options 15,290 Total cash payments to Rofin shareholders and option holders 919,781 Add: fair value of previously owned Rofin shares 20,685 Less: post-merger stock compensation expense (4,152 ) Total purchase price to allocate $ 936,314 The acquisition was an all-cash transaction at a price of $32.50 per share of Rofin common stock. We funded the payment of the aggregate consideration with a combination of our available cash on hand and the proceeds from the Euro Term Loan described in Note 9. The total payment of $15.3 million due to the cancellation of options held by employees of Rofin was allocated between total estimated merger consideration of $11.1 million and post-merger stock-based compensation expense of $4.2 million based on the portion of the total service period of the underlying options that had not been completed by the merger date. We recognized a gain of $5.4 million in the first quarter of fiscal 2017 on the increase in fair value from the date of purchase for the shares of Rofin we owned before the acquisition. Under the acquisition method of accounting, the total estimated acquisition consideration is allocated to the acquired tangible and intangible assets and assumed liabilities of Rofin based on their fair values as of the acquisition date. Any excess of the acquisition consideration over the fair value of assets acquired and liabilities assumed is allocated to goodwill. We expect that all such goodwill will not be deductible for tax purposes. In the third quarter of fiscal 2017, we re-evaluated the carrying value of the Hull Business that has been presented as assets held for sale since the acquisition. Approximately $33.9 million of goodwill was reallocated from the assets held for sale to the remaining business acquired as we are within the remeasurement period. Our preliminary allocation of the purchase price is as follows (in thousands): Cash, cash equivalents and short-term investments $ 163,425 Accounts receivable 90,877 Inventory 189,869 Prepaid expenses and other assets 16,111 Assets held-for-sale, current 29,545 Property and equipment 126,507 Other assets 31,464 Intangible assets: Existing technology 169,029 In-process research and development 6,000 Backlog 5,600 Customer relationships 39,209 Trademarks 5,699 Patents 300 Goodwill 298,539 Current portion of long-term obligations (3,633 ) Current liabilities held for sale (7,001 ) Accounts payable (21,603 ) Other current liabilities (67,452 ) Long-term debt (11,641 ) Other long-term liabilities (124,530 ) Total $ 936,314 The fair value write-up of acquired finished goods and work-in-process inventory was $26.8 million , which was amortized over the expected period during which the acquired inventory is sold, or 6 months. Accordingly, for the three and nine months ended July 1, 2017 , we recorded $4.4 million and $26.4 million , respectively, of incremental cost of sales associated with the fair value write-up of inventory acquired in the merger with Rofin. The fair value write-up of inventory acquired was fully amortized as of July 1, 2017. The fair value write-up of acquired property, plant and equipment of $36.8 million will be amortized over the useful lives of the assets, ranging from 3 to 31 years. Property, plant and equipment is valued at its value-in-use, unless there was a known plan to dispose of the asset. The acquired existing technology, backlog, trademarks and patents are being amortized on a straight-line basis, which approximates the economic use of the asset, over their estimated useful lives of 3 to 5 years, 6 months, 3 years, and 5 years, respectively. Customer relationships are being amortized on an accelerated basis utilizing free cash flows over periods ranging from 5 to 10 years. The useful lives of in-process research and development will be defined in the future upon further evaluation of the status of these applications. The fair value of the acquired intangibles was determined using the income approach. In performing these valuations, the key underlying probability-adjusted assumptions of the discounted cash flows were projected revenues, gross margin expectations and operating cost estimates. The valuations were based on the information that was available as of the acquisition date and the expectations and assumptions that have been deemed reasonable by our management. There are inherent uncertainties and management judgment required in these determinations. This acquisition resulted in a purchase price that exceeded the estimated fair value of tangible and intangible assets, which was allocated to goodwill. We believe the amount of goodwill relative to identifiable intangible assets relates to several factors including: (1) potential buyer-specific synergies related to market opportunities for a combined product offering; and (2) potential to leverage our sales force to attract new customers and revenue and cross sell to existing customers. In-process research and development (“IPR&D”) consists of two projects that have not yet reached technological feasibility. Acquired IPR&D assets are initially recognized at fair value and are classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. The value assigned to IPR&D was determined by considering the value of the products under development to the overall development plan, estimating the resulting net cash flows from the projects when completed and discounting the net cash flows to their present value. During the development period, these assets will not be amortized as charges to earnings; instead these assets will be subject to periodic impairment testing. Upon successful completion of the development process for the acquired IPR&D projects, the assets would then be considered finite-lived intangible assets and amortization of the assets will commence. The projects have not been completed as of July 1, 2017 . We expensed $0.4 million and $17.6 million of acquisition-related costs as selling, general and administrative expenses in our consolidated statements of operations in the three and nine months ended July 1, 2017 , respectively. The results of this acquisition were included in our consolidated operations beginning on November 7, 2016. The amount of continuing Rofin net sales and net loss from continuing operations included in our condensed consolidated statements of operations for the three months ended July 1, 2017 was approximately $116.5 million and $6.5 million , respectively. The amount of continuing Rofin net sales and net loss from continuing operations included in our condensed consolidated statements of operations for the nine months ended July 1, 2017 was approximately $301.6 million and $36.4 million , respectively. Unaudited Pro Forma Information The following unaudited pro forma financial information presents our combined results of operations as if the acquisition of Rofin and the related issuance of our Euro Term Loan had occurred on October 4, 2015. The unaudited pro forma financial information is not necessarily indicative of what our condensed consolidated results of operations actually would have been had the acquisition been completed on October 4, 2015. In addition, the unaudited pro forma financial information does not attempt to project the future results of operations of the combined company. The actual results may differ significantly from the pro forma results presented here due to many factors. Three Months Ended Nine Months Ended July 1, July 2, July 1, July 2, Total net sales $ 472,027 $ 344,707 $ 1,294,841 $ 954,044 Net income (loss) $ 64,558 $ 17,465 $ 159,260 $ (21,093 ) Net income (loss) per share: Basic $ 2.63 $ 0.72 $ 6.51 $ (0.87 ) Diluted $ 2.60 $ 0.71 $ 6.44 $ (0.87 ) The unaudited pro forma financial information above includes the net income of Rofin’s low power CO2 laser business based in Hull, United Kingdom, which is recorded as a discontinued operation in the three and nine months ended July 1, 2017. See Note 18, "Discontinued Operations". The unaudited pro forma financial information above reflects the following material adjustments: • Incremental amortization and depreciation expense related to the estimated fair value of identifiable intangible assets and property, plant and equipment from the purchase price allocation. • The exclusion of amortization of inventory step-up to its estimated fair value from the three and nine months ended July 1, 2017 and the addition of the amortization to the three and nine months ended July 2, 2016 . • The exclusion of revenue adjustments as a result of the reduction in customer deposits and deferred revenue related to its estimated fair value from the nine months ended July 1, 2017 and the addition of these adjustments to the nine months ended July 2, 2016 . • Incremental interest expense and amortization of debt issuance costs related to our Euro Term Loan and Revolving Credit Facility (as defined in Note 9, "Borrowings"). • The exclusion of acquisition costs incurred by both Coherent and Rofin from the three and nine months ended July 1, 2017 and the addition of these costs to the three and nine months ended July 2, 2016 . • The exclusion of a stock-based compensation charge related to the acceleration of Rofin options from the nine months ended July 1, 2017 and the addition of this charge to the nine months ended July 2, 2016 . • The exclusion of a gain on business combination for our previously owned shares of Rofin from the nine months ended July 1, 2017 and the addition of this gain to the nine months ended July 2, 2016 . • The exclusion of a foreign exchange gain on forward contracts related to our debt commitment and debt issuance from the nine months ended July 1, 2017 and the addition of this gain to the nine months ended July 2, 2016 . • The estimated tax impact of the above adjustments. |
Fair Values
Fair Values | 9 Months Ended |
Jul. 01, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Values | . FAIR VALUES We have not changed our valuation techniques in measuring the fair value of any financial assets and liabilities during the period. We recognize transfers between levels within the fair value hierarchy, if any, at the end of each quarter. There were no transfers between levels during the periods presented. As of July 1, 2017 and October 1, 2016 , we did not have any assets or liabilities valued based on Level 3 valuations. Financial assets and liabilities measured at fair value as of July 1, 2017 and October 1, 2016 are summarized below (in thousands): Aggregate Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Aggregate Fair Value Quoted Prices Significant Other Observable Inputs July 1, 2017 October 1, 2016 (Level 1) (Level 2) (Level 1) (Level 2) Assets: Cash equivalents: Money market fund deposits $ 83,117 $ 83,117 $ — $ 237,142 $ 237,142 $ — Short-term investments: U.S. Treasury and agency obligations (2) 120 — 120 125 — 125 Commercial paper (2) — — — 24,999 — 24,999 Equity securities (1) — — — 20,482 20,482 — Prepaid and other assets: Foreign currency contracts (3) 2,531 — 2,531 889 — 889 Mutual funds — Deferred comp and supplemental plan (4) 17,727 17,727 — 14,399 14,399 — Total $ 103,495 $ 100,844 $ 2,651 $ 298,036 $ 272,023 $ 26,013 Liabilities: Other current liabilities: Foreign currency contracts (3) (191 ) — (191 ) (3,100 ) — (3,100 ) Total $ 103,304 $ 100,844 $ 2,460 $ 294,936 $ 272,023 $ 22,913 ___________________________________________________ (1) Valuations are based upon quoted market prices. (2) Valuations are based upon quoted market prices in active markets involving similar assets. The market inputs used to value these instruments generally consist of market yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. Pricing sources include industry standard data providers, security master files from large financial institutions, and other third party sources which are input into a distribution-curve-based algorithm to determine a daily market value. This creates a “consensus price” or a weighted average price for each security. (3) The principal market in which we execute our foreign currency contracts is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants usually are large commercial banks. Our foreign currency contracts’ valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. See Note 6, "Derivative Instruments and Hedging Activities". (4) The fair value of mutual funds is determined based on quoted market prices. Securities traded on a national exchange are stated at the last reported sales price on the day of valuation; other securities traded in over-the-counter markets and listed securities for which no sale was reported on that date are stated as the last quoted bid price. |
Short-Term Investments
Short-Term Investments | 9 Months Ended |
Jul. 01, 2017 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
Short-Term Investments | Cash, cash equivalents and short-term investments consist of the following (in thousands): July 1, 2017 Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash and cash equivalents $ 472,307 $ — $ — $ 472,307 Short-term investments: Available-for-sale securities: U.S. Treasury and agency obligations $ 120 $ — $ — $ 120 Total short-term investments $ 120 $ — $ — $ 120 October 1, 2016 Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash and cash equivalents $ 354,347 $ — $ — $ 354,347 Short-term investments: Available-for-sale securities: Commercial paper $ 24,999 $ — $ — $ 24,999 U.S. Treasury and agency obligations 125 — — 125 Equity Securities 15,269 5,213 — 20,482 Total short-term investments $ 40,393 $ 5,213 $ — $ 45,606 None of the unrealized losses as of July 1, 2017 or October 1, 2016 were considered to be other-than-temporary impairments. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Jul. 01, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES We maintain operations in various countries outside of the United States and have foreign subsidiaries that manufacture and sell our products in various global markets. The majority of our sales are transacted in U.S. dollars. However, we do generate revenues in other currencies, primarily the Euro, Japanese Yen, South Korean Won and Chinese Renminbi (RMB). As a result, our earnings, cash flows and cash balances are exposed to fluctuations in foreign currency exchange rates. We attempt to limit these exposures through financial market instruments. We utilize derivative instruments, primarily forward contracts with maturities of four months or less, to manage our exposure associated with anticipated cash flows and net asset and liability positions denominated in foreign currencies. Gains and losses on the forward contracts are mitigated by gains and losses on the underlying instruments. We do not use derivative financial instruments for speculative or trading purposes. The credit risk amounts represent the Company’s gross exposure to potential accounting loss on derivative instruments that are outstanding or unsettled if all counterparties failed to perform according to the terms of the contract, based on then-current currency rates at each respective date. Non-Designated Derivatives The outstanding notional contract and fair value asset (liability) amounts of non-designated hedge contracts, with maximum maturity of four months, are as follows (in thousands): U.S. Notional Contract Value U.S. Fair Value July 1, 2017 October 1, 2016 July 1, 2017 October 1, 2016 Euro currency hedge contracts Purchase $ 89,850 $ 91,108 $ 1,606 $ 162 Sell $ — $ (750,454 ) $ — $ (2,234 ) Japanese Yen currency hedge contracts Purchase $ — $ — $ — $ — Sell $ (25,329 ) $ (36,450 ) $ 343 $ (343 ) South Korean Won currency hedge contracts Purchase $ — $ 31,248 $ 550 $ 413 Sell $ (24,675 ) $ (37,929 ) $ — $ (152 ) Chinese RMB currency hedge contracts Purchase $ — $ — $ — $ — Sell $ (16,193 ) $ (25,237 ) $ (185 ) $ (91 ) Other foreign currency hedge contracts Purchase $ 7,629 $ 6,033 $ 32 $ (4 ) Sell $ (1,786 ) $ (1,775 ) $ (6 ) $ 38 The fair value of our derivative instruments is included in prepaid expenses and other assets and in other current liabilities in our Condensed Consolidated Balance Sheets (See Note 4). During the three and nine months ended July 1, 2017 , we recognized a gain of $5.6 million and a gain of $15.0 million , respectively, in other income (expense) for derivative instruments not designated as hedging instruments. During the three and nine months ended July 2, 2016 , we recognized a loss of $4.9 million and a loss of $7.4 million , respectively, in other income (expense) for derivative instruments not designated as hedging instruments. Designated Derivatives Cash flow hedges related to anticipated transactions are designated and documented at the inception of the hedge when we enter into contracts for specific future transactions. Cash flow hedges are evaluated for effectiveness quarterly. The effective portion of the gain or loss on these hedges is reported as a component of OCI in stockholder's equity and is reclassified into earnings when the underlying transaction affects earnings. We had no cash flow hedges outstanding at July 1, 2017 or October 1, 2016 . Changes in the fair value of currency forward contracts due to changes in time value are excluded from the assessment of effectiveness and recognized in other income (expense) as incurred. We classify the cash flows from the foreign exchange forward contracts that are accounted for as cash flow hedges in the same section as the underlying item, primarily within cash flows from operating activities since we do not designate our cash flow hedges as investing or financing activities. During the three and nine months ended July 2, 2016 , we recorded losses in OCI and in other income (expense) related to the accounting for derivatives designated as cash flow hedges. These losses were not material. During the three and nine months ended July 1, 2017 , we did not have any activities related to designated cash flow hedges. Master Netting Arrangements To mitigate credit risk in derivative transactions, we enter into master netting arrangements that allow each counterparty in the arrangements to net settle amounts of multiple and separate derivative transactions under certain conditions. We present the fair value of derivative assets and liabilities within our condensed consolidated balance sheet on a gross basis even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation. The impact of netting derivative assets and liabilities is not material to our financial position for any of the periods presented. Our derivative contracts do not contain any credit risk related contingent features and do not require collateral or other security to be furnished by us or the counterparties. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Jul. 01, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS During the nine months ended July 1, 2017 , we noted no indications of impairment or triggering events to cause us to review goodwill for potential impairment. We will conduct our annual goodwill testing during the fourth fiscal quarter. The changes in the carrying amount of goodwill by segment for the period from October 1, 2016 to July 1, 2017 are as follows (in thousands): OEM Laser Sources Industrial Lasers & Systems Total Balance as of October 1, 2016 $ 97,015 $ 4,443 $ 101,458 Additions (see Note 3) 1,644 296,895 298,539 Translation adjustments and other 1,116 9,304 10,420 Balance as of July 1, 2017 $ 99,775 $ 310,642 $ 410,417 Components of our amortizable intangible assets are as follows (in thousands): July 1, 2017 October 1, 2016 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Existing technology $ 205,124 $ (52,346 ) $ 152,778 $ 70,664 $ (61,133 ) $ 9,531 Patents 313 (41 ) 272 — — — Customer relationships 50,300 (11,596 ) 38,704 15,968 (11,658 ) 4,310 Trade Name 6,001 (1,306 ) 4,695 384 (351 ) 33 In-process research & development 6,241 — 6,241 — — — Total $ 267,979 $ (65,289 ) $ 202,690 $ 87,016 $ (73,142 ) $ 13,874 For accounting purposes, when an intangible asset is fully amortized, it is removed from the disclosure schedule. Amortization expense for intangible assets for the nine months ended July 1, 2017 and July 2, 2016 was $44.3 million and $6.2 million , respectively. The change in the accumulated amortization also includes $2.1 million and $0.5 million of foreign exchange impact for the nine months ended July 1, 2017 and July 2, 2016 , respectively. At July 1, 2017 , estimated amortization expense for the remainder of fiscal 2017 , the next five succeeding fiscal years and all fiscal years thereafter are as follows (in thousands): Estimated Amortization Expense 2017 (remainder) $ 15,056 2018 56,057 2019 52,760 2020 45,574 2021 13,769 2022 3,505 Thereafter 9,728 Total (excluding IPR&D) $ 196,449 |
Balance Sheet Details
Balance Sheet Details | 9 Months Ended |
Jul. 01, 2017 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Details | BALANCE SHEET DETAILS Inventories consist of the following (in thousands): July 1, October 1, Purchased parts and assemblies $ 114,616 $ 56,824 Work-in-process 142,876 88,391 Finished goods 145,357 67,683 Total inventories $ 402,849 $ 212,898 Prepaid expenses and other assets consist of the following (in thousands): July 1, October 1, Prepaid and refundable income taxes $ 32,944 $ 12,415 Other taxes receivable 14,850 10,538 Prepaid expenses and other assets 27,033 14,120 Total prepaid expenses and other assets $ 74,827 $ 37,073 Other assets consist of the following (in thousands): July 1, October 1, Assets related to deferred compensation arrangements $ 31,167 $ 26,356 Deferred tax assets 78,515 67,157 Other assets 12,922 9,221 Total other assets $ 122,604 $ 102,734 Other current liabilities consist of the following (in thousands): July 1, October 1, Accrued payroll and benefits $ 57,076 $ 47,506 Deferred revenue 78,642 33,034 Warranty reserve 33,983 15,949 Accrued expenses and other 32,540 18,356 Current liabilities held for sale 7,556 — Customer deposits 19,845 1,597 Total other current liabilities $ 229,642 $ 116,442 Components of the reserve for warranty costs during the first nine months of fiscal 2017 and 2016 were as follows (in thousands): Nine Months Ended July 1, July 2, Beginning balance $ 15,949 $ 15,308 Additions related to current period sales 27,854 15,298 Warranty costs incurred in the current period (23,422 ) (15,059 ) Accruals resulting from acquisitions 14,314 — Adjustments to accruals related to foreign exchange and other (712 ) (396 ) Ending balance $ 33,983 $ 15,151 Other long-term liabilities consist of the following (in thousands): July 1, October 1, Long-term taxes payable $ 35,295 $ 2,951 Deferred compensation 33,288 28,313 Deferred tax liabilities 55,629 1,468 Deferred revenue 4,544 4,069 Asset retirement obligations liability 5,227 2,796 Defined benefit plan liabilities 42,214 8,123 Other long-term liabilities 2,181 1,106 Total other long-term liabilities $ 178,378 $ 48,826 |
Borrowings
Borrowings | 9 Months Ended |
Jul. 01, 2017 | |
Debt Disclosure [Abstract] | |
Borrowings | 9. BORROWINGS On November 4, 2016, we repaid the outstanding balance, plus accrued interest, on our former domestic line of credit and terminated the $50.0 million credit facility with Union Bank of California. We assumed two term loans having an aggregated principal amount of $15.3 million as of November 7, 2016 and several lines of credit totaling approximately $18.1 million with the completion of the Rofin acquisition. On November 7, 2016 (the "Closing Date"), we entered into a Credit Agreement by and among us, Coherent Holding GmbH, as borrower (the “Borrower”), and certain of our direct and indirect subsidiaries from time to time party thereto, as guarantors, the lenders from time to time party thereto, Barclays Bank PLC, as administrative agent and an L/C Issuer, Bank of America, N.A., as an L/C Issuer, and MUFG Union Bank, N.A., as an L/C Issuer (the "Credit Agreement"). The Credit Agreement provides for a 670.0 million Euro senior secured term loan facility (the "Euro Term Loan") and a $100.0 million senior secured revolving credit facility ("Revolving Credit Facility") with a $30.0 million letter of credit sublimit and a $10.0 million swing line sublimit. The Borrower may increase the aggregate revolving commitments or borrow incremental term loans in an aggregate principal amount not to exceed the sum of $150.0 million and an amount that would not cause the senior secured net leverage ratio to be greater than 2.75 to 1.00, subject to certain conditions, including obtaining additional commitments from the lenders then party to the Credit Agreement or new lenders. On November 7, 2016, the Borrower borrowed the full 670.0 million Euros under the Euro Term Loan and its proceeds were used to finance the acquisition of Rofin and pay related fees and expenses. On November 7, 2016, we also used 10.0 million Euros of the capacity under the Revolving Credit Facility for the issuance of a letter of credit. The terms of the Credit Agreement require the Borrower to prepay the term loans in certain circumstances, including from excess cash flow beyond a threshold amount, from the receipt of proceeds from certain dispositions or from the incurrence of certain indebtedness, and from extraordinary receipts resulting in net cash proceeds in excess of $10.0 million in any fiscal year. The Borrower has the right to prepay loans under the Credit Agreement in whole or in part at any time without premium or penalty, subject to customary breakage costs. Revolving loans may be borrowed, repaid and reborrowed until the fifth anniversary of the Closing Date, at which time all outstanding revolving loans must be repaid. The Euro Term Loan matures on the seventh anniversary of the Closing Date, at which time all outstanding principal and accrued and unpaid interest on the Euro Term Loan must be repaid. On June 30, 2017 and March 31, 2017, we made voluntary principal payments of 45.0 million Euros and 30.0 million Euros, respectively, on the Euro Term Loan. As of July 1, 2017, the outstanding principal amount of the Euro Term Loan was 590.0 million Euros. As of July 1, 2017, the outstanding principal amount of the Revolving Credit Facility was 10.0 million Euro. Loans under the Credit Agreement bear interest, at the Borrower’s option, at a rate equal to either (i)(x) in the case of calculations with respect to U.S. Dollars or certain other alternative currencies, the London interbank offered rate (the “LIBOR”) or (y) in the case of calculations with respect to the Euro, the euro interbank offered rate ("EURIBOR" and, together with LIBOR, the "Eurocurrency Rate") or (ii) a base rate (the “Base Rate”) equal to the highest of (x) the federal funds rate, plus 0.50%, (y) the prime rate then in effect and (z) the Eurocurrency Rate for loans denominated in U.S. dollars applicable to a one-month interest period, plus 1.0%, in each case, plus an applicable margin. The applicable margin for Euro Term Loan borrowed as Eurocurrency Rate loans, is 3.50% initially, and following the first anniversary of the Closing Date ranges from 3.50% to 3.00% depending on the consolidated total gross leverage ratio at the time of determination. For Euro Term Loan borrowed as Base Rate loans, the applicable margin initially is 2.50%, and following the first anniversary of the Closing Date ranges from 2.50% to 2.00% depending upon the consolidated total gross leverage ratio at the time of determination. The applicable margin for revolving loans borrowed as Eurocurrency Rate loans, ranges from 4.25% to 3.75%, and for revolving loans borrowed as Base Rate loans, ranges from 3.25% to 2.75%, in each case, based on the consolidated total gross leverage ratio at the time of determination. Interest on Base Rate Loans is payable quarterly in arrears. Interest on Eurocurrency Rate loans is payable at the end of the applicable interest period (or at three month intervals if the interest period exceeds three months). Interest periods for Eurocurrency Rate loans may be, at the Borrower’s option, one, two, three or six months. On May 8, 2017, we entered into Amendment No. 1 and Waiver (the "Repricing Amendment") to the Credit Agreement to, among other things, (i) reduce the applicable interest rate margins with respect to the Euro Term Loans to 1.25% for Euro Term Loans maintained as Base Rate loans and 2.25% for Euro Term Loans maintained as Eurocurrency Rate loans, with stepdowns to 1.00% and 2.00% , respectively, available after May 8, 2018 if the consolidated total gross leverage ratio for Coherent and its restricted subsidiaries is less than 1.50 :1.00 and (ii) extend the period during which a prepayment premium may be required for a repricing transaction until six months after the effective date of the Repricing Amendment. In connection with the execution of the Repricing Amendment, we paid arrangement fees of approximately $0.5 million , as well as certain fees and expenses of the administrative agent and the lenders, in accordance with the terms of the Credit Agreement. The Credit Agreement requires the Borrower to make scheduled quarterly payments on the Euro Term Loan of 0.25% of the original principal amount of the Euro Term Loan, with any remaining principal payable at maturity. A commitment fee accrues on any unused portion of the revolving loan commitments under the Credit Agreement at a rate of 0.375% or 0.5% depending on the consolidated total gross leverage ratio at any time of determination. The Borrower is also obligated to pay other customary fees for a credit facility of this size and type. On the Closing Date, we and certain of our direct and indirect subsidiaries, as guarantors, provided an unconditional guaranty of all obligations of the Borrower and the other loan parties arising under the Credit Agreement, the other loan documents and under swap contracts and treasury management agreements with the lenders or their affiliates (with certain limited exceptions). The Borrower and the guarantors have also granted security interests in substantially all of their assets to secure such obligations. The Credit Agreement contains customary affirmative covenants, including covenants regarding the payment of taxes and other obligations, maintenance of insurance, reporting requirements and compliance with applicable laws and regulations, and negative covenants, including covenants limiting the ability of us and our subsidiaries to, among other things, incur debt, grant liens, make investments, make certain restricted payments, transact with affiliates, and sell assets. The Credit Agreement also requires us and our subsidiaries to maintain a senior secured net leverage ratio as of the last day of each fiscal quarter of less of than or equal to 3.50 to 1.00. The Credit Agreement contains customary events of default that include, among other things, payment defaults, cross defaults with certain other indebtedness, violation of covenants, inaccuracy of representations and warranties in any material respect, change in control of us and the Borrower, judgment defaults, and bankruptcy and insolvency events. If an event of default exists, the lenders may require the immediate payment of all Obligations, as defined in the Credit Agreement, and may exercise certain other rights and remedies provided for under the Credit Agreement, the other loan documents and applicable law. The acceleration of such obligations is automatic upon the occurrence of a bankruptcy and insolvency event of default. We were in compliance with all covenants at July 1, 2017 . We incurred $28.5 million of debt issuance costs related to the Euro Term Loan and $0.5 million of debt issuance costs to the original lenders related to the Repricing Amendment, which are included in short-term borrowings and current portion of long-term obligations and long-term obligations in the condensed consolidated balance sheets and will be amortized to interest expense over the seven year life of the Euro Term Loan using the effective interest method. We incurred $2.3 million of debt issuance costs in connection with the Revolving Credit Facility which were capitalized and included in prepaid expenses and other assets and other assets in the condensed consolidated balance sheets and will be amortized to interest expense using the straight-line method over the contractual term of five years of the Revolving Credit Facility. For the three and nine months ended July 1, 2017 , we recognized interest expense of $6.1 million and $18.3 million , respectively, and amortization of debt issuance costs of $1.1 million and $2.9 million , respectively, in relation to the Euro Term Loan. Additional sources of cash available to us were international currency lines of credit and bank credit facilities totaling $28.7 million as of July 1, 2017 , of which $23.0 million was unused and available. These unsecured international credit facilities were used in Europe and Japan during the first nine months of fiscal 2017 . As of July 1, 2017 , we had utilized $5.5 million of the international credit facilities as guarantees in Europe. Short-term borrowings and current portion of long-term obligations consist of the following (in thousands): July 1, October 1, Current portion of Euro Term Loan (1) $ 3,464 $ — 1.3% Term loan due 2024 1,428 — 1.0% State of Connecticut term loan due 2023 370 — Line of credit borrowings 223 20,000 Total short-term borrowings and current portion of long-term obligations $ 5,485 $ 20,000 (1) Net of debt issuance costs of $4.2 million . Long-term obligations consist of the following (in thousands): July 1, October 1, Euro Term Loan due 2024 (1) $ 641,905 $ — 1.3% Term loan due 2024 8,922 — 1.0% State of Connecticut term loan due 2023 1,873 — Total long-term obligations $ 652,700 $ — (1) Net of debt issuance costs of $24.2 million . Contractual maturities of our debt obligations as of July 1, 2017 are as follows (in thousands): Amount 