|
Minnesota
|
41-0908057
|
(State or other jurisdiction
of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
14000 Technology Drive
Eden Prairie, Minnesota
|
55344
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Name of each exchange on which registered
|
Common Stock, $0.25 par value
|
The NASDAQ Stock Market LLC
(NASDAQ Global Select Market)
|
Table of Contents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Ground Vehicles (approximately
55%
of Test revenue for fiscal year
2016
)
|
◦
|
Road simulators for durability simulation;
|
◦
|
Tire performance and rolling resistance measurement systems;
|
◦
|
Moving road-plane systems and balances for aerodynamic measurements in wind tunnels; and
|
◦
|
Service to maintain the equipment and maximize the life of the product.
|
•
|
Materials (approximately
30%
of Test revenue for fiscal year
2016
)
|
•
|
Structures (approximately
15%
of Test revenue for fiscal year
2016
)
|
•
|
Position Sensors (approximately
70%
of Sensors revenue for fiscal year
2016
)
|
•
|
Test Sensors (approximately
15%
of Sensors revenue for fiscal year
2016
)
|
•
|
Industrial Sensors (approximately
10%
of Sensors revenue for fiscal year
2016
)
|
•
|
Systems Sensors (approximately
5%
of Sensors revenue for fiscal year
2016
)
|
•
|
exposure to the risk of currency value fluctuations, where payment for products is denominated in a currency other than U.S. dollars;
|
•
|
variability in the U.S. dollar value of foreign currency-denominated assets, earnings and cash flows;
|
•
|
difficulty enforcing agreements, including patent and trademarks, and collecting receivables through foreign legal systems;
|
•
|
trade protection measures and import or export licensing requirements;
|
•
|
tax rates in certain foreign countries that exceed those in the U.S. and the imposition of withholding requirements on foreign earnings;
|
•
|
higher danger of terrorist activity, war or civil unrest, compared to domestic operations;
|
•
|
imposition of tariffs, exchange controls or other restrictions;
|
•
|
difficulty in staffing and managing global operations;
|
•
|
required compliance with a variety of foreign laws and regulations and U.S. laws and regulations, such as the Foreign Corrupt Practices Act applicable to our international operations and significant compliance costs and penalties for failure to comply with any of these laws and regulations; and
|
•
|
changes in general economic and political conditions in countries where we operate, particularly in emerging markets.
|
•
|
investors’ anticipation of the sale into the market of a substantial number of additional shares of common stock received upon settlement of the purchase contract component of the tangible equity units;
|
•
|
possible sales of our common stock by investors who view the tangible equity units as a more attractive means of equity participation in us than owning shares of our common stock; and
|
•
|
hedging or arbitrage trading activity that may develop involving the tangible equity units, the purchase contracts and our common stock.
|
•
|
failure to implement our business plan for the combined business;
|
•
|
unanticipated issues in integrating equipment, logistics, information, communications and other systems;
|
•
|
possible inconsistencies in standards, controls, contracts, procedures and policies;
|
•
|
impacts of change in control provisions in contracts and agreements;
|
•
|
failure to retain key customers and suppliers;
|
•
|
unanticipated changes in applicable laws and regulations;
|
•
|
failure to recruit and retain key employees to operate the combined business;
|
•
|
increased competition within the industries in which PCB operates;
|
•
|
inherent operating risks in the business;
|
•
|
unanticipated issues, expenses and liabilities;
|
•
|
additional reporting requirements pursuant to applicable rules and regulations; and
|
•
|
additional requirements relating to internal control over financial reporting.
|
•
|
suitable candidates may not exist or may not be available at acceptable costs;
|
•
|
failure to achieve the financial and strategic goals for the acquired and combined businesses;
|
•
|
difficulty integrating the operations and personnel of the acquired businesses;
|
•
|
disruption of ongoing business and distraction of management from the ongoing business;
|
•
|
dilution of existing shareholders and earnings per share;
|
•
|
unanticipated, undisclosed or inaccurately assessed liabilities, legal risks and costs; and
|
•
|
difficulties retaining the key vendors, customers or employees of the acquired business.
|
Location
|
Use of Facility
|
Approximate
Square Footage |
|
Eden Prairie, Minnesota (USA)
|
Corporate headquarters and primary Test manufacturing and research
|
420,000
|
|
Depew, New York (USA)
|
Sensors manufacturing
|
47,000
|
|
|
Sensors manufacturing, sales and service administration
|
91,000
|
|
|
Sensors manufacturing
|
6,000
|
|
Cary, North Carolina (USA)
|
Sensors manufacturing, research and North American sales and service administration
|
65,000
|
|
Provo, Utah (USA)
|
Sensors sales and service administration
|
13,000
|
|
|
Sensors manufacturing
|
12,000
|
|
Farmington Hills, Michigan (USA)
|
Sensors manufacturing, sales and service administration
|
16,000
|
|
Lancaster, New York (USA)
|
Sensors sales and service administration
|
1,000
|
|
Berlin, Germany
|
Test manufacturing and European sales and service administration
|
72,000
|
|
Shanghai, China
|
Test manufacturing, sales and service administration
|
129,000
|
|
Shenzhen, China
|
Test manufacturing, research, sales and service administration
|
75,000
|
|
Total
|
|
947,000
|
|
Location
|
|
Use of Facility
|
|
Lease
Expires |
|
Approximate
Square Footage |
|
Swartz Creek, Michigan (USA)
|
|
Test manufacturing and research
|
|
2017
|
|
8,000
|
|
Latham, New York (USA)
|
|
Sensors manufacturing, sales and service administration
|
|
2020
|
|
5,000
|
|
Cary, North Carolina (USA)
|
|
Sensors manufacturing
|
|
2020
|
|
8,000
|
|
Halifax, North Carolina (USA)
|
|
Sensors manufacturing, sales and service administration
|
|
2017
|
|
51,000
|
|
Lexington, North Carolina (USA)
|
|
Test manufacturing
|
|
2019
|
|
12,000
|
|
Cincinnati, Ohio (USA)
|
|
Sensors manufacturing, warehouse, sales and service administration
|
|
2018
|
|
16,000
|
|
|
|
Sensors warehouse, sales and service administration
|
|
2018
|
|
9,000
|
|
Beijing, China
|
|
Test sales and service administration
|
|
2017
|
|
6,000
|
|
|
|
Sensors sales and service administration
|
|
2018
|
|
5,000
|
|
Shanghai, China
|
|
Test sales, service administration and assembly
|
|
2018
|
|
13,000
|
|
|
|
Test sales and service administration
|
|
2018
|
|
7,000
|
|
|
|
Test land under Shanghai facility
|
|
2056
|
|
161,000
|
|
Shenzhen, China
|
|
Test manufacturing and warehouse
|
|
2017
|
|
13,000
|
|
|
|
Test manufacturing and warehouse
|
|
2017
|
|
16,000
|
|
|
|
Test land under Shenzhen facility
|
|
2047
|
|
155,000
|
|
Creteil, France
|
|
Test sales and service administration
|
|
2018
|
|
16,000
|
|
Huckelhoven, Germany
|
|
Sensors sales and service administration
|
|
2022
|
|
12,000
|
|
Ludenscheid, Germany
|
|
Sensors manufacturing, research and European sales and service administration
|
|
2017
|
|
55,000
|
|
|
|
Sensors sales and service administration
|
|
2017
|
|
10,000
|
|
|
|
Sensors manufacturing
|
|
2017
|
|
10,000
|
|
Tokyo, Japan
|
|
Test sales and service administration
|
|
2018
|
|
7,000
|
|
|
|
Sensors manufacturing and Asia sales and service administration
|
|
2025
|
|
5,000
|
|
Sungnam, South Korea
|
|
Test sales, service administration and assembly
|
|
2019
|
|
17,000
|
|
Guildford, UK
|
|
Test sales, service and manufacturing
|
|
2025
|
|
8,000
|
|
Berlin, Germany
|
|
Test land under Berlin facility
|
|
2052
|
|
97,000
|
|
Other Locations
1
|
|
Test and Sensors other sales and service administration
|
|
|
|
73,000
|
|
Total
|
|
|
|
|
|
795,000
|
|
1
|
We also lease space in the U.S., Europe and Asia for Test and Sensors sales and service administration, including locations in China, France, Germany, India, Italy, Japan, Russia, Spain, Sweden and the United Kingdom. Neither the amount of leased space nor the rental obligations in these locations is significant individually or in aggregate.
|
ITEM
5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
(in thousands, except shares)
|
|
Total Number
of Shares
Purchased
|
|
|
Average
Price Paid
per Share
|
|
|
Total Number
of Shares
Purchased as
Part of
Publicly
Announced
Plans or
Programs
|
|
|
Maximum
Number of
Shares
that May Yet
be Purchased
Under the
Plans or
Programs
|
|
|
July 3, 2016 - August 6, 2016
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
437,638
|
|
August 7, 2016 - September 3, 2016
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
437,638
|
|
September 4, 2016 - October 1, 2016
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
437,638
|
|
|
|
Fiscal Year
|
||||||||||||||||||||||
(in actual dollars)
|
|
2011
1
|
|
2012
1
|
|
2013
1
|
|
2014
|
|
2015
|
|
2016
|
||||||||||||
MTS Systems Corporation
|
|
$
|
100.00
|
|
|
$
|
178.96
|
|
|
$
|
217.39
|
|
|
$
|
238.93
|
|
|
$
|
204.29
|
|
|
$
|
166.74
|
|
Russell 2000 Index
|
|
100.00
|
|
|
131.91
|
|
|
171.62
|
|
|
181.13
|
|
|
182.75
|
|
|
208.44
|
|
||||||
SIC Code 3820 Peer Group
2
|
|
100.00
|
|
|
125.39
|
|
|
169.60
|
|
|
193.30
|
|
|
185.88
|
|
|
233.04
|
|
1
|
Fiscal year
2013
refers to the fiscal year ended
September 28, 2013
, fiscal year
2012
refers to the fiscal year ended
September 29, 2012
and fiscal year
2011
refers to the fiscal year ended
October 1, 2011
.
|
ITEM
6.
|
SELECTED FINANCIAL DATA
|
|
|
Fiscal Year
1
|
||||||||||||||||||
(in thousands, except per share data)
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Operating Results
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
650,147
|
|
|
$
|
563,934
|
|
|
$
|
564,328
|
|
|
$
|
569,439
|
|
|
$
|
542,256
|
|
Gross profit
|
|
231,404
|
|
|
219,613
|
|
|
223,643
|
|
|
231,939
|
|
|
236,192
|
|
|||||
Gross margin %
|
|
35.6
|
%
|
|
38.9
|
%
|
|
39.6
|
%
|
|
40.7
|
%
|
|
43.6
|
%
|
|||||
Research and development expense
|
|
$
|
25,336
|
|
|
$
|
23,705
|
|
|
$
|
23,844
|
|
|
$
|
22,812
|
|
|
$
|
21,893
|
|
Research and development expense as a % of revenue
|
|
3.9
|
%
|
|
4.2
|
%
|
|
4.2
|
%
|
|
4.0
|
%
|
|
4.0
|
%
|
|||||
Effective income tax rate
|
|
18.0
|
%
|
|
23.2
|
%
|
|
28.1
|
%
|
|
27.1
|
%
|
|
35.4
|
%
|
|||||
Net income
|
|
$
|
27,494
|
|
|
$
|
45,462
|
|
|
$
|
42,009
|
|
|
$
|
57,806
|
|
|
$
|
51,556
|
|
Net income as a % of revenue
|
|
4.2
|
%
|
|
8.1
|
%
|
|
7.4
|
%
|
|
10.2
|
%
|
|
9.5
|
%
|
|||||
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
1.72
|
|
|
$
|
3.03
|
|
|
$
|
2.76
|
|
|
$
|
3.69
|
|
|
$
|
3.24
|
|
Diluted
|
|
$
|
1.70
|
|
|
$
|
3.00
|
|
|
$
|
2.73
|
|
|
$
|
3.64
|
|
|
$
|
3.21
|
|
Weighted average shares outstanding
2
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
16,027
|
|
|
14,984
|
|
|
15,218
|
|
|
15,664
|
|
|
15,913
|
|
|||||
Diluted
|
|
16,179
|
|
|
15,142
|
|
|
15,397
|
|
|
15,861
|
|
|
16,077
|
|
|||||
Depreciation and amortization
|
|
24,077
|
|
|
21,106
|
|
|
19,279
|
|
|
16,589
|
|
|
13,782
|
|
|||||
Financial Position
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
|
$
|
1,188,020
|
|
|
$
|
460,831
|
|
|
$
|
487,408
|
|
|
$
|
451,277
|
|
|
$
|
409,438
|
|
Interest-bearing debt
3
|
|
484,985
|
|
|
21,183
|
|
|
60,000
|
|
|
35,000
|
|
|
—
|
|
|||||
Total shareholders’ equity
|
|
405,260
|
|
|
258,142
|
|
|
258,127
|
|
|
256,537
|
|
|
226,719
|
|
|||||
Interest-bearing debt as a % of shareholders’ equity
|
|
119.7
|
%
|
|
8.2
|
%
|
|
23.2
|
%
|
|
13.6
|
%
|
|
—
|
%
|
|||||
Return on equity
4
|
|
10.7
|
%
|
|
17.6
|
%
|
|
16.4
|
%
|
|
25.5
|
%
|
|
24.5
|
%
|
|||||
Return on invested capital
5
|
|
8.6
|
%
|
|
15.5
|
%
|
|
15.4
|
%
|
|
22.5
|
%
|
|
25.1
|
%
|
|||||
Other Statistics
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Backlog of orders at year-end
|
|
$
|
370,523
|
|
|
$
|
353,013
|
|
|
$
|
326,473
|
|
|
$
|
290,151
|
|
|
$
|
298,363
|
|
Dividends declared per share
|
|
1.20
|
|
|
1.20
|
|
|
1.20
|
|
|
1.20
|
|
|
1.05
|
|
|||||
Capital Expenditures
|
|
20,806
|
|
|
18,445
|
|
|
20,038
|
|
|
29,690
|
|
|
15,625
|
|
1
|
Fiscal years
2016
,
2015
,
2014
,
2013
and
2012
include 52, 53, 52, 52 and 52 weeks, respectively.
|
2
|
Assumes the conversion of potential common shares using the treasury stock method.
|
3
|
Fiscal year 2016 consists of short- and long-term borrowings, fiscal years 2015, 2014, 2013 and 2012 consists of short-term borrowings.
|
4
|
Calculated by dividing net income by beginning shareholders’ equity.
|
5
|
The measure Return on Invested Capital (ROIC) is not a measure of performance presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP). ROIC is calculated by dividing adjusted net income by average invested capital. Adjusted net income is calculated by excluding after-tax interest expense from reported net income. In addition, adjusted net income also excludes acquisition-related expense, net of tax, acquisition integration expenses, net of tax, acquisition inventory step-up, net of tax, restructuring expense, net of tax and the 2012 cost related to the settlement of the U.S. Government investigation. Average invested capital is defined as the aggregate of average interest-bearing debt and average shareholders’ equity and is calculated as the sum of current and prior year ending amounts divided by two. Because the ratio is not prescribed or authorized by GAAP, the ROIC percentage is a non-GAAP financial measure. We believe ROIC is useful to investors as a measure of operating performance and of the effectiveness of the use of capital in our operations. We use ROIC as a measure to monitor and evaluate operating performance relative to our invested capital. This measure should not be construed as an alternative to return on equity or any other measure determined in accordance with GAAP.
|
|
|
Fiscal Year
|
||||||||||||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Net income
|
|
$
|
27,494
|
|
|
$
|
45,462
|
|
|
$
|
42,009
|
|
|
$
|
57,806
|
|
|
$
|
51,556
|
|
Expense to settle U.S. Government investigation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,750
|
|
|||||
Acquisition-related expense, net of tax
|
|
7,322
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Acquisition integration expense, net of tax
|
|
2,049
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Acquisition inventory step-up, net of tax
|
|
5,692
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Restructuring expense, net of tax
|
|
1,465
|
|
|
—
|
|
|
4,376
|
|
|
—
|
|
|
—
|
|
|||||
Interest expense, net of tax
|
|
6,065
|
|
|
767
|
|
|
637
|
|
|
372
|
|
|
535
|
|
|||||
Adjusted net income
*
|
|
$
|
50,087
|
|
|
$
|
46,229
|
|
|
$
|
47,022
|
|
|
$
|
58,178
|
|
|
$
|
59,841
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total beginning shareholders’ equity
|
|
$
|
258,142
|
|
|
$
|
258,127
|
|
|
$
|
256,537
|
|
|
$
|
226,719
|
|
|
$
|
210,848
|
|
Total ending shareholders’ equity
|
|
405,260
|
|
|
258,142
|
|
|
258,127
|
|
|
256,537
|
|
|
226,719
|
|
|||||
Total beginning interest bearing debt
|
|
21,183
|
|
|
60,000
|
|
|
35,000
|
|
|
—
|
|
|
40,000
|
|
|||||
Total ending interest bearing debt
|
|
484,985
|
|
|
21,183
|
|
|
60,000
|
|
|
35,000
|
|
|
—
|
|
|||||
Sum of invested capital
|
|
$
|
1,169,570
|
|
|
$
|
597,452
|
|
|
$
|
609,664
|
|
|
$
|
518,256
|
|
|
$
|
477,567
|
|
Average invested capital
*
|
|
$
|
584,785
|
|
|
$
|
298,726
|
|
|
$
|
304,832
|
|
|
$
|
259,128
|
|
|
$
|
238,784
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Return on invested capital
*
|
|
8.6
|
%
|
|
15.5
|
%
|
|
15.4
|
%
|
|
22.5
|
%
|
|
25.1
|
%
|
*
|
Denotes non-GAAP financial measures.
|
|
Fiscal Year
|
||||||||||||||||||||||||||||
|
|
2016
|
|
|
|
2015
|
|
|
|
2014
|
|
||||||||||||||||||
(in thousands)
|
Pre-Tax
|
Tax
|
Net
|
|
Pre-Tax
|
Tax
|
Net
|
|
Pre-Tax
|
Tax
|
Net
|
||||||||||||||||||
Net income
|
$
|
33,512
|
|
$
|
6,018
|
|
$
|
27,494
|
|
|
$
|
59,172
|
|
$
|
13,710
|
|
$
|
45,462
|
|
|
$
|
58,443
|
|
$
|
16,434
|
|
$
|
42,009
|
|
Acquisition-related expense
ª
|
10,170
|
|
2,848
|
|
7,322
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Acquisition integration expense
ª
|
2,846
|
|
797
|
|
2,049
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Acquisition inventory step-up
ª
|
7,916
|
|
2,224
|
|
5,692
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Restructuring expense
¬
|
2,165
|
|
700
|
|
1,465
|
|
|
—
|
|
—
|
|
—
|
|
|
6,336
|
|
1,960
|
|
4,376
|
|
|||||||||
Interest expense
ª
|
8,424
|
|
2,359
|
|
6,065
|
|
|
1,204
|
|
437
|
|
767
|
|
|
1,003
|
|
366
|
|
637
|
|
|||||||||
Adjusted net income
*
|
$
|
65,033
|
|
$
|
14,946
|
|
$
|
50,087
|
|
|
$
|
60,376
|
|
$
|
14,147
|
|
$
|
46,229
|
|
|
$
|
65,782
|
|
$
|
18,760
|
|
$
|
47,022
|
|
|
|
Fiscal Year
|
||||||||||||||||||
|
|
|
2013
|
|
|
|
2012
|
|
||||||||||||
(in thousands)
|
|
Pre-Tax
|
Tax
|
Net
|
|
Pre-Tax
|
Tax
|
Net
|
||||||||||||
Net income
|
|
$
|
79,254
|
|
$
|
21,448
|
|
$
|
57,806
|
|
|
$
|
79,780
|
|
$
|
28,224
|
|
$
|
51,556
|
|
Expense to settle U.S. Government investigation
|
|
—
|
|
—
|
|
—
|
|
|
7,750
|
|
—
|
|
7,750
|
|
||||||
Interest expense
ª
|
|
591
|
|
219
|
|
372
|
|
|
849
|
|
314
|
|
535
|
|
||||||
Adjusted net income
*
|
|
$
|
79,845
|
|
$
|
21,667
|
|
$
|
58,178
|
|
|
$
|
88,379
|
|
$
|
28,538
|
|
$
|
59,841
|
|
ª
|
In determining the tax impact of acquisition-related, acquisition integration, acquisition inventory step-up expenses and interest expense, we applied a U.S. effective income tax rate before discrete items to these expenses.
|
¬
|
In determining the tax impact of restructuring expenses, we applied the statutory rate in effect for each jurisdiction where restructuring expenses were incurred.
|
*
|
Denotes non-GAAP financial measures.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Overview
|
•
|
Financial Results
|
•
|
Cash Flow Comparison
|
•
|
Liquidity and Capital Resources
|
•
|
Off-Balance Sheet Arrangements
|
•
|
Critical Accounting Policies
|
•
|
Recently Issued Accounting Pronouncements
|
•
|
Quarterly Financial Information
|
•
|
Forward Looking Statements
|
•
|
Realize growth within the rapidly expanding sensors market with strong forecasted growth over the next five years;
|
•
|
Expand service offerings in our Test segment; and
|
•
|
Capture growth in ground vehicle and advance materials testing driven by environmental and energy conservation initiatives.
|
|
|
|
|
Estimated
|
|
|
||||||||||||||
(in thousands)
|
|
2016
|
|
Business
Change |
|
Acquisition /
Restructuring 1 |
|
Currency
Translation |
|
2015
|
||||||||||
Revenue
|
|
$
|
650,147
|
|
|
$
|
45,456
|
|
|
$
|
44,503
|
|
|
$
|
(3,746
|
)
|
|
$
|
563,934
|
|
Cost of sales
|
|
418,743
|
|
|
44,233
|
|
|
32,518
|
|
|
(2,329
|
)
|
|
344,321
|
|
|||||
Gross profit
|
|
231,404
|
|
|
1,223
|
|
|
11,985
|
|
|
(1,417
|
)
|
|
219,613
|
|
|||||
Gross margin
|
|
35.6
|
%
|
|
|
|
|
|
|
|
38.9
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling and marketing
|
|
94,992
|
|
|
3,253
|
|
|
9,432
|
|
|
(667
|
)
|
|
82,974
|
|
|||||
General and administrative
|
|
69,313
|
|
|
1,601
|
|
|
16,860
|
|
|
(586
|
)
|
|
51,438
|
|
|||||
Research and development
|
|
25,336
|
|
|
(793
|
)
|
|
2,515
|
|
|
(91
|
)
|
|
23,705
|
|
|||||
Total operating expenses
|
|
189,641
|
|
|
4,061
|
|
|
28,807
|
|
|
(1,344
|
)
|
|
158,117
|
|
|||||
Income from operations
|
|
$
|
41,763
|
|
|
$
|
(2,838
|
)
|
|
$
|
(16,822
|
)
|
|
$
|
(73
|
)
|
|
$
|
61,496
|
|
1
|
The Acquisition / Restructuring column includes revenues and costs from the acquisition of PCB, costs incurred as part of the acquisition of PCB and restructuring costs ("acquisition and restructuring costs").
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Revenue
|
|
$
|
650,147
|
|
|
$
|
563,934
|
|
|
$
|
86,213
|
|
|
15.3
|
%
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Americas
|
|
$
|
185,883
|
|
|
$
|
173,523
|
|
|
$
|
12,360
|
|
|
7.1
|
%
|
Europe
|
|
163,944
|
|
|
149,308
|
|
|
14,636
|
|
|
9.8
|
%
|
|||
Asia
|
|
300,320
|
|
|
241,103
|
|
|
59,217
|
|
|
24.6
|
%
|
|||
Total Revenue
|
|
$
|
650,147
|
|
|
$
|
563,934
|
|
|
$
|
86,213
|
|
|
15.3
|
%
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Gross profit
|
|
$
|
231,404
|
|
|
$
|
219,613
|
|
|
$
|
11,791
|
|
|
5.4
|
%
|
Gross margin
|
|
35.6
|
%
|
|
38.9
|
%
|
|
(3.3
|
)
|
|
ppts
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Selling and marketing
|
|
$
|
94,992
|
|
|
$
|
82,974
|
|
|
$
|
12,018
|
|
|
14.5
|
%
|
% of Revenue
|
|
14.6
|
%
|
|
14.7
|
%
|
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
General and administrative
|
|
$
|
69,313
|
|
|
$
|
51,438
|
|
|
$
|
17,875
|
|
|
34.8
|
%
|
% of Revenue
|
|
10.7
|
%
|
|
9.1
|
%
|
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Research and development
|
|
$
|
25,336
|
|
|
$
|
23,705
|
|
|
$
|
1,631
|
|
|
6.9
|
%
|
% of Revenue
|
|
3.9
|
%
|
|
4.2
|
%
|
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Income from operations
|
|
$
|
41,763
|
|
|
$
|
61,496
|
|
|
$
|
(19,733
|
)
|
|
(32.1
|
)%
|
% of Revenue
|
|
6.4
|
%
|
|
10.9
|
%
|
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Interest income (expense), net
|
|
$
|
(8,489
|
)
|
|
$
|
(795
|
)
|
|
$
|
(7,694
|
)
|
|
(967.8
|
)%
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Other income (expense), net
|
|
$
|
238
|
|
|
$
|
(1,529
|
)
|
|
$
|
1,767
|
|
|
115.6
|
%
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Provision for income taxes
|
|
$
|
6,018
|
|
|
$
|
13,710
|
|
|
$
|
(7,692
|
)
|
|
(56.1
|
)%
|
Effective Rate
|
|
18.0
|
%
|
|
23.2
|
%
|
|
(5.2
|
)
|
|
ppts
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands, except per share data)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Net income
|
|
$
|
27,494
|
|
|
$
|
45,462
|
|
|
$
|
(17,968
|
)
|
|
(39.5
|
)%
|
Diluted earnings per share
|
|
$
|
1.70
|
|
|
$
|
3.00
|
|
|
$
|
(1.30
|
)
|
|
(43.3
|
)%
|
|
|
|
|
|
Estimated
|
|
|
|||||||||||||
(in thousands)
|
|
2016
|
|
Business
Change |
|
Acquisition / Restructuring
2
|
|
Currency
Translation |
|
2015
|
||||||||||
Revenue
|
|
$
|
512,265
|
|
|
$
|
52,677
|
|
|
$
|
—
|
|
|
$
|
(3,292
|
)
|
|
$
|
462,880
|
|
Cost of sales
|
|
342,240
|
|
|
46,007
|
|
|
299
|
|
|
(2,077
|
)
|
|
298,011
|
|
|||||
Gross profit
|
|
170,025
|
|
|
6,670
|
|
|
(299
|
)
|
|
(1,215
|
)
|
|
164,869
|
|
|||||
Gross margin
|
|
33.2
|
%
|
|
|
|
|
|
|
|
|
|
35.6
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Selling and marketing
|
|
69,650
|
|
|
5,766
|
|
|
129
|
|
|
(691
|
)
|
|
64,446
|
|
|||||
General and administrative
|
|
42,210
|
|
|
1,795
|
|
|
414
|
|
|
(560
|
)
|
|
40,561
|
|
|||||
Research and development
|
|
17,505
|
|
|
(70
|
)
|
|
5
|
|
|
(7
|
)
|
|
17,577
|
|
|||||
Total operating expenses
|
|
129,365
|
|
|
7,491
|
|
|
548
|
|
|
(1,258
|
)
|
|
122,584
|
|
|||||
Income from operations
|
|
$
|
40,660
|
|
|
$
|
(821
|
)
|
|
$
|
(847
|
)
|
|
$
|
43
|
|
|
$
|
42,285
|
|
2
|
The acquisition of PCB did not have an impact on the results of operations of Test during fiscal year 2016.
