Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | |
Dec. 30, 2017 | Jul. 01, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-K | |
Amendment Flag | false | |
Document Period End Date | Dec. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | FY | |
Trading Symbol | MASI | |
Entity Registrant Name | MASIMO CORP | |
Entity Central Index Key | 937,556 | |
Current Fiscal Year End Date | --12-30 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Current Reporting Status | No | |
Entity Voluntary Filers | No | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 51,636,352 | |
Market Value of non affiliate stock at end of Q2 | $ 3,844 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 30, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 315,302 | $ 305,970 |
Trade accounts receivable, net of allowance for doubtful accounts of $2,116 and $1,698 at December 30, 2017 and December 31, 2016, respectively | 121,309 | 101,667 |
Inventories | 95,944 | 72,542 |
Prepaid income taxes | 3,494 | 981 |
Other current assets | 28,070 | 26,067 |
Total current assets | 564,119 | 507,227 |
Deferred cost of goods sold | 99,600 | 79,948 |
Property and equipment, net | 164,096 | 135,996 |
Intangible assets, net | 27,123 | 29,376 |
Goodwill | 20,617 | 19,780 |
Deferred income taxes | 23,898 | 38,975 |
Other assets | 10,782 | 9,223 |
Total assets | 910,235 | 820,525 |
Current liabilities | ||
Accounts payable | 33,779 | 34,335 |
Accrued compensation | 39,515 | 43,180 |
Accrued and other liabilities | 38,052 | 28,266 |
Income taxes payable | 4,292 | 76,316 |
Deferred revenue | 35,929 | 38,198 |
Current portion of capital lease obligations | 0 | 71 |
Total current liabilities | 151,567 | 220,366 |
Deferred revenue | 237 | 25,336 |
Other liabilities | 51,520 | 14,587 |
Total liabilities | 203,324 | 260,289 |
Commitments and contingencies (Notes 4 and 17) | ||
Masimo Corporation stockholders’ equity: | ||
Preferred stock, $0.001 par value; 5,000 shares authorized at December 30, 2017 and December 31, 2016; 0 shares issued and outstanding at December 30, 2017 and December 31, 2016 | 0 | 0 |
Common stock, $0.001 par value, 100,000 shares authorized at December 30, 2017 and December 31, 2016; 51,636 and 50,188 shares issued and outstanding at December 30, 2017 and December 31, 2016, respectively | 52 | 50 |
Treasury stock, 15,059 and 14,255 shares at December 30, 2017 and December 31, 2016, respectively | (472,536) | (404,276) |
Additional paid-in capital | 461,494 | 382,263 |
Accumulated other comprehensive loss | (2,941) | (7,027) |
Retained earnings | 720,842 | 589,226 |
Total stockholders’ equity | 706,911 | 560,236 |
Total equity | 706,911 | 560,236 |
Total liabilities and stockholders' equity | $ 910,235 | $ 820,525 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Jan. 02, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 2,116 | $ 1,698 |
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares outstanding | 51,636,000 | 50,188,000 |
Treasury stock, shares | 15,059,000 | 14,255,000 |
CONSOLIDATED STATEMENTS OF OPE
CONSOLIDATED STATEMENTS OF OPERATIONS Statement - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Income Statement [Abstract] | |||||||||||
Product | $ 741,324 | $ 663,846 | $ 599,334 | ||||||||
Royalty and Other Revenue | 56,784 | 30,779 | 30,777 | ||||||||
Royalty and other revenue | 32,800 | ||||||||||
Total revenue | $ 225,181 | $ 193,692 | $ 192,933 | $ 186,302 | $ 183,201 | $ 167,621 | $ 172,636 | $ 171,167 | 798,108 | 694,625 | 630,111 |
Cost of goods sold | 263,008 | 230,826 | 220,128 | ||||||||
Gross profit | 153,864 | 128,665 | 128,437 | 124,134 | 124,329 | 110,122 | 115,135 | 114,213 | 535,100 | 463,799 | 409,983 |
Selling, general and administrative | 275,786 | 253,667 | 252,725 | ||||||||
Research and development | 61,953 | 59,362 | 56,617 | ||||||||
Litigation settlement, award and/or defense costs | 0 | (270,000) | (19,609) | ||||||||
Total operating expenses | 337,739 | 43,029 | 289,733 | ||||||||
Operating income | 59,323 | 47,975 | 46,868 | 43,195 | 310,400 | 36,604 | 36,429 | 37,337 | 197,361 | 420,770 | 120,250 |
Non-operating (income) expense | 2,013 | (2,429) | (3,905) | ||||||||
Income before provision for income taxes | 199,374 | 418,341 | 116,345 | ||||||||
Provision for income taxes | 67,758 | 117,675 | 34,845 | ||||||||
Net income including noncontrolling interest | 131,616 | 300,666 | 81,500 | ||||||||
Net loss attributable to noncontrolling interest | 0 | 0 | (1,800) | ||||||||
Net income | $ 367 | $ 39,235 | $ 46,680 | $ 45,334 | $ 215,293 | $ 27,773 | $ 30,023 | $ 27,577 | $ 131,616 | $ 300,666 | $ 83,300 |
Basic | $ 0.01 | $ 0.75 | $ 0.90 | $ 0.90 | $ 4.31 | $ 0.56 | $ 0.61 | $ 0.56 | $ 2.55 | $ 6.07 | $ 1.62 |
Diluted | $ 0.01 | $ 0.70 | $ 0.83 | $ 0.82 | $ 3.97 | $ 0.52 | $ 0.57 | $ 0.53 | $ 2.36 | $ 5.65 | $ 1.55 |
Basic | 51,516 | 49,530 | 51,311 | ||||||||
Diluted | 55,874 | 53,195 | 53,707 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Income Statement [Abstract] | |||
Net income including noncontrolling interest | $ 131,616 | $ 300,666 | $ 81,500 |
Net income including noncontrolling interest | |||
Foreign currency translation gains (losses) | 4,201 | (2,288) | (2,646) |
Unrealized loss on marketable securities | (115) | 0 | 0 |
Total comprehensive income | 135,702 | 298,378 | 78,854 |
Comprehensive loss attributable to noncontrolling interest | 0 | 0 | (1,800) |
Comprehensive income | $ 135,702 | $ 298,378 | $ 80,654 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Noncontrolling Interest |
Beginning Balance at Jan. 03, 2015 | $ 307,741 | $ 52 | $ (185,906) | $ 288,686 | $ (2,093) | $ 205,260 | $ 1,742 |
Beginning Balance, shares at Jan. 03, 2015 | 52,594 | 8,611 | |||||
Stock options exercised | 28,326 | $ 2 | 28,324 | ||||
Adjustments Related to Tax Withholding for Share-based Compensation | $ (472) | (472) | |||||
Stock options exercised, shares | 1,450 | 1,435 | |||||
Income tax benefit from exercise of stock options | $ 5,058 | 5,058 | |||||
Total share-based compensation expense | 10,825 | ||||||
Stock-based compensation | 10,825 | 10,817 | 8 | ||||
Repurchases of common stock | (154,967) | $ (4) | $ (154,967) | 4 | |||
Noncontrolling Interest, Increase from Subsidiary Equity Issuance | 347 | 347 | |||||
Net Income (Loss) Attributable to Parent | $ 83,300 | 83,300 | |||||
Repurchases of common stock, shares | (4,148) | (4,148) | (4,148) | ||||
Net income | $ 81,500 | (1,800) | |||||
Foreign currency translation adjustment, before tax | (2,646) | (2,646) | |||||
Ending Balance at Jan. 02, 2016 | 275,712 | $ 50 | $ (340,873) | 332,417 | (4,739) | 288,560 | 297 |
Ending Balance, shares at Jan. 02, 2016 | 49,881 | 12,759 | |||||
Stock options exercised | $ 37,342 | 37,342 | |||||
Stock options exercised, shares | 1,799 | 1,799 | |||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 4 | ||||||
Total share-based compensation expense | 12,503 | ||||||
Stock-based compensation | $ 12,503 | ||||||
Repurchases of common stock | (63,402) | $ (63,403) | 1 | ||||
Net Income (Loss) Attributable to Parent | 300,666 | 300,666 | |||||
Noncontrolling Interest, Decrease from Deconsolidation | $ (297) | (297) | |||||
Repurchases of common stock, shares | (1,496) | (1,496) | (1,496) | ||||
Net income | $ 300,666 | ||||||
Foreign currency translation adjustment, before tax | (2,288) | (2,288) | |||||
Ending Balance at Dec. 31, 2016 | 560,236 | $ 50 | $ (404,276) | 382,263 | (7,027) | 589,226 | 0 |
Ending Balance, shares at Dec. 31, 2016 | 50,188 | 14,255 | |||||
Stock options exercised | $ 62,046 | $ 2 | 62,044 | ||||
Stock options exercised, shares | 2,246 | 2,246 | |||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 6 | ||||||
Total share-based compensation expense | 17,187 | ||||||
Stock-based compensation | $ 17,187 | ||||||
Repurchases of common stock | (68,260) | $ (68,260) | |||||
Net Income (Loss) Attributable to Parent | $ 131,616 | ||||||
Repurchases of common stock, shares | (804) | (804) | (804) | ||||
Net income | $ 131,616 | ||||||
Foreign currency translation adjustment, before tax | 4,201 | 4,201 | |||||
Ending Balance at Dec. 30, 2017 | 706,911 | $ 52 | $ (472,536) | $ 461,494 | (2,941) | $ 720,842 | $ 0 |
Ending Balance, shares at Dec. 30, 2017 | 51,636 | 15,059 | |||||
Unrealized loss on marketable securities | $ (115) | $ (115) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Cash flows from operating activities: | |||
Net income including noncontrolling interest | $ 131,616 | $ 300,666 | $ 81,500 |
Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities: | |||
Depreciation and amortization | 20,061 | 16,817 | 15,684 |
Stock-based compensation | 17,187 | 12,503 | 10,825 |
Loss on disposal of property, equipment and intangibles | 522 | 658 | 608 |
Provision for doubtful accounts | 251 | 259 | 342 |
Provision for amount due from former foreign agent | 10,477 | 0 | 0 |
Gain on deconsolidation of variable interest entity | 0 | (273) | 0 |
Benefit from deferred income taxes | 24,023 | 5,405 | (1,974) |
Changes in operating assets and liabilities: | |||
Increase in trade accounts receivable | (19,772) | (21,243) | (9,900) |
(Increase) decrease in inventories | (22,923) | (10,831) | 7,505 |
Increase in deferred cost of goods sold | (19,438) | (8,251) | (78) |
Increase in prepaid expenses | (3,855) | (3,422) | (135) |
(Increase) decrease in prepaid income taxes | (2,498) | 1,355 | (1,992) |
Increase in other assets | (10,952) | (1,609) | (2,883) |
(Decrease) increase in accounts payable | (4,057) | 11,048 | (3,619) |
(Decrease) increase in accrued compensation | (4,292) | 5,675 | 5,334 |
(Decrease) increase in accrued and other current liabilities | 11,156 | (11,929) | 19,202 |
Increase in income taxes payable | (72,087) | 73,755 | 1,316 |
Increase in deferred revenue | (27,370) | 41,977 | 58 |
Increase (decrease) in other liabilities | 28,013 | 6,565 | (4,587) |
Net cash provided by operating activities | 56,062 | 419,125 | 117,206 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (43,684) | (19,707) | (50,393) |
Increase in intangible assets | (3,079) | (4,644) | (4,201) |
Acquisition of long-term equity investments | (1,145) | (200) | 0 |
Reduction in cash resulting from deconsolidation of variable interest entity | 0 | (763) | 0 |
Net cash used in investing activities | (47,908) | (25,314) | (54,594) |
Cash flows from financing activities: | |||
Borrowings under revolving line of credit | 0 | 45,000 | 130,000 |
Repayments under revolving line of credit | 0 | 230,000 | 70,000 |
Debt issuance costs | 0 | 621 | 0 |
Repayments on capital lease obligations | (71) | (75) | (80) |
Proceeds from issuance of common stock | 62,205 | 37,290 | 28,285 |
Payroll tax withholdings on behalf of employee for stock options | 0 | 0 | (472) |
Repurchases of common stock | (66,272) | (68,218) | (150,152) |
Net equity issuances (repurchases) by noncontrolling interest | 0 | 0 | 346 |
Net cash (used in) provided by financing activities | (4,138) | (216,624) | (62,073) |
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 3,269 | (1,451) | (2,681) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 7,285 | 175,736 | (2,142) |
Cash, cash equivalents and restricted cash at end of period | 315,302 | 305,970 | 132,317 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 315,483 | $ 308,198 | $ 132,462 |
Description of the Company
Description of the Company | 12 Months Ended |
Dec. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Company | Description of the Company Masimo Corporation (the Company), is a global medical technology company that develops, manufactures and markets a variety of noninvasive monitoring technologies. The Company’s mission is to improve patient outcomes and reduce the cost of care. The Company’s patient monitoring solutions generally incorporate a monitor or circuit board, proprietary single-patient-use, reusable or resposable sensors, software and/or cables. The Company primarily sells its products to hospitals, emergency medical service (EMS) providers, home care providers, physician offices, veterinarians, long-term care facilities and consumers through its direct sales force, distributors and original equipment manufacturer (OEM) partners. The Company invented Masimo Signal Extraction Technology ® (SET ® ), which provides the capabilities of Measure-through Motion and Low Perfusion ® pulse oximetry to address the primary limitations of conventional pulse oximetry. Over the years, the Company’s product offerings have expanded significantly to also include rainbow ® Pulse CO-Oximetry, with its ability to measure and monitor carboxyhemoglobin (SpCO ® ), methemoglobin (SpMet ® ), total hemoglobin concentration (SpHb ® ), fractional arterial oxygen saturation (SpfO 2 ™ ), Oxygen Content (SpOC ™ ), Pleth Variability Index (PVi ® ), rainbow ® Pleth Variability Index (RPVi ™ ), respiration rate from the pleth (RRp ® and Oxygen Reserve Index (ORi ™ ); acoustic respiration monitoring (RRa ® ), electrical brain function monitoring (SedLine ® ), and optical gas monitoring. The Company also developed the Root ™ patient monitoring and connectivity platform and the Masimo Patient SafetyNet remote patient surveillance monitoring system. These solutions and related products are based upon Masimo SET ® , rainbow ® and other proprietary algorithms. These software-based technologies are incorporated into a variety of product platforms depending on customers’ specifications. This technology is supported by a substantial intellectual property portfolio that the Company has built through internal development and, to a lesser extent, acquisitions and license agreements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), and include the accounts of the Company, its wholly-owned subsidiaries and variable interest entities (VIEs) in which the Company is the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation. Fiscal Periods The Company follows a conventional 52/53 week fiscal year. Under a conventional 52/53 week fiscal year, a 52 week fiscal year includes four quarters of 13 weeks while a 53 week fiscal year includes three quarters of 13 weeks and one quarter of 14 weeks. The Company’s last 53 week fiscal year was fiscal year 2014. Fiscal years 2015, 2016 and 2017 were 52 week fiscal years. All references to years in these notes to consolidated financial statements are fiscal years unless otherwise noted. Use of Estimates The Company prepares its financial statements in conformity with GAAP, which requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include the determination of accounts receivable allowances, inventory reserves, warranty reserves, rebate accruals, valuation of the Company’s stock awards, goodwill valuation, deferred taxes and any associated valuation allowances, tax impact of the distributor channel inventory, royalty revenues, deferred revenue, uncertain income tax positions, litigation costs and loss contingency accruals. In addition, for the year ended December 30, 2017 , certain estimates were made in calculating the provision for income taxes related to the impact of the Tax Cuts and Jobs Act of 2017 (2017 Tax Act) that was signed into law on December 22, 2017. Actual results could differ from the Company’s estimates. Reclassifications Certain amounts in the consolidated financial statements for prior periods have been reclassified to conform to current period presentation. Fair Value Measurements Authoritative guidance describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value: • Level 1 - Quoted prices in active markets for identical assets or liabilities. • Level 2 - Inputs other than level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Pursuant to current authoritative guidance, entities are allowed an irrevocable option to elect fair value for the initial and subsequent measurement for specified financial assets and liabilities on a contract-by-contract basis. The Company did not elect the fair value option under this guidance as to specific assets or liabilities. There were no transfers between level 1, level 2 and level 3 inputs during the years ended December 30, 2017 or December 31, 2016 . The Company carries cash and cash equivalents at cost which approximates fair value. As of December 30, 2017 and December 31, 2016 , the Company had an insignificant amount of other financial assets that were required to be measured under the fair value hierarchy, the measurement of which were based on level 1 and level 2 inputs. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity from date of purchase of three months or less, or highly liquid investments that are readily convertible into known amounts of cash, to be cash equivalents. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable consist of trade receivables recorded upon recognition of revenue for product revenues, reduced by reserves for estimated bad debts and returns. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Credit is extended based on evaluation of the customer’s financial condition. Collateral is not required. The allowance for doubtful accounts is determined based on historical write-off experience, current customer information and other relevant factors, including specific identification of past due accounts, based on the age of the receivable in excess of the contemplated or contractual due date. Accounts are charged off against the allowance when the Company believes they are uncollectible. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined using a standard cost method, which approximates FIFO (first in, first out) and includes material, labor and overhead. Inventory reserves are recorded for inventory items that have become excess or obsolete or are no longer used in current production and for inventory that has a market price less than the carrying value in inventory. Property and Equipment Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over estimated useful lives as follows: Useful Lives Aircraft and components 10 to 20 years Buildings 39 years Building improvements 7 to 15 years Computer equipment 2 to 6 years Demonstration units 3 years Furniture and office equipment 2 to 6 years Leasehold improvements Lesser of useful life or term of lease Machinery and equipment 5 to 7 years Vehicles 5 years Tooling 3 years Land is not depreciated and construction in progress is not depreciated until placed in service. Normal repair and maintenance costs are expensed as incurred, whereas significant improvements that materially increase values or extend useful lives are capitalized and depreciated over the remaining estimated useful lives of the related assets. Upon sale or retirement of depreciable assets, the related cost and accumulated depreciation or amortization are removed from the accounts and any gain or loss on the sale or retirement is recognized in income. For the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , depreciation and amortization expense of property and equipment was $15.2 million , $13.0 million and $11.8 million , respectively. Intangible Assets Intangible assets consist primarily of patents, trademarks, software development costs, customer relationships and acquired technology. Costs related to patents and trademarks, which include legal and application fees, are capitalized and amortized over the estimated useful lives using the straight-line method. Patent and trademark amortization commences once final approval of the patent or trademark has been obtained. Patent costs are amortized over the lesser of 10 years or the patent’s remaining legal life, which assumes renewals, and trademark costs are amortized over 17 years, and their associated amortization cost is included in selling, general and administrative expense in the accompanying consolidated statements of operations. For intangibles purchased in an asset acquisition or business combination, which mainly include patents, trademarks, customer relationships and acquired technology, the useful life is determined in the same manner as noted above. For the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , amortization of intangible assets was $4.9 million , $3.8 million and $4.2 million , respectively. As of December 30, 2017 and December 31, 2016 , the total costs of patents not yet amortizing was $4.3 million and $5.0 million , respectively. As of each of December 30, 2017 and December 31, 2016 , the total costs of trademarks not yet amortizing was $0.6 million . For the years ended December 30, 2017 and December 31, 2016 , total renewal costs capitalized for patents and trademarks was $0.2 million and $0.6 million , respectively. As of December 30, 2017 , the weighted-average number of years until the next renewal was one year for patents and six years for trademarks. The Company’s policy is to renew its patents and trademarks. Costs to renew intangibles are capitalized and amortized over the remaining useful life of the intangible. The Company continually evaluates the amortization period and carrying basis of patents and trademarks to determine whether any events or circumstances warrant a revised estimated useful life or reduction in value. Capitalized application costs are charged to operations when it is determined that the patent or trademark will not be obtained or is abandoned. In accordance with authoritative accounting guidance, costs related to the research and development of new software products and enhancements to existing software products are expensed as incurred until technological feasibility of the product has been established, at which time such costs are capitalized, subject to expected recoverability. For the years ended December 30, 2017 and December 31, 2016 , the Company did not capitalize any software development costs. For the year ended January 2, 2016 , the Company capitalized $0.5 million of software development costs. The capitalized costs are amortized over the estimated life of the products, which is generally seven years. For the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , the Company amortized $1.9 million , 0.1 million and $0.2 million of capitalized costs, respectively. The Company had unamortized software development costs of $0.8 million and $0.7 million at December 30, 2017 and December 31, 2016 , respectively, which is included within intangible assets, net, on the consolidated balance sheets. Impairment of Goodwill and Intangible assets Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the acquired net tangible and intangible assets. Goodwill is not amortized, but instead is tested at least annually for impairment, or more frequently when events or changes in circumstances indicate that goodwill might be impaired. In assessing goodwill impairment for each of its reporting units, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company’s qualitative assessment of the recoverability of goodwill considers various macroeconomic, industry-specific and company-specific factors, including: (i) severe adverse industry or economic trends; (ii) significant company-specific actions; (iii) current, historical or projected deterioration of the Company’s financial performance; or (iv) a sustained decrease in the Company’s market capitalization below its net book value. If, after assessing the totality of events or circumstances, the Company determines it is unlikely that the fair value of a reporting unit is less than its carrying amount, then a quantitative analysis is unnecessary. However, if the Company concludes otherwise, or if the Company elects to bypass the qualitative analysis, then the Company must perform a quantitative analysis that compares the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered impaired; otherwise, a goodwill impairment loss is recognized for the lesser of: (a) the amount that the carrying amount of a reporting unit exceeds its fair value; or (b) the amount of the goodwill allocated to that reporting unit. The Company performs its annual impairment test during the fourth fiscal quarter. The Company reviews identifiable intangible and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted operating cash flow expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount exceeds the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. During the year ended December 30, 2017 , the Company recorded an impairment charge of approximately $0.4 million related to certain software licenses that had not been placed in service. No impairment of goodwill, intangible assets or other long-lived assets was recorded during the years ended December 31, 2016 or January 2, 2016 . Income Taxes The Company accounts for income taxes using the asset and liability method, under which the Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for net operating loss and tax credit carryforwards. Tax positions that meet a more-likely-than-not recognition threshold are recognized in the first reporting period that it becomes more-likely-than-not such tax position will be sustained upon examination. A tax position that meets this more-likely-than-not recognition threshold is recorded at the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Previously recognized income tax positions that fail to meet the recognition threshold in a subsequent period are derecognized in that period. Differences between actual results and the Company’s assumptions, or changes in the Company’s assumptions in future periods, are recorded in the period they become known. The Company records potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. As a multinational corporation, the Company is subject to complex tax laws and regulations in various jurisdictions. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws themselves are subject to change as a result of changes in fiscal policy, changes in legislation, evolution of regulations and court rulings. Therefore, the actual liability for U.S. or foreign taxes may be materially different from the Company’s estimates, which could result in the need to record additional liabilities or potentially to reverse previously recorded tax liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. A valuation allowance is recorded against any deferred tax assets when, in the judgment of management, it is more likely than not that all or part of a deferred tax asset will not be realized. In assessing the need for a valuation allowance, the Company considers all positive and negative evidence, including recent financial performance, scheduled reversals of temporary differences, projected future taxable income, availability of taxable income in carryback periods and tax planning strategies. The 2017 Tax Act included a number of changes to existing tax law impacting businesses including, among other things, a permanent reduction in the corporate income tax rate from 35% to 21%, a one-time transition tax on the “deemed repatriation” of cumulative undistributed foreign earnings as of December 31, 2017 and changes in the prospective taxation of the foreign operations of U.S. multinational companies. See Note 16 - Income Taxes for additional information related to the impact of the 2017 Tax Act on our tax provision, taxes payable and deferred taxes for the year ended December 30, 2017 . Revenue Recognition and Deferred Revenue The Company follows the current authoritative guidance for revenue recognition. Based on these requirements, the Company recognizes revenue from the sale of products or services when: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the price is fixed or determinable, and (iv) collectability is reasonably assured. In the case of the license or sale of software that does not function together with hardware components to provide the essential functionality of the hardware, revenue is recognized pursuant to the software revenue recognition guidance. The Company derives the majority of its revenue from four primary sources: (i) direct sales under long-term sensor purchase agreements with end-user hospitals where the Company provides up-front monitoring equipment at no up-front charge in exchange for a multi-year sensor purchase commitment, (ii) other direct sales of noninvasive monitoring solutions to end-user hospitals, emergency medical response organizations and other direct customers; (iii) sales of noninvasive monitoring solutions to distributors who then typically resell to end-user hospitals, emergency medical response organizations and other direct customers; and (iv) sales of integrated circuit boards to OEM customers who incorporate the Company’s embedded software technology into their multiparameter monitoring devices. The Company enters into agreements to sell its noninvasive monitoring solutions and services, sometimes as part of multiple deliverable arrangements that include various combinations of products and services. While the majority of the Company’s sales transactions contain standard business terms and conditions, there are some transactions that contain non-standard business terms and conditions. As a result, contract interpretation and analysis is sometimes required to determine the appropriate accounting, including: (i) how the arrangement consideration should be allocated among the deliverables when multiple deliverables exist, (ii) when to recognize revenue on the deliverables, and (iii) whether undelivered elements are essential to the functionality of the delivered elements. Changes in judgments on these assumptions and estimates could materially impact the timing of revenue recognition. In the case of multiple deliverable arrangements, the authoritative guidance provides a hierarchy to determine the selling price to be used for allocating revenue to deliverables as follows: (i) vendor-specific objective evidence (VSOE) of fair value, (ii) third-party evidence of selling price (TPE), and (iii) best estimate of the selling price (ESP). VSOE of fair value is defined as the price charged when the same element is sold separately. VSOE generally exists only when the deliverable is sold separately and is the price actually charged for that deliverable. TPE generally does not exist for the majority of the Company’s products. The objective of ESP is to determine the price at which the Company would transact a sale if the product was sold on a stand-alone basis. In the absence of VSOE and TPE, the Company determines ESP for its products by considering multiple factors including, but not limited to, features and functionality of the product, geographies, type of customer, contractual prices pursuant to Group Purchasing Organization (GPO) contracts, the Company’s pricing and discount practices, and market conditions. A deliverable in an arrangement qualifies as a separate unit of accounting if the delivered item has value to the customer on a stand-alone basis. Most of the Company’s products in a multiple deliverable arrangement qualify as separate units of accounting. In the case of the Company’s monitoring equipment containing embedded Masimo SET ® or rainbow SET ™ software, the Company has determined that the hardware and software components function together to deliver the equipment’s essential functionality and, therefore, represent a single deliverable. However, software deliverables, such as rainbow ® parameter software, which do not function together with hardware components to provide the equipment’s essential functionality, are accounted for under software revenue recognition guidance. The revenue for these multiple-element arrangements is allocated to the software deliverables and the non-software deliverables based on the relative selling prices of all of the deliverables in the arrangement using the hierarchy in the revenue recognition accounting guidance for arrangements with multiple deliverables. Sales under long-term sensor purchase contracts are generally structured such that the Company agrees to provide at no up-front charge certain monitoring-related equipment, software, installation, training and/or warranty support in exchange for the hospital’s agreement to purchase sensors over the term of the agreement, which generally ranges from three to six years. These contracts generally do not provide for any payments that are not dependent upon the Company’s future delivery of sensors, which are essential to the functionality of the monitoring equipment and, therefore, represent a substantive performance obligation. As a result, the Company generally does not recognize any revenue when the monitoring and related equipment and software are delivered to the hospitals, but rather recognizes revenue for these delivered elements on a pro-rata basis as the sensors are delivered under the long-term purchase commitment, when installation and training are complete. Accordingly, the cost of the monitoring and related equipment initially placed at the hospitals is deferred and amortized to cost of goods sold over the life of the underlying long-term sensor purchase contract. In cases where such contracts do provide for guaranteed payments that are unrelated to the future delivery of sensors, the Company recognizes the net present value of such payments as revenue from the monitoring and related equipment and expenses the cost of such equipment to cost of goods sold, as the equipment is delivered and when installation and training are complete. Some of the Company’s long-term sensor contracts also contain provisions for certain payments to be made directly to the end-user hospital customer at the inception of the arrangement. These payments are generally treated as prepaid discounts which are deferred and amortized on a straight-line basis as contra-revenue over the life of the underlying long-term sensor purchase contract. Many of the Company’s distributors purchase sensor products that they then resell to end-user hospitals that are typically fulfilling their purchase obligations to the Company under such end-user hospital’s long-term sensor purchase commitments. Upon shipment to the distributor, revenue is deferred until the distributor ships the product to the Company’s end-user customers based on an estimate of the inventory held by these distributors at the end of the accounting period. The Company also earns revenue from the sale of integrated circuit boards and other products, as well as from rainbow ® parameter software licenses, to OEMs under various agreements. Revenue from the sale of products to the OEMs is generally recognized at the time of shipment. Revenue related to software licenses to OEMs is generally recognized upon shipment of the OEM’s product to its customers, as represented to the Company by the OEM. The Company also provides certain customers with the ability to purchase sensors under rebate programs. Under these programs, the customers may earn rebates based on their purchasing activity. The Company estimates and provides allowances for these programs at the time of sale as a reduction to revenue. In general, customers do not have a right of return for credit or refund. However, the Company allows returns under certain circumstances. At the end of each period, the Company estimates and accrues for these returns as a reduction to revenue and accounts receivable. The Company estimates returns based on several factors, including contractual limitations and past returns history. The majority of the Company’s royalty revenue arises from one agreement with Medtronic plc (Medtronic, formerly Covidien Ltd.) and is due and payable quarterly based on U.S. sales of certain Medtronic products. An estimate of these royalty revenues is recorded quarterly in the period earned based on the prior quarter’s historical results, adjusted for any new information or trends known to management at the time of estimation. This estimated revenue is adjusted prospectively when the Company receives the Medtronic royalty report, approximately sixty days after the end of the previous quarter. The Company also recognizes revenue upon the achievement of pre-agreed milestones related to non-recurring engineering (NRE) services provided for a certain OEM customer. Costs incurred by the Company related to these NRE services are generally deferred until such time that the milestones are achieved and the associated revenue is recognized. Taxes Collected From Customers and Remitted to Governmental Authorities Pursuant to authoritative guidance, the Company’s policy is to present revenue net of taxes collected from customers and remitted to governmental authorities. Stock-based Compensation The Company’s stock-based compensation awards are currently comprised of stock options, restricted stock units (RSUs) and performance share units (PSUs), all of which are equity-classified awards. For equity-classified awards granted on or after January 1, 2006, the Company estimates the fair value of the award on the date of grant and expenses stock-based compensation over the requisite service period. In the case of PSUs, the amount of expense recognized is also dependent upon the expected achievement level for the specified performance criteria. The fair value of RSU and PSU awards is the closing price of the Company’s common stock on the grant date. The fair value of stock option awards is calculated using the Black-Scholes option pricing model, which, in addition to taking into account the closing price of the Company’s common stock on the grant date and the option exercise price, requires the input of subjective assumptions. These assumptions include estimating the length of time employees will retain their stock options before exercising them, the estimated volatility of the Company’s stock price over the expected term and the number of options that will ultimately be forfeited prior to meeting their vesting requirements. The Company has elected to recognize stock-based compensation expense related to stock options on a straight-line basis over the requisite service period. Shipping and Handling Costs and Revenue All shipping and handling costs are expensed as incurred and are recorded as a component of cost of goods sold in the accompanying consolidated statements of operations. Charges for shipping and handling billed to customers are included as a component of product revenue in accordance with authoritative accounting guidance. Product Warranty The Company provides a warranty against defects in material and workmanship for a period ranging from six months to forty-eight months, depending on the product type. In the case of long-term sales agreements, the Company typically warranties the products for the term of the agreement, which ranges from three to six years. In traditional sales activities, including direct and OEM sales, the Company establishes an accrual for the estimated costs of warranty at the time of revenue recognition. Estimated warranty expenses are recorded as an accrued liability, with a corresponding provision to cost of goods sold. Revenue related to extended warranty coverage is recognized over the life of the contract and the related extended warranty costs are expensed as incurred. Changes in the product warranty accrual were as follows (in thousands): Year Ended December 30, December 31, January 2, Warranty accrual, beginning of period $ 910 $ 1,222 $ 1,416 Accrual for warranties issued (including specific accrual) 1,061 871 800 Changes in pre-existing warranties (including changes in estimates) 332 110 61 Settlements made (1,154 ) (1,293 ) (1,055 ) Warranty accrual, end of period $ 1,149 $ 910 $ 1,222 Advertising Costs Advertising costs are expensed as incurred. These costs are included in selling, general and administrative expense in the accompanying consolidated statements of operations. Advertising costs for the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 were $12.8 million , $11.0 million and $10.7 million , respectively. Research and Development Costs related to research and development activities are expensed as incurred. These costs include personnel costs, materials, depreciation and amortization on associated tangible and intangible assets and an allocation of facility costs, all of which are directly related to research and development activities. Litigation Costs and Contingencies The Company records a charge equal to at least the minimum estimated liability for a loss contingency or litigation settlement when both of the following conditions are met: (i) information available prior to issuance of the financial statements indicates that it is probable that a liability had been incurred at the date of the financial statements, and (ii) the range of loss can be reasonably estimated. The determination of whether a loss contingency or litigation settlement is probable or reasonably possible involves a significant amount of management judgment, as does the estimation of the range of loss given the nature of contingencies. Liabilities related to litigation settlements with multiple elements are recorded based on the fair value of each element. Legal and other litigation related expenses are recognized as the services are provided. The Company records insurance and other indemnity recoveries for litigation expenses when both of the following conditions are met: (a) the recovery is probable, and (b) collectability is reasonably assured. Insurance recoveries are only recorded to the extent the litigation costs to which they relate have been incurred and recognized in the financial statements. On November 5, 2016, the Company entered into a settlement agreement (Philips Settlement Agreement) with Koninklijke Philips N.V. (Philips N.V.), which, among other things, settled all of the claims, legal proceedings and contractual disputes between the Company, Philips N.V. and its affiliates. Pursuant to the Philips Settlement Agreement, Philips N.V. paid us $300 million , $30 million of which related to certain future performance obligations by the Company and, therefore, was deferred to future periods in accordance with authoritative accounting guidance. See Note 17 - Commitments and Contingencies under the caption “ Litigation ” for additional information on this matter. Foreign Currency Translation The Company’s international headquarters is in Switzerland, and its functional currency is the U.S. Dollar. The Company has several foreign sales support subsidiaries that maintain foreign offices, of which the largest are in Japan and Europe. The functional currencies of these subsidiaries are the Japanese Yen and Euro, respectively. The Company transacts with foreign customers in currencies other than the U.S. Dollar and, in doing so, experiences realized and unrealized foreign currency gains or losses on its foreign denominated receivables. In addition, certain intercompany transactions give rise to realized and unrealized foreign currency gains or losses. Also, any other transactions between the Company or its subsidiaries and a third-party, denominated in a currency different from the functional currency, are foreign currency transactions. Realized and unrealized foreign currency gains or losses are included as a component of non-operating (income) expense within the Company’s consolidated statements of operations as incurred and are converted to U.S. Dollars at average exchange rates for the respective period. These transactions resulted in losses of $0.3 million for the year ended December 30, 2017 , gains of approximately $0.1 million for the year ended December 31, 2016 and losses of approximately $0.5 million for t |
Variable Interest Entities (VIE
Variable Interest Entities (VIEs) | 12 Months Ended |
Dec. 30, 2017 | |
Variable Interest Entity [Abstract] | |
Variable Interest Entities (VIEs) | Variable Interest Entity (VIE) The Company follows authoritative guidance for the consolidation of its VIE, which requires an enterprise to determine whether its variable interest gives it a controlling financial interest in a VIE. Determination about whether an enterprise should consolidate a VIE is required to be evaluated continuously as changes to existing relationships or future transactions may result in consolidating or deconsolidating the VIE. Changes in the noncontrolling interest for the consolidated VIE for each period are presented in the accompanying consolidated statements of equity. Cercacor Laboratories, Inc. (Cercacor) Cercacor is an independent entity spun off from the Company to its stockholders in 1998. Joe Kiani, the Company’s Chairman and Chief Executive Officer, is also the Chairman and Chief Executive Officer of Cercacor. The Company is a party to a Cross-Licensing Agreement with Cercacor, which was most recently amended and restated effective January 1, 2007 (the Cross-Licensing Agreement), that governs each party’s rights to certain intellectual property held by the two companies. In addition, the Company has also entered into an administrative services agreement with Cercacor that governs certain general and administrative services the Company provides to Cercacor; a consulting services agreement with Cercacor that governs certain engineering consulting and clinical studies support services that Cercacor may provide to the Company from time-to-time and a sublease agreement with Cercacor for approximately 16,830 square feet of excess office and laboratory space located at 40 Parker, Irvine, California. See Note 4 to these consolidated financial statements for additional information on these agreements and other transactions with Cercacor. As a result of changes in the capital structure of Cercacor, as well as certain of its contractual relationships with the Company, the Company completed a re-evaluation of the authoritative consolidation guidance during the first quarter of 2016 and determined that although Cercacor remains a VIE, the Company is no longer its primary beneficiary as it can no longer be deemed to have the power to direct the activities of Cercacor that most significantly impact Cercacor’s economic performance and can no longer be deemed to have an obligation to absorb Cercacor’s losses pursuant to the Company’s on-going contractual relationships with Cercacor. Based on such determination, the Company discontinued consolidating Cercacor within its consolidated financial statements effective as of January 3, 2016. However, Cercacor continues to be a related party following its deconsolidation. The Company recognized a gain of $0.3 million upon such deconsolidation, which was reported within non-operating income in the consolidated statement of operations. Cercacor continues to be included within these consolidated financial statements for the period ended January 2, 2016. Accordingly, for such period, all intercompany royalties, option and license fees and other charges between the Company and Cercacor, as well as all intercompany payables and receivables, have been eliminated in consolidation. However, all direct operating expenses that were incurred by the Company and charged to Cercacor, or that were incurred by Cercacor and charged to the Company, have not been eliminated and are included within operating expenses in the Company’s consolidated statements of operations for such period. The consolidating statement of operations for the year ended January 2, 2016 reflecting the Company, Cercacor and related eliminations (in thousands) are as follows: Year ended Consolidating Statements of Operations: Masimo Cercacor Cercacor Total Total revenue $ 630,111 $ 6,910 $ (6,910 ) $ 630,111 Cost of goods sold 226,788 — (6,660 ) 220,128 Gross profit 403,323 6,910 (250 ) 409,983 Operating expenses: Selling, general and administrative 250,627 2,348 (250 ) 252,725 Research and development 50,292 6,325 — 56,617 Litigation settlement, award and/or defense costs (19,609 ) — — (19,609 ) Total operating expenses 281,310 8,673 (250 ) 289,733 Operating income (loss) 122,013 (1,763 ) — 120,250 Non-operating expense (income) 3,910 (571 ) 566 3,905 Income (loss) before provision for income taxes 118,103 (1,192 ) (566 ) 116,345 Provision for income taxes 34,803 42 — 34,845 Net income (loss) including noncontrolling interests 83,300 (1,234 ) (566 ) 81,500 Net income (loss) attributable to noncontrolling interests — — (1,800 ) (1,800 ) Net income (loss) attributable to Masimo Corporation stockholders $ 83,300 $ (1,234 ) $ 1,234 $ 83,300 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions In August 2017, the Company entered into an aircraft time share agreement, pursuant to which the Company has agreed from time to time to make its aircraft available to the CEO for lease on a time sharing basis. The Company charges the CEO for personal use based on agreed upon reimbursement rates. For the year ended December 30, 2017 , the Company charged the CEO less than $20,000 related to such reimbursements. The Company’s Chairman and CEO is also the Chairman and CEO of Cercacor. The Company is a party to the following agreements and transactions with Cercacor: • Cross-Licensing Agreement - The Company and Cercacor are parties to the Cross-Licensing Agreement, which governs each party’s rights to certain intellectual property held by the parties. The Company is subject to certain annual minimum aggregate royalty obligations for use of the rainbow ® licensed technology. The current annual minimum royalty obligation is $5.0 million . Actual aggregate royalties accrued for Cercacor under the license were $8.0 million , $6.4 million and $6.7 million for the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , respectively. All amounts prior to the deconsolidation of Cercacor on January 3, 2016 were eliminated in consolidation. The Company had less than $0.1 million in sales to Cercacor for each of the years ended December 30, 2017 and December 31, 2016 and no sales to Cercacor for the year ended January 2, 2016 . • Administrative Services Agreement - The Company is a party to an administrative services agreement with Cercacor (G&A Services Agreement), which governs certain general and administrative services that the Company provides to Cercacor. Amounts charged by the Company pursuant to the G&A Services Agreement were $0.2 million for each of the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 . • Patent Transfer and Licensing Agreement. The Company entered into a patent transfer and licensing agreement with Cercacor (the Patent Agreement) effective July 2015, pursuant to which, among other things, it purchased certain patents from Cercacor (the Purchased Patents) for an aggregate purchase price of $2.4 million . Pursuant to the Patent Agreement, the Company granted Cercacor an irrevocable, non-exclusive, worldwide license with respect to the products and services covered by the Purchased Patents. • Sublease Agreement - In March 2016, the Company entered into a sublease agreement with Cercacor for approximately 16,830 square feet of excess office and laboratory space located at 40 Parker, Irvine, California (Cercacor Sublease). The Cercacor Sublease began on May 1, 2016 and expires on November 30, 2019. The Company recognized $0.4 million and $0.3 million of sublease income for the years ended December 30, 2017 and December 31, 2016 , respectively. Net amounts due from Cercacor were approximately $1.5 million and $0.5 million as of December 30, 2017 and December 31, 2016 , respectively. The Company’s Chief Executive Officer is also the Chairman and one of his family members is a Director of the Masimo Foundation for Ethics, Innovation and Competition in Healthcare (Masimo Foundation), a non-profit organization which was founded in 2010 to provide a platform for encouraging ethics, innovation and competition in healthcare. In addition, the Company’s Executive Vice President (EVP) and General Counsel is a Director and also serves as the Secretary and Treasurer of the Masimo Foundation. For the fiscal year ended December 30, 2017 , the Company made no contributions to the Masimo Foundation. During the fiscal years ended December 31, 2016 and January 2, 2016 , the Company contributed approximately $5.0 million and $6.3 million , respectively, to the Masimo Foundation. A portion of the Company’s contributions to the Masimo Foundation were, in turn, contributed by the Masimo Foundation to the Patient Safety Movement Foundation. The Company’s Chief Executive Officer is also the Chairman of the Patient Safety Movement Foundation, a non-profit organization which was founded in 2013 to work with hospitals, medical technology companies and patient advocates to unite the healthcare ecosystem and eliminate the more than 200,000 U.S. preventable hospital deaths that occur every year by 2020. The Company’s EVP and General Counsel and the Company’s EVP, Chief Financial Officer serve as the Secretary and the Treasurer, respectively, of the Patient Safety Movement Foundation. During the fiscal years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , the Company contributed approximately $0 , $200,271 and $220 , respectively. The Company’s Chief Executive Officer is also the Chairman of the Patient Safety Movement Coalition, a not-for-profit social welfare organization which was founded in 2013 to promote patient safety legislation. The Company’s EVP and General Counsel and the Company’s EVP, Chief Financial Officer serve as the Secretary and the Treasurer, respectively, of the Patient Safety Movement Coalition. During the fiscal years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , the Company contributed approximately $1,300 , $20,000 and $10,000 , respectively, to the Patient Safety Movement Coalition. The Company’s Chief Executive Officer is a member of the board of directors for Atheer Labs (Atheer), which is working with the Company on the development of next generation Root ™ applications. For the fiscal year ended December 30, 2017 , the Company incurred no license fees or expenses payable to Atheer. During the fiscal years ended December 31, 2016 and January 2, 2016 , the Company incurred approximately $255,000 and $200,000 , respectively, in license fees and other expenses payable to Atheer. The Company’s Chief Executive Officer is a member of the board of directors of Children’s Hospital of Orange County and CHOC Children’s at Mission Hospital (collectively, CHOC), two non-profit hospitals that are devoted exclusively to caring for children. During the fiscal years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , the Company contributed approximately $15,000 , $11,500 and $1,500 , respectively, to CHOC and its affiliates. |
Inventories
Inventories | 12 Months Ended |
Dec. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following (in thousands): December 30, December 31, Raw materials $ 31,200 $ 32,647 Work-in-process 8,619 7,701 Finished goods 56,125 32,194 Total $ 95,944 $ 72,542 Finished goods inventory held by distributors was $3.7 million and $4.9 million as of December 30, 2017 and December 31, 2016 , respectively. |
Other Current Assets (Notes)
Other Current Assets (Notes) | 12 Months Ended |
Dec. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | Other Current Assets Other current assets consist of the following (in thousands): December 30, December 31, Prepaid expenses $ 17,073 $ 13,051 Royalties receivable 7,400 7,500 Employee loans and advances 364 305 Due from related party 39 77 Restricted cash (1) 33 2,081 Other current assets 3,161 3,053 Total other current assets $ 28,070 $ 26,067 ________ (1) Restricted cash is comprised of funds received from the Bill and Melinda Gates Foundation. As the Company incurs costs associated with research and development related to this project, on a quarterly basis, the Company reclasses amounts from the grant to offset costs incurred. During the fourth quarter of fiscal year 2017, the Company recorded a net charge of approximately $10.5 million related to arbitration proceedings that it initiated against a foreign appointed agent seeking to collect amounts that were paid by a foreign government customer to such agent in connection with a foreign government tender, but which have not been remitted to the Company in accordance with the agency agreement. The receivable from the agent had been previously been reclassified into Other Current Assets from Accounts Receivable during the third quarter of fiscal year 2017 when the Company became aware of the customer payments to the agent. (See “Litigation” under Note 17 for additional information on this matter.) |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment, net consists of the following (in thousands): December 30, December 31, Building and building improvements $ 87,999 $ 85,966 Machinery and equipment 47,556 41,683 Aircraft and vehicles 25,329 45 Land 23,762 23,762 Computer equipment 15,789 13,549 Tooling 13,754 12,895 Leasehold improvements 15,326 8,289 Furniture and office equipment 9,967 9,669 Demonstration units 486 448 Construction-in-progress (CIP) 6,365 7,923 Total property and equipment 246,333 204,229 Accumulated depreciation and amortization (82,237 ) (68,233 ) Total property and equipment, net $ 164,096 $ 135,996 In August 2017, the Company completed its purchase of a corporate aircraft for $25.3 million . The balance in CIP at December 30, 2017 relates primarily to capitalized costs related to the implementation of a new enterprise resource planning (ERP) software system and manufacturing equipment, the underlying assets for which have not been completed or placed into service. The balance in CIP at December 31, 2016 related primarily to capitalized costs related to leasehold improvements, furniture and equipment for a new manufacturing facility in Irvine, California, as well as other manufacturing equipment, the majority of which was placed into service during the year ended December 30, 2017 . |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Intangible assets, net consist of the following (in thousands): December 30, December 31, Cost Patents $ 20,623 $ 19,950 Customer relationships 7,669 7,669 Licenses 7,500 7,500 Acquired technology 5,580 5,580 Trademarks 4,036 3,777 Capitalized software development costs 2,699 2,539 Other 3,691 3,674 Total cost 51,798 50,689 Accumulated amortization Patents (8,473 ) (7,427 ) Customer relationships (4,154 ) (3,387 ) Licenses (4,831 ) (4,245 ) Acquired technology (3,066 ) (2,508 ) Trademarks (1,611 ) (1,331 ) Capitalized software development costs (1,864 ) (1,766 ) Other (676 ) (649 ) Total accumulated amortization (24,675 ) (21,313 ) Net carrying amount $ 27,123 $ 29,376 Estimated amortization expense for each of the next fiscal years is as follows (in thousands): Fiscal year Amount 2017 $ 5,420 2018 4,958 2019 3,817 2020 3,435 2021 1,768 Thereafter 7,725 Total $ 27,123 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Changes in the goodwill balance were as follows (in thousands): December 30, December 31, Goodwill, beginning of period $ 19,780 $ 20,394 Foreign currency translation adjustment 837 (614 ) Goodwill, end of period $ 20,617 $ 19,780 |
