| Debt
|
|
|
|
|
|
|
|
Assets divested | |||
Cash and cash equivalents | $ | 76,256 | |
Other current assets | 977 | ||
Property, plant and equipment, net | 4,407 | ||
Amortizing intangible assets, net | 1,931 | ||
Goodwill | 40,830 | ||
Deferred income taxes | 6,446 | ||
Total assets divested | 130,847 | ||
Liabilities transferred | |||
Current liabilities | 2,119 | ||
Net assets divested | $ | 128,728 |
|
Nine Months Ended | |||||||
(in thousands) | September 29, 2017 | September 30, 2016 | |||||
Noncash investing and financing activities: | |||||||
Property, plant and equipment purchases included in accounts payable | $ | 6,406 | $ | 5,062 | |||
Purchase of technology included in accrued expenses | — | 1,000 | |||||
Divestiture of noncash assets | — | 54,591 | |||||
Divestiture of liabilities | — | 2,119 |
|
September 29, 2017 | December 30, 2016 | ||||||
Raw materials | $ | 102,247 | $ | 100,738 | |||
Work-in-process | 101,098 | 89,224 | |||||
Finished goods | 43,627 | 35,189 | |||||
Total | $ | 246,972 | $ | 225,151 |
|
Medical | Non- Medical | Total | |||||||||
December 30, 2016 | $ | 950,326 | $ | 17,000 | $ | 967,326 | |||||
Foreign currency translation | 19,990 | — | 19,990 | ||||||||
September 29, 2017 | $ | 970,316 | $ | 17,000 | $ | 987,316 |
Gross Carrying Amount | Accumulated Amortization | Foreign Currency Translation | Net Carrying Amount | ||||||||||||
September 29, 2017 | |||||||||||||||
Definite-lived: | |||||||||||||||
Purchased technology and patents | $ | 256,719 | $ | (113,460 | ) | $ | 4,434 | $ | 147,693 | ||||||
Customer lists | 759,987 | (80,720 | ) | 13,304 | 692,571 | ||||||||||
Other | 4,534 | (5,230 | ) | 788 | 92 | ||||||||||
Total | $ | 1,021,240 | $ | (199,410 | ) | $ | 18,526 | $ | 840,356 | ||||||
Indefinite-lived: | |||||||||||||||
Trademarks and tradenames | $ | 90,288 | |||||||||||||
December 30, 2016 | |||||||||||||||
Definite-lived: | |||||||||||||||
Purchased technology and patents | $ | 256,719 | $ | (100,719 | ) | $ | 333 | $ | 156,333 | ||||||
Customer lists | 759,987 | (60,474 | ) | (6,269 | ) | 693,244 | |||||||||
Other | 4,534 | (5,142 | ) | 803 | 195 | ||||||||||
Total | $ | 1,021,240 | $ | (166,335 | ) | $ | (5,133 | ) | $ | 849,772 | |||||
Indefinite-lived: | |||||||||||||||
Trademarks and tradenames | $ | 90,288 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Cost of sales | $ | 4,138 | $ | 4,228 | $ | 12,333 | $ | 12,708 | |||||||
Selling, general and administrative expenses | 6,776 | 5,109 | 20,333 | 15,368 | |||||||||||
Research, development and engineering costs, net | 137 | 136 | 409 | 375 | |||||||||||
Total intangible asset amortization expense | $ | 11,051 | $ | 9,473 | $ | 33,075 | $ | 28,451 |
2017 | 2018 | 2019 | 2020 | 2021 | After 2021 | ||||||||||||||||||
Amortization Expense | $ | 11,083 | $ | 45,543 | $ | 45,653 | $ | 46,266 | $ | 45,138 | $ | 646,673 |
|
September 29, 2017 | December 30, 2016 | ||||||
Senior secured term loan A | $ | 342,188 | $ | 356,250 | |||
Senior secured term loan B | 883,286 | 1,014,750 | |||||
9.125% senior notes due 2023 | 360,000 | 360,000 | |||||
Revolving line of credit | 79,000 | 40,000 | |||||
Unamortized discount on term loan B and debt issuance costs | (34,520 | ) | (40,837 | ) | |||
Total debt | 1,629,954 | 1,730,163 | |||||
Less current portion of long-term debt | 28,125 | 31,344 | |||||
Total long-term debt | $ | 1,601,829 | $ | 1,698,819 |
2017 | 2018 | 2019 | 2020 | 2021 | After 2021 | |||||||||||||||||||
Future minimum principal payments | $ | 7,031 | $ | 30,469 | $ | 37,500 | $ | 116,500 | $ | 229,688 | $ | 1,243,286 |
December 30, 2016 | $ | 3,800 | |
Amortization during the period | (744 | ) | |
September 29, 2017 | $ | 3,056 |
Debt Issuance Costs | Unamortized Discount on TLB Facility | Total | |||||||||
December 30, 2016 | $ | 32,096 | $ | 8,741 | $ | 40,837 | |||||
Financing costs incurred | 1,789 | — | 1,789 | ||||||||
Write-off of debt issuance costs and unamortized discount(1) | (2,244 | ) | (1,028 | ) | (3,272 | ) | |||||
Amortization during the period | (3,878 | ) | (956 | ) | (4,834 | ) | |||||
