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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
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Minnesota
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41-0908057
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(State or other jurisdiction
of incorporation or organization)
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(I.R.S. Employer Identification No.)
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14000 Technology Drive
Eden Prairie, Minnesota
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55344
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer ☒
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company ☐
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Emerging growth company ☐
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December 29, 2018
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September 29, 2018
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(Unaudited)
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(Note)
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Assets
|
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Current assets
|
|
|
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Cash and cash equivalents
|
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$
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70,438
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$
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71,804
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Accounts receivable, net of allowance for doubtful accounts of $5,005 and $5,004, respectively
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115,384
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122,243
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Unbilled accounts receivable, net
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60,656
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70,474
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Inventories, net
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183,465
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139,109
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Prepaid expenses and other current assets
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30,085
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24,572
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Total current assets
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460,028
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428,202
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Property and equipment, net
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89,266
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90,269
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Goodwill
|
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402,152
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369,275
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Intangible assets, net
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288,076
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246,138
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Other long-term assets
|
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3,841
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2,263
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Deferred income taxes
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4,501
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3,249
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Total assets
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$
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1,247,864
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$
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1,139,396
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Liabilities and Shareholders' Equity
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Current liabilities
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Current maturities of long-term debt, net
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$
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30,462
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$
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32,738
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Accounts payable
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49,191
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47,886
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Accrued payroll and related costs
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34,223
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43,554
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Advance payments from customers
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101,367
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80,131
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Accrued warranty costs
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5,229
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5,418
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Accrued income taxes
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4,853
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4,928
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Accrued dividends
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5,319
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5,312
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Other accrued liabilities
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26,623
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19,146
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Total current liabilities
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257,267
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239,113
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Long-term debt, less current maturities, net
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435,586
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355,640
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Deferred income taxes
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50,846
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46,482
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Non-current accrued income taxes
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7,010
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6,158
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Defined benefit pension plan obligation
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11,197
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9,177
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Other long-term liabilities
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12,623
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4,894
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Total liabilities
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774,529
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661,464
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Shareholders' Equity
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Common stock, $0.25 par value; 64,000 shares authorized: 17,872 and 17,856 shares issued
and outstanding as of December 29, 2018 and September 29, 2018, respectively |
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4,468
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4,464
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Additional paid-in capital
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173,065
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171,407
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Retained earnings
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299,493
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300,585
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Accumulated other comprehensive income (loss)
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(3,691
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)
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1,476
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Total shareholders' equity
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473,335
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477,932
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Total liabilities and shareholders' equity
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$
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1,247,864
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$
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1,139,396
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Three Months Ended
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December 29,
2018 |
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December 30,
2017 |
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Revenue
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Product
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$
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175,078
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$
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169,241
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Service
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28,103
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24,921
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Total revenue
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203,181
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194,162
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Cost of Sales
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Product
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108,168
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100,494
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Service
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16,708
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15,740
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Total cost of sales
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124,876
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116,234
