9 unchanged sentences
We report fiscal years under a 52/53-week format and as a result, certain fiscal years will contain 53 weeks.
−Removed: Each of the fiscal years ended January 1, 2023 (“fiscal year 2022”) and January 2, 2022 (“fiscal year 2021”) included 52 weeks.
−Removed: The fiscal year ended January 3, 2021 (“fiscal year 2020”) included 53 weeks.
+Added: Each of the fiscal years ended December 31, 2023 (“fiscal year 2023”), January 1, 2023 (“fiscal year 2022”) and January 2, 2022 (“fiscal year 2021”) included 52 weeks.
The fiscal year ending December 29, 2024 (“fiscal year 2024”) will include 52 weeks.
Overview of Fiscal Year 2023
−Removed: During fiscal year 2022, we continued to see strong returns from our acquisitions as well as our organic investments across technology, marketing and people.
−Removed: Our overall revenue in fiscal year 2022 decreased by $516.0 million, or 13%, as compared to fiscal year 2021, reflecting a decrease of $913.0 million, or 31%, in our Diagnostics segment revenue, partially offset by an increase of $395.2 million, or 44%, in our Discovery & Analytical Solutions segment revenue.
−Removed: Revenue from our 2021 acquisitions contributed $366.9 million to our overall revenue during fiscal year 2022.
−Removed: The decrease in our Diagnostics segment revenue during fiscal year 2022 was primarily driven by decreased demand for our COVID-19 product offerings, partially offset by an increase in our core product offerings resulting in a decrease of $689.0 million in our immunodiagnostics revenue and a decrease of $225.8 million in our applied genomics revenue.
−Removed: Revenue from our 2021 acquisitions contributed $58.1 million to our Diagnostics segment revenue during fiscal year 2022 .
−Removed: The increase in our Discovery & Analytical Solutions segment revenue during fiscal year 2022 was driven by an increase of $395.2 million in our life sciences market revenue.
−Removed: Revenu e from our 2021 acquisitions contributed $308.7 million to the increase in our Discovery & Analytical Solutions segment revenue during fiscal year 2022.
−Removed: In our Diagnostics segment, we experienced a global decline in demand for our COVID-19 product offerings due to the cancellation of our service contracts for the State of California and the United Kingdom, and lower COVID-19 testing volumes compared to fiscal year 2021.
−Removed: We saw strong growth in our core immunodiagnostics business in the Americas and Europe, partially offset by the impact of extensive shutdowns in China.
−Removed: In our reproductive health business, an expanded range of product offerings and increased geographic reach more than offset the impact of declining birthrates.
−Removed: In our Discovery & Analytical Solutions segment, the increase in our life sciences market revenue was the result of an increase in revenue in our pharmaceutical and biotechnology markets across all regions.
−Removed: Instruments, reagents and software experienced strong growth and we saw a positive impact from pricing actions we took in early 2022.
−Removed: Our consolidated gross margins decreased 350 basis points in fiscal year 2022, as compared to fiscal year 2021, primarily due to increased amortization of acquired intangible assets and lower revenue from our COVID-19 product offerings, partially offset by a favorable shift in product mix and service productivity.
−Removed: Our consolidated operating margin decreased 1,045 basis points in fiscal year 2022, as compared to fiscal year 2021, primarily due to lower revenue from our COVID-19 product offerings, increased costs related to amortization of acquired intangible assets, and investments in new product development and growth initiatives.
−Removed: During fiscal year 2022, supply chain disruptions and inflation did not materially impact our results of operations as compared to fiscal year 2021 as the effects of our initiatives to reduce transportation costs more than offset the impact of inflation on our raw materials purchases.
−Removed: During fiscal year 2022, supply chain disruptions and inflation increased our cost of goods sold by less than $10.0 million as compared to fiscal year 2021.
−Removed: Overall, we believe that our strategic priorities and recent portfolio transformations, coupled with our expanded range of product offerings, leading market positions, global scale and financial strength provides us with a foundation for continued revenue growth, strong margins and cash flows, and long-term earnings per share growth.
+Added: During fiscal year 2023, we delivered differentiated performance despite market headwinds, demonstrating the strength of our product portfolio, continued innovation, and investments in our people.
+Added: Our overall revenue in fiscal year 2023 decreased by $561.3 million, or 17%, as compared to fiscal year 2022, reflecting a decrease of $560.7 million, or 28%, in Diagnostics segment revenue and a decrease of $0.6 million, or less than 1%, in Life Sciences segment revenue.
+Added: The decrease in Diagnostics segment revenue was primarily driven by decreased demand for COVID-19 product offerings, partially offset by growth in the core immunodiagnostics business.
+Added: The decrease in Life Sciences segment revenue was driven by a decrease in instruments revenue due to pharmaceutical and biotechnology market headwinds and a decrease in software revenue from the timing of contract renewals, partially offset by an increase in reagents revenue.
+Added: Our consolidated gross margins decreased 411 basis points in fiscal year 2023, as compared to fiscal year 2022, primarily due to lower revenue from COVID-19 product offerings, and an unfavorable shift in product mix, partially offset by pricing actions.
+Added: Our consolidated operating margin decreased 1,150 basis points in fiscal year 2023, as compared to fiscal year 2022, also due to lower revenue from COVID-19 product offerings and unfavorable shift in product mix, partially offset by operating expense reductions.
+Added: Overall, we believe that our range of product offerings, leading market positions, global scale and financial strength provides us with a foundation for continued long-term growth, margin expansion and robust cash flow generation.
Consolidated Results of Operations
Fiscal Year 2023 Compared to Fiscal Year 2022
−Removed: Revenue for fiscal year 2022 was $3.3 billion, as compared to $3.8 billion for fiscal year 2021, a decrease of $0.5 billion, or 13%, w hich includes an approximate 4% decrease in revenue attributable to unfavorable changes in foreign exchange rates, partially offset by an approximate 9% increase in revenue attributable to acquisitions .
−Removed: Revenue from our 2021 acquisitions contributed $366.9 million to our overall revenue during fiscal year 2022.
−Removed: The analysis in the remainder of this paragraph compares segment revenue for fiscal year 2022 as compared to fiscal year 2021 and includes the effect of foreign exchange rate fluctuations, and acquisitions and divestitures.
−Removed: The decrease in total revenue reflects a decrease in our Diagnostics segment revenue of $913.0 million, or 31%, due to decreased demand for our COVID-19 product offerings, partially offset by an increase in our core product offerings resulting in a decrease of $689.0 million in our immunodiagnostics revenue and a decrease of $225.8 million in our applied genomics revenue.
−Removed: Our Discovery & Analytical Solutions segment revenue increased by $395.2 million, or 44%, due to increase in revenue in our life sciences market, particularly in the pharmaceutical and biotechnology markets.
−Removed: As a result of adjustments to deferred revenue related to certain acquisitions required by business combination rules, we did not recognize $0.8 million and $2.6 million of revenue for fiscal years 2022 and 2021, respectively, that otherwise would have been recorded by the acquired businesses during each of the respective periods.
+Added: Revenue for fiscal year 2023 was $2,750.6 million, as compared to $3,311.8 million for fiscal year 2022, a decrease of $561.3 million, or 17%.
+Added: The analysis in the remainder of this paragraph compares segment revenue for fiscal year 2023 as compared to fiscal year 2022 and includes the effect of foreign exchange rate fluctuations.
+Added: Diagnostics segment revenue for fiscal year 2023 was $1,459.1 million, as compared to $2,019.7 million for fiscal year 2022, a decrease of $560.7 million, or 28%, due to a decrease of $380.3 million in immunodiagnostics revenue, a decrease of $165.2 million in applied genomics revenue and a decrease of $15.3 million in reproductive health revenue.
+Added: Life Sciences segment revenue was $1,292.3 million for fiscal year 2023, as compared to $1,292.9 million for fiscal year 2022, a decrease of $0.6 million, or less than 1%, driven by a decrease of $24.3 million in instruments revenue and a decrease of $17.7 million in software revenue, partially offset by an increase of $41.4 million in reagents revenue.
Cost of Revenue
−Removed: Cost of revenue for fiscal year 2022 was $1.3 billion, as compared to $1.4 billion for fiscal year 2021, a decrease of approximately $71.8 million, or 5%.
−Removed: As a percentage of revenue, cost of revenue increased to 40% in fiscal year 2022 from 36% in fiscal year 2021, resulting in a decrease in gross margin of approximately 350 basis points to 60% in fiscal year 2022 from 64% in fiscal year 2021.
−Removed: Amortization of intangible assets increased to $141.6 million for fiscal year 2022, as compared to $100.7 million for fiscal year 2021.
−Removed: Amortization of intangible assets from our 2021 acquisitions amounted to $88.5 million for fiscal year 2022.
−Removed: The amortization of purchase accounting adjustments to record the inventory from certain acquisitions added an incremental expense of $45.3 million for fiscal year 2022, as compared to $35.2 million for fiscal year 2021.
−Removed: Other purchase accounting adjustments added an incremental expense of $6.2 million for fiscal year 2022, of which $5.6 million was acquisition-related stock compensation and $0.6 million was increased depreciation on property, plant and equipme nt.
−Removed: The overall decrease in gross margin was partially offset by a favorable shift in product mix, pricing actions and service productivity.
+Added: Cost of revenue for fiscal year 2023 was $1,210.9 million, as compared to $1,322.0 million for fiscal year 2022, a decrease of approximately $111.1 million, or 8%.