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Revenue
|
|
$
|
512,265
|
|
|
$
|
462,880
|
|
|
$
|
49,385
|
|
|
10.7
|
%
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Americas
|
|
$
|
131,273
|
|
|
$
|
142,464
|
|
|
$
|
(11,191
|
)
|
|
(7.9
|
)%
|
Europe
|
|
106,941
|
|
|
100,501
|
|
|
6,440
|
|
|
6.4
|
%
|
|||
Asia
|
|
274,051
|
|
|
219,915
|
|
|
54,136
|
|
|
24.6
|
%
|
|||
Total Revenue
|
|
$
|
512,265
|
|
|
$
|
462,880
|
|
|
$
|
49,385
|
|
|
10.7
|
%
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Gross profit
|
|
$
|
170,025
|
|
|
$
|
164,869
|
|
|
$
|
5,156
|
|
|
3.1
|
%
|
Gross margin
|
|
33.2
|
%
|
|
35.6
|
%
|
|
(2.4
|
)
|
|
ppts
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Selling and marketing
|
|
$
|
69,650
|
|
|
$
|
64,446
|
|
|
$
|
5,204
|
|
|
8.1
|
%
|
% of Revenue
|
|
13.6
|
%
|
|
13.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
General and administrative
|
|
$
|
42,210
|
|
|
$
|
40,561
|
|
|
$
|
1,649
|
|
|
4.1
|
%
|
% of Revenue
|
|
8.2
|
%
|
|
8.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Research and development
|
|
$
|
17,505
|
|
|
$
|
17,577
|
|
|
$
|
(72
|
)
|
|
(0.4
|
)%
|
% of Revenue
|
|
3.4
|
%
|
|
3.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Income from operations
|
|
$
|
40,660
|
|
|
$
|
42,285
|
|
|
$
|
(1,625
|
)
|
|
(3.8
|
)%
|
% of Revenue
|
|
7.9
|
%
|
|
9.1
|
%
|
|
|
|
|
|
|
|
|
|
|
Estimated
|
|
|
||||||||||||||
(in thousands)
|
|
2016
|
|
Business
Change |
|
Acquisition /
Restructuring 1 |
|
Currency
Translation |
|
2015
|
||||||||||
Revenue
|
|
$
|
137,882
|
|
|
$
|
(7,221
|
)
|
|
$
|
44,503
|
|
|
$
|
(454
|
)
|
|
$
|
101,054
|
|
Cost of sales
|
|
76,503
|
|
|
(1,774
|
)
|
|
32,219
|
|
|
(252
|
)
|
|
46,310
|
|
|||||
Gross profit
|
|
61,379
|
|
|
(5,447
|
)
|
|
12,284
|
|
|
(202
|
)
|
|
54,744
|
|
|||||
Gross margin
|
|
44.5
|
%
|
|
|
|
|
|
|
|
|
|
|
54.2
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Selling and marketing
|
|
25,342
|
|
|
(2,513
|
)
|
|
9,303
|
|
|
24
|
|
|
18,528
|
|
|||||
General and administrative
|
|
27,103
|
|
|
(194
|
)
|
|
16,446
|
|
|
(26
|
)
|
|
10,877
|
|
|||||
Research and development
|
|
7,831
|
|
|
(723
|
)
|
|
2,510
|
|
|
(84
|
)
|
|
6,128
|
|
|||||
Total operating expenses
|
|
60,276
|
|
|
(3,430
|
)
|
|
28,259
|
|
|
(86
|
)
|
|
35,533
|
|
|||||
Income from operations
|
|
$
|
1,103
|
|
|
$
|
(2,017
|
)
|
|
$
|
(15,975
|
)
|
|
$
|
(116
|
)
|
|
$
|
19,211
|
|
1
|
The Acquisition / Restructuring column includes revenues and costs from the acquisition of PCB, costs incurred as part of the acquisition of PCB and restructuring costs ("acquisition and restructuring costs").
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Revenue
|
|
$
|
137,882
|
|
|
$
|
101,054
|
|
|
$
|
36,828
|
|
|
36.4
|
%
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Americas
|
|
$
|
54,610
|
|
|
$
|
31,059
|
|
|
$
|
23,551
|
|
|
75.8
|
%
|
Europe
|
|
57,003
|
|
|
48,807
|
|
|
8,196
|
|
|
16.8
|
%
|
|||
Asia
|
|
26,269
|
|
|
21,188
|
|
|
5,081
|
|
|
24.0
|
%
|
|||
Total Revenue
|
|
$
|
137,882
|
|
|
$
|
101,054
|
|
|
$
|
36,828
|
|
|
36.4
|
%
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Gross profit
|
|
$
|
61,379
|
|
|
$
|
54,744
|
|
|
$
|
6,635
|
|
|
12.1
|
%
|
Gross margin
|
|
44.5
|
%
|
|
54.2
|
%
|
|
(9.7
|
)
|
|
ppts
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Selling and marketing
|
|
$
|
25,342
|
|
|
$
|
18,528
|
|
|
$
|
6,814
|
|
|
36.8
|
%
|
% of Revenue
|
|
18.4
|
%
|
|
18.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
General and administrative
|
|
$
|
27,103
|
|
|
$
|
10,877
|
|
|
$
|
16,226
|
|
|
149.2
|
%
|
% of Revenue
|
|
19.7
|
%
|
|
10.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Research and development
|
|
$
|
7,831
|
|
|
$
|
6,128
|
|
|
$
|
1,703
|
|
|
27.8
|
%
|
% of Revenue
|
|
5.7
|
%
|
|
6.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Income from operations
|
|
$
|
1,103
|
|
|
$
|
19,211
|
|
|
$
|
(18,108
|
)
|
|
(94.3
|
)%
|
% of Revenue
|
|
0.8
|
%
|
|
19.0
|
%
|
|
|
|
|
|
|
|
|
|
|
Estimated
|
|
|
||||||||||||||
|
|
|
|
Business
|
|
REI
|
|
Currency
|
|
|
||||||||||
(in thousands)
|
|
2015
|
|
Change
|
|
Acquisition
|
|
Translation
|
|
2014
|
||||||||||
Revenue
|
|
$
|
563,934
|
|
|
$
|
27,292
|
|
|
$
|
5,432
|
|
|
$
|
(33,118
|
)
|
|
$
|
564,328
|
|
Cost of sales
|
|
344,321
|
|
|
22,295
|
|
|
3,740
|
|
|
(22,399
|
)
|
|
340,685
|
|
|||||
Gross profit
|
|
219,613
|
|
|
4,997
|
|
|
1,692
|
|
|
(10,719
|
)
|
|
223,643
|
|
|||||
Gross margin
|
|
38.9
|
%
|
|
|
|
|
|
|
|
39.6
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling and marketing
|
|
82,974
|
|
|
(227
|
)
|
|
117
|
|
|
(5,052
|
)
|
|
88,136
|
|
|||||
General and administrative
|
|
51,438
|
|
|
1,284
|
|
|
921
|
|
|
(2,174
|
)
|
|
51,407
|
|
|||||
Research and development
|
|
23,705
|
|
|
384
|
|
|
—
|
|
|
(523
|
)
|
|
23,844
|
|
|||||
Total operating expenses
|
|
158,117
|
|
|
1,441
|
|
|
1,038
|
|
|
(7,749
|
)
|
|
163,387
|
|
|||||
Income from operations
|
|
$
|
61,496
|
|
|
$
|
3,556
|
|
|
$
|
654
|
|
|
$
|
(2,970
|
)
|
|
$
|
60,256
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Revenue
|
|
$
|
563,934
|
|
|
$
|
564,328
|
|
|
$
|
(394
|
)
|
|
(0.1
|
)%
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Americas
|
|
$
|
173,523
|
|
|
$
|
176,133
|
|
|
$
|
(2,610
|
)
|
|
(1.5
|
)%
|
Europe
|
|
149,308
|
|
|
179,043
|
|
|
(29,735
|
)
|
|
(16.6
|
)%
|
|||
Asia
|
|
241,103
|
|
|
209,152
|
|
|
31,951
|
|
|
15.3
|
%
|
|||
Total Revenue
|
|
$
|
563,934
|
|
|
$
|
564,328
|
|
|
$
|
(394
|
)
|
|
(0.1
|
)%
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Gross profit
|
|
$
|
219,613
|
|
|
$
|
223,643
|
|
|
$
|
(4,030
|
)
|
|
(1.8
|
)%
|
Gross margin
|
|
38.9
|
%
|
|
39.6
|
%
|
|
(0.7
|
)
|
|
ppts
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Selling and marketing
|
|
$
|
82,974
|
|
|
$
|
88,136
|
|
|
$
|
(5,162
|
)
|
|
(5.9
|
)%
|
% of Revenue
|
|
14.7
|
%
|
|
15.6
|
%
|
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
General and administrative
|
|
$
|
51,438
|
|
|
$
|
51,407
|
|
|
$
|
31
|
|
|
0.1
|
%
|
% of Revenue
|
|
9.1
|
%
|
|
9.1
|
%
|
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Research and development
|
|
$
|
23,705
|
|
|
$
|
23,844
|
|
|
$
|
(139
|
)
|
|
(0.6
|
)%
|
% of Revenue
|
|
4.2
|
%
|
|
4.2
|
%
|
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Income from operations
|
|
$
|
61,496
|
|
|
$
|
60,256
|
|
|
$
|
1,240
|
|
|
2.1
|
%
|
% of Revenue
|
|
10.9
|
%
|
|
10.7
|
%
|
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Interest income (expense), net
|
|
$
|
(795
|
)
|
|
$
|
(692
|
)
|
|
$
|
(103
|
)
|
|
(14.9
|
)%
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Other income (expense), net
|
|
$
|
(1,529
|
)
|
|
$
|
(1,121
|
)
|
|
$
|
(408
|
)
|
|
(36.4
|
)%
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Provision for income taxes
|
|
$
|
13,710
|
|
|
$
|
16,434
|
|
|
$
|
(2,724
|
)
|
|
(16.6
|
)%
|
Effective Rate
|
|
23.2
|
%
|
|
28.1
|
%
|
|
(4.9
|
)
|
|
ppts
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands, except per share data)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Net income
|
|
$
|
45,462
|
|
|
$
|
42,009
|
|
|
$
|
3,453
|
|
|
8.2
|
%
|
Diluted earnings per share
|
|
$
|
3.00
|
|
|
$
|
2.73
|
|
|
$
|
0.27
|
|
|
9.9
|
%
|
|
|
|
|
|
Estimated
|
|
|
|||||||||||||
(in thousands)
|
|
2015
|
|
Business
Change
|
|
REI
Acquisition
|
|
Currency
Translation
|
|
2014
|
||||||||||
Revenue
|
|
$
|
462,880
|
|
|
$
|
20,435
|
|
|
$
|
5,432
|
|
|
$
|
(21,140
|
)
|
|
$
|
458,153
|
|
Cost of sales
|
|
298,011
|
|
|
18,311
|
|
|
3,740
|
|
|
(16,738
|
)
|
|
292,698
|
|
|||||
Gross profit
|
|
164,869
|
|
|
2,124
|
|
|
1,692
|
|
|
(4,402
|
)
|
|
165,455
|
|
|||||
Gross margin
|
|
35.6
|
%
|
|
|
|
|
|
|
|
|
|
|
36.1
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Selling and marketing
|
|
64,446
|
|
|
(1,231
|
)
|
|
117
|
|
|
(2,905
|
)
|
|
68,465
|
|
|||||
General and administrative
|
|
40,561
|
|
|
595
|
|
|
921
|
|
|
(924
|
)
|
|
39,969
|
|
|||||
Research and development
|
|
17,577
|
|
|
410
|
|
|
—
|
|
|
(6
|
)
|
|
17,173
|
|
|||||
Total operating expenses
|
|
122,584
|
|
|
(226
|
)
|
|
1,038
|
|
|
(3,835
|
)
|
|
125,607
|
|
|||||
Income from operations
|
|
$
|
42,285
|
|
|
$
|
2,350
|
|
|
$
|
654
|
|
|
$
|
(567
|
)
|
|
$
|
39,848
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Revenue
|
|
$
|
462,880
|
|
|
$
|
458,153
|
|
|
$
|
4,727
|
|
|
1.0
|
%
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Americas
|
|
$
|
142,464
|
|
|
$
|
144,633
|
|
|
$
|
(2,169
|
)
|
|
(1.5
|
)%
|
Europe
|
|
100,501
|
|
|
126,886
|
|
|
(26,385
|
)
|
|
(20.8
|
)%
|
|||
Asia
|
|
219,915
|
|
|
186,634
|
|
|
33,281
|
|
|
17.8
|
%
|
|||
Total Revenue
|
|
$
|
462,880
|
|
|
$
|
458,153
|
|
|
$
|
4,727
|
|
|
1.0
|
%
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Gross profit
|
|
$
|
164,869
|
|
|
$
|
165,455
|
|
|
$
|
(586
|
)
|
|
(0.4
|
)%
|
Gross margin
|
|
35.6
|
%
|
|
36.1
|
%
|
|
(0.5
|
)
|
|
ppts
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Selling and marketing
|
|
$
|
64,446
|
|
|
$
|
68,465
|
|
|
$
|
(4,019
|
)
|
|
(5.9
|
)%
|
% of Revenue
|
|
13.9
|
%
|
|
14.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
General and administrative
|
|
$
|
40,561
|
|
|
$
|
39,969
|
|
|
$
|
592
|
|
|
1.5
|
%
|
% of Revenue
|
|
8.8
|
%
|
|
8.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Research and development
|
|
$
|
17,577
|
|
|
$
|
17,173
|
|
|
$
|
404
|
|
|
2.4
|
%
|
% of Revenue
|
|
3.8
|
%
|
|
3.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Income from operations
|
|
$
|
42,285
|
|
|
$
|
39,848
|
|
|
$
|
2,437
|
|
|
6.1
|
%
|
% of Revenue
|
|
9.1
|
%
|
|
8.7
|
%
|
|
|
|
|
|
|
|
|
|
|
Estimated
|
|
|
||||||||||
(in thousands)
|
|
2015
|
|
Business
Change
|
|
Currency
Translation
|
|
2014
|
||||||||
Revenue
|
|
$
|
101,054
|
|
|
$
|
6,857
|
|
|
$
|
(11,978
|
)
|
|
$
|
106,175
|
|
Cost of sales
|
|
46,310
|
|
|
3,984
|
|
|
(5,661
|
)
|
|
47,987
|
|
||||
Gross profit
|
|
54,744
|
|
|
2,873
|
|
|
(6,317
|
)
|
|
58,188
|
|
||||
Gross margin
|
|
54.2
|
%
|
|
|
|
|
|
|
|
54.8
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling and marketing
|
|
18,528
|
|
|
1,004
|
|
|
(2,147
|
)
|
|
19,671
|
|
||||
General and administrative
|
|
10,877
|
|
|
689
|
|
|
(1,250
|
)
|
|
11,438
|
|
||||
Research and development
|
|
6,128
|
|
|
(26
|
)
|
|
(517
|
)
|
|
6,671
|
|
||||
Total operating expenses
|
|
35,533
|
|
|
1,667
|
|
|
(3,914
|
)
|
|
37,780
|
|
||||
Income from operations
|
|
$
|
19,211
|
|
|
$
|
1,206
|
|
|
$
|
(2,403
|
)
|
|
$
|
20,408
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Revenue
|
|
$
|
101,054
|
|
|
$
|
106,175
|
|
|
$
|
(5,121
|
)
|
|
(4.8
|
)%
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Americas
|
|
$
|
31,059
|
|
|
$
|
31,500
|
|
|
$
|
(441
|
)
|
|
(1.4
|
)%
|
Europe
|
|
48,807
|
|
|
52,157
|
|
|
(3,350
|
)
|
|
(6.4
|
)%
|
|||
Asia
|
|
21,188
|
|
|
22,518
|
|
|
(1,330
|
)
|
|
(5.9
|
)%
|
|||
Total Revenue
|
|
$
|
101,054
|
|
|
$
|
106,175
|
|
|
$
|
(5,121
|
)
|
|
(4.8
|
)%
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Gross profit
|
|
$
|
54,744
|
|
|
$
|
58,188
|
|
|
$
|
(3,444
|
)
|
|
(5.9
|
)%
|
Gross margin
|
|
54.2
|
%
|
|
54.8
|
%
|
|
(0.6
|
)
|
|
ppts
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Selling and marketing
|
|
$
|
18,528
|
|
|
$
|
19,671
|
|
|
$
|
(1,143
|
)
|
|
(5.8
|
)%
|
% of Revenue
|
|
18.3
|
%
|
|
18.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
General and administrative
|
|
$
|
10,877
|
|
|
$
|
11,438
|
|
|
$
|
(561
|
)
|
|
(4.9
|
)%
|
% of Revenue
|
|
10.8
|
%
|
|
10.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Research and development
|
|
$
|
6,128
|
|
|
$
|
6,671
|
|
|
$
|
(543
|
)
|
|
(8.1
|
)%
|
% of Revenue
|
|
6.1
|
%
|
|
6.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increased / (Decreased)
|
|||||||
(in thousands)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
Income from operations
|
|
$
|
19,211
|
|
|
$
|
20,408
|
|
|
$
|
(1,197
|
)
|
|
(5.9
|
)%
|
% of Revenue
|
|
19.0
|
%
|
|
19.2
|
%
|
|
|
|
|
|
|
(in thousands)
|
|
Total
|
|
|
Less than
1 year
|
|
|
1 - 3 years
|
|
|
3 - 5 years
|
|
|
More than
5 years
|
|
|||||
Long-term debt
1
|
|
$
|
484,985
|
|
|
$
|
13,141
|
|
|
$
|
25,643
|
|
|
$
|
9,200
|
|
|
$
|
437,001
|
|
Interest payable on long-term debt
2
|
|
152,762
|
|
|
24,406
|
|
|
46,246
|
|
|
44,160
|
|
|
37,950
|
|
|||||
Operating lease obligations
3
|
|
13,219
|
|
|
5,542
|
|
|
4,780
|
|
|
1,061
|
|
|
1,836
|
|
|||||
Other long-term obligations
4
|
|
15,856
|
|
|
1,808
|
|
|
4,276
|
|
|
2,348
|
|
|
7,424
|
|
|||||
Total contractual obligations
5
|
|
$
|
666,822
|
|
|
$
|
44,897
|
|
|
$
|
80,945
|
|
|
$
|
56,769
|
|
|
$
|
484,211
|
|
1
|
Long-term debt includes Term Facility debt and the debt component of the TEUs. Refer to Note 5 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional Term Facility information and Note 9 for additional information regarding the TEUs.
|
2
|
Interest payable on long-term debt includes interest on both the Term Facility and the TEUs.
|
3
|
Operating leases are primarily for office space and automobiles. Refer to Note 14 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional lease information.
|
4
|
Other long-term obligations include liabilities under pension and other retirement plans and warehouse fee obligations.
|
5
|
Long-term income tax liabilities for uncertain tax positions have been excluded from the contractual obligations table as we are not able to make a reasonably reliable estimate of the amount and period of related future payments. At October 1, 2016, our long-term liability for uncertain tax positions was
$6,232
. Refer to Note 8 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional income tax information.
|
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Full
|
||||||||||
(in thousands, except per share data)
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
1
|
|
Year
2
|
||||||||||
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
||||||||||
Fiscal Year 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
|
$
|
140,501
|
|
|
$
|
137,098
|
|
|
$
|
157,700
|
|
|
$
|
214,848
|
|
|
$
|
650,147
|
|
Gross profit
|
|
52,511
|
|
|
45,144
|
|
|
58,113
|
|
|
75,636
|
|
|
231,404
|
|
|||||
Income before income taxes
|
|
13,090
|
|
|
4,221
|
|
|
9,982
|
|
|
6,219
|
|
|
33,512
|
|
|||||
Net income
|
|
$
|
11,774
|
|
|
$
|
2,998
|
|
|
$
|
7,150
|
|
|
$
|
5,572
|
|
|
$
|
27,494
|
|
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
0.79
|
|
|
$
|
0.20
|
|
|
$
|
0.46
|
|
|
$
|
0.29
|
|
|
$
|
1.72
|
|
Diluted
|
|
$
|
0.78
|
|
|
$
|
0.20
|
|
|
$
|
0.46
|
|
|
$
|
0.29
|
|
|
$
|
1.70
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fiscal Year 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
|
$
|
142,584
|
|
|
$
|
143,955
|
|
|
$
|
133,912
|
|
|
$
|
143,483
|
|
|
$
|
563,934
|
|
Gross profit
|
|
56,831
|
|
|
56,542
|
|
|
53,209
|
|
|
53,031
|
|
|
219,613
|
|
|||||
Income before income taxes
|
|
14,885
|
|
|
16,875
|
|
|
15,146
|
|
|
12,266
|
|
|
59,172
|
|
|||||
Net income
|
|
$
|
13,786
|
|
|
$
|
11,706
|
|
|
$
|
10,783
|
|
|
$
|
9,187
|
|
|
$
|
45,462
|
|
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
|
$
|
0.91
|
|
|
$
|
0.78
|
|
|
$
|
0.72
|
|
|
$
|
0.62
|
|
|
$
|
3.03
|
|
Diluted
|
|
$
|
0.90
|
|
|
$
|
0.77
|
|
|
$
|
0.72
|
|
|
$
|
0.61
|
|
|
$
|
3.00
|
|
1
|
In the fourth quarter of fiscal year 2016, we recorded out-of-period adjustments that increased net income in the fourth quarter by $968. The adjustments relate to prior quarters in fiscal years 2016 and 2015. We have evaluated the out-of-period adjustments and have determined that they are not material to our financial position or results of operations for any quarterly period in fiscal year 2016 or 2015.
|
2
|
The earnings per share amounts for each quarter may not sum to the fiscal year amounts due to rounding and the effect of weighting.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
(in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
(Decrease) increase from currency translation on
|
|
|
|
|
|
|
||||||
Revenue
|
|
$
|
(3,746
|
)
|
|
$
|
(33,118
|
)
|
|
$
|
(85
|
)
|
Net Income
|
|
$
|
(78
|
)
|
|
$
|
(2,193
|
)
|
|
$
|
(736
|
)
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
(a)
|
Evaluation of Disclosure Controls and Procedures
|
(b)
|
Management’s Annual Report on Internal Control over Financial Reporting
|
(i)
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
|
(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 receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
|
(iii)
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
|
(c)
|
Remediation of Material Weaknesses in Internal Control over Financial Reporting
|
(d)
|
Changes in Internal Control over Financial Reporting
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Name
|
Age
|
Position
|
David J. Anderson
(1)
|
69
|
Chairman of the Board of Directors
|
Jeffrey A. Graves
|
55
|
Director, President and Chief Executive Officer
|
David D. Johnson
(1,2)
|
61
|
Director
|
Randy J. Martinez
(1,2)
|
62
|
Director
|
Barb J. Samardzich
(2)
|
58
|
Director
|
Michael V. Schrock
(2,3)
|
64
|
Director
|
Gail P. Steinel
(1,3)
|
60
|
Director
|
Maximiliane C. Straub
(4)
|
52
|
Director
|
Chun Hung (Kenneth) Yu
(3)
|
67
|
Director
|
William C. Becker
(5)
|
63
|
President, Materials Test Systems
|
Steven B. Harrison
(6)
|
51
|
President, Vehicles and Structure Test Systems
|
David T. Hore
(7)
|
51
|
President, MTS Sensors
|
Jeffrey P. Oldenkamp
|
44
|
Senior Vice President and Chief Financial Officer
|
Catherine L. Powell
(8)
|
55
|
Senior Vice President, General Counsel and Corporate Secretary
|
(1)
|
Member, Audit Committee
|
(2)
|
Member, Compensation and Leadership Development Committee
|
(3)
|
Member, Governance and Nominating Committee
|
(4)
|
Maximiliane Straub joined the Board on February 6, 2017
|
(5)
|
William Becker joined the Company on October 3, 2016
|
(6)
|
Steven Harrison joined the Company on February 6, 2017
|
(7)
|
David Hore joined the Company on July 5, 2016
|
(8)
|
Catherine Powell provided notice of Good Reason to terminate her employment under the Company's Executive Severance Plan (Severance Plan) on April 5, 2017. We are evaluating the claim under the Severance Plan.
|
•
|
selects our independent registered public accounting firm;
|
•
|
reviews and evaluates significant matters relating to our audit and internal controls;
|
•
|
reviews the scope and results of the audits by, and the recommendations of, our independent registered public accounting firm;
|
•
|
is responsible for monitoring risks related to financial assets, accounting, legal and corporate compliance, discusses legal and compliance matters and assesses the adequacy of Company risk-related internal controls;
|
•
|
pre-approves, in accordance with its pre-approval policy, all audit and permissible non-audit services and fees provided by our independent registered public accounting firm;
|
•
|
reviews our audited consolidated financial statements and meets prior to public release of quarterly and annual financial information; and
|
•
|
meets with our management prior to filing our quarterly and annual reports containing financial statements with the SEC.
|
ITEM
11.
|
EXECUTIVE COMPENSATION
|
•
|
Jeffrey A. Graves, President and CEO;
|
•
|
Jeffrey P. Oldenkamp, Senior Vice President and Chief Financial Officer;
|
•
|
William E. Bachrach, former President, Test;
|
•
|
David T. Hore, President, Sensors;
|
•
|
John V. Emholz, former Senior Vice President, Sensors; and
|
•
|
Catherine L. Powell, Senior Vice President, General Counsel and Corporate Secretary.
|
•
|
Aligns the financial interests of the executives with those of our shareholders, in both the short and long term;
|
•
|
Provides a balanced mix of base salary and incentive compensation that is linked to the achievement of our short-term and long-term goals;
|
•
|
Attracts, motivates and retains highly competent executives; and
|
•
|
Differentiates between executives based upon individual strategic leadership, contributions to overall corporate and/or segment performance and level of responsibility within the organization.
|
Performance Highlights
|
Compensation Outcomes
|
|||
Fiscal Year 2016 Results Related to Target Levels for Incentive Plans
|
Annual Incentives
|
|||
●
|
Total Adjusted Revenue, a non-GAAP financial measure, was $605.6 million
(1)
, up from the previous year’s GAAP revenue of $563.9 million.
|
●
|
Based on achieving 92% of the adjusted EPS goal, 100% of the adjusted revenue goal and 121% of the adjusted WCRR goal, the fiscal year 2016 annual incentive payout for our CEO was 100% of target.
|
|
|
|
|||
●
|
Adjusted ROIC, a non-GAAP financial measure, of 16.3%
(2)
, compared to 15.5%
(3)
in fiscal year 2015.
|
●
|
The payout was capped at target, as our incentive compensation plan restricts over-ranging in the event that the adjusted EPS goal is not achieved. Without the cap, payouts for the CEO would have been 123% of target during fiscal year 2016.
|
|
|
|
|||
●
|
Adjusted diluted earnings per share (EPS), a non-GAAP financial measure, of $3.01
(2)
, compared to the previous year's GAAP diluted EPS of $3.00.
|
|
||
|
Long-Term Incentives
|
|||
|
●
|
Three of the four outstanding stock option grants for our CEO were underwater as of October 1, 2016.
|
||
●
|
Adjusted Working Capital Rate to Revenue (“WCRR”), a non-GAAP financial measure, was 24.0%
(4)
, compared to WCRR of 30.4%
(5)
in fiscal year 2015.
|
|
||
●
|
The performance-based restricted stock units granted in fiscal years 2016 and 2015 were tracking below target payout levels.
|
|||
|
|
|||
|
|
|
○
|
Adjusted ROIC performance was below target levels in both fiscal years 2016 and 2015.
|
|
|
|
○
|
Share prices were below the grant levels.
|
|
|
The overall result is compensation below the targeted opportunity.
|
(1)
|
For purposes of our incentive compensation plans, we use adjusted revenue, which is not a measure of performance presented in accordance with GAAP. Adjusted revenue is calculated by excluding PCB revenue for the three months ended October 1, 2016 of approximately
$44,503
,000 from our total fiscal year 2016 revenue of approximately
$650,147
,000. We use adjusted revenue as an incentive compensation measure as defined in the plan documents. This measure should not be construed as an alternative to revenue determined in accordance with GAAP.
|
(2)
|
For purposes of our incentive compensation plans, we have calculated adjusted ROIC and adjusted diluted EPS for fiscal year 2016, which are not financial measures of performance presented in accordance with GAAP. Adjusted ROIC is calculated by dividing adjusted net income by average adjusted invested capital. Adjusted diluted EPS is calculated by dividing adjusted net income by adjusted diluted weighted average common shares outstanding. Adjusted net income is calculated by excluding the following from reported net income: PCB net income, acquisition-related expense, net of tax; acquisition integration expenses, net of tax; acquisition inventory step-up, net of tax; restructuring expense, net of tax; acquisition interest expense, net of tax; and after-tax interest expense. Adjusted diluted weighted average common shares outstanding is calculated by excluding the impact of our common stock offering and the issuance of TEUs. Average invested capital is defined as the aggregate of average adjusted interest-bearing debt and average adjusted shareholders’ equity and is calculated as the sum of current and prior year ending amounts divided by two. Because the calculations are not prescribed or authorized by GAAP, the adjusted ROIC percentage and adjusted diluted EPS amount are non-GAAP financial measures. We use adjusted ROIC and adjusted diluted EPS as incentive compensation measures as defined in the plan documents. These measures should not be construed as an alternative to return on equity, diluted EPS or any other measure determined in accordance with GAAP.
