INTEGER HOLDINGS CORP, 10-K filed on 2/22/2018
Annual Report
Document and Entity Information (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Feb. 16, 2018
Jun. 30, 2017
Document and Entity Information [Abstract]
 
 
 
Entity Registrant Name
Integer Holdings Corporation 
 
 
Entity Central Index Key
0001114483 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 29, 2017 
 
 
Amendment Flag
false 
 
 
Document Fiscal Year Focus
2017 
 
 
Document Fiscal Period Focus
FY 
 
 
Current Fiscal Year End Date
--12-29 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Entity Public Float
 
 
$ 1,344 
Entity Common Stock, Shares Outstanding
 
31,900,584 
 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2017
Dec. 30, 2016
Current assets:
 
 
Cash and cash equivalents
$ 44,096 
$ 52,116 
Accounts receivable, net of allowance for doubtful accounts of $0.8 million and $0.7 million, respectively
242,456 
204,626 
Inventories
227,534 
225,151 
Refundable income taxes
37 
13,388 
Prepaid expenses and other current assets
17,786 
22,026 
Total current assets
531,909 
517,307 
Property, plant and equipment, net
370,375 
372,042 
Goodwill
990,238 
967,326 
Other intangible assets, net
920,393 
940,060 
Deferred income taxes
4,152 
3,970 
Other assets
31,278 
31,838 
Total assets
2,848,345 
2,832,543 
Current liabilities:
 
 
Current portion of long-term debt
30,469 
31,344 
Accounts payable
83,517 
77,896 
Income taxes payable
13,477 
3,699 
Accrued expenses
81,540 
72,281 
Total current liabilities
209,003 
185,220 
Long-term debt
1,578,696 
1,698,819 
Deferred income taxes
145,364 
208,579 
Other long-term liabilities
21,901 
14,686 
Total liabilities
1,954,964 
2,107,304 
Commitments and contingencies
   
   
Stockholders’ equity:
 
 
Preferred stock, $0.001 par value, authorized 100,000,000 shares; no shares issued or outstanding
0 
0 
Common stock, $0.001 par value; 100,000,000 shares authorized; 31,977,953 and 31,059,038 shares issued, respectively; 31,871,427 and 30,925,496 shares outstanding, respectively
32 
31 
Additional paid-in capital
669,756 
637,955 
Treasury stock, at cost, 106,526 and 133,542 shares, respectively
(4,654)
(5,834)
Retained earnings
176,068 
109,087 
Accumulated other comprehensive income (loss)
52,179 
(16,000)
Total stockholders’ equity
893,381 
725,239 
Total liabilities and stockholders’ equity
$ 2,848,345 
$ 2,832,543 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Dec. 29, 2017
Dec. 30, 2016
Current assets:
 
 
Allowance for doubtful accounts
$ 0.8 
$ 0.7 
Stockholders’ equity:
 
 
Preferred stock, par value
$ 0.001 
$ 0.001 
Preferred stock, shares authorized
100,000,000 
100,000,000 
Preferred stock, shares issued
0 
0 
Preferred stock, shares outstanding
0 
0 
Common stock, par value
$ 0.001 
$ 0.001 
Common stock, shares authorized
100,000,000 
100,000,000 
Common stock, shares issued
31,977,953 
31,059,038 
Common stock, shares outstanding
31,871,427 
30,925,496 
Treasury stock, shares
106,526 
133,542 
Consolidated Statements of Operations and Comprehensive Income (Loss) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Income Statement [Abstract]
 
 
 
Sales
$ 1,461,921 
$ 1,386,778 
$ 800,414 
Cost of sales
1,068,370 
1,008,479 
565,279 
Gross profit
393,551 
378,299 
235,135 
Operating expenses:
 
 
 
Selling, general and administrative expenses
161,573 
153,291 
102,530 
Research, development and engineering costs
55,247 
55,001 
52,995 
Other operating expenses
37,292 
61,737 
66,464 
Total operating expenses
254,112 
270,029 
221,989 
Operating income
139,439 
108,270 
13,146 
Interest expense
106,460 
111,270 
33,513 
(Gain) loss on cost and equity method investments, net
1,565 
833 
(3,350)
Other (income) loss, net
9,587 
(5,018)
(1,317)
Income (loss) before benefit for income taxes
21,827 
1,185 
(15,700)
Benefit for income taxes
(44,852)
(4,776)
(8,106)
Net income (loss)
66,679 
5,961 
(7,594)
Earnings (loss) per share:
 
 
 
Basic (in dollars per share)
$ 2.12 
$ 0.19 
$ (0.29)
Diluted (in dollars per share)
$ 2.09 
$ 0.19 
$ (0.29)
Weighted average shares outstanding:
 
 
 
Basic (in shares)
31,402 
30,778 
26,363 
Diluted (in shares)
31,888 
30,973 
26,363 
Comprehensive Income (Loss)
 
 
 
Net income (loss)
66,679 
5,961 
(7,594)
Foreign currency translation gain (loss)
65,860 
(19,269)
(7,841)
Net change in cash flow hedges, net of tax
2,243 
2,478 
108 
Defined benefit plan liability adjustment, net of tax
76 
(579)
(20)
Other comprehensive income (loss), net
68,179 
(17,370)
(7,753)
Comprehensive income (loss)
$ 134,858 
$ (11,409)
$ (15,347)
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Cash flows from operating activities:
 
 
 
Net income (loss)
$ 66,679 
$ 5,961 
$ (7,594)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
Depreciation and amortization
102,796 
90,524 
44,632 
Debt related charges included in interest expense
10,911 
7,278 
11,320 
Inventory step-up amortization
0 
0 
22,986 
Stock-based compensation
14,680 
8,408 
9,376 
Non-cash loss on cost and equity method investments
2,965 
1,495 
275 
Other non-cash losses
7,110 
5,216 
1,093 
Deferred income taxes
(59,212)
(7,350)
(10,298)
Changes in operating assets and liabilities, net of acquisitions:
 
 
 
Accounts receivable
(34,597)
(2,169)
3,684 
Inventories
(986)
22,170 
(25,752)
Prepaid expenses and other assets
4,854 
(3,846)
(1,861)
Accounts payable
4,887 
(1,127)
3,129 
Accrued expenses
14,977 
(13,935)
(28,605)
Income taxes payable
14,293 
(7,093)
(9,906)
Net cash provided by operating activities
149,357 
105,532 
12,479 
Cash flows from investing activities:
 
 
 
Acquisition of property, plant and equipment
(47,301)
(58,632)
(44,616)
Proceeds from sale of property, plant and equipment
472 
347 
746 
Purchase of cost and equity method investments
(1,316)
(3,015)
(6,300)
Acquisitions, net of cash acquired
0 
0 
(423,389)
Other investing activities
209 
(2,000)
0 
Net cash used in investing activities
(47,936)
(63,300)
(473,559)
Cash flows from financing activities:
 
 
 
Principal payments of long-term debt
(178,558)
(46,000)
(1,232,175)
Proceeds from issuance of long-term debt
50,000 
57,000 
1,749,750 
Proceeds from Stock Options Exercised
19,324 
2,821 
6,583 
Payment of debt issuance costs
(2,360)
(1,177)
(45,933)
Distribution of cash and cash equivalents to Nuvectra Corporation
0 
(76,256)
0 
Purchase of non-controlling interests
0 
(6,818)
(9,875)
Other financing activities
(75)
(1,716)
(440)
Net cash (used in) provided by financing activities
(111,669)
(72,146)
467,910 
Effect of foreign currency exchange rates on cash and cash equivalents
2,228 
(448)
(1,176)
Net (decrease) increase in cash and cash equivalents
(8,020)
(30,362)
5,654 
Cash and cash equivalents, beginning of year
52,116 
82,478 
76,824 
Cash and cash equivalents, end of year
$ 44,096 
$ 52,116 
$ 82,478 
Consolidated Statement of Stockholders' Equity (USD $)
In Thousands, unless otherwise specified
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Treasury Stock [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Balance at Jan. 02, 2015
$ 613,362 
$ 25 
$ 366,073 
$ (1,307)
$ 239,448 
$ 9,123 
Balance, shares at Jan. 02, 2015
 
25,099 
 
(28)
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Net income (loss)
(7,594)
 
 
 
(7,594)
 
Total other comprehensive income (loss)
(7,753)
 
 
 
 
(7,753)
Stock-based compensation
9,364 
 
9,364 
 
 
 
Net shares issued (acquired)
504 
1 
5,764 
(5,261)
 
 
Net shares issued under stock incentive plans, shares
 
585 
 
(107)
 
 
Shares issued in connection with acquisition
245,368 
5 
245,363 
 
 
 
Issuance of shares in connection with acquisition, shares
 
4,980 
 
 
 
 
Roll-over options issued in connection with acquisition
5,639 
 
5,639 
 
 
 
Shares contributed to 401(k) Plan
3,920 
 
452 
3,468 
 
 
Shares contributed to 401(k) Plan, shares
 
 
 
72 
 
 
Issuance of roll-over options in connection with acquisition
4,508 
 
4,508 
 
 
 
Purchase of non-controlling interests in subsidiaries
(16,693)
 
(16,693)
 
 
 
Balance at Jan. 01, 2016
850,625 
31 
620,470 
(3,100)
231,854 
1,370 
Balance, shares at Jan. 01, 2016
 
30,664 
 
(63)
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Cumulative effect adjustment of the adoption of ASU 2016-09
(510)
 
(812)
0 
302 
0 
Net income (loss)
5,961 
 
 
 
5,961 
 
Total other comprehensive income (loss)
(17,370)
 
 
 
 
(17,370)
Stock-based compensation
8,408 
 
8,408 
 
 
 
Net shares issued (acquired)
(1,164)
0 
1,570 
(2,734)
 
 
Net shares issued under stock incentive plans, shares
 
395 
 
(71)
 
 
Shares issued in connection with acquisition
0 
 
 
 
 
 
Roll-over options issued in connection with acquisition
2,266 
 
2,266 
 
 
 
Shares contributed to 401(k) Plan
0 
 
 
 
 
 
Issuance of roll-over options in connection with acquisition
0 
 
 
 
 
 
Spin-off of Nuvectra Corporation
(123,487)
 
5,241 
 
(128,728)
 
Balance at Dec. 30, 2016
725,239 
31 
637,955 
(5,834)
109,087 
(16,000)
Balance, shares at Dec. 30, 2016
 
31,059 
 
(134)
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Net income (loss)
66,679 
 
 
 
66,679 
 
Total other comprehensive income (loss)
68,179 
 
 
 
 
68,179 
Stock-based compensation
14,680 
 
14,680 
 
 
 
Net shares issued (acquired)
19,114 
1 
17,933 
1,180 
 
 
Net shares issued under stock incentive plans, shares
 
919 
 
27 
 
 
Shares issued in connection with acquisition
0 
 
 
 
 
 
Shares contributed to 401(k) Plan
0 
 
 
 
 
 
Issuance of roll-over options in connection with acquisition
0 
 
 
 
 
 
Balance at Dec. 29, 2017
$ 893,381 
$ 32 
$ 669,756 
$ (4,654)
$ 176,068 
$ 52,179 
Balance, shares at Dec. 29, 2017
 
31,978 
 
(107)
 
 
Summary of Significant Accounting Policies
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(1.)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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, orthopedics, vascular, 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 customers include large multi-national original equipment manufacturers (“OEMs”) and their affiliated subsidiaries.
On October 27, 2015, the Company acquired all of the outstanding common stock of Lake Region Medical Holdings, Inc. (“LRM”). On March 14, 2016, the Company completed the spin-off of a portion of its former QiG segment through a tax-free distribution of all of the shares of its former QiG Group, LLC subsidiary to the stockholders of Integer on a pro rata basis (the “Spin-off”). Refer to Note 2 “Divestiture and Acquisition” for further details of these transactions.
Basis of Presentation and Principles of Consolidation
The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of Integer Holdings Corporation and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
The Company’s results for periods prior to the Spin-off on March 14, 2016 include the financial and operating results of QiG Group, LLC. The Company’s results include the financial and operating results of LRM since the date of acquisition on October 27, 2015. Results for periods prior to October 27, 2015 do not include the financial and operating results of LRM.
The Company organizes its business into two reportable segments: (1) Medical and (2) Non-Medical. Refer to Note 17 “Segment and Geographic Information,” for additional information on the Company’s reportable segments.
Fiscal Year
The Company utilizes a fifty-two or fifty-three week fiscal year ending on the Friday nearest December 31. Fiscal years 2017, 2016 and 2015 consisted of fifty-two weeks and ended on December 29, 2017, December 30, 2016 and January 1, 2016, respectively.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of sales and expenses during the reporting periods. Actual results could differ materially from those estimates.
Reclassifications
Certain prior period amounts have been reclassified to conform to the current segment structure. Refer to Note 17 “Segment and Geographic Information,” for a description of the changes made to reflect the current year product line sales reporting presentation.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash and highly liquid, short-term investments with maturities at the time of purchase of three months or less.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of accounts receivable. A significant portion of the Company’s sales and accounts receivable are to four customers, all in the medical device industry, and, as such, the Company is directly affected by the condition of those customers and that industry. However, the credit risk associated with trade receivables is partially mitigated due to the stability of those customers. The Company performs on-going credit evaluations of its customers. Note 17 “Segment and Geographic Information” contains information on sales and accounts receivable for these customers. The Company maintains cash deposits with major banks, which from time to time may exceed insured limits. The Company performs on-going credit evaluations of its banks.
(1.)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Trade Accounts Receivable and Allowance for Doubtful Accounts
The Company provides credit, in the normal course of business, to its customers in the form of trade receivables. Credit is extended based on evaluation of a customer’s financial condition and collateral is not required. The Company maintains an allowance for those customer receivables that it does not expect to collect. The Company accrues its estimated losses from uncollectable accounts receivable to the allowance based upon recent historical experience, the length of time the receivable has been outstanding and other specific information as it becomes available. Provisions to the allowance for doubtful accounts are charged to current operating expenses. Actual losses are charged against this allowance when incurred.
Inventories
Inventories are stated at the lower of cost, determined using the first-in first-out method, or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Write-downs for excess, obsolete or expired inventory are based primarily on how long the inventory has been held as well as estimates of forecasted net sales of that product. A significant change in the timing or level of demand for products may result in recording additional write-downs for excess, obsolete or expired inventory in the future. Note 4 “Inventories” contains additional information on the Company’s inventory.
Property, Plant and Equipment (“PP&E”)
PP&E is carried at cost less accumulated depreciation. Depreciation is computed by the straight-line method over the estimated useful lives of the assets, as follows: buildings and building improvements 12-30 years; machinery and equipment 3-10 years; office equipment 3-10 years; and leasehold improvements over the remaining lives of the improvements or the lease term, if less. The cost of repairs and maintenance are expensed as incurred; renewals and betterments are capitalized. Upon retirement or sale of an asset, its cost and related accumulated depreciation or amortization is removed from the accounts and any gain or loss is recorded in operating income or expense. The Company also reviews its PP&E for impairment when impairment indicators exist. When impairment indicators exist, the Company determines if the carrying value of its fixed asset(s) exceeds the related undiscounted future cash flows. In cases where the carrying value of the Company's long-lived assets or asset groups (excluding goodwill and indefinite-lived intangible assets) exceeds the related undiscounted cash flows, the carrying value is written down to fair value. Fair value is generally determined using a discounted cash flow analysis. Note 5 “Property, Plant and Equipment, Net” contains additional information on the Company’s PP&E.
Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the “exit price”) in an orderly transaction between market participants at the measurement date. Accounting Standards Codification (“ASC”) 820, Fair Value Measurements, establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:
Level 1 – Valuation is based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Level 1 valuations do not entail a significant degree of judgment.
Level 2 – Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market.
Level 3 – Valuation is based on unobservable inputs that are significant to the overall fair value measurement. The degree of judgment in determining fair value is greatest for Level 3 valuations.
Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, assumptions are required to reflect those that market participants would use in pricing the asset or liability at the measurement date. Note 16 “Fair Value Measurements” contains additional information on assets and liabilities recorded at fair value in the consolidated financial statements.



(1.)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Acquisitions
Results of operations of acquired companies are included in the Company’s results of operations as of the respective acquisition dates. The purchase price of each acquisition is allocated to the net assets acquired based on estimates of their fair values at the date of the acquisition. Any purchase price in excess of these net assets is recorded as goodwill. All direct acquisition-related costs are expensed as incurred. The allocation of purchase price in certain cases may be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from the acquisition date.
Goodwill
Goodwill represents the excess of cost over the fair value of identifiable net assets of a business acquired and is assigned to one or more reporting units. The Company tests each reporting unit’s goodwill for impairment at least annually as of the last day of the fiscal year and between annual tests if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount. In conducting its annual impairment testing, the Company may first perform a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount. If not, no further goodwill impairment testing is required. If it is more likely than not that a reporting unit’s fair value is less than its carrying amount, or if the Company elects not to perform a qualitative assessment of a reporting unit, the Company then compares the fair value of the reporting unit to the related net book value. If the net book value of a reporting unit exceeds its fair value, an impairment loss is measured and recognized. The term more likely than not refers to a level of likelihood that is more than 50 percent.
The Company performed a qualitative assessment of its reporting units as of December 29, 2017. As part of this analysis, the Company evaluated factors including, but not limited to, macro-economic conditions, market and industry conditions, cost factors, competitive environment, share price fluctuations, results of the last impairment test, and the operational stability and the overall financial performance of the reporting units. The assessment indicated that it was more likely than not that the fair value of each of the reporting units exceeded its respective carrying value. The Company does not believe that any of its reporting units are at risk for impairment.
Other Intangible Assets
Other intangible assets consist of purchased technology and patents, customer lists and trademarks. Definite-lived intangible assets are amortized on an accelerated or straight-line basis, which approximates the projected cash flows used to fair value those definite-lived intangible assets at the time of acquisition, as follows: purchased technology and patents 5-15 years; customer lists 7-20 years and other intangible assets 1-10 years. Certain trademark assets are considered indefinite-lived intangible assets and are not amortized. The Company expenses the costs incurred to renew or extend the term of intangible assets.
The Company reviews its definite-lived intangible assets for impairment when impairment indicators exist. When impairment indicators exist, the Company determines if the carrying value of its definite-lived intangible assets exceeds the related undiscounted future cash flows. In cases where the carrying value exceeds the undiscounted future cash flows, the carrying value is written down to fair value. Fair value is generally determined using a discounted cash flow analysis.
The Company assesses its indefinite-lived intangible assets for impairment periodically to determine if any adverse conditions exist that would indicate impairment or when impairment indicators exist. The Company assesses its indefinite-lived intangible assets for impairment at least annually by comparing the fair value of the indefinite-lived intangible asset to its carrying value. The fair value is determined using the income approach.
Refer to Note 6 “Goodwill and Other Intangible Assets, Net” for further details of the Company’s goodwill and other intangible assets.
Cost and Equity Method Investments
Certain of the Company’s investments in equity and other securities are long-term, strategic investments in companies that are in varied stages of development. These investments are included in Other Assets on the Consolidated Balance Sheets. The Company accounts for investments in these entities under the cost or equity method depending on the type of ownership interest, as well as the Company’s ability to exercise influence over these entities. Investments accounted for under the cost method are initially recorded at the amount of the Company’s investment and carried at that cost until a security is deemed impaired or is sold. Equity securities accounted for under the equity method are initially recorded at the amount of the Company’s investment and are adjusted each period for the Company’s share of the investee’s income or loss and dividends paid. The share of net income or losses of equity investments is included (Gain) Loss on Cost and Equity Method Investments, Net, in the Consolidated Statements of Operations and Comprehensive Income (Loss).
(1.)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Equity securities accounted for under both the cost and equity methods are reviewed quarterly for changes in circumstance or the occurrence of events that suggest the Company’s investment may not be recoverable. Examples of such impairment indicators include, but are not limited to: a recent sale or offering of similar shares of the investment at a price below the Company’s cost basis; a significant deterioration in earnings performance; a significant change in the regulatory, economic or technological environment of the investee; or a significant doubt about an investee’s ability to continue as a going concern. If an impairment indicator is identified, management will estimate the fair value of the investment and compare it to its carrying value. The estimation of fair value considers all available financial information related to the investee, including, but not limited to, valuations based on recent third-party equity investments in the investee. Impairment is deemed to be other-than-temporary unless the Company has the ability and intent to hold the investment for a period sufficient for a market recovery up to the carrying value of the investment. Further, evidence must indicate that the carrying value of the investment is recoverable within a reasonable period. For other-than-temporary impairments, an impairment loss is recognized equal to the difference between the investment’s carrying value and its fair value and is recognized in (Gain) Loss on Cost and Equity Method Investments, Net, in the Consolidated Statements of Operations and Comprehensive Income (Loss) in the period the determination is made.
The Company has determined that these investments are not considered variable interest entities. The Company’s exposure related to these entities is limited to its recorded investment. These investments are in start-up research and development companies whose fair value is highly subjective in nature and subject to future fluctuations, which could be significant. Refer to Note 16 “Fair Value Measurements” for further discussion of the Company’s Cost and Equity Method Investments.
Debt Issuance Costs and Discounts
Debt issuance costs and discounts associated with the issuance of debt by the Company are deferred and amortized over the lives of the related debt. Debt issuance costs incurred in connection with the Company’s issuance of its revolving credit facility are classified within Other Assets and amortized to Interest Expense on a straight-line basis over the contractual term of the credit facility. Debt issuance costs and discounts related to the Company’s term-debt are recorded as a reduction of the carrying value of the related debt and are amortized to Interest Expense using the effective interest method over the period from the date of issuance to the put option date (if applicable) or the maturity date, whichever is earlier. The amortization of debt issuance costs and discounts are included in Debt Related Charges Included in Interest Expense in the Consolidated Statements of Cash Flows. Upon prepayment of the related debt, the Company accelerates the recognition of an appropriate amount of the costs as refinancing or extinguishment of debt. Note 8 “Debt” contains additional information on the Company’s debt issuance costs and discounts.
Income Taxes
The consolidated financial statements of the Company have been prepared using the asset and liability approach in accounting for income taxes, which requires the recognition of deferred income taxes for the expected future tax consequences of net operating losses, credits, and temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided on deferred tax assets if it is determined, within each taxing jurisdiction, that it is more likely than not that the asset will not be realized.
The Company accounts for uncertain tax positions using a more likely than not recognition threshold. The evaluation of uncertain tax positions is based on factors including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. These tax positions are evaluated on a quarterly basis. The Company recognizes interest expense related to uncertain tax positions as Provision (Benefit) for Income Taxes. Penalties, if incurred, are recognized as a component of Selling, General and Administrative Expenses (“SG&A”).
The Company and its subsidiaries file a consolidated U.S. federal income tax return. State tax returns are filed on a combined or separate basis depending on the applicable laws in the jurisdictions where the tax returns are filed. The Company also files foreign tax returns on a separate company basis in the countries in which it operates.
(1.)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Derivative Financial Instruments
The Company recognizes all derivative financial instruments in its consolidated financial statements at fair value. Changes in the fair value of derivative instruments are recorded in earnings unless hedge accounting criteria are met. The Company designated its interest rate swap (Refer to Note 8 “Debt”) and foreign currency contracts (Refer to Note 13 “Commitments and Contingencies”) entered into as cash flow hedges. The effective portion of the changes in fair value of these cash flow hedges is recorded each period, net of tax, in Accumulated Other Comprehensive Income (Loss) until the related hedged transaction occurs. Any ineffective portion of the changes in fair value of these cash flow hedges is recorded in earnings. In the event the hedged cash flow for forecasted transactions does not occur, or it becomes probable that they will not occur, the Company reclassifies the amount of any gain or loss on the related cash flow hedge to income (expense) at that time. Cash flows related to these derivative financial instruments are included in cash flows from operating activities. The cash flows from the termination of interest rate swap agreements are reported as operating activities in the Consolidated Statements of Cash Flows.
Revenue Recognition
The Company recognizes revenue when it is realized or realizable and earned. This occurs when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable (including any price concessions under long-term agreements), the buyer is obligated to pay us (i.e., not contingent on a future event), the risk of loss is transferred, there is no obligation of future performance, collectability is reasonably assured and the amount of future returns can reasonably be estimated. With regards to the Company’s customers (including distributors), those criteria are met when title passes, generally at the point of shipment. Currently, the revenue recognition policy is the same for the Company’s Medical and Non-Medical segments. In general, for customers with long-term contracts, we have negotiated fixed pricing arrangements. During new contract negotiations, price level decreases (concessions) for future sales may be offered to customers in exchange for volume and/or long-term commitments. Once the new contracts are signed, these prices are fixed and determinable for all future sales and revenue is recognized at that fixed price. The Company includes shipping and handling fees billed to customers in Sales. Shipping and handling costs associated with inbound and outbound freight are recorded in Cost of Sales.
Environmental Costs
Environmental expenditures that relate to an existing condition caused by past operations and that do not provide future benefits are expensed as incurred. Liabilities are recorded when environmental assessments are made, the requirement for remedial efforts is probable and the amount of the liability can be reasonably estimated. Liabilities are recorded generally no later than the completion of feasibility studies. The Company has an ongoing monitoring and identification process to assess how the activities, with respect to known exposures, are progressing against the recorded liabilities, as well as to identify other potential remediation sites that are presently unknown.
Restructuring Expenses
The Company continually evaluates alternatives to align the business with the changing needs of its customers and to lower operating costs. This includes the realignment of its existing manufacturing capacity, facility closures, or similar actions, either in the normal course of business or pursuant to significant restructuring programs. These actions may result in employees receiving voluntary or involuntary employee termination benefits, which may be pursuant to contractual agreements. Voluntary termination benefits are accrued when an employee accepts the related offer. Involuntary termination benefits are accrued upon the commitment to a termination plan and the benefit arrangement is communicated to affected employees, or when liabilities are determined to be probable and estimable, depending on the existence of a substantive plan for severance or termination. All other exit costs are expensed as incurred. Refer to Note 11 “Other Operating Expenses” for additional information.
Product Warranties
The Company allows customers to return defective or damaged products for credit, replacement, or repair. The Company warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. The Company accrues its estimated exposure to warranty claims, through Cost of Sales, based upon recent historical experience and other specific information as it becomes available. Note 13 “Commitments and Contingencies” contains additional information on the Company’s product warranties.
Research, Development and Engineering Costs (“RD&E”)
RD&E costs are expensed as incurred. The primary costs are salary and benefits for personnel, material costs used in development projects and subcontracting costs.
(1.)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Stock-Based Compensation
The Company recognizes stock-based compensation expense for its related compensation plans, which include stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance-based restricted stock units (“PRSUs”). For the Company's PRSUs, in addition to service conditions, the ultimate number of shares to be earned depends on the achievement of targets based on market-based conditions, such as total shareholder return, or financial metrics such as adjusted operating income (“AOI”) and adjusted earnings before income taxes and depreciation (“EBITDA”). The Company recognizes forfeitures of equity awards as incurred.
The fair value of the stock-based compensation is determined at the grant date. The Company uses the Black-Scholes standard option pricing model (“Black-Scholes model”) to determine the fair value of stock options. The fair value of each RSU and RSA is determined based on the Company's closing stock price on the date of grant. The fair value of each PRSU is determined based on either the Company's closing stock price on the date of grant or through a Monte Carlo simulation valuation model (“Monte Carlo model”) for those awards that include a market-based condition. In addition to the closing stock price on the date of grant, the determination of the fair value of awards using both the Black-Scholes and Monte Carlo models is affected by other assumptions, including the following:
Expected Term - The Company analyzes historical employee exercise and termination data to estimate the expected term assumption for stock options. For market-based awards, the term is commensurate with the performance period remaining as of the grant date.
Risk-free Interest Rate - A risk-free rate is based on the U.S. Treasury rates in effect on the grant date for a maturity equal to or approximating the expected term of the award.
Expected Volatility - For stock options, expected volatility is calculated using historical volatility based on the daily closing prices of the Company's common stock over a period equal to the expected term. For market-based awards, a combination of historical and implied volatilities for the Company and members of its peer group are used in developing the expected volatility assumption.
Dividend Yield - The dividend yield assumption is based on the Company’s history and the expected annual dividend yield on the grant date.
The Company recognizes compensation expense based on the fair value of the award on the date of grant. For stock options, RSAs and RSUs, compensation expense is recognized over the respective service period using the straight-line amortization method. Compensation expense for PRSUs with financial metrics is reassessed each reporting period and recognized based upon the probability that the performance targets will be achieved. Compensation expense for market-based awards is not adjusted based on actual achievement of the performance goals. Based on the vesting terms of the grant, compensation expense for PRSUs is amortized over the service period using either a graded vesting method or the straight-line amortization method. The actual expense recognized over the vesting period will only be for those awards that ultimately vest, excluding market-based award considerations.
All stock option awards granted under the Company’s compensation plans have an exercise price equal to the closing stock price on the date of grant, a ten-year contractual life and generally, vest annually over a three-year vesting term. RSUs typically vest in equal annual installments over a three or four year period. Stock option and RSAs issued to members of the Company’s Board of Directors as a portion of their annual retainer vest quarterly over a one-year vesting term. Earned PRSUs typically vest two to three years from the date of grant.
The Company records deferred tax assets for awards that result in deductions on the Company's income tax returns, based on the amount of stock-based compensation expense recognized and the statutory tax rate in the jurisdiction in which it will receive a deduction. Differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported on the income tax return are recorded as a component of income tax expense in the Consolidated Statements of Operations and Comprehensive Income (Loss). Note 10 “Stock-Based Compensation” contains additional information on the Company’s stock-based compensation.
(1.)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Foreign Currency Translation and Remeasurement
The Company translates all assets and liabilities of its foreign subsidiaries, where the U.S. dollar is not the functional currency, at the period-end exchange rate and translates income and expenses at the average exchange rates in effect during the period. The net effect of this translation is recorded in the consolidated financial statements as Accumulated Other Comprehensive Income (Loss). Translation adjustments are not adjusted for income taxes as they relate to permanent investments in the Company’s foreign subsidiaries.
The Company has foreign operations in Ireland, Germany, France, Switzerland, Mexico, Uruguay, and Malaysia, which expose the Company to foreign currency exchange rate fluctuations due to transactions denominated in Euros, Swiss francs, Mexican pesos, Uruguayan pesos, and Malaysian ringgits. To the extent that monetary assets and liabilities, including short-term and long-term intercompany loans, are recorded in a currency other than the functional currency of the subsidiary, these amounts are remeasured each period at the period-end exchange rate, with the resulting gain or loss being recorded in Other (Income) Loss, Net in the Consolidated Statements of Operations and Comprehensive Income (Loss). Net foreign currency transaction gains (losses) included in Other (Income) Loss, Net amounted to $(9.7) million, $4.9 million and $1.3 million for 2017, 2016 and 2015, respectively, and primarily related to the remeasurement of intercompany loans and the fluctuation of the U.S. dollar relative to the Euro.
Defined Benefit Plans
The Company recognizes in its balance sheet as an asset or liability the overfunded or underfunded status of its defined benefit plans provided to its employees located in Mexico, Switzerland, France and Germany. This asset or liability is measured as the difference between the fair value of plan assets, if any, and the benefit obligation of those plans. For these plans, the benefit obligation is the projected benefit obligation, which is calculated based on actuarial computations of current and future benefits for employees. Actuarial gains or losses and prior service costs or credits that arise during the period, but are not included as components of net periodic benefit expense, are recognized as a component of Accumulated Other Comprehensive Income (Loss). Defined benefit expenses are charged to Cost of Sales, SG&A and RD&E expenses as applicable. Note 9 “Benefit Plans” contains additional information on these costs.
Earnings (Loss) Per Share (“EPS”)
Basic EPS is calculated by dividing Net Income (Loss) by the weighted average number of shares outstanding during the period. Diluted EPS is calculated by adjusting the weighted average number of shares outstanding for potential common shares if dilutive to the EPS calculation and consist of stock options, unvested RSAs and RSUs and, if applicable, contingently convertible instruments such as convertible debt. Note 14 “Earnings (Loss) Per Share” contains additional information on the computation of the Company’s EPS. 
Comprehensive Income (Loss)
The Company’s comprehensive income (loss) as reported in the Consolidated Statements of Operations and Comprehensive Income (Loss) includes net income (loss), foreign currency translation adjustments, the net change in cash flow hedges, and defined benefit plan liability adjustments. The Consolidated Statements of Operations and Comprehensive Income (Loss) and Note 15 “Accumulated Other Comprehensive Income (Loss)” contains additional information on the computation of the Company’s comprehensive income (loss).
Recent Accounting Pronouncements
In the normal course of business, management evaluates all new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”), Securities and Exchange Commission (“SEC”), or other authoritative accounting bodies to determine the potential impact they may have on the Company’s Consolidated Financial Statements. Based upon this review, except as noted below, management does not expect any of the recently issued accounting pronouncements, which have not already been adopted, to have a material impact on the Company’s Consolidated Financial Statements.






