NOVANTA INC, 10-Q filed on 11/7/2023
Quarterly Report
v3.23.3
Document and Entity Information - shares
 9 Months Ended
Sep. 29, 2023
Oct. 30, 2023
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Sep. 29, 2023  
Document Fiscal Year Focus 2023  
Document Fiscal Period Focus Q3  
Trading Symbol NOVT  
Entity Registrant Name NOVANTA INC.  
Entity Central Index Key 0001076930  
Current Fiscal Year End Date --12-31  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Common Stock, Shares Outstanding   35,810,370
Entity Current Reporting Status Yes  
Entity Shell Company false  
Entity File Number 001-35083  
Entity Tax Identification Number 98-0110412  
Entity Address, Address Line One 125 Middlesex Turnpike  
Entity Address, City or Town Bedford  
Entity Address, State or Province MA  
Entity Address, Country US  
Entity Address, Postal Zip Code 01730  
City Area Code 781  
Local Phone Number 266-5700  
Document Quarterly Report true  
Document Transition Report false  
Entity Incorporation, State or Country Code A3  
Entity Interactive Data Current Yes  
Security Exchange Name NASDAQ  
Title of 12(b) Security Common shares, no par value  
v3.23.3
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Sep. 29, 2023
Dec. 31, 2022
Current assets    
Cash and cash equivalents $ 75,961 $ 100,105
Accounts receivable, net of allowance of $1,316 and $995, respectively 143,086 137,697
Inventories 153,809 167,997
Prepaid income taxes and income taxes receivable 5,299 1,508
Prepaid expenses and other current assets 13,167 13,212
Total current assets 391,322 420,519
Property, plant and equipment, net 103,323 103,186
Operating lease assets 40,527 43,317
Deferred tax assets 24,714 15,113
Other assets 5,653 4,414
Intangible assets, net 151,096 175,766
Goodwill 477,642 478,897
Total assets 1,194,277 1,241,212
Current liabilities    
Current portion of long-term debt 4,736 4,800
Accounts payable 63,983 75,225
Income taxes payable 7,223 13,660
Current portion of operating lease liabilities 8,072 7,793
Accrued expenses and other current liabilities 54,375 63,044
Total current liabilities 138,389 164,522
Long-term debt 347,879 430,662
Operating lease liabilities 38,577 40,808
Deferred tax liabilities 14,439 17,194
Income taxes payable 4,932 4,355
Other liabilities 5,205 6,085
Total liabilities 549,421 663,626
Commitments and contingencies (Note 14)
Stockholders’ equity:    
Preferred shares, no par value; Authorized shares: 7,000; No shares issued and outstanding
Common shares, no par value; Authorized shares: unlimited; Issued and outstanding: 35,810 and 35,711, respectively 423,856 423,856
Additional paid-in capital 63,362 55,155
Retained earnings 190,951 130,584
Accumulated other comprehensive loss (33,313) (32,009)
Total stockholders' equity 644,856 577,586
Total liabilities and stockholders’ equity $ 1,194,277 $ 1,241,212
v3.23.3
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Sep. 29, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Accounts receivable, allowance $ 1,307 $ 995
Preferred shares, no par value $ 0 $ 0
Preferred shares, Authorized 7,000,000 7,000,000
Preferred shares, Issued 0 0
Preferred shares, outstanding 0 0
Common shares, Authorized Unlimited Unlimited
Common shares, no par value $ 0 $ 0
Common shares, Issued 35,810,000 35,711,000
Common shares, outstanding 35,810,000 35,711,000
v3.23.3
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Sep. 29, 2023
Sep. 30, 2022
Income Statement [Abstract]        
Revenue $ 221,503 $ 222,958 $ 670,093 $ 642,530
Cost of revenue 119,912 124,550 366,751 358,601
Gross profit 101,591 98,408 303,342 283,929
Operating expenses:        
Research and development and engineering 22,022 21,349 68,230 63,866
Selling, general and administrative 39,648 40,301 122,758 120,191
Amortization of purchased intangible assets 5,131 6,472 15,344 20,987
Restructuring, acquisition, and related costs 4,481 1,625 8,191 2,650
Total operating expenses 71,282 69,747 214,523 207,694
Operating income 30,309 28,661 88,819 76,235
Interest income (expense), net (6,756) (4,062) (19,898) (9,928)
Foreign exchange transaction gains (losses), net (370) 2,086 (373) 2,307
Other income (expense), net (189) 87 (546) (390)
Income before income taxes 22,994 26,772 68,002 68,224
Income tax provision 1,771 4,282 7,635 9,435
Consolidated net income $ 21,223 $ 22,490 $ 60,367 $ 58,789
Earnings per common share:        
Basic $ 0.59 $ 0.63 $ 1.68 $ 1.65
Diluted $ 0.59 $ 0.63 $ 1.68 $ 1.64
Weighted average common shares outstanding—basic 35,856 35,729 35,839 35,625
Weighted average common shares outstanding—diluted 36,041 35,928 36,024 35,881
v3.23.3
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Sep. 29, 2023
Sep. 30, 2022
Statement of Comprehensive Income [Abstract]        
Consolidated net income $ 21,223 $ 22,490 $ 60,367 $ 58,789
Other comprehensive income (loss):        
Foreign currency translation adjustments, net of tax [1] (8,786) (18,972) (1,980) (37,672)
Pension liability adjustments, net of tax [2] 515 710 676 1,611
Total other comprehensive income (loss) (8,271) (18,262) (1,304) (36,061)
Total consolidated comprehensive income $ 12,952 $ 4,228 $ 59,063 $ 22,728
[1] The tax effect on this component of comprehensive income (loss) was nominal for all periods presented.
[2] The tax effect on this component of comprehensive income (loss) was nominal for all periods presented. See Note 3 to the Consolidated Financial Statements for the total amount of pension liability adjustments reclassified out of accumulated other comprehensive income (loss).
v3.23.3
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)
shares in Thousands, $ in Thousands
Total
Common Stock
Additional Paid-In Capital
Retained Earnings
Accumulated Other Comprehensive Loss
Balance at Dec. 31, 2021 $ 521,291 $ 423,856 $ 53,768 $ 56,533 $ (12,866)
Balance (in shares) at Dec. 31, 2021   35,601      
Net Income (Loss) 58,789     58,789  
Common shares issued under stock plans (in shares)   238      
Common shares withheld for taxes on vested stock awards (9,626)   (9,626)    
Common shares withheld for taxes on vested stock awards (in shares)   (66)      
Repurchases of common shares (10,000)   (10,000)    
Repurchases of common shares (in shares)   (84)      
Share-based compensation 17,809   17,809    
Other comprehensive income (loss), net of tax (36,061)       (36,061)
Balance at Sep. 30, 2022 542,202 $ 423,856 51,951 115,322 (48,927)
Balance (in shares) at Sep. 30, 2022   35,689      
Balance at Jul. 01, 2022 532,169 $ 423,856 46,146 92,832 (30,665)
Balance (in shares) at Jul. 01, 2022   35,623      
Net Income (Loss) 22,490     22,490  
Common shares issued under stock plans (in shares)   67      
Common shares withheld for taxes on vested stock awards (149)   (149)    
Common shares withheld for taxes on vested stock awards (in shares)   (1)      
Share-based compensation 5,954   5,954    
Other comprehensive income (loss), net of tax (18,262)       (18,262)
Balance at Sep. 30, 2022 542,202 $ 423,856 51,951 115,322 (48,927)
Balance (in shares) at Sep. 30, 2022   35,689      
Balance at Dec. 31, 2022 577,586 $ 423,856 55,155 130,584 (32,009)
Balance (in shares) at Dec. 31, 2022   35,711      
Net Income (Loss) 60,367     60,367  
Common shares issued under stock plans (in shares)   167      
Common shares withheld for taxes on vested stock awards (10,171)   (10,171)    
Common shares withheld for taxes on vested stock awards (in shares)   (68)      
Share-based compensation 18,378   18,378    
Other comprehensive income (loss), net of tax (1,304)       (1,304)
Balance at Sep. 29, 2023 644,856 $ 423,856 63,362 190,951 (33,313)
Balance (in shares) at Sep. 29, 2023   35,810      
Balance at Jun. 30, 2023 626,030 $ 423,856 57,488 169,728 (25,042)
Balance (in shares) at Jun. 30, 2023   35,808      
Net Income (Loss) 21,223     21,223  
Common shares issued under stock plans (in shares)   3      
Common shares withheld for taxes on vested stock awards (163)   (163)    
Common shares withheld for taxes on vested stock awards (in shares)   (1)      
Share-based compensation 6,037   6,037    
Other comprehensive income (loss), net of tax (8,271)       (8,271)
Balance at Sep. 29, 2023 $ 644,856 $ 423,856 $ 63,362 $ 190,951 $ (33,313)
Balance (in shares) at Sep. 29, 2023   35,810      
v3.23.3
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 9 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Cash flows from operating activities:    
Consolidated net income $ 60,367 $ 58,789
Adjustments to reconcile consolidated net income to net cash provided by operating activities:    
Depreciation and amortization 35,065 40,999
Provision for inventory excess and obsolescence 6,563 1,940
Impairment of assets 1,421  
Share-based compensation 18,378 17,809
Deferred income taxes (12,328) (14,628)
Write-off of unamortized deferred financing costs   624
Other 1,289 (152)
Changes in assets and liabilities which (used)/provided cash, excluding effects from business acquisitions:    
Accounts receivable (6,371) (34,444)
Inventories 5,619 (46,552)
Prepaid income taxes, income taxes receivable, prepaid expenses and other current assets (3,444) (2,041)
Accounts payable, income taxes payable, accrued expenses and other current liabilities (24,759) 29,393
Other non-current assets and liabilities (717) (1,570)
Net cash provided by operating activities 81,083 50,167
Cash flows from investing activities:    
Cash paid for business acquisitions, net of working capital adjustments   (21,565)
Purchases of property, plant and equipment (13,741) (15,385)
Payment of contingent consideration related to acquisition of technology assets   (1,470)
Other investing activities   137
Net cash used in investing activities (13,741) (38,283)
Cash flows from financing activities:    
Borrowings under revolving credit facilities   69,941
Repayments under term loan and revolving credit facilities (82,047) (37,791)
Payments of debt issuance costs   (2,492)
Payments of withholding taxes from share-based awards (10,171) (9,626)
Repurchases of common shares   (10,000)
Payments of contingent consideration related to acquisitions (81) (46,254)
Other financing activities (484) (447)
Net cash used in financing activities (92,783) (36,669)
Effect of exchange rates on cash and cash equivalents 1,297 (8,028)
Decrease in cash and cash equivalents (24,144) (32,813)
Cash and cash equivalents, beginning of the period 100,105 117,393
Cash and cash equivalents, end of the period 75,961 84,580
Supplemental disclosure of cash flow information:    
Cash paid for interest 19,290 8,962
Cash paid for income taxes 28,684 17,102
Income tax refunds received $ 275 $ 164
v3.23.3
Pay vs Performance Disclosure - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Sep. 29, 2023
Sep. 30, 2022
Pay vs Performance Disclosure        
Net Income (Loss) $ 21,223 $ 22,490 $ 60,367 $ 58,789
v3.23.3
Insider Trading Arrangements
 9 Months Ended
Sep. 29, 2023
shares
Trading Arrangements, by Individual  
Material Terms of Trading Arrangement

Rule 10b5-1 Trading Plans

The adoption or termination of contracts, instructions or written plans for the purchase or sale of our securities by our Section 16 officers and directors during the three months ended September 29, 2023, each of which is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (“Rule 10b5-1 Plan”), are summarized below.

 

Name

 

Title

 

Action

 

Date

 

Total Shares to Be Sold

 

Expiration Date

Brian S. Young

 

Chief Human Resources Officer

 

Adoption

 

September 12, 2023

 

6,119

 

September 13, 2024

None of our officers or directors adopted or terminated a “non-Rule 10b5-1 trading arrangement” as defined in Item 408 of Regulation S-K.

Non-Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Terminated false
Brian S. Young  
Trading Arrangements, by Individual  
Name Brian S. Young
Title Chief Human Resources Officer
Rule 10b5-1 Arrangement Adopted true
Adoption Date September 12, 2023
Aggregate Available 6,119
Expiration Date September 13, 2024
v3.23.3
Basis of Presentation
 9 Months Ended
Sep. 29, 2023
Accounting Policies [Abstract]  
Basis of Presentation

1. Basis of Presentation

Novanta Inc. (“Novanta” or the “Company”) is a leading global supplier of core technology solutions that give medical and advanced industrial original equipment manufacturers (“OEMs”) a competitive advantage. Novanta combines deep proprietary technology expertise and competencies in precision medicine and manufacturing, medical solutions, and robotics and automation with a proven ability to solve complex technical challenges. This enables Novanta to engineer core components and sub-systems that deliver extreme precision and performance, tailored to the customers’ demanding applications.

The accompanying unaudited interim consolidated financial statements have been prepared by the Company in United States (“U.S.”) dollars and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”), the instructions to Form 10-Q and the provisions of Regulation S-X pertaining to interim financial statements. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted. The interim consolidated financial statements and notes included in this report should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, these interim consolidated financial statements include all adjustments and accruals of a normal and recurring nature necessary to fairly state the results of the interim periods presented. The results for interim periods are not necessarily indicative of results to be expected for the full year or for any future periods.

The Company’s unaudited interim consolidated financial statements are prepared for each quarterly period ending on the Friday closest to the end of the calendar quarter, with the exception of the fourth quarter which always ends on December 31.

During the first quarter of 2023, the Company changed the names of its reportable segments from “Photonics” to “Precision Medicine and Manufacturing”, from “Vision” to “Medical Solutions”, and from “Precision Motion” to “Robotics and Automation”, respectively. The segment name changes did not result in any change to the compositions of the Company's segments and therefore did not result in any change to historical results.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Estimates and assumptions are reviewed on an on-going basis and the effects of revisions are reflected in the period in which such revisions are deemed to be necessary. The Company evaluates its estimates based on historical experience, current conditions, and various other assumptions that it believes are reasonable under the circumstances. Actual results could differ significantly from these estimates.

Recent Accounting Pronouncements

Standard

 

Description

 

Effective Date

 

Effect on the Financial Statements or Other Significant Matters

In October 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-06, “Disclosure Improvements: Codification Amendments in Response to SEC’s Disclosure Update and Simplification Initiative.”

 

ASU 2023-06 clarifies or improves disclosure and presentation requirements of a variety of topics, which allow users to easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements and align the requirements in the FASB Accounting Standards Codification with the SEC’s regulations.

 

The effective date for each amendment in ASU 2023-06 will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited.

 

The Company is currently evaluating the impact of ASU 2023-06 on its consolidated financial statements.

 
v3.23.3
Revenue
 9 Months Ended
Sep. 29, 2023
Revenue from Contract with Customer [Abstract]  
Revenue

2. Revenue

The Company recognizes revenue when control of promised goods or services is transferred to customers. The transfer of control generally occurs upon shipment when title and risk of loss pass to the customer. The vast majority of the Company’s revenue is generated from the sale of distinct products. Revenue is measured as the amount of consideration the Company expects to receive in exchange for such products, which is generally at contractually stated prices. Sales taxes and value added taxes collected concurrently with revenue generating activities are excluded from revenue.

Performance Obligations

Substantially all of the Company’s revenue is recognized at a point in time, upon shipment, rather than over time.

At the request of its customers, the Company may perform professional services, generally for the maintenance and repair of products previously sold to those customers and for engineering services. Professional services for the maintenance and repair of products are typically short in duration, mostly less than one month, and generally involve a single distinct performance obligation. The related revenue is recognized at a point in time when control transfers to the customer upon completion of professional services. The consideration expected to be received in exchange for such services is typically the contractually stated amount. Certain engineering services are longer in duration and the related revenue is recognized over time. As the Company’s right to payment from a customer is based on the value of engineering services performed, the Company recognizes revenue based on the corresponding value to the customer from the Company’s performance completed to date. Revenue from engineering services aggregated to less than 3% of the Company’s consolidated revenue during the nine months ended September 29, 2023 and September 30, 2022.

The Company occasionally sells separately priced non-standard/extended warranty services or preventative maintenance plans with the sale of products. The transfer of control over the service plans is over time. The Company recognizes the related revenue ratably over the terms of the service plans. The transaction price of a contract is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are generally determined based on the prices charged to customers or using the expected cost plus a margin.

Shipping & Handling Costs

The Company accounts for shipping and handling activities that occur after the transfer of control over the related goods as fulfillment activities rather than performance obligations. Shipping and handling fees charged to customers are recognized as revenue and the related costs are recorded in cost of revenue at the time of transfer of control.

Warranties

The standard warranty periods for the Company’s products are typically 12 months to 36 months. The Company recognizes estimated liabilities associated with standard warranty periods for its products in accordance with the provisions of ASC 450, “Contingencies,” as the Company has the ability to ascertain the likelihood of the liabilities and can reasonably estimate the amount of the liabilities. A provision for the estimated cost related to standard warranties is recorded as cost of revenue at the time revenue is recognized. The Company’s estimate of the costs to service the warranty obligations is based on historical experience and expectations of future conditions. To the extent that the Company’s experience in warranty claims or costs associated with servicing those claims differ from the original estimates, revisions to the estimated warranty liabilities are recorded at that time, with offsetting adjustments to cost of revenue.

Practical Expedients and Exemptions

The Company expenses incremental direct costs of obtaining a contract when incurred because the expected amortization period is typically one year or less. These costs are recorded within selling, general and administrative expenses in the consolidated statement of operations.

The Company does not adjust the promised amount of consideration for the effects of a financing component because the transfer of a promised good to a customer and the customer’s payment for that good are typically one year or less. The Company does not disclose the value of the remaining performance obligation for contracts with an original expected length of one year or less.

Contract Liabilities

Contract liabilities consist of deferred revenue and advance payments from customers, including amounts that are refundable. These contract liabilities are classified as either current or long-term liabilities in the consolidated balance sheet based on the timing of when the Company expects to recognize the related revenue. As of September 29, 2023 and December 31, 2022, contract liabilities were $6.8 million and $8.4 million, respectively, and are included in accrued expenses and other current liabilities and other liabilities in the accompanying consolidated balance sheets. The decrease in the contract liability balance during the nine months ended September 29, 2023 is primarily due to $6.2 million of revenue recognized during the period that was included in the contract liability balance as of December 31, 2022, partially offset by cash payments received in advance of satisfying performance obligations.