|
(in thousands)
|
|
2016
|
||
Net income
|
|
$
|
27,494
|
|
PCB net income, net of tax
|
|
(4,383
|
)
|
|
Acquisition-related expense, net of tax
|
|
7,322
|
|
|
Acquisition integration expense, net of tax
|
|
2,049
|
|
|
Acquisition inventory step-up, net of tax
|
|
5,692
|
|
|
Restructuring expense, net of tax
|
|
1,465
|
|
|
Acquisition interest expense, net of tax
|
|
5,221
|
|
|
Adjusted net income
*
|
|
$
|
44,860
|
|
|
|
|
||
Diluted weighted average common shares outstanding
|
|
16,179
|
|
|
Impact of common stock and TEU issuances
|
|
1,287
|
|
|
Adjusted diluted weighted average common shares outstanding
*
|
|
14,892
|
|
|
|
|
|
||
Adjusted diluted EPS
*
|
|
$
|
3.01
|
|
|
|
|
||
Shareholders' equity
|
|
|
||
Total beginning shareholders’ equity
|
|
$
|
258,142
|
|
|
|
|
||
Total ending shareholders’ equity
|
|
405,260
|
|
|
Issuance of common stock, net
|
|
(74,301
|
)
|
|
Issuance of TEUs, net
|
|
(84,511
|
)
|
|
Purchase of capped call transaction
|
|
7,935
|
|
|
Net income adjustments
|
|
17,366
|
|
|
Adjusted ending shareholders' equity
*
|
|
$
|
271,749
|
|
|
|
|
||
Interest bearing debt
|
|
|
||
Total beginning interest bearing debt
|
|
$
|
21,183
|
|
|
|
|
||
Total ending interest bearing debt
|
|
484,985
|
|
|
Acquisition-related debt
|
|
(484,985
|
)
|
|
Adjusted ending interest bearing debt
*
|
|
$
|
—
|
|
|
|
|
||
Sum of adjusted invested capital
*
|
|
$
|
551,074
|
|
Average adjusted invested capital
*
|
|
$
|
275,537
|
|
|
|
|
||
Adjusted return on invested capital
*
|
|
16.3
|
%
|
*
|
Denotes non-GAAP financial measures.
|
|
|
|
2016
|
|
||||||
(in thousands)
|
|
Pre-Tax
|
Tax
|
Net
|
||||||
Net income
|
|
$
|
33,512
|
|
$
|
6,018
|
|
$
|
27,494
|
|
PCB net income
¶
|
|
(5,700
|
)
|
(1,317
|
)
|
(4,383
|
)
|
|||
Acquisition-related expense
ª
|
|
10,170
|
|
2,848
|
|
7,322
|
|
|||
Acquisition integration expense
ª
|
|
2,846
|
|
797
|
|
2,049
|
|
|||
Acquisition inventory step-up
ª
|
|
7,916
|
|
2,224
|
|
5,692
|
|
|||
Restructuring expense
¬
|
|
2,165
|
|
700
|
|
1,465
|
|
|||
Acquisition interest expense
ª
|
|
7,252
|
|
2,031
|
|
5,221
|
|
|||
Adjusted net income
*
|
|
$
|
58,161
|
|
$
|
13,301
|
|
$
|
44,860
|
|
¶
|
In determining the tax impact of PCB, we applied a worldwide effective income tax rate to PCB pre-tax income.
|
ª
|
In determining the tax impact of acquisition-related, acquisition integration, acquisition inventory step-up expenses, acquisition interest expense and interest expense, we applied a U.S. effective income tax rate before discrete items to these expenses.
|
¬
|
In determining the tax impact of restructuring expenses, we applied the statutory rate in effect for each jurisdiction where restructuring expenses were incurred.
|
*
|
Denotes non-GAAP financial measures.
|
(3)
|
For the calculation of fiscal year 2015 ROIC, see Item 6, "Selected Financial Data," under Part II of this Annual Report on Form 10-K.
|
(4)
|
For purposes of our incentive compensation plans, we use adjusted WCRR for fiscal year 2016, which is not a measure of performance presented in accordance with GAAP. Adjusted WCRR is calculated by dividing the adjusted 12 month average net working capital by adjusted revenue. The adjusted 12 month average net working capital is calculated by excluding PCB accounts receivable, net, unbilled accounts receivable, inventories, net, accounts payable and advance payments from customers and averaging the quarterly adjusted net working capital for fiscal year 2016. Adjusted revenue is calculated by excluding PCB revenue for the three months ended October 1, 2016 of approximately
$44,503
,000 from fiscal year 2016 revenue of approximately
$650,147
,000. Because the ratio is not prescribed or authorized by GAAP, the adjusted WCRR is a non-GAAP financial measure. We use adjusted WCRR as an incentive compensation measure as defined in the plan documents.
|
|
|
Total
|
|
PCB
|
|
Adjusted
|
|||||||||||||||||||
(in thousands)
|
|
January 2,
2016 |
April 2,
2016 |
July 2,
2016 |
October 1,
2016 |
|
October 1,
2016 |
|
October 1,
2016 |
|
2016
Average |
||||||||||||||
Accounts receivable, net
|
|
$
|
106,163
|
|
$
|
96,193
|
|
$
|
83,736
|
|
$
|
133,500
|
|
|
$
|
24,132
|
|
|
$
|
109,368
|
|
|
$
|
98,865
|
|
Unbilled accounts receivable
|
|
66,580
|
|
73,924
|
|
90,785
|
|
76,626
|
|
|
—
|
|
|
76,626
|
|
|
76,979
|
|
|||||||
Inventories, net
|
|
90,604
|
|
95,988
|
|
93,034
|
|
132,566
|
|
|
47,226
|
|
|
85,340
|
|
|
91,242
|
|
|||||||
Accounts payable
|
|
(32,967
|
)
|
(37,311
|
)
|
(37,746
|
)
|
(46,383
|
)
|
|
(6,085
|
)
|
|
(40,298
|
)
|
|
(37,081
|
)
|
|||||||
Advance payments from customers
|
|
(78,957
|
)
|
(98,393
|
)
|
(89,163
|
)
|
(72,728
|
)
|
|
(1,059
|
)
|
|
(71,669
|
)
|
|
(84,546
|
)
|
|||||||
Adjusted net working capital
*
|
|
$
|
151,423
|
|
$
|
130,401
|
|
$
|
140,646
|
|
$
|
223,581
|
|
|
$
|
64,214
|
|
|
$
|
159,367
|
|
|
$
|
145,459
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Adjusted revenue
*
|
|
|
|
|
$
|
650,147
|
|
|
$
|
44,503
|
|
|
$
|
605,644
|
|
|
$
|
605,644
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Adjusted WCRR
*
|
|
|
|
|
|
|
|
|
|
|
24.0
|
%
|
*
|
Denotes non-GAAP financial measures.
|
(5)
|
WCRR is calculated by dividing the 12 month average net working capital by full fiscal year revenue. The 12 month average net working capital is calculated by averaging the quarterly adjusted net working capital for fiscal year 2015. Because the ratio is not prescribed or authorized by GAAP, the WCRR is a non-GAAP financial measure.
|
(in thousands)
|
|
December 27, 2014
|
March 28, 2015
|
June 27, 2015
|
October 3, 2015
|
2015
Average |
||||||||||
Accounts receivable, net
|
|
$
|
109,051
|
|
$
|
111,474
|
|
$
|
93,547
|
|
$
|
89,829
|
|
$
|
100,975
|
|
Unbilled accounts receivable
|
|
77,439
|
|
68,423
|
|
68,778
|
|
77,519
|
|
73,040
|
|
|||||
Inventories, net
|
|
89,643
|
|
88,798
|
|
91,972
|
|
86,303
|
|
89,179
|
|
|||||
Accounts payable
|
|
(29,563
|
)
|
(36,448
|
)
|
(28,182
|
)
|
(32,994
|
)
|
(31,797
|
)
|
|||||
Advance payments from customers
|
|
(61,222
|
)
|
(54,159
|
)
|
(59,638
|
)
|
(65,734
|
)
|
(60,188
|
)
|
|||||
Net working capital
*
|
|
$
|
185,348
|
|
$
|
178,088
|
|
$
|
166,477
|
|
$
|
154,923
|
|
$
|
171,209
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
|
|
|
|
$
|
563,934
|
|
||||||||
|
|
|
|
|
|
|
||||||||||
WCRR
*
|
|
|
|
|
|
30.4
|
%
|
*
|
Denotes non-GAAP financial measures.
|
•
|
Acquisition of PCB.
The following executive compensation actions were reviewed by the Committee in connection with the acquisition of PCB.
|
◦
|
David T. Hore, former President of PCB, was appointed to serve as our President, Sensors in July 2016. While we typically do not enter into employment agreements with our executive officers, Mr. Hore had an existing employment agreement with PCB dated as of April 1, 2016 (the “Hore Employment Agreement”) and, as part of the merger agreement with PCB, we agreed to assume the Hore Employment Agreement. Pursuant to the Hore Employment Agreement, Mr. Hore will receive compensation in the amount of $500,000 per year to be evaluated by us from time to time and annual cash bonus payments are discretionary on our part. The Hore Employment Agreement has a two-year term and provides for potential payments in the event of a termination of Mr. Hore’s employment. Therefore, during the term of the Hore Employment Agreement, Mr. Hore will not participate in our Executive Severance Plan or the Executive Change in Control Severance Plan. In addition, as one of our new executive officers, Mr. Hore received a restricted stock unit award on August 15, 2016 with a fair market value of $270,000 in accordance with our typical policy for newly hired executive officers. We believe that executive hire equity grants are important to align our officers’ interests with our shareholders’ interests.
|
◦
|
We entered into a Transition Bonus Agreement (the “Emholz Transition Agreement”) with John V. Emholz, our former Senior Vice President, effective as of July 6, 2016. Pursuant to the Emholz Transition Agreement, Mr. Emholz remained employed by the Company in his current position, including the corresponding compensation and benefits, for a period of 60 days following the closing of the acquisition on July 6, 2016, at which time Mr. Emholz’s employment with the Company was terminated and he began to receive compensation pursuant to the Company’s Executive Severance Plan further described below.
|
•
|
Compensation Overview for Fiscal Year 2016
. The Committee granted performance restricted stock units (“PRSUs”) using adjusted ROIC as a performance measure. The Committee believes that measuring adjusted ROIC over a three-year period is an appropriate measure for the PRSUs given its emphasis on profitability with a longer-term view. In fiscal year 2016, the Committee continued with its practice of granting an even mix of stock options and PRSUs. The performance measure of adjusted ROIC is expressed as annual targets for the applicable three-year period and the annual performance is averaged over the performance period. The performance range has threshold, target and maximum performance expectations each cycle, with a 75% guaranteed threshold of target and up to a 125% maximum opportunity of target.
|
•
|
Strong Performance-Based Compensation Awards and Payouts.
Our executive compensation is tightly linked with performance.
|
◦
|
As with past years, we adopted an Executive Variable Compensation (“EVC”) Plan through which the named executive officers were eligible to earn cash incentive compensation based upon achievement of specific financial objectives for fiscal year 2016, recommended by the Committee and approved by the Board, that are designed to challenge the named executive officers to high performance.
|
◦
|
The Committee actively considers the impact of unusual or one-time events on our financial performance in setting the performance goals under the EVC Plan.
|
◦
|
As named executive officers assume greater responsibility, a larger portion of their total cash compensation is risk based and dependent on Company and business segment performance.
|
◦
|
The Committee targets annual base salaries around the median base salaries of survey data, with the EVC Plan designed to allow the named executive officer to earn above-target compensation only when the named executive officer delivers and, as a Company, we deliver performance that is also above target.
|
•
|
Appropriate Comparisons.
As part of our salary structure analysis, Willis Towers Watson reviews market data, adjusted for revenue size, to current base salaries. A proxy review based on compensation peer companies is also conducted to compare market data to the compensation peer companies. Recommendations are then provided to the Committee for setting base salary and long-term incentive ranges for our named executive officers.
|
•
|
Stock Ownership Expectations.
Our compensation programs encourage employees to build and maintain an ownership interest in the Company. We have established specific stock ownership guidelines for executive officers, which are reviewed annually by the Committee.
|
•
|
Emphasis on Quality Compensation Practices.
We continue our commitment to compensation practices that we believe contribute to good governance.
|
◦
|
Our EVC Plan and 2011 Stock Incentive Plan each contain a recoupment, or “clawback,” provision. These clawback provisions require executive officers to forfeit and allow us to recoup any payments or benefits received by them under the EVC Plan or the 2011 Stock Incentive Plan under certain circumstances, such as certain restatements of our financial statements, termination of employment for cause and breach of an agreement between us and the executive officer.
|
◦
|
The compensation consultant is retained directly by and reports to the Committee. The compensation consultant does not provide any services to management personally and had no prior relationship with any of our named executive officers.
|
•
|
provide information on executive compensation for each cash component of compensation (base salary and short-term incentive compensation);
|
•
|
provide information regarding competitive values and structures of long-term incentive compensation;
|
•
|
provide information regarding performance measures used in long-term incentive compensation programs; and
|
•
|
review and provide information on the compensation peer group used to confirm survey data related to some of our named executive officer positions.
|
Named Executive Officer
|
Fiscal Year 2016 Annualized Base Salary
|
Fiscal Year 2016 Annualized Base Salary as a Percent of Median of Base Salary Comparable
|
|||
Jeffrey Graves
|
$
|
650,000
|
|
99.2
|
%
|
Jeffrey Oldenkamp
|
$
|
345,000
|
|
95.8
|
%
|
William Bachrach
|
$
|
360,000
|
|
100.0
|
%
|
John Emholz
|
$
|
320,000
|
|
103.2
|
%
|
Catherine Powell
|
$
|
300,000
|
|
96.8
|
%
|
(1)
|
Specific performance goals for the Test and Sensors segments and their corresponding minimum, target and maximum amounts are not disclosed due to the competitive harm of such disclosure. For fiscal year 2016, the Committee followed
|
(2)
|
Represents the hurdle performance required at which 50% payout begins.
|
(3)
|
Adjusted diluted EPS is a non-GAAP financial measure. For more information on how adjusted diluted EPS is calculated, see Part III, Item 11 of this Annual Report on Form 10-K.
|
(4)
|
Adjusted revenue is a non-GAAP financial measure. For more information on how adjusted revenue is calculated, see Part III, Item 11 of this Annual Report on Form 10-K.
|
Performance Goal
|
Percent of Target Payout Achieved
|
|
|
Jeffrey
Graves
|
Jeffrey
Oldenkamp
|
William
Bachrach
(1)
|
Catherine
Powell
|
||||||||
Adjusted diluted EPS
|
80
|
%
|
|
$
|
181,980
|
|
$
|
52,290
|
|
$
|
55,351
|
|
$
|
35,569
|
|
Adjusted revenue
|
100
|
%
|
|
$
|
227,078
|
|
$
|
65,249
|
|
$
|
80,952
|
|
$
|
44,496
|
|
Adjusted WCRR
|
200
|
%
|
|
$
|
388,500
|
|
$
|
111,632
|
|
$
|
118,167
|
|
$
|
76,125
|
|
Total without cap
|
|
|
$
|
797,558
|
|
$
|
229,171
|
|
$
|
254,470
|
|
$
|
156,190
|
|
|
Total with cap
(2)
|
|
|
$
|
647,500
|
|
$
|
186,053
|
|
$
|
196,945
|
|
$
|
126,876
|
|
|
Total as % of Target
|
|
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
(1)
|
Achievement of the performance goals relating to adjusted revenue and adjusted WCRR for corporate performance for fiscal year 2016 does not apply to Mr. Bachrach. Amounts attributable to each of these measures represent amounts attributable to actual achievement in fiscal year 2016 by the Test segment of the performance goal noted.
|
(2)
|
The bonus amount for all named executive officers was capped at target as the EVC Plan restricts over-ranging in the event that the target payment for any goal is not achieved and the adjusted diluted EPS goal was not achieved during fiscal year 2016.
|
Named Executive Officer
|
Number of Shares Underlying Stock Options
|
Number of Performance Restricted Stock Units
|
Aggregate Value
of Awards
|
|||||
Jeffrey Graves
|
61,455
|
|
10,123
|
|
|
$
|
1,250,000
|
|
Jeffrey Oldenkamp
|
17,207
|
|
2,834
|
|
|
$
|
350,000
|
|
William Bachrach
|
14,749
|
|
2,430
|
|
|
$
|
300,000
|
|
John Emholz
|
9,833
|
|
1,620
|
|
|
$
|
200,000
|
|
Catherine Powell
|
8,850
|
|
1,458
|
|
|
$
|
180,000
|
|
Performance Goal
|
Threshold
|
Target
|
Maximum
|
Result
|
Percent of Target Performance Achieved
|
Percent of Target Payout Achieved
|
Adjusted ROIC
|
10.6%
|
17.6%
|
22.6%
|
15.9%
|
90.3%
|
93.9%
|
|
Target PRSUs
|
|
Actual PSRUs
|
||
Named Executive Officer
(1)
|
Shares
|
Value
(2)
|
|
Shares
|
Value
(3)
|
Jeffrey Graves
|
2,670
|
$178,837
|
|
2,508
|
$134,805
|
Jeffrey Oldenkamp
|
672
|
$45,011
|
|
631
|
$33,916
|
William Bachrach
|
684
|
$45,814
|
|
642
|
$34,508
|
John Emholz
|
—
|
—
|
|
—
|
—
|
Catherine Powell
|
—
|
—
|
|
—
|
—
|
(1)
|
Vesting and payout date was December 3, 2016.
|
(2)
|
Target PSRU value represents number of shares granted multiplied by the share price of $66.98 on the date of the grant (December 3, 2014).
|
(3)
|
Actual PSRU value represents the number of actual shares delivered based on the payout achieved multiplied by the share price of $53.75 on the date of vest (December 3, 2016).
|
Name and Principal Position
|
Fiscal Year
|
Salary
($)
|
Bonus
(1)
($)
|
Stock
Awards
(2)
($)
|
Option
Awards
(2)
($)
|
Non-
Equity
Incentive
Plan
Compen-
sation
(3)
($)
|
All Other
Compensation
(4)
($)
|
Total
($)
|
Jeffrey Graves
President and Chief Executive Officer
|
2016
2015
2014
|
647,500
637,000
631,887
|
-
- - |
624,994
536,510
678,984
|
722,274
398,355
953,320
|
647,500
133,163
185,396
|
20,667
16,326
17,161
|
2,662,935
1,721,354
2,466,748
|
Jeffrey Oldenkamp
Senior Vice President, Chief Financial Officer
|
2016
2015
|
338,278
291,253
|
-
- |
174,971
135,032
|
202,229
100,237
|
186,053
37,516
|
20,972
14,907
|
922,503
578,945
|
William Bachrach
Former President, Test
|
2016
2015
2014
|
358,082
329,663
306,580
|
-
- - |
150,028
167,520
122,531
|
173,341
102,093
171,997
|
196,945
49,647
117,972
|
97,801
78,614
16,176
|
976,197
727,537
735,256
|
John Emholz
Former Senior Vice President, Sensors
|
2016
2015
|
307,007
220,579
|
150,000
50,000
|
150,028
107,495 |
173,341
65,132 |
-
21,667 |
66,534
77,034
|
846,910
541,907
|
David Hore
President, Sensors
|
2016
|
125,000
|
-
|
269,994
|
-
|
-
|
14,955
|
409,949
|
Catherine Powell
Senior Vice President, General Counsel and Corporate Secretary
|
2016
|
289,245
|
-
|
165,040
|
104,013
|
126,876
|
19,997
|
705,171
|
(1)
|
Amount for Mr. Emholz represents an inducement cash bonus in fiscal year 2015 of $50,000 when he accepted his job and a stay bonus in fiscal year 2016 of $150,000 to continue his employment after the completion of the acquisition of PCB through the termination date of his employment on September 6, 2016.
|
(2)
|
Amounts represent the aggregate grant date fair value of restricted stock units and stock options that were granted in each fiscal year as computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 utilizing the assumptions discussed in Note 6 to our Notes to Consolidated Financial Statements for the fiscal year ended October 1, 2016 included in Item 8 of Part II of this Annual Report on Form 10-K.
|
(3)
|
Represents amounts awarded for fiscal year 2016 performance under the EVC Plan and paid out in the first quarter of fiscal year 2017.
|
(4)
|
The table below describes the amounts in the “All Other Compensation” column above.
|
Name
|
Retirement Plan
|
Car
($)
|
|
Life Insurance Premiums, Executive Physical and Health Saving Account Contributions
($)
|
Relocation/ Living Expenses
(2)
($)
|
|
|
Total
($)
|
|
Match
($)
|
Fiscal Year Contribution
(1)
($)
|
Club Membership
($)
|
Tax Payment
(3)
($)
|
Severance
Related
Payments
(4)
($)
|
|||||
Jeffrey Graves
|
11,925
|
—
|
8,040
|
—
|
702
|
—
|
—
|
—
|
20,667
|
Jeffrey Oldenkamp
|
11,925
|
—
|
8,040
|
—
|
1,007
|
—
|
—
|
—
|
20,972
|
William Bachrach
|
11,925
|
—
|
8,040
|
—
|
1,002
|
39,834
|
37,000
|
—
|
97,801
|
John Emholz
|
11,925
|
—
|
8,040
|
—
|
1,419
|
18,022
|
—
|
27,128
|
66,534
|
David Hore
|
—
|
5,300
|
5,975
|
1,337
|
2,343
|
—
|
—
|
—
|
14,955
|
Catherine Powell
|
11,925
|
—
|
7,370
|
—
|
702
|
—
|
—
|
—
|
19,997
|
(1)
|
For Mr. Graves, Mr. Oldenkamp, Mr. Bachrach, Mr. Emholz and Ms. Powell, no discretionary "Fiscal Year Contribution" was made in fiscal year 2016 given overall Company performance, but the column is included for comparative purposes to prior fiscal years. Mr. Hore received an Employer Nonelective Contribution according to the terms of the PCB Group, Inc. Profit Sharing 401(k) Retirement Plan.
|
(2)
|
The amounts reported in the table above under “Relocation and Living Expenses” were provided to Mr. Bachrach to cover housing, meals and transportation expenses because his home is not in Minnesota where his office is located. Amount for Mr. Emholz represents a relocation assistance reimbursement.
|
(3)
|
The amount reported represents a supplemental bonus provided to Mr. Bachrach to cover tax expense related to fiscal years 2015 and 2016 for relocation and living expenses.
|
(4)
|
Amount for Mr. Emholz represents an installment of his severance payment in the amount of $12,308, and the cash out of unused personal time off in the amount of $14,820 made in fiscal year 2016.
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
(2)
|
Estimated Future Payouts Under Equity Incentive Plan Awards
|
All Other Stock Awards: Number of Shares of Stock or Units
(#)
|
All Other Options Awards: Number of Securities Underlying Options
(#)
|
Exercise or Base Price of Options Awards
(5)
($/Sh)
|
Grant Date Fair Value of Stock and Option Awards
(6)
($)
|
|||||||
Name
|
Grant Date
|
Approval Date
|
Award Type
(1)
|
Thresh-
old
(3)
($)
|
Target
($)
|
Maxi-
mum
($)
|
Thresh-
old
(4)
(#)
|
Target
(#)
|
Maxi-
mum
(#)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey Graves
|
|
|
Cash
|
95,550
|
637,000
|
1,274,000
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
12/9/2015
|
11/17/2015
|
Options
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
61,455
|
61.74
|
722,274
|
|
12/9/2015
|
11/17/2015
|
PRSUs
|
—
|
—
|
—
|
7,592
|
10,123
|
12,654
|
—
|
—
|
—
|
624,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey Oldenkamp
|
|
|
Cash
|
25,575
|
170,500
|
341,000
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
12/9/2015
|
11/16/2015
|
Options
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
17,207
|
61.74
|
202,229
|
|
12/9/2015
|
11/16/2015
|
PRSUs
|
—
|
—
|
—
|
2,126
|
2,834
|
3,543
|
-
|
—
|
—
|
174,971
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William Bachrach
|
|
|
Cash
|
28,875
|
192,500
|
385,000
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
12/9/2015
|
11/16/2015
|
Options
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
14,749
|
61.74
|
173,341
|
|
12/9/2015
|
11/16/2015
|
PRSUs
|
—
|
—
|
—
|
1,823
|
2,430
|
3,038
|
—
|
—
|
—
|
150,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Emholz
|
|
|
Cash
|
20,925
|
139,500
|
279,000
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
12/9/2015
|
11/16/2015
|
Options
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
9,833
|
61.74
|
115,563
|
|
12/9/2015
|
11/16/2015
|
PRSUs
|
—
|
—
|
—
|
1,215
|
1,620
|
2,025
|
—
|
—
|
—
|
100,019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David Hore
|
8/15/2016
|
4/4/2016
|
RSUs
|
-
|
-
|
-
|
—
|
—
|
—
|
5,583
|
—
|
—
|
269,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Catherine Powell
|
|
|
Cash
|
17,314
|
115,426
|
230,852
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
12/9/2015
|
11/16/2015
|
Options
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
8,850
|
61.74
|
104,013
|
|
12/9/2015
|
11/16/2015
|
PRSUs
|
—
|
—
|
—
|
1,094
|
1,458
|
1,823
|
—
|
—
|
—
|
90,017
|
|
11/15/2015
|
10/1/2015
|
RSUs
|
—
|
—
|
—
|
—
|
—
|
—
|
1,205
|
—
|
—
|
75,023
|
(1)
|
Except for Mr. Hore, the cash awards were made pursuant to the EVC Plan. Pursuant to the terms of the Hore Employment Agreement, Mr. Hore’s cash award was discretionary. The grants of stock options and PRSUs were made pursuant to the 2011 Stock Incentive Plan.
|
(2)
|
The EVC Plan performance goals for fiscal year 2016 are described under “Compensation Discussion and Analysis - Design of EVC Plan and Review of Fiscal year 2016 Performance.”
|
(3)
|
Threshold amounts can be calculated for each individual performance measure, and in each case are equal to 50% of the target amount payable with respect to that measure. The amounts reported as threshold amounts in the table represent the payout that would have been made if threshold performance were achieved for the performance measure assigned the lowest weight for the respective named executive officer, assuming that threshold performance was not achieved for any other performance measure.
|
(4)
|
Threshold amounts represent guaranteed minimum number of PRSUs provided for equity grants under the 2011 Stock Incentive Plan.
|
(5)
|
Equal to the closing market value of shares on NASDAQ on the grant date.
|
(6)
|
The grant date fair value of options is calculated using a multiple option form of the Black-Scholes option valuation model with assumptions for interest rate, expected life, share price volatility and dividend yield. The grant date fair value of RSUs is calculated with reference to the fair market value of the underlying shares (the closing market value of shares on NASDAQ on the grant date). See Note 6 to our Notes to Consolidated Financial Statements for the fiscal year ended October 1, 2016 included in Item 8 of Part II of this Annual Report on Form 10-K.
|
|
|
Option Awards
|
|
Stock Awards
|
|||||||
|
Number of Securities Underlying Unexercised Options
(1)
|
|
|
|
Number of Shares or Units of Stock That Have Not Vested
(#)
|
Market Value of Shares or Units of Stock That Have Not Vested
($)
(2)
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)
(3)
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
(2)
|
||
Name
|
Exercisable
(#)
|
Un-Exercisable
(#)
|
Option Exercise Price
($)
|
Option Expiration Date
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||
Jeffrey Graves
|
|
28,790
|
—
|
39.38
|
7/2/2017
|
|
|
|
|
|
|
|
|
45,494
|
22,747
|
64.90
|
12/4/2020
|
|
|
|
|
|
|
|
|
10,952
|
21,902
|
66.98
|
12/3/2021
|
|
|
|
|
|
|
|
|
—
|
61,455
|
61.74
|
12/9/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,487
|
160,507
|
|
15,463
|
711,762
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey Oldenkamp
|
|
2,814
|
1,407
|
72.64
|
2/15/2021
|
|
|
|
|
|
|
|
|
2,756
|
5,511
|
66.98
|
12/3/2021
|
|
|
|
|
|
|
|
|
—
|
17,207
|
61.74
|
12/9/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
192
|
8,838
|
|
4,178
|
192,313
|
|
|
|
|
|
|
|
|
|
|
|
|
William Bachrach
|
|
6,750
|
—
|
54.77
|
4/15/2018
|
|
|
|
|
|
|
|
|
8,208
|
4,104
|
64.90
|
12/4/2020
|
|
|
|
|
|
|
|
|
2,807
|
5,613
|
66.98
|
12/3/2021
|
|
|
|
|
|
|
|
|
—
|
14,749
|
61.74
|
12/9/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
929
|
42,762
|
|
3,798
|
174,822
|
|
|
|
|
|
|
|
|
|
|
|
|
John Emholz
|
|
1,684
|
—
|
72.29
|
2/15/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
—
|
|
—
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
David Hore
|
|
—
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,583
|
256,985
|
|
—
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Catherine Powell
|
|
833
|
—
|
51.88
|
3/15/2017
|
|
|
|
|
|
|
|
|
1,500
|
—
|
39.38
|
7/2/2017
|
|
|
|
|
|
|
|
|
1,103
|
1,101
|
64.90
|
12/4/2020
|
|
|
|
|
|
|
|
|
511
|
1,020
|
66.98
|
12/3/2021
|
|
|
|
|
|
|
|
|
—
|
8,850
|
61.74
|
12/9/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,622
|
74,661
|
|
1,458
|
67,112
|
(1)
|
Stock options granted are exercisable in three equal installments each year beginning on the first anniversary of the grant date. Stock options with expiration dates of 2016 to 2018 have a five-year term and those with expiration dates of 2020 to 2021 have a seven-year term.
