(Mark One) | |
ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE FISCAL YEAR ENDED DECEMBER 30, 2017 | |
OR | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM TO |
Delaware | 06-1397316 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
251 Ballardvale Street Wilmington, Massachusetts | 01887 | |
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Name of each exchange on which registered | |
Common Stock, $0.01 par value | New York Stock Exchange |
Large accelerated filer ý | Accelerated filer o | Non-accelerated filer o (Do not check if smaller reporting company) | ||
Smaller reporting company o | Emerging growth company o |
Item | Page | |
PART I | ||
1 | ||
1A | ||
1B | ||
2 | ||
3 | ||
4 | Mine Safety Disclosures | |
PART II | ||
5 | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | |
6 | ||
7 | ||
7A | Quantitative and Qualitative Disclosures about Market Risk | |
8 | ||
9 | ||
9A | ||
9B | ||
PART III | ||
10 | ||
11 | ||
12 | ||
13 | ||
14 | ||
PART IV | ||
15 | ||
16 | Form 10-K Summary | |
Signatures | ||
Exhibit Index |
• | outbred, which are purposefully bred for heterogeneity; |
• | inbred, which are bred to be homogeneous; |
• | spontaneous mutant, whose genotype results in a naturally occurring genetic mutation (such as immune deficiency); |
• | hybrid, which are the offspring of two different inbred parents; and |
• | other genetically modified research models, such as knock-out models with one or more disabled genes and transgenic models. |
• | a broad offering of in vitro and in vivo capabilities and study types designed to identify possible safety risks for potential human and animal therapeutics, industrial chemicals and agrochemicals as they progress from discovery to regulatory registration; |
• | a broad offering of in vitro and in vivo studies in support of general toxicology (acute, sub-acute, and chronic studies), genetic toxicology, safety pharmacology, and carcinogenicity bioassays that are required for regulatory submissions supporting “first-in-human” to “first-to-the-market” strategies for potential human therapeutics; |
• | a broad offering of in vitro and in vivo studies in support of general toxicology (acute, sub-acute, and chronic studies), genetic toxicology, reproductive and developmental toxicology, environmental toxicology, and carcinogenicity bioassays that are required for regulatory submissions supporting the registration of industrial chemicals, agrochemicals, and biocides; |
• | expertise in standard and specialty routes of administration (e.g., infusion, intravitreal, intrathecal, and inhalation) that are important not only for the testing of potential pharmaceuticals and biopharmaceuticals, but also for the safety testing of medical devices, nutraceuticals, animal health products, and other materials; |
• | expertise in the conduct and assessment of reproductive, developmental, and juvenile toxicology studies (in support of larger-scale and later-stage human clinical trials or chemical registration); |
• | expertise in environmental toxicology (aquatic and terrestrial) and regulatory submissions required for chemical registration; |
• | services in important specialty areas such as ocular, bone, juvenile/neonatal, immune-toxicology, photobiology, inhalation, and dermal testing; |
• | expertise in all major therapeutic areas; |
• | study design and strategic advice to our clients based on our wealth of experience and scientific expertise in support of drug development and chemical registration; and |
• | a strong history of assisting our clients in achieving their regulatory and/or internal milestones for the safety testing of numerous therapy types including stem cells, vaccines, proteins, antibodies, drug conjugates, oligonucleotide biotherapeutics, small molecules, medical devices, chemicals, and agrochemicals. |
• | We launched a multi-year strategic partnership with Nimbus Therapeutics to advance new programs spanning the disease areas of immunology, metabolic disorders and oncology from the discovery phase through to Investigational New Drug submission. |
• | We extended our longstanding, strategic, integrated drug discovery partnership with Chiesi Farmaceutici SpA in the field of respiratory disease. Through this continued partnership, we provide Chiesi an extensive portfolio of integrated drug discovery capabilities, including medicinal chemistry, ADME/DMPK studies, pharmaceuticals, in vitro assays, in vivo models and safety pharmacology studies to help identify and test Chiesi’s candidates for preclinical development. |
• | global biopharmaceutical companies; |
• | small and mid-sized pharmaceutical, biotechnology, agrochemical, industrial chemical, and veterinary medicine companies, as well as contract research organizations; and |
• | academic and government institutions. |
• | For RMS, we have five main competitors of which one is a government funded, not-for-profit entity; one is part of a large public company; one is privately held in Europe and two are privately held in the U.S. We believe that none of these competitors compares to us in global reach, financial strength, breadth of product and services offerings, technical expertise, or pharmaceutical and biotechnology industry relationships. |
• | For DSA, both our Discovery Services and Safety Assessment businesses have numerous competitors. Discovery has hundreds of competitors, as it is a highly competitive and fragmented market; Safety Assessment has dozens of competitors of varying size, but it has five main competitors; one is part of a large public company in the U.S.; one is a private company in China; two are privately held in the U.S.; and one is privately held in France. Our DSA segment also competes with in-house departments of pharmaceutical and biotechnology companies, universities, and teaching hospitals. |
• | For Manufacturing, each of our underlying businesses has several competitors. In addition to many smaller competitors, Biologics has five main competitors, of which two are public companies in Europe, one is a private company in the U.S., one is a public company in China, and one is a public company in the U.S. Avian has one main competitor to its SPF eggs business, which is privately held in Europe, and numerous competitors for specialized avian laboratory services. Microbial Solutions has five main competitors, of which three are public companies in Europe and two are privately held in the U.S. |
• | the surface and air transportation of chemicals, biological reagents and laboratory specimens; |
• | the handling, use, storage, and disposal of chemicals (including narcotics and psychotropic drugs), biological reagents, laboratory specimens, hazardous waste, and radioactive materials; |
• | the procurement, handling, use, storage, and disposal of human cells, tissues, and cellular and tissue based products for research purposes; |
• | the safety and health of employees and visitors to our facilities; and |
• | protection of the environment and general public. |
• | the products being tested fail to satisfy safety requirements; |
• | unexpected or undesired study results; |
• | production problems resulting in shortages of the drug being tested; |
• | a client's decision to forego or terminate a particular study; |
• | establishment of alternative distribution channels by our competitors; |
• | the loss of funding for the particular research study; or |
• | general convenience/counterparty preference. |
• | difficulties in achieving business and financial success; |
• | difficulties and expenses incurred in assimilating and integrating operations, services, products, technologies, or pre-existing relationships with our customers, distributors, and suppliers; |
• | challenges with developing and operating new businesses, including those which are materially different from our existing businesses and which may require the development or acquisition of new internal capabilities and expertise; |
• | potential losses resulting from undiscovered liabilities of acquired companies that are not covered by the indemnification we may obtain from the seller or the insurance we acquire in connection with the transaction; |
• | loss of key employees; |
• | the presence or absence of adequate internal controls and/or significant fraud in the financial systems of acquired companies; |
• | diversion of management's attention from other business concerns; |
• | becoming subject to a more expansive regulatory environment; |
• | acquisitions could be dilutive to earnings, or in the event of acquisitions made through the issuance of our common stock to the shareholders of the acquired company, dilutive to the percentage of ownership of our existing shareholders; |
• | risks of not being able to overcome differences in foreign business practices, customs, and importation regulations, language, and other cultural barriers in connection with the acquisition of foreign companies; |
• | new technologies and products may be developed which cause businesses or assets we acquire to become less valuable; and |
• | risks that disagreements or disputes with prior owners of an acquired business, technology, service, or product may result in litigation expenses and diversion of our management's attention. |
• | difficulties in the separation of operations, services, products, and personnel; |
• | diversion of management's attention from other business concerns; and |
• | the need to agree to retain or assume certain current or future liabilities in order to complete the divestiture. |
• | foreign currencies we receive for sales and in which we record expenses outside the U.S. could be subject to unfavorable exchange rates with the U.S. dollar and reduce the amount of revenue and cash flow (and increase the amount of expenses) that we recognize and cause fluctuations in reported financial results; |
• | certain contracts, particularly in Canada, are frequently denominated in currencies other than the currency in which we incur expenses related to those contracts, and where expenses are incurred in currencies other than those in which contracts are priced, fluctuations in the relative value of those currencies could have a material adverse effect on our results of operations; |
• | general economic and political conditions in the markets in which we operate; |
• | potential international conflicts, including terrorist acts; |
• | exchange controls, adverse tax consequences, and legal restrictions on the repatriation of funds into the U.S.; |
• | difficulties and costs associated with staffing and managing foreign operations, including risks of work stoppages and/or strikes, as well as violations of local laws or anti-bribery laws such as the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions; |
• | unexpected changes in regulatory requirements; |
• | the difficulties of compliance with a wide variety of foreign laws and regulations; |
• | unfavorable labor regulations in foreign jurisdictions; |
• | potentially negative consequences from changes in or interpretations of U.S. and foreign tax laws; |
• | exposure to business disruption or property damage due to geographically unique natural disasters (including within the U.S.); |
• | longer accounts receivable cycles in certain foreign countries; and |
• | compliance with import requirements and other trade regulations. |
• | reputation for on-time quality performance; |
• | reputation for regulatory compliance; |
• | expertise and experience in multiple specialized areas; |
• | scope and breadth of service and product offerings across the drug discovery and development spectrum; |
• | scope and breadth of service and product offerings across the manufacturing support spectrum; |
• | ability to provide flexible and customized solutions to support our clients' drug discovery, non-clinical development, and manufacturing support needs; |
• | broad geographic availability (with consistent quality); |
• | price/value; |
• | technological expertise and efficient drug development processes; |
• | quality of facilities; |
• | financial stability; |
• | size; |
• | ability to acquire, process, analyze, and report data in an accurate manner; and |
• | accessibility of client data through secure portals. |
• | errors or omissions in reporting of study detail in non-clinical studies that may lead to inaccurate reports, which may undermine the usefulness of a study or data from the study, or which may potentially advance studies absent the necessary support or inhibit studies from proceeding to the next level of testing; |
• | risks associated with our possible failure to properly care for our clients' property, such as research models and samples, study compounds, records, work in progress, other archived materials, or goods and materials in transit, while in our possession; |
• | risks that models in our breeding facilities or in facilities that we manage may be infected with diseases that may be harmful and even lethal to them or humans, despite preventive measures contained in our policies for the quarantine and handling of imported animals; and |
• | risks that we may have errors and omissions and/or product liabilities related to our products designed to conduct lot release testing of medical devices, injectable drugs, food, beverages, and home and beauty products (primarily through our Microbial Solutions business), or in the testing of biologics and other services performed by our Biologics business, which could result in us or our clients failing to identify unsafe or contaminated materials. |
• | changes in the general global economy; |
• | the number and scope of ongoing client engagements; |
• | the commencement, postponement, delay, progress, completion, or cancellation of client contracts in the quarter; |
• | changes in the mix of our products and services; |
• | competitive pricing pressures; |
• | the extent of cost overruns; |
• | holiday buying patterns of our clients; |
• | budget cycles of our clients; |
• | changes in tax laws, rules, regulations, and tax rates in the locations in which we operate; |
• | the timing and charges associated with completed acquisitions and other events; |
• | the financial performance of our venture capital investments; |
• | the occasional extra week (“53rd week”) that we recognize in a fiscal year (and fourth fiscal quarter thereof) due to our fiscal year ending on the last Saturday in December; and |
• | exchange rate fluctuations. |
Fiscal 2018 | High | Low | |||||
First quarter (through January 26, 2018) | $ | 112.47 | $ | 104.00 | |||
Fiscal 2017 | High | Low | |||||
First quarter | $ | 91.57 | $ | 75.25 | |||
Second quarter | 102.32 | 86.44 | |||||
Third quarter | 109.59 | 94.15 | |||||
Fourth quarter | 119.05 | 99.12 | |||||
Fiscal 2016 | High | Low | |||||
First quarter | $ | 81.61 | $ | 65.70 | |||
Second quarter | 87.95 | 73.42 | |||||
Third quarter | 89.18 | 75.54 | |||||
Fourth quarter | 84.53 | 67.20 |
Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | ||||||||||
(in thousands) | |||||||||||||
October 1, 2017 to October 28, 2017 | — | $ | — | — | $ | 129,105 | |||||||
October 29, 2017 to November 25, 2017 | — | — | — | 129,105 | |||||||||
November 26, 2017 to December 30, 2017 | 89 | 104.20 | — | 129,096 | |||||||||
Total | 89 | — |
Fiscal Year | |||||||||||||||||||||||
2012 | 2013 | 2014 | 2015 | 2016 | 2017 | ||||||||||||||||||
Charles River Laboratories International, Inc. | $ | 100 | $ | 145 | $ | 174 | $ | 217 | $ | 207 | $ | 297 | |||||||||||
S&P 500 | 100 | 132 | 151 | 153 | 171 | 208 | |||||||||||||||||
S&P 500 Health Care | 100 | 141 | 177 | 190 | 184 | 225 |
Fiscal Year | |||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||||||
Statement of Income Data | |||||||||||||||||||
Total revenue | $ | 1,857,601 | $ | 1,681,432 | $ | 1,363,302 | $ | 1,297,662 | $ | 1,165,528 | |||||||||
Income from continuing operations, net of income taxes | 125,586 | 156,086 | 152,037 | 129,924 | 105,416 | ||||||||||||||
Income (loss) from discontinued operations, net of income taxes | (137 | ) | 280 | (950 | ) | (1,726 | ) | (1,265 | ) | ||||||||||
Common Share Data | |||||||||||||||||||
Earnings per common share from continuing operations: | |||||||||||||||||||
Basic | $ | 2.60 | $ | 3.28 | $ | 3.23 | $ | 2.76 | $ | 2.18 | |||||||||
Diluted | $ | 2.54 | $ | 3.22 | $ | 3.15 | $ | 2.70 | $ | 2.15 | |||||||||
Other Data | |||||||||||||||||||
Depreciation and amortization | $ | 131,159 | $ | 126,658 | $ | 94,881 | $ | 96,445 | $ | 96,636 | |||||||||
Capital expenditures | 82,431 | 55,288 | 63,252 | 56,925 | 39,154 | ||||||||||||||
Balance Sheet Data (as of period end) | |||||||||||||||||||
Cash and cash equivalents | $ | 163,794 | $ | 117,626 | $ | 117,947 | $ | 160,023 | $ | 155,927 | |||||||||
Total assets | 2,929,922 | 2,711,800 | 2,068,497 | 1,870,578 | 1,623,438 | ||||||||||||||
Long-term debt, net and capital leases | 1,114,105 | 1,207,696 | 845,997 | 740,557 | 635,226 | ||||||||||||||
Redeemable noncontrolling interest | 16,609 | 14,659 | 28,008 | 28,419 | 20,581 |
• | significant underperformance relative to expected historical or projected future operating results; |
• | significant negative industry or economic trends; or |
• | significant changes or developments in strategy or operations that negatively affect the utilization of our long-lived assets. |
Fiscal Year | |||||||||||||||||
2017 | 2016 | $ change | % change | Impact of FX | |||||||||||||
(in millions, except percentages) | |||||||||||||||||
RMS | $ | 493.6 | $ | 494.0 | $ | (0.4 | ) | (0.1 | )% | (0.2 | )% | ||||||
DSA | 980.0 | 836.6 | 143.4 | 17.1 | % | (0.2 | )% | ||||||||||
Manufacturing | 384.0 | 350.8 | 33.2 | 9.5 | % | 0.7 | % | ||||||||||
Total revenue | $ | 1,857.6 | $ | 1,681.4 | $ | 176.2 | 10.5 | % | 0.0 | % |
Fiscal Year | ||||||||||||||
2017 | 2016 | $ change | % change | |||||||||||
(in millions, except percentages) | ||||||||||||||
Service revenue | $ | 1,298.3 | $ | 1,130.7 | $ | 167.6 | 14.8 | % | ||||||
Product revenue | 559.3 | 550.7 | 8.6 | 1.6 | % | |||||||||
Total revenue | $ | 1,857.6 | $ | 1,681.4 | $ | 176.2 | 10.5 | % |
Fiscal Year | ||||||||||||||
2017 | 2016 | $ change | % change | |||||||||||
(in millions, except percentages) | ||||||||||||||
RMS | $ | 317.0 | $ | 292.8 | $ | 24.2 | 8.3 | % | ||||||
DSA | 660.6 | 572.4 | 88.2 | 15.4 | % | |||||||||
Manufacturing | 177.7 | 169.5 | 8.2 | 4.8 | % | |||||||||
Total cost of services provided and products sold (excluding amortization of intangible assets) | $ | 1,155.3 | $ | 1,034.7 | $ | 120.6 | 11.6 | % |
Fiscal Year | ||||||||||||||
2017 | 2016 | $ change | % change | |||||||||||
(in millions, except percentages) | ||||||||||||||
Cost of services provided | $ | 865.6 | $ | 757.7 | $ | 107.9 | 14.2 | % | ||||||
Cost of products sold | 289.7 | 277.0 | 12.7 | 4.6 | % | |||||||||
Total cost of services provided and products sold (excluding amortization of intangible assets) | $ | 1,155.3 | $ | 1,034.7 | $ | 120.6 | 11.6 | % |
Fiscal Year | ||||||||||||||
2017 | 2016 | $ change | % change | |||||||||||
(in millions, except percentages) | ||||||||||||||
RMS | $ | 60.2 | $ | 62.5 | $ | (2.3 | ) | (3.7 | )% | |||||
DSA | 105.5 | 98.3 | 7.2 | 7.3 | % | |||||||||
Manufacturing | 72.5 | 65.1 | 7.4 | 11.4 | % | |||||||||
Unallocated corporate | 135.2 | 141.6 | (6.4 | ) | (4.6 | )% | ||||||||
Total selling, general and administrative | $ | 373.4 | $ | 367.5 | $ | 5.9 | 1.6 | % |
Fiscal Year | |||||||||||||||||
2016 | 2015 | $ change | % change | Impact of FX | |||||||||||||
(in millions, except percentages) | |||||||||||||||||
RMS | $ | 494.0 | $ | 470.4 | $ | 23.6 | 5.0 | % | (0.2 | )% | |||||||
DSA | 836.6 | 612.2 | 224.4 | 36.7 | % | (2.7 | )% | ||||||||||
Manufacturing | 350.8 | 280.7 | 70.1 | 25.0 | % | (0.8 | )% | ||||||||||
Total revenue | $ | 1,681.4 | $ | 1,363.3 | $ | 318.1 | 23.3 | % | (1.5 | )% |
Fiscal Year | ||||||||||||||
2016 | 2015 | $ change | % change | |||||||||||
(in millions, except percentages) | ||||||||||||||
Service revenue | $ | 1,130.7 | $ | 858.2 | $ | 272.5 | 31.7 | % | ||||||
Product revenue | 550.7 | 505.1 | 45.6 | 9.0 | % | |||||||||
Total revenue | $ | 1,681.4 | $ | 1,363.3 | $ | 318.1 | 23.3 | % |
Fiscal Year | ||||||||||||||
2016 | 2015 | $ change | % change | |||||||||||
(in millions, except percentages) | ||||||||||||||
RMS | $ | 292.8 | $ | 284.2 | $ | 8.6 | 3.0 | % | ||||||
DSA | 572.4 | 407.0 | 165.4 | 40.6 | % | |||||||||
Manufacturing | 169.5 | 141.0 | 28.5 | 20.3 | % | |||||||||
Total cost of services provided and products sold (excluding amortization of intangible assets) | $ | 1,034.7 | $ | 832.2 | $ | 202.5 | 24.3 | % |
Fiscal Year | ||||||||||||||
2016 | 2015 | $ change | % change | |||||||||||
(in millions, except percentages) | ||||||||||||||
Cost of services provided | $ | 757.7 | $ | 568.2 | $ | 189.5 | 33.4 | % | ||||||
Cost of products sold | 277.0 | 264.0 | 13.0 | 4.9 | % | |||||||||
Total cost of services provided and products sold (excluding amortization of intangible assets) | $ | 1,034.7 | $ | 832.2 | $ | 202.5 | 24.3 | % |
Fiscal Year | ||||||||||||||
2016 | 2015 | $ change | % change | |||||||||||
(in millions, except percentages) | ||||||||||||||
RMS | $ | 62.5 | $ | 62.1 | $ | 0.4 | 0.5 | % | ||||||
DSA | 98.3 | 69.2 | 29.1 | 42.0 | % | |||||||||
Manufacturing | 65.1 | 57.9 | 7.2 | 12.5 | % | |||||||||
Unallocated corporate | 141.6 | 111.2 | 30.4 | 27.4 | % | |||||||||
Total selling, general and administrative | $ | 367.5 | $ | 300.4 | $ | 67.1 | 22.3 | % |
December 30, 2017 | December 31, 2016 | ||||||
(in millions) | |||||||
Cash and cash equivalents: | |||||||
Held in U.S. entities | $ | 30.6 | $ | 10.6 | |||
Held in non-U.S. entities | 133.2 | 107.0 | |||||
Total cash and cash equivalents | 163.8 | 117.6 | |||||
Investments: | |||||||
Held in U.S. entities | — | — | |||||
Held in non-U.S. entities | 28.5 | 3.8 | |||||
Total cash, cash equivalents and investments | $ | 192.3 | $ | 121.4 |
December 30, 2017 | December 31, 2016 | ||||||
(in millions) | |||||||
Term loans | $ | 601.3 | $ | 633.8 | |||
Revolving credit facility | 501.0 | 578.8 | |||||
Total | $ | 1,102.3 | $ | 1,212.6 |
Fiscal Year | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in millions) | |||||||||||
Income from continuing operations | $ | 125.6 | $ | 156.1 | $ | 152.0 | |||||
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities | 186.6 | 174.3 | 126.6 | ||||||||
Changes in assets and liabilities | 5.9 | (13.5 | ) | 28.2 | |||||||
Net cash provided by operating activities | $ | 318.1 | $ | 316.9 | $ | 306.8 |
Fiscal Year | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in millions) | |||||||||||
Acquisition of businesses and assets, net of cash acquired | $ | (25.0 | ) | $ | (648.5 | ) | $ | (247.7 | ) | ||
Capital expenditures | (82.4 | ) | (55.3 | ) | (63.3 | ) | |||||
Investments, net | (37.2 | ) | 7.4 | (14.4 | ) | ||||||
Proceeds from divestiture | 72.5 | — | — | ||||||||
Other, net | (0.5 | ) | 3.7 | (2.2 | ) | ||||||
Net cash used in investing activities | $ | (72.6 | ) | $ | (692.7 | ) | $ | (327.6 | ) |
Fiscal Year | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in millions) | |||||||||||
Proceeds from long-term debt and revolving credit facility | $ | 236.8 | $ | 1,044.7 | $ | 492.5 | |||||
Proceeds from exercises of stock options | 38.9 | 23.2 | 39.3 | ||||||||
Payments on long-term debt, revolving credit facility, and capital lease obligations | (372.4 | ) | (656.6 | ) | (417.3 | ) | |||||
Purchase of treasury stock | (106.9 | ) | (12.3 | ) | (117.5 | ) | |||||
Other, net | (4.9 | ) | (18.2 | ) | (4.3 | ) | |||||
Net cash (used in) provided by financing activities | $ | (208.5 | ) | $ | 380.8 | $ | (7.3 | ) |
Payments Due by Period | |||||||||||||||||||
Total | Less than 1 Year | 1 - 3 Years | 3 - 5 Years | More Than 5 Years | |||||||||||||||
(in millions) | |||||||||||||||||||
Notes payable (1) | $ | 1,102.4 | $ | 28.5 | $ | 134.1 | $ | 939.8 | $ | — | |||||||||
Operating leases (2) | 144.1 | 25.4 | 43.9 | 29.7 | 45.1 | ||||||||||||||
Capital leases | 43.2 | 3.6 | 6.2 | 5.1 | 28.3 | ||||||||||||||
Redeemable noncontrolling interest (3) | 15.8 | — | 15.8 | — | — | ||||||||||||||
Venture capital investment commitments (4) | 37.0 | 26.8 | 10.2 | — | |||||||||||||||
Contingent payments (5) | 26.5 | 3.0 | 23.5 | — | — | ||||||||||||||
Unconditional purchase obligations (6) | 90.3 | 70.5 | 11.5 | 8.3 | — | ||||||||||||||
Total contractual cash obligations | $ | 1,459.3 | $ | 157.8 | $ | 245.2 | $ | 982.9 | $ | 73.4 |
(1) | Notes payable includes the principal payments on our debt. |
(2) | We lease properties and equipment for use in our operations. In addition to rent, the leases may require us to pay additional amounts for taxes, insurance, maintenance, and other operating expenses. Amounts reflected within the table detail future minimum rental commitments under non-cancellable operating leases, net of income from subleases, for each of the periods presented. |
(3) | The estimated cash obligation for redeemable noncontrolling interest is based on the amount that would be paid if settlement occurred as of the balance sheet date based on the contractually defined redemption value as of December 30, 2017. |
(4) | The timing of the remaining capital commitment payments to venture capital funds is subject to the procedures of the limited liability partnerships and limited liability companies; the above table reflects the earliest possible date the payment can be required under the relevant agreements. |
(5) | In connection with certain business and asset acquisitions, we agreed to make additional payments aggregating to $26.5 million based upon the achievement of certain financial targets in connection with each acquisition. The contingent payment obligations included in the table above have not been probability adjusted or discounted. |
(6) | Unconditional purchase obligations include agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions, and the approximate timing of the transaction. Purchase obligations exclude agreements that are cancellable at any time without penalty. |
Consolidated Statements of Income for fiscal years 2017, 2016 and 2015 | |
Consolidated Statements of Comprehensive Income for fiscal years 2017, 2016 and 2015 | |
Consolidated Balance Sheets as of December 30, 2017 and December 31, 2016 | |
Consolidated Statements of Cash Flows for fiscal years 2017, 2016 and 2015 | |
Consolidated Statements of Changes in Equity for fiscal years 2017, 2016 and 2015 | |
Fiscal Year | |||||||||||
2017 | 2016 | 2015 | |||||||||
Service revenue | $ | 1,298,298 | $ | 1,130,733 | $ | 858,244 | |||||
Product revenue | 559,303 | 550,699 | 505,058 | ||||||||
Total revenue | 1,857,601 | 1,681,432 | 1,363,302 | ||||||||
Costs and expenses: | |||||||||||
Cost of services provided (excluding amortization of intangible assets) | 865,618 | 757,732 | 568,227 | ||||||||
Cost of products sold (excluding amortization of intangible assets) | 289,669 | 277,034 | 263,983 | ||||||||
Selling, general and administrative | 373,446 | 367,548 | 300,414 | ||||||||
Amortization of intangible assets | 41,370 | 41,699 | 24,229 | ||||||||
Operating income | 287,498 | 237,419 | 206,449 | ||||||||
Other income (expense): | |||||||||||
Interest income | 690 | 1,314 | 1,043 | ||||||||
Interest expense | (29,777 | ) | (27,709 | ) | (15,072 | ) | |||||
Other income, net | 38,544 | 11,897 | 3,008 | ||||||||
Income from continuing operations, before income taxes | 296,955 | 222,921 | 195,428 | ||||||||
Provision for income taxes | 171,369 | 66,835 | 43,391 | ||||||||
Income from continuing operations, net of income taxes | 125,586 | 156,086 | 152,037 | ||||||||
Income (loss) from discontinued operations, net of income taxes | (137 | ) | 280 | (950 | ) | ||||||
Net income | 125,449 | 156,366 | 151,087 | ||||||||
Less: Net income attributable to noncontrolling interests | 2,094 | 1,601 | 1,774 | ||||||||
Net income attributable to common shareholders | $ | 123,355 | $ | 154,765 | $ | 149,313 | |||||
Earnings (loss) per common share | |||||||||||
Basic: | |||||||||||