September 29, 2017 | $ | 27,763 | $ | 6,757 | $ | 34,520 |
(1) | The Company prepaid portions of its TLB Facility during 2017. The Company recognized losses from extinguishment of debt during the three and nine months ended September 29, 2017 of $0.8 million and $3.3 million, respectively, which is included in Interest Expense, Net in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. The loss from extinguishment of debt represents the portion of the unamortized discount and debt issuance costs related to the portion of the TLB Facility that was prepaid. |
Notional Amount | Start Date | End Date | Pay Fixed Rate | Receive Current Floating Rate | Fair Value | Balance Sheet Location | ||||||||||||
$ | 200,000 | Jun-17 | Jun-20 | 1.1325 | % | 1.2367 | % | $ | 3,054 | Other Long-Term Assets |
|
December 30, 2016 | $ | 7,556 | |
Net defined benefit cost | 505 | ||
Benefit payments | (70 | ) | |
Foreign currency translation | 927 | ||
September 29, 2017 | $ | 8,918 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Service cost | $ | 120 | $ | 108 | $ | 345 | $ | 326 | |||||||
Interest cost | 42 | 44 | 120 | 132 | |||||||||||
Amortization of net loss | 19 | 47 | 55 | 140 | |||||||||||
Expected return on plan assets | (5 | ) | (5 | ) | (15 | ) | (14 | ) | |||||||
Net defined benefit cost | $ | 176 | $ | 194 | $ | 505 | $ | 584 |
|
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Stock options | $ | 372 | $ | 663 | $ | 1,365 | $ | 1,857 | |||||||
Restricted stock and restricted stock units | 1,573 | 1,554 | 8,530 | 5,322 | |||||||||||
Total stock-based compensation expense | $ | 1,945 | $ | 2,217 | $ | 9,895 | $ | 7,179 | |||||||
Cost of sales | $ | 131 | $ | 158 | $ | 612 | $ | 505 | |||||||
Selling, general and administrative expenses | 1,874 | 1,677 | 6,766 | 4,860 | |||||||||||
Research, development and engineering costs, net | 144 | 115 | 428 | 408 | |||||||||||
Other operating expenses, net | (204 | ) | 267 | 2,089 | 1,406 | ||||||||||
Total stock-based compensation expense | $ | 1,945 | $ | 2,217 | $ | 9,895 | $ | 7,179 |
Nine Months Ended | |||||||
September 29, 2017 | September 30, 2016 | ||||||
Weighted average fair value | $ | 12.86 | $ | 9.25 | |||
Risk-free interest rate | 1.77 | % | 1.56 | % | |||
Expected volatility | 37 | % | 26 | % | |||
Expected life (in years) | 4.5 | 5.0 | |||||
Expected dividend yield | — | % | — | % |
Number of Stock Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (In Years) | Aggregate Intrinsic Value (In Millions) | |||||||||
Outstanding at December 30, 2016 | 1,739,972 | $ | 28.26 | |||||||||
Granted | 125,020 | 38.78 | ||||||||||
Exercised | (680,065 | ) | 25.11 | |||||||||
Forfeited or expired | (118,167 | ) | 45.87 | |||||||||
Outstanding at September 29, 2017 | 1,066,760 | $ | 29.55 | 5.9 | $ | 23.0 | ||||||
Exercisable at September 29, 2017 | 818,663 | $ | 27.24 | 5.0 | $ | 19.6 |
Time-Vested Activity | Weighted Average Fair Value | |||||
Nonvested at December 30, 2016 | 39,394 | $ | 45.51 | |||
Granted | 304,857 | 33.98 | ||||
Vested | (62,543 | ) | 32.45 | |||
Forfeited | (34,525 | ) | 37.83 | |||
Nonvested at September 29, 2017 | 247,183 | $ | 35.67 |
Performance- Vested Activity | Weighted Average Fair Value | |||||
Nonvested at December 30, 2016 | 356,586 | $ | 31.87 | |||
Granted | 419,112 | 31.62 | ||||
Forfeited | (301,003 | ) | 30.76 | |||
Nonvested at September 29, 2017 | 474,695 | $ | 32.35 |
|
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Investments in capacity and capabilities | $ | 1,542 | $ | 4,542 | $ | 4,407 | $ | 13,821 | |||||||
Lake Region Medical consolidations | 1,456 | 2,908 | 3,623 | 7,355 | |||||||||||
Acquisition and integration costs | 2,267 | 5,319 | 10,057 | 23,143 | |||||||||||
Asset dispositions, severance and other | 854 | 272 | 6,528 | 5,057 | |||||||||||
Other consolidation and optimization initiatives | 145 | 329 | 340 | 628 | |||||||||||
Total other operating expenses, net | $ | 6,264 | $ | 13,370 | $ | 24,955 | $ | 50,004 |
