Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 17, 2017 | Jul. 02, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Kadant Inc. | ||
Entity Central Index Key | 886,346 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 10,937,627 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 560,179 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Thousands | Dec. 31, 2016 | Jan. 02, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 71,487 | $ 65,530 |
Restricted cash | 2,082 | 1,406 |
Accounts receivable, less allowances of $2,395 and $2,163 | 65,963 | 64,321 |
Inventories | 54,951 | 56,758 |
Unbilled contract costs and fees | 3,068 | 6,580 |
Other current assets | 9,799 | 10,525 |
Total Current Assets | 207,350 | 205,120 |
Property, Plant, and Equipment, at Cost, Net | 47,704 | 42,293 |
Other Assets | 11,452 | 11,002 |
Intangible Assets, Net | 52,730 | 38,032 |
Goodwill | 151,455 | 119,051 |
Total Assets | 470,691 | 415,498 |
Current Liabilities: | ||
Short-term obligations (Note 6) | 643 | 5,250 |
Accounts payable | 23,929 | 24,418 |
Accrued payroll and employee benefits | 20,508 | 19,583 |
Customer deposits | 21,168 | 20,123 |
Accrued income taxes | 2,739 | 5,333 |
Other current liabilities | 19,926 | 21,921 |
Total Current Liabilities | 88,913 | 96,628 |
Long-Term Deferred Income Taxes (Note 5) | 14,631 | 8,992 |
Other Long-Term Liabilities (Note 3) | 17,100 | 15,933 |
Long-Term Obligations (Note 6) | 65,768 | 26,000 |
Commitments and Contingencies (Note 7) | ||
Stockholders' Equity (Notes 3 and 4): | ||
Preferred stock, $.01 par value, 5,000,000 shares authorized; none issued | 0 | 0 |
Common stock, $.01 par value, 150,000,000 shares authorized; 14,624,159 shares issued | 146 | 146 |
Capital in excess of par value | 101,405 | 100,536 |
Retained earnings | 321,050 | 297,258 |
Treasury stock at cost, 3,686,532 and 3,850,779 shares | (90,335) | (94,359) |
Accumulated other comprehensive items (Note 13) | (49,637) | (36,972) |
Total Kadant Stockholders' Equity | 282,629 | 266,609 |
Noncontrolling interest | 1,650 | 1,336 |
Total Stockholders' Equity | 284,279 | 267,945 |
Total Liabilities and Stockholders' Equity | $ 470,691 | $ 415,498 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Jan. 02, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 2,395 | $ 2,163 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, issued (in shares) | 14,624,159 | 14,624,159 |
Treasury stock (in shares) | 3,686,532 | 3,850,779 |
Consolidated Statement of Incom
Consolidated Statement of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Income Statement [Abstract] | |||
Revenues (Note 11) | $ 414,126 | $ 390,107 | $ 402,127 |
Costs and Operating Expenses: | |||
Cost of revenues | 225,737 | 209,982 | 223,754 |
Selling, general, and administrative expenses | 135,753 | 122,814 | 129,319 |
Research and development expenses | 7,380 | 6,677 | 6,163 |
Other income and restructuring costs (Note 8) | (317) | 515 | 805 |
Total Costs and Operating Expenses | 368,553 | 339,988 | 360,041 |
Operating Income | 45,573 | 50,119 | 42,086 |
Interest Income | 269 | 200 | 398 |
Interest Expense | (1,293) | (948) | (966) |
Income from Continuing Operations Before Provision for Income Taxes | 44,549 | 49,371 | 41,518 |
Provision for Income Taxes (Note 5) | 12,083 | 14,762 | 12,447 |
Income from Continuing Operations | 32,466 | 34,609 | 29,071 |
Income (Loss) from Discontinued Operation (net of income tax (provision) benefit of $(2), $(43), and $14 in 2016, 2015, and 2014, respectively) | 3 | 74 | (23) |
Net Income | 32,469 | 34,683 | 29,048 |
Net Income Attributable to Noncontrolling Interest | (392) | (294) | (389) |
Net Income Attributable to Kadant | 32,077 | 34,389 | 28,659 |
Amounts Attributable to Kadant: | |||
Income from Continuing Operations | 32,074 | 34,315 | 28,682 |
Income (Loss) from Discontinued Operation | 3 | 74 | (23) |
Net Income Attributable to Kadant | $ 32,077 | $ 34,389 | $ 28,659 |
Earnings per Share from Continuing Operations Attributable to Kadant (Note 12) | |||
Basic (in dollars per share) | $ 2.95 | $ 3.16 | $ 2.61 |
Diluted (in dollars per share) | 2.88 | 3.09 | 2.56 |
Earnings per Share Attributable to Kadant (Note 12) | |||
Basic (in dollars per share) | 2.95 | 3.16 | 2.61 |
Diluted (in dollars per share) | $ 2.88 | $ 3.10 | $ 2.56 |
Weighted Average Shares (Note 12) | |||
Basic (in shares) | 10,869 | 10,867 | 10,988 |
Diluted (in shares) | 11,149 | 11,094 | 11,210 |
Cash Dividends Declared per Common Share (in dollars per share) | $ 0.76 | $ 0.68 | $ 0.60 |
Consolidated Statement of Inco5
Consolidated Statement of Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Income Statement [Abstract] | |||
Income (Loss) from Discontinued Operation, income tax (provision) benefit | $ (2) | $ (43) | $ 14 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net Income | $ 32,469 | $ 34,683 | $ 29,048 |
Other Comprehensive Items: | |||
Foreign currency translation loss | (13,240) | (20,687) | (16,436) |
Pension and other post-retirement liability adjustments, net (net of tax provision (benefit) of $125, $107, and $(792) in 2016, 2015, and 2014, respectively) | 256 | 172 | (1,407) |
Deferred gain (loss) on hedging instruments (net of tax (benefit) provision of $(67), $84, and $151 in 2016, 2015, and 2014, respectively) | 241 | 563 | (159) |
Other Comprehensive Items | (12,743) | (19,952) | (18,002) |
Comprehensive Income | 19,726 | 14,731 | 11,046 |
Comprehensive Income Attributable to Noncontrolling Interest | (314) | (168) | (243) |
Comprehensive Income Attributable to Kadant | $ 19,412 | $ 14,563 | $ 10,803 |
Consolidated Statement of Comp7
Consolidated Statement of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Other Comprehensive Items: | |||
Pension and other post-retirement liability adjustments, tax provision (benefit) | $ 125 | $ 107 | $ (792) |
Deferred gain (loss) on hedging instruments, tax (benefit) provision | $ (67) | $ 84 | $ 151 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Operating Activities | |||
Net Income Attributable to Kadant | $ 32,077 | $ 34,389 | $ 28,659 |
Net income attributable to noncontrolling interest | 392 | 294 | 389 |
(Income) loss from discontinued operation | (3) | (74) | 23 |
Income from continuing operations | 32,466 | 34,609 | 29,071 |
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: | |||
Depreciation and amortization | 14,326 | 10,821 | 11,189 |
Stock-based compensation expense | 5,069 | 5,741 | 5,813 |
Tax benefits from stock-based compensation awards | 0 | (881) | (771) |
Provision for losses on accounts receivable | 453 | 379 | 246 |
(Gain) loss on sale of property, plant, and equipment | (350) | 4 | (118) |
Deferred income tax (benefit) provision | (613) | (1,706) | 2,951 |
Other items, net | 1,362 | (287) | 1,318 |
Contributions to U.S. pension plan | (1,080) | (1,080) | (1,080) |
Changes in current assets and liabilities, net of effects of acquisitions: | |||
Accounts receivable | 1,003 | (10,640) | 8,429 |
Unbilled contract costs and fees | 3,407 | (1,534) | (2,277) |
Inventories | 3,553 | (6,486) | 5,067 |
Other current assets | 753 | 1,495 | (563) |
Accounts payable | (5,238) | (1,752) | 652 |
Other current liabilities | (4,111) | 11,727 | (8,817) |
Net cash provided by continuing operations | 51,000 | 40,410 | 51,110 |
Net cash provided by (used in) discontinued operation | 3 | (38) | 5 |
Net cash provided by operating activities | 51,003 | 40,372 | 51,115 |
Investing Activities | |||
Acquisitions, net of cash acquired (Note 2) | (56,617) | 0 | (11,984) |
Purchases of property, plant, and equipment | (5,804) | (5,479) | (6,755) |
Proceeds from sale of property, plant, and equipment | 428 | 30 | 242 |
Net cash used in continuing operations for investing activities | (61,993) | (5,449) | (18,497) |
Financing Activities | |||
Proceeds from issuance of short- and long-term obligations | 51,046 | 24,000 | 24,512 |
Repayments of short- and long-term obligations | (18,429) | (18,611) | (36,953) |
Purchases of Company common stock | 0 | (9,906) | (15,136) |
Dividends paid | (8,038) | (7,179) | (6,339) |
Tax withholding payments related to stock-based compensation | (2,572) | (2,499) | (2,243) |
Proceeds from issuance of Company common stock | 2,350 | 754 | 1,119 |
Payment of contingent consideration (Note 2) | (1,091) | 0 | 0 |
Change in restricted cash | (789) | (1,066) | (299) |
Tax benefits from stock-based compensation awards | 0 | 881 | 771 |
Other items | 189 | 0 | 0 |
Net cash provided by (used in) continuing operations for financing activities | 22,666 | (13,626) | (34,568) |
Exchange Rate Effect on Cash and Cash Equivalents from Continuing Operations | (5,714) | (1,145) | (2,704) |
Change in Cash from Discontinued Operation | (5) | 0 | 0 |
Increase (Decrease) in Cash and Cash Equivalents from Continuing Operations | 5,957 | 20,152 | (4,654) |
Cash and Cash Equivalents at Beginning of Year | 65,530 | 45,378 | 50,032 |
Cash and Cash Equivalents at End of Year | $ 71,487 | $ 65,530 | $ 45,378 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Capital in Excess of Par Value | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Items | Noncontrolling Interest |
Beginning balance (in shares) at Dec. 28, 2013 | 14,624,159 | 3,524,742 | |||||
Beginning balance at Dec. 28, 2013 | $ 270,421 | $ 146 | $ 96,809 | $ 248,170 | $ (76,339) | $ 710 | $ 925 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income | 29,048 | 28,659 | 389 | ||||
Dividends declared | (6,580) | (6,580) | |||||
Activity under stock plans (in shares) | (169,858) | ||||||
Activity under stock plans | 4,937 | 1,189 | $ 3,748 | ||||
Tax benefits related to employees' and directors' stock plans | 771 | 771 | |||||
Purchases of Company common stock (in shares) | 405,135 | ||||||
Purchases of Company common stock | (15,136) | $ (15,136) | |||||
Other comprehensive items | (18,002) | (17,856) | (146) | ||||
Ending balance (in shares) at Jan. 03, 2015 | 14,624,159 | 3,760,019 | |||||
Ending balance at Jan. 03, 2015 | 265,459 | $ 146 | 98,769 | 270,249 | $ (87,727) | (17,146) | 1,168 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income | 34,683 | 34,389 | 294 | ||||
Dividends declared | (7,380) | (7,380) | |||||
Activity under stock plans (in shares) | (139,000) | ||||||
Activity under stock plans | 4,160 | 886 | $ 3,274 | ||||
Tax benefits related to employees' and directors' stock plans | 881 | 881 | |||||
Purchases of Company common stock (in shares) | 229,760 | ||||||
Purchases of Company common stock | (9,906) | $ (9,906) | |||||
Other comprehensive items | (19,952) | (19,826) | (126) | ||||
Ending balance (in shares) at Jan. 02, 2016 | 14,624,159 | 3,850,779 | |||||
Ending balance at Jan. 02, 2016 | 267,945 | $ 146 | 100,536 | 297,258 | $ (94,359) | (36,972) | 1,336 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income | 32,469 | 32,077 | 392 | ||||
Dividends declared | (8,285) | (8,285) | |||||
Activity under stock plans (in shares) | (164,247) | ||||||
Activity under stock plans | 4,893 | 869 | $ 4,024 | ||||
Other comprehensive items | (12,743) | (12,665) | (78) | ||||
Ending balance (in shares) at Dec. 31, 2016 | 14,624,159 | 3,686,532 | |||||
Ending balance at Dec. 31, 2016 | $ 284,279 | $ 146 | $ 101,405 | $ 321,050 | $ (90,335) | $ (49,637) | $ 1,650 |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Nature of Operations and Summary of Significant Accounting Policies | Nature of Operations and Summary of Significant Accounting Policies Nature of Operations Kadant Inc. was incorporated in Delaware in November 1991 and currently trades on the New York Stock Exchange under the ticker symbol "KAI." Kadant Inc. and its subsidiaries' (collectively, the Company) continuing operations include two reportable operating segments, Papermaking Systems and Wood Processing Systems, and a separate product line, Fiber-based Products. Through its Papermaking Systems segment, the Company develops, manufactures, and markets a range of equipment and products primarily for the global papermaking, paper recycling, recycling and waste management, and other process industries. The Company's principal products in this segment include custom-engineered stock-preparation systems and equipment for the preparation of wastepaper for conversion into recycled paper and balers and related equipment used in the processing of recyclable and waste materials; fluid-handling systems used primarily in the dryer section of the papermaking process and during the production of corrugated boxboard, metals, plastics, rubber, textiles, chemicals, and food; doctoring systems and equipment and related consumables important to the efficient operation of paper machines; and cleaning and filtration systems essential for draining, purifying, and recycling process water and cleaning paper machine fabrics and rolls. Through its Wood Processing Systems segment, the Company develops, manufactures, and markets stranders and related equipment used in the production of oriented strand board (OSB), an engineered wood panel product used primarily in home construction. This segment also sells debarking and wood chipping equipment used in the forest products and the pulp and paper industries. Through this segment, the Company also provides refurbishment and repair of pulping equipment for the pulp and paper industry. Through its Fiber-based Products business, the Company manufactures and sells granules derived from papermaking by-products primarily for use as agricultural carriers and for home lawn and garden applications, as well as for oil and grease absorption. Principles of Consolidation The accompanying consolidated financial statements of the Company include the accounts of its wholly and majority-owned subsidiaries. All material intercompany accounts and transactions have been eliminated. Financial Statement Presentation Certain reclassifications have been made to prior periods to conform with current reporting. As a result of the adoption of the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-09, "Improvements to Employee Share-Based Payment Arrangements," tax withholding payments made related to stock-based compensation awards have been reclassified from other current liabilities within operating activities and presented separately within financing activities in the accompanying consolidated statement of cash flows for the 2015 and 2014 fiscal years. Fiscal Year Typically, the Company's fiscal quarters and fiscal year consist of 13 and 52 weeks, respectively, ending on the Saturday closest to the end of the corresponding calendar quarter for the Company's fiscal quarters and on the Saturday closest to December 31 for the Company's fourth fiscal quarter and fiscal year. As a result of the difference between the fiscal and calendar periods, a 53rd week is added to the Company's fiscal year every five or six years. In a 53-week fiscal year, the Company's fourth fiscal quarter contains 14 weeks. The Company's fiscal year ended December 31, 2016 (fiscal 2016) and January 2, 2016 (fiscal 2015) both contained 52 weeks and the Company's fiscal year ended January 3, 2015 (fiscal 2014) contained 53 weeks. Each quarter of fiscal 2016, 2015 and 2014 contained 13 weeks, except the fourth quarter of 2014, which contained 14 weeks. Use of Estimates and Critical Accounting Policies The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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. Critical accounting policies are defined as those that entail significant judgments and estimates, and could potentially result in materially different results under different assumptions and conditions. The Company believes that the most critical accounting policies upon which its financial position depends, and which involve the most complex or subjective decisions or assessments, concern revenue recognition and accounts receivable, warranty obligations, income taxes, the valuation of goodwill and intangible assets, inventories, and pension obligations. A discussion on the application of these and other accounting policies is included in Notes 1 and 3. Although the Company makes every effort to ensure the accuracy of the estimates and assumptions used in the preparation of its consolidated financial statements or in the application of accounting policies, if business conditions were different, or if the Company were to use different estimates and assumptions, it is possible that materially different amounts could be reported in the Company's consolidated financial statements. Revenue Recognition and Accounts Receivable The Company recognizes revenue under Accounting Standards Codification (ASC) 605, "Revenue Recognition," (ASC 605) when the following criteria have been met: persuasive evidence of an arrangement exists, delivery has occurred or service has been rendered, the sales price is fixed or determinable, and collectability is reasonably assured. When the terms of the sale include customer acceptance provisions, and compliance with those provisions cannot be demonstrated until customer acceptance, revenues are recognized upon such acceptance. The Company includes in revenue amounts invoiced for shipping and handling with the corresponding costs reflected in cost of revenues. Provisions for discounts, warranties, returns and other adjustments are provided for in the period in which the related sales are recorded. Sales taxes, value-added taxes and certain excise taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from revenue. Most of the Company's revenue is recognized in accordance with the accounting policies in the preceding paragraph. However, when a sale arrangement involves multiple elements, such as equipment and installation, the Company considers the guidance in ASC 605. Such transactions are evaluated to determine whether the deliverables in the arrangement represent separate units of accounting based on the following criteria: the delivered item has value to the customer on a stand-alone basis, and if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered item is considered probable and substantially under the control of the Company. Revenue is allocated to each unit of accounting or element based on relative selling prices and is recognized as each element is delivered or completed. The Company determines relative selling prices by using either vendor-specific objective evidence (VSOE) if that exists, or third-party evidence of selling price. When neither VSOE nor third-party evidence of selling price exists for a deliverable, the Company uses its best estimate of the selling price for that deliverable. In cases in which elements cannot be treated as separate units of accounting, the elements are combined into a single unit of accounting for revenue recognition purposes. In addition, revenues and profits on certain long-term contracts are recognized using the percentage-of-completion method or the completed-contract method of accounting pursuant to ASC 605. Revenues recorded under the percentage-of-completion method were $23,300,000 , $32,078,000 , and $19,078,000 in 2016 , 2015 , and 2014 , respectively. The percentage of completion is determined by comparing the actual costs incurred to date to an estimate of total costs to be incurred on each contract. If a loss is indicated on any contract in process, a provision is made currently for the entire estimated loss. The Company's contracts generally provide for billing of customers upon the attainment of certain milestones specified in each contract. Revenues earned on contracts in process in excess of billings are classified as unbilled contract costs and fees, and amounts billed in excess of revenues earned are classified as billings in excess of contract costs and fees, which are included in other current liabilities in the accompanying consolidated balance sheet. There are no significant amounts included in the accompanying consolidated balance sheet that are not expected to be recovered from existing contracts at current contract values, or that are not expected to be collected within one year, including amounts that are billed but not paid under retainage provisions. For long-term contracts that do not meet the criteria under ASC 605-35 to be accounted for under the percentage-of-completion method, the Company recognizes revenue, primarily in China, using the completed-contract method. When using the completed-contract method, the Company recognizes revenue when the contract has been substantially completed, the product has been delivered, and, if applicable, the customer acceptance criteria have been met. Inventory included $274,000 at year-end 2015 associated with long-term contracts accounted for under the completed-contract method. Customer deposits included $5,158,000 and $2,374,000 of advance payments on long-term contracts accounted for under the completed-contract method at year-end 2016 and year-end 2015 , respectively. Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company exercises judgment in determining its allowance for doubtful accounts, which is based on its historical collection experience, current trends, credit policies, specific customer collection issues, and accounts receivable aging categories. In determining this allowance, the Company looks at historical write-offs of its receivables. The Company also looks at current trends in the credit quality of its customer base as well as changes in its credit policies. The Company performs ongoing credit evaluations of its customers and adjusts credit limits based upon payment history and each customer's current creditworthiness. The Company continuously monitors collections and payments from its customers. Account balances are charged off against the allowance when the Company believes it is probable the receivable will not be recovered. In some instances, the Company utilizes letters of credit to mitigate its credit exposure. The Company's Chinese subsidiaries may receive banker's acceptance drafts from customers as payment for their trade accounts receivable. The banker's acceptance drafts are non-interest bearing obligations of the issuing bank and mature within six months of the origination date. The Company can sell the drafts at a discount to a third-party financial institution or transfer the drafts to vendors in settlement of current accounts payable prior to the scheduled maturity date. These drafts, which totaled $7,852,000 and $8,314,000 at year-end 2016 and year-end 2015 , respectively, are included in accounts receivable in the accompanying consolidated balance sheet until the subsidiary sells the drafts to a bank and receives a discounted amount, transfers the banker's acceptance drafts in settlement of current accounts payable prior to maturity, or obtains cash payment on the scheduled maturity date. The changes in the allowance for doubtful accounts are as follows: (In thousands) 2016 2015 2014 Balance at Beginning of Year $ 2,163 $ 2,198 $ 2,689 Provision charged to expense 453 379 246 Accounts recovered — — 15 Accounts written off (128 ) (205 ) (590 ) Currency translation (93 ) (209 ) (162 ) Balance at End of Year $ 2,395 $ 2,163 $ 2,198 Warranty Obligations The Company provides for the estimated cost of product warranties at the time of sale based on the actual historical occurrence rates and repair costs, as well as knowledge of any specific warranty problems that indicate that projected warranty costs may vary from historical patterns. The Company typically negotiates the terms regarding warranty coverage and length of warranty depending on the products and applications. While the Company engages in extensive product quality programs and processes, the Company's warranty obligation is affected by product failure rates, repair costs, service delivery costs incurred in correcting a product failure, and supplier warranties on parts delivered to the Company. Should actual product failure rates, repair costs, service delivery costs, or supplier warranties on parts differ from the Company's estimates, revisions to the estimated warranty liability would be required. The changes in the carrying amount of accrued warranty costs included in other current liabilities in the accompanying consolidated balance sheet are as follows: (In thousands) 2016 2015 Balance at Beginning of Year $ 3,670 $ 3,875 Provision charged to income 3,091 2,660 Usage (3,632 ) (2,559 ) Acquisition 991 — Currency translation (277 ) (306 ) Balance at End of Year $ 3,843 $ 3,670 Income Taxes In accordance with ASC 740, "Income Taxes," (ASC 740), the Company recognizes deferred income taxes based on the expected future tax consequences of differences between the financial statement basis and the tax basis of assets and liabilities, calculated using enacted tax rates in effect for the year in which these differences are expected to reverse. A tax valuation allowance is established, as needed, to reduce deferred tax assets to the amount expected to be realized. In the period in which it becomes more likely than not that some or all of the deferred tax assets will be realized, the valuation allowance will be adjusted. It is the Company's policy to provide for uncertain tax positions and the related interest and penalties based upon management's assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes. At December 31, 2016 , the Company believes that it has appropriately accounted for any liability for unrecognized tax benefits. To the extent the Company prevails in matters for which a liability for an unrecognized tax benefit is established, the statute of limitations expires for a tax jurisdiction year, or the Company is required to pay amounts in excess of the liability, its effective tax rate in a given financial statement period may be affected. In November 2015, the FASB issued ASU No. 2015-17, "Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes," which simplifies the presentation of deferred income taxes, as it requires that deferred tax assets and liabilities be classified as non-current in the accompanying consolidated balance sheet. The Company early adopted this ASU prospectively for the year ended January 2, 2016, which resulted in all deferred taxes being reported as non-current in its accompanying consolidated balance sheet. See Note 5, Income Taxes, for additional information. Earnings per Share Basic earnings per share (EPS) has been computed by dividing net income attributable to Kadant by the weighted average number of shares outstanding during the year. Diluted EPS was computed using the treasury stock method assuming the effect of all potentially dilutive securities, including stock options, restricted stock units (RSUs) and employee stock purchase plan shares. Cash and Cash Equivalents At year-end 2016 and 2015 , the Company's cash equivalents included investments in money market funds and other marketable securities, which had maturities of three months or less at the date of purchase. The carrying amounts of cash equivalents approximate their fair values due to the short-term nature of these instruments. Restricted Cash At year-end 2016 and 2015 , the Company had approximately $2,082,000 and $1,406,000 of restricted cash, respectively. This cash serves as collateral for bank guarantees primarily associated with providing assurance to customers that the Company will fulfill certain customer obligations entered into in the normal course of business. The majority of the bank guarantees expire by the end of 2017. Supplemental Cash Flow Information (In thousands) 2016 2015 2014 Cash Paid for Interest $ 1,183 $ 616 $ 1,081 Cash Paid for Income Taxes, Net of Refunds $ 15,632 $ 11,497 $ 10,035 Non-Cash Investing Activities: Fair value of assets of acquired businesses $ 84,969 $ — $ 14,771 Cash paid for acquired businesses (58,894 ) — (12,658 ) Liabilities assumed of acquired businesses $ 26,075 $ — $ 2,113 Non-Cash Financing Activities: Issuance of company common stock $ 3,463 $ 3,423 $ 3,220 Dividends declared but unpaid $ 2,078 $ 1,831 $ 1,630 Inventories Inventories are stated at the lower of cost (on a first-in, first-out; or weighted average basis) or market value and include materials, labor, and manufacturing overhead. The Company regularly reviews its quantities of inventories on hand and compares these amounts to the historical and forecasted usage of and demand for each particular product or product line. The Company records a charge to cost of revenues for excess and obsolete inventory to reduce the carrying value of inventories to net realizable value. The components of inventories are as follows: (In thousands) 2016 2015 Raw Materials and Supplies $ 21,086 $ 22,324 Work in Process 12,293 13,819 Finished Goods (includes $1,249 and $1,262 at customer locations) 21,572 20,615 $ 54,951 $ 56,758 Property, Plant, and Equipment Property, plant, and equipment are stated at cost. The costs of additions and improvements are capitalized, while maintenance and repairs are charged to expense as incurred. The Company provides for depreciation and amortization primarily using the straight-line method over the estimated useful lives of the property as follows: buildings, 10 to 40 years; machinery and equipment, 2 to 10 years; and leasehold improvements, the shorter of the term of the lease or the life of the asset. Property, plant, and equipment consist of the following: (In thousands) 2016 2015 Land $ 4,827 $ 3,792 Buildings 39,706 36,547 Machinery, Equipment, and Leasehold Improvements 79,891 77,675 124,424 118,014 Less: Accumulated Depreciation and Amortization 76,720 75,721 $ 47,704 $ 42,293 Property, plant, and equipment at year-end 2016 included assets under capital lease that were acquired in 2016. The gross amount and accumulated amortization of property, plant, and equipment under capital lease were $5,335,000 and $221,000 as of year-end 2016 , respectively. Amortization of property, plant, and equipment under capital lease is included within depreciation and amortization expense. Depreciation and amortization expense related to property, plant, and equipment was $6,194,000 , $5,814,000 , and $5,661,000 in 2016 , 2015 , and 2014 , respectively. Intangible Assets Intangible assets in the accompanying consolidated balance sheet include the costs of acquired intellectual property, tradenames, patents, customer relationships, non-compete agreements and other specifically identifiable intangible assets. An intangible asset of $8,100,000 associated with the acquisition of the Johnson tradename as part of the Company's acquisition of The Johnson Corporation in 2005 has an indefinite life and is not being amortized. The remaining intangible assets have been amortized as the underlying economic benefits are realized with a weighted-average amortization period of 12 years . The intangible asset lives have been determined based on the anticipated period over which the Company will derive future cash flow benefits from the intangible assets. The Company has considered the effects of legal, regulatory, contractual, competitive, and other economic factors in determining these useful lives. Acquired intangible assets are as follows: (In thousands) 2016 2015 Indefinite-Lived Intangible Asset $ 8,100 $ 8,100 Definite-Lived Intangible Assets, Gross $ 77,052 $ 77,052 Acquisition (Note 2) 24,691 — Accumulated amortization (49,040 ) (40,908 ) Currency translation (8,073 ) (6,212 ) Definite-Lived Intangible Assets, Net $ 44,630 $ 29,932 Total Intangible Assets, Net $ 52,730 $ 38,032 Acquired intangible assets by major asset class are as follows: (In thousands) Gross Currency Accumulated Net December 31, 2016 Customer relationships $ 59,101 $ (5,202 ) $ (21,805 ) $ 32,094 Intellectual property 27,101 (2,052 ) (17,105 ) 7,944 Tradenames 12,547 (591 ) (1,065 ) 10,891 Non-compete agreements 3,662 (85 ) (3,373 ) 204 Distribution network 2,400 — (1,642 ) 758 Licensing agreements 400 — (233 ) 167 Other 4,632 (143 ) (3,817 ) 672 $ 109,843 $ (8,073 ) $ (49,040 ) $ 52,730 January 2, 2016 Customer relationships $ 43,271 $ (3,916 ) $ (17,314 ) $ 22,041 Intellectual property 22,899 (1,772 ) (15,584 ) 5,543 Tradenames 10,269 (405 ) (698 ) 9,166 Non-compete agreements 3,548 (55 ) (3,298 ) 195 Distribution network 2,400 — (1,501 ) 899 Licensing agreements 400 — (213 ) 187 Other 2,365 (64 ) (2,300 ) 1 $ 85,152 $ (6,212 ) $ (40,908 ) $ 38,032 Amortization of acquired intangible assets was $8,132,000 , $5,007,000 , and $5,528,000 in 2016 , 2015 , and 2014 , respectively. The estimated future amortization expense of acquired definite-lived intangible assets is $6,832,000 in 2017; $6,481,000 in 2018; $5,945,000 in 2019; $5,450,000 in 2020; $5,051,000 in 2021; and $14,871,000 in the aggregate thereafter. Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the identifiable net assets of the acquired business at the date of acquisition. The Company’s acquisitions have historically been made at prices above the fair value of the acquired net assets, resulting in goodwill, due to the expectation of synergies from combining the businesses. The changes in the carrying amount of goodwill by segment are as follows: (In thousands) Papermaking Systems Segment Wood Processing Systems Segment Total Balance as of January 3, 2015 Gross balance $ 193,279 $ 20,112 $ 213,391 Accumulated impairment losses (85,509 ) — (85,509 ) Net balance 107,770 20,112 127,882 Currency Translation (5,559 ) (3,272 ) (8,831 ) Total 2015 Adjustments (5,559 ) (3,272 ) (8,831 ) Balance at January 2, 2016 Gross balance 187,720 16,840 204,560 Accumulated impairment losses (85,509 ) — (85,509 ) Net balance 102,211 16,840 119,051 Increase Due to Acquisition (Note 2) 38,552 — 38,552 Currency Translation (6,573 ) 425 (6,148 ) Total 2016 Adjustments 31,979 425 32,404 Balance at December 31, 2016 Gross balance 219,699 17,265 236,964 Accumulated impairment losses (85,509 ) — (85,509 ) Net balance $ 134,190 $ 17,265 $ 151,455 Impairment of Long-Lived Assets The Company evaluates the recoverability of goodwill and intangible assets with indefinite useful lives as of the end of each fiscal year, or more frequently if events or changes in circumstances, such as a significant decline in sales, earnings, or cash flows, or material adverse changes in the business climate, indicate that the carrying value of an asset might be impaired. Testing goodwill for impairment involves a two-step quantitative process. However, prior to performing the two-step quantitative goodwill impairment test, the Company has the option to first perform an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. At December 31, 2016 and January 2, 2016 , the Company performed a qualitative goodwill impairment analysis. This impairment analysis included an assessment of certain qualitative factors including, but not limited to, the results of prior fair value calculations, the movement of the Company's share price and market capitalization, the reporting unit and overall financial performance, and macroeconomic and industry conditions. The Company considered the qualitative factors and weighed the evidence obtained, and determined that it was not more likely than not that the fair value of any of the reporting units was less than its carrying amount. Although the Company believes the factors considered in the impairment analysis are reasonable, significant changes in any one of the assumptions used could have produced a different result. Goodwill by reporting unit is as follows: (In thousands) 2016 2015 Stock-Preparation $ 54,751 $ 19,527 Doctoring, Cleaning, & Filtration 33,839 35,990 Fluid-Handling 45,600 46,694 Wood Processing Systems 17,265 16,840 $ 151,455 $ 119,051 At December 31, 2016 and January 2, 2016 , the Company performed a quantitative impairment analysis on its indefinite-lived intangible asset, the Johnson tradename totaling $8,100,000 , and determined that the asset was not impaired. The Company assesses its long-lived assets, other than goodwill and indefinite-lived intangible assets, for impairment whenever facts and circumstances indicate that the carrying amounts may not be fully recoverable. To analyze recoverability, the Company projects undiscounted net future cash flows over the remaining lives of such assets or asset groups. If these projected cash flows were to be less than the carrying amounts, an impairment loss would be recognized, resulting in a write-down of the assets with a corresponding charge to earnings. The impairment loss would be measured based upon the difference between the carrying amounts and the fair values of the assets. No indicators of impairment were identified in 2016 or 2015 . Foreign Currency Translation and Transactions All assets and liabilities of the Company's foreign subsidiaries are translated at year-end exchange rates, and revenues and expenses are translated at average exchange rates for each quarter in accordance with ASC 830, "Foreign Currency Matters." Resulting translation adjustments are reflected in the "accumulated other comprehensive items (AOCI)" component of stockholders' equity (see Note 13). Foreign currency transaction gains and losses are included in the accompanying consolidated statement of income and are not material for the three years presented. Stock-Based Compensation The Company recognizes compensation cost for all stock-based awards granted to employees and directors based on the grant date estimate of fair value for those awards. The fair value of RSUs is based on the grant date trading price of the Company's common stock, reduced by the present value of estimated dividends foregone during the requisite service period. The fair value of stock options is based on the Black-Scholes option-pricing model. For stock options and time-based RSUs, compensation expense is recognized ratably over the requisite service period for the entire award net of forfeitures. For performance-based RSUs, compensation expense is recognized ratably over the requisite service period for each separately-vesting portion of the award net of forfeitures and remeasured at each reporting period until the total number of RSUs to be issued is known. Compensation expense related to any modified stock-based awards is based on the fair value for those awards as of the modification date with any remaining incremental compensation expense recognized ratably over the remaining requisite service period. Derivatives The Company uses derivative instruments primarily to reduce its exposure to changes in currency exchange rates and interest rates. When the Company enters into a derivative contract, the Company makes a determination as to whether the transaction is deemed to be a hedge for accounting purposes. For a contract deemed to be a hedge, the Company formally documents the relationship between the derivative instrument and the risk being hedged. In this documentation, the Company specifically identifies the asset, liability, forecasted transaction, cash flow, or net investment that has been designated as the hedged item, and evaluates whether the derivative instrument is expected to reduce the risks associated with the hedged item. To the extent these criteria are not met, the Company does not use hedge accounting for the derivative. The changes in the fair value of a derivative not deemed to be a hedge are recorded currently in earnings. The Company does not hold or engage in transactions involving derivative instruments for purposes other than risk management. ASC 815, "Derivatives and Hedging," requires that all derivatives be recognized on the balance sheet at fair value. For derivatives designated as cash flow hedges, the related gains or losses on these contracts are deferred as a component of AOCI. These deferred gains and losses are recognized in the period in which the underlying anticipated transaction occurs. For derivatives designated as fair value hedges, the unrealized gains and losses resulting from the impact of currency exchange rate movements are recognized in earnings in the period in which the exchange rates change and offset the currency gains and losses on the underlying exposures being hedged. The Company performs an evaluation of the effectiveness of the hedge both at inception and on an ongoing basis. The ineffective portion of a hedge, if any, and changes in the fair value of a derivative not deemed to be a hedge, are recorded in the consolidated statement of income. Recent Accounting Pronouncements Revenue from Contracts with Customers (Topic 606), Section A-Summary and Amendments That Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs-Contracts with Customers (Subtopic 340-40). In May 2014, the FASB issued ASU No. 2014-09, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The new guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective. In March 2016, the FASB issued ASU No. 2016-08, which further clarifies the guidance on the principal versus agent considerations within ASU No. 2014-09. In April 2016, the FASB issued ASU No. 2016-10 to expand the guidance on identifying performance obligations and licensing within ASU 2014-09. In May 2016, the FASB issued ASU No. 2016-11, which rescinds certain previously-issued guidance, including, among other items, guidance relating to accounting for shipping and handling fees and freight services effective upon adoption of ASU No. 2014-09. Also in May 2016, the FASB issued ASU No. 2016-12, which narrowly amended the revenue recognition guidance regarding collectability, noncash consideration, presentation of sales tax and transition. In December 2016, the FASB issued ASU No. 2016-20, which clarifies narrow aspects of Topic 606 and corrects unintended application of the guidance. These new ASUs are effective for the Company beginning in fiscal 2018. Early adoption is permitted in fiscal 2017. The Company is continuing to assess the potential effects of these ASUs on its consolidated financial statements, business processes, systems and controls. The Company is analyzing its current contracts and comparing its current accounting policies and practices pertaining to revenue recognition to those required under the new ASUs to identify potential differences. The Company’s preliminary assessment of its most commonly used customer terms and conditions and routine sales transactions did not identify material impacts to its consolidated financial statements from the application of the guidance; however, a broad assessment is ongoing that includes surveying its major businesses concerning any unique customer contract terms or transactions that could have implications for the timing of revenue recognition under the new guidance. While the assessment process is ongoing, the Company currently anticipates adopting these ASUs using the modified retrospective transition approach. Under this approach, this guidance would apply to all new contracts initiated in fiscal 2018. For existing contracts that have remaining obligations as of the begin |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions The Company’s acquisitions have been accounted for using the purchase method of accounting and the acquired companies’ results have been included in the accompanying consolidated financial statements from the dates of the acquisitions. The Company incurred acquisition transaction costs of approximately $1,832,000 and $ 326,000 in 2016 and 2014, respectively, which are included in selling, general, and administrative (SG&A) expenses in the accompanying consolidated statement of income. The Company's acquisitions have historically been made at prices above the fair value of the acquired net assets, resulting in goodwill, due to expectations of synergies from combining the businesses. The Company realizes synergies in connection with these acquisitions, including the use of the Company's existing distribution channels to expand sales of the products of the acquired businesses. 2016 On April 4, 2016, the Company acquired all the outstanding shares of RT Holding GmbH, the parent corporation of a group of companies known as the PAALGROUP (PAAL) for approximately 49,713,000 euros, net of cash acquired, or approximately $56,617,000 . Additional post-closing consideration of $165,000 was paid to the sellers in the first quarter of 2017. The Company entered into a $29,866,000 euro-denominated borrowing under its unsecured revolving credit facility in the first quarter of 2016 to partially fund the acquisition. The remainder of the purchase price was funded from the Company's internal overseas cash. PAAL, which is part of the Company's Papermaking Systems segment's Stock-Preparation product line, manufactures balers and related equipment used in the processing of recyclable and waste materials. This acquisition broadened the Company's product portfolio and extended its presence deeper into recycling and waste management. PAAL, headquartered in Germany, also has operations in the United Kingdom, France, and Spain. The Company anticipates several synergies in connection with this acquisition, including expanding sales of the products of the acquired business by leveraging Kadant's geographic presence to enter or further penetrate existing markets, as well as sourcing and manufacturing efficiencies. This acquisition has been accounted for by using the purchase method of accounting and PAAL’s results have been included in the accompanying consolidated financial statements from its date of acquisition. For 2016, PAAL had revenue of $40,783,000 and a loss of $0.01 per diluted share, which included acquisition costs of $0.15 and fair value step-up charges associated with acquired inventory and backlog of $0.12 . The excess of the purchase price for the acquisition of PAAL over the tangible and identifiable intangible assets was recorded as goodwill and amounted to approximately $38,552,000 , which is not deductible for tax purposes. The following table summarizes the purchase method of accounting for the acquisition made in 2016 and the estimated fair values of assets acquired and liabilities assumed: 2016 Acquisition (In thousands) Total Net Assets Acquired: Cash and Cash Equivalents $ 2,277 Accounts Receivable 5,441 Inventories 3,947 Property, Plant, and Equipment 7,179 Other Assets 2,882 Intangible Assets 24,691 Goodwill 38,552 Total assets acquired 84,969 Accounts Payable 5,536 Customer Deposits 2,471 Obligations Under Capital Lease 4,842 Long-Term Deferred Income Taxes 6,148 Other Liabilities 6,913 Total liabilities assumed 25,910 Net assets acquired $ 59,059 Purchase Price: Cash $ 29,028 Cash Paid to Seller Borrowed Under the Revolving Credit Facility 29,866 Cash Due to Seller 165 Total purchase price $ 59,059 Definite-lived intangible assets acquired related to the PAAL acquisition included $15,831,000 for customer relationships, $4,203,000 for product technology, $2,278,000 for tradenames, and $2,379,000 for other intangibles. The weighted-average amortization period for definite-lived intangible assets acquired is 12 years , which includes weighted-average amortization periods of 13 years for customer relationships, 9 years for product technology, and 14 years for tradenames. Unaudited Supplemental Pro Forma Information Had the acquisition of PAAL been completed as of the beginning of 2015, the Company’s pro forma results of operations for 2016 and 2015 would have been as follows: (In thousands, except per share amounts) 2016 2015 Revenues $ 427,273 $ 444,350 Net Income Attributable to Kadant $ 35,321 $ 33,881 Earnings per Share Attributable to Kadant: Basic $ 3.25 $ 3.12 Diluted $ 3.17 $ 3.05 Pro forma results include non-recurring pro forma adjustments that were directly attributable to the business combination to reflect amounts as if the acquisition of PAAL had been completed as of the beginning of 2015, as follows: • Pre-tax charge to SG&A expenses of $ 1,832,000 in 2015 and reversal in 2016, for acquisition-related transaction costs. • Pre-tax charge to cost of revenues of $ 458,000 in 2015 and reversal in 2016, for the sale of PAAL inventory revalued at the date of acquisition. • Pre-tax charge to SG&A expenses of $ 1,468,000 in 2015 and reversal in 2016, for intangible amortization related to acquired backlog. • Reversal of $ 1,636,000 of interest expense in 2015 and $454,000 in 2016 related to pre-acquisition debt, which was settled in the business combination. These pro forma results of operations have been prepared for comparative purposes only, and they do not purport to be indicative of the results of operations that actually would have resulted had the acquisition of PAAL occurred as of the beginning of 2015, or that may result in the future. 2014 On October 31, 2014, the Company acquired certain assets of the screen cylinder business of a U.S.-based company for approximately $9,174,000 in cash. This technology-based acquisition enhanced the Company’s stock-preparation equipment product offerings to pulp and paper mills worldwide. On December 30, 2013, the Company acquired all the outstanding shares of a European producer of creping and coating blades for approximately $2,666,000 in cash, including $674,000 of cash acquired. An additional 1,000,000 euros, or approximately $1,091,000 of contingent consideration was paid to the sellers on January 4, 2016. The following table summarizes the purchase method of accounting for the acquisitions made in 2014 and the estimated fair values of assets acquired and liabilities assumed: 2014 Acquisitions (In thousands) Total Net Assets Acquired: Cash and Cash Equivalents $ 674 Inventories 1,064 Other Current Assets 324 Property, Plant, and Equipment 847 Intangibles Customer relationships 4,700 Intellectual property 2,600 Other 360 Goodwill 3,463 Total assets acquired 14,032 Total Liabilities Assumed 1,001 Net assets acquired $ 13,031 Purchase Price: Cash $ 11,840 Contingent Consideration 1,191 Total purchase price $ 13,031 The excess of the purchase price for the acquisitions made in 2014 over the tangible and identifiable intangible assets was recorded as goodwill and amounted to approximately $3,463,000 , of which $2,004,000 is deductible for tax purposes. The weighted-average amortization period for intangibles acquired in 2014 is 9 years, which includes weighted-average amortization periods of 8 years for customer relationships and 11 years for intellectual property. During 2014, the Company made post-closing adjustment payments of $818,000 related to acquisitions completed prior to 2014. Pro forma disclosures of the results of operations are not required, as the acquisitions are not considered material business combinations. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Stock-Based Compensation Plans The Company maintains stock-based compensation plans primarily for its key employees and directors, although the plans permit awards to others expected to make significant contributions to the future of the Company. The plans authorize the compensation committee of the Company's board of directors (the board committee) to award a variety of stock and stock-based incentives, such as restricted stock, RSUs, nonqualified and incentive stock options, stock bonus shares, or performance-based shares. The award recipients and the terms of awards, including price, granted under these plans are determined by the board committee. Upon a change of control, as defined in the plans, all options or other awards become fully vested and all restrictions lapse. The Company had 561,162 shares available for grant under stock-based compensation plans at year-end 2016 . The Company generally issues its common stock out of treasury stock, to the extent available, for share issuances related to its stock-based compensation plans. The Company recognizes compensation cost for all stock-based awards granted to employees and directors based on the grant date estimate of fair value for those awards. The fair value of RSUs is based on the grant date trading price of the Company's common stock, reduced by the present value of estimated dividends foregone during the requisite service period. The fair value of stock options is based on the Black-Scholes option-pricing model. Total stock-based compensation expense was $5,069,000 , $5,741,000 , and $5,813,000 in 2016 , 2015 , and 2014 , respectively, and is included in SG&A expenses in the accompanying consolidated statement of income. The components of pre-tax stock-based compensation expense are as follows: (In thousands) 2016 2015 2014 Restricted Stock Unit Awards $ 4,848 $ 5,185 $ 4,904 Stock Option Awards 51 420 782 Employee Stock Purchase Plan Awards 170 136 127 Total $ 5,069 $ 5,741 $ 5,813 The Company has elected to recognize excess income tax benefits from stock option exercises and the vesting of RSUs in capital in excess of par value using the tax return ordering approach. The Company measures the tax benefit associated with excess tax deductions related to stock-based compensation expense by multiplying the excess tax deductions by the statutory tax rates. As a result of the adoption of ASU No. 2016-09, the Company did not recognize any income tax benefits in capital in excess of par value in 2016 . The Company recognized income tax benefits in capital in excess of par value of $881,000 and $771,000 in 2015 and 2014 , respectively, associated with stock-based compensation. The Company grants RSUs to non-employee directors and certain employees. Holders of RSUs have no voting rights and are not entitled to receive cash dividends. Non-Employee Director Restricted Stock Units For the past three fiscal years, the Company has granted 5,000 RSUs to each of its non-employee directors in the first quarter of each fiscal year. The shares vest ratably on the last day of each fiscal quarter within the year. In addition, on March 9, 2015 , the Company also granted 10,000 cash-settled RSUs to each of its non-employee directors, which totaled 50,000 in the aggregate and had a grant date fair value of $2,279,000 . These RSUs would have only vested and compensation expense would only have been recognized if a change in control as defined in the Company's 2006 equity incentive plan had occurred before the last day of the first quarter of 2020. If a change in control had occurred, the directors would have received cash compensation equal to the value of the RSUs at the trading price of the Company's common stock on the change in control date. During 2015, 10,000 RSUs were forfeited, and the remaining 40,000 RSUs were outstanding at year-end 2016. These cash-settled RSUs were canceled without value on March 8, 2017. Performance-Based Restricted Stock Units The Company grants performance-based RSUs to executive officers of the Company. Each performance-based RSU represents the right to receive one share of the Company's common stock upon vesting. The RSUs are subject to adjustment based on the achievement of a performance measure selected for the fiscal year, which is a specified target for adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) generated from continuing operations. Following adjustment, the RSUs are subject to additional time-based vesting, and vest in three equal annual installments, provided that the executive officer is employed by the Company on the applicable vesting dates. The Company recognizes compensation expense associated with performance-based RSUs ratably over the requisite service period for each separately-vesting portion of the award based on the grant date fair value. Compensation expense recognized is net of forfeitures and remeasured each reporting period until the total number of RSUs to be issued is known. Unrecognized compensation expense related to the unvested performance-based RSUs totaled approximately $1,467,000 at year-end 2016 , and will be recognized over a weighted average period of 1.3 years. The performance-based RSU agreements provide for forfeiture in certain events, such as voluntary or involuntary termination of employment, and for acceleration of vesting in certain events, such as death, disability or a change in control of the Company. If death, disability, or a change in control occurs prior to the end of the performance period, the officer will receive the target RSU amount; otherwise, the officer will receive the number of deliverable RSUs based on the achievement of the performance goal, as stated in the RSU agreements. Time-Based Restricted Stock Units The Company grants time-based RSUs to certain executive officers and other employees of the Company. Each time-based RSU represents the right to receive one share of the Company's common stock upon vesting. The Company recognizes compensation expense associated with these time-based RSUs ratably over the requisite service period for the entire award based on the grant date fair value and net of forfeitures. The time-based RSU agreement provides for forfeiture in certain events, such as voluntary or involuntary termination of employment, and for acceleration of vesting in certain events, such as death, disability, or a change in control of the Company. Unrecognized compensation expense related to the time-based RSUs totaled approximately $2,614,000 at year-end 2016 , and will be recognized over a weighted average period of 1.8 years. A summary of the activity of the Company's unvested RSUs for 2016 is as follows: Unvested Restricted Stock Units Units Weighted Unvested RSUs at January 2, 2016 216 $ 37.01 Granted 132 $ 40.41 Vested (143 ) $ 35.46 Forfeited / Expired (2 ) $ 40.87 Unvested RSUs at December 31, 2016 203 $ 40.23 The weighted-average grant date fair value of RSUs granted was $40.41 , $44.75 , and $38.52 in 2016 , 2015 , and 2014 , respectively. The total fair value of shares vested was $6,233,000 , $7,502,000 , and $6,895,000 in 2016 , 2015 , and 2014 , respectively. Stock Options The Company did not grant stock options during the last three fiscal years. Prior to 2014, the Company granted nonqualified stock options to its executive officers that vested over three years and were not exercisable until vested. To date, all options have been granted at an exercise price equal to the fair market value of the Company's common stock on the date of grant. Stock options vested in three equal annual installments beginning on the first anniversary of the grant date, provided that the recipient remained employed by the Company on the applicable vesting dates and expire on the tenth anniversary of the grant date. All outstanding stock options are fully vested. The Company recognized compensation expense associated with these stock options ratably over the requisite service period for the entire award based on the grant date fair value and net of forfeitures. There was no unrecognized compensation expense related to these stock options at year-end 2016 . The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option-pricing models require the input of highly subjective assumptions, including expected stock price volatility. Expected stock price volatility was calculated based on a review of the Company's actual historic stock prices commensurate with the expected life of the award. The expected option life was derived based on a review of the Company's historic option holding periods, including consideration of the holding period inherent in currently vested but unexercised options. The expected annual dividend rate was calculated by dividing the Company's annual dividend by the closing stock price on the grant date. The risk-free interest rate is based on the yield on zero-coupon U.S. Treasury securities for a period that is commensurate with the expected term of the option. The compensation expense recognized for all equity-based awards is net of estimated forfeitures. Forfeitures are estimated based on an analysis of actual option forfeitures. A summary of the Company's stock option activity for 2016 is as follows: (In thousands, except per share amounts) Number Weighted Weighted Aggregate Options Outstanding at January 2, 2016 358 $ 21.12 Exercised (51 ) $ 23.57 Options Outstanding at December 31, 2016 307 $ 20.72 4.5 years $ 12,443 Vested and Exercisable at December 31, 2016 307 $ 20.72 4.5 years $ 12,443 (a) The closing price per share on the last trading day prior to December 31, 2016 was $61.20 . A summary of the Company's stock option exercises in 2016 , 2015 , and 2014 is as follows. (In thousands) 2016 2015 2014 Total Intrinsic Value of Options Exercised $ 1,341 $ 442 $ 438 Cash Received From Options Exercised $ 1,189 $ 284 $ 336 Modified Awards On September 15, 2014, the Company entered into an executive transition agreement with its former chief financial officer in connection with his retirement on June 30, 2015. This agreement included provisions for post-employment compensation and modifications to outstanding equity awards. The Company recognized $360,000 of post-employment compensation ratably through the retirement date. Pursuant to this agreement, any unvested stock options immediately vested on the retirement date and any unvested RSUs at the retirement date vested on June 30, 2015 and were distributed on March 10, 2016. As of September 15, 2014, 5,201 stock options were remeasured at a grant date fair value of $17.96 per option based on the Black-Scholes option-pricing model and 12,313 RSUs were remeasured at a fair value of $39.94 per unit. The remaining compensation expense associated with the modified stock options and RSUs totaled $428,000 as of September 15, 2014, which was recognized ratably through the retirement date. Employee Stock Purchase Plan The Company's eligible U.S. employees may elect to participate in its employee stock purchase plan. Under the plan, shares of the Company's common stock may be purchased at a 15% discount from the fair market value at the beginning or end of the purchase period, whichever is lower. Shares purchased under the plan are subject to a one -year resale restriction and are purchased through payroll deductions of up to 10% of each participating employee's gross wages. For the 2016 , 2015 , and 2014 plan years, the Company issued 17,874 , 13,573 , and 12,017 shares, respectively, of its common stock under this plan. 401(k) Savings and Other Defined Contribution Plans The Company's U.S. subsidiaries participate in the Kadant Inc. 401(k) Retirement Savings Plan sponsored by the Company. Contributions to the plan are made by both the employee and the Company and are immediately vested. Company contributions are based upon the level of employee contributions. Certain of the Company's subsidiaries offer other retirement plans, the majority of which are defined contribution plans. Company contributions to these plans are based on formulas determined by the Company. For these plans, the Company contributed and charged to expense approximately $3,005,000 , $2,749,000 , and $2,655,000 in 2016 , 2015 , and 2014 , respectively. Pension and Other Post-Retirement Benefits Plans The Company sponsors a noncontributory defined benefit pension plan for eligible employees at one of its U.S. divisions and its corporate office. Effective December 31, 2005, this plan was closed to new participants. Three of the Company’s non-U.S. subsidiaries also sponsor defined benefit pension plans covering certain employees at those subsidiaries. Funds for the U.S. pension plan and one of the non-U.S. pension plans are contributed to a trustee as necessary to provide for current service and for any unfunded projected benefit obligation over a reasonable period. The remaining two non-U.S. pension plans are unfunded as permitted under their plans and applicable laws. Benefits under the Company’s pension plans are based on years of service and employee compensation. The Company also provides other post-retirement benefits under two plans in the United States, which are both closed to new retirees, and at one of its non-U.S. subsidiaries. In addition, the Company provides for a restoration plan for certain executive officers which fully supplements benefits lost under the noncontributory defined benefit retirement plan as a consequence of applicable Internal Revenue Service limits. In accordance with ASC 715, "Compensation-Retirement Benefits," (ASC 715), an employer is required to recognize the funded status of defined benefit pension and other post-retirement benefit plans as an asset or liability and changes in that funded status through comprehensive income. These amounts will be subsequently recognized as net periodic pension cost pursuant to the Company's historical accounting policy for amortizing such amounts. Further, actuarial gains and losses that arise in subsequent periods and are not recognized as net periodic pension cost in the same periods will be recognized as a component of AOCI. The actuarial loss and prior service loss included in AOCI and expected to be recognized in net periodic benefit cost in 2017 are $541,000 and $144,000 , respectively. The following table summarizes the change in benefit obligation; the change in plan assets; the unfunded status; and the amounts recognized in the accompanying consolidated balance sheet for the Company's U.S. and non-U.S. pension benefit plans and other post-retirement benefit plans. In accordance with the adoption of ASU No. 2015-04 in 2015, the Company has elected to measure its plan assets and benefit obligations as of December 31, which coincides with its fiscal year-end in 2016 and is the closest month-end to its fiscal year-end in 2015. U.S. Pension Benefits Non-U.S. Pension Benefits Other Post-Retirement Benefits (In thousands) 2016 2015 2016 2015 2016 2015 Change in Benefit Obligation: Benefit obligation at beginning of year $ 31,310 $ 32,213 $ 3,041 $ 3,531 $ 3,539 $ 3,823 Acquisition — — 380 — — — Service cost 723 842 102 105 130 117 Interest cost 1,273 1,229 107 102 156 147 Actuarial loss (gain) 575 (1,448 ) 58 (102 ) 686 (299 ) Benefits paid (1,946 ) (1,526 ) (63 ) (189 ) (180 ) (219 ) Settlement payment — — — — (415 ) — Currency translation — — (284 ) (406 ) (22 ) (30 ) Benefit obligation at end of year $ 31,935 $ 31,310 $ 3,341 $ 3,041 $ 3,894 $ 3,539 Change in Plan Assets: Fair value of plan assets at beginning of year $ 27,776 $ 28,986 $ 396 $ 632 $ 26 $ 34 Actual return on plan assets 2,075 (764 ) 6 (142 ) 1 (3 ) Employer contributions 1,080 1,080 159 189 601 219 Benefits paid (1,946 ) (1,526 ) (63 ) (189 ) (180 ) (219 ) Settlement payment — — — — (415 ) — Currency translation — — (72 ) (94 ) (5 ) (5 ) Fair value of plan assets at end of year $ 28,985 $ 27,776 $ 426 $ 396 $ 28 $ 26 Unfunded Status $ (2,950 ) $ (3,534 ) $ (2,915 ) $ (2,645 ) $ (3,866 ) $ (3,513 ) Accumulated Benefit Obligation at End of Year $ 27,573 $ 26,844 $ 2,549 $ 2,169 $ — $ — Amounts Recognized in the Balance Sheet: Current liability $ — $ — $ (194 ) $ (133 ) $ (183 ) $ (187 ) Non-current liability $ (2,950 ) $ (3,534 ) $ (2,721 ) $ (2,512 ) $ (3,683 ) $ (2,911 ) Amounts Recognized in Accumulated Other Comprehensive Items