|
(2)
|
The market value of unvested restricted stock units equals the closing price of our common stock on the NASDAQ Stock Market at the end of fiscal year 2016 ($46.03) multiplied by the number of shares or units. The restricted stock units vest in three equal annual installments beginning on the first anniversary of the grant date.
|
(3)
|
The number of performance restricted stock units reported in this column is based on achieving target payouts for future equity performance.
|
|
Option Awards
|
|
Stock Awards
|
||
Name
|
Number of
Shares Acquired
on Exercise
(#)
|
Value Realized
on Exercise
($)
|
|
Number of
Shares Acquired
on Vesting
(1)
(#)
|
Value Realized
on Vesting
(2)
($)
|
Jeffrey Graves
|
-
|
-
|
|
4,011
|
240,112
|
Jeffrey Oldenkamp
|
-
|
-
|
|
543
|
31,303
|
William Bachrach
|
-
|
-
|
|
1,469
|
85,397
|
John Emholz
|
-
|
-
|
|
305
|
15,982
|
David Hore
|
-
|
-
|
|
-
|
-
|
Catherine Powell
|
-
|
-
|
|
195
|
11,673
|
(1)
|
The number of shares acquired equals the difference between the number of restricted stock units vested and the number of shares of stock withheld by the Company to cover tax obligations. The number of restricted stock units that vested before the withholding was for Dr. Graves 6,042, Mr. Oldenkamp 836, Mr. Bachrach 2,185, Mr. Emholz 497 and Ms. Powell 294. Mr. Hore did not have any restricted stock units vest during fiscal year 2016.
|
(2)
|
The value realized on the vesting of the restricted stock units is the fair market value of our common stock at the time of vesting.
|
Name
|
Executive
Contributions
in Last FY
($)
(1)
|
Registrant
Contributions
in Last FY
($)
|
Aggregate
Earnings
in Last FY
($)
(2)
|
Aggregate
Withdrawals/
Distributions
($)
|
Aggregate
Balance
at Last FYE
($)
|
William Bachrach
|
25,351
|
—
|
1,528
|
—
|
26,879
|
(1)
|
Contributions were included in the amount reported in the “Salary” column of the Summary Compensation Table.
|
(2)
|
Earnings are determined on a calendar-year basis; earnings were 2.24% for calendar 2016. This amount was not reported in the Summary Compensation Table because it does not represent above-market or preferential earnings.
|
|
Termination of Employment in Conjunction
with a Change in Control
|
Change in Control (without Termination of Employ-
ment)
|
Termination
(without Change in Control)
|
|||||
Name
|
Cash Payment
($)
(1)
|
Accelerated Vesting
($)
(2)
|
Benefits
($)
(3)
|
Total Value
($)
|
Accelerated Vesting
($)
(2)
|
Cash Payment
($)
(4)
|
Benefits
($)
(5)
|
Total Value
($)
|
Jeffrey Graves
|
1,960,119
|
872,269
|
25,965
|
2,858,353
|
872,269
|
650,000
|
16,596
|
666,596
|
Jeffrey Oldenkamp
|
929,649
|
201,151
|
16,397
|
1,147,197
|
201,151
|
345,000
|
10,217
|
355,217
|
William Bachrach
|
1,132,791
|
217,584
|
21,337
|
1,371,712
|
217,584
|
360,000
|
13,510
|
373,510
|
David Hore
|
1,014,622
|
256,985
|
26,440
|
1,298,047
|
256,985
|
500,000
|
17,187
|
517,187
|
Catherine Powell
|
868,492
|
141,772
|
25,965
|
1,036,229
|
141,772
|
300,000
|
16,596
|
316,596
|
(1)
|
Pursuant to the Change in Control Severance Plan, represents two times each named executive officer’s respective annual compensation (other than Mr. Hore), consisting of annual base salary; the average of the cash incentive payment made pursuant to the EVC Plan for each of the prior three fiscal years, excluding any payments made with respect to a partial fiscal year; and other non-plan based payments during the previous 12-month period prior to the date of termination. For Mr. Hore, the Hore Employment Agreement provides for severance payments equal to the sum of the following: Mr. Hore’s annual base salary for the 24-month period following a change in control; any accrued but unpaid salary for the period through and including the date of termination; the amount of any bonus compensation payable to Mr. Hore accrued as of the date of termination, provided that Mr. Hore has achieved any required performance goals in connection therewith; all accrued and unpaid vacation pay; and any reimbursable expenses (as provided in the Hore Employment Agreement) for the period through and including the date of termination.
|
(2)
|
Represents the aggregate value of stock options and restricted stock units held by each named executive officer that were not vested as of October 1, 2016 but whose vesting and exercisability would have been accelerated under the terms of the 2011 Stock Incentive Plan (assuming that the awards were not assumed or substituted by an acquiring entity). The value of accelerating each unvested stock option is equal to the difference between the Stock Price and the exercise price of such option. The value of accelerating each unvested restricted stock unit is equal in each case to the Stock Price.
|
(3)
|
Pursuant to the Change in Control Severance Plan, represents payments made to each named executive officer (other than Mr. Hore) for life, disability, and accident and health insurance benefits for 18 months following termination. For Mr. Hore, the Hore Employment Agreement provides for the payment of such benefits, if any, to which Mr. Hore is entitled under any employee benefit plan of the Company for the period through and including the date of termination.
|
(4)
|
Pursuant to the Severance Plan, represents each named executive officer’s annual base salary.
|
(5)
|
Pursuant to the Severance Plan, represents payments made for each named executive officer’s life, accident and health insurance benefits for 12 months following termination (other than Mr. Hore).
|
Role
|
Fiscal Year 2016
Annual Cash Retainer
|
||
Chairman of the Board
|
$
|
110,000
|
|
All other non-employee directors
|
$
|
45,000
|
|
Audit Committee
|
|
||
Chair
|
$
|
19,000
|
|
All other committee members
|
$
|
9,000
|
|
Compensation and Leadership Development Committee
|
|
||
Chair
|
$
|
12,500
|
|
All other committee members
|
$
|
5,000
|
|
Governance and Nominating Committee
|
|
||
Chair
|
$
|
11,000
|
|
All other committee members
|
$
|
5,000
|
|
Name
|
Fiscal Year 2016
Award Amount
|
Calculation
|
David Anderson
(Chairman of the Board)
|
$134,000
|
FMV ÷ Grant Date Stock Price rounded down to the next whole number
|
David Johnson
|
$95,000
|
|
Randy Martinez
|
||
Barb Samardzich
|
||
Michael Schrock
|
||
Gail Steinel
|
||
Kenneth Yu
|
Name
|
Fees Earned or Paid in Cash
($)
(1)
|
Stock Awards
($)
(2)(3)
|
All Other Compensation
($)
(4)
|
Total
($)
|
David Anderson
|
119,000
|
134,006
|
4,634
|
257,640
|
David Johnson
|
69,833
|
95,004
|
4,874
|
169,711
|
Emily Liggett
(5)
|
12,500
|
—
|
403
|
12,903
|
Randy Martinez
|
59,417
|
95,004
|
2,078
|
156,499
|
Barb Samardzich
|
50,000
|
95,004
|
2,078
|
147,082
|
Michael Schrock
|
63,125
|
95,004
|
2,078
|
160,207
|
Gail Steinel
|
65,917
|
95,004
|
4,080
|
165,001
|
Kenneth Yu
|
50,000
|
95,004
|
2,078
|
147,082
|
(1)
|
Includes annual retainer and committee meeting fees paid in cash.
|
(2)
|
Amounts represent aggregate grant date fair value during fiscal year 2016 under FASB ASC Topic 718, based on the valuation and utilizing the assumptions discussed in Note 6 to our Notes to Consolidated Financial Statements for the fiscal year ended October 1, 2016 included in Item 8 of Part II of this Annual Report on Form 10-K. On the date of our annual meeting of shareholders held in February 2016, Mr. Anderson was awarded 2,625 restricted stock units and each of Mr. Johnson, Mr. Martinez, Ms. Samardzich, Mr. Schrock, Ms. Steinel and Mr. Yu were awarded 1,861 restricted stock units with a grant date fair value of $51.05 per share.
|
(3)
|
As of October 1, 2016, the directors held the following number of restricted stock units: Mr. Anderson - 2,625; Mr. Johnson - 1,861; Mr. Martinez - 1,861; Ms. Samardzich - 1,861; Mr. Schrock - 1,861; Ms. Steinel - 1,861; and Mr. Yu - 1,861.
|
(4)
|
Reflects cash dividends paid on unvested restricted stock units and awards in fiscal year 2016.
|
(5)
|
Ms. Liggett served during a portion of fiscal year 2016 and did not stand for re-election at last year’s annual meeting of shareholders.
|
ITEM
12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
(shares in thousands)
|
|
Securities Authorized for Issuance Under Equity Compensation Plans
|
||||||||
Plan category
|
|
Number of shares of
Common Stock to be
issued upon exercise of
outstanding options,
warrants and rights
(1)
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
(2)
|
|
Number of shares of
Common Stock remaining
available for future
issuance under equity
compensation plans
(3)
|
||||
Equity compensation plans approved by shareholders
|
|
785
|
|
|
$
|
60.35
|
|
|
2,073
|
|
Equity compensation plans not approved by shareholders:
|
|
—
|
|
|
|
—
|
|
|
—
|
|
Total
|
|
785
|
|
|
$
|
60.35
|
|
|
2,073
|
|
(1)
|
Reflects securities to be issued upon the exercise of vested stock options and the vesting of restricted stock units under our 2011 Stock Incentive Plan.
|
(2)
|
The weighted-average exercise price set forth in this column is calculated excluding outstanding restricted stock and restricted stock unit awards, since recipients are not required to pay an exercise price to receive the shares subject to these awards.
|
(3)
|
Includes securities available for future issuance under the 2011 Stock Incentive Plan other than those listed in the first column and approximately 650 shares available for issuance under the 2012 Employee Stock Purchase Plan.
|
Name and Address of Beneficial Owner
|
Number of Shares
|
Note
|
Percent
|
|
BlackRock, Inc.
55 East 52
nd
St.
New York, NY 10055
|
2,045,739
|
|
(1)
|
12.2%
|
Ariel Investments, LLC
200 E. Randolph Drive, Suite 2900
Chicago, IL 60601
|
1,791,564
|
|
(2)
|
10.7%
|
The Vanguard Group, Inc.
100 Vanguard Blvd.
Malvern, PA 19355
|
1,442,477
|
|
(3)
|
8.6%
|
Fuller & Thaler Asset Management, Inc.
411 Borel Avenue, Suite 300
San Mateo, CA 94402
|
1,318,690
|
|
(4)
|
7.9%
|
Barrow, Hanley, Mewhinney & Strauss, LLC
2200 Ross Avenue, 31
st
Floor
Dallas, TX 75201
|
1,242,619
|
|
(5)
|
7.4%
|
Clearbridge Investments, LLC
620 8
th
Avenue
New York, NY 10018
|
1,087,385
|
|
(6)
|
6.5%
|
(1)
|
According to the Schedule 13G/A filed on January 12, 2017 with the SEC. Includes 2,010,715 shares over which BlackRock, Inc. has sole voting power and 2,045,739 shares over which BlackRock, Inc. has sole dispositive power.
|
(2)
|
According to the Schedule 13G/A filed on February 14, 2017 with the SEC. Includes 1,624,231 shares over which Ariel Investments, LLC has sole voting power and 1,791,564 shares over which Ariel Investments, LLC has sole dispositive power.
|
(3)
|
According to the Schedule 13G/A filed on February 10, 2017 with the SEC. Includes 31,711 shares over which The Vanguard Group, Inc. has sole voting power, 2,526 shares over which The Vanguard Group, Inc. has shared voting power, 1,409,014 shares over which The Vanguard Group, Inc. has sole dispositive power and 33,463 shares over which The Vanguard Group, Inc. has shared dispositive power.
|
(4)
|
According to the Schedule 13G/A filed on February 23, 2017 with the SEC. Includes 1,293,070 shares over which Fuller & Thaler Asset Management, Inc. has sole voting power and 1,318,690 shares over which Fuller & Thaler Asset Management, Inc. has sole dispositive power.
|
(5)
|
According to the Schedule 13G filed on February 10, 2017 with the SEC. Includes 720,119 shares over which Barrow, Hanley, Mewhinney & Strauss, LLC has sole voting power, 522,500 shares over which Barrow, Hanley, Mewhinney & Strauss, LLC has shared voting power, and 1,242,619 shares over which Barrow, Hanley, Mewhinney & Strauss, LLC has sole dispositive power.
|
(6)
|
According to the Schedule 13G filed on February 14, 2017 with the SEC. Includes 880,617 shares over which Clearbridge Investments, LLC has sole voting power and 1,087,385 shares over which Clearbridge Investments, LLC has sole dispositive power.
|
•
|
Each director, director-nominee and “named executive officer”; and
|
•
|
all directors and executive officers of the Company as a group.
|
Name
|
Number of Shares of Common Stock
|
Options
Exercisable
within 60 days of April 6, 2017
|
RSUs vesting within 60 days of April 6, 2017
|
Total
|
Percent of Class
|
|||||
David J. Anderson
|
15,242
|
|
—
|
|
2,625
(1)
|
|
17,867
|
|
*
|
|
David D. Johnson
|
13,484
|
|
—
|
|
1,861
(1)
|
|
15,345
|
|
*
|
|
Randy J. Martinez
|
2,628
|
|
—
|
|
1,861
(1)
|
|
4,489
|
|
*
|
|
Barb J. Samardzich
|
27,444
|
|
—
|
|
1,861
(1)
|
|
29,305
|
|
*
|
|
Michael V. Schrock
|
2,628
|
|
—
|
|
1,861
(1)
|
|
4,489
|
|
*
|
|
Gail P. Steinel
|
10,732
|
|
—
|
|
1,861
(1)
|
|
12,593
|
|
*
|
|
Maximiliane C. Straub
|
—
|
|
—
|
|
—
|
|
—
|
|
*
|
|
Chun Hung (Kenneth) Yu
|
9,484
|
|
—
|
|
1,861
(1)
|
|
11,345
|
|
*
|
|
Jeffrey A. Graves
|
23,150
|
|
139,419
|
|
—
|
|
162,569
|
|
*
|
|
Jeffrey P. Oldenkamp
(2)
|
1,195
|
|
15,469
|
|
—
|
|
16,664
|
|
*
|
|
William E. Bachrach
(3)
|
4,458
|
|
22,843
|
|
—
|
|
27,301
|
|
*
|
|
David T. Hore
|
—
|
|
—
|
|
—
|
|
—
|
|
*
|
|
William C. Becker
|
—
|
|
—
|
|
—
|
|
—
|
|
*
|
|
Steven B. Harrison
|
—
|
|
—
|
|
—
|
|
—
|
|
*
|
|
Catherine S. Powell
(2)
|
888
|
|
7,675
|
|
—
|
|
8,563
|
|
*
|
|
John V. Emholz
(4)
|
305
|
|
—
|
|
—
|
|
305
|
|
*
|
|
All Directors and Executive Officers as a group (14 persons)
|
111,638
|
|
185,406
|
|
13,791
|
|
310,835
|
|
1.9
|
%
|
(1)
|
The RSUs vest on the date of the 2017 Annual Meeting of Shareholders.
|
(2)
|
On the fifth business day after the filing of this Annual Report on Form 10-K, the Company will issue RSUs to certain officers of the Company who are employed by the Company at the time of issuance, 50% of which will vest on the date of grant and the remainder will vest on the first anniversary of the date of grant. The number of RSUs granted will be determined by dividing the Fair Market Value on the date of grant by the Grant Date Stock Price. The Fair Market Value of the grants are as follows: for Mr. Oldenkamp, the Fair Market Value is $90,000; and for Ms. Powell, the Fair Market Value is $45,000.
|
(3)
|
Dr. Bachrach retired from the Company on January 13, 2017.
|
(4)
|
Effective as of September 6, 2016, Mr. Emholz is no longer an officer of the Company. As a result, the number of shares beneficially owned by Mr. Emholz is current as of his Form 4 filing on February 17, 2016.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
|
Fiscal Year
|
||||||
(in thousands)
|
2016
|
|
2015
|
||||
Audit Fees
(1)
|
$
|
4,253
|
|
|
$
|
1,779
|
|
Audit-Related Fees
(2)
|
1,830
|
|
|
16
|
|
||
Tax Fees
(3)
|
177
|
|
|
97
|
|
||
All Other Fees
(4)
|
—
|
|
|
—
|
|
||
Total fees
|
$
|
6,260
|
|
|
$
|
1,892
|
|
(1)
|
Includes annual audit of consolidated financial statements, certain statutory audits, Sarbanes-Oxley Section 404 attestation services, comfort letter fees in connection with the June 2016 public offering and other filings with the SEC.
|
(2)
|
Audit-related fees consist of fees for audits of our employee benefit plans and fees for due diligence and a re-audit related to the acquisition of PCB.
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(a)
|
The following documents are filed as part of this report:
|
(1)
|
Consolidated Financial Statements
|
(2)
|
Financial Statement Schedules
|
(3)
|
Exhibits
|
Exhibit
|
|
|
|
Number
|
|
Description
|
|
|
|
|
|
2.1
|
|
|
Agreement and Plan of Merger, dated April 5, 2016, by and among the Company, Nickel Merger Sub Inc., PCB Group, Inc., and David T. Hore, John A. Lally and David M. Lally as the Shareholder Representative Group thereto (
excluding schedules and exhibits, which the registrant agrees to furnish supplementally to the Securities and Exchange Commission upon request
), incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed April 6, 2016.
|
|
|
|
|
3.1
|
|
|
Restated and Amended Articles of Incorporation, incorporated by reference to Exhibit 3.a of the Company’s Form 10-K for the fiscal year ended September 29, 2012.
|
|
|
|
|
3.2
|
|
|
Amended and Restated Bylaws, incorporated by reference to Exhibit 3.b of the Company’s Current Report on Form 8-K filed November 28, 2011.
|
|
|
|
|
4.1
|
|
|
Indenture, dated as of June 15, 2016, by and between the Company and U.S. Bank National Association, as trustee, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed June 15, 2016.
|
|
|
|
|
4.2
|
|
|
First Supplemental Indenture, dated as of June 15, 2016, by and between the Company and U.S. Bank National Association, as trustee, incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed June 15, 2016.
|
|
|
|
|
4.3
|
|
|
Purchase Contract Agreement, dated as of June 15, 2016, by and among the Company, U.S. Bank National Association, as purchase contract agent and as attorney-in-fact for the holders of the purchase contracts from time to time, and U.S. Bank National Association, as trustee under the Indenture, incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed June 15, 2016.
|
|
|
|
|
4.4
|
|
|
Form of Tangible Equity Unit (included in Exhibit 4.3 above).
|
|
|
|
|
4.5
|
|
|
Form of Purchase Contract (included in Exhibit 4.3 above).
|
|
|
|
|
4.6
|
|
|
Form of Amortizing Note (included in Exhibit 4.2 above).
|
|
|
|
|
4.7
|
|
|
Form of Common Stock Certificate, incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3 filed June 7, 2016.
|
|
|
|
|
4.8
|
|
|
Form of Senior Indenture, incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-3 filed June 7, 2016.
|
|
|
|
|
4.9
|
|
|
Form of Subordinated Indenture, incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-3 filed June 7, 2016.
|
|
|
|
|
10.1
|
|
|
Executive Variable Compensation Plan, incorporated by reference to Appendix A of the Company’s Proxy Statement filed December 30, 2014.*
|
|
|
|
|
10.2
|
|
|
Amended and Restated 2012 Employee Stock Purchase Plan (filed herewith).*
|
|
|
|
|
10.3
|
|
|
Restated Executive Deferred Compensation Plan (2005), incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed October 28, 2008.*
|
|
|
|
|
10.4
|
|
|
MTS Systems Corporation 2011 Stock Incentive Plan, conformed copy including all amendments through February 9, 2016, incorporated by reference to Annex B of the Company’s Definitive Proxy Statement on Schedule 14A filed December 30, 2015.*
|
|
|
|
|
10.5
|
|
|
Form of Notice of Grant and Terms and Conditions of Employee Options under 2011 Stock Incentive Plan, incorporated by reference to Exhibit 99.1 of the Company’s Registration Statement on Form S-8 filed February 9, 2011.*
|
|
|
|
|
10.6
|
|
|
Form of Notice of Grant and Terms and Conditions of Employee Restricted Stock Units under 2011 Stock Incentive Plan, incorporated by reference to Exhibit 99.2 of the Company’s Registration Statement on Form S-8 filed February 9, 2011.*
|
|
|
|
|
10.7
|
|
|
Form of Notice of Grant and Terms and Conditions of Employee Restricted Stock under 2011 Stock Incentive Plan, incorporated by reference to Exhibit 99.3 of the Company’s Registration Statement on Form S-8 filed February 9, 2011.*
|
|
|
|
|
10.8
|
|
|
Form of Notice of Grant and Terms and Conditions of Restricted Stock for Directors under 2011 Stock Incentive Plan, incorporated by reference to Exhibit 99.4 of the Company’s Registration Statement on Form S-8 filed February 9, 2011.*
|
|
|
|
|
10.9
|
|
|
Form of Notice of Grant of Restricted Stock and Restricted Stock Agreement – Director under the 2011 Stock Incentive Plan, incorporated by reference to Exhibit 10.1 of the Company’s Form 10-Q for the fiscal quarter ended December 28, 2013.*
|
|
|
|
|
10.10
|
|
|
Form of Notice of Grant of Restricted Stock Units and Restricted Stock Agreement – Non-Employee Director under the 2011 Stock Incentive Plan, incorporated by reference to Exhibit 10.2 of the Company’s Form 10-Q for the fiscal quarter ended December 28, 2013.*
|
|
|
|
|
10.11
|
|
|
Uniform Terms and Conditions Applicable to Non-Employee Director Restricted Stock Unit Grants under the 2011 Stock Incentive Plan, incorporated by reference to Exhibit 10.3 of the Company’s Form 10-Q for the fiscal quarter ended December 28, 2013.*
|
|
|
|
|
10.12
|
|
|
Form of Notice of Grant of Restricted Stock Units and Restricted Stock Unit Agreement – Employee under the 2011 Stock Incentive Plan, incorporated by reference to Exhibit 10.4 of the Company’s Form 10-Q for the fiscal quarter ended December 28, 2013.*
|
|
|
|
|
10.13
|
|
|
Uniform Terms and Conditions Applicable to Employee Restricted Stock Unit Grants under the 2011 Stock Incentive Plan, incorporated by reference to Exhibit 10.5 of the Company’s Form 10-Q for the fiscal quarter ended December 28, 2013.*
|
|
|
|
|
10.14
|
|
|
Form of Notice of Grant of Non-Qualified Stock Options and Option Agreement – Employee under the 2011 Stock Incentive Plan, incorporated by reference to Exhibit 10.6 of the Company’s Form 10-Q for the fiscal quarter ended December 28, 2013.*
|
|
|
|
|
10.15
|
|
|
Uniform Terms and Conditions Applicable to Employee Option Grants under the 2011 Stock Incentive Plan, incorporated by reference to Exhibit 10.7 of the Company’s Form 10-Q for the fiscal quarter ended December 28, 2013.*
|
|
|
|
|
10.16
|
|
|
Uniform Terms and Conditions Applicable to Employee Performance Restricted Stock Unit Agreements under the 2011 Stock Incentive Plan, incorporated by reference to Exhibit 10.16 of the Company’s Form 10-K for the fiscal year ended October 3, 2015.*
|
|
|
|
|
10.17
|
|
|
Form of Notice of Grant Performance Restricted Stock Units and Performance Restricted Stock Unit Agreement - Employee under the 2011 Stock Incentive Plan, incorporated by reference to Exhibit 10.17 of the Company’s Form 10-K for the fiscal year ended October 3, 2015.*
|
|
|
|
|
10.18
|
|
|
Letter Agreement, dated as of March 31, 2012, by and between the Company and Jeffrey A. Graves, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed April 9, 2012.*
|
|
|
|
|
10.19
|
|
|
Consulting Agreement, dated as of January 13, 2017, by and between the Company and William E. Bachrach, incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed January 13, 2017.*
|
|
|
|
|
10.20
|
|
|
Transition Bonus Agreement, dated as of July 6, 2016, by and between the Company and John V. Emholz, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed July 7, 2016.*
|
|
|
|
|
10.21
|
|
|
Employment Agreement, dated as of April 1, 2016, by and between PCB Group, Inc. and David T. Hore, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed July 7, 2016.*
|
|
|
|
|
10.22
|
|
|
First Amendment to Employment Agreement, dated as of November 8, 2016, by and between PCB Group, Inc. and David T. Hore (filed herewith).*
|
|
|
|
|
10.23
|
|
|
Letter Agreement, dated August 24, 2016, by and between the Company and William C. Becker, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed January 5, 2017.*
|
|
|
|
|
10.24
|
|
|
Letter Agreement, dated December 30, 2016, by and between the Company and Steven B. Harrison, incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed January 5, 2017.*
|
|
|
|
|
10.25
|
|
|
Form of Indemnification Agreement between the Company and each of its directors and executive officers, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed September 1, 2006.*
|
|
|
|
|
10.26
|
|
|
Amended and Restated Executive Severance Plan (filed herewith).*
|
|
|
|
|
10.27
|
|
|
Amended and Restated Executive Change in Control Severance Plan (filed herewith).*
|
|
|
|
|
10.28
|
|
|
Credit Agreement, dated as of July 5, 2016, among the Company; the foreign subsidiaries of the Company party thereto, the lenders party thereto and JPMorgan Chase Bank N.A., as administrative agent, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed July 7, 2016.
|
|
|
|
|
10.29
|
|
|
Amendment No. 1 to Credit Agreement, dated as of July 29, 2016, by and among the Company, JPMorgan Chase Bank, N.A., as Administrative Agent and Swingline Lender, JPMorgan Chase Bank, N.A. and U.S. Bank National Association, as Issuing Banks, the Revolving Lenders party thereto and Bank of America, N.A., as an Additional Lender, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed August 1, 2016.
|
|
|
|
|
10.30
|
|
|
Form of Consent Memorandum, effective as of January 24, 2017, executed by the lenders party thereto and JPMorgan Chase Bank, N.A. as administrative agent, and acknowledged and agreed to by the Company, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed January 24, 2017.
|
|
|
|
|
10.31
|
|
|
Commitment Letter, dated April 5, 2016, by and between the Company and JPMorgan Chase Bank, N.A., incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed April 11, 2016.
|
|
|
|
10.32
|
|
|
Amended and Restated Commitment Letter, dated May 10, 2016, by and among the Company, JPMorgan Chase Bank, N.A., Wells Fargo Bank, N.A., WF Investment Holdings, LLC, Wells Fargo Securities, LLC, U.S. Bank National Association, HSBC Bank USA, N.A. and HSBC Securities (USA) Inc., incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed May 11, 2016.
|
|
|
|
|
10.33
|
|
|
Capped Call Transaction Confirmation, dated as of June 9, 2016, by and between the Company and JPMorgan Chase Bank, National Association, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 15, 2016.
|
|
|
|
|
10.34
|
|
|
Capped Call Transaction Confirmation, dated as of June 9, 2016, by and between the Company and Wells Fargo Bank, National Association, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed June 15, 2016.
|
|
|
|
|
10.35
|
|
|
Additional Capped Call Transaction Confirmation, dated as of June 16, 2016, by and between the Company and JPMorgan Chase Bank, National Association, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 21, 2016.
|
|
|
|
|
10.36
|
|
|
Additional Capped Call Transaction Confirmation, dated as of June 16, 2016, by and between the Company and Wells Fargo Bank, National Association, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed June 21, 2016.
|
|
|
|
|
12.1
|
|
|
Computation of ratio of earnings to fixed charges (filed herewith).
|
|
|
|
|
21.1
|
|
|
Subsidiaries of the Registrant (filed herewith).
|
|
|
|
|
23.1
|
|
|
Consent of Independent Registered Public Accounting Firm (filed herewith).
|
|
|
|
|
31.1
|
|
|
Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
|
31.2
|
|
|
Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
|
32.1
|
|
|
Certification of the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
|
32.2
|
|
|
Certification of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
|
101.INS**
|
|
|
XBRL Instance Document (filed herewith).