• | 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 end of 2017 and is dependent upon our customers’ validation and qualification of the transferred products as well as regulatory approvals worldwide. |
• | Functions performed at the Company’s facilities in Beaverton, OR and Raynham, MA to manufacture products for the portable medical market were transferred to a new facility in Tijuana, Mexico. Products manufactured at the Beaverton facility, which do not serve the portable medical market, were transferred to the Company’s Raynham facility. This initiative was substantially completed during the first half of 2016. The final closure of the Beaverton, OR site occurred in the fourth quarter of 2016. |
• | The design engineering responsibilities previously performed at the Company’s Cleveland, OH facility were transferred to the Company’s facilities in Minnesota in 2015. |
• | The realignment of the Company’s commercial sales operations was completed in 2015. |
• | Severance and retention: $6.0 million - $7.0 million; |
• | Accelerated depreciation and asset write-offs: $3.0 million; and |
• | Other: $45.0 million - $46.0 million |
Severance and Retention | Accelerated Depreciation/ Asset Write-offs | Other | Total | ||||||||||||
December 30, 2016 | $ | 66 | $ | — | $ | — | $ | 66 | |||||||
Restructuring charges | 264 | — | 4,143 | 4,407 | |||||||||||
Cash payments | (259 | ) | — | (4,140 | ) | (4,399 | ) | ||||||||
September 29, 2017 | $ | 71 | $ | — | $ | 3 | $ | 74 |
• | Severance and retention: $5.0 million - $7.0 million; |
• | Accelerated depreciation and asset write-offs: approximately $1.0 million - $2.0 million; and |
• | Other: $14.0 million - $16.0 million. |
Severance and Retention | Accelerated Depreciation/ Asset Write-offs | Other | Total | ||||||||||||
December 30, 2016 | $ | 729 | $ | — | $ | 402 | $ | 1,131 | |||||||
Restructuring charges | 1,129 | — | 2,494 | 3,623 | |||||||||||
Cash payments | (856 | ) | — | (2,896 | ) | (3,752 | ) | ||||||||
September 29, 2017 | $ | 1,002 | $ | — | $ | — | $ | 1,002 |
|
|
December 30, 2016 | $ | 3,911 | |
Additions to warranty reserve, net of reversals | 2,316 | ||
Warranty claims settled | (2,102 | ) | |
September 29, 2017 | $ | 4,125 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Increase in sales | $ | 594 | $ | — | $ | 733 | $ | — | |||||||
Increase (decrease) in cost of sales | (512 | ) | 929 | 371 | 2,316 | ||||||||||
Ineffective portion of change in fair value | — | — | — | — |
Aggregate Notional Amount | Start Date | End Date | $/Foreign Currency | Fair Value | Balance Sheet Location | |||||||||||
$ | 6,163 | Jan 2017 | Dec 2017 | 0.0514 | Peso | $ | 366 | Prepaid expenses and other current assets | ||||||||
$ | 6,448 | Feb 2017 | Dec 2017 | 1.0747 | Euro | $ | 660 | Prepaid expenses and other current assets |
|
Defined Benefit Plan Liability | Cash Flow Hedges | Foreign Currency Translation Adjustment | Total Pre-Tax Amount | Tax | Net-of-Tax Amount | ||||||||||||||||||
June 30, 2017 | $ | (1,475 | ) | $ | 4,601 | $ | 25,475 | $ | 28,601 | $ | (1,398 | ) | $ | 27,203 | |||||||||
Unrealized gain on cash flow hedges | — | 633 | — | 633 | (222 | ) | 411 | ||||||||||||||||
Realized gain on foreign currency hedges | — | (1,106 | ) | — | (1,106 | ) | 387 | (719 | ) | ||||||||||||||
Realized gain on interest rate swap hedges | — | (49 | ) | — | (49 | ) | 18 | (31 | ) | ||||||||||||||
Foreign currency translation gain | — | — | 16,728 | 16,728 | — | 16,728 | |||||||||||||||||
September 29, 2017 | $ | (1,475 | ) | $ | 4,079 | $ | 42,203 | $ | 44,807 | $ | (1,215 | ) | $ | 43,592 |
Defined Benefit Plan Liability | Cash Flow Hedges | Foreign Currency Translation Adjustment | Total Pre-Tax Amount | Tax | Net-of-Tax Amount | ||||||||||||||||||
December 30, 2016 | $ | (1,475 | ) | $ | 1,420 | $ | (15,660 | ) | $ | (15,715 | ) | $ | (285 | ) | $ | (16,000 | ) | ||||||
Unrealized gain on cash flow hedges | — | 3,414 | — | 3,414 | (1,195 | ) | 2,219 | ||||||||||||||||
Realized gain on foreign currency hedges | — | (362 | ) | — | (362 | ) | 127 | (235 | ) | ||||||||||||||
Realized gain on interest rate swap hedges | — | (393 | ) | — | (393 | ) | 138 | (255 | ) | ||||||||||||||