(1.)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recently Adopted
In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 simplifies various aspects of the accounting for stock-based payments. The simplifications include:
•
recording all tax effects associated with stock-based compensation through the income statement, as opposed to recording certain amounts in other paid-in capital, which eliminates the requirements to calculate a windfall pool;
•
allowing entities to withhold shares to satisfy the employer’s statutory tax withholding requirement up to the highest marginal tax rate applicable to employees rather than the employer’s minimum statutory rate, without requiring liability classification for the award;
•
modifying the requirement to estimate the number of awards that will ultimately vest by providing an accounting policy election to either estimate the number of forfeitures or recognize forfeitures as they occur;
•
changing certain presentation requirements in the statement of cash flows, including removing the requirement to present excess tax benefits as an inflow from financing activities and an outflow from operating activities, and requiring the cash paid to taxing authorities arising from withheld shares to be classified as a financing activity; and
•
the assumed proceeds from applying the treasury stock method when computing EPS is amended to exclude the amount of excess tax benefits that would be recognized in additional paid-in capital.
The Company adopted the provisions of ASU 2016-09 on December 31, 2016, the beginning of its 2017 fiscal year. The adoption of ASU 2016-09 resulted in the Company making an accounting policy election to change how it will recognize the number of stock awards that will ultimately vest. In the past, the Company applied a forfeiture rate to shares granted. With the adoption of ASU 2016-09, the Company will recognize forfeitures as they occur. This change resulted in the Company making a cumulative effect change to retained earnings of $0.3 million. In addition, the Company recorded the tax effects associated with stock-based compensation through the income statement for 2017 and will continue to record amounts prospectively through the income statement in accordance with ASU 2016-09.  Finally, the Company adjusted its dilutive shares calculation to remove the excess tax benefits from the calculation of EPS on a prospective basis. The revised calculation is more dilutive, but did not have a material impact on the Company's diluted EPS calculation for 2017.
In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory,” which simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU is effective for public business entities for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company adopted this standard in the first quarter of fiscal year 2017 on a prospective basis. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.
In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment (Topic 350)” to simplify the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test. A goodwill impairment will now be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, limited to the amount of goodwill allocated to that reporting unit. ASU 2017-04 is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted for any impairment tests performed after January 1, 2017. The Company adopted the new guidance on a prospective basis during the first quarter of 2017. The adoption of this ASU did not impact the Company’s consolidated financial statements.
Not Yet Adopted
In February 2018, the FASB issued ASU 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which allows for the reclassification of certain income tax effects related to the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) between accumulated other comprehensive income (loss) and retained earnings. The amendments eliminate the stranded tax effects that were created as a result of the reduction of the U.S. federal corporate income tax rate. The accounting update is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. Adoption of this ASU is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the tax laws or rates were recognized. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements.

(1.)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” The amendments in this ASU better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships, making more hedges eligible for hedge accounting, particularly for rates and commodities hedges. It also aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements by requiring an entity to present the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported. This guidance is effective for the Company in the first quarter of fiscal year 2019, with early adoption permitted. The Company does not believe the adoption of this guidance will have a material impact on its consolidated financial statements.
In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-entity Transfers of Assets Other Than Inventory,” which requires entities to recognize the income tax consequences of intra-entity transfers of assets other than inventory when the transfers occur. This ASU is effective for the Company for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company does not believe the adoption of this guidance will have a material impact on its consolidated financial statements.
In August 2016, the FASB issued ASU 2016-15 “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments: A Consensus of the FASB Emerging Issues Task Force.” ASU 2016-15 makes targeted changes to how cash receipts and cash payments are presented in the statement of cash flows. The areas specifically addressed include debt prepayment and debt extinguishment costs, the settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, cash premiums paid for and proceeds from corporate-owned life insurance policies, distributions received from equity method investees and cash receipts from payments on transferor’s beneficial interest on securitized trade receivables. Additionally, the amendment states that, in the absence of other prevailing guidance, cash receipts and payments that have characteristics of more than one class of cash flows should have each separately identifiable source or use of cash presented within the most predominant class of cash flows based on the nature of the underlying cash flows. This guidance is effective for the Company in the first quarter of fiscal year 2018, with early adoption permitted. The Company does not believe the adoption of this guidance will have a material impact on its consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which requires companies to recognize a lease liability that represents the discounted obligation to make future minimum lease payments, and a corresponding right-of-use asset on the balance sheet for most leases. This ASU retains a distinction between finance leases and operating leases, and the classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the current accounting literature. The result of retaining a distinction between finance leases and operating leases is that under the lessee accounting model in Topic 842, the effect of leases in a consolidated statement of comprehensive income and a consolidated statement of cash flows is largely unchanged from previous GAAP.  The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and are required to be applied on a modified retrospective basis. Earlier application is permitted. The Company expects the adoption of ASU 2016-02 will result in a material increase in the assets and liabilities on its Consolidated Balance Sheets for its right-to-use assets and lease liabilities. The Company is currently evaluating the impact that the adoption of this ASU will have on its Consolidated Statements of Operations and Comprehensive Income (Loss).
In January 2016, the FASB issued ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This ASU requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; requires entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset and requires entities to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option. The new ASU is effective for public companies for fiscal years beginning after December 15, 2017. Early adoption of the own credit provision is permitted. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements.
(1.)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which has been subsequently updated by ASU 2015-14, 2016-08, 2016-10 and 2016-12. The core principle behind ASU 2014-09 is that an entity should recognize revenue in an amount that reflects the consideration to which it expects to be entitled in exchange for delivering goods and services using a five-step model. Enhanced disclosures are required, including revenue recognition policies to identify performance obligations and significant judgments in measurement and recognition. This ASU can be adopted using either a full retrospective approach, where historical financial information is presented in accordance with the new standard, or a modified retrospective approach, where this ASU is applied to the most current period presented in the financial statements. This ASU is effective for the Company in the first quarter of fiscal year 2018.
The Company has evaluated the impact of adopting ASU 2014-09 by applying the five-step model to existing contracts with customers.  The majority of the Company’s customer contracts consist of a single performance obligation for which revenue will continue to be recognized at the point of shipment. As a result, the Company has concluded that this standard does not have a material impact on the Company’s financial condition or results of operations.  In conjunction with this evaluation, the Company also reviewed internal controls, business processes and key system functionality and no significant changes were deemed necessary. The Company is currently finalizing the required additional disclosures related to the nature, timing and uncertainty of revenue and cash flows arising from contracts with customers.  The Company will adopt using the modified retrospective approach on December 30, 2017, the first day of the Company’s 2018 fiscal year.
As ASU 2014-09 is principle based, interpretation of those principles may vary from company to company based upon their unique circumstances.  New information may arise that could change the Company’s current understanding and interpretation of the standard and its impact on the Company.  The Company will continue to monitor industry activities and any additional guidance provided by regulators, standard setters or the accounting profession and will adjust its implementation of the standard accordingly.
Divestiture and Acquisition
DIVESTITURE AND ACQUISITION
(2.)    DIVESTITURE AND ACQUISITION
Spin-off of Nuvectra Corporation
On March 14, 2016, Integer completed the spin-off of a portion of its former QiG segment through a tax-free distribution of all of the shares of its former QiG Group, LLC subsidiary to the stockholders of Integer on a pro rata basis. Immediately prior to completion of the Spin-off, QiG Group, LLC was converted into a corporation organized under the laws of Delaware and changed its name to Nuvectra Corporation (“Nuvectra”). On March 14, 2016, each of the Company’s stockholders of record as of the close of business on March 7, 2016 (the “Record Date”) received one share of Nuvectra common stock for every three shares of Integer common stock held as of the Record Date. Upon completion of the Spin-off, Nuvectra became an independent publicly traded company whose common stock is listed on the NASDAQ stock exchange under the symbol “NVTR.”
The portion of the former QiG segment spun-off consisted of QiG Group, LLC and its subsidiaries: (i) Algostim, LLC (“Algostim”), (ii) PelviStim LLC (“PelviStim”), and (iii) the Company’s NeuroNexus Technologies (“NeuroNexus”) subsidiary. The operations of Centro de Construcción de Cardioestimuladores del Uruguay (“CCC”) and certain other existing QiG research and development capabilities were retained by the Company and not included as part of the Spin-off. As the Company continues to focus on the design and development of complete medical device systems and components, and more specifically on medical device systems and components in the neuromodulation market, the Spin-off was not considered a strategic shift that had a major effect on the Company’s operations and financial results. Accordingly, the Spin-off is not presented as a discontinued operation in the Company’s Consolidated Financial Statements. The results of Nuvectra are included in the Consolidated Statements of Operations and Comprehensive Income (Loss) through the date of the Spin-off.
(2.)    DIVESTITURE AND ACQUISITION (Continued)
In connection with the Spin-off, during the first quarter of 2016, the Company made a cash capital contribution of $75 million to Nuvectra and divested the following assets and liabilities (in thousands):
Assets divested
 
  Cash and cash equivalents
$
76,256

  Other current assets
977

  Property, plant and equipment, net
4,407

  Amortizing intangible assets, net
1,931

  Goodwill
40,830

  Deferred income taxes
6,446

Total assets divested
130,847

Liabilities transferred
 
     Current liabilities
2,119

Net assets divested
$
128,728


Nuvectra contributed a pre-tax loss of $5.2 million and $24.4 million to the Company’s results of operations for the fiscal years ended December 30, 2016 and January 1, 2016, respectively.
Acquisition of LRM
On October 27, 2015, the Company acquired all of the outstanding common stock of LRM for a total purchase price including debt assumed of approximately $1.77 billion. LRM specialized in the design, development, and manufacturing of products across the medical component and device spectrum primarily serving the cardio, vascular and advanced surgical markets.
Fair Value of Consideration Transferred
The aggregate consideration paid by the Company to the stockholders of LRM consisted of the following (in thousands):
Cash
$
478,490

Fair value of Integer common stock
245,368

Replacement stock options attributable to pre-acquisition service
4,508

Total purchase consideration
$
728,366


The fair value of the Integer common stock issued as part of the consideration was determined based upon the closing stock price of Integer’s shares as of the acquisition date. The fair value of the Integer stock options issued as part of the consideration was determined utilizing a Black-Scholes option pricing model as of the acquisition date. Concurrent with the closing of the acquisition, the Company repaid all of the outstanding debt of LRM of approximately $1.0 billion. The cash portion of the purchase price and the repayment of LRM’s debt was primarily funded through a new senior secured credit facility and the issuance of senior notes. Refer to Note 8 “Debt” for additional information regarding the Company’s debt.
Fair Value of Assets Acquired and Liabilities Assumed
This transaction was accounted for under the acquisition method of accounting. Accordingly, the cost of the acquisition was allocated to the LRM assets acquired and liabilities assumed based on their fair values as of the closing date of the acquisition, with the amount exceeding the fair value of the net assets acquired recorded as goodwill. The fair value of assets acquired and liabilities assumed was finalized during the third quarter of fiscal year 2016. Measurement-period adjustments made during 2016 were an increase to current liabilities of $1.5 million, and reductions to goodwill of $1.1 million and deferred tax liabilities of $2.6 million These adjustments did not impact the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss). The measurement period for this acquisition is closed and no further purchase price adjustments will be made.
(2.)    DIVESTITURE AND ACQUISITION (Continued)
The fair values of the assets acquired and liabilities assumed are as follows (in thousands):
Assets acquired
 
Current assets
$
269,815

Property, plant and equipment
216,473

Amortizing intangible assets
849,000

Indefinite-lived intangible assets
70,000

Goodwill
660,670

Other non-current assets
1,629

Total assets acquired
2,067,587

Liabilities assumed
 
Current liabilities
103,986

Debt assumed
1,044,675

Other long-term liabilities
190,560

Total liabilities assumed
1,339,221

Net assets acquired
$
728,366


The goodwill acquired in connection with the acquisition was allocated to the Medical segment and is not deductible for tax purposes. Various factors contributed to the establishment of goodwill, including the value of LRM’s highly trained assembled work force and management team, the incremental value resulting from LRM’s industry leading capabilities and services to OEMs, enhanced synergies, and the expected revenue growth over time that is attributable to increased market penetration from future products and customers. In connection with the acquisition, the Company recognized a $70 million trademarks and tradenames indefinite-lived intangible asset, $160 million of purchased technology definite-lived intangible assets that had an estimated weighted average amortization period of 7 years and $689 million of customer lists definite-lived intangible assets that had an estimated weighted average amortization period of 14 years. In connection with the acquisition, the Company also recorded the inventory acquired at fair value resulting in an increase in inventory of $23.0 million. This step-up in the fair value of inventory was amortized as the inventory to which the step-up relates was sold and was fully amortized as of January 1, 2016.
The operating results of LRM have been included in the Company’s consolidated results since the date of acquisition. For the fiscal year ended December 30, 2016, LRM had $802.4 million of revenue and $32.8 million of net income. For the fiscal year ended January 1, 2016, LRM had $138.6 million of revenue and a net loss of $17.4 million. Disclosure of the operating results from LRM for fiscal year 2017 is not practicable, as the Company has already integrated operations in many areas.
Unaudited Pro Forma Financial Information
The following unaudited pro forma information summarizes the consolidated results of operations of the Company and LRM for fiscal year 2015 as if the acquisition of LRM occurred as of the beginning of fiscal year 2015 (in thousands, except per share amounts): 
Sales
$
1,445,689

Net income
2,405

Earnings per share:
 
Basic
$
0.08

Diluted
$
0.08


(2.)    DIVESTITURE AND ACQUISITION (Continued)
The unaudited pro forma information presents the combined operating results of Integer and LRM, with the results prior to the acquisition date adjusted to include the pro forma impact of the amortization of acquired intangible assets, the adjustment to interest expense reflecting the amount borrowed in connection with the acquisition at Integer’s interest rate, and the impact of income taxes on the pro forma adjustments utilizing the applicable statutory tax rate. Fiscal year 2015 pro forma earnings were adjusted to exclude $32.3 million of acquisition-related costs (change-in-control payments, investment banking fees, professional fees), $9.5 million of debt related charges (commitment fees, swap termination fees, debt extinguishment fees) and $23.0 million of nonrecurring amortization expense related to the fair value step-up of inventory incurred in 2015 as a result of the acquisition of LRM. The unaudited pro forma consolidated basic and diluted earnings per share calculations are based on the consolidated basic and diluted weighted average shares of Integer. The unaudited pro forma results are presented for illustrative purposes only and do not reflect the realization of potential cost savings, and any related integration costs. Costs savings may result from the acquisition; however, there can be no assurance that these cost savings will be achieved. These pro forma results do not purport to be indicative of the results that would have been obtained by the combined company, or to be a projection of results that may be obtained in the future by the combined company.
Supplemental Cash Flow Information
SUPPLEMENTAL CASH FLOW INFORMATION
(3.)    SUPPLEMENTAL CASH FLOW INFORMATION
The following represents supplemental cash flow information for fiscal years 2017, 2016 and 2015 (in thousands):
 
2017
 
2016
 
2015
Noncash investing and financing activities:
 
 
 
 
 
Property, plant and equipment purchases included in accounts payable
$
3,474

 
$
3,499

 
$
7,401

Common stock contributed to 401(k) Plan
—

 
—

 
3,920

Common stock issued in connection with LRM acquisition
—

 
—

 
245,368

Replacement stock options issued in connection with LRM acquisition
—

 
—

 
4,508

Purchase of non-controlling interests in subsidiaries included in accrued expenses
—

 
—

 
6,818

Cash paid (refunded) during the year for:
 
 
 
 
 
Interest
93,839

 
106,475

 
13,057

Income taxes
(8,185
)
 
7,263

 
6,312

Acquisition of noncash assets
—

 
—

 
2,013,604

Liabilities assumed
—

 
—

 
1,340,339

Inventories
INVENTORIES
(4.)     INVENTORIES
Inventories are comprised of the following (in thousands):
 
December 29,
2017
 
December 30,
2016
Raw materials
$
97,615

 
$
100,738

Work-in-process
92,650

 
89,224

Finished goods
37,269

 
35,189

Total
$
227,534

 
$
225,151

Property, Plant and Equipment, Net
PROPERTY, PLANT AND EQUIPMENT, NET
(5.)     PROPERTY, PLANT AND EQUIPMENT, NET
PP&E is comprised of the following (in thousands):
 
December 29, 2017
 
December 30,
2016
Manufacturing machinery and equipment
$
373,558

 
$
332,886

Buildings and building improvements
138,605

 
132,277

Information technology hardware and software
62,204

 
52,467

Leasehold improvements
64,675

 
59,292

Furniture and fixtures
20,555

 
18,989

Land and land improvements
19,577

 
20,046

Construction work in process
28,051

 
32,252

Other
1,146

 
1,062

 
708,371

 
649,271

Accumulated depreciation
(337,996
)
 
(277,229
)
Total
$
370,375

 
$
372,042


Depreciation expense for PP&E was as follows for fiscal years 2017, 2016 and 2015 (in thousands):
 
2017
 
2016
 
2015
Depreciation expense
$
56,084

 
$
52,662

 
$
27,136

Goodwill and Other Intangible Assets, Net
Goodwill and Other Intangible Assets, Net
(6.)     GOODWILL AND OTHER INTANGIBLE ASSETS, NET
Goodwill
The change in the carrying amount of goodwill by reportable segment during fiscal year 2017 was as follows (in thousands):
 
Medical
 
Non-Medical
 
Total
December 30, 2016
$
950,326

 
$
17,000

 
$
967,326

Foreign currency translation
22,912

 
—

 
22,912

December 29, 2017
$
973,238

 
$
17,000

 
$
990,238


As of December 29, 2017, no accumulated impairment loss has been recognized for the goodwill allocated to the Company’s Medical or Non-Medical segments.
Intangible Assets
Intangible assets are comprised of the following (in thousands):
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Foreign
Currency
Translation
 
Net
Carrying
Amount
December 29, 2017
 
 
 
 
 
 
 
Definite-lived:
 
 
 
 
 
 
 
Purchased technology and patents
$
256,719

 
$
(117,695
)
 
$
2,483

 
$
141,507

Customer lists
759,987

 
(87,555
)
 
16,103

 
688,535

Other
4,534

 
(7,797
)
 
3,326

 
63

Total amortizing intangible assets
$
1,021,240

 
$
(213,047
)
 
$
21,912

 
$
830,105

Indefinite-lived:
 
 
 
 
 
 
 
Trademarks and tradenames
 
 
 
 
 
 
$
90,288

 
 
 
 
 
 
 
 
December 30, 2016
 
 
 
 
 
 
 
Definite-lived:
 
 
 
 
 
 
 
Purchased technology and patents
$
256,719

 
$
(100,719
)
 
$
333

 
$
156,333

Customer lists
759,987

 
(60,474
)
 
(6,269
)
 
693,244

Other
4,534

 
(5,142
)
 
803

 
195

Total amortizing intangible assets
$
1,021,240

 
$
(166,335
)
 
$
(5,133
)
 
$
849,772

Indefinite-lived:
 
 
 
 
 
 
 
Trademarks and tradenames
 
 
 
 
 
 
$
90,288


Aggregate intangible asset amortization expense is comprised of the following for fiscal years 2017, 2016 and 2015 (in thousands):
 
2017
 
2016
 
2015
Cost of sales
$
16,586

 
$
16,769

 
$
7,403

SG&A
27,043

 
20,581

 
9,681

RD&E
545

 
512

 
412

Other Operating Expenses
2,538

 
—

 
—

Total intangible asset amortization expense
$
46,712

 
$
37,862

 
$
17,496


Estimated future intangible asset amortization expense based upon the carrying value as of December 29, 2017 is as follows (in thousands):
 
2018
 
2019
 
2020
 
2021
 
2022
 
After 2022
Amortization Expense
$
45,316

 
$
45,433

 
$
46,051

 
$
45,176

 
$
43,142

 
$
604,987

Accrued Expenses
ACCRUED EXPENSES
(7.)    ACCRUED EXPENSES
Accrued expenses are comprised of the following (in thousands):
 
December 29, 2017
 
December 30,
2016
Salaries and benefits
$
32,529

 
$
30,199

Profit sharing and bonuses
19,244

 
3,054

Accrued interest
8,523

 
6,838

Other
21,244

 
32,190

Total
$
81,540

 
$
72,281

Debt
DEBT
(8.)     DEBT
Long-term debt is comprised of the following (in thousands):
 
December 29, 2017
 
December 30,
2016
Senior secured term loan A
$
335,157

 
$
356,250

Senior secured term loan B
873,286

 
1,014,750

9.125% senior notes due 2023
360,000

 
360,000

Revolving line of credit
74,000

 
40,000

Unamortized discount on term loan B and debt issuance costs
(33,278
)
 
(40,837
)
Total debt
1,609,165

 
1,730,163

Current portion of long-term debt
(30,469
)
 
(31,344
)
Total long-term debt
$
1,578,696

 
$
1,698,819


Senior Secured Credit Facilities
The Company has senior secured credit facilities (the “Senior Secured Credit Facilities”) consisting of (i) a $200 million revolving credit facility (the “Revolving Credit Facility”), (ii) a $375 million term loan A facility (the “TLA Facility”), and (iii) a $1,025 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.
In March 2017 and again in November of 2017, the Company amended the Senior Secured Credit Facilities to lower the interest rate on the TLB Facility. The amendments reduced the applicable interest rate margins of its TLB Facility for both base rate and adjusted LIBOR borrowings by a cumulative 100 basis points. The amendments include a prepayment fee of 1.00% in the event of another repricing event (as defined in the Senior Secured Credit Facilities) on or before the six-month anniversary of the amendment. There was no change to maturities or covenants under the Senior Secured Credit Facilities as a result of these repricing amendments.
Revolving Credit Facility
The Revolving Credit Facility matures on October 27, 2020 and 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 TLA Facility, as well as the Revolving Credit 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, as defined in the Senior Secured Credit Facilities agreement 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 December 29, 2017, the Company had $74 million of outstanding borrowings on the Revolving Credit Facility and an available borrowing capacity of $116.7 million after giving effect to $9.3 million of outstanding standby letters of credit. As of December 29, 2017, the weighted average interest rate on outstanding borrowings under the Revolving Credit Facility was 4.73%.
(8.)     DEBT (Continued)
Subject to certain conditions, commitments under the Revolving Credit Facility may be increased through an incremental revolving facility so long as, on a pro forma basis, the Company’s first lien net leverage ratio does not exceed 4.25:1.00. The outstanding amount of the Revolving Credit Facility approximated its fair value as of December 29, 2017 based upon the debt being variable rate and short-term in nature.
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 2.25% or (ii) the applicable LIBOR rate plus 3.25%, with LIBOR subject to a 1.00% floor. As of December 29, 2017, the interest rate on the TLA Facility and TLB Facility were 4.82% and 4.66%, respectively. Additionally, if the Company receives both (a) a public corporate family credit rating from Moody’s Investors Services, Inc. of “B2” (stable outlook) or higher and (b) a public corporate credit rating from Standard & Poor’s Financial Services LLC of “B” (stable outlook) or higher, the interest rate margins for the TLB Facility will step down by an additional 25 basis points. Subject to certain conditions, one or more incremental term loan facilities may be added to the Term Loan Facilities so long as, on a pro forma basis, the Company’s first lien net leverage ratio does not exceed 4.25:1.00.
As of December 29, 2017, the estimated fair value of the TLB Facility was approximately $883 million, based on quoted market prices for the debt, recent sales prices for the debt and consideration of comparable debt instruments with similar interest rates and trading frequency, among other factors, and is classified as Level 2 measurements within the fair value hierarchy. The par amount of the TLA Facility approximated its fair value as of December 29, 2017 based upon the debt being variable rate in nature.
Covenants
The Revolving Credit Facility and the TLA Facility contain covenants requiring (A) a maximum total net leverage ratio of 6.25:1.0, subject to step downs beginning in the first quarter of 2018 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 2.50:1.0, subject to step ups beginning in the first quarter of 2018. As of December 29, 2017, the Company was in compliance with these financial covenants. The TLB Facility does not contain any financial maintenance covenants.
The Senior Secured Credit Facilities also contain negative covenants that restrict the Company’s ability to (i) incur additional indebtedness; (ii) create certain liens; (iii) consolidate or merge; (iv) sell assets, including capital stock of the Company’s subsidiaries; (v) engage in transactions with the Company’s affiliates; (vi) create restrictions on the payment of dividends or other amounts from the Company’s restricted subsidiaries; (vii) pay dividends on capital stock or redeem, repurchase or retire capital stock; (viii) pay, prepay, repurchase or retire certain subordinated indebtedness; (ix) make investments, loans, advances and acquisitions; (x) make certain amendments or modifications to the organizational documents of the Company or its subsidiaries or the documentation governing other senior indebtedness of the Company; and (xi) change the Company’s type of business. These negative covenants are subject to a number of limitations and exceptions that are described in the Senior Secured Credit Facilities agreement. As of December 29, 2017, the Company was in compliance with all negative covenants under the Senior Secured Credit Facilities.
The Senior Secured Credit Facilities provide for customary events of default. Upon the occurrence and during the continuance of an event of default, the outstanding advances and all other obligations under the Senior Secured Credit Facilities become immediately due and payable.
9.125% Senior Notes due 2023
On October 27, 2015, the Company completed a private offering of $360 million aggregate principal amount of 9.125% senior notes due on November 1, 2023 (the “Senior Notes”). All the Senior Notes are outstanding as of December 29, 2017.
Interest on the Senior Notes is payable on May 1 and November 1 of each year.  The Company may redeem the Senior Notes, in whole or in part, prior to November 1, 2018 at a price equal to 100% of the principal amount thereof plus a “make-whole” premium.  Prior to November 1, 2018, the Company may also redeem up to 40% of the aggregate principal amount of the Senior Notes using the proceeds from certain equity offerings at a redemption price equal to 109.125% of the aggregate principal amount of the Senior Notes. On or after November 1, 2018, the Company may redeem the Senior Notes, in whole or in part, pursuant to a customary schedule of declining redemption prices. As of December 29, 2017, the estimated fair value of the Senior Notes was approximately $392 million, based on quoted market prices of these notes, recent sales prices for the notes and consideration of comparable debt instruments with similar interest rates and trading frequency, among other factors, and is classified as Level 2 measurements within the fair value hierarchy.
(8.)     DEBT (Continued)
The Senior Notes are senior unsecured obligations and contain normal incurrence-based covenants and limitations such as the ability to incur or guarantee additional indebtedness, pay dividends, make other restricted payments and investments, create liens and effect certain corporate acts such as mergers and consolidations. These covenants are subject to a number of limitations and exceptions that are described in the indenture for the Senior Notes. The Senior Notes provide for customary events of default, subject in certain cases to customary cure periods, in which the Senior Notes and any unpaid interest would become due and payable. As of December 29, 2017, the Company was in compliance with all restrictive covenants under the indenture governing the Senior Notes.
As of December 29, 2017, the weighted average interest rate on all outstanding borrowings is 5.67%.
Contractual maturities of the Company’s debt facilities for the next five years and thereafter, excluding any discounts or premiums, as of December 29, 2017 are as follows (in thousands):
 
2018
 
2019
 
2020
 
2021
 
2022
 
After 2022
Future minimum principal payments
$
30,469

 
37,500

 
111,500

 
229,688

 
873,286

 
360,000


Debt Issuance Costs and Discounts
The Company incurred debt issuance costs in conjunction with the issuance of the Senior Secured Credit Facilities and the Senior Notes. The change in deferred debt issuance costs related to the Company’s Revolving Credit Facility is as follows (in thousands):
January 1, 2016
$
4,791

Amortization during the period
(991
)
December 30, 2016
3,800

Amortization during the period
(992
)
December 29, 2017
$
2,808

The change in unamortized discount and debt issuance costs related to the Term Loan Facilities and Senior Notes is as follows (in thousands):
 
Debt Issuance Costs
 
Unamortized Discount on TLB Facility
 
Total
January 1, 2016
$
35,908

 
$
10,039

 
$
45,947

Financing costs incurred
1,177

 
—

 
1,177

Amortization during the period
(4,989
)
 
(1,298
)
 
(6,287
)
December 30, 2016
32,096

 
8,741

 
40,837

Financing costs incurred
2,360

 
—

 
2,360

Write-off of debt issuance costs and unamortized discount
(2,421
)
 
(1,104
)
 
(3,525
)
Amortization during the period
(5,146
)
 
(1,248
)
 
(6,394
)
December 29, 2017
$
26,889

 
$
6,389

 
$
33,278


The Company prepaid portions of its TLB Facility and recognized losses from extinguishment of debt during fiscal year 2017 of $3.5 million, which is included in Interest Expense, Net in the Consolidated Statements of Operations and Comprehensive Income (Loss). 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. During fiscal year 2015, the Company wrote off $1.6 million of debt issuance costs in connection with the extinguishment and modification of its term loan and revolving line of credit, respectively, which is included in Interest Expense in the Consolidated Statements of Operations and Comprehensive Income (Loss).
(8.)     DEBT (Continued)
Interest Rate Swaps
From time to time, the Company enters into interest rate swap agreements in order to hedge against potential changes in cash flows on its outstanding variable rate debt. During 2016, the Company entered into a one year $250 million interest rate swap, which expired during 2017, and a three year $200 million interest rate swap to hedge against potential changes in cash flows on its outstanding variable rate debt, which is indexed to the one-month LIBOR rate. The variable rate received on the interest rate swap and the variable rate paid on the variable rate debt will have the same rate of interest, excluding the credit spread, and will reset and pay interest on the same day.
Information regarding the Company’s outstanding interest rate swap designated as a cash flow hedge as of December 29, 2017 is as follows (dollars in thousands):
Notional Amount
 
