INTEGER HOLDINGS CORP, 10-Q filed on 8/1/2019
Quarterly Report
v3.19.2
Cover - shares
6 Months Ended
Jun. 28, 2019
Jul. 26, 2019
Cover page.    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 28, 2019  
Document Transition Report false  
Entity File Number 1-16137  
Entity Registrant Name INTEGER HOLDINGS CORPORATION  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 16-1531026  
Entity Address, Address Line One 5830 Granite Parkway,  
Entity Address, Address Line Two Suite 1150  
Entity Address, City or Town Plano,  
Entity Address, State or Province TX  
Entity Address, Postal Zip Code 75024  
City Area Code 214  
Local Phone Number 618-5243  
Title of 12(b) Security Common Stock, $0.001 par value per share  
Trading Symbol ITGR  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   32,646,373
Entity Central Index Key 0001114483  
Amendment Flag false  
Document Fiscal Year Focus 2019  
Document Fiscal Period Focus Q2  
Current Fiscal Year End Date --01-03  
v3.19.2
Condensed Consolidated Balance Sheets - Unaudited - USD ($)
$ in Thousands
Jun. 28, 2019
Dec. 28, 2018
Current assets:    
Cash and cash equivalents $ 15,922 $ 25,569
Accounts receivable, net of allowance for doubtful accounts of $0.6 million and $0.5 million, respectively 217,732 185,501
Inventories 187,154 190,076
Prepaid expenses and other current assets 24,978 15,104
Total current assets 445,786 416,250
Property, plant and equipment, net 229,209 231,269
Goodwill 831,368 832,338
Other intangible assets, net 791,472 812,338
Deferred income taxes 4,099 3,937
Operating Lease Assets, Current 44,793 0
Other assets 26,926 30,549
Total assets 2,373,653 2,326,681
Current liabilities:    
Current portion of long-term debt 37,500 37,500
Accounts payable 73,120 57,187
Income taxes payable 12,034 9,393
Accrued expenses 61,288 60,490
Total current liabilities 183,942 164,570
Long-term debt 825,438 888,007
Deferred income taxes 201,350 203,910
Operating Lease, Liability, Noncurrent 39,788 0
Other long-term liabilities 11,440 9,701
Total liabilities 1,261,958 1,266,188
Stockholders’ equity:    
Common stock, $0.001 par value; 100,000,000 shares authorized; 32,501,709 and 31,977,953 shares issued, respectively; 32,382,687 and 31,871,427 shares outstanding, respectively 33 33
Additional paid-in capital 697,648 691,083
Treasury stock, at cost, 119,022 and 106,526 shares, respectively (10,565) (8,125)
Retained earnings 398,648 344,498
Accumulated other comprehensive income 25,931 33,004
Total stockholders’ equity 1,111,695 1,060,493
Total liabilities and stockholders’ equity $ 2,373,653 $ 2,326,681
v3.19.2
Condensed Consolidated Balance Sheets - Unaudited (Parenthetical) - USD ($)
$ in Millions
Jun. 28, 2019
Dec. 28, 2018
Current assets:    
Allowance for doubtful accounts $ 0.6 $ 0.6
Stockholders’ equity:    
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued (in shares) 32,816,622 32,624,494
Common stock, shares outstanding (in shares) 32,640,614 32,473,167
Treasury stock, shares (in shares) 176,008 151,327
v3.19.2
Condensed Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended 6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Jun. 28, 2019
Jun. 29, 2018
Income Statement [Abstract]        
Sales $ 314,194 $ 314,464 $ 628,870 $ 606,890
Cost of sales 217,210 215,699 443,276 424,593
Gross profit 96,984 98,765 185,594 182,297
Operating expenses:        
Selling, general and administrative expenses 33,143 36,780 68,099 73,209
Research, development and engineering costs 11,396 12,935 22,991 26,211
Other operating expenses 3,108 4,692 5,998 8,476
Total operating expenses 47,647 54,407 97,088 107,896
Operating income 49,337 44,358 88,506 74,401
Interest expense 13,612 15,234 27,442 30,829
(Gain) loss on cost and equity method investments, net 1,611 (284) 1,652 (5,254)
Other loss, net (718) (2,387) (552) (1,427)
Income (loss) from continuing operations before taxes 34,832 31,795 59,964 50,253
Provision (benefit) for income taxes 6,610 8,739 10,376 14,113
Income (loss) from continuing operations 28,222 23,056 49,588 36,140
Income (loss) from discontinued operations before taxes 4,930 (1,374) 5,316 (7,623)
Discontinued operations:        
Gain on sale of discontinued operations 95 1,660 178 377
Income (loss) from discontinued operations 4,835 (3,034) 5,138 (8,000)
Net income $ 33,057 $ 20,022 $ 54,726 $ 28,140
Basic earnings (loss) per share:        
Income from continuing operations (in dollars per share) $ 0.87 $ 0.72 $ 1.52 $ 1.13
Loss from discontinued operations (in dollars per share) 0.15 (0.09) 0.16 (0.25)
Basic (in dollars per share) 1.01 0.62 1.68 0.88
Diluted earnings (loss) per share:        
Income from continuing operations (in dollars per share) 0.85 0.70 1.50 1.11
Loss from discontinued operations (in dollars per share) 0.15 (0.09) 0.16 (0.25)
Diluted (in dollars per share) $ 1.00 $ 0.61 $ 1.66 $ 0.86
Weighted average shares outstanding:        
Basic (in shares) 32,621 32,038 32,579 31,970
Diluted (in shares) 33,009 32,720 32,995 32,572
v3.19.2
Condensed Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Jun. 28, 2019
Jun. 29, 2018
Statement of Comprehensive Income [Abstract]        
Net income (loss) $ 33,057 $ 20,022 $ 54,726 $ 28,140
Other comprehensive income (loss):        
Foreign currency translation gain 4,510 (25,885) (2,328) (12,444)
Net change in cash flow hedges, net of tax (4,043) (2,086) (4,745) 1,323
Other comprehensive income 467 (27,971) (7,073) (11,121)
Comprehensive income $ 33,524 $ (7,949) $ 47,653 $ 17,019
v3.19.2
Condensed Consolidated Statements of Cash Flows - Unaudited - USD ($)
$ in Thousands
6 Months Ended
Jun. 28, 2019
Jun. 29, 2018
Statement of Cash Flows [Abstract]    
Proceeds from (Payments for) Other Financing Activities $ 0 $ (192)
Proceeds from Divestiture of Businesses 4,734 0
Cash flows from operating activities:    
Net income (loss) 54,726 28,140
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 38,535 48,591
Debt related amortization and extinguishment fees included in interest expense 3,676 5,083
Stock-based compensation 5,433 6,107
Non-cash (gain) loss on cost and equity method investments 1,652 (763)
Other non-cash (gains) losses (311) (2,307)
Deferred income taxes (1,126) 8,894
Gain on sale of discontinued operations (4,974) 0
Changes in operating assets and liabilities:    
Accounts receivable (30,545) (11,306)
Inventories 2,846 (20,948)
Prepaid expenses and other current assets (12,942) 3,306
Accounts payable 16,289 8,898
Accrued expenses (8,593) (3,929)
Income taxes 2,884 (2,547)
Net cash provided by operating activities 67,550 67,219
Cash flows from investing activities:    
Acquisition of property, plant and equipment (15,506) (19,224)
Proceeds from sale of property, plant and equipment 5 960
Purchase of cost and equity method investments (327) (831)
Net cash provided by (used in) investing activities (11,094) (19,095)
Cash flows from financing activities:    
Principal payments of long-term debt (80,750) (75,062)
Proceeds from issuance of long-term debt 15,000 0
Proceeds from the exercise of stock options 1,600 3,625
Payments of Debt Issuance Costs 0 688
Tax withholdings related to net share settlements of restricted stock unit awards (2,123) (2,206)