Foreign currency translation gain | — | — | 57,863 | 57,863 | — | 57,863 | |||||||||||||||||
September 29, 2017 | $ | (1,475 | ) | $ | 4,079 | $ | 42,203 | $ | 44,807 | $ | (1,215 | ) | $ | 43,592 |
Defined Benefit Plan Liability | Cash Flow Hedges | Foreign Currency Translation Adjustment | Total Pre-Tax Amount | Tax | Net-of-Tax Amount | ||||||||||||||||||
July 1, 2016 | $ | (1,179 | ) | $ | (3,746 | ) | $ | 12,668 | $ | 7,743 | $ | 1,806 | $ | 9,549 | |||||||||
Unrealized loss on cash flow hedges | — | (101 | ) | — | (101 | ) | 35 | (66 | ) | ||||||||||||||
Realized loss on foreign currency hedges | — | 929 | — | 929 | (324 | ) | 605 | ||||||||||||||||
Realized loss on interest rate swap hedges | — | 50 | — | 50 | (18 | ) | 32 | ||||||||||||||||
Foreign currency translation gain | — | — | 3,191 | 3,191 | — | 3,191 | |||||||||||||||||
September 30, 2016 | $ | (1,179 | ) | $ | (2,868 | ) | $ | 15,859 | $ | 11,812 | $ | 1,499 | $ | 13,311 |
Defined Benefit Plan Liability | Cash Flow Hedges | Foreign Currency Translation Adjustment | Total Pre-Tax Amount | Tax | Net-of-Tax Amount | ||||||||||||||||||
January 1, 2016 | $ | (1,179 | ) | $ | (2,392 | ) | $ | 3,609 | $ | 38 | $ | 1,332 | $ | 1,370 | |||||||||
Unrealized loss on cash flow hedges | — | (2,842 | ) | — | (2,842 | ) | 995 | (1,847 | ) | ||||||||||||||
Realized loss on foreign currency hedges | — | 2,316 | — | 2,316 | (810 | ) | 1,506 | ||||||||||||||||
Realized loss on interest rate swap hedges | — | 50 | — | 50 | (18 | ) | 32 | ||||||||||||||||
Foreign currency translation gain | — | — | 12,250 | 12,250 | — | 12,250 | |||||||||||||||||
September 30, 2016 | $ | (1,179 | ) | $ | (2,868 | ) | $ | 15,859 | $ | 11,812 | $ | 1,499 | $ | 13,311 |
|
Fair Value | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
September 29, 2017 | ||||||||||||||||
Assets: Foreign currency contracts | $ | 1,026 | $ | — | $ | 1,026 | $ | — | ||||||||
Assets: Interest rate swap | 3,054 | — | 3,054 | — | ||||||||||||
December 30, 2016 | ||||||||||||||||
Assets: Interest rate swaps | $ | 3,482 | $ | — | $ | 3,482 | $ | — | ||||||||
Liabilities: Foreign currency contracts | 2,063 | — | 2,063 | — |
|
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Segment sales by product line: | |||||||||||||||
Medical | |||||||||||||||
Cardio & Vascular | $ | 138,982 | $ | 129,347 | $ | 396,321 | $ | 365,271 | |||||||
Cardiac & Neuromodulation | 101,616 | 108,147 | 311,614 | 323,599 | |||||||||||
Advanced Surgical, Orthopedics & Portable Medical | 107,581 | 100,203 | 321,287 | 307,956 | |||||||||||
Total Medical | 348,179 | 337,697 | 1,029,222 | 996,826 | |||||||||||
Non-Medical | 15,129 | 8,870 | 42,218 | 30,361 | |||||||||||
Total sales | $ | 363,308 | $ | 346,567 | $ | 1,071,440 | $ | 1,027,187 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Segment income from operations: | |||||||||||||||
Medical | $ | 50,168 | $ | 54,979 | $ | 155,761 | $ | 138,151 | |||||||
Non-Medical | 3,375 | (1,425 | ) | 9,877 | 626 | ||||||||||
Total segment income from operations | 53,543 | 53,554 | 165,638 | 138,777 | |||||||||||
Unallocated operating expenses | (14,912 | ) | (16,692 | ) | (60,723 | ) | (61,512 | ) | |||||||
Operating income | 38,631 | 36,862 | 104,915 | 77,265 | |||||||||||
Unallocated expenses, net | (26,641 | ) | (28,145 | ) | (93,004 | ) | (80,623 | ) | |||||||
Income (loss) before income taxes | $ | 11,990 | $ | 8,717 | $ | 11,911 | $ | (3,358 | ) |
|
• | recording all tax effects associated with stock-based compensation through the income statement, as opposed to recording certain amounts in other paid-in capital, which eliminates the requirements to calculate a windfall pool; |
• | allowing entities to withhold shares to satisfy the employer’s statutory tax withholding requirement up to the highest marginal tax rate applicable to employees rather than the employer’s minimum statutory rate, without requiring liability classification for the award; |
• | modifying the requirement to estimate the number of awards that will ultimately vest by providing an accounting policy election to either estimate the number of forfeitures or recognize forfeitures as they occur; |
