INTEGER HOLDINGS CORP, 10-Q filed on 5/13/2014
Quarterly Report
Document and Entity Information
3 Months Ended
Apr. 4, 2014
May 13, 2014
Document and Entity Information [Abstract]
 
 
Entity Registrant Name
GREATBATCH, INC. 
 
Entity Central Index Key
0001114483 
 
Document Type
10-Q 
 
Document Period End Date
Apr. 04, 2014 
 
Amendment Flag
false 
 
Document Fiscal Year Focus
2014 
 
Document Fiscal Period Focus
Q1 
 
Current Fiscal Year End Date
--01-02 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
24,880,319 
Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Thousands, unless otherwise specified
Apr. 4, 2014
Jan. 3, 2014
Current assets:
 
 
Cash and cash equivalents
$ 38,325 
$ 35,465 
Accounts receivable, net of allowance for doubtful accounts of $2.0 million in 2014 and 2013
117,221 
113,679 
Inventories
118,083 
118,358 
Refundable income taxes
0 
2,306 
Deferred income taxes
5,967 
6,008 
Prepaid expenses and other current assets
5,165 
6,717 
Total current assets
284,761 
282,533 
Property, plant and equipment, net
145,186 
145,773 
Amortizing intangible assets, net
72,922 
76,122 
Indefinite-lived intangible assets
20,288 
20,288 
Goodwill
347,251 
346,656 
Deferred income taxes
2,949 
2,933 
Other assets
17,020 
16,398 
Total assets
890,377 
890,703 
Current liabilities:
 
 
Accounts payable
43,122 
46,508 
Income taxes payable
1,889 
0 
Deferred income taxes
619 
613 
Accrued expenses
24,366 
44,681 
Total current liabilities
69,996 
91,802 
Long-term debt
195,000 
197,500 
Deferred income taxes
51,440 
52,012 
Other long-term liabilities
7,119 
7,334 
Total liabilities
323,555 
348,648 
Stockholders’ equity:
 
 
Preferred stock, $0.001 par value, authorized 100,000,000 shares; no shares issued or outstanding in 2014 or 2013
0 
0 
Common stock, $0.001 par value, authorized 100,000,000 shares; 24,836,970 shares issued and 24,820,665 shares outstanding in 2014; 24,459,153 shares issued and 24,422,555 shares outstanding in 2013
25 
24 
Additional paid-in capital
352,988 
344,915 
Treasury stock, at cost, 16,305 shares in 2014 and 36,598 shares in 2013
(720)
(1,232)
Retained earnings
198,912 
183,990 
Accumulated other comprehensive income
15,617 
14,358 
Total stockholders’ equity
566,822 
542,055 
Total liabilities and stockholders’ equity
$ 890,377 
$ 890,703 
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Apr. 4, 2014
Jan. 3, 2014
Current assets:
 
 
Allowance for doubtful accounts
$ 2.0 
$ 2.0 
Stockholders’ equity:
 
 
Preferred stock, par value
$ 0.001 
$ 0.001 
Preferred stock, shares authorized
100,000,000 
100,000,000 
Preferred stock, shares issued
0 
0 
Preferred stock, shares outstanding
0 
0 
Common stock, par value
$ 0.001 
$ 0.001 
Common stock, shares authorized
100,000,000 
100,000,000 
Common stock, shares issued
24,836,970 
24,459,153 
Common stock, shares outstanding
24,820,665 
24,422,555 
Treasury stock, shares
16,305 
36,598 
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Apr. 4, 2014
Mar. 29, 2013
Income Statement [Abstract]
 
 
Sales
$ 174,281 
$ 148,265 
Cost of sales
116,685 
99,516 
Gross profit
57,596 
48,749 
Operating expenses:
 
 
Selling, general and administrative expenses
21,755 
20,092 
Research, development and engineering costs, net
13,531 
11,080 
Other operating (income) expenses, net
(214)
3,238 
Total operating expenses
35,072 
34,410 
Operating income
22,524 
14,339 
Interest expense
1,084 
6,988 
Other (income) expense, net
(621)
285 
Income before provision for income taxes
22,061 
7,066 
Provision for income taxes
7,139 
1,403 
Net income
14,922 
5,663 
Earnings per share:
 
 
Basic
$ 0.61 
$ 0.24 
Diluted
$ 0.58 
$ 0.23 
Weighted average shares outstanding:
 
 
Basic
24,614 
23,750 
Diluted
25,694 
24,415 
Comprehensive Income
 
 
Net income
14,922 
5,663 
Foreign currency translation gain (loss)
1,182 
(3,063)
Net change in cash flow hedges, net of tax
77 
269 
Defined benefit plan liability adjustment, net of tax
0 
597 
Other comprehensive income (loss)
1,259 
(2,197)
Comprehensive income
$ 16,181 
$ 3,466 
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 4, 2014
Mar. 29, 2013
Cash flows from operating activities:
 
 
Net income
$ 14,922 
$ 5,663 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
 
 
Depreciation and amortization
9,252 
8,764 
Debt related amortization included in interest expense
192 
5,759 
Stock-based compensation
3,177 
2,431 
Other non-cash gains
(3,684)
(930)
Deferred income taxes
(590)
(29,212)
Changes in operating assets and liabilities:
 
 
Accounts receivable
(3,392)
(3,897)
Inventories
518 
(12,073)
Prepaid expenses and other current assets
1,564 
80 
Accounts payable
(2,663)
(512)
Accrued expenses
(16,733)
(13,920)
Income taxes payable
4,438 
30,252 
Net cash provided by (used in) operating activities
7,001 
(7,595)
Cash flows from investing activities:
 
 
Acquisition of property, plant and equipment
(5,974)
(6,745)
Proceeds from sale of orthopaedic product lines (Note 8)
2,531 
1,768 
Purchase of cost and equity method investments
0 
(810)
Other investing activities
0 
8 
Net cash used in investing activities
(3,443)
(5,779)
Cash flows from financing activities:
 
 
Principal payments of long-term debt
(2,500)
(205,782)
Proceeds from issuance of long-term debt
0 
208,000 
Issuance of common stock
3,445 
1,185 
Other financing activities
(1,608)
(81)
Net cash provided by (used in) financing activities
(663)
3,322 
Effect of foreign currency exchange rates on cash and cash equivalents
(35)
(88)
Net increase (decrease) in cash and cash equivalents
2,860 
(10,140)
Cash and cash equivalents, beginning of period
35,465 
20,284 
Cash and cash equivalents, end of period
$ 38,325 
$ 10,144 
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (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 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
2,161 
 
2,161 
 
 
 
Net shares issued under stock incentive plans, shares
 
378 
 
(74)
 
 
Net shares issued under stock incentive plans
2,084 
1 
5,786 
(3,703)
 
 
Shares contributed to 401(k), shares
 
 
 
95 
 
 
Shares contributed to 401(k)
4,341 
 
126 
4,215 
 
 
Net income
14,922 
 
 
 
14,922 
 
Total other comprehensive income (loss)
1,259 
 
 
 
 
1,259 
Balance at Apr. 04, 2014
$ 566,822 
$ 25 
$ 352,988 
$ (720)
$ 198,912 
$ 15,617 
Balance, shares at Apr. 04, 2014
 
24,837 
 
(16)
 
 
Basis of Presentation
BASIS OF PRESENTATION
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information (Accounting Standards Codification (“ASC”) 270, Interim Reporting) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information necessary for a full presentation of financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of Greatbatch, Inc. and its wholly-owned subsidiary, Greatbatch Ltd. (collectively “Greatbatch” or the “Company”), for the periods presented. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ materially from these estimates. The January 3, 2014 condensed consolidated balance sheet data was derived from audited consolidated financial statements but does not include all disclosures required by GAAP. For further information, refer to the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended January 3, 2014. The Company utilizes a fifty-two, fifty-three week fiscal year ending on the Friday nearest December 31st. The first quarter of 2014 and 2013 each contained 13 weeks, and ended on April 4, and March 29, respectively.
Supplemental Cash Flow Information
SUPPLEMENTAL CASH FLOW INFORMATION
SUPPLEMENTAL CASH FLOW INFORMATION
 
Three Months Ended
(in thousands)
April 4, 2014
 
March 29, 2013
Noncash investing and financing activities:
 
 
 
Common stock contributed to 401(k) Plan
$
4,341

 
$
2,477

Property, plant and equipment purchases included in accounts payable
1,180

 
1,219

Cash paid during the period for:
 
 
 
Interest
$
953

 
$
1,556

Income taxes
544

 
494

Inventories
INVENTORIES
INVENTORIES
Inventories are comprised of the following (in thousands):
 
As of
 
April 4, 2014
 
January 3, 2014
Raw materials
$
66,539

 
$
67,939

Work-in-process
36,779

 
36,670

Finished goods
14,765

 
13,749

Total
$
118,083

 
$
118,358

Intangible Assets
INTANGIBLE ASSETS
INTANGIBLE ASSETS
Amortizing intangible assets are comprised of the following (in thousands):
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Foreign
Currency
Translation
 
Net
Carrying
Amount
At April 4, 2014
 
 
 
 
 
 
 
Technology and patents
$
97,376

 
$
(70,708
)
 
$
1,993

 
$
28,661

Customer lists
68,257

 
(26,337
)
 
1,552

 
43,472

Other
4,434

 
(4,532
)
 
887

 
789

Total amortizing intangible assets
$
170,067

 
$
(101,577
)
 
$
4,432

 
$
72,922

At January 3, 2014
 
 
 
 
 
 
 
Technology and patents
$
97,376

 
$
(69,026
)
 
$
1,980

 
$
30,330

Customer lists
68,257

 
(24,671
)
 
1,367

 
44,953

Other
4,434

 
(4,399
)
 
804

 
839

Total amortizing intangible assets
$
170,067

 
$
(98,096
)
 
$
4,151

 
$
76,122


Aggregate intangible asset amortization expense is comprised of the following (in thousands):
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Cost of sales
$
1,563

 
$
1,780

Selling, general and administrative expenses
1,717

 
1,452

Research, development and engineering costs, net
201

 
136

Total intangible asset amortization expense
$
3,481

 
$
3,368


Estimated future intangible asset amortization expense based on the current carrying value is as follows (in thousands):
 
Estimated
Amortization
Expense
Remainder of 2014
$
10,238

2015
12,668

2016
10,373

2017
9,251

2018
6,962

Thereafter
23,430

Total estimated amortization expense
$
72,922


Indefinite-lived intangible assets are comprised of the following (in thousands):
 
Trademarks
and
Tradenames
At January 3, 2014
$
20,288

At April 4, 2014
$
20,288

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

 
$
41,800

 
$
346,656

Foreign currency translation
595

 
—

 
595

At April 4, 2014
$
305,451

 
$
41,800

 
$
347,251

Debt
DEBT
DEBT
Long-term debt is comprised of the following (in thousands):
 
As of
 
April 4, 2014
 
January 3, 2014
Revolving line of credit
$
—

 
$
—

Variable rate term loan
195,000

 
197,500

Total long-term debt
$
195,000

 
$
197,500


Credit Facility – In September 2013, the Company amended and extended its credit facility (the “Credit Facility”). The new Credit Facility provides a $300 million revolving credit facility (the “Revolving Credit Facility”), a $200 million term loan (the “Term Loan”), a $15 million letter of credit subfacility, and a $15 million swingline subfacility. The Credit Facility can be increased by $200 million upon the Company’s request and approval by the lenders. The Revolving Credit Facility has a maturity date of September 20, 2018, which may be extended to September 20, 2019 upon notice by the Company and subject to certain conditions. The principal of the Term Loan is payable in quarterly installments as specified in the Credit Facility until its maturity date of September 20, 2019, when the unpaid balance is due in full.
The Credit Facility is secured by the Company’s non-realty assets including cash, accounts receivable and inventories. Interest rates on the Revolving Credit Facility and Term Loan are, at the Company’s option either at: (i) the prime rate plus the applicable margin, which ranges between 0.0% and 0.75%, based on the Company’s total leverage ratio or (ii) the applicable LIBOR rate plus the applicable margin, which ranges between 1.375% and 2.75%, based on the Company’s total leverage ratio. Loans under the swingline subfacility will bear interest at the prime rate plus the applicable margin, which ranges between 0.0% and 0.75%, based on the Company’s total leverage ratio. The Company is also required to pay a commitment fee, which varies between 0.175% and 0.25% depending on the Company’s total leverage ratio.
The Credit Facility contains limitations on the incurrence of indebtedness, liens and licensing of intellectual property, investments and certain payments. The Credit Facility permits the Company to engage in the following activities up to an aggregate amount of $300 million: 1) engage in permitted acquisitions in the aggregate not to exceed $250 million; 2) make other investments in the aggregate not to exceed $100 million; 3) make stock repurchases and declare dividends not to exceed $150 million in the aggregate; and 4) make investments in foreign subsidiaries not to exceed $20 million in the aggregate. At any time that the total leverage ratio of the Company for the two most recently ended fiscal quarters is less than 2.75 to 1.0, the Company may make an election to reset each of the amounts specified above. Additionally, these limitations can be waived upon the Company’s request and approval of a majority of the lenders. As of April 4, 2014, the Company had available to it 100% of the above limits except for the aggregate limit and other investments limit which are now $298 million and $98 million, respectively.
 
