Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 27, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CHARLES RIVER LABORATORIES INTERNATIONAL INC | |
Entity Central Index Key | 1,100,682 | |
Current Fiscal Year End Date | --12-29 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 47,911,809 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Income Statement [Abstract] | ||
Service revenue | $ 345,454 | $ 304,531 |
Product revenue | 148,516 | 141,232 |
Total revenue | 493,970 | 445,763 |
Costs and expenses: | ||
Cost of services provided (excluding amortization of intangible assets) | 243,808 | 207,167 |
Cost of products sold (excluding amortization of intangible assets) | 68,693 | 67,244 |
Selling, general and administrative | 103,372 | 90,909 |
Amortization of intangible assets | 10,268 | 10,737 |
Operating income | 67,829 | 69,706 |
Other income (expense): | ||
Interest income | 282 | 202 |
Interest expense | (11,191) | (6,983) |
Other income, net | 6,120 | 15,122 |
Income from continuing operations, before income taxes | 63,040 | 78,047 |
Provision for income taxes | 9,772 | 31,084 |
Income from continuing operations, net of income taxes | 53,268 | 46,963 |
Loss from discontinued operations, net of income taxes | (23) | (4) |
Net income | 53,245 | 46,959 |
Less: Net income attributable to noncontrolling interests | 614 | 181 |
Net income attributable to common shareholders | $ 52,631 | $ 46,778 |
Basic: | ||
Continuing operations attributable to common shareholders (in dollars per share) | $ 1.10 | $ 0.98 |
Discontinued operations (in dollars per share) | 0 | 0 |
Net income attributable to common shareholders (in dollars per share) | 1.10 | 0.98 |
Diluted: | ||
Continuing operations attributable to common shareholders (in dollars per share) | 1.08 | 0.97 |
Discontinued operations (in dollars per share) | 0 | 0 |
Net income attributable to common shareholders (in dollars per share) | $ 1.08 | $ 0.97 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 53,245 | $ 46,959 |
Other comprehensive income: | ||
Foreign currency translation adjustment and other | 25,431 | 11,221 |
Amortization of net loss and prior service benefit included in net periodic cost for pension and other post-retirement benefit plans | 459 | 854 |
Comprehensive income, before income taxes | 79,135 | 59,034 |
Less: Income tax expense related to items of other comprehensive income | 1,722 | 226 |
Comprehensive income, net of income taxes | 77,413 | 58,808 |
Less: Comprehensive income related to noncontrolling interest, net of income taxes | 1,178 | 298 |
Comprehensive income attributable to common shareholders | $ 76,235 | $ 58,510 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 187,774 | $ 163,794 |
Trade receivables, net | 440,109 | 430,016 |
Inventories | 119,046 | 114,956 |
Prepaid assets | 43,340 | 36,544 |
Other current assets | 53,079 | 81,315 |
Total current assets | 843,348 | 826,625 |
Property, plant and equipment, net | 788,554 | 781,973 |
Goodwill | 835,936 | 804,906 |
Client relationships and other intangible assets, net | 370,296 | 369,762 |
Deferred tax assets | 26,237 | 22,654 |
Other assets | 136,632 | 124,002 |
Total assets | 3,001,003 | 2,929,922 |
Current liabilities: | ||
Current portion of long-term debt and capital leases | 3,137 | 30,998 |
Accounts payable | 73,479 | 77,838 |
Accrued compensation | 71,136 | 101,044 |
Deferred revenue | 98,473 | 117,569 |
Accrued liabilities | 96,630 | 89,780 |
Other current liabilities | 62,572 | 44,460 |
Current liabilities of discontinued operations | 1,671 | 1,815 |
Total current liabilities | 407,098 | 463,504 |
Long-term debt, net and capital leases | 1,129,581 | 1,114,105 |
Deferred tax liabilities | 96,037 | 89,540 |
Other long-term liabilities | 204,871 | 194,815 |
Long-term liabilities of discontinued operations | 3,476 | 3,942 |
Total liabilities | 1,841,063 | 1,865,906 |
Commitments and contingencies (Note 15) | ||
Redeemable noncontrolling interest | 17,323 | 16,609 |
Equity: | ||
Preferred stock, $0.01 par value; 20,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $0.01 par value; 120,000 shares authorized; 88,125 shares issued and 47,905 shares outstanding as of March 31, 2018, and 87,495 shares issued and 47,402 shares outstanding as of December 30, 2017 | 881 | 875 |
Additional paid-in capital | 2,590,821 | 2,560,192 |
Retained earnings | 346,044 | 288,658 |
Treasury stock, at cost, 40,220 shares and 40,093 shares as of March 31, 2018 and December 30, 2017, respectively | (1,673,463) | (1,659,914) |
Accumulated other comprehensive loss | (124,457) | (144,731) |
Total equity attributable to common shareholders | 1,139,826 | 1,045,080 |
Noncontrolling interest | 2,791 | 2,327 |
Total equity | 1,142,617 | 1,047,407 |
Total liabilities, redeemable noncontrolling interest and equity | 3,001,003 | 2,929,922 |
Client relationships, net | ||
Current assets: | ||
Client relationships and other intangible assets, net | 304,420 | 301,891 |
Other intangible assets, net | ||
Current assets: | ||
Client relationships and other intangible assets, net | $ 65,876 | $ 67,871 |
CONDENSED CONSOLIDATED BALANCE5
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 120,000,000 | 120,000,000 |
Common stock, shares issued (in shares) | 88,125,000 | 87,495,000 |
Common stock, shares outstanding (in shares) | 47,905,000 | 47,402,000 |
Treasury stock (in shares) | 40,220,000 | 40,093,000 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Cash flows relating to operating activities | ||
Net income | $ 53,245 | $ 46,959 |
Loss from discontinued operations, net of income taxes | (23) | (4) |
Income from continuing operations, net of income taxes | 53,268 | 46,963 |
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities: | ||
Depreciation and amortization | 33,210 | 32,411 |
Stock-based compensation | 10,541 | 9,486 |
Deferred income taxes | (782) | 26,273 |
Gain on venture capital investments | (6,451) | (4,103) |
Gain on divestiture | 0 | (10,577) |
Other, net | 3,932 | 594 |
Changes in assets and liabilities: | ||
Trade receivables, net | (3,780) | (21,062) |
Inventories | (3,501) | (2,593) |
Accounts payable | (1,076) | (6,258) |
Accrued compensation | (30,991) | (30,399) |
Deferred revenue | (18,292) | 4,094 |
Customer contract deposits | 23,566 | 0 |
Other assets and liabilities, net | 407 | (10,800) |
Net cash provided by operating activities | 60,051 | 34,029 |
Cash flows relating to investing activities | ||
Acquisitions of businesses and assets, net of cash acquired | (20,216) | 0 |
Capital expenditures | (27,726) | (15,920) |
Purchases of investments and contributions to venture capital investments | (5,268) | (6,698) |
Proceeds from sale of investments | 28,596 | 3,135 |
Proceeds from divestiture | 0 | 72,462 |
Other, net | (50) | 17 |
Net cash (used in) provided by investing activities | (24,664) | 52,996 |
Cash flows relating to financing activities | ||
Proceeds from long-term debt and revolving credit facility | 1,080,299 | 112,724 |
Proceeds from exercises of stock options | 20,041 | 19,723 |
Payments on long-term debt, revolving credit facility, and capital lease obligations | (1,096,795) | (158,140) |
Payments on debt financing costs | (4,932) | 0 |
Purchase of treasury stock | (13,549) | (48,180) |
Other, net | 0 | (451) |
Net cash used in financing activities | (14,936) | (74,324) |
Discontinued operations | ||
Net cash used in operating activities from discontinued operations | (636) | (473) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 4,254 | 1,705 |
Net change in cash, cash equivalents, and restricted cash | 24,069 | 13,933 |
Cash, cash equivalents, and restricted cash, beginning of period | 166,331 | 119,894 |
Cash, cash equivalents, and restricted cash, end of period | 190,400 | 133,827 |
Supplemental cash flow information: | ||
Cash, cash equivalents, and restricted cash, end of period | $ 166,331 | $ 119,894 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying condensed consolidated financial statements are unaudited and have been prepared by Charles River Laboratories International, Inc. (the Company) in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The year-end condensed consolidated balance sheet data was derived from the Company’s audited consolidated financial statements, but does not include all disclosures required by U.S. GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for fiscal year 2017 . The unaudited condensed consolidated financial statements, in the opinion of management, reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position and results of operations. The Company has reclassified certain amounts in the unaudited condensed consolidated statements of income for prior periods to conform to the current year presentation. See “Newly Adopted Accounting Pronouncements” below for further discussion and impact on the condensed consolidated financial statements. Use of Estimates The preparation of unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires that the Company make estimates and judgments that may affect the reported amounts of assets, liabilities, redeemable noncontrolling interest, revenues, expenses and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, judgments, and methodologies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known. Consolidation The Company’s unaudited condensed consolidated financial statements reflect its financial statements and those of its subsidiaries in which the Company holds a controlling financial interest. For consolidated entities in which the Company owns or is exposed to less than 100% of the economics, the Company records net income (loss) attributable to noncontrolling interests in its consolidated statements of income equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. Intercompany balances and transactions are eliminated in consolidation. The Company’s fiscal year is typically based on 52-weeks, with each quarter composed of 13 weeks ending on the last Saturday on, or closest to, March 31, June 30, September 30, and December 31. Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note 1, “Description of Business and Summary of Significant Accounting Policies,” in the Company’s Annual Report on Form 10-K for fiscal year 2017 . Newly Adopted Accounting Pronouncements In March 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-05, “Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SAB 118).” This standard amends Accounting Standards Codification 740, Income Taxes (ASC 740) to provide guidance on accounting for the tax effects of U.S. Tax Reform pursuant to SAB 118, which allows companies to complete the accounting under ASC 740 within a one-year measurement period from the enactment date of U.S. Tax Reform. This standard is effective upon issuance and the Company has complied with the amendments. See Note 11, “Income Taxes” for further discussion. In February 2018, the FASB issued ASU 2018-02, “ Income Statement - Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” The standard allows for reclassification from accumulated other comprehensive income to retained earnings for the stranded tax effects arising from the change in the reduction of the U.S. federal statutory income tax rate to 21% from 35%. During the three months ended March 31, 2018, the Company elected to early adopt this standard as permitted on a prospective basis, resulting in a reclassification of $3.3 million from accumulated other comprehensive income to retained earnings as a result of remeasuring the Company’s deferred tax liabilities related to its pension and other post-retirement benefit plan gains and losses. The Company’s policy is to release material stranded tax effects on a specific identification basis. In March 2017, the FASB issued ASU 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” The standard requires an employer to disaggregate the service cost component from the other components of net benefit cost and provides explicit guidance on the presentation of the service cost component and the other components of net benefit cost in the statements of income. This standard became effective for the Company in the three months ended March 31, 2018. The Company applied the changes retrospectively to the presentation of the service cost component and the other components of net periodic pension cost in the statements of income for all periods presented as required. The adoption of this standard increased operating income by $0.2 million during the three months ended April 1, 2017. In connection with the impact of operating income to the Company’s reportable segments, Research Models and Services (RMS) decreased by less than $0.1 million , Discovery and Safety Assessment (DSA) decreased by $0.3 million , Manufacturing Support (Manufacturing) decreased by less than $0.1 million , and Unallocated corporate increased by $0.6 million during the three months ended April 1, 2017. In January 2017, the FASB issued ASU 2017-01, “Clarifying the Definition of a Business.” The standard clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions of assets or businesses. This standard became effective for the Company in the three months ended March 31, 2018 and did not have a significant impact on the consolidated financial statements and related disclosures. In October 2016, the FASB issued ASU 2016-16, “Intra-Entity Transfers of Assets Other Than Inventory.” The standard requires the immediate recognition of tax effects for an intra-entity asset transfer other than inventory. This standard became effective for the Company in the three months ended March 31, 2018 and did not have a significant impact on the consolidated financial statements and related disclosures. In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Liabilities.” This standard, including a subsequently issued amendment under ASU 2018-03, “ Technical Corrections and Improvements to Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities” , requires equity investments that are not accounted for under the equity method of accounting to be measured at fair value with changes recognized in net income, simplifies the impairment assessment of certain equity investments, and updates certain presentation and disclosure requirements. This standard became effective for the Company in the three months ended March 31, 2018, resulting in an increase of $1.9 million to other assets with a corresponding increase to retained earnings and deferred taxes of $1.4 million and $0.5 million , respectively. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” The standard, including subsequently issued amendments, replaced most existing revenue recognition guidance in U.S. GAAP and permits the use of either a modified retrospective or cumulative effect transition method. The Company elected the modified retrospective transition method. The standard requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The standard became effective for the Company in the three months ended March 31, 2018. See Note 3, “Revenue From Contracts With Customers” for a discussion of the Company’s adoption of this standard and its impact on the consolidated financial statements and related disclosures. Newly Issued Accounting Pronouncements In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815) Targeted Improvements to Accounting for Hedging Activities.” ASU 2017-12 refines and expands hedge accounting for both financial and commodity risks. It also creates more transparency around how economic results are presented, both on the face of the financial statements and in the disclosures. In addition, this ASU makes certain targeted improvements to simplify the application of hedge accounting guidance. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, and requires the modified retrospective approach. Early adoption is permitted. This update applies to all existing hedging relationships on the date of adoption with the cumulative effect of adoption being reflected as of the beginning of the fiscal year of adoption. The Company is still evaluating the impact this standard will have on its consolidated financial statements and related disclosures . In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment.” The standard simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. This standard is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and will be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, “Leases.” The standard established the principles that lessees and lessors will apply to report useful information to users of financial statements about the amount, timing and uncertainty of cash flows arising from a lease. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is still evaluating the full impact this standard will have on its consolidated financial statements and related disclosures, but expects to recognize substantially all of its leases on the balance sheet by recording a right-to-use asset and a corresponding lease liability. |
