INTEGER HOLDINGS CORP, 10-K filed on 3/1/2016
Annual Report
Document and Entity Information (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Mar. 1, 2016
Jul. 3, 2015
Document and Entity Information [Abstract]
 
 
 
Entity Registrant Name
GREATBATCH, INC. 
 
 
Entity Central Index Key
0001114483 
 
 
Document Type
10-K 
 
 
Document Period End Date
Jan. 01, 2016 
 
 
Amendment Flag
false 
 
 
Document Fiscal Year Focus
2015 
 
 
Document Fiscal Period Focus
FY 
 
 
Current Fiscal Year End Date
--01-01 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Entity Public Float
 
 
$ 1,342 
Entity Common Stock, Shares Outstanding
 
30,778,835 
 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Jan. 1, 2016
Jan. 2, 2015
Current assets:
 
 
Cash and cash equivalents
$ 82,478 
$ 76,824 
Accounts receivable, net of allowance for doubtful accounts of $1.0 million in 2015 and $1.4 million in 2014
207,342 
124,953 
Inventories
252,166 
129,242 
Refundable income taxes
11,730 
1,716 
Deferred income taxes
6,168 
Prepaid expenses and other current assets
20,888 
11,780 
Total current assets
574,604 
350,683 
Property, plant and equipment, net
379,492 
144,925 
Amortizing intangible assets, net
893,977 
65,337 
Indefinite-lived intangible assets
90,288 
20,288 
Goodwill
1,013,570 
354,393 
Deferred income taxes
3,587 
2,626 
Other assets
26,618 
16,870 
Total assets
2,982,136 
955,122 
Current liabilities:
 
 
Current portion of long-term debt
29,000 
11,250 
Accounts payable
84,362 
46,436 
Income taxes payable
3,221 
2,003 
Deferred income taxes
588 
Accrued expenses
97,257 
48,384 
Total current liabilities
213,840 
108,661 
Long-term debt
1,685,053 
175,363 
Deferred income taxes
221,804 
53,195 
Other long-term liabilities
10,814 
4,541 
Total liabilities
2,131,511 
341,760 
Commitments and contingencies
   
   
Stockholders’ equity:
 
 
Preferred stock, $0.001 par value, authorized 100,000,000 shares; no shares issued or outstanding in 2015 or 2014
Common stock, $0.001 par value, authorized 100,000,000 shares; 30,664,119 shares issued and 30,601,167 shares outstanding in 2015; 25,099,293 shares issued and 25,070,931 shares outstanding in 2014
31 
25 
Additional paid-in capital
620,470 
366,073 
Treasury stock, at cost, 62,952 shares in 2015 and 28,362 shares in 2014
(3,100)
(1,307)
Retained earnings
231,854 
239,448 
Accumulated other comprehensive income
1,370 
9,123 
Total stockholders’ equity
850,625 
613,362 
Total liabilities and stockholders’ equity
$ 2,982,136 
$ 955,122 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Jan. 1, 2016
Jan. 2, 2015
Current assets:
 
 
Allowance for doubtful accounts
$ 1.0 
$ 1.4 
Stockholders’ equity:
 
 
Preferred stock, par value
$ 0.001 
$ 0.001 
Preferred stock, shares authorized
100,000,000 
100,000,000 
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value
$ 0.001 
$ 0.001 
Common stock, shares authorized
100,000,000 
100,000,000 
Common stock, shares issued
30,664,119 
25,099,293 
Common stock, shares outstanding
30,601,167 
25,070,931 
Treasury stock, shares
62,952 
28,362 
Consolidated Statements of Operations and Comprehensive Income (Loss) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Income Statement [Abstract]
 
 
 
Sales
$ 800,414 
$ 687,787 
$ 663,945 
Cost of sales
565,279 
456,389 
444,632 
Gross profit
235,135 
231,398 
219,313 
Operating expenses:
 
 
 
Selling, general and administrative expenses
102,530 
90,602 
88,107 
Research, development and engineering costs, net
52,995 
49,845 
54,077 
Other operating expenses, net
66,464 
15,297 
15,790 
Total operating expenses
221,989 
155,744 
157,974 
Operating income
13,146 
75,654 
61,339 
Interest expense
33,513 
4,252 
11,261 
(Gain) loss on cost and equity method investments, net
(3,350)
(4,370)
694 
Other (income) expense, net
(1,317)
(807)
546 
Income (loss) before provision for income taxes
(15,700)
76,579 
48,838 
Provision (benefit) for income taxes
(8,106)
21,121 
12,571 
Net income (loss)
(7,594)
55,458 
36,267 
Earnings (loss) per share:
 
 
 
Basic (in dollars per share)
$ (0.29)
$ 2.23 
$ 1.51 
Diluted (in dollars per share)
$ (0.29)
$ 2.14 
$ 1.43 
Weighted average shares outstanding:
 
 
 
Basic (in shares)
26,363 
24,825 
23,991 
Diluted (in shares)
26,363 
25,975 
25,323 
Comprehensive Income (Loss)
 
 
 
Net income (loss)
(7,594)
55,458 
36,267 
Foreign currency translation gain (loss)
(7,841)
(3,502)
1,521 
Net change in cash flow hedges, net of tax
108 
(1,359)
(382)
Defined benefit plan liability adjustment, net of tax
(20)
(374)
272 
Other comprehensive income (loss)
(7,753)
(5,235)
1,411 
Comprehensive income (loss)
$ (15,347)
$ 50,223 
$ 37,678 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Cash flows from operating activities:
 
 
 
Net income (loss)
$ (7,594)
$ 55,458 
$ 36,267 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
Depreciation and amortization
44,632 
37,197 
35,966 
Debt related charges included in interest expense
11,320 
773 
6,366 
Inventory step-up amortization
22,986 
260 
Stock-based compensation
9,376 
13,186 
14,101 
Non-cash (gain) loss on cost and equity method investments, net
(275)
4,370 
(694)
Other non-cash (gains) losses, net
1,093 
(3,214)
255 
Deferred income taxes
(10,298)
531 
(29,856)
Changes in operating assets and liabilities, net of acquisitions:
 
 
 
Accounts receivable
3,684 
(11,731)
7,379 
Inventories
(25,752)
(6,726)
(11,508)
Prepaid expenses and other assets
(1,861)
(3,281)
(353)
Accounts payable
3,129 
(970)
1,307 
Accrued expenses
(28,605)
1,214 
(1,176)
Income taxes payable
(9,906)
2,949 
(2,687)
Net cash provided by operating activities
12,479 
81,276 
56,755 
Cash flows from investing activities:
 
 
 
Proceeds from sale of orthopaedic product lines
2,655 
4,746 
Acquisition of property, plant and equipment
(44,616)
(24,827)
(18,858)
Proceeds from sale of property, plant and equipment
746 
300 
Proceeds from sale (purchase of) cost and equity method investments, net
(6,300)
2,248 
(3,732)
Acquisitions, net of cash acquired
(423,389)
(16,002)
Other investing activities, net
(740)
Net cash used in investing activities
(473,559)
(35,922)
(18,284)
Cash flows from financing activities:
 
 
 
Principal payments of long-term debt
(1,232,175)
(10,000)
(458,282)
Proceeds from issuance of long-term debt, net of discount
1,749,750 
425,000 
Issuance of common stock
6,583 
8,278 
12,807 
Payment of debt issuance costs
(45,933)
(2,802)
Purchase of non-controlling interests
(9,875)
Other financing activities, net
(440)
(655)
(81)
Net cash provided by (used in) financing activities
467,910 
(2,377)
(23,358)
Effect of foreign currency exchange rates on cash and cash equivalents
(1,176)
(1,618)
68 
Net increase in cash and cash equivalents
5,654 
41,359 
15,181 
Cash and cash equivalents, beginning of year
76,824 
35,465 
20,284 
Cash and cash equivalents, end of year
$ 82,478 
$ 76,824 
$ 35,465 
Consolidated Statement of Stockholders' Equity (USD $)
In Thousands, unless otherwise specified
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Treasury Stock [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Balance at Dec. 28, 2012
$ 480,860 
$ 24 
$ 320,618 
$ (452)
$ 147,723 
$ 12,947 
Balance, shares at Dec. 28, 2012
 
23,732 
 
(20)
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Stock-based compensation
9,333 
 
9,333 
 
 
 
Net shares issued (acquired) under stock incentive plans
11,465 
12,245 
(780)
 
 
Net shares issued under stock incentive plans, shares
 
636 
 
(17)
 
 
Income tax benefit from stock options, restricted stock and restricted stock units
242 
 
242 
 
 
 
Shares contributed to 401(k) Plan
2,477 
2,477 
 
 
Shares contributed to 401(k) Plan, shares
 
91 
 
 
 
Issuance of shares in connection with acquisition
 
 
 
 
 
Issuance of roll-over options in connection with acquisition
 
 
 
 
 
Net income (loss)
36,267 
 
 
 
36,267 
 
Total other comprehensive income (loss)
1,411 
 
 
 
 
1,411 
Balance at Jan. 03, 2014
542,055 
24 
344,915 
(1,232)
183,990 
14,358 
Balance, shares at Jan. 03, 2014
 
24,459 
 
(37)
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Stock-based compensation
8,921 
 
8,921 
 
 
 
Net shares issued (acquired) under stock incentive plans
3,465 
7,754 
(4,290)
 
 
Net shares issued under stock incentive plans, shares
 
640 
 
(86)
 
 
Income tax benefit from stock options, restricted stock and restricted stock units
4,357 
 
4,357 
 
 
 
Shares contributed to 401(k) Plan
4,341 
126 
4,215 
 
 
Shares contributed to 401(k) Plan, shares
 
 
95 
 
 
Issuance of shares in connection with acquisition
 
 
 
 
 
Issuance of roll-over options in connection with acquisition
 
 
 
 
 
Net income (loss)
55,458 
 
 
 
55,458 
 
Total other comprehensive income (loss)
(5,235)
 
 
 
 
(5,235)
Balance at Jan. 02, 2015
613,362 
25 
366,073 
(1,307)
239,448 
9,123 
Balance, shares at Jan. 02, 2015
 
25,099 
 
(28)
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Stock-based compensation
9,364 
 
9,364 
 
 
 
Net shares issued (acquired) under stock incentive plans
504 
5,764 
(5,261)
 
 
Net shares issued under stock incentive plans, shares
 
585 
 
(107)
 
 
Income tax benefit from stock options, restricted stock and restricted stock units
5,639 
 
5,639 
 
 
 
Shares contributed to 401(k) Plan
3,920 
452 
3,468 
 
 
Shares contributed to 401(k) Plan, shares
 
 
72 
 
 
Issuance of shares in connection with acquisition
245,368 
245,363 
 
 
 
Issuance of shares in connection with acquisition, shares
 
4,980 
 
 
 
 
Issuance of roll-over options in connection with acquisition
4,508 
 
4,508 
 
 
 
Purchase of non-controlling interests in subsidiaries
(16,693)
 
(16,693)
 
 
 
Net income (loss)
(7,594)
 
 
 
(7,594)
 
Total other comprehensive income (loss)
(7,753)
 
 
 
 
(7,753)
Balance at Jan. 01, 2016
$ 850,625 
$ 31 
$ 620,470 
$ (3,100)
$ 231,854 
$ 1,370 
Balance, shares at Jan. 01, 2016
 
30,664 
 
(63)
 
 
Summary of Significant Accounting Policies
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1.
 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation – The consolidated financial statements include the accounts of Greatbatch, Inc. and its wholly owned subsidiaries (collectively, the “Company” or “Greatbatch”). All intercompany balances and transactions have been eliminated in consolidation.
Nature of Operations – On October 27, 2015, the Company acquired all of the outstanding common stock of Lake Region Medical Holdings, Inc. (“Lake Region Medical”) for a total purchase price including debt assumed of approximately $1.77 billion. As a result, the Company now has three reportable segments: Greatbatch Medical, QiG Group (“QiG”), and Lake Region Medical. In February 2016, Greatbatch announced that its Board of Directors has approved the spin-off of a portion of its QiG segment through a tax-free distribution of its QiG Group LLC subsidiary to the stockholders of Greatbatch on a pro rata basis (the “Spin-off”). Immediately prior to completion of the Spin-off, QiG Group LLC will be converted into a corporation organized under the laws of Delaware and change its name to Nuvectra Corporation (“Nuvectra”). The Spin-off is expected to be completed in March 2016. As a result of the Lake Region Medical acquisition and the pending Spin-off, the Company is reevaluating its operating and reporting segments, which is expected to be finalized in 2016 once the corporate and management reporting structure realignment is completed. Note 19 “Business Segment, Geographic and Concentration Risk Information” contains additional information on our reporting segments.
Simultaneous with the close of the Lake Region Medical acquisition, the Company also announced its intention to rename the combined entity Integer Holdings Corporation. Integer is defined as complete, whole, and comprehensive, and represents the joining of Greatbatch and Lake Region Medical as well as the combined company's product and service offerings provided to customers. The new name is subject to Greatbatch shareholder approval at the May 2016 annual meeting.
Greatbatch Medical designs and manufactures products where Greatbatch either owns the intellectual property or has unique manufacturing and assembly expertise. These products include medical devices and components for the cardiac, neuromodulation, orthopaedics, portable medical, vascular and energy markets among others. The Greatbatch Medical segment also offers value-added assembly and design engineering services for medical devices that utilize its component products.
The QiG segment focuses on the design and development of medical device systems and components. QiG is in the process of developing applications for its neurostimulation technology platform for emerging indications such as spinal cord stimulation (“SCS”), sacral nerve stimulation (“SNS”), and deep brain stimulation (“DBS”), among others. QiG’s Algostim, LLC (“Algostim”) subsidiary is focused on the development and commercialization of its Algovita SCS system (“Algovita”), the first application of its neurostimulation technology platform and received PMA approval in the fourth quarter of 2015. QiG’s PelviStim LLC (“PelviStim”) subsidiary is focused on the commercialization of QiG’s neurostimulation technology platform for SNS. The QiG segment also includes NeuroNexus Technologies, Inc. (“NeuroNexus”), and Centro de Construcción de Cardioestimuladores del Uruguay (“CCC”). The Spin-off is expected to consist of QiG Group LLC and its subsidiaries Algostim, PelviStim and NeuroNexus. The operations of CCC and certain other existing QiG research and development capabilities will be retained and not included as part of the Spin-off.
Lake Region Medical has operated as a new segment for Greatbatch since it was acquired during the fourth quarter of 2015. This segment specializes in the design, development, and manufacturing of products across the medical component and device spectrum, primarily serving the cardio, vascular and advanced surgical markets. Lake Region Medical offers fully integrated outsourced manufacturing, regulatory and engineering services, contract manufacturing, finished device assembly services, original device development, and supply chain management to its customers.
The Company’s customers include large multi-national original equipment manufacturers (“OEMs”) and their affiliated subsidiaries.
Fiscal Year End – The Company utilizes a fifty-two, fifty-three week fiscal year ending on the Friday nearest December 31. Fiscal years 2015, 2014 and 2013 ended on January 1, 2016January 2, 2015 and January 3, 2014. Fiscal years 2015 and 2014 each contained fifty-two weeks, while fiscal year 2013 contained fifty-three weeks.
Fair Value Measurements – Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the “exit price”) in an orderly transaction between market participants at the measurement date. Accounting Standards Codification (“ASC”) 820, Fair Value Measurements, establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:
Level 1 – Valuation is based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Level 1 valuations do not entail a significant degree of judgment.
Level 2 – Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market.
Level 3 – Valuation is based on unobservable inputs that are significant to the overall fair value measurement. The degree of judgment in determining fair value is greatest for Level 3 valuations.
The availability of observable inputs can vary and is affected by a wide variety of factors, including, the type of asset/liability, whether the asset/liability is established in the marketplace, and other characteristics particular to the valuation. To the extent that a valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, assumptions are required to reflect those that market participants would use in pricing the asset or liability at the measurement date. Note 18 “Fair Value Measurements” contains additional information on assets and liabilities recorded at fair value in the consolidated financial statements.
Cash and Cash Equivalents – Cash and cash equivalents consist of cash and highly liquid, short-term investments with maturities at the time of purchase of three months or less. The carrying amount of cash and cash equivalents approximated their fair value as of January 1, 2016 and January 2, 2015 based upon the short-term nature of these instruments.
Concentration of Credit Risk – Financial instruments that potentially subject the Company to concentration of credit risk consist principally of accounts receivable. A significant portion of the Company’s sales and/or accounts receivable are to four customers, all in the medical device industry, and, as such, the Company is directly affected by the condition of those customers and that industry. However, the credit risk associated with trade receivables is partially mitigated due to the stability of those customers. The Company performs on-going credit evaluations of its customers. Note 19 “Business Segment, Geographic and Concentration Risk Information” contains information on sales and accounts receivable for these customers. The Company maintains cash deposits with major banks, which from time to time may exceed insured limits. The Company performs on-going credit evaluations of its banks.
Allowance for Doubtful Accounts – The Company provides credit, in the normal course of business, to its customers in the form of trade receivables. Credit is extended based on evaluation of a customer’s financial condition and collateral is not required. The Company maintains an allowance for those customer receivables that it does not expect to collect. The Company accrues its estimated losses from uncollectable accounts receivable to the allowance based upon recent historical experience, the length of time the receivable has been outstanding and other specific information as it becomes available. Provisions to the allowance for doubtful accounts are charged to current operating expenses. Actual losses are charged against this allowance when incurred. The carrying amount of trade receivables approximated their fair value as of January 1, 2016 and January 2, 2015 based upon the short-term nature of these assets.
Inventories – Inventories are stated at the lower of cost, determined using the first-in first-out method, or market. Write-downs for excess, obsolete or expired inventory are based primarily on how long the inventory has been held as well as estimates of forecasted net sales of that product. A significant change in the timing or level of demand for products may result in recording additional write-downs for excess, obsolete or expired inventory in the future. Note 4 “Inventories” contains additional information on the Company’s inventory.
Property, Plant and Equipment (“PP&E”) – PP&E is carried at cost less accumulated depreciation. Depreciation is computed by the straight-line method over the estimated useful lives of the assets, as follows: buildings and building improvements 7-40 years; machinery and equipment 3-10 years; office equipment 3-10 years; and leasehold improvements over the remaining lives of the improvements or the lease term, if less. The cost of repairs and maintenance are expensed as incurred; renewals and betterments are capitalized. Upon retirement or sale of an asset, its cost and related accumulated depreciation or amortization is removed from the accounts and any gain or loss is recorded in operating income or expense. Note 6 “Property, Plant and Equipment, Net” contains additional information on the Company’s PP&E.
Business Combinations – The Company records its business combinations under the acquisition method of accounting. Under the acquisition method of accounting, the Company allocates the purchase price of each acquisition to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values at the date of acquisition. The fair value of identifiable intangible assets is based upon detailed valuations that use various assumptions made by management. Any excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired is allocated to goodwill. All direct acquisition-related costs are expensed as incurred.
In circumstances where an acquisition involves a contingent consideration arrangement, the Company recognizes a liability equal to the fair value of the contingent payments it expects to make as of the acquisition date. The Company re-measures this liability each reporting period and records changes in the fair value through Other Operating Expenses, Net. Increases or decreases in the fair value of the contingent consideration liability can result from changes in discount periods and rates, as well as changes in the timing, amount of, or the likelihood of achieving the applicable contingent consideration.
Amortizing Intangible Assets – Amortizing intangible assets consists primarily of purchased technology and patents, and customer lists. The Company amortizes its definite-lived intangible assets over their estimated useful lives utilizing an accelerated or straight-line method of amortization, which approximates the projected cash flows used to fair value those intangible assets at the time of acquisition. When the straight-line method of amortization is utilized, the estimated useful life of the intangible asset is shortened to assure that recognition of amortization expense corresponds with the expected cash flows. The amortization period for the Company’s amortizing intangible assets are as follows: purchased technology and patents 5-15 years; customer lists 7-20 years and other intangible assets 1-10 years. Refer to Note 7 “Intangible Assets” for additional information on the Company’s amortizing intangible assets.
Impairment of Long-Lived Assets – The Company assesses the impairment of definite-lived long-lived assets or asset groups when events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that are considered in deciding when to perform an impairment review include: a significant decrease in the market price of the asset or asset group; a significant change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition; a significant change in legal factors or in the business climate that could affect the value of a long-lived asset or asset group, including an action or assessment by a regulator; an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction; a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group; or a current expectation that, more likely than not, a long-lived asset or asset group will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The term more likely than not refers to a level of likelihood that is more than 50 percent.
Potential recoverability is measured by comparing the carrying amount of the asset or asset group to its related total future undiscounted cash flows. If the carrying value is not recoverable, the asset or asset group is considered to be impaired. Impairment is measured by comparing the asset or asset group’s carrying amount to its fair value. When it is determined that useful lives of assets are shorter than originally estimated, and no impairment is present, the rate of depreciation is accelerated in order to fully depreciate the assets over their new shorter useful lives.
Goodwill and other indefinite lived intangible assets recorded are not amortized but are periodically tested for impairment. The Company assesses goodwill for impairment on the last day of each fiscal year, or more frequently if certain events occur as described above. Goodwill is evaluated for impairment through the comparison of the fair value of the reporting units to their carrying values. When evaluating goodwill for impairment, the Company may first perform an assessment of qualitative factors to determine if the fair value of the reporting unit is more-likely-than-not greater than its carrying amount. This qualitative assessment is referred to as a “step zero approach. If, based on the review of the qualitative factors, the Company determines it is more-likely-than-not that the fair value of the reporting unit is greater than its carrying value, the required two-step impairment test can be bypassed. If the Company does not perform a step zero assessment or if the fair value of the reporting unit is more-likely-than-not less than its carrying value, the Company must perform a two-step impairment test, and calculate the estimated fair value of the reporting unit. If, based upon the two-step impairment test, it is determined that the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of the goodwill within the reporting unit is less than its carrying value. Under the two-step approach, fair values for reporting units are determined based on discounted cash flows and market multiples.
The Company completed its annual goodwill impairment assessment for 2015 by performing a step zero qualitative analysis. As part of this analysis, the Company evaluated factors including, but not limited to, macro-economic conditions, market and industry conditions, cost factors, competitive environment, share price fluctuations, results of the last impairment test, and the operational stability and the overall financial performance of the reporting units. After completing the analysis, the Company determined that it was more likely than not that its reporting units fair values are greater than the reporting units carrying values and the two-step impairment test is not necessary.
Other indefinite lived intangible assets are assessed for impairment on the last day of each fiscal year, or more frequently if certain events occur as described above, by comparing the fair value of the intangible asset to its carrying value. The fair value is determined by using the income approach. Note 7 “Intangible Assets” contains additional information on the Company’s long-lived intangible assets.
Debt Issuance Costs and Discounts – In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” This ASU requires that debt issuance costs be presented as a direct reduction to the carrying amount of the related debt in the balance sheet rather than as a deferred charge, consistent with the presentation of discounts on debt. ASU 2015-15, “Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements,” was issued in August 2015 to clarify that the U.S. Securities and Exchange Commission (“SEC”) staff would not object to an entity deferring and presenting debt issuance costs related to a line-of-credit arrangement as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement.
As permitted, during the fourth quarter of 2015, the Company elected to early adopt these ASUs and has elected to retrospectively apply this guidance. As a result, the Company has classified $35.9 million and $0.9 million as of January 1, 2016 and January 2, 2015, respectively, of deferred debt issuance costs associated with its term-debt from Other Assets to Long-Term Debt in the Consolidated Balance Sheets. Deferred debt issuance costs associated with the Company’s revolving credit facility of $4.8 million and $2.2 million as of January 1, 2016 and January 2, 2015, respectively, are classified within Other Assets.
Debt issuance costs incurred in connection with the Company’s issuance of its revolving credit facility are amortized to Interest Expense on a straight-line basis over the contractual term of the credit facility. Unamortized debt issuance costs and unamortized debt discounts related to the Company’s term-debt are recorded as a reduction of the carrying value of the related debt. These debt issuance costs and discounts are amortized to Interest Expense using the effective interest method over the period from the date of issuance to the put option date (if applicable) or the maturity date, whichever is earlier. The amortization of debt issuance costs and discounts are included in Debt Related Amortization Included in Interest Expense in the Consolidated Statements of Cash Flows. Note 9 “Debt” contains additional information on the Company’s debt issuance costs and discounts. 
Other Long-Term Assets – Other long-term assets also include investments in equity securities of entities that are not publicly traded and which do not have readily determinable fair values. The Company accounts for investments in these entities under the cost or equity method depending on the type of ownership interest, as well as the Company’s ability to exercise influence over these entities. Equity method investments are initially recorded at cost, and are subsequently adjusted to reflect the Company’s share of earnings or losses of the investee. Cost method investments are recorded at historical cost. Each reporting period, management evaluates these cost and equity method investments to determine if there are any events or circumstances that are likely to have a significant effect on the fair value of the investment. Examples of such impairment indicators include, but are not limited to: a recent sale or offering of similar shares of the investment at a price below the Company’s cost basis; a significant deterioration in earnings performance; a significant change in the regulatory, economic or technological environment of the investee; or a significant doubt about an investee’s ability to continue as a going concern. If an impairment indicator is identified, management will estimate the fair value of the investment and compare it to its carrying value. The estimation of fair value considers all available financial information related to the investee, including, but not limited to, valuations based on recent third-party equity investments in the investee. If the fair value of the investment is less than its carrying value, the investment is impaired and a determination as to whether the impairment is other-than-temporary is made. Impairment is deemed to be other-than-temporary unless the Company has the ability and intent to hold the investment for a period sufficient for a market recovery up to the carrying value of the investment. Further, evidence must indicate that the carrying value of the investment is recoverable within a reasonable period. For other-than-temporary impairments, an impairment loss is recognized equal to the difference between the investment’s carrying value and its fair value. The Company has determined that these investments are not considered variable interest entities. The Company’s exposure related to these entities is limited to its recorded investment. These investments are in start-up research and development companies whose fair value is highly subjective in nature and subject to future fluctuations, which could be significant.
Income Taxes – The consolidated financial statements of the Company have been prepared using the asset and liability approach in accounting for income taxes, which requires the recognition of deferred income taxes for the expected future tax consequences of net operating losses, credits, and temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided on deferred tax assets if it is determined, within each taxing jurisdiction, that it is more likely than not that the asset will not be realized.
The Company accounts for uncertain tax positions using a more likely than not recognition threshold. The evaluation of uncertain tax positions is based on factors including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. These tax positions are evaluated on a quarterly basis. The Company recognizes interest expense related to uncertain tax positions as Provision for Income Taxes. Penalties, if incurred, are recognized as a component of Selling, General and Administrative Expenses (“SG&A”).
The Company and its subsidiaries file a consolidated U.S. federal income tax return. State tax returns are filed on a combined or separate basis depending on the applicable laws in the jurisdictions where the tax returns are filed. The Company also files foreign tax returns on a separate company basis in the countries in which it operates.
In November 2015, the FASB issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes.” This ASU requires entities that present a classified balance sheet to classify all deferred income taxes as noncurrent assets or noncurrent liabilities. Previous accounting principles required an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified balance sheet. As permitted, during the fourth quarter of 2015, the Company elected to early adopt this ASU and has elected to prospectively apply its guidance. As a result, all deferred tax assets or liabilities shown in the Consolidated Balance Sheet as of January 1, 2016, are classified as noncurrent. Prior periods were not retrospectively adjusted for the adoption of this ASU. See Note 14 “Income Taxes” for additional information.
Convertible Subordinated Notes (“CSN”) – For convertible debt instruments that may be settled in cash upon conversion, the Company accounts for the liability and equity components of those instruments in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. 
Upon issuance, the Company determined the carrying amount of the liability component of CSN by measuring the fair value of a similar liability that does not have the associated conversion option. The carrying amount of the conversion option was then determined by deducting the fair value of the liability component from the initial proceeds received from the issuance of CSN. The carrying amount of the conversion option was recorded in Additional Paid-In Capital with an offset to Long-Term Debt and was amortized using the effective interest method over the period from the date of issuance to the maturity date. The amortization of discount related to the Company’s convertible debt instruments is included in Debt Related Amortization Included in Interest Expense in the Consolidated Statements of Cash Flows. See Note 9 “Debt” for additional information.
Derivative Financial Instruments – The Company recognizes all derivative financial instruments in its consolidated financial statements at fair value. Changes in the fair value of derivative instruments are recorded in earnings unless hedge accounting criteria are met. The Company designated its interest rate swaps (See Note 9 “Debt”) and foreign currency contracts (See Note 15 “Commitments and Contingencies”) entered into as cash flow hedges. The effective portion of the changes in fair value of these cash flow hedges is recorded each period, net of tax, in Accumulated Other Comprehensive Income until the related hedged transaction occurs. Any ineffective portion of the changes in fair value of these cash flow hedges is recorded in earnings. In the event the hedged cash flow for forecasted transactions does not occur, or it becomes probable that they will not occur, the Company reclassifies the amount of any gain or loss on the related cash flow hedge to income (expense) at that time. Cash flows related to these derivative financial instruments are included in cash flows from operating activities. The cash flows from the termination of interest rate swap agreements are reported as operating activities in the consolidated statements of cash flows.
Revenue Recognition – The Company recognizes revenue when it is realized or realizable and earned. This occurs when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable (including any price concessions under long-term agreements), the buyer is obligated to pay us (i.e., not contingent on a future event), the risk of loss is transferred, there is no obligation of future performance, collectability is reasonably assured and the amount of future returns can reasonably be estimated. With regards to the Company’s customers (including distributors), those criteria are met when title passes, generally at the point of shipment. Currently, the revenue recognition policy is the same for Greatbatch Medical, Lake Region Medical and QiG. In general, for customers with long-term contracts, we have negotiated fixed pricing arrangements. During new contract negotiations, price level decreases (concessions) for future sales may be offered to customers in exchange for volume and/or long-term commitments. Once the new contracts are signed, these prices are fixed and determinable for all future sales. The Company includes shipping and handling fees billed to customers in Sales. Shipping and handling costs associated with inbound and outbound freight are recorded in Cost of Sales. Taxes collected from customers relating to product sales and remitted to governmental authorities are accounted for on a net basis. Accordingly, such taxes are excluded from Sales and Cost of Sales. In certain instances the Company obtains component parts from its customers that are included in the final product sold back to the same customer. These amounts are excluded from Sales and Cost of Sales recognized by the Company. The cost of these customer supplied component parts amounted to $44.3 million, $48.1 million and $45.3 million in fiscal years 2015, 2014 and 2013, respectively.
Environmental Costs – Environmental expenditures that relate to an existing condition caused by past operations and that do not provide future benefits are expensed as incurred. Liabilities are recorded when environmental assessments are made, the requirement for remedial efforts is probable and the amount of the liability can be reasonably estimated. Liabilities are recorded generally no later than the completion of feasibility studies. The Company has an ongoing monitoring and identification process to assess how the activities, with respect to known exposures, are progressing against the recorded liabilities, as well as to identify other potential remediation sites that are presently unknown.
Restructuring The Company continually evaluates alternatives to align the business with the changing needs of its customers and to lower operating costs. This includes the realignment of its existing manufacturing capacity, facility closures, or similar actions, either in the normal course of business or pursuant to significant restructuring programs. These actions may result in employees receiving voluntary or involuntary employee termination benefits, which may be pursuant to contractual agreements. Voluntary termination benefits are accrued when an employee accepts the related offer. Involuntary termination benefits are accrued upon the commitment to a termination plan and the benefit arrangement is communicated to affected employees, or when liabilities are determined to be probable and estimable, depending on the existence of a substantive plan for severance or termination. All other exit costs are expensed as incurred. Refer to Note 13 “Other Operating Expenses, Net” for additional information.
Product Warranties – The Company allows customers to return defective or damaged products for credit, replacement, or exchange. The Company warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. The Company accrues its estimated exposure to warranty claims, through Cost of Sales, based upon recent historical experience and other specific information as it becomes available. Note 15 “Commitments and Contingencies” contains additional information on the Company’s product warranties.
Research, Development and Engineering Costs, Net (“RD&E”) – RD&E costs are expensed as incurred. The primary costs are salary and benefits for personnel, material costs used in development projects and subcontracting costs. Cost reimbursements for certain engineering services from customers for whom the Company designs products are recorded as an offset to engineering costs upon achieving development milestones specified in the contracts. These reimbursements do not cover the complete cost of the development projects. Additionally, the technology developed under these cost reimbursement projects is owned by the Company and is utilized for future products developed for other customers.
In-process research and development (“IPR&D”) represents research projects acquired in a business combination which are expected to generate cash flows but have not yet reached technological feasibility. The primary basis for determining the technological feasibility of these projects is whether or not regulatory approval has been obtained. The Company classifies IPR&D acquired in a business combination as an indefinite-lived intangible asset until the completion or abandonment of the associated projects. Upon completion, the Company determines the useful life of the IPR&D and begins amortizing the assets to reflect their use over their remaining lives. Upon permanent abandonment, the remaining carrying amount of the associated IPR&D is written-off. The Company tests the IPR&D acquired for impairment at least annually, and more frequently if events or changes in circumstances indicate that the assets may be impaired. The impairment test consists of a comparison of the fair value of the intangible assets with their carrying amount. If the carrying amount exceeds its fair value, the Company would record an impairment loss in an amount equal to the excess.
Note 12 “Research, Development and Engineering Costs, Net” contains additional information on the Company’s RD&E activities.
Stock-Based Compensation The Company records compensation costs related to stock-based awards granted to employees based upon their estimated fair value on the grant date. Compensation cost for service-based awards is recognized ratably over the applicable vesting period. Compensation cost for nonmarket-based performance awards is reassessed each period and recognized based upon the probability that the performance targets will be achieved. Compensation cost for market-based performance awards is expensed ratably over the applicable vesting period and is recognized each period whether the performance metrics are achieved or not.
The Company utilizes the Black-Scholes option pricing model to estimate the fair value of stock options granted. For service-based and nonmarket-based performance restricted stock and restricted stock unit awards, the fair market value of the award is determined based upon the closing value of the Company’s stock price on the grant date. For market-based performance restricted stock unit awards, the fair market value of the award is determined utilizing a Monte Carlo simulation model, which projects the value of the Company’s stock under numerous scenarios and determines the value of the award based upon the present value of those projected outcomes. 
The amount of stock-based compensation expense recognized is based on the portion of the awards that are ultimately expected to vest. The Company estimates pre-vesting forfeitures at the time of grant by analyzing historical data and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The total expense recognized over the vesting period will only be for those awards that ultimately vest, excluding market and nonmarket performance award considerations. Note 11 “Stock-Based Compensation” contains additional information on the Company’s stock-based compensation.
Foreign Currency Translation – The Company translates all assets and liabilities of its foreign subsidiaries, where the U.S. dollar is not the functional currency, at the period-end exchange rate and translates income and expenses at the average exchange rates in effect during the period. The net effect of this translation is recorded in the consolidated financial statements as Accumulated Other Comprehensive Income. Translation adjustments are not adjusted for income taxes as they relate to permanent investments in the Company’s foreign subsidiaries.
Net foreign currency transaction gains and losses are included in Other (Income) Expense, Net and amounted to a gain of $1.3 million for 2015, a gain of $1.3 million for 2014 and a loss of $0.1 million for 2013.
Defined Benefit Plans – The Company recognizes in its balance sheet as an asset or liability the overfunded or underfunded status of its defined benefit plans provided to its employees located in Mexico, Switzerland, France and Germany. This asset or liability is measured as the difference between the fair value of plan assets, if any, and the benefit obligation of those plans. For these plans, the benefit obligation is the projected benefit obligation, which is calculated based on actuarial computations of current and future benefits for employees. Actuarial gains or losses and prior service costs or credits that arise during the period, but are not included as components of net periodic benefit expense, are recognized as a component of Accumulated Other Comprehensive Income. Defined benefit expenses are charged to Cost of Sales, SG&A and RD&E expenses as applicable. Note 10 “Benefit Plans” contains additional information on these costs.
Earnings (Loss) Per Share (“EPS”) – Basic EPS is calculated by dividing Net Income (Loss) by the weighted average number of shares outstanding during the period. Diluted EPS is calculated by adjusting the weighted average number of shares outstanding for potential common shares if dilutive to the EPS calculation and consist of stock options, unvested restricted stock and restricted stock units and, if applicable, contingently convertible instruments such as convertible debt. Note 16 “Earnings (Loss) Per Share” contains additional information on the computation of the Company’s EPS. 
Comprehensive Income (Loss) – The Company’s comprehensive income (loss) as reported in the Consolidated Statements of Operations and Comprehensive Income (Loss) includes net income (loss), foreign currency translation adjustments, the net change in cash flow hedges, and defined benefit plan liability adjustments. The Consolidated Statements of Operations and Comprehensive Income (Loss) and Note 17 “Accumulated Other Comprehensive Income” contains additional information on the computation of the Company’s comprehensive income (loss).
Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of sales and expenses during the reporting periods. Actual results could differ materially from those estimates.
Reclassifications Certain prior period amounts have been reclassified to conform to current year presentation. Refer to Note 19, “Business Segment, Geographic and Concentration Risk Information,” for a description of the changes made to the Company’s prior period product line sales classification to reflect the current year presentation. Additionally, during the current year the Company disclosed the Proceeds from Sale of Property, Plant and Equipment and Inventory Step-up amortization separately in the Consolidated Statements of Cash Flows as these amounts were more material for disclosure in the current year.
Recently Issued Accounting Pronouncements Not Yet Adopted – In the normal course of business, management evaluates all new accounting pronouncements issued by the FASB, SEC, Emerging Issues Task Force (“EITF”), or other authoritative accounting bodies to determine the potential impact they may have on the Company’s Consolidated Financial Statements. Based upon this review, except as noted below, management does not expect any of the recently issued accounting pronouncements, which have not already been adopted, to have a material impact on the Company’s Consolidated Financial Statements.
In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which requires companies to recognize all leases as assets and liabilities on the consolidated balance sheet. This ASU retains a distinction between finance leases and operating leases, and the classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the current accounting literature. The result of retaining a distinction between finance leases and operating leases is that under the lessee accounting model in Topic 842, the effect of leases in a consolidated statement of comprehensive income and a consolidated statement of cash flows is largely unchanged from previous GAAP.  The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted. The Company is currently evaluating the impact that the adoption of this ASU will have on its Consolidated Financial Statements.
In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This ASU requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; requires entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset and requires entities to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option. The new ASU is effective for public companies for fiscal years beginning after December 15, 2017. Early adoption of the own credit provision is permitted. The Company is currently evaluating the impact that the adoption of this ASU will have on its Consolidated Financial Statements.
In September 2015, the FASB issued ASU No. 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments,” which amends the guidance for measurement-period adjustments related to business combinations. The amended ASU requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustments are determined. The acquirer will be required to record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date and disclose what the amounts in the previous periods would have been if those changes were made as of the acquisition date. This ASU is effective for adjustments to provisional amounts that occur in annual periods and interim periods within those annual periods beginning after December 15, 2015. The Company is currently assessing the impact of adopting this ASU on its Consolidated Financial Statements.
In July 2015, the FASB issued ASU No. 2015-11, “Simplifying the Measurement of Inventory,” which simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU is effective for public business entities for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company is currently assessing the impact of adopting this ASU on its Consolidated Financial Statements.
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” The core principle behind ASU No. 2014-09 is that an entity should recognize revenue in an amount that reflects the consideration to which the entity expects to be entitled in exchange for delivering goods and services. This model involves a five-step process that includes identifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract and recognizing revenue when the entity satisfies the performance obligations. This ASU allows two methods of adoption; a full retrospective approach where historical financial information is presented in accordance with the new standard, and a modified retrospective approach where this ASU is applied to the most current period presented in the financial statements. In August 2015, the FASB issued ASU No 2015-14 “Revenue from Contracts with Customers: Deferral of the Effective Date,” which deferred the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, with earlier application permitted as of annual reporting periods beginning after December 15, 2016. The Company is currently assessing the financial impact of adopting ASU 2014-09 and the methods of adoption; however, given the scope of the new standard, the Company is currently unable to provide a reasonable estimate regarding the financial impact or which method of adoption will be elected.
In April 2014, the FASB issued ASU No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which amends the definition of a discontinued operation and requires entities to provide additional disclosures about disposal transactions that do not meet the discontinued operations criteria. The revised ASU changes how entities identify and disclose information about disposal transactions under U.S. GAAP. This ASU is effective prospectively for all disposals (except disposals classified as held for sale before the adoption date) or components initially classified as held for sale in periods beginning on or after December 15, 2014. This ASU is applicable for disposal transactions, if any, that the Company enters into after January 2, 2015. This ASU did not materially impact the Company’s Consolidated Financial Statements.
Acquisitions
ACQUISITIONS
2.
 