The Credit Facility requires the Company to maintain a rolling four quarter ratio of adjusted EBITDA to interest expense of at least 3.0 to 1.0, and a total leverage ratio of not greater than 4.5 to 1.0 and a total leverage ratio not greater than 4.25 to 1.0 after January 2, 2016. The calculation of adjusted EBITDA and total leverage ratio excludes non-cash charges, extraordinary, unusual, or non-recurring expenses or losses, non-cash stock-based compensation, and non-recurring expenses or charges incurred in connection with permitted acquisitions. As of April 4, 2014, the Company was in compliance with all covenants under the Credit Facility.
The Credit Facility contains customary events of default. Upon the occurrence and during the continuance of an event of default, a majority of the lenders may declare the outstanding advances and all other obligations under the Credit Facility immediately due and payable.
As of April 4, 2014, the weighted average interest rate on borrowings under the Credit Facility, which does not take into account the impact of the Company’s interest rate swap, was 1.57%. As of April 4, 2014, the Company had $300 million of borrowing capacity available under the Credit Facility. This borrowing capacity may vary from period to period based upon the debt and EBITDA levels of the Company, which impacts the covenant calculations described above.
Interest Rate Swap – From time to time, the Company enters into interest rate swap agreements in order to hedge against potential changes in cash flows on the outstanding borrowings on the Credit Facility. The variable rate received on the interest rate swaps and the variable rate paid on the debt have the same rate of interest, excluding the credit spread, and resets and pays interest on the same date. During 2012, the Company entered into a three-year $150 million interest rate swap, which amortizes $50 million per year. This swap was entered into in order to hedge against potential changes in cash flows on the outstanding Credit Facility borrowings, which are also indexed to the one-month LIBOR rate. This swap is being accounted for as a cash flow hedge. Information regarding the Company’s outstanding interest rate swap as of April 4, 2014 is as follows (dollars in thousands):
Instrument
Type of
Hedge
 
Notional
Amount
 
Start
Date
 
End
Date
 
Pay
Fixed
Rate
 
Current
Receive
Floating
Rate
 
Fair
Value
April 4, 2014
 
Balance
Sheet Location
Interest rate swap
Cash flow
 
$
100,000

 
Feb-13
 
Feb-16
 
0.573
%
 
0.157
%
 
$
(330
)
 
Other Long-Term Liabilities

The estimated fair value of the interest rate swap agreement represents the amount the Company expects to receive (pay) to terminate the contract. No portion of the change in fair value of the Company’s interest rate swap during the three months ended April 4, 2014 was considered ineffective. The amount recorded as Interest Expense during the three months ended April 4, 2014 and March 29, 2013 related to the Company’s interest rate swap was $0.1 million and $0.06 million, respectively.
 
Convertible Subordinated Notes – In March 2007, the Company issued $197.8 million of convertible subordinated notes (“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):
 
Three months ended
 
April 4, 2014
 
March 29, 2013
Contractual interest
$
—

 
$
634

Discount amortization
—

 
5,368


The expected future minimum principal payments under the Term Loan as of April 4, 2014 are as follows (in thousands):
Remainder of 2014
$
7,500

2015
11,250

2016
16,250

2017
20,000

2018
20,000

Thereafter
120,000

Total
$
195,000


The Company has the ability and intent to use availability under the Revolving Credit Facility to fund principal payments on the Term Loan.
Deferred Financing Fees - The change in deferred financing fees is as follows (in thousands):
At January 3, 2014
$
3,860

Amortization during the period
(192
)
At April 4, 2014
$
3,668

Defined Benefit Plans
DEFINED BENEFIT PLANS
DEFINED BENEFIT PLANS
The Company is required to provide its employees located in Switzerland, Mexico and France certain statutorily mandated defined benefits. Under these plans, benefits accrue to employees based upon years of service, position, age and compensation. The defined benefit plan provided to employees located in Switzerland is a funded contributory plan while the plans that provide benefits to employees located in Mexico and France are unfunded and noncontributory. The liability and corresponding expense related to these benefit plans is based on actuarial computations of current and future benefits for employees.
During 2012, the Company transferred most major functions performed at its facilities in Switzerland into other existing facilities. As a result, the Company curtailed its defined benefit plan provided to employees at those Swiss facilities and recognized a curtailment gain during 2013. In accordance with ASC 715, this gain was recognized in Other Operating Expenses, Net as the related employees were terminated.
The change in net defined benefit plan liability is as follows (in thousands):
At January 3, 2014
$
1,691

Net defined benefit cost
77

Benefit payments
(131
)
Foreign currency translation
14

At April 4, 2014
$
1,651


Net defined benefit cost (income) is comprised of the following (in thousands):
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Service cost
$
52

 
$
82

Interest cost
19

 
63

Curtailment gain
—

 
(1,150
)
Amortization of net loss
6

 
—

Net defined benefit cost (income)
$
77

 
$
(1,005
)
Stock-Based Compensation
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION
The components and classification of stock-based compensation expense were as follows (in thousands):
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Stock options
$
604

 
$
705

Restricted stock and units
1,557

 
1,463

401(k) Plan stock contribution
1,016

 
263

Total stock-based compensation expense
$
3,177

 
$
2,431

 
 
 
 
Cost of sales
$
911

 
$
422

Selling, general and administrative expenses
1,923

 
1,867

Research, development and engineering costs, net
343

 
142

Total stock-based compensation expense
$
3,177

 
$
2,431


The weighted average fair value and assumptions used to value options granted are as follows:
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Weighted average fair value
$
16.41

 
$
8.38

Risk-free interest rate
1.73
%
 
0.73
%
Expected volatility
39
%
 
39
%
Expected life (in years)
5

 
5

Expected dividend yield
—
%
 
—
%

The following table summarizes time-vested stock option activity:
 
Number of
Time-Vested
Stock
Options
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life
(In Years)
 
Aggregate
Intrinsic
Value
(In Millions)
Outstanding at January 3, 2014
1,616,409

 
$
22.92

 
 
 
 
Granted
181,553

 
43.78

 
 
 
 
Exercised
(123,388
)
 
23.39

 
 
 
 
Forfeited or expired
(19,216
)
 
26.43

 
 
 
 
Outstanding at April 4, 2014
1,655,358

 
25.14

 
6.7
 
$
32.6

Exercisable at April 4, 2014
1,219,492

 
22.90

 
5.9
 
$
26.8

The following table summarizes performance-vested stock option activity:
 
Number of
Performance-
Vested Stock
Options
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life
(In Years)
 
Aggregate
Intrinsic
Value
(In Millions)
Outstanding at January 3, 2014
177,261

 
$
23.27

 
 
 
 
Exercised
(24,335
)
 
22.96

 
 
 
 
Outstanding at April 4, 2014
152,926

 
23.32

 
3.3
 
$
3.3

Exercisable at April 4, 2014
152,926

 
23.32

 
3.3
 
$
3.3


The following table summarizes time-vested restricted stock and unit activity:
 
Time-Vested
Activity
 
Weighted
Average
Fair Value
Nonvested at January 3, 2014
67,575

 
$
26.37

Granted
34,721

 
43.99

Vested
(4,874
)
 
43.80

Forfeited
(4,113
)
 
31.68

Nonvested at April 4, 2014
93,309

 
31.78

The following table summarizes performance-vested restricted stock and unit activity:
 
Performance-
Vested
Activity
 
Weighted
Average
Fair Value
Nonvested at January 3, 2014
779,678

 
$
16.41

Granted
184,578

 
31.28

Vested
(221,470
)
 
18.51

Forfeited
(5,204
)
 
15.30

Nonvested at April 4, 2014
737,582

 
19.51

Other Operating (Income) Expenses, Net
OTHER OPERATING (INCOME) EXPENSES, NET
OTHER OPERATING (INCOME) EXPENSES, NET
Other Operating (Income) Expenses, Net is comprised of the following (in thousands):
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
2013 operating unit realignment
$
1,003

 
$
—

Orthopaedic facility optimization (income) costs
(1,157
)
 
2,636

Medical device facility optimization
11

 
105

ERP system upgrade (income) costs
(72
)
 
321

Acquisition and integration (income) costs
(428
)
 
111

Asset dispositions, severance and other
429

 
65

 
$
(214
)
 
$
3,238


2013 operating unit realignment. In June 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 (“Electrochem”) reportable segments were combined into one sales and marketing and one operations group serving the entire Company. This initiative is expected to be completed during the first half of 2014. Total restructuring charges expected to be incurred in connection with this realignment are between $7.0 million and $7.5 million, of which $6.6 million has been incurred to date. Expenses related to this initiative will be recorded within the applicable segment and corporate cost centers that the expenditures relate to and include the following:
 
•
Severance and retention: $5.3 million – $5.4 million; and
•
Other: $1.7 million – $2.1 million.
Other costs primarily consist of relocation, recruitment and travel expenditures.
 
The change in accrued liabilities related to the 2013 operating unit realignment is as follows (in thousands):
 
Severance and
Retention
 
Other
 
Total
At January 3, 2014
$
465

 
$
746

 
$
1,211

Restructuring charges
867

 
136

 
1,003

Cash payments
(938
)
 
(803
)
 
(1,741
)
At April 4, 2014
$
394

 
$
79

 
$
473


Orthopaedic facility 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 on 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 2012, the Company entered into an agreement to sell assets related to certain non-core Swiss orthopaedic product lines to an independent third party including inventory, machinery, equipment, customer lists and technology related to these product lines. This transaction closed during the first quarter of 2013 and the Company received payments totaling $4.7 million in connection with this transaction and the third party assumed $2.4 million of severance liabilities. During the first quarter of 2014, the Company received an additional contingent payment of $2.5 million from the third party in connection with the achievement of certain milestones defined in the sales agreement. The gain was recognized in Other Operating (Income) Expenses, Net in the Condensed Consolidated Statement of Operations.
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 three years.
The total capital investment expected for these initiatives is between $30 million and $35 million, of which $22.3 million has been expended to date. Total expense expected to be incurred for these initiatives is between $43 million and $48 million, of which $40.0 million has been incurred to date. All expenses will be recorded within the Greatbatch Medical segment and are expected to include the following:
 
•
Severance and retention: approximately $11 million;
•
Accelerated depreciation and asset write-offs: approximately $13 million; and
•
Other: $19 million – $24 million.
Other costs include production inefficiencies, moving, revalidation, personnel, training and travel costs associated with these consolidation projects.
All expenses are cash expenditures, except accelerated depreciation and asset write-offs. The change in accrued liabilities related to the orthopaedic facility optimization is as follows (in thousands):
 
Severance
and
Retention
 
Accelerated
Depreciation/Asset
Write-offs
 
Other
 
Total
At January 3, 2014
$
—

 
$
—

 
$
857

 
$
857

Restructuring charges (income)
—

 
(2,531
)
 
1,374

 
(1,157
)
Cash (payments) receipts
—

 
2,531

 
(1,423
)
 
1,108

At April 4, 2014
$
—

 
$
—

 
$
808

 
$
808


Medical device facility optimization. Near the end of 2011, the Company initiated plans to upgrade and expand its manufacturing infrastructure in order to support its medical device strategy. This includes the transfer of certain product lines to create additional capacity for the manufacture of medical devices, expansion of two existing facilities, as well as the purchase of equipment to enable the production of medical devices. These initiatives are expected to be completed over the next year. Total capital investment under these initiatives is expected to be between $15 million and $20 million, of which approximately $12.5 million has been expended to date. Total expenses expected to be incurred on these projects is between $2.0 million and $3.0 million, of which $1.8 million has been incurred to date. All expenses will be recorded within the Greatbatch Medical segment and are expected to include the following:
 
•
Production inefficiencies, moving and revalidation: $0.5 million – $1.0 million;
•
Personnel: $1.0 million – $1.5 million; and
•
Other: approximately $1.0 million.





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

 
$
—

 
$
—

 
$
—

Restructuring charges
—

 
1

 
10

 
11

Cash payments
—

 
(1
)
 
(10
)
 
(11
)
At April 4, 2014
$
—

 
$
—

 
$
—

 
$
—


 
ERP system upgrade. In 2011, the Company initiated plans to upgrade its existing global ERP system. This initiative is expected to be completed over the next three months. Total capital investment under this initiative is expected to be between $4.0 million to $4.3 million of which approximately $4.0 million has been expended to date. Total expenses expected to be incurred on this initiative is between $6.0 million to $6.5 million, of which $5.8 million has been incurred to date. Expenses related to this initiative are recorded within the applicable segment and corporate cost centers that the expenditures relate to and include the following:
 
•
Training and consulting costs: $4 million; and
•
Accelerated depreciation and asset write-offs: $2 million – $2.5 million.
The change in accrued liabilities related to the ERP system upgrade is as follows (in thousands):
 
Training &
Consulting
Costs
 
Accelerated
Depreciation/Asset
Write-offs
 
Total
At January 3, 2014
$
—

 
$
—

 
$
—

Income
(72
)
 