Business Acquisitions and Dives
Business Acquisitions and Divestiture | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
BUSINESS ACQUISITIONS AND DIVESTITURE | BUSINESS ACQUISITIONS AND DIVESTITURE MPI Research On April 3, 2018 , the Company acquired MPI Research, a non-clinical contract research organization (CRO) providing comprehensive testing services to biopharmaceutical and medical device companies worldwide. The acquisition enhances the Company’s position as a leading global early-stage CRO by strengthening its ability to partner with clients across the drug discovery and development continuum. The purchase price for MPI Research was approximately $800 million in cash, subject to certain post-closing adjustments that may change the purchase price. The acquisition was funded by borrowings on the Company’s $ 2.3B Credit Facility as well as the offering of the Company’s Senior Notes. See Note 9, “Long-Term Debt and Capital Lease Obligations.” This business will be reported as part of the Company’s DSA reportable segment. Due to the limited time between the acquisition date and the filing of this Quarterly Report on Form 10-Q, it is not practicable for the Company to disclose either the preliminary allocation of purchase price to assets acquired and liabilities assumed or the pro forma consolidated results of operations as if the MPI Research acquisition had occurred as of the beginning of the period immediately preceding the period of acquisition after giving effect to certain adjustments. The Company incurred transaction and integration costs in connection with the acquisition of $2.7 million for the three months ended March 31, 2018 , which were included in selling, general and administrative expenses. KWS BioTest Limited On January 11, 2018 , the Company acquired KWS BioTest Limited (KWS BioTest), a CRO specializing in in vitro and in vivo discovery testing services for immuno-oncology, inflammatory and infectious diseases. The acquisition enhances the Company’s discovery expertise, with complementary offerings that provide the Company’s customers with additional tools in the active therapeutic research areas of oncology and immunology. The purchase price for KWS BioTest was $20.3 million in cash, subject to certain post-closing adjustments that may change the purchase price, and was funded by the Company’s various borrowings. In addition to the initial purchase price, the transaction includes aggregate, undiscounted contingent payments of up to £ 3.0 million (approximately $4.2 million based on recent exchange rates), based on future performance. The KWS BioTest business is reported as part of the Company’s DSA reportable segment. The contingent payments become payable based on the achievement of certain revenue and earnings targets. If achieved, the payments become due in the first quarter of fiscal year 2019. The Company estimated the fair value of this contingent consideration based on a probability-weighted set of outcomes. The preliminary purchase price allocation of $22.0 million , net of $1.0 million of cash acquired, was as follows: January 11, 2018 (in thousands) Trade receivables (contractual amount of $1,309) $ 1,309 Other current assets (excluding cash) 99 Property, plant and equipment 1,136 Definite-lived intangible assets - client relationships 3,647 Goodwill 18,165 Current liabilities (1,575 ) Deferred revenue (151 ) Long-term liabilities (596 ) Total purchase price allocation $ 22,034 The purchase price allocation is subject to change as additional information becomes available concerning the fair value and tax basis of the assets acquired and liabilities assumed, including certain contracts and obligations. Any additional adjustments to the purchase price allocation will be made as soon as practicable but no later than one year from the date of acquisition. The only definite-lived intangible asset relates to client relationships, which will be amortized over a weighted average life of 12 years. The goodwill resulting from the transaction is primarily attributable to the potential growth of the Company’s DSA businesses from customers introduced through KWS BioTest and the assembled workforce of the acquired business. The goodwill attributable to KWS BioTest is not deductible for tax purposes. The Company incurred transaction and integration costs of $0.4 million in connection with the acquisition for the three months ended March 31, 2018 , which were included in selling, general and administrative expenses, within the unaudited condensed consolidated statements of income. Pro forma financial information as well as actual revenue and operating income have not been included because KWS BioTest’s financial results are not significant when compared to the Company’s consolidated financial results. Brains On-Line On August 4, 2017 , the Company acquired Brains On-Line, a CRO providing critical data that advances novel therapeutics for the treatment of central nervous system (CNS) diseases. Brains On-Line strategically expands the Company’s existing CNS capabilities and establishes the Company as a single-source provider for a broad portfolio of discovery CNS services. The purchase price for Brains On-Line was $21.3 million in cash, subject to certain post-closing adjustments that may change the purchase price, and was funded by the Company’s various borrowings. In addition to the initial purchase price, the transaction includes aggregate, undiscounted contingent payments of up to €6.7 million (approximately $8.3 million based on recent exchange rates), based on future performance. The Brains On-Line business is reported as part of the Company’s DSA reportable segment. The contingent payments become payable based on the achievement of certain revenue and earnings targets. If achieved, the payments become due in the first quarter of fiscal year 2019. The Company estimated the fair value of this contingent consideration based on a probability-weighted set of outcomes. The purchase price allocation of $20.1 million , net of $ 0.6 million of cash acquired, was as follows: August 4, 2017 (in thousands) Trade receivables (contractual amount of $1,146) $ 1,146 Other current assets (excluding cash) 640 Property, plant and equipment 664 Other long-term assets 29 Definite-lived intangible assets 9,300 Goodwill 11,762 Current liabilities (863 ) Deferred revenue (405 ) Long-term liabilities (2,151 ) Total purchase price allocation $ 20,122 The purchase price allocation is subject to change as additional information becomes available concerning the fair value and tax basis of the assets acquired and liabilities assumed. Any additional adjustments to the purchase price allocation will be made as soon as practicable but no later than one year from the date of acquisition. From the date of acquisition through March 31, 2018 , the Company recorded measurement-period adjustments related to the acquisition that resulted in an immaterial change to the purchase price allocation on a consolidated basis. The breakout of definite-lived intangible assets acquired was as follows: Definite-Lived Intangible Assets Weighted Average Amortization Life (in thousands) (in years) Client relationships $ 7,000 13 Other intangible assets 2,300 10 Total definite-lived intangible assets $ 9,300 12 The goodwill resulting from the transaction is primarily attributable to the potential growth of the Company’s DSA businesses from customers and technology introduced through Brains On-Line and the assembled workforce of the acquired business. The goodwill attributable to Brains On-Line is not deductible for tax purposes. The Company incurred integration costs of $0.1 million in connection with the acquisition for the three months ended March 31, 2018 , which were included in selling, general and administrative expenses within the unaudited condensed consolidated statements of income. Pro forma financial information as well as actual revenue and operating income have not been included because Brains On-Line’s financial results are not significant when compared to the Company’s consolidated financial results. Contract Manufacturing On February 10, 2017 , the Company sold its CDMO business to Quotient Clinical Ltd., based in London, England, for $75.0 million in proceeds, net of $0.6 million in cash and cash equivalents transferred in conjunction with the sale and $0.3 million of working capital adjustments. The CDMO business was acquired in April 2016 as part of the acquisition of WIL Research and was reported in the Company’s Manufacturing reportable segment . The Company determined that the CDMO business was not optimized within the Company’s portfolio at its current scale, and that the capital could be better deployed in other long-term growth opportunities. During the three months ended April 1, 2017, the Company recorded a gain on the divestiture of the CDMO business of $10.6 million , which was included in other income, net within the Company’s unaudited condensed consolidated statements of income. As of February 10, 2017 , the carrying amounts of the major classes of assets and liabilities associated with the divestiture of the CDMO business were as follows (in thousands): Assets Current assets $ 5,505 Property, plant and equipment, net 11,174 Goodwill 35,857 Long-term assets 17,154 Total assets $ 69,690 Liabilities Deferred revenue $ 4,878 Other current liabilities 1,158 Total liabilities $ 6,036 |
Revenue From Contracts With Cus
Revenue From Contracts With Customers | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue From Contracts With Customers | REVENUE FROM CONTRACTS WITH CUSTOMERS Adoption of ASC Topic 606, “Revenue from Contracts with Customers” (ASC 606) ASC 606 became effective for the Company on December 31, 2017 and was adopted using the modified retrospective method for all contracts not completed as of the date of adoption. For contracts that were modified before the effective date, the Company reflected the aggregate effect of all modifications when identifying performance obligations and allocating transaction price in accordance with the practical expedient, which did not have a material effect on the cumulative impact of adopting ASC 606. The reported results for 2018 reflect the application of ASC 606 guidance while the historical results for 2017 were prepared under the guidance of ASC 605, “Revenue Recognition” (ASC 605). The cumulative effect of applying ASC 606 to all contracts with customers that were not completed as of December 30, 2017 was immaterial. There is no material difference in the reporting of revenue for the 2018 period in accordance with ASC 606 when compared to ASC 605. Revenue Recognition Revenue is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to customers. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer (“transaction price”). To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the most likely amount to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available. Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue. When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the practical expedient, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. None of the Company’s contracts contained a significant financing component for the 2018 period presented. Contracts with customers may contain multiple performance obligations. For such arrangements, the transaction price is allocated to each performance obligation based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. Contracts are often modified to account for changes in contract specifications and requirements. Contract modifications exist when the modification either creates new, or changes existing, enforceable rights and obligations. Generally, when contract modifications create new performance obligations, the modification is considered to be a separate contract and revenue is recognized prospectively. When contract modifications change existing performance obligations, the existing transaction price and measure of progress for the performance obligation to which it relates is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. Product revenue is generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract. Service revenue is generally recognized over time as the services are delivered to the customer based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. Depending on which better depicts the transfer of value to the customer, the Company generally measures its progress using either cost-to-cost (input method) or right-to-invoice (output method). The Company uses the cost-to-cost measure of progress when it best depicts the transfer of value to the customer which occurs as the Company incurs costs on its contract, generally related to fixed fee service contracts . Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. The costs calculation includes variables such as labor hours, allocation of overhead costs, research model costs, and subcontractor costs. Revenue is recorded proportionally as costs are incurred. The right to invoice measure of progress is generally related to rate per unit contracts, as the extent of progress towards completion is measured based on discrete service or time-based increments, such as samples tested or labor hour incurred. Revenue is recorded in the amount invoiced since that amount corresponds directly to the value of the Company’s performance to date. Disaggregation of Revenue The following tables disaggregate the Company’s revenue by major business line and timing of transfer of products or services for the three months ended March 31, 2018 (in thousands): Major Products/Service Lines: RMS $ 133,958 DSA 259,992 Manufacturing 100,020 Total revenue $ 493,970 Timing of Revenue Recognition: RMS Services and products transferred over time $ 48,726 Services and products transferred at a point in time 85,232 DSA Services and products transferred over time 259,744 Services and products transferred at a point in time 248 Manufacturing Services and products transferred over time 28,571 Services and products transferred at a point in time 71,449 Total revenue $ 493,970 RMS The RMS business generates revenue through the commercial production and sale of research models and the provision of services related to the maintenance and monitoring of research models and management of clients’ research operations. Revenue from the sale of research models is recognized at a point in time when the customer obtains control of the product, which may be upon shipment or upon delivery based on the contractual shipping terms of a contract. Revenue generated from research models services is recognized over time and is typically based on a right-to-invoice measure of progress (output method) as invoiced amounts correspond directly to the value of the Company’s performance to date . DSA The Discovery and Safety Assessment business provides a full suite of integrated drug discovery services directed at the identification, screening and selection of a lead compound for drug development and offers a full range of safety assessment services including bioanalysis, drug metabolism, pharmacokinetics, toxicology and pathology. Discovery and Safety Assessment services revenue is generally recognized over time using the cost-to-cost or right to invoice measures of progress, primarily representing fixed fee service contracts and per unit service contracts, respectively . Manufacturing The Manufacturing business includes Microbial Solutions, which provides in vitro (non-animal) lot-release testing products, microbial detection products, and species identification services; Biologics Testing Services (Biologics), which performs specialized testing of biologics; and Avian Vaccine Services (Avian), which supplies specific-pathogen-free chicken eggs and chickens. Species identification service revenue is generally recognized at a point in time as identifications are completed by the Company. Biologics service revenue is generally recognized over time using the cost-to-cost measure of progress. Microbial Solutions and Avian product sales are generally recognized at a point in time when the customer obtains control of the product, which may be upon shipment or upon delivery based on the contractual shipping terms of a contract. Transaction Price Allocated to Future Performance Obligations ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of March 31, 2018 . The guidance provides certain practical expedients that limit this requirement and, therefore, the Company does not disclose the value of unsatisfied performance obligations for (1) contracts with an original expected length of one year or less and (ii) contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed. The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially satisfied) as of March 31, 2018 : Revenues Expected to be Recognized in Future Periods Less than 1 Year 1 to 3 Years Total (in thousands) DSA $ 72,872 $ 55,029 $ 127,901 Manufacturing 132 255 387 Total $ 73,004 $ 55,284 $ 128,288 Contract Balances from Contracts with Customers The timing of revenue recognition, billings and cash collections results in billed receivables (client receivables), contract assets (unbilled revenue), contract liabilities (current and non-current deferred revenue), and customer deposits on the unaudited condensed consolidated balance sheets. The Company’s payment terms are generally 30 days in the United States and consistent with prevailing practice in international markets. When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met. The following table provides information about client receivables, contract assets, and contract liabilities from contracts with customers: March 31, 2018 December 30, 2017 (1) (in thousands) Balances from contracts with customers only: Client receivables $ 343,546 $ 335,839 Contract assets (unbilled revenue) 98,801 96,297 Contract liabilities (current and long-term deferred revenue) 108,786 125,882 Contract liabilities (customer contract deposits) 23,566 — (1) The beginning balance as of December 30, 2017 is presented under the guidance of ASC 605. Under ASC 606, when the Company does not have the unconditional right to advanced billings, both advanced client payments and unpaid advanced client billings are excluded from deferred revenue, with the advanced billings also being excluded from client receivables. As of March 31, 2018 , the Company excluded approximately $14 million of unpaid advanced client billings from both client receivables and deferred revenue and approximately $24 million of advanced client payments have been presented as customer contract deposits within other current liabilities in the accompanying unaudited condensed consolidated financial statements. Other changes in the contract asset and the contract liability balances during the three months ended March 31, 2018 : (i) Changes due to business combinations: See Note 2. “Business Acquisitions and Divestiture” for client receivables and deferred revenue that were acquired as part of the KWS BioTest acquisition occurring on January 11, 2018. (ii) Cumulative catch-up adjustments to revenue that affect the corresponding contract asset or contract liability, including adjustments arising from a change in the measure of progress, a change in an estimate of the transaction price (including any changes in the assessment of whether an estimate of variable consideration is constrained), or a contract modification: During the three month period ended March 31, 2018 an immaterial cumulative catch-up adjustment to revenue was recorded. (iii) A change in the time frame for a right to consideration to become unconditional (that is, for a contract asset to be recorded as a client receivable): Approximately $63 million of unbilled revenue as of December 30, 2017 was billed during the three month period ended March 31, 2018 . (iv) A change in the time frame for a performance obligation to be satisfied (that is, for the recognition of revenue arising from a contract liability): Approximately $98 million of contract liabilities as of December 30, 2017 were recognized as revenue during the three month period ended March 31, 2018 . |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company retrospectively adopted ASU 2017-07 during the three months ended March 31, 2018 , which impacted segment information. Service cost is reflected in operating income within the unaudited condensed consolidated statements of income while all other components of net periodic cost are recorded in Other income, net within the unaudited condensed consolidated statements of income. See Note 1, “Basis of Presentation.” The Company’s three reportable segments are Research Models and Services (RMS), Discovery and Safety Assessment (DSA), and Manufacturing Support (Manufacturing). The following table presents revenue and other financial information by reportable segment: Three Months Ended March 31, 2018 April 1, 2017 (in thousands) RMS Revenue $ 133,958 $ 127,161 Operating income 38,527 37,690 Depreciation and amortization 4,853 5,092 Capital expenditures 4,625 2,603 DSA Revenue $ 259,992 $ 227,758 Operating income 40,859 38,335 Depreciation and amortization 20,787 19,369 Capital expenditures 12,802 8,323 Manufacturing Revenue $ 100,020 $ 90,844 Operating income 28,523 26,600 Depreciation and amortization 5,736 5,962 Capital expenditures 6,834 2,292 For the three months ended March 31, 2018 and April 1, 2017 , reconciliations of segment operating income, depreciation and amortization, and capital expenditures to the respective consolidated amounts are as follows: Operating Income Depreciation and Amortization Capital Expenditures March 31, 2018 April 1, 2017 March 31, 2018 April 1, 2017 March 31, 2018 April 1, 2017 (in thousands) Total reportable segments $ 107,909 $ 102,625 $ 31,376 $ 30,423 $ 24,261 $ 13,218 Unallocated corporate (40,080 ) (32,919 ) 1,834 1,988 3,465 2,702 Total consolidated $ 67,829 $ 69,706 $ 33,210 $ 32,411 $ 27,726 $ 15,920 Revenue for each significant product or service offering is as follows: Three Months Ended March 31, 2018 April 1, 2017 (in thousands) RMS $ 133,958 $ 127,161 DSA 259,992 227,758 Manufacturing 100,020 90,844 Total revenue $ 493,970 $ 445,763 A summary of unallocated corporate expense consists of the following : Three Months Ended March 31, 2018 April 1, 2017 (in thousands) Stock-based compensation $ 6,991 $ 5,583 Compensation, benefits, and other employee-related expenses 20,596 14,381 External consulting and other service expenses 2,934 5,767 Information technology 2,465 2,393 Depreciation 1,834 1,987 Acquisition and integration 2,864 21 Other general unallocated corporate 2,396 2,787 Total unallocated corporate expense $ 40,080 $ 32,919 Other general unallocated corporate expense consists of costs associated with departments such as senior executives, corporate accounting, legal, tax, human resources, treasury, and investor relations. Revenue by geographic area is as follows: U.S. Europe Canada Asia Pacific Other Consolidated (in thousands) Three Months Ended: March 31, 2018 $ 248,980 $ 160,826 $ 48,578 $ 34,520 $ 1,066 $ 493,970 April 1, 2017 231,311 136,881 47,187 30,095 289 445,763 Included in the Asia Pacific category above are operations located in China, Japan, Korea, Australia, Singapore, and India. Included in the Other category above are operations located in Brazil and Israel. Revenue represents sales originating in entities physically located in the identified geographic area. |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 3 Months Ended |
Mar. 31, 2018 | |
Supplemental Balance Sheet Information [Abstract] | |
SUPPLEMENTAL BALANCE SHEET INFORMATION | SUPPLEMENTAL BALANCE SHEET INFORMATION The composition of trade receivables, net is as follows: March 31, 2018 December 30, 2017 (in thousands) Client receivables $ 343,546 $ 335,839 Unbilled revenue 98,801 96,297 Total 442,347 432,136 Less: Allowance for doubtful accounts (2,238 ) (2,120 ) Trade receivables, net $ 440,109 $ 430,016 The composition of inventories is as follows: March 31, 2018 December 30, 2017 (in thousands) Raw materials and supplies $ 20,353 $ 19,858 Work in process 19,080 18,200 Finished products 79,613 76,898 Inventories $ 119,046 $ 114,956 The composition of other current assets is as follows: March 31, 2018 December 30, 2017 (in thousands) Investments $ 2,542 $ 28,489 Prepaid income taxes 49,932 52,234 Restricted cash 605 592 Other current assets $ 53,079 $ 81,315 The composition of other assets is as follows: March 31, 2018 December 30, 2017 (in thousands) Life insurance policies $ 33,943 $ 34,008 Venture capital investments 76,076 71,101 Restricted cash 2,021 1,945 Other 24,592 16,948 Other assets $ 136,632 $ 124,002 The composition of other current liabilities is as follows: March 31, 2018 December 30, 2017 (in thousands) Accrued income taxes $ 34,532 $ 43,250 Customer contract deposits 23,566 — Other 4,474 1,210 Other current liabilities $ 62,572 $ 44,460 The composition of other long-term liabilities is as follows: March 31, 2018 December 30, 2017 (in thousands) U.S. Transition Tax $ 66,851 $ 61,038 Long-term pension liability 51,607 52,364 Accrued executive supplemental life insurance retirement plan and deferred compensation plan 37,935 37,582 Other 48,478 43,831 Other long-term liabilities $ 204,871 $ 194,815 |
Venture Capital Investments
Venture Capital Investments | 3 Months Ended |
Mar. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
VENTURE CAPITAL INVESTMENTS | VENTURE CAPITAL INVESTMENTS The Company invests in several venture capital funds that invest in start-up companies, primarily in the life sciences industry. The Company’s ownership interest in these funds ranges from 0.6% to 12.0% . The Company accounts for the investments in limited partnerships (LPs), which are variable interest entities, under the equity method of accounting. The Company is not the primary beneficiary because it has no power to direct the activities that most significantly affect the LPs’ economic performance. The Company accounts for the investments in limited liability companies, which are not variable interest entities, under the equity method of accounting. The Company’s total commitment to the venture capital funds as of March 31, 2018 was $108.4 million , of which the Company funded $54.9 million through that date. During the three months ended March 31, 2018 and April 1, 2017 , the Company received dividends totaling $7.1 million and $4.4 million , respectively. The Company recognized gains of $6.5 million and $4.1 million related to the venture capital investments for the three months ended March 31, 2018 and April 1, 2017 , respectively. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE The Company has certain assets and liabilities recorded at fair value, which have been classified as Level 1, 2, or 3 within the fair value hierarchy: • Level 1 - Fair values are determined utilizing prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access, • Level 2 - Fair values are determined by utilizing quoted prices for identical or similar assets and liabilities in active markets or other market observable inputs such as interest rates, yield curves, and foreign currency spot rates, • Level 3 - Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. The fair value hierarchy level is determined by asset and liability class based on the lowest level of significant input. The observability of inputs may change for certain assets or liabilities. This condition could cause an asset or liability to be reclassified between levels. The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. During the three months ended March 31, 2018 and April 1, 2017 , there were no transfers between levels. Valuation methodologies used for assets and liabilities measured or disclosed at fair value are as follows: • Cash equivalents - Valued at market prices determined through third-party pricing services; • Mutual funds - Valued at the unadjusted quoted net asset value of shares held by the Company; • Foreign currency forward contracts - Valued using market observable inputs, such as forward foreign exchange points and foreign exchanges rates; • Life insurance policies - Valued at cash surrender value based on the fair value of underlying investments; • Debt instruments - The book value of the Company’s term and revolving loans, which are variable rate loans carried at amortized cost, approximates the fair value based on current market pricing of similar debt; and • Contingent consideration - Valued based on a probability weighting of the future cash flows associated with the potential outcomes. Assets and liabilities measured at fair value on a recurring basis are summarized below: March 31, 2018 Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents $ — $ 21 $ — $ 21 Other assets: Life insurance policies — 26,240 — 26,240 Total assets measured at fair value $ — $ 26,261 $ — $ 26,261 Other current liabilities: Contingent consideration $ — $ — $ 3,053 $ 3,053 Total liabilities measured at fair value $ — $ — $ 3,053 $ 3,053 December 30, 2017 Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents $ — $ 21 $ — $ 21 Other assets: Life insurance policies — 26,358 — 26,358 Total assets measured at fair value $ — $ 26,379 $ — $ 26,379 Other current liabilities: Contingent consideration $ — $ — $ 298 $ 298 Total liabilities measured at fair value $ — $ — $ 298 $ 298 Contingent Consideration The following table provides a rollforward of the contingent consideration related to previous business acquisitions. See Note 2, “Business Acquisitions and Divestiture.” Three Months Ended March 31, 2018 April 1, 2017 (in thousands) Beginning balance $ 298 $ 3,621 Additions 2,746 — Payments — (406 ) Change in fair value 9 — Reversal of previously recorded contingent liability — (14 ) Ending balance $ 3,053 $ 3,201 The unobservable inputs used in the fair value measurement of the Company’s contingent consideration are the probabilities of successful achievement of certain financial targets and a discount rate. Increases or decreases in any of the probabilities of success would result in a higher or lower fair value measurement, respectively. Increases or decreases in the discount rate would result in a lower or higher fair value measurement, respectively. Debt Instruments The book value of the Company’s term and revolving loans, which are variable rate loans carried at amortized cost, approximates the fair value based on current market pricing of similar debt. As the fair value is based on significant other observable inputs, including current interest and foreign currency exchange rates, it is deemed to be Level 2 within the fair value hierarchy. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill The following table provides a rollforward of the Company’s goodwill: Adjustments to Goodwill December 30, 2017 Acquisitions Foreign Exchange March 31, 2018 (in thousands) RMS $ 58,122 $ — $ 706 $ 58,828 DSA 605,176 18,165 8,854 632,195 Manufacturing 141,608 — 3,305 144,913 Total $ 804,906 $ 18,165 $ 12,865 $ 835,936 The increase in goodwill during the three months ended March 31, 2018 related primarily to the acquisition of KWS BioTest in the DSA reportable segment, and the impact of foreign exchange . Intangible Assets, Net The following table displays intangible assets, net by major class: March 31, 2018 December 30, 2017 Gross Accumulated Amortization Net Gross Accumulated Amortization Net (in thousands) Backlog $ — $ — $ — $ 8,111 $ (8,111 ) $ — Technology 83,428 (30,893 ) 52,535 81,309 (27,157 ) 54,152 Trademarks and trade names 8,873 (4,609 ) 4,264 8,661 (4,562 ) 4,099 Other 17,533 (8,456 ) 9,077 17,465 (7,845 ) 9,620 Other intangible assets 109,834 (43,958 ) 65,876 115,546 (47,675 ) 67,871 Client relationships 551,326 (246,906 ) 304,420 540,425 (238,534 ) 301,891 Intangible assets $ 661,160 $ (290,864 ) $ 370,296 $ 655,971 $ (286,209 ) $ 369,762 |
Long-Term Debt and Capital Leas
