INTEGER HOLDINGS CORP, 10-K filed on 3/3/2015
Annual Report
Document and Entity Information (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Mar. 3, 2015
Jul. 3, 2014
Document and Entity Information [Abstract]
 
 
 
Entity Registrant Name
GREATBATCH, INC. 
 
 
Entity Central Index Key
0001114483 
 
 
Document Type
10-K 
 
 
Document Period End Date
Jan. 02, 2015 
 
 
Amendment Flag
false 
 
 
Document Fiscal Year Focus
2014 
 
 
Document Fiscal Period Focus
FY 
 
 
Current Fiscal Year End Date
--01-02 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Entity Public Float
 
 
$ 1,212 
Entity Common Stock, Shares Outstanding
 
25,354,051 
 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Jan. 2, 2015
Jan. 3, 2014
Current assets:
 
 
Cash and cash equivalents
$ 76,824 
$ 35,465 
Accounts receivable, net of allowance for doubtful accounts of $1.4 million in 2014 and $2.0 million in 2013
124,953 
113,679 
Inventories
129,242 
118,358 
Refundable income taxes
1,716 
2,306 
Deferred income taxes
6,168 
6,008 
Prepaid expenses and other current assets
11,780 
6,717 
Total current assets
350,683 
282,533 
Property, plant and equipment, net
144,925 
145,773 
Amortizing intangible assets, net
65,337 
76,122 
Indefinite-lived intangible assets
20,288 
20,288 
Goodwill
354,393 
346,656 
Deferred income taxes
2,626 
2,933 
Other assets
17,757 
16,398 
Total assets
956,009 
890,703 
Current liabilities:
 
 
Current portion of long-term debt
11,250 
0 
Accounts payable
46,436 
46,508 
Income taxes payable
2,003 
0 
Deferred income taxes
588 
613 
Accrued expenses
48,384 
44,681 
Total current liabilities
108,661 
91,802 
Long-term debt
176,250 
197,500 
Deferred income taxes
53,195 
52,012 
Other long-term liabilities
4,541 
7,334 
Total liabilities
342,647 
348,648 
Commitments and contingencies
   
   
Stockholders’ equity:
 
 
Preferred stock, $0.001 par value, authorized 100,000,000 shares; no shares issued or outstanding in 2014 or 2013
0 
0 
Common stock, $0.001 par value, authorized 100,000,000 shares; 25,099,293 shares issued and 25,070,931 shares outstanding in 2014; 24,459,153 shares issued and 24,422,555 shares outstanding in 2013
25 
24 
Additional paid-in capital
366,073 
344,915 
Treasury stock, at cost, 28,362 shares in 2014 and 36,598 shares in 2013
(1,307)
(1,232)
Retained earnings
239,448 
183,990 
Accumulated other comprehensive income
9,123 
14,358 
Total stockholders’ equity
613,362 
542,055 
Total liabilities and stockholders’ equity
$ 956,009 
$ 890,703 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Jan. 2, 2015
Jan. 3, 2014
Current assets:
 
 
Allowance for doubtful accounts
$ 1.4 
$ 2.0 
Stockholders’ equity:
 
 
Preferred stock, par value
$ 0.001 
$ 0.001 
Preferred stock, shares authorized
100,000,000 
100,000,000 
Preferred stock, shares issued
0 
0 
Preferred stock, shares outstanding
0 
0 
Common stock, par value
$ 0.001 
$ 0.001 
Common stock, shares authorized
100,000,000 
100,000,000 
Common stock, shares issued
25,099,293 
24,459,153 
Common stock, shares outstanding
25,070,931 
24,422,555 
Treasury stock, shares
28,362 
36,598 
Consolidated Statements of Operations and Comprehensive Income (Loss) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Income Statement [Abstract]
 
 
 
Sales
$ 687,787 
$ 663,945 
$ 646,177 
Cost of sales
456,389 
444,632 
444,528 
Gross profit
231,398 
219,313 
201,649 
Operating expenses:
 
 
 
Selling, general and administrative expenses
90,602 
88,107 
80,992 
Research, development and engineering costs, net
49,845 
54,077 
52,490 
Other operating expenses, net
15,297 
15,790 
42,346 
Total operating expenses
155,744 
157,974 
175,828 
Operating income
75,654 
61,339 
25,821 
Interest expense
4,252 
11,261 
18,054 
(Gain) loss on cost and equity method investments, net
(4,370)
694 
106 
Other (income) expense, net
(807)
546 
931 
Income before provision for income taxes
76,579 
48,838 
6,730 
Provision for income taxes
21,121 
12,571 
11,529 
Net income (loss)
55,458 
36,267 
(4,799)
Earnings (loss) per share:
 
 
 
Basic (in dollars per share)
$ 2.23 
$ 1.51 
$ (0.20)
Diluted (in dollars per share)
$ 2.14 
$ 1.43 
$ (0.20)
Weighted average shares outstanding:
 
 
 
Basic (in shares)
24,825 
23,991 
23,584 
Diluted (in shares)
25,975 
25,323 
23,584 
Comprehensive Income (Loss)
 
 
 
Net income (loss)
55,458 
36,267 
(4,799)
Foreign currency translation gain (loss)
(3,502)
1,521 
1,905 
Net change in cash flow hedges, net of tax
(1,359)
(382)
428 
Defined benefit plan liability adjustment, net of tax
(374)
272 
1,685 
Other comprehensive income (loss)
(5,235)
1,411 
4,018 
Comprehensive income (loss)
$ 50,223 
$ 37,678 
$ (781)
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Cash flows from operating activities:
 
 
 
Net income (loss)
$ 55,458 
$ 36,267 
$ (4,799)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
Depreciation and amortization
37,457 
35,966 
46,368 
Debt related amortization included in interest expense
773 
6,366 
12,557 
Stock-based compensation
13,186 
14,101 
10,904 
(Gain) loss on cost and equity method investments, net
(4,370)
694 
106 
Other non-cash (gains) losses, net
(3,214)
255 
10,788 
Deferred income taxes
531 
(29,856)
5,733 
Changes in operating assets and liabilities, net of acquisitions:
 
 
 
Accounts receivable
(11,731)
7,379 
(18,834)
Inventories
(6,726)
(11,508)
(7,481)
Prepaid expenses and other assets
(3,281)
(353)
1,253 
Accounts payable
(970)
1,307 
5,757 
Accrued expenses
1,214 
(1,176)
1,459 
Income taxes payable
2,949 
(2,687)
1,020 
Net cash provided by operating activities
81,276 
56,755 
64,831 
Cash flows from investing activities:
 
 
 
Proceeds from sale of orthopaedic product lines
2,655 
4,746 
0 
Acquisition of property, plant and equipment
(24,823)
(18,558)
(41,069)
Proceeds from sale (purchase) of cost and equity method investments, net
2,248 
(3,732)
(1,887)
Acquisitions, net of cash acquired
(16,002)
0 
(17,224)
Other investing activities, net
0 
(740)
393 
Net cash used in investing activities
(35,922)
(18,284)
(59,787)
Cash flows from financing activities:
 
 
 
Principal payments of long-term debt
(10,000)
(458,282)
(32,000)
Proceeds from issuance of long-term debt
0 
425,000 
10,000 
Issuance of common stock
8,278 
12,807 
1,263 
Payment of debt issuance costs
0 
(2,802)
0 
Other financing activities, net
(655)
(81)
(717)
Net cash used in financing activities
(2,377)
(23,358)
(21,454)
Effect of foreign currency exchange rates on cash and cash equivalents
(1,618)
68 
186 
Net increase (decrease) in cash and cash equivalents
41,359 
15,181 
(16,224)
Cash and cash equivalents, beginning of year
35,465 
20,284 
36,508 
Cash and cash equivalents, end of year
$ 76,824 
$ 35,465 
$ 20,284 
Consolidated Statement of Stockholders' Equity (USD $)
In Thousands, unless otherwise specified
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Treasury Stock [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Balance at Dec. 30, 2011
$ 467,283 
$ 23 
$ 307,196 
$ (1,387)
$ 152,522 
$ 8,929 
Balance, shares at Dec. 30, 2011
 
23,466 
 
(60)
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Stock-based compensation
9,019 
 
9,019 
 
 
 
Net shares issued under stock incentive plans
687 
0 
663 
24 
 
 
Net shares issued under stock incentive plans, shares
 
103 
 
1 
 
 
Income tax liability from stock options, restricted stock and restricted stock units
(141)
 
(141)
 
 
 
Shares contributed to 401(k) Plan
4,793 
1 
3,881 
911 
 
 
Shares contributed to 401(k) Plan, shares
 
163 
 
39 
 
 
Net income (loss)
(4,799)
 
 
 
(4,799)
 
Total other comprehensive income (loss)
4,018 
 
 
 
 
4,018 
Balance at Dec. 28, 2012
480,860 
24 
320,618 
(452)
147,723 
12,947 
Balance, shares at Dec. 28, 2012
 
23,732 
 
(20)
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Stock-based compensation
9,333 
 
9,333 
 
 
 
Net shares issued under stock incentive plans
11,465 
0 
12,245 
(780)
 
 
Net shares issued under stock incentive plans, shares
 
636 
 
(17)
 
 
Income tax liability from stock options, restricted stock and restricted stock units
242 
 
242 
 
 
 
Shares contributed to 401(k) Plan
2,477 
0 
2,477 
0 
 
 
Shares contributed to 401(k) Plan, shares
 
91 
 
0 
 
 
Net income (loss)
36,267 
 
 
 
36,267 
 
Total other comprehensive income (loss)
1,411 
 
 
 
 
1,411 
Balance at Jan. 03, 2014
542,055 
24 
344,915 
(1,232)
183,990 
14,358 
Balance, shares at Jan. 03, 2014
 
24,459 
 
(37)
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Stock-based compensation
8,921 
 
8,921 
 
 
 
Net shares issued under stock incentive plans
3,465 
1 
7,754 
(4,290)
 
 
Net shares issued under stock incentive plans, shares
 
640 
 
(86)
 
 
Income tax liability from stock options, restricted stock and restricted stock units
4,357 
 
4,357 
 
 
 
Shares contributed to 401(k) Plan
4,341 
0 
126 
4,215 
 
 
Shares contributed to 401(k) Plan, shares
 
0 
 
95 
 
 
Net income (loss)
55,458 
 
 
 
55,458 
 
Total other comprehensive income (loss)
(5,235)
 
 
 
 
(5,235)
Balance at Jan. 02, 2015
$ 613,362 
$ 25 
$ 366,073 
$ (1,307)
$ 239,448 
$ 9,123 
Balance, shares at Jan. 02, 2015
 
25,099 
 
(28)
 
 
Summary of Significant Accounting Policies
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1.
 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation – The consolidated financial statements include the accounts of Greatbatch, Inc. and its wholly owned subsidiary Greatbatch Ltd. (collectively, the “Company” or “Greatbatch”). All intercompany balances and transactions have been eliminated in consolidation.
Nature of Operations – The Company has two reportable segments: Greatbatch Medical and QiG Group (“QiG”). Greatbatch Medical designs and manufactures products where Greatbatch either owns the intellectual property or has unique manufacturing and assembly expertise. These products include medical devices and components for the cardiac, neuromodulation, orthopaedics, portable medical, vascular and energy markets among others. The Greatbatch Medical segment also offers value-added assembly and design engineering services for medical devices that utilize its component products.
QiG focuses on developing medical device systems for some of healthcare’s most pressing challenges and reflects Greatbatch’s strategic evolution of its product offerings in order to raise the growth and profitability profile of the Company. QiG utilizes a disciplined and diversified portfolio approach with three investor modes: new medical device systems commercialization, collaborative programs with original equipment manufacturers (“OEMs”) customers, and strategic equity positions in emerging healthcare companies.
The Company’s customers include large multi-national OEMs and their affiliated subsidiaries.
Fiscal Year End – The Company utilizes a fifty-two, fifty-three week fiscal year ending on the Friday nearest December 31. Fiscal years 2014, 2013 and 2012 ended on January 2, 2015, January 3, 2014 and December 28, 2012. Fiscal years 2014 and 2012 each contained fifty-two weeks, while fiscal year 2013 contained fifty-three weeks.
Fair Value Measurements – Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the “exit price”) in an orderly transaction between market participants at the measurement date. Accounting Standards Codification (“ASC”) establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:
Level 1 – Valuation is based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Level 1 valuations do not entail a significant degree of judgment.
Level 2 – Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market.
Level 3 – Valuation is based on unobservable inputs that are significant to the overall fair value measurement. The degree of judgment in determining fair value is greatest for Level 3 valuations.
The availability of observable inputs can vary and is affected by a wide variety of factors, including, the type of asset/liability, whether the asset/liability is established in the marketplace, and other characteristics particular to the valuation. To the extent that a valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, assumptions are required to reflect those that market participants would use in pricing the asset or liability at the measurement date. Note 18 “Fair Value Measurements” contains additional information on assets and liabilities recorded at fair value in the consolidated financial statements.
Cash and Cash Equivalents – Cash and cash equivalents consist of cash and highly liquid, short-term investments with maturities at the time of purchase of three months or less. The carrying amount of cash and cash equivalents approximated their fair value as of January 2, 2015 and January 3, 2014 based upon the short-term nature of these instruments.
Concentration of Credit Risk – Financial instruments that potentially subject the Company to concentration of credit risk consist principally of accounts receivable. A significant portion of the Company’s sales and/or accounts receivable are to four customers, all in the medical device industry, and, as such, the Company is directly affected by the condition of those customers and that industry. However, the credit risk associated with trade receivables is partially mitigated due to the stability of those customers. The Company performs on-going credit evaluations of its customers. Note 19 “Business Segment, Geographic and Concentration Risk Information” contains information on sales and accounts receivable for these customers. The Company maintains cash deposits with major banks, which from time to time may exceed insured limits. The Company performs on-going credit evaluations of its banks.
Allowance for Doubtful Accounts – The Company provides credit, in the normal course of business, to its customers in the form of trade receivables. Credit is extended based on evaluation of a customer’s financial condition and collateral is not required. The Company maintains an allowance for those customer receivables that it does not expect to collect. The Company accrues its estimated losses from uncollectable accounts receivable to the allowance based upon recent historical experience, the length of time the receivable has been outstanding and other specific information as it becomes available. Provisions to the allowance for doubtful accounts are charged to current operating expenses. Actual losses are charged against this allowance when incurred. The carrying amount of trade receivables approximated their fair value as of January 2, 2015 based upon the short-term nature of these assets.
Inventories – Inventories are stated at the lower of cost, determined using the first-in first-out method, or market. Write-downs for excess, obsolete or expired inventory are based primarily on how long the inventory has been held as well as estimates of forecasted net sales of that product. A significant change in the timing or level of demand for products may result in recording additional write-downs for excess, obsolete or expired inventory in the future. Note 4 “Inventories” contains additional information on the Company’s inventory.
Property, Plant and Equipment (“PP&E”) – PP&E is carried at cost less accumulated depreciation. Depreciation is computed by the straight-line method over the estimated useful lives of the assets, as follows: buildings and building improvements 7-40 years; machinery and equipment 3-8 years; office equipment 3-10 years; and leasehold improvements over the remaining lives of the improvements or the lease term, if less. The cost of repairs and maintenance are expensed as incurred; renewals and betterments are capitalized. Upon retirement or sale of an asset, its cost and related accumulated depreciation or amortization is removed from the accounts and any gain or loss is recorded in operating income or expense. Note 6 “Property, Plant and Equipment, Net” contains additional information on the Company’s PP&E.
Business Combinations – The Company records its business combinations under the acquisition method of accounting. Under the acquisition method of accounting, the Company allocates the purchase price of each acquisition to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values at the date of acquisition. The fair value of identifiable intangible assets is based upon detailed valuations that use various assumptions made by management. Any excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired is allocated to goodwill. All direct acquisition-related costs are expensed as incurred.
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 Expenses, 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 contingent consideration. See Note 18 “Fair Value Measurements” and Note 2 “Acquisitions” for additional information on the Company’s contingent consideration and acquisitions, respectively.
Amortizing Intangible Assets – Amortizing intangible assets consists primarily of purchased technology, patents and customer lists. The Company amortizes its definite-lived intangible assets over their estimated useful lives utilizing an accelerated or straight-line method of amortization, which approximates the projected cash flows used to fair value those intangible assets at the time of acquisition. When the straight-line method of amortization is utilized, the estimated useful life of the intangible asset is shortened to assure that recognition of amortization expense corresponds with the expected cash flows. The amortization period for the Company’s amortizing intangible assets are as follows: purchased technology and patents 5-15 years; customer lists 7-20 years and other intangible assets 1-10 years. See Note 7 “Intangible Assets” for additional information on the Company’s amortizing intangible assets.
Impairment of Long-Lived Assets – The Company assesses the impairment of definite-lived long-lived assets or asset groups when events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that are considered in deciding when to perform an impairment review include: a significant decrease in the market price of the asset or asset group; a significant change in the extent or manner in which a 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 a 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; 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 a long-lived asset or asset group; or a current expectation that, more likely than not, a 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.
Potential recoverability is measured by comparing the carrying amount of the 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. When it is determined that useful lives of assets are shorter than originally estimated, and no impairment is present, the rate of depreciation is accelerated in order to fully depreciate the assets over their new shorter useful lives.
Goodwill and other indefinite lived intangible assets recorded are not amortized but are periodically tested for impairment. The Company assesses goodwill for impairment on the last day of each fiscal year, or more frequently if certain events occur as described above. Goodwill is evaluated for impairment through the comparison of the fair value of the reporting units to their carrying values. When evaluating goodwill for impairment, the Company may first perform an assessment of qualitative factors to determine if the fair value of the reporting unit is more-likely-than-not greater than its carrying amount. This qualitative assessment is referred to as a “step zero” approach. If, based on the review of the qualitative factors, the Company determines it is more-likely-than-not that the fair value of the reporting unit is greater than its carrying value, the required two-step impairment test can be bypassed. If the Company does not perform a step zero assessment or if the fair value of the reporting unit is more-likely-than-not less than its carrying value, the Company must perform a two-step impairment test, and calculate the estimated fair value of the reporting unit. If, based upon the two-step impairment test, it is determined that 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. Under the two-step approach, fair values for reporting units are determined based on discounted cash flows and market multiples.
The Company completed its annual goodwill impairment assessment for 2014 by performing a step zero qualitative analysis. As part of this analysis, the Company evaluated factors including, but not limited to, macro-economic conditions, market and industry conditions, cost factors, competitive environment, share price fluctuations, results of the last impairment test, and the operational stability and the overall financial performance of the reporting units. After completing the analysis, the Company determined that it was more likely than not that its reporting units fair values are greater than the reporting units carrying values and the two-step impairment test is not necessary.
Other indefinite lived intangible assets are assessed for impairment on the last day of each fiscal year, or more frequently if certain events occur as described above, by comparing the fair value of the intangible asset to its carrying value. The fair value is determined by using the income approach. Note 7 “Intangible Assets” contains additional information on the Company’s long-lived intangible assets.
Other Long-Term Assets – Other long-term assets includes deferred financing fees incurred in connection with the Company’s issuance of its long-term debt. The fees relating to the Company’s Term Loan are amortized to Interest Expense using the effective interest method over the period from the date of issuance to the put option date (if applicable) or the maturity date, whichever is earlier. Fees relating to the Company’s Revolving Credit Facility are amortized to Interest Expense on a straight-line basis over the contractual term of the credit facility. The amortization of deferred fees is included in Debt Related Amortization Included in Interest Expense in the Consolidated Statements of Cash Flows. Note 9 “Debt” contains additional information on the Company’s deferred financing fees. 
Other long-term assets also include investments in equity securities of entities that are not publicly traded and which do not have readily determinable fair values. The Company accounts for investments in these entities under the cost or equity method depending on the type of ownership interest, as well as the Company’s ability to exercise influence over these entities. Equity method investments are initially recorded at cost, and are subsequently adjusted to reflect the Company’s share of earnings or losses of the investee. Cost method investments are recorded at cost. Each reporting period, management evaluates these cost and equity method investments to determine if there are any events or circumstances that are likely to have a significant effect on the fair value of the investment. Examples of such impairment indicators include, but are not limited to: a recent sale or offering of similar shares of the investment at a price below the Company’s cost basis; a significant deterioration in earnings performance; a significant change in the regulatory, economic or technological environment of the investee; or a significant doubt about an investee’s ability to continue as a going concern. If an impairment indicator is identified, management will estimate the fair value of the investment and compare it to its carrying value. The estimation of fair value considers all available financial information related to the investee, including, but not limited to, valuations based on recent third-party equity investments in the investee. If the fair value of the investment is less than its carrying value, the investment is impaired and a determination as to whether the impairment is other-than-temporary is made. Impairment is deemed to be other-than-temporary unless the Company has the ability and intent to hold the investment for a period sufficient for a market recovery up to the carrying value of the investment. Further, evidence must indicate that the carrying value of the investment is recoverable within a reasonable period. For other-than-temporary impairments, an impairment loss is recognized equal to the difference between the investment’s carrying value and its fair value. The Company has determined that these investments are not considered variable interest entities. The Company’s exposure related to these entities is limited to its recorded investment. These investments are in start-up research and development companies whose fair value is highly subjective in nature and subject to future fluctuations, which could be significant.
Income Taxes – The consolidated financial statements of the Company have been prepared using the asset and liability approach in accounting for income taxes, which requires the recognition of deferred income taxes for the expected future tax consequences of net operating losses, credits, and temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided on deferred tax assets if it is determined that it is more likely than not that the asset will not be realized.
The Company accounts for uncertain tax positions using a more likely than not recognition threshold. The evaluation of uncertain tax positions is based on factors including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. These tax positions are evaluated on a quarterly basis. The Company recognizes interest expense related to uncertain tax positions as Provision for Income Taxes. Penalties, if incurred, are recognized as a component of Selling, General and Administrative Expenses (“SG&A”).
The Company and its subsidiary file a consolidated U.S. federal income tax return. State tax returns are filed on a combined or separate basis depending on the applicable laws in the jurisdictions where tax returns are filed. The Company also files foreign tax returns on a separate company basis in the countries in which it operates. See Note 14 “Income Taxes” for additional information.
Convertible Subordinated Notes (“CSN”) – For convertible debt instruments that may be settled in cash upon conversion, the Company accounts for the liability and equity components of those instruments in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. 
Upon issuance, the Company determined the carrying amount of the liability component of CSN by measuring the fair value of a similar liability that does not have the associated conversion option. The carrying amount of the conversion option was then determined by deducting the fair value of the liability component from the initial proceeds received from the issuance of CSN. The carrying amount of the conversion option was recorded in Additional Paid-In Capital with an offset to Long-Term Debt and was amortized using the effective interest method over the period from the date of issuance to the maturity date. The amortization of discount related to the Company’s convertible debt instruments is included in Debt Related Amortization Included in Interest Expense in the Consolidated Statements of Cash Flows. See Note 9 “Debt” for additional information.
Derivative Financial Instruments – The Company recognizes all derivative financial instruments in its consolidated financial statements at fair value. Changes in the fair value of derivative instruments are recorded in earnings unless hedge accounting criteria are met. The Company designates its interest rate swaps (See Note 9 “Debt”) and foreign currency contracts (See Note 15 “Commitments and Contingencies”) entered into as cash flow hedges. The effective portion of the changes in fair value of these cash flow hedges is recorded each period, net of tax, in Accumulated Other Comprehensive Income until the related hedged transaction occurs. Any ineffective portion of the changes in fair value of these cash flow hedges is recorded in earnings. In the event the hedged cash flow for forecasted transactions does not occur, or it becomes probable that they will not occur, the Company would reclassify the amount of any gain or loss on the related cash flow hedge to income (expense) at that time. Cash flows related to these derivative financial instruments are included in cash flows from operating activities.
Revenue Recognition – The Company recognizes revenue when it is realized or realizable and earned. This occurs when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable (including any price concessions under long-term agreements), the buyer is obligated to pay us (i.e., not contingent on a future event), the risk of loss is transferred, there is no obligation of future performance, collectability is reasonably assured and the amount of future returns can reasonably be estimated. With regards to the Company’s customers (including distributors), those criteria are met at the time of shipment when title passes. Currently, the revenue recognition policy is the same for both Greatbatch Medical and QiG. In general, for customers with long-term contracts, we have negotiated fixed pricing arrangements. During new contract negotiations, price level decreases (concessions) for future sales may be offered to customers in exchange for volume and/or long-term commitments. Once the new contracts are signed, these prices are fixed and determinable for all future sales. The Company includes shipping and handling fees billed to customers in Sales. Shipping and handling costs associated with inbound and outbound freight are recorded in Cost of Sales. In certain instances the Company obtains component parts for sub-assemblies from its customers that are included in the final product sold back to the same customer. These amounts are excluded from Sales and Cost of Sales recognized by the Company. The cost of these customer supplied component parts amounted to $48.1 million, $45.3 million and $32.6 million in 2014, 2013 and 2012, respectively.
Product Warranties – The Company allows customers to return defective or damaged products for credit, replacement, or exchange. The Company warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. The Company accrues its estimated exposure to warranty claims, through Cost of Sales, based upon recent historical experience and other specific information as it becomes available. Note 15 “Commitments and Contingencies” contains additional information on the Company’s product warranties.
Research, Development and Engineering Costs, Net (“RD&E”) – RD&E costs are expensed as incurred. The primary costs are salary and benefits for personnel, material costs used in development projects and subcontracting costs. Cost reimbursements for engineering services from customers for whom the Company designs products are recorded as an offset to engineering costs upon achieving development milestones specified in the contracts. These reimbursements do not cover the complete cost of the development projects. Additionally, the technology developed under these cost reimbursement projects is owned by the Company and is utilized for future products developed for other customers.
In-process research and development (“IPR&D”) represents research projects acquired in a business combination 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 tests 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.
Note 12 “Research, Development and Engineering Costs, Net” contains additional information on the Company’s RD&E activities.
Stock-Based Compensation – The Company records compensation costs related to stock-based awards granted to employees based upon their estimated fair value on the grant date. Compensation cost for service-based awards is recognized ratably over the applicable vesting period. Compensation cost for nonmarket-based performance awards is reassessed each period and recognized based upon the probability that the performance targets will be achieved. Compensation cost for market-based performance awards is expensed ratably over the applicable vesting period and is recognized each period whether the performance metrics are achieved or not.
The Company utilizes the Black-Scholes option pricing model to estimate the fair value of stock options granted. For service-based and nonmarket-based performance restricted stock and restricted stock unit awards, the fair market value of the award is determined based upon the closing value of the Company’s stock price on the grant date. For market-based performance restricted stock unit awards, the fair market value of the award is determined utilizing a Monte Carlo simulation model, which projects the value of the Company’s stock under numerous scenarios and determines the value of the award based upon the present value of those projected outcomes. 
The amount of stock-based compensation expense recognized is based on the portion of the awards that are ultimately expected to vest. The Company estimates pre-vesting forfeitures at the time of grant by analyzing historical data and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The total expense recognized over the vesting period will only be for those awards that ultimately vest, excluding market and nonmarket performance award considerations. Note 11 “Stock-Based Compensation” contains additional information on the Company’s stock-based compensation.
Foreign Currency Translation – The Company translates all assets and liabilities of its foreign subsidiaries, where the U.S. dollar is not the functional currency, at the period-end exchange rate and translates income and expenses at the average exchange rates in effect during the period. The net effect of this translation is recorded in the consolidated financial statements as Accumulated Other Comprehensive Income. Translation adjustments are not adjusted for income taxes as they relate to permanent investments in the Company’s foreign subsidiaries.
Net foreign currency transaction gains and losses are included in Other (Income) Expense, Net and amounted to a gain of $1.3 million for 2014, a loss of $0.1 million for 2013 and a loss of $0.3 million for 2012.
Defined Benefit Plans – The Company recognizes in its balance sheet as an asset or liability the overfunded or underfunded status of its defined benefit plans provided to its employees located in Mexico, Switzerland and France. This asset or liability is measured as the difference between the fair value of plan assets and the benefit obligation of those plans. For these plans, the benefit obligation is the projected benefit obligation, which is calculated based on actuarial computations of current and future benefits for employees. Actuarial gains or losses and prior service costs or credits that arise during the period, but are not included as components of net periodic benefit expense, are recognized as a component of Accumulated Other Comprehensive Income. Defined benefit expenses are charged to Cost of Sales, SG&A and RD&E expenses as applicable. Note 10 “Benefit Plans” contains additional information on these costs.
Earnings (Loss) Per Share (“EPS”) – Basic EPS is calculated by dividing Net Income (Loss) by the weighted average number of shares outstanding during the period. Diluted EPS is calculated by adjusting the weighted average number of shares outstanding for potential common shares, which consist of stock options, unvested restricted stock and restricted stock units and, if applicable, contingently convertible instruments such as convertible debt. Note 16 “Earnings (Loss) Per Share” contains additional information on the computation of the Company’s EPS. 
Comprehensive Income (Loss) – The Company’s comprehensive income (loss) as reported in the Consolidated Statements of Operations and Comprehensive Income (Loss) includes net income (loss), foreign currency translation adjustments, the net change in cash flow hedges, and defined benefit plan liability adjustments. The Consolidated Statements of Operations and Comprehensive Income (Loss) and Note 17 “Accumulated Other Comprehensive Income” contains additional information on the computation of the Company’s comprehensive income (loss).
Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of sales and expenses during the reporting period. Actual results could differ materially from those estimates.
Recently Issued Accounting Pronouncements – In the normal course of business, management evaluates all new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”), Securities and Exchange Commission (“SEC”), Emerging Issues Task Force (“EITF”), or other authoritative accounting bodies to determine the potential impact they may have on the Company’s Consolidated Financial Statements. Based upon this review, except as noted below, management does not expect any of the recently issued accounting pronouncements, which have not already been adopted, to have a material impact on the Company’s Consolidated Financial Statements.
In November 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-17, “Business Combinations (Topic 805): Pushdown Accounting (a Consensus of the FASB Emerging Issues Task Force).” The amendments in this ASU provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. An acquired entity may elect the option to apply pushdown accounting in the reporting period in which the change-in-control event occurs. The amendments in this ASU are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. This ASU did not impact the Company’s Consolidated Financial Statements.
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” The core principle behind ASU 2014-09 is that an entity should recognize revenue in an amount that reflects the consideration to which the entity expects to be entitled in exchange for delivering goods and services. This model involves a five-step process that includes identifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract and recognizing revenue when the entity satisfies the performance obligations. This ASU supersedes existing revenue recognition guidance and is effective for annual reporting periods beginning after December 15, 2016 with early application not permitted. This ASU allows two methods of adoption; a full retrospective approach where three years of financial information are presented in accordance with the new standard, and a modified retrospective approach where this ASU is applied to the most current period presented in the financial statements. The Company is currently assessing the financial impact of adopting the new standard and the methods of adoption; however, given the scope of the new standard, the Company is currently unable to provide a reasonable estimate regarding the financial impact or which method of adoption will be elected.
In April 2014, the FASB issued ASU No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which amends the definition of a discontinued operation and requires entities to provide additional disclosures about disposal transactions that do not meet the discontinued operations criteria. The revised guidance changes how entities identify and disclose information about disposal transactions under U.S. GAAP. This ASU is effective prospectively for all disposals (except disposals classified as held for sale before the adoption date) or components initially classified as held for sale in periods beginning on or after December 15, 2014, with early adoption permitted. This ASU will be applicable for disposal transactions, if any, that the Company enters into after the adoption date.
In July 2013, the FASB issued ASU No. 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” This ASU requires that entities present an unrecognized tax benefit, or portion of an unrecognized tax benefit, as a reduction to a deferred tax asset in the financial statements for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with certain exceptions. This ASU was adopted during the first quarter of 2014 and did not impact the Company’s Consolidated Financial Statements as the Company does not have any net operating loss carryforward deferred tax assets that are eligible to be reduced by an unrecognized tax benefit as required by the ASU.
Acquisitions
ACQUISITIONS
2.
 
