| Debt
|
|
|
|
|
|
|
|
Assets divested | |||
Cash and cash equivalents | $ | 76,256 | |
Other current assets | 977 | ||
Property, plant and equipment, net | 4,407 | ||
Amortizing intangible assets, net | 1,931 | ||
Goodwill | 40,830 | ||
Deferred income taxes | 6,446 | ||
Total assets divested | 130,847 | ||
Liabilities transferred | |||
Current liabilities | 2,119 | ||
Net assets divested | $ | 128,728 |
2. | DIVESTITURE AND ACQUISITION (Continued) |
Cash | $ | 478,490 | |
Fair value of Integer common stock | 245,368 | ||
Replacement stock options attributable to pre-acquisition service | 4,508 | ||
Total purchase consideration | $ | 728,366 |
Assets acquired | |||
Current assets | $ | 269,815 | |
Property, plant and equipment | 216,473 | ||
Amortizing intangible assets | 849,000 | ||
Indefinite-lived intangible assets | 70,000 | ||
Goodwill | 665,720 | ||
Other non-current assets | 1,629 | ||
Total assets acquired | 2,072,637 | ||
Liabilities assumed | |||
Current liabilities | 103,836 | ||
Debt assumed | 1,044,675 | ||
Other long-term liabilities | 195,760 | ||
Total liabilities assumed | 1,344,271 | ||
Net assets acquired | $ | 728,366 |
2. | DIVESTITURE AND ACQUISITION (Continued) |
Amortizing Intangible Assets | Fair Value Assigned | Weighted Average Amortization Period (Years) | Estimated Useful Life (Years) | Weighted Average Discount Rate | ||||||
Technology | $ | 160,000 | 7 | 19 | 11.5% | |||||
Customer lists | 689,000 | 14 | 29 | 11.5% | ||||||
$ | 849,000 | 13 | 27 | 11.5% | ||||||
Indefinite-lived Intangible Assets | ||||||||||
Trademarks and tradenames | $ | 70,000 | N/A | N/A | 11.5% |
2. | DIVESTITURE AND ACQUISITION (Continued) |
Three Months Ended | Six Months Ended | |||||||
July 3, 2015 | July 3, 2015 | |||||||
Sales | $ | 377,934 | $ | 736,351 | ||||
Net income | 4,709 | 5,675 | ||||||
Earnings per share: | ||||||||
Basic | $ | 0.15 | $ | 0.18 | ||||
Diluted | $ | 0.15 | $ | 0.18 |
2. | DIVESTITURE AND ACQUISITION (Continued) |
|
Six Months Ended | |||||||
(in thousands) | July 1, 2016 | July 3, 2015 | |||||
Noncash investing and financing activities: | |||||||
Common stock contributed to 401(k) Plan | $ | — | $ | 3,920 | |||
Property, plant and equipment purchases included in accounts payable | 9,696 | 1,446 | |||||
Purchase of technology included in accrued expenses | 1,000 | — | |||||
Divestiture of noncash assets | 54,591 | — | |||||
Divestiture of liabilities | 2,119 | — |
|
As of | |||||||
July 1, 2016 | January 1, 2016 | ||||||
Raw materials | $ | 114,454 | $ | 107,296 | |||
Work-in-process | 103,747 | 93,729 | |||||
Finished goods | 58,078 | 51,141 | |||||
Total | $ | 276,279 | $ | 252,166 |
|
Gross Carrying Amount | Accumulated Amortization | Foreign Currency Translation | Net Carrying Amount | ||||||||||||
At July 1, 2016 | |||||||||||||||
Purchased technology and patents | $ | 256,719 | $ | (92,017 | ) | $ | 2,397 | $ | 167,099 | ||||||
Customer lists | 759,987 | (50,389 | ) | 3,264 | 712,862 | ||||||||||
Other | 4,534 | (5,044 | ) | 803 | 293 | ||||||||||
Total amortizing intangible assets | $ | 1,021,240 | $ | (147,450 | ) | $ | 6,464 | $ | 880,254 | ||||||
At January 1, 2016 | |||||||||||||||
Purchased technology and patents | $ | 255,776 | $ | (83,708 | ) | $ | 1,444 | $ | 173,512 | ||||||
Customer lists | 761,857 | (40,815 | ) | (986 | ) | 720,056 | |||||||||
Other | 4,534 | (4,946 | ) | 821 | 409 | ||||||||||
Total amortizing intangible assets | $ | 1,022,167 | $ | (129,469 | ) | $ | 1,279 | $ | 893,977 |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2016 | July 3, 2015 | July 1, 2016 | July 3, 2015 | ||||||||||||
Cost of sales | $ | 4,240 | $ | 1,445 | $ | 8,480 | $ | 2,916 | |||||||
Selling, general and administrative expenses | 5,123 | 1,830 | 10,259 | 3,643 | |||||||||||
Research, development and engineering costs, net | 151 | 103 | 239 | 206 | |||||||||||
Total intangible asset amortization expense | $ | 9,514 | $ | 3,378 | $ | 18,978 | $ | 6,765 |
Estimated Amortization Expense | |||
Remainder of 2016 | $ | 18,934 | |
2017 | 44,050 | ||
2018 | 44,962 | ||
2019 | 45,044 | ||
2020 | 45,642 | ||
Thereafter | 681,622 | ||
Total estimated amortization expense | $ | 880,254 |
Trademarks and Tradenames | |||
At January 1, 2016 | $ | 90,288 | |
At July 1, 2016 | $ | 90,288 |
5. | INTANGIBLE ASSETS (Continued) |
Greatbatch Medical | QiG | Lake Region Medical | Total | ||||||||||||
At January 1, 2016 | $ | 303,929 | $ | 50,096 | $ | 659,545 | $ | 1,013,570 | |||||||
Goodwill divested (Note 2) | — | (40,830 | ) | — | (40,830 | ) | |||||||||
Purchase accounting adjustment (Note 2) | — | — | 3,932 | 3,932 | |||||||||||
Foreign currency translation | 91 | — | 4,076 | 4,167 | |||||||||||
At July 1, 2016 | $ | 304,020 | $ | 9,266 | $ | 667,553 | $ | 980,839 |
|
As of | |||||||
July 1, 2016 | January 1, 2016 | ||||||
Senior secured term loan A | $ | 365,625 | $ | 375,000 | |||
Senior secured term loan B | 1,019,875 | 1,025,000 | |||||
9.125% senior notes due 2023 | 360,000 | 360,000 | |||||
Revolving line of credit | 55,000 | — | |||||