|
|
|
|
|
101.SCH**
|
|
|
XBRL Taxonomy Extension Schema Document (filed herewith).
|
|
|
|
|
101.CAL**
|
|
|
XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).
|
|
|
|
|
101.DEF**
|
|
|
XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).
|
|
|
|
|
101.LAB**
|
|
|
XBRL Taxonomy Extension Label Linkbase Document (filed herewith).
|
|
|
|
|
101.PRE**
|
|
|
XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).
|
|
|
|
|
*
|
|
|
Denotes our contract or executive compensation plan or arrangement required to be filed as an exhibit pursuant to Item 15 of Form 10-K.
|
|
|
|
|
**
|
|
|
XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
|
|
|
|
|
|
|
MTS SYSTEMS CORPORATION
|
|
|
|
|
|
Date:
|
April 10, 2017
|
/s/ JEFFREY A. GRAVES
|
|
|
|
Jeffrey A. Graves
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
Date:
|
April 10, 2017
|
/s/ JEFFREY P. OLDENKAMP
|
|
|
|
Jeffrey P. Oldenkamp
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
/s/ JEFFREY A. GRAVES
|
|
President and
|
|
April 10, 2017
|
Jeffrey A. Graves
|
|
Chief Executive Officer
|
|
|
|
|
and Director
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ JEFFREY P. OLDENKAMP
|
|
Senior Vice President
|
|
April 10, 2017
|
Jeffrey P. Oldenkamp
|
|
and Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer and
|
|
|
|
|
Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ DAVID J. ANDERSON
|
|
Non-Executive
|
|
April 10, 2017
|
David J. Anderson
|
|
Chair of the Board
|
|
|
|
|
|
|
|
/s/ DAVID D. JOHNSON
|
|
Director
|
|
April 10, 2017
|
David D. Johnson
|
|
|
|
|
|
|
|
|
|
/s/ RANDY J. MARTINEZ
|
|
Director
|
|
April 10, 2017
|
Randy J. Martinez
|
|
|
|
|
|
|
|
|
|
/s/ BARB J. SAMARDZICH
|
|
Director
|
|
April 10, 2017
|
Barb J. Samardzich
|
|
|
|
|
|
|
|
|
|
/s/ MICHAEL V. SCHROCK
|
|
Director
|
|
April 10, 2017
|
Michael V. Schrock
|
|
|
|
|
|
|
|
|
|
/s/ GAIL P. STEINEL
|
|
Director
|
|
April 10, 2017
|
Gail P. Steinel
|
|
|
|
|
|
|
|
|
|
/s/ MAXIMILIANE C. STRAUB
|
|
Director
|
|
April 10, 2017
|
Maximiliane C. Straub
|
|
|
|
|
|
|
|
|
|
/s/ CHUN HUNG (KENNETH) YU
|
|
Director
|
|
April 10, 2017
|
Chun Hung (Kenneth) Yu
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
|
F-2
|
||
|
|
|
|
|
F-3
|
||
|
|
|
|
|
F-4
|
||
|
|
|
|
|
F-5
|
||
|
|
|
|
|
F-6
|
||
|
|
|
|
|
F-7
|
||
|
|
|
|
|
F-8 through F-45
|
||
|
|
|
|
Financial Statement Schedule
|
|
|
|
|
|
|
|
Schedule
|
Description
|
|
|
|
|
|
|
II
|
|
F-46
|
|
|
|
|
|
|
|
October 1, 2016
|
|
|
October 3, 2015
|
|
||
Assets
|
|
|
|
|
|
|
||
Current assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
84,780
|
|
|
$
|
51,768
|
|
Accounts receivable, net of allowance for doubtful accounts of $3,923 and $3,411, respectively
|
|
133,500
|
|
|
89,829
|
|
||
Unbilled accounts receivable
|
|
76,626
|
|
|
77,519
|
|
||
Inventories, net
|
|
132,566
|
|
|
86,303
|
|
||
Prepaid expenses and other current assets
|
|
12,793
|
|
|
8,104
|
|
||
Deferred income taxes
|
|
—
|
|
|
14,190
|
|
||
Total current assets
|
|
440,265
|
|
|
327,713
|
|
||
Property and equipment, net
|
|
100,789
|
|
|
80,454
|
|
||
Goodwill
|
|
369,700
|
|
|
27,677
|
|
||
Intangible assets, net
|
|
266,789
|
|
|
19,706
|
|
||
Other long-term assets
|
|
5,061
|
|
|
2,010
|
|
||
Deferred income taxes
|
|
5,416
|
|
|
3,271
|
|
||
Total assets
|
|
$
|
1,188,020
|
|
|
$
|
460,831
|
|
|
|
|
|
|
||||
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
|
||
Short-term borrowings
|
|
$
|
—
|
|
|
$
|
21,183
|
|
Current maturities of long-term debt, net
|
|
9,850
|
|
|
—
|
|
||
Accounts payable
|
|
46,383
|
|
|
32,994
|
|
||
Accrued payroll and related costs
|
|
45,505
|
|
|
27,938
|
|
||
Advance payments from customers
|
|
72,728
|
|
|
65,734
|
|
||
Accrued warranty costs
|
|
5,718
|
|
|
4,695
|
|
||
Accrued income taxes
|
|
3,445
|
|
|
3,273
|
|
||
Deferred income taxes
|
|
—
|
|
|
990
|
|
||
Accrued dividends
|
|
4,942
|
|
|
—
|
|
||
Other accrued liabilities
|
|
27,550
|
|
|
19,845
|
|
||
Total current liabilities
|
|
216,121
|
|
|
176,652
|
|
||
Long-term debt, less current maturities, net
|
|
455,001
|
|
|
—
|
|
||
Non-current deferred income taxes
|
|
86,020
|
|
|
8,154
|
|
||
Non-current accrued income taxes
|
|
6,232
|
|
|
5,649
|
|
||
Defined benefit pension plan obligation
|
|
13,744
|
|
|
7,784
|
|
||
Other long-term liabilities
|
|
5,642
|
|
|
4,450
|
|
||
Total liabilities
|
|
782,760
|
|
|
202,689
|
|
||
|
|
|
|
|
||||
Shareholders’ Equity
|
|
|
|
|
|
|
||
Common stock, $0.25 par value; 64,000 shares authorized: 16,660 and 14,932 shares issued and outstanding as of October 1, 2016 and October 3, 2015, respectively
|
|
4,165
|
|
|
3,733
|
|
||
Additional paid-in capital
|
|
154,879
|
|
|
4,275
|
|
||
Retained earnings
|
|
256,589
|
|
|
255,711
|
|
||
Accumulated other comprehensive income (loss)
|
|
(10,373
|
)
|
|
(5,577
|
)
|
||
Total shareholders’ equity
|
|
405,260
|
|
|
258,142
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
1,188,020
|
|
|
$
|
460,831
|
|
For the Fiscal Year Ended
|
|
October 1, 2016
|
|
|
October 3, 2015
|
|
|
September 27, 2014
|
|
|||
Revenue
|
|
|
|
|
|
|
|
|
|
|||
Product
|
|
$
|
562,340
|
|
|
$
|
484,835
|
|
|
$
|
487,011
|
|
Service
|
|
87,807
|
|
|
79,099
|
|
|
77,317
|
|
|||
Total Revenue
|
|
650,147
|
|
|
563,934
|
|
|
564,328
|
|
|||
Cost of Sales
|
|
|
|
|
|
|
|
|
|
|||
Product
|
|
365,401
|
|
|
296,962
|
|
|
296,449
|
|
|||
Service
|
|
53,342
|
|
|
47,359
|
|
|
44,236
|
|
|||
Total Cost of Sales
|
|
418,743
|
|
|
344,321
|
|
|
340,685
|
|
|||
Gross Profit
|
|
231,404
|
|
|
219,613
|
|
|
223,643
|
|
|||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|||
Selling and marketing
|
|
94,992
|
|
|
82,974
|
|
|
88,136
|
|
|||
General and administrative
|
|
69,313
|
|
|
51,438
|
|
|
51,407
|
|
|||
Research and development
|
|
25,336
|
|
|
23,705
|
|
|
23,844
|
|
|||
Total Operating Expenses
|
|
189,641
|
|
|
158,117
|
|
|
163,387
|
|
|||
Income From Operations
|
|
41,763
|
|
|
61,496
|
|
|
60,256
|
|
|||
Interest income (expense), net
|
|
(8,489
|
)
|
|
(795
|
)
|
|
(692
|
)
|
|||
Other income (expense), net
|
|
238
|
|
|
(1,529
|
)
|
|
(1,121
|
)
|
|||
Income Before Income Taxes
|
|
33,512
|
|
|
59,172
|
|
|
58,443
|
|
|||
Provision for income taxes
|
|
6,018
|
|
|
13,710
|
|
|
16,434
|
|
|||
Net Income
|
|
$
|
27,494
|
|
|
$
|
45,462
|
|
|
$
|
42,009
|
|
|
|
|
|
|
|
|
||||||
Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
|
|
|
|
|
||||||
Earnings per share
|
|
$
|
1.72
|
|
|
$
|
3.03
|
|
|
$
|
2.76
|
|
Weighted average common shares outstanding
|
|
16,027
|
|
|
14,984
|
|
|
15,218
|
|
|||
|
|
|
|
|
|
|
||||||
Diluted
|
|
|
|
|
|
|
||||||
Earnings per share
|
|
$
|
1.70
|
|
|
$
|
3.00
|
|
|
$
|
2.73
|
|
Weighted average common shares outstanding
|
|
16,179
|
|
|
15,142
|
|
|
15,397
|
|
|||
|
|
|
|
|
|
|
||||||
Dividends declared per share
|
|
$
|
1.20
|
|
|
$
|
1.20
|
|
|
$
|
1.20
|
|
For the Fiscal Year Ended
|
|
October 1, 2016
|
|
|
October 3, 2015
|
|
|
September 27, 2014
|
|
|||
Net income
|
|
$
|
27,494
|
|
|
$
|
45,462
|
|
|
$
|
42,009
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation gain (loss) adjustments
|
|
(332
|
)
|
|
(11,215
|
)
|
|
(5,099
|
)
|
|||
Derivative instruments
|
|
|
|
|
|
|
|
|
|
|||
Unrealized net gain (loss)
|
|
(855
|
)
|
|
2,226
|
|
|
1,112
|
|
|||
Net (gain) loss reclassified to earnings
|
|
214
|
|
|
(2,738
|
)
|
|
(691
|
)
|
|||
Defined benefit pension plan
|
|
|
|
|
|
|
|
|
|
|||
Unrealized net gain (loss)
|
|
(4,213
|
)
|
|
(874
|
)
|
|
(2,553
|
)
|
|||
Net (gain) loss reclassified to earnings
|
|
408
|
|
|
350
|
|
|
324
|
|
|||
Currency exchange rate gain (loss)
|
|
(18
|
)
|
|
850
|
|
|
394
|
|
|||
Other comprehensive income (loss)
|
|
(4,796
|
)
|
|
(11,401
|
)
|
|
(6,513
|
)
|
|||
Comprehensive income
|
|
$
|
22,698
|
|
|
$
|
34,061
|
|
|
$
|
35,496
|
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Shareholders’
Equity
|
|||||||||||||
|
|
Shares
Issued
|
|
Amount
|
|
|
Retained
Earnings
|
|
|
||||||||||||||
Balance, September 28, 2013
|
|
15,408
|
|
|
$
|
3,852
|
|
|
$
|
—
|
|
|
$
|
240,348
|
|
|
$
|
12,337
|
|
|
$
|
256,537
|
|
Total comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,009
|
|
|
(6,513
|
)
|
|
35,496
|
|
|||||
Exercise of stock options
|
|
182
|
|
|
46
|
|
|
6,680
|
|
|
—
|
|
|
—
|
|
|
6,726
|
|
|||||
Stock-based compensation
|
|
31
|
|
|
7
|
|
|
6,045
|
|
|
—
|
|
|
—
|
|
|
6,052
|
|
|||||
Tax benefit from equity compensation
|
|
—
|
|
|
—
|
|
|
1,727
|
|
|
—
|
|
|
—
|
|
|
1,727
|
|
|||||
Issuance for employee stock purchase plan
|
|
16
|
|
|
4
|
|
|
860
|
|
|
—
|
|
|
—
|
|
|
864
|
|
|||||
Common stock purchased and retired
|
|
(457
|
)
|
|
(114
|
)
|
|
(9,200
|
)
|
|
(21,699
|
)
|
|
—
|
|
|
(31,013
|
)
|
|||||
Dividends, $1.20 per share
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,262
|
)
|
|
—
|
|
|
(18,262
|
)
|
|||||
Balance, September 27, 2014
|
|
15,180
|
|
|
$
|
3,795
|
|
|
$
|
6,112
|
|
|
$
|
242,396
|
|
|
$
|
5,824
|
|
|
$
|
258,127
|
|
Total comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,462
|
|
|
(11,401
|
)
|
|
34,061
|
|
|||||
Exercise of stock options
|
|
92
|
|
|
23
|
|
|
3,904
|
|
|
—
|
|
|
—
|
|
|
3,927
|
|
|||||
Stock-based compensation
|
|
57
|
|
|
14
|
|
|
7,443
|
|
|
—
|
|
|
—
|
|
|
7,457
|
|
|||||
Tax benefit from equity compensation
|
|
—
|
|
|
—
|
|
|
734
|
|
|
—
|
|
|
—
|
|
|
734
|
|
|||||
Issuance for employee stock purchase plan
|
|
16
|
|
|
4
|
|
|
916
|
|
|
—
|
|
|
—
|
|
|
920
|
|
|||||
Common stock purchased and retired
|
|
(413
|
)
|
|
(103
|
)
|
|
(14,834
|
)
|
|
(14,178
|
)
|
|
—
|
|
|
(29,115
|
)
|
|||||
Dividends, $1.20 per share
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,969
|
)
|
|
—
|
|
|
(17,969
|
)
|
|||||
Balance, October 3, 2015
|
|
14,932
|
|
|
$
|
3,733
|
|
|
$
|
4,275
|
|
|
$
|
255,711
|
|
|
$
|
(5,577
|
)
|
|
$
|
258,142
|
|
Total comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,494
|
|
|
(4,796
|
)
|
|
22,698
|
|
|||||
Issuance of common stock, net of issuance costs
|
|
1,897
|
|
|
474
|
|
|
73,827
|
|
|
—
|
|
|
—
|
|
|
74,301
|
|
|||||
Issuance of tangible equity units, net of issuance costs
|
|
—
|
|
|
—
|
|
|
84,511
|
|
|
—
|
|
|
—
|
|
|
84,511
|
|
|||||
Purchase of capped call transaction
|
|
—
|
|
|
—
|
|
|
(7,935
|
)
|
|
—
|
|
|
—
|
|
|
(7,935
|
)
|
|||||
Exercise of stock options
|
|
68
|
|
|
17
|
|
|
2,782
|
|
|
—
|
|
|
—
|
|
|
2,799
|
|
|||||
Stock-based compensation
|
|
47
|
|
|
12
|
|
|
7,144
|
|
|
—
|
|
|
—
|
|
|
7,156
|
|
|||||
Tax shortfall from equity compensation
|
|
—
|
|
|
—
|
|
|
(172
|
)
|
|
—
|
|
|
—
|
|
|
(172
|
)
|
|||||
Issuance for employee stock purchase plan
|
|
24
|
|
|
6
|
|
|
1,042
|
|
|
—
|
|
|
—
|
|
|
1,048
|
|
|||||
Common stock purchased and retired
|
|
(308
|
)
|
|
(77
|
)
|
|
(10,595
|
)
|
|
(7,742
|
)
|
|
—
|
|
|
(18,414
|
)
|
|||||
Dividends, $1.20 per share
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,874
|
)
|
|
—
|
|
|
(18,874
|
)
|
|||||
Balance, October 1, 2016
|
|
16,660
|
|
|
$
|
4,165
|
|
|
$
|
154,879
|
|
|
$
|
256,589
|
|
|
$
|
(10,373
|
)
|
|
$
|
405,260
|
|
For the Fiscal Year Ended
|
|
October 1, 2016
|
|
October 3, 2015
|
|
September 27, 2014
|
||||||
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
|
|||
Net income
|
|
$
|
27,494
|
|
|
$
|
45,462
|
|
|
$
|
42,009
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities
|
|
|
|
|
|
|
|
|
|
|||
Stock-based compensation
|
|
7,224
|
|
|
7,351
|
|
|
5,761
|
|
|||
Excess tax benefits from stock-based compensation
|
|
(187
|
)
|
|
(771
|
)
|
|
(1,723
|
)
|
|||
Fair value adjustment to acquired inventory and deferred revenue
|
|
7,916
|
|
|
—
|
|
|
564
|
|
|||
Net periodic pension benefit cost
|
|
1,136
|
|
|
986
|
|
|
1,098
|
|
|||
Depreciation and amortization
|
|
24,077
|
|
|
21,106
|
|
|
19,279
|
|
|||
Amortization of debt issuance costs
|
|
1,556
|
|
|
162
|
|
|
118
|
|
|||
Deferred income taxes
|
|
(5,274
|
)
|
|
459
|
|
|
(5,912
|
)
|
|||
Bad debt provision (recovery), net
|
|
957
|
|
|
1,210
|
|
|
810
|
|
|||
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
|
|
|||
Accounts and unbilled contracts receivable
|
|
(22,059
|
)
|
|
3,308
|
|
|
(6,245
|
)
|
|||
Inventories
|
|
3,365
|
|
|
(4,105
|
)
|
|
(4,623
|
)
|
|||
Prepaid expenses
|
|
(1,086
|
)
|
|
(1,673
|
)
|
|
780
|
|
|||
Accounts payable
|
|
5,647
|
|
|
6,772
|
|
|
(2,777
|
)
|
|||
Accrued payroll and related costs
|
|
9,057
|
|
|
(835
|
)
|
|
67
|
|
|||
Advance payments from customers
|
|
5,701
|
|
|
13,065
|
|
|
6,171
|
|
|||
Accrued warranty costs
|
|
414
|
|
|
445
|
|
|
(406
|
)
|
|||
Contributions to pension benefit plan
|
|
(633
|
)
|
|
(605
|
)
|
|
(638
|
)
|
|||
Other assets and liabilities
|
|
2,576
|
|
|
8,099
|
|
|
10,336
|
|
|||
Net Cash Provided by (Used in) Operating Activities
|
|
67,881
|
|
|
100,436
|
|
|
64,669
|
|
|||
Cash Flows from Investing Activities
|
|
|
|
|
|
|
|
|
|
|||
Purchases of property and equipment
|
|
(20,806
|
)
|
|
(18,445
|
)
|
|
(20,038
|
)
|
|||
Proceeds from sale of property and equipment
|
|
1,514
|
|
|
—
|
|
|
—
|
|
|||
Purchases of business, net of acquired cash
|
|
(580,920
|
)
|
|
(667
|
)
|
|
(14,192
|
)
|
|||
Net Cash Provided by (Used in) Investing Activities
|
|
(600,212
|
)
|
|
(19,112
|
)
|
|
(34,230
|
)
|
|||
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
|
|
|||
Proceeds from issuance of long-term debt
|
|
460,000
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of common stock, net of issuance costs
|
|
74,301
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of equity component of tangible equity units, net of issuance costs
|
|
84,511
|
|
|
—
|
|
|
—
|
|
|||
Payment for capped call transaction
|
|
(7,935
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of debt component of tangible equity units
|
|
27,386
|
|
|
—
|
|
|
—
|
|
|||
Payment of debt component of tangible equity units
|
|
(2,401
|
)
|
|
—
|
|
|
—
|
|
|||
Payment of debt issuance costs for long-term debt
|
|
(19,837
|
)
|
|
—
|
|
|
—
|
|
|||
Payment of debt issuance costs for debt component of tangible equity units
|
|
(971
|
)
|
|
—
|
|
|
—
|
|
|||
Payment of debt issuance costs for revolving credit facility
|
|
(920
|
)
|
|
(26
|
)
|
|
(450
|
)
|
|||
Receipts under short-term borrowings
|
|
20,000
|
|
|
11,183
|
|
|
30,000
|
|
|||
Payments under short-term borrowings
|
|
(41,343
|
)
|
|
(50,000
|
)
|
|
(5,448
|
)
|
|||
Excess tax benefits from stock-based compensation
|
|
187
|
|
|
771
|
|
|
1,723
|
|
|||
Cash dividends
|
|
(13,932
|
)
|
|
(22,445
|
)
|
|
(18,330
|
)
|
|||
Proceeds from exercise of stock options and employee stock purchase plan
|
|
3,847
|
|
|
4,847
|
|
|
7,590
|
|
|||
Payments to purchase and retire common stock
|
|
(18,414
|
)
|
|
(29,115
|
)
|
|
(31,013
|
)
|
|||
Net Cash Provided by (Used in) Financing Activities
|
|
564,479
|
|
|
(84,785
|
)
|
|
(15,928
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Effect of Exchange Rate Changes on Cash and Cash Equivalents
|
|
864
|
|
|
(5,168
|
)
|
|
(2,447
|
)
|
|||
Cash and Cash Equivalents
|
|
|
|
|
|
|
|
|
|
|||
Increase (decrease) during the year
|
|
33,012
|
|
|
(8,629
|
)
|
|
12,064
|
|
|||
Balance, beginning of period
|
|
51,768
|
|
|
60,397
|
|
|
48,333
|
|
|||
Balance, end of period
|
|
$
|
84,780
|
|
|
$
|
51,768
|
|
|
$
|
60,397
|
|
Supplemental Disclosures of Cash Flows
|
|
|
|
|
|
|
|
|
|
|||
Cash paid during the year for
|
|
|
|
|
|
|
|
|
|
|||
Interest
|
|
$
|
1,225
|
|
|
$
|
816
|
|
|
$
|
594
|
|
Income taxes
|
|
$
|
10,826
|
|
|
$
|
10,199
|
|
|
$
|
15,628
|
|
Non-cash investing activities
|
|
|
|
|
|
|
||||||
Deferred endowment consideration not yet paid
|
|
$
|
1,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net working capital adjustment not yet received
|
|
$
|
513
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-cash financing activities
|
|
|
|
|
|
|
|
|
|
|||
Accrued contingent consideration
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
650
|
|
Dividends declared not yet paid
|
|
$
|
4,942
|
|
|
$
|
—
|
|
|
$
|
4,476
|
|
Debt issuance costs not yet paid recorded in accounts payable and other accrued liabilities
|
|
$
|
235
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(in thousands)
|
|
2016
|
|
2015
|
||||
Components, assemblies and parts
|
|
$
|
87,119
|
|
|
$
|
61,732
|
|
Customer projects in various stages of completion
|
|
32,575
|
|
|
24,571
|
|
||
Finished goods
|
|
12,872
|
|
|
—
|
|
||
Total inventories
|
|
$
|
132,566
|
|
|
$
|
86,303
|
|
Asset Type
|
Useful Life
|
Buildings and improvements
|
10 to 40 years
|
Machinery and equipment
|
3 to 10 years
|
(in thousands)
|
|
2016
|
|
2015
|
||||
Beginning balance
|
|
$
|
4,695
|
|
|
$
|
4,286
|
|
Warranty claims
|
|
(5,592
|
)
|
|
(6,253
|
)
|
||
Warranty provisions
|
|
5,273
|
|
|
6,124
|
|
||
Adjustments to preexisting warranties
|
|
731
|
|
|
575
|
|
||
Acquired warranty obligations
|
|
608
|
|
|
—
|
|
||
Currency translation
|
|
3
|
|
|
(37
|
)
|
||
Ending balance
|
|
$
|
5,718
|
|
|
$
|
4,695
|
|
(in thousands, except per share data)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
|
$
|
27,494
|
|
|
$
|
45,462
|
|
|
$
|
42,009
|
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding
|
|
16,027
|
|
|
14,984
|
|
|
15,218
|
|
|||
Effect of dilutive securities
|
|
|
|
|
|
|
||||||
Stock-based compensation
|
|
105
|
|
|
158
|
|
|
179
|
|
|||
Tangible equity units
|
|
47
|
|
|
—
|
|
|
—
|
|
|||
Weighted average dilutive common shares outstanding
|
|
16,179
|
|
|
15,142
|
|
|
15,397
|
|
|||
|
|
|
|
|
|
|
||||||
Earnings per share
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
$
|
1.72
|
|
|
$
|
3.03
|
|
|
$
|
2.76
|
|
Diluted
|
|
$
|
1.70
|
|
|
$
|
3.00
|
|
|
$
|
2.73
|
|
(in thousands)
|
|
2016
|
|
2015
|
||||
Land and improvements
|
|
$
|
2,865
|
|
|
$
|
1,705
|
|
Buildings and improvements
|
|
59,350
|
|
|
53,097
|
|
||
Machinery and equipment
|
|
189,406
|
|
|
162,472
|
|
||
Total property and equipment
|
|
251,621
|
|
|
217,274
|
|
||
Less accumulated depreciation
|
|
(150,832
|
)
|
|
(136,820
|
)
|
||
Total property and equipment, net
|
|
$
|
100,789
|
|
|
$
|
80,454
|
|
(in thousands)
|
|
Test
|
|
Sensors
|
|
Total
|
||||||
Balance, September 27, 2014
|
|
$
|
24,584
|
|
|
$
|
1,539
|
|
|
$
|
26,123
|
|
Acquisitions
1
|
|
533
|
|
|
—
|
|
|
533
|
|
|||
Adjustment related to finalization of purchase accounting
1
|
|
1,619
|
|
|
—
|
|
|
1,619
|
|
|||
Currency translation gain (loss)
|
|
(493
|
)
|
|
(105
|
)
|
|
(598
|
)
|
|||
Balance, October 3, 2015
|
|
$
|
26,243
|
|
|
$
|
1,434
|
|
|
$
|
27,677
|
|
Acquisitions
1
|
|
—
|
|
|
343,242
|
|
|
343,242
|
|
|||
Adjustment related to finalization of purchase accounting
1
|
|
(530
|
)
|
|
—
|
|
|
(530
|
)
|
|||
Currency translation gain (loss)
|
|
(691
|
)
|
|
2
|
|
|
(689
|
)
|
|||
Balance, October 1, 2016
|
|
$
|
25,022
|
|
|
$
|
344,678
|
|
|
$
|
369,700
|
|
1
|
Refer to Note 13 for information related to acquisitions.
|
|
|
October 1, 2016
|
||||||||||||
(in thousands)
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Value
|
|
Weighted
Average
Useful Life
(in Years)
|
||||||
Software development costs
|
|
$
|
23,184
|
|
|
$
|
(14,938
|
)
|
|
$
|
8,246
|
|
|
6.0
|
Technology and patents
|
|
46,672
|
|
|
(6,360
|
)
|
|
40,312
|
|
|
14.9
|
|||
Trademarks and trade names
|
|
6,903
|
|
|
(1,911
|
)
|
|
4,992
|
|
|
25.5
|
|||
Customer lists
|
|
156,987
|
|
|
(3,372
|
)
|
|
153,615
|
|
|
15.8
|
|||
Land-use rights
|
|
2,369
|
|
|
(245
|
)
|
|
2,124
|
|
|
26.3
|
|||
Trademarks and trade names
|
|
57,500
|
|
|
—
|
|
|
57,500
|
|
|
Indefinite
|
|||
Total intangible assets
|
|
$
|
293,615
|
|
|
$
|
(26,826
|
)
|
|
$
|
266,789
|
|
|
15.1
|
|
|
October 3, 2015
|
||||||||||||
(in thousands)
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Value
|
|
Weighted
Average Useful Life (in Years) |
||||||
Software development costs
|
|
$
|
19,546
|
|
|
$
|
(14,046
|
)
|
|
$
|
5,500
|
|
|
6.2
|
Patents
|
|
11,838
|
|
|
(5,141
|
)
|
|
6,697
|
|
|
14.5
|
|||
Trademarks and trade names
|
|
6,163
|
|
|
(1,659
|
)
|
|
4,504
|
|
|
29.4
|
|||
Customer lists
|
|
2,561
|
|
|
(610
|
)
|
|
1,951
|
|
|
8.1
|
|||
Land-use rights
|
|
1,227
|
|
|
(173
|
)
|
|
1,054
|
|
|
47.8
|
|||
Total intangible assets
|
|
$
|
41,335
|
|
|
$
|
(21,629
|
)
|
|
$
|
19,706
|
|
|
13.4
|
Fiscal Year
|
Amortization Expense
(in thousands)
|
|
|
2017
|
$
|
14,573
|
|
2018
|
13,712
|
|
|
2019
|
13,587
|
|
|
2020
|
13,306
|
|
|
2021
|
13,306
|
|
|
Thereafter
|
140,805
|
|
•
|
Level 1:
Unadjusted quoted prices which are available in active markets for identical assets or liabilities accessible to us at the measurement date.
