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FINANCIAL INSTRUMENTS AND FAIR VALUE MEASURES (Narrative) (Details)
1 Months Ended 3 Months Ended
Jun. 15, 2023
swap
Sep. 30, 2022
swap
Aug. 31, 2022
Jun. 29, 2024
USD ($)
segment
Apr. 01, 2024
USD ($)
Mar. 30, 2024
USD ($)
Sep. 23, 2022
USD ($)
Derivative [Line Items]              
Number of Interest Rate Swaps Remaining | segment       2      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]              
DERIVATIVES AND FAIR VALUE MEASUREMENTS      
13. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

The Company manufactures, markets and sells its products globally. During the three months ended June 29, 2024, 26.0% of the Company’s sales were generated outside the U.S. in local currencies. The Company also incurs certain manufacturing, marketing and selling costs in international markets in local currency.

Accordingly, earnings and cash flows are exposed to market risk from changes in foreign currency exchange rates relative to the U.S. Dollar, the Company’s reporting currency. The Company has a program in place that is designed to mitigate the exposure to changes in foreign currency exchange rates. That program includes the use of derivative financial instruments to minimize, for a period of time, the impact on its financial results from changes in foreign exchange rates. The Company utilizes foreign currency forward contracts to hedge the anticipated cash flows from transactions denominated in foreign currencies, primarily Japanese Yen and Euro, and to a lesser extent, Swiss Franc and Mexican Peso. This does not eliminate the impact of the volatility of foreign exchange rates. However, because the Company generally enters into forward contracts one year out, rates are fixed for a one-year period, thereby facilitating financial planning and resource allocation.

Designated Foreign Currency Hedge Contracts

All of the Company’s designated foreign currency hedge contracts as of June 29, 2024 and March 30, 2024 were cash flow hedges under ASC 815, Derivatives and Hedging (“ASC 815”). The Company records the effective portion of any change in the fair value of designated foreign currency hedge contracts in other comprehensive income until the related third-party transaction occurs. Once the related third-party transaction occurs, the Company reclassifies the effective portion of any related gain or loss on the designated foreign currency hedge contracts to earnings. In the event the hedged forecasted transaction does not occur, or it becomes probable that it will not occur, the Company will reclassify the amount of any gain or loss on the related cash flow hedge to earnings at that time. The Company had designated foreign currency hedge contracts outstanding in the contract amount of $49.0 million as of June 29, 2024 and $74.0 million as of March 30, 2024. At June 29, 2024, a gain of $0.3 million, net of tax, will be reclassified to earnings within the next twelve months. All currency cash flow hedges outstanding as of June 29, 2024 mature within twelve months.

Non-Designated Foreign Currency Contracts

The Company manages its exposure to changes in foreign currency on a consolidated basis to take advantage of offsetting transactions and balances. It uses foreign currency forward contracts as a part of its strategy to manage exposure related to foreign currency denominated monetary assets and liabilities. These foreign currency forward contracts are entered into for periods consistent with currency transaction exposures, generally one month. They are not designated as cash flow or fair value hedges under ASC 815. These forward contracts are marked-to-market with changes in fair value recorded to earnings. The Company had non-designated foreign currency hedge contracts under ASC 815 outstanding in the contract amount of $27.4 million as of June 29, 2024 and $39.9 million as of March 30, 2024.

Interest Rate Swaps

Part of the Company’s interest rate risk management strategy includes the use of interest rate swaps to mitigate its exposure to changes in variable interest rates. The Company’s objective in using interest rate swaps is to add stability to interest expense and to manage and reduce the risk inherent in interest rate fluctuations.
On July 26, 2022, the Company entered into an amended and restated credit agreement to refinance its credit facilities initially entered into in 2018 and extend their maturity date through June 2025. The 2022 Revised Credit Facilities include a $280.0 million senior unsecured term loan and a $420.0 million senior unsecured revolving credit facility. Loans under the 2022 Revised Credit Facilities bear interest at an annual rate equal to the 1-month USD Term SOFR plus 0.10% and an applicable rate ranging from 1.125% to 1.750% based on the Company’s consolidated net leverage ratio. In September 2022, the Company entered into four interest rate swaps, two of which expired in June 2023. The Company has concluded that the two remaining interest rate swaps, which have an average blended fixed interest rate of 4.12% plus the applicable rate and cover approximately 80% of the notional value of the unsecured term loan through maturity in June 2025, are effective and qualify for hedge accounting treatment. The interest rate swaps remain unchanged as a result of the 2024 refinancing of the credit facilities.

