(Mark One) | |
x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Fiscal Year Ended September 30, 2017 | |
or | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 94-1622541 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
5100 Patrick Henry Drive, Santa Clara, California | 95054 |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Name of each exchange on which registered | |
Common Stock, $0.01 par value | The NASDAQ Stock Market LLC | |
Nasdaq Global Select Market |
Large accelerated filer x | Accelerated filer ¨ | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o | Emerging growth company o |
• | future trends in microelectronics, scientific research and government programs, OEM components and instrumentation and materials processing; |
• | acquisition efforts, payment methods for acquisitions and utilization of technology from our acquisitions, and potential synergies and benefits; |
• | Leverage our technology portfolio and application engineering to lead the proliferation of photonics into broader markets—We will continue to identify opportunities in which our technology portfolio and application engineering can be used to offer innovative solutions and gain access to new markets. We plan to utilize our expertise to increase our market share in the mid to high power material processing applications. |
• | Streamline our manufacturing structure and improve our cost structure—We will focus on optimizing the mix of products that we manufacture internally and externally. We will utilize vertical integration where our internal manufacturing process is considered proprietary and seek to leverage external sources when the capabilities and cost structure are well developed and on a path towards commoditization. |
• | Focus on long-term improvement of adjusted EBITDA, in dollars and as a percentage of net sales—We define adjusted EBITDA as operating income adjusted for depreciation, amortization, stock-based compensation expense, major restructuring costs and certain other non-operating income and expense items, such as costs related to our acquisition of Rofin. Key initiatives for EBITDA improvements include utilization of our Asian manufacturing locations, optimizing our supply chain and continued leveraging of our infrastructure. |
• | Optimize our leadership position in existing markets—There are a number of markets where we have historically been at the forefront of technological development and product deployment and from which we have derived a substantial portion of our revenues. We plan to optimize our financial returns from these markets. |
• | Maintain and develop additional strong collaborative customer and industry relationships—We believe that the Coherent brand name and reputation for product quality, technical performance and customer satisfaction will help us to further develop our loyal customer base. We plan to maintain our current customer relationships and develop new ones with customers who are industry leaders and work together with these customers to design and develop innovative product systems and solutions as they develop new technologies. |
• | Develop and acquire new technologies and market share—We will continue to enhance our market position through our existing technologies and develop new technologies through our internal research and development efforts, as well as through the acquisition of additional complementary technologies, intellectual property, manufacturing processes and product offerings. |
Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | |||||||
Percentage of total net sales | Percentage of total net sales | Percentage of total net sales | |||||||
Consolidated: | |||||||||
Microelectronics | 51.9 | % | 53.1 | % | 50.6 | % | |||
Materials processing | 29.7 | % | 14.5 | % | 13.8 | % | |||
OEM components and instrumentation | 11.8 | % | 18.8 | % | 21.0 | % | |||
Scientific and government programs | 6.6 | % | 13.6 | % | 14.6 | % | |||
Total | 100.0 | % | 100.0 | % | 100.0 | % |
Market | Application | Technology | |
Microelectronics | Flat panel display | CO, CO2 DPSS Excimer Ultrafast Semiconductor Laser Rails | |
Advanced packaging and interconnects | CO, CO2 DPSS Excimer Ultrafast Laser Rails | ||
Semiconductor front-end | CO2 DPSS OPSL Excimer Ion Laser Marking Tools | ||
Materials processing | Metal cutting, drilling, joining, cladding, surface treatment and additive manufacturing | CO2 Fiber Semiconductor Laser Machine Tools Ultrafast Laser Rails Components | |
Laser marking and coding | CO2 DPSS Ultrafast Laser Rails Laser Marking Tools | ||
Non-metal cutting, drilling | CO, CO2 DPSS Ultrafast Excimer Semiconductor Laser Machine Tools Laser Rails Components | ||
OEM components and instrumentation | Bio-Instrumentation | DPSS OPSL Semiconductor | |
Graphic arts and display | OPSL CO2 | ||
Medical therapy (OEM) | CO, CO2 DPSS Ultrafast Excimer OPSL Semiconductor | ||
Scientific research and government programs | All scientific applications | DPSS Excimer OPSL Ultrafast | |
*Coherent sells its laser measurement and control products into a number of these applications. |
• | the inability to successfully combine our business with Rofin in a manner that permits the combined company to achieve the full synergies and other benefits anticipated to result from the merger; |
• | complexities associated with managing the combined businesses, including difficulty addressing possible differences in corporate cultures and management philosophies and the challenge of integrating products, services, complex and different information technology systems (including different Enterprise Management Systems), control and compliance processes, technology, networks and other assets of each of the companies in a cohesive manner; |
• | diversion of the attention of our management; and |
• | the disruption of, or the loss of momentum in, our business or inconsistencies in standards, controls, procedures or policies, any of which could adversely affect our ability to maintain relationships with customers, suppliers, employees and other constituencies or our ability to achieve the anticipated benefits of the merger, or could reduce our earnings or otherwise adversely affect our business and financial results. |
• | general economic uncertainties in the macroeconomic and local economies facing us, our customers and the markets we serve; |
• | fluctuations in demand for our products or downturns in the industries that we serve; |
• | the ability of our suppliers, both internal and external, to produce and deliver components and parts, including sole or limited source components, in a timely manner, in the quantity, quality and prices desired; |
• | the timing of receipt and conversion of bookings to net sales; |
• | the concentration of a significant amount of our backlog, and resultant net sales, with a few customers in the Microelectronics market; |
• | rescheduling of shipments or cancellation of orders by our customers; |
• | fluctuations in our product mix; |
• | the ability of our customers' other suppliers to provide sufficient material to support our customers' products; |
• | currency fluctuations and stability, in particular the Euro, the Japanese Yen, the South Korean Won, the Chinese RMB and the US dollar as compared to other currencies; |
• | commodity pricing; |
• | introductions of new products and product enhancements by our competitors, entry of new competitors into our markets, pricing pressures and other competitive factors; |
• | our ability to develop, introduce, manufacture and ship new and enhanced products in a timely manner without defects; |
• | our ability to manage our manufacturing capacity across our diverse product lines and that of our suppliers, including our ability to successfully expand our manufacturing capacity in various locations around the world; |
• | our ability to successfully internally transfer products as part of our integration efforts; |
• | our reliance on contract manufacturing; |
• | our reliance in part upon the ability of our OEM customers to develop and sell systems that incorporate our laser products; |
• | our customers' ability to manage their susceptibility to adverse economic conditions; |
• | the rate of market acceptance of our new products; |
• | the ability of our customers to pay for our products; |
• | expenses associated with acquisition-related activities; |
• | seasonal sales trends, including with respect to Rofin’s historical business, which has traditionally experienced a reduction in sales during the first half of its fiscal year as compared to the second half of its fiscal year; |
• | jurisdictional capital and currency controls negatively impacting our ability to move funds from or to an applicable jurisdiction; |
• | access to applicable credit markets by us, our customers and their end customers; |
• | delays or reductions in customer purchases of our products in anticipation of the introduction of new and enhanced products by us or our competitors; |
• | our ability to control expenses; |
• | the level of capital spending of our customers; |
• | potential excess and/or obsolescence of our inventory; |
• | costs and timing of adhering to current and developing governmental regulations and reviews relating to our products and business; |
• | costs related to acquisitions of technology or businesses; |
• | impairment of goodwill, intangible assets and other long-lived assets; |
• | our ability to meet our expectations and forecasts and those of public market analysts and investors; |
• | the availability of research funding by governments with regard to our customers in the scientific business, such as universities; |
• | continued government spending on defense-related and scientific research projects where we are a subcontractor; |
• | maintenance of supply relating to products sold to the government on terms which we would prefer not to accept; |
• | changes in policy, interpretations, or challenges to the allowability of costs incurred under government cost accounting standards; |
• | damage to our reputation as a result of coverage in social media, Internet blogs or other media outlets; |
• | managing our and other parties' compliance with contracts in multiple languages and jurisdictions; |
• | managing our internal and third party sales representatives and distributors, including compliance with all applicable laws; |
• | impact of government economic policies on macroeconomic conditions; |
• | costs and expenses from litigation; |
• | costs associated with designing around or payment of licensing fees associated with issued patents in our fields of business; |
• | government support of alternative energy industries, such as solar; |
• | negative impacts related to the “Brexit” vote by the United Kingdom, particularly with regard to sales from our Glasgow, Scotland facility to other jurisdictions and purchases of supplies from outside the United Kingdom by such facility; |
• | negative impacts related to the recent independence movement in Catalonia, Spain, particularly with regard to holding and operating some of our foreign entities in an efficient manner from a tax, business and legal perspective; |
• | negative impacts related to government instability, including the recent difficulties in forming a governing coalition in Germany; |
• | the future impact of legislation, rulemaking, and changes in accounting, tax, defense procurement, or export policies; and |
• | distraction of management related to acquisition, integration or divestment activities. |
• | loss of customers or orders; |
• | increased costs of product returns and warranty expenses; |
• | damage to our brand reputation; |
• | failure to attract new customers or achieve market acceptance; |
• | diversion of development, engineering and manufacturing resources; and |
• | legal actions by our customers and/or their end users. |
• | longer accounts receivable collection periods; |
• | the impact of recessions and other economic conditions in economies outside the United States; |
• | unexpected changes in regulatory requirements; |
• | certification requirements; |
• | environmental regulations; |
• | reduced protection for intellectual property rights in some countries; |
• | potentially adverse tax consequences; |
• | political and economic instability; |
• | import/export regulations, tariffs and trade barriers; |
• | compliance with applicable United States and foreign anti-corruption laws; |
• | less than favorable contract terms; |
• | reduced ability to enforce contractual obligations; |
• | cultural and management differences; |
• | reliance in some jurisdictions on third party sales channel partners; |
• | preference for locally produced products; and |
• | shipping and other logistics complications. |
• | stop manufacturing, selling or using our products that use the infringed intellectual property; |
• | obtain from the owner of the infringed intellectual property right a license to sell or use the relevant technology, although such license may not be available on reasonable terms, or at all; or |
• | redesign the products that use the technology. |
• | issue stock that would dilute our current stockholders' percentage ownership; |
• | pay cash that would decrease our working capital; |
• | incur debt; |
• | assume liabilities; or |
• | incur expenses related to impairment of goodwill and amortization. |
• | problems combining the acquired operations, systems, technologies or products; |
• | an inability to realize expected operating efficiencies or product integration benefits; |
• | difficulties in coordinating and integrating geographically separated personnel, organizations, systems and facilities; |
• | difficulties integrating business cultures; |
• | unanticipated costs or liabilities, including the costs associated with improving the internal controls of the acquired company; |
• | diversion of management's attention from our core businesses; |
• | adverse effects on existing business relationships with suppliers and customers; |
• | potential loss of key employees, particularly those of the purchased organizations; |
• | incurring unforeseen obligations or liabilities in connection with acquisitions; and |
• | the failure to complete acquisitions even after signing definitive agreements which, among other things, would result in the expensing of potentially significant professional fees and other charges in the period in which the acquisition or negotiations are terminated. |
• | maintaining and enhancing our relationships with our customers; |
• | the education of potential end-user customers about the benefits of lasers and laser systems; and |
• | our ability to accurately predict and develop our products to meet industry standards. |
• | changes in our current and future global structure based on the Rofin acquisition and restructuring that involved significant movement of U.S. and foreign entities, and our ability to maintain favorable tax treatment as a result of various Rofin restructuring efforts and business activities; |
• | change in the assessment of the ability to recognize our deferred tax assets and change in the valuation of our deferred tax liabilities; |
• | the outcome of discussions with various tax authorities regarding intercompany transfer pricing arrangements; |
• | changes that involve other acquisitions, restructuring or an increased investment in technology outside of the United States to better align asset ownership and business functions with revenues and profits; |
• | changes in the composition of earnings in countries or states with differing tax rates; |
• | the resolution of issues arising from tax audits with various tax authorities, and in particular, the outcome of the German tax audits of our tax returns for fiscal years 2010 - 2015; |
• | adjustments to estimated taxes upon finalization of various tax returns; |
• | increases in expenses not deductible for tax purposes, including impairments of goodwill in connection with acquisitions; |
• | our ability to meet the eligibility requirements for tax holidays of limited time tax-advantage status; |
• | changes in available tax credits; |
• | changes in share-based compensation; |
• | changes in the tax laws or the interpretation of such tax laws, including the Base Erosion Profit Shifting (“BEPS”) action plan implemented by the Organization for Economic Co-operation and Development (“OECD”); |
• | changes in generally accepted accounting principles; and |
• | the repatriation of non-U.S. earnings for which we have not previously provided for U.S. taxes. |
• | the ability of our board of directors to alter our bylaws without stockholder approval; |
• | limiting the ability of stockholders to call special meetings; and |
• | establishing advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings. |
Description | Use | Term* | ||||
Santa Clara, CA | 8.5 acres of land, 200,000 square feet | Corporate headquarters, manufacturing, R&D | Owned | |||
Santa Clara, CA | 90,120 square feet | Office | Leased through July 2020 | |||
Sunnyvale, CA (1) | 24,159 square feet | Office, manufacturing, R&D | Leased through December 2023 | |||
Richmond, CA (2) | 37,952 square feet | Office, manufacturing, R&D | Leased through November 2022 | |||
Richmond, CA (2) | 30,683 square feet | Office, manufacturing, R&D | Leased through February 2019 | |||
Richmond, CA (2) | 11,500 square feet | Warehouse | Leased through November 2018 |
Orlando, FL (2) | 3.1 acres of land, 30,722 square feet | Office, manufacturing, R&D | Owned | |||
Bloomfield, CT (1) | 72,996 square feet | Office, manufacturing, R&D | Leased through December 2022 | |||
East Hanover, NJ (2) | 29,932 square feet | Office, manufacturing, R&D | Leased through January 2025 | |||
Landing, NJ (1) | 8.0 acres of land, 34,539 square feet | Office, manufacturing, R&D | Owned | |||
Wilsonville, OR (2) | 41,250 square feet | Office, manufacturing, R&D | Leased through December 2018 | |||
Salem, NH (1) | 44,153 square feet | Office, manufacturing, R&D | Leased through October 2024 | |||
Devens, MA (1) | 16,792 square feet | Office, manufacturing, R&D | Leased through February 2019 | |||
East Granby, CT (1) | 68,135 square feet | Office, manufacturing, R&D | Leased through January 2027 | |||
Plymouth, MI (1) | 52,128 square feet | Office, manufacturing, R&D | Leased through May 2022 | |||
Göttingen, Germany (2) | 14.2 acres of land, several buildings totaling 224,753 square feet | Office, manufacturing, R&D | Owned | |||
Hamburg, Germany (1) | 4.6 acres of land, 119,724 square feet | Office, manufacturing, R&D | Owned | |||
Mainz, Germany (1) | 1.2 acres of land, 46,984 square feet | Office, manufacturing, R&D | Owned | |||
Mainz, Germany (1) | 47,619 square feet | Office, manufacturing, R&D | Leased through September 2022 | |||
Overath, Germany (1) | 2.5 acres of land, 22,948 square feet | Office, manufacturing, R&D | Owned | |||
Gilching, Germany (1) | 4.2 acres of land, 125,012 square feet | Office, manufacturing, R&D | Owned | |||
Freiburg, Germany (1) | 12,686 square feet | Office, manufacturing, R&D | Leased through September 2019 | |||
Gunding, Germany (1) | 81,913 square feet | Office, manufacturing, R&D | Leased through May 2019 | |||
Starnberg, Germany (1) | 19,375 square feet | Office, manufacturing, R&D | Leased through May 2021 | |||
Lübeck, Germany (2) | 46,228 square feet | Office, manufacturing, R&D | Leased through December 2018 | |||
Lübeck, Germany (2) | 22,583 square feet | Manufacturing, R&D | Leased through October 2018 with option to purchase building | |||
Lübeck, Germany (2) | 8,095 square feet | Office, manufacturing, R&D | Leased through April 2019 | |||
Lübeck, Germany (2) | 7,578 square feet | Warehouse | Leased through April 2019 | |||
Kaiserslautern, Germany (2) | 33,740 square feet | Office, manufacturing, R&D | Leased through September 2018 | |||
Tampere, Finland (1) | 4.9 acres of land, 50,074 square feet | Office, manufacturing, R&D | Owned | |||
Pamplona, Spain (1) | 0.3 acres of land, 24,654 square feet | Office, manufacturing | Owned | |||
Gothenburg, Sweden (1) | 49,514 square feet | Office, manufacturing, R&D | Leased through August 2020 | |||
Belp, Switzerland (1) | 12,981 square feet | Office, manufacturing, R&D | Leased through February 2021 | |||
Glasgow, Scotland (2) | 2.0 acres of land, 31,600 square feet | Office, manufacturing, R&D | Owned | |||
Nanjing, China (1) | 3.0 acres of land, 86,397 square feet | Office, manufacturing, R&D | Owned | |||
Ansung, South Korea (1) | 60,257 square feet | Office, manufacturing | Leased through September 2027 |
YongIn-Si, South Korea (2) | 33,074 square feet | Office, manufacturing | Leased through November 2021 | |||
Kallang Sector, Singapore | 42,723 square feet | Office, manufacturing | Leased through January 2022 | |||
Penang, Malaysia | 12,519 square feet | Office, manufacturing | Leased through August 2020 |
(1) | This facility is utilized primarily by our ILS operating segment. |
(2) | This facility is utilized primarily by our OLS operating segment. |
* | We currently plan to renew leases on buildings as they expire, as necessary. |
Fiscal | |||||||||||||||
2017 | 2016 | ||||||||||||||
High | Low | High | Low | ||||||||||||
First quarter | $ | 138.33 | $ | 101.43 | $ | 68.33 | $ | 52.46 | |||||||
Second quarter | $ | 206.01 | $ | 136.42 | $ | 92.58 | $ | 57.96 | |||||||
Third quarter | $ | 261.85 | $ | 192.79 | $ | 98.26 | $ | 84.11 | |||||||
Fourth quarter | $ | 276.36 | $ | 210.25 | $ | 111.63 | $ | 89.43 |
INDEXED RETURNS | |||||||||||
Base Period | Years Ending | ||||||||||
Company Name / Index | 9/29/2012 | 9/28/2013 | 9/27/2014 | 10/3/2015 | 10/1/2016 | 9/30/2017 | |||||
Coherent, Inc. | 100 | 136.48 | 140.08 | 121.70 | 246.02 | 523.41 | |||||
Russell 1000 Index | 100 | 121.58 | 144.71 | 145.40 | 164.36 | 194.83 | |||||
Russell 2000 Index | 100 | 130.10 | 137.32 | 138.54 | 158.02 | 190.80 | |||||
S&P Technology Index | 100 | 107.51 | 137.96 | 143.25 | 173.33 | 223.40 | |||||
Nasdaq Composite Index | 100 | 123.09 | 148.66 | 156.94 | 179.29 | 221.75 |
Consolidated financial data | Fiscal 2017 (1) | Fiscal 2016 (2) | Fiscal 2015 (3) | Fiscal 2014 | Fiscal 2013 (4) | ||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||
Net sales | $ | 1,723,311 | $ | 857,385 | $ | 802,460 | $ | 794,639 | $ | 810,126 | |||||||||
Gross profit | $ | 750,269 | $ | 381,392 | $ | 335,399 | $ | 313,390 | $ | 322,271 | |||||||||
Net income from continuing operations | 208,644 | $ | 87,502 | $ | 76,409 | $ | 59,106 | $ | 66,355 | ||||||||||
Net income per share from continuing operations(5): | |||||||||||||||||||
Basic | $ | 8.52 | $ | 3.62 | $ | 3.09 | $ | 2.39 | $ | 2.75 | |||||||||
Diluted | $ | 8.42 | $ | 3.58 | $ | 3.06 | $ | 2.36 | $ | 2.70 | |||||||||
Shares used in computation(5): | |||||||||||||||||||
Basic | 24,487 | 24,142 | 24,754 | 24,760 | 24,138 | ||||||||||||||
Diluted | 24,777 | 24,415 | 24,992 | 25,076 | 24,555 | ||||||||||||||
Total assets * | $ | 2,337,800 | $ | 1,161,148 | $ | 968,947 | $ | 999,375 | $ | 966,478 | |||||||||
Long-term obligations | $ | 589,001 | $ | — | $ | — | $ | — | $ | — | |||||||||
Other long-term liabilities * | $ | 166,390 | $ | 48,826 | $ | 49,939 | $ | 62,407 | $ | 62,132 | |||||||||
Stockholders' equity | $ | 1,163,264 | $ | 910,828 | $ | 796,418 | $ | 819,649 | $ | 758,518 | |||||||||
Other data: | |||||||||||||||||||
Cash dividends declared per share | $ | — | $ | — | $ | — | $ | — | $ | 1.00 |
(1) | Includes $19.0 million of after-tax amortization of purchase accounting step-up, $17.4 million of after tax costs related to the acquisition of Rofin, $8.4 million of after-tax restructuring charges, a charge of $1.9 million after-tax for the impairment of net assets of several entities held for sale, $1.8 million after-tax interest expense on the commitment of our term loan to finance the acquisition of Rofin, a $7.1 million after-tax gain on our hedge of our foreign exchange risk related to the commitment of our term loan and the issuance of debt to finance the acquisition of Rofin, a $3.4 million after-tax gain on our sale of previously owned Rofin shares and a benefit of $1.4 million from the closure of R&D tax audits. |
(2) | Includes $6.4 million of after tax costs related to the acquisition of Rofin, a $1.4 million after-tax loss on our hedge of our foreign exchange risk related to the commitment of our term loan to finance the acquisition of Rofin, $0.8 million after-tax interest expense on the commitment of our term loan to finance the acquisition of Rofin and a benefit a benefit of $1.2 million from the renewal of the R&D tax credit for fiscal 2015. |
(3) | Includes a charge of $1.3 million after tax for the impairment of our investment in SiOnyx, a $1.3 million after-tax charge for an accrual related to an ongoing customs audit, a benefit of $1.1 million from the renewal of the R&D tax credit for fiscal 2014 and $1.3 million gain on our purchase of Tinsley in the fourth quarter of fiscal 2015. |
(4) | Includes a tax benefit of $1.4 million from the renewal of the R&D tax credit for fiscal 2012. |
(5) | See Note 2, "Significant Accounting Policies" in our Notes to Consolidated Financial Statements under Item 15 of this annual report for an explanation of the determination of the number of shares used in computing net income (loss) per share. |
Fiscal | |||||||||||
2017 | 2016 | 2015 | |||||||||
(Dollars in thousands) | |||||||||||
Net Sales—OEM Laser Sources | $ | 1,143,620 | $ | 722,517 | $ | 655,854 | |||||
Net Sales—Industrial Lasers & Systems | $ | 579,691 | $ | 134,868 | $ | 146,606 | |||||
Gross Profit as a Percentage of Net Sales—OEM Laser Sources | 53.6 | % | 48.3 | % | 45.5 | % | |||||
Gross Profit as a Percentage of Net Sales—Industrial Lasers & Systems | 24.4 | % | 26.0 | % | 27.0 | % | |||||
Research and Development Expenses as a Percentage of Net Sales | 6.9 | % | 9.5 | % | 10.2 | % | |||||
Income Before Income Taxes | $ | 302,055 | $ | 122,896 | $ | 99,568 | |||||
Net Cash Provided by Operating Activities | $ | 384,116 | $ | 105,299 | $ | 124,458 | |||||
Days Sales Outstanding in Receivables | 63.9 | 69.6 | 63.8 | ||||||||
Annualized Fourth Quarter Inventory Turns | 2.6 | 2.5 | 3.0 | ||||||||
Capital Spending as a Percentage of Net Sales | 3.7 | % | 5.8 | % | 2.8 | % | |||||
Net Income as a Percentage of Net Sales | 12.1 | % | 10.2 | % | 9.5 | % | |||||
Adjusted EBITDA as a Percentage of Net Sales | 30.1 | % | 22.6 | % | 19.3 | % |
Fiscal | ||||||||
2017 | 2016 | 2015 | ||||||
Net income from continuing operations as a percentage of net sales | 12.1 | % | 10.2 | % | 9.5 | % | ||
Income tax expense | 5.4 | % | 4.1 | % | 2.9 | % | ||
Interest and other income, net | 1.6 | % | 0.8 | % | 0.2 | % | ||
Depreciation and amortization | 6.1 | % | 4.0 | % | 4.1 | % | ||
Purchase accounting step-up | 1.5 | % | — | % | 0.1 | % | ||
Restructuring charges | 0.7 | % | — | % | — | % | ||
Gain on business combination | (0.3 | )% | — | % | (0.2 | )% | ||
Customs audit | — | % | — | % | 0.2 | % | ||
Costs related to acquisition of Rofin | 1.0 | % | 1.1 | % | — | % | ||
Impairment of assets held for sale | 0.2 | % | — | % | — | % | ||
Impairment of investment | — | % | — | % | 0.2 | % | ||
Stock-based compensation | 1.8 | % | 2.4 | % | 2.3 | % | ||
Adjusted EBITDA as a percentage of net sales | 30.1 | % | 22.6 | % | 19.3 | % |
Fiscal | ||||||||
2017 | 2016 | 2015 | ||||||
(As a percentage of net sales) | ||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | ||
Cost of sales | 56.5 | % | 55.5 | % | 58.2 | % | ||
Gross profit | 43.5 | % | 44.5 | % | 41.8 | % | ||
Operating expenses: | ||||||||
Research and development | 6.9 | % | 9.5 | % | 10.2 | % | ||
Selling, general and administrative | 16.9 | % | 19.7 | % | 18.7 | % | ||
Gain on business combination | (0.3 | )% | — | % | (0.2 | )% | ||
Impairment of assets held for sale | 0.2 | % | — | % | — | % | ||
Impairment of investment | — | % | — | % | 0.2 | % | ||
Amortization of intangible assets | 0.9 | % | 0.4 | % | 0.3 | % | ||
Total operating expenses | 24.6 | % | 29.6 | % | 29.2 | % | ||
Income from operations | 18.9 | % | 14.9 | % | 12.6 | % | ||
Other income (expense), net | (1.4 | )% | (0.6 | )% | (0.2 | )% | ||
Income from continuing operations before income taxes | 17.5 | % | 14.3 | % | 12.4 | % | ||
Provision for income taxes | 5.4 | % | 4.1 | % | 2.9 | % | ||
Net income from continuing operations | 12.1 | % | 10.2 | % | 9.5 | % |
Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | ||||||||||||||||||
Amount | Percentage of total net sales | Amount | Percentage of total net sales | Amount | Percentage of total net sales | |||||||||||||||
Consolidated: | ||||||||||||||||||||
Microelectronics | $ | 894,243 | 51.9 | % | $ | 454,908 | 53.1 | % | $ | 406,187 | 50.6 | % | ||||||||
Materials processing | 511,909 | 29.7 | % | 124,011 | 14.5 | % | 110,986 | 13.8 | % | |||||||||||
OEM components and instrumentation | 203,082 | 11.8 | % | 161,573 | 18.8 | % | 168,741 | 21.0 | % | |||||||||||
Scientific and government programs | 114,077 | 6.6 | % | 116,893 | 13.6 | % | 116,546 | 14.6 | % | |||||||||||
Total | $ | 1,723,311 | 100.0 | % | $ | 857,385 | 100.0 | % | $ | 802,460 | 100.0 | % |
Fiscal 2017 | Fiscal 2016 | Fiscal 2015 | ||||||||||||||||||
Amount | Percentage of total net sales | Amount | Percentage of total net sales | Amount | Percentage of total net sales | |||||||||||||||
Consolidated: | ||||||||||||||||||||
OEM Laser Sources (OLS) | $ | 1,143,620 | 66.4 | % | $ | 722,517 | 84.3 | % | $ | 655,854 | 81.7 | % | ||||||||
Industrial Lasers & Systems (ILS) | 579,691 | 33.6 | % | 134,868 | 15.7 | % | 146,606 | 18.3 | % | |||||||||||
Total | $ | 1,723,311 | 100.0 | % | $ | 857,385 | 100.0 | % | $ | 802,460 | 100.0 | % |
Fiscal | ||||||||||||||||||||
2017 | 2016 | 2015 | ||||||||||||||||||
Amount | Percentage of total net sales | Amount | Percentage of total net sales | Amount | Percentage of total net sales | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Research and development | $ | 119,166 | 6.9 | % | $ | 81,801 | 9.5 | % | $ | 81,455 | 10.2 | % | ||||||||
Selling, general and administrative | 292,084 | 16.9 | % | 169,138 | 19.7 | % | 149,829 | 18.7 | % | |||||||||||
Gain on business combination | (5,416 | ) | (0.3 | )% | — | — | % | (1,316 | ) | (0.2 | )% | |||||||||
Impairment of assets held for sale | 2,916 | 0.2 | % | — | — | % | — | — | % | |||||||||||
Impairment of investment | — | — | % | — | — | % | 2,017 | 0.2 | % | |||||||||||
Amortization of intangible assets | 16,024 | 0.9 | % | 2,839 | 0.4 | % | 2,667 | 0.3 | % | |||||||||||
Total operating expenses | $ | 424,774 | 24.6 | % | $ | 253,778 | 29.6 | % | $ | 234,652 | 29.2 | % |
Fiscal | |||||||||||
2017 | 2016 | 2015 | |||||||||
Net cash provided by operating activities | $ | 384,116 | $ | 105,299 | $ | 124,458 | |||||
Sales of shares under employee stock plans | 8,111 | 7,849 | 7,308 | ||||||||
Net settlement of restricted common stock | (15,717 | ) | (5,443 | ) | (5,302 | ) | |||||
Repurchase of common stock | — | — | (75,027 | ) | |||||||
Capital expenditures | (63,774 | ) | (49,327 | ) | (22,163 | ) | |||||
Acquisition of businesses, net of cash acquired | (740,481 | ) | — | (9,300 | ) | ||||||
Borrowings, net of repayments | 539,149 | 20,000 | — | ||||||||
Debt issuance costs | (26,367 | ) | (5,202 | ) | — |
Fiscal | |||||||
2017 | 2016 | ||||||
Cash and cash equivalents | $ | 443,066 | $ | 354,347 | |||
Short-term investments | 32,510 | 45,606 | |||||
Working capital | 892,519 | 614,145 |
Total | Less than 1 year | 1 to 3 years | 3 to 5 years | More than 5 years | |||||||||||||||
Operating lease payments | $ | 62,706 | $ | 15,496 | $ | 24,615 | $ | 12,329 | $ | 10,266 | |||||||||
Asset retirement obligations | 6,107 | — | 2,526 | 431 | 3,150 | ||||||||||||||
Debt principal, interest and fees | 723,686 | 28,310 | 55,698 | 54,571 | 585,107 | ||||||||||||||
Pension obligations | 52,547 | 1,708 | 3,348 | 5,615 | 41,876 | ||||||||||||||
Purchase commitments for inventory | 179,985 | 175,727 | 4,143 | 115 | — | ||||||||||||||
Purchase obligations-other | 23,888 | 22,581 | 462 | 845 | — | ||||||||||||||
Total | $ | 1,048,919 | $ | 243,822 | $ | 90,792 | $ | 73,906 | $ | 640,399 |
Average Contract Rate | U.S. Notional Contract Value | U.S. Fair Value | ||||||||
Non-Designated - For US Dollars: | ||||||||||
Euro | 1.1979 | $ | (109,641 | ) | $ | 1,397 | ||||
Japanese Yen | 109.674 | $ | 25,126 | $ | (591 | ) | ||||
British Pound | 1.2943 | $ | 1,711 | $ | 59 | |||||
South Korean Won | 1,123.4899 | $ | 28,996 | $ | (551 | ) | ||||
Chinese RMB | 6.5985 | $ | 13,744 | $ | (128 | ) | ||||
Singaporean Dollar | 1.3554 | $ | (3,668 | ) | $ | 4 | ||||
Malaysian Ringgit | 4.2705 | $ | 1,260 | $ | 15 |
(i) | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; |
(ii) | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and |
