Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 26, 2022 | Apr. 22, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 26, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-15943 | |
Entity Registrant Name | CHARLES RIVER LABORATORIES INTERNATIONAL, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 06-1397316 | |
Entity Address, Address Line One | 251 Ballardvale Street | |
Entity Address, City or Town | Wilmington | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 01887 | |
City Area Code | 781 | |
Local Phone Number | 222-6000 | |
Title of 12(b) Security | Common stock, $0.01 par value | |
Trading Symbol | CRL | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Smaller Reporting Company | false | |
Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 50,804,860 | |
Entity Central Index Key | 0001100682 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Total revenue | $ 913,929 | $ 824,566 |
Costs and expenses: | ||
Selling, general and administrative | 150,033 | 155,733 |
Amortization of intangible assets | 38,007 | 28,842 |
Operating income | 148,778 | 123,703 |
Other income (expense): | ||
Interest income | 127 | 35 |
Interest expense | (9,434) | (29,719) |
Other expense, net | (28,625) | (27,717) |
Income before income taxes | 110,846 | 66,302 |
Provision for income taxes | 15,620 | 2,367 |
Net income | 95,226 | 63,935 |
Less: Net income attributable to noncontrolling interests | 2,204 | 2,405 |
Net income attributable to common shareholders | $ 93,022 | $ 61,530 |
Earnings per common share | ||
Basic (in dollars per share) | $ 1.84 | $ 1.23 |
Diluted (in dollars per share) | $ 1.81 | $ 1.20 |
Weighted-average number of common shares outstanding: | ||
Basic (in shares) | 50,640 | 49,980 |
Diluted (in shares) | 51,325 | 51,075 |
Service | ||
Total revenue | $ 720,485 | $ 626,581 |
Costs and expenses: | ||
Cost of services provided and products sold (excluding amortization of intangible assets) | 486,864 | 423,975 |
Product | ||
Total revenue | 193,444 | 197,985 |
Costs and expenses: | ||
Cost of services provided and products sold (excluding amortization of intangible assets) | $ 90,247 | $ 92,313 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 95,226 | $ 63,935 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustment | (12,952) | 9,829 |
Amortization of net loss and prior service benefit included in net periodic cost for pension and other post-retirement benefit plans | 746 | 988 |
Comprehensive income, before income taxes related to items of other comprehensive income | 83,020 | 74,752 |
Less: Income tax benefit related to items of other comprehensive income | (2,018) | (1,025) |
Comprehensive income, net of income taxes | 85,038 | 75,777 |
Less: Comprehensive income related to noncontrolling interests, net of income taxes | 2,209 | 2,390 |
Comprehensive income attributable to common shareholders, net of income taxes | $ 82,829 | $ 73,387 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 241,869 | $ 241,214 |
Trade receivables and contract assets, net of allowances for credit losses of $6,154 and $7,180, respectively | 697,843 | 642,881 |
Inventories | 221,175 | 199,146 |
Prepaid assets | 90,496 | 93,543 |
Other current assets | 81,703 | 97,311 |
Total current assets | 1,333,086 | 1,274,095 |
Property, plant and equipment, net | 1,321,618 | 1,291,068 |
Operating lease right-of-use assets, net | 304,758 | 292,941 |
Goodwill | 2,695,994 | 2,711,881 |
Client relationships and other intangible assets, net | 1,019,537 | 1,061,192 |
Deferred tax assets | 43,404 | 40,226 |
Other assets | 356,652 | 352,889 |
Total assets | 7,075,049 | 7,024,292 |
Current liabilities: | ||
Current portion of long-term debt and finance leases | 2,642 | 2,795 |
Accounts payable | 225,977 | 198,130 |
Accrued compensation | 165,224 | 246,119 |
Deferred revenue | 228,260 | 219,703 |
Accrued liabilities | 227,203 | 228,797 |
Other current liabilities | 144,533 | 137,641 |
Total current liabilities | 993,839 | 1,033,185 |
Long-term debt, net and finance leases | 2,676,165 | 2,663,564 |
Operating lease right-of-use liabilities | 264,356 | 252,972 |
Deferred tax liabilities | 230,949 | 239,720 |
Other long-term liabilities | 239,015 | 242,859 |
Total liabilities | 4,404,324 | 4,432,300 |
Commitments and contingencies (Notes 2, 9, 11 and 13) | ||
Redeemable noncontrolling interests | 55,819 | 53,010 |
Equity: | ||
Preferred stock, $0.01 par value; 20,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $0.01 par value; 120,000 shares authorized; 50,911 shares issued and 50,800 shares outstanding as of March 26, 2022, and 50,480 shares issued and outstanding as of December 25, 2021 | 509 | 505 |
Additional paid-in capital | 1,744,829 | 1,718,304 |
Retained earnings | 1,073,773 | 980,751 |
Treasury stock, at cost, 111 and 0 shares, as of March 26, 2022 and December 25, 2021, respectively | (33,994) | 0 |
Accumulated other comprehensive loss | (174,933) | (164,740) |
Total equity attributable to common shareholders | 2,610,184 | 2,534,820 |
Noncontrolling interest | 4,722 | 4,162 |
Total equity | 2,614,906 | 2,538,982 |
Total liabilities, redeemable noncontrolling interests and equity | 7,075,049 | 7,024,292 |
Client relationships, net | ||
Current assets: | ||
Client relationships and other intangible assets, net | 948,830 | 981,398 |
Other intangible assets, net | ||
Current assets: | ||
Client relationships and other intangible assets, net | $ 70,707 | $ 79,794 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 6,154 | $ 7,180 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 120,000,000 | 120,000,000 |
Common stock, shares issued (in shares) | 50,911,000 | 50,480,000 |
Common stock, shares outstanding (in shares) | 50,800,000 | 50,480,000 |
Treasury stock, shares (in shares) | 111,000 | 0 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Cash flows relating to operating activities | ||
Net income | $ 95,226 | $ 63,935 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 75,299 | 61,508 |
Stock-based compensation | 14,619 | 13,189 |
Loss on debt extinguishment and other financing costs | 1,028 | 26,907 |
Deferred income taxes | (7,563) | (9,125) |
Loss on venture capital and strategic equity investments, net | 13,903 | 16,719 |
Contingent consideration, fair value changes | (3,450) | 0 |
Other, net | 5,211 | 496 |
Changes in assets and liabilities: | ||
Trade receivables and contract assets, net | (57,942) | 5,598 |
Inventories | (23,164) | (11,404) |
Accounts payable | 40,932 | 9,622 |
Accrued compensation | (79,795) | (37,360) |
Deferred revenue | 12,078 | 5,006 |
Customer contract deposits | 4,750 | (5,446) |
Other assets and liabilities, net | 11,498 | 30,584 |
Net cash provided by operating activities | 102,630 | 170,229 |
Cash flows relating to investing activities | ||
Acquisition of businesses and assets, net of cash acquired | 0 | (94,197) |
Capital expenditures | (80,464) | (28,030) |
Purchases of investments and contributions to venture capital investments | (13,296) | (16,550) |
Proceeds from sale of investments | 205 | 0 |
Other, net | (4,450) | 781 |
Net cash used in investing activities | (98,005) | (137,996) |
Cash flows relating to financing activities | ||
Proceeds from long-term debt and revolving credit facility | 962,005 | 1,954,011 |
Proceeds from exercises of stock options | 12,199 | 19,612 |
Payments on long-term debt, revolving credit facility, and finance lease obligations | (948,267) | (1,714,195) |
Purchase of treasury stock | (33,994) | (36,028) |
Payment of debt extinguishment and financing costs | 0 | (28,680) |
Other, net | (5,226) | 0 |
Net cash (used in) provided by financing activities | (13,283) | 194,720 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 5,740 | 10,953 |
Net change in cash, cash equivalents, and restricted cash | (2,918) | 237,906 |
Cash, cash equivalents, and restricted cash, beginning of period | 246,314 | 233,119 |
Cash, cash equivalents, and restricted cash, end of period | 243,396 | 471,025 |
Supplemental cash flow information: | ||
Cash and cash equivalents | 241,869 | 465,411 |
Restricted cash included in Other current assets | 413 | 4,012 |
Restricted cash included in Other assets | 1,114 | 1,602 |
Cash, cash equivalents, and restricted cash, end of period | $ 243,396 | $ 471,025 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | Total | Total Equity Attributable to Common Shareholders | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Noncontrolling Interest |
Beginning balance (in shares) at Dec. 26, 2020 | 49,767 | 0 | ||||||
Beginning balance at Dec. 26, 2020 | $ 2,118,169 | $ 2,114,602 | $ 498 | $ 1,627,564 | $ 625,414 | $ (138,874) | $ 0 | $ 3,567 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 62,220 | 61,530 | 61,530 | 690 | ||||
Other comprehensive income (loss) | 11,857 | 11,857 | 11,857 | |||||
Adjustment of redeemable noncontrolling interest to redemption value | (835) | (835) | (835) | |||||
Issuance of stock under employee compensation plans (in shares) | 583 | |||||||
Issuance of stock under employee compensation plans | 19,612 | 19,612 | $ 6 | 19,606 | ||||
Purchase of treasury shares (in shares) | 134 | |||||||
Purchase of treasury shares | (36,028) | (36,028) | $ (36,028) | |||||
Stock-based compensation | 13,189 | 13,189 | 13,189 | |||||
Ending balance (in shares) at Mar. 27, 2021 | 50,350 | 134 | ||||||
Ending balance at Mar. 27, 2021 | 2,188,184 | 2,183,927 | $ 504 | 1,659,524 | 686,944 | (127,017) | $ (36,028) | 4,257 |
Beginning balance (in shares) at Dec. 25, 2021 | 50,480 | 0 | ||||||
Beginning balance at Dec. 25, 2021 | 2,538,982 | 2,534,820 | $ 505 | 1,718,304 | 980,751 | (164,740) | $ 0 | 4,162 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 93,582 | 93,022 | 93,022 | 560 | ||||
Other comprehensive income (loss) | (10,193) | (10,193) | (10,193) | |||||
Adjustment of redeemable noncontrolling interest to redemption value | (1,161) | (1,161) | (1,161) | |||||
Issuance of stock under employee compensation plans (in shares) | 431 | |||||||
Issuance of stock under employee compensation plans | 13,071 | 13,071 | $ 4 | 13,067 | ||||
Purchase of treasury shares (in shares) | 111 | |||||||
Purchase of treasury shares | (33,994) | (33,994) | $ (33,994) | |||||
Stock-based compensation | 14,619 | 14,619 | 14,619 | |||||
Ending balance (in shares) at Mar. 26, 2022 | 50,911 | 111 | ||||||
Ending balance at Mar. 26, 2022 | $ 2,614,906 | $ 2,610,184 | $ 509 | $ 1,744,829 | $ 1,073,773 | $ (174,933) | $ (33,994) | $ 4,722 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 26, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying condensed consolidated financial statements are unaudited and have been prepared by Charles River Laboratories International, Inc. (the Company) in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The year-end condensed consolidated balance sheet data was derived from the Company’s audited consolidated financial statements, but does not include all disclosures required by U.S. GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for fiscal year 2021. The unaudited condensed consolidated financial statements, in the opinion of management, reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position and results of operations. Use of Estimates The preparation of unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires that the Company make estimates and judgments that may affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, judgments, and methodologies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known. Newly Issued Accounting Pronouncements In November 2021, the FASB issued ASU 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities About Government Assistance.” ASU 2021-10 requires disclosures about transactions with a government that have been accounted for by a grant or contribution accounting model to increase transparency about the types of transactions, the accounting for the transactions, and the effect on the financial statements. The ASU is an annual disclosure effective for fiscal years beginning after December 15, 2021 and will be applied on a prospective basis. The Company is currently evaluating the impact this new standard will have on the consolidated financial statements and related disclosures, but does not believe there will be a material impact. Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note 1, “Description of Business and Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for fiscal year 2021. Consolidation The Company’s unaudited condensed consolidated financial statements reflect its financial statements and those of its subsidiaries in which the Company holds a controlling financial interest. For consolidated entities in which the Company owns or is exposed to less than 100% of the economics, the Company records net income (loss) attributable to noncontrolling interests in its consolidated statements of income equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. Intercompany balances and transactions are eliminated in consolidation. The Company’s fiscal year is typically based on 52-weeks, with each quarter composed of 13 weeks ending on the last Saturday on, or closest to, March 31, June 30, September 30, and December 31. A 53rd week in the fourth quarter of the fiscal year is occasionally necessary to align with a December 31 calendar year-end, which will occur in this fiscal year 2022. Segment Reporting The Company reports its results in three reportable segments: Research Models and Services (RMS), Discovery and Safety Assessment (DSA), and Manufacturing Solutions (Manufacturing). The Company’s RMS reportable segment includes the Research Models, Research Model Services, and Research and GMP-Compliant Cells businesses. Research Models includes the commercial production and sale of small research models, as well as the supply of large research models. Research Model Services includes: Genetically Engineered Models and Services (GEMS), which performs contract breeding and other services associated with genetically engineered models; Research Animal Diagnostic Services (RADS), which provides health monitoring and diagnostics services related to research models; Insourcing Solutions (IS), which provides colony management of its clients’ research operations (including recruitment, training, staffing, and management services); and Research and GMP-Compliant Cells, which supplies controlled, consistent, customized primary cells and blood components derived from normal and mobilized peripheral blood, bone marrow, and cord blood. The Company’s DSA reportable segment includes services required to take a drug through the early development process including discovery services, which are non-regulated services to assist clients with the identification, screening, and selection of a lead compound for drug development, and regulated and nonregulated (GLP and non-GLP) safety assessment services. The Company’s Manufacturing reportable segment includes |
