DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 6 Months Ended | |
Apr. 01, 2018 | Apr. 24, 2018 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Apr. 1, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | MSCC | |
Entity Registrant Name | MICROSEMI CORP | |
Entity Central Index Key | 310,568 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 117,959,591 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Apr. 01, 2018 | Oct. 01, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 223.2 | $ 144.9 |
Accounts receivable, net of allowances of $41.7 at April 1, 2018 and $43.8 at October 1, 2017 | 292.2 | 267.9 |
Inventories | 265.6 | 239.1 |
Other current assets | 71.9 | 75 |
Total current assets | 852.9 | 726.9 |
Property and equipment, net | 223.8 | 197.6 |
Goodwill | 2,538.4 | 2,497.3 |
Intangible assets, net | 698.6 | 752.3 |
Deferred income taxes, net | 68.7 | 67.2 |
Other assets | 87.7 | 81.8 |
Total assets | 4,470.1 | 4,323.1 |
Current liabilities: | ||
Accounts payable | 162.6 | 164.9 |
Accrued liabilities | 131 | 153.4 |
Current maturity of long-term debt | 81.4 | 61.1 |
Total current liabilities | 375 | 379.4 |
Long-term debt | 1,800.5 | 1,735.6 |
Deferred income taxes | 84.6 | 103.8 |
Other long-term liabilities | 123.6 | 110 |
Commitments and contingencies (Note 10) | ||
Stockholders’ equity: | ||
Preferred stock, $1.00 par value; authorized 1 share; none issued | 0 | 0 |
Common stock, $0.20 par value; 250.0 authorized, 118.0 issued and outstanding at April 1, 2018 and 116.3 issued and outstanding at October 1, 2017 | 23.6 | 23.3 |
Capital in excess of par value of common stock | 1,474.1 | 1,443.7 |
Retained earnings | 586.9 | 526.9 |
Accumulated other comprehensive income | 1.8 | 0.4 |
Total stockholders’ equity | 2,086.4 | 1,994.3 |
Total liabilities and stockholders' equity | $ 4,470.1 | $ 4,323.1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Apr. 01, 2018 | Oct. 01, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 41.7 | $ 43.8 |
Preferred stock, par value (USD per share) | $ 1 | $ 1 |
Preferred stock, authorized | 1,000 | 1,000 |
Preferred stock, issued | 0 | 0 |
Common stock, par value (USD per share) | $ 0.20 | $ 0.20 |
Common stock, authorized | 250,000,000 | 250,000,000 |
Common stock, issued | 118,000,000 | 116,300,000 |
Common stock, outstanding | 118,000,000 | 116,300,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 01, 2018 | Apr. 02, 2017 | Apr. 01, 2018 | Apr. 02, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 492.2 | $ 442.9 | $ 960.9 | $ 878.4 |
Cost of sales (excluding amortization of intangible assets below) | 201.9 | 158.8 | 382 | 317.8 |
Gross profit | 290.3 | 284.1 | 578.9 | 560.6 |
Operating expenses | ||||
Selling, general and administrative | 100.8 | 75.8 | 185.1 | 166.2 |
Research and development costs | 92.7 | 86.9 | 181.8 | 169.2 |
Amortization of intangible assets | 42.2 | 46.5 | 92.4 | 92.1 |
Restructuring, severance and facilities charges | 3.1 | 5.8 | 8.6 | 8.2 |
Total operating expenses | 238.8 | 215 | 467.9 | 435.7 |
Operating income | 51.5 | 69.1 | 111 | 124.9 |
Other expense | ||||
Interest expense, net | (22.8) | (25.9) | (44.4) | (51.8) |
Other expense, net | (0.8) | (0.3) | (4.4) | (1.6) |
Total other expense | (23.6) | (26.2) | (48.8) | (53.4) |
Income before income taxes | 27.9 | 42.9 | 62.2 | 71.5 |
Provision for income taxes | 15.6 | 1.7 | 2 | 10.9 |
Net income | $ 12.3 | $ 41.2 | $ 60.2 | $ 60.6 |
Earnings per share | ||||
Basic (USD per share) | $ 0.10 | $ 0.36 | $ 0.51 | $ 0.53 |
Diluted (USD per share) | $ 0.10 | $ 0.35 | $ 0.50 | $ 0.52 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 117.4 | 114.7 | 117.2 | 114.4 |
Diluted (in shares) | 119.6 | 117 | 119.3 | 116.6 |
Net income | $ 12.3 | $ 41.2 | $ 60.2 | $ 60.6 |
Other comprehensive income (loss), net of taxes | ||||
Currency translation adjustment | 0.9 | 0.3 | 1.4 | (0.9) |
Other comprehensive income (loss), net of taxes | 0.9 | 0.3 | 1.4 | (0.9) |
Total comprehensive income | $ 13.2 | $ 41.5 | $ 61.6 | $ 59.7 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Apr. 01, 2018 | Apr. 02, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 60.2 | $ 60.6 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 120.5 | 115.8 |
Amortization of deferred financing cost | 6.1 | 5.6 |
Loss on divestiture | 0 | 1.2 |
Loss on disposition or impairment of assets | 1.2 | 0 |
Deferred income taxes | (19.2) | (7.3) |
Charge for stock-based compensation | 51.7 | 43.9 |
Change in assets and liabilities: | ||
Accounts receivable | (7.5) | 12.8 |
Inventories | 12 | (2.1) |
Other current assets | 3.3 | (16.6) |
Other assets | (3) | (11.4) |
Accounts payable | (18.1) | (1.1) |
Accrued liabilities | (28.8) | (5.5) |
Other long-term liabilities | 9.9 | 3.2 |
Net cash provided by operating activities | 188.3 | 199.1 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (29.6) | (26.5) |
Proceeds from the sale of short term investments | 0.1 | 0.1 |
Acquisitions net of cash acquired | (138.6) | (17) |
Net cash used in investing activities | (168.1) | (43.4) |
Cash flows from financing activities: | ||
Proceeds from debt | 145 | 235 |
Repayments of debt | (65.4) | (385.4) |
Payments of debt issuance costs | 0 | (1.2) |
Payments for stock settled tax withholdings | (23.1) | (3.9) |
Proceeds from exercise of stock options | 1.6 | 1.5 |
Net cash provided by (used in) financing activities | 58.1 | (154) |
Net increase in cash and cash equivalents | 78.3 | 1.7 |
Cash and cash equivalents at beginning of period | 144.9 | 189.5 |
Cash and cash equivalents at end of period | $ 223.2 | $ 191.2 |
Presentation of Financial Infor
Presentation of Financial Information | 6 Months Ended |
Apr. 01, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Presentation of Financial Information | Presentation of Financial Information The unaudited consolidated financial statements include the accounts of Microsemi Corporation and its subsidiaries. Intercompany transactions have been eliminated in consolidation. The consolidated financial statements are unaudited, but in the opinion of our management, include all adjustments (all of which are normal or recurring adjustments) necessary for a fair statement of the results of operations for the periods indicated. The results of operations for the most recently reported quarter and six months ended April 1, 2018 are not necessarily indicative of the results to be expected for the full year. The unaudited consolidated financial statements have been prepared in accordance with the requirements of Form 10-Q and Article 10 of SEC Regulation S-X, and therefore do not include all information and note disclosures necessary for a fair statement of our consolidated financial position, results of operations and cash flows in conformity with United States generally accepted accounting principles. The unaudited consolidated financial statements and notes thereto must be read in their entirety in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended October 1, 2017 . The unaudited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles, which require us to make estimates and assumptions that may materially affect the reported amounts of assets and liabilities at the date of the unaudited consolidated financial statements and revenues and expenses during the periods reported. Actual results could differ materially from those estimates. Information with respect to our accounting policies that we believe could have the most significant effect on our reported results and require subjective or complex judgments is contained in the notes to the consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended October 1, 2017 . In referencing a year, we are referring to the fiscal year ended on the Sunday closest to September 30. Except for per-share amounts, dollar amounts are presented in millions unless otherwise stated. Earnings Per Share Basic earnings per share have been computed based upon the weighted-average number of common shares outstanding during the respective periods. Diluted earnings per share have been computed, when the result is dilutive, using the treasury stock method for stock awards outstanding during the respective periods. Earnings per share were calculated as follows: Quarter Ended Six Months Ended April 1, April 2, April 1, April 2, Basic Net income $ 12.3 $ 41.2 $ 60.2 $ 60.6 Weighted-average common shares outstanding 117.4 114.7 117.2 114.4 Basic earnings per share $ 0.10 $ 0.36 $ 0.51 $ 0.53 Diluted Net income $ 12.3 $ 41.2 $ 60.2 $ 60.6 Weighted-average common shares outstanding for basic 117.4 114.7 117.2 114.4 Dilutive effect of stock awards 2.2 2.3 2.1 2.2 Weighted-average common shares outstanding on a diluted basis 119.6 117.0 119.3 116.6 Diluted earnings per share $ 0.10 $ 0.35 $ 0.50 $ 0.52 For the quarter and six months ended April 1, 2018 , we excluded 0.2 million of stock awards in the computation of diluted earnings per share as these stock awards would have been anti-dilutive. For the quarter and six months ended April 2, 2017, there were no stock awards excluded in the computation of diluted earnings per share. Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09 which provides guidance on how an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Entity expects to be entitled in exchange for those goods or services and on accounting for costs to obtain or fulfill a contract with a customer. The ASU also requires expanded disclosure regarding the nature, amount, timing and uncertainty of revenue that is recognized. In July 2015, the FASB decided to delay the effective date of this ASU by one year. This ASU, as amended, will be effective for the Company beginning in the first quarter of fiscal 2019 and can be adopted either full retrospective or modified retrospective with the cumulative effect recognized as of the date of adoption. Early adoption is permitted, but no earlier than fiscal 2018. We intend to adopt this ASU on a modified retrospective basis in the first quarter of fiscal 2019. We are still in the process of finalizing our analysis on the impact of the provisions of the new standards. Our assessment process consists of reviewing our current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to our revenue contracts and identifying appropriate changes to our business processes, systems and controls to support revenue recognition and disclosure requirements under the new standard. Based on our preliminary assessments, we do not expect the new guidance to have a material impact on the nature, amount, and timing of our revenue recognition. As we continue to assess the impact of the new guidance on our revenue contracts with our customers and finalize our evaluation of any changes to our accounting policies, internal controls and footnote disclosures, we may identify additional areas of impact and may revise the results of our preliminary assessment. The FASB since issued additional updates of its new standard on revenue recognition issued in May 2014. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606) - Principal versus Agent Considerations, which clarifies the implementation guidance for principal versus agent considerations in ASU 2014-09. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing, which amends the guidance in ASU 2014-09 related to identifying performance obligations and accounting for licenses of intellectual property. We are currently assessing the adoption and impact of these ASUs on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which modified lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosing key information about leasing arrangements. This ASU will be effective for us beginning in the first quarter of 2020 on a modified retrospective basis. Early adoption is permitted. We are currently evaluating the impact of adopting the new lease standard on our consolidated financial statements. |
Pending Acquisition
Pending Acquisition | 6 Months Ended |
Apr. 01, 2018 | |
Business Combinations [Abstract] | |
Pending Acquisition | Pending Acquisition On March 1, 2018, Microsemi, Microchip Technology Incorporated, a Delaware corporation ("Microchip") and Maple Acquisition Corporation, a Delaware corporation and a wholly owned subsidiary of Microchip ("Merger Subsidiary"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which, among other things, Merger Subsidiary will be merged with and into the Company (the "Merger"), with the Company surviving the Merger as a wholly owned subsidiary of Microchip. At the time the Merger becomes effective (the "Effective Time"), each outstanding share of common stock, par value $0.20 per share, of the Company ("Company Stock") outstanding immediately prior to the Merger (other than (1) treasury stock held by the Company or shares of Company Stock held by Microchip or any subsidiary of the Company or Microchip, which will be cancelled without consideration and (2) shares of Company Stock held by stockholders, if any, who properly exercise their appraisal rights under the General Corporation Law of the State of Delaware) will be automatically cancelled and converted into the right to receive an amount equal to $68.78 in cash, without interest (the "Merger Consideration"). Pursuant to the Merger Agreement, as of the Effective Time, the outstanding Company equity awards will be treated as follows: (a) each outstanding option to purchase shares of Company Stock and stock appreciation right ("SAR") related to Company Stock, whether vested or unvested, will be assumed by Microchip and will be subject to the same terms and conditions as applied to the related option or SAR immediately prior to the Effective Time, except that (i) the number of shares of Microchip’s common stock subject to each assumed option or assumed SAR will be equal to the product of the number of shares of Company Stock underlying such assumed option or assumed SAR as of immediately prior to the Effective Time multiplied by the ratio of the Merger Consideration to the average closing sales price per share of Microchip’s common stock over the period of ten trading days ending on the last trading day before the closing of the Merger (the "equity award exchange ratio") and (ii) the per share exercise price of each assumed option or assumed SAR will be determined by dividing the per share exercise price of the assumed option or assumed SAR immediately prior to the Effective Time by the equity award exchange ratio; (b) each award of time-based vesting restricted stock units ("RSU") with respect to shares of Company Stock that is outstanding and vested immediately prior to the Effective Time (including those RSUs that become vested by their terms immediately prior to or as of the Effective Time) will be canceled and converted into the right to receive an amount in cash equal to (i) the number of vested RSUs subject to the award multiplied by (ii) the Merger Consideration; (c) each award of time-based vesting RSUs with respect to shares of Company Stock that is outstanding and unvested at the Effective Time will be assumed by Microchip and converted into a number of RSUs with respect to Microchip’s common stock determined by multiplying the number of unvested RSUs by the equity award exchange ratio; (d) each award of performance-based vesting RSUs with respect to shares of Company Stock ("PSUs") that is outstanding immediately prior to the Effective Time will vest as to a percentage of the total number of shares of Company Stock subject to such award to be determined prior to the Effective Time by the compensation committee of the Company’s board of directors (the "Board") (which percentage will not be less than 100% of the target number of shares subject to the award or greater than the maximum possible vesting percentage under the terms of the award) and will be canceled and converted into the right to receive an amount in cash equal to (i) the number of vested PSUs subject to the award multiplied by (ii) the Merger Consideration; and (e) each share of Company Stock awarded pursuant to a Company restricted stock award that is outstanding and unvested as of immediately prior to the Effective Time will be