0001420800-20-000029 | 10-Q | XBRL Viewer

Commitments and Contingencies (Tables)

9 Months Ended

Oct. 02, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule Of Loss Contingencies By Claims Quantities

laims activity since December 31 is as follows:


	Nine Months Ended
	October 2, 2020	September 27, 2019
	(Number of claims)
Claims unresolved, beginning of period	16,299	16,417
Claims filed(1)	2,898	3,360
Claims resolved(2)	(3,712)	(3,604)
Claims unresolved, end of period	15,485	16,173

(1) Claims filed include all asbestos claims for which notification has been received or a file has been opened.

(2) Claims resolved include all asbestos claims that have been settled, dismissed or that are in the process of being settled or dismissed based upon agreements or understandings in place with counsel for the claimants.

Schedule Of Asbestos Related Litigation

The Company’s Condensed Consolidated Balance Sheets included the following amounts related to asbestos-related litigation:


	October 2, 2020		December 31, 2019
	(In thousands)
Current asbestos insurance receivable(1)	$	34,674	$	4,474
Long-term asbestos insurance asset(2)	234,400		281,793
Long-term asbestos insurance receivable(2)	36,681		41,629
Accrued asbestos liability(3)	62,310		64,394
Long-term asbestos liability(4)	259,426		286,105

(1) Included in Other current assets in the Condensed Consolidated Balance Sheets. Over the next year, the Company expects to be reimbursed for certain asbestos-related costs that were mainly incurred prior to certain court rulings.

(2) Included in Other assets in the Condensed Consolidated Balance Sheets.

(3) Represents current accruals for probable and reasonably estimable asbestos-related liability costs that the Company believes the subsidiaries will pay, and unpaid legal costs related to defending themselves against asbestos-related liability claims and legal action against the Company’s insurers, which is included in Accrued liabilities in the Condensed Consolidated Balance Sheets.

(4) Included in Other liabilities in the Condensed Consolidated Balance Sheets.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 02, 2020	Sep. 27, 2019	Oct. 02, 2020	Sep. 27, 2019
Income Statement [Abstract]
Net sales	$ 805,931	$ 846,519	$ 2,242,647	$ 2,439,085
Cost of sales	461,811	478,377	1,309,227	1,433,872
Gross profit	344,120	368,142	933,420	1,005,213
Selling, general and administrative expense	278,060	290,500	805,984	846,288
Restructuring and other related charges	4,129	9,781	23,589	47,197
Operating income	61,931	67,861	103,847	111,728
Pension settlement loss	0	33,616	0	33,616
Interest expense, net	25,567	31,828	78,647	86,820
Income (loss) from continuing operations before income taxes	36,364	2,417	25,200	(8,708)
Income tax expense (benefit)	19,528	(1,353)	2,638	6,840
Net income (loss) from continuing operations	16,836	3,770	22,562	(15,548)
Income (loss) from discontinued operations, net of taxes	(2,641)	9,024	(10,906)	(486,265)
Net income (loss)	14,195	12,794	11,656	(501,813)
Less: income attributable to noncontrolling interest, net of taxes	789	2,320	2,243	8,970
Net income (loss) attributable to Colfax Corporation	$ 13,406	$ 10,474	$ 9,413	$ (510,783)
Net income (loss) per share - basic & diluted
Net income (loss) per share, continuing operations, basic (in usd per share)	$ 0.12	$ 0.02	$ 0.15	$ (0.14)
Net income (loss) per share, discontinued operations, basic (in usd per share)	(0.02)	0.06	(0.08)	(3.63)
Net income (loss) per share, basic (in usd per share)	0.10	0.08	0.07	(3.77)
Net income (loss) per share - diluted
Net income (loss) per share, continuing operations, diluted (in usd per share)	$ 0.12	$ 0.02	$ 0.15	$ (0.14)

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Oct. 02, 2020	Dec. 31, 2019
ASSETS
Cash and cash equivalents	$ 66,423	$ 109,632
Trade receivables, less allowance for credit losses of $34,975 and $32,634	498,357	561,865
Inventories, net	536,052	571,558
Other current assets	186,680	161,190
Total current assets	1,287,512	1,404,245
Property, plant and equipment, net	463,775	491,241
Goodwill	3,245,042	3,202,517
Intangible assets, net	1,635,706	1,719,019
Lease asset - right of use	170,580	173,320
Other assets	351,619	396,490
Total assets	7,154,234	7,386,832
LIABILITIES AND EQUITY
Current portion of long-term debt	26,954	27,642
Accounts payable	306,314	359,782
Accrued liabilities	451,265	469,890
Total current liabilities	784,533	857,314
Long-term debt, less current portion	2,191,725	2,284,184
Non-current lease liability	130,947	136,399
Other liabilities	589,560	619,307
Total liabilities	3,696,765	3,897,204
Equity:
Common stock, $0.001 par value; 400,000,000 shares authorized; 118,457,179 and 118,059,082 issued and outstanding as of October 2, 2020 and December 31, 2019, respectively	118	118
Additional paid-in capital	3,470,169	3,445,597
Retained earnings	484,155	479,560
Accumulated other comprehensive loss	(541,996)	(483,845)
Total Colfax Corporation equity	3,412,446	3,441,430
Noncontrolling interest	45,023	48,198
Total equity	3,457,469	3,489,628
Total liabilities and equity	$ 7,154,234	$ 7,386,832

Equity - Schedule of TEUs (Details) - USD ($) $ / shares in Units, $ in Millions		9 Months Ended
	Jan. 11, 2019	Oct. 02, 2020
Class of Stock [Line Items]
Fair value per unit	$ 100
Gross proceeds	$ 460.0	$ 460.0
Less: Issuance costs		12.3
Net proceeds		447.7
TEU prepaid stock purchase contracts
Class of Stock [Line Items]
Fair value per unit	$ 84.39
Gross proceeds		388.2
Less: Issuance costs		10.4
Net proceeds		377.8
TEU amortizing notes
Class of Stock [Line Items]
Fair value per unit	$ 15.61
Gross proceeds		71.8
Less: Issuance costs		1.9
Net proceeds		$ 69.9

CONDENSED CONSOLIDATED STATEMENT OF EQUITY Statement of Stockholders' Equity [Parenthetical] - USD ($) $ in Thousands	3 Months Ended
	Oct. 02, 2020	Jul. 03, 2020	Apr. 03, 2020	Sep. 27, 2019	Jun. 28, 2019	Mar. 29, 2019
Statement of Stockholders' Equity [Parenthetical] [Abstract]
Other comprehensive income, tax	$ (3,756)	$ (3,917)	$ 4,644	$ 193	$ (1,981)	$ (413)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Oct. 02, 2020	Sep. 27, 2019	Oct. 02, 2020	Sep. 27, 2019
Income Tax Disclosure [Abstract]
Income (loss) from continuing operations before income taxes	$ 36,364	$ 2,417	$ 25,200	$ (8,708)
Income tax expense (benefit)	$ 19,528	$ (1,353)	$ 2,638	$ 6,840
Effective tax rate	53.70%	(56.00%)	10.50%	(78.50%)
Nondeductible deal costs				$ 16,700
Tax expense due to change in valuation allowance due to business acquisition				$ 9,200

Net Income Per Share (Text Block)

9 Months Ended

Oct. 02, 2020

Earnings Per Share [Abstract]

Net Income (Loss) Per Share from Continuing Operations

Net income (loss) per share from continuing operations was computed as follows:


	Three Months Ended				Nine Months Ended
	October 2, 2020		September 27, 2019		October 2, 2020		September 27, 2019
	(In thousands, except share and per share data)
Computation of Net income (loss) per share from continuing operations - basic:
Net income (loss) from continuing operations attributable to Colfax Corporation (1)	$	16,047	$	2,901	$	20,319	$	(18,636)
Weighted-average shares of Common stock outstanding – basic	136,832,909		136,121,017		136,730,112		135,440,566
Net income (loss) per share from continuing operations – basic	$	0.12	$	0.02	$	0.15	$	(0.14)

Computation of Net income (loss) per share from continuing operations - diluted:
Net income (loss) from continuing operations attributable to Colfax Corporation (1)	$	16,047	$	2,901	$	20,319	$	(18,636)
Weighted-average shares of Common stock outstanding – basic	136,832,909		136,121,017		136,730,112		135,440,566
Net effect of potentially dilutive securities - stock options, restricted stock units and tangible equity units	1,257,701		929,143		2,339,794		—
Weighted-average shares of Common stock outstanding – diluted	138,090,610		137,050,160		139,069,906		135,440,566
Net income (loss) per share from continuing operations – diluted	$	0.12	$	0.02	$	0.15	$	(0.14)

(1) Net income (loss) from continuing operations attributable to Colfax Corporation for the respective periods is calculated using Net income (loss) from continuing operations less the continuing operations component of the income attributable to noncontrolling interest, net of taxes, of $0.8 million and $2.2 million for the three and nine months ended October 2, 2020, and $0.9 million and $3.1 million for the three and nine months ended September 27, 2019, respectively.

For all periods presented, the weighted-average shares of Common stock outstanding - basic includes the impact of 18.4 million shares related to the issuance of Colfax’s tangible equity units. For the nine months ended October 2, 2020, the weighted-average shares of Common stock outstanding - diluted includes the impact of an additional 1.2 million potentially issuable dilutive shares related to Colfax’s tangible equity units as a result of the Company’s share price in March 2020. See Note 8, “Equity” for details.

The weighted-average computation of the dilutive effect of potentially issuable shares of Common stock under the treasury stock method for the three and nine months ended October 2, 2020 excludes 2.8 million and 4.2 million, respectively, of outstanding stock-based compensation awards as their inclusion would be anti-dilutive.

The weighted-average computation of the dilutive effect of potentially issuable shares of Common stock under the treasury stock method for the three and nine months ended September 27, 2019 excludes 4.4 million and 4.6 million, respectively, of outstanding stock-based compensation awards as their inclusion would be anti-dilutive.

Asbestos Litigation (Details 1) - USD ($)
$ in Thousands

Oct. 02, 2020

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Insurance Receivable Asbestos Current

$ 34,674

$ 4,474

Long-term asbestos insurance asset

^[1]

234,400

281,793

Long-term asbestos insurance receivable

^[1]

36,681

41,629

Accrued asbestos liability

^[2]

62,310

64,394

Long-term asbestos liability

^[3]

$ 259,426

$ 286,105

[1]	Included in Other assets in the Condensed Consolidated Balance Sheets.
[2]	Represents current accruals for probable and reasonably estimable asbestos-related liability costs that the Company believes the subsidiaries will pay, and unpaid legal costs related to defending themselves against asbestos-related liability claims and legal action against the Company’s insurers, which is included in Accrued liabilities in the Condensed Consolidated Balance Sheets.
[3]	Included in Other liabilities in the Condensed Consolidated Balance Sheets.

Inventories, Net (Details) - USD ($) $ in Thousands	Oct. 02, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Raw materials	$ 103,070	$ 115,587
Work in process	42,980	37,019
Finished goods	459,386	475,933
Inventory, gross	605,436	628,539
Less: allowance for excess, slow-moving and obsolete inventory	(69,384)	(56,981)
Inventories, net	$ 536,052	$ 571,558

Recently Issued Accounting Pronouncements (Policies)

9 Months Ended

Oct. 02, 2020

Accounting Policies [Abstract]

Basis of Accounting

The Condensed Consolidated Financial Statements included in this quarterly report have been prepared by the Company in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements.

Use of Estimates

The Company makes certain estimates and assumptions in preparing its Condensed Consolidated Financial Statements in accordance with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses for the periods presented. Actual results may differ from those estimates.In the normal course of business, the Company incurs research and development costs related to new product development which are expensed as incurred. Research and development costs were $16.8 million and $49.4 million during the three and nine months ended October 2, 2020, and $16.3 million and $44.8 million during the three and nine months ended September 27, 2019, respectively, which are included in Selling, general and administrative expenses on the Company’s Condensed Consolidated Statements of Operations.

New Accounting Pronouncements

Accounting Guidance Implemented in 2020

Standard

Description

Effective Date

ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

The ASU eliminates the probable initial recognition threshold under current GAAP and broadens the information an entity must consider when developing its expected credit loss estimates to include forward-looking information. The standard applies to most financial assets held at amortized costs, as well as certain other instruments. Under the current expected credit loss (“CECL”) model, entities must estimate losses over the entire contractual term of the asset from the date of initial recognition. In determining expected losses, consideration must be given to historical loss experience, current conditions, and reasonable and supportable forecasts incorporating forward looking information. The Company adopted Topic 326 on January 1, 2020 using a modified retrospective transition method, which requires a cumulative-effect adjustment to the opening balance sheet of retained earnings to be recognized on the date of adoption without restating prior periods. The cumulative-effect adjustment, net of tax, on January 1, 2020 was $4.8 million.

January 1, 2020

ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement

The ASU modifies the disclosure requirements for fair value measurements. The adoption of this standard did not result in any changes to the current disclosures, as the requirements modified by the ASU are not applicable or are immaterial for disclosure.

January 1, 2020

New Accounting Guidance to be Implemented

Standard

Description

Anticipated Impact

Effective Date

ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans

The ASU modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.

This accounting standard update impacts disclosures only. The Company is currently evaluating the impact of this ASU on its consolidated financial statement disclosures and the timing of adoption.

January 1, 2021

ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes

The ASU eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of accounting for income taxes.

The Company is currently evaluating the impact of this ASU on its consolidated financial statements and the timing of adoption.