|
•
|
Level 2:
Inputs other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
|
•
|
Level 3:
Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.
|
|
|
October 1, 2016
|
||||||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Currency contracts
1
|
|
$
|
—
|
|
|
$
|
149
|
|
|
$
|
—
|
|
|
$
|
149
|
|
Total assets
|
|
$
|
—
|
|
|
$
|
149
|
|
|
$
|
—
|
|
|
$
|
149
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Currency contracts
1
|
|
$
|
—
|
|
|
$
|
711
|
|
|
$
|
—
|
|
|
$
|
711
|
|
Total liabilities
|
|
$
|
—
|
|
|
$
|
711
|
|
|
$
|
—
|
|
|
$
|
711
|
|
|
|
October 3, 2015
|
||||||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Currency contracts
1
|
|
$
|
—
|
|
|
$
|
841
|
|
|
$
|
—
|
|
|
$
|
841
|
|
Total assets
|
|
$
|
—
|
|
|
$
|
841
|
|
|
$
|
—
|
|
|
$
|
841
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Currency contracts
1
|
|
$
|
—
|
|
|
$
|
639
|
|
|
$
|
—
|
|
|
$
|
639
|
|
Total liabilities
|
|
$
|
—
|
|
|
$
|
639
|
|
|
$
|
—
|
|
|
$
|
639
|
|
1
|
Based on observable market transactions of spot currency rates and forward currency rates on equivalently-termed instruments. Carrying amounts of the financial assets and liabilities are equal to the fair value. See Note 4 for additional information on derivative financial instruments.
|
|
October 1, 2016
|
|||||||||||||||||||
(in thousands)
|
|
Carrying Value
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Debt component of tangible equity units (TEUs)
2
|
|
$
|
24,985
|
|
|
$
|
28,080
|
|
|
$
|
—
|
|
|
$
|
28,080
|
|
|
$
|
—
|
|
Tranche B term loan
3
|
|
460,000
|
|
|
465,465
|
|
|
—
|
|
|
465,465
|
|
|
—
|
|
|||||
Total debt
|
|
$
|
484,985
|
|
|
$
|
493,545
|
|
|
$
|
—
|
|
|
$
|
493,545
|
|
|
$
|
—
|
|
2
|
The fair value of the TEUs is based on the most recently quoted price for the outstanding securities, adjusted for any known significant deviations in value. The estimated fair value of these long-term obligations is not necessarily indicative of the amount that would be realized in a current market exchange. See Note 9 for additional information on the TEUs.
|
3
|
The fair value of the Tranche B term loan is based on the most recently quoted market price for the outstanding debt instrument, adjusted for any known significant deviations in value. The estimated fair value of the debt obligation is not necessarily indicative of the amount that would be realized in a current market exchange. See Note 5 for additional information on debt instruments.
|
|
|
October 1, 2016
|
||||||
(in thousands)
|
|
Prepaid Expenses
and Other
Current Assets
|
|
Other Accrued
Liabilities
|
||||
Designated hedge derivatives
|
|
|
|
|
|
|
||
Cash flow derivatives
|
|
$
|
149
|
|
|
$
|
633
|
|
|
|
|
|
|
||||
Hedge derivatives not designated
|
|
|
|
|
|
|
||
Balance sheet derivatives
|
|
—
|
|
|
78
|
|
||
Total hedge derivatives
|
|
$
|
149
|
|
|
$
|
711
|
|
|
|
October 3, 2015
|
||||||
(in thousands)
|
|
Prepaid Expenses
and Other
Current Assets
|
|
Other Accrued
Liabilities
|
||||
Designated hedge derivatives
|
|
|
|
|
|
|
||
Cash flow derivatives
|
|
$
|
841
|
|
|
$
|
353
|
|
|
|
|
|
|
||||
Hedge derivatives not designated
|
|
|
|
|
|
|
||
Balance sheet derivatives
|
|
—
|
|
|
286
|
|
||
Total hedge derivatives
|
|
$
|
841
|
|
|
$
|
639
|
|
(in thousands)
|
|
Gross
Recognized
Amount
|
|
Gross
Offset
Amount
|
|
Net
Amount
Presented
|
|
Derivatives
Subject to
Offset
|
|
Cash
Collateral
Received
|
|
Net
Amount
1
|
||||||||||||
October 1, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets
|
|
$
|
149
|
|
|
$
|
—
|
|
|
$
|
149
|
|
|
$
|
(147
|
)
|
|
$
|
—
|
|
|
$
|
2
|
|
Liabilities
|
|
633
|
|
|
—
|
|
|
633
|
|
|
(147
|
)
|
|
—
|
|
|
486
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
October 3, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Assets
|
|
$
|
841
|
|
|
$
|
—
|
|
|
$
|
841
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
841
|
|
Liabilities
|
|
353
|
|
|
—
|
|
|
353
|
|
|
—
|
|
|
—
|
|
|
353
|
|
1
|
Net fair value of foreign exchange cash flow hedge assets / liabilities that could have been reported in the Consolidated Balance Sheets.
|
(in thousands)
|
|
2016
|
|
2015
|
||||
Beginning unrealized net gain in AOCI
|
|
$
|
608
|
|
|
$
|
1,415
|
|
Net loss (gain) reclassified into revenue (effective portion)
|
|
334
|
|
|
(4,299
|
)
|
||
Net (loss) gain recognized in OCI (effective portion)
|
|
(1,342
|
)
|
|
3,492
|
|
||
Ending unrealized net (loss) gain in AOCI
|
|
$
|
(400
|
)
|
|
$
|
608
|
|
(in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net (loss) gain recognized in other income (expense), net
|
|
$
|
(950
|
)
|
|
$
|
582
|
|
|
$
|
1,267
|
|
(in thousands)
|
|
2016
|
|
2015
|
||||
Bank line of credit, monthly U.S. LIBOR plus 100 basis points, terminated July 5, 2016
|
|
$
|
—
|
|
|
$
|
10,000
|
|
Bank line of credit, monthly Euro LIBOR plus 100 basis points, terminated July 5, 2016
|
|
—
|
|
|
11,183
|
|
||
Total short-term borrowings
|
|
$
|
—
|
|
|
$
|
21,183
|
|
(in thousands)
|
|
2016
|
|
2015
|
||||
Long-term debt
|
|
|
|
|
||||
Tranche B term loan, 1.00% amortizing per year, maturing July 5, 2023
|
|
$
|
460,000
|
|
|
$
|
—
|
|
Tangible equity units, 8.75% coupon, maturing July 1, 2019
1
|
|
24,985
|
|
|
—
|
|
||
Total long-term debt
|
|
$
|
484,985
|
|
|
$
|
—
|
|
Less: Unamortized underwriting discounts, commissions and other expenses
|
|
(16,843
|
)
|
|
—
|
|
||
Less: Current maturities of long-term Tranche B term loan debt
2
|
|
(4,600
|
)
|
|
—
|
|
||
Less: Current maturities of long-term TEU debt
2
|
|
(8,541
|
)
|
|
—
|
|
||
Total long-term debt, less current maturities, net
|
|
$
|
455,001
|
|
|
$
|
—
|
|
1
|
See Note 9 for more information on our TEUs issued in the third quarter of fiscal year 2016.
|
2
|
Current maturities of long-term debt, net of
$9,850
presented in our Consolidated Balance Sheet as of
October 1, 2016
, includes
$4,600
of current maturities of long-term Tranche B term loan debt and
$8,541
of current maturities of long-term TEU debt less
$3,291
of unamortized underwriting discounts, commissions and issuance costs.
|
Fiscal Year
|
Maturities of Long-Term Debt
(in thousands)
|
|
|
2017
|
$
|
13,141
|
|
2018
|
13,752
|
|
|
2019
|
11,891
|
|
|
2020
|
4,600
|
|
|
2021
|
4,600
|
|
|
Thereafter
|
437,001
|
|
(in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Stock-based compensation expense by type of award
|
|
|
|
|
|
|
|
|
|
|||
Employee stock options
|
|
$
|
2,436
|
|
|
$
|
2,683
|
|
|
$
|
2,769
|
|
Employee stock purchase plan (ESPP)
|
|
519
|
|
|
239
|
|
|
212
|
|
|||
Restricted stock and restricted stock units
|
|
4,203
|
|
|
4,536
|
|
|
3,073
|
|
|||
Amounts capitalized as inventory
|
|
(2,354
|
)
|
|
(1,985
|
)
|
|
(1,608
|
)
|
|||
Amounts recognized in income for amounts previously capitalized as inventory
|
|
2,420
|
|
|
1,878
|
|
|
1,315
|
|
|||
Total stock-based compensation included in income from operations
|
|
7,224
|
|
|
7,351
|
|
|
5,761
|
|
|||
Income tax benefit on stock-based compensation
|
|
(2,421
|
)
|
|
(2,564
|
)
|
|
(1,999
|
)
|
|||
Net compensation expense included in net income
|
|
$
|
4,803
|
|
|
$
|
4,787
|
|
|
$
|
3,762
|
|
|
|
2016
|
|
2015
|
|
2014
|
|||
Expected life (in years)
|
|
4.1
|
|
|
3.5
|
|
|
4.1
|
|
Risk-free interest rate
|
|
1.5
|
%
|
|
1.1
|
%
|
|
1.1
|
%
|
Expected volatility
|
|
26.7
|
%
|
|
27.4
|
%
|
|
31.3
|
%
|
Dividend yield
|
|
2.0
|
%
|
|
1.8
|
%
|
|
1.8
|
%
|
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
(in thousands, except per share data)
|
|
Shares
|
|
WAEP
1
|
|
Shares
|
|
WAEP
1
|
|
Shares
|
|
WAEP
1
|
|||||||||
Options outstanding at beginning of year
|
|
687
|
|
|
$
|
58.17
|
|
|
634
|
|
|
$
|
53.72
|
|
|
518
|
|
|
$
|
39.52
|
|
Granted
|
|
316
|
|
|
$
|
61.57
|
|
|
172
|
|
|
$
|
67.28
|
|
|
355
|
|
|
$
|
65.34
|
|
Exercised
|
|
(68
|
)
|
|
$
|
41.10
|
|
|
(92
|
)
|
|
$
|
42.88
|
|
|
(182
|
)
|
|
$
|
37.01
|
|
Forfeited or expired
|
|
(151
|
)
|
|
$
|
61.74
|
|
|
(27
|
)
|
|
$
|
63.39
|
|
|
(57
|
)
|
|
$
|
51.45
|
|
Options outstanding at end of year
|
|
784
|
|
|
$
|
60.34
|
|
|
687
|
|
|
$
|
58.17
|
|
|
634
|
|
|
$
|
53.72
|
|
Options eligible for exercise at year-end
|
|
331
|
|
|
$
|
56.23
|
|
|
304
|
|
|
$
|
48.56
|
|
|
194
|
|
|
$
|
40.36
|
|
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
(in thousands, except per share data)
|
|
Shares
|
|
WAGDFV
2
|
|
Shares
|
|
WAGDFV
2
|
|
Shares
|
|
WAGDFV
2
|
|||||||||
Unvested shares at beginning of year
|
|
3
|
|
|
$
|
57.01
|
|
|
9
|
|
|
$
|
54.16
|
|
|
24
|
|
|
$
|
51.68
|
|
Granted
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Vested
|
|
(3
|
)
|
|
$
|
57.01
|
|
|
(6
|
)
|
|
$
|
53.03
|
|
|
(14
|
)
|
|
$
|
49.71
|
|
Forfeited
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
(1
|
)
|
|
$
|
53.99
|
|
Unvested shares at end of year
|
|
—
|
|
|
$
|
—
|
|
|
3
|
|
|
$
|
57.01
|
|
|
9
|
|
|
$
|
54.16
|
|
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
(in thousands, except per share data)
|
|
Shares
|
|
WAGDFV
3
|
|
Shares
|
|
WAGDFV
3
|
|
Shares
|
|
WAGDFV
3
|
|||||||||
Outstanding at beginning of year
|
|
119
|
|
|
$
|
64.77
|
|
|
98
|
|
|
$
|
60.51
|
|
|
38
|
|
|
$
|
40.91
|
|
Granted
|
|
114
|
|
|
$
|
55.84
|
|
|
74
|
|
|
$
|
65.93
|
|
|
88
|
|
|
$
|
63.86
|
|
Vested
|
|
(47
|
)
|
|
$
|
64.69
|
|
|
(47
|
)
|
|
$
|
57.68
|
|
|
(17
|
)
|
|
$
|
41.01
|
|
Forfeited
|
|
(21
|
)
|
|
$
|
62.15
|
|
|
(6
|
)
|
|
$
|
67.96
|
|
|
(11
|
)
|
|
$
|
50.10
|
|
Outstanding at end of year
|
|
165
|
|
|
$
|
58.98
|
|
|
119
|
|
|
$
|
64.77
|
|
|
98
|
|
|
$
|
60.51
|
|
(in thousands)
|
|
2016
|
|
2015
|
||||
Actuarial net loss
|
|
$
|
15,476
|
|
|
$
|
9,999
|
|
(in thousands)
|
|
2016
|
|
2015
|
||||
Change in benefit obligation
|
|
|
|
|
|
|
||
Projected benefit obligation, beginning of year
|
|
$
|
27,272
|
|
|
$
|
28,618
|
|
Service cost
|
|
971
|
|
|
860
|
|
||
Interest cost
|
|
608
|
|
|
634
|
|
||
Actuarial loss
|
|
6,123
|
|
|
1,256
|
|
||
Exchange rate change
|
|
93
|
|
|
(3,491
|
)
|
||
Benefits paid
|
|
(633
|
)
|
|
(605
|
)
|
||
Projected benefit obligation, end of year
|
|
$
|
34,434
|
|
|
$
|
27,272
|
|
|
|
|
|
|
||||
Change in plan assets
|
|
|
|
|
|
|
||
Fair value of plan assets, beginning of year
|
|
$
|
18,767
|
|
|
$
|
20,269
|
|
Actual return on plan assets
|
|
1,119
|
|
|
1,040
|
|
||
Employer contributions
|
|
633
|
|
|
605
|
|
||
Exchange rate change
|
|
64
|
|
|
(2,542
|
)
|
||
Benefits paid
|
|
(633
|
)
|
|
(605
|
)
|
||
Fair value of plan assets, end of year
|
|
$
|
19,950
|
|
|
$
|
18,767
|
|
(in thousands)
|
|
2016
|
|
2015
|
||||
Funded status
|
|
|
|
|
|
|
||
Funded status, end of year
|
|
$
|
(14,484
|
)
|
|
$
|
(8,505
|
)
|
Accumulated other comprehensive loss
|
|
15,476
|
|
|
9,999
|
|
||
Net amount recognized
|
|
$
|
992
|
|
|
$
|
1,494
|
|
|
|
|
|
|
||||
Amounts recognized in consolidated balance sheets
|
|
|
|
|
|
|
||
Accrued payroll and related costs
|
|
$
|
(740
|
)
|
|
$
|
(721
|
)
|
Pension benefit plan obligation
|
|
(13,744
|
)
|
|
(7,784
|
)
|
||
Deferred income taxes
|
|
4,685
|
|
|
3,031
|
|
||
Accumulated other comprehensive income, net of tax
|
|
10,791
|
|
|
6,968
|
|
||
Net amount recognized
|
|
$
|
992
|
|
|
$
|
1,494
|
|
|
|
2016
|
|
2015
|
||
Discount rate
|
|
1.28
|
%
|
|
2.27
|
%
|
Expected rate of return on plan assets
|
|
5.50
|
%
|
|
5.50
|
%
|
Expected rate of increase in future compensation levels
|
|
3.00
|
%
|
|
3.00
|
%
|
|
|
Percentage of Plan Assets
|
||||
|
|
2016
|
|
2015
|
||
Fixed income securities
1
|
|
75.5
|
%
|
|
83.0
|
%
|
Cash and cash equivalents
2
|
|
24.5
|
%
|
|
13.0
|
%
|
Other
|
|
—
|
%
|
|
4.0
|
%
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
1
|
Fixed income securities are comprised primarily of international government agency and international corporate bonds with investment grade ratings.
|
2
|
Cash and cash equivalents include deposit accounts holding cash in Euros and other currencies and term deposits primarily held as collateral for equity futures. The market values of the equity and futures are linked to the values of equity indexes of developed country markets, including the U.S., Great Britain, Europe, Canada, Switzerland and Japan.
|
|
|
October 1, 2016
|
||||||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Mutual fund
1
|
|
$
|
—
|
|
|
$
|
19,950
|
|
|
$
|
—
|
|
|
$
|
19,950
|
|
|
|
October 3, 2015
|
||||||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Mutual fund
1
|
|
$
|
—
|
|
|
$
|
18,767
|
|
|
$
|
—
|
|
|
$
|
18,767
|
|
1
|
The fair value of the mutual fund is generally valued based on closing prices from national exchanges, if the underlying securities are traded on an active market, or fixed income pricing models that use observable market inputs.
|
(in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Service cost
|
|
$
|
971
|
|
|
$
|
860
|
|
|
$
|
800
|
|
Interest cost
|
|
608
|
|
|
634
|
|
|
833
|
|
|||
Expected return on plan assets
|
|
(1,027
|
)
|
|
(1,009
|
)
|
|
(1,024
|
)
|
|||
Net amortization and deferral
|
|
584
|
|
|
501
|
|
|
464
|
|
|||
Special termination benefits
|
|
—
|
|
|
—
|
|
|
25
|
|
|||
Net periodic benefit cost
|
|
$
|
1,136
|
|
|
$
|
986
|
|
|
$
|
1,098
|
|
Fiscal Year
|
Pension Benefits
(in thousands)
|
|
|
2017
|
$
|
740
|
|
2018
|
775
|
|
|
2019
|
841
|
|
|
2020
|
886
|
|
|
2021
|
994
|
|
|
2022 through 2026
|
5,659
|
|
|
Total
|
$
|
9,895
|
|
(in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Domestic
|
|
$
|
5,345
|
|
|
$
|
31,827
|
|
|
$
|
32,867
|
|
Foreign
|
|
28,167
|
|
|
27,345
|
|
|
25,576
|
|
|||
Total income before income taxes
|
|
$
|
33,512
|
|
|
$
|
59,172
|
|
|
$
|
58,443
|
|
(in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Current
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
|
$
|
3,169
|
|
|
$
|
4,588
|
|
|
$
|
7,503
|
|
State
|
|
138
|
|
|
527
|
|
|
842
|
|
|||
Foreign
|
|
6,712
|
|
|
8,025
|
|
|
13,056
|
|
|||
Deferred
|
|
(4,001
|
)
|
|
570
|
|
|
(4,967
|
)
|
|||
Total provision for income taxes
|
|
$
|
6,018
|
|
|
$
|
13,710
|
|
|
$
|
16,434
|
|
(in thousands)
|
|
2016
|
|
2015
|
|
2014
|
|||
United States federal statutory income tax rate
|
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
Impact from foreign operations
|
|
(5
|
)
|
|
(4
|
)
|
|
(1
|
)
|
State income taxes, net of federal benefit
|
|
—
|
|
|
1
|
|
|
1
|
|
Research and development tax credits
|
|
(16
|
)
|
|
(8
|
)
|
|
(5
|
)
|
Domestic production activities deduction
|
|
(2
|
)
|
|
(2
|
)
|
|
(2
|
)
|
Foreign tax credits
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
Nondeductible acquisition costs
|
|
5
|
|
|
—
|
|
|
—
|
|
Nondeductible stock option expense and other permanent items
|
|
1
|
|
|
1
|
|
|
2
|
|
Effective income tax rate
|
|
18
|
%
|
|
23
|
%
|
|
28
|
%
|
(in thousands)
|
|
2016
|
|
2015
|
||||
Deferred tax assets
|
|
|
|
|
|
|
||
Accrued compensation and benefits
|
|
$
|
15,888
|
|
|
$
|
11,723
|
|
Inventory reserves
|
|
6,128
|
|
|
5,198
|
|
||
Other assets
|
|
4,685
|
|
|
4,389
|
|
||
Allowance for doubtful accounts
|
|
1,488
|
|
|
866
|
|
||
Net operating loss carryovers
|
|
140
|
|
|
84
|
|
||
State and foreign tax credit carryovers
|
|
1,249
|
|
|
—
|
|
||
Research and development tax credit carryovers
|
|
1,540
|
|
|
993
|
|
||
Unrealized derivative instrument gains
|
|
185
|
|
|
—
|
|
||
Total deferred tax asset before valuation allowance
|
|
31,303
|
|
|
23,253
|
|
||
Less valuation allowance
|
|
(3,009
|
)
|
|
(921
|
)
|
||
Total deferred tax assets
|
|
$
|
28,294
|
|
|
$
|
22,332
|
|
Deferred tax liabilities
|
|
|
|
|
|
|
||
Property and equipment
|
|
$
|
15,128
|
|
|
$
|
9,775
|
|
Foreign deferred revenue and other
|
|
3,320
|
|
|
1,738
|
|
||
Intangible assets
|
|
90,450
|
|
|
1,303
|
|
||
Unrealized derivative instrument gains
|
|
—
|
|
|
1,199
|
|
||
Total deferred tax liabilities
|
|
$
|
108,898
|
|
|
$
|
14,015
|
|
Net deferred tax assets (liabilities)
|
|
$
|
(80,604
|
)
|
|
$
|
8,317
|
|
(in thousands)
|
|
2016
|
|
2015
|
||||
Beginning balance
|
|
$
|
5,649
|
|
|
$
|
5,990
|
|
Increase due to tax positions related to the current year
|
|
269
|
|
|
1,631
|
|
||
Increase (decrease) due to tax positions related to prior years
|
|
500
|
|
|
(1,596
|
)
|
||
Decrease due to settlements with tax authorities
|
|
—
|
|
|
(332
|
)
|
||
Decrease due to lapse of statute of limitations
|
|
(186
|
)
|
|
(43
|
)
|
||
Exchange rate change
|
|
—
|
|
|
(1
|
)
|
||
Ending balance
|
|
$
|
6,232
|
|
|
$
|
5,649
|
|
(in thousands)
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Total
|
||||||
Public offering
|
$
|
474
|
|
|
$
|
79,221
|
|
|
$
|
79,695
|
|
Less: Underwriting discounts and commissions
|
—
|
|
|
(4,782
|
)
|
|
(4,782
|
)
|
|||
Less: Other expenses
1
|
—
|
|
|
(612
|
)
|
|
(612
|
)
|
|||
Issuance of common stock, net
|
$
|
474
|
|
|
$
|
73,827
|
|
|
$
|
74,301
|
|
1
|
Other expenses include direct and incremental costs related to the issuance of the common stock.
|
(in thousands, except fair value price per TEU)
|
Equity Component
|
|
Debt Component
|
|
Total
|
||||||
Fair value price per TEU
2
|
$
|
76.19
|
|
|
$
|
23.81
|
|
|
$
|
100.00
|
|
|
|
|
|
|
|
||||||
Gross proceeds
|
$
|
87,614
|
|
|
$
|
27,386
|
|
|
$
|
115,000
|
|
Less: Underwriting discounts and commissions
|
(2,628
|
)
|
|
(822
|
)
|
|
(3,450
|
)
|
|||
Less: Other expenses
3
|
(475
|
)
|
|
(149
|
)
|
|
(624
|
)
|
|||
Issuance of TEUs, net
|
$
|
84,511
|
|
|
$
|
26,415
|
|
|
$
|
110,926
|
|
3
|
Other expenses include direct and incremental costs related to the issuance of the TEUs.
|
•
|
if the applicable market value is equal to or greater than the threshold appreciation price of
$50.40
per share, holders will receive
1.9841
shares of common stock per purchase contract, or the minimum settlement rate, resulting in the issuance of
2,282
shares of our common stock;
|
•
|
if the applicable market value is greater than the reference price of
$42.00
per share, but less than the threshold appreciation price of
$50.40
per share, holders will receive a number of shares of common stock equal to
$100
per TEU divided by the applicable market value; or
|
•
|
if the applicable market value is less than or equal to the reference price of
$42.00
per share, holders will receive
2.3810
shares of common stock per purchase contract, or the maximum settlement rate, resulting in the issuance of
2,738
shares of our common stock.