2017 (remainder) $ 2,362 2018 9,450 2019 9,450 2020 9,450 2021 9,450 2022 9,450 Thereafter 636,732 Total $ 686,344 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Jul. 01, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION Fair Value of Stock Compensation We recognize compensation expense for all share based payment awards based on the fair value of such awards. The expense is recognized on a straight-line basis over the respective requisite service period of the awards. Determining Fair Value The fair values of shares purchased under the Employee Stock Purchase Plan (“ESPP”) for the three and nine months ended July 1, 2017 and July 2, 2016 , respectively, were estimated using the following weighted-average assumptions: Employee Stock Purchase Plan Three Months Ended Nine Months Ended July 1, July 2, July 1, July 2, Expected life in years 0.5 0.5 0.5 0.5 Expected volatility 34.5 % 38.5 % 30.8 % 31.6 % Risk-free interest rate 0.85 % 0.37 % 0.62 % 0.28 % Expected dividend yield — % — % — % — % Weighted average fair value per share $ 47.36 $ 21.35 $ 32.30 $ 16.08 There were no stock options granted during the three and nine months ended July 1, 2017 and July 2, 2016 . We grant performance restricted stock units to officers and certain employees. The performance restricted stock unit agreements provide for the award of performance restricted stock units with each unit representing the right to receive one share of our common stock to be issued after the applicable award vesting period. The final number of units awarded, if any, for these performance grants will be determined as of the vesting dates, based upon our total shareholder return over the performance period compared to the Russell 2000 Index and could range from no units to a maximum of twice the initial award units. The weighted average fair value for these performance units was determined using a Monte Carlo simulation model incorporating the following weighted average assumptions: Nine Months Ended July 1, 2017 July 2, 2016 Risk-free interest rate 1.3 % 1.2 % Volatility 31.0 % 27.0 % Weighted average fair value $163.17 $74.48 We recognize the estimated cost of these awards, as determined under the simulation model, over the related service period of approximately 3 years, with no adjustment in future periods based upon the actual shareholder return over the performance period. Stock Compensation Expense The following table shows total stock-based compensation expense and related tax benefits included in the condensed consolidated statements of operations for the three and nine months ended July 1, 2017 and July 2, 2016 (in thousands): Three Months Ended Nine Months Ended July 1, July 2, July 1, July 2, Cost of sales $ 880 $ 677 $ 2,618 $ 1,876 Research and development 639 610 2,289 1,646 Selling, general and administrative 5,373 4,402 18,323 11,299 Income tax benefit (1,851 ) (1,588 ) (5,155 ) (3,450 ) $ 5,041 $ 4,101 $ 18,075 $ 11,371 As a result of our acquisition of Rofin on November 7, 2016, we made a payment of $15.3 million due to the cancellation of options held by employees of Rofin. The payment was allocated between total estimated merger consideration of $11.1 million and post-merger stock-based compensation expense of $4.2 million , recorded in the nine months ended July 1, 2017 , based on the portion of the total service period of the underlying options that have not been completed by the merger date. During the three and nine months ended July 1, 2017 , $0.9 million and $2.6 million , respectively, was capitalized into inventory for all stock plans, $0.9 million and $2.4 million , respectively, was amortized to cost of sales and $1.1 million remained in inventory at July 1, 2017 . During the three and nine months ended July 2, 2016 , $0.7 million and $2.0 million , respectively, was capitalized into inventory for all stock plans, $0.7 million and $1.9 million , respectively, was amortized to cost of sales and $0.8 million remained in inventory at July 2, 2016 . At July 1, 2017 , the total compensation cost related to unvested stock-based awards granted to employees under our stock plans but not yet recognized was approximately $38.1 million . We do not estimate forfeitures. This cost will be amortized on a straight-line basis over a weighted-average period of approximately 1.6 years and will be adjusted for subsequent changes in estimated forfeitures. At July 1, 2017 , the total compensation cost related to options to purchase common stock under the ESPP but not yet vested was approximately $1.0 million , which will be recognized over the six month offering period. Stock Awards Activity The following table summarizes the activity of our time-based and performance restricted stock units for the first nine months of fiscal 2017 (in thousands, except per share amounts): Time Based Restricted Stock Units Performance Restricted Stock Units Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Nonvested stock at October 1, 2016 459 $ 66.47 169 $ 74.10 Granted 186 131.54 115 163.17 Vested (1) (228 ) 66.03 (104 ) 77.10 Forfeited (13 ) 76.62 (4 ) 70.57 Nonvested stock at July 1, 2017 404 $ 118.60 176 $ 105.34 __________________________________________ (1) Time-based restricted stock units vested during the fiscal year. Performance-based restricted stock units included at 100% of target goal; under the terms of the awards, the recipient may earn between 0% and 200% of the award. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jul. 01, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES We are subject to legal claims and litigation arising in the ordinary course of business, such as product liability, employment or intellectual property claims, including, but not limited to, the matters described below. On May 14, 2013, IMRA America (“Imra”) filed a complaint for patent infringement against two of our subsidiaries in the Regional Court of Düsseldorf, Germany, captioned In re IMRA America Inc. versus Coherent Kaiserslautern GmbH et. al. 4b O 38/13. The complaint alleges that the use of certain of the Company’s lasers infringes upon EP Patent No. 754,103, entitled “Method For Controlling Configuration of Laser Induced Breakdown and Ablation,” issued November 5, 1997. The patent, now expired in all jurisdictions, is owned by the University of Michigan and licensed to Imra. The complaint seeks unspecified compensatory damages, the cost of court proceedings and seeks to permanently enjoin the Company from infringing the patent in the future. Following the filing of the infringement suit, our subsidiaries filed a separate nullity action with the Federal Patent Court in Munich, Germany requesting that the court hold that the Patent was invalid based on prior art. On October 1, 2015, the Federal Patent Court ruled that the German portion of the Patent was invalid. Imra has appealed this decision to the Federal Court of Justice, the highest civil jurisdiction court in Germany. The infringement action is currently stayed pending the outcome of such appeal. Management has made an accrual with respect to this matter and has determined, based on its current knowledge, that the amount or range of reasonably possible losses in excess of the amounts already accrued is not reasonably estimable. Although we do not expect that such legal claims and litigation will ultimately have a material adverse effect on our consolidated financial position, results of operations or cash flows, an adverse result in one or more matters could negatively affect our results in the period in which they occur. The United States and many foreign governments impose tariffs and duties on the import and export of certain products we sell. From time to time our duty calculations and payments are audited by government agencies. During the second quarter of fiscal 2016, we concluded an audit in South Korea for customs duties and value added tax for the period March 2009 to March 2014. We paid $1.6 million related to this matter in the second quarter of fiscal 2016 and have no remaining accrual at October 1, 2016. On November 7, 2016, we entered into a Credit Agreement, which was amended on May 8, 2017. See Note 9 "Borrowings" for further discussion of the issuance of the financing. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Jul. 01, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Basic earnings per share is computed based on the weighted average number of shares outstanding during the period, excluding unvested restricted stock. Diluted earnings per share is computed based on the weighted average number of shares outstanding during the period increased by the effect of dilutive employee stock awards, including stock options, restricted stock awards and stock purchase plan contracts, using the treasury stock method. The following table presents information necessary to calculate basic and diluted earnings per share (in thousands, except per share data): Three Months Ended Nine Months Ended July 1, July 2, July 1, July 2, Weighted average shares outstanding —basic 24,537 24,192 24,460 24,108 Dilutive effect of employee stock awards 286 275 281 247 Weighted average shares outstanding—diluted 24,823 24,467 24,741 24,355 Net income from continuing operations $ 62,871 $ 18,650 135,757 $ 56,717 Loss from discontinued operations, net of income taxes (1,754 ) — (2,387 ) — Net income $ 61,117 $ 18,650 $ 133,370 $ 56,717 A total of 0 and 214 potentially dilutive securities have been excluded from the diluted share calculation for the three months ended July 1, 2017 and July 2, 2016 , respectively, as their effect was anti-dilutive. A total of 0 and 71 potentially dilutive securities have been excluded from the diluted share calculation for the nine months ended July 1, 2017 and July 2, 2016 , respectively, as their effect was anti-dilutive. |
Other Income (Expense)
Other Income (Expense) | 9 Months Ended |
Jul. 01, 2017 | |
Other Income and Expenses [Abstract] | |
Other Income (Expense) | OTHER INCOME (EXPENSE) Other income (expense) is as follows (in thousands): Three Months Ended Nine Months Ended July 1, July 2, July 1, July 2, Foreign exchange gain (loss) $ (2,439 ) $ (1,261 ) $ 7,928 $ (2,781 ) Gain on deferred compensation investments, net 1,136 1,796 2,831 795 Other 573 29 112 90 Other - net $ (730 ) $ 564 $ 10,871 $ (1,896 ) |
Income Taxes
Income Taxes | 9 Months Ended |
Jul. 01, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Income tax expense includes a provision for federal, state and foreign taxes based on the annual estimated effective tax rate applicable to us and our subsidiaries, adjusted for items which are considered discrete to the period. Our effective tax rates for the three and nine months ended July 1, 2017 were 32.1% and 32.4% , respectively. Our effective tax rates for three and nine months ended July 1, 2017 were lower than the statutory rate of 35% primarily due to differences related to the benefit of income subject to foreign tax rates that are lower than U.S. tax rates including the Singapore tax exemption, the benefit of foreign tax credits and the benefit of federal research and development tax credits. These amounts are partially offset by Rofin transaction costs not deductible for tax purposes, tax costs of Rofin restructuring, ASC 740-10 (formerly FIN48) tax liabilities for transfer pricing, stock-based compensation not deductible for tax purposes and limitations on the deductibility of compensation under IRC Section 162(m). The effective tax rate on income before income taxes for the third quarter of fiscal 2016 of 31.3% and the effective tax rate on income before income taxes for the first nine months of fiscal 2016 of 27.7% were lower than the statutory rate of 35.0% primarily due to differences related to the benefit of income subject to foreign tax rates that are lower than U.S. tax rates including the Singapore tax exemption, the benefit of foreign tax credits and the benefit of federal research and development tax credits including renewal of the federal research and development tax credits for fiscal 2015. These amounts are partially offset by deemed dividend inclusions under the Subpart F tax rules including an intercompany loan from Coherent Korea that will likely be repaid in fiscal 2017, stock-based compensation not deductible for tax purposes and limitations on the deductibility of compensation under IRC Section 162(m). Determining the consolidated provision for income taxes, income tax liabilities and deferred tax assets and liabilities involves judgment. We calculate and provide for income taxes in each of the tax jurisdictions in which we operate, which involves estimating current tax exposures as well as making judgments regarding the recoverability of deferred tax assets in each jurisdiction. The estimates used could differ from actual results, which may have a significant impact on operating results in future periods. We had U.S. federal deferred tax assets related to research and development credits, foreign tax credits and other tax attributes that can be used to offset federal taxable income in future periods. These credit carryforwards will expire if they are not used within certain time periods. As of July 1, 2017 , management determined that there is sufficient positive evidence to conclude that it is more likely than not sufficient taxable income will exist in the future allowing us to recognize these deferred tax assets. It is possible that some or all these attributes could ultimately expire unused. If facts and circumstances change in the future, management may determine at that time a valuation allowance is necessary. A valuation allowance would materially increase our tax expense in the period applied and would adversely affect our results of operations and statement of financial condition. Changes in our underlying facts or circumstances, such as the impact of the Rofin acquisition, will be continually assessed and we will re-evaluate its position accordingly. We are subject to taxation and file income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions. For U.S. federal income tax purposes, all years prior to 2011 are closed. We agreed to extend the statutes of limitations for our fiscal 2011 and 2012 U.S. federal tax returns to June 30, 2018 due to an ongoing Advanced Pricing Agreement (“APA”) between the U.S. and South Korea. The rollback period of this APA has been resolved favorably by the tax authorities in South Korea and the U.S. through a Mutual Agreement Procedure based on recent correspondence. In March 2016, the Internal Revenue Service (IRS) issued an audit notice and Information Documentation Requests (IDRs) for fiscal 2013. The audit is currently in progress and the statute of limitation was extended to June 30, 2018. In our major foreign jurisdictions and our major state jurisdictions, the years prior to 2011 and 2012, respectively, are closed to examination. Earlier years in our various jurisdictions may remain open for adjustment to the extent that we have tax attribute carryforwards from those years. In July 2015 and March 2016, Coherent Kaiserslautern GmbH (formerly Lumera Laser GmbH) received tax audit notices for the fiscal years 2010 to 2014. The audit began in August 2015. We acquired the shares of Lumera Laser GmbH in December 2012 and, pursuant to the terms of the acquisition agreement, we should not have responsibility for any assessments related to the pre-acquisition period. In July, 2016, Coherent Holding GmbH and Coherent Deutschland GmbH each received a tax audit notice for the fiscal years 2011 to 2014. The audit began August 2016. In November 2016, Coherent GmbH, Coherent LaserSystems GmbH & Co. KG and Coherent Germany GmbH received audit notices for the period that they were in existence during the fiscal years 2011 through 2014. The audit work began in January 2017. We regularly engage in discussions and negotiations with tax authorities regarding tax matters in various jurisdictions and management believes that it has adequately provided reserves for any adjustments that may result from tax examinations. The following table summarizes the activity related to the Company's gross unrecognized tax benefits for the nine months ended July 1, 2017 (amounts in thousands): Nine Months Ended July 1, 2017 Balance as of the beginning of the year $ 20,442 Increase related to acquisitions 26,407 Tax positions related to current year: Additions 1,678 Reductions (87 ) Tax positions related to prior year: Additions 3,018 Reductions — Settlements — Lapses in statutes of limitations — Foreign currency revaluation adjustment 1,025 Balance as of end of period $ 52,483 As of July 1, 2017 , the total amount of gross interest and penalties accrued was approximately $2.0 million , mostly due to the Rofin acquisition, and it is classified as long-term taxes payable in the consolidated balance sheet. |
Defined Benefit Plans
Defined Benefit Plans | 9 Months Ended |