—

 
(72
)
Cash receipts
72

 
—

 
72

At April 4, 2014
$
—

 
$
—

 
$
—


Acquisition and integration (income) costs. During 2014 and 2013, the Company incurred (income) cost related to the integration of Micro Power Electronics, Inc. and NeuroNexus Technologies, Inc., which were acquired in December 2011 and February 2012, respectively. 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 these acquisitions. Refer to Note 13 "Fair Value Measurements" for discussion on changes in fair value of the contingent consideration.
Asset dispositions, severance and other. During 2014 and 2013, the Company recorded charges in connection with various other strategic initiatives and asset disposals/write-downs.
Income Taxes
INCOME TAXES
INCOME TAXES
The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to several factors, including changes in the mix of the pre-tax income and the jurisdictions to which it relates, changes in tax laws and foreign tax holidays, business reorganizations, settlements with taxing authorities and foreign currency fluctuations.
As of April 4, 2014, the balance of unrecognized tax benefits is approximately $1.9 million. It is reasonably possible that a reduction of up to $0.1 million of the balance of unrecognized tax benefits may occur within the next twelve months as a result of potential audit settlements. Approximately $1.7 million of the balance of unrecognized tax benefits would favorably impact the effective tax rate, net of federal benefit on state issues, if recognized.
Commitments And Contingencies
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES
Litigation – On December 21, 2012, the Company and several other unaffiliated parties were named as defendants in a personal injury and wrongful death action filed in the 113th Judicial District Court of Harris County, Texas. The complaint seeks damages alleging marketing and product defects and failure to warn, negligence and gross negligence relating to a product the Company manufactured and sold to a customer, one of the other named defendants. The Company's customer, in turn, incorporated the Greatbatch product into its own product which it sold to its customer, another named defendant. This matter is currently scheduled for trial in the second half of 2014.
The Company is indemnified by its customer against any loss in this matter, including costs of defense, which obligation is supported by the customer's product liability insurance coverage in the amount of $5 million. The Company also has its own product liability insurance coverage, which has a $10 million retention. The Company has meritorious defenses and is vigorously defending the matter. In the event of an adverse judgment, however, the Company could have liability to the extent of the amount of any award its customer is unable to satisfy. To date, the Company has not recorded a reserve in connection with this matter since any potential loss is not currently probable and the range of loss is not reasonably estimable at this time.
The Company is a party to various other legal actions arising in the normal course of business. While the Company does not expect that the ultimate resolution of any of these pending actions will have a material effect on its consolidated results of operations, financial position, or cash flows, litigation is subject to inherent uncertainties and 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.
Product Warranties– The Company generally warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. The change in aggregate product warranty liability is as follows (in thousands):
At January 3, 2014
$
1,819

Reduction to warranty reserve
(568
)
Warranty claims paid
(79
)
At April 4, 2014
$
1,172


Purchase Commitments – Contractual obligations for purchase of goods or services are defined as agreements that are enforceable and legally binding on the Company and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction. The Company’s purchase orders are normally based on its current manufacturing needs and are fulfilled by its vendors within short time horizons. The Company also enters into blanket orders with vendors that have preferred pricing and terms, however these orders are normally cancelable without penalty. As of April 4, 2014, the total contractual obligation related to such expenditures is approximately $28.7 million and will primarily be funded by existing cash and cash equivalents, cash flow from operations, or borrowings under the Credit Facility. The Company also enters into contracts for outsourced services; however, the obligations under these contracts were not significant and the contracts generally contain clauses allowing for cancellation without significant penalty.

Workers’ Compensation Trust - The Company was a member of a group self-insurance trust that provided workers’ compensation benefits to employees of the Company in Western New York (the “Trust”). Under the Trust agreement, each participating organization has joint and several liability for Trust obligations if the assets of the Trust are not sufficient to cover those obligations. During 2011, the Company was notified by the Trust of its intentions to cease operations at the end of 2011 and was assessed a pro-rata share of future costs related to the Trust. Based on actual experience, the Company could receive a refund or be assessed additional contributions for workers’ compensation claims. Since 2011, the Company utilized a traditional insurance provider for workers’ compensation coverage.
Operating Leases – The Company is a party to various operating lease agreements for buildings, equipment and software. Estimated future operating lease expense is as follows (in thousands):
Remainder of 2014
$
3,965

2015
4,742

2016
4,143

2017
1,480

2018
1,003

Thereafter
936

Total estimated operating lease expense
$
16,269


Foreign Currency Contracts – The Company enters into forward contracts to purchase Mexican pesos in order to hedge the risk of peso-denominated payments associated with the operations at its Tijuana, Mexico facility. The impact to the Company’s results of operations from these forward contracts was as follows (in thousands):
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Reduction in cost of sales
$
(164
)
 
$
(172
)
Ineffective portion of change in fair value
—

 
—


 
Instrument
 
Type of
Hedge
 
Aggregate
Notional
Amount
 
Start
Date
 
End
Date
 
$/Peso
 
Fair
Value
 
Balance Sheet Location
FX Contract
 
Cash flow
 
$
5,781

 
Jan-14
 
Dec-14
 
0.0767

 
$
(61
)
 
Accrued Expenses
FX Contract
 
Cash flow
 
$
4,740

 
Jan-14
 
Dec-14
 
0.0752

 
$
41

 
Accrued Expenses

Self-Insured Medical Plan – The Company self-funds the medical insurance coverage provided to its U.S. based employees. The risk to the Company is being limited through the use of stop loss insurance, which has specific stop loss coverage per associate for claims in the year exceeding $225 thousand per associate with no annual maximum aggregate stop loss coverage. As of April 4, 2014, the Company has $1.4 million accrued related to the self-insurance portion of its medical plan, which is recorded in Accrued Expenses in the Condensed Consolidated Balance Sheet, and is primarily based upon claim history.
Earnings Per Share (EPS)
EARNINGS PER SHARE (EPS)
EARNINGS PER SHARE (“EPS”)
The following table illustrates the calculation of Basic and Diluted EPS (in thousands, except per share amounts):
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Numerator for basic and diluted EPS:
 
 
 
Net income
$
14,922

 
$
5,663

Denominator for basic EPS:
 
 
 
Weighted average shares outstanding
24,614

 
23,750

Effect of dilutive securities:
 
 
 
Stock options, restricted stock and restricted stock units
1,080

 
665

Denominator for diluted EPS
25,694

 
24,415

Basic EPS
$
0.61

 
$
0.24

Diluted EPS
$
0.58

 
$
0.23



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:
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Time-vested stock options, restricted stock and restricted stock units
193,000

 
532,000

Performance-vested restricted stock units
5,900

 
595,000


For the 2013 period, no shares related to CSN were included in the diluted EPS calculations 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
ACCUMULATED OTHER COMPREHENSIVE INCOME
Accumulated Other Comprehensive Income is comprised of the following (in thousands):
Three Month Period
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 gain on cash flow hedges
—

 
150

 
—

 
150

 
(53
)
 
97

Realized gain on foreign currency hedges
—

 
(164
)
 
—

 
(164
)
 
57

 
(107
)
Realized loss on interest rate swap hedges
—

 
132

 
—

 
132

 
(45
)
 
87

Foreign currency translation gain
—

 
—

 
1,182

 
1,182

 
—

 
1,182

At April 4, 2014
$
(672
)
 
$
(350
)
 
$
16,134

 
$
15,112

 
$
505

 
$
15,617

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

 
$
13,431

 
$
12,589

 
$
358

 
$
12,947

Unrealized gain on cash flow hedges
—

 
528

 
—

 
528

 
(184
)
 
344

Realized gain on foreign currency hedges
—

 
(172
)
 
—

 
(172
)
 
60

 
(112
)
Realized loss on interest rate swap hedges
—

 
57

 
—

 
57

 
(20
)
 
37

Net defined benefit plan gain
597

 
—

 
—

 
597

 
—

 
597

Foreign currency translation loss
—

 
—

 
(3,063
)
 
(3,063
)
 
—

 
(3,063
)
At March 29, 2013
$
(365
)
 
$
533

 
$
10,368

 
$
10,536

 
$
214

 
$
10,750


The realized (gains) losses 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 Condensed Consolidated Statements of Operations.
The net defined benefit plan reclassifications from Accumulated Other Comprehensive Income are as follows (in thousands):
 
Three Months Ended
 
March 29, 2013
Net gain occurring during the period
$
(171
)
Amortization of losses
(581
)
Prior service cost
155

Pre-tax adjustment
(597
)
Taxes
—

Net gain
$
(597
)
Fair Value Measurements
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Fair value measurement standards apply to certain financial assets and liabilities that are measured at fair value on a recurring basis (each reporting period). For the Company, these financial assets and liabilities include its derivative instruments and accrued contingent consideration. The Company does not have any nonfinancial assets or liabilities that are measured at fair value on a recurring basis.
Foreign currency contracts – The fair value of foreign currency contracts are determined through the use of cash flow models that utilize observable market data inputs to estimate fair value. These observable market data inputs include foreign exchange rate and credit spread curves. In addition, 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 additional Cost of Sales as the inventory, which the contracts are hedging the cash flows to produce, is sold, of which approximately $0.02 million is expected to be realized within the next nine months.
 
Interest rate swap – The fair value of the Company’s interest rate swap outstanding at April 4, 2014 was determined through the use of a cash flow model that utilizes observable market data inputs. These observable market data inputs include LIBOR, swap rates, and credit spread curves. In addition, 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 fair value of the Company’s interest rate swap will be realized as Interest Expense as interest on the Credit Facility is accrued.
Accrued contingent consideration – 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 (Income) 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 milestones.
The fair value of accrued contingent consideration recorded by the Company represents the estimated fair value of the contingent consideration the Company expects to pay to the former shareholders of NeuroNexus Technologies, Inc. acquired in 2012 based upon the achievement of certain financial and development-based milestones. The fair value of the contingent consideration liability was estimated by discounting to present value, the probability weighted contingent payments expected to be made utilizing a risk adjusted discount rate. During the first quarter of 2014, the financial milestone expired unachieved and as a result, was determined to have a fair value of zero. The maximum amount of future contingent consideration (undiscounted) that the Company could be required to pay for the development milestone is $1.0 million. The Company’s accrued contingent consideration is categorized in Level 3 of the fair value hierarchy.
Changes in accrued contingent consideration were as follows (in thousands):
At January 3, 2014
$
840

Fair value adjustments
(430
)
At April 4, 2014
$
410


 
The recurring Level 3 fair value measurements of the Company’s contingent consideration liability include the following significant unobservable inputs (dollars in thousands):
Contingent Consideration Liability
 
Fair Value at April 4, 2014
 
Valuation Technique
 
Unobservable Inputs
Development milestone
 
$
410

 
Discounted cash flow
 
Discount rate
 
20
%
 
 
 
 
 
 
Projected year of payment
 
2015

 
 
 
 
 
 
Probability weighted payment amount
 
$
500


The following table provides information regarding assets and liabilities recorded at fair value on a recurring basis in the Condensed Consolidated Balance Sheet (in thousands):
 
 
Fair Value Measurements Using
 
 
At 
 April 4,
 
Quoted
Prices in
Active Markets
for Identical
Assets
 
Significant
Other
Observable
Inputs
 
Significant
Unobservable
Inputs
Description
 
2014
 
(Level 1)
 
(Level 2)
 
(Level 3)
Liabilities
 
 
 
 
 
 
 
 
Interest rate swap (Note 5)
 
$
330

 
$
—

 
$
330

 
$
—

Foreign currency contracts (Note 10)
 
20

 
—

 
20

 
—

Accrued contingent consideration
 
410

 
—

 
—

 
410


 
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Fair value standards also apply to certain nonfinancial assets and liabilities that are measured at fair value on a nonrecurring basis. As of April 4, 2014 the fair value of the Company’s variable rate Long-Term Debt approximates its carrying value. A summary of the valuation methodologies for the Company’s assets and liabilities measured on a nonrecurring basis is as follows:
Long-lived assets – The Company reviews the carrying amount of its long-lived assets to be held and used, other than goodwill and indefinite-lived intangible assets, for potential impairment whenever certain indicators are present such as: a significant decrease in the market price of the asset or asset group; a significant change in the extent or manner in which the 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 the 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 of the asset; 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 the long-lived asset or asset group; or a current expectation that it is more likely than not the 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.
If an indicator is present, potential recoverability is measured by comparing the carrying amount of the long-lived 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, which is determined by using independent appraisals or discounted cash flow models. The discounted cash flow model requires inputs such as a risk-adjusted discount rate, terminal values, operating budgets, long-term strategic plans and remaining useful lives of the asset or asset group. If the carrying value of the long-lived asset or asset group exceeds the fair value, the carrying value is written down to the fair value in the period identified. The Company did not record any impairment charge related to its long-lived assets during the first three months of 2014 and 2013.
Goodwill and indefinite-lived intangible assets – The Company assesses the impairment of goodwill and other indefinite-lived intangible assets on the last day of each fiscal year, or more frequently if certain indicators are present as described above under long-lived assets. The Company assesses goodwill for impairment by comparing the fair value of its reporting units to their carrying amounts. If 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. Fair values for reporting units are determined based on discounted cash flow models and market multiples. The discounted cash flow model requires inputs such as a risk-adjusted discount rate, terminal values, probability of success factor, operating budgets, and long-term strategic plans. The fair value from the discounted cash flow model is then combined, based on certain weightings, with market multiples in order to determine the fair value of the reporting unit. These market multiples include revenue multiples and multiples of earnings before interest, taxes, depreciation and amortization.
 
