10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 28, 2012

Commission File Number 1-16137

GREATBATCH, INC.

(Exact name of Registrant as specified in its charter)

Delaware

(State of incorporation)

16-1531026

(I.R.S. employer identification no.)

2591 Dallas Parkway

Suite 101

Frisco, TX 75034

(Address of principal executive offices)

(214) 618-5243

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).    Yes  ¨    No  x

The number of shares outstanding of the Company’s common stock, $0.001 par value per share, as of November 6, 2012 was: 23,695,523 shares.

Greatbatch, Inc.

Table of Contents for Form 10-Q

As of and for the Quarterly Period Ended September 28, 2012

		Page No.
	PART I - FINANCIAL INFORMATION
ITEM 1.	Financial Statements
	Condensed Consolidated Balance Sheets - Unaudited	3
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - Unaudited	4
	Condensed Consolidated Statements of Cash Flows - Unaudited	5
	Condensed Consolidated Statement of Stockholders’ Equity - Unaudited	6
	Notes to Condensed Consolidated Financial Statements - Unaudited	7
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	52
ITEM 4.	Controls and Procedures	54
	PART II - OTHER INFORMATION
ITEM 1.	Legal Proceedings	55
ITEM 1A.	Risk Factors	55
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	55
ITEM 3.	Defaults Upon Senior Securities	55
ITEM 4.	Mine Safety Disclosures	55
ITEM 5.	Other Information	55
ITEM 6.	Exhibits	55
SIGNATURES		56
EXHIBIT INDEX		57

- 2 -

PART I - FINANCIAL INFORMATION

ITEM  1. FINANCIAL STATEMENTS

GREATBATCH, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS - Unaudited

(in thousands except share and per share data)

	As of
	September  28, 2012		December  30, 2011
ASSETS
Current assets:
Cash and cash equivalents	$	10,843	$	36,508
Accounts receivable, net of allowance for doubtful accounts of $2.2 million in 2012 and $1.9 million in 2011		124,803		101,946
Inventories		111,163		109,913
Refundable income taxes		—		1,292
Deferred income taxes		7,261		7,828
Prepaid expenses and other current assets		7,622		7,469
Total current assets		261,692		264,956
Property, plant and equipment, net		156,662		145,806
Amortizing intangible assets, net		91,065		100,258
Indefinite-lived intangible assets		20,828		20,288
Goodwill		347,803		338,653
Deferred income taxes		2,106		2,450
Other assets		11,774		8,936
Total assets	$	891,930	$	881,347
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	44,146	$	40,665
Income taxes payable		2,932		—
Deferred income taxes		1,244		845
Accrued expenses		43,992		52,539
Total current liabilities		92,314		94,049
Long-term debt		230,154		235,950
Deferred income taxes		78,290		75,203
Other long-term liabilities		10,506		8,862
Total liabilities		411,264		414,064
Stockholders’ equity:
Preferred stock, $0.001 par value, authorized 100,000,000 shares; no shares issued or outstanding in 2012 or 2011		—		—
Common stock, $0.001 par value, authorized 100,000,000 shares; 23,676,453 shares issued and outstanding in 2012 23,466,128 shares issued and 23,406,023 shares outstanding in 2011		24		23
Additional paid-in capital		318,032		307,196
Treasury stock, at cost, no shares in 2012 and 60,105 shares in 2011		—		(1,387	)
Retained earnings		153,279		152,522
Accumulated other comprehensive income		9,331		8,929
Total stockholders’ equity		480,666		467,283
Total liabilities and stockholders’ equity	$	891,930	$	881,347

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 3 -

GREATBATCH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS) – Unaudited

(in thousands except per share data)

	Three Months Ended						Nine Months Ended
	September 28,			September 30,			September 28,			September 30,
	2012			2011			2012			2011
Sales	$	161,340		$	131,718		$	486,991		$	427,076
Cost of sales		110,386			89,811			337,216			291,395
Gross profit		50,954			41,907			149,775			135,681
Operating expenses:
Selling, general and administrative expenses		20,274			17,760			60,053			53,980
Research, development and engineering costs, net		13,240			11,072			41,325			32,710
Other operating (income) expense, net		15,313			187			23,981			(166	)
Total operating expenses		48,827			29,019			125,359			86,524
Operating income		2,127			12,888			24,416			49,157
Interest expense		4,401			4,125			13,176			12,802
Interest income		—			(1	)		(1	)		(9	)
Gain on cost method investments, net		(350	)		—			(350	)		(4,232	)
Other (income) expense, net		248			(475	)		774			766
Income (loss) before provision for income taxes		(2,172	)		9,239			10,817			39,830
Provision for income taxes		5,389			2,250			10,060			12,347
Net income (loss)	$	(7,561	)	$	6,989		$	757		$	27,483
Earnings (loss) per share:
Basic	$	(0.32	)	$	0.30		$	0.03		$	1.18
Diluted	$	(0.32	)	$	0.30		$	0.03		$	1.16
Weighted average shares outstanding:
Basic		23,646			23,297			23,559			23,241
Diluted		23,646			23,611			23,924			23,663
Comprehensive income (loss):
Net income (loss)	$	(7,561	)	$	6,989		$	757		$	27,483
Foreign currency translation gain (loss)		1,005			(8,416	)		(522	)		2,887
Net change in cash flow hedges, net of tax		399			(777	)		924			(396	)
Comprehensive income (loss)	$	(6,157	)	$	(2,204	)	$	1,159		$	29,974

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 4 -

GREATBATCH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS – Unaudited

(in thousands)

	Nine Months Ended
	September 28,			September 30,
	2012			2011
Cash flows from operating activities:
Net income	$	757		$	27,483
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		34,070			27,140
Debt related amortization included in interest expense		9,008			8,428
Stock-based compensation		9,007			8,803
Gain on cost method investments, net		(350	)		(4,232	)
Other non-cash (gains) losses		3,300			(1,180	)
Deferred income taxes		3,004			3,274
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		(22,795	)		(10,429	)
Inventories		(4,765	)		(13,594	)
Prepaid expenses and other current assets		1,380			316
Accounts payable		3,257			2,212
Accrued expenses		(314	)		6,376
Income taxes payable		3,985			3,872
Net cash provided by operating activities		39,544			58,469
Cash flows from investing activities:
Acquisition of property, plant and equipment		(33,645	)		(18,223	)
Net proceeds from sale (purchase) of cost and equity method investments		(1,653	)		10,315
Acquisitions, net of cash acquired		(17,224	)		—
Other investing activities		95			(1,910	)
Net cash used in investing activities		(52,427	)		(9,818	)
Cash flows from financing activities:
Principal payments of long-term debt		(24,000	)		(30,000	)
Proceeds from issuance of long-term debt		10,000			—
Issuance of common stock		1,056			2,253
Payment of debt issuance costs		—			(2,114	)
Other financing activities		(12	)		(1,104	)
Net cash used in financing activities		(12,956	)		(30,965	)
Effect of foreign currency exchange rates on cash and cash equivalents		174			1,058
Net increase (decrease) in cash and cash equivalents		(25,665	)		18,744
Cash and cash equivalents, beginning of period		36,508			22,883
Cash and cash equivalents, end of period	$	10,843		$	41,627

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 5 -

GREATBATCH, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY - Unaudited

(in thousands)

																Accumulated
					Additional			Treasury								Other		Total
	Common Stock				Paid-In			Stock						Retained		Comprehensive		Stockholders’
	Shares		Amount		Capital			Shares			Amount			Earnings		Income		Equity
At December 30, 2011		23,466	$	23	$	307,196			(60	)	$	(1,387	)	$	152,522	$	8,929	$	467,283
Stock-based compensation		—		—		6,597			—			—			—		—		6,597
Net shares issued under stock incentive plans		47		—		464			21			476			—		—		940
Income tax liability from stock options, restricted stock and restricted stock units		—		—		(106	)		—			—			—		—		(106	)
Shares contributed to 401(k) Plan		163		1		3,881			39			911			—		—		4,793
Net income		—		—		—			—			—			757		—		757
Total other comprehensive income		—		—		—			—			—			—		402		402
At September 28, 2012		23,676	$	24	$	318,032			—		$	—		$	153,279	$	9,331	$	480,666

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 6 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

1.     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 (“U.S. 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 U.S. 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 December 30, 2011 condensed consolidated balance sheet data was derived from audited consolidated financial statements but does not include all disclosures required by U.S. 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 December 30, 2011. The Company utilizes a fifty-two, fifty-three week fiscal year ending on the Friday nearest December 31st. The third quarter and year-to-date periods of 2012 and 2011 each contained 13 weeks and 39 weeks, respectively, and ended on September 28, and September 30, respectively.

2.     ACQUISITIONS

NeuroNexus Technologies, Inc.

On February 16, 2012, the Company purchased all of the outstanding common stock of NeuroNexus Technologies, Inc. (“NeuroNexus”) headquartered in Ann Arbor, MI. NeuroNexus is an active implantable medical device design firm specializing in developing and commercializing neural interface technology, components and systems for neuroscience and clinical markets. NeuroNexus has an extensive intellectual property portfolio, core technologies and capabilities to support the development and manufacturing of neural interface devices across a wide range of applications including neuromodulation, sensing, optical stimulation and targeted drug delivery.

This transaction was accounted for under the acquisition method of accounting. Accordingly, the operating results of NeuroNexus have been included in the Company’s Implantable Medical segment from the date of acquisition. For the nine months ended September 28, 2012, NeuroNexus added approximately $1.7 million to the Company’s revenue and decreased the Company’s net income by $0.1 million. The purchase price of NeuroNexus consisted of cash payments of $11.7 million and potential future payments of up to an additional $2 million. These future payments are contingent upon the achievement of certain financial and development-based milestones and had an estimated fair value of $1.5 million as of the acquisition date.

- 7 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

The cost of the acquisition was preliminarily allocated to the assets acquired and liabilities assumed from NeuroNexus based on their fair values as of the close of the acquisition, with the amount exceeding the fair value of the net assets acquired being recorded as goodwill. The value assigned to certain assets and liabilities are preliminary and are subject to adjustment as additional information is obtained, including, but not limited to, the finalization of pre-acquisition tax positions. The valuation is expected to be finalized in 2012. When the valuation is finalized, any changes to the preliminary valuation of assets acquired or liabilities assumed may result in material adjustments to the fair value of the intangible assets acquired, as well as goodwill. The following table summarizes the preliminary allocation of the NeuroNexus purchase price to the assets acquired and liabilities assumed as of the acquisition date (in thousands):

Assets acquired
Current assets	$	618
Property, plant and equipment		35
Amortizing intangible assets		2,927
Indefinite-lived intangible assets		540
Goodwill		8,875
Other assets		1,576
Total assets acquired		14,571
Liabilities assumed
Current liabilities		420
Deferred income taxes		940
Total liabilities assumed		1,360
Purchase price	$	13,211

The preliminary fair values of the assets acquired were determined using one of three valuation approaches: market, income and cost. The selection of a particular method for a given asset depended on the reliability of available data and the nature of the asset, among other considerations.

The market approach estimates the value for a subject asset based on available market pricing for comparable assets. The income approach estimates the value for a subject asset based on the present value of cash flows projected to be generated by the asset. The projected cash flows were discounted at a required rate of return that reflects the relative risk of the asset and the time value of money. The projected cash flows for each asset considered multiple factors from the perspective of a marketplace participant including revenue projections from existing customers, attrition trends, product life-cycle assumptions, marginal tax rates and expected profit margins giving consideration to historical and expected margins. The cost approach estimates the value for a subject asset based on the cost to replace the asset and reflects the estimated reproduction or replacement cost for the asset, less an allowance for loss in value due to depreciation or obsolescence, with specific consideration given to economic obsolescence if indicated. These fair value measurement approaches are based on significant unobservable inputs, including management estimates and assumptions.

Current assets and liabilities - The fair value of current assets and liabilities was assumed to approximate their carrying value as of the acquisition date due to the short-term nature of these assets and liabilities.

- 8 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

Intangible assets - The purchase price was allocated to intangible assets as follows (dollars in thousands):

			Weighted		Weighted		Weighted
	Fair		Average		Average		Average
	Value		Amortization		Useful		Discount
	Assigned		Period (Years)		Life (Years)		Rate
Amortizing Intangible Assets
Technology and patents	$	1,058		6		10		14	%
Customer lists		1,869		7		15		13	%
	$	2,927		7		13		13	%

			Weighted		Weighted		Weighted
	Fair		Average		Average		Average
	Value		Amortization		Useful		Discount
	Assigned		Period (Years)		Life (Years)		Rate
Indefinite-Lived Intangible Assets
In-process research and development	$	540		N/A		12		26	%

The weighted average amortization period is less than the estimated useful life due to the Company using an accelerated amortization method, which approximates the projected cash flows used to determine the fair value of those intangible assets.

Technology and patents – Technology and patents consists of technical processes, patented and unpatented technology, manufacturing know-how, trade secrets and the understanding with respect to products or processes that have been developed by NeuroNexus and that will be leveraged in current and future products. The fair value of technology and patents acquired was determined utilizing the relief from royalty method, a form of the income approach, with royalty rates that ranged from 2% to 6%. The estimated useful life of the technology and patents is based upon management’s estimate of the product life cycle associated with technology and patents before they will be replaced by new technologies.

Customer lists – Customer lists represent the estimated fair value of non-contractual customer relationships NeuroNexus has as of the acquisition date. The primary customers of NeuroNexus include numerous scientists and researchers from various geographic locations around the world. These relationships were valued separately from goodwill at the amount which an independent third party would be willing to pay for these relationships. The fair value of customer lists was determined using the multi-period excess-earnings method, a form of the income approach. The estimated useful life of the existing customer was based upon historical customer attrition as well as management’s understanding of the industry and product life cycles.

- 9 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

In-process research and development (“IPR&D”) – IPR&D represents research projects which are expected to generate cash flows but have not yet reached technological feasibility. The primary basis for determining the technological feasibility of these projects is whether or not regulatory approval has been obtained. The Company classifies IPR&D acquired in a business combination as an indefinite-lived intangible asset until the completion or abandonment of the associated projects. Upon completion, the Company would determine the useful life of the IPR&D and begin amortizing the assets to reflect their use over their remaining lives. Upon permanent abandonment, the remaining carrying amount of the associated IPR&D would be written-off. The Company will test the IPR&D acquired for impairment at least annually, and more frequently if events or changes in circumstances indicate that the assets may be impaired. The impairment test consists of a comparison of the fair value of the intangible assets with their carrying amount. If the carrying amount exceeds its fair value, the Company would record an impairment loss in an amount equal to the excess. The Company used the income approach to determine the fair value of the IPR&D acquired. In arriving at the value of the IPR&D, management considered, among other factors: the projects’ stage of completion; the complexity of the work to be completed as of the acquisition date; the projected costs to complete the projects; the contribution of other acquired assets; and the estimated useful life of the technology. The Company applied a market-participant risk-adjusted discount rate to arrive at a present value as of the date of acquisition.

The value assigned to IPR&D related to the development of micro-electrodes for deep brain mapping and electrocorticography, and is expected to be commercialized by 2014. For purposes of valuing the IPR&D, the Company estimated total costs to complete the projects to be approximately $1.5 million. If the projects are not successful or completed in a timely manner, the Company may not realize the financial benefits expected for these projects.

Goodwill – The excess of the purchase price over the fair value of net tangible and intangible assets acquired and liabilities assumed was allocated to goodwill. Various factors contributed to the establishment of goodwill, including: the value of NeuroNexus’s highly trained assembled work force and management team; the incremental value that NeuroNexus’s technology will bring to the Company’s neuromodulation platform currently in development; and the expected revenue growth over time that is attributable to increased market penetration from future products and customers. The goodwill acquired in connection with the NeuroNexus acquisition was allocated to the Implantable Medical business segment and is not deductible for tax purposes.

Micro Power Electronics, Inc.

On December 15, 2011, the Company purchased all of the outstanding common and preferred stock of Micro Power Electronics, Inc. (“Micro Power”) headquartered in Beaverton, OR. Micro Power is a leading supplier of custom battery solutions, serving the portable medical, military and handheld automatic identification and data collection markets. The aggregate purchase price of Micro Power was $71.8 million, which was paid in cash. Total assets acquired from Micro Power were $88.2 million. Total liabilities assumed from Micro Power were $16.4 million.

This transaction was accounted for under the acquisition method of accounting. Accordingly, the operating results of Micro Power have been included in the Company’s Electrochem Solutions (“Electrochem”) segment from the date of acquisition and the cost of the acquisition was preliminarily allocated to the assets acquired and liabilities assumed from Micro Power based on their fair values as of the close of the acquisition, with the amount exceeding the fair value of net assets acquired being recorded as goodwill. The value assigned to certain assets and liabilities are preliminary and are subject to adjustment as additional information is obtained, including, but not limited to, the finalization of pre-acquisition tax positions. The valuation will be finalized in 2012. During 2012, the Company has made adjustments to the Micro Power opening balance sheet valuation based upon the receipt of information that was needed in order to complete the valuation of certain assets and liabilities. As a result, the Company reduced the fair value recorded for the Micro Power amortizing intangible assets acquired by $0.4 million and increased the amount of goodwill recorded by $0.4 million. The impact of these adjustments, individually and in the aggregate, was not considered material and therefore has not been reflected as a retrospective adjustment of the historical financial statements.

- 10 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

Pro Forma Results (Unaudited)

The following unaudited pro forma information presents the consolidated results of operations of the Company, NeuroNexus and Micro Power as if those acquisitions occurred as of the beginning of fiscal years 2011 (NeuroNexus) and 2010 (Micro Power) (in thousands, except per share amounts):

	Three Months Ended					Nine Months Ended
	September 28, 2012			September 30, 2011		September 28, 2012		September 30, 2011
Sales	$	161,340		$	149,991	$	487,431	$	478,159
Net income (loss)		(7,561	)		7,227		583		26,719
Earnings per share:
Basic	$	(0.32	)	$	0.31	$	0.02	$	1.15
Diluted	$	(0.32	)	$	0.31	$	0.02	$	1.13

The unaudited pro forma information presents the combined operating results of Greatbatch, NeuroNexus and Micro Power, with the results prior to the acquisition date adjusted to include the pro forma impact of the amortization of acquired intangible assets based on the purchase price allocations, the adjustment to interest expense reflecting the amount borrowed in connection with the acquisitions at Greatbatch’s interest rate, and the impact of income taxes on the pro forma adjustments utilizing the applicable statutory tax rate. The unaudited pro forma consolidated basic and diluted earnings per share calculations are based on the consolidated basic and diluted weighted average shares of Greatbatch.

The unaudited pro forma results are presented for illustrative purposes only and do not reflect the realization of potential cost savings, and any related integration costs. Certain cost savings may result from the acquisition; however, there can be no assurance that these cost savings will be achieved. These pro forma results do not purport to be indicative of the results that would have been obtained, or to be a projection of results that may be obtained in the future.

- 11 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

3. SUPPLEMENTAL CASH FLOW INFORMATION

	Nine Months Ended
(in thousands)	September 28, 2012		September 30, 2011
Noncash investing and financing activities:
Common stock contributed to 401(k) Plan	$	4,793	$	—
Property, plant and equipment purchases included in accounts payable		4,611		1,575
Cash paid during the period for:
Interest	$	3,250	$	3,700
Income taxes		2,923		5,207
Acquisition of noncash assets	$	14,396	$	—
Liabilities assumed		1,244		—

4. INVENTORIES

Inventories are comprised of the following (in thousands):

	As of
	September 28, 2012		December 30, 2011
Raw materials	$	56,364	$	49,773
Work-in-process		36,902		36,603
Finished goods		17,897		23,537
Total	$	111,163	$	109,913

- 12 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

5. INTANGIBLE ASSETS

Amortizing intangible assets are comprised of the following (in thousands):

	Gross Carrying Amount		Accumulated Amortization			Foreign Currency Translation		Net Carrying Amount
At September 28, 2012
Technology and patents	$	96,862	$	(59,253	)	$	815	$	38,424
Customer lists		68,257		(18,455	)		1,879		51,681
Other		4,434		(4,169	)		695		960
Total amortizing intangible assets	$	169,553	$	(81,877	)	$	3,389	$	91,065
At December 30, 2011
Technology and patents	$	97,324	$	(54,054	)	$	842	$	44,112
Customer lists		66,388		(14,009	)		1,807		54,186
Other		5,174		(4,019	)		805		1,960
Total amortizing intangible assets	$	168,886	$	(72,082	)	$	3,454	$	100,258

During the third quarter of 2012, the Company transferred $0.7 million of Electrochem’s wireless sensing technology and patents to held-for-sale, which is classified within Prepaid Expenses and Other Current Assets in the Condensed Consolidated Balance Sheet.

Aggregate intangible asset amortization expense is comprised of the following (in thousands):

	Three Months Ended				Nine Months Ended
	September 28, 2012		September 30, 2011		September 28, 2012		September 30, 2011
Cost of sales	$	1,863	$	1,446	$	5,658	$	4,595
Selling, general and administrative expenses		1,573		985		4,713		2,912
Research, development and engineering costs, net		136		231		409		231
Total intangible asset amortization expense	$	3,572	$	2,662	$	10,780	$	7,738

- 13 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

Estimated future intangible asset amortization expense based on the current carrying value is as follows (in thousands):

	Estimated Amortization Expense
Remainder of 2012	$	3,474
2013		13,223
2014		13,458
2015		12,407
2016		10,112
Thereafter		38,391
Total estimated amortization expense	$	91,065

The change in indefinite-lived intangible assets is as follows (in thousands):

	Trademarks and Tradenames		IPR&D		Total
At December 30, 2011	$	20,288	$	—	$	20,288
Indefinite-lived assets acquired		—		540		540
At September 28, 2012	$	20,288	$	540	$	20,828

The change in goodwill is as follows (in thousands):

	Implantable Medical			Electrochem		Total
At December 30, 2011	$	297,232		$	41,421	$	338,653
Goodwill acquired		8,875			413		9,288
Foreign currency translation		(138	)		—		(138	)
At September 28, 2012	$	305,969		$	41,834	$	347,803

- 14 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

6. DEBT

Long-term debt is comprised of the following (in thousands):

	As of
	September 28, 2012			December 30, 2011
Revolving line of credit	$	41,000		$	55,000
2.25% convertible subordinated notes, due 2013		197,782			197,782
Unamortized discount		(8,628	)		(16,832	)
Total long-term debt	$	230,154		$	235,950

Revolving Line of Credit –The Company has a revolving credit facility (the “Credit Facility”), which provides a $400 million secured revolving credit facility, and can be increased by $200 million upon the Company’s request and approval by a majority of the lenders. The Credit Facility also contains a $15 million letter of credit subfacility and a $15 million swingline subfacility. The Credit Facility has a maturity date of June 24, 2016; provided, however, if CSN (defined below) are not repaid in full, modified or refinanced before March 1, 2013, the maturity date of the Credit Facility is March 1, 2013.

The Credit Facility is secured by the Company’s non-realty assets including cash, accounts receivable and inventories. Interest rates under the Credit Facility are, at the Company’s option either at: (i) the prime rate plus the applicable margin, which ranges between 0.0% and 1.0%, based on the Company’s total leverage ratio or (ii) the applicable LIBOR rate plus the applicable margin, which ranges between 1.5% and 3.0%, 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 1.0%, 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 $250 million: 1) engage in permitted acquisitions in the aggregate not to exceed $250 million; 2) make other investments in the aggregate not to exceed $60 million; 3) make stock repurchases not to exceed $60 million in the aggregate; and 4) retire up to $198 million of CSN. 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 September 28, 2012, the Company had available to it 100% of the above limits as the Company reset these limits in the second quarter of 2012, except for the aggregate limit and other investments limit which are now $248 million and $58 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 4.0 to 1.0. 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 September 28, 2012, the Company was in compliance with all covenants.

- 15 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

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.

The weighted average interest rate on borrowings under the Credit Facility as of September 28, 2012, was 2.17%. As of September 28, 2012, the Company had $359 million of borrowing capacity available under the Credit Facility. This borrowing capacity may vary from period to period based upon the debt levels of the Company and the level of EBITDA, which impacts the covenant calculations described above.

Interest Rate Swap (Subsequent Event) In October 2012 the Company entered into a three-year $150 million interest rate swap, which amortizes $50 million per year. Under terms of the contract, the Company will receive a floating interest rate indexed to the one-month LIBOR rate and pay a fixed interest rate of 0.573%. The swap will be effective in February 2013. This swap was entered into in order to hedge against potential changes in cash flows on the anticipated outstanding debt on the Credit Facility from the repayment of CSN, which is also expected to be in February 2013 and indexed to the one-month LIBOR rate. The receive variable leg of the interest rate swap and the variable rate paid on the debt is expected to have the same rate of interest, excluding the credit spread, and reset and pay interest on the same dates. This swap will be accounted for as a cash flow hedge.

Convertible Subordinated Notes – In March 2007, the Company completed a private placement of $197.8 million of convertible subordinated notes (“CSN”) at a 5% discount. CSN bear interest at 2.25% per annum, payable semi-annually, and are due on June 15, 2013. The holders may convert CSN into shares of the Company’s common stock at a conversion price of $34.70 per share, which is equivalent to a conversion ratio of 28.8219 shares per $1,000 of principal. The conversion price and the conversion ratio will adjust automatically upon certain changes to the Company’s capitalization. The fair value of CSN as of September 28, 2012 was approximately $197 million and is based on recent sales prices.

The effective interest rate of CSN, which takes into consideration the amortization of the discount and deferred fees related to the issuance of these notes, is 8.5%. The discount on CSN is being amortized to the maturity date utilizing the effective interest method. As of September 28, 2012, the carrying amount of the discount related to the CSN conversion option value was $7.3 million. As of September 28, 2012, the if-converted value of the CSN does not exceed their principal amount as the Company’s closing stock price of $24.33 per share did not exceed the conversion price of CSN.

The contractual interest and discount amortization for CSN were as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 28, 2012		September 30, 2011		September 28, 2012		September 30, 2011
Contractual interest	$	1,113	$	1,113	$	3,338	$	3,338
Discount amortization		2,781		2,602		8,205		7,676

- 16 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

CSN are convertible at the option of the holders at such time as: (i) the closing price of the Company’s common stock exceeds 150% of the conversion price of the notes for 20 out of 30 consecutive trading days; (ii) the trading price per $1,000 of principal is less than 98% of the product of the closing sale price of common stock for each day during any five consecutive trading day period and the conversion rate per $1,000 of principal; (iii) CSN have been called for redemption; (iv) the Company distributes to all holders of common stock rights or warrants entitling them to purchase additional shares of common stock at less than the average closing price of common stock for the ten trading days immediately preceding the announcement of the distribution; (v) the Company distributes to all holders of common stock any form of dividend which has a per share value exceeding 5% of the price of the common stock on the day prior to such date of distribution; (vi) the Company effects a consolidation, merger, share exchange or sale of assets pursuant to which its common stock is converted to cash or other property; (vii) the occurrence of the period beginning 60 days prior to but excluding June 15, 2013; and (viii) certain fundamental changes, as defined in the indenture governing the notes, occur or are approved by the Board of Directors.

Conversions in connection with corporate transactions that constitute a fundamental change require the Company to pay a premium make-whole amount, based upon a predetermined table as set forth in the indenture, whereby the conversion ratio on the notes may be increased by up to 6.3 shares per $1,000 of principal. The premium make-whole amount will be paid in shares of common stock upon any such conversion, subject to the net share settlement feature of the notes described below.

CSN contains a net share settlement feature that requires the Company to pay cash for each $1,000 of principal to be converted. Any amounts in excess of $1,000 will be settled in shares of the Company’s common stock, or at the Company’s option, cash. The Company has a one-time irrevocable election to pay the holders in shares of its common stock, which it currently does not plan to exercise.

CSN are redeemable by the Company at any time on or after June 20, 2012, or at the option of a holder upon the occurrence of certain fundamental changes, as defined in the indenture, affecting the Company. CSN are subordinated in right of payment to all of the Company’s senior indebtedness and effectively subordinated to all debts and other liabilities of the Company’s subsidiaries. The Company currently intends to use availability under the Credit Facility to repay CSN when they mature.