Continuing operations attributable to common shareholders | $ | 2.60 | $ | 3.28 | $ | 3.23 | |||||
Discontinued operations | $ | — | $ | 0.01 | $ | (0.02 | ) | ||||
Net income attributable to common shareholders | $ | 2.60 | $ | 3.29 | $ | 3.21 | |||||
Diluted: | |||||||||||
Continuing operations attributable to common shareholders | $ | 2.54 | $ | 3.22 | $ | 3.15 | |||||
Discontinued operations | $ | — | $ | 0.01 | $ | (0.02 | ) | ||||
Net income attributable to common shareholders | $ | 2.54 | $ | 3.23 | $ | 3.13 | |||||
See Notes to Consolidated Financial Statements. |
Fiscal Year | |||||||||||
2017 | 2016 | 2015 | |||||||||
Net income | $ | 125,449 | $ | 156,366 | $ | 151,087 | |||||
Other comprehensive income (loss): | |||||||||||
Foreign currency translation adjustment and other | 78,084 | (73,243 | ) | (61,982 | ) | ||||||
Cumulative translation adjustment related to intercompany loan forgiveness | — | — | (2,341 | ) | |||||||
Pension and other post-retirement benefit plans (Note 10): | |||||||||||
Prior service cost and gains (losses) arising during the period | 36,593 | (60,678 | ) | (302 | ) | ||||||
Amortization of net loss and prior service benefit included in net periodic pension cost | 3,344 | 1,711 | 2,617 | ||||||||
Comprehensive income, before income taxes | 243,470 | 24,156 | 89,079 | ||||||||
Income tax expense (benefit) related to items of other comprehensive income (Note 8) | 7,954 | (12,369 | ) | 530 | |||||||
Comprehensive income, net of income taxes | 235,516 | 36,525 | 88,549 | ||||||||
Less: Comprehensive income (loss) related to noncontrolling interest, net of income taxes | 3,128 | (24 | ) | 537 | |||||||
Comprehensive income attributable to common shareholders, net of income taxes | $ | 232,388 | $ | 36,549 | $ | 88,012 | |||||
See Notes to Consolidated Financial Statements. |
December 30, 2017 | December 31, 2016 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 163,794 | $ | 117,626 | |||
Trade receivables, net | 430,016 | 364,050 | |||||
Inventories | 114,956 | 95,833 | |||||
Prepaid assets | 36,544 | 34,315 | |||||
Other current assets | 81,315 | 45,008 | |||||
Total current assets | 826,625 | 656,832 | |||||
Property, plant and equipment, net | 781,973 | 755,827 | |||||
Goodwill | 804,906 | 787,517 | |||||
Client relationships, net | 301,891 | 320,157 | |||||
Other intangible assets, net | 67,871 | 74,291 | |||||
Deferred tax assets | 22,654 | 28,746 | |||||
Other assets | 124,002 | 88,430 | |||||
Total assets | $ | 2,929,922 | $ | 2,711,800 | |||
Liabilities, Redeemable Noncontrolling Interest and Equity | |||||||
Current liabilities: | |||||||
Current portion of long-term debt and capital leases | $ | 30,998 | $ | 27,313 | |||
Accounts payable | 77,838 | 68,485 | |||||
Accrued compensation | 101,044 | 93,471 | |||||
Deferred revenue | 117,569 | 127,731 | |||||
Accrued liabilities | 89,780 | 84,470 | |||||
Other current liabilities | 44,460 | 26,500 | |||||
Current liabilities of discontinued operations | 1,815 | 1,623 | |||||
Total current liabilities | 463,504 | 429,593 | |||||
Long-term debt, net and capital leases | 1,114,105 | 1,207,696 | |||||
Deferred tax liabilities | 89,540 | 55,717 | |||||
Other long-term liabilities | 194,815 | 159,239 | |||||
Long-term liabilities of discontinued operations | 3,942 | 5,771 | |||||
Total liabilities | 1,865,906 | 1,858,016 | |||||
Commitments and contingencies (Notes 2, 7, 9, 10, and 13) | |||||||
Redeemable noncontrolling interest | 16,609 | 14,659 | |||||
Equity: | |||||||
Preferred stock, $0.01 par value; 20,000 shares authorized; no shares issued and outstanding | — | — | |||||
Common stock, $0.01 par value; 120,000 shares authorized; 87,495 shares issued and 47,402 shares outstanding as of December 30, 2017 and 86,301 shares issued and 47,363 shares outstanding as of December 31, 2016 | 875 | 863 | |||||
Additional paid-in capital | 2,560,192 | 2,477,371 | |||||
Retained earnings | 288,658 | 165,303 | |||||
Treasury stock, at cost, 40,093 shares and 38,938 shares as of December 30, 2017 and December 31, 2016, respectively | (1,659,914 | ) | (1,553,005 | ) | |||
Accumulated other comprehensive loss | (144,731 | ) | (253,764 | ) | |||
Total equity attributable to common shareholders | 1,045,080 | 836,768 | |||||
Noncontrolling interest | 2,327 | 2,357 | |||||
Total equity | 1,047,407 | 839,125 | |||||
Total liabilities, redeemable noncontrolling interest and equity | $ | 2,929,922 | $ | 2,711,800 | |||
See Notes to Consolidated Financial Statements. |
Fiscal Year | |||||||||||
2017 | 2016 | 2015 | |||||||||
Cash flows relating to operating activities | |||||||||||
Net income | $ | 125,449 | $ | 156,366 | $ | 151,087 | |||||
Less: Income (loss) from discontinued operations, net of income taxes | (137 | ) | 280 | (950 | ) | ||||||
Income from continuing operations, net of income taxes | 125,586 | 156,086 | 152,037 | ||||||||
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 131,159 | 126,658 | 94,881 | ||||||||
Stock-based compensation | 44,003 | 43,642 | 40,122 | ||||||||
Deferred income taxes | 28,254 | 1,945 | 2,689 | ||||||||
Gain on venture capital investments | (22,867 | ) | (10,284 | ) | (3,823 | ) | |||||
Gain on divestiture | (10,577 | ) | — | — | |||||||
Impairment charges | 17,239 | 6,717 | 196 | ||||||||
(Gain) loss on bargain purchase | (277 | ) | 16 | (9,837 | ) | ||||||
Other, net | (389 | ) | 5,613 | 2,352 | |||||||
Changes in assets and liabilities: | |||||||||||
Trade receivables, net | (48,279 | ) | (52,780 | ) | (16,963 | ) | |||||
Inventories | (17,838 | ) | (4,021 | ) | 3,364 | ||||||
Accounts payable | 34 | 22,076 | 1,174 | ||||||||
Accrued compensation | 3,666 | 9,298 | 8,414 | ||||||||
Long-term payable on Transition Tax (Notes 3 and 9) | 61,038 | — | — | ||||||||
Other assets and liabilities, net | 7,322 | 11,933 | 32,227 | ||||||||
Net cash provided by operating activities | 318,074 | 316,899 | 306,833 | ||||||||
Cash flows relating to investing activities | |||||||||||
Acquisition of businesses and assets, net of cash acquired | (25,012 | ) | (648,482 | ) | (247,651 | ) | |||||
Capital expenditures | (82,431 | ) | (55,288 | ) | (63,252 | ) | |||||
Purchases of investments and contributions to venture capital investments | (46,217 | ) | (40,248 | ) | (34,235 | ) | |||||
Proceeds from sale of investments | 9,128 | 47,652 | 19,743 | ||||||||
Proceeds from divestiture | 72,462 | — | — | ||||||||
Other, net | (516 | ) | 3,694 | (2,221 | ) | ||||||
Net cash used in investing activities | (72,586 | ) | (692,672 | ) | (327,616 | ) | |||||
Cash flows relating to financing activities | |||||||||||
Proceeds from long-term debt and revolving credit facility | 236,856 | 1,044,666 | 492,514 | ||||||||
Proceeds from exercises of stock options | 38,870 | 23,197 | 39,367 | ||||||||
Payments on long-term debt, revolving credit facility, and capital lease obligations | (372,435 | ) | (656,636 | ) | (417,331 | ) | |||||
Purchase of treasury stock | (106,909 | ) | (12,267 | ) | (117,478 | ) | |||||
Other, net | (4,858 | ) | (18,204 | ) | (4,330 | ) | |||||
Net cash (used in) provided by financing activities | (208,476 | ) | 380,756 | (7,258 | ) | ||||||
Discontinued operations | |||||||||||
Net cash used in operating activities from discontinued operations | (1,809 | ) | (2,056 | ) | (1,876 | ) | |||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 11,234 | (2,996 | ) | (12,695 | ) | ||||||
Net change in cash, cash equivalents, and restricted cash | 46,437 | (69 | ) | (42,612 | ) | ||||||
Cash, cash equivalents, and restricted cash, beginning of period | 119,894 | 119,963 | 162,575 | ||||||||
Cash, cash equivalents, and restricted cash, end of period | $ | 166,331 | $ | 119,894 | $ | 119,963 | |||||
See Notes to Consolidated Financial Statements. |
Fiscal Year | |||||||||||
2017 | 2016 | 2015 | |||||||||
Supplemental cash flow information: | |||||||||||
Cash and cash equivalents | $ | 163,794 | $ | 117,626 | $ | 117,947 | |||||
Restricted cash included in Other current assets | 592 | 532 | 271 | ||||||||
Restricted cash included in Other assets | 1,945 | 1,736 | 1,745 | ||||||||
Cash, cash equivalents, and restricted cash, end of period | $ | 166,331 | $ | 119,894 | $ | 119,963 | |||||
Cash paid for income taxes | $ | 60,377 | $ | 42,868 | $ | 24,436 | |||||
Cash paid for interest | $ | 27,417 | $ | 22,756 | $ | 11,101 | |||||
Non-cash investing and financing activities: | |||||||||||
Capitalized interest | $ | 36 | $ | 4 | $ | 424 | |||||
Additions to property, plant and equipment, net | $ | 38,199 | $ | 5,333 | $ | 6,720 | |||||
Assets acquired under capital lease | $ | 722 | $ | 1,335 | $ | 10,281 | |||||
See Notes to Consolidated Financial Statements. |
Common stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Equity Attributable to Common Shareholders | Noncontrolling Interest | Total Equity | ||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||
December 27, 2014 | 84,503 | $ | 845 | $ | 2,307,640 | $ | (138,775 | ) | $ | (74,247 | ) | 37,176 | $ | (1,423,260 | ) | $ | 672,203 | $ | 3,724 | $ | 675,927 | ||||||||||||||||
Net income | — | — | — | 149,313 | — | — | — | 149,313 | 936 | 150,249 | |||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (61,301 | ) | — | — | (61,301 | ) | (171 | ) | (61,472 | ) | |||||||||||||||||||||||
Adjustment of redeemable noncontrolling interest to fair value | — | — | 183 | — | — | — | — | 183 | — | 183 | |||||||||||||||||||||||||||
Tax benefit associated with stock issued under employee compensation plans | — | — | 10,608 | — | — | — | — | 10,608 | — | 10,608 | |||||||||||||||||||||||||||
Issuance of stock under employee compensation plans | 961 | 10 | 39,407 | — | — | — | — | 39,417 | — | 39,417 | |||||||||||||||||||||||||||
Acquisition of treasury shares | — | — | — | — | — | 1,590 | (117,478 | ) | (117,478 | ) | — | (117,478 | ) | ||||||||||||||||||||||||
Stock-based compensation | — | — | 40,122 | — | — | — | — | 40,122 | — | 40,122 | |||||||||||||||||||||||||||
December 26, 2015 | 85,464 | 855 | 2,397,960 | 10,538 | (135,548 | ) | 38,766 | (1,540,738 | ) | 733,067 | 4,489 | 737,556 | |||||||||||||||||||||||||
Net income | — | — | — | 154,765 | — | — | — | 154,765 | 924 | 155,689 | |||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (118,216 | ) | — | — | (118,216 | ) | (154 | ) | (118,370 | ) | |||||||||||||||||||||||
Dividends declared to noncontrolling interest | — | — | — | — | — | — | — | — | (2,902 | ) | (2,902 | ) | |||||||||||||||||||||||||
Adjustment of redeemable noncontrolling interest to fair value | — | — | 1,690 | — | — | — | — | 1,690 | — | 1,690 | |||||||||||||||||||||||||||
Purchase of additional equity in redeemable noncontrolling interest | — | — | 1,593 | — | — | — | — | 1,593 | — | 1,593 | |||||||||||||||||||||||||||
Tax benefit associated with stock issued under employee compensation plans | — | — | 9,274 | — | — | — | — | 9,274 | — | 9,274 | |||||||||||||||||||||||||||
Issuance of stock under employee compensation plans | 837 | 8 | 23,212 | — | — | — | — | 23,220 | — | 23,220 | |||||||||||||||||||||||||||
Acquisition of treasury shares | — | — | — | — | — | 172 | (12,267 | ) | (12,267 | ) | — | (12,267 | ) | ||||||||||||||||||||||||
Stock-based compensation | — | — | 43,642 | — | — | — | — | 43,642 | — | 43,642 | |||||||||||||||||||||||||||
December 31, 2016 | 86,301 | 863 | 2,477,371 | 165,303 | (253,764 | ) | 38,938 | (1,553,005 | ) | 836,768 | 2,357 | 839,125 | |||||||||||||||||||||||||
Net income | — | — | — | 123,355 | — | — | — | 123,355 | 1,179 | 124,534 | |||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | 109,033 | — | — | 109,033 | — | 109,033 | |||||||||||||||||||||||||||
Dividends declared to noncontrolling interest | — | — | — | — | — | — | — | — | (1,209 | ) | (1,209 | ) | |||||||||||||||||||||||||
Issuance of stock under employee compensation plans | 1,194 | 12 | 38,818 | — | — | — | — | 38,830 | — | 38,830 | |||||||||||||||||||||||||||
Acquisition of treasury shares | — | — | — | — | — | 1,155 | (106,909 | ) | (106,909 | ) | — | (106,909 | ) | ||||||||||||||||||||||||
Stock-based compensation | — | — | 44,003 | — | — | — | — | 44,003 | — | 44,003 | |||||||||||||||||||||||||||
December 30, 2017 | 87,495 | $ | 875 | $ | 2,560,192 | $ | 288,658 | $ | (144,731 | ) | 40,093 | $ | (1,659,914 | ) | $ | 1,045,080 | $ | 2,327 | $ | 1,047,407 | |||||||||||||||||
See Notes to Consolidated Financial Statements. |
• | 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. |
• | 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; |
• | Contingent consideration - Valued based on a probability weighting of the future cash flows associated with the potential outcomes; and |
• | Redeemable noncontrolling interest - Valued using the income approach based on estimated future cash flows of the underlying business discounted by a weighted average cost of capital. |
Estimated Useful Lives | |
(in years) | |
Land | Indefinite |
Buildings | 20 - 40 |
Machinery and equipment | 3 - 20 |
Furniture and fixtures | 5 - 10 |
Computer hardware and software | 3 - 8 |
Vehicles | 3 - 5 |
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 | 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 |
September 28, 2016 | |||
(in thousands) | |||
Trade receivables (contractual amount of $4,799) | $ | 4,799 | |
Other current assets (excluding cash) | 794 | ||
Property, plant and equipment | 3,907 | ||
Other long-term assets | 11 | ||
Definite-lived intangible assets | 21,900 | ||
Goodwill | 44,517 | ||
Current liabilities | (3,812 | ) | |
Long-term liabilities | (10,091 | ) | |
Total purchase price allocation | $ | 62,025 |
Definite-Lived Intangible Assets | Weighted Average Amortization Life | ||||
(in thousands) | (in years) | ||||
Client relationships | $ | 16,700 | 17 | ||
Other intangible assets | 5,200 | 4 | |||
Total definite-lived intangible assets | $ | 21,900 | 14 |
June 27, 2016 | |||
(in thousands) | |||
Trade receivables (contractual amount of $1,104) | $ | 1,104 | |
Other current assets (excluding cash) | 15 | ||
Property, plant and equipment | 912 | ||
Other long-term assets | 187 | ||
Definite-lived intangible assets | 1,230 | ||
Goodwill | 10,334 | ||
Current liabilities | (1,132 | ) | |
Long-term liabilities | (901 | ) | |
Total purchase price allocation | $ | 11,749 |
Definite-Lived Intangible Assets | Weighted Average Amortization Life | ||||
(in thousands) | (in years) | ||||
Client relationships | $ | 650 | 10 | ||
Other intangible assets | 580 | 5 | |||
Total definite-lived intangible assets | $ | 1,230 | 7 |
April 4, 2016 | |||
(in thousands) | |||
Trade receivables (contractual amount of $48,625) | $ | 48,157 | |
Inventories | 2,296 | ||
Other current assets (excluding cash) | 3,814 | ||
Property, plant and equipment | 129,066 | ||
Other long-term assets | 1,060 | ||
Definite-lived intangible assets | 164,800 | ||
Goodwill | 330,175 | ||
Deferred revenue | (39,103 | ) | |
Other current liabilities | (27,386 | ) | |
Long-term liabilities | (35,488 | ) | |
Total purchase price allocation | $ | 577,391 |
Definite-Lived Intangible Assets | Weighted Average Amortization Life | ||||
(in thousands) | (in years) | ||||
Client relationships | $ | 137,500 | 15 | ||
Developed technology | 20,700 | 3 | |||
Backlog | 6,600 | 1 | |||
Total definite-lived intangible assets | $ | 164,800 | 13 |
Fiscal Year | |||||||
2016 | 2015 | ||||||
(in thousands, except per share amounts) | |||||||
(unaudited) | |||||||
Revenue | $ | 1,741,964 | $ | 1,578,133 | |||
Net income attributable to common shareholders | 175,779 | 153,974 | |||||
Earnings per common share: | |||||||
Basic | $ | 3.74 | $ | 3.31 | |||
Diluted | $ | 3.67 | $ | 3.23 |
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 |
November 18, 2015 | |||
(in thousands) | |||
Trade receivables (contractual amount of $3,546) | $ | 3,520 | |
Inventories | 129 | ||
Other current assets (excluding cash) | 706 | ||
Property, plant and equipment | 2,528 | ||
Definite-lived intangible assets | 13,330 | ||
Goodwill | 22,894 | ||
Other long-term assets | 250 | ||
Current liabilities | (3,456 | ) | |
Long-term liabilities | (4,470 | ) | |
Total purchase price allocation | $ | 35,431 |
Definite-Lived Intangible Assets | Weighted Average Amortization Life | ||||
(in thousands) | (in years) | ||||
Client relationships | $ | 7,146 | 19 | ||
Developed technology | 5,960 | 19 | |||
Other intangible assets | 224 | 3 | |||
Total definite-lived intangible assets | $ | 13,330 | 19 |
July 24, 2015 | |||
(in thousands) | |||
Trade receivables (contractual amount of $5,410) | $ | 5,288 | |
Inventories | 10,103 | ||
Other current assets (excluding cash) | 13,269 | ||
Property, plant and equipment | 4,639 | ||
Definite-lived intangible assets | 118,140 | ||
Goodwill | 105,550 | ||
Other long-term assets | 537 | ||
Current debt | (9,766 | ) | |
Other current liabilities | (7,136 | ) | |
Long-term liabilities | (28,388 | ) | |
Total purchase price allocation | $ | 212,236 |
Definite-Lived Intangible Assets | Weighted Average Amortization Life | ||||
(in thousands) | (in years) | ||||
Client relationships | $ | 71,000 | 16 | ||
Developed technology | 39,140 | 14 | |||
Trademark and trade names | 5,200 | 14 | |||
Non-compete | 2,800 | 5 | |||
Total definite-lived intangible assets | $ | 118,140 | 15 |
Fiscal Year 2015 | |||
(in thousands, except per share amounts) | |||
(unaudited) | |||
Revenue | $ | 1,380,493 | |
Net income attributable to common shareholders | 162,672 | ||
Earnings per common share: | |||
Basic | $ | 3.50 | |
Diluted | $ | 3.42 |
May 5, 2015 | |||
(in thousands) | |||
Trade receivables (contractual amount of $995) | $ | 965 | |
Inventories | 1,518 | ||
Other current assets (excluding cash) | 973 | ||
Property, plant and equipment | 13,698 | ||
Definite-lived intangible assets | 3,400 | ||
Current liabilities | (925 | ) | |
Long-term liabilities | (250 | ) | |
Fair value of net assets acquired | 19,379 | ||
Bargain purchase gain | (9,821 | ) | |
Total purchase price allocation | $ | 9,558 |
December 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
Client receivables | $ | 335,839 | $ | 283,997 | |||
Unbilled revenue | 96,297 | 82,203 | |||||
Total | 432,136 | 366,200 | |||||
Less: Allowance for doubtful accounts | (2,120 | ) | (2,150 | ) | |||
Trade receivables, net | $ | 430,016 | $ | 364,050 |
December 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
Raw materials and supplies | $ | 19,858 | $ | 18,893 | |||
Work in process | 18,200 | 13,681 | |||||
Finished products | 76,898 | 63,259 | |||||
Inventories | $ | 114,956 | $ | 95,833 |
December 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
Investments | $ | 28,489 | $ | 3,771 | |||
Prepaid income tax | 52,234 | 40,705 | |||||
Restricted cash | 592 | 532 | |||||
Other current assets | $ | 81,315 | $ | 45,008 |
December 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
Land | $ | 48,989 | $ | 47,392 | |||
Buildings (1) | 812,230 | 784,129 | |||||
Machinery and equipment (1) | 450,992 | 403,123 | |||||
Leasehold improvements | 52,969 | 47,071 | |||||
Furniture and fixtures | 27,455 | 24,148 | |||||
Computer hardware and software | 140,216 | 127,283 | |||||
Vehicles (1) | 4,582 | 4,118 | |||||
Construction in progress | 45,518 | 24,703 | |||||
Total | 1,582,951 | 1,461,967 | |||||
Less: Accumulated depreciation | (800,978 | ) | (706,140 | ) | |||
Property, plant and equipment, net | $ | 781,973 | $ | 755,827 |
December 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
Life insurance policies | $ | 34,008 | $ | 29,456 | |||
Venture capital investments | 71,101 | 45,331 | |||||
Restricted cash | 1,945 | 1,736 | |||||
Other | 16,948 | 11,907 | |||||
Other assets | $ | 124,002 | $ | 88,430 |
December 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
Accrued income taxes | $ | 43,250 | $ | 25,621 | |||
Other | 1,210 | 879 | |||||
Other current liabilities | $ | 44,460 | $ | 26,500 |
December 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
Transition Tax (Note 9) | $ | 61,038 | $ | — | |||
Long-term pension liability | 52,364 | 89,984 | |||||
Accrued executive supplemental life insurance retirement plan and deferred compensation plan | 37,582 | 32,880 | |||||
Other | 43,831 | 36,375 | |||||
Other long-term liabilities | $ | 194,815 | $ | 159,239 |
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 |
December 31, 2016 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in thousands) | |||||||||||||||
Cash equivalents | $ | — | $ | 21 | $ | — | $ | 21 | |||||||
Other assets: | |||||||||||||||
Life insurance policies | — | 22,121 | — | 22,121 | |||||||||||
Total assets measured at fair value | $ | — | $ | 22,142 | $ | — | $ | 22,142 | |||||||
Other current liabilities: | |||||||||||||||
Contingent consideration | $ | — | $ | — | $ | 3,621 | $ | 3,621 | |||||||
Total liabilities measured at fair value | $ | — | $ | — | $ | 3,621 | $ | 3,621 |
Fiscal Year | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Beginning balance | $ | 3,621 | $ | 1,370 | |||
Additions | 296 | 3,600 | |||||
Payments | (3,606 | ) | (872 | ) | |||
Total gains or losses (realized/unrealized): | |||||||
Reversal of previously recorded contingent liability and change in fair value | (13 | ) | (477 | ) | |||
Ending balance | $ | 298 | $ | 3,621 |
Adjustments to Goodwill | Adjustments to Goodwill | ||||||||||||||||||||||||||||||
December 26, 2015 | Acquisitions | Transfers | Foreign Exchange | December 31, 2016 | Acquisitions / (Divestiture) | Foreign Exchange | December 30, 2017 | ||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||
RMS | $ | 58,167 | $ | — | $ | (342 | ) | $ | (1,428 | ) | $ | 56,397 | $ | — | $ | 1,725 | $ | 58,122 | |||||||||||||
DSA | 1,252,050 | 337,872 | — | (21,446 | ) | 1,568,476 | 11,942 | 29,758 | 1,610,176 | ||||||||||||||||||||||
Manufacturing | 133,612 | 46,859 | 342 | (13,169 | ) | 167,644 | (36,000 | ) | 9,964 | 141,608 | |||||||||||||||||||||
Gross carrying amount | 1,443,829 | 1,792,517 | 1,809,906 | ||||||||||||||||||||||||||||
Accumulated impairment loss - DSA | (1,005,000 | ) | — | — | — | (1,005,000 | ) | — | — | (1,005,000 | ) | ||||||||||||||||||||
Goodwill | $ | 438,829 | $ | 787,517 | $ | 804,906 |
December 30, 2017 | December 31, 2016 | ||||||||||||||||||||||
Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Backlog | $ | 8,111 | $ | (8,111 | ) | $ | — | $ | 8,370 | $ | (6,390 | ) | $ | 1,980 | |||||||||
Technology | 81,309 | (27,157 | ) | 54,152 | 71,425 | (14,314 | ) | 57,111 | |||||||||||||||
Trademarks and trade names | 8,661 | (4,562 | ) | 4,099 | 8,177 | (4,124 | ) | 4,053 | |||||||||||||||
Other | 17,465 | (7,845 | ) | 9,620 | 16,775 | (5,628 | ) | 11,147 | |||||||||||||||
Other intangible assets | 115,546 | (47,675 | ) | 67,871 | 104,747 | (30,456 | ) | 74,291 | |||||||||||||||
Client relationships | 540,425 | (238,534 | ) | 301,891 | 519,123 | (198,966 | ) | 320,157 | |||||||||||||||
Intangible assets | $ | 655,971 | $ | (286,209 | ) | $ | 369,762 | $ | 623,870 | $ | (229,422 | ) | $ | 394,448 |
Fiscal Year | Amortization Expense | |||
(in thousands) | ||||
2018 | $ | 38,262 | ||
2019 | 34,087 | |||
2020 | 33,036 | |||
2021 | 31,361 | |||
2022 | 30,801 |
December 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
Term loans | $ | 601,250 | $ | 633,750 | |||
Revolving credit facility | 500,997 | 578,759 | |||||
Other long-term debt | 18,292 | 185 | |||||
Total debt | 1,120,539 | 1,212,694 | |||||
Less: Current portion of long-term debt | (28,546 | ) | (24,560 | ) | |||
Long-term debt | 1,091,993 | 1,188,134 | |||||
Debt discount and debt issuance costs | (5,770 | ) | (7,633 | ) | |||
Long-term debt, net | $ | 1,086,223 | $ | 1,180,501 |
Principal | ||||
(in thousands) | ||||
2018 | $ | 28,545 | ||
2019 | 52,813 | |||
2020 | 81,250 | |||
2021 | 939,747 | |||
Total | $ | 1,102,355 |
Minimum Lease Payments | ||||
(in thousands) | ||||
2018 | $ | 3,618 | ||
2019 | 3,229 | |||
2020 | 2,969 | |||
2021 | 2,757 | |||
2022 | 2,362 | |||
Thereafter | 28,281 | |||
Total | $ | 43,216 |
Fiscal Year | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
Numerator: | |||||||||||
Income from continuing operations, net of income taxes | $ | 125,586 | $ | 156,086 | $ | 152,037 | |||||
Income (loss) from discontinued operations, net of income taxes | (137 | ) | 280 | (950 | ) | ||||||
Less: Net income attributable to noncontrolling interests | 2,094 | 1,601 | 1,774 | ||||||||
Net income attributable to common shareholders | $ | 123,355 | $ | 154,765 | $ | 149,313 | |||||
Denominator: | |||||||||||
Weighted-average shares outstanding—Basic | 47,481 | 47,014 | 46,496 | ||||||||
Effect of dilutive securities: | |||||||||||
Stock options, restricted stock units, performance share units and restricted stock | 1,083 | 944 | 1,138 | ||||||||
Weighted-average shares outstanding—Diluted | 48,564 | 47,958 | 47,634 |
Foreign Currency Translation Adjustment and Other(3) | Pension and Other Post-Retirement Benefit Plans | Total | |||||||||
(in thousands) | |||||||||||
December 26, 2015 | $ | (82,977 | ) | $ | (52,571 | ) | $ | (135,548 | ) | ||
Other comprehensive loss before reclassifications (1) | (71,618 | ) | (60,678 | ) | (132,296 | ) | |||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | 1,711 | 1,711 | ||||||||
Net current period other comprehensive income (loss) | (71,618 | ) | (58,967 | ) | (130,585 | ) | |||||
Income tax benefit | — | (12,369 | ) | (12,369 | ) | ||||||
December 31, 2016 | (154,595 | ) | (99,169 | ) | (253,764 | ) | |||||
Other comprehensive income before reclassifications (2) | 77,050 | 36,593 | 113,643 | ||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | 3,344 | 3,344 | ||||||||
Net current period other comprehensive income (loss) | 77,050 | 39,937 | 116,987 | ||||||||
Income tax expense | — | 7,954 | 7,954 | ||||||||
December 30, 2017 | $ | (77,545 | ) | $ | (67,186 | ) | $ | (144,731 | ) | ||
(1) The impact of the foreign currency translation adjustment to other comprehensive income (loss) before reclassifications for fiscal year 2016 was primarily due to the effect of changes in foreign currency exchange rates of the Euro, British Pound, and Canadian Dollar and to a lesser extent due to the impact of changes in the Chinese Yuan Renminbi and Japanese Yen. | |||||||||||
(2) The impact of the foreign currency translation adjustment to other comprehensive income (loss) before reclassifications for fiscal year 2017 was primarily due to the effect of changes in foreign currency exchange rates of the Euro, British Pound, and Canadian Dollar and to a lesser extent due to the impact of changes in the Chinese Yuan Renminbi and Japanese Yen. | |||||||||||
(3) Foreign currency translation adjustment and other includes a non-significant amount of unrealized gains (losses) on available-for-sale marketable securities. |
Redeemable Noncontrolling Interest | |||
(in thousands) | |||
December 26, 2015 | $ | 28,008 | |
Total gains or losses (realized/unrealized): | |||
Net income attributable to noncontrolling interest | 320 | ||
Foreign currency translation | (653 | ) | |
Change in fair value, included in additional paid-in capital | (1,690 | ) | |
July 7, 2016 | $ | 25,985 |
Fiscal Year | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Beginning balance (1) | $ | 14,659 | $ | 25,985 | |||
Purchase of 12% equity interest | — | (12,360 | ) | ||||
Total gains or losses (realized/unrealized): | |||||||
Net income attributable to noncontrolling interest | 916 | 357 | |||||
Foreign currency translation | 1,034 | (818 | ) | ||||
Modification of 13% purchase option | — | 1,495 | |||||
Ending balance | $ | 16,609 | $ | 14,659 | |||
(1) The beginning balance for fiscal year 2016 is comprised of the fair value amount of the redeemable noncontrolling interest at July 7, 2016. |
Fiscal Year | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
Income from continuing operations before income taxes: | |||||||||||
U.S. | $ | 123,896 | $ | 59,255 | $ | 76,157 | |||||
Non-U.S. | 173,059 | 163,666 | 119,271 | ||||||||
$ | 296,955 | $ | 222,921 | $ | 195,428 | ||||||
Income tax provision: | |||||||||||
Current: | |||||||||||
Federal | $ | 93,871 | $ | 18,592 | $ | 23,687 | |||||