Net cash used in financing activities (66,273) (74,523)
Effect of foreign currency exchange rates on cash and cash equivalents 170 2,363
Net decrease in cash and cash equivalents (9,647) (24,036)
Cash and cash equivalents, beginning of period 25,569 44,096
Cash and cash equivalents, end of period 15,922 20,060
Total cash and cash equivalents, end of period 25,569 44,096
Noncash investing and financing activities:    
Property, plant and equipment purchases included in accounts payable $ 2,297 $ 3,002
v3.19.2
Condensed Consolidated Statement of Stockholders' Equity - Unaudited - USD ($)
$ in Thousands
Total
Additional Paid-in Capital [Member]
Treasury Stock [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Common Stocks, Including Additional Paid in Capital $ 669,788        
Treasury Stock, Shares, Acquired (2,209)        
Balance at Dec. 29, 2017 893,381   $ (4,654) $ 176,068 $ 52,179
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income (loss) 28,140        
Other comprehensive loss, net (11,121)       (11,121)
Stock-based compensation   $ 6,107      
Net shares issued   2,293      
Balance at Jun. 29, 2018 917,734   (5,720) 204,208 41,058
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Stock Issued During Period, Value, Treasury Stock Reissued 1,143        
Common Stocks, Including Additional Paid in Capital 673,138        
Treasury Stock, Shares, Acquired (21)        
Balance at Mar. 30, 2018 920,389   (5,964) 184,186 69,029
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income (loss) 20,022        
Other comprehensive loss, net (27,971)       (27,971)
Stock-based compensation   2,885      
Net shares issued   2,165      
Balance at Jun. 29, 2018 917,734   (5,720) 204,208 41,058
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Stock Issued During Period, Value, Treasury Stock Reissued 265        
Common Stocks, Including Additional Paid in Capital 678,188        
Common Stocks, Including Additional Paid in Capital 691,116        
Treasury Stock, Shares, Acquired (2,905)        
Balance at Dec. 28, 2018 1,060,493   (8,125) 344,498 33,004
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income (loss) 54,726        
Other comprehensive loss, net (7,073)       (7,073)
Stock-based compensation   5,433      
Net shares issued   1,132      
Balance at Jun. 28, 2019 1,111,695   (10,565) 398,648 25,931
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Stock Issued During Period, Value, Treasury Stock Reissued 465        
Common Stocks, Including Additional Paid in Capital 694,943        
Cumulative Effect of New Accounting Principle in Period of Adoption       (576)  
Treasury Stock, Shares, Acquired (782)        
Balance at Mar. 29, 2019 1,075,972   (10,026) 365,591 25,464
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income (loss) 33,057        
Other comprehensive loss, net 467       467
Stock-based compensation   2,720      
Net shares issued   $ 18      
Balance at Jun. 28, 2019 1,111,695   $ (10,565) $ 398,648 $ 25,931
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Stock Issued During Period, Value, Treasury Stock Reissued 243        
Common Stocks, Including Additional Paid in Capital $ 697,681        
v3.19.2
Basis of Presentation
6 Months Ended
Jun. 28, 2019
Accounting Policies [Abstract]  
BASIS OF PRESENTATION BASIS OF PRESENTATION
Integer Holdings Corporation (together with its consolidated subsidiaries, “Integer” or the “Company”) is a publicly traded corporation listed on the New York Stock Exchange under the symbol “ITGR.” Integer is one of the largest medical device outsource manufacturers in the world serving the cardiac, neuromodulation, vascular, orthopedics, advanced surgical and portable medical markets. The Company provides innovative, high-quality medical technologies that enhance the lives of patients worldwide. In addition, it develops batteries for high-end niche applications in the energy, military, and environmental markets. The Company’s reportable segments are: (1) Medical and (2) Non-Medical. The Company’s customers include large multi-national original equipment manufacturers (“OEMs”) and their affiliated subsidiaries.
On May 3, 2018, the Company entered into a definitive agreement to sell the Advanced Surgical and Orthopedic product lines (the “AS&O Product Line”) within its Medical segment to Viant (formerly MedPlast, LLC), and on July 2, 2018 completed the sale.  The results of operations of the AS&O Product Line are reported as discontinued operations in the Condensed Consolidated Statements of Operations for all periods presented. The Condensed Consolidated Statements of Cash Flows includes cash flows related to the discontinued operations due to Integer’s centralized treasury and cash management processes, and, accordingly, cash flow amounts for discontinued operations are disclosed in Note 2 “Discontinued Operations and Divestiture.” All results and information in the condensed consolidated financial statements are presented as continuing operations and exclude the AS&O Product Line unless otherwise noted specifically as discontinued operations. Refer to Note 2 “Discontinued Operations and Divestiture” for additional information.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information (Accounting Standards Codification (“ASC”) 270, Interim Reporting) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all of the information necessary for a full presentation of financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of the Company for the periods presented. Intercompany transactions and balances have been fully eliminated in consolidation.
Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, certain components of equity, sales, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ materially from these estimates. For further information, refer to the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 28, 2018.
The Company utilizes a fifty-two, fifty-three week fiscal year ending on the Friday nearest December 31. The second quarter of 2019 and 2018 each contained 13 weeks and ended on June 28 and June 29, respectively. The Company’s 2019 fiscal year will end on January 3, 2020 and will be a fifty-three week period. Fiscal year 2018 ended on December 28, 2018 and was a fifty-two week period.
Recent Accounting Pronouncements
The Company considers the applicability and impact of all Accounting Standard Updates (“ASU”) issued by the Financial Accounting Standards Board ("FASB"). ASUs not yet adopted that are not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated result of operations, financial position and cash flows. With the exception of the accounting pronouncements adopted as discussed below, there have been no new or material changes to the significant accounting policies discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2018, that are of significance, or potential significance, to the Company.
(1.)     BASIS OF PRESENTATION (Continued)
Recently Adopted Accounting Guidance
Adoption of ASC Topic 842