cancelled and converted into the right to receive an amount in cash equal to the Merger Consideration, provided that the right of the award holder to receive such cash payment will be subject to the same vesting conditions (including any applicable acceleration provisions provided under the terms of the award) as applied to the share of Company Stock to which such payment of the Merger Consideration relates. However, at least 10 days prior to the Effective Time, Microsemi and Microchip may agree that the Microsemi equity awards may be treated in a manner other than as set forth above if Microsemi and Microchip in good faith determine that (i) different treatment is necessary to avoid the violation of applicable local law or to comply with applicable local law, and (ii) such different treatment is, to the maximum extent practicable, consistent with the treatment set forth above. The respective obligations of the Company, Microchip and Merger Subsidiary to consummate the Merger are subject to the satisfaction or waiver of certain customary conditions, including the adoption of the Merger Agreement by the Company’s stockholders, receipt of certain regulatory approvals, the absence of any legal prohibitions to the consummation of the Merger, the accuracy of the representations and warranties of the parties and compliance by the parties with their respective obligations under the Merger Agreement. Assuming timely receipt of required regulatory approvals and satisfaction of other closing conditions, including the adoption of the Merger Agreement by the Company’s stockholders, the Company and Microchip anticipate that the Merger will be completed in June 2018. The Merger Agreement contains certain termination rights, including the right of the Company to terminate the Merger Agreement under specified circumstances to accept an unsolicited superior proposal from a third party. The Merger Agreement provides that, upon termination of the Merger Agreement by the Company or Microchip under specified circumstances (including termination by the Company to accept a superior proposal), a termination fee of $290.0 million will be payable by the Company to Microchip. The termination fee is also payable by the Company to Microchip under certain other specified circumstances set forth in the Merger Agreement. The Merger Agreement also contains a provision requiring the Company to reimburse Microchip for up to $35.0 million of its expenses incurred in connection with the Merger if the Merger Agreement is not adopted by the Company’s stockholders is not obtained at a meeting called for that purpose. During the quarter ended April 1, 2018, we recorded acquisition-related costs of approximately $14.8 million , primarily for outside legal and external financial advisory fees associated with the pending acquisition by Microchip. These costs were recorded in sales, general and administrative expenses in our consolidated statements of operations. Additional acquisition-related costs are expected to be incurred through the closing of the Merger. |
Inventories
Inventories | 6 Months Ended |
Apr. 01, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are summarized as follows: April 1, October 1, Raw materials $ 55.3 $ 42.5 Work in process 130.3 120.6 Finished goods 80.0 76.0 $ 265.6 $ 239.1 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 6 Months Ended |
Apr. 01, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill and intangible assets, net consisted of the following components: April 1, October 1, Amortizable intangible assets Completed technology $ 627.2 $ 670.9 Customer relationships 69.5 73.8 Backlog, trade name and other 1.9 0.6 $ 698.6 $ 745.3 Non-amortizable intangible assets Goodwill $ 2,538.4 $ 2,497.3 In-process research and development $ — $ 7.0 A reconciliation of goodwill for the six months ended April 1, 2018 is as follows: Balance as of October 1, 2017 $ 2,497.3 Additions from acquisitions 41.1 Balance as of April 1, 2018 $ 2,538.4 The increase in goodwill for the six months ended April 1, 2018 is related primarily to an acquisition completed during the quarter ending December 31, 2017. We completed a preliminary purchase price allocation with regards to this acquisition. Amortization of intangible assets included in operating expenses is as follows: Quarter Ended Six Months Ended April 1, April 2, April 1, April 2, Completed technology $ 38.9 $ 34.5 $ 77.3 $ 66.2 Customer relationships 3.0 11.7 7.6 23.7 Backlog, trade name and other 0.3 0.3 7.5 2.2 $ 42.2 $ 46.5 $ 92.4 $ 92.1 Estimated amortization expense for amortizable intangible assets in each of the five succeeding years and thereafter is as follows: Less than 1 Year 1-2 Years 2-3 Years 3-4 Years 4-5 Years Thereafter $ 160.2 $ 146.9 $ 144.8 $ 128.8 $ 51.1 $ 66.8 |
Income Taxes
Income Taxes | 6 Months Ended |
Apr. 01, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the quarter and six months ended April 1, 2018 , we recorded an income tax provision of $15.6 million and $2.0 million , respectively. For the quarter and six months ended April 2, 2017 , we recorded an income tax provision of $1.7 million and $10.9 million , respectively. The difference in our effective tax rate from the U.S. statutory rate primarily reflects the impact of the mix of domestic and international pre-tax income, valuation allowance and credits. During the quarter and six months ended April 1, 2018 , our income tax provisions include provisional expense and benefit, respectively, related to certain aspects of the Tax Cuts and Jobs Act ("TCJA"), as discussed further below, and changes in unrecognized tax benefits for uncertain tax positions. During the quarter and six months ended April 2, 2017 , our income tax provisions included the effects of a decrease in expense due to a change in the expected realizability of certain deferred tax liabilities, partially offset by changes in effective tax rates in certain foreign jurisdictions. The TCJA was enacted on December 22, 2017, and permanently reduces the U.S. federal corporate tax rate from 35% to 21% , requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax-deferred and creates new taxes on certain foreign sourced earnings. The statutory rate applicable to our fiscal year ending September 30, 2018 will be 24.5% , based on a fiscal year blended rate calculation. Accounting Standard Codification ("ASC") 740 requires filers to record the effect of tax law changes in the period enacted. However, the SEC issued Staff Accounting Bulletin No. 118 ("SAB 118"), which allows us to record provisional amounts during a measurement period ending no later than one year from the date of the TCJA enactment. As of April 1, 2018 , we have not completed our accounting for the tax effects of enactment of the TCJA. However, in the quarter ended April 1, 2018 , we recorded a provisional tax expense of $11.1 million for the impact of the one-time transition tax. In the quarter ended December 31, 2017, we recorded a provisional tax benefit of $12.4 million for the remeasurement of certain deferred tax liabilities in the U.S. from 35% to 21% , as well as a provisional tax benefit of $11.8 million for the recognition of the alternative minimum tax credits that will be fully refundable under the TCJA over the next several years. These provisional amounts are included as components of provision for (benefit from) income taxes as reported in our consolidated statements of operations and comprehensive income. The income tax provision this quarter includes the Company’s provisional expense of $ 13.1 million related to the one-time transition tax on earnings of certain foreign subsidiaries that were previously tax-deferred, partially offset by a provisional benefit of $2.0 million related to uncertain tax positions impacted by the Company’s foreign earnings and profits, for a net provisional tax expense in the quarter ended April 1, 2018 of $11.1 million . The one-time transition tax is based on the total post-1986 earnings and profits ("E&P") of our foreign subsidiaries. Substantially all our E&P was permanently reinvested outside the U.S. prior to the TCJA. At December 31, 2017, we were still in the process of analyzing the E&P and tax pools of our foreign subsidiaries, particularly with regards to subsidiaries from recent acquisitions, to reasonably estimate the effects of the one-time transition tax and, therefore, did not record a provisional impact. During the quarter ended April 1, 2018 we made sufficient progress in determining our E&P and tax pools to be able to provide a provisional estimate of the impact of the one-time transition tax. The provisional impact of the one-time transition tax is subject to future measurement period adjustments in accordance with SAB 118. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations. We have not recorded provisional amounts for other aspects of the TCJA, including the potential impact of items effective beginning after this fiscal year and continue to account for those items based on our existing accounting under ASC 740 and the provisions of the tax laws that were in effect immediately prior to the TCJA's enactment. We are still evaluating how the TCJA impacts the valuation allowance on our federal and state deferred tax assets. Further, we anticipate the Department of the Treasury, FASB and other regulators to release additional guidance and authority that could affect our accounting for the tax effects of enactment of the TCJA including the provisional impacts we have recorded to date. We file U.S. federal, state, and foreign income tax returns in jurisdictions with varying statutes of limitations. Fiscal years 2007 through 2016 generally remain subject to examination by federal and most state tax authorities and in significant foreign jurisdictions. Each quarter, we reassess our uncertain tax positions for additional unrecognized tax benefits, interest and penalties, and deletions due to statute expirations. Based on federal, state and foreign statute expirations in various jurisdictions, we anticipate a potential decrease in unrecognized tax benefits of approximately $1.0 million within the next twelve months. We establish liabilities for possible assessments by tax authorities resulting from known tax exposures including, but not limited to, international tax issues and certain tax credits. The Internal Revenue Service ("IRS") is currently examining our income tax returns for tax years 2007 through 2014 and the Canada Revenue Agency ("CRA") is currently examining income tax returns for tax years 2007 through 2008 and 2011 through 2015 . As of April 1, 2018 , the IRS and the CRA have raised questions primarily related to transfer pricing. We believe that our position is appropriate and that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in our tax audits are resolved in a manner not consistent with our expectations, we would be required to adjust our provision for income tax in the period such resolution occurs. While we believe our reported results are appropriate, any significant adjustments could have a material adverse effect on our results of operations, cash flows and financial position if not resolved within our expectations. |
Debt
Debt | 6 Months Ended |
Apr. 01, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Credit Agreement In November 2017, we entered into Amendment No. 4 ("Amendment No. 4") to our Credit Agreement dated as of January 15, 2016 (as amended and supplemented, the "Credit Agreement") with Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, the other agents party thereto and the lenders referred to therein. Amendment No. 4 provides for, among other things, new pricing terms for the term loan B facility. As of April 1, 2018 , all loans under the Credit Agreement were Eurodollar Rate loans and the principal amounts outstanding and applicable interest rate information as of this date were as follows: Principal Outstanding Base Rate Base Rate Margin Eurodollar Rate Margin Applicable Rate Revolving Facility $ 100.0 3.75 % 0.75 % 1.75 % 3.49 % Term Loan A Facility $ 737.4 3.75 % 0.75 % 1.75 % 3.42 % Term Loan B Facility $ 794.7 3.75 % 1.00 % 2.00 % 3.74 % As of April 1, 2018 , the fair value of principal outstanding under the Credit Agreement was $1.6 billion . We classify this valuation as a Level 2 fair value measurement. The obligations under the Credit Agreement are collateralized by a lien on substantially all of our personal property and material real property assets, subject in each case to certain customary exceptions. Debt issuance costs recorded as a reduction to principal outstanding in the consolidated balance sheets were $29.5 million as of April 1, 2018 and $35.1 million as of October 1, 2017 . Our Credit Agreement contains financial covenants including a maximum consolidated net leverage ratio and minimum fixed charge coverage ratio and also contains other customary affirmative and negative covenants and events of default. We were in compliance with our covenants as of April 1, 2018 . Senior Unsecured Notes In January 2016, we completed the sale of $450.0 million of our 9.125% senior unsecured notes due April 2023 (the " Notes " ) to qualified institutional buyers and pursuant to Regulation S in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended. The Notes were issued under an indenture, dated January 15, 2016, among Microsemi, the subsidiaries of Microsemi party thereto as note guarantors, and U.S. Bank National Association, as trustee (the " Indenture " ). In May 2017, we repurchased a portion of our Notes with an aggregate principal amount of $170.8 million for a purchase price of $201.7 million , including accrued interest. This resulted in a loss on extinguishment of debt in fiscal year 2017 of $32.5 million , including the associated unamortized financing costs. As of April 1, 2018 , the principal outstanding on the Notes was $279.2 million and the fair value of principal outstanding was $309.6 million . We classify this valuation as a Level 1 fair value measurement. The Notes accrue cash interest at a rate of 9.125% per year, payable semi-annually on April 15 and October 15. The Notes mature on April 15, 2023. We may redeem the Notes, and the holders of the Notes may require us to repurchase the Notes, prior to the date of maturity in certain circumstances pursuant to the terms and conditions of the Indenture. The Indenture contains customary affirmative and negative covenants and events of default. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Apr. 01, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock-Based Compensation In February 2016, our stockholders approved amendments to the Microsemi Corporation 2008 Performance Incentive Plan (the "2008 Plan"). The amendments a) increased the share limit by approximately an additional 4.8 million shares so that the amended aggregate share limit for the 2008 Plan is approximately 41.8 million shares; b) extended the term of the 2008 Plan to December 2, 2025; c) limited the grant date value of awards that may be granted to non-employee directors under the 2008 Plan during any one calendar year to $0.4 million (or $0.6 million as to any newly elected or appointed non-employee director or a non-employee director serving as chairman of the Board or lead independent director); and d) extended the Company's authority to grant awards under the 2008 Plan intended to qualify as "performance-based awards" within the meaning of Section 162(m) of the U.S. Internal Revenue Code through the first annual meeting of stockholders that occurs in 2021. For every one share issued in connection with a full value award (as defined in the 2008 Plan), 2.41 shares will be counted against the share limit. Except as described in this paragraph, shares that are subject to or underlie awards which expire or for any reason, are canceled or terminated, are forfeited, fail to vest, or for any other reason are not paid or delivered under the 2008 Plan will again be available for subsequent awards under the 2008 Plan. Shares exchanged by a participant or withheld by the Company as full or partial payment in connection