Start Date
 
End Date
 
Pay Fixed Rate
 
Receive Current Floating Rate
 
Fair Value
 
Balance Sheet Location
$
200,000

 
Jun-17
 
Jun-20
 
1.1325
%
 
1.5521%
 
$
4,279

 
Other Assets

The estimated fair value of the interest rate swap agreements represents the amount the Company expects to receive (pay) to terminate the contract. No portion of the change in fair value of the Company’s interest rate swaps during 2017, 2016, or 2015 were considered ineffective. The amount recorded to Interest Expense related to the Company’s interest rate swaps was a reduction of $0.5 million during 2017 and an increase of $0.1 million and $3.5 million during 2016 and 2015, respectively. The 2015 amount includes a $2.8 million charge related to the termination of interest rate swap agreements in connection with the LRM acquisition. The estimated Accumulated Other Comprehensive Income related to the Company’s interest rate swaps that is expected to be reclassified into earnings within the next twelve months is a $1.3 million gain.
Benefit Plans
BENEFIT PLANS
(9.)     BENEFIT PLANS
Savings Plan
The Company sponsors a defined contribution 401(k) plan (the “Plan”), for its U.S. based employees. The Plan provides for the deferral of employee compensation under Internal Revenue Code §401(k) and a Company match.
Beginning in 2017, the Company matches $0.50 per dollar of participant deferral, up to 6% of the compensation of each participant. Contributions from employees, as well at those matched by the Company, vest immediately. In 2016, and 2015, the Company match was 35% of an employee’s contributions (50% of an employee’s contributions for legacy LRM associates) up to the first 6% of the total compensation. Net costs related to defined contribution plans were $8.1 million in 2017, $6.4 million in 2016 and $3.1 million in 2015.
Defined Benefit Plans
The Company is required to provide its employees located in Switzerland, Mexico, France, and Germany certain statutorily mandated defined benefits. Under these plans, benefits accrue to employees based upon years of service, position, age and compensation. The defined benefit pension plan provided to the Company’s employees located in Switzerland is a funded contributory plan, while the plans that provide benefits to the Company’s employees located in Mexico, France, and Germany are unfunded and noncontributory. The assets of the Switzerland plan are held at an AA- rated insurance carrier who bears the pension risk and longevity risk, and will be used to cover the pension liability for the remaining retirees of the Swiss plan, as well as the remaining employees at that location. The liability and corresponding expense related to these benefit plans is based on actuarial computations of current and future benefits for employees.
(9.)     BENEFIT PLANS (Continued)
The Company’s fiscal year end dates are the measurement dates for its defined benefit plans. Information relating to the funding position of the Company’s defined benefit plans for fiscal years 2017 and 2016 were as follows (in thousands):
 
2017
 
2016
Change in projected benefit obligation:
 
 
 
Projected benefit obligation at beginning of year
$
8,728

 
$
7,992

Service cost
464

 
431

Interest cost
162

 
174

Plan participants’ contribution
75

 
75

Actuarial (gain) loss
(143
)
 
341

Benefits (paid) transferred in, net
(160
)
 
84

Foreign currency translation
1,027

 
(369
)
Projected benefit obligation at end of year
10,153

 
8,728

Change in fair value of plan assets:
 
 
 
Fair value of plan assets at beginning of year
1,172

 
871

Employer contributions
56

 
36

Plan participants’ contributions
75

 
75

Actual loss on plan assets
—

 
(9
)
Benefits transferred in, net
—

 
224

Foreign currency translation
55

 
(25
)
Fair value of plan assets at end of year
1,358

 
1,172

Projected benefit obligation in excess of plan assets at end of year
$
8,795

 
$
7,556

Defined benefit liability classified as other current liabilities
$
120

 
$
109

Defined benefit liability classified as long-term liabilities
$
8,675

 
$
7,447

Accumulated benefit obligation at end of year
$
8,322

 
$
7,115


Amounts recognized in Accumulated Other Comprehensive Income (Loss) for fiscal years 2017 and 2016 are as follows (in thousands):
 
2017
 
2016
Net loss occurring during the year
$
20

 
$
368

Amortization of losses
(63
)
 
(62
)
Prior service cost
1

 
1

Amortization of prior service cost
(11
)
 
(11
)
Pre-tax adjustment (gain) loss
(53
)
 
296

Taxes
(23
)
 
283

Net (gain) loss
$
(76
)
 
$
579


The amortization of amounts in Accumulated Other Comprehensive Income (Loss) expected to be recognized as components of net periodic benefit expense during fiscal year 2018 are as follows (in thousands):
Amortization of net prior service cost
$
11

Amortization of net loss
43




(9.)     BENEFIT PLANS (Continued)
Net pension cost for fiscal years 2017 and 2016 is comprised of the following (in thousands):
 
2017
 
2016
Service cost
$
464

 
$
431

Interest cost
162

 
174

Expected return on assets
(19
)
 
(18
)
Recognized net actuarial loss
72

 
72

Net pension cost
$
679

 
$
659


The weighted-average rates used in the actuarial valuations to determine the net pension cost for fiscal years 2017, 2016 and 2015 were as follows:
 
2017
 
2016
 
2015
Discount rate
1.9%
 
2.2%
 
2.3%
Salary growth
2.9%
 
2.9%
 
3.0%
Expected rate of return on assets
1.5%
 
2.0%
 
2.3%

The weighted-average rates used in the actuarial valuations to determine the projected benefit obligation for fiscal years 2017, 2016 and 2015 were as follows:
 
2017
 
2016
 
2015
Discount rate
2.0%
 
1.9%
 
2.2%
Salary growth
2.9%
 
2.9%
 
2.9%
Expected rate of return on assets
1.3%
 
1.5%
 
2.0%

The discount rate used is based on the yields of AA bonds with a duration matching the duration of the liabilities plus approximately 50 basis points to reflect the risk of investing in corporate bonds. The expected rate of return on plan assets reflects earnings expectations on existing plan assets.
The following table provides information by level for the defined benefit plan assets that are measured at fair value as of December 29, 2017 and December 30, 2016 (in thousands).
 
Fair Value
 
Quoted
Prices in
Active
Markets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
December 29, 2017
 
 
 
 
 
 
 
Insurance contract
$
1,358

 
$
—

 
$
1,358

 
$
—

December 30, 2016
 
 
 
 
 
 
 
Insurance contract
$
1,172

 
$
—

 
$
1,172

 
$
—


The fair value of Level 2 plan assets are obtained from quoted market prices in inactive markets or valuation models with observable market data inputs to estimate fair value. These observable market data inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data.  Refer to Note 1 “Summary of Significant Accounting Policies” for discussion of the fair value measurement terms of Levels 1, 2, and 3.
Estimated benefit payments over for the next ten years as of December 29, 2017 are as follows (in thousands):
 
2018
 
2019
 
2020
 
2021
 
2022
 
2023-2027
Estimated benefit payments
$
289

 
290

 
244

 
279

 
389

 
2,313

Stock-Based Compensation
STOCK-BASED COMPENSATION
(10.)     STOCK-BASED COMPENSATION
Stock-based Compensation Plans
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, shares of restricted stock awards, restricted stock units, stock appreciation rights and stock bonuses to employees, non-employee directors, consultants, and service providers.
The 2009 Stock Incentive Plan (“2009 Plan”), as amended, and 2011 Stock Incentive Plan (“2011 Plan”), as amended, each authorize the issuance of up to 1,350,000 shares of equity incentive awards and the 2016 Stock Incentive Plan (the “2016 Plan”) authorizes the issuance of up to 1,450,000 shares of equity incentive awards. The 2009 Plan limits the amount of restricted stock, restricted stock units and stock bonuses that may be awarded in the aggregate to 200,000 shares of the 1,350,000 shares authorized. Stock options remain outstanding under the 2005 Stock Incentive Plan, but the plan has been frozen to any new award issuances.
As of December 29, 2017, there were 917,567, 9,142 and 78,747 shares available for future grants under the 2016 Plan, 2011 Plan and 2009 Plan, respectively. Due to plan sub-limits, of the shares available for grant, less than 500 shares may be awarded under the 2009 Plan in the form of restricted stock, restricted stock units or stock bonuses.
In connection with the Spin-off, under the provisions of the 2009 Plan and 2011 Plan, employee stock options, restricted stock awards, and restricted stock unit awards were adjusted to preserve the fair value of the awards immediately before and after the Spin-off. As such, the Company did not record any modification expense related to the conversion of the awards. Certain awards granted to employees who transferred to Nuvectra in connection with the Spin-off were canceled. As required, the Company accelerated the remaining expense related to these canceled awards of $0.5 million during the first quarter of 2016, which was classified as Other Operating Expenses (“OOE”).
The Company recognized a net tax benefit from the exercise of stock options and vesting of restricted stock and restricted stock units of $1.9 million, $2.3 million and $5.6 million for 2017, 2016 and 2015, respectively. In 2017, this amount was recorded as a component of income tax expense. In 2016 and 2015, these amounts were recorded as increases in additional paid-in capital on the consolidated balance sheets and as cash from financing activities on the consolidated statements of cash flows.
Stock-based Compensation Expense
The components and classification of stock-based compensation expense for fiscal years 2017, 2016 and 2015 were as follows (in thousands):
 
2017
 
2016
 
2015
Stock options
$
1,716

 
$
2,499

 
$
2,708

RSAs and RSUs (time-based)
5,324

 
1,991

 
2,027

PRSUs
7,640

 
3,918

 
4,641

Total stock-based compensation expense
$
14,680

 
$
8,408

 
$
9,376

 
 
 
 
 
 
Cost of sales
$
1,062

 
$
332

 
$
795

SG&A
10,623

 
6,246

 
7,510

RD&E
739

 
355

 
982

OOE
2,256

 
1,475

 
89

Total stock-based compensation expense
$
14,680

 
$
8,408

 
$
9,376


During the first quarter of 2017, the Company recorded $2.2 million of accelerated stock-based compensation expense in connection with the transition of its former Chief Executive Officer per the terms of his contract, which was classified as OOE.
(10.)     STOCK-BASED COMPENSATION (Continued)
Stock Options
The following table includes the weighted average grant date fair value of stock options granted to employees during fiscal years 2017, 2016 and 2015 and the related weighted average assumptions used in the Black-Scholes model:
 
2017
 
2016
 
2015
Weighted average fair value of options granted
$
12.86

 
$
8.52

 
$
12.18

Assumptions:
 
 
 
 
 
Expected term (in years)
4.5

 
4.7

 
4.7

Risk-free interest rate
1.77
%
 
1.49
%
 
1.55
%
Expected volatility
37
%
 
27
%
 
26
%
Expected dividend yield
0
%
 
0
%
 
0
%

The following table summarizes stock option activity during the fiscal year ended December 29, 2017:
 
Number of
Stock
Options
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value
(in millions)
Outstanding at December 30, 2016
1,739,972

 
$
28.26

 
 
 
 
Granted
125,020

 
38.78

 
 
 
 
Exercised
(804,064
)
 
24.03

 
 
 
 
Forfeited or expired
(129,575
)
 
45.74

 
 
 
 
Outstanding at December 29, 2017
931,353

 
$
30.89

 
6.2
 
$
13.9

Vested and expected to vest at December 29, 2017
931,353

 
$
30.89

 
6.2
 
$
13.9

Exercisable at December 29, 2017
798,311

 
$
30.13

 
5.8
 
$
12.5

Intrinsic value is calculated for in-the-money options (exercise price less than market price) as the difference between the market price of the Company’s common shares as of December 29, 2017 ($45.30) and the weighted average exercise price of the underlying stock options, multiplied by the number of options outstanding and/or exercisable. As of December 29, 2017, $1.2 million of unrecognized compensation cost related to non-vested stock options is expected to be recognized over a weighted-average period of 1.8 years. Shares are distributed from the Company’s authorized but unissued reserve upon the exercise of stock options.
The following table provides certain information relating to the exercise of stock options during fiscal years 2017, 2016 and 2015 (in thousands):
 
2017
 
2016
 
2015
Intrinsic value
$
13,928

 
$
690

 
$
8,231

Cash received
19,324

 
2,821

 
6,583


(10.)     STOCK-BASED COMPENSATION (Continued)
Restricted Stock Awards and Restricted Stock Units
The following table summarizes time-vested RSA and RSU activity during the fiscal year ended December 29, 2017:
 
Time-Vested
Restricted Stock Units and Awards
 
Weighted
Average Grant Date
Fair Value
Nonvested at December 30, 2016
39,394

 
$
45.51

Granted
309,107

 
34.18

Vested
(148,299
)
 
34.28

Forfeited
(36,771
)
 
38.03

Nonvested at December 29, 2017
163,431

 
$
35.96


As of December 29, 2017, there was $5.1 million of total unrecognized compensation cost related to time-based RSAs and RSUs, which is expected to be recognized over a weighted-average period of approximately 2.0 years. The fair value of RSA and RSU shares vested in 2017, 2016 and 2015 was $6.4 million, $1.3 million and $3.0 million, respectively. The weighted average grant date fair value of RSAs and RSUs granted during fiscal years 2017, 2016 and 2015 was $34.18, $47.95 and $49.84, respectively.
Performance-Based Shares
The following table summarizes the maximum number of PRSUs which could be earned and related activity during the fiscal year ended December 29, 2017:
 
Performance-
Vested
Restricted Stock Units and Awards
 
Weighted
Average Grant Date
Fair Value
Nonvested at December 30, 2016
356,586

 
$
31.87

Granted
419,112

 
31.62

Forfeited
(305,809
)
 
30.77

Nonvested at December 29, 2017
469,889

 
$
32.37


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 conditions are based on the Company's AOI and adjusted EBITDA targets. The market condition is based on the Company’s achievement of a relative total shareholder return performance requirement, on a percentile basis, compared to a defined group of peer companies over two and three year performance periods.
Compensation expense for the PRSUs is initially estimated based on target performance and adjusted as appropriate throughout the performance period. At December 29, 2017, there was $2.6 million of total unrecognized compensation cost related to unvested PRSUs, which is expected to be recognized over a weighted-average period of approximately 1.4 years. The fair value of PRSU shares vested in 2016 and 2015 was $10.5 million and $13.1 million, respectively. The weighted average grant date fair value of PRSUs granted during fiscal years 2017, 2016 and 2015 was $31.62, $30.83 and $32.92, respectively.
The grant-date fair value of the market-based portion of the PRSUs granted during fiscal year 2017 was determined using the Monte Carlo simulation model on the date of grant, assuming the following (i) expected term of 1.84 years, (ii) risk free interest rate of 1.14%, (iii) expected dividend yield of 0.0% and (iv) expected stock price volatility over the expected term of the award of 48%.
Other Operating Expenses
OTHER OPERATING EXPENSES
11.)     OTHER OPERATING EXPENSES
OOE for fiscal years 2017, 2016 and 2015 is comprised of the following (in thousands):
 
2017
 
2016
 
2015
Consolidation and optimization initiatives

$
13,349

 
$
26,490

 
$
26,393

Acquisition and integration costs
10,870

 
28,316

 
33,449

Asset dispositions, severance and other
7,182

 
6,931

 
6,622

Strategic reorganization and alignment
5,891

 
—

 
—

Total other operating expenses
$
37,292

 
$
61,737

 
$
66,464


Consolidation and optimization initiatives
Manufacturing alignment to support growth - In 2017, the Company initiated several initiatives designed to reduce costs, improve operating efficiencies and increase manufacturing capacity to accommodate growth.  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 $9 million to $11 million, the majority of which are expected to be cash expenditures, and capital expenditures of between approximately $4 million to $6 million. Total expense of $0.3 million has been incurred for this initiative through December 29, 2017. These actions are expected to be substantially completed by the end of 2019.
LRM consolidations - In 2014, LRM initiated plans to close its Arvada, CO site, consolidate its two Galway, Ireland sites into one facility, and other restructuring actions that will result in a reduction in staff across manufacturing and administrative functions at certain locations. This initiative was substantially completed in 2016. During the third quarter of 2016, the Company announced the planned closure of its Clarence, NY facility. The machined component product lines manufactured in this facility are being transferred to other Integer locations in the U.S. Total expense expected to be incurred for these initiatives are between $18 million and $22 million, of which $16.3 million has been incurred through December 29, 2017. The total capital investment expected to be incurred for these initiatives is between $5 million and $6 million, of which $3.2 million has been expended through December 29, 2017. This project is expected to be completed by the end of the first quarter of 2018.
Investments in capacity and capabilities - In 2014, the Company initiated plans to transfer the manufacture of catheters and introducers performed at its facility in Plymouth, MN into the Company’s existing facility in Tijuana, Mexico. Additionally, functions performed at the Company’s facilities in Beaverton, OR and Raynham, MA to manufacture products for the portable medical market were transferred to a new facility in Tijuana, Mexico. Total restructuring expense and capital expenditures incurred through December 29, 2017 in connection with these initiatives were $55.8 million and $23.4 million, respectively. These initiatives were substantially completed in 2017 and the Company does not expect to incur any material additional costs associated with these initiatives.
Other consolidation and optimization initiatives - During 2013, the Company began a project to expand its Chaumont, France facility in order to enhance its capabilities and fulfill larger volume customer supply agreements. Total expense incurred during the 2017 fiscal year for this project was $0.6 million. This initiative was completed in 2017.
Costs related to the Company’s consolidation and optimization initiatives were primarily recorded within the Medical Segment. The change in accrued liabilities related to consolidation and optimization initiatives is as follows (in thousands):
 
Severance and Retention
 
Accelerated
Depreciation/
Asset Write-offs
 
Other
 
Total
December 30, 2016
$
795

 
$
—

 
$
402

 
$
1,197

Restructuring charges
1,781

 
—

 
11,568

 
13,349

Cash payments
(1,268
)
 
—

 
(11,970
)
 
(13,238
)
December 29, 2017
$
1,308

 
$
—

 
$
—

 
$
1,308


Other expenses include costs to relocate certain equipment and personnel, duplicate personnel costs, excess overhead, disposal, moving, revalidation, personnel, training, consulting, and travel costs associated with these consolidation projects.
(11.)     OTHER OPERATING EXPENSES (Continued)
Acquisition and integration costs
Acquisition and integration costs are predominantly related to the acquisition of LRM and primarily include professional, consulting, severance, retention, relocation, and travel costs. For fiscal years 2016 and 2015, expenses also consisted of transaction costs including change-in-control payments to former LRM executives. As of December 29, 2017 and December 30, 2016, $0.4 million and $4.5 million, respectively, of acquisition and integration costs related to the LRM acquisition were accrued. Total integration expense and capital expenditures incurred through December 29, 2017 in connection with the LRM acquisition were $43.5 million and $11.9 million, respectively. The Company does not expect to incur any material additional costs associated with these activities as they were substantially completed in 2017.
Asset dispositions, severance and other
During 2017, 2016 and 2015, the Company recorded losses in connection with various asset disposals and/or write-downs. The 2017 amount also includes approximately $5.3 million in expense related to the Company’s leadership transitions, which were recorded within the corporate unallocated segment. In addition, during 2016 and 2015, the Company incurred legal and professional costs in connection with the Spin-off of $4.4 million and $6.0 million, respectively. Total transaction related costs incurred for the Spin-off since inception were $10.4 million. Expenses related to the Spin-off were primarily recorded within the corporate unallocated and the Medical segment. These activities were substantially completed in 2017. Refer to Note 2 “Divestiture and Acquisition” for additional information on the Spin-off.
Strategic reorganization and alignment
As a result of the Company’s strategic review of its markets, customers and competitors during the fourth quarter of 2017, the Company began to take steps to better align its resources in order to enhance the profitability of its portfolio of products. This includes 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 of between approximately $10 million to $12 million, of which an estimated $8 million to $12 million are expected to result in cash outlays. In 2017, the Company incurred charges related to the initial steps of this initiative, which primarily included lease termination charges and accelerated amortization of intangible assets. These expenses were primarily recorded within corporate unallocated expenses. These actions are expected to be substantially completed by the end of the second quarter of 2018.
Income Taxes
INCOME TAXES
(12.)     INCOME TAXES
On December 22, 2017, the Tax Reform Act was signed into law. This legislation significantly changes U.S. tax law by, among other things, lowering corporate income tax rates, implementing a territorial tax system and imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries. The Tax Reform Act permanently reduces the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018.
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 reverse. As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the Tax Reform Act, the Company revalued its ending net deferred tax liabilities at December 29, 2017 and recognized a $56.5 million tax benefit in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) for the year ended December 29, 2017.
The Tax Reform Act provided for a one-time deemed mandatory repatriation of post-1986 undistributed foreign subsidiary earnings and profits (“E&P”) through the year ended December 29, 2017. The Company had an estimated $147.5 million of undistributed foreign E&P subject to the deemed mandatory repatriation and recognized a provisional $14.7 million of income tax expense in the Company’s Consolidated Statement of Operations and Comprehensive Income (Loss) for the year ended December 29, 2017. The Company has sufficient U.S. net operating losses to offset cash tax liabilities associated with this repatriation tax.
While the Tax Reform Act provides for a territorial tax system, beginning in 2018, it also includes two new U.S. tax base erosion provisions - the global intangible low-taxed income (“GILTI”) provisions and the base-erosion and anti-abuse tax (“BEAT”) provisions.
The GILTI provisions require the Company to include foreign subsidiary earnings in excess of a deemed return on the foreign subsidiary’s tangible assets in its U.S. income tax return. The Company expects that it will be subject to incremental U.S. tax on GILTI income beginning in 2018. Because of the complexity of the new GILTI tax rules, the Company continues to evaluate this provision of the Tax Reform Act and the application of ASC 740, Income Taxes. Under GAAP, the Company is allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company's measurement of its deferred taxes (the “deferred method”). The Company's selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on analyzing its global income to determine whether it expects to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. Whether the Company expects to have future U.S. inclusions in taxable income related to GILTI depends on not only the Company's current structure and estimated future results of global operations, but also its intent and ability to modify its structure. The Company is currently in the process of analyzing its structure and has not made any adjustments related to potential GILTI tax in its consolidated financial statements and has not made a policy decision regarding whether to record deferred tax on GILTI.
The BEAT provisions in the Tax Reform Act eliminate the deduction of certain base-erosion payments made to related foreign corporations, and impose a minimum tax if greater than regular tax. The Company does not expect to be materially impacted by the BEAT provisions, however, it is still in the process of analyzing the effect of this provision of the Tax Reform Act. The Company has not included any tax impact of BEAT in its consolidated financial statements for the year ended December 29, 2017.
On December 22, 2017, the Securities and Exchange Commission issued Staff Accounting Bulletin (“SAB”) No. 118 to address the application of 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 Tax Reform Act. The Company has recognized the tax impact of the revaluation of deferred tax assets and liabilities and the provisional tax impacts related to deemed repatriated earnings and included these amounts in its consolidated financial statements for the year ended December 29, 2017. The ultimate impact may differ from the provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the Tax Reform Act. The accounting is expected to be complete when the Company’s 2017 U.S. corporate income tax return is filed in 2018.



(12.)     INCOME TAXES (Continued)
The U.S. and international components of income (loss) before benefit for income taxes for fiscal years 2017, 2016 and 2015 were as follows (in thousands):
 
2017
 
2016
 
2015
U.S.
$
(46,459
)
 
$
(52,446
)
 
$
(42,166
)
International
68,286

 
53,631

 
26,466

Total income (loss) before benefit for income taxes
$
21,827

 
$
1,185

 
$
(15,700
)

The benefit for income taxes for fiscal years 2017, 2016 and 2015 was comprised of the following (in thousands):
 
2017
 
2016
 
2015
Current:
 
 
 
 
 
Federal
$
(1,558
)
 
$
(8,327
)
 
$
(3,753
)
State
(29
)
 
149

 
(367
)
International
15,947

 
10,752

 
6,312

 
14,360

 
2,574

 
2,192

Deferred:
 
 
 
 
 
Federal
(58,924
)
 
(4,952
)
 
(8,144
)
State
(788
)
 
(638
)
 
(880
)
International
500

 
(1,760
)
 
(1,274
)
 
(59,212
)
 
(7,350
)
 
(10,298
)
Total benefit for income taxes
$
(44,852
)
 
$
(4,776
)
 
$
(8,106
)

The benefit for income taxes differs from the U.S. statutory rate for fiscal years 2017, 2016 and 2015 due to the following:
 
2017
 
2016
 
2015
Statutory rate
$
7,639

35.0
 %
 
$
415

35.0
 %
 
$
(5,495
)
35.0
 %
Federal tax credits
(1,896
)
(8.7
)
 
(1,792
)
(151.2
)
 
(1,850
)
11.8

Foreign rate differential
(11,125
)
(50.9
)
 
(7,086
)
(598.0
)
 
(3,180
)
20.2

Uncertain tax positions
3,517

16.1

 
1,724

145.5

 
(531
)
3.4

State taxes, net of federal benefit
(864
)
(4.0
)
 
(1,068
)
(90.1
)
 
(1,490
)
9.5

Non-deductible transaction costs
—

—

 
1,012

85.4

 
4,867

(31.0
)
Valuation allowance
1,030

4.7

 
1,340

113.1

 
626

(4.0
)
Change in tax rates
(56,453
)
(258.6
)
 
(270
)
(22.8
)
 
(91
)
0.6

U.S. Tax Reform - Toll charge on unremitted earnings
14,719

67.4

 
—

—

 
—

—

Change in unremitted earnings assertion

2,340

10.7

 
—

—

 
—

—

Change in tax law (Internal Revenue Code §987)
—

—

 
2,630

221.9

 
—

—

Other
(3,759
)
(17.2
)
 
(1,681
)
(141.8
)
 
(962
)
6.1

Effective tax rate
$
(44,852
)
(205.5
)%
 
$
(4,776
)
(403.0
)%
 
$
(8,106
)
51.6
 %

The difference between the Company’s effective tax rate and the U.S. federal statutory income tax rate in the current year is primarily attributable to the components of Tax Reform Act as well as the Company’s overall lower effective tax rate in the foreign jurisdictions in which it operates and where its foreign earnings are derived, including Switzerland, Mexico, Germany, Uruguay, and Ireland. In addition, the Company currently has a tax holiday in Malaysia through April 2018, with a potential extension through April 2023 if certain conditions are met.
(12.)     INCOME TAXES (Continued)
Difference Attributable to Foreign Investments. As a result of the deemed mandatory repatriation of earnings of foreign subsidiaries provisions in the Tax Reform Act, the Company included an estimated $147.5 million of undistributed earnings of foreign subsidiaries in income subject to U.S. tax at reduced tax rates. In addition to the provisional $14.7 million of income tax expense recorded on the deemed mandatory repatriation, the Company recorded an additional $2.3 million in deferred taxes associated with foreign withholding taxes in accordance with the change in its permanent reinvestment assertion related to the undistributed earnings subject to the deemed mandatory repatriation provisions.
Prospectively, the Company intends to limit its distributions to previously taxed income. If distributions are made utilizing current period earnings, the Company will record foreign withholding taxes in the period of the distribution.
Deferred tax assets (liabilities) consist of the following (in thousands):
 
December 29,
2017
 
December 30,
2016
Net operating loss carryforwards
$
107,005

 
$
154,706

Tax credit carryforwards
28,215

 
24,646

Inventories
4,956

 
7,524

Accrued expenses
3,815

 
5,724

Stock-based compensation
5,531

 
10,614

Other
—

 
936

Gross deferred tax assets
149,522

 
204,150

Less valuation allowance
(36,480
)
 
(35,391
)
Net deferred tax assets
113,042

 
168,759

Property, plant and equipment
(27,547
)
 
(33,069
)
Intangible assets
(219,576
)
 
(337,722
)
Convertible subordinated notes
(806
)
 
(2,577
)
Other
(6,325
)
 
—

Gross deferred tax liabilities
(254,254
)
 
(373,368
)
Net deferred tax liability
$
(141,212
)
 
$
(204,609
)
Presented as follows:
 
 
 
Noncurrent deferred tax asset
$
4,152

 
$
3,970

Noncurrent deferred tax liability
(145,364
)
 
(208,579
)
Net deferred tax liability
$
(141,212
)
 
$
(204,609
)

As of December 29, 2017, the Company has the following carryforwards available:
Jurisdiction
 
Tax
Attribute
 
Amount
(in millions)
 
Begin to
Expire
U.S. Federal
 
Net operating loss
 
$
415.9

 
2019
U.S. State
 
Net operating loss
 
227.3

 
2018
International
 
Net operating loss
 
37.4

 
2018
U.S. Federal
 
Foreign tax credit
 
17.0

 
2019
U.S. Federal and State
 
R&D tax credit
 
7.2

 
2018
U.S. State
 
Investment tax credit
 
6.3

 
2018

Net operating losses are presented as pre-tax amounts.