Other Assets, Long-Term (Notes)
Other Assets, Long-Term (Notes) - USD ($) $ in Thousands | Dec. 30, 2017 | Dec. 31, 2016 |
Other assets | $ 10,782 | $ 9,223 |
Accrued and Other Liabilities
Accrued and Other Liabilities | 12 Months Ended |
Dec. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Accrued Liabilities | Accrued and Other Liabilities Accrued liabilities consist of the following (in thousands): December 30, December 31, Accrued customer rebates, fees and reimbursements $ 16,896 $ 10,673 Accrued taxes 6,711 5,135 Contract related payable 3,683 3,893 Accrued stock repurchases 1,988 — Related party payable 1,529 525 Accrued warranty 1,149 910 Accrued legal fees 975 1,362 Accrued other 5,121 5,768 Total accrued liabilities $ 38,052 $ 28,266 |
Restated Credit Facility (Notes
Restated Credit Facility (Notes) | 12 Months Ended |
Dec. 30, 2017 | |
Debt Disclosure [Abstract] | |
Long-term Debt | In January 2016, the Company entered into an Amended and Restated Credit Agreement (Restated Credit Facility) with JPMorgan, as Administrative Agent and a Lender, BofA, as Syndication Agent and a Lender, Citibank, N.A., as Documentation Agent and a Lender, and various other Lenders (collectively, the Lenders). The Restated Credit Facility amended and restated the prior credit agreement dated April 23, 2014 (as amended in September 2014, the Amended Credit Agreement), and currently provides for borrowings up to $250.0 million in multiple currencies, with an option, subject to certain conditions, for the Company to increase the aggregate borrowing capacity to up to $350.0 million in the future. All unpaid principal under the Restated Credit Facility will become due and payable on January 8, 2021. Borrowings under the Restated Credit Facility will be deemed, at the Company’s election, either: (i) an ABR draw, which bears interest at the Alternate Base Rate (ABR), as defined below, plus a spread (ABR Spread) based upon a Company leverage ratio, or (ii) a Eurodollar draw, which bears interest at the Adjusted LIBO Rate (as defined below), plus a spread (Eurodollar Spread) based upon a Company leverage ratio. The ABR Spread is 0.125% to 1.0% and the Eurodollar Spread is 1.125% to 2.0% . Subject to certain conditions, the Company may also request swingline loans from time to time (Swingline Loans) that bear interest similar to an ABR Loan. The ABR is determined by taking the greatest of (i) the prime rate, (ii) the federal funds effective rate plus 0.5% , and (iii) the one-month Adjusted LIBO Rate plus 1.0% . The Adjusted LIBO Rate is equal to LIBOR for the applicable interest period multiplied by the statutory reserve rate for such period. The Company is obligated under the Restated Credit Facility to pay a fee ranging from 0.175% to 0.300% per annum, based upon a Company leverage ratio, with respect to any unused portion of the line of credit. This fee and any interest accrued on an ABR Loan are due and payable quarterly in arrears. Interest accrued on any Eurodollar Loan is due and payable at the end of the applicable interest period (or at each three month interval in the case of loans with interest periods greater than three months). Interest on any Swingline Loan is due and payable on the date that the Swingline Loan is required to be repaid. The Company may prepay the loans and terminate the commitments in whole at any time, without premium or penalty, subject to reimbursement of certain costs in the case of Eurodollar Loans. Pursuant to the terms of the Restated Credit Facility, the Company is subject to certain covenants, including financial covenants related to a leverage ratio and an interest charge coverage ratio, and other customary negative covenants. The Company’s obligations under the Restated Credit Facility are secured by substantially all of the Company’s personal property, including all equity interests in domestic subsidiaries and first-tier foreign subsidiaries. As of December 30, 2017 , the Restated Credit Facility had no outstanding draws or letters of credit. The Company incurred total interest expense of $0.7 million , $3.5 million and $2.7 million for the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , respectively, the majority of which was related to its revolving line of credit. The Company was in compliance with all covenants under the Restated Credit Facility as of December 30, 2017 . On February 15, 2018, the Company terminated the Restated Credit Facility. |
Other Liabilities, Long-Term
Other Liabilities, Long-Term | 12 Months Ended |
Dec. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities, Long-Term | Other Liabilities, Long-Term Other long-term liabilities consist of the following (in thousands): December 30, December 31, Income tax payable, long-term $ 25,734 $ — Unrecognized tax benefit 14,348 13,442 Deferred tax liability, long-term 9,880 340 Deferred rent, long-term 1,266 558 Other 292 247 Total other liabilities, long-term $ 51,520 $ 14,587 Unrecognized tax benefit relates to the Company’s long-term portion of tax liability associated with uncertain tax positions. Authoritative guidance prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. See Note 16 to these consolidated financial statements for further details. |
Equity
Equity | 12 Months Ended |
Dec. 30, 2017 | |
Equity [Abstract] | |
Equity | Stock Repurchase Program In September 2015, the Company’s Board of Directors (Board) authorized a stock repurchase program, whereby the Company may purchase up to 5.0 million shares of its common stock over a period of up to three years (2015 Repurchase Program). The 2015 Repurchase Program may be carried out at the discretion of a committee comprised of the Company’s Chief Executive Officer and Chief Financial Officer through open market purchases, one or more Rule 10b5-1 trading plans, block trades or privately negotiated transactions. The total remaining shares authorized for repurchase under the 2015 Repurchase Program approximated 2.1 million shares as of December 30, 2017 . The Company expects to fund the 2015 Repurchase Program through its available cash, future cash from operations, funds available under its Restated Credit Facility or other potential sources of capital. The following table provides a summary of the Company’s stock repurchase activities during the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 (in thousands, except per share amounts): Years Ended December 30, December 31, January 2, Shares repurchased 804 1,496 4,148 Average cost per share $ 84.90 $ 42.39 $ 37.36 Value of shares repurchased $ 68,260 $ 63,403 $ 154,967 |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Stock-Based Compensation Equity Incentive Plans 2017 Equity Incentive Plan On June 1, 2017, the Company’s stockholders ratified and approved the 2017 Equity Incentive Plan (2017 Equity Plan). The 2017 Equity Plan permits the grant of stock options, restricted stock, restricted stock units (RSUs), stock appreciation rights, performance share units (PSUs), performance shares, performance bonus awards and other stock or cash awards to employees, directors and consultants of the Company and employees and consultants of any parent or subsidiary of the Company. The aggregate number of shares that may be awarded under the 2017 Equity Plan is 5.0 million shares. The 2017 Equity Plan provides that equity awards issued under the 2017 Equity Plan must generally vest over a period of not less than one year following the date of grant and generally expire within ten years from date of grant. The exercise price per share of each option granted under the 2017 Equity Plan may not be less than the fair market value of a share of the Company’s common stock on the date of grant, which is generally equal to the closing price of the Company’s common stock on the NASDAQ Global Select Market on the grant date. 2007 Stock Incentive Plan Effective June 1, 2017, upon the approval and ratification of the 2017 Equity Plan, the Company’s 2007 Stock Incentive Plan (2007 Equity Plan) terminated, provided that awards outstanding under the 2007 Equity Plan will continue to be governed by the terms of that plan. In addition, upon the effectiveness of the 2017 Equity Plan, an aggregate of 5.0 million shares of the Company’s common stock registered under prior registration statements for issuance pursuant to the 2007 Equity Plan were deregistered and concurrently registered under the 2017 Equity Plan. At December 30, 2017 , an aggregate of 13.8 million shares of common stock were reserved for issuance under the 2017 Equity Plans, of which 3.9 million shares were available for future awards under the 2017 Equity Plan. Stock-Based Award Activity Stock Options The number and weighted-average exercise price of stock options issued and outstanding under all stock plans, is presented below (in thousands, except for exercise price): Year ended Year ended Year ended Shares Average Shares Average Exercise Price Shares Average Options outstanding, beginning of period 8,521 $ 28.56 9,202 $ 25.46 9,956 $ 23.59 Granted 928 86.69 1,290 39.94 914 36.18 Canceled (250 ) 38.59 (172 ) 29.13 (218 ) 24.33 Expired — — — — — — Exercised (2,246 ) 27.63 (1,799 ) 20.76 (1,450 ) 19.54 Options outstanding, end of period 6,953 $ 36.26 8,521 $ 28.56 9,202 $ 25.46 Options exercisable, end of period 3,812 $ 26.28 4,988 $ 26.33 5,609 $ 24.72 Total stock option expense for the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 was $12.0 million , $12.2 million and $10.8 million , respectively. As of December 30, 2017 and December 31, 2016 , the Company had $39.7 million and $27.1 million of unrecognized compensation cost related to outstanding options expected to be recognized over a weighted-average period of approximately 3.7 years and 3.4 years , respectively. The number and weighted-average exercise price of outstanding and exercisable stock options segregated by exercise price ranges (in thousands, except range of exercise prices and remaining contractual life) were as follows: Year ended Year ended Options Outstanding Options Exercisable Options Outstanding Options Exercisable Range of Exercise Prices Number of Options Average Remaining Contractual Life Number of Options Number of Options Average Remaining Contractual Life Number of Options $8.00 to $25.00 2,555 4.62 1,999 3,432 5.28 2,301 $25.01 to $40.00 3,224 5.80 1,712 4,664 5.65 2,526 $40.01 to $55.00 199 7.12 86 341 6.44 161 $55.01 to $70.00 94 8.80 15 84 9.76 — $70.01 to $85.00 74 9.68 — — 0 — $85.01 to $105.00 807 9.57 — — 0 — Total 6,953 5.92 3,812 8,521 5.57 4,988 As of December 30, 2017 and December 31, 2016 , the weighted-average remaining contractual term of options outstanding was 5.9 years and 5.6 years, respectively. As of December 30, 2017 and December 31, 2016 , the weighted-average remaining contractual term of options exercisable with an exercise price less than the closing price of the Company’s common stock was 4.3 years and 3.9 years, respectively. RSUs The number of RSUs issued and outstanding under all of the Company’s equity plans are as follows (in thousands, except for grant date fair value amounts): Year ended Year ended Year ended Units Weighted Average Units Weighted Average Units Weighted Average RSUs outstanding, beginning of period 2,706 $ 95.40 2,703 $ 41.45 — $ — Granted 33 86.42 6 43.09 2,703 41.45 Canceled (25 ) 85.79 — — — — Expired — — — — — — Vested (6 ) 43.09 (3 ) 41.45 — — RSUs outstanding, end of period 2,708 $ 95.51 2,706 $ 41.45 2,703 $ 41.45 Total RSU expense for the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 was $0.5 million and $0.3 million and less than $0.1 million , respectively. As of December 30, 2017 and December 31, 2016 , the Company had $0.3 million and $0.1 million of unrecognized compensation cost related to non-vested RSU awards expected to be recognized and vest over a weighted-average period of approximately 0.4 years and 0.3 years , respectively, excluding any contingent compensation expense related to certain RSUs that were granted to the Company’s Chairman and Chief Executive Officer in connection with the amendment and restatement of his employment agreement. In July 2017, in connection with the First Amendment to Mr. Kiani’s November 4, 2015 Amended and Restated Employment Agreement (First Amendment), the Company and Mr. Kiani agreed to, among other things, modify certain vesting provisions related to the previous award of 2.7 million RSUs to the Company’s Chairman and Chief Executive Officer (see “Employment and Severance Agreements” in Note 17 to these condensed consolidated financial statements for further details). PSUs The number of PSUs outstanding under all of the Company’s equity plans are as follows (in thousands, except for grant date fair value amounts): Year ended Year ended Year ended Units Weighted Average Units Weighted Average Units Weighted Average PSUs outstanding, beginning of period — $ — — $ — — $ — Granted 248 90.71 — — — — Canceled (15 ) 90.87 — — — Expired — — — — — — Vested — — — — — — PSUs outstanding, end of period 233 $ 90.70 — $ — — $ — During the year ended December 30, 2017 , the Company awarded PSUs that will vest in part over time based on the achievement of certain 2017 performance criteria approved by the Board. If earned, 20% of the PSUs granted will vest upon achievement of the performance criteria and the remaining award will vest in four equal installments at the beginning of each of the following four years after the year in which the performance achievement level has been determined. The number of shares that may be earned can range from 0% to 100% of the target amount. The total PSU expense for the year ended December 30, 2017 was $4.7 million . As of December 30, 2017 , the Company had $9.3 million of unrecognized compensation cost related to non-vested PSU awards expected to be recognized and vest over a weighted-average period of approximately 2.5 years. Valuation of Stock-Based Award Activity The fair value of each RSU award is determined based on the closing price of the Company’s common stock on the grant date. The Black-Scholes option pricing model is used to estimate the fair value of stock options granted under the Company’s stock-based compensation plans. The range of assumptions used and the resulting weighted-average fair value of stock options granted at the date of grant were as follows: Year ended Year ended Year ended Risk-free interest rate 1.7% to 2.2% 1.0% to 2.1% 1.3% to 1.9% Expected term 5.5 years to 5.6 years 5.5 years to 5.7 years 5.5 years to 5.7 years Estimated volatility 29.7% to 32.1% 29.8% to 35.7% 32.0% to 37.4% Expected dividends 0% 0% 0% Weighted-average fair value of options granted $27.81 per share $13.64 per share $12.20 per share Risk-free interest rate. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues with a remaining term approximately equal to the expected term of the Company’s stock options. Expected term. The expected term represents the average period that the Company’s stock options are expected to be outstanding. The expected term is based on both the Company’s specific historical option exercise experience, as well as expected term information available from a peer group of companies with a similar vesting schedule. Estimated volatility. The estimated volatility is the amount by which the Company’s share price is expected to fluctuate during a period. The Company’s estimated volatilities for 2017 , 2016 and 2015 are based on historical and implied volatilities of the Company’s share price over the expected term of the option. Expected dividends. The Board may from time to time declare, and the Company may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law. Any determination to declare and pay dividends will be made by the Board and will depend upon the Company’s results of operations, earnings, capital requirements, financial condition, business prospects, contractual restrictions and other factors deemed relevant by the Board. In the event a dividend is declared, there is no assurance with respect to the amount, timing or frequency of any such dividends. The dividend declared in 2012 was deemed to be a special dividend and there is no assurance that special dividends will be declared again during the expected term. Based on this uncertainty and unknown frequency, for the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , no dividend rate was used in the assumptions to calculate the stock-based compensation expense. Estimated forfeiture rate. The Company is required to develop an estimate of the number of stock options and RSUs that will be forfeited due to employee turnover. Adjustments in the estimated forfeiture rates can have a significant effect on the Company’s reported stock-based compensation, as it recognizes the cumulative effect of the rate adjustments for all expense amortization in the period the estimated forfeiture rates were adjusted. The Company estimates and adjusts forfeiture rates based on a periodic review of recent forfeiture activity and expected future employee turnover. Adjustments in the estimated forfeiture rates could also cause changes in the amount of expense that it recognizes in future periods. The Company has elected to recognize stock-based compensation expense on a straight-line basis over the requisite service period for the entire award. The total fair value of all options that vested during fiscal years 2017 , 2016 and 2015 was $27.8 million , $10.6 million and $10.4 million , respectively. The aggregate intrinsic value is calculated as the difference between the market value of the Company’s common stock on the date of exercise or the respective period end, as appropriate, and the exercise price of the options. The aggregate intrinsic value of options outstanding, with an exercise price less than the closing price of the Company’s common stock, as of December 30, 2017 was $339.7 million . The aggregate intrinsic value of options exercisable, with an exercise price less than the closing price of the Company’s common stock, as of December 30, 2017 was $223.1 million . The aggregate intrinsic value of options exercised during the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 was $140.3 million , $57.0 million and $26.4 million , respectively. The total income tax benefit recognized in the consolidated statements of operations for stock-based compensation expense was $39.2 million , $16.2 million and $3.7 million for the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , respectively. During the year ended December 30, 2017 , the Company early adopted ASU 2016-09, which resulted in changes to the recognition of excess tax benefits for stock-based compensation. Please see Note 2 - Summary of Significant Accounting Policies under the subheading “ Recently Adopted Accounting Pronouncements ” for additional information on the impact of such adoption. The following table presents the total stock-based compensation expense that is included in each functional line item of the consolidated statements of operations (in thousands): Year ended Year ended Year ended Cost of goods sold $ 351 $ 355 $ 348 Selling, general and administrative 13,272 9,443 8,139 Research and development 3,564 2,705 2,338 Total $ 17,187 $ 12,503 $ 10,825 The increase in total stock-based compensation expense during the year ended December 30, 2017 was due to both the composition of the equity awards granted and a significant increase in the fair market value of the Company’s stock from the prior year, which increased the value of the equity awards granted during such year. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of income before provision for income taxes are as follows (in thousands): Year ended Year ended Year ended United States $ 171,564 $ 320,702 $ 87,762 Foreign 27,810 97,639 28,583 Total $ 199,374 $ 418,341 $ 116,345 The following table presents the current and deferred provision (benefit) for income taxes (in thousands): Year ended Year ended Year ended Current: Federal $ 38,777 $ 99,533 $ 31,983 State 1,940 6,922 2,388 Foreign 3,018 5,815 2,448 43,735 112,270 36,819 Deferred: Federal 27,002 2,982 (900 ) State (3,001 ) 2,331 (1,206 ) Foreign 22 92 132 24,023 5,405 (1,974 ) Total $ 67,758 $ 117,675 $ 34,845 Included in the fiscal year 2017 , 2016 and 2015 current tax provisions are net increases of $1.6 million , $6.1 million and $0.6 million , respectively, for tax and accrued interest related to uncertain tax positions for each fiscal year. The reconciliation of the U.S. federal statutory tax rate to the Company’s effective tax rate is as follows: Year ended Year ended Year ended Statutory regular federal income tax rate 35.0 % 35.0 % 35.0 % State provision, net of federal benefit (0.3 ) 1.4 0.7 Nondeductible items 1.8 0.8 1.7 Foreign income taxed at different rates (3.4 ) (5.6 ) (6.3 ) Tax credits (2.0 ) (0.5 ) (1.7 ) Change in federal valuation allowance — — 0.4 Impact of 2017 Tax Act 18.5 — — Withholding taxes on undistributed foreign earnings 3.3 — — Excess stock based compensation (18.9 ) (3.0 ) — Other — — 0.2 Total 34.0 % 28.1 % 30.0 % The 2017 Tax Act significantly changed the U.S. corporate income tax system. The changes included, among other things, a one-time transition tax on the “deemed repatriation” of cumulative undistributed foreign earnings as of December 31, 2017, and a permanent reduction of the federal corporate income tax rate from 35% to 21% effective January 1, 2018. Under GAAP, the effect of a change in tax rate or tax law is accounted for in the period of enactment and deferred assets and liabilities are measured at the enacted tax rate. On December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118 (SAB 118) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Act and provides for a measurement period of one year from the enactment date to finalize the accounting for effects of the 2017 Tax Act. The Company has calculated its best estimate of the tax impact related to the 2017 Tax Act and recorded a provisional expense of $43.5 million , of which $9.0 million relates to the re-measurement of deferred taxes due to the reduction in the federal corporate tax rate, $28.0 million relates to the transition tax on the deemed repatriation of foreign earnings, and $6.5 million relates to estimated foreign withholding taxes, net of estimated foreign tax credit benefit, and state income taxes related to the Company’s decision to repatriate up to $180.0 million of accumulated undistributed foreign earnings to the U.S. in the future. As of December 30, 2017, the Company had approximately $217.4 million of cumulative undistributed earnings subject to the transition tax. The Company has recorded provisional foreign withholding and state taxes, net of estimated foreign tax credits, of $6.5 million with respect to $180.0 million of cumulative undistributed earnings that the Company has tentatively decided are no longer permanently reinvested. The Company currently considers the remaining undistributed earnings of $37.4 million to continue to be indefinitely reinvested and has not recorded any incremental foreign withholding or state taxes related to such amount. If the Company decided to distribute such permanently reinvested earnings, the Company would accrue estimated additional income tax expense of up to $1.9 million . In accordance with SAB 118, the ultimate impact of the 2017 Tax Act may differ, possibly materially, due to, among other things, refinement of the underlying calculation or earnings and profits, changes in underlying interpretations and assumptions the Company has made, additional regulatory guidance that may be issued and other actions the Company may take as a result of the 2017 Tax Act. In addition, and in light of the 2017 Tax Act, the Company is still evaluating its indefinite reinvestment assertion with respect to its cumulative undistributed earnings and considers its current conclusion related thereto to be incomplete in accordance with SAB 118. The Company expects to complete its accounting for the implementation of the 2017 Tax Act no later than the time that the 2017 U.S. corporate income tax return is filed in 2018. Any subsequent adjustments to the amounts that have been provisionally accrued will be recorded to tax expense during the quarter within the measurement period when the analysis is completed. The components of the deferred tax assets are as follows (in thousands): December 30, December 31, Deferred tax assets: Tax credits $ 6,414 $ 802 Deferred revenue 3,831 5,393 Accrued liabilities 9,414 16,244 Stock-based compensation 8,601 18,680 Other 237 1,902 Total 28,497 43,021 Valuation allowance — — Total deferred tax assets 28,497 43,021 Deferred tax liabilities: Property and equipment (2,988 ) (2,691 ) State taxes and other (1,990 ) (1,695 ) Withholding taxes on undistributed foreign earnings (9,500 ) — Total deferred tax liabilities (14,478 ) (4,386 ) Net deferred tax assets $ 14,019 $ 38,635 As of December 30, 2017 , the Company has $3.6 million of net operating losses from various states, which will begin to expire in 2023. The Company also has state research and development tax credits of $6.3 million that will carry forward indefinitely and $0.4 million of Canadian investment tax credits on research and development expenditures that will begin to expire in 2031. The Company believes that it is more likely than not that the deferred tax assets related to these carryforwards will be realized. In making this determination, the Company considered all available positive and negative evidence, including scheduled reversals of liabilities, projected future taxable income, tax planning strategies and recent financial performance. As a result of certain business and employment actions undertaken by the Company, income earned in a certain European country is subject to a reduced tax rate through 2018 as the Company has met certain employment thresholds. For the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , the estimated income tax benefit related to such business arrangement was $1.0 million , $4.6 million and $1.3 million , respectively, and favorably impacted net income per diluted share by $0.02 , $0.09 and $0.02 , respectively. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands): Year ended Year ended Unrecognized tax benefits (gross), beginning of period $ 14,494 $ 8,875 Amounts related to Cercacor from prior year — (277 ) Increase from tax positions in prior period 498 143 Increase from tax positions in current period 2,142 6,437 Settlements — (296 ) Lapse of statute of limitations (977 ) (388 ) Unrecognized tax benefits (gross), end of period $ 16,157 $ 14,494 The amount of unrecognized benefits which, if ultimately recognized, could favorably affect the tax rate in a future period was $14.5 million and $13.1 million as of December 30, 2017 and December 31, 2016 , respectively. It is reasonably possible that the amount of unrecognized tax benefits in various jurisdictions may change in the next 12 months due to the expiration of statutes of limitation and audit settlements. However, due to the uncertainty surrounding the timing of these events, an estimate of the change within the next 12 months cannot be made at this time. For the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , the Company accrued $0.3 million , $0.1 million and $0.2 million , respectively, for interest and penalties related to unrecognized tax benefits as part of income tax expense. Total accrued interest and penalties related to unrecognized tax benefits as of December 30, 2017 and December 31, 2016 were $1.6 million and $1.2 million , respectively. The Company conducts business in multiple jurisdictions, and as a result, one or more of the Company’s subsidiaries files income tax returns in the U.S. federal, various state, local and foreign jurisdictions. The Company has concluded all U.S. federal income tax matters for years through 2013. All material state, local and foreign income tax matters have been concluded for years through 2010. The Company does not believe that the results of any tax authority examination would have a significant impact on its financial statements. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases The Company leases certain facilities in North America, Europe and Asia under operating lease agreements expiring at various dates through November 2026 . Some of these leases contain predetermined price escalations and in some cases renewal options. The Company recognizes the lease costs using a straight line method based on total lease payments. As of December 30, 2017 and December 31, 2016 , rent expense accrued in excess of the amount paid aggregated $1.5 million and $0.7 million , respectively, and is classified in accrued and other liabilities in the accompanying consolidated balance sheets. The Company also leases automobiles in the U.S. and Europe that are classified as operating leases and expire at various dates through November 2020 . The majority of these leases are non-cancellable. As of December 30, 2017 , the Company had no outstanding capital leases. Future minimum lease payments, including interest, under operating leases for each of the following fiscal years ending on or about December 31 are (in thousands): Fiscal year Total 2018 $ 6,748 2019 5,493 2020 3,184 2021 2,597 2022 1,816 Thereafter 5,467 Total $ 25,305 On January 26, 2016, the Company entered into the Third Amendment to Lease with The Irvine Company LLC (Third Amendment) relating to the rental of space in a building located in Irvine, California. Pursuant to the terms of the Third Amendment, the Company’s current lease of certain premises will be terminated in exchange for the Company’s leasing of approximately 70,700 square feet of space in another building in Irvine, California, located near the Company’s new corporate headquarters (New Premises). The Third Amendment also extends the term of the original lease to the end of the month in which the 10 -year anniversary of the date of commencement (Commencement Date) of the lease for the New Premises occurs. The Commencement Date for the New Premises was November 1, 2016. On July 13, 2016, the Company entered into a Single-Tenant Lease with The Irvine Company LLC extending the rental of approximately 32,518 square feet of space in a building that was expected to be vacated in connection with the Third Amendment described above. The New Lease commenced December 1, 2016 and will continue in effect for a period of 10 years until November 30, 2026. The Prior Lease terminated immediately prior to commencement of the New Lease. Rental expense related to operating leases for the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 was $6.7 million , $5.3 million and $5.2 million , respectively. Employee Retirement Savings Plan In 1996, the Company adopted the Masimo Retirement Savings Plan (the Plan), which is a 401(k) plan covering all of the Company’s full-time U.S. employees who meet certain eligibility requirements. In general, the Company matches an employee’s contribution up to 3% of the employee’s compensation, subject to a maximum amount. The Company may also contribute to the Plan on a discretionary basis. The Company contributed $2.2 million , $1.9 million and $1.8 million to the Plan for the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , respectively, all in the form of matching contributions. In addition, the Company also sponsors various defined contribution plans in certain locations outside of the United States (Subsidiary Plans). For each of the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , the Company contributed $0.3 million to the Subsidiary Plans. Employment and Severance Agreements In July 2017, the Company entered into the First Amendment with Joe Kiani, the Company’s Chairman and Chief Executive Officer, which amended that certain Amended and Restated Employment Agreement entered into between the Company and Mr. Kiani on November 4, 2015 (together with the First Amendment, the Amended Employment Agreement). The First Amendment, among other things, eliminates Mr. Kiani’s eligibility for an automatic annual bonus equal to 100% of his base salary, imposes an annual cap on any annual bonus awarded by the Compensation Committee at 200% of his base salary, eliminates his guaranteed grant of 300,000 stock options in fiscal year 2017, modifies certain definitions and conditions related to Mr. Kiani’s ability to terminate his employment with the Company for “Good Reason”, and eliminates the annual 10% reduction of both: (1) the 2.7 million shares subject to the RSU award previously granted to Mr. Kiani (Award Shares) that will vest in certain circumstances, and (2) the $35.0 million cash payment (Cash Payment) that Mr. Kiani will be entitled to receive in certain circumstances. Pursuant to the terms of the Amended Employment Agreement, upon a “Qualifying Termination” (as defined in the Amended Employment Agreement), Mr. Kiani will be entitled to receive a cash severance benefit equal to two times the sum of his then-current base salary and the average annual bonus paid to Mr. Kiani during the immediately preceding three years, the full amount of the Award Shares and the full amount of the Cash Payment. In addition, in the event of a “Change in Control” (as defined in the Amended Employment Agreement) prior to a Qualifying Termination, on each of the one year and two year anniversaries of the Change in Control, 50% of the Cash Payment and 50% of the Award Shares will vest, subject in each case to Mr. Kiani’s continuous employment through each such anniversary date; however, in the event of a Qualifying Termination or a termination of Mr. Kiani’s employment due to death or disability prior to either of such anniversaries, any unvested amount of the Cash Payment and all of the unvested Award Shares shall vest and be paid in full. Additionally, in the event of a Change in Control prior to a Qualifying Termination, Mr. Kiani’s stock options and any other equity awards will vest in accordance with their terms, but in no event later than in two equal installments on each of the one year and two year anniversaries of the Change in Control, subject in each case to Mr. Kiani’s continuous employment through each such anniversary date. As of December 30, 2017 , the expense related to the Award Shares and the Cash Payment that would be recognized in the Company’s consolidated financial statements upon the occurrence of a Qualifying Termination under the Restated Employment Agreement was approximately $292.9 million . As of December 30, 2017 , the Company had severance plan participation agreements with five of its executive officers. The participation agreements (Participation Agreements) are governed by the terms and conditions of the Company’s 2007 Severance Protection Plan, which became effective on July 19, 2007 and was amended effective December 31, 2008. Under the Participation Agreements, each executive officer may be entitled to receive certain salary, equity, medical and life insurance benefits if he is terminated by the Company without cause or terminates his employment for good reason under certain circumstances. The executive officers are also required to provide the Company with six months advance notice of their resignation under certain circumstances. Cercacor Cross-Licensing Agreement Change in Control Provisions The Company’s Cross-Licensing Agreement with Cercacor contains certain provisions that will go into effect upon a change in control (as defined in the Cross-Licensing Agreement) of the Company or Cercacor. Upon a change in control of the Company or Cercacor: (i) all rights to the “Masimo” trademark will be assigned to Cercacor if the surviving or acquiring entity ceases to use “Masimo” as a company name and trademark; (ii) the option to license technology developed by Cercacor for use in blood glucose monitoring will be deemed automatically exercised and a $2.5 million license fee for this technology will become immediately payable to Cercacor; and (iii) the minimum aggregate annual royalties payable to Cercacor for carbon monoxide, methemoglobin, fractional arterial oxygen saturation, hemoglobin and/or glucose measurements will increase to $15.0 million per year until the exclusivity period of the agreement ends, plus up to $2.0 million for each additional vital sign measurement with no maximum ceiling for non-vital sign measurements. Purchase Commitments Pursuant to contractual obligations with vendors, the Company had $74.1 million of purchase commitments as of December 30, 2017 , which are expected to be fulfilled within one year. These purchase commitments were made for certain inventory items to secure better pricing and to ensure the Company will have raw materials when necessary. Other Contractual Commitments In the normal course of business, the Company may provide bank guarantees to support government hospital tenders in certain foreign jurisdictions. As of December 30, 2017 , there were approximately $0.3 million of such bank guarantees outstanding, the majority of which relates to performance obligations with respect to certain government tenders. Concentrations of Risk The Company is exposed to credit loss for the amount of cash deposits with financial institutions in excess of federally insured limits. As of December 30, 2017 , the Company had approximately $315.2 million of cash and cash equivalents, of which $3.3 million was covered by either the U.S. Federal Deposit Insurance Corporation limit or foreign countries deposit insurance organizations. The Company invests its excess cash deposits in certificates of deposit, money market and time deposit accounts with major financial institutions. While the Company and its contract manufacturers rely on sole source suppliers for certain components, steps have been taken to minimize the impact of a shortage or stoppage of shipments, such as maintaining a safety stock of inventory and designing products that may be easily modified to use a different component. However, there can be no assurance that a shortage or stoppage of shipments of the materials or components that the Company purchases will not result in a delay in production or adversely affect the Company’s business. The Company’s ability to sell its products to U.S. hospitals depends in part on its relationships with GPOs. Many existing and potential customers for the Company’s products become members of GPOs. GPOs negotiate pricing arrangements and contracts, sometimes exclusively, with medical supply manufacturers and distributors, and these negotiated prices are made available to a GPO’s affiliated hospitals and other members. For the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , revenue from the sale of the Company’s pulse oximetry products to customers affiliated with GPOs amounted to $417.2 million , $375.0 million and $337.4 million , respectively. For the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , the Company had sales through two just-in-time distributors, which in total represented approximately 12.7% and 11.2% , 14.0% and 12.8% , and 14.6% and 11.7% of total revenue, respectively. As of December 30, 2017 , these two just-in-time distributors represented 6.5% and 4.7% of the accounts receivable balance. As of December 31, 2016 , the same two just-in-time distributors represented 5.6% and 7.5% of the accounts receivable balance, respectively, and another customer represented 13.6% of the accounts receivable balance. For the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , the Company recorded $32.8 million , $30.8 million and $30.8 million , respectively, in royalty revenues from Medtronic pursuant to a settlement agreement and amendments. The current royalty rate is 7.75% . Pursuant to the terms of the Third Amendment to Settlement Agreement and Release of Claims effective September 2016, Medtronic will discontinue paying royalties to the Company after October 6, 2018. Litigation During the third quarter of fiscal year 2017, the Company became aware that certain amounts had been paid by a foreign government customer to the Company’s former appointed foreign agent in connection with a foreign government tender, but had not been remitted by such agent to the Company in accordance with the agency agreement. On December 28, 2017, the Company initiated arbitration proceedings against this foreign agent after unsuccessful attempts to recover such remittances. As a result, the Company recorded a net charge of approximately $10.5 million during the fourth quarter of fiscal year 2017 in connection with this dispute. Although the Company intends to vigorously pursue full recovery of the amounts owed by the foreign agent through these arbitration proceedings, as well as explore other avenues for recovery, there is no guarantee that the Company will be successful in these efforts. On July 26, 2017, a patent infringement complaint was filed against the Company in the U.S. District Court for the District of Delaware by Silkeen, LLC (Silkeen). The complaint alleges that the Company’s pulse oximetry products infringe certain claims of U.S. Patent No. 7,944,469 titled “System and Method for Using Self-Learning Rules to Enable Adaptive Security Monitoring.” The Company’s policy is and has been not to settle patent infringement claims where it does not believe there is infringement of a valid patent, even if the cost of litigation would exceed the cost of settlement. On October 18, 2017, Silkeen dismissed the case against the Company with prejudice. On January 24, 2018, the Company was notified that its former insurance carrier was seeking reimbursement of certain defense costs previously advanced by such insurance carrier in connection with an employment-related arbitration award. The Company had previously disputed the insurance carrier’s claim for reimbursement in a letter dated December 14, 2016, and had not received any response from the insurance carrier. The insurance carrier is seeking approximately $2.6 million plus interest at a rate of 10% per year from January 15, 2014. The Company believes it has good and substantial grounds to dispute the insurance carrier’s reimbursement claim, but there is no guarantee that the Company will prevail. The Company has not recorded a charge related to this dispute and is unable to determine whether any loss will ultimately occur. On February 3, 2009, the Company filed a patent infringement suit in the U.S. District Court for the District of Delaware against Philips Electronics North America Corporation and Philips Medizin Systeme Böblingen GmbH (collectively, Philips). On June 15, 2009, Philips answered the Company’s complaint and Philips Electronics North America Corporation filed antitrust and patent infringement counterclaims against the Company, as well as counterclaims seeking declaratory judgments of invalidity of the patents asserted by the Company against Philips. On November 5, 2016, the Company entered into the Philips Settlement Agreement, pursuant to which Philips N.V. agreed to pay the Company $300 million. Philips N.V. and its affiliates (collectively, the Philips Group) and the Company (collectively with the Philips Group, the Parties) agreed to dismiss with prejudice all pending legal disputes between the Parties, including the patent infringement and antitrust lawsuits described above, as well as other contractual disputes, and agreed not to sue each other for patent infringement for certain of each other’s products. In addition, the Parties agreed to work together to integrate the Company’s technologies into additional Philips Group products, and to jointly develop certain other products. Each of the Parties has additional obligations to the other in the event that such party does not meet certain objectives under the settlement agreement. The settlement agreement also contains rainbow ® parameter pricing and related terms. The Parties further agreed to undertake a joint marketing program to promote rainbow ® adoption with Philips Group products. On January 2, 2014, a putative class action complaint was filed against the Company in the U.S. District Court for the Central District of California by Physicians Healthsource, Inc. (PHI). The complaint alleges that the Company sent unsolicited facsimile advertisements in violation of the Junk Fax Protection Act of 2005 and related regulations. The complaint seeks $500 for each alleged violation, treble damages if the District Court finds the alleged violations to be knowing, plus interest, costs and injunctive relief. On April 14, 2014, the Company filed a motion to stay the case pending a decision on a related petition filed by the Company with the Federal Communications Commission (FCC). On May 22, 2014, the District Court granted the motion and stayed the case pending a ruling by the FCC on the petition. On October 30, 2014, the FCC granted some of the relief and denied some of the relief requested in the Company’s petition. Both parties appealed the FCC’s decision on the petition. On November 25, 2014, the District Court granted the parties’ joint request that the stay remain in place pending a decision on the appeal. On March 31, 2017, the D.C. Circuit Court of Appeals vacated and remanded the FCC’s decision, holding that the applicable FCC rule was unlawful to the extent it requires opt-out notices on solicited faxes. On April 28, 2017, PHI filed a petition seeking rehearing by the D.C. Circuit Court of Appeals. The D.C. Circuit Court of Appeals denied the requested rehearing on June 6, 2017. The plaintiffs filed a petition for a writ of certiorari with the United States Supreme Court on September 5, 2017 seeking review of the D.C. Circuit Court of Appeals’ opinion. The Company and the FCC filed oppositions to this petition on January 16, 2018. On February 20, 2018, the Supreme Court denied certiorari; however, the District Court has not yet lifted the stay. The Company believes it has good and substantial defenses to the claims in the District Court litigation, but there is no guarantee that the Company will prevail. The Company is unable to determine whether any loss will ultimately occur or to estimate the range of such loss; therefore, no amount of loss has been accrued by the Company in the accompanying condensed consolidated financial statements. On January 31, 2014, an amended putative class action complaint was filed against the Company in the U.S. District Court for the Northern District of Alabama by and on behalf of two participants in the Surfactant, Positive Pressure, and Oxygenation Randomized Trial at the University of Alabama. On April 21, 2014, a further amended complaint was filed adding a third participant. The complaint alleges product liability and negligence claims in connection with pulse oximeters the Company modified and provided at the request of study investigators for use in the trial. On August 13, 2015, the U.S. District Court for the Northern District of Alabama granted summary judgment in favor of the Company on all claims. The plaintiffs have appealed the U.S. District Court for the Northern District of Alabama’s decision. The appellate hearing before the Eleventh Circuit Court of Appeals was held on December 13, 2016, and the parties are awaiting a decision. On July 7, 2017, the Eleventh Circuit Court of Appeals (Eleventh Circuit) issued a Certification to the Supreme Court of Alabama seeking guidance on a legal question. In that Certification, the Eleventh Circuit stated that the plaintiffs failed to establish that participation in the clinical study caused any injuries, and that the negligence, negligence per se, breach of fiduciary duty and products liability claims, which includes the claims currently alleged against the Company, were properly dismissed. On September 7, 2017, the Supreme Court of Alabama issued an order declining to answer the legal question posed by the Eleventh Court. The Company is unable to determine whether any loss will ultimately occur or to estimate the range of such loss; therefore, no amount of loss has been accrued by the Company in the accompanying consolidated financial statements. From time to time, the Company may be involved in other litigation and investigations relating to claims and matters arising out of its operations in the normal course of business. The Company believes that it currently is not a party to any other legal proceedings which, individually or in the aggregate, would have a material adverse effect on its consolidated financial position, results of operations or cash flows. |
Segment Information and Enterpr
Segment Information and Enterprise Reporting (Notes) | 12 Months Ended |
Dec. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure | Segment Information and Enterprise Reporting The Company’s chief decision maker, the Chief Executive Officer, reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenues by geographic region for purposes of making operating decisions and assessing financial performance. Accordingly, the Company considers itself to be in a single reporting segment, specifically noninvasive patient monitoring solutions and related products. The Company does not assess the performance of its geographic regions on other measures of income or expense, such as depreciation and amortization, operating income or net income including noncontrolling interests. In addition, the Company’s assets are primarily located in the U.S. The following schedule presents an analysis of the Company’s product revenue based upon the geographic area to which the product was shipped (in thousands): Year ended Year ended Year ended Geographic area by destination United States $ 506,815 68.4 % $ 465,588 70.1 % $ 421,628 70.3 % Europe, Middle East and Africa 138,075 18.6 112,273 16.9 105,323 17.6 Asia and Australia 72,449 9.8 65,955 10.0 55,675 9.3 North and South America (excluding United States) 23,985 3.2 20,030 3.0 16,708 2.8 Total Product Revenue $ 741,324 100 % $ 663,846 100 % $ 599,334 100.0 % The Company’s consolidated long-lived assets (total non-current assets excluding deferred taxes, goodwill and intangible assets) by geographic area are: Year ended Year ended Year ended Long-lived assets by geographic area United States $ 263,860 96.1 % $ 216,784 96.3 % $ 203,553 96.8 % International 10,618 3.9 8,383 3.7 6,770 3.2 Total $ 274,478 100.0 % $ 225,167 100.0 % $ 210,323 100.0 % The Company possesses licenses from the U.S. Treasury Department’s Office of Foreign Assets Control for conducting business with certain countries identified by the State Department as state sponsors of terrorism. Although the Company does not have any subsidiaries, affiliates, offices, investments or employees in any country identified as a state sponsor of terrorism, the Company has conducted an immaterial amount of business with distributors in Iran during the three fiscal years presented. The Company has not sold products to distributors in Sudan and Syria since fiscal years 2012 and 2011. The Company does not believe that these activities are material to its business, financial condition or results of operations. |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 30, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data | Quarterly Financial Data (unaudited) The healthcare business in the United States and overseas is typically subject to quarterly fluctuations in hospital and other alternative care admissions. Although this did not occur during fiscal year 2017, the Company’s third fiscal quarter revenues have historically experienced a sequential decline from its second fiscal quarter revenues. The Company believes this is primarily due to the summer vacation season during which people tend to avoid elective procedures. Another factor affecting the seasonality of the Company’s quarterly revenues is the traditional “flu season” that often increases hospital and acute care facility admissions in the first and fourth calendar quarters. Because the Company’s non-sales variable operating expenses often do not fluctuate in the same manner as its quarterly product sales, this may cause fluctuations in the Company’s quarterly operating income that are disproportionate to fluctuations in its quarterly revenue. The following tables contain selected unaudited consolidated statements of operations data for each quarter of 2017 and 2016 (in thousands, except per share data): Quarters Ended Fiscal 2017 April 1, July 1, September 30, December 30, Total revenue $ 186,302 $ 192,933 $ 193,692 $ 225,181 Gross profit 124,134 128,437 128,665 153,864 Operating income 43,195 46,868 47,975 59,323 Net income 45,334 46,680 39,235 367 Net income per share Basic (1) $ 0.90 $ 0.90 $ 0.75 $ 0.01 Diluted $ 0.82 $ 0.83 $ 0.70 $ 0.01 Quarters Ended Fiscal 2016 April 2, July 2, October 1, January 2, Total revenue $ 171,167 $ 172,636 $ 167,621 $ 183,201 Gross profit 114,213 115,135 110,122 124,329 Operating income 37,337 36,429 36,604 310,400 (2) Net income 27,577 30,023 27,773 215,293 (3) Net income per share Basic (1) $ 0.56 $ 0.61 $ 0.56 $ 4.31 Diluted (1) $ 0.53 $ 0.57 $ 0.52 $ 3.97 (1) The sum of the basic earnings per share numbers for each quarter do not equal the basic earnings per share number for the entire year due to quarterly rounding. (2) On November 5, 2016, the Company entered into the Philips Settlement Agreement, pursuant to which Philips N.V. agreed to pay the Company $300 million. Per the terms of the agreement, $270 million of this settlement is included within Operating income for the quarter ended December 31, 2016. See Note 2 - Summary of Significant Accounting Policies under the subheading “ Litigation Costs and Contingencies ” and Note 17 - Commitments and Contingencies under the subheading “ Litigation ” for additional information on the Phillips Settlement Agreement. (3) Due to the significant impact of the Philips Settlement Agreement on the fourth quarter results, the sum of the basic and diluted earnings per share numbers for each quarter will not equal the basic and diluted earnings per share number for the entire year. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts (Notes) | 12 Months Ended |
Dec. 31, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts | MASIMO CORPORATION VALUATION AND QUALIFYING ACCOUNTS Years ended December 30, 2017, December 31, 2016 and January 2, 2016 (in thousands) Description Balance at beginning of period Additions charged to expense and other accounts Amounts charged against reserve Balance at end of period Year ended December 30, 2017 Allowance for doubtful accounts $ 1,698 $ 251 $ 167 $ 2,116 Sales returns, allowance and reserves 605 1,593 (1,827 ) 371 Valuation allowance on deferred tax asset — — — — Year ended December 31, 2016 Allowance for doubtful accounts 1,967 259 (528 ) 1,698 Sales returns, allowance and reserves 710 2,320 (2,425 ) 605 Valuation allowance on deferred tax asset 4,196 — (4,196 ) — Year ended January 2, 2016 Allowance for doubtful accounts 1,890 342 (265 ) 1,967 Sales returns, allowance and reserves 472 2,621 (2,383 ) 710 Valuation allowance on deferred tax asset 3,365 831 — 4,196 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), and include the accounts of the Company, its wholly-owned subsidiaries and variable interest entities (VIEs) in which the Company is the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation. |
Fiscal Periods | Fiscal Periods The Company follows a conventional 52/53 week fiscal year. Under a conventional 52/53 week fiscal year, a 52 week fiscal year includes four quarters of 13 weeks while a 53 week fiscal year includes three quarters of 13 weeks and one quarter of 14 weeks. The Company’s last 53 week fiscal year was fiscal year 2014. Fiscal years 2015, 2016 and 2017 were 52 week fiscal years. All references to years in these notes to consolidated financial statements are fiscal years unless otherwise noted. |
Use of Estimates | Use of Estimates The Company prepares its financial statements in conformity with GAAP, which requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include the determination of accounts receivable allowances, inventory reserves, warranty reserves, rebate accruals, valuation of the Company’s stock awards, goodwill valuation, deferred taxes and any associated valuation allowances, tax impact of the distributor channel inventory, royalty revenues, deferred revenue, uncertain income tax positions, litigation costs and loss contingency accruals. In addition, for the year ended December 30, 2017 , certain estimates were made in calculating the provision for income taxes related to the impact of the Tax Cuts and Jobs Act of 2017 (2017 Tax Act) that was signed into law on December 22, 2017. Actual results could differ from the Company’s estimates. |
Reclassification | Reclassifications Certain amounts in the consolidated financial statements for prior periods have been reclassified to conform to current period presentation. |