ACQUISITIONS
    
Centro de Construcción de Cardioestimuladores del Uruguay

On August 12, 2014 the Company purchased all of the outstanding common stock of Centro de Construcción de Cardioestimuladores del Uruguay (“CCC”), headquartered in Montevideo, Uruguay. CCC is an active implantable neuromodulation medical device systems developer and manufacturer that produces a range of medical devices including implantable pulse generators, programmer systems, battery chargers, patient wands and leads. This acquisition allows the Company to more broadly partner with medical device companies, complements the Company’s core discrete technology offerings and enhances the Company’s medical device innovation efforts.

This transaction was accounted for under the acquisition method of accounting. Accordingly, the operating results of CCC have been included in the Company’s QiG segment from the date of acquisition. For 2014, CCC added approximately $5.8 million to the Company’s revenue and increased the Company’s net income by $1.2 million. The aggregate purchase price of $19.8 million was funded with cash on hand.

The cost of the acquisition was preliminarily allocated to the assets acquired and liabilities assumed from CCC based on their fair values as of the closing date of the acquisition, with the amount exceeding the fair value of the net assets acquired 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 2015. 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 CCC purchase price to the assets acquired and liabilities assumed as of the acquisition date (in thousands):
Assets acquired
 
Current assets
$
10,670

Property, plant and equipment
1,131

Amortizing intangible assets
6,100

Goodwill
8,296

Total assets acquired
26,197

Liabilities assumed
 
Current liabilities
4,842

Deferred income taxes
1,590

Total liabilities assumed
6,432

Net assets acquired
$
19,765



The preliminary fair values of the assets acquired were determined using one of three valuation approaches: market, income or 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, technology 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, excluding inventory, was assumed to approximate their carrying value as of the acquisition date due to the short-term nature of these assets and liabilities.

The fair value of in-process and finished goods inventory acquired was estimated by applying a version of the market approach called the comparable sales method. This approach estimates the fair value of the assets by calculating the potential revenue generated from selling the inventory and subtracting from it the costs related to the completion and sale of that inventory and a reasonable profit allowance. Based upon this methodology, the Company recorded the inventory acquired at fair value resulting in an increase in inventory of $0.3 million.

Intangible assets – The purchase price was allocated to intangible assets as follows (dollars in thousands):
Amortizing Intangible Assets
 
Fair
Value
Assigned
 
Weighted
Average
Amortization
Period (Years)
 
Weighted
Average
Discount
Rate
 
 
 
 
 
 
 
Technology
 
$
1,400

 
10
 
18%
Customer lists
 
4,600

 
10
 
18%
Trademarks and tradenames
 
100

 
2
 
18%
 
 
$
6,100

 
10
 
18%

Technology – Technology consists of technical processes, unpatented technology, manufacturing know-how, trade secrets and the understanding with respect to products or processes that have been developed by CCC and that will be leveraged in current and future products. The fair value of technology acquired was determined utilizing the relief from royalty method, a form of the income approach, with a royalty rate of 3%. The weighted average amortization period of the technology is based upon management’s estimate of the product life cycle associated with technology before they will be replaced by new technologies.

Customer lists – Customer lists represent the estimated fair value of non-contractual customer relationships CCC has as of the acquisition date. The primary customers of CCC include medical device companies in various geographic locations around the world. These relationships were valued separately from goodwill at the amount that 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 weighted average amortization period of the existing customer base was based upon the historical customer annual attrition rate of 15%, as well as management’s understanding of the industry and product life cycles.

Trademarks and tradenames – Trademarks and tradenames represent the estimated fair value of corporate and product names acquired from CCC. These tradenames were valued separately from goodwill at the amount that an independent third party would be willing to pay for use of these names. The fair value of the trademarks and tradenames was determined by utilizing the relief from royalty method, a form of the income approach, with a 0.5% royalty rate.

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 CCC’s highly trained assembled work force and management team; the incremental value that CCC’s technology will bring to QiG’s medical devices; 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 CCC acquisition was allocated to the QiG business segment and is not deductible for tax purposes.

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 QiG segment from the date of acquisition. For 2012, NeuroNexus added approximately $2.5 million to the Company’s revenue and decreased the Company’s net loss 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 were 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 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 valuation of the assets acquired and liabilities assumed from NeuroNexus was finalized during 2013 and did not result in a material adjustment to the original valuation of net assets acquired, including goodwill and therefore was not reflected as a retrospective adjustment of the historical financial statements.
The following table summarizes the 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
8,924

Other assets
1,576

Total assets acquired
14,620

Liabilities assumed
 
Current liabilities
420

Deferred income taxes
989

Total liabilities assumed
1,409

Net assets acquired
$
13,211


The 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.
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 identifiable intangible assets as follows (dollars in thousands):
 
 
Fair
Value
Assigned
 
Weighted
Average
Amortization
Period (Years)
 
Estimated
Useful
Life (Years)
 
Weighted
Average
Discount
Rate
Amortizing Intangible Assets
 
 
 
 
 
 
 
Technology and patents
$
1,058

 
6
 
10
 
14
%
Customer lists
1,869

 
7
 
15
 
13
%
 
$
2,927

 
7
 
13
 
13
%
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 list was based upon historical customer attrition as well as management’s understanding of the industry and product life cycles.
IPR&D – IPR&D represents research projects which are expected to generate cash flows but have not yet reached technological feasibility. 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. For purposes of valuing the IPR&D, the Company estimated total costs to complete the projects to be approximately $1.5 million.
 
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 QiG business segment and is not deductible for tax purposes.
Pro Forma Results (Unaudited) – The following unaudited pro forma information presents the consolidated results of operations of the Company, CCC, and NeuroNexus as if those acquisitions occurred as of the beginning of fiscal years 2013 (CCC) and 2011 (NeuroNexus) (in thousands, except per share amounts): 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Sales
$
696,357

 
$
677,657

 
$
646,617

Net income (loss)
56,453

 
37,612

 
(4,973
)
Earnings (loss) per share:
 
 
 
 
 
Basic
$
2.27

 
$
1.57

 
$
(0.21
)
Diluted
$
2.17

 
$
1.49

 
$
(0.21
)

The unaudited pro forma information presents the combined operating results of Greatbatch, CCC, and NeuroNexus, with the results prior to the acquisition date adjusted to include the pro forma impact of the amortization of acquired intangible assets, the adjustment to interest expense reflecting the amount borrowed in connection with the 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 (loss) 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 costs savings may result from the acquisition; however, there can be no assurance that these cost savings will be achieved. These pro forma results do not purport to be indicative of the results that would have been obtained, 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

 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
(in thousands)
 
 
 
 
 
Noncash investing and financing activities:
 
 
 
 
 
Common stock contributed to 401(k) Plan
$
4,341

 
$
2,477

 
$
4,793

Property, plant and equipment purchases included in accounts payable
2,926

 
2,103

 
2,522

Cash paid during the year for:
 
 
 
 
 
Interest
3,521

 
4,989

 
6,230

Income taxes
13,565

 
44,165

 
4,909

Acquisition of noncash assets
22,434

 
—

 
14,396

Liabilities assumed
6,432

 
—

 
1,244

Inventories
INVENTORIES
4.
 
INVENTORIES
Inventories are comprised of the following (in thousands):
 
 
At
 
January 2,
2015
 
January 3,
2014
Raw materials
$
73,354

 
$
67,939

Work-in-process
38,930

 
36,670

Finished goods
16,958

 
13,749

Total
$
129,242

 
$
118,358

 
 
 
 
Assets Held For Sale
ASSETS HELD FOR SALE
5.
 
ASSETS HELD FOR SALE
Assets held for sale included in Prepaid Expenses and Other Current Assets, is comprised of the following (in thousands):
 
 
 
 
At
Asset
 
Business
Segment
 
January 2,
2015
 
January 3,
2014
Building and building improvements
 
Greatbatch Medical
 
$
1,635

 
$
—


During 2014, the Company transferred $2.1 million of assets relating to the Company’s Orvin, Switzerland property to held for sale and recognized a $0.4 million impairment charge that was recorded in Other Operating Expenses, Net. See Note 13 “Other Operating Expenses, Net,” for additional information regarding this transaction and Note 18 “Fair Value Measurements,” for information regarding the fair value of the assets.
Property, Plant and Equipment, Net
PROPERTY, PLANT AND EQUIPMENT, NET
6.
 
PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment are comprised of the following (in thousands):
 
 
At
 
January 2,
2015
 
January 3,
2014
Manufacturing machinery and equipment
$
167,173

 
$
159,542

Buildings and building improvements
89,258

 
87,359

Information technology hardware and software
31,725

 
28,010

Leasehold improvements
31,170

 
31,522

Furniture and fixtures
14,045

 
13,889

Land and land improvements
10,816

 
13,016

Construction work in process
14,129

 
7,886

Other
629

 
633

 
358,945

 
341,857

Accumulated depreciation
(214,020
)
 
(196,084
)
Total
$
144,925

 
$
145,773



Depreciation expense for property, plant and equipment was as follows (in thousands):
 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Depreciation expense
$
23,320

 
$
22,799

 
$
31,575



Construction work in process at January 2, 2015 primarily relates to the Company’s 2014 investment in capacity and capabilities initiative. See Note 13 “Other Operating Expenses, Net” for a description of the Company’s significant capital investment projects. Construction work in process at January 3, 2014 primarily relates to routine purchases of machinery, equipment, and information technology assets to support normal recurring operations.
Intangible Assets
INTANGIBLE ASSETS
7.
 
INTANGIBLE ASSETS

Amortizing intangible assets, net are comprised of the following (in thousands):
 
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Foreign
Currency
Translation
 
Net
Carrying
Amount
At January 2, 2015
 
 
 
 
 
 
 
Purchased technology and patents
$
95,776

 
$
(75,894
)
 
$
1,966

 
$
21,848

Customer lists
72,857

 
(31,460
)
 
1,374

 
42,771

Other
4,534

 
(4,619
)
 
803

 
718

Total amortizing intangible assets
$
173,167

 
$
(111,973
)
 
$
4,143

 
$
65,337

At January 3, 2014
 
 
 
 
 
 
 
Purchased technology and patents
$
97,376

 
$
(69,026
)
 
$
1,980

 
$
30,330

Customer lists
68,257

 
(24,671
)
 
1,367

 
44,953

Other
4,434

 
(4,399
)
 
804

 
839

Total amortizing intangible assets
$
170,067

 
$
(98,096
)
 
$
4,151

 
$
76,122


Aggregate intangible asset amortization expense is comprised of the following (in thousands):
 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Cost of sales
$
6,201

 
$
6,822

 
$
7,489

SG&A
7,009

 
5,800

 
6,227

RD&E
667

 
545

 
545

Total intangible asset amortization expense
$
13,877

 
$
13,167

 
$
14,261



Estimated future intangible asset amortization expense based upon the current carrying value is as follows (in thousands):
 
 
Estimated
Amortization
Expense
2015
$
12,988

2016
10,676

2017
9,520

2018
7,232

2019
5,431

Thereafter
19,490

Total estimated amortization expense
$
65,337



As of January 3, 2014, the Company had recorded in Other Long-Term Liabilities $4.0 million of contingent liabilities incurred in connection with technology purchases made in previous years. During 2014, the Company reversed $3.0 million of these contingent liabilities as a result of certain performance targets not being achieved, which reduced the technology asset recorded at the time of the asset purchase.
The change in indefinite-lived assets during 2014 is as follows (in thousands)  
 
Trademarks
and
Tradenames
At January 3, 2014
$
20,288

At January 2, 2015
$
20,288


The change in goodwill during 2014 is as follows (in thousands):
 
 
Greatbatch
Medical
 
QiG
 
Total
At January 3, 2014
$
304,856

 
$
41,800

 
$
346,656

Goodwill acquired (Note 2)
—

 
8,296

 
8,296

Foreign currency translation
(559
)
 
—

 
(559
)
At January 2, 2015
$
304,297

 
$
50,096

 
$
354,393


As of January 2, 2015, no accumulated impairment loss has been recognized for the goodwill allocated to the Company’s Greatbatch Medical or QiG segments.
Accrued Expenses
ACCRUED EXPENSES
8.
 
ACCRUED EXPENSES

Accrued expenses are comprised of the following (in thousands):
 
 
At
 
January 2,
2015
 
January 3,
2014
Salaries and benefits
$
20,770

 
$
16,311

Profit sharing and bonuses
18,524

 
19,808

Warranty
660

 
1,819

Other
8,430

 
6,743

Total
$
48,384

 
$
44,681

Debt
DEBT
9.
 
DEBT

Long-term debt is comprised of the following (in thousands):
 
At
 
January 2,
2015
 
January 3, 2014
Variable rate term loan
$
187,500

 
$
197,500

Revolving line of credit
—

 
—

Total debt
187,500

 
197,500

Less current portion of long-term debt
11,250

 
—

Total long-term debt
$
176,250

 
$
197,500


Credit Facility – In September 2013, the Company amended and extended its credit facility (the “Credit Facility”). The Credit Facility provides a $300 million revolving credit facility (the “Revolving Credit Facility”), a $200 million term loan (the “Term Loan”), a $15 million letter of credit subfacility, and a $15 million swingline subfacility. The Revolving Credit Facility can be increased by $200 million upon the Company’s request and approval by the lenders. The Revolving Credit Facility has a maturity date of September 20, 2018, which may be extended to September 20, 2019 upon notice by the Company and subject to certain conditions. The principal of the Term Loan is payable in quarterly installments as specified in the Credit Facility until its maturity date of September 20, 2019 when the unpaid balance is due in full.
The Credit Facility is secured by the Company’s non-realty assets including cash, accounts receivable and inventories. Interest rates on the Revolving Credit Facility and Term Loan are, at the Company’s option either at: (i) the prime rate plus the applicable margin, which ranges between 0.0% and 0.75%, based on the Company’s total leverage ratio or (ii) the applicable LIBOR rate plus the applicable margin, which ranges between 1.375% and 2.75%, 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 0.75%, 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 $300 million: 1) permitted acquisitions in the aggregate not to exceed $250 million; 2) other investments in the aggregate not to exceed $100 million; 3) stock repurchases and dividends not to exceed $150 million in the aggregate; and 4) investments in foreign subsidiaries not to exceed $20 million in the aggregate. 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 January 2, 2015, the Company had available to it 100% of the above limits except for the aggregate limit, acquisitions limit, and other investments limit which are now $277 million, $230 million, and $97 million, respectively.
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 4.5 to 1.0 decreasing to not greater than 4.25 to 1.0 after January 2, 2016. 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 January 2, 2015, the Company was in compliance with all covenants under the Credit Facility.
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.
As of January 2, 2015, the weighted average interest rate on borrowings under the Credit Facility, which does not take into account the impact of the Company’s interest rate swap, was 1.57%. As of January 2, 2015, the Company had $300 million of borrowing capacity available under the Credit Facility. This borrowing capacity may vary from period to period based upon the debt and EBITDA levels of the Company, which impacts the covenant calculations described above.
Interest Rate Swaps – From time to time, the Company enters into interest rate swap agreements in order to hedge against potential changes in cash flows on the outstanding borrowings on the Credit Facility. The variable rate received on the interest rate swaps and the variable rate paid on the debt have the same rate of interest, excluding the credit spread, indexed to the one-month LIBOR rate and reset and pay interest on the same date. During 2012, the Company entered into a three-year $150 million interest rate swap, which amortizes $50 million per year. During 2014, the Company entered into an additional interest rate swap. The first $45 million of notional amount of the swap is effective February 20, 2015 and the second $45 million of notional amount is effective February 22, 2016. The notional amount of the swap amortizes $10 million per year beginning on February 21, 2017 with the remaining settled on the termination date of the swap agreement on September 20, 2019. These swaps are being accounted for as cash flow hedges.
Information regarding the Company’s outstanding interest rate swaps as of January 2, 2015 is as follows (dollars in thousands):
Instrument
 
Type of
Hedge
 
Notional
Amount
 
Start
Date
 
End
Date
 
Pay
Fixed
Rate
 
Current
Receive
Floating
Rate
 
Fair
Value
January 2, 2015
 
Balance
Sheet Location
Interest rate swap
 
Cash flow
 
$
100,000

 
Feb-13
 
Feb-16
 
0.573
%
 
0.155
%
 
$
(125
)
 
Other Long-Term Liabilities
Interest rate swap
 
Cash flow
 
$
90,000

 
Feb-15
 
Sept-19
 
1.921
%
 
N/A
 
$
(865
)
 
Other Long-Term Liabilities

The estimated fair value of the interest rate swap agreements represents the amount the Company expects to receive (pay) to terminate the contract. No portion of the change in fair value of the Company’s interest rate swaps during 2014, 2013, or 2012 was considered ineffective. The amount recorded as Interest Expense during 2014, 2013, and 2012 related to the Company’s interest rate swaps was $0.5 million, $0.5 million and $0.0 million, respectively.
 
The expected future minimum principal payments under the Credit Facility as of January 2, 2015 are as follows (in thousands):
2015
$
11,250

2016
16,250

2017
20,000

2018
20,000

2019
120,000

Total
187,500



Convertible Subordinated Notes – In March 2007, the Company issued $197.8 million of CSN at a 5% discount. CSN accrued interest at 2.25% per annum. The effective interest rate of CSN, which took into consideration the amortization of the discount and deferred fees related to the issuance of these notes, was 8.5%. On February 20, 2013, the Company redeemed all outstanding CSN. The contractual interest and discount amortization for CSN were as follows (in thousands):
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Contractual interest
$
—

 
$
634

 
$
4,450

Discount amortization
—

 
5,368

 
11,464


Deferred Financing Fees - The change in deferred financing fees is as follows (in thousands):
At December 28, 2012
$
2,056

Financing costs deferred
2,802

Write-off during the period
(156
)
Amortization during the period
(842
)
At January 3, 2014
3,860

Amortization during the period
(773
)
At January 2, 2015
$
3,087

Benefit Plans
BENEFIT PLANS
10.
 
BENEFIT PLANS

Savings Plan – The Company sponsors a defined contribution 401(k) plan, for its U.S. based employees. The plan provides for the deferral of employee compensation under Section 401(k) and a discretionary Company match. In 2014, 2013, and 2012, this match was 35% per dollar of participant deferral, up to 6% of the total compensation for each participant. Net costs related to this defined contribution plan were $2.2 million in 2014 and $2.0 million in 2013 and 2012.
In addition to the above, under the terms of the 401(k) plan document there is an annual discretionary defined contribution of up to 4% of each employee’s eligible compensation based upon the achievement of certain performance targets. This amount is contributed to the 401(k) plan in the form of Company stock. Compensation cost recognized related to the defined contribution plan was $4.2 million, $4.8 million, $1.9 million in 2014, 2013, and 2012, respectively. As of January 2, 2015, the 401(k) Plan held 602,604 shares of Company stock.
Education Assistance Program – The Company reimburses tuition, textbooks and laboratory fees for college or other job related programs for all of its U.S. based employees. The Company also reimburses college tuition for the dependent children of certain full-time U.S. based employees hired prior to 2012, which vests on a straight-line basis over ten years, up to the applicable local state university tuition rate. For certain employees and executives, the dependent children benefit is not limited. Minimum academic achievement is required in order to receive reimbursement under both programs. Aggregate expenses under the programs were $1.9 million, $2.0 million, and $2.2 million in 2014, 2013 and 2012, respectively.

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 pension plan provided to the Company’s employees located in Switzerland is a funded contributory plan, while the plans that provide benefits to the Company’s employees located in Mexico 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.
During 2012, the Company transferred most major functions performed at its facilities in Switzerland into other existing facilities. As a result, the Company curtailed its defined benefit plan provided to employees at those Swiss facilities during 2012. In accordance with ASC 715, this gain was recognized in Other Operating Expenses, Net as the related employees were terminated. Since Swiss plan assets were sufficient to cover all plan liabilities, during 2012 the plan assets were transferred into cash. During 2013, the plan assets that remained after settlement payments were made were transferred to an AA- rated insurance carrier who bears the pension risk and longevity risk, and will be used to cover the pension liability for the remaining retirees of the Swiss plan, as well as the remaining employees at that location.
Information relating to the funding position of the Company’s defined benefit plans as of the plans measurement date of January 2, 2015 and January 3, 2014 were as follows (in thousands):
 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
Change in projected benefit obligation:
 
 
 
Projected benefit obligation at beginning of year
$
2,422

 
$
16,215

Service cost
203

 
236

Interest cost
75

 
138

Prior service cost and plan amendments
—

 
(45
)
Plan participants’ contribution
36

 
134

Actuarial (gain) loss
630

 
(2
)
Benefits transferred in, net
155

 
434

Settlement/curtailment gain
(337
)
 
(14,539
)
Foreign currency translation
(341
)
 
(149
)
Projected benefit obligation at end of year
2,843

 
2,422

Change in fair value of plan assets:
 
 
 
Fair value of plan assets at beginning of year
731

 
12,269

Employer contributions (refund)
(39
)
 
150

Plan participants’ contributions
36

 
134

Actual loss on plan assets
(101
)
 
(26
)
Benefits transferred in, net
198

 
138

Settlements
(337
)
 
(11,780
)
Foreign currency translation
(51
)
 
(154
)
Fair value of plan assets at end of year
437

 
731

Projected benefit obligation in excess of plan assets at end of year
$
2,406

 
$
1,691

Defined benefit liability classified as other current liabilities
$
25

 
$
25

Defined benefit liability classified as long-term liabilities
$
2,381

 
$
1,666

Accumulated benefit obligation at end of year
$
1,938

 
$
1,684


 Amounts recognized in Accumulated Other Comprehensive Income are as follows (in thousands):
 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
Net loss occurring during the year
$
736

 
$
25

Amortization of losses
(138
)
 
(722
)
Prior service cost
(2
)
 
150

Amortization of prior service cost
(11
)
 
33

Foreign currency translation
(76
)
 
224

Pre-tax adjustment
509

 
(290
)
Taxes
(135
)
 
18

Net (gain) loss
$
374

 
$
(272
)

The amortization of amounts in Accumulated Other Comprehensive Income expected to be recognized as components of net periodic benefit expense during 2015 are as follows (in thousands):
Amortization of net prior service cost
$
11

Amortization of net loss
45


Net pension cost (income) is comprised of the following (in thousands):
 
 
Year Ended
 
January 2, 2015
 
January 3, 2014
Service cost
$
203

 
$
236

Interest cost
75

 
138

Settlements loss
105

 
—

Expected return on assets
(3
)
 
—

Recognized net actuarial loss (gain)
45

 
(1,929
)
Net pension cost (income)
$
425

 
$
(1,555
)

The weighted-average rates used in the actuarial valuations were as follows:
 
 
Projected Benefit Obligation
 
Net Pension Cost
 
January 2,
2015
 
January 3,
2014
 
2014
 
2013
 
2012
Discount rate
2.3
%
 
3.4
%
 
3.4
%
 
2.1
%
 
2.5
%
Salary growth
3.0
%
 
3.1
%
 
3.1
%
 
2.4
%
 
2.3
%
Expected rate of return on assets
2.3
%
 
2.5
%
 
2.5
%
 
—
%
 
3.5
%

The discount rate used is based on the yields of AA bonds with a duration matching the duration of the liabilities plus approximately 50 basis points to reflect the risk of investing in corporate bonds. The expected rate of return on plan assets reflects earnings expectations on existing plan assets.
Plan assets were comprised of the following (in thousands):
 
 
 
 
Fair Value Measurements Using
 
January 2, 2015
 
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Insurance contract
$
437

 
$
—

 
$
437

 
$
—

Total
$
437

 
$
—

 
$
437

 
$
—

 
 
 
 
Fair Value Measurements Using
 
January 3,
2014
 
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Insurance contract
$
731

 
$
—

 
$
731

 
$
—

Total
$
731

 
$
—

 
$
731

 
$
—



The fair value of Level 2 plan assets are obtained from quoted market prices in inactive markets or valuation models with observable market data inputs to estimate fair value. These observable market data inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data. 
Estimated benefit payments over the next ten years are as follows (in thousands):
 
2015
$
47

2016
67

2017
124

2018
113

2019
177

2020-2024
866

Stock-Based Compensation
STOCK-BASED COMPENSATION
11.
 