with any award granted under the 2008 Plan that is a full-value award, as well as any shares exchanged by a participant or withheld by the Company or one of its subsidiaries to satisfy the tax withholding obligations related to any full-value award granted under the 2008 Plan will be available for subsequent awards under the 2008 Plan. Shares exchanged by a participant or withheld by the Company to pay the exercise price of a stock option or stock appreciation right granted under the 2008 Plan, as well as any shares exchanged or withheld to satisfy the tax withholding obligations related to any such award, will not be available for subsequent awards under the 2008 Plan. Tax withholding obligations are established at the statutory minimum requirements for any shares exchanged or withheld. Awards authorized by the 2008 Plan include options, stock appreciation rights, restricted stock, stock bonuses, stock units, performance share awards, and other cash or share-based awards. The shares issued under the 2008 Plan may be newly issued or shares held by Microsemi as treasury stock. The maximum term of a stock option grant or a stock appreciation right granted under the 2008 Plan is 6 years . For the quarter and six months ended April 1, 2018 , stock-based compensation expense was $26.1 million and $51.7 million , respectively. For the quarter and six months ended April 2, 2017 , stock-based compensation expense was $15.6 million and $43.9 million , respectively. The quantity of restricted shares and performance stock units at target levels granted and their weighted-average fair value are as follows (quantity in millions): Six Months Ended Quantity Weighted-Average Fair Value per Award April 2, 2017 Restricted shares 1.1 $ 45.10 Performance stock units 0.2 $ 42.65 April 1, 2018 Restricted shares 1.5 $ 54.07 Performance stock units 0.5 $ 48.99 Restricted Shares Compensation expense for restricted shares was calculated based on the closing price of Company Stock on the date of grant and the restricted shares are subject to forfeiture if a participant does not meet length of service requirements. Restricted stock awards granted to employees typically vest over a three -year period and awards granted to non-employee directors vest in accordance with our director compensation policy. Stock Units with Performance and Market Conditions Compensation expense for performance stock units with performance and market conditions was calculated based upon expected achievement of the performance metrics specified in the grant and the closing price of our Company Stock on the date of grant, or when a grant contains a market condition, the grant date fair value using a Monte Carlo simulation which incorporates estimates of the potential outcomes of the market condition on the fair value date of each award. Performance units with performance and market conditions are eligible to vest based on our rate of growth for net sales and earnings per share (subject to certain adjustments) relative to the growth rates for that metric over the relevant performance period for a peer group of companies. The performance period for each grant is over three fiscal years and portion of the performance units may vest based on performance after each fiscal year of the performance period. For the 2016, 2017 and 2018 grants, 70% of each performance-based award opportunity is subject to the net sales metric for the performance period and 30% is subject to the earnings per share metric for the performance period. The maximum percentage for a particular metric is 225% of the "target" number of units subject to the award related to that metric. For the 2016 and 2017 grants, the maximum percentage is further adjusted by our total shareholder return relative to a peer group selected by the Compensation Committee. The maximum adjustment is 120% . For the 2018 grants, the maximum percentage is further adjusted based on total shareholder return on absolute revenue growth metrics. The maximum adjustment is 125% . In July 2016, the Compensation Committee of the Board of Directors of the Company approved a long-term incentive equity award for our chief executive officer consisting of 1,000,000 RSUs awarded under the Company’s 2008 Plan. Under the award agreement, the vesting of the RSUs is contingent on the Company’s stock price achieving specified levels during the five -year period after the date of grant of the award (the "performance period") as follows: Stock Price Level Percentage of Total Award That Vests $50.00 25% $60.00 50% $70.00 25% For a stock price level to be considered achieved, the closing price of the Company Stock (together with any dividends paid on a share of the Company Stock after the grant date of the award) must equal or exceed that level for a period of at least 20 consecutive trading days. A stock price level will also be considered achieved if, during the performance period, a change in control of the Company occurs after which the Company does not survive as a public company (a "Sale of the Company") and the per-share price of the Company Stock in the Sale of the Company (together with any dividends paid on a share of the Company Stock after the grant date of the award) equals or exceeds that level. In each case, the vesting of the award is subject to our chief executive officer's continued employment with the Company through the date the applicable stock price level is met. The first tranche of this award (corresponding to a stock price level of $50.00 per share for a period of 20 consecutive days) vested on December 9, 2016. The second tranche of this award (corresponding to a stock price level of $60.00 per share for a period of 20 consecutive days) vested on March 14, 2018. The award is also eligible to vest in connection with certain "acceleration events" as described below. If, during the first year of the performance period, an acceleration event occurs and the award has not yet vested as to at least 160,000 RSUs, the award will accelerate on the event to the extent necessary so that 160,000 RSUs are vested on the event. If an acceleration event occurs during the performance period but after the first year of the performance period and the award has not yet vested as to at least 320,000 RSUs, the award will generally accelerate on the occurrence of the event to the extent necessary so that 320,000 RSUs are vested upon such event. If, however, an acceleration event occurs during the performance period but after the first year of the performance period, and the award has not yet vested as to at least 500,000 RSUs and the average closing price of the Company Stock for the period of 20 consecutive trading days ending with the date of the acceleration event (or, in the case of an acceleration event that is a Sale of the Company, the per-share sale price of the Company Stock, and in each case together with any dividends paid on a share of the Company Stock after the grant date) equals or exceeds $50.00 , the award will accelerate on occurrence of the event to the extent necessary so that 500,000 RSUs are vested upon such event. For these purposes, an "acceleration event" is either a change in control of the Company (whether or not the transaction constitutes a Sale of the Company) or a termination of our chief executive officer's employment by the Company without cause, by our chief executive officer for good reason or as a result of our chief executive officer's death or disability (as such terms are defined in the award agreement). In no event will the award vest as to more than 100% of the RSUs subject to the award (with the RSUs under the award being subject in each case to customary adjustments for stock splits and similar events). |
Segment Information
Segment Information | 6 Months Ended |