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Gross profit
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78,305
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77,928
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Operating expenses
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Selling and marketing
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32,089
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32,028
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General and administrative
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21,078
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20,562
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Research and development
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7,172
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8,841
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Total operating expenses
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60,339
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61,431
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Income from operations
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17,966
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16,497
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Interest expense, net
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(6,818
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)
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(6,804
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)
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Other income (expense), net
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49
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(223
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)
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Income before income taxes
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11,197
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9,470
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Income tax provision (benefit)
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696
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(23,681
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)
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Net income
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$
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10,501
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$
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33,151
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Earnings per share
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Basic
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Earnings per share
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$
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0.55
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$
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1.73
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Weighted average common shares outstanding
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19,216
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19,124
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Diluted
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Earnings per share
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$
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0.54
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$
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1.72
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Weighted average common shares outstanding
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19,556
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19,254
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Dividends declared per share
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$
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0.30
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$
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0.30
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Three Months Ended
|
||||||
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December 29,
2018 |
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December 30,
2017 |
||||
Net income
|
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$
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10,501
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|
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$
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33,151
|
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Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
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Foreign currency translation gain (loss) adjustments
|
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(1,503
|
)
|
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2,499
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|
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Derivative instruments
|
|
|
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|
|
|
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Unrealized net gain (loss)
|
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(1,416
|
)
|
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1,030
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|
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Net (gain) loss reclassified to earnings
|
|
(914
|
)
|
|
103
|
|
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Defined benefit pension plan
|
|
|
|
|
|
|
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Unrealized net gain (loss)
|
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(1,545
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)
|
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370
|
|
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Net (gain) loss reclassified to earnings
|
|
96
|
|
|
91
|
|
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Currency exchange rate gain (loss)
|
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115
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|
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(87
|
)
|
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Other comprehensive income (loss)
|
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(5,167
|
)
|
|
4,006
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|
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Comprehensive income (loss)
|
|
$
|
5,334
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|
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$
|
37,157
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|
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Three Months Ended December 29, 2018
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Common Stock
|
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Additional
Paid-In
Capital
|
|
|
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Accumulated
Other
Comprehensive
Income (Loss)
|
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Total
Shareholders'
Equity
|
|||||||||||||
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Shares
Issued
|
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Amount
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|
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Retained
Earnings
|
|
|
||||||||||||||
Balance, September 29, 2018
|
|
17,856
|
|
|
$
|
4,464
|
|
|
$
|
171,407
|
|
|
$
|
300,585
|
|
|
$
|
1,476
|
|
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$
|
477,932
|
|
Total comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,501
|
|
|
(5,167
|
)
|
|
5,334
|
|
|||||
Cumulative effect of accounting change
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,227
|
)
|
|
—
|
|
|
(6,227
|
)
|
|||||
Exercise of stock options
|
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|||||
Stock-based compensation
|
|
23
|
|
|
6
|
|
|
1,974
|
|
|
—
|
|
|
—
|
|
|
1,980
|
|
|||||
Common stock purchased and retired
|
|
(7
|
)
|
|
(2
|
)
|
|
(354
|
)
|
|
—
|
|
|
—
|
|
|
(356
|
)
|
|||||
Dividends, $0.30 per share
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,366
|
)
|
|
—
|
|
|
(5,366
|
)
|
|||||
Balance, December 29, 2018
|
|
17,872
|
|
|
$
|
4,468
|
|
|
$
|
173,065
|
|
|
$
|
299,493
|
|
|
$
|
(3,691
|
)
|
|
$
|
473,335
|
|
|
|
Three Months Ended December 30, 2017
|
|||||||||||||||||||||
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Shareholders'
Equity
|
|||||||||||||
|
|
Shares
Issued
|
|
Amount
|
|
|
Retained
Earnings
|
|
|
||||||||||||||
Balance, September 30, 2017
|
|
17,760
|
|
|
$
|
4,440
|
|
|
$
|
163,632
|
|
|
$
|
261,258
|
|
|
$
|
(553
|
)
|
|
$
|
428,777
|
|
Total comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,151
|
|
|
4,006
|
|
|
37,157
|
|
|||||
Cumulative effect of accounting change
|
|
—
|
|
|
—
|
|
|
(33
|
)
|
|
33
|
|
|
—
|
|
|
—
|
|
|||||
Exercise of stock options
|
|
4
|
|
|
1
|
|
|
211
|
|
|
—
|
|
|
—
|
|
|
212
|
|
|||||
Stock-based compensation
|
|
30
|
|
|
7
|
|
|
1,508
|
|
|
—
|
|
|
—
|
|
|
1,515
|
|
|||||
Common stock purchased and retired
|
|
(14
|
)
|
|
(3
|
)
|
|
(741
|
)
|
|
—
|
|
|
—
|
|
|
(744
|
)
|
|||||
Dividends, $.30 per share
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,337
|
)
|
|
—
|
|
|
(5,337
|
)
|
|||||
Balance, December 30, 2017
|
|
17,780
|
|
|
$
|
4,445
|
|
|
$
|
164,577
|
|
|
$
|
289,105
|
|
|
$
|
3,453
|
|
|
$
|
461,580
|
|
|
|
Three Months Ended
|
||||||
|
|
December 29, 2018
|
|
December 30, 2017
|
||||
Cash Flows from Operating Activities
|
|
|
|
|
|
|
||
Net income
|
|
$
|
10,501
|
|
|
$
|
33,151
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities
|
|
|
|
|
|
|
||
Stock-based compensation
|
|
1,794
|
|
|
1,622
|
|
||
Fair value adjustment to acquired inventory
|
|
445
|
|
|
—
|
|
||
Net periodic pension benefit cost
|
|
292
|
|
|
292
|
|
||
Depreciation and amortization
|
|
8,960
|
|
|
8,736
|
|
||
(Gain) loss on sale or disposal of property and equipment
|
|
161
|
|
|
67
|
|
||
Amortization of debt issuance costs
|
|
1,060
|
|
|
1,310
|
|
||
Deferred income taxes
|
|
(1,258
|
)
|
|
(30,352
|
)
|
||
Bad debt provision (recovery), net
|
|
136
|
|
|
432
|
|
||
Changes in operating assets and liabilities
|
|
|
|
|
|
|
||
Accounts receivable and unbilled accounts receivable