Indefinite-lived intangible assets are assessed for impairment by comparing the fair value of the intangible asset to its carrying value. If the carrying value of the indefinite-lived intangible asset exceeds the fair value, the carrying value is written down to the fair value in the period identified. The fair value of indefinite-lived intangible assets is determined by using a discounted cash flow model. The discounted cash flow model requires inputs such as a risk-adjusted discount rate, royalty rates, operating budgets, and long-term strategic plans.
The Company recorded no impairment charges related to its indefinite-lived intangible assets, including goodwill, during the first three months of 2014 and 2013, respectively. See Note 4 “Intangible Assets” for additional information on the Company’s intangible assets.
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 and are classified as Other Assets. The total carrying value of these investments is reviewed quarterly for changes in circumstance or the occurrence of events that suggest the Company’s investment may not be recoverable. The fair value of cost or equity method investments is not adjusted if there are no identified events or changes in circumstances that may have a material effect on the fair value of the investments. Gains and losses realized on cost and equity method investments are recorded in Other (Income) Expense, Net, unless separately stated. The aggregate recorded amount of cost and equity method investments at April 4, 2014 and January 3, 2014 was $13.2 million and $12.3 million, respectively. The Company recorded net income (loss) related to its cost and equity method investments of $0.8 million and ($0.07) million during the first three months of 2014 and 2013, respectively.
Business Segment, Geographic and Concentration Risk Information
BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION
BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION
In connection with the realignment of the Company's operating structure in 2013 to optimize profitable growth, which included changing the Company's management and reporting structure, the Company reevaluated its operating and reporting segments. Beginning in the fourth quarter of 2013, the Company determined that it has two reportable segments: Greatbatch Medical and QiG Group (“QiG”). As required, the Company reclassified certain prior year amounts to conform them to the current year presentation, including goodwill, segment operating income (loss), and segment sales categorizations.
Greatbatch Medical designs and manufactures medical devices and components where Greatbatch either owns the intellectual property or has unique manufacturing and assembly expertise and includes the financial results of the former Implantable Medical and Electrochem segments, excluding QiG. Greatbatch Medical provides medical devices and components to the following markets:
•
Cardiac/Neuromodulation: Products include batteries, capacitors, filtered and unfiltered feed-throughs, engineered components, implantable stimulation leads, and enclosures used in implantable medical devices.
•
Orthopaedic: Products include hip and shoulder joint reconstruction implants, bone plates and spinal devices, and instruments and delivery systems used in hip and knee replacement, trauma fixation, and spinal surgeries.
•
Portable Medical: Products include life-saving and life-enhancing applications comprising automated external defibrillators, portable oxygen concentrators, ventilators, and powered surgical tools.
•
Vascular: Products include introducers, medical coatings, steerable sheaths, and catheters that deliver therapies for various markets such as coronary and neurovascular disease, peripheral vascular disease, interventional radiology, vascular access, atrial fibrillation, and interventional cardiology, plus products for medical imaging and pharmaceutical delivery.
•
Energy, Military, and Environmental (“EME”): Products include primary and rechargeable batteries and battery packs for demanding applications such as down hole drilling tools.
Greatbatch Medical also offers value-added assembly and design engineering services for medical devices that utilize its component products.
QiG focuses on developing medical device systems for some of healthcare’s most pressing challenges and reflects Greatbatch’s strategic evolution of its product offerings in order to raise the growth and profitability profile of the Company. QiG utilizes a disciplined and diversified portfolio approach with three investment modes: new medical device systems commercialization, collaborative programs with OEM customers, and strategic equity positions in start-up companies. The development of new medical device systems are facilitated through the establishment of newly formed business entities, usually limited liability companies (“LLC”). These entities do not own, but have the exclusive right to use the technology of Greatbatch Medical in certain, specifically designated fields of use and have an exclusive manufacturing agreement with Greatbatch Medical. QiG currently owns 89% - 100% of three LLCs. Minority interest in these LLCs was granted to key opinion leaders, clinicians and strategic partners. Under the agreements governing these LLCs, QiG is liable for 100% of the expenses incurred by the LLC. However, no distributions are made to the minority holders of the LLC until QiG is reimbursed for all expenses paid. Once QiG has been fully reimbursed, future net income is distributed based upon the respective LLCs ownership percentages. One of the LLCs established by QiG is for the Company's spinal cord stimulator to treat chronic intractable pain of the trunk and/or limbs. This product was submitted for premarket approval (“PMA”) to the United States Food & Drug Administration (“FDA”) in December 2013, and in January 2014 documentation for European CE Mark was submitted to the notified body, TÜV SÜD America. Another medical device system being developed by QiG is an implantable loop recorder for cardiac arrhythmia diagnostics.
Current QiG revenue includes sales of neural interface technology, components and systems to the neuroscience and clinical markets. Future income of QiG is expected to come from various sources including investment gains from the sales of LLC ownership interests, technology licensing fees, royalty revenue, and/or the sales of medical device systems to OEM customers.
Historical results reflecting the new business segments for previously reported periods are shown below. An analysis and reconciliation of the Company’s business segment, product line and geographic information to the respective information in the Condensed Consolidated Financial Statements follows. Sales by geographic area are presented by allocating sales from external customers based on where the products are shipped to (in thousands): 
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Sales:
 
 
 
Greatbatch Medical
 
 
 
Cardiac/Neuromodulation
$
86,780

 
$
70,524

Orthopaedic
36,431

 
29,623

Portable Medical
19,203

 
18,889

Vascular
13,050

 
10,624

Energy, Military, Environmental
18,131

 
17,962

Total Greatbatch Medical
173,595

 
147,622

QiG
686

 
643

Total sales
$
174,281

 
$
148,265


 
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Segment income (loss) from operations:
 
 
 
Greatbatch Medical
$
35,128

 
$
26,515

QiG
(5,913
)
 
(7,356
)
Total segment income from operations
29,215

 
19,159

Unallocated operating expenses
(6,691
)
 
(4,820
)
Operating income as reported
22,524

 
14,339

Unallocated other expense
(463
)
 
(7,273
)
Income before provision for income taxes
$
22,061

 
$
7,066


 
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Sales by geographic area:
 
 
 
United States
$
81,112

 
$
71,334

Non-Domestic locations:
 
 
 
Puerto Rico
34,598

 
28,498

Belgium
15,979

 
17,671

Rest of world
42,592

 
30,762

Total sales
$
174,281

 
$
148,265


Three customers accounted for a significant portion of the Company’s sales as follows:
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Customer A
21
%
 
19
%
Customer B
15
%
 
18
%
Customer C
12
%
 
15
%
Total
48
%
 
52
%




Long-lived tangible assets by geographic area are as follows (in thousands):
 
As of
 
April 4, 2014
 
January 3, 2014
United States
$
115,535

 
$
116,484

Rest of world
29,651

 
29,289

Total
$
145,186

 
$
145,773

Impact of Recently Issued Accounting Standards
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In the normal course of business, management evaluates all new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”), Securities and Exchange Commission, Emerging Issues Task Force, American Institute of Certified Public Accountants or other authoritative accounting bodies to determine the potential impact they may have on the Company’s Condensed 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 Condensed Consolidated Financial Statements.
In April 2014, the FASB issued Accounting Standards Update (“ASU”) Update No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which amends the definition of a discontinued operation and requires entities to provide additional disclosures about disposal transactions that do not meet the discontinued operations criteria. The revised guidance changes how entities identify and disclose information about disposal transactions under U.S. GAAP. The ASU is effective prospectively for all disposals (except disposals classified as held for sale before the adoption date) or components initially classified as held for sale in periods beginning on or after December 15, 2014, with early adoption permitted. The ASU will be applicable for disposal transactions, if any, that the Company enters into after the adoption date.
In July 2013, the FASB issued ASU No. 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” This ASU requires that entities present an unrecognized tax benefit, or portion of an unrecognized tax benefit, as a reduction to a deferred tax asset in the financial statements for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with certain exceptions. This ASU was adopted during the first quarter of 2014 and did not impact the Company's Condensed Consolidated Financial Statements as the Company does not have any net operating loss carryforward deferred tax assets that are eligible to be reduced by an unrecognized tax benefit as required by the ASU.
Accounting Policies (Policies)
Interim Basis of Accounting 
The January 3, 2014 condensed consolidated balance sheet data was derived from audited consolidated financial statements but does not include all disclosures required by GAAP. For further information, refer to the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended January 3, 2014.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information (Accounting Standards Codification (“ASC”) 270, Interim Reporting) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information necessary for a full presentation of financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of Greatbatch, Inc. and its wholly-owned subsidiary, Greatbatch Ltd. (collectively “Greatbatch” or the “Company”), for the periods presented.
Use of Estimates, Policy 
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ materially from these estimates.
Fiscal Period, Policy 
The Company utilizes a fifty-two, fifty-three week fiscal year ending on the Friday nearest December 31st. The first quarter of 2014 and 2013 each contained 13 weeks, and ended on April 4, and March 29, respectively.
Income Tax, Policy 
The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to several factors, including changes in the mix of the pre-tax income and the jurisdictions to which it relates, changes in tax laws and foreign tax holidays, business reorganizations, settlements with taxing authorities and foreign currency fluctuations.
Contingent Liability Reserve Estimate, Policy 
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 (Income) 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 milestones.
Long Lived Assets Finite Lived Intangible Assets 
The Company reviews the carrying amount of its long-lived assets to be held and used, other than goodwill and indefinite-lived intangible assets, for potential impairment whenever certain indicators are present such as: a significant decrease in the market price of the asset or asset group; a significant change in the extent or manner in which the 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 the 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 of the asset; 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 the long-lived asset or asset group; or a current expectation that it is more likely than not the 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.
If an indicator is present, potential recoverability is measured by comparing the carrying amount of the long-lived 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, which is determined by using independent appraisals or discounted cash flow models. The discounted cash flow model requires inputs such as a risk-adjusted discount rate, terminal values, operating budgets, long-term strategic plans and remaining useful lives of the asset or asset group. If the carrying value of the long-lived asset or asset group exceeds the fair value, the carrying value is written down to the fair value in the period identified.
Goodwill and Intangible Assets, Goodwill, Policy 
The Company assesses the impairment of goodwill and other indefinite-lived intangible assets on the last day of each fiscal year, or more frequently if certain indicators are present as described above under long-lived assets. The Company assesses goodwill for impairment by comparing the fair value of its reporting units to their carrying amounts. If 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.
Goodwill and Intangible Assets, Intangible Assets, Indefinite-Lived, Policy 
Indefinite-lived intangible assets are assessed for impairment by comparing the fair value of the intangible asset to its carrying value. If the carrying value of the indefinite-lived intangible asset exceeds the fair value, the carrying value is written down to the fair value in the period identified.
Cost And Equity Method Investments Policy 
The Company holds investments in equity and other securities that are accounted for as either cost or equity method investments and are classified as Other Assets. The total carrying value of these investments is reviewed quarterly for changes in circumstance or the occurrence of events that suggest the Company’s investment may not be recoverable. The fair value of cost or equity method investments is not adjusted if there are no identified events or changes in circumstances that may have a material effect on the fair value of the investments. Gains and losses realized on cost and equity method investments are recorded in Other (Income) Expense, Net, unless separately stated.
Supplemental Cash Flow Information (Tables)
Schedule of Cash Flow, Supplemental Disclosures
 
Three Months Ended
(in thousands)
April 4, 2014
 
March 29, 2013
Noncash investing and financing activities:
 
 
 
Common stock contributed to 401(k) Plan
$
4,341

 
$
2,477

Property, plant and equipment purchases included in accounts payable
1,180

 
1,219

Cash paid during the period for:
 
 
 
Interest
$
953

 
$
1,556

Income taxes
544

 
494

Inventories (Tables)
Schedule of Inventory, Current
Inventories are comprised of the following (in thousands):
 
As of
 
April 4, 2014
 
January 3, 2014
Raw materials
$
66,539

 
$
67,939

Work-in-process
36,779

 
36,670

Finished goods
14,765

 
13,749

Total
$
118,083

 
$
118,358

Intangible Assets (Tables)
Schedule of Finite-Lived Intangible Assets by Major Class 
Amortizing intangible assets are comprised of the following (in thousands):
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Foreign
Currency
Translation
 
Net
Carrying
Amount
At April 4, 2014
 
 
 
 
 
 
 
Technology and patents
$
97,376

 
$
(70,708
)
 
$
1,993

 
$
28,661

Customer lists
68,257

 
(26,337
)
 
1,552

 
43,472

Other
4,434

 
(4,532
)
 
887

 
789

Total amortizing intangible assets
$
170,067

 
$
(101,577
)
 
$
4,432

 
$
72,922

At January 3, 2014
 
 
 
 
 
 
 
Technology and patents
$
97,376

 
$
(69,026
)
 
$
1,980

 
$
30,330

Customer lists
68,257

 
(24,671
)
 
1,367

 
44,953

Other
4,434

 
(4,399
)
 
804

 
839

Total amortizing intangible assets
$
170,067

 
$
(98,096
)
 
$
4,151

 
$
76,122

Schedule of Finite-Lived Intangible Assets, Amortization Expense 
Aggregate intangible asset amortization expense is comprised of the following (in thousands):
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Cost of sales
$
1,563

 
$
1,780

Selling, general and administrative expenses
1,717

 
1,452

Research, development and engineering costs, net
201

 
136

Total intangible asset amortization expense
$
3,481

 
$
3,368

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense 
Estimated future intangible asset amortization expense based on the current carrying value is as follows (in thousands):
 
Estimated
Amortization
Expense
Remainder of 2014
$
10,238

2015
12,668

2016
10,373

2017
9,251

2018
6,962

Thereafter
23,430

Total estimated amortization expense
$
72,922

Schedule of Intangible Assets Goodwill 
Indefinite-lived intangible assets are comprised of the following (in thousands):
 
Trademarks
and
Tradenames
At January 3, 2014
$
20,288

At April 4, 2014
$
20,288

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

 
$
41,800

 
$
346,656

Foreign currency translation
595

 
—

 
595

At April 4, 2014
$
305,451

 
$
41,800

 
$
347,251

Debt (Tables)
Schedule of Debt 
Long-term debt is comprised of the following (in thousands):
 
As of
 
April 4, 2014
 
January 3, 2014
Revolving line of credit
$
—

 
$
—

Variable rate term loan
195,000

 
197,500

Total long-term debt
$
195,000

 
$
197,500

Schedule Of Interest Rate Derivatives 
Instrument
Type of
Hedge
 
Notional
Amount
 
Start
Date
 
End
Date
 
Pay
Fixed
Rate
 
Current
Receive
Floating
Rate
 
Fair
Value
April 4, 2014
 
Balance
Sheet Location
Interest rate swap
Cash flow
 
$
100,000

 
Feb-13
 
Feb-16
 
0.573
%
 
0.157
%
 
$
(330
)
 
Other Long-Term Liabilities
Schedule of Interest 
The contractual interest and discount amortization for CSN were as follows (in thousands):
 
Three months ended
 
April 4, 2014
 
March 29, 2013
Contractual interest
$
—

 
$
634

Discount amortization
—

 
5,368

Schedule Of Maturities Of Long Term Debt 
The expected future minimum principal payments under the Term Loan as of April 4, 2014 are as follows (in thousands):
Remainder of 2014
$
7,500