+Added: As a percentage of revenue, cost of revenue increased to 44% in fiscal year
+Added: 2023 from 40% in fiscal year 2022, resulting in a decrease in gross margin of approximately 411 basis points to 56% in fiscal year 2023 from 60% in fiscal year 2022 due to lower COVID-19 revenue and an unfavorable shift in product mix, partially offset by pricing actions.
+Added: The amortization of purchase accounting adjustments to record the inventory from certain acquisitions added an incremental expense of $45.3 million for fiscal year 2022.
+Added: Stock compensation expense related to awards given to BioLegend employees post-acquisition added an incremental expense of $2.8 million for fiscal year 2023, as compared to $5.6 million for fiscal year 2022.
+Added: The above decreases were partially offset by an increase in a mortization of intangible assets which was $147.6 million for fiscal year 2023, as compared to $141.6 million for fiscal year 2022.
Selling, General and Administrative Expenses
−Removed: Selling, general and administrative expenses for fiscal year 2022 were $1,025.5 million, as compared to $975.2 million for fiscal year 2021, an increase of approximately $50.3 million, or 5%.
+Added: Selling, general and administrative expenses for fiscal year 2023 were $1,022.6 million, as compared to $1,025.5 million for fiscal year 2022, a decrease of approximately $3.0 million, or 0.3%.
As a percentage of revenue, selling, general and administrative expenses increased to 37% in fiscal year 2023 from 31% in fiscal year 2022.
−Removed: Amortization of intangible assets increased to $229.1 million for fiscal year 2022, as compared to $155.9 million for fiscal year 2021.
−Removed: Amortization of intangible assets from our 2021 acquisitions amounted to $135.3 million for fiscal year 2022.
−Removed: Acquisition and divestiture-related expenses added an incremental expense of $28.9 million for fiscal year 2022, of which $15.6 million was acquisition-related stock compensation, as compared to acquisition and divestiture-related expenses increasing expenses by $59.7 million for fiscal year 2021, of which $3.9 million was acquisition-related stock compensation.
−Removed: Purchase accounting adjustments decreased expenses by $1.2 million for fiscal year 2022, resulting from a $1.4 million change in contingent consideration, partially offset by $0.2 million in increased depreciation on property, plant and equipment, as compared to purchase accounting adjustments increasing expenses by $2.9 million for fiscal year 2021, which was attributable to change in contingent consideration.
−Removed: Asset impairment costs added an incremental expense of $3.9 million for fiscal year 2021.
−Removed: Legal costs for significant litigation matters and settlements, net of reversals, decreased expenses by $0.6 million for fiscal year 2022.
−Removed: In addition to the above items, the increase in selling, general and administrative expenses was primarily the result of costs related to investments in people, digital capabilities, innovation, and recent acquisitions.
+Added: Amortization of intangible assets decreased and was $217.5 million for fiscal year 2023, as compared to $229.1 million for fiscal year 2022.
+Added: Purchase accounting adjustments added an incremental expense of $4.3 million for fiscal year 2023, which primarily consisted of a change in contingent consideration, as compared to decreasing expenses by $1.2 million for fiscal year 2022.
+Added: Legal costs for significant litigation matters and settlements, net of reversals, were minimal for fiscal year 2023, as compared to decreasing expenses by $0.6 million for fiscal year 2022.
+Added: Acquisition and divestiture-related expenses, which primarily consisted of rebranding, legal and integration costs and stock compensation expense related to the awards given to BioLegend employees post-acquisition, added an incremental expense of $62.0 million for fiscal year 2023, as compared to $28.9 million for fiscal year 2022.
+Added: Costs for significant environmental matters also added an incremental expense of $2.5 million for fiscal year 2023.
+Added: Restructuring and other, net, increased and was $26.6 million for fiscal year 2023, as compared to $13.6 million for fiscal year 2022.
+Added: Excluding the factors above, the net decrease in selling, general and administrative expenses was the result of cost containment and productivity initiatives.
Research and Development Expenses
−Removed: Research and development expenses for fiscal year 2022 were $221.6 million, as compared to $200.3 million for fiscal year 2021, an increase of $21.3 million, or 11%.
+Added: Research and development expenses for fiscal year 2023 were $216.6 million, as compared to $221.6 million for fiscal year 2022, a decrease of $5.0 million, or 2%.
As a percentage of revenue, research and development expenses increased to 8% in fiscal year 2023 from 7% in fiscal year 2022.
−Removed: Stock compensation related to our acquisitions added an incremental expense of $5.4 million in fiscal year 2022, as compared to $1.4 million for fiscal year 2021.
−Removed: Purchase accounting adjustments for depreciation on property, plant and equipment added an incremental expense of $0.2 million in fiscal year 2022, as compared to $0.1 million for fiscal year 2021.
−Removed: Excluding the factors above, the net increase in research and development
−Removed: expenses was due to timing of investments in new non-COVID-19 product development, partially offset by a decrease in COVID-19 related research and development expenses.
+Added: The decrease in research and development expenses was primarily driven by a cost containment and productivity initiatives, as well as a decrease in stock compensation expense related to awards given to BioLegend employees post-acquisition, which was an expense of $4.3 million in fiscal year 2023, as compared to $5.4 million for fiscal year 2022.
+Added: The decreased expenses were partially offset by our investments in new product development.
Interest and Other Expense, Net
6 unchanged sentences
33,921 15,754
−Removed: Other components of net periodic pension credit
−Removed: (33,158) (37,385)
−Removed: Other expense, net 7,900 3,358
+Added: Other components of net periodic pension cost (credit) 19,006 (33,158)
+Added: Foreign exchange losses and other expense, net 37,977 7,900
Total interest and other expense, net $ 117,586 $ 90,862
−Removed: The increase of $36.0 million in interest and other expense, net, in fiscal year 2022 as compared to fiscal year 2021 was largely due to a change in fair value of financial securities of $15.8 million in fiscal year 2022 as compared to $(11.0) million in fiscal year 2021, an increase of $1.8 million in interest expense and $4.5 million in other expense, net in fiscal year 2022 and a lower net pension credit of $33.2 million in fiscal year 2022 as compared to $37.4 million in fiscal year 2021.
+Added: The increase of $26.7 million in interest and other expense, net, in fiscal year 2023 as compared to fiscal year 2022 was primarily due to an increase in other components of net periodic pension cost of $52.2 million, an increase in foreign exchange losses and other expense, net of $30.1 million and an increase in the change in fair value of financial securities of $18.2 million.
+Added: Other components of net periodic pension cost increased due to the decreases in the applicable discount rates.
+Added: Foreign exchange losses and other expense, net, increased primarily due to a foreign exchange loss of $24.0 million for the fiscal year 2023 related to the cash proceeds from the sale of the Business that were held offshore.
+Added: These increases in interest and other expense, net, were partially offset by an increase in interest income of $68.5 million and a decrease of $5.1 million in interest expense.
+Added: Interest income increased due to an increase in investments and higher interest rates.
+Added: Interest expense decreased due to $3.7 million of debt extinguishment income for the fiscal year 2023, as compared to $2.9 million of debt extinguishment income for the fiscal year 2022, as well as a result of an overall decrease in debt.
A more complete discussion of our liquidity is set forth below under the heading “Liquidity and Capital Resources.”
1 unchanged sentence
The effective tax rates on continuing operations were 1.9% and 21.3% for fiscal years 2023 and 2022, respectively.
−Removed: Certain of our subsidiaries have, at various times, been granted tax relief in their respective countries, resulting in lower income taxes than would otherwise be the case under statutory tax rates.
+Added: The lower than expected 2023 tax rate will not repeat in 2024.
A reconciliation of income tax expense at the U.S.
6 unchanged sentences
State income taxes, net (265) 7,820
+Added: Impact of rate changes (12,795) —
Prior year tax matters 3,971 (10,160)
1 unchanged sentence
General business tax credits (4,718) (7,132)
+Added: Transfer pricing matters (6,725) —
Change in valuation allowance 6,772 4,964
−Removed: Rate change on long term intangibles — 14,031
Effect of foreign repatriations (4,737) (4,940)
1 unchanged sentence
Total $ 3,473 $ 139,161
−Removed: The variation in our effective tax rate for fiscal year 2022 is primarily affected by the accrual of $20.5 million related to a change in tax status of a certain foreign subsidiary.
−Removed: During fiscal year 2021, we also recognized $37.1 million in U.S.
−Removed: federal, U.S.
−Removed: state and non-U.S.
−Removed: taxes related to foreign earnings that we no longer considered indefinitely reinvested.
−Removed: During fiscal year 2022, we adjusted these estimates and recognized a net benefit of $4.9 million relative to our position to permanently reinvest those foreign earnings.
−Removed: We also recognized $1.1 million of benefit in fiscal year 2022 derived from the tax holiday in Singapore.
−Removed: We recognized $18.2 million in fiscal year 2021 of benefits derived from tax holidays in China and Singapore.
−Removed: The effect of these benefits, derived from tax holidays, on basic and diluted earnings per share for fiscal year 2022 was $0.01 and $0.01, respectively, and for fiscal year 2021 was $0.16 and $0.16, respectively.
−Removed: The tax holiday in China is renewed every three years.
−Removed: We expect to renew the tax holiday for one of our subsidiaries in China that is set to expire in fiscal year 2023.
