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Item 8. Financial Statements and Supplementary Data

2024-02-29 compared with 2023-02-23 · 400 added, 412 removed, 952 unchanged (46% of the section changed)

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Consolidated Balance Sheets

Consolidated Statements of Income

Consolidated Statements of (Loss) Income

Consolidated Statements of Comprehensive Income

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of QuidelOrtho Corporation (the Company) as of January 1, 2023 and January 2, 2022, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended January 1, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at January 1, 2023 and January 2, 2022, and the results of its operations and its cash flows for each of the three years in the period ended January 1, 2023, in conformity with US generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of January 1, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 23, 2023 expressed an unqualified opinion thereon.

We have audited the accompanying consolidated balance sheets of QuidelOrtho Corporation (the Company) as of December 31, 2023 and January 1, 2023, the related consolidated statements of (loss) income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and January 1, 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 29, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Reserve for contractual rebates

Description of the Matter As described in Note 1 and Note 7 to the consolidated financial statements, the Company records revenues from product sales net of contractual rebates that are estimated at the time of sale.

As of January 1, 2023, the Company recognized an allowance on accounts receivable of $40.0 million in rebates which are dependent on estimated rebate percentages that vary based on end-user sales mix.

As of December 31, 2023, the Company recognized an allowance on accounts receivable of $ 31.3 million in rebates which are dependent on estimated rebate percentages that vary based on end-user sales mix.

Auditing the Company’s allowance for contractual rebates is especially challenging because the calculation involves estimating adjustments to revenue based upon a high volume of data including inputs from third-party sources, such as distributor inventory levels and historical distributor sales to end users.

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We also tested the underlying data used in management’s calculations for accuracy and completeness, which included inspection of source data supporting the inventory levels and agreement of contractual rebate amounts to underlying customer contracts.

Valuation of intangible assets acquired in connection with the acquisition of Ortho

Description of the Matter As described in Note 2 to the consolidated financial statements, on May 27, 2022, Quidel and Ortho consummated the Combinations, with Quidel considered the accounting and legal acquirer for total purchase consideration of approximately $4.3 billion.

The transaction was accounted for as a business combination.

The Company measured the assets acquired and liabilities assumed at fair value, which resulted in the recognition of approximately $3.2 billion of intangible assets, comprised of customer relationships, developed technology, and trademarks.

Auditing the Company’s accounting for its acquisition of Ortho was complex due to the significant estimation uncertainty in determining the fair value of the identified intangible assets.

A significant emphasis is placed on the appropriateness of key estimates used by management to determine the fair value of the acquired intangible assets due to sensitivity of the resulting fair values to these underlying assumptions.

The Company used an income approach to measure the intangible assets.

The significant assumptions used to estimate the value of the intangible assets included discount rates and certain assumptions that form the basis of the forecasted results, including revenue growth rates and customer attrition.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of key controls over the Company's process for determining the fair value of intangible assets acquired.

This included controls over management’s development of the above-described assumptions used in the valuation models applied.

To test the estimated fair value of the intangible assets, we performed audit procedures that included, among others, evaluating the Company’s use of the income approach and testing the significant assumptions used in the valuation model, as described above.

We evaluated the completeness and accuracy of underlying data used in supporting the assumptions and estimates.

We evaluated the reasonableness of projected revenue growth used within the valuations against industry trends and other market information.

In addition, we involved valuation specialists to assist in assessing the significant assumptions and methodologies used by the Company.

/s/ Ernst & Young LLP

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(In millions, except par value)

January 1, 2023 January 2, 2022

December 31, 2023 January 1, 2023

Current assets:

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5.0 shares authorized;

none issued or outstanding at January 1, 2023 and January 2, 2022

none issued or outstanding at December 31, 2023 and January 1, 2023

Common stock, $ 0.001 par value per share;

126.2 and 97.5 shares authorized;

66.4 and 41.7 shares issued and outstanding at January 1, 2023 and January 2, 2022, respectively

126.2 shares authorized;

66.7 and 66.4 shares issued and outstanding at December 31, 2023 and January 1, 2023, respectively

Additional paid-in capital 2,848.0 2,804.3

Accumulated other comprehensive (loss) income ( 67.6 ) 0.4

Accumulated other comprehensive loss ( 30.0 ) ( 67.6 )

Retained earnings 2,187.8 2,197.9

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QUIDELORTHO CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

CONSOLIDATED STATEMENTS OF (LOSS) INCOME

(In millions, except per share data)

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Other expense (income), net 20.6 8.1 ( 0.1 )

Income before provision for income taxes 735.9 900.3 1,040.3

Provision for income taxes 187.2 196.1 230.0

Net income $ 548.7 $ 704.2 $ 810.3

Basic earnings per share $ 9.66 $ 16.74 $ 19.24

Diluted earnings per share $ 9.56 $ 16.43 $ 18.60

(Loss) income before income taxes ( 29.1 ) 735.9 900.3

(Benefit from) provision for income taxes ( 19.0 ) 187.2 196.1

Net (loss) income $ ( 10.1 ) $ 548.7 $ 704.2

Basic (loss) earnings per share $ ( 0.15 ) $ 9.66 $ 16.74

Diluted (loss) earnings per share $ ( 0.15 ) $ 9.56 $ 16.43

Weighted-average shares outstanding - basic 66.8 56.8 42.1

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2023 2022 2021

Net income $ 548.7 $ 704.2 $ 810.3

Net (loss) income $ ( 10.1 ) $ 548.7 $ 704.2

Other comprehensive income (loss)

Changes in cumulative translation adjustment, net of tax 50.4 ( 69.8 ) ( 1.6 )

Changes in unrealized losses from investments, net of tax ( 0.4 ) ( 0.1 ) —

Changes in unrealized gains (losses) from investments, net of tax 0.5 ( 0.4 ) ( 0.1 )

Changes from pension and other post-employment benefits, net of tax ( 2.0 ) 0.7 —

Changes in unrealized gains (losses) from cash flow hedges, net of tax:

Net unrealized gains (losses) on derivative instruments 6.7 0.1 ( 3.0 )

Net unrealized gains on derivative instruments 12.6 6.7 0.1

Reclassification of net realized (gains) losses on derivative instruments included in net income ( 23.9 ) ( 5.2 ) 2.4

Total change in unrealized gains (losses) from cash flow hedges, net of tax 1.5 2.5 ( 2.5 )

Total change in unrealized (losses) gains from cash flow hedges, net of tax ( 11.3 ) 1.5 2.5

Comprehensive income $ 27.5 $ 480.7 $ 705.0

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(In millions)

Shares Par Additional

Common Stock Additional

capital Accumulated

comprehensive (loss) income Retained

earnings Total

comprehensive

(loss) income Retained earnings Total

stockholders’

Balance at December 29, 2019 41.9 $ — $ 425.6 $ ( 0.4 ) $ 134.7 $ 559.9

Issuance of common stock under equity compensation plans 0.5 — 10.4 — — 10.4

Stock-based compensation expense — — 19.0 — — 19.0

Issuance of shares in exchange for Convertible Notes 0.2 — 7.2 — — 7.2

Tax impact from the conversion of Convertible Notes — — 0.1 — — 0.1

Derivative liabilities - Convertible Notes elected to settle in cash — — ( 26.2 ) — — ( 26.2 )

Tax withholdings related to vesting of stock-based awards — ( 4.3 ) ( 4.3 )

Repurchases of common stock ( 0.3 ) — ( 43.7 ) — — ( 43.7 )

Net income — — — — 810.3 810.3

Balance at January 3, 2021 42.3 $ — $ 388.1 $ ( 0.4 ) $ 945.0 $ 1,332.7

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Balance at January 1, 2023 66.4 $ — $ 2,804.3 $ ( 67.6 ) $ 2,197.9 $ 4,934.6

Issuance of common stock under equity compensation plans 0.6 0.1 13.5 — — 13.6

Stock-based compensation expense — — 50.9 — — 50.9

Tax withholdings related to vesting of stock-based awards ( 0.2 ) — ( 13.5 ) — — ( 13.5 )

Repurchases of common stock ( 0.1 ) — ( 7.2 ) — — ( 7.2 )

Other comprehensive income, net of tax — — — 37.6 — 37.6

Net loss — — — — ( 10.1 ) ( 10.1 )

Balance at December 31, 2023 66.7 $ 0.1 $ 2,848.0 $ ( 30.0 ) $ 2,187.8 $ 5,005.9

See accompanying notes.

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OPERATING ACTIVITIES:

Net income $ 548.7 $ 704.2 $ 810.3

Adjustments to reconcile net income to net cash provided by operating activities:

Net (loss) income $ ( 10.1 ) $ 548.7 $ 704.2

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation and amortization 457.2 283.6 52.7

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Proceeds from sale of marketable securities 78.3 53.4 3.8

Other payments ( 10.0 ) — —

Net cash used for investing activities ( 187.6 ) ( 1,644.2 ) ( 319.5 )

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Proceeds from issuance of common stock 11.6 26.4 7.6

Short-term borrowings, net 1.6 — —

Proceeds from long-term borrowings, net of debt issuance costs — 2,734.5 —

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Principal payments of deferred consideration ( 30.3 ) ( 33.5 ) ( 35.1 )

Payment on Convertible Senior Note and Derivative Liability — — ( 43.4 )

Net cash provided by (used for) financing activities 252.0 ( 173.1 ) ( 130.3 )

Net cash (used for) provided by financing activities ( 265.8 ) 252.0 ( 173.1 )

Effect of exchange rates on cash ( 1.2 ) ( 2.0 ) ( 0.4 )

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Purchase of property, equipment and intangibles by incurring current liabilities $ 40.6 $ 40.4 $ 10.5

Capital expenditures to be reimbursed under a government contract $ — $ — $ 15.9

Transfer of instrument inventories to fixed assets $ 154.6 $ 73.7 $ —

Reduction of other current liabilities upon issuance of restricted share units $ 1.9 $ 4.6 $ 2.0

Extinguishment of Convertible Notes through issuance of stock $ — $ — $ 7.2

See accompanying notes.

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Organization and Business

On May 27, 2022, pursuant to the BCA, Quidel and Ortho consummated the Combinations and each of Quidel and Ortho became a wholly owned subsidiary of QuidelOrtho.

As a result of the Combinations, QuidelOrtho became the successor issuer to Quidel.

The results of operations of Ortho have been included in the Company’s Consolidated Financial Statements from the date of acquisition.

See Note 2 for further information regarding the Combinations.

The Company’s mission is to develop and manufacture intelligent diagnostic solutions that transform the power of diagnostics into a healthier future for everyone.

The Company’s expertise in immunoassay and molecular testing, clinical chemistry and transfusion medicine helps clinicians and patients make better informed decisions across the globe.

The Company’s vision is to advance diagnostics to power a healthier future.

With its expertise in immunoassay and molecular testing, clinical chemistry and transfusion medicine, the Company aims to provide clarity to clinicians and patients to help create better health outcomes.

The Company’s global infrastructure and commercial reach support its customers across more than 130 countries and territories with quality diagnostics, a broad test portfolio and market-leading service.

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and with sales centers, administrative offices and warehouses located throughout the world.

On May 27, 2022, pursuant to the BCA, Quidel and Ortho consummated the Combinations and each of Quidel and Ortho became a wholly owned subsidiary of QuidelOrtho.

As a result of the Combinations, QuidelOrtho became the successor issuer to Quidel.

The results of operations of Ortho have been included in the Company’s Consolidated Financial Statements from the date of acquisition.

See “—Note 2.

Business Combination” for further information regarding the Combinations.

Basis of Presentation

The accompanying Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in the U.S.

The accompanying Consolidated Financial Statements of the Company have been prepared in accordance with GAAP.

Accounting Periods

The Company follows the concept of a fiscal year that ends on the Sunday nearest to the end of the month of December, and fiscal quarters that end on the Sunday nearest to the end of the months of March, June, and September.

For fiscal years 2022, 2021 and 2020, the Company’s fiscal years ended on January 1, 2023, January 2, 2022 and January 3, 2021, respectively.

Fiscal years 2022 and 2021 were 52 weeks and fiscal year 2020 was 53 weeks.

