Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | ||
Mar. 30, 2014 | 5-May-14 | 5-May-14 | |
Class A common stock | Class B common stock | ||
Entity Registrant Name | 'WATTS WATER TECHNOLOGIES INC | ' | ' |
Entity Central Index Key | '0000795403 | ' | ' |
Document Type | '10-Q | ' | ' |
Document Period End Date | 30-Mar-14 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 28,682,611 | 6,489,290 |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'Q1 | ' | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
CURRENT ASSETS: | ' | ' |
Cash and cash equivalents | $225 | $267.90 |
Trade accounts receivable, less allowance for doubtful accounts of $9.7 million at March 30, 2014 and December 31, 2013 | 224 | 212.9 |
Inventories, net: | ' | ' |
Raw materials | 113.5 | 111.3 |
Work in process | 18.7 | 19.1 |
Finished goods | 191.6 | 179.8 |
Total Inventories | 323.8 | 310.2 |
Prepaid expenses and other assets | 36.9 | 35 |
Deferred income taxes | 28.1 | 29.8 |
Asset held for sale | 1.3 | 1.3 |
Total Current Assets | 839.1 | 857.1 |
PROPERTY, PLANT AND EQUIPMENT: | ' | ' |
Property, plant and equipment, at cost | 542.5 | 539.2 |
Accumulated depreciation | -326.5 | -319.3 |
Property, plant and equipment, net | 216 | 219.9 |
OTHER ASSETS: | ' | ' |
Goodwill | 513.9 | 514.8 |
Intangible assets, net | 128.2 | 132.4 |
Deferred income taxes | 4.3 | 3.8 |
Other, net | 13.7 | 12.2 |
TOTAL ASSETS | 1,715.20 | 1,740.20 |
CURRENT LIABILITIES: | ' | ' |
Accounts payable | 125.2 | 145.6 |
Accrued expenses and other liabilities | 136.8 | 135.2 |
Accrued compensation and benefits | 42.8 | 43.9 |
Current portion of long-term debt | 2.2 | 2.2 |
Total Current Liabilities | 307 | 326.9 |
LONG-TERM DEBT, NET OF CURRENT PORTION | 305.1 | 305.5 |
DEFERRED INCOME TAXES | 44.4 | 45.9 |
OTHER NONCURRENT LIABILITIES | 58 | 59.8 |
STOCKHOLDERS' EQUITY: | ' | ' |
Preferred Stock, $0.10 par value; 5,000,000 shares authorized; no shares issued or outstanding | ' | ' |
Additional paid-in capital | 477 | 473.5 |
Retained earnings | 512.3 | 513.1 |
Accumulated other comprehensive income | 7.9 | 12 |
Total Stockholders' Equity | 1,000.70 | 1,002.10 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 1,715.20 | 1,740.20 |
Class A common stock | ' | ' |
STOCKHOLDERS' EQUITY: | ' | ' |
Common Stock | 2.9 | 2.9 |
Class B common stock | ' | ' |
STOCKHOLDERS' EQUITY: | ' | ' |
Common Stock | $0.60 | $0.60 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 30, 2014 | Dec. 31, 2013 |
In Millions, except Share data, unless otherwise specified | ||
Trade accounts receivable, allowance for doubtful accounts (in dollars) | $9.70 | $9.70 |
Preferred Stock, par value (in dollars per share) | $0.10 | $0.10 |
Preferred Stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Class A common stock | ' | ' |
Common Stock, par value (in dollars per share) | $0.10 | $0.10 |
Common Stock, shares authorized | 80,000,000 | 80,000,000 |
Common Stock, votes per share (Number of votes) | 1 | 1 |
Common Stock, issued shares | 28,660,247 | 28,824,779 |
Common Stock, outstanding shares | 28,660,247 | 28,824,779 |
Class B common stock | ' | ' |
Common Stock, par value (in dollars per share) | $0.10 | $0.10 |
Common Stock, shares authorized | 25,000,000 | 25,000,000 |
Common Stock, votes per share (Number of votes) | 10 | 10 |
Common Stock, issued shares | 6,489,290 | 6,489,290 |
Common Stock, outstanding shares | 6,489,290 | 6,489,290 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 30, 2014 | Mar. 31, 2013 |
CONSOLIDATED STATEMENTS OF OPERATIONS | ' | ' |
Net sales | $365.20 | $358.90 |
Cost of goods sold | 231.9 | 230 |
GROSS PROFIT | 133.3 | 128.9 |
Selling, general and administrative expenses | 103.3 | 98.1 |
Restructuring and other charges, net | 4.2 | 2.2 |
OPERATING INCOME | 25.8 | 28.6 |
Other (income) expense: | ' | ' |
Interest income | -0.1 | -0.1 |
Interest expense | 4.9 | 6 |
Other expense, net | 0.4 | ' |
Total other expense | 5.2 | 5.9 |
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 20.6 | 22.7 |
Provision for income taxes | 6.5 | 6.4 |
Net income from continuing operations | 14.1 | 16.3 |
Loss from discontinued operations, net of tax | ' | -0.2 |
NET INCOME | $14.10 | $16.10 |
Net income (loss) per share: | ' | ' |
Continuing operations (in dollars per share) | $0.40 | $0.46 |
Discontinued operations (in dollars per share) | ' | ($0.01) |
NET INCOME (in dollars per share) | $0.40 | $0.45 |
Weighted average number of shares (in shares) | 35.4 | 35.5 |
Net income (loss) per share: | ' | ' |
Continuing operations (in dollars per share) | $0.40 | $0.46 |
Discontinued operations (in dollars per share) | ' | ($0.01) |
NET INCOME (in dollars per share) | $0.40 | $0.45 |
Weighted average number of shares (in shares) | 35.5 | 35.6 |
Dividends per share (in dollars per share) | $0.13 | $0.11 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 30, 2014 | Mar. 31, 2013 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ' | ' |
Net income | $14.10 | $16.10 |
Other comprehensive income, net of tax: | ' | ' |
Foreign currency translation adjustments | -4.3 | -19.9 |
Defined benefit pension plans: | ' | ' |
Amortization of net losses included in net periodic pension cost | 0.2 | 0.2 |
Other comprehensive income, net of tax | -4.1 | -19.7 |
Comprehensive income (loss) | $10 | ($3.60) |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 30, 2014 | Mar. 31, 2013 |
OPERATING ACTIVITIES | ' | ' |
Net income | $14.10 | $16.10 |
Less: (Loss) income from discontinued operations, net of taxes | ' | -0.2 |
Net income from continuing operations | 14.1 | 16.3 |
Adjustments to reconcile net income from continuing operations to net cash provided by continuing operating activities: | ' | ' |
Depreciation | 8.2 | 8.5 |
Amortization of intangibles | 3.7 | 3.7 |
Loss (gain) on disposal and impairment of goodwill, property, plant and equipment and other | 0.1 | -0.1 |
Stock-based compensation | 1.7 | 1.6 |
Deferred income tax benefit | -0.4 | -0.5 |
Changes in operating assets and liabilities, net of effects from business acquisitions and divestures: | ' | ' |
Accounts receivable | -11.8 | -14.1 |
Inventories | -15.3 | -11.8 |
Prepaid expenses and other assets | -1.3 | -5.2 |
Accounts payable, accrued expenses and other liabilities | -17.7 | -0.4 |
Net cash used in continuing operations | -18.7 | -2 |
INVESTING ACTIVITIES | ' | ' |
Additions to property, plant and equipment | -5 | -11 |
Proceeds from the sale of property, plant and equipment | 0.1 | ' |
Net cash used in investing activities | -4.9 | -11 |
FINANCING ACTIVITIES | ' | ' |
Payments of long-term debt | -0.4 | -0.5 |
Payment of capital leases and other | -2.5 | -1.3 |
Proceeds from share transactions under employee stock plans | 0.4 | 1.4 |
Tax benefit of stock awards exercised | 0.5 | 0.5 |
Payments to repurchase common stock | -9.4 | ' |
Debt issue costs | -2 | ' |
Dividends | -4.6 | -3.9 |
Net cash used in financing activities | -18 | -3.8 |
Effect of exchange rate changes on cash and cash equivalents | -1.3 | -3.3 |
Net cash used in operating activities of discontinued operations | ' | -0.2 |
DECREASE IN CASH AND CASH EQUIVALENTS | -42.9 | -20.3 |
Cash and cash equivalents at beginning of year | 267.9 | 271.3 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 225 | 251 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ' | ' |
Issuance of stock under management stock purchase plan | 0.2 | 0.4 |
CASH PAID FOR: | ' | ' |
Interest | 0.3 | 0.6 |
Income taxes | $8 | $10 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Mar. 30, 2014 | |
Basis of Presentation | ' |
Basis of Presentation | ' |
1. Basis of Presentation | |
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included in the Watts Water Technologies, Inc. (the Company) Consolidated Balance Sheet as of March 30, 2014, the Consolidated Statements of Operations for the first quarters ended March 30, 2014 and March 31, 2013, the Consolidated Statements of Comprehensive Income (Loss) for the first quarters ended March 30, 2014 and March 31, 2013, and the Consolidated Statements of Cash Flows for the first quarters ended March 30, 2014 and March 31, 2013. | |
The consolidated balance sheet at December 31, 2013 has been derived from the audited consolidated financial statements at that date. The accounting policies followed by the Company are described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. The financial statements included in this report should be read in conjunction with the consolidated financial statements and notes included in the Annual Report on Form 10-K for the year ended December 31, 2013. Operating results for the interim periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2014. | |
The Company operates on a 52-week fiscal year ending on December 31st. Any quarterly data contained in this Quarterly Report on Form 10-Q generally reflect the results of operations for a 13-week period. |
Accounting_Policies
Accounting Policies | 3 Months Ended | |||||||||||||||||||||||||
Mar. 30, 2014 | ||||||||||||||||||||||||||
Accounting Policies | ' | |||||||||||||||||||||||||
Accounting Policies | ' | |||||||||||||||||||||||||
2. Accounting Policies | ||||||||||||||||||||||||||
Estimates | ||||||||||||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||||||||||||||||||||||||||
Goodwill and Long-Lived Assets | ||||||||||||||||||||||||||
The changes in the carrying amount of goodwill by geographic segment are as follows: | ||||||||||||||||||||||||||
March 30, 2014 | ||||||||||||||||||||||||||
Gross Balance | Accumulated Impairment Losses | Net Goodwill | ||||||||||||||||||||||||
Balance | Acquired | Foreign | Balance | Balance | Impairment | Balance | March 30, | |||||||||||||||||||
January 1, | During | Currency | March 30, | January 1, | Loss | March 30, | 2014 | |||||||||||||||||||
2014 | the | Translation | 2014 | 2014 | During the | 2014 | ||||||||||||||||||||
Period | and Other | Period | ||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Americas | $ | 224.7 | $ | — | $ | (0.4 | ) | $ | 224.3 | $ | (24.5 | ) | $ | — | $ | (24.5 | ) | $ | 199.8 | |||||||
Europe, Middle East and Africa (EMEA) | 301.3 | — | (0.1 | ) | 301.2 | — | — | — | 301.2 | |||||||||||||||||
Asia-Pacific | 13.3 | — | (0.4 | ) | 12.9 | — | — | — | 12.9 | |||||||||||||||||
Total | $ | 539.3 | $ | — | $ | (0.9 | ) | $ | 538.4 | $ | (24.5 | ) | $ | — | $ | (24.5 | ) | $ | 513.9 | |||||||
March 31, 2013 | ||||||||||||||||||||||||||
Gross Balance | Accumulated Impairment Losses | Net Goodwill | ||||||||||||||||||||||||
Balance | Acquired | Foreign | Balance | Balance | Impairment | Balance | March 31, | |||||||||||||||||||
January 1, | During the | Currency | March 31, | January 1, | Loss During | March 31, | 2013 | |||||||||||||||||||
2013 | Period | Translation | 2013 | 2013 | the Period | 2013 | ||||||||||||||||||||
and Other | ||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Americas | $ | 225.6 | $ | — | $ | (0.3 | ) | $ | 225.3 | $ | (24.2 | ) | $ | — | $ | (24.2 | ) | $ | 201.1 | |||||||
EMEA | 289.7 | — | (8.3 | ) | 281.4 | — | — | — | 281.4 | |||||||||||||||||
Asia-Pacific | 12.9 | — | — | 12.9 | — | — | — | 12.9 | ||||||||||||||||||
Total | $ | 528.2 | $ | — | $ | (8.6 | ) | $ | 519.6 | $ | (24.2 | ) | $ | — | $ | (24.2 | ) | $ | 495.4 | |||||||
Goodwill and indefinite-lived intangible assets are tested for impairment at least annually or more frequently if events or circumstances indicate that it is “more likely than not” that they might be impaired, such as from a change in business conditions. The Company performs its annual goodwill and indefinite-lived intangible assets impairment assessment in the fourth quarter of each year. | ||||||||||||||||||||||||||
Intangible assets with estimable lives and other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of intangible assets with estimable lives and other long-lived assets are measured by a comparison of the carrying amount of an asset or asset group to future net undiscounted pretax cash flows expected to be generated by the asset or asset group. If these comparisons indicate that an asset is not recoverable, the impairment loss recognized is the amount by which the carrying amount of the asset or asset group exceeds the related estimated fair value. Estimated fair value is based on either discounted future pretax operating cash flows or appraised values, depending on the nature of the asset. The Company determines the discount rate for this analysis based on the weighted average cost of capital based on the market and guideline public companies for the related business, and does not allocate interest charges to the asset or asset group being measured. Judgment is required to estimate future operating cash flows. | ||||||||||||||||||||||||||
Intangible assets include the following: | ||||||||||||||||||||||||||
March 30, 2014 | December 31, 2013 | |||||||||||||||||||||||||
Gross | Accumulated | Net | Gross | Accumulated | Net | |||||||||||||||||||||
Carrying | Amortization | Carrying | Carrying | Amortization | Carrying | |||||||||||||||||||||
Amount | Amount | Amount | Amount | |||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Patents | $ | 16.5 | $ | (12.8 | ) | $ | 3.7 | $ | 16.6 | $ | (12.6 | ) | $ | 4 | ||||||||||||