Deferred Financing Fees – The change in deferred financing fees is as follows (in thousands):

At December 30, 2011	$	3,149
Amortization during the period		(802	)
At September 28, 2012	$	2,347

- 17 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

7. 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 the Company’s employees located in Switzerland is a funded contributory plan while the plans that provide benefits to the Company’s employees located in Mexico and France are unfunded and noncontributory. The liability and corresponding expense related to these benefit plans is based on actuarial computations of current and future benefits for employees. As discussed in Note 9 “Other Operating (Income) Expense, Net,” in the third quarter of 2012, the Company finalized its plan to transfer most major functions currently performed at its facilities in Switzerland into other existing facilities. As a result of this decision, the Company curtailed its defined benefit plan provided to employees at those Swiss facilities during the third quarter of 2012. The Company has estimated that a net curtailment gain will be recognized as a result of this curtailment. In accordance with ASC 715, this gain will be recognized as the related employees are terminated. No curtailment gain was recognized in the third quarter of 2012. Additionally, as nearly all of the Swiss pension liability is expected to be paid off in the next year, the Company moved all Swiss pension plan investments into cash during the third quarter of 2012. Plan assets are expected to be sufficient to cover plan liabilities.

The change in net defined benefit plan liability is as follows (in thousands):

At December 30, 2011	$	5,569
Net defined benefit cost		914
Benefit payments		(786	)
Foreign currency translation		(18	)
At September 28, 2012	$	5,679

Net defined benefit cost is comprised of the following (in thousands):

	Three Months Ended						Nine Months Ended
	September 28, 2012			September 30, 2011			September 28, 2012			September 30, 2011
Service cost	$	272		$	290		$	835		$	714
Interest cost		98			124			305			313
Amortization of net loss		30			21			92			16
Expected return on plan assets		(103	)		(126	)		(318	)		(317	)
Net defined benefit cost	$	297		$	309		$	914		$	726

- 18 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

8.     STOCK-BASED COMPENSATION

The components and classification of stock-based compensation expense were as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 28,		September 30,		September 28,		September 30,
	2012		2011		2012		2011
Stock options	$	671	$	629	$	2,038	$	1,792
Restricted stock and units		1,523		1,186		4,559		3,270
401(k) stock contribution		1,280		1,193		2,410		3,741
Total stock-based compensation expense	$	3,474	$	3,008	$	9,007	$	8,803
Cost of sales	$	1,119	$	1,013	$	2,486	$	3,094
Selling, general and administrative		2,006		1,675		5,732		4,787
Research, development and engineering		349		320		789		922
Total stock-based compensation expense	$	3,474	$	3,008	$	9,007	$	8,803

The weighted average fair value and assumptions used to value options granted are as follows:

	Nine Months Ended
	September 28,			September 30,
	2012			2011
Weighted average fair value	$	8.20		$	9.42
Risk-free interest rate		0.83	%		2.04	%
Expected volatility		40	%		40	%
Expected life (in years)		5			5
Expected dividend yield		0	%		0	%

- 19 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

The following table summarizes time-vested stock option activity:

	Number of Time- Vested Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (In Years)		Aggregate Intrinsic Value (In  Millions)
Outstanding at December 30, 2011		1,558,771		$	23.42
Granted		383,292			22.20
Exercised		(44,993	)		20.86
Forfeited or expired		(106,092	)		24.05
Outstanding at September 28, 2012		1,790,978		$	23.19		6.2	$	3.6
Exercisable at September 28, 2012		1,239,536		$	23.38		5.1	$	2.7

The following table summarizes performance-vested stock option activity:

	Number of Performance- Vested Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (In Years)		Aggregate Intrinsic Value (In  Millions)
Outstanding at December 30, 2011		478,364		$	24.44
Exercised		(5,353	)		22.11
Forfeited or expired		(177,733	)		26.49
Outstanding at September 28, 2012		295,278		$	23.25		4.6	$	0.4
Exercisable at September 28, 2012		295,278		$	23.25		4.6	$	0.4

The following table summarizes time-vested restricted stock and unit activity:

	Time-Vested Activity			Weighted Average Fair Value
Nonvested at December 30, 2011		69,942		$	22.69
Granted		87,803			23.48
Vested		(24,228	)		21.91
Forfeited		(5,586	)		22.30
Nonvested at September 28, 2012		127,931		$	23.40

- 20 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

The following table summarizes performance-vested restricted stock and unit activity:

	Performance- Vested Activity			Weighted Average Fair Value
Nonvested at December 30, 2011		529,743		$	16.68
Granted		332,918			15.30
Vested		(7,500	)		24.62
Forfeited		(64,715	)		15.72
Nonvested at September 28, 2012		790,446		$	16.11

9.     OTHER OPERATING (INCOME) EXPENSE, NET

Other Operating (Income) Expense, Net is comprised of the following (in thousands):

	Three Months Ended				Nine Months Ended
	September 28,		September 30,		September 28,		September 30,
	2012		2011		2012		2011
Orthopaedic facility optimization(a)	$	12,452	$	164	$	14,774	$	425
Medical device facility optimization(b)		388		—		1,282		—
ERP system upgrade(c)		1,938		—		4,745		—
Integration costs(d)		232		—		1,287		—
Asset dispositions, severance and other(e)		303		23		1,893		(591	)
	$	15,313	$	187	$	23,981	$	(166	)

(a) 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, which was completed in the second quarter of 2012. In the third quarter of 2012, the Company completed the transfer of the manufacturing operations being performed at its Columbia City, IN orthopaedic facility into this new facility.

In the third quarter of 2012, the Company finalized plans to transfer most major functions currently performed at its facilities in Orvin and Corgemont, Switzerland into existing facilities in Fort Wayne, IN and Tijuana, Mexico by mid-2013.

- 21 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

The total capital investment expected for these initiatives is between $25 million and $35 million, of which $21 million has been expended to date. Total expense expected to be incurred for these initiatives is between $30 million and $36 million, of which $15.4 million has been incurred to date. All expenses will be recorded within the Implantable Medical segment and are expected to include the following; other costs include production inefficiencies, moving, revalidation, personnel, training and travel costs associated with these consolidation projects:

• Severance and retention: $11 million - $13 million;

• Accelerated depreciation and asset write-offs: $10 million - $12 million; and

• Other: $9 million - $11 million.

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 December 30, 2011	$	—		$	—		$	—		$	—
Restructuring charges		4,525			5,246			5,003			14,774
Write-offs		—			(5,246	)		—			(5,246	)
Cash payments		(83	)		—			(5,003	)		(5,086	)
At September 28, 2012	$	4,442		$	—		$	—		$	4,442

(b) 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 will include 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 two to three years. Total capital investment under these initiatives is expected to be between $15 million to $20 million of which approximately $8.5 million has been expended to date. Total expenses expected to be incurred on these projects is between $2.5 million to $3.5 million, of which $1.3 million has been incurred to date. All expenses will be recorded within the Implantable 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: $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 December 30, 2011	$	—		$	—		$	—		$	—
Restructuring charges		549			531			202			1,282
Cash payments		(549	)		(531	)		(202	)		(1,282	)
At September 28, 2012	$	—		$	—		$	—		$	—

- 22 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

(c) 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 two years. Total capital investment under this initiative is expected to be between $4 million to $5 million of which approximately $2.8 million has been expended to date. Total expenses expected to be incurred on this initiative is between $5 million to $7 million, of which $4.7 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:

• Training and consulting costs: $3 million - $4.5 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 December 30, 2011	$	—		$	—		$	—
Charges		2,579			2,166			4,745
Write-offs		—			(2,166	)		(2,166	)
Cash payments		(1,853	)		—			(1,853	)
At September 28, 2012	$	726		$	—		$	726

(d) Integration costs. During 2012, the Company incurred costs related to the integration of Micro Power and NeuroNexus. These expenses were primarily for retention bonuses, travel costs in connection with integration efforts, training and severance, which will not be required or incurred after the integrations are completed.

(e) Asset dispositions, severance and other. During 2012 and 2011, the Company recorded (gains) write-downs in connection with various asset disposals, net of insurance proceeds received, if any. Additionally, during the second quarter of 2012, the Company incurred $1.2 million of costs related to the relocation of its global headquarters to Frisco, Texas.

10.   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.

- 23 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

The effective tax rate for the first nine months of 2012 was 93.0% compared to 31.0% for the same period of 2011. This increase was primarily attributable to approximately $5.0 million of tax charges recorded in connection with the Swiss orthopaedic consolidation. These charges related to the loss of the Company’s Swiss tax holiday, due to its third quarter 2012 decision to discontinue manufacturing in Switzerland, as well as the establishment of a valuation allowance on a portion of its Swiss deferred tax assets as it is more likely than not that they will not be fully realized. Additionally, the 2012 effective tax rate reflects the impact of losses resulting from the Swiss restructuring, the benefit of which are recorded at a lower Swiss effective tax rate, thus increasing the overall effective tax rate of the Company. The effective tax rate also does not include the benefit of the U.S. R&D tax credit, which expired at the end of 2011. The provision for income taxes for the third quarter of 2012 represents the amount necessary to bring the year-to-date effective tax rate to 93.0% and is based upon the Company’s full year expected U.S. GAAP effective tax rate.

During the first nine months of 2012, the balance of unrecognized tax benefits decreased by $0.8 million as a result of the settlement of IRS audits for 2009 and 2010 and as a result of the lapse of certain statute of limitations. Approximately $0.7 million of the balance of unrecognized tax benefits would favorably impact the effective tax rate, net of federal benefit on state issues, if recognized.

11.  COMMITMENTS AND CONTINGENCIES

Litigation – The Company is a party to various legal actions arising in the normal course of business. While the Company does not believe that the ultimate resolution of any such pending actions will have a material effect on its results of operations, financial position, or cash flows, litigation is subject to inherent uncertainties. If an unfavorable ruling were to occur, there exists the possibility of a material impact in the period in which the ruling occurs.

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 December 30, 2011	$	2,013
Additions to warranty reserve		483
Warranty claims paid		(993	)
Foreign currency effect		3
At September 28, 2012	$	1,506

Contractual Obligations – Contractual obligations are defined as agreements that are enforceable and legally binding on the Company and that specify all significant terms, including: fixed or minimum obligations; fixed or minimum price provisions; and the approximate timing of the transaction. The Company’s contractual obligations are normally fulfilled 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 by us without penalty. As of September 28, 2012, the total contractual obligations of the Company are approximately $29.7 million and will primarily be funded by existing cash and cash equivalents, cash flow from operations, or the Credit Facility. The Company also enters into contracts for outsourced services; however, the obligations under these contracts were not significant and the contracts generally contain clauses allowing for cancellation without significant penalty.

- 24 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

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 2012	$	1,072
2013		4,156
2014		4,155
2015		3,566
2016		3,092
Thereafter		3,133
Total estimated operating lease expense	$	19,174

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					Nine Months Ended
	September 28,		September 30,			September 28,			September 30,
	2012		2011			2012			2011
Increase (reduction) in Cost of Sales	$	11	$	(213	)	$	(8	)	$	(529	)
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

$

1,500

Jan-12

Dec-12

0.0767

$

11

Current Assets

FX Contract

Cash flow

1,050

Jan-12

Dec-12

0.0713

89

Current Assets

FX Contract

Cash flow

6,000

Jan-13

Dec-13

0.0727

235

Current Assets/ Other Assets

FX Contract

Cash flow

6,000

Jan-13

Dec-13

0.0693

548

Current Assets/ Other Assets

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 an annual maximum aggregate loss of $13.5 million with a maximum benefit of $1.0 million. As of September 28, 2012, the Company has $2.0 million accrued related to the self-insurance of its medical plan, which is recorded in Accrued Expenses in the Condensed Consolidated Balance Sheet, and is primarily based upon claim history.

- 25 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

12.   EARNINGS (LOSS) PER SHARE (“EPS”)

The following table illustrates the calculation of Basic and Diluted EPS (in thousands, except per share amounts):

	Three Months Ended					Nine Months Ended
	September 28,			September 30,		September 28,		September 30,
	2012			2011		2012		2011
Numerator for basic and diluted EPS:
Net income (loss)	$	(7,561	)	$	6,989	$	757	$	27,483
Denominator for basic EPS:
Weighted average shares outstanding		23,646			23,297		23,559		23,241
Effect of dilutive securities:
Stock options, restricted stock and restricted stock units		—			314		365		422
Denominator for diluted EPS		23,646			23,611		23,924		23,663
Basic EPS	$	(0.32	)	$	0.30	$	0.03	$	1.18
Diluted EPS	$	(0.32	)	$	0.30	$	0.03	$	1.16

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				Nine Months Ended
	September 28,		September 30,		September 28,		September 30,
	2012		2011		2012		2011
Time-vested stock options, restricted stock and restricted stock units		2,223,000		976,000		1,237,000		925,000
Performance-vested stock options and restricted stock units		781,000		672,000		692,000		678,000

For the 2012 and 2011 periods, no shares related to CSN were included in the diluted EPS calculations as the average share price of the Company’s common stock for those periods did not exceed CSN’s conversion price per share.

- 26 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

13.   ACCUMULATED OTHER COMPREHENSIVE INCOME

Accumulated Other Comprehensive Income is comprised of the following (in thousands):

	Defined Benefit Plan Liability			Cash Flow Hedges			Foreign Currency Translation Adjustment			Total Pre-Tax Amount			Tax			Net-of-Tax Amount
At December 30, 2011	$	(2,660	)	$	(538	)	$	11,526		$	8,328		$	601		$	8,929
Unrealized gain on cash flow hedges		—			1,429			—			1,429			(500	)		929
Realized gain on cash flow hedges		—			(8	)		—			(8	)		3			(5	)
Foreign currency translation loss		—			—			(522	)		(522	)		—			(522	)
At September 28, 2012	$	(2,660	)	$	883		$	11,004		$	9,227		$	104		$	9,331

14.   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 foreign currency contracts and accrued contingent consideration. The Company does not have any nonfinancial assets or liabilities that are measured at fair value on a recurring basis.

Foreign currency contracts – The fair value of foreign currency contracts are determined through the use of cash flow models that utilize observable market data inputs to estimate fair value. These observable market data inputs include foreign exchange rate and credit spread curves. In addition to the above, the Company receives fair value estimates from the foreign currency contract counterparty to verify the reasonableness of the Company’s estimates. The Company’s foreign currency contracts are categorized in Level 2 of the fair value hierarchy. The fair value of the Company’s foreign currency contracts will be realized as Cost of Sales as the inventory, which the contracts are hedging the cash flows to produce, is sold, of which approximately $0.7 million is expected to be realized within the next twelve months.

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) Expense, 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.

- 27 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

The fair value of accrued contingent consideration recorded by the Company represents the estimated fair value of the contingent consideration the Company expects to pay to the former shareholders of NeuroNexus based upon the achievement of certain financial and development-based milestones. The fair value of the contingent consideration liability was estimated by discounting to present value, contingent payments expected to be made. The Company used risk-adjusted discount rates ranging from 12 to 20 percent to derive the fair value of the expected obligations as of the acquisition date, which the Company believes is appropriate and representative of market participant assumptions. The Company’s accrued contingent consideration is categorized in Level 3 of the fair value hierarchy. Changes in accrued contingent consideration were as follows (in thousands):

At December 30, 2011	$	—
Contingent consideration liability recorded		1,500
Fair value adjustments		110
At September 28, 2012	$	1,610

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 September 28, 2012		Valuation Technique	Unobservable Inputs
Financial milestones	$	855	Discounted cash flow	Discount rate	12%
				Projected year of payment	2014
Development milestones		755	Discounted cash flow	Discount rate	20%
				Projected year of payment	2014

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
Description	At September 28, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Foreign currency contracts	$	883	$	—	$	883	$	—
Liabilities
Accrued contingent consideration		1,610		—		—		1,610

- 28 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

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. 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, 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 to a present value cash flow calculation 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. During the first nine months of 2012, the Company recorded an impairment charge of $0.3 million relating to the write-off of a definite-lived intangible asset. The Company did not record any impairment charge related to its long-lived assets, other than goodwill and indefinite-lived intangible assets, during the first nine months of 2011.

Goodwill and indefinite-lived intangible assets – The Company assess 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 to a present value cash flow calculation such as a risk-adjusted discount rate, terminal values, 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.

- 29 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

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 to a present value cash flow calculation such as a risk-adjusted discount rate, royalty rates, operating budgets, and long-term strategic plans.

Note 5 “Intangible Assets” contains 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, which are classified as Other Assets. The total carrying value of these investments is reviewed quarterly for changes in circumstance or the occurrence of events that suggest the Company’s investment may not be recoverable. The fair value of cost or equity method investments is not adjusted if there are no identified events or changes in circumstances that may have a material effect on the fair value of the investments. Gains and losses realized on cost and equity method investments are recorded in Other (Income) Expense, Net, unless separately stated. The aggregate recorded amount of cost and equity method investments at September 28, 2012 and December 30, 2011 was $9.3 million and $5.7 million, respectively.

The Company did not record any impairment charges related to its investments during the first nine months of 2012. During the second quarter of 2011, the Company recognized impairment charges related to its cost method investments of $0.3 million. The fair value of these investments was determined by reference to recent sales data of similar shares to independent parties in an inactive market. This fair value calculation was categorized in Level 2 of the fair value hierarchy. In the first quarter of 2011, the Company sold its cost method investment in IntElect Medical, Inc. (“IntElect”) in conjunction with Boston Scientific’s acquisition of IntElect, which resulted in a pre-tax gain of $4.5 million in the first quarter of 2011 and an additional $0.4 million gain during the third quarter of 2012.

Fair Value of Other Financial Instruments

Convertible subordinated notes – The fair value of CSN disclosed in Note 6 “Debt” was determined based upon recent third-party transactions for CSN in an inactive market. CSN are valued for disclosure purposes utilizing Level 2 measurements of the fair value hierarchy.

15.   BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION

The Company operates its business in two reportable segments – Implantable Medical and Electrochem. The Implantable Medical segment (formerly Greatbatch Medical) is comprised of our Greatbatch Medical and QiG Group brands and designs and manufactures medical devices and components for the cardiac rhythm management (“CRM”), neuromodulation, vascular access and orthopaedic markets. Additionally, the Implantable Medical segment offers value-added assembly and design engineering services. As a result of the strategy put in place over three years ago, the Implantable Medical segment offers its customers complete medical devices including design, development, manufacturing, regulatory submission and supporting worldwide distribution. This medical device strategy is being facilitated through the QiG Group and leverages the component technology of Greatbatch in the Company’s core markets: cardiovascular, neuromodulation and orthopaedic. The devices designed and developed by the QiG Group are manufactured by Greatbatch Medical.

- 30 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

Electrochem is an industry leader in designing and manufacturing total power solutions for critical applications with market-leading OEMs, largely in the portable medical and energy space. Electrochem offers its customers consultation, design, development and testing for medical device applications, in high-value markets, including those that support the transition of delivery of health care from clinical to outpatient and home settings, as well as those that enhance the quality of life for an aging population. Examples of these devices include powered surgical tools, automated external defibrillators, portable ultrasound devices, portable oxygen concentrators, and ventilators, among others. Electrochem provides cell and battery pack configurations for rechargeable and non-rechargeable battery power systems, charging and docking stations, and power supplies, for devices where failure is not an option.

The Company defines segment income from operations as sales less cost of sales including amortization and expenses attributable to segment-specific selling, general, administrative, research, development, engineering and other operating activities. Segment income also includes a portion of non-segment specific selling, general, and administrative expenses based on allocations appropriate to the expense categories. The remaining unallocated operating and other expenses are primarily administrative corporate headquarters expenses and capital costs that are not allocated to reportable segments. Transactions between the two segments are not significant.

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				Nine Months Ended
	September 28, 2012		September 30, 2011		September 28, 2012		September 30, 2011
Sales:
Implantable Medical
CRM/Neuromodulation	$	80,246	$	70,731	$	235,406	$	226,492
Vascular Access		13,674		11,396		37,791		32,639
Orthopaedic		27,173		31,131		91,079		108,642
Total Implantable Medical		121,093		113,258		364,276		367,773
Electrochem
Portable Medical		20,219		1,954		59,346		6,105
Energy/Environmental		16,192		13,955		51,441		45,813
Other		3,836		2,551		11,928		7,385
Total Electrochem		40,247		18,460		122,715		59,303
Total sales	$	161,340	$	131,718	$	486,991	$	427,076

- 31 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

	Three Months Ended						Nine Months Ended
	September 28,			September 30,			September 28,			September 30,
	2012			2011			2012			2011
Segment income from operations:
Implantable Medical	$	2,744		$	12,030		$	24,252		$	48,677
Electrochem		5,350			3,631			16,020			12,890
Total segment income from operations		8,094			15,661			40,272			61,567
Unallocated operating expenses		(5,967	)		(2,773	)		(15,856	)		(12,410	)
Operating income as reported		2,127			12,888			24,416			49,157
Unallocated other expense		(4,299	)		(3,649	)		(13,599	)		(9,327	)
Income (loss) before provision for income taxes	$	(2,172	)	$	9,239		$	10,817		$	39,830

	Three Months Ended				Nine Months Ended
	September 28,		September 30,		September 28,		September 30,
	2012		2011		2012		2011
Sales by geographic area:
United States	$	82,522	$	61,502	$	249,306	$	187,795
Non-Domestic locations:
Puerto Rico		31,320		21,522		81,541		72,354
Belgium		11,346		11,958		41,737		48,555
United Kingdom & Ireland		9,837		14,466		34,525		42,585
Rest of world		26,315		22,270		79,882		75,787
Total sales	$	161,340	$	131,718	$	486,991	$	427,076

Four customers accounted for a significant portion of the Company’s sales as follows:

	Three Months Ended						Nine Months Ended
	September 28,			September 30,			September 28,			September 30,
	2012			2011			2012			2011
Customer A		19	%		18	%		19	%		20	%
Customer B		18	%		20	%		15	%		18	%
Customer C		10	%		11	%		10	%		13	%
Customer D		5	%		9	%		6	%		8	%
Total		52	%		58	%		50	%		59	%

- 32 -

GREATBATCH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Unaudited

Long-lived tangible assets by geographic area are as follows (in thousands):

	As of
	September 28,		December 30,
	2012		2011
United States	$	124,451	$	113,693
Rest of world		32,211		32,113
Total	$	156,662	$	145,806

16.   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 July 2012, the FASB issued Accounting Standards Update (“ASU”) No. 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This ASU simplifies the guidance for testing the decline in the realizable value (impairment) of indefinite-lived intangible assets other than goodwill. This ASU allows an organization the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. An organization electing to perform a qualitative assessment is no longer required to calculate the fair value of an indefinite-lived intangible asset unless the organization determines, based on a qualitative assessment, that it is “more likely than not” that the asset is impaired. The amendments in this ASU are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. When adopted, this ASU will not have a material impact on the Company’s Condensed Consolidated Financial Statements as it only impacts the timing of when the Company is required to perform the two-step impairment tests of its indefinite-lived intangible assets other than goodwill.

In December 2011, the FASB issued ASU No. 2011-11 “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.” This ASU requires companies to provide information about trading in financial instruments and related derivatives in expanded disclosures, creates new disclosure requirements about the nature of an entity’s rights of offset and related arrangements associated with its financial instruments and derivative instruments. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods therein, with retrospective application required. When adopted, this ASU will not have a material impact on the Company’s Condensed Consolidated Financial Statements as it only changes the disclosures surrounding the Company’s offsetting assets and liabilities.

- 33 -

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our Business

We operate our business in two reportable segments – Implantable Medical and Electrochem Solutions (“Electrochem”). The Company’s customers include large multi-national original equipment manufacturers (“OEMs”). The Implantable Medical segment (formerly Greatbatch Medical) is comprised of our Greatbatch Medical and QiG Group brands and designs and manufactures medical devices and components for the cardiac rhythm management (“CRM”), neuromodulation, vascular access and orthopaedic markets. Additionally, Implantable Medical offers value-added assembly and design engineering services. As a result of the strategy put in place over three years ago, Implantable Medical now offers its customers complete medical devices including design, development, manufacturing, regulatory submission and supporting worldwide distribution. This medical device strategy is being facilitated through the QiG Group (“QiG”) and leverages the component technology of Greatbatch in our core markets: cardiovascular, neuromodulation and orthopaedic. Once QiG designs and develops a medical device, it is manufactured by Greatbatch Medical. The operating expenses of QiG are included within the Implantable Medical segment.

Electrochem provides industry-leading total power solutions for rechargeable and non-rechargeable battery power systems, charging and docking stations, and power supplies, for critical applications largely in the portable medical and energy markets, where safety, reliability, quality and innovation are critical. Electrochem’s product lines cover a number of highly-customized battery-powered applications in remote and demanding environments, including down hole drilling tools and in life-saving and life-enhancing applications, including automated external defibrillators, portable oxygen concentrators, ventilators and powered surgical tools, among others. Electrochem’s portable medical product line sales were significantly enhanced through the Micro Power Electronics, Inc. (“Micro Power”) acquisition in December 2011.

Our Acquisitions

On December 15, 2011, we acquired all of the outstanding stock of Micro Power headquartered in Beaverton, OR. Micro Power is a leading supplier of custom battery solutions, serving the portable medical, military and handheld automatic identification and data collection markets. Micro Power’s commercial portfolio is highly complementary to the products and services offered by Electrochem. The results of Micro Power were included in our Electrochem segment from the date of acquisition. The aggregate purchase price of Micro Power was $71.8 million, which we funded with cash on hand and $45 million borrowed under our revolving credit facility. Total assets acquired from Micro Power were $88.2 million. Total liabilities assumed from Micro Power were $16.4 million. For the first nine months of 2012, Micro Power added approximately $62.8 million to our revenue.

On February 16, 2012, we purchased all of the outstanding common stock of NeuroNexus Technologies, Inc. (“NeuroNexus”) headquartered in Ann Arbor, MI. NeuroNexus is an active implantable medical device design firm specializing in developing and commercializing neural interface technology, components and systems for neuroscience and clinical markets. NeuroNexus has an extensive intellectual property portfolio, core technologies and capabilities to support the development and manufacturing of innovative neural interface devices across a wide range of functions including neuromodulation, sensing, optical stimulation and targeted drug delivery applications. The results of NeuroNexus were included in our Implantable Medical segment from the date of acquisition. The aggregate purchase price of NeuroNexus was $13.2 million, which we funded with cash on hand and $10 million borrowed under our revolving credit facility. Total assets acquired from NeuroNexus were $14.6 million. Total liabilities assumed from NeuroNexus were $1.4 million. For the first nine months of 2012, NeuroNexus added approximately $1.7 million to our revenue.

- 34 -

Our Customers

Implantable Medical customers include leading OEMs, in alphabetical order here and throughout this report, such as Biotronik, Boston Scientific, Johnson & Johnson, Medtronic, Smith & Nephew, Sorin Group, St. Jude Medical, Stryker and Zimmer. The nature and extent of our selling relationships with each OEM varies in terms of breadth of products purchased, purchased product volumes, length of contractual commitment, ordering patterns, inventory management and selling prices. During the nine months ended September 28, 2012, Boston Scientific, Johnson & Johnson, Medtronic and St. Jude Medical collectively accounted for 50% of our total Company sales.

Electrochem’s customers are primarily companies involved in demanding markets with sophisticated total power solutions needs, such as in the portable medical and energy markets. Some of our larger OEM customers include Phillips Healthcare, Physio-Control, Covidien, Ethicon Endo-Surgery, Carefusion, Halliburton and Weatherford International.

Financial Overview

Third quarter 2012 sales increased 22% over the prior year period to $161.3 million. This increase was driven by our acquisitions, which added $21.6 million to sales, as well as growth of 13% in CRM/neuromodulation and 20% in vascular access revenue. Third quarter results also included the impact of foreign currency exchange rate fluctuations, which lowered orthopaedic sales by approximately $2 million in comparison to the prior year. On an organic constant currency basis, sales for the third quarter increased 8% versus the prior year as the benefits described above were partially offset by fewer customer product launches and development opportunities due to operational issues within our orthopaedic operations, which are aggressively being addressed through our consolidation initiatives. For the nine months ended September 28, 2012, sales increased 14% primarily due to our acquisitions, which added approximately $64.5 million to revenue, partially offset by foreign currency exchange rate fluctuations which lowered orthopaedic sales by approximately $6 million.