(iii) | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. |
1. | From our main Web page, first click on "Company" and then on "corporate governance." |
2. | Next, click on "Business Conduct Policy." |
2. | Consolidated Financial Statement Schedules |
3. | Exhibits |
Exhibit Numbers | |||
2.1* | Merger Agreement, dated as of March 16, 2016, by and among the Company, Rembrandt Merger Sub Corp. and Rofin-Sinar Technologies Inc. (previously filed as Exhibit 2.1 to Form 8-K filed on March 16, 2016) | ||
3.1* | Restated and Amended Certificate of Incorporation. (Previously filed as Exhibit 3.1 to Form 10-K for the fiscal year ended September 29, 1990) | ||
3.2* | Certificate of Amendment of Restated and Amended Certificate of Incorporation of Coherent, Inc. (Previously filed as Exhibit 3.2 to Form 10-K for the fiscal year ended September 28, 2002) | ||
3.3* | Bylaws. (Previously filed as Exhibit 3.1 to Form 8-K filed on December 12, 2012) | ||
10.1* | Form of Indemnification Agreement. (Previously filed as Exhibit 10.18 to Form 10-K for the fiscal year ended October 2, 2010) | ||
10.2*‡ | Amended and Restated Employee Stock Purchase Plan. (Previously filed as Exhibit 10.1 to Form S-8 filed on June 12, 2012) | ||
10.3*‡ | Change of Control Severance Plan, as amended and restated effective December 11, 2014. (Previously filed as Exhibit 10.1 to Form 8-K filed on December 17, 2014) | ||
10.4*‡ | Variable Compensation Plan, as amended. (Previously filed as Exhibit 10.7 to Form 10-K for the fiscal year ended October 1, 2011) | ||
10.5*‡ | Supplementary Retirement Plan. (Previously filed as Exhibit 10.5 to Form 10-Q for the fiscal quarter ended April 1, 2006) | ||
10.6*‡ | 2005 Deferred Compensation Plan. (Previously filed as Exhibit 10.1 to Form 10-Q for the fiscal quarter ended December 31, 2011) | ||
10.7*‡ | 2011 Equity Incentive Plan. (Previously filed as Exhibit 10.1 to Form S-8 filed on May 6, 2011) | ||
10.8*‡ | 2011 Equity Incentive Plan-Form of RSU Agreement for members of the Board of Directors. (Previously filed as Exhibit 10.1 to Form 10-Q for the fiscal quarter ended July 2, 2011) | ||
10.9*‡ | 2011 Equity Incentive Plan-Form of Option Agreement for members of the Board of Directors. (Previously filed as Exhibit 10.1 to Form 10-Q for the fiscal quarter ended July 2, 2011) | ||
10.10*‡ | 2011 Equity Incentive Plan-Form of Time-Based RSU Agreement. (Previously filed as Exhibit 10.23 to Form 10-K for the fiscal year ended October 1, 2011) | ||
10.11*‡ | 2011 Equity Incentive Plan-Form of Performance RSU Agreement. (Previously filed as Exhibit 10.25 to Form 10-K for the fiscal year ended October 3, 2015) | ||
10.12‡ | |||
10.13*‡ | 2011 Equity Incentive Plan-Form of Global RSU Agreement. (Previously filed as Exhibit 10.1 to Form 10-Q for the fiscal quarter ended December 31, 2016) | ||
10.14*‡ | 2011 Equity Incentive Plan-Form of Global Performance RSU Agreement. (Previously filed as Exhibit 10.2 to Form 10-Q for the fiscal quarter ended December 31, 2016) | ||
10.15*‡ | Offer letter with Kevin Palatnik. (Previously filed as Exhibit 10.3 to Form 10-Q for the fiscal quarter ended January 2, 2016) | ||
10.16*‡ | Offer letter with Thomas Merk. (Previously filed as Exhibit 10.3 to Form 10-Q filed for the fiscal quarter ended December 31, 2016) | ||
10.17*‡ | Managing director agreement with Thomas Merk. (Previously filed as Exhibit 10.4 to Form 10-Q for the fiscal quarter ended December 31, 2016) |
* | These exhibits were previously filed with the Commission as indicated and are incorporated herein by reference. | |
‡ | Identifies management contract or compensatory plans or arrangements required to be filed as an exhibit. | |
** | Furnished herewith. |
COHERENT, INC. | ||
Date: | November 28, 2017 | /s/ JOHN R. AMBROSEO |
By: John R. Ambroseo | ||
President and Chief Executive Officer |
/s/ JOHN R. AMBROSEO | ||
John R. Ambroseo (Director and Principal Executive Officer) | November 28, 2017 Date | |
/s/ KEVIN PALATNIK | ||
Kevin Palatnik (Principal Financial and Accounting Officer) | November 28, 2017 Date | |
/s/ JAY T. FLATLEY | ||
Jay T. Flatley (Director) | November 28, 2017 Date | |
/s/ PAMELA FLETCHER | ||
Pamela Fletcher (Director) | November 28, 2017 Date | |
/s/ SUSAN M. JAMES | ||
Susan M. James (Director) | November 28, 2017 Date | |
/s/ L. WILLIAM KRAUSE | ||
L. William Krause (Director) | November 28, 2017 Date | |
/s/ GARRY W. ROGERSON | ||
Garry W. Rogerson (Director) | November 28, 2017 Date | |
/s/ STEVE SKAGGS | ||
Steve Skaggs (Director) | November 28, 2017 Date | |
/s/ SANDEEP VIJ | ||
Sandeep Vij (Director) | November 28, 2017 Date |
/s/ JOHN R. AMBROSEO | /s/ KEVIN PALATNIK | |
John R. Ambroseo President and Chief Executive Officer | Kevin Palatnik Executive Vice President and Chief Financial Officer |
September 30, 2017 | October 1, 2016 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 443,066 | $ | 354,347 | |||
Restricted cash | 1,097 | — | |||||
Short-term investments | 32,510 | 45,606 | |||||
Accounts receivable—net of allowances of $6,890 and $2,420, respectively | 305,668 | 165,715 | |||||
Inventories | 414,807 | 212,898 | |||||
Prepaid expenses and other assets | 70,268 | 37,073 | |||||
Assets held for sale | 44,248 | — | |||||
Total current assets | 1,311,664 | 815,639 | |||||
Property and equipment, net | 278,850 | 127,443 | |||||
Goodwill | 417,694 | 101,458 | |||||
Intangible assets, net | 190,027 | 13,874 | |||||
Non-current restricted cash | 12,924 | — | |||||
Other assets | 126,641 | 102,734 | |||||
Total assets | $ | 2,337,800 | $ | 1,161,148 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Short-term borrowings and current portion of long-term obligations | $ | 5,078 | $ | 20,000 | |||
Accounts payable | 75,860 | 45,182 | |||||
Income taxes payable | 103,206 | 19,870 | |||||
Other current liabilities | 235,001 | 116,442 | |||||
Total current liabilities | 419,145 | 201,494 | |||||
Long-term obligations | 589,001 | — | |||||
Other long-term liabilities | 166,390 | 48,826 | |||||
Commitments and contingencies (Note 10) | |||||||
Stockholders' equity: | |||||||
Common stock, Authorized—500,000 shares, par value $.01 per share: | |||||||
Outstanding—24,631 shares and 24,324 shares, respectively | 245 | 242 | |||||
Additional paid-in capital | 171,403 | 151,298 | |||||
Accumulated other comprehensive income (loss) | 19,906 | (5,300 | ) | ||||
Retained earnings | 971,710 | 764,588 | |||||
Total stockholders' equity | 1,163,264 | 910,828 | |||||
Total liabilities and stockholders' equity | $ | 2,337,800 | $ | 1,161,148 |
Year Ended | |||||||||||
September 30, 2017 | October 1, 2016 | October 3, 2015 | |||||||||
Net sales | $ | 1,723,311 | $ | 857,385 | $ | 802,460 | |||||
Cost of sales | 973,042 | 475,993 | 467,061 | ||||||||
Gross profit | 750,269 | 381,392 | 335,399 | ||||||||
Operating expenses: | |||||||||||
Research and development | 119,166 | 81,801 | 81,455 | ||||||||
Selling, general and administrative | 292,084 | 169,138 | 149,829 | ||||||||
Gain on business combination | (5,416 | ) | — | (1,316 | ) | ||||||
Impairment of assets held for sale | 2,916 | — | — | ||||||||
Impairment of investment | — | — | 2,017 | ||||||||
Amortization of intangible assets | 16,024 | 2,839 | 2,667 | ||||||||
Total operating expenses | 424,774 | 253,778 | 234,652 | ||||||||
Income from operations | 325,495 | 127,614 | 100,747 | ||||||||
Other income (expense): | |||||||||||
Interest income | 1,090 | 1,143 | 595 | ||||||||
Interest expense | (34,362 | ) | (1,346 | ) | (48 | ) | |||||
Other—net | 9,832 | (4,515 | ) | (1,726 | ) | ||||||
Total other expense, net | (23,440 | ) | (4,718 | ) | (1,179 | ) | |||||
Income from continuing operations before income taxes | 302,055 | 122,896 | 99,568 | ||||||||
Provision for income taxes | 93,411 | 35,394 | 23,159 | ||||||||
Net income from continuing operations | 208,644 | 87,502 | 76,409 | ||||||||
Loss from discontinued operations, net of income taxes | (1,522 | ) | — | — | |||||||
Net income | 207,122 | 87,502 | 76,409 | ||||||||
Basic net income (loss) per share: | |||||||||||
Income per share from continuing operations | $ | 8.52 | $ | 3.62 | $ | 3.09 | |||||
Loss per share from discontinued operations, net of income taxes | $ | (0.06 | ) | $ | — | $ | — | ||||
Net income per share | $ | 8.46 | $ | 3.62 | $ | 3.09 | |||||
Diluted net income (loss) per share: | |||||||||||
Income per share from continuing operations | $ | 8.42 | $ | 3.58 | $ | 3.06 | |||||
Loss per share from discontinued operations, net of income taxes | $ | (0.06 | ) | $ | — | $ | — | ||||
Net income per share | $ | 8.36 | $ | 3.58 | $ | 3.06 | |||||
Shares used in computation: | |||||||||||
Basic | 24,487 | 24,142 | 24,754 | ||||||||
Diluted | 24,777 | 24,415 | 24,992 |
Year Ended | ||||||||||||
September 30, 2017 | October 1, 2016 | October 3, 2015 | ||||||||||
Net income | $ | 207,122 | $ | 87,502 | $ | 76,409 | ||||||
Other comprehensive income (loss): (1) | ||||||||||||
Translation adjustment, net of taxes (2) | 24,923 | 1,731 | (45,624 | ) | ||||||||
Net gain (loss) on derivative instruments, net of taxes (3) | — | (28 | ) | 601 | ||||||||
Changes in unrealized gains (losses) on available-for-sale securities, net of taxes (4) | (3,330 | ) | 2,510 | 828 | ||||||||
Defined benefit pension plans, net of taxes (5) | 3,613 | — | — | |||||||||
Other comprehensive income (loss), net of tax | 25,206 | 4,213 | (44,195 | ) | ||||||||
Comprehensive income | $ | 232,328 | $ | 91,715 | $ | 32,214 |
Common Stock Shares | Common Stock Par Value | Add. Paid-in Capital | Accum. Other Comp. Income (Loss) | Retained Earnings | Total | |||||||||||||||||
Balances, September 27, 2014 | 24,950 | $ | 248 | $ | 184,042 | $ | 34,682 | $ | 600,677 | $ | 819,649 | |||||||||||
Common stock issued under stock plans, net of shares withheld for employee taxes | 322 | 4 | 2,002 | — | — | 2,006 | ||||||||||||||||
Tax impact from employee stock options | — | — | (667 | ) | — | — | (667 | ) | ||||||||||||||
Repurchases of common stock | (1,302 | ) | (14 | ) | (75,013 | ) | — | — | (75,027 | ) | ||||||||||||
Stock-based compensation | — | — | 18,243 | — | — | 18,243 | ||||||||||||||||
Net income | — | — | — | — | 76,409 | 76,409 | ||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | (44,195 | ) | — | (44,195 | ) | ||||||||||||||
Balances, October 3, 2015 | 23,970 | $ | 238 | $ | 128,607 | $ | (9,513 | ) | $ | 677,086 | $ | 796,418 | ||||||||||
Common stock issued under stock plans, net of shares withheld for employee taxes | 354 | 4 | 2,402 | — | — | 2,406 | ||||||||||||||||
Stock-based compensation | — | — | 20,289 | — | — | 20,289 | ||||||||||||||||
Net income | — | — | — | — | 87,502 | 87,502 | ||||||||||||||||
Other comprehensive income, net of tax | — | — | — | 4,213 | — | 4,213 | ||||||||||||||||
Balances, October 1, 2016 | 24,324 | $ | 242 | $ | 151,298 | $ | (5,300 | ) | $ | 764,588 | $ | 910,828 | ||||||||||
Common stock issued under stock plans, net of shares withheld for employee taxes | 307 | 3 | (7,609 | ) | — | — | (7,606 | ) | ||||||||||||||
Tax impact from employee stock options | — | — | 1,628 | — | — | 1,628 | ||||||||||||||||
Purchase of non-controlling interest | — | — | (528 | ) | — | — | (528 | ) | ||||||||||||||
Stock-based compensation | — | — | 26,614 | — | — | 26,614 | ||||||||||||||||
Net income | — | — | — | — | 207,122 | 207,122 | ||||||||||||||||
Other comprehensive income, net of tax | — | — | — | 25,206 | — | 25,206 | ||||||||||||||||
Balances, September 30, 2017 | 24,631 | $ | 245 | $ | 171,403 | $ | 19,906 | $ | 971,710 | $ | 1,163,264 |
COHERENT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | |||||||||||
Year Ended | |||||||||||
September 30, 2017 | October 1, 2016 | October 3, 2015 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 207,122 | $ | 87,502 | $ | 76,409 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 43,689 | 25,905 | 24,815 | ||||||||
Amortization of intangible assets | 60,556 | 8,450 | 8,244 | ||||||||
Gain on business combination | (5,416 | ) | — | (1,316 | ) | ||||||
Impairment of assets held for sale | 2,916 | — | — | ||||||||
Impairment of investment | — | — | 2,017 | ||||||||
Deferred income taxes | (19,752 | ) | (9,770 | ) | 838 | ||||||
Amortization of debt issuance cost | 7,202 | — | — | ||||||||
Stock-based compensation | 26,272 | 20,157 | 18,232 | ||||||||
Excess tax benefits from stock-based compensation arrangements | (1,628 | ) | — | — | |||||||
Non-cash restructuring charges | 6,439 | — | — | ||||||||
Non-cash pension benefit | 5,360 | — | — | ||||||||
Other non-cash expense | 1,443 | 963 | 526 | ||||||||
Changes in assets and liabilities, net of effect of acquisitions: | |||||||||||
Accounts receivable | (52,516 | ) | (17,525 | ) | (10,099 | ) | |||||
Inventories | (11,419 | ) | (55,708 | ) | 6,054 | ||||||
Prepaid expenses and other assets | (4,367 | ) | (4,855 | ) | (2,048 | ) | |||||
Other long-term assets | (2,762 | ) | (1,552 | ) | 802 | ||||||
Accounts payable | 8,276 | 9,735 | 1,000 | ||||||||
Income taxes payable/receivable | 66,820 | 7,384 | (6,759 | ) | |||||||
Other current liabilities | 47,458 | 30,661 | 5,623 | ||||||||
Other long-term liabilities | 3,314 | 3,952 | 120 | ||||||||
Cash flows from discontinued operations | (4,891 | ) | — | — | |||||||
Net cash provided by operating activities | 384,116 | 105,299 | 124,458 | ||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property and equipment | (63,774 | ) | (49,327 | ) | (22,163 | ) | |||||
Proceeds from dispositions of property and equipment | 1,953 | 555 | 1,163 | ||||||||
Purchases of available-for-sale securities | (32,449 | ) | (180,842 | ) | (312,592 | ) | |||||
Proceeds from sales and maturities of available-for-sale securities | 25,218 | 333,058 | 346,059 | ||||||||
Acquisition of businesses, net of cash acquired | (740,481 | ) | — | (9,300 | ) | ||||||
Cash flows from discontinued operations | (755 | ) | — | — | |||||||
Net cash provided by (used in) investing activities | (810,288 | ) | 103,444 | 3,167 |
COHERENT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (In thousands) | |||||||||||
Year Ended | |||||||||||
September 30, 2017 | October 1, 2016 | October 3, 2015 | |||||||||
Cash flows from financing activities: | |||||||||||
Short-term borrowings | $ | 8,863 | $ | 54,792 | $ | 38,729 | |||||
Repayments of short-term borrowings | (30,819 | ) | (34,792 | ) | (38,729 | ) | |||||
Proceeds from long-term borrowings | 740,685 | — | — | ||||||||
Repayments of long-term borrowings | (179,580 | ) | — | — | |||||||
Cash paid to subsidiaries' minority shareholders | (816 | ) | — | — | |||||||
Issuance of common stock under employee stock option and purchase plans | 8,111 | 7,849 | 7,308 | ||||||||
Excess tax benefits from stock-based compensation arrangements | 1,628 | — | — | ||||||||
Repurchase of common stock | — | — | (75,027 | ) | |||||||
Net settlement of restricted common stock | (15,717 | ) | (5,443 | ) | (5,302 | ) | |||||
Debt issuance costs | (26,367 | ) | (5,202 | ) | — | ||||||
Net cash provided by (used in) financing activities | 505,988 | 17,204 | (73,021 | ) | |||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 22,924 | (2,207 | ) | (15,214 | ) | ||||||
Net increase in cash, cash equivalents and restricted cash | 102,740 | 223,740 | 39,390 | ||||||||
Cash, cash equivalents and restricted cash, beginning of year | 354,347 | 130,607 | 91,217 | ||||||||
Cash, cash equivalents and restricted cash, end of year | $ | 457,087 | $ | 354,347 | $ | 130,607 | |||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid during the year for: | |||||||||||
Interest | $ | 27,160 | $ | 149 | $ | 48 | |||||
Income taxes | $ | 57,517 | $ | 43,884 | $ | 29,816 | |||||
Cash received during the year for: | |||||||||||
Income taxes | $ | 2,513 | $ | 6,126 | $ | 3,297 | |||||
Noncash investing and financing activities: | |||||||||||
Unpaid property and equipment purchases | $ | 3,197 | $ | 3,492 | $ | 1,425 | |||||
Use of previously owned equity shares in acquisition | $ | 20,685 | $ | — | $ | — |
September 30, 2017 | October 1, 2016 | October 3, 2015 | |||||||||
Cash and cash equivalents | $ | 443,066 | $ | 354,347 | $ | 130,607 | |||||
Restricted cash, current | 1,097 | — | — | ||||||||
Restricted cash, non-current | 12,924 | — | — | ||||||||
Total cash, cash equivalents, and restricted cash shown in the consolidated statement of cash flows | $ | 457,087 | $ | 354,347 | $ | 130,607 |
Fiscal | |||||||||||
2017 | 2016 | 2015 | |||||||||
Beginning balance | $ | 2,420 | $ | 3,015 | $ | 1,155 | |||||
Additions charged to expenses | 4,190 | 2,084 | 2,716 | ||||||||
Accruals related to acquisitions | 4,390 | — | — | ||||||||
Deductions from reserves | (4,110 | ) | (2,679 | ) | (856 | ) | |||||
Ending balance | $ | 6,890 | $ | 2,420 | $ | 3,015 |
Fiscal year-end | |||||||
2017 | 2016 | ||||||
Purchased parts and assemblies | $ | 114,285 | $ | 56,824 | |||
Work-in-process | 159,784 | 88,391 | |||||
Finished goods | 140,738 | 67,683 | |||||
Total inventories | $ | 414,807 | $ | 212,898 |
Fiscal year-end | |||||||||
2017 | 2016 | Useful Life | |||||||
Land | $ | 18,550 | $ | 7,523 | |||||
Buildings and improvements | 159,111 | 85,908 | 5-40 years | ||||||
Equipment, furniture and fixtures | 335,953 | 248,741 | 3-10 years | ||||||
Leasehold improvements | 51,300 | 38,979 | 1-15 years | ||||||
564,914 | 381,151 | ||||||||
Accumulated depreciation and amortization | (286,064 | ) | (253,708 | ) | |||||
Property and equipment, net | $ | 278,850 | $ | 127,443 |
Asset retirement liability as of October 3, 2015 | $ | 2,654 | |
Adjustment to asset retirement obligations recognized | (14 | ) | |
Accretion recognized | 71 | ||
Changes due to foreign currency exchange | 85 | ||
Asset retirement liability as of October 1, 2016 | 2,796 | ||
Payment of asset retirement obligations | (175 | ) | |
Adjustment to asset retirement obligations recognized | 213 | ||
Additional asset retirement obligations due to acquisition | 2,325 | ||
Accretion recognized | 151 | ||
Changes due to foreign currency exchange | 72 | ||
Asset retirement liability as of September 30, 2017 | $ | 5,382 |
Fiscal | |||||||||||
2017 | 2016 | 2015 | |||||||||
Beginning balance | $ | 15,949 | $ | 15,308 | $ | 16,961 | |||||
Additions related to current period sales | 41,365 | 21,859 | 20,959 | ||||||||
Warranty costs incurred in the current period | (31,825 | ) | (21,393 | ) | (21,922 | ) | |||||
Accruals resulting from acquisitions | 14,314 | — | 215 | ||||||||
Adjustments to accruals related to foreign exchange and other | (3,654 | ) | 175 | (905 | ) | ||||||
Ending balance | $ | 36,149 | $ | 15,949 | $ | 15,308 |
Fiscal | |||||||||||
2017 | 2016 | 2015 | |||||||||
Weighted average shares outstanding—basic | 24,487 | 24,142 | 24,754 | ||||||||
Dilutive effect of employee stock awards | 290 | 273 | 238 | ||||||||
Weighted average shares outstanding—diluted | 24,777 | 24,415 | 24,992 | ||||||||
Net income from continuing operations | $ | 208,644 | $ | 87,502 | $ | 76,409 | |||||
Loss from discontinued operations, net of income taxes | (1,522 | ) | — | — | |||||||
Net income | $ | 207,122 | $ | 87,502 | $ | 76,409 |
Cash consideration to Rofin's shareholders | $ | 904,491 | |
Cash settlement paid for Rofin employee stock options | 15,290 | ||
Total cash payments to Rofin shareholders and option holders | 919,781 | ||
Add: fair value of previously owned Rofin shares | 20,685 | ||
Less: post-merger stock compensation expense | (4,152 | ) | |
Total purchase price to allocate | $ | 936,314 |
Cash, cash equivalents and short-term investments | $ | 163,425 | |
Accounts receivable | 90,877 | ||
Inventory | 189,869 | ||
Prepaid expenses and other assets | 15,362 | ||
Assets held for sale, current | 29,545 | ||
Property and equipment | 125,723 | ||
Other assets | 31,854 | ||
Intangible assets: | |||
Existing technology | 169,029 | ||
In-process research and development | 6,000 | ||
Backlog | 5,600 | ||
Customer relationships | 39,209 | ||
Trademarks | 5,699 | ||
Patents | 300 | ||
Goodwill | 298,170 | ||
Current portion of long-term obligations | (3,633 | ) | |
Current liabilities held for sale | (7,001 | ) | |
Accounts payable | (21,314 | ) | |
Other current liabilities | (68,242 | ) | |
Long-term debt | (11,641 | ) | |
Other long-term liabilities | (122,517 | ) | |
Total | $ | 936,314 |
In Thousands | Fiscal 2017 | Fiscal 2016 | |||||
Total net sales | $ | 1,798,539 | $ | 1,339,202 | |||
Net income | $ | 233,012 | $ | 5,813 | |||
Net income per share: | |||||||
Basic | $ | 9.52 | $ | 0.24 | |||
Diluted | $ | 9.40 | $ | 0.24 |
• | Incremental amortization and depreciation expense related to the estimated fair value of identifiable intangible assets and property, plant and equipment from the purchase price allocation. |
• | The exclusion of amortization of inventory step-up to its estimated fair value from fiscal 2017 and the addition of the amortization to fiscal 2016. |
• | The exclusion of revenue adjustments as a result of the reduction in customer deposits and deferred revenue related to its estimated fair value from fiscal 2017 and the addition of these adjustments to fiscal 2016. |
• | Incremental interest expense and amortization of debt issuance costs related to our Euro Term Loan and Revolving Credit Facility (as defined in Note 9, "Borrowings"). |
• | The exclusion of acquisition costs incurred by both Coherent and Rofin from fiscal 2017 and the addition of these costs to fiscal 2016. |
• | The exclusion of a stock-based compensation charge related to the acceleration of Rofin options from fiscal 2017 and the addition of this charge to fiscal 2016. |
• | The exclusion of a gain on business combination for our previously owned shares of Rofin from fiscal 2017 and the addition of this gain to fiscal 2016. |
• | The exclusion of a foreign exchange gain on forward contracts related to our debt commitment and debt issuance from fiscal 2017 and the addition of this gain to fiscal 2016. |
• | The estimated tax impact of the above adjustments. |
Tangible assets | $ | 1,048 | |
Goodwill | 1,552 | ||
Intangible assets: | |||
Existing technology | 800 | ||
Customer lists | 1,600 | ||
Total | $ | 5,000 |
Tangible assets: | |||
Inventories | $ | 2,263 | |
Accounts receivable | 2,240 | ||
Prepaid expenses and other assets | 1,132 | ||
Property and equipment | 2,451 | ||
Liabilities assumed | (1,702 | ) | |
Deferred tax liabilities | (768 | ) | |
Gain on business combination | (1,316 | ) | |
Total | $ | 4,300 |
Aggregate Fair Value | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Aggregate Fair Value | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | |||||||||||||||||||
Fiscal year-end 2017 | Fiscal year-end 2016 | |||||||||||||||||||||||
(Level 1) | (Level 2) | (Level 1) | (Level 2) | |||||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Cash equivalents: | ||||||||||||||||||||||||
Money market fund deposits | $ | 61,811 | $ | 61,811 | $ | — | $ | 237,142 | $ | 237,142 | $ | — | ||||||||||||
U.S. Treasury and agency obligations (2) | 14,986 | — | 14,986 | — | — | — | ||||||||||||||||||
Commercial paper (2) | 21,991 | — | 21,991 | — | — | — | ||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||
U.S. Treasury and agency obligations (2) | 21,087 | — | 21,087 | 125 | — | 125 | ||||||||||||||||||
Corporate notes and obligations (2) | 11,423 | — | 11,423 | — | — | — | ||||||||||||||||||
Commercial paper (2) | — | — | — | 24,999 | — | 24,999 | ||||||||||||||||||
Equity securities (1) | — | — | — | 20,482 | 20,482 | — | ||||||||||||||||||
Prepaid and other assets: | ||||||||||||||||||||||||
Foreign currency contracts (3) | 1,270 | — | 1,270 | 889 | — | 889 | ||||||||||||||||||
Money market fund deposits — Deferred comp and supplemental plan | 285 | 285 | — | — | — | — | ||||||||||||||||||
Mutual funds — Deferred comp and supplemental plan (4) | 17,585 | 17,585 | — | 14,399 | 14,399 | — | ||||||||||||||||||
Total | $ | 150,438 | $ | 79,681 | $ | 70,757 | $ | 298,036 | $ | 272,023 | $ | 26,013 | ||||||||||||
Liabilities: | ||||||||||||||||||||||||
Other current liabilities: | ||||||||||||||||||||||||
Foreign currency contracts (3) | (1,475 | ) | — | (1,475 | ) | (3,100 | ) | — | (3,100 | ) | ||||||||||||||
Total | $ | 148,963 | $ | 79,681 | $ | 69,282 | $ | 294,936 | $ | 272,023 | $ | 22,913 |
(1) | Valuations are based upon quoted market prices. |
(2) | Valuations are based upon quoted market prices in active markets involving similar assets. The market inputs used to value these instruments generally consist of market yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. Pricing sources include industry standard data providers, security master files from large financial institutions, and other third party sources which are input into a distribution-curve-based algorithm to determine a daily market value. This creates a “consensus price” or a weighted average price for each security. |
(3) | The principal market in which we execute our foreign currency contracts is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants usually are large commercial banks. Our foreign currency contracts’ valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. See Note 6, "Derivative Instruments and Hedging Activities". |
(4) | The fair value of mutual funds is determined based on quoted market prices. Securities traded on a national exchange are stated at the last reported sales price on the day of valuation; other securities traded in over-the-counter markets and listed securities for which no sale was reported on that date are stated as the last quoted bid price. |
Fiscal 2017 year-end | |||||||||||||||
Cost Basis | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||
Cash and cash equivalents | $ | 443,066 | $ | — | $ | — | $ | 443,066 | |||||||
Short-term investments: | |||||||||||||||
Available-for-sale securities: | |||||||||||||||
U.S. Treasury and agency obligations | $ | 21,074 | $ | 13 | $ | — | $ | 21,087 | |||||||
Corporate notes and obligations | 11,390 | 34 | (1 | ) | 11,423 | ||||||||||
Total short-term investments | $ | 32,464 | $ | 47 | $ | (1 | ) | $ | 32,510 |
Fiscal 2016 year-end | |||||||||||||||
Cost Basis | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||
Cash and cash equivalents | $ | 354,347 | $ | — | $ | — | $ | 354,347 | |||||||
Short-term investments: | |||||||||||||||
Available-for-sale securities: | |||||||||||||||
Commercial paper | $ | 24,999 | $ | — | $ | — | $ | 24,999 | |||||||
U.S. Treasury and agency obligations | 125 | — | — | 125 | |||||||||||
Equity securities | 15,269 | 5,213 | — | 20,482 | |||||||||||
Total short-term investments | $ | 40,393 | $ | 5,213 | $ | — | $ | 45,606 |
Fiscal year-end | |||||||||||||||
2017 | 2016 | ||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | ||||||||||||
Investments in available-for-sale debt securities due in less than one year | $ | 30,214 | $ | 30,251 | $ | 25,124 | $ | 25,124 | |||||||
Investments in available-for-sale debt securities due in one to five years (1) | $ | 2,250 | $ | 2,259 | $ | — | $ | — |
U.S. Notional Contract Value | U.S. Fair Value | ||||||||||||||
September 30, 2017 | October 1, 2016 | September 30, 2017 | October 1, 2016 | ||||||||||||
Euro currency hedge contracts | |||||||||||||||
Purchase | $ | 109,641 | $ | 91,108 | $ | (1,397 | ) | $ | 162 | ||||||
Sell | $ | — | $ | (750,454 | ) | $ | — | $ | (2,234 | ) | |||||
South Korean Won currency hedge contracts | |||||||||||||||
Purchase | $ | — | $ | 31,248 | $ | — | $ | 413 | |||||||
Sell | $ | (28,996 | ) | $ | (37,929 | ) | $ | 551 | $ | (152 | ) | ||||
Chinese RMB currency hedge contracts | |||||||||||||||
Sell | $ | (13,744 | ) | $ | (25,237 | ) | $ | 128 | $ | (91 | ) | ||||
Japanese Yen currency hedge contracts | |||||||||||||||
Sell | $ | (25,126 | ) | $ | (36,450 | ) | $ | 591 | $ | (343 | ) | ||||
Other foreign currency hedge contracts | |||||||||||||||
Purchase | $ | 3,668 | $ | 6,033 | $ | (4 | ) | $ | (4 | ) | |||||
Sell | $ | (2,971 | ) | $ | (1,775 | ) | $ | (74 | ) | $ | 38 |
Industrial Lasers & Systems (1) | OEM Laser Sources (2) | Total | |||||||||
Balance as of October 3, 2015 | $ | 4,443 | $ | 97,374 | $ | 101,817 | |||||
Additions (see Note 3) | — | 434 | 434 | ||||||||
Translation adjustments and other | — | (793 | ) | (793 | ) | ||||||
Balance as of October 1, 2016 | 4,443 | 97,015 | 101,458 | ||||||||
Additions (see Note 3) | 296,502 | 1,668 | 298,170 | ||||||||
Translation adjustments and other | 14,571 | 3,495 | 18,066 | ||||||||
Balance as of September 30, 2017 | $ | 315,516 | $ | 102,178 | $ | 417,694 |
Fiscal year-end 2017 | Fiscal year-end 2016 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | ||||||||||||||||||
Existing technology | $ | 208,341 | $ | (66,793 | ) | $ | 141,548 | $ | 70,664 | $ | (61,133 | ) | $ | 9,531 | |||||||||
Patents | 330 | (58 | ) | 272 | — | — | — | ||||||||||||||||
Customer lists | 51,687 | (14,259 | ) | 37,428 | 15,968 | (11,658 | ) | 4,310 | |||||||||||||||
Trade name | 6,171 | (1,824 | ) | 4,347 | 384 | (351 | ) | 33 | |||||||||||||||
In-process research and development | 6,432 | — | 6,432 | — | — | — | |||||||||||||||||
Total | $ | 272,961 | $ | (82,934 | ) | $ | 190,027 | $ | 87,016 | $ | (73,142 | ) | $ | 13,874 |
Estimated Amortization Expense | |||
2018 | $ | 56,655 | |
2019 | 53,238 | ||
2020 | 45,799 | ||
2021 | 14,141 | ||
2022 | 3,695 | ||
Thereafter | 10,067 | ||
Total (Excluding IPR&D) | $ | 183,595 |
Fiscal year-end | |||||||
2017 | 2016 | ||||||
Prepaid and refundable income taxes | $ | 28,712 | $ | 12,415 | |||
Other taxes receivable | 15,327 | 10,538 | |||||
Prepaid expenses and other assets | 26,229 | 14,120 | |||||
Total prepaid expenses and other assets | $ | 70,268 | $ | 37,073 |
Fiscal year-end | |||||||
2017 | 2016 | ||||||
Assets related to deferred compensation arrangements (see Note 12) | $ | 31,008 | $ | 26,356 | |||
Deferred tax assets | 82,691 | 67,157 | |||||
Other assets | 12,942 | 9,221 | |||||
Total other assets | $ | 126,641 | $ | 102,734 |
Fiscal year-end | |||||||
2017 | 2016 | ||||||
Accrued payroll and benefits | $ | 72,327 | $ | 47,506 | |||
Accrued expenses and other | 34,215 | 18,356 | |||||
Warranty reserve (see Note 2) | 36,149 | 15,949 | |||||
Current liabilities held for sale (see Note 19) | 7,021 | — | |||||
Customer deposits | 20,052 | 1,597 | |||||
Deferred revenue | 65,237 | 33,034 | |||||
Total other current liabilities | $ | 235,001 | $ | 116,442 |
Fiscal year-end | |||||||
2017 | 2016 | ||||||
Long-term taxes payable | $ | 35,866 | $ | 2,951 | |||
Deferred compensation (see Note 12) | 34,160 | 28,313 | |||||
Deferred tax liabilities | 45,373 | 1,468 | |||||
Deferred revenue | 4,765 | 4,069 | |||||
Asset retirement obligations liability (see Note 2) | 5,382 | 2,796 | |||||
Defined benefit plan liabilities (see Note 13) | 39,454 | 8,123 | |||||
Other long-term liabilities | 1,390 | 1,106 | |||||
Total other long-term liabilities | $ | 166,390 | $ | 48,826 |
September 30, 2017 | October 1, 2016 | ||||||
Current portion of Euro Term Loan (1) | $ | 3,230 | $ | — | |||
1.3% Term loan due 2024 | 1,477 | — | |||||
1.0% State of Connecticut term loan due 2023 | 371 | — | |||||
Line of credit borrowings | — | 20,000 | |||||
Total short-term borrowings and current portion of long-term obligations | $ | 5,078 | $ | 20,000 |
September 30, 2017 | October 1, 2016 | ||||||
Euro Term Loan due 2024 (1) | $ | 578,356 | $ | — | |||
1.3% Term loan due 2024 | 8,865 | — | |||||
1.0% State of Connecticut term loan due 2023 | 1,780 | — | |||||
Total long-term obligations | $ | 589,001 | $ | — |
Amount | |||
2018 | $ | 9,767 | |
2019 | 9,767 | ||
2020 | 9,768 | ||
2021 | 9,768 | ||
2022 | 9,768 | ||
Thereafter | 570,376 | ||
Total | $ | 619,214 |
Amount | |||
2018 | $ | 15,496 | |
2019 | 14,429 | ||
2020 | 10,186 | ||
2021 | 7,079 | ||
2022 | 5,250 | ||
Thereafter through 2027 | 10,266 | ||
Total | $ | 62,706 |
Fiscal year-end | |||||||
2017 | 2016 | ||||||
Cash surrender value of life insurance contracts | $ | 13,995 | $ | 13,636 | |||
Fair value of mutual and money market funds | 17,870 | 14,399 | |||||
Total assets | $ | 31,865 | $ | 28,035 | |||
Total assets, included in: | |||||||
Prepaid expenses and other assets | $ | 856 | $ | 1,679 | |||
Other assets | 31,009 | 26,356 | |||||
Total assets | $ | 31,865 | $ | 28,035 |
Fiscal year-end | |||||||
2017 | 2016 | ||||||
Total deferred compensation liability, included in: | |||||||
Other current liabilities | $ | 856 | $ | 1,679 | |||
Other long-term liabilities | 34,160 | 28,313 | |||||
Total deferred compensation liability | $ | 35,016 | $ | 29,992 |
• | The service based restricted stock awards generally vest within three years from the date of grant. |
• | The service based restricted stock unit awards are generally subject to annual vesting over three years from the date of grant. |