For fiscal years 2023, 2022 and 2021, the Company’s fiscal years ended on December 31, 2023, January 1, 2023 and January 2, 2022, respectively.

Fiscal years 2023, 2022 and 2021 were 52 weeks.

Use of Estimates

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The estimates and underlying assumptions can impact all elements of the financial statements, including, but not limited to, accounting for deductions from revenues (e.g.

rebates, sales allowances, and discounts), receivable and inventory valuations, fixed asset valuations, useful lives, impairment of goodwill and tangible and intangible assets, the fair value of assets acquired and liabilities assumed in a business combination and related purchase price allocation, long-term employee benefit obligations, income taxes, environmental matters, litigation and allocations of costs.

rebates, returns, sales allowances, and discounts), receivable and inventory valuations, fixed asset valuations, useful lives, impairment of goodwill and tangible and intangible assets, the fair value of assets acquired and liabilities assumed in a business combination and related purchase price allocation, long-term employee benefit obligations, income taxes, environmental matters, litigation and allocations of costs.

Estimates are based on historical experience, complex judgments, facts and circumstances available at the time and various other assumptions that are believed to be reasonable under the circumstances but are inherently uncertain and unpredictable.

Actual results could differ from those estimates.

Reclassifications

Certain prior period amounts were reclassified to conform to the current period presentation, including the separate presentation of Amortization of intangible assets and Interest expense, net, the combination of Selling, marketing and administrative expense, and reclassification of Other current liabilities and Other liabilities, which did not change the reported amounts of Total current liabilities or Total liabilities.

Cost of sales, excluding amortization of intangibles for fiscal years 2021 and 2020 excludes $ 7.4 million and $ 7.4 million, respectively, of intangibles amortization expense, formerly included in Cost of sales, which has been reclassified to Amortization of intangible assets.

Selling, marketing and administrative expense for fiscal years 2021 and 2020 excludes $ 20.0 million and $ 19.9 million, respectively, of intangibles amortization expense, formerly included in Sales and marketing expense, which has been reclassified to Amortization of intangible assets.

The reclassifications did not have an impact on net assets, Operating income, Net income, Basic or Diluted earnings per share, or cash flows.

Consolidation

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The Company considers cash equivalents to be highly liquid investments with a maturity at the date of purchase of three months or less.

They are carried at cost plus accrued interest, which approximates fair value because of the short-term maturity of these

They are carried at cost plus accrued interest, which approximates fair value because of the short-term maturity of these instruments.

Cash equivalents include money market funds and debt securities of high quality institutions.

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Marketable Securities

The Company invests excess cash balances in investment-grade corporate debt securities, asset-backed securities and U.S.

Treasury securities.

The Company invests excess cash balances in investment-grade corporate and government debt securities, corporate asset-backed securities and commercial paper.

The Company seeks to diversify investments and limits the amount of investment concentrations for individual institutions, maturities and investment types.

These marketable securities are classified as available-for-sale and, accordingly, such securities are recorded at fair value.

Unrealized gains and losses that are deemed temporary are included in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity.

If any adjustment to fair value reflects a significant decline in the value of the security, the Company evaluates the extent to which the decline is determined to be other-than-temporary and would mark the security to market through a charge to its Consolidated Statements of Income.

Unrealized gains and losses that are deemed temporary are included in Accumulated other comprehensive loss as a separate component of stockholders’ equity.

Marketable securities are classified as non-current when maturities are one year or more.

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Amounts later determined to be uncollectible are charged or written off against this allowance.

T he balance of accounts receivable is net of reserves of $ 89.1 million and $ 52.4 million at January 1, 2023 and January 2, 2022, respectively, of which the reserve related to contract rebates was $ 73.5 million and $ 40.3 million, respectively.

T he balance of accounts receivable is net of reserves of $ 91.8 million and $ 89.1 million at December 31, 2023 and January 1, 2023, respectively, of which the reserve related to contract rebates was $ 75.6 million and $ 73.5 million, respectively.

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash equivalents, marketable securities and trade accounts receivable.

Credit losses are identified when cash flows received are not expected to be sufficient to recover the amortized cost basis of a security.

In the event of a credit loss, only the amount associated with the credit loss is recognized in operating results, with the amount of loss relating to other factors recorded in accumulated other comprehensive income (loss).

In the event of a credit loss, only the amount associated with the credit loss is recognized in operating results, with the amount of loss relating to other factors recorded in Accumulated other comprehensive loss.

The Company performs credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary, but generally requires no collateral.

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The Company assesses goodwill for impairment at the reporting unit level on an annual basis, or whenever events or changes in circumstances occur that indicate that the fair value of a reporting unit is below its carrying amount.

Beginning in 2022, the Company changed its annual impairment assessment date from December 31 to the first day of the fourth quarter of the fiscal year.

In connection with the Combinations, the manner in which the chief operating decision maker (“CODM”) reviews the Company’s performance and allocates resources changed, resulting in six operating segments:

The Company’s annual impairment assessment date is the first day of the fourth quarter of the fiscal year.

The chief operating decision maker (“CODM”) reviews the Company’s performance and allocates resources based on six operating segments:

North America, EMEA, China, Latin America, Japan and Asia Pacific.

North America, EMEA and China are the Company’s reportable segments;

Latin America, Japan and Asia Pacific are immaterial operating segments that are not considered reportable segments and are included in “Other.” The Company concluded each of these six operating segments is considered a reporting unit for the purpose of allocating goodwill and performing the annual goodwill impairment assessment.

Prior to the Combinations, the Company operated as a single reportable segment with one reporting unit.

Latin America, Japan and Asia Pacific are immaterial operating segments that are not considered reportable segments and are included in “Other.” Each of these six operating segments is considered a reporting unit for the purpose of allocating goodwill and performing the annual goodwill impairment assessment.

When testing goodwill for impairment, the Company first has an option to assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (more than 50%) that impairment exists.

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If the fair value of a reporting unit is less than its carrying value, impairment will be recognized in the amount by which the carrying value exceeds the fair value.

For fiscal year 2022, the Company performed a qualitative goodwill impairment assessment as of the beginning of the fiscal fourth quarter to assess for potential impairment.

Based on the qualitative impairment assessment performed by the Company, it was concluded that it is not more likely than not that the fair value of the Company’s reporting units is less than their carrying amounts, and therefore no further impairment testing was necessary.

For fiscal year 2023, the Company bypassed the qualitative assessment and proceeded directly to the quantitative goodwill impairment test for all reporting units as of the beginning of the fiscal fourth quarter.

In all instances, the estimated fair values of the Company’s reporting units exceeded their carrying values and consequently did not result in an impairment.

Intangible Assets

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If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Convertible Debt

The Company accounts for convertible debt instruments that may be settled in cash upon conversion (including combination settlement of cash equal to the “principal portion” and delivery of the “share amount” in excess of the conversion value over the principal portion in shares of common stock and/or cash) by separating the liability and equity components of the instruments in a manner that reflects the Company’s nonconvertible debt borrowing rate.

The Company determines the carrying amount of the liability component by measuring the fair value of similar debt instruments that do not have the conversion feature.

If no similar debt instrument exists, the Company estimates fair value by using assumptions that market participants would use in pricing a debt instrument, including market interest rates, credit standing, yield curves and volatilities.

Determining the fair value of the debt component requires the use of accounting estimates and assumptions.

These estimates and assumptions are judgmental in nature and could have a significant impact on the determination of the debt component, and the associated non-cash interest expense.

During fiscal year 2020, the remaining aggregate principal amount of the Company’s Convertible Notes was settled or matured.

Revenue Recognition

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These revenues are recorded net of rebates and other discounts.

These rebates and discounts are estimated at the time of sale, and are largely driven by various customer program offerings,

including special pricing agreements, promotions and other volume-based incentives.

These rebates and discounts are estimated at the time of sale, and are largely driven by various customer program offerings, including special pricing agreements, promotions and other volume-based incentives.

Rebates and discounts are calculated based on historical experience, estimated discounting levels and estimated distributor inventory balances and recorded as a reduction of sales with offsets to accounts receivable and other current liabilities, respectively.

Transaction price for a contract represents the amount to which we are entitled in exchange for providing goods and services to the customer.

Transaction price for a contract represents the amount to which the Company is entitled in exchange for providing goods and services to the customer.

Transaction price does not include amounts subject to uncertainties unless it is probable that there will be no significant reversal of revenue when the uncertainty is resolved.

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A performance obligation is considered to be satisfied once the control of a product is transferred to the customer or the service is provided to the customer, meaning the customer has the ability to use and obtain the benefit of the goods or service.

During fiscal years 2022 and 2021 , the Company generated a portion of its revenue from sales of the QuickVue At-Home OTC COVID-19 tests to retail customers.

The Company estimates the transaction price for revenue from sales to retail customers based on historical experience and current trends to evaluate when uncertainties related to right of return provisions are resolved.

As of January 1, 2023 and January 2, 2022, due to a lack of history on which to base an estimate of products to be returned from the retailers, the Company established a reserve based on an estimate of total inventory remaining at our retailers which was subject to return.

The Company generates a portion of its revenue from sales of the QuickVue At-Home OTC COVID-19 tests to retail customers.

In fiscal years 2022 and 2021, due to a lack of history on which to base an estimate of products to be returned from the retailers, the Company established a reserve based on an estimate of total inventory remaining at our retailers which was subject to return.

During fiscal year 2023, the Company concluded that it had developed sufficient historical experience regarding the pattern in customer returns to be able to estimate the amount of consideration to which the Company expects to be entitled, excluding consideration for the products expected to be returned.

Amounts received or receivable that are expected to be returned are recognized as a refund liability, which is included in Other current liabilities.

The refund liability is estimated utilizing historical sale and return rates over the period during which customers have a right of return, taking into account available information on competitive products and contract changes.

The refund liability is remeasured at each reporting period to reflect changes in assumptions about expected returns.

Revenues from sales to retail customers amounted to approximately 3 % of Total revenues for fiscal year

The impact from this change in estimate is approximately $ 0.3 million and is not material to the Company’s Consolidated Financial Statements.

A portion of product sales includes revenues for diagnostic kits, which are utilized on leased instrument systems under the Company’s “reagent rental” program.

The reagent rental program provides customers the right to use the instruments at no separate cost to the customer in consideration for a multi-year agreement to purchase annual minimum amounts of consumables (“reagents” or “diagnostic kits”).

When an instrument is placed with a customer under a reagent rental agreement, the Company retains title to the equipment and it remains capitalized on the Company’s Consolidated Balance Sheets as property, plant and equipment, net.

The instrument is depreciated on a straight-line basis over the lesser of the lease term or life of the instrument.

Depreciation expense is recorded in cost of sales included in the Consolidated Statements of Income.

Depreciation expense is recorded in cost of sales included in the Consolidated Statements of (Loss) Income.

Instrument and consumables under the reagent rental agreements are deemed two distinct performance obligations.

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The contract price is allocated between these two performance obligations based on the relative standalone selling prices.

The instrument is considered an operating lease and revenue allocated to the instrument was not material for fiscal years 2022, 2021 and 2020.

The instrument is considered an operating lease.

Variable lease revenue and fixed lease revenue represented approximately 4 % and 1 %, respectively, of the Company’s Total revenues for fiscal year 2023.

Revenue allocated to the instrument was not material for fiscal years 2022 and 2021.

Government Assistance

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Amounts received from BARDA under this grant are recorded as a reduction to the carrying value of the related assets.

A portion of the grant is

for purposes of reimbursement of certain general and administrative expenses related to the project, which are not capitalized as part of the equipment constructed in connection with the project and are recorded as a reduction to the related expense.

The Company received $ 18.4 million during fiscal year 2022, which was recorded as a reduction to the carrying value of the related assets.

A portion of the grant is for purposes of reimbursement of certain general and administrative expenses related to the project, which are not capitalized as part of the equipment constructed in connection with the project and are recorded as a reduction to the related expense.

The Company received $ 13.5 million and $ 18.4 million during fiscal years 2023 and 2022, respectively, which were recorded as reductions to the carrying value of the related assets.