2015
11,250

2016
16,250

2017
20,000

2018
20,000

Thereafter
120,000

Total
$
195,000

Schedule of Deferred Financing Costs 
The change in deferred financing fees is as follows (in thousands):
At January 3, 2014
$
3,860

Amortization during the period
(192
)
At April 4, 2014
$
3,668

Defined Benefit Plans (Tables)
Schedule of Defined Benefit Plans Disclosures 
The change in net defined benefit plan liability is as follows (in thousands):
At January 3, 2014
$
1,691

Net defined benefit cost
77

Benefit payments
(131
)
Foreign currency translation
14

At April 4, 2014
$
1,651

Schedule of Net Benefit Costs 
Net defined benefit cost (income) is comprised of the following (in thousands):
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Service cost
$
52

 
$
82

Interest cost
19

 
63

Curtailment gain
—

 
(1,150
)
Amortization of net loss
6

 
—

Net defined benefit cost (income)
$
77

 
$
(1,005
)
Stock-Based Compensation (Tables)
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs 
The components and classification of stock-based compensation expense were as follows (in thousands):
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Stock options
$
604

 
$
705

Restricted stock and units
1,557

 
1,463

401(k) Plan stock contribution
1,016

 
263

Total stock-based compensation expense
$
3,177

 
$
2,431

 
 
 
 
Cost of sales
$
911

 
$
422

Selling, general and administrative expenses
1,923

 
1,867

Research, development and engineering costs, net
343

 
142

Total stock-based compensation expense
$
3,177

 
$
2,431

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions 
The weighted average fair value and assumptions used to value options granted are as follows:
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Weighted average fair value
$
16.41

 
$
8.38

Risk-free interest rate
1.73
%
 
0.73
%
Expected volatility
39
%
 
39
%
Expected life (in years)
5

 
5

Expected dividend yield
—
%
 
—
%
Schedule of Share-based Compensation, Stock Options, Activity 
The following table summarizes time-vested stock option activity:
 
Number of
Time-Vested
Stock
Options
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life
(In Years)
 
Aggregate
Intrinsic
Value
(In Millions)
Outstanding at January 3, 2014
1,616,409

 
$
22.92

 
 
 
 
Granted
181,553

 
43.78

 
 
 
 
Exercised
(123,388
)
 
23.39

 
 
 
 
Forfeited or expired
(19,216
)
 
26.43

 
 
 
 
Outstanding at April 4, 2014
1,655,358

 
25.14

 
6.7
 
$
32.6

Exercisable at April 4, 2014
1,219,492

 
22.90

 
5.9
 
$
26.8

The following table summarizes performance-vested stock option activity:
 
Number of
Performance-
Vested Stock
Options
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life
(In Years)
 
Aggregate
Intrinsic
Value
(In Millions)
Outstanding at January 3, 2014
177,261

 
$
23.27

 
 
 
 
Exercised
(24,335
)
 
22.96

 
 
 
 
Outstanding at April 4, 2014
152,926

 
23.32

 
3.3
 
$
3.3

Exercisable at April 4, 2014
152,926

 
23.32

 
3.3
 
$
3.3

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity 
The following table summarizes time-vested restricted stock and unit activity:
 
Time-Vested
Activity
 
Weighted
Average
Fair Value
Nonvested at January 3, 2014
67,575

 
$
26.37

Granted
34,721

 
43.99

Vested
(4,874
)
 
43.80

Forfeited
(4,113
)
 
31.68

Nonvested at April 4, 2014
93,309

 
31.78

The following table summarizes performance-vested restricted stock and unit activity:
 
Performance-
Vested
Activity
 
Weighted
Average
Fair Value
Nonvested at January 3, 2014
779,678

 
$
16.41

Granted
184,578

 
31.28

Vested
(221,470
)
 
18.51

Forfeited
(5,204
)
 
15.30

Nonvested at April 4, 2014
737,582

 
19.51

Other Operating (Income) Expenses, Net (Tables)
Schedule Of Other Operating Cost and Expense By Component 
Other Operating (Income) Expenses, Net is comprised of the following (in thousands):
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
2013 operating unit realignment
$
1,003

 
$
—

Orthopaedic facility optimization (income) costs
(1,157
)
 
2,636

Medical device facility optimization
11

 
105

ERP system upgrade (income) costs
(72
)
 
321

Acquisition and integration (income) costs
(428
)
 
111

Asset dispositions, severance and other
429

 
65

 
$
(214
)
 
$
3,238

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

 
$
—

 
$
—

 
$
—

Restructuring charges
—

 
1

 
10

 
11

Cash payments
—

 
(1
)
 
(10
)
 
(11
)
At April 4, 2014
$
—

 
$
—

 
$
—

 
$
—

The change in accrued liabilities related to the 2013 operating unit realignment is as follows (in thousands):
 
Severance and
Retention
 
Other
 
Total
At January 3, 2014
$
465

 
$
746

 
$
1,211

Restructuring charges
867

 
136

 
1,003

Cash payments
(938
)
 
(803
)
 
(1,741
)
At April 4, 2014
$
394

 
$
79

 
$
473

The change in accrued liabilities related to the orthopaedic facility optimization is as follows (in thousands):
 
Severance
and
Retention
 
Accelerated
Depreciation/Asset
Write-offs
 
Other
 
Total
At January 3, 2014
$
—

 
$
—

 
$
857

 
$
857

Restructuring charges (income)
—

 
(2,531
)
 
1,374

 
(1,157
)
Cash (payments) receipts
—

 
2,531

 
(1,423
)
 
1,108

At April 4, 2014
$
—

 
$
—

 
$
808

 
$
808

The change in accrued liabilities related to the ERP system upgrade is as follows (in thousands):
 
Training &
Consulting
Costs
 
Accelerated
Depreciation/Asset
Write-offs
 
Total
At January 3, 2014
$
—

 
$
—

 
$
—

Income
(72
)
 
—

 
(72
)
Cash receipts
72

 
—

 
72

At April 4, 2014
$
—

 
$
—

 
$
—

Commitments and Contingencies (Tables)
Schedule of Product Warranty Liability 
The change in aggregate product warranty liability is as follows (in thousands):
At January 3, 2014
$
1,819

Reduction to warranty reserve
(568
)
Warranty claims paid
(79
)
At April 4, 2014
$
1,172

Schedule of Future Minimum Rental Payments for Operating Leases 
Estimated future operating lease expense is as follows (in thousands):
Remainder of 2014
$
3,965

2015
4,742

2016
4,143

2017
1,480

2018
1,003

Thereafter
936

Total estimated operating lease expense
$
16,269

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance 
The impact to the Company’s results of operations from these forward contracts was as follows (in thousands):
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Reduction in cost of sales
$
(164
)
 
$
(172
)
Ineffective portion of change in fair value
—

 
—

Schedule of Foreign Exchange Contracts, Statement of Financial Position 
Instrument
 
Type of
Hedge
 
Aggregate
Notional
Amount
 
Start
Date
 
End
Date
 
$/Peso
 
Fair
Value
 
Balance Sheet Location
FX Contract
 
Cash flow
 
$
5,781

 
Jan-14
 
Dec-14
 
0.0767

 
$
(61
)
 
Accrued Expenses
FX Contract
 
Cash flow
 
$
4,740

 
Jan-14
 
Dec-14
 
0.0752

 
$
41

 
Accrued Expenses
Earnings Per Share (EPS) (Tables)
Schedule of Calculation of Numerator and Denominator in Earnings Per Share 
The following table illustrates the calculation of Basic and Diluted EPS (in thousands, except per share amounts):
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Numerator for basic and diluted EPS:
 
 
 
Net income
$
14,922

 
$
5,663

Denominator for basic EPS:
 
 
 
Weighted average shares outstanding
24,614

 
23,750

Effect of dilutive securities:
 
 
 
Stock options, restricted stock and restricted stock units
1,080

 
665

Denominator for diluted EPS
25,694

 
24,415

Basic EPS
$
0.61

 
$
0.24

Diluted EPS
$
0.58

 
$
0.23

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share 
The diluted weighted average share calculations do not include the following securities, which are not dilutive to the EPS calculations or the performance criteria have not been met:
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Time-vested stock options, restricted stock and restricted stock units
193,000

 
532,000

Performance-vested restricted stock units
5,900

 
595,000

Comprehensive Income (Tables)
Schedule of Accumulated Other Comprehensive Income (Loss) 
Accumulated Other Comprehensive Income is comprised of the following (in thousands):
Three Month Period
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 gain on cash flow hedges
—

 
150

 
—

 
150

 
(53
)
 
97

Realized gain on foreign currency hedges
—

 
(164
)
 
—

 
(164
)
 
57

 
(107
)
Realized loss on interest rate swap hedges
—

 
132

 
—

 
132

 
(45
)
 
87

Foreign currency translation gain
—

 
—

 
1,182

 
1,182

 
—

 
1,182

At April 4, 2014
$
(672
)
 
$
(350
)
 
$
16,134

 
$
15,112

 
$
505

 
$
15,617

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

 
$
13,431

 
$
12,589

 
$
358

 
$
12,947

Unrealized gain on cash flow hedges
—

 
528

 
—

 
528

 
(184
)
 
344

Realized gain on foreign currency hedges
—

 
(172
)
 
—

 
(172
)
 
60

 
(112
)
Realized loss on interest rate swap hedges
—

 
57

 
—

 
57

 
(20
)
 
37

Net defined benefit plan gain
597

 
—

 
—

 
597

 
—

 
597

Foreign currency translation loss
—

 
—

 
(3,063
)
 
(3,063
)
 
—

 
(3,063
)
At March 29, 2013
$
(365
)
 
$
533

 
$
10,368

 
$
10,536

 
$
214

 
$
10,750

Schedule of Defined Benefit Plan Amounts Recognized in Other Comprehensive Income (Loss) 
 
Three Months Ended
 
March 29, 2013
Net gain occurring during the period
$
(171
)
Amortization of losses
(581
)
Prior service cost
155

Pre-tax adjustment
(597
)
Taxes
—

Net gain
$
(597
)
Fair Value (Tables)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation 
Changes in accrued contingent consideration were as follows (in thousands):
At January 3, 2014
$
840

Fair value adjustments
(430
)
At April 4, 2014
$
410

Fair Value, Measurement Inputs, Disclosure 
The recurring Level 3 fair value measurements of the Company’s contingent consideration liability include the following significant unobservable inputs (dollars in thousands):
Contingent Consideration Liability
 
Fair Value at April 4, 2014
 
Valuation Technique
 
Unobservable Inputs
Development milestone
 
$
410

 
Discounted cash flow
 
Discount rate
 
20
%
 
 
 
 
 
 
Projected year of payment
 
2015

 
 
 
 
 
 
Probability weighted payment amount
 
$
500

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis 
The following table provides information regarding assets and liabilities recorded at fair value on a recurring basis in the Condensed Consolidated Balance Sheet (in thousands):
 
 
Fair Value Measurements Using
 
 
At 
 April 4,
 
Quoted
Prices in
Active Markets
for Identical
Assets
 
Significant
Other
Observable
Inputs
 
Significant
Unobservable
Inputs
Description
 
2014
 
(Level 1)
 
(Level 2)
 
(Level 3)
Liabilities
 
 
 
 
 
 
 
 
Interest rate swap (Note 5)
 
$
330

 
$
—

 
$
330

 
$
—

Foreign currency contracts (Note 10)
 
20

 
—

 
20

 
—

Accrued contingent consideration
 
410

 
—

 
—

 
410

Business Segment, Geographic and Concentration Risk Information (Tables)
Reconciliation of Revenue from Segments to Consolidated [Table Text Block] 
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Sales:
 
 
 
Greatbatch Medical
 
 
 
Cardiac/Neuromodulation
$
86,780

 
$
70,524

Orthopaedic
36,431

 
29,623

Portable Medical
19,203

 
18,889

Vascular
13,050

 
10,624

Energy, Military, Environmental
18,131

 
17,962

Total Greatbatch Medical
173,595

 
147,622

QiG
686

 
643

Total sales
$
174,281

 
$
148,265

Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block] 
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Segment income (loss) from operations:
 
 
 
Greatbatch Medical
$
35,128

 
$
26,515

QiG
(5,913
)
 
(7,356
)
Total segment income from operations
29,215

 
19,159

Unallocated operating expenses
(6,691
)
 
(4,820
)
Operating income as reported
22,524

 
14,339

Unallocated other expense
(463
)
 
(7,273
)
Income before provision for income taxes
$
22,061

 
$
7,066

Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] 
Three customers accounted for a significant portion of the Company’s sales as follows:
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Customer A
21
%
 
19
%
Customer B
15
%
 
18
%
Customer C
12
%
 
15
%
Total
48
%
 
52
%
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block] 
 
Three Months Ended
 
April 4, 2014
 
March 29, 2013
Sales by geographic area:
 
 
 
United States
$
81,112

 
$
71,334

Non-Domestic locations:
 
 
 
Puerto Rico
34,598

 
28,498

Belgium
15,979

 
17,671

Rest of world
42,592

 
30,762

Total sales
$
174,281

 
$
148,265

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] 
Long-lived tangible assets by geographic area are as follows (in thousands):
 
As of
 
April 4, 2014
 
January 3, 2014
United States
$
115,535

 
$
116,484

Rest of world
29,651

 
29,289

Total
$
145,186

 
$
145,773

Basis of Presentation (Details)
3 Months Ended
Apr. 4, 2014
Mar. 29, 2013
Accounting Policies [Abstract]
 
 
Weeks In Reporting Period
13 
13 
Supplemental Cash Flow Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 4, 2014
Mar. 29, 2013
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract]
 