We prepare our consolidated financial statements in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Additionally, we consistently report and discuss in our quarterly earnings releases and investor presentations adjusted operating income and margin, adjusted net income and adjusted earnings per diluted share. These adjusted amounts consist of GAAP amounts excluding the following adjustments to the extent they occur during the period: (i) facility consolidation, manufacturing transfer and system integration charges, (ii) asset write-down and disposition charges, (iii) severance charges in connection with corporate realignments or a reduction in force (iv) the impact of non-cash charges to interest expense due to the accounting change governing convertible debt, (v) unusual or infrequently occurring items, (vi) certain research and development expenditures (such as medical device design verification testing (“DVT”) expenses in connection with our development of a neuromodulation platform), (vii) gain/loss on the sale of investments and (viii) the income tax (benefit) related to these adjustments. We believe that reporting these amounts provides important supplemental information to our investors and creditors seeking to understand the financial and business trends relating to our financial condition and results of operations. Additionally, certain performance-based compensation incentives provided to our executives are determined utilizing these adjusted amounts.

- 35 -

A reconciliation of GAAP operating income to adjusted amounts is as follows (in thousands):

	Three Months Ended						Nine Months Ended
	September 28,			September 30,			September 28,			September 30,
	2012			2011			2012			2011
Operating income as reported	$	2,127		$	12,888		$	24,416		$	49,157
Adjustments:
Inventory step-up amortization (COS)		—			—			532			—
Medical device DVT expenses (RD&E)		1,224			1,639			3,839			2,863
Consolidation and optimization costs		14,778			164			20,801			425
Integration expenses		232			—			1,287			—
Asset dispositions, severance and other		303			23			1,893			(591	)
Adjusted operating income	$	18,664		$	14,714		$	52,768		$	51,854
Adjusted operating margin		11.6	%		11.2	%		10.8	%		12.1	%

GAAP operating income for the quarter and year-to-date periods of 2012 was $2.1 million and $24.4 million, respectively, compared to $12.9 million and $49.2 million, respectively, for the comparable 2011 periods. These decreases were primarily due to the charges recorded in connection with the consolidation of our Swiss orthopaedic operations, as well as other productivity initiatives (See Cost Savings and Consolidation Efforts section). As a result of the progress we have made on these initiatives, we now expect that our adjustments to non-GAAP operating income for 2012 will be $40 million to $45 million compared to the $20 million to $30 million estimate provided last quarter. It is important to note that, while we are increasing the 2012 estimate for these expenses, the overall estimate to complete our consolidation initiatives remains unchanged and the impact to our operating cash flows will be significantly less than the charges incurred.

Adjusted operating income was $18.7 million in the third quarter of 2012, compared to $14.7 million for the comparable 2011 period. This 27% increase was primarily a result of our increased revenue as well as the initiatives we began to implement in the second quarter to leverage our operating infrastructure, and optimize our net research, development and engineering (“RD&E”) investments. This included the reallocation of RD&E resources to higher priority projects, the postponement of some RD&E projects, as well as the decision to pursue various alternatives to monetize some of our existing intellectual property that are outside our core business. As a result of these decisions, we expect RD&E for the second half of 2012 to be slightly lower than the first half. In comparison to the second quarter of 2012, net RD&E declined $0.9 million. For the first nine months of 2012, adjusted operating income was $52.8 million compared to $51.9 million for the 2011 period as the benefits described above were offset by the operational issues at our Swiss orthopaedic facilities.

Based upon our results for the first nine months of 2012, we still expect that revenue will be in line with our original guidance as the weakness we are seeing in our orthopaedics revenue is being offset by stronger than expected performance from our CRM and portable medical product lines. Consistent with last quarter, we expect that our full year 2012 adjusted operating income as a percentage of sales and adjusted diluted EPS will be at the lower end of our guidance provided at the beginning of the year due to lower than expected profitability from our Swiss operations. Overall, we estimate that the operational issues at our Swiss orthopaedic facilities decreased our adjusted diluted EPS for the first nine months of 2012 by approximately $0.13 per share versus the first nine months of 2011.

- 36 -

GAAP and adjusted diluted EPS for the third quarter of 2012 were a loss of $0.32 and income of $0.46 per share, respectively, compared to $0.30 and $0.41 per share, respectively, for the third quarter of 2011. For the first nine months of 2012, GAAP and adjusted diluted EPS were $0.03 and $1.25 per share, respectively, compared to $1.16 and $1.29 per share, respectively, for the same period of 2011.

A reconciliation of GAAP net income (loss) and diluted EPS to adjusted amounts is as follows (in thousands, except per share amounts):

	Three Months Ended										Nine Months Ended
	September 28,						September 30,				September 28,						September 30,
	2012						2011				2012						2011
	Net Income (Loss)			Impact Per Diluted Share			Net Income (Loss)		Impact Per Diluted Share		Net Income (Loss)			Impact Per Diluted Share			Net Income (Loss)			Impact Per Diluted Share
Net income (loss) as reported		$(7,561)		$	(0.32	)	$	6,989	$	0.30	$	757		$	0.03		$	27,483		$	1.16
Adjustments:
Inventory step-up amortization (COS)		—			—			—		—		346			0.01			—			—
Medical device DVT expenses (RD&E)		796			0.03			1,065		0.05		2,495			0.10			1,861			0.08
Consolidation and optimization costs(a)		11,119			0.46			107		—		15,034			0.63			276			0.01
Integration expenses		151			0.01			—		—		837			0.03			—			—
Asset dispositions, severance and other		197			0.01			15		—		1,230			0.05			(384	)		(0.02	)
Gain on cost method investments, net(b)		(228	)		(0.01	)		—		—		(228	)		(0.01	)		(2,751	)		(0.12	)
CSN conversion option discount amortization(c)		1,498			0.06			1,391		0.06		4,413			0.18			4,097			0.17
Swiss tax impact(d)		5,008			0.21			—		—		5,008			0.21			—			—
Adjusted net income and diluted EPS(e)		$10,980		$	0.46		$	9,567	$	0.41	$	29,892		$	1.25		$	30,582		$	1.29
Adjusted diluted weighted average shares(f)		24,011						23,611				23,924						23,663

(a) Net of tax amounts computed using U.S. and foreign statutory tax rates of 35% and 22.5%, respectively, for items incurred in those geographic locations.

(b) Pre-tax amount is $350 thousand for both the quarter and year-to-date periods for 2012 and $4.2 million for the year-to-date period of 2011.

(c) Pre-tax amount is $2.3 million and $6.8 million for the 2012 quarter and year-to-date periods, respectively, and $2.1 million and $6.3 million for the 2011 quarter and year-to-date periods, respectively.

(d) Relates to the loss of our Swiss tax holiday due to our decision to discontinue manufacturing in Switzerland, as well as the establishment of a valuation allowance on our Swiss deferred tax assets as it is more likely than not that they will not be fully realized.

(e) The per share data in this table has been rounded to the nearest $0.01 and therefore may not sum to the total.

(f) Weighted average diluted shares for the third quarter of 2012 includes 365 thousand shares of dilution related to outstanding stock incentive awards that were not dilutive for GAAP EPS purposes.

- 37 -

Our CEO’s View

We continue to drive growth in our core business and benefited from favorable market trends and new product introductions within our portable medical product line. During the quarter, we continued to deepen our relationship with our larger OEM customers and successfully negotiated several long-term agreements which secured existing revenue streams, as well as expanded those relationships into other product lines. As we move forward, our goal is to continue to drive core growth through an increased focus on and investment in sales and marketing and the commercialization of our medical device pipeline. Additionally, we are focused on further improving profitability by leveraging our infrastructure and optimizing our research and development investment.

Key points about the third quarter of 2012 are as follows:

• We have a high-growth portable medical product line.

• We have added sales and marketing resources to our Implantable Medical segment focused on growing our revenues faster than the market.

• We are aggressively addressing our Swiss orthopaedic issues with a consolidation plan that is on track to deliver improved operating results starting in early 2013.

• We have reviewed and prioritized our RD&E investment with a goal of improving our return on invested capital both near-term and long term.

• We will continue our on-going productivity efforts with suppliers, lean manufacturing processes and focused cost reductions.

• We are aware of the large difference between our GAAP EPS and Adjusted EPS because of the expenses incurred for our productivity and consolidation initiatives. We expect the difference between GAAP and Adjusted EPS to be much smaller next year and to realize the productivity from our investments we are making this year.

• We are confirming our adjusted diluted EPS guidance at the low end of the range and are cautiously optimistic for the fourth quarter given the continued challenges surrounding key CRM players.

• Our cash flow from operations remains strong and continues to provide the funding needed to execute on all of our strategic objectives.

I am pleased with the progress we have made on our strategic objectives and remain confident that these initiatives will improve the long-term growth and profitability of our Company.

Product Development

Implantable Medical - As part of the natural evolution of our Company, in 2008, we reassigned 40 Greatbatch Medical engineers to create the QiG Group in order to help facilitate the development of complete medical devices for our customers. In creating QiG, we pooled and focused the tremendous talent, resources and capacity for innovation within our organization. Today, QiG encompasses approximately 120 research and development professionals working in facilities in six states and focused on three compelling therapeutic areas: cardiovascular, neuromodulation and, longer-term, orthopaedics. Additionally, QiG has established partnerships with nearly a dozen key physicians who are highly specialized in these areas. These partnerships are helping us to design medical devices from the ground up with features that will meet the needs of today’s practicing clinicians.

As a result of the investments we have made, we are now able to provide our customers with complete medical devices. This includes development and regulatory submissions, as well as manufacturing and supporting worldwide distribution. These medical devices are full product solutions that complement our OEM customers’ products and utilize the component expertise and capabilities residing within Greatbatch. The benefits to our OEM customers include shortening the time to market for these devices by accelerating the velocity of innovation, optimizing their supply chain and ultimately providing them with cost efficiencies.

- 38 -

Within QiG, we are utilizing a disciplined and diversified portfolio approach with three investment modes: strategic equity investments; OEM initiated medical device projects; and independent market driven medical device developments each to be sold by an OEM or distribution partner. The QiG Group employs a disciplined and thorough process for evaluating these opportunities. A scorecard process is utilized to review and select the most strategically valuable ideas to pursue, taking into account a host of variables, including the market opportunity, regulatory pathway and reimbursement, market need and market potential, intellectual property and projected financial return.

Today we have six strategic equity investments and have developed or are in the process of developing nearly a dozen medical devices in conjunction with our OEM partners, which are beginning to provide a return on the investment we have made. Additionally, we have four new medical devices that we are independently working on that are in various stages of development. While we do not intend to discuss each of these projects individually each quarter, we will discuss significant milestones as they occur. Some of the medical device projects that we currently are working on include:

Cardiovascular portfolio - Venous and arterial introducers, anti-microbial coatings, steerable delivery systems, and MRI conditional brady, gastric stimulation and sleep apnea leads. During 2012, we received U.S. Food and Drug Administration (“FDA”) 510(k) clearance on our transradial catheter sheath introducer and steerable delivery sheath for atrial fibrillation ablation and received the CE mark for distribution of our transseptal needle that supports access and delivery of ablation therapies for atrial fibrillation.

Neuromodulation portfolio – With regards to Algostim, our spinal cord stimulator for the treatment of chronic pain in the trunk and limbs, during the second quarter of 2012, we provided an update on the timing of our premarket approval application (“PMA”) submission given the extension of our DVT testing timeline. We continue to make strong technical progress on the development of this device and continue to retire critical milestones needed for program completion and the ultimate submission to regulatory authorities, which we still expect in the second half of 2013.

Additionally, we continue to receive strong interest from numerous world-class medical device companies, who appreciate the unique opportunity to market and distribute Algostim to interventional pain physicians, neurosurgeons and orthopaedic spine surgeons around the world. We believe Algostim’s unique features and benefits will allow the right commercial partner to capture significant market share in today’s $1.3 billion spinal cord stimulation market, which continues to see double digit market growth. We look forward to sharing more details regarding Algostim and our commercial partner progress as well as our other three devices that we are independently developing at our next investor day conference which will be scheduled early next year.

Approximately $0.5 million of the NeuroNexus purchase price in February 2012 was allocated to the estimated fair value of acquired IPR&D projects that expect to generate cash flows but have not yet reached technological feasibility, and thus were classified as an indefinite-lived intangible asset until the completion or abandonment of the associated projects. The value assigned to IPR&D related to the development of micro-electrodes for deep brain mapping and electrocorticography, and is expected to be commercialized by 2014. There have been no significant changes from our original estimates with regards to these projects.

- 39 -

Electrochem - Electrochem continues to win new customers, new applications and next generation products. Our core competencies enable us to be well-positioned to win existing share and additional new product introductions based on our experience in packaging solutions, our customer relationships, our investment in technology and facilities, our capacity to service our customers, and our legacy of delivering highly reliable and innovative solutions to the medical marketplace.

The 2012 growth in Electrochem is being driven by successful product launches into the higher growth, higher value portable medical market. Gaining better access to this attractive market was one of the main drivers behind our acquisition of Micro Power as it provides us with a significant opportunity for growth given its $400 million market size.

Additionally, this market is benefiting from favorable market trends as patient care shifts from clinical settings to the home and as an aging population drives the need for lightweight and portable devices for patients and caregivers. These favorable trends are expected to allow this market to grow faster than our legacy markets over the next several years. Finally, this market is also attractive to us given that it has long product life cycles that should provide stability and diversification to our revenue base.

Cost Savings and Consolidation Efforts

In 2012 and 2011, we recorded charges in Other Operating (Income) Expense, Net in the Condensed Consolidated Statements of Operations related to cost savings and consolidation efforts. These initiatives were undertaken to improve our operational efficiencies and profitability. Additional information regarding the timing, cash flow and amount of future expenditures is set forth in Note 9 “Other Operating (Income) Expense, Net” of the Notes to the Condensed Consolidated Financial Statements contained in Item 1 of this report, as well as the “Liquidity and Capital Resources” section of this Item.

Over the last two years, we have been implementing a multi-faceted plan to further enhance, optimize and leverage our orthopaedics operations. This plan includes the construction of an orthopaedic manufacturing facility in Fort Wayne, IN, updating our Indianapolis, IN facility to streamline operations, increase capacity, and further expand capabilities, and in the third quarter of 2012, we finalized and initiated plans to transfer most major functions currently performed at our facilities in Orvin and Corgemont, Switzerland into our Fort Wayne, IN and Tijuana, Mexico facilities. The total capital investment expected for these initiatives is between $25 million and $35 million, of which $21 million has been expended to date. Total expense expected to be incurred for these initiatives is between $30 million and $36 million, of which $15.4 million has been incurred to date.

Near the end of 2011, we initiated plans to optimize and expand our manufacturing infrastructure in order to support our medical device strategy. This will include the transfer of certain product lines to lower cost facilities, expansion of two of our existing facilities, as well as the purchase of equipment to create additional capacity for the manufacture of medical devices and create additional cost savings. Total capital investment under these initiatives is expected to be between $15 million to $20 million of which approximately $8.5 million has been expended to date. Total expenses expected to be incurred on these projects is between $2.5 million to $3.5 million of which $1.3 million has been incurred to date.

These orthopaedic and medical device initiatives are expected to be completed over the next two to three years and are expected to generate approximately $10 million to $15 million of annual cost savings and increase our capacity in order to support our growth and the manufacturing of complete medical devices.

- 40 -

In 2011, we initiated plans to upgrade our existing global ERP system. This initiative is expected to be completed over the next two years. Total capital investment under this initiative is expected to be approximately $4 million to $5 million of which approximately $2.8 million has been expended to date. Total expenses expected to be incurred on this initiative is between $5 million to $7 million of which $4.7 million has been incurred to date.

Government Regulation

The Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act (collectively “Health Care Reform”) legislated broad-based changes to the U.S. health care system that could significantly impact our business operations and financial results, including higher or lower revenue, as well as higher employee medical costs and taxes. Health Care Reform imposes significant new taxes on medical device OEMs, which will result in a significant increase in the tax burden on our industry and which could have a material negative impact on our financial condition, results of operations and our cash flows. Other elements of Health Care Reform such as comparative effectiveness research, an independent payment advisory board, payment system reforms including shared savings pilots and other provisions could meaningfully change the way healthcare is developed and delivered, and may materially impact numerous aspects of our business, results of operations and financial condition. Many significant parts of Health Care Reform will be phased in over the next several years and require further guidance and clarification in the form of regulations. Management is currently evaluating the impact that the new medical device tax will have on our results from operations beginning in 2013, and has preliminarily estimated that it will reduce operating income by up to $2 million. This amount assumes that this tax applies to the first medical device sale in the U.S. and is based upon a wholesale price.

On August 22, 2012, the U.S. Securities and Exchange Commission (“SEC”) issued a rule under Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requiring companies to publicly disclose their use of conflict minerals that originated in the Democratic Republic of the Congo (DRC) or an adjoining country. Under the adopted rule, issuers are required to conduct a “reasonable” due-diligence process to ascertain the source of conflict minerals, defined as tantalum, tin, gold or tungsten, that are necessary to the functionality or production of their manufactured or contracted to be manufactured products. Companies are required to provide this disclosure on a new form to be filed with the SEC called Form SD. Companies are required to file Form SD on May 31, 2014 for the 2013 calendar period and annually on May 31 every year thereafter. We anticipate additional, new compliance costs to be incurred since our business utilizes all of the minerals specified in the rule.

- 41 -

Our Financial Results

We utilize a fifty-two, fifty-three week fiscal year ending on the Friday nearest December 31st. For 52-week years, each quarter contains 13 weeks. The third quarter and year-to-date periods of 2012 and 2011 ended on September 28, and September 30, respectively, and each contained 13 weeks and 39 weeks, respectively. The commentary that follows should be read in conjunction with our Condensed Consolidated Financial Statements and related notes and with the Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended December 30, 2011.

The following table presents certain selected financial information derived from our Condensed Consolidated Financial Statements for the periods presented (dollars in thousands, except per share data):

	Three Months Ended												Nine Months Ended
	September 28,			September 30,			Change						September 28,			September 30,			Change
	2012			2011			$			%			2012			2011			$			%
Sales:
Implantable Medical
CRM/Neuromodulation	$	80,246		$	70,731		$	9,515			13	%	$	235,406		$	226,492		$	8,914			4	%
Vascular Access		13,674			11,396			2,278			20	%		37,791			32,639			5,152			16	%
Orthopaedic		27,173			31,131			(3,958	)		-13	%		91,079			108,642			(17,563	)		-16	%
Total Implantable Medical		121,093			113,258			7,835			7	%		364,276			367,773			(3,497	)		-1	%
Electrochem
Portable Medical		20,219			1,954			18,265			NA			59,346			6,105			53,241			NA
Energy/Environmental		16,192			13,955			2,237			16	%		51,441			45,813			5,628			12	%
Other		3,836			2,551			1,285			50	%		11,928			7,385			4,543			62	%
Total Electrochem		40,247			18,460			21,787			118	%		122,715			59,303			63,412			107	%
Total sales		161,340			131,718			29,622			22	%		486,991			427,076			59,915			14	%
Cost of sales		110,386			89,811			20,575			23	%		337,216			291,395			45,821			16	%
Gross profit		50,954			41,907			9,047			22	%		149,775			135,681			14,094			10	%
Gross profit as a % of sales		31.6	%		31.8	%								30.8	%		31.8	%
Selling, general and administrative expenses (SG&A)		20,274			17,760			2,514			14	%		60,053			53,980			6,073			11	%
SG&A as a % of sales		12.6	%		13.5	%								12.3	%		12.6	%
Research, development and engineering costs, net (RD&E)		13,240			11,072			2,168			20	%		41,325			32,710			8,615			26	%
RD&E as a % of sales		8.2	%		8.4	%								8.5	%		7.7	%
Other operating (income) expense, net		15,313			187			15,126			NA			23,981			(166	)		24,147			NA
Operating income		2,127			12,888			(10,761	)		NA			24,416			49,157			(24,741	)		-50	%
Operating margin		1.3	%		9.8	%								5.0	%		11.5	%
Interest expense		4,401			4,125			276			7	%		13,176			12,802			374			3	%
Interest income		—			(1	)		1			NA			(1	)		(9	)		8			-89	%
Gain on cost method investments, net		(350	)		—			(350	)		NA			(350	)		(4,232	)		3,882			-92	%
Other (income) expense, net		248			(475	)		723			-152	%		774			766			8			1	%
Provision for income taxes		5,389			2,250			3,139			140	%		10,060			12,347			(2,287	)		-19	%
Effective tax rate		NA			24.4	%								93.0	%		31.0	%
Net income (loss)	$	(7,561	)	$	6,989		$	(14,550	)		NA		$	757		$	27,483		$	(26,726	)		-97	%
Net margin		-4.7	%		5.3	%								0.2	%		6.4	%
Diluted earnings (loss) per share	$	(0.32	)	$	0.30		$	(0.62	)		NA		$	0.03		$	1.16		$	(1.13	)		-97	%

- 42 -

Sales

Third quarter 2012 sales increased 22% over the prior year period to $161.3 million. This increase was driven by our recent acquisitions, which added $21.6 million to sales, as well as a 20% increase in vascular access revenue and 13% growth in our CRM product line. Third quarter results also included the impact of foreign currency exchange rate fluctuations, which lowered orthopaedic sales by approximately $2 million in comparison to the prior year. On an organic constant currency basis, sales for the third quarter increased 8% versus the prior year as the benefits described above were partially offset by continued weakness within our orthopaedics product line. For the year-to-date period, sales increased 14% primarily due to the same reasons that impacted the third quarter results. For the first nine months of 2012, our acquisitions added approximately $64.5 million to revenue while foreign currency exchange rate fluctuations lowered orthopaedic sales by approximately $6 million. At this time, we still expect to achieve our 13% to 17% growth guidance for total sales set at the beginning of the year given stronger than expected performance from our CRM and portable medical product lines.

Implantable Medical – CRM and neuromodulation sales for the third quarter of 2012 increased 13% compared to the prior year to $80.2 million due to more level customer inventory ordering patterns in 2012 in comparison to 2011, as well as easier comparables versus the 2011 period. For the year-to-date period, CRM and neuromodulation sales were 4% above the prior year, which is ahead of our expectations and above market growth rates.

This rate of growth is not expected to continue in the fourth quarter of 2012 as the fourth quarter of 2011 is a much tougher comparable. Additionally, given the continued ongoing challenges surrounding key CRM customers it is important to note that our visibility to customer ordering patterns is over a short period of time and that any significant customer field actions or relative market share shifts among OEM manufacturers could impact our results. We believe that the impact of these factors is somewhat muted by the fact that we have business with all of the key CRM OEMs and have significantly diversified our revenue base over the last four years. We remain cautiously optimistic regarding our CRM business over the short term, but are confident that over the long-term our increased focus on sales and marketing, as well as the increased pace of new product development opportunities we are winning, will allow us to grow this product line faster than the underlying market.

Third quarter and year-to-date 2012 sales for the vascular access product line increased 20% and 16%, respectively, in comparison to the prior year periods and were primarily driven by the commercialization of new medical devices, as well as market growth. We continue to see a high level of interest in our medical device programs from our OEM customers. However, we now believe that our medical device revenue for 2012 will be $8 million to $10 million, down from the $10 million to $15 million guidance we provided earlier in the year. This decrease is primarily due to a lower rate of acceptance for our medical devices than originally anticipated. If achieved, our 2012 projected medical device revenue will still represent a significant increase over our 2011 medical device sales of $5 million.

As discussed more fully in Item 1A “Risk Factors” contained in our Form 10-K, our business depends on a continuous supply of raw materials from a limited number of suppliers. If an unforeseen interruption of supply were to occur, we may be unable to obtain substitute sources for these raw materials on a timely basis or on terms acceptable to us, which could harm our ability to manufacture our products profitably or on time. Additionally, we may be unable to quickly establish additional or replacement suppliers for these materials as there are a limited number of worldwide suppliers. During the first quarter of 2012, one of the companies in our extended supply chain for cyclododecatriene (“CDT”), which we use to manufacture catheters, experienced a fire at one of its facilities and production is expected to be down until the fourth quarter of 2012. For this raw material, we maintain minimum safety stock levels and are actively working with vendors to secure supply. Accordingly, we do not anticipate that this interruption in supply will materially impact our results of operations.

- 43 -

Orthopaedic product line sales for the third quarter and year-to-date periods of 2012 declined 13% (-6% constant currency) and 16% (-11% constant currency), respectively, compared to the same periods of 2011. Foreign currency exchange rate fluctuations decreased orthopaedic revenue by approximately $2 million in the third quarter of 2012 ($6 million year-to-date) in comparison to the prior year. The remaining decline in third quarter and year-to-date 2012 orthopaedic sales was a result of price concessions provided to customers, as well as fewer customer product launches and development opportunities due to operational issues within our orthopaedic facilities, which are aggressively being addressed. Given the softness that we are seeing in our orthopaedic product line, we do not expect to achieve the revenue growth assumptions previously provided for that product line.

In addition to the consolidation of manufacturing, we are also streamlining our Swiss orthopaedic product line. This will include ceasing production on several non-core products. We are evaluating several alternatives and options for these product lines in order to help ensure a smooth transition for our customers, which could include selling these discontinued product lines to an independent third party. Our current estimate is that the discontinuance of these products will reduce our 2013 Orthopaedic revenue by approximately $10 to $15 million.

Electrochem – Third quarter and year-to-date 2012 sales for Electrochem increased $21.8 million and $63.4 million, respectively versus the comparable 2011 periods. 2012 third quarter Electrochem sales included $20.9 million ($62.8 million year-to-date) of revenue related to the acquisition of Micro Power in December 2011. On an organic basis, Electrochem revenue increased 5% and 1% for the quarter and year-to-date periods, respectively, in comparison to the prior year due to continued strength in the energy markets. The Micro Power acquisition continues to exceed our initial expectations, and is being driven by successful product launches into the higher growth, higher value portable medical market. This market is benefiting from the shifting of patient care from clinical settings to the home and an aging population, which is driving the need for lightweight/portable devices for patients and caregivers. Our funnel of portable medical products from this acquisition continues to be full and is expected to drive high single digit revenue growth for this product line for the next several years.

Gross Profit

Changes to gross profit as a percentage of sales from the prior year were due to the following:

	Change From Prior Year
	Three Months			Nine Months
Impact of acquisitions(a)		-2.2	%		-1.6	%
Excess capacity & Swiss production inefficiencies(b)		-0.7	%		-1.7	%
Volume and productivity(c)		2.7	%		3.0	%
Selling price(d)		-0.6	%		-0.9	%
Other		0.6	%		0.2	%
Total percentage point change to gross profit as a percentage of sales		-0.2	%		-1.0	%

(a) Our gross profit percentage was impacted by the acquisition of Micro Power in December 2011, which had a lower gross margin percentage due to its higher percentage of material costs in comparison to our legacy businesses. Additionally, during the first quarter of 2012 we recognized $0.5 million of inventory step-up amortization in connection with this acquisition which will not reoccur in subsequent periods.

- 44 -

(b) Our gross profit percentage was negatively impacted during 2012 due to production inefficiencies at our Swiss orthopaedic facilities. Additionally, as a result of the addition of our Fort Wayne facility in the second quarter of 2012, we experienced excess capacity costs in comparison to 2011. In accordance with our inventory accounting policy, excess capacity costs are expensed in the period they occur. We have aggressively begun to right-size our orthopaedic cost structure and have announced plans to enhance, optimize and leverage this business, which is expected to help improve our gross margin percentage starting in the first quarter of 2013.

(c) Our gross profit percentage benefitted from higher sales volumes, primarily CRM and vascular access, as well as production efficiencies gained at our manufacturing facilities as a result of our various lean and supply chain initiatives.

(d) Our gross profit percentage has been negatively impacted in comparison to the prior year by price concessions made to our larger OEM customers, which were given in exchange for long-term contracts.

Over the long-term, we expect to see gross margin improvements as a result of the consolidation of our orthopaedic operations and from various other productivity improvement initiatives that are being implemented (See Cost Savings and Consolidation Efforts section). Additionally, we expect our gross profit margin to improve as more system and device level products are introduced, which typically earn a higher margin.

SG&A Expenses

Changes to SG&A expenses from the prior year were due to the following (in thousands):

	Change From Prior Year
	Three Months			Nine Months
Impact of acquisitions(a)	$	2,411		$	7,852
Performance-based compensation(b)		286			(725	)
Medical device strategy communication(c)		(12	)		(562	)
Other		(171	)		(492	)
Net increase in SG&A	$	2,514		$	6,073

(a) Amounts represent the incremental SG&A expenses related to the acquisition of Micro Power and NeuroNexus.