(12.)     INCOME TAXES (Continued)
Certain U.S. tax attributes are subject to limitations of Internal Revenue Code §382, which in general provides that utilization is subject to an annual limitation if an ownership change results from transactions increasing the ownership of certain shareholders or public groups in stock of a corporation by more than 50 percentage points over a three-year period. Such an ownership change occurred upon the consummation of the acquisition of LRM. The Company does not anticipate that these limitations will affect utilization of these carryforwards prior to their expiration.
The Company’s federal net operating loss carryforward and certain other federal tax credits reported on its income tax returns included uncertain tax positions taken in prior years. Due to the application of the accounting for uncertain tax positions, the actual tax attributes are larger than the tax amounts for which a deferred tax asset is recognized for financial statement purposes.
In assessing the realizability of deferred tax assets, management considers, within each taxing jurisdiction, whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the consideration of the weight of both positive and negative evidence, management has determined that a portion of the deferred tax assets as of December 29, 2017 and December 30, 2016 related to certain foreign tax credits, state investment tax credits, and foreign and state net operating losses will not be realized.
The Company files annual income tax returns in the U.S., various state and local jurisdictions, and in various foreign jurisdictions. A number of years may elapse before an uncertain tax position, for which the Company has unrecognized tax benefits, is examined and finally settled. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, the Company believes that its unrecognized tax benefits reflect the most probable outcome. The Company adjusts these unrecognized tax benefits, as well as the related interest, in light of changing facts and circumstances. The resolution of an uncertain tax position, if recognized, would be recorded as an adjustment to the Provision (Benefit) for Income Taxes and the effective tax rate in the period of resolution.
Below is a summary of changes to the unrecognized tax benefit for fiscal years 2017, 2016 and 2015 (in thousands):
 
2017
 
2016
 
2015
Balance, beginning of year
$
10,561

 
$
9,271

 
$
2,411

Additions based upon tax positions related to the current year
3,833

 
1,450

 
274

Reductions as a result of a lapse of applicable statute of limitations
(510
)
 
—

 
(470
)
Revaluation due to change in tax rate (Tax Reform Act)
(1,782
)
 
—

 
—

Additions (reductions) related to prior period tax returns
(14
)
 
240

 
163

Reductions (additions) relating to business combinations
—

 
(400
)
 
7,443

Reductions relating to settlements with tax authorities
—

 
—

 
(550
)
Balance, end of year
$
12,088

 
$
10,561

 
$
9,271


Integer and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The tax years that remain open and subject to tax audits varies depending on the tax jurisdiction. The Internal Revenue Service finalized an audit of the 2012 and 2013 U.S. Federal income tax returns of the Company in the first quarter of 2015. The impact to the income tax expense was not material. The U.S. subsidiaries of the Company are still subject to a U.S. federal examination for the taxable years 2014 - 2017. The U.S. subsidiaries of the former LRM are still subject to U.S. federal, state, and local examinations for the taxable years 2006 to 2014.
It is reasonably possible that a reduction of approximately $1.1 million of the balance of unrecognized tax benefits may occur within the next twelve months as a result of the lapse of the statute of limitations and/or audit settlements. As of December 29, 2017, approximately $11.8 million of unrecognized tax benefits would favorably impact the effective tax rate (net of federal impact on state issues), if recognized.
The Company recognizes interest related to unrecognized tax benefits as a component of Provision (Benefit) for Income Taxes on the Consolidated Statements of Operations and Comprehensive Income (Loss). During 2017, 2016 and 2015, the recorded amounts for interest and penalties, respectively, were not significant.
Commitments And Contingencies
COMMITMENTS AND CONTINGENCIES
(13.)     COMMITMENTS AND CONTINGENCIES
Litigation
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. On January 26, 2016, a jury in the U.S. District Court for the District of Delaware returned a verdict finding that AVX infringed on two of the Company’s patents and awarded the Company $37.5 million in damages. On August 10, 2017, a second jury found that AVX infringed an additional Integer patent. That matter is subject to post-trial proceedings. The Company has recorded no gains in connection with this litigation as no cash has been received.
The Company is a party to various other legal actions arising in the normal course of business. The Company does not expect that the ultimate resolution of any other 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.
Environmental Matters
The Company’s Collegeville, PA facility, which was acquired as part of the LRM acquisition, is subject to an administrative consent order entered into with the U.S. Environmental Protection Agency (the “EPA”), that requires ongoing groundwater treatment and monitoring at the site as a result of leaks from underground storage tanks. Upon approval by the EPA of the Company’s proposed post remediation care plan, which requires a continuation of the groundwater treatment and monitoring process at the site, the Company expects that the consent order will be terminated. The Company believes a decision from the EPA on whether the Company’s post remediation care plan has been approved and the consent order removed will be made by the end of 2018. The Company does not expect this environmental matter will have a material effect on its consolidated results of operations, financial position or cash flows.
In January 2015, LRM was notified by the New Jersey Department of Environmental Protection (“NJDEP”) of NJDEP’s intent to revoke a no further action determination made by NJDEP in favor of LRM in 2002 pertaining to a property on which a subsidiary of LRM operated a manufacturing facility in South Plainfield, New Jersey beginning in 1971. LRM sold the property in 2004 and vacated the facility in 2007. In response to NJDEP’s notice, the Company further investigated the matter and submitted a technical report to NJDEP in August of 2015 that concluded that NJDEP’s notice of intent to revoke was unwarranted.  After reviewing the Company’s technical report, NJDEP issued a draft response in May 2016, stating that NJDEP would not revoke the no further action determination at that time, but would require some additional site investigation to support the Company’s conclusion. The Company met with NJDEP representatives to discuss the appropriate scope of the requested additional investigation, and it has begun that work. The Company does not expect this environmental matter will have a material effect on its consolidated results of operations, financial position or cash flows.
As of December 29, 2017 and December 30, 2016, there was $1.0 million recorded in Other Long-Term Liabilities in the Consolidated Balance Sheets in connection with these environmental matters.
License Agreements
The Company is a party to various license agreements for technology that is utilized in certain of its products. The most significant of these agreements are the licenses for basic technology used in the production of wet tantalum capacitors, filtered feedthroughs and MRI compatible lead systems. Expenses related to license agreements were $2.0 million, $2.0 million, and $2.4 million, for 2017, 2016 and 2015, respectively, and are primarily included in Cost of Sales.
Product Warranties
The Company generally warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. The change in product warranty liability for fiscal years 2017 and 2016 was comprised of the following (in thousands):
 
2017
 
2016
Beginning balance
$
3,911

 
$
3,316

Additions to warranty reserve, net of reversals
3,449

 
3,238

Warranty claims settled
(2,615
)
 
(2,643
)
Ending balance
$
4,745

 
$
3,911


(13.)     COMMITMENTS AND CONTINGENCIES (Continued)
Operating Leases
The Company is a party to various operating lease agreements for buildings, machinery, equipment and software. The Company primarily leases buildings, which accounts for the majority of the future lease payments. Lease expense includes the effect of escalation clauses and leasehold improvement incentives which are accounted for ratably over the lease term. Operating lease expense for fiscal years 2017, 2016 and 2015 was as follows (in thousands):
 
2017
 
2016
 
2015
Operating lease expense
$
17,513

 
$
15,357

 
$
6,516


At December 29, 2017, the Company had the following future minimum lease payments under non-cancelable operating leases (in thousands):
 
2018
 
2019
 
2020
 
2021
 
2022
 
After 2022
Future minimum lease payments
$
12,815

 
11,468

 
8,912

 
7,798

 
5,512

 
18,043


Self-Insurance Liabilities
As of December 29, 2017, and at various times in the past, the Company self-funded its workers' compensation and employee medical and dental expenses. The Company has established reserves to cover these self-insured liabilities and also maintains stop-loss insurance to limit its exposures under these programs. Claims reserves represent accruals for the estimated uninsured portion of reported claims, including adverse development of reported claims, as well as estimates of incurred but not reported claims. Claims incurred but not reported are estimated based on the Company’s historical experience, which is continually monitored, and accruals are adjusted when warranted by changes in facts and circumstances. The Company’s actual experience may be different than its estimates, sometimes significantly. Changes in assumptions, as well as changes in actual experience could cause these estimates to change. Insurance and claims expense will vary from period to period based on the severity and frequency of claims incurred in a given period. The Company’s self-insurance reserves totaled $7.6 million and $7.7 million as of December 29, 2017 and December 30, 2016, respectively. These accruals are recorded in Accrued Expenses and Other Long-Term Liabilities in the Consolidated Balance Sheets.
Foreign Currency Contracts
The Company enters into foreign currency forward contracts to hedge exposure to foreign currency exchange rate fluctuations in its international operations. In connection with the LRM acquisition, the Company terminated its outstanding forward contracts resulting in a $2.4 million payment to the foreign currency contract counterparty during 2015. As of the date the contracts were terminated, the Company had $1.6 million recorded in Accumulated Other Comprehensive Income (Loss) related to these contracts. This amount was fully amortized to Cost of Sales during 2016 as the inventory, which the contracts were hedging the cash flows to produce, was sold.
The impact to the Company’s results of operations from its forward contracts for fiscal years 2017, 2016 and 2015 was as follows (in thousands):
 
2017
 
2016
 
2015
Increase in sales
$
1,327

 
$
—

 
$
—

Increase in cost of sales
84

 
3,516

 
1,948

Ineffective portion of change in fair value
—

 
—

 
—


Information regarding outstanding foreign currency contracts designated as cash flow hedges as of December 29, 2017 is as follows (dollars in thousands):
Aggregate
Notional
Amount
 
Start
Date
 
End
Date
 
$/Foreign Currency
 
Fair
Value
 
Balance Sheet Location
$
4,625

 
Jan 2018
 
Jun 2018
 
0.0514

Peso
 
$
(127
)
 
Accrued Expenses
30,398

 
Jan 2018
 
Dec 2018
 
0.0507

Peso
 
(879
)
 
Accrued Expenses
30,344

 
Jan 2018
 
Dec 2018
 
1.2089

Euro
 
145

 
Accrued Expenses
Earnings (Loss) Per Share
EARNINGS (LOSS) PER SHARE
(14.)     EARNINGS (LOSS) PER SHARE
The following table illustrates the calculation of Basic and Diluted EPS for fiscal years 2017, 2016 and 2015 (in thousands, except per share amounts):
 
2017
 
2016
 
2015
Numerator:
 
 
 
 
 
Net income (loss)
$
66,679

 
$
5,961

 
$
(7,594
)
Denominator for basic EPS:
 
 
 
 
 
Weighted average shares outstanding
31,402

 
30,778

 
26,363

Effect of dilutive securities:
 
 
 
 
 
Stock options, restricted stock and restricted stock units
486

 
195

 
—

Denominator for diluted EPS
31,888

 
30,973

 
26,363

Basic EPS
$
2.12

 
$
0.19

 
$
(0.29
)
Diluted EPS
$
2.09

 
$
0.19

 
$
(0.29
)

The diluted weighted average share calculations do not include the following securities for fiscal years 2017, 2016 and 2015, which are not dilutive to the EPS calculations or the performance criteria have not been met (in thousands):
 
2017
 
2016
 
2015
Time-vested stock options, restricted stock and restricted stock units
676

 
657

 
1,718

Performance-vested stock options and restricted stock units
285

 
357

 
578

Accumulated Other Comprehensive Income (Loss)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
(15.)     ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Accumulated Other Comprehensive Income (Loss) 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
December 30, 2016
$
(1,475
)
 
$
1,420

 
$
(15,660
)
 
$
(15,715
)
 
$
(285
)
 
$
(16,000
)
Unrealized gain on cash flow hedges
—

 
3,707

 
—

 
3,707

 
(353
)
 
3,354

Realized gain on foreign currency hedges
—

 
(1,243
)
 
—

 
(1,243
)
 
435

 
(808
)
Realized gain on interest rate swap hedges
—

 
(466
)
 
—

 
(466
)
 
163

 
(303
)
Net defined benefit plan adjustments
53

 
—

 
—

 
53

 
23

 
76

Foreign currency translation gain
—

 
—

 
65,860

 
65,860

 
—

 
65,860

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

 
$
50,200

 
$
52,196

 
$
(17
)
 
$
52,179


 
Defined
Benefit
Plan
Liability
 
Cash
Flow
Hedges
 
Foreign
Currency
Translation
Adjustment
 
Total
Pre-Tax
Amount
 
Tax
 
Net-of-Tax
Amount
January 1, 2016
$
(1,179
)
 
$
(2,392
)
 
$
3,609

 
$
38

 
$
1,332

 
$
1,370

Unrealized gain on cash flow hedges
—

 
210

 
—

 
210

 
(73
)
 
137

Realized loss on foreign currency hedges
—

 
3,516

 
—

 
3,516

 
(1,231
)
 
2,285

Realized loss on interest rate swap hedges
—

 
86

 
—

 
86

 
(30
)
 
56

Net defined benefit plan adjustments
(296
)
 
—

 
—

 
(296
)
 
(283
)
 
(579
)
Foreign currency translation loss
—

 
—

 
(19,269
)
 
(19,269
)
 
—

 
(19,269
)
December 30, 2016
$
(1,475
)
 
$
1,420

 
$
(15,660
)
 
$
(15,715
)
 
$
(285
)
 
$
(16,000
)

The realized loss (gain) relating to the Company’s foreign currency hedges were reclassified from Accumulated Other Comprehensive Income (Loss) and included in Cost of Sales or Sales as the transactions they are hedging occur. The realized (gain) loss relating to the Company’s interest rate swap hedges were reclassified from Accumulated Other Comprehensive Income (Loss) and included in Interest Expense as interest on the corresponding debt being hedged is accrued. Refer to Note 9 “Benefit Plans” for details on the change in net defined benefit plan adjustments.
Fair Value Measurements
FAIR VALUE MEASUREMENTS
(16.)     FAIR VALUE MEASUREMENTS
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Fair value measurement standards apply to certain financial assets and liabilities that are measured at fair value on a recurring basis (each reporting period). For the Company, these financial assets and liabilities include its derivative instruments. The Company does not have any nonfinancial assets or liabilities that are measured at fair value on a recurring basis.
Foreign Currency Contracts
The fair value of foreign currency contracts are determined through the use of cash flow models that utilize observable market data inputs to estimate fair value. These observable market data inputs include foreign exchange rate and credit spread curves. In addition to the above, the Company received fair value estimates from the foreign currency contract counterparty to verify the reasonableness of the Company’s estimates. The Company’s foreign currency contracts are categorized in Level 2 of the fair value hierarchy. The fair value of the Company’s foreign currency contracts will be realized as Sales or Cost of Sales as the inventory, which the contracts are hedging, is sold. The estimated Accumulated Other Comprehensive Income related to the Company’s foreign currency contracts that is expected to be reclassified into earnings within the next twelve months is a net gain of $0.9 million.

(16.)     FAIR VALUE MEASUREMENTS (Continued)
Interest Rate Swap
The fair value of the Company’s interest rate swap outstanding at December 29, 2017 was determined through the use of a cash flow model that utilized observable market data inputs. These observable market data inputs included LIBOR, swap rates, and credit spread curves. In addition to the above, the Company received a fair value estimate from the interest rate swap counterparty to verify the reasonableness of the Company’s estimate. This fair value calculation was categorized in Level 2 of the fair value hierarchy.  The fair value of the Company’s interest rate swap will be realized as a component of Interest Expense as interest on the corresponding borrowings is accrued.
The following tables provide information regarding assets and liabilities recorded at fair value on a recurring basis (in thousands):

Fair Value
 
Quoted
Prices in
Active
Markets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
December 29, 2017
 
 
 
 
 
 
 
Assets: Interest rate swap (Note 8)
$
4,279

 
$
—

 
$
4,279

 
$
—

Liabilities: Foreign currency contracts (Note 13)
$
861

 
$
—

 
$
861

 
$
—

 
 
 
 
 
 
 
 
December 30, 2016
 
 
 
 
 
 
 
Assets: Interest rate swaps (Note 8)
$
3,482

 
$
—

 
$
3,482

 
$
—

Liabilities: Foreign currency contracts (Note 13)
$
2,063

 
$
—

 
$
2,063

 
$
—

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Fair value standards also apply to certain assets and liabilities that are measured at fair value on a nonrecurring basis. The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short-term nature of these items. Refer to Note 8 “Debt” for further discussion regarding the fair value of the Company’s Senior Secured Credit Facilities and Senior Notes.
The following table provides information regarding assets recorded at fair value on a nonrecurring basis (in thousands):
 
Fair Value
 
Quoted
Prices in
Active
Markets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
December 29, 2017
 
 
 
 
 
 
 
Assets: Cost method investment
$
180

 
$
—

 
$
180

 
$
—

Assets: Assets Held for Sale
490

 
—

 
490

 
—

 
 
 
 
 
 
 
 
December 30, 2016
 
 
 
 
 
 
 
Assets: Cost method investment
$
430

 
$
—

 
$
430

 
$
—

Assets: Assets Held for Sale
794

 
—

 
794

 
—


(16.)     FAIR VALUE MEASUREMENTS (Continued)
A summary of the valuation methodologies for assets and liabilities measured on a nonrecurring basis is as follows:
Cost and Equity Method Investments
The Company holds investments in equity and other securities that are accounted for as either cost or equity method investments. The aggregate recorded amount of cost and equity method investments at December 29, 2017 and December 30, 2016 was $20.8 million and $22.8 million, respectively. The Company’s equity method investment is in a Chinese venture capital fund focused on investing in life sciences companies. As of December 29, 2017 and December 30, 2016, the Company’s recorded amount of this equity method investment was $13.8 million and $10.7 million, respectively. This fund accounts for its investments at fair value with the unrealized change in fair value of these investments recorded as income or loss to the fund in the period of change. As of December 29, 2017, the Company owned 6.8% of this fund.
During 2017, 2016 and 2015, the Company recognized impairment charges related to its cost method investments of $5.3 million, $1.6 million and $1.4 million, respectively. The fair value of these investments were determined by reference to recent sales data of similar shares to independent parties in an inactive market. This fair value calculation is categorized in Level 2 of the fair value hierarchy. During 2017, 2016 and 2015, the Company recognized net gains on equity method investments of $3.7 million, $0.1 million, and $4.7 million, respectively. During 2017, 2016 and 2015, the Company received $1.7 million, $0 and $3.6 million cash distributions, respectively, from its equity method investment, which was classified as a cash flow from operating activities in the Consolidated Statements of Cash Flows as it represented a return on investment.
Long-Lived Assets Held for Sale
A long-lived asset, which includes PP&E, is considered held for sale when it meets certain criteria described in ASC Topic 360, Property, Plant, and Equipment. A long-lived asset classified as held for sale is initially measured at the lower of its carrying amount or fair value less cost to sell, and a loss is recognized for any initial adjustment of the asset's carrying amount to its fair value less cost to sell in the period the held for sale criteria are met. In the period that a long-lived asset is considered held for sale it is presented within Prepaid Expenses and Other Current Assets where it remains until it is either sold or no longer meets the held for sale criteria. The Company reviews the carrying amount of its long-lived assets to be held and used for potential impairment whenever certain indicators are present as described in Note 1 “Summary of Significant Accounting Policies.”
During 2017 and 2016, the Company recorded impairment charges of $0.3 million and $0.2 million, respectively, related to its Orvin, Switzerland property in OOE. The fair value of these assets were determined based upon recent sales data of similar assets and discussions with potential buyers, and was categorized in Level 2 of the fair value hierarchy. Long-lived assets held for sale totaled $1.3 million and $0.8 million at December 29, 2017 and December 30, 2016, respectively.
Fair Value of Other Financial Instruments
Pension Plan Assets
The fair value of the Company’s pension plan assets disclosed in Note 9 “Benefit Plans” are determined based upon quoted market prices in inactive markets or valuation models with observable market data inputs to estimate fair value. These observable market data inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data. The Company’s pension plan assets are categorized Level 2 of the fair value hierarchy.
Segment and Geographic Information
SEGMENT AND GEOGRAPHIC INFORMATION
(17.)     SEGMENT AND GEOGRAPHIC INFORMATION
The Company organizes its business into two reportable segments: (1) Medical and (2) Non-Medical. This segment structure reflects the financial information and reports used by the Company’s management, specifically its Chief Operating Decision Maker (“CODM”), to make decisions regarding the Company’s business, including resource allocations and performance assessments. This segment structure reflects the Company’s current operating focus in compliance with ASC 280, Segment Reporting.
The two reportable segments, along with their related product lines, are described below:
Medical - includes the (i) Cardio & Vascular product line, which includes introducers, steerable sheaths, guidewires, catheters, and stimulation therapy components, subassemblies and finished devices that deliver therapies for various markets such as coronary and neurovascular disease, peripheral vascular disease, interventional radiology, vascular access, atrial fibrillation, and interventional cardiology, plus products for medical imaging and pharmaceutical delivery; (ii) Cardiac & Neuromodulation product line, which includes batteries, capacitors, filtered and unfiltered feed-throughs, engineered components, implantable stimulation leads, and enclosures used in implantable medical devices; and (iii) Advanced Surgical, Orthopedics & Portable Medical product line, which includes components, sub-assemblies, finished devices, implants, instruments and delivery systems for a range of surgical technologies to the advanced surgical market, including laparoscopy, orthopedics and general surgery, biopsy and drug delivery, joint preservation and reconstruction, arthroscopy, and engineered tubing solutions. Products also include life-saving and life-enhancing applications comprising of automated external defibrillators, portable oxygen concentrators, ventilators, and powered surgical tools.
Non-Medical - includes primary (lithium) cells, and primary and secondary battery packs for applications in the energy, military and environmental markets.
The Company defines segment income from operations as sales less cost of sales including amortization and expenses attributable to segment-specific selling, general, administrative, research, development, engineering and other operating activities. The remaining unallocated operating and other expenses are primarily administrative corporate headquarter expenses and capital costs that are not allocated to reportable segments. Transactions between the two segments are not significant.
During the first quarter of 2017, the Company revised the method used to present sales by product line in order to align the legacy Greatbatch and LRM methodologies.  The Company believes the revised presentation will provide improved reporting and better transparency into the operational results of its business and markets.  Prior period amounts have been reclassified to conform to the new product line sales reporting presentation.
The following table presents sales by product line for fiscal years 2017, 2016 and 2015 (in thousands).
 
2017
 
2016
 
2015
Segment sales by product line:
 
 
 
 
 
Medical
 
 
 
 
 
Cardio & Vascular
$
536,794

 
$
490,857

 
$
131,299

Cardiac & Neuromodulation
428,349

 
439,541

 
361,722

Advanced Surgical, Orthopedics & Portable Medical
439,810

 
414,701

 
247,944

Total Medical
1,404,953

 
1,345,099

 
740,965

Non-Medical
56,968

 
41,679

 
59,449

Total sales
$
1,461,921

 
$
1,386,778

 
$
800,414


(17.)     SEGMENT AND GEOGRAPHIC INFORMATION (Continued)
A significant portion of the Company’s sales for fiscal years 2017, 2016 and 2015 and accounts receivable at December 29, 2017 and December 30, 2016 were to four customers as follows:
 
Sales
 
Accounts Receivable
 
2017
 
2016
 
2015
 
December 29,
2017
 
December 30,
2016
Customer A
17%
 
18%
 
17%
 
9%
 
7%
Customer B
17%
 
17%
 
18%
 
18%
 
20%
Customer C
12%
 
12%
 
12%
 
8%
 
4%
Customer D
9%
 
9%
 
5%
 
17%
 
14%
 
55%
 
56%
 
52%
 
52%
 
45%

The following table presents income from operations for the Company’s reportable segments for fiscal years 2017, 2016 and 2015 (in thousands).
 
2017
 
2016
 
2015
Segment income from operations:
 
 
 
 
 
Medical
$
211,002

 
$
185,448

 
$
83,784

Non-Medical
11,335

 
1,513

 
7,289

Total segment income from operations
222,337

 
186,961

 
91,073

Unallocated operating expenses
(82,898
)
 
(78,691
)
 
(77,927
)
Operating income
139,439

 
108,270

 
13,146

Unallocated expenses, net
(117,612
)
 
(107,085
)
 
(28,846
)
Income (loss) before benefit for income taxes
$
21,827

 
$
1,185

 
$
(15,700
)

The following table presents depreciation and amortization expense for the Company’s reportable segments for fiscal years 2017, 2016 and 2015 (in thousands).
 
2017
 
2016
 
2015
Segment depreciation and amortization:
 
 
 
 
 
Medical
$
93,927

 
$
83,184

 
$
61,618

Non-Medical
2,675

 
2,346

 
2,503

Total depreciation and amortization included in segment
   income from operations
96,602

 
85,530

 
64,121

Unallocated depreciation and amortization
6,194

 
4,994

 
3,497

Total depreciation and amortization
$
102,796

 
$
90,524

 
$
67,618


The following table presents total assets for the Company’s reportable segments as of December 29, 2017 and December 30, 2016 (in thousands).
 
December 29,
2017
 
December 30,
2016
Identifiable assets:
 
 
 
Medical
$
2,687,227

 
$
2,638,180

Non-Medical
54,071

 
60,988

Total reportable segments
2,741,298

 
2,699,168

Unallocated assets
107,047

 
133,375

Total assets
$
2,848,345

 
$
2,832,543


(17.)     SEGMENT AND GEOGRAPHIC INFORMATION (Continued)
The following table presents capital expenditures for the Company’s reportable segments for fiscal years 2017, 2016 and 2015 (in thousands).
 
2017
 
2016
 
2015
Expenditures for tangible long-lived assets, excluding acquisitions:
 
 
 
 
 
Medical
$
37,740

 
$
44,670

 
$
40,931

Non-Medical
661

 
1,451

 
600

Total reportable segments
38,401

 
46,121

 
41,531

Unallocated long-lived tangible assets
8,783

 
8,251

 
6,523

Total expenditures
$
47,184

 
$
54,372

 
$
48,054


Geographic Area Information
The following table presents sales by significant country for fiscal years 2017, 2016 and 2015. In these tables, sales are allocated based on where the products are shipped (in thousands).
 
2017
 
2016
 
2015
Sales by geographic area:
 
 
 
 
 
United States
$
862,290

 
$
805,742

 
$
401,380

Non-Domestic locations:
 
 
 
 
 
Puerto Rico
133,752

 
159,243

 
136,898

Rest of world
465,879

 
421,793

 
262,136

Total sales
$
1,461,921

 
$
1,386,778

 
$
800,414


The following table presents PP&E by geographic area as of December 29, 2017 and December 30, 2016. In these tables, PP&E is aggregated based on the physical location of the tangible long-lived assets (in thousands).
 
December 29,
2017
 
December 30,
2016
Long-lived tangible assets by geographic area:
 
 
 
United States
$
252,767

 
$
258,899

Rest of world
117,608

 
113,143

Total
$
370,375

 
$
372,042

Quarterly Sales and Earnings Data - Unaudited
QUARTERLY SALES AND EARNINGS DATA - UNAUDITED
QUARTERLY SALES AND EARNINGS DATA—UNAUDITED
(in thousands, except per share data)
Fourth Quarter
 
Third Quarter
 
Second Quarter
 
First Quarter
Fiscal Year 2017
 
 
 
 
 
 
 
Sales
$
390,481

 
$
363,308

 
$
362,719

 
$
345,413

Gross profit
104,818

 
98,235

 
99,272

 
91,226

Net income (loss)
54,338

 
13,690

 
2,990

 
(4,339
)
EPS—basic
1.71

 
0.43

 
0.10

 
(0.14
)
EPS—diluted
1.68

 
0.43

 
0.09

 
(0.14
)
 
 
 
 
 
 
 
 
Fiscal Year 2016
 
 
 
 
 
 
 
Sales
$
359,591

 
$
346,567

 
$
348,382

 
$
332,238

Gross profit
92,891

 
97,909

 
96,031

 
91,468

Net income (loss)
7,933

 
11,458

 
(770
)
 
(12,660
)
EPS—basic
0.26

 
0.37

 
(0.03
)
 
(0.41
)
EPS—diluted
0.25

 
0.37

 
(0.03
)
 
(0.41
)

During the fourth quarter 2017, the Company recognized a $39.4 million net tax benefit as a result of the Tax Reform Act, which was signed into law on December 22, 2017. Further information on the impact of the Tax Reform Act is presented in Note 12 “Income Taxes.”
Valuation and Qualifying Accounts
Schedule of Valuation and Qualifying Accounts Disclosure
Schedule II—Valuation and Qualifying Accounts 
 
 
 
 
Col. C—Additions
 
 
 
 
Column A
Description
 
Col. B Balance at Beginning
of Period
 
Charged to Costs &
Expenses
 
Charged to Other Accounts- Describe
 
Col. D Deductions
- Describe
 
Col. E Balance at End of
Period
December 29, 2017
 
 
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
 
$
742

 
$
151

 
$
31

(4) 
$
(100
)
(2) 
$
824

Valuation allowance for deferred tax assets
 
$
35,391

 
$
3,284

(1) 
$
—

 
$
(2,195
)
(2)(5) 
$
36,480

December 30, 2016
 
 
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
 
$
954

 
$
140

 
$
245

(4) 
$
(597
)
(2) 
$
742

Valuation allowance for deferred tax assets
 
$
39,171

 
$
641

(1) 
$
(5,135
)
(3)(4) 
$
714

(5) 
$
35,391

January 1, 2016
 
 
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
 
$
1,411

 
$
(70
)
 
$
459

(3)(4) 
$
(846
)
(2) 
$
954

Valuation allowance for deferred tax assets
 
$
10,709

 
$
788

(1) 
$
27,836

(3)(4) 
$
(162
)
(5) 
$
39,171

(1) 
Valuation allowance recorded in the provision for income taxes for certain net operating losses and tax credits. The increase in 2017 includes the impact of the adoption of the U.S. Tax Cuts and Jobs Act which increased the value of our state deferred tax assets to which a corresponding valuation allowance was recorded.
(2) 
Accounts written off.
(3) 
Balance recorded as a part of our 2015 acquisition of LRM. 2016 amount represents measurement-period adjustments related to the acquisition of LRM.
(4) 
Includes foreign currency translation effect.
(5) 
Includes return to provision adjustments for prior years.
Summary of Significant Accounting Policies (Policies)
Basis of Presentation and Principles of Consolidation 
Basis of Presentation and Principles of Consolidation
The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of Integer Holdings Corporation and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Fiscal Year End 
Fiscal Year
The Company utilizes a fifty-two or fifty-three week fiscal year ending on the Friday nearest December 31. Fiscal years 2017, 2016 and 2015 consisted of fifty-two weeks and ended on December 29, 2017, December 30, 2016 and January 1, 2016, respectively.
Use of Estimates 
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of sales and expenses during the reporting periods. Actual results could differ materially from those estimates.
Reclassifications 
Reclassifications
Certain prior period amounts have been reclassified to conform to the current segment structure. Refer to Note 17 “Segment and Geographic Information,” for a description of the changes made to reflect the current year product line sales reporting presentation.
Cash and Cash Equivalents 
Cash and Cash Equivalents
Cash and cash equivalents consist of cash and highly liquid, short-term investments with maturities at the time of purchase of three months or less.
Concentration of Credit Risk 
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of accounts receivable. A significant portion of the Company’s sales and accounts receivable are to four customers, all in the medical device industry, and, as such, the Company is directly affected by the condition of those customers and that industry. However, the credit risk associated with trade receivables is partially mitigated due to the stability of those customers. The Company performs on-going credit evaluations of its customers. Note 17 “Segment and Geographic Information” contains information on sales and accounts receivable for these customers. The Company maintains cash deposits with major banks, which from time to time may exceed insured limits. The Company performs on-going credit evaluations of its banks.
Allowance for Doubtful Accounts 
Trade Accounts Receivable and Allowance for Doubtful Accounts
The Company provides credit, in the normal course of business, to its customers in the form of trade receivables. Credit is extended based on evaluation of a customer’s financial condition and collateral is not required. The Company maintains an allowance for those customer receivables that it does not expect to collect. The Company accrues its estimated losses from uncollectable accounts receivable to the allowance based upon recent historical experience, the length of time the receivable has been outstanding and other specific information as it becomes available. Provisions to the allowance for doubtful accounts are charged to current operating expenses. Actual losses are charged against this allowance when incurred.
Inventories 
Inventories
Inventories are stated at the lower of cost, determined using the first-in first-out method, or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Write-downs for excess, obsolete or expired inventory are based primarily on how long the inventory has been held as well as estimates of forecasted net sales of that product. A significant change in the timing or level of demand for products may result in recording additional write-downs for excess, obsolete or expired inventory in the future. Note 4 “Inventories” contains additional information on the Company’s inventory.
Property, Plant and Equipment 
Property, Plant and Equipment (“PP&E”)
PP&E is carried at cost less accumulated depreciation. Depreciation is computed by the straight-line method over the estimated useful lives of the assets, as follows: buildings and building improvements 12-30 years; machinery and equipment 3-10 years; office equipment 3-10 years; and leasehold improvements over the remaining lives of the improvements or the lease term, if less. The cost of repairs and maintenance are expensed as incurred; renewals and betterments are capitalized. Upon retirement or sale of an asset, its cost and related accumulated depreciation or amortization is removed from the accounts and any gain or loss is recorded in operating income or expense. The Company also reviews its PP&E for impairment when impairment indicators exist. When impairment indicators exist, the Company determines if the carrying value of its fixed asset(s) exceeds the related undiscounted future cash flows. In cases where the carrying value of the Company's long-lived assets or asset groups (excluding goodwill and indefinite-lived intangible assets) exceeds the related undiscounted cash flows, the carrying value is written down to fair value. Fair value is generally determined using a discounted cash flow analysis. Note 5 “Property, Plant and Equipment, Net” contains additional information on the Company’s PP&E.
Fair Value Measurements 
Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the “exit price”) in an orderly transaction between market participants at the measurement date. Accounting Standards Codification (“ASC”) 820, Fair Value Measurements, establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:
Level 1 – Valuation is based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Level 1 valuations do not entail a significant degree of judgment.
Level 2 – Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market.
Level 3 – Valuation is based on unobservable inputs that are significant to the overall fair value measurement. The degree of judgment in determining fair value is greatest for Level 3 valuations.
Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, assumptions are required to reflect those that market participants would use in pricing the asset or liability at the measurement date. Note 16 “Fair Value Measurements” contains additional information on assets and liabilities recorded at fair value in the consolidated financial statements.