|
|
9,083
|
|
|
7,248
|
|
||
Inventories, net
|
|
(15,788
|
)
|
|
(5,498
|
)
|
||
Prepaid expenses
|
|
(2,288
|
)
|
|
(3,810
|
)
|
||
Accounts payable
|
|
(2,803
|
)
|
|
1,167
|
|
||
Accrued payroll and related costs
|
|
(10,759
|
)
|
|
(13,929
|
)
|
||
Advance payments from customers
|
|
3,265
|
|
|
2,947
|
|
||
Accrued warranty costs
|
|
(185
|
)
|
|
(190
|
)
|
||
Other assets and liabilities
|
|
8,015
|
|
|
6,030
|
|
||
Net Cash Provided by (Used in) Operating Activities
|
|
10,631
|
|
|
9,223
|
|
||
Cash Flows from Investing Activities
|
|
|
|
|
|
|
||
Purchases of property and equipment
|
|
(3,773
|
)
|
|
(2,801
|
)
|
||
Proceeds from sale of property and equipment
|
|
10
|
|
|
69
|
|
||
Purchases of business, net of acquired cash
|
|
(78,032
|
)
|
|
—
|
|
||
Other
|
|
(285
|
)
|
|
—
|
|
||
Net Cash Provided by (Used in) Investing Activities
|
|
(82,080
|
)
|
|
(2,732
|
)
|
||
Cash Flows from Financing Activities
|
|
|
|
|
|
|
||
Proceeds from issuance of long-term debt
|
|
80,391
|
|
|
—
|
|
||
Payment of long-term debt
|
|
(1,286
|
)
|
|
(19,667
|
)
|
||
Payment of debt component of tangible equity units
|
|
(2,388
|
)
|
|
(2,230
|
)
|
||
Payment of debt issuance costs for revolving credit facility
|
|
(445
|
)
|
|
—
|
|
||
Receipts under short-term borrowings
|
|
25,000
|
|
|
5,000
|
|
||
Payments under short-term borrowings
|
|
(25,000
|
)
|
|
—
|
|
||
Cash dividends
|
|
(5,359
|
)
|
|
(5,330
|
)
|
||
Proceeds from exercise of stock options and employee stock purchase plan
|
|
38
|
|
|
212
|
|
||
Payments to purchase and retire common stock
|
|
(356
|
)
|
|
(744
|
)
|
||
Net Cash Provided by (Used in) Financing Activities
|
|
70,595
|
|
|
(22,759
|
)
|
||
Effect of Exchange Rate Changes on Cash and Cash Equivalents
|
|
(512
|
)
|
|
1,606
|
|
||
Cash and Cash Equivalents
|
|
|
|
|
|
|
||
Increase (decrease) during the period
|
|
(1,366
|
)
|
|
(14,662
|
)
|
||
Balance, beginning of period
|
|
71,804
|
|
|
108,733
|
|
||
Balance, end of period
|
|
$
|
70,438
|
|
|
$
|
94,071
|
|
|
|
|
|
|
||||
Supplemental Disclosures
|
|
|
|
|
|
|
||
Cash paid during the period for
|
|
|
|
|
|
|
||
Interest
|
|
$
|
5,292
|
|
|
$
|
5,784
|
|
Income taxes
|
|
2,006
|
|
|
2,323
|
|
||
Non-cash investing and financing activities
|
|
|
|
|
||||
Dividends declared not yet paid
|
|
5,319
|
|
|
5,285
|
|
Consolidated Statements of Income
|
|
Three Months Ended December 29, 2018
|
||||||||||
|
|
As Reported
|
|
Balances without Adoption of ASC 606
|
|
Effect of Change
|
||||||
Revenue
|
|
$
|
203,181
|
|
|
$
|
198,438
|
|
|
$
|
4,743
|
|
Cost of sales
|
|
124,876
|
|
|
120,420
|
|
|
4,456
|
|
|||
Gross profit
|
|
78,305
|
|
|
78,018
|
|
|
287
|
|
|||
Selling and marketing
|
|
32,089
|
|
|
32,252
|
|
|
(163
|
)
|
|||
Income tax provision (benefit)
|
|
696
|
|
|
615
|
|
|
81
|
|
|||
Net income
|
|
10,501
|
|
|
10,132
|
|
|
369
|
|
|||
|
|
|
|
|
|
|
||||||
Consolidated Balance Sheets
|
|
December 29, 2018
|
||||||||||
|
|
As Reported
|
|
Balances without Adoption of ASC 606
|
|
Effect of Change
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Accounts receivable, net
|
|
$
|
115,384
|
|
|
$
|
123,814
|
|
|
$
|
(8,430
|
)
|
Unbilled accounts receivable, net
|
|
60,656
|
|
|
59,901
|
|
|
755
|
|
|||
Inventories, net
|
|
183,465
|
|
|
164,298
|
|
|
19,167
|
|
|||
Prepaid expenses and other current assets
|
|
30,085
|
|
|
25,933
|
|
|
4,152
|
|
|||
Other long-term assets
|
|
3,841
|
|
|
2,845
|
|
|
996
|
|
|||
Deferred income taxes
|
|
4,501
|
|
|
3,856
|
|
|
645
|
|
|||
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
||||||
Advance payments from customers
|
|
101,367
|
|
|
87,148
|
|
|
14,219
|
|
|||
Accrued income taxes
|
|
4,853
|
|
|
5,196
|
|
|
(343
|
)
|
|||
Other accrued liabilities
|
|
26,623
|
|
|
17,891
|
|
|
8,732
|
|
|||
Deferred income taxes
|
|
50,846
|
|
|
52,074
|
|
|
(1,228
|
)
|
|||
Other long-term liabilities
|
|
12,623
|
|
|
10,871
|
|
|
1,752
|
|
|||
Accumulated other comprehensive income (loss)
|
|
(3,691
|
)
|
|
(3,702
|
)
|
|
11
|
|
|||
Retained earnings
|
|
299,493
|
|
|
305,351
|
|
|
(5,858
|
)
|
Consolidated Balance Sheets
|
|
|
||||||||||
|
|
Balance at September 29, 2018
|
|
Adjustments due to ASC 606 Adoption
|
|
Balance at September 30, 2018
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Accounts receivable, net
|
|
$
|
122,243
|
|
|
$
|
(4,481
|
)
|
|
$
|
117,762
|
|
Unbilled accounts receivable, net
|
|
70,474
|
|
|
(8,002
|
)
|
|
62,472
|
|
|||
Inventories, net
|
|
139,109
|
|
|
16,727
|
|
|
155,836
|
|
|||
Prepaid expenses and other current assets
|
|
24,572
|
|
|
4,651
|
|
|
29,223
|
|
|||
Other long-term assets
|
|
2,263
|
|
|
1,060
|
|
|
3,323
|
|
|||
Deferred income taxes
|
|
3,249
|
|
|
643
|
|
|
3,892
|
|
|||
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
||||||
Advance payments from customers
|
|
80,131
|
|
|
13,568
|
|
|
93,699
|
|
|||
Other accrued liabilities
|
|
19,146
|
|
|
(2,504
|
)
|
|
16,642
|
|
|||
Deferred income taxes
|
|
46,482
|
|
|
(1,228
|
)
|
|
45,254
|
|
|||
Other long-term liabilities
|
|
4,894
|
|
|
6,989
|
|
|
11,883
|
|
|||
Retained earnings
|
|
300,585
|
|
|
(6,227
|
)
|
|
294,358
|
|
|
|
Three Months Ended December 29, 2018
|
||||||||||||||
|
|
Test & Simulation
|
|
Sensors
|
|
Intersegment
|
|
Total
|
||||||||
Sales type
|
|
|
|
|
|
|
|
|
||||||||
Product
|
|
$
|
98,907
|
|
|
$
|
76,500
|
|
|
$
|
(329
|
)
|
|
$
|
175,078
|
|
Service
|
|
26,653
|
|
|
1,450
|
|
|
—
|
|
|
28,103
|
|
||||
Total revenue
|
|
$
|
125,560
|
|
|
$
|
77,950
|
|
|
$
|
(329
|
)
|
|
$
|
203,181
|
|
|
|
|
|
|
|
|
|
|
||||||||
Timing of recognition
|
|
|
|
|
|
|
|
|
||||||||
Point-in-time
|
|
$
|
79,619
|
|
|
$
|
77,950
|
|
|
$
|
(329
|
)
|
|
$
|
157,240
|
|
Over time
|
|
45,941
|
|
|
—
|
|
|
—
|
|
|
45,941
|
|
||||
Total revenue
|
|
$
|
125,560
|
|
|
$
|
77,950
|
|
|
$
|
(329
|
)
|
|
$
|
203,181
|
|
|
|
|
|
|
|
|
|
|
||||||||
Geographic market
|
|
|
|
|
|
|
|
|
||||||||
Americas
|
|
$
|
39,489
|
|
|
$
|
37,729
|
|
|
$
|
(329
|
)
|
|
$
|
76,889
|
|
Europe
|
|
28,627
|
|
|
25,348
|
|
|
—
|
|
|
53,975
|
|
||||
Asia
|
|
57,444
|
|
|
14,873
|
|
|
—
|
|
|
72,317
|
|
||||
Total revenue
|
|
$
|
125,560
|
|
|
$
|
77,950
|
|
|
$
|
(329
|
)
|
|
$
|
203,181
|
|
|
|
December 29,
2018 |
|
September 29,
2018 |
||||
Contract assets
|
|
$
|
60,656
|
|
|
$
|
70,474
|
|
Contract liabilities
|
|
109,225
|
|
|
80,131
|
|
|
|
Contract Assets
|
||
Balance, September 29, 2018
|
|
$
|
70,474
|
|
Cumulative transition adjustment upon adoption
|
|
(8,002
|
)
|
|
Changes in estimated stage of completion
|
|
33,096
|
|
|
Transfers to accounts receivable, net
|
|
(36,642
|
)
|
|
Acquisitions
1
|
|
749
|
|
|
Other
|
|
981
|
|
|
Balance, December 29, 2018
|
|
$
|
60,656
|
|
|
|
|
||
|
|
Contract Liabilities
|
||
Balance, September 29, 2018
|
|
$
|
80,131
|
|
Cumulative transition adjustment upon adoption
|
|
20,557
|
|
|
Revenue recognized included in balance at beginning of period
|
|
(40,511
|
)
|
|
Increases due to payments received, excluding amounts recognized as revenue during period
|
|
43,383
|
|
|
Acquisitions
1
|
|
5,561
|
|
|
Other
|
|
104
|
|
|
Balance, December 29, 2018
|
|
$
|
109,225
|
|
|
|
December 29,
2018 |
|
September 29,
2018 |
||||
Components, assemblies and parts
|
|
$
|
106,496
|
|
|
$
|
93,020
|
|
Customer projects in various stages of completion
|
|
66,466
|
|
|
35,675
|
|
||
Finished goods
|
|
10,503
|
|
|
10,414
|
|
||
Total inventories, net
|
|
$
|
183,465
|
|
|
$
|
139,109
|
|
|
|
Three Months Ended
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
Beginning accrued warranty costs
|
|
$
|
5,418
|
|
|
$
|
6,018
|
|
Warranty claims
|
|
(2,892
|
)
|
|
(1,175
|
)
|
||
Warranty provisions
|
|
2,707
|
|
|
985
|
|
||
Adjustments to preexisting warranties
|
|
—
|
|
|
—
|
|
||
Currency translation
|
|
(4
|
)
|
|
4
|
|
||
Ending accrued warranty costs
|
|
$
|
5,229
|
|
|
$
|
5,832
|
|
|
|
December 29,
2018 |
|
September 29,
2018 |
||||
Land and improvements
|
|
$
|
2,881
|
|
|
$
|
2,881
|
|
Buildings and improvements
|
|
58,750
|
|
|
58,880
|
|
||
Machinery and equipment
|
|
207,275
|
|
|
203,647
|
|
||
Assets held under capital leases
|
|
2,796
|
|
|
2,815
|
|
||
Total property and equipment
|
|
271,702
|
|
|
268,223
|
|
||
Less: Accumulated depreciation
|
|
(182,436
|
)
|
|
(177,954
|
)
|
||
Total property and equipment, net
|
|
$
|
89,266
|
|
|
$
|
90,269
|
|
|
|
Test & Simulation
|
|
Sensors
|
|
Total
|
||||||
Balance, September 29, 2018
|
|
$
|
24,631
|
|
|
$
|
344,644
|
|
|
$
|
369,275
|
|
Acquisitions
1
|
|
32,791
|
|
|
—
|
|
|
32,791
|
|
|||
Currency translation
|
|
100
|
|
|
(14
|
)
|
|
86
|
|
|||
Balance, December 29, 2018
|
|
$
|
57,522
|
|
|
$
|
344,630
|
|
|
$
|
402,152
|
|
|
|
December 29, 2018
|
||||||||||||
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
|
Weighted
Average
Useful Life (in Years)
|
||||||
Software development costs
2
|
|
$
|
33,478
|
|
|
$
|
(15,859
|
)
|
|
$
|
17,619
|
|
|
6.4
|
Technology and patents
|
|
59,079
|
|
|
(13,005
|
)
|
|
46,074
|
|
|
14.9
|
|||
Trademarks and trade names
|
|
12,688
|
|
|
(3,162
|
)
|
|
9,526
|
|
|
20.5
|
|||
Customer lists
|
|
178,655
|
|
|
(25,957
|
)
|
|
152,698
|
|
|
15.7
|
|||
Land-use rights
|
|
2,332
|
|
|
(791
|
)
|
|
1,541
|
|
|
26.0
|
|||
Other
|
|
3,205
|
|
|
(87
|
)
|
|
3,118
|
|
|
4.0
|
|||
Trade names
|
|
57,500
|
|
|
—
|
|
|
57,500
|
|
|
Indefinite
|
|||
Total intangible assets
|
|
$
|
346,937
|
|
|
$
|
(58,861
|
)
|
|
$
|
288,076
|
|
|
14.6
|
|
|
September 29, 2018
|
||||||||||||
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
|
Weighted
Average
Useful Life (in Years)
|
||||||
Software development costs
2
|
|
$
|
31,251
|
|
|
$
|
(15,860
|
)
|
|
$
|
15,391
|
|
|
6.5
|
Technology and patents
|
|
46,405
|
|
|
(12,188
|
)
|
|
34,217
|
|
|
14.9
|
|||
Trademarks and trade names
|
|
6,754
|
|
|
(2,987
|
)
|
|
3,767
|
|
|
25.4
|
|||
Customer lists
|
|
156,971
|
|
|
(23,314
|
)
|
|
133,657
|
|
|
15.8
|
|||
Land-use rights
|
|
2,336
|
|
|
(730
|
)
|
|
1,606
|
|
|
26.0
|
|||
Trade names
|
|
57,500
|
|
|
—
|
|
|
57,500
|
|
|
Indefinite
|
|||
Total intangible assets
|
|
$
|
301,217
|
|
|
$
|
(55,079
|
)
|
|
$
|
246,138
|
|
|
14.8
|
2
|
The gross carrying amount of software development costs as of
December 29, 2018
and
September 29, 2018
includes
$17,619
and
$15,391
, respectively, of intangible assets not yet placed in service.