STOCK-BASED COMPENSATION

The components and classification of stock-based compensation expense were as follows (in thousands): 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Stock options
$
2,523

 
$
3,490

 
$
2,786

Restricted stock and units
6,417

 
5,843

 
6,233

401(k) stock contribution
4,246

 
4,768

 
1,885

Total stock-based compensation expense
$
13,186

 
$
14,101

 
$
10,904

 
 
 
 
 
 
Cost of sales
$
3,530

 
$
3,864

 
$
2,620

Selling, general and administrative expenses
7,923

 
7,907

 
7,684

Research, development and engineering costs, net
1,440

 
1,194

 
600

Other operating expenses, net (Note 13)
293

 
1,136

 
—

Total stock-based compensation expense
$
13,186

 
$
14,101

 
$
10,904


During 2014 and 2013, the Company recorded within Other Operating Expenses, Net stock modification expense related to employee separation costs incurred during 2014 and 2013 in connection with realignment initiatives, which are discussed in Note 13 “Other Operating Expenses, Net.”
Summary of Plans
The Company’s 1998 Stock Option Plan and Non-Employee Directors Stock Plan have been frozen to any new award issuances. Stock options remain outstanding under these plans.
The Company’s 2005 Stock Incentive Plan (“2005 Plan”), as amended, authorizes the issuance of up to 2,450,000 shares of equity incentive awards including nonqualified and incentive stock options, restricted stock, restricted stock units, stock bonuses and stock appreciation rights subject to the terms of the 2005 Plan. The 2005 Plan limits the amount of restricted stock, restricted stock units and stock bonuses that may be awarded in the aggregate to 850,000 shares of the 2,450,000 shares authorized by the 2005 Plan.
The Company’s 2009 Stock Incentive Plan (“2009 Plan”) authorizes the issuance of up to 1,350,000 shares of equity incentive awards including nonqualified and incentive stock options, restricted stock, restricted stock units, stock bonuses and stock appreciation rights subject to the terms of the 2009 Plan. The 2009 Plan limits the amount of restricted stock, restricted stock units and stock bonuses that may be awarded in the aggregate to 200,000 shares of the 1,350,000 shares authorized.
The Company’s 2011 Stock Incentive Plan (“2011 Plan”), as amended, authorizes the issuance of up to 1,350,000 shares of equity incentive awards including nonqualified and incentive stock options, restricted stock, restricted stock units, stock bonuses and stock appreciation rights, subject to the terms of the 2011 Plan. The 2011 Plan does not limit the amount of restricted stock, restricted stock units or stock bonuses that may be awarded.
As of January 2, 2015, there were 575,451, 316,695, and 16,799 shares available for future grants under the 2011 Plan, 2009 Plan and 2005 Plan, respectively. Due to plan sub-limits, of the shares available for grant, only 26,594 shares and 3,625 shares may be awarded under the 2009 Plan and the 2005 Plan, respectively, in the form of restricted stock, restricted stock units or stock bonuses.
Stock Options
Stock options granted generally vest over a three year period, expire 10 years from the date of grant, and are granted at exercise prices equal to or greater than the fair value of the Company’s common stock on the date of grant. Performance-based stock options have not been granted since 2010.
The Company utilizes the Black-Scholes option pricing model to determine the fair value of stock options. Management is required to make certain assumptions with respect to selected model inputs. Expected volatility is based on the historical volatility of the Company’s stock over the most recent period commensurate with the estimated expected life of the stock options. The expected life of stock options, which represents the period of time that the stock options are expected to be outstanding, is based on historical data. The expected dividend yield is based on the Company’s history and expectation of future dividend payouts. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for a period commensurate with the estimated expected life. If factors change and result in different assumptions, the stock option expense that the Company records for future grants may differ significantly from what the Company recorded in the current period. Stock-based compensation expense is only recorded for those awards that are expected to vest. Pre-vesting forfeiture estimates for determining appropriate stock-based compensation expense are estimated at the time of grant based on historical experience. Revisions are made to those estimates in subsequent periods if actual forfeitures differ from estimated forfeitures.
The weighted-average fair value and assumptions used are as follows:
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Weighted average grant date fair value
$
16.43

 
$
8.38

 
$
8.20

Risk-free interest rate
1.73
%
 
0.73
%
 
0.83
%
Expected volatility
39
%
 
39
%
 
40
%
Expected life (in years)
5.3

 
5.3

 
5.3

Expected dividend yield
0
%
 
0
%
 
0
%
Annual prevesting forfeiture rate
9
%
 
9
%
 
9
%

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 at December 30, 2011
1,558,771

 
$
23.42

 
 
 
 
Granted
395,978

 
22.19

 
 
 
 
Exercised
(52,683
)
 
20.77

 
 
 
 
Forfeited or expired
(126,219
)
 
24.21

 
 
 
 
Outstanding at December 28, 2012
1,775,847

 
23.17

 
 
 
 
Granted
372,676

 
23.33

 
 
 
 
Exercised
(443,428
)
 
23.24

 
 
 
 
Forfeited or expired
(88,686
)
 
28.05

 
 
 
 
Outstanding at January 3, 2014
1,616,409

 
22.92

 
 
 
 
Granted
183,571

 
43.84

 
 
 
 
Exercised
(295,203
)
 
23.42

 
 
 
 
Forfeited or expired
(33,279
)
 
27.82

 
 
 
 
Outstanding at January 2, 2015
1,471,498

 
$
25.32

 
6.1
 
$
34.3

Expected to vest at January 2, 2015
1,447,519

 
$
25.10

 
6.1
 
$
34.1

Exercisable at January 2, 2015
1,278,765

 
$
23.88

 
5.8
 
$
31.7


 

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 at December 30, 2011
478,364

 
$
24.44

 
 
 
 
Exercised
(7,657
)
 
22.04

 
 
 
 
Forfeited or expired
(185,782
)
 
26.35

 
 
 
 
Outstanding at December 28, 2012
284,925

 
23.26

 
 
 
 
Exercised
(107,664
)
 
23.23

 
 
 
 
Forfeited or expired
—

 
—

 
 
 
 
Outstanding at January 3, 2014
177,261

 
23.27

 
 
 
 
Exercised
(58,422
)
 
23.35

 
 
 
 
Forfeited or expired
—

 
—

 
 
 
 
Outstanding at January 2, 2015
118,839

 
$
23.24

 
3.0
 
$
3.0

Expected to vest at January 2, 2015
118,839

 
$
23.24

 
3.0
 
$
3.0

Exercisable at January 2, 2015
118,839

 
$
23.24

 
3.0
 
$
3.0


Intrinsic value is calculated for in-the-money options (exercise price less than market price) as the difference between the market price of the Company’s common shares as of January 2, 2015 ($48.66) and the weighted average exercise price of the underlying stock options, multiplied by the number of options outstanding and/or exercisable. As of January 2, 2015, $2.1 million of unrecognized compensation cost related to non-vested stock options is expected to be recognized over a weighted-average period of approximately 2 years. Shares are distributed from the Company’s authorized but unissued reserve upon the exercise of stock options or treasury stock if available. The Company does not intend to purchase treasury shares to fund the future exercises of stock options.
Proceeds from the exercise of stock options are credited to common stock at par value and the excess is credited to additional paid-in capital. A portion of the options outstanding qualify as incentive stock options (“ISO”) for income tax purposes. As such, a tax benefit is not recorded at the time the compensation cost related to the stock options is recorded for book purposes due to the fact that an ISO does not ordinarily result in a tax benefit unless there is a disqualifying disposition. Stock option grants of non-qualified stock options result in the creation of a deferred tax asset, which is a temporary difference, until the time that the option is exercised.
The following table provides certain information relating to the exercise of stock options (in thousands):
 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Intrinsic value
$
7,997

 
$
6,807

 
$
148

Cash received
8,278

 
12,807

 
1,263

Tax benefit (expense) realized
1,704

 
727

 
(132
)

Restricted Stock and Restricted Stock Units
Time-vested restricted stock and restricted stock unit awards granted typically vest in equal annual installments over a three or four year period. The fair value of time-based as well as nonmarket-based performance restricted stock and restricted stock unit awards is equal to the fair value of the Company’s stock on the date of grant. The following table summarizes time-vested restricted stock and unit activity:
 
Time-Vested
Activity
 
Weighted
Average
Fair Value
Nonvested at December 30, 2011
69,942

 
$
22.69

Granted
92,265

 
23.49

Vested
(74,901
)
 
22.83

Forfeited
(7,037
)
 
22.56

Nonvested at December 28, 2012
80,269

 
23.48

Granted
67,230

 
26.76

Vested
(74,062
)
 
23.93

Forfeited
(5,862
)
 
22.26

Nonvested at January 3, 2014
67,575

 
26.37

Granted
63,817

 
44.78

Vested
(53,568
)
 
34.16

Forfeited
(9,992
)
 
35.30

Nonvested at January 2, 2015
67,832

 
$
36.22



Performance-based restricted stock units granted only vest if certain market-based performance metrics are achieved. The amount of shares that ultimately vest range from 0 shares to 716,163 shares based upon the total shareholder return of the Company relative to the Company’s compensation peer group over a three year performance period beginning in the year of grant. The fair value of the restricted stock units was determined by utilizing a Monte Carlo simulation model, which projects the value of Greatbatch stock versus the peer group under numerous scenarios and determines the value of the award based upon the present value of these projected outcomes. The following table summarizes performance-vested restricted stock and stock unit activity related to the Company’s plans: 
 
Performance-
Vested
Activity
 
Weighted
Average
Fair Value
Nonvested at December 30, 2011
529,743

 
$
16.68

Granted
332,918

 
15.30

Vested
(15,500
)
 
24.64

Forfeited
(64,715
)
 
15.72

Nonvested at December 28, 2012
782,446

 
16.02

Granted
318,169

 
15.86

Vested
(49,139
)
 
14.68

Forfeited
(271,798
)
 
14.94

Nonvested at January 3, 2014
779,678

 
16.41

Granted
186,825

 
31.33

Vested
(221,470
)
 
18.51

Forfeited
(28,870
)
 
18.42

Nonvested at January 2, 2015
716,163

 
$
19.57


The realized tax benefit (expense) from the vesting of restricted stock and restricted stock units was $2.3 million, $(0.4) million and $(0.02) million for 2014, 2013, 2012, respectively. As of January 2, 2015, there was $7.7 million of total unrecognized compensation cost related to the restricted stock and restricted stock unit awards. That cost is expected to be recognized over a weighted-average period of approximately 2 years. The fair value of shares vested in 2014, 2013, 2012 was $12.5 million, $4.0 million and $1.5 million, respectively.
Research, Development and Engineering Costs
RESEARCH, DEVELOPMENT AND ENGINEERING COSTS, NET
12.
 
RESEARCH, DEVELOPMENT AND ENGINEERING COSTS, NET

Research, Development and Engineering Costs, Net are comprised of the following (in thousands):
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Research, development and engineering costs
$
58,974

 
$
62,652

 
$
62,848

Less: cost reimbursements
(9,129
)
 
(8,575
)
 
(10,358
)
Total research, development and engineering costs, net
$
49,845

 
$
54,077

 
$
52,490

 
 
 
 
 
 
Other Operating Expenses, Net
OTHER OPERATING EXPENSES, NET
13.
 
OTHER OPERATING EXPENSES, NET

Other Operating Expenses, Net is comprised of the following (in thousands):
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
2014 investments in capacity and capabilities
$
8,925

 
$
—

 
$
—

2013 operating unit realignment
1,017

 
5,625

 
—

Orthopaedic facilities optimization
1,317

 
8,038

 
32,482

Medical device facility optimization
11

 
312

 
1,525

ERP system upgrade (income) costs
(82
)
 
783

 
5,041

Acquisition and integration (income) costs
3

 
(502
)
 
1,460

Asset dispositions, severance and other
4,106

 
1,534

 
1,838

Total other operating expenses, net
$
15,297

 
$
15,790

 
$
42,346


2014 investments in capacity and capabilities. In 2014, the Company announced several initiatives to invest in capacity and capabilities and to better align its resources to meet its customers’ needs and drive organic growth and profitability. These included the following:
•
Functions currently 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 by the first half of 2016.
•
Functions currently performed at the Company’s facilities in Beaverton, OR and Raynham, MA to manufacture products for the portable medical market will transfer to a new facility in Tijuana, Mexico by the end of 2015. Products currently manufactured at the Beaverton facility, which do not serve the portable medical market, are planned to transfer to the Company’s Raynham facility.
•
Establishing a R&D hub in the Minneapolis/St. Paul, MN area for the Company’s Global R&D QiG - Medical Device Systems team, which will serve as the technical center of expertise for active implantable medical device development, implantable leads design, system level design verification testing, and continuation engineering. As part of this initiative, the design engineering responsibilities previously performed at the Company’s Cleveland, OH facility was transferred to the new R&D hub in 2014.
•
Establishing a commercial operations hub at the Company’s global headquarters in Frisco, Texas. This initiative will build upon the investment the Company has made in its global sales and marketing function and is expected to be completed during the first half of 2015.
The total capital investment expected for these initiatives is between $25.0 million and $27.0 million, of which $4.0 million has been expended to date. Total restructuring charges expected to be incurred in connection with this realignment are between $29.0 million and $34.0 million, of which $8.9 million has been incurred to date. Expenses related to this initiative are recorded within the applicable segment and corporate cost centers that the expenditures relate to and include the following:
•
Severance and retention: $7.0 million - $9.0 million;
•
Accelerated depreciation and asset write-offs: $2.0 million - $3.0 million; and
•
Other: $20.0 million - $22.0 million
Other costs primarily consist of costs to relocate certain equipment and other personnel, duplicate personnel costs, disposal and travel expenditures. All expenses are cash expenditures, except accelerated depreciation and asset write-offs.
The change in accrued liabilities related to the 2014 investments in capacity and capabilities is as follows (in thousands):
 
Severance and Retention
 
Accelerated
Depreciation/
Asset Write-offs
 
Other
 
Total
At January 3, 2014
$
—

 
$
—

 
$
—

 
$
—

Restructuring charges
2,209

 
33

 
6,683

 
8,925

Write-offs
—

 
(33
)
 
—

 
(33
)
Cash payments
(1,046
)
 
—

 
(5,617
)
 
(6,663
)
At January 2, 2015
$
1,163

 
$
—

 
$
1,066

 
$
2,229


2013 operating unit realignment. In 2013, the Company initiated a plan to realign its operating structure in order to optimize its continued focus on profitable growth. As part of this initiative, the sales and marketing and operations groups of its former Implantable Medical and Electrochem reportable segments were combined into one sales and marketing and one operations group serving the entire Company. This initiative was completed during 2014. Total restructuring charges incurred in connection with this realignment were $6.6 million. Expenses related to this initiative were recorded within the applicable segment that the expenditures relate to and included the following:
•
Severance and retention: $5.0 million; and
•
Other: $1.6 million.
Other costs primarily consist of relocation, recruitment and travel expenditures. The change in accrued liabilities related to the 2013 operating unit realignment is as follows (in thousands):
 
Severance and Retention
 
Other
 
Total
At January 3, 2014
$
465

 
$
746

 
$
1,211

Restructuring charges
849

 
168

 
1,017

Cash payments
(1,314
)
 
(914
)
 
(2,228
)
At January 2, 2015
$
—

 
$
—

 
$
—


Orthopaedic facilities 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 of an orthopaedic manufacturing facility in Fort Wayne, IN and transferred manufacturing operations being performed at its Columbia City, IN location into this new facility. This initiative was completed in 2012.
During 2012, the Company transferred manufacturing and development operations performed at its facilities in Orvin and Corgemont, Switzerland into existing facilities in Fort Wayne, IN and Tijuana, Mexico. In connection with this consolidation, the Company curtailed its defined benefit plan provided to its Swiss employees and recognized a $1.9 million pension gain in 2013. See Note 10 “Benefit Plans” for additional information. Also in connection with this consolidation, in 2012, the Company entered into an agreement to sell assets related to certain non-core Swiss orthopaedic product lines to an independent third party. In connection with the transfer of these orthopaedic product lines to held for sale, the Company recognized a $3.6 million impairment charge in 2012 based upon the contractual sales price to the third party. This transaction closed during 2013 upon which the Company received payments totaling $4.7 million and the third party assumed $2.4 million of severance liabilities. The purchase agreement provided the Company with an earn out payment based upon the amount of inventory consumed by the purchaser within one year after the close of the transaction. As a result of this earn out, a gain of $2.7 million was recorded in Other Operating Expenses, Net during 2014. During 2014, the Company transferred $2.1 million of assets relating to the Company’s Orvin, Switzerland property to held for sale and recognized a $0.4 million impairment charge. See Note 5 “Assets Held For Sale” for additional information.
During 2013, the Company began a project to expand its Chaumont, France facility in order to enhance its capabilities and fulfill larger volume customer supply agreements. This initiative is expected to be completed over the next two years.
The total capital investment expected to be incurred for these initiatives is between $30 million and $35 million, of which $24.8 million has been expended to date. Total expense expected to be incurred for these initiatives is between $43 million and $48 million, of which $42.5 million has been incurred to date. All expenses have been and will be recorded within the Greatbatch Medical segment and are expected to include the following:
•Severance and retention: $11 million;
•Accelerated depreciation and asset write-offs: $13 million;
•Other: $19 million - $24 million.
Other costs include production inefficiencies, moving, revalidation, personnel, training and travel costs associated with these consolidation projects. All expenses are cash expenditures, except accelerated depreciation and asset write-offs. The change in accrued liabilities related to the orthopaedic facilities optimizations is as follows (in thousands):
 
Severance
and
Retention
 
Accelerated
Depreciation/
Asset Write-offs
 
Other
 
Total
At January 3, 2014
$
—

 
$
—

 
$
857

 
$
857

Restructuring charges (income), net
—

 
(2,255
)
 
3,572

 
1,317

Write-offs
—

 
(400
)
 
—

 
(400
)
Cash receipts (payments)
—

 
2,655

 
(4,142
)
 
(1,487
)
At January 2, 2015
$
—

 
$
—

 
$
287

 
$
287


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 includes 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 were completed in 2014. Total capital investment under these initiatives was $12.5 million. Total expenses incurred on these projects was $1.8 million. All expenses were recorded within the Greatbatch Medical segment and included the following:
•Production inefficiencies, moving and revalidation: $0.7 million;
•Personnel: $0.6 million; and
•Other: approximately $0.5 million.
The change in accrued liabilities related to the medical device facility optimization is as follows (in thousands):
 
Production
Inefficiencies,
Moving and
Revalidation
 
Personnel
 
Other
 
Total
At January 3, 2014
$
—

 
$
—

 
$
—

 
$
—

Restructuring charges
—

 
1

 
10

 
11

Cash payments
—

 
(1
)
 
(10
)
 
(11
)
At January 2, 2015
$
—

 
$
—

 
$
—

 
$
—



ERP system upgrade (income) costs. In 2011, the Company initiated plans to upgrade its existing global ERP system. This initiative was completed in 2014. Total capital investment expended under this initiative was $4.0 million. Total expenses incurred on this initiative were $5.7 million. Expenses related to this initiative were recorded within the applicable segment and corporate cost centers that the expenditures related to and included the following:
•Training and consulting costs: $3.2 million; and
•Accelerated depreciation and asset write-offs: $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
At January 3, 2014
$
—

 
$
—

 
$
—

Restructuring income
(82
)
 
—

 
(82
)
Cash receipts
82

 
—

 
82

At January 2, 2015
$
—

 
$
—

 
$
—


Acquisition and integration (income) costs. During 2014, 2013, and 2012, the Company incurred costs (income) related to the integration of CCC, NeuroNexus, and Micro Power Electronics, Inc. These expenses were primarily for retention bonuses, travel cost in connection with integration efforts, training, severance, and the change in fair value of the contingent consideration recorded in connection with these acquisitions. See Note 18 “Fair Value Measurements” for additional information on the Company’s contingent consideration, which resulted in a gain of $0.8 million and $0.7 million in 2014, and 2013, respectively.
Asset dispositions, severance and other. During 2014, 2013, and 2012, the Company recorded losses in connection with various asset disposals and/or write-downs. During 2014, the Company incurred $0.9 million of expense related to the separation of the Company’s Senior Vice President, Human Resources. Additionally, during 2014, the Company recorded charges in connection with its business reorganization to align its contract manufacturing operations. Costs incurred primarily related to consulting and IT development and were completed in 2014.
During 2013, Greatbatch Medical recorded a $0.9 million write-off related to its wireless sensing product line and QiG recorded a $0.5 million write-off of IPR&D. See Note 18, “Fair Value Measurements” for additional information.
During 2012, the Company incurred $1.2 million of costs related to the relocation of its global headquarters to Frisco, Texas.
Income Taxes
INCOME TAXES
14.
 
INCOME TAXES

The U.S. and international components of income before provision for income taxes were as follows (in thousands):
 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
U.S.
$
56,801

 
$
42,392

 
$
36,057

International
19,778

 
6,446

 
(29,327
)
Total income before provision for income taxes
$
76,579

 
$
48,838

 
$
6,730



The provision for income taxes was comprised of the following (in thousands):
 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Current:
 
 
 
 
 
Federal
$
16,293

 
$
39,353

 
$
4,747

State
1,299

 
1,604

 
381

International
2,998

 
1,470

 
668

 
20,590

 
42,427

 
5,796

Deferred:
 
 
 
 
 
Federal
1,211

 
(28,678
)
 
6,615

State
(310
)
 
427

 
175

International
(370
)
 
(1,605
)
 
(1,057
)
 
531

 
(29,856
)
 
5,733

Total provision for income taxes
$
21,121

 
$
12,571

 
$
11,529


The provision for income taxes differs from the U.S. statutory rate due to the following:
 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Statutory rate
35.0
 %
 
35.0
 %
 
35.0
 %
Federal tax credits
(2.1
)
 
(7.5
)
 
—

Foreign rate differential
(4.3
)
 
(0.7
)
 
50.7

Uncertain tax positions
0.6

 
1.7

 
(10.1
)
State taxes, net of federal benefit
0.7

 
2.3

 
4.9

Change in tax rate - loss of Swiss tax holiday
—

 
—

 
25.6

Change in foreign tax rates
(0.6
)
 
(3.7
)
 
—

Valuation allowance
(0.4
)
 
0.4

 
67.6

Other
(1.3
)
 
(1.8
)
 
(2.4
)
Effective tax rate
27.6
 %
 
25.7
 %
 
171.3
 %


 
Deferred tax assets (liabilities) consist of the following (in thousands):
 
At
 
January 2,
2015
 
January 3,
2014
Tax credits
$
5,828

 
$
6,624

Net operating loss carryforwards
6,721

 
9,161

Inventories
3,335

 
4,202

Accrued expenses
4,338

 
4,303

Stock-based compensation
9,341

 
9,194

Other
1,659

 
573

Gross deferred tax assets
31,222

 
34,057

Less valuation allowance
(10,709
)
 
(11,661
)
Net deferred tax assets
20,513

 
22,396

Property, plant and equipment
(2,646
)
 
(2,254
)
Intangible assets
(57,850
)
 
(57,648
)
Convertible subordinated notes
(5,006
)
 
(6,178
)
Gross deferred tax liabilities
(65,502
)
 
(66,080
)
Net deferred tax liability
$
(44,989
)
 
$
(43,684
)
Presented as follows:
 
 
 
Current deferred tax asset
$
6,168

 
$
6,008

Current deferred tax liability
(588
)
 
(613
)
Noncurrent deferred tax asset
2,626

 
2,933

Noncurrent deferred tax liability
(53,195
)
 
(52,012
)
Net deferred tax liability
$
(44,989
)
 
$
(43,684
)

As of January 2, 2015, the Company has the following carryforwards available:
Jurisdiction
Tax
Attribute
 
Amount
(in millions)
 
 
Begin to
Expire
International
Net Operating Loss
 
48.0

(1)
 
2015
State
Net Operating Loss
 
37.6

(1)
 
Various
U.S. and State
R&D Tax Credit
 
0.7

(1)
 
Various
State
Investment Tax Credit
 
5.3

 
 
Various
(1) The utilization of certain net operating losses and credits is subject to an annual limitation under Internal Revenue Code Section 382.
Certain federal tax credits reported on filed income tax returns included uncertain tax positions taken in prior years. Due to the application of the accounting for uncertain tax positions, the actual tax attributes are larger than the tax credits for which a deferred tax asset is recognized for financial statement purposes.
In assessing the realizability of deferred tax assets, management considers, within each taxing jurisdiction, whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the consideration of the weight of both positive and negative evidence, management has determined that a portion of the deferred tax assets as of January 2, 2015 and January 3, 2014 related to certain state investment tax credits and net operating losses will not be realized.
The Company files annual income tax returns in the U.S., various state and local jurisdictions, and in various foreign jurisdictions. A number of years may elapse before an uncertain tax position, for which the Company has unrecognized tax benefits, is examined and finally settled. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, the Company believes that its unrecognized tax benefits reflect the most probable outcome. The Company adjusts these unrecognized tax benefits, as well as the related interest, in light of changing facts and circumstances. The resolution of a matter could be recognized as an adjustment to the Provision for Income Taxes and the effective tax rate in the period of resolution.
Below is a summary of changes to the unrecognized tax benefit (in thousands):
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Balance, beginning of year
$
1,858

 
$
970

 
$
1,580

Additions based upon tax positions related to the current year
268

 
325

 
—

Additions related to prior period tax positions
510

 
651

 
210

Reductions relating to settlements with tax authorities
(225
)
 
(88
)
 
(522
)
Reductions as a result of a lapse of applicable statute of limitations
—

 
—

 
(298
)
Balance, end of year
$
2,411

 
$
1,858

 
$
970


The tax years that remain open and subject to tax audits varies depending on the tax jurisdiction. An audit of the consolidated federal 2012 and 2013 tax returns were completed in the first quarter of 2015. It is reasonably possible that a reduction of approximately $1.0 million of the balance of unrecognized tax benefits may occur within the next twelve months as a result of the lapse of the statute of limitations and/or audit settlements. As of January 2, 2015, approximately $2.1 million of unrecognized tax benefits would favorably impact the effective tax rate (net of federal impact on state issues), if recognized.
Commitments And Contingencies
COMMITMENTS AND CONTINGENCIES
15.
 
COMMITMENTS AND CONTINGENCIES

Litigation – On December 21, 2012, the Company and several other unaffiliated parties were named as defendants in a personal injury and wrongful death action filed in the 113th Judicial District Court of Harris County, Texas. The complaint seeks damages alleging marketing and product defects and failure to warn, negligence and gross negligence relating to a product the Company manufactured and sold to a customer, one of the other named defendants. The Company’s customer, in turn, incorporated the Greatbatch product into its own product which it sold to a third party, another named defendant. On December 3, 2014, the District Court granted the Company’s motion for summary judgment and dismissed all claims against the Company. The ruling is subject to appeal by the plaintiffs.
The Company is indemnified by its customer against any loss in this matter, including costs of defense, which obligation is supported by its customer’s product liability insurance coverage in the amount of $5 million. The Company also has its own product liability insurance coverage, subject to a $10 million retention. In January 2015, Greatbatch’s customer reached a tentative, confidential settlement with the plaintiffs which, if approved by the Court, is expected to result in a release of all claims, including appeal rights, against the Company and its customer. The Company has not recorded a reserve in connection with this matter since any potential loss is not probable.
The Company is a party to various other legal actions arising in the normal course of business. While the Company does not expect that the ultimate resolution of any of these pending actions will have a material effect on its consolidated results of operations, financial position, or cash flows, litigation is subject to inherent uncertainties. As such, there can be no assurance that any pending legal action, which the Company currently believes to be immaterial, does not become material in the future.
License agreements – The Company is a party to various license agreements for technology that is utilized in certain of its products. The most significant of these agreements are the licenses for basic technology used in the production of wet tantalum capacitors, filtered feedthroughs and MRI compatible lead systems. Expenses related to license agreements were $3.3 million, $3.5 million and $3.1 million, for 2014, 2013 and 2012, respectively, and are included in Cost of Sales.
Product Warranties – The Company generally warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. The change in product warranty liability was comprised of the following (in thousands):
 
Year Ended
 
January 2,
2015
 
January 3,
2014
Beginning balance
$
1,819

 
$
2,626

Additions to warranty reserve
953

 
1,624

Warranty claims paid
(2,112
)
 
(2,431
)
Ending balance
$
660

 
$
1,819


Operating Leases – The Company is a party to various operating lease agreements for buildings, machinery, equipment and software. The Company primarily leases buildings, which accounts for the majority of the future lease payments. Lease expense includes the effect of escalation clauses and leasehold improvement incentives which are accounted for ratably over the lease term. Operating lease expense was as follows (in thousands):
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Operating lease expense
$
4,281

 
$
4,379

 
$
4,024


Minimum future estimated annual operating lease expenses are as follows (in thousands):
2015
$
5,797

2016
5,952

2017
3,908

2018
3,489

2019
3,418

Thereafter
13,938

Total estimated operating lease expense
$
36,502


Self-Insured Medical Plan – The Company self-funds the medical insurance coverage provided to its U.S. based employees. The Company had specific stop loss coverage per associate for claims incurred during 2014 exceeding $225 thousand per associate with no annual maximum aggregate stop loss coverage. As of January 2, 2015 and January 3, 2014, the Company had $1.8 million and $1.6 million accrued related to the self-insurance of its medical plan, respectively. This accrual is recorded in Accrued Expenses in the Consolidated Balance Sheet, and is primarily based upon claim history. 
Purchase Commitments – 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 its current manufacturing needs and are fulfilled by its 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 January 2, 2015, the total contractual obligation related to such expenditures is approximately $36.4 million and will primarily be financed by existing cash and cash equivalents, cash generated 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.
Foreign Currency Contracts – The Company has entered 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): 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Reduction in Cost of Sales
$
(168
)
 
$
(1,154
)
 
$
(79
)
Ineffective portion of change in fair value
—

 
—

 
—


Information regarding outstanding foreign currency contracts as of January 2, 2015 is as follows (dollars in thousands): 
Instrument
Type of
Hedge
 
Aggregate
Notional
Amount
 
Start
Date
 
End
Date
 
$/Peso
 
Fair
Value
 
Balance Sheet
Location
FX Contract
Cash flow
 
$
16,880

 
Jan-15
 
Dec-15
 
0.0734

 
$
(1,568
)
 
Accrued Expenses

Workers’ Compensation Trust – The Company was a member of a group self-insurance trust that provided workers’ compensation benefits to employees of the Company in Western New York (the “Trust”). Under the Trust agreement, each participating organization has joint and several liability for Trust obligations if the assets of the Trust are not sufficient to cover those obligations. During 2011, the Company was notified by the Trust of its intentions to cease operations at the end of 2011 and was assessed a pro-rata share of future costs related to the Trust. Based on actual experience, the Company could receive a refund or be assessed additional contributions for workers’ compensation claims insured by the Trust. Since 2011, the Company has utilized a traditional insurance provider for workers’ compensation coverage.
Earnings (Loss) Per Share
EARNINGS (LOSS) PER SHARE
16.
 
EARNINGS (LOSS) PER SHARE

The following table illustrates the calculation of Basic and Diluted EPS (in thousands, except per share amounts): 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Numerator for basic EPS:
 
 
 
 
 
Net income (loss)
$
55,458

 
$
36,267

 
$
(4,799
)
Denominator for basic EPS:
 
 
 
 
 
Weighted average shares outstanding
24,825

 
23,991

 
23,584

Effect of dilutive securities:
 
 
 
 
 
Stock options, restricted stock and restricted stock units
1,150

 
1,332

 
—

Denominator for diluted EPS
25,975

 
25,323

 
23,584

Basic EPS
$
2.23

 
$
1.51

 
$
(0.20
)
Diluted EPS
$
2.14

 
$
1.43

 
$
(0.20
)


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:
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Time-vested stock options, restricted stock and restricted stock units
175,549

 
18,480

 
2,142,000

Performance-vested stock options and restricted stock units
—

 
—

 
781,000


For the 2013 and 2012 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
17.
 
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
At January 3, 2014
$
(672
)
 
$
(468
)
 
$
14,952

 
$
13,812

 
$
546

 
$
14,358

Unrealized loss on cash flow hedges
—

 
(2,372
)
 
—

 
(2,372
)
 
829

 
(1,543
)
Realized gain on foreign currency hedges
—

 
(168
)
 
—

 
(168
)
 
59

 
(109
)
Realized loss on interest rate swap hedges
—

 
450

 
—

 
450

 
(157
)
 
293

Net defined benefit plan liability adjustments
(509
)
 
—

 
—

 
(509
)
 
135

 
(374
)
Foreign currency translation loss
—

 
—

 
(3,502
)
 
(3,502
)
 
—

 
(3,502
)
At January 2, 2015
$
(1,181
)
 
$
(2,558
)
 
$
11,450

 
$
7,711

 
$
1,412

 
$
9,123



 
Defined
Benefit
Plan
Liability
 
Cash
Flow
Hedges
 
Foreign
Currency
Translation
Adjustment
 
Total
Pre-Tax
Amount
 
Tax
 
Net-of-Tax
Amount
At December 28, 2012
$
(962
)
 
$
120

 
$
13,431

 
$
12,589

 
$
358

 
$
12,947

Unrealized gain on cash flow hedges
—

 
58

 
—

 
58

 
(20
)
 
38

Realized gain on foreign currency hedges
—

 
(1,154
)
 
—

 
(1,154
)
 
404

 
(750
)
Realized loss on interest rate swap hedges
—

 
508

 
—

 
508

 
(178
)
 
330

Net defined benefit plan liability adjustments
290

 
—

 
—

 
290

 
(18
)
 
272

Foreign currency translation gain
—

 
—

 
1,521

 
1,521

 
—

 
1,521

At January 3, 2014
$
(672
)
 
$
(468
)
 
$
14,952

 
$
13,812

 
$
546

 
$
14,358


The realized (gain) loss relating to the Company’s foreign currency and interest rate swap hedges were reclassified from Accumulated Other Comprehensive Income and included in Cost of Sales and Interest Expense, respectively, in the Consolidated Statements of Operations. See Note 10 “Benefit Plans” for details on the change in defined benefit plan liability adjustments.
Fair Value Measurements
FAIR VALUE MEASUREMENTS
18.
 