Before Tax: Unrecognized net actuarial loss $ (7,383 ) $ (8,094 ) $ (784 ) $ (832 ) $ (872 ) $ (325 ) Unrecognized prior service cost (53 ) (108 ) (42 ) (47 ) (525 ) (610 ) Total $ (7,436 ) $ (8,202 ) $ (826 ) $ (879 ) $ (1,397 ) $ (935 ) Changes in Amounts Recognized in Accumulated Other Comprehensive Items Before Tax: Current year unrecognized net actuarial gain (loss) $ 213 $ (737 ) $ (75 ) $ (75 ) $ (685 ) $ 237 Amortization of unrecognized prior service cost 55 55 4 4 88 88 Amortization of unrecognized net actuarial loss 498 508 39 38 50 30 Settlement loss — — — — 114 — Currency translation — — 85 109 (29 ) 35 Total $ 766 $ (174 ) $ 53 $ 76 $ (462 ) $ 390 The weighted-average assumptions used to determine the benefit obligation as of year-end are as follows: U.S. Pension Benefits Non-U.S. Pension Benefits Other Post-Retirement Benefits 2016 2015 2016 2015 2016 2015 Discount rate 4.03 % 4.22 % 3.26 % 3.55 % 4.20 % 4.32 % Rate of compensation increase 3.00 % 3.00 % 3.33 % 3.47 % 3.12 % 3.18 % The discount rates for pension and other post-retirement plans are based on market yields on high-quality corporate bonds currently available and expected to be available during the period to maturity of the benefits. For pension and post-retirement plans, which have been closed to new participants thereby shortening the duration, the discount rate is determined based on discounting the projected benefit streams against the Citigroup Pension discount curve. The projected benefit obligations and fair values of plan assets for the Company's pension plans with projected benefit obligations in excess of plan assets are as follows: U.S. Pension Benefits Non-U.S. Pension Benefits (In thousands) 2016 2015 2016 2015 Pension Plans with Projected Benefit Obligations in Excess of Plan Assets: Projected benefit obligation $ 31,935 $ 31,310 $ 3,341 $ 3,041 Fair value of plan assets $ 28,985 $ 27,776 $ 426 $ 396 The accumulated benefit obligations and fair values of plan assets for the Company's pension plans with accumulated benefit obligations in excess of plan assets are as follows: U.S. Pension Benefits Non-U.S. Pension Benefits (In thousands) 2016 2015 2016 2015 Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets: Accumulated benefit obligation $ — $ — $ 2,549 $ 2,169 Fair value of plan assets $ — $ — $ 426 $ 396 The components of net periodic benefit cost are as follows: U.S. Pension Benefits Non-U.S. Pension Benefits Other Post-Retirement Benefits (In thousands) 2016 2015 2014 2016 2015 2014 2016 2015 2014 Components of Net Periodic Benefit Cost: Service cost $ 723 $ 842 $ 850 $ 102 $ 105 $ 193 $ 130 $ 117 $ 103 Interest cost 1,273 1,229 1,286 107 102 138 156 147 163 Expected return on plan assets (1,288 ) (1,421 ) (1,480 ) (25 ) (40 ) (44 ) (2 ) (2 ) (2 ) Recognized net actuarial loss 498 508 315 39 38 18 50 30 22 Amortization of prior service cost 55 55 55 4 4 6 88 88 88 Settlement loss — — — — — — 114 — — Net Periodic Benefit Cost $ 1,261 $ 1,213 $ 1,026 $ 227 $ 209 $ 311 $ 536 $ 380 $ 374 The weighted-average assumptions used to determine net periodic benefit cost are as follows: U.S. Pension Benefits Non-U.S. Pension Benefits Other Post-Retirement Benefits 2016 2015 2014 2016 2015 2014 2016 2015 2014 Discount Rate 4.22 % 3.87 % 4.79 % 3.87 % 3.33 % 3.68 % 5.38 % 4.01 % 4.91 % Expected Long-Term Return on Plan Assets 5.00 % 5.25 % 5.75 % 7.72 % 6.90 % 6.75 % 7.72 % 6.90 % 6.75 % Rate of Compensation Increase 3.00 % 3.00 % 3.50 % 3.67 % 3.42 % 2.70 % 3.94 % 3.15 % 3.52 % In developing the overall expected long-term return on plan assets assumption, a building block approach was used in which rates of return in excess of inflation were considered separately for equity securities, debt securities, and other assets. The excess returns were weighted by the representative target allocation and added along with an appropriate rate of inflation to develop the overall expected long-term return on plan assets assumption. The Company believes this determination is consistent with ASC 715. Assumed weighted-average healthcare cost trend rates as of year-end were as follows: Other Post-Retirement Benefits 2016 2015 Healthcare Cost Trend Rate Assumed for Next Year 8.00% 8.00% Ultimate Healthcare Cost Trend Rate 8.00% 8.00% Year Assumed Rate Reaches Ultimate Rate 2016 2015 Plan Assets The fair values of the Company's noncontributory defined benefit retirement plan assets at year-end 2016 and 2015 by asset category are as follows: 2016 Fair Value Measurement (In thousands) Quoted Prices in Significant Significant Total U.S. Pension Plan Assets: Mutual Funds $ 20,318 $ — $ — $ 20,318 $ 20,318 $ — $ — $ 20,318 Investments measured at NAV 8,667 Total assets at fair value $ 28,985 Non-U.S. Pension Plan Assets: Mutual Funds $ 426 $ — $ — $ 426 Total assets at fair value $ 426 $ — $ — $ 426 2015 Fair Value Measurement (In thousands) Quoted Prices in Significant Significant Total U.S. Pension Plan Assets: Mutual Funds $ 19,485 $ — $ — $ 19,485 $ 19,485 $ — $ — $ 19,485 Investments measured at NAV 8,291 Total assets at fair value $ 27,776 Non-U.S. Pension Plan Assets: Mutual Funds $ 396 $ — $ — $ 396 Total assets at fair value $ 396 $ — $ — $ 396 Description of Fair Value Measurements Level 1 – Quoted, active market prices for identical assets. Level 2 – Observable inputs other than Level 1 prices, based on model-derived valuations in which all significant inputs are observable in active markets. Level 3 – Unobservable inputs based on the Company's own assumptions. The following is a description of the valuation methodologies used for assets measured at fair value. There were no changes in valuation techniques during 2016 or 2015. Mutual funds - Investments in common stock index and fixed income funds. Share prices of the funds, referred to as a fund's Net Asset Value (NAV), are calculated daily based on the closing market prices and accruals of securities in the fund's total portfolio (total value of the fund) divided by the number of fund shares currently issued and outstanding. There are no redemption restrictions. Investments measured at NAV - Investments in common collective trusts that invest in a diversified blend of investment and non-investment grade fixed income securities and are valued at NAV provided by the fund administrator. The NAV is used as the practical expedient to estimate fair value. The NAVs of the funds are calculated monthly based on the closing market prices and accruals of securities in the fund's total portfolio (total value of the fund) divided by the number of fund shares currently issued and outstanding. Redemptions of the investments occur by contract at the respective fund's redemption date NAV. The Company has developed an investment policy for its U.S. noncontributory defined benefit retirement plan. The investment strategy is to emphasize total return, that is, the aggregate return from capital appreciation and dividend and interest income. The primary objective of the investment management for the plan's assets is the emphasis on consistent growth; specifically, growth in a manner that protects the plan's assets from excessive volatility in market value from year to year. The investment policy takes into consideration the benefit obligations, including timing of distributions. The following target asset allocation has been established for the plan: Asset Category Minimum Neutral Maximum Equity Securities 5 % 15 % 20 % Debt Securities 80 % 85 % 95 % Total 100 % All equity securities must be drawn from recognized securities exchanges. Debt securities must be weighted to reflect a portfolio average maturity of not more than ten years, with average benchmark duration of five years. The credit quality must equal or exceed high investment grade quality ("Baa" or better). Cash Flows Contributions The Company expects to make cash contributions of $1,080,000 to its U.S. noncontributory defined benefit pension plan in 2017. For the remaining pension and post-retirement benefit plans, no cash contributions other than to fund current benefit payments are expected in 2017. Estimated Future Benefit Payments Expected benefit payments are based on the same assumptions used to measure the Company's benefit obligation at year-end 2016 . Estimated future benefit payments during the next five years and in aggregate for the five years thereafter are as follows: Other Post-retirement (In thousands) U.S. Pension Non-U.S. Pension 2017 $ 1,485 $ 227 $ 187 2018 1,479 30 177 2019 1,485 105 169 2020 4,131 87 308 2021 1,894 237 162 2022-2026 11,488 2,029 2,753 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholder's Equity | Stockholders' Equity Preferred Stock The Company's Certificate of Incorporation authorizes up to 5,000,000 shares of preferred stock, $.01 par value per share, for issuance by the Company's board of directors without further shareholder approval. Common Stock At year-end 2016 , the Company had reserved 1,122,762 unissued shares of its common stock for possible issuance under its stock-based compensation plans. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of income from continuing operations before provision for income taxes are as follows: (In thousands) 2016 2015 2014 Domestic $ 6,196 $ 13,076 $ 10,951 Foreign 38,353 36,295 30,567 $ 44,549 $ 49,371 $ 41,518 The components of the provision for income taxes from continuing operations are as follows: (In thousands) 2016 2015 2014 Current Provision: Federal $ 535 $ 4,693 $ 1,080 Foreign 11,323 10,623 7,703 State 838 1,152 713 12,696 16,468 9,496 Deferred (Benefit) Provision: Federal 1,738 45 2,179 Foreign (1,818 ) (1,378 ) 418 State (533 ) (373 ) 354 (613 ) (1,706 ) 2,951 $ 12,083 $ 14,762 $ 12,447 The provision for income taxes included in the accompanying consolidated statement of income is as follows: (In thousands) 2016 2015 2014 Continuing Operations $ 12,083 $ 14,762 $ 12,447 Discontinued Operation 2 43 (14 ) $ 12,085 $ 14,805 $ 12,433 The Company receives a tax deduction upon the exercise of nonqualified stock options and the vesting of RSUs. The current provision for income taxes in the accompanying consolidated statement of income does not reflect $881,000 and $771,000 of such excess tax benefits in 2015 and 2014 , respectively, from the exercise of stock options and vesting of RSUs. In March 2016, the FASB issued ASU No. 2016-09, which the Company early adopted at the beginning of fiscal 2016. This ASU requires that excess income tax benefits and tax deficiencies related to stock-based compensation arrangements be recognized as discrete items within the provision for income taxes instead of capital in excess of par value in the reporting period in which they occur. As a result of the adoption of this ASU, the Company recognized an income tax benefit of $582,000 in the Company's accompanying consolidated statement of income in 2016. The provision for income taxes from continuing operations in the accompanying statement of income differs from the provision calculated by applying the statutory federal income tax rate of 35% to income from continuing operations before provision for income taxes due to the following: (In thousands) 2016 2015 2014 Provision for Income Taxes at Statutory Rate $ 15,592 $ 17,279 $ 14,531 Increases (Decreases) Resulting From: State income taxes, net of federal tax 189 506 694 U.S. tax cost of foreign earnings 192 455 206 Foreign tax rate differential (3,921 ) (3,852 ) (3,026 ) (Reversal of) provision for tax benefit reserves, net (76 ) 33 (1,017 ) Change in valuation allowance (131 ) 99 125 Nondeductible expenses 1,090 704 1,398 Research and development tax credits (229 ) (210 ) (274 ) Excess tax benefit related to share-based compensation (553 ) — — Other (70 ) (252 ) (190 ) $ 12,083 $ 14,762 $ 12,447 Net deferred tax liability in the accompanying consolidated balance sheet consists of the following: (In thousands) 2016 2015 Deferred Tax Asset: Foreign, state, and alternative minimum tax credit carryforwards $ 161 $ 23 Reserves and accruals 4,842 5,003 Net operating loss carryforwards 13,694 12,306 Inventory basis difference 3,005 3,253 Research and development 75 246 Employee compensation 4,966 5,427 Allowance for doubtful accounts 488 405 Revenue recognition 636 525 Other 249 151 Deferred tax asset, gross 28,116 27,339 Less: valuation allowance (10,863 ) (11,493 ) Deferred tax asset, net 17,253 15,846 Deferred Tax Liability: Goodwill and intangible assets (21,853 ) (17,450 ) Fixed asset basis difference (4,325 ) (3,234 ) Reserves and accruals — (32 ) Other (1,199 ) (284 ) Deferred tax liability (27,377 ) (21,000 ) Net deferred tax liability $ (10,124 ) $ (5,154 ) In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes, which simplifies the presentation of deferred income taxes as it requires that deferred tax assets and liabilities be classified as non-current in the consolidated balance sheet. The Company early adopted this ASU for the year ended January 2, 2016, which resulted in all deferred taxes being reported as non-current in its accompanying consolidated balance sheet. In both 2016 and 2015, the deferred tax assets and liabilities are presented in the accompanying consolidated balance sheet within other assets and long-term deferred income taxes, respectively, on a net basis by tax jurisdiction. The Company has established valuation allowances related to certain domestic and foreign deferred tax assets on deductible temporary differences, tax losses, and tax credit carryforwards. The valuation allowance at year-end 2016 was $10,863,000 , consisting of $835,000 in the United States and $10,028,000 in foreign jurisdictions. The decrease in the valuation allowance in 2016 of $630,000 related primarily to fluctuations in foreign currency exchange rates, tax rate changes, and expected future utilization of net operating losses in certain state and foreign jurisdictions. Compliance with ASC 740 requires the Company to periodically evaluate the necessity of establishing or adjusting a valuation allowance for deferred tax assets depending on whether it is more likely than not that a related tax benefit will be realized in future periods. When assessing the need for a valuation allowance in a tax jurisdiction, the Company evaluates the weight of all available evidence to determine whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. As part of this evaluation, the Company considers its cumulative three-year history of earnings before income taxes, taxable income in prior carryback years, future reversals of existing taxable temporary differences, prudent and feasible tax planning strategies, and expected future results of operations. As of year-end 2016 , the Company continued to maintain a valuation allowance in the United States against a large portion of its state operating loss carryforwards due to the uncertainty of future profitability in state jurisdictions. As of year-end 2016 , the Company maintained valuation allowances in certain foreign jurisdictions because of the uncertainty of future profitability. At year-end 2016 , the Company had domestic state and foreign net operating loss carryforwards of $34,087,000 and $43,773,000 , respectively. The domestic state loss carryforwards will expire in the years 2017 through 2036. Their utilization is limited to future taxable income from the Company's domestic subsidiaries. Of the foreign net operating loss carryforwards, $34,000 will expire in the years 2017 through 2021, and the remainder do not expire. The Company has not recognized a deferred tax liability for the difference between the book basis and the tax basis of its investment in the stock of its domestic subsidiaries, related primarily to unremitted earnings of subsidiaries, because it does not expect this basis difference to become subject to tax at the parent level. It is the Company's intention to reinvest indefinitely the earnings of its international subsidiaries in order to support the current and future capital needs of their operations in the foreign jurisdictions. Through year-end 2016 , the Company has not provided for U.S. income taxes on approximately $182,166,000 of unremitted foreign earnings. The U.S. tax cost has not been determined due to the fact that it is not practicable to estimate at this time. The related foreign tax withholding, which would be required if the Company were to remit these foreign earnings to the United States, would be approximately $3,951,000 . The Company operates within multiple tax jurisdictions and could be subject to audit in those jurisdictions. Such audits can involve complex income tax issues, which may require an extended period of time to resolve and may cover multiple years. In management's opinion, adequate provisions for income taxes have been made for all years subject to audit. As of year-end 2016 , the Company had $5,467,000 of unrecognized tax benefits which, if recognized, would reduce the effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits at year-end 2016 and 2015 is as follows: (In thousands) 2016 2015 Unrecognized Tax Benefits, Beginning of Year $ 5,052 $ 5,006 Gross Increases—Tax Positions in Prior Periods 403 — Gross Decreases—Tax Positions in Prior Periods (23 ) (28 ) Gross Increases—Current-period Tax Positions 480 476 Lapses of Statutes of Limitations (359 ) (253 ) Currency Translation (86 ) (149 ) Unrecognized Tax Benefits, End of Year $ 5,467 $ 5,052 The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes. The Company has accrued $1,321,000 and $1,246,000 for the potential payment of interest and penalties at year-end 2016 and 2015 , respectively. The interest and penalties included in the accompanying consolidated statement of income was an expense of $69,000 and $103,000 in 2016 and 2015 , respectively. The Company is currently under audit in certain non-U.S. taxing jurisdictions. It is reasonably possible that over the next fiscal year the amount of liability for unrecognized tax benefits may be reduced by up to $188,000 primarily from the expiration of tax statutes of limitations. The Company remains subject to U.S. Federal income tax examinations for the tax years 2004 through 2016, and to non-U.S. income tax examinations for the tax years 2004 through 2016. In addition, the Company remains subject to state and local income tax examinations in the United States for the tax years 2001 through 2016. |
Short- and Long-Term Obligation
Short- and Long-Term Obligations | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Short- and Long-Term Obligations | Short- and Long-Term Obligations Short- and long-term obligations at year-end 2016 and 2015 are as follows: (In thousands) 2016 2015 Revolving Credit Facility, due 2018 $ 61,494 $ 26,000 Commercial Real Estate Loan, due 2016 — 5,250 Obligations Under Capital Lease, due 2017 to 2022 4,309 — Other Borrowings, due 2017 to 2023 608 — Total Short- and Long-Term Obligations 66,411 31,250 Less: Short-Term Obligations (643 ) (5,250 ) Long-Term Obligations $ 65,768 $ 26,000 See Note 10 for the fair value information related to the Company's long-term obligations. Revolving Credit Facility The Company entered into a five -year unsecured revolving credit facility (2012 Credit Agreement) in the aggregate principal amount of up to $100,000,000 on August 3, 2012 and amended it on November 1, 2013 and March 29, 2016. The 2012 Credit Agreement also includes an uncommitted unsecured incremental borrowing facility of up to an additional $50,000,000 . The principal on any borrowings made under the 2012 Credit Agreement is due on November 1, 2018 . Interest on any loans outstanding under the 2012 Credit Agreement accrues and is payable quarterly in arrears at one of the following rates selected by the Company: (i) the highest of (a) the federal funds rate plus 0.50% plus an applicable margin of 0% to 1% , (b) the prime rate, as defined, plus an applicable margin of 0% to 1% and (c) the Eurocurrency rate, as defined, plus 0.50% plus an applicable margin of 0% to 1% or (ii) the Eurocurrency rate, as defined, plus an applicable margin of 1% to 2% . The applicable margin is determined based upon the ratio of the Company's total debt to earnings before interest, taxes, depreciation and amortization, as defined in the 2012 Credit Agreement. For this purpose, total debt is defined as total debt less up to $25,000,000 of unrestricted U.S. cash. The obligations of the Company under the 2012 Credit Agreement may be accelerated upon the occurrence of an event of default under the 2012 Credit Agreement, which includes customary events of default including without limitation payment defaults, defaults in the performance of affirmative and negative covenants, the inaccuracy of representations or warranties, bankruptcy- and insolvency-related defaults, defaults relating to such matters as the Employment Retirement Income Security Act (ERISA), unsatisfied judgments, the failure to pay certain indebtedness, and a change of control default. In addition, the 2012 Credit Agreement contains negative covenants applicable to the Company and its subsidiaries, including financial covenants requiring the Company to comply with a maximum consolidated leverage ratio of 3.5 to 1, a minimum consolidated interest coverage ratio of 3 to 1, and restrictions on liens, indebtedness, fundamental changes, dispositions of property, making certain restricted payments (including dividends and stock repurchases), investments, transactions with affiliates, sale and leaseback transactions, swap agreements, changing its fiscal year, arrangements affecting subsidiary distributions, entering into new lines of business, and certain actions related to the discontinued operation. At year-end 2016 , the Company was in compliance with these covenants. Loans under the 2012 Credit Agreement are guaranteed by certain domestic subsidiaries of the Company pursuant to a Guarantee Agreement, effective August 3, 2012. At year-end 2016 , the outstanding balance under the 2012 Credit Agreement was $61,494,000 , of which $27,494,000 was a euro-denominated borrowing used to fund the PAAL acquisition. At year-end 2016 , the Company had $36,518,000 of borrowing capacity available under the committed portion of its 2012 Credit Agreement. The amount the Company is able to borrow under the 2012 Credit Agreement is the total borrowing capacity of $100,000,000 less any outstanding borrowings, letters of credit and multi-currency borrowings issued under the 2012 Credit Agreement. The weighted average interest rate for the Revolving Credit Facility was 1.52% and 1.81% at year-end 2016 and 2015 , respectively. On March 1, 2017 the Company entered into an Amended and Restated Credit Agreement (2017 Credit Agreement) which became effective on March 2, 2017. See Note 15, Subsequent Event for further details. Commercial Real Estate Loan On May 4, 2006, the Company borrowed $10,000,000 under a promissory note (Commercial Real Estate Loan), which was repayable in quarterly installments of $125,000 over a ten -year period with the remaining principal balance of $5,000,000 due upon maturity in May 2016. In the second quarter of 2016, the Company repaid the outstanding principal balance on this loan. Interest on the Commercial Real Estate Loan was accrued and payable quarterly in arrears at one of the following rates selected by the Company: (a) the prime rate or (b) the three-month London Inter-Bank Offered Rate (LIBOR) plus a 0.75% margin. The weighted average interest rate for the Commercial Real Estate Loan was 6.38% at year-end 2015 . Debt Issuance Costs Debt issuance costs associated with the Commercial Real Estate Loan were being amortized to interest expense over the corresponding debt term based on the effective-interest method. Debt issuance costs associated with the 2012 Credit Agreement are being amortized to interest expense based on the straight-line method. As of year-end 2016 , unamortized debt issuance costs, included in other assets in the accompanying consolidated balance sheet, were $266,000 . Obligations Under Capital Lease In connection with the acquisition of PAAL, the Company assumed a sale-leaseback financing arrangement for PAAL's facility in Germany. Under this arrangement, the quarterly lease payment includes principal and interest based on an interest rate which is reset, from time to time, to prevailing short-term borrowing rates in Germany. The interest rate at year-end 2016 was 3.30% . The quarterly lease payment also includes a payment toward a corresponding loan receivable from the landlord. The loan receivable, which is included in other assets in the accompanying consolidated balance sheet, was $ 233,000 at year-end 2016. The lease arrangement provides for a fixed price purchase option, net of the loan receivable, of $1,390,000 at the end of the lease term in 2022. If the Company does not exercise the purchase option for the facility, the Company will receive cash from the landlord to settle the loan receivable. As of year-end 2016 , $4,188,000 was outstanding under this capital lease obligation. The Company also assumed capital lease obligations for certain equipment as part of the PAAL acquisition. These capital lease obligations bear a weighted average interest rate of 3.44% and have an average remaining term of 3.1 years . As of year-end 2016 , $121,000 was outstanding under these capital lease obligations. The following schedule presents future minimum lease payments under the capital lease obligations and the present value of the minimum lease payments as of year-end 2016 . (In thousands) Capital Lease Obligations 2017 $ 560 2018 553 2019 547 2020 554 2021 521 2022 and Thereafter 624 Total Minimum Lease Payments $ 3,359 Less: Imputed Interest (440 ) Present Value of Minimum Lease Payments $ 2,919 Other Borrowings Our PAAL subsidiary sells certain equipment to an intermediary who leases the equipment to a third party. The revenue from the equipment sale is deferred due to risk of default and repurchase obligation provisions. Revenue is recognized and the borrowing reduced over the corresponding lease term with the remaining residual value of the equipment recognized when the default provisions lapse. Other borrowings related to this lease arrangement totaled $608,000 at year-end 2016 . |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases The Company occupies office and operating facilities under various operating leases. The accompanying consolidated statement of income includes expenses from operating leases of $4,298,000 , $3,797,000 , and $3,948,000 in 2016 , 2015 , and 2014 , respectively. The future minimum payments due under noncancelable operating leases at year-end 2016 are $2,779,000 in 2017 ; $1,659,000 in 2018 ; $1,193,000 in 2019 ; $748,000 in 2020 ; $698,000 in 2021 and $959,000 thereafter. Total future minimum lease payments are $8,036,000 . Letters of Credit and Bank Guarantees Outstanding letters of credit and bank guarantees issued on behalf of the Company as applicant, principally relating to performance obligations and customer deposit guarantees, totaled $13,813,000 at year-end 2016 . Certain of the Company's contracts, particularly for stock-preparation and systems orders, require the Company to provide a standby letter of credit or bank guarantee to a customer as beneficiary, limited in amount to a negotiated percentage of the total contract value, in order to guarantee warranty and performance obligations of the Company under the contract. Typically, these standby letters of credit and bank guarantees expire without being drawn by the beneficiary. Right of Recourse In the ordinary course of business, the Company's subsidiaries in China may receive banker's acceptance drafts from customers as payment for outstanding accounts receivable. These banker's acceptance drafts are non-interest bearing and mature within six months of the origination date. The Company's subsidiaries in China may use these banker's acceptance drafts prior to the scheduled maturity date to settle outstanding accounts payable with vendors. Banker's acceptance drafts transferred to vendors are subject to customary right of recourse provisions prior to their scheduled maturity dates. At year-end 2016 , the Company had $4,824,000 of banker's acceptance drafts subject to recourse, which were transferred to vendors and had not reached their scheduled maturity dates. Historically, the banker's acceptance drafts have settled upon maturity without any claim of recourse against the Company. Contingencies In the ordinary course of business, the Company is, at times, required to issue limited performance guarantees, some of which do not require the issuance of letters of credit to customers in support of these guarantees, relating to its equipment and systems. The Company typically limits its liability under these guarantees to amounts that would not exceed the value of the contract. The Company believes that it has adequate reserves for any potential liability in connection with such guarantees. Litigation From time to time, the Company is subject to various claims and legal proceedings covering a range of matters that arise in the ordinary course of business. Such litigation may include claims and counterclaims by and against the Company for breach of contract or warranty, canceled contracts, product liability, or bankruptcy-related claims. For legal proceedings in which a loss is probable and estimable, the Company accrues a loss based on the low end of the range of estimated loss when there is no better estimate within the range. If the Company were found to be liable for any of the claims or counterclaims against it, the Company would incur a charge against earnings for amounts in excess of legal accruals. |
Other Income and Restructuring