|
|
|
Three Months Ended
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
Amortization expense
|
|
$
|
3,816
|
|
|
$
|
3,479
|
|
|
Amortization Expense
|
||
Remainder of 2019
|
$
|
12,794
|
|
2020
|
16,779
|
|
|
2021
|
17,784
|
|
|
2022
|
18,607
|
|
|
2023
|
17,817
|
|
|
2024
|
17,465
|
|
|
Thereafter
|
129,330
|
|
•
|
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.
|
|
|
December 29, 2018
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Currency contracts
1
|
|
$
|
—
|
|
|
$
|
405
|
|
|
$
|
—
|
|
|
$
|
405
|
|
Interest rate swaps
2
|
|
—
|
|
|
4,889
|
|
|
—
|
|
|
4,889
|
|
||||
Total assets
|
|
—
|
|
|
5,294
|
|
|
—
|
|
|
5,294
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Currency contracts
1
|
|
—
|
|
|
758
|
|
|
—
|
|
|
758
|
|
||||
Total liabilities
|
|
$
|
—
|
|
|
$
|
758
|
|
|
$
|
—
|
|
|
$
|
758
|
|
|
|
September 29, 2018
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Currency contracts
1
|
|
$
|
—
|
|
|
$
|
1,080
|
|
|
$
|
—
|
|
|
$
|
1,080
|
|
Interest rate swaps
2
|
|
—
|
|
|
7,411
|
|
|
—
|
|
|
7,411
|
|
||||
Total assets
|
|
—
|
|
|
8,491
|
|
|
—
|
|
|
8,491
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Currency contracts
1
|
|
—
|
|
|
173
|
|
|
—
|
|
|
173
|
|
||||
Total liabilities
|
|
$
|
—
|
|
|
$
|
173
|
|
|
$
|
—
|
|
|
$
|
173
|
|
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 8 for additional information on derivative financial instruments.
|
2
|
Based on London Interbank Offered Rate (LIBOR) and spot rates. Carrying amount of the financial asset is equal to the fair value. See Note 8 for additional information on derivative financial instruments.
|
|
|
December 29, 2018
|
||||||||||||||||||
|
|
Carrying
Value |
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Debt component of tangible equity units
1
|
|
$
|
4,902
|
|
|
$
|
4,532
|
|
|
$
|
—
|
|
|
$
|
4,532
|
|
|
$
|
—
|
|
Tranche B term loan
2
|
|
390,266
|
|
|
378,558
|
|
|
—
|
|
|
378,558
|
|
|
—
|
|
|||||
Total debt
|
|
$
|
395,168
|
|
|
$
|
383,090
|
|
|
$
|
—
|
|
|
$
|
383,090
|
|
|
$
|
—
|
|
|
|
September 29, 2018
|
||||||||||||||||||
|
|
Carrying
Value |
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Debt component of tangible equity units
1
|
|
$
|
7,290
|
|
|
$
|
8,626
|
|
|
$
|
—
|
|
|
$
|
8,626
|
|
|
$
|
—
|
|
Tranche B term loan
2
|
|
391,416
|
|
|
395,330
|
|
|
—
|
|
|
395,330
|
|
|
—
|
|
|||||
Total debt
|
|
$
|
398,706
|
|
|
$
|
403,956
|
|
|
$
|
—
|
|
|
$
|
403,956
|
|
|
$
|
—
|
|
1
|
The fair value of the
8.75%
tangible equity units (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 13 for additional information on the TEUs.
|
2
|
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 9 for additional information on debt instruments.
|
|
|
December 29, 2018
|
||||||
|
|
Prepaid Expenses
and Other
Current Assets
|
|
Other Accrued
Liabilities
|
||||
Designated hedge derivatives
|
|
|
|
|
|
|
||
Cash flow derivatives
|
|
$
|
405
|
|
|
$
|
170
|
|
Interest rate swaps
|
|
4,889
|
|
|
—
|
|
||
Total designated hedge derivatives
|
|
5,294
|
|
|
170
|
|
||
Undesignated hedge derivatives
|
|
|
|
|
|
|
||
Balance sheet derivatives
|
|
—
|
|
|
588
|
|
||
Total hedge derivatives
|
|
$
|
5,294
|
|
|
$
|
758
|
|
|
|
September 29, 2018
|
||||||
|
|
Prepaid Expenses
and Other
Current Assets
|
|
Other Accrued
Liabilities
|
||||
Designated hedge derivatives
|
|
|
|
|
|
|
||
Cash flow derivatives
|
|
$
|
989
|
|
|
$
|
173
|
|
Interest rate swaps
|
|
7,411
|
|
|
—
|
|
||
Total designated hedge derivatives
|
|
8,400
|
|
|
173
|
|
||
Undesignated hedge derivatives
|
|
|
|
|
|
|
||
Balance sheet derivatives
|
|
91
|
|
|
—
|
|
||
Total hedge derivatives
|
|
$
|
8,491
|
|
|
$
|
173
|
|
|
|
Gross
Recognized
Amount
|
|
Gross
Offset
Amount
|
|
Net
Amount
Presented
|
|
Derivatives
Subject to
Offset
|
|
Cash
Collateral
Received
|
|
Net
Amount
|
||||||||||||
December 29, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets
|
|
$
|
5,294
|
|
|
$
|
—
|
|
|
$
|
5,294
|
|
|
$
|
(169
|
)
|
|
$
|
—
|
|
|
$
|
5,125
|
|
Liabilities
|
|
170
|
|
|
—
|
|
|
170
|
|
|
(169
|
)
|
|
—
|
|
|
1
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
September 29, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Assets
|
|
$
|
8,400
|
|
|
$
|
—
|
|
|
$
|
8,400
|
|
|
$
|
(173
|
)
|
|
$
|
—
|
|
|
$
|
8,227
|
|
Liabilities
|
|
173
|
|
|
—
|
|
|
173
|
|
|
(173
|
)
|
|
—
|
|
|
—
|
|
|
|
Three Months Ended
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
Beginning unrealized net gain (loss) in AOCI
|
|
$
|
672
|
|
|
$
|
(443
|
)
|
Net (gain) loss reclassified into revenue
|
|
(585
|
)
|
|
158
|
|
||
Net gain (loss) recognized in OCI
|
|
127
|
|
|
(159
|
)
|
||
Ending unrealized net gain (loss) in AOCI
|
|
$
|
214
|
|
|
$
|
(444
|
)
|
|
|
Three Months Ended
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
Beginning unrealized net gain (loss) in AOCI
|
|
$
|
7,411
|
|
|
$
|
3,499
|
|
Net (gain) loss reclassified into interest expense
|
|
(584
|
)
|
|
(19
|
)
|
||
Net gain (loss) recognized in OCI
|
|
(1,938
|
)
|
|
1,547
|
|
||
Ending unrealized net gain (loss) in AOCI
|
|
$
|