Jul. 01, 2017 | |
Postemployment Benefits [Abstract] | |
Defined Benefits Plans | 15. DEFINED BENEFIT PLANS As a result of the Rofin acquisition, we have assumed all assets and liabilities of Rofin’s defined benefit plans for the Rofin-Sinar Laser, GmbH ("RSL") and Rofin-Sinar Inc. ("RS Inc.") employees. The U.S. plan began in fiscal year 1995 and is funded. Any new employees hired after January 1, 2007, are not eligible for the RS Inc. pension plan. As is the customary practice with German companies, the German pension plan is unfunded. Any new employees hired after the acquisition of Rofin-Baasel Lasertechnik in 2000 are not eligible for the RSL pension plan. The measurement date of these pension plans is September 30. Effective January 1, 2012, the RS Inc. defined benefit plan was amended to exclude highly compensated employees, as defined by the Internal Revenue Service, from receiving future years of service under the RS Inc. defined benefit plan. A non-qualified defined benefit plan was created to replace the benefits lost by the employees that were otherwise excluded from the qualified defined benefit plan. In addition, we have defined benefit plans in Coherent Korea, Coherent Japan, and Coherent Italy, covering all full-time employees with at least one year of service, and a defined benefit plan in Coherent Germany covering two individuals. As is the customary practice with European and Asian companies, the plans are unfunded. We have elected to recognize all actuarial gains and losses on these plans immediately, as incurred. The measurement date of these defined benefit plans is September 30. For financial reporting purposes, the calculation of net periodic pension costs is based upon a number of actuarial assumptions including a discount rate for plan obligations, an assumed rate of return on pension assets and an assumed rate of compensation increase for employees covered by the plan. All of these assumptions were based upon management's judgment, considering all known trends and uncertainties. Actual results that differ from these assumptions would impact future expense recognition and the cash funding requirements of our defined benefit plans. Components of net periodic cost were as follows for the three and nine months ended July 1, 2017 and July 2, 2016 : Three Months Ended Nine Months Ended July 1, July 2, July 1, July 2, Service cost $ 566 $ 134 $ 1,409 $ 425 Interest cost 279 15 729 50 Expected return on plan assets (184 ) — (490 ) — Amortization of prior service cost 19 — 50 — Amortization of prior net loss 139 — 370 — Recognized net actuarial loss 387 122 845 410 Net periodic pension cost $ 1,206 $ 271 $ 2,913 $ 885 |
Segment Information
Segment Information | 9 Months Ended |
Jul. 01, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION As a result of the acquisition of Rofin in the first quarter of fiscal 2017, we reorganized our prior two reporting segments (Specialty Laser Systems and Commercial Lasers and Components) into two new reporting segments for the combined company based upon the organizational structure of the combined company and how the chief operating decision maker ("CODM") receives and utilizes information provided to allocate resources and make decisions: OEM Laser Sources (“OLS”) and Industrial Lasers & Systems (“ILS”). Accordingly, our segment information was restated retroactively in the first quarter of fiscal 2017. This segmentation reflects the go-to-market strategies and synergies for our broad portfolio of laser technologies and products. While both segments deliver cost-effective, highly reliable photonics solutions, the OLS business segment is focused on high performance laser sources and complex optical sub-systems, typically used in microelectronics manufacturing, medical diagnostics and therapeutic medical applications, as well as in scientific research. Our ILS business segment delivers high performance laser sources, sub-systems and tools primarily used for industrial laser materials processing, serving important end markets like automotive, machine tool, consumer goods and medical device manufacturing. Rofin's operating results have been included primarily in our Industrial Lasers & Systems segment. We have identified OLS and ILS as operating segments for which discrete financial information is available. Both units have dedicated engineering, manufacturing, product business management and product line management functions. A small portion of our outside revenue is attributable to projects and recently developed products for which a segment has not yet been determined. The associated direct and indirect costs are presented in the category of Corporate and other, along with other corporate costs as described below. Our Chief Executive Officer has been identified as the CODM as he assesses the performance of the segments and decides how to allocate resources to the segments. Income from operations is the measure of profit and loss that our CODM uses to assess performance and make decisions. As assets are not a measure used to assess the performance of the company by the CODM, asset information is not tracked or compiled by segment and is not available to be reported in our disclosures. Income from operations represents the net sales less the cost of sales and direct operating expenses incurred within the operating segments as well as allocated expenses such as shared sales and manufacturing costs. We do not allocate to our operating segments certain operating expenses which we manage separately at the corporate level. These unallocated costs include stock-based compensation and corporate functions (certain research and development, management, finance, legal and human resources) and are included in the results below under Corporate and other in the reconciliation of operating results. Management does not consider unallocated Corporate and other costs in its measurement of segment performance. The following table provides net sales and income from continuing operations for our operating segments and a reconciliation of our total income from continuing operations to income from continuing operations before income taxes (in thousands): Three Months Ended Nine Months Ended July 1, July 2, July 1, July 2, Net sales: OEM Laser Sources $ 309,925 $ 183,544 $ 825,805 $ 509,416 Industrial Lasers & Systems 154,182 35,223 407,208 99,508 Total net sales $ 464,107 $ 218,767 $ 1,233,013 $ 608,924 Income (loss) from continuing operations: OEM Laser Sources $ 120,586 $ 47,989 $ 307,046 $ 131,652 Industrial Lasers & Systems (1,493 ) 1,825 (4,459 ) (29,571 ) (11,293 ) Corporate and other (18,516 ) (17,242 ) (63,609 ) (40,784 ) Total income from continuing operations 100,577 26,288 213,866 79,575 Total other income (expense), net (7,942 ) 852 (13,025 ) (1,150 ) Income from continuing operations before income taxes $ 92,635 $ 27,140 $ 200,841 $ 78,425 Major Customers We had one customer during the three and nine months ended July 1, 2017 that accounted for 28.2% and 25.3% , respectively, of net sales. The same customer accounted for 11.3% and 10.6% of net sales for the three and nine months ended July 2, 2016 , respectively. We had another customer during the three and nine months ended July 2, 2016 that accounted for 15.8% and 16.8% , respectively, of net sales. The customers purchased primarily from our OLS segment. We had one customer that accounted for 21.6% and 18.0% of accounts receivable at July 1, 2017 and October 1, 2016 , respectively. We had another customer that accounted for 18.7% of accounts receivable at October 1, 2016 . The customers purchased primarily from our OLS segment. |
Restructuring charges
Restructuring charges | 9 Months Ended |
Jul. 01, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring charges | 17. RESTRUCTURING CHARGES In the first quarter of fiscal 2017, we began the implementation of planned restructuring activities in connection with the acquisition of Rofin. These activities primarily relate to the exit from our high power fiber laser product line, change of control payments to Rofin officers, re-grouping of our production lines due to segment reorganization and consolidation of sales and distribution offices, resulting in charges primarily for employee termination, early lease termination and other exit related costs associated with the write-off of property and equipment and inventory. The following table presents our current liability as accrued on our balance sheets for restructuring charges. The table sets forth an analysis of the components of the restructuring charges and payments and other deductions made against the accrual for the first nine months of fiscal 2017 (in thousands): Severance Related Asset Write Offs Other Total Balances, October 1, 2016 $ — $ — — $ — Provision 2,703 4,359 — 7,062 Payments and other (344 ) (4,359 ) — (4,703 ) Balances, December 31, 2016 2,359 — — 2,359 Provision 319 (45 ) 283 557 Payments and other (892 ) 45 (104 ) (951 ) Balances, April 1, 2017 1,786 — 179 1,965 Provision 1,115 82 303 1,500 Payments and other (1,793 ) (82 ) (130 ) (2,005 ) Balances, July 1, 2017 $ 1,108 $ — $ 352 $ 1,460 The current year severance related costs are primarily comprised of severance pay for employees being terminated due to the transition of activities out of Rofin and the consolidation of sales and distribution offices. At July 1, 2017 , $1.5 million of accrued restructuring costs were included in other current liabilities. By segment, $1.5 million and $8.6 million of restructuring costs were incurred in the ILS segment and $0.0 million and $0.5 million were incurred in the OLS segment in the three and nine months ended July 1, 2017 , respectively. Restructuring charges are recorded in cost of sales, research and development and selling, general and administrative expenses in our condensed consolidated statements of operations. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Jul. 01, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | DISCONTINUED OPERATIONS Discontinued Operations and Assets Held for Sale Discontinued operations are comprised of Rofin’s low power CO2 laser business based in Hull, United Kingdom (the "Hull Business"), that we acquired as part of our acquisition of Rofin. As a condition of the acquisition, we are required to divest ourselves of the Hull Business and will report this business separately as a discontinued operation until it is divested. In the third quarter of fiscal 2017, we entered into an agreement with a potential purchaser of the Hull Business and submitted our proposed purchaser to the European Commission for its review and approval, including the terms under which the purchase and operation of the Hull Business will occur. The European Commission has not yet determined whether it will approve or decline our proposed purchaser and the terms of such divestiture. For financial statement purposes, the results of operations for this discontinued business have been segregated from those of the continuing operations and are presented in our condensed consolidated financial statements as discontinued operations and the net assets of the remaining discontinued business have been presented as current assets and current liabilities held for sale. The results of discontinued operations for the three and nine months ended July 1, 2017 are as follows (in thousands): Three Months Ended Nine Months Ended July 1, July 1, Net sales $ 7,920 $ 20,296 Cost of sales 5,349 14,337 Operating expenses 2,771 6,924 Impairment loss 1,249 1,249 Other expense 5 173 Income tax expense 300 — Net loss from discontinued operations $ (1,754 ) $ (2,387 ) In the third quarter of fiscal 2017, we re-evaluated the carrying value of the Hull Business that has been presented as assets held for sale since the acquisition. Approximately $33.9 million of goodwill was reallocated from the assets held for sale to the remaining business acquired as we are within the remeasurement period. In addition, we recorded a $1.2 million impairment charge on the remaining net assets to write them down to reflect our best estimate of fair value less costs to sell using all information available at that time and included the net loss in discontinued operations. Current assets and current liabilities classified as held for sale as of July 1, 2017 related to discontinued operations are as follows (in thousands): Accounts receivable $ 6,936 Inventories 4,991 Prepaid expenses and other assets 383 Property and equipment 10,475 Intangible assets 9,771 Total current assets held for sale $ 32,556 Accounts payable $ 1,973 Other current liabilities 5,583 Total current liabilities held for sale $ 7,556 |
Recent Accounting Standards (Po
Recent Accounting Standards (Policies) | 9 Months Ended |
Jul. 01, 2017 | |
Accounting Policies [Abstract] | |
Recent Accounting Standards | Adoption of New Accounting Pronouncement In November 2016, the FASB issued amended guidance that require a statement of cash flows to explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new standard will become effective for our fiscal year beginning September 30, 2018. We elected to early adopt the standard in the first quarter of fiscal 2017 on a retrospective basis with no impact on our condensed consolidated financial statements and disclosures. In April 2015, the FASB issued amended guidance that simplifies the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amended guidance. The new standard became effective for our fiscal year beginning October 2, 2016. We elected to early adopt the standard in the second quarter of fiscal 2016 and had recorded debt issuance costs of $5.2 million in other assets as of October 1, 2016 for the debt commitment we entered into in the second quarter of fiscal 2016 because the debt was not outstanding as of October 1, 2016. The debt issuance costs related to the term loan facility were reclassified to debt in the first quarter of fiscal 2017 when we drew down the debt. Recently Issued Accounting Pronouncements In May 2017, the FASB issued amended guidance about which changes to the terms or conditions of a share-based payment require an entity to apply modification accounting. Under the new guidance, an entity should account for the effects of a modification unless, comparing to the original award prior to modification, the fair value, the vesting conditions and the classification as equity or as a liability of the modified award are all the same. The amendments in this update should be applied prospectively to an award modified on or after the adoption date. The new standard will become effective for our fiscal year beginning September 30, 2018. We are currently assessing the impact of this amended guidance. In January 2017, the FASB issued amended guidance that simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the existing guidance, when computing the implied fair value of goodwill under Step 2, an entity is required to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Under the amendments in this update, an entity should simply perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. The new standard will become effective for our fiscal year beginning October 2, 2021. We plan to elect early adoption of the standard in the fourth quarter of fiscal 2017. In October 2016, the FASB issued amended guidance that improves the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Under the new guidance, an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The new standard will become effective for our fiscal year beginning September 30, 2018. We are currently assessing the impact of this amended guidance and the timing of adoption. In March 2016, the FASB issued amended guidance that simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. Under the new guidance, an entity recognizes all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement. This change eliminates the notion of the APIC pool and significantly reduces the complexity and cost of accounting for excess tax benefits and tax deficiencies. The new standard will become effective for our fiscal year beginning October 1, 2017. Upon adoption in the first quarter of fiscal 2018, we expect to recognize a windfall tax benefit as a cumulative effect adjustment increase to our opening retained earnings of approximately $22 million to $25 million together with a comparable increase in deferred tax assets. In May 2014, the FASB amended the Accounting Standards Codification and created a new Topic 606, "Revenue from Contracts with Customers". In May 2016, accounting guidance was issued to clarify the not yet effective revenue recognition guidance issued in May 2014. This additional guidance does not change the core principle of the revenue recognition guidance issued in May 2014, rather, it provides clarification of accounting for collections of sales taxes as well as recognition of revenue (i) associated with contract modifications, (ii) for noncash consideration, and (iii) based on the collectability of the consideration from the customer. The guidance also specifies when a contract should be considered “completed” for purposes of applying the transition guidance. The effective date and transition requirements for this guidance are the same as the effective date and transition requirements for the guidance previously issued in 2014, which is effective for our fiscal year 2019, which begins September 30, 2018. We are currently evaluating the new guidance and do not expect the guidance to have a material impact on our financial statements. We have not decided upon the method of adoption. |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Jul. 01, 2017 | |