Effective December 29, 2018, the Company adopted ASC 842, Leases, which requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The Company elected to transition to ASC 842 using the option to not restate comparative periods and apply the standard as of the date of initial application. In addition, certain practical expedients were elected which permit the Company to not reassess whether existing contracts are or contain leases, to not reassess the lease classification of any existing leases, and to not reassess initial direct costs for any existing leases. The Company also elected the practical expedient to not separate lease and non-lease components for all classes of underlying assets and the practical expedient related to land easements, allowing the Company to carry-forward its accounting treatment for land easements on existing agreements. The Company did not elect the practical expedient pertaining to the use of hindsight. The Company also made an accounting policy election to keep leases with an initial term of 12 months or less and no purchase option the Company is reasonably certain to exercise off the balance sheet for all classes of underlying assets.
As a result of the adoption of ASC 842, the Company recognized operating lease right-of-use assets of $40.9 million and lease liabilities of $43.4 million on December 29, 2018. The difference between the lease assets and lease liabilities primarily represents the existing prepaid rent assets, deferred rent liabilities, and tenant improvement allowances, along with a cumulative-effect adjustment to beginning retained earnings. The adoption of ASC 842 did not have a material impact on the Company’s Condensed Consolidated Statement of Operations and Condensed Consolidated Statement of Cash Flows for the periods presented.
Refer to Note 11 “Leases” for additional information on the Company’s leases.
Adoption of ASU 2017-12 and ASU 2018-16
In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2017-12 amends the designation and measurement guidance for qualifying hedging transactions and the presentation of hedge results in an entity’s financial statements. The new guidance removes the concept of separately measuring and reporting hedge ineffectiveness and requires a company to present the earnings effect of the hedging instrument, including any ineffectiveness, in the same income statement line item in which the earnings effect of the hedged item is reported.
ASU 2017-12 continues to allow an entity to exclude the time value of options and forward points from the assessment of hedge effectiveness. For excluded components in cash flow hedges, the base recognition model under this ASU is an amortization approach. An entity still may elect to record changes in the fair value of the excluded component currently in earnings; however, such an election will need to be applied consistently to similar hedges. The Company has elected to continue to record changes in the fair value of the excluded components of its derivative instruments currently in earnings given their highly effective nature.
Finally, this ASU continues to require an initial prospective quantitative hedge effectiveness assessment and documentation at hedge inception. However, if certain criteria are met, entities can elect to subsequently perform prospective and retrospective effectiveness assessments qualitatively, unless facts and circumstances change, and the hedge effectiveness assessment generally does not need to be completed until the first quarterly hedge effectiveness assessment date (i.e., up to three months).
The Company adopted ASU 2017-12 on December 29, 2018, the first day of the Company’s 2019 fiscal year, which did not materially affect the Company’s results of operations. The Company adopted the guidance on the modified retrospective basis and did not recognize a cumulative effect adjustment upon adoption as the Company had not recognized ineffectiveness on any of the hedging instruments existing as of the date of adoption. Refer to Note 14 “Financial Instruments and Fair Value Measurements” for additional information and disclosures of the Company’s derivatives and hedging activities.
In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. The amendments in ASU 2018-16 permit the use of the OIS rate based on SOFR as a benchmark interest rate for hedge accounting purposes under Topic 815. The amendments in this update were effective for fiscal years beginning after December 15, 2018. The Company adopted this guidance prospectively as of December 29, 2018, concurrent with the adoption of ASU 2017-12, to be applied on a prospective basis for qualifying new or redesignated hedging relationships entered into on or after the date of adoption. Adoption of this guidance had no impact on the Condensed Consolidated Financial Statements.
v3.19.2
Discontinued Operations
6 Months Ended
Jun. 28, 2019
Discontinued Operations and Disposal Groups [Abstract]  
DISCONTINUED OPERATIONS DISCONTINUED OPERATIONS AND DIVESTITURE
On May 3, 2018, the Company entered into a definitive agreement to sell its AS&O Product Line to Viant, and on July 2, 2018, completed the sale, collecting cash proceeds of approximately $581 million, which is net of transaction costs and adjustments set forth in the definitive agreement. In connection with the sale, the parties executed a transition services agreement whereby the Company would provide certain corporate services (including accounting, payroll, and information technology services) to Viant for a period of up to one year from the date of the closing to facilitate an orderly transfer of business operations. Viant paid Integer for these services as specified in the transition services agreement, which ended during the second quarter of 2019. For the performance of services during the three and six months ended June 28, 2019, the Company recognized $1.2 million and $2.9 million, respectively, of income under the transition services agreement. For the six months ended June 28, 2019, $0.1 million is recorded as a reduction of Cost of sales and for the three and six months ended June 28, 2019, $1.2 million and $2.8 million, respectively, is recorded as a reduction of Selling, general and administrative expenses. In addition, the parties executed long-term supply agreements under which the Company and Viant have agreed to supply the other with certain products at prices specified in the agreements for a term of three years.
In connection with the closing of the transaction but prior to a net working capital adjustment, the Company recognized a pre-tax gain on sale of discontinued operations of $195.0 million during the year ended December 28, 2018. During the quarter ended June 28, 2019, the Company received $4.8 million due to a net working capital adjustment agreed to with Viant. This was recognized as gain on sale from discontinued operations, during the quarter ended June 28, 2019.
The operating results of the AS&O Product Line have been classified as discontinued operations in the Condensed Consolidated Statements of Operations for all periods presented. The discontinued operations of the AS&O Product Line are reported in the Medical segment. Income (loss) from discontinued operations net of taxes, were as follows (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 28,
2019
 