Foreign | 37,150 | 39,829 | 8,572 | ||||||||
State | 12,361 | 5,263 | 6,819 | ||||||||
Total current | 143,382 | 63,684 | 39,078 | ||||||||
Deferred: | |||||||||||
Federal | 9,416 | 7,206 | 1,790 | ||||||||
Foreign | 14,953 | (4,024 | ) | 3,064 | |||||||
State | 3,618 | (31 | ) | (541 | ) | ||||||
Total deferred | 27,987 | 3,151 | 4,313 | ||||||||
$ | 171,369 | $ | 66,835 | $ | 43,391 |
December 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
Deferred tax assets: | |||||||
Compensation | $ | 40,788 | $ | 70,863 | |||
Accruals and reserves | 8,248 | 8,103 | |||||
Inventory reserves and valuations | 2,135 | 3,447 | |||||
Net operating loss and credit carryforwards | 33,160 | 58,081 | |||||
Other | 7,661 | 8,141 | |||||
Valuation allowance | (10,591 | ) | (10,101 | ) | |||
Total deferred tax assets | 81,401 | 138,534 | |||||
Deferred tax liabilities: | |||||||
Goodwill and other intangibles | (89,636 | ) | (121,256 | ) | |||
Financing related | (429 | ) | (854 | ) | |||
Depreciation related | (23,763 | ) | (32,271 | ) | |||
Venture capital investments | (7,796 | ) | (5,084 | ) | |||
Tax on unremitted earnings | (19,204 | ) | (821 | ) | |||
Other | (7,459 | ) | (5,220 | ) | |||
Total deferred tax liabilities | (148,287 | ) | (165,506 | ) | |||
Net deferred taxes | $ | (66,886 | ) | $ | (26,972 | ) |
Fiscal Year | ||||||||
2017 | 2016 | 2015 | ||||||
U.S. statutory income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
Foreign tax rate differences | (6.8 | )% | (10.3 | )% | (8.6 | )% | ||
State income taxes, net of federal tax benefit | 2.0 | % | 1.6 | % | 1.9 | % | ||
Research tax credits and enhanced deductions | (2.4 | )% | (3.5 | )% | (2.6 | )% | ||
Stock-based compensation | (3.2 | )% | — | % | — | % | ||
Enacted tax rate changes | (4.2 | )% | (0.8 | )% | (1.5 | )% | ||
Transition Tax | 24.8 | % | — | % | — | % | ||
Impact of tax uncertainties | (0.4 | )% | 0.2 | % | (5.2 | )% | ||
Tax on unremitted earnings | 7.3 | % | 2.0 | % | 3.4 | % | ||
Impact of acquisitions and restructuring | 3.8 | % | 1.8 | % | (2.0 | )% | ||
Other | 1.8 | % | 4.0 | % | 1.8 | % | ||
Effective income tax rate | 57.7 | % | 30.0 | % | 22.2 | % |
Fiscal Year | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
Beginning balance | $ | 24,186 | $ | 23,338 | $ | 34,627 | |||||
Additions to tax positions for current year | 1,791 | 2,194 | 2,362 | ||||||||
Additions to tax positions for prior years | 1,428 | 2,035 | 3,028 | ||||||||
Reductions to tax positions for prior years | — | (1,866 | ) | (3,991 | ) | ||||||
Settlements | (1,754 | ) | (918 | ) | (1,946 | ) | |||||
Expiration of statute of limitations | (941 | ) | (597 | ) | (10,742 | ) | |||||
Ending balance | $ | 24,710 | $ | 24,186 | $ | 23,338 |
December 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
Change in projected benefit obligations: | |||||||
Benefit obligation at beginning of year | $ | 379,942 | $ | 345,220 | |||
Service cost | 3,110 | 2,453 | |||||
Interest cost | 11,642 | 12,046 | |||||
Benefit payments | (9,665 | ) | (13,383 | ) | |||
Curtailment | — | (279 | ) | ||||
Settlements | — | (5,499 | ) | ||||
Plan amendments | (1 | ) | 188 | ||||
Transfer in from acquisition | — | 5,271 | |||||
Actuarial loss (gain) | (15,724 | ) | 71,006 | ||||
Administrative expenses paid | (698 | ) | (605 | ) | |||
Effect of foreign exchange | 24,358 | (36,476 | ) | ||||
Benefit obligation at end of year | $ | 392,964 | $ | 379,942 | |||
Change in fair value of plan assets: | |||||||
Fair value of plan assets at beginning of year | $ | 256,903 | $ | 275,480 | |||
Actual return on plan assets | 33,558 | 23,388 | |||||
Employer contributions | 5,165 | 10,551 | |||||
Settlements | — | (5,499 | ) | ||||
Transfer in from acquisition | — | 508 | |||||
Benefit payments | (9,665 | ) | (13,383 | ) | |||
Administrative expenses paid | (698 | ) | (605 | ) | |||
Effect of foreign exchange | 19,062 | (33,537 | ) | ||||
Fair value of plan assets at end of year | $ | 304,325 | $ | 256,903 | |||
Net balance sheet liability | $ | 88,639 | $ | 123,039 | |||
Amounts recognized in balance sheet: | |||||||
Noncurrent assets | $ | 1,169 | $ | — | |||
Current liabilities | 1,228 | 1,120 | |||||
Noncurrent liabilities | 88,580 | 121,919 |
Fiscal Year | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Net actuarial loss | $ | 94,705 | $ | 123,743 | |||
Net prior service cost (credit) | (3,203 | ) | (3,300 | ) | |||
Net amount recognized | $ | 91,502 | $ | 120,443 |
December 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
Accumulated benefit obligation | $ | 359,965 | $ | 346,122 | |||
Fair value of plan assets | 285,609 | 242,172 |
December 30, 2017 | December 31, 2016 | ||||||
(in thousands) | |||||||
Projected benefit obligation | $ | 381,960 | $ | 379,942 | |||
Fair value of plan assets | 292,152 | 256,903 |
December 30, 2017 | |||
(in thousands) | |||
Amortization of net actuarial loss | $ | 3,007 | |
Amortization of net prior service credit | (521 | ) |
Fiscal Year | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
Service cost | $ | 3,110 | $ | 2,453 | $ | 4,293 | |||||
Interest cost | 11,642 | 12,046 | 12,974 | ||||||||
Expected return on plan assets | (14,249 | ) | (14,164 | ) | (16,987 | ) | |||||
Amortization of prior service cost (credit) | (496 | ) | (292 | ) | (581 | ) | |||||
Amortization of net loss (gain) | 3,845 | 2,003 | 3,198 | ||||||||
Curtailment | — | (279 | ) | — | |||||||
Settlements | — | 788 | — | ||||||||
Net periodic cost (benefit) | $ | 3,852 | $ | 2,555 | $ | 2,897 |
December 30, 2017 | December 31, 2016 | ||||
Discount rate | 2.82 | % | 3.01 | % | |
Rate of compensation increase | 3.16 | % | 3.25 | % |
December 30, 2017 | December 31, 2016 | December 26, 2015 | ||||||
Discount rate | 3.01 | % | 3.89 | % | 3.75 | % | ||
Expected long-term return on plan assets | 5.41 | % | 5.83 | % | 6.24 | % | ||
Rate of compensation increase | 3.25 | % | 3.17 | % | 3.18 | % |
December 30, 2017 | December 31, 2016 | ||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||
Cash | $ | 564 | $ | — | $ | — | $ | 564 | $ | 108 | $ | — | $ | — | $ | 108 | |||||||||||||||
Equity securities(1) | 88,854 | — | — | 88,854 | 63,348 | 6,252 | — | 69,600 | |||||||||||||||||||||||
Debt securities(2) | 18,485 | 4,117 | — | 22,602 | 59,294 | 3,269 | — | 62,563 | |||||||||||||||||||||||
Mutual funds(3) | 74,708 | 66,656 | — | 141,364 | 64,698 | 56,596 | — | 121,294 | |||||||||||||||||||||||
Other (4) | 472 | 48,713 | 1,756 | 50,941 | 1,318 | 586 | 1,434 | 3,338 | |||||||||||||||||||||||
Total | $ | 183,083 | $ | 119,486 | $ | 1,756 | $ | 304,325 | $ | 188,766 | $ | 66,703 | $ | 1,434 | $ | 256,903 | |||||||||||||||
(1) This category comprises equity securities held by non-U.S. pension plans valued at the quoted closing price, and translated into U.S. dollars using a foreign currency exchange rate at year end. | |||||||||||||||||||||||||||||||
(2) This category comprises debt securities held by non-U.S. pension plans valued at the quoted closing price, and translated into U.S. dollars using a foreign currency exchange rate at year end. | |||||||||||||||||||||||||||||||
(3) This category comprises mutual funds valued at the net asset value of shares held at year end. | |||||||||||||||||||||||||||||||
(4) This category mainly comprises fixed income securities tied to various UK government bond yields held by non-US pension plans valued at the net asset value of shares held at year-end, and translated into U.S. dollars using a foreign currency exchange rate at year end. |
Fiscal Year | Pension Plans | |||
(in thousands) | ||||
2018 | $ | 8,905 | ||
2019 | 9,181 | |||
2020 | 9,623 | |||
2021 | 33,623 | |||
2022 | 10,243 | |||
Thereafter | 68,838 |
• | Stock options, which entitle the holder to purchase a specified number of shares of common stock at an exercise price equal to the closing market price of common stock on the date of grant; typically vest over 4 years; and typically expire 5 to 7 years from date of grant. |
• | Restricted stock, which is an award of common stock issued on the grant date and subject to vesting, typically over 2 to 4 years. Recipients cannot sell or transfer the shares until the restriction period has lapsed, but are entitled to forfeitable cash dividends and to vote their respective shares upon grant. |
• | RSUs, which represent an unsecured promise to grant at no cost a set number of shares of common stock upon the completion of the vesting schedule, and typically vest over 2 to 4 years. With respect to RSUs, recipients are not entitled to cash dividends and have no voting rights on the stock during the vesting period. |
• | PSUs, which entitle the holder to receive at no cost, a specified number of shares of common stock within a range of shares from zero to a specified maximum and typically vest over 3 years. Payout of this award is contingent upon achievement of certain performance and market conditions. |
Fiscal Year | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
Cost of revenue (excluding amortization of intangible assets) | $ | 6,509 | $ | 6,508 | $ | 6,511 | |||||
Selling, general and administrative | 37,494 | 37,134 | 33,611 | ||||||||
Stock-based compensation, before income taxes | 44,003 | 43,642 | 40,122 | ||||||||
Provision for income taxes | (13,428 | ) | (15,548 | ) | (14,225 | ) | |||||
Stock-based compensation, net of income taxes | $ | 30,575 | $ | 28,094 | $ | 25,897 |
Number of shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life | Aggregate Intrinsic Value | |||||||||
(in thousands) | (in years) | (in thousands) | ||||||||||
Options outstanding as of December 31, 2016 | 1,970 | $ | 60.82 | |||||||||
Options granted | 603 | $ | 88.35 | |||||||||
Options exercised | (742 | ) | $ | 52.41 | ||||||||
Options canceled | (57 | ) | $ | 76.78 | ||||||||
Options outstanding as of December 30, 2017 | 1,774 | $ | 73.19 | 3.2 | $ | 64,274 | ||||||
Options exercisable as of December 30, 2017 | 469 | $ | 56.19 | 2.3 | $ | 24,958 | ||||||
Options expected to vest as of December 30, 2017 | 1,304 | $ | 79.30 | 3.5 | $ | 39,315 |
Fiscal Year | ||||||||
2017 | 2016 | 2015 | ||||||
Expected life (in years) | 3.6 | 3.6 | 3.6 | |||||
Expected volatility | 24 | % | 25 | % | 28 | % | ||
Risk-free interest rate | 1.6 | % | 1.2 | % | 1.1 | % | ||
Expected dividend yield | 0 | % | 0 | % | 0 | % |
Restricted Stock and Restricted Stock Units | Weighted Average Grant Date Fair Value | |||||
(in thousands) | ||||||
December 31, 2016 | 515 | $ | 67.62 | |||
Granted | 253 | $ | 88.86 | |||
Vested | (223 | ) | $ | 60.82 | ||
Canceled | (31 | ) | $ | 77.43 | ||
December 30, 2017 | 514 | $ | 80.45 |
Fiscal Year | |||||||||||
2017 | 2016 | 2015 | |||||||||
PSUs granted | 197,645 | 190,628 | 148,900 | ||||||||
Weighted average per share grant date fair value | $ | 99.96 | $ | 80.38 | $ | 88.62 | |||||
Key Assumptions: | |||||||||||
Expected volatility | 26 | % | 24 | % | 23 | % | |||||
Risk-free interest rate | 1.34 | % | 0.91 | % | 0.96 | % | |||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | |||||
20 trading day average stock price on grant date | 17.7 | % | (4.8 | )% | 20.6 | % |
Fiscal Year | ||||||||||
Location of Gain | 2017 | 2016 | 2015 | |||||||
(in thousands) | ||||||||||
Other income, net | $ | — | $ | 3,373 | $ | (4,917 | ) |
Minimum Lease Payments | ||||
(in thousands) | ||||
2018 | $ | 25,361 | ||
2019 | 23,177 | |||
2020 | 20,725 | |||
2021 | 16,480 | |||
2022 | 13,203 | |||
Thereafter | 45,159 | |||
Total | $ | 144,105 |
Severance and Transition Costs | Asset Impairments and Accelerated Depreciation | Total | |||||||||
(in thousands) | |||||||||||
Cost of services provided and products sold (excluding amortization of intangible assets) | $ | 362 | $ | 17,716 | $ | 18,078 | |||||
Selling, general and administrative | 67 | — | 67 | ||||||||
Total | $ | 429 | $ | 17,716 | $ | 18,145 |
2017 | |||||||||||
Severance and Transition Costs | Asset Impairments and Accelerated Depreciation | Total | |||||||||
(in thousands) | |||||||||||
Cost of services provided and products sold (excluding amortization of intangible assets) | $ | 1,944 | $ | 929 | $ | 2,873 | |||||
Selling, general and administrative | 1,905 | — | 1,905 | ||||||||
Total | $ | 3,849 | $ | 929 | $ | 4,778 |
2016 | |||||||||||||||
Severance and Transition Costs | Lease Obligations | Asset Impairments and Accelerated Depreciation | Total | ||||||||||||
(in thousands) | |||||||||||||||
Cost of services provided and products sold (excluding amortization of intangible assets) | $ | 4,717 | $ | 4,616 | $ | 4,809 | $ | 14,142 | |||||||
Selling, general and administrative | 3,737 | — | — | 3,737 | |||||||||||
Total | $ | 8,454 | $ | 4,616 | $ | 4,809 | $ | 17,879 |
2015 | |||||||||||
Severance and Transition Costs | Asset Impairments and Accelerated Depreciation | Total | |||||||||
(in thousands) | |||||||||||
Cost of services provided and products sold (excluding amortization of intangible assets) | $ | 735 | $ | 1,833 | $ | 2,568 | |||||
Selling, general and administrative | 5,438 | — | 5,438 | ||||||||
Total | $ | 6,173 | $ | 1,833 | $ | 8,006 |
Fiscal Year | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
RMS | $ | 291 | $ | 759 | $ | 3,171 | |||||
DSA | 1,604 | 17,114 | 1,068 | ||||||||
Manufacturing | 2,883 | 6 | 1,639 | ||||||||
Unallocated corporate | — | — | 2,128 | ||||||||
Total | $ | 4,778 | $ | 17,879 | $ | 8,006 |
December 30, 2017 | December 31, 2016 | December 26, 2015 | |||||||||
(in thousands) | |||||||||||
Beginning balance | $ | 8,102 | $ | 2,969 | $ | 2,666 | |||||
Expense | 4,278 | 13,070 | 6,173 | ||||||||
Payments / utilization | (6,103 | ) | (7,667 | ) | (5,820 | ) | |||||
Foreign currency adjustments | 579 | (270 | ) | (50 | ) | ||||||
Ending balance | $ | 6,856 | $ | 8,102 | $ | 2,969 |
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
RMS | |||||||||||
Revenue | $ | 493,615 | $ | 494,037 | $ | 470,411 | |||||
Operating income | 114,712 | 136,365 | 120,973 | ||||||||
Depreciation and amortization | 19,627 | 20,853 | 22,526 | ||||||||
Capital expenditures | 20,879 | 11,642 | 17,398 | ||||||||
DSA | |||||||||||
Revenue | $ | 980,022 | $ | 836,593 | $ | 612,173 | |||||
Operating income | 184,063 | 138,157 | 121,981 | ||||||||
Depreciation and amortization | 79,355 | 71,816 | 46,812 | ||||||||
Capital expenditures | 36,616 | 27,493 | 30,333 | ||||||||
Manufacturing | |||||||||||
Revenue | $ | 383,964 | $ | 350,802 | $ | 280,718 | |||||
Operating income | 123,903 | 104,543 | 74,675 | ||||||||
Depreciation and amortization | 22,893 | 25,566 | 18,129 | ||||||||
Capital expenditures | 15,188 | 12,247 | 9,814 |
Operating Income | Capital Expenditures | ||||||||||||||||||||||
Fiscal Year | Fiscal Year | ||||||||||||||||||||||
2017 | 2016 | 2015 | 2017 | 2016 | 2015 | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Total reportable segments | $ | 422,678 | $ | 379,065 | $ | 317,629 | $ | 72,683 | $ | 51,382 | $ | 57,545 | |||||||||||
Unallocated corporate | (135,180 | ) | (141,646 | ) | (111,180 | ) | 9,748 | 3,906 | 5,707 | ||||||||||||||
Total consolidated | $ | 287,498 | $ | 237,419 | $ | 206,449 | $ | 82,431 | $ | 55,288 | $ | 63,252 |
Fiscal Year | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
RMS | $ | 493,615 | $ | 494,037 | $ | 470,411 | |||||
DSA | 980,022 | 836,593 | 612,173 | ||||||||
Manufacturing | 383,964 | 350,802 | 280,718 | ||||||||
Total revenue | $ | 1,857,601 | $ | 1,681,432 | $ | 1,363,302 |
Fiscal Year | |||||||||||
2017 | 2016 | 2015 | |||||||||
(in thousands) | |||||||||||
Stock-based compensation | $ | 27,114 | $ | 27,272 | $ | 25,751 | |||||
Compensation, benefits, and other employee-related expenses | 49,100 | 39,189 | 33,026 | ||||||||
External consulting and other service expenses | 22,224 | 23,421 | 15,418 | ||||||||
Information technology | 11,997 | 13,233 | 8,400 | ||||||||
Depreciation | 9,284 | 8,423 | 7,414 | ||||||||
Acquisition and integration | 3,728 | 15,608 | 11,644 | ||||||||
Other general unallocated corporate | 11,733 | 14,500 | 9,527 | ||||||||
Total unallocated corporate expense | $ | 135,180 | $ | 141,646 | $ | 111,180 |
U.S. | Europe | Canada | Asia Pacific | Other | Consolidated | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
2017 | |||||||||||||||||||||||
Revenue | $ | 959,263 | $ | 569,812 | $ | 200,343 | $ | 126,462 | $ | 1,721 | $ | 1,857,601 | |||||||||||
Long-lived assets | 446,574 | 203,911 | 82,228 | 49,020 | 240 | 781,973 | |||||||||||||||||
2016 | |||||||||||||||||||||||
Revenue | $ | 850,422 | $ | 520,937 | $ | 194,210 | $ | 114,710 | $ | 1,153 | $ | 1,681,432 | |||||||||||
Long-lived assets | 462,330 | 177,423 | 78,866 | 37,111 | 97 | 755,827 | |||||||||||||||||
2015 | |||||||||||||||||||||||
Revenue | $ | 659,466 | $ | 435,491 | $ | 172,349 | $ | 95,996 | $ | — | $ | 1,363,302 | |||||||||||
Long-lived assets | 402,238 | 159,445 | 77,535 | 38,741 | — | 677,959 |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter (1) | ||||||||||||
(in thousands, except per share amounts) | |||||||||||||||
Fiscal Year 2017 | |||||||||||||||
Total revenue | $ | 445,763 | $ | 469,129 | $ | 464,232 | $ | 478,477 | |||||||
Gross profit (2) | 171,699 | 185,662 | 177,204 | 167,749 | |||||||||||
Operating income | 69,472 | 81,310 | 73,984 | 62,732 | |||||||||||
Net income (loss) attributable to common shareholders | 46,778 | 53,952 | 52,474 | (29,849 | ) | ||||||||||
Earnings (loss) per common share | |||||||||||||||
Basic: | |||||||||||||||
Continuing operations attributable to common shareholders | $ | 0.98 | $ | 1.14 | $ | 1.11 | $ | (0.63 | ) | ||||||
Discontinued operations | $ | — | $ | — | $ | — | $ | — | |||||||
Net income (loss) attributable to common shareholders | $ | 0.98 | $ | 1.13 | $ | 1.11 | $ | (0.63 | ) | ||||||
Diluted: | |||||||||||||||
Continuing operations attributable to common shareholders | $ | 0.97 | $ | 1.12 | $ | 1.09 | $ | (0.63 | ) | ||||||
Discontinued operations | $ | — | $ | — | $ | — | $ | — | |||||||
Net income (loss) attributable to common shareholders | $ | 0.97 | $ | 1.12 | $ | 1.08 | $ | (0.63 | ) | ||||||
Fiscal Year 2016 | |||||||||||||||
Total revenue | $ | 354,868 | $ | 434,055 | $ | 425,720 | $ | 466,789 | |||||||
Gross profit (2) | 140,768 | 169,747 | 156,270 | 179,881 | |||||||||||
Operating income | 51,472 | 58,061 | 58,795 | 69,091 | |||||||||||
Net income attributable to common shareholders | 37,143 | 35,207 | 37,735 | 44,680 | |||||||||||
Earnings per common share | |||||||||||||||
Basic: | |||||||||||||||
Continuing operations attributable to common shareholders | $ | 0.80 | $ | 0.75 | $ | 0.79 | $ | 0.95 | |||||||
Discontinued operations | $ | — | $ | — | $ | 0.01 | $ | — | |||||||
Net income attributable to common shareholders | $ | 0.80 | $ | 0.75 | $ | 0.80 | $ | 0.95 | |||||||
Diluted: | |||||||||||||||
Continuing operations attributable to common shareholders | $ | 0.78 | $ | 0.73 | $ | 0.78 | $ | 0.93 | |||||||
Discontinued operations | $ | — | $ | — | $ | 0.01 | $ | — | |||||||
Net income attributable to common shareholders | $ | 0.78 | $ | 0.73 | $ | 0.79 | $ | 0.93 | |||||||
(1) Net loss attributable to common shareholders includes the amounts recorded due to U.S. Tax Reform. See Note 9. | |||||||||||||||
(2) Gross profit is calculated as total revenue minus cost of revenue (excluding amortization of intangible assets). |
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. | |||
By: | /s/ DAVID R. SMITH | ||
David R. Smith | |||
Date: | February 13, 2018 | Corporate Executive Vice President and Chief Financial Officer |
Signatures | Title | Date | |
By: | /s/ JAMES C. FOSTER | Chairman and Chief Executive Officer | February 13, 2018 |
James C. Foster | |||
By: | /s/ DAVID R. SMITH | Corporate Executive Vice President and | February 13, 2018 |
David R. Smith | Chief Financial Officer | ||
By: | /s/ MICHAEL G. KNELL | Corporate Senior Vice President and | February 13, 2018 |
Michael G. Knell | Chief Accounting Officer | ||
By: | /s/ ROBERT J. BERTOLINI | Director | February 13, 2018 |
Robert J. Bertolini | |||
By: | /s/ STEPHEN D. CHUBB | Director | February 13, 2018 |
Stephen D. Chubb | |||
By: | /s/ DEBORAH T. KOCHEVAR | Director | February 13, 2018 |
Deborah T. Kochevar | |||
By: | /s/ MARTIN MACKAY | Director | February 13, 2018 |
Martin Mackay | |||
By: | /s/ JEAN-PAUL MANGEOLLE | Director | February 13, 2018 |
Jean-Paul Mangeolle | |||
By: | /s/ GEORGE E. MASSARO | Director | February 13, 2018 |
George E. Massaro | |||
By: | /s/ GEORGE M. MILNE, JR. | Director | February 13, 2018 |
George M. Milne, Jr. | |||
By: | /s/ C. RICHARD REESE | Director | February 13, 2018 |
C. Richard Reese | |||
By: | /s/ CRAIG B. THOMPSON | Director | February 13, 2018 |
Craig B. Thompson | |||
By: | /s/ RICHARD F. WALLMAN | Director | February 13, 2018 |
Richard F. Wallman |
Exhibit No. | Description | Filed with this Form 10-K | Incorporation by Reference | ||
Form | Filing Date | Exhibit No. | |||
2.1 | 8-K | February 13, 2018 | 2.1 | ||
2.2 | 8-K | February 13, 2018 | 2.2 | ||
3.1 | S-1/A | June 23, 2000 | 3.1 | ||
3.2 | 8-K | May 16, 2016 | 3.2 | ||
4.1 | S-1 | June 23, 2000 | 4.1 | ||
4.2 | 10-K | February 27, 2013 | 4.4 | ||
4.3 | 10-K | February 14, 2017 | 4.3 | ||
10.1* | 10-K | February 17, 2015 | 10.13 | ||
10.2* | 10-Q | August 3, 2016 | 10.1 | ||
10.3* | 10-K | February 20, 2008 | 10.17 | ||
10.4* | 10-K | February 14, 2017 | 10.4 | ||
10.5* | 10-K | February 20, 2008 | 10.18 | ||
10.6* | 10-K | February 14, 2017 | 10.6 | ||
10.7* | 10-K | February 14, 2017 | 10.7 | ||
10.8* | 10-Q | August 3, 2010 | 10.1 | ||
10.9* | 10-K | February 23, 2009 | 10.7 | ||
10.10* | 10-K | February 12, 2016 | 10.4 | ||
10.11* | 10-Q | May 4, 2016 | 10.1 | ||
10.12* | 10-K | March 9, 2005 | 10.23 | ||
10.13* | 10-K | February 27, 2012 | 10.11 | ||
10.14* | 10-Q | August 7, 2012 | 10.1 | ||
10.15* | 10-K | February 23, 2011 | 10.17 | ||
10.16* | 8-K | February 27, 2015 | 99.10 | ||
10.17* | 10-K | February 12, 2016 | 10.16 | ||
10.18 | 8-K | April 5, 2016 | 10.1 | ||
10.19* | 8-K | February 13, 2018 | 99.2 | ||
21.1 | X | ||||
23.1 | X |
Exhibit No. | Description | Filed with this Form 10-K | Incorporation by Reference | ||
Form | Filing Date | Exhibit No. | |||
31.1 | X | ||||
31.2 | X | ||||
32.1 | X | ||||
101.INS | eXtensible Business Reporting Language (XBRL) Instance Document | X | |||
101.SCH | XBRL Taxonomy Extension Schema | X | |||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | X | |||
101.DEF | XBRL Taxonomy Extension Definition Linkbase | X | |||
101.LAB | XBRL Taxonomy Extension Labels Linkbase | X | |||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | X | |||
* Management contract or compensatory plan, contract or arrangement. |
Subsidiary | Jurisdiction of Organization | |
1 | Charles River Laboratories, Inc. | Delaware |
2 | Charles River UK Limited | United Kingdom (England) |
3 | Charles River Laboratories Saint‑Constant S.A. | Quebec, Canada |
4 | Charles River Holdings LLC | Delaware |
5 | Ballardvale CV | Netherlands |
6 | Charles River Nederland BV | Netherlands |
7 | Charles River Laboratories Holding SAS | France |
8 | Charles River Laboratories France-C.R.L.F. SAS | France |
9 | Charles River Laboratories Belgium SPRL | Belgium |
10 | Charles River Laboratories España SA | Spain |
11 | Charles River Laboratories Japan, Inc. | Japan |
12 | Charles River Germany Verwaltungs GmbH | Germany |
13 | Charles River Laboratories Italia Srl | Italy |
14 | Charles River Germany GmbH & Co. KG | Germany |
15 | Charles River Laboratories Poland Sp. Z.o.o. | Poland |
16 | Charles River Laboratories Ireland Limited | Ireland |
17 | Saothorlanna Bitheolaiocha Idirnaisiunta Teoranta | Ireland |
18 | Charles River Laboratories, Research Models and Services, Germany GmbH | Germany |
19 | Charles River Laboratories Luxembourg S.a.r.l. | Luxembourg |
20 | Charles River Laboratories Group | United Kingdom (Scotland) |
21 | Charles River Laboratories Holdings Scotland | United Kingdom (England) |
22 | Charles River Laboratories Edinburgh Ltd. | United Kingdom (Scotland) |
23 | Sunrise Farms, Inc. | New York |
24 | Charles River ULC | Nova Scotia, Canada |
25 | Charles River Laboratories Montreal, ULC | Nova Scotia, Canada |
26 | Charles River Laboratories Australia Pty. Ltd. | Australia |
27 | Zhanjiang A&C Biological Ltd. | China |
28 | Charles River Laboratories Korea | Korea |
29 | Charles River Laboratories Asia Holdings Limited | Hong Kong |
30 | Charles River Biopharmaceutical Services GmbH | Germany |
31 | Charles River Discovery Research Services International, Inc. | Michigan |
32 | Charles River Discovery Research Services, Inc. | Michigan |
33 | Charles River Laboratories India Private Limited | India |
34 | Charles River Discovery Research Services Finland | Finland |
35 | Systems Pathology Company, LLC | Delaware |
36 | Accugenix Inc. | Delaware |
37 | Beijing Vital River Laboratory Animal Technology Co. Ltd. | China |
38 | Charles River Detecção Microbiana e de Endotoxina Participações Ltda | Brazil |
39 | Charles River Endotoxin and Microbial Detection Singapore Pte. Ltd. | Singapore |
40 | Charles River Endotoxin Microbial Detection Europe SAS | France |
41 | Charles River Laboratories Holdings Limited | United Kingdom (England) |
42 | BioFocus DPI (Holdings) Ltd. | United Kingdom (England) |
43 | Charles River Discovery Research Services UK Limited | United Kingdom (England) |
44 | Argenta Discovery 2009 Limited | United Kingdom (England) |
45 | Cangenix Limited | United Kingdom (England) |
46 | Charles River Laboratories Cleveland, Inc. | Delaware |
47 | Charles River Endotoxin and Microbial Detection Israel | Israel |
48 | Charles River Discovery Research Services Germany GmbH | Germany |
49 | CRL Holding Germany GmbH | Germany |
50 | Celsis Group Limited | United Kingdom (England) |
51 | Nastor Investments | United Kingdom (England) |
52 | Celsis International Limited | United Kingdom (England) |
53 | Celsis Limited | United Kingdom (England) |
54 | Celc Sarl | France |
55 | Celsis Europe BV | Netherlands |
56 | Celsis International BV | Netherlands |
57 | Celsis BV | Netherlands |
58 | Celsis International GmbH | Germany |
59 | Charles River Laboratories SA France Acquisition SAS | France |
60 | Charles River Laboratories SA France Holdings SAS | France |
61 | Charles River Laboratories France Safety Assessment SAS | France |
62 | Charles River Laboratories Holding Europe SAS | France |
63 | CRL Safety Assessment, Inc. | Delaware |
64 | Charles River Laboratories SA USA, Inc. | Delaware |
65 | Charles River Laboratories SA Japan KK | Japan |
66 | Charles River Laboratories Ashland. LLC | Delaware |
67 | Charles River Laboratories SA Netherlands Holdings BV | Netherlands |
68 | Charles River Laboratories I Delaware Holdings, Inc. | Delaware |
69 | Charles River Laboratories II Delaware Holdings, Inc. | Delaware |
70 | CRL Dutch Holding Company BV | Netherlands |
71 | Charles River Laboratories Den Bosch BV | Netherlands |
72 | Charles River Laboratories Ireland Holding DAC | Ireland |
73 | Charles River Laboratories Mexico, S. de R.L. de C.V. | Mexico |
74 | 3313290 Nova Scotia Company | Nova Scotia |
75 | Zhejiang Vital River Laboratory Animal Technology Co. Ltd. | China |
76 | Charles River Microbial Solutions International Limited | Ireland |
77 | Neu Encepharm GmbH | Germany |
78 | CRL Holding Netherlands B.V. | Netherlands |
79 | KWS BioTest Limited | United Kingdom (England) |
80 | Forest Acquisition Corporation | Delaware |
1. | I have reviewed this annual report on Form 10-K for the year ended December 30, 2017 of the Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Dated: | February 13, 2018 | /s/ JAMES C. FOSTER | |
James C. Foster Chairman and Chief Executive Officer Charles River Laboratories International, Inc. |
1. | I have reviewed this annual report on Form 10-K for the year ended December 30, 2017 of the Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Dated: | February 13, 2018 | /s/ DAVID R. SMITH | |
David R. Smith Corporate Executive Vice President and Chief Financial Officer Charles River Laboratories International, Inc. |