(b) Amounts represent the change in performance-based compensation versus the prior year and is recorded based upon the actual results achieved. Performance-based compensation began to increase during the third quarter of 2012 as our revenue and operating results began to improve.

(c) Amounts represent the costs incurred during 2011 in connection with the communication of our medical device strategy to shareholders, customers and associates including costs incurred for our Investor Day held in the first quarter of 2011.

- 45 -

RD&E Expenses, Net

Net RD&E costs are comprised of the following (in thousands):

	Three Months Ended						Nine Months Ended
	September 28,			September 30,			September 28,			September 30,
	2012			2011			2012			2011
Research and development costs	$	6,324		$	5,160		$	18,864		$	13,672
Engineering costs		9,787			8,330			28,956			25,897
Less cost reimbursements		(2,871	)		(2,418	)		(6,495	)		(6,859	)
Engineering costs, net		6,916			5,912			22,461			19,038
Total RD&E, net	$	13,240		$	11,072		$	41,325		$	32,710

Net RD&E for the 2012 third quarter and year-to-date periods increased $2.2 million and $8.6 million, respectively, versus the 2011 periods. Approximately $0.9 million and $2.4 million, respectively, of this increase was a result of the operations from our recent acquisitions. The remainder of this increase can be attributed to the investment in the development of complete medical devices which totaled $6.5 million for the 2012 third quarter ($20.9 million year-to-date) compared to $6.2 million ($16.6 million year-to-date) for 2011. These amounts include $1.2 million ($3.8 million year-to-date) and $1.6 million ($2.9 million year-to-date), respectively, of DVT costs in connection with our development of a neuromodulation platform. When combined with SG&A expenses, total costs incurred in connection with our medical device initiatives totaled $27.3 million for the first nine months of 2012 versus $20.1 million for the comparable 2011 period.

During the second quarter of 2012, we began to implement an initiative to optimize our RD&E investments. This included the reallocation of RD&E resources to higher priority projects, the postponement of some RD&E projects, as well as the decision to pursue various alternatives to monetize some of our existing intellectual property that are outside our core business. As a result of these decisions, we expect RD&E for the second half of 2012 to be slightly lower than the first half. In comparison to the second quarter of 2012, net RD&E for the third quarter of 2012 declined $0.9 million.

- 46 -

Other Operating (Income) Expense, Net

Other operating (income) expense, net is comprised of the following (in thousands):

	Three Months Ended				Nine Months Ended
	September 28,		September 30,		September 28,		September 30,
	2012		2011		2012		2011
Orthopaedic facility optimization(a)	$	12,452	$	164	$	14,774	$	425
Medical device facility optimization(a)		388		—		1,282		—
ERP system upgrade(a)		1,938		—		4,745		—
Integration costs(b)		232		—		1,287		—
Asset dispositions, severance and other(c)		303		23		1,893		(591	)
Total other operating (income) expense, net	$	15,313	$	187	$	23,981	$	(166	)

(a) Refer to “Cost Savings and Consolidation Efforts” section of this Item and Note 9 “Other Operating (Income) Expense, Net” of the Notes to the Condensed Consolidated Financial Statements contained in Item 1 for disclosures related to the timing and level of remaining expenditures for these initiatives.

(b) During 2012, we incurred costs related to the integration of Micro Power and NeuroNexus. These expenses were primarily for retention bonuses, travel costs in connection with integration efforts, and severance, which will not be required or incurred after the integrations are completed.

(c) During 2012 and 2011, we recorded (gains) write-downs in connection with various asset disposals, net of insurance proceeds received, if any. Additionally, during the second quarter of 2012, we incurred $1.2 million of costs related to the relocation of our global headquarters to Frisco, Texas.

Interest Expense and Interest Income

Interest expense for the third quarter and year-to-date periods of 2012 increased over the comparable periods of 2011, primarily due to the increased discount amortization related to our convertible notes, which is being amortized utilizing the effective interest method.

Interest income for the third quarter and year-to-date periods of 2012 were relatively consistent with the comparable 2011 periods.

Gain on Cost Method Investments, Net

In January 2011, we sold our cost method investment in IntElect Medical, Inc. (“IntElect”) in conjunction with Boston Scientific’s acquisition of IntElect. We obtained our ownership interest in IntElect through our acquisition of BIOMEC, Inc. in 2007 and two subsequent additional investments. This transaction resulted in a pre-tax gain of $4.5 million in the first quarter of 2011 and an additional $0.4 million gain during the third quarter of 2012. During the second quarter of 2011, we recorded a $0.3 million write down of one of our cost method investments based upon a recent stock offering by that company. The total carrying value of our cost and equity method 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 our investments. If such events should occur they could materially impact our financial results. The aggregate recorded amount of cost and equity method investments at September 28, 2012 was $9.3 million.

- 47 -

Other (Income) Expense, Net

Other (income) expense, net primarily includes the impact of foreign currency exchange rate fluctuations on transactions denominated in foreign currencies. We generally do not expect foreign currency exchange rate fluctuations to have a material impact on our financial results.

Provision for Income Taxes

The effective tax rate (including discrete items) for the nine months ended September 28, 2012 was 93.0% versus 31.0% for the comparable 2011 period. This fluctuation was primarily attributable to approximately $5.0 million of tax charges recorded in connection with our Swiss orthopaedic consolidation. These charges related to the loss of our Swiss tax holiday, due to our third quarter 2012 decision to discontinue manufacturing in Switzerland, as well as the establishment of a valuation allowance on a portion of our Swiss deferred tax assets as it is more likely than not that they will not be fully realized. Additionally, our 2012 effective tax rate reflects the impact of losses resulting from our Swiss restructuring, the benefit of which are recorded at the lower Swiss effective tax rate, thus increasing the overall effective tax rate of the Company. The effective tax rate also does not include the benefit of the U.S. R&D tax credit, which expired at the end of 2011. The provision for income taxes for the third quarter of 2012 represents the amount necessary to bring our year-to-date effective tax rate to 93.0% and is based upon our full year expected GAAP effective tax rate.

We currently expect our 2012 annual GAAP effective tax rate to be between 90% and 95%, depending on the timing of expenses incurred in connection with the ongoing restructuring of the manufacturing operations in Switzerland. On an adjusted basis, which will exclude the impact of these consolidation costs, we expect our effective tax rate to be more in line with the U.S. statutory rate of 35%. We expect there to be continued volatility of this effective tax rate due to several factors, including changes in the mix of 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. It is important to note that the impact of the loss of the Swiss tax holiday, valuation allowance on our Swiss deferred tax assets as well as the impact of the loss of the R&D tax credit could all be reversed at some point in the future if we attain a new tax holiday, if our operations in Switzerland become profitable, or if the R&D tax credit is reinstated. We currently have various tax planning initiatives in place that are aimed at reducing our effective tax rate over the long-term and is another strategic objective we are focused on.

Liquidity and Capital Resources

	As of
	September 28,		December 30,
(Dollars in thousands)	2012		2011
Cash and cash equivalents		$  10,843	$	36,508
Working capital		$169,378	$	170,907
Current ratio		2.83		2.82

The decrease in cash and cash equivalents from the end of 2011 was primarily due to the cash used in connection with our acquisitions, the purchase of property, plant and equipment, and the net repayment of long-term debt during the year partially offset by cash flows from operations. Our working capital and current ratio remained consistent with the prior year.

- 48 -

Revolving Line of Credit – We have a senior credit facility (the “Credit Facility”) consisting of a $400 million revolving line of credit, which can be increased to $600 million upon our request and approval by a majority of the lenders. The Credit Facility also contains a $15 million letter of credit subfacility and a $15 million swingline subfacility. The Credit Facility has a maturity date of June 24, 2016; provided, however, if our convertible notes are not repaid in full, modified or refinanced before March 1, 2013, the maturity date of the Credit Facility is March 1, 2013.

The Credit Facility is supported by a consortium of fourteen banks with no bank controlling more than 19% of the facility. As of September 28, 2012, each bank supporting the Credit Facility has an S&P credit rating of at least BBB or better, which is considered investment grade.

The Credit Facility requires us to maintain a rolling four quarter ratio of adjusted EBITDA to interest expense of at least 3.0 to 1.0. For the twelve month period ended September 28, 2012, our ratio of adjusted EBITDA to interest expense, calculated in accordance with our credit agreement, was 17.5 to 1.0, well above the required limit. The Credit Facility also requires us to maintain a total leverage ratio of not greater than 4.0 to 1.0. As of September 28, 2012, our total leverage ratio, calculated in accordance with our credit agreement, was 2.36 to 1.0, well below the required limit.

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. See Note 6 “Debt” of the Notes to Condensed Consolidated Financial Statements in this report for a more detailed description of the Credit Facility.

As of September 28, 2012, we had $359 million of borrowing capacity available under the Credit Facility. This amount may vary from period to period based upon our debt and EBITDA levels, which impacts the covenant calculations discussed above. We believe that our cash flow from operations and the Credit Facility provide adequate liquidity to meet our short- and long- term funding needs.

Operating activities – Cash flows from operations for the first nine months of 2012 were $39.5 million, which was below the comparable 2011 period of $58.5 million. The decrease from the prior year was primarily due to our lower net income and the payment of a higher level of performance-based compensation in 2012 (based upon 2011 results) in comparison to what was paid in 2011 (based upon 2010 results). Additionally, accounts receivable has increased since prior year primarily due to higher sales volumes as well as a slight increase due to timing of customer remittances.

Investing activities – Net cash used in investing activities for the first nine months of 2012 was $52.4 million. This included $17.2 million of cash used in connection with our purchase of NeuroNexus and Micro Power, $1.7 million of net investment purchases, as well as $33.6 million used for the purchase of property, plant and equipment in connection with the consolidation and optimization initiatives discussed in the “Cost Savings and Consolidation Efforts” section of this Item (primarily the construction of our Fort Wayne facility which was completed in the second quarter of 2012) and routine capital expenditures. Our current expectation is that capital spending for the remainder of 2012 will be in the range of $10 million to $15 million, of which approximately half is discretionary in nature. We anticipate that cash on hand, cash flow from operations and availability under our Credit Facility will be sufficient to fund these capital expenditures. As part of our growth strategy, we have and will continue to consider targeted and opportunistic acquisitions.

- 49 -

Financing activities – Net cash used in financing activities for the first nine months of 2012 was $13.0 million compared to $31.0 million for the prior year period. During the first nine months of 2012, we borrowed $10 million under our revolving credit facility to fund the acquisition of NeuroNexus and utilized cash flow from operations to repay $24 million under our Credit Facility. Going forward, we expect excess cash flow from operations to be used to fund our consolidation initiatives and to pay down outstanding debt.

We currently have outstanding $197.8 million of convertible subordinated notes, which are due to mature on June 15, 2013. We currently intend to utilize availability under the Credit Facility and cash flow from operations to repay the notes, which is specifically permitted under the terms of the Credit Facility, and is expected to occur in February 2013.

Capital Structure – As of September 28, 2012, our capital structure consisted of $197.8 million of convertible subordinated notes, $41.0 million of debt under our Credit Facility and 23.7 million shares of common stock outstanding. Additionally, we had $10.8 million in cash and cash equivalents, which is sufficient to meet our short-term operating cash needs. If necessary, we currently have access to $359 million under our Credit Facility and are authorized to issue 100 million shares of common stock and 100 million shares of preferred stock. We believe that if needed we can access public markets to raise additional capital. We believe that our capital structure provides adequate funding to meet our growth objectives. We continuously evaluate our capital structure as it relates to our anticipated long-term funding needs. Changes to our capital structure may occur as a result of this analysis, or changes in market conditions.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements within the meaning of Item 303(a)(4) of Regulation S-K.

Contractual Obligations

The following table summarizes our significant contractual obligations at September 28, 2012:

	Payments due by period
CONTRACTUAL OBLIGATIONS	Total		Remainder of 2012		2013 - 2014		2015 - 2016		After 2016
Debt obligations(a)		$282,010	$	1,335	$	233,472	$	44,769	$	2,434
Operating lease obligations(b)		19,174		1,072		8,311		6,658		3,133
Purchase obligations(b)		29,665		12,204		8,263		7,399		1,799
Foreign currency contracts(b)		14,550		2,550		12,000		—		—
Pension obligations(c)		10,861		193		10,668		—		—
Total contractual obligations		$356,260	$	17,354	$	272,714	$	58,826	$	7,366

(a) Includes the annual interest expense on our convertible subordinated notes of 2.25%, which is paid semi-annually. Also includes $36.5 million of deferred federal and state taxes on the Company’s convertible subordinated notes that will be due if the notes are not converted before maturity. Amounts also include the expected interest expense on the $41.0 million outstanding on our line of credit based upon the period end weighted average interest rate of 2.17%. See Note 6 “Debt” of the Notes to Condensed Consolidated Financial Statements in this report for additional information.

- 50 -

(b) See Note 11 “Commitments and Contingencies” of the Notes to Condensed Consolidated Financial Statements in this report for additional information about our operating leases, purchase obligations and foreign currency contracts.

(c) See Note 7 “Defined Benefit Plans” of the Notes to Condensed Consolidated Financial Statements in this report for additional information about our defined benefit plan obligations. As discussed in Note 9 “Other Operating (Income) Expense, Net,” in the third quarter of 2012, we finalized our plan to transfer most major functions currently performed at our facilities in Switzerland into existing facilities. As a result of this decision, we curtailed our defined benefit plan provided to employees at those facilities in the third quarter of 2012. As nearly all of the Swiss pension liability is expected to be paid off in the next year, the Company moved all Swiss pension plan investments into cash during the quarter. Plan assets are expected to be sufficient to cover plan liabilities.

This table does not reflect $0.8 million of unrecognized tax benefits as we are uncertain as to if or when such amounts may be settled. Refer to Note 10 “Income Taxes” of the Notes to Condensed Consolidated Financial Statements in this report for additional information about these unrecognized tax benefits.

We self-fund the medical insurance coverage provided to our U.S. based employees. Our risk is being limited through the use of stop loss insurance, which has an annual maximum aggregate loss of $13.5 million with a maximum benefit of $1.0 million. As of September 28, 2012, we have $2.0 million accrued related to our self-insured medical plan, which is recorded in Accrued Expenses in the Condensed Consolidated Balance Sheet, and is primarily based upon claim history. This table does not reflect any potential future payments for self-insured medical claims.

Impact of Recently Issued Accounting Standards

In the normal course of business, we evaluate all new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”), Securities and Exchange Commission (“SEC”), Emerging Issues Task Force (“EITF”), American Institute of Certified Public Accountants (“AICPA”) or other authoritative accounting body to determine the potential impact they may have on our Condensed Consolidated Financial Statements. Based upon this review, we do not expect any of the recently issued accounting pronouncements, which have not already been adopted, to have a material impact on our Condensed Consolidated Financial Statements. See Note 16 “Impact of Recently Issued Accounting Standards” of the Notes to the Condensed Consolidated Financial Statements in this report for additional information.

Forward-Looking Statements

Some of the statements contained in this report and other written and oral statements made from time to time by us and our representatives are not statements of historical or current fact. As such, they are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We have based these forward-looking statements on our current expectations, which are subject to known and unknown risks, uncertainties and assumptions. They include statements relating to:

• future sales, expenses and profitability;

• the future development and expected growth of our business and the markets we operate in;

• our ability to successfully execute our business model and our business strategy;

• our ability to identify trends within our markets and to offer products and services that meet the changing needs of those markets;

• our ability to design, develop, and commercialize complete medical devices;

- 51 -

• projected capital expenditures; and

• trends in government regulation, including the impact of Health Care Reform.

You can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially from those suggested by these forward-looking statements. In evaluating these statements and our prospects generally, you should carefully consider the factors set forth below. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary factors and to others contained throughout this report. We are under no duty to update any of the forward-looking statements after the date of this report or to conform these statements to actual results.

Although it is not possible to create a comprehensive list of all factors that may cause actual results to differ from the results expressed or implied by our forward-looking statements or that may affect our future results, some of these factors include the following: dependence upon a limited number of customers, product obsolescence, inability to market current or future products including complete medical devices, pricing pressure from and vertical integration by our customers, reliance on third party suppliers for raw materials, products and subcomponents, fluctuating operating results, inability to maintain high quality standards for our products, challenges to our intellectual property rights, product liability claims, inability to successfully consummate and integrate acquisitions, unsuccessful expansion into new markets, competition, inability to obtain licenses to key technology, regulatory changes or consolidation in the healthcare industry, and other risks and uncertainties that arise from time to time as described in the Company’s Annual Report on Form 10-K and other periodic filings with the SEC.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency – We have significant foreign operations in France, Mexico and Switzerland, which expose the Company to foreign currency exchange rate fluctuations due to transactions denominated in Euros, Mexican pesos and Swiss francs, respectively. We continuously evaluate our foreign currency risk and will take action from time to time in order to best mitigate these risks, which includes the use of various derivative instruments such as forward currency exchange contracts. A hypothetical 10% change in the value of the U.S. dollar in relation to our most significant foreign currency exposures would have had an impact of approximately $8 million on our annual sales. This amount is not indicative of the hypothetical net earnings impact due to partially offsetting impacts on cost of sales and operating expenses in those currencies. We estimate that foreign currency exchange rate fluctuations during the nine months ended September 28, 2012 decreased sales in comparison to the 2011 period by approximately $6 million.

In September 2011, we entered into two forward contracts to purchase 6.5 million and 4.9 million Mexican pesos per month beginning in January 2012 through December 2012 at an exchange rate of $0.0767 and $0.0713 per peso, respectively. These contracts were entered into in order to hedge the risk of peso-denominated payments associated with a portion of the operations at our Tijuana, Mexico facility for 2012 and are being accounted for as cash flow hedges.

In May 2012, we entered into two forward contracts to purchase 6.9 million and 7.2 million Mexican pesos per month beginning in January 2013 through December 2013 at an exchange rate of $0.0727 and $0.0693 per peso, respectively. These contracts were entered into in order to hedge the risk of peso-denominated payments associated with a portion of the operations at our Tijuana, Mexico facility for 2013 and are being accounted for as cash flow hedges.

- 52 -

As of September 28, 2012, these contracts had a positive fair value of $0.9 million, which is recorded within Prepaid Expenses and Other Current Assets and Other Assets, in the Condensed Consolidated Balance Sheet. The amount recorded as a reduction of Cost of Sales during the nine months ended September 28, 2012 and nine months ended September 30, 2011 related to these forward contracts was $0.01 million and $0.5 million, respectively. No portion of the change in fair value of our foreign currency contracts during the nine months ended September 28, 2012 or September 30, 2011 was considered ineffective.

We translate all assets and liabilities of our foreign operations, where the U.S. dollar is not the functional currency, at the period-end exchange rate and translate sales and expenses at the average exchange rates in effect during the period. The net effect of these translation adjustments is recorded in the Condensed Consolidated Financial Statements as Comprehensive Income. The translation adjustment for the nine months ended September 28, 2012 was a $0.5 million loss. Translation adjustments are not adjusted for income taxes as they relate to permanent investments in our foreign subsidiaries. Net foreign currency transaction gains and losses included in Other (Income) Expense, Net amounted to a loss of $0.2 million for the nine months ended September 28, 2012. A hypothetical 10% change in the value of the U.S. dollar in relation to our most significant foreign currency net assets would have had an impact of approximately $8.5 million on our foreign net assets as of September 28, 2012.

Interest Rates – Interest rates on our Credit Facility reset, at our option, based upon the prime rate or LIBOR rate, thus subjecting us to interest rate risk. To help offset this risk, from time to time, we enter into receive floating-pay fixed interest rate swaps indexed to the same applicable index rate as the debt it is hedging. In October 2012 we entered into a three-year $150 million interest rate swap, which amortizes $50 million per year. Under terms of the contract, we will receive a floating interest rate indexed to the one-month LIBOR rate and pay a fixed interest rate of 0.573%. The swap will be effective in February 2013. This swap was entered into in order to hedge against potential changes in cash flows on the anticipated outstanding debt on the Credit Facility from the repayment of our convertible subordinated notes, which is also expected to be in February 2013 and indexed to the one-month LIBOR rate. The receive variable leg of the interest rate swap and the variable rate paid on the debt is expected to have the same rate of interest, excluding the credit spread, and reset and pay interest on the same dates. This swap will be accounted for as a cash flow hedge.

As of September 28, 2012, we had $41.0 million outstanding on our revolving line of credit that is currently not being hedged. See Note 6 “Debt” of the Notes to Condensed Consolidated Financial Statements in this report for additional information about our outstanding debt. A hypothetical one percentage point (100 basis points) change in the prime rate on the $41.0 million of floating rate debt outstanding at September 28, 2012 would have an impact of approximately $0.4 million on our interest expense.

- 53 -

ITEM 4. CONTROLS AND PROCEDURES

a. Evaluation of Disclosure Controls and Procedures.

Our management, including the principal executive officer and principal financial officer, evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) related to the recording, processing, summarization and reporting of information in our reports that we file with the SEC as of September 28, 2012. These disclosure controls and procedures have been designed to provide reasonable assurance that material information relating to us, including our subsidiaries, is made known to our management, including these officers, by other of our employees, and that this information is recorded, processed, summarized, evaluated and reported, as applicable, within the time periods specified in the SEC’s rules and forms. Based on their evaluation, as of September 28, 2012, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective.

b. Changes in Internal Control Over Financial Reporting.

We completed the following acquisitions during 2011 and 2012:

• Micro Power Electronics, Inc. on December 15, 2011

• NeuroNexus Technologies, Inc. on February 16, 2012

We believe that the internal controls and procedures of the above mentioned acquisitions are reasonably likely to materially affect our internal control over financial reporting. We are currently in the process of incorporating the internal controls and procedures of these acquisitions into our internal controls over financial reporting.

The Company continues to extend its Section 404 compliance program under the Sarbanes-Oxley Act of 2002 (the “Act”) and the applicable rules and regulations under such Act to include these acquisitions. This included the conversion of the legacy ERP system of Micro Power in the third quarter of 2012 to the Oracle-based platform currently being utilized by other Greatbatch locations. The Company has excluded the 2011 acquisition listed above from management’s assessment of the effectiveness of internal control over financial reporting as of December 30, 2011, as permitted by the guidance issued by the Office of the Chief Accountant of the SEC. The Company will report on its assessment of the internal controls of its combined operations within the time period provided by the Act and the applicable SEC rules and regulations concerning business combinations.

There have been no changes in our internal control over financial reporting that occurred during our last fiscal quarter to which this Quarterly Report on Form 10-Q relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

- 54 -

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There have been no material changes to the Company’s legal proceedings as previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 30, 2011.

ITEM 1A. RISK FACTORS

There have been no material changes from risk factors as previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 30, 2011.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

See the Exhibit Index for a list of those exhibits filed herewith.

- 55 -

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: November 6, 2012	GREATBATCH, INC.
	By	/s/ Thomas J. Hook
		Thomas J. Hook
		President and Chief Executive Officer (Principal Executive Officer)
	By	/s/ Michael Dinkins
		Michael Dinkins Senior Vice President and Chief Financial Officer (Principal Financial Officer)
	By	/s/ Thomas J. Mazza
		Thomas J. Mazza Vice President and Corporate Controller (Principal Accounting Officer)

- 56 -

EXHIBIT INDEX

Exhibit No.	Description
3.1	Amended and Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to our quarterly report on Form 10-Q for the period ended June 27, 2008).
3.2	Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to our annual report on Form 10-K for the period ended January 1, 2010).
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act.
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Extension Schema Document
101.CAL	XBRL Extension Calculation Linkbase Document
101.LAB	XBRL Extension Label Linkbase Document
101.PRE	XBRL Extension Presentation Linkbase Document
101.DEF	XBRL Extension Definition Linkbase Document

- 57 -

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Thomas J. Hook, certify that:

1. I have reviewed this report on Form 10-Q for the fiscal quarter ended September 28, 2012 of Greatbatch, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

- 58 -

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditor and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 6, 2012	/s/ Thomas J. Hook
	Thomas J. Hook
	President and Chief Executive Officer
	(Principal Executive Officer)

- 59 -

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Michael Dinkins, certify that:

1. I have reviewed this report on Form 10-Q for the fiscal quarter ended September 28, 2012 of Greatbatch, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

- 60 -

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditor and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 6, 2012	/s/ Michael Dinkins
	Michael Dinkins
	Senior Vice President and Chief Financial Officer
	(Principal Financial Officer)

- 61 -

EX-32.1

Exhibit 32.1

CERTIFICATION

Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Greatbatch, Inc. (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended September 28, 2012 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 6, 2012	/s/ Thomas J. Hook
	Thomas J. Hook
	President and Chief Executive Officer
	(Principal Executive Officer)
Dated: November 6, 2012	/s/ Michael Dinkins
	Michael Dinkins
	Senior Vice President and Chief Financial Officer
	(Principal Financial Officer)

This certification is being furnished solely to accompany this Form 10-Q pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise, and is not to be deemed incorporated by reference into any filing of the Company except to the extent the Company specifically incorporates it by reference therein.