The Company held the following interest rate swaps as of June 29, 2024:

Hedged ItemOriginal Notional Amount
Notional Amount as of June 29, 2024
Designation DateEffective DateTermination DateFixed Interest RateEstimated Fair Value Assets (Liabilities)
(In thousands)
1-month USD Term SOFR109,900 105,000 9/23/20226/15/20236/15/20254.08%843 
1-month USD Term SOFR109,900 103,600 9/23/20226/15/20236/15/20254.15%793 
Total$219,800 $208,600 $1,636 

For the three months ended June 29, 2024, the Company recorded a gain of $0.4 million, net of tax, in accumulated other comprehensive loss to recognize the effective portion of the fair value of the swaps that qualify as cash flow hedges.

Trade Receivables

In the ordinary course of business, the Company grants trade credit to its customers on normal credit terms. In an effort to reduce its credit risk, the Company (i) establishes credit limits for all customers, (ii) performs ongoing credit evaluations of customers’ financial condition, (iii) monitors the payment history and aging of customers’ receivables, and (iv) monitors open orders against an individual customer’s outstanding receivable balance.
The Company’s allowance for credit losses is maintained for trade accounts receivable based on the expected collectability, the historical collection experience, the length of time an account is outstanding, the financial position of the customer and information provided by credit rating services. The Company has not experienced significant customer payment defaults, or identified other significant collectability concerns.

The following is a roll forward of the allowance for credit losses:

Three Months Ended
(In thousands)June 29, 2024July 1, 2023
Beginning balance$5,695 $4,932 
Credit loss37 151 
Write-offs(13)(36)
Ending balance$5,719 $5,047 

Other Fair Value Measurements

Fair value is defined as the exit price that would be received from the sale of an asset or paid to transfer a liability, using assumptions that market participants would use in pricing an asset or liability. The fair value guidance establishes the following three-level hierarchy used for measuring fair value:

Level 1 — Inputs to the valuation methodology are quoted market prices for identical assets or liabilities.
Level 2 — Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets or liabilities and market-corroborated inputs.
Level 3 — Inputs to the valuation methodology are unobservable inputs based on management’s best estimate of inputs market participants would use in pricing the asset or liability at the measurement date, including assumptions about risk.
The Company’s money market funds carried at fair value are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices.

Fair Value of Derivative Instruments

The following table presents the effect of the Company’s derivative instruments designated as cash flow hedges and those not designated as hedging instruments under ASC 815 in its unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the three months ended June 29, 2024:

Derivative InstrumentsAmount of Gain Recognized
in Accumulated Other Comprehensive Loss
Amount of Gain (Loss) Reclassified
from Accumulated Other Comprehensive Loss into
Earnings
Location in
Condensed Consolidated Statements of Income and Comprehensive Income
Amount of Gain Excluded from
Effectiveness
Testing
Location in
Condensed Consolidated Statements of Income and Comprehensive Income
(In thousands)
Designated foreign currency hedge contracts, net of tax$269 $(393)Net revenues, COGS and SG&A$157 Interest and other income (expense), net
Non-designated foreign currency hedge contracts$— $—  $226 Interest and other income (expense), net
Designated interest rate swaps, net of tax$430 $Interest and other income (expense), net$— 

The Company did not have fair value hedges or net investment hedges outstanding as of June 29, 2024 or March 30, 2024. As of June 29, 2024, no material deferred taxes were recognized for designated foreign currency hedges.

