XML 94 R13.htm IDEA: XBRL DOCUMENT
v3.20.1

Fair Value Measurements | 3 Months Ended
--- | ---
Apr. 03, 2020
Fair Value Disclosures [Abstract] |
Fair Value Measurements | 6. Fair Value Measurements ASC 820, “Fair Value Measurements,” establishes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the third is considered unobservable:
| • | Level 1: Quoted prices for identical assets or liabilities in active markets which the Company can access
| • | Level 2: Observable inputs other than those described in Level 1
| • | Level 3: Unobservable inputs
Current Assets and Liabilities The Company’s cash equivalents are highly liquid investments with original maturities of three months or less, which represent an asset the Company measures at fair value on a recurring basis. The Company determines the fair value of cash equivalents using a market approach based on quoted prices in active markets. The fair values of cash, accounts receivable, income taxes receivable, accounts payable, income taxes payable and accrued expenses and other current liabilities approximate their carrying values because of their short-term nature. Foreign Currency Contracts The Company addresses market risks from changes in foreign currency exchange rates through a risk management program that includes the use of derivative financial instruments to mitigate certain balance sheet foreign currency transaction exposures. The Company uses foreign currency forward contracts as a part of its strategy to manage exposures related to foreign currency denominated monetary assets and liabilities. The fair value of these foreign currency forward contracts is reported either in other current assets or in other current liabilities as of the end of the period. Contingent Considerations On July 31, 2019, the Company acquired ARGES. Under the purchase and sale agreement for the ARGES acquisition, the former owner of ARGES is eligible to receive contingent consideration based on the achievement of certain revenue targets by the Company from August 2019 through December 2026. The undiscounted range of possible contingent consideration is zero to €10.0 million. If the revenue targets are achieved, the contingent consideration would be payable annually with the first payment due in the first quarter of 2021. The estimated fair value of the contingent consideration of €7.1 million ($7.9 million) was determined based on the Monte Carlo valuation method and was recorded as part of the purchase price as of the acquisition date. Subsequent changes in the estimated fair value of the contingent consideration liability are recorded in the consolidated statement of operations in restructuring and acquisition related costs until the liability is fully settled. There were no changes to the fair value of the contingent consideration during the three months ended April 3, 2020. On April 16, 2019, the Company acquired Ingenia CAT, S.L. (“Ingenia”). Under the purchase and sale agreement for the Ingenia acquisition, the shareholders of Ingenia are eligible to receive contingent consideration based on the achievement of certain revenue targets by the Company from April 2019 through March 2022. The undiscounted range of possible contingent consideration is zero to €8.0 million. If the revenue targets are achieved, the contingent consideration would be payable in cash in three annual installments from 2020 to 2022. The estimated fair value of the contingent consideration of €5.8 million ($6.6 million) was determined based on the Monte Carlo valuation method and was recorded as part of the purchase price as of the acquisition date. Subsequent changes in the estimated fair value of the contingent consideration liability are recorded in the consolidated statement of operations in restructuring and acquisition related costs until the liability is fully settled. There were no changes to the fair value of the contingent consideration during the three months ended April 3, 2020. On December 14, 2016, the Company acquired certain video signal processing and management technologies used in medical visualization solutions. Under the purchase and sale agreement, the former owners are eligible to receive contingent consideration based on the achievement of certain revenue targets by the Company from 2018 to 2021 from products utilizing the acquired technologies. The undiscounted range of possible contingent consideration is zero to €5.5 million ($6.6 million). If the revenue targets are achieved, the contingent consideration would be payable in cash in four installments from 2019 to 2022. As the acquired assets did not meet the definition of a business, the fair value of the contingent consideration is recognized when probable and estimable and is capitalized as part of the cost of the