- 62 -

XML

Acquisitions (Details 1) (USD $) In Thousands, unless otherwise specified	Feb. 16, 2012	Feb. 16, 2012 Neuro Nexus Technologies Inc [Member]	Dec. 15, 2011 Micro Power Electronics Inc [Member]
Business Acquisition [Line Items]
Current assets		$ 618
Property, plant and equiptment		35
Amortizing intangible assets	2,927	2,927
Indefinite-lived intangible assets		540
Goodwill		8,875
Other assets		1,576
Total assets acquired		14,571	88,200
Current liabilities		420
Deferred income taxes		940
Total liabilities assumed		1,360	16,400
Net assets acquired		$ 13,211

XML

Defined Benefit Plans (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2012	Sep. 30, 2011	Sep. 28, 2012	Sep. 30, 2011
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Defined Benefit Plan, Service Cost	$ 272	$ 290	$ 835	$ 714
Defined Benefit Plan, Interest Cost	98	124	305	313
Defined Benefit Plan, Amortization of (Gains) Losses	30	21	92	16
Defined Benefit Plan, Expected Return on Plan Assets	(103)	(126)	(318)	(317)
Defined Benefit Plan, Net Periodic Benefit Cost	$ 297	$ 309	$ 914	$ 726

XML

Debt (Details) (USD $) In Thousands, unless otherwise specified	Sep. 28, 2012	Dec. 30, 2011
Debt Disclosure [Abstract]
Line of Credit Facility, Amount Outstanding	$ 41,000	$ 55,000
Convertible Subordinated Debt	197,782	197,782
Debt Instrument, Unamortized Discount	8,628	16,832
Long-term debt	$ 230,154	$ 235,950

XML

Fair Value Measurement (Details) (USD $) In Millions, unless otherwise specified	0 Months Ended	9 Months Ended
	Feb. 16, 2012	Sep. 28, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract]
Description of Reclassification of Foreign Currency Cash Flow Hedge Gain (Loss)		The fair value of the Company’s foreign currency contracts will be realized as Cost of Sales as the inventory, which the contracts are hedging the cash flows to produce, is sold
Foreign Currency Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months		$ 0.7
Contingent Consideration Discount Rate Minimum	12.00%
Contingent Consideration Discount Rate Maximum	20.00%

XML

Defined Benefit Plans (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 28, 2012
Defined Benefit Plan Settlements And Curtailments [Abstract]
DefinedBenefitPlanRecognizedNetGainLossDueToCurtailments	$ 0
Cash And Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
DefinedBenefitPlanWeightedAverageAssetAllocations	100.00%

XML

Intangible Assets (Details 3) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 28, 2012
Indefinite-lived Intangible Assets [Roll Forward]
Indefinite-lived intangible assets, beginning	$ 20,288
Indefinite-lived assets acquired	540
Indefinite-lived intangible assets, ending	20,828
Goodwill [Roll Forward]
Goodwill	338,653
Goodwill, Acquired During Period	9,288
Goodwill, Translation Adjustments	(138)
Goodwill	347,803
Implantable Medical [Member]
Goodwill [Roll Forward]
Goodwill	297,232
Goodwill, Acquired During Period	8,875
Goodwill, Translation Adjustments	(138)
Goodwill	305,969
Electrochem [Member]
Goodwill [Roll Forward]
Goodwill	41,421
Goodwill, Acquired During Period	413
Goodwill, Translation Adjustments	0
Goodwill	41,834
Trademarks And Tradenames [Member]
Indefinite-lived Intangible Assets [Roll Forward]
Indefinite-lived intangible assets, beginning	20,288
Indefinite-lived assets acquired	0
Indefinite-lived intangible assets, ending	20,288
In Process Research And Development [Member]
Indefinite-lived Intangible Assets [Roll Forward]
Indefinite-lived intangible assets, beginning	0
Indefinite-lived assets acquired	540
Indefinite-lived intangible assets, ending	$ 540

XML

Earnings Per Share (Tables)

9 Months Ended

Sep. 28, 2012

EARNINGS PER SHARE (EPS) [Abstract]

Schedule of Calculation of Numerator and Denominator in Earnings Per Share [Table Text Block]

The following table illustrates the calculation of Basic and Diluted EPS (in thousands, except per share amounts):
		Three Months Ended				Nine Months Ended
		September 28,		September 30,		September 28,		September 30,
		2012		2011		2012		2011
Numerator for basic and diluted EPS:
	Net income (loss)	$	(7,561)	$	6,989	$	757	$	27,483
Denominator for basic EPS:
	Weighted average shares outstanding		23,646		23,297		23,559		23,241
Effect of dilutive securities:
	Stock options, restricted stock and restricted stock units		-		314		365		422
Denominator for diluted EPS			23,646		23,611		23,924		23,663
Basic EPS		$	(0.32)	$	0.30	$	0.03	$	1.18
Diluted EPS		$	(0.32)	$	0.30	$	0.03	$	1.16

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

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		Nine Months Ended
		September 28,	September 30,	September 28,	September 30,
		2012	2011	2012	2011
Time-vested stock options, restricted
	stock and restricted stock units	2,223,000	976,000	1,237,000	925,000
Performance-vested stock options
	and restricted stock units	781,000	672,000	692,000	678,000

XML

Fair Value Measurement (Details 3) (USD $)	3 Months Ended		9 Months Ended
	Sep. 28, 2012	Sep. 30, 2011	Sep. 28, 2012	Sep. 30, 2011	Dec. 30, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign Currency Contract, Asset, Fair Value Disclosure	$ 883,000		$ 883,000
Foreign Currency Contract Liability Fair Value Disclosure	0		0
Accrued Contingent Consideration	1,610,000		1,610,000		0
Assets, Fair Value Disclosure [Abstract]
Long Lived Assets Impairment Loss	300,000	0	300,000	0
Cost-method Investments, Other than Temporary Impairment	0	0	0	300,000
Cost-method Investments, Realized Gains	(400,000)	0	(400,000)	(4,500,000)
Cost And Equity Method Investments Aggregate Carrying Amount	9,300,000		9,300,000		5,700,000
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign Currency Contract, Asset, Fair Value Disclosure	0		0
Foreign Currency Contract Liability Fair Value Disclosure	0		0
Accrued Contingent Consideration	0		0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign Currency Contract, Asset, Fair Value Disclosure	883,000		883,000
Foreign Currency Contract Liability Fair Value Disclosure	0		0
Accrued Contingent Consideration	0		0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign Currency Contract, Asset, Fair Value Disclosure	0		0
Foreign Currency Contract Liability Fair Value Disclosure	0		0
Accrued Contingent Consideration	$ 1,610,000		$ 1,610,000

XML

Stock-Based Compensation (Details 1) (USD $)	9 Months Ended
	Sep. 28, 2012	Sep. 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Weighted Average Grant Date Fair Value	$ 8.20	$ 9.42
Risk Free Interest Rate	0.83%	2.04%
Expected Volatility Rate	40.00%	40.00%
Expected Term (in years)	5 years	5 years
Expected Dividend Rate	0.00%	0.00%

XML

Business Segment, Geographic And Concentration Risk Information (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 28, 2012	Dec. 30, 2011
Segment Reporting, Asset Reconciling Item [Line Items]
Property, plant and equipment, net	$ 156,662	$ 145,806
United States [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Property, plant and equipment, net	124,451	113,693
Rest Of World [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Property, plant and equipment, net	$ 32,211	$ 32,113

XML

Fair Value Measurement (Details 1) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 28, 2012
Contingent Consideration Liability [Roll Forward]
Accrued Contingent Consideration, Beginning Balance	$ 0
Contingent Consideration Recognized In Period	1,500
Change in Amount of Contingent Consideration Liability	110
Contingent Payment Related To Business Combination	0
Accrued Contingent Consideration, Ending Balance	$ 1,610

XML

Supplemental Cash Flow Information (Tables)

9 Months Ended

Sep. 28, 2012

Supplemental Cash Flow Information [Abstract]

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

			Nine Months Ended
				September 28,		September 30,
(in thousands)				2012		2011
Noncash investing and financing activities:
	Common stock contributed to 401(k) Plan		$	4,793	$	0
	Property, plant and equipment purchases included
		in accounts payable		4,611		1,575
Cash paid during the period for:
	Interest		$	3,250	$	3,700
	Income taxes			2,923		5,207
Acquisition of noncash assets			$	14,396	$	-
Liabilities assumed				1,244		0

XML

Debt (Details 2) (USD $)	9 Months Ended
	Sep. 28, 2012	Dec. 30, 2011
Debt Instruments [Abstract]
Debt Instrument, Issuance Date	Mar. 01, 2007
Convertible Subordinated Debt	$ 197,782,000	$ 197,782,000
Debt Discount Percentage at Issuance	5.00%
Debt Instrument, Interest Rate, Stated Percentage	2.25%
Debt Instrument, Frequency of Periodic Payment	semi-annually
Debt Instrument, Maturity Date	Jun. 15, 2013
Debt Instrument, Convertible, Conversion Price	$ 34.70
Debt Instrument, Convertible, Conversion Ratio	28.8219
Debt Instrument, Face Amount	1,000
Convertible Subordinated Notes Fair Value	197,000,000
Debt Instrument, Interest Rate During Period	8.50%
Debt Instrument, Convertible, Carrying Amount of Equity Component	7,300,000
Closing Stock Price	$ 24.33
Events When Debt Can Be Converted	CSN are convertible at the option of the holders at such time as: (i) the closing price of the Company’s common stock exceeds 150% of the conversion price of the notes for 20 out of 30 consecutive trading days; (ii) the trading price per $1,000 of principal is less than 98% of the product of the closing sale price of common stock for each day during any five consecutive trading day period and the conversion rate per $1,000 of principal; (iii) CSN have been called for redemption; (iv) the Company distributes to all holders of common stock rights or warrants entitling them to purchase additional shares of common stock at less than the average closing price of common stock for the ten trading days immediately preceding the announcement of the distribution; (v) the Company distributes to all holders of common stock any form of dividend which has a per share value exceeding 5% of the price of the common stock on the day prior to such date of distribution; (vi) the Company effects a consolidation, merger, share exchange or sale of assets pursuant to which its common stock is converted to cash or other property; (vii) the occurrence of the period beginning 60 days prior to but excluding June 15, 2013; and (viii) certain fundamental changes, as defined in the indenture governing the notes, occur or are approved by the Board of Directors.
Premium Make Whole Amount	6.3
Debt Instrument, Call Date, Earliest	Jun. 20, 2012
Derivative [Line Items]
DerivativeFixedInterestRate	0.573%
Interest Rate Swap [Member]
Derivative [Line Items]
Start Date	Feb. 01, 2013
DerivativeRemainingMaturity1	3 years
NotionalAmountOfInterestRateCashFlowHedgeDerivatives	150,000,000
Annual Notional Amortizing Amount	$ 50,000,000
DescriptionOfInterestRateRiskExposure	This swap was entered into in order to hedge against potential changes in cash flows on the anticipated outstanding debt on the Credit Facility from the repayment of CSN, which is also expected to be in February 2013 and indexed to the one-month LIBOR rate.
DescriptionOfInterestRateCashFlowHedgeAccountingMethod	This swap will be accounted for as a cash flow hedge.

XML

Supplemental Cash Flow Information (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 28, 2012	Sep. 30, 2011
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract]
Stock Issued During Period, Value, Employee Benefit Plan	$ 4,793	$ 0
Property, plant and equipment purchases included in accounts payable	4,611	1,575
Interest Paid	3,250	3,700
Income Taxes Paid	2,923	5,207
Acquisition of noncash assts	14,396	0
Liabilities Assumed	$ 1,244	$ 0

XML

Business Segment, Geographic And Concentration Risk Information (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2012	Sep. 30, 2011	Sep. 28, 2012	Sep. 30, 2011
Segment Reporting Information [Line Items]
Total segment income from operations	$ 8,094	$ 15,661	$ 40,272	$ 61,567
Unallocated Operating Expenses	(5,967)	(2,773)	(15,856)	(12,410)
Operating income as reported	2,127	12,888	24,416	49,157
Unallocated Other Expense	(4,299)	(3,649)	(13,599)	(9,327)
Income before provision for income taxes	(2,172)	9,239	10,817	39,830
Implantable Medical [Member]
Segment Reporting Information [Line Items]
Total segment income from operations	2,744	12,030	24,252	48,677
Electrochem [Member]
Segment Reporting Information [Line Items]
Total segment income from operations	$ 5,350	$ 3,631	$ 16,020	$ 12,890

XML

Basis of Presentation (Details)	3 Months Ended		9 Months Ended
	Sep. 28, 2012	Sep. 30, 2011	Sep. 28, 2012	Sep. 30, 2011
Basis of Presentation [Abstract]
Weeks In Reporting Period	13	13	39	39

XML

Debt (Details 4) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 28, 2012
Deferred Finance Costs [Roll Forward]
Deferred Finance Costs, Net, Beginning Balance	$ 3,149
Financing Costs Deferred	0
Financing Costs Written Off	0
Amortization Of Financing Costs	(802)
Deferred Finance Costs, Net, Ending Balance	$ 2,347

XML

Commitments and Contingencies (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2012	Sep. 30, 2011	Sep. 28, 2012	Sep. 30, 2011
Foreign Currency Cash Flow Hedges [Abstract]
Increase (reduction) in Cost of Sales	$ 11	$ (213)	$ (8)	$ (529)
Ineffective portion of change in fair value	0	0	0	0
Fx Contract 1 [Member]
Derivative [Line Items]
Derivative, Type of Instrument			FX Contract
Derivative, Hedge Designation			Cash flow
Notional Amount of Foreign Currency Cash Flow Hedge Derivatives	1,500		1,500
Start Date			Jan. 01, 2012
End Date			Dec. 31, 2012
$/Peso	0.0767		0.0767
Fair Value	11		11
Balance Sheet Location			Current Assets
Fx Contract 2 [Member]
Derivative [Line Items]
Derivative, Type of Instrument			FX Contract
Derivative, Hedge Designation			Cash flow
Notional Amount of Foreign Currency Cash Flow Hedge Derivatives	1,050		1,050
Start Date			Jan. 01, 2012
End Date			Dec. 31, 2012
$/Peso	0.0713		0.0713
Fair Value	89		89
Balance Sheet Location			Current Assets
Fx Contract 3 [Member]
Derivative [Line Items]
Derivative, Type of Instrument			FX Contract
Derivative, Hedge Designation			Cash flow
Notional Amount of Foreign Currency Cash Flow Hedge Derivatives	6,000		6,000
Start Date			Jan. 01, 2013
End Date			Dec. 31, 2013
$/Peso	0.0727		0.0727
Fair Value	235		235
Balance Sheet Location			Current Assets/ Other Assets
Fx Contract 4 [Member]
Derivative [Line Items]
Derivative, Type of Instrument			FX Contract
Derivative, Hedge Designation			Cash flow
Notional Amount of Foreign Currency Cash Flow Hedge Derivatives	6,000		6,000
Start Date			Jan. 01, 2013
End Date			Dec. 31, 2013
$/Peso	0.0693		0.0693
Fair Value	$ 548		$ 548
Balance Sheet Location			Current Assets/ Other Assets

XML

Other Operating Expense Net (Narrative) (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 28, 2012
Orthopaedic Facility Optimization [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Activities, Description	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, which was completed in the second quarter of 2012. In the third quarter of 2012, the Company completed the transfer of the manufacturing operations being performed at its Columbia City, IN orthopaedic facility into this new facility. In the third quarter of 2012, the Company finalized plans to transfer most major functions currently performed at its facilities in Orvin and Corgemont, Switzerland into existing facilities in Fort Wayne, IN and Tijuana, Mexico by mid-2013.
Restructuring Initiation Date	2010
Restructuring And Related Activities Capital Expenditures Incurred To Date	$ 21.0
Restructuring and Related Cost, Cost Incurred to Date	15.4
Orthopaedic Facility Optimization [Member] | Minimum [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring And Related Activities Expected Capital Expenditures	25.0
Restructuring and Related Cost, Expected Cost	30.0
Orthopaedic Facility Optimization [Member] | Minimum [Member] | Severance And Retention [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	11.0
Orthopaedic Facility Optimization [Member] | Minimum [Member] | Accelerated Depreciation And Asset Write Offs [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	10.0
Orthopaedic Facility Optimization [Member] | Minimum [Member] | Other Restructuring [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	9.0
Orthopaedic Facility Optimization [Member] | Maximum [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring And Related Activities Expected Capital Expenditures	35.0
Restructuring and Related Cost, Expected Cost	36.0
Orthopaedic Facility Optimization [Member] | Maximum [Member] | Severance And Retention [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	13.0
Orthopaedic Facility Optimization [Member] | Maximum [Member] | Accelerated Depreciation And Asset Write Offs [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	12.0
Orthopaedic Facility Optimization [Member] | Maximum [Member] | Other Restructuring [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	11.0
Medical Device Facility Optimization [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Activities, Description	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 will include 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 two to three years.
Restructuring Initiation Date	2011
Restructuring And Related Activities Capital Expenditures Incurred To Date	8.5
Restructuring and Related Cost, Cost Incurred to Date	1.3
Medical Device Facility Optimization [Member] | Other Restructuring [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	1.0
Medical Device Facility Optimization [Member] | Minimum [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring And Related Activities Expected Capital Expenditures	15.0
Restructuring and Related Cost, Expected Cost	2.5
Medical Device Facility Optimization [Member] | Minimum [Member] | Production Inefficiencies, Moving And Revalidation [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	0.5
Medical Device Facility Optimization [Member] | Minimum [Member] | Personnel [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	1.0
Medical Device Facility Optimization [Member] | Maximum [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring And Related Activities Expected Capital Expenditures	20.0
Restructuring and Related Cost, Expected Cost	3.5
Medical Device Facility Optimization [Member] | Maximum [Member] | Production Inefficiencies, Moving And Revalidation [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	1.0
Medical Device Facility Optimization [Member] | Maximum [Member] | Personnel [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	1.5
ERP System Upgrade [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Activities, Description	In 2011, the Company initiated plans to upgrade its existing global ERP system. This initiative is expected to be completed over the next two years.
Restructuring Initiation Date	2011
Restructuring And Related Activities Capital Expenditures Incurred To Date	2.8
Restructuring and Related Cost, Cost Incurred to Date	4.7
ERP System Upgrade [Member] | Minimum [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring And Related Activities Expected Capital Expenditures	4.0
Restructuring and Related Cost, Expected Cost	5.0
ERP System Upgrade [Member] | Minimum [Member] | Training And Consulting Costs [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	3.0
ERP System Upgrade [Member] | Minimum [Member] | Accelerated Depreciation And Asset Write Offs [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	2.0
ERP System Upgrade [Member] | Maximum [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring And Related Activities Expected Capital Expenditures	5.0
Restructuring and Related Cost, Expected Cost	7.0
ERP System Upgrade [Member] | Maximum [Member] | Training And Consulting Costs [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	4.5
ERP System Upgrade [Member] | Maximum [Member] | Accelerated Depreciation And Asset Write Offs [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost	2.5
Corporate Headquarters Relocation [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Initiation Date	second quarter of 2012
Restructuring and Related Cost, Cost Incurred to Date	$ 1.2

XML

Intangible Assets (Narrative) (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 28, 2012
Assets Held For Sale Long Lived [Abstract]
LongLivedAssetsHeldForSaleDescription	Electrochem’s wireless sensing technology and patents to held-for-sale
AssetsHeldForSaleLongLived	$ 0.7

XML

Supplemental Cash Flow Information

9 Months Ended

Sep. 28, 2012

Supplemental Cash Flow Information [Abstract]

SUPPLEMENTAL CASH FLOW INFORMATION

3. SUPPLEMENTAL CASH FLOW INFORMATION

			Nine Months Ended
				September 28,		September 30,
(in thousands)				2012		2011
Noncash investing and financing activities:
	Common stock contributed to 401(k) Plan		$	4,793	$	0
	Property, plant and equipment purchases included
		in accounts payable		4,611		1,575
Cash paid during the period for:
	Interest		$	3,250	$	3,700
	Income taxes			2,923		5,207
Acquisition of noncash assets			$	14,396	$	-
Liabilities assumed				1,244		0

XML

Other Operating Expense Net Changes in Accrued Liabilities (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 28, 2012
Orthopaedic Facility Optimization [Member]
Restructuring Reserve [Roll Forward]
Restructuring Reserve, Beginning Balance	$ 0
Restructuring charges	14,774
Write-offs	(5,246)
Cash payments	(5,086)
Restructuring Reserve, Ending Balance	4,442
Medical Device Facility Optimization [Member]
Restructuring Reserve [Roll Forward]
Restructuring Reserve, Beginning Balance	0
Restructuring charges	1,282
Write-offs	0
Cash payments	(1,282)
Restructuring Reserve, Ending Balance	0
ERP System Upgrade [Member]
Restructuring Reserve [Roll Forward]
Restructuring Reserve, Beginning Balance	0
Restructuring charges	4,745
Write-offs	(2,166)
Cash payments	(1,853)
Restructuring Reserve, Ending Balance	726
Severance And Retention [Member] | Orthopaedic Facility Optimization [Member]
Restructuring Reserve [Roll Forward]
Restructuring Reserve, Beginning Balance	0
Restructuring charges	4,525
Write-offs	0
Cash payments	(83)
Restructuring Reserve, Ending Balance	4,442
Production Inefficiencies, Moving And Revalidation [Member] | Medical Device Facility Optimization [Member]
Restructuring Reserve [Roll Forward]
Restructuring Reserve, Beginning Balance	0
Restructuring charges	549
Write-offs	0
Cash payments	(549)
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	2,579
Write-offs	0
Cash payments	(1,853)
Restructuring Reserve, Ending Balance	726
Accelerated Depreciation And Asset Write Offs [Member] | Orthopaedic Facility Optimization [Member]
Restructuring Reserve [Roll Forward]
Restructuring Reserve, Beginning Balance	0
Restructuring charges	5,246
Write-offs	(5,246)
Cash payments	0
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	2,166
Write-offs	(2,166)
Cash payments	0
Restructuring Reserve, Ending Balance	0
Personnel [Member] | Medical Device Facility Optimization [Member]
Restructuring Reserve [Roll Forward]
Restructuring Reserve, Beginning Balance	0
Restructuring charges	531
Write-offs	0
Cash payments	(531)
Restructuring Reserve, Ending Balance	0
Other Restructuring [Member] | Orthopaedic Facility Optimization [Member]
Restructuring Reserve [Roll Forward]
Restructuring Reserve, Beginning Balance	0
Restructuring charges	5,003
Write-offs	0
Cash payments	(5,003)
Restructuring Reserve, Ending Balance	0
Other Restructuring [Member] | Medical Device Facility Optimization [Member]
Restructuring Reserve [Roll Forward]
Restructuring Reserve, Beginning Balance	0
Restructuring charges	202
Write-offs	0
Cash payments	(202)
Restructuring Reserve, Ending Balance	$ 0

XML

Inventories (Details) (USD $) In Thousands, unless otherwise specified	Sep. 28, 2012	Dec. 30, 2011
Inventory Disclosure [Abstract]
Inventory Raw Materials	$ 56,364	$ 49,773
Inventory, Work in Process	36,902	36,603
Inventory, Finished Goods	17,897	23,537
Inventories	$ 111,163	$ 109,913

XML

Defined Benefit Plans (Tables)

9 Months Ended

Sep. 28, 2012

Defined Benefit Pension Plans And Defined Benefit Postretirement Plans Disclosure [Abstract]

Schedule of Defined Benefit Plans Disclosures [Table Text Block]

The change in net defined benefit plan liability is as follows (in thousands):
At	December 30, 2011	$	5,569
Net defined benefit cost			914
Benefit payments			(786)
Foreign currency translation			(18)
At	September 28, 2012	$	5,679

Schedule of Net Benefit Costs [Table Text Block]

Net defined benefit cost is comprised of the following (in thousands):
	Three Months Ended				Nine Months Ended
	September 28,		September 30,		September 28,		September 30,
	2012		2011		2012		2011
Service cost	$	272	$	290	$	835	$	714
Interest cost		98		124		305		313
Amortization of net loss		30		21		92		16
Expected return on plan assets		(103)		(126)		(318)		(317)
Net defined benefit cost	$	297	$	309	$	914	$	726

XML

Debt (Tables)

9 Months Ended

Sep. 28, 2012

Debt Disclosure [Abstract]

Schedule of Debt [Table Text Block]

Long-term debt is comprised of the following (in thousands):
		As of
			September 28,		December 30,
			2012		2011
Revolving line of credit		$	41,000	$	55,000
2.25% convertible subordinated notes, due 2013			197,782		197,782
Unamortized discount			(8,628)		(16,832)
	Total long-term debt	$	230,154	$	235,950

Schedule of Interest [Table Text Block]

The contractual interest and discount amortization for CSN were as follows (in thousands):
	Three Months Ended				Nine Months Ended
	September 28,		September 30,		September 28,		September 30,
	2012		2011		2012		2011
Contractual interest	$	1,113	$	1,113	$	3,338	$	3,338
Discount amortization		2,781		2,602		8,205		7,676

Schedule of Deferred Financing Costs [Table Text Block]

At	December 30, 2011	$	3,149
Amortization during the period			(802)
At	September 28, 2012	$	2,347

XML

Stock-Based Compensation (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2012	Sep. 30, 2011	Sep. 28, 2012	Sep. 30, 2011
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	$ 3,474	$ 3,008	$ 9,007	$ 8,803
Employee Stock Option Member
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	671	629	2,038	1,792
Restricted Stock And Unit Awards [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	1,523	1,186	4,559	3,270
Retirement Plan [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	1,280	1,193	2,410	3,741
Cost of Sales [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	1,119	1,013	2,486	3,094
Selling General And Administrative Expense [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	2,006	1,675	5,732	4,787
Research and Development Expense [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	$ 349	$ 320	$ 789	$ 922

XML

Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	Sep. 28, 2012	Dec. 30, 2011
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	$ 169,553	$ 168,886
Finite-Lived Intangible Assets, Accumulated Amortization	(81,877)	(72,082)
Foreign Currency Translation	3,389	3,454
Amortizing intangible assets, net	91,065	100,258
Purchased Technology And Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	96,862	97,324
Finite-Lived Intangible Assets, Accumulated Amortization	(59,253)	(54,054)
Foreign Currency Translation	815	842
Amortizing intangible assets, net	38,424	44,112
Customer Lists [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	68,257	66,388
Finite-Lived Intangible Assets, Accumulated Amortization	(18,455)	(14,009)
Foreign Currency Translation	1,879	1,807
Amortizing intangible assets, net	51,681	54,186
Other Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	4,434	5,174
Finite-Lived Intangible Assets, Accumulated Amortization	(4,169)	(4,019)
Foreign Currency Translation	695	805
Amortizing intangible assets, net	$ 960	$ 1,960

XML

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 28, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

The components and classification of stock-based compensation expense were as follows (in thousands):
	Three Months Ended				Nine Months Ended
	September 28,		September 30,		September 28,		September 30,
		2012		2011		2012		2011
Stock options	$	671	$	629	$	2,038	$	1,792
Restricted stock and units		1,523		1,186		4,559		3,270
401(k) stock contribution		1,280		1,193		2,410		3,741
Total stock-based compensation expense	$	3,474	$	3,008	$	9,007	$	8,803
Cost of sales	$	1,119	$	1,013	$	2,486	$	3,094
Selling, general and administrative		2,006		1,675		5,732		4,787
Research, development and engineering		349		320		789		922
Total stock-based compensation expense	$	3,474	$	3,008	$	9,007	$	8,803

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

The weighted average fair value and assumptions used to value options granted are as follows:
	Nine Months Ended
		September 28,		September 30,
		2012		2011
Weighted average fair value	$	8.20	$	9.42
Risk-free interest rate		0.83%		2.04%
Expected volatility		40%		40%
Expected life (in years)		5		5
Expected dividend yield		0%		0%

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

The following table summarizes time-vested stock option activity:
			Number of Time-Vested Stock Options		Weighted Average Exercise Price	Weighted Average Remaining Contractual Life (In Years)		Aggregate Intrinsic Value (In Millions)
Outstanding at		December 30, 2011	1,558,771	$	23.42
	Granted		383,292		22.20
	Exercised		(44,993)		20.86
	Forfeited or expired		(106,092)		24.05
Outstanding at		September 28, 2012	1,790,978	$	23.19	6.2	$	3.6
Exercisable at		September 28, 2012	1,239,536	$	23.38	5.1	$	2.7

The following table summarizes performance-vested stock option activity:
			Number of Performance-Vested Stock Options		Weighted Average Exercise Price	Weighted Average Remaining Contractual Life (In Years)		Aggregate Intrinsic Value (In Millions)
Outstanding at		December 30, 2011	478,364	$	24.44
	Exercised		(5,353)		22.11
	Forfeited or expired		(177,733)		26.49
Outstanding at		September 28, 2012	295,278	$	23.25	4.6	$	0.4
Exercisable at		September 28, 2012	295,278	$	23.25	4.6	$	0.4

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block]

The following table summarizes time-vested restricted stock and unit activity:
			Time-Vested Activity		Weighted Average Fair Value
Nonvested at		December 30, 2011	69,942	$	22.69
	Granted		87,803		23.48
	Vested		(24,228)		21.91
	Forfeited		(5,586)		22.30
Nonvested at		September 28, 2012	127,931	$	23.40

The following table summarizes performance-vested restricted stock and unit activity:
			Performance-Vested Activity		Weighted Average Fair Value
Nonvested at		December 30, 2011	529,743	$	16.68
	Granted		332,918		15.30
	Vested		(7,500)		24.62
	Forfeited		(64,715)		15.72
Nonvested at		September 28, 2012	790,446	$	16.11

XML

Other Operating (Income) Expense (Tables)

9 Months Ended

Sep. 28, 2012

Other Operating (Income) Expense, Net [Abstract]

Schedule Of Other Operating Cost And Expense By Component [Table Text Block]

Other Operating (Income) Expense, Net is comprised of the following (in thousands):
	Three Months Ended				Nine Months Ended
	September 28,		September 30,		September 28,		September 30,
		2012		2011		2012		2011
Orthopaedic facility optimization(a)	$	12,452	$	164	$	14,774	$	425
Medical device facility optimization(b)		388		0		1,282		0
ERP system upgrade(c)		1,938		0		4,745		0
Integration costs(d)		232		0		1,287		0
Asset dispositions, severance and other(e)		303		23		1,893		(591)
	$	15,313	$	187	$	23,981	$	(166)

Schedule of Restructuring Reserve by Type of Cost [Table Text Block]

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	December 30, 2011	$	0	$	0	$	0	$	0
Restructuring charges			4,525		5,246		5,003		14,774
Write-offs			0		(5,246)		0		(5,246)
Cash payments			(83)		0		(5,003)		(5,086)
At	September 28, 2012	$	4,442	$	0	$	0	$	4,442

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	December 30, 2011	$	0	$	0	$	0	$	0
Restructuring charges			549		531		202		1,282
Cash payments			(549)		(531)		(202)		(1,282)
At	September 28, 2012	$	0	$	0	$	0	$	0

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	December 30, 2011	$	0	$	0	$	0
Charges			2,579		2,166		4,745
Write-offs			0		(2,166)		(2,166)
Cash payments			(1,853)		0		(1,853)
At	September 28, 2012	$	726	$	0	$	726

XML

Acquisitions

9 Months Ended

Sep. 28, 2012

Business Combinations [Abstract]

ACQUISITIONS

2. ACQUISITIONS

NeuroNexus Technologies, Inc.