Long-Term Debt and Capital Lease Obligations | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS | LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS Long-Term Debt Long-term debt, net consists of the following: March 31, 2018 December 30, 2017 (in thousands) Term loans $ — $ 601,250 Revolving facility 1,091,304 500,997 Other long-term debt 18,420 18,292 Total debt 1,109,724 1,120,539 Less: Current portion of long-term debt (111 ) (28,546 ) Long-term debt 1,109,613 1,091,993 Debt discount and debt issuance costs (8,346 ) (5,770 ) Long-term debt, net $ 1,101,267 $ 1,086,223 As of March 31, 2018 and December 30, 2017 , the weighted average interest rate on the Company’s debt was 2.13% and 2.45% , respectively. On March 26, 2018, the Company amended and restated its credit facility creating a $ 2.3 billion credit facility ($ 2.3B Credit Facility) which extends the maturity date for the credit facility. The $ 2.3B Credit Facility provides for a $ 750.0 million term loan and a $ 1.55 billion multi-currency revolving facility. The amendment was accounted for as a debt modification. In connection with the transaction, the Company capitalized approximately $6.2 million on the balance sheet as of March 31, 2018 and expensed approximately $1.0 million of debt issuance costs recorded in Interest expense for the three month period ended March 31, 2018 . The term loan facility matures in 19 quarterly installments with the last installment due March 26, 2023. The revolving facility matures on March 26, 2023, and requires no scheduled payment before that date. Under specified circumstances, the Company has the ability to increase the term loan and/or revolving facility by up to $ 1.0 billion in the aggregate. The interest rates applicable to the term loan and revolving facility under the $ 2.3B Credit Facility are, at the Company’s option, equal to either the base rate (which is the higher of (1) the prime rate, (2) the federal funds rate plus 0.50% , or (3) the one-month adjusted LIBOR rate plus 1.0% ) or the adjusted LIBOR rate, plus an interest rate margin based upon the Company’s leverage ratio. The $ 2.3B Credit Facility includes certain customary representations and warranties, events of default, notices of material adverse changes to the Company’s business and negative and affirmative covenants. These covenants include (1) maintenance of a ratio of consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) less capital expenditures to consolidated cash interest expense, for any period of four consecutive fiscal quarters, of no less than 3.50 to 1.0 as well as (2) maintenance of a ratio of consolidated indebtedness to consolidated EBITDA for any period of four consecutive fiscal quarters, of no more than 4.50 to 1.0 with step downs to 3.50 to 1.0 by the last day of the first quarter of 2020. As of March 31, 2018 , the Company was compliant with all covenants. The obligations of the Company under the $ 2.3B Credit Facility are collateralized by substantially all of the assets of the Company. Upon the execution of the $ 2.3B Credit Facility, the Company paid the remaining $601.3 million balance on the previously drawn term loan with proceeds from the new revolving facility. As of March 31, 2018, the Company had no outstanding term loans. On April 3, 2018, in conjunction with the purchase of MPI Research, the Company drew $750.0 million of term loan from the $ 2.3B Credit Facility. Senior Notes Offering On April 3, 2018, the Company entered into an indenture (Indenture) with MUFG Union Bank, N.A., (Trustee) in connection with the offering of $500.0 million in aggregate principal amount of the Company’s 5.5% Senior Notes (Senior Notes) due 2026 in an unregistered offering. Under the terms of the Indenture, interest on the Senior Notes is payable semi-annually on April 1 and October 1 of each year, beginning on October 1, 2018. The Senior Notes are guaranteed fully and unconditionally, jointly and severally on a senior unsecured basis (Note Guarantees) by the Company and certain of its U.S. subsidiaries. In connection with the transaction, the Company incurred approximately $7.4 million of debt issuance costs, of which $6.3 million was capitalized upon the issuance of the Senior Notes on April 3, 2018. The Company may redeem all or part of the Senior Notes at any time prior to April 1, 2021, at its option, at a redemption price equal to 100% of the principal amount of such Senior Notes plus the Applicable Premium (as defined in the Indenture). The Company may also redeem up to 40% of the Senior Notes with the proceeds of certain equity offerings completed before April 1, 2021, at a redemption price equal to 105.5% of the principal amount of such Senior Notes. On or after April 1, 2021, the Company may on any one or more occasions redeem all or a part of the Senior Notes, at the redemption prices specified in the Indenture based on the applicable date of redemption. Upon the occurrence of a Change of Control Triggering Event (as defined in the Indenture), the Company will be required to offer to repurchase the Senior Notes at a purchase price equal to 101% of the aggregate principal amount of such Senior Notes. Any redemption of the Senior Notes would also require settlement of accrued and unpaid interest, if any, to but excluding the redemption date. The Indenture contains certain covenants, including but not limited to, limitations and restrictions on the ability of the Company and its U.S. subsidiaries to (i) create certain liens, (ii) enter into any Sale and Leaseback Transaction (as defined in the Indenture) with respect to any property, and (iii) merge, consolidate, sell or otherwise dispose of all or substantially all of their assets. These covenants are subject to a number of conditions, qualifications, exceptions and limitations. Any event of default, as defined, could result in the acceleration of the repayment of the obligations. Net proceeds from the Senior Notes of $493.8 million were used to partially repay the outstanding revolving credit facility on April 3, 2018. Commitment Letter On February 12, 2018, the Company secured a $830 million commitment under a 364-day senior unsecured bridge loan facility (the “ Bridge Facility ”) for the purpose of financing the acquisition of MPI Research. The Bridge Facility was terminated as of April 3, 2018 in connection upon the successful acquisition of MPI Research. Debt issuance costs of $1.8 million incurred in connection with the Bridge Facility were capitalized as of March 31, 2018 and expensed upon termination of the agreement on April 3, 2018. In addition, in the three months ended March 31, 2018 , the Company incurred and expensed $2.0 million of fees pertaining to a temporary backstop facility related to the negotiation of the Credit Facility. These costs were included in Interest expense in the accompanying unaudited condensed consolidated statements of income. Letters of Credit As of March 31, 2018 and December 30, 2017 , the Company had $4.9 million in outstanding letters of credit. Capital Lease Obligations The Company’s capital lease obligations amounted to $31.3 million and $30.3 million as of March 31, 2018 and December 30, 2017 , respectively. |
Equity and Noncontrolling Inter
Equity and Noncontrolling Interest | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
EQUITY AND NONCONTROLLING INTEREST | EQUITY AND NONCONTROLLING INTERESTS Earnings Per Share The following table reconciles the numerator and denominator in the computations of basic and diluted earnings per share: Three Months Ended March 31, 2018 April 1, 2017 (in thousands) Numerator: Income from continuing operations, net of income taxes $ 53,268 $ 46,963 Loss from discontinued operations, net of income taxes (23 ) (4 ) Less: Net income attributable to noncontrolling interests 614 181 Net income attributable to common shareholders $ 52,631 $ 46,778 Denominator: Weighted-average shares outstanding - Basic 47,785 47,546 Effect of dilutive securities: Stock options, restricted stock units, performance share units and restricted stock 1,043 875 Weighted-average shares outstanding - Diluted 48,828 48,421 Options to purchase 0.5 million and 1.1 million shares for the three months ended March 31, 2018 and April 1, 2017 , respectively, as well as a non-significant number of restricted shares, restricted stock units (RSUs), and performance share units (PSUs), were not included in computing diluted earnings per share because their inclusion would have been anti-dilutive. Basic weighted-average shares outstanding for both the three months ended March 31, 2018 and April 1, 2017 excluded the impact of 1.1 million shares of non-vested restricted stock and RSUs. Treasury Shares During the three months ended March 31, 2018, the Company did not repurchase any shares under its authorized stock repurchase program. During the three months ended April 1, 2017 , the Company repurchased 0.4 million shares totaling $32.1 million under its $1.3 billion authorized stock repurchase program. As of March 31, 2018 , the Company had $115.5 million remaining on the authorized stock repurchase program. The Company’s stock-based compensation plans permit the netting of common stock upon vesting of restricted stock, RSUs, and PSUs in order to satisfy individual statutory tax withholding requirements. During the three months ended March 31, 2018 and April 1, 2017 , the Company acquired 0.1 million shares for $13.5 million and 0.2 million shares for $16.1 million , respectively, from such netting. Accumulated Other Comprehensive Income (Loss) Changes to each component of accumulated other comprehensive income (loss), net of income taxes, are as follows: Foreign Currency Translation Adjustment and Other Pension and Other Post-Retirement Benefit Plans Total (in thousands) December 30, 2017 $ (77,545 ) $ (67,186 ) $ (144,731 ) Other comprehensive income before reclassifications 24,867 — 24,867 Amounts reclassified from accumulated other comprehensive loss — 459 459 Net current period other comprehensive income 24,867 459 25,326 Amount reclassified from accumulated other comprehensive loss due to adoption of ASU 2018-02 (See Note 1) — 3,330 3,330 Income tax expense (benefit) 1,840 (118 ) 1,722 March 31, 2018 $ (54,518 ) $ (69,939 ) $ (124,457 ) Nonredeemable Noncontrolling Interest The Company has an investment in an entity whose financial results are consolidated in the Company’s financial statements, as it has the ability to exercise control over this entity. The interest of the noncontrolling party in this entity has been recorded as noncontrolling interest. The activity within the nonredeemable noncontrolling interest was immaterial during the three months ended March 31, 2018 and April 1, 2017 . Redeemable Noncontrolling Interest The Company’s redeemable noncontrolling interest in Vital River is 13% . The Company has the right to purchase, and the noncontrolling interest holders have the right to sell, the remaining 13% equity interest at a contractually defined redemption value, subject to a redemption floor (embedded derivative). These rights are exercisable beginning in 2019 and are accelerated in certain events. The redeemable noncontrolling interest is measured at the greater of the amount that would be paid if settlement occurred as of the balance sheet date based on the contractually defined redemption value ( $16.9 million as of March 31, 2018 ) and its carrying amount adjusted for net income (loss) attributable to the noncontrolling interest. As the noncontrolling interest holders have the ability to require the Company to purchase the remaining 13% interest, the noncontrolling interest is classified in the mezzanine section of the unaudited condensed consolidated balance sheets, which is presented above the equity section and below liabilities. The agreement does not limit the amount that the Company could be required to pay to purchase the remaining 13% equity interest. The following table provides a rollforward of the activity related to the Company’s redeemable noncontrolling interest: Three Months Ended March 31, 2018 April 1, 2017 (in thousands) Beginning balance $ 16,609 $ 14,659 Total gains or losses (realized/unrealized): Net income (loss) attributable to noncontrolling interest 150 (78 ) Foreign currency translation 564 117 Ending balance $ 17,323 $ 14,698 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s effective tax rate for the three months ended March 31, 2018 and April 1, 2017 was 15.5% and 39.8% , respectively. For the three months ended March 31, 2018 , the decrease was primarily attributable to the tax on the gain on the divestiture of the CDMO business of $18.0 million in the first quarter of 2017 and tax benefits from favorable taxing authority rulings for the three months ended March 31, 2018 of $2.7 million . During the three months ended March 31, 2018 , the Company’s unrecognized tax benefits decreased by $3.7 million to $21.0 million , primarily due to benefits from a favorable tax ruling, offset with an additional quarter of Canadian Scientific Research and Experimental Development Credit reserves. The amount of unrecognized income tax benefits that would impact the effective tax rate decreased by $3.5 million to $19.3 million , for the same reasons listed above. The amount of accrued interest on unrecognized tax benefits was $2.6 million at March 31, 2018 . The Company estimates that it is reasonably possible that the unrecognized tax benefits will decrease by up to $1.9 million over the next twelve-month period, primarily as a result of the outcome of pending tax audits. The Company continues to monitor its accounting for the elements of U.S. Tax Reform enacted in December 2017. The Company has made reasonable estimates of the effects of U.S. Tax Reform to its consolidated financial statements based on guidance and regulations released by the Internal Revenue Service. The SEC has issued SAB 118, which allows for a measurement period of up to one year after the enactment date of U.S. Tax Reform to finalize the recording of the related tax impacts. The Company has not recorded any measurement period adjustments during the quarter ended March 31, 2018 to the provisional amounts recorded in the fourth quarter of 2017. The Company anticipates finalizing and recording any adjustments resulting from the release of any additional guidance and interpretations by the end of its fiscal year ending December 29, 2018 . The Company conducts business in a number of tax jurisdictions. As a result, it is subject to tax audits in jurisdictions including the U.S., U.K., China, France, Germany, and Canada. With few exceptions, the Company is no longer subject to U.S. and international income tax examinations for years before 2015. The Company and certain of its subsidiaries have ongoing tax controversies with various tax authorities in the U.S., Canada, Germany, and France. The Company does not believe that resolution of these controversies will have a material impact on its financial position or results of operations Income tax (benefit) expense recorded to Other comprehensive income related to change in unrecognized pension gains, losses, and prior service costs was $(0.1) million and $0.2 million for the three months ended March 31, 2018 and April 1, 2017 , respectively. Income tax expense recorded to foreign currency translation adjustment was $1.8 million for the three months ended March 31, 2018 . |
Pension and Other Post-Retireme
Pension and Other Post-Retirement Benefit Plans | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS | PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS The Company retrospectively adopted ASU 2017-07 during the three months ended March 31, 2018 . Service cost is reflected in Cost of services provided (excluding amortization of intangible assets) and Selling, general and administrative within the unaudited condensed consolidated statements of income. All other components of net periodic cost is recorded in Other income, net within the unaudited condensed consolidated statements of income. See Note 1, “Basis of Presentation.” The following table provides the components of net periodic cost for the Company’s pension, deferred compensation and executive supplemental life insurance retirement plans: Three Months Ended March 31, 2018 April 1, 2017 (in thousands) Service cost $ 846 $ 754 Interest cost 2,833 2,826 Expected return on plan assets (3,877 ) (3,450 ) Amortization of prior service credit (181 ) (119 ) Amortization of net loss 645 966 Net periodic cost $ 266 $ 977 The net periodic cost for the Company’s other post-retirement benefit plan for the three months ended March 31, 2018 and April 1, 2017 was not significant. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company has stock-based compensation plans under which employees and non-employee directors may be granted stock-based awards such as stock options, restricted stock, RSUs, and PSUs. The following table provides stock-based compensation by the financial statement line item in which it is reflected: Three Months Ended March 31, 2018 April 1, 2017 (in thousands) Cost of revenue $ 1,413 $ 1,546 Selling, general and administrative 9,128 7,940 Stock-based compensation $ 10,541 $ 9,486 During the three months ended March 31, 2018 , the Company granted stock options representing 0.5 million common shares with a per-share weighted-average grant date fair value of $24.81 , RSUs representing 0.2 million common shares with a per-share weighted-average grant date fair value of $109.34 , and PSUs representing 0.2 million common shares with a per-share weighted-average grant date fair value of $117.28 . The maximum number of common shares to be issued upon vesting of PSUs granted during the three months ended March 31, 2018 is 0.4 million . |
Foreign Currency Contracts
Foreign Currency Contracts | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