ACQUISITIONS AND DIVESTITURES
ACQUISITIONS AND DIVESTITURES | 3 Months Ended |
Mar. 26, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES Fiscal 2022 Acquisition On April 5, 2022, the Company acquired Explora BioLabs Holdings, Inc. (Explora BioLabs), a provider of contract vivarium research services, providing biopharmaceutical clients with turnkey in vivo vivarium facilities, management and related services to efficiently conduct their early-stage research activities. The acquisition of Explora BioLabs complements the Company’s existing Insourcing Solutions business, specifically the CRADL (Charles River Accelerator and Development Lab) footprint, and offers incremental opportunities to partner with an emerging client base, many of which are engaged in cell and gene therapy development. The preliminary purchase price of Explora BioLabs was approximately $295 million in cash, subject to customary closing adjustments. The acquisition was funded through proceeds from the Company’s credit facility (Credit Facility). This business will be reported as part of the Company’s RMS segment. Due to the limited time between the acquisition date and the filing of this Quarterly Report on Form 10-Q, it is not practicable for the Company to disclose the preliminary allocation of the purchase price to assets acquired and liabilities assumed. Fiscal 2021 Acquisitions Vigene Biosciences, Inc. On June 28, 2021, the Company acquired Vigene Biosciences, Inc. (Vigene), a gene therapy contract development and manufacturing organization (CDMO), providing viral vector-based gene delivery solutions. The acquisition enables clients to seamlessly conduct analytical testing, process development, and manufacturing for advanced modalities with the same scientific partner. The purchase price of Vigene was $323.9 million, net of $2.7 million in cash. Included in the purchase price are contingent payments fair valued at $34.5 million, which was estimated using a Monte Carlo Simulation model (the maximum contingent contractual payments are up to $57.5 million based on future performance). The acquisition was funded through a combination of available cash and proceeds from the Company’s Credit Facility. This business is reported as part of the Company’s Manufacturing reportable segment. Retrogenix Limited On March 30, 2021, the Company acquired Retrogenix Limited (Retrogenix), an early-stage contract research organization providing specialized bioanalytical services utilizing its proprietary cell microarray technology. The acquisition of Retrogenix enhances the Company’s scientific expertise with additional large molecule and cell therapy discovery capabilities. The purchase price of Retrogenix was $53.9 million, net of $8.5 million in cash. Included in the purchase price are contingent payments fair valued at $6.9 million, which is the maximum potential payout, and was based on a probability-weighted approach. The acquisition was funded through a combination of available cash and proceeds from the Company’s Credit Facility. This business is reported as part of the Company’s DSA reportable segment. Cognate BioServices, Inc. On March 29, 2021, the Company acquired Cognate BioServices, Inc. (Cognate), a cell and gene therapy CDMO offering comprehensive manufacturing solutions for cell therapies, as well as for the production of plasmid DNA and other inputs in the CDMO value chain. The acquisition of Cognate establishes the Company as a scientific partner for cell and gene therapy development, testing, and manufacturing, providing clients with an integrated solution from basic research and discovery through cGMP production. The purchase price of Cognate was $877.9 million, net of $70.5 million in cash, subject to certain post-closing adjustments and includes $15.7 million of consideration for an approximate 2% ownership interest not acquired, which was redeemed in April 2022 with the ultimate payout tied to performance in 2021. The acquisition was funded through a combination of available cash and proceeds from the Company’s Credit Facility and senior notes (Senior Notes) issued in fiscal 2021. This business is reported as part of the Company’s Manufacturing reportable segment. Distributed Bio, Inc. On December 31, 2020, the Company acquired Distributed Bio, Inc. (Distributed Bio), a next-generation antibody discovery company with technologies specializing in enhancing the probability of success for delivering high-quality, readily formattable antibody fragments to support antibody and cell and gene therapy candidates to biopharmaceutical clients. The acquisition of Distributed Bio expands the Company’s capabilities with an innovative, large-molecule discovery platform, and creates an integrated, end-to-end platform for therapeutic antibody and cell and gene therapy discovery and development. The purchase price of Distributed Bio was $97.0 million, net of $0.8 million in cash. The total consideration includes $80.8 million cash paid, settlement of $3.0 million in convertible promissory notes previously issued by the Company during prior fiscal years, and $14.1 million of contingent consideration, which was estimated using a Monte Carlo Simulation model (the maximum contingent contractual payments are up to $21.0 million based on future performance and milestone achievements over a one-year period). The acquisition was funded through a combination of available cash and proceeds from the Company’s Credit Facility. This business is reported as part of the Company’s DSA reportable segment. Other Acquisition On March 3, 2021, the Company acquired certain assets from a distributor that supports the Company’s DSA reportable segment. The purchase price was $35.4 million, which includes $19.5 million in cash paid ($5.5 million of which was paid in fiscal 2020), and $15.9 million of contingent consideration, which was estimated using a Monte Carlo Simulation model (the maximum contingent contractual payments are up to $17.5 million based on future performance over a three-year period). The fair value of the net assets acquired included $17.3 million of goodwill, $15.2 million attributed to supplier relationships (to be amortized over a 4-year period), and $3.0 million of property, plant, and equipment. The business is reported as part of the Company’s DSA reportable segment. Purchase price information The purchase price allocation was as follows: Vigene (3) Retrogenix Cognate Distributed Bio June 28, 2021 March 30, 2021 March 29, 2021 December 31, 2020 (in thousands) Trade receivables $ 3,548 $ 2,266 $ 18,566 $ 2,722 Other current assets (excluding cash) 1,657 209 14,128 221 Property, plant and equipment 7,649 400 52,082 2,382 Operating lease right-of-use asset, net 22,507 1,385 34,349 1,586 Goodwill (1) 239,681 34,489 611,555 71,585 Definite-lived intangible assets 93,900 22,126 270,900 24,540 Other long-term assets 694 — 6,098 469 Deferred revenue (4,260) (434) (20,539) (1,319) Other current liabilities (2) (6,319) (1,141) (45,388) (1,504) Operating lease right-of-use liabilities (Long-term) (21,220) (1,205) (31,383) (1,123) Deferred tax liabilities (13,958) (4,174) (32,503) (2,529) Total purchase price allocation $ 323,879 $ 53,921 $ 877,865 $ 97,030 (1) The goodwill resulting from these transactions is primarily attributable to the potential growth of the Company’s segments from new customers introduced to the acquired businesses and the assembled workforce of the acquirees. The goodwill attributable to these entities is not deductible for tax purposes. (2) In connection with its acquisitions of businesses, the Company routinely records liabilities related to indirect state and local taxes for preacquisition periods when such liabilities are estimable and deemed probable. The Company may or may not be indemnified for such indirect tax liabilities under terms of the acquisitions. As these indirect tax contingencies are resolved, actual obligations, and any indemnifications, may differ from the recorded amounts and any differences are reflected in reported results in the period in which these are resolved. As of March 26, 2022, the Company estimates that it is reasonably possible that these recorded liabilities of $17 million may decrease over the next twelve month period as the Company seeks a favorable ruling from tax authorities on certain indirect tax positions. (3) Purchase price allocation is preliminary and subject to change as additional information becomes available concerning the fair value and tax basis of the assets acquired and liabilities assumed, including certain contracts and obligations. Any additional adjustments to the purchase price allocation will be made as soon as practicable but no later than one year from the date of acquisition. The definite-lived intangible assets acquired were as follows: Vigene Retrogenix Cognate Distributed Bio Definite-Lived Intangible Assets (in thousands) Client relationships $ 87,500 $ 17,340 $ 257,200 $ 16,080 Other intangible assets 6,400 4,786 13,700 8,460 Total definite-lived intangible assets $ 93,900 $ 22,126 $ 270,900 $ 24,540 Weighted Average Amortization Life (in years) Client relationships 12 13 13 9 Other intangible assets 2 3 2 4 Total definite-lived intangible assets 11 11 13 7 The company incurred transaction and integration costs in connection with its acquisitions of $7.1 million and $8.7 million, which were included in Selling, general and administrative expenses within the unaudited condensed consolidated statements of income for the three months ended March 26, 2022 and March 27, 2021, respectively. Pro forma information The following selected unaudited pro forma consolidated results of operations are presented as if the Cognate and Vigene acquisitions had occurred as of the beginning of the period immediately preceding the period of acquisition, which is December 29, 2019, after giving effect to certain adjustments. For the three months ended March 26, 2021, these adjustments included additional amortization of intangible assets and depreciation of fixed assets of $9.2 million, additional interest expense on borrowing of $3.4 million, elimination of intercompany activity and other one-time costs, and the tax impacts of these adjustments. All other acquisitions have not been included because that information is not material to the consolidated financial statements. Three Months Ended March 27, 2021 (in thousands) (unaudited) Revenue $ 858,800 Net income attributable to common shareholders 37,575 These unaudited pro forma results of operations have been prepared for comparative purposes only, and they do not purport to be indicative of the results of operations that actually would have resulted had the acquisition occurred on the dates indicated or that may result in the future. No effect has been given for synergies, if any, that may be realized through the acquisition. RMS Japan Divestiture On October 12, 2021, the Company sold its RMS Japan operations to The Jackson Laboratory for a preliminary purchase price of $73.1 million, which included $7.9 million in cash, $3.8 million pension over funding, and certain post-closing adjustments. The RMS Japan business was reported in the Company’s RMS reportable segment. The Company determined that the RMS Japan business was not optimized within the Company’s portfolio at its current scale, and that the capital could be better deployed in other long-term growth opportunities. CDMO Sweden Divestiture On October 12, 2021, the Company sold its gene therapy CDMO site in Sweden to a private investor group for a preliminary purchase price of $59.6 million, net of $0.2 million in cash and other post-closing adjustments that may impact the purchase price. Included in the purchase price are contingent payments fair valued at $15.3 million, which were estimated using a probability weighted model (the maximum contingent contractual payments are up to $25.0 million based on future performance), as well as a purchase obligation of approximately $10.0 million between the parties. The CDMO Sweden business was acquired in March 2021 as part of the acquisition of Cognate and was reported in the Company’s Manufacturing reportable segment. The Company routinely evaluates the strategic fit and fundamental performance of our acquisitions integrated within our global infrastructure. As part of this assessment, the Company determined that this capital could be better deployed in other long-term growth opportunities. The carrying amounts of the major classes of assets and liabilities associated with the divestitures of the businesses were as follows: October 12, 2021 RMS Japan CDMO Sweden (in thousands) Assets Current assets $ 26,524 $ 8,187 Property, plant, and equipment, net 17,379 14,339 Operating lease right-of-use assets, net — 19,733 Goodwill 4,129 27,764 Intangible assets, net — 14,089 Other assets 3,695 — Total assets $ 51,727 $ 84,112 Liabilities Current liabilities $ 8,705 $ 6,386 Operating lease right-of-use liabilities — 18,221 Long-term liabilities 94 — Total liabilities $ 8,799 $ 24,607 |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 3 Months Ended |