acquired assets. Subsequent changes in the estimated fair value of this contingent liability are recorded as adjustments to the carrying value of the asset acquired and amortized over the remaining useful life of the underlying asset. The Company made the first installment payment of $2.6 million in February 2020, which is included in cash flows from investing activities in the consolidated statement of cash flows for the three months ended April 3, 2020. There were no other changes in the fair value of the contingent consideration during the three months ended April 3, 2020. Summary by Fair Value Hierarchy The following table summarizes the fair values of the Company’s assets and liabilities measured at fair value on a recurring basis as of April 3, 2020 (in thousands):
|  |  |  |  | Quoted Prices in |  |  |  |  |  |  | Significant Other |
|  |  |  |  | Active Markets for |  |  | Significant Other |  |  | Unobservable |
|  |  |  |  | Identical Assets |  |  | Observable Inputs |  |  | Inputs |
| Fair Value |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents | $ | 9,338 |  |  | $ | 9,338 |  |  | $ | — |  |  | $ | — |
Prepaid expenses and other current assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | 59 |  |  |  | — |  |  |  | 59 |  |  |  | — |
| $ | 9,397 |  |  | $ | 9,338 |  |  | $ | 59 |  |  | $ | — |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accrued expenses and other current liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent considerations - Current | $ | 5,221 |  |  | $ | — |  |  | $ | — |  |  | $ | 5,221 |
Foreign currency forward contracts |  | 366 |  |  |  | — |  |  |  | 366 |  |  |  | — |
Other liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent considerations - Long-term |  | 12,001 |  |  |  | — |  |  |  | — |  |  |  | 12,001 |
| $ | 17,588 |  |  | $ | — |  |  | $ | 366 |  |  | $ | 17,222 |
The following table summarizes the fair values of the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 (in thousands):
|  |  |  |  | Quoted Prices in |  |  |  |  |  |  | Significant Other |
|  |  |  |  | Active Markets for |  |  | Significant Other |  |  | Unobservable |
|  |  |  |  | Identical Assets |  |  | Observable Inputs |  |  | Inputs |
| Fair Value |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents | $ | 9,262 |  |  | $ | 9,262 |  |  | $ | — |  |  | $ | — |
Prepaid expenses and other current assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | 50 |  |  |  | — |  |  |  | 50 |  |  |  | — |
| $ | 9,312 |  |  | $ | 9,262 |  |  | $ | 50 |  |  | $ | — |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accrued expenses and other current liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent considerations - Current | $ | 3,813 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,813 |
Foreign currency forward contracts |  | 99 |  |  |  | — |  |  |  | 99 |  |  |  | — |
Other liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent considerations - Long-term |  | 16,504 |  |  |  | — |  |  |  | — |  |  |  | 16,504 |
| $ | 20,416 |  |  | $ | — |  |  | $ | 99 |  |  | $ | 20,317 |
Changes in the fair value of Level 3 contingent considerations during the three months ended April 3, 2020 were as follows (in thousands):
| Contingent Considerations |
Balance at December 31, 2019 | $ | 20,317 |
Payments |  | (2,632 | )
Fair value adjustments |  | — |
Effect of foreign exchange rates |  | (463 | )
Balance at April 3, 2020 | $ | 17,222 |
The following table provides qu ali tative information associated with the fair value measurement of the Company’s Level 3 liabilities:
Liability |  | April 3, 2020 Fair Value (in thousands) |  | Valuation Technique |  | Unobservable Inputs |  | Percentage Applied
Contingent consideration (ARGES) |  | $7,647 |  | Monte Carlo method |  | Historical and projected revenues from August 2019 through December 2026 |  | N/A
|  |  |  |  |  | Revenue volatility |  | 36.0%
|  |  |  |  |  | Cost of debt |  | 1.4%
|  |  |  |  |  | Discount rate |  | 7.3%
Contingent consideration (Ingenia) |  | $6,441 |  | Monte Carlo method |  | Historical and projected revenues from April 2019 through March 2022 |  | N/A
|  |  |  |  |  | Revenue volatility |  | 36.0%
|  |  |  |  |  | Cost of debt |  | 0.9%
|  |  |  |  |  | Discount rate |  | 15.3%
Contingent consideration (Other) |  | $3,134 |  | Discounted cash flow method |  | Historical and projected revenues for fiscal years 2018 to 2021 |  | N/A
|  |  |  |  |  | Revenue discount rate |  | 22.8%
Increases or decreases in the unobservable inputs noted above would result in a higher or lower fair value measurement. See Note 10 to Consolidated Financial Statements for a discussion of the estimated fair value of the Company’s outstanding debt.

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration