The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. These financial statements were prepared using information reasonably available as of March 31, 2022 and through the date of this Report. Actual results may differ from those estimates. A discussion of the Company’s critical accounting policies is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Notesestimates due to uncertainty relating to the Consolidated Financial Statements included inCOVID-19 pandemic, the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.invasion of Ukraine, as well as other factors.

All intercompany transactions and balances have been eliminated.

Trade Accounts Receivable

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accountsexpected credit losses represents the Company’sCompany's best estimate based on historical information, current information, and reasonable and supportable forecasts of probable credit losses in its existing trade accounts receivable. The Company determines the allowance based upon a review of both specific accounts for collectionfuture events and the age of the accounts receivable portfolio.

Inventories

Inventories are valued at the lower of cost or net realizable value. Cost, which includes direct materials, labor and overhead, is generally determined using the first in, first out (FIFO) method. The estimated net realizable value is based on assumptions for future demand and related pricing. Adjustments to the cost basis of the Company’s inventory are made for excess and obsolete items based on usage, orders and technological obsolescence. If actual market conditions are less favorable than those projected by management, reductions in the value of inventory may be required.

Goodwill and Other Intangible Assets

Goodwill, representing the excess of purchase price over the net asset value of companies acquired, and indefinite-lived intangible assets are not amortized, but are reviewed for impairment annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that an asset might be impaired. The annual evaluation for goodwill and indefinite-lived intangible assets are generally based on an assessment of qualitative and quantitative factors to determine whether it is more likely than not that the fair value of the asset is less than its carrying amount.

Other intangible assets include indefinite-lived assets and assets subject to amortization. Where applicable, amortization is charged on a straight-line basis over the expected period of benefit.to be benefited. The straight-line method of amortization reflects an appropriate allocation of the cost of the intangible assets to earnings in proportion to the amount of economic benefits obtained by the Company in each reporting period. The Company assesses the initial acquisition of intangible assets in accordance with the provisions of ASC 805 "Business Combinations"“Business Combinations” and the continued accounting for previously recognized intangible assets and goodwill in accordance with the provisions of ASC 350 "Intangible -“Intangibles – Goodwill and Other"Other” and ASC 360 "Property,“Property, Plant and Equipment".Equipment.”

The Company recognized amortization expense associated with the above intangible assets of $2.9$6.8 million and $2.2$4.1 million for the three months ended September 30, 2017March 31, 2022 and 2016, respectively and $7.9 million and $5.8 million for the nine months ended September 30, 2017 and 2016,2021, respectively. The annual aggregate amortization expense based on the current balance of other intangible assets is estimated at $11.4$26.3 million for 2017, $13.72022, $25.3 million for 2018, $13.32023, $23.1 million for 2019, $12.92024, $22.2 million for 2020, $12.32025, $20.0 million for 20212026 and $11.7$18.6 million for 2022.2027. Purchased intangible amortization was $2.6$6.6 million, $1.7$5.1 million after tax, and $2.0$3.8 million, $1.3$2.9 million after tax, for the three months ended September 30, 2017March 31, 2022 and 2016, respectively and $7.2 million, $4.7 million after tax, and $5.2 million, $3.5 million after tax, for the nine months ended September 30, 2017 and 2016,2021, respectively.

In addition to the above amortization, the Company recorded amortization expense associated with capitalized software of $7.7$9.7 million and $6.8$9.8 million for the three months ended September 30, 2017March 31, 2022 and 2016, respectively and $22.9 million and $20.2 million for the nine months ended September 30, 2017 and 2016,2021, respectively.

Revenue Recognition

Certain of the Company’s product arrangements include separate performance obligations, primarily related to installation. Such performance obligations are included in total net salesaccounted for separately when the deliverables have stand-alone value and the associated expensesatisfaction of the undelivered performance obligations is recordedprobable and within the Company's control. The allocation of revenue between the performance obligations is based on the observable stand-alone selling prices at the time of the sale in costaccordance with a number of sales for all periods presented. Other thanfactors including service technician billing rates, time to install, and geographic location.

Software is generally not considered a distinct performance obligation with the exception of a few small software applications, theapplications. The Company generally does not sell software products without the related hardware instrument as the software is embedded in the instrument.product. The Company’s products typically require no significant production, modification, or customization of the hardware or software that is essential to the functionality of the products. To the extent the Company’s solutions have a post-shipment obligation, revenue is deferred until the obligation has been completed. The Company defers product revenue where installation is required, unless such installation is deemed perfunctory. The Company also sometimes enters into certain arrangements that require the separate delivery of multiple goods and/or services. These deliverables are accounted for separately if the deliverables have standalone value and the performance of undelivered items is probable and within the Company's control. The allocation of revenue between the separate deliverables is typically based on the relative selling price at the time of the sale in accordance with a number of factors including service technician billing rates, time to install and geographic location.