Apr. 01, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We manage our business on the basis of one reportable segment, as a manufacturer of semiconductors in different geographic areas, including the United States, Europe and Asia. We derive revenue from sales of our high-performance analog/mixed-signal integrated circuits and power and high-reliability individual component semiconductors. These products include individual components as well as integrated circuit solutions that enhance customer designs by improving performance, reliability and battery optimization, reducing size or protecting circuits. As a percentage of consolidated net sales, sales to customers with a ship-to location in Hong Kong totaled 18% for the quarter and six months ended April 1, 2018 , and 17% and 18% for the quarter and six months ended April 2, 2017 , respectively. |
Restructuring and Severance Cha
Restructuring and Severance Charges | 6 Months Ended |
Apr. 01, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Severance Charges | Restructuring and Severance Charges The following table reflects restructuring activities and the accrued liabilities at the dates below: Employee Severance Contract Termination Costs Other Associated Costs Total Balance at October 1, 2017 $ 8.5 $ 8.4 $ 1.7 $ 18.6 Provisions 7.4 0.8 0.9 9.1 Reversal/adjustment of prior provision — (0.2 ) (0.3 ) (0.5 ) Cash expenditures (10.3 ) (2.4 ) (0.1 ) (12.8 ) Other non-cash settlement — (0.8 ) (1.2 ) (2.0 ) Balance at April 1, 2018 $ 5.6 $ 5.8 $ 1.0 $ 12.4 We recorded provisions for employee severance of $7.4 million for the six months ended April 1, 2018 . Employee severance covered individuals in engineering, manufacturing, administration and sales and is expected to be paid within the next twelve months . We recorded net provisions for contract termination costs of $0.6 million for the six months ended April 1, 2018 , primarily for the fair value at the cease-use date of operating lease liabilities for space we have exited. Facilities consisted of manufacturing sites, as well as sales, engineering and administrative space. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Apr. 01, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We are generally self-insured for losses and liabilities related to certain employee medical, workers’ compensation and employer’s liability insurance. Our self-insurance liabilities were $2.4 million and $1.6 million at April 1, 2018 and October 1, 2017 , respectively. Our self-insurance liabilities are based on estimates and, while we believe that the amounts accrued are adequate, the ultimate claims may be in excess of the amounts provided. We are involved in pending litigation, administrative and similar matters arising out of the normal conduct of our business, including litigation relating to acquisitions, employment matters, commercial transactions, contracts, environmental matters and matters related to compliance with governmental regulations. The ultimate aggregate amount of monetary liability or financial impact with respect to these matters is subject to many uncertainties and is therefore not predictable with assurance. In the opinion of management, the final outcome of these matters, if they are adverse, will not have a material adverse effect on our financial position, results of operations or cash flows. However, there can be no assurance with respect to such result, and monetary liability, financial impact or other sanctions imposed on us from these matters could differ materially from those projected. |
Presentation of Financial Inf16
Presentation of Financial Information (Policies) | 6 Months Ended |
Apr. 01, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share have been computed based upon the weighted-average number of common shares outstanding during the respective periods. Diluted earnings per share have been computed, when the result is dilutive, using the treasury stock method for stock awards outstanding during the respective periods. Earnings per share were calculated as follows: |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09 which provides guidance on how an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Entity expects to be entitled in exchange for those goods or services and on accounting for costs to obtain or fulfill a contract with a customer. The ASU also requires expanded disclosure regarding the nature, amount, timing and uncertainty of revenue that is recognized. In July 2015, the FASB decided to delay the effective date of this ASU by one year. This ASU, as amended, will be effective for the Company beginning in the first quarter of fiscal 2019 and can be adopted either full retrospective or modified retrospective with the cumulative effect recognized as of the date of adoption. Early adoption is permitted, but no earlier than fiscal 2018. We intend to adopt this ASU on a modified retrospective basis in the first quarter of fiscal 2019. We are still in the process of finalizing our analysis on the impact of the provisions of the new standards. Our assessment process consists of reviewing our current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to our revenue contracts and identifying appropriate changes to our business processes, systems and controls to support revenue recognition and disclosure requirements under the new standard. Based on our preliminary assessments, we do not expect the new guidance to have a material impact on the nature, amount, and timing of our revenue recognition. As we continue to assess the impact of the new guidance on our revenue contracts with our customers and finalize our evaluation of any changes to our accounting policies, internal controls and footnote disclosures, we may identify additional areas of impact and may revise the results of our preliminary assessment. The FASB since issued additional updates of its new standard on revenue recognition issued in May 2014. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606) - Principal versus Agent Considerations, which clarifies the implementation guidance for principal versus agent considerations in ASU 2014-09. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing, which amends the guidance in ASU 2014-09 related to identifying performance obligations and accounting for licenses of intellectual property. We are currently assessing the adoption and impact of these ASUs on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which modified lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosing key information about leasing arrangements. This ASU will be effective for us beginning in the first quarter of 2020 on a modified retrospective basis. Early adoption is permitted. We are currently evaluating the impact of adopting the new lease standard on our consolidated financial statements. |
Presentation of Financial Inf17
Presentation of Financial Information (Tables) | 6 Months Ended |
Apr. 01, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Earnings Per Share | Earnings per share were calculated as follows: Quarter Ended Six Months Ended April 1, April 2, April 1, April 2, Basic Net income $ 12.3 $ 41.2 $ 60.2 $ 60.6 Weighted-average common shares outstanding 117.4 114.7 117.2 114.4 Basic earnings per share $ 0.10 $ 0.36 $ 0.51 $ 0.53 Diluted Net income $ 12.3 $ 41.2 $ 60.2 $ 60.6 Weighted-average common shares outstanding for basic 117.4 114.7 117.2 114.4 Dilutive effect of stock awards 2.2 2.3 2.1 2.2 Weighted-average common shares outstanding on a diluted basis 119.6 117.0 119.3 116.6 Diluted earnings per share $ 0.10 $ 0.35 $ 0.50 $ 0.52 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Apr. 01, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories are summarized as follows: April 1, October 1, Raw materials $ 55.3 $ 42.5 Work in process 130.3 120.6 Finished goods 80.0 76.0 $ 265.6 $ 239.1 |
Goodwill and Intangible Asset19
Goodwill and Intangible Assets, Net (Tables) | 6 Months Ended |
Apr. 01, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and intangible assets, net consisted of the following components: April 1, October 1, Amortizable intangible assets Completed technology $ 627.2 $ 670.9 Customer relationships 69.5 73.8 Backlog, trade name and other 1.9 0.6 $ 698.6 $ 745.3 Non-amortizable intangible assets Goodwill $ 2,538.4 $ 2,497.3 In-process research and development $ — $ 7.0 |