Research and Development Costs

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Product Shipment Costs

Product shipment costs are included in Selling, marketing and administrative expense in the accompanying Consolidated Statements of Income.

Product shipment costs are included in Selling, marketing and administrative expense in the accompanying Consolidated Statements of (Loss) Income.

Shipping and handling costs were $ 124.1 million, $ 104.9 million and $ 29.3 million for fiscal years 2023, 2022 and 2021, respectively.

Advertising Costs

Advertising costs are expensed as incurred and included in Selling, marketing and administrative expense in the accompanying Consolidated Statements of Income.

Advertising costs are expensed as incurred and included in Selling, marketing and administrative expense in the accompanying Consolidated Statements of (Loss) Income.

Advertising costs were $ 15.1 million, $ 26.8 million and $ 13.7 million for fiscal years 2023, 2022 and 2021, respectively.

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The Company does not intend to permanently reinvest earnings of foreign subsidiaries at this time.

As such, the Company provides for income taxes and foreign withholding taxes, where applicable, on undistributed earnings.

Accordingly, the Company provides for income taxes and foreign withholding taxes, where applicable, on undistributed earnings.

Any repatriation of undistributed earnings would be done at little or no tax cost.

Fair Value of Financial Instruments

The Company uses the fair value hierarchy established in ASC Topic 820, Fair Value Measurements and Disclosures, which requires that the valuation of assets and liabilities subject to fair value measurements be classified and disclosed by the Company in one of the following three categories:

The Company uses the fair value hierarchy established in Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, which requires that the valuation of assets and liabilities subject to fair value measurements be classified and disclosed by the Company in one of the following three categories:

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

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changes in unamortized pension and post-employment actuarial gains and losses;

and changes in the fair value of derivatives that are designated and qualify as cash flow hedging instruments excluded from the Consolidated Statements of Income.

and changes in the fair value of derivatives that are designated and qualify as cash flow hedging instruments excluded from the Consolidated Statements of (Loss) Income.

Business Combinations

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Recent Accounting Pronouncements

In October 2021, the Financial Accounting Standards Board issued guidance which was codified in Accounting Standards Update 2021-08, Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts

with Customers .

Under the new guidance, an acquirer is required to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers .

For public business entities, this guidance is effective for fiscal years beginning after December 15, 2022, with early adoption permitted.

The Company early adopted the guidance during the first quarter of 2022 with no material impact to the Consolidated Financial Statements.

There have been no accounting pronouncements issued or adopted during fiscal year 2023 that are expected to have a material impact on the Company’s Consolidated Financial Statements.

Business Combination

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As a result of the Combinations, QuidelOrtho became the successor issuer to Quidel.

The Combinations have been accounted for as a business combination using the acquisition method of accounting in conformity with ASC Topic 805, Business Combinations , with Quidel considered the accounting and the legal acquirer.

The Combinations enhance the Company’s revenue profile and expand the Company’s geographic footprint and product diversity.

The Combinations were completed for a total consideration of approximately $ 4.3 billion, which included the fair value of equity issued based on the May 26, 2022 closing price of $ 99.60 per share of Quidel common stock.

Former Ortho shareholders received $ 7.14 in cash and 0.1055 shares of QuidelOrtho common stock for each Ortho ordinary share.

The Combinations were completed for a total consideration of $ 4.3 billion, which included the fair value of equity issued based on the May 26, 2022 closing price of $ 99.60 per share of Quidel common stock.

Former Ortho shareholders received $ 7.14 in

cash and 0.1055 shares of QuidelOrtho common stock for each Ortho ordinary share.

The total purchase consideration was calculated as follows (in millions, except value per share data and Ortho Exchange Ratio):

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(2) Represents cash consideration of $ 7.14 per share paid to Ortho shareholders and holders of vested Ortho stock options on the closing date of the Combinations for 237.5 million outstanding Ortho shares and 7.3 million vested Ortho stock options.

The Company funded the cash portion of the purchase price with cash on its balance sheet and a portion of the Term Loan (as defined in Note 8) proceeds from the Financing (as defined in Note 8).

See Note 8 for further information regarding the Company’s debt.

The components of the preliminary purchase price allocation on the closing date of the Combinations are as follows:

The Company funded the cash portion of the purchase price with cash on its balance sheet and a portion of the Term Loan proceeds from the Financing.

The Combinations have been accounted for as a business combination, which requires that assets acquired and liabilities assumed be recognized at their fair value as of the date of the consummation of the Combinations, with Quidel considered the accounting and the legal acquirer.

The assessment of the fair value of assets acquired and liabilities assumed was finalized in fiscal year 2023.

The measurement period adjustments reflected in fiscal year 2023 resulted from finalization of tax related matters.

The related impact to net earnings that would have been recognized in previous periods if the adjustments were recognized as of the date of the consummation of the Combinations is immaterial to the Company’s Consolidated Financial Statements.

The purchase price allocation resulted in the following amounts being allocated to the assets acquired and liabilities assumed at the acquisition date based upon their respective fair values summarized below:

(In millions) Amounts Recognized as of Acquisition Date

(as previously reported) Measurement Period Adjustments Amounts Recognized as of Acquisition Date

(as adjusted)

(As Previously Reported) (1)

Measurement Period Adjustments Purchase Price Allocation

Cash and cash equivalents $ 234.5 $ — $ 234.5

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Inventories (2)

384.4 — 384.4

Property, plant and equipment 948.9 — 948.9

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Total purchase consideration $ 4,291.1 $ — $ 4,291.1

(1) As reported in the Company’s Annual Report on Form 10-K for the fiscal year ended January 1, 2023.

(2) Includes an estimated fair value adjustment to inventory of $ 61.7 million, which was fully recognized in the Consolidated Statements of (Loss) Income in fiscal year 2022.

(3) Immediately following the closing of the Combinations, the Company repaid long-term borrowings assumed, which consisted of $ 1,608.4 million aggregate principal amount related to Ortho’s Dollar Term Loan and Euro Term Loan Facilities, $ 240.0 million aggregate principal amount of 7.375 % Senior Notes due 2025 and $ 405.0 million aggregate principal amount of 7.250 % Senior Notes due 2028.

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The Company recorded a $ 23.5 million loss on extinguishment in connection with the Combinations, representing the difference between the reacquisition value, inclusive of $ 35.9 million of redemption premium, and the net carrying value of the extinguished debt.

The fair value estimates for the assets acquired and liabilities assumed were based on preliminary calculations, and the Company’s estimates and assumptions are subject to change for income tax matters.

The Company expects to finalize the valuation as soon as practicable, but no later than one year after the closing date of the Combinations.

The measurement period adjustments in the six months ended January 1, 2023 primarily resulted from completing valuations of real estate, personal property and intangible assets and revising the valuation of income tax liabilities.

The related impact to net earnings that would have been recognized in previous periods if the adjustments were recognized as of the acquisition date is immaterial to the Consolidated Financial Statements.

Inventories acquired included raw materials, work in progress and finished goods.

Inventories were recorded at their estimated fair values.

Inventories were valued at the estimated selling price less the estimated costs to be incurred to complete and sell the inventories, the associated margins on these activities and holding costs.

A step-up in the value of inventory of $ 61.7 million was recorded in connection with the Combinations.

The step-up value was recorded in Cost of sales, excluding amortization of intangibles in the Consolidated Statements of Income as the inventory was sold to customers, and was fully recognized by the end of fiscal year 2022.

In fiscal year 2022, $ 60.6 million of the fair value step-up of inventory was recognized in the Consolidated Statements of Income.

Goodwill represents the excess of the total purchase consideration over the estimated fair value of the net assets acquired, and is primarily attributable to synergies which are expected to expand the Company’s revenue profile and product diversity, as well as Ortho’s assembled workforce.

Goodwill is not deductible for tax purposes.

The preliminary assignment of goodwill by reportable segment as of the closing date of the Combinations is as follows (in millions):

The assignment of goodwill by reportable segment at the acquisition date is as follows (in millions):

North America $ 1,202.1

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Intangible Asset Amortization Period Fair Value of Assets Acquired

Customer relationships 20 years $ 1,907.0

Developed technology 15 years 888.0

Trademarks 15 years 373.0

The fair value of customer relationships was estimated using the Multi-Period Excess Earnings Method, which is a form of the income approach.

Customer relationships (1)

20 years $ 1,907.0

Developed technology (2)

15 years 888.0

Trademarks (2)

15 years 373.0

(1) The fair value was estimated using the Multi-Period Excess Earnings Method, which is a form of the income approach.

Significant assumptions include:

(i) the estimated annual net cash flows, which are a function of expected earnings attributable to the asset, contributory asset charges and the applicable tax rate, and (ii) the discount rate.

The fair value of developed technology and trademarks was estimated using the Relief from Royalty Method, which is another form of the income approach.

(2) The fair value was estimated using the Relief from Royalty Method, which is another form of the income approach.

Significant assumptions include:

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For fiscal year 2022, the Company incurred $ 46.9 million of transaction costs related to the Combinations, which primarily consisted of financial advisory, legal, accounting and valuation-related expenses.

These expenses were recorded in Acquisition and integration costs in the Consolidated Statements of Income.

These expenses were recorded in Acquisition and integration costs in the Consolidated Statements of (Loss) Income.

The following supplemental pro forma financial information shows the combined results of operations of the Company as if the Combinations had occurred on January 4, 2021, the beginning of the periods presented:

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The supplemental pro forma financial information includes adjustments for:

• incremental intangible assets amortization expense to be incurred of $ 19.6 million and $ 45.5 million for fiscal years 2022 and 2021, respectively, based on the preliminary fair values of the identifiable intangible assets acquired;

• incremental cost of sales related to the fair value step-up of inventory which is reflected by an adjustment to decrease expense by $ 60.6 million for fiscal year 2022 and an adjustment to increase expense by $ 61.7 million for fiscal year 2021;

• decreases in interest expense of $ 11.2 million and $ 34.9 million for fiscal years 2022 and 2021, respectively, associated with the issuance of debt to finance the Combinations and to repay Ortho’s then-outstanding indebtedness, including the net impact of the removal of the amortization of the discount on Ortho’s indebtedness and the change in amortization of deferred financing fees;

• the removal of $ 50.3 million of loss on extinguishment of debt from Ortho’s financial results for fiscal year 2022 and the reclassification of $ 24.0 million of loss on extinguishment of debt incurred during fiscal year 2022 to fiscal year 2021;

• the reclassification of $ 12.8 million of expense related to the accelerated vesting of certain stock awards of Ortho’s former chief executive officer from fiscal year 2022 to fiscal year 2021;

• incremental intangible assets amortization expense based on the preliminary fair values of the identifiable intangible assets acquired;

• incremental cost of sales related to the fair value step-up of inventory;

• decreases in interest expense associated with the issuance of debt to finance the Combinations and to repay Ortho’s then-outstanding indebtedness, including the net impact of the removal of the amortization of the discount on Ortho’s indebtedness and the change in amortization of deferred financing fees;

• the removal of loss on extinguishment of debt from Ortho’s results in fiscal year 2021 and the reclassification of loss on extinguishment of debt in fiscal years 2021 and 2022;

• the reclassification of expense related to the accelerated vesting of certain stock awards of Ortho’s former chief executive officer;

• tax impacts related to the above adjustments.

From the closing date of the Combinations through January 1, 2023, the acquired results of operations of Ortho contributed total revenues of $ 1,165.2 million and net loss of $ 126.2 million to the Company’s consolidated results, which included amortization of acquired intangible assets of $ 104.7 million and recognition in Cost of sales, excluding amortization of intangibles of the fair value step-up of inventory of $ 60.6 million.

From the acquisition date through January 1, 2023, the acquired results of operations of Ortho contributed total revenues of $ 1,165.2 million and net loss of $ 126.2 million to the Company’s consolidated results, which included amortization of acquired intangible assets of $ 104.7 million and recognition in Cost of sales, excluding amortization of intangibles of the fair value step-up of inventory of $ 60.6 million.

Computation of Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted-average number of shares of common stock outstanding.