4,889
|
|
|
$
|
5,027
|
|
|
|
Three Months Ended
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
Net gain (loss) recognized in other income (expense), net
|
|
$
|
7
|
|
|
$
|
(179
|
)
|
|
|
December 29,
2018 |
|
September 29,
2018 |
||||
Long-term debt
|
|
|
|
|
||||
Tranche B term loan, 1.00% amortizing per year, maturing July 5, 2023
|
|
$
|
390,266
|
|
|
$
|
391,416
|
|
Revolving credit facility, non-current portion, expiring July 5, 2022
|
|
80,391
|
|
|
—
|
|
||
Tangible equity units, 8.75% coupon, maturing July 1, 2019
1
|
|
4,902
|
|
|
7,290
|
|
||
Capital lease obligations
|
|
1,846
|
|
|
2,000
|
|
||
Total long-term debt
|
|
477,405
|
|
|
400,706
|
|
||
Less: Unamortized underwriting discounts, commissions and other expenses
|
|
(7,766
|
)
|
|
(8,623
|
)
|
||
Less: Current maturities of tranche B term loan debt
2, 3
|
|
(28,600
|
)
|
|
(28,600
|
)
|
||
Less: Current maturities of TEU debt
2
|
|
(4,902
|
)
|
|
(7,290
|
)
|
||
Less: Current maturities of capital lease obligations
2
|
|
(551
|
)
|
|
(553
|
)
|
||
Total long-term debt, less current maturities, net
|
|
$
|
435,586
|
|
|
$
|
355,640
|
|
1
|
See Note 13 for additional information on our TEUs issued in the third quarter of fiscal year 2016.
|
2
|
In addition to the current maturities above, current maturities of long-term debt, net in the Consolidated Balance Sheets includes the current portion of unamortized underwriting discounts, commissions and other expenses of
$3,591
and
$3,705
as of
December 29, 2018
and
September 29, 2018
, respectively.
|
3
|
As of
December 29, 2018
and
September 29, 2018
, current maturities of tranche B term loan consist of the
1%
annual payment and the calculated or estimated required annual Excess Cash Flow payment as defined below, as well as planned prepayments.
|
|
|
Notional Amount
|
|
|
October 3, 2019
|
|
$
|
180,000
|
|
October 3, 2020
|
|
125,000
|
|
|
April 3, 2021
|
|
—
|
|
|
|
Three Months Ended
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
Service cost
|
|
$
|
322
|
|
|
$
|
318
|
|
Interest cost
|
|
155
|
|
|
159
|
|
||
Expected return on plan assets
|
|
(322
|
)
|
|
(315
|
)
|
||
Net amortization and deferral
|
|
137
|
|
|
130
|
|
||
Net periodic benefit cost
|
|
$
|
292
|
|
|
$
|
292
|
|
|
Equity Component
|
|
Debt Component
|
|
Total
|
||||||
Fair value price per TEU
1
|
$
|
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
2
|
(475
|
)
|
|
(149
|
)
|
|
(624
|
)
|
|||
Issuance of TEUs, net
|
$
|
84,511
|
|
|
$
|
26,415
|
|
|
$
|
110,926
|
|
1
|
The fair value price allocation between equity and debt for each TEU was determined using a discounted cash flow model.
|
2
|
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
;
|
•
|
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.
|
|
|
Three Months Ended
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
Net income
|
|
$
|
10,501
|
|
|
$
|
33,151
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding
|
|
19,216
|
|
|
19,124
|
|
||
Effect of dilutive securities
|
|
|
|
|
||||
Stock-based compensation
|
|
148
|
|
|
130
|
|
||
Tangible equity units
|
|
192
|
|
|
—
|
|
||
Weighted average dilutive common shares outstanding
|
|
19,556
|
|
|
19,254
|
|
||
|
|
|
|
|
||||
Earnings per share
|
|
|
|
|
|
|
||
Basic
|
|
$
|
0.55
|
|
|
$
|
1.73
|
|
Diluted
|
|
0.54
|
|
|
1.72
|
|
|
|
Three Months Ended
|
||||||||||
|
|
December 29, 2018
|
||||||||||
|
|
Pre-tax
|
|
Tax
|
|
Net
|
||||||
Foreign currency translation gain (loss) adjustments
|
|
$
|
(1,503
|
)
|
|
$
|
—
|
|
|
$
|
(1,503
|
)
|
Derivative instruments
|
|
|
|
|
|
|
|
|
|
|||
Unrealized net gain (loss)
|
|
(1,811
|
)
|
|
395
|
|
|
(1,416
|
)
|
|||
Net (gain) loss reclassified to earnings
|
|
(1,169
|
)
|
|
255
|
|
|
(914
|
)
|
|||
Defined benefit pension plan
|
|
|
|
|
|
|
|
|
|
|||
Unrealized net gain (loss)
|
|
(2,213
|
)
|
|
668
|
|
|
(1,545
|
)
|
|||
Net (gain) loss reclassified to earnings
|
|
137
|
|
|
(41
|
)
|
|
96
|
|
|||
Currency exchange rate gain (loss)
|
|
115
|
|
|
—
|
|
|
115
|
|
|||
Other comprehensive income (loss)
|
|
$
|
(6,444
|
)
|
|
$
|
1,277
|
|
|
$
|
(5,167
|
)
|
|
|
Three Months Ended
|
||||||||||
|
|
December 30, 2017
|
||||||||||
|
|
Pre-tax
|
|
Tax
|
|
Net
|
||||||
Foreign currency translation gain (loss) adjustments
|
|
$
|
2,499
|
|
|
$
|
—
|
|
|
$
|
2,499
|
|
Derivative instruments
|
|
|
|
|
|
|
|
|
|
|||
Unrealized net gain (loss)
|
|
1,389
|
|
|
(359
|
)
|
|
1,030
|
|
|||
Net (gain) loss reclassified to earnings
|
|
139
|
|
|
(36
|
)
|
|
103
|
|
|||
Defined benefit pension plan
|
|
|
|
|
|
|
|
|
|
|||
Unrealized net gain (loss)
|
|
530
|
|
|
(160
|
)
|
|
370
|
|
|||
Net (gain) loss reclassified to earnings
|
|
130
|
|
|
(39
|
)
|
|
91
|
|
|||
Currency exchange rate gain (loss)
|
|
(87
|
)
|
|
—
|
|
|
(87
|
)
|
|||
Other comprehensive income (loss)
|
|
$
|
4,600
|
|
|
$
|
(594
|
)
|
|
$
|
4,006
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
December 29, 2018
|
||||||||||||||
|
|
Adjustments
|
||||||||||||||
|
|
Foreign
Currency
Translation
|
|
Unrealized
Derivative
Instrument
|
|
Defined
Benefit
Pension Plan