(1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: | February 13, 2018 | /s/ JAMES C. FOSTER | |
Chairman and Chief Executive Officer Charles River Laboratories International, Inc. | |||
Dated: | February 13, 2018 | /s/ DAVID R. SMITH | |
Corporate Executive Vice President and Chief Financial Officer Charles River Laboratories International, Inc. |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Jan. 26, 2018 |
Jul. 01, 2017 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | CHARLES RIVER LABORATORIES INTERNATIONAL INC | ||
Entity Central Index Key | 0001100682 | ||
Current Fiscal Year End Date | --12-30 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 30, 2017 | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 47,428,916 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 4,728,183,315 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Dec. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
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) | 87,495,000 | 86,301,000 |
Common Stock, shares outstanding (in shares) | 47,402,000 | 47,363,000 |
Treasury stock, shares (in shares) | 40,093,000 | 38,938,000 |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Charles River Laboratories International, Inc. (the Company), together with its subsidiaries, is a full service, early-stage contract research organization (CRO). The Company has built upon its core competency of laboratory animal medicine and science (research model technologies) to develop a diverse portfolio of discovery and safety assessment services, both Good Laboratory Practice (GLP) and non-GLP, that enable the Company to support its clients from target identification through non-clinical development. The Company also provides a suite of products and services to support its clients’ manufacturing activities. Principles of Consolidation The Company’s consolidated financial statements reflect its financial statements and those of its subsidiaries in which the Company holds a controlling financial interest. For consolidated entities in which the Company owns or is exposed to less than 100% of the economics, the Company records net income (loss) attributable to noncontrolling interests in its consolidated statements of income equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. Intercompany balances and transactions are eliminated in consolidation. The Company’s fiscal year is typically based on 52-weeks, with each quarter composed of 13 weeks ending on the last Saturday on, or closest to, March 31, June 30, September 30, and December 31. A 53rd week was included in the fourth quarter of fiscal year 2016, which is occasionally necessary to align with a December 31 calendar year-end. Reclassifications Certain reclassifications have been made in the consolidated statements of cash flows for prior periods to conform to the current year presentation. See “Newly Adopted Accounting Pronouncements” below for further discussion. Segment Reporting The Company reports its results in three reportable segments: Research Models and Services (RMS), Discovery and Safety Assessment (DSA), and Manufacturing Support (Manufacturing). The Company’s RMS reportable segment includes the Research Models and Research Model Services businesses. Research Models includes the commercial production and sale of small research models, as well as the supply of large research models. Research Model Services includes: Genetically Engineered Models and Services (GEMS), which performs contract breeding and other services associated with genetically engineered research models; Research Animal Diagnostic Services (RADS), which provides health monitoring and diagnostics services related to research models; and Insourcing Solutions (IS), which provides colony management of its clients’ research operations (including recruitment, training, staffing, and management services). The Company’s DSA reportable segment includes services required to take a drug through the early development process including discovery services, which are non-regulated services to assist clients with the identification, screening, and selection of a lead compound for drug development, and regulated and non-regulated (GLP and non-GLP) safety assessment services. The Company’s Manufacturing reportable segment includes Microbial Solutions, which provides in vitro (non-animal) lot-release testing products, microbial detection products, and species identification services; Biologics Testing Services (Biologics), which performs specialized testing of biologics; Avian Vaccine Services (Avian), which supplies specific-pathogen-free chicken eggs and chickens; and contract development and manufacturing (CDMO) services, which, until the Company divested this business on February 10, 2017, allowed it to provide formulation design and development, manufacturing, and analytical and stability testing for small molecules. Use of Estimates The preparation of consolidated financial statements in accordance with generally accepted accounting principles in the United States (U.S. GAAP) requires that the Company make estimates and judgments that may affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, judgments and methodologies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known. Cash and Cash Equivalents Cash equivalents include money market funds, time deposits and other investments with remaining maturities at the purchase date of three months or less. Investments Marketable securities are reported at fair value. Realized gains and losses on marketable securities are included in other income, net and are determined using the specific identification method. Unrealized gains and losses on available-for-sale marketable securities are included in accumulated other comprehensive loss. Time deposits with original maturities of greater than three months are reported as investments. Trade Receivables, Net The Company records trade receivables net of an allowance for doubtful accounts. An allowance for doubtful accounts is established based on historical collection information, a review of major client accounts receivable balances and current economic conditions in the geographies in which it operates. Amounts determined to be uncollectible are charged or written off against the allowance. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, investments and trade receivables. The Company places cash and cash equivalents and investments in various financial institutions with high credit rating and limits the amount of credit exposure to any one financial institution. Trade receivables are primarily from clients in the pharmaceutical and biotechnology industries, as well as academic and government institutions. Concentrations of credit risk with respect to trade receivables, which are typically unsecured, are limited due to the wide variety of customers using the Company’s products and services as well as their dispersion across many geographic areas. No single client accounted for more than 5% of revenue or trade receivables for the periods ended December 30, 2017 and December 31, 2016. Fair Value Measurements The accounting standard for fair value measurements defines fair value, establishes a framework for measuring fair value in accordance with U.S. GAAP, and requires certain disclosures about fair value measurements. Under this standard, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has certain financial assets and liabilities recorded at fair value, which have been classified as Level 1, 2 or 3 within the fair value hierarchy:
The fair value hierarchy level is determined by asset, liability and redeemable noncontrolling interest 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. Valuation methodologies used for assets and liabilities measured or disclosed at fair value are as follows:
Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on the average cost method for the small model business and first-in-first-out for the Company’s large model and Microbial Solutions businesses. For the small model business, cost includes direct materials such as feed and bedding, costs of personnel directly involved in the care of the models, and an allocation of facility overhead. For the large model business, cost is primarily the external cost paid to acquire the model. Certain businesses value inventory based on standard costs, which are periodically compared to and adjusted to actual costs. Inventory costs are charged to cost of revenue in the period the products are sold to an external party. The Company analyzes its inventory levels on a quarterly basis and writes down inventory that is determined to be damaged, obsolete or otherwise unmarketable, with a corresponding charge to cost of products sold. Property, Plant and Equipment, Net Property, plant and equipment, net, including improvements that significantly add to productive capacity or extend useful life, are carried at cost and are subject to review for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The cost of normal, recurring, or periodic repairs and maintenance activities related to property, plant and equipment is expensed as incurred. In addition, the Company capitalizes certain internal use computer software development costs. Costs incurred during the preliminary project stage are expensed as incurred, while costs incurred during the application development stage are capitalized and amortized over the estimated useful life of the software. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Maintenance and training costs related to software obtained for internal use are expensed as incurred. Interest costs incurred during the construction of major capital projects are capitalized until the underlying asset is ready for its intended use, at which point the interest costs are amortized as depreciation expense over the life of the underlying asset. The Company generally depreciates the cost of its property, plant and equipment using the straight-line method over the estimated useful lives of the respective assets as follow:
Leasehold improvements are amortized over the shorter of the estimated useful life of the asset or the lease term. Capital lease assets are amortized over the lease term, however, if ownership is transferred by the end of the capital lease, or there is a bargain purchase option, such capital lease assets are amortized over the useful life that would be assigned if such assets were owned. When the Company disposes of property, plant and equipment, it removes the associated cost and accumulated depreciation from the related accounts on its consolidated balance sheet and includes any resulting gain or loss in its consolidated statement of income. Business Acquisitions The Company accounts for business combinations under the acquisition method of accounting. The Company allocates the amounts that it pays for each acquisition to the assets it acquires and liabilities it assumes based on their fair values at the dates of acquisition, including identifiable intangible assets. The Company bases the fair value of identifiable intangible assets acquired in a business combination on valuations that use information and assumptions determined by management and which consider management’s best estimates of inputs and assumptions that a market participant would use. Contingent Consideration The consideration for the Company’s acquisitions often includes future payments that are contingent upon the occurrence of a particular event. The Company records an obligation for such contingent payments at fair value on the acquisition date. The Company estimates the fair value of contingent consideration obligations through valuation models that incorporate probability adjusted assumptions related to the achievement of the milestones and the likelihood of making related payments. The Company revalues these contingent consideration obligations each reporting period. Changes in the fair value of the contingent consideration obligations are recognized in the Company’s consolidated statements of income as a component of selling, general and administrative expenses. Changes in the fair value of the contingent consideration obligations can result from changes to one or multiple inputs, including adjustments to the discount rates and changes in the assumed probabilities of successful achievement of certain financial targets. Discount rates in the Company’s valuation models represent a measure of the credit risk associated with settling the liability. The period over which the Company discounts its contingent obligations is typically based on when the contingent payments would be triggered. These fair value measurements are based on significant inputs not observable in the market. See Note 5, “Fair Value.” Goodwill and Intangible Assets Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets when accounted for using the acquisition method of accounting. Goodwill is not amortized, but reviewed for impairment on an annual basis, during the fourth quarter, or more frequently if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of the Company's reporting units below their carrying amounts. The Company has the option to first assess qualitative factors to determine whether it is necessary to perform the two-step impairment test. If the Company elects this option and believes, as a result of the qualitative assessment, that it is more-likely-than-not that the carrying value of goodwill is not recoverable, the quantitative two-step impairment test is required; otherwise, no further testing is required. Alternatively, the Company may elect to not first assess qualitative factors and immediately perform the quantitative two-step impairment test. In the first step, the Company compares the fair value of its reporting units to their carrying values. If the carrying values of the net assets assigned to the reporting units exceed the fair values of the reporting units, then the second step of the impairment test is performed in order to determine the implied fair value of the Company’s goodwill. If the carrying value of the reporting unit’s goodwill exceeds its implied fair value, then the Company would record an impairment loss equal to the difference. Definite-lived intangible assets, including client relationships, are amortized over the pattern in which the economic benefits of the intangible assets are utilized and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset, which requires the use of customer attribution rates and other assumptions. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the definite-lived intangible assets, the definite-lived intangible assets are written-down to their fair values. Valuation and Impairment of Long-Lived Assets Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written-down to their fair values. Long-lived assets to be disposed of are carried at fair value less costs to sell. 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 or cost 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. Under the equity method of accounting, the Company’s portion of the investment gains and losses, as reported in the fund’s financial statements on a quarterly lag each reporting period, is recorded in other income, net. In addition, the Company adjusts the carrying value of these investments to reflect its estimate of changes to fair value since the fund’s financial statements are based on information from the fund’s management team, market prices of known public holdings of the fund and other information. Under the cost method of accounting, the Company’s investment is initially measured at cost, with distributions recognized in other income, net. Distributions received in excess of earnings subsequent to the date of investment are considered a return of investment and are recorded as reductions of cost of the investment. The Company reviews its cost method investments to determine whether a decline in fair value below the cost basis is other-than-temporary. If the decline in fair value is determined to be other-than-temporary, the cost basis of the investment is written down to fair value. Life Insurance Contracts Investments in life insurance contracts are recorded at cash surrender value. The initial investment at the transaction price is recognized and remeasured based on fair value of underlying investments or contractual value each reporting period. Investments in and redemptions of these life insurance contracts are reported as cash flows from investing activities in the consolidated statement of cash flows. The Company held 43 contracts at both December 30, 2017 and December 31, 2016, with a face value of $66.4 million and $61.4 million, respectively. Stock-Based Compensation The Company grants stock options, restricted stock, restricted stock units (RSUs), and performance share units (PSUs) to employees and stock options, restricted stock, and RSUs to non-employee directors under stock-based compensation plans. Stock-based compensation is recognized as an expense in the consolidated statements of income based on the grant date fair value, adjusted for forfeitures, over the requisite service period. In connection with the adoption of Accounting Standard Update (ASU 2016-09), “Improvements to Employee Share-Based Payment Accounting” (see further discussion in Newly Adopted Accounting Pronouncements), beginning in fiscal 2017, the Company elected to change its accounting policy to account for forfeitures when they occur on a modified retrospective basis, which resulted in an immaterial impact to the Company’s consolidated financial statements and related disclosures. For stock options, restricted stock and RSUs that vest based on service conditions, the Company uses the straight-line method to allocate compensation expense to reporting periods. Where awards are made with non-substantive vesting periods, where a portion of the award continues to vest after the employee’s retirement, the Company recognizes expense based on the period from the grant date to the date on which the employee is retirement eligible. The Company records the expense for PSU grants subject to performance and/or market conditions using the accelerated attribution method over the remaining service period when management determines that achievement of the performance-based milestone is probable. The fair value of stock options granted is calculated using the Black-Scholes option-pricing model and the fair value of PSUs is estimated using a lattice model with a Monte Carlo simulation, both of which require the use of subjective assumptions including volatility and expected term, among others. The expected volatility assumption is typically determined using the historical volatility of the Company’s common stock over the expected life of the stock-based award. The expected term is determined using historical option exercise activity. The fair value of restricted stock and RSUs is based on the market value of the Company’s common stock on the date of grant. Revenue Recognition The Company recognizes revenue when all of the following conditions are satisfied: persuasive evidence of an arrangement exists, delivery has occurred or services have been provided, the price to the customer is fixed or determinable, and collectability is reasonably assured. Service revenue is generally evidenced by client contracts, which range in duration from a few weeks to a few years and typically take the form of an agreed upon rate per unit or fixed fee arrangements. Such contracts typically do not contain acceptance provisions based upon the achievement of certain study or laboratory testing results. Revenue of agreed upon rate per unit contracts is recognized as services are performed, based upon rates specified in the contract. In cases where performance spans reporting periods, revenue of fixed fee contracts is recognized as services are performed, measured on the ratio of outputs or performance obligations completed to the total contractual outputs or performance obligations to be provided. Changes in estimated effort to complete the fixed fee contract are reflected in the period in which the change becomes known. Changes in scope of work are common, especially under long-term contracts, and generally result in a change in contract value. Once the client has agreed to the changes in scope and renegotiated pricing terms, the contract value is amended and revenue is typically recognized as described above. Billing schedules and payment terms are generally negotiated on a contract-by-contract basis. Payments received in excess of revenue recognized are recorded as deferred revenue. As the contracted services are subsequently performed and the associated revenue is recognized, the deferred revenue balance is reduced by the amount of revenue recognized during the period. In other cases, services may be provided and revenue is recognized before the client is invoiced. In these cases, revenue recognized will exceed amounts billed and the difference, representing amounts which are currently unbillable to the customer pursuant to contractual terms, is recorded as an unbilled receivable. Once the client is invoiced, the unbilled receivable is reduced for the amount billed, and a corresponding trade receivable is recorded. Most contracts are terminable by the client, either immediately or upon notice. These contracts often require payment to the Company of expenses to wind down the project, fees earned to date or, in some cases, a termination fee. Such payments are included in revenues when earned. The Company recognizes product revenue net of allowances for estimated returns, rebates and discounts when title and risk of loss pass to customers. When the Company sells equipment with specified acceptance criteria, it assesses its ability to meet the acceptance criteria in order to determine the timing of revenue recognition. The Company would defer revenue until completion of customer acceptance testing if it is not able to demonstrate the ability to meet such acceptance criteria. A portion of the Company’s revenue is from multiple-element arrangements that include multiple products and/or services as deliverables in a single arrangement with each deliverable, or a combination of the deliverables, representing a separate unit of accounting. The Company allocates revenue to each element in a multiple-element arrangement based upon the relative selling price of each deliverable. Revenue allocated to each deliverable is then recognized when all revenue recognition criteria are met. Judgments as to the identification of deliverables, units of accounting, the allocation of consideration to the deliverable, and the appropriate timing of revenue recognition are critical with respect to these arrangements. At the inception of each arrangement that includes milestone payments, the Company evaluates whether each milestone is substantive. This evaluation includes an assessment of whether (a) the consideration is commensurate with either (1) the Company’s performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the Company’s performance to achieve the milestone; (b) the consideration relates solely to past performance; and (c) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. If a substantive milestone is achieved and collection of the related receivable is reasonably assured, the Company recognizes revenue related to the milestone in its entirety in the period in which the milestone is achieved. In those circumstances where a milestone is not substantive, the Company recognizes as revenue, on the date the milestone is achieved, an amount equal to the applicable percentage of the performance period that had elapsed as of the date the milestone was achieved, with the balance being deferred and recognized over the remaining period of performance. As of December 30, 2017, the Company had no significant milestones that were deemed substantive. The Company records shipping charges billed to customers in total revenue and records shipping costs in cost of revenue (excluding amortization of intangible assets) for all periods presented. Advertising Costs Advertising costs are expensed as incurred. For fiscal years 2017, 2016 and 2015, advertising costs totaled $1.6 million, $1.4 million and $1.2 million, respectively. Income Taxes The provision for income taxes includes federal, state, local and foreign taxes. Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statements carrying amounts and their respective tax basis. The Company measures deferred tax assets and liabilities using the enacted tax rates in effect when the temporary differences are expected to be settled. The Company evaluates the realizability of its deferred tax assets and establishes a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized. The Company accounts for uncertain tax positions using a “more-likely-than-not” threshold for recognizing and resolving uncertain tax positions. The Company evaluates uncertain tax positions on a quarterly basis and considers various factors, including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, information obtained during in-process audit activities and changes in facts or circumstances related to a tax position. The Company also accrues for potential interest and penalties related to unrecognized tax benefits in income tax expense. Foreign Currency Contracts Foreign currency contracts are recorded at fair value in the Company’s consolidated balance sheets and are not designated as hedging instruments. Any gains or losses on such contracts are immediately recognized in other income, net. Translation of Foreign Currencies For the Company’s subsidiaries that transact in a functional currency other than the U.S. dollar, assets and liabilities are translated at current rates of exchange as of the balance sheet date. Income and expense items are translated at the average foreign exchange rates for the period. Adjustments resulting from the translation of the financial statements of the Company’s foreign operations into U.S. dollars are excluded from the determination of net income and are recorded in accumulated other comprehensive loss, a separate component of equity. Pension and Other Post-Retirement Benefit Plans The Company recognizes the funded status of its defined benefit pension and other post-retirement benefit plans as an asset or liability. This amount is defined as the difference between the fair value of plan assets and the benefit obligation. The Company measures plan assets and benefit obligations as of its fiscal year end. The key assumptions used to calculate benefit obligations and related pension costs include expected long-term rate of return on plan assets, withdrawal and mortality rates, expected rate of increase in employee compensation levels and a discount rate. Assumptions are determined based on the Company’s data and appropriate market indicators, and evaluated each year as of the plan’s measurement date. The expected long-term rate of return on plan assets reflects the average rate of earnings expected on the funds invested, or to be invested, to provide for the benefits included in the projected benefit obligations. In determining the expected long-term rate of return on plan assets, the Company considers the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes and economic and other indicators of future performance. In fiscal year 2017, new mortality improvement scales were issued in the U.S. and the United Kingdom (U.K.) reflecting a decline in longevity projection from the 2016 releases that the Company adopted, which decreased the Company’s benefit obligations by $5.2 million as of December 30, 2017. In fiscal year 2016, new mortality improvement scales were issued in the U.S. reflecting a decline in longevity projection from the 2015 releases that the Company adopted, which decreased the Company’s benefit obligations by $1.3 million as of December 31, 2016. The discount rate reflects the rate the Company would have to pay to purchase high-quality investments that would provide cash sufficient to settle its current pension obligations. The rate of compensation increase reflects the expected annual salary increases for the plan participants based on historical experience and the current employee compensation strategy. The Company is required to recognize as a component of other comprehensive income, net of tax, the actuarial gains or losses and prior service costs or credits that arise but were not previously required to be recognized as components of net periodic benefit cost. Other comprehensive income is adjusted as these amounts are later recognized in income as components of net periodic benefit cost. Earnings Per Share Basic earnings per share are calculated by dividing net income attributable to common shareholders by the weighted average number of common shares outstanding during the period. Except where the result would be anti-dilutive to income from continuing operations, diluted earnings per share is computed using the treasury stock method, assuming the exercise of stock options and the vesting of restricted stock awards, RSUs, or PSUs, as well as their related income tax effects. Newly Adopted Accounting Pronouncements In November 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-18, “Restricted Cash.” The standard addresses the classification and presentation of restricted cash and restricted cash equivalents within the statement of cash flows. The Company elected to early adopt this standard in fiscal year 2017 and applied the changes retrospectively to all prior periods presented in its consolidated statements of cash flows. The Company historically excluded restricted cash balances, recorded in current and long-term other assets, from cash and cash equivalents within the consolidated statements of cash flows, reflecting transfers between cash, cash equivalents, and restricted cash as a cash flow classified within cash flows relating to operating activities. As a result of the adoption of this standard, the Company combined restricted cash balances of $2.3 million, $2.0 million, and $2.6 million as of December 31, 2016, December 26, 2015, and December 27, 2014, respectively, with cash and cash equivalents when reconciling the beginning and ending balances within the consolidated statements of cash flows for the fiscal years ended December 31, 2016 and December 26, 2015. In August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments.” The standard addresses the classification of certain transactions within the statement of cash flows, including cash payments for debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, and distributions received from equity method investments. The Company elected to early adopt this standard in fiscal year 2017 and applied the changes retrospectively to all prior periods presented within its consolidated statements of cash flows. As a result of the adoption of this standard, the Company reclassified $6.3 million and $7.3 million, respectively, from investing activities to operating activities within the consolidated statements of cash flows that related to distributions received from equity method investments for the fiscal years ended December 31, 2016 and December 26, 2015. In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” The standard reduces complexity in several aspects of the accounting for employee share-based compensation, including the income tax consequences, classification of awards as either equity or liabilities, and classification within the statement of cash flows. The Company adopted this standard in fiscal year 2017, and applied the changes as required by each amendment to its consolidated financial statements and related disclosures. Under ASU 2016-09, the Company adopted the amendment to recognize excess tax benefits and tax deficiencies in the consolidated statements of income on a prospective basis, to present excess tax benefits within operating activities within the consolidated statements of cash flows on a retrospective basis, and elected to change its accounting policy to account for forfeitures as they occur on a modified retrospective basis. The adoption to recognize excess tax benefits and tax deficiencies within the consolidated statements of income on a prospective basis could result in fluctuations in the effective tax rate period-over-period, depending on how many awards vest and the volatility of the Company’s stock price. During fiscal year 2017, the impact to the provision for income taxes within the consolidated statements of income was an excess tax benefit of $11.0 million. Further, for fiscal year 2017, the Company excluded the effect of windfall tax benefits from the hypothetical proceeds used to calculate the repurchase of shares under the treasury stock method for the calculation of diluted earnings per share. The adoption of the amendment to present excess tax benefits within operating activities within the consolidated statements of cash flows on a retrospective basis resulted in the reclassification of a cash inflow of $10.0 million and $11.8 million, respectively, from cash provided by financing activities to cash provided by operating activities for fiscal years 2016 and 2015. The Company had previously classified cash paid for tax withholding purposes as a financing activity within the consolidated statements of cash flows; therefore, there was no change related to this requirement under the amendment. The Company’s election to change its accounting policy to account for forfeitures when they occur on a modified retrospective basis resulted in an immaterial impact on its 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 ASU 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 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. The ASU is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years, and should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost in the statements of income. Early adoption is permitted within the first interim period of the fiscal year. The adoption of this standard is not expected to have a material impact on the Company’s 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. The ASU 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 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. The ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted for certain transactions. The adoption of this standard is not expected to have a material impact on the Company’s 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. The ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. 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. In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Liabilities.” This guidance 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 ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” The standard, including subsequently issued amendments, will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either a modified retrospective or cumulative effect transition method. The standard will require 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 will be effective for annual and interim periods beginning after December 15, 2017. The Company formed an implementation team during fiscal year 2016 to oversee adoption of the new standard. The implementation team has substantially completed its assessment of the new standard, including a detailed review of the Company’s contract portfolio, revenue streams to identify potential differences in accounting as a result of the new standard, and selected the modified retrospective transition method. The Company assessed the impact on the existing revenue accounting policies, newly required financial statement disclosures, and executed on the project plan. Currently, the Company finalized contract reviews, worked through anticipated changes to systems and business processes, and internal controls to support the adoption of the new standard. The Company expects the opening balance sheet adoption impact and prospective changes in the timing of revenue recognition across all reportable segments to be insignificant with the adoption of the new standard. |
BUSINESS ACQUISITIONS AND DIVESTITURE |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS ACQUISITIONS AND DIVESTITURE | BUSINESS ACQUISITIONS AND DIVESTITURE 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 $4.1 million based on recent exchange rates), based on future performance. 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 Annual Report on Form 10-K, it is not practicable for the Company to disclose the preliminary allocation of purchase price to assets acquired and liabilities assumed. The Company incurred transaction and integration costs in connection with the acquisition of $0.5 million during fiscal year 2017, which were included in selling, general and administrative expenses. 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 $7.9 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:
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 the acquisition through December 30, 2017, 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:
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 transaction and integration costs of $2.6 million in connection with the acquisition during fiscal year 2017, which were included in selling, general and administrative expenses, within the consolidated statements of income. Pro forma financial information as well as actual revenue and operating income (loss) have not been included because Brains On-Line’s financial results are not significant when compared to the Company’s consolidated financial results. Agilux On September 28, 2016, the Company acquired Agilux Laboratories, Inc. (Agilux), a CRO that provides a suite of integrated discovery bioanalytical services for small and large molecules, drug metabolism and pharmacokinetic services, and pharmacology services. The acquisition supports the Company’s strategy to offer clients a broader, integrated portfolio that provides services continuously from the earliest stages of drug research through the non-clinical development process. The purchase price for Agilux was $64.9 million in cash and was funded by borrowings on the Company’s revolving credit facility. The business is reported as part of the Company’s DSA reportable segment. The purchase price allocation of $62.0 million, net of $2.9 million of cash acquired, was as follows:
From the date of the acquisition through September 30, 2017, 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. No further adjustments will be made to the purchase price allocation. The breakout of definite-lived intangible assets acquired was as follows:
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 Agilux and the assembled workforce of the acquired business. The goodwill attributable to Agilux is not deductible for tax purposes. The Company incurred transaction and integration costs of $0.3 million and $1.7 million, respectively, in connection with the acquisition during fiscal years 2017 and 2016, which were included in selling, general and administrative expenses, within the consolidated statements of income. Pro forma financial information as well as actual revenue and operating income (loss) have not been included because Agilux’s financial results are non-significant when compared with the Company’s consolidated financial results. Blue Stream On June 27, 2016, the Company acquired Blue Stream Laboratories, Inc. (Blue Stream), an analytical CRO supporting the development of complex biologics and biosimilars. Combining Blue Stream with the Company’s existing discovery, safety assessment, and biologics capabilities creates a leading CRO that has the ability to support biologic and biosimilar development from characterization through clinical testing and commercialization. The purchase price for Blue Stream was $11.7 million, including $3.0 million in contingent consideration, and was subject to certain customary adjustments. The acquisition was funded by borrowings on the Company’s revolving credit facility. The business is reported in the Company’s Manufacturing reportable segment. The Company estimated the fair value of this contingent consideration based on a probability-weighted set of outcomes. The contingent consideration is a one-time payment payable based on the achievement of a revenue target. The target was achieved and the Company paid the $3.0 million in contingent consideration in the third quarter of fiscal year 2017. The purchase price allocation of $11.7 million, net of a non-significant amount of cash acquired, was as follows:
From the date of the acquisition through July 1, 2017, 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. No further adjustments will be made to the purchase price allocation. The breakout of definite-lived intangible assets acquired was as follows:
The goodwill resulting from the transaction is primarily attributable to the potential growth of the Company’s Manufacturing segment from customers and technology introduced through Blue Stream, the assembled workforce of the acquired business, expected synergies, and the development of future proprietary processes. The goodwill attributable to Blue Stream is not deductible for tax purposes. The Company incurred non-significant transaction and integration costs in connection with the acquisition during fiscal year 2017, which were included in selling, general and administrative expenses, within the consolidated statements of income. The Company incurred $0.6 million of transaction and integration costs in connection with the acquisition during fiscal year 2016, which were included in selling, general and administrative expenses, within the consolidated statements of income. Pro forma financial information as well as actual revenue and operating income (loss) have not been included because Blue Stream’s financial results are non-significant when compared with the Company’s consolidated financial results. WIL Research On April 4, 2016, the Company acquired WIL Research, a provider of safety assessment and CDMO services to biopharmaceutical and agricultural and industrial chemical companies worldwide. The acquisition enhanced 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 WIL Research was $604.8 million, including assumed liabilities of $0.4 million. The purchase price included payment for actual working capital of the acquired business. The acquisition was funded by cash on hand and borrowings on the Company’s $1.65B Credit Facility. See Note 7, “Long-Term Debt and Capital Lease Obligations.” WIL Research’s safety assessment and CDMO businesses are reported in the Company’s DSA and Manufacturing reportable segments, respectively. On February 10, 2017, the Company divested the CDMO business. The purchase price allocation of $577.4 million, net of $27.4 million of cash acquired, was as follows:
From the date of the acquisition through April 1, 2017, 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. No further adjustments will be made to the purchase price allocation. The breakout of definite-lived intangible assets acquired was as follows:
The goodwill resulting from the transaction, $19.0 million of which was deductible for tax purposes due to a prior asset acquisition, was primarily attributed to the potential growth of the Company’s DSA and Manufacturing businesses from clients introduced through WIL Research, the assembled workforce of the acquired business, and expected cost synergies. Subsequent to the divestiture of the CDMO business on February 10, 2017, $14.8 million of the goodwill was deductible for tax purposes. The Company incurred transaction and integration costs in connection with the acquisition of $1.7 million, $15.5 million and $3.2 million during fiscal years 2017, 2016 and 2015, respectively, which were included in selling, general and administrative expenses within the consolidated statements of income. WIL Research revenue and operating income from April 4, 2016 through December 31, 2016 was $176.1 million and $12.5 million, respectively. Beginning on April 4, 2016, WIL Research has been included in the operating results of the Company. The following selected unaudited pro forma consolidated results of operations are presented as if the WIL Research acquisition had occurred as of the beginning of the period immediately preceding the period of acquisition after giving effect to certain adjustments. For fiscal year 2016, these adjustments included additional amortization of intangible assets and depreciation of fixed assets of $0.4 million, reversal of interest expense on borrowings of $2.6 million, elimination of intercompany activity and other one-time costs, and the tax impacts of these adjustments. For fiscal year 2015, these adjustments included additional amortization of intangible assets and depreciation of fixed assets of $13.6 million, reversal of interest expense on borrowings of $10.5 million, inclusion of acquisition-related transaction costs of $11.5 million, elimination of intercompany activity and other one-time costs, and the tax impacts of these adjustments.
These unaudited pro forma results of operations have been prepared for comparative purposes only, and they do not purport to be indicative of the results of operations that actually would have resulted had the acquisition occurred on the date indicated or that may result in the future. No effect has been given for synergies, if any, that may have been realized through the acquisition. Contract Manufacturing On February 10, 2017, the Company completed the divestiture of 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. Following a strategic review that was finalized subsequent to December 31, 2016, 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 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):
Oncotest On November 18, 2015, the Company acquired Oncotest GmbH (Oncotest), a German CRO providing discovery services for oncology, one of the largest therapeutic areas for biopharmaceutical research and development spending. With this acquisition, the Company has expanded its oncology services capabilities, enabling it to provide clients with access to a more comprehensive portfolio of technologies, including patient-derived xenograft (PDX) and syngeneic models. The purchase price for Oncotest was $36.0 million, including $0.3 million in contingent consideration. The acquisition was funded by borrowings on the Company's revolving credit facility. The business is reported in the Company’s DSA reportable segment. The contingent consideration earn-out period ended in the fourth quarter of 2016. As a result, the related contingent consideration liability was reversed and a gain of $0.3 million was recorded in selling, general and administrative expenses, as no payments were made. The contingent consideration was a one-time payment that could have become payable based on the achievement of a revenue target for fiscal year 2016. If achieved, the payment would have become due in the first quarter of fiscal year 2017. The aggregate, undiscounted amount of contingent consideration that the Company could have paid was €2.0 million ($2.1 million as of December 31, 2016). The Company estimated the fair value of this contingent consideration based on a probability-weighted set of outcomes. The purchase price allocation of $35.4 million, net of $0.6 million of cash acquired, was as follows:
The breakout of definite-lived intangible assets acquired was as follows:
The goodwill resulting from the transaction is primarily attributed to the potential growth in the Company's DSA businesses from customers and technology introduced through Oncotest, the assembled workforce of the acquired business and expected cost synergies. The goodwill attributable to Oncotest is not deductible for tax purposes. The Company incurred non-significant transaction and integration costs in connection with the acquisition during fiscal years 2017 and 2016 and costs of $2.1 million during fiscal year 2015, which were included in selling, general and administrative expenses, within the consolidated statements of income. Pro forma financial information as well as actual revenue and operating income (loss) have not been included because Oncotest’s financial results are non-significant when compared with the Company’s consolidated financial results. Celsis On July 24, 2015, the Company acquired Celsis Group Limited (Celsis), a leading provider of rapid testing systems for non-sterile bacterial contamination for the biopharmaceutical and consumer products industries. The purpose of this acquisition was to enhance the Company’s portfolio of rapid microbial detection products and services with the addition of a rapid bioburden testing product. The purchase price for Celsis was $214.5 million, including assumed debt and certain liabilities of $10.3 million. The acquisition was funded by cash on hand and borrowings on the Company’s revolving credit facility. The business is reported in the Company’s Manufacturing reportable segment. The purchase price allocation of $212.2 million, net of $2.3 million of cash acquired, was as follows:
The breakout of definite-lived intangible assets acquired was as follows:
The goodwill resulting from the transaction is primarily attributed to the potential growth of the Company’s Manufacturing business from clients introduced through Celsis, the assembled workforce of the acquired business and expected cost synergies. The goodwill attributable to Celsis is not deductible for tax purposes. The Company incurred non-significant transaction and integration costs in connection with the acquisition during fiscal year 2017 and costs of $1.0 million and $8.8 million during fiscal years 2016 and 2015, which were included in selling, general and administrative expenses, within the consolidated statements of income. Celsis revenue and operating loss from July 24, 2015 through December 26, 2015 was $11.1 million and $6.1 million, respectively. Beginning on July 24, 2015, Celsis has been included in the operating results of the Company. The following selected unaudited pro forma consolidated results of operations are presented as if the Celsis acquisition had occurred as of the beginning of the period immediately preceding the period of acquisition after giving effect to certain nonrecurring costs and other adjustments, resulting in a reversal of $0.6 million for fiscal year 2015, related to depreciation and amortization of property, plant and equipment, inventory fair value adjustments and intangible assets.
These unaudited pro forma results of operations have been prepared for comparative purposes only, and they do not purport to be indicative of the results of operations that actually would have resulted had the acquisition occurred on the date indicated or that may result in the future. No effect has been given for synergies, if any, that may have been realized through the acquisition. Sunrise On May 5, 2015, the Company acquired Sunrise Farms, Inc. (Sunrise), a producer of specific-pathogen-free fertile chicken eggs and chickens used in the manufacture of live viruses. The purpose of this business acquisition was to expand the capabilities of the Company’s existing Avian Vaccine Services business. The purchase price of the acquisition was $9.6 million and was funded by cash on hand and borrowings on the Company’s revolving credit facility. The business is reported in the Company’s Manufacturing reportable segment. The Company recorded a bargain purchase gain of $9.8 million, which represents the excess of the estimated fair value of the net assets acquired over the purchase price. The bargain purchase gain was recorded in other income, net in the Company’s consolidated statement of income and was not recognized for tax purposes. The Company believes there were several factors that contributed to this transaction resulting in a bargain purchase gain, including the highly specialized nature of Sunrise’s business falling outside of the seller’s core activities and a limited pool of potential buyers. Before recognizing the gain from the bargain purchase, the Company reassessed its initial identification and valuation of assets acquired and liabilities assumed to validate that all assets and liabilities that the Company was able to identify at the acquisition date were properly recognized. The purchase price allocation of $9.6 million, net of less than $0.1 million of cash acquired, was as follows:
The identifiable definite-lived intangible assets acquired represent the client relationships intangible, which is being amortized over the weighted average estimated useful life of approximately 15 years. The Company incurred non-significant transaction and integration costs in connection with the acquisition during fiscal years 2017 and 2016 and costs of $1.5 million during fiscal year 2015, which were included in selling, general and administrative expenses, within the consolidated statements of income. Pro forma financial information as well as actual revenue and operating income (loss) have not been included because Sunrise’s financial results are non-significant when compared with the Company’s consolidated financial results. |
SUPPLEMENTAL BALANCE SHEET INFORMATOIN |
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Supplemental Balance Sheet Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL BALANCE SHEET INFORMATION | SUPPLEMENTAL BALANCE SHEET INFORMATION The composition of trade receivables, net is as follows:
The following amounts were recorded to the allowance for doubtful accounts in fiscal years 2017, 2016, and 2015; net provisions of $0.9 million; net recoveries of $0.5 million; and net provisions of $1.8 million, respectively. The composition of inventories is as follows:
The composition of other current assets is as follows:
The composition of property, plant and equipment, net is as follows:
(1) These balances include assets under capital lease. See Note 7, “Long-Term Debt and Capital Lease Obligations.” Depreciation expense in fiscal years 2017, 2016 and 2015 was $89.8 million, $85.0 million and $70.7 million, respectively. The composition of other assets is as follows:
The composition of other current liabilities is as follows:
The composition of other long-term liabilities is as follows:
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VENTURE CAPITAL INVESTMENTS AND MARKETABLE SECURITIES |
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Marketable Securities and Equity-Method Affiliates [Abstract] | |
VENTURE CAPITAL INVESTMENTS AND MARKETABLE SECURITIES | VENTURE CAPITAL INVESTMENTS AND MARKETABLE SECURITIES Venture Capital Investments During fiscal years 2017, 2016, and 2015, the Company recognized gains related to the venture capital investments of $22.9 million, $10.3 million and $3.8 million, respectively. The Company’s total commitment to these venture capital funds as of December 30, 2017 was $88.2 million, of which the Company funded $51.2 million through that date. During fiscal years 2017, 2016, and 2015, the Company received dividends totaling $10.1 million, $7.1 million, and $7.3 million, respectively. As of December 30, 2017 and December 31, 2016, the Company’s consolidated retained earnings included $12.1 million and $4.4 million, respectively, of the undistributed earnings related to these entities. Marketable Securities The Company held no marketable securities as of December 30, 2017 and December 31, 2016. During fiscal year 2016, the Company realized non-significant losses and received proceeds of $4.6 million from the sale of its available-for-sale securities. |
FAIR VALUE |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE | FAIR VALUE Assets and liabilities measured at fair value on a recurring basis are summarized below:
During fiscal years 2017 and 2016, there were no transfers between fair value levels. Contingent Consideration The following table provides a rollforward of the contingent consideration related to previous business acquisitions. See Note 2, “Business Acquisitions and Divestiture”.