Business Combinations 
Acquisitions
Results of operations of acquired companies are included in the Company’s results of operations as of the respective acquisition dates. The purchase price of each acquisition is allocated to the net assets acquired based on estimates of their fair values at the date of the acquisition. Any purchase price in excess of these net assets is recorded as goodwill. All direct acquisition-related costs are expensed as incurred. The allocation of purchase price in certain cases may be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from the acquisition date.
Goodwill 
Goodwill
Goodwill represents the excess of cost over the fair value of identifiable net assets of a business acquired and is assigned to one or more reporting units. The Company tests each reporting unit’s goodwill for impairment at least annually as of the last day of the fiscal year and between annual tests if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount. In conducting its annual impairment testing, the Company may first perform a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount. If not, no further goodwill impairment testing is required. If it is more likely than not that a reporting unit’s fair value is less than its carrying amount, or if the Company elects not to perform a qualitative assessment of a reporting unit, the Company then compares the fair value of the reporting unit to the related net book value. If the net book value of a reporting unit exceeds its fair value, an impairment loss is measured and recognized. The term more likely than not refers to a level of likelihood that is more than 50 percent.
The Company performed a qualitative assessment of its reporting units as of December 29, 2017. As part of this analysis, the Company evaluated factors including, but not limited to, macro-economic conditions, market and industry conditions, cost factors, competitive environment, share price fluctuations, results of the last impairment test, and the operational stability and the overall financial performance of the reporting units. The assessment indicated that it was more likely than not that the fair value of each of the reporting units exceeded its respective carrying value. The Company does not believe that any of its reporting units are at risk for impairment.
Other Intangible Assets 
Other Intangible Assets
Other intangible assets consist of purchased technology and patents, customer lists and trademarks. Definite-lived intangible assets are amortized on an accelerated or straight-line basis, which approximates the projected cash flows used to fair value those definite-lived intangible assets at the time of acquisition, as follows: purchased technology and patents 5-15 years; customer lists 7-20 years and other intangible assets 1-10 years. Certain trademark assets are considered indefinite-lived intangible assets and are not amortized. The Company expenses the costs incurred to renew or extend the term of intangible assets.
The Company reviews its definite-lived intangible assets for impairment when impairment indicators exist. When impairment indicators exist, the Company determines if the carrying value of its definite-lived intangible assets exceeds the related undiscounted future cash flows. In cases where the carrying value exceeds the undiscounted future cash flows, the carrying value is written down to fair value. Fair value is generally determined using a discounted cash flow analysis.
The Company assesses its indefinite-lived intangible assets for impairment periodically to determine if any adverse conditions exist that would indicate impairment or when impairment indicators exist. The Company assesses its indefinite-lived intangible assets for impairment at least annually by comparing the fair value of the indefinite-lived intangible asset to its carrying value. The fair value is determined using the income approach.
Refer to Note 6 “Goodwill and Other Intangible Assets, Net” for further details of the Company’s goodwill and other intangible assets.
Cost and Equity Method Investments 
Cost and Equity Method Investments
Certain of the Company’s investments in equity and other securities are long-term, strategic investments in companies that are in varied stages of development. These investments are included in Other Assets on the Consolidated Balance Sheets. The Company accounts for investments in these entities under the cost or equity method depending on the type of ownership interest, as well as the Company’s ability to exercise influence over these entities. Investments accounted for under the cost method are initially recorded at the amount of the Company’s investment and carried at that cost until a security is deemed impaired or is sold. Equity securities accounted for under the equity method are initially recorded at the amount of the Company’s investment and are adjusted each period for the Company’s share of the investee’s income or loss and dividends paid. The share of net income or losses of equity investments is included (Gain) Loss on Cost and Equity Method Investments, Net, in the Consolidated Statements of Operations and Comprehensive Income (Loss).
(1.)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Equity securities accounted for under both the cost and equity methods are reviewed quarterly for changes in circumstance or the occurrence of events that suggest the Company’s investment may not be recoverable. Examples of such impairment indicators include, but are not limited to: a recent sale or offering of similar shares of the investment at a price below the Company’s cost basis; a significant deterioration in earnings performance; a significant change in the regulatory, economic or technological environment of the investee; or a significant doubt about an investee’s ability to continue as a going concern. If an impairment indicator is identified, management will estimate the fair value of the investment and compare it to its carrying value. The estimation of fair value considers all available financial information related to the investee, including, but not limited to, valuations based on recent third-party equity investments in the investee. Impairment is deemed to be other-than-temporary unless the Company has the ability and intent to hold the investment for a period sufficient for a market recovery up to the carrying value of the investment. Further, evidence must indicate that the carrying value of the investment is recoverable within a reasonable period. For other-than-temporary impairments, an impairment loss is recognized equal to the difference between the investment’s carrying value and its fair value and is recognized in (Gain) Loss on Cost and Equity Method Investments, Net, in the Consolidated Statements of Operations and Comprehensive Income (Loss) in the period the determination is made.
The Company has determined that these investments are not considered variable interest entities. The Company’s exposure related to these entities is limited to its recorded investment. These investments are in start-up research and development companies whose fair value is highly subjective in nature and subject to future fluctuations, which could be significant. Refer to Note 16 “Fair Value Measurements” for further discussion of the Company’s Cost and Equity Method Investments.
Debt Issuance Costs and Discounts 
Debt Issuance Costs and Discounts
Debt issuance costs and discounts associated with the issuance of debt by the Company are deferred and amortized over the lives of the related debt. Debt issuance costs incurred in connection with the Company’s issuance of its revolving credit facility are classified within Other Assets and amortized to Interest Expense on a straight-line basis over the contractual term of the credit facility. Debt issuance costs and discounts related to the Company’s term-debt are recorded as a reduction of the carrying value of the related debt and are amortized to Interest Expense using the effective interest method over the period from the date of issuance to the put option date (if applicable) or the maturity date, whichever is earlier. The amortization of debt issuance costs and discounts are included in Debt Related Charges Included in Interest Expense in the Consolidated Statements of Cash Flows. Upon prepayment of the related debt, the Company accelerates the recognition of an appropriate amount of the costs as refinancing or extinguishment of debt. Note 8 “Debt” contains additional information on the Company’s debt issuance costs and discounts.
Income Taxes 
Income Taxes
The consolidated financial statements of the Company have been prepared using the asset and liability approach in accounting for income taxes, which requires the recognition of deferred income taxes for the expected future tax consequences of net operating losses, credits, and temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided on deferred tax assets if it is determined, within each taxing jurisdiction, that it is more likely than not that the asset will not be realized.
The Company accounts for uncertain tax positions using a more likely than not recognition threshold. The evaluation of uncertain tax positions is based on factors including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. These tax positions are evaluated on a quarterly basis. The Company recognizes interest expense related to uncertain tax positions as Provision (Benefit) for Income Taxes. Penalties, if incurred, are recognized as a component of Selling, General and Administrative Expenses (“SG&A”).
The Company and its subsidiaries file a consolidated U.S. federal income tax return. State tax returns are filed on a combined or separate basis depending on the applicable laws in the jurisdictions where the tax returns are filed. The Company also files foreign tax returns on a separate company basis in the countries in which it operates.
Derivative Financial Instruments 
Derivative Financial Instruments
The Company recognizes all derivative financial instruments in its consolidated financial statements at fair value. Changes in the fair value of derivative instruments are recorded in earnings unless hedge accounting criteria are met. The Company designated its interest rate swap (Refer to Note 8 “Debt”) and foreign currency contracts (Refer to Note 13 “Commitments and Contingencies”) entered into as cash flow hedges. The effective portion of the changes in fair value of these cash flow hedges is recorded each period, net of tax, in Accumulated Other Comprehensive Income (Loss) until the related hedged transaction occurs. Any ineffective portion of the changes in fair value of these cash flow hedges is recorded in earnings. In the event the hedged cash flow for forecasted transactions does not occur, or it becomes probable that they will not occur, the Company reclassifies the amount of any gain or loss on the related cash flow hedge to income (expense) at that time. Cash flows related to these derivative financial instruments are included in cash flows from operating activities. The cash flows from the termination of interest rate swap agreements are reported as operating activities in the Consolidated Statements of Cash Flows.
Revenue Recognition 
Revenue Recognition
The Company recognizes revenue when it is realized or realizable and earned. This occurs when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable (including any price concessions under long-term agreements), the buyer is obligated to pay us (i.e., not contingent on a future event), the risk of loss is transferred, there is no obligation of future performance, collectability is reasonably assured and the amount of future returns can reasonably be estimated. With regards to the Company’s customers (including distributors), those criteria are met when title passes, generally at the point of shipment. Currently, the revenue recognition policy is the same for the Company’s Medical and Non-Medical segments. In general, for customers with long-term contracts, we have negotiated fixed pricing arrangements. During new contract negotiations, price level decreases (concessions) for future sales may be offered to customers in exchange for volume and/or long-term commitments. Once the new contracts are signed, these prices are fixed and determinable for all future sales and revenue is recognized at that fixed price. The Company includes shipping and handling fees billed to customers in Sales. Shipping and handling costs associated with inbound and outbound freight are recorded in Cost of Sales.
Environmental Costs 
Environmental Costs
Environmental expenditures that relate to an existing condition caused by past operations and that do not provide future benefits are expensed as incurred. Liabilities are recorded when environmental assessments are made, the requirement for remedial efforts is probable and the amount of the liability can be reasonably estimated. Liabilities are recorded generally no later than the completion of feasibility studies. The Company has an ongoing monitoring and identification process to assess how the activities, with respect to known exposures, are progressing against the recorded liabilities, as well as to identify other potential remediation sites that are presently unknown.
Restructuring Expenses 
Restructuring Expenses
The Company continually evaluates alternatives to align the business with the changing needs of its customers and to lower operating costs. This includes the realignment of its existing manufacturing capacity, facility closures, or similar actions, either in the normal course of business or pursuant to significant restructuring programs. These actions may result in employees receiving voluntary or involuntary employee termination benefits, which may be pursuant to contractual agreements. Voluntary termination benefits are accrued when an employee accepts the related offer. Involuntary termination benefits are accrued upon the commitment to a termination plan and the benefit arrangement is communicated to affected employees, or when liabilities are determined to be probable and estimable, depending on the existence of a substantive plan for severance or termination. All other exit costs are expensed as incurred. Refer to Note 11 “Other Operating Expenses” for additional information.
Product Warranties 
Product Warranties
The Company allows customers to return defective or damaged products for credit, replacement, or repair. The Company warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. The Company accrues its estimated exposure to warranty claims, through Cost of Sales, based upon recent historical experience and other specific information as it becomes available. Note 13 “Commitments and Contingencies” contains additional information on the Company’s product warranties.
Research, Development and Engineering Costs, Net (RD&E) 
Research, Development and Engineering Costs (“RD&E”)
RD&E costs are expensed as incurred. The primary costs are salary and benefits for personnel, material costs used in development projects and subcontracting costs.
Stock-Based Compensation 
Stock-Based Compensation
The Company recognizes stock-based compensation expense for its related compensation plans, which include stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance-based restricted stock units (“PRSUs”). For the Company's PRSUs, in addition to service conditions, the ultimate number of shares to be earned depends on the achievement of targets based on market-based conditions, such as total shareholder return, or financial metrics such as adjusted operating income (“AOI”) and adjusted earnings before income taxes and depreciation (“EBITDA”). The Company recognizes forfeitures of equity awards as incurred.
The fair value of the stock-based compensation is determined at the grant date. The Company uses the Black-Scholes standard option pricing model (“Black-Scholes model”) to determine the fair value of stock options. The fair value of each RSU and RSA is determined based on the Company's closing stock price on the date of grant. The fair value of each PRSU is determined based on either the Company's closing stock price on the date of grant or through a Monte Carlo simulation valuation model (“Monte Carlo model”) for those awards that include a market-based condition. In addition to the closing stock price on the date of grant, the determination of the fair value of awards using both the Black-Scholes and Monte Carlo models is affected by other assumptions, including the following:
Expected Term - The Company analyzes historical employee exercise and termination data to estimate the expected term assumption for stock options. For market-based awards, the term is commensurate with the performance period remaining as of the grant date.
Risk-free Interest Rate - A risk-free rate is based on the U.S. Treasury rates in effect on the grant date for a maturity equal to or approximating the expected term of the award.
Expected Volatility - For stock options, expected volatility is calculated using historical volatility based on the daily closing prices of the Company's common stock over a period equal to the expected term. For market-based awards, a combination of historical and implied volatilities for the Company and members of its peer group are used in developing the expected volatility assumption.
Dividend Yield - The dividend yield assumption is based on the Company’s history and the expected annual dividend yield on the grant date.
The Company recognizes compensation expense based on the fair value of the award on the date of grant. For stock options, RSAs and RSUs, compensation expense is recognized over the respective service period using the straight-line amortization method. Compensation expense for PRSUs with financial metrics is reassessed each reporting period and recognized based upon the probability that the performance targets will be achieved. Compensation expense for market-based awards is not adjusted based on actual achievement of the performance goals. Based on the vesting terms of the grant, compensation expense for PRSUs is amortized over the service period using either a graded vesting method or the straight-line amortization method. The actual expense recognized over the vesting period will only be for those awards that ultimately vest, excluding market-based award considerations.
All stock option awards granted under the Company’s compensation plans have an exercise price equal to the closing stock price on the date of grant, a ten-year contractual life and generally, vest annually over a three-year vesting term. RSUs typically vest in equal annual installments over a three or four year period. Stock option and RSAs issued to members of the Company’s Board of Directors as a portion of their annual retainer vest quarterly over a one-year vesting term. Earned PRSUs typically vest two to three years from the date of grant.
The Company records deferred tax assets for awards that result in deductions on the Company's income tax returns, based on the amount of stock-based compensation expense recognized and the statutory tax rate in the jurisdiction in which it will receive a deduction. Differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported on the income tax return are recorded as a component of income tax expense in the Consolidated Statements of Operations and Comprehensive Income (Loss). Note 10 “Stock-Based Compensation” contains additional information on the Company’s stock-based compensation.
Foreign Currency Translation 
Foreign Currency Translation and Remeasurement
The Company translates all assets and liabilities of its foreign subsidiaries, where the U.S. dollar is not the functional currency, at the period-end exchange rate and translates income and expenses at the average exchange rates in effect during the period. The net effect of this translation is recorded in the consolidated financial statements as Accumulated Other Comprehensive Income (Loss). Translation adjustments are not adjusted for income taxes as they relate to permanent investments in the Company’s foreign subsidiaries.
Defined Benefit Plans 
Defined Benefit Plans
The Company recognizes in its balance sheet as an asset or liability the overfunded or underfunded status of its defined benefit plans provided to its employees located in Mexico, Switzerland, France and Germany. This asset or liability is measured as the difference between the fair value of plan assets, if any, and the benefit obligation of those plans. For these plans, the benefit obligation is the projected benefit obligation, which is calculated based on actuarial computations of current and future benefits for employees. Actuarial gains or losses and prior service costs or credits that arise during the period, but are not included as components of net periodic benefit expense, are recognized as a component of Accumulated Other Comprehensive Income (Loss). Defined benefit expenses are charged to Cost of Sales, SG&A and RD&E expenses as applicable.
Earnings (Loss) Per Share 
Earnings (Loss) Per Share (“EPS”)
Basic EPS is calculated by dividing Net Income (Loss) by the weighted average number of shares outstanding during the period. Diluted EPS is calculated by adjusting the weighted average number of shares outstanding for potential common shares if dilutive to the EPS calculation and consist of stock options, unvested RSAs and RSUs and, if applicable, contingently convertible instruments such as convertible debt. Note 14 “Earnings (Loss) Per Share” contains additional information on the computation of the Company’s EPS. 
Comprehensive Income (Loss) 
Comprehensive Income (Loss)
The Company’s comprehensive income (loss) as reported in the Consolidated Statements of Operations and Comprehensive Income (Loss) includes net income (loss), foreign currency translation adjustments, the net change in cash flow hedges, and defined benefit plan liability adjustments.
Recently Issued Accounting Pronouncements 
Recent Accounting Pronouncements
In the normal course of business, management evaluates all new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”), Securities and Exchange Commission (“SEC”), or other authoritative accounting bodies to determine the potential impact they may have on the Company’s Consolidated Financial Statements. Based upon this review, except as noted below, management does not expect any of the recently issued accounting pronouncements, which have not already been adopted, to have a material impact on the Company’s Consolidated Financial Statements.






(1.)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recently Adopted
In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 simplifies various aspects of the accounting for stock-based payments. The simplifications include:
•
recording all tax effects associated with stock-based compensation through the income statement, as opposed to recording certain amounts in other paid-in capital, which eliminates the requirements to calculate a windfall pool;
•
allowing entities to withhold shares to satisfy the employer’s statutory tax withholding requirement up to the highest marginal tax rate applicable to employees rather than the employer’s minimum statutory rate, without requiring liability classification for the award;
•
modifying the requirement to estimate the number of awards that will ultimately vest by providing an accounting policy election to either estimate the number of forfeitures or recognize forfeitures as they occur;
•
changing certain presentation requirements in the statement of cash flows, including removing the requirement to present excess tax benefits as an inflow from financing activities and an outflow from operating activities, and requiring the cash paid to taxing authorities arising from withheld shares to be classified as a financing activity; and
•
the assumed proceeds from applying the treasury stock method when computing EPS is amended to exclude the amount of excess tax benefits that would be recognized in additional paid-in capital.
The Company adopted the provisions of ASU 2016-09 on December 31, 2016, the beginning of its 2017 fiscal year. The adoption of ASU 2016-09 resulted in the Company making an accounting policy election to change how it will recognize the number of stock awards that will ultimately vest. In the past, the Company applied a forfeiture rate to shares granted. With the adoption of ASU 2016-09, the Company will recognize forfeitures as they occur. This change resulted in the Company making a cumulative effect change to retained earnings of $0.3 million. In addition, the Company recorded the tax effects associated with stock-based compensation through the income statement for 2017 and will continue to record amounts prospectively through the income statement in accordance with ASU 2016-09.  Finally, the Company adjusted its dilutive shares calculation to remove the excess tax benefits from the calculation of EPS on a prospective basis. The revised calculation is more dilutive, but did not have a material impact on the Company's diluted EPS calculation for 2017.
In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory,” which simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU is effective for public business entities for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company adopted this standard in the first quarter of fiscal year 2017 on a prospective basis. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.
In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment (Topic 350)” to simplify the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test. A goodwill impairment will now be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, limited to the amount of goodwill allocated to that reporting unit. ASU 2017-04 is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted for any impairment tests performed after January 1, 2017. The Company adopted the new guidance on a prospective basis during the first quarter of 2017. The adoption of this ASU did not impact the Company’s consolidated financial statements.
Not Yet Adopted
In February 2018, the FASB issued ASU 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which allows for the reclassification of certain income tax effects related to the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) between accumulated other comprehensive income (loss) and retained earnings. The amendments eliminate the stranded tax effects that were created as a result of the reduction of the U.S. federal corporate income tax rate. The accounting update is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. Adoption of this ASU is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the tax laws or rates were recognized. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements.

(1.)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” The amendments in this ASU better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships, making more hedges eligible for hedge accounting, particularly for rates and commodities hedges. It also aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements by requiring an entity to present the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported. This guidance is effective for the Company in the first quarter of fiscal year 2019, with early adoption permitted. The Company does not believe the adoption of this guidance will have a material impact on its consolidated financial statements.
In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-entity Transfers of Assets Other Than Inventory,” which requires entities to recognize the income tax consequences of intra-entity transfers of assets other than inventory when the transfers occur. This ASU is effective for the Company for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company does not believe the adoption of this guidance will have a material impact on its consolidated financial statements.
In August 2016, the FASB issued ASU 2016-15 “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments: A Consensus of the FASB Emerging Issues Task Force.” ASU 2016-15 makes targeted changes to how cash receipts and cash payments are presented in the statement of cash flows. The areas specifically addressed include debt prepayment and debt extinguishment costs, the settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, cash premiums paid for and proceeds from corporate-owned life insurance policies, distributions received from equity method investees and cash receipts from payments on transferor’s beneficial interest on securitized trade receivables. Additionally, the amendment states that, in the absence of other prevailing guidance, cash receipts and payments that have characteristics of more than one class of cash flows should have each separately identifiable source or use of cash presented within the most predominant class of cash flows based on the nature of the underlying cash flows. This guidance is effective for the Company in the first quarter of fiscal year 2018, with early adoption permitted. The Company does not believe the adoption of this guidance will have a material impact on its consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which requires companies to recognize a lease liability that represents the discounted obligation to make future minimum lease payments, and a corresponding right-of-use asset on the balance sheet for most leases. This ASU retains a distinction between finance leases and operating leases, and the classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the current accounting literature. The result of retaining a distinction between finance leases and operating leases is that under the lessee accounting model in Topic 842, the effect of leases in a consolidated statement of comprehensive income and a consolidated statement of cash flows is largely unchanged from previous GAAP.  The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and are required to be applied on a modified retrospective basis. Earlier application is permitted. The Company expects the adoption of ASU 2016-02 will result in a material increase in the assets and liabilities on its Consolidated Balance Sheets for its right-to-use assets and lease liabilities. The Company is currently evaluating the impact that the adoption of this ASU will have on its Consolidated Statements of Operations and Comprehensive Income (Loss).
In January 2016, the FASB issued ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This ASU requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; requires entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset and requires entities to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option. The new ASU is effective for public companies for fiscal years beginning after December 15, 2017. Early adoption of the own credit provision is permitted. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements.
(1.)     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which has been subsequently updated by ASU 2015-14, 2016-08, 2016-10 and 2016-12. The core principle behind ASU 2014-09 is that an entity should recognize revenue in an amount that reflects the consideration to which it expects to be entitled in exchange for delivering goods and services using a five-step model. Enhanced disclosures are required, including revenue recognition policies to identify performance obligations and significant judgments in measurement and recognition. This ASU can be adopted using either a full retrospective approach, where historical financial information is presented in accordance with the new standard, or a modified retrospective approach, where this ASU is applied to the most current period presented in the financial statements. This ASU is effective for the Company in the first quarter of fiscal year 2018.
The Company has evaluated the impact of adopting ASU 2014-09 by applying the five-step model to existing contracts with customers.  The majority of the Company’s customer contracts consist of a single performance obligation for which revenue will continue to be recognized at the point of shipment. As a result, the Company has concluded that this standard does not have a material impact on the Company’s financial condition or results of operations.  In conjunction with this evaluation, the Company also reviewed internal controls, business processes and key system functionality and no significant changes were deemed necessary. The Company is currently finalizing the required additional disclosures related to the nature, timing and uncertainty of revenue and cash flows arising from contracts with customers.  The Company will adopt using the modified retrospective approach on December 30, 2017, the first day of the Company’s 2018 fiscal year.
As ASU 2014-09 is principle based, interpretation of those principles may vary from company to company based upon their unique circumstances.  New information may arise that could change the Company’s current understanding and interpretation of the standard and its impact on the Company.  The Company will continue to monitor industry activities and any additional guidance provided by regulators, standard setters or the accounting profession and will adjust its implementation of the standard accordingly.
Divestiture and Acquisition (Tables)
Summary of divested assets and liabilities 
In connection with the Spin-off, during the first quarter of 2016, the Company made a cash capital contribution of $75 million to Nuvectra and divested the following assets and liabilities (in thousands):
Assets divested
 
  Cash and cash equivalents
$
76,256

  Other current assets
977

  Property, plant and equipment, net
4,407

  Amortizing intangible assets, net
1,931

  Goodwill
40,830

  Deferred income taxes
6,446

Total assets divested
130,847

Liabilities transferred
 
     Current liabilities
2,119

Net assets divested
$
128,728

Summary of aggregate consideration 
The aggregate consideration paid by the Company to the stockholders of LRM consisted of the following (in thousands):
Cash
$
478,490

Fair value of Integer common stock
245,368

Replacement stock options attributable to pre-acquisition service
4,508

Total purchase consideration
$
728,366

Summary of assets acquired and liabilities assumed 
The fair values of the assets acquired and liabilities assumed are as follows (in thousands):
Assets acquired
 
Current assets
$
269,815

Property, plant and equipment
216,473

Amortizing intangible assets
849,000

Indefinite-lived intangible assets
70,000

Goodwill
660,670

Other non-current assets
1,629

Total assets acquired
2,067,587

Liabilities assumed
 
Current liabilities
103,986

Debt assumed
1,044,675

Other long-term liabilities
190,560

Total liabilities assumed
1,339,221

Net assets acquired
$
728,366

Schedule of Pro Forma Information 
The following unaudited pro forma information summarizes the consolidated results of operations of the Company and LRM for fiscal year 2015 as if the acquisition of LRM occurred as of the beginning of fiscal year 2015 (in thousands, except per share amounts): 
Sales
$
1,445,689

Net income
2,405

Earnings per share:
 
Basic
$
0.08

Diluted
$
0.08

Supplemental Cash Flow Information (Tables)
Schedule of Cash Flow
The following represents supplemental cash flow information for fiscal years 2017, 2016 and 2015 (in thousands):
 
2017
 
2016
 
2015
Noncash investing and financing activities:
 
 
 
 
 
Property, plant and equipment purchases included in accounts payable
$
3,474

 
$
3,499

 
$
7,401

Common stock contributed to 401(k) Plan
—

 
—

 
3,920

Common stock issued in connection with LRM acquisition
—

 
—

 
245,368

Replacement stock options issued in connection with LRM acquisition
—

 
—

 
4,508

Purchase of non-controlling interests in subsidiaries included in accrued expenses
—

 
—

 
6,818

Cash paid (refunded) during the year for:
 
 
 
 
 
Interest
93,839

 
106,475

 
13,057

Income taxes
(8,185
)
 
7,263

 
6,312

Acquisition of noncash assets
—

 
—

 
2,013,604

Liabilities assumed
—

 
—

 
1,340,339

Inventories (Tables)
Schedule of Inventory, Current
Inventories are comprised of the following (in thousands):
 
December 29,
2017
 
December 30,
2016
Raw materials
$
97,615

 
$
100,738

Work-in-process
92,650

 
89,224

Finished goods
37,269

 
35,189

Total
$
227,534

 
$
225,151

Property, Plant and Equipment, Net (Tables)
Property, Plant and Equipment 
comprised of the following (in thousands):
 
December 29, 2017
 
December 30,
2016
Manufacturing machinery and equipment
$
373,558

 
$
332,886

Buildings and building improvements
138,605

 
132,277

Information technology hardware and software
62,204

 
52,467

Leasehold improvements
64,675

 
59,292

Furniture and fixtures
20,555

 
18,989

Land and land improvements
19,577

 
20,046

Construction work in process
28,051

 
32,252

Other
1,146

 
1,062

 
708,371

 
649,271

Accumulated depreciation
(337,996
)
 
(277,229
)
Total
$
370,375

 
$
372,042

Depreciation Expense Disclosure 
Depreciation expense for PP&E was as follows for fiscal years 2017, 2016 and 2015 (in thousands):
 
2017
 
2016
 
2015
Depreciation expense
$
56,084

 
$
52,662

 
$
27,136

Goodwill and Other Intangible Assets, Net (Tables)
Schedule of Goodwill 
The change in the carrying amount of goodwill by reportable segment during fiscal year 2017 was as follows (in thousands):
 
Medical
 
Non-Medical
 
Total
December 30, 2016
$
950,326

 
$
17,000

 
$
967,326

Foreign currency translation
22,912

 
—

 
22,912

December 29, 2017
$
973,238

 
$
17,000

 
$
990,238

Schedule of Finite-Lived Intangible Assets 
ntangible assets are comprised of the following (in thousands):
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Foreign
Currency
Translation
 
Net
Carrying
Amount
December 29, 2017
 
 
 
 
 
 
 
Definite-lived:
 
 
 
 
 
 
 
Purchased technology and patents
$
256,719

 
$
(117,695
)
 
$
2,483

 
$
141,507

Customer lists
759,987

 
(87,555
)
 
16,103

 
688,535

Other
4,534

 
(7,797
)
 
3,326

 
63

Total amortizing intangible assets
$
1,021,240

 
$
(213,047
)
 
$
21,912

 
$
830,105

Indefinite-lived:
 
 
 
 
 
 
 
Trademarks and tradenames
 
 
 
 
 
 
$
90,288

 
 
 
 
 
 
 
 
December 30, 2016
 
 
 
 
 
 
 
Definite-lived:
 
 
 
 
 
 
 
Purchased technology and patents
$
256,719

 
$
(100,719
)
 
$
333

 
$
156,333

Customer lists
759,987

 
(60,474
)
 
(6,269
)
 
693,244

Other
4,534

 
(5,142
)
 
803

 
195

Total amortizing intangible assets
$
1,021,240

 
$
(166,335
)
 
$
(5,133
)
 
$
849,772

Indefinite-lived:
 
 
 
 
 
 
 
Trademarks and tradenames
 
 
 
 
 
 
$
90,288

Schedule of Indefinite-Lived Intangible Assets 
Intangible assets are comprised of the following (in thousands):
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Foreign
Currency
Translation
 
Net
Carrying
Amount
December 29, 2017
 
 
 
 
 
 
 
Definite-lived:
 
 
 
 
 
 
 
Purchased technology and patents
$
256,719

 
$
(117,695
)
 
$
2,483

 
$
141,507

Customer lists
759,987

 
(87,555
)
 
16,103

 
688,535

Other
4,534

 
(7,797
)
 
3,326

 
63

Total amortizing intangible assets
$
1,021,240

 
$
(213,047
)
 
$
21,912

 
$
830,105

Indefinite-lived:
 
 
 
 
 
 
 
Trademarks and tradenames
 
 
 
 
 
 
$
90,288

 
 
 
 
 
 
 
 
December 30, 2016
 
 
 
 
 
 
 
Definite-lived:
 
 
 
 
 
 
 
Purchased technology and patents
$
256,719

 
$
(100,719
)
 
$
333

 
$
156,333

Customer lists
759,987

 
(60,474
)
 
(6,269
)
 
693,244

Other
4,534

 
(5,142
)
 
803

 
195

Total amortizing intangible assets
$
1,021,240

 
$
(166,335
)
 
$
(5,133
)
 
$
849,772

Indefinite-lived:
 
 
 
 
 
 
 
Trademarks and tradenames
 
 
 
 
 
 
$
90,288

Schedule of Finite-Lived Intangible Assets, Amortization Expense 
Aggregate intangible asset amortization expense is comprised of the following for fiscal years 2017, 2016 and 2015 (in thousands):
 
2017
 
2016
 
2015
Cost of sales
$
16,586

 
$
16,769

 
$
7,403

SG&A
27,043

 
20,581

 
9,681

RD&E
545

 
512

 
412

Other Operating Expenses
2,538

 
—

 
—

Total intangible asset amortization expense
$
46,712

 
$
37,862

 
$
17,496

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense 
Estimated future intangible asset amortization expense based upon the carrying value as of December 29, 2017 is as follows (in thousands):
 
2018
 
2019
 
2020
 
2021
 
2022
 
After 2022
Amortization Expense
$
45,316

 
$
45,433

 
$
46,051

 
$
45,176

 
$
43,142

 
$
604,987

Accrued Expenses (Tables)
Schedule of Accrued Liabilities
Accrued expenses are comprised of the following (in thousands):
 
December 29, 2017
 
December 30,
2016
Salaries and benefits
$
32,529

 
$
30,199

Profit sharing and bonuses
19,244

 
3,054

Accrued interest
8,523

 
6,838

Other
21,244

 
32,190

Total
$
81,540

 
$
72,281

Debt (Tables)
Schedule of Debt 
Long-term debt is comprised of the following (in thousands):
 