Disaggregated Revenue

See Note 15 for the Company’s disaggregation of revenue by segment, geography and end market.
v3.23.3
Accumulated Other Comprehensive Loss
 9 Months Ended
Sep. 29, 2023
Equity [Abstract]  
Accumulated Other Comprehensive Loss

3. Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss were as follows (in thousands):

 

Total Accumulated

 

 

 

 

 

 

 

 

Other

 

 

Cumulative

 

 

Pension

 

 

Comprehensive

 

 

Translation

 

 

Liability

 

 

Loss

 

 

Adjustments

 

 

Adjustments

 

Balance at December 31, 2022

$

(32,009

)

 

$

(24,427

)

 

$

(7,582

)

Other comprehensive income (loss)

 

(2,068

)

 

 

(1,980

)

 

 

(88

)

Amounts reclassified from accumulated other comprehensive loss

 

764

 

 

 

—

 

 

 

764

 

Balance at September 29, 2023

$

(33,313

)

 

$

(26,407

)

 

$

(6,906

)

The amounts reclassified from accumulated other comprehensive loss were included in other income (expense) in the consolidated statements of operations.

v3.23.3
Earnings per Common Share
 9 Months Ended
Sep. 29, 2023
Earnings Per Share [Abstract]  
Earnings per Common Share

4. Earnings per Common Share

Basic earnings per common share is computed by dividing consolidated net income by the weighted average number of common shares outstanding during the period.

For diluted earnings per common share, the denominator includes the dilutive effect of outstanding common share equivalents. The dilutive effects of outstanding common share equivalents, including outstanding service-based restricted stock units, stock options and performance-based restricted stock units, are determined using the treasury stock method. Performance-based restricted stock units are considered contingently issuable shares, the vesting of which may be based on achievement of specified company performance conditions (“attainment-based PSUs”), certain market conditions (“market-based PSUs”) or a hybrid of company performance conditions and market conditions (“hybrid PSUs”). The dilutive effects of market-based PSUs are included in the weighted average common share calculation based on the number of shares, if any, that would be issuable as of the end of the reporting period, assuming the end of the reporting period is also the end of the performance period. The dilutive effects of attainment-based and hybrid PSUs are included in the weighted average common share calculation based on the cumulative achievement against the performance targets only when the performance targets have been achieved as of the end of the reporting period.

The following table sets forth the computation of basic and diluted earnings per common share (amounts in thousands, except per share data):

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Numerators:

 

 

 

 

 

 

 

 

 

 

 

Consolidated net income

$

21,223

 

 

$

22,490

 

 

$

60,367

 

 

$

58,789

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominators:

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding— basic

 

35,856

 

 

 

35,729

 

 

 

35,839

 

 

 

35,625

 

Dilutive potential common shares

 

185

 

 

 

199

 

 

 

185

 

 

 

256

 

Weighted average common shares outstanding— diluted

 

36,041

 

 

 

35,928

 

 

 

36,024

 

 

 

35,881

 

Antidilutive potential common shares excluded from above

 

49

 

 

 

73

 

 

 

101

 

 

 

104

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Common Share:

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.59

 

 

$

0.63

 

 

$

1.68

 

 

$

1.65

 

Diluted

$

0.59

 

 

$

0.63

 

 

$

1.68

 

 

$

1.64

 

For both the three and nine months ended September 29, 2023, 143 thousand shares of performance-based restricted stock units were excluded from the calculation of the denominator because they were attainment-based and hybrid contingently issuable shares and the related performance targets had not been achieved as of September 29, 2023.

For both the three and nine months ended September 30, 2022, 124 thousand shares of performance-based restricted stock units were excluded from the calculation of the denominator because they were attainment-based contingently issuable shares and the related performance targets had not been achieved as of September 30, 2022.
v3.23.3
Fair Value Measurements
 9 Months Ended
Sep. 29, 2023
Fair Value Disclosures [Abstract]  
Fair Value Measurements

5. Fair Value Measurements

ASC 820, “Fair Value Measurements,” establishes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the third is considered unobservable:

•
Level 1: Quoted prices for identical assets or liabilities in active markets which the Company can access
•
Level 2: Observable inputs other than those described in Level 1
•
Level 3: Unobservable inputs

Current Assets and Liabilities

The Company’s cash equivalents are highly liquid investments with original maturities of three months or less, which represent assets measured at fair value on a recurring basis. The Company determines the fair value of cash equivalents using a market approach based on quoted prices in active markets. The fair values of cash equivalents, accounts receivable, income taxes receivable, accounts payable, income taxes payable and accrued expenses and other current liabilities approximate their carrying values because of their short-term nature.

Foreign Currency Contracts

The Company addresses market risks from changes in foreign currency exchange rates through a risk management program that includes the use of derivative financial instruments to mitigate certain balance sheet foreign currency transaction exposures. The Company uses foreign currency forward contracts as a part of its strategy to manage exposures related to foreign currency denominated monetary assets and liabilities. The fair value of these foreign currency forward contracts is reported either in other current assets or in other current liabilities as of the end of the period.

Contingent Considerations

On July 31, 2019, the Company acquired ARGES GmbH (“ARGES”). Under the purchase and sale agreement for the ARGES acquisition, the former owner of ARGES is eligible to receive contingent consideration based on the achievement of certain revenue targets by the Company from August 2019 through December 2026. The undiscounted range of possible contingent consideration is zero to €10.0 million ($11.1 million). If the revenue targets are achieved, the contingent consideration would be payable annually with the first payment due in the first quarter of 2021. The estimated fair value of the contingent consideration of €7.1 million ($7.9 million) was determined based on the Monte Carlo valuation method and was recorded as part of the purchase price as of the acquisition date. Subsequent changes in the estimated fair value of the contingent consideration liability are recorded in the consolidated statement of operations in restructuring, acquisition, and related costs until the liability is fully settled. During 2020, the fair value of the contingent consideration was adjusted to €4.1 million ($5.1 million). During 2021, the Company made the first installment payment of €0.4 million ($0.4 million) in March 2021 and adjusted the fair value of the contingent consideration to €3.3 million ($3.8 million) as of December 31, 2021. During 2022, the Company made the second installment payment of €0.3 million ($0.4 million) in March 2022 and adjusted the fair value of the contingent consideration to €0.4 million ($0.4 million). During the nine months ended September 29, 2023, the Company made the third installment payment of €0.1 million ($0.1 million). The installment payments have been reported as cash outflows from financing activities in the consolidated statement of cash flows for the respective periods. Based on the revenue performance and revenue projections as of September 29, 2023, the Company did not make any adjustments to the fair value of the remaining contingent consideration during the nine months ended September 29, 2023.

Summary by Fair Value Hierarchy

The following table summarizes the fair values of the Company’s assets and liabilities measured at fair value on a recurring basis as of September 29, 2023 (in thousands):

 

 

 

 

 

Quoted Prices in

 

 

 

 

 

Significant Other

 

 

 

 

 

Active Markets for

 

 

Significant Other

 

 

Unobservable

 

 

 

 

 

Identical Assets

 

 

Observable Inputs

 

 

Inputs

 

 

Fair Value

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

$

1,724

 

 

$

1,724

 

 

$

—

 

 

$

—

 

Prepaid expenses and other current assets:

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward contracts

 

237

 

 

 

—

 

 

 

237

 

 

 

—

 

 

$

1,961

 

 

$

1,724

 

 

$

237

 

 

$

—

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Accrued expenses and other current liabilities:

 

 

 

 

 

 

 

 

 

 

 

Contingent considerations - Current

$

45

 

 

$

—

 

 

$

—

 

 

$

45

 

Foreign currency forward contracts

 

23

 

 

 

—

 

 

 

23

 

 

 

—

 

Other liabilities:

 

 

 

 

 

 

 

 

 

 

 

Contingent considerations - Long-term

 

296

 

 

 

—

 

 

 

—

 

 

 

296

 

 

$

364

 

 

$

—

 

 

$

23

 

 

$

341

 

 

The following table summarizes the fair values of the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 (in thousands):

 

 

 

 

 

Quoted Prices in

 

 

 

 

 

Significant Other

 

 

 

 

 

Active Markets for

 

 

Significant Other

 

 

Unobservable

 

 

 

 

 

Identical Assets

 

 

Observable Inputs

 

 

Inputs

 

 

Fair Value

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

$

1,369

 

 

$

1,369

 

 

$

—

 

 

$

—

 

Prepaid expenses and other current assets:

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward contracts

 

391

 

 

 

—

 

 

 

391

 

 

 

—

 

 

$

1,760

 

 

$

1,369

 

 

$

391

 

 

$

—

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Accrued expenses and other current liabilities:

 

 

 

 

 

 

 

 

 

 

 

Contingent considerations - Current

$

124

 

 

$

—

 

 

$

—

 

 

$

124

 

Foreign currency forward contracts

 

412

 

 

 

—

 

 

 

412

 

 

 

—

 

Other liabilities:

 

 

 

 

 

 

 

 

 

 

 

Contingent considerations - Long-term

 

301

 

 

 

—

 

 

 

—

 

 

 

301

 

 

$

837

 

 

$

—

 

 

$

412

 

 

$

425

 

Changes in the fair value of Level 3 contingent considerations during the nine months ended September 29, 2023 were as follows (in thousands):

 

 

Amount

 

Balance at December 31, 2022

$

425

 

Payments

 

(81

)

Fair value adjustments

 

—

 

Effect of foreign exchange rates

 

(3

)

Balance at September 29, 2023

$

341

 

See Note 9 to Consolidated Financial Statements for a discussion of the estimated fair value of the Company’s outstanding debt.
v3.23.3
Foreign Currency Contracts
 9 Months Ended
Sep. 29, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Foreign Currency Contracts

6. Foreign Currency Contracts

The Company addresses market risks from changes in foreign currency exchange rates through a risk management program that includes the use of derivative financial instruments to mitigate certain foreign currency transaction exposures from future settlement of non-functional currency monetary assets and liabilities as of the end of a period. The Company does not enter into derivative transactions for speculative purposes. Gains and losses on derivative financial instruments substantially offset losses and gains on the underlying hedged exposures and are included in foreign exchange transaction gains (losses) in the consolidated statements of operations. Furthermore, the Company manages its exposures to counterparty risks on derivative instruments by entering into contracts with a diversified group of major financial institutions and by actively monitoring outstanding positions.

As of September 29, 2023, the aggregate notional amount and fair value of the Company’s foreign currency forward contracts was $163.5 million and a net gain of $0.2 million, respectively. As of December 31, 2022, the aggregate notional amount and fair value of the Company’s foreign currency forward contracts was $117.1 million and a net loss of less than $0.1 million, respectively.

The Company recognized an aggregate net loss of $0.2 million and aggregate net gain of $2.5 million for the three and nine months ended September 29, 2023, respectively. The Company recognized an aggregate net loss of $0.8 million and $2.3 million for the three and nine months ended September 30, 2022, respectively.
v3.23.3
Goodwill and Intangible Assets
 9 Months Ended
Sep. 29, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets

7. Goodwill and Intangible Assets

Goodwill

Goodwill is recorded when the consideration for a business combination exceeds the fair value of net tangible and identifiable intangible assets acquired. The Company tests its goodwill balances for impairment annually as of the beginning of the second quarter or more frequently if indicators are present or changes in circumstances suggest that an impairment may exist. The Company performed the most recent annual goodwill and indefinite-lived intangible asset impairment test as of the beginning of the second quarter of 2023 and noted no impairment.

The following table summarizes changes in goodwill during the nine months ended September 29, 2023 (in thousands):

Balance at beginning of the period

$

478,897

 

Effect of foreign exchange rate changes

 

(1,255

)

Balance at end of the period

$

477,642

 

Goodwill by reportable segment as of September 29, 2023 was as follows (in thousands):

 

Reportable Segment

 

 

 

 

 

Precision Medicine and Manufacturing

 

 

Medical Solutions

 

 

Robotics and Automation

 

 

Total

 

Goodwill

$

208,110

 

 

$

166,905

 

 

$

253,856

 

 

$

628,871

 

Accumulated impairment of goodwill

 

(102,461

)

 

 

(31,722

)

 

 

(17,046

)

 

 

(151,229

)

Total

$

105,649

 

 

$

135,183

 

 

$

236,810

 

 

$

477,642

 

Goodwill by reportable segment as of December 31, 2022 was as follows (in thousands):

 

Reportable Segment

 

 

 

 

 

Precision Medicine and Manufacturing

 

 

Medical Solutions

 

 

Robotics and Automation

 

 

Total

 

Goodwill

$

208,387

 

 

$

167,891

 

 

$

253,848

 

 

$

630,126

 

Accumulated impairment of goodwill

 

(102,461

)

 

 

(31,722

)

 

 

(17,046

)

 

 

(151,229

)

Total

$

105,926

 

 

$

136,169

 

 

$

236,802

 

 

$

478,897

 

Intangible Assets

Intangible assets as of September 29, 2023 and December 31, 2022, respectively, are summarized as follows (in thousands):

 

September 29, 2023

 

 

December 31, 2022

 

 

Gross Carrying
Amount

 

 

Accumulated
Amortization

 

 

Net Carrying
Amount

 

 

Gross Carrying
Amount

 

 

Accumulated
Amortization

 

 

Net Carrying
Amount

 

Amortizable intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Patents and developed technologies

$

184,246

 

 

$

(141,182

)

 

$

43,064

 

 

$

184,589

 

 

$

(132,350

)

 

$

52,239

 

Customer relationships

 

221,706

 

 

 

(135,476

)

 

 

86,230

 

 

 

222,173

 

 

 

(121,527

)

 

 

100,646

 

Trademarks and trade names

 

23,297

 

 

 

(14,522

)

 

 

8,775

 

 

 

23,311

 

 

 

(13,457

)

 

 

9,854

 

Amortizable intangible assets

 

429,249

 

 

 

(291,180

)

 

 

138,069

 

 

 

430,073

 

 

 

(267,334

)

 

 

162,739

 

Non-amortizable intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade names

 

13,027

 

 

 

—

 

 

 

13,027

 

 

 

13,027

 

 

 

—

 

 

 

13,027

 

Total intangible assets

$

442,276

 

 

$

(291,180

)

 

$

151,096

 

 

$

443,100

 

 

$

(267,334

)

 

$

175,766

 

 

 

All definite-lived intangible assets are amortized either on a straight-line basis or an economic benefit basis over their remaining estimated useful life. Amortization expense for patents and developed technologies is included in cost of revenue in the accompanying consolidated statements of operations. Amortization expense for customer relationships and definite-lived trademarks, trade names and other intangibles is included in operating expenses in the accompanying consolidated statements of operations. Amortization expense was as follows (in thousands):

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Amortization expense – cost of revenue

$

3,051

 

 

$

3,247

 

 

$

9,119

 

 

$

10,004

 

Amortization expense – operating expenses

 

5,131

 

 

 

6,472

 

 

 

15,344

 

 

 

20,987

 

Total amortization expense

$

8,182

 

 

$

9,719

 

 

$

24,463

 

 

$

30,991

 

As of September 29, 2023, estimated amortization expense for each of the five succeeding years and thereafter was as follows (in thousands):

Year Ending December 31,

 

Cost of Revenue

 

 

Operating
Expenses

 

 

Total

 

2023 (remainder of year)

 

$

3,005

 

 

$

5,065

 

 

$

8,070

 

2024

 

 

9,771

 

 

 

16,998

 

 

 

26,769

 

2025

 

 

8,289

 

 

 

14,378

 

 

 

22,667

 

2026

 

 

6,933

 

 

 

12,227

 

 

 

19,160

 

2027

 

 

4,197

 

 

 

9,861

 

 

 

14,058

 

Thereafter

 

 

10,869

 

 

 

36,476

 

 

 

47,345

 

Total

 

$

43,064

 

 

$

95,005

 

 

$

138,069

 
v3.23.3
Supplementary Balance Sheet Information
 9 Months Ended
Sep. 29, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Supplementary Balance Sheet Information

8. Supplementary Balance Sheet Information

The following tables provide the details of selected balance sheet items as of the periods indicated (in thousands):

Inventories

 

September 29,

 

 

December 31,

 

 

2023

 

 

2022

 

Raw materials

$

109,067

 

 

$

118,292

 

Work-in-process

 

21,266

 

 

 

23,328

 

Finished goods

 

23,096

 

 

 

25,738

 

Demo and consigned inventory

 

380

 

 

 

639

 

Total inventories

$

153,809

 

 

$

167,997

 

Accrued Expenses and Other Current Liabilities

 

September 29,

 

 

December 31,

 

 

2023

 

 

2022

 

Accrued compensation and benefits

$

26,691

 

 

$

35,501

 

Accrued warranty

 

5,498

 

 

 

5,127

 

Contract liabilities, current portion

 

6,576

 

 

 

8,128

 

Finance lease obligations

 

708

 

 

 

668

 

Other

 

14,902

 

 

 

13,620

 

Total

$

54,375

 

 

$

63,044

 

 

Accrued Warranty

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

Balance at beginning of the period

$

5,127

 

 

$

4,783

 

Provision charged to cost of revenue

 

1,837

 

 

 

2,091

 

Use of provision

 

(1,467

)

 

 

(1,933

)

Foreign currency exchange rate changes

 

1

 

 

 

(203

)

Balance at end of the period

$

5,498

 

 

$

4,738

 

Other Long-Term Liabilities

 

September 29,

 

 

December 31,

 

 

2023

 

 

2022

 

Finance lease obligations

$

4,117

 

 

$

4,652

 

Accrued contingent considerations and earn-outs

 

296

 

 

 

301

 

Other

 

792

 

 

 

1,132

 

Total

$

5,205

 

 

$

6,085

 
v3.23.3
Debt
 9 Months Ended
Sep. 29, 2023
Debt Disclosure [Abstract]  
Debt

9. Debt

Outstanding debt consisted of the following (in thousands):

 

September 29,

 

 

December 31,

 

 

2023

 

 

2022

 

Senior Credit Facilities – term loan

$

4,763

 

 

$

4,832

 

Less: unamortized debt issuance costs

 

(27

)

 

 

(32

)

Total current portion of long-term debt

$

4,736

 

 

$

4,800

 

 

 

 

 

 

 

Senior Credit Facilities – term loan

$

72,400

 

 

$

77,060

 

Senior Credit Facilities – revolving credit facility

 

279,423

 

 

 

358,413

 

Less: unamortized debt issuance costs

 

(3,944

)

 

 

(4,811

)

Total long-term debt

$

347,879

 

 

$

430,662

 

 

 

 

 

 

 

Total Senior Credit Facilities

$

352,615

 

 

$

435,462

 

Senior Credit Facilities

On December 31, 2019, the Company entered into an amended and restated credit agreement (the “Third Amended and Restated Credit Agreement”) with existing lenders for an aggregate credit facility of $450.0 million, consisting of a $100.0 million U.S. dollar equivalent euro-denominated (approximately €90.2 million) 5-year term loan facility and a $350.0 million 5-year revolving credit facility (collectively, the “Senior Credit Facilities”).