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 |
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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:
During the second quarter of 2016, the Company revised the composition of its reportable segments to align with the view of the business following its acquisition of WIL Research. As a result, goodwill was allocated from the Company's RMS reportable segment to its Manufacturing reportable segment, as shown in the preceding table within "transfers." The allocation was based on the fair value of each business group within its original reporting unit relative to the fair value of that reporting unit. In addition, the Company completed an assessment of any potential goodwill impairment for all reporting units immediately prior to the reallocation and determined that no impairment existed. Based on the Company’s step one goodwill impairment test, which was performed in the fourth quarter for each of the fiscal years 2017, 2016 and 2015, the fair value of each reporting unit exceeded the reporting unit’s book value and, therefore, goodwill was not impaired. Intangible Assets, Net The following table displays intangible assets, net by major class:
During fiscal year 2017, the Company divested the CDMO business, which resulted in a net decrease of $16.8 million and $0.3 million to client relationships and backlog, respectively. During fiscal year 2016, the Company determined that the carrying values of certain DSA intangible assets were not recoverable and recorded an impairment charge of $1.9 million, which was included in costs of services provided (excluding amortization of intangible assets), within the consolidated statements of income. Amortization expense of definite-lived intangible assets, including client relationships, for fiscal years 2017, 2016 and 2015 was $41.4 million, $41.7 million and $24.2 million, respectively. As of December 30, 2017, estimated amortization expense for intangible assets for each of the next five fiscal years is expected to be as follows:
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LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS |
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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:
As of December 30, 2017 and December 31, 2016, the weighted average interest rate on the Company’s debt was 2.45% and 1.89%, respectively. On March 30, 2016, the Company amended and restated its $1.3B credit facility creating a $1.65 billion credit facility ($1.65B Credit Facility) which (1) extends the maturity date for the credit facility and (2) makes certain other amendments in connection with the Company’s acquisition of WIL Research. The amendment was accounted for as a debt modification with a partial extinguishment of debt. In connection with the transaction, the Company capitalized approximately $3.3 million and expensed approximately $1.0 million of debt issuance costs. The $1.65B Credit Facility provides for a $650.0 million term loan and a $1.0 billion multi-currency revolving facility. The term loan facility matures in 19 quarterly installments with the last installment due March 30, 2021. The revolving facility matures on March 30, 2021, 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 $500.0 million in the aggregate. The interest rates applicable to the term loan and revolving facility under the $1.65B 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 $1.65B 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 3.50 to 1.0. As of December 30, 2017, the Company was compliant with all covenants. The obligations of the Company under the $1.65B Credit Facility are collateralized by substantially all of the assets of the Company. Principal maturities of existing debt for the periods set forth in the table below, are as follows:
Excluded from the table above is $18.2 million of Other Debt associated with construction in progress related to build-to-suit operating leases. The minimum rental commitments under these non-cancellable leases are included in Note 13, “Commitments and Contingencies.” Letters of Credit As of both December 30, 2017 and December 31, 2016, the Company had $4.9 million in outstanding letters of credit. Capital Lease Obligations The Company’s capital lease obligations amounted to $30.3 million and $29.9 million as of December 30, 2017 and December 31, 2016, respectively. As of December 30, 2017, the minimum lease payments under capital leases for each of the next five years and total thereafter were as follows:
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EQUITY AND NONCONTROLLING INTERESTS |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY AND NONCONTROLLING INTERESTS | EQUITY AND NONCONTROLLING INTERESTS Earnings Per Share The following table reconciles the numerator and denominator in the computations of basic and diluted earnings per share:
Options to purchase 0.6 million shares, 0.8 million shares, and 0.5 million shares for fiscal years 2017, 2016 and 2015, respectively, as well as a non-significant number of restricted shares, 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 each of the fiscal years 2017, 2016 and 2015 excluded the impact of 1.1 million shares of non-vested restricted stock and RSUs. Treasury Shares In July 2010, the Company’s Board of Directors authorized a $500.0 million stock repurchase program, and subsequently approved increases to the stock repurchase program of $250.0 million in 2010, $250.0 million in 2013, $150.0 million in 2014, and $150.0 million in 2017, for an aggregate authorization of $1.3 billion. Under its authorized stock repurchase program, the Company repurchased 1.0 million shares totaling $90.6 million and 1.5 million shares totaling $108.8 million in fiscal years 2017 and 2015, respectively, and did not repurchase any shares in fiscal year 2016. As of December 30, 2017, the Company had $129.1 million remaining on the authorized stock repurchase program. In addition, 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. The Company acquired 0.2 million shares for $16.3 million, 0.2 million shares for $12.3 million, and 0.1 million shares for $8.7 million in fiscal years 2017, 2016 and 2015, 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:
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 during 2017 was immaterial. In 2016 and 2015, the activity within the nonredeemable noncontrolling interest was a decrease of $2.1 million and an increase of $0.8 million, respectively. Redeemable Noncontrolling Interest In January 2013, the Company acquired a 75% ownership interest in Vital River, a commercial provider of research models and related services in China, for $24.2 million, net of $2.7 million of cash acquired. Concurrent with the acquisition, the Company entered into an agreement with the noncontrolling interest holders that provided the Company with the right to purchase, and the noncontrolling interest holders with the right to sell, the remaining 25% of the entity for cash at its fair value beginning in January 2016. The following table provides a rollforward of the fair value of the Company’s redeemable noncontrolling interest for fiscal year 2016:
On July 7, 2016, the Company purchased an additional 12% equity interest in Vital River for $10.8 million, resulting in total ownership of 87%. The Company recorded a $1.6 million gain in equity equal to the excess fair value of the 12% equity interest over the purchase price. Concurrent with the transaction, the original agreement was amended providing the Company with the right to purchase, and the noncontrolling interest holders with 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 Company recorded a charge of $1.5 million in other income, net, equal to the excess fair value of the hybrid instrument (equity interest with an embedded derivative) over the fair value of the 13% equity interest. 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 ($15.8 million as of December 30, 2017) 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 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 subsequent to the acquisition of the additional 12% equity interest on July 7, 2016:
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INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES The components of income from continuing operations before income taxes and the related provision for income taxes are presented below:
U. S. Tax Reform U.S. Tax Reform, which was signed into law on December 22, 2017, has resulted in significant changes including, but not limited to, (i) reducing the U.S. federal statutory tax rate from 35% to 21%; (ii) transitioning to a modified territorial system through a one-time transition tax on previously unrepatriated foreign earnings; (iii) subjecting certain foreign earnings to U.S. taxation through base erosion anti-abuse tax (BEAT) and global intangible low-taxed income (GILTI); (iv) creating a new limitation on deductible interest expense; and (v) modifying the officer’s compensation limitation. The Company’s accounting for the elements of U.S. Tax Reform is incomplete. However, the Securities Exchange Commission has issued rules that allow 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 made reasonable estimates of the effects to the consolidated statements of income and consolidated balance sheets and have, therefore, recorded provisional amounts. Provisional amounts recorded as of December 30, 2017 are subject to refinement due to various factors including, but not limited to changes in interpretations, analysis and assumptions made by the Company, additional guidance that may be issued by the U.S. Department of the Treasury and the Internal Revenue Service, and any updates or changes to estimates the Company has utilized to calculate the transition impact. The Company currently anticipates finalizing and recording any resulting adjustments by the end of its fiscal year ending December 29, 2018. Transition Tax The Transition Tax is imposed on previously untaxed accumulated and current earnings and profits of certain of the Company’s foreign subsidiaries. The Company has recorded a provisional Transition Tax obligation of $73.5 million. However, the Company is continuing to gather additional information to more precisely compute the amount of the Transition Tax. Deferred Tax and Other Effects U.S. Tax Reform reduces the U.S. federal statutory tax rate to 21%, effective December 31, 2017. The Company has recorded a provisional decrease to its net deferred tax liability in the U.S of $13.2 million, with a corresponding net adjustment to deferred income tax benefit for the year ended December 30, 2017. The Company is continuing to assess the impacts of GILTI and has not yet made an accounting policy election with regard to providing deferred taxes for future GILTI tax expense, or accounting for GILTI as a current period cost. Prior to the fourth quarter of fiscal 2017, the Company asserted that the unremitted earnings of its foreign subsidiaries were deemed indefinitely reinvested as they were required to fund needs outside of the U.S. As a result of the Transition Tax and other effects of U.S. Tax Reform enacted during the fourth quarter of fiscal 2017, the Company has withdrawn its indefinite reinvestment assertion for all of its unremitted foreign earnings and has provisionally provided deferred taxes of $18.2 million for future withholding and state income taxes which would be incurred upon the repatriation of the balance of unremitted foreign earnings as of December 30, 2017. In light of the reduced incremental tax cost of repatriating unremitted foreign earnings, as well as other effects of U.S. Tax Reform, the Company has determined it can no longer overcome the presumption that all undistributed foreign earnings will ultimately be transferred to the U.S. parent entity. The components of deferred tax assets and liabilities are as follows:
Reconciliations of the statutory U.S. federal income tax rate to effective tax rates are as follows:
In the above reconciliation, stock-based compensation reflects $11.0 million of excess tax benefits from current year tax deductions for stock-based compensation that has been recorded as a component of income tax expense pursuant to the adoption of ASU 2016-09. In prior years, these excess tax benefits were recorded to additional paid-in capital within the consolidated balance sheets. Enacted tax rate changes reflects a tax benefit of $12.7 million relating primarily to U.S. Tax Reform as well as statutory rate changes in France and the U.K. U.S. Transition Tax reflects an estimated $73.5 million of U.S. federal and state taxes as part of the deemed repatriation of unremitted earnings under U.S. Tax Reform. Tax on unremitted earnings reflects an estimated $21.6 million, which includes both the $18.2 million of withholding tax and state taxes accrued as result of the change in the Company’s assertion regarding the indefinite reinvestment of unremitted foreign earnings; and $3.4 million of withholding taxes as a result of the Company’s previous change in assertion related to Canada and China. The Impact of acquisitions and restructuring reflects $11.4 million primarily related to the sale of the CDMO business. As of December 30, 2017, the Company had foreign net operating loss and tax credit carryforwards of $33.2 million, as compared to $58.5 million as of December 31, 2016. Of this amount, $5.9 million will expire beginning after 2017, $16.4 million will begin to expire in 2029 and beyond, and the remainder of $10.9 million can be carried forward indefinitely. In accordance with Canadian federal tax law, the Company claims Scientific Research and Experimental Development (SR&ED) credits on qualified research and development costs incurred in its Safety Assessment facility in Montreal, and currently maintains $16.4 million in credit carryforwards, which will begin to expire in 2033. Additionally, the Company records a benefit to operating income for research and development credits in both Quebec and the U.K. related to its Safety Assessment and Early Discovery facilities. The Company has fully recognized its deferred tax assets on the belief that it is more likely than not that they will be realized. The only exceptions relate to deferred tax assets primarily for net operating losses in France, Hong Kong, Luxembourg, the Netherlands and Germany, capital losses in the U.S., and fixed assets in the U.K. The valuation allowance increased by $0.5 million from $10.1 million as of December 31, 2016 to $10.6 million as of December 30, 2017. A reconciliation of the Company’s beginning and ending unrecognized income tax benefits is as follows:
The $0.5 million increase in unrecognized income tax benefits during fiscal year 2017 is primarily attributable to an additional year of Canadian SR&ED credit, offset by the settlement of competent authority proceedings, and unfavorable foreign exchange movement. The amount of unrecognized income tax benefits that, if recognized, would favorably impact the effective tax rate was $22.7 million as of December 30, 2017 and $21.4 million as of December 31, 2016. The $1.3 million increase is primarily attributable to an additional year of Canadian SR&ED credit and unfavorable foreign exchange movement. It is reasonably possible as of December 30, 2017 that the liability for unrecognized tax benefits for the uncertain tax position will decrease by $1.0 million over the next twelve month period, primarily as a result of the outcome of a pending tax ruling. The Company continues to recognize interest and penalties related to unrecognized income tax benefits in income tax expense. The total amount of accrued interest related to unrecognized income tax benefits as of December 30, 2017 and December 31, 2016 was $2.5 million and $1.7 million, respectively. The total amount of accrued penalties related to unrecognized income tax benefits as of December 30, 2017 and December 31, 2016 was $0.3 million and $0.2 million, respectively. The Company conducts business in a number of tax jurisdictions. As a result, it is subject to tax audits on a regular basis including, but not limited to, such major jurisdictions as the U.S., the U.K., China, Japan, France, Germany, and Canada. With few exceptions, the Company is no longer subject to U.S. and international income tax examinations for years before 2014. The Company and certain of its subsidiaries have ongoing tax controversies in the U.S., Canada, Germany, and France. The Company does not anticipate resolution of these audits will have a material impact on its financial statements. |
EMPLOYEE BENEFIT PLANS |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Pension Plans The Charles River Laboratories, Inc. Pension Plan (CRL Pension Plan) is a qualified, non-contributory defined benefit plan covering certain U.S. employees. Effective 2002, the plan was amended to exclude new participants from joining and in 2008 the accrual of benefits was frozen. The Charles River Pension Plan is a defined contribution and defined benefit pension plan covering certain U.K. employees. Benefits are based on participants’ final pensionable salary and years of service. Participants’ rights vest immediately. Effective December 31, 2002, the plan was amended to exclude new participants from joining the defined benefit section of the plan and a defined contribution section was established for new entrants. Contributions under the defined contribution plan are determined as a percentage of gross salary. In the fourth quarter of 2015, the Charles River Pension Plan was amended such that the members of the defined benefit section of the plan ceased to accrue additional benefits; however, their benefits continue to be adjusted for changes in their final pensionable salary or a specified inflation index, as applicable. In addition, the Company has several defined benefit plans in certain other countries in which it maintains an operating presence, including Canada, France, Germany, Japan and the Netherlands. Charles River Laboratories Deferred Compensation Plan and Executive Supplemental Life Insurance Retirement Plan The Company maintains a non-qualified deferred compensation plan, known as the Charles River Laboratories Deferred Compensation Plan (DCP), which allows a select group of eligible employees to defer a portion of their compensation. At the present time, no contributions are credited to the DCP, except as set forth below. Participants must specify the distribution date for deferred amounts at the time of deferral, in accordance with applicable IRS regulations. Generally, amounts may be paid in lump sum or installments upon retirement or termination of employment, or later if the employee terminates employment after age 55 and before age 65. Amounts may also be distributed during employment, subject to a minimum deferral requirement of three years. The Company provides certain active employees an annual contribution into their DCP account of 10% of the employee’s base salary plus the lesser of their target annual bonus or actual annual bonus. In addition to the DCP, certain officers and key employees also participate, or in the past participated, in the Company’s Executive Supplemental Life Insurance Retirement Plan (ESLIRP), which is a non-funded, non-qualified arrangement. Annual benefits under this plan will equal a percentage of the highest five consecutive years of compensation, offset by amounts payable under the CRL Pension Plan and Social Security. In connection with the establishment of the DCP, certain active ESLIRP participants, who agreed to convert their accrued ESLIRP benefit to a comparable deferred compensation benefit, discontinued their direct participation in the ESLIRP. Instead, the present values of the accrued benefits of ESLIRP participants were credited to their DCP accounts, and future accruals are converted to present values and credited to their DCP accounts annually. The costs associated with these plans, including the ESLIRP, for fiscal years 2017, 2016 and 2015 totaled $2.3 million, $2.2 million and $2.6 million, respectively. The Company has invested in several corporate-owned key-person life insurance policies with the intention of using these investments to fund the ESLIRP and the DCP. Participants have no interest in any such investments. As of December 30, 2017 and December 31, 2016, the cash surrender value of these life insurance policies were $34.0 million and $29.5 million, respectively. The following table provides a reconciliation of benefit obligations and plan assets of the Company’s pension, DCP and ESLIRP plans:
Amounts recognized in accumulated other comprehensive loss related to the Company’s pension, DCP and ESLIRP plans are as follows:
The accumulated benefit obligation and fair value of plan assets for the Company’s pension, DCP and ESLIRP plans with accumulated benefit obligations in excess of plan assets are as follows:
The projected benefit obligation and fair value of plan assets for the Company’s pension, DCP and ESLIRP plans with projected benefit obligations in excess of plan assets are as follows:
The amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year are as follows:
Components of net periodic benefit cost for the Company’s pension, DCP and ESLIRP plans are as follows:
Assumptions Weighted-average assumptions used to determine projected benefit obligations are as follows:
Weighted-average assumptions used to determine net periodic benefit cost are as follows:
A 0.5% decrease in the expected rate of return would increase annual pension expense by $1.5 million. Plan Assets The Company invests its pension assets with the objective of achieving a total long-term rate of return sufficient to fund future pension obligations and to minimize future pension contributions. The Company is willing to tolerate a commensurate level of risk to achieve this objective. The Company controls its risk by maintaining a diversified portfolio of asset classes. Plan assets did not include any of the Company’s common stock as of December 30, 2017 or December 31, 2016. The weighted-average target asset allocations are approximately 45.0% to equity securities, approximately 17.9% to fixed income securities and approximately 37.1% to other securities. The fair value of the Company’s pension plan assets by asset category are as follows:
The activity within the Level 3 pension plan assets was non-significant during the periods presented. During fiscal year 2017, the Company contributed $4.1 million to the pension plans and expects to contribute approximately $7.6 million to its pension plans in fiscal year 2018. Expected benefit payments are estimated using the same assumptions used in determining the Company’s benefit obligation as of December 30, 2017. Benefit payments will depend on future employment and compensation levels, among other factors, and changes in any of these factors could significantly affect these estimated future benefit payments. Estimated future benefit payments during the next five years and in the aggregate for fiscal years thereafter, are as follows:
Post-Retirement Health and Life Insurance Plans The Company’s Canadian location offers post-retirement life insurance benefits to its employees and post-retirement medical and dental insurance coverage to certain executives. The plan is non-contributory and unfunded. As of December 30, 2017 and December 31, 2016, the accumulated benefit obligation related to the plan was $1.4 million and $1.2 million, respectively. The amounts included in other accumulated comprehensive income as well as expenses related to the plan were non-significant for fiscal years 2017, 2016 and 2015. Charles River Laboratories Employee Savings Plan The Charles River Laboratories Employee Savings Plan is a defined contribution plan in the form of a qualified 401(k) plan in which substantially all U.S. employees are eligible to participate upon employment. The plan contains a provision whereby the Company matches a percentage of employee contributions. During fiscal years 2017, 2016 and 2015, the costs associated with this defined contribution plan totaled $11.6 million, $6.2 million and $5.3 million, respectively. |
STOCK-BASED COMPENSATION |
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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. During fiscal years 2017, 2016 and 2015, the primary share-based awards and their general terms and conditions are as follows:
In May 2007, the Company’s shareholders approved the 2007 Incentive Plan, which was amended in 2009, 2011, 2013 and 2015 (2007 Plan). The 2007 Plan provided no further awards to be granted under preexisting stock option and incentive plans; provided, however, that any shares that have been forfeited or canceled in accordance with the terms of the applicable award under a preexisting plan may be subsequently awarded in accordance with the terms of the preexisting plan. The 2007 Plan allows a maximum of 18.7 million shares to be awarded, of which restricted stock grants, RSUs, and performance based stock awards count as 2.3 shares and stock options count as 1.0 share. Any stock options and other share-based awards that were granted under prior plans and were outstanding in May 2007 continue in accordance with the terms of the respective plans. In May 2016, the Company’s shareholders approved the 2016 Incentive Plan (2016 Plan). The 2016 Plan provided no further awards to be granted under preexisting stock option and incentive plans; provided, however, that any shares that have been forfeited or canceled in accordance with the terms of the applicable award under a preexisting plan may be subsequently awarded in accordance with the terms of the preexisting plan. The 2016 Plan allows a maximum of 6.1 million shares to be awarded, of which restricted stock grants, RSUs, and performance based stock awards count as 2.3 shares and stock options count as 1.0 share. Any stock options and other share-based awards that were granted under prior plans and were outstanding in May 2016 continue in accordance with the terms of the respective plans. As of December 30, 2017, approximately 4.4 million shares were authorized for future grants under the Company’s share-based compensation plans. The Company settles employee share-based compensation awards with newly issued shares. The following table provides the financial statement line items in which stock-based compensation is reflected:
During fiscal year 2015, the Company modified certain stock-based awards granted in previous years as part of executive retirement transitions. For the stock-based awards granted to employees during and subsequent to fiscal year 2015, the Company introduced a new retirement provision, which allows for continued vesting of such awards after the employee’s retirement if certain eligibility conditions are met. The introduction of the new retirement provision and stock-based award modifications increased the Company’s stock-based compensation expense for 2015 by $4.5 million. The Company capitalized no stock-based compensation related costs for fiscal years 2017, 2016 and 2015. Stock Options The following table summarizes stock option activity under the Company’s stock-based compensation plans:
The fair value of stock options granted was estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions:
The weighted-average grant date fair value of stock options granted was $18.33, $15.12 and $17.24 for fiscal years 2017, 2016 and 2015, respectively. As of December 30, 2017, the unrecognized compensation cost related to unvested stock options expected to vest was $12.7 million. This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 2.3 years. The total intrinsic value of options exercised during fiscal years 2017, 2016 and 2015 was $30.0 million, $23.0 million and $28.3 million, respectively, with intrinsic value defined as the difference between the market price on the date of exercise and the exercise price. Restricted Stock and Restricted Stock Units The following table summarizes the restricted stock and restricted stock units activity for fiscal year 2017:
As of December 30, 2017, the unrecognized compensation cost related to shares of unvested restricted stock and RSUs expected to vest was $24.2 million, which is expected to be recognized over an estimated weighted-average amortization period of 2.3 years. The total fair value of restricted stock and RSU grants that vested during fiscal years 2017, 2016 and 2015 was $13.6 million, $14.6 million and $15.7 million, respectively. Performance Based Stock Award Program The Company issues PSUs to certain corporate officers. The number of shares of common stock issued for each PSU is adjusted based on a performance condition linked to the Company’s financial performance. Certain awards are further adjusted based on a market condition, which is calculated based on the Company’s stock performance relative to a peer group over the three-year vesting period. The fair value of the market condition is reflected in the fair value of the award at grant date. The Company utilizes a Monte Carlo simulation valuation model to value these awards. Information pertaining to the Company’s PSUs and the related estimated weighted-average assumptions used to calculate their fair value were as follows:
The maximum amount of common shares to be issued upon vesting of PSUs is approximately 0.3 million. For fiscal years 2017, 2016 and 2015, the Company recognized stock-based compensation related to PSUs of $18.9 million, $19.7 million and $14.7 million, respectively. The total fair value of PSUs that vested during fiscal years 2017, 2016 and 2015 was $14.4 million, $18.0 million and $6.6 million, respectively. In fiscal year 2017 and 2016, the Company also issued approximately 15,000 and 18,000 PSUs using a weighted-average grant date fair value per share of $88.05 and $73.70, respectively. These PSUs vest upon the achievement of financial targets and other performance measures. |
FOREIGN CURRENCY CONTRACTS |
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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 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 December 30, 2017 and December 31, 2016. The following table summarizes gains recognized on foreign exchange forward contracts related to intercompany loans denominated in Euros on the Company’s consolidated statements of income:
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COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating Leases The Company rents laboratory and office space, land, vehicles and certain equipment under non-cancellable operating leases. These lease agreements contain various clauses for renewal at the Company’s option and, in certain cases, rent escalation clauses. Rental expense under these leases amounted to $26.3 million, $21.8 million and $23.4 million in fiscal years 2017, 2016 and 2015, respectively. In addition to rent, the leases may require the Company to pay additional amounts for taxes, insurance, maintenance and other operating expenses. As of December 30, 2017, minimum rental commitments under non-cancellable leases, net of income from subleases, for each of the next five years and total thereafter were as follows:
Insurance The Company maintains certain insurance policies that maintain large deductibles up to approximately $5.0 million, some with or without stop-loss limits, depending on market availability. Insurance policies at certain locations are based on a percentage of the insured assets, for which deductibles for certain property may exceed $5.0 million in the event of a catastrophic event. 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. Guarantees The Company enters into certain agreements with other parties in the ordinary course of business that contain indemnification provisions. These typically include agreements with directors and officers, business partners, contractors, landlords, and customers. Under these provisions, the Company generally indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company’s activities. These indemnification provisions generally survive termination of the underlying agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited. However, to date the Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the estimated fair value of these obligations is minimal. Purchase Obligations The Company enters into unconditional purchase obligations, in the ordinary course of business, that include agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Purchase obligations exclude agreements that are cancellable at any time without penalty. The aggregate amount of the Company’s unconditional purchase obligations totaled $90.3 million as of December 30, 2017. |
RESTRUCTURING AND ASSET IMPAIRMENTS |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING AND ASSET IMPAIRMENTS | 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 close its RMS production facility in Maryland 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 and accelerated depreciation (referred to as restructuring costs) related to this initiative by classification within the consolidated statements of income for the year ended December 30, 2017.