Fair Value Measurements | Fair Value Measurements Authoritative guidance describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value: • Level 1 - Quoted prices in active markets for identical assets or liabilities. • Level 2 - Inputs other than level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Pursuant to current authoritative guidance, entities are allowed an irrevocable option to elect fair value for the initial and subsequent measurement for specified financial assets and liabilities on a contract-by-contract basis. The Company did not elect the fair value option under this guidance as to specific assets or liabilities. There were no transfers between level 1, level 2 and level 3 inputs during the years ended December 30, 2017 or December 31, 2016 . The Company carries cash and cash equivalents at cost which approximates fair value. As of December 30, 2017 and December 31, 2016 , the Company had an insignificant amount of other financial assets that were required to be measured under the fair value hierarchy, the measurement of which were based on level 1 and level 2 inputs. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity from date of purchase of three months or less, or highly liquid investments that are readily convertible into known amounts of cash, to be cash equivalents. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable consist of trade receivables recorded upon recognition of revenue for product revenues, reduced by reserves for estimated bad debts and returns. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Credit is extended based on evaluation of the customer’s financial condition. Collateral is not required. The allowance for doubtful accounts is determined based on historical write-off experience, current customer information and other relevant factors, including specific identification of past due accounts, based on the age of the receivable in excess of the contemplated or contractual due date. Accounts are charged off against the allowance when the Company believes they are uncollectible. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined using a standard cost method, which approximates FIFO (first in, first out) and includes material, labor and overhead. Inventory reserves are recorded for inventory items that have become excess or obsolete or are no longer used in current production and for inventory that has a market price less than the carrying value in inventory. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over estimated useful lives as follows: Useful Lives Aircraft and components 10 to 20 years Buildings 39 years Building improvements 7 to 15 years Computer equipment 2 to 6 years Demonstration units 3 years Furniture and office equipment 2 to 6 years Leasehold improvements Lesser of useful life or term of lease Machinery and equipment 5 to 7 years Vehicles 5 years Tooling 3 years Land is not depreciated and construction in progress is not depreciated until placed in service. Normal repair and maintenance costs are expensed as incurred, whereas significant improvements that materially increase values or extend useful lives are capitalized and depreciated over the remaining estimated useful lives of the related assets. Upon sale or retirement of depreciable assets, the related cost and accumulated depreciation or amortization are removed from the accounts and any gain or loss on the sale or retirement is recognized in income. For the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , depreciation and amortization expense of property and equipment was $15.2 million , $13.0 million and $11.8 million , respectively. |
Intangible Assets | Intangible Assets Intangible assets consist primarily of patents, trademarks, software development costs, customer relationships and acquired technology. Costs related to patents and trademarks, which include legal and application fees, are capitalized and amortized over the estimated useful lives using the straight-line method. Patent and trademark amortization commences once final approval of the patent or trademark has been obtained. Patent costs are amortized over the lesser of 10 years or the patent’s remaining legal life, which assumes renewals, and trademark costs are amortized over 17 years, and their associated amortization cost is included in selling, general and administrative expense in the accompanying consolidated statements of operations. For intangibles purchased in an asset acquisition or business combination, which mainly include patents, trademarks, customer relationships and acquired technology, the useful life is determined in the same manner as noted above. For the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , amortization of intangible assets was $4.9 million , $3.8 million and $4.2 million , respectively. As of December 30, 2017 and December 31, 2016 , the total costs of patents not yet amortizing was $4.3 million and $5.0 million , respectively. As of each of December 30, 2017 and December 31, 2016 , the total costs of trademarks not yet amortizing was $0.6 million . For the years ended December 30, 2017 and December 31, 2016 , total renewal costs capitalized for patents and trademarks was $0.2 million and $0.6 million , respectively. As of December 30, 2017 , the weighted-average number of years until the next renewal was one year for patents and six years for trademarks. The Company’s policy is to renew its patents and trademarks. Costs to renew intangibles are capitalized and amortized over the remaining useful life of the intangible. The Company continually evaluates the amortization period and carrying basis of patents and trademarks to determine whether any events or circumstances warrant a revised estimated useful life or reduction in value. Capitalized application costs are charged to operations when it is determined that the patent or trademark will not be obtained or is abandoned. In accordance with authoritative accounting guidance, costs related to the research and development of new software products and enhancements to existing software products are expensed as incurred until technological feasibility of the product has been established, at which time such costs are capitalized, subject to expected recoverability. For the years ended December 30, 2017 and December 31, 2016 , the Company did not capitalize any software development costs. For the year ended January 2, 2016 , the Company capitalized $0.5 million of software development costs. The capitalized costs are amortized over the estimated life of the products, which is generally seven years. For the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , the Company amortized $1.9 million , 0.1 million and $0.2 million of capitalized costs, respectively. The Company had unamortized software development costs of $0.8 million and $0.7 million at December 30, 2017 and December 31, 2016 , respectively, which is included within intangible assets, net, on the consolidated balance sheets. |
Impairment of Goodwill and Intangible assets | Impairment of Goodwill and Intangible assets Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the acquired net tangible and intangible assets. Goodwill is not amortized, but instead is tested at least annually for impairment, or more frequently when events or changes in circumstances indicate that goodwill might be impaired. In assessing goodwill impairment for each of its reporting units, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company’s qualitative assessment of the recoverability of goodwill considers various macroeconomic, industry-specific and company-specific factors, including: (i) severe adverse industry or economic trends; (ii) significant company-specific actions; (iii) current, historical or projected deterioration of the Company’s financial performance; or (iv) a sustained decrease in the Company’s market capitalization below its net book value. If, after assessing the totality of events or circumstances, the Company determines it is unlikely that the fair value of a reporting unit is less than its carrying amount, then a quantitative analysis is unnecessary. However, if the Company concludes otherwise, or if the Company elects to bypass the qualitative analysis, then the Company must perform a quantitative analysis that compares the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered impaired; otherwise, a goodwill impairment loss is recognized for the lesser of: (a) the amount that the carrying amount of a reporting unit exceeds its fair value; or (b) the amount of the goodwill allocated to that reporting unit. The Company performs its annual impairment test during the fourth fiscal quarter. The Company reviews identifiable intangible and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted operating cash flow expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount exceeds the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. During the year ended December 30, 2017 , the Company recorded an impairment charge of approximately $0.4 million related to certain software licenses that had not been placed in service. No impairment of goodwill, intangible assets or other long-lived assets was recorded during the years ended December 31, 2016 or January 2, 2016 . |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method, under which the Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for net operating loss and tax credit carryforwards. Tax positions that meet a more-likely-than-not recognition threshold are recognized in the first reporting period that it becomes more-likely-than-not such tax position will be sustained upon examination. A tax position that meets this more-likely-than-not recognition threshold is recorded at the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Previously recognized income tax positions that fail to meet the recognition threshold in a subsequent period are derecognized in that period. Differences between actual results and the Company’s assumptions, or changes in the Company’s assumptions in future periods, are recorded in the period they become known. The Company records potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. As a multinational corporation, the Company is subject to complex tax laws and regulations in various jurisdictions. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws themselves are subject to change as a result of changes in fiscal policy, changes in legislation, evolution of regulations and court rulings. Therefore, the actual liability for U.S. or foreign taxes may be materially different from the Company’s estimates, which could result in the need to record additional liabilities or potentially to reverse previously recorded tax liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. A valuation allowance is recorded against any deferred tax assets when, in the judgment of management, it is more likely than not that all or part of a deferred tax asset will not be realized. In assessing the need for a valuation allowance, the Company considers all positive and negative evidence, including recent financial performance, scheduled reversals of temporary differences, projected future taxable income, availability of taxable income in carryback periods and tax planning strategies. |
Revenue Recognition and Deferred Revenue | Revenue Recognition and Deferred Revenue The Company follows the current authoritative guidance for revenue recognition. Based on these requirements, the Company recognizes revenue from the sale of products or services when: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the price is fixed or determinable, and (iv) collectability is reasonably assured. In the case of the license or sale of software that does not function together with hardware components to provide the essential functionality of the hardware, revenue is recognized pursuant to the software revenue recognition guidance. The Company derives the majority of its revenue from four primary sources: (i) direct sales under long-term sensor purchase agreements with end-user hospitals where the Company provides up-front monitoring equipment at no up-front charge in exchange for a multi-year sensor purchase commitment, (ii) other direct sales of noninvasive monitoring solutions to end-user hospitals, emergency medical response organizations and other direct customers; (iii) sales of noninvasive monitoring solutions to distributors who then typically resell to end-user hospitals, emergency medical response organizations and other direct customers; and (iv) sales of integrated circuit boards to OEM customers who incorporate the Company’s embedded software technology into their multiparameter monitoring devices. The Company enters into agreements to sell its noninvasive monitoring solutions and services, sometimes as part of multiple deliverable arrangements that include various combinations of products and services. While the majority of the Company’s sales transactions contain standard business terms and conditions, there are some transactions that contain non-standard business terms and conditions. As a result, contract interpretation and analysis is sometimes required to determine the appropriate accounting, including: (i) how the arrangement consideration should be allocated among the deliverables when multiple deliverables exist, (ii) when to recognize revenue on the deliverables, and (iii) whether undelivered elements are essential to the functionality of the delivered elements. Changes in judgments on these assumptions and estimates could materially impact the timing of revenue recognition. In the case of multiple deliverable arrangements, the authoritative guidance provides a hierarchy to determine the selling price to be used for allocating revenue to deliverables as follows: (i) vendor-specific objective evidence (VSOE) of fair value, (ii) third-party evidence of selling price (TPE), and (iii) best estimate of the selling price (ESP). VSOE of fair value is defined as the price charged when the same element is sold separately. VSOE generally exists only when the deliverable is sold separately and is the price actually charged for that deliverable. TPE generally does not exist for the majority of the Company’s products. The objective of ESP is to determine the price at which the Company would transact a sale if the product was sold on a stand-alone basis. In the absence of VSOE and TPE, the Company determines ESP for its products by considering multiple factors including, but not limited to, features and functionality of the product, geographies, type of customer, contractual prices pursuant to Group Purchasing Organization (GPO) contracts, the Company’s pricing and discount practices, and market conditions. A deliverable in an arrangement qualifies as a separate unit of accounting if the delivered item has value to the customer on a stand-alone basis. Most of the Company’s products in a multiple deliverable arrangement qualify as separate units of accounting. In the case of the Company’s monitoring equipment containing embedded Masimo SET ® or rainbow SET ™ software, the Company has determined that the hardware and software components function together to deliver the equipment’s essential functionality and, therefore, represent a single deliverable. However, software deliverables, such as rainbow ® parameter software, which do not function together with hardware components to provide the equipment’s essential functionality, are accounted for under software revenue recognition guidance. The revenue for these multiple-element arrangements is allocated to the software deliverables and the non-software deliverables based on the relative selling prices of all of the deliverables in the arrangement using the hierarchy in the revenue recognition accounting guidance for arrangements with multiple deliverables. Sales under long-term sensor purchase contracts are generally structured such that the Company agrees to provide at no up-front charge certain monitoring-related equipment, software, installation, training and/or warranty support in exchange for the hospital’s agreement to purchase sensors over the term of the agreement, which generally ranges from three to six years. These contracts generally do not provide for any payments that are not dependent upon the Company’s future delivery of sensors, which are essential to the functionality of the monitoring equipment and, therefore, represent a substantive performance obligation. As a result, the Company generally does not recognize any revenue when the monitoring and related equipment and software are delivered to the hospitals, but rather recognizes revenue for these delivered elements on a pro-rata basis as the sensors are delivered under the long-term purchase commitment, when installation and training are complete. Accordingly, the cost of the monitoring and related equipment initially placed at the hospitals is deferred and amortized to cost of goods sold over the life of the underlying long-term sensor purchase contract. In cases where such contracts do provide for guaranteed payments that are unrelated to the future delivery of sensors, the Company recognizes the net present value of such payments as revenue from the monitoring and related equipment and expenses the cost of such equipment to cost of goods sold, as the equipment is delivered and when installation and training are complete. Some of the Company’s long-term sensor contracts also contain provisions for certain payments to be made directly to the end-user hospital customer at the inception of the arrangement. These payments are generally treated as prepaid discounts which are deferred and amortized on a straight-line basis as contra-revenue over the life of the underlying long-term sensor purchase contract. Many of the Company’s distributors purchase sensor products that they then resell to end-user hospitals that are typically fulfilling their purchase obligations to the Company under such end-user hospital’s long-term sensor purchase commitments. Upon shipment to the distributor, revenue is deferred until the distributor ships the product to the Company’s end-user customers based on an estimate of the inventory held by these distributors at the end of the accounting period. The Company also earns revenue from the sale of integrated circuit boards and other products, as well as from rainbow ® parameter software licenses, to OEMs under various agreements. Revenue from the sale of products to the OEMs is generally recognized at the time of shipment. Revenue related to software licenses to OEMs is generally recognized upon shipment of the OEM’s product to its customers, as represented to the Company by the OEM. The Company also provides certain customers with the ability to purchase sensors under rebate programs. Under these programs, the customers may earn rebates based on their purchasing activity. The Company estimates and provides allowances for these programs at the time of sale as a reduction to revenue. In general, customers do not have a right of return for credit or refund. However, the Company allows returns under certain circumstances. At the end of each period, the Company estimates and accrues for these returns as a reduction to revenue and accounts receivable. The Company estimates returns based on several factors, including contractual limitations and past returns history. The majority of the Company’s royalty revenue arises from one agreement with Medtronic plc (Medtronic, formerly Covidien Ltd.) and is due and payable quarterly based on U.S. sales of certain Medtronic products. An estimate of these royalty revenues is recorded quarterly in the period earned based on the prior quarter’s historical results, adjusted for any new information or trends known to management at the time of estimation. This estimated revenue is adjusted prospectively when the Company receives the Medtronic royalty report, approximately sixty days after the end of the previous quarter. The Company also recognizes revenue upon the achievement of pre-agreed milestones related to non-recurring engineering (NRE) services provided for a certain OEM customer. Costs incurred by the Company related to these NRE services are generally deferred until such time that the milestones are achieved and the associated revenue is recognized. |
Taxes Collected From Customers and Remitted to Governmental Authorities | Taxes Collected From Customers and Remitted to Governmental Authorities Pursuant to authoritative guidance, the Company’s policy is to present revenue net of taxes collected from customers and remitted to governmental authorities. |
Share-Based Compensation | tock-based Compensation The Company’s stock-based compensation awards are currently comprised of stock options, restricted stock units (RSUs) and performance share units (PSUs), all of which are equity-classified awards. For equity-classified awards granted on or after January 1, 2006, the Company estimates the fair value of the award on the date of grant and expenses stock-based compensation over the requisite service period. In the case of PSUs, the amount of expense recognized is also dependent upon the expected achievement level for the specified performance criteria. The fair value of RSU and PSU awards is the closing price of the Company’s common stock on the grant date. The fair value of stock option awards is calculated using the Black-Scholes option pricing model, which, in addition to taking into account the closing price of the Company’s common stock on the grant date and the option exercise price, requires the input of subjective assumptions. These assumptions include estimating the length of time employees will retain their stock options before exercising them, the estimated volatility of the Company’s stock price over the expected term and the number of options that will ultimately be forfeited prior to meeting their vesting requirements. The Company has elected to recognize stock-based compensation expense related to stock options on a straight-line basis over the requisite service period. |
Shipping and Handling Costs and Revenue | Shipping and Handling Costs and Revenue All shipping and handling costs are expensed as incurred and are recorded as a component of cost of goods sold in the accompanying consolidated statements of operations. Charges for shipping and handling billed to customers are included as a component of product revenue in accordance with authoritative accounting guidance. |
Product Warranty | Product Warranty The Company provides a warranty against defects in material and workmanship for a period ranging from six months to forty-eight months, depending on the product type. In the case of long-term sales agreements, the Company typically warranties the products for the term of the agreement, which ranges from three to six years. In traditional sales activities, including direct and OEM sales, the Company establishes an accrual for the estimated costs of warranty at the time of revenue recognition. Estimated warranty expenses are recorded as an accrued liability, with a corresponding provision to cost of goods sold. Revenue related to extended warranty coverage is recognized over the life of the contract and the related extended warranty costs are expensed as incurred. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred. These costs are included in selling, general and administrative expense in the accompanying consolidated statements of operations. Advertising costs for the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 were $12.8 million , $11.0 million and $10.7 million , respectively. |
Research and Development | Research and Development Costs related to research and development activities are expensed as incurred. These costs include personnel costs, materials, depreciation and amortization on associated tangible and intangible assets and an allocation of facility costs, all of which are directly related to research and development activities. |
Foreign Currency Translation | Foreign Currency Translation The Company’s international headquarters is in Switzerland, and its functional currency is the U.S. Dollar. The Company has several foreign sales support subsidiaries that maintain foreign offices, of which the largest are in Japan and Europe. The functional currencies of these subsidiaries are the Japanese Yen and Euro, respectively. The Company transacts with foreign customers in currencies other than the U.S. Dollar and, in doing so, experiences realized and unrealized foreign currency gains or losses on its foreign denominated receivables. In addition, certain intercompany transactions give rise to realized and unrealized foreign currency gains or losses. Also, any other transactions between the Company or its subsidiaries and a third-party, denominated in a currency different from the functional currency, are foreign currency transactions. Realized and unrealized foreign currency gains or losses are included as a component of non-operating (income) expense within the Company’s consolidated statements of operations as incurred and are converted to U.S. Dollars at average exchange rates for the respective period. These transactions resulted in losses of $0.3 million for the year ended December 30, 2017 , gains of approximately $0.1 million for the year ended December 31, 2016 and losses of approximately $0.5 million for the year ended January 2, 2016 . Assets and liabilities of foreign subsidiaries, whose functional currency is not the U.S. Dollar, are translated into U.S. Dollars at the rate of exchange at the balance sheet date. Statement of operations amounts are translated at the average monthly exchange rates for the respective periods. For these foreign subsidiaries whose functional currency is not the U.S. Dollar, translation gains and losses are included as a component of accumulated other comprehensive income (loss) within Masimo Corporation stockholders’ equity in the accompanying consolidated balance sheets |
Comprehensive Income | Comprehensive Income Authoritative accounting guidance establishes requirements for reporting and disclosure of comprehensive income and its components. Comprehensive income includes foreign currency translation adjustments and related tax benefits, which have been excluded from net income including noncontrolling interests and reflected in Masimo Corporation stockholders’ equity. |
Net Income Per Share | Net Income Per Share Basic net income per share attributable to Masimo Corporation stockholders is computed by dividing net income attributable to Masimo Corporation stockholders by the weighted-average number of shares outstanding during each reporting period. Diluted net income per share attributable to Masimo Corporation stockholders is computed by dividing the net income attributable to Masimo Corporation stockholders by the weighted-average number of shares and potential shares outstanding during each reporting period, if the effect of potential shares is dilutive. Potential shares include the incremental shares of stock issuable upon the assumed exercise of stock options and the expected vesting of stock awards as calculated under the treasury stock method. For the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 , weighted options to purchase 0.4 million , 0.2 million and 0.7 million shares of common stock, respectively, were outstanding, but were not included in the computation of diluted net income per share because the effect of including such shares would have been antidilutive. For the year ended December 30, 2017 , certain restricted stock units (RSUs) are considered contingently issuable shares as their vesting is contingent upon the occurrence of certain future events. These events have not occurred and are not considered probable of occurring as of December 30, 2017 . Therefore, 2.7 million of weighted average shares have been excluded from the calculation of potential shares. For additional information with respect to these RSUs, please see “Employment and Severance Agreements” in Note 17 to these consolidated financial statements. |
Segment Information | Segment Information The Company uses the “management approach” in determining reportable business segments. The management approach designates the internal organization used by management for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Based on this assessment, management has determined it operates in one reportable business segment, which is comprised of patient monitoring and related products |