Other Income and Restructuring Costs | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Other Income and Restructuring Costs | Other Income and Restructuring Costs In 2016, other income consisted of a pre-tax gain of $317,000 from the sale of real estate in Sweden for cash proceeds of $368,000 . In 2015, the Company recorded restructuring costs of $515,000 , including $344,000 related to its 2015 restructuring plans and $171,000 related to its 2014 restructuring plans. In 2014, the Company recorded restructuring costs of $805,000 , including $370,000 related to its 2014 restructuring plans and $435,000 related to restructuring plans prior to 2014. 2015 Restructuring Plans In 2015, the Company developed plans to streamline operations in its Papermaking Systems Segment. The Company recorded costs of $344,000 associated with the reduction of 25 employees in Canada and Brazil. 2014 Restructuring Plans The Company recorded restructuring costs of $541,000 associated with its 2014 restructuring plans. In 2014, the Company recorded severance costs of $321,000 associated with the reduction of eight employees in Brazil. The Company also recorded severance costs of $ 220,000 , including $ 49,000 and $ 171,000 in 2014 and 2015 respectively, associated with the reduction of seven employees in Sweden. These actions were taken to further streamline the Company's operations in Brazil and Sweden and all occurred in the Papermaking Systems segment. Restructuring Plans prior to 2014 The Company recorded total restructuring costs of $2,278,000 in 2013 and 2014, including severance costs of $1,158,000 associated with the reduction of 22 employees in Brazil and severance costs of $497,000 associated with the reduction of 25 employees in Sweden. Also included in restructuring costs were facility-related costs of $623,000 . These actions were taken to streamline the Company's operations as a result of the CBTI and Noss acquisitions. All of these actions occurred in the Papermaking Systems segment. A summary of the changes in accrued restructuring costs are as follows: (In thousands) Severance Other Total 2015 Restructuring Plans Provision $ 344 $ — $ 344 Usage (323 ) — (323 ) Currency translation (21 ) — (21 ) Balance at January 2, 2016 $ — $ — $ — 2014 Restructuring Plans Provision $ 370 $ — $ 370 Usage (267 ) — (267 ) Currency translation (56 ) — (56 ) Balance at January 3, 2015 $ 47 $ — $ 47 Provision 171 — 171 Usage (214 ) — (214 ) Currency translation (4 ) — (4 ) Balance at January 2, 2016 $ — $ — $ — (In thousands) Severance Other Total Restructuring Plans Prior to 2014 Balance at December 28, 2013 $ 519 $ — $ 519 Provision (11 ) 446 435 Usage (370 ) (445 ) (815 ) Currency translation (82 ) (1 ) (83 ) Balance at January 3, 2015 $ 56 $ — $ 56 Provision — — — Usage (15 ) — (15 ) Currency translation (3 ) — (3 ) Balance at January 2, 2016 $ 38 $ — $ 38 Usage (35 ) — (35 ) Currency translation (3 ) — (3 ) Balance at December 31, 2016 $ — $ — $ — |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives Interest Rate Swaps On January 16, 2015, the Company entered into a swap agreement (2015 Swap Agreement) to hedge its exposure to movements in the three-month London Inter-Bank Offered Rate (LIBOR) rate on future outstanding debt and has designated the 2015 Swap Agreement as a cash flow hedge. The 2015 Swap Agreement expires on March 27, 2020 and has a $10,000,000 notional value. Under the 2015 Swap Agreement, on a quarterly basis, the Company receives a three-month LIBOR rate and pays a fixed rate of interest of 1.50% plus an applicable margin. The fair value of the 2015 Swap Agreement as of December 31, 2016 is included in other long-term assets, with an offset to AOCI (net of tax) in the accompanying consolidated balance sheet. The Company has structured the 2015 Swap Agreement to be 100% effective and, as a result, there is no current impact to earnings resulting from hedge ineffectiveness. Management believes that any credit risk associated with the 2015 Swap Agreement is remote based on the Company's financial position and the creditworthiness of the financial institution issuing the 2015 Swap Agreement. The counterparty to the 2015 Swap Agreement could demand an early termination of the 2015 Swap Agreement if the Company is in default under the 2012 Credit Agreement, or any agreement that amends or replaces the 2012 Credit Agreement in which the counterparty is a member, and the Company is unable to cure the default. An event of default under the 2012 Credit Agreement includes customary events of default and failure to comply with financial covenants, including a maximum consolidated leverage ratio of 3.5 to 1 and a minimum consolidated interest coverage ratio of 3 to 1. As of December 31, 2016 , the Company was in compliance with these covenants. The unrealized gain associated with the 2015 Swap Agreement was $62,000 as of December 31, 2016 , which represents the estimated amount that the Company would receive from the counterparty in the event of an early termination. The Company entered into a swap agreement in 2006 (2006 Swap Agreement) to convert a portion of the Company's outstanding debt from a floating to a fixed rate of interest. The 2006 Swap Agreement expired in May 2016. Forward Currency-Exchange Contracts The Company uses forward currency-exchange contracts primarily to hedge exposures resulting from fluctuations in currency exchange rates. Such exposures result primarily from portions of the Company's operations and assets and liabilities that are denominated in currencies other than the functional currencies of the businesses conducting the operations or holding the assets and liabilities. The Company typically manages its level of exposure to the risk of currency-exchange fluctuations by hedging a portion of its currency exposures anticipated over the ensuing 12-month period, using forward currency-exchange contracts that have maturities of 12 months or less. Forward currency-exchange contracts that hedge forecasted accounts receivable or accounts payable are designated as cash flow hedges. The fair values for these instruments are included in other current assets for unrecognized gains and in other current liabilities for unrecognized losses, with an offset in AOCI (net of tax). For forward currency-exchange contracts that are designated as fair value hedges, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item are recognized currently in earnings. The fair values of forward currency-exchange contracts that are not designated as hedges are recorded currently in earnings. The Company recognized within SG&A expenses in the accompanying consolidated statement of income losses of $797,000 , $386,000 and $14,000 in 2016 , 2015 and 2014 , respectively, associated with forward currency-exchange contracts that were not designated as hedges. Management believes that any credit risk associated with forward currency-exchange contracts is remote based on the Company's financial position and the creditworthiness of the financial institutions issuing the contracts. The following table summarizes the fair value of the Company's derivative instruments designated and not designated as hedging instruments, the notional value of the associated derivative contracts, and the location of these instruments in the accompanying consolidated balance sheet: 2016 2015 (In thousands) Balance Sheet Asset Notional Asset Notional Derivatives Designated as Hedging Instruments: Derivatives in an Asset Position: Interest rate swap agreement Other Long-Term $ 62 $ 10,000 $ 38 $ 10,000 Derivatives in a Liability Position: Forward currency-exchange contracts Other Current $ (41 ) $ 2,380 $ (101 ) $ 6,525 Interest rate swap agreement Other Current $ — $ — $ (91 ) $ 5,250 Derivatives Not Designated as Hedging Instruments: Derivatives in an Asset Position: Forward currency-exchange contracts Other Current $ 2 $ 227 $ 2,536 $ 15,612 Derivatives in a Liability Position: Forward currency-exchange contracts Other Current $ (237 ) $ 17,185 $ — $ — (a) See Note 10 for the fair value measurements relating to these financial instruments. (b) The total notional amount is indicative of the level of the Company's derivative activity during 2016 and 2015 . The following table summarizes the activity in AOCI associated with the Company's derivative instruments designated as cash flow hedges as of and for the period ended December 31, 2016 : (In thousands) Interest Rate Swap Forward Currency- Total Unrealized Loss, Net of Tax, at January 2, 2016 $ (162 ) $ (67 ) $ (229 ) Loss Reclassified to Earnings (a) 241 170 411 Loss Recognized in AOCI (39 ) (131 ) (170 ) Unrealized Gain (Loss), Net of Tax, at December 31, 2016 $ 40 $ (28 ) $ 12 (a) See Note 13 for the income statement classification. As of December 31, 2016 , the Company expects to reclassify $49,000 of the net unrealized loss included in AOCI to earnings over the next twelve months. |
Fair Value Measurements and Fai
Fair Value Measurements and Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Fair Value of Financial Instruments | Fair Value Measurements and Fair Value of Financial Instruments Fair value measurement is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is established, which prioritizes the inputs used in measuring fair value into three broad levels as follows: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Inputs, other than quoted prices in active markets, that are observable either directly or indirectly. • Level 3—Unobservable inputs based on the Company's own assumptions. The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis: Fair Value as of December 31, 2016 (In thousands) Level 1 Level 2 Level 3 Total Assets: Money market funds and time deposits $ 10,855 $ — $ — $ 10,855 Forward currency-exchange contracts $ — $ 2 $ — $ 2 Interest rate swap agreement $ — $ 62 $ — $ 62 Banker's acceptance drafts (a) $ — $ 7,852 $ — $ 7,852 Liabilities: Forward currency-exchange contracts $ — $ 278 $ — $ 278 Fair Value as of January 2, 2016 (In thousands) Level 1 Level 2 Level 3 Total Assets: Money market funds and time deposits $ 9,767 $ — $ — $ 9,767 Forward currency-exchange contracts $ — $ 2,536 $ — $ 2,536 Interest rate swap agreement $ — $ 38 $ — $ 38 Banker's acceptance drafts (a) $ — $ 8,314 $ — $ 8,314 Liabilities: Forward currency-exchange contracts $ — $ 101 $ — $ 101 Interest rate swap agreement $ — $ 91 $ — $ 91 Contingent consideration (b) $ — $ — $ 1,091 $ 1,091 (a) Included in accounts receivable in the accompanying consolidated balance sheet. (b) Included in other current liabilities in the accompanying consolidated balance sheet. The Company uses the market approach technique to value its financial assets and liabilities, and there were no changes in valuation techniques during 2016 . The Company's financial assets and liabilities carried at fair value are comprised of cash equivalents, banker's acceptance drafts, and derivative instruments used to hedge the Company's foreign currency and interest rate risks. The Company's cash equivalents are comprised of money market funds and bank deposits which are highly liquid and readily tradable. These investments are valued using inputs observable in active markets for identical securities. The carrying value of banker's acceptance drafts approximates their fair value due to the short-term nature of the negotiable instrument. The fair values of the Company's interest rate swap agreements are based on LIBOR yield curves at the reporting date. The fair values of the Company's forward currency-exchange contracts are based on quoted forward foreign exchange rates at the reporting date. The forward currency-exchange contracts and interest rate swap agreements are hedges of either recorded assets or liabilities or anticipated transactions. Changes in values of the underlying hedged assets and liabilities or anticipated transactions are not reflected in the table above. The Company recorded contingent consideration as part of its acquisition of a European manufacturer on December 30, 2013. The fair value of the contingent consideration was based on the present value of the estimated future cash flows. Changes to the fair value of contingent consideration were recorded in SG&A expenses in the accompanying consolidated statement of income. This contingent consideration was paid during the first quarter of 2016. The following table provides a rollforward of the fair value, as determined by Level 3 inputs, of the contingent consideration: (In thousands) 2016 2015 Balance at Beginning of Year $ 1,091 $ 1,133 Payment (1,091 ) — Current period expense — 71 Currency translation — (113 ) Balance at End of Year $ — $ 1,091 The carrying value and fair value of the Company's long-term debt obligations are as follows: 2016 2015 (In thousands) Carrying Fair Carrying Fair Long-term Debt Obligations: Revolving credit facility $ 61,494 $ 61,494 $ 26,000 $ 26,000 Capital lease obligations 3,857 3,857 — — Other borrowings 417 417 — — $ 65,768 $ 65,768 $ 26,000 $ 26,000 The carrying values of the Company's revolving credit facility and capital lease obligations approximate fair value as the obligations bear variable rates of interest, which adjust quarterly and semi-annually, respectively, based on prevailing market rates. |
Business Segment and Geographic
Business Segment and Geographical Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Business Segment and Geographical Information | Business Segment and Geographical Information The Company has combined its operating entities into two reportable operating segments, Papermaking Systems and Wood Processing Systems, and a separate product line, Fiber-based Products. In classifying operational entities into a particular segment, the Company has aggregated businesses with similar economic characteristics, products and services, production processes, customers, and methods of distribution. The Company's Papermaking Systems segment develops, manufactures, and markets stock-preparation systems and equipment; fluid-handling systems; and doctoring, cleaning, and filtration systems and related consumables for the pulp and paper industry worldwide. Principal products manufactured by this segment include: custom-engineered stock-preparation systems and equipment for the preparation of wastepaper for conversion into recycled paper and balers and related equipment used in the processing of recyclable and waste materials; fluid-handling systems used primarily in the dryer section of the papermaking process and during the production of corrugated boxboard, metals, plastics, rubber, textiles, chemicals, and food; doctoring systems and equipment and related consumables important to the efficient operation of paper machines; and cleaning and filtration systems essential for draining, purifying, and recycling process water and cleaning paper machine fabrics and rolls. The Wood Processing Systems segment develops, manufactures and markets stranders and related equipment used in the production of OSB, an engineered wood panel product used primarily in home construction. This segment supplies debarking and wood chipping equipment used in the forest products and the pulp and paper industries. This segment also provides refurbishment and repair of pulping equipment for the pulp and paper industry. The Fiber-based Products business manufactures and sells granules derived from papermaking by-products primarily for use as agricultural carriers and for home lawn and garden applications, as well as for oil and grease absorption. (In thousands) 2016 2015 2014 Business Segment Information Revenues by Product Line: Papermaking Systems: Stock-Preparation $ 171,378 $ 148,341 $ 127,496 Doctoring, Cleaning, & Filtration 105,938 101,523 117,389 Fluid-Handling 89,145 92,797 103,314 Papermaking Systems $ 366,461 $ 342,661 $ 348,199 Wood Processing Systems 36,850 36,387 41,647 Fiber-based Products 10,815 11,059 12,281 $ 414,126 $ 390,107 $ 402,127 Income from Continuing Operations Before Provision for Income Taxes: Papermaking Systems (a) $ 57,427 $ 56,789 $ 50,485 Wood Processing Systems 8,327 10,926 6,977 Corporate and Fiber-based Products (b) (20,181 ) (17,596 ) (15,376 ) Total operating income 45,573 50,119 42,086 Interest expense, net (1,024 ) (748 ) (568 ) $ 44,549 $ 49,371 $ 41,518 Total Assets: Papermaking Systems $ 407,538 $ 354,417 $ 343,937 Wood Processing Systems 52,407 53,347 55,634 Other (c) 10,746 7,734 14,176 Total Assets $ 470,691 $ 415,498 $ 413,747 Depreciation and Amortization: Papermaking Systems $ 11,513 $ 7,898 $ 7,724 Wood Processing Systems 2,188 2,384 2,977 Other 625 539 488 $ 14,326 $ 10,821 $ 11,189 Capital Expenditures: Papermaking Systems $ 5,504 $ 4,639 $ 5,640 Other 300 840 1,115 $ 5,804 $ 5,479 $ 6,755 (In thousands) 2016 2015 2014 Geographical Information Revenues (d): United States $ 165,335 $ 193,383 $ 174,003 China 43,299 50,814 43,867 Other 205,492 145,910 184,257 $ 414,126 $ 390,107 $ 402,127 Long-lived Assets (e): United States $ 18,482 $ 17,373 $ 15,685 China 10,714 12,278 13,996 Germany 5,792 63 85 Other 12,716 12,579 15,199 $ 47,704 $ 42,293 $ 44,965 (a) Includes other income of $0.3 million in 2016 , and restructuring costs of $0.5 million and $0.8 million in 2015 and 2014 , respectively (see Note 8). (b) Corporate primarily includes general and administrative expenses. (c) Primarily includes Corporate and Fiber-based Products' cash and cash equivalents and property, plant, and equipment. (d) Revenues are attributed to countries based on customer location. (e) Represents property, plant, and equipment, net. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings per Share Basic and diluted EPS were calculated as follows: (In thousands, except per share amounts) 2016 2015 2014 Amounts Attributable to Kadant: Income from Continuing Operations $ 32,074 $ 34,315 $ 28,682 Income (Loss) from Discontinued Operation 3 74 (23 ) Net Income Attributable to Kadant $ 32,077 $ 34,389 $ 28,659 Basic Weighted Average Shares 10,869 10,867 10,988 Effect of Stock Options, Restricted Stock Units and Employee Stock Purchase Plan 280 227 222 Diluted Weighted Average Shares 11,149 11,094 11,210 Basic EPS: Continuing Operations $ 2.95 $ 3.16 $ 2.61 Discontinued Operation $ — $ 0.01 $ — Net Income per Basic Share $ 2.95 $ 3.16 $ 2.61 Diluted EPS: Continuing Operations $ 2.88 $ 3.09 $ 2.56 Discontinued Operation $ — $ 0.01 $ — Net Income per Diluted Share $ 2.88 $ 3.10 $ 2.56 The dilutive effect of RSUs totaling 36,700 , 23,100 , and 33,000 shares of common stock was not included in the computation of diluted EPS in 2016 , 2015 , and 2014 , respectively, as the effect would have been antidilutive or, for unvested performance-based RSUs, the performance conditions had not been met as of the end of the reporting periods during the year. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Items | 12 Months Ended |
Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Items | Accumulated Other Comprehensive Items Comprehensive income combines net income and other comprehensive items, which represent certain amounts that are reported as components of stockholders' equity in the accompanying consolidated balance sheet, including foreign currency translation adjustments, unrecognized prior service cost and deferred losses associated with pension and other post-retirement benefit plans, and deferred losses and gains on hedging instruments. Changes in each component of AOCI, net of tax are as follows: (In thousands) Foreign Currency Translation Adjustment Unrecognized Prior Service Cost Deferred Loss on Pension and Other Post-Retirement Benefit Plans Deferred (Loss) Gain on Hedging Instruments Accumulated Other Comprehensive Items Balance at January 2, 2016 $ (27,932 ) $ (489 ) $ (8,322 ) $ (229 ) $ (36,972 ) Other comprehensive loss before reclassifications (13,162 ) (3 ) (294 ) (170 ) (13,629 ) Reclassifications from AOCI — 95 458 411 964 Net current period other comprehensive (loss) income (13,162 ) 92 164 241 (12,665 ) Balance at December 31, 2016 $ (41,094 ) $ (397 ) $ (8,158 ) $ 12 $ (49,637 ) Amounts reclassified out of AOCI are as follows: (In thousands) 2016 2015 2014 Income Statement Pension and Other Post-Retirement Plans (1) Amortization of prior service costs $ (147 ) $ (147 ) $ (148 ) SG&A expenses Amortization of actuarial losses (701 ) (576 ) (352 ) SG&A expenses Total expense before income taxes (848 ) (723 ) (500 ) Income tax benefit 295 249 175 Provision for income taxes (553 ) (474 ) (325 ) Cash Flow Hedges (2) Interest rate swap agreements (174 ) (420 ) (332 ) Interest expense Forward currency-exchange contracts (14 ) (12 ) 31 Revenues Forward currency-exchange contracts (186 ) — — Cost of revenues Forward currency-exchange contracts — 1,691 1,247 SG&A expenses Total (expense) income before income taxes (374 ) 1,259 946 Income tax provision (37 ) (150 ) (57 ) Provision for income taxes (411 ) 1,109 889 Total Reclassifications $ (964 ) $ 635 $ 564 (1) Included in the computation of net periodic benefit costs. See Note 3 for additional information. (2) See Note 9 for additional information. |
Unaudited Quarterly Information
Unaudited Quarterly Information | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Information | Unaudited Quarterly Information 2016 (In thousands, except per share amounts) First Second Third Fourth Revenues $ 96,538 $ 111,828 $ 105,519 $ 100,241 Gross Profit 43,976 50,261 48,079 46,073 Amounts Attributable to Kadant: Income from Continuing Operations 6,876 8,311 9,154 7,733 Income from Discontinued Operation — — 3 — Net Income Attributable to Kadant $ 6,876 $ 8,311 $ 9,157 $ 7,733 Basic Earnings per Share: Continuing Operations $ 0.64 $ 0.76 $ 0.84 $ 0.71 Net Income Attributable to Kadant $ 0.64 $ 0.76 $ 0.84 $ 0.71 Diluted Earnings per Share: Continuing Operations $ 0.62 $ 0.75 $ 0.82 $ 0.69 Net Income Attributable to Kadant $ 0.62 $ 0.75 $ 0.82 $ 0.69 Cash Dividends Declared per Common Share $ 0.19 $ 0.19 $ 0.19 $ 0.19 2015 (In thousands, except per share amounts) First Second Third Fourth Revenues $ 92,251 $ 98,327 $ 91,929 $ 107,600 Gross Profit 44,337 45,727 43,668 46,393 Amounts Attributable to Kadant: Income from Continuing Operations 6,832 8,469 8,647 10,367 Income (Loss) from Discontinued Operation 65 (5 ) (4 ) 18 Net Income Attributable to Kadant $ 6,897 $ 8,464 $ 8,643 $ 10,385 Basic Earnings per Share: Continuing Operations $ 0.63 $ 0.77 $ 0.80 $ 0.96 Net Income Attributable to Kadant $ 0.63 $ 0.77 $ 0.80 $ 0.96 Diluted Earnings per Share: Continuing Operations $ 0.62 $ 0.76 $ 0.78 $ 0.94 Net Income Attributable to Kadant $ 0.62 $ 0.76 $ 0.78 $ 0.94 Cash Dividends Declared per Common Share $ 0.17 $ 0.17 $ 0.17 $ 0.17 |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On March 1, 2017 the Company entered into an Amended and Restated Credit Agreement (2017 Credit Agreement) which became effective on March 2, 2017. The 2017 Credit Agreement is a five -year unsecured revolving credit facility in the aggregate principal amount of up to $200,000,000 . The 2017 Credit Agreement also includes an uncommitted unsecured incremental borrowing facility of up to an additional $100,000,000 . The principal on any borrowings made under the 2017 Credit Agreement is due on March 1, 2022. Interest on any loans outstanding under the 2017 Credit Agreement accrues and generally is payable quarterly in arrears at one of the following rates selected by the Company: (i) the Base Rate, calculated as the highest of (a) the federal funds rate plus 0.50% , (b) the prime rate as published by Citizens Bank, and (c) the thirty-day LIBOR rate, as defined, plus 0.50% ; or (ii) the LIBOR rate (with a zero percent floor), as defined, plus an applicable margin of 1% to 2% . The applicable margin is determined based upon the ratio of the Company's total debt, net of certain cash, as defined, to earnings before interest, taxes, depreciation, and amortization (EBITDA), as defined in the 2017 Credit Agreement. For this purpose, total debt net of certain cash is defined as total debt less the sum of (i) unrestricted U.S. cash, and (ii) 65% of unrestricted cash outside of the United States, but no more than an aggregate amount of $30,000,000 . The obligations of the Company under the 2017 Credit Agreement may be accelerated upon the occurrence of an event of default under the 2017 Credit Agreement, which includes customary events of default including without limitation payment defaults, defaults in the performance of affirmative and negative covenants, the inaccuracy of representations or warranties, bankruptcy- and insolvency-related defaults, defaults relating to such matters as the Employment Retirement Income Security Act (ERISA), unsatisfied judgments, the failure to pay certain indebtedness, and a change of control default. In addition, the 2017 Credit Agreement contains negative covenants applicable to the Company and its subsidiaries, including financial covenants requiring the Company to comply with a maximum consolidated leverage ratio of 3.5 to 1 , a minimum consolidated interest coverage ratio of 3 to 1 , and restrictions on liens, indebtedness, fundamental changes, dispositions of property, making certain restricted payments (including dividends and stock repurchases), investments, transactions with affiliates, sale and leaseback transactions, swap agreements, changing its fiscal year, arrangements affecting subsidiary distributions, entering into new lines of business, and certain actions related to the discontinued operation. Loans under the 2017 Credit Agreement are guaranteed by certain domestic subsidiaries of the Company pursuant to an Amended and Restated Guarantee Agreement, dated as of March 1, 2017. In addition, one of Kadant's foreign subsidiaries entered into a Guarantee Agreement limited to certain obligations of two foreign subsidiary borrowers pursuant to a Guarantee Agreement dated as of March 1, 2017. |
Nature of Operations and Summ25
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements of the Company include the accounts of its wholly and majority-owned subsidiaries. All material intercompany accounts and transactions have been eliminated. |
Fiscal Year | Fiscal Year Typically, the Company's fiscal quarters and fiscal year consist of 13 and 52 weeks, respectively, ending on the Saturday closest to the end of the corresponding calendar quarter for the Company's fiscal quarters and on the Saturday closest to December 31 for the Company's fourth fiscal quarter and fiscal year. As a result of the difference between the fiscal and calendar periods, a 53rd week is added to the Company's fiscal year every five or six years. In a 53-week fiscal year, the Company's fourth fiscal quarter contains 14 weeks. The Company's fiscal year ended December 31, 2016 (fiscal 2016) and January 2, 2016 (fiscal 2015) both contained 52 weeks and the Company's fiscal year ended January 3, 2015 (fiscal 2014) contained 53 weeks. Each quarter of fiscal 2016, 2015 and 2014 contained 13 weeks, except the fourth quarter of 2014, which contained 14 weeks. |
Use of Estimates and Critical Accounting Policies | Use of Estimates and Critical Accounting Policies The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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. Critical accounting policies are defined as those that entail significant judgments and estimates, and could potentially result in materially different results under different assumptions and conditions. The Company believes that the most critical accounting policies upon which its financial position depends, and which involve the most complex or subjective decisions or assessments, concern revenue recognition and accounts receivable, warranty obligations, income taxes, the valuation of goodwill and intangible assets, inventories, and pension obligations. A discussion on the application of these and other accounting policies is included in Notes 1 and 3. Although the Company makes every effort to ensure the accuracy of the estimates and assumptions used in the preparation of its consolidated financial statements or in the application of accounting policies, if business conditions were different, or if the Company were to use different estimates and assumptions, it is possible that materially different amounts could be reported in the Company's consolidated financial statements. |
Revenue Recognition and Accounts Receivable | Revenue Recognition and Accounts Receivable The Company recognizes revenue under Accounting Standards Codification (ASC) 605, "Revenue Recognition," (ASC 605) when the following criteria have been met: persuasive evidence of an arrangement exists, delivery has occurred or service has been rendered, the sales price is fixed or determinable, and collectability is reasonably assured. When the terms of the sale include customer acceptance provisions, and compliance with those provisions cannot be demonstrated until customer acceptance, revenues are recognized upon such acceptance. The Company includes in revenue amounts invoiced for shipping and handling with the corresponding costs reflected in cost of revenues. Provisions for discounts, warranties, returns and other adjustments are provided for in the period in which the related sales are recorded. Sales taxes, value-added taxes and certain excise taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from revenue. Most of the Company's revenue is recognized in accordance with the accounting policies in the preceding paragraph. However, when a sale arrangement involves multiple elements, such as equipment and installation, the Company considers the guidance in ASC 605. Such transactions are evaluated to determine whether the deliverables in the arrangement represent separate units of accounting based on the following criteria: the delivered item has value to the customer on a stand-alone basis, and if the contract includes a general right of return relative to the delivered item, delivery or performance of the undelivered item is considered probable and substantially under the control of the Company. Revenue is allocated to each unit of accounting or element based on relative selling prices and is recognized as each element is delivered or completed. The Company determines relative selling prices by using either vendor-specific objective evidence (VSOE) if that exists, or third-party evidence of selling price. When neither VSOE nor third-party evidence of selling price exists for a deliverable, the Company uses its best estimate of the selling price for that deliverable. In cases in which elements cannot be treated as separate units of accounting, the elements are combined into a single unit of accounting for revenue recognition purposes. In addition, revenues and profits on certain long-term contracts are recognized using the percentage-of-completion method or the completed-contract method of accounting pursuant to ASC 605. Revenues recorded under the percentage-of-completion method were $23,300,000 , $32,078,000 , and $19,078,000 in 2016 , 2015 , and 2014 , respectively. The percentage of completion is determined by comparing the actual costs incurred to date to an estimate of total costs to be incurred on each contract. If a loss is indicated on any contract in process, a provision is made currently for the entire estimated loss. The Company's contracts generally provide for billing of customers upon the attainment of certain milestones specified in each contract. Revenues earned on contracts in process in excess of billings are classified as unbilled contract costs and fees, and amounts billed in excess of revenues earned are classified as billings in excess of contract costs and fees, which are included in other current liabilities in the accompanying consolidated balance sheet. There are no significant amounts included in the accompanying consolidated balance sheet that are not expected to be recovered from existing contracts at current contract values, or that are not expected to be collected within one year, including amounts that are billed but not paid under retainage provisions. For long-term contracts that do not meet the criteria under ASC 605-35 to be accounted for under the percentage-of-completion method, the Company recognizes revenue, primarily in China, using the completed-contract method. When using the completed-contract method, the Company recognizes revenue when the contract has been substantially completed, the product has been delivered, and, if applicable, the customer acceptance criteria have been met. Inventory included $274,000 at year-end 2015 associated with long-term contracts accounted for under the completed-contract method. Customer deposits included $5,158,000 and $2,374,000 of advance payments on long-term contracts accounted for under the completed-contract method at year-end 2016 and year-end 2015 , respectively. Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company exercises judgment in determining its allowance for doubtful accounts, which is based on its historical collection experience, current trends, credit policies, specific customer collection issues, and accounts receivable aging categories. In determining this allowance, the Company looks at historical write-offs of its receivables. The Company also looks at current trends in the credit quality of its customer base as well as changes in its credit policies. The Company performs ongoing credit evaluations of its customers and adjusts credit limits based upon payment history and each customer's current creditworthiness. The Company continuously monitors collections and payments from its customers. Account balances are charged off against the allowance when the Company believes it is probable the receivable will not be recovered. In some instances, the Company utilizes letters of credit to mitigate its credit exposure. The Company's Chinese subsidiaries may receive banker's acceptance drafts from customers as payment for their trade accounts receivable. The banker's acceptance drafts are non-interest bearing obligations of the issuing bank and mature within six months of the origination date. The Company can sell the drafts at a discount to a third-party financial institution or transfer the drafts to vendors in settlement of current accounts payable prior to the scheduled maturity date. These drafts, which totaled $7,852,000 and $8,314,000 at year-end 2016 and year-end 2015 , respectively, are included in accounts receivable in the accompanying consolidated balance sheet until the subsidiary sells the drafts to a bank and receives a discounted amount, transfers the banker's acceptance drafts in settlement of current accounts payable prior to maturity, or obtains cash payment on the scheduled maturity date. |
Warranty Obligations | Warranty Obligations The Company provides for the estimated cost of product warranties at the time of sale based on the actual historical occurrence rates and repair costs, as well as knowledge of any specific warranty problems that indicate that projected warranty costs may vary from historical patterns. The Company typically negotiates the terms regarding warranty coverage and length of warranty depending on the products and applications. While the Company engages in extensive product quality programs and processes, the Company's warranty obligation is affected by product failure rates, repair costs, service delivery costs incurred in correcting a product failure, and supplier warranties on parts delivered to the Company. Should actual product failure rates, repair costs, service delivery costs, or supplier warranties on parts differ from the Company's estimates, revisions to the estimated warranty liability would be required. |
Income Taxes | Income Taxes In accordance with ASC 740, "Income Taxes," (ASC 740), the Company recognizes deferred income taxes based on the expected future tax consequences of differences between the financial statement basis and the tax basis of assets and liabilities, calculated using enacted tax rates in effect for the year in which these differences are expected to reverse. A tax valuation allowance is established, as needed, to reduce deferred tax assets to the amount expected to be realized. In the period in which it becomes more likely than not that some or all of the deferred tax assets will be realized, the valuation allowance will be adjusted. It is the Company's policy to provide for uncertain tax positions and the related interest and penalties based upon management's assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes. At December 31, 2016 , the Company believes that it has appropriately accounted for any liability for unrecognized tax benefits. To the extent the Company prevails in matters for which a liability for an unrecognized tax benefit is established, the statute of limitations expires for a tax jurisdiction year, or the Company is required to pay amounts in excess of the liability, its effective tax rate in a given financial statement period may be affected. In November 2015, the FASB issued ASU No. 2015-17, "Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes," which simplifies the presentation of deferred income taxes, as it requires that deferred tax assets and liabilities be classified as non-current in the accompanying consolidated balance sheet. The Company early adopted this ASU prospectively for the year ended January 2, 2016, which resulted in all deferred taxes being reported as non-current in its accompanying consolidated balance sheet. See Note 5, Income Taxes, for additional information. |