ACQUISITIONS
Lake Region Medical Holdings, Inc.
On October 27, 2015, the Company acquired all of the outstanding common stock of Lake Region Medical Holdings, Inc. for a total purchase price including debt assumed of approximately $1.77 billion. Lake Region Medical specializes in the design, development, and manufacturing of products across the medical component and device spectrum primarily serving the cardio, vascular and advanced surgical markets.
The aggregate consideration paid by the Company to the stockholders of Lake Region Medical consisted of the following (in thousands):
Cash consideration paid to Lake Region Medical stockholders and equity award holders
 
$
478,490

Fair value of shares of Greatbatch common stock issued to Lake Region Medical stockholders
 
245,368

Fair value of replacement stock options attributable to pre-acquisition service
 
4,508

Total purchase consideration
 
$
728,366


The fair value of the Greatbatch common stock issued as part of the consideration was determined based upon the closing stock price of Greatbatch’s shares as of the acquisition date. The fair value of the Greatbatch stock options issued as part of the consideration was determined utilizing a Black-Scholes option pricing model as of the acquisition date. Concurrently with the closing of the acquisition, the Company repaid all of the outstanding debt of Lake Region Medical of approximately $1.0 billion. The cash portion of the purchase price and the repayment of Lake Region Medical’s debt was primarily funded through a new senior secured credit facility and the issuance of senior notes. See Note 9 “Debt” for additional information regarding the Company’s debt. The Company believes that the combination of Greatbatch and Lake Region Medical brings together two highly complementary organizations that can provide a new level of industry leading capabilities and services to original equipment manufacturer customers while building value for shareholders. Through this acquisition, the Company believes that it will be at the forefront of innovating technologies and products that help change the face of healthcare, providing its customers with a distinct advantage as they bring complete systems and solutions to market. In turn, Greatbatch’s customers will be able to accelerate patient access to life enhancing therapies. The transaction is consistent with Greatbatch's strategy of achieving profitable growth and continuous improvement to drive margin expansion.
The operating results of Lake Region Medical have been included in the Company’s Lake Region Medical segment from the date of acquisition. For 2015, Lake Region Medical added $138.6 million to the Company’s revenue and increased the Company’s net loss by approximately $17.4 million.
This transaction was accounted for under the acquisition method of accounting. Accordingly, the cost of the acquisition was allocated to the Lake Region Medical assets acquired and liabilities assumed based on their fair values as of the closing date of the acquisition, with the amount exceeding the fair value of the net assets acquired recorded as goodwill. The value assigned to certain assets and liabilities are preliminary and are subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed become available. The final allocation may include changes to the acquisition date fair value of intangible assets, goodwill, deferred taxes, as well as operating assets and liabilities, some of which may result in material adjustments.
The following table summarizes the preliminary allocation of Lake Region Medical purchase price to the assets acquired and liabilities assumed (in thousands):
Assets acquired
 
Current assets
$
269,815

Property, plant and equipment
216,473

Amortizing intangible assets
849,000

Indefinite-lived intangible assets
70,000

Goodwill
661,788

Other non-current assets
1,629

Total assets acquired
2,068,705

Liabilities assumed
 
Current liabilities
102,485

Debt assumed
1,044,675

Other long-term liabilities
193,179

Total liabilities assumed
1,340,339

Net assets acquired
$
728,366


The preliminary fair values of the assets acquired were determined using one of three valuation approaches: market, income or cost. The selection of a particular method for a given asset depended on the reliability of available data and the nature of the asset, among other considerations.
The market approach estimates the value for a subject asset based on available market pricing for comparable assets. The income approach estimates the value for a subject asset based on the present value of cash flows projected to be generated by the asset. The projected cash flows were discounted at a required rate of return that reflects the relative risk of the asset and the time value of money. The projected cash flows for each asset considered multiple factors from the perspective of a marketplace participant including revenue projections from existing customers, attrition trends, technology life-cycle assumptions, marginal tax rates and expected profit margins giving consideration to historical and expected margins. The cost approach estimates the value for a subject asset based on the cost to replace the asset and reflects the estimated reproduction or replacement cost for the asset, less an allowance for loss in value due to depreciation or obsolescence, with specific consideration given to economic obsolescence if indicated. These fair value measurement approaches are based on significant unobservable inputs, including management estimates and assumptions.
Current Assets and Liabilities – The fair value of current assets and liabilities, excluding inventory, was assumed to approximate their carrying value as of the acquisition date due to the short-term nature of these assets and liabilities.
The fair value of in-process and finished goods inventory acquired was estimated by applying a version of the market approach called the comparable sales method. This approach estimates the fair value of the assets by calculating the potential revenue generated from selling the inventory and subtracting from it the costs related to the completion and sale of that inventory and a reasonable profit allowance. Based upon this methodology, the Company recorded the inventory acquired at fair value resulting in an increase in inventory of $23.0 million.
Property, Plant and Equipment – The fair value of PP&E acquired was estimated by applying the cost approach for personal property, buildings and building improvements and the market approach for land. The cost approach was applied by developing a replacement cost and adjusting for depreciation and obsolescence. The value of the land acquired was derived from market prices for comparable properties.
Intangible Assets – The purchase price was allocated to intangible assets as follows (dollars in thousands):
Amortizing Intangible Assets
 
Fair Value Assigned
 
Weighted Average Amortization Period (Years)
 
Estimated Useful Life (Years)
 
Weighted Average Discount Rate
Technology
 
$
160,000

 
7
 
19
 
11.5%
Customer lists
 
689,000

 
14
 
29
 
11.5%
 
 
$
849,000

 
13
 
27
 
11.5%
Indefinite-lived Intangible Assets
 
 
 
 
 
 
 
 
Trademarks and tradenames
 
$
70,000

 
N/A
 
N/A
 
11.5%

The weighted average amortization period is less than the estimated useful life, as the Company is using an accelerated amortization method, which approximates the distribution of cash flows used to fair value those intangible assets.
Technology – Technology consists of technical processes, patented and unpatented technology, manufacturing know-how, trade secrets and the understanding with respect to products or processes that have been developed by Lake Region Medical and that will be leveraged in current and future products. The fair value of technology acquired was determined utilizing the relief from royalty method, a form of the income approach, with a royalty rate that ranged from 0.5% to 7%. The estimated useful life of the technology is based upon management’s estimate of the product life cycle associated with the technology before they will be replaced by new technologies.
Customer Lists – Customer lists represent the estimated fair value of non-contractual customer relationships Lake Region Medical has as of the acquisition date. The primary customers of Lake Region Medical include large original equipment manufacturers in various geographic locations around the world. These relationships were valued separately from goodwill at the amount that an independent third party would be willing to pay for these relationships. The fair value of customer lists was determined using the multi-period excess-earnings method, a form of the income approach. The estimated useful life of the existing customer base was based upon the historical customer annual attrition rate of 5%, as well as management’s understanding of the industry and product life cycles.
Trademarks and Tradenames – Trademarks and tradenames represent the estimated fair value of Lake Region Medical’s corporate and product names. These tradenames were valued separately from goodwill at the amount that an independent third party would be willing to pay for use of these names. The fair value of the trademarks and tradenames was determined by utilizing the relief from royalty method, a form of the income approach, with a royalty rate that ranged from 0.25% to 1%. Trademarks and tradenames were assumed to have an indefinite useful life based upon the significant value the Lake Region Medical name has with OEMs in the medical component and device industries, their long history of being an industry leader and producing quality and innovative components, and given managements current intention of using this tradename indefinitely, which was assumed to be consistent with what a reasonable market participant would also assume.
Goodwill – The excess of the purchase price over the fair value of net tangible and intangible assets acquired and liabilities assumed was allocated to goodwill. Various factors contributed to the establishment of goodwill, including the value of Lake Region Medical’s highly trained assembled work force and management team, the incremental value resulting from Lake Region Medical’s industry leading capabilities and services to OEMs, enhanced synergies, and the expected revenue growth over time that is attributable to increased market penetration from future products and customers. The goodwill acquired in connection with the acquisition was allocated to the Lake Region Medical segment and is not deductible for tax purposes.
Long-term Debt – The fair value of long-term debt was assumed to be equal to what was paid by Greatbatch at the time of closing in order to retire the debt, including prepayment penalties and fees.
Centro de Construcción de Cardioestimuladores del Uruguay
On August 12, 2014, the Company purchased all of the outstanding common stock of Centro de Construcción de Cardioestimuladores del Uruguay, headquartered in Montevideo, Uruguay. CCC is an active implantable neuromodulation medical device systems developer and manufacturer that produces a range of medical devices including implantable pulse generators, programmer systems, battery chargers, patient wands and leads. This acquisition allows the Company to more broadly partner with medical device companies, complements the Company’s core discrete technology offerings and enhances the Company’s medical device innovation efforts.
This transaction was accounted for under the acquisition method of accounting. Accordingly, the operating results of CCC have been included in the Company’s QiG segment from the date of acquisition. For 2014, CCC added approximately $5.8 million to the Company’s revenue and increased the Company’s net income by $1.2 million. The aggregate purchase price of $19.8 million was funded with cash on hand.
The cost of the acquisition was allocated to the assets acquired and liabilities assumed from CCC based on their fair values as of the closing date of the acquisition, with the amount exceeding the fair value of the net assets acquired recorded as goodwill. The valuation of the assets acquired and liabilities assumed from CCC was finalized during 2015 and did not result in a material adjustment to the original valuation of net assets acquired, including goodwill and therefore was not reflected as a retrospective adjustment to the historical financial statements.
The following table summarizes the allocation of the CCC purchase price to the assets acquired and liabilities assumed as of the acquisition date (in thousands):
Assets acquired
 
Current assets
$
10,670

Property, plant and equipment
1,131

Amortizing intangible assets
6,100

Goodwill
8,296

Total assets acquired
26,197

Liabilities assumed
 
Current liabilities
4,842

Deferred income taxes
1,590

Total liabilities assumed
6,432

Net assets acquired
$
19,765


The fair values of the assets acquired were determined using one of three valuation approaches: market, income or cost. The selection of a particular method for a given asset depended on the reliability of available data and the nature of the asset, among other considerations.
Current Assets and Liabilities – The fair value of current assets and liabilities, excluding inventory, was assumed to approximate their carrying value as of the acquisition date due to the short-term nature of these assets and liabilities.
The fair value of in-process and finished goods inventory acquired was estimated by applying a version of the market approach called the comparable sales method. This approach estimates the fair value of the assets by calculating the potential revenue generated from selling the inventory and subtracting from it the costs related to the completion and sale of that inventory and a reasonable profit allowance. Based upon this methodology, the Company recorded the inventory acquired at fair value resulting in an increase in inventory of $0.3 million.
Intangible Assets – The purchase price was allocated to intangible assets as follows (dollars in thousands):
Amortizing Intangible Assets
 
Fair
Value
Assigned
 
Weighted
Average
Amortization
Period (Years)
 
Weighted
Average
Discount
Rate
 
 
 
 
 
 
 
Technology
 
$
1,400

 
10
 
18%
Customer lists
 
4,600

 
10
 
18%
Trademarks and tradenames
 
100

 
2
 
18%
 
 
$
6,100

 
10
 
18%

Technology – Technology consists of technical processes, unpatented technology, manufacturing know-how, trade secrets and the understanding with respect to products or processes that have been developed by CCC and that will be leveraged in current and future products. The fair value of technology acquired was determined utilizing the relief from royalty method, a form of the income approach, with a royalty rate of 3%. The weighted average amortization period of the technology is based upon management’s estimate of the product life cycle associated with technology before they will be replaced by new technologies.
Customer Lists – Customer lists represent the estimated fair value of non-contractual customer relationships CCC has as of the acquisition date. The primary customers of CCC include medical device companies in various geographic locations around the world. These relationships were valued separately from goodwill at the amount that an independent third party would be willing to pay for these relationships. The fair value of customer lists was determined using the multi-period excess-earnings method, a form of the income approach. The weighted average amortization period of the existing customer base was based upon the historical customer annual attrition rate of 15%, as well as management’s understanding of the industry and product life cycles.
Trademarks and Tradenames – Trademarks and tradenames represent the estimated fair value of corporate and product names acquired from CCC. These tradenames were valued separately from goodwill at the amount that an independent third party would be willing to pay for use of these names. The fair value of the trademarks and tradenames was determined by utilizing the relief from royalty method, a form of the income approach, with a 0.5% royalty rate.
Goodwill – The excess of the purchase price over the fair value of net tangible and intangible assets acquired and liabilities assumed was allocated to goodwill. Various factors contributed to the establishment of goodwill, including: the value of CCC’s highly trained assembled work force and management team; the incremental value that CCC’s technology will bring to QiG’s medical devices; and the expected revenue growth over time that is attributable to increased market penetration from future products and customers. The goodwill acquired in connection with the CCC acquisition was allocated to the QiG business segment and is not deductible for tax purposes.
Pro Forma Results (Unaudited) – The following unaudited pro forma information presents the consolidated results of operations of the Company, Lake Region Medical, and CCC as if those acquisitions occurred as of the beginning of fiscal years 2014 (Lake Region Medical) and 2013 (CCC) (in thousands, except per share amounts): 
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Sales
$
1,445,689

 
$
1,441,782

 
$
677,657

Net income (loss)
2,405

 
(25,865
)
 
37,612

Earnings (loss) per share:
 
 
 
 
 
Basic
$
0.08

 
$
(0.87
)
 
$
1.57

Diluted
$
0.08

 
$
(0.87
)
 
$
1.49


The unaudited pro forma information presents the combined operating results of Greatbatch, Lake Region Medical, and CCC, with the results prior to the acquisition date adjusted to include the pro forma impact of the amortization of acquired intangible assets, the adjustment to interest expense reflecting the amount borrowed in connection with the acquisitions at Greatbatch’s interest rate, and the impact of income taxes on the pro forma adjustments utilizing the applicable statutory tax rate. Fiscal year 2015 pro forma earnings were adjusted to exclude $32.3 million of acquisition-related costs (change-in-control payments, investment banking fees, professional fees), $9.5 million of debt related charges (commitment fees, swap termination fees, debt extinguishment fees) and $23.0 million of nonrecurring amortization expense related to the fair value step-up of inventory incurred in 2015 as a result of the acquisition of Lake Region Medical. Fiscal year 2014 supplemental pro forma earnings were adjusted to include these charges. The unaudited pro forma consolidated basic and diluted earnings (loss) per share calculations are based on the consolidated basic and diluted weighted average shares of Greatbatch. The unaudited pro forma results are presented for illustrative purposes only and do not reflect the realization of potential cost savings, and any related integration costs. Certain costs savings may result from the acquisition; however, there can be no assurance that these cost savings will be achieved. These pro forma results do not purport to be indicative of the results that would have been obtained, or to be a projection of results that may be obtained in the future.
Supplemental Cash Flow Information
SUPPLEMENTAL CASH FLOW INFORMATION
3.
 
SUPPLEMENTAL CASH FLOW INFORMATION

 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
(in thousands)
 
 
 
 
 
Noncash investing and financing activities:
 
 
 
 
 
Common stock contributed to 401(k) Plan
$
3,920

 
$
4,341

 
$
2,477

Property, plant and equipment purchases included in accounts payable
7,401

 
2,926

 
2,103

Common stock issued in connection with Lake Region Medical acquisition
245,368

 

 

Replacement stock options issued in connection with Lake Region Medical acquisition
4,508

 

 

Purchase of non-controlling interests in subsidiaries included in accrued expenses
6,818

 

 

Cash paid during the year for:
 
 
 
 
 
Interest
13,057

 
3,521

 
4,989

Income taxes
6,312

 
13,565

 
44,165

Acquisition of noncash assets
2,013,604

 
22,434

 

Liabilities assumed
1,340,339

 
6,432

 

Inventories
INVENTORIES
4.
 
INVENTORIES
Inventories are comprised of the following (in thousands):
 
At
 
January 1,
2016
 
January 2,
2015
Raw materials
$
107,296

 
$
73,354

Work-in-process
93,729

 
38,930

Finished goods
51,141

 
16,958

Total
$
252,166

 
$
129,242

Assets Held For Sale
ASSETS HELD FOR SALE
5.
 
ASSETS HELD FOR SALE
Assets held for sale included in Prepaid Expenses and Other Current Assets, is comprised of the following (in thousands):
 
 
 
 
At
Asset
 
Business
Segment
 
January 1,
2016
 
January 2,
2015
Building and building improvements
 
Greatbatch Medical
 
$
996

 
$
1,635


During 2014, the Company transferred $2.1 million of assets relating to the Company’s Orvin, Switzerland property to assets held for sale and recognized a $0.4 million impairment charge that was recorded in Other Operating Expenses, Net. During 2015, the Company sold $0.6 million of these assets held for sale with no additional gain or loss recognized. Refer to Note 13 “Other Operating Expenses, Net” for additional information regarding this transaction and Note 18 “Fair Value Measurements” for information regarding the fair value of the assets.
Property, Plant and Equipment, Net
PROPERTY, PLANT AND EQUIPMENT, NET
6.
 
PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment are comprised of the following (in thousands):
 
At
 
January 1,
2016
 
January 2,
2015
Manufacturing machinery and equipment
$
285,068

 
$
167,173

Buildings and building improvements
130,184

 
89,258

Information technology hardware and software
43,947

 
31,725

Leasehold improvements
36,745

 
31,170

Furniture and fixtures
16,243

 
14,045

Land and land improvements
21,774

 
10,816

Construction work in process
76,835

 
14,129

Other
852

 
629

 
611,648

 
358,945

Accumulated depreciation
(232,156
)
 
(214,020
)
Total
$
379,492

 
$
144,925


Depreciation expense for property, plant and equipment was as follows (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Depreciation expense
$
27,136

 
$
23,320

 
$
22,799


Construction work in process at January 1, 2016 and January 2, 2015 includes asset purchases related to the Company’s 2014 investment in capacity and capabilities initiatives. Additionally, construction work in process also relates to routine purchases of machinery, equipment, and information technology assets to support normal recurring operations. Refer to Note 13 “Other Operating Expenses, Net” for a description of the Company’s significant capital investment projects.
Intangible Assets
INTANGIBLE ASSETS
7.
 
INTANGIBLE ASSETS

Amortizing intangible assets, net are comprised of the following (in thousands):
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Foreign
Currency
Translation
 
Net
Carrying
Amount
At January 1, 2016
 
 
 
 
 
 
 
Purchased technology and patents
$
255,776

 
$
(83,708
)
 
1,444

 
$
173,512

Customer lists
761,857

 
(40,815
)
 
(986
)
 
720,056

Other
4,534

 
(4,946
)
 
821

 
409

Total amortizing intangible assets
$
1,022,167

 
$
(129,469
)
 
$
1,279

 
$
893,977

At January 2, 2015
 
 
 
 
 
 
 
Purchased technology and patents
$
95,776

 
$
(75,894
)
 
$
1,966

 
$
21,848

Customer lists
72,857

 
(31,460
)
 
1,374

 
42,771

Other
4,534

 
(4,619
)
 
803

 
718

Total amortizing intangible assets
$
173,167

 
$
(111,973
)
 
$
4,143

 
$
65,337


Aggregate intangible asset amortization expense is comprised of the following (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Cost of sales
$
7,403

 
$
6,201

 
$
6,822

SG&A
9,681

 
7,009

 
5,800

RD&E
412

 
667

 
545

Total intangible asset amortization expense
$
17,496

 
$
13,877

 
$
13,167


Estimated future intangible asset amortization expense based upon the current carrying value is as follows (in thousands):
 
Estimated
Amortization
Expense
2016
$
37,854

2017
43,991

2018
44,894

2019
44,960

2020
45,467

Thereafter
676,811

Total estimated amortization expense
$
893,977


The change in indefinite-lived intangible assets during 2015 is as follows (in thousands):
 
Trademarks
and
Tradenames
At January 2, 2015
$
20,288

Indefinite-lived intangible assets acquired
70,000

At January 1, 2016
$
90,288


The change in goodwill during 2015 is as follows (in thousands):
 
Greatbatch
Medical
 
QiG
 
Lake Region Medical
 
Total
At January 2, 2015
$
304,297

 
$
50,096

 
$

 
$
354,393

Goodwill acquired (Note 2)

 

 
661,788

 
661,788

Foreign currency translation
(368
)
 

 
(2,243
)
 
(2,611
)
At January 1, 2016
$
303,929

 
$
50,096

 
$
659,545

 
$
1,013,570


As of January 1, 2016, no accumulated impairment loss has been recognized for the goodwill allocated to the Company’s Greatbatch Medical, QiG or Lake Region Medical segments.
Accrued Expenses
ACCRUED EXPENSES
8.
 
ACCRUED EXPENSES

Accrued expenses are comprised of the following (in thousands):
 
At
 
January 1,
2016
 
January 2,
2015
Salaries and benefits
$
37,579

 
$
20,770

Profit sharing and bonuses
6,781

 
18,524

Accrued interest
9,378

 
195

Purchase of non-controlling interest in subsidiaries
6,818

 

Severance and change in control payments
11,969

 
1,878

Warranty and customer rebates
7,205

 
660

Other
17,527

 
6,357

Total
$
97,257

 
$
48,384

Debt
DEBT
9.
 
DEBT

Long-term debt is comprised of the following (in thousands):
 
At
 
January 1,
2016
 
January 2,
2015
Senior secured term loan A
$
375,000

 
$

Senior secured term loan B
1,025,000

 

9.125% senior notes, due 2023
360,000

 

Variable rate term loan

 
187,500

Revolving line of credit

 

Less unamortized discount on term loan B and debt issuance costs
(45,947
)
 
(887
)
Total debt
1,714,053

 
186,613

Less current portion of long-term debt
29,000

 
11,250

Total long-term debt
$
1,685,053

 
$
175,363


Senior Secured Credit Facilities – In connection with the Lake Region Medical acquisition, on October 27, 2015, the Company replaced its existing credit facility with new senior secured credit facilities (the “Senior Secured Credit Facilities”) consisting of (i) a $200 million revolving credit facility (the “Revolving Credit Facility”), (ii) a $375 million term loan A facility (the “TLA Facility”), and (iii) a $1,025 million term loan B facility (the “TLB Facility”). The TLA Facility and TLB Facility are collectively referred to as the “Term Loan Facilities.” The TLB facility was issued at a 1% discount.
Term Loan Facilities
The TLA Facility and TLB Facility mature on October 27, 2021 and October 27, 2022, respectively. Interest rates on the TLA Facility, as well as the Revolving Credit Facility, are at the Company’s option, either at: (i) the prime rate plus the applicable margin, which will range between 0.75% and 2.25%, based on the Company’s Total Net Leverage Ratio, as defined in the Senior Secured Credit Facilities agreement or (ii) the applicable LIBOR rate plus the applicable margin, which will range between 1.75% and 3.25%, based on the Company’s Total Net Leverage Ratio. Interest rates on the TLB Facility are, at the Company’s option, either at: (i) the prime rate plus 3.25% or (ii) the applicable LIBOR rate plus 4.25%, with LIBOR subject to a 1.00% floor.
Subject to certain conditions, one or more incremental term loan facilities may be added to the Term Loan Facilities so long as, on a pro forma basis, the Company’s first lien net leverage ratio does not exceed 4.25:1.00.

As of January 1, 2016, the estimated fair value of TLB is $1,013 million, based on quoted market prices for the debt, recent sales prices for the debt and consideration of comparable debt instruments with similar interest rates and trading frequency, among other factors, and is classified as Level 2 measurements within the fair value hierarchy. The par amount of TLA approximated its fair value as of January 1, 2016 based upon the debt being variable rate in nature.
Revolving Credit Facility
The Revolving Credit Facility matures on October 27, 2020. The Revolving Credit Facility also includes a $15 million sublimit for swingline loans and a $30 million sublimit for standby letters of credit (which will subsequently decrease to $25 million on April 27, 2016). The Company is required to pay a commitment fee on the unused portion of the Revolving Credit Facility, which will range between 0.175% and 0.25%, depending on the Company’s Total Net Leverage Ratio. As of January 1, 2016, there were no borrowings on the Revolving Credit Facility, but available borrowing capacity was $186.6 million after giving effect to $13.4 million of outstanding standby letters of credit.
Subject to certain conditions, commitments under the Revolving Credit Facility may be increased through an incremental revolving facility so long as, on a pro forma basis, the Company’s first lien net leverage ratio does not exceed 4.25:1.00.
Covenants
The Revolving Credit Facility and the TLA Facility contain covenants requiring (A) a maximum Total Net Leverage Ratio of 6.50:1.00, subject to step downs and (B) a minimum interest coverage ratio of adjusted EBITDA (as defined in the Senior Secured Credit Facilities) to interest expense of not less than 3.00:1.00. The TLB Facility does not contain any financial maintenance covenants.
The Senior Secured Credit Facilities also contain negative covenants that restrict the Company’s ability to (i) incur additional indebtedness; (ii) create certain liens; (iii) consolidate or merge; (iv) sell assets, including capital stock of the Company’s subsidiaries; (v) engage in transactions with the Company’s affiliates; (vi) create restrictions on the payment of dividends or other amounts to Greatbatch Ltd. from the Company’s restricted subsidiaries; (vii) pay dividends on capital stock or redeem, repurchase or retire capital stock; (viii) pay, prepay, repurchase or retire certain subordinated indebtedness; (ix) make investments, loans, advances and acquisitions; (x) make certain amendments or modifications to the organizational documents of the Company or its subsidiaries or the documentation governing other senior indebtedness of the Company; and (xi) change the Company’s type of business. These negative covenants are subject to a number of limitations and exceptions that are described in the Senior Secured Credit Facilities agreement. As of January 1, 2016, the Company was in compliance with all financial and negative covenants under the Senior Secured Credit Facilities.
The Senior Secured Credit Facilities provide for customary events of default. Upon the occurrence and during the continuance of an event of default, the outstanding advances and all other obligations under the Senior Secured Credit Facilities become immediately due and payable. The Senior Secured Credit Facilities are guaranteed by the Company, as a parent guarantor, and all of the Company’s present and future direct and indirect wholly-owned domestic subsidiaries (other than Greatbatch Ltd., non-wholly owned joint ventures and certain other excluded subsidiaries). The Senior Secured Credit Facilities are secured, subject to certain exceptions, by a first priority security interest in; 1) the present and future shares of capital stock of (or other ownership or profit interests in) Greatbatch Ltd. and each guarantor (except the Company); 2) sixty-six percent (66%) of all present and future shares of voting capital stock of each specified first-tier foreign subsidiary; 3) substantially all of the Company’s, Greatbatch Ltd.’s and each other guarantor’s other personal property; and 4) all proceeds and products of the property and assets of the Company, Greatbatch Ltd. and the other guarantors.
9.125% Senior Notes due 2023 – On October 27, 2015, the Company completed a private offering of $360 million aggregate principal amount of 9.125% senior notes due on November 1, 2023 (the “Senior Notes”). All the Senior Notes are outstanding as of January 1, 2016.
Interest on the Senior Notes is payable on May 1 and November 1 of each year, beginning on May 1, 2016. The Company may redeem the Senior Notes, in whole or in part, prior to November 1, 2018 at a price equal to 100% of the principal amount thereof plus a “make-whole” premium. Prior to November 1, 2018, the Company may redeem up to 40% of the aggregate principal amount of the Senior Notes using the proceeds from certain equity offerings at a redemption price equal to 109.125% of the aggregate principal amount of the Senior Notes. As of January 1, 2016, the estimated fair value of the Senior Notes are $354.6 million, based on quoted market prices of these notes, recent sales prices for the notes and consideration of comparable debt instruments with similar interest rates and trading frequency, among other factors, and is classified as Level 2 measurements within the fair value hierarchy.


The Senior Notes are senior unsecured obligations of the Company. The Senior Notes contain restrictive covenants that, among other things, limit the ability of the Company to: (i) incur or guarantee additional indebtedness or issue certain disqualified stock or preferred stock; (ii) create certain liens; (iii) pay dividends or make distributions in respect of capital stock; (iv) make certain other restricted payments; (v) enter into agreements that restrict certain dividends or other payments; (vi) enter into sale-leaseback agreements; (vii) engage in certain transactions with affiliates; and (viii) consolidate or merge with, or sell substantially all of their assets to, another person. These covenants are subject to a number of limitations and exceptions that are described in the indenture agreement of the Senior Notes. The Senior Notes provide for customary events of default, subject in certain cases to customary cure periods, in which the Senior Notes and any unpaid interest would become due and payable.
As of January 1, 2016, the weighted average interest rate on all outstanding borrowings is 5.69%.
Contractual maturities of the Company’s debt facilities for the next five years and thereafter, excluding any discounts or premiums, as of January 1, 2016 are as follows (in thousands):
2016
$
29,000

2017
31,344

2018
40,719

2019
47,750

2020
47,750

Thereafter
1,563,437

Total
$
1,760,000


Interest Rate Swaps – From time to time, the Company enters into interest rate swap agreements in order to hedge against potential changes in cash flows on its outstanding variable rate debt. During 2012, the Company entered into a three-year $150 million interest rate swap, which amortized $50 million per year. During 2014, the Company entered into an additional interest rate swap. The first $45 million of notional amount of the swap was effective February 20, 2015, and the second $45 million of notional amount was scheduled to be effective February 22, 2016. These swaps were accounted for as cash flow hedges. As a result of the Lake Region Medical acquisition, the forecasted cash flows that the Company’s interest rate swaps were hedging were no longer expected to occur. Accordingly, during 2015, the Company recognized an additional $2.8 million charge in Interest Expense relating to the termination of the interest rate swap contracts. On October 27, 2015, the Company terminated its outstanding interest rate swap agreements resulting in a $2.8 million payment to the interest rate swap counterparty. As of January 1, 2016, the Company has no interest rate swap agreements outstanding. No portion of the change in fair value of the Company’s interest rate swaps during 2015, 2014, or 2013 were considered ineffective. The amount recorded as Interest Expense during 2015, 2014, and 2013 related to the Company’s interest rate swaps was $3.5 million, $0.5 million and $0.5 million, respectively.
Convertible Subordinated Notes – In March 2007, the Company issued $197.8 million of CSN at a 5% discount. CSN accrued interest at 2.25% per annum. The effective interest rate of CSN, which took into consideration the amortization of the discount and deferred fees related to the issuance of these notes, was 8.5%. On February 20, 2013, the Company redeemed all outstanding CSN. The contractual interest and discount amortization for CSN were as follows (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Contractual interest
$

 
$

 
$
634

Discount amortization

 

 
5,368


Debt Issuance Costs and Discounts – In conjunction with the issuance of the Senior Secured Credit Facilities and the Senior Notes, the Company incurred $45.9 million of debt issuance costs. As stated in Note 1, the Company has elected to early-adopt ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” Following this ASU, unamortized debt issuance costs of $35.9 million and $0.9 million have been recorded as a reduction of the carrying value of the related debt as of January 1, 2016 and January 2, 2015, respectively. Additionally, as of January 1, 2016 and January 2, 2015, $4.8 million and $2.2 million, respectively, of debt issuance costs attributable to the Company’s revolving credit facilities remain recorded as a component of Other Assets on the Consolidated Balance Sheets. These costs will amortize into Interest Expense over the terms of the related credit facilities.