The outstanding principal balance under the term loan facility is payable in quarterly installments of €1.1 million that began in March 2020, with the remaining balance due upon maturity. The Company may make additional principal payments at any time, which will reduce the next quarterly installment payment due. Borrowings under the revolving credit facility may be repaid at any time until maturity. The Company made principal payments of €3.4 million ($3.6 million) towards its term loan and $78.4 million towards its revolving credit facility during the nine months ended September 29, 2023.

On March 27, 2020, the Company entered into an amendment (the “First Amendment”) to the Third Amended and Restated Credit Agreement and exercised a portion of the uncommitted accordion option. The First Amendment increased the revolving credit facility commitment under the Third Amended and Restated Credit Agreement by $145.0 million, from $350.0 million to $495.0 million, and reset the uncommitted accordion option to $200.0 million for potential future expansion.

On October 5, 2021, the Company entered into an amendment (the “Fourth Amendment”) to the Third Amended and Restated Credit Agreement to exercise the accordion option. The Fourth Amendment increased the revolving credit facility commitment under the Third Amended and Restated Credit Agreement by $200.0 million, from $495.0 million to $695.0 million, and reset the uncommitted accordion option to $200.0 million for potential future expansion.

On March 10, 2022, the Company entered into an amendment (the “Fifth Amendment”) to the Third Amended and Restated Credit Agreement to extend the maturity date from December 31, 2024 to March 10, 2027, update the pricing grid, replace LIBOR with SOFR as the reference rate for U.S. dollar borrowings, and increase the uncommitted accordion option from $200 million to $350 million. In connection with the Fifth Amendment, the Company capitalized $2.5 million deferred financing costs and recorded a $0.6 million loss from the write-off of a portion of the unamortized deferred financing costs.

The Company is required to satisfy certain financial and non-financial covenants under the Third Amended and Restated Credit Agreement. The Third Amended and Restated Credit Agreement also contains customary events of default. The Company was in compliance with these covenants as of September 29, 2023.

Liens

The Company’s obligations under the Senior Credit Facilities are secured, on a senior basis, by a lien on substantially all of the assets of Novanta Inc.

Fair Value of Debt

As of September 29, 2023 and December 31, 2022, the outstanding balance of the Company’s debt approximated its fair value based on current rates available to the Company for debt of similar maturities. The fair value of the Company’s debt is classified as Level 2 under the fair value hierarchy.
v3.23.3
Leases
 9 Months Ended
Sep. 29, 2023
Leases [Abstract]  
Leases

10. Leases

Most leases held by the Company expire between 2023 and 2036. In the U.K., where longer lease terms are more common, the Company has a land lease that extends through 2078. Certain leases include one or more options to renew, with renewal terms that can extend the lease term from one to ten years, and options to terminate the leases within one year. The exercise of lease renewal or termination options is at the Company’s sole discretion; therefore, the majority of renewal options to extend the lease terms are not included in the Company’s right-of-use assets and operating lease liabilities as they are not reasonably certain of being exercised. The Company regularly evaluates the renewal options and includes the renewal periods in the lease term when they are reasonably certain of being exercised. The depreciable lives of the right-of-use assets and leasehold improvements are limited to the expected lease terms.

The following table summarizes the components of lease costs (in thousands):

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating lease cost

$

2,639

 

 

$

2,544

 

 

$

7,916

 

 

$

7,936

 

Finance lease cost

 

 

 

 

 

 

 

 

 

 

 

Amortization of right-of-use assets

 

150

 

 

 

150

 

 

 

452

 

 

 

451

 

Interest on lease liabilities

 

68

 

 

 

77

 

 

 

208

 

 

 

234

 

Variable lease cost

 

227

 

 

 

271

 

 

 

787

 

 

 

888

 

Total lease cost

$

3,084

 

 

$

3,042

 

 

$

9,363

 

 

$

9,509

 

 

The following table provides additional details of balance sheet information related to the Company’s leases (in thousands, except lease term and discount rate):

 

September 29,

 

 

December 31,

 

 

2023

 

 

2022

 

Operating leases

 

 

 

 

 

Operating lease right-of-use assets

$

40,527

 

 

$

43,317

 

 

 

 

 

 

 

Current portion of operating lease liabilities

$

8,072

 

 

$

7,793

 

Operating lease liabilities

 

38,577

 

 

 

40,808

 

Total operating lease liabilities

$

46,649

 

 

$

48,601

 

 

 

 

 

 

 

Finance leases

 

 

 

 

 

Property, plant and equipment, gross

$

9,582

 

 

$

9,582

 

Accumulated depreciation

 

(6,122

)

 

 

(5,670

)

Finance lease assets included in property, plant and equipment, net

$

3,460

 

 

$

3,912

 

 

 

 

 

 

 

Accrued expenses and other current liabilities

$

708

 

 

$

668

 

Other liabilities

 

4,117

 

 

 

4,652

 

Total finance lease liabilities

$

4,825

 

 

$

5,320

 

 

 

 

 

 

 

Weighted-average remaining lease term (in years):

 

 

 

 

 

Operating leases

 

7.7

 

 

 

8.2

 

Finance leases

 

5.8

 

 

 

6.5

 

 

 

 

 

 

 

Weighted-average discount rate:

 

 

 

 

 

Operating leases

 

4.84

%

 

 

4.64

%

Finance leases

 

5.54

%

 

 

5.54

%

The following table provides additional details of cash flow information related to the Company’s leases (in thousands):

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

Cash paid for amounts included in lease liabilities:

 

 

 

 

 

Operating cash flows from finance leases

$

208

 

 

$

234

 

Operating cash flows from operating leases

$

5,916

 

 

$

5,921

 

Financing cash flows from finance leases

$

484

 

 

$

447

 

 

 

 

 

 

 

Supplemental non-cash information:

 

 

 

 

 

Right-of-use assets obtained in exchange for new operating lease liabilities

$

3,893

 

 

$

4,621

 

 

Future minimum lease payments under operating and finance leases expiring subsequent to September 29, 2023, including operating leases associated with facilities that have been vacated as a result of the Company’s restructuring actions, are summarized as follows (in thousands):

Year Ending December 31,

Operating Leases

 

 

Finance Leases

 

2023 (remainder of year)

$

2,426

 

 

$

238

 

2024

 

9,617

 

 

 

954

 

2025

 

9,386

 

 

 

954

 

2026

 

7,945

 

 

 

979

 

2027

 

7,066

 

 

 

1,003

 

Thereafter

 

20,832

 

 

 

1,505

 

Total minimum lease payments

 

57,272

 

 

 

5,633

 

Less: Interest

 

(10,623

)

 

 

(808

)

Present value of lease liabilities

$

46,649

 

 

$

4,825

 
v3.23.3
Preferred and Common Shares and Share-Based Compensation
 9 Months Ended
Sep. 29, 2023
Share-Based Payment Arrangement [Abstract]  
Preferred and Common Shares and Share-Based Compensation

11. Preferred and Common Shares and Share-Based Compensation

Preferred Shares

In May 2021, the Company’s shareholders approved a special resolution to amend the Company’s articles to authorize up to 7.0 million preferred shares for future issuance. The Company’s Board of Directors is authorized to designate and issue one or more series of preferred shares, fix the rights, preferences and designation, as deemed necessary or advisable, relating to the preferred shares, provided that no shares of any series may be entitled to more than one vote per share. As of September 29, 2023, no preferred shares had been issued and outstanding.

Common Share Repurchases

In February 2020, the Company’s Board of Directors approved a new share repurchase plan (the “2020 Repurchase Plan”), authorizing the repurchase of $50.0 million worth of the Company’s common shares. During the nine months ended September 30, 2022, the Company repurchased 4 thousand shares under the 2020 Repurchase Plan for an aggregate purchase price of $0.5 million and an average price of $116.95 per share. During the nine months ended September 29, 2023, the Company did not repurchase any shares. As of September 29, 2023, the Company had $49.5 million available for future share repurchases under the 2020 Repurchase Plan.

Share-Based Compensation Expense

The table below summarizes share-based compensation expense recorded in the consolidated statements of operations (in thousands):

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Selling, general and administrative

$

5,229

 

 

$

4,649

 

 

$

15,631

 

 

$

13,906

 

Research and development and engineering

 

510

 

 

 

586

 

 

 

1,495

 

 

 

1,780

 

Cost of revenue

 

298

 

 

 

719

 

 

 

1,252

 

 

 

2,123

 

Total share-based compensation expense

$

6,037

 

 

$

5,954

 

 

$

18,378

 

 

$

17,809

 

Share-based compensation expense reported in selling, general and administrative expenses included expenses related to restricted stock units and deferred stock units granted to the members of the Company’s Board of Directors of $1.2 million and $1.1 million during the nine months ended September 29, 2023 and September 30, 2022, respectively.

Restricted Stock Units and Deferred Stock Units

The Company’s restricted stock units (“RSUs”) have generally been issued with vesting periods ranging from zero to five years and vest based solely on service conditions. Accordingly, the Company recognizes compensation expense on a straight-line basis

over the requisite service period. The Company reduces the compensation expense by an estimated forfeiture rate which is based on anticipated forfeitures and historical forfeiture experience.

Deferred stock units (“DSUs”) are granted to the members of the Company’s Board of Directors (the “Board”). Compensation expense associated with the DSUs is recognized in full on the date of grant, as the DSUs are fully vested and non-forfeitable upon grant. Outstanding DSUs are converted into common shares upon Board members' resignation or retirement from the Board. There were 41 thousand and 38 thousand DSUs outstanding as of September 29, 2023 and December 31, 2022, respectively. Outstanding DSUs are included in the calculation of weighted average basic shares outstanding for the respective periods.

The table below summarizes activities relating to RSUs and DSUs issued and outstanding under the Company’s Amended and Restated 2010 Incentive Plan during the nine months ended September 29, 2023:

 

 

Shares
(In thousands)

 

 

Weighted
Average Grant
Date Fair Value

 

Unvested at December 31, 2022

 

238

 

 

$

128.26

 

Granted

 

91

 

 

$

156.47

 

Vested

 

(102

)

 

$

122.48

 

Forfeited

 

(24

)

 

$

139.50

 

Unvested at September 29, 2023

 

203

 

 

$

142.72

 

Expected to vest as of September 29, 2023

 

185

 

 

 

 

 

The total fair value of RSUs and DSUs that vested during the nine months ended September 29, 2023 was $15.2 million based on the market price of the underlying shares on the date of vesting.

Performance Stock Units

The Company typically grants performance-based restricted stock unit awards (“PSUs”) that are based on the Company's financial metrics, market conditions, or a hybrid of financial metrics and market conditions. These performance stock unit awards generally cliff vest on the first day following the end of the specified performance period.

The number of common shares to be issued upon settlement following vesting of attainment-based PSUs is determined based on the Company’s financial metrics over the specified performance period against the targets established by the Company’s Board of Directors at the time of grant and will be in the range of zero to 200% of the target number of shares. The Company recognizes compensation expense ratably over the performance period based on the number of shares that are deemed probable of vesting at the end of the specified performance period. This probability assessment is performed quarterly and the cumulative effect of a change in the estimated compensation expense, if any, is recognized in the consolidated statement of operations in the period in which such determination is made.

The number of common shares to be issued upon settlement following vesting of market-based PSUs is determined based on the relative market performance of the Company’s common stock compared to the Russell 2000 Index over the specified performance period using a payout formula established by the Company’s Board of Directors at the time of grant and will be in the range of zero to 200% of the target number of shares. The Company recognizes the related compensation expense based on the fair value of the market-based PSUs, determined using the Monte-Carlo valuation model as of the grant date, on a straight-line basis from the grant date to the end of the specified performance period. Compensation expense on market-based PSUs will not be affected by the number of shares that will ultimately vest at the end of the specified performance period.

The number of common shares to be issued upon settlement following vesting of PSU awards that are based on the achievement of a hybrid of financial metrics and market conditions (“Hybrid PSUs”) is determined based on the Company's financial metrics achieved over the specified performance period against the targets established by the Company's Board of Directors at the time of grant with a market condition multiplier and will be in the range of zero to 260% of the target number of shares. The Company determines the fair value of these Hybrid PSUs using the Monte-Carlo valuation model as of the grant date. The Company recognizes compensation expense associated with the Hybrid PSUs ratably over the performance period based on the fair value of the PSUs as of the grant date and the number of shares that are deemed probable of vesting at the end of the specified performance period. The probability assessment is performed quarterly and the cumulative effect of a change in the estimated compensation expense, if any, is recognized in the consolidated statement of operations in the period in which such determination is made.

The table below summarizes the activities relating to the performance-based awards issued and outstanding under the Company’s Amended and Restated 2010 Incentive Plan during the nine months ended September 29, 2023:

 

 

Shares
(In thousands)

 

 

Weighted
Average Grant
Date Fair Value

 

Unvested at December 31, 2022

 

216

 

 

$

144.16

 

Granted

 

57

 

 

$

179.15

 

Performance adjustments(1)

 

20

 

 

$

122.24

 

Vested

 

(70

)

 

$

116.56

 

Forfeited

 

(16

)

 

$

168.97

 

Unvested at September 29, 2023

 

207

 

 

$

160.40

 

Expected to vest as of September 29, 2023

 

246

 

 

 

 

(1) The amount shown represents performance adjustments related to the performance-based awards granted on February 20, 2020. These performance-based awards vested at a blended payout of 142% during the nine months ended September 29, 2023 based on the achievement of cumulative Non-GAAP EPS and applicable relative TSR performance conditions, respectively, over the performance period of fiscal years 2020 through 2022.

The unvested PSUs are shown at target payout levels in the table above. As of September 29, 2023, the maximum number of common shares that could be earned under these PSU grants was approximately 369 thousand shares.

The total fair value of PSUs that vested during the nine months ended September 29, 2023 was $9.9 million based on the market price of the underlying common shares on the date of vesting.

The grant-date fair value of the hybrid PSUs granted during the nine months ended September 29, 2023 was estimated using the Monte Carlo valuation method with the following assumptions:

 

 

Nine Months Ended
September 29, 2023

 

Grant-date stock price

$

156.72

 

Expected volatility

 

35.89

%

Risk-free interest rate

 

4.44

%

Expected annual dividend yield

 

—

 

Fair value

$

181.45

 

Stock Options

In February 2023, the Company granted 48 thousand nonqualified stock options to certain members of the executive management team to purchase common shares of the Company at a strike price equal to the closing market price on the date of grant. The stock options vest ratably over three years on the anniversary of the date of grant and expire on the seventh anniversary of the date of grant. The Company estimates the fair value of stock options using the Black-Scholes valuation model. The Company recognizes compensation expense related to the stock options on a straight-line basis over the vesting period in the consolidated statement of operations.

The table below summarizes the activities relating to stock options issued and outstanding under the Company’s Amended and Restated 2010 Incentive Plan during the nine months ended September 29, 2023:

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares
(In thousands)

 

 

Weighted
Average Exercise Price

 

Outstanding as of December 31, 2022

 

84

 

 

$

72.18

 

Granted

 

48

 

 

$

156.72

 

Exercised

 

—

 

 

$

—

 

Forfeited or expired

 

—

 

 

$

—

 

Outstanding as of September 29, 2023

 

132

 

 

$

102.86

 

Exercisable as of September 29, 2023

 

57

 

 

 

 

Expected to vest as of September 29, 2023

 

75

 

 

 

 

The aggregate Black-Scholes fair value of $3.0 million for the stock options granted during the nine months ended September 29, 2023 was estimated using the following assumptions as of the grant date:

 

Nine Months Ended
September 29, 2023

 

Expected option term in years

 

4.5

 

Expected volatility

 

40.7

%

Risk-free interest rate

 

4.00

%

Expected annual dividend yield

 

—

 

The expected option term was calculated using the simplified method permitted under Codification of Staff Accounting Bulletins Topic 14, “Share-Based Payment”. The expected volatility was determined based on the historical volatility of the Company’s common shares over the expected option term. The risk-free interest rate was based on treasury instrument whose term was six months longer than the expected option term. The expected annual dividend yield is zero as the Company does not have plans to issue dividends.

v3.23.3
Income Taxes
 9 Months Ended
Sep. 29, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

12. Income Taxes

The Company determines its estimated annual effective tax rate at the end of each interim period based on full-year forecasted pre-tax income and facts known at that time. The estimated annual effective tax rate is applied to the year-to-date pre-tax income at the end of each interim period with the cumulative effect of any changes in the estimated annual effective tax rate being recorded in the period in which the changes are determined. The tax effect of significant unusual items is reflected in the period in which they occur. Since the Company is incorporated in Canada, it is required to use Canada’s statutory tax rate of 29.0% in the determination of the estimated annual effective tax rate.

The Company maintains a valuation allowance on balances of certain U.S. state net operating losses, credits and certain non-U.S. tax attributes that the Company has determined are not more likely than not to be realized. A valuation allowance is required when, based upon an assessment of various factors, including recent operating loss history, anticipated future earnings, and prudent and reasonable tax planning strategies, it is more likely than not that some portion of the deferred tax assets will not be realized. In conjunction with the Company’s ongoing review of its actual results and anticipated future earnings, the Company continuously reassesses the possibility of adding a new or additional valuation allowance or releasing the valuation allowance currently in place on its deferred tax assets.

The Company’s effective tax rate of 7.7% for the three months ended September 29, 2023 differs from the Canadian statutory tax rate of 29.0% primarily due to the mix of income earned in jurisdictions with varying tax rates, estimated deductions for Foreign Derived Intangible Income, U.K. patent box deductions, R&D tax credits, and tax benefits of share-based compensation awards, partially offset by disallowed compensation deductions and uncertain tax position accruals.