On February 16, 2012, the Company purchased all of the outstanding common stock of NeuroNexus Technologies, Inc. (“NeuroNexus”) headquartered in Ann Arbor, MI. NeuroNexus is an active implantable medical device design firm specializing in developing and commercializing neural interface technology, components and systems for neuroscience and clinical markets. NeuroNexus has an extensive intellectual property portfolio, core technologies and capabilities to support the development and manufacturing of neural interface devices across a wide range of applications including neuromodulation, sensing, optical stimulation and targeted drug delivery.

This transaction was accounted for under the acquisition method of accounting. Accordingly, the operating results of NeuroNexus have been included in the Company'sImplantable Medical segment from the date of acquisition. For the nine months ended September 28,2012, NeuroNexus added approximately $1.7 million to the Company's revenue and decreased the Company's net income by $0.1 million. The purchase price of NeuroNexus consisted ofcash payments of $11.7 millionand potential future payments of up to an additional $2 million. These future payments are contingent upon the achievement of certain financial and development-based milestones and had an estimated fair value of $1.5 million as of the acquisition date.

The cost of the acquisition was preliminarily allocated to the assets acquired and liabilities assumed from NeuroNexus based on their fair values as of the close of the acquisition, with the amount exceeding the fair value of the net assets acquired being recorded as goodwill. The value assigned to certain assets and liabilities are preliminary and are subject to adjustment as additional information is obtained, including, but not limited to, the finalization of pre-acquisition tax positions. The valuation is expected to be finalized in 2012. When the valuation is finalized, any changes to the preliminary valuation of assets acquired or liabilities assumed may result in material adjustments to the fair value of the intangible assets acquired, as well as goodwill. The following table summarizes the preliminary allocation of the NeuroNexus purchase price to the assets acquired and liabilities assumed as of the acquisition date (in thousands):

Assets acquired
	Current assets	$	618
	Property, plant and equipment		35
	Amortizing intangible assets		2,927
	Indefinite-lived intangible assets		540
	Goodwill		8,875
	Other assets		1,576
Total assets acquired			14,571
Liabilities assumed
	Current liabilities		420
	Deferred income taxes		940
Total liabilities assumed			1,360
Purchase price		$	13,211

The preliminary fair values of the assets acquired were determined using one of three valuation approaches: market, income and cost. The selection of a particular method for a given asset depended on the reliability of available data and the nature of the asset, among other considerations.

The market approach estimates the value for a subject asset based on available market pricing for comparable assets. The income approach estimates the value for a subject asset based on the present value of cash flows projected to be generated by the asset. The projected cash flows were discounted at a required rate of return that reflects the relative risk of the asset and the time value of money. The projected cash flows for each asset considered multiple factors from the perspective of a marketplace participant including revenue projections from existing customers, attrition trends, product life-cycle assumptions, marginal tax rates and expected profit margins giving consideration to historical and expected margins. The cost approach estimates the value for a subject asset based on the cost to replace the asset and reflects the estimated reproduction or replacement cost for the asset, less an allowance for loss in value due to depreciation or obsolescence, with specific consideration given to economic obsolescence if indicated. These fair value measurement approaches are based on significant unobservable inputs, including management estimates and assumptions.

Current assets and liabilities - The fair value of current assets and liabilities was assumed to approximate their carrying value as of the acquisition date due to the short-term nature of these assets and liabilities.

Intangible assets - The purchase price was allocated to intangible assets as follows (dollars in thousands):

			Weighted	Weighted	Weighted
	Fair		Average	Average	Average
	Value		Amortization	Useful	Discount
	Assigned		Period (Years)	Life (Years)	Rate
Amortizing Intangible Assets
Technology and patents	$	1,058	6	10	14%
Customer lists		1,869	7	15	13%
	$	2,927	7	13	13%

			Weighted	Weighted	Weighted
	Fair		Average	Average	Average
	Value		Amortization	Useful	Discount
	Assigned		Period (Years)	Life (Years)	Rate
Indefinite-Lived Intangible Assets
In-process research and development	$	540	N/A	12	26%

The weighted average amortization period is less than the estimated useful lifedue to the Company using an accelerated amortization method, which approximates the projected cash flows used to determine the fair value of those intangible assets.

Technology and patents - Technology and patents consists of technical processes, patented and unpatented technology, manufacturing know-how, trade secrets and the understanding with respect to products or processes that have been developed by NeuroNexusand that will be leveraged in current and future products. The fair value of technology and patents acquired was determined utilizing the relief from royalty method, a form of the income approach, with royalty rates that ranged from 2% to 6%. The estimated useful life of the technology and patents is based upon management's estimate of the product life cycle associated with technology and patents before they will be replaced by new technologies.

Customer lists – Customer lists represent the estimated fair value of non-contractual customer relationships NeuroNexushas as of the acquisition date. The primary customers of NeuroNexus include numerous scientists and researchers from various geographic locations around the world. These relationships were valued separately from goodwill at the amount which an independent third party would be willing to pay for these relationships. The fair value of customer lists was determined using the multi-period excess-earnings method, a form of the income approach. The estimated useful life of the existing customer was based upon historical customer attrition as well as management's understanding of the industry and product life cycles.

In-process research and development (“IPR&D”) – IPR&D represents research projects which are expected to generate cash flows but have not yet reached technological feasibility. The primary basis for determining the technological feasibility of these projects is whether or not regulatory approval has been obtained. The Company classifies IPR&D acquired in a business combination as an indefinite-lived intangible asset until the completion or abandonment of the associated projects. Upon completion, the Company would determine the useful life of the IPR&D and begin amortizing the assets to reflect their use over their remaining lives. Upon permanent abandonment, the remaining carrying amount of the associated IPR&D would be written-off. The Company will test the IPR&D acquired for impairment at least annually, and more frequently if events or changes in circumstances indicate that the assets may be impaired. The impairment test consists of a comparison of the fair value of the intangible assets with their carrying amount. If the carrying amount exceeds its fair value, the Company would record an impairment loss in an amount equal to the excess.The Company used the income approach to determine the fair value of the IPR&D acquired. In arriving at the value of the IPR&D, management considered, among other factors: the projects' stage of completion; the complexity of the work to be completed as of the acquisition date; the projected costs to complete the projects; the contribution of other acquired assets; and the estimated useful life of the technology. The Company applied a market-participant risk-adjusted discount rate to arrive at a present value as of the date of acquisition.

The value assigned to IPR&D related to the development of micro-electrodes for deep brain mapping and electrocorticography, and is expected to be commercialized by 2014. For purposes of valuing the IPR&D, the Company estimated total costs to complete the projects to be approximately $1.5 million. If the projects are not successful or completed in a timely manner, the Company may not realize the financial benefits expected for these projects.

Goodwill - The excess of the purchase price over the fair value of net tangible and intangible assets acquired and liabilities assumed was allocated to goodwill. Various factors contributed to the establishment of goodwill, including: the value of NeuroNexus's highly trained assembled work force and management team; the incremental value that NeuroNexus's technology will bring to the Company's neuromodulation platform currently in development; and the expected revenue growth over time that is attributable to increased market penetration from future products and customers. The goodwill acquired in connection with the NeuroNexus acquisition was allocated to the Implantable Medical business segment and is not deductible for tax purposes.

Micro Power Electronics, Inc.

On December 15, 2011, the Company purchased all of the outstanding common and preferred stock of Micro Power Electronics, Inc. (“Micro Power”) headquartered in Beaverton, OR. Micro Power is a leading supplier of custom battery solutions, serving the portable medical, military and handheld automatic identification and data collection markets. The aggregate purchase price of Micro Power was $71.8 million, which was paid in cash. Total assets acquired from Micro Power were $88.2 million. Total liabilities assumed from Micro Power were $16.4 million.

This transaction was accounted for under the acquisition method of accounting. Accordingly, the operating results of Micro Power have been included in the Company'sElectrochemSolutions(“Electrochem”) segmentfrom the date of acquisition and the cost of the acquisition was preliminarily allocated to the assets acquired and liabilities assumed from Micro Power based on their fair values as of the close of the acquisition, with the amount exceeding the fair value of net assets acquired being recorded as goodwill. The value assigned to certain assets and liabilities are preliminary and are subject to adjustment as additional information is obtained, including, but not limited to, the finalization of pre-acquisition tax positions. The valuation will be finalized in 2012.During 2012, the Company has made adjustments to the Micro Power opening balance sheet valuation based upon the receipt of information that was needed in order to complete the valuation of certain assets and liabilities. As a result, the Company reduced the fair value recorded for the Micro Power amortizing intangible assetsacquired by $0.4 million and increased the amount of goodwill recorded by $0.4 million. The impact of these adjustments, individually and in the aggregate, was not considered material and therefore has not been reflected as a retrospective adjustment of the historical financial statements.

Pro Forma Results (Unaudited)

The following unaudited pro forma information presents the consolidated results of operations of the Company, NeuroNexus and Micro Power as if those acquisitions occurred as of the beginning of fiscal years 2011 (NeuroNexus) and 2010 (Micro Power) (in thousands, except per share amounts):

		Three Months Ended				Nine Months Ended
		September 28,		September 30,		September 28,		September 30,
		2012		2011		2012		2011
Sales		$	161,340	$	149,991	$	487,431	$	478,159
Net income (loss)			(7,561)		7,227		583		26,719
Earnings per share:
	Basic	$	(0.32)	$	0.31	$	0.02	$	1.15
	Diluted	$	(0.32)	$	0.31	$	0.02	$	1.13

The unaudited pro forma information presents the combined operating results of Greatbatch, NeuroNexus and Micro Power, with the results prior to the acquisition date adjusted to include the pro forma impact of the amortization of acquired intangible assets based on the purchase price allocations, the adjustment to interest expense reflecting the amount borrowed in connection with the acquisitions at Greatbatch's interest rate, and the impact of income taxes on the pro forma adjustments utilizing the applicable statutory tax rate. The unaudited pro forma consolidated basic and diluted earnings per share calculations are based on the consolidated basic and diluted weighted average shares of Greatbatch.

The unaudited pro forma results are presented for illustrative purposes only and do not reflect the realization of potential cost savings, and any related integration costs. Certain cost savings may result from the acquisition; however, there can be no assurance that these cost savings will be achieved. These pro forma results do not purport to be indicative of the results that would have been obtained, or to be a projection of results that may be obtained in the future.

XML

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 28, 2012

Commitments and Contingencies Disclosure [Abstract]

Schedule of Product Warranty Liability [Table Text Block]

At	December 30, 2011	$	2,013
Additions to warranty reserve			483
Warranty claims paid			(993)
Foreign currency effect			3
At	September 28, 2012	$	1,506

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

Remainder of	2012	$	1,072
2013			4,156
2014			4,155
2015			3,566
2016			3,092
Thereafter			3,133
Total estimated operating lease expense		$	19,174

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block]

	Three Months Ended				Nine Months Ended
	September 28,		September 30,		September 28,		September 30,
	2012		2011		2012		2011
Increase (reduction) in Cost of Sales	$	11	$	(213)	$	(8)	$	(529)
Ineffective portion of change in fair value		0		0		0		0

Schedule of Foreign Exchange Contracts, Statement of Financial Position [Table Text Block]

Instrument	Type of Hedge		Aggregate Notional Amount	Start Date	End Date	$/Peso		Fair Value	Balance Sheet Location
FX Contract	Cash flow	$	1,500	Jan-12	Dec-12	0.0767	$	11	Current Assets
FX Contract	Cash flow		1,050	Jan-12	Dec-12	0.0713		89	Current Assets
FX Contract	Cash flow		6,000	Jan-13	Dec-13	0.0727		235	Current Assets/ Other Assets
FX Contract	Cash flow		6,000	Jan-13	Dec-13	0.0693		548	Current Assets/ Other Assets

XML

Acquisitions (Details 2) (USD $)	0 Months Ended
	Feb. 16, 2012
Acquired Finite-Lived Intangible Assets [Line Items]
Amortizing intangible assets	$ 2,927,000
Weighted Average Amortization Period (Years)	7 years
Weighted Average Useful Life (Years)	13 years
Weighted Average Discount Rate	13.00%
In Process Research And Development [Member]
Acquired Indefinite-lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	540,000
Weighted Average Useful Life (Years)	12 years
Weighted Average Discount Rate	26.00%
Estimated Total Cost To Complete In Process Research And Development Programs Acquired	1,500,000
Estimated Year Of Completion Of In Process Research And Development Programs Acquired	2014
Patented Technology [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Amortizing intangible assets	1,058,000
Weighted Average Amortization Period (Years)	6 years
Weighted Average Useful Life (Years)	10 years
Weighted Average Discount Rate	14.00%
Minimum royalty rate assumed in valuation	2.00%
Maximum rate assumed in valuation	6.00%
Customer Lists [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Amortizing intangible assets	$ 1,869,000
Weighted Average Amortization Period (Years)	7 years
Weighted Average Useful Life (Years)	15 years
Weighted Average Discount Rate	13.00%

XML

Defined Benefit Plans (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2012	Sep. 30, 2011	Sep. 28, 2012	Sep. 30, 2011
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Defined Benefit Plan, Benefit Obligation Beginning			$ 5,569
Defined Benefit Plan, Net Periodic Benefit Cost	297	309	914	726
Defined Benefit Plan, Benefits Paid			(786)
Defined Benefit Plan, Foreign Currency Exchange Rate Changes, Benefit Obligation			(18)
Defined Benefit Plan, Benefit Obligation Ending	$ 5,679		$ 5,679

XML

Fair Value Measurement (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 28, 2012
Financial Milestones [Member]
Fair Value Assumptions [Line Items]
Contingent Consideration Fair Value	$ 855
Risk Adjusted Discount Rate For Contingent Consideration	12.00%
Contingent Consideration Liability Projected Year Of Payment	2014
Development Milestones [Member]
Fair Value Assumptions [Line Items]
Contingent Consideration Fair Value	$ 755
Risk Adjusted Discount Rate For Contingent Consideration	20.00%
Contingent Consideration Liability Projected Year Of Payment	2014

XML

Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Sep. 28, 2012	Dec. 30, 2011
Current assets:
Cash and cash equivalents	$ 10,843	$ 36,508
Accounts receivable, net of allowance for doubtful accounts	124,803	101,946
Inventories	111,163	109,913
Refundable income taxes	0	1,292
Deferred income taxes	7,261	7,828
Prepaid expenses and other current assets	7,622	7,469
Total current assets	261,692	264,956
Property, plant and equipment, net	156,662	145,806
Amortizing intangible assets, net	91,065	100,258
Indefinite-lived intangible assets	20,828	20,288
Goodwill	347,803	338,653
Deferred income taxes	2,106	2,450
Other assets	11,774	8,936
Total assets	891,930	881,347
Current liabilities:
Accounts payable	44,146	40,665
Income taxes payable	2,932	0
Deferred income taxes	1,244	845
Accrued expenses	43,992	52,539
Total current liabilities	92,314	94,049
Long-term debt	230,154	235,950
Deferred income taxes	78,290	75,203
Other long-term liabilities	10,506	8,862
Total liabilities	411,264	414,064
Stockholders' equity:
Preferred stock	0	0
Common stock	24	23
Additional paid-in capital	318,032	307,196
Treasury stock, at cost	0	(1,387)
Retained earnings	153,279	152,522
Accumulated other comprehensive income (loss)	9,331	8,929
Total stockholders' equity	480,666	467,283
Total liabilities and stockholders' equity	$ 891,930	$ 881,347

XML

Intangible Assets (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2012	Sep. 30, 2011	Sep. 28, 2012	Sep. 30, 2011	Dec. 30, 2011
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Amortization Expense	$ 3,572	$ 2,662	$ 10,780	$ 7,738
Future Amortization Expense, Remainder of Fiscal Year	3,474		3,474
Future Amortization Expense, Year Two	13,223		13,223
Future Amortization Expense, Year Three	13,458		13,458
Future Amortization Expense, Year Four	12,407		12,407
Future Amortization Expense, Year Five	10,112		10,112
Future Amortization Expense, after Year Five	38,391		38,391
Amortizing intangible assets, net	91,065		91,065		100,258
Cost of Sales [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Amortization Expense	1,863	1,446	5,658	4,595
Selling General And Administrative Expense [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Amortization Expense	1,573	985	4,713	2,912
Research and Development Expense [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Amortization Expense	$ 136	$ 231	$ 409	$ 231

XML

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (USD $) In Thousands	Total	Common Stock	Additional Paid-In Capital	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Balance at Dec. 30, 2011	$ 467,283	$ 23	$ 307,196	$ (1,387)	$ 152,522	$ 8,929
Balance, shares at Dec. 30, 2011		23,466		(60)
Stock-based compensation	6,597		6,597
Net shares issued under stock incentive plans, shares		47		21
Net shares issued under stock incentive plans	940		464	476
Income tax liability from stock options, restricted stock and restricted stock units	(106)		(106)
Shares contributed to 401(k), shares		163		39
Shares contrbuted to 401(k)	4,793	1	3,881	911
Net income (loss)	757				757
Total other comprehensive income (loss)	402					402
Balance at Sep. 28, 2012	$ 480,666	$ 24	$ 318,032	$ 0	$ 153,279	$ 9,331
Balance, shares at Sep. 28, 2012		23,676		0

XML

Stock-Based Compensation (Details 3) (USD $)	9 Months Ended
	Sep. 28, 2012
Restricted Stock And Restricted Stock Units Time Based [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
Nonvested Restricted Stock Units and Awards, Beginning	69,942
Restricted Stock Units and Awards Granted	87,803
Restricted Stock Units and Awards Vested	(24,228)
Restricted Stock Units and Awards Forfeited	(5,586)
Nonvested Restricted Stock Units and Awards, Ending	127,931
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	$ 22.69
Restricted Stock Units and Awards Granted, Weighted Average Fair Value	$ 23.48
Restricted Stock Units and Awards Vested, Weighted Average Fair Value	$ 21.91
Restricted Stock Units and Awards Forfeited, Weighted Average Fair Value	$ 22.30
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Ending	$ 23.40
Restricted Stock And Restricted Stock Units Performance Based [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
Nonvested Restricted Stock Units and Awards, Beginning	529,743
Restricted Stock Units and Awards Granted	332,918
Restricted Stock Units and Awards Vested	(7,500)
Restricted Stock Units and Awards Forfeited	(64,715)
Nonvested Restricted Stock Units and Awards, Ending	790,446
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	$ 16.68
Restricted Stock Units and Awards Granted, Weighted Average Fair Value	$ 15.30
Restricted Stock Units and Awards Vested, Weighted Average Fair Value	$ 24.62
Restricted Stock Units and Awards Forfeited, Weighted Average Fair Value	$ 15.72
Restricted Stock Units and Awards, Weighted Average Grant Date Fair Value, Ending	$ 16.11

XML

Fair Value (Tables)

9 Months Ended

Sep. 28, 2012

Fair Value Disclosures [Abstract]

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

At	December 30, 2011	$	0
Contingent consideration liability recorded			1,500
Fair value adjustments			110
At	September 28, 2012	$	1,610

Fair Value, Measurement Inputs, Disclosure [Table Text Block]

	Fair
Contingent	Value at
Consideration	September 28,		Valuation	Unobservable
Liability	2012		Technique	Inputs
Financial milestones	$	855	Discounted cash flow	Discount rate	12%
				Projected year
				of payment	2014
Development milestones		755	Discounted cash flow	Discount rate	20%
				Projected year
				of payment	2014

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

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
				Quoted
				Prices in		Significant
				Active Markets		Other		Significant
		At		for Identical		Observable		Unobservable
		September 28,		Assets		Inputs		Inputs
Description		2012		(Level 1)		(Level 2)		(Level 3)
Assets
Foreign currency contracts	$	883	$	0	$	883	$	0
Liabilities
Accrued contingent consideration		1,610		0		0		1,610

XML

Commitments and Contingencies (Details 1) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 28, 2012
Movement in Standard Product Warranty Accrual [Roll Forward]
Standard Product Warranty Accrual, Beginning Balance	$ 2,013
Standard Product Warranty Accrual, Warranties Issued	483
Standard Product Warranty Accrual, Payments	(993)
Standard Product Warranty Accrual, Currency Translation, Increase (Decrease)	3
Standard Product Warranty Accrual, Ending Balance	$ 1,506

XML

Impact of Recently Issued Accounting Standards

9 Months Ended

Sep. 28, 2012

Impact of Recently Issued Accounting Standards [Abstract]

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

16. 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 July 2012, the FASB issued Accounting Standards Update (“ASU”) No. 2012-02,Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This ASU simplifies the guidance for testing the decline in the realizable value (impairment) of indefinite-lived intangible assets other than goodwill. This ASU allows an organization the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. An organization electing to perform a qualitative assessment is no longer required to calculate the fair value of an indefinite-lived intangible asset unless the organization determines, based on a qualitative assessment, that it is “more likely than not” that the asset is impaired. The amendments in this ASU are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. When adopted, this ASU will not have a material impact on the Company's Condensed Consolidated Financial Statements as it only impacts the timing of when the Company is required to perform the two-step impairment tests of its indefinite-lived intangible assets other than goodwill.

In December 2011, the FASB issued ASU No. 2011-11 “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.” This ASU requires companies to provide information about trading in financial instruments and related derivatives in expanded disclosures, creates new disclosure requirements about the nature of an entity's rights of offset and related arrangements associated with its financial instruments and derivative instruments. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods therein, with retrospective application required. When adopted, this ASU will not have a material impact on the Company's Condensed Consolidated Financial Statements as it only changes the disclosures surrounding the Company's offsetting assets and liabilities.

XML

Business Segment (Tables)

9 Months Ended

Sep. 28, 2012

Geographic Areas, Long-Lived Assets [Abstract]

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
		September 28,		December 30,
		2012		2011
United States	$	124,451	$	113,693
Rest of world		32,211		32,113
Total	$	156,662	$	145,806

Geographic Areas, Revenues from External Customers [Abstract]

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]

			Three Months Ended				Nine Months Ended
			September 28,		September 30,		September 28,		September 30,
			2012		2011		2012		2011
Sales by geographic area:
	United States		$	82,522	$	61,502	$	249,306	$	187,795
Non-Domestic locations:
	Puerto Rico			31,320		21,522		81,541		72,354
	Belgium			11,346		11,958		41,737		48,555
	United Kingdom & Ireland			9,837		14,466		34,525		42,585
	Rest of world			26,315		22,270		79,882		75,787
		Total sales	$	161,340	$	131,718	$	486,991	$	427,076

Reconciliation from Segment Totals to Consolidated [Abstract]

Reconciliation of Revenue from Segments to Consolidated [Table Text Block]

			Three Months Ended				Nine Months Ended
			September 28,		September 30,		September 28,		September 30,
Sales:			2012		2011		2012		2011
Implantable Medical
	CRM/Neuromodulation		$	80,246	$	70,731	$	235,406	$	226,492
	Vascular Access			13,674		11,396		37,791		32,639
	Orthopaedic			27,173		31,131		91,079		108,642
		Total Implantable Medical		121,093		113,258		364,276		367,773
Electrochem
	Portable Medical			20,219		1,954		59,346		6,105
	Energy/Environmental			16,192		13,955		51,441		45,813
	Other			3,836		2,551		11,928		7,385
		Total Electrochem		40,247		18,460		122,715		59,303
		Total sales	$	161,340	$	131,718	$	486,991	$	427,076

Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block]

		Three Months Ended				Nine Months Ended
		September 28,		September 30,		September 28,		September 30,
		2012		2011		2012		2011
Segment income from operations:
	Implantable Medical	$	2,744	$	12,030	$	24,252	$	48,677
	Electrochem		5,350		3,631		16,020		12,890
Total segment income from operations			8,094		15,661		40,272		61,567
Unallocated operating expenses			(5,967)		(2,773)		(15,856)		(12,410)
Operating income as reported			2,127		12,888		24,416		49,157
Unallocated other expense			(4,299)		(3,649)		(13,599)		(9,327)
Income (loss) before provision for income taxes		$	(2,172)	$	9,239	$	10,817	$	39,830

Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block]

Four customers accounted for a significant portion of the Company’s sales as follows:
		Three Months Ended				Nine Months Ended
		September 28,		September 30,		September 28,		September 30,
		2012		2011		2012		2011
Customer A			19%		18%		19%		20%
Customer B			18%		20%		15%		18%
Customer C			10%		11%		10%		13%
Customer D			5%		9%		6%		8%
	Total		52%		58%		50%		59%

XML

Acquistions (Tables)

9 Months Ended

Sep. 28, 2012

Business Combinations [Abstract]

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

Assets acquired
	Current assets	$	618
	Property, plant and equipment		35
	Amortizing intangible assets		2,927
	Indefinite-lived intangible assets		540
	Goodwill		8,875
	Other assets		1,576
Total assets acquired			14,571
Liabilities assumed
	Current liabilities		420
	Deferred income taxes		940
Total liabilities assumed			1,360
Purchase price		$	13,211

Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block]

			Weighted	Weighted	Weighted
	Fair		Average	Average	Average
	Value		Amortization	Useful	Discount
	Assigned		Period (Years)	Life (Years)	Rate
Amortizing Intangible Assets
Technology and patents	$	1,058	6	10	14%
Customer lists		1,869	7	15	13%
	$	2,927	7	13	13%

Schedule of Acquired Indefinite-lived Intangible Assets by Major Class [Table Text Block]

			Weighted	Weighted	Weighted
	Fair		Average	Average	Average
	Value		Amortization	Useful	Discount
	Assigned		Period (Years)	Life (Years)	Rate
Indefinite-Lived Intangible Assets
In-process research and development	$	540	N/A	12	26%

Business Acquisition, Pro Forma Information [Table Text Block]

		Three Months Ended				Nine Months Ended
		September 28,		September 30,		September 28,		September 30,
		2012		2011		2012		2011
Sales		$	161,340	$	149,991	$	487,431	$	478,159
Net income (loss)			(7,561)		7,227		583		26,719
Earnings per share:
	Basic	$	(0.32)	$	0.31	$	0.02	$	1.15
	Diluted	$	(0.32)	$	0.31	$	0.02	$	1.13

XML

Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2012	Sep. 30, 2011	Sep. 28, 2012	Sep. 30, 2011
Anitdilutive Securities Excluded From Earnings Per Share [Abstract]
Time-vested stock options, restricted stock and restricted stock units	2,223,000	976,000	1,237,000	925,000
Performance-vested stock options and restricted stock units	781,000	672,000	692,000	678,000
Convertible Note Shares Included In Diluted Share Calculation	0	0	0	0
EARNINGS PER SHARE (EPS) [Abstract]
Basic EPS	$ (0.32)	$ 0.30	$ 0.03	$ 1.18
Diluted EPS	$ (0.32)	$ 0.30	$ 0.03	$ 1.16
Net Income (Loss) Available to Common Stockholders, Diluted [Abstract]
Net income (loss)	$ (7,561)	$ 6,989	$ 757	$ 27,483
Net Income (Loss) Available to Common Stockholders, Diluted	$ (7,561)	$ 6,989	$ 757	$ 27,483
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]
Basic	23,646,000	23,297,000	23,559,000	23,241,000
Effect of dilutive securities convertible subordinated notes	0	0	0	0
Effect of dilutive securities stock optons, restricted stock and restricted stock units	0	314,000	365,000	422,000
Denominator for diluted EPS	23,646,000	23,611,000	23,924,000	23,663,000

XML

Basis of Presentation

9 Months Ended

Sep. 28, 2012

Basis of Presentation [Abstract]

BASIS OF PRESENTATION

1.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 (“U.S. 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 U.S. 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 December 30, 2011 condensed consolidated balance sheet data was derived from audited consolidated financial statements but does not include all disclosures required by U.S. 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 December 30, 2011. The Company utilizes a fifty-two, fifty-three week fiscal year ending on the Friday nearest December 31st. The third quarter and year-to-date periods of 2012 and 2011each contained 13 weeks and 39 weeks, respectively, and ended on September 28, and September 30, respectively.