Less unamortized discount on term loan B and debt issuance costs | (43,644 | ) | (45,947 | ) | |||
Total debt | 1,756,856 | 1,714,053 | |||||
Less current portion of long-term debt | 29,000 | 29,000 | |||||
Total long-term debt | $ | 1,727,856 | $ | 1,685,053 |
6. | DEBT (Continued) |
6. | DEBT (Continued) |
Remaining in 2016 | $ | 14,500 | |
2017 | 31,344 | ||
2018 | 40,719 | ||
2019 | 47,750 | ||
2020 | 102,750 | ||
Thereafter | 1,563,437 | ||
Total | $ | 1,800,500 |
Instrument | Type of Hedge | Notional Amount | Start Date | End Date | Pay Fixed Rate | Receive Current Floating Rate | Fair Value July 1, 2016 | Balance Sheet Location | |||||||||||||||||
Interest Rate Swap | Cash Flow | $ | 200,000 | Jun-17 | Jun-20 | 1.1325 | % | N/A | $ | (1,819 | ) | Other Long-Term Liabilities |
6. | DEBT (Continued) |
At January 1, 2016 | $ | 4,791 | |
Amortization during the period | (496 | ) | |
At July 1, 2016 | $ | 4,295 |
Debt Issuance Costs | Unamortized Discount on TLB Facility | Total | |||||||||
At January 1, 2016 | $ | 35,908 | $ | 10,039 | $ | 45,947 | |||||
Financing costs incurred | 781 | — | 781 | ||||||||
Amortization during the period | (2,435 | ) | (649 | ) | (3,084 | ) | |||||
At July 1, 2016 | $ | 34,254 | $ | 9,390 | $ | 43,644 |
|
At January 1, 2016 | $ | 7,121 | |
Net defined benefit cost | 390 | ||
Benefit payments | (70 | ) | |
Foreign currency translation | 116 | ||
At July 1, 2016 | $ | 7,557 |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2016 | July 3, 2015 | July 1, 2016 | July 3, 2015 | ||||||||||||
Service cost | $ | 110 | $ | 78 | $ | 218 | $ | 157 | |||||||
Interest cost | 45 | 15 | 88 | 30 | |||||||||||
Amortization of net loss | 47 | 12 | 93 | 26 | |||||||||||
Expected return on plan assets | (4 | ) | (3 | ) | (9 | ) | (6 | ) | |||||||
Net defined benefit cost | $ | 198 | $ | 102 | $ | 390 | $ | 207 |
|
• | Stock options: Holders of Integer stock option awards continued to hold stock options to purchase the same number of shares of Integer common stock at an adjusted exercise price and one new Nuvectra stock option for every three Integer stock options held as of the Record Date, which, in the aggregate, preserved the fair value of the overall awards granted. The adjusted exercise price for Integer stock options was equal to approximately 93% of the original exercise price. The stock option awards will continue to vest over their original vesting period. |
• | Restricted stock and restricted stock units: Holders of Integer restricted stock and restricted stock unit awards received one new share of Nuvectra restricted stock and restricted stock unit awards for every three Integer restricted stock and restricted stock unit awards held as of the Record Date. Integer restricted stock and restricted stock unit awards will continue to vest in accordance with their original performance metrics and over their original vesting period. |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2016 | July 3, 2015 | July 1, 2016 | July 3, 2015 | ||||||||||||
Stock options | $ | 585 | $ | 663 | $ | 1,194 | $ | 1,282 | |||||||
Restricted stock and restricted stock units | 1,542 | 1,746 | 3,768 | 3,380 | |||||||||||
401(k) Plan stock contribution | — | 1,310 | — | 1,310 | |||||||||||
Total stock-based compensation expense | $ | 2,127 | $ | 3,719 | $ | 4,962 | $ | 5,972 | |||||||
Cost of sales | $ | 150 | $ | 1,094 | $ | 347 | $ | 1,354 | |||||||
Selling, general and administrative expenses | 1,528 | 2,148 | 3,183 | 3,909 | |||||||||||
Research, development and engineering costs, net | 116 | 477 | 293 | 709 | |||||||||||
Other operating expenses, net | 333 | — | 1,139 | — | |||||||||||
Total stock-based compensation expense | $ | 2,127 | $ | 3,719 | $ | 4,962 | $ | 5,972 |
Six Months Ended | |||||||
July 1, 2016 | July 3, 2015 | ||||||
Weighted average fair value | $ | 9.41 | $ | 12.18 | |||
Risk-free interest rate | 1.58 | % | 1.55 | % | |||
Expected volatility | 26 | % | 26 | % | |||
Expected life (in years) | 5 | 5 | |||||
Expected dividend yield | — | % | — | % |
8. | STOCK-BASED COMPENSATION (Continued) |
Number of Stock Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (In Years) | Aggregate Intrinsic Value (In Millions) | |||||||||
Outstanding at January 1, 2016 | 1,678,900 | $ | 28.32 | |||||||||
Granted | 235,856 | 50.69 | ||||||||||
Exercised | (27,540 | ) | 22.13 | |||||||||
Forfeited or expired | (37,708 | ) | 45.04 | |||||||||
Adjustment due to Spin-off | — | (2.02 | ) | |||||||||
Outstanding at July 1, 2016 | 1,849,508 | $ | 28.91 | 6.1 | $ | 14.3 | ||||||
Exercisable at July 1, 2016 | 1,443,941 | $ | 23.91 | 5.3 | $ | 14.3 |
Time-Vested Activity | Weighted Average Fair Value | |||||
Nonvested at January 1, 2016 | 39,235 | $ | 47.40 | |||
Granted | 46,474 | 51.48 | ||||
Vested | (11,422 | ) | 51.21 | |||
Forfeited | (8,165 | ) | 48.92 | |||
Nonvested at July 1, 2016 | 66,122 | $ | 49.42 |
Performance- Vested Activity | Weighted Average Fair Value | |||||
Nonvested at January 1, 2016 | 577,825 | $ | 25.11 | |||
Granted | 156,730 | 31.59 | ||||
Vested | (249,153 | ) | 15.86 | |||
Forfeited | (68,237 | ) | 32.33 | |||
Nonvested at July 1, 2016 | 417,165 | $ | 31.87 |
|
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2016 | July 3, 2015 | July 1, 2016 | July 3, 2015 | ||||||||||||
2014 investments in capacity and capabilities | $ | 5,126 | $ | 6,051 | $ | 9,279 | $ | 12,738 | |||||||
Orthopedic facilities optimization | 162 | 518 | 299 | 991 | |||||||||||
Legacy Lake Region Medical consolidations | 2,088 | — | 4,447 | — | |||||||||||
Acquisition and integration costs | 7,859 | 98 | 17,824 | 164 | |||||||||||
Asset dispositions, severance and other | 259 | 1,083 | 4,785 | 1,712 | |||||||||||
$ | 15,494 | $ | 7,750 | $ | 36,634 | $ | 15,605 |
• | Functions performed at the Company’s facility in Plymouth, MN to manufacture catheters and introducers will transfer into the Company’s existing facility in Tijuana, Mexico. This initiative will be substantially completed in the second half of 2016 and is dependent upon our customers’ validation and qualification of the transferred products. |
• | Functions performed at the Company’s facilities in Beaverton, OR and Raynham, MA to manufacture products for the portable medical market were transferred to a new facility in Tijuana, Mexico. Products manufactured at the Beaverton facility, which do not serve the portable medical market, were transferred to the Company’s Raynham facility. This initiative was substantially completed during the first quarter of 2016. |
• | The design engineering responsibilities previously performed at the Company’s Cleveland, OH facility were transferred to the Company’s facilities in Minnesota in 2015. |
• | The realignment of the Company’s commercial sales operations was completed in 2015. |
Severance and Retention | Accelerated Depreciation/Asset Write-offs | Other | Total | ||||||||||||
At January 1, 2016 | $ | 1,429 | $ | — | $ | 1,595 | $ | 3,024 | |||||||
Restructuring charges | — | 1,581 | 7,698 | 9,279 | |||||||||||
Write-offs | — | (1,581 | ) | — | (1,581 | ) | |||||||||
Cash payments | (1,235 | ) | — | (7,386 | ) | (8,621 | ) | ||||||||
At July 1, 2016 | $ | 194 | $ | — | $ | 1,907 | $ | 2,101 |
9. | OTHER OPERATING EXPENSES, NET (Continued) |
• | Severance and retention: approximately $11.0 million; |
• | Accelerated depreciation and asset write-offs: approximately $13.0 million; and |
• | Other: $21.0 million – $24.0 million |
Severance and Retention | Accelerated Depreciation/Asset Write-offs | Other | Total | ||||||||||||
At January 1, 2016 | $ | — | $ | — | $ | — | $ | — | |||||||
Restructuring charges | — | — | 299 | 299 | |||||||||||
Cash payments | — | — | (299 | ) | (299 | ) | |||||||||
At July 1, 2016 | $ | — | $ | — | $ | — | $ | — |
• | Employee costs: $5.0 million - $6.0 million; and |
• | Other: $8.0 million - $9.0 million. |
9. | OTHER OPERATING EXPENSES, NET (Continued) |
Employee Costs | Other | Total | |||||||||
At January 1, 2016 | $ | 3,667 | $ | 596 | $ | 4,263 | |||||
Restructuring charges | 3,428 | 1,019 | 4,447 | ||||||||
Cash payments | (4,768 | ) | (1,121 | ) | (5,889 | ) | |||||
At July 1, 2016 | $ | 2,327 | $ | 494 | $ | 2,821 |
|
|
At January 1, 2016 | $ | 3,316 | |
Additions to warranty reserve | 1,163 | ||
Warranty claims settled | (1,427 | ) | |
At July 1, 2016 | $ | 3,052 |
11. | COMMITMENTS AND CONTINGENCIES (Continued) |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2016 | July 3, 2015 | July 1, 2016 | July 3, 2015 | ||||||||||||
Addition in cost of sales | $ | 768 | $ | 420 | $ | 1,387 | $ | 664 | |||||||
Ineffective portion of change in fair value | — | — | — | — |
Instrument | Type of Hedge | Aggregate Notional Amount | Start Date | End Date | $/Peso | Fair Value | Balance Sheet Location | ||||||||||||
FX Contract | Cash flow | $ | 8,240 | Jan 2016 | Dec 2016 | 0.0584 | $ | (634 | ) | Accrued Expenses | |||||||||
FX Contract | Cash flow | $ | 5,591 | Apr 2016 | Dec 2016 | 0.0565 | $ | (251 | ) | Accrued Expenses |
|
Defined Benefit Plan Liability | Cash Flow Hedges | Foreign Currency Translation Adjustment | Total Pre-Tax Amount | Tax | Net-of-Tax Amount | ||||||||||||||||||
At April 1, 2016 | $ | (1,179 | ) | $ | (1,827 | ) | $ | 22,369 | $ | 19,363 | $ | 1,134 | $ | 20,497 | |||||||||
Unrealized loss on cash flow hedges | — | (2,687 | ) | — | (2,687 | ) | 940 | (1,747 | ) | ||||||||||||||
Realized loss on foreign currency hedges | — | 768 | — | 768 | (268 | ) | 500 | ||||||||||||||||
Foreign currency translation loss | — | — | (9,701 | ) | (9,701 | ) | — | (9,701 | ) | ||||||||||||||
At July 1, 2016 | $ | (1,179 | ) | $ | (3,746 | ) | $ | 12,668 | $ | 7,743 | $ | 1,806 | $ | 9,549 |
Defined Benefit Plan Liability | Cash Flow Hedges | Foreign Currency Translation Adjustment | Total Pre-Tax Amount | Tax | Net-of-Tax Amount | ||||||||||||||||||
At January 1, 2016 | $ | (1,179 | ) | $ | (2,392 | ) | $ | 3,609 | $ | 38 | $ | 1,332 | $ | 1,370 | |||||||||
Unrealized loss on cash flow hedges | — | (2,741 | ) | — | (2,741 | ) | 959 | (1,782 | ) | ||||||||||||||
Realized loss on foreign currency hedges | — | 1,387 | — | 1,387 | (485 | ) | 902 | ||||||||||||||||