The change in deferred debt issuance costs related to the Company’s revolving credit facilities is as follows (in thousands):
At January 3, 2014
$
2,786

Amortization during the period
(586
)
At January 2, 2015
2,200

Financing costs deferred
4,152

Write-off during the period
(907
)
Amortization during the period
(654
)
At January 1, 2016
$
4,791


The change in unamortized discount and debt issuance costs related to the Term Loan Facilities and Senior Notes is as follows (in thousands):
 
Debt Issuance Costs
 
Unamortized Discount on TLB Facility
 
Total
At January 3, 2014
$
1,074

 
$

 
$
1,074

Amortization during the period
(187
)
 

 
(187
)
At January 2, 2015
887

 

 
887

Financing costs incurred
41,781

 
10,250

 
52,031

Write-off during the period
(732
)
 

 
(732
)
Amortization during the period
(6,028
)
 
(211
)
 
(6,239
)
At January 1, 2016
$
35,908

 
$
10,039

 
$
45,947


During 2015, the Company wrote off $1.6 million of debt issuance costs in connection with the extinguishment and modification of its term loan and revolving line of credit, respectively, which is included in Interest Expense on the Consolidated Statements of Operations.
Benefit Plans
BENEFIT PLANS
10.
 
BENEFIT PLANS

Savings Plan – The Company sponsors a defined contribution 401(k) plan, for its U.S. based employees. The plan provides for the deferral of employee compensation under Section 401(k) and a discretionary Company match. In 2015, 2014, and 2013, this match was 35% per dollar of participant deferral, up to 6% of the total compensation for legacy Greatbatch associates. Net costs related to this defined contribution plan were $2.3 million in 2015, $2.2 million in 2014, and $2.0 million in 2013.
In addition to the above, under the terms of the 401(k) plan document there is an annual discretionary defined contribution of up to 4% of each legacy Greatbatch employee’s eligible compensation based upon the achievement of certain performance targets. This amount is contributed to the 401(k) plan in the form of Company stock. Compensation cost recognized related to the defined contribution plan was $0.0 million, $4.2 million, $4.8 million in 2015, 2014, and 2013, respectively. As of January 1, 2016, the 401(k) Plan held approximately 580,000 shares of Company stock.
Subsequent to the Lake Region Medical acquisition, the Company continued the 401(k) plan previously provided to Lake Region Medical employees. This plan is available to most Lake Region employees whereby employees are allowed to contribute up to 50% of gross salary. The Company matches 50% of an employee’s contributions for the first 6% of the employee’s gross salary at a maximum contribution rate per employee of 3% of the employee’s gross salary. The employee’s contributions vest immediately, while the Company’s contributions vest over a five-year period. Net costs related to this defined contribution plan since the date of acquisition was $0.8 million in 2015.
Defined Benefit Plans – The Company is required to provide its employees located in Switzerland, Mexico, France, and Germany certain statutorily mandated defined benefits. Under these plans, benefits accrue to employees based upon years of service, position, age and compensation. The defined benefit pension plan provided to the Company’s employees located in Switzerland is a funded contributory plan, while the plans that provide benefits to the Company’s employees located in Mexico, France, and Germany are unfunded and noncontributory. The liability and corresponding expense related to these benefit plans is based on actuarial computations of current and future benefits for employees.
During 2012, the Company transferred most major functions performed at its facilities in Switzerland into other existing facilities. As a result, the Company curtailed its defined benefit plan provided to employees at those Swiss facilities during 2012. In accordance with ASC 715, this gain was recognized in Other Operating Expenses, Net as the related employees were terminated. Since Swiss plan assets were sufficient to cover all plan liabilities, during 2012 the plan assets were transferred into cash. During 2013, the plan assets that remained after settlement payments were made were transferred to an AA- rated insurance carrier who bears the pension risk and longevity risk, and will be used to cover the pension liability for the remaining retirees of the Swiss plan, as well as the remaining employees at that location.
Information relating to the funding position of the Company’s defined benefit plans as of the plans measurement date of January 1, 2016 and January 2, 2015 were as follows (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
Change in projected benefit obligation:
 
 
 
Projected benefit obligation at beginning of year
$
2,843

 
$
2,422

Projected benefit obligation acquired
4,316

 

Service cost
439

 
203

Interest cost
165

 
75

Plan participants’ contribution
61

 
36

Actuarial loss
235

 
630

Benefits transferred in, net
258

 
155

Settlement/curtailment gain

 
(337
)
Foreign currency translation
(325
)
 
(341
)
Projected benefit obligation at end of year
7,992

 
2,843

Change in fair value of plan assets:
 
 
 
Fair value of plan assets at beginning of year
437

 
731

Employer contributions (refund)
69

 
(39
)
Plan participants’ contributions
61

 
36

Actual loss on plan assets
(39
)
 
(101
)
Benefits transferred in, net
362

 
198

Settlements

 
(337
)
Foreign currency translation
(19
)
 
(51
)
Fair value of plan assets at end of year
871

 
437

Projected benefit obligation in excess of plan assets at end of year
$
7,121

 
$
2,406

Defined benefit liability classified as other current liabilities
$
46

 
$
25

Defined benefit liability classified as long-term liabilities
$
7,075

 
$
2,381

Accumulated benefit obligation at end of year
$
6,299

 
$
1,938


Amounts recognized in Accumulated Other Comprehensive Income are as follows (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
Net loss occurring during the year
$
164

 
$
736

Amortization of losses
(156
)
 
(138
)
Prior service cost
(1
)
 
(2
)
Amortization of prior service cost
(9
)
 
(11
)
Foreign currency translation

 
(76
)
Pre-tax adjustment
(2
)
 
509

Taxes
22

 
(135
)
Net loss
$
20

 
$
374


The amortization of amounts in Accumulated Other Comprehensive Income expected to be recognized as components of net periodic benefit expense during 2016 are as follows (in thousands):
Amortization of net prior service cost
$
10

Amortization of net loss
172


Net pension cost is comprised of the following (in thousands):
 
Year Ended
 
January 1, 2016
 
January 2, 2015
Service cost
$
439

 
$
203

Interest cost
165

 
75

Settlements loss

 
105

Expected return on assets
(11
)
 
(3
)
Recognized net actuarial loss
164

 
45

Net pension cost
$
757

 
$
425


The weighted-average rates used in the actuarial valuations were as follows:
 
Projected Benefit Obligation
 
Net Pension Cost
 
January 1,
2016
 
January 2,
2015
 
2015
 
2014
 
2013
Discount rate
2.2
%
 
2.3
%
 
2.3
%
 
3.4
%
 
2.1
%
Salary growth
2.9
%
 
3.0
%
 
3.0
%
 
3.1
%
 
2.4
%
Expected rate of return on assets
2.0
%
 
2.3
%
 
2.3
%
 
2.5
%
 
%

The discount rate used is based on the yields of AA bonds with a duration matching the duration of the liabilities plus approximately 50 basis points to reflect the risk of investing in corporate bonds. The expected rate of return on plan assets reflects earnings expectations on existing plan assets.
Plan assets were comprised of the following (in thousands):
 
 
 
Fair Value Measurements Using
 
January 1, 2016
 
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Insurance contract
$
871

 
$

 
$
871

 
$

Total
$
871

 
$

 
$
871

 
$

 
 
 
Fair Value Measurements Using
 
January 2,
2015
 
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Insurance contract
$
437

 
$

 
$
437

 
$

Total
$
437

 
$

 
$
437

 
$


The fair value of Level 2 plan assets are obtained from quoted market prices in inactive markets or valuation models with observable market data inputs to estimate fair value. These observable market data inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data. 
Estimated benefit payments over the next ten years are as follows (in thousands):
2016
$
166

2017
205

2018
225

2019
277

2020
265

2020-2024
1,619

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

The components and classification of stock-based compensation expense were as follows (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Stock options
$
2,708

 
$
2,523

 
$
3,490

Restricted stock and units
6,668

 
6,417

 
5,843

401(k) stock contribution

 
4,246

 
4,768

Total stock-based compensation expense
$
9,376

 
$
13,186

 
$
14,101

 
 
 
 
 
 
Cost of sales
$
795

 
$
3,530

 
$
3,864

Selling, general and administrative expenses
7,510

 
7,923

 
7,907

Research, development and engineering costs, net
982

 
1,440

 
1,194

Other operating expenses, net (Note 13)
89

 
293

 
1,136

Total stock-based compensation expense
$
9,376

 
$
13,186

 
$
14,101


During 2014 and 2013, the Company recorded stock modification expense related to employee separation costs incurred during 2014 and 2013 in connection with realignment initiatives. This modification expense was included within Other Operating Expenses, Net. Refer to Note 13 “Other Operating Expenses, Net” for further discussion of these initiatives.
Summary of Plans
The Company’s 2005 Stock Incentive Plan (“2005 Plan”) has been frozen to any new award issuances. Stock options remain outstanding under this plan.
The Company’s 2009 Stock Incentive Plan (“2009 Plan”) authorizes the issuance of up to 1,350,000 shares of equity incentive awards including nonqualified and incentive stock options, restricted stock, restricted stock units, stock bonuses and stock appreciation rights subject to the terms of the 2009 Plan. The 2009 Plan limits the amount of restricted stock, restricted stock units and stock bonuses that may be awarded in the aggregate to 200,000 shares of the 1,350,000 shares authorized.
The Company’s 2011 Stock Incentive Plan (“2011 Plan”), as amended, authorizes the issuance of up to 1,350,000 shares of equity incentive awards including nonqualified and incentive stock options, restricted stock, restricted stock units, stock bonuses and stock appreciation rights, subject to the terms of the 2011 Plan. The 2011 Plan does not limit the amount of restricted stock, restricted stock units or stock bonuses that may be awarded.
As of January 1, 2016, there were 289,734 and 75,361 shares available for future grants under the 2011 Plan and 2009 Plan, respectively. Due to plan sub-limits, of the shares available for grant, only 9,728 shares may be awarded under the 2009 Plan in the form of restricted stock, restricted stock units or stock bonuses.
Stock Options
Stock options granted generally vest over a three year period, expire 10 years from the date of grant, and are granted at exercise prices equal to or greater than the fair value of the Company’s common stock on the date of grant. Performance-based stock options have not been granted since 2010.
The Company utilizes the Black-Scholes option pricing model to determine the fair value of stock options. Management is required to make certain assumptions with respect to selected model inputs. Expected volatility is based on the historical volatility of the Company’s stock over the most recent period commensurate with the estimated expected life of the stock options. The expected life of stock options, which represents the period of time that the stock options are expected to be outstanding, is based on historical data. The expected dividend yield is based on the Company’s history and expectation of future dividend payouts. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for a period commensurate with the estimated expected life. If factors change and result in different assumptions, the stock option expense that the Company records for future grants may differ significantly from what the Company recorded in the current period. Stock-based compensation expense is only recorded for those awards that are expected to vest. Pre-vesting forfeiture estimates for determining appropriate stock-based compensation expense are estimated at the time of grant based on historical experience. Revisions are made to those estimates in subsequent periods if actual forfeitures differ from estimated forfeitures.
The weighted-average fair value and assumptions used are as follows:
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Weighted average grant date fair value
$
12.18

 
$
16.43

 
$
8.38

Risk-free interest rate
1.55
%
 
1.73
%
 
0.73
%
Expected volatility
26
%
 
39
%
 
39
%
Expected life (in years)
4.7

 
5.3

 
5.3

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

The following table summarizes time and performance-vested stock option activity:
 
Number of
Stock
Options
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life
(In Years)
 
Aggregate
Intrinsic
Value
(In Millions)
Outstanding at December 28, 2012
2,060,772

 
$
23.18

 
 
 
 
Granted
372,676

 
23.33

 
 
 
 
Exercised
(551,092
)
 
23.24

 
 
 
 
Forfeited or expired
(88,686
)
 
28.05

 
 
 
 
Outstanding at January 3, 2014
1,793,670

 
22.96

 
 
 
 
Granted
183,571

 
43.84

 
 
 
 
Exercised
(353,625
)
 
23.41

 
 
 
 
Forfeited or expired
(33,279
)
 
27.82

 
 
 
 
Outstanding at January 2, 2015
1,590,337

 
25.17

 
 
 
 
Granted
301,547

 
49.20

 
 
 
 
Replacement options granted in connection with the Lake Region Medical acquisition
119,900

 
12.41

 
 
 
 
Exercised
(280,701
)
 
23.45

 
 
 
 
Forfeited or expired
(52,183
)
 
42.45

 
 
 
 
Outstanding at January 1, 2016
1,678,900

 
$
28.32

 
6.1
 
$
40.6

Expected to vest at January 1, 2016
1,643,386

 
$
27.90

 
6.1
 
$
40.4

Exercisable at January 1, 2016
1,467,256

 
$
25.50

 
5.8
 
$
39.6

Intrinsic value is calculated for in-the-money options (exercise price less than market price) as the difference between the market price of the Company’s common shares as of January 1, 2016 ($52.50) and the weighted average exercise price of the underlying stock options, multiplied by the number of options outstanding and/or exercisable. As of January 1, 2016, $2.3 million of unrecognized compensation cost related to non-vested stock options is expected to be recognized over a weighted-average period of approximately 2 years. Shares are distributed from the Company’s authorized but unissued reserve upon the exercise of stock options or treasury stock if available. The Company does not intend to purchase treasury shares to fund the future exercises of stock options.
Proceeds from the exercise of stock options are credited to common stock at par value and the excess is credited to additional paid-in capital. A small portion of the options outstanding qualify as incentive stock options (“ISO”) for income tax purposes. As such, a tax benefit is not recorded at the time the compensation cost related to the stock options is recorded for book purposes due to the fact that an ISO does not ordinarily result in a tax benefit unless there is a disqualifying disposition. Stock option grants of non-qualified stock options result in the creation of a deferred tax asset, which is a temporary difference, until the time that the option is exercised.
The following table provides certain information relating to the exercise of stock options (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Intrinsic value
$
8,231

 
$
7,997

 
$
6,807

Cash received
6,583

 
8,278

 
12,807

Tax benefit realized
1,954

 
1,704

 
727


Restricted Stock and Restricted Stock Units
Time-vested restricted stock and restricted stock unit awards granted typically vest in equal annual installments over a three or four year period. The fair value of time-based as well as nonmarket-based performance restricted stock and restricted stock unit awards is equal to the fair value of the Company’s stock on the date of grant. The following table summarizes time-vested restricted stock and unit activity:
 
Time-Vested
Activity
 
Weighted
Average
Fair Value
Nonvested at December 28, 2012
80,269

 
$
23.48

Granted
67,230

 
26.76

Vested
(74,062
)
 
23.93

Forfeited
(5,862
)
 
22.26

Nonvested at January 3, 2014
67,575

 
26.37

Granted
63,817

 
44.78

Vested
(53,568
)
 
34.16

Forfeited
(9,992
)
 
35.30

Nonvested at January 2, 2015
67,832

 
36.22

Granted
44,629

 
49.84

Vested
(56,119
)
 
37.93

Forfeited
(17,107
)
 
40.48

Nonvested at January 1, 2016
39,235

 
$
47.40


Performance-based restricted stock units granted only vest if certain market-based performance metrics are achieved. The amount of shares that ultimately vest range from 0 shares to 577,825 shares based upon the total shareholder return of the Company relative to the Company’s compensation peer group over a three year performance period beginning in the year of grant. The fair value of the restricted stock units were determined by utilizing a Monte Carlo simulation model, which projects the value of Greatbatch stock versus the peer group under numerous scenarios and determines the value of the award based upon the present value of these projected outcomes. The following table summarizes performance-vested restricted stock and stock unit activity related to the Company’s plans: 
 
Performance-
Vested
Activity
 
Weighted
Average
Fair Value
Nonvested at December 28, 2012
782,446

 
$
16.02

Granted
318,169

 
15.86

Vested
(49,139
)
 
14.68

Forfeited
(271,798
)
 
14.94

Nonvested at January 3, 2014
779,678

 
16.41

Granted
186,825

 
31.33

Vested
(221,470
)
 
18.51

Forfeited
(28,870
)
 
18.42

Nonvested at January 2, 2015
716,163

 
19.57

Granted
179,940

 
32.92

Vested
(270,198
)
 
15.30

Forfeited
(48,080
)
 
26.96

Nonvested at January 1, 2016
577,825

 
$
25.11


The realized tax benefit (expense) from the vesting of restricted stock and restricted stock units was $3.4 million, $2.3 million and $(0.4) million for 2015, 2014, 2013, respectively. As of January 1, 2016, there was $7.2 million of total unrecognized compensation cost related to the restricted stock and restricted stock unit awards. That cost is expected to be recognized over a weighted-average period of approximately 2 years. The fair value of shares vested in 2015, 2014, 2013 was $16.1 million, $12.5 million and $4.0 million, respectively.
Research, Development and Engineering Costs
RESEARCH, DEVELOPMENT AND ENGINEERING COSTS, NET
12.
 
RESEARCH, DEVELOPMENT AND ENGINEERING COSTS, NET

Research, Development and Engineering Costs, Net are comprised of the following (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Research, development and engineering costs
$
59,767

 
$
58,974

 
$
62,652

Less: cost reimbursements
(6,772
)
 
(9,129
)
 
(8,575
)
Total research, development and engineering costs, net
$
52,995

 
$
49,845

 
$
54,077

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

Other Operating Expenses, Net is comprised of the following (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
2014 investments in capacity and capabilities
$
23,037

 
$
8,925

 
$

Orthopaedic facilities optimization
1,395

 
1,317

 
8,038

2013 operating unit realignment

 
1,017

 
5,625

Legacy Lake Region Medical consolidations
1,961

 

 

Other consolidation and optimization costs (income)

 
(71
)
 
1,095

Acquisition and integration costs (income)
33,449

 
3

 
(502
)
Asset dispositions, severance and other
6,622

 
4,106

 
1,534

Total other operating expenses, net
$
66,464

 
$
15,297

 
$
15,790


2014 investments in capacity and capabilities. In 2014, the Company announced several initiatives to invest in capacity and capabilities and to better align its resources to meet its customers’ needs and drive organic growth and profitability. These included the following:
Functions performed at the Company’s facility in Plymouth, MN to manufacture catheters and introducers will transfer into the Company’s existing facility in Tijuana, Mexico. This initiative is expected to be substantially completed by the first half of 2016 and is dependent upon our customers’ validation and qualification of the transferred products.
Functions performed at the Company’s facilities in Beaverton, OR and Raynham, MA to manufacture products for the portable medical market will transfer to a new facility in Tijuana, Mexico. This initiative is expected to be substantially completed by the end of the first quarter of 2016 and is dependent upon our customers’ validation and qualification of the transferred products. Products currently manufactured at the Beaverton facility, which do not serve the portable medical market, are planned to transfer to the Company’s Raynham facility.
The design engineering responsibilities previously performed at the Company’s Cleveland, OH facility were transferred to the Company’s facilities in Minnesota in 2015.
The realignment of the Company’s commercial sales operations was completed during the fourth quarter of 2015.
The total capital investment expected for these initiatives is between $25.0 million and $28.0 million, of which $21.3 million has been expended through January 1, 2016. Total restructuring charges expected to be incurred in connection with this realignment are between $34.0 million and $39.0 million, of which $32.0 million has been incurred through January 1, 2016. Expenses related to this initiative are recorded within the applicable segment and corporate cost centers that the expenditures relate to and include the following:
Severance and retention: $5.0 million - $7.0 million;
Accelerated depreciation and asset write-offs: $2.0 million - $3.0 million; and
Other: $27.0 million - $29.0 million
Other expenses primarily consist of costs to relocate certain equipment and personnel, duplicate personnel costs, disposal, and travel expenditures. All expenses are cash expenditures except accelerated depreciation and asset write-offs.
The change in accrued liabilities related to the 2014 investments in capacity and capabilities is as follows (in thousands):
 
Severance and Retention
 
Accelerated
Depreciation/
Asset Write-offs
 
Other
 
Total
At January 2, 2015
$
1,163

 
$

 
$
1,066

 
$
2,229

Restructuring charges
2,729

 
235

 
20,073

 
23,037

Write-offs

 
(235
)
 

 
(235
)
Cash payments
(2,463
)
 

 
(19,544
)
 
(22,007
)
At January 1, 2016
$
1,429

 
$

 
$
1,595

 
$
3,024


Orthopaedic facilities optimization. In 2010, the Company began updating its Indianapolis, IN facility to streamline operations, consolidate two buildings, increase capacity, further expand capabilities and reduce dependence on outside suppliers. This initiative was completed in 2011.
In 2011, the Company began construction of an orthopaedic manufacturing facility in Fort Wayne, IN and transferred manufacturing operations being performed at its Columbia City, IN location into this new facility. This initiative was completed in 2012.
During 2012, the Company transferred manufacturing and development operations performed at its facilities in Orvin and Corgemont, Switzerland into existing facilities in Fort Wayne, IN and Tijuana, Mexico. In connection with this consolidation, in 2013, the Company sold assets related to certain non-core Swiss orthopaedic product lines to an independent third party. The purchase agreement provided the Company with an earn out payment based upon the amount of inventory consumed by the purchaser within one year after the close of the transaction. As a result of this earn out, a gain of $2.7 million was recorded in Other Operating Expenses, Net during 2014. During 2014, the Company transferred $2.1 million of assets relating to the Company’s Orvin, Switzerland property to held for sale and recognized a $0.4 million impairment charge. During 2015, the Company sold $0.6 million of these assets held for sale with no additional gain or loss recognized. Refer to Note 5 “Assets Held For Sale” for additional information.
During 2013, the Company began a project to expand its Chaumont, France facility in order to enhance its capabilities and fulfill larger volume customer supply agreements. This initiative is expected to be completed over the next year.
The total capital investment expected to be incurred for these initiatives is between $30.0 million and $35.0 million, of which $28.4 million has been expended through January 1, 2016. Total expense expected to be incurred for these initiatives is between $45.0 million and $48.0 million, of which $43.9 million has been incurred through January 1, 2016. All expenses have been and will be recorded within the Greatbatch Medical segment and are expected to include the following:
Severance and retention: approximately $11.0 million;
Accelerated depreciation and asset write-offs: approximately $13.0 million; and
Other: $21.0 million - $24.0 million
Other expenses include production inefficiencies, moving, revalidation, personnel, training, consulting, and travel costs associated with these consolidation projects. All expenses are cash expenditures except accelerated depreciation and asset write-offs.
The change in accrued liabilities related to the orthopaedic facilities optimizations is as follows (in thousands):
 
Severance
and
Retention
 
Accelerated
Depreciation/
Asset Write-offs
 
Other
 
Total
At January 2, 2015
$

 
$

 
$
287

 
$
287

Restructuring charges

 
88

 
1,307

 
1,395

Write-offs

 
(88
)
 

 
(88
)
Cash payments

 

 
(1,594
)
 
(1,594
)
At January 1, 2016
$

 
$

 
$

 
$


2013 operating unit realignment. In 2013, the Company initiated a plan to realign its operating structure in order to optimize its continued focus on profitable growth. As part of this initiative, the sales and marketing and operations groups of its former Implantable Medical and Electrochem Solutions reportable segments were combined into one sales and marketing group and one operations group each serving Greatbatch Medical. This initiative was completed during 2014. Total restructuring charges incurred in connection with this realignment were $6.6 million. Expenses related to this initiative were recorded within the applicable segment that the expenditures relate to and included the following:
Severance and retention: $5.0 million; and
Other: $1.6 million.
Other expenses primarily consisted of relocation and travel expenditures. All expenses were cash expenditures.
Legacy Lake Region Medical consolidations. In 2014, Lake Region Medical initiated plans to close its Arvada, Colorado site, consolidate its two Galway, Ireland sites into one facility, and take other restructuring actions that will result in a reduction in staff across manufacturing and administrative functions at certain locations. This initiative is expected to be substantially completed by the end of 2016. The total capital investment expected for this initiative since the acquisition date is between $4.0 million and $5.0 million, of which $0.9 million has been expended through January 1, 2016. Total expense expected to be incurred for this initiative since the acquisition date is between $13.0 million and $15.0 million, of which $2.0 million has been incurred through January 1, 2016. All expenses have been and will be recorded with the Lake Region Medical segment and are expected to include the following:
Employee costs: $5.0 million - $6.0 million; and
Other: $8.0 million - $9.0 million
Other expenses primarily consist of production inefficiencies, moving, revalidation, personnel, training, consulting, and travel costs associated with these consolidation projects. All expenses are cash expenditures and are being recorded in the Lake Region Medical segment.
The change in accrued liabilities related to these legacy Lake Region Medical consolidation initiatives is as follows (in thousands):
 
Employee
Costs
 
Other Exit Costs
 
Total
At October 27, 2015
$
3,392

 
$
653

 
$
4,045

Restructuring charges
557

 
1,404

 
1,961

Write-offs

 

 

Cash payments
(282
)
 
(1,461
)
 
(1,743
)
At January 1, 2016
$
3,667

 
$
596

 
$
4,263


Acquisition and integration costs (income). During 2015, the Company incurred $23.7 million in transaction costs related to the acquisition of Lake Region Medical. These costs primarily relate to professional and consulting fees incurred in connection with due diligence efforts of this acquisition, of which $0.7 million are accrued as of January 1, 2016. Expenses related to this initiative were recorded to corporate unallocated expenses. Additionally, during 2015, the Company incurred $8.6 million in Lake Region Medical integration costs, which consisted primarily of change-in-control payments to former Lake Region Medical executives, professional and consulting fees, and travel costs, of which $6.2 million are accrued as of January 1, 2016 in the Lake Region Medical segment. Total expense expected to be incurred on the integration of Lake Region Medical is between $40.0 million and $50.0 million and total capital expenditures are expected to be between $20.0 million to $25.0 million.
During 2015, 2014, and 2013, the Company also incurred costs (income) related to the integration of CCC and NeuroNexus Technologies, Inc. (“NeuroNexus”). These expenses were primarily for retention bonuses, travel costs in connection with integration efforts, training, severance, and the change in fair value of the contingent consideration recorded in connection with the NeuroNexus acquisition, which resulted in a gain of $0.8 million and $0.7 million in 2014 and 2013, respectively, and was categorized in Level 3 of the fair value hierarchy.
Asset dispositions, severance and other. During 2015, 2014, and 2013, the Company recorded losses in connection with various asset disposals and/or write-downs. In addition, during 2015, the Company incurred legal and professional costs in connection with the expected Spin-off of Nuvectra of $6.0 million, of which $0.5 million are accrued as of January 1, 2016. Expenses related to the expected Spin-off were recorded within the applicable segment and corporate cost centers to which the expenditures relate. The transaction is expected to be completed in March 2016. Deal related costs for the Spin-off are estimated to be between $10.0 million and $12.0 million. Refer to Note 19 “Business Segment, Geographic and Concentration Risk Information” for additional information on the expected Spin-off.
During 2014, the Company incurred $0.9 million of expense related to the separation of the Company’s Senior Vice President, Human Resources. Additionally, during 2014, the Company recorded charges in connection with its business reorganization to align its contract manufacturing operations. Costs incurred primarily related to consulting and IT development and were completed in 2014.
During 2013, Greatbatch Medical recorded a $0.9 million write-off related to its wireless sensing product line and QiG recorded a $0.5 million write-off of IPR&D. Refer to Note 18 “Fair Value Measurements” for additional information.
Income Taxes
INCOME TAXES
14.
 
INCOME TAXES

The U.S. and international components of income (loss) before provision for income taxes were as follows (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
U.S.
$
(42,166
)
 
$
56,801

 
$
42,392

International
26,466

 
19,778

 
6,446

Total income (loss) before provision for income taxes
$
(15,700
)
 
$
76,579

 
$
48,838


The provision (benefit) for income taxes was comprised of the following (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Current:
 
 
 
 
 
Federal
$
(3,753
)
 
$
16,293

 
$
39,353

State
(367
)
 
1,299

 
1,604

International
6,312

 
2,998

 
1,470

 
2,192

 
20,590

 
42,427

Deferred:
 
 
 
 
 
Federal
(8,144
)
 
1,211

 
(28,678
)
State
(880
)
 
(310
)
 
427

International
(1,274
)
 
(370
)
 
(1,605
)
 
(10,298
)
 
531

 
(29,856
)
Total provision (benefit) for income taxes
$
(8,106
)
 
$
21,121

 
$
12,571


The provision (benefit) for income taxes differs from the U.S. statutory rate due to the following:
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Statutory rate
$
(5,495
)
35.0
 %
 
$
26,803

35.0
 %
 
$
17,093

35.0
 %
Federal tax credits
(1,850
)
11.8

 
(1,600
)
(2.1
)
 
(3,651
)
(7.5
)
Foreign rate differential
(3,180
)
20.2

 
(3,276
)
(4.3
)
 
(348
)
(0.7
)
Uncertain tax positions
(531
)
3.4

 
412

0.6

 
831

1.7

State taxes, net of federal benefit
(1,490
)
9.5

 
507

0.7

 
1,148

2.3

Change in foreign tax rates
(91
)
0.6

 
(446
)
(0.6
)
 
(1,806
)
(3.7
)
Non-deductible transaction costs
4,867

(31.0
)
 


 


Valuation allowance
626

(4.0
)
 
(299
)
(0.4
)
 
186

0.4

Other
(962
)
6.1

 
(980
)
(1.3
)
 
(882
)
(1.8
)
Effective tax rate
$
(8,106
)
51.6
 %
 
$
21,121

27.6
 %
 
$
12,571

25.7
 %

Deferred tax assets (liabilities) consist of the following (in thousands):
 
At
 
January 1,
2016
 
January 2,
2015
Tax credits
$
22,196

 
$
5,828

Net operating loss carryforwards
153,949

 
6,721

Inventories
6,543

 
3,335

Accrued expenses
13,138

 
4,338

Stock-based compensation
9,512

 
9,341

Other
38

 
1,659

Gross deferred tax assets
205,376

 
31,222

Less valuation allowance
(39,171
)
 
(10,709
)
Net deferred tax assets
166,205

 
20,513

Property, plant and equipment
(32,772
)
 
(2,646
)
Intangible assets
(347,896
)
 
(57,850
)
Convertible subordinated notes
(3,754
)
 
(5,006
)
Gross deferred tax liabilities
(384,422
)
 
(65,502
)
Net deferred tax liability
$
(218,217
)
 
$
(44,989
)
Presented as follows:
 
 
 
Current deferred tax asset
$

 
$
6,168

Current deferred tax liability

 
(588
)
Noncurrent deferred tax asset
3,587

 
2,626

Noncurrent deferred tax liability
(221,804
)
 
(53,195
)
Net deferred tax liability
$
(218,217
)
 
$
(44,989
)

In November 2015, the FASB issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes.” This ASU requires entities that present a classified balance sheet to classify all deferred income taxes as noncurrent assets or noncurrent liabilities. Previous accounting principles required an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified balance sheet. As permitted, during the fourth quarter of 2015, the Company elected to early adopt this ASU and has elected to prospectively apply its guidance. As a result, all deferred tax assets or liabilities shown in the Consolidated Balance Sheet as of January 1, 2016, are classified as noncurrent. Prior periods were not retrospectively adjusted for the adoption of this ASU.
As of January 1, 2016, the Company has the following carryforwards available:
Jurisdiction
 
Tax
Attribute
 
Amount
(in millions)
 
Begin to
Expire
Federal
 
Net Operating Loss
 
$
386.2

 
2019
International
 
Net Operating Loss
 
42.2

 
2016
State
 
Net Operating Loss
 
298.7

 
2016
Federal
 
Foreign Tax Credit
 
17.0

 
2019
U.S. and State
 
R&D Tax Credit
 
2.6

 
2018
State
 
Investment Tax Credit
 
5.3

 
2016

Certain U.S. tax attributes are subject to limitations of Internal Revenue Code Section 382, which in general provides that utilization is subject to an annual limitation if an ownership change results from transactions increasing the ownership of certain shareholders or public groups in stock of a corporation by more than 50 percentage points over a three- year period. Such an ownership change occurred upon the consummation of the acquisition of Lake Region Medical. The Company does not anticipate that these limitations will affect utilization of these carryforwards prior to their expiration.
The Company’s federal net operating loss carryforward and certain other federal tax credits reported on its income tax returns included uncertain tax positions taken in prior years. Due to the application of the accounting for uncertain tax positions, the actual tax attributes are larger than the tax amounts for which a deferred tax asset is recognized for financial statement purposes.
In assessing the realizability of deferred tax assets, management considers, within each taxing jurisdiction, whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the consideration of the weight of both positive and negative evidence, management has determined that a portion of the deferred tax assets as of January 1, 2016 and January 2, 2015 related to certain foreign tax credits, state investment tax credits, and foreign and state net operating losses will not be realized. The increase in the valuation allowance during 2015 is primarily attributable to the acquisition of Lake Region Medical.
The Company files annual income tax returns in the U.S., various state and local jurisdictions, and in various foreign jurisdictions. A number of years may elapse before an uncertain tax position, for which the Company has unrecognized tax benefits, is examined and finally settled. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, the Company believes that its unrecognized tax benefits reflect the most probable outcome. The Company adjusts these unrecognized tax benefits, as well as the related interest, in light of changing facts and circumstances. The resolution of an uncertain tax position, if recognized, would be recorded as an adjustment to the Provision (Benefit) for Income Taxes and the effective tax rate in the period of resolution.
Below is a summary of changes to the unrecognized tax benefit (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Balance, beginning of year
$
2,411

 
$
1,858

 
$
970

Additions relating to business combinations
7,443

 

 

Additions based upon tax positions related to the current year
274

 
268

 
325

Additions related to prior period tax positions
163

 
510

 
651

Reductions relating to settlements with tax authorities
(550
)
 
(225
)
 
(88
)
Reductions as a result of a lapse of applicable statute of limitations
(470
)
 

 

Balance, end of year
$
9,271

 
$
2,411

 
$
1,858


Greatbatch and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The tax years that remain open and subject to tax audits varies depending on the tax jurisdiction. The Internal Revenue Service finalized an audit of the 2012 and 2013 U.S. Federal income tax returns of the Company in the first quarter of 2015. The impact to the income tax expense was not material. The U.S. subsidiary of the former Lake Region Medical is still subject to U.S. federal, state, and local examinations for the taxable years 2006 to 2014.
It is reasonably possible that a reduction of approximately $0.1 million of the balance of unrecognized tax benefits may occur within the next twelve months as a result of the lapse of the statute of limitations and/or audit settlements. As of January 1, 2016, approximately $8.5 million of unrecognized tax benefits would favorably impact the effective tax rate (net of federal impact on state issues), if recognized.
The Company recognizes interest and penalties related to unrecognized tax benefits as a component of Provision (Benefit) for Income Taxes on the Consolidated Statement of Operations. During 2015, 2014, and 2013, the recorded amounts for interest and penalties, respectively, were not significant.
As of January 1, 2016, no taxes have been provided on the undistributed earnings of certain foreign subsidiaries amounting to $84 million. The Company intends to permanently reinvest these earnings. Quantification of the deferred tax liability associated with these undistributed earnings is not practicable.
Commitments And Contingencies
COMMITMENTS AND CONTINGENCIES
15.
 