FOREIGN CURRENCY CONTRACTS | FOREIGN CURRENCY CONTRACTS The Company enters into foreign exchange forward contracts to limit its foreign currency exposure related to intercompany loans that are not of a long-term investment nature. These contracts are recorded at fair value in the Company’s unaudited condensed consolidated balance sheets and are not designated as hedging instruments. Any gains or losses on such contracts are immediately recognized in Other income, net, and are largely offset by the remeasurement of the underlying intercompany loan balances. The Company did not have any foreign currency contracts open as of March 31, 2018 and December 30, 2017 . |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation Various lawsuits, claims and proceedings of a nature considered normal to its business are pending against the Company. While the outcome of any of these proceedings cannot be accurately predicted, the Company does not believe the ultimate resolution of any of these existing matters would have a material adverse effect on the Company’s business or financial condition. Lease Commitments During the three months ended March 31, 2018 , the Company assumed or entered into new lease agreements or exercised options to extend the lease terms for certain existing leases. As a result, the Company’s lease obligations through 2032 increased by $2.3 million during the three months ended March 31, 2018 . |
Restructuring and Asset Impairm
Restructuring and Asset Impairment | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING AND ASSET IMPAIRMENT | RESTRUCTURING AND ASSET IMPAIRMENTS Global RMS Restructuring Initiatives In the fourth quarter of fiscal year 2017, the Company committed to a plan to further reduce costs and improve operating efficiencies in its RMS reportable segment. The Company plans to cease use of its production facility in Maryland for RMS before the end of 2018 and consolidate production in other facilities. Additionally, the Company will reduce its workforce at various other global RMS facilities during 2018. The following table presents a summary of severance and transition costs, and asset impairments (referred to as restructuring costs) related to this initiative within the unaudited condensed consolidated statements of income for the three months ended March 31, 2018 . March 31, 2018 Severance and Transition Costs Asset Impairments Total (in thousands) Cost of services provided and products sold (excluding amortization of intangible assets) $ 353 $ 515 $ 868 Selling, general and administrative 170 — 170 Total $ 523 $ 515 $ 1,038 Restructuring costs incurred during the fourth quarter of 2017 were $18.1 million , which primarily related to non-cash asset impairments and accelerated depreciation charges of $17.7 million . In addition to the costs incurred during the three months ended March 31, 2018 , remaining restructuring costs related to this initiative in 2018 are expected to be between $5.5 million and $6.0 million , of which approximately $5.0 million relate to employee separation and facility exit costs, including accelerated lease obligations. All of the costs are recorded in the RMS reportable segment. The cash portion of the total costs are not expected to exceed $8 million . The Company’s existing lease obligation continues through 2028. Other Restructuring Initiatives In recent fiscal years, the Company has undertaken productivity improvement initiatives within all reportable segments at various locations across the U.S., Europe, and Japan. This includes workforce reductions, resulting in severance and transition costs; and cost related to the consolidation of facilities, resulting in asset impairment and accelerated depreciation charges. The Company’s existing lease obligations for certain facilities continue through various dates, the latest being March 2028. The following table presents a summary of restructuring costs related to these initiatives within the unaudited condensed consolidated statements of income for the three months ended March 31, 2018 and April 1, 2017 . March 31, 2018 April 1, 2017 Severance and Transition Costs Asset Impairments Total Severance and Transition Costs Asset Impairments Total (in thousands) Cost of services provided and products sold (excluding amortization of intangible assets) $ 563 $ 22 $ 585 $ 923 $ 60 $ 983 Selling, general and administrative 53 — 53 94 — 94 Total $ 616 $ 22 $ 638 $ 1,017 $ 60 $ 1,077 The following table presents restructuring costs by reportable segment for these productivity improvement initiatives: Three Months Ended March 31, 2018 April 1, 2017 (in thousands) DSA $ (232 ) $ 256 Manufacturing 870 821 Total $ 638 $ 1,077 The following table provides a rollforward for all of the Company’s severance and transition costs, and lease obligation liabilities related to all restructuring activities: Three Months Ended March 31, 2018 April 1, 2017 (in thousands) Beginning balance $ 6,856 $ 8,102 Expense 1,139 1,017 Payments / utilization (1,149 ) (2,690 ) Foreign currency adjustments 207 102 Ending balance $ 7,053 $ 6,531 As of March 31, 2018 and April 1, 2017 , $3.1 million and $2.6 million of severance and other personnel related costs liabilities and lease obligation liabilities, respectively, were included in accrued compensation and accrued liabilities within the Company’s unaudited condensed consolidated balance sheets and $3.9 million and $4.0 million , respectively, were included in other long-term liabilities within the Company’s unaudited condensed consolidated balance sheets. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | The preparation of unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires that the Company make estimates and judgments that may affect the reported amounts of assets, liabilities, redeemable noncontrolling interest, revenues, expenses and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, judgments, and methodologies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known. |
Consolidation | The Company’s unaudited condensed consolidated financial statements reflect its financial statements and those of its subsidiaries in which the Company holds a controlling financial interest. For consolidated entities in which the Company owns or is exposed to less than 100% of the economics, the Company records net income (loss) attributable to noncontrolling interests in its consolidated statements of income equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. Intercompany balances and transactions are eliminated in consolidation. |
Fiscal Period | The Company’s fiscal year is typically based on 52-weeks, with each quarter composed of 13 weeks ending on the last Saturday on, or closest to, March 31, June 30, September 30, and December 31. |
Newly Adopted and Issued Accounting Pronouncements | Newly Adopted Accounting Pronouncements In March 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-05, “Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SAB 118).” This standard amends Accounting Standards Codification 740, Income Taxes (ASC 740) to provide guidance on accounting for the tax effects of U.S. Tax Reform pursuant to SAB 118, which allows companies to complete the accounting under ASC 740 within a one-year measurement period from the enactment date of U.S. Tax Reform. This standard is effective upon issuance and the Company has complied with the amendments. See Note 11, “Income Taxes” for further discussion. In February 2018, the FASB issued ASU 2018-02, “ Income Statement - Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” The standard allows for reclassification from accumulated other comprehensive income to retained earnings for the stranded tax effects arising from the change in the reduction of the U.S. federal statutory income tax rate to 21% from 35%. During the three months ended March 31, 2018, the Company elected to early adopt this standard as permitted on a prospective basis, resulting in a reclassification of $3.3 million from accumulated other comprehensive income to retained earnings as a result of remeasuring the Company’s deferred tax liabilities related to its pension and other post-retirement benefit plan gains and losses. The Company’s policy is to release material stranded tax effects on a specific identification basis. In March 2017, the FASB issued ASU 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” The standard requires an employer to disaggregate the service cost component from the other components of net benefit cost and provides explicit guidance on the presentation of the service cost component and the other components of net benefit cost in the statements of income. This standard became effective for the Company in the three months ended March 31, 2018. The Company applied the changes retrospectively to the presentation of the service cost component and the other components of net periodic pension cost in the statements of income for all periods presented as required. The adoption of this standard increased operating income by $0.2 million during the three months ended April 1, 2017. In connection with the impact of operating income to the Company’s reportable segments, Research Models and Services (RMS) decreased by less than $0.1 million , Discovery and Safety Assessment (DSA) decreased by $0.3 million , Manufacturing Support (Manufacturing) decreased by less than $0.1 million , and Unallocated corporate increased by $0.6 million during the three months ended April 1, 2017. In January 2017, the FASB issued ASU 2017-01, “Clarifying the Definition of a Business.” The standard clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions of assets or businesses. This standard became effective for the Company in the three months ended March 31, 2018 and did not have a significant impact on the consolidated financial statements and related disclosures. In October 2016, the FASB issued ASU 2016-16, “Intra-Entity Transfers of Assets Other Than Inventory.” The standard requires the immediate recognition of tax effects for an intra-entity asset transfer other than inventory. This standard became effective for the Company in the three months ended March 31, 2018 and did not have a significant impact on the consolidated financial statements and related disclosures. In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Liabilities.” This standard, including a subsequently issued amendment under ASU 2018-03, “ Technical Corrections and Improvements to Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities” , requires equity investments that are not accounted for under the equity method of accounting to be measured at fair value with changes recognized in net income, simplifies the impairment assessment of certain equity investments, and updates certain presentation and disclosure requirements. This standard became effective for the Company in the three months ended March 31, 2018, resulting in an increase of $1.9 million to other assets with a corresponding increase to retained earnings and deferred taxes of $1.4 million and $0.5 million , respectively. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” The standard, including subsequently issued amendments, replaced most existing revenue recognition guidance in U.S. GAAP and permits the use of either a modified retrospective or cumulative effect transition method. The Company elected the modified retrospective transition method. The standard requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The standard became effective for the Company in the three months ended March 31, 2018. See Note 3, “Revenue From Contracts With Customers” for a discussion of the Company’s adoption of this standard and its impact on the consolidated financial statements and related disclosures. Newly Issued Accounting Pronouncements In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815) Targeted Improvements to Accounting for Hedging Activities.” ASU 2017-12 refines and expands hedge accounting for both financial and commodity risks. It also creates more transparency around how economic results are presented, both on the face of the financial statements and in the disclosures. In addition, this ASU makes certain targeted improvements to simplify the application of hedge accounting guidance. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, and requires the modified retrospective approach. Early adoption is permitted. This update applies to all existing hedging relationships on the date of adoption with the cumulative effect of adoption being reflected as of the beginning of the fiscal year of adoption. The Company is still evaluating the impact this standard will have on its consolidated financial statements and related disclosures . In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment.” The standard simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. This standard is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and will be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, “Leases.” The standard established the principles that lessees and lessors will apply to report useful information to users of financial statements about the amount, timing and uncertainty of cash flows arising from a lease. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is still evaluating the full impact this standard will have on its consolidated financial statements and related disclosures, but expects to recognize substantially all of its leases on the balance sheet by recording a right-to-use asset and a corresponding lease liability. |
Business Acquisitions and Div24
Business Acquisitions and Divestiture (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Summary of Purchase Price Allocation | The preliminary purchase price allocation of $22.0 million , net of $1.0 million of cash acquired, was as follows: January 11, 2018 (in thousands) Trade receivables (contractual amount of $1,309) $ 1,309 Other current assets (excluding cash) 99 Property, plant and equipment 1,136 Definite-lived intangible assets - client relationships 3,647 Goodwill 18,165 Current liabilities (1,575 ) Deferred revenue (151 ) Long-term liabilities (596 ) Total purchase price allocation $ 22,034 The purchase price allocation of $20.1 million , net of $ 0.6 million of cash acquired, was as follows: August 4, 2017 (in thousands) Trade receivables (contractual amount of $1,146) $ 1,146 Other current assets (excluding cash) 640 Property, plant and equipment 664 Other long-term assets 29 Definite-lived intangible assets 9,300 Goodwill 11,762 Current liabilities (863 ) Deferred revenue (405 ) Long-term liabilities (2,151 ) Total purchase price allocation $ 20,122 |
Definite-Lived Intangible Assets Acquired as Part of Business Combination | The breakout of definite-lived intangible assets acquired was as follows: Definite-Lived Intangible Assets Weighted Average Amortization Life (in thousands) (in years) Client relationships $ 7,000 13 Other intangible assets 2,300 10 Total definite-lived intangible assets $ 9,300 12 |
Carrying Amounts of Assets and Liabilities | As of February 10, 2017 , the carrying amounts of the major classes of assets and liabilities associated with the divestiture of the CDMO business were as follows (in thousands): Assets Current assets $ 5,505 Property, plant and equipment, net 11,174 Goodwill 35,857 Long-term assets 17,154 Total assets $ 69,690 Liabilities Deferred revenue $ 4,878 Other current liabilities 1,158 Total liabilities $ 6,036 |
Revenue From Contracts With C25
Revenue From Contracts With Customers (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following tables disaggregate the Company’s revenue by major business line and timing of transfer of products or services for the three months ended March 31, 2018 (in thousands): Major Products/Service Lines: RMS $ 133,958 DSA 259,992 Manufacturing 100,020 Total revenue $ 493,970 Timing of Revenue Recognition: RMS Services and products transferred over time $ 48,726 Services and products transferred at a point in time 85,232 DSA Services and products transferred over time 259,744 Services and products transferred at a point in time 248 Manufacturing Services and products transferred over time 28,571 Services and products transferred at a point in time 71,449 Total revenue $ 493,970 Revenue for each significant product or service offering is as follows: Three Months Ended March 31, 2018 April 1, 2017 (in thousands) RMS $ 133,958 $ 127,161 DSA 259,992 227,758 Manufacturing 100,020 90,844 Total revenue $ 493,970 $ 445,763 Revenue by geographic area is as follows: U.S. Europe Canada Asia Pacific Other Consolidated (in thousands) Three Months Ended: March 31, 2018 $ 248,980 $ 160,826 $ 48,578 $ 34,520 $ 1,066 $ 493,970 April 1, 2017 231,311 136,881 47,187 30,095 289 445,763 |
Schedule of Estimated Revenue Related to Performance Obligations | The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially satisfied) as of March 31, 2018 : Revenues Expected to be Recognized in Future Periods Less than 1 Year 1 to 3 Years Total (in thousands) DSA $ 72,872 $ 55,029 $ 127,901 Manufacturing 132 255 387 Total $ 73,004 $ 55,284 $ 128,288 |