Foreign currency translation gain | — | — | 9,059 | 9,059 | — | 9,059 | |||||||||||||||||
At July 1, 2016 | $ | (1,179 | ) | $ | (3,746 | ) | $ | 12,668 | $ | 7,743 | $ | 1,806 | $ | 9,549 |
13. | ACCUMULATED OTHER COMPREHENSIVE INCOME (Continued) |
Defined Benefit Plan Liability | Cash Flow Hedges | Foreign Currency Translation Adjustment | Total Pre-Tax Amount | Tax | Net-of-Tax Amount | ||||||||||||||||||
At April 3, 2015 | $ | (1,181 | ) | $ | (3,480 | ) | $ | 9,625 | $ | 4,964 | $ | 1,734 | $ | 6,698 | |||||||||
Unrealized loss on cash flow hedges | — | (840 | ) | — | (840 | ) | 295 | (545 | ) | ||||||||||||||
Realized loss on foreign currency hedges | — | 420 | — | 420 | (147 | ) | 273 | ||||||||||||||||
Realized loss on interest rate swap hedges | — | 281 | — | 281 | (98 | ) | 183 | ||||||||||||||||
Foreign currency translation gain | — | — | 214 | 214 | — | 214 | |||||||||||||||||
At July 3, 2015 | $ | (1,181 | ) | $ | (3,619 | ) | $ | 9,839 | $ | 5,039 | $ | 1,784 | $ | 6,823 |
Defined Benefit Plan Liability | Cash Flow Hedges | Foreign Currency Translation Adjustment | Total Pre-Tax Amount | Tax | Net-of-Tax Amount | ||||||||||||||||||
At January 2, 2015 | $ | (1,181 | ) | $ | (2,558 | ) | $ | 11,450 | $ | 7,711 | $ | 1,412 | $ | 9,123 | |||||||||
Unrealized loss on cash flow hedges | — | (2,187 | ) | — | (2,187 | ) | 766 | (1,421 | ) | ||||||||||||||
Realized loss on foreign currency hedges | — | 664 | — | 664 | (232 | ) | 432 | ||||||||||||||||
Realized loss on interest rate swap hedges | — | 462 | — | 462 | (162 | ) | 300 | ||||||||||||||||
Foreign currency translation loss | — | — | (1,611 | ) | (1,611 | ) | — | (1,611 | ) | ||||||||||||||
At July 3, 2015 | $ | (1,181 | ) | $ | (3,619 | ) | $ | 9,839 | $ | 5,039 | $ | 1,784 | $ | 6,823 |
|
14. | FAIR VALUE MEASUREMENTS (Continued) |
Fair Value Measurements Using | ||||||||||||||||
At July 1, | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
Description | 2016 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Liabilities | ||||||||||||||||
Foreign currency contracts (Note 11) | $ | 885 | $ | — | $ | 885 | $ | — | ||||||||
Interest rate swap (Note 6) | $ | 1,819 | $ | — | $ | 1,819 | $ | — |
14. | FAIR VALUE MEASUREMENTS (Continued) |
|
15. | BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION (Continued) |
• | Advanced Surgical, Orthopedics, and Portable Medical: Includes legacy Greatbatch Orthopedics and Portable Medical product line sales plus the legacy Lake Region Medical Advanced Surgical product line sales. Products include components, sub-assemblies, finished devices, implants, instruments and delivery systems for a range of surgical technologies to the advanced surgical market, including laparoscopy, orthopedics and general surgery, biopsy and drug delivery, joint preservation and reconstruction, arthroscopy, and engineered tubing solutions. Products also include life-saving and life-enhancing applications comprising of automated external defibrillators, portable oxygen concentrators, ventilators, and powered surgical tools. |
• | Cardio and Vascular: Includes the legacy Greatbatch Vascular product line sales plus the legacy Lake Region Medical Cardio and Vascular product line sales less the legacy Lake Region Medical Cardiac/Neuromodulation sales. Products include introducers, steerable sheaths, guidewires, catheters, and stimulation therapy components, subassemblies and finished devices that deliver therapies for various markets such as coronary and neurovascular disease, peripheral vascular disease, interventional radiology, vascular access, atrial fibrillation, and interventional cardiology, plus products for medical imaging and pharmaceutical delivery. |
• | Cardiac/Neuromodulation: Includes the legacy Greatbatch Cardiac/Neuromodulation and QiG sales plus the legacy Lake Region Medical Cardiac/Neuromodulation sales previously included in their Cardio and Vascular product line sales. Products include batteries, capacitors, filtered and unfiltered feed-throughs, engineered components, implantable stimulation leads, and enclosures used in implantable medical devices. |
• | Electrochem: Includes the legacy Greatbatch Energy, Military and Environmental product line sales. Products include primary (lithium) cells, and primary and secondary battery packs for demanding applications such as down hole drilling tools. |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2016 | July 3, 2015 | July 1, 2016 | July 3, 2015 | ||||||||||||
Product line sales: | |||||||||||||||
Advanced Surgical, Orthopedics, and Portable Medical | $ | 104,317 | $ | 53,181 | $ | 195,646 | $ | 105,819 | |||||||
Cardio and Vascular | 144,219 | 12,907 | 277,869 | 23,263 | |||||||||||
Cardiac/Neuromodulation | 91,623 | 92,257 | 188,698 | 172,873 | |||||||||||
Electrochem | 9,819 | 16,545 | 21,491 | 34,255 | |||||||||||
Elimination of interproduct line sales | (1,596 | ) | — | (3,084 | ) | — | |||||||||
Total sales | 348,382 | 174,890 | $ | 680,620 | $ | 336,210 |
15. | BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION (Continued) |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2016 | July 3, 2015 | July 1, 2016 | July 3, 2015 | ||||||||||||
Business segment sales: | |||||||||||||||
Greatbatch Medical | $ | 141,167 | $ | 172,786 | $ | 272,773 | $ | 329,763 | |||||||
QiG | 2,747 | 2,741 | 6,121 | 7,788 | |||||||||||
Lake Region Medical | 204,934 | — | 403,209 | — | |||||||||||
Elimination of intersegment sales(a) | (466 | ) | (637 | ) | (1,483 | ) | (1,341 | ) | |||||||
Total sales | 348,382 | 174,890 | $ | 680,620 | $ | 336,210 |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2016 | July 3, 2015 | July 1, 2016 | July 3, 2015 | ||||||||||||
Segment income (loss) from operations: | |||||||||||||||
Greatbatch Medical | $ | 14,564 | $ | 28,914 | $ | 25,579 | $ | 50,667 | |||||||
QiG | (700 | ) | (7,002 | ) | (5,909 | ) | (12,452 | ) | |||||||
Lake Region Medical | 27,356 | — | 48,555 | — | |||||||||||
Total segment income from operations | 41,220 | 21,912 | 68,225 | 38,215 | |||||||||||
Unallocated operating expenses | (11,951 | ) | (8,878 | ) | (27,822 | ) | (15,792 | ) | |||||||
Operating income | 29,269 | 13,034 | 40,403 | 22,423 | |||||||||||
Unallocated expenses, net | (28,582 | ) | (1,099 | ) | (52,478 | ) | (668 | ) | |||||||
Income (loss) before provision for income taxes | $ | 687 | $ | 11,935 | $ | (12,075 | ) | $ | 21,755 |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2016 | July 3, 2015 | July 1, 2016 | July 3, 2015 | ||||||||||||
Sales by geographic area: | |||||||||||||||
United States | $ | 204,090 | $ | 75,041 | $ | 406,213 | $ | 145,557 | |||||||
Non-Domestic locations: | |||||||||||||||
Puerto Rico | 39,344 | 37,415 | 78,472 | 71,431 | |||||||||||
Belgium | 20,491 | 16,018 | 38,657 | 33,385 | |||||||||||
Rest of world | 84,457 | 46,416 | 157,278 | 85,837 | |||||||||||
Total sales | $ | 348,382 | $ | 174,890 | $ | 680,620 | $ | 336,210 |
Three Months Ended | Six Months Ended | ||||||
July 1, 2016 | July 3, 2015 | July 1, 2016 | July 3, 2015 | ||||
Customer A | 17% | 20% | 18% | 21% | |||
Customer B | 15% | 18% | 15% | 18% | |||
Customer C | 13% | 12% | 13% | 13% | |||
Total | 45% | 50% | 46% | 52% |
15. | BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION (Continued) |
As of | |||||||
July 1, 2016 | January 1, 2016 | ||||||
United States | $ | 265,208 | $ | 264,556 | |||
Rest of world | 118,021 | 114,936 | |||||
Total | $ | 383,229 | $ | 379,492 |
|
16. | IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS (Continued) |
|
14. | FAIR VALUE MEASUREMENTS (Continued) |
|
Assets divested | |||
Cash and cash equivalents | $ | 76,256 | |
Other current assets | 977 | ||
Property, plant and equipment, net | 4,407 | ||
Amortizing intangible assets, net | 1,931 | ||
Goodwill | 40,830 | ||
Deferred income taxes | 6,446 | ||
Total assets divested | 130,847 | ||
Liabilities transferred | |||
Current liabilities | 2,119 | ||
Net assets divested | $ | 128,728 |
Cash | $ | 478,490 | |
Fair value of Integer common stock | 245,368 | ||
Replacement stock options attributable to pre-acquisition service | 4,508 | ||
Total purchase consideration | $ | 728,366 |
Assets acquired | |||
Current assets | $ | 269,815 | |
Property, plant and equipment | 216,473 | ||
Amortizing intangible assets | 849,000 | ||
Indefinite-lived intangible assets | 70,000 | ||
Goodwill | 665,720 | ||
Other non-current assets | 1,629 | ||
Total assets acquired | 2,072,637 | ||
Liabilities assumed | |||
Current liabilities | 103,836 | ||
Debt assumed | 1,044,675 | ||
Other long-term liabilities | 195,760 | ||
Total liabilities assumed | 1,344,271 | ||
Net assets acquired | $ | 728,366 |
Amortizing Intangible Assets | Fair Value Assigned | Weighted Average Amortization Period (Years) | Estimated Useful Life (Years) | Weighted Average Discount Rate | ||||||
Technology | $ | 160,000 | 7 | 19 | 11.5% | |||||
Customer lists | 689,000 | 14 | 29 | 11.5% | ||||||
$ | 849,000 | 13 | 27 | 11.5% | ||||||
Indefinite-lived Intangible Assets | ||||||||||
Trademarks and tradenames | $ | 70,000 | N/A | N/A | 11.5% |
Three Months Ended | Six Months Ended | |||||||
July 3, 2015 | July 3, 2015 | |||||||
Sales | $ | 377,934 | $ | 736,351 | ||||
Net income | 4,709 | 5,675 | ||||||
Earnings per share: | ||||||||
Basic | $ | 0.15 | $ | 0.18 | ||||
Diluted | $ | 0.15 | $ | 0.18 |
|
Six Months Ended | |||||||
(in thousands) | July 1, 2016 | July 3, 2015 | |||||
Noncash investing and financing activities: | |||||||
Common stock contributed to 401(k) Plan | $ | — | $ | 3,920 | |||
Property, plant and equipment purchases included in accounts payable | 9,696 | 1,446 | |||||
Purchase of technology included in accrued expenses | 1,000 | — | |||||
Divestiture of noncash assets | 54,591 | — | |||||
Divestiture of liabilities | 2,119 | — |
|
As of | |||||||
July 1, 2016 | January 1, 2016 | ||||||
Raw materials | $ | 114,454 | $ | 107,296 | |||
Work-in-process | 103,747 | 93,729 | |||||
Finished goods | 58,078 | 51,141 | |||||
Total | $ | 276,279 | $ | 252,166 |
|