|
|
Total
|
||||||||
Beginning balance
|
|
$
|
1,772
|
|
|
$
|
6,320
|
|
|
$
|
(6,616
|
)
|
|
$
|
1,476
|
|
Other comprehensive net gain (loss) reclassifications
|
|
(1,503
|
)
|
|
(1,416
|
)
|
|
(1,430
|
)
|
|
(4,349
|
)
|
||||
Net (gain) loss reclassified to earnings
|
|
—
|
|
|
(914
|
)
|
|
96
|
|
|
(818
|
)
|
||||
Other comprehensive income (loss)
|
|
(1,503
|
)
|
|
(2,330
|
)
|
|
(1,334
|
)
|
|
(5,167
|
)
|
||||
Ending balance
|
|
$
|
269
|
|
|
$
|
3,990
|
|
|
$
|
(7,950
|
)
|
|
$
|
(3,691
|
)
|
|
|
Three Months Ended
|
||||||||||||||
|
|
December 30, 2017
|
||||||||||||||
|
|
Adjustments
|
||||||||||||||
|
|
Foreign
Currency Translation |
|
Unrealized
Derivative Instrument |
|
Defined
Benefit Pension Plan |
|
Total
|
||||||||
Beginning balance
|
|
$
|
3,946
|
|
|
$
|
1,953
|
|
|
$
|
(6,452
|
)
|
|
$
|
(553
|
)
|
Other comprehensive net gain (loss) reclassifications
|
|
2,499
|
|
|
1,030
|
|
|
283
|
|
|
3,812
|
|
||||
Net (gain) loss reclassified to earnings
|
|
—
|
|
|
103
|
|
|
91
|
|
|
194
|
|
||||
Other comprehensive income (loss)
|
|
2,499
|
|
|
1,133
|
|
|
374
|
|
|
4,006
|
|
||||
Ending balance
|
|
$
|
6,445
|
|
|
$
|
3,086
|
|
|
$
|
(6,078
|
)
|
|
$
|
3,453
|
|
|
|
Three Months Ended
|
|
Affected Line Item in the
Consolidated Statements
of Income
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
|||||
Derivative instruments
|
|
|
|
|
|
|
|
|
||
Currency exchange contracts gain (loss)
|
|
$
|
585
|
|
|
$
|
(158
|
)
|
|
Revenue
|
Interest rate swap contracts gain (loss)
|
|
584
|
|
|
19
|
|
|
Interest expense, net
|
||
Income tax benefit (expense)
|
|
(255
|
)
|
|
36
|
|
|
Income tax provision (benefit)
|
||
Total net gain (loss) on derivative instruments
|
|
914
|
|
|
(103
|
)
|
|
Net income
|
||
Defined benefit pension plan
|
|
|
|
|
|
|
|
|
||
Actuarial loss
|
|
—
|
|
|
(71
|
)
|
|
Cost of sales
|
||
Actuarial loss
|
|
—
|
|
|
(37
|
)
|
|
Selling and marketing
|
||
Actuarial loss
|
|
—
|
|
|
(22
|
)
|
|
General and administrative
|
||
Actuarial loss
|
|
(137
|
)
|
|
—
|
|
|
Other income (expense), net
1
|
||
Total actuarial loss
|
|
(137
|
)
|
|
(130
|
)
|
|
Income before income taxes
|
||
Income tax benefit
|
|
41
|
|
|
39
|
|
|
Income tax provision (benefit)
|
||
Total net loss on pension plan
|
|
(96
|
)
|
|
(91
|
)
|
|
Net income
|
||
Total net of tax reclassifications out of AOCI included in net income
|
|
$
|
818
|
|
|
$
|
(194
|
)
|
|
|
1
|
Change in classification of actuarial loss on defined benefit pension plan related to the adoption of ASU No. 2017-07 in fiscal year 2019. See Note 2 for additional information on the impact of adoption.
|
|
|
Three Months Ended
|
||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
||||
Revenue
|
|
|
|
|
||||
Test & Simulation
|
|
$
|
125,560
|
|
|
$
|
118,203
|
|
Sensors
|
|
77,950
|
|
|
75,959
|
|
||
Intersegment eliminations
|
|
(329
|
)
|
|
—
|
|
||
Total revenue
|
|
$
|
203,181
|
|
|
$
|
194,162
|
|
|
|
|
|
|
||||
Income from operations
|
|
|
|
|
||||
Test & Simulation
|
|
$
|
7,331
|
|
|
$
|
5,609
|
|
Sensors
|
|
10,634
|
|
|
10,888
|
|
||
Intersegment eliminations
|
|
1
|
|
|
—
|
|
||
Total income from operations
|
|
$
|
17,966
|
|
|
$
|
16,497
|
|
|
|
Three Months Ended
|
||||||
|
|
December 29, 2018
|
December 30, 2017
|
|||||
|
|
Test &
Simulation
|
|
Test &
Simulation |
||||
Cost of sales
|
|
$
|
117
|
|
|
$
|
120
|
|
Selling and marketing
|
|
—
|
|
|
—
|
|
||
General and administrative
|
|
13
|
|
|
135
|
|
||
Research and development
|
|
—
|
|
|
—
|
|
||
Total restructuring expense
|
|
$
|
130
|
|
|
$
|
255
|
|
|
|
2018
|
|
2017
|
|||
|
|
Test and
Simulation |
|
Test and
Simulation |
|||
Balance, September 29, 2018
|
|
1,051
|
|
|
$
|
2,933
|
|
Restructuring expense
|
|
—
|
|
|
130
|
|
|
Payments
|
|
(1,010
|
)
|
|
(2,789
|
)
|
|
Other adjustments
|
|
—
|
|
|
—
|
|
|
Currency translation
|
|
—
|
|
|
—
|
|
|
Balance, December 29, 2018
|
|
41
|
|
|
$
|
274
|
|
|
|
|
Finite-Lived Intangible Asset Lives (Years)
|
||
Asset (Liability)
|
|
|
|
||
Accounts receivable
|
$
|
5,435
|
|
|
|
Unbilled accounts receivable
|
749
|
|
|
|
|
Inventories
|
12,382
|
|
|
|
|
Prepaid expenses and other current assets
|
123
|
|
|
|
|
Property and equipment
|
672
|
|
|
|
|
Intangible assets
|
|
|
|
||
Customer lists
|
21,595
|
|
|
15
|
|
Trademarks and trade names
|
5,926
|
|
|
15
|
|
Technology
|
12,650
|
|
|
15
|
|
Other intangible assets
|
3,191
|
|
|
4
|
|
Other long-term assets
|
60
|
|
|
|
|
Purchased goodwill
|
32,791
|
|
|
|
|
Accounts payable
|
(3,999
|
)
|
|
|
|
Accrued payroll and related costs
|
(1,330
|
)
|
|
|
|
Advance payments from customers
|
(5,561
|
)
|
|
|
|
Accrued income taxes
|
(290
|
)
|
|
|
|
Other accrued liabilities
|
(131
|
)
|
|
|
|
Deferred income taxes
|
(6,231
|
)
|
|
|
|
Net assets acquired
|
$
|
78,032
|
|
|
|
|
|
|
|
||
Supplemental information:
|
|
|
|
||
Purchase price
|
$
|
79,772
|
|
|
|
Less: Cash acquired
|
(1,740
|
)
|
|
|
|
Purchase price, net of cash acquired
|
$
|
78,032
|
|
|
|
•
|
Overview
|
•
|
Financial Results
|
•
|
Cash Flow Comparison
|
•
|
Liquidity and Capital Resources
|
•