December 29, 2017
 
December 30,
2016
Senior secured term loan A
$
335,157

 
$
356,250

Senior secured term loan B
873,286

 
1,014,750

9.125% senior notes due 2023
360,000

 
360,000

Revolving line of credit
74,000

 
40,000

Unamortized discount on term loan B and debt issuance costs
(33,278
)
 
(40,837
)
Total debt
1,609,165

 
1,730,163

Current portion of long-term debt
(30,469
)
 
(31,344
)
Total long-term debt
$
1,578,696

 
$
1,698,819

Schedule of Maturities of Long-term Debt 
Contractual maturities of the Company’s debt facilities for the next five years and thereafter, excluding any discounts or premiums, as of December 29, 2017 are as follows (in thousands):
 
2018
 
2019
 
2020
 
2021
 
2022
 
After 2022
Future minimum principal payments
$
30,469

 
37,500

 
111,500

 
229,688

 
873,286

 
360,000

Schedule of Deferred Financing Costs 
The change in deferred debt issuance costs related to the Company’s Revolving Credit Facility is as follows (in thousands):
January 1, 2016
$
4,791

Amortization during the period
(991
)
December 30, 2016
3,800

Amortization during the period
(992
)
December 29, 2017
$
2,808

The change in unamortized discount and debt issuance costs related to the Term Loan Facilities and Senior Notes is as follows (in thousands):
 
Debt Issuance Costs
 
Unamortized Discount on TLB Facility
 
Total
January 1, 2016
$
35,908

 
$
10,039

 
$
45,947

Financing costs incurred
1,177

 
—

 
1,177

Amortization during the period
(4,989
)
 
(1,298
)
 
(6,287
)
December 30, 2016
32,096

 
8,741

 
40,837

Financing costs incurred
2,360

 
—

 
2,360

Write-off of debt issuance costs and unamortized discount
(2,421
)
 
(1,104
)
 
(3,525
)
Amortization during the period
(5,146
)
 
(1,248
)
 
(6,394
)
December 29, 2017
$
26,889

 
$
6,389

 
$
33,278

Schedule of Interest Rate Derivatives 
Information regarding the Company’s outstanding interest rate swap designated as a cash flow hedge as of December 29, 2017 is as follows (dollars in thousands):
Notional Amount
 
Start Date
 
End Date
 
Pay Fixed Rate
 
Receive Current Floating Rate
 
Fair Value
 
Balance Sheet Location
$
200,000

 
Jun-17
 
Jun-20
 
1.1325
%
 
1.5521%
 
$
4,279

 
Other Assets
Benefit Plans (Tables)
Schedule of Projected Benefit Obligation and Fair Value of Plan Assets 
Information relating to the funding position of the Company’s defined benefit plans for fiscal years 2017 and 2016 were as follows (in thousands):
 
2017
 
2016
Change in projected benefit obligation:
 
 
 
Projected benefit obligation at beginning of year
$
8,728

 
$
7,992

Service cost
464

 
431

Interest cost
162

 
174

Plan participants’ contribution
75

 
75

Actuarial (gain) loss
(143
)
 
341

Benefits (paid) transferred in, net
(160
)
 
84

Foreign currency translation
1,027

 
(369
)
Projected benefit obligation at end of year
10,153

 
8,728

Change in fair value of plan assets:
 
 
 
Fair value of plan assets at beginning of year
1,172

 
871

Employer contributions
56

 
36

Plan participants’ contributions
75

 
75

Actual loss on plan assets
—

 
(9
)
Benefits transferred in, net
—

 
224

Foreign currency translation
55

 
(25
)
Fair value of plan assets at end of year
1,358

 
1,172

Projected benefit obligation in excess of plan assets at end of year
$
8,795

 
$
7,556

Defined benefit liability classified as other current liabilities
$
120

 
$
109

Defined benefit liability classified as long-term liabilities
$
8,675

 
$
7,447

Accumulated benefit obligation at end of year
$
8,322

 
$
7,115

Schedule of Defined Benefit Plan Amounts Recognized in Other Comprehensive Income (Loss) 
Amounts recognized in Accumulated Other Comprehensive Income (Loss) for fiscal years 2017 and 2016 are as follows (in thousands):
 
2017
 
2016
Net loss occurring during the year
$
20

 
$
368

Amortization of losses
(63
)
 
(62
)
Prior service cost
1

 
1

Amortization of prior service cost
(11
)
 
(11
)
Pre-tax adjustment (gain) loss
(53
)
 
296

Taxes
(23
)
 
283

Net (gain) loss
$
(76
)
 
$
579

Schedule of Amounts in Accumulated Other Comprehensive Income (Loss) to be Recognized over Next Fiscal Year 
The amortization of amounts in Accumulated Other Comprehensive Income (Loss) expected to be recognized as components of net periodic benefit expense during fiscal year 2018 are as follows (in thousands):
Amortization of net prior service cost
$
11

Amortization of net loss
43

Schedule of Net Benefit Costs 
Net pension cost for fiscal years 2017 and 2016 is comprised of the following (in thousands):
 
2017
 
2016
Service cost
$
464

 
$
431

Interest cost
162

 
174

Expected return on assets
(19
)
 
(18
)
Recognized net actuarial loss
72

 
72

Net pension cost
$
679

 
$
659

Schedule of Assumptions Used 
The weighted-average rates used in the actuarial valuations to determine the net pension cost for fiscal years 2017, 2016 and 2015 were as follows:
 
2017
 
2016
 
2015
Discount rate
1.9%
 
2.2%
 
2.3%
Salary growth
2.9%
 
2.9%
 
3.0%
Expected rate of return on assets
1.5%
 
2.0%
 
2.3%

The weighted-average rates used in the actuarial valuations to determine the projected benefit obligation for fiscal years 2017, 2016 and 2015 were as follows:
 
2017
 
2016
 
2015
Discount rate
2.0%
 
1.9%
 
2.2%
Salary growth
2.9%
 
2.9%
 
2.9%
Expected rate of return on assets
1.3%
 
1.5%
 
2.0%
Schedule of Allocation of Plan Assets 
The following table provides information by level for the defined benefit plan assets that are measured at fair value as of December 29, 2017 and December 30, 2016 (in thousands).
 
Fair Value
 
Quoted
Prices in
Active
Markets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
December 29, 2017
 
 
 
 
 
 
 
Insurance contract
$
1,358

 
$
—

 
$
1,358

 
$
—

December 30, 2016
 
 
 
 
 
 
 
Insurance contract
$
1,172

 
$
—

 
$
1,172

 
$
—


Schedule of Expected Benefit Payments 
Estimated benefit payments over for the next ten years as of December 29, 2017 are as follows (in thousands):
 
2018
 
2019
 
2020
 
2021
 
2022
 
2023-2027
Estimated benefit payments
$
289

 
290

 
244

 
279

 
389

 
2,313

Stock-Based Compensation (Tables)
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs 
The components and classification of stock-based compensation expense for fiscal years 2017, 2016 and 2015 were as follows (in thousands):
 
2017
 
2016
 
2015
Stock options
$
1,716

 
$
2,499

 
$
2,708

RSAs and RSUs (time-based)
5,324

 
1,991

 
2,027

PRSUs
7,640

 
3,918

 
4,641

Total stock-based compensation expense
$
14,680

 
$
8,408

 
$
9,376

 
 
 
 
 
 
Cost of sales
$
1,062

 
$
332

 
$
795

SG&A
10,623

 
6,246

 
7,510

RD&E
739

 
355

 
982

OOE
2,256

 
1,475

 
89

Total stock-based compensation expense
$
14,680

 
$
8,408

 
$
9,376

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions 
The following table includes the weighted average grant date fair value of stock options granted to employees during fiscal years 2017, 2016 and 2015 and the related weighted average assumptions used in the Black-Scholes model:
 
2017
 
2016
 
2015
Weighted average fair value of options granted
$
12.86

 
$
8.52

 
$
12.18

Assumptions:
 
 
 
 
 
Expected term (in years)
4.5

 
4.7

 
4.7

Risk-free interest rate
1.77
%
 
1.49
%
 
1.55
%
Expected volatility
37
%
 
27
%
 
26
%
Expected dividend yield
0
%
 
0
%
 
0
%
Schedule of Share-based Compensation, Stock Options, Activity 
The following table summarizes stock option activity during the fiscal year ended December 29, 2017:
 
Number of
Stock
Options
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value
(in millions)
Outstanding at December 30, 2016
1,739,972

 
$
28.26

 
 
 
 
Granted
125,020

 
38.78

 
 
 
 
Exercised
(804,064
)
 
24.03

 
 
 
 
Forfeited or expired
(129,575
)
 
45.74

 
 
 
 
Outstanding at December 29, 2017
931,353

 
$
30.89

 
6.2
 
$
13.9

Vested and expected to vest at December 29, 2017
931,353

 
$
30.89

 
6.2
 
$
13.9

Exercisable at December 29, 2017
798,311

 
$
30.13

 
5.8
 
$
12.5

Schedule Of Stock Option Exercise Information 
The following table provides certain information relating to the exercise of stock options during fiscal years 2017, 2016 and 2015 (in thousands):
 
2017
 
2016
 
2015
Intrinsic value
$
13,928

 
$
690

 
$
8,231

Cash received
19,324

 
2,821

 
6,583

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity 
The following table summarizes the maximum number of PRSUs which could be earned and related activity during the fiscal year ended December 29, 2017:
 
Performance-
Vested
Restricted Stock Units and Awards
 
Weighted
Average Grant Date
Fair Value
Nonvested at December 30, 2016
356,586

 
$
31.87

Granted
419,112

 
31.62

Forfeited
(305,809
)
 
30.77

Nonvested at December 29, 2017
469,889

 
$
32.37

The following table summarizes time-vested RSA and RSU activity during the fiscal year ended December 29, 2017:
 
Time-Vested
Restricted Stock Units and Awards
 
Weighted
Average Grant Date
Fair Value
Nonvested at December 30, 2016
39,394

 
$
45.51

Granted
309,107

 
34.18

Vested
(148,299
)
 
34.28

Forfeited
(36,771
)
 
38.03

Nonvested at December 29, 2017
163,431

 
$
35.96

Other Operating Expenses (Tables)
Schedule of Other Operating Cost and Expense, by Component 
OOE for fiscal years 2017, 2016 and 2015 is comprised of the following (in thousands):
 
2017
 
2016
 
2015
Consolidation and optimization initiatives

$
13,349

 
$
26,490

 
$
26,393

Acquisition and integration costs
10,870

 
28,316

 
33,449

Asset dispositions, severance and other
7,182

 
6,931

 
6,622

Strategic reorganization and alignment
5,891

 
—

 
—

Total other operating expenses
$
37,292

 
$
61,737

 
$
66,464

Schedule of Restructuring Reserve by Type of Cost 
The change in accrued liabilities related to consolidation and optimization initiatives is as follows (in thousands):
 
Severance and Retention
 
Accelerated
Depreciation/
Asset Write-offs
 
Other
 
Total
December 30, 2016
$
795

 
$
—

 
$
402

 
$
1,197

Restructuring charges
1,781

 
—

 
11,568

 
13,349

Cash payments
(1,268
)
 
—

 
(11,970
)
 
(13,238
)
December 29, 2017
$
1,308

 
$
—

 
$
—

 
$
1,308

Income Taxes (Tables)
Schedule of Income before Income Tax, Domestic and Foreign 
The U.S. and international components of income (loss) before benefit for income taxes for fiscal years 2017, 2016 and 2015 were as follows (in thousands):
 
2017
 
2016
 
2015
U.S.
$
(46,459
)
 
$
(52,446
)
 
$
(42,166
)
International
68,286

 
53,631

 
26,466

Total income (loss) before benefit for income taxes
$
21,827

 
$
1,185

 
$
(15,700
)
Schedule of Components of Income Tax Expense (Benefit) 
The benefit for income taxes for fiscal years 2017, 2016 and 2015 was comprised of the following (in thousands):
 
2017
 
2016
 
2015
Current:
 
 
 
 
 
Federal
$
(1,558
)
 
$
(8,327
)
 
$
(3,753
)
State
(29
)
 
149

 
(367
)
International
15,947

 
10,752

 
6,312

 
14,360

 
2,574

 
2,192

Deferred:
 
 
 
 
 
Federal
(58,924
)
 
(4,952
)
 
(8,144
)
State
(788
)
 
(638
)
 
(880
)
International
500

 
(1,760
)
 
(1,274
)
 
(59,212
)
 
(7,350
)
 
(10,298
)
Total benefit for income taxes
$
(44,852
)
 
$
(4,776
)
 
$
(8,106
)
Schedule of Effective Income Tax Rate Reconciliation 
The benefit for income taxes differs from the U.S. statutory rate for fiscal years 2017, 2016 and 2015 due to the following:
 
2017
 
2016
 
2015
Statutory rate
$
7,639

35.0
 %
 
$
415

35.0
 %
 
$
(5,495
)
35.0
 %
Federal tax credits
(1,896
)
(8.7
)
 
(1,792
)
(151.2
)
 
(1,850
)
11.8

Foreign rate differential
(11,125
)
(50.9
)
 
(7,086
)
(598.0
)
 
(3,180
)
20.2

Uncertain tax positions
3,517

16.1

 
1,724

145.5

 
(531
)
3.4

State taxes, net of federal benefit
(864
)
(4.0
)
 
(1,068
)
(90.1
)
 
(1,490
)
9.5

Non-deductible transaction costs
—

—

 
1,012

85.4

 
4,867

(31.0
)
Valuation allowance
1,030

4.7

 
1,340

113.1

 
626

(4.0
)
Change in tax rates
(56,453
)
(258.6
)
 
(270
)
(22.8
)
 
(91
)
0.6

U.S. Tax Reform - Toll charge on unremitted earnings
14,719

67.4

 
—

—

 
—

—

Change in unremitted earnings assertion

2,340

10.7

 
—

—

 
—

—

Change in tax law (Internal Revenue Code §987)
—

—

 
2,630

221.9

 
—

—

Other
(3,759
)
(17.2
)
 
(1,681
)
(141.8
)
 
(962
)
6.1

Effective tax rate
$
(44,852
)
(205.5
)%
 
$
(4,776
)
(403.0
)%
 
$
(8,106
)
51.6
 %
Schedule of Deferred Tax Assets and Liabilities 
Deferred tax assets (liabilities) consist of the following (in thousands):
 
December 29,
2017
 
December 30,
2016
Net operating loss carryforwards
$
107,005

 
$
154,706

Tax credit carryforwards
28,215

 
24,646

Inventories
4,956

 
7,524

Accrued expenses
3,815

 
5,724

Stock-based compensation
5,531

 
10,614

Other
—

 
936

Gross deferred tax assets
149,522

 
204,150

Less valuation allowance
(36,480
)
 
(35,391
)
Net deferred tax assets
113,042

 
168,759

Property, plant and equipment
(27,547
)
 
(33,069
)
Intangible assets
(219,576
)
 
(337,722
)
Convertible subordinated notes
(806
)
 
(2,577
)
Other
(6,325
)
 
—

Gross deferred tax liabilities
(254,254
)
 
(373,368
)
Net deferred tax liability
$
(141,212
)
 
$
(204,609
)
Presented as follows:
 
 
 
Noncurrent deferred tax asset
$
4,152

 
$
3,970

Noncurrent deferred tax liability
(145,364
)
 
(208,579
)
Net deferred tax liability
$
(141,212
)
 
$
(204,609
)
Summary of Operating Loss and Tax Credit Carryforwards 
As of December 29, 2017, the Company has the following carryforwards available:
Jurisdiction
 
Tax
Attribute
 
Amount
(in millions)
 
Begin to
Expire
U.S. Federal
 
Net operating loss
 
$
415.9

 
2019
U.S. State
 
Net operating loss
 
227.3

 
2018
International
 
Net operating loss
 
37.4

 
2018
U.S. Federal
 
Foreign tax credit
 
17.0

 
2019
U.S. Federal and State
 
R&D tax credit
 
7.2

 
2018
U.S. State
 
Investment tax credit
 
6.3

 
2018
Summary of Income Tax Contingencies 
Below is a summary of changes to the unrecognized tax benefit for fiscal years 2017, 2016 and 2015 (in thousands):
 
2017
 
2016
 
2015
Balance, beginning of year
$
10,561

 
$
9,271

 
$
2,411

Additions based upon tax positions related to the current year
3,833

 
1,450

 
274

Reductions as a result of a lapse of applicable statute of limitations
(510
)
 
—

 
(470
)
Revaluation due to change in tax rate (Tax Reform Act)
(1,782
)
 
—

 
—

Additions (reductions) related to prior period tax returns
(14
)
 
240

 
163

Reductions (additions) relating to business combinations
—

 
(400
)
 
7,443

Reductions relating to settlements with tax authorities
—

 
—

 
(550
)
Balance, end of year
$
12,088

 
$
10,561

 
$
9,271

Commitments and Contingencies (Tables)
Schedule of Product Warranty Liability 
The change in product warranty liability for fiscal years 2017 and 2016 was comprised of the following (in thousands):
 
2017
 
2016
Beginning balance
$
3,911

 
$
3,316

Additions to warranty reserve, net of reversals
3,449

 
3,238

Warranty claims settled
(2,615
)
 
(2,643
)
Ending balance
$
4,745

 
$
3,911

Operating Leases of Lessee Disclosure 
Operating lease expense for fiscal years 2017, 2016 and 2015 was as follows (in thousands):
 
2017
 
2016
 
2015
Operating lease expense
$
17,513

 
$
15,357

 
$
6,516

Schedule of Future Minimum Rental Payments for Operating Leases 
At December 29, 2017, the Company had the following future minimum lease payments under non-cancelable operating leases (in thousands):
 
2018
 
2019
 
2020
 
2021
 
2022
 
After 2022
Future minimum lease payments
$
12,815

 
11,468

 
8,912

 
7,798

 
5,512

 
18,043

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance 
The impact to the Company’s results of operations from its forward contracts for fiscal years 2017, 2016 and 2015 was as follows (in thousands):
 
2017
 
2016
 
2015
Increase in sales
$
1,327

 
$
—

 
$
—

Increase in cost of sales
84

 
3,516

 
1,948

Ineffective portion of change in fair value
—

 
—

 
—

Schedule of Foreign Exchange Contracts, Statement of Financial Position 
Information regarding outstanding foreign currency contracts designated as cash flow hedges as of December 29, 2017 is as follows (dollars in thousands):
Aggregate
Notional
Amount
 
Start
Date
 
End
Date
 
$/Foreign Currency
 
Fair
Value
 
Balance Sheet Location
$
4,625

 
Jan 2018
 
Jun 2018
 
0.0514

Peso
 
$
(127
)
 
Accrued Expenses
30,398

 
Jan 2018
 
Dec 2018
 
0.0507

Peso
 
(879
)
 
Accrued Expenses
30,344

 
Jan 2018
 
Dec 2018
 
1.2089

Euro
 
145

 
Accrued Expenses
Earnings (Loss) Per Share (Tables)
Schedule of Earnings Per Share, Basic and Diluted 
The following table illustrates the calculation of Basic and Diluted EPS for fiscal years 2017, 2016 and 2015 (in thousands, except per share amounts):
 
2017
 
2016
 
2015
Numerator:
 
 
 
 
 
Net income (loss)
$
66,679

 
$
5,961

 
$
(7,594
)
Denominator for basic EPS:
 
 
 
 
 
Weighted average shares outstanding
31,402

 
30,778

 
26,363

Effect of dilutive securities:
 
 
 
 
 
Stock options, restricted stock and restricted stock units
486

 
195

 
—

Denominator for diluted EPS
31,888

 
30,973

 
26,363

Basic EPS
$
2.12

 
$
0.19

 
$
(0.29
)
Diluted EPS
$
2.09

 
$
0.19

 
$
(0.29
)
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share 
The diluted weighted average share calculations do not include the following securities for fiscal years 2017, 2016 and 2015, which are not dilutive to the EPS calculations or the performance criteria have not been met (in thousands):
 
2017
 
2016
 
2015
Time-vested stock options, restricted stock and restricted stock units
676

 
657

 
1,718

Performance-vested stock options and restricted stock units
285

 
357

 
578

Accumulated Other Comprehensive Income (Loss) (Tables)
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Schedule of Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) 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
December 30, 2016
$
(1,475
)
 
$
1,420

 
$
(15,660
)
 
$
(15,715
)
 
$
(285
)
 
$
(16,000
)
Unrealized gain on cash flow hedges
—

 
3,707

 
—

 
3,707

 
(353
)
 
3,354

Realized gain on foreign currency hedges
—

 
(1,243
)
 
—

 
(1,243
)
 
435

 
(808
)
Realized gain on interest rate swap hedges
—

 
(466
)
 
—

 
(466
)
 
163

 
(303
)
Net defined benefit plan adjustments
53

 
—

 
—

 
53

 
23

 
76

Foreign currency translation gain
—

 
—

 
65,860

 
65,860

 
—

 
65,860

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

 
$
50,200

 
$
52,196

 
$
(17
)
 
$
52,179

Schedule of Accumulated Other Comprehensive Income (Loss)
 
Defined
Benefit
Plan
Liability
 
Cash
Flow
Hedges
 
Foreign
Currency
Translation
Adjustment
 
Total
Pre-Tax
Amount
 
Tax
 
Net-of-Tax
Amount
January 1, 2016
$
(1,179
)
 
$
(2,392
)
 
$
3,609

 
$
38

 
$
1,332

 
$
1,370

Unrealized gain on cash flow hedges
—

 
210

 
—

 
210

 
(73
)
 
137

Realized loss on foreign currency hedges
—

 
3,516

 
—

 
3,516

 
(1,231
)
 
2,285

Realized loss on interest rate swap hedges
—

 
86

 
—

 
86

 
(30
)
 
56

Net defined benefit plan adjustments
(296
)
 
—

 
—

 
(296
)
 
(283
)
 
(579
)
Foreign currency translation loss
—

 
—

 
(19,269
)
 
(19,269
)
 
—

 
(19,269
)
December 30, 2016
$
(1,475
)
 
$
1,420

 
$
(15,660
)
 
$
(15,715
)
 
$
(285
)
 
$
(16,000
)
Fair Value Measurements (Tables)
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis 
The following tables provide information regarding assets and liabilities recorded at fair value on a recurring basis (in thousands):

Fair Value
 
Quoted
Prices in
Active
Markets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
December 29, 2017
 
 
 
 
 
 
 
Assets: Interest rate swap (Note 8)
$
4,279

 
$
—

 
$
4,279

 
$
—

Liabilities: Foreign currency contracts (Note 13)
$
861

 
$
—

 
$
861

 
$
—

 
 
 
 
 
 
 
 
December 30, 2016
 
 
 
 
 
 
 
Assets: Interest rate swaps (Note 8)
$
3,482

 
$
—

 
$
3,482

 
$
—

Liabilities: Foreign currency contracts (Note 13)
$
2,063

 
$
—

 
$
2,063

 
$
—

Fair Value Measurements, Nonrecurring 
The following table provides information regarding assets recorded at fair value on a nonrecurring basis (in thousands):
 
Fair Value
 
Quoted
Prices in
Active
Markets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
December 29, 2017
 
 
 
 
 
 
 
Assets: Cost method investment
$
180

 
$
—

 
$
180

 
$
—

Assets: Assets Held for Sale
490

 
—

 
490

 
—

 
 
 
 
 
 
 
 
December 30, 2016
 
 
 
 
 
 
 
Assets: Cost method investment
$
430

 
$
—

 
$
430

 
$
—

Assets: Assets Held for Sale
794

 
—

 
794

 
—

Segment and Geographic Information (Tables)
Schedule of segment sales by product line 
The following table presents sales by product line for fiscal years 2017, 2016 and 2015 (in thousands).
 
2017
 
2016
 
2015
Segment sales by product line:
 
 
 
 
 
Medical
 
 
 
 
 
Cardio & Vascular
$
536,794

 
$
490,857

 
$
131,299

Cardiac & Neuromodulation
428,349

 
439,541

 
361,722

Advanced Surgical, Orthopedics & Portable Medical
439,810

 
414,701

 
247,944

Total Medical
1,404,953

 
1,345,099

 
740,965

Non-Medical
56,968

 
41,679

 
59,449

Total sales
$
1,461,921

 
$
1,386,778

 
$
800,414

Schedule of Revenue by Major Customers by Reporting Segments 
A significant portion of the Company’s sales for fiscal years 2017, 2016 and 2015 and accounts receivable at December 29, 2017 and December 30, 2016 were to four customers as follows:
 
Sales
 
Accounts Receivable
 
2017
 
2016
 
2015
 
December 29,
2017
 
December 30,
2016
Customer A
17%
 
18%
 
17%
 
9%
 
7%
Customer B
17%
 
17%
 
18%
 
18%
 
20%
Customer C
12%
 
12%
 
12%
 
8%
 
4%
Customer D
9%
 
9%
 
5%
 
17%
 
14%
 
55%
 
56%
 
52%
 
52%
 
45%
Schedule of segment depreciation and amortization 
The following table presents depreciation and amortization expense for the Company’s reportable segments for fiscal years 2017, 2016 and 2015 (in thousands).
 
2017
 
2016
 
2015
Segment depreciation and amortization:
 
 
 
 
 
Medical
$
93,927

 
$
83,184

 
$
61,618

Non-Medical
2,675

 
2,346

 
2,503

Total depreciation and amortization included in segment
   income from operations
96,602

 
85,530

 
64,121

Unallocated depreciation and amortization
6,194

 
4,994

 
3,497

Total depreciation and amortization
$
102,796

 
$
90,524

 
$
67,618

Schedule of segment income (loss) from operations 
The following table presents income from operations for the Company’s reportable segments for fiscal years 2017, 2016 and 2015 (in thousands).
 
2017
 
2016
 
2015
Segment income from operations:
 
 
 
 
 
Medical
$
211,002

 
$
185,448

 
$
83,784

Non-Medical
11,335

 
1,513

 
7,289

Total segment income from operations
222,337

 
186,961

 
91,073

Unallocated operating expenses
(82,898
)
 
(78,691
)
 
(77,927
)
Operating income
139,439

 
108,270

 
13,146

Unallocated expenses, net
(117,612
)
 
(107,085
)
 
(28,846
)
Income (loss) before benefit for income taxes
$
21,827

 
$
1,185

 
$
(15,700
)
Schedule of long-lived tangible assets and identifable assets by geographic area 
The following table presents PP&E by geographic area as of December 29, 2017 and December 30, 2016. In these tables, PP&E is aggregated based on the physical location of the tangible long-lived assets (in thousands).
 
December 29,
2017
 
December 30,
2016
Long-lived tangible assets by geographic area:
 
 
 
United States
$
252,767

 
$
258,899

Rest of world
117,608

 
113,143

Total
$
370,375

 
$
372,042

The following table presents total assets for the Company’s reportable segments as of December 29, 2017 and December 30, 2016 (in thousands).
 
December 29,
2017
 
December 30,
2016
Identifiable assets:
 
 
 
Medical
$
2,687,227

 
$
2,638,180

Non-Medical
54,071

 
60,988

Total reportable segments
2,741,298

 
2,699,168

Unallocated assets
107,047

 
133,375

Total assets
$
2,848,345

 
$
2,832,543

Schedule of expenditures for tangible long-lived assets, excluding acquisitions 
The following table presents capital expenditures for the Company’s reportable segments for fiscal years 2017, 2016 and 2015 (in thousands).
 
2017
 
2016
 
2015
Expenditures for tangible long-lived assets, excluding acquisitions:
 
 
 
 
 
Medical
$
37,740

 
$
44,670

 
$
40,931

Non-Medical
661

 
1,451

 
600

Total reportable segments
38,401

 
46,121

 
41,531

Unallocated long-lived tangible assets
8,783

 
8,251

 
6,523

Total expenditures
$
47,184

 
$
54,372

 
$
48,054

Schedule of sales by geographic area 
The following table presents sales by significant country for fiscal years 2017, 2016 and 2015. In these tables, sales are allocated based on where the products are shipped (in thousands).
 
2017
 
2016
 
2015
Sales by geographic area:
 
 
 
 
 
United States
$
862,290

 
$
805,742

 
$
401,380

Non-Domestic locations:
 
 
 
 
 
Puerto Rico
133,752

 
159,243

 
136,898

Rest of world
465,879

 
421,793

 
262,136

Total sales
$
1,461,921

 
$
1,386,778

 
$
800,414

Quarterly Sales and Earnings Data - Unaudited (Tables)
Schedule of Quarterly Financial Information
(in thousands, except per share data)
Fourth Quarter
 
Third Quarter
 
Second Quarter
 
First Quarter
Fiscal Year 2017
 
 
 
 
 
 
 
Sales
$
390,481

 
$
363,308

 
$
362,719

 
$
345,413

Gross profit
104,818

 
98,235

 
99,272

 
91,226

Net income (loss)
54,338

 
13,690

 
2,990

 
(4,339
)
EPS—basic
1.71

 
0.43

 
0.10

 
(0.14
)
EPS—diluted
1.68

 
0.43

 
0.09

 
(0.14
)
 
 
 
 
 
 
 
 
Fiscal Year 2016
 
 
 
 
 
 
 
Sales
$
359,591

 
$
346,567

 
$
348,382

 
$
332,238

Gross profit
92,891

 
97,909

 
96,031

 
91,468

Net income (loss)
7,933

 
11,458

 
(770
)
 
(12,660
)
EPS—basic
0.26

 
0.37

 
(0.03
)
 
(0.41
)
EPS—diluted
0.25

 
0.37

 
(0.03
)
 
(0.41
)
Summary of Significant Accounting Policies (Basis of Presentation) (Details) (USD $)
12 Months Ended
Dec. 29, 2017
customer
Segment
Dec. 30, 2016
Jan. 1, 2016
Accounting Policies [Abstract]
 
 
 
Number of Reportable Segments
2 
 
 
Weeks In Reporting Period
Fifty-two 
Fifty-two 
Fifty-two 
Number of Customers
4 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Cumulative effect adjustment of the adoption of ASU 2016-09
 
$ (510,000)
 
Net foreign currency transaction gains (losses)
(9,700,000)
4,900,000 
1,300,000 
Retained Earnings [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Cumulative effect adjustment of the adoption of ASU 2016-09
 
$ 302,000 
 
Stock Options [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Contractual life
10 years 
 
 
Award vesting period
3 years 
 
 
Restricted Stock And Unit Awards [Member] |
Director [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Award vesting period
1 year 
 
 
Minimum [Member] |
Restricted Stock And Unit Awards [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Award vesting period
3 years 
 
 
Minimum [Member] |
Performance Based Restricted Stock And Restricted Stock Units [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Award vesting period
2 years 
 
 
Minimum [Member] |
Patents [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Intangible Asset, Useful Life
5 years 
 
 
Minimum [Member] |
Customer Lists [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Intangible Asset, Useful Life
7 years 
 
 
Minimum [Member] |
Other Intangible Assets [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Intangible Asset, Useful Life
1 year 
 
 
Maximum [Member] |
Restricted Stock And Unit Awards [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Award vesting period
4 years 
 
 
Maximum [Member] |
Performance Based Restricted Stock And Restricted Stock Units [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Award vesting period
3 years 
 
 
Maximum [Member] |
Patents [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Intangible Asset, Useful Life
15 years 
 
 
Maximum [Member] |
Customer Lists [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Intangible Asset, Useful Life
20 years 
 
 
Maximum [Member] |
Other Intangible Assets [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Intangible Asset, Useful Life
10 years 
 
 
Building and Building Improvements [Member] |
Minimum [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Property, Plant and Equipment, Useful Life
12 years 
 
 
Building and Building Improvements [Member] |
Maximum [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Property, Plant and Equipment, Useful Life
30 years 
 
 
Machinery and Equipment [Member] |
Minimum [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Property, Plant and Equipment, Useful Life
3 years 
 
 
Machinery and Equipment [Member] |
Maximum [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Property, Plant and Equipment, Useful Life
10 years 
 
 
Office Equipment [Member] |
Minimum [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Property, Plant and Equipment, Useful Life
3 years 
 
 
Office Equipment [Member] |
Maximum [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Property, Plant and Equipment, Useful Life
10 years 
 
 
Divestiture and Acquisition (Spin-off of Nuvectra Corporation) (Details) (Spinoff [Member], Nuvectra [Member], USD $)
0 Months Ended 3 Months Ended 12 Months Ended
Mar. 14, 2016
Apr. 1, 2016
Dec. 30, 2016
Jan. 1, 2016
Mar. 14, 2016
Spinoff [Member] |
Nuvectra [Member]
 
 
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
 
Stock conversion ratio
3 
 
 
 
 
Cash capital contribution
 
$ 75,000,000 
 
 
 
Assets divested
 
 
 
 
 
Cash and cash equivalents
 
 
 
 
76,256,000 
Other current assets
 
 
 
 
977,000 
Property, plant and equipment, net
 
 
 
 
4,407,000 
Amortizing intangible assets, net
 
 
 
 
1,931,000 
Goodwill
 
 
 
 
40,830,000 
Deferred income taxes
 
 
 
 
6,446,000 
Total assets divested
 
 
 
 
130,847,000 
Liabilities transferred
 
 
 
 
 
Current liabilities
 
 
 
 
2,119,000 
Net assets divested
 
 
 
 
128,728,000 
Pre-tax loss
 
 
$ 5,200,000 
$ 24,400,000 
 
Divestiture and Acquisition (LRM - Narrative) (Details) (Lake Region Medical [Member], USD $)
0 Months Ended 12 Months Ended
Oct. 27, 2015
Dec. 30, 2016
Jan. 1, 2016
Oct. 27, 2015
Business Acquisition [Line Items]
 
 
 
 
Effective date of acquisition
Oct. 27, 2015 
 
 
 
Name of acquired entity
LRM 
 
 
 
Total purchase consideration
$ 1,770,000,000 
 
 
 
Description of acquired entity
LRM specialized in the design, development, and manufacturing of products across the medical component and device spectrum primarily serving the cardio, vascular and advanced surgical markets.  
 