June 29,
2018
 
June 28,
2019
 
June 29,
2018
Sales
$

 
$
88,701

 
$

 
$
178,020

Cost of sales

 
71,276

 

 
148,357

Gross profit

 
17,425

 

 
29,663

Selling, general and administrative expenses

 
4,096

 

 
8,905

Research, development and engineering costs

 
1,090

 

 
2,352

Other operating expenses

 
2,497

 

 
3,990

Interest expense

 
11,007

 

 
21,857

Gain on sale of discontinued operations
(4,974
)
 

 
(4,974
)
 

Other (income) loss, net
44

 
109

 
(342
)
 
182

Income (loss) from discontinued operations
  before taxes
4,930

 
(1,374
)
 
5,316

 
(7,623
)
Provision for income taxes
95

 
1,660

 
178

 
377

Income (loss) from discontinued operations
$
4,835

 
$
(3,034
)
 
$
5,138

 
$
(8,000
)

Cash flow information from discontinued operations was as follows (in thousands):
 
Six Months Ended
 
June 28,
2019
 
June 29,
2018
Cash used in operating activities
$
(58
)
 
$
(5,465
)
Cash provided by (used in) investing activities
4,734

 
(3,596
)
 
 
 


Depreciation and amortization
$

 
$
7,450

Capital expenditures

 
3,610


v3.19.2
Inventories
6 Months Ended
Jun. 28, 2019
Inventory Disclosure [Abstract]  
INVENTORIES INVENTORIES
Inventories are comprised of the following (in thousands):
 
June 28,
2019
 
December 28,
2018
Raw materials
$
81,155

 
$
80,213

Work-in-process
73,999

 
75,711

Finished goods
32,000

 
34,152

Total
$
187,154

 
$
190,076


v3.19.2
Goodwill and Other Intangible Assets, Net
6 Months Ended
Jun. 28, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER INTANGIBLE ASSETS, NET GOODWILL AND OTHER INTANGIBLE ASSETS, NET
Goodwill
The changes in the carrying amount of goodwill by reportable segment for the six months ended June 28, 2019 were as follows (in thousands):
 
Medical
 
Non- Medical
 
Total
December 28, 2018
$
815,338

 
$
17,000

 
$
832,338

Foreign currency translation
(970
)
 

 
(970
)
June 28, 2019
$
814,368

 
$
17,000

 
$
831,368


Intangible Assets
Intangible assets at June 28, 2019 and December 28, 2018 were as follows (in thousands):
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
June 28, 2019
 
 
 
 

Definite-lived:
 
 
 
 
 
Purchased technology and patents
$
241,473

 
$
(131,882
)
 
$
109,591

Customer lists
709,344

 
(117,759
)
 
591,585

Other
3,503

 
(3,495
)
 
8

Total
$
954,320

 
$
(253,136
)
 
$
701,184

Indefinite-lived:
 
 
 
 
 
Trademarks and tradenames


 
 
 
$
90,288

 
 
 
 
 
 
December 28, 2018
 
 
 
 

Definite-lived:
 
 
 
 
 
Purchased technology and patents
$
241,726

 
$
(125,540
)
 
$
116,186

Customer lists
710,406

 
(104,556
)
 
605,850

Other
3,503

 
(3,489
)
 
14

Total
$
955,635

 
$
(233,585
)
 
$
722,050

Indefinite-lived:
 
 
 
 
 
Trademarks and tradenames


 
 
 
$
90,288


Aggregate intangible asset amortization expense is comprised of the following (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 28,
2019
 
June 29,
2018
 
June 28,
2019
 
June 29,
2018
Cost of sales
$
3,195

 
$
3,673

 
$
6,457

 
$
7,389

Selling, general and administrative expenses
6,636

 
6,808

 
13,228

 
13,706

Research, development and engineering costs

 
38

 

 
77

Discontinued operations

 
350

 

 
1,410

Total intangible asset amortization expense
$
9,831

 
$
10,869

 
$
19,685

 
$
22,582


Estimated future intangible asset amortization expense based on the carrying value as of June 28, 2019 is as follows (in thousands):
 
2019
 
2020
 
2021
 
2022
 
2023
 
After 2023
Amortization Expense
$
20,427

 
40,449

 
39,597

 
38,564

 
36,721

 
525,426


v3.19.2
Debt
6 Months Ended
Jun. 28, 2019
Debt Disclosure [Abstract]  
DEBT DEBT
Long-term debt is comprised of the following (in thousands):
 
June 28,
2019
 
December 28,
2018
Senior secured term loan A
$
285,937

 
$
304,687

Senior secured term loan B
580,286

 
632,286

Revolving line of credit
10,000

 
5,000

Unamortized discount on term loan B and debt issuance costs
(13,285
)
 
(16,466
)
Total debt
862,938

 
925,507

Current portion of long-term debt
(37,500
)
 