Customer relationships | 132.9 | (79.1 | ) | 53.8 | 133 | (76.4 | ) | 56.6 | ||||||||||||||||||
Technology | 26.7 | (11.4 | ) | 15.3 | 26.9 | (10.9 | ) | 16 | ||||||||||||||||||
Trade Names | 13.6 | (3.3 | ) | 10.3 | 13.7 | (3.0 | ) | 10.7 | ||||||||||||||||||
Other | 8.8 | (5.6 | ) | 3.2 | 8.8 | (5.6 | ) | 3.2 | ||||||||||||||||||
Total amortizable intangibles | 198.5 | (112.2 | ) | 86.3 | 199 | (108.5 | ) | 90.5 | ||||||||||||||||||
Indefinite-lived intangible assets | 41.9 | — | 41.9 | 41.9 | — | 41.9 | ||||||||||||||||||||
Total | $ | 240.4 | $ | (112.2 | ) | $ | 128.2 | $ | 240.9 | $ | (108.5 | ) | $ | 132.4 | ||||||||||||
Aggregate amortization expense for amortizable intangible assets for both the first quarters of 2014 and 2013 was $3.7 million. Additionally, future amortization expense for the next five years on amortizable intangible assets is expected to be approximately $11.1 million for the remainder of 2014, $14.6 million for 2015, $14.2 million for 2016, $13.8 million for 2017 and $9.9 million for 2018. Amortization expense is recorded on a straight-line basis over the estimated useful lives of the intangible assets. The weighted-average remaining life of total amortizable intangible assets is 8.3 years. Patents, customer relationships, technology, trade names and other amortizable intangibles have weighted-average remaining lives of 5.5 years, 5.3 years, 11.3 years, 10.7 years and 38.4 years, respectively. Indefinite-lived intangible assets primarily include trademarks and trade names. | ||||||||||||||||||||||||||
Stock-Based Compensation | ||||||||||||||||||||||||||
The Company maintains one stock incentive plan under which key employees have been granted incentive stock options (ISOs) and nonqualified stock options (NSOs) to purchase the Company’s Class A common stock. Under the 2004 Stock Incentive Plan, options typically become exercisable over a four-year period at the rate of 25% per year and expire ten years after the grant date. ISOs and NSOs granted under the plans may have exercise prices of not less than 100% of the fair market value of the Class A common stock on the date of grant. The Company’s current practice is to grant all options at fair market value on the grant date. The Company issued 4,808 stock options and 2,000 stock options during the first three months of 2014 and 2013, respectively. | ||||||||||||||||||||||||||
The Company has also granted shares of restricted stock and deferred shares to key employees and stock awards to non-employee members of the Company’s Board of Directors under the 2004 Stock Incentive Plan. Stock awards to non-employee members of the Company’s Board of Directors are fully vested upon grant. Employees’ restricted stock awards and deferred shares typically vest over a three-year period at the rate of one-third per year. The restricted stock awards and deferred shares are amortized to expense on a straight-line basis over the vesting period. The Company issued 1,747 shares of restricted stock and 667 shares of restricted stock in the first three months of 2014 and 2013, respectively, under the 2004 Stock Incentive Plan. | ||||||||||||||||||||||||||
The Company also has a Management Stock Purchase Plan that allows for the purchase of restricted stock units (RSUs) by key employees. On an annual basis, key employees may elect to receive a portion of their annual incentive compensation in RSUs instead of cash. Each RSU represents one share of Class A common stock and is purchased by the employee at 67% of the fair market value of the Company’s Class A common stock on the date of grant. RSUs vest either annually over a three-year period from the grant date or upon the third anniversary of the grant date and receipt of the shares underlying RSUs is deferred for a minimum of three years or such greater number of years as is chosen by the employee. An aggregate of 2,000,000 shares of Class A common stock may be issued under the Management Stock Purchase Plan. The Company granted 30,561 RSUs and 44,777 RSUs in the first three months of 2014 and 2013, respectively. | ||||||||||||||||||||||||||
The fair value of each RSU issued under the Management Stock Purchase Plan is estimated on the date of grant using the Black-Scholes-Merton Model based on the following weighted average assumptions: | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Expected life (years) | 3 | 3 | ||||||||||||||||||||||||
Expected stock price volatility | 31.2 | % | 34.1 | % | ||||||||||||||||||||||
Expected dividend yield | 0.9 | % | 0.9 | % | ||||||||||||||||||||||
Risk-free interest rate | 0.7 | % | 0.4 | % | ||||||||||||||||||||||
The above assumptions were used to determine the weighted average grant-date fair value of RSUs of $22.57 and $18.05 in 2014 and 2013, respectively. | ||||||||||||||||||||||||||
A more detailed description of each of these plans can be found in Note 12 of Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. | ||||||||||||||||||||||||||
Shipping and Handling | ||||||||||||||||||||||||||
The Company’s shipping and handling costs included in selling, general and administrative expenses were $14.7 million and $13.9 million for the first quarters of 2014 and 2013, respectively. The 2013 shipping and handling costs disclosed have been updated to include handling costs in order to be comparable with the current quarter. | ||||||||||||||||||||||||||
Research and Development | ||||||||||||||||||||||||||
Research and development costs included in selling, general and administrative expenses were $6.3 million and $5.4 million for the first quarters of 2014 and 2013, respectively. | ||||||||||||||||||||||||||
Taxes, Other than Income Taxes | ||||||||||||||||||||||||||
Taxes assessed by governmental authorities on sale transactions are recorded on a net basis and excluded from sales in the Company’s consolidated statements of operations. | ||||||||||||||||||||||||||
Income Taxes | ||||||||||||||||||||||||||
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. | ||||||||||||||||||||||||||
New Accounting Standards | ||||||||||||||||||||||||||
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, “Presentation of Financial Statements and Property, Plant, and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. ASU 2014-08 will change the definition of discontinued operations and limit discontinued operations presentation to disposals of components representing a strategic shift that will have a major effect on the operations and financial results of the issuer. ASU 2014-08 is effective in the first quarter of 2015 for public companies with calendar year ends, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. |
Discontinued_Operations
Discontinued Operations | 3 Months Ended | |||||||
Mar. 30, 2014 | ||||||||
Discontinued Operations | ' | |||||||
Discontinued Operations | ' | |||||||
3. Discontinued Operations | ||||||||
On August 1, 2013, the Company completed the sale of all of the outstanding shares of an indirectly wholly-owned subsidiary, Watts Insulation GmbH (Austroflex), receiving net cash proceeds of $7.9 million. The loss after tax on disposal of the business was approximately $2.2 million. The Company does not have a substantial continuing involvement in Austroflex’s operations and cash flows, therefore Austroflex’s results of operations have been presented as discontinued operations and all comparative periods presented have been adjusted in the consolidated interim financial statements to reflect Austroflex’s results as discontinued operations. | ||||||||
Pretax profit or losses in discontinued operations are as follows: | ||||||||
First Quarter Ended | ||||||||
March 30, | March 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Austroflex pretax (loss) profit in discontinued operations | $ | — | $ | (0.2 | ) | |||
Revenues reported in discontinued operations are as follows: | ||||||||
First Quarter Ended | ||||||||
March 30, | March 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Austroflex revenues | $ | — | $ | 3.2 | ||||
Financial_Instruments_and_Deri
Financial Instruments and Derivative Instruments | 3 Months Ended | ||||||||||||||||
Mar. 30, 2014 | |||||||||||||||||
Financial Instruments and Derivative Instruments | ' | ||||||||||||||||
Financial Instruments and Derivative Instruments | ' | ||||||||||||||||
4. Financial Instruments and Derivative Instruments | |||||||||||||||||
The Company measures certain financial assets and liabilities at fair value on a recurring basis, including deferred compensation plan assets and related liability, and contingent consideration. There were no designated cash flow hedges as of March 30, 2014 and December 31, 2013. The fair values of these certain financial assets and liabilities were determined using the following inputs at March 30, 2014 and December 31, 2013: | |||||||||||||||||
Fair Value Measurements at March 30, 2014 Using: | |||||||||||||||||
Quoted Prices in | Significant Other | Significant | |||||||||||||||
Active | Observable | Unobservable | |||||||||||||||
Markets for Identical | Inputs | Inputs | |||||||||||||||
Assets | |||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
(in millions) | |||||||||||||||||
Assets | |||||||||||||||||
Plan asset for deferred compensation(1) | $ | 4.4 | $ | 4.4 | $ | — | $ | — | |||||||||
Total assets | $ | 4.4 | $ | 4.4 | $ | — | $ | — | |||||||||
Liabilities | |||||||||||||||||
Plan liability for deferred compensation(2) | $ | 4.4 | $ | 4.4 | $ | — | $ | — | |||||||||
Contingent consideration(3) | 2.1 | — | — | 2.1 | |||||||||||||
Total liabilities | $ | 6.5 | $ | 4.4 | $ | — | $ | 2.1 | |||||||||
Fair Value Measurements at December 31, 2013 Using: | |||||||||||||||||
Quoted Prices in | Significant Other | Significant | |||||||||||||||
Active | Observable | Unobservable | |||||||||||||||
Markets for Identical | Inputs | Inputs | |||||||||||||||
Assets | |||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
(in millions) | |||||||||||||||||
Assets | |||||||||||||||||
Plan asset for deferred compensation(1) | $ | 4.6 | $ | 4.6 | $ | — | $ | — | |||||||||
Total assets | $ | 4.6 | $ | 4.6 | $ | — | $ | — | |||||||||
Liabilities | |||||||||||||||||
Plan liability for deferred compensation(2) | $ | 4.6 | $ | 4.6 | $ | — | $ | — | |||||||||
Contingent consideration(3) | 4.4 | — | — | 4.4 | |||||||||||||
Total liabilities | $ | 9 | $ | 4.6 | $ | — | $ | 4.4 | |||||||||
(1) Included on the Company’s consolidated balance sheet in other assets (other, net). | |||||||||||||||||
(2) Included on the Company’s consolidated balance sheet in accrued compensation and benefits. | |||||||||||||||||
(3) Included on the Company’s consolidated balance sheet in accrued expenses and other liabilities as of March 30, 2014 and in other noncurrent liabilities and accrued expenses and other liabilities as of December 31, 2013. | |||||||||||||||||
The table below provides a summary of the changes in fair value of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the period December 31, 2013 to March 30, 2014. | |||||||||||||||||
Balance | Purchases, | Total realized and | Balance | ||||||||||||||
unrealized (gains) | |||||||||||||||||
losses included in: | |||||||||||||||||
December 31, | sales, | Net earnings | Comprehensive | March 30, | |||||||||||||
2013 | settlements, net | adjustments | income | 2014 | |||||||||||||
(in millions) | |||||||||||||||||
Contingent consideration | $ | 4.4 | $ | (2.2 | ) | $ | — | $ | (0.1 | ) | $ | 2.1 | |||||
On January 31, 2012, the Company completed the acquisition of tekmar Control Systems (tekmar) in a share purchase transaction. The initial purchase price paid was CAD $18.0 million, with post-closing adjustments related to working capital and an earnout based on the attainment of certain future earnings levels. A contingent liability of $5.1 million was recognized as the estimate of the acquisition date fair value of the contingent consideration. This liability was classified as Level 3 under the fair value hierarchy as it was based on the probability of achievement of a future performance metric as of the date of the acquisition, which was not observable in the market. Failure to meet the performance metrics would reduce this liability to zero; while complete achievement would increase this liability to the full remaining purchase price of $8.2 million. The contingent liability was increased by $1.0 million during 2013 based on a revised estimate of the fair value of the contingent consideration. A portion of the contingent consideration was paid out during the first quarter of 2014 and the second quarter of 2013, in the amount of $2.2 million and $1.2 million, respectively, based on performance metrics achieved. The earnout will be completed in fiscal year 2014. | |||||||||||||||||
Cash equivalents consist of instruments with remaining maturities of three months or less at the date of purchase and consist primarily of certificates of deposit and money market funds, for which the carrying amount is a reasonable estimate of fair value. | |||||||||||||||||