• | The performance restricted stock unit award grants are generally either subject to annual vesting over three years from the date of grant or subject to a single vest measurement three years from the date of grant, depending upon achievement of performance measurements based on the performance of the Company's total shareholder returns (as defined in the plan) compared with the performance of the Russell 1000 Index. |
Employee Stock Purchase Plans | ||||||||||||
Fiscal | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Expected life in years | 0.5 | 0.5 | 0.5 | |||||||||
Expected volatility | 33.0 | % | 35.0 | % | 28.6 | % | ||||||
Risk-free interest rate | 0.7 | % | 0.3 | % | 0.1 | % | ||||||
Weighted average fair value per share | $ | 39.40 | $ | 18.59 | $ | 14.39 |
Fiscal | |||||||||||
2017 | 2016 | 2015 | |||||||||
Risk-free interest rate | 1.3 | % | 1.2 | % | 1.0 | % | |||||
Volatility | 31.0 | % | 27.0 | % | 28.7 | % | |||||
Weighted average fair value | $ | 163.17 | $ | 74.48 | $ | 70.57 |
Fiscal | |||||||||||
2017 | 2016 | 2015 | |||||||||
Cost of sales | $ | 3,541 | $ | 2,558 | $ | 2,530 | |||||
Research and development | 2,973 | 2,268 | 1,946 | ||||||||
Selling, general and administrative | 23,911 | 15,331 | 13,756 | ||||||||
Income tax benefit | (7,073 | ) | (4,896 | ) | (4,247 | ) | |||||
$ | 23,352 | $ | 15,261 | $ | 13,985 |
Time Based Restricted Stock Units | Performance Restricted Stock Units | ||||||||||||
Number of Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||
Nonvested stock at September 27, 2014 | 390 | $ | 58.66 | 229 | $ | 61.46 | |||||||
Granted | 237 | 64.84 | 51 | 70.57 | |||||||||
Vested (1) | (219 | ) | 53.62 | (38 | ) | 53.46 | |||||||
Forfeited | (14 | ) | 59.06 | (43 | ) | 53.46 | |||||||
Nonvested stock at October 3, 2015 | 394 | $ | 65.17 | 199 | $ | 67.09 | |||||||
Granted | 270 | 64.42 | 65 | 74.48 | |||||||||
Vested(1) | (192 | ) | 61.11 | (57 | ) | 48.48 | |||||||
Forfeited | (13 | ) | 63.89 | (38 | ) | 48.48 | |||||||
Nonvested stock at October 1, 2016 | 459 | $ | 66.47 | 169 | $ | 74.10 | |||||||
Granted | 186 | 131.54 | 115 | 163.17 | |||||||||
Vested(1) | (229 | ) | 66.02 | (104 | ) | 77.10 | |||||||
Forfeited | (17 | ) | 84.79 | (4 | ) | 70.57 | |||||||
Nonvested stock at September 30, 2017 | 399 | $ | 118.83 | 176 | $ | 105.34 |
(1) | Service-based restricted stock units vested during each fiscal year. Performance-based restricted stock units included at 100% of target goal; under the terms of the awards, the recipient may earn between 0% and 200% of the award. |
Fiscal | |||||||
2017 | 2016 | ||||||
Service cost | $ | 2,077 | $ | 872 | |||
Interest cost | 1,086 | 97 | |||||
Expected return on plan assets | (736 | ) | — | ||||
Recognized net actuarial (gain) loss | (236 | ) | 993 | ||||
Foreign exchange impacts | (6 | ) | 127 | ||||
Net periodic pension cost | $ | 2,185 | $ | 2,089 |
Fiscal 2017 | |||
Change in benefit obligation: | |||
Projected benefit obligation at beginning of year (1) | $ | 8,621 | |
Business combinations and acquisitions | 46,361 | ||
Service cost | 2,077 | ||
Interest cost | 1,086 | ||
Actuarial gains | (141 | ) | |
Assumption change | (3,597 | ) | |
Experience gain | (1,502 | ) | |
Foreign exchange rate impacts | 1,685 | ||
Benefits paid - total | (2,043 | ) | |
Projected benefit obligation at end of year | $ | 52,547 | |
Projected benefit obligation at end of year: | |||
U.S. plans | $ | 17,543 | |
Foreign plans | 35,004 | ||
Projected benefit obligation at end of year | $ | 52,547 | |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | $ | — | |
Business combinations and acquisitions | 11,121 | ||
Actual return on plan assets | 1,092 | ||
Employer contributions | — | ||
Benefits paid - funded plan | (357 | ) | |
Fair value of plan assets at end of year | $ | 11,856 | |
Fair value of plan assets at end of year: | |||
U.S. plans | $ | 11,856 | |
Foreign plans | — | ||
Fair value of plan assets at end of year | 11,856 | ||
Unfunded status at end of year | $ | (40,691 | ) |
Amounts recognized in the consolidated balance sheet: | |||
Accrued benefit liability - current | $ | (1,238 | ) |
Accrued benefit liability - non current | (39,454 | ) | |
Accumulated other comprehensive gain (pre-tax) | (5,360 | ) |
Fiscal year-end | |||
2017 | |||
Projected benefit obligation | $ | 52,547 | |
Accumulated benefit obligation | 47,798 | ||
Fair value of plan assets | 11,856 |
Fiscal 2017 | ||
Discount rate: | ||
U.S. | 3.6 | % |
Foreign | 1.7 | % |
Expected return on plan assets: | ||
U.S. | 6.6 | % |
Foreign | — | % |
Rate of compensation increase | ||
U.S. | 3.0 | % |
Foreign | 2.0 | % |
Amount | |||
2018 | $ | 1,708 | |
2019 | 1,593 | ||
2020 | 1,755 | ||
2021 | 2,296 | ||
2022 | 3,319 | ||
2023-2027 | 14,220 | ||
Total | $ | 24,891 |
Fiscal 2017 | |||||
Target Allocation | Allocation | ||||
Equity securities | 50 | % | 56 | % | |
Debt securities | 50 | % | 44 | % | |
Total plan assets | 100 | % | 100 | % |
Asset categories | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Equity securities | |||||||||||||||
Small cap | $ | — | $ | 304 | $ | — | $ | 304 | |||||||
Mid cap | — | 621 | — | 621 | |||||||||||
Large cap | — | 2,382 | — | 2,382 | |||||||||||
Total market stock | — | 1,106 | — | 1,106 | |||||||||||
International | — | 1,897 | — | 1,897 | |||||||||||
Emerging markets | — | 342 | — | 342 | |||||||||||
Debt securities | — | ||||||||||||||
Bonds and mortgages | — | 4,031 | — | 4,031 | |||||||||||
Inflation protected | — | 555 | — | 555 | |||||||||||
High yield | — | 618 | — | 618 | |||||||||||
Money market | — | — | — | — | |||||||||||
Total plan assets | $ | — | $ | 11,856 | $ | — | $ | 11,856 |
Fiscal | |||||||||||
2017 | 2016 | 2015 | |||||||||
Foreign exchange gain (loss) | $ | 4,656 | $ | (6,310 | ) | $ | (1,396 | ) | |||
Gain (loss) on deferred compensation investments, net (Note 12) | 4,955 | 1,738 | (351 | ) | |||||||
Other | 221 | 57 | 21 | ||||||||
Other—net | $ | 9,832 | $ | (4,515 | ) | $ | (1,726 | ) |
Fiscal | |||||||||||
2017 | 2016 | 2015 | |||||||||
Currently payable: | |||||||||||
Federal | $ | 5,617 | $ | (3,069 | ) | $ | (932 | ) | |||
State | 1,022 | 89 | 108 | ||||||||
Foreign | 116,022 | 48,039 | 32,189 | ||||||||
122,661 | 45,059 | 31,365 | |||||||||
Deferred and other: | |||||||||||
Federal | 1,413 | (8,131 | ) | (4,327 | ) | ||||||
State | (153 | ) | (439 | ) | (200 | ) | |||||
Foreign | (30,510 | ) | (1,095 | ) | (3,679 | ) | |||||
(29,250 | ) | (9,665 | ) | (8,206 | ) | ||||||
Provision for income taxes | $ | 93,411 | $ | 35,394 | $ | 23,159 |
Fiscal | |||||||||||
2017 | 2016 | 2015 | |||||||||
United States | $ | 25,540 | $ | (44,029 | ) | $ | (13,293 | ) | |||
Foreign | 276,515 | 166,925 | 112,861 | ||||||||
Income from continuing operations before income taxes | $ | 302,055 | $ | 122,896 | $ | 99,568 |
Fiscal | |||||||||||
2017 | 2016 | 2015 | |||||||||
Federal statutory tax expense | $ | 105,719 | $ | 43,015 | $ | 34,849 | |||||
Valuation allowance | 4,454 | 1,441 | 635 | ||||||||
Foreign taxes at rates less than U.S. rates, net | (12,346 | ) | (5,642 | ) | (10,558 | ) | |||||
Stock-based compensation | 3,969 | 2,161 | 2,150 | ||||||||
State income taxes, net of federal income tax benefit | 398 | (198 | ) | (38 | ) | ||||||
Research and development credit | (7,884 | ) | (4,408 | ) | (2,979 | ) | |||||
Deferred compensation | (1,022 | ) | (428 | ) | (133 | ) | |||||
Release of foreign unrecognized tax benefits | (538 | ) | (4,961 | ) | (39 | ) | |||||
Release of interest accrued for unrecognized tax benefits | (78 | ) | (1,508 | ) | (38 | ) | |||||
Reversal of Competent Authority | — | 4,328 | — | ||||||||
Other | 739 | 1,594 | (690 | ) | |||||||
Provision for income taxes | $ | 93,411 | $ | 35,394 | $ | 23,159 | |||||
Effective tax rate | 30.9 | % | 28.8 | % | 23.3 | % |
Fiscal year-end | |||||||
2017 | 2016 | ||||||
Deferred tax assets: | |||||||
Reserves and accruals not currently deductible | $ | 52,803 | $ | 34,800 | |||
Operating loss carryforwards and tax credits | 61,371 | 52,213 | |||||
Deferred service revenue | 2,987 | 2,186 | |||||
Inventory capitalization | 7,116 | 5,001 | |||||
Stock-based compensation | 7,839 | 6,428 | |||||
Competent authority offset to transfer pricing tax reserves | 12,948 | 1,437 | |||||
Depreciation and amortization | — | 1,043 | |||||
Other | 4,567 | 5,277 | |||||
Total gross deferred tax assets | 149,631 | 108,385 | |||||
Valuation allowance | (28,745 | ) | (17,642 | ) | |||
Total net deferred tax assets | 120,886 | 90,743 | |||||
Deferred tax liabilities: | |||||||
Gain on issuance of stock by subsidiary | 22,378 | 20,781 | |||||
Depreciation and amortization | 60,956 | — | |||||
Accumulated translation adjustment | 234 | 4,273 | |||||
Total gross deferred tax liabilities | 83,568 | 25,054 | |||||
Net deferred tax assets | $ | 37,318 | $ | 65,689 |
Fiscal year-end | |||||||
2017 | 2016 | ||||||
Non-current deferred income tax assets | $ | 82,691 | $ | 67,157 | |||
Non-current deferred income tax liabilities | (45,373 | ) | (1,468 | ) | |||
Net deferred tax assets | $ | 37,318 | $ | 65,689 |
• | Foreign gross net operating loss carryforwards are $48.5 million, of which $39.9 million have no expiration date and $8.6 million have various expiration dates beginning in fiscal year 2018. Among the total of $48.5 million foreign net operating loss carryforwards, a valuation allowance of $8.9 million has been provided for certain jurisdictions since the recovery of the carryforwards are uncertain. Federal and certain state gross net operating loss carryforwards are $9.2 million and $30.8 million, respectively, which were acquired from our Rofin-Sinar acquisition. A full valuation allowance against certain other state net operating losses has been recorded. California gross net operating loss carryforward is $0.3 million and is scheduled to expire in fiscal year 2032. The tax benefit relating to approximately $0.3 million of the California net operating loss carryforward is off-balance sheet. |
• | Federal R&D credit carryforwards of $30.2 million are scheduled to expire beginning in fiscal year 2024. The tax benefit relating to approximately $4.9 million of the federal tax credit carryforwards is off-balance sheet. California R&D credit carryforwards of $27.2 million have no expiration date. The tax benefit relating to approximately $1.4 million of the state tax credit carryforwards is off-balance sheet with a full valuation allowance. The total of $22.1 million valuation allowance, before federal benefit, has been recorded against California R&D credit carryforwards since the recovery of the carryforwards are uncertain. Other states R&D credit carryforwards of $3.2 million are scheduled to expire beginning in fiscal year 2018. A valuation allowance totaling $2.7 million, before federal benefit, has been recorded against certain state R&D credit carryforwards since the recovery of the carryforwards is uncertain. |
• | Federal foreign tax credit carryforwards of $14.9 million are scheduled to expire beginning in fiscal year 2018. The tax benefit relating to approximately $14.9 million of the federal foreign tax credit carryforwards is off-balance sheet. |
Fiscal year-end | |||||||||||
2017 | 2016 | 2015 | |||||||||
Balance as of the beginning of the year | $ | 20,442 | $ | 22,538 | $ | 21,893 | |||||
Increase related to acquisitions | 25,151 | — | — | ||||||||
Tax positions related to current year: | |||||||||||
Additions | 1,326 | 2,468 | 311 | ||||||||
Reductions | — | — | — | ||||||||
Tax positions related to prior year: | |||||||||||
Additions | 4,951 | 424 | 855 | ||||||||
Reductions | (65 | ) | (3,239 | ) | — | ||||||
Settlements | — | (1,655 | ) | — | |||||||
Lapses in statutes of limitations | (610 | ) | (94 | ) | (521 | ) | |||||
Decrease in unrecognized tax benefits based on audit results | (5,217 | ) | — | — | |||||||
Foreign currency revaluation adjustment | 1,588 | — | — | ||||||||
Balance as of end of year | $ | 47,566 | $ | 20,442 | $ | 22,538 |
United States—Federal | 2011—forward |
United States—Various States | 2013—forward |
Netherlands | 2012—forward |
Germany | 2011—forward |
Japan | 2011—forward |
South Korea | 2012—forward |
United Kingdom | 2016—forward |
Fiscal | |||||||||||
2017 | 2016 | 2015 | |||||||||
Net sales: | |||||||||||
OEM Laser Sources | $ | 1,143,620 | $ | 722,517 | $ | 655,854 | |||||
Industrial Lasers & Systems | 579,691 | 134,868 | 146,606 | ||||||||
Total net sales | $ | 1,723,311 | $ | 857,385 | $ | 802,460 | |||||
Income (loss) from continuing operations: | |||||||||||
OEM Laser Sources | $ | 432,839 | $ | 197,923 | $ | 152,660 | |||||
Industrial Lasers & Systems | (26,447 | ) | (13,869 | ) | (10,027 | ) | |||||
Corporate and other | (80,897 | ) | (56,440 | ) | (41,886 | ) | |||||
Total income from continuing operations | $ | 325,495 | $ | 127,614 | $ | 100,747 | |||||
Total other expense, net | (23,440 | ) | (4,718 | ) | (1,179 | ) | |||||
Income from continuing operations before income taxes | $ | 302,055 | $ | 122,896 | $ | 99,568 |
Fiscal | |||||||||||
SALES | 2017 | 2016 | 2015 | ||||||||
United States | $ | 297,699 | $ | 204,963 | $ | 213,483 | |||||
Foreign countries: | |||||||||||
South Korea | 628,369 | 187,908 | 195,589 | ||||||||
China | 162,316 | 63,050 | 57,548 | ||||||||
Europe, other | 162,162 | 55,351 | 53,027 | ||||||||
Japan | 154,985 | 193,418 | 135,674 | ||||||||
Germany | 145,835 | 71,427 | 75,474 | ||||||||
Asia-Pacific, other | 107,713 | 36,364 | 28,036 | ||||||||
Rest of World | 64,232 | 44,904 | 43,629 | ||||||||
Total foreign countries sales | 1,425,612 | 652,422 | 588,977 | ||||||||
Total sales | $ | 1,723,311 | $ | 857,385 | $ | 802,460 |
Fiscal year-end | |||||||
LONG-LIVED ASSETS | 2017 | 2016 | |||||
United States | $ | 120,116 | $ | 92,771 | |||
Foreign countries: | |||||||
Germany | 159,483 | 55,786 | |||||
Europe, other | 18,681 | 2,478 | |||||
Asia-Pacific | 24,517 | 11,981 | |||||
Total foreign countries long-lived assets | 202,681 | 70,245 | |||||
Total long-lived assets | $ | 322,797 | $ | 163,016 |
Severance Related | Asset Write-Offs | Other | Total | ||||||||||||
Balances, October 1, 2016 | $ | — | $ | — | — | $ | — | ||||||||
Provision | 5,143 | 6,439 | 742 | 12,324 | |||||||||||
Payments and other | (3,842 | ) | (6,439 | ) | (742 | ) | (11,023 | ) | |||||||
Balances, September 30, 2017 | $ | 1,301 | $ | — | $ | — | $ | 1,301 |
Fiscal | |||
2017 | |||
Net sales | $ | 26,996 | |
Cost of sales | 19,353 | ||
Operating expenses | 9,002 | ||
Other expense | 220 | ||
Income tax benefit | (57 | ) | |
Net loss from discontinued operations | $ | (1,522 | ) |
Discontinued Operations | |||
Cash | $ | 33 | |
Accounts receivable | 6,931 | ||
Inventories | 5,586 | ||
Prepaid expenses and other assets | 607 | ||
Property and equipment | 10,705 | ||
Intangible assets | 11,400 | ||
Total current assets held for sale | $ | 35,262 | |
Accounts payable | $ | 1,129 | |
Other current liabilities | 4,875 | ||
Total current liabilities held for sale | $ | 6,004 |
Continuing Operations | |||
Accounts receivable | $ | 1,668 | |
Inventories | 5,202 | ||
Prepaid expenses and other assets | 472 | ||
Property and equipment | 457 | ||
Intangible assets | 1,187 | ||
Total current assets held for sale | $ | 8,986 | |
Accounts payable | $ | 189 | |
Other current liabilities | 828 | ||
Total current liabilities held for sale | $ | 1,017 |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||||||
Fiscal 2017: | |||||||||||||||||||
Net sales | $ | 346,073 | $ | 422,833 | $ | 464,107 | $ | 490,298 | |||||||||||
Gross profit | 141,514 | 179,515 | 207,186 | 222,054 | |||||||||||||||
Net income | 30,408 | 41,845 | 61,117 | 73,752 | |||||||||||||||
Net income per basic share | $ | 1.25 | $ | 1.71 | $ | 2.49 | $ | 3.00 | |||||||||||
Net income per diluted share | $ | 1.23 | $ | 1.69 | $ | 2.46 | $ | 2.96 | |||||||||||
Fiscal 2016: | |||||||||||||||||||
Net sales | $ | 190,275 | $ | 199,882 | $ | 218,767 | $ | 248,461 | |||||||||||
Gross profit | 83,898 | 88,599 | 94,559 | 114,336 | |||||||||||||||
Net income | 20,286 | 17,781 | 18,650 | 30,785 | |||||||||||||||
Net income per basic share | $ | 0.85 | $ | 0.74 | $ | 0.77 | $ | 1.27 | |||||||||||
Net income per diluted share | $ | 0.84 | $ | 0.73 | $ | 0.76 | $ | 1.25 |
Relative Performance Percentage | Vesting |
150% or greater | Maximum Amount (200% Target Amount) |
Between 100% - 150% | 100% Target Amount + 2% Target Amount for Every 1% Relative Performance Percentage above 100% |
100% | Target Amount |
Between 75% - 100% | Target Amount – 4% Target Amount for Every 1% Relative Performance Percentage below 100% |
75% | 0% Target Amount |
Name | Jurisdiction of Incorporation |
Coherent (Deutschland) GmbH | Germany |
Coherent (UK) Ltd. | United Kingdom |
Coherent Japan KK | Japan |
Coherent GmbH | Germany |
Coherent Investment, LLC | United States |
Coherent Holding BV & Co. KG | Germany |
Coherent (UK) Holdings Ltd. | United Kingdom |
Coherent Scotland Ltd. | Scotland |
Coherent DEOS, LLC | United States |
Coherent International LLC | United States |
COHR International Trading C.V. | The Netherlands |
COHR International Investment C.V. | The Netherlands |
Coherent Europe B.V. | The Netherlands |
Coherent Asia, Inc. | United States |
Coherent (Beijing) Commercial Company Ltd. | China |
Coherent Canada Inc. | Canada |
Coherent Singapore PTE. Ltd. | Singapore |
Coherent (Thailand) Co. Ltd. | Thailand |
COHR Malaysia SDN. BHD. | Malaysia |
Coherent Korea Ltd. | South Korea |
MiDaz Lasers Limited | United Kingdom |
Coherent Kaiserslautern GmbH | Germany |
Coherent Germany GmbH | Germany |
Coherent LaserSystems GmbH & Co. KG | Germany |
Coherent TIOS, Inc. | United States |
Coherent Real Estate GmbH | Germany |
Coherent Dutch Merger Sub B.V. | The Netherlands |
Rofin-Sinar Technologies LLC | United States |
ROFIN-SINAR, INC. | United States |
Nufern | United States |
Lee Laser, Inc. | United States |
ROFIN-SINAR TECHNOLOGIES EUROPE, S.L. | Spain |
PRC Laser Corporation | United States |
DILAS Diode Laser, Inc. | United States |
ROFIN-SINAR Laser GmbH | Germany |
ROFIN-BAASEL UK LIMITED | United Kingdom |
RASANT-ALCOTEC Beschichtungstechnik GmbH | Germany |
DILAS Diodenlaser GmbH | Germany |
E.S. TECHNOLOGY LIMITED | United Kingdom |
ROFIN BAASEL ESPAÑA, S.L. | Spain |
Rofin-Baasel Benelux B.V. | The Netherlands |
ROFIN-BAASEL Lasertech GmbH & Co. KG | Germany |
PMB Elektronik GmbH | Germany |
WB-PRC Laser Service GmbH | Germany |
Corelase Oy | Finland |
Nanjing Eastern Laser Co., Ltd. | China |
Nanjing Eastern Technologies Co., Ltd. | China |
ROFIN-BAASEL Canada Ltd. | Canada |
ROFIN BAASEL ITALIANA S.R.L. | Italy |
Optoskand AB | Sweden |
ROFIN-LASAG AG | Switzerland |
ROFIN-BAASEL France | France |
DILAS DIODENLASER CHINA COMPANY LTD. | China |
ROFIN-BAASEL SINGAPORE PTE LTD. | Singapore |
Rofin-Baasel China Company, Ltd | China |
ROFIN-BAASEL Taiwan Ltd. | Taiwan |
ROFIN-BAASEL JAPAN KK | Japan |
Rofin-Baasel Korea Co., Ltd. | South Korea |
ROFIN-BAASEL Inc. | United States |
Baasel Lasermed GmbH | Germany |
CBL Verwaltungsgesellschaft mbH | Germany |
PRC Laser Europe NV | Belgium |
NUFIBRE PTY LTD | Australia |
Coherent Trading, LLC | United States |
Coherent Real Estate 1 GmbH & Co. KG | Germany |
Coherent Real Estate 2 GmbH & Co. KG | Germany |
Coherent Real Estate 3 GmbH & Co. KG | Germany |
Coherent Shared Services B.V. | The Netherlands |
Nufern U.S., Inc. | United States |
Nufern International, Inc. | United States |
Rofin-Sinar UK Ltd. | United Kingdom |
1. | I have reviewed this Annual Report on Form 10-K of Coherent, 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 this 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; and |
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 auditors and the audit committee of the 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. |
By: | /s/ JOHN R. AMBROSEO | |
John R. Ambroseo President and Chief Executive Officer |
1. | I have reviewed this Annual Report on Form 10-K of Coherent, 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 this 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; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the 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. |
By: | /s/ KEVIN PALATNIK | |
Kevin Palatnik Executive Vice President and Chief Financial Officer |
By: | /s/ JOHN R. AMBROSEO | |
John R. Ambroseo President and Chief Executive Officer |
By: | /s/ Kevin Palatnik | |
Kevin Palatnik Executive Vice President and Chief Financial Officer |
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DEI Document - USD ($) |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Nov. 28, 2017 |
Apr. 03, 2017 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | COHERENT INC | ||
Trading Symbol | COHR | ||
Entity Central Index Key | 0000021510 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2017 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding (shares) | 24,819,081 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 3,848,333,286 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Oct. 01, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for Doubtful Accounts Receivable | $ 6,890 | $ 2,420 |
Common Stock, Par or Stated Value Per Share (usd per share) | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized (shares) | 500,000,000 | 500,000,000 |
Common Stock, Shares, Outstanding (shares) | 24,631,000 | 24,324,000 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
||||||||||||
Statement of Comprehensive Income [Abstract] | ||||||||||||||
Net income | $ 207,122 | $ 87,502 | $ 76,409 | |||||||||||
Other comprehensive income (loss): | ||||||||||||||
Translation adjustment, net of taxes | [1],[2] | 24,923 | 1,731 | (45,624) | ||||||||||
Net gain (loss) on derivative instruments, net of taxes | [1],[3] | 0 | (28) | 601 | ||||||||||
Changes in unrealized gains (losses) on available-for-sale securities, net of taxes | [1],[4] | (3,330) | 2,510 | 828 | ||||||||||
Defined benefit pension plans, net of taxes | [1],[5] | 3,613 | 0 | 0 | ||||||||||
Other comprehensive income (loss), net of tax | [1] | 25,206 | 4,213 | (44,195) | ||||||||||
Comprehensive income | 232,328 | 91,715 | 32,214 | |||||||||||
Tax expense (benefit) provided on translation adjustments | (326) | 279 | (1,768) | |||||||||||
Tax expense (benefit) provided on net gain (loss) on derivative instruments | 0 | (17) | 349 | |||||||||||
Tax expense (benefit) provided on changes in unrealized gain (losses) on available-for-sale securities | (1,876) | $ 1,399 | $ 486 | |||||||||||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax | $ 1,747 | |||||||||||||
|
Consolidated Statements of Cash Flows - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
|
Cash flows from operating activities: | |||
Net income | $ 207,122 | $ 87,502 | $ 76,409 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 43,689 | 25,905 | 24,815 |
Amortization of intangible assets | 60,556 | 8,450 | 8,244 |
Gain on business combination | (5,416) | 0 | (1,316) |
Impairment of assets held for sale | 2,916 | 0 | 0 |
Impairment of investment | 0 | 0 | 2,017 |
Deferred income taxes | (19,752) | (9,770) | 838 |
Amortization of debt issuance cost | 7,202 | 0 | 0 |
Stock-based compensation | 26,272 | 20,157 | 18,232 |
Excess tax benefits from stock-based compensation arrangements | (1,628) | 0 | 0 |
Non-cash restructuring charges | 6,439 | 0 | 0 |
Non-cash pension benefit | 5,360 | 0 | 0 |
Other non-cash expense | 1,443 | 963 | 526 |
Changes in assets and liabilities, net of effect of acquisitions: | |||
Accounts receivable | (52,516) | (17,525) | (10,099) |
Inventories | (11,419) | (55,708) | 6,054 |
Prepaid expenses and other assets | (4,367) | (4,855) | (2,048) |
Other long-term assets | (2,762) | (1,552) | 802 |
Accounts payable | 8,276 | 9,735 | 1,000 |
Income taxes payable/receivable | 66,820 | 7,384 | (6,759) |
Other current liabilities | 47,458 | 30,661 | 5,623 |
Other long-term liabilities | 3,314 | 3,952 | 120 |
Cash flows from discontinued operations | (4,891) | 0 | 0 |
Net cash provided by operating activities | 384,116 | 105,299 | 124,458 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (63,774) | (49,327) | (22,163) |
Proceeds from dispositions of property and equipment | 1,953 | 555 | 1,163 |
Purchases of available-for-sale securities | (32,449) | (180,842) | (312,592) |
Proceeds from sales and maturities of available-for-sale securities | 25,218 | 333,058 | 346,059 |
Acquisition of businesses, net of cash acquired | (740,481) | 0 | (9,300) |
Cash flows from discontinued operations | (755) | 0 | 0 |
Net cash provided by (used in) investing activities | (810,288) | 103,444 | 3,167 |
Cash flows from financing activities: | |||
Short-term borrowings | 8,863 | 54,792 | 38,729 |
Repayments of short-term borrowings | (30,819) | (34,792) | (38,729) |
Proceeds from long-term borrowings | 740,685 | 0 | 0 |
Repayments of long-term borrowings | (179,580) | 0 | 0 |
Cash paid to subsidiaries' minority shareholders | (816) | 0 | 0 |
Issuance of common stock under employee stock option and purchase plans | 8,111 | 7,849 | 7,308 |
Excess tax benefits from stock-based compensation arrangements | 1,628 | 0 | 0 |
Repurchase of common stock | 0 | 0 | (75,027) |
Net settlement of restricted common stock | (15,717) | (5,443) | (5,302) |
Debt issuance costs | (26,367) | (5,202) | 0 |
Net cash provided by (used in) financing activities | 505,988 | 17,204 | (73,021) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 22,924 | (2,207) | (15,214) |
Net increase in cash, cash equivalents and restricted cash | 102,740 | 223,740 | 39,390 |
Cash, cash equivalents and restricted cash, beginning of year | 354,347 | 130,607 | 91,217 |
Cash, cash equivalents and restricted cash, end of year | 457,087 | 354,347 | 130,607 |
Cash paid during the year for: | |||
Interest | 27,160 | 149 | 48 |
Income taxes | 57,517 | 43,884 | 29,816 |
Cash received during the year for: | |||
Income taxes | 2,513 | 6,126 | 3,297 |
Noncash investing and financing activities: | |||
Unpaid property and equipment purchases | 3,197 | 3,492 | 1,425 |
Use of previously owned equity shares in acquisition | 20,685 | 0 | 0 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect [Abstract] | |||
Cash, cash equivalents, end of year | 443,066 | 354,347 | 130,607 |
Total cash, cash equivalents, and restricted cash shown in the consolidated statement of cash flows | $ 354,347 | $ 130,607 | $ 91,217 |
Description of Business |
12 Months Ended |
---|---|
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | DESCRIPTION OF BUSINESS Founded in 1966, Coherent, Inc. provides lasers, laser-based technologies and laser-based system solutions in a broad range of commercial, industrial and scientific research applications. Coherent designs, manufactures, services and markets lasers and related accessories for a diverse group of customers. Headquartered in Santa Clara, California, the Company has worldwide operations including research and development, manufacturing, sales, service and support capabilities. |
Significant Accounting Policies |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies | SIGNIFICANT ACCOUNTING POLICIES Fiscal Year Our fiscal year ends on the Saturday closest to September 30. Fiscal years 2017, 2016 and 2015 ended on September 30, 2017, October 1, 2016 and October 3, 2015, respectively, and are referred to in these financial statements as fiscal 2017, fiscal 2016, and fiscal 2015 for convenience. Fiscal years 2017 and 2016 include 52 weeks and fiscal year 2015 includes 53 weeks. The fiscal years of the majority of our international subsidiaries end on September 30. Accordingly, the financial statements of these subsidiaries as of that date and for the years then ended have been used for our consolidated financial statements. Management believes that the impact of the use of different year-ends is immaterial to our consolidated financial statements taken as a whole. Use of Estimates The preparation of consolidated financial statements in conformity with Generally Accepted Accounting Principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Basis of Presentation The consolidated financial statements include the accounts of Coherent, Inc. and its direct and indirect subsidiaries (collectively, the "Company", "we", "our", "us" or "Coherent"). Intercompany balances and transactions have been eliminated. Business Combinations We include the results of operations of the businesses that we acquire as of the respective dates of acquisition. We allocate the fair value of the purchase price of our business acquisitions to the tangible assets acquired, liabilities assumed, and intangible assets acquired, based on their estimated fair values. The excess of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill. On November 7, 2016, we acquired Rofin-Sinar Technologies, Inc. and its direct and indirect subsidiaries ("Rofin"). The significant accounting policies of Rofin have been aligned to conform to those of Coherent, and the consolidated financial statements include the results of Rofin as of the acquisition date. Fair Value of Financial Instruments The carrying amounts of certain of our financial instruments including accounts receivable, accounts payable and accrued liabilities approximate fair value due to their short maturities. Short-term investments are comprised of available-for-sale securities, which are carried at fair value. Other non-current assets include trading securities and life insurance contracts related to our deferred compensation plans; trading securities are carried at fair value and life insurance contracts are carried at cash surrender values, which due to their ability to be converted to cash at that amount, approximate their fair values. Foreign exchange contracts are stated at fair value based on prevailing financial market information. Short-term and long-term debt is carried at amortized cost, which approximates its fair value based on borrowing rates currently available to us for loans with similar terms. Cash Equivalents All highly liquid investments with maturities of three months or less at the time of purchase are classified as cash equivalents. At fiscal 2017 year-end, cash and cash equivalents included cash, money market funds, commercial paper and U.S. agency obligations. Concentration of Credit Risk Financial instruments that may potentially subject us to concentrations of credit risk consist principally of cash equivalents, short-term investments and accounts receivable. At fiscal 2017 year-end, the majority of our short-term investments were in U.S. Treasury and agency obligations and corporate notes and obligations. Cash equivalents and short-term investments are maintained with several financial institutions and may exceed the amount of insurance provided on such balances. At September 30, 2017, we held cash and cash equivalents and short-term investments outside the U.S. in certain of our foreign operations totaling approximately $300.0 million, $263.2 million of which was denominated in currencies other than the U.S. dollar. The majority of our accounts receivable are derived from sales to customers for commercial applications. We perform ongoing credit evaluations of our customers' financial condition and limit the amount of credit extended when deemed necessary but generally require no collateral. In certain instances, we may require customers to issue a letter of credit. We maintain reserves for potential credit losses. Our products are broadly distributed and there was one customer who accounted for 19.0% and 18.0% of accounts receivable at fiscal 2017 and fiscal 2016 year-end. We had another customer who accounted for 18.7% of accounts receivable at fiscal 2016 year-end. Derivative Financial Instruments Our primary objective for holding derivative financial instruments is to manage currency exchange rate risk. Principal currencies hedged include the Euro, South Korean Won, Japanese Yen, Chinese Renminbi, Singapore Dollar, British Pound and Malaysian Ringgit. Our derivative financial instruments are recorded at fair value, on a gross basis, and are included in other current assets and other current liabilities. Our accounting policies for derivative financial instruments are based on whether they meet the criteria for designation as a cash flow hedge. Changes in the fair value of these cash flow hedges that are highly effective are recorded in accumulated other comprehensive income and reclassified into earnings in the same line item on the consolidated statements of operations as the impact of the hedged transaction during the period in which the hedged transaction affects earnings. The ineffective portion of cash flow hedges are recognized immediately in other income and expenses. Derivatives that we designate as cash flow hedges are classified in the consolidated statements of cash flows in the same section as the underlying item, primarily within cash flows from operating activities. The changes in fair value of derivative instruments that are not designated as hedges are recognized immediately in other income (expense). We formally document all relationships between hedging instruments and hedged items, as well as the risk management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives that are designated as cash-flow hedges to specific forecasted transactions. We also assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of the hedged items. Accounts Receivable Allowances Accounts receivable allowances reflect our best estimate of probable losses inherent in our accounts receivable balances, including both losses for uncollectible accounts receivable and sales returns. We regularly review allowances by considering factors such as historical experience, credit quality, the age of the accounts receivable balances and current economic conditions that may affect a customer's ability to pay. Activity in accounts receivable allowance is as follows (in thousands):