Mar. 26, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERS Disaggregation of Revenue The following table disaggregates the Company’s revenue by major business line and timing of transfer of products or services: Three Months Ended March 26, 2022 March 27, 2021 (in thousands) Timing of Revenue Recognition: RMS Services and products transferred over time $ 69,924 $ 64,896 Services and products transferred at a point in time 106,618 112,014 Total RMS revenue 176,542 176,910 DSA Services and products transferred over time 542,336 500,468 Services and products transferred at a point in time 1,923 710 Total DSA revenue 544,259 501,178 Manufacturing Services and products transferred over time 95,009 50,568 Services and products transferred at a point in time 98,119 95,910 Total Manufacturing revenue 193,128 146,478 Total revenue $ 913,929 $ 824,566 RMS The RMS business generates revenue through the commercial production and sale of research models, research and GMP-compliant cells (cell supply), and the provision of services related to the maintenance and monitoring of research models and management of clients’ research operations. Revenue from the sale of research models and cell supply is recognized at a point in time when the customer obtains control of the product, which may be upon shipment or upon delivery based on the shipping terms of a contract. Revenue generated from research models services is recognized over time and is typically based on a right-to-invoice measure of progress (output method) as invoiced amounts correspond directly to the value of the Company’s performance to date. DSA The DSA business provides a full suite of integrated drug discovery services directed at the identification, screening and selection of a lead compound for drug development and offers a full range of safety assessment services including bioanalysis, drug metabolism, pharmacokinetics, toxicology and pathology. DSA services revenue is generally recognized over time using the cost-to-cost or right to invoice measures of progress, primarily representing fixed fee service contracts and per unit service contracts, respectively. Manufacturing The Manufacturing business includes Microbial Solutions, which provides in vitro (non-animal) lot-release testing products, microbial detection products, and species identification services; Biologics Solutions (Biologics), which performs specialized testing of biologics (Biologics Testing Solutions) as well as contract development and manufacturing products and services (CDMO); and Avian Vaccine Services (Avian), which supplies specific-pathogen-free chicken eggs and chickens. Species identification service revenue is generally recognized at a point in time as identifications are completed by the Company. Biologics service revenue is generally recognized over time using the cost-to-cost measure of progress. Microbial Solutions and Avian product sales are generally recognized at a point in time when the customer obtains control of the product, which may be upon shipment or upon delivery based on the contractual shipping terms of a contract. Transaction Price Allocated to Future Performance Obligations The Company discloses the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of March 26, 2022. Excluded from the disclosure is the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less (ii) contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed and (iii) service revenue recognized in accordance with ASC 842, “Leases” (see additional disclosure for Other Performance Obligations). The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially satisfied) as of March 26, 2022: Revenue Expected to be Recognized in Future Periods Less than 1 Year 1 to 3 Years 4 to 5 Years Beyond 5 Years Total (in thousands) DSA $ 404,549 $ 414,174 $ 36,670 $ 1,752 $ 857,145 Manufacturing 1,875 — — — 1,875 Total $ 406,424 $ 414,174 $ 36,670 $ 1,752 $ 859,020 Contract Balances from Contracts with Customers The timing of revenue recognition, billings and cash collections results in billed receivables (client receivables), contract assets (unbilled revenue), and contract liabilities (current and long-term deferred revenue and customer contract deposits) on the unaudited condensed consolidated balance sheets. The Company’s payment terms are generally 30 days in the United States and consistent with prevailing practice in international markets. A contract asset is recorded when a right to consideration in exchange for goods or services transferred to a customer is conditioned other than the passage of time. Client receivables are recorded separately from contract assets since only the passage of time is required before consideration is due. A contract liability is recorded when consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract. Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met. The following table provides information about client receivables, contract assets, and contract liabilities from contracts with customers: March 26, 2022 December 25, 2021 (in thousands) Balances from contracts with customers: Client receivables $ 526,736 $ 489,452 Contract assets (unbilled revenue) 177,261 160,609 Contract liabilities (current and long-term deferred revenue) 251,182 240,281 Contract liabilities (customer contract deposits) 63,985 59,512 When the Company does not have the unconditional right to advanced billings, both advanced client payments and unpaid advanced client billings are excluded from deferred revenue, with the advanced billings also being excluded from client receivables. The Company excluded approximately $44 million and $36 million of unpaid advanced client billings from both client receivables and deferred revenue in the accompanying unaudited condensed consolidated balance sheets as of March 26, 2022 and December 25, 2021, respectively. Advanced client payments of approximately $64 million and $60 million have been presented as customer contract deposits within other current liabilities in the accompanying unaudited condensed consolidated balance sheets as of March 26, 2022 and December 25, 2021, respectively. Other changes in the contract asset and the contract liability balances during the three months ended March 26, 2022 and March 27, 2021 were as follows: (i) Changes due to acquisitions and divestitures: See Note 2. “Acquisitions and Divestitures” for the Company’s recent acquisitions. (ii) Cumulative catch-up adjustments to revenue that affect the corresponding contract asset or contract liability, including adjustments arising from a change in the measure of progress, a change in an estimate of the transaction price (including any changes in the assessment of whether an estimate of variable consideration is constrained), or a contract modification: During the three months ended March 26, 2022 and March 27, 2021, immaterial cumulative catch-up adjustments to revenue were recorded. (iii) A change in the time frame for a right to consideration to become unconditional (that is, for a contract asset to be recorded as a client receivable): Approximately 60% of unbilled revenue as of December 25, 2021, which was $161 million, was billed during the three months ended March 26, 2022. Approximately 60% of unbilled revenue as of December 26, 2020, which was $135 million, was billed during the three months ended March 27, 2021. (iv) A change in the time frame for a performance obligation to be satisfied (that is, for the recognition of revenue arising from a contract liability): Approximately 65% of contract liabilities as of December 25, 2021, which was $240 million, were recognized as revenue during the three months ended March 26, 2022. Approximately 60% of contract liabilities as of December 26, 2020, which was $227 million, were recognized as revenue during the three months ended March 27, 2021. Other Performance Obligation s As part of the Company’s service offerings, primarily in the Manufacturing segment, the Company has identified performance obligations related to leasing Company owned assets. In certain arrangements, customers obtain substantially all of the economic benefits of the identified assets, which may include manufacturing suites and related equipment, and have the right to direct the assets’ use over the term of the contract. The associated revenue is recognized on a straight-line basis over the term of the lease, which is generally less than one year. For the three months ended March 26, 2022, the Company recognized lease revenue of $7.9 million, which is recorded within service revenue, which is transferred over time, within the unaudited condensed consolidated statements of income. Due to the nature of these arrangements and timing of the contractual lease term, the remaining revenue to be recognized related to these lease performance obligations is not material to the unaudited condensed consolidated financial statements. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 26, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The following table presents revenue and other financial information by reportable segment: Three Months Ended March 26, 2022 March 27, 2021 (in thousands) RMS Revenue $ 176,542 $ 176,910 Operating income 47,882 44,935 Depreciation and amortization 9,469 9,679 Capital expenditures 8,646 2,983 DSA Revenue $ 544,259 $ 501,178 Operating income 104,986 90,949 Depreciation and amortization 46,789 44,608 Capital expenditures 48,930 17,040 Manufacturing Revenue $ 193,128 $ 146,478 Operating income 46,368 49,437 Depreciation and amortization 18,482 6,569 Capital expenditures 22,828 7,110 The following tables present reconciliations of segment operating income, depreciation and amortization, and capital expenditures to the respective consolidated amounts: Operating Income Depreciation and Amortization Capital Expenditures March 26, 2022 March 27, 2021 March 26, 2022 March 27, 2021 March 26, 2022 March 27, 2021 (in thousands) Three Months Ended: Total reportable segments $ 199,236 $ 185,321 $ 74,740 $ 60,856 $ 80,404 $ 27,133 Unallocated corporate (50,458) (61,618) 559 652 60 897 Total consolidated $ 148,778 $ 123,703 $ 75,299 $ 61,508 $ 80,464 $ 28,030 Revenue for each significant product or service offering is as follows: Three Months Ended March 26, 2022 March 27, 2021 (in thousands) RMS $ 176,542 $ 176,910 DSA 544,259 501,178 Manufacturing 193,128 146,478 Total revenue $ 913,929 $ 824,566 A summary of unallocated corporate expense consists of the following: Three Months Ended March 26, 2022 March 27, 2021 (in thousands) Stock-based compensation $ 8,503 $ 7,642 Compensation, benefits, and other employee-related expenses 28,636 27,362 External consulting and other service expenses 4,319 7,356 Information technology 2,474 4,095 Depreciation 559 652 Acquisition and integration 5,826 10,560 Other general unallocated corporate 141 3,951 Total unallocated corporate expense $ 50,458 $ 61,618 Other general unallocated corporate expense consists of costs associated with departments such as senior executives, corporate accounting, legal, tax, human resources, treasury, and investor relations. Revenue by geographic area is as follows: U.S. Europe Canada Asia Pacific Other Consolidated (in thousands) Three Months Ended: March 26, 2022 $ 526,549 $ 251,087 $ 85,246 $ 48,946 $ 2,101 $ 913,929 March 27, 2021 448,482 237,535 77,107 59,446 1,996 824,566 Included in the Other category above are operations located in Brazil and Israel. Revenue represents sales originating in entities physically located in the identified geographic area. |
SUPPLEMENTAL BALANCE SHEET INFO
SUPPLEMENTAL BALANCE SHEET INFORMATION | 3 Months Ended |
Mar. 26, 2022 | |
Supplemental Balance Sheet Information [Abstract] | |
SUPPLEMENTAL BALANCE SHEET INFORMATION | SUPPLEMENTAL BALANCE SHEET INFORMATION The composition of trade receivables and contract assets, net is as follows: March 26, 2022 December 25, 2021 (in thousands) Client receivables $ 526,736 $ 489,452 Unbilled revenue 177,261 160,609 Total 703,997 650,061 Less: Allowance for credit losses (6,154) (7,180) Trade receivables and contract assets, net $ 697,843 $ 642,881 The composition of inventories is as follows: March 26, 2022 December 25, 2021 (in thousands) Raw materials and supplies $ 34,763 $ 33,118 Work in process 35,651 40,268 Finished products 150,761 125,760 Inventories $ 221,175 $ 199,146 The composition of other current assets is as follows: March 26, 2022 December 25, 2021 (in thousands) Prepaid income tax $ 71,272 $ 84,725 Short-term investments 1,065 1,063 Restricted cash 413 4,023 Other receivables 8,953 7,500 Other current assets $ 81,703 $ 97,311 The composition of other assets is as follows: March 26, 2022 December 25, 2021 (in thousands) Venture capital investments $ 137,689 $ 149,640 Strategic equity investments 60,576 51,712 Life insurance policies 47,262 51,048 Other long-term income tax assets 18,195 18,690 Restricted cash 1,114 1,077 Long-term pension assets 39,626 39,582 Other 52,190 41,140 Other assets $ 356,652 $ 352,889 The composition of other current liabilities is as follows: March 26, 2022 December 25, 2021 (in thousands) Current portion of operating lease right-of-use liabilities $ 37,758 $ 33,267 Accrued income taxes 29,838 26,161 Customer contract deposits 63,985 59,512 Other 12,952 18,701 Other current liabilities $ 144,533 $ 137,641 The composition of other long-term liabilities is as follows: March 26, 2022 December 25, 2021 (in thousands) U.S. Transition Tax $ 43,057 $ 43,057 Long-term pension liability, accrued executive supplemental life insurance retirement plan and deferred compensation plans 107,000 104,944 Long-term deferred revenue 22,922 20,578 Other 66,036 74,280 Other long-term liabilities $ 239,015 $ 242,859 |
VENTURE CAPITAL AND STRATEGIC E
VENTURE CAPITAL AND STRATEGIC EQUITY INVESTMENTS | 3 Months Ended |
Mar. 26, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
VENTURE CAPITAL AND STRATEGIC EQUITY INVESTMENTS | VENTURE CAPITAL AND STRATEGIC EQUITY INVESTMENTS Venture capital investments were $137.7 million and $149.6 million as of March 26, 2022 and December 25, 2021, respectively. The Company’s total commitment to the venture capital funds as of March 26, 2022 was $173.9 million, of which the Company funded $116.6 million through that date. The Company received distributions totaling $1.3 million and $9.3 million for the three months ended March 26, 2022 and March 27, 2021, respectively. The Company recognized net losses on venture capital investments of $13.4 million for the three months ended March 26, 2022, driven by the decrease in the fair value of publicly-held investments offset by increases from private investments, and net losses of $16.4 million for the three months ended March 27, 2021, driven by both publicly-held and private investments. |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Mar. 26, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE The Company has certain financial assets and liabilities recorded at fair value, which have been classified as Level 1, 2, or 3 within the fair value hierarchy. Assets and liabilities measured at fair value on a recurring basis are summarized below: March 26, 2022 Level 1 Level 2 Level 3 Total Current assets measured at fair value: (in thousands) Cash equivalents $ — $ 2,030 $ — $ 2,030 Other assets: Life insurance policies — 40,045 — 40,045 Total assets measured at fair value $ — $ 42,075 $ — $ 42,075 Other current liabilities measured at fair value: Contingent consideration $ — $ — $ 13,515 $ 13,515 Other long-term liabilities measured at fair value: Contingent consideration — — 16,644 16,644 Total liabilities measured at fair value $ — $ — $ 30,159 $ 30,159 The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. During the three months ended March 26, 2022, there were no transfers between levels. December 25, 2021 Level 1 Level 2 Level 3 Total Current assets measured at fair value: (in thousands) Cash equivalents $ — $ 893 $ — $ 893 Other assets: Life insurance policies — 42,918 — 42,918 Total assets measured at fair value $ — $ 43,811 $ — $ 43,811 Other current liabilities measured at fair value: Contingent consideration $ — $ — $ 11,794 $ 11,794 Other long-term liabilities measured at fair value: Contingent consideration — — 25,450 25,450 Total liabilities measured at fair value $ — $ — $ 37,244 $ 37,244 During the year ended December 25, 2021, there were no