COMMITMENTS AND CONTINGENCIES

Litigation In April 2013, the Company commenced an action against AVX Corporation and AVX Filters Corporation (collectively “AVX”) alleging that AVX had infringed on the Company’s patents by manufacturing and selling filtered feedthrough assemblies used in implantable pacemakers and cardioverter defibrillators that incorporate the Company’s patented technology. On January 26, 2016, a jury in the U.S. District Court for the District of Delaware returned a verdict finding that AVX infringed on two Greatbatch patents and awarded Greatbatch $37.5 million in damages. The finding is subject to post-trial proceedings, including a possible appeal by AVX. The Company has recorded no gains in connection with this litigation as no cash has been received.
In January 2015, Lake Region Medical was notified by the New Jersey Department of Environmental Protection (“NJDEP”) of the NJDEP’s intent to revoke a no further action determination made by the NJDEP in favor of Lake Region Medical in 2002 pertaining to a property on which a subsidiary of Lake Region Medical operated a manufacturing facility in South Plainfield, New Jersey beginning in 1971. Lake Region Medical sold the property in 2004 and vacated the facility in 2007. We are cooperating with the NJDEP and believe the NJDEP’s notice of intent to revoke is unwarranted. In December 2014, the current owner of the property commenced litigation against Lake Region Medical, one of its executive officers and other unrelated third parties, alleging that the defendants caused or contributed to alleged groundwater contamination beneath the property. The Company believes these allegations are without merit and has concluded that any potential loss related to these allegations is not probable, and as such, no liability has been recorded as of January 1, 2016.
The Company is a party to various other legal actions arising in the normal course of business. Other than what is discussed in this note, the Company does not expect that the ultimate resolution of any other pending legal actions will have a material effect on its consolidated results of operations, financial position, or cash flows, litigation is subject to inherent uncertainties. As such, there can be no assurance that any pending legal action, which the Company currently believes to be immaterial, does not become material in the future.
Environmental Matters The Company’s Collegeville, PA facility, which was acquired as part of the Lake Region Medical acquisition, is subject to two administrative consent orders entered into with the U.S. Environmental Protection Agency (the “EPA”), which require ongoing groundwater treatment and monitoring at the site as a result of historic leaks from underground storage tanks. Upon approval by the EPA of the Company’s proposed post remediation care plan, which requires a continuation of the groundwater treatment and monitoring process at the site, the Company expects that the consent orders will terminate. During the first half of 2016, the Company expects a decision from the EPA on whether the Company’s post remediation care plan has been approved. The groundwater treatment process at the Collegeville facility consists of a groundwater extraction and treatment system and the performance of annual sampling of a defined set of groundwater wells as a means to monitor containment within approved boundaries. As of January 1, 2016, there is $1.1 million recorded in Other Long-Term Liabilities in the Consolidated Balance Sheets in connection with this matter for the cost of on-going remediation.
License Agreements The Company is a party to various license agreements for technology that is utilized in certain of its products. The most significant of these agreements are the licenses for basic technology used in the production of wet tantalum capacitors, filtered feedthroughs and MRI compatible lead systems. Expenses related to license agreements were $2.4 million, $3.3 million, and $3.5 million, for 2015, 2014 and 2013, respectively, and are primarily included in Cost of Sales.
Product WarrantiesThe Company generally warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. The change in product warranty liability was comprised of the following (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
Beginning balance
$
660

 
$
1,819

Additions to warranty reserve
1,274

 
953

Liabilities assumed from acquisition
2,521

 

Warranty claims paid
(1,139
)
 
(2,112
)
Ending balance
$
3,316

 
$
660


Operating Leases The Company is a party to various operating lease agreements for buildings, machinery, equipment and software. The Company primarily leases buildings, which accounts for the majority of the future lease payments. Lease expense includes the effect of escalation clauses and leasehold improvement incentives which are accounted for ratably over the lease term. Operating lease expense was as follows (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Operating lease expense
$
6,516

 
$
4,281

 
$
4,379


Minimum future estimated annual operating lease expenses are as follows (in thousands):
2016
$
14,118

2017
10,951

2018
9,950

2019
8,979

2020
6,925

Thereafter
27,674

Total estimated operating lease expense
$
78,597


Purchase CommitmentsContractual obligations for purchase of goods or services are defined as agreements that are enforceable and legally binding on the Company and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The Company’s purchase orders are normally based on its current manufacturing needs and are fulfilled by its vendors within short time horizons. The Company enters into blanket orders with vendors that have preferred pricing and terms, however these orders are normally cancelable by us without penalty. As of January 1, 2016, the total contractual obligation related to such expenditures is approximately $63.7 million and will primarily be financed by existing cash and cash equivalents, cash generated from operations, or the Company’s Senior Secured Credit Facilities. The Company also enters into contracts for outsourced services; however, the obligations under these contracts were not significant and the contracts generally contain clauses allowing for cancellation without significant penalty.
Self-Insured Medical Plan The Company self-funds the medical insurance coverage provided to its U.S. based employees. The Company had specific stop loss coverage for claims incurred during 2015 exceeding $250 thousand per associate for legacy Greatbatch employees and exceeding $275 thousand per associate for legacy Lake Region Medical employees with no annual maximum aggregate stop loss coverage. As of January 1, 2016 and January 2, 2015, the Company had $4.0 million and $1.8 million accrued related to the self-insurance of its medical plans, respectively. This accrual is recorded in Accrued Expenses in the Consolidated Balance Sheet and is primarily based upon claim history. 
Foreign Currency ContractsHistorically, the Company has entered into forward contracts to purchase Mexican pesos in order to hedge the risk of peso-denominated payments associated with its operations in Tijuana, Mexico. In connection with the Lake Region Medical acquisition, the Company terminated its outstanding forward contracts resulting in a $2.4 million payment to the foreign currency contract counterparty during 2015. As of the date the contracts were terminated, the Company had $1.6 million recorded in Accumulated Other Comprehensive Income related to these contracts, which will be amortized to Cost of Sales as the inventory, which the contracts were hedging the cash flows to produce, is sold.
The impact to the Company’s results of operations from its forward contracts was as follows (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Increase (reduction) in Cost of Sales
$
1,948

 
$
(168
)
 
$
(1,154
)
Ineffective portion of change in fair value

 

 


Information regarding outstanding foreign currency contracts as of January 1, 2016 is as follows (dollars in thousands):
Instrument
Type of
Hedge
 
Aggregate
Notional
Amount
 
Start
Date
 
End
Date
 
$/Peso
 
Fair
Value
 
Balance Sheet
Location
FX Contract
Cash Flow
 
$
16,480

 
Jan 2016
 
Dec 2016
 
0.0584

 
$
(307
)
 
Accrued Expenses

Self-Insured Workers’ Compensation Prior to 2011, the Company was a member of a group self-insurance trust that provided workers’ compensation benefits to employees of the Company in Western New York (the “Trust”). Prior to being acquired by Greatbatch, Lake Region Medical self-insured the workers’ compensation benefits provided to its employees. As of January 1, 2016, the Company utilized a traditional insurance provider for workers’ compensation coverage for all associates. During 2015, the Company received an additional assessment from the Trust of $0.9 million. As of January 1, 2016 and January 2, 2015, the Company had $3.9 million and $0.0 million, respectively, accrued for workers’ compensation claims. This accrual is recorded in Accrued Expenses in the Consolidated Balance Sheet and is primarily based upon claim history and assessments received.
Earnings (Loss) Per Share
EARNINGS (LOSS) PER SHARE
16.
 
EARNINGS (LOSS) PER SHARE

The following table illustrates the calculation of Basic and Diluted EPS (in thousands, except per share amounts):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Numerator for basic EPS:
 
 
 
 
 
Net income (loss)
$
(7,594
)
 
$
55,458

 
$
36,267

Denominator for basic EPS:
 
 
 
 
 
Weighted average shares outstanding
26,363

 
24,825

 
23,991

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

 
1,150

 
1,332

Denominator for diluted EPS
26,363

 
25,975

 
25,323

Basic EPS
$
(0.29
)
 
$
2.23

 
$
1.51

Diluted EPS
$
(0.29
)
 
$
2.14

 
$
1.43


The diluted weighted average share calculations do not include the following securities, which are not dilutive to the EPS calculations or the performance criteria have not been met:
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Time-vested stock options, restricted stock and restricted stock units
1,718,135

 
175,549

 
18,480

Performance-vested stock options and restricted stock units
577,825

 

 


For the 2013 period, no shares related to CSN were included in the diluted EPS calculation as the average share price of the Company’s common stock for that period did not exceed CSN’s conversion price per share.
Accumulated Other Comprehensive Income
ACCUMULATED OTHER COMPREHENSIVE INCOME
17.
 
ACCUMULATED OTHER COMPREHENSIVE INCOME

Accumulated Other Comprehensive Income is comprised of the following (in thousands): 
 
Defined
Benefit
Plan
Liability
 
Cash
Flow
Hedges
 
Foreign
Currency
Translation
Adjustment
 
Total
Pre-Tax
Amount
 
Tax
 
Net-of-Tax
Amount
At January 2, 2015
$
(1,181
)
 
$
(2,558
)
 
$
11,450

 
$
7,711

 
$
1,412

 
$
9,123

Unrealized loss on cash flow hedges

 
(4,413
)
 

 
(4,413
)
 
1,545

 
(2,868
)
Realized loss on foreign currency hedges

 
1,948

 

 
1,948

 
(682
)
 
1,266

Realized loss on interest rate swap hedges

 
2,631

 

 
2,631

 
(921
)
 
1,710

Net defined benefit plan liability adjustments
2

 

 

 
2

 
(22
)
 
(20
)
Foreign currency translation loss

 

 
(7,841
)
 
(7,841
)
 

 
(7,841
)
At January 1, 2016
$
(1,179
)
 
$
(2,392
)
 
$
3,609

 
$
38

 
$
1,332

 
$
1,370


 
Defined
Benefit
Plan
Liability
 
Cash
Flow
Hedges
 
Foreign
Currency
Translation
Adjustment
 
Total
Pre-Tax
Amount
 
Tax
 
Net-of-Tax
Amount
At January 3, 2014
$
(672
)
 
$
(468
)
 
$
14,952

 
$
13,812

 
$
546

 
$
14,358

Unrealized loss on cash flow hedges

 
(2,372
)
 

 
(2,372
)
 
829

 
(1,543
)
Realized gain on foreign currency hedges

 
(168
)
 

 
(168
)
 
59

 
(109
)
Realized loss on interest rate swap hedges

 
450

 

 
450

 
(157
)
 
293

Net defined benefit plan liability adjustments
(509
)
 

 

 
(509
)
 
135

 
(374
)
Foreign currency translation loss

 

 
(3,502
)
 
(3,502
)
 

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

 
$
7,711

 
$
1,412

 
$
9,123


The realized loss (gain) relating to the Company’s foreign currency and interest rate swap hedges were reclassified from Accumulated Other Comprehensive Income and included in Cost of Sales and Interest Expense, respectively, in the Consolidated Statements of Operations. Refer to Note 10 “Benefit Plans” for details on the change in defined benefit plan liability adjustments.
Fair Value Measurements
FAIR VALUE MEASUREMENTS
18.
 
FAIR VALUE MEASUREMENTS
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Fair value measurement standards apply to certain financial assets and liabilities that are measured at fair value on a recurring basis (each reporting period). For the Company, these financial assets and liabilities include its derivative instruments. The Company does not have any nonfinancial assets or liabilities that are measured at fair value on a recurring basis.
Foreign Currency Contracts – The fair value of foreign currency contracts are determined through the use of cash flow models that utilize observable market data inputs to estimate fair value. These observable market data inputs include foreign exchange rate and credit spread curves. In addition to the above, the Company received fair value estimates from the foreign currency contract counterparty to verify the reasonableness of the Company’s estimates. The Company’s foreign currency contracts are categorized in Level 2 of the fair value hierarchy. The fair value of the Company’s foreign currency contracts will be realized as Cost of Sales as the inventory, which the contracts are hedging the cash flows to produce, is sold. Approximately $2.4 million is expected to be realized as additional Cost of Sales over the next twelve months.
Interest Rate Swaps – The fair value of the Company’s interest rate swaps outstanding at January 2, 2015 was determined through the use of a cash flow model that utilized observable market data inputs. These observable market data inputs included LIBOR, swap rates, and credit spread curves. In addition to the above, the Company received a fair value estimate from the interest rate swap counterparty to verify the reasonableness of the Company’s estimate. This fair value calculation was categorized in Level 2 of the fair value hierarchy.  
The following tables provide information regarding assets and liabilities recorded at fair value on a recurring basis (in thousands):
 
Fair Value Measurements Using
Description
At January 1, 2016
 
Quoted
Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Liabilities
 
 
 
 
 
 
 
Foreign currency contracts (Note 15)
$
307

 
$

 
$
307

 
$

 
Fair Value Measurements Using
Description
At January 2,
2015
 
Quoted
Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Liabilities
 
 
 
 
 
 
 
Foreign currency contracts
$
1,568

 
$

 
$
1,568

 
$

Interest rate swaps
990

 

 
990

 


Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Fair value standards also apply to certain assets and liabilities that are measured at fair value on a nonrecurring basis. The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short-term nature of these items. Refer to Note 9 “Debt” for further discussion regarding the fair value of the Company’s Senior Secured Credit Facilities and Senior Notes.
A summary of the valuation methodologies for assets and liabilities measured on a nonrecurring basis is as follows:
Cost and Equity Method Investments – The Company holds investments in equity and other securities that are accounted for as either cost or equity method investments, which are classified in Other Assets on the Consolidated Balance Sheets. The total carrying value of these investments is reviewed quarterly for changes in circumstance or the occurrence of events that suggest the Company’s investment may not be recoverable. The fair value of cost or equity method investments is not adjusted if there are no identified events or changes in circumstances that may have a material effect on the fair value of the investments. Gains and losses realized on cost and equity method investments are recorded in Other (Income) Expense, Net, unless separately stated. The aggregate recorded amount of cost and equity method investments at January 1, 2016 and January 2, 2015 was $20.6 million and $14.5 million, respectively. The Company’s equity method investment is in a Chinese venture capital fund focused on investing in life sciences companies. This fund accounts for its investments at fair value with the unrealized change in fair value of these investments recorded as income or loss to the fund in the period of change. As of January 1, 2016, the Company owned 6.7% of this fund.
During 2015, 2014 and 2013, the Company recognized impairment charges related to its cost method investments of $1.4 million, $0.0 million and $0.5 million, respectively. The fair value of these investments were determined by reference to recent sales data of similar shares to independent parties in an inactive market. This fair value calculation is categorized in Level 2 of the fair value hierarchy. During 2015, 2014, and 2013, the Company recognized a net gain (loss) on equity method investments of $4.7 million, $1.2 million, and $(0.2) million, respectively. During 2015, the Company recorded a gain and received a $3.6 million cash distribution from its equity method investment, which was classified as a cash flow from operating activities in the Consolidated Statement of Cash Flows as it represented a return on investment. During 2014, the Company sold one of its cost method investments, which resulted in a pre-tax gain of $3.2 million.
Long-Lived Assets – The Company reviews the carrying amount of its long-lived assets to be held and used for potential impairment whenever certain indicators are present as described in Note 1 “Summary of Significant Accounting Policies.” There were no impairment charges recorded during 2015 related to the Company’s long-lived assets. During 2014, the Company recorded a $0.4 million impairment charge related to its Orvin, Switzerland property held for sale. The fair value of these assets were determined based upon recent sales data of similar assets and discussions with potential buyers, and was categorized in Level 2 of the fair value hierarchy. During 2013, the Company wrote off $0.5 million of IPR&D allocated to its QiG segment as these projects were discontinued prior to reaching technological feasibility. Additionally, during 2013, the Company wrote off $0.9 million of inventory and technology related to Greatbatch Medical’s wireless sensing product line held for sale, as an agreement could not be reached with potential buyers. The above impairment charges were recorded in Other Operating Expenses, Net. Refer to Note 13 “Other Operating Expenses, Net” for further discussion.
The following table provides information regarding assets and liabilities recorded at fair value on a nonrecurring basis as of January 1, 2016 and January 2, 2015 respectively (in thousands):
 
Fair Value Measurements Using
Description
At January 1, 2016
 
Quoted
Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets
 
 
 
 
 
 
 
Cost method investment
$
1,100

 
$

 
$
1,100

 
$


 
Fair Value Measurements Using
Description
At January 2, 2015
 
Quoted
Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets
 
 
 
 
 
 
 
Assets Held for Sale
$
1,635

 
$

 
$
1,635

 
$


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

On October 27, 2015, the Company acquired all of the outstanding common stock of Lake Region Medical. As a result, the Company now has three reportable segments: Greatbatch Medical, QiG and Lake Region Medical. In February 2016, Greatbatch announced that its Board of Directors approved the spin-off of a portion of its QiG segment through a tax-free distribution of its QiG Group LLC subsidiary to the stockholders of Greatbatch on a pro rata basis. The portion of the QiG segment being spun-off will consist of QiG Group LLC and its subsidiaries: (i) Algostim, (ii) PelviStim, and (iii) Greatbatch’s NeuroNexus subsidiary. It is expected that Greatbatch stockholders will receive one share of Nuvectra common stock for every three shares of Greatbatch common stock held as of the record date. Upon completion of the pending Spin-off, Nuvectra will be an independent, publicly-traded company and Greatbatch will not own any shares of Nuvectra common stock. The operations of CCC and certain other existing QiG research and development capabilities will be retained by Greatbatch and not included as part of the Spin-off. The Spin-off is expected to be completed in March 2016. As a result of the Lake Region Medical acquisition and pending Spin-off, the Company is reevaluating its operating and reporting segments, which is expected to be finalized in 2016 once the corporate and management reporting structure realignment is completed.
Greatbatch Medical designs and manufactures medical devices and components where Greatbatch either owns the intellectual property or has unique manufacturing and assembly expertise. Greatbatch Medical provides medical devices and components to the cardiac, neuromodulation, orthopaedics, portable medical, vascular and energy markets among others. Greatbatch Medical also offers value-added assembly and design engineering services for medical devices that utilize its component products.
The QiG segment focuses on the design and development of medical device systems and components. QiG is in the process of developing applications for its neurostimulation technology platform for emerging indications such as SCS, SNS, and DBS, among others. The QiG segment is comprised of the QiG Group, LLC, NeuroNexus, and CCC. QiG facilitates the development of medical device systems through the establishment of limited liability companies (“LLCs”). These LLCs do not own, but have the exclusive right to use the technology of Greatbatch in specific fields of use and have an exclusive manufacturing agreement with Greatbatch Medical. As of January 2, 2015, QiG Group LLC owned 89% of two LLCs, Algostim and PelviStim, but was responsible for 100% of the expenses incurred by these LLCs. However, no distributions were to be made to the minority holders of the LLCs until QiG was reimbursed for all expenses paid. Minority interests in these LLCs were held by key opinion leaders and clinicians. During 2015, the Company purchased the non-controlling interest in these LLCs for $16.7 million. Of this amount, $6.8 million remained payable as of January 1, 2016 and was recorded in Accrued Expenses in the Consolidated Balance Sheet. For purposes of the Consolidated Statement of Cash Flows for the year ended January 1, 2016, this liability was treated as a non-cash financing transaction. As of January 1, 2016, QiG Group LLC now owns 100% of Algostim and PelviStim.
The purchase of outstanding non-controlling interests included $6.9 million paid to Drees Holding LLC, of which Scott F. Drees, Chief Executive Officer (“CEO”) of Nuvectra, is the principal owner and the sole managing director. Mr. Drees received his interests in Algostim and PelviStim in connection with entering into a long-term consulting agreement with Nuvectra and prior to being appointed as its CEO in July 2015. Mr. Drees’ consulting agreement was terminated in connection with his agreeing to serve in the role of Nuvectra CEO.
Algostim is focused on the development and commercialization of its Algovita SCS system, the first application of QiG’s neurostimulation technology platform. Algovita is indicated for the treatment of chronic pain of the trunk and limbs. Algovita received CE Mark approval during 2014. During the fourth quarter of 2015, QiG received final approval of its PMA application for Algovita, which it anticipates launching commercially in the United States during the first half of 2016.
QiG revenue includes sales of neural interface technology, components and systems to the neuroscience and clinical markets from NeuroNexus, a limited release of Algovita in Europe, and CCC sales of various medical device products such as implantable pulse generators, programmer systems, battery chargers, patient wands and leads to medical device companies. Once the medical devices developed by CCC reach significant production levels, the responsibility for manufacturing these products may be transferred to Greatbatch Medical. After the pending Spin-off is completed, the Company’s design and development of complete medical device systems will be completed by the combined teams in Greatbatch Medical, Lake Region Medical, and CCC. 
Lake Region Medical has operated as a segment for Greatbatch since it was acquired during the fourth quarter of 2015. This segment specializes in the design, development, and manufacturing of products across the medical component and device spectrum, primarily serving the cardio, vascular and advanced surgical markets. Lake Region Medical offers fully integrated outsourced manufacturing, regulatory and engineering services, contract manufacturing, finished device assembly services, original device development, and supply chain management to its customers, who are located worldwide.
As a result of the Lake Region Medical acquisition and pending Spin-off, the Company has recast its product line sales to reflect the reclassification of Greatbatch, Inc. and Lake Region net sales from the historical product lines to the product lines associated with those revenues that will be utilized for future revenue reporting.
As of January 1, 2016, the Company’s product lines consist of the following:
Advanced Surgical, Orthopaedics, and Portable Medical: Includes legacy Greatbatch Orthopaedics and Portable Medical product line sales plus the legacy Lake Region Medical Advanced Surgical product line sales. Products include components, sub-assemblies, finished devices, implants, instruments and delivery systems for a range of surgical technologies to the advanced surgical market, including laparoscopy, orthopaedics and general surgery, biopsy and drug delivery, joint preservation and reconstruction, arthroscopy, and engineered tubing solutions. Products also include life-saving and life-enhancing applications comprising of automated external defibrillators, portable oxygen concentrators, ventilators, and powered surgical tools for the portable medical markets.
Cardio and Vascular: Includes the legacy Greatbatch Vascular product line sales plus the legacy Lake Region Medical Cardio and Vascular product line sales less the legacy Lake Region Medical Cardiac/Neuromodulation sales. Products include introducers, steerable sheaths, guidewires, catheters, and stimulation therapy components, subassemblies and finished devices that deliver therapies for various markets such as coronary and neurovascular disease, peripheral vascular disease, interventional radiology, vascular access, atrial fibrillation, and interventional cardiology, plus products for medical imaging and pharmaceutical delivery.
Cardiac/Neuromodulation: Includes the legacy Greatbatch Cardiac/Neuromodulation and QiG sales plus the legacy Lake Region Medical Cardiac/Neuromodulation sales previously included in their Cardio and Vascular product line sales. Products include batteries, capacitors, filtered and unfiltered feed-throughs, engineered components, implantable stimulation leads, and enclosures used in implantable medical devices.
Electrochem: Includes the legacy Greatbatch Energy, Military and Environmental product line sales. Products include primary and rechargeable batteries and battery packs for demanding applications such as down hole drilling tools.
An analysis and reconciliation of the Company’s business segments, product lines and geographic information to the respective information in the Consolidated Financial Statements follows. Intersegment sales between Greatbatch Medical and QiG were not material for 2014 or 2013. Approximately $1.8 million of intersegment sales are included in Greatbatch Medical and $1.2 million intersegment sales are included in Lake Region Medical. Sales by geographic area are presented by allocating sales from external customers based on where the products are shipped (in thousands): 
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Product line sales:
 
 
 
 
 
Advanced Surgical, Orthopaedics, and Portable Medical
$
243,385

 
$
216,339

 
$
208,990

Cardio and Vascular
143,260

 
58,770

 
48,357

Cardiac/Neuromodulation
356,064

 
330,921

 
328,455

Electrochem
59,449

 
81,757

 
78,143

Elimination of interproduct line sales
(1,744
)
 

 

Total sales
$
800,414

 
$
687,787

 
$
663,945


 
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Business segment sales:
 
 
 
 
 
Greatbatch Medical
$
649,977

 
$
678,285

 
$
660,902

QiG
13,571

 
9,502

 
3,043

Lake Region Medical
139,819

 

 

Elimination of intersegment sales
(2,953
)
 

 

Total sales
$
800,414

 
$
687,787

 
$
663,945


  
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Segment income (loss) from operations:
 
 
 
 
 
Greatbatch Medical
$
109,737

 
$
126,312

 
$
111,805

QiG
(25,855
)
 
(23,256
)
 
(30,484
)
Lake Region Medical
(16,416
)
 

 

Total segment income from operations
67,466

 
103,056

 
81,321

Unallocated operating expenses
(54,320
)
 
(27,402
)
 
(19,982
)
Operating income
13,146

 
75,654

 
61,339

Unallocated other income (expense), net
(28,846
)
 
925

 
(12,501
)
Income (loss) before provision for income taxes
$
(15,700
)
 
$
76,579

 
$
48,838



 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Depreciation and amortization:
 
 
 
 
 
Greatbatch Medical
$
30,160

 
$
31,906

 
$
31,112

QiG
1,862

 
2,101

 
1,539

Lake Region Medical
32,249

 

 

Total depreciation and amortization included in segment income from operations
64,271

 
34,007

 
32,651

Unallocated depreciation and amortization
3,347

 
3,450

 
3,315

Total depreciation and amortization
$
67,618

 
$
37,457

 
$
35,966




 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Expenditures for tangible long-lived assets, excluding acquisitions:
 
 
 
 
 
Greatbatch Medical
$
32,921

 
$
19,006

 
$
13,242

QiG
1,160

 
1,453

 
2,134

Lake Region Medical
7,525

 

 

Total reportable segments
41,606

 
20,459

 
15,376

Unallocated long-lived tangible assets
6,448

 
5,187

 
2,798

Total expenditures
$
48,054

 
$
25,646

 
$
18,174



 
At
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Identifiable assets:
 
 
 
 
 
Greatbatch Medical
$
798,609

 
$
761,225

 
$
758,369

QiG
68,637

 
76,529

 
56,245

Lake Region Medical
1,971,071

 

 

Total reportable segments
2,838,317

 
837,754

 
814,614

Unallocated assets
143,819

 
117,368

 
75,015

Total assets
$
2,982,136

 
$
955,122

 
$
889,629


 
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Sales by geographic area:
 
 
 
 
 
United States
$
401,380

 
$
312,539

 
$
325,090

Non-Domestic locations:
 
 
 
 
 
Puerto Rico
136,898

 
127,702

 
117,961

Belgium
62,546

 
65,308

 
67,155

Rest of world
199,590

 
182,238

 
153,739

Total sales
$
800,414

 
$
687,787

 
$
663,945

 
 
At
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Long-lived tangible assets:
 
 
 
 
 
United States
$
264,556

 
$
113,851

 
$
116,484

Rest of world
114,936

 
31,074

 
29,289

Total
$
379,492

 
$
144,925

 
$
145,773


A significant portion of the Company’s sales and accounts receivable were to four customers as follows: 
 
Sales
 
Accounts Receivable
 
Year Ended
 
At
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
 
January 1,
2016
 
January 2,
2015
Customer A
18
%
 
18
%
 
16
%
 
23
%
 
23
%
Customer B
17
%
 
18
%
 
20
%
 
8
%
 
4
%
Customer C
12
%
 
12
%
 
13
%
 
6
%
 
8
%
Customer D
5
%
 
6
%
 
7
%
 
7
%
 
12
%
 
52
%
 
54
%
 
56
%
 
44
%
 
47
%
Quarterly Sales and Earnings Data - Unaudited
QUARTERLY SALES AND EARNINGS DATA - UNAUDITED
20.
 
QUARTERLY SALES AND EARNINGS DATA—UNAUDITED

 
4th Qtr.
 
3rd Qtr.
 
2nd Qtr.
 
1st Qtr.
 
(in thousands, except per share data)
2015
 
 
 
 
 
 
 
Sales
$
317,567

 
$
146,637

 
$
174,890

 
$
161,320

Gross profit
73,140

 
51,646

 
57,951

 
52,398

Net income (loss)
(24,907
)
 
22

 
9,283

 
8,008

EPS—basic
(0.85
)
 

 
0.36

 
0.32

EPS—diluted
(0.85
)
 

 
0.35

 
0.31

 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
Sales
$
169,726

 
$
171,699

 
$
172,081

 
$
174,281

Gross profit
57,214

 
58,118

 
58,470

 
57,596

Net income
14,176

 
14,012

 
12,348

 
14,922

EPS—basic
0.57

 
0.56

 
0.50

 
0.61

EPS—diluted
0.54

 
0.54

 
0.48

 
0.58


Net income (loss) in the third and fourth quarters of 2015 include $13.0 million and $57.1 million, respectively, of charges incurred in connection with the Lake Region Medical acquisition (transaction and integration, inventory step-up amortization, debt related charges) and Spin-off of Nuvectra (professional and consulting fees). Sales for the fourth quarter of 2015 include $138.6 million from the acquisition of Lake Region Medical. Refer to Note 2 “Acquisitions.”
Valuation and Qualifying Accounts
Schedule of Valuation and Qualifying Accounts Disclosure
Schedule II—Valuation and Qualifying Accounts 
 
 
 
Col. C—Additions
 
 
 
 
 
 
 
Col. A
Description
Col. B Balance at Beginning
of Period
 
Charged to Costs &
Expenses
 
Charged to Other Accounts- Describe
 
 
 
Col. D Deductions
- Describe
 
 
Col. E Balance at End of
Period
January 1, 2016
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
$
1,411

 
$
(70
)
 
$
459

 
(3)(4) 
 
$
(846
)
(2) 
 
$
954

Valuation allowance for deferred income tax assets
$
10,709

 
$
788

(1) 
$
27,836

 
(3)(4) 
 
$
(162
)
(5) 
 
$
39,171

January 2, 2015
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
$
2,001

 
$
98

 
$
14

 
(3)(4) 
 
$
(702
)
(2) 
 
$
1,411

Valuation allowance for deferred income tax assets
$
11,661

 
$
(729
)
(1) 
$

 
(4) 
 
$
(223
)
(1)(5) 
 
$
10,709

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

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

Valuation allowance for deferred income tax assets
$
12,768

 
$
(1,263
)
(1) 
$
32

 
(4) 
 
$
124

(1) 
 
$
11,661

(1) 
Valuation allowance recorded in the provision for income taxes for certain net operating losses and tax credits. The net decrease in allowance in 2014 and 2013 primarily relates to the use of net operating loss carryforwards.
(2) 
Accounts written off.
(3) 
Balance recorded as a part of our 2015 acquisition of Lake Region Medical and our 2014 acquisition of Centro de Construcción de Cardioestimuladores del Uruguay.
(4) 
Includes foreign currency translation effect.
(5) 
Primarily relates to return to provision adjustments for prior years.
Summary of Significant Accounting Policies (Policies)
Principles of Consolidation – The consolidated financial statements include the accounts of Greatbatch, Inc. and its wholly owned subsidiaries (collectively, the “Company” or “Greatbatch”). All intercompany balances and transactions have been eliminated in consolidation.
Fiscal Year End – The Company utilizes a fifty-two, fifty-three week fiscal year ending on the Friday nearest December 31. Fiscal years 2015, 2014 and 2013 ended on January 1, 2016January 2, 2015 and January 3, 2014. Fiscal years 2015 and 2014 each contained fifty-two weeks, while fiscal year 2013 contained fifty-three weeks.
Fair Value Measurements – Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the “exit price”) in an orderly transaction between market participants at the measurement date. Accounting Standards Codification (“ASC”) 820, Fair Value Measurements, establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:
Level 1 – Valuation is based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Level 1 valuations do not entail a significant degree of judgment.
Level 2 – Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market.
Level 3 – Valuation is based on unobservable inputs that are significant to the overall fair value measurement. The degree of judgment in determining fair value is greatest for Level 3 valuations.
The availability of observable inputs can vary and is affected by a wide variety of factors, including, the type of asset/liability, whether the asset/liability is established in the marketplace, and other characteristics particular to the valuation. To the extent that a valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, assumptions are required to reflect those that market participants would use in pricing the asset or liability at the measurement date. Note 18 “Fair Value Measurements” contains additional information on assets and liabilities recorded at fair value in the consolidated financial statements.
Cash and Cash Equivalents – Cash and cash equivalents consist of cash and highly liquid, short-term investments with maturities at the time of purchase of three months or less. The carrying amount of cash and cash equivalents approximated their fair value as of January 1, 2016 and January 2, 2015 based upon the short-term nature of these instruments.
Concentration of Credit Risk – Financial instruments that potentially subject the Company to concentration of credit risk consist principally of accounts receivable. A significant portion of the Company’s sales and/or accounts receivable are to four customers, all in the medical device industry, and, as such, the Company is directly affected by the condition of those customers and that industry. However, the credit risk associated with trade receivables is partially mitigated due to the stability of those customers. The Company performs on-going credit evaluations of its customers. Note 19 “Business Segment, Geographic and Concentration Risk Information” contains information on sales and accounts receivable for these customers. The Company maintains cash deposits with major banks, which from time to time may exceed insured limits. The Company performs on-going credit evaluations of its banks.
Allowance for Doubtful Accounts – The Company provides credit, in the normal course of business, to its customers in the form of trade receivables. Credit is extended based on evaluation of a customer’s financial condition and collateral is not required. The Company maintains an allowance for those customer receivables that it does not expect to collect. The Company accrues its estimated losses from uncollectable accounts receivable to the allowance based upon recent historical experience, the length of time the receivable has been outstanding and other specific information as it becomes available. Provisions to the allowance for doubtful accounts are charged to current operating expenses. Actual losses are charged against this allowance when incurred. The carrying amount of trade receivables approximated their fair value as of January 1, 2016 and January 2, 2015 based upon the short-term nature of these assets.
Inventories – Inventories are stated at the lower of cost, determined using the first-in first-out method, or market. Write-downs for excess, obsolete or expired inventory are based primarily on how long the inventory has been held as well as estimates of forecasted net sales of that product. A significant change in the timing or level of demand for products may result in recording additional write-downs for excess, obsolete or expired inventory in the future. Note 4 “Inventories” contains additional information on the Company’s inventory.
Property, Plant and Equipment (“PP&E”) – PP&E is carried at cost less accumulated depreciation. Depreciation is computed by the straight-line method over the estimated useful lives of the assets, as follows: buildings and building improvements 7-40 years; machinery and equipment 3-10 years; office equipment 3-10 years; and leasehold improvements over the remaining lives of the improvements or the lease term, if less. The cost of repairs and maintenance are expensed as incurred; renewals and betterments are capitalized. Upon retirement or sale of an asset, its cost and related accumulated depreciation or amortization is removed from the accounts and any gain or loss is recorded in operating income or expense. Note 6 “Property, Plant and Equipment, Net” contains additional information on the Company’s PP&E.
Business Combinations – The Company records its business combinations under the acquisition method of accounting. Under the acquisition method of accounting, the Company allocates the purchase price of each acquisition to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values at the date of acquisition. The fair value of identifiable intangible assets is based upon detailed valuations that use various assumptions made by management. Any excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired is allocated to goodwill. All direct acquisition-related costs are expensed as incurred.
In circumstances where an acquisition involves a contingent consideration arrangement, the Company recognizes a liability equal to the fair value of the contingent payments it expects to make as of the acquisition date. The Company re-measures this liability each reporting period and records changes in the fair value through Other Operating Expenses, Net. Increases or decreases in the fair value of the contingent consideration liability can result from changes in discount periods and rates, as well as changes in the timing, amount of, or the likelihood of achieving the applicable contingent consideration.
Amortizing Intangible Assets – Amortizing intangible assets consists primarily of purchased technology and patents, and customer lists. The Company amortizes its definite-lived intangible assets over their estimated useful lives utilizing an accelerated or straight-line method of amortization, which approximates the projected cash flows used to fair value those intangible assets at the time of acquisition. When the straight-line method of amortization is utilized, the estimated useful life of the intangible asset is shortened to assure that recognition of amortization expense corresponds with the expected cash flows. The amortization period for the Company’s amortizing intangible assets are as follows: purchased technology and patents 5-15 years; customer lists 7-20 years and other intangible assets 1-10 years. Refer to Note 7 “Intangible Assets” for additional information on the Company’s amortizing intangible assets.
Impairment of Long-Lived Assets – The Company assesses the impairment of definite-lived long-lived assets or asset groups when events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that are considered in deciding when to perform an impairment review include: a significant decrease in the market price of the asset or asset group; a significant change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition; a significant change in legal factors or in the business climate that could affect the value of a long-lived asset or asset group, including an action or assessment by a regulator; an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction; a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group; or a current expectation that, more likely than not, a long-lived asset or asset group will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The term more likely than not refers to a level of likelihood that is more than 50 percent.
Potential recoverability is measured by comparing the carrying amount of the asset or asset group to its related total future undiscounted cash flows. If the carrying value is not recoverable, the asset or asset group is considered to be impaired. Impairment is measured by comparing the asset or asset group’s carrying amount to its fair value. When it is determined that useful lives of assets are shorter than originally estimated, and no impairment is present, the rate of depreciation is accelerated in order to fully depreciate the assets over their new shorter useful lives.
Goodwill and other indefinite lived intangible assets recorded are not amortized but are periodically tested for impairment. The Company assesses goodwill for impairment on the last day of each fiscal year, or more frequently if certain events occur as described above. Goodwill is evaluated for impairment through the comparison of the fair value of the reporting units to their carrying values. When evaluating goodwill for impairment, the Company may first perform an assessment of qualitative factors to determine if the fair value of the reporting unit is more-likely-than-not greater than its carrying amount. This qualitative assessment is referred to as a “step zero approach. If, based on the review of the qualitative factors, the Company determines it is more-likely-than-not that the fair value of the reporting unit is greater than its carrying value, the required two-step impairment test can be bypassed. If the Company does not perform a step zero assessment or if the fair value of the reporting unit is more-likely-than-not less than its carrying value, the Company must perform a two-step impairment test, and calculate the estimated fair value of the reporting unit. If, based upon the two-step impairment test, it is determined that the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of the goodwill within the reporting unit is less than its carrying value. Under the two-step approach, fair values for reporting units are determined based on discounted cash flows and market multiples.
The Company completed its annual goodwill impairment assessment for 2015 by performing a step zero qualitative analysis. As part of this analysis, the Company evaluated factors including, but not limited to, macro-economic conditions, market and industry conditions, cost factors, competitive environment, share price fluctuations, results of the last impairment test, and the operational stability and the overall financial performance of the reporting units. After completing the analysis, the Company determined that it was more likely than not that its reporting units fair values are greater than the reporting units carrying values and the two-step impairment test is not necessary.
Other indefinite lived intangible assets are assessed for impairment on the last day of each fiscal year, or more frequently if certain events occur as described above, by comparing the fair value of the intangible asset to its carrying value. The fair value is determined by using the income approach. Note 7 “Intangible Assets” contains additional information on the Company’s long-lived intangible assets.
Debt Issuance Costs and Discounts – In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” This ASU requires that debt issuance costs be presented as a direct reduction to the carrying amount of the related debt in the balance sheet rather than as a deferred charge, consistent with the presentation of discounts on debt. ASU 2015-15, “Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements,” was issued in August 2015 to clarify that the U.S. Securities and Exchange Commission (“SEC”) staff would not object to an entity deferring and presenting debt issuance costs related to a line-of-credit arrangement as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement.
As permitted, during the fourth quarter of 2015, the Company elected to early adopt these ASUs and has elected to retrospectively apply this guidance. As a result, the Company has classified $35.9 million and $0.9 million as of January 1, 2016 and January 2, 2015, respectively, of deferred debt issuance costs associated with its term-debt from Other Assets to Long-Term Debt in the Consolidated Balance Sheets. Deferred debt issuance costs associated with the Company’s revolving credit facility of $4.8 million and $2.2 million as of January 1, 2016 and January 2, 2015, respectively, are classified within Other Assets.
Debt issuance costs incurred in connection with the Company’s issuance of its revolving credit facility are amortized to Interest Expense on a straight-line basis over the contractual term of the credit facility. Unamortized debt issuance costs and unamortized debt discounts related to the Company’s term-debt are recorded as a reduction of the carrying value of the related debt. These debt issuance costs and discounts are amortized to Interest Expense using the effective interest method over the period from the date of issuance to the put option date (if applicable) or the maturity date, whichever is earlier. The amortization of debt issuance costs and discounts are included in Debt Related Amortization Included in Interest Expense in the Consolidated Statements of Cash Flows. Note 9 “Debt” contains additional information on the Company’s debt issuance costs and discounts.
Other Long-Term Assets – Other long-term assets also include investments in equity securities of entities that are not publicly traded and which do not have readily determinable fair values. The Company accounts for investments in these entities under the cost or equity method depending on the type of ownership interest, as well as the Company’s ability to exercise influence over these entities. Equity method investments are initially recorded at cost, and are subsequently adjusted to reflect the Company’s share of earnings or losses of the investee. Cost method investments are recorded at historical cost. Each reporting period, management evaluates these cost and equity method investments to determine if there are any events or circumstances that are likely to have a significant effect on the fair value of the investment. Examples of such impairment indicators include, but are not limited to: a recent sale or offering of similar shares of the investment at a price below the Company’s cost basis; a significant deterioration in earnings performance; a significant change in the regulatory, economic or technological environment of the investee; or a significant doubt about an investee’s ability to continue as a going concern. If an impairment indicator is identified, management will estimate the fair value of the investment and compare it to its carrying value. The estimation of fair value considers all available financial information related to the investee, including, but not limited to, valuations based on recent third-party equity investments in the investee. If the fair value of the investment is less than its carrying value, the investment is impaired and a determination as to whether the impairment is other-than-temporary is made. Impairment is deemed to be other-than-temporary unless the Company has the ability and intent to hold the investment for a period sufficient for a market recovery up to the carrying value of the investment. Further, evidence must indicate that the carrying value of the investment is recoverable within a reasonable period. For other-than-temporary impairments, an impairment loss is recognized equal to the difference between the investment’s carrying value and its fair value. The Company has determined that these investments are not considered variable interest entities. The Company’s exposure related to these entities is limited to its recorded investment. These investments are in start-up research and development companies whose fair value is highly subjective in nature and subject to future fluctuations, which could be significant.
Income Taxes – The consolidated financial statements of the Company have been prepared using the asset and liability approach in accounting for income taxes, which requires the recognition of deferred income taxes for the expected future tax consequences of net operating losses, credits, and temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided on deferred tax assets if it is determined, within each taxing jurisdiction, that it is more likely than not that the asset will not be realized.
The Company accounts for uncertain tax positions using a more likely than not recognition threshold. The evaluation of uncertain tax positions is based on factors including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. These tax positions are evaluated on a quarterly basis. The Company recognizes interest expense related to uncertain tax positions as Provision for Income Taxes. Penalties, if incurred, are recognized as a component of Selling, General and Administrative Expenses (“SG&A”).
The Company and its subsidiaries file a consolidated U.S. federal income tax return. State tax returns are filed on a combined or separate basis depending on the applicable laws in the jurisdictions where the tax returns are filed. The Company also files foreign tax returns on a separate company basis in the countries in which it operates.
In November 2015, the FASB issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes.” This ASU requires entities that present a classified balance sheet to classify all deferred income taxes as noncurrent assets or noncurrent liabilities. Previous accounting principles required an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified balance sheet. As permitted, during the fourth quarter of 2015, the Company elected to early adopt this ASU and has elected to prospectively apply its guidance. As a result, all deferred tax assets or liabilities shown in the Consolidated Balance Sheet as of January 1, 2016, are classified as noncurrent. Prior periods were not retrospectively adjusted for the adoption of this ASU. See Note 14 “Income Taxes” for additional information.
Convertible Subordinated Notes (“CSN”) – For convertible debt instruments that may be settled in cash upon conversion, the Company accounts for the liability and equity components of those instruments in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. 
Upon issuance, the Company determined the carrying amount of the liability component of CSN by measuring the fair value of a similar liability that does not have the associated conversion option. The carrying amount of the conversion option was then determined by deducting the fair value of the liability component from the initial proceeds received from the issuance of CSN. The carrying amount of the conversion option was recorded in Additional Paid-In Capital with an offset to Long-Term Debt and was amortized using the effective interest method over the period from the date of issuance to the maturity date. The amortization of discount related to the Company’s convertible debt instruments is included in Debt Related Amortization Included in Interest Expense in the Consolidated Statements of Cash Flows. See Note 9 “Debt” for additional information.
Derivative Financial Instruments – The Company recognizes all derivative financial instruments in its consolidated financial statements at fair value. Changes in the fair value of derivative instruments are recorded in earnings unless hedge accounting criteria are met. The Company designated its interest rate swaps (See Note 9 “Debt”) and foreign currency contracts (See Note 15 “Commitments and Contingencies”) entered into as cash flow hedges. The effective portion of the changes in fair value of these cash flow hedges is recorded each period, net of tax, in Accumulated Other Comprehensive Income until the related hedged transaction occurs. Any ineffective portion of the changes in fair value of these cash flow hedges is recorded in earnings. In the event the hedged cash flow for forecasted transactions does not occur, or it becomes probable that they will not occur, the Company reclassifies the amount of any gain or loss on the related cash flow hedge to income (expense) at that time. Cash flows related to these derivative financial instruments are included in cash flows from operating activities. The cash flows from the termination of interest rate swap agreements are reported as operating activities in the consolidated statements of cash flows.
Revenue Recognition – The Company recognizes revenue when it is realized or realizable and earned. This occurs when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable (including any price concessions under long-term agreements), the buyer is obligated to pay us (i.e., not contingent on a future event), the risk of loss is transferred, there is no obligation of future performance, collectability is reasonably assured and the amount of future returns can reasonably be estimated. With regards to the Company’s customers (including distributors), those criteria are met when title passes, generally at the point of shipment. Currently, the revenue recognition policy is the same for Greatbatch Medical, Lake Region Medical and QiG. In general, for customers with long-term contracts, we have negotiated fixed pricing arrangements. During new contract negotiations, price level decreases (concessions) for future sales may be offered to customers in exchange for volume and/or long-term commitments. Once the new contracts are signed, these prices are fixed and determinable for all future sales. The Company includes shipping and handling fees billed to customers in Sales. Shipping and handling costs associated with inbound and outbound freight are recorded in Cost of Sales. Taxes collected from customers relating to product sales and remitted to governmental authorities are accounted for on a net basis. Accordingly, such taxes are excluded from Sales and Cost of Sales. In certain instances the Company obtains component parts from its customers that are included in the final product sold back to the same customer. These amounts are excluded from Sales and Cost of Sales recognized by the Company.
Environmental Costs – Environmental expenditures that relate to an existing condition caused by past operations and that do not provide future benefits are expensed as incurred. Liabilities are recorded when environmental assessments are made, the requirement for remedial efforts is probable and the amount of the liability can be reasonably estimated. Liabilities are recorded generally no later than the completion of feasibility studies. The Company has an ongoing monitoring and identification process to assess how the activities, with respect to known exposures, are progressing against the recorded liabilities, as well as to identify other potential remediation sites that are presently unknown.
Restructuring The Company continually evaluates alternatives to align the business with the changing needs of its customers and to lower operating costs. This includes the realignment of its existing manufacturing capacity, facility closures, or similar actions, either in the normal course of business or pursuant to significant restructuring programs. These actions may result in employees receiving voluntary or involuntary employee termination benefits, which may be pursuant to contractual agreements. Voluntary termination benefits are accrued when an employee accepts the related offer. Involuntary termination benefits are accrued upon the commitment to a termination plan and the benefit arrangement is communicated to affected employees, or when liabilities are determined to be probable and estimable, depending on the existence of a substantive plan for severance or termination. All other exit costs are expensed as incurred. Refer to Note 13 “Other Operating Expenses, Net” for additional information.
Product Warranties – The Company allows customers to return defective or damaged products for credit, replacement, or exchange. The Company warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. The Company accrues its estimated exposure to warranty claims, through Cost of Sales, based upon recent historical experience and other specific information as it becomes available. Note 15 “Commitments and Contingencies” contains additional information on the Company’s product warranties.
Research, Development and Engineering Costs, Net (“RD&E”) – RD&E costs are expensed as incurred. The primary costs are salary and benefits for personnel, material costs used in development projects and subcontracting costs. Cost reimbursements for certain engineering services from customers for whom the Company designs products are recorded as an offset to engineering costs upon achieving development milestones specified in the contracts. These reimbursements do not cover the complete cost of the development projects. Additionally, the technology developed under these cost reimbursement projects is owned by the Company and is utilized for future products developed for other customers.
In-process research and development (“IPR&D”) represents research projects acquired in a business combination which are expected to generate cash flows but have not yet reached technological feasibility. The primary basis for determining the technological feasibility of these projects is whether or not regulatory approval has been obtained. The Company classifies IPR&D acquired in a business combination as an indefinite-lived intangible asset until the completion or abandonment of the associated projects. Upon completion, the Company determines the useful life of the IPR&D and begins amortizing the assets to reflect their use over their remaining lives. Upon permanent abandonment, the remaining carrying amount of the associated IPR&D is written-off. The Company tests the IPR&D acquired for impairment at least annually, and more frequently if events or changes in circumstances indicate that the assets may be impaired. The impairment test consists of a comparison of the fair value of the intangible assets with their carrying amount. If the carrying amount exceeds its fair value, the Company would record an impairment loss in an amount equal to the excess.
Stock-Based Compensation The Company records compensation costs related to stock-based awards granted to employees based upon their estimated fair value on the grant date. Compensation cost for service-based awards is recognized ratably over the applicable vesting period. Compensation cost for nonmarket-based performance awards is reassessed each period and recognized based upon the probability that the performance targets will be achieved. Compensation cost for market-based performance awards is expensed ratably over the applicable vesting period and is recognized each period whether the performance metrics are achieved or not.
The Company utilizes the Black-Scholes option pricing model to estimate the fair value of stock options granted. For service-based and nonmarket-based performance restricted stock and restricted stock unit awards, the fair market value of the award is determined based upon the closing value of the Company’s stock price on the grant date. For market-based performance restricted stock unit awards, the fair market value of the award is determined utilizing a Monte Carlo simulation model, which projects the value of the Company’s stock under numerous scenarios and determines the value of the award based upon the present value of those projected outcomes. 
The amount of stock-based compensation expense recognized is based on the portion of the awards that are ultimately expected to vest. The Company estimates pre-vesting forfeitures at the time of grant by analyzing historical data and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The total expense recognized over the vesting period will only be for those awards that ultimately vest, excluding market and nonmarket performance award considerations. Note 11 “Stock-Based Compensation” contains additional information on the Company’s stock-based compensation.
Foreign Currency Translation – The Company translates all assets and liabilities of its foreign subsidiaries, where the U.S. dollar is not the functional currency, at the period-end exchange rate and translates income and expenses at the average exchange rates in effect during the period. The net effect of this translation is recorded in the consolidated financial statements as Accumulated Other Comprehensive Income. Translation adjustments are not adjusted for income taxes as they relate to permanent investments in the Company’s foreign subsidiaries.
Defined Benefit Plans – The Company recognizes in its balance sheet as an asset or liability the overfunded or underfunded status of its defined benefit plans provided to its employees located in Mexico, Switzerland, France and Germany. This asset or liability is measured as the difference between the fair value of plan assets, if any, and the benefit obligation of those plans. For these plans, the benefit obligation is the projected benefit obligation, which is calculated based on actuarial computations of current and future benefits for employees. Actuarial gains or losses and prior service costs or credits that arise during the period, but are not included as components of net periodic benefit expense, are recognized as a component of Accumulated Other Comprehensive Income. Defined benefit expenses are charged to Cost of Sales, SG&A and RD&E expenses as applicable.
Earnings (Loss) Per Share (“EPS”) – Basic EPS is calculated by dividing Net Income (Loss) by the weighted average number of shares outstanding during the period. Diluted EPS is calculated by adjusting the weighted average number of shares outstanding for potential common shares if dilutive to the EPS calculation and consist of stock options, unvested restricted stock and restricted stock units and, if applicable, contingently convertible instruments such as convertible debt. Note 16 “Earnings (Loss) Per Share” contains additional information on the computation of the Company’s EPS.
Comprehensive Income (Loss) – The Company’s comprehensive income (loss) as reported in the Consolidated Statements of Operations and Comprehensive Income (Loss) includes net income (loss), foreign currency translation adjustments, the net change in cash flow hedges, and defined benefit plan liability adjustments. The Consolidated Statements of Operations and Comprehensive Income (Loss) and Note 17 “Accumulated Other Comprehensive Income” contains additional information on the computation of the Company’s comprehensive income (loss).
Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of sales and expenses during the reporting periods. Actual results could differ materially from those estimates.
Reclassifications Certain prior period amounts have been reclassified to conform to current year presentation. Refer to Note 19, “Business Segment, Geographic and Concentration Risk Information,” for a description of the changes made to the Company’s prior period product line sales classification to reflect the current year presentation. Additionally, during the current year the Company disclosed the Proceeds from Sale of Property, Plant and Equipment and Inventory Step-up amortization separately in the Consolidated Statements of Cash Flows as these amounts were more material for disclosure in the current year.
Recently Issued Accounting Pronouncements Not Yet Adopted – In the normal course of business, management evaluates all new accounting pronouncements issued by the FASB, SEC, Emerging Issues Task Force (“EITF”), or other authoritative accounting bodies to determine the potential impact they may have on the Company’s Consolidated Financial Statements. Based upon this review, except as noted below, management does not expect any of the recently issued accounting pronouncements, which have not already been adopted, to have a material impact on the Company’s Consolidated Financial Statements.
In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which requires companies to recognize all leases as assets and liabilities on the consolidated balance sheet. This ASU retains a distinction between finance leases and operating leases, and the classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the current accounting literature. The result of retaining a distinction between finance leases and operating leases is that under the lessee accounting model in Topic 842, the effect of leases in a consolidated statement of comprehensive income and a consolidated statement of cash flows is largely unchanged from previous GAAP.  The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted. The Company is currently evaluating the impact that the adoption of this ASU will have on its Consolidated Financial Statements.
In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This ASU requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; requires entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset and requires entities to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option. The new ASU is effective for public companies for fiscal years beginning after December 15, 2017. Early adoption of the own credit provision is permitted. The Company is currently evaluating the impact that the adoption of this ASU will have on its Consolidated Financial Statements.
In September 2015, the FASB issued ASU No. 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments,” which amends the guidance for measurement-period adjustments related to business combinations. The amended ASU requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustments are determined. The acquirer will be required to record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date and disclose what the amounts in the previous periods would have been if those changes were made as of the acquisition date. This ASU is effective for adjustments to provisional amounts that occur in annual periods and interim periods within those annual periods beginning after December 15, 2015. The Company is currently assessing the impact of adopting this ASU on its Consolidated Financial Statements.
In July 2015, the FASB issued ASU No. 2015-11, “Simplifying the Measurement of Inventory,” which simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU is effective for public business entities for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company is currently assessing the impact of adopting this ASU on its Consolidated Financial Statements.
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” The core principle behind ASU No. 2014-09 is that an entity should recognize revenue in an amount that reflects the consideration to which the entity expects to be entitled in exchange for delivering goods and services. This model involves a five-step process that includes identifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract and recognizing revenue when the entity satisfies the performance obligations. This ASU allows two methods of adoption; a full retrospective approach where historical financial information is presented in accordance with the new standard, and a modified retrospective approach where this ASU is applied to the most current period presented in the financial statements. In August 2015, the FASB issued ASU No 2015-14 “Revenue from Contracts with Customers: Deferral of the Effective Date,” which deferred the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, with earlier application permitted as of annual reporting periods beginning after December 15, 2016. The Company is currently assessing the financial impact of adopting ASU 2014-09 and the methods of adoption; however, given the scope of the new standard, the Company is currently unable to provide a reasonable estimate regarding the financial impact or which method of adoption will be elected.
In April 2014, the FASB issued ASU No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which amends the definition of a discontinued operation and requires entities to provide additional disclosures about disposal transactions that do not meet the discontinued operations criteria. The revised ASU changes how entities identify and disclose information about disposal transactions under U.S. GAAP. This ASU is effective prospectively for all disposals (except disposals classified as held for sale before the adoption date) or components initially classified as held for sale in periods beginning on or after December 15, 2014. This ASU is applicable for disposal transactions, if any, that the Company enters into after January 2, 2015. This ASU did not materially impact the Company’s Consolidated Financial Statements.
Acquisitions (Tables)
The following unaudited pro forma information presents the consolidated results of operations of the Company, Lake Region Medical, and CCC as if those acquisitions occurred as of the beginning of fiscal years 2014 (Lake Region Medical) and 2013 (CCC) (in thousands, except per share amounts): 
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Sales
$
1,445,689

 
$
1,441,782

 
$
677,657

Net income (loss)
2,405

 
(25,865
)
 
37,612

Earnings (loss) per share:
 
 
 
 
 
Basic
$
0.08

 
$
(0.87
)
 
$
1.57

Diluted
$
0.08

 
$
(0.87
)
 
$
1.49

The aggregate consideration paid by the Company to the stockholders of Lake Region Medical consisted of the following (in thousands):
Cash consideration paid to Lake Region Medical stockholders and equity award holders
 
$
478,490

Fair value of shares of Greatbatch common stock issued to Lake Region Medical stockholders
 
245,368

Fair value of replacement stock options attributable to pre-acquisition service
 
4,508

Total purchase consideration
 
$
728,366

The following table summarizes the preliminary allocation of Lake Region Medical purchase price to the assets acquired and liabilities assumed (in thousands):
Assets acquired
 
Current assets
$
269,815

Property, plant and equipment
216,473

Amortizing intangible assets
849,000

Indefinite-lived intangible assets
70,000

Goodwill
661,788

Other non-current assets
1,629

Total assets acquired
2,068,705

Liabilities assumed
 
Current liabilities
102,485

Debt assumed
1,044,675

Other long-term liabilities
193,179

Total liabilities assumed
1,340,339

Net assets acquired
$
728,366

The purchase price was allocated to intangible assets as follows (dollars in thousands):
Amortizing Intangible Assets
 
Fair Value Assigned
 
Weighted Average Amortization Period (Years)
 
Estimated Useful Life (Years)
 
Weighted Average Discount Rate
Technology
 
$
160,000

 
7
 
19
 
11.5%
Customer lists
 
689,000

 
14
 
29
 
11.5%
 
 
$
849,000

 
13
 
27
 
11.5%
Indefinite-lived Intangible Assets
 
 
 
 
 
 
 
 
Trademarks and tradenames
 
$
70,000

 
N/A
 
N/A
 
11.5%
The following table summarizes the allocation of the CCC purchase price to the assets acquired and liabilities assumed as of the acquisition date (in thousands):
Assets acquired
 
Current assets
$
10,670

Property, plant and equipment
1,131

Amortizing intangible assets
6,100

Goodwill
8,296

Total assets acquired
26,197

Liabilities assumed
 
Current liabilities
4,842

Deferred income taxes
1,590

Total liabilities assumed
6,432

Net assets acquired
$
19,765

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

 
10
 
18%
Customer lists
 
4,600

 
10
 
18%
Trademarks and tradenames
 
100

 
2
 
18%
 
 
$
6,100

 
10
 
18%
Supplemental Cash Flow Information (Tables)
Schedule of Cash Flow
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
(in thousands)
 
 
 
 
 
Noncash investing and financing activities:
 
 
 
 
 
Common stock contributed to 401(k) Plan
$
3,920

 
$
4,341

 
$
2,477

Property, plant and equipment purchases included in accounts payable
7,401

 
2,926

 
2,103

Common stock issued in connection with Lake Region Medical acquisition
245,368

 

 

Replacement stock options issued in connection with Lake Region Medical acquisition
4,508

 

 

Purchase of non-controlling interests in subsidiaries included in accrued expenses
6,818

 

 

Cash paid during the year for:
 
 
 
 
 
Interest
13,057

 
3,521

 
4,989

Income taxes
6,312

 
13,565

 
44,165

Acquisition of noncash assets
2,013,604

 
22,434

 

Liabilities assumed
1,340,339

 
6,432

 

Inventories (Tables)
Schedule of Inventory, Current
Inventories are comprised of the following (in thousands):
 
At
 
January 1,
2016
 
January 2,
2015
Raw materials
$
107,296

 
$
73,354

Work-in-process
93,729

 
38,930

Finished goods
51,141

 
16,958

Total
$
252,166

 
$
129,242

Assets Held For Sale (Tables)
Disclosure of Long Lived Assets Held-for-sale
Assets held for sale included in Prepaid Expenses and Other Current Assets, is comprised of the following (in thousands):
 
 
 
 
At
Asset
 
Business
Segment
 
January 1,
2016
 
January 2,
2015
Building and building improvements
 
Greatbatch Medical
 
$
996

 
$
1,635

Property, Plant and Equipment, Net (Tables)
Property, plant and equipment are comprised of the following (in thousands):
 
At
 
January 1,
2016
 
January 2,
2015
Manufacturing machinery and equipment
$
285,068

 
$
167,173

Buildings and building improvements
130,184

 
89,258

Information technology hardware and software
43,947

 
31,725

Leasehold improvements
36,745

 
31,170

Furniture and fixtures
16,243

 
14,045

Land and land improvements
21,774

 
10,816

Construction work in process
76,835

 
14,129

Other
852

 
629

 
611,648

 
358,945

Accumulated depreciation
(232,156
)
 
(214,020
)
Total
$
379,492

 
$
144,925

Depreciation expense for property, plant and equipment was as follows (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Depreciation expense
$
27,136

 
$
23,320

 
$
22,799

Intangible Assets (Tables)
Amortizing intangible assets, net are comprised of the following (in thousands):
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Foreign
Currency
Translation
 
Net
Carrying
Amount
At January 1, 2016
 
 
 
 
 
 
 
Purchased technology and patents
$
255,776

 
$
(83,708
)
 
1,444

 
$
173,512

Customer lists
761,857

 
(40,815
)
 
(986
)
 
720,056

Other
4,534

 
(4,946
)
 
821

 
409

Total amortizing intangible assets
$
1,022,167

 
$
(129,469
)
 
$
1,279

 
$
893,977

At January 2, 2015
 
 
 
 
 
 
 
Purchased technology and patents
$
95,776

 
$
(75,894
)
 
$
1,966

 
$
21,848

Customer lists
72,857

 
(31,460
)
 
1,374

 
42,771

Other
4,534

 
(4,619
)
 
803

 
718

Total amortizing intangible assets
$
173,167

 
$
(111,973
)
 
$
4,143

 
$
65,337

Aggregate intangible asset amortization expense is comprised of the following (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Cost of sales
$
7,403

 
$
6,201

 
$
6,822

SG&A
9,681

 
7,009

 
5,800

RD&E
412

 
667

 
545

Total intangible asset amortization expense
$
17,496

 
$
13,877

 
$
13,167

Estimated future intangible asset amortization expense based upon the current carrying value is as follows (in thousands):
 
Estimated
Amortization
Expense
2016
$
37,854

2017
43,991

2018
44,894

2019
44,960

2020
45,467

Thereafter
676,811

Total estimated amortization expense
$
893,977

The change in indefinite-lived intangible assets during 2015 is as follows (in thousands):
 
Trademarks
and
Tradenames
At January 2, 2015
$
20,288

Indefinite-lived intangible assets acquired
70,000

At January 1, 2016
$
90,288

The change in goodwill during 2015 is as follows (in thousands):
 
Greatbatch
Medical
 
QiG
 
Lake Region Medical
 
Total
At January 2, 2015
$
304,297

 
$
50,096

 
$

 
$
354,393

Goodwill acquired (Note 2)

 

 
661,788

 
661,788

Foreign currency translation
(368
)
 

 
(2,243
)
 
(2,611
)
At January 1, 2016
$
303,929

 
$
50,096

 
$
659,545

 
$
1,013,570

Accrued Expenses (Tables)
Schedule of Accrued Liabilities

Accrued expenses are comprised of the following (in thousands):
 
At
 
January 1,
2016
 
January 2,
2015
Salaries and benefits
$
37,579

 
$
20,770

Profit sharing and bonuses
6,781

 
18,524

Accrued interest
9,378

 
195

Purchase of non-controlling interest in subsidiaries
6,818

 

Severance and change in control payments
11,969

 
1,878

Warranty and customer rebates
7,205

 
660

Other
17,527

 
6,357

Total
$
97,257

 
$
48,384

Debt (Tables)
Long-term debt is comprised of the following (in thousands):
 
At
 
January 1,
2016
 
January 2,
2015
Senior secured term loan A
$
375,000

 
$

Senior secured term loan B
1,025,000

 

9.125% senior notes, due 2023
360,000

 

Variable rate term loan

 
187,500

Revolving line of credit

 

Less unamortized discount on term loan B and debt issuance costs
(45,947
)
 
(887
)
Total debt
1,714,053

 
186,613

Less current portion of long-term debt
29,000

 
11,250

Total long-term debt
$
1,685,053

 
$
175,363

Contractual maturities of the Company’s debt facilities for the next five years and thereafter, excluding any discounts or premiums, as of January 1, 2016 are as follows (in thousands):
2016
$
29,000

2017
31,344

2018
40,719

2019
47,750

2020
47,750

Thereafter
1,563,437

Total
$
1,760,000

The contractual interest and discount amortization for CSN were as follows (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Contractual interest
$

 
$

 
$
634

Discount amortization

 

 
5,368

The change in deferred debt issuance costs related to the Company’s revolving credit facilities is as follows (in thousands):
At January 3, 2014
$
2,786

Amortization during the period
(586
)
At January 2, 2015
2,200

Financing costs deferred
4,152

Write-off during the period
(907
)
Amortization during the period
(654
)
At January 1, 2016
$
4,791


The change in unamortized discount and debt issuance costs related to the Term Loan Facilities and Senior Notes is as follows (in thousands):
 
Debt Issuance Costs
 
Unamortized Discount on TLB Facility
 
Total
At January 3, 2014
$
1,074

 
$

 
$
1,074

Amortization during the period
(187
)
 

 
(187
)
At January 2, 2015
887

 

 
887

Financing costs incurred
41,781

 
10,250

 
52,031

Write-off during the period
(732
)
 

 
(732
)
Amortization during the period
(6,028
)
 
(211
)
 
(6,239
)
At January 1, 2016
$
35,908

 
$
10,039

 
$
45,947

Benefit Plans (Tables)
Information relating to the funding position of the Company’s defined benefit plans as of the plans measurement date of January 1, 2016 and January 2, 2015 were as follows (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
Change in projected benefit obligation:
 
 
 
Projected benefit obligation at beginning of year
$
2,843

 
$
2,422

Projected benefit obligation acquired
4,316

 

Service cost
439

 
203

Interest cost
165

 
75

Plan participants’ contribution
61

 
36

Actuarial loss
235

 
630

Benefits transferred in, net
258

 
155

Settlement/curtailment gain

 
(337
)
Foreign currency translation
(325
)
 
(341
)
Projected benefit obligation at end of year
7,992

 
2,843

Change in fair value of plan assets:
 
 
 
Fair value of plan assets at beginning of year
437

 
731

Employer contributions (refund)
69

 
(39
)
Plan participants’ contributions
61

 
36

Actual loss on plan assets
(39
)
 
(101
)
Benefits transferred in, net
362

 
198

Settlements

 
(337
)
Foreign currency translation
(19
)
 
(51
)
Fair value of plan assets at end of year
871

 
437

Projected benefit obligation in excess of plan assets at end of year
$
7,121

 
$
2,406

Defined benefit liability classified as other current liabilities
$
46

 
$
25

Defined benefit liability classified as long-term liabilities
$
7,075

 
$
2,381

Accumulated benefit obligation at end of year
$
6,299

 
$
1,938

Amounts recognized in Accumulated Other Comprehensive Income are as follows (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
Net loss occurring during the year
$
164

 
$
736

Amortization of losses
(156
)
 
(138
)
Prior service cost
(1
)
 
(2
)
Amortization of prior service cost
(9
)
 
(11
)
Foreign currency translation

 
(76
)
Pre-tax adjustment
(2
)
 
509

Taxes
22

 
(135
)
Net loss
$
20

 
$
374

The amortization of amounts in Accumulated Other Comprehensive Income expected to be recognized as components of net periodic benefit expense during 2016 are as follows (in thousands):
Amortization of net prior service cost
$
10

Amortization of net loss
172

Net pension cost is comprised of the following (in thousands):
 
Year Ended
 
January 1, 2016
 
January 2, 2015
Service cost
$
439

 
$
203

Interest cost
165

 
75

Settlements loss

 
105

Expected return on assets
(11
)
 
(3
)
Recognized net actuarial loss
164

 
45

Net pension cost
$
757

 
$
425

The weighted-average rates used in the actuarial valuations were as follows:
 
Projected Benefit Obligation
 
Net Pension Cost
 
January 1,
2016
 
January 2,
2015
 
2015
 
2014
 
2013
Discount rate
2.2
%
 
2.3
%
 
2.3
%
 
3.4
%
 
2.1
%
Salary growth
2.9
%
 
3.0
%
 
3.0
%
 
3.1
%
 
2.4
%
Expected rate of return on assets
2.0
%
 
2.3
%
 
2.3
%
 
2.5
%
 
%
Plan assets were comprised of the following (in thousands):
 
 
 
Fair Value Measurements Using
 
January 1, 2016
 
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Insurance contract
$
871

 
$

 
$
871

 
$

Total
$
871

 
$

 
$
871

 
$

 
 
 
Fair Value Measurements Using
 
January 2,
2015
 
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Insurance contract
$
437

 
$

 
$
437

 
$

Total
$
437

 
$

 
$
437

 
$

Estimated benefit payments over the next ten years are as follows (in thousands):
2016
$
166

2017
205

2018
225

2019
277

2020
265

2020-2024
1,619

Stock-Based Compensation (Tables)
The components and classification of stock-based compensation expense were as follows (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Stock options
$
2,708

 
$
2,523

 
$
3,490

Restricted stock and units
6,668

 
6,417

 
5,843

401(k) stock contribution

 
4,246

 
4,768

Total stock-based compensation expense
$
9,376

 
$
13,186

 
$
14,101

 
 
 
 
 
 
Cost of sales
$
795

 
$
3,530

 
$
3,864

Selling, general and administrative expenses
7,510

 
7,923

 
7,907

Research, development and engineering costs, net
982

 
1,440

 
1,194

Other operating expenses, net (Note 13)
89

 
293

 
1,136

Total stock-based compensation expense
$
9,376

 
$
13,186

 
$
14,101

The weighted-average fair value and assumptions used are as follows:
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Weighted average grant date fair value
$
12.18

 
$
16.43

 
$
8.38

Risk-free interest rate
1.55
%
 
1.73
%
 
0.73
%
Expected volatility
26
%
 
39
%
 
39
%
Expected life (in years)
4.7

 
5.3

 
5.3

Expected dividend yield
0
%
 
0
%
 
0
%
Annual prevesting forfeiture rate
9
%
 
9
%
 
9
%
The following table summarizes time and performance-vested stock option activity:
 
Number of
Stock
Options
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life
(In Years)
 
Aggregate
Intrinsic
Value
(In Millions)
Outstanding at December 28, 2012
2,060,772

 
$
23.18

 
 
 
 
Granted
372,676

 
23.33

 
 
 
 
Exercised
(551,092
)
 
23.24

 
 
 
 
Forfeited or expired
(88,686
)
 
28.05

 
 
 
 
Outstanding at January 3, 2014
1,793,670

 
22.96

 
 
 
 
Granted
183,571

 
43.84

 
 
 
 
Exercised
(353,625
)
 
23.41

 
 
 
 
Forfeited or expired
(33,279
)
 
27.82

 
 
 
 
Outstanding at January 2, 2015
1,590,337

 
25.17

 
 
 
 
Granted
301,547

 
49.20

 
 
 
 
Replacement options granted in connection with the Lake Region Medical acquisition
119,900

 
12.41

 
 
 
 
Exercised
(280,701
)
 
23.45

 
 
 
 
Forfeited or expired
(52,183
)
 
42.45

 
 
 
 
Outstanding at January 1, 2016
1,678,900

 
$
28.32

 
6.1
 
$
40.6

Expected to vest at January 1, 2016
1,643,386

 
$
27.90

 
6.1
 
$
40.4

Exercisable at January 1, 2016
1,467,256

 
$
25.50

 
5.8
 
$
39.6

The following table provides certain information relating to the exercise of stock options (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Intrinsic value
$
8,231

 
$
7,997

 
$
6,807

Cash received
6,583

 
8,278

 
12,807

Tax benefit realized
1,954

 
1,704

 
727

The following table summarizes time-vested restricted stock and unit activity:
 
Time-Vested
Activity
 
Weighted
Average
Fair Value
Nonvested at December 28, 2012
80,269

 
$
23.48

Granted
67,230

 
26.76

Vested
(74,062
)
 
23.93

Forfeited
(5,862
)
 
22.26

Nonvested at January 3, 2014
67,575

 
26.37

Granted
63,817

 
44.78

Vested
(53,568
)
 
34.16

Forfeited
(9,992
)
 
35.30

Nonvested at January 2, 2015
67,832

 
36.22

Granted
44,629

 
49.84

Vested
(56,119
)
 
37.93

Forfeited
(17,107
)
 
40.48

Nonvested at January 1, 2016
39,235

 
$
47.40

The following table summarizes performance-vested restricted stock and stock unit activity related to the Company’s plans: 
 
Performance-
Vested
Activity
 
Weighted
Average
Fair Value
Nonvested at December 28, 2012
782,446

 
$
16.02

Granted
318,169

 
15.86

Vested
(49,139
)
 
14.68

Forfeited
(271,798
)
 
14.94

Nonvested at January 3, 2014
779,678

 
16.41

Granted
186,825

 
31.33

Vested
(221,470
)
 
18.51

Forfeited
(28,870
)
 
18.42

Nonvested at January 2, 2015
716,163

 
19.57

Granted
179,940

 
32.92

Vested
(270,198
)
 
15.30

Forfeited
(48,080
)
 
26.96

Nonvested at January 1, 2016
577,825

 
$
25.11

Research, Development and Engineering Costs (Tables)
Schedule Of Research And Development Expense Details
Research, Development and Engineering Costs, Net are comprised of the following (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Research, development and engineering costs
$
59,767

 
$
58,974

 
$
62,652

Less: cost reimbursements
(6,772
)
 
(9,129
)
 
(8,575
)
Total research, development and engineering costs, net
$
52,995

 
$
49,845

 
$
54,077

Other Operating Expenses, Net (Tables)
Other Operating Expenses, Net is comprised of the following (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
2014 investments in capacity and capabilities
$
23,037

 
$
8,925

 
$

Orthopaedic facilities optimization
1,395

 
1,317

 
8,038

2013 operating unit realignment

 
1,017

 
5,625

Legacy Lake Region Medical consolidations
1,961

 

 

Other consolidation and optimization costs (income)

 
(71
)
 
1,095

Acquisition and integration costs (income)
33,449

 
3

 
(502
)
Asset dispositions, severance and other
6,622

 
4,106

 
1,534

Total other operating expenses, net
$
66,464

 
$
15,297

 
$
15,790

The change in accrued liabilities related to these legacy Lake Region Medical consolidation initiatives is as follows (in thousands):
 
Employee
Costs
 
Other Exit Costs
 
Total
At October 27, 2015
$
3,392

 
$
653

 
$
4,045

Restructuring charges
557

 
1,404

 
1,961

Write-offs

 

 

Cash payments
(282
)
 
(1,461
)
 
(1,743
)
At January 1, 2016
$
3,667

 
$
596

 
$
4,263

The change in accrued liabilities related to the 2014 investments in capacity and capabilities is as follows (in thousands):
 
Severance and Retention
 
Accelerated
Depreciation/
Asset Write-offs
 
Other
 
Total
At January 2, 2015
$
1,163

 
$

 
$
1,066

 
$
2,229

Restructuring charges
2,729

 
235

 
20,073

 
23,037

Write-offs

 
(235
)
 

 
(235
)
Cash payments
(2,463
)
 

 
(19,544
)
 
(22,007
)
At January 1, 2016
$
1,429

 
$

 
$
1,595

 
$
3,024

The change in accrued liabilities related to the orthopaedic facilities optimizations is as follows (in thousands):
 
Severance
and
Retention
 
Accelerated
Depreciation/
Asset Write-offs
 
Other
 
Total
At January 2, 2015
$

 
$

 
$
287

 
$
287

Restructuring charges

 
88

 
1,307

 
1,395

Write-offs

 
(88
)
 

 
(88
)
Cash payments

 

 
(1,594
)
 
(1,594
)
At January 1, 2016
$

 
$

 
$

 
$

Income Taxes (Tables)
The U.S. and international components of income (loss) before provision for income taxes were as follows (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
U.S.
$
(42,166
)
 
$
56,801

 
$
42,392

International
26,466

 
19,778

 
6,446

Total income (loss) before provision for income taxes
$
(15,700
)
 
$
76,579

 
$
48,838

The provision (benefit) for income taxes was comprised of the following (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Current:
 
 
 
 
 
Federal
$
(3,753
)
 
$
16,293

 
$
39,353

State
(367
)
 
1,299

 
1,604

International
6,312

 
2,998

 
1,470

 
2,192

 
20,590

 
42,427

Deferred:
 
 
 
 
 
Federal
(8,144
)
 
1,211

 
(28,678
)
State
(880
)
 
(310
)
 
427

International
(1,274
)
 
(370
)
 
(1,605
)
 
(10,298
)
 
531

 
(29,856
)
Total provision (benefit) for income taxes
$
(8,106
)
 
$
21,121

 
$
12,571

The provision (benefit) for income taxes differs from the U.S. statutory rate due to the following:
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Statutory rate
$
(5,495
)
35.0
 %
 
$
26,803

35.0
 %
 
$
17,093

35.0
 %
Federal tax credits
(1,850
)
11.8

 
(1,600
)
(2.1
)
 
(3,651
)
(7.5
)
Foreign rate differential
(3,180
)
20.2

 
(3,276
)
(4.3
)
 
(348
)
(0.7
)
Uncertain tax positions
(531
)
3.4

 
412

0.6

 
831

1.7

State taxes, net of federal benefit
(1,490
)
9.5

 
507

0.7

 
1,148

2.3

Change in foreign tax rates
(91
)
0.6

 
(446
)
(0.6
)
 
(1,806
)
(3.7
)
Non-deductible transaction costs
4,867

(31.0
)
 


 


Valuation allowance
626

(4.0
)
 
(299
)
(0.4
)
 
186

0.4

Other
(962
)
6.1

 
(980
)
(1.3
)
 
(882
)
(1.8
)
Effective tax rate
$
(8,106
)
51.6
 %
 
$
21,121

27.6
 %
 
$
12,571

25.7
 %
Deferred tax assets (liabilities) consist of the following (in thousands):
 
At
 
January 1,
2016
 
January 2,
2015
Tax credits
$
22,196

 
$
5,828

Net operating loss carryforwards
153,949

 
6,721

Inventories
6,543

 
3,335

Accrued expenses
13,138

 
4,338

Stock-based compensation
9,512

 
9,341

Other
38

 
1,659

Gross deferred tax assets
205,376

 
31,222

Less valuation allowance
(39,171
)
 
(10,709
)
Net deferred tax assets
166,205

 
20,513

Property, plant and equipment
(32,772
)
 
(2,646
)
Intangible assets
(347,896
)
 
(57,850
)
Convertible subordinated notes
(3,754
)
 
(5,006
)
Gross deferred tax liabilities
(384,422
)
 
(65,502
)
Net deferred tax liability
$
(218,217
)
 
$
(44,989
)
Presented as follows:
 
 
 
Current deferred tax asset
$

 
$
6,168

Current deferred tax liability

 
(588
)
Noncurrent deferred tax asset
3,587

 
2,626

Noncurrent deferred tax liability
(221,804
)
 
(53,195
)
Net deferred tax liability
$
(218,217
)
 
$
(44,989
)
As of January 1, 2016, the Company has the following carryforwards available:
Jurisdiction
 
Tax
Attribute
 
Amount
(in millions)
 
Begin to
Expire
Federal
 
Net Operating Loss
 
$
386.2

 
2019
International
 
Net Operating Loss
 
42.2

 
2016
State
 
Net Operating Loss
 
298.7

 
2016
Federal
 
Foreign Tax Credit
 
17.0

 
2019
U.S. and State
 
R&D Tax Credit
 
2.6

 
2018
State
 
Investment Tax Credit
 
5.3

 
2016
Below is a summary of changes to the unrecognized tax benefit (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Balance, beginning of year
$
2,411

 
$
1,858

 
$
970

Additions relating to business combinations
7,443

 

 

Additions based upon tax positions related to the current year
274

 
268

 
325

Additions related to prior period tax positions
163

 
510

 
651

Reductions relating to settlements with tax authorities
(550
)
 
(225
)
 
(88
)
Reductions as a result of a lapse of applicable statute of limitations
(470
)
 

 

Balance, end of year
$
9,271

 
$
2,411

 
$
1,858

Commitments and Contingencies (Tables)
The change in product warranty liability was comprised of the following (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
Beginning balance
$
660

 
$
1,819

Additions to warranty reserve
1,274

 
953

Liabilities assumed from acquisition
2,521

 

Warranty claims paid
(1,139
)
 
(2,112
)
Ending balance
$
3,316

 
$
660

Operating lease expense was as follows (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Operating lease expense
$
6,516

 
$
4,281

 
$
4,379

Minimum future estimated annual operating lease expenses are as follows (in thousands):
2016
$
14,118

2017
10,951

2018
9,950

2019
8,979

2020
6,925

Thereafter
27,674

Total estimated operating lease expense
$
78,597

The impact to the Company’s results of operations from its forward contracts was as follows (in thousands):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Increase (reduction) in Cost of Sales
$
1,948

 
$
(168
)
 
$
(1,154
)
Ineffective portion of change in fair value

 

 

Information regarding outstanding foreign currency contracts as of January 1, 2016 is as follows (dollars in thousands):
Instrument
Type of
Hedge
 
Aggregate
Notional
Amount
 
Start
Date
 
End
Date
 
$/Peso
 
Fair
Value
 
Balance Sheet
Location
FX Contract
Cash Flow
 
$
16,480

 
Jan 2016
 
Dec 2016
 
0.0584

 
$
(307
)
 
Accrued Expenses
Earnings (Loss) Per Share (Tables)
The following table illustrates the calculation of Basic and Diluted EPS (in thousands, except per share amounts):
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Numerator for basic EPS:
 
 
 
 
 
Net income (loss)
$
(7,594
)
 
$
55,458

 
$
36,267

Denominator for basic EPS:
 
 
 
 
 
Weighted average shares outstanding
26,363

 
24,825

 
23,991

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

 
1,150

 
1,332

Denominator for diluted EPS
26,363

 
25,975

 
25,323

Basic EPS
$
(0.29
)
 
$
2.23

 
$
1.51

Diluted EPS
$
(0.29
)
 
$
2.14

 
$
1.43

The diluted weighted average share calculations do not include the following securities, which are not dilutive to the EPS calculations or the performance criteria have not been met:
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Time-vested stock options, restricted stock and restricted stock units
1,718,135

 
175,549

 
18,480

Performance-vested stock options and restricted stock units
577,825

 

 

Accumulated Other Comprehensive Income (Tables)
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Schedule of Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income is comprised of the following (in thousands): 
 
Defined
Benefit
Plan
Liability
 
Cash
Flow
Hedges
 
Foreign
Currency
Translation
Adjustment
 
Total
Pre-Tax
Amount
 
Tax
 
Net-of-Tax
Amount
At January 2, 2015
$
(1,181
)
 
$
(2,558
)
 
$
11,450

 
$
7,711

 
$
1,412

 
$
9,123

Unrealized loss on cash flow hedges

 
(4,413
)
 

 
(4,413
)
 
1,545

 
(2,868
)
Realized loss on foreign currency hedges

 
1,948

 

 
1,948

 
(682
)
 
1,266

Realized loss on interest rate swap hedges

 
2,631

 

 
2,631

 
(921
)
 
1,710

Net defined benefit plan liability adjustments
2

 

 

 
2

 
(22
)
 
(20
)
Foreign currency translation loss

 

 
(7,841
)
 
(7,841
)
 

 
(7,841
)
At January 1, 2016
$
(1,179
)
 
$
(2,392
)
 
$
3,609

 
$
38

 
$
1,332

 
$
1,370

Schedule of Accumulated Other Comprehensive Income
 
Defined
Benefit
Plan
Liability
 
Cash
Flow
Hedges
 
Foreign
Currency
Translation
Adjustment
 
Total
Pre-Tax
Amount
 
Tax
 
Net-of-Tax
Amount
At January 3, 2014
$
(672
)
 
$
(468
)
 
$
14,952

 
$
13,812

 
$
546

 
$
14,358

Unrealized loss on cash flow hedges

 
(2,372
)
 

 
(2,372
)
 
829

 
(1,543
)
Realized gain on foreign currency hedges

 
(168
)
 

 
(168
)
 
59

 
(109
)
Realized loss on interest rate swap hedges

 
450

 

 
450

 
(157
)
 
293

Net defined benefit plan liability adjustments
(509
)
 

 

 
(509
)
 
135

 
(374
)
Foreign currency translation loss

 

 
(3,502
)
 
(3,502
)
 

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

 
$
7,711

 
$
1,412

 
$
9,123

Fair Value Measurements (Tables)
The following tables provide information regarding assets and liabilities recorded at fair value on a recurring basis (in thousands):
 
Fair Value Measurements Using
Description
At January 1, 2016
 
Quoted
Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Liabilities
 
 
 
 
 
 
 
Foreign currency contracts (Note 15)
$
307

 
$

 
$
307

 
$

 
Fair Value Measurements Using
Description
At January 2,
2015
 
Quoted
Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Liabilities
 
 
 
 
 
 
 
Foreign currency contracts
$
1,568

 
$

 
$
1,568

 
$

Interest rate swaps
990

 

 
990

 

The following table provides information regarding assets and liabilities recorded at fair value on a nonrecurring basis as of January 1, 2016 and January 2, 2015 respectively (in thousands):
 
Fair Value Measurements Using
Description
At January 1, 2016
 
Quoted
Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets
 
 
 
 
 
 
 
Cost method investment
$
1,100

 
$

 
$
1,100

 
$


 
Fair Value Measurements Using
Description
At January 2, 2015
 
Quoted
Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets
 
 
 
 
 
 
 
Assets Held for Sale
$
1,635

 
$

 
$
1,635

 
$

Business Segment, Geographic and Concentration Risk Information (Tables)
Sales by geographic area are presented by allocating sales from external customers based on where the products are shipped (in thousands): 
 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Product line sales:
 
 
 
 
 
Advanced Surgical, Orthopaedics, and Portable Medical
$
243,385

 
$
216,339

 
$
208,990

Cardio and Vascular
143,260

 
58,770

 
48,357

Cardiac/Neuromodulation
356,064

 
330,921

 
328,455

Electrochem
59,449

 
81,757

 
78,143

Elimination of interproduct line sales
(1,744
)
 

 

Total sales
$
800,414

 
$
687,787

 
$
663,945

 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Business segment sales:
 
 
 
 
 
Greatbatch Medical
$
649,977

 
$
678,285

 
$
660,902

QiG
13,571

 
9,502

 
3,043

Lake Region Medical
139,819

 

 

Elimination of intersegment sales
(2,953
)
 

 

Total sales
$
800,414

 
$
687,787

 
$
663,945

 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Segment income (loss) from operations:
 
 
 
 
 
Greatbatch Medical
$
109,737

 
$
126,312

 
$
111,805

QiG
(25,855
)
 
(23,256
)
 
(30,484
)
Lake Region Medical
(16,416
)
 

 

Total segment income from operations
67,466

 
103,056

 
81,321

Unallocated operating expenses
(54,320
)
 
(27,402
)
 
(19,982
)
Operating income
13,146

 
75,654

 
61,339

Unallocated other income (expense), net
(28,846
)
 
925

 
(12,501
)
Income (loss) before provision for income taxes
$
(15,700
)
 
$
76,579

 
$
48,838

 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Depreciation and amortization:
 
 
 
 
 
Greatbatch Medical
$
30,160

 
$
31,906

 
$
31,112

QiG
1,862

 
2,101

 
1,539

Lake Region Medical
32,249

 

 

Total depreciation and amortization included in segment income from operations
64,271

 
34,007

 
32,651

Unallocated depreciation and amortization
3,347

 
3,450

 
3,315

Total depreciation and amortization
$
67,618

 
$
37,457

 
$
35,966

 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Expenditures for tangible long-lived assets, excluding acquisitions:
 
 
 
 
 
Greatbatch Medical
$
32,921

 
$
19,006

 
$
13,242

QiG
1,160

 
1,453

 
2,134

Lake Region Medical
7,525

 

 

Total reportable segments
41,606

 
20,459

 
15,376

Unallocated long-lived tangible assets
6,448

 
5,187

 
2,798

Total expenditures
$
48,054

 
$
25,646

 
$
18,174

 
At
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Identifiable assets:
 
 
 
 
 
Greatbatch Medical
$
798,609

 
$
761,225

 
$
758,369

QiG
68,637

 
76,529

 
56,245

Lake Region Medical
1,971,071

 

 

Total reportable segments
2,838,317

 
837,754

 
814,614

Unallocated assets
143,819

 
117,368

 
75,015

Total assets
$
2,982,136

 
$
955,122

 
$
889,629

 
Year Ended
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Sales by geographic area:
 
 
 
 
 
United States
$
401,380

 
$
312,539

 
$
325,090

Non-Domestic locations:
 
 
 
 
 
Puerto Rico
136,898

 
127,702

 
117,961

Belgium
62,546

 
65,308

 
67,155

Rest of world
199,590

 
182,238

 
153,739

Total sales
$
800,414

 
$
687,787

 
$
663,945

 
 
At
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
Long-lived tangible assets:
 
 
 
 
 
United States
$
264,556

 
$
113,851

 
$
116,484

Rest of world
114,936

 
31,074

 
29,289

Total
$
379,492

 
$
144,925

 
$
145,773

A significant portion of the Company’s sales and accounts receivable were to four customers as follows: 
 
Sales
 
Accounts Receivable
 
Year Ended
 
At
 
January 1,
2016
 
January 2,
2015
 
January 3,
2014
 
January 1,
2016
 
January 2,
2015
Customer A
18
%
 
18
%
 
16
%
 
23
%
 
23
%
Customer B
17
%
 
18
%
 
20
%
 
8
%
 
4
%
Customer C
12
%
 
12
%
 
13
%
 
6
%
 
8
%
Customer D
5
%
 
6
%
 
7
%
 
7
%
 
12
%
 
52
%
 
54
%
 
56
%
 
44
%
 
47
%
Quarterly Sales and Earnings Data - Unaudited (Tables)
Schedule of Quarterly Financial Information
 
4th Qtr.
 
3rd Qtr.
 
2nd Qtr.
 
1st Qtr.
 
(in thousands, except per share data)
2015
 
 
 
 
 
 
 
Sales
$
317,567

 
$
146,637

 
$
174,890

 
$
161,320

Gross profit
73,140

 
51,646

 
57,951

 
52,398

Net income (loss)
(24,907
)
 
22

 
9,283

 
8,008

EPS—basic
(0.85
)
 

 
0.36

 
0.32

EPS—diluted
(0.85
)
 

 
0.35

 
0.31

 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
Sales
$
169,726

 
$
171,699

 
$
172,081

 
$
174,281

Gross profit
57,214

 
58,118

 
58,470

 
57,596

Net income
14,176

 
14,012

 
12,348

 
14,922

EPS—basic
0.57

 
0.56

 
0.50

 
0.61

EPS—diluted
0.54

 
0.54

 
0.48

 
0.58

Summary of Significant Accounting Policies (Basis of Presentation) (Details) (USD $)
12 Months Ended 0 Months Ended
Jan. 1, 2016
customer
Segment
Jan. 2, 2015
Jan. 3, 2014
Jan. 1, 2016
Minimum [Member]
Patents [Member]
Jan. 1, 2016
Minimum [Member]
Customer Lists [Member]
Jan. 1, 2016
Minimum [Member]
Other Intangible Assets [Member]
Jan. 1, 2016
Maximum [Member]
Patents [Member]
Jan. 1, 2016
Maximum [Member]
Customer Lists [Member]
Jan. 1, 2016
Maximum [Member]
Other Intangible Assets [Member]
Jan. 1, 2016
Office Equipment [Member]
Minimum [Member]
Jan. 1, 2016
Office Equipment [Member]
Maximum [Member]
Jan. 1, 2016
Machinery and Equipment [Member]
Minimum [Member]
Jan. 1, 2016
Machinery and Equipment [Member]
Maximum [Member]
Jan. 1, 2016
Building and Building Improvements [Member]
Minimum [Member]
Jan. 1, 2016
Building and Building Improvements [Member]
Maximum [Member]
Oct. 27, 2015
Lake Region Medical [Member]
Oct. 27, 2015
Lake Region Medical [Member]
Customer Lists [Member]
Accounting Policies [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Reportable Segments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total purchase consideration
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 1,770,000,000 
 
Weeks In Reporting Period
Fifty-two 
Fifty-two 
Fifty-three 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Customers
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Schedule of Assets Useful Life [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
 
 
 
 
 
 
 
3 years 
10 years 
3 years 
10 years 
7 years 
40 years 
 
 
Intangible Asset, Useful Life
 
 
 
5 years 
7 years 
1 year 
15 years 
20 years 
10 years 
 
 
 
 
 
 
27 years 
29 years 
Customer Supplied Components Excluded From Revenue
44,300,000 
48,100,000 
45,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign Currency Transaction Gain (Loss), Realized
$ 1,300,000 
$ 1,300,000 
$ (100,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Summary of Significant Accounting Policies (Debt Issuance Costs and Discounts) (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Other Assets [Member] |
Revolving Credit Facility [Member]
 
 
 
New Accounting Pronouncement, Early Adoption [Line Items]
 
 
 
Deferred debt issuance costs
$ 4,800 
$ 2,200 
 
New Accounting Pronouncement, Early Adoption, Effect [Member] |
Other Assets [Member]
 
 
 
New Accounting Pronouncement, Early Adoption [Line Items]
 
 
 
Deferred debt issuance costs
35,900 
900 
 
Term Loan And Senior Notes [Member]
 
 
 
New Accounting Pronouncement, Early Adoption [Line Items]
 
 
 
Deferred debt issuance costs
35,908 
887 
1,074 
Term Loan And Senior Notes [Member] |
New Accounting Pronouncement, Early Adoption, Effect [Member] |
Long-term Debt [Member]
 
 
 
New Accounting Pronouncement, Early Adoption [Line Items]
 
 
 
Deferred debt issuance costs
$ 35,900 
$ 900 
 
Acquisitions (Lake Region Medical - Narrative) (Details) (Lake Region Medical [Member], USD $)
0 Months Ended 3 Months Ended 12 Months Ended
Oct. 27, 2015
Jan. 1, 2016
Jan. 1, 2016
Oct. 27, 2015
Business Acquisition [Line Items]
 
 
 
 
Effective date of acquisition
Oct. 27, 2015 
 
 
 
Name of acquired entity
Lake Region Medical Holdings, Inc. 
 
 
 
Total purchase consideration
$ 1,770,000,000 
 
 
 
Description of acquired entity
Lake Region Medical specializes in the design, development, and manufacturing of products across the medical component and device spectrum primarily serving the cardio, vascular and advanced surgical markets.  
 
 
 
Repayments of Debt
1,000,000,000 
 
 
 
Reason for acquisition
The Company believes that the combination of Greatbatch and Lake Region Medical brings together two highly complementary organizations that can provide a new level of industry leading capabilities and services to original equipment manufacturer customers while building value for shareholders.  
 
 
 
Total revenue included from the acquired entity
 
138,600,000 
138,600,000 
 
Total net loss included from the acquired entity
 
 
17,400,000 
 
Increase in inventory
 
 
 
$ 23,000,000 
Customer Lists [Member]
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
Customer annual attrition rate
5.00% 
 
 
 
Minimum [Member] |
Trademarks and Trade Names [Member]
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
Royalty rate
0.25% 
 
 
 
Minimum [Member] |
Technology [Member]
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
Royalty rate
0.50% 
 
 
 
Maximum [Member] |
Trademarks and Trade Names [Member]
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
Royalty rate
1.00% 
 
 
 
Maximum [Member] |
Technology [Member]
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
Royalty rate
7.00% 
 
 
 
Acquisitions (Lake Region Medical - Summary of Purchase Price Allocation) (Details) (Lake Region Medical [Member], USD $)
In Thousands, unless otherwise specified
0 Months Ended
Oct. 27, 2015
Business Acquisition [Line Items]
 
Cash consideration paid to Lake Region Medical stockholders and equity award holders
$ 478,490 
Total purchase consideration
728,366 
Common Stock [Member]
 
Business Acquisition [Line Items]
 
Fair value of common stock and replacement stock options
245,368 
Stock Options [Member]
 
Business Acquisition [Line Items]
 
Fair value of common stock and replacement stock options
$ 4,508 
Acquisitions (Lake Region Medical - Summary of Assets Acquired and Liabilities Assumed) (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 1, 2016
Jan. 2, 2015
Oct. 27, 2015
Lake Region Medical [Member]
Assets acquired
 
 
 
Current assets
 
 
$ 269,815 
Property, plant and equipment
 
 
216,473 
Amortizing intangible assets
 
 
849,000 
Indefinite-lived intangible assets
 
 
70,000 
Goodwill
1,013,570 
354,393 
661,788 
Other non-current assets
 
 
1,629 
Total assets acquired
 
 
2,068,705 
Liabilities assumed
 
 
 
Current liabilities
 
 
102,485 
Debt assumed
 
 
1,044,675 
Other long-term liabilities
 
 
193,179 
Total liabilities assumed
 
 
1,340,339 
Net assets acquired
 
 
$ 728,366 
Acquisitions (Lake Region Medical - Summary of Intangible Assets) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended 0 Months Ended
Jan. 1, 2016
Trademarks and Trade Names [Member]
Oct. 27, 2015
Lake Region Medical [Member]
Oct. 27, 2015
Lake Region Medical [Member]
Trademarks and Trade Names [Member]
Oct. 27, 2015
Lake Region Medical [Member]
Technology [Member]
Oct. 27, 2015
Lake Region Medical [Member]
Customer Lists [Member]
Business Acquisition [Line Items]
 
 
 
 
 
Amortizing Intangible Assets Fair Value Assigned
 
$ 849,000 
 
$ 160,000 
$ 689,000 
Amortizing Intangible Assets Weighted Average Amortization Period
 
13 years 
 
7 years 
14 years 
Amortizing Intangible Assets Estimated Useful Life
 
27 years 
 
19 years 
29 years 
Amortizing Intangible Assets Weighted Average Discount Rate
 
11.50% 
 
11.50% 
11.50% 
Indefinite-lived intangible assets acquired
$ 70,000 
 
$ 70,000 
 
 
Indefinite-lived Intangible Assets Weighted Average Discount Rate
 
 
11.50% 
 
 
Acquisitions (CCC - Narrative) (Details) (USD $)
0 Months Ended 3 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended
Oct. 27, 2015
Lake Region Medical [Member]
Jan. 1, 2016
Lake Region Medical [Member]
Jan. 1, 2016
Lake Region Medical [Member]
Oct. 27, 2015
Lake Region Medical [Member]
Oct. 27, 2015
Lake Region Medical [Member]
Customer Lists [Member]
Aug. 12, 2014
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Jan. 2, 2015
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Aug. 12, 2014
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Aug. 12, 2014
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Technology-Based Intangible Assets [Member]
Aug. 12, 2014
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Customer Lists [Member]
Aug. 12, 2014
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Trademarks and Trade Names [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Effective date of acquisition
Oct. 27, 2015 
 
 
 
 
Aug. 12, 2014 
 
 
 
 
 
Name of acquired entity
Lake Region Medical Holdings, Inc. 
 
 
 
 
Centro de Construcción de Cardioestimuladores del Uruguay 
 
 
 
 
 
Description of acquired entity
Lake Region Medical specializes in the design, development, and manufacturing of products across the medical component and device spectrum primarily serving the cardio, vascular and advanced surgical markets.  
 
 
 
 
CCC is an active implantable neuromodulation medical device systems developer and manufacturer that produces a range of medical devices including implantable pulse generators, programmer systems, battery chargers, patient wands and leads.  
 
 
 
 
 
Reason for acquisition
The Company believes that the combination of Greatbatch and Lake Region Medical brings together two highly complementary organizations that can provide a new level of industry leading capabilities and services to original equipment manufacturer customers while building value for shareholders.  
 
 
 
 
This acquisition allows the Company to more broadly partner with medical device companies, complements the Company’s core discrete technology offerings and enhances the Company’s medical device innovation efforts.  
 