January 1, 2021

Revenue - Narrative (Details) $ in Millions	3 Months Ended		9 Months Ended
Revenue - Narrative (Details) $ in Millions	Oct. 02, 2020 USD ($) salesChannel	Sep. 27, 2019 USD ($)	Oct. 02, 2020 USD ($) salesChannel	Sep. 27, 2019 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Revenue [Abstract]
Contract liability	$ 30.4	$ 15.6	$ 30.4	$ 15.6	$ 14.8	$ 13.0
Revenue recognized, contract liability	4.5	$ 4.8	13.2	$ 13.0
Contract liability, one time advance payments	$ 11.8		$ 11.8
Number of Sales Channels \| salesChannel	3		3

Segment Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
Segment Information (Details) $ in Thousands	Oct. 02, 2020 USD ($)	Sep. 27, 2019 USD ($)	Oct. 02, 2020 USD ($) segment	Sep. 27, 2019 USD ($)
Number of Operating Segments \| segment			2
Revenues	$ 805,931	$ 846,519	$ 2,242,647	$ 2,439,085
Segment operating income	70,848	81,170	136,850	162,453
Income (loss) from continuing operations before income taxes	36,364	2,417	25,200	(8,708)
Pension settlement loss	0	33,616	0	33,616
Interest expense	25,567	31,828	78,647	86,820
Restructuring and other related charges	6,328	13,309	28,514	50,725
MDR and other	2,589	0	4,489	0
Fabrication Technology
Revenues	491,497	539,228	1,431,401	1,692,347
Segment operating income	63,058	72,999	175,703	224,574
Medical Technology
Revenues	314,434	307,291	811,246	746,738
Segment operating income	22,869	22,456	5,877	37,743
Corporate and other
Segment operating income	(15,079)	(14,285)	(44,730)	(99,864)
Cost of Sales
Restructuring and other related charges	$ 2,200	$ 3,500	$ 4,900	$ 3,500

Segment Information (Text Block)

9 Months Ended

Oct. 02, 2020

Segment Reporting [Abstract]

Segment Information

The Company conducts its continuing operations through the Fabrication Technology and Medical Technology operating segments, which also represent the Company’s reportable segments.

▪Fabrication Technology - a global supplier of consumable products and equipment for cutting, joining, and automated welding, as well as gas control equipment, providing a wide range of products with innovative technologies to solve challenges in virtually any industry.

•Medical Technology - a global leader in orthopedic solutions, providing orthopedic devices, reconstructive implants, software and services spanning the full continuum of patient care, from injury prevention to rehabilitation.

Certain amounts not allocated to the two reportable segments and intersegment eliminations are reported under the heading “Corporate and other.” The Company’s management evaluates the operating results of each of its reportable segments based upon Net sales and segment operating income (loss), which represents Operating income (loss) before Restructuring and other related charges and European Union Medical Devices Regulation (“MDR”) and other costs.

The Company’s segment results were as follows:


	Three Months Ended				Nine Months Ended
	October 2, 2020		September 27, 2019		October 2, 2020		September 27, 2019(1)
	(In thousands)
Net sales:
Fabrication Technology	$	491,497	$	539,228	$	1,431,401	$	1,692,347
Medical Technology	314,434		307,291		811,246		746,738
	$	805,931	$	846,519	$	2,242,647	$	2,439,085
Segment operating income (loss)(2):
Fabrication Technology	$	63,058	$	72,999	$	175,703	$	224,574
Medical Technology	22,869		22,456		5,877		37,743
Corporate and other	(15,079)		(14,285)		(44,730)		(99,864)
	$	70,848	$	81,170	$	136,850	$	162,453

(1) For the nine months ended September 27, 2019, the Medical Technology segment includes results from the acquisition date of February 22, 2019.

(2) Following is a reconciliation of Income (loss) from continuing operations before income taxes to segment operating income:


	Three Months Ended				Nine Months Ended
	October 2, 2020		September 27, 2019		October 2, 2020		September 27, 2019
	(In thousands)
Income (loss) from continuing operations before income taxes	$	36,364	$	2,417	$	25,200	$	(8,708)

Pension settlement loss	—		33,616		—		33,616
Interest expense, net	25,567		31,828		78,647		86,820
Restructuring and other related charges(1)	6,328		13,309		28,514		50,725
MDR and other(2)	2,589		—		4,489		—
Segment operating income	$	70,848	$	81,170	$	136,850	$	162,453

(1) Restructuring and other related charges includes $2.2 million and $4.9 million of expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three and nine months ended October 2, 2020, respectively, and $3.5 million of expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three and nine months ended September 27, 2019.

(2) Primarily related to costs specific to compliance with medical device reporting regulations and other requirements of the European Union Medical Device Regulation of 2017.

Equity Textual (Details)		3 Months Ended	9 Months Ended
Equity Textual (Details)	Jan. 11, 2019 USD ($) $ / shares shares	Oct. 02, 2020 USD ($) $ / shares shares	Oct. 02, 2020 USD ($) $ / shares shares
Stock Repurchase Program, Authorized Amount		$ 100,000,000	$ 100,000,000
Gross proceeds	$ 460,000,000		$ 460,000,000.0
Tangible Equity Units Issued, Number \| shares	4,000,000
Tangible Equity Units Issued, State Rate Of Return	5.75%	6.50%	6.50%
Fair value per unit \| $ / shares	$ 100
Tangible Equity Units Issued, Number, Additional Issuable \| shares	600,000
Tangible Equity Units Issued, Cash Proceeds	$ 447,700,000
Prepaid Stock Purchase Contracts, Fair Value		$ 377,800,000	$ 377,800,000
Tangible Equity Units Issued, Fair Value		69,900,000	69,900,000
Tangible Equity Units Issued, Noncurrent		47,300,000	47,300,000
Tangible Equity Units Issued, Current		$ 22,600,000	$ 22,600,000
Tangible Equity Unit, Threshold Appreciation Price \| $ / shares		$ 25.00	$ 25.00
Tangible Equity Unit, Reference Price \| $ / shares		20.81	20.81
Tangible Equity Unit, Initial Principal Amount \| $ / shares		15.6099	15.6099
Tangible Equity Unit, Quarterly Cash Distribution \| $ / shares		$ 1.4375	$ 1.4375
Tangible Equity Unit, Quarterly Cash Distribution, Percentage		5.75%	5.75%
Tangible Equity Unit, Repayment		$ 6,600,000	$ 19,800,000
Stock Purchase Contracts Outstanding \| shares		4,600,000	4,600,000
Minimum
Shares Issued per Purchase Contract		4.0000	4.0000
Tangible Equity Units, Threshold For Conversion \| shares		18,400,000	18,400,000
Maximum
Shares Issued per Purchase Contract		4.8054	4.8054
Tangible Equity Units, Threshold For Conversion \| shares		22,100,000	22,100,000

Debt (Details Textual) $ / shares in Units, € in Millions						9 Months Ended
Debt (Details Textual) $ / shares in Units, € in Millions	May 01, 2020 USD ($)	Feb. 05, 2019 USD ($) salesChannel	Jan. 11, 2019 USD ($) $ / shares shares	Dec. 17, 2018 USD ($)	Apr. 19, 2017 EUR (€)	Oct. 02, 2020 USD ($)	Sep. 27, 2019 USD ($)	Dec. 31, 2022	Jun. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Sep. 30, 2020	Jun. 30, 2020	Apr. 19, 2017 USD ($)
Repayments of Long-term Debt						$ 40,000,000	$ 533,437,000
Pricing percentage fee	0.50%
Long-term Debt, Weighted Average Interest Rate						1.91%
Line of Credit Facility, Remaining Borrowing Capacity						$ 975,000,000
Repayment of a portion of Term Loan Facilities and Revolver \| €					€ 283.5
Gross proceeds			$ 460,000,000			$ 460,000,000.0
Tangible Equity Units Issued, Number \| shares			4,000,000
Interest Rate of Tangible Equity Notes			5.75%			6.50%
Fair value per unit \| $ / shares			$ 100
Tangible Equity Units Issued, Cash Proceeds			$ 447,700,000
Proceeds from Sale of Tangible Equity Units Prepaid Stock Purchase Contracts			377,800,000
Proceeds from Sale of Tangible Equity Units Senior Amortizing Notes			$ 69,900,000
Tangible Equity Units Issued, Number, Additional Issuable \| shares			600,000
Letter of Credit Subfacility, Maximum Borrowing Capacity						$ 390,200,000
Letters of Credit, Amount Outstanding						84,300,000
Debt Instrument, Unamortized Discount						24,100,000
Number of Senior Note Trances \| salesChannel		2
2024 Notes [Member]
Proceeds from borrowings on senior unsecured notes		$ 600,000,000
Debt Instrument, Interest Rate, Stated Percentage		6.00%
Term A1 Loan [Member]
Debt Instrument, Face Amount						$ 825,000,000
2026 Notes [Member]
Proceeds from borrowings on senior unsecured notes		$ 400,000,000
Debt Instrument, Interest Rate, Stated Percentage		6.375%
Senior Notes [Member]
Proceeds from borrowings on senior unsecured notes \| €					€ 350.0
Euro Bond Coupon Rate						3.25%
Deferred Finance Costs, Net															$ 6,000,000.0
Bilateral agreements [Member]
Line of Credit Facility, Maximum Borrowing Capacity						$ 189,500,000
New Revolving Credit Facility [Member] \| DJO Global Inc Financing Facilities [Member]
Line of Credit Sub Facility Maximum Borrowing Capacity Available for Specific Future Transaction				$ 50,000,000
Eurodollar
Pricing percentage fee	2.50%
Base Rate
Pricing percentage fee	1.50%
Revolving Credit Facility
Deferred Finance Costs, Net						11,100,000
Revolving Credit Facility \| New Revolving Credit Facility [Member] \| DJO Global Inc Financing Facilities [Member]
Line of Credit Facility, Maximum Borrowing Capacity						$ 975,000,000
Amended Credit Facility
Unrestricted cash and cash equivalents available for deduction from debt component of total leverage ratio	$ 125,000,000
Debt instrument covenant maximum total leverage ratio	4.50												6.50	5.75
Debt instrument covenant minimum interest coverage ratio													2.75	3.00
Debt instrument, gross leverage ratio	5.00
Scenario, Forecast \| Amended Credit Facility
Debt instrument covenant maximum total leverage ratio								3.50	4.00	4.25	4.50	5.25
Debt instrument covenant minimum interest coverage ratio											3.00

Accrued Liabilities Chart (Details) - USD ($)
$ in Thousands

Oct. 02, 2020

Dec. 31, 2019

Accrued Liabilities [Abstract]

Accrued payroll

$ 87,337

$ 100,290

Accrued taxes

65,995

55,258

Accrued asbestos-related liability

^[1]

62,310

64,394

Warranty liability - current portion

14,991

15,513

Accrued restructuring liability - current portion

2,448

6,961

Accrued third-party commissions

25,719

30,768

Customer advances and billing in excess of costs incurred

30,436

16,009

Operating Lease, Liability, Current

39,633

40,021

Accrued interest

16,986

27,333

Other

105,410

113,343

Accrued liabilities

$ 451,265

$ 469,890

[1]

Represents current accruals for probable and reasonably estimable asbestos-related liability costs that the Company believes the subsidiaries will pay, and unpaid legal costs related to defending themselves against asbestos-related liability claims and legal action against the Company’s insurers, which is included in Accrued liabilities in the Condensed Consolidated Balance Sheets.

Net Income Per Share (Details) - USD ($)
$ / shares in Units, $ in Thousands

3 Months Ended

9 Months Ended

Oct. 02, 2020

Sep. 27, 2019

Oct. 02, 2020

Sep. 27, 2019

Earnings Per Share [Abstract]

Net Income (loss) from continuing operations attributable to Parent

^[1]

$ 16,047

$ 2,901

$ 20,319

$ (18,636)

Weighted-average shares of Common stock outstanding - basic (in shares)

136,832,909

136,121,017

136,730,112

135,440,566

Net income (loss) per share, continuing operations, basic (in usd per share)

$ 0.12

$ 0.02

$ 0.15

$ (0.14)

Net effect of potentially dilutive securities - stock options, restricted stock units and tangible equity units

1,257,701

929,143

2,339,794

Weighted-average shares of Common stock outstanding - diluted (in shares)

138,090,610

137,050,160

139,069,906

135,440,566

Net income (loss) per share, continuing operations, diluted (in usd per share)

$ 0.12

$ 0.02

$ 0.15

$ (0.14)

Net income from continuing operations, tax

$ 800

$ 900

$ 2,200

$ 3,100

[1]

Net income (loss) from continuing operations attributable to Colfax Corporation for the respective periods is calculated using Net income (loss) from continuing operations less the continuing operations component of the income attributable to noncontrolling interest, net of taxes, of $0.8 million and $2.2 million for the three and nine months ended October 2, 2020, and $0.9 million and $3.1 million for the three and nine months ended September 27, 2019, respectively.

- Definition

The amount of net income (loss) from continuing operations per each share of common stock or unit outstanding during the reporting period.

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+ Details

- Definition

The amount of net income (loss) derived from continuing operations during the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

Foreign Currency Contracts Notional Values (Details) - USD ($) $ in Thousands	Oct. 02, 2020	Dec. 31, 2019
Derivative Asset, Notional Amount	$ 252,907	$ 135,808
Foreign currency contracts related to customer sales contracts \| Not Designated As Hedging Instrument
Derivative Asset, Notional Amount	149,376	28,718
Foreign currency contracts related to supplier purchase contracts \| Not Designated As Hedging Instrument
Derivative Asset, Notional Amount	$ 103,531	$ 107,090

Inventories, Net (Text Block)

9 Months Ended

Oct. 02, 2020

Inventory Disclosure [Abstract]

Inventories, Net

Inventories, net consisted of the following:


	October 2, 2020		December 31, 2019
	(In thousands)
Raw materials	$	103,070	$	115,587
Work in process	42,980		37,019
Finished goods	459,386		475,933
	605,436		628,539

Less: allowance for excess, slow-moving and obsolete inventory	(69,384)		(56,981)
Inventories, net	$	536,052	$	571,558

Net Income Per Share (Details Textual) - shares shares in Millions	3 Months Ended		9 Months Ended
	Oct. 02, 2020	Sep. 27, 2019	Oct. 02, 2020	Sep. 27, 2019
Earnings Per Share, Basic
Weighted Average Number Of Shares Outstanding, Tangible Equity Units, Diluted (in shares)			1.2
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	2.8	4.4	4.2	4.6
Tangible Equity Unit
Earnings Per Share, Basic
Weighted Average Number Of Shares Outstanding, Tangible Equity Units, Basic (in shares)	18.4	18.4	18.4	18.4

Acquisitions Acquisitions (Notes)

9 Months Ended

Oct. 02, 2020

Business Combinations [Abstract]

Acquisition

On February 22, 2019, Colfax completed the purchase of DJO for $3.15 billion, subject to certain adjustments set forth in the purchase agreement.