The Company’s effective tax rate of 11.2% for the nine months ended September 29, 2023 differs from the Canadian statutory tax rate of 29.0% primarily due to the mix of income earned in jurisdictions with varying tax rates, estimated deductions for Foreign Derived Intangible Income, U.K. patent box deductions, R&D tax credits, and tax benefits of share-based compensation awards, partially offset by disallowed compensation deductions and uncertain tax position accruals. For the nine months ended September 29, 2023, the tax benefits of share-based compensation awards had a benefit of 4.5% on the Company’s effective tax rate.

The Company’s effective tax rate of 16.0% for the three months ended September 30, 2022 differs from the Canadian statutory tax rate of 29.0% primarily due to the mix of income earned in jurisdictions with varying tax rates, estimated deductions for Foreign Derived Intangible Income, U.K. patent box deductions and R&D tax credits, partially offset by disallowed compensation deductions and uncertain tax position accruals.

The Company’s effective tax rate of 13.8% for the nine months ended September 30, 2022 differs from the Canadian statutory tax rate of 29.0% primarily due to the mix of income earned in jurisdictions with varying tax rates, estimated deductions for Foreign Derived Intangible Income, U.K. patent box deductions, R&D tax credits, and tax benefits of share-based compensation awards, partially offset by disallowed compensation deductions and uncertain tax position accruals. For the nine months ended September 30, 2022, the tax benefits of share-based compensation awards had a benefit of 0.2% on the Company’s effective tax rate.
v3.23.3
Restructuring, Acquisition, and Related Costs
 9 Months Ended
Sep. 29, 2023
Restructuring and Related Activities [Abstract]  
Restructuring, Acquisition, and Related Costs

13. Restructuring, Acquisition, and Related Costs

The following table summarizes restructuring, acquisition, and related costs in the accompanying consolidated statements of operations (in thousands):

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

2022 restructuring

$

2,450

 

 

$

889

 

 

$

5,324

 

 

$

889

 

2020 restructuring

 

1,880

 

 

 

887

 

 

 

2,613

 

 

 

2,119

 

Total restructuring charges

 

4,330

 

 

 

1,776

 

 

 

7,937

 

 

 

3,008

 

Acquisition and related charges

 

151

 

 

 

(151

)

 

 

254

 

 

 

(358

)

Total restructuring, acquisition, and related costs

$

4,481

 

 

$

1,625

 

 

$

8,191

 

 

$

2,650

 

2022 Restructuring

As a result of the Company’s ongoing evaluations and efforts to reduce its operating costs, while improving efficiency and effectiveness, the Company initiated the 2022 restructuring program in the third quarter of 2022. This program is focused on reducing operating complexity in the Company, including reducing infrastructure costs and streamlining the Company’s operating model to better serve its customers. In addition, the program is focused on cost reduction actions that improve gross margins for the overall company in line with the Company's multi-year gross margin expansion program. During the three and nine months ended September 29, 2023, the Company recorded $2.5 million and $5.3 million, respectively, in severance, facility related, and other charges in connection with the 2022 restructuring program. As of September 29, 2023, the Company had incurred cumulative costs of $6.7 million related to this restructuring plan. The Company anticipates substantially completing the 2022 restructuring program by the end of 2023 and expects to incur additional restructuring charges of $2.5 million to $3.0 million related to the 2022 restructuring program.

 

The following table summarizes restructuring costs associated with the 2022 restructuring program by reportable segment (in thousands):

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Precision Medicine and Manufacturing

$

76

 

 

$

889

 

 

$

1,064

 

 

$

889

 

Medical Solutions

 

253

 

 

 

—

 

 

 

293

 

 

 

—

 

Robotics and Automation

 

1,632

 

 

 

—

 

 

 

3,168

 

 

 

—

 

Unallocated Corporate and Shared Services

 

489

 

 

 

—

 

 

 

799

 

 

 

—

 

Total

$

2,450

 

 

$

889

 

 

$

5,324

 

 

$

889

 

2020 Restructuring

The Company initiated the 2020 restructuring program in the third quarter of 2020. This program is focused on reducing operating complexity in the Company, including reducing infrastructure costs and streamlining the Company’s operating model to better serve its customers. In addition, the program is focused on cost reduction actions that improve gross margins for the overall company. During the three and nine months ended September 29, 2023, the Company recorded $1.9 million and $2.6 million respectively, in severance, facility related, and other costs in connection with the 2020 restructuring program. As of September 29, 2023, the Company had incurred cumulative costs of $16.5 million related to this restructuring plan. The 2020 restructuring program was substantially completed in the third quarter of 2023.

The following table summarizes restructuring costs associated with the 2020 restructuring program by reportable segment (in thousands):

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Precision Medicine and Manufacturing

$

1,543

 

 

$

758

 

 

$

2,050

 

 

$

1,952

 

Medical Solutions

 

—

 

 

 

101

 

 

 

—

 

 

 

207

 

Robotics and Automation

 

337

 

 

 

22

 

 

 

563

 

 

 

(46

)

Unallocated Corporate and Shared Services

 

—

 

 

 

6

 

 

 

—

 

 

 

6

 

Total

$

1,880

 

 

$

887

 

 

$

2,613

 

 

$

2,119

 

Rollforward of Accrued Expenses Related to Restructuring

The following table summarizes the accrual activities, by component, related to the Company’s restructuring plans recorded in the accompanying consolidated balance sheets (in thousands):

 

Total

 

 

Employee Related

 

 

Facility Related

 

 

Other

 

Balance at December 31, 2022

$

2,410

 

 

$

1,902

 

 

$

452

 

 

$

56

 

Restructuring charges

 

7,937

 

 

 

4,799

 

 

 

1,929

 

 

 

1,209

 

Cash payments

 

(5,969

)

 

 

(4,803

)

 

 

(600

)

 

 

(566

)

Non-cash write-offs and other adjustments(1)

 

(1,346

)

 

 

20

 

 

 

(823

)

 

 

(543

)

Balance at September 29, 2023

$

3,032

 

 

$

1,918

 

 

$

958

 

 

$

156

 

(1) Non-cash write-offs and other adjustments included impairment of assets amounting to $1.4 million.

Acquisition and Related Charges

Acquisition costs in connection with business combinations, including finders’ fees, legal, valuation, and other professional or consulting fees, totaled $0.2 million and $0.3 million for the three and nine months ended September 29, 2023, and $0.8 million and $1.1 million for the three and nine months ended September 30, 2022, respectively. During the three and nine months ended September 30, 2022, the Company recognized a reduction of $1.0 million and $1.4 million, respectively, in earn-out expenses related to prior-year acquisitions. The majority of acquisition and related costs for the three and nine months ended September 29, 2023 were included in the Company’s Unallocated Corporate and Shared Services reportable segment. The majority of acquisition and related

costs for the three and nine months ended September 30, 2022 were included in the Company’s Precision Medicine and Manufacturing, Robotics and Automation, and Unallocated Corporate and Shared Services reportable segments.
v3.23.3
Commitments and Contingencies
 9 Months Ended
Sep. 29, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

14. Commitments and Contingencies

Purchase Commitments

There have been no material changes to the Company’s purchase commitments since December 31, 2022.

Business Interruption Insurance Recoveries

The Company made an insurance claim to recover lost margin and additional costs incurred in connection with a fire at a key supplier that caused business interruption in the second half of 2022. During the three and nine months ended September 29, 2023, the Company received insurance recovery payments of $4.4 million and $5.0 million, respectively, which have been recorded as a reduction to cost of revenue. The insurance claim was fully settled as of September 29, 2023.

Legal Contingencies

The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. The Company reviews the status of each significant matter and assesses the potential financial exposure on a quarterly basis. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. Significant judgment is required in both the determination of probability and the determination as to whether an exposure is reasonably estimable. Because of uncertainties related to these matters, accruals are based only on the best information available as of the date of the consolidated balance sheet. As additional information becomes available, the Company reassesses the potential liability related to any pending claims and litigations and may revise its estimates. When a material loss contingency is considered reasonably possible but not probable, the Company does not record a liability, but instead discloses the nature and the amount of the claim, and an estimate of the potential loss or a range of potential losses, if such an estimate can be reasonably made. Legal fees are expensed as incurred. The Company does not believe that the outcome of outstanding claims will have a material adverse effect on its consolidated financial statements but there can be no assurance that any such claims would not have a material adverse effect on the consolidated financial statements.

Guarantees and Indemnifications

In the normal course of its operations, the Company executes agreements that provide for indemnification and guarantees to counterparties in transactions such as business dispositions, sale of assets, sale of products, and operating leases. Additionally, the by-laws of the Company require it to indemnify certain current or former directors, officers, and employees of the Company against expenses incurred by them in connection with each proceeding in which they are involved as a result of serving or having served in certain capacities. Indemnification is not available with respect to a proceeding as to which it has been adjudicated that the person did not act in good faith in the reasonable belief that the action was in the best interests of the Company. Certain of the Company’s officers and directors are also a party to indemnification agreements with the Company. These indemnification agreements provide, among other things, that the director or officer shall be indemnified to the fullest extent permitted by applicable law against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by such director or officer in connection with any proceeding by reason of their relationship with the Company. In addition, the indemnification agreements provide for the advancement of expenses incurred by such director or officer in connection with any proceeding covered by the indemnification agreement, subject to the conditions set forth therein and to the extent such advancement is not prohibited by law. The indemnification agreements also set out the procedures for determining entitlement to indemnification, the requirements relating to notice and defense of claims for which indemnification is sought, the procedures for enforcement of indemnification rights, the limitations on and exclusions from indemnification, and the minimum levels of directors and officers liability insurance to be maintained by the Company.

v3.23.3
Segment Information
 9 Months Ended
Sep. 29, 2023
Segment Reporting [Abstract]  
Segment Information

15. Segment Information

Reportable Segments

The Company’s Chief Operating Decision Maker (“CODM”) utilizes certain financial information to make decisions about allocating resources and assessing performance for the entire Company. The Company evaluates the performance of and allocates

resources to its segments based on revenue, gross profit and operating profit. The Company’s reportable segments have been identified based on commonality and adjacency of technologies, applications and customers amongst the Company’s individual product lines. The Company determined that disclosing revenue by specific product is impracticable due to the highly customized and extensive portfolio of technologies offered to customers.

Based upon the information provided to the CODM, the Company has determined that it operates in three reportable segments: Precision Medicine and Manufacturing, Medical Solutions, and Robotics and Automation. The reportable segments and their principal activities are described below.

Precision Medicine and Manufacturing

The Precision Medicine and Manufacturing segment designs, manufactures and markets photonics-based solutions, including laser scanning, laser beam delivery, CO2 laser, solid state laser, ultrafast laser, and optical light engine products. The segment serves highly demanding photonics-based applications for advanced industrial processes, metrology, medical and life science imaging, DNA sequencing, and medical laser procedures, particularly ophthalmology applications. The vast majority of the segment’s product offerings are sold to OEM customers worldwide. The segment sells these products both directly, utilizing a highly technical sales force, and indirectly, through resellers and distributors.

Medical Solutions

The Medical Solutions segment designs, manufactures and markets a range of medical grade technologies, including medical insufflators, pumps and related disposables; visualization solutions; wireless technologies, video recorder and video integration technologies for operating room integrations; optical data collection and machine vision technologies; radio frequency identification (“RFID”) technologies; thermal chart recorders; spectrometry technologies; and embedded touch screen solutions. The vast majority of the segment’s product offerings are sold to OEM customers worldwide. The segment sells these products both directly, utilizing a highly technical sales force, and indirectly, through resellers and distributors.

Robotics and Automation

The Robotics and Automation segment designs, manufactures and markets optical and inductive encoders, precision motors, servo drives and motion control solutions, integrated stepper motors, intelligent robotic end-of-arm technology solutions, air bearings, and air bearing spindles. The vast majority of the segment’s product offerings are sold to OEM customers worldwide. The segment sells these products both directly, utilizing a highly technical sales force, and indirectly, through resellers and distributors.

Reportable Segment Financial Information

Revenue, gross profit, gross profit margin, operating income (loss), and depreciation and amortization expenses by reportable segment were as follows (in thousands, except percentage data):

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

Revenue

2023

 

 

2022

 

 

2023

 

 

2022

 

Precision Medicine and Manufacturing

$

71,277

 

 

$

70,799

 

 

$

215,138

 

 

$

203,042

 

Medical Solutions

 

83,378

 

 

 

73,345

 

 

 

244,340

 

 

 

200,911

 

Robotics and Automation

 

66,848

 

 

 

78,814

 

 

 

210,615

 

 

 

238,577

 

Total

$

221,503

 

 

$

222,958

 

 

$

670,093

 

 

$

642,530

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

Gross Profit

2023

 

 

2022

 

 

2023

 

 

2022

 

Precision Medicine and Manufacturing

$

36,208

 

 

$

34,699

 

 

$

107,054

 

 

$

94,268

 

Medical Solutions

 

34,027

 

 

 

28,201

 

 

 

100,170

 

 

 

79,966

 

Robotics and Automation

 

32,652

 

 

 

36,832

 

 

 

100,376

 

 

 

113,846

 

Unallocated Corporate and Shared Services

 

(1,296

)

 

 

(1,324

)

 

 

(4,258

)

 

 

(4,151

)

Total

$

101,591

 

 

$

98,408

 

 

$

303,342

 

 

$

283,929

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

Gross Profit Margin

2023

 

 

2022

 

 

2023

 

 

2022

 

Precision Medicine and Manufacturing

 

50.8

%

 

 

49.0

%

 

 

49.8

%

 

 

46.4

%

Medical Solutions

 

40.8

%

 

 

38.4

%

 

 

41.0

%

 

 

39.8

%

Robotics and Automation

 

48.8

%

 

 

46.7

%

 

 

47.7

%

 

 

47.7

%

Total

 

45.9

%

 

 

44.1

%

 

 

45.3

%

 

 

44.2

%

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

Operating Income (Loss)

2023

 

 

2022

 

 

2023

 

 

2022

 

Precision Medicine and Manufacturing

$

18,508

 

 

$

18,351

 

 

$

54,803

 

 

$

45,782

 

Medical Solutions

 

11,050

 

 

 

8,744

 

 

 

30,974

 

 

 

20,811

 

Robotics and Automation

 

12,208

 

 

 

15,800

 

 

 

39,456

 

 

 

48,222

 

Unallocated Corporate and Shared Services

 

(11,457

)

 

 

(14,234

)

 

 

(36,414

)

 

 

(38,580

)

Total

$

30,309

 

 

$

28,661

 

 

$

88,819

 

 

$

76,235

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

Depreciation and Amortization Expenses

2023

 

 

2022

 

 

2023

 

 

2022

 

Precision Medicine and Manufacturing

$

2,644

 

 

$

2,760

 

 

$

7,901

 

 

$

8,234

 

Medical Solutions

 

3,860

 

 

 

4,240

 

 

 

11,877

 

 

 

12,989

 

Robotics and Automation

 

4,705

 

 

 

6,050

 

 

 

14,467

 

 

 

19,467

 

Unallocated Corporate and Shared Services

 

188

 

 

 

93

 

 

 

820

 

 

 

309

 

Total

$

11,397

 

 

$

13,143

 

 

$

35,065

 

 

$

40,999

 

Revenue by Geography

The Company aggregates geographic revenue based on the customer locations where products are shipped to. Revenue by geography was as follows (in thousands):

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

United States

$

110,462

 

 

$

99,230

 

 

$

321,898

 

 

$

268,585

 

Germany

 

33,263

 

 

 

34,625

 

 

 

100,222

 

 

 

99,526

 

Rest of Europe

 

34,257

 

 

 

33,996

 

 

 

98,159

 

 

 

105,327

 

China

 

15,679

 

 

 

24,209

 

 

 

54,331

 

 

 

80,877

 

Rest of Asia-Pacific

 

24,060

 

 

 

26,886

 

 

 

79,561

 

 

 

74,400

 

Other

 

3,782

 

 

 

4,012

 

 

 

15,922

 

 

 

13,815

 

Total

$

221,503

 

 

$

222,958

 

 

$

670,093

 

 

$

642,530

 

The majority of revenue from Precision Medicine and Manufacturing, Medical Solutions and Robotics and Automation segments is generated from sales to customers within the United States and Europe. Each segment also generates revenue across the other geographies, with no significant concentration of any segment’s remaining revenue.

Revenue by End Market

The Company primarily operates in two end markets: the medical market and the advanced industrial market. Revenue by end market was approximately as follows:

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Medical

 

57

%

 

 

50

%

 

 

54

%

 

 

48

%

Advanced Industrial

 

43

%

 

 

50

%

 

 

46

%

 

 

52

%

Total

 

100

%

 

 

100

%

 

 

100

%

 

 

100

%

The majority of revenue from the Precision Medicine and Manufacturing and Robotics and Automation segments is generated from sales to customers in the advanced industrial market. The majority of revenue from the Medical Solutions segment is generated from sales to customers in the medical market.

v3.23.3
Basis of Presentation (Policies)
 9 Months Ended
Sep. 29, 2023
Accounting Policies [Abstract]  
Basis of Presentation Basis of Presentation

Novanta Inc. (“Novanta” or the “Company”) is a leading global supplier of core technology solutions that give medical and advanced industrial original equipment manufacturers (“OEMs”) a competitive advantage. Novanta combines deep proprietary technology expertise and competencies in precision medicine and manufacturing, medical solutions, and robotics and automation with a proven ability to solve complex technical challenges. This enables Novanta to engineer core components and sub-systems that deliver extreme precision and performance, tailored to the customers’ demanding applications.

The accompanying unaudited interim consolidated financial statements have been prepared by the Company in United States (“U.S.”) dollars and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”), the instructions to Form 10-Q and the provisions of Regulation S-X pertaining to interim financial statements. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted. The interim consolidated financial statements and notes included in this report should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, these interim consolidated financial statements include all adjustments and accruals of a normal and recurring nature necessary to fairly state the results of the interim periods presented. The results for interim periods are not necessarily indicative of results to be expected for the full year or for any future periods.

The Company’s unaudited interim consolidated financial statements are prepared for each quarterly period ending on the Friday closest to the end of the calendar quarter, with the exception of the fourth quarter which always ends on December 31.