+Added: Certain countries in which we have operations have adopted legislation or are expected to adopt legislation influenced by the OECD Pillar Two rules, which imposes a minimum tax rate of 15% among other requirements.
+Added: We will continue to evaluate the potential consequences of Pillar Two legislation on our effective tax rate as the legislation and related interpretations of OECD guidance continues to evolve.
Fiscal Year 2022 Compared to Fiscal Year 2021
−Removed: Revenue for fiscal year 2021 was $3.8 billion, as compared to $2.7 billion for fiscal year 2020, an increase of $1.2 billion, or 44%, w hich includes an approximate 11% increase in revenue attributable to acquisitions, and a 1% increase in revenue attributable to favorable changes in foreign exchange rates.
−Removed: The analysis in the remainder of this paragraph compares segment revenue for fiscal year 2021 as compared to fiscal year 2020 and includes the effect of foreign exchange rate fluctuations, and acquisitions and divestitures.
−Removed: The total increase in revenue reflects an increase in our Diagnostics segment revenue of $865.0 million, or 42%, due to increased demand for our COVID-19 product offerings resulting in an increase of $748.0 million in our immunodiagnostics revenue.
−Removed: Our Diagnostics segment revenue also increase d during fiscal year 2021 due to growth in our core product offerings resulting in an increase of $58.0 million in our reproductive health revenue and an increase of $59.0 million in our applied genomics revenue.
−Removed: Our Discovery & Analytical Solutions segment revenue increased by $301.1 million , or 50%, due to an increase in revenue in our life sciences market, particularly in the pharmaceutical and biotechnology markets.
−Removed: As a result of adjustments to deferred revenue related to certain acquisitions required by business combination rules, we did not recognize $2.6 million and $1.1 million of revenue for fiscal years 2021 and 2020, respectively, that otherwise would have been recorded by the acquired businesses during each of the respective periods.
−Removed: Cost of Revenue
−Removed: Cost of revenue for fiscal year 2021 was $1.4 billion, as compared to $933.1 million for fiscal year 2020, an increase of approximately $460.8 million, or 49%.
−Removed: As a percentage of revenue, cost of revenue increased to 36% in fiscal year 2021 from 35% in fiscal year 2020, resulting in a decrease in gross margin of approximately 138 basis points to 64% in fiscal year 2021 from 65% in fiscal year 2020.
−Removed: Amortization of intangible assets increased and was $100.7 million for fiscal year 2021, as compared to $51.4 million for fiscal year 2020.
−Removed: Amortization of intangible assets from our 2021 acquisitions amounted to $34.0 million for fiscal year 2021.
−Removed: The amortization of purchase accounting adjustments to record the inventory from certain acquisitions added an incremental expense of $35.2 million for fiscal year 2021, as compared to $1.8 million for fiscal year 2020.
−Removed: Other purchase accounting adjustments added an incremental expense of $1.8 million in fiscal year 2021, of which $1.6 million was acquisition-related stock compensation and $0.2 million was increased depreciation on property, plant and equipment.
−Removed: Asset impairment was $7.9 million for fiscal year 2020.
−Removed: The overall decrease in gross margin was partially offset by a favorable shift in product mix and service productivity.
−Removed: Selling, General and Administrative Expenses
−Removed: Selling, general and administrative expenses for fiscal year 2021 were $975.2 million, as compared to $716.5 million for fiscal year 2020, an increase of approximately $258.7 million, or 36%.
−Removed: As a percentage of revenue, selling, general and administrative expenses decreased to 25% in fiscal year 2021 from 27% in fiscal year 2020.
−Removed: Amortization of intangible assets increased to $155.9 million for fiscal year 2021, as compared to $109.6 million for fiscal year 2020.
−Removed: Amortization of intangible assets from our 2021 acquisitions amounted to $37.2 million for fiscal year 2021.
−Removed: Acquisition and divestiture-related expenses added an incremental expense of $59.7 million for fiscal year 2021, of which $3.9 million was acquisition-related stock compensation, as compared to acquisition and divestiture-related expenses increasing expenses by $4.3 million for fiscal year 2020.
−Removed: Purchase accounting adjustments added an incremental expense of $2.9 million for fiscal year 2021, of which $2.8 million was change in contingent consideration and $0.1 million was increased depreciation on property, plant and equipment, as compared to purchase accounting adjustments increasing expenses by $3.5 million for fiscal year 2020, which was attributable to change in contingent consideration.
−Removed: Asset impairment costs added an incremental expense of $3.9 million for fiscal year 2021.
−Removed: Legal costs for significant litigation matters and settlements were $5.9 million for fiscal year 2020.
−Removed: Costs for significant environmental matters were $5.2 million for fiscal year 2020.
−Removed: In addition to the above items, the increase in selling, general and administrative expenses was primarily the result of costs related to investments in people, digital capabilities and innovation, and recent acquisitions amplified by pandemic-related cost controls and disruptions in the prior year.
−Removed: Research and Development Expenses
−Removed: Research and development expenses for fiscal year 2021 were $200.3 million, as compared to $146.4 million for fiscal year 2020, an increase of $53.9 million, or 36.8%.
−Removed: Research and development expenses from our 2021 acquisitions were $24.0 million.
−Removed: As a percentage of revenue, research and development expenses decreased and were 5.2% for fiscal year 2021, as compared to 5.5% for fiscal year 2020.
−Removed: Stock compensation related to our acquisitions added an incremental expense of $1.4 million in fiscal year 2021.
−Removed: Purchase accounting adjustments for depreciation on property, plant and equipment added an incremental expense of $0.1 million in fiscal year 2021.
−Removed: The increase in research and development expenses was driven by our investments in new product development.
−Removed: Interest and Other Expense, Net
−Removed: Interest and other expense, net, consisted of the following for the fiscal years ended:
−Removed: 2022 January 3,
−Removed: (in thousands)
−Removed: Interest income $ (2,241) $ (1,010)
−Removed: Interest expense including costs of bridge financing 102,128 49,712
−Removed: Change in fair value of financial securities
−Removed: (10,985) (35)
−Removed: Other components of net periodic pension (credit) cost
−Removed: (37,385) 13,819
−Removed: Other expense, net 3,358 4,715
−Removed: Total interest and other expense, net $ 54,875 $ 67,201
−Removed: The decrease of $12.3 million in interest and other expense, net, in fiscal year 2021 as compared to fiscal year 2020 was largely due to a net pension credit of $37.4 million in fiscal year 2021 as compared to a net pension cost of $13.8 million in fiscal year 2020, a decrease in other expense, net of $1.4 million and a change in fair value of financial securities of $11.0 million, partially offset by an increase of $52.4 million in interest expense in fiscal year 2021.
−Removed: The increase of $52.4 million in interest expense in fiscal year 2021 was the result of $23.4 million of costs of bridge financing and debt pre-issuance hedges that were recognized in fiscal year 2021 and interest expense from new debt in fiscal year 2021.
−Removed: A more complete discussion of our liquidity is set forth below under the heading “Liquidity and Capital Resources.”
−Removed: Provision for Income Taxes
−Removed: The effective tax rates on continuing operations were 26.1% and 21.2% for fiscal years 2021 and 2020, respectively.
−Removed: Certain of our subsidiaries have, at various times, been granted tax relief in their respective countries, resulting in lower income taxes than would otherwise be the case under statutory tax rates.
−Removed: A reconciliation of income tax expense at the U.S.
−Removed: federal statutory income tax rate to the recorded tax provision is as follows for the fiscal years ended:
−Removed: 2022 January 3,
−Removed: (In thousands)
−Removed: Tax at statutory rate $ 252,752 $ 168,015
−Removed: rate differential, net (33,847) (29,155)
−Removed: taxation of multinational operations 7,964 11,468
−Removed: State income taxes, net 36,832 13,249
−Removed: Prior year tax matters 1,850 5,532
−Removed: Effect of stock compensation (2,187) (8,148)
−Removed: General business tax credits (2,715) (2,145)
−Removed: Change in valuation allowance (179) (369)
−Removed: Rate change on long term intangibles 14,031 —
−Removed: Effect of foreign operations 37,147 —
−Removed: Foreign consolidations — 15,222
−Removed: Other, net 2,498 (4,157)
−Removed: Total $ 314,146 $ 169,512
−Removed: The variation in our effective tax rate for fiscal year 2021 is primarily affected by the recognition of $37.1 million in U.S.
−Removed: federal, U.S.
−Removed: state and non-U.S.
−Removed: taxes related to foreign earnings that we no longer considered indefinitely reinvested.
−Removed: We also recognized $18.2 million in fiscal year 2021 and $12.7 million in fiscal year 2020 of benefits derived from tax holidays in China and Singapore.
−Removed: The effect of these benefits, derived from tax holidays, on basic and diluted earnings per share for fiscal year 2021 was $0.16 and $0.16, respectively, and for fiscal year 2020 was $0.11 and $0.11, respectively.
−Removed: Business Combinations
−Removed: Acquisitions in fiscal year 2022
−Removed: During fiscal year 2022, we completed the acquisition of two businesses for aggregate consideration of $13.3 million.
−Removed: Identifiable definite-lived intangible assets, such as core technology, acquired as part of these acquisitions had a weighted average amortization period of 5 years.
−Removed: Acquisitions in fiscal year 2021
−Removed: Acquisition of BioLegend, Inc.
−Removed: In fiscal year 2021, we completed the acquisition of BioLegend, Inc.