The Company uses financial instruments from time to time to enhance its ability to manage risk, including foreign currency and commodity pricing exposures, which exist as part of its ongoing business operations. The use of derivatives exposes the Company to counterparty credit risk for nonperformance and to market risk related to changes in currency exchange rates and commodity prices. The Company manages its exposure to counterparty credit risk through diversification of counterparties. The Company’s counterparties in derivative transactions are substantial commercial banks with significant experience using such derivative instruments. The impact of market risk on the fair value and cash flows of the Company’s derivative instruments is monitored and the Company restricts the use of derivative financial instruments to hedging activities. The Company does not enter into contracts for trading purposes nor does the Company enter into any contracts for speculative purposes. The use of derivative instruments is approved by senior management under written guidelines. | |||||||||||||||||
The Company has exposure to a number of foreign currency rates, including the Canadian dollar, the euro, the Chinese yuan and the British pound sterling. To manage this risk, the Company has in the past used a layering methodology and entered into forward exchange contracts which hedged approximately 50% of the projected intercompany purchase transactions for the next twelve months. The Company presently does not have any open forward exchange contracts. | |||||||||||||||||
Fair Value | |||||||||||||||||
The carrying amounts of cash and cash equivalents, trade receivables and trade payables approximate fair value because of the short maturity of these financial instruments. | |||||||||||||||||
The fair values of the Company’s 5.85% senior notes due 2016, and 5.05% senior notes due 2020, are based on a discounted cash flow model using comparable industrial companies, the Company’s credit metrics, the Company’s size, as well as current market interest rates quoted in active markets and are classified within Level 2 of the valuation hierarchy. The fair value of the Company’s variable rate debt approximates its carrying value. The carrying amount and the estimated fair market value of the Company’s long-term debt, including the current portion, are as follows: | |||||||||||||||||
March 30, | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
(in millions) | |||||||||||||||||
Carrying amount | $ | 307.3 | $ | 307.7 | |||||||||||||
Estimated fair value | $ | 332.3 | $ | 333.4 |
Restructuring_and_Other_Charge
Restructuring and Other Charges, Net | 3 Months Ended | ||||||||||||||||
Mar. 30, 2014 | |||||||||||||||||
Restructuring and Other Charges, Net | ' | ||||||||||||||||
Restructuring and Other Charges, Net | ' | ||||||||||||||||
5. Restructuring and Other Charges, Net | |||||||||||||||||
The Company’s Board of Directors approves all major restructuring programs that involve the discontinuance of significant product lines or the shutdown of significant facilities. From time to time, the Company takes additional restructuring actions, including involuntary terminations that are not part of a major program. The Company accounts for these costs in the period that the individual employees are notified or the liability is incurred. These costs are included in restructuring and other charges in the Company’s consolidated statements of operations. | |||||||||||||||||
2013 Actions | |||||||||||||||||
On July 30, 2013, the Board of Directors authorized a restructuring program with respect to the Company’s EMEA segment to reduce its European manufacturing footprint, improve organizational and operational efficiency and better align costs with expected revenues in response to changing market conditions. The restructuring program is expected to include a pre-tax charge to earnings totaling approximately $14.0 million, approximately $10.3 million of which is expected to be recorded through fiscal 2014 and the remainder recorded during fiscal 2015. The total charge will include costs for severance benefits, relocation, site clean-up, professional fees and certain asset write-downs. The total net after-tax charge for the restructuring program is expected to be approximately $10.0 million. The restructuring program is expected to be completed by the end of the fourth quarter of fiscal 2015. Certain aspects of the restructuring program are subject to further analysis and determinations by local management and consultation and negotiation with various works councils. The net after-tax charge incurred in the first quarter of 2014 was $0.3 million. | |||||||||||||||||
Other Actions | |||||||||||||||||
The Company also periodically initiates other actions which are not part of a major program. In 2013 and 2014, the Company initiated restructuring activities in EMEA and the Americas to relocate certain manufacturing activities and reduce costs through a reduction-in-force. There are no remaining expected costs relating to these actions. | |||||||||||||||||
A summary of the pre-tax cost by restructuring program is as follows: | |||||||||||||||||
First Quarter Ended | |||||||||||||||||
March 30, | March 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
(in millions) | |||||||||||||||||
Restructuring costs: | |||||||||||||||||
2013 Actions | 0.4 | — | |||||||||||||||
Other Actions | 3.8 | 2.2 | |||||||||||||||
Total restructuring and other charges, net | $ | 4.2 | $ | 2.2 | |||||||||||||
The Company recorded pre-tax restructuring and other charges, net in its business segments as follows: | |||||||||||||||||
First Quarter Ended | |||||||||||||||||
March 30, | March 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
(in millions) | |||||||||||||||||
Americas | $ | 1.9 | $ | 0.2 | |||||||||||||
EMEA | 1.5 | 2 | |||||||||||||||
Corporate | 0.8 | — | |||||||||||||||
Total | $ | 4.2 | $ | 2.2 | |||||||||||||
Details of the Company’s 2013 European footprint program reserve, which for the first quarter ended March 30, 2014 relates only to severance, is as follows: | |||||||||||||||||
First Quarter Ended | |||||||||||||||||
March 30, 2014 | |||||||||||||||||
(in millions) | |||||||||||||||||
Balance at December 31, 2013 | $ | 2 | |||||||||||||||
Net pre-tax restructuring charges | 0.4 | ||||||||||||||||
Utilization and foreign currency impact | (0.3 | ) | |||||||||||||||
Balance at March 30, 2014 | $ | 2.1 | |||||||||||||||
The following table summarizes total expected, incurred and remaining pre-tax costs for 2013 European footprint program actions by type, and all attributable to the EMEA reportable segment: | |||||||||||||||||
Severance | Legal and | Asset | Facility | Total | |||||||||||||
consultancy | write-downs | exit | |||||||||||||||
and other | |||||||||||||||||
(in millions) | |||||||||||||||||
Expected costs | $ | 12.3 | $ | 1.3 | $ | 0.2 | $ | 0.2 | $ | 14 | |||||||
Costs incurred—2013 | (4.1 | ) | — | — | — | (4.1 | ) | ||||||||||
Costs incurred—first quarter 2014 | (0.1 | ) | — | (0.2 | ) | (0.1 | ) | (0.4 | ) | ||||||||
Remaining costs at March 30, 2014 | $ | 8.1 | $ | 1.3 | $ | — | $ | 0.1 | $ | 9.5 |
Earnings_per_Share
Earnings per Share | 3 Months Ended | |||||||||||||||||
Mar. 30, 2014 | ||||||||||||||||||
Earnings per Share | ' | |||||||||||||||||
Earnings per Share | ' | |||||||||||||||||
6. Earnings per Share | ||||||||||||||||||
The following tables set forth the reconciliation of the calculation of earnings per share: | ||||||||||||||||||
For the First Quarter Ended March 30, 2014 | For the First Quarter Ended March 31, 2013 | |||||||||||||||||
Income | Shares | Per Share | Income | Shares | Per Share | |||||||||||||
(Numerator) | (Denominator) | Amount | (Numerator) | (Denominator) | Amount | |||||||||||||
(amounts in millions, except per share amounts) | ||||||||||||||||||
Basic EPS | ||||||||||||||||||
Net income: | ||||||||||||||||||
Continuing operations | $ | 14.1 | 35.4 | $ | 0.4 | $ | 16.3 | 35.5 | $ | 0.46 | ||||||||
Discontinued operations | — | — | (0.2 | ) | (0.01 | ) | ||||||||||||
Net income | $ | 14.1 | $ | 0.4 | $ | 16.1 | $ | 0.45 | ||||||||||
Effect of dilutive securities | ||||||||||||||||||
Common stock equivalents | 0.1 | 0.1 | ||||||||||||||||
Diluted EPS | ||||||||||||||||||
Net income: | ||||||||||||||||||
Continuing operations | $ | 14.1 | $ | 0.4 | $ | 16.3 | $ | 0.46 | ||||||||||
Discontinued operations | — | — | (0.2 | ) | (0.01 | ) | ||||||||||||
Net income | $ | 14.1 | 35.5 | $ | 0.4 | $ | 16.1 | 35.6 | $ | 0.45 | ||||||||
Options to purchase 0.3 million and 0.4 million shares of Class A common stock were outstanding during the first quarters of 2014 and 2013, respectively, but were not included in the computation of diluted EPS because to do so would be anti-dilutive. | ||||||||||||||||||
On April 30, 2013, the Company’s Board of Directors authorized the repurchase of up to $90 million of the Company’s Class A common stock from time to time on the open market or in privately negotiated transactions. The timing and number of any shares repurchased will be determined by the Company’s management based on its evaluation of market conditions. Repurchases may also be made under a Rule 10b5-1 plan, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The repurchase program may be suspended or discontinued at any time, subject to the terms of any Rule 10b5-1 plan the Company may enter into with respect to the repurchase program. During the quarter ended March 30, 2014, the Company repurchased approximately 161,000 shares of Class A common stock at a cost of approximately $9.4 million. |
Segment_Information
Segment Information | 3 Months Ended | |||||||
Mar. 30, 2014 | ||||||||
Segment Information | ' | |||||||
Segment Information | ' | |||||||
7. Segment Information | ||||||||
The Company operates in three geographic segments: Americas, EMEA, and Asia-Pacific. Each of these segments is managed separately and has separate financial results that are reviewed by the Company’s chief operating decision-maker. All intercompany sales transactions have been eliminated. Sales by region are based upon location of the entity recording the sale. The accounting policies for each segment are the same as those described in the summary of significant accounting policies. | ||||||||
As of January 1, 2014, the Company began allocating certain expenses to its three operating segments, Americas, EMEA and Asia-Pacific, that had previously been recorded as Corporate expenses. These expenses primarily include stock compensation, legal expenses and audit expenses that are directly attributable to and benefit the three operating segments. The 2013 results by segment have been retrospectively revised for comparative purposes. | ||||||||
The following is a summary of the Company’s significant accounts and balances by segment, reconciled to the consolidated totals: | ||||||||
First Quarter Ended | ||||||||
March 30, | March 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Net sales | ||||||||
Americas | $ | 219.1 | $ | 213 | ||||
EMEA | 139.1 | 139.2 | ||||||
Asia-Pacific | 7 | 6.7 | ||||||
Consolidated net sales | $ | 365.2 | $ | 358.9 | ||||
Operating income (loss) | ||||||||
Americas | $ | 22.6 | $ | 22.1 | ||||
EMEA | 8.9 | 10.9 | ||||||
Asia-Pacific | 0.9 | 2.9 | ||||||
Subtotal reportable segments | 32.4 | 35.9 | ||||||
Corporate (*) | (6.6 | ) | (7.3 | ) | ||||
Consolidated operating income | 25.8 | 28.6 | ||||||
Interest income | 0.1 | 0.1 | ||||||
Interest expense | (4.9 | ) | (6.0 | ) | ||||
Other income (expense), net | (0.4 | ) | — | |||||
Income from continuing operations before income taxes | $ | 20.6 | $ | 22.7 | ||||
Capital expenditures | ||||||||
Americas | $ | 2.2 | $ | 8.2 | ||||
EMEA | 2.5 | 2.2 | ||||||
Asia-Pacific | 0.3 | 0.6 | ||||||
Consolidated capital expenditures | $ | 5 | $ | 11 | ||||
Depreciation and amortization | ||||||||
Americas | $ | 4.9 | $ | 5 | ||||
EMEA | 6.6 | 6.5 | ||||||
Asia-Pacific | 0.4 | 0.7 | ||||||
Consolidated depreciation and amortization | $ | 11.9 | $ | 12.2 | ||||
Identifiable assets (at end of period) | ||||||||
Americas | $ | 767.9 | $ | 810.8 | ||||
EMEA | 875.9 | 783.7 | ||||||
Asia-Pacific | 71.4 | 91.8 | ||||||
Discontinued operations | — | 11.8 | ||||||
Consolidated identifiable assets | $ | 1,715.20 | $ | 1,698.10 | ||||
Property, plant and equipment, net (at end of period) | ||||||||
Americas | $ | 84.5 | $ | 85.2 | ||||
EMEA | 117.7 | 120.5 | ||||||
Asia-Pacific | 13.8 | 14.8 | ||||||
Consolidated property, plant and equipment, net | $ | 216 | $ | 220.5 | ||||
* Corporate expenses are primarily for administrative compensation expense, internal controls costs, professional fees, including corporate-related legal and audit expenses, shareholder services and benefit administration costs. | ||||||||
Apart from the change noted above resulting from allocating certain expenses to its three operating segments, the above operating segments are presented on a basis consistent with the presentation included in the Company’s December 31, 2013 consolidated financial statements included in its Annual Report on Form 10-K. | ||||||||
The following includes U.S. net sales and U.S. property, plant and equipment of the Company’s Americas segment: | ||||||||
First Quarter Ended | ||||||||
March 30, | March 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