Inventories Inventories are stated at the lower of cost (first-in, first-out or weighted average cost) or market. Inventories are as follows (in thousands):
Property and Equipment Property and equipment are stated at cost and are depreciated or amortized using the straight-line method. Cost, accumulated depreciation and amortization, and estimated useful lives are as follows (dollars in thousands):
Asset Retirement Obligations The fair value (the present value of estimated cash flows) of a liability for an asset retirement obligation is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The fair value of the liability is added to the carrying amount of the associated asset and this additional carrying amount is depreciated over the life of the asset. All of our existing asset retirement obligations are associated with commitments to return the property to its original condition upon lease termination at various sites and costs to clean up and dispose of certain fixed assets at our Sunnyvale, California site. We estimated that as of fiscal 2017 year-end, gross expected future cash flows of $6.1 million would be required to fulfill these obligations. The following table reconciles changes in our asset retirement liability for fiscal 2017 and 2016 (in thousands):
At September 30, 2017 and October 1, 2016, the asset retirement liability is included in Other long-term liabilities on our consolidated balance sheets. Long-lived Assets We evaluate the carrying value of long-lived assets, including intangible assets, whenever events or changes in business circumstances or our planned use of long-lived assets indicate that their carrying amounts may not be fully recoverable or that their useful lives are no longer appropriate. Reviews are performed to determine whether the carrying values of long-lived assets are impaired based on a comparison to the undiscounted expected future net cash flows. If the comparison indicates that impairment exists, long-lived assets that are classified as held and used are written down to their respective fair values. When long-lived assets are classified as held for sale, they are written down to their respective fair values less costs to sell. Significant management judgment is required in the forecast of future operating results that is used in the preparation of expected undiscounted cash flows. For fiscal 2017, we recorded a $2.9 million impairment charge on the net assets of several entities acquired in the acquisition of Rofin to write them down to reflect our best estimate of fair value, less costs to sell (See Note 18, "Discontinued Operations and Assets Held for Sale"). In fiscal 2016, there were no significant asset impairments recorded. In fiscal 2015, we recorded a $2.0 million impairment of our investment in SiOnyx in fiscal 2015. Goodwill Goodwill is tested for impairment on an annual basis and between annual tests in certain circumstances, and written down when impaired (See Note 7, "Goodwill and Intangible Assets"). In testing for impairment, we have the option to first assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount. Moreover, an entity can bypass the qualitative assessment for any reporting unit in any period and proceed directly to the impairment test, and then resume performing the qualitative assessment in any subsequent period. In both our fiscal 2017 and 2016 annual testing, we performed a qualitative assessment of the goodwill for our OLS reporting unit using the opening balance sheet as of the first day of the fourth quarter and noted no impairment. For the ILS reporting unit, we elected to bypass the qualitative assessment and proceed directly to performing the goodwill impairment test. Accordingly, we performed our impairment test using the opening balance sheet as of the first day of the fourth quarter and noted no impairment in both fiscal 2017 and 2016. (See Note 7, "Goodwill and Intangible Assets" for additional discussion of the fiscal 2017 analysis.) Intangible Assets Intangible assets, including acquired existing technology, customer relationships, trade name and patents are amortized on a straight-line basis over their estimated useful lives, currently 3 year to 15 years (See Note 7, "Goodwill and Intangible Assets"). Warranty Reserves We provide warranties on the majority of our product sales and reserves for estimated warranty costs are recorded during the period of sale. The determination of such reserves requires us to make estimates of product return rates and expected costs to repair or replace the products under warranty. We currently establish warranty reserves based on historical warranty costs for each product line. The weighted average warranty period covered is approximately 15 months. If actual return rates and/or repair and replacement costs differ significantly from our estimates, adjustments to cost of sales may be required in future periods. Components of the reserve for warranty costs during fiscal 2017, 2016 and 2015 were as follows (in thousands):
Loss Contingencies We are subject to the possibility of various loss contingencies arising in the ordinary course of business. We consider the likelihood of loss or impairment of an asset, or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss, in determining loss contingencies. An estimated loss contingency is accrued when it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. If we determine that a loss is possible and the range of the loss can be reasonably determined, then we disclose the range of the possible loss. We regularly evaluate current information available to us to determine whether an accrual is required, an accrual should be adjusted or a range of possible loss should be disclosed. Revenue Recognition When a sales arrangement contains multiple elements, such as products and/or services, we allocate revenue to each element based on a selling price hierarchy. Using the selling price hierarchy, we determine the selling price of each deliverable using vendor specific objective evidence (“VSOE”), if it exists, and otherwise third-party evidence (“TPE”). If neither VSOE nor TPE of selling price exists, we use estimated selling price (“ESP”). We generally expect that we will not be able to establish TPE due to the nature of the markets in which we compete, and, as such, we typically will determine selling price using VSOE or if not available, ESP. Our basis for establishing VSOE of a deliverable's selling price consists of standalone sales transactions when the same or similar product or service is sold separately. However, when services are never sold separately, such as product installation services, VSOE is based on the product's estimated installation hours based on historical experience multiplied by the standard service billing rate. In determining VSOE, we require that a substantial majority of the selling price for a product or service fall within a reasonably narrow price range, as defined by us. We also consider the geographies in which the products or services are sold, major product and service groups, and other environmental variables in determining VSOE. Absent the existence of VSOE and TPE, our determination of a deliverable's ESP involves evaluating several factors based on the specific facts and circumstances of these arrangements, which include pricing strategy and policies driven by geographies, market conditions, competitive landscape, correlation between proportionate selling price and list price established by management having the relevant authority, and other environmental variables in which the deliverable is sold. For multiple element arrangements which include extended maintenance contracts, we allocate and defer the amount of consideration equal to the separately stated price and recognize revenue on a straight-line basis over the contract period. We recognize revenue when all four revenue recognition criteria have been met: persuasive evidence of an arrangement exists, the product has been delivered or the service has been rendered, the price is fixed or determinable and collection is reasonably assured. Revenue from product sales is recorded when all of the foregoing conditions are met and risk of loss and title passes to the customer. Sales to customers are generally not subject to any price protection or return rights. The majority of our sales are made to original equipment manufacturers ("OEMs"), distributors, representatives and end-users in the non-scientific market. Sales made to these customers do not require installation of the products by us and are not subject to other post-delivery obligations, except in occasional instances where we have agreed to perform installation or provide training. In those instances, we defer revenue related to installation services or training until these services have been rendered. We allocate revenue from multiple element arrangements to the various elements based upon relative fair values. Our sales to distributors, representatives and end-user customers typically do not have customer acceptance provisions and only certain of our sales to OEM customers and integrators have customer acceptance provisions. Customer acceptance is generally limited to performance under our published product specifications. For the few product sales that have customer acceptance provisions because of higher than published specifications, (1) the products are tested and accepted by the customer at our site or the customer accepts the results of our testing program prior to shipment to the customer, or (2) the revenue is deferred until customer acceptance occurs. Sales to end-users in the scientific market typically require installation and, thus, involve post-delivery obligations; however, our post-delivery installation obligations are not essential to the functionality of our products. We defer revenue related to installation services until completion of these services. For most products, training is not provided; therefore, no post-delivery training obligation exists. However, when training is provided to our customers, it is typically priced separately and is recognized as revenue as these services are provided. We record taxes collected on revenue-producing activities on a net basis. Research and Development Research and development expenses include salaries, contractor and consultant fees, supplies and materials, as well as costs related to other overhead such as depreciation, facilities, utilities and other departmental expenses. The costs we incur with respect to internally developed technology and engineering services are included in research and development expenses as incurred as they do not directly relate to any particular licensee, license agreement or license fee. We treat third party and government funding of our research and development activity, where we are the primary beneficiary of such work conducted, as a reduction of research and development cost. Research and development reimbursements of $2.9 million, $2.7 million and $2.5 million were offset against research and development costs in fiscal 2017, 2016 and 2015, respectively. Foreign Currency Translation The functional currencies of our foreign subsidiaries are generally their respective local currencies. Accordingly, gains and losses from the translation of the financial statements of the foreign subsidiaries are reported as a separate component of accumulated other comprehensive income ("OCI"). Foreign currency transaction gains and losses are included in earnings. Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Accumulated other comprehensive income (net of tax) at fiscal 2017 year-end is substantially comprised of accumulated translation adjustments of $16.3 million and deferred actuarial gains on pension plans of $3.6 million. Accumulated other comprehensive income (loss) (net of tax) at fiscal 2016 year-end is substantially comprised of accumulated translation adjustments of $(8.6) million and unrealized gain on marketable equity securities of $3.3 million. Earnings Per Share Basic earnings per share is computed based on the weighted average number of shares outstanding during the period, excluding unvested restricted stock. Diluted earnings per share is computed based on the weighted average number of shares outstanding during the period increased by the effect of dilutive employee stock awards, including stock options, restricted stock awards and stock purchase contracts, using the treasury stock method. The following table presents information necessary to calculate basic and diluted earnings per share (in thousands, except per share data):
There were 505, 323 and 0 potentially dilutive securities excluded from the dilutive share calculation for fiscal 2017, 2016 and 2015, respectively, as their effect was anti-dilutive. Stock-Based Compensation We account for stock-based compensation using the fair value of the awards granted. We value restricted stock units using the intrinsic value method, which is based on the fair market value price on the grant date. We use a Monte Carlo simulation model to estimate the fair value of performance restricted stock units. We amortize the fair value of stock awards on a straight-line basis over the requisite service periods of the awards, which are generally the vesting periods. See Note 12, "Employee Stock Award and Benefit Plans" for a description of our stock-based employee compensation plans and the assumptions we use to calculate the fair value of stock-based employee compensation. Shipping and Handling Costs We record costs related to shipping and handling of net sales in cost of sales for all periods presented. Shipping and handling fees billed to customers are included in net sales. Custom duties billed to customers are recorded in cost of sales. Income Taxes As part of the process of preparing our consolidated financial statements, we are required to estimate our income tax provision (benefit) in each of the jurisdictions in which we operate. This process involves us estimating our current income tax provision (benefit) together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. We account for uncertain tax issues pursuant to ASC 740-10 Income Taxes, which creates a single model to address accounting for uncertainty in tax positions by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. This standard provides a two-step approach for evaluating tax positions. The first step, recognition, occurs when a company concludes (based solely on the technical aspects of the matter) that a tax position is more likely than not to be sustained upon examination by a taxing authority. The second step, measurement, is only considered after step one has been satisfied and measures any tax benefit at the largest amount that is deemed more likely than not to be realized upon ultimate settlement of the uncertainty. These determinations involve significant judgment by management. Tax positions that fail to qualify for initial recognition are recognized in the first subsequent interim period that they meet the more likely than not standard or when they are resolved through negotiation or litigation with factual interpretation, judgment and certainty. Tax laws and regulations themselves are complex and are subject to change as a result of changes in fiscal policy, changes in legislation, evolution of regulations and court filings. Therefore, the actual liability for U.S. or foreign taxes may be materially different from our estimates, which could result in the need to record additional tax liabilities or potentially to reverse previously recorded tax liabilities. We record a valuation allowance to reduce our deferred tax assets to an amount that more likely than not will be realized. While we have considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance, in the event we were to determine that we would be able to realize our deferred tax assets in the future in excess of our net recorded amount, an adjustment to the allowance for the deferred tax asset would increase income in the period such determination was made. Likewise, should we determine that we would not be able to realize all or part of our net deferred tax asset in the future, an adjustment to the allowance for the deferred tax asset would be charged to income in the period such determination was made. Federal and state income taxes have not been provided on a portion of the unremitted earnings of foreign subsidiaries because such earnings are intended to be permanently reinvested. The total amount of unremitted earnings of foreign subsidiaries for which we have not yet recorded federal and state income taxes was approximately $1,150 million and $574 million at fiscal 2017 and 2016 year-end, respectively. The amount of federal and state income taxes that would be payable upon repatriation of such earnings is not practicably determinable. We have not, nor do we anticipate the need to, repatriate funds to the United States to satisfy domestic liquidity needs arising in the ordinary course of business. Adoption of New Accounting Pronouncements In January 2017, the FASB issued amended guidance that simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the existing guidance, when computing the implied fair value of goodwill under Step 2, an entity is required to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Under the amendments in this update, an entity should simply perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. The new standard will become effective for our fiscal year 2021 which begins on October 4, 2020. We elected to early adopt the standard in the fourth quarter of fiscal 2017 and the adoption resulted in no impact on our consolidated financial statements and disclosures. In November 2016, the FASB issued amended guidance that require a statement of cash flows to explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new standard will become effective for our fiscal year beginning September 30, 2018. We elected to early adopt the standard in the first quarter of fiscal 2017 on a retrospective basis with no impact on our consolidated financial statements and disclosures. In April 2015, the FASB issued amended guidance that simplifies the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amended guidance. The new standard became effective for our fiscal year beginning October 2, 2016. We elected to early adopt the standard in the second quarter of fiscal 2016 and had recorded debt issuance costs of $5.2 million in Other assets as of October 1, 2016 for the debt commitment we entered into in the second quarter of fiscal 2016 because the debt was not outstanding as of October 1, 2016. The debt issuance costs related to the term loan facility were reclassified to debt in the first quarter of fiscal 2017 when we drew down the debt. Recently Issued Accounting Pronouncements In August 2017, the FASB issued amended guidance to address current U.S. GAAP's limitation on how an entity can designate the hedged risk in certain cash flow and fair value hedging relationships. This amendment better aligns the entity's risk management activities and financial reporting for hedging relationships through changes to both designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendment made specific improvements on hedge accounting for risk components in hedging relationships involving nonfinancial risk and interest rate risk for cash flow hedges of forecasted purchases or sales of a nonfinancial asset, cash flow hedges of interest rate risk of variable-rate financial instruments and fair value hedges of interest rate risk. Upon adoption, for cash flow and net investment hedges existing, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the amendment. The amended presentation and disclosure guidance is required only prospectively. The new standard will become effective for our fiscal year 2020 which begins on September 29, 2019. We are currently assessing the impact of this amended guidance. In May 2017, the FASB issued amended guidance about which changes to the terms or conditions of a share-based payment require an entity to apply modification accounting. Under the new guidance, an entity should account for the effects of a modification unless, comparing to the original award prior to modification, the fair value, the vesting conditions and the classification as equity or as a liability of the modified award are all the same. The amendments in this update should be applied prospectively to an award modified on or after the adoption date. The new standard will become effective for our fiscal year 2019 which begins on September 30, 2018. We do not expect the adoption of this standard to have a material impact on our financial statements. In October 2016, the FASB issued amended guidance that improves the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Under the new guidance, an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The new standard will become effective in the first quarter of our fiscal 2019. We are currently assessing the impact of this amended guidance and are planning to adopt it in the first quarter of fiscal 2018. In May 2016, accounting guidance was issued to clarify the not yet effective revenue recognition guidance issued in May 2014. This additional guidance does not change the core principle of the revenue recognition guidance issued in May 2014, rather, it provides clarification of accounting for collections of sales taxes as well as recognition of revenue (i) associated with contract modifications, (ii) for noncash consideration, and (iii) based on the collectability of the consideration from the customer. The guidance also specifies when a contract should be considered “completed” for purposes of applying the transition guidance. The effective date and transition requirements for this guidance are the same as the effective date and transition requirements for the guidance previously issued in 2014, which is effective for our fiscal year 2019 which begins on September 30, 2018. We are currently evaluating the new guidance and have not determined the impact this standard may have on our financial statements nor have we decided upon the method of adoption. In March 2016, the FASB issued amended guidance that simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. Under the new guidance, an entity recognizes all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement. This change eliminates the notion of the APIC pool and significantly reduces the complexity and cost of accounting for excess tax benefits and tax deficiencies. The new standard will become effective for our fiscal year beginning October 1, 2017. Upon our adoption in the first quarter of fiscal 2018, we expect to recognize a windfall tax benefit as a cumulative effect adjustment increase to our opening retained earnings of approximately $20.0 million together with a comparable increase in deferred tax assets. In February 2016, the FASB issued amended guidance to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new guidance clarifies the criteria for distinguishing between a finance lease and operating lease, as well as classification between the two types of leases, which is substantially unchanged from the previous lease guidance. Further, the new guidance requires a lessee to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset, initially measured at the present value of the lease payments. For finance leases, a lessee should recognize interest on the lease liability separately from amortization of the right-of-use asset. For operating leases, a lessee should recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities. The new standard will become effective for our fiscal year 2020 which begins on September 29, 2019. We are currently assessing the impact of this amended guidance and the timing of adoption. In January 2016, the FASB issued amended guidance that revises the recognition and measurement of financial instruments. The new guidance requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The new standard will become effective for our fiscal year 2019 which begins on September 30, 2018. We are currently assessing the impact of this amended guidance and the timing of adoption. |
Business Combinations |
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Business Combinations | BUSINESS COMBINATIONS Fiscal 2017 Acquisitions Rofin On November 7, 2016, we completed our acquisition of Rofin pursuant to the Merger Agreement dated March 16, 2016. Rofin is one of the world's leading developers and manufacturers of high-performance industrial laser sources and laser-based solutions and components. Rofin's operating results have been included primarily in our Industrial Lasers & Systems segment. See Note 16, "Segment and Geographic Information". As a condition of the acquisition, we were required to divest and hold separate Rofin’s low power CO2 laser business based in Hull, United Kingdom (the "Hull Business"), and have reported this business separately as a discontinued operation until its divestiture (See Note 18, "Discontinued Operations"). We completed the divestiture of the Hull Business on October 11, 2017, after receiving approval for the terms of the sale from the European Commission. See Note 19, "Subsequent Event". The total purchase consideration has been allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on a valuation analysis. The total purchase consideration allocated to net assets acquired was approximately $936.3 million and consisted of the following (in thousands):
The acquisition was an all-cash transaction at a price of $32.50 per share of Rofin common stock. We funded the payment of the aggregate consideration with a combination of our available cash on hand and the proceeds from the Euro Term Loan described in Note 9. The total payment of $15.3 million due to the cancellation of options held by employees of Rofin was allocated between total estimated merger consideration of $11.1 million and post-merger stock-based compensation expense of $4.2 million based on the portion of the total service period of the underlying options that had not been completed by the merger date. We recognized a gain of $5.4 million in the first quarter of fiscal 2017 on the increase in fair value from the date of purchase for the shares of Rofin we owned before the acquisition. Under the acquisition method of accounting, the total estimated acquisition consideration is allocated to the acquired tangible and intangible assets and assumed liabilities of Rofin based on their fair values as of the acquisition date. Any excess of the acquisition consideration over the fair value of assets acquired and liabilities assumed is allocated to goodwill. We expect that all such goodwill will not be deductible for tax purposes. In the third quarter of fiscal 2017, we re-evaluated the carrying value of the Hull Business that has been presented as assets held for sale since the acquisition. As a result, approximately $33.9 million of goodwill was reallocated from the assets held for sale to the remaining business acquired as we were within the remeasurement period. Our allocation of the purchase price is as follows (in thousands):
The fair value write-up of acquired finished goods and work-in-process inventory was $26.4 million which was amortized over the expected period during which the acquired inventory was sold, or 6 months. Accordingly, for the year ended September 30, 2017, we recorded $26.4 million of incremental cost of sales associated with the fair value write-up of inventory acquired in the merger with Rofin. The fair value write-up of inventory acquired was fully amortized as of September 30, 2017. The fair value write-up of acquired property, plant and equipment of $36.0 million will be amortized over the useful lives of the assets, ranging from 3 to 31 years. Property, plant and equipment is valued at its value-in-use, unless there was a known plan to dispose of the asset. The acquired existing technology, backlog, trademarks and patents are being amortized on a straight-line basis, which approximates the economic use of the asset, over their estimated useful lives of 3 to 5 years, 6 months, 3 years, and 5 years, respectively. Customer relationships are being amortized on an accelerated basis utilizing free cash flows over periods ranging from 5 to 10 years. The useful lives of in-process research and development will be defined in the future upon further evaluation of the status of these applications. The fair value of the acquired intangibles was determined using the income approach. In performing these valuations, the key underlying probability-adjusted assumptions of the discounted cash flows were projected revenues, gross margin expectations and operating cost estimates. The valuations were based on the information that was available as of the acquisition date and the expectations and assumptions that have been deemed reasonable by our management. There are inherent uncertainties and management judgment required in these determinations. This acquisition resulted in a purchase price that exceeded the estimated fair value of tangible and intangible assets, which was allocated to goodwill. We believe the amount of goodwill relative to identifiable intangible assets relates to several factors including: (1) potential buyer-specific synergies related to market opportunities for a combined product offering; and (2) potential to leverage our sales force to attract new customers and revenue and cross sell to existing customers. In-process research and development (“IPR&D”) consists of two projects that have not yet reached technological feasibility. Acquired IPR&D assets are initially recognized at fair value and are classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. The value assigned to IPR&D was determined by considering the value of the products under development to the overall development plan, estimating the resulting net cash flows from the projects when completed and discounting the net cash flows to their present value. During the development period, these assets will not be amortized as charges to earnings; instead these assets will be subject to periodic impairment testing. Upon successful completion of the development process for the acquired IPR&D projects, the assets would then be considered finite-lived intangible assets and amortization of the assets will commence. The projects have not been completed as of September 30, 2017. We expensed $17.6 million of acquisition-related costs as selling, general and administrative expenses in our consolidated statements of operations during the year ended September 30, 2017. None of the goodwill was deductible for tax purposes. The results of this acquisition were included in our consolidated operations beginning on November 7, 2016. The amount of continuing Rofin net sales and net loss from continuing operations included in our consolidated statements of operations for the year ended September 30, 2017 was approximately $434.9 million and $48.1 million, respectively. Unaudited Pro Forma Information The following unaudited pro forma financial information presents our combined results of operations as if the acquisition of Rofin and the related issuance of our Euro Term Loan had occurred on October 4, 2015. The unaudited pro forma financial information is not necessarily indicative of what our consolidated results of operations actually would have been had the acquisition been completed on October 4, 2015. In addition, the unaudited pro forma financial information does not attempt to project the future results of operations of the combined company. The actual results may differ significantly from the pro forma results presented here due to many factors.