FAIR VALUE MEASUREMENTS
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Fair value measurement standards apply to certain financial assets and liabilities that are measured at fair value on a recurring basis (each reporting period). For the Company, these financial assets and liabilities include its derivative instruments 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 received fair value estimates from the foreign currency contract counterparty to verify the reasonableness of the Company’s estimates. The Company’s foreign currency contracts are categorized in Level 2 of the fair value hierarchy. The fair value of the Company’s foreign currency contracts will be realized as Cost of Sales as the inventory, which the contracts are hedging the cash flows to produce, is sold, of which approximately $1.6 million is expected to be realized within the next twelve months.
Interest rate swaps – The fair value of the Company’s interest rate swaps outstanding at January 2, 2015 was determined through the use of a cash flow model that utilizes observable market data inputs. These observable market data inputs include LIBOR, swap rates, and credit spread curves. In addition to the above, the Company received a fair value estimate from the interest rate swap counterparty to verify the reasonableness of the Company’s estimate. This fair value calculation was categorized in Level 2 of the fair value hierarchy.  
Accrued contingent consideration – 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, the probability weighted contingent payments expected to be made utilizing a risk adjusted discount rate. During the first quarter of 2014, the financial milestone expired unachieved and as a result, was determined to have a fair value of zero. During the fourth quarter of 2014, the Company determined that the development milestone will expire unachieved, and as a result, was determined to have a fair value of zero. Changes in the fair value of accrued contingent consideration were recorded in Other Operating Expenses, Net. 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): 
At December 28, 2012
$
1,530

Fair value adjustments
(690
)
At January 3, 2014
840

Fair value adjustments
(840
)
At January 2, 2015
$
—


The following tables provide information regarding assets and liabilities recorded at fair value on a recurring basis (in thousands):
 
Fair Value Measurements Using
Description
At January 2, 2015
 
Quoted
Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Liabilities
 
 
 
 
 
 
 
Foreign currency contracts (Note 15)
$
1,568

 
$
—

 
$
1,568

 
$
—

Interest rate swaps (Note 9)
990

 
—

 
990

 
—

 
 
Fair Value Measurements Using
Description
At January 3,
2014
 
Quoted
Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Liabilities
 
 
 
 
 
 
 
Foreign currency contracts
$
140

 
$
—

 
$
140

 
$
—

Accrued contingent consideration
840

 
—

 
—

 
840

Interest rate swap
328

 
—

 
328

 
—


Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Fair value standards also apply to certain assets and liabilities that are measured at fair value on a nonrecurring basis. The carrying amounts of cash, accounts receivable, accounts payable, accrued expenses and current portion of long-term debt approximate fair value because of the short-term nature of these items. As of January 2, 2015, the fair value of the Company’s variable rate long-term debt approximates its carrying value and is categorized in Level 2 of the fair value hierarchy.
A summary of the valuation methodologies for assets and liabilities measured on a nonrecurring basis is as follows:
Cost and equity method investments – The Company holds investments in equity and other securities that are accounted for as either cost or equity method investments, which are classified as Other Assets. The total carrying value of these investments is reviewed quarterly for changes in circumstance or the occurrence of events that suggest the Company’s investment may not be recoverable. The fair value of cost or equity method investments is not adjusted if there are no identified events or changes in circumstances that may have a material effect on the fair value of the investments. Gains and losses realized on cost and equity method investments are recorded in Other (Income) Expense, Net, unless separately stated. The aggregate recorded amount of cost and equity method investments at January 2, 2015 and January 3, 2014 was $14.5 million and $12.3 million, respectively. The Company’s equity method investment is in a Chinese venture capital fund focused on investing in life sciences companies. This fund accounts for its investments at fair value with the unrealized change in fair value of these investments recorded as income or loss to the fund in the period of change. As of January 2, 2015, the Company owned 7.4% of this fund.
During 2014, 2013 and 2012, the Company recognized impairment charges related to its cost method investments of $0.0 million, $0.5 million and $0.1 million, respectively. 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. During 2014, the Company sold one of its cost method investments, which resulted in a pre-tax gain of $3.2 million. During 2014, 2013, and 2012, the Company recognized a net gain (loss) on equity method investments of $1.2 million, $(0.2) million, and $(0.3) million, respectively.
Long-lived assets – The Company reviews the carrying amount of its long-lived assets to be held and used for potential impairment whenever certain indicators are present as described in Note 1 “Summary of Significant Accounting Policies.” During 2014, the Company recorded a $0.4 million impairment charge related to its Orvin, Switzerland property held for sale. The fair value of these assets were determined based upon recent sales data of similar assets and discussions with potential buyers, and was categorized in Level 2 of the fair value hierarchy. During 2013, the Company wrote off $0.5 million of IPR&D allocated to its QiG segment as these projects were discontinued prior to reaching technological feasibility. Additionally, during 2013, the Company wrote off $0.9 million of inventory and technology related to Greatbatch Medical’s wireless sensing product line held for sale, as an agreement could not be reached with potential buyers. During 2012, the Company recognized a $3.6 million impairment charge in connection with the sale of certain non-core Swiss orthopaedic product lines to an independent third party. The above impairment charges were recorded in Other Operating Expenses, Net. See Note 13 “Other Operating Expenses, Net” for further discussion.
The following table provides information regarding assets and liabilities recorded at fair value on a nonrecurring basis as of January 2, 2015. There were no such assets or liabilities as of January 3, 2014 (in thousands): 
 
Fair Value Measurements Using
Description
At January 2, 2015
 
Quoted
Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets
 
 
 
 
 
 
 
Assets Held for Sale (Note 5)
$
1,635

 
$
—

 
$
1,635

 
$
—


Fair Value of Other Financial Instruments
Pension plan assets – The fair value of the Company’s pension plan assets disclosed in Note 10 “Benefit Plans” are determined based upon quoted market prices in inactive markets or valuation models with observable market data inputs to estimate fair value. These observable market data inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data. The Company’s pension plan assets are categorized Level 2 of the fair value hierarchy.
Business Segment, Geographic and Concentration Risk Information
BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION
19.
 
BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION

The Company has two reportable segments: Greatbatch Medical and QiG. Greatbatch Medical designs and manufactures medical devices and components where Greatbatch either owns the intellectual property or has unique manufacturing and assembly expertise. Greatbatch Medical provides medical devices and components to the following markets:
•
Cardiac/Neuromodulation: Products include batteries, capacitors, filtered and unfiltered feed-throughs, engineered components, implantable stimulation leads, and enclosures used in implantable medical devices.
•
Orthopaedics: Products include implants, instruments and delivery systems for large joint, spine, extremity and trauma procedures.
•
Portable Medical: Products include life-saving and life-enhancing applications comprising automated external defibrillators, portable oxygen concentrators, ventilators, and powered surgical tools.
•
Vascular: Products include introducers, steerable sheaths, and catheters 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.
•
Energy, Military, Environmental: Products include primary and rechargeable batteries and battery packs for demanding applications such as down hole drilling tools.
Greatbatch Medical also offers value-added assembly and design engineering services for medical devices that utilize its component products.
QiG focuses on developing medical device systems for some of healthcare’s most pressing challenges and reflects Greatbatch’s strategic evolution of its product offerings in order to raise the growth and profitability profile of the Company. QiG utilizes a disciplined and diversified portfolio approach with three investment modes: new medical device systems commercialization, collaborative programs with OEM customers, and strategic equity positions in emerging healthcare companies. The development of certain new medical device systems are facilitated through the establishment of limited liability companies (“LLCs”). These LLCs do not own, but have the exclusive right to use the technology of Greatbatch in certain, specific fields of use and have an exclusive manufacturing agreement with Greatbatch Medical. QiG currently owns 89% - 100% of three LLCs. Minority interest in these LLCs are held by key opinion leaders, clinicians and strategic partners. Under the agreements governing these LLCs, QiG is responsible to fund 100% of the expenses incurred by the LLC. However, no distributions are made to the minority holders until QiG is reimbursed for all expenses paid. Once QiG has been fully reimbursed, all future distributions are made based upon the respective LLCs ownership percentages. One of the LLCs established by QiG is for the Company’s Algovita spinal cord stimulator to treat chronic intractable pain of the trunk and/or limbs. This product was submitted for premarket approval (“PMA”) to the United States Food & Drug Administration (“FDA”) in December 2013 and in January 2014 documentation for European CE Mark was submitted to the notified body, TÜV SÜD America. CE Mark approval was obtained on June 17, 2014.
QiG revenue includes sales of neural interface technology, components and systems to the neuroscience and clinical markets. As further discussed in Note 2 “Acquisitions,” during 2014, the Company acquired CCC, a neuromodulation medical device developer and manufacturer. As a result of this transaction, QiG revenue also includes sales of various medical device products such as implantable pulse generators, programmer systems, battery chargers, patient wands and leads to medical device companies. Future income of QiG is expected to come from various sources including investment gains from the sales of its LLC ownership interests, technology licensing fees, royalty revenue, and/or the sales of medical device systems.
An analysis and reconciliation of the Company’s business segment, product line and geographic information to the respective information in the Consolidated Financial Statements follows. Intersegment sales between Greatbatch Medical and QiG were not material for 2014, 2013 or 2012. Sales by geographic area are presented by allocating sales from external customers based on where the products are shipped to (in thousands): 
 
Year Ended
Sales:
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Greatbatch Medical
 
 
 
 
 
Cardiac/Neuromodulation
$
321,419

 
$
325,412

 
$
306,669

Orthopaedics
147,296

 
130,247

 
122,061

Portable Medical
69,043

 
78,743

 
81,659

Vascular
58,770

 
48,357

 
51,980

Energy, Military, Environmental
81,757

 
78,143

 
81,353

Total Greatbatch Medical
678,285

 
660,902

 
643,722

QiG
9,502

 
3,043

 
2,455

Total sales
$
687,787

 
$
663,945

 
$
646,177


     
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Segment income (loss) from operations:
 
 
 
 
 
Greatbatch Medical
$
126,312

 
$
111,805

 
$
79,093

QiG
(23,256
)
 
(30,484
)
 
(32,554
)
Total segment income from operations
103,056

 
81,321

 
46,539

Unallocated operating expenses
(27,402
)
 
(19,982
)
 
(20,718
)
Operating income as reported
75,654

 
61,339

 
25,821

Unallocated other income (expense), net
925

 
(12,501
)
 
(19,091
)
Income before provision for income taxes as reported
$
76,579

 
$
48,838

 
$
6,730



 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Depreciation and Amortization:
 
 
 
 
 
Greatbatch Medical
$
31,906

 
$
31,112

 
$
39,820

QiG
2,101

 
1,539

 
630

Total depreciation and amortization included in segment income from operations
34,007

 
32,651

 
40,450

Unallocated depreciation and amortization
4,223

 
9,681

 
18,475

Total depreciation and amortization
$
38,230

 
$
42,332

 
$
58,925



 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Expenditures for tangible long-lived assets, excluding acquisitions:
 
 
 
 
 
Greatbatch Medical
$
19,006

 
$
13,242

 
$
33,249

QiG
1,453

 
2,134

 
3,208

Total reportable segments
20,459

 
15,376

 
36,457

Unallocated long-lived tangible assets
5,187

 
2,798

 
4,709

Total expenditures
$
25,646

 
$
18,174

 
$
41,166




 
At
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Identifiable assets:
 
 
 
 
 
Greatbatch Medical
$
761,225

 
$
758,369

 
$
779,890

QiG
76,529

 
56,245

 
57,750

Total reportable segments
837,754

 
814,614

 
837,640

Unallocated assets
118,255

 
76,089

 
52,235

Total assets
$
956,009

 
$
890,703

 
$
889,875


 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Sales by geographic area:
 
 
 
 
 
United States
$
312,539

 
$
325,090

 
$
330,537

Non-Domestic locations:
 
 
 
 
 
Puerto Rico
127,702

 
117,961

 
105,731

Belgium
65,308

 
67,155

 
58,043

Rest of world
182,238

 
153,739

 
151,866

Total sales
$
687,787

 
$
663,945

 
$
646,177

 
 
At
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Long-lived tangible assets:
 
 
 
 
 
United States
$
113,851

 
$
116,484

 
$
123,104

Rest of world
31,074

 
29,289

 
27,789

Total
$
144,925

 
$
145,773

 
$
150,893


A significant portion of the Company’s sales and accounts receivable were to four customers as follows: 
 
Sales
 
Accounts Receivable
 
Year Ended
 
At
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
 
January 2,
2015
 
January 3,
2014
Customer A
18
%
 
20
%
 
19
%
 
4
%
 
8
%
Customer B
18
%
 
16
%
 
16
%
 
23
%
 
19
%
Customer C
12
%
 
13
%
 
11
%
 
8
%
 
8
%
Customer D
6
%
 
7
%
 
6
%
 
12
%
 
11
%
 
54
%
 
56
%
 
52
%
 
47
%
 
46
%
Quarterly Sales and Earnings Data - Unaudited
QUARTERLY SALES AND EARNINGS DATA - UNAUDITED
20.
 
QUARTERLY SALES AND EARNINGS DATA—UNAUDITED

 
4th Qtr.
 
3rd Qtr.
 
2nd Qtr.
 
1st Qtr.
 
(in thousands, except per share data)
2014
 
 
 
 
 
 
 
Sales
$
169,726

 
$
171,699

 
$
172,081

 
$
174,281

Gross profit
57,214

 
58,118

 
58,470

 
57,596

Net income
14,176

 
14,012

 
12,348

 
14,922

EPS—basic
0.57

 
0.56

 
0.50

 
0.61

EPS—diluted
0.54

 
0.54

 
0.48

 
0.58

 
 
 
 
 
 
 
 
2013
 
 
 
 
 
 
 
Sales
$
176,619

 
$
167,730

 
$
171,331

 
$
148,265

Gross profit
57,385

 
55,877

 
57,302

 
48,749

Net income
9,781

 
11,071

 
9,752

 
5,663

EPS—basic
0.40

 
0.46

 
0.41

 
0.24

EPS—diluted
0.38

 
0.44

 
0.39

 
0.23




Fourth quarter results for 2013 includes an additional week of operations in comparison to the same period of 2014 as the Company utilizes a fifty-two, fifty-three week fiscal year, which ends on the Friday nearest December 31st. Although this additional week of operations may have impacted certain financial statement line items, management believes that, when combined with the additional holiday and weather related shutdowns, this additional week did not materially impact the Company’s net operating results.
Valuation and Qualifying Accounts
Schedule of Valuation and Qualifying Accounts Disclosure
Schedule II—Valuation and Qualifying Accounts 
 
 
 
Col. C—Additions
 
 
 
 
 
 
 
Col. A
Description
Col. B Balance at Beginning
of Period
 
Charged to Costs &
Expenses
 
Charged to Other Accounts- Describe
 
 
 
Col. D Deductions
- Describe
 
 
Col. E Balance at End of
Period
January 2, 2015
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
$
2,001

 
$
98

 
$
14

 
(3)(4) 
 
$
(702
)
(2) 
 
$
1,411

Valuation allowance for deferred income tax assets
$
11,661

 
$
(729
)
(1) 
$
—

 
(4) 
 
$
(223
)
(1)(5) 
 
$
10,709

January 3, 2014
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
$
2,372

 
$
(93
)
 
$
(15
)
 
(4) 
 
$
(263
)
(2) 
 
$
2,001

Valuation allowance for deferred income tax assets
$
12,768

 
$
(1,263
)
(1) 
$
32

 
(4) 
 
$
124

(1) 
 
$
11,661

December 28, 2012
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
$
1,930

 
$
484

 
$
71

 
(3)(4)  
 
$
(113
)
(2) 
 
$
2,372

Valuation allowance for deferred income tax assets
$
7,775

 
$
5,145

(1) 
$
124

 
(4) 
 
$
(276
)
(5) 
 
$
12,768

(1) 
Valuation allowance recorded in the provision for income taxes for certain net operating losses and tax credits. The net decrease in allowance in 2014 and 2013 primarily relates to the use of net operating loss carryforwards.
(2) 
Accounts written off.
(3) 
Balance recorded as a part of our 2014 acquisition of Centro de Construcción de Cardioestimuladores del Uruguay and our 2012 acquisition of NeuroNexus Technologies, Inc.
(4) 
Includes foreign currency translation effect.
(5) 
Primarily relates to return to provision adjustments for prior years.
Summary of Significant Accounting Policies (Policies)
Consolidation, Policy [Policy Text Block] 
Principles of Consolidation – The consolidated financial statements include the accounts of Greatbatch, Inc. and its wholly owned subsidiary Greatbatch Ltd. (collectively, the “Company” or “Greatbatch”). All intercompany balances and transactions have been eliminated in consolidation.
Fair Value Measurements 
Fair Value Measurements – Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the “exit price”) in an orderly transaction between market participants at the measurement date. Accounting Standards Codification (“ASC”) establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:
Level 1 – Valuation is based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Level 1 valuations do not entail a significant degree of judgment.
Level 2 – Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market.
Level 3 – Valuation is based on unobservable inputs that are significant to the overall fair value measurement. The degree of judgment in determining fair value is greatest for Level 3 valuations.
The availability of observable inputs can vary and is affected by a wide variety of factors, including, the type of asset/liability, whether the asset/liability is established in the marketplace, and other characteristics particular to the valuation. To the extent that a valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, assumptions are required to reflect those that market participants would use in pricing the asset or liability at the measurement date. Note 18 “Fair Value Measurements” contains additional information on assets and liabilities recorded at fair value in the consolidated financial statements.
Cash and Cash Equivalents 
Cash and Cash Equivalents – Cash and cash equivalents consist of cash and highly liquid, short-term investments with maturities at the time of purchase of three months or less. The carrying amount of cash and cash equivalents approximated their fair value as of January 2, 2015 and January 3, 2014 based upon the short-term nature of these instruments.
Concentration of Credit Risk 
Concentration of Credit Risk – Financial instruments that potentially subject the Company to concentration of credit risk consist principally of accounts receivable. A significant portion of the Company’s sales and/or accounts receivable are to four customers, all in the medical device industry, and, as such, the Company is directly affected by the condition of those customers and that industry. However, the credit risk associated with trade receivables is partially mitigated due to the stability of those customers. The Company performs on-going credit evaluations of its customers. Note 19 “Business Segment, Geographic and Concentration Risk Information” contains information on sales and accounts receivable for these customers. The Company maintains cash deposits with major banks, which from time to time may exceed insured limits. The Company performs on-going credit evaluations of its banks.
Allowance for Doubtful Accounts 
Allowance for Doubtful Accounts – The Company provides credit, in the normal course of business, to its customers in the form of trade receivables. Credit is extended based on evaluation of a customer’s financial condition and collateral is not required. The Company maintains an allowance for those customer receivables that it does not expect to collect. The Company accrues its estimated losses from uncollectable accounts receivable to the allowance based upon recent historical experience, the length of time the receivable has been outstanding and other specific information as it becomes available. Provisions to the allowance for doubtful accounts are charged to current operating expenses. Actual losses are charged against this allowance when incurred. The carrying amount of trade receivables approximated their fair value as of January 2, 2015 based upon the short-term nature of these assets.
Inventories 
Inventories – Inventories are stated at the lower of cost, determined using the first-in first-out method, or market. Write-downs for excess, obsolete or expired inventory are based primarily on how long the inventory has been held as well as estimates of forecasted net sales of that product. A significant change in the timing or level of demand for products may result in recording additional write-downs for excess, obsolete or expired inventory in the future. Note 4 “Inventories” contains additional information on the Company’s inventory.
Property, Plant and Equipment 
Property, Plant and Equipment (“PP&E”) – PP&E is carried at cost less accumulated depreciation. Depreciation is computed by the straight-line method over the estimated useful lives of the assets, as follows: buildings and building improvements 7-40 years; machinery and equipment 3-8 years; office equipment 3-10 years; and leasehold improvements over the remaining lives of the improvements or the lease term, if less. The cost of repairs and maintenance are expensed as incurred; renewals and betterments are capitalized. Upon retirement or sale of an asset, its cost and related accumulated depreciation or amortization is removed from the accounts and any gain or loss is recorded in operating income or expense. Note 6 “Property, Plant and Equipment, Net” contains additional information on the Company’s PP&E.
Business Combinations 
Business Combinations – The Company records its business combinations under the acquisition method of accounting. Under the acquisition method of accounting, the Company allocates the purchase price of each acquisition to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values at the date of acquisition. The fair value of identifiable intangible assets is based upon detailed valuations that use various assumptions made by management. Any excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired is allocated to goodwill. All direct acquisition-related costs are expensed as incurred.
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 Expenses, 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 contingent consideration. See Note 18 “Fair Value Measurements” and Note 2 “Acquisitions” for additional information on the Company’s contingent consideration and acquisitions, respectively.
Amortizing Intangible Assets 
Amortizing Intangible Assets – Amortizing intangible assets consists primarily of purchased technology, patents and customer lists. The Company amortizes its definite-lived intangible assets over their estimated useful lives utilizing an accelerated or straight-line method of amortization, which approximates the projected cash flows used to fair value those intangible assets at the time of acquisition. When the straight-line method of amortization is utilized, the estimated useful life of the intangible asset is shortened to assure that recognition of amortization expense corresponds with the expected cash flows. The amortization period for the Company’s amortizing intangible assets are as follows: purchased technology and patents 5-15 years; customer lists 7-20 years and other intangible assets 1-10 years. See Note 7 “Intangible Assets” for additional information on the Company’s amortizing intangible assets.
Impairment of Long-Lived Assets 
Impairment of Long-Lived Assets – The Company assesses the impairment of definite-lived long-lived assets or asset groups when events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that are considered in deciding when to perform an impairment review include: a significant decrease in the market price of the asset or asset group; a significant change in the extent or manner in which a 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 a 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; 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 a long-lived asset or asset group; or a current expectation that, more likely than not, a 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.
Potential recoverability is measured by comparing the carrying amount of the 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. When it is determined that useful lives of assets are shorter than originally estimated, and no impairment is present, the rate of depreciation is accelerated in order to fully depreciate the assets over their new shorter useful lives.
Goodwill and Intangible Assets 
Goodwill and other indefinite lived intangible assets recorded are not amortized but are periodically tested for impairment. The Company assesses goodwill for impairment on the last day of each fiscal year, or more frequently if certain events occur as described above. Goodwill is evaluated for impairment through the comparison of the fair value of the reporting units to their carrying values. When evaluating goodwill for impairment, the Company may first perform an assessment of qualitative factors to determine if the fair value of the reporting unit is more-likely-than-not greater than its carrying amount. This qualitative assessment is referred to as a “step zero” approach. If, based on the review of the qualitative factors, the Company determines it is more-likely-than-not that the fair value of the reporting unit is greater than its carrying value, the required two-step impairment test can be bypassed. If the Company does not perform a step zero assessment or if the fair value of the reporting unit is more-likely-than-not less than its carrying value, the Company must perform a two-step impairment test, and calculate the estimated fair value of the reporting unit. If, based upon the two-step impairment test, it is determined that 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. Under the two-step approach, fair values for reporting units are determined based on discounted cash flows and market multiples.
The Company completed its annual goodwill impairment assessment for 2014 by performing a step zero qualitative analysis. As part of this analysis, the Company evaluated factors including, but not limited to, macro-economic conditions, market and industry conditions, cost factors, competitive environment, share price fluctuations, results of the last impairment test, and the operational stability and the overall financial performance of the reporting units. After completing the analysis, the Company determined that it was more likely than not that its reporting units fair values are greater than the reporting units carrying values and the two-step impairment test is not necessary.
Other indefinite lived intangible assets are assessed for impairment on the last day of each fiscal year, or more frequently if certain events occur as described above, by comparing the fair value of the intangible asset to its carrying value. The fair value is determined by using the income approach. Note 7 “Intangible Assets” contains additional information on the Company’s long-lived intangible assets.
Other Long-Term Assets 
Other Long-Term Assets – Other long-term assets includes deferred financing fees incurred in connection with the Company’s issuance of its long-term debt. The fees relating to the Company’s Term Loan are amortized to Interest Expense using the effective interest method over the period from the date of issuance to the put option date (if applicable) or the maturity date, whichever is earlier. Fees relating to the Company’s Revolving Credit Facility are amortized to Interest Expense on a straight-line basis over the contractual term of the credit facility. The amortization of deferred fees is included in Debt Related Amortization Included in Interest Expense in the Consolidated Statements of Cash Flows. Note 9 “Debt” contains additional information on the Company’s deferred financing fees.
Cost And Equity Method Investments 
Other long-term assets also include investments in equity securities of entities that are not publicly traded and which do not have readily determinable fair values. The Company accounts for investments in these entities under the cost or equity method depending on the type of ownership interest, as well as the Company’s ability to exercise influence over these entities. Equity method investments are initially recorded at cost, and are subsequently adjusted to reflect the Company’s share of earnings or losses of the investee. Cost method investments are recorded at cost. Each reporting period, management evaluates these cost and equity method investments to determine if there are any events or circumstances that are likely to have a significant effect on the fair value of the investment. Examples of such impairment indicators include, but are not limited to: a recent sale or offering of similar shares of the investment at a price below the Company’s cost basis; a significant deterioration in earnings performance; a significant change in the regulatory, economic or technological environment of the investee; or a significant doubt about an investee’s ability to continue as a going concern. If an impairment indicator is identified, management will estimate the fair value of the investment and compare it to its carrying value. The estimation of fair value considers all available financial information related to the investee, including, but not limited to, valuations based on recent third-party equity investments in the investee. If the fair value of the investment is less than its carrying value, the investment is impaired and a determination as to whether the impairment is other-than-temporary is made. Impairment is deemed to be other-than-temporary unless the Company has the ability and intent to hold the investment for a period sufficient for a market recovery up to the carrying value of the investment. Further, evidence must indicate that the carrying value of the investment is recoverable within a reasonable period. For other-than-temporary impairments, an impairment loss is recognized equal to the difference between the investment’s carrying value and its fair value. The Company has determined that these investments are not considered variable interest entities. The Company’s exposure related to these entities is limited to its recorded investment. These investments are in start-up research and development companies whose fair value is highly subjective in nature and subject to future fluctuations, which could be significant.
Income Taxes 
Income Taxes – The consolidated financial statements of the Company have been prepared using the asset and liability approach in accounting for income taxes, which requires the recognition of deferred income taxes for the expected future tax consequences of net operating losses, credits, and temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided on deferred tax assets if it is determined that it is more likely than not that the asset will not be realized.
The Company accounts for uncertain tax positions using a more likely than not recognition threshold. The evaluation of uncertain tax positions is based on factors including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. These tax positions are evaluated on a quarterly basis. The Company recognizes interest expense related to uncertain tax positions as Provision for Income Taxes. Penalties, if incurred, are recognized as a component of Selling, General and Administrative Expenses (“SG&A”).
The Company and its subsidiary file a consolidated U.S. federal income tax return. State tax returns are filed on a combined or separate basis depending on the applicable laws in the jurisdictions where tax returns are filed. The Company also files foreign tax returns on a separate company basis in the countries in which it operates. See Note 14 “Income Taxes” for additional information.
Convertible Subordinated Notes 
Convertible Subordinated Notes (“CSN”) – For convertible debt instruments that may be settled in cash upon conversion, the Company accounts for the liability and equity components of those instruments in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. 
Upon issuance, the Company determined the carrying amount of the liability component of CSN by measuring the fair value of a similar liability that does not have the associated conversion option. The carrying amount of the conversion option was then determined by deducting the fair value of the liability component from the initial proceeds received from the issuance of CSN. The carrying amount of the conversion option was recorded in Additional Paid-In Capital with an offset to Long-Term Debt and was amortized using the effective interest method over the period from the date of issuance to the maturity date. The amortization of discount related to the Company’s convertible debt instruments is included in Debt Related Amortization Included in Interest Expense in the Consolidated Statements of Cash Flows. See Note 9 “Debt” for additional information.
Derivative Financial Instruments 
Derivative Financial Instruments – The Company recognizes all derivative financial instruments in its consolidated financial statements at fair value. Changes in the fair value of derivative instruments are recorded in earnings unless hedge accounting criteria are met. The Company designates its interest rate swaps (See Note 9 “Debt”) and foreign currency contracts (See Note 15 “Commitments and Contingencies”) entered into as cash flow hedges. The effective portion of the changes in fair value of these cash flow hedges is recorded each period, net of tax, in Accumulated Other Comprehensive Income until the related hedged transaction occurs. Any ineffective portion of the changes in fair value of these cash flow hedges is recorded in earnings. In the event the hedged cash flow for forecasted transactions does not occur, or it becomes probable that they will not occur, the Company would reclassify the amount of any gain or loss on the related cash flow hedge to income (expense) at that time. Cash flows related to these derivative financial instruments are included in cash flows from operating activities.
Revenue Recognition 
Revenue Recognition – The Company recognizes revenue when it is realized or realizable and earned. This occurs when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable (including any price concessions under long-term agreements), the buyer is obligated to pay us (i.e., not contingent on a future event), the risk of loss is transferred, there is no obligation of future performance, collectability is reasonably assured and the amount of future returns can reasonably be estimated. With regards to the Company’s customers (including distributors), those criteria are met at the time of shipment when title passes. Currently, the revenue recognition policy is the same for both Greatbatch Medical and QiG. In general, for customers with long-term contracts, we have negotiated fixed pricing arrangements. During new contract negotiations, price level decreases (concessions) for future sales may be offered to customers in exchange for volume and/or long-term commitments. Once the new contracts are signed, these prices are fixed and determinable for all future sales. The Company includes shipping and handling fees billed to customers in Sales. Shipping and handling costs associated with inbound and outbound freight are recorded in Cost of Sales. In certain instances the Company obtains component parts for sub-assemblies from its customers that are included in the final product sold back to the same customer. These amounts are excluded from Sales and Cost of Sales recognized by the Company.
Product Warranties 
Product Warranties – The Company allows customers to return defective or damaged products for credit, replacement, or exchange. The Company warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. The Company accrues its estimated exposure to warranty claims, through Cost of Sales, based upon recent historical experience and other specific information as it becomes available. Note 15 “Commitments and Contingencies” contains additional information on the Company’s product warranties.
Research, Development and Engineering Costs, Net 
Research, Development and Engineering Costs, Net (“RD&E”) – RD&E costs are expensed as incurred. The primary costs are salary and benefits for personnel, material costs used in development projects and subcontracting costs. Cost reimbursements for engineering services from customers for whom the Company designs products are recorded as an offset to engineering costs upon achieving development milestones specified in the contracts. These reimbursements do not cover the complete cost of the development projects. Additionally, the technology developed under these cost reimbursement projects is owned by the Company and is utilized for future products developed for other customers.
In-process research and development (“IPR&D”) represents research projects acquired in a business combination 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 tests 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.
Note 12 “Research, Development and Engineering Costs, Net” contains additional information on the Company’s RD&E activities.
Stock-Based Compensation 
Stock-Based Compensation – The Company records compensation costs related to stock-based awards granted to employees based upon their estimated fair value on the grant date. Compensation cost for service-based awards is recognized ratably over the applicable vesting period. Compensation cost for nonmarket-based performance awards is reassessed each period and recognized based upon the probability that the performance targets will be achieved. Compensation cost for market-based performance awards is expensed ratably over the applicable vesting period and is recognized each period whether the performance metrics are achieved or not.
The Company utilizes the Black-Scholes option pricing model to estimate the fair value of stock options granted. For service-based and nonmarket-based performance restricted stock and restricted stock unit awards, the fair market value of the award is determined based upon the closing value of the Company’s stock price on the grant date. For market-based performance restricted stock unit awards, the fair market value of the award is determined utilizing a Monte Carlo simulation model, which projects the value of the Company’s stock under numerous scenarios and determines the value of the award based upon the present value of those projected outcomes. 
The amount of stock-based compensation expense recognized is based on the portion of the awards that are ultimately expected to vest. The Company estimates pre-vesting forfeitures at the time of grant by analyzing historical data and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The total expense recognized over the vesting period will only be for those awards that ultimately vest, excluding market and nonmarket performance award considerations. Note 11 “Stock-Based Compensation” contains additional information on the Company’s stock-based compensation.
Foreign Currency Translation 
Foreign Currency Translation – The Company translates all assets and liabilities of its foreign subsidiaries, where the U.S. dollar is not the functional currency, at the period-end exchange rate and translates income and expenses at the average exchange rates in effect during the period. The net effect of this translation is recorded in the consolidated financial statements as Accumulated Other Comprehensive Income. Translation adjustments are not adjusted for income taxes as they relate to permanent investments in the Company’s foreign subsidiaries.
Defined Benefit Plans 
Defined Benefit Plans – The Company recognizes in its balance sheet as an asset or liability the overfunded or underfunded status of its defined benefit plans provided to its employees located in Mexico, Switzerland and France. This asset or liability is measured as the difference between the fair value of plan assets and the benefit obligation of those plans. For these plans, the benefit obligation is the projected benefit obligation, which is calculated based on actuarial computations of current and future benefits for employees. Actuarial gains or losses and prior service costs or credits that arise during the period, but are not included as components of net periodic benefit expense, are recognized as a component of Accumulated Other Comprehensive Income. Defined benefit expenses are charged to Cost of Sales, SG&A and RD&E expenses as applicable. Note 10 “Benefit Plans” contains additional information on these costs.
Earnings (Loss) Per Share 
Earnings (Loss) Per Share (“EPS”) – Basic EPS is calculated by dividing Net Income (Loss) by the weighted average number of shares outstanding during the period. Diluted EPS is calculated by adjusting the weighted average number of shares outstanding for potential common shares, which consist of stock options, unvested restricted stock and restricted stock units and, if applicable, contingently convertible instruments such as convertible debt. Note 16 “Earnings (Loss) Per Share” contains additional information on the computation of the Company’s EPS.
Comprehensive Income (Loss) 
Comprehensive Income (Loss) – The Company’s comprehensive income (loss) as reported in the Consolidated Statements of Operations and Comprehensive Income (Loss) includes net income (loss), foreign currency translation adjustments, the net change in cash flow hedges, and defined benefit plan liability adjustments. The Consolidated Statements of Operations and Comprehensive Income (Loss) and Note 17 “Accumulated Other Comprehensive Income” contains additional information on the computation of the Company’s comprehensive income (loss).
Use of Estimates 
Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of sales and expenses during the reporting period. Actual results could differ materially from those estimates.
Recently Issued Accounting Pronouncements 
Recently Issued Accounting Pronouncements – In the normal course of business, management evaluates all new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”), Securities and Exchange Commission (“SEC”), Emerging Issues Task Force (“EITF”), or other authoritative accounting bodies to determine the potential impact they may have on the Company’s Consolidated Financial Statements. Based upon this review, except as noted below, management does not expect any of the recently issued accounting pronouncements, which have not already been adopted, to have a material impact on the Company’s Consolidated Financial Statements.
In November 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-17, “Business Combinations (Topic 805): Pushdown Accounting (a Consensus of the FASB Emerging Issues Task Force).” The amendments in this ASU provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. An acquired entity may elect the option to apply pushdown accounting in the reporting period in which the change-in-control event occurs. The amendments in this ASU are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. This ASU did not impact the Company’s Consolidated Financial Statements.
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” The core principle behind ASU 2014-09 is that an entity should recognize revenue in an amount that reflects the consideration to which the entity expects to be entitled in exchange for delivering goods and services. This model involves a five-step process that includes identifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract and recognizing revenue when the entity satisfies the performance obligations. This ASU supersedes existing revenue recognition guidance and is effective for annual reporting periods beginning after December 15, 2016 with early application not permitted. This ASU allows two methods of adoption; a full retrospective approach where three years of financial information are presented in accordance with the new standard, and a modified retrospective approach where this ASU is applied to the most current period presented in the financial statements. The Company is currently assessing the financial impact of adopting the new standard and the methods of adoption; however, given the scope of the new standard, the Company is currently unable to provide a reasonable estimate regarding the financial impact or which method of adoption will be elected.
In April 2014, the FASB issued ASU No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which amends the definition of a discontinued operation and requires entities to provide additional disclosures about disposal transactions that do not meet the discontinued operations criteria. The revised guidance changes how entities identify and disclose information about disposal transactions under U.S. GAAP. This ASU is effective prospectively for all disposals (except disposals classified as held for sale before the adoption date) or components initially classified as held for sale in periods beginning on or after December 15, 2014, with early adoption permitted. This ASU will be applicable for disposal transactions, if any, that the Company enters into after the adoption date.
In July 2013, the FASB issued ASU No. 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” This ASU requires that entities present an unrecognized tax benefit, or portion of an unrecognized tax benefit, as a reduction to a deferred tax asset in the financial statements for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with certain exceptions. This ASU was adopted during the first quarter of 2014 and did not impact the Company’s Consolidated Financial Statements as the Company does not have any net operating loss carryforward deferred tax assets that are eligible to be reduced by an unrecognized tax benefit as required by the ASU.
Acquisitions (Tables)
Schedule of Pro Forma Information 
The following unaudited pro forma information presents the consolidated results of operations of the Company, CCC, and NeuroNexus as if those acquisitions occurred as of the beginning of fiscal years 2013 (CCC) and 2011 (NeuroNexus) (in thousands, except per share amounts): 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Sales
$
696,357