U.S. net sales | $ | 201.6 | $ | 192.8 | ||||
U.S. property, plant and equipment (at end of period) | $ | 80 | $ | 79.9 | ||||
The following includes intersegment sales for Americas, EMEA and Asia-Pacific: | ||||||||
First Quarter Ended | ||||||||
March 30, | March 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Intersegment Sales | ||||||||
Americas | $ | 1.2 | $ | 1.3 | ||||
EMEA | 3.6 | 2.7 | ||||||
Asia-Pacific | 39 | 41.6 | ||||||
Intersegment sales | $ | 43.8 | $ | 45.6 |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended | ||||||||||
Mar. 30, 2014 | |||||||||||
Accumulated Other Comprehensive Income (Loss) | ' | ||||||||||
Accumulated Other Comprehensive Income (Loss) | ' | ||||||||||
8. Accumulated Other Comprehensive Income (Loss) | |||||||||||
Accumulated other comprehensive income (loss) consists of the following: | |||||||||||
Foreign | Pension | Accumulated Other | |||||||||
Currency | Adjustment | Comprehensive | |||||||||
Translation | Income (Loss) | ||||||||||
(in millions) | |||||||||||
Balance December 31, 2013 | $ | 37.9 | $ | (25.9 | ) | $ | 12 | ||||
Change in period | (4.3 | ) | 0.2 | (4.1 | ) | ||||||
Balance March 30, 2014 | $ | 33.6 | $ | (25.7 | ) | $ | 7.9 | ||||
Balance December 31, 2012 | $ | 14.4 | $ | (25.2 | ) | $ | (10.8 | ) | |||
Change in period | (19.9 | ) | 0.2 | (19.7 | ) | ||||||
Balance March 31, 2013 | $ | (5.5 | ) | $ | (25.0 | ) | $ | (30.5 | ) |
Debt
Debt | 3 Months Ended |
Mar. 30, 2014 | |
Debt | ' |
Debt | ' |
9. Debt | |
On February 18, 2014, the Company terminated its prior credit agreement and entered into a new Credit Agreement (the Credit Agreement) among the Company, certain subsidiaries of the Company who become borrowers under the Credit Agreement, JPMorgan Chase Bank, N.A., as Administrative Agent, Swing Line Lender and Letter of Credit Issuer, and the other lenders referred to therein. The Credit Agreement provides for a $500 million, five-year, senior unsecured revolving credit facility which may be increased by an additional $500 million under certain circumstances and subject to the terms of the Credit Agreement. The Credit Agreement has a sublimit of up to $100 million in letters of credit. The Credit Agreement matures on February 18, 2019. | |
Borrowings outstanding under the Credit Agreement bear interest at a fluctuating rate per annum equal to an applicable percentage equal to (1) in the case of Eurocurrency rate loans, the British Bankers Association LIBOR rate plus an applicable percentage, ranging from 0.975% to 1.45%, determined by reference to the Company’s consolidated leverage ratio, or (2) in the case of base rate loans and swing line loans, the highest of (a) the federal funds rate plus 0.5%, (b) the rate of interest in effect for such day as announced by JPMorgan Chase Bank, N.A. as its “prime rate,” and (c) the British Bankers Association LIBOR rate plus 1.0%, plus an applicable percentage, ranging from 0.00% to 0.45%, determined by reference to the Company’s consolidated leverage ratio. In addition to paying interest under the Credit Agreement, the Company is also required to pay certain fees in connection with the credit facility, including, but not limited to, an unused facility fee and letter of credit fees. Under the Credit Agreement, the Company is required to satisfy and maintain specified financial ratios and other financial condition tests. The Company may repay loans outstanding under the Credit Agreement from time to time without premium or penalty, other than customary breakage costs, if any, and subject to the terms of the Credit Agreement. As of March 30, 2014, the Company was in compliance with all covenants related to the Credit Agreement and had $476.4 million of unused and available credit under the Credit Agreement and $23.6 million of stand-by letters of credit outstanding on the Credit Agreement. The Company did not have any borrowings outstanding under the Credit Agreement at March 30, 2014. | |
The Company is a party to several note agreements as further detailed in Note 10 of Notes to Consolidated Financial Statements of the Annual Report on Form 10-K for the year ended December 31, 2013. These note agreements require the Company to maintain a fixed charge coverage ratio of consolidated EBITDA plus consolidated rent expense during the period to consolidated fixed charges. Consolidated fixed charges are the sum of consolidated interest expense for the period and consolidated rent expense. As of March 30, 2014, the Company was in compliance with all covenants regarding these note agreements. |
Contingencies_and_Environmenta
Contingencies and Environmental Remediation | 3 Months Ended |
Mar. 30, 2014 | |
Contingencies and Environmental Remediation | ' |
Contingencies and Environmental Remediation | ' |
10. Contingencies and Environmental Remediation | |
Accrual and Disclosure Policy | |
The Company is a defendant in numerous legal matters arising from its ordinary course of operations, including those involving product liability, environmental matters and commercial disputes. | |
The Company reviews its lawsuits and other legal proceedings on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. The Company establishes accruals for matters when the Company assesses that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated, net of any applicable insurance proceeds. The Company does not establish accruals for such matters when the Company does not believe both that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company’s assessment of whether a loss is probable is based on its assessment of the ultimate outcome of the matter following all appeals. | |
Under the FASB issued ASC 450 “Contingencies”, an event is “reasonably possible” if “the chance of the future event or events occurring is more than remote but less than likely” and an event is “remote” if “the chance of the future event or events occurring is slight”. Thus, references to the upper end of the range of reasonably possible loss for cases in which the Company is able to estimate a range of reasonably possible loss mean the upper end of the range of loss for cases for which the Company believes the risk of loss is more than slight. | |
There may continue to be exposure to loss in excess of any amount accrued. When it is possible to estimate the reasonably possible loss or range of loss above the amount accrued for the matters disclosed, that estimate is aggregated and disclosed. The Company records legal costs associated with its legal contingencies as incurred, except for legal costs associated with product liability claims which are included in the product liability accrual. | |
As of March 30, 2014, the Company estimates that the aggregate amount of reasonably possible loss in excess of the amount accrued for its legal contingencies is approximately $11.5 million, pre-tax. With respect to the estimate of reasonably possible loss, management has estimated the upper end of the range of reasonably possible loss based on (i) the amount of money damages claimed, where applicable, (ii) the allegations and factual development to date, (iii) available defenses based on the allegations, and/or (iv) other potentially liable parties. This estimate is based upon currently available information and is subject to significant judgment and a variety of assumptions, and known and unknown uncertainties. The matters underlying the estimate will change from time to time, and actual results may vary significantly from the current estimate. In the event of an unfavorable outcome in one or more matters, the ultimate liability may be in excess of amounts currently accrued, if any, and may be material to the Company’s operating results or cash flows for a particular quarterly or annual period. However, based on information currently known to it, management believes that the ultimate outcome of all matters, as they are resolved over time, is not likely to have a material adverse effect on the financial condition of the Company, though the outcome could be material to the Company’s operating results for any particular period depending, in part, upon the operating results for such period. | |
Trabakoolas et al., v, Watts Water Technologies, Inc., et al., | |
On March 8, 2012, Watts Water Technologies, Inc., Watts Regulator Co., and Watts Plumbing Technologies Co., Ltd., among other companies, were named as defendants in a putative nationwide class action complaint filed in the U.S. District Court for the Northern District of California seeking to recover damages and other relief based on the alleged failure of toilet connectors. The complaint seeks among other items, damages in an unspecified amount, replacement costs, injunctive relief, and attorneys’ fees and costs. | |
On December 12, 2013, the Company reached an agreement in principle to settle all claims. The total settlement amount is $23.0 million, of which the Company would be responsible for $14.0 million after insurance proceeds of $9.0 million. The settlement was subject to review by the Court at a preliminary approval hearing held on February 12, 2014. The Court granted preliminary approval on February 14, 2014. The settlement is subject to final court approval after a fairness hearing currently scheduled for July 16, 2014. Accordingly, there can be no assurance that the proposed settlement will be approved in its current form. If the settlement is not approved, the Company intends to continue to vigorously contest the allegations in this case. | |
During the fourth quarter of 2013, the Company recorded a liability of $22.6 million related to the Trabakoolas matter, of which $12.7 million was included in current liabilities and $9.9 million in other noncurrent liabilities. In addition, a $9.0 million receivable was recorded in current assets related to insurance proceeds due under a separate settlement agreement if the class action settlement is approved. The liability was reduced by $1.2 million for notice and claims administrator payments made during the first quarter of 2014 and as of March 30, 2014, the remaining liability was $21.4 million. | |
Product Liability | |
The Company is subject to a variety of potential liabilities in connection with product liability cases. The Company maintains product liability and other insurance coverage, which the Company believes to be generally in accordance with industry practices. For product liability cases in the U.S., management establishes its product liability accrual, which includes legal costs associated with accrued claims, by utilizing third-party actuarial valuations which incorporate historical trend factors and the Company’s specific claims experience derived from loss reports provided by third-party claims administrators. Changes in the nature of claims, legal costs, or the actual settlement amounts could affect the adequacy of this estimate and require changes to the accrual. Because the liability is an estimate, the ultimate liability may be more or less than reported. In other countries, the Company maintains insurance coverage with relatively high deductible payments, as product liability claims tend to be smaller than those experienced in the U.S. | |
Environmental Remediation | |
The Company has been named as a potentially responsible party with respect to a limited number of identified contaminated sites. The levels of contamination vary significantly from site to site as do the related levels of remediation efforts. Environmental liabilities are recorded based on the most probable cost, if known, or on the estimated minimum cost of remediation. Accruals are not discounted to their present value, unless the amount and timing of expenditures are fixed and reliably determinable. The Company accrues estimated environmental liabilities based on assumptions, which are subject to a number of factors and uncertainties. Circumstances that can affect the reliability and precision of these estimates include identification of additional sites, environmental regulations, level of cleanup required, technologies available, number and financial condition of other contributors to remediation and the time period over which remediation may occur. The Company recognizes changes in estimates as new remediation requirements are defined or as new information becomes available. Environmental liabilities as of the first quarter ended 2014 and 2013 were not considered material. | |
Asbestos Litigation | |
The Company is defending 44 lawsuits in different jurisdictions, alleging injury or death as a result of exposure to asbestos. The complaints in these cases typically name a large number of defendants and do not identify any particular Company products as a source of asbestos exposure. To date, the Company has obtained a dismissal in every case before it has reached trial because discovery has failed to yield evidence of substantial exposure to any Company products. | |
Other Litigation | |
Other lawsuits and proceedings or claims, arising from the ordinary course of operations, are also pending or threatened against the Company. |
Defined_Benefit_Plans
Defined Benefit Plans | 3 Months Ended | |||||||
Mar. 30, 2014 | ||||||||