−Removed: ( “ BioLegend ” ) for an aggregate consideration of $5.7 billion.
−Removed: BioLegend’s revenue and net loss for the period from the acquisition date to January 2, 2022 were $91.7 million and $25.8 million, respectively.
−Removed: Other acquisitions in 2021.
−Removed: During fiscal year 2021, we also completed the acquisition of seven other businesses for aggregate consideration of $1.2 billion.
−Removed: The acquired businesses include Oxford Immunotec Global PLC for a total consideration of $590.9 million and Nexcelom Bioscience Holdings, LLC for a total consideration of $267.3 million, and five other businesses, which were acquired for a total consideration of $318.6 million.
−Removed: See Note 3, Business Combinations, in the Notes to Consolidated Financial Statements for a detailed discussion of our acquisitions.
−Removed: Reporting Segment Results of Continuing Operations
−Removed: Discovery & Analytical Solutions
+Added: For a discussion of our results of operations for fiscal year 2022 as compared to fiscal year 2021, see Item 7, Management ’ s Discussion and Analysis of Financial Condition and Results of Operations in our annual report on Form 10-K for the fiscal year ended January 1, 2023 filed with the Securities and Exchange Commission on March 1, 2023.
+Added: Reporting Segment Results of Continu ing Operations
Fiscal Year 2023 Compared to Fiscal Year 2022
−Removed: Revenue for fiscal year 2022 was $1,292.9 million, as compared to $897.7 million for fiscal year 2021, an increase of $395.2 million, or 44%, which includes an approximate 32% increase in revenue attributable to acquisitions and a 4% decrease in revenue attributable to unfavorable changes in foreign exchange rates.
−Removed: Revenue from our 2021 acquisitions contributed $308.7 million to the Discovery & Analytical Solutions segment revenue during fiscal year 2022.
−Removed: The increase in revenue in our Discovery & Analytical Solutions segment was a result of an increase in revenue in our life sciences market, particularly in the pharmaceutical and biotechnology markets.
−Removed: Segment operating income for fiscal year 2022 was $503.2 million, as compared to $281.6 million for fiscal year 2021, an increase of $221.6 million, or 79%.
−Removed: Segment operating margin increased 750 basis points in fiscal year 2022, as compared to fiscal year 2021, primarily due to pricing actions, product mix and higher sales volume.
+Added: Revenue for fiscal year 2023 was $1,459.1 million, as compared to $2,019.7 million for fiscal year 2022, a decrease of $560.7 million, or 28%, which includes an approximate 1% decrease in revenue attributable to favorable changes in foreign exchange rates.
+Added: T he decrease in our Diagnostics segment revenue during fiscal year 2023 was due to a decrease of $380.3 million in immunodiagnostics revenue, a decrease of $165.2 million in applied genomics revenue and a decrease of $15.3 million in reproductive health revenue.
+Added: Segment operating income from continuing operations for fiscal year 2023 was $320.9 million, as compared to $782.0 million for fiscal year 2022, a decrease of $461.1 million, or 59%.
+Added: Segment operating margin decreased 1,670 basis points in fiscal year 2023, as compared to fiscal year 2022, primarily due to lower COVID-19 product sales volume and an unfavorable shift in product mix, partially offset by cost controls .
Fiscal Year 2022 Compared to Fiscal Year 2021
−Removed: Revenue for fiscal year 2021 was $897.7 million, as compared to $596.6 million for fiscal year 2020, an increase of $301.1 million, or 50%, which includes an approximate 33% increase in revenue attributable to acquisitions and a 1% increase in revenue attributable to favorable changes in foreign exchange rates.
−Removed: The increase in revenue in our Discovery & Analytical Solutions segment was a result of an increase in revenue in our life sciences market, particularly in the pharmaceutical and biotechnology markets.
−Removed: Segment operating income for fiscal year 2021 was $281.6 million, as compared to $129.2 million for fiscal year 2020, an increase of $152.4 million, or 118%.
−Removed: Segment operating margin increased 970 basis points in fiscal year 2021, as compared to fiscal year 2020, primarily due to higher sales volume, partially offset by investments in new product development and growth initiatives.
+Added: For a discussion of our results of operations for fiscal year 2022 as compared to fiscal year 2021, see Item 7, Management ’ s Discussion and Analysis of Financial Condition and Results of Operations in our annual report on Form 10-K for the fiscal year ended January 1, 2023 filed with the Securities and Exchange Commission on March 1, 2023.
+Added: Life Sciences
Fiscal Year 2023 Compared to Fiscal Year 2022
−Removed: Revenue for fiscal year 2022 was $2,019.7 million, as compared to $2,932.7 million for fiscal year 2021, a decrease of $913.0 million, or 31%, which includes an appro ximate 2% increase in revenue attributable to acquisitions and a 4% decrease in revenue attributable to unfavorable changes in foreign exchange rates.
−Removed: Revenue from our 2021 acquisitions contribute d $58.1 million to our Dia gnostics segment revenue during fiscal year 2022.
−Removed: The decrease in our Diagnostics segment revenue during fiscal year 2022 was primarily driven by decreased demand for our COVID-19 product offerings, partially offset by an increase in our core product offerings resulting in a decrease of $689.0 million in our immunodiagnostics revenue, a decrease of $225.8 million in our applied genomics revenue, and an increase of $1.7 million in our reproductive health revenue.
−Removed: Segment operating income from continuing operations for fiscal year 2022 was $782.0 million, as compared to $1,432.8 million for fiscal year 2021, a decrease of $650.8 million, or 45%.
−Removed: Segment operating margin decreased 1,020 basis points in fiscal year 2022, as compared to fiscal year 2021, primarily due to lower sales volume and product mix, partially offset by cost controls.
+Added: Revenue for fiscal year 2023 was $1,292.3 million, as compared to $1,292.9 million for fiscal year 2022, a decrease of $0.6 million, or less than 1% .
+Added: The decrease in our Life Sciences segment revenue was driven by a decrease of $24.3 million in instruments revenue and a decrease of $17.7 million in software revenue, partially offset by an increase of $41.4 million in reagents revenue.
+Added: Segment operating income for fiscal year 2023 was $489.3 million, as compared to $503.2 million for fiscal year 2022, a decrease of $13.9 million, or 3%.
+Added: Segment operating margin decreased 100 basis points in fiscal year 2023, as compared to fiscal year 2022, primarily due to an unfavorable shift in product mix, partially offset by pricing actions.
Fiscal Year 2022 Compared to Fiscal Year 2021
−Removed: Revenue for fiscal year 2021 was $2,932.7 million , as compared to $2,067.7 million for fiscal year 2020, an increase of $865.0 million, or 42%, which includes an approximate 5% increase in revenue attributable to acquisitions and a 2% increase in revenue attributable to favorable changes in foreign exchange rates.
−Removed: The increase in our Diagnostics segment revenue during fiscal year 2021 was primarily driven by increased demand for our COVID-19 product offerings resulting in an increase of $748.0 million in our immunodiagnostics revenue.
−Removed: Our Diagnostics segment revenue also increased during fiscal year 2021 due to growth in our core product offerings resulting in an increase of $58.0 million in our reproductive health revenue and an increase of $59.0 million in our applied genomics revenue.
−Removed: Segment operating income for fiscal year 2021 was $1,432.8 million, as compared to $1,010.4 million for fiscal year 2020, an increase of $422.4 million, or 42%.
−Removed: Segment operating margin was flat in fiscal year 2021, as compared to fiscal year 2020, primarily due to higher sales volume and favorable product mix, offset by increased investments in new product development and growth initiatives.
+Added: For a discussion of our results of operations for fiscal year 2022 as compared to fiscal year 2021, see Item 7, Management ’ s Discussion and Analysis of Financial Condition and Results of Operations in our annual report on Form 10-K for the fiscal year ended January 1, 2023 filed with the Securities and Exchange Commission on March 1, 2023.
Discontinued Operations
−Removed: In August 2022, we entered into a Master Purchase and Sale Agreement (the “Purchase Agreement”) with Polaris Purchaser, L.P.
−Removed: (the “Purchaser”), a Delaware limited partnership owned by funds managed by affiliates of New Mountain Capital L.L.C.
−Removed: (the “Sponsor”), under which we agreed to sell to the Purchaser certain assets and the equity interests of certain entities constituting our Analytical, Food and Enterprise Services businesses (the “Business”) (as further defined in the Purchase Agreement), for cash consideration of up to approximately $2.45 billion and the Purchaser’s assumption of certain liabilities relating to the Business (collectively, the “Transaction”).
−Removed: Approximately $2.30 billion of the purchase price will be payable at closing, subject to certain customary adjustments, which includes $75.0 million in deferred payments tied to the transfer of the PerkinElmer brand and related trademarks to the Purchaser (which may be completed within 24 months following the date of the closing at our election).
−Removed: The Purchase Agreement also provides for potential post-closing payments totaling up to $150.0 million, which are contingent on the exit valuation the Sponsor and its affiliated funds receive on a sale or other capital events related to the Business.
−Removed: The Transaction is expected to close in the first quarter of fiscal year 2023, subject to regulatory approvals and other customary closing conditions.
−Removed: The Business had been recorded in the Discovery & Analytical Solutions segment.
−Removed: The sale of the Business represents a strategic shift that will have a major effect on our operations and financial statements.