 
$
677,657

 
$
646,617

Net income (loss)
56,453

 
37,612

 
(4,973
)
Earnings (loss) per share:
 
 
 
 
 
Basic
$
2.27

 
$
1.57

 
$
(0.21
)
Diluted
$
2.17

 
$
1.49

 
$
(0.21
)
Schedule of Business Acquisitions, by Acquisition 
The following table summarizes the preliminary allocation of the CCC purchase price to the assets acquired and liabilities assumed as of the acquisition date (in thousands):
Assets acquired
 
Current assets
$
10,670

Property, plant and equipment
1,131

Amortizing intangible assets
6,100

Goodwill
8,296

Total assets acquired
26,197

Liabilities assumed
 
Current liabilities
4,842

Deferred income taxes
1,590

Total liabilities assumed
6,432

Net assets acquired
$
19,765

Schedule of Acquired Finite-Lived Intangible Assets by Major Class 
Intangible assets – The purchase price was allocated to intangible assets as follows (dollars in thousands):
Amortizing Intangible Assets
 
Fair
Value
Assigned
 
Weighted
Average
Amortization
Period (Years)
 
Weighted
Average
Discount
Rate
 
 
 
 
 
 
 
Technology
 
$
1,400

 
10
 
18%
Customer lists
 
4,600

 
10
 
18%
Trademarks and tradenames
 
100

 
2
 
18%
 
 
$
6,100

 
10
 
18%
Schedule of Business Acquisitions, by Acquisition 
The following table summarizes the 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
8,924

Other assets
1,576

Total assets acquired
14,620

Liabilities assumed
 
Current liabilities
420

Deferred income taxes
989

Total liabilities assumed
1,409

Net assets acquired
$
13,211

Schedule of Acquired Finite-Lived Intangible Assets by Major Class 
The purchase price was allocated to identifiable intangible assets as follows (dollars in thousands):
 
 
Fair
Value
Assigned
 
Weighted
Average
Amortization
Period (Years)
 
Estimated
Useful
Life (Years)
 
Weighted
Average
Discount
Rate
Amortizing Intangible Assets
 
 
 
 
 
 
 
Technology and patents
$
1,058

 
6
 
10
 
14
%
Customer lists
1,869

 
7
 
15
 
13
%
 
$
2,927

 
7
 
13
 
13
%
Indefinite-lived Intangible Assets
 
 
 
 
 
 
 
In-process research and development
$
540

 
N/A
 
12
 
26
%
Schedule of Acquired Indefinite-lived Intangible Assets by Major Class 
Indefinite-lived Intangible Assets
 
 
 
 
 
 
 
In-process research and development
540

 
N/A
 
12
 
26
%
Supplemental Cash Flow Information (Tables)
Schedule of Cash Flow
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
(in thousands)
 
 
 
 
 
Noncash investing and financing activities:
 
 
 
 
 
Common stock contributed to 401(k) Plan
$
4,341

 
$
2,477

 
$
4,793

Property, plant and equipment purchases included in accounts payable
2,926

 
2,103

 
2,522

Cash paid during the year for:
 
 
 
 
 
Interest
3,521

 
4,989

 
6,230

Income taxes
13,565

 
44,165

 
4,909

Acquisition of noncash assets
22,434

 
—

 
14,396

Liabilities assumed
6,432

 
—

 
1,244

Inventories (Tables)
Schedule of Inventory, Current
Inventories are comprised of the following (in thousands):
 
 
At
 
January 2,
2015
 
January 3,
2014
Raw materials
$
73,354

 
$
67,939

Work-in-process
38,930

 
36,670

Finished goods
16,958

 
13,749

Total
$
129,242

 
$
118,358

 
 
 
 
Assets Held For Sale (Tables)
Disclosure of Long Lived Assets Held-for-sale
Assets held for sale included in Prepaid Expenses and Other Current Assets, is comprised of the following (in thousands):
 
 
 
 
At
Asset
 
Business
Segment
 
January 2,
2015
 
January 3,
2014
Building and building improvements
 
Greatbatch Medical
 
$
1,635

 
$
—

Property, Plant and Equipment, Net (Tables)
Property, Plant and Equipment 
Property, plant and equipment are comprised of the following (in thousands):
 
 
At
 
January 2,
2015
 
January 3,
2014
Manufacturing machinery and equipment
$
167,173

 
$
159,542

Buildings and building improvements
89,258

 
87,359

Information technology hardware and software
31,725

 
28,010

Leasehold improvements
31,170

 
31,522

Furniture and fixtures
14,045

 
13,889

Land and land improvements
10,816

 
13,016

Construction work in process
14,129

 
7,886

Other
629

 
633

 
358,945

 
341,857

Accumulated depreciation
(214,020
)
 
(196,084
)
Total
$
144,925

 
$
145,773

Depreciation Expense Disclosure 
Depreciation expense for property, plant and equipment was as follows (in thousands):
 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Depreciation expense
$
23,320

 
$
22,799

 
$
31,575

Intangible Assets (Tables)
Schedule of Finite-Lived Intangible Assets 
Amortizing intangible assets, net are comprised of the following (in thousands):
 
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Foreign
Currency
Translation
 
Net
Carrying
Amount
At January 2, 2015
 
 
 
 
 
 
 
Purchased technology and patents
$
95,776

 
$
(75,894
)
 
$
1,966

 
$
21,848

Customer lists
72,857

 
(31,460
)
 
1,374

 
42,771

Other
4,534

 
(4,619
)
 
803

 
718

Total amortizing intangible assets
$
173,167

 
$
(111,973
)
 
$
4,143

 
$
65,337

At January 3, 2014
 
 
 
 
 
 
 
Purchased technology and patents
$
97,376

 
$
(69,026
)
 
$
1,980

 
$
30,330

Customer lists
68,257

 
(24,671
)
 
1,367

 
44,953

Other
4,434

 
(4,399
)
 
804

 
839

Total amortizing intangible assets
$
170,067

 
$
(98,096
)
 
$
4,151

 
$
76,122

Schedule of Finite-Lived Intangible Assets, Amortization Expense 
Aggregate intangible asset amortization expense is comprised of the following (in thousands):
 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Cost of sales
$
6,201

 
$
6,822

 
$
7,489

SG&A
7,009

 
5,800

 
6,227

RD&E
667

 
545

 
545

Total intangible asset amortization expense
$
13,877

 
$
13,167

 
$
14,261

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense 
Estimated future intangible asset amortization expense based upon the current carrying value is as follows (in thousands):
 
 
Estimated
Amortization
Expense
2015
$
12,988

2016
10,676

2017
9,520

2018
7,232

2019
5,431

Thereafter
19,490

Total estimated amortization expense
$
65,337

Schedule of Indefinite-Lived Intangible Assets 
The change in indefinite-lived assets during 2014 is as follows (in thousands)  
 
Trademarks
and
Tradenames
At January 3, 2014
$
20,288

At January 2, 2015
$
20,288

Schedule of Goodwill 
The change in goodwill during 2014 is as follows (in thousands):
 
 
Greatbatch
Medical
 
QiG
 
Total
At January 3, 2014
$
304,856

 
$
41,800

 
$
346,656

Goodwill acquired (Note 2)
—

 
8,296

 
8,296

Foreign currency translation
(559
)
 
—

 
(559
)
At January 2, 2015
$
304,297

 
$
50,096

 
$
354,393

Accrued Expenses (Tables)
Schedule of Accrued Liabilities

Accrued expenses are comprised of the following (in thousands):
 
 
At
 
January 2,
2015
 
January 3,
2014
Salaries and benefits
$
20,770

 
$
16,311

Profit sharing and bonuses
18,524

 
19,808

Warranty
660

 
1,819

Other
8,430

 
6,743

Total
$
48,384

 
$
44,681

Debt (Tables)
Schedule of Debt 
Long-term debt is comprised of the following (in thousands):
 
At
 
January 2,
2015
 
January 3, 2014
Variable rate term loan
$
187,500

 
$
197,500

Revolving line of credit
—

 
—

Total debt
187,500

 
197,500

Less current portion of long-term debt
11,250

 
—

Total long-term debt
$
176,250

 
$
197,500

Schedule of Interest Rate Derivatives 
Information regarding the Company’s outstanding interest rate swaps as of January 2, 2015 is as follows (dollars in thousands):
Instrument
 
Type of
Hedge
 
Notional
Amount
 
Start
Date
 
End
Date
 
Pay
Fixed
Rate
 
Current
Receive
Floating
Rate
 
Fair
Value
January 2, 2015
 
Balance
Sheet Location
Interest rate swap
 
Cash flow
 
$
100,000

 
Feb-13
 
Feb-16
 
0.573
%
 
0.155
%
 
$
(125
)
 
Other Long-Term Liabilities
Interest rate swap
 
Cash flow
 
$
90,000

 
Feb-15
 
Sept-19
 
1.921
%
 
N/A
 
$
(865
)
 
Other Long-Term Liabilities
Schedule of Maturities of Long-term Debt 
The expected future minimum principal payments under the Credit Facility as of January 2, 2015 are as follows (in thousands):
2015
$
11,250

2016
16,250

2017
20,000

2018
20,000

2019
120,000

Total
187,500

Schedule of Interest 
The contractual interest and discount amortization for CSN were as follows (in thousands):
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Contractual interest
$
—

 
$
634

 
$
4,450

Discount amortization
—

 
5,368

 
11,464

Schedule of Deferred Financing Costs 
The change in deferred financing fees is as follows (in thousands):
At December 28, 2012
$
2,056

Financing costs deferred
2,802

Write-off during the period
(156
)
Amortization during the period
(842
)
At January 3, 2014
3,860

Amortization during the period
(773
)
At January 2, 2015
$
3,087

Benefit Plans (Tables)
Schedule of Changes in Projected Benefit Obligations 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
Change in projected benefit obligation:
 
 
 
Projected benefit obligation at beginning of year
$
2,422

 
$
16,215

Service cost
203

 
236

Interest cost
75

 
138

Prior service cost and plan amendments
—

 
(45
)
Plan participants’ contribution
36

 
134

Actuarial (gain) loss
630

 
(2
)
Benefits transferred in, net
155

 
434

Settlement/curtailment gain
(337
)
 
(14,539
)
Foreign currency translation
(341
)
 
(149
)
Projected benefit obligation at end of year
2,843

 
2,422

Schedule of Changes in Fair Value of Plan Assets 
 
January 2,
2015
 
January 3,
2014
Change in fair value of plan assets:
 
 
 
Fair value of plan assets at beginning of year
731

 
12,269

Employer contributions (refund)
(39
)
 
150

Plan participants’ contributions
36

 
134

Actual loss on plan assets
(101
)
 
(26
)
Benefits transferred in, net
198

 
138

Settlements
(337
)
 
(11,780
)
Foreign currency translation
(51
)
 
(154
)
Fair value of plan assets at end of year
437

 
731

Projected benefit obligation in excess of plan assets at end of year
$
2,406

 
$
1,691

Defined benefit liability classified as other current liabilities
$
25

 
$
25

Defined benefit liability classified as long-term liabilities
$
2,381

 
$
1,666

Accumulated benefit obligation at end of year
$
1,938

 
$
1,684

Schedule of Defined Benefit Plan Amounts Recognized in Other Comprehensive Income (Loss) 
Amounts recognized in Accumulated Other Comprehensive Income are as follows (in thousands):
 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
Net loss occurring during the year
$
736

 
$
25

Amortization of losses
(138
)
 
(722
)
Prior service cost
(2
)
 
150

Amortization of prior service cost
(11
)
 
33

Foreign currency translation
(76
)
 
224

Pre-tax adjustment
509

 
(290
)
Taxes
(135
)
 
18

Net (gain) loss
$
374

 
$
(272
)
Schedule of Amounts in Accumulated Other Comprehensive Income (Loss) to be Recognized over Next Fiscal Year 
The amortization of amounts in Accumulated Other Comprehensive Income expected to be recognized as components of net periodic benefit expense during 2015 are as follows (in thousands):
Amortization of net prior service cost
$
11

Amortization of net loss
45

Schedule of Net Benefit Costs 
Net pension cost (income) is comprised of the following (in thousands):
 
 
Year Ended
 
January 2, 2015
 
January 3, 2014
Service cost
$
203

 
$
236

Interest cost
75

 
138

Settlements loss
105

 
—

Expected return on assets
(3
)
 
—

Recognized net actuarial loss (gain)
45

 
(1,929
)
Net pension cost (income)
$
425

 
$
(1,555
)
Schedule of Assumptions Used 
The weighted-average rates used in the actuarial valuations were as follows:
 
 
Projected Benefit Obligation
 
Net Pension Cost
 
January 2,
2015
 
January 3,
2014
 
2014
 
2013
 
2012
Discount rate
2.3
%
 
3.4
%
 
3.4
%
 
2.1
%
 
2.5
%
Salary growth
3.0
%
 
3.1
%
 
3.1
%
 
2.4
%
 
2.3
%
Expected rate of return on assets
2.3
%
 
2.5
%
 
2.5
%
 
—
%
 
3.5
%
Schedule of Allocation of Plan Assets 
Plan assets were comprised of the following (in thousands):
 
 
 
 
Fair Value Measurements Using
 
January 2, 2015
 
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Insurance contract
$
437

 
$
—

 
$
437

 
$
—

Total
$
437

 
$
—

 
$
437

 
$
—

 
 
 
 
Fair Value Measurements Using
 
January 3,
2014
 
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Insurance contract
$
731

 
$
—

 
$
731

 
$
—

Total
$
731

 
$
—

 
$
731

 
$
—

Schedule of Expected Benefit Payments 
Estimated benefit payments over the next ten years are as follows (in thousands):
 
2015
$
47

2016
67

2017
124

2018
113

2019
177

2020-2024
866

Stock-Based Compensation (Tables)
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs 
The components and classification of stock-based compensation expense were as follows (in thousands): 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Stock options
$
2,523

 
$
3,490

 
$
2,786

Restricted stock and units
6,417

 
5,843

 
6,233

401(k) stock contribution
4,246

 
4,768

 
1,885

Total stock-based compensation expense
$
13,186

 
$
14,101

 
$
10,904

 
 
 
 
 
 
Cost of sales
$
3,530

 
$
3,864

 
$
2,620

Selling, general and administrative expenses
7,923

 
7,907

 
7,684

Research, development and engineering costs, net
1,440

 
1,194

 
600

Other operating expenses, net (Note 13)
293

 
1,136

 
—

Total stock-based compensation expense
$
13,186

 
$
14,101

 
$
10,904

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions 
The weighted-average fair value and assumptions used are as follows:
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Weighted average grant date fair value
$
16.43

 
$
8.38

 
$
8.20

Risk-free interest rate
1.73
%
 
0.73
%
 
0.83
%
Expected volatility
39
%
 
39
%
 
40
%
Expected life (in years)
5.3

 
5.3

 
5.3

Expected dividend yield
0
%
 
0
%
 
0
%
Annual prevesting forfeiture rate
9
%
 
9
%
 
9
%
Schedule of Share-based Compensation, Stock Options, Activity 
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 at December 30, 2011
1,558,771

 
$
23.42

 
 
 
 
Granted
395,978

 
22.19

 
 
 
 
Exercised
(52,683
)
 
20.77

 
 
 
 
Forfeited or expired
(126,219
)
 
24.21

 
 
 
 
Outstanding at December 28, 2012
1,775,847

 
23.17

 
 
 
 
Granted
372,676

 
23.33

 
 
 
 
Exercised
(443,428
)
 
23.24

 
 
 
 
Forfeited or expired
(88,686
)
 
28.05

 
 
 
 
Outstanding at January 3, 2014
1,616,409

 
22.92

 
 
 
 
Granted
183,571

 
43.84

 
 
 
 
Exercised
(295,203
)
 
23.42

 
 
 
 
Forfeited or expired
(33,279
)
 
27.82

 
 
 
 
Outstanding at January 2, 2015
1,471,498

 
$
25.32

 
6.1
 
$
34.3

Expected to vest at January 2, 2015
1,447,519

 
$
25.10

 
6.1
 
$
34.1

Exercisable at January 2, 2015
1,278,765

 
$
23.88

 
5.8
 
$
31.7


 

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 at December 30, 2011
478,364

 
$
24.44

 
 
 
 
Exercised
(7,657
)
 
22.04

 
 
 
 
Forfeited or expired
(185,782
)
 
26.35

 
 
 
 
Outstanding at December 28, 2012
284,925

 
23.26

 
 
 
 
Exercised
(107,664
)
 
23.23

 
 
 
 
Forfeited or expired
—

 
—

 
 
 
 
Outstanding at January 3, 2014
177,261

 
23.27

 
 
 
 
Exercised
(58,422
)
 
23.35

 
 
 
 
Forfeited or expired
—

 
—

 
 
 
 
Outstanding at January 2, 2015
118,839

 
$
23.24

 
3.0
 
$
3.0

Expected to vest at January 2, 2015
118,839

 
$
23.24

 
3.0
 
$
3.0

Exercisable at January 2, 2015
118,839

 
$
23.24

 
3.0
 
$
3.0

Schedule Of Stock Option Exercise Information 
The following table provides certain information relating to the exercise of stock options (in thousands):
 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Intrinsic value
$
7,997

 
$
6,807

 
$
148

Cash received
8,278

 
12,807

 
1,263

Tax benefit (expense) realized
1,704

 
727

 
(132
)
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity 
The following table summarizes performance-vested restricted stock and stock unit activity related to the Company’s plans: 
 
Performance-
Vested
Activity
 
Weighted
Average
Fair Value
Nonvested at December 30, 2011
529,743

 
$
16.68

Granted
332,918

 
15.30

Vested
(15,500
)
 
24.64

Forfeited
(64,715
)
 
15.72

Nonvested at December 28, 2012
782,446

 
16.02

Granted
318,169

 
15.86

Vested
(49,139
)
 
14.68

Forfeited
(271,798
)
 
14.94

Nonvested at January 3, 2014
779,678

 
16.41

Granted
186,825

 
31.33

Vested
(221,470
)
 
18.51

Forfeited
(28,870
)
 
18.42

Nonvested at January 2, 2015
716,163

 
$
19.57

The following table summarizes time-vested restricted stock and unit activity:
 
Time-Vested
Activity
 
Weighted
Average
Fair Value
Nonvested at December 30, 2011
69,942

 
$
22.69

Granted
92,265

 
23.49

Vested
(74,901
)
 
22.83

Forfeited
(7,037
)
 
22.56

Nonvested at December 28, 2012
80,269

 
23.48

Granted
67,230

 
26.76

Vested
(74,062
)
 
23.93

Forfeited
(5,862
)
 
22.26

Nonvested at January 3, 2014
67,575

 
26.37

Granted
63,817

 
44.78

Vested
(53,568
)
 
34.16

Forfeited
(9,992
)
 
35.30

Nonvested at January 2, 2015
67,832

 
$
36.22

Research, Development and Engineering Costs (Tables)
Schedule Of Research And Development Expense Details
Research, Development and Engineering Costs, Net are comprised of the following (in thousands):
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Research, development and engineering costs
$
58,974

 
$
62,652

 
$
62,848

Less: cost reimbursements
(9,129
)
 
(8,575
)
 
(10,358
)
Total research, development and engineering costs, net
$
49,845

 
$
54,077

 
$
52,490

 
 
 
 
 
 
Other Operating Expenses, Net (Tables)
Schedule of Other Operating Cost and Expense, by Component 
Other Operating Expenses, Net is comprised of the following (in thousands):
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
2014 investments in capacity and capabilities
$
8,925

 
$
—

 
$
—

2013 operating unit realignment
1,017

 
5,625

 
—

Orthopaedic facilities optimization
1,317

 
8,038

 
32,482

Medical device facility optimization
11

 
312

 
1,525

ERP system upgrade (income) costs
(82
)
 
783

 
5,041

Acquisition and integration (income) costs
3

 
(502
)
 
1,460

Asset dispositions, severance and other
4,106

 
1,534

 
1,838

Total other operating expenses, net
$
15,297

 
$
15,790

 
$
42,346

Schedule of Restructuring Reserve by Type of Cost 
The change in accrued liabilities related to the 2014 investments in capacity and capabilities is as follows (in thousands):
 
Severance and Retention
 
Accelerated
Depreciation/
Asset Write-offs
 
Other
 
Total
At January 3, 2014
$
—

 
$
—

 
$
—

 
$
—

Restructuring charges
2,209

 
33

 
6,683

 
8,925

Write-offs
—

 
(33
)
 
—

 
(33
)
Cash payments
(1,046
)
 
—

 
(5,617
)
 
(6,663
)
At January 2, 2015
$
1,163

 
$
—

 
$
1,066

 
$
2,229

Schedule of Restructuring Reserve by Type of Cost 
Other costs primarily consist of relocation, recruitment and travel expenditures. The change in accrued liabilities related to the 2013 operating unit realignment is as follows (in thousands):
 
Severance and Retention
 
Other
 
Total
At January 3, 2014
$
465

 
$
746

 
$
1,211

Restructuring charges
849

 
168

 
1,017

Cash payments
(1,314
)
 
(914
)
 
(2,228
)
At January 2, 2015
$
—

 
$
—

 
$
—

Schedule of Restructuring Reserve by Type of Cost 
The change in accrued liabilities related to the orthopaedic facilities optimizations is as follows (in thousands):
 
Severance
and
Retention
 
Accelerated
Depreciation/
Asset Write-offs
 
Other
 
Total
At January 3, 2014
$
—

 
$
—

 
$
857

 
$
857

Restructuring charges (income), net
—

 
(2,255
)
 
3,572

 
1,317

Write-offs
—

 
(400
)
 
—

 
(400
)
Cash receipts (payments)
—

 
2,655

 
(4,142
)
 
(1,487
)
At January 2, 2015
$
—

 
$
—

 
$
287

 
$
287

Schedule of Restructuring Reserve by Type of Cost 
The change in accrued liabilities related to the medical device facility optimization is as follows (in thousands):
 
Production
Inefficiencies,
Moving and
Revalidation
 
Personnel
 
Other
 
Total
At January 3, 2014
$
—

 
$
—

 
$
—

 
$
—

Restructuring charges
—

 
1

 
10

 
11

Cash payments
—

 
(1
)
 
(10
)
 
(11
)
At January 2, 2015
$
—

 
$
—

 
$
—

 
$
—

Schedule of Restructuring Reserve by Type of Cost 
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
At January 3, 2014
$
—

 
$
—

 
$
—

Restructuring income
(82
)
 
—

 
(82
)
Cash receipts
82

 
—

 
82

At January 2, 2015
$
—

 
$
—

 
$
—

Income Taxes (Tables)
Schedule of Income before Income Tax, Domestic and Foreign 
The U.S. and international components of income before provision for income taxes were as follows (in thousands):
 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
U.S.
$
56,801

 
$
42,392

 
$
36,057

International
19,778

 
6,446

 
(29,327
)
Total income before provision for income taxes
$
76,579

 
$
48,838

 
$
6,730

Schedule of Components of Income Tax Expense (Benefit) 
The provision for income taxes was comprised of the following (in thousands):
 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Current:
 
