INTEGER HOLDINGS CORP, 10-Q filed on 8/7/2012
Quarterly Report
Document and Entity Information
6 Months Ended
Jun. 29, 2012
Aug. 7, 2012
Document and Entity Information [Abstract]
 
 
Entity Registrant Name
GREATBATCH, INC. 
 
Entity Central Index Key
0001114483 
 
Document Type
10-Q 
 
Document Period End Date
Jun. 29, 2012 
 
Amendment Flag
false 
 
Document Fiscal Year Focus
2012 
 
Document Fiscal Period Focus
Q2 
 
Current Fiscal Year End Date
--12-28 
 
Entity Filer Category
Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
23,670,810 
Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Thousands, unless otherwise specified
Jun. 29, 2012
Dec. 30, 2011
Current assets:
 
 
Cash and cash equivalents
$ 11,133 
$ 36,508 
Accounts receivable, net of allowance for doubtful accounts
114,135 
101,946 
Inventories
113,657 
109,913 
Refundable income taxes
1,292 
Deferred income taxes
7,641 
7,828 
Prepaid expenses and other current assets
7,227 
7,469 
Total current assets
253,793 
264,956 
Property, plant and equipment, net
156,380 
145,806 
Amortizing intangible assets, net
95,362 
100,258 
Indefinite-lived intangible assets
20,828 
20,288 
Goodwill
347,290 
338,653 
Deferred income taxes
2,073 
2,450 
Other assets
10,064 
8,936 
Total assets
885,790 
881,347 
Current liabilities:
 
 
Accounts payable
44,515 
40,665 
Income taxes payable
2,505 
Deferred income taxes
835 
845 
Accrued expenses
34,350 
52,539 
Total current liabilities
82,205 
94,049 
Long-term debt
233,374 
235,950 
Deferred income taxes
75,786 
75,203 
Other long-term liabilities
10,382 
8,862 
Total liabilities
401,747 
414,064 
Stockholders' equity:
 
 
Preferred stock
Common stock
24 
23 
Additional paid-in capital
315,252 
307,196 
Treasury stock, at cost
(1,387)
Retained earnings
160,840 
152,522 
Accumulated other comprehensive income (loss)
7,927 
8,929 
Total stockholders' equity
484,043 
467,283 
Total liabilities and stockholders' equity
$ 885,790 
$ 881,347 
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Jun. 29, 2012
Dec. 30, 2011
Current assets:
 
 
Allowance for doubtful accounts
$ 2,000,000 
$ 1,900,000 
Stockholders' equity:
 
 
Preferred stock, par value
$ 0.001 
$ 0.001 
Preferred stock, shares authorized
100,000,000 
100,000,000 
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value
$ 0.001 
$ 0.001 
Common stock, shares authorized
100,000,000 
100,000,000 
Common stock, shares issued
23,644,776 
23,466,128 
Common stock, shares outstanding
23,644,776 
23,406,023 
Treasury stock, shares
60,105 
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 29, 2012
Jul. 1, 2011
Jun. 29, 2012
Jul. 1, 2011
Condensed Consolidated Statements of Operations and Comprehensive Income [Abstract]
 
 
 
 
Sales
$ 166,548 
$ 146,524 
$ 325,651 
$ 295,358 
Cost of sales
114,615 
99,920 
226,830 
201,584 
Gross profit
51,933 
46,604 
98,821 
93,774 
Operating expenses:
 
 
 
 
Selling, general and administrative expenses
20,745 
17,571 
39,779 
36,220 
Research, development and engineering costs, net
14,174 
11,250 
28,085 
21,638 
Other operating (income) expense, net
5,923 
(520)
8,668 
(353)
Total operating expenses
40,842 
28,301 
76,532 
57,505 
Operating income (loss)
11,091 
18,303 
22,289 
36,269 
Interest expense
4,416 
4,403 
8,775 
8,677 
Interest income
(1)
(1)
(8)
(Gain) loss on cost method investments, net
317 
(4,232)
Other (income) expense
(194)
819 
526 
1,241 
Income before provision for income taxes
6,870 
12,764 
12,989 
30,591 
Provision for income taxes
3,019 
4,214 
4,671 
10,097 
Net income (loss)
3,851 
8,550 
8,318 
20,494 
Earnings per share:
 
 
 
 
Basic
$ 0.16 
$ 0.37 
$ 0.35 
$ 0.88 
Diluted
$ 0.16 
$ 0.36 
$ 0.35 
$ 0.86 
Weighted average shares outstanding:
 
 
 
 
Basic
23,611 
23,227 
23,515 
23,214 
Diluted
23,876 
23,838 
23,816 
23,767 
Comprehensive income (loss):
 
 
 
 
Net income (loss)
3,851 
8,550 
8,318 
20,494 
Foreign currency translation gain (loss)
(5,565)
9,088 
(1,527)
11,303 
Net change in cash flow hedges, net
111 
525 
381 
Comprehensive income (loss)
$ (1,714)
$ 17,749 
$ 7,316 
$ 32,178 
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 29, 2012
Jul. 1, 2011
Cash flows from operating activities:
 
 
Net income (loss)
$ 8,318 
$ 20,494 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
22,104 
17,979 
Debt related amortization included in interest expense
5,959 
5,614 
Stock-based compensation
5,533 
5,795 
(Gain) loss on cost method investments, net
(4,232)
Other non-cash (gains) losses
(59)
355 
Deferred income taxes
45 
2,418 
Changes in operating assets and liabilities, net of acquisitions:
 
 
Accounts receivable
(12,140)
(18,352)
Inventories
(4,570)
(5,713)
Prepaid expenses and other current assets
538 
Accounts payable
2,749 
5,569 
Accrued expenses
(8,669)
2,542 
Income taxes payable
3,732 
5,338 
Net cash provided by (used in) operating activities
23,540 
37,810 
Cash flows from investing activities:
 
 
Acquisition of property, plant and equipment
(24,181)
(11,523)
Proceeds from sale of cost method investments, net
10,365 
Acquisitions, net of cash acquired
(17,224)
Other investing activities
65 
(1,929)
Net cash provided by (used in) investing activities
(41,340)
(3,087)
Cash flows from financing activities:
 
 
Principal payments of long-term debt
(18,000)
(20,000)
Proceeds from issuance of long-term debt
10,000 
Issuance of common stock
403 
1,968 
Payment of debt issuance costs
(2,114)
Other financing activities
(118)
(1,102)
Net cash provided by (used in) financing activities
(7,715)
(21,248)
Effect of foreign currency exchange rates on cash and cash equivalents
140 
584 
Net increase (decrease) in cash and cash equivalents
(25,375)
14,059 
Cash and cash equivalents, beginning of period
36,508 
22,883 
Cash and cash equivalents, end of period
$ 11,133 
$ 36,942 
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (USD $)
In Thousands
Total
Common Stock
Additional Paid-In Capital
Treasury Stock
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Balance at Dec. 30, 2011
$ 467,283 
$ 23 
$ 307,196 
$ (1,387)
$ 152,522 
$ 8,929 
Balance, shares at Dec. 30, 2011
 
23,466 
 
(60)
 
 
Stock-based compensation
4,403 
 
4,403 
 
 
 
Net shares issued under stock incentive plans, shares
 
16 
 
21 
 
 
Net shares issued under stock incentive plans
287 
 
(189)
476 
 
 
Income tax liability from stock options, restricted stock and restricted stock units
(39)
 
(39)
 
 
 
Shares contributed to 401(k), shares
 
163 
 
39 
 
 
Shares contrbuted to 401(k)
4,793 
3,881 
911 
 
 
Net income (loss)
8,318 
 
 
 
8,318 
 
Total other comprehensive income (loss)
(1,002)
 
 
 
 
(1,002)
Balance at Jun. 29, 2012
$ 484,043 
$ 24 
$ 315,252 
$ 0 
$ 160,840 
$ 7,927 
Balance, shares at Jun. 29, 2012
 
23,645 
 
 
 
Basis of Presentation
BASIS OF PRESENTATION

1. BASIS OF PRESENTATION

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information (Accounting Standards Codification (“ASC”) 270, Interim Reporting) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information necessary for a full presentation of financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of Greatbatch, Inc. and its wholly-owned subsidiary, Greatbatch Ltd. (collectively “Greatbatch” or the “Company”), for the periods presented. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ materially from these estimates. The December 30, 2011 condensed consolidated balance sheet data was derived from audited consolidated financial statements but does not include all disclosures required by U.S. GAAP. For further information, refer to the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 30, 2011. The Company utilizes a fifty-two, fifty-three week fiscal year ending on the Friday nearest December 31st. The second quarter of 2012 and 2011 each contained 13 weeks and ended on June 29, and July 1, respectively.

 

Acquisitions
ACQUISITIONS

2. ACQUISITIONS

NeuroNexus Technologies, Inc.

On February 16, 2012, the Company purchased all of the outstanding common stock of NeuroNexus Technologies, Inc. (“NeuroNexus”) headquartered in Ann Arbor, MI. NeuroNexus is an active implantable medical device design firm specializing in developing and commercializing neural interface technology, components and systems for neuroscience and clinical markets. NeuroNexus has an extensive intellectual property portfolio, core technologies and capabilities to support the development and manufacturing of neural interface devices across a wide range of applications including neuromodulation, sensing, optical stimulation and targeted drug delivery.

 

This transaction was accounted for under the acquisition method of accounting. Accordingly, the operating results of NeuroNexus have been included in the Company's Implantable Medical segment from the date of acquisition. For the year-to-date period of 2012, NeuroNexus added approximately $1.0 million to the Company's revenue and decreased the Company's net income by $0.2 million. The purchase price of NeuroNexus consisted of cash payments of $11.7 million and potential future payments of up to an additional $2 million. These future payments are contingent upon the achievement of certain financial and development-based milestones and had an estimated fair value of $1.5 million as of the acquisition date.

 

The cost of the acquisition was preliminarily allocated to the assets acquired and liabilities assumed from NeuroNexus based on their fair values as of the close of the acquisition, with the amount exceeding the fair value of the net assets acquired being recorded as goodwill. The value assigned to certain assets and liabilities are preliminary and are subject to adjustment as additional information is obtained, including, but not limited to, the finalization of pre-acquisition tax positions. The valuation is expected to be finalized in 2012. When the valuation is finalized, any changes to the preliminary valuation of assets acquired or liabilities assumed may result in material adjustments to the fair value of the intangible assets acquired, as well as goodwill. The following table summarizes the preliminary allocation of the NeuroNexus purchase price to the assets acquired and liabilities assumed as of the acquisition date (in thousands):

 Assets acquired
  Current assets $ 618 
  Property, plant and equipment   35 
  Amortizing intangible assets   2,927 
  Indefinite-lived intangible assets   540 
  Goodwill   8,875 
  Other assets   1,576 
 Total assets acquired 14,571 
 Liabilities assumed   
  Current liabilities  420 
  Deferred income taxes  940 
 Total liabilities assumed  1,360 
 Purchase price$13,211 

The preliminary fair values of the assets acquired were determined using one of three valuation approaches: market, income and cost. The selection of a particular method for a given asset depended on the reliability of available data and the nature of the asset, among other considerations.

 

The market approach estimates the value for a subject asset based on available market pricing for comparable assets. The income approach estimates the value for a subject asset based on the present value of cash flows projected to be generated by the asset. The projected cash flows were discounted at a required rate of return that reflects the relative risk of the asset and the time value of money. The projected cash flows for each asset considered multiple factors from the perspective of a marketplace participant including revenue projections from existing customers, attrition trends, product life-cycle assumptions, marginal tax rates and expected profit margins giving consideration to historical and expected margins. The cost approach estimates the value for a subject asset based on the cost to replace the asset and reflects the estimated reproduction or replacement cost for the asset, less an allowance for loss in value due to depreciation or obsolescence, with specific consideration given to economic obsolescence if indicated. These fair value measurement approaches are based on significant unobservable inputs, including management estimates and assumptions.

 

Current assets and liabilities - The fair value of current assets and liabilities was assumed to approximate their carrying value as of the acquisition date due to the short-term nature of these assets and liabilities.

 

 

 

 

 

Intangible assets - The purchase price was allocated to intangible assets as follows (dollars in thousands):

      Weighted Weighted Weighted
   Fair Average Average Average
   Value Amortization Useful Discount
   Assigned Period (Years) Life (Years) Rate
 Amortizing Intangible Assets         
 Technology and patents $1,058 6 10 14%
 Customer lists  1,869 7 15 13%
   $2,927 7 13 13%

      Weighted Weighted Weighted
   Fair Average Average Average
   Value Amortization Useful Discount
   Assigned Period (Years) Life (Years) Rate
 Indefinite-lived Intangible Assets       
 In-process research and development $540 N/A 12 26%

The weighted average amortization period is less than the estimated useful life due to the Company using an accelerated amortization method, which approximates the projected cash flows used to determine the fair value of those intangible assets.

 

Technology and patents - Technology and patents consists of technical processes, patented and unpatented technology, manufacturing know-how, trade secrets and the understanding with respect to products or processes that have been developed by NeuroNexus and that will be leveraged in current and future products. The fair value of technology and patents acquired was determined utilizing the relief from royalty method, a form of the income approach, with royalty rates that ranged from 2% to 6%. The estimated useful life of the technology and patents is based upon management's estimate of the product life cycle associated with technology and patents before they will be replaced by new technologies.

 

Customer lists – Customer lists represent the estimated fair value of non-contractual customer relationships NeuroNexus has as of the acquisition date. The primary customers of NeuroNexus include numerous scientists and researchers from various geographic locations around the world. These relationships were valued separately from goodwill at the amount which an independent third party would be willing to pay for these relationships. The fair value of customer lists was determined using the multi-period excess-earnings method, a form of the income approach. The estimated useful life of the existing customer was based upon historical customer attrition as well as management's understanding of the industry and product life cycles.

 

In-process research and development (“IPR&D”)IPR&D represents research projects which are expected to generate cash flows but have not yet reached technological feasibility. The primary basis for determining the technological feasibility of these projects is whether or not regulatory approval has been obtained. The Company classifies IPR&D acquired in a business combination as an indefinite-lived intangible asset until the completion or abandonment of the associated projects. Upon completion, the Company would determine the useful life of the IPR&D and begin amortizing the assets to reflect their use over their remaining lives. Upon permanent abandonment, the remaining carrying amount of the associated IPR&D would be written-off. The Company will test the IPR&D acquired for impairment at least annually, and more frequently if events or changes in circumstances indicate that the assets may be impaired. The impairment test consists of a comparison of the fair value of the intangible assets with their carrying amount. If the carrying amount exceeds its fair value, the Company would record an impairment loss in an amount equal to the excess. The Company used the income approach to determine the fair value of the IPR&D acquired. In arriving at the value of the IPR&D, management considered, among other factors: the projects' stage of completion; the complexity of the work to be completed as of the acquisition date; the projected costs to complete the projects; the contribution of other acquired assets; and the estimated useful life of the technology. The Company applied a market-participant risk-adjusted discount rate to arrive at a present value as of the date of acquisition.

 

The value assigned to IPR&D related to the development of micro-electrodes for deep brain mapping and electrocorticography, and is expected to be commercialized by 2014. For purposes of valuing the IPR&D, the Company estimated total costs to complete the projects to be approximately $1.5 million. If the projects are not successful or completed in a timely manner, the Company may not realize the financial benefits expected for these projects.

 

Goodwill - The excess of the purchase price over the fair value of net tangible and intangible assets acquired and liabilities assumed was allocated to goodwill. Various factors contributed to the establishment of goodwill, including: the value of NeuroNexus's highly trained assembled work force and management team; the incremental value that NeuroNexus's technology will bring to the Company's neuromodulation platform currently in development; and the expected revenue growth over time that is attributable to increased market penetration from future products and customers. The goodwill acquired in connection with the NeuroNexus acquisition was allocated to the Implantable Medical business segment and is not deductible for tax purposes.

Micro Power Electronics, Inc.