Business Acquisition [Line Items] | |
Business Acquisition, Pro Forma Information | The following unaudited pro forma financial information presents our combined results of operations as if the acquisition of Rofin and the related issuance of our Euro Term Loan had occurred on October 4, 2015. The unaudited pro forma financial information is not necessarily indicative of what our condensed consolidated results of operations actually would have been had the acquisition been completed on October 4, 2015. In addition, the unaudited pro forma financial information does not attempt to project the future results of operations of the combined company. The actual results may differ significantly from the pro forma results presented here due to many factors. Three Months Ended Nine Months Ended July 1, July 2, July 1, July 2, Total net sales $ 472,027 $ 344,707 $ 1,294,841 $ 954,044 Net income (loss) $ 64,558 $ 17,465 $ 159,260 $ (21,093 ) Net income (loss) per share: Basic $ 2.63 $ 0.72 $ 6.51 $ (0.87 ) Diluted $ 2.60 $ 0.71 $ 6.44 $ (0.87 ) |
Rofin-Sinar | |
Business Acquisition [Line Items] | |
Business Combination, Consideration Transferred | The total purchase consideration allocated to net assets acquired was approximately $936.3 million and consisted of the following (in thousands): Cash consideration to Rofin's shareholders $ 904,491 Cash settlement paid for Rofin employee stock options 15,290 Total cash payments to Rofin shareholders and option holders 919,781 Add: fair value of previously owned Rofin shares 20,685 Less: post-merger stock compensation expense (4,152 ) Total purchase price to allocate $ 936,314 |
Schedule of Business Acquisitions, by Acquisition | Our preliminary allocation of the purchase price is as follows (in thousands): Cash, cash equivalents and short-term investments $ 163,425 Accounts receivable 90,877 Inventory 189,869 Prepaid expenses and other assets 16,111 Assets held-for-sale, current 29,545 Property and equipment 126,507 Other assets 31,464 Intangible assets: Existing technology 169,029 In-process research and development 6,000 Backlog 5,600 Customer relationships 39,209 Trademarks 5,699 Patents 300 Goodwill 298,539 Current portion of long-term obligations (3,633 ) Current liabilities held for sale (7,001 ) Accounts payable (21,603 ) Other current liabilities (67,452 ) Long-term debt (11,641 ) Other long-term liabilities (124,530 ) Total $ 936,314 |
Fair Values (Tables)
Fair Values (Tables) | 9 Months Ended |
Jul. 01, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities measured at fair value | Financial assets and liabilities measured at fair value as of July 1, 2017 and October 1, 2016 are summarized below (in thousands): Aggregate Fair Value Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Aggregate Fair Value Quoted Prices Significant Other Observable Inputs July 1, 2017 October 1, 2016 (Level 1) (Level 2) (Level 1) (Level 2) Assets: Cash equivalents: Money market fund deposits $ 83,117 $ 83,117 $ — $ 237,142 $ 237,142 $ — Short-term investments: U.S. Treasury and agency obligations (2) 120 — 120 125 — 125 Commercial paper (2) — — — 24,999 — 24,999 Equity securities (1) — — — 20,482 20,482 — Prepaid and other assets: Foreign currency contracts (3) 2,531 — 2,531 889 — 889 Mutual funds — Deferred comp and supplemental plan (4) 17,727 17,727 — 14,399 14,399 — Total $ 103,495 $ 100,844 $ 2,651 $ 298,036 $ 272,023 $ 26,013 Liabilities: Other current liabilities: Foreign currency contracts (3) (191 ) — (191 ) (3,100 ) — (3,100 ) Total $ 103,304 $ 100,844 $ 2,460 $ 294,936 $ 272,023 $ 22,913 ___________________________________________________ (1) Valuations are based upon quoted market prices. (2) Valuations are based upon quoted market prices in active markets involving similar assets. The market inputs used to value these instruments generally consist of market yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. Pricing sources include industry standard data providers, security master files from large financial institutions, and other third party sources which are input into a distribution-curve-based algorithm to determine a daily market value. This creates a “consensus price” or a weighted average price for each security. (3) The principal market in which we execute our foreign currency contracts is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants usually are large commercial banks. Our foreign currency contracts’ valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. See Note 6, "Derivative Instruments and Hedging Activities". (4) The fair value of mutual funds is determined based on quoted market prices. Securities traded on a national exchange are stated at the last reported sales price on the day of valuation; other securities traded in over-the-counter markets and listed securities for which no sale was reported on that date are stated as the last quoted bid price. |
Short-Term Investments (Tables)
Short-Term Investments (Tables) | 9 Months Ended |
Jul. 01, 2017 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
Schedule of cash, cash equivalents and short-term investments | SHORT-TERM INVESTMENTS We consider all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. Investments classified as available-for-sale are reported at fair value with unrealized gains and losses, net of related income taxes, recorded as a separate component of other comprehensive income (“OCI”) in stockholders’ equity until realized. Interest and amortization of premiums and discounts for debt securities are included in interest income. Gains and losses on securities sold are determined based on the specific identification method and are included in other income (expense). Cash, cash equivalents and short-term investments consist of the following (in thousands): July 1, 2017 Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash and cash equivalents $ 472,307 $ — $ — $ 472,307 Short-term investments: Available-for-sale securities: U.S. Treasury and agency obligations $ 120 $ — $ — $ 120 Total short-term investments $ 120 $ — $ — $ 120 October 1, 2016 Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash and cash equivalents $ 354,347 $ — $ — $ 354,347 Short-term investments: Available-for-sale securities: Commercial paper $ 24,999 $ — $ — $ 24,999 U.S. Treasury and agency obligations 125 — — 125 Equity Securities 15,269 5,213 — 20,482 Total short-term investments $ 40,393 $ 5,213 $ — $ 45,606 None of the unrealized losses as of July 1, 2017 or October 1, 2016 were considered to be other-than-temporary impairments. The amortized cost and estimated fair value of available-for-sale investments in debt securities as of July 1, 2017 and October 1, 2016 classified as short-term investments on our condensed consolidated balance sheet were as follows (in thousands): July 1, 2017 October 1, 2016 Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Investments in available-for-sale debt securities due in less than one year $ 120 $ 120 $ 25,124 $ 25,124 During the three and nine months ended July 1, 2017 , we received proceeds totaling $0.0 million and $0.1 million , respectively from the sale of available-for-sale securities and realized no gross gains or losses. During the three and nine months ended July 2, 2016 , we received proceeds totaling $15.5 million and $44.1 million , respectively, from the sale of available-for-sale securities and realized gross gains of less than $0.1 million and $0.1 million , respectively. |
Schedule of amortized cost and estimated fair value of available-for-sale investments in debt securities | The amortized cost and estimated fair value of available-for-sale investments in debt securities as of July 1, 2017 and October 1, 2016 classified as short-term investments on our condensed consolidated balance sheet were as follows (in thousands): July 1, 2017 October 1, 2016 Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Investments in available-for-sale debt securities due in less than one year $ 120 $ 120 $ 25,124 $ 25,124 During the three and nine months ended July 1, 2017 , we received proceeds totaling $0.0 million and $0.1 million , respectively from the sale of available-for-sale securities and realized no gross gains or losses. During the three and nine months ended July 2, 2016 , we received proceeds totaling $15.5 million and $44.1 million , respectively, from the sale of available-for-sale securities and realized gross gains of less than $0.1 million and $0.1 million , respectively. |
Derivative Instruments and He29
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Jul. 01, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | The outstanding notional contract and fair value asset (liability) amounts of non-designated hedge contracts, with maximum maturity of four months, are as follows (in thousands): U.S. Notional Contract Value U.S. Fair Value July 1, 2017 October 1, 2016 July 1, 2017 October 1, 2016 Euro currency hedge contracts Purchase $ 89,850 $ 91,108 $ 1,606 $ 162 Sell $ — $ (750,454 ) $ — $ (2,234 ) Japanese Yen currency hedge contracts Purchase $ — $ — $ — $ — Sell $ (25,329 ) $ (36,450 ) $ 343 $ (343 ) South Korean Won currency hedge contracts Purchase $ — $ 31,248 $ 550 $ 413 Sell $ (24,675 ) $ (37,929 ) $ — $ (152 ) Chinese RMB currency hedge contracts Purchase $ — $ — $ — $ — Sell $ (16,193 ) $ (25,237 ) $ (185 ) $ (91 ) Other foreign currency hedge contracts Purchase $ 7,629 $ 6,033 $ 32 $ (4 ) Sell $ (1,786 ) $ (1,775 ) $ (6 ) $ 38 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Jul. 01, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in carrying amount of goodwill by segment | The changes in the carrying amount of goodwill by segment for the period from October 1, 2016 to July 1, 2017 are as follows (in thousands): OEM Laser Sources Industrial Lasers & Systems Total Balance as of October 1, 2016 $ 97,015 $ 4,443 $ 101,458 Additions (see Note 3) 1,644 296,895 298,539 Translation adjustments and other 1,116 9,304 10,420 Balance as of July 1, 2017 $ 99,775 $ 310,642 $ 410,417 |
Schedule of components of amortizable intangible assets | Components of our amortizable intangible assets are as follows (in thousands): July 1, 2017 October 1, 2016 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Existing technology $ 205,124 $ (52,346 ) $ 152,778 $ 70,664 $ (61,133 ) $ 9,531 Patents 313 (41 ) 272 — — — Customer relationships 50,300 (11,596 ) 38,704 15,968 (11,658 ) 4,310 Trade Name 6,001 (1,306 ) 4,695 384 (351 ) 33 In-process research & development 6,241 — 6,241 — — — Total $ 267,979 $ (65,289 ) $ 202,690 $ 87,016 $ (73,142 ) $ 13,874 |
Schedule of estimated amortization expense | At July 1, 2017 , estimated amortization expense for the remainder of fiscal 2017 , the next five succeeding fiscal years and all fiscal years thereafter are as follows (in thousands): Estimated Amortization Expense 2017 (remainder) $ 15,056 2018 56,057 2019 52,760 2020 45,574 2021 13,769 2022 3,505 Thereafter 9,728 Total (excluding IPR&D) $ 196,449 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 9 Months Ended |
Jul. 01, 2017 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of inventories | Inventories consist of the following (in thousands): July 1, October 1, Purchased parts and assemblies $ 114,616 $ 56,824 Work-in-process 142,876 88,391 Finished goods 145,357 67,683 Total inventories $ 402,849 $ 212,898 |
Schedule of prepaid expenses and other assets | Prepaid expenses and other assets consist of the following (in thousands): July 1, October 1, Prepaid and refundable income taxes $ 32,944 $ 12,415 Other taxes receivable 14,850 10,538 Prepaid expenses and other assets 27,033 14,120 Total prepaid expenses and other assets $ 74,827 $ 37,073 |
Schedule of other assets | Other assets consist of the following (in thousands): July 1, October 1, Assets related to deferred compensation arrangements $ 31,167 $ 26,356 Deferred tax assets 78,515 67,157 Other assets 12,922 9,221 Total other assets $ 122,604 $ 102,734 |
Schedule of Other Current Liabilities | Other current liabilities consist of the following (in thousands): July 1, October 1, Accrued payroll and benefits $ 57,076 $ 47,506 Deferred revenue 78,642 33,034 Warranty reserve 33,983 15,949 Accrued expenses and other 32,540 18,356 Current liabilities held for sale 7,556 — Customer deposits 19,845 1,597 Total other current liabilities $ 229,642 $ 116,442 |
Schedule of components of reserve for warranty costs | Components of the reserve for warranty costs during the first nine months of fiscal 2017 and 2016 were as follows (in thousands): Nine Months Ended July 1, July 2, Beginning balance $ 15,949 $ 15,308 Additions related to current period sales 27,854 15,298 Warranty costs incurred in the current period (23,422 ) (15,059 ) Accruals resulting from acquisitions 14,314 — Adjustments to accruals related to foreign exchange and other (712 ) (396 ) Ending balance $ 33,983 $ 15,151 |
Schedule of Other Long-term liabilities | Other long-term liabilities consist of the following (in thousands): July 1, October 1, Long-term taxes payable $ 35,295 $ 2,951 Deferred compensation 33,288 28,313 Deferred tax liabilities 55,629 1,468 Deferred revenue 4,544 4,069 Asset retirement obligations liability 5,227 2,796 Defined benefit plan liabilities 42,214 8,123 Other long-term liabilities 2,181 1,106 Total other long-term liabilities $ 178,378 $ 48,826 |
Borrowings Short-term borrowing
Borrowings Short-term borrowings (Tables) | 9 Months Ended |
Jul. 01, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term Debt | Short-term borrowings and current portion of long-term obligations consist of the following (in thousands): July 1, October 1, Current portion of Euro Term Loan (1) $ 3,464 $ — 1.3% Term loan due 2024 1,428 — 1.0% State of Connecticut term loan due 2023 370 — Line of credit borrowings 223 20,000 Total short-term borrowings and current portion of long-term obligations $ 5,485 $ 20,000 (1) Net of debt issuance costs of $4.2 million . |
Long-term Debt | Long-term obligations consist of the following (in thousands): July 1, October 1, Euro Term Loan due 2024 (1) $ 641,905 $ — 1.3% Term loan due 2024 8,922 — 1.0% State of Connecticut term loan due 2023 1,873 — Total long-term obligations $ 652,700 $ — (1) Net of debt issuance costs of $24.2 million . |
Schedule of Maturities of Long-term Debt | Contractual maturities of our debt obligations as of July 1, 2017 are as follows (in thousands): Amount 2017 (remainder) $ 2,362 2018 9,450 2019 9,450 2020 9,450 2021 9,450 2022 9,450 Thereafter 636,732 Total $ 686,344 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Jul. 01, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of weighted-average assumptions used to estimate fair value of stock options granted and shares purchased | The fair values of shares purchased under the Employee Stock Purchase Plan (“ESPP”) for the three and nine months ended July 1, 2017 and July 2, 2016 , respectively, were estimated using the following weighted-average assumptions: Employee Stock Purchase Plan Three Months Ended Nine Months Ended July 1, July 2, July 1, July 2, Expected life in years 0.5 0.5 0.5 0.5 Expected volatility 34.5 % 38.5 % 30.8 % 31.6 % Risk-free interest rate 0.85 % 0.37 % 0.62 % 0.28 % Expected dividend yield — % — % — % — % Weighted average fair value per share $ 47.36 $ 21.35 $ 32.30 $ 16.08 |
Schedule of weighted average assumptions of performance units | The weighted average fair value for these performance units was determined using a Monte Carlo simulation model incorporating the following weighted average assumptions: Nine Months Ended July 1, 2017 July 2, 2016 Risk-free interest rate 1.3 % 1.2 % Volatility 31.0 % 27.0 % Weighted average fair value $163.17 $74.48 |
Schedule of stock-based compensation expense | The following table shows total stock-based compensation expense and related tax benefits included in the condensed consolidated statements of operations for the three and nine months ended July 1, 2017 and July 2, 2016 (in thousands): Three Months Ended Nine Months Ended July 1, July 2, July 1, July 2, Cost of sales $ 880 $ 677 $ 2,618 $ 1,876 Research and development 639 610 2,289 1,646 Selling, general and administrative 5,373 4,402 18,323 11,299 Income tax benefit (1,851 ) (1,588 ) (5,155 ) (3,450 ) $ 5,041 $ 4,101 $ 18,075 $ 11,371 |