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 28, 2012	Dec. 30, 2011
Current assets:
Allowance for doubtful accounts	$ 2,200,000	$ 1,900,000
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	23,676,453	23,466,128
Common stock, shares outstanding	23,676,453	23,406,023
Treasury stock, shares	0	60,105

XML

Commitments And Contingencies

9 Months Ended

Sep. 28, 2012

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

11. COMMITMENTS AND CONTINGENCIES

Litigation – The Company is a party to various legal actions arising in the normal course of business. While the Company does not believe that the ultimate resolution of any such pending actions will have a material effect on its results of operations, financial position, or cash flows, litigation is subject to inherent uncertainties. If an unfavorable ruling were to occur, there exists the possibility of a material impact in the period in which the ruling occurs.

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	December 30, 2011	$	2,013
Additions to warranty reserve			483
Warranty claims paid			(993)
Foreign currency effect			3
At	September 28, 2012	$	1,506

Contractual Obligations – Contractual obligations are defined as agreements that are enforceable and legally binding on the Company and that specify all significant terms, including: fixed or minimum obligations; fixed or minimum price provisions; and the approximate timing of the transaction. The Company's contractual obligations are normally fulfilled within short time horizons. The Companyalso enters into blanket orders with vendors that have preferred pricing and terms, however these orders are normally cancelable by us without penalty. As of September 28, 2012, the total contractual obligationsof the Companyareapproximately $29.7 million and will primarily be funded by existing cash and cash equivalents, cash flow from operations, or the Credit Facility. The Company also enters into contracts for outsourced services; however, the obligations under these contracts were not significant and the contracts generally contain clauses allowing for cancellation without significant penalty.

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	2012	$	1,072
2013			4,156
2014			4,155
2015			3,566
2016			3,092
Thereafter			3,133
Total estimated operating lease expense		$	19,174

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				Nine Months Ended
	September 28,		September 30,		September 28,		September 30,
	2012		2011		2012		2011
Increase (reduction) in Cost of Sales	$	11	$	(213)	$	(8)	$	(529)
Ineffective portion of change in fair value		0		0		0		0

Instrument	Type of Hedge		Aggregate Notional Amount	Start Date	End Date	$/Peso		Fair Value	Balance Sheet Location
FX Contract	Cash flow	$	1,500	Jan-12	Dec-12	0.0767	$	11	Current Assets
FX Contract	Cash flow		1,050	Jan-12	Dec-12	0.0713		89	Current Assets
FX Contract	Cash flow		6,000	Jan-13	Dec-13	0.0727		235	Current Assets/ Other Assets
FX Contract	Cash flow		6,000	Jan-13	Dec-13	0.0693		548	Current Assets/ Other Assets

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 an annual maximum aggregate loss of $13.5 million with a maximum benefit of $1.0 million.As of September 28, 2012, the Company has $2.0 million accrued related to the self-insurance of its medical plan, which is recorded in Accrued Expenses in the Condensed Consolidated Balance Sheet, and is primarily based upon claim history.

XML

Document and Entity Information	9 Months Ended
	Sep. 28, 2012	Nov. 06, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	GREATBATCH, INC.
Entity Central Index Key	0001114483
Document Type	10-Q
Document Period End Date	Sep. 28, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-28
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		23,695,523

XML

Earnings Per Share (Eps)

9 Months Ended

Sep. 28, 2012

EARNINGS PER SHARE (EPS) [Abstract]

EARNINGS PER SHARE (EPS)

12. EARNINGS (LOSS) PER SHARE (“EPS”)

The following table illustrates the calculation of Basic and Diluted EPS (in thousands, except per share amounts):
		Three Months Ended				Nine Months Ended
		September 28,		September 30,		September 28,		September 30,
		2012		2011		2012		2011
Numerator for basic and diluted EPS:
	Net income (loss)	$	(7,561)	$	6,989	$	757	$	27,483
Denominator for basic EPS:
	Weighted average shares outstanding		23,646		23,297		23,559		23,241
Effect of dilutive securities:
	Stock options, restricted stock and restricted stock units		-		314		365		422
Denominator for diluted EPS			23,646		23,611		23,924		23,663
Basic EPS		$	(0.32)	$	0.30	$	0.03	$	1.18
Diluted EPS		$	(0.32)	$	0.30	$	0.03	$	1.16

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		Nine Months Ended
		September 28,	September 30,	September 28,	September 30,
		2012	2011	2012	2011
Time-vested stock options, restricted
	stock and restricted stock units	2,223,000	976,000	1,237,000	925,000
Performance-vested stock options
	and restricted stock units	781,000	672,000	692,000	678,000

For the 2012 and 2011 periods, no shares related to CSN were included in the diluted EPS calculations as the average share price of the Company's common stock for those periods did not exceed CSN's conversion price per share.

XML

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2012	Sep. 30, 2011	Sep. 28, 2012	Sep. 30, 2011
Condensed Consolidated Statements of Operations and Comprehensive Income [Abstract]
Sales	$ 161,340	$ 131,718	$ 486,991	$ 427,076
Cost of sales	110,386	89,811	337,216	291,395
Gross profit	50,954	41,907	149,775	135,681
Operating expenses:
Selling, general and administrative expenses	20,274	17,760	60,053	53,980
Research, development and engineering costs, net	13,240	11,072	41,325	32,710
Other operating (income) expense, net	15,313	187	23,981	(166)
Total operating expenses	48,827	29,019	125,359	86,524
Operating income (loss)	2,127	12,888	24,416	49,157
Interest expense	4,401	4,125	13,176	12,802
Interest income	0	(1)	(1)	(9)
(Gain) loss on cost method investments, net	(350)	0	(350)	(4,232)
Other (income) expense	248	(475)	774	766
Income before provision for income taxes	(2,172)	9,239	10,817	39,830
Provision for income taxes	5,389	2,250	10,060	12,347
Net income (loss)	(7,561)	6,989	757	27,483
Earnings per share:
Basic	$ (0.32)	$ 0.30	$ 0.03	$ 1.18
Diluted	$ (0.32)	$ 0.30	$ 0.03	$ 1.16
Weighted average shares outstanding:
Basic	23,646	23,297	23,559	23,241
Diluted	23,646	23,611	23,924	23,663
Comprehensive income (loss):
Net income (loss)	(7,561)	6,989	757	27,483
Foreign currency translation gain (loss)	1,005	(8,416)	(522)	2,887
Net change in cash flow hedges, net	399	(777)	924	(396)
Comprehensive income (loss)	$ (6,157)	$ (2,204)	$ 1,159	$ 29,974

XML

Debt

9 Months Ended

Sep. 28, 2012

Debt Disclosure [Abstract]

DEBT

6. DEBT

Long-term debt is comprised of the following (in thousands):
		As of
			September 28,		December 30,
			2012		2011
Revolving line of credit		$	41,000	$	55,000
2.25% convertible subordinated notes, due 2013			197,782		197,782
Unamortized discount			(8,628)		(16,832)
	Total long-term debt	$	230,154	$	235,950

Revolving Line of Credit–The Company has a revolving credit facility (the “Credit Facility”), which provides a $400 million secured revolving credit facility,and can be increased by $200 million upon the Company's request and approval by a majority of the lenders. The Credit Facility also contains a $15 million letter of credit subfacility and a $15 million swingline subfacility. The Credit Facility has a maturity date of June 24, 2016; provided, however, if CSN (defined below) are not repaid in full, modified or refinanced before March 1, 2013, the maturity date of the Credit Facility is March 1, 2013.

The Credit Facility is secured by the Company's non-realty assets including cash, accounts receivable and inventories. Interest rates under the Credit Facility are, at the Company's option either at: (i) the prime rate plus the applicable margin, which ranges between 0.0% and 1.0%, based on the Company's total leverage ratio or (ii) the applicable LIBOR rate plus the applicable margin, which ranges between 1.5% and 3.0%, based on the Company's total leverage ratio. Loans under the swingline subfacilitywill bear interest at the prime rate plus the applicable margin, which ranges between 0.0% and 1.0%, 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 $250 million: 1) engage in permitted acquisitions in the aggregate not to exceed $250 million; 2) make other investments in the aggregate not to exceed $60 million; 3) make stock repurchases not to exceed $60 million in the aggregate; and 4) retire up to $198 million of CSN.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 September 28, 2012, the Company had available to it 100% of the above limits as the Company reset these limits in the second quarter of 2012, except for the aggregate limit and other investments limit which are now $248 million and $58 million, respectively.

The Credit Facility requires the Company to maintain a rolling four quarterratio of adjusted EBITDA to interest expense of at least3.0 to 1.0, and a total leverage ratio of not greater than4.0 to 1.0.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 September 28, 2012, the Company was in compliance with all covenants.

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.

The weighted average interest rate on borrowings under the Credit Facility as of September 28, 2012, was 2.17%. As of September 28, 2012, the Company had $359 million of borrowing capacity available under the Credit Facility. This borrowing capacity may vary from period to period based upon the debt levels of the Company and the level of EBITDA, which impacts the covenant calculations described above.

Interest Rate Swap (Subsequent Event)In October 2012 the Company entered into a three-year $150 million interest rate swap, which amortizes $50 million per year. Under terms of the contract, the Companywill receive a floating interest rate indexed to the one-month LIBOR rate and pay a fixed interest rate of 0.573%. The swap will be effective in February 2013.This swap was entered into in order to hedge against potential changes in cash flows on the anticipated outstanding debt on the Credit Facility from the repayment of CSN, which is also expected to be in February 2013 and indexed to the one-month LIBOR rate. The receive variable leg of the interest rate swap and the variable rate paid on the debt is expected to have the same rate of interest, excluding the credit spread, and reset and pay interest on the same dates. This swap will be accounted for as a cash flow hedge.

Convertible Subordinated Notes –In March 2007, the Company completed a private placement of $197.8 million of convertible subordinated notes (“CSN”) at a 5% discount. CSN bear interest at 2.25% per annum, payable semi-annually, and are due on June 15, 2013. The holders may convert CSN into shares of the Company's common stock at a conversion price of $34.70 per share, which is equivalent to a conversion ratio of 28.8219 shares per $1,000 of principal. The conversion price and the conversion ratio will adjust automatically upon certain changes to the Company's capitalization. The fair value of CSN as of September 28, 2012was approximately $197 million and is based on recent sales prices.

The effective interest rate of CSN, which takes into consideration the amortization of the discount and deferred fees related to the issuance of these notes, is 8.5%. The discount on CSN is being amortized to the maturity date utilizing the effective interest method. As of September 28, 2012, the carrying amount of the discount related to the CSN conversion option value was $7.3million. As of September 28, 2012, the if-converted value of the CSN does not exceed their principal amount as the Company's closing stock price of $24.33 per share did not exceed the conversion price of CSN.

The contractual interest and discount amortization for CSN were as follows (in thousands):
	Three Months Ended				Nine Months Ended
	September 28,		September 30,		September 28,		September 30,
	2012		2011		2012		2011
Contractual interest	$	1,113	$	1,113	$	3,338	$	3,338
Discount amortization		2,781		2,602		8,205		7,676

CSN are convertible at the option of the holders at such time as: (i) the closing price of the Company's common stock exceeds 150% of the conversion price of the notes for 20 out of 30 consecutive trading days; (ii) the trading price per $1,000 of principal is less than 98% of the product of the closing sale price of common stock for each day during any five consecutive trading day period and the conversion rate per $1,000 of principal; (iii) CSN have been called for redemption; (iv) the Company distributes to all holders of common stock rights or warrants entitling them to purchase additional shares of common stock at less than the average closing price of common stock for the ten trading days immediately preceding the announcement of the distribution; (v) the Company distributes to all holders of common stock any form of dividend which has a per share value exceeding 5% of the price of the common stock on the day prior to such date of distribution; (vi) the Company effects a consolidation, merger, share exchange or sale of assets pursuant to which its common stock is converted to cash or other property; (vii) the occurrence of the period beginning 60 days prior to but excluding June 15, 2013; and (viii) certain fundamental changes, as defined in the indenture governing the notes, occur or are approved by the Board of Directors.

Conversions in connection with corporate transactions that constitute a fundamental change require the Company to pay a premium make-whole amount, based upon a predetermined table as set forth in the indenture, whereby the conversion ratio on the notes may be increased by up to 6.3 shares per $1,000 of principal. The premium make-whole amount will be paid in shares of common stock upon any such conversion, subject to the net share settlement feature of the notes described below.

CSN contains a net share settlement feature that requires the Company to pay cash for each $1,000 of principal to be converted. Any amounts in excess of $1,000 will be settled in shares of the Company's common stock, or at the Company's option, cash. The Company has a one-time irrevocable election to pay the holders in shares of its common stock, which it currently does not plan to exercise.

CSN are redeemable by the Company at any time on or after June 20, 2012, or at the option of a holder upon the occurrence of certain fundamental changes, as defined in the indenture, affecting the Company. CSN are subordinated in right of payment to all of the Company's senior indebtedness and effectively subordinated to all debts and other liabilities of the Company's subsidiaries. The Company currently intends to use availability under the Credit Facility to repay CSN when they mature.

Deferred Financing Fees - The change in deferred financing fees is as follows (in thousands):

At	December 30, 2011	$	3,149
Amortization during the period			(802)
At	September 28, 2012	$	2,347

XML

Intangible Assets

9 Months Ended

Sep. 28, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

5. INTANGIBLE ASSETS

Amortizing intangible assets are comprised of the following (in thousands):
At	September 28, 2012		Gross Carrying Amount		Accumulated Amortization		Foreign Currency Translation		Net Carrying Amount
Technology and patents		$	96,862	$	(59,253)	$	815	$	38,424
Customer lists			68,257		(18,455)		1,879		51,681
Other			4,434		(4,169)		695		960
Total amortizing intangible assets		$	169,553	$	(81,877)	$	3,389	$	91,065
At	December 30, 2011
Technology and patents		$	97,324	$	(54,054)	$	842	$	44,112
Customer lists			66,388		(14,009)		1,807		54,186
Other			5,174		(4,019)		805		1,960
Total amortizing intangible assets		$	168,886	$	(72,082)	$	3,454	$	100,258

During the third quarter of 2012, the Company transferred $0.7 million of Electrochem's wireless sensing technology and patents to held-for-sale, whichis classified within Prepaid Expenses and Other Current Assets in the Condensed Consolidated Balance Sheet.

Aggregate intangible asset amortization expense is comprised of the following (in thousands):
	Three Months Ended				Nine Months Ended
	September 28,		September 30,		September 28,		September 30,
	2012		2011		2012		2011
Cost of sales	$	1,863	$	1,446	$	5,658	$	4,595
Selling, general and administrative expenses		1,573		985		4,713		2,912
Research, development and engineering costs, net		136		231		409		231
Total intangible asset amortization expense	$	3,572	$	2,662	$	10,780	$	7,738

Estimated future intangible asset amortization expense based on the current carrying value is as follows (in thousands):
		Estimated
		Amortization
		Expense
Remainder of	2012	$	3,474
2013			13,223
2014			13,458
2015			12,407
2016			10,112
Thereafter			38,391
Total estimated amortization expense		$	91,065

The change in indefinite-lived intangible assets is as follows (in thousands):
			Trademarks and Tradenames		IPR&D		Total
At	December 30, 2011	$	20,288	$	0	$	20,288
Indefinite-lived assets acquired			0		540		540
At	September 28, 2012	$	20,288	$	540	$	20,828
The change in goodwill is as follows (in thousands):
			Implantable Medical		Electrochem		Total
At	December 30, 2011	$	297,232	$	41,421	$	338,653
Goodwill acquired			8,875		413		9,288
Foreign currency translation			(138)		0		(138)
At	September 28, 2012	$	305,969	$	41,834	$	347,803

XML

Accounting Policies (Policies)

9 Months Ended

Sep. 28, 2012

Basis of Presentation [Abstract]

Interim Basis of Accounting [Policy Text Block]

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 (“U.S. 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 December 30, 2011 condensed consolidated balance sheet data was derived from audited consolidated financial statements but does not include all disclosures required by U.S. 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 December 30, 2011.

Use of Estimates, Policy [Policy Text Block]

The preparation of financial statements in conformity with U.S. 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 [Policy Text Block]

The Company utilizes a fifty-two, fifty-three week fiscal year ending on the Friday nearest December 31st. The third quarter and year-to-date periods of 2012 and 2011each contained 13 weeks and 39 weeks, respectively, and ended on September 28, and September 30, respectively.

In Process Research and Development, Policy [Policy Text Block]

IPR&D represents research projects which are expected to generate cash flows but have not yet reached technological feasibility. The primary basis for determining the technological feasibility of these projects is whether or not regulatory approval has been obtained. The Company classifies IPR&D acquired in a business combination as an indefinite-lived intangible asset until the completion or abandonment of the associated projects. Upon completion, the Company would determine the useful life of the IPR&D and begin amortizing the assets to reflect their use over their remaining lives. Upon permanent abandonment, the remaining carrying amount of the associated IPR&D would be written-off. The Company will test the IPR&D acquired for impairment at least annually, and more frequently if events or changes in circumstances indicate that the assets may be impaired. The impairment test consists of a comparison of the fair value of the intangible assets with their carrying amount. If the carrying amount exceeds its fair value, the Company would record an impairment loss in an amount equal to the excess.

Income Tax, Policy [Policy Text Block]

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 [Policy Text Block]

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) Expense, 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 [Policy Text Block]

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, 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 to a present value cash flow calculation 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 [Policy Text Block]

The Company assess 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 [Policy Text Block]

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 [Policy Text Block]

The Company holds investments in equity and other securities that are accounted for as either cost or equity method investments, which are classified as Other Assets. The total carrying value of these investments is reviewed quarterly for changes in circumstance or the occurrence of events that suggest the Company's investment may not be recoverable. The fair value of cost or equity method investments is not adjusted if there are no identified events or changes in circumstances that may have a material effect on the fair value of the investments.

XML

Accumulated Other Comprehensive Income

9 Months Ended

Sep. 28, 2012

Accumulated Other Comprehensive Income Notes [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME

13. ACCUMULATED OTHER COMPREHENSIVE INCOME

	Accumulated Other Comprehensive Income is comprised of the following (in thousands):
		Defined Benefit Plan Liability		Cash Flow Hedges		Foreign Currency Translation Adjustment		Total Pre-Tax Amount		Tax		Net-of-Tax Amount
At	December 30, 2011	$	(2,660)	$	(538)	$	11,526	$	8,328	$	601	$	8,929
Unrealized gain on cash flow hedges			-		1,429		-		1,429		(500)		929
Realized gain on cash flow hedges			-		(8)		-		(8)		3		(5)
Foreign currency translation loss			-		-		(522)		(522)		0		(522)
At	September 28, 2012	$	(2,660)	$	883	$	11,004	$	9,227	$	104	$	9,331

XML

Other Operating (Income) Expense, Net

9 Months Ended

Sep. 28, 2012

Other Operating (Income) Expense, Net [Abstract]

OTHER OPERATING (INCOME) EXPENSE NET

9. OTHER OPERATING (INCOME) EXPENSE, NET

Other Operating (Income) Expense, Net is comprised of the following (in thousands):
	Three Months Ended				Nine Months Ended
	September 28,		September 30,		September 28,		September 30,
		2012		2011		2012		2011
Orthopaedic facility optimization(a)	$	12,452	$	164	$	14,774	$	425
Medical device facility optimization(b)		388		0		1,282		0
ERP system upgrade(c)		1,938		0		4,745		0
Integration costs(d)		232		0		1,287		0
Asset dispositions, severance and other(e)		303		23		1,893		(591)
	$	15,313	$	187	$	23,981	$	(166)

(a) Orthopaedic facility optimization.In2010, 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 onan orthopaedic manufacturing facility in Fort Wayne, IN, which was completed in the second quarter of2012. In the third quarter of 2012, the Company completed the transfer of the manufacturing operations being performed at its Columbia City, IN orthopaedic facility into this new facility.

In the third quarter of 2012, the Company finalized plans to transfer most major functions currently performed at its facilities in Orvin and Corgemont, Switzerland into existing facilities in Fort Wayne, IN and Tijuana, Mexico by mid-2013.

The total capital investment expected for these initiatives is between $25 million and $35 million, of which $21 million has been expended to date. Total expense expected to be incurred for these initiatives is between $30 million and $36 million, of which $15.4 million has been incurred to date. All expenses will be recorded within the Implantable Medical segment and are expected to include the following; other costs include production inefficiencies, moving, revalidation, personnel, training and travel costs associated with these consolidation projects:

• Severance and retention: $11 million - $13 million;
• Accelerated depreciation and asset write-offs: $10 million - $12 million; and
• Other: $9 million - $11 million.

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	December 30, 2011	$	0	$	0	$	0	$	0
Restructuring charges			4,525		5,246		5,003		14,774
Write-offs			0		(5,246)		0		(5,246)
Cash payments			(83)		0		(5,003)		(5,086)
At	September 28, 2012	$	4,442	$	0	$	0	$	4,442

(b) 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 will include 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 two to three years. Total capital investment under these initiatives is expected to be between $15 million to $20 million of which approximately $8.5 million has been expended to date. Total expenses expected to be incurred on these projects is between $2.5 million to $3.5 million, of which $1.3 million has been incurred to date. All expenses will be recorded within the Implantable 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: $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	December 30, 2011	$	0	$	0	$	0	$	0
Restructuring charges			549		531		202		1,282
Cash payments			(549)		(531)		(202)		(1,282)
At	September 28, 2012	$	0	$	0	$	0	$	0

(c) 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 two years. Total capital investment under this initiative is expected to be between $4 million to $5 million of which approximately $2.8 million has been expended to date. Total expenses expected to be incurred on this initiative is between $5 million to $7 million, of which $4.7 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:

• Training and consulting costs: $3 million - $4.5 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	December 30, 2011	$	0	$	0	$	0
Charges			2,579		2,166		4,745
Write-offs			0		(2,166)		(2,166)
Cash payments			(1,853)		0		(1,853)
At	September 28, 2012	$	726	$	0	$	726

(d) Integration costs. During 2012, the Company incurred costs related to the integration of Micro Power and NeuroNexus.These expenses were primarily for retention bonuses, travel costs in connection with integration efforts,training and severance, which will not be required or incurred after the integrations are completed.

(e) Asset dispositions, severance and other. During 2012 and 2011, the Company recorded (gains) write-downs in connection with various asset disposals, net of insurance proceeds received, if any. Additionally, during the second quarter of 2012, the Company incurred $1.2 million of costs related to therelocation of its global headquarters to Frisco, Texas.

XML

Other Operating Expense Net (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2012	Sep. 30, 2011	Sep. 28, 2012	Sep. 30, 2011
Other Operating Income Expense Detail [Line Items]
Other operating (income) expense, net	$ 15,313	$ 187	$ 23,981	$ (166)
Orthopaedic Facility Optimization [Member]
Other Operating Income Expense Detail [Line Items]
Other operating (income) expense, net	12,452	164	14,774	425
Medical Device Facility Optimization [Member]
Other Operating Income Expense Detail [Line Items]
Other operating (income) expense, net	388	0	1,282	0
ERP System Upgrade [Member]
Other Operating Income Expense Detail [Line Items]
Other operating (income) expense, net	1,938	0	4,745	0
Integration Costs [Member]
Other Operating Income Expense Detail [Line Items]
Other operating (income) expense, net	232	0	1,287	0
Asset Dispositions Severance And Other [Member]
Other Operating Income Expense Detail [Line Items]
Other operating (income) expense, net	$ 303	$ 23	$ 1,893	$ (591)

XML

Defined Benefit Plans

9 Months Ended

Sep. 28, 2012

Defined Benefit Plans [Abstract]

DEFINED BENEFIT PLANS

7. 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 the Company's employees located in Switzerland is a funded contributory plan while the plans that provide benefits to the Company's employees located in Mexico and France are unfunded and noncontributory. The liability and corresponding expense related to these benefit plans is based on actuarial computations of current and future benefits for employees. As discussed in Note 9 “Other Operating (Income) Expense, Net,” in the third quarter of 2012, the Company finalized its plan to transfer most major functions currently performed at its facilities in Switzerland into other existing facilities. As a result of this decision, the Company curtailed its defined benefit plan provided to employees at those Swiss facilities during the third quarter of 2012. The Company has estimatedthat a net curtailment gain will be recognized as a result of this curtailment. In accordance with ASC 715, this gain will be recognized asthe related employees are terminated.No curtailment gain was recognized in the third quarter of 2012. Additionally, as nearly all of the Swiss pension liability is expected to be paid off in the next year, the Company moved all Swiss pension plan investments into cash during the third quarter of 2012. Plan assets are expected to be sufficient to cover plan liabilities.

The change in net defined benefit plan liability is as follows (in thousands):
At	December 30, 2011	$	5,569
Net defined benefit cost			914
Benefit payments			(786)
Foreign currency translation			(18)
At	September 28, 2012	$	5,679

Net defined benefit cost is comprised of the following (in thousands):
	Three Months Ended				Nine Months Ended
	September 28,		September 30,		September 28,		September 30,
	2012		2011		2012		2011
Service cost	$	272	$	290	$	835	$	714
Interest cost		98		124		305		313
Amortization of net loss		30		21		92		16
Expected return on plan assets		(103)		(126)		(318)		(317)
Net defined benefit cost	$	297	$	309	$	914	$	726

XML

Stock-Based Compensation

9 Months Ended

Sep. 28, 2012

Stock-Based Compensation [Abstract]

STOCK-BASED COMPENSATION

8. STOCK-BASED COMPENSATION

The components and classification of stock-based compensation expense were as follows (in thousands):
	Three Months Ended				Nine Months Ended
	September 28,		September 30,		September 28,		September 30,
		2012		2011		2012		2011
Stock options	$	671	$	629	$	2,038	$	1,792
Restricted stock and units		1,523		1,186		4,559		3,270
401(k) stock contribution		1,280		1,193		2,410		3,741
Total stock-based compensation expense	$	3,474	$	3,008	$	9,007	$	8,803
Cost of sales	$	1,119	$	1,013	$	2,486	$	3,094
Selling, general and administrative		2,006		1,675		5,732		4,787
Research, development and engineering		349		320		789		922
Total stock-based compensation expense	$	3,474	$	3,008	$	9,007	$	8,803

The weighted average fair value and assumptions used to value options granted are as follows:
	Nine Months Ended
		September 28,		September 30,
		2012		2011
Weighted average fair value	$	8.20	$	9.42
Risk-free interest rate		0.83%		2.04%
Expected volatility		40%		40%
Expected life (in years)		5		5
Expected dividend yield		0%		0%

The following table summarizes time-vested stock option activity:
			Number of Time-Vested Stock Options		Weighted Average Exercise Price	Weighted Average Remaining Contractual Life (In Years)		Aggregate Intrinsic Value (In Millions)
Outstanding at		December 30, 2011	1,558,771	$	23.42
	Granted		383,292		22.20
	Exercised		(44,993)		20.86
	Forfeited or expired		(106,092)		24.05
Outstanding at		September 28, 2012	1,790,978	$	23.19	6.2	$	3.6
Exercisable at		September 28, 2012	1,239,536	$	23.38	5.1	$	2.7

The following table summarizes performance-vested stock option activity:
			Number of Performance-Vested Stock Options		Weighted Average Exercise Price	Weighted Average Remaining Contractual Life (In Years)		Aggregate Intrinsic Value (In Millions)
Outstanding at		December 30, 2011	478,364	$	24.44
	Exercised		(5,353)		22.11
	Forfeited or expired		(177,733)		26.49
Outstanding at		September 28, 2012	295,278	$	23.25	4.6	$	0.4
Exercisable at		September 28, 2012	295,278	$	23.25	4.6	$	0.4

The following table summarizes time-vested restricted stock and unit activity:
			Time-Vested Activity		Weighted Average Fair Value
Nonvested at		December 30, 2011	69,942	$	22.69
	Granted		87,803		23.48
	Vested		(24,228)		21.91
	Forfeited		(5,586)		22.30
Nonvested at		September 28, 2012	127,931	$	23.40

The following table summarizes performance-vested restricted stock and unit activity:
			Performance-Vested Activity		Weighted Average Fair Value
Nonvested at		December 30, 2011	529,743	$	16.68
	Granted		332,918		15.30
	Vested		(7,500)		24.62
	Forfeited		(64,715)		15.72
Nonvested at		September 28, 2012	790,446	$	16.11

XML

Income Taxes

9 Months Ended

Sep. 28, 2012

Income Taxes [Abstract]

INCOME TAXES

10. 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.