During the first quarter of 2023, the Company changed the names of its reportable segments from “Photonics” to “Precision Medicine and Manufacturing”, from “Vision” to “Medical Solutions”, and from “Precision Motion” to “Robotics and Automation”, respectively. The segment name changes did not result in any change to the compositions of the Company's segments and therefore did not result in any change to historical results.
Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Estimates and assumptions are reviewed on an on-going basis and the effects of revisions are reflected in the period in which such revisions are deemed to be necessary. The Company evaluates its estimates based on historical experience, current conditions, and various other assumptions that it believes are reasonable under the circumstances. Actual results could differ significantly from these estimates.
Recent Accounting Pronouncements

Recent Accounting Pronouncements

Standard

 

Description

 

Effective Date

 

Effect on the Financial Statements or Other Significant Matters

In October 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-06, “Disclosure Improvements: Codification Amendments in Response to SEC’s Disclosure Update and Simplification Initiative.”

 

ASU 2023-06 clarifies or improves disclosure and presentation requirements of a variety of topics, which allow users to easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements and align the requirements in the FASB Accounting Standards Codification with the SEC’s regulations.

 

The effective date for each amendment in ASU 2023-06 will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited.

 

The Company is currently evaluating the impact of ASU 2023-06 on its consolidated financial statements.

 
Revenue Recognition

The Company recognizes revenue when control of promised goods or services is transferred to customers. The transfer of control generally occurs upon shipment when title and risk of loss pass to the customer. The vast majority of the Company’s revenue is generated from the sale of distinct products. Revenue is measured as the amount of consideration the Company expects to receive in exchange for such products, which is generally at contractually stated prices. Sales taxes and value added taxes collected concurrently with revenue generating activities are excluded from revenue.

Performance Obligations

Substantially all of the Company’s revenue is recognized at a point in time, upon shipment, rather than over time.

At the request of its customers, the Company may perform professional services, generally for the maintenance and repair of products previously sold to those customers and for engineering services. Professional services for the maintenance and repair of products are typically short in duration, mostly less than one month, and generally involve a single distinct performance obligation. The related revenue is recognized at a point in time when control transfers to the customer upon completion of professional services. The consideration expected to be received in exchange for such services is typically the contractually stated amount. Certain engineering services are longer in duration and the related revenue is recognized over time. As the Company’s right to payment from a customer is based on the value of engineering services performed, the Company recognizes revenue based on the corresponding value to the customer from the Company’s performance completed to date. Revenue from engineering services aggregated to less than 3% of the Company’s consolidated revenue during the nine months ended September 29, 2023 and September 30, 2022.

The Company occasionally sells separately priced non-standard/extended warranty services or preventative maintenance plans with the sale of products. The transfer of control over the service plans is over time. The Company recognizes the related revenue ratably over the terms of the service plans. The transaction price of a contract is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are generally determined based on the prices charged to customers or using the expected cost plus a margin.

Shipping & Handling Costs

The Company accounts for shipping and handling activities that occur after the transfer of control over the related goods as fulfillment activities rather than performance obligations. Shipping and handling fees charged to customers are recognized as revenue and the related costs are recorded in cost of revenue at the time of transfer of control.

Warranties

The standard warranty periods for the Company’s products are typically 12 months to 36 months. The Company recognizes estimated liabilities associated with standard warranty periods for its products in accordance with the provisions of ASC 450, “Contingencies,” as the Company has the ability to ascertain the likelihood of the liabilities and can reasonably estimate the amount of the liabilities. A provision for the estimated cost related to standard warranties is recorded as cost of revenue at the time revenue is recognized. The Company’s estimate of the costs to service the warranty obligations is based on historical experience and expectations of future conditions. To the extent that the Company’s experience in warranty claims or costs associated with servicing those claims differ from the original estimates, revisions to the estimated warranty liabilities are recorded at that time, with offsetting adjustments to cost of revenue.

Practical Expedients and Exemptions

The Company expenses incremental direct costs of obtaining a contract when incurred because the expected amortization period is typically one year or less. These costs are recorded within selling, general and administrative expenses in the consolidated statement of operations.

The Company does not adjust the promised amount of consideration for the effects of a financing component because the transfer of a promised good to a customer and the customer’s payment for that good are typically one year or less. The Company does not disclose the value of the remaining performance obligation for contracts with an original expected length of one year or less.

Contract Liabilities

Contract liabilities consist of deferred revenue and advance payments from customers, including amounts that are refundable. These contract liabilities are classified as either current or long-term liabilities in the consolidated balance sheet based on the timing of when the Company expects to recognize the related revenue. As of September 29, 2023 and December 31, 2022, contract liabilities were $6.8 million and $8.4 million, respectively, and are included in accrued expenses and other current liabilities and other liabilities in the accompanying consolidated balance sheets. The decrease in the contract liability balance during the nine months ended September 29, 2023 is primarily due to $6.2 million of revenue recognized during the period that was included in the contract liability balance as of December 31, 2022, partially offset by cash payments received in advance of satisfying performance obligations.

Disaggregated Revenue

See Note 15 for the Company’s disaggregation of revenue by segment, geography and end market.
v3.23.3
Accumulated Other Comprehensive Loss (Tables)
 9 Months Ended
Sep. 29, 2023
Equity [Abstract]  
Components of Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss were as follows (in thousands):

 

Total Accumulated

 

 

 

 

 

 

 

 

Other

 

 

Cumulative

 

 

Pension

 

 

Comprehensive

 

 

Translation

 

 

Liability

 

 

Loss

 

 

Adjustments

 

 

Adjustments

 

Balance at December 31, 2022

$

(32,009

)

 

$

(24,427

)

 

$

(7,582

)

Other comprehensive income (loss)

 

(2,068

)

 

 

(1,980

)

 

 

(88

)

Amounts reclassified from accumulated other comprehensive loss

 

764

 

 

 

—

 

 

 

764

 

Balance at September 29, 2023

$

(33,313

)

 

$

(26,407

)

 

$

(6,906

)
v3.23.3
Earnings per Common Share (Tables)
 9 Months Ended
Sep. 29, 2023
Earnings Per Share [Abstract]  
Computation of Basic and Diluted Earnings per Common Share

The following table sets forth the computation of basic and diluted earnings per common share (amounts in thousands, except per share data):

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Numerators:

 

 

 

 

 

 

 

 

 

 

 

Consolidated net income

$

21,223

 

 

$

22,490

 

 

$

60,367

 

 

$

58,789

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominators:

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding— basic

 

35,856

 

 

 

35,729

 

 

 

35,839

 

 

 

35,625

 

Dilutive potential common shares

 

185

 

 

 

199

 

 

 

185

 

 

 

256

 

Weighted average common shares outstanding— diluted

 

36,041

 

 

 

35,928

 

 

 

36,024

 

 

 

35,881

 

Antidilutive potential common shares excluded from above

 

49

 

 

 

73

 

 

 

101

 

 

 

104

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Common Share:

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.59

 

 

$

0.63

 

 

$

1.68

 

 

$

1.65

 

Diluted

$

0.59

 

 

$

0.63

 

 

$

1.68

 

 

$

1.64

 
v3.23.3
Fair Value Measurements (Tables)
 9 Months Ended
Sep. 29, 2023
Fair Value Disclosures [Abstract]  
Fair Values of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes the fair values of the Company’s assets and liabilities measured at fair value on a recurring basis as of September 29, 2023 (in thousands):

 

 

 

 

 

Quoted Prices in

 

 

 

 

 

Significant Other

 

 

 

 

 

Active Markets for

 

 

Significant Other

 

 

Unobservable

 

 

 

 

 

Identical Assets

 

 

Observable Inputs

 

 

Inputs

 

 

Fair Value

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

$

1,724

 

 

$

1,724

 

 

$

—

 

 

$

—

 

Prepaid expenses and other current assets:

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward contracts

 

237

 

 

 

—

 

 

 

237

 

 

 

—

 

 

$

1,961

 

 

$

1,724

 

 

$

237

 

 

$

—

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Accrued expenses and other current liabilities:

 

 

 

 

 

 

 

 

 

 

 

Contingent considerations - Current

$

45

 

 

$

—

 

 

$

—

 

 

$

45

 

Foreign currency forward contracts

 

23

 

 

 

—

 

 

 

23

 

 

 

—

 

Other liabilities:

 

 

 

 

 

 

 

 

 

 

 

Contingent considerations - Long-term

 

296

 

 

 

—

 

 

 

—

 

 

 

296

 

 

$

364

 

 

$

—

 

 

$

23

 

 

$

341

 

 

The following table summarizes the fair values of the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 (in thousands):

 

 

 

 

 

Quoted Prices in

 

 

 

 

 

Significant Other

 

 

 

 

 

Active Markets for

 

 

Significant Other

 

 

Unobservable

 

 

 

 

 

Identical Assets

 

 

Observable Inputs

 

 

Inputs

 

 

Fair Value

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

$

1,369

 

 

$

1,369

 

 

$

—

 

 

$

—

 

Prepaid expenses and other current assets:

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward contracts

 

391

 

 

 

—

 

 

 

391

 

 

 

—

 

 

$

1,760

 

 

$

1,369

 

 

$

391

 

 

$

—

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Accrued expenses and other current liabilities:

 

 

 

 

 

 

 

 

 

 

 

Contingent considerations - Current

$

124

 

 

$

—

 

 

$

—

 

 

$

124

 

Foreign currency forward contracts

 

412

 

 

 

—

 

 

 

412

 

 

 

—

 

Other liabilities:

 

 

 

 

 

 

 

 

 

 

 

Contingent considerations - Long-term

 

301

 

 

 

—

 

 

 

—

 

 

 

301

 

 

$

837

 

 

$

—

 

 

$

412

 

 

$

425

 
Changes in Fair Value of Level 3 Contingent Considerations

Changes in the fair value of Level 3 contingent considerations during the nine months ended September 29, 2023 were as follows (in thousands):

 

 

Amount

 

Balance at December 31, 2022

$

425

 

Payments

 

(81

)

Fair value adjustments

 

—

 

Effect of foreign exchange rates

 

(3

)

Balance at September 29, 2023

$

341

 
v3.23.3
Goodwill and Intangible Assets (Tables)
 9 Months Ended
Sep. 29, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Summary of Changes in Goodwill

The following table summarizes changes in goodwill during the nine months ended September 29, 2023 (in thousands):

Balance at beginning of the period

$

478,897

 

Effect of foreign exchange rate changes

 

(1,255

)

Balance at end of the period

$

477,642

 
Goodwill by Reportable Segment

Goodwill by reportable segment as of September 29, 2023 was as follows (in thousands):

 

Reportable Segment

 

 

 

 

 

Precision Medicine and Manufacturing

 

 

Medical Solutions

 

 

Robotics and Automation

 

 

Total

 

Goodwill

$

208,110

 

 

$

166,905

 

 

$

253,856

 

 

$

628,871

 

Accumulated impairment of goodwill

 

(102,461

)

 

 

(31,722

)

 

 

(17,046

)

 

 

(151,229

)

Total

$

105,649

 

 

$

135,183

 

 

$

236,810

 

 

$

477,642

 
Goodwill by reportable segment as of December 31, 2022 was as follows (in thousands):

 

Reportable Segment

 

 

 

 

 

Precision Medicine and Manufacturing

 

 

Medical Solutions

 

 

Robotics and Automation

 

 

Total

 

Goodwill

$

208,387

 

 

$

167,891

 

 

$

253,848

 

 

$

630,126

 

Accumulated impairment of goodwill

 

(102,461

)

 

 

(31,722

)

 

 

(17,046

)

 

 

(151,229

)

Total

$

105,926

 

 

$

136,169

 

 

$

236,802

 

 

$

478,897

 
Intangible Assets

Intangible assets as of September 29, 2023 and December 31, 2022, respectively, are summarized as follows (in thousands):

 

September 29, 2023

 

 

December 31, 2022

 

 

Gross Carrying
Amount

 

 

Accumulated
Amortization

 

 

Net Carrying
Amount

 

 

Gross Carrying
Amount

 

 

Accumulated
Amortization

 

 

Net Carrying
Amount

 

Amortizable intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Patents and developed technologies

$

184,246

 

 

$

(141,182

)

 

$

43,064

 

 

$

184,589

 

 

$

(132,350

)

 

$

52,239

 

Customer relationships

 

221,706

 

 

 

(135,476

)

 

 

86,230

 

 

 

222,173

 

 

 

(121,527

)

 

 

100,646

 

Trademarks and trade names

 

23,297

 

 

 

(14,522

)

 

 

8,775

 

 

 

23,311

 

 

 

(13,457

)

 

 

9,854

 

Amortizable intangible assets

 

429,249

 

 

 

(291,180

)

 

 

138,069

 

 

 

430,073

 

 

 

(267,334

)

 

 

162,739

 

Non-amortizable intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade names

 

13,027

 

 

 

—

 

 

 

13,027

 

 

 

13,027

 

 

 

—

 

 

 

13,027

 

Total intangible assets

$

442,276

 

 

$

(291,180

)

 

$

151,096

 

 

$

443,100

 

 

$

(267,334

)

 

$

175,766

 
Amortization Expense of Intangible Assets Amortization expense was as follows (in thousands):

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Amortization expense – cost of revenue

$

3,051

 

 

$

3,247

 

 

$

9,119

 

 

$

10,004

 

Amortization expense – operating expenses

 

5,131

 

 

 

6,472

 

 

 

15,344

 

 

 

20,987

 

Total amortization expense

$

8,182

 

 

$

9,719

 

 

$

24,463

 

 

$

30,991

 
Estimated Amortization Expense

As of September 29, 2023, estimated amortization expense for each of the five succeeding years and thereafter was as follows (in thousands):

Year Ending December 31,

 

Cost of Revenue

 

 

Operating
Expenses

 

 

Total

 

2023 (remainder of year)

 

$

3,005

 

 

$

5,065

 

 

$

8,070

 

2024

 

 

9,771

 

 

 

16,998

 

 

 

26,769

 

2025

 

 

8,289

 

 

 

14,378

 

 

 

22,667

 

2026

 

 

6,933

 

 

 

12,227

 

 

 

19,160

 

2027

 

 

4,197

 

 

 

9,861

 

 

 

14,058

 

Thereafter

 

 

10,869

 

 

 

36,476

 

 

 

47,345

 

Total

 

$

43,064

 

 

$

95,005

 

 

$

138,069

 
v3.23.3
Supplementary Balance Sheet Information (Tables)
 9 Months Ended
Sep. 29, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Inventories

Inventories

 

September 29,

 

 

December 31,

 

 

2023

 

 

2022

 

Raw materials

$

109,067

 

 

$

118,292

 

Work-in-process

 

21,266

 

 

 

23,328

 

Finished goods

 

23,096

 

 

 

25,738

 

Demo and consigned inventory

 

380

 

 

 

639

 

Total inventories

$

153,809

 

 

$

167,997

 
Accrued Expenses and Other Current Liabilities

Accrued Expenses and Other Current Liabilities

 

September 29,

 

 

December 31,

 

 

2023

 

 

2022

 

Accrued compensation and benefits

$

26,691

 

 

$

35,501

 

Accrued warranty

 

5,498

 

 

 

5,127

 

Contract liabilities, current portion

 

6,576

 

 

 

8,128

 

Finance lease obligations

 

708

 

 

 

668

 

Other

 

14,902

 

 

 

13,620

 

Total

$

54,375

 

 

$

63,044

 

 
Accrued Warranty

Accrued Warranty

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

Balance at beginning of the period

$

5,127

 

 

$

4,783

 

Provision charged to cost of revenue

 

1,837

 

 

 

2,091

 

Use of provision

 

(1,467

)

 

 

(1,933

)

Foreign currency exchange rate changes

 

1

 

 

 

(203

)

Balance at end of the period

$

5,498

 

 

$

4,738

 
Other Long Term Liabilities

Other Long-Term Liabilities

 

September 29,

 

 

December 31,

 

 

2023

 

 

2022

 

Finance lease obligations

$

4,117

 

 

$

4,652

 

Accrued contingent considerations and earn-outs

 

296

 

 

 

301

 

Other

 

792

 

 

 

1,132

 

Total

$

5,205

 

 

$

6,085

 
v3.23.3
Debt (Tables)
 9 Months Ended
Sep. 29, 2023
Debt Disclosure [Abstract]  
Outstanding debt

Outstanding debt consisted of the following (in thousands):

 

September 29,

 

 

December 31,

 

 

2023

 

 

2022

 

Senior Credit Facilities – term loan

$

4,763

 

 

$

4,832

 

Less: unamortized debt issuance costs

 

(27

)

 

 

(32

)

Total current portion of long-term debt

$

4,736

 

 

$

4,800

 

 

 

 

 

 

 

Senior Credit Facilities – term loan

$

72,400

 

 

$

77,060

 

Senior Credit Facilities – revolving credit facility

 

279,423

 

 

 

358,413

 

Less: unamortized debt issuance costs

 

(3,944

)

 

 

(4,811

)

Total long-term debt

$

347,879

 

 

$

430,662

 

 

 

 

 

 

 

Total Senior Credit Facilities

$

352,615

 

 

$

435,462

 
v3.23.3
Leases (Tables)
 9 Months Ended
Sep. 29, 2023
Leases [Abstract]  
Summary of Components of Lease Costs

The following table summarizes the components of lease costs (in thousands):

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating lease cost

$

2,639

 

 

$

2,544

 

 

$

7,916

 

 

$

7,936

 

Finance lease cost

 

 

 

 

 

 

 

 

 

 

 

Amortization of right-of-use assets

 

150

 

 

 

150

 

 

 

452

 

 

 

451

 

Interest on lease liabilities

 

68

 

 

 

77

 

 

 

208

 

 

 

234

 

Variable lease cost

 

227

 

 

 

271

 

 

 

787

 

 

 

888

 

Total lease cost

$

3,084

 

 

$

3,042

 

 

$

9,363

 

 

$

9,509

 

 
Summary of Balance Sheet Information Related to Leases

The following table provides additional details of balance sheet information related to the Company’s leases (in thousands, except lease term and discount rate):

 

September 29,

 

 

December 31,

 

 

2023

 

 

2022

 

Operating leases

 

 

 

 

 

Operating lease right-of-use assets

$

40,527

 

 

$

43,317

 

 

 

 

 

 

 

Current portion of operating lease liabilities

$

8,072

 