During the three and nine months ended October 2, 2020 and September 27, 2019, the Company incurred $0.6 million, $0.7 million, $3.2 million and $56.7 million, respectively, of advisory, legal, audit, valuation and other professional service fees in connection with the DJO acquisition. Such fees are included in Selling, general and administrative expense in the Condensed Consolidated Statement of Operations.

The DJO acquisition was accounted for using the acquisition method of accounting and accordingly, the Condensed Consolidated Financial Statements include the results of operations from the date of acquisition. The following unaudited proforma financial information presents Colfax’s consolidated financial information assuming the acquisition had taken place on January 1, 2019. These amounts are presented in accordance with GAAP, consistent with the Company’s accounting policies.


	Three Months Ended				Nine Months Ended
	October 2, 2020		September 27, 2019		October 2, 2020		September 27, 2019
	(Unaudited, in thousands)
Net sales	$	805,931	$	846,519	$	2,242,647	$	2,608,251
Net income from continuing operations attributable to Colfax Corporation	17,927		7,676		27,575		72,857

Financial Instruments and Fair Value Measurements (Text Block)

9 Months Ended

Oct. 02, 2020

Financial Instruments and Fair Value Measurements [Abstract]

Financial Instruments and Fair Value Measurements

The carrying values of financial instruments, including Trade receivables and Accounts payable, approximate their fair values due to their short-term maturities. The $2.2 billion and $2.3 billion estimated fair value of the Company’s debt as of October 2, 2020 and December 31, 2019, respectively, was based on current interest rates for similar types of borrowings and is in Level Two of the fair value hierarchy. The estimated fair values may not represent actual values of the financial instruments that could be realized as of the balance sheet date or that will be realized in the future.

A summary of the Company’s assets and liabilities that are measured at fair value for each fair value hierarchy level for the periods presented is as follows:


	October 2, 2020
	Level One		Level Two		Level Three		Total
	(In thousands)
Assets:
Cash equivalents	$	3,632	$	—	$	—	$	3,632


Foreign currency contracts related to sales - not designated as hedges	—		2,403		—		2,403

Foreign currency contracts related to purchases - not designated as hedges	—		580		—		580
Deferred compensation plans	—		10,045		—		10,045
	$	3,632	$	13,028	$	—	$	16,660

Liabilities:

Foreign currency contracts related to sales - not designated as hedges	$	—	$	1,176	$	—	$	1,176

Foreign currency contracts related to purchases - not designated as hedges	—		918		—		918
Deferred compensation plans	—		10,045		—		10,045
	$	—	$	12,139	$	—	$	12,139


	December 31, 2019
	Level One		Level Two		Level Three		Total
	(In thousands)
Assets:
Cash equivalents	$	13,125	$	—	$	—	$	13,125


Foreign currency contracts related to sales - not designated as hedges	—		74		—		74

Foreign currency contracts related to purchases - not designated as hedges	—		408		—		408
Deferred compensation plans	—		8,870		—		8,870
	$	13,125	$	9,352	$	—	$	22,477

Liabilities:

Foreign currency contracts related to sales - not designated as hedges	$	—	$	328	$	—	$	328

Foreign currency contracts related to purchases - not designated as hedges	—		853		—		853
Deferred compensation plans	—		8,870		—		8,870
	$	—	$	10,051	$	—	$	10,051

There were no transfers in or out of Level One, Two or Three during the nine months ended October 2, 2020.

Foreign Currency Contracts

As of October 2, 2020 and December 31, 2019, the Company had foreign currency contracts with the following notional values:


	October 2, 2020		December 31, 2019
	(In thousands)
Foreign currency contracts sold - not designated as hedges	$	149,376	$	28,718

Foreign currency contracts purchased - not designated as hedges	103,531		107,090

Total foreign currency derivatives	$	252,907	$	135,808

The Company recognized the following in its Condensed Consolidated Financial Statements related to its derivative instruments:


	Three Months Ended				Nine Months Ended
	October 2, 2020		September 27, 2019		October 2, 2020		September 27, 2019
	(In thousands)
Contracts Designated as Hedges:






Unrealized gain (loss) on net investment hedges(1)	$	(14,456)	$	12,807	$	(12,700)	$	14,258
Contracts Not Designated in a Hedge Relationship:
Foreign Currency Contracts - related to customer sales contracts:
Unrealized gain	106		423		638		215
Realized gain (loss)	701		(165)		(204)		(1,232)
Foreign Currency Contracts - related to supplier purchases contracts:
Unrealized gain (loss)	(1,000)		(732)		841		(81)
Realized gain (loss)	(569)		1		(818)		455

(1) The unrealized gain on net investment hedges is attributable to the change in valuation of Euro denominated debt.

Revenue (Notes)

9 Months Ended

Oct. 02, 2020

Revenue [Abstract]

Revenue

The Company’s Fabrication Technology segment formulates, develops, manufactures and supplies consumable products and equipment. Substantially all revenue from the Fabrication Technology business is recognized at a point in time. The Company disaggregates its Fabrication Technology revenue into the following product groups:


	Three Months Ended				Nine Months Ended
	October 2, 2020		September 27, 2019		October 2, 2020		September 27, 2019
	(In thousands)
Equipment	$	157,730	$	162,531	$	443,563	$	525,148
Consumables	333,767		376,697		987,838		1,167,199
Total	$	491,497	$	539,228	$	1,431,401	$	1,692,347

Contracts with customers in the consumables product grouping generally have a shorter fulfillment period than equipment contracts.

The Company’s Medical Technology segment provides products and services spanning the full continuum of patient care, from injury prevention to rehabilitation. While the Company’s Medical Technology sales are primarily derived from three sales channels including dealers and distributors, insurance, and direct to consumers and hospitals, substantially all its revenue is recognized at a point in time.

The Company disaggregates its Medical Technology revenue into the following product groups:


	Three Months Ended				Nine Months Ended
	October 2, 2020		September 27, 2019		October 2, 2020		September 27, 2019(1)
	(In thousands)
Prevention & Rehabilitation	$	220,461	$	221,314	$	566,983	$	533,986
Reconstructive	93,973		85,977		244,263		212,752
Total	$	314,434	$	307,291	$	811,246	$	746,738

(1) For the nine months ended September 27, 2019, the Medical Technology segment includes results from the acquisition date of February 22, 2019.

Given the nature of the Fabrication Technology and Medical Technology businesses, the total amount of unsatisfied performance obligations with an original contract duration of greater than one year as of October 2, 2020 is immaterial.

The nature of the Company’s contracts gives rise to certain types of variable consideration, including rebates, implicit price concessions, and other discounts. The Company includes estimated amounts of variable consideration in the transaction price to the extent that it is probable there will not be a significant reversal of revenue.

In some circumstances, customers are billed in advance of revenue recognition, resulting in contract liabilities. As of December 31, 2019 and 2018, total contract liabilities were $14.8 million and $13.0 million, respectively, which related to the Fabrication Technology business. During the three and nine months ended October 2, 2020, revenue recognized that was included in the contract liability balance at the beginning of the year was $4.5 million and $13.2 million, respectively. During the three and nine months ended September 27, 2019, revenue recognized that was included in the contract liability balance at the beginning of the year was $4.8 million and $13.0 million, respectively. As of October 2, 2020 and September 27, 2019, total contract liabilities were $30.4 million and $15.6 million, respectively, and were included in Accrued liabilities on the Company’s Condensed Consolidated Balance Sheets. The contract liabilities as of October 2, 2020 include $11.8 million of certain one-time advance payments in the Medical Technology business.

Allowance for Credit Losses

The Company adopted ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments as of January 1, 2020. The estimate of current expected credit losses on trade receivables considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Management elected to disaggregate trade receivables into business segments due to risk characteristics unique to each segment given the individual lines of business and market. Pooling was further disaggregated based on either geography or product type.

The Company evaluated multiple approaches before concluding that a loss rate methodology best matched data capabilities. The Company leveraged historical write-offs over a defined lookback period in deriving a historical loss rate. The expected credit loss model further considers current conditions and reasonable and supportable forecasts using an adjustment for current and projected macroeconomic factors. Management identified appropriate macroeconomic indicators based on tangible correlation to historical losses considering the location and risks associated with the Company.

A summary of the activity in the Company’s allowance for credit losses included within Trade receivables in the Condensed Consolidated Balance Sheets is as follows:


	Nine Months Ended October 2, 2020
	Balance at Beginning of Period		Charged to Expense, net		Write-Offs and Deductions		Foreign Currency Translation		Balance at End of Period
	(In thousands)
Allowance for credit losses	$	36,009	$	5,099	$	(4,251)	$	(1,882)	$	34,975

Debt Components (Details) - USD ($) $ in Thousands	Oct. 02, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Total Debt	$ 2,218,679	$ 2,311,826
Less: current portion	(26,954)	(27,642)
Long-term debt	2,191,725	2,284,184
Term loan
Debt Instrument [Line Items]
Total Debt	781,341	822,945
Euro senior notes
Debt Instrument [Line Items]
Total Debt	406,622	388,925
2024 and 2026 notes
Debt Instrument [Line Items]
Total Debt	990,799	989,236
TEU amortizing notes
Debt Instrument [Line Items]
Total Debt	37,127	54,044
Revolving credit facilities and other
Debt Instrument [Line Items]
Total Debt	$ 2,790	$ 56,676

Discontinued Operations - Narratives (Details) - USD ($) $ in Thousands	3 Months Ended				9 Months Ended		12 Months Ended
	Oct. 02, 2020	Dec. 31, 2019	Sep. 27, 2019	Jun. 28, 2019	Oct. 02, 2020	Sep. 27, 2019	Dec. 31, 2019	Sep. 30, 2019
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Divestiture impairment loss					$ 0	$ 481,000
Less: income attributable to noncontrolling interest, net of taxes	$ 789		$ 2,320		2,243	8,970
Air and Gas Handling Business
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total consideration								$ 1,800,000
Cash consideration received								$ 1,670,000
Discontinued operation, loss on discontinued operations			0	$ 481,000	0	481,000
Divestiture impairment loss	0
Accumulated other comprehensive loss				(350,000)
Gain (loss) on disposition of business		$ 14,200
Divestiture-related expense, net	$ 0		4,987		0	13,354	$ 48,600
Less: income attributable to noncontrolling interest, net of taxes			$ 1,500			5,900
Cash provided by operating activities, discontinued operations					$ 7,200	18,000
Cash provided by investing activities, discontinued operations						$ 27,500
Goodwill \| Air and Gas Handling Business
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Divestiture impairment loss				449,000
Impairment of Long-lived Assets \| Air and Gas Handling Business
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Divestiture impairment loss				$ 32,000

Financial Instruments and Fair Value Measurements (Tables)

9 Months Ended

Oct. 02, 2020

Financial Instruments and Fair Value Measurements [Abstract]

Company's assets and liabilities measured at fair value for each fair value hierarchy level

A summary of the Company’s assets and liabilities that are measured at fair value for each fair value hierarchy level for the periods presented is as follows:


	October 2, 2020
	Level One		Level Two		Level Three		Total
	(In thousands)
Assets:
Cash equivalents	$	3,632	$	—	$	—	$	3,632


Foreign currency contracts related to sales - not designated as hedges	—		2,403		—		2,403

Foreign currency contracts related to purchases - not designated as hedges	—		580		—		580
Deferred compensation plans	—		10,045		—		10,045
	$	3,632	$	13,028	$	—	$	16,660

Liabilities:

Foreign currency contracts related to sales - not designated as hedges	$	—	$	1,176	$	—	$	1,176

Foreign currency contracts related to purchases - not designated as hedges	—		918		—		918
Deferred compensation plans	—		10,045		—		10,045
	$	—	$	12,139	$	—	$	12,139


	December 31, 2019
	Level One		Level Two		Level Three		Total
	(In thousands)
Assets:
Cash equivalents	$	13,125	$	—	$	—	$	13,125


Foreign currency contracts related to sales - not designated as hedges	—		74		—		74

Foreign currency contracts related to purchases - not designated as hedges	—		408		—		408
Deferred compensation plans	—		8,870		—		8,870
	$	13,125	$	9,352	$	—	$	22,477

Liabilities:

Foreign currency contracts related to sales - not designated as hedges	$	—	$	328	$	—	$	328

Foreign currency contracts related to purchases - not designated as hedges	—		853		—		853
Deferred compensation plans	—		8,870		—		8,870
	$	—	$	10,051	$	—	$	10,051

Schedule of Foreign Exchange Contracts, Notional Values

As of October 2, 2020 and December 31, 2019, the Company had foreign currency contracts with the following notional values:


	October 2, 2020		December 31, 2019
	(In thousands)
Foreign currency contracts sold - not designated as hedges	$	149,376	$	28,718

Foreign currency contracts purchased - not designated as hedges	103,531		107,090

Total foreign currency derivatives	$	252,907	$	135,808

Schedule of Derivative Instruments, Gain (Loss) in Condensed Consolidated Financial Statements

The Company recognized the following in its Condensed Consolidated Financial Statements related to its derivative instruments:


	Three Months Ended				Nine Months Ended
	October 2, 2020		September 27, 2019		October 2, 2020		September 27, 2019
	(In thousands)
Contracts Designated as Hedges:






Unrealized gain (loss) on net investment hedges(1)	$	(14,456)	$	12,807	$	(12,700)	$	14,258
Contracts Not Designated in a Hedge Relationship:
Foreign Currency Contracts - related to customer sales contracts:
Unrealized gain	106		423		638		215
Realized gain (loss)	701		(165)		(204)		(1,232)
Foreign Currency Contracts - related to supplier purchases contracts:
Unrealized gain (loss)	(1,000)		(732)		841		(81)
Realized gain (loss)	(569)		1		(818)		455

(1) The unrealized gain on net investment hedges is attributable to the change in valuation of Euro denominated debt.