Schedule of restricted stock award and restricted stock unit activity | The following table summarizes the activity of our time-based and performance restricted stock units for the first nine months of fiscal 2017 (in thousands, except per share amounts): Time Based Restricted Stock Units Performance Restricted Stock Units Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Nonvested stock at October 1, 2016 459 $ 66.47 169 $ 74.10 Granted 186 131.54 115 163.17 Vested (1) (228 ) 66.03 (104 ) 77.10 Forfeited (13 ) 76.62 (4 ) 70.57 Nonvested stock at July 1, 2017 404 $ 118.60 176 $ 105.34 __________________________________________ (1) Time-based restricted stock units vested during the fiscal year. Performance-based restricted stock units included at 100% of target goal; under the terms of the awards, the recipient may earn between 0% and 200% of the award. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Jul. 01, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of information necessary to calculate basic and diluted earnings (loss) per share | The following table presents information necessary to calculate basic and diluted earnings per share (in thousands, except per share data): Three Months Ended Nine Months Ended July 1, July 2, July 1, July 2, Weighted average shares outstanding —basic 24,537 24,192 24,460 24,108 Dilutive effect of employee stock awards 286 275 281 247 Weighted average shares outstanding—diluted 24,823 24,467 24,741 24,355 Net income from continuing operations $ 62,871 $ 18,650 135,757 $ 56,717 Loss from discontinued operations, net of income taxes (1,754 ) — (2,387 ) — Net income $ 61,117 $ 18,650 $ 133,370 $ 56,717 |
Other Income (Expense) (Tables)
Other Income (Expense) (Tables) | 9 Months Ended |
Jul. 01, 2017 | |
Other Income and Expenses [Abstract] | |
Schedule of other nonoperating income (expense) | Other income (expense) is as follows (in thousands): Three Months Ended Nine Months Ended July 1, July 2, July 1, July 2, Foreign exchange gain (loss) $ (2,439 ) $ (1,261 ) $ 7,928 $ (2,781 ) Gain on deferred compensation investments, net 1,136 1,796 2,831 795 Other 573 29 112 90 Other - net $ (730 ) $ 564 $ 10,871 $ (1,896 ) |
Income Taxes Schedule of gross
Income Taxes Schedule of gross unrecognized tax benefits activities (Tables) | 9 Months Ended |
Jul. 01, 2017 | |
Income Tax Disclosure [Abstract] | |
Summary of Positions for which Significant Change in Unrecognized Tax Benefits | The following table summarizes the activity related to the Company's gross unrecognized tax benefits for the nine months ended July 1, 2017 (amounts in thousands): Nine Months Ended July 1, 2017 Balance as of the beginning of the year $ 20,442 Increase related to acquisitions 26,407 Tax positions related to current year: Additions 1,678 Reductions (87 ) Tax positions related to prior year: Additions 3,018 Reductions — Settlements — Lapses in statutes of limitations — Foreign currency revaluation adjustment 1,025 Balance as of end of period $ 52,483 |
Defined Benefit Plans (Tables)
Defined Benefit Plans (Tables) | 9 Months Ended |
Jul. 01, 2017 | |
Postemployment Benefits [Abstract] | |
Schedule of Defined Benefit Plans Disclosures | Components of net periodic cost were as follows for the three and nine months ended July 1, 2017 and July 2, 2016 : Three Months Ended Nine Months Ended July 1, July 2, July 1, July 2, Service cost $ 566 $ 134 $ 1,409 $ 425 Interest cost 279 15 729 50 Expected return on plan assets (184 ) — (490 ) — Amortization of prior service cost 19 — 50 — Amortization of prior net loss 139 — 370 — Recognized net actuarial loss 387 122 845 410 Net periodic pension cost $ 1,206 $ 271 $ 2,913 $ 885 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Jul. 01, 2017 | |
Segment Reporting [Abstract] | |
Schedule of sales and income (loss) from operations | The following table provides net sales and income from continuing operations for our operating segments and a reconciliation of our total income from continuing operations to income from continuing operations before income taxes (in thousands): Three Months Ended Nine Months Ended July 1, July 2, July 1, July 2, Net sales: OEM Laser Sources $ 309,925 $ 183,544 $ 825,805 $ 509,416 Industrial Lasers & Systems 154,182 35,223 407,208 99,508 Total net sales $ 464,107 $ 218,767 $ 1,233,013 $ 608,924 Income (loss) from continuing operations: OEM Laser Sources $ 120,586 $ 47,989 $ 307,046 $ 131,652 Industrial Lasers & Systems (1,493 ) 1,825 (4,459 ) (29,571 ) (11,293 ) Corporate and other (18,516 ) (17,242 ) (63,609 ) (40,784 ) Total income from continuing operations 100,577 26,288 213,866 79,575 Total other income (expense), net (7,942 ) 852 (13,025 ) (1,150 ) Income from continuing operations before income taxes $ 92,635 $ 27,140 $ 200,841 $ 78,425 |
Restructuring charges (Tables)
Restructuring charges (Tables) | 9 Months Ended |
Jul. 01, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The table sets forth an analysis of the components of the restructuring charges and payments and other deductions made against the accrual for the first nine months of fiscal 2017 (in thousands): Severance Related Asset Write Offs Other Total Balances, October 1, 2016 $ — $ — — $ — Provision 2,703 4,359 — 7,062 Payments and other (344 ) (4,359 ) — (4,703 ) Balances, December 31, 2016 2,359 — — 2,359 Provision 319 (45 ) 283 557 Payments and other (892 ) 45 (104 ) (951 ) Balances, April 1, 2017 1,786 — 179 1,965 Provision 1,115 82 303 1,500 Payments and other (1,793 ) (82 ) (130 ) (2,005 ) Balances, July 1, 2017 $ 1,108 $ — $ 352 $ 1,460 |
Discontinued Operations Results
Discontinued Operations Results of operations from discontinued operations (Tables) | 9 Months Ended |
Jul. 01, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operation Income / Loss, Net | The results of discontinued operations for the three and nine months ended July 1, 2017 are as follows (in thousands): Three Months Ended Nine Months Ended July 1, July 1, Net sales $ 7,920 $ 20,296 Cost of sales 5,349 14,337 Operating expenses 2,771 6,924 Impairment loss 1,249 1,249 Other expense 5 173 Income tax expense 300 — Net loss from discontinued operations $ (1,754 ) $ (2,387 ) |
Disposal Groups, Including Discontinued Operations | Current assets and current liabilities classified as held for sale as of July 1, 2017 related to discontinued operations are as follows (in thousands): Accounts receivable $ 6,936 Inventories 4,991 Prepaid expenses and other assets 383 Property and equipment 10,475 Intangible assets 9,771 Total current assets held for sale $ 32,556 Accounts payable $ 1,973 Other current liabilities 5,583 Total current liabilities held for sale $ 7,556 |
Basis of Presentation segment i
Basis of Presentation segment info (Details) | 9 Months Ended |
Jul. 01, 2017segments | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of Operating Segments | 2 |
Recent Accounting Standards Acc
Recent Accounting Standards Accounting impact (Details) $ in Millions | 3 Months Ended |
Apr. 02, 2016USD ($) | |
Accounting Policies [Abstract] | |
Debt issuance cost | $ 5.2 |
Business Combinations Rofin acq
Business Combinations Rofin acquisition (Details) - Rofin-Sinar - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Dec. 31, 2016 | Jul. 01, 2017 | |
Business Acquisition [Line Items] | ||
Cash consideration to Rofin's shareholders | $ 904,491 | |
payment due to cancellation of options held by Rofin employees | 15,290 | |
Payments to Acquire Businesses, Gross | 919,781 | |
Fair value of previously owned Rofin shares | 20,685 | |
Post-merger stock based compensation expense for cancelled options held by Rofin employees | $ (4,152) | |
Total purchase price to allocate | $ 936,314 |
Business Combinations - Rofin A
Business Combinations - Rofin Acquisition Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Jul. 01, 2017 | Dec. 31, 2016 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | Nov. 07, 2016 | |
Business Acquisition [Line Items] | ||||||
Acquisition price per share of Rofin | $ 32.50 | |||||
Gain from business combination | $ 0 | $ 0 | $ (5,416) | $ 0 | ||
Rofin-Sinar | ||||||
Business Acquisition [Line Items] | ||||||
Acquired finished goods and work in process amortization period | 6 months | |||||
payment due to cancellation of options held by Rofin employees | $ 15,290 | |||||
Total estimated merger consideration for canceled of options held by Rofin employees | 11,100 | |||||
Post merger stock compensation expense | 4,152 | |||||
Gain from business combination | (5,400) | |||||
Business Combination, Acquisition Related Costs | 400 | 17,600 | ||||
Revenues | 116,500 | 301,600 | ||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | (6,500) | (36,400) | ||||
Goodwill reallocated from AFS to remaining business during remeasurement period | 33,900 | |||||
Inventory | Rofin-Sinar | ||||||
Business Acquisition [Line Items] | ||||||
Assets, Fair Value Adjustment | 26,800 | |||||
incremental cost of sales recorded from inventory fair value adjustment | $ 4,400 | $ 26,400 | ||||
Property and equipment | Rofin-Sinar | ||||||
Business Acquisition [Line Items] | ||||||
Assets, Fair Value Adjustment | $ 36,800 | |||||
Backlog | Rofin-Sinar | ||||||
Business Acquisition [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 6 months | |||||
Trademarks | Rofin-Sinar | ||||||
Business Acquisition [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 3 years | |||||
Patents | Rofin-Sinar | ||||||
Business Acquisition [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 5 years | |||||
Minimum | Existing technology | Rofin-Sinar | ||||||
Business Acquisition [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 3 years | |||||
Minimum | Customer relationships | Rofin-Sinar | ||||||
Business Acquisition [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 5 years | |||||
Maximum | Existing technology | Rofin-Sinar | ||||||
Business Acquisition [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 5 years | |||||
Maximum | Customer relationships | Rofin-Sinar | ||||||
Business Acquisition [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 10 years |
Business Combinations - Schedul
Business Combinations - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2016 | Apr. 02, 2016 | |
Business Acquisition [Line Items] | ||
Goodwill from acquisition of Rofin | $ 298,539 | |
Rofin-Sinar | ||
Business Acquisition [Line Items] | ||
Total purchase price to allocate | $ 936,314 | |
Cash, cash equivalents and short-term investments | Rofin-Sinar | ||
Business Acquisition [Line Items] | ||
Current assets acquired | 163,425 | |
Accounts receivable | Rofin-Sinar | ||
Business Acquisition [Line Items] | ||
Current assets acquired | 90,877 | |
Inventory | Rofin-Sinar | ||
Business Acquisition [Line Items] | ||
Current assets acquired | 189,869 | |
Prepaid expenses and other assets | Rofin-Sinar | ||
Business Acquisition [Line Items] | ||
Current assets acquired | 16,111 | |
Assets held-for-sale, current | Rofin-Sinar | ||
Business Acquisition [Line Items] | ||
Current assets acquired | 29,545 | |
Property and equipment | Rofin-Sinar | ||
Business Acquisition [Line Items] | ||
Non current assets acquired | 126,507 | |
Other assets | Rofin-Sinar | ||
Business Acquisition [Line Items] | ||
Non current assets acquired | 31,464 | |
Existing technology | Rofin-Sinar | ||
Business Acquisition [Line Items] | ||
Intangible assets: | 169,029 | |
In-process research and development | Rofin-Sinar | ||
Business Acquisition [Line Items] | ||
Intangible assets: | 6,000 | |
Backlog | Rofin-Sinar | ||
Business Acquisition [Line Items] | ||
Intangible assets: | 5,600 | |
Customer relationships | Rofin-Sinar | ||
Business Acquisition [Line Items] | ||
Intangible assets: | 39,209 | |
Trademarks | Rofin-Sinar | ||
Business Acquisition [Line Items] | ||
Intangible assets: | 5,699 | |
Patents | Rofin-Sinar | ||
Business Acquisition [Line Items] | ||
Intangible assets: | 300 | |
Current portion of long-term obligations | Rofin-Sinar | ||
Business Acquisition [Line Items] | ||
Liabilities acquired | (3,633) | |
Current liabilities held for sale | Rofin-Sinar | ||
Business Acquisition [Line Items] | ||
Liabilities acquired | (7,001) | |
Accounts payable | Rofin-Sinar | ||
Business Acquisition [Line Items] | ||
Liabilities acquired | (21,603) | |
Other current liabilities: | Rofin-Sinar | ||
Business Acquisition [Line Items] | ||
Liabilities acquired | (67,452) | |
Long-term debt | Rofin-Sinar | ||
Business Acquisition [Line Items] | ||
Liabilities acquired | (11,641) | |
Other long-term liabilities | Rofin-Sinar | ||
Business Acquisition [Line Items] | ||
Liabilities acquired | $ (124,530) |
Business Combinations - Busines
Business Combinations - Business pro forma information (Details) - Rofin-Sinar - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Business Acquisition [Line Items] | ||||
Total net sales | $ 472,027 | $ 344,707 | $ 1,294,841 | $ 954,044 |
Net income (loss) | $ 64,558 | $ 17,465 | $ 159,260 | $ (21,093) |
Business Acquisition, Pro Forma Earnings Per Share, Basic | $ 2.63 | $ 0.72 | $ 6.51 | $ (0.87) |
Business Acquisition, Pro Forma Earnings Per Share, Diluted | $ 2.60 | $ 0.71 | $ 6.44 | $ (0.87) |
Fair Values (Details)
Fair Values (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Jul. 01, 2017 | Oct. 01, 2016 | |
Quoted Prices in Active Markets for Identical Assets | Mutual funds — Deferred comp and supplemental plan | Prepaid and other assets: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Mutual funds - Deferred comp and supplemental plan | [1] | $ 17,727 | $ 14,399 |
Quoted Prices in Active Markets for Identical Assets | Money market fund deposits | Cash equivalents: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and Cash Equivalents, Fair Value Disclosure | 83,117 | 237,142 | |
Quoted Prices in Active Markets for Identical Assets | U.S. Treasury and agency obligations | Short-term investments: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investments, Fair Value Disclosure | [2] | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets | Commercial paper | Short-term investments: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investments, Fair Value Disclosure | [2] | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets | Equity securities | Short-term investments: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investments, Fair Value Disclosure | [3] | 0 | 20,482 |
Quoted Prices in Active Markets for Identical Assets | Foreign Exchange Contract | Prepaid and other assets: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreign currency contracts | [4] | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets | Foreign Exchange Contract | Other current liabilities: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreign currency contracts | [4] | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets | Total | Total | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Financial assets and liabilities, fair value disclosure | 100,844 | 272,023 | |
Quoted Prices in Active Markets for Identical Assets | Total | Total | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Financial assets and liabilities, fair value disclosure | 100,844 | 272,023 | |
Significant Other Observable Inputs | Mutual funds — Deferred comp and supplemental plan | Prepaid and other assets: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Mutual funds - Deferred comp and supplemental plan | [1] | 0 | 0 |
Significant Other Observable Inputs | Money market fund deposits | Cash equivalents: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | 0 | |
Significant Other Observable Inputs | U.S. Treasury and agency obligations | Short-term investments: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investments, Fair Value Disclosure | [2] | 120 | 125 |
Significant Other Observable Inputs | Commercial paper | Short-term investments: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investments, Fair Value Disclosure | [2] | 0 | 24,999 |
Significant Other Observable Inputs | Equity securities | Short-term investments: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investments, Fair Value Disclosure | [3] | 0 | 0 |
Significant Other Observable Inputs | Foreign Exchange Contract | Prepaid and other assets: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreign currency contracts | [4] | 2,531 | 889 |
Significant Other Observable Inputs | Foreign Exchange Contract | Other current liabilities: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreign currency contracts | [4] | (191) | (3,100) |
Significant Other Observable Inputs | Total | Total | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Financial assets and liabilities, fair value disclosure | 2,651 | 26,013 | |
Significant Other Observable Inputs | Total | Total | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Financial assets and liabilities, fair value disclosure | 2,460 | 22,913 | |