ASC 815 requires all derivative instruments to be recognized at their fair values as either assets or liabilities on the balance sheet. The Company determines the fair value of its derivative instruments using the framework prescribed by ASC 820, Fair Value Measurements and Disclosures, by considering the estimated amount it would receive or pay to sell or transfer these instruments at the reporting date and by taking into account current interest rates, currency exchange rates, current interest rate curves, interest rate volatilities, the creditworthiness of the counterparty for assets, and its creditworthiness for liabilities. In certain instances, the Company may utilize financial models to measure fair value. Generally, the Company uses inputs that include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; other observable inputs for the asset or liability; and inputs derived principally from, or corroborated by, observable market data by correlation or other means. As of June 29, 2024, the Company has classified its derivative assets and liabilities within Level 2 of the fair value hierarchy prescribed by ASC 815, as discussed below, because these observable inputs are available for substantially the full term of its derivative instruments.

The following tables present the fair value of the Company’s derivative instruments as they appear in its Condensed Consolidated Balance Sheets as of June 29, 2024 and March 30, 2024:

(In thousands)Location in Condensed Consolidated
Balance Sheets
As ofAs of
June 29, 2024March 30, 2024
Derivative Assets:   
Designated foreign currency hedge contractsOther current assets$1,792 $1,353 
Non-designated foreign currency hedge contractsOther current assets125 154 
Designated interest rate swapsOther current assets1,636 1,673 
Designated interest rate swapsOther long-term assets— 62 
  $3,553 $3,242 
Derivative Liabilities:   
Designated foreign currency hedge contractsOther current liabilities$560 $395 
Non-designated foreign currency hedge contractsOther current liabilities38 536 
  $598 $931 
Fair Value Measured on a Recurring Basis

Financial assets and financial liabilities measured at fair value on a recurring basis consist of the following as of June 29, 2024 and March 30, 2024.
As of June 29, 2024
(In thousands)Level 1Level 2Level 3Total
Assets   
Money market funds$195,279 $— $— $195,279 
Designated foreign currency hedge contracts— 1,792 — 1,792 
Non-designated foreign currency hedge contracts— 125 — 125 
Designated interest rate swaps— 1,636 — 1,636 
 $195,279 $3,553 $ $198,832 
Liabilities   
Designated foreign currency hedge contracts$— $560 $— $560 
Non-designated foreign currency hedge contracts— 38 — 38 
Contingent consideration— — 25,000 25,000 
 $ $598 $25,000 $25,598 
As of March 30, 2024
Level 1Level 2Level 3Total
Assets
Money market funds$43,073 $— $— $43,073 
Designated foreign currency hedge contracts— 1,353 — 1,353 
Non-designated foreign currency hedge contracts— 154 — 154 
Designated interest rate swaps— 1,735 — 1,735 
 $43,073 $3,242 $ $46,315 
Liabilities   
Designated foreign currency hedge contracts$— $395 $— $395 
Non-designated foreign currency hedge contracts— 536 — 536 
$ $931 $ $931 

Foreign currency hedge contracts - The fair value of foreign currency hedge contracts was measured using significant other observable inputs and valued by reference to over-the-counter quoted market prices for similar instruments. The Company does not believe that the fair value of these derivative instruments differs significantly from the amount that could be realized upon settlement or maturity, or that the changes in fair value will have a significant effect on its results of operations, financial condition or cash flows.

Interest rate swaps - The fair values of interest rate swaps are measured using the present value of expected future cash flows using market-based observable inputs, including credit risk and interest rate yield curves. The Company does not believe that the fair values of these derivative instruments differ significantly from the amounts that could be realized upon settlement or maturity, or that the changes in fair value will have a significant effect on its results of operations, financial condition or cash flows.