Schedule of Goodwill | A reconciliation of goodwill for the six months ended April 1, 2018 is as follows: Balance as of October 1, 2017 $ 2,497.3 Additions from acquisitions 41.1 Balance as of April 1, 2018 $ 2,538.4 |
Amortization of Intangible Assets | Amortization of intangible assets included in operating expenses is as follows: Quarter Ended Six Months Ended April 1, April 2, April 1, April 2, Completed technology $ 38.9 $ 34.5 $ 77.3 $ 66.2 Customer relationships 3.0 11.7 7.6 23.7 Backlog, trade name and other 0.3 0.3 7.5 2.2 $ 42.2 $ 46.5 $ 92.4 $ 92.1 |
Estimated Amortization Expense | Estimated amortization expense for amortizable intangible assets in each of the five succeeding years and thereafter is as follows: Less than 1 Year 1-2 Years 2-3 Years 3-4 Years 4-5 Years Thereafter $ 160.2 $ 146.9 $ 144.8 $ 128.8 $ 51.1 $ 66.8 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Apr. 01, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | s of April 1, 2018 , all loans under the Credit Agreement were Eurodollar Rate loans and the principal amounts outstanding and applicable interest rate information as of this date were as follows: Principal Outstanding Base Rate Base Rate Margin Eurodollar Rate Margin Applicable Rate Revolving Facility $ 100.0 3.75 % 0.75 % 1.75 % 3.49 % Term Loan A Facility $ 737.4 3.75 % 0.75 % 1.75 % 3.42 % Term Loan B Facility $ 794.7 3.75 % 1.00 % 2.00 % 3.74 % |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Apr. 01, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Restricted Shares and Performance Stock Units | The quantity of restricted shares and performance stock units at target levels granted and their weighted-average fair value are as follows (quantity in millions): Six Months Ended Quantity Weighted-Average Fair Value per Award April 2, 2017 Restricted shares 1.1 $ 45.10 Performance stock units 0.2 $ 42.65 April 1, 2018 Restricted shares 1.5 $ 54.07 Performance stock units 0.5 $ 48.99 |
Schedule Of Share-Based Compensation, Vesting And Performance Achievements | Under the award agreement, the vesting of the RSUs is contingent on the Company’s stock price achieving specified levels during the five -year period after the date of grant of the award (the "performance period") as follows: Stock Price Level Percentage of Total Award That Vests $50.00 25% $60.00 50% $70.00 25% |
Restructuring and Severance C22
Restructuring and Severance Charges (Tables) | 6 Months Ended |
Apr. 01, 2018 | |
Restructuring and Related Activities [Abstract] | |
Reflects the restructuring activities and the accrued liabilities | The following table reflects restructuring activities and the accrued liabilities at the dates below: Employee Severance Contract Termination Costs Other Associated Costs Total Balance at October 1, 2017 $ 8.5 $ 8.4 $ 1.7 $ 18.6 Provisions 7.4 0.8 0.9 9.1 Reversal/adjustment of prior provision — (0.2 ) (0.3 ) (0.5 ) Cash expenditures (10.3 ) (2.4 ) (0.1 ) (12.8 ) Other non-cash settlement — (0.8 ) (1.2 ) (2.0 ) Balance at April 1, 2018 $ 5.6 $ 5.8 $ 1.0 $ 12.4 |
Presentation of Financial Inf23
Presentation of Financial Information - Earning Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 01, 2018 | Apr. 02, 2017 | Apr. 01, 2018 | Apr. 02, 2017 | |
BASIC | ||||
Net income | $ 12.3 | $ 41.2 | $ 60.2 | $ 60.6 |
Weighted-average common shares outstanding (in shares) | 117.4 | 114.7 | 117.2 | 114.4 |
Basic earnings (loss) per share (USD per share) | $ 0.10 | $ 0.36 | $ 0.51 | $ 0.53 |
DILUTED | ||||
Net income | $ 12.3 | $ 41.2 | $ 60.2 | $ 60.6 |
Weighted-average common shares outstanding (in shares) | 117.4 | 114.7 | 117.2 | 114.4 |
Dilutive effect of stock awards | 2.2 | 2.3 | 2.1 | 2.2 |
Weighted-average common shares outstanding on a diluted basis (in shares) | 119.6 | 117 | 119.3 | 116.6 |
Diluted earnings per share (USD per share) | $ 0.10 | $ 0.35 | $ 0.50 | $ 0.52 |
Stock awards excluded in computation of diluted EPS | 0.2 |
Pending Acquisition (Details)
Pending Acquisition (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 01, 2018 | Apr. 01, 2018 | Oct. 01, 2017 |
Business Acquisition [Line Items] | |||
Common stock, par value (USD per share) | $ 0.20 | $ 0.20 | |
Maple Acquisition Corporation | |||
Business Acquisition [Line Items] | |||
Common stock, par value (USD per share) | $ 0.20 | ||
Amount received (USD per share) | $ 68.78 | ||
Termination fee | $ 290 | ||
Reimbursement of expenses | $ 35 | ||
Acquisition related costs | $ 14.8 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Apr. 01, 2018 | Oct. 01, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 55.3 | $ 42.5 |
Work in process | 130.3 | 120.6 |
Finished goods | 80 | 76 |
Inventories, net | $ 265.6 | $ 239.1 |
Goodwill and Intangible Asset26
Goodwill and Intangible Assets, Net - Components and Reconciliation of Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Apr. 01, 2018 | Apr. 02, 2017 | Apr. 01, 2018 | Apr. 02, 2017 | Apr. 01, 2018 | Oct. 01, 2017 | |
Goodwill and Intangible Assets Disclosure [Line Items] | ||||||
Amortizable intangible assets | $ 698.6 | $ 745.3 | ||||
Goodwill | $ 2,538.4 | $ 2,497.3 | 2,538.4 | 2,497.3 | ||
Goodwill [Roll Forward] | ||||||
Balance as of October 1, 2017 | 2,497.3 | |||||
Additions from acquisitions | 41.1 | |||||
Balance as of April 1, 2018 | 2,538.4 | 2,538.4 | ||||
Amortization of intangible assets | 42.2 | $ 46.5 | 92.4 | $ 92.1 | ||
Completed technology | ||||||
Goodwill and Intangible Assets Disclosure [Line Items] | ||||||
Amortizable intangible assets | 627.2 | 670.9 | ||||
Goodwill [Roll Forward] | ||||||
Amortization of intangible assets | 38.9 | 34.5 | 77.3 | 66.2 | ||
Customer relationships | ||||||
Goodwill and Intangible Assets Disclosure [Line Items] | ||||||
Amortizable intangible assets | 69.5 | 73.8 | ||||
Goodwill [Roll Forward] | ||||||
Amortization of intangible assets | 3 | 11.7 | 7.6 | 23.7 | ||
Backlog, trade name and other | ||||||
Goodwill and Intangible Assets Disclosure [Line Items] | ||||||
Amortizable intangible assets | 1.9 | 0.6 | ||||
Goodwill [Roll Forward] | ||||||
Amortization of intangible assets | $ 0.3 | $ 0.3 | $ 7.5 | $ 2.2 | ||
In-process research and development | ||||||
Goodwill and Intangible Assets Disclosure [Line Items] | ||||||
Non-amortizable intangible assets | $ 0 | $ 7 |
Goodwill and Intangible Asset27
Goodwill and Intangible Assets, Net - Estimated Amortization Expense (Details) $ in Millions | Apr. 01, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Amortization expense, Less than 1 Year | $ 160.2 |
Amortization expense, 1-2 Years | 146.9 |
Amortization expense, 2-3 Years | 144.8 |
Amortization expense, 3-4 Years | 128.8 |
Amortization expense, 4-5 Years | 51.1 |
Amortization expense, Thereafter | $ 66.8 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Apr. 01, 2018 | Dec. 31, 2017 | Apr. 02, 2017 | Apr. 01, 2018 | Apr. 02, 2017 | Sep. 30, 2018 | |
Income Taxes [Line Items] | ||||||
Provision for income taxes | $ 15.6 | $ 1.7 | $ 2 | $ 10.9 | ||
Provisional Income Tax Expense (Benefit) | 11.1 | $ (12.4) | ||||
Alternative minimum tax credits | 11.8 | |||||
Provisional income tax expense in earnings of certain foreign subsidiaries | 13.1 | |||||
Uncertain tax positions | 2 | 2 | ||||
Unrecognized tax benefit that would impact effective tax rate within next twelve months | $ 1 | $ 1 | ||||
Minimum | Internal Revenue Service (IRS) | ||||||
Income Taxes [Line Items] | ||||||
Open tax years by major tax jurisdiction | 2,007 | |||||
Maximum | Internal Revenue Service (IRS) | ||||||
Income Taxes [Line Items] | ||||||
Open tax years by major tax jurisdiction | 2,016 | |||||
Forecast | ||||||
Income Taxes [Line Items] | ||||||
U.S. statutory rate | 24.50% |
Debt (Details)
Debt (Details) - USD ($) | Nov. 21, 2017 | May 25, 2017 | Apr. 03, 2016 | Apr. 01, 2018 | Oct. 01, 2017 | Jan. 15, 2016 |
Line of Credit Facility [Line Items] | ||||||
Principal Outstanding | $ 1,600,000,000 | |||||
Debt issuance cost | 29,500,000 | $ 35,100,000 | ||||
Revolving Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Principal Outstanding | $ 100,000,000 | |||||