The unaudited pro forma financial information above includes the net income of Rofin’s low power CO2 laser business based in Hull, United Kingdom, which is recorded as a discontinued operation in fiscal 2017. See Note 19, "Discontinued Operations". The unaudited pro forma financial information above reflects the following material adjustments:
Fiscal 2015 Acquisitions Raydiance, Inc. On July 24, 2015, we acquired certain assets of Raydiance, Inc. ("Raydiance") for approximately $5.0 million, excluding transaction costs. Raydiance manufactured complete tools and lasers for ultrafast processing systems and subsystems in the precision micromachining processing market. The Raydiance assets have been included in our OEM Laser Sources segment. Our allocation of the purchase price is as follows (in thousands):
The purchase price allocated to goodwill was finalized in the first quarter of fiscal 2016, with an increase of $0.4 million and a corresponding decrease of $0.4 million to tangible assets, and has been updated from the preliminary allocation in the fourth quarter of fiscal 2015. Results of operations for the business have been included in our consolidated financial statements subsequent to the date of acquisition and pro forma results of operations in accordance with authoritative guidance for prior periods have not been presented because the effect of the acquisition was not material to our prior period consolidated financial results. The identifiable intangible assets are being amortized over their respective useful lives of three to five years. None of the goodwill from this purchase is deductible for tax purposes. We expensed $0.1 million of acquisition-related costs as selling, general and administrative expenses in our consolidated statements of operations for our fiscal year 2015. Tinsley Optics On July 27, 2015, we acquired the assets and certain liabilities of the Tinsley Optics ("Tinsley") business from L-3 Communications Corporation for approximately $4.3 million, excluding transaction costs. Tinsley is a specialized manufacturer of high precision optical components and subsystems sold primarily in the aerospace and defense industry. Tinsley manufactures the large form factor optics for our excimer laser annealing systems. Tinsley has been included in our OEM Laser Sources segment. Our allocation of the purchase price is as follows (in thousands):
The purchase price was lower than the fair value of net assets purchased, resulting in a gain of $1.3 million recorded as a separate line item in our consolidated statements of operations for our fiscal year 2015. The Company reassessed the recognition and measurement of identifiable assets acquired and liabilities assumed and concluded that all acquired assets and assumed liabilities were recognized and that the valuation procedures and resulting measures were appropriate. Results of operations for the business have been included in our consolidated financial statements subsequent to the date of acquisition and pro forma results of operations in accordance with authoritative guidance for prior periods have not been presented because the effect of the acquisition was not material to our prior period consolidated financial results. The gain from the bargain purchase is not subject to income taxation. We expensed $0.4 million of acquisition-related costs as selling, general and administrative expenses in our consolidated statements of operations for our fiscal year 2015. |
Fair Values |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values | FAIR VALUES We measure our cash equivalents and marketable securities at fair value. The fair values of our financial assets and liabilities are determined using quoted market prices of identical assets or quoted market prices of similar assets from active markets. We recognize transfers between levels within the fair value hierarchy, if any, at the end of each quarter. There were no transfers between levels during the periods presented. As of September 30, 2017 and October 1, 2016, we did not have any assets or liabilities valued based on Level 3 valuations. We measure the fair value of outstanding debt obligations for disclosure purposes on a recurring basis. As of September 30, 2017, the current and long-term portion of long-term obligations of $5.1 million and $589.0 million, respectively, are reported at amortized cost. These outstanding obligations are classified as Level 2 as they are not actively traded and are valued using a discounted cash flow model that uses observable market inputs. Based on the discounted cash flow model, the fair value of the outstanding debt approximates amortized cost. Financial assets and liabilities measured at fair value as of September 30, 2017 and October 1, 2016 are summarized below (in thousands):
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Short-Term Investments |
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Cash, Cash Equivalents, and Short-term Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Investments | SHORT-TERM INVESTMENTS We consider all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. Investments classified as available-for-sale are reported at fair value with unrealized gains and losses, net of related income taxes, recorded as a separate component of OCI in stockholders' equity until realized. Interest and amortization of premiums and discounts for debt securities are included in interest income. Gains and losses on securities sold are determined based on the specific identification method and are included in other income (expense). Cash, cash equivalents and short-term investments consist of the following (in thousands):
None of the $1,000 in unrealized losses at September 30, 2017 were considered to be other-than-temporary impairments. The amortized cost and estimated fair value of available-for-sale investments in debt securities as of September 30, 2017 and October 1, 2016 classified as short-term investments on our consolidated balance sheets, were as follows (in thousands):
(1) Classified as short-term investments because these securities are highly liquid and can be sold at any time. During fiscal 2017, we received proceeds totaling $0.1 million from the sale of available-for-sale securities and realized no gross gains or losses. During fiscal 2016, we received proceeds totaling $126.0 million from the sale of available-for-sale securities and realized gross gains of less than $0.1 million. |
Derivative Instruments and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES We maintain operations in various countries outside of the United States and have foreign subsidiaries that manufacture and sell our products in various global markets. The majority of our sales are transacted in U.S. dollars. However, we do generate revenues in other currencies, primarily the Euro, Japanese Yen, South Korean Won and Chinese Renminbi (RMB). As a result, our earnings, cash flows and cash balances are exposed to fluctuations in foreign currency exchange rates. We attempt to limit these exposures through financial market instruments. We utilize derivative instruments, primarily forward contracts with maturities of two months or less, to manage our exposure associated with anticipated cash flows and net asset and liability positions denominated in foreign currencies. Gains and losses on the forward contracts are mitigated by gains and losses on the underlying instruments. We do not use derivative financial instruments for speculative or trading purposes. The credit risk amounts represent the Company’s gross exposure to potential accounting loss on derivative instruments that are outstanding or unsettled if all counterparties failed to perform according to the terms of the contract, based on then-current currency rates at each respective date. On August 1, 2016, we purchased forward contracts totaling 670.0 million Euros, with a value date of November 30, 2016, to limit our foreign exchange risk related to the commitment of our Euro Term Loan (denominated in Euros) in an amount of the Euro equivalent of $750.0 million to finance the U.S. dollar payment for our acquisition of Rofin. In the fourth quarter of fiscal 2016, we recognized an unrealized loss of $2.2 million on these forward contracts. In the first quarter of fiscal 2017, we settled these forward contracts at a net gain of $9.1 million, resulting in a realized gain of $11.3 million in the first quarter of fiscal 2017. Non-Designated Derivatives The outstanding notional contract and fair value asset (liability) amounts of non-designated hedge contracts, with maximum maturity of two months, are as follows (in thousands):
The fair value of our derivative instruments is included in prepaid expenses and other assets and in other current liabilities in our Consolidated Balance Sheets. See Note 4, "Fair Values". During fiscal 2017, 2016, and 2015, we recognized a gain of $17.8 million, a loss of $10.5 million and a loss of $4.3 million, respectively, in other income (expense) for derivative instruments not designated as hedging instruments. Designated Derivatives Cash flow hedges related to anticipated transactions are designated and documented at the inception of the hedge when we enter into contracts for specific future transactions. Cash flow hedges are evaluated for effectiveness quarterly. The effective portion of the gain or loss on these hedges is reported as a component of OCI in stockholder's equity and is reclassified into earnings when the underlying transaction affects earnings. We had no cash flow hedges outstanding at September 30, 2017 or October 1, 2016. Changes in the fair value of currency forward contracts due to changes in time value are excluded from the assessment of effectiveness and recognized in other income (expense) as incurred. We classify the cash flows from the foreign exchange forward contracts that are accounted for as cash flow hedges in the same section as the underlying item, primarily within cash flows from operating activities since we do not designate our cash flow hedges as investing or financing activities. In fiscal 2014, we had entered into certain derivative forward contracts to sell Japanese Yen and buy Euro to hedge revenue exposures related to our photonics-based solutions in Asia. In order to facilitate the hedge, we transacted with counterparties in the U.S. directly and then allocated the hedge contracts to our affiliates through a back-to-back relationship with our German subsidiary. The German subsidiary designated these hedge contracts as cash flow hedges under ASC 815. The hedges were settled in fiscal 2016. During fiscal 2017, we did not have any activities related to designated cash flow hedges. During fiscal 2016, we recorded losses in OCI and in other income (expense) and reclassified losses from OCI into revenue related to the accounting for derivatives designated as cash flow hedges. These losses and reclassifications were not material. In fiscal 2015, we recorded a gain of $0.6 million in OCI and a $0.1 million loss in other income (expense) as well as reclassified $0.2 million of gains from OCI into revenue and $1.7 million of losses into cost of sales related to the accounting for derivatives designated as cash flow hedges. During the fiscal year ended October 1, 2016, we recognized a loss of less than $0.1 million in other income (expense) as ineffectiveness related to a portion of an anticipated hedged transaction that failed to occur within the original hedge period plus two months. The remainder of the hedged transaction occurred as expected and effective amounts were recognized in revenue or cost of sales. The amounts that will be reclassified from OCI to earnings are generally offset by the recognition of the hedged transactions (e.g., anticipated cost of sales) in earnings, thereby achieving the realization of prices contemplated by the underlying risk management strategies, and will vary from the expected amounts presented above as a result of changes in foreign exchange rates. Master Netting Arrangements To mitigate credit risk in derivative transactions, we enter into master netting arrangements that allow each counterparty in the arrangements to net settle amounts of multiple and separate derivative transactions under certain conditions. We present the fair value of derivative assets and liabilities within the our consolidated balance sheet on a gross basis even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation. The impact of netting derivative assets and liabilities is not material to our financial position for any of the periods presented. Our derivative contracts do not contain any credit risk related contingent features and do not require collateral or other security to be furnished by us or the counterparties. |
Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS Goodwill is tested for impairment on an annual basis and between annual tests if events or circumstances indicate that an impairment loss may have occurred, and we write down these assets when impaired. We perform our annual impairment tests during the fourth quarter of each fiscal year using the opening balance sheet as of the first day of the fourth quarter, with any resulting impairment recorded in the fourth quarter of the fiscal year. As a result of the acquisition of Rofin in the first quarter of fiscal 2017, we reorganized our prior two reporting segments (Specialty Laser Systems and Commercial Lasers and Components) into two new reporting segments for the combined company: OEM Laser Sources (“OLS”) and Industrial Lasers & Systems (“ILS”). This segment reorganization was based upon the organizational structure of the combined company and how the chief operating decision maker ("CODM") receives and utilizes information provided to allocate resources and make decisions. In our fiscal 2017 annual testing, we performed a qualitative assessment of the goodwill for our OLS reporting unit during the fourth quarter of fiscal 2017 using the opening balance sheet as of the first day of the fourth quarter and concluded that it was more likely than not that the fair value of the reporting unit exceeded its carrying amount. In assessing the qualitative factors, we considered the impact of these key factors: macroeconomic conditions, fluctuations in foreign currency, market and industry conditions, our operating and competitive environment, regulatory and political developments, the overall financial performance of the reporting unit including cost factors and budgeted-to-actual revenue results. We also considered our market capitalization, stock price performance and the significant excess between the estimated fair value and carrying value of the OLS reporting unit. Based on our assessment, goodwill in the OLS reporting unit was not impaired as of the first day of the fourth quarter of fiscal 2017. As such, it was not necessary to perform the goodwill impairment test at that time. For the ILS reporting unit, we elected to bypass the qualitative assessment and proceed directly to performing the goodwill impairment test. We performed our test using the opening balance sheet as of the first day of the fourth quarter and noted no impairment. We determined the fair value of the ILS reporting unit for the test using a 50-50% weighting of the Income (discounted cash flow) approach and Market (market comparable) approach. Management completed and reviewed the results of the impairment analysis and concluded that an impairment charge was not required as the estimated fair value of the ILS reporting unit was significantly in excess of its carrying value. Between the completion of that testing and the end of the fourth quarter of fiscal 2017, we noted no indications of impairment or triggering events with either reporting unit to cause us to review goodwill for potential impairment. The changes in the carrying amount of goodwill by segment for fiscal 2017 and 2016 are as follows (in thousands):
(1) Gross amount of goodwill for our ILS segment was $328.5 million at September 30, 2017 and $17.4 million at October 1, 2016, respectively. At both September 30, 2017 and October 1, 2016, the accumulated impairment loss for the ILS reporting unit was $13.0 million reflecting an impairment charge in fiscal 2009. (2) Gross amount of goodwill for our OLS segment was $110.9 million and $105.7 million at September 30, 2017 and October 1, 2016, respectively. At both September 30, 2017 and October 1, 2016, the accumulated impairment loss for the OLS reporting unit was $8.7 million reflecting impairment charges in fiscal 2003 and fiscal 2009. We evaluate long-lived assets and amortizable intangible assets whenever events or changes in business circumstances or our planned use of assets indicate that their carrying amounts may not be fully recoverable or that their useful lives are no longer appropriate. Reviews are performed to determine whether the carrying values of assets are impaired based on comparison to the undiscounted expected future cash flows identifiable to such long-lived and amortizable intangible assets. If the comparison indicates that impairment exists, the impaired asset is written down to its fair value. In fiscal 2016, we did not have any impairment of intangible assets as a result of the impairment analysis. The components of our amortizable intangible assets are as follows (in thousands):
For accounting purposes, when an intangible asset is fully amortized, it is removed from the disclosure schedule. The weighted average remaining amortization periods for existing technology, patents, customer lists and trade names are approximately 3.2 years, 4.1 years, 7.4 years and 2.1 years, respectively. Amortization expense for intangible assets during fiscal years 2017, 2016, and 2015 was $60.6 million, $8.5 million and $8.2 million, respectively. The change in accumulated amortization also includes $4.8 million and $0.4 million of foreign exchange impact for fiscal 2017 and fiscal 2016, respectively. Estimated amortization expense for the next five fiscal years and all years thereafter are as follows (in thousands):
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Balance Sheet Details |
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Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Details | BALANCE SHEET DETAILS Prepaid expenses and other assets consist of the following (in thousands):
Other assets consist of the following (in thousands):
Other current liabilities consist of the following (in thousands):
Other long-term liabilities consist of the following (in thousands):
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Borrowings |
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Short-term Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings | BORROWINGS On November 4, 2016, we repaid the outstanding balance, plus accrued interest, on our former domestic line of credit and terminated the $50.0 million credit facility with Union Bank of California. We assumed two term loans having an aggregated principal amount of $15.3 million as of November 7, 2016 and several lines of credit totaling approximately $18.1 million with the completion of the Rofin acquisition. On November 7, 2016 (the "Closing Date"), we entered into a Credit Agreement by and among us, Coherent Holding BV & Co. K.G. (formerly Coherent Holding GmbH), as borrower (the “Borrower”), and certain of our direct and indirect subsidiaries from time to time party thereto, as guarantors, the lenders from time to time party thereto, Barclays Bank PLC, as administrative agent and an L/C Issuer, Bank of America, N.A., as an L/C Issuer, and MUFG Union Bank, N.A., as an L/C Issuer (the "Credit Agreement"). The Credit Agreement provided for a 670.0 million Euro senior secured term loan facility (the "Euro Term Loan") and a $100.0 million senior secured revolving credit facility ("Revolving Credit Facility") with a $30.0 million letter of credit sublimit and a $10.0 million swing line sublimit. The Borrower may increase the aggregate revolving commitments or borrow incremental term loans in an aggregate principal amount not to exceed the sum of $150.0 million and an amount that would not cause the senior secured net leverage ratio to be greater than 2.75 to 1.00, subject to certain conditions, including obtaining additional commitments from the lenders then party to the Credit Agreement or new lenders. On November 7, 2016, the Borrower borrowed the full 670.0 million Euros under the Euro Term Loan and its proceeds were used to finance the acquisition of Rofin and pay related fees and expenses. On November 7, 2016, we also used 10.0 million Euros of the capacity under the Revolving Credit Facility for the issuance of a letter of credit. The terms of the Credit Agreement require the Borrower to prepay the term loans in certain circumstances, including from excess cash flow beyond a threshold amount, from the receipt of proceeds from certain dispositions or from the incurrence of certain indebtedness, and from extraordinary receipts resulting in net cash proceeds in excess of $10.0 million in any fiscal year. The Borrower has the right to prepay loans under the Credit Agreement in whole or in part at any time without premium or penalty, subject to customary breakage costs. Revolving loans may be borrowed, repaid and reborrowed until the fifth anniversary of the Closing Date, at which time all outstanding revolving loans must be repaid. The Euro Term Loan matures on the seventh anniversary of the Closing Date, at which time all outstanding principal and accrued and unpaid interest on the Euro Term Loan must be repaid. On September 29, 2017, June 30, 2017 and March 31, 2017, we made voluntary principal payments of 75.0 million Euros, 45.0 million Euros and 30.0 million Euros, respectively, on the Euro Term Loan. As of September 30, 2017, the outstanding principal amount of the Euro Term Loan was 513.3 million Euros. As of September 30, 2017, the outstanding principal amount of the Revolving Credit Facility was 10.0 million Euro. Loans under the Credit Agreement bear interest, at the Borrower’s option, at a rate equal to either (i)(x) in the case of calculations with respect to U.S. Dollars or certain other alternative currencies, the London interbank offered rate (the “LIBOR”) or (y) in the case of calculations with respect to the Euro, the euro interbank offered rate ("EURIBOR" and, together with LIBOR, the "Eurocurrency Rate") or (ii) a base rate (the “Base Rate”) equal to the highest of (x) the federal funds rate, plus 0.50%, (y) the prime rate then in effect and (z) the Eurocurrency Rate for loans denominated in U.S. dollars applicable to a one-month interest period, plus 1.0%, in each case, plus an applicable margin. The applicable margin for Euro Term Loan borrowed as Eurocurrency Rate loans, is 3.50% initially, and following the first anniversary of the Closing Date ranges from 3.50% to 3.00% depending on the consolidated total gross leverage ratio at the time of determination. For Euro Term Loan borrowed as Base Rate loans, the applicable margin initially is 2.50%, and following the first anniversary of the Closing Date ranges from 2.50% to 2.00% depending upon the consolidated total gross leverage ratio at the time of determination. The applicable margin for revolving loans borrowed as Eurocurrency Rate loans, ranges from 4.25% to 3.75%, and for revolving loans borrowed as Base Rate loans, ranges from 3.25% to 2.75%, in each case, based on the consolidated total gross leverage ratio at the time of determination. Interest on Base Rate Loans is payable quarterly in arrears. Interest on Eurocurrency Rate loans is payable at the end of the applicable interest period (or at three month intervals if the interest period exceeds three months). Interest periods for Eurocurrency Rate loans may be, at the Borrower’s option, one, two, three or six months. On May 8, 2017, we entered into Amendment No. 1 and Waiver (the "Repricing Amendment") to the Credit Agreement to, among other things, (i) reduce the applicable interest rate margins with respect to the Euro Term Loans to 1.25% for Euro Term Loans maintained as Base Rate loans and 2.25% for Euro Term Loans maintained as Eurocurrency Rate loans, with stepdowns to 1.00% and 2.00%, respectively, available after May 8, 2018 if the consolidated total gross leverage ratio for Coherent and its restricted subsidiaries is less than 1.50:1.00 and (ii) extend the period during which a prepayment premium may be required for a repricing transaction until six months after the effective date of the Repricing Amendment. In connection with the execution of the Repricing Amendment, we paid arrangement fees of approximately $0.5 million, as well as certain fees and expenses of the administrative agent and the lenders, in accordance with the terms of the Credit Agreement. The Credit Agreement requires the Borrower to make scheduled quarterly payments on the Euro Term Loan of 0.25% of the original principal amount of the Euro Term Loan, with any remaining principal payable at maturity. A commitment fee accrues on any unused portion of the revolving loan commitments under the Credit Agreement at a rate of 0.375% or 0.5% depending on the consolidated total gross leverage ratio at any time of determination. The Borrower is also obligated to pay other customary fees for a credit facility of this size and type. On the Closing Date, we and certain of our direct and indirect subsidiaries, as guarantors, provided an unconditional guaranty of all obligations of the Borrower and the other loan parties arising under the Credit Agreement, the other loan documents and under swap contracts and treasury management agreements with the lenders or their affiliates (with certain limited exceptions). The Borrower and the guarantors have also granted security interests in substantially all of their assets to secure such obligations. The Credit Agreement contains customary affirmative covenants, including covenants regarding the payment of taxes and other obligations, maintenance of insurance, reporting requirements and compliance with applicable laws and regulations, and negative covenants, including covenants limiting the ability of us and our subsidiaries to, among other things, incur debt, grant liens, make investments, make certain restricted payments, transact with affiliates, and sell assets. The Credit Agreement also requires us and our subsidiaries to maintain a senior secured net leverage ratio as of the last day of each fiscal quarter of less of than or equal to 3.50 to 1.00. The Credit Agreement contains customary events of default that include, among other things, payment defaults, cross defaults with certain other indebtedness, violation of covenants, inaccuracy of representations and warranties in any material respect, change in control of us and the Borrower, judgment defaults, and bankruptcy and insolvency events. If an event of default exists, the lenders may require the immediate payment of all Obligations, as defined in the Credit Agreement, and may exercise certain other rights and remedies provided for under the Credit Agreement, the other loan documents and applicable law. The acceleration of such obligations is automatic upon the occurrence of a bankruptcy and insolvency event of default. We were in compliance with all covenants at September 30, 2017. We incurred $28.5 million of debt issuance costs related to the Euro Term Loan and $0.5 million of debt issuance costs to the original lenders related to the Repricing Amendment, which are included in short-term borrowings and current portion of long-term obligations and long-term obligations in the consolidated balance sheets and will be amortized to interest expense over the seven year life of the Euro Term Loan using the effective interest method, adjusted to accelerate amortization related to voluntary prepayments. We incurred $2.3 million of debt issuance costs in connection with the Revolving Credit Facility which were capitalized and included in prepaid expenses and other assets and other assets in the consolidated balance sheets and will be amortized to interest expense using the straight-line method over the contractual term of five years of the Revolving Credit Facility. For the year ended September 30, 2017, we recognized interest expense of $23.5 million and amortization of debt issuance costs of $7.2 million in relation to the Euro Term Loan. Additional sources of cash available to us were international currency lines of credit and bank credit facilities totaling $29.2 million as of September 30, 2017, of which $23.3 million was unused and available. As of September 30, 2017, we had utilized $5.9 million of the international credit facilities as guarantees in Europe. Short-term borrowings and current portion of long-term obligations consist of the following (in thousands):
(1) Net of debt issuance costs of $4.7 million. Long-term obligations consist of the following (in thousands):
(1) Net of debt issuance costs of $20.4 million. Contractual maturities of our debt obligations as of September 30, 2017 are as follows (in thousands):
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Indemnifications In the normal course of business, we enter into agreements that contain a variety of representations and warranties and provide for general indemnification. Exposure under these agreements is unknown because claims may be made against us in the future and we may record charges in the future as a result of these indemnification obligations. As of September 30, 2017 we did not have any material indemnification claims that were probable or reasonably possible. Commitments We lease several of our facilities under operating leases and recognize rent expense on a straight-line basis over the life of the leases. Future minimum payments under our non-cancelable operating leases at September 30, 2017 are as follows (in thousands):
Rent expense was $16.5 million, $12.6 million and $11.0 million in fiscal 2017, 2016 and 2015, respectively. As of September 30, 2017, we had total purchase commitments for inventory of approximately $180.0 million and purchase obligations for fixed assets and services of $23.9 million compared to $73.7 million of purchase commitments for inventory and $12.2 million of purchase obligations for fixed assets and services at October 1, 2016. The inventory increase was primarily due to the acquisition of Rofin in the first quarter of fiscal 2017 and higher commitments to support the higher shipments of large ELA tools used in the flat panel display market. The fixed assets and services increase was primarily due to expansion of our manufacturing capacity in Göttingen, Germany, the upgrade of certain of our production facilities in California and the acquisition of Rofin. Contingencies We are subject to legal claims and litigation arising in the ordinary course of business, such as product liability, employment or intellectual property claims, including, but not limited to, the matters described below. On May 14, 2013, IMRA America (“Imra”) filed a complaint for patent infringement against two of our subsidiaries in the Regional Court of Düsseldorf, Germany, captioned In re IMRA America Inc. versus Coherent Kaiserslautern GmbH et. al. 4b O 38/13. The complaint alleges that the use of certain of the Company’s lasers infringes upon EP Patent No. 754,103, entitled “Method For Controlling Configuration of Laser Induced Breakdown and Ablation,” issued November 5, 1997. The patent, now expired in all jurisdictions, is owned by the University of Michigan and licensed to Imra. The complaint seeks unspecified compensatory damages, the cost of court proceedings and seeks to permanently enjoin the Company from infringing the patent in the future. Following the filing of the infringement suit, our subsidiaries filed a separate nullity action with the Federal Patent Court in Munich, Germany requesting that the court hold that the Patent was invalid based on prior art. On October 1, 2015, the Federal Patent Court ruled that the German portion of the Patent was invalid. Imra has appealed this decision to the Federal Court of Justice, the highest civil jurisdiction court in Germany. The infringement action is currently stayed pending the outcome of such appeal. Management has made an accrual with respect to this matter and has determined, based on its current knowledge, that the amount or range of reasonably possible losses in excess of the amounts already accrued is not reasonably estimable. Although we do not expect that such legal claims and litigation will ultimately have a material adverse effect on our consolidated financial position, results of operations or cash flows, an adverse result in one or more matters could negatively affect our results in the period in which they occur. The United States and many foreign governments impose tariffs and duties on the import and export of certain products we sell. From time to time our duty calculations and payments are audited by government agencies. During the second quarter of fiscal 2016, we concluded an audit in South Korea for customs duties and value added tax for the period March 2009 to March 2014. We paid $1.6 million related to this matter in the second quarter of fiscal 2016 and have no remaining accrual at October 1, 2016. On November 7, 2016, we entered into a Credit Agreement, which was amended on May 8, 2017. See Note 9, "Borrowings" for further discussion of the issuance of the financing. |
Stock Repurchases |
12 Months Ended |
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Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stock Repurchases | STOCK REPURCHASES On July 25, 2014, our Board of Directors authorized a buyback program whereby we were authorized to repurchase up to $25.0 million of our common stock from time to time through July 31, 2015. During the first and second quarters of fiscal 2015, we repurchased and retired 434,114 shares of outstanding common stock under this plan at an average price of $57.59 per share for a total of $25.0 million. On January 21, 2015, our Board of Directors authorized an additional stock repurchase program to repurchase up to $25.0 million of our outstanding common stock from time to time through January 31, 2016. During the fourth quarter of fiscal 2015, we repurchased and retired 430,675 shares of outstanding common stock under this plan at an average price of $58.05 per share for a total of $25.0 million. On August 25, 2015, our Board of Directors authorized an additional stock repurchase program to repurchase up to $25.0 million of our outstanding common stock from time to time through August 31, 2016. During the fourth quarter of fiscal 2015, we repurchased and retired 437,534 shares of outstanding common stock under this plan at an average price of $57.14 per share for a total of $25.0 million. |
Employee Stock Award and Benefit Plans |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Stock Award and Benefit Plans | EMPLOYEE STOCK AWARD AND BENEFIT PLANS Deferred Compensation Plans Under our deferred compensation plans ("plans"), eligible employees are permitted to make compensation deferrals up to established limits set under the plans and accrue income on these deferrals based on reference to changes in available investment options. While not required by the plan, we choose to invest in insurance contracts and mutual funds in order to approximate the changes in the liability to the employees. These investments and the liability to the employees were as follows (in thousands):
Life insurance premiums loads, policy fees and cost of insurance that are paid from the asset investments and gains and losses from the asset investments for these plans are recorded as components of other income or expense; such amounts were a net gain of $5.0 million (including a $1.3 million death benefit) in fiscal year 2017, a net gain of $1.7 million in fiscal year 2016 and a net loss of $0.4 million in fiscal year 2015. Changes in the obligation to plan participants are recorded as a component of operating expenses and cost of sales; such amounts were a loss of $3.9 million in fiscal year 2017, a loss of $2.1 million in fiscal year 2016 and income of $0.2 million in fiscal year 2015. Liabilities associated with participant balances under our deferred compensation plans are affected by individual contributions and distributions made, as well as gains and losses on the participant's investment allocation election. Coherent Employee Retirement and Investment Plan Under the Coherent Employee Retirement and Investment Plan, we match employee contributions to the plan up to a maximum of 4% of the employee's individual earnings subject to IRS limitations. Employees become eligible for participation and Company matching contributions on their first day of employment. The Company's contributions (net of forfeitures) during fiscal 2017, 2016, and 2015 were $4.8 million, $4.1 million and $3.6 million, respectively. Employee Stock Purchase Plan We have an Employee Stock Purchase Plan ("ESPP") whereby eligible employees may authorize payroll deductions of up to 10% of their regular base salary to purchase shares at the lower of 85% of the fair market value of the common stock on the date of commencement of the offering or on the last day of the six-month offering period. During fiscal 2017, 2016 and 2015, a total of 95,678 shares, 141,340 shares and 132,004 shares, respectively, were purchased by and distributed to employees at an average price of $81.82, $46.81 and $51.34 per share, respectively. At fiscal 2017 year-end, we had 424,882 shares of our common stock reserved for future issuance under the plan. Stock Award Plans We maintain a stock plan for which employees, service providers and non-employee directors are eligible participants. This plan, the 2011 Equity Incentive Plan (the "2011 Plan"), provides for a number of different equity-based grants, including options, time-based restricted stock units and performance restricted stock units. Under the 2011 Plan, Coherent may grant options and awards (time-based restricted stock units and performance restricted stock units) to purchase up to 6,747,691 shares of common stock, of which 4,950,603 shares remained available for grant at fiscal 2017 year-end. At fiscal 2017 year-end, all outstanding stock options and restricted stock units have been issued under plans approved by our shareholders. Historically option grants to employees vested over the four years from the original grant date. Since adoption of the 2011 Plan, no stock options have been granted to employees. Some vested options made to one non-employee director under a prior stock plan remain outstanding. Non-employee directors are automatically granted time-based restricted stock units upon first joining the Board of Directors and then upon reelection. New non-employee directors initially receive an award of restricted stock units valued at approximately $225,000 which vest over a two year period. The annual grant for non-employee directors is a value of approximately $225,000 in shares of restricted stock units that vest on February 15 of the calendar year following the grant. Restricted stock awards and restricted stock units are typically subject to vesting restrictions—either time-based or market-based conditions for vesting. Until restricted stock vests, shares (including those issuable upon vesting of the applicable restricted stock unit) are subject to forfeiture if employment or service to the Company terminates prior to the release of restrictions and cannot be transferred.
Fair Value of Stock Compensation We recognize compensation expense for all share-based payment awards based on the fair value of such awards. The expense is recognized on a straight-line basis per tranche over the respective requisite service period of the awards. Determining Fair Value Employee Stock Purchase Plan Valuation and amortization method—We estimate the fair value of employee stock purchase shares using the Black-Scholes-Merton option-pricing formula. This fair value is then amortized on a straight-line basis over the purchase period. Expected Term—The expected term represents the period of our employee stock purchase plan. Expected Volatility—Our process for computing expected volatility considers both historical volatility and market-based implied volatility; however our estimate of expected forfeitures is based on historical employee data and could differ from actual forfeitures. Risk-Free Interest Rate—The risk-free interest rate used in the Black-Scholes-Merton valuation method is based on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term. The fair values of shares purchased under the employee stock purchase plan for fiscal 2017, 2016 and 2015 were estimated using the following weighted-average assumptions:
Time-Based Restricted Stock Units Time-based restricted stock units are fair valued at the closing market price on the date of grant. Performance Restricted Stock Units We grant performance restricted stock units to officers and certain employees. The performance stock unit agreements provide for the award of performance stock units with each unit representing the right to receive one share of our common stock to be issued after the applicable award vesting period. The final number of units awarded, if any, for these performance grants will be determined as of the vesting dates, based upon our total shareholder return over the performance period compared to the Russell 1000 Index and could range from no units to a maximum of twice the initial award units. The weighted average fair value for these performance units was determined using a Monte Carlo simulation model incorporating the following weighted average assumptions:
We recognize the estimated cost of these awards, as determined under the simulation model, over the related service period of approximately 3 years, with no adjustment in future periods based upon the actual shareholder return over the performance period. Stock Compensation Expense The following table shows total stock-based compensation expense and related tax benefits included in the Consolidated Statements of Operations for fiscal 2017, 2016 and 2015 (in thousands):
As a result of our acquisition of Rofin on November 7, 2016, we made a payment of $15.3 million due to the cancellation of options held by employees of Rofin. The payment was allocated between total estimated merger consideration of $11.1 million and post-merger stock-based compensation expense of $4.2 million, based on the portion of the total service period of the underlying options that have not been completed by the merger date. Total stock-based compensation cost capitalized as part of inventory during fiscal 2017 was $3.6 million; $3.3 million was amortized into income during fiscal 2017, which includes amounts capitalized in fiscal 2017 and amounts carried over from fiscal 2016. Total stock-based compensation cost capitalized as part of inventory during fiscal 2016 was $2.7 million; $2.6 million was amortized into income during fiscal 2016, which includes amounts capitalized in fiscal 2016 and amounts carried over from fiscal 2015. At fiscal 2017 year-end, the total compensation cost related to unvested stock-based awards granted to employees under our stock plans but not yet recognized was approximately $31.7 million. We do not estimate forfeitures. This cost will be amortized on a straight-line basis over a weighted-average period of approximately 1.5 years. The stock option exercise tax benefits are reported in the statement of cash flows. The tax benefits result from tax deductions in excess of the stock-based compensation cost recognized and are determined on a grant-by-grant basis. During fiscal 2017, we recorded approximately $1.6 million of excess tax benefits as cash flows from financing activities. In fiscal 2016 and 2015, we did not generate any excess tax benefits as cash flows from financing activities. Stock Awards Activity At fiscal 2017, 2016 and 2015 year-end, we had 24,000, 33,500 and 86,000 shares subject to vested stock options outstanding. The vested stock options at fiscal 2017 are held by one non-employee director. The following table summarizes the activity of our time-based and performance restricted stock units for fiscal 2017, 2016 and 2015 (in thousands, except per share amounts):
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Restricted Stock Units are converted into the right to receive common stock upon vesting; prior to issuance, the Company permits the employee holders to satisfy their tax withholding requirements by net settlement, whereby the Company withholds a portion of the shares to cover the applicable taxes based on the fair market value of the Company's stock at the vesting date. The number of shares withheld to cover tax payments was 131,000 in fiscal 2017, 89,000 in fiscal 2016 and 91,000 in fiscal 2015; tax payments made were $15.7 million, $5.4 million and $5.3 million, respectively. |
Defined Benefit Plans (Notes) |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans | DEFINED BENEFIT PLANS As a result of the Rofin acquisition, we have assumed all assets and liabilities of Rofin’s defined benefit plans for the Rofin-Sinar Laser, GmbH ("RSL") and Rofin-Sinar Inc. ("RS Inc.") employees. The U.S. plan began in fiscal year 1995 and is partially funded. Any new employees hired after January 1, 2007, are not eligible for the RS Inc. pension plan. As is the customary practice with German companies, the German pension plan is unfunded. Any new employees hired after 2000 are not eligible for the RSL pension plan. The measurement date of these pension plans is September 30. For these pension plans, actuarial gains and losses are deferred into OCI and amortized over future periods. Effective January 1, 2012, the RS Inc. defined benefit plan was amended to exclude highly compensated employees, as defined by the Internal Revenue Service, from receiving future years of service under the RS Inc. defined benefit plan. A non-qualified defined benefit plan was created to replace the benefits lost by the employees that were otherwise excluded from the qualified defined benefit plan. In addition, we have defined benefit plans in South Korea, Japan, Spain and Italy, covering all full-time employees with at least one year of service, and a defined benefit plan in Germany covering two individuals. As is the customary practice with European and Asian companies, the plans are unfunded. We have elected to recognize all actuarial gains and losses on these plans immediately, as incurred. The measurement date of these defined benefit plans is September 30. For financial reporting purposes, the calculation of net periodic pension costs is based upon a number of actuarial assumptions including a discount rate for plan obligations, an assumed rate of return on pension assets and an assumed rate of compensation increase for employees covered by the plan. All of these assumptions were based upon management's judgment, considering all known trends and uncertainties. Actual results that differ from these assumptions would impact future expense recognition and the cash funding requirements of our defined benefit plans. Components of net periodic cost are as follows for the years ended September 30, 2017 and October 1, 2016 (in thousands):
The changes in projected benefit obligations and plan assets, as well as the ending balance sheet amounts for our defined benefit plans, are as follows (in thousands):
(1) The beginning of the year balances relate to plans held in South Korea, Japan, Italy and Germany. These were not disclosed in prior years as the net liability was not material. The information for plans with an accumulated benefit obligation in excess of plan assets is as follows (in thousands):
The weighted-average rates used to determine the net periodic benefit costs are as follows:
We recognize the over (under) funded status of the defined benefit plans in our consolidated balance sheets. We also recognize, in other comprehensive income (loss), certain gains and losses that arise for the period but are deferred under current pension accounting rules. A one percent change in the discount rate or the expected rate of return on plan assets would not have a material impact on the projected benefit obligation or the net periodic benefit cost. Expected benefit payments for each of the next five fiscal years and the five years aggregated thereafter is as follows (in thousands):
Our pension plan asset allocations at September 30, 2017 by asset category are as follows:
We employ a total return investment approach whereby a mix of equity, debt securities and government securities are used to maximize the long-term return of plan assets for a prudent level of risk. The intent of this strategy is to minimize plan expenses by maximizing investment returns within that prudent level of risk. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks as well as growth, value and small and large capitalizations. Additionally, cash balances are maintained at levels adequate to meet near-term plan expenses and benefit payments. Investment risk is measured and monitored on an ongoing basis through semi-annual investment portfolio reviews. Investments in our defined benefit plan are stated at fair value. Level 1 assets are valued using quoted market prices that represent the asset value of the shares held by the trusts. The level 2 assets are investments in pooled funds, which are valued using a model to reflect the valuation of their underlying assets that are publicly traded with observable values. The fair value of level 3 pension plan assets are measured by compiling the portfolio holdings and independently valuing the securities in those portfolios. The fair values of our pension plan assets, by level within the fair value hierarchy, at September 30, 2017 are as follows:
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Other Income (Expense), Net |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income (Expense), Net | OTHER INCOME (EXPENSE), NET Other income (expense) includes other-net which is comprised of the following (in thousands):
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | INCOME TAXES The provision for (benefit from) income taxes on income (loss) from continuing operations before income taxes consists of the following (in thousands):
The components of income (loss) from continuing operations before income taxes consist of (in thousands):
The reconciliation of the income tax expense at the U.S. Federal statutory rate (35.0%) to actual income tax expense is as follows (in thousands):
The effective tax rate on income from continuing operations before income taxes for fiscal 2017 of 30.9% was lower than the statutory rate of 35.0%. This was primarily due to differences related to the benefit of income subject to foreign tax rates that are lower than U.S. tax rates including the Singapore tax exemption, the benefit of foreign tax credits and federal research and development tax credits, the benefit of a domestic manufacturing deduction under IRC Section 199 and the release of certain tax reserves due to audit settlement. These amounts are partially offset by Rofin transaction costs not deductible for tax purposes, tax costs of Rofin restructuring, ASC 740-10 (formerly FIN48) tax liabilities for transfer pricing, stock-based compensation not deductible for tax purposes and limitations on the deductibility of compensation under IRC Section 162(m). In October 2016, Coherent Singapore received an amended Pioneer Status tax exemption from the Singapore authorities effective from fiscal 2012 through fiscal 2021. The tax holiday continues to be conditional upon our meeting certain revenue, business spending and employment thresholds. The impact of this tax exemption decreased Singapore income taxes by approximately $1.1 million and $0.7 million in fiscal 2017 and fiscal 2016, respectively. There is no tax benefit for fiscal 2015 due to the utilization of net operating loss. The significant components of deferred tax assets and liabilities were (in thousands):
In determining our fiscal 2017 and 2016 tax provisions under ASC Subtopic 740, we calculated the deferred tax assets and liabilities for each separate tax entity. We then considered a number of factors including the positive and negative evidence regarding the realization of our deferred tax assets to determine whether a valuation allowance should be recognized with respect to our deferred tax assets. We determined that a valuation allowance was appropriate for a portion of the deferred tax assets of our California and certain state research and development tax credits, foreign tax attributes and foreign net operating losses at fiscal 2017 and 2016 year-ends. During fiscal 2017, we increased our valuation allowance on deferred tax assets by $11.1 million to $28.7 million, primarily due to the increase in California and other states research and development tax credits and the release of R&D tax reserves for California and other states, which are not expected to be recognized. The Company had U.S. federal deferred tax assets related to research and development credits, foreign tax credits and other tax attributes that can be used to offset federal taxable income in future periods. These credit carryforwards will expire if they are not used within certain time periods. As of September 30, 2017, management determined that there is sufficient positive evidence to conclude that it is more likely than not sufficient taxable income will exist in the future allowing us to recognize these deferred tax assets. The net deferred tax asset is classified on the consolidated balance sheets as follows (in thousands):
We have various tax attribute carryforwards which include the following:
We are subject to taxation and file income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions. For U.S. federal income tax purposes, all years prior to fiscal 2011 are closed. In September 2017, the Internal Revenue Service (IRS) completed its audit of Coherent Inc.’s fiscal 2013 tax return with no adjustment. The extension of the statutes of limitations for its fiscal 2011 and 2012 tax returns will be closed on June 30, 2018. In our major foreign jurisdictions and our major state jurisdictions, the years prior to fiscal 2011 and 2013, respectively, are closed to examination. Earlier years in our various jurisdictions may remain open for adjustment to the extent that we have tax attribute carryforwards from those years. In July 2015 and March 2016, Coherent Kaiserslautern GmbH (formerly Lumera Laser GmbH) received tax audit notices for the fiscal years 2010 to 2014. The audit began in August 2015. We acquired the shares of Lumera Laser GmbH in December 2012 and, pursuant to the terms of the acquisition agreement, we should not have responsibility for any assessments related to the pre-acquisition period. In July, 2016, Coherent Holding GmbH and Coherent Deutschland GmbH each received a tax audit notice for the fiscal years 2011 to 2014. The audit began in August 2016. In November 2016, Coherent GmbH, Coherent LaserSystems GmbH & Co. KG and Coherent Germany GmbH received audit notices for the period that they were in existence during the fiscal years 2011 through 2014. The audit work began in January 2017. In the fourth quarter of fiscal 2017, all German tax audits were extended to fiscal 2015 and are currently in progress. We regularly engage in discussions and negotiations with tax authorities regarding tax matters in various jurisdictions and management believes that it has adequately provided reserves for any adjustments that may result from tax examinations. A reconciliation of the change in gross unrecognized tax benefits, excluding interest and penalties, is as follows (in thousands):
As of September 30, 2017, the total amount of gross unrecognized tax benefits including gross interest and penalties was $50.4 million, of which $34.7 million, if recognized, would affect our effective tax rate. Our total gross unrecognized tax benefit was classified as a long-term taxes payable in the consolidated balance sheets after reduction by certain deferred tax assets. We include interest and penalties related to unrecognized tax benefits within the provision for income taxes. As of September 30, 2017, the total amount of gross interest and penalties accrued was $2.8 million and it is classified as long-term taxes payable in the consolidated balance sheets. As of October 1, 2016, we had accrued $0.2 million for the gross interest and penalties and it is classified as long-term taxes payable in the consolidated balance sheets. Management believes that it has adequately provided for any adjustments that may result from tax examinations. We regularly engage in discussions and negotiations with tax authorities regarding tax matters in various jurisdictions. Although the timing of resolution, settlement and closure of audits is not certain, we do not believe it is reasonably possible that our unrecognized tax benefits will materially change in the next 12 months. A summary of the fiscal tax years that remain subject to examination, as of September 30, 2017, for our major tax jurisdictions is:
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Segment and Geographic Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment and Geographic Information | SEGMENT AND GEOGRAPHIC INFORMATION As a result of the acquisition of Rofin-Sinar Technologies Inc. ("Rofin") in the first quarter of fiscal 2017 (see discussion below), we reorganized our prior two reporting segments (Specialty Laser Systems and Commercial Lasers and Components) into two new reporting segments for the combined company: OEM Laser Sources (“OLS”) and Industrial Lasers & Systems (“ILS”). This segment reorganization was based upon the organizational structure of the combined company and how the chief operating decision maker ("CODM") receives and utilizes information provided to allocate resources and make decisions. Accordingly, our segment information was restated retroactively in the first quarter of fiscal 2017. This segmentation reflects the go-to-market strategies and synergies for our broad portfolio of laser technologies and products. While both segments deliver cost-effective, highly reliable photonics solutions, the OLS business segment is focused on high performance laser sources and complex optical sub-systems, typically used in microelectronics manufacturing, medical diagnostics and therapeutic medical applications, as well as in scientific research. Our ILS business segment delivers high performance laser sources, sub-systems and tools primarily used for industrial laser materials processing, serving important end markets like automotive, machine tool, consumer goods and medical device manufacturing. Rofin's operating results have been included primarily in our Industrial Lasers & Systems segment. We have identified OLS and ILS as operating segments for which discrete financial information is available. Both units have dedicated engineering, manufacturing, product business management and product line management functions. A small portion of our outside revenue is attributable to projects and recently developed products for which a segment has not yet been determined. The associated direct and indirect costs are presented in the category of Corporate and other, along with other corporate costs as described below. Our Chief Executive Officer has been identified as the CODM as he assesses the performance of the segments and decides how to allocate resources to the segments. Income from operations is the measure of profit and loss that our CODM uses to assess performance and make decisions. As assets are not a measure used to assess the performance of the company by the CODM, asset information is not tracked or compiled by segment and is not available to be reported in our disclosures. Income from operations represents the net sales less the cost of sales and direct operating expenses incurred within the operating segments as well as allocated expenses such as shared sales and manufacturing costs. We do not allocate to our operating segments certain operating expenses which we manage separately at the corporate level. These unallocated costs include stock-based compensation and corporate functions (certain research and development, management, finance, legal and human resources) and are included in the results below under Corporate and other in the reconciliation of operating results. Management does not consider unallocated Corporate and other costs in its measurement of segment performance. The following table provides net sales and income from continuing operations for our operating segments and a reconciliation of our total income from continuing operations to income from continuing operations before income taxes (in thousands):
Geographic Information Our foreign operations consist primarily of manufacturing facilities and sales offices in Europe and Asia-Pacific. Sales, marketing and customer service activities are conducted through sales subsidiaries throughout the world. Geographic sales information for fiscal 2017, 2016 and 2015 is based on the location of the end customer. Geographic long-lived asset information presented below is based on the physical location of the assets at the end of each year. Sales to unaffiliated customers are as follows (in thousands):
Long-lived assets, which include all non-current assets other than goodwill, intangibles, non-current restricted cash and deferred taxes, by geographic region, are as follows (in thousands):
Major Customers We had one major customer who accounted for 22.9%, 13.1% and 17.2% of consolidated revenue during fiscal 2017, 2016 and 2015, respectively. We had another major customer who accounted for 16.4% of consolidated revenue during fiscal 2016. Both customers purchased primarily from our OLS segment. |
Restructuring Charges (Notes) |
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Restructuring Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Charges | RESTRUCTURING CHARGES In the first quarter of fiscal 2017, we began the implementation of planned restructuring activities in connection with the acquisition of Rofin. These activities in fiscal 2017 primarily relate to exiting our legacy high power fiber laser product line, change of control payments to Rofin officers, the exiting of two product lines acquired in the acquisition of Rofin, realignment of our supply chain due to segment reorganization and consolidation of sales and distribution offices. These activities resulted in charges primarily for employee termination, other exit related costs associated with the write-off of property and equipment and inventory and early lease termination costs. The following table presents our current liability as accrued on our balance sheets for restructuring charges. The table sets forth an analysis of the components of the restructuring charges and payments and other deductions made against the accrual for fiscal 2017 (in thousands):
At September 30, 2017, $1.3 million of accrued severance related costs were included in other current liabilities. The current year severance related costs are primarily comprised of severance pay for employees being terminated due to the transition of activities out of Rofin including change of control payments to Rofin officers and the exit from certain product lines as well as the consolidation of sales and distribution offices. The current year asset write-offs are primarily comprised of write-offs of inventory and equipment due to exiting our legacy high power fiber laser product line and inventory write-offs due to the exit of other Rofin product lines. By segment, $11.4 million of restructuring costs was incurred in the ILS segment and $0.9 million was incurred in the OLS segment in fiscal 2017. Restructuring charges are recorded in cost of sales, research and development and selling, general and administrative expenses in our consolidated statements of operations. |
Discontinued Operations and Assets Held For Sale |
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Discontinued Operations and Assets Held For Sale | Discontinued Operations Discontinued operations are comprised of Rofin’s low power CO2 laser business based in Hull, United Kingdom (the "Hull Business"), that we acquired as part of our acquisition of Rofin. As a condition of the acquisition, we were required to divest and hold separate the Hull Business and will report this business separately as a discontinued operation until it is divested. In the third quarter of fiscal 2017, we entered into an agreement with a potential purchaser of the Hull Business and submitted our proposed purchaser to the European Commission for its review and approval, including the terms under which the purchase and operation of the Hull Business will occur. We completed the divestiture of the Hull Business on October 11, 2017, after receiving approval for the terms of the sale from the European Commission. See Note 19, "Subsequent Event". For financial statement purposes, the results of operations for this discontinued business have been segregated from those of the continuing operations and are presented in our consolidated financial statements as discontinued operations and the net assets of the remaining discontinued business have been presented as current assets and current liabilities held for sale. The results of discontinued operations for fiscal 2017 are as follows (in thousands):
Assets Held for Sale In the third quarter of fiscal 2017, we re-evaluated the carrying value of the Hull Business that has been presented as assets held for sale since the acquisition. Approximately $33.9 million of goodwill was reallocated from the assets held for sale to the remaining business acquired as we are within the remeasurement period. Current assets and current liabilities classified as held for sale as of September 30, 2017 related to discontinued operations are as follows (in thousands):
In the fourth quarter of fiscal 2017, management decided to sell several entities that we acquired in the Rofin acquisition. Although the sale was not completed as of the end of fiscal 2017, we recorded a non-cash impairment charge of $2.9 million to operating expense in our results of operations in the fourth quarter of fiscal 2017 to reduce our carrying value in these entities to fair value. Current assets and current liabilities classified as held for sale as of September 30, 2017 related to continuing operations are as follows (in thousands):
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Subsequent Events |
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Subsequent Events [Abstract] | |
Subsequent Events | 19. SUBSEQUENT EVENT As a condition of the acquisition, we were required to hold separate and divest Rofin’s low power CO2 laser business based in Hull, United Kingdom (the "Hull Business"), and have reported this business separately as a discontinued operation until its divestiture. In the third quarter of fiscal 2017, we entered into an agreement with a potential purchaser of the Hull Business and submitted our proposed purchaser to the European Commission for its review and approval, including the terms under which the purchase and operation of the Hull Business will occur. We completed the divestiture of the Hull Business on October 11, 2017, after receiving approval for the terms of the sale from the European Commission. We expect to record an immaterial gain on the divestiture in the first quarter of fiscal 2018. |
Quarterly Financial Information |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information (Unaudited) | QUARTERLY FINANCIAL INFORMATION (UNAUDITED) Summarized quarterly financial data for the years ended September 30, 2017 and October 1, 2016 are as follows (in thousands, except per share amounts):
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Significant Accounting Policies (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Fiscal Year | Fiscal Year Our fiscal year ends on the Saturday closest to September 30. Fiscal years 2017, 2016 and 2015 ended on September 30, 2017, October 1, 2016 and October 3, 2015, respectively, and are referred to in these financial statements as fiscal 2017, fiscal 2016, and fiscal 2015 for convenience. Fiscal years 2017 and 2016 include 52 weeks and fiscal year 2015 includes 53 weeks. The fiscal years of the majority of our international subsidiaries end on September 30. Accordingly, the financial statements of these subsidiaries as of that date and for the years then ended have been used for our consolidated financial statements. Management believes that the impact of the use of different year-ends is immaterial to our consolidated financial statements taken as a whole. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with Generally Accepted Accounting Principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Coherent, Inc. and its direct and indirect subsidiaries (collectively, the "Company", "we", "our", "us" or "Coherent"). Intercompany balances and transactions have been eliminated. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of certain of our financial instruments including accounts receivable, accounts payable and accrued liabilities approximate fair value due to their short maturities. Short-term investments are comprised of available-for-sale securities, which are carried at fair value. Other non-current assets include trading securities and life insurance contracts related to our deferred compensation plans; trading securities are carried at fair value and life insurance contracts are carried at cash surrender values, which due to their ability to be converted to cash at that amount, approximate their fair values. Foreign exchange contracts are stated at fair value based on prevailing financial market information. Short-term and long-term debt is carried at amortized cost, which approximates its fair value based on borrowing rates currently available to us for loans with similar terms. |
Cash Equivalents | Cash Equivalents All highly liquid investments with maturities of three months or less at the time of purchase are classified as cash equivalents. At fiscal 2017 year-end, cash and cash equivalents included cash, money market funds, commercial paper and U.S. agency obligations. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that may potentially subject us to concentrations of credit risk consist principally of cash equivalents, short-term investments and accounts receivable. At fiscal 2017 year-end, the majority of our short-term investments were in U.S. Treasury and agency obligations and corporate notes and obligations. Cash equivalents and short-term investments are maintained with several financial institutions and may exceed the amount of insurance provided on such balances. At September 30, 2017, we held cash and cash equivalents and short-term investments outside the U.S. in certain of our foreign operations totaling approximately $300.0 million, $263.2 million of which was denominated in currencies other than the U.S. dollar. The majority of our accounts receivable are derived from sales to customers for commercial applications. We perform ongoing credit evaluations of our customers' financial condition and limit the amount of credit extended when deemed necessary but generally require no collateral. In certain instances, we may require customers to issue a letter of credit. We maintain reserves for potential credit losses. |
Derivative Financial Instruments | Derivative Financial Instruments Our primary objective for holding derivative financial instruments is to manage currency exchange rate risk. Principal currencies hedged include the Euro, South Korean Won, Japanese Yen, Chinese Renminbi, Singapore Dollar, British Pound and Malaysian Ringgit. Our derivative financial instruments are recorded at fair value, on a gross basis, and are included in other current assets and other current liabilities. Our accounting policies for derivative financial instruments are based on whether they meet the criteria for designation as a cash flow hedge. Changes in the fair value of these cash flow hedges that are highly effective are recorded in accumulated other comprehensive income and reclassified into earnings in the same line item on the consolidated statements of operations as the impact of the hedged transaction during the period in which the hedged transaction affects earnings. The ineffective portion of cash flow hedges are recognized immediately in other income and expenses. Derivatives that we designate as cash flow hedges are classified in the consolidated statements of cash flows in the same section as the underlying item, primarily within cash flows from operating activities. The changes in fair value of derivative instruments that are not designated as hedges are recognized immediately in other income (expense). We formally document all relationships between hedging instruments and hedged items, as well as the risk management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives that are designated as cash-flow hedges to specific forecasted transactions. We also assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of the hedged items. |
Accounts Receivable Allowance | Accounts Receivable Allowances Accounts receivable allowances reflect our best estimate of probable losses inherent in our accounts receivable balances, including both losses for uncollectible accounts receivable and sales returns. We regularly review allowances by considering factors such as historical experience, credit quality, the age of the accounts receivable balances and current economic conditions that may affect a customer's ability to pay. |
Inventories | Inventories Inventories are stated at the lower of cost (first-in, first-out or weighted average cost) or market. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost and are depreciated or amortized using the straight-line method. |
Asset Retirement Obligations | Asset Retirement Obligations The fair value (the present value of estimated cash flows) of a liability for an asset retirement obligation is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The fair value of the liability is added to the carrying amount of the associated asset and this additional carrying amount is depreciated over the life of the asset. All of our existing asset retirement obligations are associated with commitments to return the property to its original condition upon lease termination at various sites and costs to clean up and dispose of certain fixed assets at our Sunnyvale, California site. |
Long-lived Assets | Long-lived Assets We evaluate the carrying value of long-lived assets, including intangible assets, whenever events or changes in business circumstances or our planned use of long-lived assets indicate that their carrying amounts may not be fully recoverable or that their useful lives are no longer appropriate. Reviews are performed to determine whether the carrying values of long-lived assets are impaired based on a comparison to the undiscounted expected future net cash flows. If the comparison indicates that impairment exists, long-lived assets that are classified as held and used are written down to their respective fair values. When long-lived assets are classified as held for sale, they are written down to their respective fair values less costs to sell. Significant management judgment is required in the forecast of future operating results that is used in the preparation of expected undiscounted cash flows. |
Goodwill | Goodwill Goodwill is tested for impairment on an annual basis and between annual tests in certain circumstances, and written down when impaired (See Note 7, "Goodwill and Intangible Assets"). In testing for impairment, we have the option to first assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount. Moreover, an entity can bypass the qualitative assessment for any reporting unit in any period and proceed directly to the impairment test, and then resume performing the qualitative assessment in any subsequent period. In both our fiscal 2017 and 2016 annual testing, we performed a qualitative assessment of the goodwill for our OLS reporting unit using the opening balance sheet as of the first day of the fourth quarter and noted no impairment. For the ILS reporting unit, we elected to bypass the qualitative assessment and proceed directly to performing the goodwill impairment test. Accordingly, we performed our impairment test using the opening balance sheet as of the first day of the fourth quarter and noted no impairment in both fiscal 2017 and 2016. (See Note 7, "Goodwill and Intangible Assets" for additional discussion of the fiscal 2017 analysis. |
Intangible Assets | Intangible Assets Intangible assets, including acquired existing technology, customer relationships, trade name and patents are amortized on a straight-line basis over their estimated useful lives, currently 3 year to 15 years (See Note 7, "Goodwill and Intangible Assets"). |
Warranty Reserves | Warranty Reserves We provide warranties on the majority of our product sales and reserves for estimated warranty costs are recorded during the period of sale. The determination of such reserves requires us to make estimates of product return rates and expected costs to repair or replace the products under warranty. We currently establish warranty reserves based on historical warranty costs for each product line. The weighted average warranty period covered is approximately 15 months. If actual return rates and/or repair and replacement costs differ significantly from our estimates, adjustments to cost of sales may be required in future periods. |
Loss contingencies | Loss Contingencies We are subject to the possibility of various loss contingencies arising in the ordinary course of business. We consider the likelihood of loss or impairment of an asset, or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss, in determining loss contingencies. An estimated loss contingency is accrued when it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. If we determine that a loss is possible and the range of the loss can be reasonably determined, then we disclose the range of the possible loss. We regularly evaluate current information available to us to determine whether an accrual is required, an accrual should be adjusted or a range of possible loss should be disclosed. |
Revenue Recognition | Revenue Recognition When a sales arrangement contains multiple elements, such as products and/or services, we allocate revenue to each element based on a selling price hierarchy. Using the selling price hierarchy, we determine the selling price of each deliverable using vendor specific objective evidence (“VSOE”), if it exists, and otherwise third-party evidence (“TPE”). If neither VSOE nor TPE of selling price exists, we use estimated selling price (“ESP”). We generally expect that we will not be able to establish TPE due to the nature of the markets in which we compete, and, as such, we typically will determine selling price using VSOE or if not available, ESP. Our basis for establishing VSOE of a deliverable's selling price consists of standalone sales transactions when the same or similar product or service is sold separately. However, when services are never sold separately, such as product installation services, VSOE is based on the product's estimated installation hours based on historical experience multiplied by the standard service billing rate. In determining VSOE, we require that a substantial majority of the selling price for a product or service fall within a reasonably narrow price range, as defined by us. We also consider the geographies in which the products or services are sold, major product and service groups, and other environmental variables in determining VSOE. Absent the existence of VSOE and TPE, our determination of a deliverable's ESP involves evaluating several factors based on the specific facts and circumstances of these arrangements, which include pricing strategy and policies driven by geographies, market conditions, competitive landscape, correlation between proportionate selling price and list price established by management having the relevant authority, and other environmental variables in which the deliverable is sold. For multiple element arrangements which include extended maintenance contracts, we allocate and defer the amount of consideration equal to the separately stated price and recognize revenue on a straight-line basis over the contract period. We recognize revenue when all four revenue recognition criteria have been met: persuasive evidence of an arrangement exists, the product has been delivered or the service has been rendered, the price is fixed or determinable and collection is reasonably assured. Revenue from product sales is recorded when all of the foregoing conditions are met and risk of loss and title passes to the customer. Sales to customers are generally not subject to any price protection or return rights. The majority of our sales are made to original equipment manufacturers ("OEMs"), distributors, representatives and end-users in the non-scientific market. Sales made to these customers do not require installation of the products by us and are not subject to other post-delivery obligations, except in occasional instances where we have agreed to perform installation or provide training. In those instances, we defer revenue related to installation services or training until these services have been rendered. We allocate revenue from multiple element arrangements to the various elements based upon relative fair values. Our sales to distributors, representatives and end-user customers typically do not have customer acceptance provisions and only certain of our sales to OEM customers and integrators have customer acceptance provisions. Customer acceptance is generally limited to performance under our published product specifications. For the few product sales that have customer acceptance provisions because of higher than published specifications, (1) the products are tested and accepted by the customer at our site or the customer accepts the results of our testing program prior to shipment to the customer, or (2) the revenue is deferred until customer acceptance occurs. Sales to end-users in the scientific market typically require installation and, thus, involve post-delivery obligations; however, our post-delivery installation obligations are not essential to the functionality of our products. We defer revenue related to installation services until completion of these services. For most products, training is not provided; therefore, no post-delivery training obligation exists. However, when training is provided to our customers, it is typically priced separately and is recognized as revenue as these services are provided. We record taxes collected on revenue-producing activities on a net basis. |
Research and Development | Research and Development Research and development expenses include salaries, contractor and consultant fees, supplies and materials, as well as costs related to other overhead such as depreciation, facilities, utilities and other departmental expenses. The costs we incur with respect to internally developed technology and engineering services are included in research and development expenses as incurred as they do not directly relate to any particular licensee, license agreement or license fee. We treat third party and government funding of our research and development activity, where we are the primary beneficiary of such work conducted, as a reduction of research and development cost. |
Foreign Currency Translation | Foreign Currency Translation The functional currencies of our foreign subsidiaries are generally their respective local currencies. Accordingly, gains and losses from the translation of the financial statements of the foreign subsidiaries are reported as a separate component of accumulated other comprehensive income ("OCI"). Foreign currency transaction gains and losses are included in earnings. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Accumulated other comprehensive income (net of tax) at fiscal 2017 year-end is substantially comprised of accumulated translation adjustments of $16.3 million and deferred actuarial gains on pension plans of $3.6 million. Accumulated other comprehensive income (loss) (net of tax) at fiscal 2016 year-end is substantially comprised of accumulated translation adjustments of $(8.6) million and unrealized gain on marketable equity securities of $3.3 million. |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed based on the weighted average number of shares outstanding during the period, excluding unvested restricted stock. Diluted earnings per share is computed based on the weighted average number of shares outstanding during the period increased by the effect of dilutive employee stock awards, including stock options, restricted stock awards and stock purchase contracts, using the treasury stock method. |
Stock-Based Compensation | Stock-Based Compensation We account for stock-based compensation using the fair value of the awards granted. We value restricted stock units using the intrinsic value method, which is based on the fair market value price on the grant date. We use a Monte Carlo simulation model to estimate the fair value of performance restricted stock units. We amortize the fair value of stock awards on a straight-line basis over the requisite service periods of the awards, which are generally the vesting periods. See Note 12, "Employee Stock Award and Benefit Plans" for a description of our stock-based employee compensation plans and the assumptions we use to calculate the fair value of stock-based employee compensation. |
Shipping and Handling Costs | Shipping and Handling Costs We record costs related to shipping and handling of net sales in cost of sales for all periods presented. Shipping and handling fees billed to customers are included in net sales. Custom duties billed to customers are recorded in cost of sales |
Income Taxes | Income Taxes As part of the process of preparing our consolidated financial statements, we are required to estimate our income tax provision (benefit) in each of the jurisdictions in which we operate. This process involves us estimating our current income tax provision (benefit) together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. We account for uncertain tax issues pursuant to ASC 740-10 Income Taxes, which creates a single model to address accounting for uncertainty in tax positions by prescribing a minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. This standard provides a two-step approach for evaluating tax positions. The first step, recognition, occurs when a company concludes (based solely on the technical aspects of the matter) that a tax position is more likely than not to be sustained upon examination by a taxing authority. The second step, measurement, is only considered after step one has been satisfied and measures any tax benefit at the largest amount that is deemed more likely than not to be realized upon ultimate settlement of the uncertainty. These determinations involve significant judgment by management. Tax positions that fail to qualify for initial recognition are recognized in the first subsequent interim period that they meet the more likely than not standard or when they are resolved through negotiation or litigation with factual interpretation, judgment and certainty. Tax laws and regulations themselves are complex and are subject to change as a result of changes in fiscal policy, changes in legislation, evolution of regulations and court filings. Therefore, the actual liability for U.S. or foreign taxes may be materially different from our estimates, which could result in the need to record additional tax liabilities or potentially to reverse previously recorded tax liabilities. We record a valuation allowance to reduce our deferred tax assets to an amount that more likely than not will be realized. While we have considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance, in the event we were to determine that we would be able to realize our deferred tax assets in the future in excess of our net recorded amount, an adjustment to the allowance for the deferred tax asset would increase income in the period such determination was made. Likewise, should we determine that we would not be able to realize all or part of our net deferred tax asset in the future, an adjustment to the allowance for the deferred tax asset would be charged to income in the period such determination was made. Federal and state income taxes have not been provided on a portion of the unremitted earnings of foreign subsidiaries because such earnings are intended to be permanently reinvested. The total amount of unremitted earnings of foreign subsidiaries for which we have not yet recorded federal and state income taxes was approximately $1,150 million and $574 million at fiscal 2017 and 2016 year-end, respectively. The amount of federal and state income taxes that would be payable upon repatriation of such earnings is not practicably determinable. We have not, nor do we anticipate the need to, repatriate funds to the United States to satisfy domestic liquidity needs arising in the ordinary course of business. |
Adoption of New Accounting Pronouncement and Recently Issued Accounting Pronouncements | Adoption of New Accounting Pronouncements In January 2017, the FASB issued amended guidance that simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the existing guidance, when computing the implied fair value of goodwill under Step 2, an entity is required to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Under the amendments in this update, an entity should simply perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. The new standard will become effective for our fiscal year 2021 which begins on October 4, 2020. We elected to early adopt the standard in the fourth quarter of fiscal 2017 and the adoption resulted in no impact on our consolidated financial statements and disclosures. In November 2016, the FASB issued amended guidance that require a statement of cash flows to explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new standard will become effective for our fiscal year beginning September 30, 2018. We elected to early adopt the standard in the first quarter of fiscal 2017 on a retrospective basis with no impact on our consolidated financial statements and disclosures. In April 2015, the FASB issued amended guidance that simplifies the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amended guidance. The new standard became effective for our fiscal year beginning October 2, 2016. We elected to early adopt the standard in the second quarter of fiscal 2016 and had recorded debt issuance costs of $5.2 million in Other assets as of October 1, 2016 for the debt commitment we entered into in the second quarter of fiscal 2016 because the debt was not outstanding as of October 1, 2016. The debt issuance costs related to the term loan facility were reclassified to debt in the first quarter of fiscal 2017 when we drew down the debt. Recently Issued Accounting Pronouncements In August 2017, the FASB issued amended guidance to address current U.S. GAAP's limitation on how an entity can designate the hedged risk in certain cash flow and fair value hedging relationships. This amendment better aligns the entity's risk management activities and financial reporting for hedging relationships through changes to both designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendment made specific improvements on hedge accounting for risk components in hedging relationships involving nonfinancial risk and interest rate risk for cash flow hedges of forecasted purchases or sales of a nonfinancial asset, cash flow hedges of interest rate risk of variable-rate financial instruments and fair value hedges of interest rate risk. Upon adoption, for cash flow and net investment hedges existing, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the amendment. The amended presentation and disclosure guidance is required only prospectively. The new standard will become effective for our fiscal year 2020 which begins on September 29, 2019. We are currently assessing the impact of this amended guidance. In May 2017, the FASB issued amended guidance about which changes to the terms or conditions of a share-based payment require an entity to apply modification accounting. Under the new guidance, an entity should account for the effects of a modification unless, comparing to the original award prior to modification, the fair value, the vesting conditions and the classification as equity or as a liability of the modified award are all the same. The amendments in this update should be applied prospectively to an award modified on or after the adoption date. The new standard will become effective for our fiscal year 2019 which begins on September 30, 2018. We do not expect the adoption of this standard to have a material impact on our financial statements. In October 2016, the FASB issued amended guidance that improves the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Under the new guidance, an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The new standard will become effective in the first quarter of our fiscal 2019. We are currently assessing the impact of this amended guidance and are planning to adopt it in the first quarter of fiscal 2018. In May 2016, accounting guidance was issued to clarify the not yet effective revenue recognition guidance issued in May 2014. This additional guidance does not change the core principle of the revenue recognition guidance issued in May 2014, rather, it provides clarification of accounting for collections of sales taxes as well as recognition of revenue (i) associated with contract modifications, (ii) for noncash consideration, and (iii) based on the collectability of the consideration from the customer. The guidance also specifies when a contract should be considered “completed” for purposes of applying the transition guidance. The effective date and transition requirements for this guidance are the same as the effective date and transition requirements for the guidance previously issued in 2014, which is effective for our fiscal year 2019 which begins on September 30, 2018. We are currently evaluating the new guidance and have not determined the impact this standard may have on our financial statements nor have we decided upon the method of adoption. In March 2016, the FASB issued amended guidance that simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. Under the new guidance, an entity recognizes all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement. This change eliminates the notion of the APIC pool and significantly reduces the complexity and cost of accounting for excess tax benefits and tax deficiencies. The new standard will become effective for our fiscal year beginning October 1, 2017. Upon our adoption in the first quarter of fiscal 2018, we expect to recognize a windfall tax benefit as a cumulative effect adjustment increase to our opening retained earnings of approximately $20.0 million together with a comparable increase in deferred tax assets. In February 2016, the FASB issued amended guidance to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new guidance clarifies the criteria for distinguishing between a finance lease and operating lease, as well as classification between the two types of leases, which is substantially unchanged from the previous lease guidance. Further, the new guidance requires a lessee to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset, initially measured at the present value of the lease payments. For finance leases, a lessee should recognize interest on the lease liability separately from amortization of the right-of-use asset. For operating leases, a lessee should recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities. The new standard will become effective for our fiscal year 2020 which begins on September 29, 2019. We are currently assessing the impact of this amended guidance and the timing of adoption. In January 2016, the FASB issued amended guidance that revises the recognition and measurement of financial instruments. The new guidance requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The new standard will become effective for our fiscal year 2019 which begins on September 30, 2018. We are currently assessing the impact of this amended guidance and the timing of adoption. |
Significant Accounting Policies (Tables) |
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Schedule of activity in accounts receivable allowance | Activity in accounts receivable allowance is as follows (in thousands):
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Schedule of inventories | Inventories are stated at the lower of cost (first-in, first-out or weighted average cost) or market. Inventories are as follows (in thousands):
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Schedule of property and equipment cost, accumulated depreciation and amortization and estimated useful lives | Cost, accumulated depreciation and amortization, and estimated useful lives are as follows (dollars in thousands):
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Schedule of reconciliation of changes in asset retirement liability | The following table reconciles changes in our asset retirement liability for fiscal 2017 and 2016 (in thousands):
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Schedule of components of reserve for warranty costs | Components of the reserve for warranty costs during fiscal 2017, 2016 and 2015 were as follows (in thousands):
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Schedule of information necessary to calculate basic and diluted earnings (loss) per share | The following table presents information necessary to calculate basic and diluted earnings per share (in thousands, except per share data):
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Business Combinations (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of business acquisitions, by acquisition | Our allocation of the purchase price is as follows (in thousands):
Our allocation of the purchase price is as follows (in thousands):
Our allocation of the purchase price is as follows (in thousands):
The total purchase consideration allocated to net assets acquired was approximately $936.3 million and consisted of the following (in thousands):
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Schedule of pro forma information | The actual results may differ significantly from the pro forma results presented here due to many factors.