Gross Carrying Amount | Accumulated Amortization | Foreign Currency Translation | Net Carrying Amount | ||||||||||||
At July 1, 2016 | |||||||||||||||
Purchased technology and patents | $ | 256,719 | $ | (92,017 | ) | $ | 2,397 | $ | 167,099 | ||||||
Customer lists | 759,987 | (50,389 | ) | 3,264 | 712,862 | ||||||||||
Other | 4,534 | (5,044 | ) | 803 | 293 | ||||||||||
Total amortizing intangible assets | $ | 1,021,240 | $ | (147,450 | ) | $ | 6,464 | $ | 880,254 | ||||||
At January 1, 2016 | |||||||||||||||
Purchased technology and patents | $ | 255,776 | $ | (83,708 | ) | $ | 1,444 | $ | 173,512 | ||||||
Customer lists | 761,857 | (40,815 | ) | (986 | ) | 720,056 | |||||||||
Other | 4,534 | (4,946 | ) | 821 | 409 | ||||||||||
Total amortizing intangible assets | $ | 1,022,167 | $ | (129,469 | ) | $ | 1,279 | $ | 893,977 |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2016 | July 3, 2015 | July 1, 2016 | July 3, 2015 | ||||||||||||
Cost of sales | $ | 4,240 | $ | 1,445 | $ | 8,480 | $ | 2,916 | |||||||
Selling, general and administrative expenses | 5,123 | 1,830 | 10,259 | 3,643 | |||||||||||
Research, development and engineering costs, net | 151 | 103 | 239 | 206 | |||||||||||
Total intangible asset amortization expense | $ | 9,514 | $ | 3,378 | $ | 18,978 | $ | 6,765 |
Estimated Amortization Expense | |||
Remainder of 2016 | $ | 18,934 | |
2017 | 44,050 | ||
2018 | 44,962 | ||
2019 | 45,044 | ||
2020 | 45,642 | ||
Thereafter | 681,622 | ||
Total estimated amortization expense | $ | 880,254 |
Trademarks and Tradenames | |||
At January 1, 2016 | $ | 90,288 | |
At July 1, 2016 | $ | 90,288 |
5. | INTANGIBLE ASSETS (Continued) |
Greatbatch Medical | QiG | Lake Region Medical | Total | ||||||||||||
At January 1, 2016 | $ | 303,929 | $ | 50,096 | $ | 659,545 | $ | 1,013,570 | |||||||
Goodwill divested (Note 2) | — | (40,830 | ) | — | (40,830 | ) | |||||||||
Purchase accounting adjustment (Note 2) | — | — | 3,932 | 3,932 | |||||||||||
Foreign currency translation | 91 | — | 4,076 | 4,167 | |||||||||||
At July 1, 2016 | $ | 304,020 | $ | 9,266 | $ | 667,553 | $ | 980,839 |
|
As of | |||||||
July 1, 2016 | January 1, 2016 | ||||||
Senior secured term loan A | $ | 365,625 | $ | 375,000 | |||
Senior secured term loan B | 1,019,875 | 1,025,000 | |||||
9.125% senior notes due 2023 | 360,000 | 360,000 | |||||
Revolving line of credit | 55,000 | — | |||||
Less unamortized discount on term loan B and debt issuance costs | (43,644 | ) | (45,947 | ) | |||
Total debt | 1,756,856 | 1,714,053 | |||||
Less current portion of long-term debt | 29,000 | 29,000 | |||||
Total long-term debt | $ | 1,727,856 | $ | 1,685,053 |
Remaining in 2016 | $ | 14,500 | |
2017 | 31,344 | ||
2018 | 40,719 | ||
2019 | 47,750 | ||
2020 | 102,750 | ||
Thereafter | 1,563,437 | ||
Total | $ | 1,800,500 |
Instrument | Type of Hedge | Notional Amount | Start Date | End Date | Pay Fixed Rate | Receive Current Floating Rate | Fair Value July 1, 2016 | Balance Sheet Location | |||||||||||||||||
Interest Rate Swap | Cash Flow | $ | 200,000 | Jun-17 | Jun-20 | 1.1325 | % | N/A | $ | (1,819 | ) | Other Long-Term Liabilities |
At January 1, 2016 | $ | 4,791 | |
Amortization during the period | (496 | ) | |
At July 1, 2016 | $ | 4,295 |
Debt Issuance Costs | Unamortized Discount on TLB Facility | Total | |||||||||
At January 1, 2016 | $ | 35,908 | $ | 10,039 | $ | 45,947 | |||||
Financing costs incurred | 781 | — | 781 | ||||||||
Amortization during the period | (2,435 | ) | (649 | ) | (3,084 | ) | |||||
At July 1, 2016 | $ | 34,254 | $ | 9,390 | $ | 43,644 |
|
At January 1, 2016 | $ | 7,121 | |
Net defined benefit cost | 390 | ||
Benefit payments | (70 | ) | |
Foreign currency translation | 116 | ||
At July 1, 2016 | $ | 7,557 |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2016 | July 3, 2015 | July 1, 2016 | July 3, 2015 | ||||||||||||
Service cost | $ | 110 | $ | 78 | $ | 218 | $ | 157 | |||||||
Interest cost | 45 | 15 | 88 | 30 | |||||||||||
Amortization of net loss | 47 | 12 | 93 | 26 | |||||||||||
Expected return on plan assets | (4 | ) | (3 | ) | (9 | ) | (6 | ) | |||||||
Net defined benefit cost | $ | 198 | $ | 102 | $ | 390 | $ | 207 |
|
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2016 | July 3, 2015 | July 1, 2016 | July 3, 2015 | ||||||||||||
Stock options | $ | 585 | $ | 663 | $ | 1,194 | $ | 1,282 | |||||||
Restricted stock and restricted stock units | 1,542 | 1,746 | 3,768 | 3,380 | |||||||||||
401(k) Plan stock contribution | — | 1,310 | — | 1,310 | |||||||||||
Total stock-based compensation expense | $ | 2,127 | $ | 3,719 | $ | 4,962 | $ | 5,972 | |||||||
Cost of sales | $ | 150 | $ | 1,094 | $ | 347 | $ | 1,354 | |||||||
Selling, general and administrative expenses | 1,528 | 2,148 | 3,183 | 3,909 | |||||||||||
Research, development and engineering costs, net | 116 | 477 | 293 | 709 | |||||||||||
Other operating expenses, net | 333 | — | 1,139 | — | |||||||||||
Total stock-based compensation expense | $ | 2,127 | $ | 3,719 | $ | 4,962 | $ | 5,972 |
Six Months Ended | |||||||
July 1, 2016 | July 3, 2015 | ||||||