transfers between levels. Contingent Consideration The following table provides a rollforward of the contingent consideration related to the Company’s acquisitions. Three Months Ended March 26, 2022 March 27, 2021 (in thousands) Beginning balance $ 37,244 $ 2,328 Additions — 29,990 Payments (3,301) — Total gains or losses (realized/unrealized): Adjustment of previously recorded contingent liability (3,450) 917 Foreign currency translation (334) (72) Ending balance $ 30,159 $ 33,163 The Company estimates the fair value of contingent consideration obligations through valuation models, such as probability-weighted and option pricing models, that incorporate probability adjusted assumptions and simulations related to the achievement of the milestones and the likelihood of making related payments. The unobservable inputs used in the fair value measurements include the probabilities of successful achievement of certain financial targets, forecasted results or targets, volatility, and discount rates. The remaining maximum potential payments are approximately $73 million, of which the value accrued as of March 26, 2022 is approximately $30 million. The weighted average probability of achieving the maximum target is approximately 42%. The average volatility and weighted average cost of capital are approximately 47% and 16%, respectively. Increases or decreases in these assumptions may result in a higher or lower fair value measurement, respectively. Debt Instruments The book value of the Company’s term and revolving loans, which are variable rate loans carried at amortized cost, approximates the fair value based on current market pricing of similar debt. As the fair value is based on significant other observable inputs, including current interest and foreign currency exchange rates, it is deemed to be Level 2 within the fair value hierarchy. The book value of the Company’s Senior Notes are fixed rate obligations carried at amortized cost. Fair value is based on quoted market prices as well as borrowing rates available to the Company. As the fair value is based on significant other observable outputs, it is deemed to be Level 2 within the fair value hierarchy. The book value and fair value of the Company’s Senior Notes is summarized below: March 26, 2022 December 25, 2021 Book Value Fair Value Book Value Fair Value 4.25% Senior Notes due 2028 $ 500,000 $ 483,100 $ 500,000 $ 521,250 3.75% Senior Notes due 2029 500,000 466,250 500,000 506,700 4.0% Senior Notes due 2031 500,000 466,850 500,000 507,500 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Mar. 26, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill The following table provides a rollforward of the Company’s goodwill: Adjustments to Goodwill December 25, 2021 Acquisition Related Foreign Exchange March 26, 2022 (in thousands) RMS $ 283,524 $ — $ (150) $ 283,374 DSA 1,472,506 — (9,505) 1,463,001 Manufacturing 955,851 (592) (5,640) 949,619 Goodwill $ 2,711,881 $ (592) $ (15,295) $ 2,695,994 Intangible Assets, Net The following table displays intangible assets, net by major class: March 26, 2022 December 25, 2021 Gross Accumulated Amortization Net Gross Accumulated Amortization Net (in thousands) Backlog $ 12,513 $ (10,712) $ 1,801 $ 12,577 $ (9,517) $ 3,060 Technology 134,544 (98,281) 36,263 135,764 (95,454) 40,310 Trademarks and trade names 13,018 (3,893) 9,125 13,086 (3,448) 9,638 Other 35,319 (11,801) 23,518 35,231 (8,445) 26,786 Other intangible assets 195,394 (124,687) 70,707 196,658 (116,864) 79,794 Client relationships 1,471,872 (523,042) 948,830 1,475,757 (494,359) 981,398 Intangible assets $ 1,667,266 $ (647,729) $ 1,019,537 $ 1,672,415 $ (611,223) $ 1,061,192 |
DEBT AND OTHER FINANCING ARRANG
DEBT AND OTHER FINANCING ARRANGEMENTS | 3 Months Ended |
Mar. 26, 2022 | |
Debt Disclosure [Abstract] | |
DEBT AND OTHER FINANCING ARRANGEMENTS | DEBT AND OTHER FINANCING ARRANGEMENTS Long-term debt, net and finance leases consists of the following: March 26, 2022 December 25, 2021 (in thousands) Revolving facility $ 1,174,169 $ 1,161,431 4.25% Senior Notes due 2028 500,000 500,000 3.75% Senior Notes due 2029 500,000 500,000 4.00% Senior Notes due 2031 500,000 500,000 Other debt 366 368 Finance leases 25,955 27,223 Total debt and finance leases 2,700,490 2,689,022 Less: Current portion of long-term debt 99 101 Current portion of finance leases 2,543 2,694 Current portion of long-term debt and finance leases 2,642 2,795 Long-term debt and finance leases 2,697,848 2,686,227 Debt discount and debt issuance costs (21,683) (22,663) Long-term debt, net and finance leases $ 2,676,165 $ 2,663,564 As of March 26, 2022 and December 25, 2021, the weighted average interest rate on the Company’s debt was 2.87% and 2.78%, respectively. During the three months ended March 27, 2021, the Company prepaid $500 million of Senior Notes due in 2026 along with $21 million of related debt extinguishment costs and $13 million of accrued interest using proceeds from additional senior notes issued on the same day. The payment of the 2026 Senior Notes was accounted for as a debt extinguishment. Approximately $21 million of debt extinguishment costs and $5 million of deferred financing costs write-offs were recorded in Interest expense for the three months ended March 27, 2021. Cross currency loans During the three months ended March 26, 2022 and March 27, 2021, the Company had multiple U.S. dollar denominated loans borrowed by a non-U.S. Euro functional currency entity under the Credit Facility, which were approximately $400 million each. This resulted in foreign currency losses recognized in Other (expense) income, net of $11.1 million and $13.4 million during the three months ended March 26, 2022 and March 27, 2021, respectively, related to the remeasurement of the underlying debt. As of March 26, 2022, the Company did not have any outstanding borrowings in a currency different than its respective functional currency. The Company periodically enters into foreign exchange forward contracts to limit its foreign currency exposure related to U.S. dollar denominated loans borrowed by a non-U.S. Euro functional currency entity under the Company’s Credit Facility. These contracts are not designated as hedging instruments. This resulted in gains recognized within Interest expense of $11.8 million and $14.0 million during the three months ended March 26, 2022 and March 27, 2021, respectively, related to these forward contracts. The Company had no open forward contracts related to a U.S. dollar denominated loan borrowed by a non-U.S. Euro functional currency a t March 26, 2022 or December 25, 2021. Letters of Credit As of March 26, 2022 and December 25, 2021, the Company had $17.7 million in outstanding letters of credit. |
EQUITY AND NONCONTROLLING INTER
EQUITY AND NONCONTROLLING INTERESTS | 3 Months Ended |
Mar. 26, 2022 | |
Equity [Abstract] | |
EQUITY AND NONCONTROLLING INTERESTS | EQUITY AND NONCONTROLLING INTERESTS Earnings Per Share The following table reconciles the numerator and denominator in the computations of basic and diluted earnings per share: Three Months Ended March 26, 2022 March 27, 2021 (in thousands) Numerator: Net income $ 95,226 $ 63,935 Less: Net income attributable to noncontrolling interests 2,204 2,405 Net income attributable to common shareholders $ 93,022 $ 61,530 Denominator: Weighted-average shares outstanding - Basic 50,640 49,980 Effect of dilutive securities: Stock options, restricted stock units and performance share units 685 1,095 Weighted-average shares outstanding - Diluted 51,325 51,075 Options to purchase 0.2 million and less than 0.1 million shares for the three months ended March 26, 2022 and March 27, 2021, respectively, as well as a non-significant number of restricted stock units (RSUs) and performance share units (PSUs), were not included in computing diluted earnings per share because their inclusion would have been anti-dilutive. Basic weighted-average shares outstanding for the three months ended March 26, 2022 and March 27, 2021 excluded the impact of 0.4 million and 0.6 million shares, respectively, of non-vested RSUs and PSUs. Treasury Shares During the three months ended March 26, 2022 and March 27, 2021, the Company did not repurchase any shares under its authorized stock repurchase program. As of March 26, 2022, the Company had $129.1 million remaining on the authorized stock repurchase program. The Company’s stock-based compensation plans permit the netting of common stock upon vesting of RSUs and PSUs in order to satisfy individual statutory tax withholding requirements. During the three months ended March 26, 2022 and March 27, 2021, the Company acquired 0.1 million shares for $34.0 million and 0.1 million shares for $36.0 million, respectively, from such netting. Accumulated Other Comprehensive Income (Loss) Changes to each component of accumulated other comprehensive income (loss), net of income taxes, are as follows: Foreign Currency Translation Adjustment Pension and Other Post-Retirement Benefit Plans Total (in thousands) December 25, 2021 $ (98,173) $ (66,567) $ (164,740) Other comprehensive loss before reclassifications (12,957) — (12,957) Amounts reclassified from accumulated other comprehensive income — 746 746 Net current period other comprehensive (loss) income (12,957) 746 (12,211) Income tax (benefit) expense (2,200) 182 (2,018) March 26, 2022 $ (108,930) $ (66,003) $ (174,933) Nonredeemable Noncontrolling Interest The Company has an investment in an entity whose financial results are consolidated in the Company’s unaudited condensed consolidated financial statements, as it has the ability to exercise control over this entity. The interest of the noncontrolling party in this entity has been recorded as noncontrolling interest within Equity in the accompanying unaudited condensed consolidated balance sheets. The activity within the nonredeemable noncontrolling interest was not significant during the three months ended March 26, 2022 and March 27, 2021. Redeemable Noncontrolling Interests The Company has a 92% equity interest in Vital River with an 8% redeemable noncontrolling interest. The Company has the right to purchase, and the noncontrolling interest holders have the right to sell, the remaining 8% equity interest at a contractually defined redemption value, subject to a redemption floor, which represents a derivative embedded within the equity instrument. The redeemable noncontrolling interest is measured at the greater of the amount that would be paid if settlement occurred as of the balance sheet date based on the contractually defined redemption value ($24.3 million as of March 26, 2022) and the carrying amount adjusted for net income (loss) attributable to the noncontrolling interest. As the noncontrolling interest holders have the ability to require the Company to purchase the remaining 8% interest, the noncontrolling interest is classified in the mezzanine section of the unaudited condensed consolidated balance sheets, which is presented above the equity section and below liabilities. The amount that the Company could be required to pay to purchase the remaining 8% equity interest is not limited. The Company has an 80% equity interest in a subsidiary with a 20% redeemable noncontrolling interest. In August 2022, the Company will have the right to purchase, and the noncontrolling interest holders have the right to sell (Put/call option), the remaining 20% equity interest at its appraised value ($31.5 million as of March 26, 2022). The redeemable noncontrolling interest is measured at the greater of the amount that would be paid if settlement occurred as of the balance sheet date based on the appraised value and the carrying amount adjusted for net income (loss) attributable to the noncontrolling interest or a predetermined floor value. As the noncontrolling interest holders have the ability to require the Company to purchase the remaining 20% interest, the noncontrolling interest is classified in the mezzanine section of the unaudited condensed consolidated balance sheets, which is presented above the equity section and below liabilities. The amount that the Company could be required to pay to purchase the remaining 20% equity interest is not limited. The following table provides a rollforward of the activity related to the Company’s redeemable noncontrolling interests: Three Months Ended March 26, 2022 March 27, 2021 (in thousands) Beginning balance $ 53,010 $ 25,499 Adjustment of noncontrolling interest to redemption value 1,161 835 Net income attributable to noncontrolling interests 1,644 1,716 Foreign currency translation 4 (15) Ending balance $ 55,819 $ 28,035 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 26, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s effective tax rates for the three months ended March 26, 2022 and March 27, 2021 were 14.1% and 3.6%, respectively. The increase in the effective tax rate from the prior year period was primarily attributable to a decreased tax benefit from stock-based compensation deductions in the three months ended March 26, 2022. For the three months ended March 26, 2022, the Company’s unrecognized tax benefits increased by $1.6 million to $34.2 million, primarily due to increases in research & development tax credit reserves. For the three months ended March 26, 2022, the amount of unrecognized income tax benefits that would impact the effective tax rate increased by $1.1 million to $31.1 million for the same reasons discussed above. The accrued interest on unrecognized tax benefits was $1.7 million as of March 26, 2022. The Company estimates that it is reasonably possible that the unrecognized tax benefits will decrease by approximately $11.3 million over the next twelve-month period, primarily due to audit settlements and expiring statutes of limitations. The Company conducts business in a number of tax jurisdictions. As a result, it is subject to tax audits on a regular basis including, but not limited to, such major jurisdictions as the U.S., the U.K., China, France, Germany, and Canada. With few exceptions, the Company is no longer subject to U.S. and international income tax examinations for years before 2018. The Company and certain of its subsidiaries have ongoing tax controversies in the U.S., Canada, France, the Netherlands, and India. The Company does not anticipate resolution of these audits will have a material impact on its consolidated financial statements. |
RESTRUCTURING AND ASSET IMPAIRM
RESTRUCTURING AND ASSET IMPAIRMENTS | 3 Months Ended |