Acquisitions - Narrative (Details) - DJO Acquisition - USD ($) $ in Millions		3 Months Ended		9 Months Ended
	Feb. 22, 2019	Oct. 02, 2020	Sep. 27, 2019	Oct. 02, 2020	Sep. 27, 2019
Business Acquisition [Line Items]
Purchase price for merger agreement	$ 3,150.0
Professional Fees		$ 0.6	$ 3.2	$ 0.7	$ 56.7

COVER PAGE	9 Months Ended
COVER PAGE	Oct. 02, 2020 shares
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Oct. 02, 2020
Document Transition Report	false
Entity File Number	001-34045
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	54-1887631
Entity Address, Address Line One	420 National Business Parkway,
Entity Address, Address Line Two	5th Floor
Entity Address, City or Town	Annapolis Junction,
Entity Address, State or Province	MD
Entity Address, Postal Zip Code	20701
City Area Code	(301)
Local Phone Number	323-9000
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	118,457,179
Entity Registrant Name	Colfax CORP
Entity Central Index Key	0001420800
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2020
Amendment Flag	false
Common Stock
Entity Information [Line Items]
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	CFX
Security Exchange Name	NYSE
Tangible Equity Unit
Entity Information [Line Items]
Title of 12(b) Security	5.75% Tangible Equity Units
Trading Symbol	CFXA
Security Exchange Name	NYSE

Inventories, Net (Tables)

9 Months Ended

Oct. 02, 2020

Inventory Disclosure [Abstract]

Schedule of Inventory, Current

Inventories, net consisted of the following:


	October 2, 2020		December 31, 2019
	(In thousands)
Raw materials	$	103,070	$	115,587
Work in process	42,980		37,019
Finished goods	459,386		475,933
	605,436		628,539

Less: allowance for excess, slow-moving and obsolete inventory	(69,384)		(56,981)
Inventories, net	$	536,052	$	571,558

Accrued Liabilities (Text Block)

9 Months Ended

Oct. 02, 2020

Accrued Liabilities [Abstract]

Accrued Liabilities

Accrued liabilities in the Condensed Consolidated Balance Sheets consisted of the following:


	October 2, 2020		December 31, 2019
	(In thousands)
Accrued compensation and related benefits	$	87,337	$	100,290

Accrued taxes	65,995		55,258
Accrued asbestos-related liability	62,310		64,394
Warranty liability - current portion	14,991		15,513
Accrued restructuring liability - current portion	2,448		6,961
Accrued third-party commissions	25,719		30,768
Customer advances and billings in excess of costs incurred	30,436		16,009
Lease liability - current portion	39,633		40,021
Accrued interest	16,986		27,333
Other	105,410		113,343
Accrued liabilities	$	451,265	$	469,890

Warranty Liability

The activity in the Company’s warranty liability consisted of the following:


	Nine Months Ended
	October 2, 2020		September 27, 2019
	(In thousands)
Warranty liability, beginning of period	$	15,528	$	12,312
Accrued warranty expense	5,613		5,456
Changes in estimates related to pre-existing warranties	1,108		1,256
Cost of warranty service work performed	(7,003)		(7,783)
Acquisition-related liability	—		5,356
Foreign exchange translation effect	(255)		(427)
Warranty liability, end of period	$	14,991	$	16,170

Accrued Restructuring Liability

The Company’s restructuring programs include a series of actions to reduce the structural costs of the Company. A summary of the activity in the Company’s restructuring liability included in Accrued liabilities and Other liabilities in the Condensed Consolidated Balance Sheets is as follows:


	Nine Months Ended October 2, 2020
	Balance at Beginning of Period		Provisions		Payments		Foreign Currency Translation		Balance at End of Period(3)
	(In thousands)
Restructuring and other related charges:
Fabrication Technology:
Termination benefits(1)	$	1,638	$	5,207	$	(6,105)	$	(23)	$	717
Facility closure costs(2)	1,284		4,474		(5,484)		—		274
	2,922		9,681		(11,589)		(23)		991
Non-cash charges			1,745
			11,426
Medical Technology:
Termination benefits(1)	3,919		2,026		(4,756)		12		1,201
Facility closure costs(2)	257		15,062		(15,021)		—		298
	4,176		17,088		(19,777)		12		1,499
Non-cash charges			—
			17,088



Total Colfax Corporation:
Total restructuring liability activity	$	7,098	$	26,769	$	(31,366)	$	(11)	$	2,490
Total Non-cash charges			1,745
			$	28,514

(1) Includes severance and other termination benefits, including outplacement services.

(2) Includes the cost of relocating associates, relocating equipment and lease termination expense in connection with the closure of facilities. Restructuring charges in the Medical Technology segment during the nine months ended October 2, 2020 include costs related to product and distribution channel transformations, facilities optimization, and integration charges. Restructuring charges in the Medical Technology segment also include $4.9 million of expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the nine months ended October 2, 2020.

(3) As of October 2, 2020, $2.4 million of the Company’s restructuring liability was included in Accrued liabilities, whereas less than $0.1 million of the Company’s restructuring liability was included in Other liabilities.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 02, 2020	Sep. 27, 2019	Oct. 02, 2020	Sep. 27, 2019
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 14,195	$ 12,794	$ 11,656	$ (501,813)
Other comprehensive income (loss):
Foreign currency translation, net of tax expense of $258, $1,787, $652 and $1,375	51,610	(135,157)	(49,316)	(128,620)
Unrealized gain (loss) on hedging activities, net of tax expense (benefit) of $(4,344), $4,411, $(4,448) and $4,102	(12,076)	11,757	(12,700)	13,413
Amounts reclassified from Accumulated other comprehensive loss:
Amortization of pension and other post-retirement net actuarial gain (loss), net of tax expense (benefit) of $330, $(5,960), $767 and $(7,679)	1,152	(12,206)	2,814	(21,166)
Amortization of pension and other post-retirement prior service cost	0	0	0	32
Other comprehensive income (loss)	40,686	(135,606)	(59,202)	(136,341)
Comprehensive income (loss)	54,881	(122,812)	(47,546)	(638,154)
Less: comprehensive income (loss) attributable to noncontrolling interest	1,987	(3,384)	1,192	5,272
Comprehensive income (loss) attributable to Colfax Corporation	$ 52,894	$ (119,428)	$ (48,738)	$ (643,426)

CONDENSED CONSOLIDATED STATEMENT OF EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Noncontrolling Interest
Cumulative effect of accounting change \| Accounting Standards Update 2018-02				$ 15,368	$ (15,368)
Shares, Outstanding (in shares) at Dec. 31, 2018		117,275,217
Balance at Dec. 31, 2018	$ 3,476,946	$ 117	$ 3,057,982	991,838	(780,177)	$ 207,186
Net income (loss)	(48,002)			(52,023)		4,021
Distributions to noncontrolling owners	(2,170)					(2,170)
Noncontrolling interest share repurchase	(92,721)		(22,409)		(21,372)	(48,940)
Other comprehensive loss, net of tax	22,172				18,053	4,119
Issuance of Tangible Equity Units	377,814		377,814
Common stock-based award activity (in shares)		283,197
Common stock-based award activity	7,677	$ 1	7,676
Shares, Outstanding (in shares) at Mar. 29, 2019		117,558,414
Balance at Mar. 29, 2019	3,741,716	$ 118	3,421,063	955,183	(798,864)	164,216
Other comprehensive income, tax	(413)
Shares, Outstanding (in shares) at Dec. 31, 2018		117,275,217
Balance at Dec. 31, 2018	3,476,946	$ 117	3,057,982	991,838	(780,177)	207,186
Net income (loss)	(501,813)
Other comprehensive loss, net of tax	(136,341)
Shares, Outstanding (in shares) at Sep. 27, 2019		117,756,730
Balance at Sep. 27, 2019	3,132,938	$ 118	3,434,617	496,423	(949,150)	150,930
Shares, Outstanding (in shares) at Mar. 29, 2019		117,558,414
Balance at Mar. 29, 2019	3,741,716	$ 118	3,421,063	955,183	(798,864)	164,216
Net income (loss)	(466,605)			(469,234)		2,629
Distributions to noncontrolling owners	(2,970)					(2,970)
Noncontrolling interest share repurchase	(366)		(565)		410	(211)
Other comprehensive loss, net of tax	(22,907)				(20,794)	(2,113)
Common stock-based award activity (in shares)		108,945
Common stock-based award activity	7,481		7,481
Shares, Outstanding (in shares) at Jun. 28, 2019		117,667,359
Balance at Jun. 28, 2019	3,256,349	$ 118	3,427,979	485,949	(819,248)	161,551
Other comprehensive income, tax	(1,981)
Net income (loss)	12,794			10,474		2,320
Distributions to noncontrolling owners	(7,237)					(7,237)
Other comprehensive loss, net of tax	(135,606)				(129,902)	(5,704)
Common stock-based award activity (in shares)		89,371
Common stock-based award activity	6,638		6,638
Shares, Outstanding (in shares) at Sep. 27, 2019		117,756,730
Balance at Sep. 27, 2019	3,132,938	$ 118	3,434,617	496,423	(949,150)	150,930
Other comprehensive income, tax	193
Cumulative effect of accounting change \| Accounting Standards Update 2016-13	(4,818)			(4,818)
Shares, Outstanding (in shares) at Dec. 31, 2019		118,059,082
Balance at Dec. 31, 2019	3,489,628	$ 118	3,445,597	479,560	(483,845)	48,198
Net income (loss)	5,508			4,481		1,027
Distributions to noncontrolling owners	(8)					(8)
Other comprehensive loss, net of tax	(160,890)				(158,297)	(2,593)
Common stock-based award activity (in shares)		268,323
Common stock-based award activity	8,344		8,344
Shares, Outstanding (in shares) at Apr. 03, 2020		118,327,405
Balance at Apr. 03, 2020	3,337,764	$ 118	3,453,941	479,223	(642,142)	46,624
Other comprehensive income, tax	4,644
Shares, Outstanding (in shares) at Dec. 31, 2019		118,059,082
Balance at Dec. 31, 2019	3,489,628	$ 118	3,445,597	479,560	(483,845)	48,198
Net income (loss)	11,656
Other comprehensive loss, net of tax	(59,202)
Shares, Outstanding (in shares) at Oct. 02, 2020		118,457,179
Balance at Oct. 02, 2020	3,457,469	$ 118	3,470,169	484,155	(541,996)	45,023
Shares, Outstanding (in shares) at Apr. 03, 2020		118,327,405
Balance at Apr. 03, 2020	3,337,764	$ 118	3,453,941	479,223	(642,142)	46,624
Net income (loss)	(8,047)			(8,474)		427
Distributions to noncontrolling owners	(3,734)					(3,734)
Other comprehensive loss, net of tax	61,002				60,658	344
Common stock-based award activity (in shares)		61,608
Common stock-based award activity	8,591		8,591
Shares, Outstanding (in shares) at Jul. 03, 2020		118,389,013
Balance at Jul. 03, 2020	3,395,576	$ 118	3,462,532	470,749	(581,484)	43,661
Other comprehensive income, tax	(3,917)
Net income (loss)	14,195			13,406		789
Distributions to noncontrolling owners	(625)					(625)
Other comprehensive loss, net of tax	40,686				39,488	1,198
Common stock-based award activity (in shares)		68,166
Common stock-based award activity	7,637		7,637
Shares, Outstanding (in shares) at Oct. 02, 2020		118,457,179
Balance at Oct. 02, 2020	3,457,469	$ 118	$ 3,470,169	$ 484,155	$ (541,996)	$ 45,023
Other comprehensive income, tax	$ (3,756)

Recently Issued Accounting Pronouncements Details Textual (Details) - Accounting Standards Update 2016-13 - USD ($) $ in Thousands	Jan. 01, 2020	Dec. 31, 2019
Cumulative Effect of New Accounting Principle in Period of Adoption		$ (4,818)
Accumulated Other Comprehensive Loss
Cumulative Effect of New Accounting Principle in Period of Adoption	$ 4,800

Recently Issued Accounting Pronouncements (Tables)

9 Months Ended

Oct. 02, 2020

Accounting Changes and Error Corrections [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

Accounting Guidance Implemented in 2020

Standard

Description

Effective Date

ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

January 1, 2020

ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement

January 1, 2020

New Accounting Guidance to be Implemented

Standard

Description

Anticipated Impact

Effective Date

ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans

The ASU modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.

This accounting standard update impacts disclosures only. The Company is currently evaluating the impact of this ASU on its consolidated financial statement disclosures and the timing of adoption.

January 1, 2021

ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes

The Company is currently evaluating the impact of this ASU on its consolidated financial statements and the timing of adoption.