On December 15, 2011, Electrochem acquired all of the outstanding common and preferred stock of Micro Power Electronics, Inc. (“Micro Power”) headquartered in Beaverton, OR. Micro Power is a leading supplier of custom battery solutions, serving the portable medical, military and handheld automatic identification and data collection markets. The aggregate purchase price of Micro Power was $71.8 million, which was paid in cash. Total assets acquired from Micro Power were $88.2 million. Total liabilities assumed from Micro Power were $16.4 million.

 

This transaction was accounted for under the acquisition method of accounting. Accordingly, the operating results of Micro Power have been included in the Company's Electrochem segment from the date of acquisition and the cost of the acquisition was preliminarily allocated to the assets acquired and liabilities assumed from Micro Power based on their fair values as of the close of the acquisition, with the amount exceeding the fair value of net assets acquired being recorded as goodwill. The value assigned to certain assets and liabilities are preliminary and are subject to adjustment as additional information is obtained, including, but not limited to, the finalization of pre-acquisition tax positions. The valuation will be finalized in 2012. During the first quarter of 2012, the Company completed its branding analysis related to the Micro Power tradename and settled the contractual working capital adjustment in accordance with the purchase agreement. As a result, the Company reduced the fair value recorded for the Micro Power trade name by $0.4 million and adjusted the related deferred tax liability by $0.1 million. The net result was an increase to goodwill of $0.3 million. The impact of these adjustments, individually and in the aggregate, was not considered material to reflect as a retrospective adjustment of the historical financial statements.

 

Pro Forma Results (Unaudited)

The following unaudited pro forma information presents the consolidated results of operations of the Company, NeuroNexus and Micro Power as if those acquisitions occurred as of the beginning of fiscal years 2011 (NeuroNexus) and 2010 (Micro Power) (in thousands, except per share amounts):

    Three Months Ended Six Months Ended
    June 29, July 1, June 29, July 1,
    2012 2011 2012 2011
               
 Sales$166,548 $163,613 $326,091 $328,168
 Net income 3,851  8,291  8,144  19,492
 Earnings per share:           
  Basic$0.16 $0.36 $0.35 $0.84
  Diluted$0.16 $0.35 $0.34 $0.82

The unaudited pro forma information presents the combined operating results of Greatbatch, NeuroNexus and Micro Power, with the results prior to the acquisition date adjusted to include the pro forma impact of the amortization of acquired intangible assets based on the purchase price allocations, the adjustment to interest expense reflecting the amount borrowed in connection with the acquisitions at Greatbatch's interest rate, and the impact of income taxes on the pro forma adjustments utilizing the applicable statutory tax rate. The unaudited pro forma consolidated basic and diluted earnings per share calculations are based on the consolidated basic and diluted weighted average shares of Greatbatch.

 

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. Certain cost 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, or to be a projection of results that may be obtained in the future.

Supplemental Cash Flow Information
SUPPLEMENTAL CASH FLOW INFORMATION

3. SUPPLEMENTAL CASH FLOW INFORMATION

    Six Months Ended
     June 29,  July 1,
 (in thousands) 2012  2011
 Noncash investing and financing activities:
  Common stock contributed to 401(k) Plan$4,793 $0
  Property, plant and equipment purchases included      
   in accounts payable 5,624   470
         
 Cash paid during the period for:     
  Interest$ 2,909 $ 3,327
  Income taxes  983   2,409
         
 Acquisition of noncash assets $ 14,379 $ 3,125
 Liabilities assumed 1,226  0
Inventories
INVENTORIES

4. INVENTORIES

 Inventories are comprised of the following (in thousands):
       
  As of
   June 29,  December 30,
   2012  2011
 Raw materials$ 53,498 $ 49,773
 Work-in-process  39,276   36,603
 Finished goods  20,883   23,537
 Total$ 113,657 $ 109,913
Intangible Assets
INTANGIBLE ASSETS

5. INTANGIBLE ASSETS

 Amortizing intangible assets are comprised of the following (in thousands):
              
 AtJune 29, 2012 Gross Carrying Amount  Accumulated Amortization  Foreign Currency Translation  Net Carrying Amount
 Technology and patents$ 98,382 $ (58,121) $ 746 $ 41,007
 Customer lists  68,257   (16,971)   1,722   53,008
 Other  4,812   (4,198)   733   1,347
 Total amortizing intangible assets$ 171,451 $ (79,290) $ 3,201 $ 95,362
              
 AtDecember 30, 2011           
 Technology and patents$ 97,324 $ (54,054) $ 842 $ 44,112
 Customer lists  66,388   (14,009)   1,807   54,186
 Other  5,174   (4,019)   805   1,960
 Total amortizing intangible assets$ 168,886 $ (72,082) $ 3,454 $ 100,258

 Aggregate intangible asset amortization expense is comprised of the following (in thousands):
             
  Three Months Ended Six Months Ended
  June 29, July 1, June 29, July 1,
  2012 2011 2012 2011
 Cost of sales$ 1,900 $ 1,648 $ 3,795 $ 3,149
 Selling, general and administrative expenses  1,579   974   3,140   1,927
 Research, development and engineering costs, net  137   -   273   -
 Total intangible asset amortization expense$ 3,616 $ 2,622 $ 7,208 $ 5,076

 Estimated future intangible asset amortization expense based on the current carrying value is as follows (in thousands):
   Estimated
   Amortization
   Expense
 Remainder of2012$ 7,161
 2013  13,616
 2014  13,615
 2015  12,513
 2016  10,198
 Thereafter  38,259
 Total estimated amortization expense$ 95,362

 The change in indefinite-lived intangible assets is as follows (in thousands):
           
    Trademarks and Tradenames  IPR&D  Total
 AtDecember 30, 2011$ 20,288 $0 $ 20,288
 Indefinite-lived assets acquired 0   540   540
 AtJune 29, 2012$ 20,288 $ 540 $ 20,828
           
 The change in goodwill is as follows (in thousands):
           
    Implantable Medical  Electrochem  Total
 AtDecember 30, 2011$ 297,232 $ 41,421 $ 338,653
 Goodwill acquired  8,875  331   9,206
 Foreign currency translation  (569)  0   (569)
 AtJune 29, 2012$ 305,538 $ 41,752 $ 347,290
Debt
DEBT

6. DEBT

 Long-term debt is comprised of the following (in thousands):
   As of
    June 29,  December 30,
    2012  2011
 Revolving line of credit$ 47,000 $ 55,000
 2.25% convertible subordinated notes, due 2013  197,782   197,782
 Unamortized discount  (11,408)   (16,832)
  Total long-term debt$ 233,374 $ 235,950

Revolving Line of Credit The Company has a revolving credit facility (the “Credit Facility”), which provides a $400 million secured revolving credit facility, and can be increased by $200 million upon the Company's request and approval by a majority of the lenders. The Credit Facility also contains a $15 million letter of credit subfacility and a $15 million swingline subfacility. The Credit Facility has a maturity date of June 24, 2016; provided, however, if CSN (defined below) are not repaid in full, modified or refinanced before March 1, 2013, the maturity date of the Credit Facility is March 1, 2013.

 

The Credit Facility is secured by the Company's non-realty assets including cash, accounts receivable and inventories. Interest rates under the Credit Facility are, at the Company's option either at: (i) the prime rate plus the applicable margin, which ranges between 0.0% and 1.0%, based on the Company's total leverage ratio or (ii) the applicable LIBOR rate plus the applicable margin, which ranges between 1.5% and 3.0%, based on the Company's total leverage ratio. Loans under the swingline subfacility will bear interest at the prime rate plus the applicable margin, which ranges between 0.0% and 1.0%, based on the Company's total leverage ratio. The Company is also required to pay a commitment fee which, varies between 0.175% and 0.25% depending on the Company's total leverage ratio.

 

The Credit Facility contains limitations on the incurrence of indebtedness, liens and licensing of intellectual property, investments and certain payments. The Credit Facility permits the Company to engage in the following activities up to an aggregate amount of $250 million: 1) engage in permitted acquisitions in the aggregate not to exceed $250 million; 2) make other investments in the aggregate not to exceed $60 million; 3) make stock repurchases not to exceed $60 million in the aggregate; and 4) retire up to $198 million of CSN. At any time that the total leverage ratio of the Company for the two most recently ended fiscal quarters is less than 2.75 to 1.0, the Company may make an election to reset each of the amounts specified above. Additionally, these limitations can be waived upon the Company's request and approval of a majority of the lenders. As of June 29, 2012, the Company had available to it 100% of the above limits as the Company reset these limits in the second quarter of 2012.

The Credit Facility requires the Company to maintain a rolling four quarter ratio of adjusted EBITDA to interest expense of at least 3.0 to 1.0, and a total leverage ratio of not greater than 4.0 to 1.0. The calculation of adjusted EBITDA and total leverage ratio excludes non-cash charges, extraordinary, unusual, or non-recurring expenses or losses, non-cash stock-based compensation, and non-recurring expenses or charges incurred in connection with permitted acquisitions. As of June 29, 2012, the Company was in compliance with all covenants.

 

The Credit Facility contains customary events of default. Upon the occurrence and during the continuance of an event of default, a majority of the lenders may declare the outstanding advances and all other obligations under the Credit Facility immediately due and payable.

 

The weighted average interest rate on borrowings under the Credit Facility as of June 29, 2012, was 2.08%. As of June 29, 2012, the Company had $353 million of borrowing capacity available under the Credit Facility. This borrowing capacity may vary from period to period based upon the debt levels of the Company and the level of EBITDA, which impacts the covenant calculations described above.

Convertible Subordinated Notes – In March 2007, the Company completed a private placement of $197.8 million of convertible subordinated notes (“CSN”) at a 5% discount. CSN bear interest at 2.25% per annum, payable semi-annually, and are due on June 15, 2013. The holders may convert CSN into shares of the Company's common stock at a conversion price of $34.70 per share, which is equivalent to a conversion ratio of 28.8219 shares per $1,000 of principal. The conversion price and the conversion ratio will adjust automatically upon certain changes to the Company's capitalization. The fair value of CSN as of June 29, 2012 was approximately $196 million and is based on recent sales prices.

 

The effective interest rate of CSN, which takes into consideration the amortization of the discount and deferred fees related to the issuance of these notes, is 8.5%. The discount on CSN is being amortized to the maturity date utilizing the effective interest method. As of June 29, 2012, the carrying amount of the discount related to the CSN conversion option value was $9.7 million. As of June 29, 2012, the if-converted value of the CSN does not exceed their principal amount as the Company's closing stock price of $22.71 per share did not exceed the conversion price of CSN.

 The contractual interest and discount amortization for CSN were as follows (in thousands):
             
  Three Months Ended Six Months Ended
   June 29,  July 1,  June 29,  July 1,
   2012  2011  2012  2011
 Contractual interest$ 1,113 $ 1,113 $ 2,225 $ 2,225
 Discount amortization  2,735   2,558   5,424   5,074

CSN are convertible at the option of the holders at such time as: (i) the closing price of the Company's common stock exceeds 150% of the conversion price of the notes for 20 out of 30 consecutive trading days; (ii) the trading price per $1,000 of principal is less than 98% of the product of the closing sale price of common stock for each day during any five consecutive trading day period and the conversion rate per $1,000 of principal; (iii) CSN have been called for redemption; (iv) the Company distributes to all holders of common stock rights or warrants entitling them to purchase additional shares of common stock at less than the average closing price of common stock for the ten trading days immediately preceding the announcement of the distribution; (v) the Company distributes to all holders of common stock any form of dividend which has a per share value exceeding 5% of the price of the common stock on the day prior to such date of distribution; (vi) the Company effects a consolidation, merger, share exchange or sale of assets pursuant to which its common stock is converted to cash or other property; (vii) the occurrence of the period beginning 60 days prior to but excluding June 15, 2013; and (viii) certain fundamental changes, as defined in the indenture governing the notes, occur or are approved by the Board of Directors.

 

Conversions in connection with corporate transactions that constitute a fundamental change require the Company to pay a premium make-whole amount, based upon a predetermined table as set forth in the indenture, whereby the conversion ratio on the notes may be increased by up to 6.3 shares per $1,000 of principal. The premium make-whole amount will be paid in shares of common stock upon any such conversion, subject to the net share settlement feature of the notes described below.

 

CSN contains a net share settlement feature that requires the Company to pay cash for each $1,000 of principal to be converted. Any amounts in excess of $1,000 will be settled in shares of the Company's common stock, or at the Company's option, cash. The Company has a one-time irrevocable election to pay the holders in shares of its common stock, which it currently does not plan to exercise.

 

CSN are redeemable by the Company at any time on or after June 20, 2012, or at the option of a holder upon the occurrence of certain fundamental changes, as defined in the indenture, affecting the Company. CSN are subordinated in right of payment to all of the Company's senior indebtedness and effectively subordinated to all debts and other liabilities of the Company's subsidiaries. The Company currently intends to use availability under the Credit Facility to repay CSN when they mature.

 

 

 

 

 

 

 

 

Deferred Financing Fees - The change in deferred financing fees is as follows (in thousands):

 AtDecember 30, 2011$3,149
 Amortization during the period (534)
 AtJune 29, 2012$2,615
Defined Benefit Plans
DEFINED BENEFIT PLANS

7. DEFINED BENEFIT PLANS

 

The Company is required to provide its employees located in Switzerland, Mexico and France certain statutorily mandated defined benefits. Under these plans, benefits accrue to employees based upon years of service, position, age and compensation. The defined benefit 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 and France are unfunded and noncontributory. The liability and corresponding expense related to these benefit plans is based on actuarial computations of current and future benefits for employees. As discussed in Note 9Other Operating (Income) Expense, Net,” in the third quarter of 2012, the Company finalized its plan to transfer most major functions currently performed at its facilities in Switzerland into other existing facilities. As a result of this decision, the Company will curtail its defined benefit plan provided to employees at those Swiss facilities in the third quarter of 2012. The Company is currently estimating the impact this defined benefit plan curtailment will have on its Condensed Consolidated Financial Statements.