The effective tax rate for the first nine months of 2012 was 93.0% compared to 31.0% for the same period of 2011. This increase was primarily attributable to approximately $5.0 million of tax charges recorded in connection with the Swiss orthopaedic consolidation. These charges related to the loss of the Company's Swiss tax holiday, due to its third quarter 2012 decision to discontinue manufacturing in Switzerland, as well as the establishment of a valuation allowance on a portion of its Swiss deferred tax assets as it is more likely than not that they will not be fully realized. Additionally, the 2012 effective tax rate reflects the impact of losses resulting from the Swiss restructuring, the benefit of which are recorded at a lower Swiss effective tax rate, thus increasing the overall effective tax rate of the Company. The effective tax rate also does not include the benefit of the U.S. R&D tax credit, which expired at the end of 2011. The provision for income taxes for the third quarter of 2012 represents the amount necessary to bring the year-to-date effective tax rate to 93.0% and is based upon the Company's full year expected U.S. GAAP effective tax rate.

During the first nine months of 2012, the balance of unrecognized tax benefits decreased by $0.8 million as a result of the settlement of IRS audits for 2009 and 2010 and as a result of the lapse of certain statute of limitations. Approximately $0.7 million of the balance of unrecognized tax benefits would favorably impact the effective tax rate, net of federal benefit on state issues, if recognized.

XML

Commitments and Contingencies (Narratives) (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 28, 2012
Commitments and Contingencies Disclosure [Abstract]
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 are defined as agreements that are enforceable and legally binding on the Company and that specify all significant terms, including: fixed or minimum obligations; fixed or minimum price provisions; and the approximate timing of the transaction. The Company’s contractual obligations are normally fulfilled 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 by us without penalty.
Significant Purchase Commitment Remaining Minimum Amount Committed	$ 29.7
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	13.5
Maximum Benefit Under Medical Plan Stop Loss Insurance	1.0
Accrued Self Insured Medical Plan Liability	$ 2.0

XML

Commitments and Contingencies (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 28, 2012
Operating Leases, Future Minimum Payments Due [Abstract]
Operating Leases, Future Minimum Payments Due, Current	$ 1,072
Operating Leases, Future Minimum Payments, Due in Two Years	4,156
Operating Leases, Future Minimum Payments, Due in Three Years	4,155
Operating Leases, Future Minimum Payments, Due in Four Years	3,566
Operating Leases, Future Minimum Payments, Due in Five Years	3,092
Operating Leases, Future Minimum Payments, Due Thereafter	3,133
Total estimated operating lease expense	$ 19,174

XML

Income Taxes (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 28, 2012	Sep. 30, 2011
Income Tax Disclosure [Abstract]
EffectiveIncomeTaxRateContinuingOperations	93.00%	31.00%
Swiss Consolidation Tax Charges	$ 5.0
Unrecognized Tax Benefits, Decreases Resulting from Settlements with Taxing Authorities	0.8
Unrecognized Tax Benefits that Would Impact Effective Tax Rate	$ 0.7

XML

Comprehensive Income (Tables)

9 Months Ended

Sep. 28, 2012

Accumulated Other Comprehensive Income Notes [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Accumulated Other Comprehensive Income is comprised of the following (in thousands):
		Defined Benefit Plan Liability		Cash Flow Hedges		Foreign Currency Translation Adjustment		Total Pre-Tax Amount		Tax		Net-of-Tax Amount
At	December 30, 2011	$	(2,660)	$	(538)	$	11,526	$	8,328	$	601	$	8,929
Unrealized gain on cash flow hedges			-		1,429		-		1,429		(500)		929
Realized gain on cash flow hedges			-		(8)		-		(8)		3		(5)
Foreign currency translation loss			-		-		(522)		(522)		0		(522)
At	September 28, 2012	$	(2,660)	$	883	$	11,004	$	9,227	$	104	$	9,331

XML

Debt (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2012	Sep. 30, 2011	Sep. 28, 2012	Sep. 30, 2011
Interest Costs Incurred [Abstract]
Contractual interest	$ 1,113	$ 1,113	$ 3,338	$ 3,338
Discount amortization	$ 2,781	$ 2,602	$ 8,205	$ 7,676

XML

Business Segment, Geographic and Concentration Risk Information

9 Months Ended

Sep. 28, 2012

Business Segment, Geographic and Concentration Risk Information [Abstract]

BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION

15. BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION

The Company operates its business in two reportable segments – Implantable Medical and Electrochem. The Implantable Medical segment (formerly Greatbatch Medical) is comprised of our Greatbatch Medical and QiG Group brands and designs and manufactures medical devices and components for the cardiac rhythm management (“CRM”), neuromodulation, vascular access and orthopaedic markets. Additionally, the Implantable Medical segment offers value-added assembly and design engineering services. As a result of the strategy put in place over three years ago, the Implantable Medical segment offers its customers complete medical devices including design, development, manufacturing, regulatory submission and supporting worldwide distribution. This medical device strategy is being facilitated through the QiG Group and leveragesthe component technology of Greatbatch in the Company's core markets: cardiovascular, neuromodulation and orthopaedic.The devices designed and developed by the QiG Group are manufactured by Greatbatch Medical.

Electrochem is an industry leader in designing and manufacturing total power solutions for critical applications with market-leading OEMs, largely in the portable medical and energy space. Electrochem offers its customers consultation, design, development and testing for medical device applications, in high-value markets, including those that support the transition of delivery of health care from clinical to outpatient and home settings, as well as those that enhance the quality of life for an aging population. Examples of these devices include powered surgical tools, automated external defibrillators, portable ultrasound devices, portable oxygen concentrators, and ventilators, among others. Electrochem provides cell and battery pack configurations for rechargeable and non-rechargeable battery power systems, charging and docking stations, and power supplies, for devices where failure is not an option.

The Company defines segment income from operations as sales less cost of sales including amortization and expenses attributable to segment-specific selling, general, administrative, research, development, engineering and other operating activities. Segment income also includes a portion of non-segment specific selling, general, and administrative expenses based on allocations appropriate to the expense categories. The remaining unallocated operating and other expenses are primarily administrative corporate headquarters expenses and capital costs that are not allocated to reportable segments. Transactions between the two segments are not significant.

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				Nine Months Ended
			September 28,		September 30,		September 28,		September 30,
Sales:			2012		2011		2012		2011
Implantable Medical
	CRM/Neuromodulation		$	80,246	$	70,731	$	235,406	$	226,492
	Vascular Access			13,674		11,396		37,791		32,639
	Orthopaedic			27,173		31,131		91,079		108,642
		Total Implantable Medical		121,093		113,258		364,276		367,773
Electrochem
	Portable Medical			20,219		1,954		59,346		6,105
	Energy/Environmental			16,192		13,955		51,441		45,813
	Other			3,836		2,551		11,928		7,385
		Total Electrochem		40,247		18,460		122,715		59,303
		Total sales	$	161,340	$	131,718	$	486,991	$	427,076

		Three Months Ended				Nine Months Ended
		September 28,		September 30,		September 28,		September 30,
		2012		2011		2012		2011
Segment income from operations:
	Implantable Medical	$	2,744	$	12,030	$	24,252	$	48,677
	Electrochem		5,350		3,631		16,020		12,890
Total segment income from operations			8,094		15,661		40,272		61,567
Unallocated operating expenses			(5,967)		(2,773)		(15,856)		(12,410)
Operating income as reported			2,127		12,888		24,416		49,157
Unallocated other expense			(4,299)		(3,649)		(13,599)		(9,327)
Income (loss) before provision for income taxes		$	(2,172)	$	9,239	$	10,817	$	39,830

			Three Months Ended				Nine Months Ended
			September 28,		September 30,		September 28,		September 30,
			2012		2011		2012		2011
Sales by geographic area:
	United States		$	82,522	$	61,502	$	249,306	$	187,795
Non-Domestic locations:
	Puerto Rico			31,320		21,522		81,541		72,354
	Belgium			11,346		11,958		41,737		48,555
	United Kingdom & Ireland			9,837		14,466		34,525		42,585
	Rest of world			26,315		22,270		79,882		75,787
		Total sales	$	161,340	$	131,718	$	486,991	$	427,076

Four customers accounted for a significant portion of the Company’s sales as follows:
		Three Months Ended				Nine Months Ended
		September 28,		September 30,		September 28,		September 30,
		2012		2011		2012		2011
Customer A			19%		18%		19%		20%
Customer B			18%		20%		15%		18%
Customer C			10%		11%		10%		13%
Customer D			5%		9%		6%		8%
	Total		52%		58%		50%		59%

Long-lived tangible assets by geographic area are as follows (in thousands):
	As of
		September 28,		December 30,
		2012		2011
United States	$	124,451	$	113,693
Rest of world		32,211		32,113
Total	$	156,662	$	145,806

XML

Inventories (Tables)

9 Months Ended

Sep. 28, 2012

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

Inventories are comprised of the following (in thousands):
	As of
		September 28,		December 30,
		2012		2011
Raw materials	$	56,364	$	49,773
Work-in-process		36,902		36,603
Finished goods		17,897		23,537
Total	$	111,163	$	109,913

XML

Debt (Details 1) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 28, 2012
Line of Credit Facility [Abstract]
Line of Credit Facility, Maximum Borrowing Capacity	$ 400
Line Of Credit Facility Borrowing Capacity Increase	200
Letter of Credit Subfacility Maximum Borrowing Capacity	15
Swingline Subfacility Maximum Borrowing Capacity	15
Line of Credit Facility, Expiration Date	Jun. 24, 2016
Accelerated Line Of Credit Facility Expiration Date	Mar. 01, 2013
Line of Credit Facility, Collateral	The Credit Facility is secured by the Company’s non-realty assets including cash, accounts receivable and inventories.
Interest Margin Above Prime Minimum LOC	0.00%
Interest Margin Above Prime Maximum LOC	1.00%
Interest Margin Above LIBOR Minimum LOC	1.50%
Interest Margin Above LIBOR Maximum LOC	3.00%
Interest Margin Above Prime Minimum Swingline	0.00%
Interest Margin Above Prime Maximum Swingline	1.00%
Line Of Credit Facility Commitment Fee Percentage Minimum	0.175%
Line Of Credit Facility Commitment Fee Percentage Maximum	0.25%
Line Of Credit Aggregate Restricted Activities Limit	250
Line Of Credit Maximum Permitted Acquisitions	250
Line Of Credit Maximum Other Investment Purchases	60
Line Of Credit Maximum Stock Repurchases	60
Line Of Credit Maximum Convertible Debt Retirement	198
Leverage Ratio Required To Reset Credit Facility Restrictions	2.75 to 1.0
Credit Facility Restriction Available	100.00%
Line Of Credit Aggregate Restricted Activities Limit Remaining	248
Line Of Credit Maximum Oth Investment Purchases Remaining	58
EBITDA Covenant Restriction	3.0 to 1.0
Total Leverage Covenant Restriction	4.0 to 1.0
Line of Credit Facility, Covenant Compliance	As of September 28, 2012, the Company was in compliance with all covenants.
Line of Credit Facility, Interest Rate at Period End	2.17%
Line of Credit Facility, Remaining Borrowing Capacity	$ 359

XML

Acquisitions (Details 3) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2012	Sep. 30, 2011	Sep. 28, 2012	Sep. 30, 2011
Business Acquisition, Pro Forma Information [Abstract]
Sales	$ 161,340	$ 149,991	$ 487,431	$ 478,159
Net income	$ (7,561)	$ 7,227	$ 583	$ 26,719
Basic earnings per share	$ (0.32)	$ 0.31	$ 0.02	$ 1.15
Diluted earnings per share	$ (0.32)	$ 0.31	$ 0.02	$ 1.13

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 28, 2012	Sep. 30, 2011
Cash flows from operating activities:
Net income (loss)	$ 757	$ 27,483
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	34,070	27,140
Debt related amortization included in interest expense	9,008	8,428
Stock-based compensation	9,007	8,803
(Gain) loss on cost method investments, net	(350)	(4,232)
Other non-cash (gains) losses	3,300	(1,180)
Deferred income taxes	3,004	3,274
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(22,795)	(10,429)
Inventories	(4,765)	(13,594)
Prepaid expenses and other current assets	1,380	316
Accounts payable	3,257	2,212
Accrued expenses	(314)	6,376
Income taxes payable	3,985	3,872
Net cash provided by (used in) operating activities	39,544	58,469
Cash flows from investing activities:
Acquisition of property, plant and equipment	(33,645)	(18,223)
Net proceeds from sale (purchase) of cost and equity method investments, net	(1,653)	10,315
Acquisitions, net of cash acquired	(17,224)	0
Other investing activities	95	(1,910)
Net cash provided by (used in) investing activities	(52,427)	(9,818)
Cash flows from financing activities:
Principal payments of long-term debt	(24,000)	(30,000)
Proceeds from issuance of long-term debt	10,000	0
Issuance of common stock	1,056	2,253
Payment of debt issuance costs	0	(2,114)
Other financing activities	(12)	(1,104)
Net cash provided by (used in) financing activities	(12,956)	(30,965)
Effect of foreign currency exchange rates on cash and cash equivalents	174	1,058
Net increase (decrease) in cash and cash equivalents	(25,665)	18,744
Cash and cash equivalents, beginning of period	36,508	22,883
Cash and cash equivalents, end of period	$ 10,843	$ 41,627

XML

Inventories

9 Months Ended

Sep. 28, 2012

Inventories [Abstract]

INVENTORIES

4. INVENTORIES

Inventories are comprised of the following (in thousands):
	As of
		September 28,		December 30,
		2012		2011
Raw materials	$	56,364	$	49,773
Work-in-process		36,902		36,603
Finished goods		17,897		23,537
Total	$	111,163	$	109,913

XML

Stock-Based Compensation (Details 2) (USD $) In Millions, except Share data, unless otherwise specified	9 Months Ended
	Sep. 28, 2012
Stock Options Time Based [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Stock Options Outstanding, Beginning	1,558,771
Option Grants in Period, Gross	383,292
Option Exercises in Period	(44,993)
Option Forfeitures and Expirations in Period	(106,092)
Stock Options Outstanding, Ending	1,790,978
Options Exercisable, Number	1,239,536
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Options Outstanding, Weighted Average Exercise Price, Beginning	$ 23.42
Option Grants in Period, Weighted Average Exercise Price	$ 22.20
Option Exercises in Period, Weighted Average Exercise Price	$ 20.86
Option Forfeitures and Expirations in Period, Weighted Average Exercise Price	$ 24.05
Options Outstanding, Weighted Average Exercise Price, Ending	$ 23.19
Options Exercisable, Weighted Average Exercise Price	$ 23.38
Options Outstanding, Weighted Average Remaining Contractual Term	6 years 2 months
Options Exercisable, Weighted Average Remaining Contractual Term	5 years 1 month
Options Outstanding, Intrinsic Value	$ 3.6
Options Exercisable, Intrinsic Value	2.7
Stock Options Performance Based [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Stock Options Outstanding, Beginning	478,364
Option Grants in Period, Gross	0
Option Exercises in Period	(5,353)
Option Forfeitures and Expirations in Period	(177,733)
Stock Options Outstanding, Ending	295,278
Options Exercisable, Number	295,278
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Options Outstanding, Weighted Average Exercise Price, Beginning	$ 24.44
Option Grants in Period, Weighted Average Exercise Price	$ 0
Option Exercises in Period, Weighted Average Exercise Price	$ 22.11
Option Forfeitures and Expirations in Period, Weighted Average Exercise Price	$ 26.49
Options Outstanding, Weighted Average Exercise Price, Ending	$ 23.25
Options Exercisable, Weighted Average Exercise Price	$ 23.25
Options Outstanding, Weighted Average Remaining Contractual Term	4 years 7 months
Options Exercisable, Weighted Average Remaining Contractual Term	4 years 7 months
Options Outstanding, Intrinsic Value	0.4
Options Exercisable, Intrinsic Value	$ 0.4

XML

Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2012	Sep. 30, 2011	Sep. 28, 2012	Sep. 30, 2011
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, before Tax [Abstract]
Cash Flow Hedges, Beginning			$ (538)
Unrealized gain (loss) on cash flow hedges			1,429
Realized gain (loss) on cash flow hedges			(8)
Cash Flow Hedges, End	883		883
Other Comprehensive Income (Loss), Tax [Abstract]
Tax, Beginning			601
Unrealized gain (loss) on cash flow hedges			(500)
Realized gain (loss) on cash flow hedges			3
Net foreign currency translation gain (loss)			0
Tax, End	104		104
Other Comprehensive Income Defined Benefit Plans Adjustment Before Tax Period Increase Decrease Abstract
Defined Benefit Plan Liability, Beginning			(2,660)
Defined Benefit Plan Liability, Ending	(2,660)		(2,660)
Other Comprehensive Income Foreign Currency Transaction And Translation Adjustment Before Tax Period Increase Decrease Abstract
Foreign Currency Translation Adjustment, Beginning			11,526
Net foreign currency translation gain (loss)			(522)
Foreign Currency Translation Adjustment, End	11,004		11,004
Other Comprehensive Income Loss Before Tax Period Increase Decrease Abstract
Total Pre-Tax Amount, Beginning			8,328
Unrealized gain (loss) on cash flow hedges			1,429
Realized gain (loss) on cash flow hedges			(8)
Net foreign currency translation gain (loss)			(522)
Total Pre-Tax Amount, End	9,227		9,227
Other Comprehensive Income Loss Net Of Tax Period Increase Decrease Abstract
Net-of-Tax Amount, Beginning			8,929
Unrealized gain (loss) on cash flow hedges, net of tax			929
Realized gain (loss) on cash flow hedges, net of tax			(5)
Foreign currency translation gain (loss)	1,005	(8,416)	(522)	2,887
Net-of-Tax Amount, End	$ 9,331		$ 9,331

XML

Intangible Assets (Tables)

9 Months Ended

Sep. 28, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets by Major Class [Table Text Block]

Amortizing intangible assets are comprised of the following (in thousands):
At	September 28, 2012		Gross Carrying Amount		Accumulated Amortization		Foreign Currency Translation		Net Carrying Amount
Technology and patents		$	96,862	$	(59,253)	$	815	$	38,424
Customer lists			68,257		(18,455)		1,879		51,681
Other			4,434		(4,169)		695		960
Total amortizing intangible assets		$	169,553	$	(81,877)	$	3,389	$	91,065
At	December 30, 2011
Technology and patents		$	97,324	$	(54,054)	$	842	$	44,112
Customer lists			66,388		(14,009)		1,807		54,186
Other			5,174		(4,019)		805		1,960
Total amortizing intangible assets		$	168,886	$	(72,082)	$	3,454	$	100,258

Schedule of Finite-Lived Intangible Assets, Amortization Expense [Table Text Block]

Aggregate intangible asset amortization expense is comprised of the following (in thousands):
	Three Months Ended				Nine Months Ended
	September 28,		September 30,		September 28,		September 30,
	2012		2011		2012		2011
Cost of sales	$	1,863	$	1,446	$	5,658	$	4,595
Selling, general and administrative expenses		1,573		985		4,713		2,912
Research, development and engineering costs, net		136		231		409		231
Total intangible asset amortization expense	$	3,572	$	2,662	$	10,780	$	7,738

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Estimated future intangible asset amortization expense based on the current carrying value is as follows (in thousands):
		Estimated
		Amortization
		Expense
Remainder of	2012	$	3,474
2013			13,223
2014			13,458
2015			12,407
2016			10,112
Thereafter			38,391
Total estimated amortization expense		$	91,065

Schedule of Intangible Assets Goodwill [Table Text Block]

The change in indefinite-lived intangible assets is as follows (in thousands):
			Trademarks and Tradenames		IPR&D		Total
At	December 30, 2011	$	20,288	$	0	$	20,288
Indefinite-lived assets acquired			0		540		540
At	September 28, 2012	$	20,288	$	540	$	20,828
The change in goodwill is as follows (in thousands):
			Implantable Medical		Electrochem		Total
At	December 30, 2011	$	297,232	$	41,421	$	338,653
Goodwill acquired			8,875		413		9,288
Foreign currency translation			(138)		0		(138)
At	September 28, 2012	$	305,969	$	41,834	$	347,803

XML

Business Segment, Geographic And Concentration Risk Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 28, 2012	Sep. 30, 2011	Sep. 28, 2012	Sep. 30, 2011
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales Revenue, Net	$ 161,340	$ 131,718	$ 486,991	$ 427,076
Revenue, Major Customer [Line Items]
Revenue Major Customer Percent	52.00%	58.00%	50.00%	59.00%
Customera [Member]
Revenue, Major Customer [Line Items]
Revenue Major Customer Percent	19.00%	18.00%	19.00%	20.00%
Customer B [Member]
Revenue, Major Customer [Line Items]
Revenue Major Customer Percent	18.00%	20.00%	15.00%	18.00%
Customer C [Member]
Revenue, Major Customer [Line Items]
Revenue Major Customer Percent	10.00%	11.00%	10.00%	13.00%
Customer D [Member]
Revenue, Major Customer [Line Items]
Revenue Major Customer Percent	5.00%	9.00%	6.00%	8.00%
United States [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales Revenue, Net	82,522	61,502	249,306	187,795
Puerto Rico [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales Revenue, Net	31,320	21,522	81,541	72,354
Belgium [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales Revenue, Net	11,346	11,958	41,737	48,555
United Kingdom Ireland [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales Revenue, Net	9,837	14,466	34,525	42,585
Rest Of World [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales Revenue, Net	26,315	22,270	79,882	75,787
Implantable Medical [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales Revenue, Net	121,093	113,258	364,276	367,773
Implantable Medical [Member] | Crm Neuromodulation [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales Revenue, Net	80,246	70,731	235,406	226,492
Implantable Medical [Member] | Vascular Access [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales Revenue, Net	13,674	11,396	37,791	32,639
Implantable Medical [Member] | Orthopaedic [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales Revenue, Net	27,173	31,131	91,079	108,642
Electrochem [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales Revenue, Net	40,247	18,460	122,715	59,303
Electrochem [Member] | Portable Medical [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales Revenue, Net	20,219	1,954	59,346	6,105
Electrochem [Member] | Energy Environmental [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales Revenue, Net	16,192	13,955	51,441	45,813
Electrochem [Member] | Other Electrochem [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Sales Revenue, Net	$ 3,836	$ 2,551	$ 11,928	$ 7,385

XML

Acquisitions (Narrative) (Details) (USD $) In Millions, unless otherwise specified	0 Months Ended	9 Months Ended	0 Months Ended	9 Months Ended
	Feb. 16, 2012 Neuro Nexus Technologies Inc [Member]	Sep. 28, 2012 Neuro Nexus Technologies Inc [Member]	Dec. 15, 2011 Micro Power Electronics Inc [Member]	Sep. 28, 2012 Micro Power Electronics Inc [Member]
Business Acquisition [Line Items]
Business Acquisition, Name of Acquired Entity	NeuroNexus Technologies, Inc.		Micro Power Electronics, Inc.
Business Acquisition, Description of Acquired Entity	NeuroNexus is an active implantable medical device design firm specializing in developing and commercializing neural interface technology, components and systems for neuroscience and clinical markets. NeuroNexus has an extensive intellectual property portfolio, core technologies and capabilities to support the development and manufacturing of neural interface devices across a wide range of applications including neuromodulation, sensing, optical stimulation and targeted drug delivery.		Micro Power is a leading supplier of custom battery solutions, serving the portable medical, military and handheld automatic identification and data collection markets.
Total revenue included from the acquired entity		$ 1.7
Total net income included from the acquired entity		(0.1)
Business Acquisition, Cost of Acquired Entity, Cash Paid	11.7		71.8
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High	2
Business Acquisition, Contingent Consideration, at Fair Value	1.5
Business Acquisition, Purchase Price Allocation, Status	The value assigned to certain assets and liabilities are preliminary and are subject to adjustment as additional information is obtained, including, but not limited to, the finalization of pre-acquisition tax positions. The valuation is expected to be finalized in 2012.		The value assigned to certain assets and liabilities are preliminary and are subject to adjustment as additional information is obtained, including, but not limited to, the finalization of pre-acquisition tax positions. The valuation will be finalized in 2012.
Adjustment To Purchase Price Allocation Amortizing Intangible Assets				(0.4)
Adjustment To Purchase Price Allocation Goodwill				$ 0.4

XML

Fair Value Measurements

9 Months Ended

Sep. 28, 2012

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

14. 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 foreign currency contracts and accrued contingent consideration. The Company does not have any nonfinancial assets or liabilities that are measured at fair value on a recurring basis.

Foreign currency contracts - The fair value of foreign currency contracts are determined through the use of cash flow models that utilize observable market data inputs to estimate fair value. These observable market data inputs include foreign exchange rate and credit spread curves. In addition to the above, the Company receives fair value estimates from the foreign currency contract counterparty to verify the reasonableness of the Company's estimates. The Company's foreign currency contracts are categorized in Level 2 of the fair value hierarchy.The fair value of the Company's foreign currency contracts will be realized as Cost of Sales as the inventory, which the contracts are hedging the cash flows to produce, is sold, of whichapproximately $0.7 million is expected to be realized within the next twelve months.

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) Expense, 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 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, contingent payments expected to be made. The Company used risk-adjusted discount rates ranging from 12 to 20 percent to derive the fair value of the expected obligations as of the acquisition date, which the Company believes is appropriate and representative of market participant assumptions. The Company's accrued contingent consideration is categorized in Level 3 of the fair value hierarchy. Changes in accrued contingent consideration were as follows (in thousands):

At	December 30, 2011	$	0
Contingent consideration liability recorded			1,500
Fair value adjustments			110
At	September 28, 2012	$	1,610

The recurring Level 3 fair value measurements of the Company's contingent consideration liability include the following significant unobservable inputs (dollars in thousands):

	Fair
Contingent	Value at
Consideration	September 28,		Valuation	Unobservable
Liability	2012		Technique	Inputs
Financial milestones	$	855	Discounted cash flow	Discount rate	12%
				Projected year
				of payment	2014
Development milestones		755	Discounted cash flow	Discount rate	20%
				Projected year
				of payment	2014

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
				Quoted
				Prices in		Significant
				Active Markets		Other		Significant
		At		for Identical		Observable		Unobservable
		September 28,		Assets		Inputs		Inputs
Description		2012		(Level 1)		(Level 2)		(Level 3)
Assets
Foreign currency contracts	$	883	$	0	$	883	$	0
Liabilities
Accrued contingent consideration		1,610		0		0		1,610

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. 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, 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 to a present value cash flow calculation 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. During the first nine months of 2012, the Company recorded an impairment charge of $0.3 million relating to the write-off of a definite-lived intangible asset. The Company did not record any impairment charge related to its long-lived assets, other than goodwill and indefinite-lived intangible assets, during the first nine months of 2011.

Goodwill and indefinite-lived intangible assets – The Company assess 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 to a present value cash flow calculation such as a risk-adjusted discount rate, terminal values, 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 to a present value cash flow calculation such as a risk-adjusted discount rate, royalty rates, operating budgets, and long-term strategic plans.

Note 5 “Intangible Assets” contains 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, which are classified as Other Assets. The total carrying value of these investments is reviewed quarterly for changes in circumstance or the occurrence of events that suggest the Company's investment may not be recoverable. The fair value of cost or equity method investments is not adjusted if there are no identified events or changes in circumstances that may have a material effect on the fair value of the investments. Gains and losses realized on cost and equity method investments are recorded in Other (Income) Expense, Net, unless separately stated. The aggregate recorded amount of cost and equity method investments at September28, 2012 and December 30, 2011was $9.3 million and $5.7 million, respectively.

The Company did not record any impairment charges related to its investments during the first nine months of 2012.During the second quarter of 2011, the Company recognized impairment charges related to its cost method investments of $0.3 million. The fair value of these investments was determined by reference to recent sales data of similar shares to independent parties in an inactive market. This fair value calculation was categorized in Level 2 of the fair value hierarchy. In the first quarter of 2011, the Companysold its cost method investment in IntElect Medical, Inc. (“IntElect”) in conjunction with Boston Scientific's acquisition of IntElect, which resulted in a pre-tax gain of $4.5 million in the first quarter of 2011 and an additional $0.4 million gain during the third quarter of 2012.

Fair Value of Other Financial Instruments

Convertible subordinated notes - The fair value of CSN disclosed in Note 6 “Debt” was determined based upon recent third-party transactions for CSN in an inactive market. CSN are valued for disclosure purposes utilizing Level 2 measurements of the fair value hierarchy.