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Fair Values (Tables) |
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Sep. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of financial assets and liabilities measured at fair value | Financial assets and liabilities measured at fair value as of September 30, 2017 and October 1, 2016 are summarized below (in thousands):
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Short-Term Investments (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of cash, cash equivalents and short-term investments | Cash, cash equivalents and short-term investments consist of the following (in thousands):
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Schedule of amortized cost and estimated fair value of available-for-sale investments in debt securities | The amortized cost and estimated fair value of available-for-sale investments in debt securities as of September 30, 2017 and October 1, 2016 classified as short-term investments on our consolidated balance sheets, were as follows (in thousands):
(1) Classified as short-term investments because these securities are highly liquid and can be sold at any time. |
Derivative Instruments and Hedging Activities (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of outstanding notional contract and fair value amount of hedge contracts | The outstanding notional contract and fair value asset (liability) amounts of non-designated hedge contracts, with maximum maturity of two months, are as follows (in thousands):
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Goodwill and Intangible Assets (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in carrying amount of goodwill by segment | The changes in the carrying amount of goodwill by segment for fiscal 2017 and 2016 are as follows (in thousands):
(1) Gross amount of goodwill for our ILS segment was $328.5 million at September 30, 2017 and $17.4 million at October 1, 2016, respectively. At both September 30, 2017 and October 1, 2016, the accumulated impairment loss for the ILS reporting unit was $13.0 million reflecting an impairment charge in fiscal 2009. (2) Gross amount of goodwill for our OLS segment was $110.9 million and $105.7 million at September 30, 2017 and October 1, 2016, respectively. At both September 30, 2017 and October 1, 2016, the accumulated impairment loss for the OLS reporting unit was $8.7 million reflecting impairment charges in fiscal 2003 and fiscal 2009. |
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Schedule of components of amortizable intangible assets | The components of our amortizable intangible assets are as follows (in thousands):
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Schedule of estimated amortization expense | Estimated amortization expense for the next five fiscal years and all years thereafter are as follows (in thousands):
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Balance Sheet Details (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of prepaid expenses and other assets | Prepaid expenses and other assets consist of the following (in thousands):
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Schedule of other assets | Other assets consist of the following (in thousands):
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Schedule of other liabilities | Other current liabilities consist of the following (in thousands):
Other long-term liabilities consist of the following (in thousands):
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Borrowings Short term borrowing and current portion of long term debt (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of short-term debt | Short-term borrowings and current portion of long-term obligations consist of the following (in thousands):
(1) Net of debt issuance costs of $4.7 million. |
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Schedule of long-term debt | Long-term obligations consist of the following (in thousands):
(1) Net of debt issuance costs of $20.4 million. |
Commitments and Contingencies (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of future minimum payments under non-cancelable operating leases | Future minimum payments under our non-cancelable operating leases at September 30, 2017 are as follows (in thousands):
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Employee Stock Award and Benefit Plans (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of deferred compensation plans' investments and liabilities | These investments and the liability to the employees were as follows (in thousands):
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Schedule of weighted-average assumptions used to estimate fair value of stock options granted and shares purchased | The fair values of shares purchased under the employee stock purchase plan for fiscal 2017, 2016 and 2015 were estimated using the following weighted-average assumptions:
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Schedule of Share-based Payment Award, Restricted Stock Units, Valuation Assumptions | The weighted average fair value for these performance units was determined using a Monte Carlo simulation model incorporating the following weighted average assumptions:
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Schedule of stock-based compensation expense | The following table shows total stock-based compensation expense and related tax benefits included in the Consolidated Statements of Operations for fiscal 2017, 2016 and 2015 (in thousands):
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Schedule of restricted stock award and restricted stock unit activity | The following table summarizes the activity of our time-based and performance restricted stock units for fiscal 2017, 2016 and 2015 (in thousands, except per share amounts):
__________________________________________
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Defined Benefit Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | Components of net periodic cost are as follows for the years ended September 30, 2017 and October 1, 2016 (in thousands):
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Schedule of Changes in Projected Benefit Obligations | The changes in projected benefit obligations and plan assets, as well as the ending balance sheet amounts for our defined benefit plans, are as follows (in thousands):
(1) The beginning of the year balances relate to plans held in South Korea, Japan, Italy and Germany. These were not disclosed in prior years as the net liability was not material. |
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Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets | The information for plans with an accumulated benefit obligation in excess of plan assets is as follows (in thousands):
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Weighted average rates to determine the net periodic benefit costs | The weighted-average rates used to determine the net periodic benefit costs are as follows:
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Schedule of Expected Benefit Payments | Expected benefit payments for each of the next five fiscal years and the five years aggregated thereafter is as follows (in thousands):
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Schedule of Allocation of Plan Assets | Our pension plan asset allocations at September 30, 2017 by asset category are as follows:
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Fair value of pension plan assets | The fair values of our pension plan assets, by level within the fair value hierarchy, at September 30, 2017 are as follows:
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Other Income (Expense), Net (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other nonoperating income (expense) | Other income (expense) includes other-net which is comprised of the following (in thousands):
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | The provision for (benefit from) income taxes on income (loss) from continuing operations before income taxes consists of the following (in thousands):
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Schedule of Income before Income Tax, Domestic and Foreign | The components of income (loss) from continuing operations before income taxes consist of (in thousands):
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Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of the income tax expense at the U.S. Federal statutory rate (35.0%) to actual income tax expense is as follows (in thousands):
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Schedule of Deferred Tax Assets and Liabilities | The significant components of deferred tax assets and liabilities were (in thousands):
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Schedule of Deferred Tax Assets | The net deferred tax asset is classified on the consolidated balance sheets as follows (in thousands):
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Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the change in gross unrecognized tax benefits, excluding interest and penalties, is as follows (in thousands):
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Summary of Income Tax Examinations | A summary of the fiscal tax years that remain subject to examination, as of September 30, 2017, for our major tax jurisdictions is:
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Segment and Geographic Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of sales and income (loss) from operations | The following table provides net sales and income from continuing operations for our operating segments and a reconciliation of our total income from continuing operations to income from continuing operations before income taxes (in thousands):
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Schedule of sales to unaffiliated customers | Sales to unaffiliated customers are as follows (in thousands):
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Schedule of long-lived assets by geographic region | Long-lived assets, which include all non-current assets other than goodwill, intangibles, non-current restricted cash and deferred taxes, by geographic region, are as follows (in thousands):
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Restructuring Charges (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | The following table presents our current liability as accrued on our balance sheets for restructuring charges. The table sets forth an analysis of the components of the restructuring charges and payments and other deductions made against the accrual for fiscal 2017 (in thousands):
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Discontinued Operations and Assets Held For Sale (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operation Income / Loss, Net | The results of discontinued operations for fiscal 2017 are as follows (in thousands):
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Disposal Groups, Including Discontinued Operations | Current assets and current liabilities classified as held for sale as of September 30, 2017 related to discontinued operations are as follows (in thousands):
In the fourth quarter of fiscal 2017, management decided to sell several entities that we acquired in the Rofin acquisition. Although the sale was not completed as of the end of fiscal 2017, we recorded a non-cash impairment charge of $2.9 million to operating expense in our results of operations in the fourth quarter of fiscal 2017 to reduce our carrying value in these entities to fair value. Current assets and current liabilities classified as held for sale as of September 30, 2017 related to continuing operations are as follows (in thousands):
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Quarterly Financial Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information | Summarized quarterly financial data for the years ended September 30, 2017 and October 1, 2016 are as follows (in thousands, except per share amounts):
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Significant Accounting Policies - Fiscal Year, Basis of Presentation, Cash Equivalents and Concentration of Credit Risk (Details) $ in Millions |
12 Months Ended | ||
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Sep. 30, 2017
USD ($)
months
weeks
|
Oct. 01, 2016
weeks
|
Oct. 03, 2015
weeks
|
|
Product Information [Line Items] | |||
Fiscal period, number of weeks | weeks | 52 | 52 | 53 |
Cash and cash equivalents held outside of U.S. | $ 300.0 | ||
Cash and cash equivalents, foreign operations in foreign currency | $ 263.2 | ||
Accounts receivable | |||
Product Information [Line Items] | |||
Number of customers, represent 10 percent or more of accounts receivable | 1 | 2 | |
Accounts receivable | Customer one | |||
Product Information [Line Items] | |||
Concentration Risk, Percentage | 19.00% | 18.00% | |
Accounts receivable | Customer two | |||
Product Information [Line Items] | |||
Concentration Risk, Percentage | 18.70% | ||
Maximum | |||
Product Information [Line Items] | |||
Highly liquid investments maturities (in months) | months | 3 |
Significant Accounting Policies - Accounts receivable Allowances (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
|
Accounts Receivable, Allowance for Doubtful Accounts [Roll Forward] | |||
Beginning balance | $ 2,420 | $ 3,015 | $ 1,155 |
Additions charged to expenses | 4,190 | 2,084 | 2,716 |
Accruals related to acquisitions | 4,390 | 0 | 0 |
Deductions from reserves | (4,110) | (2,679) | (856) |
Ending balance | $ 6,890 | $ 2,420 | $ 3,015 |
Significant Accounting Policies - Inventories (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Oct. 01, 2016 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Purchased parts and assemblies | $ 114,285 | $ 56,824 |
Work-in-process | 159,784 | 88,391 |
Finished goods | 140,738 | 67,683 |
Total inventories | $ 414,807 | $ 212,898 |
Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 564,914 | $ 381,151 |
Accumulated depreciation and amortization | (286,064) | (253,708) |
Property and equipment, net | 278,850 | 127,443 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 18,550 | 7,523 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 159,111 | 85,908 |
Buildings and improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 5 years | |
Buildings and improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 40 years | |
Equipment, furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 335,953 | 248,741 |
Equipment, furniture and fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years | |
Equipment, furniture and fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 10 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 51,300 | $ 38,979 |
Leasehold improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 1 year | |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 15 years |
Significant Accounting Policies - Asset Retirement Obligations (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Asset retirement obligation gross expected future cash flows | $ 6,100 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||
Asset retirement liability, beginning of period | 2,796 | $ 2,654 |
Payment of asset retirement obligations | (175) | |
Adjustment to asset retirement obligations recognized | (213) | (14) |
Additional asset retirement obligations due to acquisition | 2,325 | |
Accretion recognized | 151 | 71 |
Changes due to foreign currency exchange | 72 | 85 |
Asset retirement liability, end of period | $ 5,382 | $ 2,796 |
Significant Accounting Policies - Long-lived assets (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 03, 2015 |
|
Long-lived assets [Abstract] | ||
Impairment of assets held for sale | $ 2.9 | $ 2.0 |
Significant Accounting Policies - Intangible Assets (Details) |
12 Months Ended |
---|---|
Sep. 30, 2017 | |
Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 3 years |
Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 15 years |
Significant Accounting Policies - Warranty Reserves (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
|
Product Warranties Disclosures [Abstract] | |||
Weighted average warranty period (months) | 15 months | ||
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | |||
Beginning balance | $ 15,949 | $ 15,308 | $ 16,961 |
Additions related to current period sales | 41,365 | 21,859 | 20,959 |
Warranty costs incurred in the current period | (31,825) | (21,393) | (21,922) |
Accruals resulting from acquisitions | 14,314 | 0 | 215 |
Adjustments to accruals related to foreign exchange and other | (3,654) | 175 | (905) |
Ending balance | $ 36,149 | $ 15,949 | $ 15,308 |
Significant Accounting Policies - Research and Development (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Research and development reimbursements | $ 2.9 | $ 2.7 | $ 2.5 |
Significant Accounting Policies - Comprehensive Income (Loss) (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Oct. 01, 2016 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Translation adjustment functional to reporting currency, net of tax | $ 16.3 | $ (8.6) |
Deferred actuarial gain - pension plans | $ 3.6 | |
Available-for-sale equity securities, accumulated gross unrealized gain, before tax | $ 3.3 |
Significant Accounting Policies - Earnings Per Share (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Jul. 01, 2017 |
Apr. 01, 2017 |
Dec. 31, 2016 |
Oct. 01, 2016 |
Jul. 02, 2016 |
Apr. 02, 2016 |
Jan. 02, 2016 |
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
|
Earnings Per Share [Abstract] | |||||||||||
Weighted average shares outstanding—basic (shares) | 24,487,000 | 24,142,000 | 24,754,000 | ||||||||
Dilutive effect of employee awards (shares) | 290,000 | 273,000 | 238,000 | ||||||||
Weighted average shares outstanding—diluted (shares) | 24,777,000 | 24,415,000 | 24,992,000 | ||||||||
Income (Loss) from continuing operations | $ 208,644 | $ 87,502 | $ 76,409 | ||||||||
Loss from discontinued operations, net of income taxes | (1,522) | 0 | 0 | ||||||||
Net income | $ 73,752 | $ 61,117 | $ 41,845 | $ 30,408 | $ 30,785 | $ 18,650 | $ 17,781 | $ 20,286 | $ 207,122 | $ 87,502 | $ 76,409 |
Dilutive securities excluded from calculation of dilutive shares (shares) | 505 | 323 | 0 |
Significant Accounting Policies - Income Taxes (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Accounting Policies [Abstract] | ||
Unremitted earnings of foreign subsidiaries not yet provided tax | $ 1,150 | $ 574 |
Significant Accounting Policies - New Accounting Pronouncements (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Debt issuance costs | $ 26,367 | $ 5,202 | $ 0 |
Expected tax benefit increase with comparable increase in deferred tax asset | $ 20,000 | ||
New Accounting Pronouncement, Early Adoption, Effect | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Debt issuance costs | $ 5,200 |
Business Combinations (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|
Jul. 27, 2015 |
Jul. 24, 2015 |
Jul. 01, 2017 |
Dec. 31, 2016 |
Jul. 01, 2017 |
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
Nov. 07, 2016 |
|
Business Acquisition [Line Items] | |||||||||
Business acquisition, share price (dollars per share) | $ 32.50 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Goodwill from acquisition of Rofin | $ 298,170 | ||||||||
Goodwill | $ 417,694 | $ 101,458 | $ 101,817 | ||||||
Gain on business combination | $ (5,416) | 0 | $ (1,316) | ||||||
Minimum | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Finite-Lived Intangible Asset, Useful Life | 3 years | ||||||||
Maximum | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Finite-Lived Intangible Asset, Useful Life | 15 years | ||||||||
Rofin-Sinar | |||||||||
Business Acquisition [Line Items] | |||||||||
Total purchase price to allocate | 936,314 | ||||||||
Cash consideration to Rofin's shareholders | 904,491 | ||||||||
payment due to cancellation of options held by Rofin employees | 15,290 | ||||||||
Business acquisition, cash paid for acquired entity | 919,781 | ||||||||
Fair value of previously owned Rofin shares | 20,685 | ||||||||
Post merger stock compensation expense | $ (4,152) | ||||||||
Total estimated merger consideration for canceled of options held by Rofin employees | 11,100 | ||||||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Remeasurement Gain | 5,400 | ||||||||
Goodwill reallocated from AFS to remaining business during remeasurement period | $ 33,900 | $ 33,900 | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Total purchase price to allocate | $ 936,314 | ||||||||
Acquired finished goods and work in process amortization period | 6 months | ||||||||
Expensed acquisition-related costs | 17,600 | ||||||||
Revenues | 434,900 | ||||||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | (48,100) | ||||||||
Business Acquisition, Pro Forma Revenue | 1,798,539 | 1,339,202 | |||||||
Business Acquisition, Pro Forma Net Income (Loss) | $ 233,012 | $ 5,813 | |||||||
Business Acquisition, Pro Forma Earnings Per Share, Basic | $ 9.52 | $ 0.24 | |||||||
Business Acquisition, Pro Forma Earnings Per Share, Diluted | $ 9.40 | $ 0.24 | |||||||
Rofin-Sinar | Minimum | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
The fair value write-up of acquired PPE, amortization period | 3 years | ||||||||
Rofin-Sinar | Maximum | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
The fair value write-up of acquired PPE, amortization period | 31 years | ||||||||
Rofin-Sinar | Cash, cash equivalents and short-term investments | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets | $ 163,425 | ||||||||
Rofin-Sinar | Accounts receivable | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets | 90,877 | ||||||||
Rofin-Sinar | Inventory | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets | 189,869 | ||||||||
Assets, Fair Value Adjustment | 26,400 | ||||||||
incremental cost of sales recorded from inventory fair value adjustment | $ 26,400 | ||||||||
Rofin-Sinar | Prepaid expenses and other assets | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets | 15,362 | ||||||||
Rofin-Sinar | Assets held for sale, current | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets | 29,545 | ||||||||
Rofin-Sinar | Property and equipment | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Assets | 125,723 | ||||||||
Assets, Fair Value Adjustment | 36,000 | ||||||||
Rofin-Sinar | Other assets | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Assets | 31,854 | ||||||||
Rofin-Sinar | Existing technology | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Intangible assets | $ 169,029 | ||||||||
Rofin-Sinar | Existing technology | Minimum | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Finite-Lived Intangible Asset, Useful Life | 3 years | ||||||||
Rofin-Sinar | In-process research and development | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Intangible assets | $ 6,000 | ||||||||
Rofin-Sinar | Backlog | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Intangible assets | $ 5,600 | ||||||||
Finite-Lived Intangible Asset, Useful Life | 6 months | ||||||||
Rofin-Sinar | Customer relationships | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Intangible assets | $ 39,209 | ||||||||
Rofin-Sinar | Customer relationships | Minimum | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Finite-Lived Intangible Asset, Useful Life | 5 years | ||||||||
Rofin-Sinar | Customer relationships | Maximum | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | ||||||||
Rofin-Sinar | Trademarks | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Intangible assets | $ 5,699 | ||||||||
Finite-Lived Intangible Asset, Useful Life | 3 years | ||||||||
Rofin-Sinar | Patents | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Intangible assets | $ 300 | ||||||||
Finite-Lived Intangible Asset, Useful Life | 5 years | ||||||||
Rofin-Sinar | Current portion of long-term obligations | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities | $ (3,633) | ||||||||
Rofin-Sinar | Current liabilities held for sale | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities | (7,001) | ||||||||
Rofin-Sinar | Accounts payable | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities | (21,314) | ||||||||
Rofin-Sinar | Other current liabilities | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities | (68,242) | ||||||||
Rofin-Sinar | Long-term debt | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities | (11,641) | ||||||||
Rofin-Sinar | Other long-term liabilities | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities | $ (122,517) | ||||||||
Raydiance, Inc | |||||||||
Business Acquisition [Line Items] | |||||||||
Business acquisition, cash paid for acquired entity | $ 5,000 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Total purchase price to allocate | 5,000 | ||||||||
Tangible assets | 1,048 | ||||||||
Goodwill | 1,552 | ||||||||
Expensed acquisition-related costs | 100 | ||||||||
Increase (decrease) in operating activities | $ 400 | ||||||||
Raydiance, Inc | Minimum | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Acquired identifiable intangible assets, useful lives | 3 years | ||||||||
Raydiance, Inc | Maximum | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Acquired identifiable intangible assets, useful lives | 5 years | ||||||||
Raydiance, Inc | Existing technology | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Intangible assets | $ 800 | ||||||||
Raydiance, Inc | Customer lists | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Intangible assets | $ 1,600 | ||||||||
Tinsley Optics | |||||||||
Business Acquisition [Line Items] | |||||||||
Business acquisition, cash paid for acquired entity | $ 4,300 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||||
Total purchase price to allocate | 4,300 | ||||||||
Inventories | 2,263 | ||||||||
Accounts receivable | 2,240 | ||||||||
Prepaid expenses and other assets | 1,132 | ||||||||
Property and equipment | 2,451 | ||||||||
Liabilities assumed | (1,702) | ||||||||
Deferred tax liabilities | (768) | ||||||||
Gain on business combination | (1,316) | ||||||||
Expensed acquisition-related costs | $ 400 |
Fair Values (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Oct. 01, 2016 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Short-term Debt | $ 5,078 | $ 20,000 | |||||||||
Mutual funds - Deferred comp and supplemental plan | 11,856 | 0 | |||||||||
Long-term debt | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Long-term Debt | 589,001 | 0 | |||||||||
(Level 1) | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Mutual funds - Deferred comp and supplemental plan | 0 | ||||||||||
(Level 2) | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Mutual funds - Deferred comp and supplemental plan | 11,856 | ||||||||||
Recurring | Aggregate Fair Value | Assets: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Financial assets and liabilities, fair value disclosure | 150,438 | 298,036 | |||||||||
Recurring | Aggregate Fair Value | Other current liabilities: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Financial assets and liabilities, fair value disclosure | 148,963 | 294,936 | |||||||||
Recurring | Aggregate Fair Value | Supplemental Employee Retirement Plans, Defined Benefit | Prepaid and other assets: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Money market fund Deferred comp and supplemental plan, fair value | 285 | 0 | |||||||||
Mutual funds - Deferred comp and supplemental plan | [1] | 17,585 | 14,399 | ||||||||
Recurring | Aggregate Fair Value | Money market fund deposits | Cash equivalents: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Money market fund deposits | 61,811 | 237,142 | |||||||||
Recurring | Aggregate Fair Value | U.S. Treasury and agency obligations | Cash equivalents: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Money market fund deposits | [2] | 14,986 | 0 | ||||||||
Recurring | Aggregate Fair Value | U.S. Treasury and agency obligations | Short-term investments: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Investments | [2] | 21,087 | 125 | ||||||||
Recurring | Aggregate Fair Value | Commercial paper | Cash equivalents: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Money market fund deposits | [2] | 21,991 | 0 | ||||||||
Recurring | Aggregate Fair Value | Commercial paper | Short-term investments: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Investments | [2] | 0 | 24,999 | ||||||||
Recurring | Aggregate Fair Value | Corporate notes and obligations | Short-term investments: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Investments | [2] | 11,423 | 0 | ||||||||
Recurring | Aggregate Fair Value | Equity securities | Short-term investments: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Investments | [3] | 0 | 20,482 | ||||||||
Recurring | Aggregate Fair Value | Foreign exchange contracts | Prepaid and other assets: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
U.S. Fair Value | [4] | 1,270 | 889 | ||||||||
Recurring | Aggregate Fair Value | Foreign exchange contracts | Other current liabilities: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
U.S. Fair Value | [4] | (1,475) | (3,100) | ||||||||
Recurring | (Level 1) | Assets: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Financial assets and liabilities, fair value disclosure | 79,681 | 272,023 | |||||||||
Recurring | (Level 1) | Other current liabilities: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Financial assets and liabilities, fair value disclosure | 79,681 | 272,023 | |||||||||
Recurring | (Level 1) | Supplemental Employee Retirement Plans, Defined Benefit | Prepaid and other assets: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Money market fund Deferred comp and supplemental plan, fair value | 285 | 0 | |||||||||
Mutual funds - Deferred comp and supplemental plan | [1] | 17,585 | 14,399 | ||||||||
Recurring | (Level 1) | Money market fund deposits | Cash equivalents: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Money market fund deposits | 61,811 | 237,142 | |||||||||
Recurring | (Level 1) | U.S. Treasury and agency obligations | Cash equivalents: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Money market fund deposits | [2] | 0 | 0 | ||||||||
Recurring | (Level 1) | U.S. Treasury and agency obligations | Short-term investments: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Investments | [2] | 0 | 0 | ||||||||
Recurring | (Level 1) | Commercial paper | Cash equivalents: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Money market fund deposits | [2] | 0 | 0 | ||||||||
Recurring | (Level 1) | Commercial paper | Short-term investments: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Investments | [2] | 0 | 0 | ||||||||
Recurring | (Level 1) | Corporate notes and obligations | Short-term investments: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Investments | [2] | 0 | 0 | ||||||||
Recurring | (Level 1) | Equity securities | Short-term investments: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Investments | [3] | 0 | 20,482 | ||||||||
Recurring | (Level 1) | Foreign exchange contracts | Prepaid and other assets: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
U.S. Fair Value | [4] | 0 | 0 | ||||||||
Recurring | (Level 1) | Foreign exchange contracts | Other current liabilities: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
U.S. Fair Value | [4] | 0 | 0 | ||||||||
Recurring | (Level 2) | Assets: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Financial assets and liabilities, fair value disclosure | 70,757 | 26,013 | |||||||||
Recurring | (Level 2) | Other current liabilities: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Financial assets and liabilities, fair value disclosure | 69,282 | 22,913 | |||||||||
Recurring | (Level 2) | Supplemental Employee Retirement Plans, Defined Benefit | Prepaid and other assets: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Money market fund Deferred comp and supplemental plan, fair value | 0 | 0 | |||||||||
Mutual funds - Deferred comp and supplemental plan | [1] | 0 | 0 | ||||||||
Recurring | (Level 2) | Money market fund deposits | Cash equivalents: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Money market fund deposits | 0 | 0 | |||||||||
Recurring | (Level 2) | U.S. Treasury and agency obligations | Cash equivalents: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Money market fund deposits | [2] | 14,986 | 0 | ||||||||
Recurring | (Level 2) | U.S. Treasury and agency obligations | Short-term investments: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Investments | [2] | 21,087 | 125 | ||||||||
Recurring | (Level 2) | Commercial paper | Cash equivalents: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Money market fund deposits | [2] | 21,991 | 0 | ||||||||
Recurring | (Level 2) | Commercial paper | Short-term investments: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Investments | [2] | 0 | 24,999 | ||||||||
Recurring | (Level 2) | Corporate notes and obligations | Short-term investments: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Investments | [2] | 11,423 | 0 | ||||||||
Recurring | (Level 2) | Equity securities | Short-term investments: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
Investments | [3] | 0 | 0 | ||||||||
Recurring | (Level 2) | Foreign exchange contracts | Prepaid and other assets: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
U.S. Fair Value | [4] | 1,270 | 889 | ||||||||
Recurring | (Level 2) | Foreign exchange contracts | Other current liabilities: | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||||||||
U.S. Fair Value | [4] | $ (1,475) | $ (3,100) | ||||||||
|
Short-Term Investments (Details) - USD ($) |
12 Months Ended | ||||
---|---|---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
||||
Available-for-sale Securities, Amortized Cost Basis [Abstract] | |||||
Available-for-sale securities: Cost Basis | $ 32,464,000 | $ 40,393,000 | |||
Available-for-sale securities: Unrealized Gains | 47,000 | 5,213,000 | |||
Available-for-sale securities: Unrealized Losses | (1,000) | 0 | |||
Available-for-sale securities, Fair Value | 32,510,000 | 45,606,000 | |||
Available-for-sale Securities, Debt Maturities [Abstract] | |||||
Due in less than 1 year, Amortized Cost | 30,214,000 | 25,124,000 | |||
Due in less than 1 year, Estimated Fair Value | 30,251,000 | 25,124,000 | |||
Due between 2 and 5 years, Amortized Cost | [1] | 2,250,000 | 0 | ||
Due between 2 and 5 years, Estimated Fair Value | [1] | 2,259,000 | 0 | ||
Proceeds from sale of available-for-sale securities | 100,000 | 126,000,000 | |||
Realized gross gains from sale of available-for-sale securities | 0 | ||||
Cash and cash equivalents | |||||
Available-for-sale Securities, Amortized Cost Basis [Abstract] | |||||
Cash and cash equivalents: Cost Basis | 443,066,000 | 354,347,000 | |||
Cash and cash equivalents: Fair Value | 443,066,000 | 354,347,000 | |||
Available-for-sale securities: Unrealized Gains | 0 | 0 | |||
Available-for-sale securities: Unrealized Losses | 0 | 0 | |||
Commercial paper | |||||
Available-for-sale Securities, Amortized Cost Basis [Abstract] | |||||
Available-for-sale securities: Cost Basis | 24,999,000 | ||||
Available-for-sale securities: Unrealized Gains | 0 | ||||
Available-for-sale securities: Unrealized Losses | 0 | ||||
Available-for-sale securities, Fair Value | 24,999,000 | ||||
U.S. Treasury and agency obligations | |||||
Available-for-sale Securities, Amortized Cost Basis [Abstract] | |||||
Available-for-sale securities: Cost Basis | 21,074,000 | 125,000 | |||
Available-for-sale securities: Unrealized Gains | 13,000 | 0 | |||
Available-for-sale securities: Unrealized Losses | 0 | 0 | |||
Available-for-sale securities, Fair Value | 21,087,000 | 125,000 | |||
Corporate notes and obligations | |||||
Available-for-sale Securities, Amortized Cost Basis [Abstract] | |||||
Available-for-sale securities: Cost Basis | 11,390,000 | ||||
Available-for-sale securities: Unrealized Gains | 34,000 | ||||
Available-for-sale securities: Unrealized Losses | (1,000) | ||||
Available-for-sale securities, Fair Value | $ 11,423,000 | ||||
Equity securities | |||||
Available-for-sale Securities, Amortized Cost Basis [Abstract] | |||||
Available-for-sale securities: Cost Basis | 15,269,000 | ||||
Available-for-sale securities: Unrealized Gains | 5,213,000 | ||||
Available-for-sale securities: Unrealized Losses | 0 | ||||
Available-for-sale securities, Fair Value | 20,482,000 | ||||
Maximum | |||||
Available-for-sale Securities, Debt Maturities [Abstract] | |||||
Realized gross gains from sale of available-for-sale securities | $ 100,000 | ||||
|
Derivative Instruments and Hedging Activities - Notional and Fair Value (Details) |
3 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Dec. 31, 2016
USD ($)
|
Oct. 01, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
|
Oct. 01, 2016
USD ($)
|
Oct. 03, 2015
USD ($)
|
Nov. 30, 2016
EUR (€)
|
Nov. 30, 2016
USD ($)
|
|
Derivatives, Fair Value [Line Items] | |||||||
Forward contracts period of maturities | 2 months | ||||||
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimated Net Amount to be Transferred | $ 200,000 | ||||||
Derivative Instruments Loss Reclassification From AOI to COGS | (1,700,000) | ||||||
Designated as hedging instruments | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | 600,000 | ||||||
Foreign exchange contracts | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Notional amount | € 670,000,000.0 | $ 750,000,000.0 | |||||
Unrealized gain (loss) on derivatives | $ 9,100,000 | $ (2,200,000) | |||||
Realized gain (loss) on derivative | $ 11,300,000 | ||||||
Purchase | Derivatives not designated as hedging instruments | Euro | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Derivative Asset, Notional Amount | 91,108,000 | $ 109,641,000 | $ 91,108,000 | ||||
Derivative Asset, Fair Value | 162,000 | (1,397,000) | 162,000 | ||||
Purchase | Derivatives not designated as hedging instruments | South Korean Won | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Derivative Asset, Notional Amount | 31,248,000 | 0 | 31,248,000 | ||||
Derivative Asset, Fair Value | 413,000 | 0 | 413,000 | ||||
Purchase | Other foreign currency hedge contracts | Derivatives not designated as hedging instruments | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Derivative Asset, Notional Amount | 6,033,000 | 3,668,000 | 6,033,000 | ||||
Derivative Asset, Fair Value | (4,000) | (4,000) | (4,000) | ||||
Sell | Derivatives not designated as hedging instruments | Euro | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Derivative Liability, Notional Amount | (750,454,000) | 0 | (750,454,000) | ||||
Derivative Liability, Fair Value | (2,234,000) | 0 | (2,234,000) | ||||
Sell | Derivatives not designated as hedging instruments | South Korean Won | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Derivative Liability, Notional Amount | (37,929,000) | (28,996,000) | (37,929,000) | ||||
Derivative Liability, Fair Value | (152,000) | 551,000 | (152,000) | ||||
Sell | Derivatives not designated as hedging instruments | Chinese currency | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Derivative Liability, Notional Amount | (25,237,000) | (13,744,000) | (25,237,000) | ||||
Derivative Liability, Fair Value | (91,000) | 128,000 | (91,000) | ||||
Sell | Derivatives not designated as hedging instruments | Japanese Yen | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Derivative Liability, Notional Amount | (36,450,000) | (25,126,000) | (36,450,000) | ||||
Derivative Liability, Fair Value | (343,000) | 591,000 | (343,000) | ||||
Sell | Other foreign currency hedge contracts | Derivatives not designated as hedging instruments | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Derivative Liability, Notional Amount | (1,775,000) | (2,971,000) | (1,775,000) | ||||
Derivative Liability, Fair Value | $ 38,000 | (74,000) | 38,000 | ||||
Other Income (Expense) | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Loss due to failed hedge in the original hedge period plus two months | (100,000) | ||||||
Other Income (Expense) | Derivatives not designated as hedging instruments | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | $ 17,800,000 | $ (10,500,000) | (4,300,000) | ||||
Other Income (Expense) | Designated as hedging instruments | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | $ (100,000) |
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
||||||
Goodwill [Roll Forward] | |||||||
Goodwill, beginning of period | $ 101,458 | $ 101,817 | |||||
Additions | 298,170 | 434 | |||||
Translation adjustments and other | 18,066 | (793) | |||||
Goodwill, end of period | 417,694 | 101,458 | |||||
Industrial Lasers & Systems | |||||||
Goodwill [Roll Forward] | |||||||
Goodwill, beginning of period | [1] | 4,443 | 4,443 | ||||
Additions | [1] | 296,502 | 0 | ||||
Translation adjustments and other | [1] | 14,571 | 0 | ||||
Goodwill, end of period | [1] | 315,516 | 4,443 | ||||
Goodwill, gross | 328,500 | 17,400 | |||||
Accumulated impairment loss | 13,000 | ||||||
OEM Laser Sources | |||||||
Goodwill [Roll Forward] | |||||||
Goodwill, beginning of period | [2] | 97,015 | 97,374 | ||||
Additions | [2] | 1,668 | 434 | ||||
Translation adjustments and other | [2] | 3,495 | (793) | ||||
Goodwill, end of period | [2] | 102,178 | 97,015 | ||||
Goodwill, gross | 110,900 | $ 105,700 | |||||
Accumulated impairment loss | $ 8,700 | ||||||
|
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
|
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | $ 272,961 | $ 87,016 | |
Accumulated Amortization | (82,934) | (73,142) | |
Net | 190,027 | 13,874 | |
Amortization of intangible assets | 60,600 | 8,500 | $ 8,200 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
2018 | 56,655 | ||
2019 | 53,238 | ||
2020 | 45,799 | ||
2021 | 14,141 | ||
2022 | 3,695 | ||
Thereafter | 10,067 | ||
Finite-Lived Intangible Assets excluding IPRD, Net | 183,595 | ||
Existing technology | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 208,341 | 70,664 | |
Accumulated Amortization | (66,793) | (61,133) | |