 

$

7,793

 

Operating lease liabilities

 

38,577

 

 

 

40,808

 

Total operating lease liabilities

$

46,649

 

 

$

48,601

 

 

 

 

 

 

 

Finance leases

 

 

 

 

 

Property, plant and equipment, gross

$

9,582

 

 

$

9,582

 

Accumulated depreciation

 

(6,122

)

 

 

(5,670

)

Finance lease assets included in property, plant and equipment, net

$

3,460

 

 

$

3,912

 

 

 

 

 

 

 

Accrued expenses and other current liabilities

$

708

 

 

$

668

 

Other liabilities

 

4,117

 

 

 

4,652

 

Total finance lease liabilities

$

4,825

 

 

$

5,320

 

 

 

 

 

 

 

Weighted-average remaining lease term (in years):

 

 

 

 

 

Operating leases

 

7.7

 

 

 

8.2

 

Finance leases

 

5.8

 

 

 

6.5

 

 

 

 

 

 

 

Weighted-average discount rate:

 

 

 

 

 

Operating leases

 

4.84

%

 

 

4.64

%

Finance leases

 

5.54

%

 

 

5.54

%
Summary of Cash Flow Information Related to Leases

The following table provides additional details of cash flow information related to the Company’s leases (in thousands):

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

Cash paid for amounts included in lease liabilities:

 

 

 

 

 

Operating cash flows from finance leases

$

208

 

 

$

234

 

Operating cash flows from operating leases

$

5,916

 

 

$

5,921

 

Financing cash flows from finance leases

$

484

 

 

$

447

 

 

 

 

 

 

 

Supplemental non-cash information:

 

 

 

 

 

Right-of-use assets obtained in exchange for new operating lease liabilities

$

3,893

 

 

$

4,621

 

 
Future Minimum Lease Payments Under Operating and Finance Leases

Future minimum lease payments under operating and finance leases expiring subsequent to September 29, 2023, including operating leases associated with facilities that have been vacated as a result of the Company’s restructuring actions, are summarized as follows (in thousands):

Year Ending December 31,

Operating Leases

 

 

Finance Leases

 

2023 (remainder of year)

$

2,426

 

 

$

238

 

2024

 

9,617

 

 

 

954

 

2025

 

9,386

 

 

 

954

 

2026

 

7,945

 

 

 

979

 

2027

 

7,066

 

 

 

1,003

 

Thereafter

 

20,832

 

 

 

1,505

 

Total minimum lease payments

 

57,272

 

 

 

5,633

 

Less: Interest

 

(10,623

)

 

 

(808

)

Present value of lease liabilities

$

46,649

 

 

$

4,825

 
v3.23.3
Preferred and Common Shares and Share-Based Compensation (Tables)
 9 Months Ended
Sep. 29, 2023
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Share-Based Compensation Expense Recorded in the Consolidated Statements of Operations

The table below summarizes share-based compensation expense recorded in the consolidated statements of operations (in thousands):

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Selling, general and administrative

$

5,229

 

 

$

4,649

 

 

$

15,631

 

 

$

13,906

 

Research and development and engineering

 

510

 

 

 

586

 

 

 

1,495

 

 

 

1,780

 

Cost of revenue

 

298

 

 

 

719

 

 

 

1,252

 

 

 

2,123

 

Total share-based compensation expense

$

6,037

 

 

$

5,954

 

 

$

18,378

 

 

$

17,809

 
Schedule of Share Based Payment Award Performance Stock Awards Valuation Assumptions

The grant-date fair value of the hybrid PSUs granted during the nine months ended September 29, 2023 was estimated using the Monte Carlo valuation method with the following assumptions:

 

 

Nine Months Ended
September 29, 2023

 

Grant-date stock price

$

156.72

 

Expected volatility

 

35.89

%

Risk-free interest rate

 

4.44

%

Expected annual dividend yield

 

—

 

Fair value

$

181.45

 
Schedule of Share Based Payment Award Stock Options Valuation Assumptions

The aggregate Black-Scholes fair value of $3.0 million for the stock options granted during the nine months ended September 29, 2023 was estimated using the following assumptions as of the grant date:

 

Nine Months Ended
September 29, 2023

 

Expected option term in years

 

4.5

 

Expected volatility

 

40.7

%

Risk-free interest rate

 

4.00

%

Expected annual dividend yield

 

—

 

The expected option term was calculated using the simplified method permitted under Codification of Staff Accounting Bulletins Topic 14, “Share-Based Payment”. The expected volatility was determined based on the historical volatility of the Company’s common shares over the expected option term. The risk-free interest rate was based on treasury instrument whose term was six months longer than the expected option term. The expected annual dividend yield is zero as the Company does not have plans to issue dividends.

Amended and Restated 2010 Incentive Plan  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Restricted Stock Units and Deferred Stock Units Issued and Outstanding

The table below summarizes activities relating to RSUs and DSUs issued and outstanding under the Company’s Amended and Restated 2010 Incentive Plan during the nine months ended September 29, 2023:

 

 

Shares
(In thousands)

 

 

Weighted
Average Grant
Date Fair Value

 

Unvested at December 31, 2022

 

238

 

 

$

128.26

 

Granted

 

91

 

 

$

156.47

 

Vested

 

(102

)

 

$

122.48

 

Forfeited

 

(24

)

 

$

139.50

 

Unvested at September 29, 2023

 

203

 

 

$

142.72

 

Expected to vest as of September 29, 2023

 

185

 

 

 

 
Performance-Based Awards Issued and Outstanding

The table below summarizes the activities relating to the performance-based awards issued and outstanding under the Company’s Amended and Restated 2010 Incentive Plan during the nine months ended September 29, 2023:

 

 

Shares
(In thousands)

 

 

Weighted
Average Grant
Date Fair Value

 

Unvested at December 31, 2022

 

216

 

 

$

144.16

 

Granted

 

57

 

 

$

179.15

 

Performance adjustments(1)

 

20

 

 

$

122.24

 

Vested

 

(70

)

 

$

116.56

 

Forfeited

 

(16

)

 

$

168.97

 

Unvested at September 29, 2023

 

207

 

 

$

160.40

 

Expected to vest as of September 29, 2023

 

246

 

 

 

 

(1) The amount shown represents performance adjustments related to the performance-based awards granted on February 20, 2020. These performance-based awards vested at a blended payout of 142% during the nine months ended September 29, 2023 based on the achievement of cumulative Non-GAAP EPS and applicable relative TSR performance conditions, respectively, over the performance period of fiscal years 2020 through 2022.
Stock Options Issued and Outstanding

The table below summarizes the activities relating to stock options issued and outstanding under the Company’s Amended and Restated 2010 Incentive Plan during the nine months ended September 29, 2023:

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares
(In thousands)

 

 

Weighted
Average Exercise Price

 

Outstanding as of December 31, 2022

 

84

 

 

$

72.18

 

Granted

 

48

 

 

$

156.72

 

Exercised

 

—

 

 

$

—

 

Forfeited or expired

 

—

 

 

$

—

 

Outstanding as of September 29, 2023

 

132

 

 

$

102.86

 

Exercisable as of September 29, 2023

 

57

 

 

 

 

Expected to vest as of September 29, 2023

 

75

 

 

 

 
v3.23.3
Restructuring, Acquisition, and Related Costs (Tables)
 9 Months Ended
Sep. 29, 2023
Restructuring and Related Activities [Abstract]  
Schedule of Restructuring, Acquisition and Related Costs

The following table summarizes restructuring, acquisition, and related costs in the accompanying consolidated statements of operations (in thousands):

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

2022 restructuring

$

2,450

 

 

$

889

 

 

$

5,324

 

 

$

889

 

2020 restructuring

 

1,880

 

 

 

887

 

 

 

2,613

 

 

 

2,119

 

Total restructuring charges

 

4,330

 

 

 

1,776

 

 

 

7,937

 

 

 

3,008

 

Acquisition and related charges

 

151

 

 

 

(151

)

 

 

254

 

 

 

(358

)

Total restructuring, acquisition, and related costs

$

4,481

 

 

$

1,625

 

 

$

8,191

 

 

$

2,650

 
Summary of Restructuring Charges by Reportable Segment

The following table summarizes restructuring costs associated with the 2022 restructuring program by reportable segment (in thousands):

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Precision Medicine and Manufacturing

$

76

 

 

$

889

 

 

$

1,064

 

 

$

889

 

Medical Solutions

 

253

 

 

 

—

 

 

 

293

 

 

 

—

 

Robotics and Automation

 

1,632

 

 

 

—

 

 

 

3,168

 

 

 

—

 

Unallocated Corporate and Shared Services

 

489

 

 

 

—

 

 

 

799

 

 

 

—

 

Total

$

2,450

 

 

$

889

 

 

$

5,324

 

 

$

889

 

The following table summarizes restructuring costs associated with the 2020 restructuring program by reportable segment (in thousands):

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Precision Medicine and Manufacturing

$

1,543

 

 

$

758

 

 

$

2,050

 

 

$

1,952

 

Medical Solutions

 

—

 

 

 

101

 

 

 

—

 

 

 

207

 

Robotics and Automation

 

337

 

 

 

22

 

 

 

563

 

 

 

(46

)

Unallocated Corporate and Shared Services

 

—

 

 

 

6

 

 

 

—

 

 

 

6

 

Total

$

1,880

 

 

$

887

 

 

$

2,613

 

 

$

2,119

 
Summary of Accrual Activities by Components Related to Company's Restructuring Plans

The following table summarizes the accrual activities, by component, related to the Company’s restructuring plans recorded in the accompanying consolidated balance sheets (in thousands):

 

Total

 

 

Employee Related

 

 

Facility Related

 

 

Other

 

Balance at December 31, 2022

$

2,410

 

 

$

1,902

 

 

$

452

 

 

$

56

 

Restructuring charges

 

7,937

 

 

 

4,799

 

 

 

1,929

 

 

 

1,209

 

Cash payments

 

(5,969

)

 

 

(4,803

)

 

 

(600

)

 

 

(566

)

Non-cash write-offs and other adjustments(1)

 

(1,346

)

 

 

20

 

 

 

(823

)

 

 

(543

)

Balance at September 29, 2023

$

3,032

 

 

$

1,918

 

 

$

958

 

 

$

156

 

(1) Non-cash write-offs and other adjustments included impairment of assets amounting to $1.4 million.
v3.23.3
Segment Information (Tables)
 9 Months Ended
Sep. 29, 2023
Segment Reporting [Abstract]  
Revenue, Gross Profit, Gross Profit Margin, Operating Income (Loss), and Depreciation and Amortization Expenses by Reportable Segment

Revenue, gross profit, gross profit margin, operating income (loss), and depreciation and amortization expenses by reportable segment were as follows (in thousands, except percentage data):

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

Revenue

2023

 

 

2022

 

 

2023

 

 

2022

 

Precision Medicine and Manufacturing

$

71,277

 

 

$

70,799

 

 

$

215,138

 

 

$

203,042

 

Medical Solutions

 

83,378

 

 

 

73,345

 

 

 

244,340

 

 

 

200,911

 

Robotics and Automation

 

66,848

 

 

 

78,814

 

 

 

210,615

 

 

 

238,577

 

Total

$

221,503

 

 

$

222,958

 

 

$

670,093

 

 

$

642,530

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

Gross Profit

2023

 

 

2022

 

 

2023

 

 

2022

 

Precision Medicine and Manufacturing

$

36,208

 

 

$

34,699

 

 

$

107,054

 

 

$

94,268

 

Medical Solutions

 

34,027

 

 

 

28,201

 

 

 

100,170

 

 

 

79,966

 

Robotics and Automation

 

32,652

 

 

 

36,832

 

 

 

100,376

 

 

 

113,846

 

Unallocated Corporate and Shared Services

 

(1,296

)

 

 

(1,324

)

 

 

(4,258

)

 

 

(4,151

)

Total

$

101,591

 

 

$

98,408

 

 

$

303,342

 

 

$

283,929

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

Gross Profit Margin

2023

 

 

2022

 

 

2023

 

 

2022

 

Precision Medicine and Manufacturing

 

50.8

%

 

 

49.0

%

 

 

49.8

%

 

 

46.4

%

Medical Solutions

 

40.8

%

 

 

38.4

%

 

 

41.0

%

 

 

39.8

%

Robotics and Automation

 

48.8

%

 

 

46.7

%

 

 

47.7

%

 

 

47.7

%

Total

 

45.9

%

 

 

44.1

%

 

 

45.3

%

 

 

44.2

%

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

Operating Income (Loss)

2023

 

 

2022

 

 

2023

 

 

2022

 

Precision Medicine and Manufacturing

$

18,508

 

 

$

18,351

 

 

$

54,803

 

 

$

45,782

 

Medical Solutions

 

11,050

 

 

 

8,744

 

 

 

30,974

 

 

 

20,811

 

Robotics and Automation

 

12,208

 

 

 

15,800

 

 

 

39,456

 

 

 

48,222

 

Unallocated Corporate and Shared Services

 

(11,457

)

 

 

(14,234

)

 

 

(36,414

)

 

 

(38,580

)

Total

$

30,309

 

 

$

28,661

 

 

$

88,819

 

 

$

76,235

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

Depreciation and Amortization Expenses

2023

 

 

2022

 

 

2023

 

 

2022

 

Precision Medicine and Manufacturing

$

2,644

 

 

$

2,760

 

 

$

7,901

 

 

$

8,234

 

Medical Solutions

 

3,860

 

 

 

4,240

 

 

 

11,877

 

 

 

12,989

 

Robotics and Automation

 

4,705

 

 

 

6,050

 

 

 

14,467

 

 

 

19,467

 

Unallocated Corporate and Shared Services

 

188

 

 

 

93

 

 

 

820

 

 

 

309

 

Total

$

11,397

 

 

$

13,143

 

 

$

35,065

 

 

$

40,999

 
Schedule of Geographic Revenue

The Company aggregates geographic revenue based on the customer locations where products are shipped to. Revenue by geography was as follows (in thousands):

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

United States

$

110,462

 

 

$

99,230

 

 

$

321,898

 

 

$

268,585

 

Germany

 

33,263

 

 

 

34,625

 

 

 

100,222

 

 

 

99,526

 

Rest of Europe

 

34,257

 

 

 

33,996

 

 

 

98,159

 

 

 

105,327

 

China

 

15,679

 

 

 

24,209

 

 

 

54,331

 

 

 

80,877

 

Rest of Asia-Pacific

 

24,060

 

 

 

26,886

 

 

 

79,561

 

 

 

74,400

 

Other

 

3,782

 

 

 

4,012

 

 

 

15,922

 

 

 

13,815

 

Total

$

221,503

 

 

$

222,958

 

 

$

670,093

 

 

$

642,530

 
Revenue By End Market

The Company primarily operates in two end markets: the medical market and the advanced industrial market. Revenue by end market was approximately as follows:

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 29,

 

 

September 30,

 

 

September 29,

 

 

September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Medical

 

57

%

 

 

50

%

 

 

54

%

 

 

48

%

Advanced Industrial

 

43

%

 

 

50

%

 

 

46

%

 

 

52

%

Total

 

100

%

 

 

100

%

 

 

100

%

 

 