 
Stock Issued During Period, Value, Employee Benefit Plan
$ 4,341 
$ 2,477 
Property, plant and equipment purchases included in accounts payable
1,180 
1,219 
Interest Paid
953 
1,556 
Income Taxes Paid
$ 544 
$ 494 
Inventories (Details) (USD $)
In Thousands, unless otherwise specified
Apr. 4, 2014
Jan. 3, 2014
Inventory Disclosure [Abstract]
 
 
Inventory Raw Materials
$ 66,539 
$ 67,939 
Inventory, Work in Process
36,779 
36,670 
Inventory, Finished Goods
14,765 
13,749 
Inventories
$ 118,083 
$ 118,358 
Intangible Assets (Amortizing Intangible Assets) (Details) (USD $)
In Thousands, unless otherwise specified
Apr. 4, 2014
Jan. 3, 2014
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-Lived Intangible Assets, Gross
$ 170,067 
$ 170,067 
Finite-Lived Intangible Assets, Accumulated Amortization
(101,577)
(98,096)
Foreign Currency Translation
4,432 
4,151 
Amortizing intangible assets, net
72,922 
76,122 
Purchased Technology And Patents [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-Lived Intangible Assets, Gross
97,376 
97,376 
Finite-Lived Intangible Assets, Accumulated Amortization
(70,708)
(69,026)
Foreign Currency Translation
1,993 
1,980 
Amortizing intangible assets, net
28,661 
30,330 
Customer Lists [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-Lived Intangible Assets, Gross
68,257 
68,257 
Finite-Lived Intangible Assets, Accumulated Amortization
(26,337)
(24,671)
Foreign Currency Translation
1,552 
1,367 
Amortizing intangible assets, net
43,472 
44,953 
Other Intangible Assets [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-Lived Intangible Assets, Gross
4,434 
4,434 
Finite-Lived Intangible Assets, Accumulated Amortization
(4,532)
(4,399)
Foreign Currency Translation
887 
804 
Amortizing intangible assets, net
$ 789 
$ 839 
Intangible Assets (Amortization Expense by Categories) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 4, 2014
Mar. 29, 2013
Jan. 3, 2014
Finite-Lived Intangible Assets [Line Items]
 
 
 
Finite Lived Intangible Assets, Amortization Expense
$ 3,481 
$ 3,368 
 
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
 
 
 
Remainder of 2014
10,238 
 
 
2015
12,668 
 
 
2016
10,373 
 
 
2017
9,251 
 
 
2018
6,962 
 
 
Thereafter
23,430 
 
 
Amortizing intangible assets, net
72,922 
 
76,122 
Cost of Sales [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Finite Lived Intangible Assets, Amortization Expense
1,563 
1,780 
 
Selling General And Administrative Expense [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Finite Lived Intangible Assets, Amortization Expense
1,717 
1,452 
 
Research and Development Expense [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Finite Lived Intangible Assets, Amortization Expense
$ 201 
$ 136 
 
Intangible Assets (Indefinite Lived Intangible Assets) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 4, 2014
Apr. 4, 2014
Greatbatch Medical [Member]
Apr. 4, 2014
QiG [Member]
Apr. 4, 2014
Trademarks And Tradenames [Member]
Jan. 3, 2014
Trademarks And Tradenames [Member]
Indefinite-lived Intangible Assets [Roll Forward]
 
 
 
 
 
Indefinite-lived intangible assets, beginning
$ 20,288 
 
 
$ 20,288 
$ 20,288 
Indefinite-lived intangible assets, ending
20,288 
 
 
20,288 
20,288 
Goodwill [Roll Forward]
 
 
 
 
 
Goodwill
346,656 
304,856 
41,800 
 
 
Foreign currency translation
595 
595 
0 
 
 
Goodwill
$ 347,251 
$ 305,451 
$ 41,800 
 
 
Debt (Schedule of Long-Term Debt) (Details) (USD $)
In Thousands, unless otherwise specified
Apr. 4, 2014
Jan. 3, 2014
Debt Disclosure [Abstract]
 
 
Line of Credit Facility, Amount Outstanding
$ 0 
$ 0 
Term Loan
195,000 
197,500 
Long-term debt
$ 195,000 
$ 197,500 
Debt (Credit Facility Details) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Apr. 4, 2014
Line of Credit Facility [Abstract]
 
Credit Facility, Amendment Date
Sep. 20, 2013 
Line of Credit Facility, Maximum Borrowing Capacity
$ 300 
Term Loan, Maximum Borrowing Capacity
200 
Letter of Credit Subfacility Maximum Borrowing Capacity
15 
Swingline Subfacility Maximum Borrowing Capacity
15 
Credit Facility Borrowing Capacity Increase
200 
Line of Credit Facility, Expiration Date
Sep. 20, 2018 
Line Of Credit Expiration Date Extension
Sep. 20, 2019 
Debt Instrument, Maturity Date
Sep. 20, 2019 
Debt Instrument, Collateral
The Credit Facility is secured by the Company’s non-realty assets including cash, accounts receivable and inventories. 
Interest Margin Above Prime Minimum Credit Facility
0.00% 
Interest Margin Above Prime Maximum Credit Facility
0.75% 
Interest Margin Above LIBOR Minimum Credit Facility
1.375% 
Interest Margin Above LIBOR Maximum Credit Facility
2.75% 
Interest Margin Above Prime Minimum Swingline
0.00% 
Interest Margin Above Prime Maximum Swingline
0.75% 
Line of Credit Facility Commitment Fee Percentage Minimum
0.175% 
Line of Credit Facility Commitment Fee Percentage Maximum
0.25% 
Credit Facility Aggregate Restricted Activities Limit
300 
Credit Facility Maximum Permitted Acquisitions
250 
Credit Facility Maximum Other Investment Purchases
100 
Credit Facility Maximum Stock Repurchases and Declare Dividends
150 
Credit Facility Maximum Foreign Subsidiary Investment
20 
Line of Credit, Adjustments to Limitations on Incurrence of Indebtedness, Maximum Leverage Ratio
2.75 
Credit Facility Restriction Available
100.00% 
Credit Facility Aggregate Restricted Activities Limit Remaining
298 
Credit Facility Maximum Other Investment Purchases Remaining
98 
Line of Credit Covenant, Adjusted EBITDA to Interest Expense, Ratio Required
3.0 
Line of Credit Covenant, Leverage Ratio, Maximum
4.5 
Line of Credit Covenant, Leverage Ratio, Maximum, As of Covenant Restrictive Effective Date
4.25 
Total Leverage Covenant Restriction Effective Date
Jan. 02, 2016 
Debt Instrument, Covenant Compliance
As of April 4, 2014, the Company was in compliance with all covenants under the Credit Facility. 
Debt Weighted Average Interest Rate
1.57% 
Debt Instrument, Unused Borrowing Capacity Amount
$ 300 
Debt (Convertible Notes and Interest Rate Swap Details) (Details) (USD $)
0 Months Ended 3 Months Ended 3 Months Ended
Feb. 20, 2013
Apr. 4, 2014
Mar. 29, 2013
Mar. 31, 2007
Apr. 4, 2014
Interest Rate Swap [Member]
Mar. 29, 2013
Interest Rate Swap [Member]
Dec. 28, 2012
Interest Rate Swap [Member]
Apr. 4, 2014
Interest Rate Swap [Member]
Other Liabilities [Member]
Derivative [Line Items]
 
 
 
 
 
 
 
 
Annual Notional Amortizing Amount
 
 
 
 
$ 50,000,000 
 
 
 
Type of Hedge
 
 
 
 
Cash flow 
 
 
 
Notional Amount
 
 
 
 
100,000,000 
 
150,000,000 
 
Start Date
 
 
 
 
Feb. 20, 2013 
 
 
 
End Date
 
 
 
 
Feb. 22, 2016 
 
 
 
Pay Fixed Interest Rate
 
 
 
 
0.573% 
 
 
 
Current Receive Variable Interest Rate
 
 
 
 
0.157% 
 
 
 
Fair Value
 
 
 
 
 
 
 
(330,000)
Description Of Interest Rate Risk Exposure
 
 
 
 
This swap was entered into in order to hedge against potential changes in cash flows on the outstanding Credit Facility borrowings, which are also indexed to the one-month LIBOR rate. 
 
 
 
Description Of Interest Rate Cash Flow Hedge Accounting Method
 
 
 
 
This swap is being accounted for as a cash flow hedge. 
 
 
 
Gain (Loss) Recognized In Income Ineffective Portion
 
 
 
 
0 
 
 
 
Interest expense
 
1,084,000 
6,988,000 
 
100,000 
60,000 
 
 
Debt Instruments [Abstract]
 
 
 
 
 
 
 
 
Convertible Subordinated Debt
 
 
 
$ 197,800,000 
 
 
 
 
Debt Discount Percentage at Issuance
 
 
 
5.00% 
 
 
 
 
Debt Instrument, Interest Rate, Stated Percentage
 
 
2.25% 
 
 
 
 
 
Debt Instrument, Interest Rate During Period
 
 
8.50% 
 
 
 
 
 
Debt Redemption Date
Feb. 20, 2013 
 
 
 
 
 
 
 
Debt (Contractual Interest) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 4, 2014
Mar. 29, 2013
Interest Costs Incurred [Abstract]
 
 
Contractual interest
$ 0 
$ 634 
Discount amortization
$ 0 
$ 5,368 
Debt (Long-term Debt Maturity Schedule) (Details) (USD $)
In Thousands, unless otherwise specified
Apr. 4, 2014
Jan. 3, 2014
Long-term Debt, Fiscal Year Maturity [Abstract]
 
 
Remainder of 2014
$ 7,500 
 
2015
11,250 
 
2016
16,250 
 
2017
20,000 
 
2018
20,000 
 
Thereafter
120,000 
 
Long-term debt
$ 195,000 
$ 197,500 
Debt (Deferred Financing Fees) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 4, 2014
Deferred Finance Costs [Roll Forward]
 
Deferred Finance Costs, Net, Beginning Balance
$ 3,860 
Amortization during the period
(192)
Deferred Finance Costs, Net, Ending Balance
$ 3,668 
Defined Benefit Plans (Benefit Obligation Roll Forward) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 4, 2014
Mar. 29, 2013
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
 
 
Defined Benefit Plan, Benefit Obligation Beginning
$ 1,691 
 
Defined Benefit Plan, Net Periodic Benefit Cost
77 
(1,005)
Defined Benefit Plan, Benefits Paid
(131)
 
Foreign Currency Translation
14 
 
Defined Benefit Plan, Benefit Obligation Ending
$ 1,651 
 
Defined Benefit Plans (Defined Benefit Plan Costs) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 4, 2014
Mar. 29, 2013
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]
 
 
Service cost
$ 52 
$ 82 
Interest cost
19 
63 
Curtailment gain
0 
(1,150)
Amortization of net loss
6 
0 
Net defined benefit cost (income)
$ 77 
$ (1,005)
Stock-Based Compensation (Expense Details) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 4, 2014
Mar. 29, 2013
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
Allocated Share-based Compensation Expense
$ 3,177 
$ 2,431 
Stock Option [Member]
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
Allocated Share-based Compensation Expense
604 
705 
Restricted Stock And Unit Awards [Member]
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
Allocated Share-based Compensation Expense
1,557 
1,463 
Retirement Plan [Member]
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
Allocated Share-based Compensation Expense
1,016 
263 
Cost of Sales [Member]
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
Allocated Share-based Compensation Expense
911 
422 
Selling General And Administrative Expense [Member]
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
Allocated Share-based Compensation Expense
1,923 
1,867 
Research and Development Expense [Member]
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
Allocated Share-based Compensation Expense
$ 343 
$ 142 
Stock-Based Compensation (Fair Value Assumptions) (Details)
3 Months Ended
Apr. 4, 2014
Mar. 29, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
Weighted average fair value
$ 16.41 
$ 8.38 
Risk-free interest rate
1.73% 
0.73% 
Expected volatility
39.00% 
39.00% 
Expected life (in years)
5 years 
5 years 
Expected dividend yield
0.00% 
0.00% 
Stock-Based Compensation (Stock Option Activity) (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended
Apr. 4, 2014
Stock Options Time Based [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
Stock Options Outstanding, Beginning
1,616,409 
Option Grants in Period, Gross
181,553 
Option Exercises in Period
(123,388)
Option Forfeitures and Expirations in Period
(19,216)
Stock Options Outstanding, Ending
1,655,358 
Options Exercisable, Number
1,219,492 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
 
Options Outstanding, Weighted Average Exercise Price, Beginning
$ 22.92 
Option Grants in Period, Weighted Average Exercise Price
$ 43.78 
Option Exercises in Period, Weighted Average Exercise Price
$ 23.39 
Option Forfeitures and Expirations in Period, Weighted Average Exercise Price
$ 26.43 
Options Outstanding, Weighted Average Exercise Price, Ending
$ 25.14 
Options Exercisable, Weighted Average Exercise Price
$ 22.90 
Options Outstanding, Weighted Average Remaining Contractual Term
6 years 8 months 12 days 
Options Exercisable, Weighted Average Remaining Contractual Term
5 years 10 months 24 days 
Options Outstanding, Intrinsic Value
$ 32.6 
Options Exercisable, Intrinsic Value
26.8 
Stock Options Performance Based [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
Stock Options Outstanding, Beginning
177,261 
Option Exercises in Period
(24,335)
Stock Options Outstanding, Ending
152,926 
Options Exercisable, Number
152,926 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
 