Net | $ 141,548 | 9,531 | |
Remaining amortization period | 3 years 2 months 12 days | ||
Patents | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | $ 330 | 0 | |
Accumulated Amortization | (58) | 0 | |
Net | $ 272 | 0 | |
Remaining amortization period | 4 years 1 month 6 days | ||
Customer lists | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | $ 51,687 | 15,968 | |
Accumulated Amortization | (14,259) | (11,658) | |
Net | $ 37,428 | 4,310 | |
Remaining amortization period | 7 years 4 months 24 days | ||
Trade name | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | $ 6,171 | 384 | |
Accumulated Amortization | (1,824) | (351) | |
Net | $ 4,347 | 33 | |
Remaining amortization period | 2 years 1 month 6 days | ||
In-process research and development | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | $ 6,432 | 0 | |
Accumulated Amortization | 0 | 0 | |
Net | 6,432 | 0 | |
Foreign Exchange | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Amortization of intangible assets | $ 4,800 | $ 400 |
Balance Sheet Details (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Oct. 01, 2016 |
---|---|---|
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid and refundable income taxes | $ 28,712 | $ 12,415 |
Other taxes receivable | 15,327 | 10,538 |
Prepaid expenses and other assets | 26,229 | 14,120 |
Total prepaid expenses and other assets | 70,268 | 37,073 |
Other Assets, Noncurrent Disclosure [Abstract] | ||
Assets related to deferred compensation arrangements | 31,008 | 26,356 |
Deferred tax assets | 82,691 | 67,157 |
Other assets | 12,942 | 9,221 |
Total other assets | 126,641 | 102,734 |
Other Liabilities, Current [Abstract] | ||
Accrued payroll and benefits | 72,327 | 47,506 |
Accrued expenses and other | 34,215 | 18,356 |
Warranty reserve (see Note 2) | 36,149 | 15,949 |
Current liabilities held for sale (see Note 19) | 7,021 | 0 |
Customer deposits | 20,052 | 1,597 |
Deferred revenue | 65,237 | 33,034 |
Total other current liabilities | 235,001 | 116,442 |
Other Liabilities, Noncurrent [Abstract] | ||
Long-term taxes payable | 35,866 | 2,951 |
Deferred compensation (see Note 12) | 34,160 | 28,313 |
Deferred tax liabilities | 45,373 | 1,468 |
Deferred revenue | 4,765 | 4,069 |
Asset retirement obligations liability (see Note 2) | 5,382 | 2,796 |
Defined benefit plan liabilities | 39,454 | 8,123 |
Other long-term liabilities | 1,390 | 1,106 |
Total other long-term liabilities | $ 166,390 | $ 48,826 |
Borrowings Credit agreement from Rofin acquisition (Details) $ in Thousands, € in Millions |
3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016
USD ($)
|
Apr. 01, 2017
EUR (€)
|
Jul. 01, 2017
EUR (€)
|
Sep. 30, 2017
EUR (€)
|
Sep. 30, 2017
USD ($)
|
Oct. 01, 2016
USD ($)
|
Oct. 03, 2015
USD ($)
|
Sep. 30, 2017
USD ($)
|
Nov. 07, 2016
EUR (€)
|
Nov. 07, 2016
USD ($)
|
||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Repayments of Debt | $ 50,000 | ||||||||||||||
Aggregate principal of two term loans | $ 15,300 | ||||||||||||||
Aggregate amount of several lines of credit | $ 18,100 | ||||||||||||||
Debt issuance cost related to repricing | 500 | ||||||||||||||
Interest expense on Euro term loan | $ 23,500 | ||||||||||||||
Amortization of debt issuance cost | 7,202 | $ 0 | $ 0 | ||||||||||||
Additional sources of cash available | $ 29,200 | ||||||||||||||
Debt Instrument, Unused Borrowing Capacity, Amount | 23,300 | ||||||||||||||
Short-term Debt | 20,000 | 5,078 | |||||||||||||
2018 | 9,767 | ||||||||||||||
2019 | 9,767 | ||||||||||||||
2020 | 9,768 | ||||||||||||||
2021 | 9,768 | ||||||||||||||
2022 | 9,768 | ||||||||||||||
Thereafter | 570,376 | ||||||||||||||
Total | 619,214 | ||||||||||||||
Credit Agreement November 7 2016 [Domain] | net leverage ratio | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Senior Secured Net leverage ratio to increase revolving commitment or borrow incremental term loan | 2.75 | 2.75 | |||||||||||||
Senior secured net leverage ratio to maintain compliance on the loan each quarter end | 3.50 | 3.50 | |||||||||||||
Rofin-Sinar | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 30,000 | ||||||||||||||
Swing line, maximum borrowing capacity | $ 10,000 | ||||||||||||||
Current portion of long-term obligations | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Euro Term Loan due 2024 | [1] | 0 | 3,230 | ||||||||||||
1.3% Term Loan due 2024 | 0 | 1,477 | |||||||||||||
1.0% State of Connecticut Term Loan due 2023 | 0 | 371 | |||||||||||||
Line of Credit, Current | 20,000 | 0 | |||||||||||||
Long-term debt | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Euro Term Loan due 2024 | [2] | 0 | 578,356 | ||||||||||||
1.3% Term Loan due 2024 | 0 | 8,865 | |||||||||||||
1.0% State of Connecticut Term Loan due 2023 | 0 | 1,780 | |||||||||||||
Long-term Debt | $ 0 | 589,001 | |||||||||||||
Euro term loan | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Debt issuance cost for short term portion of the Euro term loan | 4,700 | ||||||||||||||
Euro | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Domestic line of credit drawn | € | € 10.0 | ||||||||||||||
Euro term loan | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Debt Related Commitment Fees and Debt Issuance Costs | 28,500 | ||||||||||||||
Amortization period of the debt issuance cost | 7 years | ||||||||||||||
Amortization of debt issuance cost | $ 7,200 | ||||||||||||||
Debt issuance cost for long term portion of the Euro term loan | 20,400 | ||||||||||||||
Euro term loan | Euro | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
forward contract purchased for the term loan | € | € 513.3 | € 670.0 | |||||||||||||
Voluntary payment of principle | € | € 30.0 | € 45.0 | 75.0 | ||||||||||||
Additional Euro currency rate | 0.01 | 0.01 | |||||||||||||
Euro currency rate range initially | 0.035 | 0.035 | |||||||||||||
Euro currency rate range after 1st year | 0.03 | 0.03 | |||||||||||||
Quarter principal payment requirement for Euro term loan | 0.0025 | 0.0025 | |||||||||||||
Euro term loan | Euro | Maximum | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Euro currency rate range after 1st year | 0.035 | 0.035 | |||||||||||||
Applicable margin for Eurocurrency rate loan | 0.0425 | 0.0425 | |||||||||||||
Euro term loan | Euro | Minimum | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Applicable margin for Eurocurrency rate loan | 0.0375 | 0.0375 | |||||||||||||
Revolving line of credit | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Revolving facility to finance acquisition of Rofin | € 10.0 | $ 100,000 | |||||||||||||
Revolving facility borrowing capacity potential increase | 150,000 | ||||||||||||||
cash excess that requires the loan repayment | $ 10,000 | ||||||||||||||
Additional base rate | 0.005 | 0.005 | |||||||||||||
Base rate initially | 0.025 | 0.025 | |||||||||||||
Interest rate of term loan | 0.013 | 0.013 | |||||||||||||
Interest rate of state of Connecticut | 0.01 | 0.01 | |||||||||||||
Debt Related Commitment Fees and Debt Issuance Costs | $ 2,300 | ||||||||||||||
debt issuance cost amortization period | 5 years | ||||||||||||||
Revolving line of credit | Maximum | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Base rate range after 1st year | 0.025 | 0.025 | |||||||||||||
Applicable margin for base rate revolving loan | 0.0325 | 0.0325 | |||||||||||||
Commitment fee accrues range on unused portion of revolving loan | 0.005 | 0.005 | |||||||||||||
Revolving line of credit | Minimum | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Base rate range after 1st year | 0.02 | 0.02 | |||||||||||||
Applicable margin for base rate revolving loan | 0.0275 | 0.0275 | |||||||||||||
Commitment fee accrues range on unused portion of revolving loan | 0.0375 | 0.0375 | |||||||||||||
Line of Credit, Foreign | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Long-term Line of Credit | $ 5,900 | ||||||||||||||
|
Commitments and Contingencies - Operating Leases (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
|
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2018 | $ 15,496 | ||
2019 | 14,429 | ||
2020 | 10,186 | ||
2021 | 7,079 | ||
2022 | 5,250 | ||
Thereafter through 2027 | 10,266 | ||
Total | 62,706 | ||
Rent expense, exclusive of sublease income | $ 16,500 | $ 12,600 | $ 11,000 |
Commitments and Contingencies - Purchase Commitments (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Apr. 02, 2016 |
Sep. 30, 2017 |
Oct. 01, 2016 |
|
Long-term Purchase Commitment [Line Items] | |||
Estimated litigation liability, noncurrent | $ 1.6 | ||
Inventory | |||
Long-term Purchase Commitment [Line Items] | |||
Purchase commitments and obligations | $ 180.0 | $ 73.7 | |
Fixed assets and services | |||
Long-term Purchase Commitment [Line Items] | |||
Purchase commitments and obligations | $ 23.9 | $ 12.2 |
Stock Repurchases (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Oct. 03, 2015 |
Apr. 04, 2015 |
Aug. 25, 2015 |
Jan. 21, 2015 |
Jul. 25, 2014 |
|
July 2014 repurchase program | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Authorized repurchase of common stock | $ 25,000,000 | ||||
Number of shares of outstanding common stock repurchased and retired (shares) | 434,114 | ||||
Stock repurchase, price paid per share (dollars per share) | $ 57.59 | ||||
Total cost of stock repurchased, net | $ 25,000,000 | ||||
January 2015 repurchase program | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Authorized repurchase of common stock | $ 25,000,000 | ||||
Number of shares of outstanding common stock repurchased and retired (shares) | 430,675 | ||||
Stock repurchase, price paid per share (dollars per share) | $ 58.05 | ||||
Total cost of stock repurchased, net | $ 25,000,000 | ||||
August 2015 repurchase program | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Authorized repurchase of common stock | $ 25,000,000 | ||||
Number of shares of outstanding common stock repurchased and retired (shares) | 437,534 | ||||
Stock repurchase, price paid per share (dollars per share) | $ 57.14 | ||||
Total cost of stock repurchased, net | $ 25,000,000 |
Employee Stock Award and Benefit Plans - Deferred Compensation Plans (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
|
Share-based Compensation, Allocation and Classification in Financial Statements [Line Items] | |||
Cash surrender value of life insurance contracts | $ 13,995 | $ 13,636 | |
Fair value of mutual and money market funds | 17,870 | 14,399 | |
Total assets | 31,865 | 28,035 | |
Total deferred compensation liability, included in: | |||
Other current liabilities | 856 | 1,679 | |
Other long-term liabilities | 34,160 | 28,313 | |
Total deferred compensation liability | 35,016 | 29,992 | |
Gain (loss) on deferred compensation plan investments | 5,000 | 1,700 | $ (400) |
Death benefit included in gain (Loss) on Deferred Compensation Plan Investments | 1,300 | ||
Income (loss) to obligation to plan participants | (3,900) | (2,100) | $ 200 |
Prepaid expenses and other assets | |||
Share-based Compensation, Allocation and Classification in Financial Statements [Line Items] | |||
Total assets | 856 | 1,679 | |
Other assets | |||
Share-based Compensation, Allocation and Classification in Financial Statements [Line Items] | |||
Total assets | $ 31,009 | $ 26,356 |
Employee Stock Award and Benefit Plans - Employee Retirement and Investment and Stock Purchase Plans (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Postretirement benefit plan, maximum employer contribution rate | 4.00% | ||
Employer contributions to retirement and investment plans net of forfeitures | $ 4.8 | $ 4.1 | $ 3.6 |
Employee Stock Award and Benefit Plans - Stock Option Plans (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (shares) | 6,747,691 | ||
Number of common stock remain available for grant (shares) | 4,950,603 | ||
Expiration period | 4 years | ||
Initial RSU grants to new non-employee directors, fair value | $ 225,000 | ||
Director stock awards vesting period | 2 years | ||
Annual RSU grants to non-employee directors, fair value | $ 225,000 | ||
Employee Stock Purchase Plans | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum employee subscription rate | 10.00% | ||
Discount from market price, offering date | 85.00% | ||
Employee stock purchase plans (shares) | 95,678 | 141,340 | 132,004 |
Weighted average price of shares purchased (usd per share) | $ 81.82 | $ 46.81 | $ 51.34 |
Capital shares reserved for future issuance (shares) | 424,882 | ||
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options vesting periods (in years) | 3 years | ||
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options vesting periods (in years) | 3 years | ||
Vesting Period, Annual | Performance RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options vesting periods (in years) | 3 years | ||
Vesting Period, Single Measurement | Performance RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options vesting periods (in years) | 3 years | ||
Minimum | Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options vesting periods (in years) | 2 years | ||
Maximum | Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options vesting periods (in years) | 4 years |
Employee Stock Award and Benefit Plans - Fair Value of Stock Compensation (Details) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
|
Employee Stock Purchase Plans | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Expected life in years | 6 months | 6 months | 6 months |
Expected volatility | 33.00% | 35.00% | 28.60% |
Risk-free interest rate | 0.70% | 0.30% | 0.10% |
Weighted average fair value per share | $ 39.40 | $ 18.59 | $ 14.39 |
Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Expected volatility | 31.00% | 27.00% | 28.70% |
Risk-free interest rate | 1.30% | 1.20% | 1.00% |
PRSU weighted average fair value | $ 163.17 | $ 74.48 | $ 70.57 |
Employee Stock Award and Benefit Plans - Stock Compensation Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Nov. 07, 2016 |
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
|
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated stock-based compensation expense | $ 23,352 | $ 15,261 | $ 13,985 | |
Total stock-based compensation cost capitalized as part of inventory | 3,600 | 2,700 | ||
Total stock-based compensation cost amortized into income | 3,300 | 2,600 | ||
Total compensation cost, unvested stock-based awards granted but not yet recognized | $ 31,700 | |||
Total compensation cost, weighted-average period of amortization (in years and months) | 1 year 5 months 24 days | |||
Rofin-Sinar | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated stock-based compensation expense | $ 15,300 | |||
Cost of sales | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated stock-based compensation expense | $ 3,541 | 2,558 | 2,530 | |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated stock-based compensation expense | 2,973 | 2,268 | 1,946 | |
Selling, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated stock-based compensation expense | 23,911 | 15,331 | 13,756 | |
Income tax benefit | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated stock-based compensation expense | $ (7,073) | $ (4,896) | $ (4,247) | |
Acquisition-related Costs [Member] | Rofin-Sinar | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated stock-based compensation expense | 11,100 | |||
Post-Merger Stock Expenses | Rofin-Sinar | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated stock-based compensation expense | $ 4,200 |
Employee Stock Award and Benefit Plans - Shares Authorized under Stock Option Plans, by Exercise Price Range (Details) - shares shares in Thousands |
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
---|---|---|---|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Number of outstanding options (shares) | 24 | 34 | 86 |
Employee Stock Award and Benefit Plans - Stock Options and Awards Activity (Details) - USD ($) |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Initial RSU grants to new non-employee directors, fair value | $ 225,000 | |||||
Annual RSU grants to non-employee directors, fair value | $ 225,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||
Shares withheld to cover payment of taxes (shares) | 131,000 | 89,000 | 91,000 | |||
Value of shares withheld for payment of taxes | $ 15,700,000 | $ 5,400,000 | $ 5,300,000 | |||
Number of common stock remain available for grant (shares) | 4,950,603 | |||||
Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||
Nonvested stock, Number of Shares, beginning of period (shares) | 459,000 | 394,000 | 390,000 | |||
Granted (shares) | 186,000 | 270,000 | 237,000 | |||
Vested (shares) | [1] | (229,000) | (192,000) | (219,000) | ||
Forfeited (shares) | (17,000) | (13,000) | (14,000) | |||
Nonvested stock, Number of Shares, end of period (shares) | 399,000 | 459,000 | 394,000 | |||
Nonvested stock, Weighted Average Grant Date Fair Value, beginning of period (dollars per share) | $ 66.47 | $ 65.17 | $ 58.66 | |||
Granted, Weighted Average Grant Date Fair Value (dollars per share) | 131.54 | 64.42 | 64.84 | |||
Vested, Weighted Average Grant Date Fair Value (dollars per share) | [1] | 66.02 | 61.11 | 53.62 | ||
Forfeited, Weighted Average Grant Date Fair Value (dollars per share) | 84.79 | 63.89 | 59.06 | |||
Nonvested stock, Weighted Average Grant Date Fair Value, end of period (dollars per share) | $ 118.83 | $ 66.47 | $ 65.17 | |||
Performance RSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||
Nonvested stock, Number of Shares, beginning of period (shares) | 169,000 | 199,000 | 229,000 | |||
Granted (shares) | 115,000 | 65,000 | 51,000 | |||
Vested (shares) | [1] | (104,000) | (57,000) | (38,000) | ||
Forfeited (shares) | (4,000) | (38,000) | (43,000) | |||
Nonvested stock, Number of Shares, end of period (shares) | 176,000 | 169,000 | 199,000 | |||
Nonvested stock, Weighted Average Grant Date Fair Value, beginning of period (dollars per share) | $ 74.10 | $ 67.09 | $ 61.46 | |||
Granted, Weighted Average Grant Date Fair Value (dollars per share) | 163.17 | 74.48 | 70.57 | |||
Vested, Weighted Average Grant Date Fair Value (dollars per share) | [1] | 77.10 | 48.48 | 53.46 | ||
Forfeited, Weighted Average Grant Date Fair Value (dollars per share) | 70.57 | 48.48 | 53.46 | |||
Nonvested stock, Weighted Average Grant Date Fair Value, end of period (dollars per share) | $ 105.34 | $ 74.10 | $ 67.09 | |||
Targeted goal percentage | 100.00% | |||||
Performance RSUs | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||
Percentage of performance-based awards earned by recipient | 0.00% | |||||
Performance RSUs | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||||
Percentage of performance-based awards earned by recipient | 200.00% | |||||
|
Defined Benefit Plans (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Service cost | $ 2,077 | $ 872 | |||
Interest cost | 1,086 | 97 | |||
Expected return on plan assets | (736) | 0 | |||
Recognized net actuarial (gain) loss | (236) | 993 | |||
Foreign exchange impacts | (6) | 127 | |||
Net periodic pension cost | 2,185 | 2,089 | |||
Change in benefit obligation: | |||||
Benefit Obligation beginning balance | [1] | 8,621 | |||
Business combinations and acquisitions | 46,361 | ||||
Service cost | 2,077 | 872 | |||
Interest cost | 1,086 | 97 | |||
Actuarial gains | (141) | ||||
Assumption change | (3,597) | ||||
Experience gain | (1,502) | ||||
Foreign exchange rate impacts | 1,685 | ||||
Benefits paid - total | (2,043) | ||||
Benefit Obligation ending balance | 52,547 | 8,621 | [1] | ||
Projected benefit obligation at end of year: | 52,547 | ||||
Change in plan assets: | |||||
Fair value of plan assets, beginning balance | 0 | ||||
Business combinations and acquisitions | 11,121 | ||||
Actual return on plan assets | 1,092 | ||||
Employer contributions | 0 | ||||
Benefits paid - funded plan | (357) | ||||
Fair value of plan assets, ending balance | 11,856 | 0 | |||
Unfunded status at end of year | (40,691) | ||||
Accrued benefit liability - current | (1,238) | ||||
Accrued benefit liability - non current | (39,454) | $ (8,123) | |||
Accumulated other comprehensive gain (pre-tax) | (5,360) | ||||
Accumulated benefit obligation | 47,798 | ||||
2018 | 1,708 | ||||
2019 | 1,593 | ||||
2020 | 1,755 | ||||
2021 | 2,296 | ||||
2022 | 3,319 | ||||
2023-2027 | 14,220 | ||||
Total future defined benefit plan expense | 24,891 | ||||
(Level 1) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
(Level 2) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 11,856 | ||||
(Level 3) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
Bonds and mortgages | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 4,031 | ||||
Bonds and mortgages | (Level 1) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
Bonds and mortgages | (Level 2) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 4,031 | ||||
Bonds and mortgages | (Level 3) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
Inflation protected | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 555 | ||||
Inflation protected | (Level 1) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
Inflation protected | (Level 2) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 555 | ||||
Inflation protected | (Level 3) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
High yield | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 618 | ||||
High yield | (Level 1) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
High yield | (Level 2) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 618 | ||||
High yield | (Level 3) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
Money market | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
Money market | (Level 1) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
Money market | (Level 2) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
Money market | (Level 3) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
Small cap | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 304 | ||||
Small cap | (Level 1) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
Small cap | (Level 2) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 304 | ||||
Small cap | (Level 3) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
Mid cap | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 621 | ||||
Mid cap | (Level 1) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
Mid cap | (Level 2) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 621 | ||||
Mid cap | (Level 3) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
Large cap | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 2,382 | ||||
Large cap | (Level 1) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
Large cap | (Level 2) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 2,382 | ||||
Large cap | (Level 3) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
Total market stock | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 1,106 | ||||
Total market stock | (Level 1) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
Total market stock | (Level 2) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 1,106 | ||||
Total market stock | (Level 3) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
International | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 1,897 | ||||
International | (Level 1) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
International | (Level 2) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 1,897 | ||||
International | (Level 3) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
Emerging markets | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 342 | ||||
Emerging markets | (Level 1) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 0 | ||||
Emerging markets | (Level 2) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 342 | ||||
Emerging markets | (Level 3) | |||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | $ 0 | ||||
Target Allocation | |||||
Change in plan assets: | |||||
Percentage allocation of assets for Plan Benefits, Defined Benefit Plan | 100.00% | ||||
Target Allocation | Debt securities | |||||
Change in plan assets: | |||||
Percentage allocation of assets for Plan Benefits, Defined Benefit Plan | 50.00% | ||||
Target Allocation | Debt securities | |||||
Change in plan assets: | |||||
Percentage allocation of assets for Plan Benefits, Defined Benefit Plan | 50.00% | ||||
Allocation | |||||
Change in plan assets: | |||||
Percentage allocation of assets for Plan Benefits, Defined Benefit Plan | 100.00% | ||||
Allocation | Debt securities | |||||
Change in plan assets: | |||||
Percentage allocation of assets for Plan Benefits, Defined Benefit Plan | 56.00% | ||||
Allocation | Debt securities | |||||
Change in plan assets: | |||||
Percentage allocation of assets for Plan Benefits, Defined Benefit Plan | 44.00% | ||||
United States | |||||
Change in plan assets: | |||||
Discount rate: | 3.60% | ||||
Expected return on plan assets: | 6.60% | ||||
Rate of compensation increase | 3.00% | ||||
Foreign Countries | |||||
Change in plan assets: | |||||
Discount rate: | 1.70% | ||||
Expected return on plan assets: | 0.00% | ||||
Rate of compensation increase | 2.00% | ||||
United States | |||||
Change in benefit obligation: | |||||
Projected benefit obligation at end of year: | $ 17,543 | ||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | 11,856 | ||||
Foreign Countries | |||||
Change in benefit obligation: | |||||
Projected benefit obligation at end of year: | 35,004 | ||||
Change in plan assets: | |||||
Fair value of plan assets, ending balance | $ 0 | ||||
|
Other Income (Expense), Net (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
|
Component of Other Income (Expense), Nonoperating [Line Items] | |||
Other income (expense) | $ 9,832 | $ (4,515) | $ (1,726) |
Foreign exchange gain (loss) | |||
Component of Other Income (Expense), Nonoperating [Line Items] | |||
Other income (expense) | 4,656 | (6,310) | (1,396) |
Gain (loss) on deferred compensation investments, net (Note 12) | |||
Component of Other Income (Expense), Nonoperating [Line Items] | |||
Other income (expense) | 4,955 | 1,738 | (351) |
Other | |||
Component of Other Income (Expense), Nonoperating [Line Items] | |||
Other income (expense) | $ 221 | $ 57 | $ 21 |
Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
|
Currently payable: | |||
Federal | $ 5,617 | $ (3,069) | $ (932) |
State | 1,022 | 89 | 108 |
Foreign | 116,022 | 48,039 | 32,189 |
Currently payable total | 122,661 | 45,059 | 31,365 |
Deferred: | |||
Federal | 1,413 | (8,131) | (4,327) |
State | (153) | (439) | (200) |
Foreign | (30,510) | (1,095) | (3,679) |
Deferred total | (29,250) | (9,665) | (8,206) |
Provision for income taxes | 93,411 | 35,394 | 23,159 |
Components of income (loss) before income taxes | |||
United States | 25,540 | (44,029) | (13,293) |
Foreign | 276,515 | 166,925 | 112,861 |
Income from continuing operations before income taxes | $ 302,055 | 122,896 | 99,568 |
U.S. Federal statutory rate | 35.00% | ||
Reconciliation of income tax expense (benefit) at U.S. Federal statutory rate | |||
Federal statutory tax expense | $ 105,719 | 43,015 | 34,849 |
Valuation allowance | 4,454 | 1,441 | 635 |
Foreign taxes at rates less than U.S. rates, net | (12,346) | (5,642) | (10,558) |
Stock-based compensation | 3,969 | 2,161 | 2,150 |
State income taxes, net of federal income tax benefit | 398 | (198) | (38) |
Research and development credit | (7,884) | (4,408) | (2,979) |
Deferred compensation | (1,022) | (428) | (133) |
Release of foreign unrecognized tax benefits | (538) | (4,961) | (39) |
Release of interest accrued for unrecognized tax benefits | (78) | (1,508) | (38) |
Reversal of Competent Authority | 0 | 4,328 | 0 |
Other | 739 | 1,594 | (690) |
Provision for income taxes | $ 93,411 | $ 35,394 | $ 23,159 |
Effective tax rate | 30.90% | 28.80% | 23.30% |
Effective tax rate on income before income taxes | 30.90% | ||
Deferred tax assets: | |||
Reserves and accruals not currently deductible | $ 52,803 | $ 34,800 | |
Operating loss carryforwards and tax credits | 61,371 | 52,213 | |
Deferred service revenue | 2,987 | 2,186 | |
Inventory capitalization | 7,116 | 5,001 | |
Stock-based compensation | 7,839 | 6,428 | |
Competent authority offset to transfer pricing tax reserves | 12,948 | 1,437 | |
Depreciation and amortization | 0 | 1,043 | |
Other | 4,567 | 5,277 | |
Total gross deferred tax assets | 149,631 | 108,385 | |
Valuation allowance | (28,745) | (17,642) | |
Total net deferred tax assets | 120,886 | 90,743 | |
Deferred tax liabilities: | |||
Gain on issuance of stock by subsidiary | 22,378 | 20,781 | |
Depreciation and amortization | 60,956 | 0 | |
Accumulated translation adjustment | 234 | 4,273 | |
Total gross deferred tax liabilities | 83,568 | 25,054 | |
Net deferred tax assets | 37,318 | 65,689 | |
Deferred tax assets, valuation allowance increase (decrease) | 11,100 | ||
Classification of net deferred tax assets on consolidated balance sheets | |||
Non-current deferred income tax assets | 82,691 | 67,157 | |
Non-current deferred income tax liabilities | (45,373) | (1,468) | |
Net deferred tax assets | 37,318 | 65,689 | |
Various tax attribute carryforwards | |||
Operating loss carryforwards and tax credits | 61,371 | 52,213 | |
Foreign tax credit carry forwards | 14,900 | ||
Increase (Decrease) in Income Taxes | 66,820 | 7,384 | $ (6,759) |
Tax benefit credit to APIC when recognized | |||
Various tax attribute carryforwards | |||
Foreign tax credit carry forwards | 14,900 | ||
SINGAPORE | |||
Various tax attribute carryforwards | |||
Increase (Decrease) in Income Taxes | 1,100 | $ 700 | |
Foreign | |||
Deferred tax assets: | |||
Operating loss carryforwards and tax credits | 48,500 | ||
Various tax attribute carryforwards | |||
Operating loss carryforwards and tax credits | 48,500 | ||
Foreign operating loss carryforwards, not subject to expiration | 39,900 | ||
Operating loss carryforwards, subject to expiration | 8,600 | ||
Valuation allowance recorded against foreign net operating loss carryforwards | 8,900 | ||
Federal Government | |||
Deferred tax assets: | |||
Operating loss carryforwards and tax credits | 9,200 | ||
Various tax attribute carryforwards | |||
Operating loss carryforwards and tax credits | 9,200 | ||
State Government | |||
Deferred tax assets: | |||
Operating loss carryforwards and tax credits | 30,800 | ||
Various tax attribute carryforwards | |||
Operating loss carryforwards and tax credits | 30,800 | ||
Federal | |||
Various tax attribute carryforwards | |||
Tax credit carryforward, amount | 4,900 | ||
Federal | Subject to Expiration Dates | |||
Various tax attribute carryforwards | |||
R&D credit carryforwards | 30,200 | ||
CALIFORNIA | |||
Deferred tax assets: | |||
Operating loss carryforwards and tax credits | 300 | ||
Various tax attribute carryforwards | |||
Operating loss carryforwards and tax credits | 300 | ||
Operating loss carryforwards, subject to expiration | 300 | ||
Tax credit carryforward, amount | 1,400 | ||
Valuation allowance, net of federal benefit, recorded against California R&D credit carryforwards | 22,100 | ||
CALIFORNIA | Not Subject to Expiration Dates | |||
Various tax attribute carryforwards | |||
R&D credit carryforwards | 27,200 | ||
Other states besides California | |||
Various tax attribute carryforwards | |||
Valuation allowance, net of federal benefit, recorded against California R&D credit carryforwards | 2,700 | ||
Other states besides California | Subject to Expiration Dates | |||
Various tax attribute carryforwards | |||
R&D credit carryforwards | $ 3,200 |
Income Taxes - Contingency (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Interest and Penalties [Roll Forward] | |||
Balance as of the beginning of the year | $ 20,442 | $ 22,538 | $ 21,893 |
Increase related to acquisitions | 25,151 | 0 | 0 |
Tax positions related to current year: | |||
Additions | 1,326 | 2,468 | 311 |
Reductions | 0 | 0 | 0 |
Tax positions related to prior year: | |||
Additions | 4,951 | 424 | 855 |
Reductions | (65) | (3,239) | 0 |
Settlements | 0 | (1,655) | 0 |
Lapses in statutes of limitations | (610) | (94) | (521) |
Decrease in unrecognized tax benefits based on audit results | (5,217) | 0 | 0 |
Foreign currency revaluation adjustment | 1,588 | 0 | 0 |
Balance as of end of year | 47,566 | 20,442 | $ 22,538 |
Gross unrecognized tax benefits | 50,400 | ||
Gross urecognized tax benefits, if recognized, would affect effective tax rate | 34,700 | ||
Gross interest and penalties accrued | $ 2,800 | $ 200 |
Segment and Geographic Information (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017
USD ($)
|
Jul. 01, 2017
USD ($)
|
Apr. 01, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
Oct. 01, 2016
USD ($)
|
Jul. 02, 2016
USD ($)
|
Apr. 02, 2016
USD ($)
|
Jan. 02, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
customers
|
Oct. 01, 2016
USD ($)
|
Oct. 03, 2015
USD ($)
|
|
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 490,298 | $ 464,107 | $ 422,833 | $ 346,073 | $ 248,461 | $ 218,767 | $ 199,882 | $ 190,275 | $ 1,723,311 | $ 857,385 | $ 802,460 |
Income (loss) from continuing operations: | 325,495 | 127,614 | 100,747 | ||||||||
Total other expense, net | (23,440) | (4,718) | (1,179) | ||||||||
Income from continuing operations before income taxes | $ 302,055 | $ 122,896 | $ 99,568 | ||||||||
Number of customers, minimum ten percent of net sales | customers | 1 | ||||||||||
Customer one | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Number of customers, minimum ten percent of net sales | customers | 1 | ||||||||||
Customer two | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Number of customers, minimum ten percent of net sales | customers | 2 | ||||||||||
Sales | Customer concentration risk | Customer one | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Concentration Risk, Percentage | 22.90% | 13.10% | 17.20% | ||||||||
Sales | Customer concentration risk | Customer two | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Concentration Risk, Percentage | 16.40% | ||||||||||
Operating Segments | OEM Laser Sources | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 1,143,620 | $ 722,517 | $ 655,854 | ||||||||
Income (loss) from continuing operations: | 432,839 | 197,923 | 152,660 | ||||||||
Operating Segments | Industrial Lasers & Systems | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 579,691 | 134,868 | 146,606 | ||||||||
Income (loss) from continuing operations: | (26,447) | (13,869) | (10,027) | ||||||||
Corporate | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Income (loss) from continuing operations: | $ (80,897) | $ (56,440) | $ (41,886) |
Segment and Geographic Information - Revenue and Long-Lived Assets by Geographical Areas (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Jul. 01, 2017 |
Apr. 01, 2017 |
Dec. 31, 2016 |
Oct. 01, 2016 |
Jul. 02, 2016 |
Apr. 02, 2016 |
Jan. 02, 2016 |
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | $ 490,298 | $ 464,107 | $ 422,833 | $ 346,073 | $ 248,461 | $ 218,767 | $ 199,882 | $ 190,275 | $ 1,723,311 | $ 857,385 | $ 802,460 |
Total long-lived assets | 322,797 | 163,016 | 322,797 | 163,016 | |||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 297,699 | 204,963 | 213,483 | ||||||||
Total long-lived assets | 120,116 | 92,771 | 120,116 | 92,771 | |||||||
Foreign Countries | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 1,425,612 | 652,422 | 588,977 | ||||||||
Total long-lived assets | 202,681 | 70,245 | 202,681 | 70,245 | |||||||
South Korea | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 628,369 | 187,908 | 195,589 | ||||||||
China | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 162,316 | 63,050 | 57,548 | ||||||||
Europe, other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 162,162 | 55,351 | 53,027 | ||||||||
Total long-lived assets | 18,681 | 2,478 | 18,681 | 2,478 | |||||||
Japan | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 154,985 | 193,418 | 135,674 | ||||||||
Germany | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 145,835 | 71,427 | 75,474 | ||||||||
Total long-lived assets | 159,483 | 55,786 | 159,483 | 55,786 | |||||||
Asia-Pacific, other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | 107,713 | 36,364 | 28,036 | ||||||||
Total long-lived assets | $ 24,517 | $ 11,981 | 24,517 | 11,981 | |||||||
Rest of World | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total sales | $ 64,232 | $ 44,904 | $ 43,629 |
Restructuring Charges (Details) $ in Thousands |
12 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve, beginning balance | $ 0 |
Provision | 12,324 |
Payments and other | (11,023) |
Restructuring reserve, ending balance | 1,301 |
Industrial Lasers & Systems | |
Restructuring Reserve [Roll Forward] | |
Restructuring, incurred cost | 11,400 |
OEM Laser Sources | |
Restructuring Reserve [Roll Forward] | |
Restructuring, incurred cost | 900 |
Severance Related | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve, beginning balance | 0 |
Provision | 5,143 |
Payments and other | (3,842) |
Restructuring reserve, ending balance | 1,301 |
Severance Related | Other current liabilities | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve, ending balance | 1,300 |
Asset Write-Offs | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve, beginning balance | 0 |
Provision | 6,439 |
Payments and other | (6,439) |
Restructuring reserve, ending balance | 0 |
Other | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve, beginning balance | 0 |
Provision | 742 |
Payments and other | (742) |
Restructuring reserve, ending balance | $ 0 |
Discontinued Operations and Assets Held For Sale (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jul. 01, 2017 |
Jul. 01, 2017 |
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Net sales | $ 26,996 | ||||
Cost of sales | 19,353 | ||||
Operating expenses | 9,002 | ||||
Other expense | 220 | ||||
Income tax benefit | (57) | ||||
Loss from discontinued operations, net of income taxes | (1,522) | $ 0 | $ 0 | ||
Non cash impairment charge to reduce carrying value of the acquired entities to fair value | 2,900 | ||||
Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal Group, Including Discontinued Operation, Assets | 35,262 | ||||
Disposal Group, Including Discontinued Operation, Liabilities | 6,004 | ||||
Discontinued Operations | Cash | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal Group, Including Discontinued Operation, Assets | 33 | ||||
Discontinued Operations | Accounts receivable | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal Group, Including Discontinued Operation, Assets | 6,931 | ||||
Discontinued Operations | Inventory | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal Group, Including Discontinued Operation, Assets | 5,586 | ||||
Discontinued Operations | Prepaid expenses and other assets | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal Group, Including Discontinued Operation, Assets | 607 | ||||
Discontinued Operations | Property and equipment | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal Group, Including Discontinued Operation, Assets | 10,705 | ||||
Discontinued Operations | Intangible assets | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal Group, Including Discontinued Operation, Assets | 11,400 | ||||
Discontinued Operations | Accounts payable | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal Group, Including Discontinued Operation, Liabilities | 1,129 | ||||
Discontinued Operations | Other current liabilities: | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal Group, Including Discontinued Operation, Liabilities | 4,875 | ||||
Continuing Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal Group, Including Discontinued Operation, Assets | 8,986 | ||||
Disposal Group, Including Discontinued Operation, Liabilities | 1,017 | ||||
Continuing Operations | Accounts receivable | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal Group, Including Discontinued Operation, Assets | 1,668 | ||||
Continuing Operations | Inventory | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal Group, Including Discontinued Operation, Assets | 5,202 | ||||
Continuing Operations | Prepaid expenses and other assets | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal Group, Including Discontinued Operation, Assets | 472 | ||||
Continuing Operations | Property and equipment | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal Group, Including Discontinued Operation, Assets | 457 | ||||
Continuing Operations | Intangible assets | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal Group, Including Discontinued Operation, Assets | 1,187 | ||||
Continuing Operations | Accounts payable | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal Group, Including Discontinued Operation, Liabilities | 189 | ||||
Continuing Operations | Other current liabilities: | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal Group, Including Discontinued Operation, Liabilities | $ 828 | ||||
Rofin-Sinar | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Goodwill reallocated from AFS to remaining business during remeasurement period | $ 33,900 | $ 33,900 |
Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Jul. 01, 2017 |
Apr. 01, 2017 |
Dec. 31, 2016 |
Oct. 01, 2016 |
Jul. 02, 2016 |
Apr. 02, 2016 |
Jan. 02, 2016 |
Sep. 30, 2017 |
Oct. 01, 2016 |
Oct. 03, 2015 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 490,298 | $ 464,107 | $ 422,833 | $ 346,073 | $ 248,461 | $ 218,767 | $ 199,882 | $ 190,275 | $ 1,723,311 | $ 857,385 | $ 802,460 |
Gross profit | 222,054 | 207,186 | 179,515 | 141,514 | 114,336 | 94,559 | 88,599 | 83,898 | 750,269 | 381,392 | 335,399 |
Net income | $ 73,752 | $ 61,117 | $ 41,845 | $ 30,408 | $ 30,785 | $ 18,650 | $ 17,781 | $ 20,286 | $ 207,122 | $ 87,502 | $ 76,409 |
Net income per share (in dollars per share) | $ 3.00 | $ 2.49 | $ 1.71 | $ 1.25 | $ 1.27 | $ 0.77 | $ 0.74 | $ 0.85 | $ 8.46 | $ 3.62 | $ 3.09 |
Net income per share (in dollars per share) | $ 2.96 | $ 2.46 | $ 1.69 | $ 1.23 | $ 1.25 | $ 0.76 | $ 0.73 | $ 0.84 | $ 8.36 | $ 3.58 | $ 3.06 |
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