100

%
v3.23.3
Revenue - Additional Information (Details) - USD ($)
$ in Millions
 9 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Dec. 31, 2022
Revenue [Line Items]      
Incremental direct costs of obtaining a contract, practical expedient true    
Effects of a financing component, practical expedient true    
Remaining performance obligation for contracts, optional exemption true    
Adoption of Topic 606      
Revenue [Line Items]      
Contract liabilities $ 6.8   $ 8.4
Revenue recognized $ 6.2    
Warranties      
Revenue [Line Items]      
Standard product warranty description The standard warranty periods for the Company’s products are typically 12 months to 36 months. The Company recognizes estimated liabilities associated with standard warranty periods for its products in accordance with the provisions of ASC 450, “Contingencies,” as the Company has the ability to ascertain the likelihood of the liabilities and can reasonably estimate the amount of the liabilities.    
Minimum | Warranties      
Revenue [Line Items]      
Standard warranty period on products 12 months    
Maximum | Warranties      
Revenue [Line Items]      
Standard warranty period on products 36 months    
Maximum | Professional Services      
Revenue [Line Items]      
Percentage of revenue for professional services 3.00% 3.00%  
Duration of professional services performed under customer contract 1 month    
v3.23.3
Business Combinations - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Sep. 29, 2023
Sep. 30, 2022
Dec. 31, 2022
Business Acquisition [Line Items]          
Goodwill $ 477,642   $ 477,642   $ 478,897
Acquisition costs $ 151 $ (151) $ 254 $ (358)  
v3.23.3
Business Combinations - Summary of Fair Values of Assets Acquired and Liabilities Assumed Purchase Price Allocation (Details) - USD ($)
$ in Thousands
Sep. 29, 2023
Dec. 31, 2022
Business Acquisition [Line Items]    
Goodwill $ 477,642 $ 478,897
v3.23.3
Accumulated Other Comprehensive Loss (Details)
$ in Thousands
 9 Months Ended
Sep. 29, 2023
USD ($)
Accumulated Other Comprehensive Income Loss [Line Items]  
Beginning Balance $ 577,586
Ending Balance 644,856
Total Accumulated Other Comprehensive Loss  
Accumulated Other Comprehensive Income Loss [Line Items]  
Beginning Balance (32,009)
Other comprehensive income (loss) (2,068)
Amounts reclassified from accumulated other comprehensive loss 764
Ending Balance (33,313)
Cumulative Translation Adjustments  
Accumulated Other Comprehensive Income Loss [Line Items]  
Beginning Balance (24,427)
Other comprehensive income (loss) (1,980)
Ending Balance (26,407)
Pension Liability Adjustments  
Accumulated Other Comprehensive Income Loss [Line Items]  
Beginning Balance (7,582)
Other comprehensive income (loss) (88)
Amounts reclassified from accumulated other comprehensive loss 764
Ending Balance $ (6,906)
v3.23.3
Computation of Basic and Diluted Earnings per Common Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Sep. 29, 2023
Sep. 30, 2022
Numerators:        
Consolidated net income $ 21,223 $ 22,490 $ 60,367 $ 58,789
Denominators:        
Weighted average common shares outstanding—basic 35,856 35,729 35,839 35,625
Dilutive potential common shares 185 199 185 256
Weighted average common shares outstanding— diluted 36,041 35,928 36,024 35,881
Antidilutive potential common shares excluded from above 49 73 101 104
Earnings per common share:        
Basic $ 0.59 $ 0.63 $ 1.68 $ 1.65
Diluted $ 0.59 $ 0.63 $ 1.68 $ 1.64
v3.23.3
Earnings per Common Share - Additional Information (Details) - shares
shares in Thousands
Sep. 29, 2023
Sep. 30, 2022
Performance Based Restricted Stock Units    
Computation Of Earnings Per Share [Line Items]    
Contingently issuable shares excluded from calculation of weighted average common shares outstanding 143 124
v3.23.3
Fair Value Measurements - Business Combination Contingent Consideration - Additional Information (Details)
 1 Months Ended 9 Months Ended
Mar. 31, 2022
USD ($)
Mar. 31, 2022
EUR (€)
Mar. 31, 2021
USD ($)
Mar. 31, 2021
EUR (€)
Sep. 29, 2023
USD ($)
Sep. 29, 2023
EUR (€)
Sep. 30, 2022
USD ($)
Dec. 31, 2022
USD ($)
Dec. 31, 2022
EUR (€)
Dec. 31, 2021
USD ($)
Dec. 31, 2021
EUR (€)
Dec. 31, 2020
USD ($)
Dec. 31, 2020
EUR (€)
Jul. 31, 2019
USD ($)
Jul. 31, 2019
EUR (€)
Business Acquisition [Line Items]                              
Payment for contingent consideration         $ 81,000   $ 46,254,000                
ARGES GmbH                              
Business Acquisition [Line Items]                              
Fair value of contingent consideration               $ 400,000 € 400,000 $ 3,800,000 € 3,300,000 $ 5,100,000 € 4,100,000 $ 7,900,000 € 7,100,000
Adjustment to contingent consideration liabilities         0                    
Undiscounted low range of contingent consideration | €                             0
Undiscounted high range of contingent consideration                           $ 11,100,000 € 10,000,000
Payment for contingent consideration $ 400,000 € 300,000 $ 400,000 € 400,000 $ 100,000 € 100,000                  
v3.23.3
Fair Values of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value Measurements Recurring - USD ($)
$ in Thousands
Sep. 29, 2023
Dec. 31, 2022
Assets    
Cash equivalents $ 1,724 $ 1,369
Assets, fair value 1,961 1,760
Liabilities    
Liabilities, fair value 364 837
Prepaid Expenses and Other Current Assets    
Assets    
Foreign currency forward contracts 23 391
Accrued Expenses and Other Current Liabilities    
Assets    
Foreign currency forward contracts 237  
Liabilities    
Contingent considerations - Current 45 124
Foreign currency forward contracts   412
Other Liabilities    
Liabilities    
Contingent considerations - Long-term 296 301
Quoted Prices in Active Markets for Identical Assets (Level 1)    
Assets    
Cash equivalents 1,724 1,369
Assets, fair value 1,724 1,369
Significant Other Observable Inputs (Level 2)    
Assets    
Assets, fair value 237 391
Liabilities    
Liabilities, fair value 23 412
Significant Other Observable Inputs (Level 2) | Prepaid Expenses and Other Current Assets    
Assets    
Foreign currency forward contracts 23 391
Significant Other Observable Inputs (Level 2) | Accrued Expenses and Other Current Liabilities    
Assets    
Foreign currency forward contracts 237  
Liabilities    
Foreign currency forward contracts   412
Significant Other Unobservable Inputs (Level 3)    
Liabilities    
Liabilities, fair value 341 425
Significant Other Unobservable Inputs (Level 3) | Accrued Expenses and Other Current Liabilities    
Liabilities    
Contingent considerations - Current 45 124
Significant Other Unobservable Inputs (Level 3) | Other Liabilities    
Liabilities    
Contingent considerations - Long-term $ 296 $ 301
v3.23.3
Fair Value Measurements - Changes in Fair Value of Level 3 Contingent Considerations (Details) - Significant Other Unobservable Inputs (Level 3)
$ in Thousands
 9 Months Ended
Sep. 29, 2023
USD ($)
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]  
Beginning balance $ 425
Payments (81)
Fair value adjustments $ 0
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] Restructuring Charges And Acquisition Related Costs
Effect of foreign exchange rates $ (3)
Ending balance $ 341
v3.23.3
Foreign Currency Contracts - Additional Information (Details) - Foreign Currency Forward Contracts - USD ($)
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 29, 2023
Sep. 30, 2022
Dec. 31, 2022
Derivative [Line Items]            
Notional amount of foreign currency forward contracts $ 163,500,000     $ 163,500,000   $ 117,100,000
Net gain (loss) on foreign currency forward contracts       $ 200,000    
Foreign Exchange Transaction Gains (Losses)            
Derivative [Line Items]            
Net gain (loss) on foreign currency forward contracts $ (200,000) $ (800,000) $ 2,500,000   $ (2,300,000)  
Maximum            
Derivative [Line Items]            
Net gain (loss) on foreign currency forward contracts           $ (100,000)
v3.23.3
Goodwill and Intangible Assets - Additional Information (Details)
 3 Months Ended
Jun. 30, 2023
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
Impairment of goodwill and intangible assets $ 0
v3.23.3
Summary of Changes in Goodwill (Details)
$ in Thousands
 9 Months Ended
Sep. 29, 2023
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
Balance at beginning of the period $ 478,897
Effect of foreign exchange rate changes (1,255)
Balance at end of the period $ 477,642
v3.23.3
Goodwill By Reportable Segment (Details) - USD ($)
$ in Thousands
Sep. 29, 2023
Dec. 31, 2022
Goodwill [Line Items]    
Goodwill $ 628,871 $ 630,126
Accumulated impairment of goodwill (151,229) (151,229)
Total 477,642 478,897
Precision Medicine and Manufacturing    
Goodwill [Line Items]    
Goodwill 208,110 208,387
Accumulated impairment of goodwill (102,461) (102,461)
Total 105,649 105,926
Medical Solutions    
Goodwill [Line Items]    
Goodwill 166,905 167,891
Accumulated impairment of goodwill (31,722) (31,722)
Total 135,183 136,169
Robotics and Automation    
Goodwill [Line Items]    
Goodwill 253,856 253,848
Accumulated impairment of goodwill (17,046) (17,046)
Total $ 236,810 $ 236,802
v3.23.3
Intangible Assets (Details) - USD ($)
$ in Thousands
Sep. 29, 2023
Dec. 31, 2022
Schedule of Intangible Assets Disclosure [Line Items]    
Amortizable intangible assets, gross carrying amount $ 429,249 $ 430,073
Amortizable intangible assets, accumulated amortization (291,180) (267,334)
Amortizable intangible assets, net carrying amount 138,069 162,739
Non-amortizable intangible assets 13,027 13,027
Gross carrying amount 442,276 443,100
Net carrying amount 151,096 175,766
Patents and Developed Technologies    
Schedule of Intangible Assets Disclosure [Line Items]    
Amortizable intangible assets, gross carrying amount 184,246 184,589
Amortizable intangible assets, accumulated amortization (141,182) (132,350)
Amortizable intangible assets, net carrying amount 43,064 52,239
Customer Relationships    
Schedule of Intangible Assets Disclosure [Line Items]    
Amortizable intangible assets, gross carrying amount 221,706 222,173
Amortizable intangible assets, accumulated amortization (135,476) (121,527)
Amortizable intangible assets, net carrying amount 86,230 100,646
Trademarks and Trade Names    
Schedule of Intangible Assets Disclosure [Line Items]    
Amortizable intangible assets, gross carrying amount 23,297 23,311
Amortizable intangible assets, accumulated amortization (14,522) (13,457)
Amortizable intangible assets, net carrying amount $ 8,775 $ 9,854
v3.23.3
Amortization Expense of Intangible Assets (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Sep. 29, 2023
Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]        
Amortization expense – cost of revenue $ 3,051 $ 3,247 $ 9,119 $ 10,004
Amortization expense - operating expenses 5,131 6,472 15,344 20,987
Total amortization expense $ 8,182 $ 9,719 $ 24,463 $ 30,991
v3.23.3
Estimated Amortization Expense (Details) - USD ($)
$ in Thousands
Sep. 29, 2023
Dec. 31, 2022
Finite Lived Intangible Assets [Line Items]    
2023 (remainder of year) $ 8,070  
2024 26,769  
2025 22,667  
2026 19,160  
2027 14,058  
Thereafter 47,345  
Amortizable intangible assets, net carrying amount 138,069 $ 162,739
Cost of Revenue    
Finite Lived Intangible Assets [Line Items]    
2023 (remainder of year) 3,005  
2024 9,771  
2025 8,289  
2026 6,933  
2027 4,197  
Thereafter 10,869  
Amortizable intangible assets, net carrying amount 43,064  
Operating Expenses    
Finite Lived Intangible Assets [Line Items]    
2023 (remainder of year) 5,065  
2024 16,998  
2025 14,378  
2026 12,227  
2027 9,861  
Thereafter 36,476  
Amortizable intangible assets, net carrying amount $ 95,005  
v3.23.3
Inventories (Details) - USD ($)
$ in Thousands
Sep. 29, 2023
Dec. 31, 2022
Inventory Disclosure [Abstract]    
Raw materials $ 109,067 $ 118,292
Work-in-process 21,266 23,328
Finished goods 23,096 25,738
Demo and consigned inventory 380 639
Total inventories $ 153,809 $ 167,997
v3.23.3
Accrued Expenses and Other Current Liabilities (Details) - USD ($)
$ in Thousands
Sep. 29, 2023
Dec. 31, 2022
Sep. 30, 2022
Dec. 31, 2021
Other Liabilities Disclosure [Abstract]        
Accrued compensation and benefits $ 26,691 $ 35,501    
Accrued warranty 5,498 5,127 $ 4,738 $ 4,783
Contract liabilities, current portion 6,576 8,128    
Finance lease obligations 708 668    
Other 14,902 13,620    
Total $ 54,375 $ 63,044    
v3.23.3
Accrued Warranty (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Product Warranties Disclosures [Abstract]    
Balance at beginning of the period $ 5,127 $ 4,783
Provision charged to cost of revenue 1,837 2,091
Use of provision (1,467) (1,933)
Foreign currency exchange rate changes 1 (203)
Balance at end of the period $ 5,498 $ 4,738
v3.23.3
Other Long Term Liabilities (Details) - USD ($)
$ in Thousands
Sep. 29, 2023
Dec. 31, 2022
Other Liabilities Disclosure [Abstract]    
Finance lease obligations $ 4,117 $ 4,652
Accrued contingent considerations and earn-outs 296 301
Other 792 1,132
Total $ 5,205 $ 6,085
v3.23.3
Outstanding Debt (Details) - USD ($)
$ in Thousands
Sep. 29, 2023
Dec. 31, 2022
Debt Instrument [Line Items]    
Total current portion of long-term debt $ 4,736 $ 4,800
Total long-term debt 347,879 430,662
Total Senior Credit Facilities 352,615 435,462
Term Loan    
Debt Instrument [Line Items]    
Current portion of long-term debt, Gross 4,763 4,832
Long-term debt, Gross 72,400 77,060
Term Loan And Revolving Credit Facility    
Debt Instrument [Line Items]    
Less: unamortized debt issuance costs (27) (32)
Less: unamortized debt issuance costs (3,944) (4,811)
Revolving Credit Facility    
Debt Instrument [Line Items]    
Long-term debt, Gross $ 279,423 $ 358,413
v3.23.3
Debt - Additional Information (Details)
 1 Months Ended 9 Months Ended
Mar. 10, 2022
USD ($)
Dec. 31, 2019
USD ($)
Mar. 31, 2020
EUR (€)
Sep. 29, 2023
USD ($)
Sep. 29, 2023
EUR (€)
Sep. 30, 2022
USD ($)
Oct. 05, 2021
USD ($)
Mar. 27, 2020
USD ($)
Dec. 31, 2019
EUR (€)
Debt Instrument [Line Items]                  
Repayment of debt       $ 82,047,000   $ 37,791,000      
Third Amended and Restated Credit Agreement                  
Debt Instrument [Line Items]                  
Maximum borrowing capacity   $ 450,000,000.0              
Third Amended and Restated Credit Agreement | First Amendment Revolving Credit Facility                  
Debt Instrument [Line Items]                  
Maximum borrowing capacity               $ 495,000,000  
Increased in line of credit facility               145,000,000  
Line of credit facility accordion potential feature               $ 200,000,000  
Third Amended and Restated Credit Agreement | Term Loan                  
Debt Instrument [Line Items]                  
Maximum borrowing capacity   $ 100,000,000.0             € 90,200,000
Senior credit facilities maturity period   5 years              
Debt instrument, frequency of periodic payment     quarterly            
Quarterly installments payable on term loan | €     € 1,100,000            
Repayment of debt       3,600,000 € 3,400,000        
Third Amended and Restated Credit Agreement | Revolving Credit Facility                  
Debt Instrument [Line Items]                  
Maximum borrowing capacity   $ 350,000,000              
Senior credit facilities maturity period   5 years              
Repayment of debt       $ 78,400,000          
Third Amended and Restated Credit Agreement | Fourth Amendment Revolving Credit Facility                  
Debt Instrument [Line Items]                  
Maximum borrowing capacity             $ 695,000,000    
Increased in line of credit facility             200,000,000    
Line of credit facility accordion potential feature             $ 200,000,000    
Third Amended and Restated Credit Agreement | Fifth Amendment Revolving Credit Facility                  
Debt Instrument [Line Items]                  
Line of credit facility accordion potential feature $ 350,000,000                
Deferred financing costs capitalized 2,500,000                
Loss from write-off of portion of unamortized deferred financing costs $ 600,000                
v3.23.3
Leases - Additional Information (Details)
 9 Months Ended
Sep. 29, 2023
Lessee Lease Description [Line Items]  
Lease renewal terms and termination description Certain leases include one or more options to renew, with renewal terms that can extend the lease term from one to ten years, and options to terminate the leases within one year.
Minimum  
Lessee Lease Description [Line Items]  
Lease agreement expiration year 2023
Lease renewal terms 1 year
Maximum  
Lessee Lease Description [Line Items]  
Lease agreement expiration year 2036
Lease renewal terms 10 years
Lease termination period 1 year
Land | Maximum  
Lessee Lease Description [Line Items]  
Lease agreement expiration year 2078
v3.23.3
Summary of Components of Lease Costs (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Sep. 29, 2023
Sep. 30, 2022
Leases [Abstract]        
Operating lease cost $ 2,639 $ 2,544 $ 7,916 $ 7,936
Finance lease cost        
Amortization of right-of-use assets 150 150 452 451
Interest on lease liabilities 68 77 208 234
Variable lease cost 227 271 787 888
Total lease cost $ 3,084 $ 3,042 $ 9,363 $ 9,509
v3.23.3
Summary of Balance Sheet Information Related to Leases (Details) - USD ($)
$ in Thousands
Sep. 29, 2023
Dec. 31, 2022
Operating leases    
Operating lease right-of-use assets $ 40,527 $ 43,317
Current portion of operating lease liabilities 8,072 7,793
Operating lease liabilities 38,577 40,808
Total operating lease liabilities 46,649 48,601
Finance leases    
Finance lease right-of-use assets gross 9,582 9,582
Finance lease right-of-use assets accumulated depreciation (6,122) (5,670)
Finance lease assets included in property, plant and equipment, net $ 3,460 $ 3,912
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] Property, plant and equipment, net Property, plant and equipment, net
Current portion of finance lease liabilities $ 708 $ 668
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] Accrued expenses and other current liabilities Accrued expenses and other current liabilities
Noncurrent portion of finance lease liabilities $ 4,117 $ 4,652
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] Other liabilities Other liabilities
Total finance lease liabilities $ 4,825 $ 5,320
Weighted-average remaining lease term (in years):    
Operating leases 7 years 8 months 12 days 8 years 2 months 12 days
Finance leases 5 years 9 months 18 days 6 years 6 months
Weighted-average discount rate:    
Operating leases 4.84% 4.64%
Finance leases 5.54% 5.54%
v3.23.3
Summary of Cash Flow Information Related to Leases (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Cash paid for amounts included in lease liabilities:    
Operating cash flows from finance leases $ 208 $ 234
Operating cash flows from operating leases 5,916 5,921
Financing cash flows from finance leases 484 447
Supplemental non-cash information:    
Right-of-use assets obtained in exchange for new operating lease liabilities $ 3,893 $ 4,621
v3.23.3
Future Minimum Lease Payments Under Operating and Finance Leases (Details) - USD ($)
$ in Thousands
Sep. 29, 2023
Dec. 31, 2022
Operating Lease    
2023 (remainder of year) $ 2,426  
2024 9,617  
2025 9,386  
2026 7,945  
2027 7,066  
Thereafter 20,832  
Total minimum lease payments 57,272  
Less: Interest (10,623)  
Present value of lease liabilities 46,649 $ 48,601
Finance Lease    
2023 (remainder of year) 238  
2024 954  
2025 954  
2026 979  
2027 1,003  
Thereafter 1,505  
Total minimum lease payments 5,633  
Less: Interest (808)  
Present value of lease liabilities $ 4,825 $ 5,320
v3.23.3
Preferred and Common Shares and Share-based Compensation - Additional Information (Details) - USD ($)
 1 Months Ended 3 Months Ended 9 Months Ended
Feb. 28, 2023
May 31, 2021
Sep. 29, 2023
Sep. 30, 2022
Sep. 29, 2023
Sep. 30, 2022
Dec. 31, 2022
Feb. 29, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                
Preferred shares, Authorized   7,000,000.0 7,000,000   7,000,000   7,000,000  
Preferred shares, voting rights   one vote per share            
Preferred shares, Issued     0   0   0  
Preferred shares, outstanding     0   0   0  
Repurchase of common stock           $ 10,000,000    