(37,500
)
Total long-term debt
$
825,438

 
$
888,007


The Company has senior secured credit facilities (the “Senior Secured Credit Facilities”) consisting of (i) a revolving credit facility (the “Revolving Credit Facility”) with $200 million borrowing capacity as described below, (ii) a $286 million term loan A facility (the “TLA Facility”), and (iii) a $580 million term loan B facility (the “TLB Facility”). The TLA Facility and TLB Facility are collectively referred to as the “Term Loan Facilities.” The TLB Facility was issued at a 1% discount.
Revolving Credit Facility
The Revolving Credit Facility matures on October 27, 2020. The Revolving Credit Facility includes a $15 million sublimit for swingline loans and a $25 million sublimit for standby letters of credit. The Company is required to pay a commitment fee on the unused portion of the Revolving Credit Facility, which will range between 0.175% and 0.25%, depending on the Company’s Total Net Leverage Ratio (as defined in the Senior Secured Credit Facilities agreement). Interest rates on the Revolving Credit Facility, as well as the TLA Facility, are at the Company’s option, either at: (i) the prime rate plus the applicable margin, which will range between 0.75% and 2.25%, based on the Company’s Total Net Leverage Ratio, or (ii) the applicable LIBOR rate plus the applicable margin, which will range between 1.75% and 3.25%, based on the Company’s Total Net Leverage Ratio.
As of June 28, 2019, the Company had $10 million of outstanding borrowings on the Revolving Credit Facility and an available borrowing capacity of $183.2 million after giving effect to $6.8 million of outstanding standby letters of credit. As of June 28, 2019, the weighted average interest rate on outstanding borrowings under the Revolving Credit Facility was 4.91%.
Term Loan Facilities
The TLA Facility and TLB Facility mature on October 27, 2021 and October 27, 2022, respectively. Interest rates on the TLB Facility are, at the Company’s option, either at: (i) the prime rate plus 2.00% or (ii) the applicable LIBOR rate plus 3.00%, with LIBOR subject to a 1.00% floor. As of June 28, 2019, the interest rates on the TLA Facility and TLB Facility were 4.91% and 5.42%, respectively.
Covenants
The Revolving Credit Facility and TLA Facility contain covenants requiring (A) a maximum Total Net Leverage Ratio of 5.00:1.00, subject to periodic step downs beginning in the third quarter of 2019 and (B) a minimum interest coverage ratio of adjusted EBITDA (as defined in the Senior Secured Credit Facilities) to interest expense of not less than 3.00:1.00. The TLB Facility does not contain any financial maintenance covenants. As of June 28, 2019, the Company was in compliance with these financial covenants.
Contractual maturities under the Senior Secured Credit Facilities for the remainder of 2019 and the next three years (through maturity), excluding any discounts or premiums, as of June 28, 2019 are as follows (in thousands):
 
 
2019
 
2020
 
2021
 
2022
Future minimum principal payments
 
$
18,750

 
47,500

 
229,687

 
580,286


The Company prepaid portions of its TLB Facility during 2019 and 2018. The Company recognized losses from extinguishment of debt during the three and six months ended June 28, 2019 of $0.6 million and $1.0 million, respectively, and $0.4 million and $1.5 million, during the three and six months ended June 29, 2018, respectively. The loss from extinguishment of debt represents the portion of the unamortized discount and debt issuance costs related to the portion of the TLB Facility that was prepaid and is included in Interest Expense in the accompanying Condensed Consolidated Statements of Operations.
v3.19.2
Stock-Based Compensation
6 Months Ended
Jun. 28, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION
The Company maintains certain stock-based compensation plans that were approved by the Company’s stockholders and are administered by the Board of Directors, or the Compensation and Organization Committee of the Board. The stock-based compensation plans provide for the granting of stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), stock appreciation rights and stock bonuses to employees, non-employee directors, consultants, and service providers.
The components and classification of stock-based compensation expense were as follows (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 28,
2019
 
June 29,
2018
 
June 28,
2019
 
June 29,
2018
Stock options
$
102

 
$
197

 
$
203

 
$
511

RSAs and RSUs (time-based)
1,545

 
1,207

 
3,465

 
3,169

Performance-based RSUs (“PRSUs”)
1,073

 
796

 
1,765

 
1,503

Stock-based compensation expense - continuing operations
2,720

 
2,200

 
5,433

 
5,183

Discontinued operations

 
685

 

 
924

Total stock-based compensation expense
$
2,720

 
$
2,885

 
$
5,433

 
$
6,107

 
 
 
 
 
 
 
 
Cost of sales
$
281

 
$
200

 
$
598

 
$
376

Selling, general and administrative expenses
2,334

 
1,968

 
4,664

 
4,747

Research, development and engineering costs
58

 
31

 
124

 
55

Other operating expenses
47

 
1

 
47

 
5

Discontinued operations

 
685

 

 
924

Total stock-based compensation expense
$
2,720

 
$
2,885

 
$
5,433

 
$
6,107


There were no stock options granted during the six months ended June 28, 2019. The weighted average fair value and assumptions used to value options granted during the six months ended June 29, 2018 are as follows:
Weighted average fair value
 
$
14.89

Risk-free interest rate
 
2.21
%
Expected volatility
 
39
%
Expected life (in years)
 
4.0

Expected dividend yield
 
%

The following table summarizes the Company’s stock option activity:
 
Number of
Stock
Options
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life
(In Years)
 
Aggregate
Intrinsic
Value
(In Millions)
Outstanding at December 28, 2018
522,783

 
$
31.88

 
 
 
 
Exercised
(93,472
)
 
17.12

 
 
 
 
Outstanding at June 28, 2019
429,311

 
$
35.09

 
5.5
 
$
21.0

Exercisable at June 28, 2019
394,996

 
$
34.74

 
5.3
 
$
19.4



(7.)     STOCK-BASED COMPENSATION (Continued)
During the six months ended June 28, 2019, the Company awarded grants to members of its Board of Directors and certain members of management. The Board of Directors received grants of RSUs that vest in equal quarterly installments of 25% on the first day of each quarter of the Company’s 2019 fiscal year. The members of management received either RSUs or a mix of RSUs and PRSUs. The RSUs vest ratably, subject to the recipient’s continuous service to the Company over a period of generally three to four years from the grant date. For the Company's PRSUs, in addition to service conditions, the ultimate number of shares to be earned depends on the achievement of financial performance or market-based conditions. The financial performance condition is based on the Company's sales targets. The market conditions are based on the Company’s achievement of a relative total shareholder return (“TSR”) performance requirement, on a percentile basis, compared to a defined group of peer companies over three year performance periods.
The Company uses a Monte Carlo simulation model to determine the grant-date fair value of TSR awards. The grant-date fair value of all other restricted stock awards is equal to the closing market price of Integer common stock on the date of grant.
The weighted average fair value and assumptions used to value the TSR portion of the PRSUs granted are as follows:
 
Six Months Ended
 
June 28,
2019
 
June 29,
2018
Weighted average fair value
$
117.03

 
$
37.46

Risk-free interest rate
2.46
%
 
2.28
%
Expected volatility
40
%
 
40
%
Expected life (in years)
2.8

 
2.9

Expected dividend yield
%
 
%

The following table summarizes RSA and RSU activity:
 
Time-Vested
Activity
 
Weighted Average Fair Value
Nonvested at December 28, 2018
142,236

 
$
49.78

Granted
97,296

 
83.70

Vested
(18,310
)
 
59.66

Forfeited
(5,310
)
 
48.57

Nonvested at June 28, 2019
215,912

 
$
64.29

The following table summarizes PRSU activity:
 