• | changing certain presentation requirements in the statement of cash flows, including removing the requirement to present excess tax benefits as an inflow from financing activities and an outflow from operating activities, and requiring the cash paid to taxing authorities arising from withheld shares to be classified as a financing activity; and |
• | the assumed proceeds from applying the treasury stock method when computing EPS is amended to exclude the amount of excess tax benefits that would be recognized in additional paid-in capital. |
|
|
Assets divested | |||
Cash and cash equivalents | $ | 76,256 | |
Other current assets | 977 | ||
Property, plant and equipment, net | 4,407 | ||
Amortizing intangible assets, net | 1,931 | ||
Goodwill | 40,830 | ||
Deferred income taxes | 6,446 | ||
Total assets divested | 130,847 | ||
Liabilities transferred | |||
Current liabilities | 2,119 | ||
Net assets divested | $ | 128,728 |
|
Nine Months Ended | |||||||
(in thousands) | September 29, 2017 | September 30, 2016 | |||||
Noncash investing and financing activities: | |||||||
Property, plant and equipment purchases included in accounts payable | $ | 6,406 | $ | 5,062 | |||
Purchase of technology included in accrued expenses | — | 1,000 | |||||
Divestiture of noncash assets | — | 54,591 | |||||
Divestiture of liabilities | — | 2,119 |
|
September 29, 2017 | December 30, 2016 | ||||||
Raw materials | $ | 102,247 | $ | 100,738 | |||
Work-in-process | 101,098 | 89,224 | |||||
Finished goods | 43,627 | 35,189 | |||||
Total | $ | 246,972 | $ | 225,151 |
|
Medical | Non- Medical | Total | |||||||||
December 30, 2016 | $ | 950,326 | $ | 17,000 | $ | 967,326 | |||||
Foreign currency translation | 19,990 | — | 19,990 | ||||||||
September 29, 2017 | $ | 970,316 | $ | 17,000 | $ | 987,316 |
Gross Carrying Amount | Accumulated Amortization | Foreign Currency Translation | Net Carrying Amount | ||||||||||||
September 29, 2017 | |||||||||||||||
Definite-lived: | |||||||||||||||
Purchased technology and patents | $ | 256,719 | $ | (113,460 | ) | $ | 4,434 | $ | 147,693 | ||||||
Customer lists | 759,987 | (80,720 | ) | 13,304 | 692,571 | ||||||||||
Other | 4,534 | (5,230 | ) | 788 | 92 | ||||||||||
Total | $ | 1,021,240 | $ | (199,410 | ) | $ | 18,526 | $ | 840,356 | ||||||
Indefinite-lived: | |||||||||||||||
Trademarks and tradenames | $ | 90,288 | |||||||||||||
December 30, 2016 | |||||||||||||||
Definite-lived: | |||||||||||||||
Purchased technology and patents | $ | 256,719 | $ | (100,719 | ) | $ | 333 | $ | 156,333 | ||||||
Customer lists | 759,987 | (60,474 | ) | (6,269 | ) | 693,244 | |||||||||
Other | 4,534 | (5,142 | ) | 803 | 195 | ||||||||||
Total | $ | 1,021,240 | $ | (166,335 | ) | $ | (5,133 | ) | $ | 849,772 | |||||
Indefinite-lived: | |||||||||||||||
Trademarks and tradenames | $ | 90,288 |
Gross Carrying Amount | Accumulated Amortization | Foreign Currency Translation | Net Carrying Amount | ||||||||||||
September 29, 2017 | |||||||||||||||
Definite-lived: | |||||||||||||||
Purchased technology and patents | $ | 256,719 | $ | (113,460 | ) | $ | 4,434 | $ | 147,693 | ||||||
Customer lists | 759,987 | (80,720 | ) | 13,304 | 692,571 | ||||||||||
Other | 4,534 | (5,230 | ) | 788 | 92 | ||||||||||
Total | $ | 1,021,240 | $ | (199,410 | ) | $ | 18,526 | $ | 840,356 | ||||||
Indefinite-lived: | |||||||||||||||
Trademarks and tradenames | $ | 90,288 | |||||||||||||
December 30, 2016 | |||||||||||||||
Definite-lived: | |||||||||||||||
Purchased technology and patents | $ | 256,719 | $ | (100,719 | ) | $ | 333 | $ | 156,333 | ||||||
Customer lists | 759,987 | (60,474 | ) | (6,269 | ) | 693,244 | |||||||||
Other | 4,534 | (5,142 | ) | 803 | 195 | ||||||||||
Total | $ | 1,021,240 | $ | (166,335 | ) | $ | (5,133 | ) | $ | 849,772 | |||||
Indefinite-lived: | |||||||||||||||
Trademarks and tradenames | $ | 90,288 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Cost of sales | $ | 4,138 | $ | 4,228 | $ | 12,333 | $ | 12,708 | |||||||