Schedule of Client Receivables, Contract Assets and Contract Liabilities | The following table provides information about client receivables, contract assets, and contract liabilities from contracts with customers: March 31, 2018 December 30, 2017 (1) (in thousands) Balances from contracts with customers only: Client receivables $ 343,546 $ 335,839 Contract assets (unbilled revenue) 98,801 96,297 Contract liabilities (current and long-term deferred revenue) 108,786 125,882 Contract liabilities (customer contract deposits) 23,566 — (1) The beginning balance as of December 30, 2017 is presented under the guidance of ASC 605. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Revenue and Other Financial Information by Business Segment | The following table presents revenue and other financial information by reportable segment: Three Months Ended March 31, 2018 April 1, 2017 (in thousands) RMS Revenue $ 133,958 $ 127,161 Operating income 38,527 37,690 Depreciation and amortization 4,853 5,092 Capital expenditures 4,625 2,603 DSA Revenue $ 259,992 $ 227,758 Operating income 40,859 38,335 Depreciation and amortization 20,787 19,369 Capital expenditures 12,802 8,323 Manufacturing Revenue $ 100,020 $ 90,844 Operating income 28,523 26,600 Depreciation and amortization 5,736 5,962 Capital expenditures 6,834 2,292 |
Reconciliation of Segment Operating Income to Consolidated Operating Income | For the three months ended March 31, 2018 and April 1, 2017 , reconciliations of segment operating income, depreciation and amortization, and capital expenditures to the respective consolidated amounts are as follows: Operating Income Depreciation and Amortization Capital Expenditures March 31, 2018 April 1, 2017 March 31, 2018 April 1, 2017 March 31, 2018 April 1, 2017 (in thousands) Total reportable segments $ 107,909 $ 102,625 $ 31,376 $ 30,423 $ 24,261 $ 13,218 Unallocated corporate (40,080 ) (32,919 ) 1,834 1,988 3,465 2,702 Total consolidated $ 67,829 $ 69,706 $ 33,210 $ 32,411 $ 27,726 $ 15,920 |
Revenue Disaggregated by Products and Services and Geographic Area | The following tables disaggregate the Company’s revenue by major business line and timing of transfer of products or services for the three months ended March 31, 2018 (in thousands): Major Products/Service Lines: RMS $ 133,958 DSA 259,992 Manufacturing 100,020 Total revenue $ 493,970 Timing of Revenue Recognition: RMS Services and products transferred over time $ 48,726 Services and products transferred at a point in time 85,232 DSA Services and products transferred over time 259,744 Services and products transferred at a point in time 248 Manufacturing Services and products transferred over time 28,571 Services and products transferred at a point in time 71,449 Total revenue $ 493,970 Revenue for each significant product or service offering is as follows: Three Months Ended March 31, 2018 April 1, 2017 (in thousands) RMS $ 133,958 $ 127,161 DSA 259,992 227,758 Manufacturing 100,020 90,844 Total revenue $ 493,970 $ 445,763 Revenue by geographic area is as follows: U.S. Europe Canada Asia Pacific Other Consolidated (in thousands) Three Months Ended: March 31, 2018 $ 248,980 $ 160,826 $ 48,578 $ 34,520 $ 1,066 $ 493,970 April 1, 2017 231,311 136,881 47,187 30,095 289 445,763 |
Summary of Unallocated Corporate Overhead | A summary of unallocated corporate expense consists of the following : Three Months Ended March 31, 2018 April 1, 2017 (in thousands) Stock-based compensation $ 6,991 $ 5,583 Compensation, benefits, and other employee-related expenses 20,596 14,381 External consulting and other service expenses 2,934 5,767 Information technology 2,465 2,393 Depreciation 1,834 1,987 Acquisition and integration 2,864 21 Other general unallocated corporate 2,396 2,787 Total unallocated corporate expense $ 40,080 $ 32,919 |
Supplemental Balance Sheet In27
Supplemental Balance Sheet Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Supplemental Balance Sheet Information [Abstract] | |
Composition of Net Trade Receivables | The composition of trade receivables, net is as follows: March 31, 2018 December 30, 2017 (in thousands) Client receivables $ 343,546 $ 335,839 Unbilled revenue 98,801 96,297 Total 442,347 432,136 Less: Allowance for doubtful accounts (2,238 ) (2,120 ) Trade receivables, net $ 440,109 $ 430,016 |
Composition of Inventories | The composition of inventories is as follows: March 31, 2018 December 30, 2017 (in thousands) Raw materials and supplies $ 20,353 $ 19,858 Work in process 19,080 18,200 Finished products 79,613 76,898 Inventories $ 119,046 $ 114,956 |
Composition of Other Current Assets | The composition of other current assets is as follows: March 31, 2018 December 30, 2017 (in thousands) Investments $ 2,542 $ 28,489 Prepaid income taxes 49,932 52,234 Restricted cash 605 592 Other current assets $ 53,079 $ 81,315 |
Composition of Other Assets | The composition of other assets is as follows: March 31, 2018 December 30, 2017 (in thousands) Life insurance policies $ 33,943 $ 34,008 Venture capital investments 76,076 71,101 Restricted cash 2,021 1,945 Other 24,592 16,948 Other assets $ 136,632 $ 124,002 |
Composition of Other Current Liabilities | The composition of other current liabilities is as follows: March 31, 2018 December 30, 2017 (in thousands) Accrued income taxes $ 34,532 $ 43,250 Customer contract deposits 23,566 — Other 4,474 1,210 Other current liabilities $ 62,572 $ 44,460 |
Composition of Other Long-Term Liabilities | The composition of other long-term liabilities is as follows: March 31, 2018 December 30, 2017 (in thousands) U.S. Transition Tax $ 66,851 $ 61,038 Long-term pension liability 51,607 52,364 Accrued executive supplemental life insurance retirement plan and deferred compensation plan 37,935 37,582 Other 48,478 43,831 Other long-term liabilities $ 204,871 $ 194,815 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized below: March 31, 2018 Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents $ — $ 21 $ — $ 21 Other assets: Life insurance policies — 26,240 — 26,240 Total assets measured at fair value $ — $ 26,261 $ — $ 26,261 Other current liabilities: Contingent consideration $ — $ — $ 3,053 $ 3,053 Total liabilities measured at fair value $ — $ — $ 3,053 $ 3,053 December 30, 2017 Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents $ — $ 21 $ — $ 21 Other assets: Life insurance policies — 26,358 — 26,358 Total assets measured at fair value $ — $ 26,379 $ — $ 26,379 Other current liabilities: Contingent consideration $ — $ — $ 298 $ 298 Total liabilities measured at fair value $ — $ — $ 298 $ 298 |
Rollforward of Contingent Consideration Related to Previous Acquisitions | The following table provides a rollforward of the contingent consideration related to previous business acquisitions. See Note 2, “Business Acquisitions and Divestiture.” Three Months Ended March 31, 2018 April 1, 2017 (in thousands) Beginning balance $ 298 $ 3,621 Additions 2,746 — Payments — (406 ) Change in fair value 9 — Reversal of previously recorded contingent liability — (14 ) Ending balance $ 3,053 $ 3,201 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Rollforward of Goodwill | The following table provides a rollforward of the Company’s goodwill: Adjustments to Goodwill December 30, 2017 Acquisitions Foreign Exchange March 31, 2018 (in thousands) RMS $ 58,122 $ — $ 706 $ 58,828 DSA 605,176 18,165 8,854 632,195 Manufacturing 141,608 — 3,305 144,913 Total $ 804,906 $ 18,165 $ 12,865 $ 835,936 |
Schedule of Intangible Assets | The following table displays intangible assets, net by major class: March 31, 2018 December 30, 2017 Gross Accumulated Amortization Net Gross Accumulated Amortization Net (in thousands) Backlog $ — $ — $ — $ 8,111 $ (8,111 ) $ — Technology 83,428 (30,893 ) 52,535 81,309 (27,157 ) 54,152 Trademarks and trade names 8,873 (4,609 ) 4,264 8,661 (4,562 ) 4,099 Other 17,533 (8,456 ) 9,077 17,465 (7,845 ) 9,620 Other intangible assets 109,834 (43,958 ) 65,876 115,546 (47,675 ) 67,871 Client relationships 551,326 (246,906 ) 304,420 540,425 (238,534 ) 301,891 Intangible assets $ 661,160 $ (290,864 ) $ 370,296 $ 655,971 $ (286,209 ) $ 369,762 |
Long-Term Debt and Capital Le30
Long-Term Debt and Capital Lease Obligations (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt, net consists of the following: March 31, 2018 December 30, 2017 (in thousands) Term loans $ — $ 601,250 Revolving facility 1,091,304 500,997 Other long-term debt 18,420 18,292 Total debt 1,109,724 1,120,539 Less: Current portion of long-term debt (111 ) (28,546 ) Long-term debt 1,109,613 1,091,993 Debt discount and debt issuance costs (8,346 ) (5,770 ) Long-term debt, net $ 1,101,267 $ 1,086,223 |
Equity and Noncontrolling Int31
Equity and Noncontrolling Interest (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Reconciliation of the Numerator and Denominator in the Computations of the Basic and Diluted Earnings Per Share | The following table reconciles the numerator and denominator in the computations of basic and diluted earnings per share: Three Months Ended March 31, 2018 April 1, 2017 (in thousands) Numerator: Income from continuing operations, net of income taxes $ 53,268 $ 46,963 Loss from discontinued operations, net of income taxes (23 ) (4 ) Less: Net income attributable to noncontrolling interests 614 181 Net income attributable to common shareholders $ 52,631 $ 46,778 Denominator: Weighted-average shares outstanding - Basic 47,785 47,546 Effect of dilutive securities: Stock options, restricted stock units, performance share units and restricted stock 1,043 875 Weighted-average shares outstanding - Diluted 48,828 48,421 |
Schedule of Accumulated Other Comprehensive Income | Changes to each component of accumulated other comprehensive income (loss), net of income taxes, are as follows: Foreign Currency Translation Adjustment and Other Pension and Other Post-Retirement Benefit Plans Total (in thousands) December 30, 2017 $ (77,545 ) $ (67,186 ) $ (144,731 ) Other comprehensive income before reclassifications 24,867 — 24,867 Amounts reclassified from accumulated other comprehensive loss — 459 459 Net current period other comprehensive income 24,867 459 25,326 Amount reclassified from accumulated other comprehensive loss due to adoption of ASU 2018-02 (See Note 1) — 3,330 3,330 Income tax expense (benefit) 1,840 (118 ) 1,722 March 31, 2018 $ (54,518 ) $ (69,939 ) $ (124,457 ) |
Rollforward Redeemable Noncontrolling Interest | The following table provides a rollforward of the activity related to the Company’s redeemable noncontrolling interest: Three Months Ended March 31, 2018 April 1, 2017 (in thousands) Beginning balance $ 16,609 $ 14,659 Total gains or losses (realized/unrealized): Net income (loss) attributable to noncontrolling interest 150 (78 ) Foreign currency translation 564 117 Ending balance $ 17,323 $ 14,698 |
Pension and Other Post-Retire32
Pension and Other Post-Retirement Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of Net Periodic Cost | The following table provides the components of net periodic cost for the Company’s pension, deferred compensation and executive supplemental life insurance retirement plans: Three Months Ended March 31, 2018 April 1, 2017 (in thousands) Service cost $ 846 $ 754 Interest cost 2,833 2,826 Expected return on plan assets (3,877 ) (3,450 ) Amortization of prior service credit (181 ) (119 ) Amortization of net loss 645 966 Net periodic cost $ 266 $ 977 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock-Based Compensation Expense | The following table provides stock-based compensation by the financial statement line item in which it is reflected: Three Months Ended March 31, 2018 April 1, 2017 (in thousands) Cost of revenue $ 1,413 $ 1,546 Selling, general and administrative 9,128 7,940 Stock-based compensation $ 10,541 $ 9,486 |
Restructuring and Asset Impai34
Restructuring and Asset Impairment (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Costs | The following table presents a summary of severance and transition costs, and asset impairments (referred to as restructuring costs) related to this initiative within the unaudited condensed consolidated statements of income for the three months ended March 31, 2018 . March 31, 2018 Severance and Transition Costs Asset Impairments Total (in thousands) Cost of services provided and products sold (excluding amortization of intangible assets) $ 353 $ 515 $ 868 Selling, general and administrative 170 — 170 Total $ 523 $ 515 $ 1,038 The following table presents a summary of restructuring costs related to these initiatives within the unaudited condensed consolidated statements of income for the three months ended March 31, 2018 and April 1, 2017 . March 31, 2018 April 1, 2017 Severance and Transition Costs Asset Impairments Total Severance and Transition Costs Asset Impairments Total (in thousands) Cost of services provided and products sold (excluding amortization of intangible assets) $ 563 $ 22 $ 585 $ 923 $ 60 $ 983 Selling, general and administrative 53 — 53 94 — 94 Total $ 616 $ 22 $ 638 $ 1,017 $ 60 $ 1,077 The following table presents restructuring costs by reportable segment for these productivity improvement initiatives: Three Months Ended March 31, 2018 April 1, 2017 (in thousands) DSA $ (232 ) $ 256 Manufacturing 870 821 Total $ 638 $ 1,077 |
Rollforward of Company's Severance and Transition Costs and Lease Obligation Liabilities | The following table provides a rollforward for all of the Company’s severance and transition costs, and lease obligation liabilities related to all restructuring activities: Three Months Ended March 31, 2018 April 1, 2017 (in thousands) Beginning balance $ 6,856 $ 8,102 Expense 1,139 1,017 Payments / utilization (1,149 ) (2,690 ) Foreign currency adjustments 207 102 Ending balance $ 7,053 $ 6,531 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Apr. 01, 2017 | Dec. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Amount reclassified from accumulated other comprehensive loss to retained earnings | $ 3,330 | ||
Adjustments to operating income related to adoption of new accounting guidance | 67,829 | $ 69,706 | |
Other assets | 136,632 | $ 124,002 | |
Retained earnings | 346,044 | 288,658 | |
Deferred tax assets | 26,237 | $ 22,654 | |
Accounting Standards Update 2017-07 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Adjustments to operating income related to adoption of new accounting guidance | 200 | ||
Accounting Standards Update 2016-01 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Other assets | 1,900 | ||
Retained earnings | 1,400 | ||
Deferred tax assets | 500 | ||
RMS | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Adjustments to operating income related to adoption of new accounting guidance | 38,527 | 37,690 | |
RMS | Accounting Standards Update 2017-07 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Adjustments to operating income related to adoption of new accounting guidance | (100) | ||
DSA | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Adjustments to operating income related to adoption of new accounting guidance | 40,859 | 38,335 | |
DSA | Accounting Standards Update 2017-07 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Adjustments to operating income related to adoption of new accounting guidance | (300) | ||
Manufacturing | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Adjustments to operating income related to adoption of new accounting guidance | 28,523 | 26,600 | |
Manufacturing | Accounting Standards Update 2017-07 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Adjustments to operating income related to adoption of new accounting guidance | (100) | ||
Unallocated corporate | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Adjustments to operating income related to adoption of new accounting guidance | $ (40,080) | (32,919) | |
Unallocated corporate | Accounting Standards Update 2017-07 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Adjustments to operating income related to adoption of new accounting guidance | $ 600 |
Business Acquisitions and Div36
Business Acquisitions and Divestiture - MPI Research Additional Information (Details) - MPI Research - USD ($) $ in Millions | Apr. 03, 2018 | Mar. 31, 2018 |
Business Acquisition [Line Items] | ||
Integration related costs and transaction costs | $ 2.7 | |
Subsequent Event | ||
Business Acquisition [Line Items] | ||
Purchase price | $ 800 |
Business Acquisitions and Div37
Business Acquisitions and Divestiture - KWS BioTest Limited Additional Information (Details) - KWS BioTest Limited $ in Thousands, £ in Millions | Jan. 11, 2018USD ($) | Mar. 31, 2018USD ($) | Jan. 11, 2018GBP (£) |
Business Acquisition [Line Items] | |||
Purchase price | $ 20,300 | ||
Undiscounted contingent payments | 4,200 | £ 3 | |
Purchase price allocation | 22,034 | ||
Cash acquired | $ 1,000 | ||
Integration related costs and transaction costs | $ 400 | ||
Client relationships | |||
Business Acquisition [Line Items] | |||
Weighted average amortization life of intangible assets acquired | 12 years |
Business Acquisitions and Div38