−Removed: Accordingly, we have classified the assets and liabilities related to the Business as assets and liabilities of discontinued operations in our consolidated balance sheets and its results of operations are classified as income from discontinued operations in our consolidated statements of operations.
−Removed: Financial information in this report relating to the fiscal years ended January 2, 2022 and January 3, 2021 has been retrospectively adjusted to reflect this discontinued operation.
−Removed: The summary pre-tax operating results of the discontinued operations, were as follows:
−Removed: January 1, 2023 January 2, 2022 January 3, 2021
+Added: On March 13, 2023, we completed the previously announced sale (the “Closing”) of certain assets and the equity interests of certain entities constituting our Applied, Food and Enterprise Services businesses (the “Business”) to PerkinElmer Topco, L.P.
+Added: (formerly known as Polaris Purchaser, L.P.) (the “Purchaser”), a Delaware limited partnership owned by funds managed by affiliates of New Mountain Capital L.L.C.
+Added: (the “Sponsor”), for an aggregate purchase price of up to $2.45 billion .
+Added: We received approximately $2.13 billion in cash proceeds, before transaction costs and subject to post-closing adjustments.
+Added: We are entitled to an additional $75.0 million in proceeds as consideration for our ceasing the use of the PerkinElmer brand and related trademarks and transferring them to the Purchaser.
+Added: This consideration is expected to be received in installments through the first half of 2025.
+Added: The discounted value of the $75.0 million was measured as $65.2 million and was included in the proceeds.
+Added: In addition, we are entitled to additional consideration of up to $150.0 million that is contingent on the exit valuation the Sponsor and its affiliated funds receive on a sale or other capital events related to the Business.
+Added: The fair value of this element of consideration was determined to be $15.9 million and was included in the proceeds at Closing.
+Added: We also recorded a receivable of approximately $160.2 million as of December 31, 2023 for post-closing adjustments that are expected to be settled with the Purchaser during fiscal year 2024.
+Added: The final amount of the receivable related to the post-closing adjustments is subject to change.
+Added: The Business is reported for all pe riods as discontinued operations in our consolidated financial statements.
+Added: The following table summarizes the results of discontinued operations which are presented as income from discontinued operations in our consolidated statements of operations:
+Added: December 31, 2023 January 1, 2023 January 2, 2022
(In thousands)
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Research and development expenses 10,434 64,605 74,632
−Removed: Operating income 68,409 73,921 111,308
+Added: Operating (loss) income (37,942) 68,409 73,921
+Added: Other income:
+Added: Gain on sale 811,472 — —
Other (expense) income, net (49) 5,195 2,383
+Added: Total other income 811,423 5,195 2,383
Income from discontinued operations before income taxes 773,481 73,604 76,304
−Removed: During fiscal year 2022, we recognized $69.4 million of divestiture-related costs in selling, general and administrative expenses in discontinued operations, as compared to $7.5 million during fiscal year 2021, an increase of $61.9 million.
−Removed: The increase in selling, general and administrative expenses was partially offset by decreased amortization expense and acquisition-related costs.
−Removed: During fiscal year 2022, we recognized $8.2 million of amortization expense in selling, general and administrative expenses in discontinued operations, as compared to $19.3 million during fiscal year 2021, a decrease of $11.1 million, as we suspended the amortization of the intangible assets related to the Business during fiscal year 2022 when it was reclassified into discontinued operations.
−Removed: During fiscal year 2022, we recognized $6.4 million of incentive award associated with one of the Company’s acquisitions in discontinued operations, as compared to $14.3 million during fiscal year 2021, a decrease of $7.8 million.
−Removed: During fiscal year 2021, divestiture-related costs in selling, general and administrative expenses in discontinued operations increased by $7.5 million as compared to fiscal year 2020.
−Removed: In addition, payroll and employee benefits and acquisition-related costs pertaining to an incentive award associated with one of the Company’s acquisitions increased by $20.4 million and $9.6 million, respectively, as compared to fiscal year 2020.
+Added: Provision for income tax 259,890 17,101 22,583
+Added: Income from discontinued operations $ 513,591 $ 56,503 $ 53,721
+Added: The results of discontinued operations during fiscal year 2023 include the results of the Business through March 13, 2023.
+Added: During fiscal year 2023, we recognized an increase in provision for income taxes of $242.8 million, primarily related to the taxes on the gain on sale of the Business.
+Added: During fiscal year 2023, we recognized divestiture-related costs in gain on sale of $37.1 million.
+Added: During fiscal year 2023, we recognized $36.0 million of divestiture-related costs in selling, general and administrative expenses in discontinued operations, as compared to $69.4 million during fiscal year 2022.
+Added: For a discussion of our discontinued operations for fiscal year 2022 as compared to fiscal year 2021, see Item 7, Management ’ s Discussion and Analysis of Financial Condition and Results of Operations in our annual report on Form 10-K for the fiscal year ended January 1, 2023 filed with the Securities and Exchange Commission on March 1, 2023.
Liquidity and Capital Resources
3 unchanged sentences
However, we expect to use external sources to satisfy the balance of our debt when due, any larger acquisitions and other long-term liabilities, such as contributions to our postretirement benefit plans.
−Removed: The proposed sale of the Business classified as discontinued operations is expected to close in the first quarter of fiscal year 2023, which we expect will generate approximately $2.2 billion of proceeds to us.
−Removed: We expect to use these proceeds for funding upcoming debt maturities, opportunistic share repurchases and continued strategic and value-creating acquisitions.
+Added: The sale of the Business generated approximately $2.13 billion in cash proceeds.
+Added: We have used and expect to continue to use these proceeds for a combination of satisfying upcoming debt maturities, opportunistic share repurchases and continued strategic and value creating acquisitions.
We and our subsidiaries and affiliates may from time to time, in our sole discretion, purchase, repay, redeem or retire any of our outstanding debt securities (including any publicly issued debt securities), in privately negotiated or open market transactions, by tender offer or otherwise, or extend or refinance any of our outstanding indebtedness.
+Added: Additionally, we purchased U.S.
+Added: treasury securities whose proceeds upon maturity are intended to be utilized to repay outstanding debt securities, including our 0.850% senior unsecured notes due in September 2024 (the “2024 Notes”), which had $711.5 million in outstanding principal as of December 31, 2023.
Principal factors that could affect the availability of our internally generated funds include:
10 unchanged sentences
Operating Activities.
−Removed: Net cash provided by continuing operations was $672.5 million for fiscal year 2022, as compared to $1,330.2 million for fiscal year 2021, a decrease of $657.7 million.
−Removed: The cash provided by operating activities for fiscal year 2022 was principally a result of income from continuing operations of $512.7 million, adjustments for non-cash charges aggregating to $422.8 million, including depreciation and amortization of $427.0 million, and a net cash decrease in working capital of $263.0 million.
−Removed: During fiscal year 2022, we contributed $6.6 million, in the aggregate, to pension plans outside of the United States.
+Added: Net cash provided by continuing operations was $279.4 million for fiscal year 2023, as compared to $672.5 million for fiscal year 2022, a decrease of $393.1 million, primarily due to lower profitability from a decreased demand in COVID-19 product offerings and more cash used in working capital during fiscal year 2023 as compared to fiscal year 2022.
+Added: The cash provided by operating activities for fiscal year 2023 was principally a result of income from continuing operations of $179.5 million, adjustments for non-cash charges aggregating to $491.2 million, including depreciation and amortization of $431.8 million, and a net cash decrease in working capital of $391.3 million, primarily due to trailing divestiture-related liabilities with expected recovery from the post-closing adjustments related to the sale of the Business.
+Added: During fiscal year 2023, we contributed $10.0 million to our pension plan in the United States and $7.6 million, in the aggregate, to pension plans outside of the United States.
Investing Activities.
−Removed: Net cash used in the investing activities of our continuing operations was $116.9 million for fiscal year 2022, as compared to $4,089.8 million for fiscal year 2021, a decrease of $3,972.9 million.
−Removed: For fiscal year 2022, we used $7.5 million of net cash for acquisitions, as compared to $3,982.2 million used in fiscal year 2021.
−Removed: Capital expenditures for fiscal year 2022 were $85.6 million, primarily for manufacturing equipment and other capital equipment purchases, as compared to $86.0 million for fiscal year 2021.
−Removed: During fiscal year 2022, we purchased investments amounting to $47.2 million as compared to $23.1 million in fiscal year 2021.
−Removed: These items were partially offset by $14.5 million in proceeds from disposition of businesses and assets in fiscal year 2022, as compared to $1.5 million in fiscal year 2021.
−Removed: In addition, proceeds from notes receivable were $8.9 million in fiscal year 2022 .
−Removed: Proceeds from surrender of life insurance policies were $0.1 million in fiscal year 2021.
+Added: Net cash used in the investing activities of our continuing operations was $761.2 million for fiscal year 2023, as compared to $116.9 million for fiscal year 2022, an increase of $644.3 million.
+Added: During fiscal year 2023, we made purchases of investments in U.S.
+Added: treasury securities totaling $1,221.6 million.
+Added: For fiscal year 2023, the net cash used for capital expenditures and acquisitions were $81.4 million and $2.1 million, respectively, as compared to $85.6 million and $7.5 million, respectively, for fiscal year 2022.
+Added: The capital expenditures in each period were primarily for manufacturing, software, and other capital equipment purchases.
+Added: During fiscal year 2023, purchases of investments were $6.3 million, as compared to $47.2 million for fiscal year 2022.