 The change in net defined benefit plan liability is as follows (in thousands):
     
 AtDecember 30, 2011$5,569
 Net defined benefit cost 617
 Benefit payments (561)
 Foreign currency translation (77)
 AtJune 29, 2012$5,548

 Net defined benefit cost is comprised of the following (in thousands):      
             
  Three Months Ended Six Months Ended
   June 29,  July 1,  June 29,  July 1,
   2012  2011  2012  2011
 Service cost$ 278 $ 278 $ 563 $ 535
 Interest cost  103   120   207   231
 Amortization of net loss   31   20   62   39
 Expected return on plan assets  (107)   (119)   (215)   (229)
 Net defined benefit cost$ 305 $ 299 $ 617 $ 576
             
Stock-Based Compensation
STOCK-BASED COMPENSATION

8. STOCK-BASED COMPENSATION

 The components and classification of stock-based compensation expense were as follows (in thousands):
             
  Three Months Ended Six Months Ended
   June 29,  July 1,  June 29,  July 1,
   2012  2011  2012  2011
 Stock options$ 689 $ 629 $ 1,367 $ 1,163
 Restricted stock and units  1,527   1,091   3,036   2,084
 401(k) stock contribution  1,130   1,328   1,130   2,548
 Total stock-based compensation expense$ 3,346 $ 3,048 $ 5,533 $ 5,795
             
 Cost of sales$ 1,104 $ 1,076 $ 1,367 $ 2,081
 Selling, general and administrative  1,909   1,623   3,726   3,112
 Research, development and engineering  333   349   440   602
 Total stock-based compensation expense$ 3,346 $ 3,048 $ 5,533 $ 5,795

 The weighted average fair value and assumptions used to value options granted are as follows:
  Six Months Ended
   June 29,  July 1,
   2012  2011
 Weighted average fair value$ 8.19 $ 9.42
 Risk-free interest rate 0.83%  2.04%
 Expected volatility 40%  40%
 Expected life (in years)  5   5
 Expected dividend yield 0%  0%

 The following table summarizes time-vested stock option activity:
      Number of Time-Vested Stock Options  Weighted Average Exercise Price  Weighted Average Remaining Contractual Life (In Years)  Aggregate Intrinsic Value (In Millions)
 Outstanding atDecember 30, 2011  1,558,771 $ 23.42      
  Granted  377,826   22.18      
  Exercised  (13,316)   21.44      
  Forfeited or expired  (56,953)   24.05      
 Outstanding atJune 29, 2012  1,866,328 $ 23.17   6.4 $ 2.1
 Exercisable atJune 29, 2012  1,289,902 $ 23.36   5.3 $ 1.8

 The following table summarizes performance-vested stock option activity:
      Number of Performance-Vested Stock Options  Weighted Average Exercise Price  Weighted Average Remaining Contractual Life (In Years)  Aggregate Intrinsic Value (In Millions)
 Outstanding atDecember 30, 2011  478,364 $ 24.44      
  Exercised (5,353)   22.11      
  Forfeited or expired  (177,733)   26.49      
 Outstanding atJune 29, 2012  295,278 $ 23.25  4.8 $0.1
 Exercisable atJune 29, 2012  295,278 $ 23.25  4.8 $0.1

 The following table summarizes time-vested restricted stock and unit activity:
      Time-Vested Activity  Weighted Average Fair Value
 Nonvested atDecember 30, 2011  69,942 $ 22.69
  Granted  80,402   23.41
  Vested  (19,142)   21.86
  Forfeited  (4,679)   22.04
 Nonvested atJune 29, 2012  126,523 $ 23.29

 The following table summarizes performance-vested restricted stock and unit activity:
      Performance-Vested Activity  Weighted Average Fair Value
 Nonvested atDecember 30, 2011  529,743 $ 16.68
  Granted  332,918   15.30
  Vested  (7,500)   24.62
  Forfeited  (38,413)   15.74
 Nonvested atJune 29, 2012  816,748 $ 16.09
Other Operating (Income) Expense, Net
OTHER OPERATING (INCOME) EXPENSE NET

9. OTHER OPERATING (INCOME) EXPENSE, NET

 Other Operating (Income) Expense, Net is comprised of the following (in thousands):
             
  Three Months Ended Six Months Ended
   June 29,  July 1,  June 29,  July 1,
   2012  2011  2012  2011
 Orthopaedic facility optimization(a)$1,978 $22 $2,322 $261
 Medical device facility optimization(b) 565  0  894  0
 ERP system upgrade(c) 1,912  0  2,807  0
 Integration costs(d) 112  0  1,055  0
 Asset dispositions, severance and other(e) 1,356  (542)  1,590  (614)
  $5,923 $(520) $8,668 $(353)

(a) Orthopaedic facility optimization. In 2010, the Company began updating its Indianapolis, IN facility to streamline operations, consolidate two buildings, increase capacity, further expand capabilities and reduce dependence on outside suppliers. This initiative was completed in 2011.

       

In 2011, the Company began construction on an orthopaedic manufacturing facility in Fort Wayne, IN and will transfer the manufacturing operations currently being performed at its Columbia City, IN location into this new facility. The construction of the Fort Wayne facility was completed in June 2012 and the transfer of operations from the Columbia City facility is expected to be completed in the third quarter of 2012.

 

In the third quarter of 2012, the Company finalized plans to transfer most major functions currently performed at its facilities in Orvin and Corgemont, Switzerland into existing facilities in Fort Wayne, IN and Tijuana, Mexico by the end of 2013.

 

The total capital investment expected for these initiatives is between $30 million and $40 million, of which $22 million has been expended to date. Total expense expected to be incurred for these initiatives is between $30 million and $36 million, of which $3.0 million has been incurred to date. All expenses will be recorded within the Implantable Medical segment and are expected to include the following:

 

  • Severance and retention: $11 million - $13 million;
  • Production inefficiencies, moving and revalidation: $3 million - $4 million;
  • Accelerated depreciation and asset write-offs: $10 million - $12 million;
  • Personnel: $5 million - $6 million; and
  • Other: $1 million.

The change in accrued liabilities related to the orthopaedic facility optimization is as follows (in thousands):
                   
   Severance and Retention  Production Inefficiencies, Moving and Revalidation  Accelerated Depreciation/Asset Write-offs  Personnel  Other  Total
AtDecember 30, 2011$0 $0 $0 $0 $0 $0
Restructuring charges 26   1,218  0   624   454   2,322
Cash payments (26)  (1,218)  0  (624)  (454)  (2,322)
AtJune 29, 2012$0 $0 $0 $0 $0 $0

(b) Medical device facility optimization. Near the end of 2011, the Company initiated plans to upgrade and expand its manufacturing infrastructure in order to support its medical device strategy. This will include the transfer of certain product lines to create additional capacity for the manufacture of medical devices, expansion of two existing facilities, as well as the purchase of equipment to enable the production of medical devices. These initiatives are expected to be completed over the next two to three years. Total capital investment under these initiatives is expected to be between $15 million to $20 million of which approximately $3.9 million has been expended to date. Total expenses expected to be incurred on these projects is between $2 million to $3 million of which $0.9 million has been incurred to date. All expenses will be recorded within the Implantable Medical segment and are expected to include the following:

 

  • Production inefficiencies, moving and revalidation: $0.5 million - $1 million;
  • Personnel: $1 million - $1.5 million; and
  • Other: $1.0 million.

The change in accrued liabilities related to the medical device facility expansion is as follows (in thousands):
             
   Production Inefficiencies, Moving and Revalidation  Personnel  Other  Total
AtDecember 30, 2011$0 $0 $0 $0
Restructuring charges  205   99   590   894
Cash payments (205)  (99)  (590)  (894)
AtJune 29, 2012$0 $0 $0 $0

(c) ERP system upgrade. In 2011, the Company initiated plans to upgrade its existing global ERP system. This initiative is expected to be completed over the next two years. Total capital investment under this initiative is expected to be between $4 million to $5 million of which approximately $2.0 million has been expended to date. Total expenses expected to be incurred on this initiative is between $5 million to $7 million of which $2.8 million has been incurred to date. Expenses related to this initiative will be recorded within the applicable segment and corporate cost centers that the expenditures relate to and include the following:

 

  • Training and consulting costs: $3 million - $4.5 million; and
  • Accelerated depreciation and asset write-offs: $2 million – $2.5 million.

 

 

The change in accrued liabilities related to the ERP system upgrade is as follows (in thousands):
          
   Training & Consulting Costs  Accelerated Depreciation/ Asset Write-offs  Total
AtDecember 30, 2011$0 $0 $0
Charges  1,015   1,792  2,807
Write-offs 0  (1,792)  (1,792)
Cash payments (555)  0  (555)
AtJune 29, 2012$460 $0 $460

(d) Integration costs. During 2012, the Company incurred costs related to the integration of Micro Power and NeuroNexus. These expenses were primarily for retention bonuses, travel costs in connection with integration efforts, training and severance, which will not be required or incurred after the integrations are completed.

 

(e) Asset dispositions, severance and other. During 2012 and 2011, the Company recorded (gains) write-downs in connection with various asset disposals, net of insurance proceeds received, if any. Additionally, during the second quarter of 2012, the Company incurred $1.2 million of costs related to the relocation of its global headquarters to Frisco, Texas.

Income Taxes
INCOME TAXES

10. INCOME TAXES

 

The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to several factors, including changes in the mix of the pre-tax income and the jurisdictions to which it relates, changes in tax laws and foreign tax holidays, business reorganizations, settlements with taxing authorities and foreign currency fluctuations.

 

During the first six months of 2012, the balance of unrecognized tax benefits decreased by $0.5 million as a result of the settlement of IRS audits for 2009 and 2010. Approximately $1.0 million of the balance of unrecognized tax benefits would favorably impact the effective tax rate, net of federal benefit on state issues, if recognized. It is reasonably possible that a reduction of up to $0.3 million of the balance of unrecognized tax benefits may occur within the next twelve months as a result of the expiration of applicable statutes of limitation.

Commitments And Contingencies
COMMITMENTS AND CONTINGENCIES

11. COMMITMENTS AND CONTINGENCIES

 

Litigation The Company is a party to various legal actions arising in the normal course of business. While the Company does not believe that the ultimate resolution of any such pending actions will have a material effect on its results of operations, financial position, or cash flows, litigation is subject to inherent uncertainties. If an unfavorable ruling were to occur, there exists the possibility of a material impact in the period in which the ruling occurs.

 

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 aggregate product warranty liability is as follows (in thousands):

 

 AtDecember 30, 2011$2,013
 Additions to warranty reserve 467
 Warranty claims paid (915)
 Foreign currency effect (3)
 AtJune 29, 2012$1,562

Purchase CommitmentsContractual obligations for purchase of goods or services are defined as agreements that are enforceable and legally binding on the Company and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The Company's purchase orders are normally based on current manufacturing needs and are fulfilled by vendors within short time horizons. The Company enters into blanket orders with vendors that have preferred pricing and terms, however these orders are normally cancelable by us without penalty. As of June 29, 2012, the total contractual obligation related to such expenditures is approximately $32.3 million and will primarily be funded by existing cash and cash equivalents, cash flow from operations, or the Credit Facility. The Company also enters into contracts for outsourced services; however, the obligations under these contracts were not significant and the contracts generally contain clauses allowing for cancellation without significant penalty.

 

Operating Leases – The Company is a party to various operating lease agreements for buildings, equipment and software. Estimated future operating lease expense is as follows (in thousands):

 Remainder of2012$ 2,054
 2013  3,722
 2014  3,802
 2015  3,447
 2016  2,996
 Thereafter  2,895
 Total estimated operating lease expense$ 18,916

Foreign Currency Contracts - The Company enters into forward contracts to purchase Mexican pesos in order to hedge the risk of peso-denominated payments associated with the operations at its Tijuana, Mexico facility. The impact to the Company's results of operations from these forward contracts was as follows (in thousands):

  Three Months Ended Six Months Ended
   June 29,  July 1,  June 29,  July 1,
   2012  2011  2012  2011
 Reduction in Cost of Sales$(97) $(173) $(19) $(316)
 Ineffective portion of change in fair value 0  0  0  0

Instrument Type of Hedge  Aggregate Notional Amount Start Date End Date Pesos/$ Fair Value Balance Sheet Location
FX Contract Cash flow $ 3,000 Jan-12 Dec-12 13.0354$(96) Current Liabilities
FX Contract Cash flow   2,100 Jan-12 Dec-12 14.0287 87 Current Assets
FX Contract Cash flow   6,000 Jan-13 Dec-13 13.7462 (10) Current Assets/ Other Assets
FX Contract Cash flow   6,000 Jan-13 Dec-13 14.4395 289 Current Assets/ Other Assets

Self-Insured Medical Plan The Company self-funds the medical insurance coverage provided to its U.S. based employees. The risk to the Company is being limited through the use of stop loss insurance, which has an annual maximum aggregate loss of $13.5 million with a maximum benefit of $1.0 million. As of June 29, 2012, the Company has $1.7 million accrued related to the self-insurance of its medical plan, which is recorded in Accrued Expenses in the Condensed Consolidated Balance Sheet, and is primarily based upon claim history.

Earnings Per Share (Eps)
EARNINGS PER SHARE (EPS)

12. EARNINGS PER SHARE (“EPS”)

 The following table illustrates the calculation of Basic and Diluted EPS (in thousands, except per share amounts):
    Three Months Ended Six Months Ended
    June 29, July 1, June 29, July 1,
    2012 2011 2012 2011
 Numerator for basic and diluted EPS:           
  Net income$ 3,851 $ 8,550 $ 8,318 $ 20,494
               
 Denominator for basic EPS:           
  Weighted average shares outstanding  23,611   23,227   23,515   23,214
 Effect of dilutive securities:           
  Stock options, restricted stock and restricted stock units  265   611   301   553
 Denominator for diluted EPS  23,876   23,838   23,816   23,767
 Basic EPS$0.16 $0.37 $0.35 $0.88
 Diluted EPS$0.16 $0.36 $0.35 $0.86

 The diluted weighted average share calculations do not include the following securities, which are not dilutive to the EPS calculations or the performance criteria have not been met:
           
    Three Months Ended Six Months Ended
    June 29, July 1, June 29, July 1,
    2012 2011 2012 2011
 Time-vested stock options, restricted stock and        
  restricted stock units1,418,000 558,000 1,280,000 671,000
 Performance-vested stock options and restricted       
  stock units718,000 578,000 722,000 596,000

For the 2012 and 2011 periods, no shares related to CSN were included in the diluted EPS calculations as the average share price of the Company's common stock for those periods did not exceed CSN's conversion price per share.

Accumulated Other Comprehensive Income
ACCUMULATED OTHER COMPREHENSIVE INCOME

13. ACCUMULATED OTHER COMPREHENSIVE INCOME

 

 Accumulated Other Comprehensive Income 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
AtDecember 30, 2011$ (2,660) $ (538) $ 11,526 $ 8,328 $ 601 $ 8,929
Unrealized gain on cash flow hedges  -   826   -   826   (289)   537
Realized gain on cash flow hedges  -   (19)   -   (19)   7   (12)
Foreign currency translation loss  -   -   (1,527)   (1,527)  0   (1,527)
AtJune 29, 2012$(2,660) $ 269 $ 9,999 $ 7,608 $ 319 $ 7,927
Fair Value Measurements
FAIR VALUE MEASUREMENTS

14. 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 foreign currency contracts and accrued contingent consideration. 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 receives 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 Cost of Sales as the inventory, which the contracts are hedging the cash flows to produce, is sold, of which approximately $0.2 million is expected to be realized within the next twelve months.

 

Accrued contingent considerationIn circumstances where an acquisition involves a contingent consideration arrangement, the Company recognizes a liability equal to the fair value of the contingent payments it expects to make as of the acquisition date. The Company re-measures this liability each reporting period and records changes in the fair value through Other Operating (Income) Expense, Net. Increases or decreases in the fair value of the contingent consideration liability can result from changes in discount periods and rates, as well as changes in the timing, amount of, or the likelihood of achieving the applicable milestones.

 

The fair value of accrued contingent consideration recorded by the Company represents the estimated fair value of the contingent consideration the Company expects to pay to the former shareholders of NeuroNexus based upon the achievement of certain financial and development-based milestones. The fair value of the contingent consideration liability was estimated by discounting to present value, contingent payments expected to be made. The Company used risk-adjusted discount rates ranging from 12 to 20 percent to derive the fair value of the expected obligations as of the acquisition date, which the Company believes is appropriate and representative of market participant assumptions. The Company's accrued contingent consideration is categorized in Level 3 of the fair value hierarchy. Changes in accrued contingent consideration were as follows (in thousands):

 

 AtDecember 30, 2011$0
 Contingent consideration liability recorded 1,500
 Fair value adjustments 50
 AtJune 29, 2012$1,550

The recurring Level 3 fair value measurements of the Company's contingent consideration liability include the following significant unobservable inputs (dollars in thousands):

   Fair     
 Contingent Value at     
 Consideration June 29, Valuation Unobservable
 Liability 2012 Technique Inputs
 Financial milestones $830 Discounted cash flow Discount rate12%
        Projected year  
        of payment2014
          
 Development milestones  720 Discounted cash flow Discount rate20%
        Projected year  
        of payment2014

The following table provides information regarding assets and liabilities recorded at fair value on a recurring basis in the Condensed Consolidated Balance Sheet (in thousands):
              
   Fair Value Measurements Using
       Quoted      
       Prices in  Significant   
       Active Markets  Other  Significant
    At  for Identical  Observable  Unobservable
    June 29,  Assets  Inputs  Inputs
Description  2012  (Level 1)  (Level 2)  (Level 3)
Assets            
Foreign currency contracts $ 366 $0 $ 366 $0
              
Liabilities            
Foreign currency contracts $ 96 $0 $ 96 $0
Accrued contingent consideration   1,550  0  0  1,550

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

 

Fair value standards also apply to certain nonfinancial assets and liabilities that are measured at fair value on a nonrecurring basis. A summary of the valuation methodologies for the Company's assets and liabilities measured on a nonrecurring basis is as follows:

 

Long-lived assets - The Company reviews the carrying amount of its long-lived assets to be held and used, other than goodwill and indefinite-lived intangible assets, for potential impairment whenever certain indicators are present such as; a significant decrease in the market price of the asset or asset group; a significant change in the extent or manner in which the long-lived asset or asset group is being used or in its physical condition; a significant change in legal factors or in the business climate that could affect the value of the long-lived asset or asset group, including an action or assessment by a regulator; an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of the long-lived asset or asset group; or a current expectation that, more likely than not the long-lived asset or asset group will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The term more likely than not refers to a level of likelihood that is more than 50 percent.