Business Acquisitions and Divestiture - KWS BioTest Limited Purchase Price Allocation (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 11, 2018 | Dec. 30, 2017 |
Business Acquisition [Line Items] | |||
Goodwill | $ 835,936 | $ 804,906 | |
KWS BioTest Limited | |||
Business Acquisition [Line Items] | |||
Trade receivables, contractual amount | $ 1,309 | ||
Trade receivables | 1,309 | ||
Other current assets (excluding cash) | 99 | ||
Property, plant and equipment | 1,136 | ||
Definite-lived intangible assets - client relationships | 3,647 | ||
Goodwill | 18,165 | ||
Current liabilities | (1,575) | ||
Deferred revenue | (151) | ||
Long-term liabilities | (596) | ||
Total purchase price allocation | $ 22,034 |
Business Acquisitions and Div39
Business Acquisitions and Divestiture - Brains On-Line Additional Information (Details) - Brains On-Line $ in Thousands, € in Millions | Aug. 04, 2017USD ($) | Mar. 31, 2018USD ($) | Aug. 04, 2017EUR (€) | Aug. 04, 2017USD ($) |
Business Acquisition [Line Items] | ||||
Purchase price | $ 21,300 | |||
Undiscounted contingent payments | € 6.7 | $ 8,300 | ||
Purchase price allocation | $ 20,122 | |||
Cash acquired | $ 600 | |||
Integration related costs and transaction costs | $ 100 |
Business Acquisitions and Div40
Business Acquisitions and Divestiture - Brains On-Line Purchase Price Allocation (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 30, 2017 | Aug. 04, 2017 |
Business Acquisition [Line Items] | |||
Goodwill | $ 835,936 | $ 804,906 | |
Brains On-Line | |||
Business Acquisition [Line Items] | |||
Trade receivables, contractual amount | $ 1,146 | ||
Trade receivables | 1,146 | ||
Other current assets (excluding cash) | 640 | ||
Property, plant and equipment | 664 | ||
Other long-term assets | 29 | ||
Definite-lived intangible assets | 9,300 | ||
Goodwill | 11,762 | ||
Current liabilities | (863) | ||
Deferred revenue | (405) | ||
Long-term liabilities | (2,151) | ||
Total purchase price allocation | $ 20,122 |
Business Acquisitions and Div41
Business Acquisitions and Divestiture - Brains On-Line Definite-Lived Intangible Assets (Details) - Brains On-Line $ in Thousands | Aug. 04, 2017USD ($) |
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 9,300 |
Weighted Average Amortization Life | 12 years |
Client relationships | |
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 7,000 |
Weighted Average Amortization Life | 13 years |
Other intangible assets | |
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 2,300 |
Weighted Average Amortization Life | 10 years |
Business Acquisitions and Div42
Business Acquisitions and Divestiture - Contract Manufacturing, Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Apr. 01, 2017 | Feb. 10, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain on divestiture | $ 0 | $ 10,577 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | CDMO Business | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Cash received from divestiture | $ 75,000 | ||
Cash and cash equivalents transferred | 600 | ||
Working capital adjustments | $ 300 | ||
Gain on divestiture | $ 10,600 |
Business Acquisitions and Div43
Business Acquisitions and Divestiture - Contract Manufacturing, Schedule of Assets and Liabilities Disposed (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 30, 2017 | Feb. 10, 2017 |
Liabilities | |||
Deferred revenue | $ 1,671 | $ 1,815 | |
Other current liabilities | $ 3,476 | $ 3,942 | |
CDMO Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Assets | |||
Current assets | $ 5,505 | ||
Property, plant and equipment, net | 11,174 | ||
Goodwill | 35,857 | ||
Long-term assets | 17,154 | ||
Total assets | 69,690 | ||
Liabilities | |||
Deferred revenue | 4,878 | ||
Other current liabilities | 1,158 | ||
Total liabilities | $ 6,036 |
Revenue From Contracts With C44
Revenue From Contracts With Customers - Disaggregation of Revenues by Major Business Line (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 493,970 | $ 445,763 |
RMS | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 133,958 | 127,161 |
DSA | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 259,992 | 227,758 |
Manufacturing | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 100,020 | $ 90,844 |
Services and products transferred over time | RMS | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 48,726 | |
Services and products transferred over time | DSA | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 259,744 | |
Services and products transferred over time | Manufacturing | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 28,571 | |
Services and products transferred at a point in time | RMS | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 85,232 | |
Services and products transferred at a point in time | DSA | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 248 | |
Services and products transferred at a point in time | Manufacturing | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 71,449 |
Revenue From Contracts With C45
Revenue From Contracts With Customers - Schedule of Estimated Revenue Related to Performance Obligations (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 73,004 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 55,284 |
Performance obligations expected to be satisfied, expected timing | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 128,288 |
DSA | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 72,872 |
DSA | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 55,029 |
DSA | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 127,901 |
Manufacturing | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 132 |
Manufacturing | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 255 |
Manufacturing | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 387 |
Revenue From Contracts With C46
Revenue From Contracts With Customers - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 30, 2017 | |
Revenue from Contract with Customer [Abstract] | ||
Payment terms | 30 days | |
Unpaid advanced client billings | $ 14,000 | |
Contract liabilities (customer contract deposits) | 23,566 | $ 0 |
Revenue billed during period | 63,000 | |
Revenue recognized during period related to contract liabilities | $ 98,000 |
Revenue From Contracts With C47
Revenue From Contracts With Customers - Schedule of Client Receivables, Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 30, 2017 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Client receivables | $ 343,546 | $ 335,839 |
Contract assets (unbilled revenue) | 98,801 | 96,297 |
Contract liabilities (current and long-term deferred revenue) | 108,786 | |
Contract liabilities (customer contract deposits) | $ 23,566 | 0 |
Calculated under Revenue Guidance in Effect before Topic 606 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Client receivables | 335,839 | |
Contract assets (unbilled revenue) | 96,297 | |
Contract liabilities (current and long-term deferred revenue) | 125,882 | |
Contract liabilities (customer contract deposits) | $ 0 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 3 Months Ended |
Mar. 31, 2018segments | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Information - Revenue a
Segment Information - Revenue and Other Financial Information by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Segment Reporting Information [Line Items] | ||
Total revenue | $ 493,970 | $ 445,763 |
Operating income | 67,829 | 69,706 |
Depreciation and amortization | 33,210 | 32,411 |
Capital expenditures | 27,726 | 15,920 |
RMS | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 133,958 | 127,161 |
Operating income | 38,527 | 37,690 |
Depreciation and amortization | 4,853 | 5,092 |
Capital expenditures | 4,625 | 2,603 |
DSA | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 259,992 | 227,758 |
Operating income | 40,859 | 38,335 |
Depreciation and amortization | 20,787 | 19,369 |
Capital expenditures | 12,802 | 8,323 |
Manufacturing | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 100,020 | 90,844 |
Operating income | 28,523 | 26,600 |
Depreciation and amortization | 5,736 | 5,962 |
Capital expenditures | $ 6,834 | $ 2,292 |
Segment Information - Reconcili
Segment Information - Reconciliation of Segment Operating Income, Depreciation and Amortization, and Capital Expenditures (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Segment Reporting Information [Line Items] | ||
Operating income | $ 67,829 | $ 69,706 |
Depreciation and amortization | 33,210 | 32,411 |
Capital expenditures | 27,726 | 15,920 |
Total reportable segments | ||
Segment Reporting Information [Line Items] | ||
Operating income | 107,909 | 102,625 |
Depreciation and amortization | 31,376 | 30,423 |
Capital expenditures | 24,261 | 13,218 |
Unallocated corporate | ||
Segment Reporting Information [Line Items] | ||
Operating income | (40,080) | (32,919) |
Depreciation and amortization | 1,834 | 1,988 |
Capital expenditures | $ 3,465 | $ 2,702 |
Segment Information - Revenue P
Segment Information - Revenue Per Significant Product or Service (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Segment Reporting Information [Line Items] | ||
Total revenue | $ 493,970 | $ 445,763 |
RMS | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 133,958 | 127,161 |
DSA | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 259,992 | 227,758 |
Manufacturing | ||
Segment Reporting Information [Line Items] | ||
Total revenue | $ 100,020 | $ 90,844 |
Segment Information - Summary o
Segment Information - Summary of Unallocated Corporate Overhead (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Segment Reporting Information [Line Items] | ||
Stock-based compensation | $ 10,541 | $ 9,486 |
Unallocated corporate | ||
Segment Reporting Information [Line Items] | ||
Stock-based compensation | 6,991 | 5,583 |
Compensation, benefits, and other employee-related expenses | 20,596 | 14,381 |
External consulting and other service expenses | 2,934 | 5,767 |
Information technology | 2,465 | 2,393 |
Depreciation | 1,834 | 1,987 |
Acquisition and integration | 2,864 | 21 |
Other general unallocated corporate | 2,396 | 2,787 |
Total unallocated corporate expense | $ 40,080 | $ 32,919 |
Segment Information - Disaggreg
Segment Information - Disaggregation of Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | $ 493,970 | $ 445,763 |
U.S. | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | 248,980 | 231,311 |
Europe | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | 160,826 | 136,881 |
Canada | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | 48,578 | 47,187 |
Asia Pacific | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | 34,520 | 30,095 |
Other | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | $ 1,066 | $ 289 |
Supplemental Balance Sheet In54
Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 30, 2017 | Apr. 01, 2017 |
Composition of trade receivables | |||
Client receivables | $ 343,546 | $ 335,839 | |
Contract assets (unbilled revenue) | 98,801 | 96,297 | |
Total | 442,347 | 432,136 | |
Less: Allowance for doubtful accounts | (2,238) | (2,120) | |
Trade receivables, net | 440,109 | 430,016 | |
Composition of inventories | |||
Raw materials and supplies | 20,353 | 19,858 | |
Work in process | 19,080 | 18,200 | |
Finished products | 79,613 | 76,898 | |
Inventories | 119,046 | 114,956 | |
Composition of other current assets | |||
Investments | 2,542 | 28,489 | |
Prepaid income taxes | 49,932 | 52,234 | |
Restricted cash | 605 | 592 | $ 538 |
Other current assets | 53,079 | 81,315 | |
Composition of other assets | |||
Life insurance policies | 33,943 | 34,008 | |
Venture capital investments | 76,076 | 71,101 | |
Restricted cash | 2,021 | 1,945 | $ 1,765 |
Other | 24,592 | 16,948 | |
Other assets | 136,632 | 124,002 | |
Composition of other current liabilities | |||
Accrued income taxes | 34,532 | 43,250 | |
Contract liabilities (customer contract deposits) | 23,566 | 0 | |
Other | 4,474 | 1,210 | |
Other current liabilities | 62,572 | 44,460 | |
Composition of other long-term liabilities | |||
U.S. Transition Tax | 66,851 | 61,038 | |
Long-term pension liability | 51,607 | 52,364 | |
Accrued executive supplemental life insurance retirement plan and deferred compensation plan | 37,935 | 37,582 | |
Other | 48,478 | 43,831 | |
Other long-term liabilities | $ 204,871 | $ 194,815 |
Venture Capital Investments and
Venture Capital Investments and Marketable Securities - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||
Committed contribution | $ 108.4 | |
Venture capital investments | 54.9 | |
Dividends received | 7.1 | $ 4.4 |
Gain (loss) from venture capital investments | $ 6.5 | $ 4.1 |
Minimum | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 0.60% | |
Maximum | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 12.00% |
Fair Value - Fair Value of Asse
Fair Value - Fair Value of Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 30, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 21 | $ 21 |
Other assets: | ||
Life insurance policies | 26,240 | 26,358 |
Total assets measured at fair value | 26,261 | 26,379 |
Other current liabilities: | ||
Contingent consideration | 3,053 | 298 |
Total liabilities measured at fair value | 3,053 | 298 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Other assets: | ||
Life insurance policies | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Other current liabilities: | ||
Contingent consideration | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 21 | 21 |
Other assets: | ||
Life insurance policies | 26,240 | 26,358 |
Total assets measured at fair value | 26,261 | 26,379 |
Other current liabilities: | ||
Contingent consideration | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Other assets: | ||
Life insurance policies | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Other current liabilities: | ||
Contingent consideration | 3,053 | 298 |
Total liabilities measured at fair value | $ 3,053 | $ 298 |
Fair Value - Contingent Conside
Fair Value - Contingent Consideration (Details) - Contingent Consideration - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 298 | $ 3,621 |
Additions | 2,746 | 0 |
Payments | 0 | (406) |
Change in fair value | 9 | 0 |
Reversal of previously recorded contingent liability | 0 | (14) |
Ending balance | $ 3,053 | $ 3,201 |
Goodwill and Intangible Asset58
Goodwill and Intangible Assets - Rollforward of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Changes in gross carrying amount and accumulated amortization of goodwill | |
December 30, 2017 | $ 804,906 |
Acquisitions | 18,165 |
Foreign Exchange | 12,865 |
March 31, 2018 | 835,936 |
RMS | |
Changes in gross carrying amount and accumulated amortization of goodwill | |
December 30, 2017 | 58,122 |
Acquisitions | 0 |
Foreign Exchange | 706 |
March 31, 2018 | 58,828 |
DSA | |
Changes in gross carrying amount and accumulated amortization of goodwill | |
December 30, 2017 | 605,176 |
Acquisitions | 18,165 |
Foreign Exchange | 8,854 |
March 31, 2018 | 632,195 |
Manufacturing | |
Changes in gross carrying amount and accumulated amortization of goodwill | |
December 30, 2017 | 141,608 |
Acquisitions | 0 |
Foreign Exchange | 3,305 |
March 31, 2018 | $ 144,913 |
Goodwill and Intangible Asset59
Goodwill and Intangible Assets - Schedule of Other Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 30, 2017 |
Other intangible assets | ||
Gross | $ 661,160 | $ 655,971 |
Accumulated Amortization | (290,864) | (286,209) |
Net | 370,296 | 369,762 |
Backlog | ||
Other intangible assets | ||
Gross | 0 | 8,111 |
Accumulated Amortization | 0 | (8,111) |
Net | 0 | 0 |
Technology | ||
Other intangible assets | ||
Gross | 83,428 | 81,309 |
Accumulated Amortization | (30,893) | (27,157) |
Net | 52,535 | 54,152 |
Trademarks and trade names | ||
Other intangible assets | ||
Gross | 8,873 | 8,661 |
Accumulated Amortization | (4,609) | (4,562) |
Net | 4,264 | 4,099 |
Other | ||
Other intangible assets | ||
Gross | 17,533 | 17,465 |
Accumulated Amortization | (8,456) | (7,845) |
Net | 9,077 | 9,620 |
Other intangible assets | ||
Other intangible assets | ||
Gross | 109,834 | 115,546 |
Accumulated Amortization | (43,958) | (47,675) |
Net | 65,876 | 67,871 |
Client relationships | ||
Other intangible assets | ||
Gross | 551,326 | 540,425 |
Accumulated Amortization | (246,906) | (238,534) |
Net | $ 304,420 | $ 301,891 |
Long-Term Debt and Capital Le60
Long-Term Debt and Capital Lease Obligations - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 30, 2017 |
Debt Instrument [Line Items] | ||
Total debt | $ 1,109,724 | $ 1,120,539 |
Less: Current portion of long-term debt | (111) | (28,546) |
Long-term debt | 1,109,613 | 1,091,993 |
Debt discount and debt issuance costs | (8,346) | (5,770) |
Long-term debt, net | 1,101,267 | 1,086,223 |
Term loans | ||
Debt Instrument [Line Items] | ||
Total debt | 0 | 601,250 |
Revolving facility | ||
Debt Instrument [Line Items] | ||
Total debt | 1,091,304 | 500,997 |
Other long-term debt | ||
Debt Instrument [Line Items] | ||
Total debt | $ 18,420 | $ 18,292 |
Long-Term Debt and Capital Le61
Long-Term Debt and Capital Lease Obligations - Additional Information (Details) | Apr. 03, 2018USD ($) | Mar. 26, 2018USD ($)payment | Mar. 31, 2018USD ($) | Feb. 12, 2018USD ($) | Dec. 30, 2017USD ($) |
Debt Instrument [Line Items] | |||||
Weighted average interest rate | 2.13% | 2.45% | |||
Number of consecutive fiscal quarters | 1 year | ||||
Remaining balance of term loan | $ 1,109,724,000 | $ 1,120,539,000 | |||
Other Capital Lease Obligations | |||||
Debt Instrument [Line Items] | |||||
Other capital lease obligations | 31,300,000 | 30,300,000 | |||
$2.3 Billion Credit Facility | Credit facility | |||||
Debt Instrument [Line Items] | |||||
Credit facility | $ 2,300,000,000 | ||||
Gross debt issuance costs | 6,200,000 | ||||
Debt issuance costs | 1,000,000 | ||||
Maximum borrowing capacity, term loan and line of credit facility, potential increase available | $ 1,000,000,000 | ||||
Minimum EBITDA less capital expenditures to consolidated cash interest expense ratio | 3.50 | ||||
Maximum consolidated indebtedness to consolidated EBITDA | 4.50 | ||||
Maximum consolidated indebtedness to consolidated EBITDA, with step-downs | 3.50 | ||||
Term Loan | Credit facility | |||||
Debt Instrument [Line Items] | |||||
Credit facility | $ 750,000,000 | ||||
Number of quarterly installment payments | payment | 19 | ||||
Bridge Loan | |||||
Debt Instrument [Line Items] | |||||
Credit facility | $ 830,000,000 | ||||
Gross debt issuance costs | 1,800,000 | ||||
Fees paid for temporary backstop facility | 2,000,000 | ||||
Letter of Credit | |||||
Debt Instrument [Line Items] | |||||
Letters of credit outstanding | $ 4,900,000 | $ 4,900,000 | |||
Subsequent Event | Term Loan | Credit facility | |||||
Debt Instrument [Line Items] | |||||
Amount drawn on term loan | $ 750,000,000 | ||||
Subsequent Event | Senior Notes Due 2026 | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Gross debt issuance costs | 7,400,000 | ||||
Debt issuance costs | 6,300,000 | ||||
Aggregate principal amount | $ 500,000,000 | ||||
Stated interest rate | 5.50% | ||||
Redemption price percentage, conditional upon equity offerings | 40.00% | ||||
Redemption price percentage in the event of a change of control | 101.00% | ||||
Net proceeds from debt | $ 493,800,000 | ||||
Redemption Period One | Subsequent Event | Senior Notes Due 2026 | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Redemption price percentage | 100.00% | ||||
Redemption Period Two | Subsequent Event | Senior Notes Due 2026 | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Redemption price percentage | 105.50% | ||||
Federal Funds Rate | $2.3 Billion Credit Facility | Credit facility | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 0.50% | ||||
LIBOR | $2.3 Billion Credit Facility | Credit facility | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 1.00% | ||||
Revolving Credit Facility | $2.3 Billion Credit Facility | Credit facility | |||||
Debt Instrument [Line Items] | |||||
Credit facility | $ 1,550,000,000 |
Equity and Noncontrolling Int62
Equity and Noncontrolling Interest - Earnings Per Share (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Numerator: | ||
Income from continuing operations, net of income taxes | $ 53,268 | $ 46,963 |
Loss from discontinued operations, net of income taxes | (23) | (4) |
Less: Net income attributable to noncontrolling interests | 614 | 181 |
Net income attributable to common shareholders | $ 52,631 | $ 46,778 |
Denominator: | ||
Weighted-average shares outstanding—Basic (in shares) | 47,785 | 47,546 |
Effect of dilutive securities: | ||
Stock options, restricted stock units, performance share units and restricted stock (in shares) | 1,043 | 875 |
Weighted-average shares outstanding—Diluted (in shares) | 48,828 | 48,421 |
Equity and Noncontrolling Int63
Equity and Noncontrolling Interest - Earnings Per Share, Additional Information (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Employee Stock Option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 0.5 | 1.1 |
Restricted Stock and Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share amount (in shares) | 1.1 | 1.1 |
Equity and Noncontrolling Int64
Equity and Noncontrolling Interest - Treasury Shares (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Treasury Shares | ||
Purchase of treasury stock | $ 13,549,000 | $ 48,180,000 |
Shares acquired to satisfy minimum individual statutory tax withholdings for vesting of equity instruments (in shares) | 100,000 | 200,000 |
Shares acquired to satisfy minimum individual statutory tax withholdings for vesting of equity instruments | $ 13,500,000 | $ 16,100,000 |
Authorized Share Repurchase Program | ||
Treasury Shares | ||
Stock repurchased during period (in shares) | 0 | 400,000 |
Purchase of treasury stock | $ 32,100,000 | |
Stock repurchase authorization | 1,300,000,000 | |
Remaining authorized repurchase amount | $ 115,500,000 |
Equity and Noncontrolling Int65
Equity and Noncontrolling Interest - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Accumulated Other Comprehensive Income (Loss), before Tax [Roll Forward] | ||
Other comprehensive income before reclassifications | $ 24,867 | |
Amounts reclassified from accumulated other comprehensive loss | 459 | |
Net current period other comprehensive income | 25,326 | |
Amount reclassified from accumulated other comprehensive loss due to adoption of ASU 2018-02 (See Note 1) | 3,330 | |
Income tax expense (benefit) | 1,722 | $ 226 |
Foreign Currency Translation Adjustment and Other | ||
Accumulated Other Comprehensive Income (Loss), before Tax [Roll Forward] | ||
December 30, 2017 | (77,545) | |
Other comprehensive income before reclassifications | 24,867 | |
Amounts reclassified from accumulated other comprehensive loss | 0 | |
Net current period other comprehensive income | 24,867 | |
Amount reclassified from accumulated other comprehensive loss due to adoption of ASU 2018-02 (See Note 1) | 0 | |
Income tax expense (benefit) | 1,840 | |
March 31, 2018 | (54,518) | |
Pension and Other Post-Retirement Benefit Plans | ||
Accumulated Other Comprehensive Income (Loss), before Tax [Roll Forward] | ||
December 30, 2017 | (67,186) | |
Other comprehensive income before reclassifications | 0 | |
Amounts reclassified from accumulated other comprehensive loss | 459 | |
Net current period other comprehensive income | 459 | |
Amount reclassified from accumulated other comprehensive loss due to adoption of ASU 2018-02 (See Note 1) | 3,330 | |
Income tax expense (benefit) | (118) | $ 200 |
March 31, 2018 | (69,939) | |
Total | ||
Accumulated Other Comprehensive Income (Loss), before Tax [Roll Forward] | ||
December 30, 2017 | (144,731) | |
March 31, 2018 | $ (124,457) |
Equity and Noncontrolling Int66
Equity and Noncontrolling Interest - Redeemable Noncontrolling Interest, Additional Information (Details) $ in Millions | Mar. 31, 2018USD ($) |
Investment [Line Items] | |
Contractually defined redemption value | $ 16.9 |
Vital River | |
Investment [Line Items] | |
Noncontrolling interest ownership percentage | 13.00% |
Equity and Noncontrolling Int67
Equity and Noncontrolling Interest - Rollforward of Redeemable Noncontrolling Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Beginning balance | $ 16,609 | $ 14,659 |
Total gains or losses (realized/unrealized): | ||
Foreign currency translation | 564 | 117 |
Ending balance | 17,323 | 14,698 |
Net income (loss) attributable to noncontrolling interest | ||
Total gains or losses (realized/unrealized): | ||
Income (loss) attributable to noncontrolling interest | $ 150 | $ (78) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Effective tax rate | 15.50% | 39.80% |
Tax benefit from favorable taxing authority rulings | $ 2,700 | |
Decrease in unrecognized tax benefits | 3,700 | $ 3,500 |
Unrecognized tax benefits | 21,000 | |
Unrecognized tax benefits that would impact effective tax rate | 19,300 | |
Accrued interest and penalties on unrecognized tax benefits | 2,600 | |
Decrease in unrecognized tax benefits that are reasonably possibly over the next twelve-month period | 1,900 | |
Income tax expense (benefit) | 1,722 | 226 |
Pension and Other Post-Retirement Benefit Plans | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Income tax expense (benefit) | (118) | 200 |
Foreign Currency Translation Adjustment and Other | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Income tax expense (benefit) | $ 1,840 | |
CDMO Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Tax on gain on divestiture | $ 18,000 |
Pension and Other Post-Retire69
Pension and Other Post-Retirement Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Pension | ||
Employee benefits | ||
Service cost | $ 846 | $ 754 |
Interest cost | 2,833 | 2,826 |
Expected return on plan assets | (3,877) | (3,450) |
Amortization of prior service credit | (181) | (119) |
Amortization of net loss | 645 | 966 |
Net periodic cost | 266 | 977 |
Other Postretirement Benefits Plan | ||
Employee benefits | ||
Net periodic cost | $ 0 | $ 0 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Stock-based compensation expense | ||
Stock-based compensation | $ 10,541 | $ 9,486 |
Cost of revenue | ||
Stock-based compensation expense | ||
Stock-based compensation | 1,413 | 1,546 |
Selling, general and administrative | ||
Stock-based compensation expense | ||
Stock-based compensation | $ 9,128 | $ 7,940 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock-Based Compensation Grants (Details) shares in Millions | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options granted (in shares) | 0.5 |
Stock options weighted average grant date fair value (in dollars per share) | $ / shares | $ 24.81 |
Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares granted (in shares) | 0.2 |
Weighted-average grant date fair value (in dollars per share) | $ / shares | $ 109.34 |
Performance Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares granted (in shares) | 0.2 |
Weighted-average grant date fair value (in dollars per share) | $ / shares | $ 117.28 |
Maximum shares to be awarded under plan (in shares) | 0.4 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Increase in lease obligations | $ 2.3 |
Restructuring and Asset Impai73
Restructuring and Asset Impairment - Restructuring Costs by Classification on the Consolidated Statements of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Dec. 30, 2017 | Apr. 01, 2017 | |
Restructuring Cost and Reserve [Line Items] | |||
Total severance and transition costs | $ 638 | $ 1,077 | |
Cost of services provided and products sold (excluding amortization of intangible assets) | |||
Restructuring Cost and Reserve [Line Items] | |||
Total severance and transition costs | 585 | 983 | |
Selling, general and administrative | |||
Restructuring Cost and Reserve [Line Items] | |||
Total severance and transition costs | 53 | 94 | |
Severance and Transition Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Total severance and transition costs | 616 | 1,017 | |
Severance and Transition Costs | Cost of services provided and products sold (excluding amortization of intangible assets) | |||
Restructuring Cost and Reserve [Line Items] | |||
Total severance and transition costs | 563 | 923 | |
Severance and Transition Costs | Selling, general and administrative | |||
Restructuring Cost and Reserve [Line Items] | |||
Total severance and transition costs | 53 | 94 | |
Asset Impairments | |||
Restructuring Cost and Reserve [Line Items] | |||
Total severance and transition costs | 22 | 60 | |
Asset Impairments | Cost of services provided and products sold (excluding amortization of intangible assets) | |||
Restructuring Cost and Reserve [Line Items] | |||
Total severance and transition costs | 22 | 60 | |
Asset Impairments | Selling, general and administrative | |||
Restructuring Cost and Reserve [Line Items] | |||
Total severance and transition costs | 0 | $ 0 | |
RMS | |||
Restructuring Cost and Reserve [Line Items] | |||
Total severance and transition costs | 1,038 | $ 18,100 | |
RMS | Cost of services provided and products sold (excluding amortization of intangible assets) | |||
Restructuring Cost and Reserve [Line Items] | |||
Total severance and transition costs | 868 | ||
RMS | Selling, general and administrative | |||
Restructuring Cost and Reserve [Line Items] | |||
Total severance and transition costs | 170 | ||
RMS | Severance and Transition Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Total severance and transition costs | 523 | ||
RMS | Severance and Transition Costs | Cost of services provided and products sold (excluding amortization of intangible assets) | |||
Restructuring Cost and Reserve [Line Items] | |||
Total severance and transition costs | 353 | ||
RMS | Severance and Transition Costs | Selling, general and administrative | |||
Restructuring Cost and Reserve [Line Items] | |||
Total severance and transition costs | 170 | ||
RMS | Asset Impairments | |||
Restructuring Cost and Reserve [Line Items] | |||
Total severance and transition costs | 515 | ||
RMS | Asset Impairments | Cost of services provided and products sold (excluding amortization of intangible assets) | |||
Restructuring Cost and Reserve [Line Items] | |||
Total severance and transition costs | 515 | ||
RMS | Asset Impairments | Selling, general and administrative | |||
Restructuring Cost and Reserve [Line Items] | |||
Total severance and transition costs | $ 0 |
Restructuring and Asset Impai74
Restructuring and Asset Impairment - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Dec. 30, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 638 | $ 1,077 | ||
Severance and retention costs liability | 7,053 | $ 6,856 | 6,531 | $ 8,102 |
Accrued Compensation | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance and retention costs liability | 3,100 | 2,600 | ||
RMS | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 1,038 | 18,100 | ||
RMS | Minimum | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Expected restructuring costs | 5,500 | |||
RMS | Maximum | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Expected restructuring costs | 6,000 | |||
Cash portion of expected amount (up to) | 8,000 | |||
Asset Impairments and Accelerated Depreciation | RMS | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 17,700 | |||
Severance and Transition Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 616 | 1,017 | ||
Severance and Transition Costs | Other Noncurrent Liabilities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance and retention costs liability | 3,900 | $ 4,000 | ||
Severance and Transition Costs | RMS | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 523 | |||
Expected restructuring costs | $ 5,000 |
Restructuring and Asset Impai75
Restructuring and Asset Impairment - Schedule of Other Restructuring Initiatives (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | $ 638 | $ 1,077 |
Cost of revenue | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | 585 | 983 |
Selling, general and administrative | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | 53 | 94 |
Severance and Transition Costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | 616 | 1,017 |
Severance and Transition Costs | Cost of revenue | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | 563 | 923 |
Severance and Transition Costs | Selling, general and administrative | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | 53 | 94 |
Asset Impairments | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | 22 | 60 |
Asset Impairments | Cost of revenue | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | 22 | 60 |
Asset Impairments | Selling, general and administrative | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | $ 0 | $ 0 |
Restructuring and Asset Impai76
Restructuring and Asset Impairment - Severance and Retention Costs by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Segment Reporting Information [Line Items] | ||
Total severance and transition costs | $ 638 | $ 1,077 |
DSA | ||
Segment Reporting Information [Line Items] | ||
Total severance and transition costs | (232) | 256 |
Manufacturing | ||
Segment Reporting Information [Line Items] | ||
Total severance and transition costs | $ 870 | $ 821 |
Restructuring and Asset Impai77
Restructuring and Asset Impairment - Rollforward of Severance and Transition Costs Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Apr. 01, 2017 | |
Restructuring Reserve [Roll Forward] | ||
Beginning balance | $ 6,856 | $ 8,102 |
Expense | 1,139 | 1,017 |
Payments / utilization | (1,149) | (2,690) |
Foreign currency adjustments | 207 | 102 |
Ending balance | $ 7,053 | $ 6,531 |