 
 
 
 
Federal
$
16,293

 
$
39,353

 
$
4,747

State
1,299

 
1,604

 
381

International
2,998

 
1,470

 
668

 
20,590

 
42,427

 
5,796

Deferred:
 
 
 
 
 
Federal
1,211

 
(28,678
)
 
6,615

State
(310
)
 
427

 
175

International
(370
)
 
(1,605
)
 
(1,057
)
 
531

 
(29,856
)
 
5,733

Total provision for income taxes
$
21,121

 
$
12,571

 
$
11,529

Schedule of Effective Income Tax Rate Reconciliation 
The provision for income taxes differs from the U.S. statutory rate due to the following:
 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Statutory rate
35.0
 %
 
35.0
 %
 
35.0
 %
Federal tax credits
(2.1
)
 
(7.5
)
 
—

Foreign rate differential
(4.3
)
 
(0.7
)
 
50.7

Uncertain tax positions
0.6

 
1.7

 
(10.1
)
State taxes, net of federal benefit
0.7

 
2.3

 
4.9

Change in tax rate - loss of Swiss tax holiday
—

 
—

 
25.6

Change in foreign tax rates
(0.6
)
 
(3.7
)
 
—

Valuation allowance
(0.4
)
 
0.4

 
67.6

Other
(1.3
)
 
(1.8
)
 
(2.4
)
Effective tax rate
27.6
 %
 
25.7
 %
 
171.3
 %
Schedule of Deferred Tax Assets and Liabilities 
Deferred tax assets (liabilities) consist of the following (in thousands):
 
At
 
January 2,
2015
 
January 3,
2014
Tax credits
$
5,828

 
$
6,624

Net operating loss carryforwards
6,721

 
9,161

Inventories
3,335

 
4,202

Accrued expenses
4,338

 
4,303

Stock-based compensation
9,341

 
9,194

Other
1,659

 
573

Gross deferred tax assets
31,222

 
34,057

Less valuation allowance
(10,709
)
 
(11,661
)
Net deferred tax assets
20,513

 
22,396

Property, plant and equipment
(2,646
)
 
(2,254
)
Intangible assets
(57,850
)
 
(57,648
)
Convertible subordinated notes
(5,006
)
 
(6,178
)
Gross deferred tax liabilities
(65,502
)
 
(66,080
)
Net deferred tax liability
$
(44,989
)
 
$
(43,684
)
Presented as follows:
 
 
 
Current deferred tax asset
$
6,168

 
$
6,008

Current deferred tax liability
(588
)
 
(613
)
Noncurrent deferred tax asset
2,626

 
2,933

Noncurrent deferred tax liability
(53,195
)
 
(52,012
)
Net deferred tax liability
$
(44,989
)
 
$
(43,684
)
Summary of Operating Loss and Tax Credit Carryforwards 
As of January 2, 2015, the Company has the following carryforwards available:
Jurisdiction
Tax
Attribute
 
Amount
(in millions)
 
 
Begin to
Expire
International
Net Operating Loss
 
48.0

(1)
 
2015
State
Net Operating Loss
 
37.6

(1)
 
Various
U.S. and State
R&D Tax Credit
 
0.7

(1)
 
Various
State
Investment Tax Credit
 
5.3

 
 
Various
(1) The utilization of certain net operating losses and credits is subject to an annual limitation under Internal Revenue Code Section 382.
Summary of Income Tax Contingencies 
Below is a summary of changes to the unrecognized tax benefit (in thousands):
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Balance, beginning of year
$
1,858

 
$
970

 
$
1,580

Additions based upon tax positions related to the current year
268

 
325

 
—

Additions related to prior period tax positions
510

 
651

 
210

Reductions relating to settlements with tax authorities
(225
)
 
(88
)
 
(522
)
Reductions as a result of a lapse of applicable statute of limitations
—

 
—

 
(298
)
Balance, end of year
$
2,411

 
$
1,858

 
$
970

Commitments and Contingencies (Tables)
Schedule of Product Warranty Liability 
The change in product warranty liability was comprised of the following (in thousands):
 
Year Ended
 
January 2,
2015
 
January 3,
2014
Beginning balance
$
1,819

 
$
2,626

Additions to warranty reserve
953

 
1,624

Warranty claims paid
(2,112
)
 
(2,431
)
Ending balance
$
660

 
$
1,819

Operating Leases of Lessee Disclosure 
Operating lease expense was as follows (in thousands):
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Operating lease expense
$
4,281

 
$
4,379

 
$
4,024

Schedule of Future Minimum Rental Payments for Operating Leases 
Minimum future estimated annual operating lease expenses are as follows (in thousands):
2015
$
5,797

2016
5,952

2017
3,908

2018
3,489

2019
3,418

Thereafter
13,938

Total estimated operating lease expense
$
36,502

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance 
The impact to the Company’s results of operations from these forward contracts was as follows (in thousands): 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Reduction in Cost of Sales
$
(168
)
 
$
(1,154
)
 
$
(79
)
Ineffective portion of change in fair value
—

 
—

 
—

Schedule of Foreign Exchange Contracts, Statement of Financial Position 
Information regarding outstanding foreign currency contracts as of January 2, 2015 is as follows (dollars in thousands): 
Instrument
Type of
Hedge
 
Aggregate
Notional
Amount
 
Start
Date
 
End
Date
 
$/Peso
 
Fair
Value
 
Balance Sheet
Location
FX Contract
Cash flow
 
$
16,880

 
Jan-15
 
Dec-15
 
0.0734

 
$
(1,568
)
 
Accrued Expenses
Earnings (Loss) Per Share (Tables)
Schedule of Earnings Per Share, Basic and Diluted 
The following table illustrates the calculation of Basic and Diluted EPS (in thousands, except per share amounts): 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Numerator for basic EPS:
 
 
 
 
 
Net income (loss)
$
55,458

 
$
36,267

 
$
(4,799
)
Denominator for basic EPS:
 
 
 
 
 
Weighted average shares outstanding
24,825

 
23,991

 
23,584

Effect of dilutive securities:
 
 
 
 
 
Stock options, restricted stock and restricted stock units
1,150

 
1,332

 
—

Denominator for diluted EPS
25,975

 
25,323

 
23,584

Basic EPS
$
2.23

 
$
1.51

 
$
(0.20
)
Diluted EPS
$
2.14

 
$
1.43

 
$
(0.20
)
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share 
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:
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Time-vested stock options, restricted stock and restricted stock units
175,549

 
18,480

 
2,142,000

Performance-vested stock options and restricted stock units
—

 
—

 
781,000

Accumulated Other Comprehensive Income (Tables)
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Schedule of Accumulated Other Comprehensive Income (Loss)
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
At January 3, 2014
$
(672
)
 
$
(468
)
 
$
14,952

 
$
13,812

 
$
546

 
$
14,358

Unrealized loss on cash flow hedges
—

 
(2,372
)
 
—

 
(2,372
)
 
829

 
(1,543
)
Realized gain on foreign currency hedges
—

 
(168
)
 
—

 
(168
)
 
59

 
(109
)
Realized loss on interest rate swap hedges
—

 
450

 
—

 
450

 
(157
)
 
293

Net defined benefit plan liability adjustments
(509
)
 
—

 
—

 
(509
)
 
135

 
(374
)
Foreign currency translation loss
—

 
—

 
(3,502
)
 
(3,502
)
 
—

 
(3,502
)
At January 2, 2015
$
(1,181
)
 
$
(2,558
)
 
$
11,450

 
$
7,711

 
$
1,412

 
$
9,123

Schedule of Accumulated Other Comprehensive Income (Loss)

 
Defined
Benefit
Plan
Liability
 
Cash
Flow
Hedges
 
Foreign
Currency
Translation
Adjustment
 
Total
Pre-Tax
Amount
 
Tax
 
Net-of-Tax
Amount
At December 28, 2012
$
(962
)
 
$
120

 
$
13,431

 
$
12,589

 
$
358

 
$
12,947

Unrealized gain on cash flow hedges
—

 
58

 
—

 
58

 
(20
)
 
38

Realized gain on foreign currency hedges
—

 
(1,154
)
 
—

 
(1,154
)
 
404

 
(750
)
Realized loss on interest rate swap hedges
—

 
508

 
—

 
508

 
(178
)
 
330

Net defined benefit plan liability adjustments
290

 
—

 
—

 
290

 
(18
)
 
272

Foreign currency translation gain
—

 
—

 
1,521

 
1,521

 
—

 
1,521

At January 3, 2014
$
(672
)
 
$
(468
)
 
$
14,952

 
$
13,812

 
$
546

 
$
14,358

Fair Value (Tables)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation 
Changes in accrued contingent consideration were as follows (in thousands): 
At December 28, 2012
$
1,530

Fair value adjustments
(690
)
At January 3, 2014
840

Fair value adjustments
(840
)
At January 2, 2015
$
—

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis 
The following tables provide information regarding assets and liabilities recorded at fair value on a recurring basis (in thousands):
 
Fair Value Measurements Using
Description
At January 2, 2015
 
Quoted
Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Liabilities
 
 
 
 
 
 
 
Foreign currency contracts (Note 15)
$
1,568

 
$
—

 
$
1,568

 
$
—

Interest rate swaps (Note 9)
990

 
—

 
990

 
—

 
 
Fair Value Measurements Using
Description
At January 3,
2014
 
Quoted
Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Liabilities
 
 
 
 
 
 
 
Foreign currency contracts
$
140

 
$
—

 
$
140

 
$
—

Accrued contingent consideration
840

 
—

 
—

 
840

Interest rate swap
328

 
—

 
328

 
—

Fair Value Measurements, Nonrecurring 
The following table provides information regarding assets and liabilities recorded at fair value on a nonrecurring basis as of January 2, 2015. There were no such assets or liabilities as of January 3, 2014 (in thousands): 
 
Fair Value Measurements Using
Description
At January 2, 2015
 
Quoted
Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets
 
 
 
 
 
 
 
Assets Held for Sale (Note 5)
$
1,635

 
$
—

 
$
1,635

 
$
—

Business Segment, Geographic and Concentration Risk Information (Tables)
Reconciliation of Revenue from Segments to Consolidated 
Sales by geographic area are presented by allocating sales from external customers based on where the products are shipped to (in thousands): 
 
Year Ended
Sales:
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Greatbatch Medical
 
 
 
 
 
Cardiac/Neuromodulation
$
321,419

 
$
325,412

 
$
306,669

Orthopaedics
147,296

 
130,247

 
122,061

Portable Medical
69,043

 
78,743

 
81,659

Vascular
58,770

 
48,357

 
51,980

Energy, Military, Environmental
81,757

 
78,143

 
81,353

Total Greatbatch Medical
678,285

 
660,902

 
643,722

QiG
9,502

 
3,043

 
2,455

Total sales
$
687,787

 
$
663,945

 
$
646,177

Reconciliation of Operating Profit (Loss) from Segments to Consolidated 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Segment income (loss) from operations:
 
 
 
 
 
Greatbatch Medical
$
126,312

 
$
111,805

 
$
79,093

QiG
(23,256
)
 
(30,484
)
 
(32,554
)
Total segment income from operations
103,056

 
81,321

 
46,539

Unallocated operating expenses
(27,402
)
 
(19,982
)
 
(20,718
)
Operating income as reported
75,654

 
61,339

 
25,821

Unallocated other income (expense), net
925

 
(12,501
)
 
(19,091
)
Income before provision for income taxes as reported
$
76,579

 
$
48,838

 
$
6,730

Reconciliation Of Depreciation And Amortization By Reportable Segment To Consolidated 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Depreciation and Amortization:
 
 
 
 
 
Greatbatch Medical
$
31,906

 
$
31,112

 
$
39,820

QiG
2,101

 
1,539

 
630

Total depreciation and amortization included in segment income from operations
34,007

 
32,651

 
40,450

Unallocated depreciation and amortization
4,223

 
9,681

 
18,475

Total depreciation and amortization
$
38,230

 
$
42,332

 
$
58,925

Schedule Of Expenditures For Tangible Long-Lived Assets By Segment 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Expenditures for tangible long-lived assets, excluding acquisitions:
 
 
 
 
 
Greatbatch Medical
$
19,006

 
$
13,242

 
$
33,249

QiG
1,453

 
2,134

 
3,208

Total reportable segments
20,459

 
15,376

 
36,457

Unallocated long-lived tangible assets
5,187

 
2,798

 
4,709

Total expenditures
$
25,646

 
$
18,174

 
$
41,166

Reconciliation of Assets from Segment to Consolidated 
 
At
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Identifiable assets:
 
 
 
 
 
Greatbatch Medical
$
761,225

 
$
758,369

 
$
779,890

QiG
76,529

 
56,245

 
57,750

Total reportable segments
837,754

 
814,614

 
837,640

Unallocated assets
118,255

 
76,089

 
52,235

Total assets
$
956,009

 
$
890,703

 
$
889,875

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas 
 
Year Ended
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Sales by geographic area:
 
 
 
 
 
United States
$
312,539

 
$
325,090

 
$
330,537

Non-Domestic locations:
 
 
 
 
 
Puerto Rico
127,702

 
117,961

 
105,731

Belgium
65,308

 
67,155

 
58,043

Rest of world
182,238

 
153,739

 
151,866

Total sales
$
687,787

 
$
663,945

 
$
646,177

 
 
At
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
Long-lived tangible assets:
 
 
 
 
 
United States
$
113,851

 
$
116,484

 
$
123,104

Rest of world
31,074

 
29,289

 
27,789

Total
$
144,925

 
$
145,773

 
$
150,893

Schedule of Revenue by Major Customers by Reporting Segments 
A significant portion of the Company’s sales and accounts receivable were to four customers as follows: 
 
Sales
 
Accounts Receivable
 
Year Ended
 
At
 
January 2,
2015
 
January 3,
2014
 
December 28,
2012
 
January 2,
2015
 
January 3,
2014
Customer A
18
%
 
20
%
 
19
%
 
4
%
 
8
%
Customer B
18
%
 
16
%
 
16
%
 
23
%
 
19
%
Customer C
12
%
 
13
%
 
11
%
 
8
%
 
8
%
Customer D
6
%
 
7
%
 
6
%
 
12
%
 
11
%
 
54
%
 
56
%
 
52
%
 
47
%
 
46
%
Quarterly Sales and Earnings Data - Unaudited (Tables)
Schedule of Quarterly Financial Information
 
4th Qtr.
 
3rd Qtr.
 
2nd Qtr.
 
1st Qtr.
 
(in thousands, except per share data)
2014
 
 
 
 
 
 
 
Sales
$
169,726

 
$
171,699

 
$
172,081

 
$
174,281

Gross profit
57,214

 
58,118

 
58,470

 
57,596

Net income
14,176

 
14,012

 
12,348

 
14,922

EPS—basic
0.57

 
0.56

 
0.50

 
0.61

EPS—diluted
0.54

 
0.54

 
0.48

 
0.58

 
 
 
 
 
 
 
 
2013
 
 
 
 
 
 
 
Sales
$
176,619

 
$
167,730

 
$
171,331

 
$
148,265

Gross profit
57,385

 
55,877

 
57,302

 
48,749

Net income
9,781

 
11,071

 
9,752

 
5,663

EPS—basic
0.40

 
0.46

 
0.41

 
0.24

EPS—diluted
0.38

 
0.44

 
0.39

 
0.23

Summary of Significant Accounting Policies (Basis of Presentation) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Jan. 2, 2015
customer
Segment
Jan. 3, 2014
Dec. 28, 2012
Schedule of Assets Useful Life [Line Items]
 
 
 
Number of Reportable Segments
2 
 
 
Number of Customers
4 
 
 
Weeks In Reporting Period
Fifty-two 
Fifty-three 
Fifty-two 
Customer Supplied Components Excluded From Revenue
$ 48.1 
$ 45.3 
$ 32.6 
Foreign Currency Transaction Gain (Loss), Realized
$ 1.3 
$ (0.1)
$ (0.3)
Patented Technology [Member] |
Minimum [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Finite-Lived Intangible Asset, Useful Life
5 years 
 
 
Patented Technology [Member] |
Maximum [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Finite-Lived Intangible Asset, Useful Life
15 years 
 
 
Customer Lists [Member] |
Minimum [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Finite-Lived Intangible Asset, Useful Life
7 years 
 
 
Customer Lists [Member] |
Maximum [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Finite-Lived Intangible Asset, Useful Life
20 years 
 
 
Other Intangible Assets [Member] |
Minimum [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Finite-Lived Intangible Asset, Useful Life
1 year 
 
 
Other Intangible Assets [Member] |
Maximum [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Finite-Lived Intangible Asset, Useful Life
10 years 
 
 
Building and Building Improvements [Member] |
Minimum [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Property, Plant and Equipment, Useful Life
7 years 
 
 
Building and Building Improvements [Member] |
Maximum [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Property, Plant and Equipment, Useful Life
40 years 
 
 
Machinery and Equipment [Member] |
Minimum [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Property, Plant and Equipment, Useful Life
3 years 
 
 
Machinery and Equipment [Member] |
Maximum [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Property, Plant and Equipment, Useful Life
8 years 
 
 
Office Equipment [Member] |
Minimum [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Property, Plant and Equipment, Useful Life
3 years 
 
 
Office Equipment [Member] |
Maximum [Member]
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
Property, Plant and Equipment, Useful Life
10 years 
 
 
Acquisitions (Narrative) (Details) (USD $)
0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Aug. 12, 2014
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Jan. 2, 2015
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Aug. 12, 2014
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Aug. 12, 2014
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Technology-Based Intangible Assets [Member]
Aug. 12, 2014
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Customer Lists [Member]
Aug. 12, 2014
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Trademarks and Trade Names [Member]
Feb. 16, 2012
Neuro Nexus Technologies Inc [Member]
Dec. 28, 2012
Neuro Nexus Technologies Inc [Member]
Feb. 16, 2012
Neuro Nexus Technologies Inc [Member]
Feb. 16, 2012
Neuro Nexus Technologies Inc [Member]
Patented Technology [Member]
Feb. 16, 2012
Neuro Nexus Technologies Inc [Member]
In Process Research And Development [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective date of acquisition
 
 
 
Aug. 12, 2014 
 
 
 
 
 
Feb. 16, 2012 
 
 
 
 
Name of acquired entity
 
 
 
Centro de Construcción de Cardioestimuladores del Uruguay (“CCC”) 
 
 
 
 
 
NeuroNexus Technologies, Inc. 
 
 
 
 
Description of acquired entity
 
 
 
CCC is an active implantable neuromodulation medical device systems developer and manufacturer that produces a range of medical devices including implantable pulse generators, programmer systems, battery chargers, patient wands and leads.  
 
 
 
 
 
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. 
 
 
 
 
Reason for acquisition
 
 
 
This acquisition allows the Company to more broadly partner with medical device companies, complements the Company’s core discrete technology offerings and enhances the Company’s medical device innovation efforts.  
 
 
 
 
 
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. 
 
 
 
 
Total revenue included from the acquired entity
 
 
 
 
$ 5,800,000 
 
 
 
 
 
$ 2,500,000 
 
 
 
Total net income included from the acquired entity
 
 
 
 
1,200,000 
 
 
 
 
 
(200,000)
 
 
 
Cash paid
 
 
 
19,800,000 
 
 
 
 
 
11,700,000 
 
 
 
 
Potential future payments (maximum)
 
 
 
 
 
 
 
 
 
 
 
2,000,000 
 
 
Contingent consideration liability
0 
840,000 
1,530,000 
 
 
 
 
 
 
 
 
1,500,000 
 
 
Increase in inventory
 
 
 
 
 
300,000 
 
 
 
 
 
 
 
 
Royalty rate
 
 
 
 
 
 
3.00% 
 
0.50% 
 
 
 
 
 
Customer annual attrition rate
 
 
 
 
 
 
 
15.00% 
 
 
 
 
 
 
Minimum royalty rate assumed, acquired finite lived intangible assets
 
 
 
 
 
 
 
 
 
 
 
 
2.00% 
 
Maximum royalty rate assumed, acquired finite lived intangible assets
 
 
 
 
 
 
 
 
 
 
 
 
6.00% 
 
Estimated cost to complete in process research and development programs acquired
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 1,500,000 
Acquisitions (Details 1) (USD $)
In Thousands, unless otherwise specified
Jan. 2, 2015
Jan. 3, 2014
Aug. 12, 2014
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Feb. 16, 2012
Neuro Nexus Technologies Inc [Member]
Assets acquired
 
 
 
 
Current assets
 
 
$ 10,670 
$ 618 
Property, plant and equipment
 
 
1,131 
35 
Amortizing intangible assets
 
 
6,100 
2,927 
Indefinite-lived intangible assets
 
 
 
540 
Goodwill
354,393 
346,656 
8,296 
8,924 
Other assets
 
 
 
1,576 
Total assets acquired
 
 
26,197 
14,620 
Liabilities assumed
 
 
 
 
Current liabilities
 
 
4,842 
420 
Deferred income taxes
 
 
1,590 
989 
Total liabilities assumed
 
 
6,432 
1,409 
Net assets acquired
 
 
$ 19,765 
$ 13,211 
Acquisitions (Details 2) (USD $)
In Thousands, unless otherwise specified
0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended
Aug. 12, 2014
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Aug. 12, 2014
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Feb. 16, 2012
Neuro Nexus Technologies Inc [Member]
Feb. 16, 2012
Neuro Nexus Technologies Inc [Member]
Aug. 12, 2014
Patented Technology [Member]
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Aug. 12, 2014
Patented Technology [Member]
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Feb. 16, 2012
Patented Technology [Member]
Neuro Nexus Technologies Inc [Member]
Feb. 16, 2012
Patented Technology [Member]
Neuro Nexus Technologies Inc [Member]
Aug. 12, 2014
Customer Lists [Member]
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Aug. 12, 2014
Customer Lists [Member]
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Feb. 16, 2012
Customer Lists [Member]
Neuro Nexus Technologies Inc [Member]
Feb. 16, 2012
Customer Lists [Member]
Neuro Nexus Technologies Inc [Member]
Aug. 12, 2014
Trademarks and Trade Names [Member]
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Aug. 12, 2014
Trademarks and Trade Names [Member]
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortizing intangible assets
 
$ 6,100 
 
$ 2,927 
 
$ 1,400 
 
$ 1,058 
 
$ 4,600 
 
$ 1,869 
 
$ 100 
Weighted Average Amortization Period (Years)
10 years 
 
7 years 
 
10 years 
 
6 years 
 
10 years 
 
7 years 
 
2 years 
 
Weighted Average Useful Life (Years)
 
 
13 years 
 
 
 
10 years 
 
 
 
15 years 
 
 
 
Weighted Average Discount Rate
18.00% 
 
13.00% 
 
18.00% 
 
14.00% 
 
18.00% 
 
13.00% 
 
18.00% 
 
Acquisitions (Acquired Indefinite-lived Intangible Assets) (Details) (Neuro Nexus Technologies Inc [Member], In Process Research And Development [Member], USD $)
In Thousands, unless otherwise specified
0 Months Ended
Feb. 16, 2012
Neuro Nexus Technologies Inc [Member] |
In Process Research And Development [Member]
 
Acquired Indefinite-lived Intangible Assets [Line Items]
 
Indefinite-lived assets acquired
$ 540 
Weighted Average Useful Life (Years)
12 years 
Weighted Average Discount Rate
26.00% 
Acquisitions (Pro Forma Information) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Business Acquisition, Pro Forma Information [Abstract]
 
 
 
Sales
$ 696,357 
$ 677,657 
$ 646,617 
Net income (loss)
$ 56,453 
$ 37,612 
$ (4,973)
Basic earnings per share (in dollars per share)
$ 2.27 
$ 1.57 
$ (0.21)
Diluted earnings per share (in dollars per share)
$ 2.17 
$ 1.49 
$ (0.21)
Supplemental Cash Flow Information (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Noncash investing and financing activities:
 
 
 
Common stock contributed to 401(k) Plan
$ 4,341 
$ 2,477 
$ 4,793 
Property, plant and equipment purchases included in accounts payable
2,926 
2,103 
2,522 
Cash paid during the year for:
 
 
 
Interest
3,521 
4,989 
6,230 
Income taxes
13,565 
44,165 
4,909 
Acquisition of noncash assets
22,434 
0 
14,396 
Liabilities assumed
$ 6,432 
$ 0 
$ 1,244 
Inventories (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 2, 2015
Jan. 3, 2014
Inventory Disclosure [Abstract]
 
 
Raw materials
$ 73,354 
$ 67,939 
Work-in-process
38,930 
36,670 
Finished goods
16,958 
13,749 
Inventories
$ 129,242 
$ 118,358 
Assets Held For Sale (Details) (Building [Member], Swiss Orthopaedic Product Line [Member], Greatbatch Medical [Member], USD $)
In Thousands, unless otherwise specified
Jan. 2, 2015
Jan. 3, 2014
Building [Member] |
Swiss Orthopaedic Product Line [Member] |
Greatbatch Medical [Member]
 
 
Assets Held For Sale Detail [Line Items]
 
 
Current assets held-for-sale
$ 1,635 
$ 0 
Assets Held For Sale (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Jan. 2, 2015
Orthopaedic Facility Optimization [Member]
Jan. 2, 2015
Orthopaedic Facility Optimization [Member]
Assets Held For Sale Detail [Line Items]
 
 
 
 
 
Assets Held for Sale (Note 5)
 
 
 
 
$ 2.1 
Impairment of Long-Lived Assets to be Disposed of
$ 0.4 
$ 0.9 
$ 3.6 
$ 0.4 
 
Property, Plant and Equipment, Net (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
$ 358,945 
$ 341,857 
 
Accumulated depreciation
(214,020)
(196,084)
 
Total
144,925 
145,773 
150,893 
Machinery and Equipment [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
167,173 
159,542 
 
Building and Building Improvements [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
89,258 
87,359 
 
Computer Equipment [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
31,725 
28,010 
 
Leasehold Improvements [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
31,170 
31,522 
 
Furniture and Fixtures [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
14,045 
13,889 
 
Land and Land Improvements [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
10,816 
13,016 
 
Construction in Progress [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
14,129 
7,886 
 
Other Capitalized Property Plant and Equipment [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
$ 629 
$ 633 
 
Property, Plant and Equipment, Net (Depreciation Expense) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Property, Plant and Equipment [Abstract]
 
 
 
Depreciation
$ 23,320 
$ 22,799 
$ 31,575 
Intangible Assets (Narrative) (Details) (USD $)
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
 
 
Contingent Liability From Intangible Asset Purchase
 
$ 4,000,000 
Reversal of Contingent Liability From Intangible Asset Purchase
3,000,000 
 
Goodwill, Impaired, Accumulated Impairment Loss
$ 0 
 
Intangible Assets (Amortizing Intangible Assets) (Details) (USD $)
Jan. 2, 2015
Jan. 3, 2014
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
$ 173,167,000 
$ 170,067,000 
Accumulated Amortization
(111,973,000)
(98,096,000)
Foreign Currency Translation
4,143,000 
4,151,000 
Net Carrying Amount
65,337,000 
76,122,000 
Purchased Technology And Patents [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
95,776,000 
97,376,000 
Accumulated Amortization
(75,894,000)
(69,026,000)
Foreign Currency Translation
1,966,000 
1,980,000 
Net Carrying Amount
21,848,000 
30,330,000 
Customer Lists [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
72,857,000 
68,257,000 
Accumulated Amortization
(31,460,000)
(24,671,000)
Foreign Currency Translation
1,374,000 
1,367,000 
Net Carrying Amount
42,771,000 
44,953,000 
Other Intangible Assets [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
4,534,000 
4,434,000 
Accumulated Amortization
(4,619,000)
(4,399,000)
Foreign Currency Translation
803,000 
804,000 
Net Carrying Amount
$ 718,000 
$ 839,000 
Intangible Assets (Amortization Expense by categories) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Finite-Lived Intangible Assets [Line Items]
 
 
 
Amortization of Intangible Assets
$ 13,877 
$ 13,167 
$ 14,261 
Cost of Sales [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Amortization of Intangible Assets
6,201 
6,822 
7,489 
Selling, General and Administrative Expenses [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Amortization of Intangible Assets
7,009 
5,800 
6,227 
Research and Development Expense [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Amortization of Intangible Assets
$ 667 
$ 545 
$ 545 
Intangible Assets (Future Amortization Expense) (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 2, 2015
Jan. 3, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
 
 
2015
$ 12,988 
 
2016
10,676 
 
2017
9,520 
 
2018
7,232 
 
2019
5,431 
 
Thereafter
19,490 
 
Net Carrying Amount
$ 65,337 
$ 76,122 
Intangible Assets (Change in Indefinite-lived Assets and Goodwill) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 2, 2015
Greatbatch Medical [Member]
Jan. 2, 2015
QiG [Member]
Jan. 2, 2015
Trademarks and Trade Names [Member]
Jan. 3, 2014
Trademarks and Trade Names [Member]
Indefinite-lived Intangible Assets [Roll Forward]
 
 
 
 
 
Indefinite-lived intangible assets, beginning
$ 20,288 
 
 
$ 20,288 
$ 20,288 
Indefinite-lived intangible assets, ending
20,288 
 
 
20,288 
20,288 
Goodwill [Roll Forward]
 
 
 
 
 
Goodwill, beginning
346,656 
304,856 
41,800 
 
 
Goodwill acquired
8,296 
0 
8,296 
 
 
Foreign currency translation
(559)
(559)
0 
 
 
Goodwill, ending
$ 354,393 
$ 304,297 
$ 50,096 
 
 
Accrued Expenses (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 2, 2015
Jan. 3, 2014
Accounts Payable and Accrued Liabilities [Abstract]
 
 
Salaries and benefits
$ 20,770 
$ 16,311 
Profit sharing and bonuses
18,524 
19,808 
Warranty
660 
1,819 
Other
8,430 
6,743 
Total
$ 48,384 
$ 44,681 
Debt (Schedule of Long-Term Debt) (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 2, 2015
Jan. 3, 2014
Debt Disclosure [Abstract]
 