New Accounting Pronouncement | Recently Adopted Accounting Pronouncements In May 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting (ASU 2017-09). The new standard is intended to reduce diversity in practice by reducing the complexity of modification accounting. The new standard clarifies that modification accounting should be applied if the award’s fair value, vesting conditions or classification as an equity or liability instrument has been changed. The amendments from this new standard are to be applied prospectively to an award modified on or after the adoption date. ASU 2017-09 is effective for annual and interim fiscal reporting periods beginning after December 15, 2017, and early adoption is permitted. The Company adopted this standard during the fourth quarter of the fiscal year ended December 30, 2017 and such adoption did not have any impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). The new standard eliminates the requirement to calculate the implied fair value of the goodwill to measure a goodwill impairment charge which is Step 2 in the current goodwill impairment test. Instead, the entity should recognize an impairment charge by which the carrying amount exceeds the reporting unit’s fair value not exceeding the total amount of goodwill allocated to that reporting unit. In addition, the entity should consider the income tax impact when measuring the goodwill impairment loss. ASU 2017-04 is effective for annual and interim fiscal reporting periods beginning after December 15, 2019, and early adoption is permitted. The Company adopted this standard during the fourth quarter of the fiscal year ended December 30, 2017 and such adoption did not have any impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01). The new standard clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. ASU 2017-01 is effective for annual and interim fiscal reporting periods beginning after December 15, 2017, and early adoption is permitted. The Company adopted this standard during the fourth quarter of the fiscal year ended December 30, 2017 and such adoption did not have any impact on the Company’s consolidated financial statements. In December 2016, the FASB issued ASU No. 2016-19, Technical Corrections and Improvements (ASU 2016-19) . The new standard is intended to provide clarity to the ASC or correct unintended application of the guidance that is not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. ASU 2016-19 is effective for annual and interim fiscal reporting periods beginning after December 15, 2017 with respect to the amendments that require transition guidance, and early adoption is permitted. All other amendments were effective on issuance. The Company adopted this standard during the fourth quarter of the fiscal year ended December 30, 2017 and such adoption did not have a material impact on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18) . The new standard is intended to reduce diversity in practice by adding or clarifying guidance on classification and presentation of changes in restricted cash on the statement of cash flows. ASU 2016-18 is effective for annual and interim fiscal reporting periods beginning after December 15, 2017, and early adoption is permitted. The Company adopted this standard during the fourth quarter of the fiscal year ended December 30, 2017 and such adoption did not have a material impact on the Company’s consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15) . The new standard amended the existing accounting standards for the Statement of Cash Flows and provides guidance on eight specific cash flow issues. ASU 2016-15 is effective for annual and interim fiscal reporting periods beginning after December 15, 2019, and early adoption is permitted. The Company adopted this standard during the fourth quarter of the fiscal year ended December 30, 2017 and such adoption did not have any impact on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09) . The new standard makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on stock-based compensation and the financial statement presentation of excess tax benefits or deficiencies. ASU 2016-09 also clarifies the statement of cash flows presentation for certain components of stock-based awards. The Company adopted this standard during the first quarter of the fiscal year ended December 31, 2016. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes (ASU 2015-17). The new standard requires entities to classify deferred tax liabilities and assets as noncurrent in a classified statement of financial position. ASU 2015-17 is effective for fiscal years beginning after December 15, 2016 and interim periods within those annual periods. The Company early adopted this standard retrospectively during the fourth quarter of the fiscal year ended January 2, 2016 and such adoption did not have a material impact on the Company’s consolidated financial statements. In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (ASU 2015-02) . The amended standard applies to entities in all industries and eliminates the deferral of certain consolidation standards for entities considered to be investment companies, as well as modifies the consolidation analysis performed on certain types of legal entities. ASU 2015-02 is effective for annual and interim fiscal reporting periods beginning after December 15, 2015, and may be applied retrospectively, with early adoption permitted. The Company adopted this standard during the first quarter of the fiscal year ended December 31, 2016, and its adoption did not have any impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements Pending Adoption In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory (ASU 2016-16) . The new standard eliminates the exception that allowed the income tax consequences of an intra-entity transfer of assets other than inventory to be deferred until the transferred asset was sold to a third party or otherwise recovered through use, and now requires recognition of such income tax consequences and the time the non-inventory asset is transferred. ASU 2016-16 is effective for annual and interim fiscal reporting periods beginning after December 15, 2017, and early adoption is permitted. The Company is currently evaluating the expected impact of this standard, but does not expect it to have a material impact on its consolidated financial statements upon adoption. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13) . The new standard requires entities to use a current expected credit loss model, which is a new impairment model based on expected losses rather than incurred losses. Under this model, an entity would recognize an impairment allowance equal to its current estimate of all contractual cash flows that the entity does not expect to collect. The entity’s estimate would consider relevant information about past events, current conditions, and reasonable and supportable forecasts. ASU 2016-13 is effective for annual and interim fiscal reporting periods beginning after December 15, 2019, with early adoption permitted for annual reporting periods beginning after December 15, 2018. The Company is currently evaluating the expected impact of this standard, but does not expect it to have a material impact on its consolidated financial statements upon adoption. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) : (ASU 2016-02) . The new standard requires lessees to recognize most leases on their balance sheets but continue to recognize lease expenses in their statement of operations in a manner similar to current practice. The new standard states that a lessee will recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. Expense related to leases determined to be operating leases will be recognized on a straight-line basis, while those determined to be financing leases will be recognized following a front-loaded expense profile in which interest and amortization are presented separately in the income statement. ASU 2016-02 is effective for annual and interim fiscal reporting periods beginning after December 15, 2018, and early application is permitted. The Company is currently evaluating the expected impact of Topic 842 on its consolidated financial statements, but anticipates that, among other things, the required recognition of a lease liability and related right-of-use asset will significantly increase both the assets and liabilities recognized and reported on its balance sheet. In addition, the Company expects that certain leases that are currently treated as “operating leases” will be treated as “sale type” leases under the new standard, resulting in the acceleration of revenue and costs for certain contracts, and the acceleration of certain costs without any related revenue acceleration for other contracts. The Company currently expects to complete its assessment of the full financial impact of the new lease accounting guidance during the next nine-to-twelve months and adopt the standard effective as of December 30, 2018. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01). This new standard requires that all equity instruments other than those accounted for under the equity method and those that result in consolidation of the investee and certain other investments are measured at fair value through earnings. Also, when the fair value option has been elected for financial liabilities, changes in fair value due to instrument-specific credit risk will be recognized separately in other comprehensive income. ASU 2016-01 is effective for annual fiscal reporting periods beginning after December 15, 2017, and early adoption is permitted for certain provisions. The Company is currently evaluating the expected impact of this standard, but does not expect it to have a material impact on its consolidated financial statements upon adoption. In May 2014, the FASB issued ASU No. 2014-09, Revenue (Topic 606): Revenue from Contracts with Customers (ASU 2014-09) . The new standard provides a single, principles-based five-step model to be applied to all contracts with customers while enhancing disclosures about revenue, providing additional guidance for transactions that were not previously addressed comprehensively and improving guidance for multiple-element arrangements. ASU 2014-09 will replace most existing revenue recognition guidance under GAAP when it becomes effective. The standard permits the use of either the retrospective or cumulative effect transition method upon adoption. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (ASU 2015-14) , which amended ASU 2014-09, providing for a one year deferral period for the implementation of ASU 2014-09. ASU 2014-09 will now be effective for annual and interim periods beginning on or after December 15, 2017. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations under FASB ASC Topic 606 (ASU 2016-08) , which provides guidance on principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606) – Identifying Performance Obligations and Licensing (ASU 2016-10) , which amended ASU 2014-09 by providing clarity in identifying performance obligations and licensing implementation guidance. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606) – Narrow-Scope Improvements and Practical Expedients (ASU 2016-12), which further amended ASU 2014-09 by providing additional clarity in recognizing revenue from contracts that have been modified prior to the transition period to the new standard, as well as providing additional disclosure requirements for businesses and other organizations that make the transition to the new standard by adjusting amounts from prior reporting periods via retrospective application. In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers (ASU 2016-20) . ASU 2016-20 affects narrow aspects of Topic 606, including contract modifications, contract costs, and the balance sheet classification of items as contract assets versus receivables. The Company is continuing to evaluate the expected impact of the new revenue guidance contained in Topic 606 on its consolidated financial statements. Although Topic 606 will not change the total revenue or operating earnings recognized over the life of the Company’s contracts, it will impact the timing for recognition of certain contract revenues and costs. Specifically, the Company expects that the adoption of Topic 606 will, among other things, result in the following: (a) the acceleration of certain revenue from product sales to distributors that is currently deferred under the “sell-through” method; (b) the acceleration of revenue related to certain software/parameter sales; (c) the acceleration of costs related to certain contracts where the future consideration will now be treated as an optional purchase; and (d) the capitalization and amortization of certain contract-related costs that are currently expensed when incurred. Topic 606 also includes expanded disclosure requirements, including the disaggregation of revenue, significant judgments made with regard to revenue recognition, information about remaining performance obligations and contract costs, among other disclosures. The Company’s ability to adopt the new revenue standard retrospectively is dependent upon the completion of the analysis of all of the information necessary to restate prior period financial statements and disclosures. Accordingly, the Company is continuing to evaluate its adoption method for this new standard. The Company anticipates that its internal control framework will not materially change upon adoption of the new standard, but certain existing internal controls will be modified and augmented, as necessary, to consider the Company’s new revenue recognition policy and required disclosures effective as of December 31, 2017. As the Company implements this new standard, it will continue to develop additional internal controls to ensure that it adequately evaluates its contracts under the five-step model and accurately reports its current and any required prior-period operating results, as well as all required disclosures. When adopted, the Company expects to recognize a cumulative increase to retained earnings of between $15.0 million to $20.0 million as of December 30, 2017. |
Legal Costs, Policy [Policy Text Block] | Litigation Costs and Contingencies The Company records a charge equal to at least the minimum estimated liability for a loss contingency or litigation settlement when both of the following conditions are met: (i) information available prior to issuance of the financial statements indicates that it is probable that a liability had been incurred at the date of the financial statements, and (ii) the range of loss can be reasonably estimated. The determination of whether a loss contingency or litigation settlement is probable or reasonably possible involves a significant amount of management judgment, as does the estimation of the range of loss given the nature of contingencies. Liabilities related to litigation settlements with multiple elements are recorded based on the fair value of each element. Legal and other litigation related expenses are recognized as the services are provided. The Company records insurance and other indemnity recoveries for litigation expenses when both of the following conditions are met: (a) the recovery is probable, and (b) collectability is reasonably assured. Insurance recoveries are only recorded to the extent the litigation costs to which they relate have been incurred and recognized in the financial statements. On November 5, 2016, the Company entered into a settlement agreement (Philips Settlement Agreement) with Koninklijke Philips N.V. (Philips N.V.), which, among other things, settled all of the claims, legal proceedings and contractual disputes between the Company, Philips N.V. and its affiliates. Pursuant to the Philips Settlement Agreement, Philips N.V. paid us $300 million , $30 million of which related to certain future performance obligations by the Company and, therefore, was deferred to future periods in accordance with authoritative accounting guidance. See Note 17 - Commitments and Contingencies under the caption “ Litigation ” for additional information on this matter. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Accounting Policies [Abstract] | |
Components of Property and Equipment | Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over estimated useful lives as follows: Useful Lives Aircraft and components 10 to 20 years Buildings 39 years Building improvements 7 to 15 years Computer equipment 2 to 6 years Demonstration units 3 years Furniture and office equipment 2 to 6 years Leasehold improvements Lesser of useful life or term of lease Machinery and equipment 5 to 7 years Vehicles 5 years Tooling 3 years Property and equipment, net consists of the following (in thousands): December 30, December 31, Building and building improvements $ 87,999 $ 85,966 Machinery and equipment 47,556 41,683 Aircraft and vehicles 25,329 45 Land 23,762 23,762 Computer equipment 15,789 13,549 Tooling 13,754 12,895 Leasehold improvements 15,326 8,289 Furniture and office equipment 9,967 9,669 Demonstration units 486 448 Construction-in-progress (CIP) 6,365 7,923 Total property and equipment 246,333 204,229 Accumulated depreciation and amortization (82,237 ) (68,233 ) Total property and equipment, net $ 164,096 $ 135,996 |
Changes in Product Warranty Accrual | Changes in the product warranty accrual were as follows (in thousands): Year Ended December 30, December 31, January 2, Warranty accrual, beginning of period $ 910 $ 1,222 $ 1,416 Accrual for warranties issued (including specific accrual) 1,061 871 800 Changes in pre-existing warranties (including changes in estimates) 332 110 61 Settlements made (1,154 ) (1,293 ) (1,055 ) Warranty accrual, end of period $ 1,149 $ 910 $ 1,222 |
Computation of Basic and Diluted Net Income Per Share | The computation of basic and diluted net income per share attributable to Masimo Corporation stockholders is as follows (in thousands, except per share data): Year ended December 30, December 31, January 2, Net income attributable to stockholders of Masimo Corporation: Net income including noncontrolling interest $ 131,616 $ 300,666 $ 81,500 Net income (loss) attributable to noncontrolling interest — — (1,800 ) Net income attributable to Masimo Corporation stockholders $ 131,616 $ 300,666 $ 83,300 Basic net income per share attributable to Masimo Corporation stockholders: Net income attributable to Masimo Corporation stockholders $ 131,616 $ 300,666 $ 83,300 Weighted-average shares outstanding - basic 51,516 49,530 51,311 Basic net income per share attributable to Masimo Corporation stockholders $ 2.55 $ 6.07 $ 1.62 Diluted net income per share attributable to Masimo Corporation stockholders: Weighted-average shares outstanding 51,516 49,530 51,311 Diluted share equivalents: stock options and RSUs 4,358 3,665 2,396 Weighted-average shares outstanding - diluted 55,874 53,195 53,707 Diluted net income per share attributable to Masimo Corporation stockholders $ 2.36 $ 5.65 $ 1.55 |
Supplemental Schedule of Cash Flow | Supplemental Cash Flow Information (in thousands) Year ended December 30, December 31, January 2, Cash paid during the year for: Interest (net of amounts capitalized) $ 551 $ 4,052 $ 2,293 Income taxes 91,061 31,230 36,194 Noncash investing and financing activities: Unpaid purchases of property, plant and equipment 1,559 2,009 4,371 Unsettled common stock proceeds 161 165 — Unsettled common stock repurchases 1,988 — 4,815 Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 315,302 $ 305,970 $ 132,317 Restricted cash 181 2,228 145 Total cash, cash equivalents and restricted cash shown in the statement of cash flow $ 315,483 $ 308,198 $ 132,462 |
Variable Interest Entities (V30
Variable Interest Entities (VIEs) (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Variable Interest Entity [Abstract] | |
Condensed Consolidating Schedules of Balance Sheets | The consolidating statement of operations for the year ended January 2, 2016 reflecting the Company, Cercacor and related eliminations (in thousands) are as follows: |
Condensed Consolidating Schedules of Statements of Comprehensive Income | Year ended Consolidating Statements of Operations: Masimo Cercacor Cercacor Total Total revenue $ 630,111 $ 6,910 $ (6,910 ) $ 630,111 Cost of goods sold 226,788 — (6,660 ) 220,128 Gross profit 403,323 6,910 (250 ) 409,983 Operating expenses: Selling, general and administrative 250,627 2,348 (250 ) 252,725 Research and development 50,292 6,325 — 56,617 Litigation settlement, award and/or defense costs (19,609 ) — — (19,609 ) Total operating expenses 281,310 8,673 (250 ) 289,733 Operating income (loss) 122,013 (1,763 ) — 120,250 Non-operating expense (income) 3,910 (571 ) 566 3,905 Income (loss) before provision for income taxes 118,103 (1,192 ) (566 ) 116,345 Provision for income taxes 34,803 42 — 34,845 Net income (loss) including noncontrolling interests 83,300 (1,234 ) (566 ) 81,500 Net income (loss) attributable to noncontrolling interests — — (1,800 ) (1,800 ) Net income (loss) attributable to Masimo Corporation stockholders $ 83,300 $ (1,234 ) $ 1,234 $ 83,300 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Components of Inventory | Inventories consist of the following (in thousands): December 30, December 31, Raw materials $ 31,200 $ 32,647 Work-in-process 8,619 7,701 Finished goods 56,125 32,194 Total $ 95,944 $ 72,542 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | December 30, December 31, Prepaid expenses $ 17,073 $ 13,051 Royalties receivable 7,400 7,500 Employee loans and advances 364 305 Due from related party 39 77 Restricted cash (1) 33 2,081 Other current assets 3,161 3,053 Total other current assets $ 28,070 $ 26,067 ________ (1) Restricted cash is comprised of funds received from the Bill and Melinda Gates Foundation. As the Company incurs costs associated with research and development related to this project, on a quarterly basis, the Company reclasses amounts from the grant to offset costs incurred. During the fourth quarter of fiscal year 2017, the Company recorded a net charge of approximately $10.5 million related to arbitration proceedings that it initiated against a foreign appointed agent seeking to collect amounts that were paid by a foreign government customer to such agent in connection with a foreign government tender, but which have not been remitted to the Company in accordance with the agency agreement. The receivable from the agent had been previously been reclassified into Other Current Assets from Accounts Receivable during the third quarter of fiscal year 2017 when the Company became aware of the customer payments to the agent. (See “Litigation” under Note 17 for additional information on this matter.) Other assets, long-term consist of the following (in thousands): December 30, December 31, Prepaid rebates $ 6,114 $ 5,933 Prepaid deposits 3,286 2,943 Long term investments 1,234 200 Restricted cash (1) 148 147 Total other assets, long-term $ 10,782 $ 9,223 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Components of Property and Equipment | Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over estimated useful lives as follows: Useful Lives Aircraft and components 10 to 20 years Buildings 39 years Building improvements 7 to 15 years Computer equipment 2 to 6 years Demonstration units 3 years Furniture and office equipment 2 to 6 years Leasehold improvements Lesser of useful life or term of lease Machinery and equipment 5 to 7 years Vehicles 5 years Tooling 3 years Property and equipment, net consists of the following (in thousands): December 30, December 31, Building and building improvements $ 87,999 $ 85,966 Machinery and equipment 47,556 41,683 Aircraft and vehicles 25,329 45 Land 23,762 23,762 Computer equipment 15,789 13,549 Tooling 13,754 12,895 Leasehold improvements 15,326 8,289 Furniture and office equipment 9,967 9,669 Demonstration units 486 448 Construction-in-progress (CIP) 6,365 7,923 Total property and equipment 246,333 204,229 Accumulated depreciation and amortization (82,237 ) (68,233 ) Total property and equipment, net $ 164,096 $ 135,996 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Components of Intangible Assets | Intangible assets, net consist of the following (in thousands): December 30, December 31, Cost Patents $ 20,623 $ 19,950 Customer relationships 7,669 7,669 Licenses 7,500 7,500 Acquired technology 5,580 5,580 Trademarks 4,036 3,777 Capitalized software development costs 2,699 2,539 Other 3,691 3,674 Total cost 51,798 50,689 Accumulated amortization Patents (8,473 ) (7,427 ) Customer relationships (4,154 ) (3,387 ) Licenses (4,831 ) (4,245 ) Acquired technology (3,066 ) (2,508 ) Trademarks (1,611 ) (1,331 ) Capitalized software development costs (1,864 ) (1,766 ) Other (676 ) (649 ) Total accumulated amortization (24,675 ) (21,313 ) Net carrying amount $ 27,123 $ 29,376 |
Estimated Amortization Expense | Estimated amortization expense for each of the next fiscal years is as follows (in thousands): Fiscal year Amount 2017 $ 5,420 2018 4,958 2019 3,817 2020 3,435 2021 1,768 Thereafter 7,725 Total $ 27,123 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Goodwill | Changes in the goodwill balance were as follows (in thousands): December 30, December 31, Goodwill, beginning of period $ 19,780 $ 20,394 Foreign currency translation adjustment 837 (614 ) Goodwill, end of period $ 20,617 $ 19,780 |
Other Assets, Long-Term (Tables
Other Assets, Long-Term (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Other Assets, Noncurrent | Other Assets, Long-Term Other assets, long-term consist of the following (in thousands): December 30, December 31, Prepaid rebates $ 6,114 $ 5,933 Prepaid deposits 3,286 2,943 Long term investments 1,234 200 Restricted cash (1) 148 147 Total other assets, long-term $ 10,782 $ 9,223 _______ (1) Restricted cash long term is related to funds received as part of a multi-year grant. See Note 6 to these consolidated financial statements for additional details. |
Schedule of Other Assets | December 30, December 31, Prepaid expenses $ 17,073 $ 13,051 Royalties receivable 7,400 7,500 Employee loans and advances 364 305 Due from related party 39 77 Restricted cash (1) 33 2,081 Other current assets 3,161 3,053 Total other current assets $ 28,070 $ 26,067 ________ (1) Restricted cash is comprised of funds received from the Bill and Melinda Gates Foundation. As the Company incurs costs associated with research and development related to this project, on a quarterly basis, the Company reclasses amounts from the grant to offset costs incurred. During the fourth quarter of fiscal year 2017, the Company recorded a net charge of approximately $10.5 million related to arbitration proceedings that it initiated against a foreign appointed agent seeking to collect amounts that were paid by a foreign government customer to such agent in connection with a foreign government tender, but which have not been remitted to the Company in accordance with the agency agreement. The receivable from the agent had been previously been reclassified into Other Current Assets from Accounts Receivable during the third quarter of fiscal year 2017 when the Company became aware of the customer payments to the agent. (See “Litigation” under Note 17 for additional information on this matter.) Other assets, long-term consist of the following (in thousands): December 30, December 31, Prepaid rebates $ 6,114 $ 5,933 Prepaid deposits 3,286 2,943 Long term investments 1,234 200 Restricted cash (1) 148 147 Total other assets, long-term $ 10,782 $ 9,223 |
Accrued and Other Liabilities (
Accrued and Other Liabilities (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Accrued Liabilities | 11. Accrued and Other Liabilities Accrued liabilities consist of the following (in thousands): December 30, December 31, Accrued customer rebates, fees and reimbursements $ 16,896 $ 10,673 Accrued taxes 6,711 5,135 Contract related payable 3,683 3,893 Accrued stock repurchases 1,988 — Related party payable 1,529 525 Accrued warranty 1,149 910 Accrued legal fees 975 1,362 Accrued other 5,121 5,768 Total accrued liabilities $ 38,052 $ 28,266 |
Other Liabilities, Long-Term (T
Other Liabilities, Long-Term (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Components of Other Liabilities | Other long-term liabilities consist of the following (in thousands): December 30, December 31, Income tax payable, long-term $ 25,734 $ — Unrecognized tax benefit 14,348 13,442 Deferred tax liability, long-term 9,880 340 Deferred rent, long-term 1,266 558 Other 292 247 Total other liabilities, long-term $ 51,520 $ 14,587 |
Stock Repurchase Program Stock
Stock Repurchase Program Stock Repurchase Program Table (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Equity [Abstract] | |
Schedule of Stock by Class | The following table provides a summary of the Company’s stock repurchase activities during the years ended December 30, 2017 , December 31, 2016 and January 2, 2016 (in thousands, except per share amounts): Years Ended December 30, December 31, January 2, Shares repurchased 804 1,496 4,148 Average cost per share $ 84.90 $ 42.39 $ 37.36 Value of shares repurchased $ 68,260 $ 63,403 $ 154,967 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended | |
Dec. 30, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Schedule of Nonvested Performance-based Units Activity [Table Text Block] | The number of PSUs outstanding under all of the Company’s equity plans are as follows (in thousands, except for grant date fair value amounts): Year ended Year ended Year ended Units Weighted Average Units Weighted Average Units Weighted Average PSUs outstanding, beginning of period — $ — — $ — — $ — Granted 248 90.71 — — — — Canceled (15 ) 90.87 — — — Expired — — — — — — Vested — — — — — — PSUs outstanding, end of period 233 $ 90.70 — $ — — $ — | |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | The number of RSUs issued and outstanding under all of the Company’s equity plans are as follows (in thousands, except for grant date fair value amounts): Year ended Year ended Year ended Units Weighted Average Units Weighted Average Units Weighted Average RSUs outstanding, beginning of period 2,706 $ 95.40 2,703 $ 41.45 — $ — Granted 33 86.42 6 43.09 2,703 41.45 Canceled (25 ) 85.79 — — — — Expired — — — — — — Vested (6 ) 43.09 (3 ) 41.45 — — RSUs outstanding, end of period 2,708 $ 95.51 2,706 $ 41.45 2,703 $ 41.45 | |