 

If an indicator is present, potential recoverability is measured by comparing the carrying amount of the long-lived asset or asset group to its related total future undiscounted cash flows. If the carrying value is not recoverable, the asset or asset group is considered to be impaired. Impairment is measured by comparing the asset or asset group's carrying amount to its fair value, which is determined by using independent appraisals or discounted cash flow models. The discounted cash flow model requires inputs to a present value cash flow calculation such as a risk-adjusted discount rate, terminal values, operating budgets, long-term strategic plans and remaining useful lives of the asset or asset group. If the carrying value of the long-lived asset or asset group exceeds the fair value, the carrying value is written down to the fair value in the period identified. The Company did not record any impairment charges related to its long-lived assets, other than goodwill and indefinite-lived intangible assets, during the first six months of 2012 or 2011.

 

Goodwill and indefinite-lived intangible assets The Company assess the impairment of goodwill and other indefinite-lived intangible assets on the last day of each fiscal year, or more frequently if certain indicators are present as described above under long-lived assets. The Company assesses goodwill for impairment by comparing the fair value of its reporting units to their carrying amounts. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of the goodwill within the reporting unit is less than its carrying value. Fair values for reporting units are determined based on discounted cash flow models and market multiples. The discounted cash flow model requires inputs to a present value cash flow calculation such as a risk-adjusted discount rate, terminal values, operating budgets, and long-term strategic plans. The fair value from the discounted cash flow model is then combined, based on certain weightings, with market multiples in order to determine the fair value of the reporting unit. These market multiples include revenue multiples and multiples of earnings before interest, taxes, depreciation and amortization.

 

Indefinite-lived intangible assets are assessed for impairment by comparing the fair value of the intangible asset to its carrying value. If the carrying value of the indefinite-lived intangible asset exceeds the fair value, the carrying value is written down to the fair value in the period identified. The fair value of indefinite-lived intangible assets is determined by using a discounted cash flow model. The discounted cash flow model requires inputs to a present value cash flow calculation such as a risk-adjusted discount rate, royalty rates, operating budgets, and long-term strategic plans.

 

Note 5 “Intangible Assets” contains additional information on the Company's intangible assets.

 

Cost method investment - The Company holds investments in equity securities that are accounted for as cost method investments, which are classified as Other Assets, and are measured at fair value only if certain events or circumstances occur that have a significant effect on the fair value of the investment. The aggregate recorded amount of cost method investments at June 29, 2012 and December 30, 2011 was $7.3 million and $5.7 million, respectively.

 

The Company did not record any impairment charges related to its cost method investments during the first six months of 2012. During the second quarter of 2011, the Company recognized impairment charges related to its cost method investments of $0.3 million. The fair value of these investments was determined by reference to recent sales data of similar shares to independent parties in an inactive market. This fair value calculation was categorized in Level 2 of the fair value hierarchy. In the first quarter of 2011, the Company sold its cost method investment in IntElect Medical, Inc. (“IntElect”) in conjunction with Boston Scientific's acquisition of IntElect, which resulted in a pre-tax gain of $4.5 million.

 

Fair Value of Other Financial Instruments

 

Convertible subordinated notes - The fair value of CSN disclosed in Note 6 “Debt” was determined based upon recent third-party transactions for CSN in an inactive market. CSN are valued for disclosure purposes utilizing Level 2 measurements of the fair value hierarchy.

 

Business Segment, Geographic and Concentration Risk Information
BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION

15. BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION

 

The Company operates its business in two reportable segments – Implantable Medical and Electrochem Solutions (“Electrochem”). The Implantable Medical segment (formerly Greatbatch Medical) is comprised of our Greatbatch Medical and QiG Group brands and designs and manufactures medical devices and components for the cardiac rhythm management (“CRM”), neuromodulation, vascular access and orthopaedic markets. Additionally, the Implantable Medical segment offers value-added assembly and design engineering services. As a result of the strategy put in place over three years ago, the Implantable Medical segment offers its customers complete medical devices including design, development, manufacturing, regulatory submission and supporting worldwide distribution. This medical device strategy is being facilitated through the QiG Group and leverages the component technology of Greatbatch Medical in the Company's core markets: cardiovascular, neuromodulation and orthopaedic. The devices designed and developed by the QiG Group are manufactured by Greatbatch Medical.

 

Electrochem designs, manufactures and distributes primary and rechargeable batteries, and battery packs for demanding applications in the portable medical, energy, environmental monitoring and security markets among others. Portable medical product line sales were primarily obtained through the Micro Power acquisition.

 

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. Segment income also includes a portion of non-segment specific selling, general, and administrative expenses based on allocations appropriate to the expense categories. The remaining unallocated operating and other expenses are primarily administrative corporate headquarters expenses and capital costs that are not allocated to reportable segments. Transactions between the two segments are not significant.

 

An analysis and reconciliation of the Company's business segment, product line and geographic information to the respective information in the Condensed Consolidated Financial Statements follows. Sales by geographic area are presented by allocating sales from external customers based on where the products are shipped to (in thousands):

    Three Months Ended Six Months Ended
     June 29,  July 1,  June 29,  July 1,
 Sales: 2012  2011  2012  2011
 Implantable Medical           
  CRM/Neuromodulation$ 80,025 $ 77,724 $ 155,160 $ 155,761
  Vascular Access  12,481   10,769   24,117   21,243
  Orthopaedic  32,860   37,922   63,906   77,511
   Total Implantable Medical  125,366   126,415   243,183   254,515
 Electrochem           
  Portable Medical  20,407   2,012   39,127   4,151
  Energy/Environmental  16,879   16,016   35,249   31,858
  Other  3,896   2,081   8,092   4,834
   Total Electrochem  41,182   20,109   82,468   40,843
   Total sales$ 166,548 $ 146,524 $ 325,651 $ 295,358

    Three Months Ended Six Months Ended
     June 29,  July 1,  June 29,  July 1,
   2012  2011  2012  2011
 Segment income from operations:           
  Implantable Medical$ 11,396 $ 17,700 $ 21,508 $ 36,647
  Electrochem  6,199   4,852   10,670   9,259
 Total segment income from operations  17,595   22,552   32,178   45,906
 Unallocated operating expenses (6,504)  (4,249)  (9,889)  (9,637)
 Operating income as reported  11,091   18,303   22,289   36,269
 Unallocated other expense (4,221)  (5,539)  (9,300)  (5,678)
 Income before provision for income taxes$ 6,870 $ 12,764 $ 12,989 $ 30,591

    Three Months Ended Six Months Ended
     June 29,  July 1,  June 29,  July 1,
   2012  2011  2012  2011
 Sales by geographic area:
  United States$ 84,378 $ 61,092 $ 166,784 $ 126,293
 Non-Domestic locations:           
  Puerto Rico  26,681   24,651   50,221   50,832
  Belgium  15,053   17,628   30,391   36,597
  United Kingdom & Ireland  12,331   17,626   24,688   28,119
  Rest of world  28,105   25,527   53,567   53,517
   Total sales$ 166,548 $ 146,524 $ 325,651 $ 295,358

 Four customers accounted for a significant portion of the Company’s sales as follows:
               
    Three Months Ended Six Months Ended
     June 29,  July 1,  June 29,  July 1,
   2012  2011  2012  2011
 Customer A 18%  19%  19%  20%
 Customer B 15%  17%  14%  17%
 Customer C 10%  14%  10%  14%
 Customer D 6%  8%  7%  8%
     49%  58%  50%  59%

 Long-lived tangible assets by geographic area are as follows (in thousands):
  As of
   June 29,  December 30,
   2012  2011
 United States$ 123,362 $ 113,693
 Rest of world  33,018   32,113
 Total$ 156,380 $ 145,806
Impact of Recently Issued Accounting Standards
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

16. IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

 

In the normal course of business, management evaluates all new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”), Securities and Exchange Commission, Emerging Issues Task Force, American Institute of Certified Public Accountants or other authoritative accounting bodies to determine the potential impact they may have on the Company's Condensed 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 Condensed Consolidated Financial Statements.

 

In July 2012, the FASB issued Accounting Standards Update (“ASU”) No. 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This ASU simplifies the guidance for testing the decline in the realizable value (impairment) of indefinite-lived intangible assets other than goodwill. The amendments allow an organization the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. An organization electing to perform a qualitative assessment is no longer required to calculate the fair value of an indefinite-lived intangible asset unless the organization determines, based on a qualitative assessment, that it is “more likely than not” that the asset is impaired. The amendments in this ASU are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. When adopted, this ASU will not have a material impact on the Company's Condensed Consolidated Financial Statements as it only impacts the timing of when the Company is required to perform the two-step impairment tests of its indefinite-lived intangible assets other than goodwill.

 

In December 2011, the FASB issued ASU No. 2011-11 “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.” This ASU requires companies to provide information about trading in financial instruments and related derivatives in expanded disclosures, creates new disclosure requirements about the nature of an entity's rights of offset and related arrangements associated with its financial instruments and derivative instruments. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods therein, with retrospective application required. When adopted, this ASU will not have a material impact on the Company's Condensed Consolidated Financial Statements as it only changes the disclosures surrounding the Company's offsetting assets and liabilities.

Accounting Policies (Policies)

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information (Accounting Standards Codification (“ASC”) 270, Interim Reporting) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information necessary for a full presentation of financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of Greatbatch, Inc. and its wholly-owned subsidiary, Greatbatch Ltd. (collectively “Greatbatch” or the “Company”), for the periods presented.

The December 30, 2011 condensed consolidated balance sheet data was derived from audited consolidated financial statements but does not include all disclosures required by U.S. GAAP. For further information, refer to the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 30, 2011.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ materially from these estimates.

The Company utilizes a fifty-two, fifty-three week fiscal year ending on the Friday nearest December 31st. The second quarter of 2012 and 2011 each contained 13 weeks and ended on June 29, and July 1, respectively.

IPR&D represents research projects which are expected to generate cash flows but have not yet reached technological feasibility. The primary basis for determining the technological feasibility of these projects is whether or not regulatory approval has been obtained. The Company classifies IPR&D acquired in a business combination as an indefinite-lived intangible asset until the completion or abandonment of the associated projects. Upon completion, the Company would determine the useful life of the IPR&D and begin amortizing the assets to reflect their use over their remaining lives. Upon permanent abandonment, the remaining carrying amount of the associated IPR&D would be written-off. The Company will test the IPR&D acquired for impairment at least annually, and more frequently if events or changes in circumstances indicate that the assets may be impaired. The impairment test consists of a comparison of the fair value of the intangible assets with their carrying amount. If the carrying amount exceeds its fair value, the Company would record an impairment loss in an amount equal to the excess.

The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to several factors, including changes in the mix of the pre-tax income and the jurisdictions to which it relates, changes in tax laws and foreign tax holidays, business reorganizations, settlements with taxing authorities and foreign currency fluctuations.

In circumstances where an acquisition involves a contingent consideration arrangement, the Company recognizes a liability equal to the fair value of the contingent payments it expects to make as of the acquisition date. The Company re-measures this liability each reporting period and records changes in the fair value through Other Operating (Income) Expense, Net. Increases or decreases in the fair value of the contingent consideration liability can result from changes in discount periods and rates, as well as changes in the timing, amount of, or the likelihood of achieving the applicable milestones.

The Company reviews the carrying amount of its long-lived assets to be held and used, other than goodwill and indefinite-lived intangible assets, for potential impairment whenever certain indicators are present such as; a significant decrease in the market price of the asset or asset group; a significant change in the extent or manner in which the long-lived asset or asset group is being used or in its physical condition; a significant change in legal factors or in the business climate that could affect the value of the long-lived asset or asset group, including an action or assessment by a regulator; an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of the long-lived asset or asset group; or a current expectation that, more likely than not the long-lived asset or asset group will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The term more likely than not refers to a level of likelihood that is more than 50 percent.

 

If an indicator is present, potential recoverability is measured by comparing the carrying amount of the long-lived asset or asset group to its related total future undiscounted cash flows. If the carrying value is not recoverable, the asset or asset group is considered to be impaired. Impairment is measured by comparing the asset or asset group's carrying amount to its fair value, which is determined by using independent appraisals or discounted cash flow models. The discounted cash flow model requires inputs to a present value cash flow calculation such as a risk-adjusted discount rate, terminal values, operating budgets, long-term strategic plans and remaining useful lives of the asset or asset group. If the carrying value of the long-lived asset or asset group exceeds the fair value, the carrying value is written down to the fair value in the period identified.

The Company assess the impairment of goodwill and other indefinite-lived intangible assets on the last day of each fiscal year, or more frequently if certain indicators are present as described above under long-lived assets. The Company assesses goodwill for impairment by comparing the fair value of its reporting units to their carrying amounts. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of the goodwill within the reporting unit is less than its carrying value.

Indefinite-lived intangible assets are assessed for impairment by comparing the fair value of the intangible asset to its carrying value. If the carrying value of the indefinite-lived intangible asset exceeds the fair value, the carrying value is written down to the fair value in the period identified.

The Company holds investments in equity securities that are accounted for as cost method investments, which are classified as Other Assets, and are measured at fair value only if certain events or circumstances occur that have a significant effect on the fair value of the investment.

Acquistions (Tables)
 Assets acquired
  Current assets $ 618 
  Property, plant and equipment   35 
  Amortizing intangible assets   2,927 
  Indefinite-lived intangible assets   540 
  Goodwill   8,875 
  Other assets   1,576 
 Total assets acquired 14,571 
 Liabilities assumed   
  Current liabilities  420 
  Deferred income taxes  940 
 Total liabilities assumed  1,360 
 Purchase price$13,211 
      Weighted Weighted Weighted
   Fair Average Average Average
   Value Amortization Useful Discount
   Assigned Period (Years) Life (Years) Rate
 Amortizing Intangible Assets         
 Technology and patents $1,058 6 10 14%
 Customer lists  1,869 7 15 13%
   $2,927 7 13 13%
      Weighted Weighted Weighted
   Fair Average Average Average
   Value Amortization Useful Discount
   Assigned Period (Years) Life (Years) Rate
 Indefinite-lived Intangible Assets       
 In-process research and development $540 N/A 12 26%
    Three Months Ended Six Months Ended
    June 29, July 1, June 29, July 1,
    2012 2011 2012 2011
               
 Sales$166,548 $163,613 $326,091 $328,168
 Net income 3,851  8,291  8,144  19,492
 Earnings per share:           
  Basic$0.16 $0.36 $0.35 $0.84
  Diluted$0.16 $0.35 $0.34 $0.82
Supplemental Cash Flow Information (Tables)
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]
    Six Months Ended
     June 29,  July 1,
 (in thousands) 2012  2011
 Noncash investing and financing activities:
  Common stock contributed to 401(k) Plan$4,793 $0
  Property, plant and equipment purchases included      
   in accounts payable 5,624   470
         
 Cash paid during the period for:     
  Interest$ 2,909 $ 3,327
  Income taxes  983   2,409
         
 Acquisition of noncash assets $ 14,379 $ 3,125
 Liabilities assumed 1,226  0
Inventories (Tables)
Schedule of Inventory, Current [Table Text Block]
 Inventories are comprised of the following (in thousands):
       
  As of
   June 29,  December 30,
   2012  2011
 Raw materials$ 53,498 $ 49,773
 Work-in-process  39,276   36,603
 Finished goods  20,883   23,537
 Total$ 113,657 $ 109,913
Intangible Assets (Tables)
 Amortizing intangible assets are comprised of the following (in thousands):
              
 AtJune 29, 2012 Gross Carrying Amount  Accumulated Amortization  Foreign Currency Translation  Net Carrying Amount
 Technology and patents$ 98,382 $ (58,121) $ 746 $ 41,007
 Customer lists  68,257   (16,971)   1,722   53,008
 Other  4,812   (4,198)   733   1,347
 Total amortizing intangible assets$ 171,451 $ (79,290) $ 3,201 $ 95,362
              