 
 
Repayment of debt
1,000,000,000 
 
 
 
Increase to current liabilities
 
1,500,000 
 
 
Reductions to goodwill
 
1,100,000 
 
 
Reductions to deferred tax liabilities
 
2,600,000 
 
 
Increase in inventory
 
 
 
23,000,000 
Total revenue included from the acquired entity
 
802,400,000 
138,600,000 
 
Total net income (loss) included from the acquired entity
 
32,800,000 
(17,400,000)
 
Technology [Member]
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
Amortizing intangible assets
160,000,000 
 
 
 
Intangible Asset, Useful Life
7 years 
 
 
 
Customer Lists [Member]
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
Amortizing intangible assets
689,000,000 
 
 
 
Intangible Asset, Useful Life
14 years 
 
 
 
Trademarks and Trade Names [Member]
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
Indefinite-lived intangible assets acquired
$ 70,000,000 
 
 
 
Divestiture and Acquisition (LRM - Summary of Purchase Price Allocation) (Details) (Lake Region Medical [Member], USD $)
In Thousands, unless otherwise specified
0 Months Ended
Oct. 27, 2015
Business Acquisition [Line Items]
 
Cash
$ 478,490 
Total purchase consideration
728,366 
Stock Options [Member]
 
Business Acquisition [Line Items]
 
Fair value of common stock and replacement stock options
4,508 
Common Stock [Member]
 
Business Acquisition [Line Items]
 
Fair value of common stock and replacement stock options
$ 245,368 
Divestiture and Acquisition (LRM - Summary of Assets Acquired and Liabilities Assumed) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2017
Dec. 30, 2016
Oct. 27, 2015
Lake Region Medical [Member]
Assets acquired
 
 
 
Current assets
 
 
$ 269,815 
Property, plant and equipment
 
 
216,473 
Amortizing intangible assets
 
 
849,000 
Indefinite-lived intangible assets
 
 
70,000 
Goodwill
990,238 
967,326 
660,670 
Other non-current assets
 
 
1,629 
Total assets acquired
 
 
2,067,587 
Liabilities assumed
 
 
 
Current liabilities
 
 
103,986 
Debt assumed
 
 
1,044,675 
Other long-term liabilities
 
 
190,560 
Total liabilities assumed
 
 
1,339,221 
Net assets acquired
 
 
$ 728,366 
Divestiture and Acquisition (LRM - Summary of Pro Forma Information) (Details) (Lake Region Medical [Member], USD $)
12 Months Ended
Jan. 1, 2016
Lake Region Medical [Member]
 
Business Acquisition [Line Items]
 
Sales
$ 1,445,689,000 
Net income (loss)
2,405,000 
Basic earnings per share (in dollars per share)
$ 0.08 
Diluted earnings per share (in dollars per share)
$ 0.08 
Acquisition-related costs excluded from earnings
32,300,000 
Debt related costs excluded from earnings
9,500,000 
Nonrecurring amortization expense excluded from earnings
$ 23,000,000 
Supplemental Cash Flow Information (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Noncash investing and financing activities:
 
 
 
Property, plant and equipment purchases included in accounts payable
$ 3,474 
$ 3,499 
$ 7,401 
Common stock contributed to 401(k) Plan
0 
0 
3,920 
Common stock issued in connection with LRM acquisition
0 
0 
245,368 
Replacement stock options issued in connection with LRM acquisition
0 
0 
4,508 
Purchase of non-controlling interests in subsidiaries included in accrued expenses
0 
0 
6,818 
Cash paid (refunded) during the year for:
 
 
 
Interest
93,839 
106,475 
13,057 
Income taxes
(8,185)
7,263 
6,312 
Acquisition of noncash assets
0 
0 
2,013,604 
Liabilities assumed
$ 0 
$ 0 
$ 1,340,339 
Inventories (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2017
Dec. 30, 2016
Inventory Disclosure [Abstract]
 
 
Raw materials
$ 97,615 
$ 100,738 
Work-in-process
92,650 
89,224 
Finished goods
37,269 
35,189 
Inventories
$ 227,534 
$ 225,151 
Property, Plant and Equipment, Net (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2017
Dec. 30, 2016
Property, Plant and Equipment [Line Items]
 
 
Property, Plant and Equipment, Gross
$ 708,371 
$ 649,271 
Accumulated depreciation
(337,996)
(277,229)
Total
370,375 
372,042 
Machinery and Equipment [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, Plant and Equipment, Gross
373,558 
332,886 
Building and Building Improvements [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, Plant and Equipment, Gross
138,605 
132,277 
Information Technology Hardware and Software [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, Plant and Equipment, Gross
62,204 
52,467 
Leasehold Improvements [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, Plant and Equipment, Gross
64,675 
59,292 
Furniture and Fixtures [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, Plant and Equipment, Gross
20,555 
18,989 
Land and Land Improvements [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, Plant and Equipment, Gross
19,577 
20,046 
Construction Work in Progress [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, Plant and Equipment, Gross
28,051 
32,252 
Other [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, Plant and Equipment, Gross
$ 1,146 
$ 1,062 
Property, Plant and Equipment, Net (Depreciation Expense) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Property, Plant and Equipment [Abstract]
 
 
 
Depreciation
$ 56,084 
$ 52,662 
$ 27,136 
Goodwill and Other Intangible Assets, Nets (Schedule of Goodwill) (Details) (USD $)
12 Months Ended
Dec. 29, 2017
Goodwill [Roll Forward]
 
Beginning balance
$ 967,326,000 
Foreign currency translation
22,912,000 
Ending balance
990,238,000 
Medical Segment [Member]
 
Goodwill [Roll Forward]
 
Beginning balance
950,326,000 
Foreign currency translation
22,912,000 
Ending balance
973,238,000 
Accumulated impairment loss
0 
Non-Medical Segment [Member]
 
Goodwill [Roll Forward]
 
Beginning balance
17,000,000 
Foreign currency translation
0 
Ending balance
17,000,000 
Accumulated impairment loss
$ 0 
Goodwill and Other Intangible Assets, Net (Amortizing Intangible Assets) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2017
Dec. 30, 2016
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
$ 1,021,240 
$ 1,021,240 
Accumulated Amortization
(213,047)
(166,335)
Foreign Currency Translation
21,912 
(5,133)
Net Carrying Amount
830,105 
849,772 
Trademarks and Trade Names [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Indefinite-Lived Intangible Assets (Excluding Goodwill)
90,288 
90,288 
Purchased Technology And Patents [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
256,719 
256,719 
Accumulated Amortization
(117,695)
(100,719)
Foreign Currency Translation
2,483 
333 
Net Carrying Amount
141,507 
156,333 
Customer Lists [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
759,987 
759,987 
Accumulated Amortization
(87,555)
(60,474)
Foreign Currency Translation
16,103 
(6,269)
Net Carrying Amount
688,535 
693,244 
Other Intangible Assets [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
4,534 
4,534 
Accumulated Amortization
(7,797)
(5,142)
Foreign Currency Translation
3,326 
803 
Net Carrying Amount
$ 63 
$ 195 
Goodwill and Other Intangible Assets, Net (Amortization Expense by categories) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Finite-Lived Intangible Assets [Line Items]
 
 
 
Amortization of Intangible Assets
$ 46,712 
$ 37,862 
$ 17,496 
Cost of Sales [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Amortization of Intangible Assets
16,586 
16,769 
7,403 
Selling, General and Administrative Expenses [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Amortization of Intangible Assets
27,043 
20,581 
9,681 
Research and Development Expense [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Amortization of Intangible Assets
545 
512 
412 
Other Operating Expense [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Amortization of Intangible Assets
$ 2,538 
$ 0 
$ 0 
Goodwill and Other Intangible Assets, Net (Future Amortization Expense) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
 
2018
$ 45,316 
2019
45,433 
2020
46,051 
2021
45,176 
2022
43,142 
After 2022
$ 604,987 
Accrued Expenses (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2017
Dec. 30, 2016
Accounts Payable and Accrued Liabilities [Abstract]
 
 
Salaries and benefits
$ 32,529 
$ 30,199 
Profit sharing and bonuses
19,244 
3,054 
Accrued interest
8,523 
6,838 
Other
21,244 
32,190 
Total
$ 81,540 
$ 72,281 
Debt (Schedule of Long-Term Debt) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2017
Dec. 30, 2016
Oct. 27, 2015
Debt Instrument [Line Items]
 
 
 
Unamortized discount on term loan B and debt issuance costs
$ (33,278)
$ (40,837)
 
Total debt
1,609,165 
1,730,163 
 
Current portion of long-term debt
(30,469)
(31,344)
 
Long-term debt
1,578,696 
1,698,819 
 
Loans Payable [Member] |
Secured Debt [Member] |
Term Loan A (TLA) Facility [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Long-term debt, gross
335,157 
356,250 
 
Loans Payable [Member] |
Secured Debt [Member] |
Term Loan B (TLB) Facility [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Long-term debt, gross
873,286 
1,014,750 
 
Senior Notes [Member] |
9.125% Senior Notes due 2023 [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Stated interest rate
9.125% 
 
9.125% 
Long-term debt, gross
360,000 
360,000 
 
Revolving Credit Facility [Member] |
Secured Debt [Member] |
New Revolving Credit Facility 2015 [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Long-term debt, gross
$ 74,000 
$ 40,000 
 
Debt (Senior Secured Credit Facilities) (Details) (USD $)
0 Months Ended
Nov. 30, 2017
Oct. 27, 2015
Dec. 29, 2017
Oct. 27, 2015
Debt Instrument [Line Items]
 
 
 
 
Weighted average interest rate
 
 
5.67% 
 
Secured Debt [Member] |
Senior Secured Credit Facilities [Member] |
Maximum [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
First lien net leverage ratio
 
4.25 
 
 
Secured Debt [Member] |
Revolving Credit Facility [Member] |
New Revolving Credit Facility 2015 [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Maximum borrowing capacity
 
 
 
$ 200,000,000 
Debt maturity date
 
Oct. 27, 2020 
 
 
Outstanding borrowings
 
 
74,000,000 
 
Remaining borrowing capacity
 
 
116,700,000 
 
Outstanding standby letters of credit
 
 
9,300,000 
 
Weighted average interest rate
 
 
4.73% 
 
Secured Debt [Member] |
Revolving Credit Facility [Member] |
New Revolving Credit Facility 2015 [Member] |
Minimum [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Unused capacity commitment fee
 
0.175% 
 
 
Secured Debt [Member] |
Revolving Credit Facility [Member] |
New Revolving Credit Facility 2015 [Member] |
Maximum [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Unused capacity commitment fee
 
0.25% 
 
 
Secured Debt [Member] |
Revolving Credit Facility [Member] |
New Revolving Credit Facility 2015 [Member] |
Prime Rate [Member] |
Minimum [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Spread on variable rate
 
0.75% 
 
 
Secured Debt [Member] |
Revolving Credit Facility [Member] |
New Revolving Credit Facility 2015 [Member] |
Prime Rate [Member] |
Maximum [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Spread on variable rate
 
2.25% 
 
 
Secured Debt [Member] |
Revolving Credit Facility [Member] |
New Revolving Credit Facility 2015 [Member] |
London Interbank Offered Rate (LIBOR) [Member] |
Minimum [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Spread on variable rate
 
1.75% 
 
 
Secured Debt [Member] |
Revolving Credit Facility [Member] |
New Revolving Credit Facility 2015 [Member] |
London Interbank Offered Rate (LIBOR) [Member] |
Maximum [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Spread on variable rate
 
3.25% 
 
 
Secured Debt [Member] |
Loans Payable [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Number of additional term loan facilities that may be added (one or more)
 
1 
 
 
Secured Debt [Member] |
Loans Payable [Member] |
Maximum [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
First lien net leverage ratio
 
4.25 
 
 
Secured Debt [Member] |
Loans Payable [Member] |
Term Loan A (TLA) Facility [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Principle amount
 
 
 
375,000,000 
Debt maturity date
 
Oct. 27, 2021 
 
 
Weighted average interest rate
 
 
4.82% 
 
Maximum leverage ratio
 
6.25 
 
 
Adjusted EBITDA to interest expense ratio
 
2.50 
 
 
Secured Debt [Member] |
Loans Payable [Member] |
Term Loan A (TLA) Facility [Member] |
Prime Rate [Member] |
Minimum [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Spread on variable rate
 
0.75% 
 
 
Secured Debt [Member] |
Loans Payable [Member] |
Term Loan A (TLA) Facility [Member] |
Prime Rate [Member] |
Maximum [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Spread on variable rate
 
2.25% 
 
 
Secured Debt [Member] |
Loans Payable [Member] |
Term Loan A (TLA) Facility [Member] |
London Interbank Offered Rate (LIBOR) [Member] |
Minimum [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Spread on variable rate
 
1.75% 
 
 
Secured Debt [Member] |
Loans Payable [Member] |
Term Loan A (TLA) Facility [Member] |
London Interbank Offered Rate (LIBOR) [Member] |
Maximum [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Spread on variable rate
 
3.25% 
 
 
Secured Debt [Member] |
Loans Payable [Member] |
Term Loan B (TLB) Facility [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Principle amount
 
 
 
1,025,000,000 
Discount percent
 
1.00% 
 
 
Prepayment fee
1.00% 
 
 
 
Prepayment period
6 months 
 
 
 
Debt maturity date
 
Oct. 27, 2022 
 
 
Weighted average interest rate
 
 
4.66% 
 
Debt fair value
 
 
883,000,000 
 
Secured Debt [Member] |
Loans Payable [Member] |
Term Loan B (TLB) Facility [Member] |
Prime Rate [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Spread on variable rate
 
2.25% 
 
 
Secured Debt [Member] |
Loans Payable [Member] |
Term Loan B (TLB) Facility [Member] |
London Interbank Offered Rate (LIBOR) [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Reduction to interest rate margins
1.00% 
 
 
 
Spread on variable rate
 
3.25% 
 
 
Interest rate floor
 
1.00% 
 
 
Secured Debt [Member] |
Loans Payable [Member] |
Term Loan B (TLB) Facility [Member] |
Base Rate [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Reduction to interest rate margins
1.00% 
 
 
 
Secured Debt [Member] |
Swingline Loans [Member] |
New Revolving Credit Facility 2015 [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Maximum borrowing capacity
 
15,000,000 
 
15,000,000 
Secured Debt [Member] |
Standby Letters of Credit [Member] |
New Revolving Credit Facility 2015 [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Maximum borrowing capacity
 
$ 25,000,000 
 
$ 25,000,000 
Debt (Senior Notes) (Details) (USD $)
0 Months Ended
Oct. 27, 2015
Dec. 29, 2017
Oct. 27, 2015
Debt Instrument [Line Items]
 
 
 
Weighted average interest rate
 
5.67% 
 
Senior Notes [Member] |
9.125% Senior Notes due 2023 [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Principle amount
 
 
$ 360,000,000 
Stated interest rate
 
9.125% 
9.125% 
Debt maturity date
Nov. 01, 2023 
 
 
Debt fair value
 
392,000,000 
 
Senior Notes [Member] |
9.125% Senior Notes due 2023 [Member] |
Debt Instrument, Redemption, Period One [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Debt redemption price prior to make-whole premium
100.00% 
 
 
Debt redemption percentage of principle amount redeemed if using proceeds from certain equity offerings
40.00% 
 
 
Debt redemption price if using proceeds from certain equity offerings
109.125% 
 
 
Secured Debt [Member] |
Loans Payable [Member] |
Term Loan A (TLA) Facility [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Principle amount
 
 
$ 375,000,000 
Debt maturity date
Oct. 27, 2021 
 
 
Weighted average interest rate
 
4.82% 
 
Secured Debt [Member] |
Maximum [Member] |
Prime Rate [Member] |
Loans Payable [Member] |
Term Loan A (TLA) Facility [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Spread on variable rate
2.25% 
 
 
Secured Debt [Member] |
Maximum [Member] |
London Interbank Offered Rate (LIBOR) [Member] |
Loans Payable [Member] |
Term Loan A (TLA) Facility [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Spread on variable rate
3.25% 
 
 
Secured Debt [Member] |
Minimum [Member] |
Prime Rate [Member] |
Loans Payable [Member] |
Term Loan A (TLA) Facility [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Spread on variable rate
0.75% 
 
 
Secured Debt [Member] |
Minimum [Member] |
London Interbank Offered Rate (LIBOR) [Member] |
Loans Payable [Member] |
Term Loan A (TLA) Facility [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Spread on variable rate
1.75% 
 
 
Debt (Long-term Debt Maturity Schedule) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2017
Long-term Debt, Fiscal Year Maturity [Abstract]
 
2018
$ 30,469 
2019
37,500 
2020
111,500 
2021
229,688 
2022
873,286 
After 2022
$ 360,000 
Debt (Debt Issuance Costs and Discounts) (Details) (USD $)
12 Months Ended
Jan. 1, 2016
Interest Expense [Member]
Dec. 29, 2017
Term Loan B (TLB) Facility [Member]
Debt Instrument [Line Items]
 
 
Losses from of extinguishment of debt
 
$ 3,500,000 
Write-off of debt issuance costs
$ 1,600,000 
 
Debt (Deferred Financing Fees) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Deferred Finance Costs [Roll Forward]
 
 
 
Total, Beginning Balance
$ (40,837)
 
 
Total, Amortization during the period
(10,911)
(7,278)
(11,320)
Total, Ending Balance
(33,278)
(40,837)
 
Revolving Credit Facility [Member]
 
 
 
Deferred Finance Costs [Roll Forward]
 
 
 
Debt issuance costs, Beginning Balance
3,800 
4,791 
 
Debt issuance costs, Amortization during the period
(992)
(991)
 
Debt issuance costs, Ending Balance
2,808 
3,800 
 
Term Loan And Senior Notes [Member]
 
 
 
Deferred Finance Costs [Roll Forward]
 
 
 
Debt issuance costs, Beginning Balance
32,096 
35,908 
 
Debt issuance costs, Financing costs incurred
2,360 
1,177 
 
Debt issuance costs, Write off of debt issuance costs and unamortized discount
(2,421)
 
 
Debt issuance costs, Amortization during the period
(5,146)
(4,989)
 
Debt issuance costs, Ending Balance
26,889 
32,096 
 
Total, Beginning Balance
40,837 
45,947 
 
Total, Financing costs incurred
2,360 
1,177 
 
Total, Write-off during the period
(3,525)
 
 
Total, Amortization during the period
(6,394)
(6,287)
 
Total, Ending Balance
33,278 
40,837 
 
Term Loan B (TLB) Facility [Member]
 
 
 
Deferred Finance Costs [Roll Forward]
 
 
 
Unamortized discount on TLB Facility, Beginning Balance
8,741 
10,039 
 
Unamortized discount on TLB Facility, Financing costs incurred
0 
0 
 
Unamortized discount on TLB Facility, Write-off during the period
(1,104)
 
 
Unamortized discount on TLB Facility, Amortization during the period
(1,248)
(1,298)
 
Unamortized discount on TLB Facility, Ending Balance
$ 6,389 
$ 8,741 
 
Debt (Interest Rate Swaps) (Details) (USD $)
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Sep. 29, 2017
Derivative [Line Items]
 
 
 
 
Interest expense
$ 106,460,000 
$ 111,270,000 
$ 33,513,000 
 
Additional interest expense incurred for termination of interest rate swap agreements
 
 
2,800,000 
 
Interest Rate Swap 4 [Member]
 
 
 
 
Derivative [Line Items]
 
 
 
 
Interest Rate Swap Term
1 year 
 
 
 
Notional Amount
250,000,000 
 
 
 
Interest Rate Swap 1 [Member]
 
 
 
 
Derivative [Line Items]
 
 
 
 
Interest Rate Swap Term
3 years 
 
 
 
Notional Amount
200,000,000 
 
 
 
Pay Fixed Rate
1.1325% 
 
 
 
Receive Current Floating Rate
1.5521% 
 
 
 
Fair Value
4,279,000 
 
 
 
Interest Rate Swap [Member]
 
 
 
 
Derivative [Line Items]
 
 
 
 
Portion of the change in fair value considered ineffective
0 
0 
0 
 
Interest expense
500,000 
100,000 
3,500,000 
 
Gain expected to be reclassified into earnings within the next twelve months
 
 
 
$ 1,300,000 
Benefit Plans (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Defined Contribution And Benefit Plan Disclosure [Line Items]
 
 
 
Net costs recognized
$ 8.1 
$ 6.4 
$ 3.1 
Defined Benefit Plan, Basis Points
0.50% 
 
 
Maximum [Member]
 
 
 
Defined Contribution And Benefit Plan Disclosure [Line Items]
 
 
 
Employer matching contribution, percentage
50.00% 
 
 
Employer matching contribution, percentage of employees' gross pay
6.00% 
 
 
Legacy Greatbatch 401(k) Plan [Member] |
Defined Contribution Plan Cash [Member]
 
 
 
Defined Contribution And Benefit Plan Disclosure [Line Items]
 
 
 
Employer matching contribution, percentage of employees' gross pay
 
35.00% 
35.00% 
Maximum contribution per employee, percent
6.00% 
 
 
Lakes Region Medical 401(k) Plan [Member] |
Lake Region Medical 401(k) Plan [Member]
 
 
 
Defined Contribution And Benefit Plan Disclosure [Line Items]
 
 
 
Employer matching contribution, percentage
 
50.00% 
50.00% 
Benefit Plans (Change in Projected Benefit Obligation) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
 
 
Projected benefit obligation at beginning of year
$ 8,728 
$ 7,992 
Service cost
464 
431 
Interest cost
162 
174 
Plan participants’ contribution
75 
75 
Actuarial (gain) loss
(143)
341 
Benefits (paid) transferred in, net
(160)
84 
Foreign currency translation
1,027 
(369)
Projected benefit obligation at end of year
$ 10,153 
$ 8,728 
Benefit Plans (Change in Fair Value of Plan Assets) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
 
 
Fair value of plan assets at beginning of year
$ 1,172 
$ 871 
Employer contributions (refund)
56 
36 
Plan participants’ contributions
75 
75 
Actual loss on plan assets
0 
(9)
Benefits transferred in, net
0 
224 
Foreign currency translation
55 
(25)
Fair value of plan assets at end of year
1,358 
1,172 
Projected benefit obligation in excess of plan assets at end of year
8,795 
7,556 
Defined benefit liability classified as other current liabilities
120 
109 
Defined benefit liability classified as long-term liabilities
8,675 
7,447 
Accumulated benefit obligation at end of year
$ 8,322 
$ 7,115 
Benefit Plans (Amount Recognized in Accumulated Other Comprehensive Income) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Defined Benefit Plan [Abstract]
 
 
 
Net loss occurring during the year
$ 20 
$ 368 
 
Amortization of losses
(63)
(62)
 
Prior service cost
1 
1 
 
Amortization of prior service cost
(11)
(11)
 
Pre-tax adjustment (gain) loss
(53)
296 
 
Taxes
(23)
283 
 
Net (gain) loss
$ (76)
$ 579 
$ 20 
Benefit Plans (Amortization to be Recognized in Accumulated Other Comprehensive Income) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2017
Defined Benefit Plan [Abstract]
 
Amortization of net prior service credit
$ 11 
Amortization of net loss
$ 43 
Benefit Plans (Net Pension Costs) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Defined Benefit Plan [Abstract]
 
 
Service cost
$ 464 
$ 431 
Interest cost
162 
174 
Expected return on assets
(19)
(18)
Recognized net actuarial loss
72 
72 
Net pension cost
$ 679 
$ 659 
Benefit Plans (Actuarial Valuations) (Details)
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
 
 
 
Discount rate
1.90% 
2.20% 
2.30% 
Salary growth
2.90% 
2.90% 
3.00% 
Expected rate of return on assets
1.50% 
2.00% 
2.30% 
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract]
 
 
 
Discount rate
2.00% 
1.90% 
2.20% 
Salary growth
2.90% 
2.90% 
2.90% 
Expected rate of return on assets
1.30% 
1.50% 
2.00% 
Benefit Plans (Plan Assets Components) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
$ 1,358 
$ 1,172 
$ 871 
Insurance Contract [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
1,358 
1,172 
 
Insurance Contract [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
0 
0 
 
Insurance Contract [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
1,358 
1,172 
 
Insurance Contract [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
$ 0 
$ 0 
 
Stock-Based Compensation (Narratives) (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended
Mar. 31, 2017
Apr. 1, 2016
Dec. 29, 2017
Restricted Stock and Restricted Stock Units [Member]
Dec. 30, 2016
Restricted Stock and Restricted Stock Units [Member]
Jan. 1, 2016
Restricted Stock and Restricted Stock Units [Member]
Dec. 29, 2017
Stock Options [Member]
Dec. 30, 2016
Stock Options [Member]
Jan. 1, 2016
Stock Options [Member]
Sep. 29, 2017
Performance Based Restricted Stock And Restricted Stock Units [Member]
Dec. 29, 2017
Performance Based Restricted Stock And Restricted Stock Units [Member]
Dec. 30, 2016
Performance Based Restricted Stock And Restricted Stock Units [Member]
Jan. 1, 2016
Performance Based Restricted Stock And Restricted Stock Units [Member]
Dec. 29, 2017
2009 Plan [Member]
Dec. 29, 2017
2009 Plan [Member]
Restricted Stock and Restricted Stock Units [Member]
Dec. 29, 2017
2011 Plan [Member]
Dec. 29, 2017
2016 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares authorized
 
 
 
 
 
 
 
 
 
 
 
 
1,350,000 
200,000 
1,350,000 
1,450,000 
Number of shares available for grant
 
 
 
 
 
 
 
 
 
 
 
 
78,747 
500 
9,142 
917,567 
Accelerated compensation cost
$ 2.2 
$ 0.5 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation expense tax benefit
 
 
1.9 
2.3 
5.6 
 
 
 
 
 
 
 
 
 
 
 
Closing stock price
 
 
 
 
 
$ 45.30 
 
 
 
 
 
 
 
 
 
 
Unrecognized compensation cost related to non-vested stock options
 
 
 
 
 
1.2 
 
 
 
 
 
 
 
 
 
 
Period for recognition
 
 
2 years 
 
 
1 year 10 months 
 
 
 
1 year 4 months 24 days 
 
 
 
 
 
 
Total unrecognized compensation cost
 
 
5.1 
 
 
 
 
 
 
2.6 
 
 
 
 
 
 
Fair value of shares vested
 
 
$ 6.4 
$ 1.3 
$ 3.0 
 
 
 
 
 
$ 10.5 
$ 13.1 
 
 
 
 
Granted (in dollars per share)
 
 
$ 34.18 
$ 47.95 
$ 49.84 
 
 
 
 
$ 31.62 
$ 30.83 
$ 32.92 
 
 
 
 
Expected term (in years)
 
 
 
 
 
4 years 6 months 
4 years 7 months 30 days 
4 years 7 months 30 days 
1 year 10 months 4 days 
 
 
 
 
 
 
 
Risk-free interest rate
 
 
 
 
 
1.77% 
1.49% 
1.55% 
1.14% 
 
 
 
 
 
 
 
Expected dividend yield
 
 
 
 
 
0.00% 
0.00% 
0.00% 
0.00% 
 
 
 
 
 
 
 
Expected volatility
 
 
 
 
 
37.00% 
27.00% 
26.00% 
48.00% 
 
 
 
 
 
 
 
Stock-Based Compensation (Components of Stock-Based Compensation Expense) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
$ 14,680 
$ 8,408 
$ 9,376 
Cost of Sales [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
1,062 
332 
795 
Selling, General and Administrative Expenses [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
10,623 
6,246 
7,510 
Research and Development Expense [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
739 
355 
982 
Other Operating Expenses, net [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
2,256 
1,475 
89 
Stock Options [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
1,716 
2,499 
2,708 
Restricted Stock And Unit Awards [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
5,324 
1,991 
2,027 
Performance Based Restricted Stock And Restricted Stock Units [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
$ 7,640 
$ 3,918 
$ 4,641 
Stock-Based Compensation (Weighted-Average Fair Value and Assumptions) (Details) (Stock Options [Member], USD $)
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Stock Options [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Weighted average fair value of options granted
$ 12.86 
$ 8.52 
$ 12.18 
Expected term (in years)
4 years 6 months 
4 years 7 months 30 days 
4 years 7 months 30 days 
Risk-free interest rate
1.77% 
1.49% 
1.55% 
Expected volatility
37.00% 
27.00% 
26.00% 
Expected dividend yield
0.00% 
0.00% 
0.00% 
Stock-Based Compensation (Stock Option Activity) (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Number of Stock Options
 
Beginning balance (in shares)
1,739,972 
Granted (in shares)
125,020 
Exercised (in shares)
(804,064)
Forfeited or expired (in shares)
(129,575)
Ending balance (in shares)
931,353 
Vested and expected to vest (in shares)
931,353 
Exercisable (in shares)
798,311 
Weighted Average Exercise Price
 