Total restructuring costs related to this initiative in 2017 and 2018 are expected to be between $24.5 million and $26.0 million, of which $18.0 million to $18.5 million relate to estimated asset impairments and accelerated depreciation, and $6.5 million to $7.5 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 majority of the costs are non-cash and were incurred in the fourth quarter of 2017. The cash portion of the 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 at various locations across all reportable segments 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 by classification within the consolidated statements of income for the years ended 2017, 2016, and 2015.
The following table presents restructuring costs by reportable segment for these productivity improvement initiatives:
The following table provides a rollforward for all of the Company’s severance and transition costs, and lease obligation liabilities related to restructuring activities:
As of December 30, 2017 and December 31, 2016, $3.0 million and $4.1 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 consolidated balance sheets and $3.9 million and $4.0 million, respectively, were included in other long-term liabilities within the Company's consolidated balance sheets. |
SEGMENT AND GEOGRAPHIC INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT AND GEOGRAPHIC INFORMATION | SEGMENT AND GEOGRAPHIC INFORMATION The Company revised its reportable segments during fiscal year 2016 to align with its view of the business following its acquisition of WIL Research. For a description of the Company’s three reportable segments, see Note 1, “Description of Business and Summary of Significant Accounting Policies.” Asset information on a reportable segment basis is not disclosed as this information is not separately identified and internally reported to the Company’s Chief Operating Decision Maker. The following table presents revenue and other financial information by reportable segment:
For fiscal years ended 2017, 2016 and 2015, reconciliations of segment operating income and capital expenditures to the respective consolidated amounts are as follows:
Revenue for each significant product or service offering is as follows:
A summary of unallocated corporate expense consists of the following:
Other general unallocated corporate expense consists of various departmental costs including those associated with departments such as senior executives, corporate accounting, legal, tax, human resources, treasury, and investor relations. Revenue and long-lived assets by geographic area are as follows:
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 Israel and Brazil. Revenues represent sales originating in entities physically located in the identified geographic area. Long-lived assets include property, plant, and equipment and other long-lived assets. |
SELECTED QUARTERLY FINANCIAL DATA (unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SELECTED QUARTERLY FINANCIAL DATA (unaudited) | SELECTED QUARTERLY FINANCIAL DATA (unaudited) The following table contains quarterly financial information for fiscal years 2017 and 2016. The operating results for any quarter are not necessarily indicative of future period results.
Full-year amounts may not sum due to rounding. |
SUBSEQUENT EVENT |
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Dec. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENT MPI Research On February 12, 2018, the Company entered into a definitive agreement to acquire MPI Research, a non-clinical CRO providing comprehensive testing services to biopharmaceutical and medical device companies worldwide. Acquiring MPI Research will enhance 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 transaction is expected to close early in the second quarter of 2018, subject to regulatory approvals and customary closing conditions. The preliminary purchase price will be approximately $800 million in cash, subject to customary closing adjustments. The acquisition and associated fees are expected to be financed through an expansion of the Company’s credit facility and cash. The Company entered into a commitment letter, pursuant to which the Company will be provided up to $830 million under a bridge loan facility. The Company is evaluating fixed-rate debt financing alternatives which could be used to finance the acquisition and for general corporate purposes. In the event the agreement is terminated under specified circumstances, the Company may be required to pay a termination fee of $48 million, increasing to $56 million based on other specific circumstances. This business is expected to be reported as part of the Company’s DSA reportable segment. |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Principles of Consolidation | Principles of Consolidation The Company’s consolidated financial statements reflect its financial statements and those of its subsidiaries in which the Company holds a controlling financial interest. For consolidated entities in which the Company owns or is exposed to less than 100% of the economics, the Company records net income (loss) attributable to noncontrolling interests in its consolidated statements of income equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. Intercompany balances and transactions are eliminated in consolidation. The Company’s fiscal year is typically based on 52-weeks, with each quarter composed of 13 weeks ending on the last Saturday on, or closest to, March 31, June 30, September 30, and December 31. A 53rd week was included in the fourth quarter of fiscal year 2016, which is occasionally necessary to align with a December 31 calendar year-end. |
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Reclassifications | Reclassifications Certain reclassifications have been made in the consolidated statements of cash flows for prior periods to conform to the current year presentation. See “Newly Adopted Accounting Pronouncements” below for further discussion. |
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Segment Reporting | Segment Reporting The Company reports its results in three reportable segments: Research Models and Services (RMS), Discovery and Safety Assessment (DSA), and Manufacturing Support (Manufacturing). The Company’s RMS reportable segment includes the Research Models and Research Model Services businesses. Research Models includes the commercial production and sale of small research models, as well as the supply of large research models. Research Model Services includes: Genetically Engineered Models and Services (GEMS), which performs contract breeding and other services associated with genetically engineered research models; Research Animal Diagnostic Services (RADS), which provides health monitoring and diagnostics services related to research models; and Insourcing Solutions (IS), which provides colony management of its clients’ research operations (including recruitment, training, staffing, and management services). The Company’s DSA reportable segment includes services required to take a drug through the early development process including discovery services, which are non-regulated services to assist clients with the identification, screening, and selection of a lead compound for drug development, and regulated and non-regulated (GLP and non-GLP) safety assessment services. The Company’s Manufacturing reportable segment includes Microbial Solutions, which provides in vitro (non-animal) lot-release testing products, microbial detection products, and species identification services; Biologics Testing Services (Biologics), which performs specialized testing of biologics; Avian Vaccine Services (Avian), which supplies specific-pathogen-free chicken eggs and chickens; and contract development and manufacturing (CDMO) services, which, until the Company divested this business on February 10, 2017, allowed it to provide formulation design and development, manufacturing, and analytical and stability testing for small molecules. |
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Use of Estimates | Use of Estimates The preparation of consolidated financial statements in accordance with generally accepted accounting principles in the United States (U.S. GAAP) requires that the Company make estimates and judgments that may affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, judgments and methodologies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known. |
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents include money market funds, time deposits and other investments with remaining maturities at the purchase date of three months or less. |
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Investments | Investments Marketable securities are reported at fair value. Realized gains and losses on marketable securities are included in other income, net and are determined using the specific identification method. Unrealized gains and losses on available-for-sale marketable securities are included in accumulated other comprehensive loss. Time deposits with original maturities of greater than three months are reported as investments. |
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Trade Receivables, Net | Trade Receivables, Net The Company records trade receivables net of an allowance for doubtful accounts. An allowance for doubtful accounts is established based on historical collection information, a review of major client accounts receivable balances and current economic conditions in the geographies in which it operates. Amounts determined to be uncollectible are charged or written off against the allowance. |
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Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, investments and trade receivables. The Company places cash and cash equivalents and investments in various financial institutions with high credit rating and limits the amount of credit exposure to any one financial institution. Trade receivables are primarily from clients in the pharmaceutical and biotechnology industries, as well as academic and government institutions. Concentrations of credit risk with respect to trade receivables, which are typically unsecured, are limited due to the wide variety of customers using the Company’s products and services as well as their dispersion across many geographic areas. No single client accounted for more than 5% of revenue or trade receivables for the periods ended December 30, 2017 and December 31, 2016. |
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Fair Value Measurements | Fair Value Measurements The accounting standard for fair value measurements defines fair value, establishes a framework for measuring fair value in accordance with U.S. GAAP, and requires certain disclosures about fair value measurements. Under this standard, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has certain financial assets and liabilities recorded at fair value, which have been classified as Level 1, 2 or 3 within the fair value hierarchy:
The fair value hierarchy level is determined by asset, liability and redeemable noncontrolling interest 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. Valuation methodologies used for assets and liabilities measured or disclosed at fair value are as follows:
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Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on the average cost method for the small model business and first-in-first-out for the Company’s large model and Microbial Solutions businesses. For the small model business, cost includes direct materials such as feed and bedding, costs of personnel directly involved in the care of the models, and an allocation of facility overhead. For the large model business, cost is primarily the external cost paid to acquire the model. Certain businesses value inventory based on standard costs, which are periodically compared to and adjusted to actual costs. Inventory costs are charged to cost of revenue in the period the products are sold to an external party. The Company analyzes its inventory levels on a quarterly basis and writes down inventory that is determined to be damaged, obsolete or otherwise unmarketable, with a corresponding charge to cost of products sold. |
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Property, Plant and Equipment, Net | Property, Plant and Equipment, Net Property, plant and equipment, net, including improvements that significantly add to productive capacity or extend useful life, are carried at cost and are subject to review for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The cost of normal, recurring, or periodic repairs and maintenance activities related to property, plant and equipment is expensed as incurred. In addition, the Company capitalizes certain internal use computer software development costs. Costs incurred during the preliminary project stage are expensed as incurred, while costs incurred during the application development stage are capitalized and amortized over the estimated useful life of the software. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Maintenance and training costs related to software obtained for internal use are expensed as incurred. Interest costs incurred during the construction of major capital projects are capitalized until the underlying asset is ready for its intended use, at which point the interest costs are amortized as depreciation expense over the life of the underlying asset. The Company generally depreciates the cost of its property, plant and equipment using the straight-line method over the estimated useful lives of the respective assets as follow:
Leasehold improvements are amortized over the shorter of the estimated useful life of the asset or the lease term. Capital lease assets are amortized over the lease term, however, if ownership is transferred by the end of the capital lease, or there is a bargain purchase option, such capital lease assets are amortized over the useful life that would be assigned if such assets were owned. When the Company disposes of property, plant and equipment, it removes the associated cost and accumulated depreciation from the related accounts on its consolidated balance sheet and includes any resulting gain or loss in its consolidated statement of income. |
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Business Acquisitions | Business Acquisitions The Company accounts for business combinations under the acquisition method of accounting. The Company allocates the amounts that it pays for each acquisition to the assets it acquires and liabilities it assumes based on their fair values at the dates of acquisition, including identifiable intangible assets. The Company bases the fair value of identifiable intangible assets acquired in a business combination on valuations that use information and assumptions determined by management and which consider management’s best estimates of inputs and assumptions that a market participant would use. Contingent Consideration The consideration for the Company’s acquisitions often includes future payments that are contingent upon the occurrence of a particular event. The Company records an obligation for such contingent payments at fair value on the acquisition date. The Company estimates the fair value of contingent consideration obligations through valuation models that incorporate probability adjusted assumptions related to the achievement of the milestones and the likelihood of making related payments. The Company revalues these contingent consideration obligations each reporting period. Changes in the fair value of the contingent consideration obligations are recognized in the Company’s consolidated statements of income as a component of selling, general and administrative expenses. Changes in the fair value of the contingent consideration obligations can result from changes to one or multiple inputs, including adjustments to the discount rates and changes in the assumed probabilities of successful achievement of certain financial targets. Discount rates in the Company’s valuation models represent a measure of the credit risk associated with settling the liability. The period over which the Company discounts its contingent obligations is typically based on when the contingent payments would be triggered. These fair value measurements are based on significant inputs not observable in the market. See Note 5, “Fair Value.” |
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Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets when accounted for using the acquisition method of accounting. Goodwill is not amortized, but reviewed for impairment on an annual basis, during the fourth quarter, or more frequently if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of the Company's reporting units below their carrying amounts. The Company has the option to first assess qualitative factors to determine whether it is necessary to perform the two-step impairment test. If the Company elects this option and believes, as a result of the qualitative assessment, that it is more-likely-than-not that the carrying value of goodwill is not recoverable, the quantitative two-step impairment test is required; otherwise, no further testing is required. Alternatively, the Company may elect to not first assess qualitative factors and immediately perform the quantitative two-step impairment test. In the first step, the Company compares the fair value of its reporting units to their carrying values. If the carrying values of the net assets assigned to the reporting units exceed the fair values of the reporting units, then the second step of the impairment test is performed in order to determine the implied fair value of the Company’s goodwill. If the carrying value of the reporting unit’s goodwill exceeds its implied fair value, then the Company would record an impairment loss equal to the difference. Definite-lived intangible assets, including client relationships, are amortized over the pattern in which the economic benefits of the intangible assets are utilized and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset, which requires the use of customer attribution rates and other assumptions. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the definite-lived intangible assets, the definite-lived intangible assets are written-down to their fair values. |
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Valuation and Impairment of Long-Lived Assets | Valuation and Impairment of Long-Lived Assets Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written-down to their fair values. Long-lived assets to be disposed of are carried at fair value less costs to sell. |
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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 or cost 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. Under the equity method of accounting, the Company’s portion of the investment gains and losses, as reported in the fund’s financial statements on a quarterly lag each reporting period, is recorded in other income, net. In addition, the Company adjusts the carrying value of these investments to reflect its estimate of changes to fair value since the fund’s financial statements are based on information from the fund’s management team, market prices of known public holdings of the fund and other information. Under the cost method of accounting, the Company’s investment is initially measured at cost, with distributions recognized in other income, net. Distributions received in excess of earnings subsequent to the date of investment are considered a return of investment and are recorded as reductions of cost of the investment. The Company reviews its cost method investments to determine whether a decline in fair value below the cost basis is other-than-temporary. If the decline in fair value is determined to be other-than-temporary, the cost basis of the investment is written down to fair value. |
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Life Insurance Contracts | Life Insurance Contracts Investments in life insurance contracts are recorded at cash surrender value. The initial investment at the transaction price is recognized and remeasured based on fair value of underlying investments or contractual value each reporting period. Investments in and redemptions of these life insurance contracts are reported as cash flows from investing activities in the consolidated statement of cash flows. |
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Stock-Based Compensation | Stock-Based Compensation The Company grants stock options, restricted stock, restricted stock units (RSUs), and performance share units (PSUs) to employees and stock options, restricted stock, and RSUs to non-employee directors under stock-based compensation plans. Stock-based compensation is recognized as an expense in the consolidated statements of income based on the grant date fair value, adjusted for forfeitures, over the requisite service period. In connection with the adoption of Accounting Standard Update (ASU 2016-09), “Improvements to Employee Share-Based Payment Accounting” (see further discussion in Newly Adopted Accounting Pronouncements), beginning in fiscal 2017, the Company elected to change its accounting policy to account for forfeitures when they occur on a modified retrospective basis, which resulted in an immaterial impact to the Company’s consolidated financial statements and related disclosures. For stock options, restricted stock and RSUs that vest based on service conditions, the Company uses the straight-line method to allocate compensation expense to reporting periods. Where awards are made with non-substantive vesting periods, where a portion of the award continues to vest after the employee’s retirement, the Company recognizes expense based on the period from the grant date to the date on which the employee is retirement eligible. The Company records the expense for PSU grants subject to performance and/or market conditions using the accelerated attribution method over the remaining service period when management determines that achievement of the performance-based milestone is probable. The fair value of stock options granted is calculated using the Black-Scholes option-pricing model and the fair value of PSUs is estimated using a lattice model with a Monte Carlo simulation, both of which require the use of subjective assumptions including volatility and expected term, among others. The expected volatility assumption is typically determined using the historical volatility of the Company’s common stock over the expected life of the stock-based award. The expected term is determined using historical option exercise activity. The fair value of restricted stock and RSUs is based on the market value of the Company’s common stock on the date of grant. |
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Revenue Recognition | Revenue Recognition The Company recognizes revenue when all of the following conditions are satisfied: persuasive evidence of an arrangement exists, delivery has occurred or services have been provided, the price to the customer is fixed or determinable, and collectability is reasonably assured. Service revenue is generally evidenced by client contracts, which range in duration from a few weeks to a few years and typically take the form of an agreed upon rate per unit or fixed fee arrangements. Such contracts typically do not contain acceptance provisions based upon the achievement of certain study or laboratory testing results. Revenue of agreed upon rate per unit contracts is recognized as services are performed, based upon rates specified in the contract. In cases where performance spans reporting periods, revenue of fixed fee contracts is recognized as services are performed, measured on the ratio of outputs or performance obligations completed to the total contractual outputs or performance obligations to be provided. Changes in estimated effort to complete the fixed fee contract are reflected in the period in which the change becomes known. Changes in scope of work are common, especially under long-term contracts, and generally result in a change in contract value. Once the client has agreed to the changes in scope and renegotiated pricing terms, the contract value is amended and revenue is typically recognized as described above. Billing schedules and payment terms are generally negotiated on a contract-by-contract basis. Payments received in excess of revenue recognized are recorded as deferred revenue. As the contracted services are subsequently performed and the associated revenue is recognized, the deferred revenue balance is reduced by the amount of revenue recognized during the period. In other cases, services may be provided and revenue is recognized before the client is invoiced. In these cases, revenue recognized will exceed amounts billed and the difference, representing amounts which are currently unbillable to the customer pursuant to contractual terms, is recorded as an unbilled receivable. Once the client is invoiced, the unbilled receivable is reduced for the amount billed, and a corresponding trade receivable is recorded. Most contracts are terminable by the client, either immediately or upon notice. These contracts often require payment to the Company of expenses to wind down the project, fees earned to date or, in some cases, a termination fee. Such payments are included in revenues when earned. The Company recognizes product revenue net of allowances for estimated returns, rebates and discounts when title and risk of loss pass to customers. When the Company sells equipment with specified acceptance criteria, it assesses its ability to meet the acceptance criteria in order to determine the timing of revenue recognition. The Company would defer revenue until completion of customer acceptance testing if it is not able to demonstrate the ability to meet such acceptance criteria. A portion of the Company’s revenue is from multiple-element arrangements that include multiple products and/or services as deliverables in a single arrangement with each deliverable, or a combination of the deliverables, representing a separate unit of accounting. The Company allocates revenue to each element in a multiple-element arrangement based upon the relative selling price of each deliverable. Revenue allocated to each deliverable is then recognized when all revenue recognition criteria are met. Judgments as to the identification of deliverables, units of accounting, the allocation of consideration to the deliverable, and the appropriate timing of revenue recognition are critical with respect to these arrangements. At the inception of each arrangement that includes milestone payments, the Company evaluates whether each milestone is substantive. This evaluation includes an assessment of whether (a) the consideration is commensurate with either (1) the Company’s performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the Company’s performance to achieve the milestone; (b) the consideration relates solely to past performance; and (c) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. If a substantive milestone is achieved and collection of the related receivable is reasonably assured, the Company recognizes revenue related to the milestone in its entirety in the period in which the milestone is achieved. In those circumstances where a milestone is not substantive, the Company recognizes as revenue, on the date the milestone is achieved, an amount equal to the applicable percentage of the performance period that had elapsed as of the date the milestone was achieved, with the balance being deferred and recognized over the remaining period of performance. As of December 30, 2017, the Company had no significant milestones that were deemed substantive. The Company records shipping charges billed to customers in total revenue and records shipping costs in cost of revenue (excluding amortization of intangible assets) for all periods presented. |
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Advertising Costs | Advertising Costs Advertising costs are expensed as incurred. |
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Income Taxes | Income Taxes The provision for income taxes includes federal, state, local and foreign taxes. Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statements carrying amounts and their respective tax basis. The Company measures deferred tax assets and liabilities using the enacted tax rates in effect when the temporary differences are expected to be settled. The Company evaluates the realizability of its deferred tax assets and establishes a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized. The Company accounts for uncertain tax positions using a “more-likely-than-not” threshold for recognizing and resolving uncertain tax positions. The Company evaluates uncertain tax positions on a quarterly basis and considers various factors, including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, information obtained during in-process audit activities and changes in facts or circumstances related to a tax position. The Company also accrues for potential interest and penalties related to unrecognized tax benefits in income tax expense. |
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Foreign Currency Contracts | Foreign Currency Contracts Foreign currency contracts are recorded at fair value in the Company’s consolidated balance sheets and are not designated as hedging instruments. Any gains or losses on such contracts are immediately recognized in other income, net. Translation of Foreign Currencies For the Company’s subsidiaries that transact in a functional currency other than the U.S. dollar, assets and liabilities are translated at current rates of exchange as of the balance sheet date. Income and expense items are translated at the average foreign exchange rates for the period. Adjustments resulting from the translation of the financial statements of the Company’s foreign operations into U.S. dollars are excluded from the determination of net income and are recorded in accumulated other comprehensive loss, a separate component of equity. |
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Pension and Other Post-Retirement Benefit Plans | Pension and Other Post-Retirement Benefit Plans The Company recognizes the funded status of its defined benefit pension and other post-retirement benefit plans as an asset or liability. This amount is defined as the difference between the fair value of plan assets and the benefit obligation. The Company measures plan assets and benefit obligations as of its fiscal year end. The key assumptions used to calculate benefit obligations and related pension costs include expected long-term rate of return on plan assets, withdrawal and mortality rates, expected rate of increase in employee compensation levels and a discount rate. Assumptions are determined based on the Company’s data and appropriate market indicators, and evaluated each year as of the plan’s measurement date. The expected long-term rate of return on plan assets reflects the average rate of earnings expected on the funds invested, or to be invested, to provide for the benefits included in the projected benefit obligations. In determining the expected long-term rate of return on plan assets, the Company considers the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes and economic and other indicators of future performance. In fiscal year 2017, new mortality improvement scales were issued in the U.S. and the United Kingdom (U.K.) reflecting a decline in longevity projection from the 2016 releases that the Company adopted, which decreased the Company’s benefit obligations by $5.2 million as of December 30, 2017. In fiscal year 2016, new mortality improvement scales were issued in the U.S. reflecting a decline in longevity projection from the 2015 releases that the Company adopted, which decreased the Company’s benefit obligations by $1.3 million as of December 31, 2016. The discount rate reflects the rate the Company would have to pay to purchase high-quality investments that would provide cash sufficient to settle its current pension obligations. The rate of compensation increase reflects the expected annual salary increases for the plan participants based on historical experience and the current employee compensation strategy. The Company is required to recognize as a component of other comprehensive income, net of tax, the actuarial gains or losses and prior service costs or credits that arise but were not previously required to be recognized as components of net periodic benefit cost. Other comprehensive income is adjusted as these amounts are later recognized in income as components of net periodic benefit cost. |
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Earnings Per Share | Earnings Per Share Basic earnings per share are calculated by dividing net income attributable to common shareholders by the weighted average number of common shares outstanding during the period. Except where the result would be anti-dilutive to income from continuing operations, diluted earnings per share is computed using the treasury stock method, assuming the exercise of stock options and the vesting of restricted stock awards, RSUs, or PSUs, as well as their related income tax effects. |
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Newly Adopted and Issued Accounting Pronouncements | . Newly Adopted Accounting Pronouncements In November 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-18, “Restricted Cash.” The standard addresses the classification and presentation of restricted cash and restricted cash equivalents within the statement of cash flows. The Company elected to early adopt this standard in fiscal year 2017 and applied the changes retrospectively to all prior periods presented in its consolidated statements of cash flows. The Company historically excluded restricted cash balances, recorded in current and long-term other assets, from cash and cash equivalents within the consolidated statements of cash flows, reflecting transfers between cash, cash equivalents, and restricted cash as a cash flow classified within cash flows relating to operating activities. As a result of the adoption of this standard, the Company combined restricted cash balances of $2.3 million, $2.0 million, and $2.6 million as of December 31, 2016, December 26, 2015, and December 27, 2014, respectively, with cash and cash equivalents when reconciling the beginning and ending balances within the consolidated statements of cash flows for the fiscal years ended December 31, 2016 and December 26, 2015. In August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments.” The standard addresses the classification of certain transactions within the statement of cash flows, including cash payments for debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, and distributions received from equity method investments. The Company elected to early adopt this standard in fiscal year 2017 and applied the changes retrospectively to all prior periods presented within its consolidated statements of cash flows. As a result of the adoption of this standard, the Company reclassified $6.3 million and $7.3 million, respectively, from investing activities to operating activities within the consolidated statements of cash flows that related to distributions received from equity method investments for the fiscal years ended December 31, 2016 and December 26, 2015. In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” The standard reduces complexity in several aspects of the accounting for employee share-based compensation, including the income tax consequences, classification of awards as either equity or liabilities, and classification within the statement of cash flows. The Company adopted this standard in fiscal year 2017, and applied the changes as required by each amendment to its consolidated financial statements and related disclosures. Under ASU 2016-09, the Company adopted the amendment to recognize excess tax benefits and tax deficiencies in the consolidated statements of income on a prospective basis, to present excess tax benefits within operating activities within the consolidated statements of cash flows on a retrospective basis, and elected to change its accounting policy to account for forfeitures as they occur on a modified retrospective basis. The adoption to recognize excess tax benefits and tax deficiencies within the consolidated statements of income on a prospective basis could result in fluctuations in the effective tax rate period-over-period, depending on how many awards vest and the volatility of the Company’s stock price. During fiscal year 2017, the impact to the provision for income taxes within the consolidated statements of income was an excess tax benefit of $11.0 million. Further, for fiscal year 2017, the Company excluded the effect of windfall tax benefits from the hypothetical proceeds used to calculate the repurchase of shares under the treasury stock method for the calculation of diluted earnings per share. The adoption of the amendment to present excess tax benefits within operating activities within the consolidated statements of cash flows on a retrospective basis resulted in the reclassification of a cash inflow of $10.0 million and $11.8 million, respectively, from cash provided by financing activities to cash provided by operating activities for fiscal years 2016 and 2015. The Company had previously classified cash paid for tax withholding purposes as a financing activity within the consolidated statements of cash flows; therefore, there was no change related to this requirement under the amendment. The Company’s election to change its accounting policy to account for forfeitures when they occur on a modified retrospective basis resulted in an immaterial impact on its 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 ASU 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 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. The ASU is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years, and should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost in the statements of income. Early adoption is permitted within the first interim period of the fiscal year. The adoption of this standard is not expected to have a material impact on the Company’s 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. The ASU 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 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. The ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted for certain transactions. The adoption of this standard is not expected to have a material impact on the Company’s 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. The ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. 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. In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Liabilities.” This guidance 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 ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” The standard, including subsequently issued amendments, will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either a modified retrospective or cumulative effect transition method. The standard will require 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 will be effective for annual and interim periods beginning after December 15, 2017. The Company formed an implementation team during fiscal year 2016 to oversee adoption of the new standard. The implementation team has substantially completed its assessment of the new standard, including a detailed review of the Company’s contract portfolio, revenue streams to identify potential differences in accounting as a result of the new standard, and selected the modified retrospective transition method. The Company assessed the impact on the existing revenue accounting policies, newly required financial statement disclosures, and executed on the project plan. Currently, the Company finalized contract reviews, worked through anticipated changes to systems and business processes, and internal controls to support the adoption of the new standard. The Company expects the opening balance sheet adoption impact and prospective changes in the timing of revenue recognition across all reportable segments to be insignificant with the adoption of the new standard. |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||
Schedule of Property, Plant, and Equipment Estimated Useful Lives | The Company generally depreciates the cost of its property, plant and equipment using the straight-line method over the estimated useful lives of the respective assets as follow:
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BUSINESS ACQUISITIONS AND DIVESTITURE (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition | The purchase price allocation of $62.0 million, net of $2.9 million of cash acquired, was as follows:
The purchase price allocation of $20.1 million, net of $0.6 million of cash acquired, was as follows:
The purchase price allocation of $212.2 million, net of $2.3 million of cash acquired, was as follows:
The purchase price allocation of $577.4 million, net of $27.4 million of cash acquired, was as follows:
The purchase price allocation of $35.4 million, net of $0.6 million of cash acquired, was as follows:
The purchase price allocation of $11.7 million, net of a non-significant amount of cash acquired, was as follows:
The purchase price allocation of $9.6 million, net of less than $0.1 million of cash acquired, was as follows:
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Finite-Lived Intangible Assets Acquired as Part of Business Combination | The breakout of definite-lived intangible assets acquired was as follows:
The breakout of definite-lived intangible assets acquired was as follows:
The breakout of definite-lived intangible assets acquired was as follows:
The breakout of definite-lived intangible assets acquired was as follows:
The breakout of definite-lived intangible assets acquired was as follows:
The breakout of definite-lived intangible assets acquired was as follows:
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Business Acquisition, Pro Forma Information | The following selected unaudited pro forma consolidated results of operations are presented as if the WIL Research acquisition had occurred as of the beginning of the period immediately preceding the period of acquisition after giving effect to certain adjustments. For fiscal year 2016, these adjustments included additional amortization of intangible assets and depreciation of fixed assets of $0.4 million, reversal of interest expense on borrowings of $2.6 million, elimination of intercompany activity and other one-time costs, and the tax impacts of these adjustments. For fiscal year 2015, these adjustments included additional amortization of intangible assets and depreciation of fixed assets of $13.6 million, reversal of interest expense on borrowings of $10.5 million, inclusion of acquisition-related transaction costs of $11.5 million, elimination of intercompany activity and other one-time costs, and the tax impacts of these adjustments.