Applicable Rate | 3.49% | |||||
Revolving Facility | Base Rate | ||||||
Line of Credit Facility [Line Items] | ||||||
Base Rate | 3.75% | |||||
Rate Margins | 0.75% | |||||
Revolving Facility | Eurodollar | ||||||
Line of Credit Facility [Line Items] | ||||||
Rate Margins | 1.75% | |||||
Term Loan A Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Principal Outstanding | $ 737,400,000 | |||||
Applicable Rate | 3.42% | |||||
Term Loan A Facility | Base Rate | ||||||
Line of Credit Facility [Line Items] | ||||||
Base Rate | 3.75% | |||||
Rate Margins | 0.75% | |||||
Term Loan A Facility | Eurodollar | ||||||
Line of Credit Facility [Line Items] | ||||||
Rate Margins | 1.75% | |||||
Term Loan B Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Principal Outstanding | $ 794,700,000 | |||||
Applicable Rate | 3.74% | |||||
Term Loan B Facility | Base Rate | ||||||
Line of Credit Facility [Line Items] | ||||||
Base Rate | 3.75% | |||||
Rate Margins | 1.00% | |||||
Term Loan B Facility | Eurodollar | ||||||
Line of Credit Facility [Line Items] | ||||||
Rate Margins | 2.00% | |||||
Unsecured note | ||||||
Line of Credit Facility [Line Items] | ||||||
Principal Outstanding | $ 279,200,000 | |||||
Base Rate | 9.125% | |||||
Face amount | $ 170,800,000 | $ 450,000,000 | ||||
Repurchase amount | 201,700,000 | |||||
Fair value of principal outstanding | $ 309,600,000 | |||||
Gain (loss) on extinguishment of debt | $ (32,500,000) |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Jul. 31, 2016$ / sharesshares | Feb. 28, 2016USD ($)shares | Apr. 01, 2018USD ($) | Apr. 02, 2017USD ($) | Apr. 01, 2018USD ($) | Apr. 02, 2017USD ($) | Jun. 28, 2015 | |
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||||
Stock-based compensation expense | $ | $ 26,100,000 | $ 15,600,000 | $ 51,700,000 | $ 43,900,000 | |||
Restricted shares | |||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||||
Vesting period | 3 years | ||||||
Performance stock units | |||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||||
Vesting period | 3 years | ||||||
Vesting percentage relative to net sales | 70.00% | ||||||
Vesting percentage relative to earnings per share | 30.00% | ||||||
Performance based compensation percentage, target based | 225.00% | ||||||
Performance based compensation, peer group based | 125.00% | 120.00% | |||||
Stock Option Plan 2008 | |||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||||
Additional shares to the shares limit in common stock | 4,800,000 | ||||||
Shares limit in common stock | 41,800,000 | ||||||
Full value award of shares issued for every one share | 2.41 | ||||||
Maximum term of a stock option grant or a stock appreciation right grant | 6 years | ||||||
Stock Option Plan 2008 | Director, non-employee | |||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||||
Limit of grant date value of award to be granted | $ | $ 400,000 | ||||||
Stock Option Plan 2008 | Board of Directors Chairman, non-employee | |||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||||
Limit of grant date value of award to be granted | $ | $ 600,000 | ||||||
2008 Performance Incentive Plan | Restricted Stock Units (RSUs) | |||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||||
Vesting period | 5 years | ||||||
Number of shares authorized | 1,000,000 | ||||||
Threshold number of trading days | 20 days | ||||||
Stock price level | $ / shares | $ 50 | ||||||
Percentage of total award that vests | 100.00% | ||||||
2008 Performance Incentive Plan | Restricted Stock Units (RSUs) | Performance Level One | |||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||||
Accelerated vesting, number of units | 160,000 | ||||||
Stock price level | $ / shares | $ 50 | ||||||
Percentage of total award that vests | 25.00% | ||||||
2008 Performance Incentive Plan | Restricted Stock Units (RSUs) | Performance Level Two | |||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||||
Accelerated vesting, number of units | 320,000 | ||||||
Stock price level | $ / shares | $ 60 | ||||||
Percentage of total award that vests | 50.00% | ||||||
2008 Performance Incentive Plan | Restricted Stock Units (RSUs) | Performance Level Three | |||||||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | |||||||
Accelerated vesting, number of units | 500,000 | ||||||
Stock price level | $ / shares | $ 70 | ||||||
Percentage of total award that vests | 25.00% |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Restricted Shares and Performance Stock Units (Details) - $ / shares shares in Millions | Apr. 01, 2018 | Apr. 02, 2017 |
Restricted shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Quantity | 1.5 | 1.1 |
Weighted average fair value per award (USD per award) | $ 54.07 | $ 45.10 |
Performance stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Quantity | 0.5 | 0.2 |
Weighted average fair value per award (USD per award) | $ 48.99 | $ 42.65 |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Incentive Plan Vesting Levels (Details) - $ / shares | 1 Months Ended | 6 Months Ended | |
Jul. 31, 2016 | Apr. 01, 2018 | Apr. 02, 2017 | |
Performance stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance based compensation, peer group based | 125.00% | 120.00% | |
2008 Performance Incentive Plan | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock Price Level | $ 50 | ||
Percentage of Total Award That Vests | 100.00% | ||
2008 Performance Incentive Plan | Restricted Stock Units (RSUs) | Performance Level One | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock Price Level | $ 50 | ||
Percentage of Total Award That Vests | 25.00% | ||
2008 Performance Incentive Plan | Restricted Stock Units (RSUs) | Performance Level Two | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock Price Level | $ 60 | ||
Percentage of Total Award That Vests | 50.00% | ||
2008 Performance Incentive Plan | Restricted Stock Units (RSUs) | Performance Level Three | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock Price Level | $ 70 | ||
Percentage of Total Award That Vests | 25.00% |
Segment Information (Details)
Segment Information (Details) - segment | 3 Months Ended | 6 Months Ended | ||
Apr. 01, 2018 | Apr. 02, 2017 | Apr. 01, 2018 | Apr. 02, 2017 | |
Segment Reporting [Abstract] | ||||
Number of segments | 1 | |||
Geographic concentration risk | Sales revenue, net | Hong Kong | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 18.00% | 17.00% | 18.00% | 18.00% |
Restructuring and Severance C34
Restructuring and Severance Charges - Restructuring Activities and Accrued Liabilities (Details) $ in Millions | 6 Months Ended |
Apr. 01, 2018USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | $ 18.6 |
Provisions | 9.1 |
Reversal/adjustment of prior provision | (0.5) |
Cash expenditures | (12.8) |
Other non-cash settlement | (2) |
Ending Balance | 12.4 |
Employee Severance | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 8.5 |
Provisions | 7.4 |
Reversal/adjustment of prior provision | 0 |
Cash expenditures | (10.3) |
Other non-cash settlement | 0 |
Ending Balance | 5.6 |
Contract Termination Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 8.4 |
Provisions | 0.8 |
Reversal/adjustment of prior provision | (0.2) |
Cash expenditures | (2.4) |
Other non-cash settlement | (0.8) |
Ending Balance | 5.8 |
Other Associated Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 1.7 |
Provisions | 0.9 |
Reversal/adjustment of prior provision | (0.3) |
Cash expenditures | (0.1) |
Other non-cash settlement | (1.2) |
Ending Balance | $ 1 |
Restructuring and Severance C35
Restructuring and Severance Charges - Additional Information (Details) $ in Millions | 6 Months Ended |
Apr. 01, 2018USD ($) | |
Employee Severance | |
Restructuring Cost and Reserve [Line Items] | |
Net provisions | $ 7.4 |
Contract Termination Costs | |
Restructuring Cost and Reserve [Line Items] | |
Net provisions | $ 0.6 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Apr. 01, 2018 | Oct. 01, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||
Accrued workers' compensation liabilities | $ 2.4 | $ 1.6 |