January 1, 2021

Accrued Liabilities (Tables)

9 Months Ended

Oct. 02, 2020

Accrued Liabilities [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities in the Condensed Consolidated Balance Sheets consisted of the following:


	October 2, 2020		December 31, 2019
	(In thousands)
Accrued compensation and related benefits	$	87,337	$	100,290

Accrued taxes	65,995		55,258
Accrued asbestos-related liability	62,310		64,394
Warranty liability - current portion	14,991		15,513
Accrued restructuring liability - current portion	2,448		6,961
Accrued third-party commissions	25,719		30,768
Customer advances and billings in excess of costs incurred	30,436		16,009
Lease liability - current portion	39,633		40,021
Accrued interest	16,986		27,333
Other	105,410		113,343
Accrued liabilities	$	451,265	$	469,890

Schedule of Product Warranty Liability

The activity in the Company’s warranty liability consisted of the following:


	Nine Months Ended
	October 2, 2020		September 27, 2019
	(In thousands)
Warranty liability, beginning of period	$	15,528	$	12,312
Accrued warranty expense	5,613		5,456
Changes in estimates related to pre-existing warranties	1,108		1,256
Cost of warranty service work performed	(7,003)		(7,783)
Acquisition-related liability	—		5,356
Foreign exchange translation effect	(255)		(427)
Warranty liability, end of period	$	14,991	$	16,170

Schedule of Restructuring Reserve by Type of Cost

A summary of the activity in the Company’s restructuring liability included in Accrued liabilities and Other liabilities in the Condensed Consolidated Balance Sheets is as follows:


	Nine Months Ended October 2, 2020
	Balance at Beginning of Period		Provisions		Payments		Foreign Currency Translation		Balance at End of Period(3)
	(In thousands)
Restructuring and other related charges:
Fabrication Technology:
Termination benefits(1)	$	1,638	$	5,207	$	(6,105)	$	(23)	$	717
Facility closure costs(2)	1,284		4,474		(5,484)		—		274
	2,922		9,681		(11,589)		(23)		991
Non-cash charges			1,745
			11,426
Medical Technology:
Termination benefits(1)	3,919		2,026		(4,756)		12		1,201
Facility closure costs(2)	257		15,062		(15,021)		—		298
	4,176		17,088		(19,777)		12		1,499
Non-cash charges			—
			17,088



Total Colfax Corporation:
Total restructuring liability activity	$	7,098	$	26,769	$	(31,366)	$	(11)	$	2,490
Total Non-cash charges			1,745
			$	28,514

(1) Includes severance and other termination benefits, including outplacement services.

Equity

9 Months Ended

Oct. 02, 2020

Equity [Abstract]

Equity

Share Repurchase Program

In 2018, the Company’s Board of Directors authorized the repurchase of shares of the Company’s Common stock from time-to-time on the open market or in privately negotiated transactions. No repurchases of the Company’s Common stock have been made under this plan since the third quarter of 2018. As of October 2, 2020, the remaining stock repurchase authorization provided by the Board of Directors was $100 million. The timing, amount and method of shares repurchased is determined by management based on its evaluation of market conditions and other factors. There is no term associated with the remaining repurchase authorization.

Accumulated Other Comprehensive Loss

The following tables present the changes in the balances of each component of Accumulated other comprehensive loss including reclassifications out of Accumulated other comprehensive loss for the nine months ended October 2, 2020 and September 27, 2019. All amounts are net of tax and noncontrolling interest, if any.


	Accumulated Other Comprehensive Loss Components
	Net Unrecognized Pension and Other Post-Retirement Benefit Cost		Foreign Currency Translation Adjustment		Unrealized Gain on Hedging Activities		Total
	(In thousands)

Balance at January 1, 2020	$	(106,500)	$	(421,889)	$	44,544	$	(483,845)

Other comprehensive income (loss) before reclassifications:

Foreign currency translation adjustment	(389)		(31,747)		1,894		(30,242)
Loss on long-term intra-entity foreign currency transactions	—		(18,023)		—		(18,023)
Loss on net investment hedges	—		—		(12,700)		(12,700)


Other comprehensive income (loss) before reclassifications	(389)		(49,770)		(10,806)		(60,965)
Amounts reclassified from Accumulated other comprehensive loss	2,814		—		—		2,814

Net Other comprehensive income (loss)	2,425		(49,770)		(10,806)		(58,151)
Balance at October 2, 2020	$	(104,075)	$	(471,659)	$	33,738	$	(541,996)


	Accumulated Other Comprehensive Loss Components
	Net Unrecognized Pension and Other Post-Retirement Benefit Cost		Foreign Currency Translation Adjustment		Unrealized Gain on Hedging Activities		Total
	(In thousands)
Balance at January 1, 2019	$	(80,794)	$	(752,989)	$	38,238	$	(795,545)

Other comprehensive income (loss) before reclassifications:

Foreign currency translation adjustment	859		(120,722)		(304)		(120,167)
Loss on long-term intra-entity foreign currency transactions	—		(4,197)		—		(4,197)
Gain on net investment hedges	—		—		14,258		14,258
Unrealized gain on cash flow hedges	—		—		167		167

Other comprehensive income (loss) before reclassifications	859		(124,919)		14,121		(109,939)
Amounts reclassified from Accumulated other comprehensive loss	(22,704)		—		—		(22,704)
Noncontrolling interest share repurchase	—		(20,962)		—		(20,962)
Net Other comprehensive income (loss)	(21,845)		(145,881)		14,121		(153,605)
Balance at September 27, 2019	$	(102,639)	$	(898,870)	$	52,359	$	(949,150)

Tangible equity unit (“TEU”) offering

The proceeds from the issuance of the TEUs were allocated initially to equity and debt based on the relative fair value of the respective components of each TEU as follows:


	TEU prepaid stock purchase contracts		TEU amortizing notes		Total
	(In millions, except per unit amounts)
Fair value per unit	$	84.39	$	15.61	$	100.00

Gross proceeds	$	388.2	$	71.8	$	460.0
Less: Issuance costs	10.4		1.9		12.3
Net proceeds	$	377.8	$	69.9	$	447.7

The $377.8 million fair value of the prepaid stock purchase contracts was recorded in Additional paid-in capital in the Condensed Consolidated Balance Sheets. The fair value of the $69.9 million of TEU amortizing notes due January 2022 has both a short-term and a long-term component. Upon the issuance of the TEUs, $47.3 million was initially recorded in Long-term debt, less current portion, and $22.6 million was initially recorded in Current portion of long-term debt in the Condensed Consolidated Balance Sheets. The Company deferred certain debt issuance costs associated with the debt component of the TEUs. These amounts offset the debt liability balance in the Condensed Consolidated Balance Sheets and are being amortized over its term.

TEU prepaid stock purchase contracts

Unless previously settled at the holder’s option, for each purchase contract the Company will deliver to holders on January 15, 2022 (subject to postponement in certain limited circumstances, the “mandatory settlement date”) a number of shares of common stock. The number of shares of common stock issuable upon settlement of each purchase contract (the “settlement rate”) will be determined using the arithmetic average of the volume average weighted price for the 20 consecutive trading days beginning on, and including, the 21st scheduled trading day immediately preceding January 15, 2022 (“the Applicable Market Value”) with reference to the following settlement rates:

•if the Applicable Market Value of the common stock is greater than the threshold appreciation price of $25.00, the holder will receive 4.0000 shares of common stock for each purchase contract (the “minimum settlement rate”);

•if the Applicable Market Value of the common stock is greater than or equal to the reference price of $20.81, but less than or equal to the threshold appreciation price of $25.00, the holder will receive a number of shares of common stock for each purchase contract having a value, based on the Applicable Market Value, equal to $100; and

•if the Applicable Market Value of the common stock is less than the reference price of $20.81, the holder will receive 4.8054 shares of common stock for each purchase contract (the “maximum settlement rate”).

TEU amortizing notes

Each TEU amortizing note has an initial principal amount of $15.6099, bears interest at a rate of 6.50% per annum and has a final installment payment date of January 15, 2022. On each January 15, April 15, July 15 and October 15, the Company pays equal quarterly cash installments of $1.4375 per TEU amortizing note, which will constitute a payment of interest and a partial repayment of principal, and which cash payment in the aggregate per year will be equivalent to 5.75% per year with respect to the $100 stated amount per unit. During the three and nine months ended October 2, 2020, the Company paid $6.6 million and $19.8 million, respectively, representing a partial payment of principal and interest on the TEU amortizing notes. The TEU amortizing notes are the direct, unsecured and unsubordinated obligations of the Company and rank equally with all of the existing and future other unsecured and unsubordinated indebtedness of the Company.

Earnings per share

Unless the 4.6 million stock purchase contracts are redeemed by the Company or settled earlier at the unit holder’s option, they are mandatorily convertible into shares of Colfax common stock at not less than 4.0 shares per purchase contract or more than 4.8054 shares per purchase contract on January 15, 2022. This corresponds to not less than 18.4 million shares and not more than 22.1 million shares at the maximum. The 18.4 million minimum shares are included in the calculation of weighted-average shares of Common stock outstanding - basic. The difference between the minimum and maximum shares represents potentially dilutive securities. The Company includes them in its calculation of weighted-average shares of Common stock outstanding - diluted on a pro rata basis to the extent the effect is not anti-dilutive and the average Applicable Market Value is higher than the reference price but is less than the threshold appreciation price.

Repurchase of noncontrolling interest shares

During 2019, the Company repurchased all of the noncontrolling interest shares of its South Africa consolidated subsidiary from existing shareholders under a general offer. As a part of the Air and Gas Handling business, the subsidiary was subsequently sold on September 30, 2019, and its results of operations are included in discontinued operations for all periods presented.

Discontinued Operations (Tables)

9 Months Ended

Oct. 02, 2020

Discontinued Operations [Abstract]

Disposal Groups, Including Discontinued Operations

The key components of Loss from discontinued operations, net of taxes related to the Air and Gas Handling business for the three and nine months ended October 2, 2020 and September 27, 2019 were as follows:


	Three Months Ended				Nine Months Ended
	October 2, 2020		September 27, 2019		October 2, 2020		September 27, 2019
	(In thousands)
Net sales	$	—	$	338,885	$	—	$	998,793
Cost of sales	—		230,692		—		689,004
Selling, general and administrative expense	—		65,117		—		194,562
Restructuring and other related charges	—		4,987		—		13,354
Goodwill impairment charge	—		—		—		481,000
Divestiture-related expense(1)	846		4,481		7,419		11,692
Operating loss	(846)		33,608		(7,419)		(390,819)
Interest expense(2)	—		12,779		—		38,899
Pension settlement loss	—		—		—		43,774

Loss from discontinued operations before income taxes	(846)		20,829		(7,419)		(473,492)
Income tax expense (benefit)	(198)		9,809		(1,267)		5,387
Loss from discontinued operations, net of taxes	$	(648)	$	11,020	$	(6,152)	$	(478,879)

(1) Primarily related to professional and consulting fees associated with the divestiture including seller due diligence and preparation of regulatory filings, as well as other disposition-related activities.

(2) The Company reclassified a portion of interest expense from its Term Loan Facilities associated with the mandatory repayment using net proceeds from the sale of the business.

- Definition

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721659-107760

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721665-107760

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
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+ Details

Income Taxes	9 Months Ended
Income Taxes	Oct. 02, 2020
Income Tax Disclosure [Abstract]
Income Taxes	During the three and nine months ended October 2, 2020, Income from continuing operations before income taxes was $36.4 million and $25.2 million, respectively, while the income tax expense was $19.5 million and $2.6 million, respectively. The effective tax rates were 53.7% and 10.5% for the three and nine months ended October 2, 2020, respectively. The effective tax rate for the three months ended October 2, 2020 differed from the 2020 U.S. federal statutory rate of 21% mainly due to the net impact of additional U.S. tax on international operations, withholding taxes, and certain non-deductible expenses. These unfavorable impacts were partially offset by the impact of U.S. tax credits, benefit from U.S. state tax losses, and the realization of tax benefits associated with effective settlements on uncertain tax positions. The effective tax rate for the nine months ended October 2, 2020 differed from the 2020 U.S. federal statutory rate of 21% mainly due to the net impact of U.S. tax credits and benefit from U.S. state tax losses, a discrete tax benefit associated with the filing of timely elected changes to U.S. Federal tax returns to credit rather than to deduct foreign taxes, the impact of an enacted law change in India, and the realization of tax benefits associated with effective settlements on uncertain tax positions. These favorable impacts were partially offset by the impact of additional U.S. tax on international operations, withholding taxes, and certain non-deductible expenses. In conjunction with the filing of the timely elected changes to credit rather than to deduct foreign taxes, the Company obtained additional foreign tax credit carryforwards. The Company evaluated all positive and negative evidence in determining the realizability of these deferred tax assets and based on such evidence, concluded a full valuation allowance was needed. During the three and nine months ended September 27, 2019, Income (loss) from continuing operations before income taxes was $2.4 million and $(8.7) million, respectively, while the income tax expense (benefit) was $(1.4) million and $6.8 million, respectively. The effective tax rates were (56.0)% and (78.5)% for the three and nine months ended September 27, 2019, respectively. The effective tax rate for the three months ended September 27, 2019 differed from the 2019 U.S. federal statutory rate of 21% mainly due to a discrete tax benefit associated with the enactment of tax law changes in a European jurisdiction offset in part by losses in certain jurisdictions where a tax benefit was not expected to be recognized in 2019, and non-deductible deal costs. The effective tax rate for the nine months ended September 27, 2019 differed from the 2019 U.S. federal statutory rate of 21% mainly due to losses in certain jurisdictions where a tax benefit was not expected to be recognized in 2019, $16.7 million of non-deductible deal costs, and an aggregate $9.2 million unfavorable discrete U.S. income tax expense due to a change in valuation allowance and state tax expense as a result of the DJO acquisition, offset in part by a discrete tax benefit associated with the enactment of tax law changes in a European jurisdiction.

Commitments and Contingencies (Text Block)

9 Months Ended

Oct. 02, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

For further description of the Company’s litigation and contingencies, reference is made to Note 18, “Commitments and Contingencies” in the Notes to Consolidated Financial Statements in the Company’s 2019 Form 10-K. Since the Company did not retain an interest in the ongoing operations of the divested Fluid Handling and Air and Gas businesses, the retained asbestos-related activity has been classified in its Condensed Consolidated Statements of Operations as a component of Loss from discontinued operations, net of taxes.