 
 
 
 
Total revenue included from the acquired entity
 
$ 138,600,000 
$ 138,600,000 
 
 
 
$ 5,800,000 
 
 
 
 
Total net income included from the acquired entity
 
 
(17,400,000)
 
 
 
1,200,000 
 
 
 
 
Cash consideration paid to Lake Region Medical stockholders and equity award holders
478,490,000 
 
 
 
 
19,800,000 
 
 
 
 
 
Increase in inventory
 
 
 
$ 23,000,000 
 
 
 
$ 300,000 
 
 
 
Royalty rate
 
 
 
 
 
 
 
 
3.00% 
 
0.50% 
Customer annual attrition rate
 
 
 
 
5.00% 
 
 
 
 
15.00% 
 
Acquisitions (CCC - Summary of Assets Acquired and Liabilities Assumed) (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 1, 2016
Jan. 2, 2015
Aug. 12, 2014
Centro De Construccion De Cardioestimuladores Del Uruguay [Member]
Assets acquired
 
 
 
Current assets
 
 
$ 10,670 
Property, plant and equipment
 
 
1,131 
Amortizing intangible assets
 
 
6,100 
Goodwill
1,013,570 
354,393 
8,296 
Total assets acquired
 
 
26,197 
Liabilities assumed
 
 
 
Current liabilities
 
 
4,842 
Deferred income taxes
 
 
1,590 
Total liabilities assumed
 
 
6,432 
Net assets acquired
 
 
$ 19,765 
Acquisitions (CCC - Summary of Intangible Assets) (Details) (Centro De Construccion De Cardioestimuladores Del Uruguay [Member], USD $)
In Thousands, unless otherwise specified
0 Months Ended
Aug. 12, 2014
Aug. 12, 2014
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
Amortizing intangible assets
 
$ 6,100 
Weighted Average Amortization Period (Years)
10 years 
 
Weighted Average Discount Rate
18.00% 
 
Patented Technology [Member]
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
Amortizing intangible assets
 
1,400 
Weighted Average Amortization Period (Years)
10 years 
 
Weighted Average Discount Rate
18.00% 
 
Customer Lists [Member]
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
Amortizing intangible assets
 
4,600 
Weighted Average Amortization Period (Years)
10 years 
 
Weighted Average Discount Rate
18.00% 
 
Trademarks and Trade Names [Member]
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
Amortizing intangible assets
 
$ 100 
Weighted Average Amortization Period (Years)
2 years 
 
Weighted Average Discount Rate
18.00% 
 
Acquisitions (Pro Forma Information) (Details) (USD $)
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Business Acquisition, Pro Forma Information [Abstract]
 
 
 
Sales
$ 1,445,689,000 
$ 1,441,782,000 
$ 677,657,000 
Net income (loss)
2,405,000 
(25,865,000)
37,612,000 
Basic earnings per share (in dollars per share)
$ 0.08 
$ (0.87)
$ 1.57 
Diluted earnings per share (in dollars per share)
$ 0.08 
$ (0.87)
$ 1.49 
Lake Region Medical [Member]
 
 
 
Business Acquisition [Line Items]
 
 
 
Acquisition-related costs excluded from earnings
32,300,000 
 
 
Debt related costs excluded from earnings
9,500,000 
 
 
Nonrecurring amortization expense excluded from earnings
$ 23,000,000 
 
 
Supplemental Cash Flow Information (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Noncash investing and financing activities:
 
 
 
Common stock contributed to 401(k) Plan
$ 3,920 
$ 4,341 
$ 2,477 
Property, plant and equipment purchases included in accounts payable
7,401 
2,926 
2,103 
Common stock issued in connection with Lake Region Medical acquisition
245,368 
Replacement stock options issued in connection with Lake Region Medical acquisition
4,508 
Purchase of non-controlling interests in subsidiaries included in accrued expenses
6,818 
Cash paid during the year for:
 
 
 
Interest
13,057 
3,521 
4,989 
Income taxes
6,312 
13,565 
44,165 
Acquisition of noncash assets
2,013,604 
22,434 
Liabilities assumed
$ 1,340,339 
$ 6,432 
$ 0 
Inventories (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 1, 2016
Jan. 2, 2015
Inventory Disclosure [Abstract]
 
 
Raw materials
$ 107,296 
$ 73,354 
Work-in-process
93,729 
38,930 
Finished goods
51,141 
16,958 
Inventories
$ 252,166 
$ 129,242 
Assets Held For Sale (Details) (Building [Member], Swiss Orthopaedic Product Line [Member], Greatbatch Medical [Member], USD $)
In Thousands, unless otherwise specified
Jan. 1, 2016
Jan. 2, 2015
Building [Member] |
Swiss Orthopaedic Product Line [Member] |
Greatbatch Medical [Member]
 
 
Assets Held For Sale Detail [Line Items]
 
 
Current assets held-for-sale
$ 996 
$ 1,635 
Assets Held For Sale (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Assets Held For Sale Detail [Line Items]
 
 
 
Held for sale asset impairment
$ 0 
$ 0.4 
$ 0.9 
Orthopaedic Facility Optimization [Member]
 
 
 
Assets Held For Sale Detail [Line Items]
 
 
 
Assets held for sale
 
2.1 
 
Held for sale asset impairment
 
0.4 
 
Orthopaedic Facility Optimization [Member]
 
 
 
Assets Held For Sale Detail [Line Items]
 
 
 
Proceeds from assets held for sale
0.6 
 
 
Gain (loss) on assets held for sale
$ 0 
 
 
Property, Plant and Equipment, Net (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
$ 611,648 
$ 358,945 
 
Accumulated depreciation
(232,156)
(214,020)
 
Total
379,492 
144,925 
145,773 
Machinery and Equipment [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
285,068 
167,173 
 
Building and Building Improvements [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
130,184 
89,258 
 
Computer Equipment [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
43,947 
31,725 
 
Leasehold Improvements [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
36,745 
31,170 
 
Furniture and Fixtures [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
16,243 
14,045 
 
Land and Land Improvements [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
21,774 
10,816 
 
Construction in Progress [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
76,835 
14,129 
 
Other Capitalized Property Plant and Equipment [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, Plant and Equipment, Gross
$ 852 
$ 629 
 
Property, Plant and Equipment, Net (Depreciation Expense) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Property, Plant and Equipment [Abstract]
 
 
 
Depreciation
$ 27,136 
$ 23,320 
$ 22,799 
Intangible Assets (Narrative) (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 1, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
 
Accumulated impairment loss
$ 0 
Intangible Assets (Amortizing Intangible Assets) (Details) (USD $)
Jan. 1, 2016
Jan. 2, 2015
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
$ 1,022,167,000 
$ 173,167,000 
Accumulated Amortization
(129,469,000)
(111,973,000)
Foreign Currency Translation
1,279,000 
4,143,000 
Net Carrying Amount
893,977,000 
65,337,000 
Purchased Technology And Patents [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
255,776,000 
95,776,000 
Accumulated Amortization
(83,708,000)
(75,894,000)
Foreign Currency Translation
1,444,000 
1,966,000 
Net Carrying Amount
173,512,000 
21,848,000 
Customer Lists [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
761,857,000 
72,857,000 
Accumulated Amortization
(40,815,000)
(31,460,000)
Foreign Currency Translation
(986,000)
1,374,000 
Net Carrying Amount
720,056,000 
42,771,000 
Other Intangible Assets [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross Carrying Amount
4,534,000 
4,534,000 
Accumulated Amortization
(4,946,000)
(4,619,000)
Foreign Currency Translation
821,000 
803,000 
Net Carrying Amount
$ 409,000 
$ 718,000 
Intangible Assets (Amortization Expense by categories) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Finite-Lived Intangible Assets [Line Items]
 
 
 
Amortization of Intangible Assets
$ 17,496 
$ 13,877 
$ 13,167 
Cost of Sales [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Amortization of Intangible Assets
7,403 
6,201 
6,822 
Selling, General and Administrative Expenses [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Amortization of Intangible Assets
9,681 
7,009 
5,800 
Research and Development Expense [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Amortization of Intangible Assets
$ 412 
$ 667 
$ 545 
Intangible Assets (Future Amortization Expense) (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 1, 2016
Jan. 2, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
 
 
2016
$ 37,854 
 
2017
43,991 
 
2018
44,894 
 
2019
44,960 
 
2020
45,467 
 
Thereafter
676,811 
 
Net Carrying Amount
$ 893,977 
$ 65,337 
Intangible Assets (Change in Indefinite-lived Assets and Goodwill) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Indefinite-lived Intangible Assets [Roll Forward]
 
Indefinite-lived intangible assets, beginning
$ 20,288 
Indefinite-lived intangible assets, ending
90,288 
Goodwill [Roll Forward]
 
Goodwill, beginning
354,393 
Goodwill acquired
661,788 
Foreign currency translation
(2,611)
Goodwill, ending
1,013,570 
Greatbatch Medical [Member]
 
Goodwill [Roll Forward]
 
Goodwill, beginning
304,297 
Goodwill acquired
Foreign currency translation
(368)
Goodwill, ending
303,929 
QiG [Member]
 
Goodwill [Roll Forward]
 
Goodwill, beginning
50,096 
Goodwill acquired
Foreign currency translation
Goodwill, ending
50,096 
Lake Region Medical [Member]
 
Goodwill [Roll Forward]
 
Goodwill, beginning
Goodwill acquired
661,788 
Foreign currency translation
(2,243)
Goodwill, ending
659,545 
Trademarks and Trade Names [Member]
 
Indefinite-lived Intangible Assets [Roll Forward]
 
Indefinite-lived intangible assets, beginning
20,288 
Indefinite-lived intangible assets acquired
70,000 
Indefinite-lived intangible assets, ending
$ 90,288 
Accrued Expenses (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 1, 2016
Jan. 2, 2015
Accounts Payable and Accrued Liabilities [Abstract]
 
 
Salaries and benefits
$ 37,579 
$ 20,770 
Profit sharing and bonuses
6,781 
18,524 
Accrued interest
9,378 
195 
Purchase of non-controlling interest in subsidiaries
6,818 
Severance and change in control payments
11,969 
1,878 
Warranty and customer rebates
7,205 
660 
Other
17,527 
6,357 
Total
$ 97,257 
$ 48,384 
Debt (Schedule of Long-Term Debt) (Details) (USD $)
In Thousands, unless otherwise specified
0 Months Ended 1 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Feb. 20, 2013
Convertible Subordinated Debt [Member]
Mar. 31, 2007
Convertible Subordinated Debt [Member]
Jan. 1, 2016
Loans Payable [Member]
Variable Rate Term Loan [Member]
Jan. 2, 2015
Loans Payable [Member]
Variable Rate Term Loan [Member]
Jan. 1, 2016
Senior Notes [Member]
9.125% Senior Notes due 2023 [Member]
Oct. 27, 2015
Senior Notes [Member]
9.125% Senior Notes due 2023 [Member]
Jan. 2, 2015
Senior Notes [Member]
9.125% Senior Notes due 2023 [Member]
Jan. 1, 2016
Secured Debt [Member]
Loans Payable [Member]
Term Loan A (TLA) Facility [Member]
Jan. 2, 2015
Secured Debt [Member]
Loans Payable [Member]
Term Loan A (TLA) Facility [Member]
Jan. 1, 2016
Secured Debt [Member]
Loans Payable [Member]
Term Loan B (TLB) Facility [Member]
Jan. 2, 2015
Secured Debt [Member]
Loans Payable [Member]
Term Loan B (TLB) Facility [Member]
Jan. 1, 2016
Secured Debt [Member]
Revolving Credit Facility [Member]
New Revolving Credit Facility 2015 [Member]
Jan. 2, 2015
Secured Debt [Member]
Revolving Credit Facility [Member]
New Revolving Credit Facility 2015 [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Redemption date
 
 
Feb. 20, 2013 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Interest Rate, Stated Percentage
 
 
 
2.25% 
 
 
 
9.125% 
 
 
 
 
 
 
 
Interest rate during period
 
 
 
8.50% 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt, gross
$ 1,760,000 
 
 
 
$ 0 
$ 187,500 
$ 360,000 
 
$ 0 
$ 375,000 
$ 0 
$ 1,025,000 
$ 0 
$ 0 
$ 0 
Less unamortized discount on term loan B and debt issuance costs
(45,947)
(887)
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt
1,714,053 
186,613 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current portion of long-term debt
29,000 
11,250 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt
$ 1,685,053 
$ 175,363 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt (Senior Secured Credit Facilities) (Details) (Secured Debt [Member], USD $)
0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended
Oct. 27, 2015
Senior Secured Credit Facilities [Member]
Oct. 27, 2015
Senior Secured Credit Facilities [Member]
Maximum [Member]
Oct. 27, 2015
Loans Payable [Member]
loan_facility
Oct. 27, 2015
Loans Payable [Member]
Maximum [Member]
Oct. 27, 2015
Loans Payable [Member]
Term Loan A (TLA) Facility [Member]
Oct. 27, 2015
Loans Payable [Member]
Term Loan A (TLA) Facility [Member]
Oct. 27, 2015
Loans Payable [Member]
Term Loan A (TLA) Facility [Member]
Prime Rate [Member]
Minimum [Member]
Oct. 27, 2015
Loans Payable [Member]
Term Loan A (TLA) Facility [Member]
Prime Rate [Member]
Maximum [Member]
Oct. 27, 2015
Loans Payable [Member]
Term Loan A (TLA) Facility [Member]
London Interbank Offered Rate (LIBOR) [Member]
Minimum [Member]
Oct. 27, 2015
Loans Payable [Member]
Term Loan A (TLA) Facility [Member]
London Interbank Offered Rate (LIBOR) [Member]
Maximum [Member]
Oct. 27, 2015
Loans Payable [Member]
Term Loan B (TLB) Facility [Member]
Jan. 1, 2016
Loans Payable [Member]
Term Loan B (TLB) Facility [Member]
Oct. 27, 2015
Loans Payable [Member]
Term Loan B (TLB) Facility [Member]
Oct. 27, 2015
Loans Payable [Member]
Term Loan B (TLB) Facility [Member]
Prime Rate [Member]
Oct. 27, 2015
Loans Payable [Member]
Term Loan B (TLB) Facility [Member]
London Interbank Offered Rate (LIBOR) [Member]
Oct. 27, 2015
Swingline Loans [Member]
New Revolving Credit Facility 2015 [Member]
Oct. 27, 2015
Standby Letters of Credit [Member]
New Revolving Credit Facility 2015 [Member]
Apr. 27, 2016
Standby Letters of Credit [Member]
New Revolving Credit Facility 2015 [Member]
Scenario, Forecast [Member]
Oct. 27, 2015
Revolving Credit Facility [Member]
New Revolving Credit Facility 2015 [Member]
Jan. 1, 2016
Revolving Credit Facility [Member]
New Revolving Credit Facility 2015 [Member]
Oct. 27, 2015
Revolving Credit Facility [Member]
New Revolving Credit Facility 2015 [Member]
Oct. 27, 2015
Revolving Credit Facility [Member]
New Revolving Credit Facility 2015 [Member]
Minimum [Member]
Oct. 27, 2015
Revolving Credit Facility [Member]
New Revolving Credit Facility 2015 [Member]
Maximum [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 15,000,000 
$ 30,000,000 
$ 25,000,000 
 
 
$ 200,000,000 
 
 
Principle amount
 
 
 
 
 
375,000,000 
 
 
 
 
 
 
1,025,000,000 
 
 
 
 
 
 
 
 
 
 
Discount percent
 
 
 
 
 
 
 
 
 
 
1.00% 
 
 
 
 
 
 
 
 
 
 
 
 
Debt maturity date
 
 
 
 
Oct. 27, 2021 
 
 
 
 
 
Oct. 27, 2022 
 
 
 
 
 
 
 
Oct. 27, 2020 
 
 
 
 
Spread on variable rate
 
 
 
 
 
 
0.75% 
2.25% 
1.75% 
3.25% 
 
 
 
3.25% 
4.25% 
 
 
 
 
 
 
 
 
Interest rate floor
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.00% 
 
 
 
 
 
 
 
 
Number of additional term loan facilities that may be added (one or more)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
First lien net leverage ratio
 
4.25 
 
4.25 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt fair value
 
 
 
 
 
 
 
 
 
 
 
1,013,000,000 
 
 
 
 
 
 
 
 
 
 
 
Unused capacity commitment fee
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.175% 
0.25% 
Amount outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remaining borrowing capacity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
186,600,000 
 
 
 
Outstanding standby letters of credit
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 13,400,000 
 
 
 
Maximum leverage ratio
 
 
 
 
6.50 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA to interest expense ratio
 
 
 
 
3.00 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collateral, Percentage of present and future voting capital shares of first tier foreign subsidiaries
66.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt (Senior Notes) (Details) (USD $)
0 Months Ended
Oct. 27, 2015
Jan. 1, 2016
Oct. 27, 2015
Debt Instrument [Line Items]
 
 
 
Weighted average interest rate
 
5.69% 
 
Senior Notes [Member] |
9.125% Senior Notes due 2023 [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Principle amount
 
 
$ 360,000,000 
Debt Instrument, Interest Rate, Stated Percentage
 
 
9.125% 
Debt maturity date
Nov. 01, 2023 
 
 
Debt fair value
 
$ 354,600,000 
 
Senior Notes [Member] |
9.125% Senior Notes due 2023 [Member] |
Debt Instrument, Redemption, Period One [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Debt redemption price prior to make-whole premium
100.00% 
 
 
Debt redemption percentage of principle amount redeemed if using proceeds from certain equity offerings
40.00% 
 
 
Debt redemption price if using proceeds from certain equity offerings
109.125% 
 
 
Debt (Long-term Debt Maturity Schedule) (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 1, 2016
Long-term Debt, Fiscal Year Maturity [Abstract]
 
2016
$ 29,000 
2017
31,344 
2018
40,719 
2019
47,750 
2020
47,750 
Thereafter
1,563,437 
Long-term Debt
$ 1,760,000 
Debt (Interest Rate Swaps) (Details) (USD $)
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Jan. 1, 2016
Interest Rate Swap [Member]
Jan. 2, 2015
Interest Rate Swap [Member]
Jan. 3, 2014
Interest Rate Swap [Member]
Dec. 28, 2012
Interest Rate Swap 1 [Member]
Jan. 2, 2015
Interest Rate Swap 2a [Member]
Jan. 2, 2015
Interest Rate Swap 2b [Member]
Derivative [Line Items]
 
 
 
 
 
 
 
 
 
Interest Rate Swap Term
 
 
 
 
 
 
3 years 
 
 
Notional Amount
 
 
 
 
 
 
$ 150,000,000 
$ 45,000,000 
$ 45,000,000 
Annual notional amortizing amount
 
 
 
 
 
 
50,000,000 
 
 
Derivative, Inception Date
 
 
 
 
 
 
 
Feb. 20, 2015 
Feb. 22, 2016 
Additional interest expense incurred for termination of interest rate swap agreements
2,800,000 
 
 
 
 
 
 
 
 
Payment for termination of interest rate swap agreements
2,800,000 
 
 
 
 
 
 
 
 
Portion of the change in fair value considered ineffective
 
 
 
 
 
 
Interest expense
$ 33,513,000 
$ 4,252,000 
$ 11,261,000 
$ 3,500,000 
$ 500,000 
$ 500,000 
 
 
 
Debt (Convertible Subordinated Notes) (Details) (USD $)
0 Months Ended 1 Months Ended 12 Months Ended
Feb. 20, 2013
Mar. 31, 2007
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Debt Instrument [Line Items]
 
 
 
 
 
Convertible subordinated debt
 
$ 197,800,000 
 
 
 
Convertible Subordinated Debt [Member]
 
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
 
Discount percentage
 
5.00% 
 
 
 
Debt Instrument, Interest Rate, Stated Percentage
 
2.25% 
 
 
 
Interest rate during period
 
8.50% 
 
 
 
Redemption date
Feb. 20, 2013 
 
 
 
 
Interest Expense, Debt, Excluding Amortization
 
 
634,000 
Amortization of Debt Discount (Premium)
 
 
$ 0 
$ 0 
$ 5,368,000 
Debt (Contractual Interest and Discount Amortization) (Details) (Convertible Subordinated Debt [Member], USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Convertible Subordinated Debt [Member]
 
 
 
Interest Costs Incurred [Abstract]
 
 
 
Contractual interest
$ 0 
$ 0 
$ 634 
Discount amortization
$ 0 
$ 0 
$ 5,368 
Debt (Debt Issuance Costs and Discounts) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Debt Instrument [Line Items]
 
 
 
Payment of debt issuance costs
$ 45,933 
$ 0 
$ 2,802 
Interest Expense [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Write-off of debt issuance costs
1,600 
 
 
New Accounting Pronouncement, Early Adoption, Effect [Member] |
Other Assets [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Debt issuance costs
35,900 
900 
 
Term Loan And Senior Notes [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Debt issuance costs
35,908 
887 
1,074 
Write-off of debt issuance costs
732 
 
 
Term Loan And Senior Notes [Member] |
New Accounting Pronouncement, Early Adoption, Effect [Member] |
Long-term Debt [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Debt issuance costs
35,900 
900 
 
Revolving Credit Facility [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Debt issuance costs
4,791 
2,200 
2,786 
Write-off of debt issuance costs
907 
 
 
Revolving Credit Facility [Member] |
Other Assets [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Debt issuance costs
$ 4,800 
$ 2,200 
 
Debt (Deferred Financing Fees) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Deferred Finance Costs [Roll Forward]
 
 
 
Total, Beginning Balance
$ 887 
 
 
Total, Amortization during the period
11,320 
773 
6,366 
Total, Ending Balance
45,947 
887 
 
Revolving Credit Facility [Member]
 
 
 
Deferred Finance Costs [Roll Forward]
 
 
 
Debt issuance costs, Beginning Balance
2,200 
2,786 
 
Debt issuance costs, Financing costs incurred
4,152 
 
 
Debt issuance costs, Write-off during the period
(907)
 
 
Debt issuance costs, Amortization during the period
(654)
(586)
 
Debt issuance costs, Ending Balance
4,791 
2,200 
 
Term Loan And Senior Notes [Member]
 
 
 
Deferred Finance Costs [Roll Forward]
 
 
 
Debt issuance costs, Beginning Balance
887 
1,074 
 
Debt issuance costs, Financing costs incurred
41,781 
 
 
Debt issuance costs, Write-off during the period
(732)
 
 
Debt issuance costs, Amortization during the period
(6,028)
(187)
 
Debt issuance costs, Ending Balance
35,908 
887 
 
Total, Beginning Balance
887 
1,074 
 
Total, Financing costs incurred
52,031 
 
 
Total, Write-off during the period
(732)
 
 
Total, Amortization during the period
6,239 
187 
 
Total, Ending Balance
45,947 
887 
 
Term Loan B (TLB) Facility [Member]
 
 
 
Deferred Finance Costs [Roll Forward]
 
 
 
Unamortized discount on TLB Facility, Beginning Balance
 
Unamortized discount on TLB Facility, Financing costs incurred
10,250 
 
 
Unamortized discount on TLB Facility, Write-off during the period
 
 
Unamortized discount on TLB Facility, Amortization during the period
(211)
 
Unamortized discount on TLB Facility, Ending Balance
$ 10,039 
$ 0 
 
Benefit Plans (Narrative) (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended 2 Months Ended 12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Defined Contribution Plan Cash [Member]
Jan. 3, 2014
Defined Contribution Plan Cash [Member]
Jan. 1, 2016
Legacy Greatbatch 401(k) Plan [Member]
Defined Contribution Plan Cash [Member]
Jan. 2, 2015
Legacy Greatbatch 401(k) Plan [Member]
Defined Contribution Plan Cash [Member]
Jan. 3, 2014
Legacy Greatbatch 401(k) Plan [Member]
Defined Contribution Plan Cash [Member]
Jan. 1, 2016
Legacy Greatbatch 401(k) Plan [Member]
Defined Contribution Plan Stock [Member]
Jan. 2, 2015
Legacy Greatbatch 401(k) Plan [Member]
Defined Contribution Plan Stock [Member]
Jan. 3, 2014
Legacy Greatbatch 401(k) Plan [Member]
Defined Contribution Plan Stock [Member]
Jan. 1, 2016
Lakes Region Medical 401(k) Plan [Member]
Lake Region Medical 401(k) Plan [Member]
Jan. 1, 2016
Lakes Region Medical 401(k) Plan [Member]
Lake Region Medical 401(k) Plan [Member]
Jan. 1, 2016
Lakes Region Medical 401(k) Plan [Member]
Lake Region Medical 401(k) Plan [Member]
Maximum [Member]
Defined Contribution And Benefit Plan Disclosure [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Defined Benefit Plan, Basis Points
0.50% 
 
 
 
 
 
 
 
 
 
 
 
Employer matching contribution, percentage of employees' gross pay
 
35.00% 
35.00% 
35.00% 
 
 
4.00% 
 
 
 
6.00% 
3.00% 
Maximum contribution per employee, percent
 
6.00% 
6.00% 
6.00% 
 
 
 
 
 
 
50.00% 
 
Net costs recognized
 
 
 
$ 2.3 
$ 2.2 
$ 2.0 
 
 
 
$ 0.8 
 
 
Employer contribution cost
 
 
 
 
 
 
$ 0 
$ 4.2 
$ 4.8 
 
 
 
Shares Held In Employee Stock Plan
 
 
 
 
 
 
580,000 
 
 
 
 
 
Employer matching contribution, percentage
 
 
 
 
 
 
 
 
 
 
50.00% 
 
Vesting period
 
 
 
 
 
 
 
 
 
 
5 years 
 
Benefit Plans (Change in Projected Benefit Obligation) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
 
 
Projected benefit obligation at beginning of year
$ 2,843 
$ 2,422 
Projected benefit obligation acquired
4,316 
Service cost
439 
203 
Interest cost
165 
75 
Plan participants’ contribution
61 
36 
Actuarial loss
235 
630 
Benefits transferred in, net
258 
155 
Settlement/curtailment gain
(337)
Foreign currency translation
(325)
(341)
Projected benefit obligation at end of year
$ 7,992 
$ 2,843 
Benefit Plans (Change in Fair Value of Plan Assets) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
 
 
Fair value of plan assets at beginning of year
$ 437 
$ 731 
Employer contributions (refund)
69 
(39)
Plan participants’ contribution
61 
36 
Actual loss on plan assets
(39)
(101)
Benefits transferred in, net
362 
198 
Settlements
(337)
Foreign currency translation
(19)
(51)
Fair value of plan assets at end of year
871 
437 
Projected benefit obligation in excess of plan assets at end of year
7,121 
2,406 
Defined benefit liability classified as other current liabilities
46 
25 
Defined benefit liability classified as long-term liabilities
7,075 
2,381 
Accumulated benefit obligation at end of year
$ 6,299 
$ 1,938 
Benefit Plans (Amount Recognized in Accumulated Other Comprehensive Income) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]
 
 
 
Net loss occurring during the year
$ 164 
$ 736 
 
Amortization of losses
(156)
(138)
 
Prior service cost
(1)
(2)
 
Amortization of prior service cost
(9)
(11)
 
Foreign currency translation
(76)
 
Pre-tax adjustment
(2)
509 
 
Taxes
22 
(135)
 
Net loss
$ 20 
$ 374 
$ (272)
Benefit Plans (Amortization to be Recognized in Accumulated Other Comprehensive Income) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]
 
Amortization of net prior service credit
$ 10 
Amortization of net loss
$ 172 
Benefit Plans (Net Pension Costs) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]
 
 
Service cost
$ 439 
$ 203 
Interest cost
165 
75 
Settlements loss
105 
Expected return on assets
(11)
(3)
Recognized net actuarial loss
164 
45 
Net pension cost
$ 757 
$ 425 
Benefit Plans (Actuarial Valuations) (Details)
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract]
 
 
 
Discount rate
2.20% 
2.30% 
 
Salary growth
2.90% 
3.00% 
 
Expected rate of return on assets
2.00% 
2.30% 
 
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract]
 
 
 
Discount rate
2.30% 
3.40% 
2.10% 
Salary growth
3.00% 
3.10% 
2.40% 
Expected rate of return on assets
2.30% 
2.50% 
0.00% 
Benefit Plans (Plan Assets Components) (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
$ 871 
$ 437 
$ 731 
Fair Value, Inputs, Level 1 [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Fair Value, Inputs, Level 2 [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
871 
437 
 
Fair Value, Inputs, Level 3 [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Insurance Contract [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
871 
437 
 
Insurance Contract [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
 
Insurance Contract [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
871 
437 
 
Insurance Contract [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Fair value of plan assets
$ 0 
$ 0 
 
Stock-Based Compensation (Narratives) (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Stock Options [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Maximum term of share based award
10 years 
 
 
Closing stock price
$ 52.50 
 
 
Unrecognized compensation cost related to non-vested stock options
$ 2.3 
 
 
Period for recognition
2 years 
 
 
Stock Options [Member] |
Minimum [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Award vesting period
3 years 
 
 
Restricted Stock and Restricted Stock Units [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Period for recognition
2 years 
 
 
Tax benefit (expense) from compensation expense
3.40 
2.30 
(0.40)
Total unrecognized compensation cost
7.2 
 
 
Fair value of shares vested
$ 16.1 
$ 12.5 
$ 4.0 
Restricted Stock and Restricted Stock Units [Member] |
Maximum [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Award vesting period
4 years 
 
 
Restricted Stock Units (RSUs) [Member] |
Minimum [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Award vesting period
3 years 
 
 
Potential performance based restricted stock units to be issued based on shareholder return
 
 
Restricted Stock Units (RSUs) [Member] |
Maximum [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Potential performance based restricted stock units to be issued based on shareholder return
577,825 
 
 
Restricted Stock And Unit Awards [Member] |
Minimum [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Award vesting period
3 years 
 
 
2009 Plan [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Number of shares authorized
1,350,000 
 
 
Number of shares available for grant
75,361 
 
 
2009 Plan [Member] |
Restricted Stock and Restricted Stock Units [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Number of shares authorized
200,000 
 
 
Number of shares available for grant
9,728 
 
 
2011 Plan [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Number of shares authorized
1,350,000 
 
 
Number of shares available for grant
289,734 
 
 
Stock-Based Compensation (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
$ 9,376 
$ 13,186 
$ 14,101 
Cost of Sales [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
795 
3,530 
3,864 
Selling, General and Administrative Expenses [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
7,510 
7,923 
7,907 
Research and Development Expense [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
982 
1,440 
1,194 
Other Operating Expenses, net [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
89 
293 
1,136 
Employee Stock Option [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
2,708 
2,523 
3,490 
Restricted Stock And Unit Awards [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
6,668 
6,417 
5,843 
Defined Contribution Plan Stock [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation
$ 0 
$ 4,246 
$ 4,768 
Stock-Based Compensation (Weighted-Average Fair Value and Assumptions) (Details 1)
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
 
Weighted average grant date fair value
$ 12.18 
$ 16.43 
$ 8.38 
Risk-free interest rate
1.55% 
1.73% 
0.73% 
Expected volatility
26.00% 
39.00% 
39.00% 
Expected life (in years)
4 years 8 months 
5 years 3 months 18 days 
5 years 3 months 18 days 
Expected dividend yield
0.00% 
0.00% 
0.00% 
Annual prevesting forfeiture rate
9.00% 
9.00% 
9.00% 
Stock-Based Compensation (Time-Vested Stock Option Activity) (Details 2) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Stock Options Time and Performance Based [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
 
Stock Options Outstanding, Beginning
1,590,337 
1,793,670 
2,060,772 
Option Grants in Period, Gross
301,547 
183,571 
372,676 
Option Exercises in Period
(280,701)
(353,625)
(551,092)
Option Forfeitures and Expirations in Period
(52,183)
(33,279)
(88,686)
Stock Options Outstanding, Ending
1,678,900 
1,590,337 
1,793,670 
Options Expected to Vest, Number
1,643,386 
 
 
Options Exercisable, Number
1,467,256 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
 
 
 
Options Outstanding, Weighted Average Exercise Price, Beginning
$ 25.17 
$ 22.96 
$ 23.18 
Option Grants in Period, Weighted Average Exercise Price
$ 49.20 
$ 43.84 
$ 23.33 
Option Exercises in Period, Weighted Average Exercise Price
$ 23.45 
$ 23.41 
$ 23.24 
Option Forfeitures and Expirations in Period, Weighted Average Exercise Price
$ 42.45 
$ 27.82 
$ 28.05 
Options Outstanding, Weighted Average Exercise Price, Ending
$ 28.32 
$ 25.17 
$ 22.96 
Options Expected to Vest, Weighted Average Exercise Price
$ 27.90 
 
 
Options Exercisable, Weighted Average Exercise Price
$ 25.50 
 
 
Options Outstanding, Weighted Average Remaining Contractual Term
6 years 1 month 0 days 
 
 
Options Expected to Vest, Weighted Average Remaining Contractual Term
6 years 1 month 0 days 
 
 
Options Exercisable, Weighted Average Remaining Contractual Term
5 years 9 months 0 days 
 
 
Options Outstanding, Intrinsic Value
$ 40.6 
 
 
Options Expected to Vest, Intrinsic Value
40.4 
 
 
Options Exercisable, Intrinsic Value
$ 39.6 
 
 
Roll-over Stock Options [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
 
Option Grants in Period, Gross
119,900 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
 
 
 
Option Grants in Period, Weighted Average Exercise Price
$ 12.41 
 
 
Stock-Based Compensation (Exercise of Stock Option) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
 
Intrinsic value
$ 8,231 
$ 7,997 
$ 6,807 
Cash received
6,583 
8,278 
12,807 
Tax benefit realized
$ 1,954 
$ 1,704 
$ 727 
Stock-Based Compensation (Restricted Stock and Restricted Stock Units)(Details) (USD $)
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Restricted Stock And Restricted Stock Units Time Based [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
 
 
Nonvested Restricted Stock Units and Awards, Beginning
67,832 
67,575 
80,269 
Restricted Stock Units and Awards Granted
44,629 
63,817 
67,230 
Restricted Stock Units and Awards Vested
(56,119)
(53,568)
(74,062)
Restricted Stock Units and Awards Forfeited
(17,107)
(9,992)
(5,862)
Nonvested Restricted Stock Units and Awards, Ending
39,235 
67,832 
67,575 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
 
 
 
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Beginning
$ 36.22 
$ 26.37 
$ 23.48 
Restricted Stock Units and Awards Granted, Weighted Average Fair Value
$ 49.84 
$ 44.78 
$ 26.76 
Restricted Stock Units and Awards Vested, Weighted Average Fair Value
$ 37.93 
$ 34.16 
$ 23.93 
Restricted Stock Units and Awards Forfeited, Weighted Average Fair Value
$ 40.48 
$ 35.30 
$ 22.26 
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Ending
$ 47.40 
$ 36.22 
$ 26.37 
Restricted Stock And Restricted Stock Units Performance Based [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
 
 
Nonvested Restricted Stock Units and Awards, Beginning
716,163 
779,678 
782,446 
Restricted Stock Units and Awards Granted
179,940 
186,825 
318,169 
Restricted Stock Units and Awards Vested
(270,198)
(221,470)
(49,139)
Restricted Stock Units and Awards Forfeited
(48,080)
(28,870)
(271,798)
Nonvested Restricted Stock Units and Awards, Ending
577,825 
716,163 
779,678 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
 
 
 
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Beginning
$ 19.57 
$ 16.41 
$ 16.02 
Restricted Stock Units and Awards Granted, Weighted Average Fair Value
$ 32.92 
$ 31.33 
$ 15.86 
Restricted Stock Units and Awards Vested, Weighted Average Fair Value
$ 15.30 
$ 18.51 
$ 14.68 
Restricted Stock Units and Awards Forfeited, Weighted Average Fair Value
$ 26.96 
$ 18.42 
$ 14.94 
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Ending
$ 25.11 
$ 19.57 
$ 16.41 
Research, Development and Engineering Costs (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Research and development expense [Line Items]
 
 
 
Total research, development and engineering costs, net
$ (52,995)
$ (49,845)
$ (54,077)
Research, Development, and Engineering Costs [Member]
 
 
 
Research and development expense [Line Items]
 
 
 
Total research, development and engineering costs, net
(59,767)
(58,974)
(62,652)
Customer Cost Reimbursements [Member]
 
 
 
Research and development expense [Line Items]
 
 
 