Basic earnings per share (“EPS”) is computed by dividing Net (loss) income by the weighted-average number of shares of common stock outstanding.

Diluted EPS is computed based on the sum of the weighted-average number of shares of common stock and potentially dilutive shares of common stock outstanding during the period.

Potentially dilutive shares of common stock consist of shares issuable from stock options, unvested RSUs and restricted stock.

Potentially dilutive shares of common stock consist of shares issuable from stock options and unvested RSUs.

Potentially dilutive shares of common stock from outstanding stock options and unvested RSUs are determined using the average share price for each period under the treasury stock method.

Potentially dilutive common shares from the Convertible Notes are determined using the if-converted method.

Under the provisions of the if-converted method, the Convertible Notes are assumed to be converted and the resulting common shares are included in the denominator of the EPS calculation and the interest expense, net of tax, recorded in connection with the Convertible Notes is added back to net income.

The Convertible Notes have a dilutive impact when the average market price of the Company’s common stock exceeds the applicable conversion price of the notes.

The Convertible Notes became convertible on March 31, 2018 and matured on December 15, 2020.

The following table reconciles net income and the weighted-average shares used in computing basic and diluted EPS in the respective periods:

The following table presents the calculation of the weighted-average shares used in computing basic and diluted EPS in the respective periods:

Fiscal Year Ended

(In millions) 2023 2022 2021

Net income used for basic earnings per share $ 548.7 $ 704.2 $ 810.3

Interest expense on Convertible Notes, net of tax — — 0.4

Net income used for diluted earnings per share, if-converted method $ 548.7 $ 704.2 $ 810.7

Basic weighted-average shares of common stock outstanding 66.8 56.8 42.1

Dilutive potential shares issuable from Convertible Notes — — 0.3

Dilutive potential shares issuable from stock options and unvested RSUs 0.6 0.8 1.2

Dilutive potential shares issuable from stock options and RSUs (1)

Diluted weighted-average shares of common stock outstanding 66.8 57.4 42.9

Potentially dilutive shares excluded from calculation due to anti-dilutive effect 1.5 0.2 —

Potentially dilutive shares excluded from the calculation above represent stock options when the combined exercise price and unrecognized stock-based compensation are greater than the average market price for the Company’s common stock because their effect is anti-dilutive.

(1) In fiscal year 2023, all potential shares of common stock issuable for stock options and RSUs were excluded from the dilutive calculations above because the effect of including them would have been anti-dilutive.

The dilutive effect of potential shares of common stock issuable for stock options and RSUs on the weighted-average number of shares of common stock outstanding would have been as follows:

Fiscal Year Ended

(In millions) 2023

Basic weighted-average shares of common stock outstanding 66.8

Dilutive potential shares issuable from stock options and RSUs 0.5

Diluted weighted-average shares of common stock outstanding 67.3

Stock options and RSUs where the combined exercise price and unrecognized stock-based compensation was greater than the average market price for the Company’s common stock were not included in the computations of diluted weighted-average shares because the effect would have been anti-dilutive.

These stock options and RSUs represented 1.6 million, 0.9 million and 0.1 million shares of common stock for fiscal years 2023, 2022 and 2021, respectively.

Contract Balances

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The Company records an asset when revenue is recognized prior to invoicing a customer (a “contract asset”).

Contract assets are included within Prepaid expenses and other current assets or Other assets in the Company’s Consolidated Balance Sheets and are transferred to accounts receivable when the right to payment becomes unconditional.

The balance of contract assets recorded in the Company’s Consolidated Balance Sheets as of January 1, 2023 was $ 49.6 million and was included in Prepaid expenses and other current assets.

The contract asset balance as of January 1, 2023 consisted of the following components, all of which related to agreements acquired by the Company in connection with the Combinations;

therefore, no balance existed at January 2, 2022:

• a customer supply agreement under which the difference between the timing of invoicing and revenue recognition resulted in a contract asset of $ 6.8 million;

Contract assets are included within Prepaid expenses and other current assets in the Company’s Consolidated Balance Sheets and are transferred to accounts receivable when the right to payment becomes unconditional.

The balance of contract assets recorded in the Company’s Consolidated Balance Sheets as of December 31, 2023 and January 1, 2023 was $ 46.2 million and $ 49.6 million, respectively.

The contract asset balance consisted of the following components, all of which related to agreements acquired by the Company in connection with the Combinations:

• a customer supply agreement under which the difference between the timing of invoicing and revenue recognition resulted in a contract asset of $ 1.9 million and $ 6.8 million as of December 31, 2023 and January 1, 2023, respectively;

• contractual arrangements with certain customers under which the Company invoices the customers based on reportable results generated by its reagents;

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The Company records the revenue upon shipment and an associated contract asset, and relieves the contract asset upon completion of the invoicing.

The balance of the contract asset related to these arrangements was $ 38.5 million as of January 1, 2023 and was recorded in Prepaid expenses and other current assets;

• one of the Company’s contract manufacturing agreements that recognizes revenue as the products are manufactured.

The balance of the contract asset related to this arrangement was $ 4.3 million as of January 1, 2023.

The balance of the contract asset related to these arrangements was $ 41.8 million and $ 38.5 million as of December 31, 2023 and January 1, 2023, respectively;

• one of the Company’s contract manufacturing agreements that recognizes revenue as the products are manufactured resulted in a contract asset of $ 2.5 million and $ 4.3 million as of December 31, 2023 and January 1, 2023, respectively.

The Company reviews contract assets for expected credit losses resulting from the collectability of customer accounts.

Expected losses are established based on historical losses, customer mix and credit policies, current economic conditions in customers’ country or industry, and expectations associated with reasonable and supportable forecasts.

No credit losses related to contract assets were recognized during fiscal year 2022.

No credit losses related to contract assets were recognized during fiscal years 2023 and 2022.

The Company recognizes a contract liability when a customer pays an invoice prior to the Company transferring control of the goods or services (“contract liabilities”).

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The Company classifies deferred revenue as current or non-current based on the timing of the transfer of control or performance of the service.

The balance of the Company’s current deferred revenue was $ 76.4 million as of January 1, 2023, and $ 1.9 million as of January 2, 2022.

The balance of the Company’s current deferred revenue was $ 36.8 million and $ 76.4 million as of December 31, 2023 and January 1, 2023, respectively.

The Company has one arrangement with a customer where the revenue is expected to be recognized beyond one year.

The balance of the deferred revenue included in long-term liabilities was $ 9.4 million as of January 1, 2023 and was included in Other liabilities in the Consolidated Balance Sheets.

There was no deferred revenue included in long-term liabilities as of January 2, 2022.

The balance of the deferred revenue included in long-term liabilities was $ 13.9 million and $ 9.4 million as of December 31, 2023 and January 1, 2023, respectively, and was included in Other liabilities in the Consolidated Balance Sheets.

The amount of deferred revenue as of January 1, 2023 that was recorded in Total revenues during fiscal year 2023 was $ 72.1 million.

The amount of deferred revenue as of January 2, 2022 that was recorded in Total revenues during fiscal year 2022 was not material.

Joint Business with Grifols

In connection with the Combinations, the Company acquired the Joint Business between Ortho and Grifols, under which Ortho and Grifols agreed to pursue a collaboration relating to Ortho’s Hepatitis and HIV diagnostics business.

The governance of the Joint Business is shared through a supervisory board made up of equal representation by Ortho and Grifols, which is responsible for all significant decisions relating to the Joint Business that are not exclusively assigned to either Ortho or Grifols, as defined in the Grifols Agreement.

The Company’s portion of the pre-tax net profit shared under the Joint Business was $ 18.6 million during fiscal year 2022.

This included the Company’s portion of the pre-tax net profit of $ 11.1 million during fiscal year 2022 on sales transactions with third parties where the Company is the principal.

The Company recognized revenues, cost of sales, excluding amortization of intangibles, and operating expenses, on a gross basis on these sales transactions in their respective lines in the Consolidated Statements of Income.

The Company’s portion of the pre-tax net profit also included revenue of $ 7.5 million from collaboration and royalty agreements during fiscal year 2022, which is presented on a net basis within Total revenues.

The Company’s portion of the pre-tax net profit shared under the Joint Business was $ 47.3 million and $ 18.6 million during fiscal years 2023 and 2022, respectively.

These amounts included the Company’s portion of the pre-tax net profit of $ 21.4 million and $ 11.1 million during fiscal years 2023 and 2022, respectively, on sales transactions with third parties where the Company is the principal.

The Company’s portion of the pre-tax net profit also included revenue from collaboration and royalty agreements of $ 26.0 million and $ 7.5 million during fiscal years 2023 and 2022, respectively, which is presented on a net basis within Total revenues.

Disaggregation of Revenue

Following the Combinations, the Company reorganized its former product categories into four business units.

Revenues from the Company’s former Specialized Diagnostic Solutions product category have been included in a new Labs business unit.

The Company’s former Rapid Immunoassay and Cardiometabolic Immunoassay product categories now represent its Point of Care business unit.

The Molecular Diagnostics business unit represents the former Molecular Diagnostic Solutions product category.

In addition, the Company added a Transfusion Medicine business unit.

The following table summarizes Total revenues by business unit:

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Concentration of Revenue and Credit Risk

The Company had sales to individual customers in excess of 10% of Total revenues as follows:

For fiscal year 2023, no customer individually accounted for more than 10% of Total revenues.

Customers that accounted for 10% or more of the Company’s Total revenues for fiscal years 2022 and 2021 were as follows:

Fiscal Year Ended

2022 2021 2020

A 20 % 1 % — %

B 11 % 24 % 29 %

C 8 % 9 % 16 %

D 5 % 9 % 13 %

E 3 % 7 % 10 %

47 % 50 % 68 %

As of January 1, 2023 and January 2, 2022, customers with balances due in excess of 10% of Accounts receivable, net totaled $ 161.9 million and $ 267.3 million, respectively.

For fiscal years 2022, 2021 and 2020, sales of COVID-19 products accounted for 44 %, 75 % and 70 % of Total revenues, respectively.

For fiscal years 2022, 2021 and 2020, sales of influenza products accounted for 11 %, 4 % and 8 % of Total revenues, respectively.

Customer A 20 % 1 %

Customer B 11 % 24 %

As of December 31, 2023 and January 1, 2023, customers with balances due in excess of 10% of Accounts receivable, net totaled $ 63.5 million and $ 161.9 million, respectively.

Revenue related to our respiratory products accounted for 24 %, 57 % and 81 % of Total revenues for fiscal years 2023, 2022 and 2021, respectively.

Segment and Geographic Information

In connection with the Combinations, the manner in which the CODM reviews the Company’s performance and allocates resources changed, resulting in three geographically-based reportable segments:

North America;

The Company operates in three geographically-based reportable segments:

North America, EMEA, and China.

Although all three segments are engaged in the marketing, distribution and sale of diagnostic instruments and assays for hospitals, retailers, distributors, laboratories and/or blood and plasma centers worldwide, each region is managed separately to better align with the market dynamics of the specific geographic region.

Latin America, Japan and Asia Pacific are immaterial operating segments that are not considered reportable segments and are included in “Other.” Previously, the Company operated as a single reportable segment.

Prior periods have been revised to align with the current period presentation.

Latin America, Japan and Asia Pacific are immaterial operating segments that are not considered reportable segments and are included in “Other.”

Total revenues by reportable segment are as follows:

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Total revenues $ 2,997.8 $ 3,266.0 $ 1,698.6

Beginning in the second quarter of 2022, in connection with the Combinations, the basis by which the Company measures segment profit or loss changed to Adjusted EBITDA in order to manage the Company’s business to better align with the market dynamics of the specific geographic regions in which the Company operates.

In the fourth quarter of 2022, the Company revised the internal allocation of certain global costs primarily between the North America segment and Corporate to better align costs that impact the Company as a whole.

Prior periods have been revised to align with the current period presentation.