Asbestos Contingencies

Asbestos-related claims activity since December 31 is as follows:


	Nine Months Ended
	October 2, 2020	September 27, 2019
	(Number of claims)
Claims unresolved, beginning of period	16,299	16,417
Claims filed(1)	2,898	3,360
Claims resolved(2)	(3,712)	(3,604)
Claims unresolved, end of period	15,485	16,173

(1) Claims filed include all asbestos claims for which notification has been received or a file has been opened.

The Company’s Condensed Consolidated Balance Sheets included the following amounts related to asbestos-related litigation:


	October 2, 2020		December 31, 2019
	(In thousands)
Current asbestos insurance receivable(1)	$	34,674	$	4,474
Long-term asbestos insurance asset(2)	234,400		281,793
Long-term asbestos insurance receivable(2)	36,681		41,629
Accrued asbestos liability(3)	62,310		64,394
Long-term asbestos liability(4)	259,426		286,105

(2) Included in Other assets in the Condensed Consolidated Balance Sheets.

(4) Included in Other liabilities in the Condensed Consolidated Balance Sheets.

Management’s analyses are based on currently known facts and assumptions. Projecting future events, such as new claims to be filed each year, the average cost of resolving each claim, coverage issues among layers of insurers, the method in which losses will be allocated to the various insurance policies, interpretation of the effect on coverage of various policy terms and limits and their interrelationships, the continuing solvency of various insurance companies, the amount of remaining insurance available, as well as the numerous uncertainties inherent in asbestos litigation could cause the actual liabilities and insurance recoveries to be higher or lower than those projected or recorded which could materially affect the Company’s financial condition, results of operations or cash flow.

General Litigation

The Company is involved in other pending legal proceedings arising out of the ordinary course of the Company’s business. None of these legal proceedings are expected to have a material adverse effect on the financial condition, results of operations or cash flow of the Company. With respect to these proceedings and the litigation and claims described in the preceding paragraphs, management of the Company believes that it will either prevail, has adequate insurance coverage or has established appropriate accruals to cover potential liabilities. Any costs that management estimates may be paid related to these proceedings or claims are accrued when the liability is considered probable and the amount can be reasonably estimated. There can be no assurance, however, as to the ultimate outcome of any of these matters, and if all or substantially all of these legal proceedings were to be determined adverse to the Company, there could be a material adverse effect on the financial condition, results of operations or cash flow of the Company.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Parenthetical] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 02, 2020	Sep. 27, 2019	Oct. 02, 2020	Sep. 27, 2019
Statement of Comprehensive Income [Abstract]
Foreign currency translation, tax	$ 258	$ 1,787	$ 652	$ 1,375
Unrealized gain on hedging activities, tax	(4,344)	4,411	(4,448)	4,102
Amortization of pension and other post-retirement net actuarial loss, tax	$ 330	$ (5,960)	$ 767	$ (7,679)

Restructuring Rollforward (Details) $ in Thousands	9 Months Ended
Restructuring Rollforward (Details) $ in Thousands	Oct. 02, 2020 USD ($)
Restructuring Reserve [Roll Forward]
Balance at Beginning of Period	$ 7,098
Provisions before non-cash charges	26,769
Non cash impairment restructuring provisions	1,745
Restructuring, Settlement and Impairment Provisions	28,514
Payments	(31,366)
Foreign Currency Translation	(11)
Balance at End of Period	2,490
Fabrication Technology
Restructuring Reserve [Roll Forward]
Balance at Beginning of Period	2,922
Provisions before non-cash charges	9,681
Non cash impairment restructuring provisions	1,745
Restructuring, Settlement and Impairment Provisions	11,426
Payments	(11,589)
Foreign Currency Translation	(23)
Balance at End of Period	991
Medical Technology
Restructuring Reserve [Roll Forward]
Balance at Beginning of Period	4,176
Provisions before non-cash charges	17,088
Restructuring, Settlement and Impairment Provisions	17,088
Payments	(19,777)
Foreign Currency Translation	12
Balance at End of Period	1,499
Termination benefits \| Fabrication Technology
Restructuring Reserve [Roll Forward]
Balance at Beginning of Period	1,638
Provisions before non-cash charges	5,207
Payments	(6,105)
Foreign Currency Translation	(23)
Balance at End of Period	717
Termination benefits \| Medical Technology
Restructuring Reserve [Roll Forward]
Balance at Beginning of Period	3,919
Provisions before non-cash charges	2,026
Payments	(4,756)
Foreign Currency Translation	12
Balance at End of Period	1,201
Facility closure costs \| Fabrication Technology
Restructuring Reserve [Roll Forward]
Balance at Beginning of Period	1,284
Provisions before non-cash charges	4,474
Payments	(5,484)
Foreign Currency Translation	0
Balance at End of Period	274
Facility closure costs \| Medical Technology
Restructuring Reserve [Roll Forward]
Balance at Beginning of Period	257
Provisions before non-cash charges	15,062
Payments	(15,021)
Foreign Currency Translation	0
Balance at End of Period	$ 298

Debt (Text Block)

9 Months Ended

Oct. 02, 2020

Debt Disclosure [Abstract]

Debt

Long-term debt consisted of the following:


	October 2, 2020		December 31, 2019
	(In thousands)
Term loan	$	781,341	$	822,945
Euro senior notes	406,622		388,925
2024 and 2026 notes	990,799		989,236
TEU amortizing notes	37,127		54,044

Revolving credit facilities and other	2,790		56,676
Total debt	2,218,679		2,311,826
Less: current portion	(26,954)		(27,642)
Long-term debt	$	2,191,725	$	2,284,184

Term Loan and Revolving Credit Facility

The Company’s credit agreement (the “Credit Facility”) by and among the Company, as the borrower, certain U.S. subsidiaries of the Company, as guarantors, each of the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, Citizens Bank, N.A., as syndication agent, and the co-documentation agents named therein consists of a $975 million revolving credit facility (the “Revolver”) and a Term A-1 loan in an aggregate principal amount of $825 million (the “Term Loan”), each with a maturity date of December 6, 2024. The Revolver contains a $50 million swing line loan sub-facility. Certain U.S. subsidiaries of the Company guarantee the obligations under the Credit Facility. The Credit Facility contains customary covenants limiting the ability of Colfax and its subsidiaries to, among other things, incur debt or liens, merge or consolidate with others, dispose of assets, make investments or pay dividends. In addition, the Credit Facility contains financial covenants requiring Colfax to maintain (subject to certain exceptions) (i) a maximum total leverage ratio, calculated as the ratio of Consolidated Net Debt (as defined in the Credit Facility) to EBITDA (as defined in the Credit Facility) and (ii) a minimum interest coverage. During the third quarter of 2020, the Company made a voluntary $40 million principal payment on the Term A-1 loan.

On May 1, 2020, the Company entered into an amendment to its Credit Facility (the “Amendment”). The Amendment, among other changes, modified the total leverage ratio by permitting the Company to deduct (subject to certain exceptions) up to $125 million of unrestricted cash and cash equivalents from the debt component of the ratio and by increasing the maximum total leverage ratio to 5.75:1.00 as of June 30, 2020, 6.50:1.00 as of each fiscal quarter thereafter until March 31, 2021, 5.25:1.00 for the quarter ending June 30, 2021, 4.50:1.00 for the quarter ending September 30, 2021, 4.25:1.00 for the quarters ending December 31, 2021 and March 31, 2022, 4.00:1.00 for the quarters ending June 30, 2022 and September 30, 2022, and 3.50:1.00 as of December 31, 2022 and for each fiscal quarter ending thereafter. Under the terms of the Amendment the interest coverage ratio remained at 3.00:1.00 for the quarter ending June 30, 2020, decreased to 2.75:1.00 for each of the fiscal quarters ending September 30, 2020 until June 30, 2021, and then will increase back to 3.00:1.00 for the quarters ending September 30, 2021 and thereafter. The Amendment added a “springing” collateral provision (based upon the Gross Leverage Ratio as defined in the Amendment to the Credit Facility) which requires the obligations under the Amendment to the Credit Facility to be secured by substantially all personal property of Colfax and its U.S. subsidiaries and the equity of its first tier foreign subsidiaries, subject to customary exceptions, in the event Colfax’s gross leverage ratio under the Credit Facility is greater than 5.00:1.00 as of the last day of any fiscal quarter. Lastly, the Amendment added a fifth pricing tier in the event the total leverage ratio is greater than 4.50:1.00 (regardless of the corporate family rating), with pricing at 2.50%, in the case of the Eurocurrency margin, 1.50%, in the case of the base rate margin, and 0.50% when undrawn. The total commitment and maturity of the Credit Facility remained unchanged. The Credit Facility contains various events of default (including failure to comply with the covenants under the Credit Facility and related agreements) and upon an event of default the lenders may, subject to various customary cure rights, require the immediate payment of all amounts outstanding under the Term Loan Facilities and the Revolver. As of October 2, 2020, the Company was in compliance with the covenants under the Credit Facility.

As of October 2, 2020, the weighted-average interest rate of borrowings under the Credit Facility was 1.91%, excluding accretion of original issue discount and deferred financing fees, and there was $975 million available on the Revolver.

The Company has $11.1 million in deferred financing fees recorded in conjunction with the Credit Facility as of October 2, 2020, which is being accreted to Interest expense, net primarily using the effective interest method over the life of the facility.

Euro Senior Notes

On April 19, 2017, the Company issued senior unsecured notes with an aggregate principal amount of €350 million (the “Euro Notes”). The Euro Notes are due in April 2025, have an interest rate of 3.25% and are guaranteed by certain of our domestic subsidiaries (the “Guarantees”). The proceeds from the Euro Notes offering were used to repay borrowings under our previous credit facilities totaling €283.5 million, as well as for general corporate purposes. In conjunction with the issuance of the Euro notes, the Company recorded $6.0 million of deferred financing fees. The Euro Notes and the Guarantees have not been, and will not be, registered under the Securities Act of 1933, as amended, or the securities laws of any other jurisdiction.

TEU Amortizing Notes

On January 11, 2019, the Company issued $460 million in tangible equity units. The Company offered 4 million of its 5.75% tangible equity units at the stated amount of $100 per unit and an option to purchase up to an additional 600,000 tangible equity units at the stated amount of $100 per unit, which was exercised in full at settlement. Total cash of $447.7 million was received upon closing, comprised of $377.8 million TEU prepaid stock purchase contracts and $69.9 million of TEU amortizing notes due January 2022. The proceeds were used to finance a portion of the purchase price for the DJO acquisition and for general corporate purposes. For more information, refer to Note 8, “Equity.”

2024 Notes and 2026 Notes

On February 5, 2019, two tranches of senior notes with aggregate principal amounts of $600 million (the “2024 Notes”) and $400 million (the “2026 Notes”) were issued to finance a portion of the purchase price for the DJO acquisition. The 2024 Notes are due on February 15, 2024 and have an interest rate of 6.0%. The 2026 Notes are due on February 15, 2026 and have an interest rate of 6.375%. Each tranche of notes is guaranteed by certain domestic subsidiaries of the Company.

Other Indebtedness

In addition to the debt agreements discussed above, the Company is party to various bilateral credit facilities with a borrowing capacity of $189.5 million. As of October 2, 2020, there were no outstanding borrowings under these facilities.

The Company is party to letter of credit facilities with an aggregate capacity of $390.2 million. Total letters of credit of $84.3 million were outstanding as of October 2, 2020.

In total, the Company had deferred financing fees of $24.1 million included in its Condensed Consolidated Balance Sheet as of October 2, 2020, which will be charged to Interest expense, net, primarily using the effective interest method, over the life of the applicable debt agreements.

Financial Instruments and Fair Value Measurements (Details) - USD ($) $ in Billions	Oct. 02, 2020	Dec. 31, 2019
Financial Instruments and Fair Value Measurements [Abstract]
Long-term Debt, Fair Value	$ 2.2	$ 2.3

Revenue (Tables)

9 Months Ended

Oct. 02, 2020

Revenue [Abstract]

Schedule of Revenue by Major Customers by Reporting Segments


	Three Months Ended				Nine Months Ended
	October 2, 2020		September 27, 2019		October 2, 2020		September 27, 2019
	(In thousands)
Equipment	$	157,730	$	162,531	$	443,563	$	525,148
Consumables	333,767		376,697		987,838		1,167,199
Total	$	491,497	$	539,228	$	1,431,401	$	1,692,347

Contracts with customers in the consumables product grouping generally have a shorter fulfillment period than equipment contracts.

The Company disaggregates its Medical Technology revenue into the following product groups:


	Three Months Ended				Nine Months Ended
	October 2, 2020		September 27, 2019		October 2, 2020		September 27, 2019(1)
	(In thousands)
Prevention & Rehabilitation	$	220,461	$	221,314	$	566,983	$	533,986
Reconstructive	93,973		85,977		244,263		212,752
Total	$	314,434	$	307,291	$	811,246	$	746,738

(1) For the nine months ended September 27, 2019, the Medical Technology segment includes results from the acquisition date of February 22, 2019.