 AtDecember 30, 2011           
 Technology and patents$ 97,324 $ (54,054) $ 842 $ 44,112
 Customer lists  66,388   (14,009)   1,807   54,186
 Other  5,174   (4,019)   805   1,960
 Total amortizing intangible assets$ 168,886 $ (72,082) $ 3,454 $ 100,258
 Aggregate intangible asset amortization expense is comprised of the following (in thousands):
             
  Three Months Ended Six Months Ended
  June 29, July 1, June 29, July 1,
  2012 2011 2012 2011
 Cost of sales$ 1,900 $ 1,648 $ 3,795 $ 3,149
 Selling, general and administrative expenses  1,579   974   3,140   1,927
 Research, development and engineering costs, net  137   -   273   -
 Total intangible asset amortization expense$ 3,616 $ 2,622 $ 7,208 $ 5,076
 Estimated future intangible asset amortization expense based on the current carrying value is as follows (in thousands):
   Estimated
   Amortization
   Expense
 Remainder of2012$ 7,161
 2013  13,616
 2014  13,615
 2015  12,513
 2016  10,198
 Thereafter  38,259
 Total estimated amortization expense$ 95,362
 The change in indefinite-lived intangible assets is as follows (in thousands):
           
    Trademarks and Tradenames  IPR&D  Total
 AtDecember 30, 2011$ 20,288 $0 $ 20,288
 Indefinite-lived assets acquired 0   540   540
 AtJune 29, 2012$ 20,288 $ 540 $ 20,828
           
 The change in goodwill is as follows (in thousands):
           
    Implantable Medical  Electrochem  Total
 AtDecember 30, 2011$ 297,232 $ 41,421 $ 338,653
 Goodwill acquired  8,875  331   9,206
 Foreign currency translation  (569)  0   (569)
 AtJune 29, 2012$ 305,538 $ 41,752 $ 347,290
Debt (Tables)
 Long-term debt is comprised of the following (in thousands):
   As of
    June 29,  December 30,
    2012  2011
 Revolving line of credit$ 47,000 $ 55,000
 2.25% convertible subordinated notes, due 2013  197,782   197,782
 Unamortized discount  (11,408)   (16,832)
  Total long-term debt$ 233,374 $ 235,950
 The contractual interest and discount amortization for CSN were as follows (in thousands):
             
  Three Months Ended Six Months Ended
   June 29,  July 1,  June 29,  July 1,
   2012  2011  2012  2011
 Contractual interest$ 1,113 $ 1,113 $ 2,225 $ 2,225
 Discount amortization  2,735   2,558   5,424   5,074
 AtDecember 30, 2011$3,149
 Amortization during the period (534)
 AtJune 29, 2012$2,615
Defined Benefit Plans (Tables)
 The change in net defined benefit plan liability is as follows (in thousands):
     
 AtDecember 30, 2011$5,569
 Net defined benefit cost 617
 Benefit payments (561)
 Foreign currency translation (77)
 AtJune 29, 2012$5,548
 Net defined benefit cost is comprised of the following (in thousands):      
             
  Three Months Ended Six Months Ended
   June 29,  July 1,  June 29,  July 1,
   2012  2011  2012  2011
 Service cost$ 278 $ 278 $ 563 $ 535
 Interest cost  103   120   207   231
 Amortization of net loss   31   20   62   39
 Expected return on plan assets  (107)   (119)   (215)   (229)
 Net defined benefit cost$ 305 $ 299 $ 617 $ 576
             
Stock-Based Compensation (Tables)
 The components and classification of stock-based compensation expense were as follows (in thousands):
             
  Three Months Ended Six Months Ended
   June 29,  July 1,  June 29,  July 1,
   2012  2011  2012  2011
 Stock options$ 689 $ 629 $ 1,367 $ 1,163
 Restricted stock and units  1,527   1,091   3,036   2,084
 401(k) stock contribution  1,130   1,328   1,130   2,548
 Total stock-based compensation expense$ 3,346 $ 3,048 $ 5,533 $ 5,795
             
 Cost of sales$ 1,104 $ 1,076 $ 1,367 $ 2,081
 Selling, general and administrative  1,909   1,623   3,726   3,112
 Research, development and engineering  333   349   440   602
 Total stock-based compensation expense$ 3,346 $ 3,048 $ 5,533 $ 5,795
 The weighted average fair value and assumptions used to value options granted are as follows:
  Six Months Ended
   June 29,  July 1,
   2012  2011
 Weighted average fair value$ 8.19 $ 9.42
 Risk-free interest rate 0.83%  2.04%
 Expected volatility 40%  40%
 Expected life (in years)  5   5
 Expected dividend yield 0%  0%
 The following table summarizes time-vested stock option activity:
      Number of Time-Vested Stock Options  Weighted Average Exercise Price  Weighted Average Remaining Contractual Life (In Years)  Aggregate Intrinsic Value (In Millions)
 Outstanding atDecember 30, 2011  1,558,771 $ 23.42      
  Granted  377,826   22.18      
  Exercised  (13,316)   21.44      
  Forfeited or expired  (56,953)   24.05      
 Outstanding atJune 29, 2012  1,866,328 $ 23.17   6.4 $ 2.1
 Exercisable atJune 29, 2012  1,289,902 $ 23.36   5.3 $ 1.8

 The following table summarizes performance-vested stock option activity:
      Number of Performance-Vested Stock Options  Weighted Average Exercise Price  Weighted Average Remaining Contractual Life (In Years)  Aggregate Intrinsic Value (In Millions)
 Outstanding atDecember 30, 2011  478,364 $ 24.44      
  Exercised (5,353)   22.11      
  Forfeited or expired  (177,733)   26.49      
 Outstanding atJune 29, 2012  295,278 $ 23.25  4.8 $0.1
 Exercisable atJune 29, 2012  295,278 $ 23.25  4.8 $0.1
 The following table summarizes time-vested restricted stock and unit activity:
      Time-Vested Activity  Weighted Average Fair Value
 Nonvested atDecember 30, 2011  69,942 $ 22.69
  Granted  80,402   23.41
  Vested  (19,142)   21.86
  Forfeited  (4,679)   22.04
 Nonvested atJune 29, 2012  126,523 $ 23.29

 The following table summarizes performance-vested restricted stock and unit activity:
      Performance-Vested Activity  Weighted Average Fair Value
 Nonvested atDecember 30, 2011  529,743 $ 16.68
  Granted  332,918   15.30
  Vested  (7,500)   24.62
  Forfeited  (38,413)   15.74
 Nonvested atJune 29, 2012  816,748 $ 16.09
Other Operating (Income) Expense (Tables)
 Other Operating (Income) Expense, Net is comprised of the following (in thousands):
             
  Three Months Ended Six Months Ended
   June 29,  July 1,  June 29,  July 1,
   2012  2011  2012  2011
 Orthopaedic facility optimization(a)$1,978 $22 $2,322 $261
 Medical device facility optimization(b) 565  0  894  0
 ERP system upgrade(c) 1,912  0  2,807  0
 Integration costs(d) 112  0  1,055  0
 Asset dispositions, severance and other(e) 1,356  (542)  1,590  (614)
  $5,923 $(520) $8,668 $(353)
The change in accrued liabilities related to the orthopaedic facility optimization is as follows (in thousands):
                   
   Severance and Retention  Production Inefficiencies, Moving and Revalidation  Accelerated Depreciation/Asset Write-offs  Personnel  Other  Total
AtDecember 30, 2011$0 $0 $0 $0 $0 $0
Restructuring charges 26   1,218  0   624   454   2,322
Cash payments (26)  (1,218)  0  (624)  (454)  (2,322)
AtJune 29, 2012$0 $0 $0 $0 $0 $0

The change in accrued liabilities related to the medical device facility expansion is as follows (in thousands):
             
   Production Inefficiencies, Moving and Revalidation  Personnel  Other  Total
AtDecember 30, 2011$0 $0 $0 $0
Restructuring charges  205   99   590   894
Cash payments (205)  (99)  (590)  (894)
AtJune 29, 2012$0 $0 $0 $0

The change in accrued liabilities related to the ERP system upgrade is as follows (in thousands):
          
   Training & Consulting Costs  Accelerated Depreciation/ Asset Write-offs  Total
AtDecember 30, 2011$0 $0 $0
Charges  1,015   1,792  2,807
Write-offs 0  (1,792)  (1,792)
Cash payments (555)  0  (555)
AtJune 29, 2012$460 $0 $460
Commitments and Contingencies (Tables)
 AtDecember 30, 2011$2,013
 Additions to warranty reserve 467
 Warranty claims paid (915)
 Foreign currency effect (3)
 AtJune 29, 2012$1,562
 Remainder of2012$ 2,054
 2013  3,722
 2014  3,802
 2015  3,447
 2016  2,996
 Thereafter  2,895
 Total estimated operating lease expense$ 18,916
  Three Months Ended Six Months Ended
   June 29,  July 1,  June 29,  July 1,
   2012  2011  2012  2011
 Reduction in Cost of Sales$(97) $(173) $(19) $(316)
 Ineffective portion of change in fair value 0  0  0  0
Instrument Type of Hedge  Aggregate Notional Amount Start Date End Date Pesos/$ Fair Value Balance Sheet Location
FX Contract Cash flow $ 3,000 Jan-12 Dec-12 13.0354$(96) Current Liabilities
FX Contract Cash flow   2,100 Jan-12 Dec-12 14.0287 87 Current Assets
FX Contract Cash flow   6,000 Jan-13 Dec-13 13.7462 (10) Current Assets/ Other Assets
FX Contract Cash flow   6,000 Jan-13 Dec-13 14.4395 289 Current Assets/ Other Assets
Earnings Per Share (Tables)
 The following table illustrates the calculation of Basic and Diluted EPS (in thousands, except per share amounts):
    Three Months Ended Six Months Ended
    June 29, July 1, June 29, July 1,
    2012 2011 2012 2011
 Numerator for basic and diluted EPS:           
  Net income$ 3,851 $ 8,550 $ 8,318 $ 20,494
               
 Denominator for basic EPS:           
  Weighted average shares outstanding  23,611   23,227   23,515   23,214
 Effect of dilutive securities:           
  Stock options, restricted stock and restricted stock units  265   611   301   553
 Denominator for diluted EPS  23,876   23,838   23,816   23,767
 Basic EPS$0.16 $0.37 $0.35 $0.88
 Diluted EPS$0.16 $0.36 $0.35 $0.86
 The diluted weighted average share calculations do not include the following securities, which are not dilutive to the EPS calculations or the performance criteria have not been met:
           
    Three Months Ended Six Months Ended
    June 29, July 1, June 29, July 1,
    2012 2011 2012 2011
 Time-vested stock options, restricted stock and        
  restricted stock units1,418,000 558,000 1,280,000 671,000
 Performance-vested stock options and restricted       
  stock units718,000 578,000 722,000 596,000
Comprehensive Income (Tables)
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]
 Accumulated Other Comprehensive Income 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
AtDecember 30, 2011$ (2,660) $ (538) $ 11,526 $ 8,328 $ 601 $ 8,929
Unrealized gain on cash flow hedges  -   826   -   826   (289)   537
Realized gain on cash flow hedges  -   (19)   -   (19)   7   (12)
Foreign currency translation loss  -   -   (1,527)   (1,527)  0   (1,527)
AtJune 29, 2012$(2,660) $ 269 $ 9,999 $ 7,608 $ 319 $ 7,927
Fair Value (Tables)
 AtDecember 30, 2011$0
 Contingent consideration liability recorded 1,500
 Fair value adjustments 50
 AtJune 29, 2012$1,550
   Fair     
 Contingent Value at     
 Consideration June 29, Valuation Unobservable
 Liability 2012 Technique Inputs
 Financial milestones $830 Discounted cash flow Discount rate12%
        Projected year  
        of payment2014
          
 Development milestones  720 Discounted cash flow Discount rate20%
        Projected year  
        of payment2014
The following table provides information regarding assets and liabilities recorded at fair value on a recurring basis in the Condensed Consolidated Balance Sheet (in thousands):
              
   Fair Value Measurements Using
       Quoted      
       Prices in  Significant   
       Active Markets  Other  Significant
    At  for Identical  Observable  Unobservable
    June 29,  Assets  Inputs  Inputs
Description  2012  (Level 1)  (Level 2)  (Level 3)
Assets            
Foreign currency contracts $ 366 $0 $ 366 $0
              
Liabilities            
Foreign currency contracts $ 96 $0 $ 96 $0
Accrued contingent consideration   1,550  0  0  1,550
Business Segment (Tables)
 Long-lived tangible assets by geographic area are as follows (in thousands):
  As of
   June 29,  December 30,
   2012  2011
 United States$ 123,362 $ 113,693
 Rest of world  33,018   32,113
 Total$ 156,380 $ 145,806
    Three Months Ended Six Months Ended
     June 29,  July 1,  June 29,  July 1,
   2012  2011  2012  2011
 Sales by geographic area:
  United States$ 84,378 $ 61,092 $ 166,784 $ 126,293
 Non-Domestic locations:           
  Puerto Rico  26,681   24,651   50,221   50,832
  Belgium  15,053   17,628   30,391   36,597
  United Kingdom & Ireland  12,331   17,626   24,688   28,119
  Rest of world  28,105   25,527   53,567   53,517
   Total sales$ 166,548 $ 146,524 $ 325,651 $ 295,358
    Three Months Ended Six Months Ended
     June 29,  July 1,  June 29,  July 1,
 Sales: 2012  2011  2012  2011
 Implantable Medical           
  CRM/Neuromodulation$ 80,025 $ 77,724 $ 155,160 $ 155,761
  Vascular Access  12,481   10,769   24,117   21,243
  Orthopaedic  32,860   37,922   63,906   77,511
   Total Implantable Medical  125,366   126,415   243,183   254,515
 Electrochem           
  Portable Medical  20,407   2,012   39,127   4,151
  Energy/Environmental  16,879   16,016   35,249   31,858
  Other  3,896   2,081   8,092   4,834
   Total Electrochem  41,182   20,109   82,468   40,843
   Total sales$ 166,548 $ 146,524 $ 325,651 $ 295,358
    Three Months Ended Six Months Ended
     June 29,  July 1,  June 29,  July 1,
   2012  2011  2012  2011
 Segment income from operations:           
  Implantable Medical$ 11,396 $ 17,700 $ 21,508 $ 36,647
  Electrochem  6,199   4,852   10,670   9,259
 Total segment income from operations  17,595   22,552   32,178   45,906
 Unallocated operating expenses (6,504)  (4,249)  (9,889)  (9,637)
 Operating income as reported  11,091   18,303   22,289   36,269
 Unallocated other expense (4,221)  (5,539)  (9,300)  (5,678)
 Income before provision for income taxes$ 6,870 $ 12,764 $ 12,989 $ 30,591
 Four customers accounted for a significant portion of the Company’s sales as follows:
               
    Three Months Ended Six Months Ended
     June 29,  July 1,  June 29,  July 1,
   2012  2011  2012  2011
 Customer A 18%  19%  19%  20%
 Customer B 15%  17%  14%  17%
 Customer C 10%  14%  10%  14%
 Customer D 6%  8%  7%  8%
     49%  58%  50%  59%
Basis of Presentation (Details)
3 Months Ended
Jun. 29, 2012
Jul. 1, 2011
Basis of Presentation [Abstract]
 
 
Weeks In Reporting Period
13 
13 
Acquisitions (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
0 Months Ended 6 Months Ended 0 Months Ended 6 Months Ended
Feb. 16, 2012
NeuroNexus Technologies, Inc. Feb.16, 2012 [Member]
Jun. 29, 2012
NeuroNexus Technologies, Inc. Feb.16, 2012 [Member]
Dec. 15, 2011
Micro Power Electronics, Inc. Dec. 15, 2011 [Member]
Jun. 29, 2012
Micro Power Electronics, Inc. Dec. 15, 2011 [Member]
Business Acquisition [Line Items]
 
 
 
 
Business Acquisition, Name of Acquired Entity
NeuroNexus Technologies, Inc. 
 