The following table sets forth Adjusted EBITDA by segment and the reconciliations to Income before provision for income taxes for fiscal years 2022, 2021 and 2020:

The following table sets forth Adjusted EBITDA by segment and the reconciliations to (Loss) income before income taxes for fiscal years 2023, 2022 and 2021:

Fiscal Year Ended

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( 529.7 ) ( 512.1 ) ( 152.9 )

Interest expense, net ( 147.6 ) ( 75.7 ) ( 5.8 )

Depreciation and amortization ( 457.2 ) ( 283.6 ) ( 52.7 )

Acquisition and integration costs ( 113.4 ) ( 136.0 ) ( 9.6 )

Interest expense, net ( 75.7 ) ( 5.8 ) ( 8.5 )

Unwind inventory fair value adjustment ( 60.6 ) — —

Loss on extinguishment of debt ( 24.0 ) — ( 10.4 )

(Loss) gain on investments ( 5.8 ) 1.5 —

Tax indemnification expense ( 12.6 ) ( 0.3 ) —

Amortization of deferred cloud computing

implementation costs ( 9.2 ) ( 5.4 ) ( 3.7 )

Employee compensation charges and other costs ( 3.7 ) — —

Impairment of long-lived assets ( 4.5 ) ( 2.8 ) —

(Loss) gain on investments ( 3.6 ) ( 5.8 ) 1.5

EU medical device regulation transition costs (2)

Tax indemnification expense ( 0.3 ) — —

Change in fair value of acquisition contingencies ( 0.1 ) ( 0.2 ) ( 1.4 )

Derivative mark-to-market gain (loss) 4.4 — ( 1.1 )

Income before provision for income taxes $ 735.9 $ 900.3 $ 1,040.3

( 2.5 ) ( 1.5 ) —

Unwind inventory fair value adjustment — ( 60.6 ) —

Loss on extinguishment of debt — ( 24.0 ) —

Employee compensation charges — ( 3.2 ) —

Derivative mark-to-market gain — 4.4 —

Other adjustments ( 1.7 ) ( 0.6 ) ( 0.2 )

(Loss) income before income taxes $ ( 29.1 ) $ 735.9 $ 900.3

(1) Primarily consists of costs related to executive and staff functions, including certain finance, human resources, manufacturing and IT functions, which benefit the Company as a whole.

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The Company’s corporate function also includes debt and stock-based compensation associated with all employee stock-based awards.

(2) Represents incremental consulting costs and R&D manufacturing site costs to align compliance of Ortho’s existing, on-market products that were previously registered under the European In Vitro Diagnostics Directive regulatory framework with the requirements under the EU’s In Vitro Diagnostic Regulation, which generally apply from May 2022 onwards.

(2) Represents incremental consulting costs and R&D manufacturing site costs to align compliance of the Company’s existing, on-market products that were previously registered under the European In Vitro Diagnostics Directive regulatory framework with the requirements under the EU’s In Vitro Diagnostic Regulation, which generally apply from May 2022 onwards.

The CODM does not review capital expenditures, total depreciation and amortization or assets by segment, and therefore this information has been excluded as it does not comprise part of management’s key performance metrics.

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Long-lived Assets as of Total Revenues for Fiscal Year

(In millions) January 1, 2023 January 2, 2022 2022 2021 2020

(In millions) December 31, 2023 January 1, 2023 2023 2022 2021

Domestic $ 1,024.5 $ 983.0 $ 1,829.4 $ 2,451.7 $ 1,415.5

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Foreign ( 9.4 ) ( 0.2 ) ( 2.0 )

Total deferred provision (benefit) ( 41.4 ) 2.6 ( 4.2 )

Provision for income taxes $ 187.2 $ 196.1 $ 230.0

Total deferred (benefit) provision ( 4.5 ) ( 41.4 ) 2.6

(Benefit from) provision for income taxes $ ( 19.0 ) $ 187.2 $ 196.1

The Company’s income before income taxes was subject to taxes in the following jurisdictions for the following periods:

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Foreign 134.8 63.8 9.1

Income before income taxes $ 735.9 $ 900.3 $ 1,040.3

Significant components of the Company’s deferred tax assets and deferred tax liabilities as of January 1, 2023 and January 2, 2022 are shown below:

(In millions) January 1, 2023 January 2, 2022

(Loss) income before income taxes $ ( 29.1 ) $ 735.9 $ 900.3

Significant components of the Company’s deferred tax assets and deferred tax liabilities as of December 31, 2023 and January 1, 2023 are shown below:

(In millions) December 31, 2023 January 1, 2023

Deferred tax assets:

Lease liability $ 47.2 $ 51.4

Intangible assets — 2.2

Allowance for returns and discounts 42.3 45.9

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Stock-based compensation 15.8 14.6

Tax loss and credit carryforwards 565.3 10.8

Tax loss, interest expense and credit carryforwards 603.8 565.3

Research & development expenses 75.9 50.7

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Total deferred tax liabilities ( 707.4 ) ( 743.5 )

Net deferred tax assets (liabilities) $ ( 196.8 ) $ 20.1

Net deferred tax liabilities $ ( 166.3 ) $ ( 196.8 )

Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets.

For the fiscal years ended January 1, 2023, January 2, 2022 and January 3, 2021, the Company has demonstrated positive cumulative pre-tax book income.

Such objective positive evidence allowed the

Company to consider other subjective evidence, such as the Company’s projections for future profitability, to determine the realizability of its deferred tax assets.

The valuation allowance of $ 251.3 million as of January 1, 2023 represents the portion of the deferred tax asset that management could not conclude was more likely than not to be realized.

The Company’s valuation allowance relates primarily to the realization of recorded tax benefits on tax loss carryforwards from operations in Luxembourg and certain U.S.

For the fiscal years ended December 31, 2023, January 1, 2023 and January 2, 2022, the Company has demonstrated positive cumulative pre-tax book income.

Such objective positive evidence allowed the Company to consider other subjective evidence, such as the Company’s projections for future profitability, to determine the realizability of its deferred tax assets.

The valuation allowance of $ 274.7 million as of December 31, 2023 represents the portion of the deferred tax asset that management could not conclude was more likely than not to be realized.

The Company’s valuation allowance relates primarily to the realization of recorded tax benefits on tax loss carryforwards from operations in Luxembourg and credits in U.S.

state jurisdictions.

The amount of the deferred tax assets considered realizable could be adjusted in the future based on changes in available positive and negative evidence.

As of January 1, 2023, the Company had U.S.

As of December 31, 2023, the Company had U.S.

federal net operating loss (“NOL”) carryforwards of $ 792.5 million, of which $ 304.1 million are subject to expiration through 2037 and $ 488.4 million are not subject to expiration.

In addition, the Company has state NOLs of approximately $ 512.0 million, which will expire in years 2024 through 2043.

As of January 1, 2023, the Company had U.S.

As of December 31, 2023, the Company had U.S.

federal research credit carryforwards of $ 26.7 million and federal foreign tax credits of $ 3.2 million, which will begin to expire in 2034 and 2028, respectively.

In addition, the Company had state research credits of $ 5.9 million, of which none expire, and state business credit carryforwards of $ 25.6 million, which will begin to expire in 2029.

As of January 1, 2023, the Company had $ 543.8 million of NOL carryforwards in certain non-U.S.

In addition, the Company had state research credits of $ 16.2 million and state business credit carryforwards of $ 25.6 million, of which none expire.

As of December 31, 2023, the Company had $ 560.7 million of NOL carryforwards in certain non-U.S.

jurisdictions, net of uncertain tax positions.

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Pursuant to Internal Revenue Code Sections 382 and 383, the Company’s use of its NOL and tax credit carryforwards may be limited as a result of cumulative changes in ownership of more than 50% over a three-year period.

As a result of an ownership change that occurred in the second quarter of fiscal year 2022, the Company may be limited in its ability to utilize its NOL carryforwards and certain other attributes, starting the ownership change date.

The reconciliation of income tax computed at the federal statutory rate to the provision for income taxes from continuing operations was as follows:

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(In millions) 2023 2022 2021

Tax expense at statutory tax rate $ 154.5 $ 189.1 $ 218.5

State tax expense, net of federal tax 29.3 30.1 30.3

Tax (benefit) expense at statutory tax rate $ ( 6.1 ) $ 154.5 $ 189.1

State tax (benefit) expense, net of federal tax ( 2.8 ) 29.3 30.1

Foreign income taxed at rates other than the applicable U.S.

4 unchanged sentences

Change in valuation allowance 10.4 26.2 ( 0.1 )

Foreign Derived Intangible Income Deduction (FDII) ( 10.2 ) ( 8.4 ) ( 8.6 )

Foreign Derived Intangible Income Deduction — ( 10.2 ) ( 8.4 )

Global Intangible Low-Taxed Income 20.1 3.8 —

Change in uncertain tax positions ( 11.8 ) — —

Other 7.3 8.7 0.5

Provision for income taxes $ 187.2 $ 196.1 $ 230.0

(Benefit from) provision for income taxes $ ( 19.0 ) $ 187.2 $ 196.1

The Company recognizes liabilities for uncertain tax positions based on a two-step process.

6 unchanged sentences

Beginning balance $ 40.0 $ 17.7 $ 22.6

Increases due to current year acquisitions 27.8 — —

Increases (decreases) related to prior year tax positions ( 0.6 ) 0.5 ( 2.3 )

Increases related to current year tax positions 2.6 1.8 0.9

Decreases from voluntary disclosure agreements — ( 6.3 ) —

(Decreases) increases related to prior year tax positions ( 0.1 ) ( 0.6 ) 0.5

Increases due to current year acquisitions — 27.8 —

Decreases due to settlements ( 13.7 ) ( 6.7 ) —

Decreases from voluntary disclosure agreements — — ( 6.3 )

Ending balance $ 28.8 $ 40.0 $ 17.7

As of January 1, 2023, January 2, 2022 and January 3, 2021, the Company had unrecognized tax benefits of $ 40.0 million, $ 17.7 million, and $ 22.6 million, respectively, of which $ 28.3 million, $ 11.3 million and $ 15.0 million, respectively, would reduce the Company’s annual effective tax rate, if recognized.

The Company estimates that within the next 12 months, its uncertain tax positions, excluding interest, will decrease by $ 2.4 million.

The uncertain tax positions relate to an on-going multi-state tax commission audit that is expected to be settled within the next 12 months.

As of December 31, 2023, January 1, 2023 and January 2, 2022, the Company had unrecognized tax benefits of $ 28.8 million, $ 40.0 million, and $ 17.7 million, respectively, of which $ 21.6 million, $ 28.3 million and $ 11.3 million, respectively, would reduce the Company’s annual effective tax rate, if recognized.

The Company estimates that within the next 12 months, its uncertain tax positions, excluding interest, will decrease by $ 11.7 million related to the lapse of statutes of limitations as well as an on-going multi-state tax commission audit that is expected to be settled within the next 12 months.

The Company’s policy is to recognize the interest expense and penalties related to income tax matters as a component of the income tax expense.

The Company had accrued interest and penalties associated with uncertain tax positions of $ 8.3 million as of January 1, 2023 and $ 1.2 million as of January 2, 2022.

Interest expense, net of accrued interest (reversed) for fiscal years 2022, 2021 and 2020 was approximately $ 0.3 million, $ 0.7 million and $ 0.1 million, respectively.

The Company had accrued interest and penalties associated with uncertain tax positions of $ 4.0 million as of December 31, 2023 and $ 8.3 million as of January 1, 2023.

The Company recognized net interest income of $ 4.3 million for fiscal year 2023 due to the reversals of prior year accrued interest;

interest expense for fiscal years 2022 and 2021 was approximately $ 0.3 million and $ 0.7 million, respectively.

The Company is subject to periodic audits by domestic and foreign tax authorities.

5 unchanged sentences

Accordingly, all tax liabilities related to these tax years will be indemnified by Johnson & Johnson.

As of January 1, 2023, the indemnification receivable from Johnson & Johnson totaled $ 16.8 million and is included as a component of Prepaid expenses and other current assets and Other assets on the Consolidated Balance Sheet.

During the fourth quarter of fiscal year 2023, the federal examination for tax years 2013 through 2014 closed with no liability due.

As such, the related unrecognized tax benefits and interest were released totaling $ 19.9 million, offset by $ 5.4 million of competent authority benefits reversed.