Financing Receivable, Allowance for Credit Loss

A summary of the activity in the Company’s allowance for credit losses included within Trade receivables in the Condensed Consolidated Balance Sheets is as follows:


	Nine Months Ended October 2, 2020
	Balance at Beginning of Period		Charged to Expense, net		Write-Offs and Deductions		Foreign Currency Translation		Balance at End of Period
	(In thousands)
Allowance for credit losses	$	36,009	$	5,099	$	(4,251)	$	(1,882)	$	34,975

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Oct. 02, 2020	Sep. 27, 2019
Statement of Cash Flows [Abstract]
Net income	$ 11,656	$ (501,813)
Adjustments to reconcile net income to net cash provided by operating activities:
Divestiture impairment loss	0	481,000
Depreciation, amortization and other impairment charges	181,114	190,577
Stock-based compensation expense	21,642	17,005
Non-cash interest expense	4,253	5,674
Deferred income tax benefit	(30,946)	(18,673)
(Gain) loss on sale of property, plant and equipment	523	(140)
Pension settlement loss	0	77,390
Changes in operating assets and liabilities:
Trade receivables, net	44,592	29,071
Inventories, net	28,556	(54,256)
Accounts payable	(42,869)	(98,920)
Income taxes	(9,722)	(39,909)
Other operating assets and liabilities	(35,666)	(21,257)
Net cash provided by operating activities	173,133	65,749
Cash flows from investing activities:
Purchases of property, plant and equipment	(81,583)	(100,383)
Proceeds from sale of property, plant and equipment	4,929	7,474
Acquisitions, net of cash received	(7,477)	(3,136,777)
Net cash used in investing activities	(84,131)	(3,229,686)
Cash flows from financing activities:
Proceeds from borrowings on term credit facility	0	2,725,000
Payments under term credit facility	(40,000)	(533,437)
Proceeds from borrowings on revolving credit facilities and other	794,678	1,780,085
Repayments of borrowings on revolving credit facilities and other	(866,215)	(1,136,186)
Payment of debt issuance costs	(4,560)	(24,402)
Proceeds from prepaid stock purchase contracts	0	377,814
Proceeds from issuance of common stock, net	2,930	4,787
Payment for noncontrolling interest share repurchase	0	93,087
Deferred consideration payments and other	(12,411)	(9,680)
Net cash provided by (used in) financing activities	(125,578)	3,090,894
Effect of foreign exchange rates on Cash and cash equivalents	(6,633)	(5,216)
Decrease in Cash and cash equivalents	(43,209)	(78,259)
Cash and cash equivalents, beginning of period	109,632	245,019
Cash and cash equivalents, end of period	$ 66,423	$ 166,760

Recently Issued Accounting Pronouncements (Text Block)

9 Months Ended

Oct. 02, 2020

Accounting Policies [Abstract]

Recently Issued Accounting Pronouncements

Accounting Guidance Implemented in 2020

Standard

Description

Effective Date

ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

January 1, 2020

ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement

January 1, 2020

New Accounting Guidance to be Implemented

Standard

Description

Anticipated Impact

Effective Date

ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans

The ASU modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.

This accounting standard update impacts disclosures only. The Company is currently evaluating the impact of this ASU on its consolidated financial statement disclosures and the timing of adoption.

January 1, 2021

ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes

The Company is currently evaluating the impact of this ASU on its consolidated financial statements and the timing of adoption.

January 1, 2021

Accrued Liabilities (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 02, 2020	Sep. 27, 2019	Oct. 02, 2020	Sep. 27, 2019	Dec. 31, 2019
Restructuring Cost and Reserve [Line Items]
Restructuring Charges and Other Related Charges	$ 6,328	$ 13,309	$ 28,514	$ 50,725
Accrued restructuring liability - current portion	2,448		2,448		$ 6,961
Accrued Liabilities
Restructuring Cost and Reserve [Line Items]
Accrued restructuring liability - current portion	2,400		2,400
Other Noncurrent Liabilities
Restructuring Cost and Reserve [Line Items]
Accrued restructuring liability - current portion	100		100
Cost of Sales
Restructuring Cost and Reserve [Line Items]
Restructuring Charges and Other Related Charges	$ 2,200	$ 3,500	$ 4,900	$ 3,500

Revenue - Allowance for Credit Loss Rollforward (Details) $ in Thousands	9 Months Ended
	Oct. 02, 2020 USD ($)
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period	$ 36,009
Charged to Expense, net	5,099
Write-Offs and Deductions	(4,251)
Foreign Currency Translation	(1,882)
Balance at End of Period	$ 34,975

Net Income Per Share (Tables)

9 Months Ended

Oct. 02, 2020

Earnings Per Share [Abstract]

Schedule of Earnings Per Share - Basic and Diluted

Net income (loss) per share from continuing operations was computed as follows:


	Three Months Ended				Nine Months Ended
	October 2, 2020		September 27, 2019		October 2, 2020		September 27, 2019
	(In thousands, except share and per share data)
Computation of Net income (loss) per share from continuing operations - basic:
Net income (loss) from continuing operations attributable to Colfax Corporation (1)	$	16,047	$	2,901	$	20,319	$	(18,636)
Weighted-average shares of Common stock outstanding – basic	136,832,909		136,121,017		136,730,112		135,440,566
Net income (loss) per share from continuing operations – basic	$	0.12	$	0.02	$	0.15	$	(0.14)

Computation of Net income (loss) per share from continuing operations - diluted:
Net income (loss) from continuing operations attributable to Colfax Corporation (1)	$	16,047	$	2,901	$	20,319	$	(18,636)
Weighted-average shares of Common stock outstanding – basic	136,832,909		136,121,017		136,730,112		135,440,566
Net effect of potentially dilutive securities - stock options, restricted stock units and tangible equity units	1,257,701		929,143		2,339,794		—
Weighted-average shares of Common stock outstanding – diluted	138,090,610		137,050,160		139,069,906		135,440,566
Net income (loss) per share from continuing operations – diluted	$	0.12	$	0.02	$	0.15	$	(0.14)

Warranty Liability Rollforward (Details) - USD ($) $ in Thousands	9 Months Ended
	Oct. 02, 2020	Sep. 27, 2019
Movement in Standard Product Warranty Accrual [Roll Forward]
Warranty liability, beginning of period	$ 15,528	$ 12,312
Accrued warranty expense	5,613	5,456
Changes in estimates related to pre-existing warranties	1,108	1,256
Cost of warranty service work performed	(7,003)	(7,783)
Acquisition-related liability	0	5,356
Foreign exchange translation effect	(255)	(427)
Warranty liability, end of period	$ 14,991	$ 16,170

Acquisitions Acquisitions (Tables)

9 Months Ended

Oct. 02, 2020

Business Combinations [Abstract]

Business Acquisition, Pro Forma Information

These amounts are presented in accordance with GAAP, consistent with the Company’s accounting policies.


	Three Months Ended				Nine Months Ended
	October 2, 2020		September 27, 2019		October 2, 2020		September 27, 2019
	(Unaudited, in thousands)
Net sales	$	805,931	$	846,519	$	2,242,647	$	2,608,251
Net income from continuing operations attributable to Colfax Corporation	17,927		7,676		27,575		72,857

CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($) $ in Thousands	Oct. 02, 2020	Dec. 31, 2019
Condensed Consolidated Balance Sheet (Parenthetical) [Abstract]
Trade receivables, allowance for doubtful accounts	$ 34,975	$ 32,634
Common Stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common Stock, Shares Authorized	400,000,000	400,000,000
Common Stock, Shares, Issued	118,457,179	118,059,082
Common Stock, Shares, Outstanding	118,457,179	118,059,082

Discontinued Operations - Effect on Income Statement and Balance Sheet (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Oct. 02, 2020	Sep. 27, 2019	Oct. 02, 2020	Sep. 27, 2019	Dec. 31, 2019
Disposal Group, Including Discontinued Operations, Statement of Income
Goodwill impairment charge			$ 0	$ 481,000
Loss from discontinued operations, net of taxes	$ (2,641)	$ 9,024	(10,906)	(486,265)
Air and Gas Handling Business
Disposal Group, Including Discontinued Operations, Statement of Income
Net sales	0	338,885	0	998,793
Cost of sales	0	230,692	0	689,004
Selling, general and administrative expense	0	65,117	0	194,562
Restructuring and other related charges	0	4,987	0	13,354	$ 48,600
Goodwill impairment charge	0
Divestiture-related expense	846	4,481	7,419	11,692
Operating loss	(846)	33,608	(7,419)	(390,819)
Interest expense	0	12,779	0	38,899
Pension settlement loss	0	0	0	43,774
Loss from discontinued operations before income taxes	(846)	20,829	(7,419)	(473,492)
Income tax expense (benefit)	(198)	9,809	(1,267)	5,387
Loss from discontinued operations, net of taxes	$ (648)	$ 11,020	$ (6,152)	$ (478,879)

Debt (Tables)

9 Months Ended

Oct. 02, 2020

Debt Disclosure [Abstract]

Schedule of Debt

Long-term debt consisted of the following:


	October 2, 2020		December 31, 2019
	(In thousands)
Term loan	$	781,341	$	822,945
Euro senior notes	406,622		388,925
2024 and 2026 notes	990,799		989,236
TEU amortizing notes	37,127		54,044

Revolving credit facilities and other	2,790		56,676
Total debt	2,218,679		2,311,826
Less: current portion	(26,954)		(27,642)
Long-term debt	$	2,191,725	$	2,284,184

Acquisitions - Proforma Financial Information (Details) - DJO Acquisition - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 02, 2020	Sep. 27, 2019	Oct. 02, 2020	Sep. 27, 2019
Business Acquisition [Line Items]
Net sales	$ 805,931	$ 846,519	$ 2,242,647	$ 2,608,251
Net income from continuing operations attributable to Colfax Corporation	$ 17,927	$ 7,676	$ 27,575	$ 72,857

Claims Rollforward (Details)

9 Months Ended

Oct. 02, 2020

Sep. 27, 2019

Loss Contingency Accrual [Roll Forward]

Claims unresolved, beginning of period

16,299

16,417

Claims filed

^[1]

2,898

3,360

Claims resolved

^[2]

(3,712)

(3,604)

Claims unresolved, end of period

15,485

16,173

[1]	Claims filed include all asbestos claims for which notification has been received or a file has been opened.
[2]	Claims resolved include all asbestos claims that have been settled, dismissed or that are in the process of being settled or dismissed based upon agreements or understandings in place with counsel for the claimants.

Segment Information (Tables)

9 Months Ended

Oct. 02, 2020

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

The Company’s segment results were as follows:


	Three Months Ended				Nine Months Ended
	October 2, 2020		September 27, 2019		October 2, 2020		September 27, 2019(1)
	(In thousands)
Net sales:
Fabrication Technology	$	491,497	$	539,228	$	1,431,401	$	1,692,347
Medical Technology	314,434		307,291		811,246		746,738
	$	805,931	$	846,519	$	2,242,647	$	2,439,085
Segment operating income (loss)(2):
Fabrication Technology	$	63,058	$	72,999	$	175,703	$	224,574
Medical Technology	22,869		22,456		5,877		37,743
Corporate and other	(15,079)		(14,285)		(44,730)		(99,864)
	$	70,848	$	81,170	$	136,850	$	162,453

(1) For the nine months ended September 27, 2019, the Medical Technology segment includes results from the acquisition date of February 22, 2019.

(2) Following is a reconciliation of Income (loss) from continuing operations before income taxes to segment operating income:


	Three Months Ended				Nine Months Ended
	October 2, 2020		September 27, 2019		October 2, 2020		September 27, 2019
	(In thousands)
Income (loss) from continuing operations before income taxes	$	36,364	$	2,417	$	25,200	$	(8,708)

Pension settlement loss	—		33,616		—		33,616
Interest expense, net	25,567		31,828		78,647		86,820
Restructuring and other related charges(1)	6,328		13,309		28,514		50,725
MDR and other(2)	2,589		—		4,489		—
Segment operating income	$	70,848	$	81,170	$	136,850	$	162,453

(2) Primarily related to costs specific to compliance with medical device reporting regulations and other requirements of the European Union Medical Device Regulation of 2017.

Equity (Details - AOCI Components) - USD ($) $ in Thousands	9 Months Ended
Equity (Details - AOCI Components) - USD ($) $ in Thousands	Oct. 02, 2020	Sep. 27, 2019
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	$ (483,845)
Foreign currency translation adjustment	(30,242)	$ (120,167)
Loss on long-term intra-entity foreign currency transactions	(18,023)	(4,197)
Unrealized gain on cash flow hedges		167
Other comprehensive income (loss) before reclassifications	(60,965)	(109,939)
Amounts reclassified from Accumulated other comprehensive loss	2,814	(22,704)
Noncontrolling interest share repurchase		20,962
Net current period other comprehensive income (loss)	(58,151)	(153,605)
Ending Balance	(541,996)
Accumulated Other Comprehensive Loss
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(483,845)	(795,545)
Ending Balance	(541,996)	(949,150)
Net Unrecognized Pension and Other Post-Retirement Benefit Cost
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(106,500)	(80,794)
Foreign currency translation adjustment	(389)	859
Loss on long-term intra-entity foreign currency transactions	0	0
Gain (loss) on net investment hedges	0	0
Unrealized gain on cash flow hedges		0
Other comprehensive income (loss) before reclassifications	(389)	859
Amounts reclassified from Accumulated other comprehensive loss	2,814	(22,704)
Noncontrolling interest share repurchase		0
Net current period other comprehensive income (loss)	2,425	(21,845)
Ending Balance	(104,075)	(102,639)
Foreign Currency Translation Adjustment
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(421,889)	(752,989)
Foreign currency translation adjustment	(31,747)	(120,722)
Loss on long-term intra-entity foreign currency transactions	(18,023)	(4,197)
Gain (loss) on net investment hedges	0	0
Unrealized gain on cash flow hedges		0
Other comprehensive income (loss) before reclassifications	(49,770)	(124,919)
Amounts reclassified from Accumulated other comprehensive loss	0	0
Noncontrolling interest share repurchase		20,962
Net current period other comprehensive income (loss)	(49,770)	(145,881)
Ending Balance	(471,659)	(898,870)
Unrealized Gain on Hedging Activities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	44,544	38,238
Foreign currency translation adjustment	1,894	(304)
Loss on long-term intra-entity foreign currency transactions	0	0
Gain (loss) on net investment hedges	(12,700)	14,258
Unrealized gain on cash flow hedges		167
Other comprehensive income (loss) before reclassifications	(10,806)	14,121
Amounts reclassified from Accumulated other comprehensive loss	0	0
Noncontrolling interest share repurchase		0
Net current period other comprehensive income (loss)	(10,806)	14,121
Ending Balance	$ 33,738	$ 52,359