Performance-
Vested
Activity
 
Weighted
Average
Fair Value
Nonvested at December 28, 2018
287,134

 
$
36.15

Granted
50,492

 
101.17

Vested
(75,008
)
 
28.41

Forfeited
(65,293
)
 
32.68

Nonvested at June 28, 2019
197,325

 
$
56.87


v3.19.2
Other Operating Expenses, Net
6 Months Ended
Jun. 28, 2019
Other Income and Expenses [Abstract]  
OTHER OPERATING EXPENSES, NET OTHER OPERATING EXPENSES
Other Operating Expenses is comprised of the following (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 28,
2019
 
June 29,
2018
 
June 28,
2019
 
June 29,
2018
Strategic reorganization and alignment
$
1,656

 
$
3,727

 
$
3,390

 
$
5,781

Manufacturing alignment to support growth
561

 
1,103

 
1,146

 
1,616

Consolidation and optimization initiatives

 
(14
)
 

 
561

Asset dispositions, severance and other
891

 
(124
)
 
1,462

 
518

Other operating expenses - continuing operations
3,108

 
4,692

 
5,998

 
8,476

Discontinued operations

 
2,497

 

 
3,990

Total other operating expenses
$
3,108

 
$
7,189

 
$
5,998

 
$
12,466


Strategic Reorganization and Alignment
As a result of the strategic review of its customers, competitors and markets, the Company began taking steps in 2017 to better align its resources in order to enhance the profitability of its portfolio of products. These initiatives include improving its business processes and redirecting investments away from projects where the market does not justify the investment, as well as aligning resources with market conditions and the Company’s future strategic direction. The Company estimates that it will incur aggregate pre-tax charges in connection with the strategic reorganization and alignment plan, including projects reported in discontinued operations, of between approximately $20 million to $22 million, of which an estimated $16 million to $20 million are expected to result in cash outlays. During the six months ended June 28, 2019, the Company incurred charges relating to this initiative, which primarily included severance and fees for professional services recorded within the Medical segment. As of June 28, 2019, total expense incurred for this initiative since inception, including amounts reported in discontinued operations, was $19.9 million. These actions are expected to be substantially completed by the end of 2019.
Manufacturing Alignment to Support Growth
In 2017, the Company initiated several initiatives designed to reduce costs, increase manufacturing capacity to accommodate growth and improve operating efficiencies.  The plan involves the relocation of certain manufacturing operations and expansion of certain of the Company's facilities. The Company estimates that it will incur aggregate pre-tax restructuring related charges in connection with the realignment plan of between approximately $7 million to $9 million, the majority of which are expected to be cash expenditures. Costs related to the Company’s manufacturing alignment to support growth initiative were primarily recorded within the Medical segment. As of June 28, 2019, total expense incurred for this initiative since inception, including amounts reported in discontinued operations, was $4.6 million. These actions are expected to be substantially completed by the end of 2019.
Consolidation and Optimization Initiatives
Costs related to the Company’s consolidation and optimization initiatives were primarily recorded within the Medical segment. The Company does not expect to incur any material additional costs associated with these activities.
The following table summarizes the change in accrued liabilities, presented within Accrued Expense and Other Current Liabilities on the Condensed Consolidated Balance Sheets, related to the initiatives described above (in thousands):
 
Severance and Retention
 
Other
 
Total
December 28, 2018
$
1,668

 
$
202

 
$
1,870

Restructuring charges
1,263

 
3,273

 
4,536

Cash payments
(887
)
 
(3,469
)
 
(4,356
)
June 28, 2019
$
2,044

 
$
6

 
$
2,050


Asset Dispositions, Severance and Other
During the six months ended June 28, 2019 and June 29, 2018, the Company recorded expenses related to other initiatives not described above, which relate primarily to integration and operational initiatives to reduce future operating costs and improve operational efficiencies.
v3.19.2
Income Taxes
6 Months Ended
Jun. 28, 2019
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to several factors, including discrete items, changes in the mix and amount of pre-tax income and the jurisdictions to which it relates, changes in tax laws and foreign tax holidays, business reorganizations, settlements with taxing authorities and foreign currency fluctuations. In addition, we continue to explore tax planning opportunities that may have a material impact on our effective tax rate.
The Company’s effective tax rate for continuing operations for the second quarter of 2019 was 19.0% on $34.8 million of income from continuing operations before taxes compared to 27.5% on $31.8 million of income from continuing operations before taxes for the same period in 2018. The Company’s effective tax rate for continuing operations for the first six months of 2019 was 17.3% on $60.0 million of income from continuing operations before taxes compared to 28.1% on $50.3 million of income from continuing operations before taxes for the same period of 2018. The difference between the Company’s effective tax rates and the U.S. federal statutory income tax rate of 21% for the second quarter and first six months of 2019 is primarily attributable to discrete tax benefits of $0.4 million and $2.1 million, respectively, as well as the estimated net impact of the Global Intangible Low-Taxed Income tax, the Company’s earnings outside the U.S., which are generally taxed at rates that differ from the U.S federal rate, and the availability of certain tax credits. The discrete tax benefits for 2019 are predominately related to excess tax benefits recognized upon vesting of RSUs or exercise of stock options.
As of June 28, 2019, the balance of unrecognized tax benefits from continuing operations is approximately $5.4 million. It is reasonably possible that a reduction of up to $0.9 million of the balance of unrecognized tax benefits may occur within the next twelve months as a result of potential audit settlements. Approximately $5.3 million of the balance of unrecognized tax benefits would favorably impact the effective tax rate, net of federal benefit on state issues, if recognized.
v3.19.2
Commitments and Contingencies
6 Months Ended
Jun. 28, 2019
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES
Litigation
The Company is subject to litigation arising from time to time in the ordinary course of its business. The Company does not expect that the ultimate resolution of any pending legal actions will have a material effect on its consolidated results of operations, financial position, or cash flows. However, litigation is subject to inherent uncertainties. As such, there can be no assurance that any pending legal action, which the Company currently believes to be immaterial, will not become material in the future.
In April 2013, the Company commenced an action against AVX Corporation and AVX Filters Corporation (collectively “AVX”) alleging that AVX had infringed on the Company’s patents by manufacturing and selling filtered feedthrough assemblies used in implantable pacemakers and cardioverter defibrillators that incorporate the Company’s patented technology. Two juries in the U.S. District Court for the District of Delaware have returned verdicts finding that AVX infringed on three of the Company’s patents and awarded the Company $37.5 million in damages. In March 2018, the U.S. District Court for the District of Delaware vacated the original damage award and ordered a retrial on damages. In the January 2019 retrial on damages, the jury awarded the Company $22.2 million in damages. That award is subject to post-trial proceedings. On July 31, 2019, the U. S. District Court for the District of Delaware entered an order in the AVX litigation denying AVX’s post-trial motion to overturn the jury verdict in favor of the Company. To date, the Company has recorded no gains in connection with this litigation.
(10.)     COMMITMENTS AND CONTINGENCIES (Continued)
Product Warranties
The Company generally warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. The Company does not expect future product warranty claims will have a material effect on its condensed consolidated results of operations, financial position, or cash flows. However, there can be no assurance that any future customer complaints or negative regulatory actions regarding the Company’s products, which the Company currently believes to be immaterial, does not become material in the future. The product warranty liability is presented within Accrued Expense and Other Current Liabilities on the Condensed Consolidated Balance Sheets. The change in product warranty liability was comprised of the following (in thousands):
December 28, 2018
$
2,600