As of December 31, 2023, the remaining indemnification receivable from Johnson & Johnson totaled $ 3.0 million and is included as a component of Prepaid expenses and other current assets and Other assets on the Consolidated Balance Sheet.

The following table summarizes the changes to the valuation allowance for balances for fiscal years 2023, 2022 and 2021:

Beginning Balance Additions Due to Current Year Acquisitions Additions

Provision for (Benefit From)

Charged to (Benefit From) Provision for

Income Taxes Currency Translation/Other Ending Balance

Deferred tax valuation allowance

Fiscal year ended January 1, 2023 $ 2.3 223.5 26.2 ( 0.7 ) $ 251.3

Fiscal year ended December 31, 2023 $ 251.3 — 10.4 13.0 $ 274.7

Fiscal year ended January 1, 2023 $ 2.3 223.5 26.2 ( 0.7 ) $ 251.3

2 unchanged sentences

Cash, Cash Equivalents and Restricted Cash

(In millions) January 1, 2023 January 2, 2022

(In millions) December 31, 2023 January 1, 2023

Cash and cash equivalents $ 118.9 $ 292.9

3 unchanged sentences

The following table is a summary of marketable securities:

January 1, 2023 January 2, 2022

December 31, 2023 January 1, 2023

(In millions) Amortized Cost Gross Unrealized Losses Fair Value Amortized Cost Gross Unrealized Losses Fair Value

8 unchanged sentences

Corporate asset-backed securities, non-current 0.9 — 0.9 7.9 ( 0.1 ) 7.8

Sovereign government bonds, non-current 2.0 — 2.0 — — —

Total marketable securities $ 55.9 $ ( 0.1 ) $ 55.8 $ 73.8 $ ( 0.7 ) $ 73.1

1 unchanged sentence

Accounts receivables primarily consist of trade accounts receivables with maturities of one year or less and are presented net of reserves:

(In millions) January 1, 2023 January 2, 2022

(In millions) December 31, 2023 January 1, 2023

Accounts receivable $ 395.1 $ 543.0

3 unchanged sentences

The allowance for contractual rebates involves estimating adjustments to revenue based on a high volume of data, including inputs from third-party sources.

In addition, the determination of such adjustments includes estimating rebate percentages which are dependent on estimated end-user sales mix and customer contractual terms, which vary across customers, the related balance of which was $ 40.0 million and $ 40.3 million at January 1, 2023 and January 2, 2022, respectively, and was included in the allowance for contract rebates and discounts.

In addition, the determination of such adjustments includes estimating rebate percentages which are dependent on estimated end-user sales mix and customer contractual terms, which vary across customers, the related balance of which was $ 31.3 million and $ 40.0 million at December 31, 2023 and January 1, 2023, respectively, and was included in the allowance for contract rebates and discounts.

The following table summarizes changes to the accounts receivable allowance balances for fiscal years 2023, 2022 and 2021:

Period Additions Charged to Expense or as Reductions to Revenue (1) Deductions (2) Balance at end of

Period Additions Charged to Expense or as Reductions to Revenue (1)

Deductions (2)

Balance at end of

(In millions)

Fiscal year ended January 1, 2023 $ 52.4 $ 407.6 $ ( 370.9 ) $ 89.1

Fiscal year ended December 31, 2023 $ 89.1 $ 493.5 $ ( 490.8 ) $ 91.8

Fiscal year ended January 1, 2023 $ 52.4 $ 407.6 $ ( 370.9 ) $ 89.1

6 unchanged sentences

Inventories consisted of the following:

(In millions) January 1, 2023 January 2, 2022

(In millions) December 31, 2023 January 1, 2023

Raw materials $ 212.7 $ 185.2

7 unchanged sentences

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:

(In millions) January 1, 2023 January 2, 2022

Prepaid expenses and other current assets consisted of the following:

(In millions) December 31, 2023 January 1, 2023

Prepaid expenses $ 67.0 $ 96.7

Income taxes and other tax receivables 104.7 38.6

Contract assets 46.2 49.6

Other receivables 34.2 44.3

Income taxes and other tax receivables 38.6 —

Derivatives 6.9 22.0

3 unchanged sentences

The following is a summary of property, plant and equipment:

(In millions) January 1, 2023 January 2, 2022

(In millions) December 31, 2023 January 1, 2023

Equipment, furniture and fixtures $ 595.2 $ 515.1

6 unchanged sentences

Total property, plant and equipment, net $ 1,443.8 $ 1,339.0

Construction in progress reflects amounts incurred for construction or improvements of property, plant, or equipment that have not been made in service.

Construction in progress reflects amounts incurred for construction or improvements of property, plant, or equipment that have not been put in service.

In addition, construction in progress includes certain instruments that have not been placed at a customer under a lease agreement that will be reclassified to leased instruments once placed at a customer site.

8 unchanged sentences

Balance at January 1, 2023 $ 1,547.7 $ 358.6 $ 118.1 $ 452.4 $ 2,476.8

Reallocation of goodwill (1)

$ 204.9 $ 212.6 $ ( 32.2 ) $ ( 385.3 ) —

Purchase accounting adjustments ( 9.4 ) ( 4.1 ) ( 1.3 ) ( 5.1 ) ( 19.9 )

Foreign currency translation (1)

0.7 15.3 1.1 18.0 35.1

Balance at December 31, 2023 $ 1,743.9 $ 582.4 $ 85.7 $ 80.0 $ 2,492.0

(1) During the fourth quarter of 2023, management identified an incorrect allocation of goodwill arising from the Combinations.

The reallocation solely impacts the translation of foreign exchange on goodwill reflected through the cumulative translation adjustments.

An out-of-period adjustment was included in fiscal year 2023 to increase goodwill and decrease Accumulated other comprehensive loss by $ 15.5 million.

The adjustment was not material to the previously reported Consolidated Financial Statements of the Company.

Intangible assets consisted of the following:

January 1, 2023 January 2, 2022

December 31, 2023 January 1, 2023

Description Weighted-average

12 unchanged sentences

Amortization expense (including capitalized software costs) was $ 204.8 million, $ 132.5 million and $ 27.4 million for fiscal years 2023, 2022 and 2021, respectively.

The expected future annual amortization expense of the Company’s finite-lived intangible assets held as of January 1, 2023 is as follows:

The expected future annual amortization expense of the Company’s finite-lived intangible assets held as of December 31, 2023 is as follows:

(In millions)

Other Current Liabilities

Other current liabilities consist of the following:

(In millions) January 1, 2023 January 2, 2022

Accrued commissions and rebates $ 55.1 $ 15.9

Deferred consideration 39.3 41.9

Other current liabilities consisted of the following:

(In millions) December 31, 2023 January 1, 2023

Accrued commissions, rebates and returns $ 63.8 $ 57.5

Deferred revenue 36.8 76.4

Accrued interest 30.3 1.4

Operating lease liabilities 26.7 24.4

1 unchanged sentence

Derivatives 12.1 19.7

Contingent consideration 0.1 6.0

Payables under transition services agreements — 10.9

Deferred consideration — 39.3

Other 115.7 97.4

Total other current liabilities $ 303.3 $ 325.4

Long-term Borrowings

The components of borrowings were as follows:

(In millions) January 1, 2023 January 2, 2022

(In millions) December 31, 2023 January 1, 2023

Term Loan $ 2,420.2 $ 2,646.9

Revolving Credit Facility — —

Financing lease obligation 0.8 0.7

Other short-term borrowings 1.6 —

Other long-term borrowings 0.4 1.2

Financing lease obligation 0.4 0.8

Unamortized deferred financing costs ( 8.0 ) ( 10.6 )

2 unchanged sentences

Long-term borrowings $ 2,274.8 $ 2,430.8

On May 27, 2022, the Company entered into a credit agreement (the “Credit Agreement”) by and among the Company, as borrower, Bank of America, N.A., as administrative agent and swing line lender (“Bank of America”), and the other lenders and L/C issuers party thereto (together with Bank of America, the “Lenders”).

Pursuant to the Credit Agreement and in connection with the consummation of the Combinations, the Lenders provided the Company with a $ 2,750.0 million senior secured term loan facility (the “Term Loan”) and a $ 750.0 million revolving credit facility (the “Revolving Credit Facility” and with the Term Loan, the “Financing”).

Effective August 4, 2022, pursuant to the Increase Joinder No.

1 to the Credit Agreement, the Revolving Credit Facility increased by $ 50.0 million to $ 800.0 million.

The credit agreement, dated May 27, 2022, by and among the Company, as borrower, Bank of America, N.A., as administrative agent and swing line lender, and the other lenders and L/C issuers party thereto (the “Credit Agreement”) consists of a $ 2,750.0 million Term Loan and an $ 800.0 million revolving credit facility (the “Revolving Credit Facility” and with the Term Loan, the “Financing”).

The Financing is guaranteed by certain material domestic subsidiaries of the Company (the “Guarantors”) and is secured by liens on substantially all of the assets of the Company and the Guarantors, excluding real property and certain other types of excluded assets.

Loans under the Credit Agreement will bear interest at a rate per annum equal to the Term SOFR or Base Rate plus the Applicable Rate (each as defined in the Credit Agreement).

As of January 1, 2023, letters of credit issued under the Revolving Credit Facility totaled $ 13.1 million, which reduced the available amount under the Revolving Credit Facility to $ 786.9 million.

As of December 31, 2023, letters of credit issued under the Revolving Credit Facility totaled $ 12.9 million, which reduced the available amount under the Revolving Credit Facility to $ 787.1 million.

In connection with the Credit Agreement, the Company incurred $ 15.4 million of debt issuance costs, of which $ 11.9 million was related to the Term Loan and $ 3.5 million was related to the Revolving Credit Facility.

1 unchanged sentence

Debt issuance costs related to the Revolving Credit Facility were recorded as Other assets and are amortized on a straight-line basis over the term of the Revolving Credit Facility.

As of December 31, 2023 and January 1, 2023, there were no amounts outstanding under the Revolving Credit Facility.

During the year ended December 31, 2023, the Company made $ 226.7 million in payments on the Term Loan, including a voluntary prepayment of $ 20.0 million.

The Term Loan is subject to quarterly amortization of the principal amount on the last business day of each fiscal quarter of the Company (commencing on September 30, 2022).

2 unchanged sentences

The Term Loan and the Revolving Credit Facility will mature on May 27, 2027.

The Company must prepay loans outstanding under the Credit Agreement in an amount equal to the Net Cash Proceeds (as defined in the Credit Agreement) from (i) certain property dispositions and (ii) the receipt of certain other amounts not in the ordinary course of business, such as certain insurance proceeds and condemnation awards, in each case, if not reinvested within a specified time period as contemplated in the Credit Agreement.

The Credit Agreement contains affirmative and negative covenants that are customary for credit agreements of this nature.

1 unchanged sentence

The Credit Agreement contains two financial covenants:

(i) a maximum Consolidated Leverage Ratio (as defined in the Credit Agreement) as of the last day of each fiscal quarter of (a) 4.50 to 1.00 for the first four fiscal quarters ending after the closing date of the Credit Agreement (the “Initial Measurement Period”), (b) 4.00 to 1.00 for the first four fiscal quarters ending after the Initial Measurement Period and (c) 3.50 to 1.00 for each fiscal quarter thereafter;

four fiscal quarters ending after the Initial Measurement Period and (c) 3.50 to 1.00 for each fiscal quarter thereafter;

and (ii) a minimum Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) of 3.00 to 1.00 as of the end of any fiscal quarter for the most recently completed four fiscal quarters.

The Company was in compliance with the financial covenants as of January 1, 2023.

The Credit Agreement was entered into in connection with the Combinations in order to fund a portion of the cash portion of the purchase price as well as to repay substantially all of Ortho’s then-outstanding indebtedness.

See Note 2 for more information regarding the Combinations.

In connection with the closing of the Combinations, Quidel terminated its previous $ 175.0 million revolving credit facility and related credit agreement on May 27, 2022, which did not have an outstanding balance.

The Company was in compliance with the financial covenants as of December 31, 2023.

The Company entered into the Credit Agreement in connection with the Combinations in order to fund a portion of the cash portion of the purchase price as well as to repay substantially all of Ortho’s then-outstanding indebtedness.