Number and Weighted Average Exercise Price of Options Issued and Outstanding under All Stock Option Plans | number and weighted-average exercise price of stock options issued and outstanding under all stock plans, is presented below (in thousands, except for exercise price): Year ended Year ended Year ended Shares Average Shares Average Exercise Price Shares Average Options outstanding, beginning of period 8,521 $ 28.56 9,202 $ 25.46 9,956 $ 23.59 Granted 928 86.69 1,290 39.94 914 36.18 Canceled (250 ) 38.59 (172 ) 29.13 (218 ) 24.33 Expired — — — — — — Exercised (2,246 ) 27.63 (1,799 ) 20.76 (1,450 ) 19.54 Options outstanding, end of period 6,953 $ 36.26 8,521 $ 28.56 9,202 $ 25.46 Options exercisable, end of period 3,812 $ 26.28 4,988 $ 26.33 5,609 $ 24.72 | |
Number and Weighted Average Exercise Price of Outstanding and Exercisable Options | The number and weighted-average exercise price of outstanding and exercisable stock options segregated by exercise price ranges (in thousands, except range of exercise prices and remaining contractual life) were as follows: Year ended Year ended Options Outstanding Options Exercisable Options Outstanding Options Exercisable Range of Exercise Prices Number of Options Average Remaining Contractual Life Number of Options Number of Options Average Remaining Contractual Life Number of Options $8.00 to $25.00 2,555 4.62 1,999 3,432 5.28 2,301 $25.01 to $40.00 3,224 5.80 1,712 4,664 5.65 2,526 $40.01 to $55.00 199 7.12 86 341 6.44 161 $55.01 to $70.00 94 8.80 15 84 9.76 — $70.01 to $85.00 74 9.68 — — 0 — $85.01 to $105.00 807 9.57 — — 0 — Total 6,953 5.92 3,812 8,521 5.57 4,988 | |
Range of Assumptions Used and Resulting Weighted-Average Fair Value of Options Granted at Date of Grant | The range of assumptions used and the resulting weighted-average fair value of stock options granted at the date of grant were as follows: Year ended Year ended Year ended Risk-free interest rate 1.7% to 2.2% 1.0% to 2.1% 1.3% to 1.9% Expected term 5.5 years to 5.6 years 5.5 years to 5.7 years 5.5 years to 5.7 years Estimated volatility 29.7% to 32.1% 29.8% to 35.7% 32.0% to 37.4% Expected dividends 0% 0% 0% Weighted-average fair value of options granted $27.81 per share $13.64 per share $12.20 per share | |
Total Share-Based Compensation Expense Included in Consolidated Statements of Comprehensive Income | The following table presents the total stock-based compensation expense that is included in each functional line item of the consolidated statements of operations (in thousands): Year ended Year ended Year ended Cost of goods sold $ 351 $ 355 $ 348 Selling, general and administrative 13,272 9,443 8,139 Research and development 3,564 2,705 2,338 Total $ 17,187 $ 12,503 $ 10,825 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Components of Income Before Provision for Income Taxes | The components of income before provision for income taxes are as follows (in thousands): Year ended Year ended Year ended United States $ 171,564 $ 320,702 $ 87,762 Foreign 27,810 97,639 28,583 Total $ 199,374 $ 418,341 $ 116,345 |
Current and Deferred Provision (Benefit) for Income Taxes | The following table presents the current and deferred provision (benefit) for income taxes (in thousands): Year ended Year ended Year ended Current: Federal $ 38,777 $ 99,533 $ 31,983 State 1,940 6,922 2,388 Foreign 3,018 5,815 2,448 43,735 112,270 36,819 Deferred: Federal 27,002 2,982 (900 ) State (3,001 ) 2,331 (1,206 ) Foreign 22 92 132 24,023 5,405 (1,974 ) Total $ 67,758 $ 117,675 $ 34,845 |
Reconciliation of U.S. Federal Statutory Tax Rate to Company's Effective Tax Rate | The reconciliation of the U.S. federal statutory tax rate to the Company’s effective tax rate is as follows: Year ended Year ended Year ended Statutory regular federal income tax rate 35.0 % 35.0 % 35.0 % State provision, net of federal benefit (0.3 ) 1.4 0.7 Nondeductible items 1.8 0.8 1.7 Foreign income taxed at different rates (3.4 ) (5.6 ) (6.3 ) Tax credits (2.0 ) (0.5 ) (1.7 ) Change in federal valuation allowance — — 0.4 Impact of 2017 Tax Act 18.5 — — Withholding taxes on undistributed foreign earnings 3.3 — — Excess stock based compensation (18.9 ) (3.0 ) — Other — — 0.2 Total 34.0 % 28.1 % 30.0 % |
Components of Deferred Tax Assets | The components of the deferred tax assets are as follows (in thousands): December 30, December 31, Deferred tax assets: Tax credits $ 6,414 $ 802 Deferred revenue 3,831 5,393 Accrued liabilities 9,414 16,244 Stock-based compensation 8,601 18,680 Other 237 1,902 Total 28,497 43,021 Valuation allowance — — Total deferred tax assets 28,497 43,021 Deferred tax liabilities: Property and equipment (2,988 ) (2,691 ) State taxes and other (1,990 ) (1,695 ) Withholding taxes on undistributed foreign earnings (9,500 ) — Total deferred tax liabilities (14,478 ) (4,386 ) Net deferred tax assets $ 14,019 $ 38,635 |
Reconciliation of Total Amounts of Unrecognized Tax Benefits | The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands): Year ended Year ended Unrecognized tax benefits (gross), beginning of period $ 14,494 $ 8,875 Amounts related to Cercacor from prior year — (277 ) Increase from tax positions in prior period 498 143 Increase from tax positions in current period 2,142 6,437 Settlements — (296 ) Lapse of statute of limitations (977 ) (388 ) Unrecognized tax benefits (gross), end of period $ 16,157 $ 14,494 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Lease Payments Under Operating and Capital Leases | Future minimum lease payments, including interest, under operating leases for each of the following fiscal years ending on or about December 31 are (in thousands): Fiscal year Total 2018 $ 6,748 2019 5,493 2020 3,184 2021 2,597 2022 1,816 Thereafter 5,467 Total $ 25,305 |
Segment Information and Enter43
Segment Information and Enterprise Reporting (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block] | The following schedule presents an analysis of the Company’s product revenue based upon the geographic area to which the product was shipped (in thousands): Year ended Year ended Year ended Geographic area by destination United States $ 506,815 68.4 % $ 465,588 70.1 % $ 421,628 70.3 % Europe, Middle East and Africa 138,075 18.6 112,273 16.9 105,323 17.6 Asia and Australia 72,449 9.8 65,955 10.0 55,675 9.3 North and South America (excluding United States) 23,985 3.2 20,030 3.0 16,708 2.8 Total Product Revenue $ 741,324 100 % $ 663,846 100 % $ 599,334 100.0 % |
Long-lived Assets by Geographic Areas [Table Text Block] | Year ended Year ended Year ended Long-lived assets by geographic area United States $ 263,860 96.1 % $ 216,784 96.3 % $ 203,553 96.8 % International 10,618 3.9 8,383 3.7 6,770 3.2 Total $ 274,478 100.0 % $ 225,167 100.0 % $ 210,323 100.0 % |
Quarterly Financial Data (una44
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data | The following tables contain selected unaudited consolidated statements of operations data for each quarter of 2017 and 2016 (in thousands, except per share data): Quarters Ended Fiscal 2017 April 1, July 1, September 30, December 30, Total revenue $ 186,302 $ 192,933 $ 193,692 $ 225,181 Gross profit 124,134 128,437 128,665 153,864 Operating income 43,195 46,868 47,975 59,323 Net income 45,334 46,680 39,235 367 Net income per share Basic (1) $ 0.90 $ 0.90 $ 0.75 $ 0.01 Diluted $ 0.82 $ 0.83 $ 0.70 $ 0.01 Quarters Ended Fiscal 2016 April 2, July 2, October 1, January 2, Total revenue $ 171,167 $ 172,636 $ 167,621 $ 183,201 Gross profit 114,213 115,135 110,122 124,329 Operating income 37,337 36,429 36,604 310,400 (2) Net income 27,577 30,023 27,773 215,293 (3) Net income per share Basic (1) $ 0.56 $ 0.61 $ 0.56 $ 4.31 Diluted (1) $ 0.53 $ 0.57 $ 0.52 $ 3.97 (1) The sum of the basic earnings per share numbers for each quarter do not equal the basic earnings per share number for the entire year due to quarterly rounding. (2) On November 5, 2016, the Company entered into the Philips Settlement Agreement, pursuant to which Philips N.V. agreed to pay the Company $300 million. Per the terms of the agreement, $270 million of this settlement is included within Operating income for the quarter ended December 31, 2016. See Note 2 - Summary of Significant Accounting Policies under the subheading “ Litigation Costs and Contingencies ” and Note 17 - Commitments and Contingencies under the subheading “ Litigation ” for additional information on the Phillips Settlement Agreement. (3) Due to the significant impact of the Philips Settlement Agreement on the fourth quarter results, the sum of the basic and diluted earnings per share numbers for each quarter will not equal the basic and diluted earnings per share number for the entire year. |
Summary of Significant Accoun45
Summary of Significant Accounting Policies - Useful Life (Details) $ in Millions | 12 Months Ended |
Dec. 30, 2017USD ($) | |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Retained Earnings, Cumulative Effect, Full Retrospective Method | $ 15 |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Retained Earnings, Cumulative Effect, Full Retrospective Method | $ 20 |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 39 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 5 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 7 years |
Vehicles | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 5 years |
Tooling | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Computer equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 2 years |
Computer equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 6 years |
Furniture and office equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 2 years |
Furniture and office equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 6 years |
Demonstration units | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Building and land improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 7 years |
Building and land improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 15 years |
Summary of Significant Accoun46
Summary of Significant Accounting Policies - Additional Information (Detail) shares in Millions | Nov. 05, 2016USD ($) | Dec. 30, 2017USD ($)segmentshares | Dec. 31, 2016USD ($)shares | Jan. 02, 2016USD ($)shares | Jan. 03, 2015USD ($) |
Summary Of Significant Accounting Policies [Line Items] | |||||
Cash and cash equivalents | $ 315,302,000 | $ 305,970,000 | $ 132,317,000 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 315,483,000 | 308,198,000 | 132,462,000 | $ 134,604,000 | |
Accounts receivable, net of allowance for doubtful accounts | 121,309,000 | 101,667,000 | |||
Accumulated depreciation and amortization on property and equipment | 15,200,000 | 13,000,000 | 11,800,000 | ||
Accumulated amortization | 24,675,000 | 21,313,000 | |||
Cost of patents, Gross | 4,300,000 | 5,000,000 | |||
Cost of trademarks, Gross | $ 600,000 | 600,000 | |||
Capitalized Software Development Costs for Software Sold to Customers | 0 | 500,000 | $ 500,000 | ||
Product life estimate | 7 years | ||||
Capitalized Computer Software, Amortization | $ 1,900,000 | 100,000 | 200,000 | ||
Unamortized cost by company | 800,000 | 700,000 | |||
Impairment of goodwill, intangible assets and other long-lived assets | $ 400,000 | 0 | 0 | ||
Number of Sources of Product Revenue | segment | 4 | ||||
Royalty Revenue, Number of Days Royalty Revenue is Adjusted Subsequent to Quarter End | 60 days | ||||
Advertising costs | $ 12,800,000 | 11,000,000 | 10,700,000 | ||
Foreign currency transaction gain (loss) | $ 300,000 | $ 100,000 | $ 500,000 | ||
Options to purchase of shares of common stock | shares | 0.4 | 0.2 | 0.7 | ||
Number of reportable segments | segment | 1 | ||||
Patents | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Estimated life maximum | 10 years | ||||
Accumulated amortization | $ 8,473,000 | $ 7,427,000 | |||
Total renewal costs capitalized | $ 200,000 | 600,000 | |||
Weighted average number of years until the next renewal | 1 year | ||||
Trademarks | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Estimated life maximum | 17 years | ||||
Accumulated amortization | $ 1,611,000 | 1,331,000 | |||
Total renewal costs capitalized | $ 600,000 | ||||
Weighted average number of years until the next renewal | 6 years | ||||
Patents and trademarks | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Accumulated amortization | $ 4,900,000 | $ 3,800,000 | $ 4,200,000 | ||
Minimum | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Retained Earnings, Cumulative Effect, Full Retrospective Method | $ 15,000,000 | ||||
Product life estimate | 3 years | ||||
Warranty period for defects in material and workmanship | 6 months | ||||
Maximum | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Retained Earnings, Cumulative Effect, Full Retrospective Method | $ 20,000,000 | ||||
Product life estimate | 6 years | ||||
Warranty period for defects in material and workmanship | 48 months | ||||
Restricted Stock Units (RSUs) | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Weighted Average Number of Shares, Contingently Issuable | shares | 2.7 | ||||
Masimo vs Philips N.V. [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Litigation Settlement, Amount (Deprecated 2017-01-31) | $ 300,000,000 | ||||
Collaborative Arrangement, Rights and Obligations | 30 | ||||
Buildings and Improvements | Minimum | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment, useful life | 7 years | ||||
Buildings and Improvements | Maximum | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment, useful life | 15 years | ||||
Machinery and equipment | Minimum | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment, useful life | 5 years | ||||
Machinery and equipment | Maximum | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment, useful life | 7 years | ||||
Computer equipment | Minimum | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment, useful life | 2 years | ||||
Computer equipment | Maximum | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment, useful life | 6 years | ||||
Furniture and Office Equipment | Minimum | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment, useful life | 2 years | ||||
Furniture and Office Equipment | Maximum | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment, useful life | 6 years |
Summary of Significant Accoun47
Summary of Significant Accounting Policies - Changes in Product Warranty Accrual (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | |||
Warranty accrual, beginning of period | $ 910 | $ 1,222 | $ 1,416 |
Provision for warranty costs | 1,061 | 871 | 800 |
Changes in pre-existing warranties (including changes in estimates) | (332) | (110) | (61) |
Settlements made | (1,154) | (1,293) | (1,055) |
Warranty accrual, end of period | $ 1,149 | $ 910 | $ 1,222 |
Summary of Significant Accoun48
Summary of Significant Accounting Policies - Computation of Basic and Diluted Net Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Net income attributable to stockholders of Masimo Corporation: | |||||||||||
Net income including noncontrolling interest | $ 131,616 | $ 300,666 | $ 81,500 | ||||||||
Net loss attributable to noncontrolling interest | 0 | 0 | (1,800) | ||||||||
Basic net income per share attributable to Masimo Corporation stockholders: | |||||||||||
Net income | $ 367 | $ 39,235 | $ 46,680 | $ 45,334 | $ 215,293 | $ 27,773 | $ 30,023 | $ 27,577 | $ 131,616 | $ 300,666 | $ 83,300 |
Weighted-average shares outstanding | 51,516 | 49,530 | 51,311 | ||||||||
Basic net income per share attributable to Masimo Corporation stockholders | $ 0.01 | $ 0.75 | $ 0.90 | $ 0.90 | $ 4.31 | $ 0.56 | $ 0.61 | $ 0.56 | $ 2.55 | $ 6.07 | $ 1.62 |
Diluted net income per share attributable to Masimo Corporation stockholders: | |||||||||||
Weighted-average shares outstanding | 51,516 | 49,530 | 51,311 | ||||||||
Diluted share equivalents: stock options and RSUs | 4,358 | 3,665 | 2,396 | ||||||||
Weighted-average shares outstanding - diluted | 55,874 | 53,195 | 53,707 | ||||||||
Diluted net income per share attributable to Masimo Corporation stockholders | $ 0.01 | $ 0.70 | $ 0.83 | $ 0.82 | $ 3.97 | $ 0.52 | $ 0.57 | $ 0.53 | $ 2.36 | $ 5.65 | $ 1.55 |
Summary of Significant Accoun49
Summary of Significant Accounting Policies-Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Cash paid during the year for: | ||||
Interest (net of amounts capitalized) | $ 551 | $ 4,052 | $ 2,293 | |
Income taxes | 91,061 | 31,230 | 36,194 | |
Noncash investing and financing activities: | ||||
Unpaid purchases of property, plant and equipment | 1,559 | 2,009 | 4,371 | |
Proceeds from stock options exercised, unsettled at period end | 161 | 165 | 0 | |
Stock repurchased, unsettled at period end | 1,988 | 0 | 4,815 | |
Cash and cash equivalents | 315,302 | 305,970 | 132,317 | |
Restricted Cash | 181 | 2,228 | 145 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 315,483 | $ 308,198 | $ 132,462 | $ 134,604 |
Variable Interest Entities (V50
Variable Interest Entities (VIEs) - Additional Information (Detail) | Jan. 02, 2007company | Jul. 31, 2015USD ($) | Dec. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Jan. 02, 2016USD ($) |
Variable Interest Entity [Line Items] | |||||
Number of Companies with Rights to Intellectual Property | company | 2 | ||||
Patent and Licensing Fee - Aggregate | $ 2,400,000 | ||||
Variable Interest Entity, Primary Beneficiary [Member] | |||||
Variable Interest Entity [Line Items] | |||||
Minimum aggregate royalty payments | $ 8,000,000 | $ 6,400,000 | $ 6,700,000 | ||
Payment for Administrative Fees | 200,000 | 200,000 | 200,000 | ||
Variable Interest Entity, Primary Beneficiary [Member] | Minimum | |||||
Variable Interest Entity [Line Items] | |||||
Minimum aggregate royalty payments | 5,000,000 | ||||
Development Partner [Member] [Member] | |||||
Variable Interest Entity [Line Items] | |||||
Related Party Transaction, Amounts of Transaction | $ 0 | $ 255,000 | $ 200,000 |
Variable Interest Entities (V51
Variable Interest Entities (VIEs) - Condensed Consolidating Schedules of Statements of Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Statement of Comprehensive Income [Abstract] | |||||||||||
Total revenue | $ 225,181 | $ 193,692 | $ 192,933 | $ 186,302 | $ 183,201 | $ 167,621 | $ 172,636 | $ 171,167 | $ 798,108 | $ 694,625 | $ 630,111 |
Cost of goods sold | 263,008 | 230,826 | 220,128 | ||||||||
Gross profit | 153,864 | 128,665 | 128,437 | 124,134 | 124,329 | 110,122 | 115,135 | 114,213 | 535,100 | 463,799 | 409,983 |
Operating expenses: | |||||||||||
Selling, general and administrative | 275,786 | 253,667 | 252,725 | ||||||||
Research and development | 61,953 | 59,362 | 56,617 | ||||||||
Litigation settlement, award and/or defense costs | 0 | (270,000) | (19,609) | ||||||||
Total operating expenses | 337,739 | 43,029 | 289,733 | ||||||||
Operating income | 59,323 | 47,975 | 46,868 | 43,195 | 310,400 | 36,604 | 36,429 | 37,337 | 197,361 | 420,770 | 120,250 |
Non-operating expense | (2,013) | 2,429 | 3,905 | ||||||||
Income before provision for income taxes | 199,374 | 418,341 | 116,345 | ||||||||
Provision for income taxes | 67,758 | 117,675 | 34,845 | ||||||||
Net income including noncontrolling interest | 131,616 | 300,666 | 81,500 | ||||||||
Net loss attributable to noncontrolling interest | 0 | 0 | (1,800) | ||||||||
Net income | $ 367 | $ 39,235 | $ 46,680 | $ 45,334 | $ 215,293 | $ 27,773 | $ 30,023 | $ 27,577 | $ 131,616 | $ 300,666 | 83,300 |
Masimo Corp | |||||||||||
Statement of Comprehensive Income [Abstract] | |||||||||||
Total revenue | 630,111 | ||||||||||
Cost of goods sold | 226,788 | ||||||||||
Gross profit | 403,323 | ||||||||||
Operating expenses: | |||||||||||
Selling, general and administrative | 250,627 | ||||||||||
Research and development | 50,292 | ||||||||||
Litigation settlement, award and/or defense costs | (19,609) | ||||||||||
Total operating expenses | 281,310 | ||||||||||
Operating income | 122,013 | ||||||||||
Non-operating expense | 3,910 | ||||||||||
Income before provision for income taxes | 118,103 | ||||||||||
Provision for income taxes | 34,803 | ||||||||||
Net income including noncontrolling interest | 83,300 | ||||||||||
Net income | 83,300 | ||||||||||
Variable Interest Entity, Primary Beneficiary [Member] | |||||||||||
Statement of Comprehensive Income [Abstract] | |||||||||||
Total revenue | 6,910 | ||||||||||
Cost of goods sold | 0 | ||||||||||
Gross profit | 6,910 | ||||||||||
Operating expenses: | |||||||||||
Selling, general and administrative | 2,348 | ||||||||||
Research and development | 6,325 | ||||||||||
Litigation settlement, award and/or defense costs | 0 | ||||||||||
Total operating expenses | 8,673 | ||||||||||
Operating income | (1,763) | ||||||||||
Non-operating expense | (571) | ||||||||||
Income before provision for income taxes | (1,192) | ||||||||||
Provision for income taxes | 42 | ||||||||||
Net income including noncontrolling interest | (1,234) | ||||||||||
Net income | (1,234) | ||||||||||
Cercacor Elim | |||||||||||
Statement of Comprehensive Income [Abstract] | |||||||||||
Total revenue | (6,910) | ||||||||||
Cost of goods sold | (6,660) | ||||||||||
Gross profit | (250) | ||||||||||
Operating expenses: | |||||||||||
Selling, general and administrative | (250) | ||||||||||
Total operating expenses | (250) | ||||||||||
Non-operating expense | 566 | ||||||||||
Income before provision for income taxes | (566) | ||||||||||
Net income including noncontrolling interest | (566) | ||||||||||
Net loss attributable to noncontrolling interest | (1,800) | ||||||||||
Net income | $ 1,234 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) | Jul. 13, 2016ft² | Jan. 26, 2016ft² | Jul. 31, 2015USD ($) | Apr. 02, 2016USD ($) | Dec. 30, 2017USD ($)ft²death | Dec. 31, 2016USD ($) | Jan. 02, 2016USD ($) | Jan. 03, 2015USD ($) |
Related Party Transaction [Line Items] | ||||||||
Capitalized Software Development Costs for Software Sold to Customers | $ 0 | $ 500,000 | $ 500,000 | |||||
Property Plant and Equipment, Occupied Square Feet | ft² | 32,518 | 70,700 | 16,830 | |||||
Patent and Licensing Fee - Aggregate | $ 2,400,000 | |||||||
Estimate of annual preventable hospital deaths prevented by 2020 (more than) | death | 200,000 | |||||||
Deconsolidation, Revaluation of Retained Investment, Gain (Loss), Amount | $ 300,000 | |||||||
Issuance of shares in noncontrolling interest entity, net | 347,000 | |||||||
Not for Profit Organization | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related Party Transaction, Amounts of Transaction | $ 0 | 5,000,000 | 6,300,000 | |||||
Not for Profit Social Welfare Organization | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related Party Transaction, Amounts of Transaction | 1,300 | 20,000 | 10,000 | |||||
Development Partner [Member] [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related Party Transaction, Amounts of Transaction | 0 | 255,000 | 200,000 | |||||
Non Profit Child Welfare Organization [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related Party Transaction, Amounts of Transaction | 15,000 | 11,500 | 1,500 | |||||
Variable Interest Entity, Primary Beneficiary [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Payment for Administrative Fees | 200,000 | 200,000 | 200,000 | |||||
Minimum aggregate royalty payments | 8,000,000 | 6,400,000 | 6,700,000 | |||||
Variable Interest Entity, Primary Beneficiary [Member] | Not for Profit Organization | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related Party Transaction, Amounts of Transaction | 0 | 200,271 | 220 | |||||
Minimum | Variable Interest Entity, Primary Beneficiary [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Minimum aggregate royalty payments | 5,000,000 | |||||||
Reimbursement Fee [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related Party Transaction, Due from (to) Related Party | 0 | |||||||
Cercacor Laboratories | ||||||||
Related Party Transaction [Line Items] | ||||||||
Operating Leases, Income Statement, Sublease Revenue | 400,000 | 300,000 | ||||||
Related Party Transaction, Due from (to) Related Party | 1,500,000 | $ 500,000 | ||||||
Related Party Transaction, Other Revenues from Transactions with Related Party | $ 100,000 | $ 0 | $ 0 |
Inventories - Components of Inv
Inventories - Components of Inventory (Detail) - USD ($) $ in Thousands | Dec. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 31,200 | $ 32,647 |
Work-in-process | 8,619 | 7,701 |
Finished goods | 56,125 | 32,194 |
Total | $ 95,944 | $ 72,542 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) $ in Millions | Dec. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Finished goods inventory held by distributors | $ 3.7 | $ 4.9 |
Other Current Assets (Details)
Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 30, 2017 | Dec. 31, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 17,073 | $ 13,051 |
Royalties receivable | 7,400 | 7,500 |
Employee loans and advances | 364 | 305 |
Due from related party | 39 | 77 |
Restricted cash(1) | 33 | 2,081 |
Other current assets | 3,161 | 3,053 |
Total other current assets | 28,070 | $ 26,067 |
Loss Contingency, Estimate of Possible Loss | $ 10,500 |
Property and Equipment - Compon
Property and Equipment - Components of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 246,333 | $ 204,229 |
Accumulated depreciation and amortization | (82,237) | (68,233) |
Total property and equipment, net | 164,096 | 135,996 |
Construction in Progress, Gross | 7,923 | |
Building and building improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 87,999 | 85,966 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 47,556 | 41,683 |
Aircraft and vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 25,329 | 45 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 23,762 | 23,762 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 15,789 | 13,549 |
Tooling | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 13,754 | 12,895 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 15,326 | 8,289 |
Furniture and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 9,967 | 9,669 |
Demonstration units | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 486 | $ 448 |
Construction-in-progress (CIP) | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 6,365 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) $ in Millions | 1 Months Ended |
Aug. 31, 2017USD ($) | |
Aircraft | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Additions | $ 25.3 |
Intangible Assets - Components
Intangible Assets - Components of Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 30, 2017 | Dec. 31, 2016 |
Cost | ||
Total cost | $ 51,798 | $ 50,689 |
Accumulated amortization | ||
Accumulated amortization | (24,675) | (21,313) |
Total | 27,123 | 29,376 |
Patents | ||
Cost | ||
Total cost | 20,623 | 19,950 |
Accumulated amortization | ||
Accumulated amortization | (8,473) | (7,427) |
Customer relationships | ||
Cost | ||
Total cost | 7,669 | 7,669 |
Accumulated amortization | ||
Accumulated amortization | (4,154) | (3,387) |
Licenses | ||
Cost | ||
Total cost | 7,500 | 7,500 |
Accumulated amortization | ||
Accumulated amortization | (4,831) | (4,245) |
Acquired technology | ||
Cost | ||
Total cost | 5,580 | 5,580 |
Accumulated amortization | ||
Accumulated amortization | (3,066) | (2,508) |
Trademarks | ||
Cost | ||
Total cost | 4,036 | 3,777 |
Accumulated amortization | ||
Accumulated amortization | (1,611) | (1,331) |
Capitalized software development costs | ||
Cost | ||
Total cost | 2,699 | 2,539 |
Accumulated amortization | ||
Accumulated amortization | (1,864) | (1,766) |
Other | ||
Cost | ||
Total cost | 3,691 | 3,674 |
Accumulated amortization | ||
Accumulated amortization | $ (676) | $ (649) |
Intangible Assets - Estimated A
Intangible Assets - Estimated Amortization Expense (Detail) - USD ($) $ in Thousands | Dec. 30, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,017 | $ 5,420 | |
2,018 | 4,958 | |
2,019 | 3,817 | |
2,020 | 3,435 | |
2,021 | 1,768 | |
Thereafter | 7,725 | |
Total | $ 27,123 | $ 29,376 |
Goodwill - Changes in Goodwill
Goodwill - Changes in Goodwill (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 30, 2017 | Dec. 31, 2016 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | $ 19,780 | $ 20,394 |
Foreign currency translation adjustment | 837 | (614) |
Goodwill, end of period | $ 20,617 | $ 19,780 |
Other Assets, Long-Term (Detail
Other Assets, Long-Term (Details) - USD ($) $ in Thousands | Dec. 30, 2017 | Dec. 31, 2016 |
Prepaid rebates | $ 6,114 | $ 5,933 |
Prepaid deposits | 3,286 | 2,943 |
Long term investments | 1,234 | 200 |