Selling, general and administrative expenses | 6,776 | 5,109 | 20,333 | 15,368 | |||||||||||
Research, development and engineering costs, net | 137 | 136 | 409 | 375 | |||||||||||
Total intangible asset amortization expense | $ | 11,051 | $ | 9,473 | $ | 33,075 | $ | 28,451 |
2017 | 2018 | 2019 | 2020 | 2021 | After 2021 | ||||||||||||||||||
Amortization Expense | $ | 11,083 | $ | 45,543 | $ | 45,653 | $ | 46,266 | $ | 45,138 | $ | 646,673 |
|
September 29, 2017 | December 30, 2016 | ||||||
Senior secured term loan A | $ | 342,188 | $ | 356,250 | |||
Senior secured term loan B | 883,286 | 1,014,750 | |||||
9.125% senior notes due 2023 | 360,000 | 360,000 | |||||
Revolving line of credit | 79,000 | 40,000 | |||||
Unamortized discount on term loan B and debt issuance costs | (34,520 | ) | (40,837 | ) | |||
Total debt | 1,629,954 | 1,730,163 | |||||
Less current portion of long-term debt | 28,125 | 31,344 | |||||
Total long-term debt | $ | 1,601,829 | $ | 1,698,819 |
2017 | 2018 | 2019 | 2020 | 2021 | After 2021 | |||||||||||||||||||
Future minimum principal payments | $ | 7,031 | $ | 30,469 | $ | 37,500 | $ | 116,500 | $ | 229,688 | $ | 1,243,286 |
December 30, 2016 | $ | 3,800 | |
Amortization during the period | (744 | ) | |
September 29, 2017 | $ | 3,056 |
Debt Issuance Costs | Unamortized Discount on TLB Facility | Total | |||||||||
December 30, 2016 | $ | 32,096 | $ | 8,741 | $ | 40,837 | |||||
Financing costs incurred | 1,789 | — | 1,789 | ||||||||
Write-off of debt issuance costs and unamortized discount(1) | (2,244 | ) | (1,028 | ) | (3,272 | ) | |||||
Amortization during the period | (3,878 | ) | (956 | ) | (4,834 | ) | |||||
September 29, 2017 | $ | 27,763 | $ | 6,757 | $ | 34,520 |
(1) | The Company prepaid portions of its TLB Facility during 2017. The Company recognized losses from extinguishment of debt during the three and nine months ended September 29, 2017 of $0.8 million and $3.3 million, respectively, which is included in Interest Expense, Net in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. The loss from extinguishment of debt represents the portion of the unamortized discount and debt issuance costs related to the portion of the TLB Facility that was prepaid. |
Notional Amount | Start Date | End Date | Pay Fixed Rate | Receive Current Floating Rate | Fair Value | Balance Sheet Location | ||||||||||||
$ | 200,000 | Jun-17 | Jun-20 | 1.1325 | % | 1.2367 | % | $ | 3,054 | Other Long-Term Assets |
|
December 30, 2016 | $ | 7,556 | |
Net defined benefit cost | 505 | ||
Benefit payments | (70 | ) | |
Foreign currency translation | 927 | ||
September 29, 2017 | $ | 8,918 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Service cost | $ | 120 | $ | 108 | $ | 345 | $ | 326 | |||||||
Interest cost | 42 | 44 | 120 | 132 | |||||||||||
Amortization of net loss | 19 | 47 | 55 | 140 | |||||||||||
Expected return on plan assets | (5 | ) | (5 | ) | (15 | ) | (14 | ) | |||||||
Net defined benefit cost | $ | 176 | $ | 194 | $ | 505 | $ | 584 |
|
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Stock options | $ | 372 | $ | 663 | $ | 1,365 | $ | 1,857 | |||||||
Restricted stock and restricted stock units | 1,573 | 1,554 | 8,530 | 5,322 | |||||||||||
Total stock-based compensation expense | $ | 1,945 | $ | 2,217 | $ | 9,895 | $ | 7,179 | |||||||
Cost of sales | $ | 131 | $ | 158 | $ | 612 | $ | 505 | |||||||
Selling, general and administrative expenses | 1,874 | 1,677 | 6,766 | 4,860 | |||||||||||
Research, development and engineering costs, net | 144 | 115 | 428 | 408 | |||||||||||
Other operating expenses, net | (204 | ) | 267 | 2,089 | 1,406 | ||||||||||
Total stock-based compensation expense | $ | 1,945 | $ | 2,217 | $ | 9,895 | $ | 7,179 |
Nine Months Ended | |||||||
September 29, 2017 | September 30, 2016 | ||||||
Weighted average fair value | $ | 12.86 | $ | 9.25 | |||
Risk-free interest rate | 1.77 | % | 1.56 | % | |||
Expected volatility | 37 | % | 26 | % | |||
Expected life (in years) | 4.5 | 5.0 | |||||
Expected dividend yield | — | % | — | % |