Options Outstanding, Weighted Average Exercise Price, Beginning
$ 23.27 
Option Exercises in Period, Weighted Average Exercise Price
$ 22.96 
Options Outstanding, Weighted Average Exercise Price, Ending
$ 23.32 
Options Exercisable, Weighted Average Exercise Price
$ 23.32 
Options Outstanding, Weighted Average Remaining Contractual Term
3 years 3 months 18 days 
Options Exercisable, Weighted Average Remaining Contractual Term
3 years 3 months 18 days 
Options Outstanding, Intrinsic Value
3.3 
Options Exercisable, Intrinsic Value
$ 3.3 
Stock-Based Compensation (Stock Award Activity) (Details) (USD $)
3 Months Ended
Apr. 4, 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
67,575 
Restricted Stock Units and Awards Granted
34,721 
Restricted Stock Units and Awards Vested
(4,874)
Restricted Stock Units and Awards Forfeited
(4,113)
Nonvested Restricted Stock Units and Awards, Ending
93,309 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract]
 
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Beginning
$ 26.37 
Restricted Stock Units and Awards Granted, Weighted Average Fair Value
$ 43.99 
Restricted Stock Units and Awards Vested, Weighted Average Fair Value
$ 43.80 
Restricted Stock Units and Awards Forfeited, Weighted Average Fair Value
$ 31.68 
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Ending
$ 31.78 
Restricted Stock And Restricted Stock Units Performance Based [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
Nonvested Restricted Stock Units and Awards, Beginning
779,678 
Restricted Stock Units and Awards Granted
184,578 
Restricted Stock Units and Awards Vested
(221,470)
Restricted Stock Units and Awards Forfeited
(5,204)
Nonvested Restricted Stock Units and Awards, Ending
737,582 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract]
 
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Beginning
$ 16.41 
Restricted Stock Units and Awards Granted, Weighted Average Fair Value
$ 31.28 
Restricted Stock Units and Awards Vested, Weighted Average Fair Value
$ 18.51 
Restricted Stock Units and Awards Forfeited, Weighted Average Fair Value
$ 15.30 
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Ending
$ 19.51 
Other Operating (Income) Expenses, Net (Expense Categories) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 4, 2014
Mar. 29, 2013
Other Operating Income Expense Detail [Line Items]
 
 
Other Operating (Income) Expenses, Net
$ (214)
$ 3,238 
Operating Unit Realignment [Member]
 
 
Other Operating Income Expense Detail [Line Items]
 
 
Other Operating (Income) Expenses, Net
1,003 
0 
Orthopaedic Facility Optimization [Member]
 
 
Other Operating Income Expense Detail [Line Items]
 
 
Other Operating (Income) Expenses, Net
(1,157)
2,636 
Medical Device Facility Optimization [Member]
 
 
Other Operating Income Expense Detail [Line Items]
 
 
Other Operating (Income) Expenses, Net
11 
105 
ERP System Upgrade [Member]
 
 
Other Operating Income Expense Detail [Line Items]
 
 
Other Operating (Income) Expenses, Net
(72)
321 
Acquisition And Integration Costs [Member]
 
 
Other Operating Income Expense Detail [Line Items]
 
 
Other Operating (Income) Expenses, Net
(428)
111 
Asset Dispositions Severance And Other [Member]
 
 
Other Operating Income Expense Detail [Line Items]
 
 
Other Operating (Income) Expenses, Net
$ 429 
$ 65 
Other Operating (Income) Expenses, Net (Restructuring Costs and Reserve Details) (Details) (USD $)
3 Months Ended 12 Months Ended 3 Months Ended
Apr. 4, 2014
Mar. 29, 2013
Apr. 4, 2014
Operating Unit Realignment [Member]
Apr. 4, 2014
Operating Unit Realignment [Member]
Minimum [Member]
Apr. 4, 2014
Operating Unit Realignment [Member]
Minimum [Member]
Severance And Retention [Member]
Apr. 4, 2014
Operating Unit Realignment [Member]
Minimum [Member]
Other Restructuring [Member]
Apr. 4, 2014
Operating Unit Realignment [Member]
Maximum [Member]
Apr. 4, 2014
Operating Unit Realignment [Member]
Maximum [Member]
Severance And Retention [Member]
Apr. 4, 2014
Operating Unit Realignment [Member]
Maximum [Member]
Other Restructuring [Member]
Apr. 4, 2014
Orthopaedic Facility Optimization [Member]
Jan. 3, 2014
Orthopaedic Facility Optimization [Member]
Apr. 4, 2014
Orthopaedic Facility Optimization [Member]
Severance And Retention [Member]
Apr. 4, 2014
Orthopaedic Facility Optimization [Member]
Accelerated Depreciation And Asset Write Offs [Member]
Apr. 4, 2014
Orthopaedic Facility Optimization [Member]
Minimum [Member]
Apr. 4, 2014
Orthopaedic Facility Optimization [Member]
Minimum [Member]
Other Restructuring [Member]
Apr. 4, 2014
Orthopaedic Facility Optimization [Member]
Maximum [Member]
Apr. 4, 2014
Orthopaedic Facility Optimization [Member]
Maximum [Member]
Other Restructuring [Member]
Apr. 4, 2014
Medical Device Facility Optimization [Member]
Apr. 4, 2014
Medical Device Facility Optimization [Member]
Other Restructuring [Member]
Apr. 4, 2014
Medical Device Facility Optimization [Member]
Minimum [Member]
Apr. 4, 2014
Medical Device Facility Optimization [Member]
Minimum [Member]
Production Inefficiencies, Moving And Revalidation [Member]
Apr. 4, 2014
Medical Device Facility Optimization [Member]
Minimum [Member]
Personnel [Member]
Apr. 4, 2014
Medical Device Facility Optimization [Member]
Maximum [Member]
Apr. 4, 2014
Medical Device Facility Optimization [Member]
Maximum [Member]
Production Inefficiencies, Moving And Revalidation [Member]
Apr. 4, 2014
Medical Device Facility Optimization [Member]
Maximum [Member]
Personnel [Member]
Apr. 4, 2014
ERP System Upgrade [Member]
Apr. 4, 2014
ERP System Upgrade [Member]
Training And Consulting Costs [Member]
Apr. 4, 2014
ERP System Upgrade [Member]
Minimum [Member]
Apr. 4, 2014
ERP System Upgrade [Member]
Minimum [Member]
Accelerated Depreciation And Asset Write Offs [Member]
Apr. 4, 2014
ERP System Upgrade [Member]
Maximum [Member]
Apr. 4, 2014
ERP System Upgrade [Member]
Maximum [Member]
Accelerated Depreciation And Asset Write Offs [Member]
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring and Related Activities, Description
 
 
In June 2013, the Company initiated a plan to realign its operating structure in order to optimize its continued focus on profitable growth. As part of this initiative, the sales and marketing and operations groups of its former Implantable Medical and Electrochem reportable segments were combined into one sales and marketing and one operations group serving the entire Company. 
 
 
 
 
 
 
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 on 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. 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 three years. 
 
 
 
 
 
 
 
Near the end of 2011, the Company initiated plans to upgrade and expand its manufacturing infrastructure in order to support its medical device strategy. This includes the transfer of certain product lines to create additional capacity for the manufacture of medical devices, expansion of two existing facilities, as well as the purchase of equipment to enable the production of medical devices. These initiatives are expected to be completed over the next year. 
 
 
 
 
 
 
 
In 2011, the Company initiated plans to upgrade its existing global ERP system. This initiative is expected to be completed over the next three months. 
 
 
 
 
 
Restructuring Initiation Date
 
 
June 2013 
 
 
 
 
 
 
2010 
 
 
 
 
 
 
 
2011 
 
 
 
 
 
 
 
2011 
 
 
 
 
 
Restructuring And Related Activities Expected Capital Expenditures
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 30,000,000 
 
$ 35,000,000 
 
 
 
$ 15,000,000 
 
 
$ 20,000,000 
 
 
 
 
$ 4,000,000 
 
$ 4,300,000 
 
Restructuring And Related Activities Capital Expenditures Incurred To Date
 
 
 
 
 
 
 
 
 
22,300,000 
 
 
 
 
 
 
 
12,500,000 
 
 
 
 
 
 
 
4,000,000 
 
 
 
 
 
Restructuring and Related Cost, Expected Cost
 
 
 
7,000,000 
5,300,000 
1,700,000 
7,500,000 
5,400,000 
2,100,000 
 
 
11,000,000 
13,000,000 
43,000,000 
19,000,000 
48,000,000 
24,000,000 
 
1,000,000 
2,000,000 
500,000 
1,000,000 
3,000,000 
1,000,000 
1,500,000 
 
4,000,000 
6,000,000 
2,000,000 
6,500,000 
2,500,000 
Restructuring and Related Cost, Cost Incurred to Date
 
 
6,600,000 
 
 
 
 
 
 
40,000,000 
 
 
 
 
 
 
 
1,800,000 
 
 
 
 
 
 
 
5,800,000 
 
 
 
 
 
Proceeds from sale of orthopaedic product lines (Note 8)
2,531,000 
1,768,000 
 
 
 
 
 
 
 
 
4,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities Assumed By Third Parties
 
 
 
 
 
 
 
 
 
 
2,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain (Loss) on Disposition of Business
 
 
 
 
 
 
 
 
 
$ 2,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Operating (Income) Expenses, Net Changes in Accrued Liabilities (Details) (USD $)
3 Months Ended 12 Months Ended
Apr. 4, 2014
Jan. 3, 2014
Operating Unit Realignment [Member]
 
 
Restructuring Reserve [Roll Forward]
 
 
Restructuring Reserve, Beginning Balance
$ 1,211,000 
 
Restructuring charges
1,003,000 
 
Cash (payments) receipts
(1,741,000)
 
Restructuring Reserve, Ending Balance
473,000 
 
Orthopaedic Facility Optimization [Member]
 
 
Restructuring Reserve [Roll Forward]
 
 
Restructuring Reserve, Beginning Balance
857,000 
 
Restructuring charges
(1,157,000)
 
Liability assumed in sale of product lines
 
(2,400,000)
Cash (payments) receipts
1,108,000 
 
Restructuring Reserve, Ending Balance
808,000 
857,000 
Medical Device Facility Optimization [Member]
 
 
Restructuring Reserve [Roll Forward]
 
 
Restructuring Reserve, Beginning Balance
0 
 
Restructuring charges
11,000 
 
Cash (payments) receipts
(11,000)
 
Restructuring Reserve, Ending Balance
0 
 
ERP System Upgrade [Member]
 
 
Restructuring Reserve [Roll Forward]
 
 
Restructuring Reserve, Beginning Balance
0 
 
Restructuring charges
72,000 
 
Cash (payments) receipts
72,000 
 
Restructuring Reserve, Ending Balance
0 
 
Severance And Retention [Member] |
Operating Unit Realignment [Member]
 
 
Restructuring Reserve [Roll Forward]
 
 
Restructuring Reserve, Beginning Balance
465,000 
 
Restructuring charges
867,000 
 
Cash (payments) receipts
(938,000)
 
Restructuring Reserve, Ending Balance
394,000 
 
Severance And Retention [Member] |
Orthopaedic Facility Optimization [Member]
 
 
Restructuring Reserve [Roll Forward]
 
 
Restructuring Reserve, Beginning Balance
0 
 
Restructuring charges
0 
 
Cash (payments) receipts
0 
 
Restructuring Reserve, Ending Balance
0 
 
Production Inefficiencies, Moving And Revalidation [Member] |
Medical Device Facility Optimization [Member]
 
 
Restructuring Reserve [Roll Forward]
 
 
Restructuring Reserve, Beginning Balance
0 
 
Restructuring charges
0 
 
Cash (payments) receipts
0 
 
Restructuring Reserve, Ending Balance
0 
 
Training And Consulting Costs [Member] |
ERP System Upgrade [Member]
 
 
Restructuring Reserve [Roll Forward]
 
 
Restructuring Reserve, Beginning Balance
0 
 
Restructuring charges
72,000 
 
Cash (payments) receipts
72,000 
 
Restructuring Reserve, Ending Balance
0 
 
Accelerated Depreciation And Asset Write Offs [Member] |
Orthopaedic Facility Optimization [Member]
 
 
Restructuring Reserve [Roll Forward]
 
 
Restructuring Reserve, Beginning Balance
0 
 
Restructuring charges
(2,531,000)
 
Cash (payments) receipts
2,531,000 
 
Restructuring Reserve, Ending Balance
0 
 
Accelerated Depreciation And Asset Write Offs [Member] |
ERP System Upgrade [Member]
 
 
Restructuring Reserve [Roll Forward]
 
 
Restructuring Reserve, Beginning Balance
0 
 
Restructuring charges
0 
 
Cash (payments) receipts
0 
 
Restructuring Reserve, Ending Balance
0 
 
Personnel [Member] |
Medical Device Facility Optimization [Member]
 
 
Restructuring Reserve [Roll Forward]
 
 
Restructuring Reserve, Beginning Balance
0 
 
Restructuring charges
1,000 
 
Cash (payments) receipts
(1,000)
 
Restructuring Reserve, Ending Balance
0 
 
Other Restructuring [Member] |
Operating Unit Realignment [Member]
 
 
Restructuring Reserve [Roll Forward]
 
 
Restructuring Reserve, Beginning Balance
746,000 
 
Restructuring charges
136,000 
 
Cash (payments) receipts
(803,000)
 
Restructuring Reserve, Ending Balance
79,000 
 
Other Restructuring [Member] |
Orthopaedic Facility Optimization [Member]
 
 
Restructuring Reserve [Roll Forward]
 
 
Restructuring Reserve, Beginning Balance
857,000 
 
Restructuring charges
1,374,000 
 
Cash (payments) receipts
(1,423,000)
 
Restructuring Reserve, Ending Balance
808,000 
 
Other Restructuring [Member] |
Medical Device Facility Optimization [Member]
 
 
Restructuring Reserve [Roll Forward]
 
 
Restructuring Reserve, Beginning Balance
0 
 
Restructuring charges
10,000 
 
Cash (payments) receipts
(10,000)
 