|
Off-balance Sheet Arrangements
|
•
|
Critical Accounting Policies
|
•
|
Recently Issued Accounting Pronouncements
|
•
|
Other Matters
|
•
|
Forward-looking Statements
|
|
|
Three Months Ended
|
||||||||||||||||||
|
|
|
|
|
Estimated
|
|
|
|
||||||||||||
|
|
December 29,
2018 |
|
Business
Change |
|
Acquisition / Restructuring
1
|
|
Currency
Translation |
|
December 30,
2017 |
||||||||||
Revenue
|
|
$
|
203,181
|
|
|
$
|
7,940
|
|
|
$
|
3,521
|
|
|
$
|
(2,442
|
)
|
|
$
|
194,162
|
|
Cost of sales
|
|
124,876
|
|
|
7,661
|
|
|
2,933
|
|
|
(1,952
|
)
|
|
116,234
|
|
|||||
Gross profit
|
|
78,305
|
|
|
279
|
|
|
588
|
|
|
(490
|
)
|
|
77,928
|
|
|||||
Gross margin
|
|
38.5
|
%
|
|
|
|
|
|
|
|
|
|
40.1
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Selling and marketing
|
|
32,089
|
|
|
224
|
|
|
91
|
|
|
(254
|
)
|
|
32,028
|
|
|||||
General and administrative
|
|
21,078
|
|
|
(564
|
)
|
|
1,334
|
|
|
(254
|
)
|
|
20,562
|
|
|||||
Research and development
|
|
7,172
|
|
|
(1,855
|
)
|
|
209
|
|
|
(23
|
)
|
|
8,841
|
|
|||||
Total operating expenses
|
|
60,339
|
|
|
(2,195
|
)
|
|
1,634
|
|
|
(531
|
)
|
|
61,431
|
|
|||||
Income from operations
|
|
$
|
17,966
|
|
|
$
|
2,474
|
|
|
$
|
(1,046
|
)
|
|
$
|
41
|
|
|
$
|
16,497
|
|
1
|
The Acquisition / Restructuring column includes revenues and costs from the acquisition of E2M, costs incurred as part of the acquisition of E2M and restructuring costs. See Note 17 and Note 18 to the Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional information on restructuring and related costs and the E2M acquisition, respectively.
|
Revenue
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
Revenue
|
|
$
|
203,181
|
|
|
$
|
194,162
|
|
|
$
|
9,019
|
|
|
4.6
|
%
|
Gross Profit
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
Gross profit
|
|
$
|
78,305
|
|
|
$
|
77,928
|
|
|
$
|
377
|
|
|
0.5
|
%
|
Gross margin
|
|
38.5
|
%
|
|
40.1
|
%
|
|
(1.6
|
)
|
|
ppts
|
Selling and Marketing Expense
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
Selling and marketing
|
|
$
|
32,089
|
|
|
$
|
32,028
|
|
|
$
|
61
|
|
|
0.2
|
%
|
% of revenue
|
|
15.8
|
%
|
|
16.5
|
%
|
|
|
|
|
|
|
General and Administrative Expense
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
General and administrative
|
|
$
|
21,078
|
|
|
$
|
20,562
|
|
|
$
|
516
|
|
|
2.5
|
%
|
% of revenue
|
|
10.4
|
%
|
|
10.6
|
%
|
|
|
|
|
|
|
Research and Development Expense
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
Research and development
|
|
$
|
7,172
|
|
|
$
|
8,841
|
|
|
$
|
(1,669
|
)
|
|
(18.9
|
)%
|
% of revenue
|
|
3.5
|
%
|
|
4.6
|
%
|
|
|
|
|
|
|
Income from Operations
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
Income from operations
|
|
$
|
17,966
|
|
|
$
|
16,497
|
|
|
$
|
1,469
|
|
|
8.9
|
%
|
% of revenue
|
|
8.8
|
%
|
|
8.5
|
%
|
|
|
|
|
|
|
Interest Expense, Net
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
Interest expense, net
|
|
$
|
6,818
|
|
|
$
|
6,804
|
|
|
$
|
14
|
|
|
0.2
|
%
|
Other Income (Expense), Net
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
Other income (expense), net
|
|
$
|
49
|
|
|
$
|
(223
|
)
|
|
$
|
272
|
|
|
122.0
|
%
|
Income Tax Provision (Benefit)
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
Income tax provision (benefit)
|
|
$
|
696
|
|
|
$
|
(23,681
|
)
|
|
$
|
24,377
|
|
|
102.9
|
%
|
Effective tax rate
|
|
6.2
|
%
|
|
(250.1
|
)%
|
|
|
|
|
|
|
Net Income
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
Net income
|
|
$
|
10,501
|
|
|
$
|
33,151
|
|
|
$
|
(22,650
|
)
|
|
(68.3
|
)%
|
Diluted earnings per share
|
|
$
|
0.54
|
|
|
$
|
1.72
|
|
|
$
|
(1.18
|
)
|
|
(68.6
|
)%
|
|
|
Three Months Ended
|
||||||||||||||||||
|
|
|
|
Estimated
|
|
|
||||||||||||||
|
|
December 29,
2018 |
|
Business
Change |
|
Acquisition / Restructuring
1
|
|
Currency
Translation |
|
December 30,
2017 |
||||||||||
Revenue
|
|
$
|
125,560
|
|
|
$
|
5,344
|
|
|
$
|
3,521
|
|
|
$
|
(1,508
|
)
|
|
$
|
118,203
|
|
Cost of sales
|
|
86,015
|
|
|
5,417
|
|
|
2,933
|
|
|
(1,399
|
)
|
|
79,064
|
|
|||||
Gross profit
|
|
39,545
|
|
|
(73
|
)
|
|
588
|
|
|
(109
|
)
|
|
39,139
|
|
|||||
Gross margin
|
|
31.5
|
%
|
|
|
|
|
|
|
|
|
|
33.1
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Selling and marketing
|
|
17,348
|
|
|
(399
|
)
|
|
91
|
|
|
(106
|
)
|
|
17,762
|
|
|||||
General and administrative
|
|
12,071
|
|
|
(137
|
)
|
|
1,334
|
|
|
(217
|
)
|
|
11,091
|
|
|||||
Research and development
|
|
2,795
|
|
|
(2,090
|
)
|
|
209
|
|
|
(1
|
)
|
|
4,677
|
|
|||||
Total operating expenses
|
|
32,214
|
|
|
(2,626
|
)
|
|
1,634
|
|
|
(324
|
)
|
|
33,530
|
|
|||||
Income from operations
|
|
$
|
7,331
|
|
|
$
|
2,553
|
|
|
$
|
(1,046
|
)
|
|
$
|
215
|
|
|
$
|
5,609
|
|
1
|
The Acquisition / Restructuring column includes revenues and costs from the acquisition of E2M, costs incurred as part of the acquisition of E2M and restructuring costs. See Note 17 and Note 18 to the Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional information on restructuring and related costs and the E2M acquisition, respectively.