Earnings per Share | Earnings per Share Basic earnings per share (EPS) has been computed by dividing net income attributable to Kadant by the weighted average number of shares outstanding during the year. Diluted EPS was computed using the treasury stock method assuming the effect of all potentially dilutive securities, including stock options, restricted stock units (RSUs) and employee stock purchase plan shares. |
Cash and Cash Equivalents | Cash and Cash Equivalents At year-end 2016 and 2015 , the Company's cash equivalents included investments in money market funds and other marketable securities, which had maturities of three months or less at the date of purchase. The carrying amounts of cash equivalents approximate their fair values due to the short-term nature of these instruments. |
Restricted Cash | Restricted Cash At year-end 2016 and 2015 , the Company had approximately $2,082,000 and $1,406,000 of restricted cash, respectively. This cash serves as collateral for bank guarantees primarily associated with providing assurance to customers that the Company will fulfill certain customer obligations entered into in the normal course of business. The majority of the bank guarantees expire by the end of 2017. |
Inventories | Inventories Inventories are stated at the lower of cost (on a first-in, first-out; or weighted average basis) or market value and include materials, labor, and manufacturing overhead. The Company regularly reviews its quantities of inventories on hand and compares these amounts to the historical and forecasted usage of and demand for each particular product or product line. The Company records a charge to cost of revenues for excess and obsolete inventory to reduce the carrying value of inventories to net realizable value. |
Property, Plant, and Equipment | Property, Plant, and Equipment Property, plant, and equipment are stated at cost. The costs of additions and improvements are capitalized, while maintenance and repairs are charged to expense as incurred. The Company provides for depreciation and amortization primarily using the straight-line method over the estimated useful lives of the property as follows: buildings, 10 to 40 years; machinery and equipment, 2 to 10 years; and leasehold improvements, the shorter of the term of the lease or the life of the asset. |
Intangible Assets | Intangible Assets Intangible assets in the accompanying consolidated balance sheet include the costs of acquired intellectual property, tradenames, patents, customer relationships, non-compete agreements and other specifically identifiable intangible assets. An intangible asset of $8,100,000 associated with the acquisition of the Johnson tradename as part of the Company's acquisition of The Johnson Corporation in 2005 has an indefinite life and is not being amortized. The remaining intangible assets have been amortized as the underlying economic benefits are realized with a weighted-average amortization period of 12 years . The intangible asset lives have been determined based on the anticipated period over which the Company will derive future cash flow benefits from the intangible assets. The Company has considered the effects of legal, regulatory, contractual, competitive, and other economic factors in determining these useful lives. |
Goodwill | Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the identifiable net assets of the acquired business at the date of acquisition. The Company’s acquisitions have historically been made at prices above the fair value of the acquired net assets, resulting in goodwill, due to the expectation of synergies from combining the businesses. |
Impairment of Long-Lived Assets | The Company assesses its long-lived assets, other than goodwill and indefinite-lived intangible assets, for impairment whenever facts and circumstances indicate that the carrying amounts may not be fully recoverable. To analyze recoverability, the Company projects undiscounted net future cash flows over the remaining lives of such assets or asset groups. If these projected cash flows were to be less than the carrying amounts, an impairment loss would be recognized, resulting in a write-down of the assets with a corresponding charge to earnings. The impairment loss would be measured based upon the difference between the carrying amounts and the fair values of the assets. Impairment of Long-Lived Assets The Company evaluates the recoverability of goodwill and intangible assets with indefinite useful lives as of the end of each fiscal year, or more frequently if events or changes in circumstances, such as a significant decline in sales, earnings, or cash flows, or material adverse changes in the business climate, indicate that the carrying value of an asset might be impaired. Testing goodwill for impairment involves a two-step quantitative process. However, prior to performing the two-step quantitative goodwill impairment test, the Company has the option to first perform an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. At December 31, 2016 and January 2, 2016 , the Company performed a qualitative goodwill impairment analysis. This impairment analysis included an assessment of certain qualitative factors including, but not limited to, the results of prior fair value calculations, the movement of the Company's share price and market capitalization, the reporting unit and overall financial performance, and macroeconomic and industry conditions. The Company considered the qualitative factors and weighed the evidence obtained, and determined that it was not more likely than not that the fair value of any of the reporting units was less than its carrying amount. Although the Company believes the factors considered in the impairment analysis are reasonable, significant changes in any one of the assumptions used could have produced a different result. |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions All assets and liabilities of the Company's foreign subsidiaries are translated at year-end exchange rates, and revenues and expenses are translated at average exchange rates for each quarter in accordance with ASC 830, "Foreign Currency Matters." Resulting translation adjustments are reflected in the "accumulated other comprehensive items (AOCI)" component of stockholders' equity (see Note 13). Foreign currency transaction gains and losses are included in the accompanying consolidated statement of income and are not material for the three years presented. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes compensation cost for all stock-based awards granted to employees and directors based on the grant date estimate of fair value for those awards. The fair value of RSUs is based on the grant date trading price of the Company's common stock, reduced by the present value of estimated dividends foregone during the requisite service period. The fair value of stock options is based on the Black-Scholes option-pricing model. For stock options and time-based RSUs, compensation expense is recognized ratably over the requisite service period for the entire award net of forfeitures. For performance-based RSUs, compensation expense is recognized ratably over the requisite service period for each separately-vesting portion of the award net of forfeitures and remeasured at each reporting period until the total number of RSUs to be issued is known. Compensation expense related to any modified stock-based awards is based on the fair value for those awards as of the modification date with any remaining incremental compensation expense recognized ratably over the remaining requisite service period. |
Derivatives | Derivatives The Company uses derivative instruments primarily to reduce its exposure to changes in currency exchange rates and interest rates. When the Company enters into a derivative contract, the Company makes a determination as to whether the transaction is deemed to be a hedge for accounting purposes. For a contract deemed to be a hedge, the Company formally documents the relationship between the derivative instrument and the risk being hedged. In this documentation, the Company specifically identifies the asset, liability, forecasted transaction, cash flow, or net investment that has been designated as the hedged item, and evaluates whether the derivative instrument is expected to reduce the risks associated with the hedged item. To the extent these criteria are not met, the Company does not use hedge accounting for the derivative. The changes in the fair value of a derivative not deemed to be a hedge are recorded currently in earnings. The Company does not hold or engage in transactions involving derivative instruments for purposes other than risk management. ASC 815, "Derivatives and Hedging," requires that all derivatives be recognized on the balance sheet at fair value. For derivatives designated as cash flow hedges, the related gains or losses on these contracts are deferred as a component of AOCI. These deferred gains and losses are recognized in the period in which the underlying anticipated transaction occurs. For derivatives designated as fair value hedges, the unrealized gains and losses resulting from the impact of currency exchange rate movements are recognized in earnings in the period in which the exchange rates change and offset the currency gains and losses on the underlying exposures being hedged. The Company performs an evaluation of the effectiveness of the hedge both at inception and on an ongoing basis. The ineffective portion of a hedge, if any, and changes in the fair value of a derivative not deemed to be a hedge, are recorded in the consolidated statement of income. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Revenue from Contracts with Customers (Topic 606), Section A-Summary and Amendments That Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs-Contracts with Customers (Subtopic 340-40). In May 2014, the FASB issued ASU No. 2014-09, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The new guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective. In March 2016, the FASB issued ASU No. 2016-08, which further clarifies the guidance on the principal versus agent considerations within ASU No. 2014-09. In April 2016, the FASB issued ASU No. 2016-10 to expand the guidance on identifying performance obligations and licensing within ASU 2014-09. In May 2016, the FASB issued ASU No. 2016-11, which rescinds certain previously-issued guidance, including, among other items, guidance relating to accounting for shipping and handling fees and freight services effective upon adoption of ASU No. 2014-09. Also in May 2016, the FASB issued ASU No. 2016-12, which narrowly amended the revenue recognition guidance regarding collectability, noncash consideration, presentation of sales tax and transition. In December 2016, the FASB issued ASU No. 2016-20, which clarifies narrow aspects of Topic 606 and corrects unintended application of the guidance. These new ASUs are effective for the Company beginning in fiscal 2018. Early adoption is permitted in fiscal 2017. The Company is continuing to assess the potential effects of these ASUs on its consolidated financial statements, business processes, systems and controls. The Company is analyzing its current contracts and comparing its current accounting policies and practices pertaining to revenue recognition to those required under the new ASUs to identify potential differences. The Company’s preliminary assessment of its most commonly used customer terms and conditions and routine sales transactions did not identify material impacts to its consolidated financial statements from the application of the guidance; however, a broad assessment is ongoing that includes surveying its major businesses concerning any unique customer contract terms or transactions that could have implications for the timing of revenue recognition under the new guidance. While the assessment process is ongoing, the Company currently anticipates adopting these ASUs using the modified retrospective transition approach. Under this approach, this guidance would apply to all new contracts initiated in fiscal 2018. For existing contracts that have remaining obligations as of the beginning of fiscal 2018, any difference between the recognition criteria in these ASUs and the Company’s current revenue recognition practices would be recognized using a cumulative effect adjustment to the opening balance of retained earnings. The Company is also in the process of developing and implementing appropriate changes to its business processes, systems and controls to support the recognition criteria and disclosure requirements of these ASUs. Interest-Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs. In April 2015, the FASB issued ASU No. 2015-03, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In addition, in June 2015, the FASB issued ASU No. 2015-15, which allows an entity to defer the requirements of ASU No. 2015-03 on deferred issuance costs related to line-of-credit arrangements. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in these ASUs. These new disclosure items were effective for the Company beginning in fiscal 2016. The Company adopted these ASUs at the beginning of fiscal 2016. Adoption of these ASUs did not have an impact on the Company’s consolidated financial statements. Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). In May 2015, the FASB issued ASU No. 2015-07, which removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. This ASU also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using that practical expedient. The Company adopted the disclosure requirements in this guidance at the beginning of fiscal 2016. As this ASU is disclosure-related only, its adoption did not have an effect on the Company’s consolidated financial statements. Inventory (Topic 330), Simplifying the Measurement of Inventory . In July 2015, the FASB issued ASU No. 2015-11, which requires that an entity measure inventory within the scope of this ASU at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Substantial and unusual losses that result from subsequent measurement of inventory should be disclosed in the financial statements. This new guidance is effective for the Company beginning in fiscal 2017. The Company does not expect that adoption of this ASU will have a material effect on its consolidated financial statements. Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments. In September 2015, the FASB issued ASU No. 2015-16, which requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The acquirer is required to record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. In addition, an entity is required to present, separately on the face of the statement of income or through disclosure in the notes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The Company adopted this guidance at the beginning of fiscal 2016. Adoption of this ASU did not have an impact on the Company’s consolidated financial statements. Leases (Topic 842). In February 2016, the FASB issued ASU No. 2016-02, which requires a lessee to recognize a right-of-use asset and a lease liability for operating leases, initially measured at the present value of the future lease payments, in its balance sheet. This ASU also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. This new guidance is effective for the Company in fiscal 2019. Early adoption is permitted. As part of the implementation of this new standard, the Company is in the process of reviewing current accounting policies and assessing the practical expedients allowed under this new guidance. The Company expects that most of its operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon adoption, which is required using the modified retrospective transition method. The Company is currently evaluating the other effects that the adoption of this ASU will have on its consolidated financial statements. Compensation-Stock Compensation (Topic 718 ), Improvements to Employee Share-Based Payment Accounting. In March 2016, the FASB issued ASU No. 2016-09, which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification in the statement of cash flows. The Company early adopted this ASU at the beginning of fiscal 2016. This ASU requires that excess income tax benefits and tax deficiencies related to stock-based compensation arrangements be recognized as discrete items within the provision for income taxes instead of capital in excess of par value in the reporting period in which they occur. As a result of the adoption of this ASU, the Company recognized an income tax benefit of $582,000 , or $0.05 per diluted share, in the Company’s consolidated statement of income in 2016. The Company prospectively adopted the requirement to classify the excess tax benefits from stock-compensation awards within operating activities in the consolidated statement of cash flows in 2016. Prior period amounts were not restated. The Company also adopted the guidance in this ASU that requires that taxes paid related to the withholding of common stock upon the vesting of employee stock awards be presented separately within financing activities in the consolidated statement of cash flows. The Company has retrospectively restated fiscal 2015 and 2014 to reclassify the comparable amount, which was previously presented in other current liabilities within operating activities. There were no other material effects from adoption of this ASU on the Company’s consolidated financial statements. Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. In June 2016, the FASB issued ASU No. 2016-13, which significantly changes the way entities recognize impairment of many financial assets by requiring immediate recognition of estimated credit losses expected to occur over their remaining lives. This new guidance is effective for the Company in fiscal 2020. Early adoption is permitted beginning in fiscal 2019. The Company is currently evaluating the effects that the adoption of this ASU will have on its consolidated financial statements. Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. In August 2016, the FASB issued ASU No. 2016-15, which simplifies the diversity in practice related to the presentation and classification of certain cash receipts and cash payments in the statement of cash flows under Topic 230. This ASU addresses the following eight specific cash flow issues: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance; distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. This new guidance is effective for the Company in fiscal 2018. Early adoption is permitted. The Company does not believe that adoption of this ASU will have a material impact on its consolidated financial statements. Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory. In October 2016, the FASB issued ASU No. 2016-16, which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs and eliminates the exception for an intra-entity transfer of an asset other than inventory. This new guidance is effective for the Company in fiscal 2018 with adoption required on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Early adoption is permitted. The Company is currently evaluating the effect that the adoption of this ASU will have on its consolidated financial statements. Statement of Cash Flows (Topic 230), Restricted Cash. In November 2016, the FASB issued ASU No. 2016-18, which requires inclusion of restricted cash and restricted cash equivalents within cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This new guidance is effective for the Company in fiscal 2018. Early adoption is permitted. The Company is currently evaluating the effect that the adoption of this ASU will have on its consolidated financial statements. Business Combinations (Topic 805), Clarifying the Definition of a Business. In January 2017, the FASB issued ASU No. 2017-01, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The revised definition of a business under ASU 2017-01 will reduce the number of transactions that are accounted for as business combinations. This new guidance is effective on a prospective basis for the Company in fiscal 2018. Early adoption is allowed for certain transactions. The Company is currently evaluating the effects that the adoption of this ASU will have on its consolidated financial statements. Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323), Amendments to Securities and Exchange Commission (SEC) Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings. In January 2017, the FASB issued ASU No. 2017-03 that provides amendments that add paragraph 250-10-S99-6 which includes the text of "SEC Staff Announcement: Disclosure of the Impact That Recently Issued Accounting Standards Will Have on the Financial Statements of a Registrant When Such Standards Are Adopted in a Future Period (in accordance with Staff Accounting Bulletin (SAB) Topic 11.M). This announcement applies to ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) ; ASU No. 2016-02, Leases (Topic 842) ; and ASU 2016-03, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments ; and subsequent amendments. Therefore, the Company has enhanced its disclosures regarding the impact that these recently issued accounting standards to be adopted in future periods will have on its accounting and disclosures in this footnote. Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment. In January 2017, the FASB issued ASU No. 2017-04, which eliminates Step 2 in goodwill impairment testing, which requires that goodwill impairment losses be measured as the difference between the implied value of a reporting unit’s goodwill and its carrying amount. This ASU will reduce the cost and complexity of impairment testing by requiring goodwill impairment losses to be measured as the excess of the reporting unit’s carrying amount, including goodwill and related goodwill tax effects, over its fair value. This new guidance is effective on a prospective basis for the Company in fiscal 2020. Early adoption is permitted. The Company does not believe that adoption of this ASU will have a material effect on its consolidated financial statements. |
Acquisitions | Acquisitions The Company’s acquisitions have been accounted for using the purchase method of accounting and the acquired companies’ results have been included in the accompanying consolidated financial statements from the dates of the acquisitions. The Company incurred acquisition transaction costs of approximately $1,832,000 and $ 326,000 in 2016 and 2014, respectively, which are included in selling, general, and administrative (SG&A) expenses in the accompanying consolidated statement of income. The Company's acquisitions have historically been made at prices above the fair value of the acquired net assets, resulting in goodwill, due to expectations of synergies from combining the businesses. The Company realizes synergies in connection with these acquisitions, including the use of the Company's existing distribution channels to expand sales of the products of the acquired businesses. |
Pension and Other Post-Retirement Benefits Plans | The Company has developed an investment policy for its U.S. noncontributory defined benefit retirement plan. The investment strategy is to emphasize total return, that is, the aggregate return from capital appreciation and dividend and interest income. The primary objective of the investment management for the plan's assets is the emphasis on consistent growth; specifically, growth in a manner that protects the plan's assets from excessive volatility in market value from year to year. The investment policy takes into consideration the benefit obligations, including timing of distributions. Pension and Other Post-Retirement Benefits Plans The Company sponsors a noncontributory defined benefit pension plan for eligible employees at one of its U.S. divisions and its corporate office. Effective December 31, 2005, this plan was closed to new participants. Three of the Company’s non-U.S. subsidiaries also sponsor defined benefit pension plans covering certain employees at those subsidiaries. Funds for the U.S. pension plan and one of the non-U.S. pension plans are contributed to a trustee as necessary to provide for current service and for any unfunded projected benefit obligation over a reasonable period. The remaining two non-U.S. pension plans are unfunded as permitted under their plans and applicable laws. Benefits under the Company’s pension plans are based on years of service and employee compensation. The Company also provides other post-retirement benefits under two plans in the United States, which are both closed to new retirees, and at one of its non-U.S. subsidiaries. In addition, the Company provides for a restoration plan for certain executive officers which fully supplements benefits lost under the noncontributory defined benefit retirement plan as a consequence of applicable Internal Revenue Service limits. In accordance with ASC 715, "Compensation-Retirement Benefits," (ASC 715), an employer is required to recognize the funded status of defined benefit pension and other post-retirement benefit plans as an asset or liability and changes in that funded status through comprehensive income. These amounts will be subsequently recognized as net periodic pension cost pursuant to the Company's historical accounting policy for amortizing such amounts. Further, actuarial gains and losses that arise in subsequent periods and are not recognized as net periodic pension cost in the same periods will be recognized as a component of AOCI. The discount rates for pension and other post-retirement plans are based on market yields on high-quality corporate bonds currently available and expected to be available during the period to maturity of the benefits. For pension and post-retirement plans, which have been closed to new participants thereby shortening the duration, the discount rate is determined based on discounting the projected benefit streams against the Citigroup Pension discount curve. In developing the overall expected long-term return on plan assets assumption, a building block approach was used in which rates of return in excess of inflation were considered separately for equity securities, debt securities, and other assets. The excess returns were weighted by the representative target allocation and added along with an appropriate rate of inflation to develop the overall expected long-term return on plan assets assumption. The Company believes this determination is consistent with ASC 715. |
Nature of Operations and Summ26
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Changes in Allowance for Doubtful Accounts | The changes in the allowance for doubtful accounts are as follows: (In thousands) 2016 2015 2014 Balance at Beginning of Year $ 2,163 $ 2,198 $ 2,689 Provision charged to expense 453 379 246 Accounts recovered — — 15 Accounts written off (128 ) (205 ) (590 ) Currency translation (93 ) (209 ) (162 ) Balance at End of Year $ 2,395 $ 2,163 $ 2,198 |
Changes in Estimated Product Warranty Liability | The changes in the carrying amount of accrued warranty costs included in other current liabilities in the accompanying consolidated balance sheet are as follows: (In thousands) 2016 2015 Balance at Beginning of Year $ 3,670 $ 3,875 Provision charged to income 3,091 2,660 Usage (3,632 ) (2,559 ) Acquisition 991 — Currency translation (277 ) (306 ) Balance at End of Year $ 3,843 $ 3,670 |
Supplemental Cash Flow Information | Supplemental Cash Flow Information (In thousands) 2016 2015 2014 Cash Paid for Interest $ 1,183 $ 616 $ 1,081 Cash Paid for Income Taxes, Net of Refunds $ 15,632 $ 11,497 $ 10,035 Non-Cash Investing Activities: Fair value of assets of acquired businesses $ 84,969 $ — $ 14,771 Cash paid for acquired businesses (58,894 ) — (12,658 ) Liabilities assumed of acquired businesses $ 26,075 $ — $ 2,113 Non-Cash Financing Activities: Issuance of company common stock $ 3,463 $ 3,423 $ 3,220 Dividends declared but unpaid $ 2,078 $ 1,831 $ 1,630 |
Components of Inventory | The components of inventories are as follows: (In thousands) 2016 2015 Raw Materials and Supplies $ 21,086 $ 22,324 Work in Process 12,293 13,819 Finished Goods (includes $1,249 and $1,262 at customer locations) 21,572 20,615 $ 54,951 $ 56,758 |
Property, Plant and Equipment | Property, plant, and equipment consist of the following: (In thousands) 2016 2015 Land $ 4,827 $ 3,792 Buildings 39,706 36,547 Machinery, Equipment, and Leasehold Improvements 79,891 77,675 124,424 118,014 Less: Accumulated Depreciation and Amortization 76,720 75,721 $ 47,704 $ 42,293 |
Acquired Intangible Assets | Acquired intangible assets are as follows: (In thousands) 2016 2015 Indefinite-Lived Intangible Asset $ 8,100 $ 8,100 Definite-Lived Intangible Assets, Gross $ 77,052 $ 77,052 Acquisition (Note 2) 24,691 — Accumulated amortization (49,040 ) (40,908 ) Currency translation (8,073 ) (6,212 ) Definite-Lived Intangible Assets, Net $ 44,630 $ 29,932 Total Intangible Assets, Net $ 52,730 $ 38,032 Acquired intangible assets by major asset class are as follows: (In thousands) Gross Currency Accumulated Net December 31, 2016 Customer relationships $ 59,101 $ (5,202 ) $ (21,805 ) $ 32,094 Intellectual property 27,101 (2,052 ) (17,105 ) 7,944 Tradenames 12,547 (591 ) (1,065 ) 10,891 Non-compete agreements 3,662 (85 ) (3,373 ) 204 Distribution network 2,400 — (1,642 ) 758 Licensing agreements 400 — (233 ) 167 Other 4,632 (143 ) (3,817 ) 672 $ 109,843 $ (8,073 ) $ (49,040 ) $ 52,730 January 2, 2016 Customer relationships $ 43,271 $ (3,916 ) $ (17,314 ) $ 22,041 Intellectual property 22,899 (1,772 ) (15,584 ) 5,543 Tradenames 10,269 (405 ) (698 ) 9,166 Non-compete agreements 3,548 (55 ) (3,298 ) 195 Distribution network 2,400 — (1,501 ) 899 Licensing agreements 400 — (213 ) 187 Other 2,365 (64 ) (2,300 ) 1 $ 85,152 $ (6,212 ) $ (40,908 ) $ 38,032 |
Changes in the Carrying Amount of Goodwill | The changes in the carrying amount of goodwill by segment are as follows: (In thousands) Papermaking Systems Segment Wood Processing Systems Segment Total Balance as of January 3, 2015 Gross balance $ 193,279 $ 20,112 $ 213,391 Accumulated impairment losses (85,509 ) — (85,509 ) Net balance 107,770 20,112 127,882 Currency Translation (5,559 ) (3,272 ) (8,831 ) Total 2015 Adjustments (5,559 ) (3,272 ) (8,831 ) Balance at January 2, 2016 Gross balance 187,720 16,840 204,560 Accumulated impairment losses (85,509 ) — (85,509 ) Net balance 102,211 16,840 119,051 Increase Due to Acquisition (Note 2) 38,552 — 38,552 Currency Translation (6,573 ) 425 (6,148 ) Total 2016 Adjustments 31,979 425 32,404 Balance at December 31, 2016 Gross balance 219,699 17,265 236,964 Accumulated impairment losses (85,509 ) — (85,509 ) Net balance $ 134,190 $ 17,265 $ 151,455 |
Goodwill by Reporting Unit | Goodwill by reporting unit is as follows: (In thousands) 2016 2015 Stock-Preparation $ 54,751 $ 19,527 Doctoring, Cleaning, & Filtration 33,839 35,990 Fluid-Handling 45,600 46,694 Wood Processing Systems 17,265 16,840 $ 151,455 $ 119,051 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Purchase Price Allocation | The following table summarizes the purchase method of accounting for the acquisition made in 2016 and the estimated fair values of assets acquired and liabilities assumed: 2016 Acquisition (In thousands) Total Net Assets Acquired: Cash and Cash Equivalents $ 2,277 Accounts Receivable 5,441 Inventories 3,947 Property, Plant, and Equipment 7,179 Other Assets 2,882 Intangible Assets 24,691 Goodwill 38,552 Total assets acquired 84,969 Accounts Payable 5,536 Customer Deposits 2,471 Obligations Under Capital Lease 4,842 Long-Term Deferred Income Taxes 6,148 Other Liabilities 6,913 Total liabilities assumed 25,910 Net assets acquired $ 59,059 Purchase Price: Cash $ 29,028 Cash Paid to Seller Borrowed Under the Revolving Credit Facility 29,866 Cash Due to Seller 165 Total purchase price $ 59,059 The following table summarizes the purchase method of accounting for the acquisitions made in 2014 and the estimated fair values of assets acquired and liabilities assumed: 2014 Acquisitions (In thousands) Total Net Assets Acquired: Cash and Cash Equivalents $ 674 Inventories 1,064 Other Current Assets 324 Property, Plant, and Equipment 847 Intangibles Customer relationships 4,700 Intellectual property 2,600 Other 360 Goodwill 3,463 Total assets acquired 14,032 Total Liabilities Assumed 1,001 Net assets acquired $ 13,031 Purchase Price: Cash $ 11,840 Contingent Consideration 1,191 Total purchase price $ 13,031 |