Restructuring Reserve, Ending Balance
$ 0 
 
Income Taxes (Narratives) (Details) (USD $)
In Millions, unless otherwise specified
Apr. 4, 2014
Income Tax Disclosure [Abstract]
 
Unrecognized Tax Benefits
$ 1.9 
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit
0.1 
Unrecognized Tax Benefits that Would Impact Effective Tax Rate
$ 1.7 
Commitments and Contingencies (Narratives) (Details) (USD $)
3 Months Ended
Apr. 4, 2014
Loss Contingencies [Line Items]
 
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. 
Significant 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 also enters into blanket orders with vendors that have preferred pricing and terms, however these orders are normally cancelable without penalty. 
Significant Purchase Commitment Remaining Minimum Amount Committed
$ 28,700,000 
Description of Types of Foreign Currency Cash Flow Hedging Instruments Used
The Company enters into forward contracts to purchase Mexican pesos in order to hedge the risk of peso-denominated payments associated with the operations at its Tijuana, Mexico facility. 
Maximum Aggregate Loss Under Medical Plan Stop Loss Insurance Per Employee
225,000 
Accrued Self Insured Medical Plan Liability
1,400,000 
Litigation One [Member]
 
Loss Contingencies [Line Items]
 
Customer Product Liability Insurance Coverage
5,000,000 
Loss Contingency Domicile Of Litigation
113th Judicial District Court of Harris County, Texas 
Loss Contingency Allegations
The complaint seeks damages alleging marketing and product defects and failure to warn, negligence and gross negligence relating to a product the Company manufactured and sold to a customer, one of the other named defendants. The Company's customer, in turn, incorporated the Greatbatch product into its own product which it sold to its customer, another named defendant. 
Loss Contingency Opinion Of Counsel
To date, the Company has not recorded a reserve in connection with this matter since any potential loss is not currently probable and the range of loss is not reasonably estimable at this time. 
Product Liability Insurance Coverage
$ 10,000,000 
Commitments and Contingencies (Product Warranty Rollforward) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 4, 2014
Movement in Standard Product Warranty Accrual [Roll Forward]
 
Standard Product Warranty Accrual, Beginning Balance
$ 1,819 
Standard Product Warranty Accrual, Warranties Issued
(568)
Standard Product Warranty Accrual, Payments
(79)
Standard Product Warranty Accrual, Ending Balance
$ 1,172 
Commitments and Contingencies (Future Lease Payments) (Details) (USD $)
In Thousands, unless otherwise specified
Apr. 4, 2014
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
 
Remainder of 2014
$ 3,965 
2015
4,742 
2016
4,143 
2017
1,480 
2018
1,003 
Thereafter
936 
Total estimated operating lease expense
$ 16,269 
Commitments and Contingencies (FX Contract Details) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 4, 2014
Mar. 29, 2013
Foreign Currency Cash Flow Hedges [Abstract]
 
 
Increase (reduction) in Cost of Sales
$ 164 
$ 172 
Ineffective portion of change in fair value
0 
0 
Fx Contract 1 [Member]
 
 
Derivative [Line Items]
 
 
Derivative, Type of Instrument
FX Contract 
 
Notional Amount of Foreign Currency Cash Flow Hedge Derivatives
5,781 
 
Start Date
Jan. 01, 2014 
 
End Date
Dec. 31, 2014 
 
$/Peso
0.0767 
 
Fair Value
(61)
 
Balance Sheet Location
Accrued Expenses 
 
Fx Contract 2 [Member]
 
 
Derivative [Line Items]
 
 
Derivative, Type of Instrument
FX Contract 
 
Notional Amount of Foreign Currency Cash Flow Hedge Derivatives
4,740 
 
Start Date
Jan. 01, 2014 
 
End Date
Dec. 31, 2014 
 
$/Peso
0.0752 
 
Fair Value
$ 41 
 
Balance Sheet Location
Accrued Expenses 
 
Earnings Per Share (EPS) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Apr. 4, 2014
Mar. 29, 2013
Net Income (Loss) Available to Common Stockholders, Diluted [Abstract]
 
 
Net income
$ 14,922 
$ 5,663 
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]
 
 
Basic
24,614,000 
23,750,000 
Effect of dilutive securities stock options, restricted stock and restricted stock units
1,080,000 
665,000 
Denominator for diluted EPS
25,694,000 
24,415,000 
Basic EPS
$ 0.61 
$ 0.24 
Diluted EPS
$ 0.58 
$ 0.23 
Anitdilutive Securities Excluded From Earnings Per Share [Abstract]
 
 
Time-vested stock options, restricted stock and restricted stock units
193,000 
532,000 
Performance-vested stock options and restricted stock units
5,900 
595,000 
Convertible Note Shares Included In Diluted Share Calculation
 
0 
Comprehensive Income (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 4, 2014
Mar. 29, 2013
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, before Tax, [Abstract]
 
 
Defined Benefit Plan Liability, Beginning
$ (672)
$ (962)
Net defined benefit plan liability adjustments
 
597 
Defined Benefit Plan Liability, Ending
(672)
(365)
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, before Tax [Abstract]
 
 
Cash Flow Hedges, Beginning
(468)
120 
Unrealized gain (loss) on cash flow hedges
150 
528 
Realized Gain Loss On Foreign Currency Contracts Before Tax
(164)
(172)
Realized Gain Loss On Interest Rate Swaps Before Tax
132 
57 
Cash Flow Hedges, End
(350)
533 
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax [Abstract]
 
 
Foreign Currency Translation Adjustment, Beginning
14,952 
13,431 
Net foreign currency translation gain (loss)
1,182 
(3,063)
Foreign Currency Translation Adjustment, End
16,134 
10,368 
Other Comprehensive Income (Loss), before Tax [Abstract]
 
 
Total Pre-Tax Amount, Beginning
13,812 
12,589 
Unrealized gain (loss) on cash flow hedges
150 
528 
Realized gain loss on foreign currency hedges - before tax
(164)
(172)
Realized gain loss on interest rate swaps - before tax
132 
57 
Net defined benefit plan liability adjustments
 
597 
Net foreign currency translation gain (loss)
1,182 
(3,063)
Total Pre-Tax Amount, End
15,112 
10,536 
Other Comprehensive Income (Loss), Tax [Abstract]
 
 
Tax, Beginning
546 
358 
Unrealized gain (loss) on cash flow hedges
(53)
(184)
Realized gain loss on foreign currency contracts - tax
57 
60 
Realized gain loss on interest rate swap hedges - tax
(45)
(20)
Net defined benefit plan liability adjustments
 
0 
Net foreign currency translation gain (loss)
0 
0 
Tax, End
505 
214 
Other Comprehensive Income (Loss), Net of Tax [Abstract]
 
 
Net-of-Tax Amount, Beginning
14,358 
12,947 
Unrealized gain (loss) on cash flow hedges, net of tax
97 
344 
Realized gain loss on foreign currency hedges, net of tax
(107)
(112)
Realized gain loss on interest rate swap hedges, net of tax
87 
37 
Net defined benefit plan liability adjustments
0 
(597)
Foreign currency translation gain (loss)
1,182 
(3,063)
Net-of-Tax Amount, End
$ 15,617 
$ 10,750 
Accumulated Other Comprehensive Income Amounts Recognized in AOCI (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 4, 2014
Mar. 29, 2013
Statement of Comprehensive Income [Abstract]
 
 
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Unamortized Gain (Loss) Arising During Period, before Tax
 
$ (171)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Gain (Loss), before Tax
 
(581)
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Net Prior Service Cost (Credit) Arising During Period, before Tax
 
155 
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, before Tax
 
(597)
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Tax
 
0 
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Unamortized Gain (Loss) Arising During Period, Net of Tax
$ 0 
$ (597)
Fair Value Measurement (Recurring Measurements) (Details) (USD $)
In Millions, unless otherwise specified
Apr. 4, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract]
 
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months
$ 0.02 
Fair Value Measurement (Contingent Consideration Roll Forward) (Details) (USD $)
3 Months Ended
Apr. 4, 2014
Contingent Consideration Liability [Roll Forward]
 
Accrued Contingent Consideration, Beginning Balance
$ 840,000 
Change in Amount of Contingent Consideration Liability
(430,000)
Accrued Contingent Consideration, Ending Balance
410,000 
Financial Milestones [Member]
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
Contingent Consideration Fair Value
$ 0 
Fair Value Measurement (Contingent Consideration Assumptions) (Details) (Development Milestones [Member], USD $)
3 Months Ended
Apr. 4, 2014
Development Milestones [Member]
 
Fair Value Assumptions [Line Items]
 
Contingent Consideration Fair Value
$ 410,000 
Risk Adjusted Discount Rate For Contingent Consideration
20.00% 
Contingent Consideration Liability Projected Year Of Payment
2015 
Contingent Consideration Liability Probability Weighted Payment Amount
$ 500,000 
Fair Value Measurement (Recurring and Nonrecurring Measurement Basis) (Details) (USD $)
3 Months Ended
Apr. 4, 2014
Mar. 29, 2013
Jan. 3, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Interest rate swap
$ 330,000 
 
 
Foreign currency contracts
20,000 
 
 
Accrued contingent consideration
410,000 
 
840,000 
Assets, Fair Value Disclosure [Abstract]
 
 
 
Long Lived Assets Impairment Loss
0 
0 
 
Maximum Potential Payment Due Upon Achievement Of Certain Milestones
1,000,000 
 
 
Goodwill, Impairment Loss
0 
0 
 
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill)
 
0 
 
Impairment of Intangible Assets (Excluding Goodwill)
0 
 
 
Cost And Equity Method Investments Aggregate Carrying Amount
13,200,000 
 
12,300,000 
Cost And Equity Method Investments Realized Gains Losses Net
800,000 
(70,000)
 
Fair Value, Inputs, Level 1 [Member]
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Interest rate swap
0 
 
 
Foreign currency contracts
0 
 
 
Accrued contingent consideration
0 
 
 
Fair Value, Inputs, Level 2 [Member]
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Interest rate swap
330,000 
 
 
Foreign currency contracts
20,000 
 
 
Accrued contingent consideration
0 
 
 
Fair Value, Inputs, Level 3 [Member]
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
Interest rate swap
0 
 
 
Foreign currency contracts
0 
 
 
Accrued contingent consideration
$ 410,000 
 
 
Business Segment, Geographic And Concentration Risk Information (Segment Revenue by Categories) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 4, 2014
Segment
Mar. 29, 2013
Segment Reporting Information, Revenue for Reportable Segment [Abstract]
 
 
Number of Reportable Segments
2 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Sales Revenue, Net
$ 174,281 
$ 148,265 
Revenue, Major Customer [Line Items]
 
 
Concentration Risk, Percentage
48.00% 
52.00% 
Customer A [Member]
 
 
Revenue, Major Customer [Line Items]
 
 
Concentration Risk, Percentage
21.00% 
19.00% 
Customer B [Member]
 
 
Revenue, Major Customer [Line Items]
 
 
Concentration Risk, Percentage
15.00% 
18.00% 
Customer C [Member]
 
 
Revenue, Major Customer [Line Items]
 
 
Concentration Risk, Percentage
12.00% 
15.00% 
United States [Member]
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Sales Revenue, Net
81,112 
71,334 
Puerto Rico [Member]
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Sales Revenue, Net
34,598 
28,498 
Belgium [Member]
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Sales Revenue, Net
15,979 
17,671 
Rest Of World [Member]
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Sales Revenue, Net
42,592 
30,762 
Greatbatch Medical [Member]
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Sales Revenue, Net
173,595 
147,622 
Greatbatch Medical [Member] |
Cardiac Neuromodulation [Member]
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Sales Revenue, Net
86,780 
70,524 
Greatbatch Medical [Member] |
Orthopaedic [Member]
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Sales Revenue, Net
36,431 
29,623 
Greatbatch Medical [Member] |
Portable Medical [Member]
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Sales Revenue, Net
19,203 
18,889 
Greatbatch Medical [Member] |
Vascular [Member]
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Sales Revenue, Net
13,050 
10,624 
Greatbatch Medical [Member] |
EME and Other [Member]
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Sales Revenue, Net
18,131 
17,962 
QiG [Member]
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Controlling Interest, Number of Ownership Interests
3 
 
Controlling Interest, Liability of Expenses Incurred, Percentage
100.00% 
 
FDA submission date
Dec. 16, 2013 
 
Sales Revenue, Net
$ 686 
$ 643 
CE submission date
Jan. 10, 2014 
 
Maximum [Member] |
QiG [Member]
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Noncontrolling Interest, Ownership Percentage by Parent
100.00% 
 
Minimum [Member] |
QiG [Member]
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
Noncontrolling Interest, Ownership Percentage by Parent
89.00% 
 
Business Segment, Geographic And Concentration Risk Information (Segment Income From Operations) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Apr. 4, 2014
Mar. 29, 2013
Segment Reporting Information [Line Items]
 
 
Operating income as reported
$ 22,524 
$ 14,339 
Unallocated Other Expense
(463)
(7,273)
Income before provision for income taxes
22,061 
7,066 
QiG [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Operating income as reported
(5,913)
(7,356)
Greatbatch Medical [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Operating income as reported
35,128 
26,515 
Operating Segments [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Operating income as reported
29,215 
19,159 
Segment Reconciling Items [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Operating income as reported
$ (6,691)
$ (4,820)
Business Segment, Geographic And Concentration Risk Information (Long-lived Assets by Category) (Details) (USD $)
In Thousands, unless otherwise specified
Apr. 4, 2014
Jan. 3, 2014
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Property, plant and equipment, net
$ 145,186 
$ 145,773 
United States [Member]
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Property, plant and equipment, net
115,535 
116,484 
Rest Of World [Member]
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Property, plant and equipment, net
$ 29,651 
$ 29,289