Micro Power Electronics, Inc. 
 
Business Acquisition, Description of Acquired Entity
NeuroNexus is an active implantable medical device design firm specializing in developing and commercializing neural interface technology, components and systems for neuroscience and clinical markets. NeuroNexus has an extensive intellectual property portfolio, core technologies and capabilities to support the development and manufacturing of neural interface devices across a wide range of applications including neuromodulation, sensing, optical stimulation and targeted drug delivery. 
 
Micro Power is a leading supplier of custom battery solutions, serving the portable medical, military and handheld automatic identification and data collection markets. 
 
Total revenue included from the acquired entity
 
$ 1.0 
 
 
Total net income included from the acquired entity
 
(0.2)
 
 
Business Acquisition, Cost of Acquired Entity, Cash Paid
11.7 
 
71.8 
 
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High
 
 
 
Business Acquisition, Contingent Consideration, at Fair Value
1.5 
 
 
 
Business Acquisition, Purchase Price Allocation, Status
The value assigned to certain assets and liabilities are preliminary and are subject to adjustment as additional information is obtained, including, but not limited to, the finalization of pre-acquisition tax positions. The valuation is expected to be finalized in 2012. 
 
The value assigned to certain assets and liabilities are preliminary and are subject to adjustment as additional information is obtained, including, but not limited to, the finalization of pre-acquisition tax positions. The valuation will be finalized in 2012. 
 
Adjustment To Purchase Price Allocation Tradename
 
 
 
(0.4)
Purchase price allocation adjustment - deferred tax liability
 
 
 
(0.1)
Adjustment To Purchase Price Allocation Goodwill
 
 
 
$ 0.3 
Acquisitions (Details 1) (USD $)
In Thousands, unless otherwise specified
Feb. 16, 2012
Feb. 16, 2012
NeuroNexus Technologies, Inc. Feb.16, 2012 [Member]
Dec. 15, 2011
Micro Power Electronics, Inc. Dec. 15, 2011 [Member]
Business Acquisition [Line Items]
 
 
 
Current assets
 
$ 618 
 
Property, plant and equiptment
 
35 
 
Amortizing intangible assets
2,927 
2,927 
 
Indefinite-lived intangible assets
 
540 
 
Goodwill
 
8,875 
 
Other assets
 
1,576 
 
Total assets acquired
 
14,571 
88,200 
Current liabilities
 
420 
 
Deferred income taxes
 
940 
 
Total liabilities assumed
 
1,360 
16,400 
Net assets acquired
 
$ 13,211 
 
Acquisitions (Details 2) (USD $)
0 Months Ended
Feb. 16, 2012
Y
Acquired Finite-Lived Intangible Assets [Line Items]
 
Amortizing intangible assets
$ 2,927,000 
Weighted Average Amortization Period (Years)
Weighted Average Useful Life (Years)
13 years 
Weighted Average Discount Rate
13.00% 
In-process research and development
 
Acquired Indefinite-lived Intangible Assets [Line Items]
 
Indefinite-lived intangible assets
540,000 
Weighted Average Useful Life (Years)
12 years 
Weighted Average Discount Rate
26.00% 
Estimated Total Cost To Complete In Process Research And Development Programs Acquired
1,500,000 
Estimated Year Of Completion Of In Process Research And Development Programs Acquired
2014 
Technology and patents [Member]
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
Amortizing intangible assets
1,058,000 
Weighted Average Amortization Period (Years)
Weighted Average Useful Life (Years)
10 years 
Weighted Average Discount Rate
14.00% 
Minimum royalty rate assumed in valuation
2.00% 
Maximum rate assumed in valuation
6.00% 
Customer lists [Member]
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
Amortizing intangible assets
$ 1,869,000 
Weighted Average Amortization Period (Years)
Weighted Average Useful Life (Years)
15 years 
Weighted Average Discount Rate
13.00% 
Acquisitions (Details 3) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 29, 2012
Jul. 1, 2011
Jun. 29, 2012
Jul. 1, 2011
Business Acquisition, Pro Forma Information [Abstract]
 
 
 
 
Sales
$ 166,548 
$ 163,613 
$ 326,091 
$ 328,168 
Net income
$ 3,851 
$ 8,291 
$ 8,144 
$ 19,492 
Basic earnings per share
$ 0.16 
$ 0.36 
$ 0.35 
$ 0.84 
Diluted earnings per share
$ 0.16 
$ 0.35 
$ 0.34 
$ 0.82 
Supplemental Cash Flow Information (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 29, 2012
Jul. 1, 2011
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract]
 
 
Stock Issued During Period, Value, Employee Benefit Plan
$ 4,793 
$ 0 
Property, plant and equipment purchases included in accounts payable
5,624 
470 
Interest Paid
2,909 
3,327 
Income Taxes Paid
983 
2,409 
Acquisition of noncash assts
14,379 
3,125 
Liabilities Assumed
$ 1,226 
$ 0 
Inventories (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 29, 2012
Dec. 30, 2011
Inventory Disclosure [Abstract]
 
 
Inventory Raw Materials
$ 53,498 
$ 49,773 
Inventory, Work in Process
39,276 
36,603 
Inventory, Finished Goods
20,883 
23,537 
Inventories
$ 113,657 
$ 109,913 
Intangible Assets (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 29, 2012
Dec. 30, 2011
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-Lived Intangible Assets, Gross
$ 171,451 
$ 168,886 
Finite-Lived Intangible Assets, Accumulated Amortization
(79,290)
(72,082)
Foreign Currency Translation
3,201 
3,454 
Amortizing intangible assets, net
95,362 
100,258 
Purchased Technology And Patents [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-Lived Intangible Assets, Gross
98,382 
97,324 
Finite-Lived Intangible Assets, Accumulated Amortization
(58,121)
(54,054)
Foreign Currency Translation
746 
842 
Amortizing intangible assets, net
41,007 
44,112 
Customer Lists [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-Lived Intangible Assets, Gross
68,257 
66,388 
Finite-Lived Intangible Assets, Accumulated Amortization
(16,971)
(14,009)
Foreign Currency Translation
1,722 
1,807 
Amortizing intangible assets, net
53,008 
54,186 
Other Intangible Assets [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-Lived Intangible Assets, Gross
4,812 
5,174 
Finite-Lived Intangible Assets, Accumulated Amortization
(4,198)
(4,019)
Foreign Currency Translation
733 
805 
Amortizing intangible assets, net
$ 1,347 
$ 1,960 
Intangible Assets (Details 1) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 29, 2012
Jul. 1, 2011
Jun. 29, 2012
Jul. 1, 2011
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
Finite-Lived Intangible Assets, Amortization Expense
$ 3,616 
$ 2,622 
$ 7,208 
$ 5,076 
Future Amortization Expense, Remainder of Fiscal Year
 
 
7,161 
 
Future Amortization Expense, Year Two
 
 
13,616 
 
Future Amortization Expense, Year Three
 
 
13,615 
 
Future Amortization Expense, Year Four
 
 
12,513 
 
Future Amortization Expense, Year Five
 
 
10,198 
 
Future Amortization Expense, after Year Five
 
 
38,259 
 
Finite-Lived Intangible Assets, Future Amortization Expense
 
 
95,362 
 
Cost of Sales [Member]
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
Finite-Lived Intangible Assets, Amortization Expense
1,900 
1,648 
3,795 
3,149 
Selling General And Administrative Expense [Member]
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
Finite-Lived Intangible Assets, Amortization Expense
1,579 
974 
3,140 
1,927 
Research and Development Expense [Member]
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
Finite-Lived Intangible Assets, Amortization Expense
$ 137 
$ 0 
$ 273 
$ 0 
Intangible Assets (Details 3) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 29, 2012
Indefinite-lived Intangible Assets [Roll Forward]
 
Indefinite-lived intangible assets, beginning
$ 20,288 
Indefinite-lived assets acquired
540 
Indefinite-lived intangible assets, ending
20,828 
Goodwill [Roll Forward]
 
Goodwill
338,653 
Goodwill, Acquired During Period
9,206 
Goodwill, Translation Adjustments
(569)
Goodwill
347,290 
Implantable Medical [Member]
 
Goodwill [Roll Forward]
 
Goodwill
297,232 
Goodwill, Acquired During Period
8,875 
Goodwill, Translation Adjustments
(569)
Goodwill
305,538 
Electrochem [Member]
 
Goodwill [Roll Forward]
 
Goodwill
41,421 
Goodwill, Acquired During Period
331 
Goodwill, Translation Adjustments
Goodwill
41,752 
Trademarks and Tradenames [Member]
 
Indefinite-lived Intangible Assets [Roll Forward]
 
Indefinite-lived intangible assets, beginning
20,288 
Indefinite-lived assets acquired
Indefinite-lived intangible assets, ending
20,288 
IPR&D [Member]
 
Indefinite-lived Intangible Assets [Roll Forward]
 
Indefinite-lived intangible assets, beginning
Indefinite-lived assets acquired
540 
Indefinite-lived intangible assets, ending
$ 540 
Debt (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 29, 2012
Dec. 30, 2011
Debt Disclosure [Abstract]
 
 
Line of Credit Facility, Amount Outstanding
$ 47,000 
$ 55,000 
Convertible Subordinated Debt
197,782 
197,782 
Debt Instrument, Unamortized Discount
11,408 
16,832 
Long-term debt
$ 233,374 
$ 235,950 
Debt (Details 1) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 29, 2012
Line of Credit Facility [Abstract]
 
Line of Credit Facility, Maximum Borrowing Capacity
$ 400 
Line Of Credit Facility Borrowing Capacity Increase
200 
Letter of Credit Subfacility Maximum Borrowing Capacity
15 
Swingline Subfacility Maximum Borrowing Capacity
15 
Line of Credit Facility, Expiration Date
June 24, 2016 
Accelerated Line Of Credit Facility Expiration Date
March 1, 2013 
Line of Credit Facility, Collateral
The Credit Facility is secured by the Company’s non-realty assets including cash, accounts receivable and inventories. 
Interest Margin Above Prime Minimum LOC
0.00% 
Interest Margin Above Prime Maximum LOC
1.00% 
Interest Margin Above LIBOR Minimum LOC
1.50% 
Interest Margin Above LIBOR Maximum LOC
3.00% 
Interest Margin Above Prime Minimum Swingline
0.00% 
Interest Margin Above Prime Maximum Swingline
1.00% 
Line Of Credit Facility Commitment Fee Percentage Minimum
0.175% 
Line Of Credit Facility Commitment Fee Percentage Maximum
0.25% 
Line Of Credit Aggregate Restricted Activities Limit
250 
Line Of Credit Maximum Permitted Acquisitions
250 
Line Of Credit Maximum Other Investment Purchases
60 
Line Of Credit Maximum Stock Repurchases
60 
Line Of Credit Maximum Convertible Debt Retirement
198 
Leverage Ratio Required To Reset Credit Facility Restrictions
2.75 to 1.0 
Credit Facility Restriction Available
100.00% 
EBITDA Covenant Restriction
3.0 to 1.0 
Total Leverage Covenant Restriction
4.0 to 1.0 
Line of Credit Facility, Covenant Compliance
As of June 29, 2012, the Company was in compliance with all covenants. 
Line of Credit Facility, Interest Rate at Period End
2.08% 
Line of Credit Facility, Remaining Borrowing Capacity
$ 353 
Debt (Details 2) (USD $)
6 Months Ended
Jun. 29, 2012
Dec. 30, 2011
Debt Instruments [Abstract]
 
 
Debt Instrument, Issuance Date
March 2007 
 
Convertible Subordinated Debt
$ 197,782,000 
$ 197,782,000 
Debt Discount Percentage at Issuance
5.00% 
 
Debt Instrument, Interest Rate, Stated Percentage
2.25% 
 
Debt Instrument, Frequency of Periodic Payment
semi-annually 
 
Debt Instrument, Maturity Date
Jun. 15, 2013 
 
Debt Instrument, Convertible, Conversion Price
$ 34.70 
 
Debt Instrument, Convertible, Conversion Ratio
28.8219 
 
Debt Instrument, Face Amount
1,000 
 
Convertible Subordinated Notes Fair Value
196,000,000 
 
Debt Instrument, Interest Rate During Period
8.50% 
 
Debt Instrument, Convertible, Carrying Amount of Equity Component
$ 9,700,000 
 
Closing Stock Price
$ 22.71 
 
Events When Debt Can Be Converted
CSN are convertible at the option of the holders at such time as: (i) the closing price of the Company’s common stock exceeds 150% of the conversion price of the notes for 20 out of 30 consecutive trading days; (ii) the trading price per $1,000 of principal is less than 98% of the product of the closing sale price of common stock for each day during any five consecutive trading day period and the conversion rate per $1,000 of principal; (iii) CSN have been called for redemption; (iv) the Company distributes to all holders of common stock rights or warrants entitling them to purchase additional shares of common stock at less than the average closing price of common stock for the ten trading days immediately preceding the announcement of the distribution; (v) the Company distributes to all holders of common stock any form of dividend which has a per share value exceeding 5% of the price of the common stock on the day prior to such date of distribution; (vi) the Company effects a consolidation, merger, share exchange or sale of assets pursuant to which its common stock is converted to cash or other property; (vii) the occurrence of the period beginning 60 days prior to but excluding June 15, 2013; and (viii) certain fundamental changes, as defined in the indenture governing the notes, occur or are approved by the Board of Directors. 
 
Premium Make Whole Amount
6.3 
 
Debt Instrument, Call Date, Earliest
Jun. 20, 2012 
 
Debt (Details 3) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 29, 2012
Jul. 1, 2011
Jun. 29, 2012
Jul. 1, 2011
Interest Costs Incurred [Abstract]
 
 
 
 
Contractual interest
$ 1,113 
$ 1,113 
$ 2,225 
$ 2,225 
Discount amortization
$ 2,735 
$ 2,558 
$ 5,424 
$ 5,074 
Debt (Details 4) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 29, 2012
Deferred Finance Costs [Abstract]
 
Deferred Finance Costs, Net, Beginning Balance
$ 3,149 
Financing Costs Deferred
Financing Costs Written Off
Amortization Of Financing Costs
(534)
Deferred Finance Costs, Net, Ending Balance
$ 2,615 
Defined Benefit Plans (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 29, 2012
Jul. 1, 2011
Jun. 29, 2012
Jul. 1, 2011
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
 
 
 
 
Defined Benefit Plan, Benefit Obligation Beginning
 
 
$ 5,569 
 
Defined Benefit Plan, Net Periodic Benefit Cost
305 
299 
617 
576 
Defined Benefit Plan, Benefits Paid
 
 
(561)
 
Defined Benefit Plan, Foreign Currency Exchange Rate Changes, Benefit Obligation
 
 
(77)
 
Defined Benefit Plan, Benefit Obligation Ending
$ 5,548 
 
$ 5,548 
 
Defined Benefit Plans (Details 1) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 29, 2012
Jul. 1, 2011
Jun. 29, 2012
Jul. 1, 2011
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
 
 
 
 
Defined Benefit Plan, Service Cost
$ 278 
$ 278 
$ 563 
$ 535 
Defined Benefit Plan, Interest Cost
103 
120 
207 
231 
Defined Benefit Plan, Amortization of (Gains) Losses
31 
20 
62 
39 
Defined Benefit Plan, Expected Return on Plan Assets
(107)
(119)
(215)
(229)
Defined Benefit Plan, Net Periodic Benefit Cost
$ 305 
$ 299 
$ 617 
$ 576 
Stock-Based Compensation (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 29, 2012
Jul. 1, 2011
Jun. 29, 2012
Jul. 1, 2011
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Allocated Share-based Compensation Expense
$ 3,346 
$ 3,048 
$ 5,533 
$ 5,795 
Stock Options [Member]
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Allocated Share-based Compensation Expense
689 
629 
1,367 
1,163 
Restricted Stock And Unit Awards [Member]
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Allocated Share-based Compensation Expense
1,527 
1,091 
3,036 
2,084 
Retirement Plan [Member]
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Allocated Share-based Compensation Expense
1,130 
1,328 
1,130 
2,548 
Cost of Sales [Member]
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Allocated Share-based Compensation Expense
1,104 
1,076 
1,367 
2,081 
Selling General And Administrative Expense [Member]
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Allocated Share-based Compensation Expense
1,909 
1,623 
3,726 
3,112 
Research and Development Expense [Member]
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Allocated Share-based Compensation Expense
$ 333 
$ 349 
$ 440 
$ 602 
Stock-Based Compensation (Details 1)
6 Months Ended
Jun. 29, 2012
Y
Jul. 1, 2011
Y
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
 