Beginning balance (in dollars per share)
$ 28.26 
Granted (in dollars per share)
$ 38.78 
Exercised (in dollars per share)
$ 24.03 
Forfeited or expired (in dollars per share)
$ 45.74 
Ending balance (in dollars per share)
$ 30.89 
Vested and expected to vest (in dollars per share)
$ 30.89 
Exercisable (in dollars per share)
$ 30.13 
Weighted Average Remaining Contractual Term and Aggregate Intrinsic Value
 
Outstanding, weighted average remaining contractual term
6 years 2 months 
Vested and expected to vest, weighted average remaining contractual term
6 years 2 months 
Exercisable, weighted average remaining contractual term
5 years 10 months 
Outstanding, aggregate intrinsic value
$ 13.9 
Vested and expected to vest, aggregate intrinsic value
13.9 
Exercisable, aggregate intrinsic value
$ 12.5 
Stock-Based Compensation (Exercise of Stock Option) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
 
Intrinsic value
$ 13,928 
$ 690 
$ 8,231 
Cash received
$ 19,324 
$ 2,821 
$ 6,583 
Stock-Based Compensation (Restricted Stock and Restricted Stock Units) (Details) (USD $)
12 Months Ended
Dec. 29, 2017
Restricted Stock And Restricted Stock Units Time Based [Member]
 
Time-Vested and Performance-Vested Restricted Stock Units and Awards
 
Beginning balance (in shares)
39,394 
Granted (in shares)
309,107 
Vested (in shares)
(148,299)
Forfeited (in shares)
(36,771)
Ending balance (in shares)
163,431 
Weighted Average Grant Date Fair Value
 
Beginning balance (in dollars per share)
$ 45.51 
Granted (in dollars per share)
$ 34.18 
Vested (in dollars per share)
$ 34.28 
Forfeited (in dollars per share)
$ 38.03 
Ending balance (in dollars per share)
$ 35.96 
Performance Based Restricted Stock And Restricted Stock Units [Member]
 
Time-Vested and Performance-Vested Restricted Stock Units and Awards
 
Beginning balance (in shares)
356,586 
Granted (in shares)
419,112 
Forfeited (in shares)
(305,809)
Ending balance (in shares)
469,889 
Weighted Average Grant Date Fair Value
 
Beginning balance (in dollars per share)
$ 31.87 
Granted (in dollars per share)
$ 31.62 
Forfeited (in dollars per share)
$ 30.77 
Ending balance (in dollars per share)
$ 32.37 
Other Operating Expenses (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Operating Costs and Expenses [Abstract]
 
 
 
Total other operating expenses
$ 37,292 
$ 61,737 
$ 66,464 
Consolidation and optimization initiatives [Member]
 
 
 
Operating Costs and Expenses [Abstract]
 
 
 
Total other operating expenses
13,349 
26,490 
26,393 
Acquisition and integration costs [Member]
 
 
 
Operating Costs and Expenses [Abstract]
 
 
 
Total other operating expenses
10,870 
28,316 
33,449 
Asset dispositions, severance and other [Member]
 
 
 
Operating Costs and Expenses [Abstract]
 
 
 
Total other operating expenses
7,182 
6,931 
6,622 
Strategic reorganization and alignment [Member]
 
 
 
Operating Costs and Expenses [Abstract]
 
 
 
Total other operating expenses
$ 5,891 
$ 0 
$ 0 
Other Operating Expenses (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 12 Months Ended 12 Months Ended
Dec. 29, 2017
Spinoff [Member]
Dec. 30, 2016
Spinoff [Member]
Jan. 1, 2016
Spinoff [Member]
Dec. 29, 2017
Acquisition And Integration Costs [Member]
Lake Region Medical [Member]
Dec. 30, 2016
Acquisition And Integration Costs [Member]
Lake Region Medical [Member]
Dec. 29, 2017
Consolidation and optimization initiatives [Member]
Manufacturing Alignment To Support Growth [Member]
Dec. 29, 2017
Consolidation and optimization initiatives [Member]
Manufacturing Alignment To Support Growth [Member]
Minimum [Member]
Dec. 29, 2017
Consolidation and optimization initiatives [Member]
Manufacturing Alignment To Support Growth [Member]
Maximum [Member]
Jan. 2, 2015
Consolidation and optimization initiatives [Member]
LRM Consolidations [Member]
facility
Dec. 29, 2017
Consolidation and optimization initiatives [Member]
LRM Consolidations [Member]
Dec. 29, 2017
Consolidation and optimization initiatives [Member]
LRM Consolidations [Member]
Minimum [Member]
Dec. 29, 2017
Consolidation and optimization initiatives [Member]
LRM Consolidations [Member]
Maximum [Member]
Dec. 29, 2017
Consolidation and optimization initiatives [Member]
Investments in Capacity and Capabilities [Member]
Dec. 29, 2017
Consolidation and optimization initiatives [Member]
Other Consolidation And Optimization Initiatives [Member]
Dec. 29, 2017
Strategic reorganization and alignment [Member]
Minimum [Member]
Dec. 29, 2017
Strategic reorganization and alignment [Member]
Maximum [Member]
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total expense expected
 
 
 
 
 
 
$ 9 
$ 11 
 
 
$ 18 
$ 22 
 
 
$ 10 
$ 12 
Expected capital expenditures
 
 
 
 
 
 
4 
6 
 
 
5 
6 
 
 
 
 
Capital investments expended
 
 
 
11.9 
 
0.3 
 
 
 
3.2 
 
 
23.4 
 
 
 
Number of facilities before consolidations
 
 
 
 
 
 
 
 
2 
 
 
 
 
 
 
 
Number of facilities after consolidation
 
 
 
 
 
 
 
 
1 
 
 
 
 
 
 
 
Costs to date
10.4 
 
 
43.5 
 
 
 
 
 
16.3 
 
 
55.8 
 
 
 
Costs incurred during the period
 
 
 
 
 
 
 
 
 
 
 
 
 
0.6 
 
 
Acquisition integration related costs accrued
 
 
 
0.4 
4.5 
 
 
 
 
 
 
 
 
 
 
 
Leadership transition costs
5.3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Professional fees
 
4.4 
6.0 
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs expected to result in cash outlays
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 8 
$ 12 
Other Operating Expenses (Changes in Accrued Liabilities) (Details) (Consolidation and optimization initiatives [Member], USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
$ 1,197 
Restructuring charges
13,349 
Cash payments
(13,238)
Restructuring Reserve, Ending balance
1,308 
Severance And Retention [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
795 
Restructuring charges
1,781 
Cash payments
(1,268)
Restructuring Reserve, Ending balance
1,308 
Accelerated Depreciation And Asset Write Offs [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
0 
Restructuring charges
0 
Cash payments
0 
Restructuring Reserve, Ending balance
0 
Other Restructuring [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
402 
Restructuring charges
11,568 
Cash payments
(11,970)
Restructuring Reserve, Ending balance
$ 0 
Income Taxes (Narratives) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 29, 2017
Dec. 29, 2017
Income Tax Disclosure [Abstract]
 
 
Tax benefit from revaluation of net deferred tax liabilities
 
$ 56.5 
Unrecognized foreign earnings and profits
147.5 
147.5 
Provisional income tax expense
(39.4)
14.7 
Deferred tax assets associated with foreign withholding taxes
 
2.3 
Reasonably possible reduction within next 12 months
1.1 
1.1 
Unrecognized tax benefit
$ 11.8 
$ 11.8 
Income Taxes (Income Before Income Tax Domestic And Foreign) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Income Tax Disclosure [Line Items]
 
 
 
Income (loss) from continuing operations before income taxes
$ 21,827 
$ 1,185 
$ (15,700)
UNITED STATES [Member]
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
Income (loss) from continuing operations before income taxes
(46,459)
(52,446)
(42,166)
International [Member]
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
Income (loss) from continuing operations before income taxes
$ 68,286 
$ 53,631 
$ 26,466 
Income Taxes (Provision Benefit of Income Taxes) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Current:
 
 
 
Federal
$ (1,558)
$ (8,327)
$ (3,753)
State
(29)
149 
(367)
International
15,947 
10,752 
6,312 
Total
14,360 
2,574 
2,192 
Deferred:
 
 
 
Federal
(58,924)
(4,952)
(8,144)
State
(788)
(638)
(880)
International
500 
(1,760)
(1,274)
Total
(59,212)
(7,350)
(10,298)
Effective tax rate
$ (44,852)
$ (4,776)
$ (8,106)
Income Taxes (Effect Tax Rate Reconciliation) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Effective Income Tax Rate Reconciliation, Amount [Abstract]
 
 
 
Statutory rate
$ 7,639 
$ 415 
$ (5,495)
Federal tax credits
(1,896)
(1,792)
(1,850)
Foreign rate differential
(11,125)
(7,086)
(3,180)
Uncertain tax positions
3,517 
1,724 
(531)
State taxes, net of federal benefit
(864)
(1,068)
(1,490)
Non-deductible transaction costs
0 
1,012 
4,867 
Valuation allowance
1,030 
1,340 
626 
Change in tax rates
(56,453)
(270)
(91)
U.S. Tax Reform - Toll charge on unremitted earnings
14,719 
0 
0 
Change in unremitted earnings assertion
2,340 
0 
0 
Change in tax law (Internal Revenue Code §987)
0 
2,630 
0 
Other
(3,759)
(1,681)
(962)
Effective tax rate
$ (44,852)
$ (4,776)
$ (8,106)
Effective Income Tax Rate Reconciliation, Percent [Abstract]
 
 
 
Statutory rate
35.00% 
35.00% 
35.00% 
Federal tax credits
(8.70%)
(151.20%)
11.80% 
Foreign rate differential
(50.90%)
(598.00%)
20.20% 
Uncertain tax positions
16.10% 
145.50% 
3.40% 
State taxes, net of federal benefit
(4.00%)
(90.10%)
9.50% 
Non-deductible transaction costs
0.00% 
85.40% 
(31.00%)
Valuation allowance
4.70% 
113.10% 
(4.00%)
Change in tax rates
(258.60%)
(22.80%)
0.60% 
U.S. Tax Reform - Toll charge on unremitted earnings
67.40% 
0.00% 
0.00% 
Change in unremitted earnings assertion
10.70% 
0.00% 
0.00% 
Change in tax law (Internal Revenue Code §987)
0.00% 
221.90% 
0.00% 
Other
(17.20%)
(141.80%)
6.10% 
Effective tax rate
(205.50%)
(403.00%)
51.60% 
Income Taxes (Deferred Tax Assets and Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2017
Dec. 30, 2016
Components of Deferred Tax Assets and Liabilities [Abstract]
 
 
Net operating loss carryforwards
$ 107,005 
$ 154,706 
Tax credit carryforwards
28,215 
24,646 
Inventories
4,956 
7,524 
Accrued expenses
3,815 
5,724 
Stock-based compensation
5,531 
10,614 
Other
0 
936 
Gross deferred tax assets
149,522 
204,150 
Less valuation allowance
(36,480)
(35,391)
Net deferred tax assets
113,042 
168,759 
Property, plant and equipment
(27,547)
(33,069)
Intangible assets
(219,576)
(337,722)
Convertible subordinated notes
(806)
(2,577)
Other
(6,325)
0 
Gross deferred tax liabilities
(254,254)
(373,368)
Net deferred tax liability
$ (141,212)
$ (204,609)
Income Taxes (Deferred Tax Assets and Liabilities Current Noncurrent) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2017
Dec. 30, 2016
Components of Deferred Tax Assets and Liabilities [Abstract]
 
 
Noncurrent deferred tax asset
$ 4,152 
$ 3,970 
Noncurrent deferred tax liability
(145,364)
(208,579)
Net deferred tax liability
$ (141,212)
$ (204,609)
Income Taxes (Income Tax Carry Forward) (Details) (USD $)
In Millions, unless otherwise specified
Dec. 29, 2017
Federal [Member]
 
Operating Loss Carryforwards [Line Items]
 
Net operating loss
$ 415.9 
Federal [Member] |
Foreign Tax Credit Carryforward [Member]
 
Operating Loss Carryforwards [Line Items]
 
Tax Credit
17.0 
International [Member]
 
Operating Loss Carryforwards [Line Items]
 
Net operating loss
37.4 
US and State [Member] |
Research Tax Credit Carryforward [Member]
 
Operating Loss Carryforwards [Line Items]
 
Tax Credit
7.2 
State [Member]
 
Operating Loss Carryforwards [Line Items]
 
Net operating loss
227.3 
State [Member] |
Investment Tax Credit Carryforward [Member]
 
Operating Loss Carryforwards [Line Items]
 
Tax Credit
$ 6.3 
Income Taxes (Unrecognized Tax Benefits) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
 
 
 
Balance, beginning of year
$ 10,561 
$ 9,271 
$ 2,411 
Additions based upon tax positions related to the current year
3,833 
1,450 
274 
Reductions as a result of a lapse of applicable statute of limitations
(510)
0 
(470)
Revaluation due to change in tax rate (Tax Reform Act)
(1,782)
0 
0 
Reductions related to prior period tax returns
(14)
 
 
Additions related to prior period tax returns
 
240 
163 
Reductions (additions) relating to business combinations
0 
(400)
7,443 
Reductions relating to settlements with tax authorities
0 
0 
(550)
Balance, end of year
$ 12,088 
$ 10,561 
$ 9,271 
Commitments and Contingencies (Narratives) (Details) (USD $)
0 Months Ended 12 Months Ended
Jan. 26, 2016
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Gain Contingencies [Line Items]
 
 
 
 
Gain on litigation settlement
$ 0 
 
 
 
Expenses related to license agreements
 
2,000,000 
2,000,000 
2,400,000 
Standard product warranty description
 
The Company generally warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. 
 
 
Self Insurance Reserve
 
7,600,000 
7,700,000 
 
Other Noncurrent Liabilities [Member]
 
 
 
 
Gain Contingencies [Line Items]
 
 
 
 
Environmental matter accruals
 
1,000,000 
1,000,000 
 
Positive Outcome of Litigation [Member]
 
 
 
 
Gain Contingencies [Line Items]
 
 
 
 
Number of patents found infringed upon
2 
 
 
 
Settlement amount
$ 37,500,000 
 
 
 
Commitments and Contingencies (Change in Product Warranty Liability) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Movement in Standard Product Warranty Accrual [Roll Forward]
 
 
Beginning balance
$ 3,911 
$ 3,316 
Additions to warranty reserve, net of reversals
3,449 
3,238 
Warranty claims settled
(2,615)
(2,643)
Ending balance
$ 4,745 
$ 3,911 
Commitments and Contingencies (Operating Lease Expenses) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Commitments and Contingencies Disclosure [Abstract]
 
 
 
Operating lease expense
$ 17,513 
$ 15,357 
$ 6,516 
Commitments and Contingencies (Minimum Future Estimated Operating Lease Expense) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2017
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
 
2018
$ 12,815 
2019
11,468 
2020
8,912 
2021
7,798 
2022
5,512 
After 2022
$ 18,043 
Commitments and Contingencies (Foreign Currency Contracts) (Details) (USD $)
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Foreign Currency Cash Flow Hedges [Abstract]
 
 
 
Increase in sales
$ 1,327,000 
$ 0 
$ 0 
Increase in cost of sales
84,000 
3,516,000 
1,948,000 
Ineffective portion of change in fair value
0 
0 
0 
Derivative [Line Items]
 
 
 
Description of Types of Foreign Currency Cash Flow Hedging Instruments Used
The Company enters into foreign currency forward contracts to hedge exposure to foreign currency exchange rate fluctuations in its international operations 
 
 
Payment for termination of foreign currency contract
 
 
2,400,000 
Loss on termination of foreign currency contract
(900,000)
 
 
Terminated FX Contract [Member]
 
 
 
Derivative [Line Items]
 
 
 
Loss on termination of foreign currency contract
 
1,600,000 
 
FX Contract 1 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional Amount
4,625,000 
 
 
Start Date
Jan. 02, 2018 
 
 
End Date
Jun. 29, 2018 
 
 
$/Foreign Currency
0.0514 
 
 
FX Contract 2 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional Amount
30,398,000 
 
 
Start Date
Jan. 02, 2018 
 
 
End Date
Dec. 31, 2018 
 
 
$/Foreign Currency
0.0507 
 
 
FX Contract 3 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional Amount
30,344,000 
 
 
Start Date
Jan. 02, 2018 
 
 
End Date
Dec. 31, 2018 
 
 
$/Foreign Currency
1.2089 
 
 
Accrued Expenses [Member] |
FX Contract 1 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Fair Value
127,000 
 
 
Accrued Expenses [Member] |
FX Contract 2 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Fair Value
879,000 
 
 
Accrued Expenses [Member] |
FX Contract 3 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Fair Value
$ (145,000)
 
 
Earnings (Loss) Per Share (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 29, 2017
Sep. 29, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 30, 2016
Sep. 30, 2016
Jul. 1, 2016
Apr. 1, 2016
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Numerator:
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
 
 
 
 
 
 
 
 
$ 66,679 
$ 5,961 
$ (7,594)
Denominator for basic EPS:
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding
 
 
 
 
 
 
 
 
31,402 
30,778 
26,363 
Effect of dilutive securities stock options, restricted stock and restricted stock units
 
 
 
 
 
 
 
 
486 
195 
0 
Denominator for diluted EPS
 
 
 
 
 
 
 
 
31,888 
30,973 
26,363 
Basic (in dollars per share)
$ 1.71 
$ 0.43 
$ 0.10 
$ (0.14)
$ 0.26 
$ 0.37 
$ (0.03)
$ (0.41)
$ 2.12 
$ 0.19 
$ (0.29)
Diluted (in dollars per share)
$ 1.68 
$ 0.43 
$ 0.09 
$ (0.14)
$ 0.25 
$ 0.37 
$ (0.03)
$ (0.41)
$ 2.09 
$ 0.19 
$ (0.29)
Earnings (Loss) Per Share (Antidilutive Securities) (Details)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Anitdilutive Securities Excluded From Earnings Per Share [Abstract]
 
 
 
Time-vested stock options, restricted stock and restricted stock units
676 
657 
1,718 
Performance-vested stock options and restricted stock units
285 
357 
578 
Accumulated Other Comprehensive Income (Loss) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Defined Benefit Plan Liability
 
 
 
Defined Benefit Plan Liability, Beginning
$ (1,475)
$ (1,179)
 
Net defined benefit plan adjustments
53 
(296)
 
Defined Benefit Plan Liability, Ending
(1,422)
(1,475)
(1,179)
Cash Flow Hedges
 
 
 
Cash Flow Hedges, Beginning
1,420 
(2,392)
 
Unrealized gain on cash flow hedges
3,707 
210 
 
Realized gain on foreign currency hedges
(1,243)
3,516 
 
Realized gain on interest rate swap hedges
(466)
86 
 
Cash Flow Hedges, End
3,418 
1,420 
(2,392)
Foreign Currency Translation Adjustment
 
 
 
Foreign Currency Translation Adjustment, Beginning
(15,660)
3,609 
 
Foreign currency translation gain
65,860 
(19,269)
 
Foreign Currency Translation Adjustment, End
50,200 
(15,660)
3,609 
Total Pre-Tax Amount
 
 
 
Total Pre-Tax Amount, Beginning
(15,715)
38 
 
Unrealized gain on cash flow hedges
3,707 
210 
 
Realized gain on foreign currency hedges
(1,243)
3,516 
 
Realized gain on interest rate swap hedges
(466)
86 
 
Net defined benefit plan adjustments
53 
(296)
 
Foreign currency translation gain
65,860 
(19,269)
 
Total Pre-Tax Amount, End
52,196 
(15,715)
38 
Tax
 
 
 
Tax, Beginning
(285)
1,332 
 
Unrealized gain on cash flow hedges
(353)
(73)
 
Realized gain on foreign currency hedges
435 
(1,231)
 
Realized gain on interest rate swap hedges
163 
(30)
 
Net defined benefit plan adjustments
23 
(283)
 
Foreign currency translation gain
0 
0 
 
Tax, End
(17)
(285)
1,332 
Net-of-Tax Amount
 
 
 
Net-of-Tax Amount, Beginning
(16,000)
1,370 
 
Unrealized gain on cash flow hedges
3,354 
137 
 
Realized gain on foreign currency hedges
(808)
2,285 
 
Realized gain on interest rate swap hedges
(303)
56 
 
Net defined benefit plan adjustments
76 
(579)
(20)
Foreign currency translation gain (loss)
65,860 
(19,269)
(7,841)
Net-of-Tax Amount, End
$ 52,179 
$ (16,000)
$ 1,370 
Fair Value Measurements (Narratives) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
 
Foreign currency cash flow hedge gain (loss) to be reclassified during next 12 months
$ 0.9 
 
 
Cost and equity method investments aggregate carrying amount
20.8 
22.8 
 
Net gains on equity method investments
3.7 
0.1 
4.7 
Cash distribution from equity method investments
1.7 
0 
3.6 
Held for sale asset impairment
0.3 
0.2 
 
Long-lived assets held for sale
1.3 
0.8 
 
Fair Value, Inputs, Level 2 [Member]
 
 
 
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
 
Cost and equity method investments other than temporary impairment
5.3 
1.6 
1.4 
Chinese Venture Capital Fund [Member]
 
 
 
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
 
Equity method investment
$ 13.8 
$ 10.7 
 
Percentage of ownership interest
6.80% 
 
 
Fair Value Measurements (Assets and Liabilities Recorded at Fair Value on a Recurring Basis) (Details) (Fair Value, Measurements, Recurring [Member], USD $)
In Thousands, unless otherwise specified
Dec. 29, 2017
Dec. 30, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Foreign currency contracts
$ 861 
$ 2,063 
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Foreign currency contracts
0 
0 
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Foreign currency contracts
861 
2,063 
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Foreign currency contracts
0 
0 
Interest Rate Swap [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Interest rate swap
4,279 
3,482 
Interest Rate Swap [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Interest rate swap
0 
0 
Interest Rate Swap [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Interest rate swap
4,279 
3,482 
Interest Rate Swap [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Interest rate swap
$ 0 
$ 0 
Fair Value Measurements (Assets and Liabilities Measured on Non-recurring Basis) (Details) (Fair Value, Measurements, Nonrecurring [Member], USD $)
In Thousands, unless otherwise specified
Dec. 29, 2017
Dec. 30, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cost method investment
$ 180 
$ 430 
Assets Held for Sale
490 
794 
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cost method investment
0 
0 
Assets Held for Sale
0 
0 
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cost method investment
180 
430 
Assets Held for Sale
490 
794 
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cost method investment
0 
0 
Assets Held for Sale
$ 0 
$ 0 
Segment and Geographic Information (Narrative) (Details)
12 Months Ended
Dec. 29, 2017
Segment
Segment Reporting [Abstract]
 
Number of Reportable Segments
2 
Segment and Geographic Information (Sales by Product Lines) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 29, 2017
Sep. 29, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 30, 2016
Sep. 30, 2016
Jul. 1, 2016
Apr. 1, 2016
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales
$ 390,481 
$ 363,308 
$ 362,719 
$ 345,413 
$ 359,591 
$ 346,567 
$ 348,382 
$ 332,238 
$ 1,461,921 
$ 1,386,778 
$ 800,414 
Medical Segment [Member] |
Operating Segments [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales
 
 
 
 
 
 
 
 
1,404,953 
1,345,099 
740,965 
Medical Segment [Member] |
Cardio And Vascular [Member] |
Operating Segments [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales
 
 
 
 
 
 
 
 
536,794 
490,857 
131,299 
Medical Segment [Member] |
Cardiac/Neuromodulation [Member] |
Operating Segments [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales
 
 
 
 
 
 
 
 
428,349 
439,541 
361,722 
Medical Segment [Member] |
Advanced Surgical, Orthopaedics, and Portable Medical [Member] |
Operating Segments [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales
 
 
 
 
 
 
 
 
439,810 
414,701 
247,944 
Non-Medical Segment [Member] |
Operating Segments [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales
 
 
 
 
 
 
 
 
$ 56,968 
$ 41,679 
$ 59,449 
Segment and Geographic Information (Significant Customers) (Details)
12 Months Ended
Dec. 29, 2017
customer
Dec. 30, 2016
Jan. 1, 2016
Revenue, Major Customer [Line Items]
 
 
 
Number of Customers
4 
 
 
Entity-Wide Revenue, Major Customer, Percentage
55.00% 
56.00% 
52.00% 
Entity Wide Accounts Receivable, Major Customer, Percentage
52.00% 
45.00% 
 
Customer Concentration Risk [Member] |
Sales Revenue, Net [Member]
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Number of Customers
4 
4 
4 
Customer Concentration Risk [Member] |
Sales Revenue, Net [Member] |
Customer A [Member]
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Entity-Wide Revenue, Major Customer, Percentage
17.00% 
18.00% 
17.00% 
Customer Concentration Risk [Member] |
Sales Revenue, Net [Member] |
Customer B [Member]
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Entity-Wide Revenue, Major Customer, Percentage
17.00% 
17.00% 
18.00% 
Customer Concentration Risk [Member] |
Sales Revenue, Net [Member] |
Customer C [Member]
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Entity-Wide Revenue, Major Customer, Percentage
12.00% 
12.00% 
12.00% 
Customer Concentration Risk [Member] |
Sales Revenue, Net [Member] |
Customer D [Member]
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Entity-Wide Revenue, Major Customer, Percentage
9.00% 
9.00% 
5.00% 
Customer Concentration Risk [Member] |
Accounts Receivable [Member]
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Number of Customers
4 
4 
 
Customer Concentration Risk [Member] |
Accounts Receivable [Member] |
Customer A [Member]
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Entity Wide Accounts Receivable, Major Customer, Percentage
9.00% 
7.00% 
 
Customer Concentration Risk [Member] |
Accounts Receivable [Member] |
Customer B [Member]
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Entity Wide Accounts Receivable, Major Customer, Percentage
18.00% 
20.00% 
 
Customer Concentration Risk [Member] |
Accounts Receivable [Member] |
Customer C [Member]
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Entity Wide Accounts Receivable, Major Customer, Percentage
8.00% 
4.00% 
 
Customer Concentration Risk [Member] |
Accounts Receivable [Member] |
Customer D [Member]
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Entity Wide Accounts Receivable, Major Customer, Percentage
17.00% 
14.00% 
 
Segment and Geographic Information (Reconciliation of Segment Information) (Details 1) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Segment Reporting Information [Line Items]
 
 
 
Operating income as reported
$ 139,439 
$ 108,270 
$ 13,146 
Unallocated other income (expense), net
(117,612)
(107,085)
(28,846)
Income (loss) before benefit for income taxes
21,827 
1,185 
(15,700)
Total depreciation and amortization
102,796 
90,524 
67,618 
Total assets
2,848,345 
2,832,543 
 
Expenditures for tangible long-lived assets, excluding acquisitions
47,184 
54,372 
48,054 
Operating Segments [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Operating income as reported
222,337 
186,961 
91,073 
Total depreciation and amortization
96,602 
85,530 
64,121 
Total assets
2,741,298 
2,699,168 
 
Expenditures for tangible long-lived assets, excluding acquisitions
38,401 
46,121 
41,531 
Operating Segments [Member] |
Medical Segment [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Operating income as reported
211,002 
185,448 
83,784 
Total depreciation and amortization
93,927 
83,184 
61,618 
Total assets
2,687,227 
2,638,180 
 
Expenditures for tangible long-lived assets, excluding acquisitions
37,740 
44,670 
40,931 
Operating Segments [Member] |
Non-Medical Segment [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Operating income as reported
11,335 
1,513 
7,289 
Total depreciation and amortization
2,675 
2,346 
2,503 
Total assets
54,071 
60,988 
 
Expenditures for tangible long-lived assets, excluding acquisitions
661 
1,451 
600 
Unallocated Amount to Segment [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Operating income as reported
(82,898)
(78,691)
(77,927)
Total depreciation and amortization
6,194 
4,994 
3,497 
Total assets
107,047 
133,375 
 
Expenditures for tangible long-lived assets, excluding acquisitions
$ 8,783 
$ 8,251 
$ 6,523 
Segment and Geographic Information (Sales by Geographic Information) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 29, 2017
Sep. 29, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 30, 2016
Sep. 30, 2016
Jul. 1, 2016
Apr. 1, 2016
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total sales
$ 390,481 
$ 363,308 
$ 362,719 
$ 345,413 
$ 359,591 
$ 346,567 
$ 348,382 
$ 332,238 
$ 1,461,921 
$ 1,386,778 
$ 800,414 
UNITED STATES [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total sales
 
 
 
 
 
 
 
 
862,290 
805,742 
401,380 
PUERTO RICO [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total sales
 
 
 
 
 
 
 
 
133,752 
159,243 
136,898 
Rest Of World [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total sales
 
 
 
 
 
 
 
 
$ 465,879 
$ 421,793 
$ 262,136 
Segment and Geographic Information (Long lived Tangible Assets by Region) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 29, 2017
Dec. 30, 2016
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Long-lived tangible assets
$ 370,375 
$ 372,042 
UNITED STATES [Member]
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Long-lived tangible assets
252,767 
258,899 
Rest Of World [Member]
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Long-lived tangible assets
$ 117,608 
$ 113,143 
Quarterly Sales and Earnings Data - Unaudited (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 29, 2017
Sep. 29, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 30, 2016
Sep. 30, 2016
Jul. 1, 2016
Apr. 1, 2016
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Quarterly Financial Information Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Sales
$ 390,481,000 
$ 363,308,000 
$ 362,719,000 
$ 345,413,000 
$ 359,591,000 
$ 346,567,000 
$ 348,382,000 
$ 332,238,000 
$ 1,461,921,000 
$ 1,386,778,000 
$ 800,414,000 
Gross profit
104,818,000 
98,235,000 
99,272,000 
91,226,000 
92,891,000 
97,909,000 
96,031,000 
91,468,000 
393,551,000 
378,299,000 
235,135,000 
Net income (loss)
54,338,000 
13,690,000 
2,990,000 
(4,339,000)
7,933,000 
11,458,000 
(770,000)
(12,660,000)
66,679,000 
5,961,000 
(7,594,000)
Earnings Per Share, Basic (in dollars per share)
$ 1.71 
$ 0.43 
$ 0.10 
$ (0.14)
$ 0.26 
$ 0.37 
$ (0.03)
$ (0.41)
$ 2.12 
$ 0.19 
$ (0.29)
Earnings Per Share, Diluted (in dollars per share)
$ 1.68 
$ 0.43 
$ 0.09 
$ (0.14)
$ 0.25 
$ 0.37 
$ (0.03)
$ (0.41)
$ 2.09 
$ 0.19 
$ (0.29)
Net tax benefit
$ 39,400,000 
 
 
 
 
 
 
 
$ (14,700,000)
 
 
Valuation and Qualifying Accounts (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 29, 2017
Dec. 30, 2016
Jan. 1, 2016
Allowance for Doubtful Accounts [Member]
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance at Beginning of Period
$ 742 
$ 954 
$ 1,411 
Charged to Costs & Expenses
151 
140 
(70)
Charged to Other Accounts
31 1
245 1
459 1 2
Deductions
(100)3
(597)3
(846)3
Balance at End of Period
824 
742 
954 
Valuation Allowance of Deferred Tax Assets [Member]
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance at Beginning of Period
35,391 
39,171 
10,709 
Charged to Costs & Expenses
3,284 4
641 4
788 4
Charged to Other Accounts
0 1
(5,135)1 2
27,836 1 2
Deductions
(2,195)3 5
714 5
(162)5
Balance at End of Period
$ 36,480 
$ 35,391 
$ 39,171