Number of Stock Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (In Years) | Aggregate Intrinsic Value (In Millions) | |||||||||
Outstanding at December 30, 2016 | 1,739,972 | $ | 28.26 | |||||||||
Granted | 125,020 | 38.78 | ||||||||||
Exercised | (680,065 | ) | 25.11 | |||||||||
Forfeited or expired | (118,167 | ) | 45.87 | |||||||||
Outstanding at September 29, 2017 | 1,066,760 | $ | 29.55 | 5.9 | $ | 23.0 | ||||||
Exercisable at September 29, 2017 | 818,663 | $ | 27.24 | 5.0 | $ | 19.6 |
Time-Vested Activity | Weighted Average Fair Value | |||||
Nonvested at December 30, 2016 | 39,394 | $ | 45.51 | |||
Granted | 304,857 | 33.98 | ||||
Vested | (62,543 | ) | 32.45 | |||
Forfeited | (34,525 | ) | 37.83 | |||
Nonvested at September 29, 2017 | 247,183 | $ | 35.67 |
Performance- Vested Activity | Weighted Average Fair Value | |||||
Nonvested at December 30, 2016 | 356,586 | $ | 31.87 | |||
Granted | 419,112 | 31.62 | ||||
Forfeited | (301,003 | ) | 30.76 | |||
Nonvested at September 29, 2017 | 474,695 | $ | 32.35 |
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Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Investments in capacity and capabilities | $ | 1,542 | $ | 4,542 | $ | 4,407 | $ | 13,821 | |||||||
Lake Region Medical consolidations | 1,456 | 2,908 | 3,623 | 7,355 | |||||||||||
Acquisition and integration costs | 2,267 | 5,319 | 10,057 | 23,143 | |||||||||||
Asset dispositions, severance and other | 854 | 272 | 6,528 | 5,057 | |||||||||||
Other consolidation and optimization initiatives | 145 | 329 | 340 | 628 | |||||||||||
Total other operating expenses, net | $ | 6,264 | $ | 13,370 | $ | 24,955 | $ | 50,004 |
Severance and Retention | Accelerated Depreciation/ Asset Write-offs | Other | Total | ||||||||||||
December 30, 2016 | $ | 66 | $ | — | $ | — | $ | 66 | |||||||
Restructuring charges | 264 | — | 4,143 | 4,407 | |||||||||||
Cash payments | (259 | ) | — | (4,140 | ) | (4,399 | ) | ||||||||
September 29, 2017 | $ | 71 | $ | — | $ | 3 | $ | 74 |
Severance and Retention | Accelerated Depreciation/ Asset Write-offs | Other | Total | ||||||||||||
December 30, 2016 | $ | 729 | $ | — | $ | 402 | $ | 1,131 | |||||||
Restructuring charges | 1,129 | — | 2,494 | 3,623 | |||||||||||
Cash payments | (856 | ) | — | (2,896 | ) | (3,752 | ) | ||||||||
September 29, 2017 | $ | 1,002 | $ | — | $ | — | $ | 1,002 |
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December 30, 2016 | $ | 3,911 | |
Additions to warranty reserve, net of reversals | 2,316 | ||
Warranty claims settled | (2,102 | ) | |
September 29, 2017 | $ | 4,125 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Increase in sales | $ | 594 | $ | — | $ | 733 | $ | — | |||||||
Increase (decrease) in cost of sales | (512 | ) | 929 | 371 | 2,316 | ||||||||||
Ineffective portion of change in fair value | — | — | — | — |
Aggregate Notional Amount | Start Date | End Date | $/Foreign Currency | Fair Value | Balance Sheet Location | |||||||||||
$ | 6,163 | Jan 2017 | Dec 2017 | 0.0514 | Peso | $ | 366 | Prepaid expenses and other current assets | ||||||||
$ | 6,448 | Feb 2017 | Dec 2017 | 1.0747 | Euro | $ | 660 | Prepaid expenses and other current assets |
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Defined Benefit Plan Liability | Cash Flow Hedges | Foreign Currency Translation Adjustment | Total Pre-Tax Amount | Tax | Net-of-Tax Amount | ||||||||||||||||||
June 30, 2017 | $ | (1,475 | ) | $ | 4,601 | $ | 25,475 | $ | 28,601 | $ | (1,398 | ) | $ | 27,203 | |||||||||
Unrealized gain on cash flow hedges | — | 633 | — | 633 | (222 | ) | 411 | ||||||||||||||||
Realized gain on foreign currency hedges | — | (1,106 | ) | — | (1,106 | ) | 387 | (719 | ) | ||||||||||||||
Realized gain on interest rate swap hedges | — | (49 | ) | — | (49 | ) | 18 | (31 | ) | ||||||||||||||
Foreign currency translation gain | — | — | 16,728 | 16,728 | — | 16,728 | |||||||||||||||||
September 29, 2017 | $ | (1,475 | ) | $ | 4,079 | $ | 42,203 | $ | 44,807 | $ | (1,215 | ) | $ | 43,592 |
Defined Benefit Plan Liability | Cash Flow Hedges | Foreign Currency Translation Adjustment | Total Pre-Tax Amount | Tax | Net-of-Tax Amount | ||||||||||||||||||