|
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||||||||||||||
(in thousands)
|
|
Pretax
|
|
Tax
|
|
Net
|
|
Pretax
|
|
Tax
|
|
Net
|
|
Pretax
|
|
Tax
|
|
Net
|
||||||||||||||||||
Foreign currency translation gain (loss) adjustments
|
|
$
|
(332
|
)
|
|
$
|
—
|
|
|
$
|
(332
|
)
|
|
$
|
(11,215
|
)
|
|
$
|
—
|
|
|
$
|
(11,215
|
)
|
|
$
|
(5,099
|
)
|
|
$
|
—
|
|
|
$
|
(5,099
|
)
|
Derivative instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Unrealized net gain (loss)
|
|
(1,342
|
)
|
|
487
|
|
|
(855
|
)
|
|
3,492
|
|
|
(1,266
|
)
|
|
2,226
|
|
|
1,749
|
|
|
(637
|
)
|
|
1,112
|
|
|||||||||
Net (gain) loss reclassified to earnings
|
|
334
|
|
|
(120
|
)
|
|
214
|
|
|
(4,299
|
)
|
|
1,561
|
|
|
(2,738
|
)
|
|
(1,088
|
)
|
|
397
|
|
|
(691
|
)
|
|||||||||
Defined benefit pension plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Unrealized net gain (loss)
|
|
(6,034
|
)
|
|
1,821
|
|
|
(4,213
|
)
|
|
(1,252
|
)
|
|
378
|
|
|
(874
|
)
|
|
(3,656
|
)
|
|
1,103
|
|
|
(2,553
|
)
|
|||||||||
Net (gain) loss reclassified to earnings
|
|
584
|
|
|
(176
|
)
|
|
408
|
|
|
501
|
|
|
(151
|
)
|
|
350
|
|
|
464
|
|
|
(140
|
)
|
|
324
|
|
|||||||||
Currency exchange rate gain (loss)
|
|
(18
|
)
|
|
—
|
|
|
(18
|
)
|
|
850
|
|
|
—
|
|
|
850
|
|
|
394
|
|
|
—
|
|
|
394
|
|
|||||||||
Other comprehensive income (loss)
|
|
$
|
(6,808
|
)
|
|
$
|
2,012
|
|
|
$
|
(4,796
|
)
|
|
$
|
(11,923
|
)
|
|
$
|
522
|
|
|
$
|
(11,401
|
)
|
|
$
|
(7,236
|
)
|
|
$
|
723
|
|
|
$
|
(6,513
|
)
|
(in thousands)
|
|
Foreign
Currency
Translation
Adjustments
|
|
Unrealized
Derivative
Instrument
Adjustments
|
|
Defined
Benefit
Pension Plan
Adjustments
|
|
Total
|
||||||||
Balance, September 28, 2013
|
|
$
|
17,319
|
|
|
$
|
477
|
|
|
$
|
(5,459
|
)
|
|
$
|
12,337
|
|
Other comprehensive income (loss) reclassifications
|
|
(5,099
|
)
|
|
1,112
|
|
|
(2,159
|
)
|
|
(6,146
|
)
|
||||
Amounts reclassified to earnings
|
|
—
|
|
|
(691
|
)
|
|
324
|
|
|
(367
|
)
|
||||
Other comprehensive income (loss)
|
|
(5,099
|
)
|
|
421
|
|
|
(1,835
|
)
|
|
(6,513
|
)
|
||||
Balance, September 27, 2014
|
|
$
|
12,220
|
|
|
$
|
898
|
|
|
$
|
(7,294
|
)
|
|
$
|
5,824
|
|
Other comprehensive income (loss) reclassifications
|
|
(11,215
|
)
|
|
2,226
|
|
|
(24
|
)
|
|
(9,013
|
)
|
||||
Amounts reclassified to earnings
|
|
—
|
|
|
(2,738
|
)
|
|
350
|
|
|
(2,388
|
)
|
||||
Other comprehensive income (loss)
|
|
(11,215
|
)
|
|
(512
|
)
|
|
326
|
|
|
(11,401
|
)
|
||||
Balance, October 3, 2015
|
|
$
|
1,005
|
|
|
$
|
386
|
|
|
$
|
(6,968
|
)
|
|
$
|
(5,577
|
)
|
Other comprehensive income (loss) reclassifications
|
|
(332
|
)
|
|
(855
|
)
|
|
(4,231
|
)
|
|
(5,418
|
)
|
||||
Amounts reclassified to earnings
|
|
—
|
|
|
214
|
|
|
408
|
|
|
622
|
|
||||
Other comprehensive income (loss)
|
|
(332
|
)
|
|
(641
|
)
|
|
(3,823
|
)
|
|
(4,796
|
)
|
||||
Balance, October 1, 2016
|
|
$
|
673
|
|
|
$
|
(255
|
)
|
|
$
|
(10,791
|
)
|
|
(10,373
|
)
|
(in thousands)
|
|
2016
|
|
2015
|
|
2014
|
|
Affected Line Item in the
Consolidated Statements
of Income
|
||||||
Derivative instruments
|
|
|
|
|
|
|
|
|
|
|
|
|||
Currency exchange contracts gain (loss)
|
|
$
|
(334
|
)
|
|
$
|
4,299
|
|
|
$
|
1,088
|
|
|
Revenue
|
Income tax benefit (expense)
|
|
120
|
|
|
(1,561
|
)
|
|
(397
|
)
|
|
Provision for income taxes
|
|||
Total net gain (loss) on derivative instruments
|
|
(214
|
)
|
|
2,738
|
|
|
691
|
|
|
Net income
|
|||
|
|
|
|
|
|
|
|
|
||||||
Defined benefit pension plan
|
|
|
|
|
|
|
|
|
|
|
|
|||
Actuarial loss
|
|
(319
|
)
|
|
(273
|
)
|
|
(253
|
)
|
|
Cost of sales
|
|||
Actuarial loss
|
|
(165
|
)
|
|
(143
|
)
|
|
(131
|
)
|
|
Selling and marketing
|
|||
Actuarial loss
|
|
(100
|
)
|
|
(85
|
)
|
|
(80
|
)
|
|
General and administrative
|
|||
Total actuarial gain (loss)
|
|
(584
|
)
|
|
(501
|
)
|
|
(464
|
)
|
|
Income before income taxes
|
|||
Income tax benefit (expense)
|
|
176
|
|
|
151
|
|
|
140
|
|
|
Provision for income taxes
|
|||
Total net gain (loss) on pension plan
|
|
(408
|
)
|
|
(350
|
)
|
|
(324
|
)
|
|
Net income
|
|||
|
|
|
|
|
|
|
|
|
||||||
Total net-of-tax reclassifications out of
|
|
|
|
|
|
|
|
|
|
|
|
|||
AOCI included in net income
|
|
$
|
(622
|
)
|
|
$
|
2,388
|
|
|
$
|
367
|
|
|
|
(in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|||
Test
|
|
$
|
512,265
|
|
|
$
|
462,880
|
|
|
$
|
458,153
|
|
Sensors
|
|
137,882
|
|
|
101,054
|
|
|
106,175
|
|
|||
Total revenue
|
|
$
|
650,147
|
|
|
$
|
563,934
|
|
|
$
|
564,328
|
|
|
|
|
|
|
|
|
||||||
Income from Operations
|
|
|
|
|
|
|
|
|
|
|||
Test
|
|
$
|
40,660
|
|
|
$
|
42,285
|
|
|
$
|
39,848
|
|
Sensors
|
|
1,103
|
|
|
19,211
|
|
|
20,408
|
|
|||
Total income from operations
|
|
$
|
41,763
|
|
|
$
|
61,496
|
|
|
$
|
60,256
|
|
|
|
|
|
|
|
|
||||||
Identifiable Assets
|
|
|
|
|
|
|
|
|
|
|||
Test
|
|
$
|
395,067
|
|
|
$
|
369,515
|
|
|
$
|
392,825
|
|
Sensors
|
|
792,953
|
|
|
91,316
|
|
|
94,583
|
|
|||
Total identifiable assets
|
|
$
|
1,188,020
|
|
|
$
|
460,831
|
|
|
$
|
487,408
|
|
|
|
|
|
|
|
|
||||||
Goodwill
|
|
|
|
|
|
|
|
|
|
|||
Test
|
|
$
|
25,022
|
|
|
$
|
26,243
|
|
|
$
|
24,584
|
|
Sensors
|
|
344,678
|
|
|
1,434
|
|
|
1,539
|
|
|||
Total goodwill
|
|
$
|
369,700
|
|
|
$
|
27,677
|
|
|
$
|
26,123
|
|
|
|
|
|
|
|
|
||||||
Capital Expenditures
|
|
|
|
|
|
|
||||||
Test
|
|
$
|
17,570
|
|
|
$
|
14,652
|
|
|
$
|
16,553
|
|
Sensors
|
|
3,236
|
|
|
3,793
|
|
|
3,485
|
|
|||
Total capital expenditures
|
|
$
|
20,806
|
|
|
$
|
18,445
|
|
|
$
|
20,038
|
|
|
|
|
|
|
|
|
||||||
Depreciation and Amortization
|
|
|
|
|
|
|
||||||
Test
|
|
$
|
17,279
|
|
|
$
|
18,342
|
|
|
$
|
16,560
|
|
Sensors
|
|
6,798
|
|
|
2,764
|
|
|
2,719
|
|
|||
Total depreciation and amortization
|
|
$
|
24,077
|
|
|
$
|
21,106
|
|
|
$
|
19,279
|
|
(in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Revenue
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
154,707
|
|
|
$
|
151,288
|
|
|
$
|
144,239
|
|
Europe
|
|
163,944
|
|
|
149,308
|
|
|
179,043
|
|
|||
China
|
|
152,264
|
|
|
131,727
|
|
|
117,952
|
|
|||
Asia, excluding China
|
|
148,056
|
|
|
109,376
|
|
|
90,242
|
|
|||
Other Americas
|
|
31,176
|
|
|
22,235
|
|
|
32,852
|
|
|||
Total revenue
|
|
$
|
650,147
|
|
|
$
|
563,934
|
|
|
$
|
564,328
|
|
|
|
|
|
|
|
|
||||||
Property and Equipment, Net
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
79,794
|
|
|
$
|
59,312
|
|
|
$
|
58,911
|
|
Europe
|
|
13,695
|
|
|
13,071
|
|
|
13,573
|
|
|||
China
|
|
5,630
|
|
|
6,260
|
|
|
7,034
|
|
|||
Asia, excluding China
|
|
1,670
|
|
|
1,811
|
|
|
2,057
|
|
|||
Total property and equipment, net
|
|
$
|
100,789
|
|
|
$
|
80,454
|
|
|
$
|
81,575
|
|
(in thousands)
|
Test
|
|
Sensors
|
|
Total
|
||||||
Fiscal year 2016
|
|
|
|
|
|
||||||
Cost of sales
|
$
|
299
|
|
|
$
|
762
|
|
|
$
|
1,061
|
|
Selling and marketing
|
129
|
|
|
155
|
|
|
284
|
|
|||
General and administrative
|
414
|
|
|
401
|
|
|
815
|
|
|||
Research and development
|
5
|
|
|
—
|
|
|
5
|
|
|||
Total restructuring expense for fiscal year 2016
|
$
|
847
|
|
|
$
|
1,318
|
|
|
$
|
2,165
|
|
|
|
|
|
|
|
||||||
Fiscal year 2014
|
|
|
|
|
|
||||||
Cost of sales
|
$
|
3,507
|
|
|
$
|
—
|
|
|
$
|
3,507
|
|
Selling and marketing
|
1,805
|
|
|
—
|
|
|
1,805
|
|
|||
General and administrative
|
1,024
|
|
|
—
|
|
|
1,024
|
|
|||
Total restructuring expense for fiscal year 2014
|
$
|
6,336
|
|
|
$
|
—
|
|
|
$
|
6,336
|
|
|
2016
|
|
2014
|
|
|
||||||||||
(in thousands)
|
Q3 Restructuring
|
|
Q4 Restructuring
|
|
Restructuring
|
|
Total
|
||||||||
Balance at September 27, 2014
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,573
|
|
|
$
|
2,573
|
|
Payments
|
—
|
|
|
—
|
|
|
(726
|
)
|
|
(726
|
)
|
||||
Other adjustments
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
(16
|
)
|
||||
Currency translation
|
—
|
|
|
—
|
|
|
(283
|
)
|
|
(283
|
)
|
||||
Balance at October 3, 2015
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,548
|
|
|
$
|
1,548
|
|
Restructuring expense
|
1,237
|
|
|
928
|
|
|
—
|
|
|
2,165
|
|
||||
Payments
|
(1,238
|
)
|
|
—
|
|
|
(498
|
)
|
|
(1,736
|
)
|
||||
Other adjustments
|
336
|
|
|
—
|
|
|
—
|
|
|
336
|
|
||||
Currency translation
|
(27
|
)
|
|
7
|
|
|
3
|
|
|
(17
|
)
|
||||
Balance at October 1, 2016
|
$
|
308
|
|
|
$
|
935
|
|
|
$
|
1,053
|
|
|
$
|
2,296
|
|
(in thousands)
|
2016
|
|
2015
|
||||
Accrued payroll and related costs
|
$
|
1,066
|
|
|
$
|
497
|
|
Other accrued liabilities
|
520
|
|
|
—
|
|
||
Other long-term liabilities
|
710
|
|
|
1,051
|
|
||
Total severance and related costs
|
$
|
2,296
|
|
|
$
|
1,548
|
|
1
|
Of the
$580,000
consideration paid to PCB, we paid
$10,000
directly to employees of PCB on behalf of the PCB shareholders during the fourth quarter of fiscal year 2016. The payment was made pursuant to the definitive purchase agreement entered into with PCB in connection with the acquisition.
|
(in thousands except per share data)
|
2016
|
|
2015
|
||||
Revenue
|
$
|
782,379
|
|
|
$
|
743,595
|
|
Net income
|
18,779
|
|
|
39,324
|
|
||
|
|
|
|
||||
Earnings per share
|
|
|
|
||||
Basic
|
$
|
0.93
|
|
|
$
|
2.05
|
|
Diluted
|
0.92
|
|
|
2.04
|
|
•
|
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.
|
•
|
Exclusion of the purchase accounting impact of the incremental charge reported in cost of sales for the sale of acquired inventory that was written-up to fair value of
$7,916
.
|
•
|
Includes
$22,968
of interest expense on outstanding debt entered into as part of funding the acquisition.
|
•
|
Pro forma adjustments tax affected by
20%
tax rate.
|
•
|
Weighted average shares outstanding was adjusted to increase the amount by
4,179
shares for both basic and diluted shares in the earnings per share calculation due to the fact that we issued equity in the form of shares of our common stock to acquire PCB.
|
(in thousands)
|
|
||
Revenue
|
$
|
45,140
|
|
Net income
|
$
|
3,582
|
|
Fiscal Year
|
Payments
(in thousands)
|
|
|
2017
|
$
|
5,542
|
|
2018
|
3,315
|
|
|
2019
|
1,465
|
|
|
2020
|
634
|
|
|
2021
|
427
|
|
|
Thereafter
|
1,836
|
|
|
Total
|
$
|
13,219
|
|
(in thousands)
|
Swapped Value
|
|
|
November 3, 2016
|
$
|
275,000
|
|
October 3, 2017
|
255,000
|
|
|
October 3, 2018
|
225,000
|
|
|
October 3, 2019
|
180,000
|
|
|
October 3, 2020
|
125,000
|
|
|
April 3, 2021
|
—
|
|
(in thousands)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Beginning balance
|
|
$
|
3,411
|
|
|
$
|
2,609
|
|
|
$
|
1,998
|
|
Provisions / (recoveries)
|
|
957
|
|
|
1,210
|
|
|
810
|
|
|||
Amounts written-off / payments
|
|
(330
|
)
|
|
(267
|
)
|
|
(159
|
)
|
|||
Currency
|
|
(115
|
)
|
|
(141
|
)
|
|
(40
|
)
|
|||
Ending balance
|
|
$
|
3,923
|
|
|
$
|
3,411
|
|
|
$
|
2,609
|
|
(a)
|
The Plan shall be administered by the Compensation Committee of the Board of Directors of the Company (hereinafter referred to as the “Board of Directors”) or another committee established by the Board of Directors (the Compensation Committee or such other committee, hereinafter referred to as the “Committee”). The Board of Directors shall fill all vacancies in the Committee and may remove any member of the Committee at any time, with or without cause.
|
(b)
|
Unless the Board of Directors limits the authority of the Committee, the Committee shall be vested with full authority to adopt, amend and rescind any rules deemed desirable and appropriate for the administration of the Plan, to construe and interpret the Plan, and to make all other determinations necessary or advisable for the administration of the Plan. Decisions of the Committee will be final and binding on all parties who have an interest in the Plan. The Committee may delegate ministerial duties to such of the Company’s employees, outside entities and outside professionals as the Committee so determines. For all purposes of this Plan other than the Plan’s Section 3(b), references to the Committee shall also refer to the Board of Directors.
|
(c)
|
The Company shall pay all expenses of administering the Plan, other than costs associated with either any required tax withholding or the sale or other disposition of shares purchased under the Plan.
|
(a)
|
The Plan will commence on January 1, 2012 and will terminate December 31, 2021, except that any Phase commenced prior to such termination shall, if necessary, be allowed to continue beyond such termination until completion. Notwithstanding the foregoing, this Plan shall be considered of no force or effect and any options granted shall be considered null and void unless the holders of a majority of all of the issued and outstanding shares of Stock approve the Plan within twelve (12) months after the date of its adoption by the Board of Directors.
|
(b)
|
The Plan shall be carried out in one or more offering periods (“Phases”) being for a period determined by the Committee prior to the commencement of a Phase, provided that no Phase, shall be for a period of less than three months (other than the first Phase, which may be shorter) nor for a period of longer than twelve months. No Phase shall run concurrently with any other Phase but a Phase may commence immediately after the termination of the preceding Phase. The existence and date of commencement of a Phase (the “Subscription Date”) shall be determined by the Committee and shall terminate on a date (the “Purchase Date”) determined by the Committee consistent with the limitations specified above, provided that the commencement of the first Phase shall be within twelve months before or after the date of approval of the Plan by the shareholders of the Company. In the event all of the Stock reserved for grant of options hereunder is issued pursuant to the terms hereof prior to the commencement of one or more Phases scheduled by the Committee or the number of shares remaining is so small, in the opinion of the Committee, as to render administration of any succeeding Phase impracticable, such Phase or Phases shall be canceled. Phases shall be numbered successively as Phase 1, Phase 2, Phase 3, etc.
|
(c)
|
The Board of Directors may elect to accelerate the Purchase Date of any Phase effective on the date specified by the Board of Directors in the event of (i) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of Stock would be converted into cash, securities or other property, other than a merger of the Company in which shareholders immediately prior to the merger have the same proportionate ownership of stock in the surviving corporation immediately after the merger; or (ii) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company. Subject to any required action by the shareholders, if the Company shall be involved in any merger or consolidation, in which it is not the surviving corporation, and if the Board of Directors does not accelerate the Purchase Date of the Phase, each outstanding option shall pertain to and apply to the securities or other rights to which a holder of the number of shares subject to the option would have been entitled.
|
(d)
|
A dissolution or liquidation of the Company shall cause each outstanding option to terminate, provided in such event that, immediately prior to such dissolution or liquidation, each Participant shall be repaid the payroll deductions credited to the Participant’s account without interest.
|
(a)
|
Participation in the Plan is voluntary. An eligible Employee may elect to participate in the Plan, and thereby become a “Participant” in the Plan, by enrolling online through E*TRADE via www.etrade.com/stockplans by the applicable deadline prior to the date a Phase commences. The first Subscription Date shall be a date after January 1, 2012 as determined by the Committee. A Participant who ceases to be an eligible Employee, although still employed by the Company, shall continue to be treated as a Participant for the remainder of the current Phase. A Participant who is enrolled in the MTS Systems Corporation 2002 Employee Stock Purchase Plan (“2002 Plan”) at the Purchase Date of the last phase of the 2002 Plan, and does not subsequently cancel enrollment prior to the Subscription Date of the first Phase of the Plan, will automatically be in enrolled in the Plan under their elections from the 2002 Plan.
|
(b)
|
Once enrolled in the Plan, a Participant will continue to participate in the Plan until he or she withdraws from the Plan pursuant to Section 9(a), or until contributions are discontinued under Section 8(a)(iv)(A) or Section 9(e), 9(f) or 9(g). A Participant who withdraws from the Plan pursuant to Section 9(a) may again become a Participant, if the Participant is then an eligible Employee, by proceeding as provided in Section 6(a) above, which shall be effective as of the next Subscription Date. A Participant whose payroll deductions were discontinued because of Section 8(a)(iv)(A) will automatically resume participation at the Subscription Date of the next Phase of the Plan that ends in the next calendar year, if he or she is then an eligible Employee. A Participant whose payroll deductions were discontinued because of Section 9(e) may resume participation and payroll deductions on the Subscription Date of the next Phase after the Participant is again permitted to make deferrals under the MTS Retirement Savings Plan, if he or she is then an eligible Employee, and enrolls through E*TRADE at www.etrade.com/stockplans. A Participant whose payroll deductions were discontinued because of Section 9(f) or 9(g) may resume participation and payroll deductions on the Subscription Date of the next Phase after the Participant is again an eligible Employee, and enrolls through E*TRADE at www.etrade.com/stockplans.
|
(a)
|
Upon enrollment, except as provided in the next sentence, a Participant shall elect to make contributions to the Plan by payroll deductions, in whole percentages of 1% to 10% of Pay or such lesser percentage as determined by the Committee, but not in excess of the limit specified in Section 8(a)(iv)(A) below for each Phase until the Employee ceases to be a Participant as described in Section 6(b) above. In the event the Company anticipates that the maximum contribution specified in Section 8(a)(iv)(A) for the Phase will apply to a Participant, the Participant may designate a dollar amount. Payroll deductions for a Participant shall commence on the first payday after the Subscription Date of the Phase and shall terminate on the last payday immediately prior to or coinciding with the Purchase Date of that Phase unless sooner terminated by the Participant as provided in Section 7 and 9 hereof. Except for payroll deduction, a Participant may not make any separate cash payments into the Participant’s account under the Plan.
|
(b)
|
In the event that the Participant’s Pay for any pay period is terminated or reduced from the compensation rate for such a period as of the Subscription Date of the Phase for any reason so that the amount actually withheld on behalf of the Participant as of the Purchase Date of the Phase is less than the amount anticipated to be withheld over the Phase as determined on the Subscription Date of the Phase, then the extent to which the Participant may exercise the Participant’s option shall be based on the amount actually withheld on the Participant’s behalf. In the event of a change in the pay period of any Participant, such as from bi-weekly to monthly,
|
(c)
|
A Participant may withdraw from participation in the Phase and terminate the Participant’s payroll deduction authorized at such times as determined by the Committee and shall have the rights provided in Section 9. No Participant shall be entitled to increase or decrease the amount to be deducted during a Phase after the Subscription Date of that Phase.
|
(d)
|
All payroll deductions made for Participants shall be credited to their respective accounts under the Plan.
|
(e)
|
Notwithstanding (a) above and to comply with the limitation set forth in Section 8(a)(iv)(A), a Participant’s maximum payroll deduction for a calendar year shall be $21,250 (this maximum is reviewed periodically and subject to change based on Internal Revenue Code requirements). If a Participant’s payroll deductions are suspended due to this limitation, such payroll deductions shall, absent an election by the Participant to the contrary, resume beginning with the first pay period in the next following calendar year at the same level as in effect at the time of suspension.
|
(a)
|
Grant of Option.
|
(i)
|
A Participant who is employed by the Company as of the Subscription Date of a Phase shall be granted an option as of such date to purchase shares of Stock to be determined by dividing the total amount credited to that Participant’s account under Section 7 hereof by the applicable purchase price set forth in Section 8(a)(ii) hereof, subject to the limitations of Sections 8(a)(iv)(A), 8(a)(iv)(B) and 8(a)(iv)(C) and Section 10 hereof.
|
(ii)
|
The purchase price for such shares of Stock shall be the lower of:
|
A.
|
Eighty-five percent (85%) of the Fair Market Value of such shares of Stock on the Subscription Date of the Phase; or
|
B.
|
Eighty-five percent (85%) of the Fair Market Value of such shares of Stock on the Purchase Date of the Phase.
|
(iii)
|
Stock options granted pursuant to the Plan may be evidenced by agreements in such form as the Committee shall approve, provided that all Employees shall have the same rights and privileges and provided further that such options shall comply with and be subject to the terms and conditions set forth herein. The Committee may conclude that agreements are not necessary.
|
(iv)
|
Anything herein to the contrary notwithstanding, no Participant shall be granted an option hereunder:
|
A.
|
Which permits the Participant’s rights to purchase shares of Stock under all employee stock purchase plans of the Company, its Subsidiaries or its parent, if any, to accrue at a rate which exceeds $25,000 of the Fair Market Value of such Stock (determined at the time such option is granted) for each calendar year in which such option is outstanding at any time. In the case of shares purchased during a Phase that commenced in the current calendar year, the limit shall be equal to $25,000 minus the Fair Market Value of the shares that the Participant previously purchased in the current calendar year under the Plan and all other
|
B.
|
Which permits the Participant to purchase shares of Stock under all employee stock purchase plans of the Company, its Subsidiaries or its parent, if any, in excess of 10,000 shares per Phase under the Plan; or
|
C.
|
If immediately after the grant such Participant would own and/or hold outstanding options to purchase stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company, its parent, if any, or of any Subsidiary of the Company. For purposes of determining stock ownership under this Section, the rules of Section 424(d) of the Internal Revenue Code, as amended, shall apply.
|
(v)
|
The grant of an option pursuant to this Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all or any part of its business or assets.
|
(b)
|
Exercise of Option.
|
(i)
|
Unless a Participant gives written notice to the Company pursuant to Section 9 to withdraw, the Participant’s option for the purchase of shares will be exercised automatically for the Participant as of such Purchase Date for the purchase of that number of full and fractional shares (rounded to the nearest 1/10000
th
of a share) of Stock that the accumulated payroll deductions in the Participant’s account at that time will purchase at the applicable purchase price set forth in Section 8(a)(ii), and subject to the limitations set forth in Sections 8(a)(iv)(A), 8(a)(iv)(B) and 8(a)(iv)(C), and Section 10 hereof.
|
(ii)
|
The Company shall, in addition, return to the Participant a cash payment equal to the balance, if any, in the Participant’s account which was not used for the purchase of Stock, without interest, as promptly as practicable after the Purchase Date of any Phase, or at the election of the Committee, apply such amount to the purchase of shares in the next Phase, if the Employee is then eligible.
|
(iii)
|
The Committee may appoint a registered broker dealer to act as agent for the Company in holding and performing ministerial duties in connection with the Plan, including, but not limited to, maintaining records of Stock ownership by Participants and holding Stock in its own name for the benefit of the Participants. No trust or escrow arrangement shall be express or implied by the exercise of such duties by the agent. A Participant may, at any time, request of the agent that any shares allocated to the Participant be registered in the name of the Participant, in which event the agent shall issue a certificate for the whole number of shares in the name of the Participant and shall deliver to the Participant any cash for fractional shares, based on the then Fair Market Value of the shares on the date of issuance.
|
(iv)
|
The Participant may direct the Committee or its agent to register the Participant’s account in joint tenancy with the Participant, or to register any shares in the name of the
|
(c)
|
Unless the Committee designates otherwise, a Participant may elect to have any dividends on a Participant’s shares automatically reinvested in additional shares of Stock in lieu of receiving dividends in the form of cash. Any shares purchased through the reinvestment of dividends will be purchased on the open market. Such purchases shall be governed by the requirements of the Company’s dividend reinvestment program.
|
(d)
|
For a period beginning on the date of exercise and ending on the later of: (i) 12 months from the date of exercise or (ii) 24 months from the date of grant of the option pursuant to this Plan, each share of Stock so acquired may not, without the consent of the Committee (which consent shall be provided in a uniform and nondiscriminatory manner for similarly situated Participants) be sold, transferred (including changing the joint tenant on the Participant’s account or registered shares, the payment of the price upon the subsequent exercise of any option, or the payment of income taxes on the exercise), pledged or encumbered. The Committee may waive such restrictions with respect to Stock acquired upon the exercise of options granted or to be granted during any Phase of the Plan, either prior to or at any time subsequent to the Subscription Date of the Phase and may establish uniform rules for the transfer of such Stock during such period. During the period such shares are subject to the restrictions of this subsection (d), such shares shall be held by the transfer agent or the Company, or an appropriate legend describing the restriction and referencing the Plan shall be placed on the certificate evidencing such Stock.
|
(a)
|
A Participant may, at any time prior to six weeks before the Purchase Date of a Phase, withdraw all deductions from Pay then credited to the Participant’s account by giving written notice to the Company. Within a reasonable time upon receipt of such notice of withdrawal, all such deductions credited to the Participant’s account will be paid to the Participant, without interest, and no further payroll deductions by the Participant to this Plan will be permitted during the Phase. In such event, the option granted the Participant under that Phase of the Plan will lapse immediately. Partial withdrawals of payroll deductions hereunder may not be made. Subject to Section 9(e) below, a Participant’s withdrawal will not have any effect upon the Participant’s eligibility to participate in any succeeding Phase of the Plan or in any similar plan that may hereafter be adopted by the Company.
|
(b)
|
Notwithstanding the provisions of Section 9(a) above, if a Participant files reports pursuant to Section 16 of the Securities Exchange Act of 1934 (at the Subscription Date of a Phase or becomes obligated to file such reports during a Phase) then such a Participant shall not have the right to withdraw all or a portion of the accumulated deductions from Pay except in accordance with Sections 9(c) and (d) below.
|
(c)
|
In the event of the death of a Participant, the person or persons specified in Section 14 may give notice to the Company within 60 days of the death of the Participant but in no event later than ten business days prior to the Purchase Date of the Phase in which the death of the Participant occurs, electing to purchase the number of full and fractional shares which the accumulated payroll deductions in the account of such deceased Participant will purchase at
|
(d)
|
Upon termination of Participant’s employment for any reason other than death of the Participant, the Company shall return to the Participant, without interest, any payroll deductions credited to the Participant’s account during that Phase.
|
(e)
|
In the event the Participant’s participation is suspended under the MTS Retirement Savings Plan as a result of receiving a hardship withdrawal, the Participant shall be immediately and automatically suspended from the Plan and all payroll deductions shall be discontinued and returned to the Participant, without interest. The Participant shall again participate in the Plan as provided in Section 6(b) above.
|
(f)
|
The Committee shall be entitled to make such rules, regulations and determination as it deems appropriate under the Plan in respect of any leave of absence taken by or disability of any Participant. Without limiting the generality of the foregoing, the Committee shall be entitled to determine:
|
(i)
|
Whether or not any such leave of absence shall constitute a termination of employment for purposes of the Plan; and
|
(ii)
|
The impact, if any, of any such leave of absence on options under the Plan theretofore granted to any Participant who takes such leave of absence.
|
(g)
|
In the event a Participant is transferred to a subsidiary or affiliate of the Company that does not participate in the Plan, the Participant's accumulated payroll deductions will be refunded in full, without interest, no later than a reasonable period of time after the Participant's transfer of employment. No further payroll deductions by the Participant to the Plan will be permitted during the Phase. In such event, the option granted the Participant under that Phase of the Plan will lapse on the transfer of employment.
|
(a)
|
The maximum number of shares of Stock to be issued upon the exercise of options to be granted under the Plan shall be 750,000. Such shares may, at the election of the Board of Directors, be either shares authorized but not issued or shares acquired in the open market by the Company. Shares subject to the unexercised portion of any lapsed or expired option may again be subject to option under the Plan.
|
(b)
|
If the total number of shares of Stock for which options are to be granted for a given Phase as specified in Section 8 exceeds the number of shares then remaining available under the
|
(c)
|
The Participant (or a joint tenant named pursuant to Section 10(d) hereof) shall have no rights as a shareholder with respect to any shares subject to the Participant's option until the date ownership of such stock is registered on the records of the Company. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property), distributions or other rights for which the record date is prior to the date of such registration, except as otherwise provided in Section 12 hereof. Voting shall be permitted only with respect to whole shares so registered.
|
(d)
|
The shares of Stock to be delivered to a Participant pursuant to the exercise of an option under the Plan will be registered in the name of the Participant or, if the Participant so directs by written notice to the Committee prior to the Purchase Date of that Phase of the Plan, in the names of the Participant and one other person the Participant may designate as the Participant’s joint tenant with rights of survivorship, to the extent permitted by law.
|
(a)
|
Subject to any required action by the shareholders of the Company, the number of shares covered by each outstanding option, and the price per share thereof in each such option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Stock resulting from a subdivision or consolidation of shares or the payment of a share dividend (but only on the shares) or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company.
|
(b)
|
In the event of a change in the shares of the Company as presently constituted, which is limited to a change of all its authorized shares with par value into the same number of shares with a different par value or without par value, the shares resulting from any such change shall be deemed to be the shares within the meaning of this Plan.
|
(c)
|
To the extent that the foregoing adjustments relate to shares or securities of the Company, such adjustments shall be made by the Committee, and its determination in that respect shall be final, binding and conclusive, provided that each option granted pursuant to this Plan shall not be adjusted in a manner that causes the option to fail to continue to qualify as an option issued pursuant to an “employee stock purchase plan” within the meaning of Section 423 of the Code.