Service revenue not under contract is recognized upon the completion of the service performed. SpareRevenue from spare parts sold on a stand-alone basis areis recognized upon title and risk of loss transferwhen control is transferred to the customer, which is generally at the time of shipment. Revenuesshipment or delivery. Revenue from service contracts areis recognized ratably over the contract period.period using a time-based method. These contracts represent an obligation to perform repair and other services including regulatory compliance qualification, calibration, certification, and preventative maintenance on a customer’s pre-defined equipment over the contract period. Service contracts are separately priced and payment is typically received from the customer at the beginning of the contract period.

Employee Termination Benefits

In situations where contractual termination benefits exist, the Company records accruals for employee termination benefits when it is probable that a liability has been incurred and the amount of the liability is reasonably estimable. All other employee termination arrangements are recognized and measured at their fair value at the communication date unless the employee is required to render additional service beyond the legal notification period, in which case the liability is recognized ratably over the future service period.

Share-Based Compensation

The Company recognizes share-based compensation expense within selling, general and administrative in the consolidated statements of operations and other comprehensive income with a corresponding offset to additional paid-in capital in the consolidated balance sheet. The Company recorded $4.0$4.5 million and $11.8$4.6 million of share-based compensation expense for the three and nine months ended September 30, 2017, respectively, compared to $3.6 millionMarch 31, 2022 and $10.9 million for the corresponding periods in 2016.2021, respectively.

Research and Development

Research and development costs primarily consist of salaries, consulting and other costs. The Company expenses these costs as incurred.

Business Combinations and Asset Acquisitions

In circumstances where an acquisition involves a contingent consideration arrangement, the Company recognizes a liability equal to the fair value of the expected contingent payments as of the acquisition date. ChangesSubsequent changes in the fair value of the contingent consideration are recorded to other charges (income), net.

Recent Accounting Pronouncements

In March 2020 and January 2017,2021, the FASB issued ASU 2020-04 and ASU 2021-01: Reference Rate Reform, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by the discontinuance of LIBOR or another referenced rate. The guidance may be applied to any applicable contract entered into before December 31, 2022. The Company's interest rate and cross currency swaps, as mentioned in Note 4 to the consolidated financial statements, are governed by International Swaps and Derivatives Association (ISDA) agreements, and the Company adopted ASU 2016-09,will adhere to ASC 718 "Compensation - Stock Compensation." The primary impact of adoption was the recognition of excess tax benefits from stock option exercises within the provision for taxes rather than within shareholder's equity, and a change in the determination of diluted earnings per common share. The Company adopted the guidance on a prospective basis, and expects its estimated annual tax rate will be reduced by 2% in 2017. The adoption of this guidance also increased the Company's income tax rate by approximately 1% for the three months ending September 30, 2017 and reduced the Company's income tax rate by approximately 3% for the nine months ending September 30, 2017.ISDA's fallback protocol when LIBOR is discontinued. In addition, the Company recognized additional deferred tax assetsrenewed the LIBOR-based credit agreement, as discussed further in Note 10 of $1.5 million asthe Annual Report Form 10-K, which includes a cumulative adjustment within shareholder's equity.fallback protocol when LIBOR is discontinued. Based on these procedures, when LIBOR is discontinued, the interest rate and cross currency swaps will not require de-designation if certain criteria are met. The Company also classified on a retrospective basisexpects the excess tax benefits from stock option exercisesfinancial impact of $17.2 million as operating activities in the prior period Statements of Cash Flows. For additional disclosure, see Note 6rate change when LIBOR is discontinued to the interim consolidatedbe immaterial to its financial statements.

The FASB issued ASU 2014-09, ASU 2016-10Company's global revenue mix by product category is laboratory (57% of sales), industrial (38% of sales) and ASU 2016-12 to ASC 606 "Revenue from Contracts with Customers." ASU 2014-09 provides authoritative guidance clarifying the principles for recognizingretail (5% of sales). The Company's product revenue and developing a common revenue standard for U.S. GAAP. The core principle of the guidanceby reportable segment is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Additionally, the guidance requires improved disclosure to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. ASU 2016-10 provides guidance for identifying performance obligations as they pertain to immaterial promised goods or services, shipping and handling activities, and identifying when promises represent performance obligations. ASU 2016-12 provides guidance for assessing collectability, presentation of sales taxes, noncash considerations, and completed contract modifications at transition. The guidance becomes effective for the Company for the year beginning January 1, 2018. The Company is finalizing its evaluation of the impact of the adoption of this guidance and believes it will have an immaterial impact on the Company's consolidated results of operations and financial position. The estimated impactproportionately similar to the Company's resultsglobal mix except the Company's Swiss Operations is expected to be immaterial because mostlargely comprised of its performance obligations are satisfied atlaboratory products, while the timeCompany's Chinese Operations has a slightly higher percentage of title transfer and riskindustrial products. A breakdown of loss to the customer which is generally upon shipment. In addition,Company’s sales by product category for the three months ended March 31 follows:

The payment terms in the Company’s contracts with end-customers typicallycustomers do not exceed aone year and generally pertaintherefore contracts do not contain a significant financing component. In most cases, after appropriate credit evaluations, payments are due in arrears and are recognized as receivables. Unbilled revenue is recorded when performance obligations have been satisfied, but not yet billed to the customer. Unbilled revenue as of March 31, 2022 and December 31, 2021 was $33.9 million and $32.1 million, respectively, and is included within accounts receivable. Deferred revenue and customer prepayments are recorded when cash payments are received or due in advance of the performance obligation being satisfied. Deferred revenue primarily includes prepaid service contracts, that represent an obligation to perform repair or other services on a customer's pre-defined equipment overas well as deferred installation.

The Company generally expenses sales commissions when incurred because the contract period.period is one year or less. These costs are recorded within selling, general, and administrative expenses. The Company also sometimes enters into contracts with end-customers that comprise arrangements that require separate deliveryhas not disclosed the value of multiple goods and/or services, including post-shipment obligations such as installation. Immaterial impacts from adopting the new standard include the recognition of certain revenue forunsatisfied performance obligations that wereother than customer pre-payments and deferred until post-shipment obligations were completed. The number of performance obligations under the new standard is also not materially different from the Company's financial accounting and reporting model under the existing standard. The Company is still evaluating the adoption method it will elect upon implementation. The Company is also in the process of implementing appropriate changes to its business processes, systems and controls to support recognition and disclosures under the new standard.

4.     FINANCIAL INSTRUMENTS

The Company has limited involvement with derivative financial instruments and does not use them for trading purposes. The Company enters into certain interest rate swap agreements in order to manage its

Cash Flow Hedges

In June 2017,November 2021, the Company entered into a cross currency swap arrangement designated as a cash flow hedge. The agreement converts $100$50 million of borrowings under the Company's credit facility into synthetic Swiss franc debt, which allows the Company to effectively change the floating rate LIBOR-based interest paymentpayments, excluding the credit spread, to a fixed Swiss franc income of 0.01%0.64%. The swap matures in November 2023.

In June 2019, the Company entered into a cross currency swap arrangement designated as a cash flow hedge. The agreement converts $50 million of borrowings under the Company's credit facility into synthetic Swiss franc debt, which allows the Company to effectively change the floating rate LIBOR-based interest payments, excluding the credit spread, to a fixed Swiss franc income of 0.82%. The swap began in June 20172019 and matures in June 2019.2023.

TheIn 2015, the Company hasentered into an interest rate swap agreement designated as a cash flow hedge. The agreement is a swap which has the effect of changing the floating rate LIBOR-based interest payments associated with $50 million of borrowings under the Company’s credit facility to a fixed obligation of 2.52%. The swap began in October 2015 and matures in October 2020.

The Company's cash flow hedges are recorded gross at fair value in the consolidated balance sheet at September 30, 2017March 31, 2022 and December 31, 2016, respectively, and disclosed in Note 5 to the consolidated financial statements. Amounts reclassified into other comprehensive income and the effective portions of the cash flow hedges are further disclosed in Note 9 to the consolidated financial statements.2021, respectively. A derivative

Other Derivatives

The Company enters into foreign currency forward contracts in order to economically hedge short-term trade and non-trade intercompany balances largely denominated in Swiss franc, other major European currencies, and the Chinese Renminbirenminbi with its foreign businesses. In accordance with U.S. GAAP, these contracts are considered “derivatives not designated as hedging instruments.” Gains or losses on these instruments are reported in current earnings. The foreign currency forward contracts are recorded at fair value in the consolidated balance sheet at September 30, 2017March 31, 2022 and December 31, 2016, respectively, and 2021, as

5.    FAIR VALUE MEASUREMENTS

Under U.S. GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement consists of observable and unobservable inputs that reflect the assumptions that a market participant would use in pricing an asset or liability.

6.     INCOME TAXES

The Company's reported tax rate was 18.3% and 19.3% during the three months ended March 31, 2022 and 2021, respectively. The provision for taxes is based upon using the Company's projected annual effective tax rate of 22%19% and 19.5% before non-recurring discrete tax items for both the threeduring 2022 and nine month periods ended September 30, 2017.2021, respectively. The reduction indifference between the Company's estimatedprojected annual effective tax rate from 24% in 2016 to 22% in 2017, as well asand the Company's reported tax rate of 25% and 21% during the three and nine months ending September 30, 2017, is primarily related to the Company's adoptiontiming of ASU 2016-09 pertaining to excess tax benefits associated with stock option exercises. The Company's 2017 estimated annual tax rate