Weighted average fair value | $ | 9.41 | $ | 12.18 | |||
Risk-free interest rate | 1.58 | % | 1.55 | % | |||
Expected volatility | 26 | % | 26 | % | |||
Expected life (in years) | 5 | 5 | |||||
Expected dividend yield | — | % | — | % |
Number of Stock Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (In Years) | Aggregate Intrinsic Value (In Millions) | |||||||||
Outstanding at January 1, 2016 | 1,678,900 | $ | 28.32 | |||||||||
Granted | 235,856 | 50.69 | ||||||||||
Exercised | (27,540 | ) | 22.13 | |||||||||
Forfeited or expired | (37,708 | ) | 45.04 | |||||||||
Adjustment due to Spin-off | — | (2.02 | ) | |||||||||
Outstanding at July 1, 2016 | 1,849,508 | $ | 28.91 | 6.1 | $ | 14.3 | ||||||
Exercisable at July 1, 2016 | 1,443,941 | $ | 23.91 | 5.3 | $ | 14.3 |
Time-Vested Activity | Weighted Average Fair Value | |||||
Nonvested at January 1, 2016 | 39,235 | $ | 47.40 | |||
Granted | 46,474 | 51.48 | ||||
Vested | (11,422 | ) | 51.21 | |||
Forfeited | (8,165 | ) | 48.92 | |||
Nonvested at July 1, 2016 | 66,122 | $ | 49.42 |
Performance- Vested Activity | Weighted Average Fair Value | |||||
Nonvested at January 1, 2016 | 577,825 | $ | 25.11 | |||
Granted | 156,730 | 31.59 | ||||
Vested | (249,153 | ) | 15.86 | |||
Forfeited | (68,237 | ) | 32.33 | |||
Nonvested at July 1, 2016 | 417,165 | $ | 31.87 |
|
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2016 | July 3, 2015 | July 1, 2016 | July 3, 2015 | ||||||||||||
2014 investments in capacity and capabilities | $ | 5,126 | $ | 6,051 | $ | 9,279 | $ | 12,738 | |||||||
Orthopedic facilities optimization | 162 | 518 | 299 | 991 | |||||||||||
Legacy Lake Region Medical consolidations | 2,088 | — | 4,447 | — | |||||||||||
Acquisition and integration costs | 7,859 | 98 | 17,824 | 164 | |||||||||||
Asset dispositions, severance and other | 259 | 1,083 | 4,785 | 1,712 | |||||||||||
$ | 15,494 | $ | 7,750 | $ | 36,634 | $ | 15,605 |
Severance and Retention | Accelerated Depreciation/Asset Write-offs | Other | Total | ||||||||||||
At January 1, 2016 | $ | 1,429 | $ | — | $ | 1,595 | $ | 3,024 | |||||||
Restructuring charges | — | 1,581 | 7,698 | 9,279 | |||||||||||
Write-offs | — | (1,581 | ) | — | (1,581 | ) | |||||||||
Cash payments | (1,235 | ) | — | (7,386 | ) | (8,621 | ) | ||||||||
At July 1, 2016 | $ | 194 | $ | — | $ | 1,907 | $ | 2,101 |
Severance and Retention | Accelerated Depreciation/Asset Write-offs | Other | Total | ||||||||||||
At January 1, 2016 | $ | — | $ | — | $ | — | $ | — | |||||||
Restructuring charges | — | — | 299 | 299 | |||||||||||
Cash payments | — | — | (299 | ) | (299 | ) | |||||||||
At July 1, 2016 | $ | — | $ | — | $ | — | $ | — |
Employee Costs | Other | Total | |||||||||
At January 1, 2016 | $ | 3,667 | $ | 596 | $ | 4,263 | |||||
Restructuring charges | 3,428 | 1,019 | 4,447 | ||||||||
Cash payments | (4,768 | ) | (1,121 | ) | (5,889 | ) | |||||
At July 1, 2016 | $ | 2,327 | $ | 494 | $ | 2,821 |
|
At January 1, 2016 | $ | 3,316 | |
Additions to warranty reserve | 1,163 | ||
Warranty claims settled | (1,427 | ) | |
At July 1, 2016 | $ | 3,052 |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2016 | July 3, 2015 | July 1, 2016 | July 3, 2015 | ||||||||||||
Addition in cost of sales | $ | 768 | $ | 420 | $ | 1,387 | $ | 664 | |||||||
Ineffective portion of change in fair value | — | — | — | — |
Instrument | Type of Hedge | Aggregate Notional Amount | Start Date | End Date | $/Peso | Fair Value | Balance Sheet Location | ||||||||||||
FX Contract | Cash flow | $ | 8,240 | Jan 2016 | Dec 2016 | 0.0584 | $ | (634 | ) | Accrued Expenses | |||||||||
FX Contract | Cash flow | $ | 5,591 | Apr 2016 | Dec 2016 | 0.0565 | $ | (251 | ) | Accrued Expenses |
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Defined Benefit Plan Liability | Cash Flow Hedges | Foreign Currency Translation Adjustment | Total Pre-Tax Amount | Tax | Net-of-Tax Amount | ||||||||||||||||||
At April 1, 2016 | $ | (1,179 | ) | $ | (1,827 | ) | $ | 22,369 | $ | 19,363 | $ | 1,134 | $ | 20,497 | |||||||||
Unrealized loss on cash flow hedges | — | (2,687 | ) | — | (2,687 | ) | 940 | (1,747 | ) | ||||||||||||||
Realized loss on foreign currency hedges | — | 768 | — | 768 | (268 | ) | 500 | ||||||||||||||||
Foreign currency translation loss | — | — | (9,701 | ) | (9,701 | ) | — | (9,701 | ) | ||||||||||||||
At July 1, 2016 | $ | (1,179 | ) | $ | (3,746 | ) | $ | 12,668 | $ | 7,743 | $ | 1,806 | $ | 9,549 |
Defined Benefit Plan Liability | Cash Flow Hedges | Foreign Currency Translation Adjustment | Total Pre-Tax Amount | Tax | Net-of-Tax Amount | ||||||||||||||||||
At January 1, 2016 | $ | (1,179 | ) | $ | (2,392 | ) | $ | 3,609 | $ | 38 | $ | 1,332 | $ | 1,370 | |||||||||
Unrealized loss on cash flow hedges | — | (2,741 | ) | — | (2,741 | ) | 959 | (1,782 | ) | ||||||||||||||
Realized loss on foreign currency hedges | — | 1,387 | — | 1,387 | (485 | ) | 902 | ||||||||||||||||
Foreign currency translation gain | — | — | 9,059 | 9,059 | — | 9,059 | |||||||||||||||||
At July 1, 2016 | $ | (1,179 | ) | $ | (3,746 | ) | $ | 12,668 | $ | 7,743 | $ | 1,806 | $ | 9,549 |