|
(d)
|
Except as hereinbefore expressly provided in this Section 12, no Participant shall have any right by reason of any subdivision or consolidation of shares of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of any class or by reason of any dissolution, liquidation, merger, or consolidation or spin-off of assets or stock of another corporation, and any issue by the Company of shares of any class, or securities
|
(a)
|
Options granted under any Phase of the Plan shall not be transferable except under the laws of descent and distribution and shall be exercisable only by the Participant during the Participant’s lifetime and after the Participant’s death only by the Participant’s beneficiary or the representative of the Participant’s estate as provided in Section 9(c) hereof.
|
(b)
|
Neither payroll deductions credited to a Participant’s account, nor any rights with regard to the exercise of an option or to receive shares of Stock under any Phase of the Plan may be assigned, transferred, pledged or otherwise disposed of in any way by the Participant. Any such attempted assignment, transfer, pledge or other disposition shall be null and void and without effect, except that the Company may, at its option, treat such act as an election to withdraw funds in accordance with Section 9.
|
(a)
|
A Participant may file a written (or if available, electronic) designation of a beneficiary who is to receive any cash credited to the Participant’s account under any Phase of the Plan in the event of such Participant’s death prior to exercise of the Participant’s option pursuant to Section 8 hereof, or to exercise the Participant’s option and become entitled to any Stock and/or cash upon such exercise in the event of the Participant’s death prior to exercise of the option pursuant to Section 8 hereof. The Participant may change the beneficiary designation at any time upon receipt of a written notice by the Company, or if available, through electronic means.
|
(b)
|
Upon the death of a Participant and upon receipt by the Company of proof deemed adequate by it of the identity and existence at the Participant’s death of a beneficiary validly designated under the Plan, the Company shall in the event of the Participant’s death, allow such beneficiary to exercise the Participant’s option pursuant to Section 9(c) if such beneficiary is living on the Purchase Date of the Phase and deliver to such beneficiary the appropriate shares of Stock and/or cash after exercise of the option. In the event there is not validly designated beneficiary under the Plan who is living at the time of the Participant’s death or in the event the option lapses, the Company shall deliver the cash credited to the account of the Participant without interest to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed to the knowledge of the Company, it may, in its discretion, deliver such cash to the spouse (or, if no surviving spouse, to any one or more children of the Participant), or if no spouse or child is known to the Company, then to such relatives of the Participant known to the Company as would be entitled to such amounts, under the laws of intestacy in the deceased Participant’s domicile as though named as the designated beneficiary hereunder. The Company will not be responsible for or be required to give effect to the disposition of any cash or Stock or the exercise of any option in accordance with any will or other testamentary disposition made by such Participant or in accordance with the provision of any law concerning intestacy, or otherwise. No designated beneficiary shall, prior to the death of a Participant by whom the Participant has been designated, acquire any interest in any Stock or in any option or in the cash credited to the Participant’s account under any Phase of the Plan.
|
(a)
|
The Employees of any Subsidiary of the Company that adopts this Plan by action of its Board of Directors with the consent of the Company, shall be entitled to participate in the Plan on the same basis as Employees of the Company, unless the Board of Directors of the Company determines otherwise. Effective as of the date of coverage of any Subsidiary, any references herein to the “Company” shall be interpreted as referring to such Subsidiary. Such a subsidiary may also be called a “Participating Subsidiary” under the Plan.
|
(b)
|
In the event that any Subsidiary, which is covered under the Plan, ceases to be a Subsidiary of the Company, the employees of such Subsidiary shall be considered to have terminated their employment for purposes of Section 9 hereof as of the date such Subsidiary ceases to be such a Subsidiary.
|
(a)
|
“Employee” means any common law employee, including an officer, of the Company or any Participating Subsidiary. Independent contractors shall not be considered Employees of the Company.
|
(b)
|
“Fair Market Value” of a share of Stock shall be the closing price of the Stock on the applicable date or the nearest prior business day on which trading occurred on the exchange on which the Stock is traded or on the Nasdaq Stock Market. If the Stock is not traded on any exchange or listed on the Nasdaq Stock Market, the Committee shall determine the Fair Market Value of a share of Stock for each valuation date in a manner acceptable under Section 423 of the Internal Revenue Code of 1986, as amended.
|
(c)
|
“Pay” means (i) the total base compensation paid in cash to a Participant by the Company and any Subsidiary, including salary, wages, commissions, overtime pay and shift premiums, plus (ii) any pre-tax contributions made by the Participant under Sections 401(k), 125 or 132(f)(4) of the Code. “Pay” shall exclude discretionary bonuses and incentive pay, including Executive Variable Compensation, Management Variable Compensation and Variable Compensation, all non-cash items, moving or relocation allowances, cost-of-living equalization payments, car allowances, tuition reimbursements, imputed income attributable to cars or life insurance, severance pay, fringe benefits, contributions or benefits received under employee benefit plans, income attributable to the exercise of options, and similar items. Except to the extent required by applicable law or as modified above or as otherwise determined by the Committee in a uniform and nondiscriminatory manner, the definition of Pay shall be interpreted and administered in a manner consistent with the definition of compensation as determined from time to time for purposes of elective deferrals under the qualified retirement plan of the Company.
|
(d)
|
“Stock” means the common stock of the Company.
|
(e)
|
“Subsidiary” means any domestic corporation defined as a subsidiary of the Company in Section 424(f) of the Internal Revenue Code of 1986, as amended.
|
(a)
|
The Plan shall not, directly or indirectly, create any right for the benefit of any Employee or class of Employees to purchase any shares of Stock under the Plan, or create in any Employee or class of Employees any right with respect to continuation of employment by the Company, and it shall not be deemed to interfere in any way with the Company’s right to terminate, or otherwise modify, an Employee’s employment at any time.
|
(b)
|
The provisions of the Plan shall, in accordance with its terms, be binding upon, and inure to the benefit of, all successors of each Employee participating in the Plan, including, without limitation, such Employee’s estate and the executors, administrators or trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy, or representative of creditors of such Employee.
|
(c)
|
As a condition of the obligations of the Company under this Plan, each Participant must, no later than the date as of which any part of the value of an option under this Plan first becomes includable as compensation in the gross income of the Participant for federal income tax purposes, pay to the Company, or make arrangements satisfactory to the Company regarding payment of, any federal, state, or local taxes of any kind required by law to be withheld with respect to such value. The Company or any Subsidiary, to the extent permitted by law, may deduct any such taxes from any payment of any kind otherwise due to the Participant. If the Committee permits, a Participant may elect by written notice to the Company to satisfy part or all of the withholding tax requirements under this Section by (i) authorizing the Company to retain from the number of shares of Stock that would otherwise be deliverable to the Participant, or (ii) delivering (including by attestation) to the Company from shares of Stock already owned by the Participant, that number of shares having an aggregate Fair Market Value equal to part or all of the tax payable by the Participant under the this Section, and in the event shares of Stock are withheld, the amount withheld will not exceed the minimum required federal, state and FICA withholding amount or such additional amount as will not adversely affect the accounting treatment of the option. Any such election will be in accordance with, and subject to, applicable tax and securities laws, regulations and rulings.
|
(d)
|
The law of the State of Minnesota will govern all matters relating to this Plan except to the extent it is superseded by the laws of the United States.
|
(e)
|
The offering of the shares hereunder shall be subject to the effecting by the Company of any registration or qualification of the shares under any federal or state law or the obtaining of the consent or approval of any governmental regulatory body which the Company shall determine, in its sole discretion, is necessary or desirable as a condition to or in connection with, the offering or the issue or purchase of the shares covered thereby. The Company shall make every reasonable effort to effect such registration or qualification or to obtain such consent or approval.
|
(f)
|
The Plan is expressly made subject to (i) the approval by shareholders of the Company, and (ii) at the Company’s election, the receipt from the Internal Revenue Service of a determination letter or ruling, in scope and content satisfactory to Company legal counsel, respecting the qualification of the Plan within the meaning of Section 423 of the Code. If the Plan is not so approved by the shareholders and if, at the election of the Company, the aforesaid determination letter or ruling from the Internal Revenue Service is not received on or before one year after the Plan’s adoption by the Board of Directors, the Plan shall not come into effect. In such case, the accumulated payroll deductions credited to the account of each Participant shall forthwith be repaid to the Participant without interest.
|
(g)
|
It is intended that the Plan and any option granted under the Plan made to a person subject to Section 16 of the Securities Exchange Act of 1934 meet all requirements of Rule 16b-3. If any provisions of the Plan or any option granted under the Plan would disqualify the Plan or such option, or would otherwise not comply with Rule 16b-3, such provision or option shall be construed or deemed amended to conform to Rule 16b-3.
|
(h)
|
Notwithstanding any provision in this Plan to the contrary, payroll deduction elections and cancellations or amendments thereto, withdrawals decisions, beneficiary designations, and any other decision or election by a Participant under this Plan may be accomplished by electronic or telephonic means, which includes but is not limited to the Internet, and which are not otherwise prohibited by law and which are in accordance with procedures and/or systems approved or arranged by the Employer or its delegates.
|
1.
|
Section 5.1(d) of the Agreement is amended to add a new sentence at the end to read as follows:
|
2.
|
Section 5.2(b) of the Agreement is amended to add a new sentence immediately before the last sentence thereof to read as follows:
|
3.
|
Section 6.5 of the Agreement is amended to delete the phrase “In the event of a Change in Control, this” and replace it with “This.”
|
4.
|
The Agreement is amended to add a new Section 6.20 at the end thereof to read as follows:
|
5.
|
Except as amended herein, the Agreement shall remain in full force and effect.
|
THE COMPANY
:
|
PCB GROUP, INC.
|
By:
/s/ Jeffrey P. Oldenkamp
|
Its: Vice President
|
|
EMPLOYEE
:
|
/s/ David T. Hore
|
DAVID T. HORE
|
(a)
|
the willful and continued failure by the Participant (other than any such failure resulting from (i) Disability, (ii) any such actual or anticipated failure after the issuance of a Notice of Termination by the Participant for Good Reason or (iii) the Company’s active or passive obstruction of the performance of the Participant’s
|
(b)
|
the conviction of the Participant by a court of competent jurisdiction for felony criminal conduct which, in the good faith opinion of the Company, would impair the Participant’s ability to perform his or her duties or impair the business reputation of the Company;
|
(c)
|
the willful engaging by the Participant in fraud or dishonesty that is demonstrably and materially injurious to the Company, monetarily or otherwise: or
|
(d)
|
a material violation by the Participant of the Company’s policies or codes of conduct.
|
(a)
|
conduct that results in the Participant’s termination for Cause as defined in Section 2.3 (or that would have resulted in termination for Cause if known by the Company prior to the termination of Participant’s employment);
|
(b)
|
conduct in violation of the MTS Employee Agreements and any similar document between the Participant and the Company;
|
(c)
|
violation of the provisions of Section 5.1 of this Plan; or
|
(d)
|
restatement of the Company’s financial statements resulting from errors, omissions or fraud by the Participant during the Participant’s employment with the Company or its Affiliates.
|
(a)
|
the Chief Executive Officer (“CEO”) of the Company or an individual who reports directly to the CEO and whose annual compensation continues to be subject to review and approval each year by the Compensation Committee of the Board of Directors; and
|
(b)
|
is not a party to a separate written agreement between the Company or an Affiliate that provides for any payment or benefit, including but not limited to severance, to the employee in connection with, and for the period following, the employee’s Separation from Service.
|
(a)
|
the assignment to the Participant of duties materially inconsistent with the Participant’s authority, duties or responsibilities with respect to the Participant’s position or any action by the Company that results in a diminution in such authority, duties or responsibilities (whether or not occurring solely as a result of the Company’s ceasing to be a publicly traded entity);
|
(b)
|
a material reduction in the Participant’s base salary;
|
(c)
|
a material reduction in the budget over which the Participant retains authority;
|
(d)
|
a change in the geographic location at which the Participant must perform services for the Company greater than 25 miles from the prior location; and
|
(e)
|
any material violation of this Plan by the Company, including but not limited to, any purported termination of the Participant’s employment that is not made pursuant to a Notice of Termination satisfying the requirements of this Plan.
|
(a)
|
the date the Participant ceases to be an Eligible Employee;
|
(b)
|
the date the Plan is amended pursuant to Section 7.1 to exclude the Participant from participation; or
|
(c)
|
the date this Plan is terminated pursuant to Section 7.2.
|
(a)
|
by the Company other than for (i) Cause, (ii) the Participant’s death or (iii) the Participant’s Disability; or
|
(b)
|
by the Participant for Good Reason.
|
(a)
|
A severance amount (the “Severance Payment”) equal to the Participant’s Multiplier times the Participant’s Annual Compensation. The Severance Payment shall be divided and paid in equal installments on each payroll pay date during the 12 month period beginning no later than 60 days after the Participant’s Date of Termination. In the event that the 60-day period in this Section 4.2 extends over two calendar years, then the first installment of the Severance Payment shall be made in the second calendar year. If the Participant should die before all Severance Payments have been paid, any payments then remaining shall cease and no further Severance Payments shall be due under this Plan.
|
(b)
|
If the Participant is eligible and applies for health continuation coverage under Code Section 4980B or other applicable law (“COBRA Coverage”), life, accident and health insurance benefits substantially similar to those that the Participant is receiving or entitled to receive immediately prior to the Notice of Termination and the Company shall subsidize the premium cost on a pre-tax basis, equal to the Company’s share of the premiums; provided however, that if the Company’s pre-tax subsidy would result in discrimination under any tax law, then the Company shall pay an amount equal to 200% of such monthly premiums as additional compensation to the Participant. The Participant shall be responsible for the payment of his or her portion of the premiums for such benefits at the same relative percentage of total premiums as the Participant paid prior to the Date of Termination. The benefit provided under this Section 4.2(b) shall continue for a period ending on the earlier of: (i) the end of the 12
th
month after the Date of Termination, or (ii) the date COBRA coverage ends (the “Benefit Continuation Period”). The cost of providing such benefits shall be in addition to (and shall not reduce) the Severance Payment. Benefits otherwise receivable by the Participant pursuant to this subsection (b) shall be reduced to the extent comparable benefits are actually received by the Participant during the Benefit Continuation Period, and any such benefits actually received by Participant shall be reported to the Company.
|
(a)
|
the payment of the Participant’s base salary as in effect at the time the Notice of Termination is given and any other form or type of compensation otherwise payable through the Date of Termination;
|
(b)
|
the right to receive all benefits payable to the Participant in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and
|
(c)
|
the right to exercise and to receive all benefits in which the Participant was vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
|
(a)
|
be effective earlier than six months after written notice of the amendment is given to each Participant; and
|
(b)
|
deprive any Participant of any Severance Payment to which he or she has vested and is entitled to under this Plan prior to the effective date of the amendment.
|
(a)
|
be effective earlier than six months after written notice of the action is given to each Participant; and
|
(b)
|
deprive any Participant of any Severance Payment to which he or she has vested and is entitled to under the Plan prior to the effective date of the action. This Plan
|
(a)
|
if a Change in Control, as defined in the Plan, shall occur, this Plan shall continue in effect until the two year anniversary of the occurrence of a Change in Control, at which time this Plan will terminate as to any Separation from Service occurring after such date;
|
(b)
|
if more than one Change in Control occurs prior to the second anniversary of the occurrence of a Change in Control, this Plan shall continue until the second anniversary of the last occurrence of a Change in Control; and
|
(c)
|
if a Separation from Service triggering the Company’s obligations to the Participant under Section 4.2 has occurred during such two-year period, the payment and provision of any benefits that vested under the Plan as a result shall continue until all benefits hereunder have been paid in full.
|
(a)
|
annual salary (before deferral of all or any portion of such salary contributed to a qualified and nonqualified deferred compensation plan and any other deductions and tax withholdings); plus
|
(b)
|
the average annual Executive Variable Compensation (“EVC”) paid to the Participant with respect to the full 3 fiscal years immediately preceding the Date of Termination or, if less, the actual number of full fiscal years the Participant has received an EVC payment; plus
|
(c)
|
except as provided below, any other type or form of compensation paid to the Participant by the Company or any Affiliate and included in the Participant’s gross income for federal tax purposes during the 12-month period ending immediately prior to the Date of Termination.
|
(a)
|
the willful and continued failure by the Participant (other than any such failure resulting from (i) the Participant’s Disability, (ii) any such actual or anticipated failure after the issuance of a Notice of Termination by the Participant for Good Reason or (iii) the Company’s active or passive obstruction of the performance of the Participant’s duties and responsibilities) to perform substantially the duties and responsibilities of the Participant’s position with the Company after a written demand for substantial performance is delivered to the Participant by the Chief Executive Officer (or in the case of the Chief Executive Officer, the Chair of the Compensation Committee) of the Company, which demand specifically identifies the manner in which the Company believes that the Participant has not substantially performed his/her duties or responsibilities;
|
(b)
|
the conviction of the Participant by a court of competent jurisdiction for felony criminal conduct which, in the good faith opinion of the Company, would impair the Participant’s ability to perform his or her duties or impair the business reputation of the Company; or
|
(c)
|
the willful engaging by the Participant in fraud or dishonesty that is demonstrably and materially injurious to the Company, monetarily or otherwise; or
|
(d)
|
a material violation by the Participant of the Company’s policies or codes of conduct.
|
(a)
|
Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary of the Company, becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the Company's then outstanding securities; or
|
(b)
|
During any period of two consecutive years after the Effective Date, the Incumbent Directors cease for any reason to constitute at least a majority of the Board of Directors; or
|
(c)
|
(i) The Company consummates a merger, consolidation, share exchange, division or other reorganization of the Company with any corporation or entity, other than an entity owned at least 80% by the Company, unless immediately after such transaction, the shareholders of the Company immediately prior to such transaction beneficially own, directly or indirectly, 51% or more of the combined voting power of the resulting entity’s outstanding voting securities as well as 51% or more of the Total Market Value of the resulting entity, or in the case of a division, 51% or more of the combined voting power of the outstanding voting securities of each entity resulting from the division as well as 51% or more of the Total Market Value of each such entity, in each case in substantially the same proportion as such shareholders owned shares of the Company prior to such transaction; (ii) the shareholders of the Company approve an agreement for the sale or disposition (in one transaction or a series of transactions) of assets of the Company, the total consideration of which is greater than 51% of the Total Market Value of the Company, or (iii) the Company adopts a plan of complete liquidation or winding‑up of the Company. For purposes of this Section 2.4(c), “Total Market Value” shall mean the aggregate market value of the Company’s or the resulting entity’s outstanding common stock (on a fully diluted basis) plus the aggregate market value of the Company’s or the resulting entity’s other outstanding equity securities as measured by the exchange rate of the transaction or by such other method as the Board determines where there is not a readily ascertainable exchange rate.
|
(a)
|
the assignment to the Participant of duties materially inconsistent with the Participant’s authority, duties or responsibilities with respect to the Participant’s position or any action by the Company that results in a diminution in such authority, duties or responsibilities (whether or not occurring solely as a result of the Company’s ceasing to be a publicly traded entity);
|
(b)
|
a material reduction in the Participant’s total target compensation (including base salary, cash incentive, and equity);
|
(c)
|
a material reduction in the budget over which the Participant retains authority;
|
(d)
|
a change in the geographic location at which the Participant must perform services for the Company greater than 25 miles from the prior location; and
|
(e)
|
any material violation of this Plan by the Company, including but not limited to, any purported termination of the Participant’s employment that is not made pursuant to a Notice of Termination satisfying the requirements of this Plan.
|
(a)
|
the date the Participant ceases to satisfy the Plan’s eligibility requirements, except where such cessation results in eligibility for a Severance Payment as provided in Article 4;
|
(b)
|
the date the Participant has a Separation from Service (with or without reasonable notice and whether voluntary or involuntary and including retirement) from the Company, except where such Separation from Service results in eligibility for a Severance Payment as provided in Article 4;
|
(c)
|
the date that the Participant receives all of the benefits due, if any, under the Plan;
|
(d)
|
the date the Plan is amended pursuant to Section 9.1 to exclude the Participant from participation; or
|
(e)
|
the date the Plan is terminated pursuant to Section 9.2.
|
(a)
|
by the Company other than for (i) Cause, (ii) the Participant’s death or (iii) the Participant’s Disability; or
|
(b)
|
by the Participant for Good Reason.
|
(a)
|
A severance payment (the “Severance Payment”) equal to the Participant’s Multiplier times the Participant's Annual Compensation. The Severance Payment shall be made in a single lump sum within 60 days after the Date of Termination; provided, however, that if the 60-day period extends over two calendar years, then the Severance Payment shall be made in the second calendar year. Payment may be made to the Participant’s estate to the extent provided in Section 2.12.
|
(b)
|
For the 18-month period after the Date of Termination (the “Benefit Continuation Period”), at its sole expense, life, disability, accident and health insurance benefits substantially similar to those that the Participant is receiving or entitled to receive immediately prior to the Notice of Termination; provided however, that if the Company’s pre-tax subsidy of the premium cost would result in discrimination under the tax laws, then the Company shall pay an amount equal to 200% of such monthly premiums as additional compensation to the Participant. The Participant shall be responsible for the payment of his or her portion of the premiums for such benefits at the same relative percentage of total premiums as the Participant paid prior to the Date of Termination. Following the end of the Benefit Continuation Period, the Participant shall be eligible for continued health coverage as required by Code Section 4980B or other applicable law (“COBRA Coverage”), as if the Participant’s qualifying event occurred as of the end of the Benefit Continuation Period, and the Participant shall pay the applicable COBRA premium during such period. The Company shall take such actions as are necessary to cause such COBRA Coverage not to be offset by the provision of benefits under this subsection (b) and to cause the period of COBRA Coverage to commence at the end of the Benefit Continuation Period. The cost of providing such benefits shall be in addition to (and shall not reduce) the Severance Payment. Benefits otherwise receivable by the Participant pursuant to this subsection (b) shall be reduced to the extent comparable benefits are actually received by the Participant
|
(c)
|
The Company shall cause to be maintained in effect for not less than six years from the date of a Change in Control (to the extent available) policies of directors’ and officers’ liability insurance of at least the same coverage as those policies maintained by the Company on the Effective Date and containing terms and conditions which are no less advantageous than those policies.
|
(a)
|
the payment of the Participant’s base salary as in effect at the time the Notice of Termination is given and any other form or type of compensation otherwise payable through the Date of Termination;
|
(b)
|
the right to receive all benefits payable to the Participant in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and
|
(c)
|
the right to exercise and to receive all rights in which the Participant was vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
|
(a)
|
be effective earlier than the first anniversary of the date the Compensation Committee takes final formal action approving such amendment; and
|
(b)
|
deprive any Participant of any Severance Payment to which he or she has vested and is entitled to under the Plan prior to the effective date of the amendment. In the event of a Change in Control, no amendment shall be effective until after the second anniversary of the Change in Control. The Company shall, as soon as possible, provide each Participant in the Plan a copy of the amendment.
|
(a)
|
be effective earlier than the one year anniversary of the date the Compensation Committee takes final formal action approving the termination; and
|
(b)
|
deprive any Participant of any Severance Payments to which he or she has vested and is entitled to under the Plan prior to the effective date of the action. The Company shall as soon as possible, provide each Participant in the Plan a copy of the written instrument terminating the Plan.
|
|
|
Fiscal Year Ended
|
||||||||||||||||||
|
|
September 29,
2012 |
|
September 28,
2013 |
|
September 27,
2014 |
|
October 3,
2015 |
|
October 1,
2016 |
||||||||||
Ratio of Earnings to Fixed Charges (1)
|
|
31.50
|
|
|
33.38
|
|
|
21.16
|
|
|
19.89
|
|
|
3.97
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reconciliation
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations before
taxes
|
|
$
|
79,780
|
|
|
$
|
79,254
|
|
|
$
|
58,443
|
|
|
$
|
59,172
|
|
|
$
|
33,512
|
|
Fixed charges
|
|
2,616
|
|
|
2,448
|
|
|
2,899
|
|
|
3,133
|
|
|
11,277
|
|
|||||
Earnings for computation
|
|
$
|
82,396
|
|
|
$
|
81,702
|
|
|
$
|
61,342
|
|
|
$
|
62,305
|
|
|
$
|
44,789
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest on indebtedness and amortization
of debt discount
|
|
849
|
|
|
591
|
|
|
1,003
|
|
|
1,204
|
|
|
8,926
|
|
|||||
Interest expense on rental expense (1/3 rent)
|
|
1,767
|
|
|
1,857
|
|
|
1,896
|
|
|
1,929
|
|
|
2,351
|
|
|||||
Total fixed charges
|
|
$
|
2,616
|
|
|
$
|
2,448
|
|
|
$
|
2,899
|
|
|
$
|
3,133
|
|
|
$
|
11,277
|
|
Lease expense
|
|
5,300
|
|
|
5,570
|
|
|
5,687
|
|
|
5,787
|
|
|
7,053
|
|
|||||
Interest income
|
|
(544
|
)
|
|
(257
|
)
|
|
(311
|
)
|
|
(409
|
)
|
|
(437
|
)
|
|||||
Interest expense
|
|
849
|
|
|
591
|
|
|
1,003
|
|
|
1,204
|
|
|
8,926
|
|
|||||
Net interest
|
|
$
|
305
|
|
|
$
|
334
|
|
|
$
|
692
|
|
|
$
|
795
|
|
|
$
|
8,489
|
|
Subsidiaries
|
|
Jurisdiction
|
Instruments & Calibration Sweden AB
|
|
Sweden
|
MTS 1, LLC
|
|
Minnesota
|
MTS 2, LLC
|
|
Minnesota
|
MTS Systems (Hong Kong), Inc.
|
|
Minnesota
|
MTS Automotive Sensors GmbH
|
|
Germany
|
MTS Holdings France, SARL
|
|
France
|
MTS Japan Ltd.
|
|
Japan
|
MTS Korea, Inc.
|
|
Republic of Korea
|
MTS Sensor Technologie GmbH and Co. KG
|
|
Germany
|
MTS Sensor Technologie und Verwaltungs-GmbH
|
|
Germany
|
MTS Sensor Technology KK
|
|
Japan
|
MTS Systems B.V.
|
|
Netherlands
|
MTS Systems Holding B.V.
|
|
Netherlands
|
MTS Systems (China) Co., Ltd.
|
|
People's Republic of China
|
MTS Systems Finance C.V.
|
|
Netherlands
|
MTS Systems GmbH
|
|
Germany
|
MTS Systems Ltd.
|
|
United Kingdom
|
MTS Systems Norden AB
|
|
Sweden
|
MTS Systems SAS
|
|
France
|
MTS Systems Srl
|
|
Italy
|
MTS Systems Switzerland GmbH
|
|
Switzerland
|
MTS Testing Solutions India Private Limited
|
|
India
|
MTS Testing Systems (Canada) Ltd.
|
|
Ontario, Canada
|
MTS Systems do Brazil (inactive)
|
|
Brazil
|
PCB Group, Inc.
|
|
New York
|
PCB Piezotronics, Inc.
|
|
New York
|
PCB Piezotronics Srl
|
|
Italy
|
PCB Piezotronics Europe GmbH
|
|
Germany
|
PCB Piezotronics Limited
|
|
United Kingdom
|
The Modal Shop, Inc.
|
|
Ohio
|
PCB Group Sales Company, Inc.
|
|
Delaware
|
3395 Walden Avenue Acquisition Corp
|
|
New York
|
DI U.S. Holdings, Inc.
|
|
New York
|
Dalimar Instruments ULC
|
|
Alberta ULC
|
PCB Piezotronics S.A.
|
|
France
|
PCB Piezotronics Sensor Technology (Beijing) Co. Ltd.
|
|
People’s Republic of China
|
Synotech Sensor and Messtechnik GmbH
|
|
Germany
|
PCB Piezotronics of North Carolina, Inc.
|
|
Delaware
|
Accumetrics, Inc.
|
|
New York
|
PCB Exports, Inc.
|
|
Delaware
|
1.
|
I have reviewed this annual report on Form 10-K of MTS Systems Corporation;
|
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.
|
Date:
|
April 10, 2017
|
/s/ JEFFREY A. GRAVES
|
|
|
Jeffrey A. Graves
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of MTS Systems Corporation;
|
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.
|
Date:
|
April 10, 2017
|
/s/ JEFFREY P. OLDENKAMP
|
|
|
Jeffrey P. Oldenkamp
|
|
|
Senior Vice President and Chief Financial Officer
|
Date:
|
April 10, 2017
|
/s/ JEFFREY A. GRAVES
|
|
|
Jeffrey A. Graves
|
|
|
President and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
April 10, 2017
|
/s/ JEFFREY P. OLDENKAMP
|
|
|
Jeffrey P. Oldenkamp
|
|
|
Senior Vice President and Chief Financial Officer
|