Share-based compensation expense recognized     $ 6,037,000 $ 5,954,000 $ 18,378,000 17,809,000    
Selling, General and Administrative Expenses                
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                
Share-based compensation expense recognized     $ 5,229,000 $ 4,649,000 15,631,000 13,906,000    
Employee Stock Option                
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                
Fair value of stock options granted         $ 3,000,000      
Expected annual dividend yield         0.00%      
Hybrid PSUs                
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                
Expected annual dividend yield         0.00%      
Amended and Restated 2010 Incentive Plan | Deferred Stock Units                
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                
Number of outstanding shares     41,000   41,000   38,000  
Amended and Restated 2010 Incentive Plan | Employee Stock Option                
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                
Vesting/Performance period 3 years              
Stock options, Granted 48,000       48,000      
Stock options, Expiration Period 7 years              
Amended and Restated 2010 Incentive Plan | Restricted Stock Units and Deferred Stock Units                
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                
Total fair value of stock units vested         $ 15,200,000      
Amended and Restated 2010 Incentive Plan | Restricted Stock Units and Deferred Stock Units | Board of Directors | Selling, General and Administrative Expenses                
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                
Share-based compensation expense recognized         $ 1,200,000 $ 1,100,000    
Amended and Restated 2010 Incentive Plan | Restricted Stock Units (RSUs) | Maximum                
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                
Vesting/Performance period         5 years      
Amended and Restated 2010 Incentive Plan | Restricted Stock Units (RSUs) | Minimum [Member]                
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                
Vesting/Performance period         0 days      
Amended and Restated 2010 Incentive Plan | Attainment-based PSUs | Maximum                
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                
Range of percentage of shares to be issued upon settlement following vesting of target number of shares         200.00%      
Amended and Restated 2010 Incentive Plan | Attainment-based PSUs | Minimum [Member]                
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                
Range of percentage of shares to be issued upon settlement following vesting of target number of shares         0.00%      
Amended and Restated 2010 Incentive Plan | Market-based PSUs | Maximum                
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                
Range of percentage of shares to be issued upon settlement following vesting of target number of shares         200.00%      
Amended and Restated 2010 Incentive Plan | Market-based PSUs | Minimum [Member]                
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                
Range of percentage of shares to be issued upon settlement following vesting of target number of shares         0.00%      
Amended and Restated 2010 Incentive Plan | Hybrid PSUs | Maximum                
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                
Range of percentage of shares to be issued upon settlement following vesting of target number of shares         260.00%      
Amended and Restated 2010 Incentive Plan | Hybrid PSUs | Minimum [Member]                
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                
Range of percentage of shares to be issued upon settlement following vesting of target number of shares         0.00%      
Amended and Restated 2010 Incentive Plan | Performance Stock Units                
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                
Total fair value of stock units vested         $ 9,900,000      
Maximum number of common shares to be earned under these PSU grants     369,000   369,000      
2020 Repurchase Plan                
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                
Common stock repurchase program authorized amount               $ 50,000,000
Shares repurchased           4,000    
Repurchase of common stock           $ 500,000    
Shares repurchased, average cost per share           $ 116.95    
Available for share repurchases     $ 49,500,000   $ 49,500,000      
v3.23.3
Share-Based Compensation Expense Recorded in the Consolidated Statements of Operations (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Sep. 29, 2023
Sep. 30, 2022
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]        
Share-based compensation expense $ 6,037 $ 5,954 $ 18,378 $ 17,809
Selling, general and administrative        
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]        
Share-based compensation expense 5,229 4,649 15,631 13,906
Research and development and engineering        
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]        
Share-based compensation expense 510 586 1,495 1,780
Cost of Revenue        
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]        
Share-based compensation expense $ 298 $ 719 $ 1,252 $ 2,123
v3.23.3
Restricted Stock Units and Deferred Stock Units Issued and Outstanding (Details) - Amended and Restated 2010 Incentive Plan - Restricted Stock Units and Deferred Stock Units
shares in Thousands
 9 Months Ended
Sep. 29, 2023
$ / shares
shares
Restricted Stock Units  
Unvested, Beginning Balance 238
Granted 91
Vested (102)
Forfeited (24)
Unvested, Ending Balance 203
Expected to vest at end of period 185
Weighted Average Grant Date Fair Value  
Unvested, Beginning Balance | $ / shares $ 128.26
Granted | $ / shares 156.47
Vested | $ / shares 122.48
Forfeited | $ / shares 139.5
Unvested, Ending Balance | $ / shares $ 142.72
v3.23.3
Performance-Based Awards Issued and Outstanding (Details) - Amended and Restated 2010 Incentive Plan - Performance Stock Units
shares in Thousands
 9 Months Ended
Sep. 29, 2023
$ / shares
shares
Performance-based Awards  
Unvested, Beginning Balance 216
Granted 57
Performance adjustments 20
Vested (70)
Forfeited (16)
Unvested, Ending Balance 207
Expected to vest at end of period 246
Weighted Average Grant Date Fair Value  
Unvested, Beginning Balance | $ / shares $ 144.16
Granted | $ / shares 179.15
Performance adjustment | $ / shares 122.24
Vested | $ / shares 116.56
Forfeited | $ / shares 168.97
Unvested, Ending Balance | $ / shares $ 160.40
v3.23.3
Performance-Based Awards Issued and Outstanding (Parenthetical) (Details)
 9 Months Ended
Sep. 29, 2023
EPS and Applicable Relative TSR Performance Condition  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Vesting percentage 142.00%
v3.23.3
Fair Value of TSR Performance-Based Restricted Stock Units Estimated Using Monte-Carol Valuation Method (Details) - Hybrid PSUs
 9 Months Ended
Sep. 29, 2023
$ / shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Grant-date stock price $ 156.72
Expected volatility 35.89%
Risk-free interest rate 4.44%
Expected annual dividend yield 0.00%
Fair value $ 181.45
v3.23.3
Stock Options Issued and Outstanding (Details) - Amended and Restated 2010 Incentive Plan - Employee Stock Option - $ / shares
shares in Thousands
 1 Months Ended 9 Months Ended
Feb. 28, 2023
Sep. 29, 2023
Stock options    
Outstanding as of December 31, 2022   84
Stock options, Granted 48 48
Outstanding as of March 31, 2023   132
Exercisable as of March 31, 2023   57
Expected to vest as of March 31, 2023   75
Weighted Average Exercise Price    
Outstanding as of December 31, 2022   $ 72.18
Granted   156.72
Outstanding as of March 31, 2023   $ 102.86
v3.23.3
Fair Value of Stock Options Granted Estimated Using Black-Scholes Valuation Model (Details) - Employee Stock Option
 9 Months Ended
Sep. 29, 2023
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Expected option term in years 4 years 6 months
Expected volatility 40.70%
Risk-free interest rate 4.00%
Expected annual dividend yield 0.00%
v3.23.3
Income Taxes - Additional Information (Details)
 3 Months Ended 9 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Sep. 29, 2023
Sep. 30, 2022
Income Taxes [Line Items]        
Effective tax rate on income from operations 7.70% 16.00% 11.20% 13.80%
Effective tax rate on income from operations     4.50% 0.20%
Canada Revenue Agency | CANADA        
Income Taxes [Line Items]        
Statutory tax rate 29.00% 29.00% 29.00% 29.00%
v3.23.3
Schedule of Restructuring, Acquisition and Related Costs (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Sep. 29, 2023
Sep. 30, 2022
Restructuring Cost And Reserve [Line Items]        
Total restructuring charges $ 4,330 $ 1,776 $ 7,937 $ 3,008
Acquisition and related charges 151 (151) 254 (358)
Total restructuring, acquisition, and related costs 4,481 1,625 8,191 2,650
2022 Restructuring        
Restructuring Cost And Reserve [Line Items]        
Total restructuring charges 2,450 889 5,324 889
2020 Restructuring        
Restructuring Cost And Reserve [Line Items]        
Total restructuring charges $ 1,880 $ 887 $ 2,613 $ 2,119
v3.23.3
Restructuring, Acquisition, and Related Costs - Additional Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Sep. 29, 2023
Sep. 30, 2022
Restructuring, Acquisition, and Related Costs [Line Items]        
Acquisition and related charges $ 151 $ (151) $ 254 $ (358)
Adjustment in fair values of certain prior-year acquisition contingent considerations   (1,000)   (1,400)
Finders' Fees, Legal, Valuation And Other Professional Or Consulting Fees        
Restructuring, Acquisition, and Related Costs [Line Items]        
Acquisition and related charges 200 $ 800 $ 300 $ 1,100
2022 Restructuring        
Restructuring, Acquisition, and Related Costs [Line Items]        
Restructuring and related cost description     As a result of the Company’s ongoing evaluations and efforts to reduce its operating costs, while improving efficiency and effectiveness, the Company initiated the 2022 restructuring program in the third quarter of 2022. This program is focused on reducing operating complexity in the Company, including reducing infrastructure costs and streamlining the Company’s operating model to better serve its customers. In addition, the program is focused on cost reduction actions that improve gross margins for the overall company in line with the Company's multi-year gross margin expansion program. During the three and nine months ended September 29, 2023, the Company recorded $2.5 million and $5.3 million, respectively, in severance, facility related, and other charges in connection with the 2022 restructuring program. As of September 29, 2023, the Company had incurred cumulative costs of $6.7 million related to this restructuring plan. The Company anticipates substantially completing the 2022 restructuring program by the end of 2023 and expects to incur additional restructuring charges of $2.5 million to $3.0 million related to the 2022 restructuring program.  
Restructuring cumulative costs incurred 6,700   $ 6,700  
2022 Restructuring | Minimum        
Restructuring, Acquisition, and Related Costs [Line Items]        
Restructuring costs 2,500   2,500  
2022 Restructuring | Maximum        
Restructuring, Acquisition, and Related Costs [Line Items]        
Restructuring costs 3,000   3,000  
2022 Restructuring | Severance, Facility Related, and Other Charges        
Restructuring, Acquisition, and Related Costs [Line Items]        
Severance cost 2,500   $ 5,300  
2020 Restructuring        
Restructuring, Acquisition, and Related Costs [Line Items]        
Restructuring and related cost description     The Company initiated the 2020 restructuring program in the third quarter of 2020. This program is focused on reducing operating complexity in the Company, including reducing infrastructure costs and streamlining the Company’s operating model to better serve its customers. In addition, the program is focused on cost reduction actions that improve gross margins for the overall company. During the three and nine months ended September 29, 2023, the Company recorded $1.9 million and $2.6 million respectively, in severance, facility related, and other costs in connection with the 2020 restructuring program. As of September 29, 2023, the Company had incurred cumulative costs of $16.5 million related to this restructuring plan. The 2020 restructuring program was substantially completed in the third quarter of 2023.  
Restructuring cumulative costs incurred 16,500   $ 16,500  
2020 Restructuring | Severance, Facility Related, and Other Charges        
Restructuring, Acquisition, and Related Costs [Line Items]        
Severance cost $ 1,900   $ 2,600  
v3.23.3
Summary of Restructuring Charges by Reportable Segment (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Sep. 29, 2023
Sep. 30, 2022
Restructuring Cost And Reserve [Line Items]        
Restructuring costs $ 4,330 $ 1,776 $ 7,937 $ 3,008
2022 Restructuring        
Restructuring Cost And Reserve [Line Items]        
Restructuring costs 2,450 889 5,324 889
2022 Restructuring | Precision Medicine and Manufacturing        
Restructuring Cost And Reserve [Line Items]        
Restructuring costs 76 889 1,064 889
2022 Restructuring | Medical Solutions        
Restructuring Cost And Reserve [Line Items]        
Restructuring costs 253   293  
2022 Restructuring | Robotics and Automation        
Restructuring Cost And Reserve [Line Items]        
Restructuring costs 1,632   3,168  
2022 Restructuring | Unallocated Corporate and Shared Services        
Restructuring Cost And Reserve [Line Items]        
Restructuring costs 489   799  
2020 Restructuring        
Restructuring Cost And Reserve [Line Items]        
Restructuring costs 1,880 887 2,613 2,119
2020 Restructuring | Precision Medicine and Manufacturing        
Restructuring Cost And Reserve [Line Items]        
Restructuring costs 1,543 758 2,050 1,952
2020 Restructuring | Medical Solutions        
Restructuring Cost And Reserve [Line Items]        
Restructuring costs   101   207
2020 Restructuring | Robotics and Automation        
Restructuring Cost And Reserve [Line Items]        
Restructuring costs $ 337 22 $ 563 (46)
2020 Restructuring | Unallocated Corporate and Shared Services        
Restructuring Cost And Reserve [Line Items]        
Restructuring costs   $ 6   $ 6
v3.23.3
Summary of Accrual Activities by Components Related to Company's Restructuring Charges (Details)
$ in Thousands
 9 Months Ended
Sep. 29, 2023
USD ($)
Restructuring Cost And Reserve [Line Items]  
Accrued expense beginning balance $ 2,410
Restructuring charges 7,937
Cash payments (5,969)
Non-cash write-offs and other adjustments (1,346)
Accrued expense ending balance 3,032
Employee Related  
Restructuring Cost And Reserve [Line Items]  
Accrued expense beginning balance 1,902
Restructuring charges 4,799
Cash payments (4,803)
Non-cash write-offs and other adjustments 20
Accrued expense ending balance 1,918
Facility Related  
Restructuring Cost And Reserve [Line Items]  
Accrued expense beginning balance 452
Restructuring charges 1,929
Cash payments (600)
Non-cash write-offs and other adjustments (823)
Accrued expense ending balance 958
Other Restructuring Charges  
Restructuring Cost And Reserve [Line Items]  
Accrued expense beginning balance 56
Restructuring charges 1,209
Cash payments (566)
Non-cash write-offs and other adjustments (543)
Accrued expense ending balance $ 156
v3.23.3
Summary of Accrual Activities by Components Related to Company's Restructuring Charges (Parenthetical) (Details)
$ in Thousands
 9 Months Ended
Sep. 29, 2023
USD ($)
Business Combinations [Abstract]  
Impairment of assets $ 1,421
v3.23.3
Commitments and Contingencies - Additional Information (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 29, 2023
Sep. 29, 2023
Commitments and Contingencies Disclosure [Abstract]    
Insurance recovery payments $ 4.4 $ 5.0
v3.23.3
Segment Information - Additional Information (Details)
 9 Months Ended
Sep. 29, 2023
EndMarket
Segment
Segment Reporting [Abstract]  
Number of reportable segments | Segment 3
Number of primary end market segments | EndMarket 2
v3.23.3
Revenue, Gross Profit, Gross Profit Margin and Operating Income (Loss) by Reportable Segment (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Sep. 29, 2023
Sep. 30, 2022
Segment Reporting Information [Line Items]        
Revenue $ 221,503 $ 222,958 $ 670,093 $ 642,530
Gross Profit $ 101,591 $ 98,408 $ 303,342 $ 283,929
Gross profit margin percentage 45.90% 44.10% 45.30% 44.20%
Operating Income (Loss) $ 30,309 $ 28,661 $ 88,819 $ 76,235
Operating Segments | Precision Medicine and Manufacturing        
Segment Reporting Information [Line Items]        
Revenue 71,277 70,799 215,138 203,042
Gross Profit $ 36,208 $ 34,699 $ 107,054 $ 94,268
Gross profit margin percentage 50.80% 49.00% 49.80% 46.40%
Operating Income (Loss) $ 18,508 $ 18,351 $ 54,803 $ 45,782
Operating Segments | Medical Solutions        
Segment Reporting Information [Line Items]        
Revenue 83,378 73,345 244,340 200,911
Gross Profit $ 34,027 $ 28,201 $ 100,170 $ 79,966
Gross profit margin percentage 40.80% 38.40% 41.00% 39.80%
Operating Income (Loss) $ 11,050 $ 8,744 $ 30,974 $ 20,811
Operating Segments | Robotics and Automation        
Segment Reporting Information [Line Items]        
Revenue 66,848 78,814 210,615 238,577
Gross Profit $ 32,652 $ 36,832 $ 100,376 $ 113,846
Gross profit margin percentage 48.80% 46.70% 47.70% 47.70%
Operating Income (Loss) $ 12,208 $ 15,800 $ 39,456 $ 48,222
Unallocated Corporate and Shared Services        
Segment Reporting Information [Line Items]        
Gross Profit (1,296) (1,324) (4,258) (4,151)
Operating Income (Loss) $ (11,457) $ (14,234) $ (36,414) $ (38,580)
v3.23.3
Depreciation and Amortization Expenses by Reportable Segment (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Sep. 29, 2023
Sep. 30, 2022
Depreciation and Amortization Expenses        
Depreciation and amortization expenses $ 11,397 $ 13,143 $ 35,065 $ 40,999
Unallocated Corporate and Shared Services        
Depreciation and Amortization Expenses        
Depreciation and amortization expenses 188 93 820 309
Precision Medicine and Manufacturing | Operating Segments        
Depreciation and Amortization Expenses        
Depreciation and amortization expenses 2,644 2,760 7,901 8,234
Medical Solutions | Operating Segments        
Depreciation and Amortization Expenses        
Depreciation and amortization expenses 3,860 4,240 11,877 12,989
Robotics and Automation | Operating Segments        
Depreciation and Amortization Expenses        
Depreciation and amortization expenses $ 4,705 $ 6,050 $ 14,467 $ 19,467
v3.23.3
Schedule of Geographic Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Sep. 29, 2023
Sep. 30, 2022
Segment Reporting Information [Line Items]        
Revenue $ 221,503 $ 222,958 $ 670,093 $ 642,530
United States        
Segment Reporting Information [Line Items]        
Revenue 110,462 99,230 321,898 268,585
Germany        
Segment Reporting Information [Line Items]        
Revenue 33,263 34,625 100,222 99,526
Rest of Europe        
Segment Reporting Information [Line Items]        
Revenue 34,257 33,996 98,159 105,327
China        
Segment Reporting Information [Line Items]        
Revenue 15,679 24,209 54,331 80,877
Rest of Asia-Pacific        
Segment Reporting Information [Line Items]        
Revenue 24,060 26,886 79,561 74,400
Other Countries        
Segment Reporting Information [Line Items]        
Revenue $ 3,782 $ 4,012 $ 15,922 $ 13,815
v3.23.3
Schedule of Revenue by End Market (Details)
 3 Months Ended 9 Months Ended
Sep. 29, 2023
Sep. 30, 2022
Sep. 29, 2023
Sep. 30, 2022
Segment Reporting Information [Line Items]        
Total revenue by end market 100.00% 100.00% 100.00% 100.00%
Medical        
Segment Reporting Information [Line Items]        
Total revenue by end market 57.00% 50.00% 54.00% 48.00%
Advanced Industrial        
Segment Reporting Information [Line Items]        
Total revenue by end market 43.00% 50.00% 46.00% 52.00%