Mar. 26, 2022 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING AND ASSET IMPAIRMENTS | RESTRUCTURING AND ASSET IMPAIRMENTS In recent fiscal years, the Company has undertaken productivity improvement initiatives within all reportable segments at various locations across the U.S., Canada, Europe, and China. This includes workforce right-sizing and scalability initiatives, resulting in severance and transition costs; and cost related to the consolidation of facilities, resulting in asset impairment and accelerated depreciation charges. The Company does not have any significant remaining lease obligations for facilities associated with restructuring activities. The following table presents a summary of restructuring costs related to these initiatives within the unaudited condensed consolidated statements of income: Three Months Ended March 26, 2022 March 27, 2021 (in Thousands) Restructuring Costs: RMS $ 674 $ 7 DSA 143 559 Manufacturing 107 334 Unallocated corporate 1,087 (151) Total $ 2,011 $ 749 As of March 26, 2022 and March 27, 2021, $4.2 million and $2.2 million, respectively, of severance and other personnel related costs liabilities and lease obligation liabilities were included in accrued compensation and accrued liabilities within the Company’s unaudited condensed consolidated balance sheets. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 26, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation Various lawsuits, claims and proceedings of a nature considered normal to its business are pending against the Company. While the outcome of any of these proceedings cannot be accurately predicted, the Company does not believe the ultimate resolution of any of these existing matters would have a material adverse effect on the Company’s business or financial condition. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 26, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying condensed consolidated financial statements are unaudited and have been prepared by Charles River Laboratories International, Inc. (the Company) in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The year-end condensed consolidated balance sheet data was derived from the Company’s audited consolidated financial statements, but does not include all disclosures required by U.S. GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for fiscal year 2021. The unaudited condensed consolidated financial statements, in the opinion of management, reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position and results of operations. |
Use of Estimates | The preparation of unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires that the Company make estimates and judgments that may affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, judgments, and methodologies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known. |
Newly Issued Accounting Pronouncements | In November 2021, the FASB issued ASU 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities About Government Assistance.” ASU 2021-10 requires disclosures about transactions with a government that have been accounted for by a grant or contribution accounting model to increase transparency about the types of transactions, the accounting for the transactions, and the effect on the financial statements. The ASU is an annual disclosure effective for fiscal years beginning after December 15, 2021 and will be applied on a prospective basis. The Company is currently evaluating the impact this new standard will have on the consolidated financial statements and related disclosures, but does not believe there will be a material impact. |
Consolidation | The Company’s unaudited condensed consolidated financial statements reflect its financial statements and those of its subsidiaries in which the Company holds a controlling financial interest. For consolidated entities in which the Company owns or is exposed to less than 100% of the economics, the Company records net income (loss) attributable to noncontrolling interests in its consolidated statements of income equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. Intercompany balances and transactions are eliminated in consolidation. |
Fiscal Period | The Company’s fiscal year is typically based on 52-weeks, with each quarter composed of 13 weeks ending on the last Saturday on, or closest to, March 31, June 30, September 30, and December 31. A 53rd week in the fourth quarter of the fiscal year is occasionally necessary to align with a December 31 calendar year-end, which will occur in this fiscal year 2022. |
Segment Reporting | The Company reports its results in three reportable segments: Research Models and Services (RMS), Discovery and Safety Assessment (DSA), and Manufacturing Solutions (Manufacturing). The Company’s RMS reportable segment includes the Research Models, Research Model Services, and Research and GMP-Compliant Cells businesses. Research Models includes the commercial production and sale of small research models, as well as the supply of large research models. Research Model Services includes: Genetically Engineered Models and Services (GEMS), which performs contract breeding and other services associated with genetically engineered models; Research Animal Diagnostic Services (RADS), which provides health monitoring and diagnostics services related to research models; Insourcing Solutions (IS), which provides colony management of its clients’ research operations (including recruitment, training, staffing, and management services); and Research and GMP-Compliant Cells, which supplies controlled, consistent, customized primary cells and blood components derived from normal and mobilized peripheral blood, bone marrow, and cord blood. The Company’s DSA reportable segment includes services required to take a drug through the early development process including discovery services, which are non-regulated services to assist clients with the identification, screening, and selection of a lead compound for drug development, and regulated and nonregulated (GLP and non-GLP) safety assessment services. The Company’s Manufacturing reportable segment includes Microbial Solutions, which provides in vitro (non-animal) lot-release testing products, microbial detection products, and species identification services; Biologics Solutions (Biologics), which performs specialized testing of biologics (Biologics Testing Solutions) as well as contract development and manufacturing products and services (CDMO); Avian Vaccine Services (Avian), which supplies specific-pathogen-free chicken eggs and chickens. |
ACQUISITIONS AND DIVESTITURES (
ACQUISITIONS AND DIVESTITURES (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Purchase Price Allocation | The purchase price allocation was as follows: Vigene (3) Retrogenix Cognate Distributed Bio June 28, 2021 March 30, 2021 March 29, 2021 December 31, 2020 (in thousands) Trade receivables $ 3,548 $ 2,266 $ 18,566 $ 2,722 Other current assets (excluding cash) 1,657 209 14,128 221 Property, plant and equipment 7,649 400 52,082 2,382 Operating lease right-of-use asset, net 22,507 1,385 34,349 1,586 Goodwill (1) 239,681 34,489 611,555 71,585 Definite-lived intangible assets 93,900 22,126 270,900 24,540 Other long-term assets 694 — 6,098 469 Deferred revenue (4,260) (434) (20,539) (1,319) Other current liabilities (2) (6,319) (1,141) (45,388) (1,504) Operating lease right-of-use liabilities (Long-term) (21,220) (1,205) (31,383) (1,123) Deferred tax liabilities (13,958) (4,174) (32,503) (2,529) Total purchase price allocation $ 323,879 $ 53,921 $ 877,865 $ 97,030 (1) The goodwill resulting from these transactions is primarily attributable to the potential growth of the Company’s segments from new customers introduced to the acquired businesses and the assembled workforce of the acquirees. The goodwill attributable to these entities is not deductible for tax purposes. (2) In connection with its acquisitions of businesses, the Company routinely records liabilities related to indirect state and local taxes for preacquisition periods when such liabilities are estimable and deemed probable. The Company may or may not be indemnified for such indirect tax liabilities under terms of the acquisitions. As these indirect tax contingencies are resolved, actual obligations, and any indemnifications, may differ from the recorded amounts and any differences are reflected in reported results in the period in which these are resolved. As of March 26, 2022, the Company estimates that it is reasonably possible that these recorded liabilities of $17 million may decrease over the next twelve month period as the Company seeks a favorable ruling from tax authorities on certain indirect tax positions. (3) Purchase price allocation is preliminary and subject to change as additional information becomes available concerning the fair value and tax basis of the assets acquired and liabilities assumed, including certain contracts and obligations. Any additional adjustments to the purchase price allocation will be made as soon as practicable but no later than one year from the date of acquisition. |
Schedule of Definite-Lived Intangible Assets Acquired as Part of Business Combination | The definite-lived intangible assets acquired were as follows: Vigene Retrogenix Cognate Distributed Bio Definite-Lived Intangible Assets (in thousands) Client relationships $ 87,500 $ 17,340 $ 257,200 $ 16,080 Other intangible assets 6,400 4,786 13,700 8,460 Total definite-lived intangible assets $ 93,900 $ 22,126 $ 270,900 $ 24,540 Weighted Average Amortization Life (in years) Client relationships 12 13 13 9 Other intangible assets 2 3 2 4 Total definite-lived intangible assets 11 11 13 7 |
Schedule of Pro Forma Information | Three Months Ended March 27, 2021 (in thousands) (unaudited) Revenue $ 858,800 Net income attributable to common shareholders 37,575 |
Schedule of Major Classes of Assets and Liabilities Associated with Divestitures | The carrying amounts of the major classes of assets and liabilities associated with the divestitures of the businesses were as follows: October 12, 2021 RMS Japan CDMO Sweden (in thousands) Assets Current assets $ 26,524 $ 8,187 Property, plant, and equipment, net 17,379 14,339 Operating lease right-of-use assets, net — 19,733 Goodwill 4,129 27,764 Intangible assets, net — 14,089 Other assets 3,695 — Total assets $ 51,727 $ 84,112 Liabilities Current liabilities $ 8,705 $ 6,386 Operating lease right-of-use liabilities — 18,221 Long-term liabilities 94 — Total liabilities $ 8,799 $ 24,607 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table disaggregates the Company’s revenue by major business line and timing of transfer of products or services: Three Months Ended March 26, 2022 March 27, 2021 (in thousands) Timing of Revenue Recognition: RMS Services and products transferred over time $ 69,924 $ 64,896 Services and products transferred at a point in time 106,618 112,014 Total RMS revenue 176,542 176,910 DSA Services and products transferred over time 542,336 500,468 Services and products transferred at a point in time 1,923 710 Total DSA revenue 544,259 501,178 Manufacturing Services and products transferred over time 95,009 50,568 Services and products transferred at a point in time 98,119 95,910 Total Manufacturing revenue 193,128 146,478 Total revenue $ 913,929 $ 824,566 Revenue for each significant product or service offering is as follows: Three Months Ended March 26, 2022 March 27, 2021 (in thousands) RMS $ 176,542 $ 176,910 DSA 544,259 501,178 Manufacturing 193,128 146,478 Total revenue $ 913,929 $ 824,566 Revenue by geographic area is as follows: U.S. Europe Canada Asia Pacific Other Consolidated (in thousands) Three Months Ended: March 26, 2022 $ 526,549 $ 251,087 $ 85,246 $ 48,946 $ 2,101 $ 913,929 March 27, 2021 448,482 237,535 77,107 59,446 1,996 824,566 |
Schedule of Estimated Revenue Related to Performance Obligations | The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially satisfied) as of March 26, 2022: Revenue Expected to be Recognized in Future Periods Less than 1 Year 1 to 3 Years 4 to 5 Years Beyond 5 Years Total (in thousands) DSA $ 404,549 $ 414,174 $ 36,670 $ 1,752 $ 857,145 Manufacturing 1,875 — — — 1,875 Total $ 406,424 $ 414,174 $ 36,670 $ 1,752 $ 859,020 |
Schedule of Client Receivables, Contract Assets and Contract Liabilities | The following table provides information about client receivables, contract assets, and contract liabilities from contracts with customers: March 26, 2022 December 25, 2021 (in thousands) Balances from contracts with customers: Client receivables $ 526,736 $ 489,452 Contract assets (unbilled revenue) 177,261 160,609 Contract liabilities (current and long-term deferred revenue) 251,182 240,281 Contract liabilities (customer contract deposits) 63,985 59,512 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Revenue and Other Financial Information by Business Segment | The following table presents revenue and other financial information by reportable segment: Three Months Ended March 26, 2022 March 27, 2021 (in thousands) RMS Revenue $ 176,542 $ 176,910 Operating income 47,882 44,935 Depreciation and amortization 9,469 9,679 Capital expenditures 8,646 2,983 DSA Revenue $ 544,259 $ 501,178 Operating income 104,986 90,949 Depreciation and amortization 46,789 44,608 Capital expenditures 48,930 17,040 Manufacturing Revenue $ 193,128 $ 146,478 Operating income 46,368 49,437 Depreciation and amortization 18,482 6,569 Capital expenditures 22,828 7,110 |
Reconciliation of Segment Operating Income to Consolidated Operating Income | The following tables present reconciliations of segment operating income, depreciation and amortization, and capital expenditures to the respective consolidated amounts: Operating Income Depreciation and Amortization Capital Expenditures March 26, 2022 March 27, 2021 March 26, 2022 March 27, 2021 March 26, 2022 March 27, 2021 (in thousands) Three Months Ended: Total reportable segments $ 199,236 $ 185,321 $ 74,740 $ 60,856 $ 80,404 $ 27,133 Unallocated corporate (50,458) (61,618) 559 652 60 897 Total consolidated $ 148,778 $ 123,703 $ 75,299 $ 61,508 $ 80,464 $ 28,030 |
Revenue Disaggregated by Products and Services and Geographic Area | The following table disaggregates the Company’s revenue by major business line and timing of transfer of products or services: Three Months Ended March 26, 2022 March 27, 2021 (in thousands) Timing of Revenue Recognition: RMS Services and products transferred over time $ 69,924 $ 64,896 Services and products transferred at a point in time 106,618 112,014 Total RMS revenue 176,542 176,910 DSA Services and products transferred over time 542,336 500,468 Services and products transferred at a point in time 1,923 710 Total DSA revenue 544,259 501,178 Manufacturing Services and products transferred over time 95,009 50,568 Services and products transferred at a point in time 98,119 95,910 Total Manufacturing revenue 193,128 146,478 Total revenue $ 913,929 $ 824,566 Revenue for each significant product or service offering is as follows: Three Months Ended March 26, 2022 March 27, 2021 (in thousands) RMS $ 176,542 $ 176,910 DSA 544,259 501,178 Manufacturing 193,128 146,478 Total revenue $ 913,929 $ 824,566 Revenue by geographic area is as follows: U.S. Europe Canada Asia Pacific Other Consolidated (in thousands) Three Months Ended: March 26, 2022 $ 526,549 $ 251,087 $ 85,246 $ 48,946 $ 2,101 $ 913,929 March 27, 2021 448,482 237,535 77,107 59,446 1,996 824,566 |