Defined Benefit Plans | ' | |||||||
Defined Benefit Plans | ' | |||||||
11. Defined Benefit Plans | ||||||||
The Company sponsors funded and unfunded non-contributing defined benefit pension plans that together cover substantially all of its U.S. employees. Benefits are based primarily on years of service and employees’ compensation. The funding policy of the Company for these plans is to contribute an annual amount that does not exceed the maximum amount that can be deducted for federal income tax purposes. On October 31, 2011, the Company’s Board of Directors voted to cease accruals effective December 31, 2011 under both the Company’s Pension Plan and Supplemental Employees Retirement Plan. On April 28, 2014, the Company’s Board of Directors voted to terminate the Company’s Pension Plan and Supplemental Employees Retirement Plan (the “SERP”). Refer to Note 12 for further details. | ||||||||
The components of net periodic benefit cost are as follows: | ||||||||
First Quarter Ended | ||||||||
March 30, | March 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Service cost — administrative costs | $ | 0.2 | $ | 0.1 | ||||
Interest costs on benefits obligation | 1.5 | 1.4 | ||||||
Expected return on assets | (1.5 | ) | (1.7 | ) | ||||
Net actuarial loss amortization | 0.3 | 0.2 | ||||||
Net periodic benefit cost | $ | 0.5 | $ | — | ||||
The information related to the Company’s pension funds cash flow is as follows: | ||||||||
First Quarter Ended | ||||||||
March 30, 2014 | March 31, 2013 | |||||||
(in millions) | ||||||||
Employer contributions | $ | 0.2 | $ | 0.2 | ||||
The Company expects to contribute approximately $0.6 million to its pension plans for the remainder of 2014. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 30, 2014 | |
Subsequent Events | ' |
Subsequent Events | ' |
12. Subsequent Events | |
Dividend Declared | |
On April 29, 2014, the Company declared a quarterly dividend of fifteen cents ($0.15) per share on each outstanding share of Class A common stock and Class B common stock payable on May 30, 2014 to stockholders of record at the close of business on May 19, 2014. | |
Termination of Pension Plans | |
On April 28, 2014, the Company’s Board of Directors voted to terminate the Watts Water Technologies, Inc. Pension Plan (the “Pension Plan”) and the Watts Water Technologies, Inc. Supplemental Employees Retirement Plan (the “SERP”). These terminations follow amendments to the Pension Plan and SERP to cease (or “freeze”) benefit accruals for eligible employees under those plans effective December 31, 2011. | |
The Pension Plan will terminate effective July 31, 2014. Distribution of plan assets pursuant to the termination will not be made until the plan termination satisfies the regulatory requirements prescribed by the Internal Revenue Service and the Pension Benefit Guaranty Corporation, which is expected to occur in late 2015. The SERP will terminate effective May 15, 2014. The Company will settle all liabilities under the SERP in accordance with Section 409A of the Internal Revenue Code by paying lump sums to plan participants at least twelve and no more than twenty four months following the termination date. The Board of Directors authorized the Company to make such contributions to the Pension Plan and SERP as may be necessary to make the plans sufficient to settle all plan liabilities. | |
Appointment of Chief Executive Officer | |
On May 8, 2014, the Company’s Board of Directors appointed Robert J. Pagano, Jr. as the Company’s President and Chief Executive Officer effective upon the commencement of his employment with the Company on May 27, 2014, at which time the Company’s interim President and Chief Executive Officer, Dean P. Freeman, will resume his role as Executive Vice President and Chief Financial Officer. The Company’s Board of Directors also appointed Mr. Pagano as a member of the Company’s Board of Directors effective upon the commencement of his employment with the Company. |
Accounting_Policies_Policies
Accounting Policies (Policies) | 3 Months Ended | |||||||||||||||||||||||||
Mar. 30, 2014 | ||||||||||||||||||||||||||
Accounting Policies | ' | |||||||||||||||||||||||||
Estimates | ' | |||||||||||||||||||||||||
Estimates | ||||||||||||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||||||||||||||||||||||||||
Goodwill and Long-Lived Assets | ' | |||||||||||||||||||||||||
Goodwill and Long-Lived Assets | ||||||||||||||||||||||||||
The changes in the carrying amount of goodwill by geographic segment are as follows: | ||||||||||||||||||||||||||
March 30, 2014 | ||||||||||||||||||||||||||
Gross Balance | Accumulated Impairment Losses | Net Goodwill | ||||||||||||||||||||||||
Balance | Acquired | Foreign | Balance | Balance | Impairment | Balance | March 30, | |||||||||||||||||||
January 1, | During | Currency | March 30, | January 1, | Loss | March 30, | 2014 | |||||||||||||||||||
2014 | the | Translation | 2014 | 2014 | During the | 2014 | ||||||||||||||||||||
Period | and Other | Period | ||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Americas | $ | 224.7 | $ | — | $ | (0.4 | ) | $ | 224.3 | $ | (24.5 | ) | $ | — | $ | (24.5 | ) | $ | 199.8 | |||||||
Europe, Middle East and Africa (EMEA) | 301.3 | — | (0.1 | ) | 301.2 | — | — | — | 301.2 | |||||||||||||||||
Asia-Pacific | 13.3 | — | (0.4 | ) | 12.9 | — | — | — | 12.9 | |||||||||||||||||
Total | $ | 539.3 | $ | — | $ | (0.9 | ) | $ | 538.4 | $ | (24.5 | ) | $ | — | $ | (24.5 | ) | $ | 513.9 | |||||||
March 31, 2013 | ||||||||||||||||||||||||||
Gross Balance | Accumulated Impairment Losses | Net Goodwill | ||||||||||||||||||||||||
Balance | Acquired | Foreign | Balance | Balance | Impairment | Balance | March 31, | |||||||||||||||||||
January 1, | During the | Currency | March 31, | January 1, | Loss During | March 31, | 2013 | |||||||||||||||||||
2013 | Period | Translation | 2013 | 2013 | the Period | 2013 | ||||||||||||||||||||
and Other | ||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Americas | $ | 225.6 | $ | — | $ | (0.3 | ) | $ | 225.3 | $ | (24.2 | ) | $ | — | $ | (24.2 | ) | $ | 201.1 | |||||||
EMEA | 289.7 | — | (8.3 | ) | 281.4 | — | — | — | 281.4 | |||||||||||||||||
Asia-Pacific | 12.9 | — | — | 12.9 | — | — | — | 12.9 | ||||||||||||||||||
Total | $ | 528.2 | $ | — | $ | (8.6 | ) | $ | 519.6 | $ | (24.2 | ) | $ | — | $ | (24.2 | ) | $ | 495.4 | |||||||
Goodwill and indefinite-lived intangible assets are tested for impairment at least annually or more frequently if events or circumstances indicate that it is “more likely than not” that they might be impaired, such as from a change in business conditions. The Company performs its annual goodwill and indefinite-lived intangible assets impairment assessment in the fourth quarter of each year. | ||||||||||||||||||||||||||
Intangible assets with estimable lives and other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of intangible assets with estimable lives and other long-lived assets are measured by a comparison of the carrying amount of an asset or asset group to future net undiscounted pretax cash flows expected to be generated by the asset or asset group. If these comparisons indicate that an asset is not recoverable, the impairment loss recognized is the amount by which the carrying amount of the asset or asset group exceeds the related estimated fair value. Estimated fair value is based on either discounted future pretax operating cash flows or appraised values, depending on the nature of the asset. The Company determines the discount rate for this analysis based on the weighted average cost of capital based on the market and guideline public companies for the related business, and does not allocate interest charges to the asset or asset group being measured. Judgment is required to estimate future operating cash flows. | ||||||||||||||||||||||||||
Intangible assets include the following: | ||||||||||||||||||||||||||
March 30, 2014 | December 31, 2013 | |||||||||||||||||||||||||
Gross | Accumulated | Net | Gross | Accumulated | Net | |||||||||||||||||||||
Carrying | Amortization | Carrying | Carrying | Amortization | Carrying | |||||||||||||||||||||
Amount | Amount | Amount | Amount | |||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Patents | $ | 16.5 | $ | (12.8 | ) | $ | 3.7 | $ | 16.6 | $ | (12.6 | ) | $ | 4 | ||||||||||||
Customer relationships | 132.9 | (79.1 | ) | 53.8 | 133 | (76.4 | ) | 56.6 | ||||||||||||||||||
Technology | 26.7 | (11.4 | ) | 15.3 | 26.9 | (10.9 | ) | 16 | ||||||||||||||||||
Trade Names | 13.6 | (3.3 | ) | 10.3 | 13.7 | (3.0 | ) | 10.7 | ||||||||||||||||||
Other | 8.8 | (5.6 | ) | 3.2 | 8.8 | (5.6 | ) | 3.2 | ||||||||||||||||||
Total amortizable intangibles | 198.5 | (112.2 | ) | 86.3 | 199 | (108.5 | ) | 90.5 | ||||||||||||||||||
Indefinite-lived intangible assets | 41.9 | — | 41.9 | 41.9 | — | 41.9 | ||||||||||||||||||||
Total | $ | 240.4 | $ | (112.2 | ) | $ | 128.2 | $ | 240.9 | $ | (108.5 | ) | $ | 132.4 | ||||||||||||
Aggregate amortization expense for amortizable intangible assets for both the first quarters of 2014 and 2013 was $3.7 million. Additionally, future amortization expense for the next five years on amortizable intangible assets is expected to be approximately $11.1 million for the remainder of 2014, $14.6 million for 2015, $14.2 million for 2016, $13.8 million for 2017 and $9.9 million for 2018. Amortization expense is recorded on a straight-line basis over the estimated useful lives of the intangible assets. The weighted-average remaining life of total amortizable intangible assets is 8.3 years. Patents, customer relationships, technology, trade names and other amortizable intangibles have weighted-average remaining lives of 5.5 years, 5.3 years, 11.3 years, 10.7 years and 38.4 years, respectively. Indefinite-lived intangible assets primarily include trademarks and trade names. | ||||||||||||||||||||||||||
Stock-Based Compensation | ' | |||||||||||||||||||||||||
Stock-Based Compensation | ||||||||||||||||||||||||||
The Company maintains one stock incentive plan under which key employees have been granted incentive stock options (ISOs) and nonqualified stock options (NSOs) to purchase the Company’s Class A common stock. Under the 2004 Stock Incentive Plan, options typically become exercisable over a four-year period at the rate of 25% per year and expire ten years after the grant date. ISOs and NSOs granted under the plans may have exercise prices of not less than 100% of the fair market value of the Class A common stock on the date of grant. The Company’s current practice is to grant all options at fair market value on the grant date. The Company issued 4,808 stock options and 2,000 stock options during the first three months of 2014 and 2013, respectively. | ||||||||||||||||||||||||||
The Company has also granted shares of restricted stock and deferred shares to key employees and stock awards to non-employee members of the Company’s Board of Directors under the 2004 Stock Incentive Plan. Stock awards to non-employee members of the Company’s Board of Directors are fully vested upon grant. Employees’ restricted stock awards and deferred shares typically vest over a three-year period at the rate of one-third per year. The restricted stock awards and deferred shares are amortized to expense on a straight-line basis over the vesting period. The Company issued 1,747 shares of restricted stock and 667 shares of restricted stock in the first three months of 2014 and 2013, respectively, under the 2004 Stock Incentive Plan. | ||||||||||||||||||||||||||
The Company also has a Management Stock Purchase Plan that allows for the purchase of restricted stock units (RSUs) by key employees. On an annual basis, key employees may elect to receive a portion of their annual incentive compensation in RSUs instead of cash. Each RSU represents one share of Class A common stock and is purchased by the employee at 67% of the fair market value of the Company’s Class A common stock on the date of grant. RSUs vest either annually over a three-year period from the grant date or upon the third anniversary of the grant date and receipt of the shares underlying RSUs is deferred for a minimum of three years or such greater number of years as is chosen by the employee. An aggregate of 2,000,000 shares of Class A common stock may be issued under the Management Stock Purchase Plan. The Company granted 30,561 RSUs and 44,777 RSUs in the first three months of 2014 and 2013, respectively. | ||||||||||||||||||||||||||
The fair value of each RSU issued under the Management Stock Purchase Plan is estimated on the date of grant using the Black-Scholes-Merton Model based on the following weighted average assumptions: | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Expected life (years) | 3 | 3 | ||||||||||||||||||||||||
Expected stock price volatility | 31.2 | % | 34.1 | % | ||||||||||||||||||||||
Expected dividend yield | 0.9 | % | 0.9 | % | ||||||||||||||||||||||
Risk-free interest rate | 0.7 | % | 0.4 | % | ||||||||||||||||||||||
The above assumptions were used to determine the weighted average grant-date fair value of RSUs of $22.57 and $18.05 in 2014 and 2013, respectively. | ||||||||||||||||||||||||||