Unaudited Supplemental Pro Forma Information | Had the acquisition of PAAL been completed as of the beginning of 2015, the Company’s pro forma results of operations for 2016 and 2015 would have been as follows: (In thousands, except per share amounts) 2016 2015 Revenues $ 427,273 $ 444,350 Net Income Attributable to Kadant $ 35,321 $ 33,881 Earnings per Share Attributable to Kadant: Basic $ 3.25 $ 3.12 Diluted $ 3.17 $ 3.05 Pro forma results include non-recurring pro forma adjustments that were directly attributable to the business combination to reflect amounts as if the acquisition of PAAL had been completed as of the beginning of 2015, as follows: • Pre-tax charge to SG&A expenses of $ 1,832,000 in 2015 and reversal in 2016, for acquisition-related transaction costs. • Pre-tax charge to cost of revenues of $ 458,000 in 2015 and reversal in 2016, for the sale of PAAL inventory revalued at the date of acquisition. • Pre-tax charge to SG&A expenses of $ 1,468,000 in 2015 and reversal in 2016, for intangible amortization related to acquired backlog. • Reversal of $ 1,636,000 of interest expense in 2015 and $454,000 in 2016 related to pre-acquisition debt, which was settled in the business combination. These pro forma results of operations have been prepared for comparative purposes only, and they do not purport to be indicative of the results of operations that actually would have resulted had the acquisition of PAAL occurred as of the beginning of 2015, or that may result in the future. |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Components of Pre-Tax Stock-Based Compensation Expense | The components of pre-tax stock-based compensation expense are as follows: (In thousands) 2016 2015 2014 Restricted Stock Unit Awards $ 4,848 $ 5,185 $ 4,904 Stock Option Awards 51 420 782 Employee Stock Purchase Plan Awards 170 136 127 Total $ 5,069 $ 5,741 $ 5,813 |
Summary of Activity of the Unvested Restricted Stock Units | A summary of the activity of the Company's unvested RSUs for 2016 is as follows: Unvested Restricted Stock Units Units Weighted Unvested RSUs at January 2, 2016 216 $ 37.01 Granted 132 $ 40.41 Vested (143 ) $ 35.46 Forfeited / Expired (2 ) $ 40.87 Unvested RSUs at December 31, 2016 203 $ 40.23 |
Stock Option Activity | A summary of the Company's stock option activity for 2016 is as follows: (In thousands, except per share amounts) Number Weighted Weighted Aggregate Options Outstanding at January 2, 2016 358 $ 21.12 Exercised (51 ) $ 23.57 Options Outstanding at December 31, 2016 307 $ 20.72 4.5 years $ 12,443 Vested and Exercisable at December 31, 2016 307 $ 20.72 4.5 years $ 12,443 (a) The closing price per share on the last trading day prior to December 31, 2016 was $61.20 . |
Summary of Stock Option Exercises | A summary of the Company's stock option exercises in 2016 , 2015 , and 2014 is as follows. (In thousands) 2016 2015 2014 Total Intrinsic Value of Options Exercised $ 1,341 $ 442 $ 438 Cash Received From Options Exercised $ 1,189 $ 284 $ 336 |
Changes In Projected Benefit Obligations, Plan Assets, Unfunded Status, and Accumulated Other Comprehensive Items | The following table summarizes the change in benefit obligation; the change in plan assets; the unfunded status; and the amounts recognized in the accompanying consolidated balance sheet for the Company's U.S. and non-U.S. pension benefit plans and other post-retirement benefit plans. In accordance with the adoption of ASU No. 2015-04 in 2015, the Company has elected to measure its plan assets and benefit obligations as of December 31, which coincides with its fiscal year-end in 2016 and is the closest month-end to its fiscal year-end in 2015. U.S. Pension Benefits Non-U.S. Pension Benefits Other Post-Retirement Benefits (In thousands) 2016 2015 2016 2015 2016 2015 Change in Benefit Obligation: Benefit obligation at beginning of year $ 31,310 $ 32,213 $ 3,041 $ 3,531 $ 3,539 $ 3,823 Acquisition — — 380 — — — Service cost 723 842 102 105 130 117 Interest cost 1,273 1,229 107 102 156 147 Actuarial loss (gain) 575 (1,448 ) 58 (102 ) 686 (299 ) Benefits paid (1,946 ) (1,526 ) (63 ) (189 ) (180 ) (219 ) Settlement payment — — — — (415 ) — Currency translation — — (284 ) (406 ) (22 ) (30 ) Benefit obligation at end of year $ 31,935 $ 31,310 $ 3,341 $ 3,041 $ 3,894 $ 3,539 Change in Plan Assets: Fair value of plan assets at beginning of year $ 27,776 $ 28,986 $ 396 $ 632 $ 26 $ 34 Actual return on plan assets 2,075 (764 ) 6 (142 ) 1 (3 ) Employer contributions 1,080 1,080 159 189 601 219 Benefits paid (1,946 ) (1,526 ) (63 ) (189 ) (180 ) (219 ) Settlement payment — — — — (415 ) — Currency translation — — (72 ) (94 ) (5 ) (5 ) Fair value of plan assets at end of year $ 28,985 $ 27,776 $ 426 $ 396 $ 28 $ 26 Unfunded Status $ (2,950 ) $ (3,534 ) $ (2,915 ) $ (2,645 ) $ (3,866 ) $ (3,513 ) Accumulated Benefit Obligation at End of Year $ 27,573 $ 26,844 $ 2,549 $ 2,169 $ — $ — Amounts Recognized in the Balance Sheet: Current liability $ — $ — $ (194 ) $ (133 ) $ (183 ) $ (187 ) Non-current liability $ (2,950 ) $ (3,534 ) $ (2,721 ) $ (2,512 ) $ (3,683 ) $ (2,911 ) Amounts Recognized in Accumulated Other Comprehensive Items Before Tax: Unrecognized net actuarial loss $ (7,383 ) $ (8,094 ) $ (784 ) $ (832 ) $ (872 ) $ (325 ) Unrecognized prior service cost (53 ) (108 ) (42 ) (47 ) (525 ) (610 ) Total $ (7,436 ) $ (8,202 ) $ (826 ) $ (879 ) $ (1,397 ) $ (935 ) Changes in Amounts Recognized in Accumulated Other Comprehensive Items Before Tax: Current year unrecognized net actuarial gain (loss) $ 213 $ (737 ) $ (75 ) $ (75 ) $ (685 ) $ 237 Amortization of unrecognized prior service cost 55 55 4 4 88 88 Amortization of unrecognized net actuarial loss 498 508 39 38 50 30 Settlement loss — — — — 114 — Currency translation — — 85 109 (29 ) 35 Total $ 766 $ (174 ) $ 53 $ 76 $ (462 ) $ 390 |
Weighted-Average Assumptions Used to Determine the Benefit Obligation and Net Periodic Benefit Cost | The weighted-average assumptions used to determine the benefit obligation as of year-end are as follows: U.S. Pension Benefits Non-U.S. Pension Benefits Other Post-Retirement Benefits 2016 2015 2016 2015 2016 2015 Discount rate 4.03 % 4.22 % 3.26 % 3.55 % 4.20 % 4.32 % Rate of compensation increase 3.00 % 3.00 % 3.33 % 3.47 % 3.12 % 3.18 % The weighted-average assumptions used to determine net periodic benefit cost are as follows: U.S. Pension Benefits Non-U.S. Pension Benefits Other Post-Retirement Benefits 2016 2015 2014 2016 2015 2014 2016 2015 2014 Discount Rate 4.22 % 3.87 % 4.79 % 3.87 % 3.33 % 3.68 % 5.38 % 4.01 % 4.91 % Expected Long-Term Return on Plan Assets 5.00 % 5.25 % 5.75 % 7.72 % 6.90 % 6.75 % 7.72 % 6.90 % 6.75 % Rate of Compensation Increase 3.00 % 3.00 % 3.50 % 3.67 % 3.42 % 2.70 % 3.94 % 3.15 % 3.52 % |
Benefit Obligations in Excess of Fair Value of Plan Assets | The projected benefit obligations and fair values of plan assets for the Company's pension plans with projected benefit obligations in excess of plan assets are as follows: U.S. Pension Benefits Non-U.S. Pension Benefits (In thousands) 2016 2015 2016 2015 Pension Plans with Projected Benefit Obligations in Excess of Plan Assets: Projected benefit obligation $ 31,935 $ 31,310 $ 3,341 $ 3,041 Fair value of plan assets $ 28,985 $ 27,776 $ 426 $ 396 |
Accumulated Benefit Obligations in Excess of Plan Assets | The accumulated benefit obligations and fair values of plan assets for the Company's pension plans with accumulated benefit obligations in excess of plan assets are as follows: U.S. Pension Benefits Non-U.S. Pension Benefits (In thousands) 2016 2015 2016 2015 Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets: Accumulated benefit obligation $ — $ — $ 2,549 $ 2,169 Fair value of plan assets $ — $ — $ 426 $ 396 |
Components of Net Periodic Benefit Cost (Income) | The components of net periodic benefit cost are as follows: U.S. Pension Benefits Non-U.S. Pension Benefits Other Post-Retirement Benefits (In thousands) 2016 2015 2014 2016 2015 2014 2016 2015 2014 Components of Net Periodic Benefit Cost: Service cost $ 723 $ 842 $ 850 $ 102 $ 105 $ 193 $ 130 $ 117 $ 103 Interest cost 1,273 1,229 1,286 107 102 138 156 147 163 Expected return on plan assets (1,288 ) (1,421 ) (1,480 ) (25 ) (40 ) (44 ) (2 ) (2 ) (2 ) Recognized net actuarial loss 498 508 315 39 38 18 50 30 22 Amortization of prior service cost 55 55 55 4 4 6 88 88 88 Settlement loss — — — — — — 114 — — Net Periodic Benefit Cost $ 1,261 $ 1,213 $ 1,026 $ 227 $ 209 $ 311 $ 536 $ 380 $ 374 |
Weighted-Average Health Care Cost Trend Rates | Assumed weighted-average healthcare cost trend rates as of year-end were as follows: Other Post-Retirement Benefits 2016 2015 Healthcare Cost Trend Rate Assumed for Next Year 8.00% 8.00% Ultimate Healthcare Cost Trend Rate 8.00% 8.00% Year Assumed Rate Reaches Ultimate Rate 2016 2015 |
Fair Values of Plan Assets | The fair values of the Company's noncontributory defined benefit retirement plan assets at year-end 2016 and 2015 by asset category are as follows: 2016 Fair Value Measurement (In thousands) Quoted Prices in Significant Significant Total U.S. Pension Plan Assets: Mutual Funds $ 20,318 $ — $ — $ 20,318 $ 20,318 $ — $ — $ 20,318 Investments measured at NAV 8,667 Total assets at fair value $ 28,985 Non-U.S. Pension Plan Assets: Mutual Funds $ 426 $ — $ — $ 426 Total assets at fair value $ 426 $ — $ — $ 426 2015 Fair Value Measurement (In thousands) Quoted Prices in Significant Significant Total U.S. Pension Plan Assets: Mutual Funds $ 19,485 $ — $ — $ 19,485 $ 19,485 $ — $ — $ 19,485 Investments measured at NAV 8,291 Total assets at fair value $ 27,776 Non-U.S. Pension Plan Assets: Mutual Funds $ 396 $ — $ — $ 396 Total assets at fair value $ 396 $ — $ — $ 396 |
Target Asset Allocation of Plan Assets | The following target asset allocation has been established for the plan: Asset Category Minimum Neutral Maximum Equity Securities 5 % 15 % 20 % Debt Securities 80 % 85 % 95 % Total 100 % |
Estimated Future Benefit Payments | Estimated future benefit payments during the next five years and in aggregate for the five years thereafter are as follows: Other Post-retirement (In thousands) U.S. Pension Non-U.S. Pension 2017 $ 1,485 $ 227 $ 187 2018 1,479 30 177 2019 1,485 105 169 2020 4,131 87 308 2021 1,894 237 162 2022-2026 11,488 2,029 2,753 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Components of Income from Continuing Operations Before Income Taxes | The components of income from continuing operations before provision for income taxes are as follows: (In thousands) 2016 2015 2014 Domestic $ 6,196 $ 13,076 $ 10,951 Foreign 38,353 36,295 30,567 $ 44,549 $ 49,371 $ 41,518 |
Components of the Provision for Income Taxes from Continuing Operations | The components of the provision for income taxes from continuing operations are as follows: (In thousands) 2016 2015 2014 Current Provision: Federal $ 535 $ 4,693 $ 1,080 Foreign 11,323 10,623 7,703 State 838 1,152 713 12,696 16,468 9,496 Deferred (Benefit) Provision: Federal 1,738 45 2,179 Foreign (1,818 ) (1,378 ) 418 State (533 ) (373 ) 354 (613 ) (1,706 ) 2,951 $ 12,083 $ 14,762 $ 12,447 |
Provision for Income Taxes by Continuing and Discontinued Operation | The provision for income taxes included in the accompanying consolidated statement of income is as follows: (In thousands) 2016 2015 2014 Continuing Operations $ 12,083 $ 14,762 $ 12,447 Discontinued Operation 2 43 (14 ) $ 12,085 $ 14,805 $ 12,433 |
Income Tax Reconciliation | The provision for income taxes from continuing operations in the accompanying statement of income differs from the provision calculated by applying the statutory federal income tax rate of 35% to income from continuing operations before provision for income taxes due to the following: (In thousands) 2016 2015 2014 Provision for Income Taxes at Statutory Rate $ 15,592 $ 17,279 $ 14,531 Increases (Decreases) Resulting From: State income taxes, net of federal tax 189 506 694 U.S. tax cost of foreign earnings 192 455 206 Foreign tax rate differential (3,921 ) (3,852 ) (3,026 ) (Reversal of) provision for tax benefit reserves, net (76 ) 33 (1,017 ) Change in valuation allowance (131 ) 99 125 Nondeductible expenses 1,090 704 1,398 Research and development tax credits (229 ) (210 ) (274 ) Excess tax benefit related to share-based compensation (553 ) — — Other (70 ) (252 ) (190 ) $ 12,083 $ 14,762 $ 12,447 |
Net Deferred Tax (Liability) Asset | Net deferred tax liability in the accompanying consolidated balance sheet consists of the following: (In thousands) 2016 2015 Deferred Tax Asset: Foreign, state, and alternative minimum tax credit carryforwards $ 161 $ 23 Reserves and accruals 4,842 5,003 Net operating loss carryforwards 13,694 12,306 Inventory basis difference 3,005 3,253 Research and development 75 246 Employee compensation 4,966 5,427 Allowance for doubtful accounts 488 405 Revenue recognition 636 525 Other 249 151 Deferred tax asset, gross 28,116 27,339 Less: valuation allowance (10,863 ) (11,493 ) Deferred tax asset, net 17,253 15,846 Deferred Tax Liability: Goodwill and intangible assets (21,853 ) (17,450 ) Fixed asset basis difference (4,325 ) (3,234 ) Reserves and accruals — (32 ) Other (1,199 ) (284 ) Deferred tax liability (27,377 ) (21,000 ) Net deferred tax liability $ (10,124 ) $ (5,154 ) |
Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits at year-end 2016 and 2015 is as follows: (In thousands) 2016 2015 Unrecognized Tax Benefits, Beginning of Year $ 5,052 $ 5,006 Gross Increases—Tax Positions in Prior Periods 403 — Gross Decreases—Tax Positions in Prior Periods (23 ) (28 ) Gross Increases—Current-period Tax Positions 480 476 Lapses of Statutes of Limitations (359 ) (253 ) Currency Translation (86 ) (149 ) Unrecognized Tax Benefits, End of Year $ 5,467 $ 5,052 |
Short- and Long-Term Obligati30
Short- and Long-Term Obligations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Short- and Long-Term Obligations | Short- and long-term obligations at year-end 2016 and 2015 are as follows: (In thousands) 2016 2015 Revolving Credit Facility, due 2018 $ 61,494 $ 26,000 Commercial Real Estate Loan, due 2016 — 5,250 Obligations Under Capital Lease, due 2017 to 2022 4,309 — Other Borrowings, due 2017 to 2023 608 — Total Short- and Long-Term Obligations 66,411 31,250 Less: Short-Term Obligations (643 ) (5,250 ) Long-Term Obligations $ 65,768 $ 26,000 |
Future minimum lease payments under capital lease obligations | The following schedule presents future minimum lease payments under the capital lease obligations and the present value of the minimum lease payments as of year-end 2016 . (In thousands) Capital Lease Obligations 2017 $ 560 2018 553 2019 547 2020 554 2021 521 2022 and Thereafter 624 Total Minimum Lease Payments $ 3,359 Less: Imputed Interest (440 ) Present Value of Minimum Lease Payments $ 2,919 |
Other Income and Restructurin31
Other Income and Restructuring Costs (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Summary of Changes in Accrued Restructuring Costs | A summary of the changes in accrued restructuring costs are as follows: (In thousands) Severance Other Total 2015 Restructuring Plans Provision $ 344 $ — $ 344 Usage (323 ) — (323 ) Currency translation (21 ) — (21 ) Balance at January 2, 2016 $ — $ — $ — 2014 Restructuring Plans Provision $ 370 $ — $ 370 Usage (267 ) — (267 ) Currency translation (56 ) — (56 ) Balance at January 3, 2015 $ 47 $ — $ 47 Provision 171 — 171 Usage (214 ) — (214 ) Currency translation (4 ) — (4 ) Balance at January 2, 2016 $ — $ — $ — (In thousands) Severance Other Total Restructuring Plans Prior to 2014 Balance at December 28, 2013 $ 519 $ — $ 519 Provision (11 ) 446 435 Usage (370 ) (445 ) (815 ) Currency translation (82 ) (1 ) (83 ) Balance at January 3, 2015 $ 56 $ — $ 56 Provision — — — Usage (15 ) — (15 ) Currency translation (3 ) — (3 ) Balance at January 2, 2016 $ 38 $ — $ 38 Usage (35 ) — (35 ) Currency translation (3 ) — (3 ) Balance at December 31, 2016 $ — $ — $ — |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Derivative Instruments | The following table summarizes the fair value of the Company's derivative instruments designated and not designated as hedging instruments, the notional value of the associated derivative contracts, and the location of these instruments in the accompanying consolidated balance sheet: 2016 2015 (In thousands) Balance Sheet Asset Notional Asset Notional Derivatives Designated as Hedging Instruments: Derivatives in an Asset Position: Interest rate swap agreement Other Long-Term $ 62 $ 10,000 $ 38 $ 10,000 Derivatives in a Liability Position: Forward currency-exchange contracts Other Current $ (41 ) $ 2,380 $ (101 ) $ 6,525 Interest rate swap agreement Other Current $ — $ — $ (91 ) $ 5,250 Derivatives Not Designated as Hedging Instruments: Derivatives in an Asset Position: Forward currency-exchange contracts Other Current $ 2 $ 227 $ 2,536 $ 15,612 Derivatives in a Liability Position: Forward currency-exchange contracts Other Current $ (237 ) $ 17,185 $ — $ — (a) See Note 10 for the fair value measurements relating to these financial instruments. (b) The total notional amount is indicative of the level of the Company's derivative activity during 2016 and 2015 . |
Activity in Accumulated Other Comprehensive Items (OCI) | The following table summarizes the activity in AOCI associated with the Company's derivative instruments designated as cash flow hedges as of and for the period ended December 31, 2016 : (In thousands) Interest Rate Swap Forward Currency- Total Unrealized Loss, Net of Tax, at January 2, 2016 $ (162 ) $ (67 ) $ (229 ) Loss Reclassified to Earnings (a) 241 170 411 Loss Recognized in AOCI (39 ) (131 ) (170 ) Unrealized Gain (Loss), Net of Tax, at December 31, 2016 $ 40 $ (28 ) $ 12 (a) See Note 13 for the income statement classification. |
Fair Value Measurements and F33
Fair Value Measurements and Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities Measured on a Recurring Basis | The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis: Fair Value as of December 31, 2016 (In thousands) Level 1 Level 2 Level 3 Total Assets: Money market funds and time deposits $ 10,855 $ — $ — $ 10,855 Forward currency-exchange contracts $ — $ 2 $ — $ 2 Interest rate swap agreement $ — $ 62 $ — $ 62 Banker's acceptance drafts (a) $ — $ 7,852 $ — $ 7,852 Liabilities: Forward currency-exchange contracts $ — $ 278 $ — $ 278 Fair Value as of January 2, 2016 (In thousands) Level 1 Level 2 Level 3 Total Assets: Money market funds and time deposits $ 9,767 $ — $ — $ 9,767 Forward currency-exchange contracts $ — $ 2,536 $ — $ 2,536 Interest rate swap agreement $ — $ 38 $ — $ 38 Banker's acceptance drafts (a) $ — $ 8,314 $ — $ 8,314 Liabilities: Forward currency-exchange contracts $ — $ 101 $ — $ 101 Interest rate swap agreement $ — $ 91 $ — $ 91 Contingent consideration (b) $ — $ — $ 1,091 $ 1,091 (a) Included in accounts receivable in the accompanying consolidated balance sheet. (b) Included in other current liabilities in the accompanying consolidated balance sheet. |
Fair Value, Liabilities Measured on a Recurring Basis, Unobservable Input Reconciliation | The following table provides a rollforward of the fair value, as determined by Level 3 inputs, of the contingent consideration: (In thousands) 2016 2015 Balance at Beginning of Year $ 1,091 $ 1,133 Payment (1,091 ) — Current period expense — 71 Currency translation — (113 ) Balance at End of Year $ — $ 1,091 |
Carrying Value and Fair Value of Debt Obligations | The carrying value and fair value of the Company's long-term debt obligations are as follows: 2016 2015 (In thousands) Carrying Fair Carrying Fair Long-term Debt Obligations: Revolving credit facility $ 61,494 $ 61,494 $ 26,000 $ 26,000 Capital lease obligations 3,857 3,857 — — Other borrowings 417 417 — — $ 65,768 $ 65,768 $ 26,000 $ 26,000 |
Business Segment and Geograph34
Business Segment and Geographical Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Business Segment Information | (In thousands) 2016 2015 2014 Business Segment Information Revenues by Product Line: Papermaking Systems: Stock-Preparation $ 171,378 $ 148,341 $ 127,496 Doctoring, Cleaning, & Filtration 105,938 101,523 117,389 Fluid-Handling 89,145 92,797 103,314 Papermaking Systems $ 366,461 $ 342,661 $ 348,199 Wood Processing Systems 36,850 36,387 41,647 Fiber-based Products 10,815 11,059 12,281 $ 414,126 $ 390,107 $ 402,127 Income from Continuing Operations Before Provision for Income Taxes: Papermaking Systems (a) $ 57,427 $ 56,789 $ 50,485 Wood Processing Systems 8,327 10,926 6,977 Corporate and Fiber-based Products (b) (20,181 ) (17,596 ) (15,376 ) Total operating income 45,573 50,119 42,086 Interest expense, net (1,024 ) (748 ) (568 ) $ 44,549 $ 49,371 $ 41,518 Total Assets: Papermaking Systems $ 407,538 $ 354,417 $ 343,937 Wood Processing Systems 52,407 53,347 55,634 Other (c) 10,746 7,734 14,176 Total Assets $ 470,691 $ 415,498 $ 413,747 Depreciation and Amortization: Papermaking Systems $ 11,513 $ 7,898 $ 7,724 Wood Processing Systems 2,188 2,384 2,977 Other 625 539 488 $ 14,326 $ 10,821 $ 11,189 Capital Expenditures: Papermaking Systems $ 5,504 $ 4,639 $ 5,640 Other 300 840 1,115 $ 5,804 $ 5,479 $ 6,755 (In thousands) 2016 2015 2014 Geographical Information Revenues (d): United States $ 165,335 $ 193,383 $ 174,003 China 43,299 50,814 43,867 Other 205,492 145,910 184,257 $ 414,126 $ 390,107 $ 402,127 Long-lived Assets (e): United States $ 18,482 $ 17,373 $ 15,685 China 10,714 12,278 13,996 Germany 5,792 63 85 Other 12,716 12,579 15,199 $ 47,704 $ 42,293 $ 44,965 (a) Includes other income of $0.3 million in 2016 , and restructuring costs of $0.5 million and $0.8 million in 2015 and 2014 , respectively (see Note 8). (b) Corporate primarily includes general and administrative expenses. (c) Primarily includes Corporate and Fiber-based Products' cash and cash equivalents and property, plant, and equipment. (d) Revenues are attributed to countries based on customer location. (e) Represents property, plant, and equipment, net. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Share | Basic and diluted EPS were calculated as follows: (In thousands, except per share amounts) 2016 2015 2014 Amounts Attributable to Kadant: Income from Continuing Operations $ 32,074 $ 34,315 $ 28,682 Income (Loss) from Discontinued Operation 3 74 (23 ) Net Income Attributable to Kadant $ 32,077 $ 34,389 $ 28,659 Basic Weighted Average Shares 10,869 10,867 10,988 Effect of Stock Options, Restricted Stock Units and Employee Stock Purchase Plan 280 227 222 Diluted Weighted Average Shares 11,149 11,094 11,210 Basic EPS: Continuing Operations $ 2.95 $ 3.16 $ 2.61 Discontinued Operation $ — $ 0.01 $ — Net Income per Basic Share $ 2.95 $ 3.16 $ 2.61 Diluted EPS: Continuing Operations $ 2.88 $ 3.09 $ 2.56 Discontinued Operation $ — $ 0.01 $ — Net Income per Diluted Share $ 2.88 $ 3.10 $ 2.56 |
Accumulated Other Comprehensi36
Accumulated Other Comprehensive Items (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Components of Accumulated Other Comprehensive Items in the Balance Sheet | Changes in each component of AOCI, net of tax are as follows: (In thousands) Foreign Currency Translation Adjustment Unrecognized Prior Service Cost Deferred Loss on Pension and Other Post-Retirement Benefit Plans Deferred (Loss) Gain on Hedging Instruments Accumulated Other Comprehensive Items Balance at January 2, 2016 $ (27,932 ) $ (489 ) $ (8,322 ) $ (229 ) $ (36,972 ) Other comprehensive loss before reclassifications (13,162 ) (3 ) (294 ) (170 ) (13,629 ) Reclassifications from AOCI — 95 458 411 964 Net current period other comprehensive (loss) income (13,162 ) 92 164 241 (12,665 ) Balance at December 31, 2016 $ (41,094 ) $ (397 ) $ (8,158 ) $ 12 $ (49,637 ) |
Reclassification Out of Accumulated Other Comprehensive Items | Amounts reclassified out of AOCI are as follows: (In thousands) 2016 2015 2014 Income Statement Pension and Other Post-Retirement Plans (1) Amortization of prior service costs $ (147 ) $ (147 ) $ (148 ) SG&A expenses Amortization of actuarial losses (701 ) (576 ) (352 ) SG&A expenses Total expense before income taxes (848 ) (723 ) (500 ) Income tax benefit 295 249 175 Provision for income taxes (553 ) (474 ) (325 ) Cash Flow Hedges (2) Interest rate swap agreements (174 ) (420 ) (332 ) Interest expense Forward currency-exchange contracts (14 ) (12 ) 31 Revenues Forward currency-exchange contracts (186 ) — — Cost of revenues Forward currency-exchange contracts — 1,691 1,247 SG&A expenses Total (expense) income before income taxes (374 ) 1,259 946 Income tax provision (37 ) (150 ) (57 ) Provision for income taxes (411 ) 1,109 889 Total Reclassifications $ (964 ) $ 635 $ 564 (1) Included in the computation of net periodic benefit costs. See Note 3 for additional information. (2) See Note 9 for additional information. |
Unaudited Quarterly Informati37
Unaudited Quarterly Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Financial Information | 2016 (In thousands, except per share amounts) First Second Third Fourth Revenues $ 96,538 $ 111,828 $ 105,519 $ 100,241 Gross Profit 43,976 50,261 48,079 46,073 Amounts Attributable to Kadant: Income from Continuing Operations 6,876 8,311 9,154 7,733 Income from Discontinued Operation — — 3 — Net Income Attributable to Kadant $ 6,876 $ 8,311 $ 9,157 $ 7,733 Basic Earnings per Share: Continuing Operations $ 0.64 $ 0.76 $ 0.84 $ 0.71 Net Income Attributable to Kadant $ 0.64 $ 0.76 $ 0.84 $ 0.71 Diluted Earnings per Share: Continuing Operations $ 0.62 $ 0.75 $ 0.82 $ 0.69 Net Income Attributable to Kadant $ 0.62 $ 0.75 $ 0.82 $ 0.69 Cash Dividends Declared per Common Share $ 0.19 $ 0.19 $ 0.19 $ 0.19 2015 (In thousands, except per share amounts) First Second Third Fourth Revenues $ 92,251 $ 98,327 $ 91,929 $ 107,600 Gross Profit 44,337 45,727 43,668 46,393 Amounts Attributable to Kadant: Income from Continuing Operations 6,832 8,469 8,647 10,367 Income (Loss) from Discontinued Operation 65 (5 ) (4 ) 18 Net Income Attributable to Kadant $ 6,897 $ 8,464 $ 8,643 $ 10,385 Basic Earnings per Share: Continuing Operations $ 0.63 $ 0.77 $ 0.80 $ 0.96 Net Income Attributable to Kadant $ 0.63 $ 0.77 $ 0.80 $ 0.96 Diluted Earnings per Share: Continuing Operations $ 0.62 $ 0.76 $ 0.78 $ 0.94 Net Income Attributable to Kadant $ 0.62 $ 0.76 $ 0.78 $ 0.94 Cash Dividends Declared per Common Share $ 0.17 $ 0.17 $ 0.17 $ 0.17 |
Nature of Operations and Summ38
Nature of Operations and Summary of Significant Accounting Policies - Changes in the Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance at Beginning of Year | $ 2,163 | $ 2,198 | $ 2,689 |
Provision charged to expense | 453 | 379 | 246 |
Accounts recovered | 0 | 0 | 15 |
Accounts written off | (128) | (205) | (590) |
Currency translation | (93) | (209) | (162) |
Balance at End of Year | $ 2,395 | $ 2,163 | $ 2,198 |
Nature of Operations and Summ39
Nature of Operations and Summary of Significant Accounting Policies - Product Warranty (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Jan. 02, 2016 | |
Changes in the carrying amount of accrued warranty costs [Roll Forward] | ||
Balance at Beginning of Year | $ 3,670 | $ 3,875 |
Provision charged to income | 3,091 | 2,660 |
Usage | (3,632) | (2,559) |
Acquisition | 991 | 0 |
Currency translation | (277) | (306) |
Balance at End of Year | $ 3,843 | $ 3,670 |
Nature of Operations and Summ40
Nature of Operations and Summary of Significant Accounting Policies - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Accounting Policies [Abstract] | |||
Cash Paid for Interest | $ 1,183 | $ 616 | $ 1,081 |
Cash Paid for Income Taxes, Net of Refunds | 15,632 | 11,497 | 10,035 |
Non-Cash Investing Activities: | |||
Fair value of assets of acquired businesses | 84,969 | 0 | 14,771 |
Cash paid for acquired businesses | (58,894) | 0 | (12,658) |
Liabilities assumed of acquired businesses | 26,075 | 0 | 2,113 |
Non-Cash Financing Activities: | |||
Issuance of company common stock | 3,463 | 3,423 | 3,220 |
Dividends declared but unpaid | $ 2,078 | $ 1,831 | $ 1,630 |
Nature of Operations and Summ41
Nature of Operations and Summary of Significant Accounting Policies - Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Jan. 02, 2016 |
Accounting Policies [Abstract] | ||
Raw Materials and Supplies | $ 21,086 | $ 22,324 |
Work in Process | 12,293 | 13,819 |
Finished Goods (includes $1,249 and $1,262 at customer locations) | 21,572 | 20,615 |
Inventories | 54,951 | 56,758 |
Finished goods, at customer locations | $ 1,249 | $ 1,262 |
Nature of Operations and Summ42
Nature of Operations and Summary of Significant Accounting Policies - Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Jan. 02, 2016 | |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 124,424 | $ 118,014 |
Less: Accumulated Depreciation and Amortization | 76,720 | 75,721 |
Property, Plant and Equipment, at Cost, Net | 47,704 | 42,293 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 4,827 | 3,792 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 39,706 | 36,547 |
Machinery, Equipment, and Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 79,891 | $ 77,675 |
Assets Under Capital Lease | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 5,335 | |
Less: Accumulated Depreciation and Amortization | $ 221 | |
Minimum | Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 10 years | |
Minimum | Machinery and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 2 years | |
Maximum | Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 40 years | |
Maximum | Machinery and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 10 years |
Nature of Operations and Summ43
Nature of Operations and Summary of Significant Accounting Policies - Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Jan. 02, 2016 | |
Accounting Policies [Abstract] | ||
Indefinite-Lived Intangible Asset | $ 8,100 | $ 8,100 |
Definite-Lived Intangible Assets, Gross | 77,052 | 77,052 |
Acquisition (Note 2) | 24,691 | 0 |
Accumulated amortization | (49,040) | (40,908) |
Currency translation | (8,073) | (6,212) |
Definite-Lived Intangible Assets, Net | 44,630 | 29,932 |
Total Intangible Assets, Net | $ 52,730 | $ 38,032 |
Nature of Operations and Summ44
Nature of Operations and Summary of Significant Accounting Policies - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Jan. 02, 2016 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 109,843 | $ 85,152 |
Currency translation | (8,073) | (6,212) |
Accumulated Amortization | (49,040) | (40,908) |
Net | 52,730 | 38,032 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross | 59,101 | 43,271 |
Currency translation | (5,202) | (3,916) |
Accumulated Amortization | (21,805) | (17,314) |
Net | 32,094 | 22,041 |
Intellectual property | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross | 27,101 | 22,899 |
Currency translation | (2,052) | (1,772) |
Accumulated Amortization | (17,105) | (15,584) |
Net | 7,944 | 5,543 |
Tradenames | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross | 12,547 | 10,269 |
Currency translation | (591) | (405) |
Accumulated Amortization | (1,065) | (698) |
Net | 10,891 | 9,166 |
Non-compete agreements | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross | 3,662 | 3,548 |
Currency translation | (85) | (55) |
Accumulated Amortization | (3,373) | (3,298) |
Net | 204 | 195 |
Distribution network | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross | 2,400 | 2,400 |
Currency translation | 0 | 0 |
Accumulated Amortization | (1,642) | (1,501) |
Net | 758 | 899 |
Licensing agreements | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross | 400 | 400 |
Currency translation | 0 | 0 |
Accumulated Amortization | (233) | (213) |
Net | 167 | 187 |
Other | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross | 4,632 | 2,365 |
Currency translation | (143) | (64) |
Accumulated Amortization | (3,817) | (2,300) |
Net | $ 672 | $ 1 |
Nature of Operations and Summ45
Nature of Operations and Summary of Significant Accounting Policies - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Jan. 02, 2016 | |
Goodwill [Roll Forward] | ||
Gross Balance, Beginning Balance | $ 204,560 | $ 213,391 |
Accumulated impairment losses | (85,509) | (85,509) |
Net Balance, Beginning Balance | 119,051 | 127,882 |
Increase Due to Acquisition | 38,552 | |
Currency Translation | (6,148) | (8,831) |
Goodwill period adjustments | 32,404 | (8,831) |
Gross Balance, Ending Balance | 236,964 | 204,560 |
Accumulated impairment losses | (85,509) | (85,509) |
Net Balance, Ending Balance | 151,455 | 119,051 |
Stock-Preparation | ||
Goodwill [Roll Forward] | ||
Net Balance, Beginning Balance | 19,527 | |
Net Balance, Ending Balance | 54,751 | 19,527 |
Doctoring, Cleaning, & Filtration | ||
Goodwill [Roll Forward] | ||
Net Balance, Beginning Balance | 35,990 | |
Net Balance, Ending Balance | 33,839 | 35,990 |
Fluid-Handling | ||
Goodwill [Roll Forward] | ||
Net Balance, Beginning Balance | 46,694 | |
Net Balance, Ending Balance | 45,600 | 46,694 |
Operating Segments | Papermaking systems segment | ||
Goodwill [Roll Forward] | ||
Gross Balance, Beginning Balance | 187,720 | 193,279 |
Accumulated impairment losses | (85,509) | (85,509) |
Net Balance, Beginning Balance | 102,211 | 107,770 |
Increase Due to Acquisition | 38,552 | |
Currency Translation | (6,573) | (5,559) |
Goodwill period adjustments | 31,979 | (5,559) |
Gross Balance, Ending Balance | 219,699 | 187,720 |
Accumulated impairment losses | (85,509) | (85,509) |
Net Balance, Ending Balance | 134,190 | 102,211 |
Operating Segments | Wood Processing Systems | ||
Goodwill [Roll Forward] | ||
Gross Balance, Beginning Balance | 16,840 | 20,112 |
Accumulated impairment losses | 0 | 0 |
Net Balance, Beginning Balance | 16,840 | 20,112 |
Increase Due to Acquisition | 0 | |
Currency Translation | 425 | (3,272) |