December 30, 2016 | $ | (1,475 | ) | $ | 1,420 | $ | (15,660 | ) | $ | (15,715 | ) | $ | (285 | ) | $ | (16,000 | ) | ||||||
Unrealized gain on cash flow hedges | — | 3,414 | — | 3,414 | (1,195 | ) | 2,219 | ||||||||||||||||
Realized gain on foreign currency hedges | — | (362 | ) | — | (362 | ) | 127 | (235 | ) | ||||||||||||||
Realized gain on interest rate swap hedges | — | (393 | ) | — | (393 | ) | 138 | (255 | ) | ||||||||||||||
Foreign currency translation gain | — | — | 57,863 | 57,863 | — | 57,863 | |||||||||||||||||
September 29, 2017 | $ | (1,475 | ) | $ | 4,079 | $ | 42,203 | $ | 44,807 | $ | (1,215 | ) | $ | 43,592 |
Defined Benefit Plan Liability | Cash Flow Hedges | Foreign Currency Translation Adjustment | Total Pre-Tax Amount | Tax | Net-of-Tax Amount | ||||||||||||||||||
July 1, 2016 | $ | (1,179 | ) | $ | (3,746 | ) | $ | 12,668 | $ | 7,743 | $ | 1,806 | $ | 9,549 | |||||||||
Unrealized loss on cash flow hedges | — | (101 | ) | — | (101 | ) | 35 | (66 | ) | ||||||||||||||
Realized loss on foreign currency hedges | — | 929 | — | 929 | (324 | ) | 605 | ||||||||||||||||
Realized loss on interest rate swap hedges | — | 50 | — | 50 | (18 | ) | 32 | ||||||||||||||||
Foreign currency translation gain | — | — | 3,191 | 3,191 | — | 3,191 | |||||||||||||||||
September 30, 2016 | $ | (1,179 | ) | $ | (2,868 | ) | $ | 15,859 | $ | 11,812 | $ | 1,499 | $ | 13,311 |
Defined Benefit Plan Liability | Cash Flow Hedges | Foreign Currency Translation Adjustment | Total Pre-Tax Amount | Tax | Net-of-Tax Amount | ||||||||||||||||||
January 1, 2016 | $ | (1,179 | ) | $ | (2,392 | ) | $ | 3,609 | $ | 38 | $ | 1,332 | $ | 1,370 | |||||||||
Unrealized loss on cash flow hedges | — | (2,842 | ) | — | (2,842 | ) | 995 | (1,847 | ) | ||||||||||||||
Realized loss on foreign currency hedges | — | 2,316 | — | 2,316 | (810 | ) | 1,506 | ||||||||||||||||
Realized loss on interest rate swap hedges | — | 50 | — | 50 | (18 | ) | 32 | ||||||||||||||||
Foreign currency translation gain | — | — | 12,250 | 12,250 | — | 12,250 | |||||||||||||||||
September 30, 2016 | $ | (1,179 | ) | $ | (2,868 | ) | $ | 15,859 | $ | 11,812 | $ | 1,499 | $ | 13,311 |
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Fair Value | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
September 29, 2017 | ||||||||||||||||
Assets: Foreign currency contracts | $ | 1,026 | $ | — | $ | 1,026 | $ | — | ||||||||
Assets: Interest rate swap | 3,054 | — | 3,054 | — | ||||||||||||
December 30, 2016 | ||||||||||||||||
Assets: Interest rate swaps | $ | 3,482 | $ | — | $ | 3,482 | $ | — | ||||||||
Liabilities: Foreign currency contracts | 2,063 | — | 2,063 | — |
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Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Segment sales by product line: | |||||||||||||||
Medical | |||||||||||||||
Cardio & Vascular | $ | 138,982 | $ | 129,347 | $ | 396,321 | $ | 365,271 | |||||||
Cardiac & Neuromodulation | 101,616 | 108,147 | 311,614 | 323,599 | |||||||||||
Advanced Surgical, Orthopedics & Portable Medical | 107,581 | 100,203 | 321,287 | 307,956 | |||||||||||
Total Medical | 348,179 | 337,697 | 1,029,222 | 996,826 | |||||||||||
Non-Medical | 15,129 | 8,870 | 42,218 | 30,361 | |||||||||||
Total sales | $ | 363,308 | $ | 346,567 | $ | 1,071,440 | $ | 1,027,187 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Segment income from operations: | |||||||||||||||
Medical | $ | 50,168 | $ | 54,979 | $ | 155,761 | $ | 138,151 | |||||||
Non-Medical | 3,375 | (1,425 | ) | 9,877 | 626 | ||||||||||
Total segment income from operations | 53,543 | 53,554 | 165,638 | 138,777 | |||||||||||
Unallocated operating expenses | (14,912 | ) | (16,692 | ) | (60,723 | ) | (61,512 | ) | |||||||
Operating income | 38,631 | 36,862 | 104,915 | 77,265 | |||||||||||
Unallocated expenses, net | (26,641 | ) | (28,145 | ) | (93,004 | ) | (80,623 | ) | |||||||
Income (loss) before income taxes | $ | 11,990 | $ | 8,717 | $ | 11,911 | $ | (3,358 | ) |
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