Contingent consideration - The fair value of contingent consideration liabilities is based on significant unobservable inputs, including management estimates and assumptions, and is measured based on the probability-weighted present value of the payments expected to be made. Accordingly, the fair value of contingent consideration has been classified as level 3 within the fair value hierarchy.
The level 3 fair value measurements of contingent consideration liabilities include the following significant unobservable inputs:

Fair Value atValuation Unobservable
(In thousands)June 29, 2024TechniqueInputRange
Revenue-based payments$19,700 Monte Carlo Simulation ModelDiscount rate6.3%
Projected year of payments2025 - 2027
Regulatory-based payment$4,600 Monte Carlo Simulation ModelDiscount rate6.1%
Probability of payment50%
Projected year of payment2026 - 2028
Event-based payment$700 Monte Carlo Simulation ModelDiscount rate5.8%
Projected year of payment2028

The fair value of contingent consideration associated with the Attune Medical acquisition was $25.0 million at June 29, 2024. As of June 29, 2024, $5.9 million was included in other current liabilities and $19.1 million was included in other long-term liabilities on the Condensed Consolidated Balance Sheets. The Company has deemed the change in fair value of the contingent consideration liability to be immaterial during the first quarter of fiscal 2025 and therefore did not record any adjustments.

A reconciliation of the change in the fair value of contingent consideration is included in the following table:
(In thousands)
Balance at March 30, 2024
$— 
Acquisition date fair value of contingent consideration25,000 
Balance at June 29, 2024
$25,000 

Other Fair Value Disclosures

The fair values of the 2026 Notes and 2029 Notes were $271.9 million and $688.0 million as of June 29, 2024, respectively, which were determined by using the market price on the last trading day of the reporting period and are considered as level 2 in the fair value hierarchy.
The senior unsecured term loan (which is carried at amortized cost), accounts receivable and accounts payable approximate fair value.
     
Level 2 | Convertible Senior Notes Due 2026              
Derivative [Line Items]              
Convertible notes, fair value       $ 271,900,000      
Level 2 | Convertible Senior Notes Due 2029              
Derivative [Line Items]              
Convertible notes, fair value       688,000,000      
Fair Value, Recurring [Member]              
Derivative [Line Items]              
Liabilities fair value       25,598,000   $ 931,000  
Fair Value, Recurring [Member] | Level 2              
Derivative [Line Items]              
Liabilities fair value       598,000   931,000  
Term loan, net of financing fees              
Derivative [Line Items]              
Debt outstanding       242,182,000   261,971,000  
Revolving credit facility              
Derivative [Line Items]              
Interest rate     0.10%        
Debt outstanding       $ 0   50,000,000  
Foreign Exchange Contract              
Derivative [Line Items]              
Percentage of sales generated outside the US       26.00%      
Maturity period for foreign currency contracts       1 year      
Interest Rate Swap              
Derivative [Line Items]              
Number of interest rate swaps entered | swap 2 4          
Derivative, percentage of notional value of debt 80.00%            
Derivative, blended fixed interest rate 4.12%            
Notional amount       $ 208,600,000     $ 219,800,000
Contingent Consideration | Fair Value, Recurring [Member]              
Derivative [Line Items]              
Liabilities fair value       25,000,000   0  
Designated as Hedging Instrument | Foreign Exchange Contract              
Derivative [Line Items]              
Deferred income tax expense (benefit)       0      
Designated as Hedging Instrument | Foreign Exchange Contract              
Derivative [Line Items]              
Designated foreign currency hedge contracts outstanding       49,000,000.0   74,000,000.0  
Designated as Hedging Instrument | Cash Flow Hedging              
Derivative [Line Items]              
Gain (loss) to be reclassified within the next twelve months       300,000      
Not Designated as Hedging Instrument | Foreign Exchange Contract              
Derivative [Line Items]              
Non-designated foreign currency hedge contracts outstanding       27,400,000   $ 39,900,000  
Attune Medical              
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]              
Contingent consideration         $ 25,000,000    
Attune Medical | Other Current Liabilities              
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]              
Contingent consideration       5,900,000      
Attune Medical | Other Noncurrent Liabilities              
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]              
Contingent consideration       $ 19,100,000