+Added: The cash used in investing activities during fiscal year 2023 was partially offset by proceeds from
+Added: maturity of U.S.
+Added: treasury securities totaling $550.0 million, and proceeds from disposition of businesses and assets totaling $0.2 million.
+Added: The cash used in investing activities during fiscal year 2022 was partially offset by proceeds from notes receivable totaling $8.9 million, and proceeds from disposition of businesses and assets totaling $14.5 million.
Financing Activities.
−Removed: Net cash used in the financing activities of our continuing operations was $661.8 million for fiscal year 2022, as compared to net cash provided by the financing activities of our continuing operations of $2,941.7 million for fiscal year 2021, an increase of $3,603.5 million in net cash used in financing activities.
−Removed: The cash used in financing activities during fiscal year 2022 was primarily a result of payments of borrowings, repurchases of our common stock, payments of dividends and settlement of cash flow hedges.
−Removed: During fiscal year 2022, we made net payments on our borrowings of $559.2 million, as compared to net proceeds from borrowin gs of $3,043.0 million duri ng fiscal year 2021.
−Removed: The changes reflect financing transactions in fiscal year 2021 to finance acquisitions and to refinance borrowings as compared to paying down debt in fiscal year 2022, which we expect to continue throughout fiscal year 2023.
+Added: Net cash used in the financing activities of our continuing operations was $947.1 million for fiscal year 2023, as compared to $661.8 million for fiscal year 2022, an increase of $285.3 million.
+Added: During fiscal year 2023, we made net payments of $517.5 million on debts, as compared to $559.2 million during fiscal year 2022.
+Added: The changes in both periods reflect our intentions to pay down debt, which we expect to continue throughout fiscal year 2024.
During fiscal year 2023, we repurchased shares of our common stock for a total cost of $388.9 million, as compared to $80.6 million in fiscal year 2022.
−Removed: During fiscal year 2022, we paid $35.3 million in dividends as compared to $32.4 million for fiscal year 2021.
−Removed: We paid $0.8 million in settlement of hedges during fiscal year 2022 as compared to $4.5 million for fiscal year 2021.
−Removed: In addition, we paid $14.3 million for settlement of a swap and $2.2 million for acquisition-related contingent consideration in fiscal year 2021.
−Removed: The cash used in financing activities during fiscal year 2022 was partially offset by proceeds from the issuance of common stock under our stock plans of $14.1 million during fiscal year 2022, as compared to $25.1 million for fiscal year 2021.
+Added: We paid $35.0 million in dividends for fiscal year 2023, as compared to $35.3 million in fiscal year 2022.
+Added: We paid $10.1 million for acquisition-related contingent consideration during fiscal year 2023.
+Added: We paid $0.8 million in settlement of hedges in fiscal year 2022.
+Added: The cash used in financing activities during fiscal year 2023 was partially offset by proceeds from the issuance of common stock under our stock plans of $4.3 million during fiscal year 2023, as compared to $14.1 million in fiscal year 2022.
Fiscal Year 2022 Compared to Fiscal Year 2021
−Removed: Operating Activities.
−Removed: Net cash provided by continuing operations was $1,330.2 million for fiscal year 2021, as compared to $704.7 million for fiscal year 2020, an increase of $625.5 million.
−Removed: The cash provided by operating activities for fiscal year 2021 was principally a result of income from continuing operations of $889.4 million, adjustments for non-cash charges aggregating to $307.8 million, including depreciation and amortization of $311.4 million, and a net cash increase in working capital of $133.0 million.
−Removed: During fiscal year 2021, $1.7 million of contingent consideration payments were included in operating activities.
−Removed: During fiscal year 2021, we contributed $6.9 million, in the aggregate, to pension plans outside of the United States and $20.0 million to our defined benefit pension plan in the United States.
−Removed: Investing Activities.
−Removed: Net cash used in the investing activities of our continuing operations was $4,089.8 million for fiscal year 2021, as compared to $490.6 million for fiscal year 2020, an increase of $3,599.2 million.
−Removed: For fiscal year 2021, we used $3,982.2 million of net cash for acquisitions, as compared to $411.5 million used in fiscal year 2020.
−Removed: Capital expenditures for fiscal year 2021 were $86.0 million, primarily for manufacturing equipment and other capital equipment purchases, as compared to $63.6 million for fiscal year 2020.
−Removed: During fiscal year 2021, we purchased investments amounting to $23.1 million as compared to $20.1 million in fiscal year 2020.
−Removed: These items were partially offset by $1.5 million in proceeds from disposition of businesses and assets in fiscal year 2021, as compared to $4.3 million in fiscal year 2020, and by proceeds from surrender of life insurance policies of $0.1 million in fiscal year 2021, as compared to $0.3 million in fiscal year 2020.
−Removed: Financing Activities.
−Removed: Net cash provided by the financing activities of our continuing operations was $2,941.7 million for fiscal year 2021, as compared to net cash used in the financing activities of our continuing operations of $202.9 million for fiscal year 2020, an increase of $3,144.5 million in net cash provided by financing activities.
−Removed: The cash provided by financing activities during fiscal year 2021 was primarily a result of net proceeds from borrowings and proceeds from the issuance of common stock under stock plans.
−Removed: During fiscal year 2021 , we had net proceeds from borrowings of $3,043.0 million, as compared to net payments on borrowings of $187.5 million duri ng fiscal year 2020 .
−Removed: The changes reflect financing transactions in fiscal year 2021 to finance acquisitions and to refinance borrowings as compared to paying down debt in fiscal year 2020.
−Removed: Proceeds from the issuance of common stock under our stock plans were $25.1 million during fiscal year 2021, as compared to $37.7 million for fiscal year 2020.
−Removed: The cash provided by financing activities during fiscal year 2021 was partially offset by repurchases of our common stock, payments of dividends, settlement of swaps, settlement of cash flow hedges and payments for acquisition-related contingent consideration.
−Removed: During fiscal year 2021, we repurchased shares of common stock for a total cost of $73.1 million, as compared to $6.9 million in fiscal year 2020.
−Removed: During fiscal year 2021, we paid $32.4 million in dividends as compared to $31.2 million for fiscal year 2020.
−Removed: During fiscal year 2021, we paid $14.3 million for settlement of a swap.
−Removed: We paid $4.5 million in settlement of hedges during fiscal year 2021 as compared to $4.6 million for fiscal year 2020.
−Removed: During fiscal year 2021, we paid $2.2 million for acquisition-related contingent consideration as compared to $10.4 million in fiscal year 2020.
+Added: For a discussion of our results of operations for fiscal year 2022 as compared to fiscal year 2021, see Item 7, Management ’ s Discussion and Analysis of Financial Condition and Results of Operations in our annual report on Form 10-K for the fiscal year ended January 1, 2023 filed with the Securities and Exchange Commission on March 1, 2023.
Borrowing Arrangements
−Removed: During fiscal year 2022, we repaid the full $500.0 million principal amount of the term loan facility.
−Removed: Since the beginning of the third quarter of fiscal year 2022, we have repurchased $32.9 million and $78.8 million in aggregate principal amount of our 0.550% senior unsecured notes due in September 2023 (the “2023 Notes” ) and 0.850% senior unsecured notes due in September 2024 (the “2024 Notes” ), respectively, in open market transactions.
−Removed: We expect to complete the repayment of the $467.1 million in outstanding 2023 Notes in fiscal year 2023.
−Removed: We expect to continue repurchasing outstanding 2024 Notes from time to time, subject to market conditions.
+Added: During fiscal year 2023, we paid in full $467.1 million of outstanding 0.550% senior unsecured notes that became due in September 2023.
+Added: Since the beginning of the third quarter of fiscal year 2022, we have repurchased $88.5 million in aggregate principal amount of our 2024 Notes.
+Added: At December 31, 2023, we had investments in U.S.
+Added: treasury securities with a carrying amount of $689.9 million whose proceeds upon maturity are intended to be utilized to repay the outstanding 2024 Notes.
See Note 13, Debt, in the Notes to Consolidated Financial Statements for a detailed discussion of our borrowing arrangements.
Our Board of Directors (our “Board”) declared a regular quarterly cash dividend of $0.07 per share in each quarter of fiscal years 2023, 2022 and 2021, resulting in an annual dividend rate of $0.28 per share.
−Removed: At January 1, 2023, we had accrued $8.8 million for a dividend declared in October 2022 for the fourth quarter of fiscal year 2022 that was paid in February 2023.
+Added: At December 31, 2023, we had accrued $8.6 million for a dividend declared in October 2023 for the fourth quarter of fiscal year 2023 that was paid in February 2024.
On January 25, 2024, we announced that our Board had declared a quarterly dividend of $0.07 per share for the first quarter of fiscal year 2024 that will be payable in May 2024.
−Removed: In the future, our Board may determine to reduce or eliminate our common stock dividend in order to fund investments for growth, repurchase shares or conserve capital resources.
+Added: In the future, our Board may determine to reduce or eliminate our common stock dividend in order to fund investments for growth, repurchase shares or conser ve capital resources.
Capital Expenditures
2 unchanged sentences
Other Potential Liquidity Considerations
−Removed: At January 1, 2023, we had cash and cash equivalents of $454.4 million, of which $385.4 million was held by our non-U.S.