The following table provides the detailed amounts within Interest expense, net for fiscal years 2023, 2022 and 2021:

7 unchanged sentences

Interest expense, net $ 147.6 $ 75.7 $ 5.8

The following table provides a schedule of required future repayments of all borrowings outstanding as of January 1, 2023.

The following table provides a schedule of required future repayments of all borrowings outstanding as of December 31, 2023:

(In millions)

11 unchanged sentences

ROU assets obtained in exchange for new lease liabilities (1)

$ 17.9 $ 29.9 $ 37.3

(1) Summers Ridge Lease — The Company leases four buildings that are located on the Summers Ridge property in San Diego, California with an initial term through January 2033 with options to extend the lease for two additional five-year terms upon satisfaction of certain conditions, which have not been included in the determination of the lease term.

The must-take provisions related to the fourth building became effective in November 2022 upon expiration of the previous tenant’s lease.

As a result, the Company recorded a ROU asset and a corresponding lease liability of approximately $ 20.6 million in November 2022.

The Company leases its facilities and certain equipment.

Commitments for minimum rentals under non-cancelable operating leases at the end of 2022 were as follows:

Commitments for minimum rentals under non-cancelable operating leases at the end of fiscal year 2023 were as follows:

(In millions)

6 unchanged sentences

Weighted average discount rate 4 %

Summers Ridge Lease — The Company leases four buildings that are located on the Summers Ridge property in San Diego, California with an initial term through January 2033 with options to extend the lease for two additional five-year terms upon satisfaction of certain conditions, which have not been included in the determination of the lease term.

The must-take provisions related to the fourth building became effective in November 2022 upon expiration of the previous tenant’s lease.

As a result, the Company recorded a ROU asset and a corresponding lease liability of approximately $ 20.6 million in November 2022.

Undiscounted lease obligations for operating leases not yet commenced were approximately $ 36 million as of December 31, 2023.

The obligation relates to a warehouse facility that is expected to be ready for use in 2024.

Stockholders’ Equity

11 unchanged sentences

The Company has stock options, RSUs and PSUs outstanding, which were issued under these equity incentive plans to certain employees and non-employee directors.

Stock options granted under these plans have terms ranging up to ten years , have exercise prices ranging from $ 15.40 to $ 254.00 per share, and generally vest over four years .

As of January 1, 2023, approximately 2.3 million shares of common stock remained available for grant and 4.1 million shares of common stock were reserved for future issuance under the 2018 Plan.

Stock options granted under these plans have terms ranging up to ten years , have exercise prices ranging from $ 15.40 to $ 254.00 per share, and generally vest over three or four years .

As of December 31, 2023, approximately 1.3 million shares of common stock remained available for grant and 4.1 million shares of common stock were reserved for future issuance under the 2018 Plan.

The Company grants both RSUs and PSUs to certain officers and directors.

Until the restrictions lapse, ownership of the shares underlying the affected RSUs or PSUs is conditional upon continuous employment with the Company and/or achievement of certain performance goals.

For fiscal years 2022, 2021 and 2020, the Company granted approximately 0.7 million, 0.1 million and 0.2 million shares of common stock, respectively, of RSUs to certain officers and directors, which either have a time-based, four-year vesting provision or performance-based vesting provision.

For fiscal years 2023, 2022 and 2021, the Company granted approximately 0.6 million, 0.7 million and 0.1 million shares of common stock, respectively, of RSUs to certain officers and directors, which either have a time-based, three-year or four-year vesting provision or performance-based vesting provision.

During fiscal years 2023, 2022 and 2021, RSUs were granted to certain members of the Board in lieu of cash compensation as a part of the Company’s non-employee director’s deferred compensation program.

2 unchanged sentences

For fiscal years 2023, 2022 and 2021, certain employees of the Company were eligible to participate in the Company’s deferred bonus compensation program with respect to any payments received under the Company’s cash incentive plan.

Participating employees could elect to receive 50 % or 100 % of the value of their cash bonus in the form of fully vested RSUs, plus a premium as additional RSUs, issued under the 2018 Plan.

Participating employees could elect to receive 50 % or 100 % of the value of their cash bonus in the form of fully vested RSUs, plus a premium of additional RSUs, issued under the 2018 Plan.

The premium RSUs are subject to a one-year vesting requirement from the date of issuance.

5 unchanged sentences

Under the ESPP, full-time employees were allowed to purchase common stock through payroll deductions (which could not exceed 10 % of the employee’s compensation) at the lower of 85 % of fair market value at the beginning or end of each six-month purchase period.

As of January 1, 2023, 736,630 shares of common stock remained available for future issuance.

As of December 31, 2023, 637,471 shares of common stock remained available for future issuance.

Stock Repurchase Program

On December 18, 2018, Quidel announced a stock repurchase program to repurchase up to $ 50.0 million of its common stock, which was authorized by Quidel’s board of directors (the “Quidel Board”) on December 12, 2018.

On August 28, 2020, the Board authorized an increase of an additional $ 150.0 million to Quidel’s existing stock repurchase program authorization, which was announced on September 1, 2020.

The Board also extended the stock repurchase program through August 28, 2022.

On August 28, 2020, the Quidel Board authorized an increase of an additional $ 150.0 million to Quidel’s existing stock repurchase program authorization, which was announced on September 1, 2020.

The Quidel Board also extended the stock repurchase program through August 28, 2022.

In connection with the consummation of the Combinations, Quidel’s stock repurchase program was terminated.

On August 17, 2022, the Board authorized a stock repurchase program, allowing the Company to repurchase up to $ 300.0 million of its common stock through August 17, 2024 (the “Stock Repurchase Program”).

During fiscal year 2022, 953,468 shares of outstanding common stock were repurchased under the Stock Repurchase Program.

As of January 1, 2023, the Company had approximately $ 225.7 million available under the Stock Repurchase Program.

During fiscal years 2021 and 2020, 957,239 and 257,329 shares of outstanding common stock were repurchased under Quidel’s stock repurchase program.

On August 17, 2022, the Board authorized the Stock Repurchase Program, allowing the Company to repurchase up to $ 300.0 million of its common stock through August 17, 2024.

During fiscal years 2023 and 2022, 120,000 and 953,468 shares of outstanding common stock, respectively, were repurchased under the Stock Repurchase Program.

As of December 31, 2023, the Company had approximately $ 218.4 million available under the Stock Repurchase Program.

During fiscal year 2021, 957,239 shares of outstanding common stock were repurchased under Quidel’s stock repurchase program.

Stock-based Compensation

8 unchanged sentences

Total stock-based compensation expense $ 63.8 $ 65.6 $ 25.4

The table above includes $ 17.2 million of compensation expense related to liability-classified awards for fiscal year 2022, which has been or is expected to be settled in cash.

These awards represent the $ 7.14 per share cash settled portion of the replacement awards issued in connection with the Combinations.

Income tax benefit $ 1.7 $ 2.1 $ 0.6

The table above includes $ 12.2 million and $ 17.2 million of compensation expense related to liability-classified awards for fiscal years 2023 and 2022, respectively, which has been or is expected to be settled in cash.

These awards primarily represent

the $ 7.14 per share cash settled portion of the replacement awards issued in connection with the Combinations.

Cash paid to settle liability-classified awards was $ 7.3 million and $ 20.9 million for fiscal years 2023 and 2022, respectively, and was not material for fiscal year 2021.

For fiscal years 2023, 2022 and 2021, the Company recorded $ 1.5 million, $ 3.7 million and $ 3.0 million in stock-based compensation expense, respectively, associated with the deferred bonus compensation program described in “—Note 10.

During fiscal years 2022, 2021 and 2020, $ 3.3 million, $ 2.8 million and $ 2.1 million, respectively, were initially recorded as a component of accrued payroll and related expenses associated with the deferred bonus compensation program.

Stockholders’ Equity.”

Stock Options

7 unchanged sentences

Granted 253 88.27

Stock options assumed in the Combinations 1,229 96.10

Exercised ( 107 ) 46.42

Forfeited ( 99 ) 115.95

Outstanding at January 1, 2023 1,656 $ 90.34 5.53 $ 28,140

Vested and expected to vest at January 1, 2023 1,600 $ 89.23 5.45 $ 28,122

Exercisable at January 1, 2023 1,195 $ 80.53 4.61 $ 26,774

Cancellations ( 166 ) 121.73

Outstanding at December 31, 2023 1,636 $ 89.69 5.67 $ 16,774

Vested and expected to vest at December 31, 2023 1,613 $ 89.59 5.62 $ 16,774

Exercisable at December 31, 2023 1,217 $ 85.93 4.66 $ 16,774

Compensation expense related to stock options granted is recognized ratably over the service vesting period for the entire option award.

The estimated fair value of each stock option was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions for the option grants, including grants related to options assumed in the Combinations presented separately:

The estimated fair value of each stock option was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions for the option grants:

Fiscal Year Ended

May 27, 2022 (1)

January 1, 2023 January 2, 2022 January 3, 2021

December 31, 2023 January 1, 2023 January 2, 2022

Risk-free interest rate 3.52 % 1.96 % 0.48 %

3 unchanged sentences

Weighted-average grant date fair value $ 48.17 $ 50.62 $ 106.55

(1) The replacement stock options granted to Ortho option holders on the closing date of the Combinations were issued consistent with the vesting conditions of the replaced award.

The fair value on the closing date of the Combinations attributed to post-combination service, adjusted for estimated forfeitures, is recognized as expensed on a straight-line basis over the remaining vesting period.

The computation of the expected option life is based on a weighted-average calculation combining the average life of options that have already been exercised and post-vest cancellations with the estimated life of the remaining vested and unexercised options.

The expected volatility is based on the historical volatility of the Company’s common stock.

The risk-free interest rate is based on the US Treasury yield curve over the expected term of the option.

The risk-free interest rate is based on the U.S.

Treasury yield curve over the expected term of the option.

The Company has never paid any cash dividends on its common stock, and does not anticipate paying any cash dividends in the foreseeable future.

3 unchanged sentences

The total intrinsic value was $ 4.4 million, $ 13.7 million and $ 9.9 million for options exercised during fiscal years 2023, 2022, and 2021, respectively.

As of January 1, 2023, total unrecognized compensation expense related to stock options was approximately $ 27.2 million and the related weighted-average period over which it is expected to be recognized is approximately 3.4 years.

In January 2023, the Compensation Committee of the Board approved a modification to the vesting terms of certain stock options that were previously granted by Ortho to certain Ortho employees, such that the stock options vested on December 31, 2023.

The modification resulted in an additional $ 11.1 million of stock-based compensation expense recognized during fiscal year 2023.

As of December 31, 2023, total unrecognized compensation expense related to stock options was approximately $ 14.9 million and the related weighted-average period over which it is expected to be recognized is approximately 2.0 years.

The maximum contractual term of the Company’s stock options is ten years .

4 unchanged sentences

Granted 632 86.49

Stock awards assumed in the Combinations 49 99.60

Vested ( 422 ) 90.16

Forfeited ( 86 ) 95.16

Non-vested at January 1, 2023 1,032 $ 98.89

The total amount of unrecognized compensation expense related to non-vested RSUs as of January 1, 2023 was approximately $ 62.7 million, which is expected to be recognized over a weighted-average period of approximately 2.1 years.

Non-vested at December 31, 2023 1,156 $ 95.56

The total amount of unrecognized compensation expense related to non-vested RSUs as of December 31, 2023 was approximately $ 68.5 million, which is expected to be recognized over a weighted-average period of approximately 2.0 years.

The fair value of RSUs is determined based on the closing market price of the Company’s common stock on the grant date.

2 unchanged sentences

Purchase Obligations

The Company had $ 247.8 million of purchase obligations as of January 1, 2023, the majority of which is expected to be purchased in the next year.

The Company had $ 293.3 million of purchase obligations as of December 31, 2023, the majority of which is expected to be purchased in the next year.

These purchase obligations include agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms, including (i) fixed or minimum quantities to be purchased, (ii) fixed, minimum or variable price provisions and (iii) the approximate timing of the transaction, as well as amounts for planned inventory purchases under contractual arrangements.