 
Term Loan
$ 187,500 
$ 197,500 
Line of Credit Facility, Amount Outstanding
0 
0 
Long-term Debt
187,500 
197,500 
Current portion of long-term debt
11,250 
0 
Long-term debt
$ 176,250 
$ 197,500 
Debt (Credit Facility Details) (Details 1) (USD $)
In Millions, unless otherwise specified
1 Months Ended 12 Months Ended
Sep. 30, 2013
Jan. 2, 2015
Line of Credit Facility [Abstract]
 
 
Credit Facility, Amendment Date
Sep. 20, 2013 
 
Line of Credit Facility, Maximum Borrowing Capacity
$ 300 
 
Term Loan, Maximum Borrowing Capacity
200 
 
Letter of Credit Subfacility Maximum Borrowing Capacity
15 
 
Swingline Subfacility Maximum Borrowing Capacity
15 
 
Credit Facility Borrowing Capacity Increase
200 
 
Line of Credit Facility, Expiration Date
Sep. 20, 2018 
 
Line Of Credit Expiration Date Extension
Sep. 20, 2019 
 
Debt Instrument, Maturity Date
Sep. 20, 2019 
 
Debt Instrument, Collateral
 
The Credit Facility is secured by the Company’s non-realty assets including cash, accounts receivable and inventories. 
Interest Margin Above Prime Minimum Credit Facility
0.00% 
 
Interest Margin Above Prime Maximum Credit Facility
0.75% 
 
Interest Margin Above LIBOR Minimum Credit Facility
1.375% 
 
Interest Margin Above LIBOR Maximum Credit Facility
2.75% 
 
Interest Margin Above Prime Minimum Swingline
0.00% 
 
Interest Margin Above Prime Maximum Swingline
0.75% 
 
Line of Credit Facility Commitment Fee Percentage Minimum
0.175% 
 
Line of Credit Facility Commitment Fee Percentage Maximum
0.25% 
 
Credit Facility Aggregate Restricted Activities Limit
300 
 
Credit Facility Maximum Permitted Acquisitions
250 
 
Credit Facility Maximum Other Investment Purchases
100 
 
Credit Facility Maximum Stock Repurchases and Declare Dividends
150 
 
Credit Facility Maximum Foreign Subsidiary Investment
20 
 
Line of Credit, Adjustments to Limitations on Incurrence of Indebtedness, Maximum Leverage Ratio
2.75 
 
Credit Facility Restriction Available
 
100.00% 
Credit Facility Aggregate Restricted Activities Limit Remaining
 
277 
Credit Facility Maximum Permitted Acquisitions Remaining
 
230 
Credit Facility Maximum Oth Investment Purchases Remaining
 
97 
Line of Credit, Adjusted EBITDA to Interest Expense, Ratio Required
 
3.0 
Line of Credit, Leverage Ratio, Maximum
 
4.5 
Line of Credit, Leverage Ratio, Maximum, As of Covenant Restrictive Effective Date
 
4.25 
Total Leverage Covenant Restriction Effective Date
 
Jan. 02, 2016 
Debt Instrument, Covenant Compliance
 
As of Janaury 2, 2015, the Company was in compliance with all covenants under the Credit Facility. 
Debt, Weighted Average Interest Rate
 
1.57% 
Debt Instrument, Unused Borrowing Capacity, Amount
 
$ 300 
Debt (Convertible Notes and Interest Rate Swap Details) (Details 2) (USD $)
0 Months Ended 1 Months Ended 12 Months Ended
Feb. 20, 2013
Mar. 31, 2007
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Debt Instruments [Abstract]
 
 
 
 
 
Convertible Subordinated Debt
 
$ 197,800,000 
 
 
 
Debt Discount Percentage
 
5.00% 
 
 
 
Debt Instrument, Interest Rate, Stated Percentage
 
2.25% 
 
 
 
Debt Instrument, Interest Rate During Period
 
8.50% 
 
 
 
Debt Redemption Date
Feb. 20, 2013 
 
 
 
 
Derivative [Line Items]
 
 
 
 
 
Interest expense
 
 
4,252,000 
11,261,000 
18,054,000 
Interest Rate Swap [Member]
 
 
 
 
 
Derivative [Line Items]
 
 
 
 
 
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net
 
 
0 
0 
0 
Interest expense
 
 
500,000 
500,000 
0 
Interest Rate Swap 1 [Member]
 
 
 
 
 
Derivative [Line Items]
 
 
 
 
 
Interest Rate Swap Term
 
 
 
 
3 years 
Type of Hedge
 
 
Cash flow 
 
 
Notional Amount
 
 
100,000,000 
 
150,000,000 
Start Date
 
 
Feb. 20, 2013 
 
 
End Date
 
 
Feb. 22, 2016 
 
 
Derivative, Fixed Interest Rate
 
 
0.573% 
 
 
Derivative, Variable Interest Rate
 
 
0.155% 
 
 
Annual Notional Amortizing Amount
 
 
50,000,000 
 
 
Interest Rate Swap 1 [Member] |
Other Liabilities [Member]
 
 
 
 
 
Derivative [Line Items]
 
 
 
 
 
Fair Value
 
 
(125,000)
 
 
Interest Rate Swap 2 [Member]
 
 
 
 
 
Derivative [Line Items]
 
 
 
 
 
Type of Hedge
 
 
Cash flow 
 
 
Notional Amount
 
 
90,000,000 
 
 
Start Date
 
 
Feb. 20, 2015 
 
 
End Date
 
 
Sep. 20, 2019 
 
 
Derivative, Fixed Interest Rate
 
 
1.921% 
 
 
Annual Notional Amortizing Amount
 
 
10,000,000 
 
 
Notional amortizing start date
 
 
Feb. 21, 2017 
 
 
Interest Rate Swap 2 [Member] |
Other Liabilities [Member]
 
 
 
 
 
Derivative [Line Items]
 
 
 
 
 
Fair Value
 
 
(865,000)
 
 
Interest Rate Swap 2a [Member]
 
 
 
 
 
Derivative [Line Items]
 
 
 
 
 
Notional Amount
 
 
45,000,000 
 
 
Start Date
 
 
Feb. 20, 2015 
 
 
Interest Rate Swap 2b [Member]
 
 
 
 
 
Derivative [Line Items]
 
 
 
 
 
Notional Amount
 
 
$ 45,000,000 
 
 
Start Date
 
 
Feb. 22, 2016 
 
 
Debt (Contractual Interest and Discount Amortization) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Interest Costs Incurred [Abstract]
 
 
 
Contractual interest
$ 0 
$ 634 
$ 4,450 
Discount amortization
$ 0 
$ 5,368 
$ 11,464 
Debt (Long-term Debt Maturity Schedule) (Details 4) (USD $)
In Thousands, unless otherwise specified
Jan. 2, 2015
Jan. 3, 2014
Long-term Debt, Fiscal Year Maturity [Abstract]
 
 
2015
$ 11,250 
 
2016
16,250 
 
2017
20,000 
 
2018
20,000 
 
2019
120,000 
 
Long-term Debt
$ 187,500 
$ 197,500 
Debt (Deferred Financing Fees) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Deferred Finance Costs [Roll Forward]
 
 
Deferred Finance Costs, Net, Beginning Balance
$ 3,860 
$ 2,056 
Financing costs deferred
 
2,802 
Write-off during the period
 
(156)
Amortization during the period
(773)
(842)
Deferred Finance Costs, Net, Ending Balance
$ 3,087 
$ 3,860 
Benefit Plans (Narrative) (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Defined Contribution And Benefit Plan Disclosure [Line Items]
 
 
 
Defined Benefit Plan, Basis Points
0.50% 
 
 
Defined Contribution Plan Cash [Member]
 
 
 
Defined Contribution And Benefit Plan Disclosure [Line Items]
 
 
 
Defined Contribution Plan, Employer Matching Contribution, Percent
35.00% 
35.00% 
35.00% 
Defined Contribution Plan, Maximum Annual Contribution Per Employee, Percent
6.00% 
6.00% 
6.00% 
Defined Contribution Plan, Cost Recognized
$ 2.2 
$ 2.0 
$ 2.0 
Defined Contribution Plan Stock [Member]
 
 
 
Defined Contribution And Benefit Plan Disclosure [Line Items]
 
 
 
Defined Contribution Plan, Employer Matching Contribution, Percent
4.00% 
 
 
Defined Contribution Plan, Employer Discretionary Contribution Amount
4.2 
4.8 
1.9 
Shares Held In Employee Stock Plan
602,604 
 
 
Education Assistance Program [Member]
 
 
 
Defined Contribution And Benefit Plan Disclosure [Line Items]
 
 
 
Defined Contribution Plan, Cost Recognized
$ 1.9 
$ 2.0 
$ 2.2 
Benefit Plans (Change in projected benefit obligation) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
 
 
Projected benefit obligation at beginning of year
$ 2,422 
$ 16,215 
Service cost
203 
236 
Interest cost
75 
138 
Prior service cost and plan amendments
0 
(45)
Plan participants’ contribution
36 
134 
Actuarial (gain) loss
630 
(2)
Benefits transferred in, net
155 
434 
Settlement/curtailment gain
(337)
(14,539)
Foreign currency translation
(341)
(149)
Projected benefit obligation at end of year
$ 2,843 
$ 2,422 
Benefit Plans (Change in fair value of plan assets) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
 
 
Fair value of plan assets at beginning of year
$ 731 
$ 12,269 
Employer contributions (refund)
(39)
150 
Plan participants’ contribution
36 
134 
Actual loss on plan assets
(101)
(26)
Benefits transferred in, net
198 
138 
Settlements
(337)
(11,780)
Foreign currency translation
(51)
(154)
Fair value of plan assets at end of year
437 
731 
Projected benefit obligation in excess of plan assets at end of year
2,406 
1,691 
Defined benefit liability classified as other current liabilities
25 
25 
Defined benefit liability classified as long-term liabilities
2,381 
1,666 
Accumulated benefit obligation at end of year
$ 1,938 
$ 1,684 
Benefit Plans (Amount recognized in Accumulated Other Comprehensive Income) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]
 
 
 
Net loss occurring during the year
$ 736 
$ 25 
 
Amortization of losses
(138)
(722)
 
Prior service cost
(2)
150 
 
Amortization of prior service cost
(11)
33 
 
Foreign currency translation
(76)
224 
 
Pre-tax adjustment
509 
(290)
 
Taxes
(135)
18 
 
Net (gain) loss
$ 374 
$ (272)
$ (1,685)
Benefit Plans (Amortization to be recognized in Accumulated Other Comprehensive Income) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]
 
Amortization of net prior service credit
$ 11 
Amortization of net loss
$ 45 
Benefit Plans (Net Pension Costs) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]
 
 
Service cost
$ 203 
$ 236 
Interest cost
75 
138 
Settlements loss
105 
0 
Expected return on assets
(3)
0 
Recognized net actuarial loss (gain)
45 
(1,929)
Net pension cost (income)
$ 425 
$ (1,555)
Benefit Plans (Actuarial valuations) (Details)
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract]
 
 
 
Discount rate
2.30% 
3.40% 
 
Salary growth
3.00% 
3.10% 
 
Expected rate of return on assets
2.30% 
2.50% 
 
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
 
 
 
Discount rate
3.40% 
2.10% 
2.50% 
Salary growth
3.10% 
2.40% 
2.30% 
Expected rate of return on assets
2.50% 
0.00% 
3.50% 
Benefit Plans (Plan assets components) (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Defined Benefit Plan, Fair Value of Plan Assets
$ 437 
$ 731 
$ 12,269 
Fair Value, Inputs, Level 1 [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Defined Benefit Plan, Fair Value of Plan Assets
0 
0 
 
Fair Value, Inputs, Level 2 [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Defined Benefit Plan, Fair Value of Plan Assets
437 
731 
 
Fair Value, Inputs, Level 3 [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Defined Benefit Plan, Fair Value of Plan Assets
0 
0 
 
Insurance Contract [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Defined Benefit Plan, Fair Value of Plan Assets
437 
731 
 
Insurance Contract [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Defined Benefit Plan, Fair Value of Plan Assets
0 
0 
 
Insurance Contract [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Defined Benefit Plan, Fair Value of Plan Assets
437 
731 
 
Insurance Contract [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Defined Benefit Plan, Fair Value of Plan Assets
$ 0 
$ 0 
 
Stock-Based Compensation (Narratives) (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Stock Options [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Maximum term of share based award
10 years 
 
 
Closing stock price
$ 48.66 
 
 
Unrecognized compensation cost related to non-vested stock options
$ 2.1 
 
 
Period for recognition
2 years 
 
 
Stock Options [Member] |
Minimum [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Award vesting period
3 years 
 
 
Restricted Stock and Restricted Stock Units [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Period for recognition
2 years 
 
 
Tax benefit (expense) from compensation expense
2.30 
(0.40)
(0.02)
Total unrecognized compensation cost
7.7 
 
 
Fair value of shares vested
$ 12.5 
$ 4.0 
$ 1.5 
Restricted Stock and Restricted Stock Units [Member] |
Minimum [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Award vesting period
3 years 
 
 
Potential performance based restricted stock units to be issued based on shareholder return
0 
 
 
Restricted Stock and Restricted Stock Units [Member] |
Maximum [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Award vesting period
4 years 
 
 
Potential performance based restricted stock units to be issued based on shareholder return
716,163 
 
 
Restricted Stock And Unit Awards [Member] |
Minimum [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Award vesting period
3 years 
 
 
Two Thousand Five Plan [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Number of shares authorized
2,450,000 
 
 
Number of shares available for grant
16,799 
 
 
Two Thousand Five Plan [Member] |
Restricted Stock and Restricted Stock Units [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Number of shares authorized
850,000 
 
 
Number of shares available for grant
3,625 
 
 
Two Thousand Nine Plan [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Number of shares authorized
1,350,000 
 
 
Number of shares available for grant
316,695 
 
 
Two Thousand Nine Plan [Member] |
Restricted Stock and Restricted Stock Units [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Number of shares authorized
200,000 
 
 
Number of shares available for grant
26,594 
 
 
Two Thousand Eleven Plan [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Number of shares authorized
1,350,000 
 
 
Number of shares available for grant
575,451 
 
 
Stock-Based Compensation (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
$ 13,186 
$ 14,101 
$ 10,904 
Cost of Sales [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
3,530 
3,864 
2,620 
Selling, General and Administrative Expenses [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
7,923 
7,907 
7,684 
Research and Development Expense [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
1,440 
1,194 
600 
Other Operating Expenses, net [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
293 
1,136 
0 
Employee Stock Option [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
2,523 
3,490 
2,786 
Restricted Stock And Unit Awards [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
6,417 
5,843 
6,233 
Defined Contribution Plan Stock [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
$ 4,246 
$ 4,768 
$ 1,885 
Stock-Based Compensation (Weighted-Average Fair Value and Assumptions) (Details 1)
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
 
Weighted average grant date fair value
$ 16.43 
$ 8.38 
$ 8.20 
Risk-free interest rate
1.73% 
0.73% 
0.83% 
Expected volatility
39.00% 
39.00% 
40.00% 
Expected life (in years)
5 years 3 months 18 days 
5 years 3 months 18 days 
5 years 3 months 18 days 
Expected dividend yield
0.00% 
0.00% 
0.00% 
Annual prevesting forfeiture rate
9.00% 
9.00% 
9.00% 
Stock-Based Compensation (Time-Vested Stock Option Activity) (Details 2) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Stock Options Time Based [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
 
Stock Options Outstanding, Beginning
1,616,409 
1,775,847 
1,558,771 
Option Grants in Period, Gross
183,571 
372,676 
395,978 
Option Exercises in Period
(295,203)
(443,428)
(52,683)
Option Forfeitures and Expirations in Period
(33,279)
(88,686)
(126,219)
Stock Options Outstanding, Ending
1,471,498 
1,616,409 
1,775,847 
Options Expected to Vest, Number
1,447,519 
 
 
Options Exercisable, Number
1,278,765 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
 
 
 
Options Outstanding, Weighted Average Exercise Price, Beginning
$ 22.92 
$ 23.17 
$ 23.42 
Option Grants in Period, Weighted Average Exercise Price
$ 43.84 
$ 23.33 
$ 22.19 
Option Exercises in Period, Weighted Average Exercise Price
$ 23.42 
$ 23.24 
$ 20.77 
Option Forfeitures and Expirations in Period, Weighted Average Exercise Price
$ 27.82 
$ 28.05 
$ 24.21 
Options Outstanding, Weighted Average Exercise Price, Ending
$ 25.32 
$ 22.92 
$ 23.17 
Options Expected to Vest, Weighted Average Exercise Price
$ 25.10 
 
 
Options Exercisable, Weighted Average Exercise Price
$ 23.88 
 
 
Options Outstanding, Weighted Average Remaining Contractual Term
6 years 1 month 6 days 
 
 
Options Expected to Vest, Weighted Average Remaining Contractual Term
6 years 1 month 6 days 
 
 
Options Exercisable, Weighted Average Remaining Contractual Term
5 years 9 months 18 days 
 
 
Options Outstanding, Intrinsic Value
$ 34.3 
 
 
Options Expected to Vest, Intrinsic Value
34.1 
 
 
Options Exercisable, Intrinsic Value
31.7 
 
 
Stock Options Performance Based [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
 
Stock Options Outstanding, Beginning
177,261 
284,925 
478,364 
Option Exercises in Period
(58,422)
(107,664)
(7,657)
Option Forfeitures and Expirations in Period
0 
0 
(185,782)
Stock Options Outstanding, Ending
118,839 
177,261 
284,925 
Options Expected to Vest, Number
118,839 
 
 
Options Exercisable, Number
118,839 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
 
 
 
Options Outstanding, Weighted Average Exercise Price, Beginning
$ 23.27 
$ 23.26 
$ 24.44 
Option Exercises in Period, Weighted Average Exercise Price
$ 23.35 
$ 23.23 
$ 22.04 
Option Forfeitures and Expirations in Period, Weighted Average Exercise Price
$ 0.00 
$ 0.00 
$ 26.35 
Options Outstanding, Weighted Average Exercise Price, Ending
$ 23.24 
$ 23.27 
$ 23.26 
Options Expected to Vest, Weighted Average Exercise Price
$ 23.24 
 
 
Options Exercisable, Weighted Average Exercise Price
$ 23.24 
 
 
Options Outstanding, Weighted Average Remaining Contractual Term
3 years 0 months 0 days 
 
 
Options Expected to Vest, Weighted Average Remaining Contractual Term
3 years 0 months 0 days 
 
 
Options Exercisable, Weighted Average Remaining Contractual Term
3 years 0 months 0 days 
 
 
Options Outstanding, Intrinsic Value
3.0 
 
 
Options Expected to Vest, Intrinsic Value
3.0 
 
 
Options Exercisable, Intrinsic Value
$ 3.0 
 
 
Stock-Based Compensation (Exercise of Stock Option) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
 
Intrinsic value
$ 7,997 
$ 6,807 
$ 148 
Cash received
8,278 
12,807 
1,263 
Tax benefit (expense) realized
$ 1,704 
$ 727 
$ (132)
Stock-Based Compensation (Restricted Stock and Restricted Stock Units)(Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 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, Number of Shares [Roll Forward]
 
 
 
Nonvested Restricted Stock Units and Awards, Beginning
67,575 
80,269 
69,942 
Restricted Stock Units and Awards Granted
63,817 
67,230 
92,265 
Restricted Stock Units and Awards Vested
(53,568)
(74,062)
(74,901)
Restricted Stock Units and Awards Forfeited
(9,992)
(5,862)
(7,037)
Nonvested Restricted Stock Units and Awards, Ending
67,832 
67,575 
80,269 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
 
 
 
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Beginning
$ 26.37 
$ 23.48 
$ 22.69 
Restricted Stock Units and Awards Granted, Weighted Average Fair Value
$ 44.78 
$ 26.76 
$ 23.49 
Restricted Stock Units and Awards Vested, Weighted Average Fair Value
$ 34.16 
$ 23.93 
$ 22.83 
Restricted Stock Units and Awards Forfeited, Weighted Average Fair Value
$ 35.30 
$ 22.26 
$ 22.56 
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Ending
$ 36.22 
$ 26.37 
$ 23.48 
Restricted Stock And Restricted Stock Units Performance Based [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
 
 
Nonvested Restricted Stock Units and Awards, Beginning
779,678 
782,446 
529,743 
Restricted Stock Units and Awards Granted
186,825 
318,169 
332,918 
Restricted Stock Units and Awards Vested
(221,470)
(49,139)
(15,500)
Restricted Stock Units and Awards Forfeited
(28,870)
(271,798)
(64,715)
Nonvested Restricted Stock Units and Awards, Ending
716,163 
779,678 
782,446 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
 
 
 
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Beginning
$ 16.41 
$ 16.02 
$ 16.68 
Restricted Stock Units and Awards Granted, Weighted Average Fair Value
$ 31.33 
$ 15.86 
$ 15.30 
Restricted Stock Units and Awards Vested, Weighted Average Fair Value
$ 18.51 
$ 14.68 
$ 24.64 
Restricted Stock Units and Awards Forfeited, Weighted Average Fair Value
$ 18.42 
$ 14.94 
$ 15.72 
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Ending
$ 19.57 
$ 16.41 
$ 16.02 
Restricted Stock and Restricted Stock Units [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Employee Service Share-based Compensation, Tax Benefit (Expense) from Vesting of Restricted Stock and Restricted Stock Units
$ 2.30 
$ (0.40)
$ (0.02)
Research, Development and Engineering Costs (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Research and development expense [Line Items]
 
 
 
Research and Development Expense (Excluding Acquired in Process Cost)
$ 49,845 
$ 54,077 
$ 52,490 
Research, Development, and Engineering Costs [Member]
 
 
 
Research and development expense [Line Items]
 
 
 
Research and Development Expense (Excluding Acquired in Process Cost)
58,974 
62,652 
62,848 
Customer Cost Reimbursements [Member]
 
 
 
Research and development expense [Line Items]
 
 
 
Research and Development Expense (Excluding Acquired in Process Cost)
$ (9,129)
$ (8,575)
$ (10,358)
Other Operating Expenses, Net (Narrative) (Details) (USD $)
3 Months Ended 12 Months Ended
Jan. 2, 2015
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Fair value adjustments
 
$ 840,000 
$ 690,000 
 
Impairment of Long-Lived Assets to be Disposed of
400,000 
 
900,000 
3,600,000 
Indefinite-lived assets written-off (Note 18)
 
 
(500,000)
 
Relocation costs
 
15,297,000 
15,790,000 
42,346,000 
Investments in Capacity and Capabilities [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring Initiation Date
 
2014 
 
 
Restructuring And Related Activities Capital Expenditures Incurred To Date
 
4,000,000 
 
 
Restructuring and Related Cost, Cost Incurred to Date
8,900,000 
8,900,000 
 
 
Investments in Capacity and Capabilities [Member] |
Minimum [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring And Related Activities Expected Capital Expenditures
 
25,000,000 
 
 
Restructuring and Related Cost, Expected Cost
29,000,000 
29,000,000 
 
 
Investments in Capacity and Capabilities [Member] |
Minimum [Member] |
Severance And Retention [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and Related Cost, Expected Cost
7,000,000 
7,000,000 
 
 
Investments in Capacity and Capabilities [Member] |
Minimum [Member] |
Accelerated Depreciation And Asset Write Offs [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and Related Cost, Expected Cost
2,000,000 
2,000,000 
 
 
Investments in Capacity and Capabilities [Member] |
Minimum [Member] |
Other Restructuring [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and Related Cost, Expected Cost
20,000,000 
20,000,000 
 
 
Investments in Capacity and Capabilities [Member] |
Maximum [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring And Related Activities Expected Capital Expenditures
 
27,000,000 
 
 
Restructuring and Related Cost, Expected Cost
34,000,000 
34,000,000 
 
 
Investments in Capacity and Capabilities [Member] |
Maximum [Member] |
Severance And Retention [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and Related Cost, Expected Cost
9,000,000 
9,000,000 
 
 
Investments in Capacity and Capabilities [Member] |
Maximum [Member] |
Accelerated Depreciation And Asset Write Offs [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and Related Cost, Expected Cost
3,000,000 
3,000,000 
 
 
Investments in Capacity and Capabilities [Member] |
Maximum [Member] |
Other Restructuring [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and Related Cost, Expected Cost
22,000,000 
22,000,000 
 
 
Operating Unit Realignment [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring Initiation Date
 
2013 
 
 
Initiatives, Expected Period of Completion
 
0 months 
 
 
Restructuring and Related Cost, Cost Incurred to Date
6,600,000 
6,600,000 
 
 
Operating Unit Realignment [Member] |
Severance And Retention [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and Related Cost, Cost Incurred to Date
5,000,000 
5,000,000 
 
 
Operating Unit Realignment [Member] |
Other Restructuring [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and Related Cost, Cost Incurred to Date
1,600,000 
1,600,000 
 
 
Orthopaedic Facility Optimization [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring Initiation Date
 
2010 
 
 
Restructuring and Related Costs, Facility Consolidations
 
2 
 
 
Defined Benefit Plan, Recognized Net Gain (Loss) Due to Curtailments
 
 
1,900,000 
 
Impairment of Long-Lived Assets to be Disposed of
400,000 
 
 
 
Initiatives, Expected Period of Completion
 
2 years 
 
 
Restructuring And Related Activities Capital Expenditures Incurred To Date
 
24,800,000 
 
 
Restructuring and Related Cost, Cost Incurred to Date
42,500,000 
42,500,000 
 
 
Assets Transferred to Held for Sale
 
2,100,000 
 
 
Orthopaedic Facility Optimization [Member] |
Minimum [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring And Related Activities Expected Capital Expenditures
 
30,000,000 
 
 
Restructuring and Related Cost, Expected Cost
43,000,000 
43,000,000 
 
 
Orthopaedic Facility Optimization [Member] |
Minimum [Member] |
Severance And Retention [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and Related Cost, Expected Cost
11,000,000 
11,000,000 
 
 
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
13,000,000 
13,000,000 
 
 
Orthopaedic Facility Optimization [Member] |
Minimum [Member] |
Other Restructuring [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and Related Cost, Expected Cost
19,000,000 
19,000,000 
 
 
Orthopaedic Facility Optimization [Member] |
Maximum [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring And Related Activities Expected Capital Expenditures
 
35,000,000 
 
 
Restructuring and Related Cost, Expected Cost
48,000,000 
48,000,000 
 
 
Orthopaedic Facility Optimization [Member] |
Maximum [Member] |
Other Restructuring [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and Related Cost, Expected Cost
24,000,000 
24,000,000 
 
 
Medical Device Facility Optimization [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring Initiation Date
 
2011 
 
 
Restructuring and Related Costs, Facility Expansions
 
2 
 
 
Initiatives, Expected Period of Completion
 
0 years 
 
 
Restructuring And Related Activities Capital Expenditures Incurred To Date
 
12,500,000 
 
 
Restructuring and Related Cost, Cost Incurred to Date
1,800,000 
1,800,000 
 
 
Medical Device Facility Optimization [Member] |
Production Inefficiencies, Moving And Revalidation [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and Related Cost, Cost Incurred to Date
700,000 
700,000 
 
 
Medical Device Facility Optimization [Member] |
Personnel [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and Related Cost, Cost Incurred to Date
600,000 
600,000 
 
 
Medical Device Facility Optimization [Member] |
Other Restructuring [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and Related Cost, Cost Incurred to Date
500,000 
500,000 
 
 
ERP System Upgrade [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring Initiation Date
 
2011 
 
 
Initiatives, Expected Period of Completion
 
0 months 
 
 
Restructuring And Related Activities Capital Expenditures Incurred To Date
 
4,000,000 
 
 
Restructuring and Related Cost, Cost Incurred to Date
5,700,000 
5,700,000 
 
 
ERP System Upgrade [Member] |
Training And Consulting Costs [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and Related Cost, Cost Incurred to Date
3,200,000 
3,200,000 
 
 
ERP System Upgrade [Member] |
Accelerated Depreciation And Asset Write Offs [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring and Related Cost, Cost Incurred to Date
2,500,000 
2,500,000 
 
 
Corporate Headquarters Relocation [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Relocation costs
 
 
 
1,200,000 
In Process Research And Development [Member] |
QiG [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Indefinite-lived assets written-off (Note 18)
 
 
(540,000)
 
Swiss Orthopaedic Product Line [Member] |
Orthopaedic Facility Optimization [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Impairment of Long-Lived Assets to be Disposed of
 
 
 
3,600,000 
Disposal Group, Payments Received
 
 
4,700,000 
 
Liabilities Assumed By Third Parties
 
 
2,400,000 
 
Assets Held-For-Sale, Expected Gain From Earn-Out Payment
 
2,700,000 
 
 
Wireless Sensing [Member] |
Greatbatch Medical [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Write-off
 
 
900,000 
 
Executive Vice President [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Severance Costs
 
$ 900,000 
 
 
Other Operating Expenses, Net (Details) (USD $)
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Operating Costs and Expenses [Abstract]
 
 
 
Other operating (income) expense, net
$ 15,297,000 
$ 15,790,000 
$ 42,346,000 
Investments in Capacity and Capabilities [Member]
 
 
 
Operating Costs and Expenses [Abstract]
 
 
 
Other operating (income) expense, net
8,925,000 
0 
0 
Operating Unit Realignment [Member]
 
 
 
Operating Costs and Expenses [Abstract]
 
 
 
Other operating (income) expense, net
1,017,000 
5,625,000 
0 
Orthopaedic facility optimization [Member]
 
 
 
Operating Costs and Expenses [Abstract]
 
 
 
Other operating (income) expense, net
1,317,000 
8,038,000 
32,482,000 
Medical device facility optimization [Member]
 
 
 
Operating Costs and Expenses [Abstract]
 
 
 
Other operating (income) expense, net
11,000 
312,000 
1,525,000 
ERP system upgrade [Member]
 
 
 
Operating Costs and Expenses [Abstract]
 
 
 
Other operating (income) expense, net
(82,000)
783,000 
5,041,000 
Integration costs [Member]
 
 
 
Operating Costs and Expenses [Abstract]
 
 
 
Other operating (income) expense, net
3,000 
(502,000)
1,460,000 
Asset dispositions severance and other [Member]
 