Additions to warranty reserve
195

Adjustments to pre-existing warranties
(635
)
Warranty claims settled
(465
)
June 28, 2019
$
1,695


v3.19.2
Leases
6 Months Ended
Jun. 28, 2019
Leases [Abstract]  
Leases LEASES
The Company primarily leases certain office and manufacturing facilities under operating leases, with additional operating leases for machinery, office equipment and vehicles.  An arrangement is considered to contain a lease if it conveys the right to use an identified asset for a period of time in exchange for consideration.  If it is determined that an arrangement contains a lease, classification of a lease as operating or finance is determined by evaluating the five criteria outlined within ASC 842 at inception. The Company does not currently have any finance leases. The Company’s lease agreements do not contain any residual value guarantees or any material restrictive covenants.
Right-of-use (“ROU”) lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make payments in exchange for that right of use.  Operating lease ROU assets are presented as Operating Lease Assets, the current portion of operating lease liabilities are presented within Accrued Expense and Other Current Liabilities, and the non-current portion of operating lease liabilities are presented as Operating Lease Liabilities on the Condensed Consolidated Balance Sheets. The current portion of operating lease liabilities was $7.3 million as of June 28, 2019. Leases with a term of 12 months or less are not recorded on the balance sheet.
The Company’s real estate leases often contain options to renew, and less frequently, termination options. The exercise of such renewal and termination options are generally at the Company’s sole discretion.  The Company evaluates renewal and termination options at lease commencement to determine if such options are reasonably certain to be exercised based on economic factors.
For certain leases where rent escalates based upon a change in a financial index, such as the Consumer Price Index, the difference between the rate at lease inception and the subsequent fluctuations in that rate are included in variable lease costs.  Additionally, because the Company has elected to not separate lease and non-lease components, variable costs also include payments to the landlord for common area maintenance, real estate taxes, insurance and other operating expenses.  Lease expense is recognized on a straight-line basis over the lease term, with variable lease payments recognized in the period those payments are incurred.
The discount rate implicit within our leases is not readily determinable, and therefore, the Company uses its estimated incremental borrowing rate in determining the present value of lease payments.  The incremental borrowing rate is determined based on the Company’s recent debt issuances, lease term and the currency in which lease payments are made.
The following table presents the weighted average remaining lease term and discount rate:
 
June 28,
2019
Weighted-average remaining lease term of operating leases (in years)
7.7

Weighted-average discount rate of operating leases
5.5
%


(11.)     LEASES (Continued)
The components and classification of lease cost are as follows (in thousands):
 
Three Months Ended
June 28, 2019
 
Six Months Ended
June 28, 2019
Operating lease cost
$
2,442

 
$
4,891

Short-term lease cost (leases with initial term of 12 months or less)
17

 
34

Variable lease cost
652

 
1,207

Sublease income
(478
)
 
(945
)
Total lease cost
$
2,633

 
$
5,187

 
 
 
 
Cost of sales
$
2,190

 
$
4,342

Selling, general and administrative expenses
297

 
552

Research, development and engineering costs
139

 
278

Other operating expenses
7

 
15

Total lease cost
$
2,633

 
$
5,187


The Company’s sublease income is derived primarily from certain real estate leases to several non-affiliated tenants under operating sublease arrangements.
At June 28, 2019, the maturities of operating lease liabilities were as follows (in thousands):
Remainder of 2019
$
5,178

2020
9,268

2021
8,964

2022
6,865

2023
6,119

2024
5,600

Thereafter
16,399

Total lease payments
58,393

Less imputed interest
(11,273
)
Total
$
47,120


As of June 28, 2019, the Company did not have any leases that have not yet commenced.
Supplemental cash flow information related to leases for the six months ended June 28, 2019 is as follows (in thousands):
Cash paid for amounts included in the measurement of operating lease liabilities
$
5,107

ROU assets obtained in exchange for new operating lease liabilities
7,249


During the three months ended June 28, 2019, the Company extended the lease terms of three of its manufacturing facilities. As a result of these lease modifications, the Company re-measured the lease liability and adjusted the ROU asset on the modification dates.
The Company’s future minimum lease commitments, net of sublease income, as of December 28, 2018, under ASC 840, the predecessor to ASC 842, are as follows (in thousands):
 
2019
 
2020
 
2021
 
2022
 
2023
 
After 2023
Future minimum lease payments
$
8,562

 
7,290

 
7,348

 
5,269

 
5,112

 
14,589


v3.19.2
Earnings (Loss) Per Share (EPS)
6 Months Ended
Jun. 28, 2019
Earnings Per Share [Abstract]  
EARNINGS (LOSS) PER SHARE (EPS) EARNINGS (LOSS) PER SHARE (“EPS”)
The following table sets forth a reconciliation of the information used in computing basic and diluted EPS (in thousands, except per share amounts):
 
Three Months Ended
 
Six Months Ended
 
June 28,
2019
 
June 29,
2018
 
June 28,
2019
 
June 29,
2018
Numerator for basic and diluted EPS:
 
 
 
 
 
 
 
Income from continuing operations
$
28,222

 
$
23,056

 
$
49,588

 
$
36,140

Income (loss) from discontinued operations
4,835

 
(3,034
)
 
5,138

 
(8,000
)
Net income
$
33,057

 
$
20,022

 
$
54,726

 
$
28,140

 
 