Goodwill period adjustments | 425 | (3,272) |
Gross Balance, Ending Balance | 17,265 | 16,840 |
Accumulated impairment losses | 0 | 0 |
Net Balance, Ending Balance | $ 17,265 | $ 16,840 |
Nature of Operations and Summ46
Nature of Operations and Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2016USD ($) | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Jan. 02, 2016USD ($) | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | Jan. 03, 2015 | Sep. 27, 2014 | Jun. 28, 2014 | Mar. 29, 2014 | Dec. 31, 2016USD ($)Segment$ / shares | Jan. 02, 2016USD ($) | Jan. 03, 2015USD ($) | Dec. 31, 2005USD ($) | |
Accounting Policies [Abstract] | ||||||||||||||||
Number of reportable segments | Segment | 2 | |||||||||||||||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||||||||||||||
Operating cycle | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 91 days | 98 days | 91 days | 91 days | 91 days | 364 days | 364 days | 371 days | |
Excess tax benefit related to share-based compensation | $ 582,000 | |||||||||||||||
Percentage of completion revenue | 23,300,000 | $ 32,078,000 | $ 19,078,000 | |||||||||||||
Inventory for long-term contracts | $ 274,000 | 274,000 | ||||||||||||||
Advance payments on long-term contracts | $ 5,158,000 | 2,374,000 | 5,158,000 | 2,374,000 | ||||||||||||
Due from bankers acceptances drafts | 7,852,000 | 8,314,000 | 7,852,000 | 8,314,000 | ||||||||||||
Restricted cash | 2,082,000 | $ 1,406,000 | 2,082,000 | 1,406,000 | ||||||||||||
Cost of goods and services sold, depreciation and amortization | $ 6,194,000 | 5,814,000 | 5,661,000 | |||||||||||||
Weighted average useful life of acquired intangible assets | 12 years | |||||||||||||||
Amortization expense of acquired intangible assets | $ 8,132,000 | 5,007,000 | $ 5,528,000 | |||||||||||||
Estimated Future Amortization Expense [Abstract] | ||||||||||||||||
2,017 | 6,832,000 | 6,832,000 | ||||||||||||||
2,018 | 6,481,000 | 6,481,000 | ||||||||||||||
2,019 | 5,945,000 | 5,945,000 | ||||||||||||||
2,020 | 5,450,000 | 5,450,000 | ||||||||||||||
2,021 | 5,051,000 | 5,051,000 | ||||||||||||||
Thereafter | $ 14,871,000 | 14,871,000 | ||||||||||||||
Johnson tradename | ||||||||||||||||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||||||||||||||
Indefinite-lived intangible assets acquired | 8,100,000 | 8,100,000 | $ 8,100,000 | |||||||||||||
Impairment of intangible assets | $ 0 | $ 0 | ||||||||||||||
Minimum | ||||||||||||||||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||||||||||||||
Operating cycle | 364 days | |||||||||||||||
Maximum | ||||||||||||||||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||||||||||||||
Operating cycle | 371 days | |||||||||||||||
Accounting Standards Update 2016-09 | ||||||||||||||||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||||||||||||||
Excess tax benefit related to share-based compensation per diluted share (in dollars per share) | $ / shares | $ 0.05 |
Acquisitions - Purchase Price A
Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Net Assets Acquired: | |||
Goodwill | $ 151,455 | $ 119,051 | $ 127,882 |
Purchase Price: | |||
Cash | 58,894 | $ 0 | 12,658 |
2016 Acquisitions | |||
Net Assets Acquired: | |||
Cash and Cash Equivalents | 2,277 | ||
Accounts Receivable | 5,441 | ||
Inventories | 3,947 | ||
Property, Plant & Equipment | 7,179 | ||
Other Assets | 2,882 | ||
Intangibles | 24,691 | ||
Goodwill | 38,552 | ||
Total assets acquired | 84,969 | ||
Accounts Payable | 5,536 | ||
Customer Deposits | 2,471 | ||
Capital Lease Obligations | 4,842 | ||
Long-Term Deferred Income Taxes | 6,148 | ||
Other Liabilities | 6,913 | ||
Total Liabilities Assumed | 25,910 | ||
Net assets acquired | 59,059 | ||
Purchase Price: | |||
Cash | 29,028 | ||
Cash Paid to Seller Borrowed Under the Revolving Credit Facility | 29,866 | ||
Cash Due to Seller | 165 | ||
Total purchase price | $ 59,059 | ||
2014 Acquisitions | |||
Net Assets Acquired: | |||
Cash and Cash Equivalents | 674 | ||
Inventories | 1,064 | ||
Other Current Assets | 324 | ||
Property, Plant & Equipment | 847 | ||
Goodwill | 3,463 | ||
Total assets acquired | 14,032 | ||
Total Liabilities Assumed | 1,001 | ||
Net assets acquired | 13,031 | ||
Purchase Price: | |||
Cash | 11,840 | ||
Contingent Consideration | 1,191 | ||
Total purchase price | 13,031 | ||
2014 Acquisitions | Customer relationships | |||
Net Assets Acquired: | |||
Intangibles | 4,700 | ||
2014 Acquisitions | Intellectual property | |||
Net Assets Acquired: | |||
Intangibles | 2,600 | ||
2014 Acquisitions | Other | |||
Net Assets Acquired: | |||
Intangibles | $ 360 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) $ / shares in Units, € in Thousands, $ in Thousands | Apr. 04, 2016USD ($) | Apr. 04, 2016EUR (€) | Jan. 04, 2016USD ($) | Jan. 04, 2016EUR (€) | Oct. 31, 2014USD ($) | Dec. 30, 2013USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($)$ / shares | Oct. 01, 2016$ / shares | Jul. 02, 2016$ / shares | Apr. 02, 2016USD ($)$ / shares | Jan. 02, 2016USD ($)$ / shares | Oct. 03, 2015$ / shares | Jul. 04, 2015$ / shares | Apr. 04, 2015$ / shares | Dec. 31, 2016USD ($)$ / shares | Jan. 02, 2016USD ($)$ / shares | Jan. 03, 2015USD ($)$ / shares |
Business Acquisition [Line Items] | ||||||||||||||||||
Acquisition transaction costs | $ 1,832 | $ 326 | ||||||||||||||||
Acquisitions, net of cash acquired | $ 56,617 | $ 0 | $ 11,984 | |||||||||||||||
Net Loss Attributable to Kadant (in dollars per share) | $ / shares | $ (0.69) | $ (0.82) | $ (0.75) | $ (0.62) | $ (0.94) | $ (0.78) | $ (0.76) | $ (0.62) | $ (2.88) | $ (3.10) | $ (2.56) | |||||||
Goodwill | $ 151,455 | $ 119,051 | $ 151,455 | $ 119,051 | $ 127,882 | |||||||||||||
Weighted average useful life of acquired intangible assets | 12 years | |||||||||||||||||
Cash payments in acquisition | $ 58,894 | $ 0 | 12,658 | |||||||||||||||
Euro-Denominated Borrowing | Revolving credit facility | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Proceeds from revolving credit facility | $ 29,866 | |||||||||||||||||
PAAL | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Acquisitions, net of cash acquired | $ 56,617 | € 49,713 | ||||||||||||||||
Revenues | $ 40,783 | |||||||||||||||||
Net Loss Attributable to Kadant (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||||||
Acquisition costs per share (in dollars per share) | $ / shares | 0.15 | |||||||||||||||||
One-time charges associated with acquired inventory and backlog per share (in dollars per share) | $ / shares | $ 0.12 | |||||||||||||||||
Goodwill | 38,552 | |||||||||||||||||
Weighted average useful life of acquired intangible assets | 12 years | |||||||||||||||||
PAAL | Customer relationships | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible assets | 15,831 | |||||||||||||||||
Weighted average useful life of acquired intangible assets | 13 years | |||||||||||||||||
PAAL | Intellectual property | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible assets | 4,203 | |||||||||||||||||
Weighted average useful life of acquired intangible assets | 9 years | |||||||||||||||||
PAAL | Tradenames | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible assets | 2,278 | |||||||||||||||||
Weighted average useful life of acquired intangible assets | 14 years | |||||||||||||||||
PAAL | Other intangibles | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible assets | $ 2,379 | |||||||||||||||||
Certain assets of the screen cylinder business of a U.S.-based company | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Cash payments in acquisition | $ 9,174 | |||||||||||||||||
European Producer of Creping and Coating Blades | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Cash payments in acquisition | $ 1,091 | € 1,000 | $ 2,666 | |||||||||||||||
Cash acquired from acquisition | $ 674 | |||||||||||||||||
2014 Acquisitions | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Goodwill | 3,463 | |||||||||||||||||
Weighted average useful life of acquired intangible assets | 9 years | |||||||||||||||||
Cash payments in acquisition | 11,840 | |||||||||||||||||
Goodwill, expected tax deductible amount | 2,004 | |||||||||||||||||
2014 Acquisitions | Customer relationships | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Weighted average useful life of acquired intangible assets | 8 years | |||||||||||||||||
2014 Acquisitions | Intellectual property | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Weighted average useful life of acquired intangible assets | 11 years | |||||||||||||||||
2013 Acquisitions | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Post-closing adjustment payments, for prior acquisitions | $ 818 | |||||||||||||||||
Scenario, Forecast | PAAL | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Cash payments in acquisition | $ 165 |
Acquisitions - Pro Forma Inform
Acquisitions - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Earnings per Share Attributable to Kadant: | |||||||||||
Nonrecurring adjustments | $ 7,733 | $ 9,157 | $ 8,311 | $ 6,876 | $ 10,385 | $ 8,643 | $ 8,464 | $ 6,897 | $ 32,077 | $ 34,389 | $ 28,659 |
PAAL | |||||||||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||||||||||
Revenues | 427,273 | 444,350 | |||||||||
Net Income Attributable to Kadant | $ 35,321 | $ 33,881 | |||||||||
Earnings per Share Attributable to Kadant: | |||||||||||
Basic | $ 3.25 | $ 3.12 | |||||||||
Diluted | $ 3.17 | $ 3.05 | |||||||||
PAAL | Acquisition-related transaction costs | |||||||||||
Earnings per Share Attributable to Kadant: | |||||||||||
Nonrecurring adjustments | $ 1,832 | $ (1,832) | |||||||||
PAAL | Inventory revalued | |||||||||||
Earnings per Share Attributable to Kadant: | |||||||||||
Nonrecurring adjustments | 458 | (458) | |||||||||
PAAL | Intangible amortization related to acquired backlog | |||||||||||
Earnings per Share Attributable to Kadant: | |||||||||||
Nonrecurring adjustments | 1,468 | (1,468) | |||||||||
PAAL | Pre-acquisition debt | |||||||||||
Earnings per Share Attributable to Kadant: | |||||||||||
Nonrecurring adjustments | $ 454 | $ 1,636 |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components Stock-Based Compensation Expense (Details) - Selling, general and administrative expenses - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 5,069 | $ 5,741 | $ 5,813 |
Restricted Stock Unit Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 4,848 | 5,185 | 4,904 |
Stock Option Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 51 | 420 | 782 |
Employee Stock Purchase Plan Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 170 | $ 136 | $ 127 |
Employee Benefit Plans - Activi
Employee Benefit Plans - Activity of the Unvested RSUs (Details) - Restricted Stock Unit Awards - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Units | |||
Unvested RSUs at beginning of year (in shares) | 216 | ||
Granted (in shares) | 132 | ||
Vested (in shares) | (143) | ||
Forfeited / expired (in shares) | (2) | ||
Unvested RSU's at end of year (in shares) | 203 | 216 | |
Weighted Average Grant- Date Fair Value | |||
Weighted average grant date fair value, balance at beginning of year (in dollars per share) | $ 37.01 | ||
Weighted average grant date fair value, granted (in dollars per share) | 40.41 | $ 44.75 | $ 38.52 |
Weighted average grant date fair value, vested (in dollars per share) | 35.46 | ||
Weighted average grant date fair value, forfeited / expired (in dollars per share) | 40.87 | ||
Weighted average grant date fair value, balance at end of year (in dollars per share) | $ 40.23 | $ 37.01 |
Employee Benefit Plans - Stock
Employee Benefit Plans - Stock Option Activity (Details) - Stock Option Awards $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($)$ / sharesshares | |
Number of Shares | |
Options Outstanding, Beginning Balance | shares | 358 |
Exercised | shares | (51) |
Options Outstanding, Ending Balance | shares | 307 |
Vested and Exercisable at December 31, 2016 | shares | 307 |
Weighted Average Exercise Price | |
Options Outstanding, Beginning Balance (in dollars per share) | $ / shares | $ 21.12 |
Exercised (in dollars per share) | $ / shares | 23.57 |
Options Outstanding, Ending Balance (in dollars per share) | $ / shares | 20.72 |
Vested and Exercisable at December 31, 2016 (in dollars per share) | $ / shares | $ 20.72 |
Additional Information: | |
Weighted average remaining contractual life, options outstanding at end of year | 4 years 6 months |
Weighted average remaining contractual life, vested and exercisable at December 31, 2016 | 4 years 6 months |
Aggregate intrinsic value, options outstanding at end of year | $ | $ 12,443 |
Aggregate intrinsic value, vested and exercisable at December 31, 2016 | $ | $ 12,443 |
Employee Benefit Plans - Stoc53
Employee Benefit Plans - Stock Option Exercises (Details) - Stock Option Awards - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total Intrinsic Value of Options Exercised | $ 1,341 | $ 442 | $ 438 |
Cash Received From Options Exercised | $ 1,189 | $ 284 | $ 336 |
Employee Benefit Plans - Change
Employee Benefit Plans - Changes in Plans and AOCI Impacts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Pension benefits | U.S. Pension Benefits | |||
Change in Benefit Obligation: | |||
Benefit obligation at beginning of year | $ 31,310 | $ 32,213 | |
Acquisition | 0 | 0 | |
Service cost | 723 | 842 | $ 850 |
Interest cost | 1,273 | 1,229 | 1,286 |
Actuarial loss (gain) | 575 | (1,448) | |
Benefits paid | (1,946) | (1,526) | |
Settlement payment | 0 | 0 | |
Currency translation | 0 | 0 | |
Benefit obligation at end of year | 31,935 | 31,310 | 32,213 |
Change in Plan Assets: | |||
Fair value of plan assets at beginning of year | 27,776 | 28,986 | |
Actual return on plan assets | 2,075 | (764) | |
Employer contributions | 1,080 | 1,080 | |
Benefits paid | (1,946) | (1,526) | |
Settlement payment | 0 | 0 | |
Currency translation | 0 | 0 | |
Fair value of plan assets at end of year | 28,985 | 27,776 | 28,986 |
Unfunded Status | (2,950) | (3,534) | |
Accumulated Benefit Obligation at End of Year | 27,573 | 26,844 | |
Current liability | 0 | 0 | |
Non-current liability | (2,950) | (3,534) | |
Unrecognized net actuarial loss | (7,383) | (8,094) | |
Unrecognized prior service cost | (53) | (108) | |
Total | (7,436) | (8,202) | |
Current year unrecognized net actuarial gain (loss) | 213 | (737) | |
Amortization of unrecognized prior service cost | 55 | 55 | |
Amortization of unrecognized net actuarial loss | 498 | 508 | |
Settlement loss | 0 | 0 | |
Currency translation | 0 | 0 | |
Total | 766 | (174) | |
Pension benefits | Non-U.S. Pension Benefits | |||
Change in Benefit Obligation: | |||
Benefit obligation at beginning of year | 3,041 | 3,531 | |
Acquisition | 380 | 0 | |
Service cost | 102 | 105 | 193 |
Interest cost | 107 | 102 | 138 |
Actuarial loss (gain) | 58 | (102) | |
Benefits paid | (63) | (189) | |
Settlement payment | 0 | 0 | |
Currency translation | (284) | (406) | |
Benefit obligation at end of year | 3,341 | 3,041 | 3,531 |
Change in Plan Assets: | |||
Fair value of plan assets at beginning of year | 396 | 632 | |
Actual return on plan assets | 6 | (142) | |
Employer contributions | 159 | 189 | |
Benefits paid | (63) | (189) | |
Settlement payment | 0 | 0 | |
Currency translation | (72) | (94) | |
Fair value of plan assets at end of year | 426 | 396 | 632 |
Unfunded Status | (2,915) | (2,645) | |
Accumulated Benefit Obligation at End of Year | 2,549 | 2,169 | |
Current liability | (194) | (133) | |
Non-current liability | (2,721) | (2,512) | |
Unrecognized net actuarial loss | (784) | (832) | |
Unrecognized prior service cost | (42) | (47) | |
Total | (826) | (879) | |
Current year unrecognized net actuarial gain (loss) | (75) | (75) | |
Amortization of unrecognized prior service cost | 4 | 4 | |
Amortization of unrecognized net actuarial loss | 39 | 38 | |
Settlement loss | 0 | 0 | |
Currency translation | 85 | 109 | |
Total | 53 | 76 | |
Other Post-Retirement Benefits | |||
Change in Benefit Obligation: | |||
Benefit obligation at beginning of year | 3,539 | 3,823 | |
Acquisition | 0 | 0 | |
Service cost | 130 | 117 | 103 |
Interest cost | 156 | 147 | 163 |
Actuarial loss (gain) | 686 | (299) | |
Benefits paid | (180) | (219) | |
Settlement payment | (415) | 0 | |
Currency translation | (22) | (30) | |
Benefit obligation at end of year | 3,894 | 3,539 | 3,823 |
Change in Plan Assets: | |||
Fair value of plan assets at beginning of year | 26 | 34 | |
Actual return on plan assets | 1 | (3) | |
Employer contributions | 601 | 219 | |
Benefits paid | (180) | (219) | |
Settlement payment | (415) | 0 | |
Currency translation | (5) | (5) | |
Fair value of plan assets at end of year | 28 | 26 | $ 34 |
Unfunded Status | (3,866) | (3,513) | |
Accumulated Benefit Obligation at End of Year | 0 | 0 | |
Current liability | (183) | (187) | |
Non-current liability | (3,683) | (2,911) | |
Unrecognized net actuarial loss | (872) | (325) | |
Unrecognized prior service cost | (525) | (610) | |
Total | (1,397) | (935) | |
Current year unrecognized net actuarial gain (loss) | (685) | 237 | |
Amortization of unrecognized prior service cost | 88 | 88 | |
Amortization of unrecognized net actuarial loss | 50 | 30 | |
Settlement loss | 114 | 0 | |
Currency translation | (29) | 35 | |
Total | $ (462) | $ 390 |
Employee Benefit Plans - Weight
Employee Benefit Plans - Weighted-Average Assumptions Used (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Pension benefits | U.S. Pension Benefits | |||
Weighted-average assumptions used to determine the benefit obligation | |||
Discount rate | 4.03% | 4.22% | |
Rate of compensation increase | 3.00% | 3.00% | |
Weighted-average assumptions used to determine net periodic benefit cost | |||
Discount Rate | 4.22% | 3.87% | 4.79% |
Expected Long-Term Return on Plan Assets | 5.00% | 5.25% | 5.75% |
Rate of Compensation Increase | 3.00% | 3.00% | 3.50% |
Pension benefits | Non-U.S. Pension Benefits | |||
Weighted-average assumptions used to determine the benefit obligation | |||
Discount rate | 3.26% | 3.55% | |
Rate of compensation increase | 3.33% | 3.47% | |
Weighted-average assumptions used to determine net periodic benefit cost | |||
Discount Rate | 3.87% | 3.33% | 3.68% |
Expected Long-Term Return on Plan Assets | 7.72% | 6.90% | 6.75% |
Rate of Compensation Increase | 3.67% | 3.42% | 2.70% |
Other Post-Retirement Benefits | |||
Weighted-average assumptions used to determine the benefit obligation | |||
Discount rate | 4.20% | 4.32% | |
Rate of compensation increase | 3.12% | 3.18% | |
Weighted-average assumptions used to determine net periodic benefit cost | |||
Discount Rate | 5.38% | 4.01% | 4.91% |
Expected Long-Term Return on Plan Assets | 7.72% | 6.90% | 6.75% |
Rate of Compensation Increase | 3.94% | 3.15% | 3.52% |
Employee Benefit Plans - Plans
Employee Benefit Plans - Plans with Projected Benefit Obligations in Excess of Fair Value of Plan Assets (Details) - Pension benefits - USD ($) $ in Thousands | Dec. 31, 2016 | Jan. 02, 2016 |
U.S. Pension Benefits | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Projected benefit obligation | $ 31,935 | $ 31,310 |
Fair value of plan assets | 28,985 | 27,776 |
Non-U.S. Pension Benefits | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Projected benefit obligation | 3,341 | 3,041 |
Fair value of plan assets | $ 426 | $ 396 |
Employee Benefit Plans - Plan57
Employee Benefit Plans - Plans with Accumulated Benefit Obligations in Excess of Plan Assets (Details) - Pension benefits - USD ($) $ in Thousands | Dec. 31, 2016 | Jan. 02, 2016 |
U.S. Pension Benefits | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Accumulated benefit obligation | $ 0 | $ 0 |
Fair value of plan assets | 0 | 0 |
Non-U.S. Pension Benefits | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Accumulated benefit obligation | 2,549 | 2,169 |
Fair value of plan assets | $ 426 | $ 396 |
Employee Benefit Plans - Comp58
Employee Benefit Plans - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Other Post-Retirement Benefits | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | $ 130 | $ 117 | $ 103 |
Interest cost | 156 | 147 | 163 |
Expected return on plan assets | (2) | (2) | (2) |
Recognized net actuarial loss | 50 | 30 | 22 |
Amortization of prior service cost | 88 | 88 | 88 |
Settlement loss | 114 | 0 | 0 |
Net Periodic Benefit Cost | 536 | 380 | 374 |
U.S. Pension Benefits | Pension benefits | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | 723 | 842 | 850 |
Interest cost | 1,273 | 1,229 | 1,286 |
Expected return on plan assets | (1,288) | (1,421) | (1,480) |
Recognized net actuarial loss | 498 | 508 | 315 |
Amortization of prior service cost | 55 | 55 | 55 |
Settlement loss | 0 | 0 | 0 |
Net Periodic Benefit Cost | 1,261 | 1,213 | 1,026 |
Non-U.S. Pension Benefits | Pension benefits | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | 102 | 105 | 193 |
Interest cost | 107 | 102 | 138 |
Expected return on plan assets | (25) | (40) | (44) |
Recognized net actuarial loss | 39 | 38 | 18 |
Amortization of prior service cost | 4 | 4 | 6 |
Settlement loss | 0 | 0 | 0 |
Net Periodic Benefit Cost | $ 227 | $ 209 | $ 311 |
Employee Benefit Plans - Weig59
Employee Benefit Plans - Weighted-Average Health Care Cost Trend Rates (Details) - Other Post-Retirement Benefits | 12 Months Ended | |
Dec. 31, 2016 | Jan. 02, 2016 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Healthcare Cost Trend Rate Assumed for Next Year | 8.00% | 8.00% |
Ultimate Healthcare Cost Trend Rate | 8.00% | 8.00% |
Year Assumed Rate Reaches Ultimate Rate | 2,016 | 2,015 |
Employee Benefit Plans - Fair V
Employee Benefit Plans - Fair Value of Plan Assets (Details) - Pension benefits - USD ($) $ in Thousands | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 |
U.S. Pension Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | $ 20,318 | $ 19,485 | |
Investments measured at NAV | 8,667 | 8,291 | |
Total assets at fair value | 28,985 | 27,776 | $ 28,986 |
U.S. Pension Benefits | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 20,318 | 19,485 | |
U.S. Pension Benefits | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 0 | 0 | |
U.S. Pension Benefits | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 0 | 0 | |
U.S. Pension Benefits | Mutual Funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 20,318 | 19,485 | |
U.S. Pension Benefits | Mutual Funds | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 20,318 | 19,485 | |
U.S. Pension Benefits | Mutual Funds | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 0 | 0 | |
U.S. Pension Benefits | Mutual Funds | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 0 | 0 | |
Non-U.S. Pension Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 426 | 396 | $ 632 |
Non-U.S. Pension Benefits | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 426 | 396 | |
Non-U.S. Pension Benefits | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 0 | 0 | |
Non-U.S. Pension Benefits | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 0 | 0 | |
Non-U.S. Pension Benefits | Mutual Funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 426 | 396 | |
Non-U.S. Pension Benefits | Mutual Funds | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 426 | 396 | |
Non-U.S. Pension Benefits | Mutual Funds | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | 0 | 0 | |
Non-U.S. Pension Benefits | Mutual Funds | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Total assets at fair value | $ 0 | $ 0 |
Employee Benefit Plans - Target
Employee Benefit Plans - Target Asset Allocation of Plan Assets (Details) - Pension benefits | 12 Months Ended |
Dec. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |
Neutral | 100.00% |
Equity Securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Minimum | 5.00% |
Neutral | 15.00% |
Maximum | 20.00% |
Debt Securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Minimum | 80.00% |
Neutral | 85.00% |
Maximum | 95.00% |
Employee Benefit Plans - Estima
Employee Benefit Plans - Estimated Future Benefit Payments (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Other Post-Retirement Benefits | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2,017 | $ 187 |
2,018 | 177 |
2,019 | 169 |
2,020 | 308 |
2,021 | 162 |
2022-2026 | 2,753 |
U.S. Pension Benefits | Pension benefits | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2,017 | 1,485 |
2,018 | 1,479 |
2,019 | 1,485 |
2,020 | 4,131 |
2,021 | 1,894 |
2022-2026 | 11,488 |
Non-U.S. Pension Benefits | Pension benefits | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2,017 | 227 |
2,018 | 30 |
2,019 | 105 |
2,020 | 87 |
2,021 | 237 |
2022-2026 | $ 2,029 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 09, 2015 | Sep. 15, 2014 | Apr. 02, 2016 | Apr. 04, 2015 | Mar. 29, 2014 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Number of shares available for grant | 561,162 | |||||||
Tax benefits related to employees' and directors' stock plans | $ 881 | $ 771 | ||||||
Share price | $ 61.20 | |||||||
Cost recognized, defined contribution plan | $ 3,005 | $ 2,749 | $ 2,655 | |||||
Pension benefits | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Future amortization of loss | 541 | |||||||
Future amortization of prior service cost (credit) | 144 | |||||||
Pension benefits | U.S. Pension Benefits | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Estimated future employer contribution, next year | $ 1,080 | |||||||
Pension benefits | Debt Securities | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Maximum weighted-average maturity, debt securities | 10 years | |||||||
Average benchmark duration for debt securities | 5 years | |||||||
Former chief financial officer | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Compensation expense for arrangement with former CFO | $ 360 | |||||||
Restricted stock units for non employee directors (RSUs) | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Grants in period | 5,000 | 5,000 | 5,000 | |||||
Restricted stock units for non employee directors change of control | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Grants in period | 50,000 | |||||||
Grants in period per employee (in shares) | 10,000 | |||||||
Fair value of RSU's outstanding | $ 2,279 | |||||||
Forfeited / expired (in shares) | 10,000 | |||||||
Unvested RSU's at end of year (in shares) | 40,000 | |||||||
Performance shares | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Shares received upon vesting (in shares) | 1 | |||||||
Compensation cost not yet recognized | $ 1,467 | |||||||
Compensation cost not yet recognized, recognition period | 1 year 3 months 18 days | |||||||
Award vesting period | 3 years | |||||||
Time-based restricted stock units | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Shares received upon vesting (in shares) | 1 | |||||||
Compensation cost not yet recognized | $ 2,614 | |||||||
Compensation cost not yet recognized, recognition period | 1 year 9 months 18 days | |||||||
Restricted stock units and stock option awards | Former chief financial officer | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Compensation and options expense for arrangement with former CFO | $ 428 | |||||||
Restricted stock unit awards | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Grants in period | 132,000 | |||||||
Forfeited / expired (in shares) | 2,000 | |||||||
Unvested RSU's at end of year (in shares) | 203,000 | 216,000 | ||||||
Weighted average grant date fair value, granted (in dollars per share) | $ 40.41 | $ 44.75 | $ 38.52 | |||||
Fair value of awards vested in period | $ 6,233 | $ 7,502 | $ 6,895 | |||||
Weighted-average grant date fair value (in dollars per share) | $ 40.23 | $ 37.01 | ||||||
Restricted stock unit awards | Former chief financial officer | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Grants in period | 12,313 | |||||||
Weighted-average grant date fair value (in dollars per share) | $ 39.94 | |||||||
Stock option awards | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Award vesting period | 3 years | |||||||
Stock option awards | Former chief financial officer | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Grants in period (in shares) | 5,201 | |||||||
Weighted-average grant date fair value of options, granted in period (in dollars per share) | $ 17.96 | |||||||
Employee Stock Purchase Plan Awards | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Discount to market under the ESOP | 15.00% | |||||||
Maximum period of restriction on resale under ESOP | 1 year | |||||||
Maximum participation based on compensation percentage under ESOP | 10.00% | |||||||
Stock issued during period under ESOP | 17,874 | 13,573 | 12,017 | |||||
Selling, general and administrative expenses | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Stock-based compensation expense | $ 5,069 | $ 5,741 | $ 5,813 | |||||
Selling, general and administrative expenses | Restricted stock unit awards | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Stock-based compensation expense | 4,848 | 5,185 | 4,904 | |||||
Selling, general and administrative expenses | Stock option awards | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Stock-based compensation expense | 51 | 420 | 782 | |||||
Selling, general and administrative expenses | Employee Stock Purchase Plan Awards | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Stock-based compensation expense | $ 170 | $ 136 | $ 127 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - $ / shares | Dec. 31, 2016 | Jan. 02, 2016 |
Preferred Stock [Abstract] | ||
Preferred stock, authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common Stock [Abstract] | ||
Common stock reserved and unissued (in shares) | 1,122,762 |
Income Taxes - Components of In
Income Taxes - Components of Income Before Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 6,196 | $ 13,076 | $ 10,951 |
Foreign | 38,353 | 36,295 | 30,567 |
Total income from continuing operations before provision for income taxes | $ 44,549 | $ 49,371 | $ 41,518 |
Income Taxes - Components of Pr
Income Taxes - Components of Provision for Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Current Provision: | |||
Federal | $ 535 | $ 4,693 | $ 1,080 |
Foreign | 11,323 | 10,623 | 7,703 |
State | 838 | 1,152 | 713 |
Current provision | 12,696 | 16,468 | 9,496 |
Deferred (Benefit) Provision: | |||
Federal | 1,738 | 45 | 2,179 |
Foreign | (1,818) | (1,378) | 418 |
State | (533) | (373) | 354 |
Deferred (benefit) provision | (613) | (1,706) | 2,951 |
Continuing Operations | $ 12,083 | $ 14,762 | $ 12,447 |
Income Taxes - Continuing and D
Income Taxes - Continuing and Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Income Tax Disclosure [Abstract] | |||
Continuing Operations | $ 12,083 | $ 14,762 | $ 12,447 |
Discontinued Operation | 2 | 43 | (14) |
Provision for Income Taxes Including Discontinued Operation | $ 12,085 | $ 14,805 | $ 12,433 |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Income Tax Disclosure [Abstract] | |||
Provision for Income Taxes at Statutory Rate | $ 15,592 | $ 17,279 | $ 14,531 |
Increases (Decreases) Resulting From: | |||
State income taxes, net of federal tax | 189 | 506 | 694 |
U.S. tax cost of foreign earnings | 192 | 455 | 206 |
Foreign tax rate differential | (3,921) | (3,852) | (3,026) |
(Reversal of) provision for tax benefit reserves, net | (76) | 33 | (1,017) |
Change in valuation allowance | (131) | 99 | 125 |
Nondeductible expenses | 1,090 | 704 | 1,398 |
Research and development tax credits | (229) | (210) | (274) |
Excess tax benefit related to share-based compensation | (553) | 0 | 0 |
Other | (70) | (252) | (190) |
Continuing Operations | $ 12,083 | $ 14,762 | $ 12,447 |
Income Taxes - Net Deferred Tax
Income Taxes - Net Deferred Tax (Liability) Asset (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Jan. 02, 2016 |
Deferred Tax Asset: | ||
Foreign, state, and alternative minimum tax credit carryforwards | $ 161 | $ 23 |
Reserves and accruals | 4,842 | 5,003 |
Net operating loss carryforwards | 13,694 | 12,306 |
Inventory basis difference | 3,005 | 3,253 |
Research and development | 75 | 246 |
Employee compensation | 4,966 | 5,427 |
Allowance for doubtful accounts | 488 | 405 |
Revenue recognition | 636 | 525 |
Other | 249 | 151 |
Deferred tax asset, gross | 28,116 | 27,339 |
Less: valuation allowance | (10,863) | (11,493) |
Deferred tax asset, net | 17,253 | 15,846 |
Deferred Tax Liability: | ||
Goodwill and intangible assets | (21,853) | (17,450) |
Fixed asset basis difference | (4,325) | (3,234) |
Reserves and accruals | 0 | (32) |
Other | (1,199) | (284) |
Deferred tax liability | (27,377) | (21,000) |
Net deferred tax liability | $ (10,124) | $ (5,154) |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Jan. 02, 2016 | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | ||
Unrecognized Tax Benefits, Beginning of Year | $ 5,052 | $ 5,006 |
Gross Increases—Tax Positions in Prior Periods | 403 | 0 |
Gross Decreases—Tax Positions in Prior Periods | (23) | (28) |
Gross Increases—Current-period Tax Positions | 480 | 476 |
Lapses of Statutes of Limitations | (359) | (253) |
Currency Translation | (86) | (149) |
Unrecognized Tax Benefits, End of Year | $ 5,467 | $ 5,052 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Income Tax Disclosure [Abstract] | |||
Tax benefits related to employees' and directors' stock plans | $ 881 | $ 771 | |
Percent of effective income tax rate reconciliation at the federal statutory income tax rate | 35.00% | ||