+Added: At December 31, 2023, we had cash and cash equivalents of $913.2 million, of which $429.0 million was held by our non-U.S.
subsidiaries, and we had $1.49 billion of additional borrowing capacity available under a senior unsecured revolving credit facility.
−Removed: We had no other liquid investments at January 1, 2023.
−Removed: We utilize a variety of tax planning and financing strategies to ensure that our worldwide cash is available in the locations in which it is needed.
−Removed: We use our non-U.S.
−Removed: cash for needs outside of the United States including foreign operations,
−Removed: capital investments, acquisitions and repayment of debt.
−Removed: In addition, we transfer cash to the United States using nontaxable returns of capital, distributions of previously taxed income, as well as dividends, where the related income tax cost is managed efficiently.
−Removed: We have accrued tax expense on the unremitted earnings of foreign subsidiaries as required by the Tax Cuts and Jobs Act of 2017 (the “ Tax Act ” ) and where the foreign earnings are not considered permanently reinvested.
−Removed: In accordance with the Tax Act, we are making scheduled annual cash payments on our accrued transition tax.
−Removed: As of January 1, 2023, we evaluated our undistributed foreign earnings and identified approximately $879.0 million in earnings that we do not consider to be permanently reinvested.
−Removed: We have recorded a provision of approximately $15.8 million for taxes that would fall due when such earnings are repatriated.
−Removed: We began repatriating foreign earnings to the United States in the first quarter of fiscal year 2022 and expect to continue the repatriation in fiscal year 2023.
−Removed: There are no other undistributed
−Removed: foreign earnings and outside basis differences for which we have not provided for any taxes as these amounts continue to be indefinitely reinvested, and it is not practicable to estimate the amount of deferred tax liability that would be incurred.
+Added: We had no other liquid investments at December 31, 2023.
+Added: At December 31, 2023, we had investments in U.S.
+Added: treasury securities with a carrying amount of $689.9 million whose proceeds upon maturity are intended to be utilized to repay our outstanding 2024 Notes.
+Added: In connection with the sale of the Business, we are entitled to an additional $75.0 million in proceeds as consideration for our ceasing the use of the PerkinElmer brand and related trademarks and transferring them to the Purchaser.
+Added: This consideration is expected to be received in installments through the first half of 2025.
+Added: In addition, we have also recorded a receivable of approximately $160.2 million as of December 31, 2023 for post-closing adjustments related to the sale of the Business that is expected to be received during fiscal year 2024.
+Added: We use a variety of cash redeployment and financing strategies to ensure that our worldwide cash is available in the locations in which it is needed.
+Added: During the fiscal year ended December 31, 2023, we repatriated approximately $1.6 billion of foreign cash to the United States.
On July 22, 2022, our Board authorized us to repurchase shares of common stock for an aggregate amount up to $300.0 million under a stock repurchase program (the “Repurchase Program”).
−Removed: On July 22, 2022, the Repurchase Program was terminated by our Board and the Board authorized us to repurchase shares of common stock for an aggregate amount up to $300.0 million under a new stock repurchase program (the “ New Repurchase Program ” ).
−Removed: No shares remain available for repurchase under the Repurchase Program due to its termination.
−Removed: The New Repurchase Pro gram will expire on July 22, 2024 unless terminated earlier by our Board and may be suspended or discontinued at any time.
+Added: On April 27, 2023, the Repurchase Program was terminated by the Board and the Board authorized us to repurchase shares of common stock for an aggregate amount up to $600.0 million under a new stock repurchase program (the “New Repurchase Program”).
+Added: The New Repurchase Program will expire on April 26, 2025, unless terminated earlier by the Board and may be suspended or discontinued at any time.
During fiscal year 2023 , we repurchased 1,004,544 shares of common stock under the Repurchase Program for an aggregate cost of $131.3 million.
During fiscal year 2023 , we repurchased 2,159,985 shares of common stock under the New Repurchase Program for an aggregate cost of $244.6 million .
−Removed: As of January 1, 2023, $280.9 million remained available for aggregate repurchases of shares under the New Repurchase Program.
−Removed: In addition, our Board has authorized us to repurchase shares of common stock to satisfy minimum statutory tax withholding obligations in connection with the vesting of restricted stock awards and restricted stock unit awards granted pursuant to our equity incentive plans and to satisfy obligations related to the exercise of stock options made pursuant to our equity incentive plans.
−Removed: During fiscal year 2022, we repurchased 115,247 shares of common stock for this purpose at an aggregate cost of $18.1 million.
−Removed: During fiscal year 2021, we repurchased 71,248 shares of common stock for this purpose at an aggregate cost of $10.5 million.
−Removed: The repurchased shares have been reflected as additional authorized but unissued shares, with the payments reflected in common stock and capital in excess of par value.
−Removed: Any repurchased shares will be available for use in connection with corporate programs.
−Removed: If we continue to repurchase shares, the New Repurchase Program will be funded using our existing financial resources, including cash and cash equivalents, and our existing senior unsecured revolving credit facility.
−Removed: As of January 1, 2023, we may have to pay contingent consideration, related to acquisitions with open contingency periods, of up to $106.2 million.
−Removed: As of January 1, 2023, we have recorded contingent consideration obligations of $46.6 million, of which $3.6 million was recorded in accrued expenses and other current liabilities, and $43.0 million was recorded in long-term liabilities.
−Removed: The expected maximum earnout period for acquisitions with open contingency periods is 5.9 years from January 1, 2023, and the remaining weighted average expected earnout period at January 1, 2023 was 4.9 years.
+Added: As of December 31, 2023, $355.4 million remained available for aggregate repurchases of shares under the New Repurchase Program.
+Added: If we continue to repurchase shares, the Repurchase Program will be funded using our existing financial resources, including cash and cash equivalents, and our existing senior unsecured revolving credit facility.
+Added: As of December 31, 2023, we may have to pay contingent consideration, related to acquisitions with open contingency periods, of up to $98.0 million.
+Added: As of December 31, 2023, we have recorded contingent consideration obligations of $40.0 million, of which $11.0 million was recorded in accrued expenses and other current liabilities, and $29.0 million was recorded in long-term liabilities.
+Added: The expected maximum earnout period for acquisitions with open contingency periods is 7.9 years from December 31, 2023, and the remaining weighted average expected earnout period at December 31, 2023 was 5.0 years.
Distressed global financial markets could adversely impact general economic conditions by reducing liquidity and credit availability, creating increased volatility in security prices, widening credit spreads and decreasing valuations of certain investments.
4 unchanged sentences
With respect to plans outside of the United States, we expect to contribute $6.9 million in the aggregate during fiscal year 2024.
+Added: During fiscal years 2023 and 2022, we contributed $7.6 million and $6.6 million in the aggregate, respectively, to pension plans outside of the United States.
During fiscal year 2023, we contributed $10.0 million to our defined benefit pension plan in the United States for the plan year 2022.
−Removed: During fiscal years 2022, 2021 and 2020, we contributed $6.6 million, $6.9 million and $7.5 million in the aggregate, respectively, to pension plans outside of the United States.
−Removed: During fiscal year 2021, we contributed $20.0 million to our defined benefit pension plan in the United States.
We could potentially have to make additional funding payments in future periods for all pension plans.
We expect to use existing cash and external sources to satisfy future contributions to our pension plans.
−Removed: We are conducting a number of environmental investigations and remedial actions at our current and former locations, and are subject to various claims, legal proceedings and investigations covering a wide range of matters that arise in the ordinary course of our business activities.
−Removed: Although we have established accruals for potential losses that we believe are probable and reasonably estimable, in our opinion, based on our review of the information available at this time, the total cost of resolving these contingencies at January 1, 2023 should not have a material adverse effect on our consolidated financial statements included in this annual report on Form 10-K.
−Removed: However, each of these matters is subject to uncertainties, and it is possible that some of these matters may be resolved unfavorably to us.
−Removed: See “Business—Environmental Matters ” above and Note 16, Contingencies, in the Notes to Consolidated Financial Statements for a discussion of these matters and proceedings.
Effects of Recently Issued and Adopted Accounting Pronouncements
See Note 1, Nature of Operations and Accounting Policies, in the Notes to Consolidated Financial Statements for a summary of recently issued accounting pronouncements.
−Removed: We did not adopt any new accounting pronouncements during the fiscal year 2022.
−Removed: We do not believe that any recently issued accounting pronouncements that have not yet been adopted will have a material impact on our consolidated financial statements.
−Removed: Application of Critical Accounting Policies and Estimates
+Added: We did not adopt any new accounting pronouncements during fiscal year 2023.
+Added: We are in the process of determining the impact of the recently issued accounting pronouncements that have not yet been adopted in our consolidated financial statements.
+Added: Critical Accounting Policies and Estimates
The preparation of consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.
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The fair value of contingent consideration is remeasured each period based on relevant information and changes to the fair value are included in the operating results for the period.
+Added: Divestitures:
+Added: As part of our continuing efforts to focus on higher growth opportunities, we have discontinued certain businesses.
+Added: In accounting for such transactions, we apply the applicable accounting guidance under U.S.
+Added: GAAP pertaining to discontinued operations and disposals of components of an entity.
+Added: When the discontinued operations represented a strategic shift that will have a major effect on our operations and financial statements, we accounted for these businesses as discontinued operations.
+Added: We recognize divestiture-related costs that are not part of divestiture consideration as general and administrative expense as they are incurred.
+Added: These costs typically include transaction and disposal costs, such as legal, accounting, and other professional fees.