Restricted cash(1) | 148 | 147 |
Other assets | $ 10,782 | $ 9,223 |
Accrued and Other Liabilities62
Accrued and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 30, 2017 | Dec. 31, 2016 |
Other Liabilities Disclosure [Abstract] | ||
Accrued customer rebates, fees and reimbursements | $ 16,896 | $ 10,673 |
Accrued taxes | 6,711 | 5,135 |
Contract related payable | 3,683 | 3,893 |
Accrued stock repurchases | 1,988 | 0 |
Related party payable | 1,529 | 525 |
Accrued warranty | 1,149 | 910 |
Accrued legal fees | 975 | 1,362 |
Accrued other | 5,121 | 5,768 |
Total accrued liabilities | $ 38,052 | $ 28,266 |
Restated Credit Facility (Detai
Restated Credit Facility (Details) - USD ($) | Sep. 29, 2014 | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | Dec. 14, 2016 |
Revolving Credit Facility [Member] | Federal Funds Effective Swap Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.00% | ||||
Minimum | Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Commitment fee percentage | 0.175% | ||||
Minimum | Revolving Credit Facility [Member] | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.125% | ||||
Minimum | Revolving Credit Facility [Member] | Eurodollar | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.125% | ||||
Maximum | Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Commitment fee percentage | 0.30% | ||||
Maximum | Revolving Credit Facility [Member] | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.00% | ||||
Maximum | Revolving Credit Facility [Member] | Eurodollar | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 2.00% | ||||
Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term Line of Credit, Noncurrent | $ 0 | ||||
Current borrowing capacity | $ 250,000,000 | ||||
Interest expense | $ 700,000 | $ 3,500,000 | $ 2,700,000 |
Other Liabilities, Long-Term -
Other Liabilities, Long-Term - Components of Other Liabilities (Detail) - USD ($) $ in Thousands | Dec. 30, 2017 | Dec. 31, 2016 |
Other Liabilities Disclosure [Abstract] | ||
Income tax payable, long-term | $ 25,734 | $ 0 |
Unrecognized tax benefit | 14,348 | 13,442 |
Deferred tax liability, long-term | 9,880 | 340 |
Deferred rent, long-term | 1,266 | 558 |
Other | 292 | 247 |
Total other liabilities, long-term | $ 51,520 | $ 14,587 |
Equity - Additional Information
Equity - Additional Information (Detail) - $ / shares | 12 Months Ended | |||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | Sep. 01, 2015 | |
Equity [Line Items] | ||||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 5,000,000 | |||
Average cost per share | $ 84.90 | $ 42.39 | $ 37.36 | |
Shares repurchased | 804,000 | 1,496,000 | 4,148,000 |
Stock Repurchase Program Stoc66
Stock Repurchase Program Stock Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | Sep. 01, 2015 | |
Equity [Abstract] | ||||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 5,000,000 | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 2,100 | |||
Shares repurchased | 804,000 | 1,496,000 | 4,148,000 | |
Average cost per share | $ 84.90 | $ 42.39 | $ 37.36 | |
Value of shares repurchased | $ 68,260 | $ 63,402 | $ 154,967 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Schedule Of Share Based Compensation Arrangements [Line Items] | ||||
Percentage of company's total shares outstanding | 3.00% | |||
Common stock reserved for future issuance | 13,800,000 | |||
Total fair market value of all vesting options | $ 27.8 | $ 10.6 | $ 10.4 | |
Aggregated intrinsic value of options outstanding | 339.7 | |||
Aggregated intrinsic value of options exercisable | 223.1 | |||
Aggregated intrinsic value of options exercised | $ 140.3 | $ 57 | 26.4 | |
Weighted average remaining contractual term of options outstanding, years price below the market value | 5 years 10 months 24 days | 5 years 7 months 6 days | ||
Weighted average remaining contractual term of options exercisable, years | 4 years 3 months 18 days | 3 years 10 months 24 days | ||
Total income tax benefit recognized for share-based compensation expense | $ 39.2 | $ 16.2 | 3.7 | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 3,900,000 | |||
Restricted Stock Units (RSUs) | ||||
Schedule Of Share Based Compensation Arrangements [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | $ 0.5 | $ 0.3 | $ 0.1 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 2,708,000 | 2,706,000 | 2,703,000 | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Fair Value at Remeasurement | $ 95.40 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 95.51 | $ 41.45 | $ 41.45 | $ 0 |
Unrecognized share-based compensation related to unvested options granted | $ 0.3 | $ 0.1 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms | 5 months 1 day | 3 months 19 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 33,000 | 6,000 | 2,703,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 86.42 | $ 43.09 | $ 41.45 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | (25,000) | 0 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ 85.79 | $ 0 | $ 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Expired in Period | 0 | 0 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Exercised in Period | (6,000) | (3,000) | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ 43.09 | $ 41.45 | $ 0 | |
Two Thousand Seventeen Plan [Domain] | ||||
Schedule Of Share Based Compensation Arrangements [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | 10 | |||
Performance Shares | ||||
Schedule Of Share Based Compensation Arrangements [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 20.00% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period | 4 years | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | $ 4.7 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 233,000 | 0 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 90.70 | $ 0 | ||
Unrecognized share-based compensation related to unvested options granted | $ 9.3 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms | 2 years 6 months | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 248,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 90.71 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | (15,000) | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ 90.87 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Expired in Period | 0 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Exercised in Period | 0 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ 0 | |||
Employee Stock Option | ||||
Schedule Of Share Based Compensation Arrangements [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | $ 12 | $ 12.2 | $ 10.8 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 39.7 | $ 27.1 | ||
Unrecognized share-based compensation related to unvested options granted, term | 3 years 8 months 12 days | 3 years 4 months 24 days | ||
Minimum | Performance Shares | ||||
Schedule Of Share Based Compensation Arrangements [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 0 | |||
Maximum | Two Thousand Seventeen Plan [Domain] | ||||
Schedule Of Share Based Compensation Arrangements [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 5,000,000 | |||
Maximum | Performance Shares | ||||
Schedule Of Share Based Compensation Arrangements [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 1 | |||
Maximum | Two Thousand Seven Plan | ||||
Schedule Of Share Based Compensation Arrangements [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 5,000,000 |
Share-Based Compensation - Numb
Share-Based Compensation - Number and Weighted Average Exercise Price of Options Issued and Outstanding under All Stock Option Plans (Detail) - $ / shares | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Options outstanding, beginning of period | 8,521,000 | 9,202,000 | 9,956,000 |
Granted | 928,000 | 1,290,000 | 914,000 |
Canceled | (250,000) | (172,000) | (218,000) |
Expired | 0 | 0 | 0 |
Exercised | (2,246,000) | (1,799,000) | (1,450,000) |
Options outstanding, end of period | 6,953,000 | 8,521,000 | 9,202,000 |
Options exercisable, end of period | 3,812,000 | 4,988,000 | 5,609,000 |
Shares, Options available for grant, end of period | 3,900,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Average Exercise Price, Options outstanding, beginning of period | $ 28.56 | $ 25.46 | $ 23.59 |
Average Exercise Price, Granted | 86.69 | 39.94 | 36.18 |
Average Exercise Price, Canceled | 38.59 | 29.13 | 24.33 |
Average Exercise Price, Expired | 0 | 0 | 0 |
Average Exercise Price, Exercised | 27.63 | 20.76 | 19.54 |
Average Exercise Price, Options outstanding, end of period | 36.26 | 28.56 | 25.46 |
Average Exercise Price, Options exercisable, end of period | $ 26.28 | $ 26.33 | $ 24.72 |
Share-Based Compensation - Rang
Share-Based Compensation - Range of Assumptions Used and Resulting Weighted-Average Fair Value of Options Granted at Date of Grant (Detail) - $ / shares | 12 Months Ended | |||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Range of assumptions used and resulting weighted-average fair value of options granted at the date of grant | ||||
Risk-free interest rate, minimum | 1.30% | 1.30% | 1.40% | |
Risk-free interest rate, maximum | 1.90% | 1.90% | 1.90% | |
Estimated volatility, minimum | 32.00% | 32.00% | 31.70% | |
Estimated volatility, maximum | 37.40% | 37.40% | 36.50% | |
Expected dividends | 0.00% | 0.00% | 0.00% | |
Weighted-average fair value of options granted | $ 27.81 | $ 13.64 | $ 12.20 | |
Minimum | ||||
Range of assumptions used and resulting weighted-average fair value of options granted at the date of grant | ||||
Expected term, years | 5 years 6 months | 5 years 6 months | 5 years 1 month 6 days | |
Maximum | ||||
Range of assumptions used and resulting weighted-average fair value of options granted at the date of grant | ||||
Expected term, years | 5 years 8 months 12 days | 5 years 8 months 12 days | 5 years 6 months |
Share-Based Compensation - Tota
Share-Based Compensation - Total Share-Based Compensation Expense Included in Consolidated Statements of Comprehensive Income (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Schedule Of Share Based Compensation Arrangements [Line Items] | |||
Total share-based compensation expense | $ 10,825 | ||
Cost of goods sold | |||
Schedule Of Share Based Compensation Arrangements [Line Items] | |||
Total share-based compensation expense | $ 351 | $ 355 | 348 |
Selling, general and administrative | |||
Schedule Of Share Based Compensation Arrangements [Line Items] | |||
Total share-based compensation expense | 13,272 | 9,443 | 8,139 |
Research and development | |||
Schedule Of Share Based Compensation Arrangements [Line Items] | |||
Total share-based compensation expense | 3,564 | 2,705 | 2,338 |
Employee Stock Option | |||
Schedule Of Share Based Compensation Arrangements [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | $ 12,000 | $ 12,200 | $ 10,800 |
Share-Based Compensation - Nu71
Share-Based Compensation - Number and Weighted Average Exercise Price of Outstanding and Exercisable Options (Detail) - $ / shares shares in Thousands | 12 Months Ended | |||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Number of Options, Options Outstanding | 6,953 | 8,521 | 9,202 | 9,956 |
Average Remaining Contractual Life, Options Outstanding | 5 years 11 months 1 day | 5 years 6 months 26 days | ||
Number of Options, Options Exercisable | 3,812 | 4,988 | 5,609 | |
Price Range One [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise Prices, Lower | $ 2.75 | |||
Range of Exercise Prices, Upper | 4 | |||
$8.00 to $25.00 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise Prices, Lower | 4.01 | |||
Range of Exercise Prices, Upper | $ 12 | |||
Number of Options, Options Outstanding | 2,555 | 3,432 | ||
Average Remaining Contractual Life, Options Outstanding | 4 years 7 months 13 days | 5 years 3 months 11 days | ||
Number of Options, Options Exercisable | 1,999 | 2,301 | ||
$25.01 to $40.00 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise Prices, Lower | $ 12.01 | |||
Range of Exercise Prices, Upper | $ 16 | |||
Number of Options, Options Outstanding | 3,224 | 4,664 | ||
Average Remaining Contractual Life, Options Outstanding | 5 years 9 months 18 days | 5 years 7 months 24 days | ||
Number of Options, Options Exercisable | 1,712 | 2,526 | ||
$40.01 to $55.00 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise Prices, Lower | $ 16.01 | |||
Range of Exercise Prices, Upper | $ 23.98 | |||
Number of Options, Options Outstanding | 199 | 341 | ||
Average Remaining Contractual Life, Options Outstanding | 7 years 1 month 13 days | 6 years 5 months 9 days | ||
Number of Options, Options Exercisable | 86 | 161 | ||
$55.01 to $70.00 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise Prices, Lower | $ 23.99 | |||
Range of Exercise Prices, Upper | $ 28.99 | |||
Number of Options, Options Outstanding | 94 | 84 | ||
Average Remaining Contractual Life, Options Outstanding | 8 years 9 months 18 days | 9 years 9 months 4 days | ||
Number of Options, Options Exercisable | 15 | 0 | ||
$55.01 to $70.00 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise Prices, Lower | $ 29 | |||
Range of Exercise Prices, Upper | $ 31.99 | |||
Number of Options, Options Outstanding | 74 | 0 | ||
Average Remaining Contractual Life, Options Outstanding | 9 years 8 months 5 days | 0 days | ||
Number of Options, Options Exercisable | 0 | 0 | ||
$85.01 to $105.00 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise Prices, Lower | $ 32 | |||
Range of Exercise Prices, Upper | $ 38.30 | |||
Number of Options, Options Outstanding | 807 | 0 | ||
Average Remaining Contractual Life, Options Outstanding | 9 years 6 months 26 days | 0 days | ||
Number of Options, Options Exercisable | 0 | 0 | ||
Exercise Price Range Eight [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise Prices, Lower | $ 38.31 | |||
Range of Exercise Prices, Upper | 41.51 | |||
Exercise Price Range Nine [Member] [Domain] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise Prices, Lower | 41.52 | |||
Range of Exercise Prices, Upper | $ 43.76 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Unvested RSU Award Activity (Details) - Restricted Stock Units (RSUs) - $ / shares shares in Thousands | 12 Months Ended | |||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
RSUs outstanding, beginning of period | 2,706 | 2,703 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 95.51 | $ 41.45 | $ 41.45 | $ 0 |
Granted | 33 | 6 | 2,703 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 86.42 | $ 43.09 | $ 41.45 | |
Expired | 25 | 0 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ (85.79) | $ 0 | $ 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Expired in Period | 0 | 0 | 0 | |
Vested | 6 | 3 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ 43.09 | $ 41.45 | $ 0 | |
RSUs outstanding, end of period | 2,708 | 2,706 | 2,703 | |
Chief Executive Officer | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted | 2,700 |
Income Taxes - Components of In
Income Taxes - Components of Income Before Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Income Tax Disclosure [Abstract] | |||
United States | $ 171,564 | $ 320,702 | $ 87,762 |
Foreign | 27,810 | 97,639 | 28,583 |
Income before provision for income taxes | $ 199,374 | $ 418,341 | $ 116,345 |
Income Taxes - Current and Defe
Income Taxes - Current and Deferred Provision (Benefit) for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Current: | |||
Federal | $ 38,777 | $ 99,533 | $ 31,983 |
State | 1,940 | 6,922 | 2,388 |
Foreign | 3,018 | 5,815 | 2,448 |
Total | 43,735 | 112,270 | 36,819 |
Deferred: | |||
Federal | 27,002 | 2,982 | (900) |
State | (3,001) | 2,331 | (1,206) |
Foreign | 22 | 92 | 132 |
Total | 24,023 | 5,405 | (1,974) |
Income Tax Expense (Benefit) | $ 67,758 | $ 117,675 | $ 34,845 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Income Taxes [Line Items] | |||
Statutory regular federal income tax rate | 35.00% | 35.00% | 35.00% |
Tax and accrued interest related to uncertain tax positions | $ (1.6) | $ (6.1) | $ (0.6) |
Effective tax rate | 34.00% | 28.10% | 30.00% |
Operating loss carryforwards, gross | $ 3.6 | ||
Indefinitely carryforward research and development credits | 6.3 | ||
Investment Tax Credit | 0.4 | ||
Foreign Tax Expense (Benefit), Business and Employment Actions | $ 1 | $ 4.6 | $ 1.3 |
Earnings Per Share, Diluted, Effect of Foreign Tax Benefit Relating to Business and Employment Actions | $ 0.02 | $ 0.09 | $ 0.02 |
Amount of unrecognized benefits affecting future tax rate | $ 14.5 | $ 13.1 | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | 0.3 | 0.1 | $ 0.2 |
Penalties and interest related to unrecognized tax benefits | 1.6 | $ 1.2 | |
Tax Adjustments, Settlements, and Unusual Provisions | 43.5 | ||
Tax Cuts and Jobs Act, Change in Tax Rate, Income Tax Expense (Benefit) | 9 | ||
Tax Cuts and Jobs Act, Transition Tax for Accumulated Foreign Earnings, Provisional Income Tax Expense | 28 | ||
Tax Cuts and Jobs Act, Transition Tax, Foreign Withholding Tax | 6.5 | ||
Tax Cuts and Jobs Act, Undistributed Accumulated Earnings on Foreign Subsidiary | 180 | ||
Tax Cuts and Jobs Act, Transition Tax, Accumulated Undistributed Foreign Earnings Subject to Transition Tax | 217.4 | ||
Undistributed Earnings of Foreign Subsidiaries | 37.4 | ||
Deferred Tax Liability Not Recognized, Amount of Unrecognized Deferred Tax Liability, Undistributed Earnings of Foreign Subsidiaries | 1.9 | ||
Maximum | |||
Income Taxes [Line Items] | |||
Foreign Earnings Repatriated | $ 180 |
Income Taxes - Deferred Tax Pro
Income Taxes - Deferred Tax Provision (Benefit) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Income Tax Disclosure [Abstract] | |||
Total | $ 24,023 | $ 5,405 | $ (1,974) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of U.S. Federal Statutory Tax Rate to Company's Effective Tax Rate (Detail) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Income Tax Disclosure [Abstract] | |||
Statutory regular federal income tax rate | 35.00% | 35.00% | 35.00% |
State provision, net of federal benefit | (0.30%) | 1.40% | 0.70% |
Nondeductible items | 1.80% | 0.80% | 1.70% |
Foreign income taxed at different rates | (3.40%) | (5.60%) | (6.30%) |
Tax credits | (2.00%) | (0.50%) | (1.70%) |
Change in federal valuation allowance | 0.00% | 0.00% | 0.40% |
Impact of 2017 Tax Act | 18.50% | 0.00% | 0.00% |
Withholding taxes on undistributed foreign earnings | 3.30% | 0.00% | 0.00% |
Excess stock based compensation | (18.90%) | (3.00%) | (0.00%) |
Other | 0.00% | 0.00% | (0.20%) |
Total | 34.00% | 28.10% | 30.00% |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets (Detail) - USD ($) $ in Thousands | Dec. 30, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Tax credits | $ 6,414 | $ 802 |
Deferred revenue | 3,831 | 5,393 |
Accrued liabilities | 9,414 | 16,244 |
Stock-based compensation | 8,601 | 18,680 |
Other | 237 | 1,902 |
Total | 28,497 | 43,021 |
Valuation allowance | 0 | 0 |
Total deferred tax assets | 28,497 | 43,021 |
Deferred tax liabilities: | ||
Property and equipment | (2,988) | (2,691) |
State taxes and other | (1,990) | (1,695) |
Withholding taxes on undistributed foreign earnings | (9,500) | 0 |
Total deferred tax liabilities | (14,478) | (4,386) |
Net deferred tax assets | $ 14,019 | $ 38,635 |
Income Taxes - Reconciliation79
Income Taxes - Reconciliation of Total Amounts of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Income Tax Disclosure [Abstract] | |||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | $ 300 | $ 100 | $ 200 |
Tax Adjustments, Settlements, and Unusual Provisions | 0 | (277) | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits (gross), beginning of period | 14,494 | 8,875 | |
Increase from tax positions in prior period | 498 | 143 | |
Increase from tax positions in current period | 2,142 | 6,437 | |
Settlements | 0 | (296) | |
Lapse of statute of limitations | (977) | (388) | |
Unrecognized tax benefits (gross), end of period | $ 16,157 | $ 14,494 | $ 8,875 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ / shares in Units, shares in Thousands | Jul. 27, 2017 | Jul. 13, 2016ft² | Jan. 26, 2016ft² | Nov. 04, 2015USD ($) | Jan. 03, 2014USD ($) | Dec. 30, 2017USD ($)ft²distributorAgreement$ / sharesshares | Dec. 31, 2016USD ($)distributor$ / sharesshares | Jan. 02, 2016USD ($)$ / sharesshares | Dec. 28, 2013USD ($) | Jan. 31, 2014participant |
Contingencies And Commitments [Line Items] | ||||||||||
Property Plant and Equipment, Occupied Square Feet | ft² | 32,518 | 70,700 | 16,830 | |||||||
Lessee, Operating Lease, Term of Contract | 10 years | 10 years | ||||||||
Accrued rent expense | $ 1,500,000 | $ 700,000 | ||||||||
Rental expense related to operating leases | $ 6,700,000 | 5,300,000 | $ 5,200,000 | |||||||
Employee contribution percentage limit for full consideration under Employee Retirement Savings Plan | 3.00% | |||||||||
Severance plan participation agreements | Agreement | 5 | |||||||||
Required notice of resignation | 6 months | |||||||||
Remaining amount committed | $ 74,100,000 | |||||||||
Commitments and contingencies (Notes 4 and 17) | ||||||||||
Bank balances | 315,200,000 | |||||||||
Bank balance covered by Federal Deposit Insurance Corporation limit | 3,300,000 | |||||||||
Concentration Risk, Customer Accounts Receivable, Percentage | 13.60% | |||||||||
Royalty and other revenue | 32,800,000 | |||||||||
Royalty and Other Revenue | $ 56,784,000 | $ 30,779,000 | 30,777,000 | |||||||
Royalty rate Percentage | 7.75% | |||||||||
Royalty Revenue, Number of Days Royalty Revenue is Adjusted Subsequent to Quarter End | 60 days | |||||||||
Litigation settlement, award and/or defense costs | $ 0 | (270,000,000) | (19,609,000) | |||||||
Number of Participants in the Surfactant, Positive Pressure, and Oxygenation Randomized Trial | participant | 2 | |||||||||
Pulse oximetry products | ||||||||||
Contingencies And Commitments [Line Items] | ||||||||||
Sale of company's products to customers | 417,200,000 | $ 375,000,000 | 337,400,000 | |||||||
Masimo vs Former Physician Office Sales Representatives | ||||||||||
Contingencies And Commitments [Line Items] | ||||||||||
Litigation settlement, award and/or defense costs | $ 2,600,000 | |||||||||
Litigation Settlement, Interest Rate | 10.00% | |||||||||
Masimo vs. Physicians Healthsource, Inc. [Member] | ||||||||||
Contingencies And Commitments [Line Items] | ||||||||||
Damages sought per violation | $ 500 | |||||||||
Parent Company [Member] | ||||||||||
Contingencies And Commitments [Line Items] | ||||||||||
Litigation settlement, award and/or defense costs | $ (19,609,000) | |||||||||
Unsecured Bank Guarantees | ||||||||||
Contingencies And Commitments [Line Items] | ||||||||||
Commitments and contingencies (Notes 4 and 17) | 300,000 | |||||||||
Revolving Credit Facility [Member] | ||||||||||
Contingencies And Commitments [Line Items] | ||||||||||
Long-term Line of Credit, Noncurrent | $ 0 | |||||||||
Sales [Member] | ||||||||||
Contingencies And Commitments [Line Items] | ||||||||||
Number of just-in-time distributors | distributor | 2 | |||||||||
Accounts Receivable [Member] | ||||||||||
Contingencies And Commitments [Line Items] | ||||||||||
Number of just-in-time distributors | distributor | 2 | 2 | ||||||||
Restricted Stock Units (RSUs) | ||||||||||
Contingencies And Commitments [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Expired in Period | shares | 0 | 0 | 0 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 86.42 | $ 43.09 | $ 41.45 | |||||||
Just in time distributor one | Sales Revenue, Net [Member] | ||||||||||
Contingencies And Commitments [Line Items] | ||||||||||
Percentage Of Revenue Two Customer | 12.70% | 14.00% | 14.60% | |||||||
Just in time distributor one | Accounts Receivable [Member] | ||||||||||
Contingencies And Commitments [Line Items] | ||||||||||
Percentage Of Accounts Receivable Balance From Three Just In Time Distributors | 6.50% | 5.60% | ||||||||
Just in time distributor two | Sales Revenue, Net [Member] | ||||||||||
Contingencies And Commitments [Line Items] | ||||||||||
Percentage Of Revenue Two Customer | 11.20% | 12.80% | 11.70% | |||||||
Just in time distributor two | Accounts Receivable [Member] | ||||||||||
Contingencies And Commitments [Line Items] | ||||||||||
Percentage Of Accounts Receivable Balance From Three Just In Time Distributors | 4.70% | |||||||||
Percentage of accounts receivable balance from two just-in-time distributor | 7.50% | |||||||||
United States | ||||||||||
Contingencies And Commitments [Line Items] | ||||||||||
Company's contribution to employee retirement savings plan | $ 2,200,000 | $ 1,900,000 | $ 1,800,000 | |||||||
OUTSIDE UNITED STATES [Domain] | ||||||||||
Contingencies And Commitments [Line Items] | ||||||||||
Company's contribution to employee retirement savings plan | $ 300,000 | |||||||||
Chief Executive Officer | ||||||||||
Contingencies And Commitments [Line Items] | ||||||||||
Supplemental Unemployment Benefits, Severance Benefits | $ 35,000,000 | |||||||||
Employment Agreement, Severance Terms | 10.00% | |||||||||
Employment Agreement, Severance Benefits, Special Payment, Qualifying Termination | $ 292,900,000 | |||||||||
Chief Executive Officer | Employee Stock Option | ||||||||||
Contingencies And Commitments [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | 300,000 | |||||||||
Chief Executive Officer | Restricted Stock Units (RSUs) | ||||||||||
Contingencies And Commitments [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | 2.7 | |||||||||
Employment Agreement, Severance Terms | 50.00% | |||||||||
Chief Executive Officer | Cash Distribution [Member] | ||||||||||
Contingencies And Commitments [Line Items] | ||||||||||
Employment Agreement, Severance Terms | 50.00% | |||||||||
Maximum | Chief Executive Officer | Deferred Bonus [Member] | ||||||||||
Contingencies And Commitments [Line Items] | ||||||||||
Employment Agreement, Severance Terms | 200.00% | 100.00% |
Commitments and Contingencies81
Commitments and Contingencies - Future Minimum Lease Payments Under Operating and Capital Leases (Detail) $ in Thousands | Dec. 30, 2017USD ($) |
Operating Leases | |
2,018 | $ 6,748 |
2,019 | 5,493 |
2,020 | 3,184 |
2,021 | 2,597 |
2,022 | 1,816 |
Thereafter | 5,467 |
Total | $ 25,305 |
Segment Information and Enter82
Segment Information and Enterprise Reporting (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-Lived Assets | $ 274,478 | $ 225,167 | $ 210,323 |
Concentration Risk, Long-lived Asset Geographic Area, Percentage | 100.00% | 100.00% | 100.00% |
Product | $ 741,324 | $ 663,846 | $ 599,334 |
Percentage Of Product Revenue Based On Geographic Area By Destination | 100.00% | 100.00% | 100.00% |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Product | $ 506,815 | $ 465,588 | $ 421,628 |
Europe, Middle East and Africa | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Product | $ 138,075 | $ 112,273 | $ 105,323 |
Percentage Of Product Revenue Based On Geographic Area By Destination | 18.60% | 16.90% | 17.60% |
Asia and Australia | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Product | $ 72,449 | $ 65,955 | $ 55,675 |
Percentage Of Product Revenue Based On Geographic Area By Destination | 9.80% | 10.00% | 9.30% |
North and South America (excluding United States) | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Product | $ 23,985 | $ 20,030 | $ 16,708 |
Percentage Of Product Revenue Based On Geographic Area By Destination | 3.20% | 3.00% | 2.80% |
Reportable Geographical Components [Member] | United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration Risk, Percentage | 68.40% | 70.10% | 70.30% |
Reportable Geographical Components [Member] | United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-Lived Assets | $ 263,860 | $ 216,784 | $ 203,553 |
Concentration Risk, Long-lived Asset Geographic Area, Percentage | 96.10% | 96.30% | 96.80% |
Reportable Geographical Components [Member] | International | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-Lived Assets | $ 10,618 | $ 8,383 | $ 6,770 |
Concentration Risk, Long-lived Asset Geographic Area, Percentage | 3.90% | 3.70% | 3.20% |
Quarterly Financial Data (una83
Quarterly Financial Data (unaudited) - Quarterly Financial Data (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenue | $ 225,181 | $ 193,692 | $ 192,933 | $ 186,302 | $ 183,201 | $ 167,621 | $ 172,636 | $ 171,167 | $ 798,108 | $ 694,625 | $ 630,111 |
Gross profit | 153,864 | 128,665 | 128,437 | 124,134 | 124,329 | 110,122 | 115,135 | 114,213 | 535,100 | 463,799 | 409,983 |
Operating income | 59,323 | 47,975 | 46,868 | 43,195 | 310,400 | 36,604 | 36,429 | 37,337 | 197,361 | 420,770 | 120,250 |
Net income | $ 367 | $ 39,235 | $ 46,680 | $ 45,334 | $ 215,293 | $ 27,773 | $ 30,023 | $ 27,577 | $ 131,616 | $ 300,666 | $ 83,300 |
Net income per share attributable to Masimo Corporation stockholders: | |||||||||||
Basic | $ 0.01 | $ 0.75 | $ 0.90 | $ 0.90 | $ 4.31 | $ 0.56 | $ 0.61 | $ 0.56 | $ 2.55 | $ 6.07 | $ 1.62 |
Diluted | $ 0.01 | $ 0.70 | $ 0.83 | $ 0.82 | $ 3.97 | $ 0.52 | $ 0.57 | $ 0.53 | $ 2.36 | $ 5.65 | $ 1.55 |