Operating Loss Carryforwards [Line Items] | |||
Deferred tax assets, Valuation allowance | $ 10,863 | 11,493 | |
Increase (decrease) of deferred tax asset valuation allowance | (630) | ||
Undistributed earnings of foreign subsidiaries | 182,166 | ||
Estimated withholding liability related to undistributed earnings of foreign subsidiaries | 3,951 | ||
Unrecognized tax benefits that would impact effective tax rate | 5,467 | ||
Income tax penalties and accrued interest from unrecognized tax benefits | 1,321 | 1,246 | |
Income tax penalties and interest expense from unrecognized tax benefits | 69 | $ 103 | |
Upper bound estimated range of change of significant decrease in unrecognized tax benefits | 188 | ||
Excess tax benefit related to share-based compensation | $ 582 | ||
Estimated time frame for significant change in unrecognized tax benefits | 12 months | ||
Internal revenue service (IRS) | |||
Operating Loss Carryforwards [Line Items] | |||
Deferred tax assets, Valuation allowance | $ 835 | ||
Foreign tax authority | |||
Operating Loss Carryforwards [Line Items] | |||
Deferred tax assets, Valuation allowance | 10,028 | ||
Operating loss carryforwards | 43,773 | ||
Operating loss carryforwards expiring in years 2017 through 2021 | 34 | ||
State and local jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 34,087 |
Short- and Long-Term Obligati72
Short- and Long-Term Obligations - Long-term Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Jan. 02, 2016 |
Debt Instrument [Line Items] | ||
Obligations Under Capital Lease, due 2017 to 2022 | $ 4,309 | $ 0 |
Total Short- and Long-Term Obligations | 66,411 | 31,250 |
Less: Short-Term Obligations | (643) | (5,250) |
Long-Term Obligations | 65,768 | 26,000 |
Revolving credit facility, due 2018 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 61,494 | 26,000 |
Commercial real estate loan, due 2016 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 0 | 5,250 |
Other Borrowings, due 2017 to 2023 | ||
Debt Instrument [Line Items] | ||
Other borrowings | $ 608 | $ 0 |
Short- and Long-Term Obligati73
Short- and Long-Term Obligations - Additional Information (Details) | Apr. 04, 2016USD ($) | Mar. 29, 2016USD ($) | May 04, 2006USD ($) | Apr. 02, 2016USD ($) | Dec. 31, 2016USD ($) | Jan. 02, 2016USD ($) |
Debt Instrument [Line Items] | ||||||
Unamortized debt issuance costs | $ 266,000 | |||||
Loans receivable | 233,000 | |||||
Outstanding capital lease obligations | 4,309,000 | $ 0 | ||||
Revolving credit facility | ||||||
Debt Instrument [Line Items] | ||||||
Term of debt agreement | 5 years | |||||
Borrowing capacity available under committed portion | $ 100,000,000 | 100,000,000 | ||||
Additional borrowing capacity | $ 50,000,000 | |||||
Maturity date | Nov. 1, 2018 | |||||
Maximum amount of unrestricted U.S. cash | $ 25,000,000 | |||||
Maximum consolidated leverage ratio | 3.5 | 3.5 | ||||
Minimum consolidated interest coverage ratio | 3 | 3 | ||||
Long-term debt | $ 61,494,000 | $ 26,000,000 | ||||
Remaining borrowing capacity | $ 36,518,000 | |||||
Weighted average interest rate for long-term obligations (in hundredths) | 1.52% | 1.81% | ||||
Revolving credit facility | Euro-Denominated Borrowing | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from credit facility | $ 29,866,000 | |||||
Long-term debt | $ 27,494,000 | |||||
Revolving credit facility | Federal funds rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate (as a percentage) | 0.50% | |||||
Revolving credit facility | Federal funds rate | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Margin rate of debt instrument (in hundredths) | 0.00% | |||||
Revolving credit facility | Federal funds rate | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Margin rate of debt instrument (in hundredths) | 1.00% | |||||
Revolving credit facility | Prime rate | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Margin rate of debt instrument (in hundredths) | 0.00% | |||||
Revolving credit facility | Prime rate | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Margin rate of debt instrument (in hundredths) | 1.00% | |||||
Revolving credit facility | Eurocurrency rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate (as a percentage) | 0.50% | |||||
Revolving credit facility | Eurocurrency rate | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Margin rate of debt instrument (in hundredths) | 0.00% | |||||
Revolving credit facility | Eurocurrency rate | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Margin rate of debt instrument (in hundredths) | 1.00% | |||||
Revolving credit facility | Eurocurrency rate two | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Margin rate of debt instrument (in hundredths) | 1.00% | |||||
Revolving credit facility | Eurocurrency rate two | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Margin rate of debt instrument (in hundredths) | 2.00% | |||||
Commercial real estate loan | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | 0 | $ 5,250,000 | ||||
Weighted average interest rate for long-term obligations (in hundredths) | 6.38% | |||||
Face amount of debt instrument | $ 10,000,000 | |||||
Quarterly payment of principal | $ 125,000 | |||||
Terms of debt agreements | 10 years | |||||
Amount due at maturity | $ 5,000,000 | |||||
Commercial real estate loan | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Margin rate of debt instrument (in hundredths) | 0.75% | |||||
Capital Lease Obligations | Sale Leaseback Arrangement | ||||||
Debt Instrument [Line Items] | ||||||
Sale-leaseback financing arrangement, interest rate | 3.30% | |||||
Net purchase option | $ 1,390,000 | |||||
Outstanding capital lease obligations | 4,188,000 | |||||
Capital Lease Obligations | PAAL Equipment Capital Lease | ||||||
Debt Instrument [Line Items] | ||||||
Capital lease obligations, interest rate | 3.44% | |||||
Capital lease obligations, average remaining term | 3 years 1 month 6 days | |||||
Outstanding capital lease obligations | 121,000 | |||||
Other Borrowings, due 2017 to 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Other borrowings | $ 608,000 | $ 0 |
Short- and Long-Term Obligati74
Short- and Long-Term Obligations - Future Minimum Capital Lease Payments (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Debt Disclosure [Abstract] | |
2,017 | $ 560 |
2,018 | 553 |
2,019 | 547 |
2,020 | 554 |
2,021 | 521 |
2022 and Thereafter | 624 |
Total minimum lease payments | 3,359 |
Less: Imputed Interest | (440) |
Present Value of Minimum Lease Payments | $ 2,919 |
Commitments and Contingencies -
Commitments and Contingencies - Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating Leases, Rent Expense, Net | $ 4,298 | $ 3,797 | $ 3,948 |
2,017 | 2,779 | ||
2,018 | 1,659 | ||
2,019 | 1,193 | ||
2,020 | 748 | ||
2,021 | 698 | ||
Due Thereafter | 959 | ||
Future Minimum Payments Due | 8,036 | ||
Banker's Acceptances Executed | $ 4,824 |
Commitments and Contingencies76
Commitments and Contingencies - Letters of Credit and Bank Guarantees (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Performance Obligations and Customer Deposit Guarantees | |
Line of Credit Facility [Line Items] | |
Outstanding letters of credit and bank guarantees | $ 13,813 |
Other Income and Restructurin77
Other Income and Restructuring Costs - Changes in Accrued Restructuring (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Restructuring Reserve [Roll Forward] | |||
Provision | $ 515 | ||
Restructuring Plan 2015 | |||
Restructuring Reserve [Roll Forward] | |||
Balance at beginning of period | $ 0 | ||
Provision | 344 | ||
Usage | (323) | ||
Currency translation | (21) | ||
Balance at end of period | 0 | ||
Restructuring Plan 2014 | |||
Restructuring Reserve [Roll Forward] | |||
Balance at beginning of period | 0 | 47 | |
Provision | 171 | $ 370 | |
Usage | (214) | (267) | |
Currency translation | (4) | (56) | |
Balance at end of period | 0 | 47 | |
Restructuring Plan 2014 and Prior | |||
Restructuring Reserve [Roll Forward] | |||
Balance at beginning of period | 38 | 56 | 519 |
Provision | 0 | 435 | |
Usage | (35) | (15) | (815) |
Currency translation | (3) | (3) | (83) |
Balance at end of period | 0 | 38 | 56 |
Employee severance | Restructuring Plan 2015 | |||
Restructuring Reserve [Roll Forward] | |||
Balance at beginning of period | 0 | ||
Provision | 344 | ||
Usage | (323) | ||
Currency translation | (21) | ||
Balance at end of period | 0 | ||
Employee severance | Restructuring Plan 2014 | |||
Restructuring Reserve [Roll Forward] | |||
Balance at beginning of period | 0 | 47 | |
Provision | 171 | 370 | |
Usage | (214) | (267) | |
Currency translation | (4) | (56) | |
Balance at end of period | 0 | 47 | |
Employee severance | Restructuring Plan 2014 and Prior | |||
Restructuring Reserve [Roll Forward] | |||
Balance at beginning of period | 38 | 56 | 519 |
Provision | 0 | (11) | |
Usage | (35) | (15) | (370) |
Currency translation | (3) | (3) | (82) |
Balance at end of period | 0 | 38 | 56 |
Facility-related closing costs | Restructuring Plan 2015 | |||
Restructuring Reserve [Roll Forward] | |||
Balance at beginning of period | 0 | ||
Provision | 0 | ||
Usage | 0 | ||
Currency translation | 0 | ||
Balance at end of period | 0 | ||
Facility-related closing costs | Restructuring Plan 2014 | |||
Restructuring Reserve [Roll Forward] | |||
Balance at beginning of period | 0 | 0 | |
Provision | 0 | 0 | |
Usage | 0 | 0 | |
Currency translation | 0 | 0 | |
Balance at end of period | 0 | 0 | |
Facility-related closing costs | Restructuring Plan 2014 and Prior | |||
Restructuring Reserve [Roll Forward] | |||
Balance at beginning of period | 0 | 0 | 0 |
Provision | 0 | 446 | |
Usage | 0 | 0 | (445) |
Currency translation | 0 | 0 | (1) |
Balance at end of period | $ 0 | $ 0 | $ 0 |
Other Income and Restructurin78
Other Income and Restructuring Costs - Additional Information (Details) $ in Thousands | 12 Months Ended | 24 Months Ended | ||
Dec. 31, 2016USD ($)Employee | Jan. 02, 2016USD ($)Employee | Jan. 03, 2015USD ($)Employee | Dec. 31, 2015USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||
Gain on the sale of real estate | $ 350 | $ (4) | $ 118 | |
Proceeds from sale of real estate | 428 | 30 | 242 | |
Restructuring provision (reversal) | 515 | |||
Restructuring and related cost incurred to date | 805 | |||
Sweden | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Gain on the sale of real estate | 317 | |||
Proceeds from sale of real estate | 368 | |||
Restructuring Plan 2015 | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring provision (reversal) | 344 | |||
Restructuring Plan 2015 | Employee severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring provision (reversal) | 344 | |||
Restructuring Plan 2015 | Facility-related closing costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring provision (reversal) | 0 | |||
Restructuring Plan 2015 | Papermaking systems segment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring provision (reversal) | $ 344 | |||
Restructuring Plan 2015 | Papermaking systems segment | Employee severance | Canada And Brazil | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Number of positions eliminated related to restructuring | Employee | 25 | |||
Restructuring Plan 2014 | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring provision (reversal) | $ 171 | 370 | ||
Restructuring Plan 2014 | Employee severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring provision (reversal) | 171 | 370 | ||
Restructuring Plan 2014 | Facility-related closing costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring provision (reversal) | 0 | 0 | ||
Restructuring Plan 2014 | Papermaking systems segment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring provision (reversal) | $ 541 | |||
Restructuring Plan 2014 | Papermaking systems segment | Employee severance | Sweden | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring provision (reversal) | 171 | 49 | ||
Restructuring and related cost incurred to date | $ 220 | |||
Number of positions eliminated related to restructuring | Employee | 7 | |||
Restructuring Plan 2014 | Papermaking systems segment | Employee severance | BRAZIL | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring provision (reversal) | $ 321 | |||
Number of positions eliminated related to restructuring | Employee | 8 | |||
Restructuring Plans prior to 2014 | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring provision (reversal) | 0 | $ 435 | ||
Restructuring Plans prior to 2014 | Employee severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring provision (reversal) | 0 | (11) | ||
Restructuring Plans prior to 2014 | Facility-related closing costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring provision (reversal) | $ 0 | $ 446 | ||
Restructuring Plans prior to 2014 | Papermaking systems segment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related cost incurred to date | $ 2,278 | |||
Restructuring Plans prior to 2014 | Papermaking systems segment | Employee severance | Sweden | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related cost incurred to date | $ 497 | |||
Number of positions eliminated related to restructuring | Employee | 25 | |||
Restructuring Plans prior to 2014 | Papermaking systems segment | Employee severance | BRAZIL | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related cost incurred to date | $ 1,158 | |||
Number of positions eliminated related to restructuring | Employee | 22 | |||
Restructuring Plans prior to 2014 | Papermaking systems segment | Facility-related closing costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring provision (reversal) | $ 623 |
Derivatives - Fair Value (Detai
Derivatives - Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Jan. 02, 2016 |
Derivatives Designated as Hedging Instruments | Interest rate swap agreements | Other Long-Term Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | $ 62 | $ 38 |
Derivative Asset, Notional Amount | 10,000 | 10,000 |
Derivatives Designated as Hedging Instruments | Interest rate swap agreements | Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | 0 | (91) |
Derivative Liability, Notional Amount | 0 | 5,250 |
Derivatives Designated as Hedging Instruments | Forward Currency-Exchange Contracts | Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | (41) | (101) |
Derivative Liability, Notional Amount | 2,380 | 6,525 |
Derivatives Not Designated as Hedging Instruments | Forward Currency-Exchange Contracts | Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | (237) | 0 |
Derivative Liability, Notional Amount | 17,185 | 0 |
Derivatives Not Designated as Hedging Instruments | Forward Currency-Exchange Contracts | Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 2 | 2,536 |
Derivative Asset, Notional Amount | $ 227 | $ 15,612 |
Derivatives - AOCI Activity (De
Derivatives - AOCI Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | $ 267,945 | $ 265,459 | $ 270,421 |
Loss Recognized in AOCI | 241 | 563 | (159) |
Ending balance | 284,279 | 267,945 | $ 265,459 |
Derivatives Designated as Hedging Instruments | Cash Flow Hedging | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | (229) | ||
Loss reclassified to earnings | 411 | ||
Loss Recognized in AOCI | (170) | ||
Ending balance | 12 | (229) | |
Derivatives Designated as Hedging Instruments | Cash Flow Hedging | Interest rate swap agreements | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | (162) | ||
Loss reclassified to earnings | 241 | ||
Loss Recognized in AOCI | (39) | ||
Ending balance | 40 | (162) | |
Derivatives Designated as Hedging Instruments | Cash Flow Hedging | Forward Currency-Exchange Contracts | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | (67) | ||
Loss reclassified to earnings | 170 | ||
Loss Recognized in AOCI | (131) | ||
Ending balance | $ (28) | $ (67) |
Derivatives - Additional Inform
Derivatives - Additional Information (Details) | Mar. 29, 2016 | Dec. 31, 2016USD ($) | Jan. 02, 2016USD ($) | Jan. 03, 2015USD ($) | Jan. 16, 2015USD ($) |
Revolving credit facility | |||||
Derivatives, Fair Value [Line Items] | |||||
Maximum consolidated leverage ratio | 3.5 | 3.5 | |||
Minimum consolidated interest coverage ratio | 3 | 3 | |||
Forward Currency-Exchange Contracts | Derivatives Not Designated as Hedging Instruments | |||||
Derivatives, Fair Value [Line Items] | |||||
Loss on foreign currency derivative instruments, not designated as hedging | $ 797,000 | $ 386,000 | $ 14,000 | ||
Cash Flow Hedging | Derivatives Designated as Hedging Instruments | |||||
Derivatives, Fair Value [Line Items] | |||||
Rate of effectiveness of derivative agreement | 100.00% | ||||
Amounts to be reclassified into earnings | $ (49,000) | ||||
Cash Flow Hedging | Swap Agreement 2015 | Derivatives Designated as Hedging Instruments | |||||
Derivatives, Fair Value [Line Items] | |||||
Notional amount | $ 10,000,000 | ||||
Cash Flow Hedging | Swap Agreement 2015 | Derivatives Designated as Hedging Instruments | LIBOR | |||||
Derivatives, Fair Value [Line Items] | |||||
Derivative, fixed interest rate | 1.50% | ||||
Cash Flow Hedging | Interest rate swap agreements | Derivatives Designated as Hedging Instruments | |||||
Derivatives, Fair Value [Line Items] | |||||
Unrealized gain associated with swap agreements | $ 62,000 | ||||
Cash Flow Hedging | Forward Currency-Exchange Contracts | Derivatives Designated as Hedging Instruments | |||||
Derivatives, Fair Value [Line Items] | |||||
Period over which entity manages its level of exposure of risk | 12 months |
Fair Value Measurements and F82
Fair Value Measurements and Fair Value of Financial Instruments - Assets and Liabilities, Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2016 | Jan. 02, 2016 |
Assets: | ||
Money market funds and time deposits | $ 10,855 | $ 9,767 |
Forward currency-exchange contracts | 2 | 2,536 |
Interest rate swap agreement | 62 | 38 |
Banker's acceptance drafts | 7,852 | 8,314 |
Liabilities: | ||
Forward currency-exchange contracts | 278 | 101 |
Interest rate swap agreement | 91 | |
Contingent consideration | 1,091 | |
Level 1 | ||
Assets: | ||
Money market funds and time deposits | 10,855 | 9,767 |
Forward currency-exchange contracts | 0 | 0 |
Interest rate swap agreement | 0 | 0 |
Banker's acceptance drafts | 0 | 0 |
Liabilities: | ||
Forward currency-exchange contracts | 0 | 0 |
Interest rate swap agreement | 0 | |
Contingent consideration | 0 | |
Level 2 | ||
Assets: | ||
Money market funds and time deposits | 0 | 0 |
Forward currency-exchange contracts | 2 | 2,536 |
Interest rate swap agreement | 62 | 38 |
Banker's acceptance drafts | 7,852 | 8,314 |
Liabilities: | ||
Forward currency-exchange contracts | 278 | 101 |
Interest rate swap agreement | 91 | |
Contingent consideration | 0 | |
Level 3 | ||
Assets: | ||
Money market funds and time deposits | 0 | 0 |
Forward currency-exchange contracts | 0 | 0 |
Interest rate swap agreement | 0 | 0 |
Banker's acceptance drafts | 0 | 0 |
Liabilities: | ||
Forward currency-exchange contracts | $ 0 | 0 |
Interest rate swap agreement | 0 | |
Contingent consideration | $ 1,091 |
Fair Value Measurements and F83
Fair Value Measurements and Fair Value of Financial Instruments - Liabilities, Unobservable Input Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Jan. 02, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at Beginning of Year | $ 1,091 | $ 1,133 |
Payment | (1,091) | 0 |
Current period expense | 0 | 71 |
Currency translation | 0 | (113) |
Balance at End of Year | $ 0 | $ 1,091 |
Fair Value Measurements and F84
Fair Value Measurements and Fair Value of Financial Instruments - Debt Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Jan. 02, 2016 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Revolving credit facility | $ 61,494 | $ 26,000 |
Capital lease obligations | 3,857 | 0 |
Other borrowings | 417 | 0 |
Debt obligations | 65,768 | 26,000 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Revolving credit facility | 61,494 | 26,000 |
Capital lease obligations | 3,857 | 0 |
Other borrowings | 417 | 0 |
Debt obligations | $ 65,768 | $ 26,000 |
Business Segment and Geograph85
Business Segment and Geographical Information - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)Segment | Jan. 02, 2016USD ($) | Jan. 03, 2015USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | Segment | 2 | ||
Segment Reporting Information [Line Items] | |||
Restructuring and other expense (income) | $ (317) | $ 515 | $ 805 |
Operating Segments | Papermaking systems segment | |||
Segment Reporting Information [Line Items] | |||
Restructuring and other expense (income) | $ (300) | $ 500 | $ 800 |
Business Segment and Geograph86
Business Segment and Geographical Information - Revenues and Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Revenues by Product Line: | |||||||||||
Revenues | $ 100,241 | $ 105,519 | $ 111,828 | $ 96,538 | $ 107,600 | $ 91,929 | $ 98,327 | $ 92,251 | $ 414,126 | $ 390,107 | $ 402,127 |
Income from Continuing Operations Before Provision for Income Taxes: | |||||||||||
Total operating income (loss) | 45,573 | 50,119 | 42,086 | ||||||||
Interest expense, net | (1,024) | (748) | (568) | ||||||||
Income from Continuing Operations Before Provision for Income Taxes | 44,549 | 49,371 | 41,518 | ||||||||
Total Assets: | |||||||||||
Total Assets | 470,691 | 415,498 | 470,691 | 415,498 | 413,747 | ||||||
Depreciation and Amortization: | |||||||||||
Depreciation and amortization | 14,326 | 10,821 | 11,189 | ||||||||
Capital Expenditures: | |||||||||||
Capital expenditures | 5,804 | 5,479 | 6,755 | ||||||||
Long-lived assets | 47,704 | 42,293 | 47,704 | 42,293 | 44,965 | ||||||
United States | |||||||||||
Revenues by Product Line: | |||||||||||
Revenues | 165,335 | 193,383 | 174,003 | ||||||||
Capital Expenditures: | |||||||||||
Long-lived assets | 18,482 | 17,373 | 18,482 | 17,373 | 15,685 | ||||||
China | |||||||||||
Revenues by Product Line: | |||||||||||
Revenues | 43,299 | 50,814 | 43,867 | ||||||||
Capital Expenditures: | |||||||||||
Long-lived assets | 10,714 | 12,278 | 10,714 | 12,278 | 13,996 | ||||||
Germany | |||||||||||
Capital Expenditures: | |||||||||||
Long-lived assets | 5,792 | 63 | 5,792 | 63 | 85 | ||||||
Other | |||||||||||
Revenues by Product Line: | |||||||||||
Revenues | 205,492 | 145,910 | 184,257 | ||||||||
Capital Expenditures: | |||||||||||
Long-lived assets | 12,716 | 12,579 | 12,716 | 12,579 | 15,199 | ||||||
Operating Segments | Papermaking Systems Segment | |||||||||||
Revenues by Product Line: | |||||||||||
Revenues | 366,461 | 342,661 | 348,199 | ||||||||
Income from Continuing Operations Before Provision for Income Taxes: | |||||||||||
Total operating income (loss) | 57,427 | 56,789 | 50,485 | ||||||||
Total Assets: | |||||||||||
Total Assets | 407,538 | 354,417 | 407,538 | 354,417 | 343,937 | ||||||
Depreciation and Amortization: | |||||||||||
Depreciation and amortization | 11,513 | 7,898 | 7,724 | ||||||||
Capital Expenditures: | |||||||||||
Capital expenditures | 5,504 | 4,639 | 5,640 | ||||||||
Operating Segments | Papermaking Systems Segment | Stock-Preparation | |||||||||||
Revenues by Product Line: | |||||||||||
Revenues | 171,378 | 148,341 | 127,496 | ||||||||
Operating Segments | Papermaking Systems Segment | Doctoring, Cleaning, & Filtration | |||||||||||
Revenues by Product Line: | |||||||||||
Revenues | 105,938 | 101,523 | 117,389 | ||||||||
Operating Segments | Papermaking Systems Segment | Fluid-Handling | |||||||||||
Revenues by Product Line: | |||||||||||
Revenues | 89,145 | 92,797 | 103,314 | ||||||||
Operating Segments | Wood Processing Systems | |||||||||||
Revenues by Product Line: | |||||||||||
Revenues | 36,850 | 36,387 | 41,647 | ||||||||
Income from Continuing Operations Before Provision for Income Taxes: | |||||||||||
Total operating income (loss) | 8,327 | 10,926 | 6,977 | ||||||||
Total Assets: | |||||||||||
Total Assets | 52,407 | 53,347 | 52,407 | 53,347 | 55,634 | ||||||
Depreciation and Amortization: | |||||||||||
Depreciation and amortization | 2,188 | 2,384 | 2,977 | ||||||||
Corporate and Fiber-based Products | |||||||||||
Income from Continuing Operations Before Provision for Income Taxes: | |||||||||||
Total operating income (loss) | (20,181) | (17,596) | (15,376) | ||||||||
Total Assets: | |||||||||||
Total Assets | $ 10,746 | $ 7,734 | 10,746 | 7,734 | 14,176 | ||||||
Depreciation and Amortization: | |||||||||||
Depreciation and amortization | 625 | 539 | 488 | ||||||||
Capital Expenditures: | |||||||||||
Capital expenditures | 300 | 840 | 1,115 | ||||||||
Corporate and Fiber-based Products | Fiber-based Products | |||||||||||
Revenues by Product Line: | |||||||||||
Revenues | $ 10,815 | $ 11,059 | $ 12,281 |
Earnings per Share - Computatio
Earnings per Share - Computation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Earnings Per Share [Abstract] | |||||||||||
Income from Continuing Operations | $ 7,733 | $ 9,154 | $ 8,311 | $ 6,876 | $ 10,367 | $ 8,647 | $ 8,469 | $ 6,832 | $ 32,074 | $ 34,315 | $ 28,682 |
Income (Loss) from Discontinued Operation | 0 | 3 | 0 | 0 | 18 | (4) | (5) | 65 | 3 | 74 | (23) |
Net Income Attributable to Kadant | $ 7,733 | $ 9,157 | $ 8,311 | $ 6,876 | $ 10,385 | $ 8,643 | $ 8,464 | $ 6,897 | $ 32,077 | $ 34,389 | $ 28,659 |
Basic Weighted Average Shares | 10,869 | 10,867 | 10,988 | ||||||||
Effect of Stock Options, Restricted Stock Units and Employee Stock Purchase Plan | 280 | 227 | 222 | ||||||||
Diluted Weighted Average Shares | 11,149 | 11,094 | 11,210 | ||||||||
Basic EPS: | |||||||||||
Continuing Operations (in dollars per share) | $ 0.71 | $ 0.84 | $ 0.76 | $ 0.64 | $ 0.96 | $ 0.80 | $ 0.77 | $ 0.63 | $ 2.95 | $ 3.16 | $ 2.61 |
Discontinued Operation (in dollars per share) | 0 | 0.01 | 0 | ||||||||
Net Income per Basic Share (in dollars per share) | 0.71 | 0.84 | 0.76 | 0.64 | 0.96 | 0.80 | 0.77 | 0.63 | 2.95 | 3.16 | 2.61 |
Diluted EPS: | |||||||||||
Continuing Operations (in dollars per share) | 0.69 | 0.82 | 0.75 | 0.62 | 0.94 | 0.78 | 0.76 | 0.62 | 2.88 | 3.09 | 2.56 |
Discontinued Operation (in dollars per share) | 0 | 0.01 | 0 | ||||||||
Net Income per Diluted Share (in dollars per share) | $ 0.69 | $ 0.82 | $ 0.75 | $ 0.62 | $ 0.94 | $ 0.78 | $ 0.76 | $ 0.62 | $ 2.88 | $ 3.10 | $ 2.56 |
Earnings per Share - Additional
Earnings per Share - Additional Information (Details) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Restricted stock unit awards | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Amount of antidilutive securities excluded from computation of EPS | 36,700 | 23,100 | 33,000 |
Accumulated Other Comprehensi89
Accumulated Other Comprehensive Items - Components of AOCI on the Balance Sheet (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | $ 267,945 | $ 265,459 | $ 270,421 |
Ending balance | 284,279 | 267,945 | 265,459 |
Foreign Currency Translation Adjustment | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | (27,932) | ||
Other comprehensive loss before reclassifications | (13,162) | ||
Reclassifications from AOCI | 0 | ||
Net current period other comprehensive (loss) income | (13,162) | ||
Ending balance | (41,094) | (27,932) | |
Unrecognized Prior Service Cost | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | (489) | ||
Other comprehensive loss before reclassifications | (3) | ||
Reclassifications from AOCI | 95 | ||
Net current period other comprehensive (loss) income | 92 | ||
Ending balance | (397) | (489) | |
Deferred Loss on Pension and Other Post-Retirement Benefit Plans | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | (8,322) | ||
Other comprehensive loss before reclassifications | (294) | ||
Reclassifications from AOCI | 458 | ||
Net current period other comprehensive (loss) income | 164 | ||
Ending balance | (8,158) | (8,322) | |
Deferred (Loss) Gain on Hedging Instruments | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | (229) | ||
Other comprehensive loss before reclassifications | (170) | ||
Reclassifications from AOCI | 411 | ||
Net current period other comprehensive (loss) income | 241 | ||
Ending balance | 12 | (229) | |
Accumulated Other Comprehensive Items | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | (36,972) | (17,146) | 710 |
Other comprehensive loss before reclassifications | (13,629) | ||
Reclassifications from AOCI | 964 | ||
Net current period other comprehensive (loss) income | (12,665) | ||
Ending balance | $ (49,637) | $ (36,972) | $ (17,146) |
Accumulated Other Comprehensi90
Accumulated Other Comprehensive Items - Reclassification Out of AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | |||
Interest expense | $ (1,293) | $ (948) | $ (966) |
Cost of revenues | (225,737) | (209,982) | (223,754) |
SG&A expenses | (135,753) | (122,814) | (129,319) |
Amortization of prior service costs | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | |||
Total Reclassifications | (95) | ||
Amortization of actuarial losses | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | |||
Total Reclassifications | (458) | ||
Cash Flow Hedges | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | |||
Total Reclassifications | (411) | ||
Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | |||
Total Reclassifications | (964) | 635 | 564 |
Reclassification out of Accumulated Other Comprehensive Income | Amortization of prior service costs | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | |||
SG&A expenses | (147) | (147) | (148) |
Reclassification out of Accumulated Other Comprehensive Income | Amortization of actuarial losses | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | |||
SG&A expenses | (701) | (576) | (352) |
Reclassification out of Accumulated Other Comprehensive Income | Pension and Other Post-retirement Plans | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | |||
Total (expense) income before income taxes | (848) | (723) | (500) |
Income tax benefit (provision) | 295 | 249 | 175 |
Total Reclassifications | (553) | (474) | (325) |
Reclassification out of Accumulated Other Comprehensive Income | Cash Flow Hedges | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | |||
Total (expense) income before income taxes | (374) | 1,259 | 946 |
Income tax benefit (provision) | (37) | (150) | (57) |
Total Reclassifications | (411) | 1,109 | 889 |
Reclassification out of Accumulated Other Comprehensive Income | Cash Flow Hedges | Interest Rate Swap | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | |||
Interest expense | (174) | (420) | (332) |
Reclassification out of Accumulated Other Comprehensive Income | Cash Flow Hedges | Forward Currency-Exchange Contracts | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Items [Line Items] | |||
Revenues | (14) | (12) | 31 |
Cost of revenues | (186) | 0 | 0 |
SG&A expenses | $ 0 | $ 1,691 | $ 1,247 |
Unaudited Quarterly Informati91
Unaudited Quarterly Information - Summary of Quarterly Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Jul. 04, 2015 | Apr. 04, 2015 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 100,241 | $ 105,519 | $ 111,828 | $ 96,538 | $ 107,600 | $ 91,929 | $ 98,327 | $ 92,251 | $ 414,126 | $ 390,107 | $ 402,127 |
Gross Profit | 46,073 | 48,079 | 50,261 | 43,976 | 46,393 | 43,668 | 45,727 | 44,337 | |||
Amounts Attributable to Kadant: | |||||||||||
Income from Continuing Operations | 7,733 | 9,154 | 8,311 | 6,876 | 10,367 | 8,647 | 8,469 | 6,832 | 32,074 | 34,315 | 28,682 |
Income (Loss) from Discontinued Operation | 0 | 3 | 0 | 0 | 18 | (4) | (5) | 65 | 3 | 74 | (23) |
Net Income Attributable to Kadant | $ 7,733 | $ 9,157 | $ 8,311 | $ 6,876 | $ 10,385 | $ 8,643 | $ 8,464 | $ 6,897 | $ 32,077 | $ 34,389 | $ 28,659 |
Basic Earnings per Share: | |||||||||||
Continuing Operations (in dollars per share) | $ 0.71 | $ 0.84 | $ 0.76 | $ 0.64 | $ 0.96 | $ 0.80 | $ 0.77 | $ 0.63 | $ 2.95 | $ 3.16 | $ 2.61 |
Net Income Attributable to Kadant (in dollars per share) | 0.71 | 0.84 | 0.76 | 0.64 | 0.96 | 0.80 | 0.77 | 0.63 | 2.95 | 3.16 | 2.61 |
Earnings Per Share, Diluted [Abstract] | |||||||||||
Continuing Operations (in dollars per share) | 0.69 | 0.82 | 0.75 | 0.62 | 0.94 | 0.78 | 0.76 | 0.62 | 2.88 | 3.09 | 2.56 |
Net Income Attributable to Kadant (in dollars per share) | 0.69 | 0.82 | 0.75 | 0.62 | 0.94 | 0.78 | 0.76 | 0.62 | 2.88 | 3.10 | 2.56 |
Cash Dividends Declared per Common Share (in dollars per share) | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.76 | $ 0.68 | $ 0.60 |
Subsequent Event - (Details)
Subsequent Event - (Details) - Subsequent event - Revolving Credit Facility - 2017 Credit Agreement | Mar. 02, 2017USD ($) |
Subsequent Event [Line Items] | |
Term of debt agreement | 5 years |
Aggregate principal amount | $ 200,000,000 |
Additional borrowing capacity | $ 100,000,000 |
Basis spread on variable rate floor (as a percentage) | 0.00% |
Percentage of foreign unrestricted cash | 65.00% |
Maximum unrestricted cash | $ 30,000,000 |
Maximum consolidated leverage ratio | 3.5 |
Minimum consolidated interest coverage ratio | 3 |
Federal funds rate | |
Subsequent Event [Line Items] | |
Basis spread on variable rate (as a percentage) | 0.50% |
Thirty Day LIBOR | |
Subsequent Event [Line Items] | |
Basis spread on variable rate (as a percentage) | 0.50% |
LIBOR | Minimum | |
Subsequent Event [Line Items] | |
Basis spread on variable rate (as a percentage) | 1.00% |
LIBOR | Maximum | |
Subsequent Event [Line Items] | |
Basis spread on variable rate (as a percentage) | 2.00% |