+Added: The accounting for divestiture requires estimates and judgment as to the determination of the gain or loss on sale and the fair value of the different elements of consideration received.
+Added: We received cash proceeds of $2.13 billion and we are entitled to two elements of additional consideration that become payable upon the resolution of certain events.
+Added: First, we are entitled to proceeds of $75.0 million as consideration for our ceasing the use of the PerkinElmer brand and related trademarks and transferring them to the Purchaser (“Brand Sale”).
+Added: This consideration is expected to be received in installments through the first half of 2025.
+Added: We are also entitled to proceeds of up to $150.0 million that is contingent on the proceeds that the Purchaser and its affiliates receive on a subsequent sale or other capital event related to the Business (“Contingent Gain”).
+Added: The recognition of the future payment related to the Brand Sale and Contingent Gain to the gain on sale and the fair value assigned to the Contingent Gain, are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques.
+Added: In deriving the fair value of the Contingent Gain, we utilized a lattice model, which incorporates one or more of the following key assumptions:
+Added: (1) simulated equity value from the valuation date through the expected liquidity event, (2) volatility based on guideline public companies, (3) expected term to a liquidity event, and (4) risk-free rates.
+Added: If the actual results differ from the estimates and judgments used in these estimates, the amounts recorded in the financial statements could result in the recognition of additional consideration which would increase the gain on sale or impairment of the receivable from the Purchaser.
+Added: The fair value of contingent consideration is remeasured each period based on relevant information and changes to the fair value are included in the operating results from continuing operations for the period.
+Added: We also recorded a receivable of approximately $160.2 million as of December 31, 2023 for post-closing adjustments related to the sale of the Business that is expected to be received during fiscal year 2024.
+Added: The final amount of the receivable related to the post-closing adjustments is subject to change and could result in an adjustment to the gain when settled.
Value of long-lived assets, including goodwill and other intangibles.
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We periodically review the carrying value of all of these assets based, in part, upon current estimates of fair values and our projections of anticipated future cash flows.
−Removed: We undertake this review (i) on an annual basis for assets such as goodwill and non-amortizing intangible assets and (ii) on a periodic basis for other long-lived assets when facts and circumstances suggest that cash flows related to those assets may be diminished.
+Added: We undertake this review (i) on an annual basis for assets such as goodwill, and (ii) on a periodic basis for other long-lived assets when facts and circumstances suggest that cash flows related to those assets may be diminished.
Any impairment charge that we record reduces our earnings.
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We perform the annual impairment assessment on the later of January 1 or the first day of each fiscal year.
−Removed: This same impairment test will be performed at other times during the course of the year should an event occur which suggests that the recoverability of goodwill should be reconsidered.
+Added: This same impairment test will be performed at other times during the course of the year should an event o ccur which suggests that the recoverability of goodwill should be reconsidered.
We completed the annual goodwill impairment test using a measurement date of January 2, 2023, and concluded that there was no goodwill impairment.
−Removed: At January 3, 2022, the fair value exceeded the carrying value by more than 20.0% for each reporting unit.
−Removed: The range of the long-term terminal growth rates for the reporting units was 2.0% to 5.0% for the fiscal year 2022 impairment analysis.
−Removed: The range for the discount rates for the reporting units was 7.0% to 11.5%.
−Removed: Keeping all other variables
−Removed: constant, a 10.0% change in any one of these input assumptions for the vari ous reporting units would still allow us to conclude that there was no impairment of goodwill.
−Removed: In connection with the fiscal year 2023 impairment test performed as of January 2, 2023, the Tulip and EUROIMMUN reporting units, which had goodwill balances of $74.4 million and $572.0 million, respectively, at January 1, 2023, had fair values that exceeded their carrying values by less than 20%.
−Removed: These reporting units are at increased risk of an impairment charge given the higher discount rates, competition and, to some extent, the recent impacts of the COVID-19 pandemic.
−Removed: Despite the increased impairment risk associated with these reporting units, we do not believe there will be a significant change in the key estimates or assumptions driving the fair value of these reporting units that would lead to a material impairment charge.
We consistently emplo y the income approach to estimate the current fair value when testing for impairment of goodwill.
2 unchanged sentences
The income approach is sensitive to changes in long-term terminal growth rates and the discount rates.
−Removed: The long-term terminal growth rates are consistent with our historical long-term terminal growth rates, as the current economic trends are not expected to affect our long-term terminal growth rates.
+Added: The long-term terminal growth rates are consistent with our historical long-term terminal growth rates, as the current short-term economic trends are not expected to affect our long-term terminal growth rates.
We corroborate the income approach with a market approach.
While we believe that our estimates of current value are reasonable, if actual results differ from the estimates and judgments used including such items as future cash flows and the volatility inherent in markets which we serve, impairment charges against the carrying value of those assets could be required in the future.
+Added: At January 2, 2023, the fair value exceeded the carrying value by more than 20.0% for each reporting unit, except for the Tulip and EUROIMMUN reporting units, which had fair values that exceeded their carrying values by less than 20%.
+Added: The range of the long-term terminal growth rates for the reporting units was 2.0% to 6.0% for the fiscal year 2023 impairment analysis.
+Added: The range for the discount rates for the reporting units was 8.5% to 14.5%.
+Added: Keeping all other variables constant, a 10.0% change in any one of these input assumptions for the various reporting units, except for our Tulip and EUROIMMUN reporting units, would still allow us to conclude that there was no impairment of goodwill.
+Added: At December 31, 2023, the operating performance of EUROIMMUN reporting unit exceeded the original forecast and the forecast for this reporting unit no longer indicates any sensitivity that would lead to a material impairment charge.
+Added: In connection with the fiscal year 2024 impairment test performed as of January 1, 2024, the Tulip and Life Sciences reporting units, which had goodwill balances of $75.0 million and $4.4 billion, respectively, at December 31, 2023, had fair values that exceeded their carrying values by less than 20%.
+Added: These reporting units are at increased risk of an impairment charge given the higher discount rates, competition and, to some extent, the macro-environment in which these reporting units operate.
+Added: Despite the increased impairment risk associated with these reporting units, we do not believe there will be a significant change in the key estimates or assumptions driving the fair value of these reporting units that would lead to a material impairment charge.
Employee compensation and benefits.
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Actuarial gains and losses are measured annually as of the calendar month-end that is closest to our fiscal year end and accordingly will be recorded in the fourth quarter, unless we are required to perform an interim remeasurement.
−Removed: We recognized gains of $28.3 million and $30.9 million in fiscal years 2022 and 2021, respectively, for our retirement and postretirement benefit plans, which include the gains from the immediate recognition of the actuarial gains and losses for the benefit plans, which were recorded in the fourth quarter of each fiscal year.
−Removed: The loss or income related to the immediate recognition of the actuarial gains and losses on benefit plans were pre-tax gains of $28.9 million and $24.7 million fiscal years 2022 and 2021, respectively.
−Removed: We expect an expense of approximately $13.3 million in fiscal year 2023 for our retirement and postretirement benefit plans, excluding any actuarial gains and losses.
−Removed: It is difficult to reliably calculate and predict the amount of any actuarial gains and losses in fiscal year 2023 as these gains and losses are primarily driven by events and circumstances beyond our control, including changes in interest rates, the performance of the financial markets and mortality assumptions.
−Removed: To the extent the discount rates decrease or the value of our pension and postretirement investments decrease, actuarial losses will impact our operating results.
−Removed: Conversely, to the extent the discount rates increase or the value of our pension and postretirement investments increase more than expected, actuarial gains will favorably impact our operating results.
+Added: We recognized a loss of $20.2 million in fiscal year 2023 and a gain of $28.3 million in fiscal year 2022, for our retirement and postretirement benefit plans, which include the charge or benefit for the mark-to-market adjustment for the benefit plans, which were recorded in the fourth quarter of each fiscal year.
+Added: The loss or income related to the mark-to-market adjustment on benefit plans was a pre-tax loss of $5.7 million in fiscal year 2023 and a pre-tax gain of $28.9 million fiscal year 2022.
+Added: We expect a loss of approximately $10.0 million in fiscal year 2024 for our retirement and postretirement benefit plans, excluding the charge for or benefit from the mark-to-market adjustment.
+Added: It is difficult to reliably calculate and predict whether there will be a mark-to-market adjustment in fiscal year 2024.
+Added: Mark-to-market adjustments are primarily driven by events and circumstances beyond our control, including changes in interest rates, the performance of the financial markets and mortality assumptions.
+Added: To the extent the discount rates decrease or the value of our pension and postretirement investments decrease, mark-to market charges to operations will be recorded in fiscal year 2024.
+Added: Conversely, to the extent the discount rates increase or the value of our pension and postretirement investments increase more than expected, mark-to market income will be recorded in fiscal year 2024.
Pension accounting is intended to reflect the recognition of future benefit costs over the employee’s approximate service period based on the terms of the plans and the investment and funding decisions made.
1 unchanged sentence
We use discount rates for each individual plan based upon the expected cash flows using the applicable spot rates derived from a yield curve over the projected cash flow period.
−Removed: If any of our assumptions were to change as of January 1, 2023, our pension plan expenses would also change as follows:
+Added: If any of our assumptions were to change as of December 31, 2023, our pension plan expenses would also change as follows:
Increase (Decrease) at
−Removed: January 1, 2023
+Added: December 31, 2023
Percentage Point Change Non-U.S.
2 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.