13. | ACCUMULATED OTHER COMPREHENSIVE INCOME (Continued) |
Defined Benefit Plan Liability | Cash Flow Hedges | Foreign Currency Translation Adjustment | Total Pre-Tax Amount | Tax | Net-of-Tax Amount | ||||||||||||||||||
At April 3, 2015 | $ | (1,181 | ) | $ | (3,480 | ) | $ | 9,625 | $ | 4,964 | $ | 1,734 | $ | 6,698 | |||||||||
Unrealized loss on cash flow hedges | — | (840 | ) | — | (840 | ) | 295 | (545 | ) | ||||||||||||||
Realized loss on foreign currency hedges | — | 420 | — | 420 | (147 | ) | 273 | ||||||||||||||||
Realized loss on interest rate swap hedges | — | 281 | — | 281 | (98 | ) | 183 | ||||||||||||||||
Foreign currency translation gain | — | — | 214 | 214 | — | 214 | |||||||||||||||||
At July 3, 2015 | $ | (1,181 | ) | $ | (3,619 | ) | $ | 9,839 | $ | 5,039 | $ | 1,784 | $ | 6,823 |
Defined Benefit Plan Liability | Cash Flow Hedges | Foreign Currency Translation Adjustment | Total Pre-Tax Amount | Tax | Net-of-Tax Amount | ||||||||||||||||||
At January 2, 2015 | $ | (1,181 | ) | $ | (2,558 | ) | $ | 11,450 | $ | 7,711 | $ | 1,412 | $ | 9,123 | |||||||||
Unrealized loss on cash flow hedges | — | (2,187 | ) | — | (2,187 | ) | 766 | (1,421 | ) | ||||||||||||||
Realized loss on foreign currency hedges | — | 664 | — | 664 | (232 | ) | 432 | ||||||||||||||||
Realized loss on interest rate swap hedges | — | 462 | — | 462 | (162 | ) | 300 | ||||||||||||||||
Foreign currency translation loss | — | — | (1,611 | ) | (1,611 | ) | — | (1,611 | ) | ||||||||||||||
At July 3, 2015 | $ | (1,181 | ) | $ | (3,619 | ) | $ | 9,839 | $ | 5,039 | $ | 1,784 | $ | 6,823 |
|
Fair Value Measurements Using | ||||||||||||||||
At July 1, | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
Description | 2016 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Liabilities | ||||||||||||||||
Foreign currency contracts (Note 11) | $ | 885 | $ | — | $ | 885 | $ | — | ||||||||
Interest rate swap (Note 6) | $ | 1,819 | $ | — | $ | 1,819 | $ | — |
|
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2016 | July 3, 2015 | July 1, 2016 | July 3, 2015 | ||||||||||||
Product line sales: | |||||||||||||||
Advanced Surgical, Orthopedics, and Portable Medical | $ | 104,317 | $ | 53,181 | $ | 195,646 | $ | 105,819 | |||||||
Cardio and Vascular | 144,219 | 12,907 | 277,869 | 23,263 | |||||||||||
Cardiac/Neuromodulation | 91,623 | 92,257 | 188,698 | 172,873 | |||||||||||
Electrochem | 9,819 | 16,545 | 21,491 | 34,255 | |||||||||||
Elimination of interproduct line sales | (1,596 | ) | — | (3,084 | ) | — | |||||||||
Total sales | 348,382 | 174,890 | $ | 680,620 | $ | 336,210 |
15. | BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION (Continued) |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2016 | July 3, 2015 | July 1, 2016 | July 3, 2015 | ||||||||||||
Business segment sales: | |||||||||||||||
Greatbatch Medical | $ | 141,167 | $ | 172,786 | $ | 272,773 | $ | 329,763 | |||||||
QiG | 2,747 | 2,741 | 6,121 | 7,788 | |||||||||||
Lake Region Medical | 204,934 | — | 403,209 | — | |||||||||||
Elimination of intersegment sales(a) | (466 | ) | (637 | ) | (1,483 | ) | (1,341 | ) | |||||||
Total sales | 348,382 | 174,890 | $ | 680,620 | $ | 336,210 |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2016 | July 3, 2015 | July 1, 2016 | July 3, 2015 | ||||||||||||
Segment income (loss) from operations: | |||||||||||||||
Greatbatch Medical | $ | 14,564 | $ | 28,914 | $ | 25,579 | $ | 50,667 | |||||||
QiG | (700 | ) | (7,002 | ) | (5,909 | ) | (12,452 | ) | |||||||
Lake Region Medical | 27,356 | — | 48,555 | — | |||||||||||
Total segment income from operations | 41,220 | 21,912 | 68,225 | 38,215 | |||||||||||
Unallocated operating expenses | (11,951 | ) | (8,878 | ) | (27,822 | ) | (15,792 | ) | |||||||
Operating income | 29,269 | 13,034 | 40,403 | 22,423 | |||||||||||
Unallocated expenses, net | (28,582 | ) | (1,099 | ) | (52,478 | ) | (668 | ) | |||||||
Income (loss) before provision for income taxes | $ | 687 | $ | 11,935 | $ | (12,075 | ) | $ | 21,755 |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2016 | July 3, 2015 | July 1, 2016 | July 3, 2015 | ||||||||||||
Sales by geographic area: | |||||||||||||||
United States | $ | 204,090 | $ | 75,041 | $ | 406,213 | $ | 145,557 | |||||||
Non-Domestic locations: | |||||||||||||||
Puerto Rico | 39,344 | 37,415 | 78,472 | 71,431 | |||||||||||
Belgium | 20,491 | 16,018 | 38,657 | 33,385 | |||||||||||
Rest of world | 84,457 | 46,416 | 157,278 | 85,837 | |||||||||||
Total sales | $ | 348,382 | $ | 174,890 | $ | 680,620 | $ | 336,210 |
Three Months Ended | Six Months Ended | ||||||
July 1, 2016 | July 3, 2015 | July 1, 2016 | July 3, 2015 | ||||
Customer A | 17% | 20% | 18% | 21% | |||
Customer B | 15% | 18% | 15% | 18% | |||
Customer C | 13% | 12% | 13% | 13% | |||
Total | 45% | 50% | 46% | 52% |
As of | |||||||
July 1, 2016 | January 1, 2016 | ||||||
United States | $ | 265,208 | $ | 264,556 | |||
Rest of world | 118,021 | 114,936 | |||||
Total | $ | 383,229 | $ | 379,492 |
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