Total research, development and engineering costs, net
$ (6,772)
$ (9,129)
$ (8,575)
Other Operating Expenses, Net (Narrative) (Details) (USD $)
12 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Jan. 1, 2016
Spinoff [Member]
Jan. 3, 2014
In Process Research And Development [Member]
QiG [Member]
Jan. 3, 2014
Wireless Sensing [Member]
Greatbatch Medical [Member]
Jan. 2, 2015
Executive Vice President [Member]
Jan. 1, 2016
Minimum [Member]
Spinoff [Member]
Jan. 1, 2016
Maximum [Member]
Spinoff [Member]
Jan. 1, 2016
Lake Region Medical [Member]
Jan. 1, 2016
Lake Region Medical [Member]
Spinoff [Member]
Oct. 2, 2015
Lake Region Medical [Member]
Spinoff [Member]
Jan. 1, 2016
Lake Region Medical [Member]
Minimum [Member]
Jan. 1, 2016
Lake Region Medical [Member]
Maximum [Member]
Jan. 1, 2016
Orthopaedic Facility Optimization [Member]
Jan. 2, 2015
Operating Unit Realignment [Member]
Jan. 2, 2015
Operating Unit Realignment [Member]
Greatbatch Medical [Member]
departmental_group
Jan. 2, 2015
Operating Unit Realignment [Member]
Severance And Retention [Member]
Jan. 2, 2015
Operating Unit Realignment [Member]
Other Restructuring [Member]
Jan. 2, 2015
Legacy Lake Region Medical Consolidation [Member]
facility
Jan. 1, 2016
Legacy Lake Region Medical Consolidation [Member]
Jan. 1, 2016
Legacy Lake Region Medical Consolidation [Member]
Minimum [Member]
Jan. 1, 2016
Legacy Lake Region Medical Consolidation [Member]
Minimum [Member]
Other Restructuring [Member]
Jan. 1, 2016
Legacy Lake Region Medical Consolidation [Member]
Minimum [Member]
Employee Severance [Member]
Jan. 1, 2016
Legacy Lake Region Medical Consolidation [Member]
Maximum [Member]
Jan. 1, 2016
Legacy Lake Region Medical Consolidation [Member]
Maximum [Member]
Other Restructuring [Member]
Jan. 1, 2016
Legacy Lake Region Medical Consolidation [Member]
Maximum [Member]
Employee Severance [Member]
Jan. 1, 2016
Investments in Capacity and Capabilities [Member]
Jan. 1, 2016
Investments in Capacity and Capabilities [Member]
Minimum [Member]
Jan. 1, 2016
Investments in Capacity and Capabilities [Member]
Minimum [Member]
Severance And Retention [Member]
Jan. 1, 2016
Investments in Capacity and Capabilities [Member]
Minimum [Member]
Accelerated Depreciation And Asset Write Offs [Member]
Jan. 1, 2016
Investments in Capacity and Capabilities [Member]
Minimum [Member]
Other Restructuring [Member]
Jan. 1, 2016
Investments in Capacity and Capabilities [Member]
Maximum [Member]
Jan. 1, 2016
Investments in Capacity and Capabilities [Member]
Maximum [Member]
Severance And Retention [Member]
Jan. 1, 2016
Investments in Capacity and Capabilities [Member]
Maximum [Member]
Accelerated Depreciation And Asset Write Offs [Member]
Jan. 1, 2016
Investments in Capacity and Capabilities [Member]
Maximum [Member]
Other Restructuring [Member]
Jan. 1, 2016
Orthopaedic Facility Optimization [Member]
building
Jan. 2, 2015
Orthopaedic Facility Optimization [Member]
Jan. 2, 2015
Orthopaedic Facility Optimization [Member]
Swiss Orthopaedic Product Line [Member]
Jan. 1, 2016
Orthopaedic Facility Optimization [Member]
Minimum [Member]
Jan. 1, 2016
Orthopaedic Facility Optimization [Member]
Minimum [Member]
Severance And Retention [Member]
Jan. 1, 2016
Orthopaedic Facility Optimization [Member]
Minimum [Member]
Accelerated Depreciation And Asset Write Offs [Member]
Jan. 1, 2016
Orthopaedic Facility Optimization [Member]
Minimum [Member]
Other Restructuring [Member]
Jan. 1, 2016
Orthopaedic Facility Optimization [Member]
Maximum [Member]
Jan. 1, 2016
Orthopaedic Facility Optimization [Member]
Maximum [Member]
Other Restructuring [Member]
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expected capital expenditures
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 4,000,000 
 
 
$ 5,000,000 
 
 
 
$ 25,000,000 
 
 
 
$ 28,000,000 
 
 
 
 
 
 
$ 30,000,000 
 
 
 
$ 35,000,000 
 
Capital investments expended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
900,000 
 
 
 
 
 
 
21,300,000 
 
 
 
 
 
 
 
 
28,400,000 
 
 
 
 
 
 
 
 
Total expense expected
 
 
 
 
 
 
 
 
 
 
 
 
40,000,000 
50,000,000 
 
 
 
 
 
 
 
13,000,000 
8,000,000 
5,000,000 
15,000,000 
9,000,000 
6,000,000 
 
34,000,000 
5,000,000 
2,000,000 
27,000,000 
39,000,000 
7,000,000 
3,000,000 
29,000,000 
 
 
 
45,000,000 
11,000,000 
13,000,000 
21,000,000 
48,000,000 
24,000,000 
Expected capital investment
 
 
 
 
 
 
 
 
 
 
 
 
20,000,000 
25,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs to date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6,600,000 
 
5,000,000 
1,600,000 
 
2,000,000 
 
 
 
 
 
 
32,000,000 
 
 
 
 
 
 
 
 
43,900,000 
 
 
 
 
 
 
 
 
Number of facility consolidations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets held for sale, expected gain from earn-out payment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,700,000 
 
 
 
 
 
 
Assets held for sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,100,000 
 
 
 
 
 
 
 
Held for sale asset impairment
400,000 
900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
400,000 
 
 
 
 
 
 
 
Proceeds from assets held for sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain (loss) on assets held for sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition transaction costs
 
 
 
 
 
 
 
 
 
23,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition transactions costs accrued
 
 
 
 
 
 
 
 
 
700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition integration related costs
 
 
 
 
 
 
 
 
 
8,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition integration related costs accrued
6,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of sales and marketing groups
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of operation groups
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value adjustments
 
840,000 
700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Professional fees
 
 
 
6,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued professional fees
 
 
 
500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Transaction costs
 
 
 
 
 
 
 
10,000,000 
12,000,000 
 
57,100,000 
13,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Severance costs
 
 
 
 
 
 
900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Write-off
 
 
 
 
 
900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Indefinite-lived assets written-off
 
 
$ (500,000)
 
$ (500,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Operating Expenses, Net (Details) (USD $)
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Operating Costs and Expenses [Abstract]
 
 
 
Other operating (income) expense, net
$ 66,464,000 
$ 15,297,000 
$ 15,790,000 
Investments in Capacity and Capabilities [Member]
 
 
 
Operating Costs and Expenses [Abstract]
 
 
 
Other operating (income) expense, net
23,037,000 
8,925,000 
Operating Unit Realignment [Member]
 
 
 
Operating Costs and Expenses [Abstract]
 
 
 
Other operating (income) expense, net
1,017,000 
5,625,000 
Legacy Lake Region Medical Consolidation [Member]
 
 
 
Operating Costs and Expenses [Abstract]
 
 
 
Other operating (income) expense, net
1,961,000 
Other Consolidation And Optimization Income (Costs) [Member]
 
 
 
Operating Costs and Expenses [Abstract]
 
 
 
Other operating (income) expense, net
(71,000)
1,095,000 
Orthopaedic facility optimization [Member]
 
 
 
Operating Costs and Expenses [Abstract]
 
 
 
Other operating (income) expense, net
1,395,000 
1,317,000 
8,038,000 
Integration costs [Member]
 
 
 
Operating Costs and Expenses [Abstract]
 
 
 
Other operating (income) expense, net
33,449,000 
3,000 
(502,000)
Asset dispositions severance and other [Member]
 
 
 
Operating Costs and Expenses [Abstract]
 
 
 
Other operating (income) expense, net
6,622,000 
4,106,000 
1,534,000 
Legacy Lake Region Medical Consolidation [Member]
 
 
 
Other Operating Income Expense Detail [Line Items]
 
 
 
Number of facilities after consolidation
$ 1 
 
 
Other Operating Expenses, Net (Changes in Accrued Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended 2 Months Ended
Jan. 1, 2016
Investments in Capacity and Capabilities [Member]
Jan. 1, 2016
Orthopaedic Facility Optimization [Member]
Jan. 1, 2016
Severance And Retention [Member]
Investments in Capacity and Capabilities [Member]
Jan. 1, 2016
Severance And Retention [Member]
Orthopaedic Facility Optimization [Member]
Jan. 1, 2016
Accelerated Depreciation And Asset Write Offs [Member]
Investments in Capacity and Capabilities [Member]
Jan. 1, 2016
Accelerated Depreciation And Asset Write Offs [Member]
Orthopaedic Facility Optimization [Member]
Jan. 1, 2016
Other Restructuring [Member]
Investments in Capacity and Capabilities [Member]
Jan. 1, 2016
Other Restructuring [Member]
Orthopaedic Facility Optimization [Member]
Jan. 1, 2016
Legacy Lake Region Medical Consolidation [Member]
Jan. 1, 2016
Legacy Lake Region Medical Consolidation [Member]
Employee Severance [Member]
Jan. 1, 2016
Legacy Lake Region Medical Consolidation [Member]
Other Restructuring [Member]
Restructuring Reserve [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Restructuring Reserve, Beginning balance
$ 2,229 
$ 287 
$ 1,163 
$ 0 
$ 0 
$ 0 
$ 1,066 
$ 287 
$ 4,045 
$ 3,392 
$ 653 
Restructuring charges
23,037 
1,395 
2,729 
235 
88 
20,073 
1,307 
1,961 
557 
1,404 
Write-offs
(235)
(88)
(235)
(88)
Cash payments
(22,007)
(1,594)
(2,463)
(19,544)
(1,594)
(1,743)
(282)
(1,461)
Restructuring Reserve, Ending balance
$ 3,024 
$ 0 
$ 1,429 
$ 0 
$ 0 
$ 0 
$ 1,595 
$ 0 
$ 4,263 
$ 3,667 
$ 596 
Income Taxes (Narratives) (Details) (USD $)
In Millions, unless otherwise specified
Jan. 1, 2016
Income Tax Disclosure [Abstract]
 
Reasonably possible reduction within next 12 months
$ 0.1 
Unrecognized tax benefit
8.5 
Undistributed earnings of foreign subsidiaries
$ 84 
Income Taxes (Income Before Income Tax Domestic And Foreign) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Income Tax Disclosure [Line Items]
 
 
 
Income (loss) from continuing operations before income taxes
$ (15,700)
$ 76,579 
$ 48,838 
UNITED STATES [Member]
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
Income (loss) from continuing operations before income taxes
(42,166)
56,801 
42,392 
International [Member]
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
Income (loss) from continuing operations before income taxes
$ 26,466 
$ 19,778 
$ 6,446 
Income Taxes (Provision Benefit of Income Taxes) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Current:
 
 
 
Federal
$ (3,753)
$ 16,293 
$ 39,353 
State
(367)
1,299 
1,604 
International
6,312 
2,998 
1,470 
Total
2,192 
20,590 
42,427 
Deferred:
 
 
 
Federal
(8,144)
1,211 
(28,678)
State
(880)
(310)
427 
International
(1,274)
(370)
(1,605)
Total
(10,298)
531 
(29,856)
Effective tax rate
$ (8,106)
$ 21,121 
$ 12,571 
Income Taxes (Effect Tax Rate Reconciliation) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Effective Income Tax Rate Reconciliation, Amount [Abstract]
 
 
 
Statutory rate
$ (5,495)
$ 26,803 
$ 17,093 
Foreign rate differential
(3,180)
(3,276)
(348)
Uncertain tax positions
(531)
412 
831 
State taxes, net of federal benefit
(1,490)
507 
1,148 
Change in foreign tax rates
(91)
(446)
(1,806)
Non-deductible transaction costs
4,867 
Valuation allowance
626 
(299)
186 
Other
(962)
(980)
(882)
Effective tax rate
(8,106)
21,121 
12,571 
Effective Income Tax Rate Reconciliation, Percent [Abstract]
 
 
 
Statutory rate
35.00% 
35.00% 
35.00% 
Effective Income Tax Rate Reconciliation, Tax Credit, Amount
$ 1,850 
$ 1,600 
$ 3,651 
Federal tax credits
11.80% 
(2.10%)
(7.50%)
Foreign rate differential
20.20% 
(4.30%)
(0.70%)
Uncertain tax positions
3.40% 
0.60% 
1.70% 
State taxes, net of federal benefit
9.50% 
0.70% 
2.30% 
Change in foreign tax rates
0.60% 
(0.60%)
(3.70%)
Non-deductible transaction costs
(31.00%)
0.00% 
0.00% 
Valuation allowance
(4.00%)
(0.40%)
0.40% 
Other
6.10% 
(1.30%)
(1.80%)
Effective tax rate
51.60% 
27.60% 
25.70% 
Income Taxes (Deferred Tax Assets and Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 1, 2016
Jan. 2, 2015
Components of Deferred Tax Assets and Liabilities [Abstract]
 
 
Tax credits
$ 22,196 
$ 5,828 
Net operating loss carryforwards
153,949 
6,721 
Inventories
6,543 
3,335 
Accrued expenses
13,138 
4,338 
Stock-based compensation
9,512 
9,341 
Other
38 
1,659 
Gross deferred tax assets
205,376 
31,222 
Less valuation allowance
(39,171)
(10,709)
Net deferred tax assets
166,205 
20,513 
Property, plant and equipment
(32,772)
(2,646)
Intangible assets
(347,896)
(57,850)
Convertible subordinated notes
(3,754)
(5,006)
Gross deferred tax liabilities
(384,422)
(65,502)
Net deferred tax liability
$ (218,217)
$ (44,989)
Income Taxes (Deferred Tax Assets and Liabilities Current Noncurrent) (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 1, 2016
Jan. 2, 2015
Components of Deferred Tax Assets and Liabilities [Abstract]
 
 
Current deferred tax asset
$ 0 
$ 6,168 
Current deferred tax liability
(588)
Noncurrent deferred tax asset
3,587 
2,626 
Noncurrent deferred tax liability
(221,804)
(53,195)
Net deferred tax liability
$ (218,217)
$ (44,989)
Income Taxes (Income Tax Carry Forward) (Details) (USD $)
In Millions, unless otherwise specified
Jan. 1, 2016
Federal [Member]
 
Operating Loss Carryforwards [Line Items]
 
Net Operating Loss
$ 386.2 
International [Member]
 
Operating Loss Carryforwards [Line Items]
 
Net Operating Loss
42.2 
State [Member]
 
Operating Loss Carryforwards [Line Items]
 
Net Operating Loss
298.7 
Foreign Tax Credit Carryforward [Member] |
Federal [Member]
 
Operating Loss Carryforwards [Line Items]
 
Tax Credit
17.0 
Research Tax Credit Carryforward [Member] |
US and State [Member]
 
Operating Loss Carryforwards [Line Items]
 
Tax Credit
2.6 
Investment Tax Credit Carryforward [Member] |
State [Member]
 
Operating Loss Carryforwards [Line Items]
 
Tax Credit
$ 5.3 
Income Taxes (Unrecognized Tax Benefits) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
 
 
 
Balance, beginning of year
$ 2,411 
$ 1,858 
$ 970 
Additions relating to business combinations
274 
268 
325 
Additions based upon tax positions related to the current year
7,443 
Additions related to prior period tax positions
163 
510 
651 
Reductions relating to settlements with tax authorities
(550)
(225)
(88)
Reductions as a result of a lapse of applicable statute of limitations
(470)
Balance, end of year
$ 9,271 
$ 2,411 
$ 1,858 
Commitments and Contingencies (Narratives) (Details) (USD $)
12 Months Ended 0 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Jan. 1, 2016
Lake Region Medical [Member]
Jan. 1, 2016
Other Noncurrent Liabilities [Member]
Jan. 26, 2016
Subsequent Event [Member]
Positive Outcome of Litigation [Member]
patent
Gain Contingencies [Line Items]
 
 
 
 
 
 
Number of patents found infringed upon
 
 
 
 
 
Settlement amount
 
 
 
 
 
$ 37,500,000 
Direct operating cost, royalty expense
2,400,000 
3,300,000 
3,500,000 
 
 
 
Standard product warranty description
The Company generally warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. 
 
 
 
 
 
Purchase commitment description
Contractual obligations for purchase of goods or services are defined as agreements that are enforceable and legally binding on the Company and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The Company’s purchase orders are normally based on its current manufacturing needs and are fulfilled by its vendors within short time horizons. The Company enters into blanket orders with vendors that have preferred pricing and terms, however these orders are normally cancelable by us without penalty. 
 
 
 
 
 
Remaining minimum amount committed
63,700,000 
 
 
 
 
 
Maximum Loss Per Associate Under Stop Loss Insurance
250,000 
 
 
275,000 
 
 
Accrued Self Insured Medical Plan Liability
4,000,000 
1,800,000 
 
 
 
 
Increase in Workers' Compensation Liability
900,000 
 
 
 
 
 
Workers' Compensation Liability
3,900,000 
 
 
 
 
Gain (Loss) Related to Litigation Settlement
 
 
 
 
 
Loss Contingency, Opinion of Counsel
The Company believes these allegations are without merit and has concluded that any potential loss related to these allegations is not probable 
 
 
 
 
 
Estimated Litigation Liability, Current
 
 
 
 
 
Accrual for Environmental Loss Contingencies
 
 
 
 
$ 1,100,000 
 
Commitments and Contingencies (Change in Product Warranty Liability) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Movement in Standard Product Warranty Accrual [Roll Forward]
 
 
Beginning balance
$ 660 
$ 1,819 
Additions to warranty reserve
1,274 
953 
Liabilities assumed from acquisition
2,521 
Warranty claims paid
(1,139)
(2,112)
Ending balance
$ 3,316 
$ 660 
Commitments and Contingencies (Operating Lease Expenses) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Commitments and Contingencies Disclosure [Abstract]
 
 
 
Operating lease expense
$ 6,516 
$ 4,281 
$ 4,379 
Commitments and Contingencies (Minimum Future Estimated Operating Lease Expense) (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 1, 2016
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
 
2016
$ 14,118 
2017
10,951 
2018
9,950 
2019
8,979 
2020
6,925 
Thereafter
27,674 
Total estimated operating lease expense
$ 78,597 
Commitments and Contingencies (Foreign Currency Contracts) (Details) (USD $)
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Foreign Currency Cash Flow Hedges [Abstract]
 
 
 
Increase (reduction) in Cost of Sales
$ 1,948,000 
$ (168,000)
$ (1,154,000)
Ineffective portion of change in fair value
Derivative [Line Items]
 
 
 
Description of Types of Foreign Currency Cash Flow Hedging Instruments Used
Historically, the Company has entered into forward contracts to purchase Mexican pesos in order to hedge the risk of peso-denominated payments associated with its operations in Tijuana, Mexico 
 
 
Payment for termination of foreign currency contract
2,400,000 
 
 
Loss on termination of foreign currency contract
(2,400,000)
 
 
Terminated FX Contract [Member]
 
 
 
Derivative [Line Items]
 
 
 
Loss on termination of foreign currency contract
1,600,000 
 
 
FX Contract 1 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Derivative instrument
FX Contract 
 
 
Aggregate Notional Amount
16,480,000 
 
 
Start Date
Jan. 01, 2016 
 
 
End Date
Dec. 31, 2016 
 
 
$/Peso
0.0584 
 
 
Other Current Liabilities [Member] |
FX Contract 1 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Foreign Currency Cash Flow Hedge Liability at Fair Value
$ 307,000 
 
 
Earnings (Loss) Per Share (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Jan. 1, 2016
Oct. 2, 2015
Jul. 3, 2015
Apr. 3, 2015
Jan. 2, 2015
Oct. 3, 2014
Jul. 4, 2014
Apr. 4, 2014
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Numerator for basic EPS:
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
 
 
 
 
 
 
 
 
$ (7,594)
$ 55,458 
$ 36,267 
Denominator for basic EPS:
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding
 
 
 
 
 
 
 
 
26,363 
24,825 
23,991 
Effect of dilutive securities stock options, restricted stock and restricted stock units
 
 
 
 
 
 
 
 
1,150 
1,332 
Denominator for diluted EPS
 
 
 
 
 
 
 
 
26,363 
25,975 
25,323 
Basic (in dollars per share)
$ (0.85)
$ 0.00 
$ 0.36 
$ 0.32 
$ 0.57 
$ 0.56 
$ 0.50 
$ 0.61 
$ (0.29)
$ 2.23 
$ 1.51 
Diluted (in dollars per share)
$ (0.85)
$ 0.00 
$ 0.35 
$ 0.31 
$ 0.54 
$ 0.54 
$ 0.48 
$ 0.58 
$ (0.29)
$ 2.14 
$ 1.43 
Earnings (Loss) Per Share (Antidilutive Securities) (Details)
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Anitdilutive Securities Excluded From Earnings Per Share [Abstract]
 
 
 
Time-vested stock options, restricted stock and restricted stock units
1,718,135 
175,549 
18,480 
Performance-vested stock options and restricted stock units
577,825 
Incremental common share attributable to dilutive effect of conversion of debt securities
 
 
Accumulated Other Comprehensive Income (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Defined Benefit Plan Liability
 
 
 
Defined Benefit Plan Liability, Beginning
$ (1,181)
$ (672)
 
Net defined benefit plan liability adjustments
(509)
 
Defined Benefit Plan Liability, Ending
(1,179)
(1,181)
(672)
Cash Flow Hedges
 
 
 
Cash Flow Hedges, Beginning
(2,558)
(468)
 
Unrealized loss on cash flow hedges
(4,413)
(2,372)
 
Realized loss on foreign currency hedges
1,948 
(168)
 
Realized loss on interest rate swap hedges
2,631 
450 
 
Cash Flow Hedges, End
(2,392)
(2,558)
(468)
Foreign Currency Translation Adjustment
 
 
 
Foreign Currency Translation Adjustment, Beginning
11,450 
14,952 
 
Foreign currency translation loss
(7,841)
(3,502)
 
Foreign Currency Translation Adjustment, End
3,609 
11,450 
14,952 
Total Pre-Tax Amount
 
 
 
Total Pre-Tax Amount, Beginning
7,711 
13,812 
 
Unrealized loss on cash flow hedges
(4,413)
(2,372)
 
Realized loss on foreign currency hedges
1,948 
(168)
 
Realized loss on interest rate swap hedges
2,631 
450 
 
Net defined benefit plan liability adjustments
(509)
 
Foreign currency translation loss
(7,841)
(3,502)
 
Total Pre-Tax Amount, End
38 
7,711 
13,812 
Tax
 
 
 
Tax, Beginning
1,412 
546 
 
Unrealized loss on cash flow hedges
1,545 
829 
 
Realized loss on foreign currency hedges
(682)
59 
 
Realized loss on interest rate swap hedges
(921)
(157)
 
Net defined benefit plan liability adjustments
(22)
135 
 
Foreign currency translation loss
 
Tax, End
1,332 
1,412 
546 
Net-of-Tax Amount
 
 
 
Net-of-Tax Amount, Beginning
9,123 
14,358 
 
Unrealized loss on cash flow hedges
(2,868)
(1,543)
 
Realized loss on foreign currency hedges
1,266 
(109)
 
Realized loss on interest rate swap hedges
1,710 
293 
 
Net defined benefit plan liability adjustments
(20)
(374)
272 
Foreign currency translation gain (loss)
(7,841)
(3,502)
1,521 
Net-of-Tax Amount, End
$ 1,370 
$ 9,123 
$ 14,358 
Fair Value Measurements (Narratives) (Details) (USD $)
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
 
Foreign currency cash flow hedge gain (loss) to be reclassified during next 12 months
$ 2,400,000 
 
 
Cost and equity method investments aggregate carrying amount
20,600,000 
14,500,000 
 
Income (Loss) from Equity Method Investments
4,700,000 
1,200,000 
(200,000)
Proceeds from Equity Method Investment, Dividends or Distributions
3,600,000 
 
 
Cost-method investments, realized gains
3,200,000 
 
 
Held for sale asset impairment
400,000 
900,000 
Indefinite-lived assets written-off
 
 
500,000 
Fair Value, Inputs, Level 2 [Member]
 
 
 
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
 
Cost and equity method investments other than temporary impairment
$ 1,400,000 
$ 0 
$ 500,000 
Chinese Venture Capital Fund [Member]
 
 
 
Fair Value Inputs, Assets, Quantitative Information [Line Items]
 
 
 
Equity Method Investment, Ownership Percentage
6.70% 
 
 
Fair Value Measurements (Assets and Liabilities Recorded at Fair Value on a Recurring Basis) (Details) (Fair Value, Measurements, Recurring [Member], USD $)
In Thousands, unless otherwise specified
Jan. 1, 2016
Jan. 2, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Foreign currency contracts
$ 307 
$ 1,568 
Interest rate swaps
 
990 
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Foreign currency contracts
Interest rate swaps
 
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Foreign currency contracts
307 
1,568 
Interest rate swaps
 
990 
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Foreign currency contracts
Interest rate swaps
 
$ 0 
Fair Value Measurements (Assets and Liabilities Measured on Non-recurring Basis) (Details) (Fair Value, Measurements, Nonrecurring [Member], USD $)
In Thousands, unless otherwise specified
Jan. 1, 2016
Jan. 2, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cost method investment
$ 1,100 
 
Assets Held for Sale
 
1,635 
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cost method investment
 
Assets Held for Sale
 
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cost method investment
1,100 
 
Assets Held for Sale
 
1,635 
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cost method investment
 
Assets Held for Sale
 
$ 0 
Business Segment, Geographic and Concentration Risk Information (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 12 Months Ended 1 Months Ended
Jan. 1, 2016
Segment
Jan. 1, 2016
QiG [Member]
Jan. 2, 2015
QiG [Member]
Jan. 1, 2016
Greatbatch Medical [Member]
Jan. 1, 2016
Lake Region Medical [Member]
Jan. 1, 2016
Accrued Expenses [Member]
QiG [Member]
Feb. 29, 2016
Subsequent Event [Member]
Noncontrolling Interest [Line Items]
 
 
 
 
 
 
 
Number of Reportable Segments
 
 
 
 
 
 
Stock conversion ratio
 
 
 
 
 
 
Controlling Interest, Ownership Percentage
 
100.00% 
89.00% 
 
 
 
 
Controlling Interest, Liability of Expenses Incurred, Percentage
 
100.00% 
 
 
 
 
 
Consideration to acquire additional noncontrolling interest
 
$ 16.7 
 
 
 
 
 
Consideration to acquire additional noncontrolling interest payable
 
 
 
 
 
6.8 
 
Noncontrolling Interest, Consideration Paid to Related Party
 
6.9 
 
 
 
 
 
Intersegment sales
 
 
 
$ 1.8 
$ 1.2 
 
 
Business Segment, Geographic And Concentration Risk Information (Sales by Product Lines) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Jan. 1, 2016
Oct. 2, 2015
Jul. 3, 2015
Apr. 3, 2015
Jan. 2, 2015
Oct. 3, 2014
Jul. 4, 2014
Apr. 4, 2014
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales
$ 317,567 
$ 146,637 
$ 174,890 
$ 161,320 
$ 169,726 
$ 171,699 
$ 172,081 
$ 174,281 
$ 800,414 
$ 687,787 
$ 663,945 
Advanced Surgical, Orthopaedics, and Portable Medical [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales
 
 
 
 
 
 
 
 
243,385 
216,339 
208,990 
Cardio And Vascular [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales
 
 
 
 
 
 
 
 
143,260 
58,770 
48,357 
Cardiac/Neuromodulation [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales
 
 
 
 
 
 
 
 
356,064 
330,921 
328,455 
Electrochem [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales
 
 
 
 
 
 
 
 
59,449 
81,757 
78,143 
Interproduct-Line Eliminations [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales
 
 
 
 
 
 
 
 
(1,744)
Operating Segments [Member] |
Greatbatch Medical [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales
 
 
 
 
 
 
 
 
649,977 
678,285 
660,902 
Operating Segments [Member] |
QiG [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales
 
 
 
 
 
 
 
 
13,571 
9,502 
3,043 
Operating Segments [Member] |
Lake Region Medical [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales
 
 
 
 
 
 
 
 
139,819 
Intersegment Eliminations [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales
 
 
 
 
 
 
 
 
$ (2,953)
$ 0 
$ 0 
Business Segment, Geographic And Concentration Risk Information (Reconciliation of Segment Information) (Details 1) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Segment Reporting Information [Line Items]
 
 
 
Operating income as reported
$ 13,146 
$ 75,654 
$ 61,339 
Unallocated other income (expense), net
(28,846)
925 
(12,501)
Income (loss) before provision for income taxes
(15,700)
76,579 
48,838 
Total depreciation and amortization
67,618 
37,457 
35,966 
Expenditures for tangible long-lived assets, excluding acquisitions
48,054 
25,646 
18,174 
Total assets
2,982,136 
955,122 
889,629 
Operating Segments [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Operating income as reported
67,466 
103,056 
81,321 
Total depreciation and amortization
64,271 
34,007 
32,651 
Expenditures for tangible long-lived assets, excluding acquisitions
41,606 
20,459 
15,376 
Total assets
2,838,317 
837,754 
814,614 
Operating Segments [Member] |
Greatbatch Medical [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Operating income as reported
109,737 
126,312 
111,805 
Total depreciation and amortization
30,160 
31,906 
31,112 
Expenditures for tangible long-lived assets, excluding acquisitions
32,921 
19,006 
13,242 
Total assets
798,609 
761,225 
758,369 
Operating Segments [Member] |
QiG [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Operating income as reported
(25,855)
(23,256)
(30,484)
Total depreciation and amortization
1,862 
2,101 
1,539 
Expenditures for tangible long-lived assets, excluding acquisitions
1,160 
1,453 
2,134 
Total assets
68,637 
76,529 
56,245 
Operating Segments [Member] |
Lake Region Medical [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Operating income as reported
(16,416)
Total depreciation and amortization
32,249 
Expenditures for tangible long-lived assets, excluding acquisitions
7,525 
Total assets
1,971,071 
Unallocated Amount to Segment [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Operating income as reported
(54,320)
(27,402)
(19,982)
Total depreciation and amortization
3,347 
3,450 
3,315 
Expenditures for tangible long-lived assets, excluding acquisitions
6,448 
5,187 
2,798 
Total assets
$ 143,819 
$ 117,368 
$ 75,015 
Business Segment, Geographic And Concentration Risk Information (Sales by Geographic Information) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Jan. 1, 2016
Oct. 2, 2015
Jul. 3, 2015
Apr. 3, 2015
Jan. 2, 2015
Oct. 3, 2014
Jul. 4, 2014
Apr. 4, 2014
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total sales
$ 317,567 
$ 146,637 
$ 174,890 
$ 161,320 
$ 169,726 
$ 171,699 
$ 172,081 
$ 174,281 
$ 800,414 
$ 687,787 
$ 663,945 
UNITED STATES [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total sales
 
 
 
 
 
 
 
 
401,380 
312,539 
325,090 
PUERTO RICO [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total sales
 
 
 
 
 
 
 
 
136,898 
127,702 
117,961 
BELGIUM [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total sales
 
 
 
 
 
 
 
 
62,546 
65,308 
67,155 
Rest Of World [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total sales
 
 
 
 
 
 
 
 
$ 199,590 
$ 182,238 
$ 153,739 
Business Segment, Geographic And Concentration Risk Information (Long lived Tangible Assets by Region) (Details) (USD $)
In Thousands, unless otherwise specified
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
 
Long-lived tangible assets
$ 379,492 
$ 144,925 
$ 145,773 
UNITED STATES [Member]
 
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
 
Long-lived tangible assets
264,556 
113,851 
116,484 
Rest Of World [Member]
 
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
 
Long-lived tangible assets
$ 114,936 
$ 31,074 
$ 29,289 
Business Segment, Geographic And Concentration Risk Information (Significant Customers) (Details)
12 Months Ended
Jan. 1, 2016
customer
Jan. 2, 2015
Jan. 3, 2014
Revenue, Major Customer [Line Items]
 
 
 
Number of Customers
 
 
Entity-Wide Revenue, Major Customer, Percentage
52.00% 
54.00% 
56.00% 
Entity Wide Accounts Receivable, Major Customer, Percentage
44.00% 
47.00% 
 
Customer A [Member]
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Entity-Wide Revenue, Major Customer, Percentage
18.00% 
18.00% 
16.00% 
Entity Wide Accounts Receivable, Major Customer, Percentage
23.00% 
23.00% 
 
Customer B [Member]
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Entity-Wide Revenue, Major Customer, Percentage
17.00% 
18.00% 
20.00% 
Entity Wide Accounts Receivable, Major Customer, Percentage
8.00% 
4.00% 
 
Customer C [Member]
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Entity-Wide Revenue, Major Customer, Percentage
12.00% 
12.00% 
13.00% 
Entity Wide Accounts Receivable, Major Customer, Percentage
6.00% 
8.00% 
 
Customer D [Member]
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Entity-Wide Revenue, Major Customer, Percentage
5.00% 
6.00% 
7.00% 
Entity Wide Accounts Receivable, Major Customer, Percentage
7.00% 
12.00% 
 
Sales Revenue, Net [Member] |
Customer Concentration Risk [Member]
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Number of Customers
Accounts Receivable [Member] |
Customer Concentration Risk [Member]
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Number of Customers
 
Quarterly Sales and Earnings Data - Unaudited (Details) (USD $)
3 Months Ended 12 Months Ended
Jan. 1, 2016
Oct. 2, 2015
Jul. 3, 2015
Apr. 3, 2015
Jan. 2, 2015
Oct. 3, 2014
Jul. 4, 2014
Apr. 4, 2014
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Sales
$ 317,567,000 
$ 146,637,000 
$ 174,890,000 
$ 161,320,000 
$ 169,726,000 
$ 171,699,000 
$ 172,081,000 
$ 174,281,000 
$ 800,414,000 
$ 687,787,000 
$ 663,945,000 
Gross profit
73,140,000 
51,646,000 
57,951,000 
52,398,000 
57,214,000 
58,118,000 
58,470,000 
57,596,000 
235,135,000 
231,398,000 
219,313,000 
Net income (loss)
(24,907,000)
22,000 
9,283,000 
8,008,000 
14,176,000 
14,012,000 
12,348,000 
14,922,000 
(7,594,000)
55,458,000 
36,267,000 
Earnings Per Share, Basic (in dollars per share)
$ (0.85)
$ 0.00 
$ 0.36 
$ 0.32 
$ 0.57 
$ 0.56 
$ 0.50 
$ 0.61 
$ (0.29)
$ 2.23 
$ 1.51 
Earnings Per Share, Diluted (in dollars per share)
$ (0.85)
$ 0.00 
$ 0.35 
$ 0.31 
$ 0.54 
$ 0.54 
$ 0.48 
$ 0.58 
$ (0.29)
$ 2.14 
$ 1.43 
Lake Region Medical [Member]
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual
138,600,000 
 
 
 
 
 
 
 
138,600,000 
 
 
Spinoff [Member] |
Lake Region Medical [Member]
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Transaction costs
$ 57,100,000 
$ 13,000,000 
 
 
 
 
 
 
 
 
 
Valuation and Qualifying Accounts (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 1, 2016
Jan. 2, 2015
Jan. 3, 2014
Allowance for Doubtful Accounts [Member]
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance at Beginning of Period
$ 1,411 
$ 2,001 
$ 2,372 
Charged to Costs & Expenses
(70)
98 
(93)
Charged to Other Accounts
459 1 2
14 2
(15)1 2
Deductions
(846)3
(702)3
(263)3
Balance at End of Period
954 
1,411 
2,001 
Valuation Allowance of Deferred Tax Assets [Member]
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance at Beginning of Period
10,709 
11,661 
12,768 
Charged to Costs & Expenses
788 4
(729)4
(1,263)4
Charged to Other Accounts
27,836 2
2
32 2
Deductions
(162)4 5
(223)4
124 5
Balance at End of Period
$ 39,171 
$ 10,709 
$ 11,661