 
Weighted Average Grant Date Fair Value
$ 8.19 
$ 9.42 
Risk Free Interest Rate
0.83% 
2.04% 
Expected Volatility Rate
40.00% 
40.00% 
Expected Term (in years)
Expected Dividend Rate
0.00% 
0.00% 
Stock-Based Compensation (Details 2) (USD $)
In Millions, except Share data, unless otherwise specified
6 Months Ended
Jun. 29, 2012
Y
Stock Options Time Based [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
Stock Options Outstanding, Beginning
1,558,771 
Option Grants in Period, Gross
377,826 
Option Exercises in Period
(13,316)
Option Forfeitures and Expirations in Period
(56,953)
Stock Options Outstanding, Ending
1,866,328 
Options Exercisable, Number
1,289,902 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
 
Options Outstanding, Weighted Average Exercise Price, Beginning
$ 23.42 
Option Grants in Period, Weighted Average Exercise Price
$ 22.18 
Option Exercises in Period, Weighted Average Exercise Price
$ 21.44 
Option Forfeitures and Expirations in Period, Weighted Average Exercise Price
$ 24.05 
Options Outstanding, Weighted Average Exercise Price, Ending
$ 23.17 
Options Exercisable, Weighted Average Exercise Price
$ 23.36 
Options Outstanding, Weighted Average Remaining Contractual Term
6.4 
Options Exercisable, Weighted Average Remaining Contractual Term
5.3 
Options Outstanding, Intrinsic Value
$ 2.1 
Options Exercisable, Intrinsic Value
1.8 
Stock Options Performance Based [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
Stock Options Outstanding, Beginning
478,364 
Option Grants in Period, Gross
Option Exercises in Period
(5,353)
Option Forfeitures and Expirations in Period
(177,733)
Stock Options Outstanding, Ending
295,278 
Options Exercisable, Number
295,278 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
 
Options Outstanding, Weighted Average Exercise Price, Beginning
$ 24.44 
Option Grants in Period, Weighted Average Exercise Price
$ 0 
Option Exercises in Period, Weighted Average Exercise Price
$ 22.11 
Option Forfeitures and Expirations in Period, Weighted Average Exercise Price
$ 26.49 
Options Outstanding, Weighted Average Exercise Price, Ending
$ 23.25 
Options Exercisable, Weighted Average Exercise Price
$ 23.25 
Options Outstanding, Weighted Average Remaining Contractual Term
4.8 
Options Exercisable, Weighted Average Remaining Contractual Term
4.8 
Options Outstanding, Intrinsic Value
0.1 
Options Exercisable, Intrinsic Value
$ 0.1 
Stock-Based Compensation (Details 3) (USD $)
6 Months Ended
Jun. 29, 2012
Restricted Stock And Restricted Stock Units Time Based [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
 
Nonvested Restricted Stock Units and Awards, Beginning
69,942 
Restricted Stock Units and Awards Granted
80,402 
Restricted Stock Units and Awards Vested
(19,142)
Restricted Stock Units and Awards Forfeited
(4,679)
Nonvested Restricted Stock Units and Awards, Ending
126,523 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract]
 
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Beginning
$ 22.69 
Restricted Stock Units and Awards Granted, Weighted Average Fair Value
$ 23.41 
Restricted Stock Units and Awards Vested, Weighted Average Fair Value
$ 21.86 
Restricted Stock Units and Awards Forfeited, Weighted Average Fair Value
$ 22.04 
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Ending
$ 23.29 
Restricted Stock And Restricted Stock Units Performance Based [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
 
Nonvested Restricted Stock Units and Awards, Beginning
529,743 
Restricted Stock Units and Awards Granted
332,918 
Restricted Stock Units and Awards Vested
(7,500)
Restricted Stock Units and Awards Forfeited
(38,413)
Nonvested Restricted Stock Units and Awards, Ending
816,748 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract]
 
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Beginning
$ 16.68 
Restricted Stock Units and Awards Granted, Weighted Average Fair Value
$ 15.30 
Restricted Stock Units and Awards Vested, Weighted Average Fair Value
$ 24.62 
Restricted Stock Units and Awards Forfeited, Weighted Average Fair Value
$ 15.74 
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Ending
$ 16.09 
Other Operating Expense Net (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 29, 2012
Jul. 1, 2011
Jun. 29, 2012
Jul. 1, 2011
Other Operating Income Expense Detail [Line Items]
 
 
 
 
Other operating (income) expense, net
$ 5,923 
$ (520)
$ 8,668 
$ (353)
Orthopaedic facility optimization [Member]
 
 
 
 
Other Operating Income Expense Detail [Line Items]
 
 
 
 
Other operating (income) expense, net
1,978 
22 
2,322 
261 
Medical device facility optimization [Member]
 
 
 
 
Other Operating Income Expense Detail [Line Items]
 
 
 
 
Other operating (income) expense, net
565 
894 
ERP system upgrade [Member]
 
 
 
 
Other Operating Income Expense Detail [Line Items]
 
 
 
 
Other operating (income) expense, net
1,912 
2,807 
Integration costs [Member]
 
 
 
 
Other Operating Income Expense Detail [Line Items]
 
 
 
 
Other operating (income) expense, net
112 
1,055 
Asset dispositions severance and other [Member]
 
 
 
 
Other Operating Income Expense Detail [Line Items]
 
 
 
 
Other operating (income) expense, net
$ 1,356 
$ (542)
$ 1,590 
$ (614)
Other Operating Expense Net (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 29, 2012
Orthopaedic facility optimization [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Activities, Description
In 2010, the Company began updating its Indianapolis, IN facility to streamline operations, consolidate two buildings, increase capacity, further expand capabilities and reduce dependence on outside suppliers. This initiative was completed in 2011.          In 2011, the Company began construction on an orthopaedic manufacturing facility in Fort Wayne, IN and will transfer the manufacturing operations currently being performed at its Columbia City, IN location into this new facility. The construction of the Fort Wayne facility was completed in June 2012 and the transfer of operations from the Columbia City facility is expected to be completed in the third quarter of 2012. In the third quarter of 2012, the Company finalized plans to transfer most major functions currently performed at its facilities in Orvin and Corgemont, Switzerland into existing facilities in Fort Wayne, IN and Tijuana, Mexico by the end of 2013. 
Restructuring Initiation Date
2010 
Restructuring And Related Activities Capital Expenditures Incurred To Date
$ 22.0 
Restructuring and Related Cost, Cost Incurred to Date
3.0 
Orthopaedic facility optimization [Member] |
Other [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Cost, Expected Cost
1.0 
Orthopaedic facility optimization [Member] |
Minimum [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring And Related Activities Expected Capital Expenditures
30.0 
Restructuring and Related Cost, Expected Cost
30.0 
Orthopaedic facility optimization [Member] |
Minimum [Member] |
Severance and retention [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Cost, Expected Cost
11.0 
Orthopaedic facility optimization [Member] |
Minimum [Member] |
Production inefficiencies, moving and revalidation [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Cost, Expected Cost
3.0 
Orthopaedic facility optimization [Member] |
Minimum [Member] |
Accelerated depreciation and asset write-offs [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Cost, Expected Cost
10.0 
Orthopaedic facility optimization [Member] |
Minimum [Member] |
Personnel [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Cost, Expected Cost
5.0 
Orthopaedic facility optimization [Member] |
Maximum [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring And Related Activities Expected Capital Expenditures
40.0 
Restructuring and Related Cost, Expected Cost
36.0 
Orthopaedic facility optimization [Member] |
Maximum [Member] |
Severance and retention [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Cost, Expected Cost
13.0 
Orthopaedic facility optimization [Member] |
Maximum [Member] |
Production inefficiencies, moving and revalidation [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Cost, Expected Cost
4.0 
Orthopaedic facility optimization [Member] |
Maximum [Member] |
Accelerated depreciation and asset write-offs [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Cost, Expected Cost
12.0 
Orthopaedic facility optimization [Member] |
Maximum [Member] |
Personnel [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Cost, Expected Cost
6.0 
Medical device facility optimization [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Activities, Description
Near the end of 2011, the Company initiated plans to upgrade and expand its manufacturing infrastructure in order to support its medical device strategy. This will include the transfer of certain product lines to create additional capacity for the manufacture of medical devices, expansion of two existing facilities, as well as the purchase of equipment to enable the production of medical devices. These initiatives are expected to be completed over the next two to three years. 
Restructuring Initiation Date
2011 
Restructuring And Related Activities Capital Expenditures Incurred To Date
3.9 
Restructuring and Related Cost, Cost Incurred to Date
0.9 
Medical device facility optimization [Member] |
Other [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Cost, Expected Cost
1.0 
Medical device facility optimization [Member] |
Minimum [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring And Related Activities Expected Capital Expenditures
15.0 
Restructuring and Related Cost, Expected Cost
2.0 
Medical device facility optimization [Member] |
Minimum [Member] |
Production inefficiencies, moving and revalidation [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Cost, Expected Cost
0.5 
Medical device facility optimization [Member] |
Minimum [Member] |
Personnel [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Cost, Expected Cost
1.0 
Medical device facility optimization [Member] |
Maximum [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring And Related Activities Expected Capital Expenditures
20.0 
Restructuring and Related Cost, Expected Cost
3.0 
Medical device facility optimization [Member] |
Maximum [Member] |
Production inefficiencies, moving and revalidation [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Cost, Expected Cost
1.0 
Medical device facility optimization [Member] |
Maximum [Member] |
Personnel [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Cost, Expected Cost
1.5 
ERP system upgrade [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Activities, Description
In 2011, the Company initiated plans to upgrade its existing global ERP system. This initiative is expected to be completed over the next two years. 
Restructuring Initiation Date
2011 
Restructuring And Related Activities Capital Expenditures Incurred To Date
2.0 
Restructuring and Related Cost, Cost Incurred to Date
2.8 
ERP system upgrade [Member] |
Minimum [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring And Related Activities Expected Capital Expenditures
4.0 
Restructuring and Related Cost, Expected Cost
5.0 
ERP system upgrade [Member] |
Minimum [Member] |
Training And Consulting Costs [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Cost, Expected Cost
3.0 
ERP system upgrade [Member] |
Minimum [Member] |
Accelerated depreciation and asset write-offs [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Cost, Expected Cost
2.0 
ERP system upgrade [Member] |
Maximum [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring And Related Activities Expected Capital Expenditures
5.0 
Restructuring and Related Cost, Expected Cost
7.0 
ERP system upgrade [Member] |
Maximum [Member] |
Training And Consulting Costs [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Cost, Expected Cost
4.5 
ERP system upgrade [Member] |
Maximum [Member] |
Accelerated depreciation and asset write-offs [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring and Related Cost, Expected Cost
2.5 
Corporate Headquarters Relocation [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring Initiation Date
second quarter of 2012 
Restructuring and Related Cost, Cost Incurred to Date
$ 1.2 
Other Operating Expense Net Changes in Accrued Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 29, 2012
Orthopaedic Facility Optimization [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning Balance
$ 0 
Restructuring charges
2,322 
Write-offs
Cash payments
(2,322)
Restructuring Reserve, Ending Balance
Medical Device Facility Optimization [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning Balance
Restructuring charges
894 
Write-offs
Cash payments
(894)
Restructuring Reserve, Ending Balance
ERP System Upgrade [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning Balance
Restructuring charges
2,807 
Write-offs
(1,792)
Cash payments
(555)
Restructuring Reserve, Ending Balance
460 
Severance and retention [Member] |
Orthopaedic Facility Optimization [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning Balance
Restructuring charges
26 
Write-offs
Cash payments
(26)
Restructuring Reserve, Ending Balance
Production inefficiencies, moving and revalidation [Member] |
Orthopaedic Facility Optimization [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning Balance
Restructuring charges
1,218 
Write-offs
Cash payments
(1,218)
Restructuring Reserve, Ending Balance
Production inefficiencies, moving and revalidation [Member] |
Medical Device Facility Optimization [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning Balance
Restructuring charges
205 
Write-offs
Cash payments
(205)
Restructuring Reserve, Ending Balance
Training And Consulting Costs [Member] |
ERP System Upgrade [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning Balance
Restructuring charges
1,015 
Write-offs
Cash payments
(555)
Restructuring Reserve, Ending Balance
460 
Accelerated depreciation and asset write-offs [Member] |
Orthopaedic Facility Optimization [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning Balance
Restructuring charges
Write-offs
Cash payments
Restructuring Reserve, Ending Balance
Accelerated depreciation and asset write-offs [Member] |
ERP System Upgrade [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning Balance
Restructuring charges
1,792 
Write-offs
(1,792)
Cash payments
Restructuring Reserve, Ending Balance
Personnel [Member] |
Orthopaedic Facility Optimization [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning Balance
Restructuring charges
624 
Write-offs
Cash payments
(624)
Restructuring Reserve, Ending Balance
Personnel [Member] |
Medical Device Facility Optimization [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning Balance
Restructuring charges
99 
Write-offs
Cash payments
(99)
Restructuring Reserve, Ending Balance
Other [Member] |
Orthopaedic Facility Optimization [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning Balance
Restructuring charges
454 
Write-offs
Cash payments
(454)
Restructuring Reserve, Ending Balance
Other [Member] |
Medical Device Facility Optimization [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning Balance
Restructuring charges
590 
Write-offs
Cash payments
(590)
Restructuring Reserve, Ending Balance
$ 0 
Income Taxes (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 29, 2012
Income Tax Disclosure [Abstract]
 
Unrecognized Tax Benefits, Decreases Resulting from Settlements with Taxing Authorities
$ 0.5 
Unrecognized Tax Benefits that Would Impact Effective Tax Rate
1.0 
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit
$ 0.3 
Significant Change in Unrecognized Tax Benefits, Nature of Event
expiration of applicable statutes of limitation 
Commitments and Contingencies (Narratives) (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 29, 2012
Commitments and Contingencies Disclosure [Abstract]
 
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. 
Significant Purchase Commitment Description
Contractual obligations for purchase of goods or services are defined as agreements that are enforceable and legally binding on the Company and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The Company’s purchase orders are normally based on current manufacturing needs and are fulfilled by vendors within short time horizons. The Company enters into blanket orders with vendors that have preferred pricing and terms, however these orders are normally cancelable by us without penalty. 
Significant Purchase Commitment Remaining Minimum Amount Committed
$ 32.3 
Description of Types of Foreign Currency Cash Flow Hedging Instruments Used
The Company enters into forward contracts to purchase Mexican pesos in order to hedge the risk of peso-denominated payments associated with the operations at its Tijuana, Mexico facility. 
Maximum Aggregate Loss Under Medical Plan Stop Loss Insurance
13.5 
Maximum Benefit Under Medical Plan Stop Loss Insurance
1.0 
Accrued Self Insured Medical Plan Liability
$ 1.7 
Commitments and Contingencies (Details 1) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 29, 2012
Movement in Standard Product Warranty Accrual [Roll Forward]
 
Standard Product Warranty Accrual, Beginning Balance
$ 2,013 
Standard Product Warranty Accrual, Warranties Issued
467 
Standard Product Warranty Accrual, Payments
(915)
Standard Product Warranty Accrual, Currency Translation, Increase (Decrease)
(3)
Standard Product Warranty Accrual, Ending Balance
$ 1,562 
Commitments and Contingencies (Details 2) (USD $)
In Thousands, unless otherwise specified
Jun. 29, 2012
Operating Leases, Future Minimum Payments Due [Abstract]
 
Operating Leases, Future Minimum Payments Due, Current
$ 2,054 
Operating Leases, Future Minimum Payments, Due in Two Years
3,722 
Operating Leases, Future Minimum Payments, Due in Three Years
3,802 
Operating Leases, Future Minimum Payments, Due in Four Years
3,447 
Operating Leases, Future Minimum Payments, Due in Five Years
2,996 
Operating Leases, Future Minimum Payments, Due Thereafter
2,895 
Total estimated operating lease expense
$ 18,916 
Commitments and Contingencies (Details 3) (USD $)
3 Months Ended 6 Months Ended
Jun. 29, 2012
Jul. 1, 2011
Jun. 29, 2012
Jul. 1, 2011
Foreign Currency Cash Flow Hedges [Abstract]
 
 
 
 
Increase (reduction) in Cost of Sales
$ (97,000)
$ (173,000)
$ (19,000)
$ (316,000)
Ineffective portion of change in fair value
FX Contract 1 [Member]
 
 
 
 
Derivative [Line Items]
 
 
 
 
Derivative, Type of Instrument
 
 
FX Contract 
 
Derivative, Hedge Designation
 
 
Cash flow 
 
Notional Amount of Foreign Currency Cash Flow Hedge Derivatives
3,000,000 
 
3,000,000 
 
Start Date
 
 
Jan. 01, 2012 
 
End Date
 
 
Dec. 31, 2012 
 
Pesos/$
13.0354 
 
13.0354 
 
Fair Value
(96,000)
 
(96,000)
 
Balance Sheet Location
 
 
Current Liabilities 
 
FX Contract 2 [Member]
 
 
 
 
Derivative [Line Items]
 
 
 
 
Derivative, Type of Instrument
 
 
FX Contract 
 
Derivative, Hedge Designation
 
 
Cash flow 
 
Notional Amount of Foreign Currency Cash Flow Hedge Derivatives
2,100,000 
 
2,100,000 
 
Start Date
 
 
Jan. 01, 2012 
 
End Date
 
 
Dec. 31, 2012 
 
Pesos/$
14.0287 
 
14.0287 
 
Fair Value
87,000 
 
87,000 
 
Balance Sheet Location
 
 
Current Assets 
 
FX Contract 3 [Member]
 
 
 
 
Derivative [Line Items]
 
 
 
 
Derivative, Type of Instrument
 
 
FX Contract 
 
Derivative, Hedge Designation
 
 
Cash flow 
 
Notional Amount of Foreign Currency Cash Flow Hedge Derivatives
6,000,000 
 
6,000,000 
 
Start Date
 
 
Jan. 01, 2013 
 
End Date
 
 
Dec. 31, 2013 
 
Pesos/$
13.7462 
 
13.7462 
 
Fair Value
(10,000)
 
(10,000)
 
Balance Sheet Location
 
 
Current Assets/ Other Assets 
 
FX Contract 4 [Member]
 
 
 
 
Derivative [Line Items]
 
 
 
 
Derivative, Type of Instrument
 
 
FX Contract 
 
Derivative, Hedge Designation
 
 
Cash flow 
 
Notional Amount of Foreign Currency Cash Flow Hedge Derivatives
6,000,000 
 
6,000,000 
 
Start Date
 
 
Jan. 01, 2013 
 
End Date
 
 
Dec. 31, 2013 
 
Pesos/$
14.4395 
 
14.4395 
 
Fair Value
$ 289,000 
 
$ 289,000 
 
Balance Sheet Location
 
 
Current Assets/ Other Assets 
 
Earnings Per Share (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 29, 2012
Jul. 1, 2011
Jun. 29, 2012
Jul. 1, 2011
Anitdilutive Securities Excluded From Earnings Per Share [Abstract]
 
 
 
 
Time-vested stock options, restricted stock and restricted stock units
1,418,000 
558,000 
1,280,000 
671,000 
Performance-vested stock options and restricted stock units
718,000 
578,000 
722,000 
596,000 
Convertible Note Shares Included In Diluted Share Calculation
EARNINGS PER SHARE (EPS) [Abstract]
 
 
 
 
Basic EPS
$ 0.16 
$ 0.37 
$ 0.35 
$ 0.88 
Diluted EPS
$ 0.16 
$ 0.36 
$ 0.35 
$ 0.86 
Net Income (Loss) Available to Common Stockholders, Diluted [Abstract]
 
 
 
 
Net income (loss)
$ 3,851 
$ 8,550 
$ 8,318 
$ 20,494 
Net Income (Loss) Available to Common Stockholders, Diluted
$ 3,851 
$ 8,550 
$ 8,318 
$ 20,494 
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]
 
 
 
 
Basic
23,611,000 
23,227,000 
23,515,000 
23,214,000 
Effect of dilutive securities convertible subordinated notes
Effect of dilutive securities stock optons, restricted stock and restricted stock units
265,000 
611,000 
301,000 
553,000 
Denominator for diluted EPS
23,876,000 
23,838,000 
23,816,000 
23,767,000 
Comprehensive Income (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 29, 2012
Jul. 1, 2011
Jun. 29, 2012
Jul. 1, 2011
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, before Tax [Abstract]
 
 
 
 
Cash Flow Hedges, Beginning
 
 
$ (538)
 
Unrealized gain (loss) on cash flow hedges
 
 
826 
 
Realized gain (loss) on cash flow hedges
 
 
(19)
 
Cash Flow Hedges, End
269 
 
269 
 
Other Comprehensive Income (Loss), Tax [Abstract]
 
 
 
 
Tax, Beginning
 
 
601 
 
Unrealized gain (loss) on cash flow hedges
 
 
(289)
 
Realized gain (loss) on cash flow hedges
 
 
 
Net foreign currency translation gain (loss)
 
 
 
Tax, End
319 
 
319 
 
Other Comprehensive Income Defined Benefit Plans Adjustment Before Tax Period Increase Decrease Abstract
 
 
 
 
Defined Benefit Plan Liability, Beginning
 
 
(2,660)
 
Defined Benefit Plan Liability, Ending
(2,660)
 
(2,660)
 
Other Comprehensive Income Foreign Currency Transaction And Translation Adjustment Before Tax Period Increase Decrease Abstract
 
 
 
 
Foreign Currency Translation Adjustment, Beginning
 
 
11,526 
 
Net foreign currency translation gain (loss)
 
 
(1,527)
 
Foreign Currency Translation Adjustment, End
9,999 
 
9,999 
 
Other Comprehensive Income Loss Before Tax Period Increase Decrease Abstract
 
 
 
 
Total Pre-Tax Amount, Beginning
 
 
8,328 
 
Unrealized gain (loss) on cash flow hedges
 
 
826 
 
Realized gain (loss) on cash flow hedges
 
 
(19)
 
Net foreign currency translation gain (loss)
 
 
(1,527)
 
Total Pre-Tax Amount, End
7,608 
 
7,608 
 
Other Comprehensive Income Loss Net Of Tax Period Increase Decrease Abstract
 
 
 
 
Net-of-Tax Amount, Beginning
 
 
8,929 
 
Unrealized gain (loss) on cash flow hedges, net of tax
 
 
537 
 
Realized gain (loss) on cash flow hedges, net of tax
 
 
(12)
 
Foreign currency translation gain (loss)
(5,565)
9,088 
(1,527)
11,303 
Net-of-Tax Amount, End
$ 7,927 
 
$ 7,927 
 
Fair Value Measurement (Details) (USD $)
In Millions, unless otherwise specified
0 Months Ended 6 Months Ended
Feb. 16, 2012
Jun. 29, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract]
 
 
Fair Value, Foreign Currency Contracts, Valuation Techniques
 
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 receives fair value estimates from the foreign currency contract counterparty to verify the reasonableness of the Company’s estimates. 
Description of Reclassification of Foreign Currency Cash Flow Hedge Gain (Loss)
 
The fair value of the Company’s foreign currency contracts will be realized as Cost of Sales as the inventory, which the contracts are hedging the cash flows to produce, is sold 
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months
 
$ 0.2 
Valuation Technique Contingent Consideration
 
The fair value of the contingent consideration liability was estimated by discounting to present value, contingent payments expected to be made. 
Contingent Consideration Discount Rate Minimum
12.00% 
 
Contingent Consideration Discount Rate Maximum
20.00% 
 
Fair Value Measurement (Details 1) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 29, 2012
Fair Value Disclosures [Abstract]
 
Accrued Contingent Consideration, Beginning Balance
$ 0 
Contingent Consideration Recognized In Period
1,500 
Change in Amount of Contingent Consideration Liability
50 
Contingent Payment Related To Business Combination
Accrued Contingent Consideration, Ending Balance
$ 1,550 
Fair Value Measurement (Details 2) (USD $)
In Thousands, unless otherwise specified
Jun. 29, 2012
Financial Milestones [Member]
 
Fair Value Assumptions [Line Items]
 
Contingent Consideration Fair Value
$ 830 
Risk Adjusted Discount Rate For Contingent Consideration
12.00% 
Contingent Consideration Liability Projected Year Of Payment
2014 
Development Milestones [Member]
 
Fair Value Assumptions [Line Items]
 
Contingent Consideration Fair Value
$ 720 
Risk Adjusted Discount Rate For Contingent Consideration
20.00% 
Contingent Consideration Liability Projected Year Of Payment
2014 
Fair Value Measurement (Details 3) (USD $)
3 Months Ended 6 Months Ended
Jun. 29, 2012
Jul. 1, 2011
Jun. 29, 2012
Jul. 1, 2011
Dec. 30, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
 
Foreign Currency Contract, Asset, Fair Value Disclosure
$ 366,000 
 
$ 366,000 
 
 
Foreign Currency Contract Liability Fair Value Disclosure
96,000 
 
96,000 
 
 
Accrued Contingent Consideration
1,550,000 
 
1,550,000 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
 
Valuation Technique For Long Lived Assets
 
 
fair value, which is determined by using independent appraisals or discounted cash flow models. The discounted cash flow model requires inputs to a present value cash flow calculation such as a risk-adjusted discount rate, terminal values, operating budgets, long-term strategic plans and remaining useful lives of the asset or asset group. 
 
 
Long Lived Assets Impairment Loss
 
Fair Value, Goodwill, Valuation Techniques
 
 
Fair values for reporting units are determined based on discounted cash flow models and market multiples. The discounted cash flow model requires inputs to a present value cash flow calculation such as a risk-adjusted discount rate, terminal values, operating budgets, and long-term strategic plans. The fair value from the discounted cash flow model is then combined, based on certain weightings, with market multiples in order to determine the fair value of the reporting unit. These market multiples include revenue multiples and multiples of earnings before interest, taxes, depreciation and amortization. 
 
 
Fair Value, Indefinite-lived Intangible Assets (Excluding Goodwill), Valuation Techniques
 
 
The fair value of indefinite-lived intangible assets is determined by using a discounted cash flow model. The discounted cash flow model requires inputs to a present value cash flow calculation such as a risk-adjusted discount rate, royalty rates, operating budgets, and long-term strategic plans. 
 
 
Cost-method Investments, Aggregate Carrying Amount
7,300,000 
 
7,300,000 
 
5,700,000 
Cost-method Investments, Other than Temporary Impairment
300,000 
300,000 
 
Fair Value, Cost Method Investments, Valuation Techniques
 
 
The fair value of these investments was determined by reference to recent sales data of similar shares to independent parties in an inactive market. 
 
 
Cost-method Investments, Realized Gains
4,500,000 
 
Fair Value, Inputs, Level 1 [Member]
 
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
 
Foreign Currency Contract, Asset, Fair Value Disclosure
 
 
 
Foreign Currency Contract Liability Fair Value Disclosure
 
 
 
Accrued Contingent Consideration
 
 
 
Fair Value, Inputs, Level 2 [Member]
 
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
 
Foreign Currency Contract, Asset, Fair Value Disclosure
366,000 
 
366,000 
 
 
Foreign Currency Contract Liability Fair Value Disclosure
96,000 
 
96,000 
 
 
Accrued Contingent Consideration
 
 
 
Fair Value, Inputs, Level 3 [Member]
 
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
 
Foreign Currency Contract, Asset, Fair Value Disclosure
 
 
 
Foreign Currency Contract Liability Fair Value Disclosure
 
 
 
Accrued Contingent Consideration
$ 1,550,000 
 
$ 1,550,000 
 
 
Business Segment, Geographic And Concentration Risk Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 29, 2012
Jul. 1, 2011
Jun. 29, 2012
Jul. 1, 2011
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
Sales Revenue, Net
$ 166,548 
$ 146,524 
$ 325,651 
$ 295,358 
Revenue, Major Customer [Line Items]
 
 
 
 
Revenue Major Customer Percent
49.00% 
58.00% 
50.00% 
59.00% 
Customer A [Member]
 
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
 
Revenue Major Customer Percent
18.00% 
19.00% 
19.00% 
20.00% 
Customer B [Member]
 
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
 
Revenue Major Customer Percent
15.00% 
17.00% 
14.00% 
17.00% 
Customer C [Member]
 
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
 
Revenue Major Customer Percent
10.00% 
14.00% 
10.00% 
14.00% 
Customer D [Member]
 
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
 
Revenue Major Customer Percent
6.00% 
8.00% 
7.00% 
8.00% 
United States [Member]
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
Sales Revenue, Net
84,378 
61,092 
166,784 
126,293 
Puerto Rico [Member]
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
Sales Revenue, Net
26,681 
24,651 
50,221 
50,832 
Belgium [Member]
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
Sales Revenue, Net
15,053 
17,628 
30,391 
36,597 
United Kingdom & Ireland [Member]
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
Sales Revenue, Net
12,331 
17,626 
24,688 
28,119 
Rest Of World [Member]
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
Sales Revenue, Net
28,105 
25,527 
53,567 
53,517 
Implantable Medical [Member]
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
Sales Revenue, Net
125,366 
126,415 
243,183 
254,515 
Implantable Medical [Member] |
Crm Neuromodulation [Member]
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
Sales Revenue, Net
80,025 
77,724 
155,160 
155,761 
Implantable Medical [Member] |
Vascular Access [Member]
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
Sales Revenue, Net
12,481 
10,769 
24,117 
21,243 
Implantable Medical [Member] |
Orthopaedic [Member]
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
Sales Revenue, Net
32,860 
37,922 
63,906 
77,511 
Electrochem [Member]
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
Sales Revenue, Net
41,182 
20,109 
82,468 
40,843 
Electrochem [Member] |
Portable Medical [Member]
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
Sales Revenue, Net
20,407 
2,012 
39,127 
4,151 
Electrochem [Member] |
Energy Environmental [Member]
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
Sales Revenue, Net
16,879 
16,016 
35,249 
31,858 
Electrochem [Member] |
Other Electrochem [Member]
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
Sales Revenue, Net
$ 3,896 
$ 2,081 
$ 8,092 
$ 4,834 
Business Segment, Geographic And Concentration Risk Information (Details 1) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 29, 2012
Jul. 1, 2011
Jun. 29, 2012
Jul. 1, 2011
Segment Reporting Information [Line Items]
 
 
 
 
Total segment income from operations
$ 17,595 
$ 22,552 
$ 32,178 
$ 45,906 
Unallocated Operating Expenses
(6,504)
(4,249)
(9,889)
(9,637)
Operating income as reported
11,091 
18,303 
22,289 
36,269 
Unallocated Other Expense
(4,221)
(5,539)
(9,300)
(5,678)
Income before provision for income taxes
6,870 
12,764 
12,989 
30,591 
Implantable Medical [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total segment income from operations
11,396 
17,700 
21,508 
36,647 
Electrochem [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total segment income from operations
$ 6,199 
$ 4,852 
$ 10,670 
$ 9,259 
Business Segment, Geographic And Concentration Risk Information (Details 2) (USD $)
In Thousands, unless otherwise specified
Jun. 29, 2012
Dec. 30, 2011
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Property, plant and equipment, net
$ 156,380 
$ 145,806 
United States [Member]
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Property, plant and equipment, net
123,362 
113,693 
Rest Of World [Member]
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Property, plant and equipment, net
$ 33,018 
$ 32,113