|
Revenue
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
Revenue
|
|
$
|
125,560
|
|
|
$
|
118,203
|
|
|
$
|
7,357
|
|
|
6.2
|
%
|
Gross Profit
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
Gross profit
|
|
$
|
39,545
|
|
|
$
|
39,139
|
|
|
$
|
406
|
|
|
1.0
|
%
|
Gross margin
|
|
31.5
|
%
|
|
33.1
|
%
|
|
(1.6
|
)
|
|
ppts
|
Selling and Marketing Expense
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
Selling and marketing
|
|
$
|
17,348
|
|
|
$
|
17,762
|
|
|
$
|
(414
|
)
|
|
(2.3
|
)%
|
% of revenue
|
|
13.8
|
%
|
|
15.0
|
%
|
|
|
|
|
General and Administrative Expense
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
General and administrative
|
|
$
|
12,071
|
|
|
$
|
11,091
|
|
|
$
|
980
|
|
|
8.8
|
%
|
% of revenue
|
|
9.6
|
%
|
|
9.4
|
%
|
|
|
|
|
Research and Development Expense
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
Research and development
|
|
$
|
2,795
|
|
|
$
|
4,677
|
|
|
$
|
(1,882
|
)
|
|
(40.2
|
)%
|
% of revenue
|
|
2.2
|
%
|
|
4.0
|
%
|
|
|
|
|
Income from Operations
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
Income from operations
|
|
$
|
7,331
|
|
|
$
|
5,609
|
|
|
$
|
1,722
|
|
|
30.7
|
%
|
% of revenue
|
|
5.8
|
%
|
|
4.7
|
%
|
|
|
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
|
|
|
Estimated
|
|
|
|
||||||||
|
|
December 29,
2018 |
|
Business
Change |
|
Currency
Translation |
|
December 30,
2017 |
||||||||
Revenue
|
|
$
|
77,950
|
|
|
$
|
2,925
|
|
|
$
|
(934
|
)
|
|
$
|
75,959
|
|
Cost of sales
|
|
39,191
|
|
|
2,574
|
|
|
(553
|
)
|
|
37,170
|
|
||||
Gross profit
|
|
38,759
|
|
|
351
|
|
|
(381
|
)
|
|
38,789
|
|
||||
Gross margin
|
|
49.7
|
%
|
|
|
|
|
|
|
|
51.1
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling and marketing
|
|
14,741
|
|
|
623
|
|
|
(148
|
)
|
|
14,266
|
|
||||
General and administrative
|
|
9,007
|
|
|
(427
|
)
|
|
(37
|
)
|
|
9,471
|
|
||||
Research and development
|
|
4,377
|
|
|
235
|
|
|
(22
|
)
|
|
4,164
|
|
||||
Total operating expenses
|
|
28,125
|
|
|
431
|
|
|
(207
|
)
|
|
27,901
|
|
||||
Income (loss) from operations
|
|
$
|
10,634
|
|
|
$
|
(80
|
)
|
|
$
|
(174
|
)
|
|
$
|
10,888
|
|
Revenue
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased /(Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
Revenue
|
|
$
|
77,950
|
|
|
$
|
75,959
|
|
|
$
|
1,991
|
|
|
2.6
|
%
|
Gross Profit
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
Gross profit
|
|
$
|
38,759
|
|
|
$
|
38,789
|
|
|
$
|
(30
|
)
|
|
(0.1
|
)%
|
Gross margin
|
|
49.7
|
%
|
|
51.1
|
%
|
|
(1.4
|
)
|
|
ppts
|
Selling and Marketing Expense
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
Selling and marketing
|
|
$
|
14,741
|
|
|
$
|
14,266
|
|
|
$
|
475
|
|
|
3.3
|
%
|
% of revenue
|
|
18.9
|
%
|
|
18.8
|
%
|
|
|
|
|
General and Administrative Expense
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
General and administrative
|
|
$
|
9,007
|
|
|
$
|
9,471
|
|
|
$
|
(464
|
)
|
|
(4.9
|
)%
|
% of revenue
|
|
11.6
|
%
|
|
12.5
|
%
|
|
|
|
|
Research and Development Expense
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
Research and development
|
|
$
|
4,377
|
|
|
$
|
4,164
|
|
|
$
|
213
|
|
|
5.1
|
%
|
% of revenue
|
|
5.6
|
%
|
|
5.5
|
%
|
|
|
|
|
Income from Operations
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended
|
|
|
|||||||||||
|
|
December 29,
2018 |
|
December 30,
2017 |
|
Increased / (Decreased)
|
|||||||||
|
|
|
|
$
|
|
%
|
|||||||||
Income from operations
|
|
$
|
10,634
|
|
|
$
|
10,888
|
|
|
$
|
(254
|
)
|
|
(2.3
|
)%
|
% of revenue
|
|
13.6
|
%
|
|
14.3
|
%
|
|
|
|
|
|
|
Three Months Ended
|
||||||
|
|
December 29, 2018
|
|
December 30, 2017
|
||||
Total cash provided by (used in):
|
|
|
|
|
||||
Operating activities
|
|
$
|
10,631
|
|
|
$
|
9,223
|
|
Investing activities
|
|
(82,080
|
)
|
|
(2,732
|
)
|
||
Financing activities
|
|
70,595
|
|
|
(22,759
|
)
|
||
Effect of exchange rate changes on cash
|
|
(512
|
)
|
|
1,606
|
|
||
Increase (decrease) during the period
|
|
(1,366
|
)
|
|
(14,662
|
)
|
||
Cash and cash equivalents balance, beginning of period
|
|
71,804
|
|
|
108,733
|
|
||
Cash and cash equivalents balance, end of period
|
|
$
|
70,438
|
|
|
$
|
94,071
|
|
|
|
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
As Part of Publicly
Announced Plans
or Programs
|
|||||
September 30, 2018 – November 3, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
438
|
|
November 4, 2018 – December 1, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
438
|
|
December 2, 2018 – December 29, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
438
|
|
Exhibit
Number
|
|
|
Description
|
|
|
|
|
|
|
10.1
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
|
|
32.1
|
|
|
|
|
|
|
|
|
|
32.2
|
|
|
|
|
|
|
|
|
|
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).
|
|
|
|
|
|
|
|
|
|
|
|
MTS SYSTEMS CORPORATION
|
|
|
|
|
|
Date:
|
February 4, 2019
|
/s/ JEFFREY A. GRAVES
|
|
|
|
Jeffrey A. Graves
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
Date:
|
February 4, 2019
|
/s/ BRIAN T. ROSS
|
|
|
|
Brian T. Ross
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
Increasing Revolving Lender
|
Incremental Revolving Commitment
|
JPMORGAN CHASE BANK, N.A.
|
$9,000,000
|
WELLS FARGO BANK, N.A.
|
$6,500,000
|
HSBC BANK USA, NATIONAL ASSOCIATION
|
$6,500,000
|
U.S. BANK NATIONAL ASSOCIATION
|
$4,000,000
|
BANK OF AMERICA, N.A.
|
$4,000,000
|
Total Incremental Revolving Commitments
|
$30,000,000
|
LENDER
|
REVOLVING COMMITMENT
|
JPMORGAN CHASE BANK, N.A.
|
$44,000,000
|
WELLS FARGO BANK, NATIONAL ASSOCIATION
|
$31,500,000
|
HSBC BANK USA, NATIONAL ASSOCIATION
|
$26,500,000
|
U.S. BANK NATIONAL ASSOCIATION
|
$24,000,000
|
BANK OF AMERICA, N.A.
|
$24,000,000
|
AGGREGATE REVOLVING COMMITMENTS
|
$150,000,000
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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:
|
February 4, 2019
|
/s/ JEFFREY A. GRAVES
|
|
|
Jeffrey A. Graves
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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:
|
February 4, 2019
|
/s/ BRIAN T. ROSS
|
|
|
Brian T. Ross
|
|
|
Senior Vice President and Chief Financial 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:
|
February 4, 2019
|
/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:
|
February 4, 2019
|
/s/ BRIAN T. ROSS
|
|
|
Brian T. Ross
|
|
|
Senior Vice President and Chief Financial Officer
|