Summary of Unallocated Corporate Overhead | A summary of unallocated corporate expense consists of the following: Three Months Ended March 26, 2022 March 27, 2021 (in thousands) Stock-based compensation $ 8,503 $ 7,642 Compensation, benefits, and other employee-related expenses 28,636 27,362 External consulting and other service expenses 4,319 7,356 Information technology 2,474 4,095 Depreciation 559 652 Acquisition and integration 5,826 10,560 Other general unallocated corporate 141 3,951 Total unallocated corporate expense $ 50,458 $ 61,618 |
SUPPLEMENTAL BALANCE SHEET IN_2
SUPPLEMENTAL BALANCE SHEET INFORMATION (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Supplemental Balance Sheet Information [Abstract] | |
Composition of Net Trade Receivables | The composition of trade receivables and contract assets, net is as follows: March 26, 2022 December 25, 2021 (in thousands) Client receivables $ 526,736 $ 489,452 Unbilled revenue 177,261 160,609 Total 703,997 650,061 Less: Allowance for credit losses (6,154) (7,180) Trade receivables and contract assets, net $ 697,843 $ 642,881 |
Composition of Inventories | The composition of inventories is as follows: March 26, 2022 December 25, 2021 (in thousands) Raw materials and supplies $ 34,763 $ 33,118 Work in process 35,651 40,268 Finished products 150,761 125,760 Inventories $ 221,175 $ 199,146 |
Composition of Other Current Assets | The composition of other current assets is as follows: March 26, 2022 December 25, 2021 (in thousands) Prepaid income tax $ 71,272 $ 84,725 Short-term investments 1,065 1,063 Restricted cash 413 4,023 Other receivables 8,953 7,500 Other current assets $ 81,703 $ 97,311 |
Composition of Other Assets | The composition of other assets is as follows: March 26, 2022 December 25, 2021 (in thousands) Venture capital investments $ 137,689 $ 149,640 Strategic equity investments 60,576 51,712 Life insurance policies 47,262 51,048 Other long-term income tax assets 18,195 18,690 Restricted cash 1,114 1,077 Long-term pension assets 39,626 39,582 Other 52,190 41,140 Other assets $ 356,652 $ 352,889 |
Composition of Other Current Liabilities | The composition of other current liabilities is as follows: March 26, 2022 December 25, 2021 (in thousands) Current portion of operating lease right-of-use liabilities $ 37,758 $ 33,267 Accrued income taxes 29,838 26,161 Customer contract deposits 63,985 59,512 Other 12,952 18,701 Other current liabilities $ 144,533 $ 137,641 |
Composition of Other Long-Term Liabilities | The composition of other long-term liabilities is as follows: March 26, 2022 December 25, 2021 (in thousands) U.S. Transition Tax $ 43,057 $ 43,057 Long-term pension liability, accrued executive supplemental life insurance retirement plan and deferred compensation plans 107,000 104,944 Long-term deferred revenue 22,922 20,578 Other 66,036 74,280 Other long-term liabilities $ 239,015 $ 242,859 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized below: March 26, 2022 Level 1 Level 2 Level 3 Total Current assets measured at fair value: (in thousands) Cash equivalents $ — $ 2,030 $ — $ 2,030 Other assets: Life insurance policies — 40,045 — 40,045 Total assets measured at fair value $ — $ 42,075 $ — $ 42,075 Other current liabilities measured at fair value: Contingent consideration $ — $ — $ 13,515 $ 13,515 Other long-term liabilities measured at fair value: Contingent consideration — — 16,644 16,644 Total liabilities measured at fair value $ — $ — $ 30,159 $ 30,159 December 25, 2021 Level 1 Level 2 Level 3 Total Current assets measured at fair value: (in thousands) Cash equivalents $ — $ 893 $ — $ 893 Other assets: Life insurance policies — 42,918 — 42,918 Total assets measured at fair value $ — $ 43,811 $ — $ 43,811 Other current liabilities measured at fair value: Contingent consideration $ — $ — $ 11,794 $ 11,794 Other long-term liabilities measured at fair value: Contingent consideration — — 25,450 25,450 Total liabilities measured at fair value $ — $ — $ 37,244 $ 37,244 March 26, 2022 December 25, 2021 Book Value Fair Value Book Value Fair Value 4.25% Senior Notes due 2028 $ 500,000 $ 483,100 $ 500,000 $ 521,250 3.75% Senior Notes due 2029 500,000 466,250 500,000 506,700 4.0% Senior Notes due 2031 500,000 466,850 500,000 507,500 |
Rollforward of Contingent Consideration Related to Previous Acquisitions | The following table provides a rollforward of the contingent consideration related to the Company’s acquisitions. Three Months Ended March 26, 2022 March 27, 2021 (in thousands) Beginning balance $ 37,244 $ 2,328 Additions — 29,990 Payments (3,301) — Total gains or losses (realized/unrealized): Adjustment of previously recorded contingent liability (3,450) 917 Foreign currency translation (334) (72) Ending balance $ 30,159 $ 33,163 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table provides a rollforward of the Company’s goodwill: Adjustments to Goodwill December 25, 2021 Acquisition Related Foreign Exchange March 26, 2022 (in thousands) RMS $ 283,524 $ — $ (150) $ 283,374 DSA 1,472,506 — (9,505) 1,463,001 Manufacturing 955,851 (592) (5,640) 949,619 Goodwill $ 2,711,881 $ (592) $ (15,295) $ 2,695,994 |
Schedule of Intangible Assets | The following table displays intangible assets, net by major class: March 26, 2022 December 25, 2021 Gross Accumulated Amortization Net Gross Accumulated Amortization Net (in thousands) Backlog $ 12,513 $ (10,712) $ 1,801 $ 12,577 $ (9,517) $ 3,060 Technology 134,544 (98,281) 36,263 135,764 (95,454) 40,310 Trademarks and trade names 13,018 (3,893) 9,125 13,086 (3,448) 9,638 Other 35,319 (11,801) 23,518 35,231 (8,445) 26,786 Other intangible assets 195,394 (124,687) 70,707 196,658 (116,864) 79,794 Client relationships 1,471,872 (523,042) 948,830 1,475,757 (494,359) 981,398 Intangible assets $ 1,667,266 $ (647,729) $ 1,019,537 $ 1,672,415 $ (611,223) $ 1,061,192 |
DEBT AND OTHER FINANCING ARRA_2
DEBT AND OTHER FINANCING ARRANGEMENTS (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt and Finance Lease Obligations | Long-term debt, net and finance leases consists of the following: March 26, 2022 December 25, 2021 (in thousands) Revolving facility $ 1,174,169 $ 1,161,431 4.25% Senior Notes due 2028 500,000 500,000 3.75% Senior Notes due 2029 500,000 500,000 4.00% Senior Notes due 2031 500,000 500,000 Other debt 366 368 Finance leases 25,955 27,223 Total debt and finance leases 2,700,490 2,689,022 Less: Current portion of long-term debt 99 101 Current portion of finance leases 2,543 2,694 Current portion of long-term debt and finance leases 2,642 2,795 Long-term debt and finance leases 2,697,848 2,686,227 Debt discount and debt issuance costs (21,683) (22,663) Long-term debt, net and finance leases $ 2,676,165 $ 2,663,564 |
EQUITY AND NONCONTROLLING INT_2
EQUITY AND NONCONTROLLING INTERESTS (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Equity [Abstract] | |
Reconciliation of the Numerator and Denominator in the Computations of the Basic and Diluted Earnings Per Share | The following table reconciles the numerator and denominator in the computations of basic and diluted earnings per share: Three Months Ended March 26, 2022 March 27, 2021 (in thousands) Numerator: Net income $ 95,226 $ 63,935 Less: Net income attributable to noncontrolling interests 2,204 2,405 Net income attributable to common shareholders $ 93,022 $ 61,530 Denominator: Weighted-average shares outstanding - Basic 50,640 49,980 Effect of dilutive securities: Stock options, restricted stock units and performance share units 685 1,095 Weighted-average shares outstanding - Diluted 51,325 51,075 |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes to each component of accumulated other comprehensive income (loss), net of income taxes, are as follows: Foreign Currency Translation Adjustment Pension and Other Post-Retirement Benefit Plans Total (in thousands) December 25, 2021 $ (98,173) $ (66,567) $ (164,740) Other comprehensive loss before reclassifications (12,957) — (12,957) Amounts reclassified from accumulated other comprehensive income — 746 746 Net current period other comprehensive (loss) income (12,957) 746 (12,211) Income tax (benefit) expense (2,200) 182 (2,018) March 26, 2022 $ (108,930) $ (66,003) $ (174,933) |
Rollforward Redeemable Noncontrolling Interest | The following table provides a rollforward of the activity related to the Company’s redeemable noncontrolling interests: Three Months Ended March 26, 2022 March 27, 2021 (in thousands) Beginning balance $ 53,010 $ 25,499 Adjustment of noncontrolling interest to redemption value 1,161 835 Net income attributable to noncontrolling interests 1,644 1,716 Foreign currency translation 4 (15) Ending balance $ 55,819 $ 28,035 |
RESTRUCTURING AND ASSET IMPAI_2
RESTRUCTURING AND ASSET IMPAIRMENTS (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Costs | The following table presents a summary of restructuring costs related to these initiatives within the unaudited condensed consolidated statements of income: Three Months Ended March 26, 2022 March 27, 2021 (in Thousands) Restructuring Costs: RMS $ 674 $ 7 DSA 143 559 Manufacturing 107 334 Unallocated corporate 1,087 (151) Total $ 2,011 $ 749 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) | 3 Months Ended |
Mar. 26, 2022segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 3 |
ACQUISITIONS AND DIVESTITURES -
ACQUISITIONS AND DIVESTITURES - Narrative (Details) - USD ($) $ in Thousands | Apr. 05, 2022 | Oct. 12, 2021 | Jun. 28, 2021 | Mar. 30, 2021 | Mar. 29, 2021 | Mar. 03, 2021 | Dec. 31, 2020 | Mar. 26, 2022 | Mar. 27, 2021 | Dec. 26, 2020 | Dec. 25, 2021 |
Business Acquisition [Line Items] | |||||||||||
Integration related costs and transaction costs | $ 7,100 | $ 8,700 | |||||||||
Goodwill | $ 2,695,994 | $ 2,711,881 | |||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | RMS Japan | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration received from divestiture | $ 73,100 | ||||||||||
Cash proceeds from divestiture | 7,900 | ||||||||||
Pension over funding and other post-closing adjustments | 3,800 | ||||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | CDMO Sweden | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration received from divestiture | 59,600 | ||||||||||
Cash proceeds from divestiture | 200 | ||||||||||
Contingent consideration | 15,300 | ||||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | CDMO Sweden | Maximum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Contingent consideration | 25,000 | ||||||||||
Purchase obligation | $ 10,000 | ||||||||||
Explora BioLabs Holdings, Inc. | Subsequent Event | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Purchase price | $ 295,000 | ||||||||||
Vigene Biosciences, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Purchase price | $ 323,900 | ||||||||||
Cash acquired | 2,700 | ||||||||||
Contingent consideration liability | 34,500 | ||||||||||
Goodwill | 239,681 | ||||||||||
Definite-lived intangible assets | 93,900 | ||||||||||
Property, plant and equipment | 7,649 | ||||||||||
Vigene Biosciences, Inc. | Maximum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration contingent upon future performance | $ 57,500 | ||||||||||
Retrogenix Limited | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Purchase price | $ 53,900 | ||||||||||
Cash acquired | 8,500 | ||||||||||
Contingent consideration liability | 6,900 | ||||||||||
Goodwill | 34,489 | ||||||||||
Definite-lived intangible assets | 22,126 | ||||||||||
Property, plant and equipment | $ 400 | ||||||||||
Cognate BioServices, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Purchase price | $ 877,900 | ||||||||||
Cash acquired | 70,500 | ||||||||||
Value of consideration not acquired | $ 15,700 | ||||||||||
Ownership percentage not acquired | 2.00% | ||||||||||
Goodwill | $ 611,555 | ||||||||||
Definite-lived intangible assets | 270,900 | ||||||||||
Property, plant and equipment | $ 52,082 | ||||||||||
Distributed Bio, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Purchase price | $ 97,000 | ||||||||||
Cash acquired | 800 | ||||||||||
Contingent consideration liability | 14,100 | ||||||||||
Cash portion of consideration transferred | 80,800 | ||||||||||
Payments to settle promissory note | 3,000 | ||||||||||
Goodwill | 71,585 | ||||||||||
Definite-lived intangible assets | 24,540 | ||||||||||
Property, plant and equipment | 2,382 | ||||||||||
Distributed Bio, Inc. | Maximum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration contingent upon future performance | $ 21,000 | ||||||||||
Other Acquisitions | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Purchase price | $ 35,400 | ||||||||||
Contingent consideration liability | 15,900 | ||||||||||
Cash portion of consideration transferred | 19,500 | $ 5,500 | |||||||||
Goodwill | 17,300 | ||||||||||
Definite-lived intangible assets | 15,200 | ||||||||||
Property, plant and equipment | 3,000 | ||||||||||
Other Acquisitions | Maximum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Consideration contingent upon future performance | $ 17,500 | ||||||||||
Cognate BioServices, Inc. and Viegene Biosciences, Inc. | Depreciation and Amortization Expense | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Adjustments related to prior period | 9,200 | ||||||||||
Cognate BioServices, Inc. and Viegene Biosciences, Inc. | Interest Expense | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Adjustments related to prior period | $ 3,400 |
ACQUISITIONS AND DIVESTITURES_2
ACQUISITIONS AND DIVESTITURES - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 | Jun. 28, 2021 | Mar. 30, 2021 | Mar. 29, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 2,695,994 | $ 2,711,881 | ||||
Vigene | ||||||
Business Acquisition [Line Items] | ||||||
Trade receivables | $ 3,548 | |||||
Other current assets (excluding cash) | 1,657 | |||||
Property, plant and equipment | 7,649 | |||||
Operating lease right-of-use assets, net | 22,507 | |||||
Goodwill | 239,681 | |||||
Definite-lived intangible assets | 93,900 | |||||
Other long-term assets | 694 | |||||
Deferred revenue | (4,260) | |||||
Other current liabilities | (6,319) | |||||
Operating lease right-of-use liabilities (Long-term) | (21,220) | |||||
Deferred tax liabilities | (13,958) | |||||
Total purchase price allocation | $ 323,879 | |||||
Retrogenix | ||||||
Business Acquisition [Line Items] | ||||||
Trade receivables | $ 2,266 | |||||
Other current assets (excluding cash) | 209 | |||||