7 unchanged sentences

For those matters as to which the Company is not able to estimate a possible loss or range of loss, the Company is not able to determine whether the loss will have a material adverse effect on its business, financial condition, results of operations or liquidity.

No accrual has been recorded as of January 1, 2023 and January 2, 2022 related to such matters as they are not probable and/or reasonably estimable.

Management believes that all such current legal actions, in the aggregate, will not have a material adverse effect on the Company.

Management believes that all such current legal actions, in the aggregate, are not expected to have a material adverse effect on the Company.

However, the resolution of, or increase in any accruals for, one or more matters may have a material adverse effect on the Company’s results of operations and cash flows.

4 unchanged sentences

The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of the following periods:

January 1, 2023 January 2, 2022

December 31, 2023 January 1, 2023

(In millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

6 unchanged sentences

Deferred consideration (1)

— — — — — 39.3 — 39.3

Total liabilities measured at fair value $ — $ 27.5 $ 0.1 $ 27.6 $ — $ 61.1 $ 0.1 $ 61.2

(1) In connection with the acquisition of the BNP Business, the Company paid its last annual installment of $ 40.0 million during fiscal year 2023.

There were no transfers of assets or liabilities into or out of Level 3 of the fair value hierarchy during fiscal years 2023 and 2022.

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Observable inputs include broker quotes, daily market foreign currency rates and forward pricing curves.

In connection with the acquisition of the BNP Business from Alere Inc., the Company will pay annual installments of up to $ 48.0 million each year through April 2023.

The fair value of the payments treated as deferred consideration i s calculated based on the net present value of cash payments using an estimated borrowing rate based on a quoted price for a similar liability.

The fair value of the payments treated as contingent consideration is calculated using a discounted probability weighted valuation model.

Discount rates used in such calculations are significant assumptions that are not observed in the market and, therefore, the resulting fair value represents a Level 3 measurement.

Changes in estimated fair value of contingent consideration liabilities from January 3, 2021 through January 1, 2023 were as follows:

(In millions) Contingent Consideration

(Level 3 Measurement)

Balance at January 3, 2021 $ 11.9

Cash payments ( 6.0 )

Change in estimated fair value, recorded in selling, marketing and administrative expenses 0.2

Balance at January 2, 2022 $ 6.1

Cash payments ( 6.0 )

Balance at January 1, 2023 $ 0.1

Financial Instruments Not Measured at Fair Value

The estimated fair value of the Company’s borrowings under the Term Loan was $ 2,396.0 million at December 31, 2023, compared to the carrying amount, excluding debt issuance costs, of $ 2,420.2 million.

The estimated fair value of the Company’s borrowings under the Term Loan was $ 2,630.3 million at January 1, 2023, compared to the carrying amount, excluding debt issuance costs of $ 2,646.9 million.

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The Company’s interest rate risk relates primarily to interest rate exposures on variable rate debt, including the Revolving Credit Facility and Term Loan.

See Note 8 for additional information on the currently outstanding components of the Revolving Credit Facility and Term Loan.

The Company entered into interest rate cap and swap agreements to hedge the related risk of the variability to the Company’s cash flows due to the rates specified for these credit facilities.

The Company designates certain interest rate derivative instruments as cash flow hedges, including the outstanding interest rate swaps.

The Company records gains and losses due to changes in fair value of the derivatives within Other comprehensive income (loss) (“OCI”) and reclassifies these amounts to Interest expense, net in the same period or periods for which the underlying hedged transaction affects earnings.

In the event the Company determines the hedged transaction is no longer probable to occur or concludes the hedge relationship is no longer effective, the hedge is prospectively de-designated.

Pre-tax unrealized gains of $ 25.1 million are expected to be reclassified from OCI to earnings in the next 12 months.

The following table summarizes the Company’s interest rate derivative agreements as of January 1, 2023, all of which were interest rate swaps:

See “—Note 8.

Borrowings” for additional information on the currently outstanding components of the Revolving Credit Facility and Term Loan.

The Company entered into interest rate swap agreements to hedge the related risk of the variability to the Company’s cash flows due to the rates specified for these credit facilities.

The Company designates its interest rate swaps as cash flow hedges.

The Company records gains and losses due to changes in fair value of the derivatives within OCI and reclassifies these amounts to Interest expense, net in the same period or periods for which the underlying hedged transaction affects earnings.

In the event the Company determines the hedged transaction is no

longer probable to occur or concludes the hedge relationship is no longer effective, the hedge is prospectively de-designated.

Pre-tax unrealized gain of $ 15.8 million as of December 31, 2023 is expected to be reclassified from OCI to earnings in the next 12 months.

The following table summarizes the Company’s interest rate derivative agreements as of December 31, 2023, all of which were interest rate swaps:

Notional Amount

(In millions) (1)

Description Hedge Designation Effective Date Expiration Date

$ 500.0 Pay 1.58 % fixed, receive floating rate (1-month USD-SOFR)

Designated cash flow hedge May 29, 2022 December 31, 2023

(In millions) Description Hedge Designation Effective Date Expiration Date

$ 550.0 Pay 3.765 % fixed, receive floating rate (1-month USD-SOFR)

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Designated cash flow hedge December 30, 2022 May 27, 2027

(1) The notional value of interest rate swap contracts with an effective date of December 30, 2022, is expected to increase to $ 1.8 billion on December 29, 2023.

During the fourth quarter of 2022 the Company terminated its non-designated $ 1.0 billion notional value 3.428 % interest rate cap.

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The Company uses foreign currency forward contracts and may use option contracts and cross currency swaps to manage its currency risk exposures.

The Company’s foreign currency forward contracts are denominated primarily in Australian Dollar, Brazilian Real, British Pound, Canadian Dollar, Chilean Peso, Chinese Yuan/Renminbi, Euro, Indian Rupee, Japanese Yen, Mexican Peso, Swiss Franc and the Thai Baht.

The Company’s foreign currency forward contracts are denominated primarily in Australian Dollar, Brazilian Real, British Pound, Canadian Dollar, Chilean Peso, Chinese Yuan/Renminbi, Colombian Peso, Euro, Indian Rupee, Japanese Yen, Mexican Peso, Philippine Peso, South Korean Won, Swiss Franc, Danish Krone, Czech Koruna and Thai Baht.

The Company designates certain foreign currency forward contracts as cash flow hedges.

The Company records gains and losses due to changes in fair value of the derivatives within OCI and reclassifies these amounts to Total revenues and Cost of

sales, excluding amortization of intangibles in the same period or periods for which the underlying hedged transaction affects earnings.

The Company records gains and losses due to changes in fair value of the derivatives within OCI and reclassifies these amounts to Total revenues and Cost of sales, excluding amortization of intangibles in the same period or periods for which the underlying hedged transaction affects earnings.

In the event the Company determines the hedged transaction is no longer probable to occur or concludes the hedge relationship is no longer effective, the hedge is prospectively de-designated.

The pre-tax unrealized loss of $ 7.9 million within OCI as of January 1, 2023 is expected to be reclassified to earnings in the next 12 months.

The pre-tax unrealized loss of $ 6.7 million as of December 31, 2023 is expected to be reclassified from OCI to earnings in the next 12 months.

The Company also enters into foreign currency forward contracts that are not part of designated hedging relationships and which are intended to mitigate exchange rate risk of monetary assets and liabilities and related forecasted transactions.

The Company records these non-designated derivatives at mark-to-market with gains and losses recognized in earnings within Other expense (income), net.

The following table provides details of the currency hedging instruments outstanding as of January 1, 2023:

The following table provides details of the currency hedging instruments outstanding as of December 31, 2023:

Description Notional Amount

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Foreign currency forward contracts 803.4 Non-designated

The following table summarizes pre-tax gains and losses from designated derivative and non-derivative instruments within accumulated other comprehensive (loss) income (“AOCI”) for fiscal year 2022:

The following table summarizes pre-tax gains and losses from designated derivative and non-derivative instruments within AOCI for fiscal years ended December 31, 2023 and January 1, 2023:

Designated Hedging Instruments

(In millions) Amount of Loss (Gain) Recognized in OCI on Hedges Location of Amounts Reclassified From AOCI Into Income Amount of Loss (Gain) Reclassified From AOCI Into Income

Fiscal Year Ended December 31, 2023

Foreign currency forward contracts (sales) $ 7.0 Total revenues $ 4.3

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Interest rate derivatives ( 13.4 ) Interest expense, net ( 30.1 )

Gains and losses from designated derivative and non-derivative instruments within AOCI for fiscal years 2021 and 2020 were not material.

The following table summarizes the fair value of designated and non-designated hedging instruments recognized within the Consolidated Balance Sheets as of January 1, 2023 and January 2, 2022:

(In millions) January 1, 2023 January 2, 2022

Fiscal Year Ended January 1, 2023

Foreign currency forward contracts (sales) $ 1.3 Total revenues $ ( 2.9 )

Foreign currency forward contracts (purchases) 3.5 Cost of sales, excluding amortization of intangibles ( 0.6 )

Interest rate derivatives ( 11.4 ) Interest expense, net ( 1.7 )

Gains and losses from designated derivative and non-derivative instruments within AOCI for fiscal year 2021 were not material.

The Company also uses forward exchange contracts to hedge a portion of its net investment in foreign operations against movements in exchange rates.

In fiscal year 2023, the Company entered into forward contracts that are designated as hedges of the net investment in a foreign operations.

The unrealized gains or losses on these contracts are recorded in translation adjustment within OCI, and remain in AOCI until either the sale or complete or substantially complete liquidation of the subsidiary.

The Company excludes certain portions of the change in fair value of its derivative instruments from the assessment of hedge effectiveness (excluded components).

Changes in fair value of the excluded components are recognized in OCI.

The Company recognizes in earnings the initial value of the excluded components on a straight-line basis over the life of the derivative instrument.

The effect of the Company’s net investment hedges on OCI and the Consolidated Statements of (Loss) Income are shown below:

Amount of Pre-tax (Gain) Loss Recognized in OCI Amount of Pre-tax (Gain) Loss Recognized in Other Expense (Income), Net for Amounts Excluded from Effectiveness Testing

Fiscal Year Ended December 31, 2023

Net Investment Hedging Relationships

Foreign exchange contracts $ 8.5 $ ( 1.0 )

Fair value (gains) and losses on foreign currency forward contracts, as determined using Level 2 inputs, that do not qualify for hedge accounting treatment are recorded in Other expense (income), net and were not material for fiscal years 2023, 2022 and 2021.

Fair value gains on interest rate derivatives, as determined using Level 2 inputs, that do not qualify for hedge accounting treatment are recorded in Other expense (income), net and were $ 3.4 million for fiscal year 2022 and were immaterial for fiscal year 2021.

There were no fair value gains and losses on interest rate derivatives that do not qualify for hedge accounting treatment for fiscal year 2023.

The following table summarizes the fair value of designated and non-designated hedging instruments recognized within the Consolidated Balance Sheets as of December 31, 2023 and January 1, 2023:

(In millions) December 31, 2023 January 1, 2023

Designated cash flow hedges

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Other current liabilities 9.4 14.3

Other liabilities 8.5 —

Non-designated hedging instruments

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Obligation and Funded Status

The measurement date used to determine the defined benefit and other post-employment benefits obligations was January 1, 2023.

The measurement dates used to determine the defined benefit and other post-employment benefit obligations were December 31, 2023 and January 1, 2023.

The following tables set forth the changes to the projected benefit obligations (“PBO”) and plan assets:

Fiscal Year Ended

(In millions) January 1, 2023

(In millions) December 31, 2023 January 1, 2023

Defined Benefit Plans

4 unchanged sentences

Benefits paid ( 0.2 ) ( 0.3 )

Actuarial gain ( 0.6 )

Actuarial loss (gain) 2.8 ( 0.6 )

Assumed obligation from the Combinations — 33.3

18 unchanged sentences

Fiscal Year Ended

(In millions) January 1, 2023

(In millions) December 31, 2023 January 1, 2023

What changed 10-K

Item 8. Financial Statements and Supplementary Data