A more detailed description of each of these plans can be found in Note 12 of Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. | ||||||||||||||||||||||||||
Shipping and Handling | ' | |||||||||||||||||||||||||
Shipping and Handling | ||||||||||||||||||||||||||
The Company’s shipping and handling costs included in selling, general and administrative expenses were $14.7 million and $13.9 million for the first quarters of 2014 and 2013, respectively. The 2013 shipping and handling costs disclosed have been updated to include handling costs in order to be comparable with the current quarter. | ||||||||||||||||||||||||||
Research and Development | ' | |||||||||||||||||||||||||
Research and Development | ||||||||||||||||||||||||||
Research and development costs included in selling, general and administrative expenses were $6.3 million and $5.4 million for the first quarters of 2014 and 2013, respectively. | ||||||||||||||||||||||||||
Taxes, Other than Income Taxes | ' | |||||||||||||||||||||||||
Taxes, Other than Income Taxes | ||||||||||||||||||||||||||
Taxes assessed by governmental authorities on sale transactions are recorded on a net basis and excluded from sales in the Company’s consolidated statements of operations. | ||||||||||||||||||||||||||
Income Taxes | ' | |||||||||||||||||||||||||
Income Taxes | ||||||||||||||||||||||||||
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. | ||||||||||||||||||||||||||
New Accounting Standards | ' | |||||||||||||||||||||||||
New Accounting Standards | ||||||||||||||||||||||||||
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, “Presentation of Financial Statements and Property, Plant, and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. ASU 2014-08 will change the definition of discontinued operations and limit discontinued operations presentation to disposals of components representing a strategic shift that will have a major effect on the operations and financial results of the issuer. ASU 2014-08 is effective in the first quarter of 2015 for public companies with calendar year ends, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. |
Accounting_Policies_Tables
Accounting Policies (Tables) | 3 Months Ended | |||||||||||||||||||||||||
Mar. 30, 2014 | ||||||||||||||||||||||||||
Accounting Policies | ' | |||||||||||||||||||||||||
Changes in the carrying amount of goodwill by geographic segment | ' | |||||||||||||||||||||||||
March 30, 2014 | ||||||||||||||||||||||||||
Gross Balance | Accumulated Impairment Losses | Net Goodwill | ||||||||||||||||||||||||
Balance | Acquired | Foreign | Balance | Balance | Impairment | Balance | March 30, | |||||||||||||||||||
January 1, | During | Currency | March 30, | January 1, | Loss | March 30, | 2014 | |||||||||||||||||||
2014 | the | Translation | 2014 | 2014 | During the | 2014 | ||||||||||||||||||||
Period | and Other | Period | ||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Americas | $ | 224.7 | $ | — | $ | (0.4 | ) | $ | 224.3 | $ | (24.5 | ) | $ | — | $ | (24.5 | ) | $ | 199.8 | |||||||
Europe, Middle East and Africa (EMEA) | 301.3 | — | (0.1 | ) | 301.2 | — | — | — | 301.2 | |||||||||||||||||
Asia-Pacific | 13.3 | — | (0.4 | ) | 12.9 | — | — | — | 12.9 | |||||||||||||||||
Total | $ | 539.3 | $ | — | $ | (0.9 | ) | $ | 538.4 | $ | (24.5 | ) | $ | — | $ | (24.5 | ) | $ | 513.9 | |||||||
March 31, 2013 | ||||||||||||||||||||||||||
Gross Balance | Accumulated Impairment Losses | Net Goodwill | ||||||||||||||||||||||||
Balance | Acquired | Foreign | Balance | Balance | Impairment | Balance | March 31, | |||||||||||||||||||
January 1, | During the | Currency | March 31, | January 1, | Loss During | March 31, | 2013 | |||||||||||||||||||
2013 | Period | Translation | 2013 | 2013 | the Period | 2013 | ||||||||||||||||||||
and Other | ||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Americas | $ | 225.6 | $ | — | $ | (0.3 | ) | $ | 225.3 | $ | (24.2 | ) | $ | — | $ | (24.2 | ) | $ | 201.1 | |||||||
EMEA | 289.7 | — | (8.3 | ) | 281.4 | — | — | — | 281.4 | |||||||||||||||||
Asia-Pacific | 12.9 | — | — | 12.9 | — | — | — | 12.9 | ||||||||||||||||||
Total | $ | 528.2 | $ | — | $ | (8.6 | ) | $ | 519.6 | $ | (24.2 | ) | $ | — | $ | (24.2 | ) | $ | 495.4 | |||||||
Intangible assets | ' | |||||||||||||||||||||||||
March 30, 2014 | December 31, 2013 | |||||||||||||||||||||||||
Gross | Accumulated | Net | Gross | Accumulated | Net | |||||||||||||||||||||
Carrying | Amortization | Carrying | Carrying | Amortization | Carrying | |||||||||||||||||||||
Amount | Amount | Amount | Amount | |||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Patents | $ | 16.5 | $ | (12.8 | ) | $ | 3.7 | $ | 16.6 | $ | (12.6 | ) | $ | 4 | ||||||||||||
Customer relationships | 132.9 | (79.1 | ) | 53.8 | 133 | (76.4 | ) | 56.6 | ||||||||||||||||||
Technology | 26.7 | (11.4 | ) | 15.3 | 26.9 | (10.9 | ) | 16 | ||||||||||||||||||
Trade Names | 13.6 | (3.3 | ) | 10.3 | 13.7 | (3.0 | ) | 10.7 | ||||||||||||||||||
Other | 8.8 | (5.6 | ) | 3.2 | 8.8 | (5.6 | ) | 3.2 | ||||||||||||||||||
Total amortizable intangibles | 198.5 | (112.2 | ) | 86.3 | 199 | (108.5 | ) | 90.5 | ||||||||||||||||||
Indefinite-lived intangible assets | 41.9 | — | 41.9 | 41.9 | — | 41.9 | ||||||||||||||||||||
Total | $ | 240.4 | $ | (112.2 | ) | $ | 128.2 | $ | 240.9 | $ | (108.5 | ) | $ | 132.4 | ||||||||||||
Schedule of weighted average assumptions used to estimate the grant-date fair value of restricted stock units | ' | |||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Expected life (years) | 3 | 3 | ||||||||||||||||||||||||
Expected stock price volatility | 31.2 | % | 34.1 | % | ||||||||||||||||||||||
Expected dividend yield | 0.9 | % | 0.9 | % | ||||||||||||||||||||||
Risk-free interest rate | 0.7 | % | 0.4 | % |
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 3 Months Ended | |||||||
Mar. 30, 2014 | ||||||||
Discontinued Operations | ' | |||||||
Schedule of pretax profit or losses in discontinued operations | ' | |||||||
First Quarter Ended | ||||||||
March 30, | March 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Austroflex pretax (loss) profit in discontinued operations | $ | — | $ | (0.2 | ) | |||
Revenues reported in discontinued operations | ' | |||||||
First Quarter Ended | ||||||||
March 30, | March 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Austroflex revenues | $ | — | $ | 3.2 | ||||
Financial_Instruments_and_Deri1
Financial Instruments and Derivative Instruments (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 30, 2014 | |||||||||||||||||
Financial Instruments and Derivative Instruments | ' | ||||||||||||||||
Schedule of fair value of financial assets and liabilities | ' | ||||||||||||||||
Fair Value Measurements at March 30, 2014 Using: | |||||||||||||||||
Quoted Prices in | Significant Other | Significant | |||||||||||||||
Active | Observable | Unobservable | |||||||||||||||
Markets for Identical | Inputs | Inputs | |||||||||||||||
Assets | |||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
(in millions) | |||||||||||||||||
Assets | |||||||||||||||||
Plan asset for deferred compensation(1) | $ | 4.4 | $ | 4.4 | $ | — | $ | — | |||||||||
Total assets | $ | 4.4 | $ | 4.4 | $ | — | $ | — | |||||||||
Liabilities | |||||||||||||||||
Plan liability for deferred compensation(2) | $ | 4.4 | $ | 4.4 | $ | — | $ | — | |||||||||
Contingent consideration(3) | 2.1 | — | — | 2.1 | |||||||||||||
Total liabilities | $ | 6.5 | $ | 4.4 | $ | — | $ | 2.1 | |||||||||
Fair Value Measurements at December 31, 2013 Using: | |||||||||||||||||
Quoted Prices in | Significant Other | Significant | |||||||||||||||
Active | Observable | Unobservable | |||||||||||||||
Markets for Identical | Inputs | Inputs | |||||||||||||||
Assets | |||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
(in millions) | |||||||||||||||||
Assets | |||||||||||||||||
Plan asset for deferred compensation(1) | $ | 4.6 | $ | 4.6 | $ | — | $ | — | |||||||||
Total assets | $ | 4.6 | $ | 4.6 | $ | — | $ | — | |||||||||
Liabilities | |||||||||||||||||
Plan liability for deferred compensation(2) | $ | 4.6 | $ | 4.6 | $ | — | $ | — | |||||||||
Contingent consideration(3) | 4.4 | — | — | 4.4 | |||||||||||||
Total liabilities | $ | 9 | $ | 4.6 | $ | — | $ | 4.4 | |||||||||
(1) Included on the Company’s consolidated balance sheet in other assets (other, net). | |||||||||||||||||
(2) Included on the Company’s consolidated balance sheet in accrued compensation and benefits. | |||||||||||||||||
(3) Included on the Company’s consolidated balance sheet in accrued expenses and other liabilities as of March 30, 2014 and in other noncurrent liabilities and accrued expenses and other liabilities as of December 31, 2013. | |||||||||||||||||
Summary of the changes in fair value of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) | ' | ||||||||||||||||
Balance | Purchases, | Total realized and | Balance | ||||||||||||||
unrealized (gains) | |||||||||||||||||
losses included in: | |||||||||||||||||
December 31, | sales, | Net earnings | Comprehensive | March 30, | |||||||||||||
2013 | settlements, net | adjustments | income | 2014 | |||||||||||||
(in millions) | |||||||||||||||||
Contingent consideration | $ | 4.4 | $ | (2.2 | ) | $ | — | $ | (0.1 | ) | $ | 2.1 | |||||
Carrying amount and estimated fair market value of the company's long-term debt, including current portion | ' | ||||||||||||||||
March 30, | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
(in millions) | |||||||||||||||||
Carrying amount | $ | 307.3 | $ | 307.7 | |||||||||||||
Estimated fair value | $ | 332.3 | $ | 333.4 |
Restructuring_and_Other_Charge1
Restructuring and Other Charges, Net (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 30, 2014 | |||||||||||||||||
Restructuring and Other Charges, Net | ' | ||||||||||||||||
Summary of the pre-tax cost by restructuring program | ' | ||||||||||||||||
First Quarter Ended | |||||||||||||||||
March 30, | March 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
(in millions) | |||||||||||||||||
Restructuring costs: | |||||||||||||||||
2013 Actions | 0.4 | — | |||||||||||||||
Other Actions | 3.8 | 2.2 | |||||||||||||||
Total restructuring and other charges, net | $ | 4.2 | $ | 2.2 | |||||||||||||
Summary of recorded pre-tax restructuring and other charges, net by business segments | ' | ||||||||||||||||
First Quarter Ended | |||||||||||||||||
March 30, | March 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
(in millions) | |||||||||||||||||
Americas | $ | 1.9 | $ | 0.2 | |||||||||||||
EMEA | 1.5 | 2 | |||||||||||||||
Corporate | 0.8 | — | |||||||||||||||
Total | $ | 4.2 | $ | 2.2 | |||||||||||||
2013 Actions | ' | ||||||||||||||||
Restructuring and other charges | ' | ||||||||||||||||
Summary of European footprint program reserve related to severance | ' | ||||||||||||||||
First Quarter Ended | |||||||||||||||||
March 30, 2014 | |||||||||||||||||
(in millions) | |||||||||||||||||
Balance at December 31, 2013 | $ | 2 | |||||||||||||||
Net pre-tax restructuring charges | 0.4 | ||||||||||||||||
Utilization and foreign currency impact | (0.3 | ) | |||||||||||||||
Balance at March 30, 2014 | $ | 2.1 | |||||||||||||||
Summary of total expected, incurred and remaining pre-tax costs for European footprint program actions by type | ' | ||||||||||||||||
Severance | Legal and | Asset | Facility | Total | |||||||||||||
consultancy | write-downs | exit | |||||||||||||||
and other | |||||||||||||||||
(in millions) | |||||||||||||||||
Expected costs | $ | 12.3 | $ | 1.3 | $ | 0.2 | $ | 0.2 | $ | 14 | |||||||
Costs incurred—2013 | (4.1 | ) | — | — | — | (4.1 | ) | ||||||||||
Costs incurred—first quarter 2014 | (0.1 | ) | — | (0.2 | ) | (0.1 | ) | (0.4 | ) | ||||||||
Remaining costs at March 30, 2014 | $ | 8.1 | $ | 1.3 | $ | — | $ | 0.1 | $ | 9.5 |
Earnings_per_Share_Tables
Earnings per Share (Tables) | 3 Months Ended | |||||||||||||||||
Mar. 30, 2014 | ||||||||||||||||||
Earnings per Share | ' | |||||||||||||||||
Summary of reconciliation of the calculation of earnings per share | ' | |||||||||||||||||
For the First Quarter Ended March 30, 2014 | For the First Quarter Ended March 31, 2013 | |||||||||||||||||
Income | Shares | Per Share | Income | Shares | Per Share | |||||||||||||
(Numerator) | (Denominator) | Amount | (Numerator) | (Denominator) | Amount | |||||||||||||
(amounts in millions, except per share amounts) | ||||||||||||||||||
Basic EPS | ||||||||||||||||||
Net income: | ||||||||||||||||||
Continuing operations | $ | 14.1 | 35.4 | $ | 0.4 | $ | 16.3 | 35.5 | $ | 0.46 | ||||||||
Discontinued operations | — | — | (0.2 | ) | (0.01 | ) | ||||||||||||
Net income | $ | 14.1 | $ | 0.4 | $ | 16.1 | $ | 0.45 | ||||||||||
Effect of dilutive securities | ||||||||||||||||||
Common stock equivalents | 0.1 | 0.1 | ||||||||||||||||
Diluted EPS | ||||||||||||||||||
Net income: | ||||||||||||||||||
Continuing operations | $ | 14.1 | $ | 0.4 | $ | 16.3 | $ | 0.46 | ||||||||||
Discontinued operations | — | — | (0.2 | ) | (0.01 | ) | ||||||||||||
Net income | $ | 14.1 | 35.5 | $ | 0.4 | $ | 16.1 | 35.6 | $ | 0.45 |
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | |||||||
Mar. 30, 2014 | ||||||||
Segment Information | ' | |||||||