Property, plant and equipment | 400 | |||||
Operating lease right-of-use assets, net | 1,385 | |||||
Goodwill | 34,489 | |||||
Definite-lived intangible assets | 22,126 | |||||
Other long-term assets | 0 | |||||
Deferred revenue | (434) | |||||
Other current liabilities | (1,141) | |||||
Operating lease right-of-use liabilities (Long-term) | (1,205) | |||||
Deferred tax liabilities | (4,174) | |||||
Total purchase price allocation | $ 53,921 | |||||
Cognate | ||||||
Business Acquisition [Line Items] | ||||||
Trade receivables | $ 18,566 | |||||
Other current assets (excluding cash) | 14,128 | |||||
Property, plant and equipment | 52,082 | |||||
Operating lease right-of-use assets, net | 34,349 | |||||
Goodwill | 611,555 | |||||
Definite-lived intangible assets | 270,900 | |||||
Other long-term assets | 6,098 | |||||
Deferred revenue | (20,539) | |||||
Other current liabilities | (45,388) | |||||
Operating lease right-of-use liabilities (Long-term) | (31,383) | |||||
Deferred tax liabilities | (32,503) | |||||
Total purchase price allocation | $ 877,865 | |||||
Decrease in indirect tax contingencies that are reasonably possibly over the next twelve-month period | $ 17,000 | |||||
Distributed Bio | ||||||
Business Acquisition [Line Items] | ||||||
Trade receivables | $ 2,722 | |||||
Other current assets (excluding cash) | 221 | |||||
Property, plant and equipment | 2,382 | |||||
Operating lease right-of-use assets, net | 1,586 | |||||
Goodwill | 71,585 | |||||
Definite-lived intangible assets | 24,540 | |||||
Other long-term assets | 469 | |||||
Deferred revenue | (1,319) | |||||
Other current liabilities | (1,504) | |||||
Operating lease right-of-use liabilities (Long-term) | (1,123) | |||||
Deferred tax liabilities | (2,529) | |||||
Total purchase price allocation | $ 97,030 |
ACQUISITIONS AND DIVESTITURES_3
ACQUISITIONS AND DIVESTITURES - Definite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 28, 2021 | Mar. 30, 2021 | Mar. 29, 2021 | Dec. 31, 2020 |
Vigene | ||||
Business Acquisition [Line Items] | ||||
Definite-Lived Intangible Assets | $ 93,900 | |||
Weighted Average Amortization Life | 11 years | |||
Retrogenix | ||||
Business Acquisition [Line Items] | ||||
Definite-Lived Intangible Assets | $ 22,126 | |||
Weighted Average Amortization Life | 11 years | |||
Cognate | ||||
Business Acquisition [Line Items] | ||||
Definite-Lived Intangible Assets | $ 270,900 | |||
Weighted Average Amortization Life | 13 years | |||
Distributed Bio | ||||
Business Acquisition [Line Items] | ||||
Definite-Lived Intangible Assets | $ 24,540 | |||
Weighted Average Amortization Life | 7 years | |||
Client relationships | Vigene | ||||
Business Acquisition [Line Items] | ||||
Definite-Lived Intangible Assets | $ 87,500 | |||
Weighted Average Amortization Life | 12 years | |||
Client relationships | Retrogenix | ||||
Business Acquisition [Line Items] | ||||
Definite-Lived Intangible Assets | $ 17,340 | |||
Weighted Average Amortization Life | 13 years | |||
Client relationships | Cognate | ||||
Business Acquisition [Line Items] | ||||
Definite-Lived Intangible Assets | $ 257,200 | |||
Weighted Average Amortization Life | 13 years | |||
Client relationships | Distributed Bio | ||||
Business Acquisition [Line Items] | ||||
Definite-Lived Intangible Assets | $ 16,080 | |||
Weighted Average Amortization Life | 9 years | |||
Other intangible assets | Vigene | ||||
Business Acquisition [Line Items] | ||||
Definite-Lived Intangible Assets | $ 6,400 | |||
Weighted Average Amortization Life | 2 years | |||
Other intangible assets | Retrogenix | ||||
Business Acquisition [Line Items] | ||||
Definite-Lived Intangible Assets | $ 4,786 | |||
Weighted Average Amortization Life | 3 years | |||
Other intangible assets | Cognate | ||||
Business Acquisition [Line Items] | ||||
Definite-Lived Intangible Assets | $ 13,700 | |||
Weighted Average Amortization Life | 2 years | |||
Other intangible assets | Distributed Bio | ||||
Business Acquisition [Line Items] | ||||
Definite-Lived Intangible Assets | $ 8,460 | |||
Weighted Average Amortization Life | 4 years |
ACQUISITIONS AND DIVESTITURES_4
ACQUISITIONS AND DIVESTITURES - Pro Forma Information (Details) - Cognate BioServices, Inc. and Viegene Biosciences, Inc. $ in Thousands | 3 Months Ended |
Mar. 26, 2022USD ($) | |
Business Acquisition [Line Items] | |
Revenue | $ 858,800 |
Net income attributable to common shareholders | $ 37,575 |
ACQUISITIONS AND DIVESTITURES_5
ACQUISITIONS AND DIVESTITURES - Schedule of Divestitures (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations $ in Thousands | Oct. 12, 2021USD ($) |
RMS Japan | |
Assets | |
Current assets | $ 26,524 |
Property, plant, and equipment, net | 17,379 |
Operating lease right-of-use assets, net | 0 |
Goodwill | 4,129 |
Intangible assets, net | 0 |
Other assets | 3,695 |
Total assets | 51,727 |
Liabilities | |
Current liabilities | 8,705 |
Operating lease right-of-use liabilities | 0 |
Long-term liabilities | 94 |
Total liabilities | 8,799 |
CDMO Sweden | |
Assets | |
Current assets | 8,187 |
Property, plant, and equipment, net | 14,339 |
Operating lease right-of-use assets, net | 19,733 |
Goodwill | 27,764 |
Intangible assets, net | 14,089 |
Other assets | 0 |
Total assets | 84,112 |
Liabilities | |
Current liabilities | 6,386 |
Operating lease right-of-use liabilities | 18,221 |
Long-term liabilities | 0 |
Total liabilities | $ 24,607 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregation of Revenues by Major Business Line (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 913,929 | $ 824,566 |
RMS | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 176,542 | 176,910 |
RMS | Services and products transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 69,924 | 64,896 |
RMS | Services and products transferred at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 106,618 | 112,014 |
DSA | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 544,259 | 501,178 |
DSA | Services and products transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 542,336 | 500,468 |
DSA | Services and products transferred at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 1,923 | 710 |
Manufacturing | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 193,128 | 146,478 |
Manufacturing | Services and products transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 95,009 | 50,568 |
Manufacturing | Services and products transferred at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 98,119 | $ 95,910 |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS - Schedule of Estimated Revenue Related to Performance Obligations (Details) $ in Thousands | Mar. 26, 2022USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 859,020 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-03-27 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 406,424 |
Performance obligations expected to be satisfied, expected timing | 9 months 18 days |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 414,174 |
Performance obligations expected to be satisfied, expected timing | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 36,670 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 1,752 |
Performance obligations expected to be satisfied, expected timing | 1 year |
DSA | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 857,145 |
DSA | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-03-27 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 404,549 |
DSA | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 414,174 |
DSA | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 36,670 |
DSA | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 1,752 |
Manufacturing | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 1,875 |
Manufacturing | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-03-27 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 1,875 |
Manufacturing | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 0 |
Manufacturing | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 0 |
Manufacturing | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 0 |
REVENUE FROM CONTRACTS WITH C_5
REVENUE FROM CONTRACTS WITH CUSTOMERS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 26, 2022 | Mar. 27, 2021 | Dec. 25, 2021 | |
Revenue from Contract with Customer [Abstract] | |||
Payment terms | 30 days | ||
Unpaid advanced client billings | $ 44,000 | $ 36,000 | |
Contract liabilities (customer contract deposits) | $ 63,985 | $ 59,512 | |
Percentage of unbilled revenue billed during period | 60.00% | 60.00% | |
Amount of unbilled revenue billed during period | $ 161,000 | $ 135,000 | |
Percentage of contract liabilities recognized as revenue during period | 65.00% | 60.00% | |
Amount of contract liabilities recognized as revenue | $ 240,000 | $ 227,000 | |
Lease revenue | $ 7,900 |
REVENUE FROM CONTRACTS WITH C_6
REVENUE FROM CONTRACTS WITH CUSTOMERS - Schedule of Client Receivables, Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Client receivables | $ 526,736 | $ 489,452 |
Contract assets (unbilled revenue) | 177,261 | 160,609 |
Contract liabilities (current and long-term deferred revenue) | 251,182 | 240,281 |
Contract liabilities (customer contract deposits) | $ 63,985 | $ 59,512 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 3 Months Ended |
Mar. 26, 2022segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
SEGMENT INFORMATION - Revenue a
SEGMENT INFORMATION - Revenue and Other Financial Information by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 913,929 | $ 824,566 |
Operating income | 148,778 | 123,703 |
Depreciation and amortization | 75,299 | 61,508 |
Capital expenditures | 80,464 | 28,030 |
RMS | ||
Segment Reporting Information [Line Items] | ||
Revenue | 176,542 | 176,910 |
Operating income | 47,882 | 44,935 |
Depreciation and amortization | 9,469 | 9,679 |
Capital expenditures | 8,646 | 2,983 |
DSA | ||
Segment Reporting Information [Line Items] | ||
Revenue | 544,259 | 501,178 |
Operating income | 104,986 | 90,949 |
Depreciation and amortization | 46,789 | 44,608 |
Capital expenditures | 48,930 | 17,040 |
Manufacturing | ||
Segment Reporting Information [Line Items] | ||
Revenue | 193,128 | 146,478 |
Operating income | 46,368 | 49,437 |
Depreciation and amortization | 18,482 | 6,569 |
Capital expenditures | $ 22,828 | $ 7,110 |
SEGMENT INFORMATION - Reconcili
SEGMENT INFORMATION - Reconciliation of Segment Operating Income, Depreciation and Amortization, and Capital Expenditures (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Segment Reporting Information [Line Items] | ||
Operating income | $ 148,778 | $ 123,703 |
Depreciation and amortization | 75,299 | 61,508 |
Capital expenditures | 80,464 | 28,030 |
Total reportable segments | ||
Segment Reporting Information [Line Items] | ||
Operating income | 199,236 | 185,321 |
Depreciation and amortization | 74,740 | 60,856 |
Capital expenditures | 80,404 | 27,133 |
Unallocated corporate | ||
Segment Reporting Information [Line Items] | ||
Operating income | (50,458) | (61,618) |
Depreciation and amortization | 559 | 652 |
Capital expenditures | $ 60 | $ 897 |
SEGMENT INFORMATION - Revenue P
SEGMENT INFORMATION - Revenue Per Significant Product or Service (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Segment Reporting Information [Line Items] | ||
Total revenue | $ 913,929 | $ 824,566 |
RMS | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 176,542 | 176,910 |
DSA | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 544,259 | 501,178 |
Manufacturing | ||
Segment Reporting Information [Line Items] | ||
Total revenue | $ 193,128 | $ 146,478 |
SEGMENT INFORMATION - Summary o
SEGMENT INFORMATION - Summary of Unallocated Corporate Overhead (Details) - Unallocated corporate - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Segment Reporting Information [Line Items] | ||
Stock-based compensation | $ 8,503 | $ 7,642 |
Compensation, benefits, and other employee-related expenses | 28,636 | 27,362 |
External consulting and other service expenses | 4,319 | 7,356 |
Information technology | 2,474 | 4,095 |
Depreciation | 559 | 652 |
Acquisition and integration | 5,826 | 10,560 |
Other general unallocated corporate | 141 | 3,951 |
Total unallocated corporate expense | $ 50,458 | $ 61,618 |
SEGMENT INFORMATION - Disaggreg
SEGMENT INFORMATION - Disaggregation of Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | $ 913,929 | $ 824,566 |
U.S. | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | 526,549 | 448,482 |
Europe | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | 251,087 | 237,535 |
Canada | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | 85,246 | 77,107 |
Asia Pacific | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | 48,946 | 59,446 |
Other | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | $ 2,101 | $ 1,996 |
SUPPLEMENTAL BALANCE SHEET IN_3
SUPPLEMENTAL BALANCE SHEET INFORMATION (Details) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Composition of trade receivables | ||
Client receivables | $ 526,736 | $ 489,452 |
Unbilled revenue | 177,261 | 160,609 |
Total | 703,997 | 650,061 |
Less: Allowance for credit losses | (6,154) | (7,180) |
Trade receivables and contract assets, net | 697,843 | 642,881 |
Composition of inventories | ||
Raw materials and supplies | 34,763 | 33,118 |
Work in process | 35,651 | 40,268 |
Finished products | 150,761 | 125,760 |
Inventories | 221,175 | 199,146 |
Composition of other current assets | ||
Prepaid income tax | 71,272 | 84,725 |
Short-term investments | 1,065 | 1,063 |
Restricted cash | 413 | 4,023 |
Other receivables | 8,953 | 7,500 |
Other current assets | 81,703 | 97,311 |
Composition of other assets | ||
Venture capital investments | 137,689 | 149,640 |
Strategic equity investments | 60,576 | 51,712 |
Life insurance policies | 47,262 | 51,048 |
Other long-term income tax assets | 18,195 | 18,690 |
Restricted cash | 1,114 | 1,077 |
Long-term pension assets | 39,626 | 39,582 |
Other | 52,190 | 41,140 |
Other assets | 356,652 | 352,889 |
Composition of other current liabilities | ||
Current portion of operating lease right-of-use liabilities | 37,758 | 33,267 |
Accrued income taxes | 29,838 | 26,161 |
Customer contract deposits | 63,985 | 59,512 |
Other | 12,952 | 18,701 |
Other current liabilities | 144,533 | 137,641 |
Composition of other long-term liabilities | ||
U.S. Transition Tax | 43,057 | 43,057 |
Long-term pension liability, accrued executive supplemental life insurance retirement plan and deferred compensation plans | 107,000 | 104,944 |
Long-term deferred revenue | 22,922 | 20,578 |
Other | 66,036 | 74,280 |
Other long-term liabilities | $ 239,015 | $ 242,859 |
VENTURE CAPITAL AND STRATEGIC_2
VENTURE CAPITAL AND STRATEGIC EQUITY INVESTMENTS - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Apr. 30, 2022 | Mar. 26, 2022 | Mar. 27, 2021 | Dec. 25, 2021 | |