 
 
Operating Costs and Expenses [Abstract]
 
 
 
Other operating (income) expense, net
4,106,000 
1,534,000 
1,838,000 
Operating Unit Realignment [Member]
 
 
 
Other Operating Income Expense Detail [Line Items]
 
 
 
Restructuring and Related Cost, Cost Incurred to Date
6,600,000 
 
 
Orthopaedic Facility Optimization [Member]
 
 
 
Other Operating Income Expense Detail [Line Items]
 
 
 
Restructuring and Related Cost, Cost Incurred to Date
42,500,000 
 
 
Medical Device Facility Optimization [Member]
 
 
 
Other Operating Income Expense Detail [Line Items]
 
 
 
Restructuring and Related Cost, Cost Incurred to Date
1,800,000 
 
 
ERP System Upgrade [Member]
 
 
 
Other Operating Income Expense Detail [Line Items]
 
 
 
Restructuring and Related Cost, Cost Incurred to Date
$ 5,700,000 
 
 
Other Operating Expenses, Net (Changes in Accrued Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Investments in Capacity and Capabilities [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
$ 0 
Restructuring charges
8,925 
Write-offs
(33)
Cash payments
(6,663)
Restructuring Reserve, Ending balance
2,229 
Operating Unit Realignment [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
1,211 
Restructuring charges
1,017 
Cash payments
(2,228)
Restructuring Reserve, Ending balance
0 
Orthopaedic Facility Optimization [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
857 
Restructuring charges
1,317 
Write-offs
(400)
Cash payments
(1,487)
Restructuring Reserve, Ending balance
287 
Medical Device Facility Optimization [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
0 
Restructuring charges
11 
Cash payments
(11)
Restructuring Reserve, Ending balance
0 
ERP System Upgrade [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
0 
Restructuring charges
(82)
Cash payments
82 
Restructuring Reserve, Ending balance
0 
Severance And Retention [Member] |
Investments in Capacity and Capabilities [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
0 
Restructuring charges
2,209 
Cash payments
(1,046)
Restructuring Reserve, Ending balance
1,163 
Severance And Retention [Member] |
Operating Unit Realignment [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
465 
Restructuring charges
849 
Cash payments
(1,314)
Restructuring Reserve, Ending balance
0 
Severance And Retention [Member] |
Orthopaedic Facility Optimization [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
0 
Restructuring charges
0 
Write-offs
0 
Cash payments
0 
Restructuring Reserve, Ending balance
0 
Production Inefficiencies, Moving And Revalidation [Member] |
Medical Device Facility Optimization [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
0 
Restructuring charges
0 
Cash payments
0 
Restructuring Reserve, Ending balance
0 
Training And Consulting Costs [Member] |
ERP System Upgrade [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
0 
Restructuring charges
(82)
Cash payments
82 
Restructuring Reserve, Ending balance
0 
Accelerated Depreciation And Asset Write Offs [Member] |
Investments in Capacity and Capabilities [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
0 
Restructuring charges
33 
Write-offs
(33)
Cash payments
0 
Restructuring Reserve, Ending balance
0 
Accelerated Depreciation And Asset Write Offs [Member] |
Orthopaedic Facility Optimization [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
0 
Restructuring charges
(2,255)
Write-offs
(400)
Cash payments
2,655 
Restructuring Reserve, Ending balance
0 
Accelerated Depreciation And Asset Write Offs [Member] |
ERP System Upgrade [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
0 
Restructuring charges
0 
Cash payments
0 
Restructuring Reserve, Ending balance
0 
Personnel [Member] |
Medical Device Facility Optimization [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
0 
Restructuring charges
1 
Cash payments
(1)
Restructuring Reserve, Ending balance
0 
Other Restructuring [Member] |
Investments in Capacity and Capabilities [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
0 
Restructuring charges
6,683 
Cash payments
(5,617)
Restructuring Reserve, Ending balance
1,066 
Other Restructuring [Member] |
Operating Unit Realignment [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
746 
Restructuring charges
168 
Cash payments
(914)
Restructuring Reserve, Ending balance
0 
Other Restructuring [Member] |
Orthopaedic Facility Optimization [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
857 
Restructuring charges
3,572 
Write-offs
0 
Cash payments
(4,142)
Restructuring Reserve, Ending balance
287 
Other Restructuring [Member] |
Medical Device Facility Optimization [Member]
 
Restructuring Reserve [Roll Forward]
 
Restructuring Reserve, Beginning balance
0 
Restructuring charges
10 
Cash payments
(10)
Restructuring Reserve, Ending balance
$ 0 
Income Taxes (Narratives) (Details) (USD $)
In Millions, unless otherwise specified
Jan. 2, 2015
Income Tax Disclosure [Abstract]
 
Reasonably possible reduction within next 12 months
$ 1.0 
Unrecognized tax benefit
$ 2.1 
Income Taxes (Income Before Income Tax Domestic And Foreign) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Income Tax Disclosure [Line Items]
 
 
 
Income (loss) from continuing operations before income taxes
$ 76,579 
$ 48,838 
$ 6,730 
UNITED STATES [Member]
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
Income (loss) from continuing operations before income taxes
56,801 
42,392 
36,057 
International [Member]
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
Income (loss) from continuing operations before income taxes
$ 19,778 
$ 6,446 
$ (29,327)
Income Taxes (Provision Benefit of Income Taxes) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Current:
 
 
 
Federal
$ 16,293 
$ 39,353 
$ 4,747 
State
1,299 
1,604 
381 
International
2,998 
1,470 
668 
Total
20,590 
42,427 
5,796 
Deferred:
 
 
 
Federal
1,211 
(28,678)
6,615 
State
(310)
427 
175 
International
(370)
(1,605)
(1,057)
Total
531 
(29,856)
5,733 
Provision for income taxes
$ 21,121 
$ 12,571 
$ 11,529 
Income Taxes (Effect Tax Rate Reconciliation) (Details)
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Income Tax Disclosure [Abstract]
 
 
 
Statutory rate
35.00% 
35.00% 
35.00% 
Federal tax credits
(2.10%)
(7.50%)
0.00% 
Foreign rate differential
(4.30%)
(0.70%)
50.70% 
Uncertain tax positions
0.60% 
1.70% 
(10.10%)
State taxes, net of federal benefit
0.70% 
2.30% 
4.90% 
Change in tax rate - loss of Swiss tax holiday
0.00% 
0.00% 
25.60% 
Change in foreign tax rates
(0.60%)
(3.70%)
0.00% 
Valuation allowance
(0.40%)
0.40% 
67.60% 
Other
(1.30%)
(1.80%)
(2.40%)
Effective tax rate
27.60% 
25.70% 
171.30% 
Income Taxes (Deferred Tax Assets and Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 2, 2015
Jan. 3, 2014
Components of Deferred Tax Assets and Liabilities [Abstract]
 
 
Tax credits
$ 5,828 
$ 6,624 
Net operating loss carryforwards
6,721 
9,161 
Inventories
3,335 
4,202 
Accrued expenses
4,338 
4,303 
Stock-based compensation
9,341 
9,194 
Other
1,659 
573 
Gross deferred tax assets
31,222 
34,057 
Less valuation allowance
(10,709)
(11,661)
Net deferred tax assets
20,513 
22,396 
Property, plant and equipment
(2,646)
(2,254)
Intangible assets
(57,850)
(57,648)
Convertible subordinated notes
(5,006)
(6,178)
Gross deferred tax liabilities
(65,502)
(66,080)
Net deferred tax liability
$ (44,989)
$ (43,684)
Income Taxes (Deferred Tax Assets and Liabilities Current Noncurrent) (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 2, 2015
Jan. 3, 2014
Components of Deferred Tax Assets and Liabilities [Abstract]
 
 
Current deferred tax asset
$ 6,168 
$ 6,008 
Current deferred tax liability
(588)
(613)
Noncurrent deferred tax asset
2,626 
2,933 
Noncurrent deferred tax liability
(53,195)
(52,012)
Net deferred tax liability
$ (44,989)
$ (43,684)
Income Taxes (Income Tax Carry Forward) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Jan. 2, 2015
International [Member]
 
Operating Loss Carryforwards [Line Items]
 
Operating Loss Carryforwards
$ 48.0 1
Operating Loss Carryforwards, Expiration Dates
Jan. 01, 2015 
State [Member]
 
Operating Loss Carryforwards [Line Items]
 
Operating Loss Carryforwards
37.6 1
Research Tax Credit Carryforward [Member] |
US and State [Member]
 
Operating Loss Carryforwards [Line Items]
 
Tax Credit Carryforward, Amount
0.7 1
Investment Tax Credit Carryforward [Member] |
State [Member]
 
Operating Loss Carryforwards [Line Items]
 
Tax Credit Carryforward, Amount
$ 5.3 
Income Taxes (Unrecognized Tax Benefits) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
 
 
 
Balance, beginning of year
$ 1,858 
$ 970 
$ 1,580 
Additions based upon tax positions related to the current year
268 
325 
0 
Additions related to prior period tax positions
510 
651 
210 
Reductions relating to settlements with tax authorities
(225)
(88)
(522)
Reductions as a result of a lapse of applicable statute of limitations
0 
0 
(298)
Balance, end of year
$ 2,411 
$ 1,858 
$ 970 
Commitments and Contingencies (Narratives) (Details) (USD $)
0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended
Dec. 3, 2014
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Dec. 21, 2012
Litigation One [Member]
Jan. 2, 2015
Litigation One [Member]
Jan. 29, 2015
Subsequent Event [Member]
Loss Contingencies [Line Items]
 
 
 
 
 
 
 
Loss contingency, lawsuit filing date
 
 
 
 
December 21, 2012 
 
 
Loss Contingency, Date of Dismissal
Dec. 03, 2014 
 
 
 
 
 
 
Customer Product Liability Insurance Coverage
 
 
 
 
 
$ 5,000,000 
 
Product Liability Insurance Coverage
 
 
 
 
 
10,000,000 
 
Loss Contingency, Settlement Agreement, Date
 
 
 
 
 
 
Jan. 29, 2015 
Loss contingency, opinion of counsel
 
The Company has not recorded a reserve in connection with this matter since any potential loss is not probable. 
 
 
 
 
 
Direct Operating Costs [Abstract]
 
 
 
 
 
 
 
Direct operating cost, royalty expense
 
3,300,000 
3,500,000 
3,100,000 
 
 
 
Standard Product Warranty Disclosure [Abstract]
 
 
 
 
 
 
 
Standard product warranty description
 
Product Warranties – The Company generally warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. 
 
 
 
 
 
Maximum loss per associate under stop loss insurance
 
225,000 
 
 
 
 
 
Accrued self insured medical plan liability
 
1,800,000 
1,600,000 
 
 
 
 
Purchase commitment, description
 
Purchase Commitments – 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 its current manufacturing needs and are fulfilled by its 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 January 2, 2015, the total contractual obligation related to such expenditures is approximately $36.4 million and will primarily be financed by existing cash and cash equivalents, cash generated 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. 
 
 
 
 
 
Purchase obligation
 
$ 36,400,000 
 
 
 
 
 
Commitments and Contingencies (Change in product warranty liability) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Movement in Standard Product Warranty Accrual [Roll Forward]
 
 
Beginning balance
$ 1,819 
$ 2,626 
Additions to warranty reserve
953 
1,624 
Warranty claims paid
(2,112)
(2,431)
Ending balance
$ 660 
$ 1,819 
Commitments and Contingencies (Operating Lease Expenses) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Commitments and Contingencies Disclosure [Abstract]
 
 
 
Operating lease expense
$ 4,281 
$ 4,379 
$ 4,024 
Commitments and Contingencies (Minimum future estimated annual operating lease expense) (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 2, 2015
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
 
2015
$ 5,797 
2016
5,952 
2017
3,908 
2018
3,489 
2019
3,418 
Thereafter
13,938 
Total estimated operating lease expense
$ 36,502 
Commitments and Contingencies (Foreign currency contracts) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Foreign Currency Cash Flow Hedges [Abstract]
 
 
 
Reduction in Cost of Sales
$ (168)
$ (1,154)
$ (79)
Ineffective portion of change in fair value
0 
0 
0 
FX Contract 1 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Derivative, Type of Instrument
FX Contract 
 
 
Aggregate Notional Amount
16,880 
 
 
Start Date
Jan. 01, 2015 
 
 
End Date
Dec. 31, 2015 
 
 
$/Peso
0.0734 
 
 
Foreign Currency Cash Flow Hedge Liability at Fair Value
$ 1,568 
 
 
Balance Sheet Location
Accrued Expenses 
 
 
Earnings (Loss) Per Share (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Jan. 2, 2015
Oct. 3, 2014
Jul. 4, 2014
Apr. 4, 2014
Jan. 3, 2014
Sep. 27, 2013
Jun. 28, 2013
Mar. 29, 2013
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Numerator for basic EPS:
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
 
 
 
 
 
 
 
 
$ 55,458 
$ 36,267 
$ (4,799)
Denominator for basic EPS:
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding
 
 
 
 
 
 
 
 
24,825 
23,991 
23,584 
Effect of dilutive securities stock options, restricted stock and restricted stock units
 
 
 
 
 
 
 
 
1,150 
1,332 
0 
Denominator for diluted EPS
 
 
 
 
 
 
 
 
25,975 
25,323 
23,584 
Basic (in dollars per share)
$ 0.57 
$ 0.56 
$ 0.50 
$ 0.61 
$ 0.40 
$ 0.46 
$ 0.41 
$ 0.24 
$ 2.23 
$ 1.51 
$ (0.20)
Diluted (in dollars per share)
$ 0.54 
$ 0.54 
$ 0.48 
$ 0.58 
$ 0.38 
$ 0.44 
$ 0.39 
$ 0.23 
$ 2.14 
$ 1.43 
$ (0.20)
Earnings (Loss) Per Share (Antidilutive Securities) (Details)
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Anitdilutive Securities Excluded From Earnings Per Share [Abstract]
 
 
 
Time-vested stock options, restricted stock and restricted stock units
175,549 
18,480 
2,142,000 
Performance-vested stock options and restricted stock units
0 
0 
781,000 
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities
 
 
0 
Accumulated Other Comprehensive Income (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, before Tax, [Abstract]
 
 
 
Defined Benefit Plan Liability, Beginning
$ (672)
$ (962)
 
Net defined benefit plan liability adjustments
(509)
290 
 
Defined Benefit Plan Liability, Ending
(1,181)
(672)
(962)
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, before Tax [Abstract]
 
 
 
Cash Flow Hedges, Beginning
(468)
120 
 
Unrealized gain (loss) on cash flow hedges
(2,372)
58 
 
Realized Gain (Loss) On Foreign Currency Contracts Before Tax
(168)
(1,154)
 
Realized Gain (Loss) On Interest Rate Swaps Before Tax
450 
508 
 
Cash Flow Hedges, End
(2,558)
(468)
120 
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax [Abstract]
 
 
 
Foreign Currency Translation Adjustment, Beginning
14,952 
13,431 
 
Net foreign currency translation gain (loss)
(3,502)
1,521 
 
Foreign Currency Translation Adjustment, End
11,450 
14,952 
13,431 
Other Comprehensive Income (Loss), before Tax [Abstract]
 
 
 
Total Pre-Tax Amount, Beginning
13,812 
12,589 
 
Unrealized gain (loss) on cash flow hedges
(2,372)
58 
 
Realized Gain (Loss) On Foreign Currency Contracts Before Tax
(168)
(1,154)
 
Realized Gain (Loss) On Interest Rate Swaps Before Tax
450 
508 
 
Net defined benefit plan liability adjustments
(509)
290 
 
Net foreign currency translation gain (loss)
(3,502)
1,521 
 
Total Pre-Tax Amount, End
7,711 
13,812 
12,589 
Other Comprehensive Income (Loss), Tax [Abstract]
 
 
 
Tax, Beginning
546 
358 
 
Unrealized gain (loss) on cash flow hedges
829 
(20)
 
Other Comprehensive Income Realized Gain Loss On Foreign Currency Hedges Tax
59 
404 
 
Realized Gain (Loss) On Interest Rate Swaps Tax
(157)
(178)
 
Net defined benefit plan liability adjustments
135 
(18)
 
Net foreign currency translation gain (loss)
0 
0 
 
Tax, End
1,412 
546 
358 
Other Comprehensive Income (Loss), Net of Tax [Abstract]
 
 
 
Net-of-Tax Amount, Beginning
14,358 
12,947 
 
Unrealized gain (loss) on cash flow hedges, net of tax
(1,543)
38 
 
Realized Gain (Loss) On Foreign Currency Contracts Net Of Tax
(109)
(750)
 
Realized Gain (Loss) On Interest Rate Swaps Net Of Tax
293 
330 
 
Net defined benefit plan liability adjustments
(374)
272 
1,685 
Foreign currency translation gain (loss)
(3,502)
1,521 
1,905 
Net-of-Tax Amount, End
$ 9,123 
$ 14,358 
$ 12,947 
Fair Value Measurement (Narratives) (Details) (USD $)
3 Months Ended 12 Months Ended
Jan. 2, 2015
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
 
 
Foreign currency cash flow hedge gain (loss) to be reclassified during next 12 months
$ 1,600,000 
$ 1,600,000 
 
 
Contingent consideration liability
0 
0 
840,000 
1,530,000 
Cost and equity method investments aggregate carrying amount
14,500,000 
14,500,000 
12,300,000 
 
Cost-method investments, realized gains
 
3,200,000 
 
 
Income (Loss) from Equity Method Investments
 
1,200,000 
(200,000)
(300,000)
Impairment of Long-Lived Assets to be Disposed of
400,000 
 
900,000 
3,600,000 
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill)
 
 
500,000 
 
Fair Value, Inputs, Level 2 [Member]
 
 
 
 
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
 
 
Contingent consideration liability
 
 
0 
 
Cost and equity method investments other than temporary impairment
 
0 
500,000 
100,000 
Financial Milestones [Member]
 
 
 
 
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
 
 
Contingent consideration liability
0 
0 
 
 
Development Milestones [Member]
 
 
 
 
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
 
 
Contingent consideration liability
$ 0 
$ 0 
 
 
Chinese Venture Capital Fund [Member]
 
 
 
 
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
 
 
Equity Method Investment, Ownership Percentage
7.40% 
7.40% 
 
 
Fair Value Measurement (Accrued Contingent Consideration) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Contingent Consideration Liability [Roll Forward]
 
 
Contingent consideration liability, beginning balance
$ 840 
$ 1,530 
Fair value adjustments
(840)
(690)
Contingent consideration liability, ending balance
$ 0 
$ 840 
Fair Value Measurement (Assets and Liabilities Recorded at Fair Value on a Recurring Basis) (Details) (USD $)
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Contingent consideration liability
$ 0 
$ 840,000 
$ 1,530,000 
Fair Value, Measurements, Recurring [Member]
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Foreign Currency Contracts, Liability, Fair Value Disclosure
1,568,000 
140,000 
 
Interest rate swap
990,000 
328,000 
 
Fair Value, Inputs, Level 1 [Member]
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Contingent consideration liability
 
0 
 
Fair Value, Inputs, Level 1 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Foreign Currency Contracts, Liability, Fair Value Disclosure
0 
0 
 
Interest rate swap
0 
0 
 
Fair Value, Inputs, Level 2 [Member]
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Contingent consideration liability
 
0 
 
Fair Value, Inputs, Level 2 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Foreign Currency Contracts, Liability, Fair Value Disclosure
1,568,000 
140,000 
 
Interest rate swap
990,000 
328,000 
 
Fair Value, Inputs, Level 3 [Member]
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Contingent consideration liability
 
840,000 
 
Fair Value, Inputs, Level 3 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Foreign Currency Contracts, Liability, Fair Value Disclosure
0 
0 
 
Interest rate swap
$ 0 
$ 0 
 
Fair Value Measurements (Assets and Liabilities Measured on Non-recurring Basis) (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 2, 2015
Jan. 3, 2014
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Foreign Currency Contracts, Liability, Fair Value Disclosure
$ 1,568 
$ 140 
Fair Value, Measurements, Nonrecurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets Held for Sale (Note 5)
1,635 
0 
Fair Value, Inputs, Level 1 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Foreign Currency Contracts, Liability, Fair Value Disclosure
0 
0 
Fair Value, Inputs, Level 1 [Member] |
Fair Value, Measurements, Nonrecurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets Held for Sale (Note 5)
 
0 
Fair Value, Inputs, Level 2 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Foreign Currency Contracts, Liability, Fair Value Disclosure
1,568 
140 
Fair Value, Inputs, Level 2 [Member] |
Fair Value, Measurements, Nonrecurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets Held for Sale (Note 5)
1,635 
 
Fair Value, Inputs, Level 3 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Foreign Currency Contracts, Liability, Fair Value Disclosure
0 
0 
Fair Value, Inputs, Level 3 [Member] |
Fair Value, Measurements, Nonrecurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets Held for Sale (Note 5)
 
$ 0 
Business Segment, Geographic and Concentration Risk Information (Narrative) (Details)
12 Months Ended
Jan. 2, 2015
Segment
Noncontrolling Interest [Line Items]
 
Number of Reportable Segments
2 
QiG [Member]
 
Noncontrolling Interest [Line Items]
 
Controlling Interest, Number of Ownership Interests
3 
Controlling Interest, Liability of Expenses Incurred, Percentage
100.00% 
CE Approval Date
Jun. 17, 2014 
QiG [Member] |
Minimum [Member]
 
Noncontrolling Interest [Line Items]
 
Controlling Interest, Ownership Percentage
89.00% 
QiG [Member] |
Maximum [Member]
 
Noncontrolling Interest [Line Items]
 
Controlling Interest, Ownership Percentage
100.00% 
Business Segment, Geographic And Concentration Risk Information (Sales by Product Lines) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Jan. 2, 2015
Oct. 3, 2014
Jul. 4, 2014
Apr. 4, 2014
Jan. 3, 2014
Sep. 27, 2013
Jun. 28, 2013
Mar. 29, 2013
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales Revenue, Net
$ 169,726 
$ 171,699 
$ 172,081 
$ 174,281 
$ 176,619 
$ 167,730 
$ 171,331 
$ 148,265 
$ 687,787 
$ 663,945 
$ 646,177 
Greatbatch Medical [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales Revenue, Net
 
 
 
 
 
 
 
 
678,285 
660,902 
643,722 
Greatbatch Medical [Member] |
Cardiac Neuromodulation [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales Revenue, Net
 
 
 
 
 
 
 
 
321,419 
325,412 
306,669 
Greatbatch Medical [Member] |
Orthopaedic [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales Revenue, Net
 
 
 
 
 
 
 
 
147,296 
130,247 
122,061 
Greatbatch Medical [Member] |
Portable Medical [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales Revenue, Net
 
 
 
 
 
 
 
 
69,043 
78,743 
81,659 
Greatbatch Medical [Member] |
Vascular [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales Revenue, Net
 
 
 
 
 
 
 
 
58,770 
48,357 
51,980 
Greatbatch Medical [Member] |
Energy [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales Revenue, Net
 
 
 
 
 
 
 
 
81,757 
78,143 
81,353 
QiG [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales Revenue, Net
 
 
 
 
 
 
 
 
$ 9,502 
$ 3,043 
$ 2,455 
Business Segment, Geographic And Concentration Risk Information (Reconciliation of Segment Information) (Details 1) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Segment Reporting Information [Line Items]
 
 
 
Operating income as reported
$ 75,654 
$ 61,339 
$ 25,821 
Unallocated other income (expense), net
925 
(12,501)
(19,091)
Income before provision for income taxes
76,579 
48,838 
6,730 
Depreciation And Amortization Including Noncash Debt Amortization
38,230 
42,332 
58,925 
Segment Reporting Information, Expenditures for Additions to Long-Lived Assets
25,646 
18,174 
41,166 
Total assets
956,009 
890,703 
889,875 
Greatbatch Medical [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Operating income as reported
126,312 
111,805 
79,093 
Depreciation And Amortization Including Noncash Debt Amortization
31,906 
31,112 
39,820 
Segment Reporting Information, Expenditures for Additions to Long-Lived Assets
19,006 
13,242 
33,249 
Total assets
761,225 
758,369 
779,890 
QiG [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Operating income as reported
(23,256)
(30,484)
(32,554)
Depreciation And Amortization Including Noncash Debt Amortization
2,101 
1,539 
630 
Segment Reporting Information, Expenditures for Additions to Long-Lived Assets
1,453 
2,134 
3,208 
Total assets
76,529 
56,245 
57,750 
Operating Segments [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Operating income as reported
103,056 
81,321 
46,539 
Depreciation And Amortization Including Noncash Debt Amortization
34,007 
32,651 
40,450 
Segment Reporting Information, Expenditures for Additions to Long-Lived Assets
20,459 
15,376 
36,457 
Total assets
837,754 
814,614 
837,640 
Unallocated Amount to Segment [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Operating income as reported
(27,402)
(19,982)
(20,718)
Depreciation And Amortization Including Noncash Debt Amortization
4,223 
9,681 
18,475 
Segment Reporting Information, Expenditures for Additions to Long-Lived Assets
5,187 
2,798 
4,709 
Total assets
$ 118,255 
$ 76,089 
$ 52,235 
Business Segment, Geographic And Concentration Risk Information (Sales by Geographic Information) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Jan. 2, 2015
Oct. 3, 2014
Jul. 4, 2014
Apr. 4, 2014
Jan. 3, 2014
Sep. 27, 2013
Jun. 28, 2013
Mar. 29, 2013
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales Revenue, Net
$ 169,726 
$ 171,699 
$ 172,081 
$ 174,281 
$ 176,619 
$ 167,730 
$ 171,331 
$ 148,265 
$ 687,787 
$ 663,945 
$ 646,177 
UNITED STATES [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales Revenue, Net
 
 
 
 
 
 
 
 
312,539 
325,090 
330,537 
PUERTO RICO [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales Revenue, Net
 
 
 
 
 
 
 
 
127,702 
117,961 
105,731 
BELGIUM [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales Revenue, Net
 
 
 
 
 
 
 
 
65,308 
67,155 
58,043 
Rest Of World [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales Revenue, Net
 
 
 
 
 
 
 
 
$ 182,238 
$ 153,739 
$ 151,866 
Business Segment, Geographic And Concentration Risk Information (Long lived Tangible Assets by Region) (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
 
Long-lived tangible assets
$ 144,925 
$ 145,773 
$ 150,893 
UNITED STATES [Member]
 
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
 
Long-lived tangible assets
113,851 
116,484 
123,104 
Rest Of World [Member]
 
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
 
Long-lived tangible assets
$ 31,074 
$ 29,289 
$ 27,789 
Business Segment, Geographic And Concentration Risk Information (Significant Customers) (Details)
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Revenue, Major Customer [Line Items]
 
 
 
Entity-Wide Revenue, Major Customer, Percentage
54.00% 
56.00% 
52.00% 
Entity Wide Accounts Receivable, Major Customer, Percentage
47.00% 
46.00% 
 
Customer A [Member]
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Entity-Wide Revenue, Major Customer, Percentage
18.00% 
20.00% 
19.00% 
Entity Wide Accounts Receivable, Major Customer, Percentage
4.00% 
8.00% 
 
Customer B [Member]
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Entity-Wide Revenue, Major Customer, Percentage
18.00% 
16.00% 
16.00% 
Entity Wide Accounts Receivable, Major Customer, Percentage
23.00% 
19.00% 
 
Customer C [Member]
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Entity-Wide Revenue, Major Customer, Percentage
12.00% 
13.00% 
11.00% 
Entity Wide Accounts Receivable, Major Customer, Percentage
8.00% 
8.00% 
 
Customer D [Member]
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Entity-Wide Revenue, Major Customer, Percentage
6.00% 
7.00% 
6.00% 
Entity Wide Accounts Receivable, Major Customer, Percentage
12.00% 
11.00% 
 
Quarterly Sales and Earnings Data - Unaudited (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Jan. 2, 2015
Oct. 3, 2014
Jul. 4, 2014
Apr. 4, 2014
Jan. 3, 2014
Sep. 27, 2013
Jun. 28, 2013
Mar. 29, 2013
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Quarterly Financial Information Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Sales
$ 169,726 
$ 171,699 
$ 172,081 
$ 174,281 
$ 176,619 
$ 167,730 
$ 171,331 
$ 148,265 
$ 687,787 
$ 663,945 
$ 646,177 
Gross profit
57,214 
58,118 
58,470 
57,596 
57,385 
55,877 
57,302 
48,749 
231,398 
219,313 
201,649 
Net income
$ 14,176 
$ 14,012 
$ 12,348 
$ 14,922 
$ 9,781 
$ 11,071 
$ 9,752 
$ 5,663 
$ 55,458 
$ 36,267 
$ (4,799)
Earnings Per Share, Basic (in dollars per share)
$ 0.57 
$ 0.56 
$ 0.50 
$ 0.61 
$ 0.40 
$ 0.46 
$ 0.41 
$ 0.24 
$ 2.23 
$ 1.51 
$ (0.20)
Earnings Per Share, Diluted (in dollars per share)
$ 0.54 
$ 0.54 
$ 0.48 
$ 0.58 
$ 0.38 
$ 0.44 
$ 0.39 
$ 0.23 
$ 2.14 
$ 1.43 
$ (0.20)
Valuation and Qualifying Accounts (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 2, 2015
Jan. 3, 2014
Dec. 28, 2012
Allowance for Doubtful Accounts [Member]
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance at Beginning of Period
$ 2,001 
$ 2,372 
$ 1,930 
Charged to Cost and Expenses
98 
(93)
484 
Charged to Other Accounts
14 1 2
(15)1
71 1 2
Deductions
(702)3
(263)3
(113)3
Balance at End of Period
1,411 
2,001 
2,372 
Valuation Allowance of Deferred Tax Assets [Member]
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance at Beginning of Period
11,661 
12,768 
7,775 
Charged to Cost and Expenses
(729)4
(1,263)4
5,145 4
Charged to Other Accounts
0 1
32 1
124 1
Deductions
(223)4 5
124 4
(276)5
Balance at End of Period
$ 10,709 
$ 11,661 
$ 12,768