Fair Value Hierarchy (Details) - USD ($) $ in Thousands	Oct. 02, 2020	Sep. 27, 2019
Cash equivalents	$ 3,632	$ 13,125
Deferred compensation plans asset	10,045	8,870
Assets, Fair Value Disclosure	16,660	22,477
Deferred compensation plans liability	10,045	8,870
Liabilities, Fair Value Disclosure	12,139	10,051
Level One
Cash equivalents	3,632	13,125
Assets, Fair Value Disclosure	3,632	13,125
Level Two
Deferred compensation plans asset	10,045	8,870
Assets, Fair Value Disclosure	13,028	9,352
Deferred compensation plans liability	10,045	8,870
Liabilities, Fair Value Disclosure	12,139	10,051
Foreign currency contracts related to customer sales contracts
Foreign currency contracts not designated as hedges, Assets	2,403	74
Foreign currency contracts not designated as hedges, Liability	1,176	328
Foreign currency contracts related to customer sales contracts \| Level Two
Foreign currency contracts not designated as hedges, Assets	2,403	74
Foreign currency contracts not designated as hedges, Liability	1,176	328
Foreign currency contracts related to supplier purchase contracts
Foreign currency contracts not designated as hedges, Assets	580	408
Foreign currency contracts not designated as hedges, Liability	918	853
Foreign currency contracts related to supplier purchase contracts \| Level Two
Foreign currency contracts not designated as hedges, Assets	580	408
Foreign currency contracts not designated as hedges, Liability	$ 918	$ 853

General (Text Block)	9 Months Ended
General (Text Block)	Oct. 02, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
General	General Colfax Corporation (the “Company” or “Colfax”) is a leading diversified technology company that provides fabrication technology and medical device products and services to customers around the world, principally under the ESAB and DJO brands. The Company conducts its operations through two operating segments, “Fabrication Technology”, which incorporates the operations of ESAB and its related brands, and “Medical Technology”, which incorporates the operations of DJO and its related brands. On September 30, 2019, Colfax completed the sale of its Air and Gas Handling business for an aggregate purchase price of $1.8 billion, including $1.67 billion of cash paid at closing, subject to certain adjustments pursuant to the purchase agreement, and the assumption of certain liabilities and minority interests. Accordingly, the accompanying Condensed Consolidated Financial Statements for all periods presented reflect the Air and Gas Handling business as discontinued operations. See Note 3, “Discontinued Operations”, for further information. On February 22, 2019, Colfax completed the purchase of DJO Global, Inc. (“DJO”) for $3.15 billion. DJO is a global leader in orthopedic solutions, providing orthopedic devices, reconstructive implants, software and services spanning the full continuum of patient care, from injury prevention to rehabilitation. The Condensed Consolidated Financial Statements included in this quarterly report have been prepared by the Company in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements. The Condensed Consolidated Balance Sheet as of December 31, 2019 is derived from the Company’s audited financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted in accordance with the SEC’s rules and regulations for interim financial statements. The Condensed Consolidated Financial Statements included herein should be read in conjunction with the audited financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”), filed with the SEC on February 24, 2020. The Condensed Consolidated Financial Statements reflect, in the opinion of management, all adjustments, which consist solely of normal recurring adjustments, necessary to present fairly the Company’s financial position and results of operations as of and for the periods indicated. Intercompany transactions and accounts are eliminated in consolidation. The Company makes certain estimates and assumptions in preparing its Condensed Consolidated Financial Statements in accordance with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses for the periods presented. Actual results may differ from those estimates. In the normal course of business, the Company incurs research and development costs related to new product development which are expensed as incurred. Research and development costs were $16.8 million and $49.4 million during the three and nine months ended October 2, 2020, and $16.3 million and $44.8 million during the three and nine months ended September 27, 2019, respectively, which are included in Selling, general and administrative expenses on the Company’s Condensed Consolidated Statements of Operations. The results of operations for the three and nine months ended October 2, 2020 are not necessarily indicative of the results of operations that may be achieved for the full year. Quarterly results are affected by seasonal variations in the Company’s businesses, and European operations typically experience a slowdown during the July, August and December holiday seasons. Medical Technology sales typically peak in the fourth quarter. General economic conditions may, however, impact future seasonal variations. In December 2019, a novel coronavirus disease (“COVID-19”) was first reported in China. On March 11, 2020, due to worldwide spread of the virus, the World Health Organization characterized COVID-19 as a pandemic. The COVID-19 global pandemic has resulted in a widespread health crisis, and the resulting impact on governments, businesses and individuals and actions taken by them in response to the situation have resulted in widespread economic disruptions, significantly affecting broader economies, financial markets, and overall demand for the Company’s products. The COVID-19 outbreak has caused increased uncertainty in estimates and assumptions affecting the reported amounts of assets and liabilities in the Condensed Consolidated Financial Statements as the extent and period of recovery from the COVID-19 outbreak and related economic disruption is difficult to forecast. The extent to which COVID-19 impacts the Company’s business and financial results will depend on numerous evolving factors including, but not limited to, the magnitude and duration of COVID-19, the extent to which it will impact worldwide macroeconomic conditions, the speed of the anticipated recovery, and governmental and business reactions to the pandemic. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 as of October 2, 2020 and through the date of this report. The accounting matters assessed included, but were not limited to, the Company’s allowance for credit losses, the carrying value of the goodwill, intangibles, and other long-lived assets and the realizability of deferred tax assets. While there was not an impact from these valuation items to the Company’s consolidated financial statements as of and for the three and nine months ended October 2, 2020, the Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to the Company’s consolidated financial statements in future reporting periods.

General General (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
General General (Details) - USD ($) $ in Millions	Feb. 22, 2019	Oct. 02, 2020	Sep. 27, 2019	Oct. 02, 2020	Sep. 27, 2019	Sep. 30, 2019
Business Acquisition [Line Items]
Research and development expense		$ 16.8	$ 16.3	$ 49.4	$ 44.8
DJO Acquisition
Business Acquisition [Line Items]
Purchase price for merger agreement	$ 3,150.0
Air and Gas Handling Business
Business Acquisition [Line Items]
Total consideration						$ 1,800.0
Cash consideration received						$ 1,670.0

Gain (Loss) On Derivative Instruments (Details) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Oct. 02, 2020

Sep. 27, 2019

Oct. 02, 2020

Sep. 27, 2019

Designated As Hedging Instrument

Unrealized (loss) gain on net investment hedges

$ (14,456)

$ 12,807

^[1]

$ (12,700)

$ 14,258

^[1]

Not Designated As Hedging Instrument | Foreign currency contracts related to customer sales contracts

Unrealized gain

106

423

638

215

Realized gain (loss)

701

(165)

(204)

(1,232)

Not Designated As Hedging Instrument | Foreign currency contracts related to supplier purchase contracts

Unrealized gain

(1,000)

(732)

841

(81)

Realized gain (loss)

$ (569)

$ 1

$ (818)

$ 455

[1]	The unrealized gain on net investment hedges is attributable to the change in valuation of Euro denominated debt.

Equity (Tables)

9 Months Ended

Oct. 02, 2020

Equity [Abstract]

Accumulated Other Comprehensive Loss


	Accumulated Other Comprehensive Loss Components
	Net Unrecognized Pension and Other Post-Retirement Benefit Cost		Foreign Currency Translation Adjustment		Unrealized Gain on Hedging Activities		Total
	(In thousands)

Balance at January 1, 2020	$	(106,500)	$	(421,889)	$	44,544	$	(483,845)

Other comprehensive income (loss) before reclassifications:

Foreign currency translation adjustment	(389)		(31,747)		1,894		(30,242)
Loss on long-term intra-entity foreign currency transactions	—		(18,023)		—		(18,023)
Loss on net investment hedges	—		—		(12,700)		(12,700)


Other comprehensive income (loss) before reclassifications	(389)		(49,770)		(10,806)		(60,965)
Amounts reclassified from Accumulated other comprehensive loss	2,814		—		—		2,814

Net Other comprehensive income (loss)	2,425		(49,770)		(10,806)		(58,151)
Balance at October 2, 2020	$	(104,075)	$	(471,659)	$	33,738	$	(541,996)


	Accumulated Other Comprehensive Loss Components
	Net Unrecognized Pension and Other Post-Retirement Benefit Cost		Foreign Currency Translation Adjustment		Unrealized Gain on Hedging Activities		Total
	(In thousands)
Balance at January 1, 2019	$	(80,794)	$	(752,989)	$	38,238	$	(795,545)

Other comprehensive income (loss) before reclassifications:

Foreign currency translation adjustment	859		(120,722)		(304)		(120,167)
Loss on long-term intra-entity foreign currency transactions	—		(4,197)		—		(4,197)
Gain on net investment hedges	—		—		14,258		14,258
Unrealized gain on cash flow hedges	—		—		167		167

Other comprehensive income (loss) before reclassifications	859		(124,919)		14,121		(109,939)
Amounts reclassified from Accumulated other comprehensive loss	(22,704)		—		—		(22,704)
Noncontrolling interest share repurchase	—		(20,962)		—		(20,962)
Net Other comprehensive income (loss)	(21,845)		(145,881)		14,121		(153,605)
Balance at September 27, 2019	$	(102,639)	$	(898,870)	$	52,359	$	(949,150)

Tangible Equity Units

The proceeds from the issuance of the TEUs were allocated initially to equity and debt based on the relative fair value of the respective components of each TEU as follows:


	TEU prepaid stock purchase contracts		TEU amortizing notes		Total
	(In millions, except per unit amounts)
Fair value per unit	$	84.39	$	15.61	$	100.00

Gross proceeds	$	388.2	$	71.8	$	460.0
Less: Issuance costs	10.4		1.9		12.3
Net proceeds	$	377.8	$	69.9	$	447.7

Discontinued Operations (Notes)

9 Months Ended

Oct. 02, 2020

Discontinued Operations [Abstract]

Discontinued Operations

The Company has retained certain asbestos-related contingencies and insurance coverages from divested businesses for which it did not retain an interest in the ongoing operations subject to the contingencies. The Company has classified asbestos-related selling, general and administrative activity in its Condensed Consolidated Statements of Operations as part of Loss from discontinued operations. See Note 13, “Commitments and Contingencies” for further information.

Sale of Air and Gas Handling Business

The Company sold its Air and Gas Handling business on September 30, 2019. Accordingly, the accompanying Condensed Consolidated Financial Statements for all periods presented reflect the Air and Gas Handling business as a discontinued operation. The total consideration for the sale was $1.8 billion, including $1.67 billion in cash paid at closing, subject to certain adjustments pursuant to the purchase agreement, and the assumption of certain liabilities and minority interests. Based on the purchase price and the carrying value of the net assets being sold, the Company recorded an impairment loss of $481 million in the second quarter of 2019. The impairment loss included a $449 million goodwill impairment charge and a $32 million valuation allowance charge on assets held for sale relating to the initial estimated cost to sell the business. An accumulated other comprehensive loss of approximately $350 million associated with the Air and Gas Handling business was included in the determination of the goodwill impairment charge, which is mostly attributable to the recognition of cumulative foreign currency translation effects from the long-term strengthening of the U.S. Dollar.

The Company recorded a pre-tax gain on disposal of $14.2 million in the fourth quarter of 2019. The total divestiture-related expenses incurred for the Air and Gas Handling sale were $48.6 million in the year ended December 31, 2019.

In connection with the purchase agreement, the Company and the purchaser entered into various agreements to provide a framework for their relationship after the disposition, including a transition services agreement. The transition services under the above agreements are not material to the Company’s results of operations.


	Three Months Ended				Nine Months Ended
	October 2, 2020		September 27, 2019		October 2, 2020		September 27, 2019
	(In thousands)
Net sales	$	—	$	338,885	$	—	$	998,793
Cost of sales	—		230,692		—		689,004
Selling, general and administrative expense	—		65,117		—		194,562
Restructuring and other related charges	—		4,987		—		13,354
Goodwill impairment charge	—		—		—		481,000
Divestiture-related expense(1)	846		4,481		7,419		11,692
Operating loss	(846)		33,608		(7,419)		(390,819)
Interest expense(2)	—		12,779		—		38,899
Pension settlement loss	—		—		—		43,774

Loss from discontinued operations before income taxes	(846)		20,829		(7,419)		(473,492)
Income tax expense (benefit)	(198)		9,809		(1,267)		5,387
Loss from discontinued operations, net of taxes	$	(648)	$	11,020	$	(6,152)	$	(478,879)

(2) The Company reclassified a portion of interest expense from its Term Loan Facilities associated with the mandatory repayment using net proceeds from the sale of the business.

Total income attributable to noncontrolling interest related to the Air and Gas Handling business, net of taxes was $1.5 million and $5.9 million for the three and nine months ended September 27, 2019, respectively.

Cash used in operating activities related to the discontinued operations of the divested Air and Gas Handling business for the nine months ended October 2, 2020 was $7.2 million. Cash provided by operating activities related to the discontinued

operations of the divested Air and Gas Handling business for the nine months ended September 27, 2019 was $18.0 million. Cash used in investing activities related to the discontinued operations of the divested Air and Gas Handling business for the nine months ended September 27, 2019 was $27.5 million.

Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 02, 2020	Sep. 27, 2019	Oct. 02, 2020	Sep. 27, 2019
Revenue from contract with customer	$ 805,931	$ 846,519	$ 2,242,647	$ 2,439,085
Fabrication Technology
Revenue from contract with customer	491,497	539,228	1,431,401	1,692,347
Medical Technology
Revenue from contract with customer	314,434	307,291	811,246	746,738
Equipment \| Fabrication Technology
Revenue from contract with customer	157,730	162,531	443,563	525,148
Consumables \| Fabrication Technology
Revenue from contract with customer	333,767	376,697	987,838	1,167,199
Prevention & Rehabilitation \| Medical Technology
Revenue from contract with customer	220,461	221,314	566,983	533,986
Reconstructive \| Medical Technology
Revenue from contract with customer	$ 93,973	$ 85,977	$ 244,263	$ 212,752