Summary of the Company's significant accounts and balances by segment, reconciled to the consolidated totals | ' | |||||||
First Quarter Ended | ||||||||
March 30, | March 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Net sales | ||||||||
Americas | $ | 219.1 | $ | 213 | ||||
EMEA | 139.1 | 139.2 | ||||||
Asia-Pacific | 7 | 6.7 | ||||||
Consolidated net sales | $ | 365.2 | $ | 358.9 | ||||
Operating income (loss) | ||||||||
Americas | $ | 22.6 | $ | 22.1 | ||||
EMEA | 8.9 | 10.9 | ||||||
Asia-Pacific | 0.9 | 2.9 | ||||||
Subtotal reportable segments | 32.4 | 35.9 | ||||||
Corporate (*) | (6.6 | ) | (7.3 | ) | ||||
Consolidated operating income | 25.8 | 28.6 | ||||||
Interest income | 0.1 | 0.1 | ||||||
Interest expense | (4.9 | ) | (6.0 | ) | ||||
Other income (expense), net | (0.4 | ) | — | |||||
Income from continuing operations before income taxes | $ | 20.6 | $ | 22.7 | ||||
Capital expenditures | ||||||||
Americas | $ | 2.2 | $ | 8.2 | ||||
EMEA | 2.5 | 2.2 | ||||||
Asia-Pacific | 0.3 | 0.6 | ||||||
Consolidated capital expenditures | $ | 5 | $ | 11 | ||||
Depreciation and amortization | ||||||||
Americas | $ | 4.9 | $ | 5 | ||||
EMEA | 6.6 | 6.5 | ||||||
Asia-Pacific | 0.4 | 0.7 | ||||||
Consolidated depreciation and amortization | $ | 11.9 | $ | 12.2 | ||||
Identifiable assets (at end of period) | ||||||||
Americas | $ | 767.9 | $ | 810.8 | ||||
EMEA | 875.9 | 783.7 | ||||||
Asia-Pacific | 71.4 | 91.8 | ||||||
Discontinued operations | — | 11.8 | ||||||
Consolidated identifiable assets | $ | 1,715.20 | $ | 1,698.10 | ||||
Property, plant and equipment, net (at end of period) | ||||||||
Americas | $ | 84.5 | $ | 85.2 | ||||
EMEA | 117.7 | 120.5 | ||||||
Asia-Pacific | 13.8 | 14.8 | ||||||
Consolidated property, plant and equipment, net | $ | 216 | $ | 220.5 | ||||
* Corporate expenses are primarily for administrative compensation expense, internal controls costs, professional fees, including corporate-related legal and audit expenses, shareholder services and benefit administration costs. | ||||||||
Schedule of U.S. net sales and U.S. property, plant and equipment of the Company's Americas segment | ' | |||||||
First Quarter Ended | ||||||||
March 30, | March 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
U.S. net sales | $ | 201.6 | $ | 192.8 | ||||
U.S. property, plant and equipment (at end of period) | $ | 80 | $ | 79.9 | ||||
Schedule of intersegment sales for Americas, EMEA and Asia-Pacific | ' | |||||||
First Quarter Ended | ||||||||
March 30, | March 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Intersegment Sales | ||||||||
Americas | $ | 1.2 | $ | 1.3 | ||||
EMEA | 3.6 | 2.7 | ||||||
Asia-Pacific | 39 | 41.6 | ||||||
Intersegment sales | $ | 43.8 | $ | 45.6 |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended | ||||||||||
Mar. 30, 2014 | |||||||||||
Accumulated Other Comprehensive Income (Loss) | ' | ||||||||||
Schedule of amounts recognized in accumulated other comprehensive income (loss) | ' | ||||||||||
Foreign | Pension | Accumulated Other | |||||||||
Currency | Adjustment | Comprehensive | |||||||||
Translation | Income (Loss) | ||||||||||
(in millions) | |||||||||||
Balance December 31, 2013 | $ | 37.9 | $ | (25.9 | ) | $ | 12 | ||||
Change in period | (4.3 | ) | 0.2 | (4.1 | ) | ||||||
Balance March 30, 2014 | $ | 33.6 | $ | (25.7 | ) | $ | 7.9 | ||||
Balance December 31, 2012 | $ | 14.4 | $ | (25.2 | ) | $ | (10.8 | ) | |||
Change in period | (19.9 | ) | 0.2 | (19.7 | ) | ||||||
Balance March 31, 2013 | $ | (5.5 | ) | $ | (25.0 | ) | $ | (30.5 | ) |
Defined_Benefit_Plans_Tables
Defined Benefit Plans (Tables) | 3 Months Ended | |||||||
Mar. 30, 2014 | ||||||||
Defined Benefit Plans | ' | |||||||
Schedule of the components of net periodic benefit cost | ' | |||||||
First Quarter Ended | ||||||||
March 30, | March 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Service cost — administrative costs | $ | 0.2 | $ | 0.1 | ||||
Interest costs on benefits obligation | 1.5 | 1.4 | ||||||
Expected return on assets | (1.5 | ) | (1.7 | ) | ||||
Net actuarial loss amortization | 0.3 | 0.2 | ||||||
Net periodic benefit cost | $ | 0.5 | $ | — | ||||
Information related to the company's pension funds cash flow | ' | |||||||
First Quarter Ended | ||||||||
March 30, 2014 | March 31, 2013 | |||||||
(in millions) | ||||||||
Employer contributions | $ | 0.2 | $ | 0.2 | ||||
Basis_of_Presentation_Details
Basis of Presentation (Details) | 3 Months Ended |
Mar. 30, 2014 | |
Basis of Presentation | ' |
Length of fiscal year | '364 days |
Length of fiscal quarter | '91 days |
Accounting_Policies_Details
Accounting Policies (Details) (USD $) | 3 Months Ended | 3 Months Ended | ||||||||
In Millions, unless otherwise specified | Mar. 30, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Mar. 30, 2014 | Mar. 31, 2013 | Mar. 30, 2014 | Mar. 31, 2013 | Mar. 30, 2014 | Mar. 31, 2013 | Dec. 31, 2012 |
Americas | Americas | Europe, Middle East and Africa (EMEA) | Europe, Middle East and Africa (EMEA) | Asia-Pacific | Asia-Pacific | Asia-Pacific | ||||
Gross Balance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | $539.30 | $528.20 | ' | $224.70 | $225.60 | $301.30 | $289.70 | $13.30 | $12.90 | $12.90 |
Foreign Currency Translation and Other | -0.9 | -8.6 | ' | -0.4 | -0.3 | -0.1 | -8.3 | -0.4 | ' | ' |
Balance at the end of the period | 538.4 | 519.6 | ' | 224.3 | 225.3 | 301.2 | 281.4 | 12.9 | 12.9 | 12.9 |
Accumulated Impairment Losses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | -24.5 | -24.2 | ' | -24.5 | -24.2 | ' | ' | ' | ' | ' |
Balance at the end of the period | -24.5 | -24.2 | ' | -24.5 | -24.2 | ' | ' | ' | ' | ' |
Net Goodwill | $513.90 | $495.40 | $514.80 | $199.80 | $201.10 | $301.20 | $281.40 | $12.90 | $12.90 | ' |
Accounting_Policies_Details_2
Accounting Policies (Details 2) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 30, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Intangible assets subject to amortization | ' | ' | ' |
Gross Carrying Amount | $198.50 | ' | $199 |
Accumulated Amortization | -112.2 | ' | -108.5 |
Net Carrying Amount | 86.3 | ' | 90.5 |
Indefinite-lived intangible assets | ' | ' | ' |
Indefinite-lived intangible assets | 41.9 | ' | 41.9 |
Intangible assets | ' | ' | ' |
Gross Carrying Amount | 240.4 | ' | 240.9 |
Net Carrying Amount | 128.2 | ' | 132.4 |
Weighted-average remaining life | '8 years 3 months 18 days | ' | ' |
Aggregate amortization expense for amortized intangible assets | 3.7 | 3.7 | ' |
Future amortization expense | ' | ' | ' |
Future amortization expense for remainder of 2014 | 11.1 | ' | ' |
Future amortization expense, 2015 | 14.6 | ' | ' |
Future amortization expense, 2016 | 14.2 | ' | ' |
Future amortization expense, 2017 | 13.8 | ' | ' |
Future amortization expense, 2018 | 9.9 | ' | ' |
Patents | ' | ' | ' |
Intangible assets subject to amortization | ' | ' | ' |
Gross Carrying Amount | 16.5 | ' | 16.6 |
Accumulated Amortization | -12.8 | ' | -12.6 |
Net Carrying Amount | 3.7 | ' | 4 |
Intangible assets | ' | ' | ' |
Weighted-average remaining life | '5 years 6 months | ' | ' |
Customer relationships | ' | ' | ' |
Intangible assets subject to amortization | ' | ' | ' |
Gross Carrying Amount | 132.9 | ' | 133 |
Accumulated Amortization | -79.1 | ' | -76.4 |
Net Carrying Amount | 53.8 | ' | 56.6 |
Intangible assets | ' | ' | ' |
Weighted-average remaining life | '5 years 3 months 18 days | ' | ' |
Technology | ' | ' | ' |
Intangible assets subject to amortization | ' | ' | ' |
Gross Carrying Amount | 26.7 | ' | 26.9 |
Accumulated Amortization | -11.4 | ' | -10.9 |
Net Carrying Amount | 15.3 | ' | 16 |
Intangible assets | ' | ' | ' |
Weighted-average remaining life | '11 years 3 months 18 days | ' | ' |
Trade Names | ' | ' | ' |
Intangible assets subject to amortization | ' | ' | ' |
Gross Carrying Amount | 13.6 | ' | 13.7 |
Accumulated Amortization | -3.3 | ' | -3 |
Net Carrying Amount | 10.3 | ' | 10.7 |
Intangible assets | ' | ' | ' |
Weighted-average remaining life | '10 years 8 months 12 days | ' | ' |
Other | ' | ' | ' |
Intangible assets subject to amortization | ' | ' | ' |
Gross Carrying Amount | 8.8 | ' | 8.8 |
Accumulated Amortization | -5.6 | ' | -5.6 |
Net Carrying Amount | $3.20 | ' | $3.20 |
Intangible assets | ' | ' | ' |
Weighted-average remaining life | '38 years 4 months 24 days | ' | ' |
Accounting_Policies_Details_3
Accounting Policies (Details 3) (USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 30, 2014 | Mar. 31, 2013 |
item | ||
Stock-based compensation | ' | ' |
Number of stock incentive plans | 1 | ' |
Shipping and Handling | ' | ' |
Shipping and handling costs included in selling, general and administrative expense | $14.70 | $13.90 |
Research and Development | ' | ' |
Research and development costs included in selling, general, and administrative expense | $6.30 | $5.40 |
ISOs | Class A | ' | ' |
Stock-based compensation | ' | ' |
Minimum exercise price as percentage of fair market value of common stock on grant date | 100.00% | ' |
NSOs | Class A | ' | ' |
Stock-based compensation | ' | ' |
Minimum exercise price as percentage of fair market value of common stock on grant date | 100.00% | ' |
2004 Stock Incentive Plan | Stock options | ' | ' |
Stock-based compensation | ' | ' |
Vesting period | '4 years | ' |
Percentage of stock options becoming exercisable | 25.00% | ' |
Expiration period | '10 years | ' |
Options granted (in shares) | 4,808 | 2,000 |
2004 Stock Incentive Plan | Restricted stock | ' | ' |
Stock-based compensation | ' | ' |
Granted (in shares) | 1,747 | 667 |
2004 Stock Incentive Plan | Deferred shares | ' | ' |
Stock-based compensation | ' | ' |
Vesting rate per year for maximum vesting period | 0.33 | ' |
2004 Stock Incentive Plan | Deferred shares | Maximum | ' | ' |
Stock-based compensation | ' | ' |
Vesting period | '3 years | ' |
Management Stock Purchase Plan | Class A | ' | ' |
Stock-based compensation | ' | ' |
Shares authorized | 2,000,000 | ' |
Management Stock Purchase Plan | Restricted stock units (RSUs) | ' | ' |
Stock-based compensation | ' | ' |
Granted (in shares) | 30,561 | 44,777 |
Fair value assumptions | ' | ' |
Expected life | '3 years | '3 years |
Expected stock price volatility (as a percent) | 31.20% | 34.10% |
Expected dividend yield (as a percent) | 0.90% | 0.90% |
Risk-free interest rate (as a percent) | 0.70% | 0.40% |
Weighted average grant-date fair value (in dollars per share) | $22.57 | $18.05 |
Management Stock Purchase Plan | Restricted stock units (RSUs) | Minimum | ' | ' |
Stock-based compensation | ' | ' |
Vesting period | '3 years | ' |
Management Stock Purchase Plan | Restricted stock units (RSUs) | Maximum | ' | ' |
Stock-based compensation | ' | ' |
Vesting period | '3 years | ' |
Management Stock Purchase Plan | Restricted stock units (RSUs) | Class A | ' | ' |
Stock-based compensation | ' | ' |
Number of common shares for each unit of award held | 1 | ' |
Exercise price as percentage of fair market value of common stock on grant date | 67.00% | ' |
Discontinued_Operations_Detail
Discontinued Operations (Details) (Austroflex, USD $) | 0 Months Ended | 3 Months Ended |
In Millions, unless otherwise specified | Aug. 01, 2013 | Mar. 31, 2013 |
Austroflex | ' | ' |
Discontinued Operations | ' | ' |
Proceeds from sale of outstanding shares of an indirectly wholly-owned subsidiary | $7.90 | ' |
Loss after tax on disposal of the business | 2.2 | ' |
Pretax (loss) profit in discontinued operations | ' | -0.2 |
Revenues | ' | $3.20 |
Financial_Instruments_and_Deri2
Financial Instruments and Derivative Instruments (Details) (Fair value measured on a recurring basis, USD $) | Mar. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Fair Value Measurements at Reporting Date | ' | ' |
Financial assets, cash flow hedges | $0 | $0 |
Financial liabilities, cash flow hedges | 0 | 0 |
Total | ' | ' |
Assets | ' | ' |
Plan asset for deferred compensation | 4.4 | 4.6 |
Total assets | 4.4 | 4.6 |
Liabilities | ' | ' |
Plan liability for deferred compensation | 4.4 | 4.6 |
Contingent consideration | 2.1 | 4.4 |
Total liabilities | 6.5 | 9 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' |
Assets | ' | ' |
Plan asset for deferred compensation | 4.4 | 4.6 |
Total assets | 4.4 | 4.6 |
Liabilities | ' | ' |
Plan liability for deferred compensation | 4.4 | 4.6 |
Total liabilities | 4.4 | 4.6 |
Significant Unobservable Inputs (Level 3) | ' | ' |
Liabilities | ' | ' |
Contingent consideration | 2.1 | 4.4 |
Total liabilities | $2.10 | $4.40 |
Financial_Instruments_and_Deri3
Financial Instruments and Derivative Instruments (Details 2) | 3 Months Ended | 12 Months Ended | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jan. 30, 2012 | Jan. 30, 2012 | Mar. 30, 2014 |
Tekmar | Tekmar | Tekmar | Tekmar | Tekmar | Contingent consideration | |
USD ($) | USD ($) | USD ($) | USD ($) | CAD | USD ($) | |
Reconciliation of changes in fair value of all financial assets and liabilities | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | ' | ' | ' | $4.40 |
Purchases, sales, settlements, net | ' | ' | ' | ' | ' | -2.2 |
Total realized and unrealized (gains) losses included in Comprehensive income | ' | ' | ' | ' | ' | -0.1 |
Balance at the ending of the period | ' | ' | ' | ' | ' | 2.1 |
Initial purchase price paid | ' | ' | ' | ' | 18 | ' |
Contingent liability of the acquisition date fair value | ' | ' | ' | 5.1 | ' | ' |
Contingent liability | ' | ' | ' | 0 | ' | ' |
Contingent liability in case of complete achievement of performance metrics | ' | ' | ' | 8.2 | ' | ' |
Increase in fair value of contingent liability based on a revised estimate of the fair value of the contingent consideration | ' | ' | 1 | ' | ' | ' |
Portion of contingent consideration paid on achievement of performance metrics | $2.20 | $1.20 | ' | ' | ' | ' |
Financial_Instruments_and_Deri4
Financial Instruments and Derivative Instruments (Details 3) | 3 Months Ended |
Mar. 30, 2014 | |
Derivative instruments | ' |
Percentage of projected intercompany purchases hedged by forward exchange contracts | 50.00% |
Period of projected intercompany purchase transactions | '12 months |
Financial_Instruments_and_Deri5
Financial Instruments and Derivative Instruments (Details 4) (USD $) | Mar. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Long-term debt | ' | ' |
Gross carrying amount | $307.30 | $307.70 |
Estimated fair value | $332.30 | $333.40 |
5.85% Senior notes due 2016 | ' | ' |
Senior notes | ' | ' |
Interest rate (as a percent) | 5.85% | ' |
5.05% Senior notes due 2020 | ' | ' |
Senior notes | ' | ' |
Interest rate (as a percent) | 5.05% | ' |
Restructuring_and_Other_Charge2
Restructuring and Other Charges, Net (Details) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | ||||||||
In Millions, unless otherwise specified | Mar. 30, 2014 | Mar. 31, 2013 | Mar. 30, 2014 | Mar. 30, 2014 | Mar. 31, 2013 | Mar. 30, 2014 | Mar. 31, 2013 | Jul. 30, 2013 | Mar. 30, 2014 | Mar. 30, 2014 | Mar. 31, 2013 |
Corporate | Europe, Middle East and Africa (EMEA) | Europe, Middle East and Africa (EMEA) | Americas | Americas | 2013 Actions | 2013 Actions | Other Actions | Other Actions | |||
Restructuring and other charges | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected pre-tax charge to earnings | ' | ' | ' | ' | ' | ' | ' | $14 | ' | ' | ' |
Net pre-tax restructuring charges, expected to be recorded through fiscal 2014 | ' | ' | ' | ' | ' | ' | ' | 10.3 | ' | ' | ' |
Total expected restructuring and related costs (after tax) | ' | ' | ' | ' | ' | ' | ' | 10 | ' | ' | ' |
Total restructuring and other charges, net | 4.2 | 2.2 | 0.8 | 1.5 | 2 | 1.9 | 0.2 | ' | ' | ' | ' |
Net after tax charge | ' | ' | ' | ' | ' | ' | ' | ' | 0.3 | ' | ' |
Net pre-tax restructuring charges | ' | ' | ' | ' | ' | ' | ' | ' | 0.4 | 3.8 | 2.2 |
Total restructuring and other charges, net | 4.2 | 2.2 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Remaining expected costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0 | ' |
Restructuring_and_Other_Charge3
Restructuring and Other Charges, Net (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | |||||
In Millions, unless otherwise specified | Mar. 30, 2014 | Mar. 31, 2013 | Mar. 30, 2014 | Dec. 31, 2013 | Mar. 30, 2014 | Mar. 30, 2014 | Dec. 31, 2013 | Mar. 30, 2014 | Mar. 30, 2014 | Mar. 30, 2014 |
Europe, Middle East and Africa (EMEA) | Europe, Middle East and Africa (EMEA) | Severance | Severance | Severance | Legal and consultancy | Asset write-downs | Facility exit and other | |||
2013 Actions | 2013 Actions | Europe | Europe, Middle East and Africa (EMEA) | Europe, Middle East and Africa (EMEA) | Europe, Middle East and Africa (EMEA) | Europe, Middle East and Africa (EMEA) | Europe, Middle East and Africa (EMEA) | |||
2013 Actions | 2013 Actions | 2013 Actions | 2013 Actions | 2013 Actions | 2013 Actions | |||||
Restructuring reserve | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | ' | ' | $2 | ' | ' | ' | ' | ' |
Net pre-tax restructuring charges | 4.2 | 2.2 | 0.4 | 4.1 | 0.4 | 0.1 | 4.1 | ' | 0.2 | 0.1 |
Utilization and foreign currency impact | ' | ' | ' | ' | -0.3 | ' | ' | ' | ' | ' |
Balance at the ending of the period | ' | ' | ' | ' | 2.1 | ' | ' | ' | ' | ' |
Summary of total expected, incurred and remaining pre-tax costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected costs | ' | ' | 14 | ' | ' | 12.3 | ' | 1.3 | 0.2 | 0.2 |
Costs incurred | -4.2 | -2.2 | -0.4 | -4.1 | -0.4 | -0.1 | -4.1 | ' | -0.2 | -0.1 |
Remaining costs | ' | ' | $9.50 | ' | ' | $8.10 | ' | $1.30 | ' | $0.10 |
Earnings_per_Share_Details
Earnings per Share (Details) (USD $) | 0 Months Ended | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Apr. 30, 2013 | Mar. 30, 2014 | Mar. 31, 2013 |
Net income: | ' | ' | ' |
Continuing operations | ' | $14.10 | $16.30 |
Discontinued operations | ' | ' | -0.2 |
NET INCOME | ' | 14.1 | 16.1 |
Shares | ' | ' | ' |
Shares | ' | 35,400,000 | 35,500,000 |
Per Share Amount | ' | ' | ' |
Continuing operations (in dollars per share) | ' | $0.40 | $0.46 |
Discontinued operations (in dollars per share) | ' | ' | ($0.01) |
NET INCOME (in dollars per share) | ' | $0.40 | $0.45 |
Dilutive securities, principally common stock options | ' | ' | ' |
Common stock equivalents (in shares) | ' | 100,000 | 100,000 |
Net Income | ' | ' | ' |
Continuing operations | ' | 14.1 | 16.3 |
(Loss) income from discontinued operations, net of tax | ' | ' | -0.2 |
Net income | ' | 14.1 | 16.1 |
Weighted average number of shares: | ' | ' | ' |
Weighted average number of shares | ' | 35,500,000 | 35,600,000 |
Per Share Amount | ' | ' | ' |
Continuing operations (in dollars per share) | ' | $0.40 | $0.46 |
Discontinued operations (in dollars per share) | ' | ' | ($0.01) |
Net income (in dollars per share) | ' | $0.40 | $0.45 |
Securities not included in the computation of diluted EPS | ' | ' | ' |
Options to purchase shares of Class A common stock | ' | 300,000 | 400,000 |
Number of shares of the entity's Class A common stock authorized to be repurchased | 90 | ' | ' |
Number of shares of Class A common stock repurchased | ' | 161,000 | ' |
Cost of shares of Class A common stock repurchased | ' | $9.40 | ' |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 30, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
item | |||
Segment Information | ' | ' | ' |
Number of geographic segments | 3 | ' | ' |
Number of operating segments | 3 | ' | ' |
Segment information | ' | ' | ' |
Net sales | $365.20 | $358.90 | ' |
Operating income (loss) | 25.8 | 28.6 | ' |
Interest income | 0.1 | 0.1 | ' |
Interest expense | -4.9 | -6 | ' |
Other income (expense), net | -0.4 | ' | ' |
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 20.6 | 22.7 | ' |
Capital expenditures | 5 | 11 | ' |
Depreciation and amortization | 11.9 | 12.2 | ' |
Identifiable assets (at end of period) | 1,715.20 | 1,698.10 | 1,740.20 |
Property, plant and equipment, net (at end of period) | 216 | 220.5 | 219.9 |
Discontinued operations | ' | ' | ' |
Segment information | ' | ' | ' |
Identifiable assets (at end of period) | ' | 11.8 | ' |
Reportable segments | ' | ' | ' |
Segment information | ' | ' | ' |
Operating income (loss) | 32.4 | 35.9 | ' |
Corporate | ' | ' | ' |
Segment information | ' | ' | ' |
Operating income (loss) | -6.6 | -7.3 | ' |
Intersegment sales | ' | ' | ' |
Segment information | ' | ' | ' |
Net sales | 43.8 | 45.6 | ' |
Americas | ' | ' | ' |
Segment information | ' | ' | ' |
Net sales | 219.1 | 213 | ' |
Capital expenditures | 2.2 | 8.2 | ' |
Depreciation and amortization | 4.9 | 5 | ' |
Identifiable assets (at end of period) | 767.9 | 810.8 | ' |
Property, plant and equipment, net (at end of period) | 84.5 | 85.2 | ' |
Americas | U.S. | ' | ' | ' |
Segment information | ' | ' | ' |
Net sales | 201.6 | 192.8 | ' |
Property, plant and equipment, net (at end of period) | 80 | 79.9 | ' |
Americas | Reportable segments | ' | ' | ' |
Segment information | ' | ' | ' |
Operating income (loss) | 22.6 | 22.1 | ' |
Americas | Intersegment sales | ' | ' | ' |
Segment information | ' | ' | ' |
Net sales | 1.2 | 1.3 | ' |
EMEA | ' | ' | ' |
Segment information | ' | ' | ' |
Net sales | 139.1 | 139.2 | ' |
Capital expenditures | 2.5 | 2.2 | ' |
Depreciation and amortization | 6.6 | 6.5 | ' |
Identifiable assets (at end of period) | 875.9 | 783.7 | ' |
Property, plant and equipment, net (at end of period) | 117.7 | 120.5 | ' |
EMEA | Reportable segments | ' | ' | ' |
Segment information | ' | ' | ' |
Operating income (loss) | 8.9 | 10.9 | ' |
EMEA | Intersegment sales | ' | ' | ' |
Segment information | ' | ' | ' |
Net sales | 3.6 | 2.7 | ' |
Asia Pacific | ' | ' | ' |
Segment information | ' | ' | ' |
Net sales | 7 | 6.7 | ' |
Capital expenditures | 0.3 | 0.6 | ' |
Depreciation and amortization | 0.4 | 0.7 | ' |
Identifiable assets (at end of period) | 71.4 | 91.8 | ' |
Property, plant and equipment, net (at end of period) | 13.8 | 14.8 | ' |
Asia Pacific | Reportable segments | ' | ' | ' |
Segment information | ' | ' | ' |
Operating income (loss) | 0.9 | 2.9 | ' |
Asia Pacific | Intersegment sales | ' | ' | ' |
Segment information | ' | ' | ' |
Net sales | $39 | $41.60 | ' |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | Mar. 30, 2014 | Dec. 31, 2013 | Mar. 30, 2014 | Mar. 31, 2013 | Mar. 30, 2014 | Mar. 31, 2013 | Mar. 30, 2014 | Mar. 31, 2013 |
In Millions, unless otherwise specified | Foreign Currency Translation | Foreign Currency Translation | Pension Adjustment | Pension Adjustment | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) | ||
Changes in accumulated other comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | $7.90 | $12 | $37.90 | $14.40 | ($25.90) | ($25.20) | $12 | ($10.80) |
Change in period | ' | ' | -4.3 | -19.9 | 0.2 | 0.2 | -4.1 | -19.7 |
Balance at the end of the period | $7.90 | $12 | $33.60 | ($5.50) | ($25.70) | ($25) | $7.90 | ($30.50) |
Debt_Details
Debt (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 30, 2014 |
Credit Agreement | ' |
Credit Agreement | ' |
Multi-currency borrowing capacity | $500 |
Term of senior unsecured revolving credit facility | '5 years |
Potential additional borrowing capacity | 500 |
Sublimit on letters of credit | 100 |
Unused and available credit under the credit agreement | 476.4 |
Stand-by letters of credit outstanding | $23.60 |
Eurocurrency rate loans | LIBOR | ' |
Credit Agreement | ' |
Variable interest rate basis | 'LIBOR |
Eurocurrency rate loans | LIBOR | Minimum | ' |
Credit Agreement | ' |
Interest rate added to base rate (as a percent) | 0.98% |
Eurocurrency rate loans | LIBOR | Maximum | ' |
Credit Agreement | ' |
Interest rate added to base rate (as a percent) | 1.45% |
Base rate loans and swing line loans | LIBOR | ' |
Credit Agreement | ' |
Interest rate added to base rate (as a percent) | 1.00% |
Variable interest rate basis | 'LIBOR |
Base rate loans and swing line loans | LIBOR | Minimum | ' |
Credit Agreement | ' |
Interest rate added to base rate (as a percent) | 0.00% |
Base rate loans and swing line loans | LIBOR | Maximum | ' |
Credit Agreement | ' |
Interest rate added to base rate (as a percent) | 0.45% |
Base rate loans and swing line loans | Federal funds | ' |
Credit Agreement | ' |
Interest rate added to base rate (as a percent) | 0.50% |
Variable interest rate basis | 'Federal Funds Rate |
Base rate loans and swing line loans | Prime Rate | ' |
Credit Agreement | ' |
Variable interest rate basis | 'Prime Rate |
Contingencies_and_Environmenta1
Contingencies and Environmental Remediation (Details) (USD $) | 0 Months Ended | 3 Months Ended | |
In Millions, unless otherwise specified | Dec. 12, 2013 | Mar. 30, 2014 | Dec. 31, 2013 |
Litigation contingencies | ' | ' | ' |
Reasonably possible loss in excess of the amount accrued for its legal contingencies | ' | $11.50 | ' |
Trabakoolas et al., v, Watts Water Technologies, Inc., et al. | ' | ' | ' |
Litigation contingencies | ' | ' | ' |
Total settlement amount | 23 | ' | ' |
Possible loss | 14 | ' | ' |
Insurance proceeds | 9 | ' | ' |
Liability recorded | ' | 21.4 | 22.6 |
Liability recorded, current | ' | ' | 12.7 |
Liability recorded, noncurrent | ' | ' | 9.9 |
Insurance proceeds, current assets | ' | ' | 9 |
Reduction in liability | ' | $1.20 | ' |
Asbestos Litigation | ' | ' | ' |
Litigation contingencies | ' | ' | ' |
Number of lawsuits the entity is defending in different jurisdictions | ' | 44 | ' |
Defined_Benefit_Plans_Details
Defined Benefit Plans (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 30, 2014 | Mar. 31, 2013 |
Components of net periodic benefit cost | ' | ' |
Service cost - administrative costs | $0.20 | $0.10 |
Interest costs on benefits obligation | 1.5 | 1.4 |
Expected return on assets | -1.5 | -1.7 |
Net actuarial loss amortization | 0.3 | 0.2 |
Net periodic benefit cost | 0.5 | ' |
Information related to the Company's pension funds cash flow | ' | ' |
Employer contributions | 0.2 | 0.2 |
Expected employer contributions in remainder of fiscal year | $0.60 | ' |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | Apr. 29, 2014 | Apr. 29, 2014 | 15-May-14 | 15-May-14 |
Dividend Declared | Dividend Declared | Subsequent event | Subsequent event | |
Class A common stock | Class B common stock | Minimum | Maximum | |
Subsequent events | ' | ' | ' | ' |
Quarterly dividend declared (in dollars per share) | $0.15 | $0.15 | ' | ' |
Term for settlement of liabilities to plan participants under SERP | ' | ' | '12 months | '24 months |