 
 
 
 
 
 
Denominator for basic and diluted EPS:
 
 
 
 
 
 
 
Weighted average shares outstanding - Basic
32,621

 
32,038

 
32,579

 
31,970

Dilutive effect of assumed exercise of stock options, restricted stock and RSUs
388

 
682

 
416

 
602

Weighted average shares outstanding - Diluted
33,009

 
32,720

 
32,995

 
32,572

 
 
 
 
 
 
 
 
Basic earnings (loss) per share:
 
 
 
 
 
 
 
Income from continuing operations
$
0.87

 
$
0.72

 
$
1.52

 
$
1.13

Income (loss) from discontinued operations
0.15

 
(0.09
)
 
0.16

 
(0.25
)
Basic earnings per share
1.01

 
0.62

 
1.68

 
0.88

 
 
 
 
 
 
 
 
Diluted earnings (loss) per share:
 
 
 
 
 
 
 
Income from continuing operations
$
0.85

 
$
0.70

 
$
1.50

 
$
1.11

Income (loss) from discontinued operations
0.15

 
(0.09
)
 
0.16

 
(0.25
)
Diluted earnings per share
1.00

 
0.61

 
1.66

 
0.86


The diluted weighted average share calculations do not include the following securities, which are not dilutive to the EPS calculations or the performance criteria have not been met (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 28,
2019
 
June 29,
2018
 
June 28,
2019
 
June 29,
2018
Time-vested stock options, restricted stock and RSUs
53

 

 
56

 
50

Performance-vested restricted stock and PRSUs
48

 
92

 
47

 
122


v3.19.2
Stockholders' Equity
6 Months Ended
Jun. 28, 2019
Stockholders' Equity Note [Abstract]  
STOCKHOLDERS' EQUITY
The following is a summary of the number of shares of common stock issued, treasury stock and common stock outstanding for the six month periods ended June 28, 2019 and June 29, 2018:
 
Six months ended June 28, 2019
 
Six months ended June 29, 2018
 
Issued
 
Treasury Stock
 
Outstanding
 
Issued
 
Treasury Stock
 
Outstanding
Balance, beginning of period
32,624,494

 
(151,327
)
 
32,473,167

 
31,977,953

 
(106,526
)
 
31,871,427

Stock options exercised
93,472

 

 
93,472

 
108,305

 

 
108,305

RSAs issued, net of forfeitures
(2,354
)
 

 
(2,354
)
 
(2,354
)
 
20,092

 
17,738

Vesting of RSUs
30,895

 
(3,683
)
 
27,212

 
7,113

 
2,766

 
9,879

Vesting of PSUs
70,115

 
(20,998
)
 
49,117

 
127,191

 
(38,103
)
 
89,088

Balance, end of period
32,816,622

 
(176,008
)
 
32,640,614

 
32,218,208

 
(121,771
)
 
32,096,437



Accumulated Other Comprehensive Income (“AOCI”) is comprised of the following (in thousands):
 
Defined
Benefit
Plan
Liability
 
Cash
Flow
Hedges
 
Foreign
Currency
Translation
Adjustment
 
Total
Pre-Tax
Amount
 
Tax
 
Net-of-Tax
Amount
March 29, 2019
$
(295
)
 
$
2,551

 
$
23,701

 
$
25,957

 
$
(493
)
 
$
25,464

Unrealized loss on cash flow hedges

 
(4,415
)
 

 
(4,415
)
 
927

 
(3,488
)
Realized loss on foreign currency hedges

 
11

 

 
11

 
(2
)
 
9

Realized gain on interest rate swap hedge

 
(714
)
 

 
(714
)
 
150

 
(564
)
Foreign currency translation gain

 

 
4,510

 
4,510

 

 
4,510

June 28, 2019
$
(295
)
 
$
(2,567
)
 
$
28,211

 
$
25,349

 
$
582

 
$
25,931

 
 
 
 
 
 
 
 
 
 
 
 
December 28, 2018
$
(295
)
 
$
3,439

 
$
30,539

 
$
33,683

 
$
(679
)
 
$
33,004

Unrealized loss on cash flow hedges

 
(4,569
)
 

 
(4,569
)
 
959

 
(3,610
)
Realized gain on foreign currency hedges

 
(34
)
 

 
(34
)
 
7

 
(27
)
Realized gain on interest rate swap hedges

 
(1,403
)
 

 
(1,403
)
 
295

 
(1,108
)
Foreign currency translation loss

 

 
(2,328
)
 
(2,328
)
 

 
(2,328
)
June 28, 2019
$
(295
)
 
$
(2,567
)
 
$
28,211

 
$
25,349

 
$
582

 
$
25,931

March 30, 2018
$
(1,422
)
 
$
7,733

 
$
63,641

 
$
69,952

 
$
(923
)
 
$
69,029

Unrealized loss on cash flow hedges

 
(2,223
)
 

 
(2,223
)
 
467

 
(1,756
)
Realized gain on foreign currency hedges

 
(18
)
 

 
(18
)
 
3

 
(15
)
Realized gain on interest rate swap hedges

 
(398
)
 

 
(398
)
 
83

 
(315
)
Foreign currency translation loss

 

 
(25,885
)
 
(25,885
)
 

 
(25,885
)
June 29, 2018
$
(1,422
)
 
$
5,094

 
$
37,756

 
$
41,428

 
$
(370
)
 
$
41,058

 
 
 
 
 
 
 
 
 
 
 
 
December 29, 2017
$
(1,422
)
 
$
3,418

 
$
50,200

 
$
52,196

 
$
(17
)
 
$
52,179

Unrealized gain on cash flow hedges

 
2,901

 

 
2,901

 
(609
)
 
2,292

Realized gain on foreign currency hedges

 
(593
)
 

 
(593
)
 
124

 
(469
)
Realized gain on interest rate swap hedge

 
(632
)
 

 
(632
)
 
132

 
(500
)
Foreign currency translation loss

 

 
(12,444
)
 
(12,444
)
 

 
(12,444
)
June 29, 2018
$
(1,422
)
 
$
5,094

 
$
37,756

 
$
41,428

 
$
(370
)
 
$
41,058


v3.19.2
Financial Instruments and Fair Value Measurements
6 Months Ended
Jun. 28, 2019
Fair Value Disclosures [Abstract]  
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS     FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
Assets and Liabilities Measured at Fair Value on a Recurring Basis