Schedule of Equity Method Investments [Line Items] | ||||
Venture capital investments | $ 137,689 | $ 149,640 | ||
Committed contribution | 173,900 | |||
Amount funded for venture capital investments | 116,600 | |||
Distributions received | 1,300 | $ 9,300 | ||
Losses recognized related to venture capital investments | 13,400 | $ 16,400 | ||
Strategic equity investments | 60,576 | $ 51,712 | ||
Payments to acquire strategic investments | 10,000 | |||
Commitment to purchase additional interest in existing strategic investments | $ 25,000 | |||
DSA Supplier | Subsequent Event | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage | 49.00% | |||
Payments to acquire interest in investee | $ 90,000 | |||
Contingent payments | $ 5,000 |
FAIR VALUE - Fair Value of Asse
FAIR VALUE - Fair Value of Assets and Liabilities (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Current assets measured at fair value: | ||
Cash equivalents | $ 2,030 | $ 893 |
Other assets: | ||
Life insurance policies | 40,045 | 42,918 |
Total assets measured at fair value | 42,075 | 43,811 |
Other current liabilities measured at fair value: | ||
Contingent consideration | 13,515 | 11,794 |
Other long-term liabilities measured at fair value: | ||
Contingent consideration | 16,644 | 25,450 |
Total liabilities measured at fair value | 30,159 | 37,244 |
Level 1 | ||
Current assets measured at fair value: | ||
Cash equivalents | 0 | 0 |
Other assets: | ||
Life insurance policies | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Other current liabilities measured at fair value: | ||
Contingent consideration | 0 | 0 |
Other long-term liabilities measured at fair value: | ||
Contingent consideration | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Level 2 | ||
Current assets measured at fair value: | ||
Cash equivalents | 2,030 | 893 |
Other assets: | ||
Life insurance policies | 40,045 | 42,918 |
Total assets measured at fair value | 42,075 | 43,811 |
Other current liabilities measured at fair value: | ||
Contingent consideration | 0 | 0 |
Other long-term liabilities measured at fair value: | ||
Contingent consideration | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Level 3 | ||
Current assets measured at fair value: | ||
Cash equivalents | 0 | 0 |
Other assets: | ||
Life insurance policies | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Other current liabilities measured at fair value: | ||
Contingent consideration | 13,515 | 11,794 |
Other long-term liabilities measured at fair value: | ||
Contingent consideration | 16,644 | 25,450 |
Total liabilities measured at fair value | $ 30,159 | $ 37,244 |
FAIR VALUE - Contingent Conside
FAIR VALUE - Contingent Consideration (Details) - Contingent Consideration - Level 3 - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 37,244 | $ 2,328 |
Additions | 0 | 29,990 |
Payments | (3,301) | 0 |
Adjustment of previously recorded contingent liability | (3,450) | 917 |
Foreign currency translation | (334) | (72) |
Ending balance | $ 30,159 | $ 33,163 |
FAIR VALUE - Narrative (Details
FAIR VALUE - Narrative (Details) - Level 3 - Contingent Consideration - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 | Mar. 27, 2021 | Dec. 26, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of contingent consideration | $ 30,159 | $ 37,244 | $ 33,163 | $ 2,328 |
Weighted average probability percentage of achieving maximum target | 42.00% | |||
Average Volatility | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent consideration, measurement input | 0.47 | |||
Weighted Average Cost of Capital | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent consideration, measurement input | 0.16 | |||
Maximum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of contingent consideration | $ 73,000 |
FAIR VALUE - Schedule of Fair V
FAIR VALUE - Schedule of Fair Value of Debt (Details) - Senior Notes - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
4.25% Senior Notes due 2028 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 4.25% | 4.25% |
4.25% Senior Notes due 2028 | Book Value | ||
Debt Instrument [Line Items] | ||
Debt instrument value | $ 500,000 | $ 500,000 |
4.25% Senior Notes due 2028 | Fair Value | ||
Debt Instrument [Line Items] | ||
Debt instrument value | $ 483,100 | $ 521,250 |
3.75% Senior Notes due 2029 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 3.75% | 3.75% |
3.75% Senior Notes due 2029 | Book Value | ||
Debt Instrument [Line Items] | ||
Debt instrument value | $ 500,000 | $ 500,000 |
3.75% Senior Notes due 2029 | Fair Value | ||
Debt Instrument [Line Items] | ||
Debt instrument value | $ 466,250 | $ 506,700 |
4.00% Senior Notes due 2031 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 4.00% | 4.00% |
4.00% Senior Notes due 2031 | Book Value | ||
Debt Instrument [Line Items] | ||
Debt instrument value | $ 500,000 | $ 500,000 |
4.00% Senior Notes due 2031 | Fair Value | ||
Debt Instrument [Line Items] | ||
Debt instrument value | $ 466,850 | $ 507,500 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Rollforward of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 26, 2022USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 2,711,881 |
Acquisition Related | (592) |
Foreign Exchange | (15,295) |
Ending balance | 2,695,994 |
RMS | |
Goodwill [Roll Forward] | |
Beginning balance | 283,524 |
Acquisition Related | 0 |
Foreign Exchange | (150) |
Ending balance | 283,374 |
DSA | |
Goodwill [Roll Forward] | |
Beginning balance | 1,472,506 |
Acquisition Related | 0 |
Foreign Exchange | (9,505) |
Ending balance | 1,463,001 |
Manufacturing | |
Goodwill [Roll Forward] | |
Beginning balance | 955,851 |
Acquisition Related | (592) |
Foreign Exchange | (5,640) |
Ending balance | $ 949,619 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Other intangible assets | ||
Gross | $ 1,667,266 | $ 1,672,415 |
Accumulated Amortization | (647,729) | (611,223) |
Net | 1,019,537 | 1,061,192 |
Backlog | ||
Other intangible assets | ||
Gross | 12,513 | 12,577 |
Accumulated Amortization | (10,712) | (9,517) |
Net | 1,801 | 3,060 |
Technology | ||
Other intangible assets | ||
Gross | 134,544 | 135,764 |
Accumulated Amortization | (98,281) | (95,454) |
Net | 36,263 | 40,310 |
Trademarks and trade names | ||
Other intangible assets | ||
Gross | 13,018 | 13,086 |
Accumulated Amortization | (3,893) | (3,448) |
Net | 9,125 | 9,638 |
Other | ||
Other intangible assets | ||
Gross | 35,319 | 35,231 |
Accumulated Amortization | (11,801) | (8,445) |
Net | 23,518 | 26,786 |
Other intangible assets | ||
Other intangible assets | ||
Gross | 195,394 | 196,658 |
Accumulated Amortization | (124,687) | (116,864) |
Net | 70,707 | 79,794 |
Client relationships | ||
Other intangible assets | ||
Gross | 1,471,872 | 1,475,757 |
Accumulated Amortization | (523,042) | (494,359) |
Net | $ 948,830 | $ 981,398 |
DEBT AND OTHER FINANCING ARRA_3
DEBT AND OTHER FINANCING ARRANGEMENTS - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 |
Debt Instrument [Line Items] | ||
Finance leases | $ 25,955 | $ 27,223 |
Total debt and finance leases | 2,700,490 | 2,689,022 |
Current portion of long-term debt | 99 | 101 |
Current portion of finance leases | 2,543 | 2,694 |
Current portion of long-term debt and finance leases | 2,642 | 2,795 |
Long-term debt and finance leases | 2,697,848 | 2,686,227 |
Debt discount and debt issuance costs | (21,683) | (22,663) |
Long-term debt, net and finance leases | 2,676,165 | 2,663,564 |
Revolving Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 1,174,169 | $ 1,161,431 |
Senior Notes | 4.25% Senior Notes due 2028 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 4.25% | 4.25% |
Long-term debt, gross | $ 500,000 | $ 500,000 |
Senior Notes | 3.75% Senior Notes due 2029 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 3.75% | 3.75% |
Long-term debt, gross | $ 500,000 | $ 500,000 |
Senior Notes | 4.00% Senior Notes due 2031 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 4.00% | 4.00% |
Long-term debt, gross | $ 500,000 | $ 500,000 |
Other Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 366 | $ 368 |
DEBT AND OTHER FINANCING ARRA_4
DEBT AND OTHER FINANCING ARRANGEMENTS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 26, 2022 | Mar. 27, 2021 | Dec. 25, 2021 | |
Debt Instrument [Line Items] | |||
Weighted average interest rate | 2.87% | 2.78% | |
Loss on debt extinguishment and other financing costs | $ 1,028 | $ 26,907 | |
Deferred financing costs expensed | 0 | 28,680 | |
Foreign Exchange Forward | |||
Debt Instrument [Line Items] | |||
Notional amount | 400,000 | 400,000 | |
Foreign Exchange Forward | Other (Expense) Income, Net | |||
Debt Instrument [Line Items] | |||
Foreign currency losses recognized | 11,100 | 13,400 | |
Foreign Exchange Forward | Interest Expense | |||
Debt Instrument [Line Items] | |||
Gains recognized in interest expense | 11,800 | 14,000 | |
Senior Notes Due 2026 | Senior Notes | |||
Debt Instrument [Line Items] | |||
Prepayments of long-term debt | 500,000 | ||
Loss on debt extinguishment and other financing costs | 21,000 | ||
Payments for accrued interest | 13,000 | ||
Deferred financing costs expensed | $ 5,000 | ||
Letter of Credit | |||
Debt Instrument [Line Items] | |||
Letters of credit outstanding | $ 17,700 | $ 17,700 |
EQUITY AND NONCONTROLLING INT_3
EQUITY AND NONCONTROLLING INTERESTS - Earnings Per Share (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Numerator: | ||
Net income | $ 95,226 | $ 63,935 |
Less: Net income attributable to noncontrolling interests | 2,204 | 2,405 |
Net income attributable to common shareholders | $ 93,022 | $ 61,530 |
Denominator: | ||
Weighted-average shares outstanding—Basic (in shares) | 50,640 | 49,980 |
Effect of dilutive securities: | ||
Stock options, restricted stock units and performance share units (in shares) | 685 | 1,095 |
Weighted-average shares outstanding—Diluted (in shares) | 51,325 | 51,075 |
EQUITY AND NONCONTROLLING INT_4
EQUITY AND NONCONTROLLING INTERESTS - Narrative (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | |||
Mar. 26, 2022 | Mar. 27, 2021 | Dec. 25, 2021 | Dec. 26, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares acquired to satisfy minimum individual statutory tax withholdings for vesting of equity instruments (in shares) | 0.1 | 0.1 | ||
Shares acquired to satisfy minimum individual statutory tax withholdings for vesting of equity instruments | $ 34,000 | $ 36,000 | ||
Redeemable noncontrolling interests | 55,819 | $ 28,035 | $ 53,010 | $ 25,499 |
Vital River | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Contractually defined redemption value | 24,300 | |||
Supplier | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Redeemable noncontrolling interests | $ 31,500 | |||
Vital River | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Equity interest | 92.00% | |||
Noncontrolling interest ownership percentage | 8.00% | |||
Supplier | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Equity interest | 80.00% | |||
Noncontrolling interest ownership percentage | 20.00% | |||
Authorized Share Repurchase Program | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares repurchased during period (in shares) | 0 | 0 | ||
Remaining authorized repurchase amount | $ 129,100 | |||
Employee Stock Option | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 0.2 | 0.1 | ||
Restricted Stock and Restricted Stock Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 0.4 | 0.6 |
EQUITY AND NONCONTROLLING INT_5
EQUITY AND NONCONTROLLING INTERESTS - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Accumulated Other Comprehensive Income (Loss), before Tax [Roll Forward] | ||
Beginning balance | $ 2,538,982 | $ 2,118,169 |
Other comprehensive loss before reclassifications | (12,957) | |
Amounts reclassified from accumulated other comprehensive income | 746 | |
Net current period other comprehensive (loss) income | (12,211) | |
Income tax (benefit) expense | (2,018) | (1,025) |
Ending balance | 2,614,906 | 2,188,184 |
Foreign Currency Translation Adjustment and Other | ||
Accumulated Other Comprehensive Income (Loss), before Tax [Roll Forward] | ||
Beginning balance | (98,173) | |
Other comprehensive loss before reclassifications | (12,957) | |
Amounts reclassified from accumulated other comprehensive income | 0 | |
Net current period other comprehensive (loss) income | (12,957) | |
Income tax (benefit) expense | (2,200) | |
Ending balance | (108,930) | |
Pension and Other Post-Retirement Benefit Plans | ||
Accumulated Other Comprehensive Income (Loss), before Tax [Roll Forward] | ||
Beginning balance | (66,567) | |
Other comprehensive loss before reclassifications | 0 | |
Amounts reclassified from accumulated other comprehensive income | 746 | |
Net current period other comprehensive (loss) income | 746 | |
Income tax (benefit) expense | 182 | |
Ending balance | (66,003) | |
Total | ||
Accumulated Other Comprehensive Income (Loss), before Tax [Roll Forward] | ||
Beginning balance | (164,740) | (138,874) |
Ending balance | $ (174,933) | $ (127,017) |
EQUITY AND NONCONTROLLING INT_6
EQUITY AND NONCONTROLLING INTERESTS - Rollforward of Redeemable Noncontrolling Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Beginning balance | $ 53,010 | $ 25,499 |
Adjustment of noncontrolling interest to redemption value | 1,161 | 835 |
Net income attributable to noncontrolling interests | 1,644 | 1,716 |
Foreign currency translation | 4 | (15) |
Ending balance | $ 55,819 | $ 28,035 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 14.10% | 3.60% |
Increase in unrecognized tax benefits | $ 1.6 | |
Unrecognized tax benefits | 34.2 | |
Increase in unrecognized tax benefits that would impact effective tax rate | 1.1 | |
Unrecognized tax benefits that would impact effective tax rate | 31.1 | |
Accrued interest on unrecognized tax benefits | 1.7 | |
Decrease in unrecognized tax benefits that are reasonably possibly over the next twelve-month period | $ 11.3 |
RESTRUCTURING AND ASSET IMPAI_3
RESTRUCTURING AND ASSET IMPAIRMENTS - Restructuring Costs by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Segment Reporting Information [Line Items] | ||
Total | $ 2,011 | $ 749 |
Unallocated corporate | ||
Segment Reporting Information [Line Items] | ||
Total | 1,087 | (151) |
RMS | ||
Segment Reporting Information [Line Items] | ||
Total | 674 | 7 |
DSA | ||
Segment Reporting Information [Line Items] | ||
Total | 143 | 559 |
Manufacturing | ||
Segment Reporting Information [Line Items] | ||
Total | $ 107 | $ 334 |
RESTRUCTURING AND ASSET IMPAI_4
RESTRUCTURING AND ASSET IMPAIRMENTS - Narrative (Details) - USD ($) $ in Millions | Mar. 26, 2022 | Mar. 27, 2021 |
Restructuring and Related Activities [Abstract] | ||
Severance and other personnel related costs liability and lease obligation liabilities | $ 4.2 | $ 2.2 |