Total Fair Value | Mutual funds — Deferred comp and supplemental plan | Prepaid and other assets: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Mutual funds - Deferred comp and supplemental plan | [1] | 17,727 | 14,399 |
Total Fair Value | Money market fund deposits | Cash equivalents: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and Cash Equivalents, Fair Value Disclosure | 83,117 | 237,142 | |
Total Fair Value | U.S. Treasury and agency obligations | Short-term investments: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investments, Fair Value Disclosure | [2] | 120 | 125 |
Total Fair Value | Commercial paper | Short-term investments: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investments, Fair Value Disclosure | [2] | 0 | 24,999 |
Total Fair Value | Equity securities | Short-term investments: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investments, Fair Value Disclosure | [3] | 0 | 20,482 |
Total Fair Value | Foreign Exchange Contract | Prepaid and other assets: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreign currency contracts | [4] | 2,531 | 889 |
Total Fair Value | Foreign Exchange Contract | Other current liabilities: | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Foreign currency contracts | [4] | (191) | (3,100) |
Total Fair Value | Total | Total | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Financial assets and liabilities, fair value disclosure | 103,495 | 298,036 | |
Total Fair Value | Total | Total | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Financial assets and liabilities, fair value disclosure | $ 103,304 | $ 294,936 | |
[1] | The fair value of mutual funds is determined based on quoted market prices. Securities traded on a national exchange are stated at the last reported sales price on the day of valuation; other securities traded in over-the-counter markets and listed securities for which no sale was reported on that date are stated as the last quoted bid price. | ||
[2] | Valuations are based upon quoted market prices in active markets involving similar assets. The market inputs used to value these instruments generally consist of market yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. Pricing sources include industry standard data providers, security master files from large financial institutions, and other third party sources which are input into a distribution-curve-based algorithm to determine a daily market value. This creates a “consensus price” or a weighted average price for each security. | ||
[3] | Valuations are based upon quoted market prices. | ||
[4] | The principal market in which we execute our foreign currency contracts is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants usually are large commercial banks. Our foreign currency contracts’ valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. See Note 6, "Derivative Instruments and Hedging Activities". |
Short-Term Investments (Details
Short-Term Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | Oct. 01, 2016 | |
Available-for-sale Securities, Amortized Cost Basis [Abstract] | |||||
Cash and cash equivalents | $ 472,307 | $ 139,407 | $ 472,307 | $ 139,407 | $ 354,347 |
Cash and cash equivalent, Unrealized Gains | 0 | 0 | 0 | ||
Cash and cash equivalent, Unrealized Losses | 0 | 0 | 0 | ||
Available-for-sale securities: Cost Basis | 120 | 120 | 40,393 | ||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | 0 | 5,213 | ||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | 0 | 0 | ||
Available-for-sale securities: Fair Value | 120 | 120 | 45,606 | ||
Available-for-sale Securities, Debt Maturities [Abstract] | |||||
Due in less than 1 year, Amortized Cost | 120 | 120 | 25,124 | ||
Due in less than 1 year, Estimated Fair Value | 120 | 120 | 25,124 | ||
Proceeds from sale of available-for-sale securities | 0 | 15,500 | 100 | 44,100 | |
Maximum | |||||
Available-for-sale Securities, Debt Maturities [Abstract] | |||||
Realized gross gains from sale of available-for-sale securities | $ 100 | $ 100 | |||
US Treasury and agency obligations | |||||
Available-for-sale Securities, Amortized Cost Basis [Abstract] | |||||
Available-for-sale securities: Cost Basis | 120 | 120 | 125 | ||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | 0 | 0 | ||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | 0 | 0 | ||
Available-for-sale securities: Fair Value | $ 120 | $ 120 | 125 | ||
Equity securities | |||||
Available-for-sale Securities, Amortized Cost Basis [Abstract] | |||||
Available-for-sale securities: Cost Basis | 15,269 | ||||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax | 5,213 | ||||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | ||||
Available-for-sale securities: Fair Value | 20,482 | ||||
Commercial paper | |||||
Available-for-sale Securities, Amortized Cost Basis [Abstract] | |||||
Available-for-sale securities: Cost Basis | 24,999 | ||||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | ||||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | ||||
Available-for-sale securities: Fair Value | $ 24,999 |
Derivative Instruments and He49
Derivative Instruments and Hedging Activities Notional and Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | Oct. 01, 2016 | |
Derivatives, Fair Value [Line Items] | |||||
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | $ 5,600 | $ (4,900) | $ 15,000 | $ (7,400) | |
Foreign Exchange Contract | Not Designated as Hedging Instrument | |||||
Derivatives, Fair Value [Line Items] | |||||
Maximum Remaining Maturity of Foreign Currency Derivatives | 4 years | ||||
Purchase | Euro Member Countries, Euro | Not Designated as Hedging Instrument | |||||
Derivatives, Fair Value [Line Items] | |||||
Derivative Asset, Notional Amount | 89,850 | $ 89,850 | $ 91,108 | ||
Derivative Asset, Fair Value, Gross Asset | 1,606 | 1,606 | 162 | ||
Purchase | Japan, Yen | Not Designated as Hedging Instrument | |||||
Derivatives, Fair Value [Line Items] | |||||
Derivative Asset, Notional Amount | 0 | 0 | 0 | ||
Derivative Asset, Fair Value, Gross Asset | 0 | 0 | 0 | ||
Purchase | Korea (South), Won | Not Designated as Hedging Instrument | |||||
Derivatives, Fair Value [Line Items] | |||||
Derivative Asset, Notional Amount | 0 | 0 | 31,248 | ||
Derivative Asset, Fair Value, Gross Asset | 550 | 550 | 413 | ||
Purchase | China, Yuan Renminbi | Not Designated as Hedging Instrument | |||||
Derivatives, Fair Value [Line Items] | |||||
Derivative Asset, Notional Amount | 0 | 0 | 0 | ||
Derivative Asset, Fair Value, Gross Asset | 0 | 0 | 0 | ||
Purchase | Other Foreign Currency Hedge | Not Designated as Hedging Instrument | |||||
Derivatives, Fair Value [Line Items] | |||||
Derivative Asset, Notional Amount | 7,629 | 7,629 | 6,033 | ||
Derivative Asset, Fair Value, Gross Asset | 32 | 32 | 4 | ||
Sell | Euro Member Countries, Euro | Not Designated as Hedging Instrument | |||||
Derivatives, Fair Value [Line Items] | |||||
Derivative Liability, Notional Amount | 0 | 0 | (750,454) | ||
Derivative Liability, Fair Value, Gross Liability | 0 | 0 | (2,234) | ||
Sell | Japan, Yen | Not Designated as Hedging Instrument | |||||
Derivatives, Fair Value [Line Items] | |||||
Derivative Liability, Notional Amount | (25,329) | (25,329) | (36,450) | ||
Derivative Liability, Fair Value, Gross Liability | (343) | ||||
Derivative Asset, Fair Value, Gross Asset | 343 | 343 | |||
Sell | Korea (South), Won | Not Designated as Hedging Instrument | |||||
Derivatives, Fair Value [Line Items] | |||||
Derivative Liability, Notional Amount | (24,675) | (24,675) | (37,929) | ||
Derivative Liability, Fair Value, Gross Liability | 0 | 0 | (152) | ||
Sell | China, Yuan Renminbi | Not Designated as Hedging Instrument | |||||
Derivatives, Fair Value [Line Items] | |||||
Derivative Liability, Notional Amount | (16,193) | (16,193) | (25,237) | ||
Derivative Liability, Fair Value, Gross Liability | (185) | (185) | (91) | ||
Sell | Other Foreign Currency Hedge | Not Designated as Hedging Instrument | |||||
Derivatives, Fair Value [Line Items] | |||||
Derivative Liability, Notional Amount | (1,786) | (1,786) | (1,775) | ||
Derivative Liability, Fair Value, Gross Liability | $ (6) | $ (6) | |||
Derivative Asset, Fair Value, Gross Asset | $ 38 |
Derivative Instruments and He50
Derivative Instruments and Hedging Activities Derivative instruments (Gain/Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | $ 5.6 | $ (4.9) | $ 15 | $ (7.4) |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets (Goodwill) (Details) $ in Thousands | 9 Months Ended |
Jul. 01, 2017USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning of period | $ 101,458 |
Translation adjustments and other | 10,420 |
Goodwill, end of period | 410,417 |
OEM Laser Sources | |
Goodwill [Roll Forward] | |
Goodwill, beginning of period | 97,015 |
Translation adjustments and other | 1,116 |
Goodwill, end of period | 99,775 |
Industrial Lasers & Systems | |
Goodwill [Roll Forward] | |
Goodwill, beginning of period | 4,443 |
Translation adjustments and other | 9,304 |
Goodwill, end of period | 310,642 |
Rofin-Sinar | |
Goodwill [Roll Forward] | |
Goodwill, Period Increase (Decrease) | 298,539 |
Rofin-Sinar | OEM Laser Sources | |
Goodwill [Roll Forward] | |
Goodwill, Period Increase (Decrease) | 1,644 |
Rofin-Sinar | Industrial Lasers & Systems | |
Goodwill [Roll Forward] | |
Goodwill, Period Increase (Decrease) | $ 296,895 |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets (Intangible Assets) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Oct. 01, 2016 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | $ 267,979 | $ 87,016 | |
Accumulated Amortization | (65,289) | (73,142) | |
Net including IPRD | 202,690 | 13,874 | |
Amortization expense for intangible assets | 44,303 | $ 6,201 | |
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | |||
2017 (remainder) | 15,056 | ||
2,018 | 56,057 | ||
2,019 | 52,760 | ||
2,020 | 45,574 | ||
2,021 | 13,769 | ||
2,022 | 3,505 | ||
Thereafter | 9,728 | ||
Net excluding IPRD | 196,449 | ||
Existing technology | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 205,124 | 70,664 | |
Accumulated Amortization | (52,346) | (61,133) | |
Net including IPRD | 152,778 | 9,531 | |
Patents | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 313 | 0 | |
Accumulated Amortization | (41) | 0 | |
Net including IPRD | 272 | 0 | |
Customer lists | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 50,300 | 15,968 | |
Accumulated Amortization | (11,596) | (11,658) | |
Net including IPRD | 38,704 | 4,310 | |
Trade Names | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 6,001 | 384 | |
Accumulated Amortization | (1,306) | (351) | |
Net including IPRD | 4,695 | 33 | |
In-process research and development | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 6,241 | 0 | |
Accumulated Amortization | 0 | 0 | |
Net including IPRD | 6,241 | $ 0 | |
Foreign Exchange | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Amortization expense for intangible assets | $ 2,100 | $ 500 |
Balance Sheet Details (Details)
Balance Sheet Details (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Oct. 01, 2016 | |
Inventory, Net [Abstract] | |||
Purchased parts and assemblies | $ 114,616 | $ 56,824 | |
Work-in-process | 142,876 | 88,391 | |
Finished goods | 145,357 | 67,683 | |
Total inventories | 402,849 | 212,898 | |
Prepaid Expense and Other Assets, Current [Abstract] | |||
Prepaid and refundable income taxes | 32,944 | 12,415 | |
Other taxes receivable | 14,850 | 10,538 | |
Prepaid expenses and other assets | 27,033 | 14,120 | |
Total prepaid expenses and other assets | 74,827 | 37,073 | |
Other Assets, Noncurrent Disclosure [Abstract] | |||
Assets related to deferred compensation arrangements | 31,167 | 26,356 | |
Deferred tax assets | 78,515 | 67,157 | |
Other assets | 12,922 | 9,221 | |
Total other assets | 122,604 | 102,734 | |
Other Liabilities, Current [Abstract] | |||
Accrued payroll and benefits | 57,076 | 47,506 | |
Deferred revenue | 78,642 | 33,034 | |
Warranty reserve | 33,983 | 15,949 | |
Accrued expenses and other | 32,540 | 18,356 | |
Current liabilities held for sale | 7,556 | 0 | |
Customer deposits | 19,845 | 1,597 | |
Total other current liabilities | 229,642 | 116,442 | |
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | |||
Beginning balance | 15,949 | $ 15,308 | |
Additions related to current period sales | 27,854 | 15,298 | |
Warranty costs incurred in the current period | (23,422) | (15,059) | |
Accruals resulting from acquisitions | 14,314 | 0 | |
Adjustments to accruals related to foreign exchange and other | (712) | (396) | |
Ending balance | $ 33,983 | 15,151 | |
Other Liabilities, Noncurrent [Abstract] | |||
Long-term taxes payable | 35,295 | 2,951 | |
Deferred compensation | 33,288 | 28,313 | |
Deferred tax liabilities | 55,629 | 1,468 | |
Deferred revenue | 4,544 | 4,069 | |
Asset retirement obligations liability | 5,227 | 2,796 | |
Defined benefit plan liabilities | 42,214 | 8,123 | |
Other long-term liabilities | 2,181 | 1,106 | |
Total other long-term liabilities | $ 178,378 | $ 48,826 |
Borrowings (Details)
Borrowings (Details) $ in Thousands, € in Millions | 3 Months Ended | 9 Months Ended | |||||||
Jul. 01, 2017USD ($) | Dec. 31, 2016USD ($) | Jul. 01, 2017USD ($) | Jul. 02, 2016USD ($) | Jul. 01, 2017EUR (€) | Jul. 01, 2017USD ($) | Nov. 07, 2016EUR (€) | Nov. 07, 2016USD ($) | Oct. 01, 2016USD ($) | |
Debt [Line Items] | |||||||||
Repayments of Debt | $ 50,000 | ||||||||
Aggregate principal of two term loans | $ (15,300) | ||||||||
Aggregate amount of several lines of credit | $ 18,100 | ||||||||
Interest Expense | $ 6,100 | $ 18,300 | |||||||
Amortization of debt issuance cost | 2,970 | $ 0 | |||||||
Additional sources of cash available | $ 28,700 | ||||||||
Debt Instrument, Unused Borrowing Capacity, Amount | 23,000 | ||||||||
Short-term borrowings | 5,485 | $ 20,000 | |||||||
Total contractual obligation due amount | 686,344 | ||||||||
Euro Member Countries, Euro | |||||||||
Debt [Line Items] | |||||||||
Domesticlineofcreditdrawn | € | € 10 | ||||||||
Credit Agreement November 7 2016 [Domain] | net leverage ratio [Domain] | |||||||||
Debt [Line Items] | |||||||||
Senior Secured Net leverage ratio to increase revolving commitment or borrow incremental term loan | 2.75 | 2.75 | |||||||
Senior secured net leverage ratio to maintain compliance on the loan each quarter end | 3.50 | 3.50 | |||||||
Rofin-Sinar | |||||||||
Debt [Line Items] | |||||||||
Lines of credit | $ 30,000 | ||||||||
Swing line, maximum borrowing capacity | $ 10,000 | ||||||||
Euro term loan | |||||||||
Debt [Line Items] | |||||||||
Debt Issuance Costs for revolving credit facility | 28,500 | ||||||||
Amortization of debt issuance cost | $ 1,100 | $ 2,900 | |||||||
Euro term loan | Euro Member Countries, Euro | |||||||||
Debt [Line Items] | |||||||||
forward contract purchased for the term loan | € | € 590 | € 670 | |||||||
Euro currency rate range initially | 0.035 | 0.035 | |||||||
Euro currency rate range after 1st year | 0.03 | 0.03 | |||||||
Additional Euro currency rate | 0.01 | 0.01 | |||||||
Quarter principal payment requirement for Euro term loan | 0.0025 | 0.0025 | |||||||
Euro term loan | Minimum | Euro Member Countries, Euro | |||||||||
Debt [Line Items] | |||||||||
Applicable margin for Eurocurrency rate loan | 0.0375 | 0.0375 | |||||||
Euro term loan | Maximum | Euro Member Countries, Euro | |||||||||
Debt [Line Items] | |||||||||
Euro currency rate range after 1st year | 0.035 | 0.035 | |||||||
Applicable margin for Eurocurrency rate loan | 0.0425 | 0.0425 | |||||||
Revolving line of credit [Domain] | |||||||||
Debt [Line Items] | |||||||||
Revolving facility to finance acquisition of Rofin | € 10 | $ 100,000 | |||||||
Revolving facility borrowing capapcity potential increase | 150,000 | ||||||||
cash excess that requires the loan repayment | $ 10,000 | ||||||||
Debt Issuance Costs for revolving credit facility | $ 2,300 | ||||||||
Base rate initially | 0.025 | 0.025 | |||||||
Additional base rate | 0.005 | 0.005 | |||||||
Interest rate of term loan | 0.013 | 0.013 | |||||||
Interest rate of state of Connecticut term loan | 0.01 | 0.01 | |||||||
Revolving line of credit [Domain] | Minimum | |||||||||
Debt [Line Items] | |||||||||
Base rate range after 1st year | 0.02 | 0.02 | |||||||
Applicable margin for base rate revolving loan | 0.0275 | 0.0275 | |||||||
Commitment fee accrues range on unused portion of revolving loan | 0.0375 | 0.0375 | |||||||
Revolving line of credit [Domain] | Maximum | |||||||||
Debt [Line Items] | |||||||||
Base rate range after 1st year | 0.025 | 0.025 | |||||||
Applicable margin for base rate revolving loan | 0.0325 | 0.0325 | |||||||
Commitment fee accrues range on unused portion of revolving loan | 0.005 | 0.005 | |||||||
Line of Credit, Foreign | |||||||||
Debt [Line Items] | |||||||||
Amounts drawn upon line of credit | $ 5,500 |
Borrowings Short term obligatio
Borrowings Short term obligation table (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2016 | Jul. 01, 2017 | Oct. 01, 2016 | |
Short-term Debt [Line Items] | |||
Euro Term Loan due 2024 | $ 0 | ||
Short-term borrowings | $ 5,485 | 20,000 | |
Euro term loan | |||
Short-term Debt [Line Items] | |||
Debt issuance cost for short term Euro term loan | $ 4,200 | ||
Short-term Debt | |||
Short-term Debt [Line Items] | |||
Euro Term Loan due 2024 | 3,464 | 0 | |
1.3% Term Loan due 2024 | 1,428 | 0 | |
1.0% State of Connecticut Term Loan due 2023 | 370 | 0 | |
Line of Credit, Current | $ 223 | $ 20,000 |
Borrowings Long-term obligation
Borrowings Long-term obligation table (Details) $ in Thousands, € in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||||||
Jul. 01, 2017EUR (€) | Jul. 01, 2017USD ($) | Apr. 01, 2017EUR (€) | Dec. 31, 2016USD ($) | Apr. 01, 2017 | Jul. 01, 2017USD ($) | Jul. 02, 2016USD ($) | Jul. 01, 2017USD ($) | Nov. 07, 2016EUR (€) | Nov. 07, 2016USD ($) | Oct. 01, 2016USD ($) | |
Long term debt [Line Items] | |||||||||||
Debt issuance cost related to repricing | $ 500 | ||||||||||
Interest Expense | $ 6,100 | $ 18,300 | |||||||||
Euro Term Loan due 2024 | $ 0 | ||||||||||
Amortization of debt issuance cost | 2,970 | $ 0 | |||||||||
Euro term loan | |||||||||||
Long term debt [Line Items] | |||||||||||
Amortization period of the debt issuance cost | 7 years | ||||||||||
Debt Issuance Costs for long term Euro term loan | $ 24,200 | ||||||||||
Amortization of debt issuance cost | $ 1,100 | $ 2,900 | |||||||||
Revolving line of credit [Domain] | |||||||||||
Long term debt [Line Items] | |||||||||||
debt issuance cost amortization period | 5 years | ||||||||||
Revolving facility to finance acquisition of Rofin | € 10 | $ 100,000 | |||||||||
Long-term Debt | |||||||||||
Long term debt [Line Items] | |||||||||||
Euro Term Loan due 2024 | $ 641,905 | ||||||||||
Long-term Debt | 652,700 | 0 | |||||||||
1.0% State of Connecticut Term Loan due 2023 | 1,873 | 0 | |||||||||
1.3% Term Loan due 2024 | $ 8,922 | $ 0 | |||||||||
Euro Member Countries, Euro | Euro term loan | |||||||||||
Long term debt [Line Items] | |||||||||||
Voluntary payment of principle | € | 45 | € 30 | |||||||||
forward contract purchased for the term loan | € | € 590 | € 670 |
Borrowings debt maturity table
Borrowings debt maturity table (Details) $ in Thousands | Jul. 01, 2017USD ($) |
Debt Disclosure [Abstract] | |
2017 (remainder) | $ 2,362 |
2,018 | 9,450 |
2,019 | 9,450 |
2,020 | 9,450 |
2,021 | 9,450 |
2,022 | 9,450 |
Thereafter | 636,732 |
Total contractual obligation due amount | $ 686,344 |
Stock-Based Compensation (Fair
Stock-Based Compensation (Fair Value of Stock Compensation) (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | 3 years | |||
Employee Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Expected life in years | 6 months | 6 months | 6 months | 6 months |
Expected volatility | 34.50% | 38.50% | 30.80% | 31.60% |
Risk-free interest rate | 0.85% | 0.37% | 0.62% | 0.28% |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Weighted average fair value per share | $ 47.36 | $ 21.35 | $ 32.30 | $ 16.08 |
Performance Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Expected volatility | 31.00% | 27.00% | ||
Risk-free interest rate | 1.30% | 1.20% | ||
Weighted average fair value per share | $ 163.17 | $ 74.48 |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated stock-based compensation expense | $ 5,041 | $ 4,101 | $ 18,075 | $ 11,371 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount | 900 | 700 | 2,600 | 2,000 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Amortized Amount | 900 | 700 | 2,400 | 1,900 |
Total compensation cost, unvested stock-based awards granted but not yet recognized | 38,100 | $ 38,100 | ||
Total compensation cost, weighted-average period of amortization (in years) | 1 year 6 months 26 days | |||
Cost of Sales | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated stock-based compensation expense | 880 | 677 | $ 2,618 | 1,876 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated stock-based compensation expense | 639 | 610 | 2,289 | 1,646 |
Selling, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated stock-based compensation expense | 5,373 | 4,402 | 18,323 | 11,299 |
Income tax benefit | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Income tax benefit | (1,851) | $ (1,588) | (5,155) | (3,450) |
Employee Stock | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total compensation cost, unvested stock-based awards granted but not yet recognized | $ 1,000 | $ 1,000 | ||
Total compensation cost, weighted-average period of amortization (in years) | 6 months | |||
PeriodEnd | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount | $ 1,100 | $ 800 |
Stock-Based Compensation (Sto60
Stock-Based Compensation (Stock Options and Awards Activity) (Details) | 9 Months Ended | |
Jul. 01, 2017$ / sharesshares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | 3 years | |
common shares that restricted stock units with each unit representing | 1 | |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward] | ||
Nonvested stock, Number of Shares, beginning of period | 459,000 | |
Nonvested stock, Weighted Average Grant Date Fair Value, beginning of period | $ / shares | $ 66.47 | |
Granted, Number of Shares | 186,000 | |
Granted, Weighted Average Grant Date Fair Value | $ / shares | $ 131.54 | |
Vested, Number of Shares | (228,000) | [1] |
Vested, Weighted Average Grant Date Fair Value | $ / shares | $ 66.03 | [1] |
Forfeited, Number of Shares | (13,000) | |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | $ 76.62 | |
Nonvested stock, Number of Shares, end of period | 404,000 | |
Nonvested stock, Weighted Average Grant Date Fair Value, end of period | $ / shares | $ 118.60 | |
Performance Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward] | ||
Nonvested stock, Number of Shares, beginning of period | 169,000 | |
Nonvested stock, Weighted Average Grant Date Fair Value, beginning of period | $ / shares | $ 74.10 | |
Granted, Number of Shares | 115,000 | |
Granted, Weighted Average Grant Date Fair Value | $ / shares | $ 163.17 | |
Vested, Number of Shares | (104,000) | [1] |
Vested, Weighted Average Grant Date Fair Value | $ / shares | $ 77.10 | [1] |
Forfeited, Number of Shares | (4,000) | |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | $ 70.57 | |
Nonvested stock, Number of Shares, end of period | 176,000 | |
Nonvested stock, Weighted Average Grant Date Fair Value, end of period | $ / shares | $ 105.34 | |
Restricted Stock Units and Awards [Abstract] | ||
Targeted goal of performance based awards and units | 100.00% | |
Performance Restricted Stock Units | Minimum | ||
Restricted Stock Units and Awards [Abstract] | ||
Percentage of performance-based awards earned by recipient | 0.00% | |
Performance Restricted Stock Units | Maximum | ||
Restricted Stock Units and Awards [Abstract] | ||
Percentage of performance-based awards earned by recipient | 200.00% | |
[1] | -based restricted stock units vested during the fiscal year. Performance-based restricted stock units included at 100% of target goal; under the terms of the awards, the recipient may earn between 0% and 200% of the award. |
Stock-Based Compensation Acquis
Stock-Based Compensation Acquisition (Details) - Rofin-Sinar - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Dec. 31, 2016 | Jul. 01, 2017 | |
Payment due to the cancellation of options held by Rofin employees [Line Items] | ||
payment due to cancellation of options held by Rofin employees | $ 15,290 | |
Total estimated merger consideration for canceled of options held by Rofin employees | 11,100 | |
Payments to Acquire Businesses, Gross | $ 919,781 | |
Post merger stock compensation expense | $ 4,152 |
Commitments and Contingencies E
Commitments and Contingencies Estimated Liabilties (Details) $ in Millions | 3 Months Ended |
Apr. 02, 2016USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Foreign tax payment related to South Korea customs audit | $ 1.6 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Weighted average shares outstanding—basic | 24,537,000 | 24,192,000 | 24,460,000 | 24,108,000 |
Dilutive effect of employee awards | 286,000 | 275,000 | 281,000 | 247,000 |
Weighted average shares outstanding—diluted | 24,823,000 | 24,467,000 | 24,741,000 | 24,355,000 |
Net income from continuing operations | $ 62,871 | $ 18,650 | $ 135,757 | $ 56,717 |
Loss from discontinued operations, net of income taxes | (1,754) | 0 | (2,387) | 0 |
Net income | $ 61,117 | $ 18,650 | $ 133,370 | $ 56,717 |
Earnings Per Share, Diluted, Other Disclosures [Abstract] | ||||
Dilutive securities excluded from calculation of dilutive shares | 0 | 214 | 0 | 71 |
Other Income (Expense) (Details
Other Income (Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Component of Other Income (Expense), Nonoperating [Line Items] | ||||
Other - net | $ (730) | $ 564 | $ 10,871 | $ (1,896) |
Foreign exchange gain (loss) | ||||
Component of Other Income (Expense), Nonoperating [Line Items] | ||||
Foreign exchange gain (loss) | (2,439) | (1,261) | 7,928 | (2,781) |
Gain on deferred compensation investments, net | ||||
Component of Other Income (Expense), Nonoperating [Line Items] | ||||
Gain on deferred compensation investments, net | 1,136 | 1,796 | 2,831 | 795 |
Other | ||||
Component of Other Income (Expense), Nonoperating [Line Items] | ||||
Other | $ 573 | $ 29 | $ 112 | $ 90 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||||
Effective income tax rate (percent) | 32.10% | 31.30% | 32.40% | 27.70% |
U.S. Federal statutory rate | 35.00% | 35.00% | ||
Income Tax Examination, Penalties and Interest Accrued | $ 2 | $ 2 |
Income Taxes Schedule of gros66
Income Taxes Schedule of gross unrecognized tax benefits activities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Jul. 01, 2017 | Oct. 01, 2016 | |
Reconciliation of Unrecognized Tax Benefits | ||
Balance as of the beginning of the year | $ 20,442 | |
Increase related to acquisitions | 26,407 | |
Additions | 1,678 | |
Unrecognized Tax Benefits, Decrease Resulting from Current Period Tax Positions | (87) | |
Unrecognized Tax Benefit, Period Decrease | $ 0 | |
UnrecognizedTaxBenefitsPeriodIncreaseDecreasePYrelated | 3,018 | |
Settlements | 0 | |
Lapses in statutes of limitations | 0 | |
Foreign currency revaluation adjustment | 1,025 | |
Balance as of end of period | $ 52,483 | $ 20,442 |
Defined Benefit Plans (Details)
Defined Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Defined benefit plans [Abstract] | ||||
Service cost | $ 566 | $ 134 | $ 1,409 | $ 425 |
Interest cost | 279 | 15 | 729 | 50 |
Expected return on plan assets | (184) | 0 | (490) | 0 |
Amortization of prior net loss | 139 | 0 | 370 | 0 |
Amortization of prior service cost | 19 | 0 | 50 | 0 |
Amortization of prior service cost | 387 | 122 | 845 | 410 |
Net periodic pension cost | $ 1,206 | $ 271 | $ 2,913 | $ 885 |
Segment Information - Sales and
Segment Information - Sales and Income (Loss) from Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Segment Reporting Information [Line Items] | ||||
Net sales: | $ 464,107 | $ 218,767 | $ 1,233,013 | $ 608,924 |
Total income from continuing operations | 100,577 | 26,288 | 213,866 | 79,575 |
Total other income (expense), net | (7,942) | 852 | (13,025) | (1,150) |
Income from continuing operations before income taxes | 92,635 | 27,140 | 200,841 | 78,425 |
Corporate and Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Income (loss) from continuing operations: | (18,516) | (17,242) | (63,609) | (40,784) |
OEM Laser Sources | ||||
Segment Reporting Information [Line Items] | ||||
Net sales: | 309,925 | 183,544 | 825,805 | 509,416 |
Income (loss) from continuing operations: | 120,586 | 47,989 | 307,046 | 131,652 |
Industrial Lasers & Systems | ||||
Segment Reporting Information [Line Items] | ||||
Net sales: | 154,182 | 35,223 | 407,208 | 99,508 |
Income (loss) from continuing operations: | $ (1,493) | $ (4,459) | $ (29,571) | $ (11,293) |
Segment Information - Major Cus
Segment Information - Major Customers (Details) - Customer Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | |||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | Oct. 01, 2016 | |
Customer 1 [Member] | Sales [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration Risk, Percentage | 28.20% | 11.30% | 25.30% | 10.60% | |
Customer 1 [Member] | Accounts receivable | |||||
Concentration Risk [Line Items] | |||||
Number of Customers, Concentration Risk, Percentage | 21.60% | 21.60% | 18.00% | ||
Customer 2 [Member] | Sales [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration Risk, Percentage | 15.80% | 16.80% | |||
Customer 2 [Member] | Accounts receivable | |||||
Concentration Risk [Line Items] | |||||
Number of Customers, Concentration Risk, Percentage | 18.70% |
Restructuring charges (Details)
Restructuring charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Jul. 01, 2017 | |
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | $ 1,965 | $ 2,359 | $ 0 | $ 0 |
Provision | 1,500 | 557 | 7,062 | |
Payments and other | (2,005) | (951) | (4,703) | |
Ending balance | 1,460 | 1,965 | 2,359 | 1,460 |
Employee Severance | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 1,786 | 2,359 | 0 | 0 |
Provision | 1,115 | 319 | 2,703 | |
Payments and other | (1,793) | (892) | (344) | |
Ending balance | 1,108 | 1,786 | 2,359 | 1,108 |
Asset write offs | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 0 | 0 | 0 | 0 |
Provision | 82 | (45) | 4,359 | |
Payments and other | (82) | 45 | (4,359) | |
Ending balance | 0 | 0 | 0 | 0 |
Other Restructuring [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 179 | 0 | 0 | 0 |
Provision | 303 | 283 | 0 | |
Payments and other | (130) | (104) | 0 | |
Ending balance | 352 | $ 179 | $ 0 | 352 |
Industrial Lasers & Systems | Employee Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Cost Incurred to Date | 1,500 | 8,600 | ||
OEM Laser Sources | Employee Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Cost Incurred to Date | 0 | 500 | ||
Other current liabilities: | Employee Severance | ||||
Restructuring Reserve [Roll Forward] | ||||
Ending balance | $ 1,500 | $ 1,500 |
Discontinued Operations Discont
Discontinued Operations Discontinued Operation Income / Loss, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jul. 01, 2017 | Jul. 02, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Net sales | $ 7,920 | $ 20,296 | ||
Cost of sales | 5,349 | 14,337 | ||
Operating expenses | 2,771 | 6,924 | ||
Tangible Asset Impairment Charges | 1,249 | 1,249 | ||
Other expense | 5 | 173 | ||
Income tax expense | 300 | 0 | ||
Loss from discontinued operations, net of income taxes | $ (1,754) | $ 0 | $ (2,387) | $ 0 |
Discontinued Operations Held fo
Discontinued Operations Held for sale current assets and liabilities from discontinued operations (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Jul. 01, 2017USD ($) | Jul. 01, 2017USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Tangible Asset Impairment Charges | $ 1,249 | $ 1,249 |
Accounts receivable | Discontinued Operations, Held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Disposal Group, Including Discontinued Operation, Assets | 6,936 | 6,936 |
Inventory | Discontinued Operations, Held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Disposal Group, Including Discontinued Operation, Assets | 4,991 | 4,991 |
Prepaid and other assets: | Discontinued Operations, Held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Disposal Group, Including Discontinued Operation, Assets | 383 | 383 |
Property and equipment | Discontinued Operations, Held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Disposal Group, Including Discontinued Operation, Assets | 10,475 | 10,475 |
Intangible assets | Discontinued Operations, Held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Disposal Group, Including Discontinued Operation, Assets | 9,771 | 9,771 |
Total current assets held for sale | Discontinued Operations, Held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Disposal Group, Including Discontinued Operation, Assets | 32,556 | 32,556 |
Accounts payable | Discontinued Operations, Held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Disposal Group, Including Discontinued Operation, Liabilities | 1,973 | 1,973 |
Other current liabilities: | Discontinued Operations, Held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Disposal Group, Including Discontinued Operation, Liabilities | 5,583 | 5,583 |
Current liabilities held for sale | Discontinued Operations, Held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Disposal Group, Including Discontinued Operation, Liabilities | 7,556 | $ 7,556 |
Rofin-Sinar | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Goodwill reallocated from AFS to remaining business during remeasurement period | $ 33,900 |