The following selected unaudited pro forma consolidated results of operations are presented as if the Celsis acquisition had occurred as of the beginning of the period immediately preceding the period of acquisition after giving effect to certain nonrecurring costs and other adjustments, resulting in a reversal of $0.6 million for fiscal year 2015, related to depreciation and amortization of property, plant and equipment, inventory fair value adjustments and intangible assets.
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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):
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SUPPLEMENTAL BALANCE SHEET INFORMATION (Tables) |
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Supplemental Balance Sheet Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Composition of Trade Receivables, Net | The composition of trade receivables, net is as follows:
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Composition of Inventories | The composition of inventories is as follows:
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Composition of Other Current Assets | The composition of other current assets is as follows:
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Composition of Property, Plant and Equipment, Net | The composition of property, plant and equipment, net is as follows:
(1) These balances include assets under capital lease. See Note 7, “Long-Term Debt and Capital Lease Obligations.” |
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Composition of Other Assets | The composition of other assets is as follows:
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Composition of Other Current Liabilities | The composition of other current liabilities is as follows:
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Schedule of Other Long-Term Liabilities | The composition of other long-term liabilities is as follows:
|
FAIR VALUE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets, Liabilities and Redeemable Noncontrolling Interest Measured on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized below:
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Rollforward of Contingent Consideration | The following table provides a rollforward of the contingent consideration related to previous business acquisitions. See Note 2, “Business Acquisitions and Divestiture”.
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GOODWILL AND INTANGIBLE ASSETS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rollforward of Goodwill | The following table provides a rollforward of the Company’s goodwill:
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Schedule of Intangible Assets, Net by Class | The following table displays intangible assets, net by major class:
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Schedule of Estimated Amortization Expense | stimated amortization expense for intangible assets for each of the next five fiscal years is expected to be as follows:
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LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt, Net | Long-term debt, net consists of the following:
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Schedule of Principal Maturities of Existing Debt | Principal maturities of existing debt for the periods set forth in the table below, are as follows:
Excluded from the table above is $18.2 million of Other Debt associated with construction in progress related to build-to-suit operating leases. |
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Schedule of Future Minimum Lease Payments for Capital Leases | As of December 30, 2017, the minimum lease payments under capital leases for each of the next five years and total thereafter were as follows:
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EQUITY AND NONCONTROLLING INTERESTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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Changes to Each Component of Accumulated Other Comprehensive Income (Loss), Net of Income Taxes | Changes to each component of accumulated other comprehensive income (loss), net of income taxes, are as follows:
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Rollforward of Redeemable Noncontrolling Interest | The following table provides a rollforward of the activity related to the Company’s redeemable noncontrolling interest subsequent to the acquisition of the additional 12% equity interest on July 7, 2016:
The following table provides a rollforward of the fair value of the Company’s redeemable noncontrolling interest for fiscal year 2016:
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Income from Continuing Operations Before Income Taxes and the Related Provision for Income Taxes | The components of income from continuing operations before income taxes and the related provision for income taxes are presented below:
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Components of Deferred Tax Assets and Liabilities | The components of deferred tax assets and liabilities are as follows:
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Reconciliations of the Statutory U.S. Federal Income Tax Rate to Effective Tax Rates | Reconciliations of the statutory U.S. federal income tax rate to effective tax rates are as follows:
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Reconciliation of the Company's Beginning and Ending Unrecognized Income Tax Benefits | A reconciliation of the Company’s beginning and ending unrecognized income tax benefits is as follows:
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EMPLOYEE BENEFIT PLANS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Benefit Obligations and Plans Assets of the Company's Pension Plans | The following table provides a reconciliation of benefit obligations and plan assets of the Company’s pension, DCP and ESLIRP plans:
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Amounts Recognized in Accumulated Other Comprehensive Loss Related to the Company's Pensions Plans | Amounts recognized in accumulated other comprehensive loss related to the Company’s pension, DCP and ESLIRP plans are as follows:
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Accumulated Benefit Obligation and Fair of Plan Assets | The accumulated benefit obligation and fair value of plan assets for the Company’s pension, DCP and ESLIRP plans with accumulated benefit obligations in excess of plan assets are as follows:
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Projected Benefit Obligation and Fair Value of Plan Assets | The projected benefit obligation and fair value of plan assets for the Company’s pension, DCP and ESLIRP plans with projected benefit obligations in excess of plan assets are as follows:
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Amounts in Accumulated Other Comprehensive Income Expected to Be Recognized as Components of Net Periodic Benefit Cost Over the Next Fiscal Year | The amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year are as follows:
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Components of Net Periodic Benefit Costs for the Company's Pension Plans | Components of net periodic benefit cost for the Company’s pension, DCP and ESLIRP plans are as follows:
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Weighted-average Assumptions | Weighted-average assumptions used to determine projected benefit obligations are as follows:
Weighted-average assumptions used to determine net periodic benefit cost are as follows:
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Fair Value of the Company's Pension Plan Assets by Asset Category | The fair value of the Company’s pension plan assets by asset category are as follows:
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Estimated Future Benefit Payments Over the Next Five Years | Estimated future benefit payments during the next five years and in the aggregate for fiscal years thereafter, are as follows:
|
STOCK-BASED COMPENSATION (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Statement Line Items in Which Stock-based Compensation is Reflected | The following table provides the financial statement line items in which stock-based compensation is reflected:
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Summary of Stock Option Activity | The following table summarizes stock option activity under the Company’s stock-based compensation plans:
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Weighted-average Assumptions | The fair value of stock options granted was estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions:
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Summary of Restricted Stock and Restricted Stock Unit Activity | The following table summarizes the restricted stock and restricted stock units activity for fiscal year 2017:
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Information about PSUs and Related Weighted-Average Assumptions | The Company utilizes a Monte Carlo simulation valuation model to value these awards. Information pertaining to the Company’s PSUs and the related estimated weighted-average assumptions used to calculate their fair value were as follows:
|
FOREIGN CURRENCY CONTRACTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Gains (Losses) Recognized on Foreign Exchange Forward Contracts | The following table summarizes gains recognized on foreign exchange forward contracts related to intercompany loans denominated in Euros on the Company’s consolidated statements of income:
|
COMMITMENTS AND CONTINGENCIES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Payments Under Noncancellable Operating Leases | As of December 30, 2017, minimum rental commitments under non-cancellable leases, net of income from subleases, for each of the next five years and total thereafter were as follows:
|
RESTRUCTURING AND ASSET IMPAIRMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Severance and Retention Costs | The following table presents a summary of severance and transition costs, and asset impairments and accelerated depreciation (referred to as restructuring costs) related to this initiative by classification within the consolidated statements of income for the year ended December 30, 2017.
The following table presents restructuring costs by reportable segment for these productivity improvement initiatives:
The following table presents a summary of restructuring costs related to these initiatives by classification within the consolidated statements of income for the years ended 2017, 2016, and 2015.
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Rollforward of Company's Severance and Retention Costs Liability | The following table provides a rollforward for all of the Company’s severance and transition costs, and lease obligation liabilities related to restructuring activities:
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SEGMENT AND GEOGRAPHIC INFORMATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue and Other Financial Information by Reportable Segment | The following table presents revenue and other financial information by reportable segment:
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Reconciliation of Segment Operating Income and Capital Expenditures to Respective Consolidated Amounts | For fiscal years ended 2017, 2016 and 2015, reconciliations of segment operating income and capital expenditures to the respective consolidated amounts are as follows:
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Revenue for Each Significant Product or Service Offering | Revenue for each significant product or service offering is as follows:
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Summary of Unallocated Corporate Overhead | A summary of unallocated corporate expense consists of the following:
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Revenue and Long-Lived Assets by Geographic Area | Revenue and long-lived assets by geographic area are as follows:
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SELECTED QUARTERLY FINANCIAL DATA (unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data | The following table contains quarterly financial information for fiscal years 2017 and 2016. The operating results for any quarter are not necessarily indicative of future period results.
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DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Segment Reporting (Details) |
12 Months Ended |
---|---|
Dec. 30, 2017
segments
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 3 |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Venture Capital Investments (Details) |
Dec. 30, 2017 |
---|---|
Minimum | |
Schedule of Equity Method Investments [Line Items] | |
Company's ownership percentage | 0.60% |
Maximum | |
Schedule of Equity Method Investments [Line Items] | |
Company's ownership percentage | 12.00% |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Life Insurance Contracts (Details) $ in Millions |
Dec. 30, 2017
USD ($)
contract
|
Dec. 31, 2016
USD ($)
contract
|
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of life insurance contracts | contract | 43 | 43 |
Face value of life insurance contracts | $ | $ 66.4 | $ 61.4 |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition (Details) milestone in Millions |
Dec. 30, 2017
milestone
|
---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Revenue recognition, number of milestones achieved | 0.0 |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advertising Costs (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Advertising costs | $ 1.6 | $ 1.4 | $ 1.2 |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Pension and Other Post-Retirement Benefit Plans (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Decrease in company's benefit obligations from new mortality improvement scales | $ 5.2 | $ 1.3 |
BUSINESS ACQUISITIONS AND DIVESTITURE - KWS BioTest Limited, Additional Information (Details) - KWS BioTest Limited £ in Millions, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 11, 2018
USD ($)
|
Dec. 30, 2017
USD ($)
|
Jan. 11, 2018
GBP (£)
|
|
Business Acquisition [Line Items] | |||
Transaction and integration costs | $ 0.5 | ||
Subsequent Event | |||
Business Acquisition [Line Items] | |||
Purchase price | $ 20.3 | ||
Contingent consideration | $ 4.1 | £ 3.0 |
BUSINESS ACQUISITIONS AND DIVESTITURE - Brains On-Line, Additional Information (Details) - Brains On-Line $ in Thousands, € in Millions |
12 Months Ended | |||
---|---|---|---|---|
Aug. 04, 2017
USD ($)
|
Dec. 30, 2017
USD ($)
|
Aug. 04, 2017
EUR (€)
|
Aug. 04, 2017
USD ($)
|
|
Business Acquisition [Line Items] | ||||
Purchase price | $ 21,300 | |||
Contingent consideration | € 6.7 | $ 7,900 | ||
Purchase price allocation | $ 20,122 | |||
Cash acquired | $ 600 | |||
Transaction and integration costs | $ 2,600 |
BUSINESS ACQUISITIONS AND DIVESTITURE - Brains On-Line, Purchase Price Allocation (Details) - USD ($) $ in Thousands |
Dec. 30, 2017 |
Aug. 04, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Goodwill | $ 804,906 | $ 787,517 | $ 438,829 | |
Brains On-Line | ||||
Business Acquisition [Line Items] | ||||
Acquired 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 DIVESTITURE - Brains On-Line, Definite Lived Intangible Assets (Details) - Brains On-Line $ in Thousands |
Aug. 04, 2017
USD ($)
|
---|---|
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 DIVESTITURE - Agilux, Additional Information (Details) - Agilux - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 28, 2016 |
Dec. 30, 2017 |
Dec. 31, 2016 |
|
Business Acquisition [Line Items] | |||
Purchase price | $ 64,900 | ||
Purchase price allocation | 62,025 | ||
Cash acquired | $ 2,900 | ||
Transaction and integration costs | $ 300 | $ 1,700 |
BUSINESS ACQUISITIONS AND DIVESTITURE - Agilux, Purchase Price Allocation (Details) - USD ($) $ in Thousands |
Dec. 30, 2017 |
Dec. 31, 2016 |
Sep. 28, 2016 |
Dec. 26, 2015 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Goodwill | $ 804,906 | $ 787,517 | $ 438,829 | |
Agilux | ||||
Business Acquisition [Line Items] | ||||
Acquired receivables, contractual amount | $ 4,799 | |||
Trade receivables | 4,799 | |||
Other current assets (excluding cash) | 794 | |||
Property, plant and equipment | 3,907 | |||
Other long-term assets | 11 | |||
Definite-lived intangible assets | 21,900 | |||
Goodwill | 44,517 | |||
Current liabilities | (3,812) | |||
Long-term liabilities | (10,091) | |||
Total purchase price allocation | $ 62,025 |
BUSINESS ACQUISITIONS AND DIVESTITURE - Agilux, Definite Lived Intangible Assets (Details) - Agilux $ in Thousands |
Sep. 28, 2016
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 21,900 |
Weighted Average Amortization Life | 14 years |
Client relationships | |
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 16,700 |
Weighted Average Amortization Life | 17 years |
Other intangible assets | |
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 5,200 |
Weighted Average Amortization Life | 4 years |
BUSINESS ACQUISITIONS AND DIVESTITURE - Blue Stream Laboratories, Additional Information (Details) - Blue Stream - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 27, 2016 |
Sep. 30, 2017 |
Dec. 30, 2017 |
|
Business Acquisition [Line Items] | |||
Purchase price | $ 11,700 | ||
Contingent consideration payable | 3,000 | ||
Contingent consideration paid | $ 3,000 | ||
Purchase price allocation | $ 11,749 | ||
Transaction and integration costs | $ 600 |
BUSINESS ACQUISITIONS AND DIVESTITURE - Blue Stream Laboratories, Allocation of Purchase Price (Details) - USD ($) $ in Thousands |
Dec. 30, 2017 |
Dec. 31, 2016 |
Jun. 27, 2016 |
Dec. 26, 2015 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Goodwill | $ 804,906 | $ 787,517 | $ 438,829 | |
Blue Stream | ||||
Business Acquisition [Line Items] | ||||
Acquired receivables, contractual amount | $ 1,104 | |||
Trade receivables | 1,104 | |||
Other current assets (excluding cash) | 15 | |||
Property, plant and equipment | 912 | |||
Other long-term assets | 187 | |||
Definite-lived intangible assets | 1,230 | |||
Goodwill | 10,334 | |||
Current liabilities | (1,132) | |||
Long-term liabilities | (901) | |||
Total purchase price allocation | $ 11,749 |
BUSINESS ACQUISITIONS AND DIVESTITURE - Blue Stream Laboratories, Definite Lived Intangible Assets (Details) - Blue Stream $ in Thousands |
Jun. 27, 2016
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 1,230 |
Weighted Average Amortization Life | 7 years |
Client relationships, net | |
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 650 |
Weighted Average Amortization Life | 10 years |
Other intangible assets | |
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 580 |
Weighted Average Amortization Life | 5 years |
BUSINESS ACQUISITIONS AND DIVESTITURE - WIL Research, Additional Information (Details) - USD ($) |
9 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Apr. 04, 2016 |
Dec. 31, 2016 |
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
Feb. 10, 2017 |
Mar. 30, 2016 |
Mar. 29, 2016 |
|
Business Acquisition [Line Items] | ||||||||
Credit facility | $ 1,650,000,000.00 | $ 1,300,000,000.0 | ||||||
WIL Research | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price | $ 604,800,000 | |||||||
Assumed liabilities | 400,000 | |||||||
Purchase price allocation | 577,391,000 | |||||||
Cash acquired | 27,400,000 | |||||||
Goodwill resulting from transaction | $ 19,000,000 | $ 14,800,000 | ||||||
Transaction and integration costs | $ 1,700,000 | $ 15,500,000 | $ 3,200,000 | |||||
Revenue since acquisition | $ 176,100,000 | |||||||
Operating income (loss) since acquisition | $ 12,500,000 | |||||||
Additional amortization of intangible assets and depreciation of fixed assets | 400,000 | 13,600,000 | ||||||
Reversal of interest expense on borrowings | $ 2,600,000 | 10,500,000 | ||||||
Acquisition-related transaction costs | $ 11,500,000 |
BUSINESS ACQUISITIONS AND DIVESTITURE - WIL Research, Allocation of Purchase Price (Details) - USD ($) $ in Thousands |
Dec. 30, 2017 |
Dec. 31, 2016 |
Apr. 04, 2016 |
Dec. 26, 2015 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Goodwill | $ 804,906 | $ 787,517 | $ 438,829 | |
WIL Research | ||||
Business Acquisition [Line Items] | ||||
Acquired receivables, contractual amount | $ 48,625 | |||
Trade receivables | 48,157 | |||
Inventories | 2,296 | |||
Other current assets (excluding cash) | 3,814 | |||
Property, plant and equipment | 129,066 | |||
Other long-term assets | 1,060 | |||
Definite-lived intangible assets | 164,800 | |||
Goodwill | 330,175 | |||
Deferred revenue | (39,103) | |||
Current liabilities | (27,386) | |||
Long-term liabilities | (35,488) | |||
Total purchase price allocation | $ 577,391 |
BUSINESS ACQUISITIONS AND DIVESTITURE - WIL Research, Definite Lived Intangible Assets (Details) - WIL Research $ in Thousands |
Apr. 04, 2016
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 164,800 |
Weighted Average Amortization Life | 13 years |
Client relationships, net | |
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 137,500 |
Weighted Average Amortization Life | 15 years |
Developed technology | |
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 20,700 |
Weighted Average Amortization Life | 3 years |
Backlog | |
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 6,600 |
Weighted Average Amortization Life | 1 year |
BUSINESS ACQUISITIONS AND DIVESTITURE - WIL Laboratories, Pro Forma Financial Information (Details) - WIL Research - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Business Acquisition [Line Items] | ||
Revenue | $ 1,741,964 | $ 1,578,133 |
Net income attributable to common shareholders | $ 175,779 | $ 153,974 |
Earnings (loss) per common share | ||
Basic (in dollars per share) | $ 3.74 | $ 3.31 |
Diluted (in dollars per share) | $ 3.67 | $ 3.23 |
BUSINESS ACQUISITIONS AND DIVESTITURE - Contract Manufacturing, Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Apr. 01, 2017 |
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
Feb. 10, 2017 |
|
Business Acquisition [Line Items] | |||||
Gain on divestiture | $ 10,577 | $ 0 | $ 0 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | CDMO Business | |||||
Business Acquisition [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 DIVESTITURE - Contract Manufacturing, Schedule of Assets and Liabilities Disposed (Details) - USD ($) $ in Thousands |
Dec. 30, 2017 |
Feb. 10, 2017 |
Dec. 31, 2016 |
---|---|---|---|
Liabilities | |||
Deferred revenue | $ 1,815 | $ 1,623 | |
Other current liabilities | $ 3,942 | $ 5,771 | |
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 |
BUSINESS ACQUISITIONS AND DIVESTITURE - Oncotest, Additional Information (Details) - Oncotest $ in Thousands, € in Millions |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Nov. 18, 2015
USD ($)
|
Dec. 31, 2016
USD ($)
|
Dec. 26, 2015
USD ($)
|
Dec. 31, 2016
EUR (€)
|
Dec. 31, 2016
USD ($)
|
|
Business Acquisition [Line Items] | |||||
Purchase price | $ 36,000 | ||||
Contingent consideration | 300 | ||||
Gain on contingent consideration liability | $ 300 | ||||
Maximum contingent consideration | € 2.0 | $ 2,100 | |||
Purchase price allocation | 35,431 | ||||
Cash acquired | $ 600 | ||||
Transaction and integration costs | $ 2,100 |
BUSINESS ACQUISITIONS AND DIVESTITURE - Oncotest, Purchase Price Allocation (Details) - USD ($) $ in Thousands |
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
Nov. 18, 2015 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Goodwill | $ 804,906 | $ 787,517 | $ 438,829 | |
Oncotest | ||||
Business Acquisition [Line Items] | ||||
Acquired receivables, contractual amount | $ 3,546 | |||
Trade receivables | 3,520 | |||
Inventories | 129 | |||
Other current assets (excluding cash) | 706 | |||
Property, plant and equipment | 2,528 | |||
Definite-lived intangible assets | 13,330 | |||
Goodwill | 22,894 | |||
Other long-term assets | 250 | |||
Current liabilities | (3,456) | |||
Long-term liabilities | (4,470) | |||
Total purchase price allocation | $ 35,431 |
BUSINESS ACQUISITIONS AND DIVESTITURE - Oncotest, Definite-Lived Intangible Assets (Details) - Oncotest $ in Thousands |
Nov. 18, 2015
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 13,330 |
Weighted Average Amortization Life | 19 years |
Client relationships, net | |
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 7,146 |
Weighted Average Amortization Life | 19 years |
Developed technology | |
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 5,960 |
Weighted Average Amortization Life | 19 years |
Other intangible assets | |
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 224 |
Weighted Average Amortization Life | 3 years |
BUSINESS ACQUISITIONS AND DIVESTITURE - Celsis, Additional Information (Details) - Celsis - USD ($) $ in Thousands |
5 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jul. 24, 2015 |
Dec. 26, 2015 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Business Acquisition [Line Items] | ||||
Purchase price | $ 214,500 | |||
Assumed liabilities | 10,300 | |||
Purchase price allocation | 212,236 | |||
Cash acquired | $ 2,300 | |||
Transaction and integration costs | $ 1,000 | $ 8,800 | ||
Revenue since acquisition | $ 11,100 | |||
Operating income (loss) since acquisition | $ (6,100) | |||
Nonrecurring costs and other adjustments | $ (600) |
BUSINESS ACQUISITIONS AND DIVESTITURE - Celsis, Purchase Price Allocation (Details) - USD ($) $ in Thousands |
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
Jul. 24, 2015 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Goodwill | $ 804,906 | $ 787,517 | $ 438,829 | |
Celsis | ||||
Business Acquisition [Line Items] | ||||
Acquired receivables, contractual amount | $ 5,410 | |||
Trade receivables | 5,288 | |||
Inventories | 10,103 | |||
Other current assets (excluding cash) | 13,269 | |||
Property, plant and equipment | 4,639 | |||
Definite-lived intangible assets | 118,140 | |||
Goodwill | 105,550 | |||
Other long-term assets | 537 | |||
Current debt | (9,766) | |||
Current liabilities | (7,136) | |||
Long-term liabilities | (28,388) | |||
Total purchase price allocation | $ 212,236 |
BUSINESS ACQUISITIONS AND DIVESTITURE - Celsis, Definite-Lived Intangible Assets (Details) - Celsis $ in Thousands |
Jul. 24, 2015
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 118,140 |
Weighted Average Amortization Life | 15 years |
Client relationships | |
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 71,000 |
Weighted Average Amortization Life | 16 years |
Developed technology | |
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 39,140 |
Weighted Average Amortization Life | 14 years |
Trademark and trade names | |
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 5,200 |
Weighted Average Amortization Life | 14 years |
Non-compete | |
Business Acquisition [Line Items] | |
Definite-Lived Intangible Assets | $ 2,800 |
Weighted Average Amortization Life | 5 years |
BUSINESS ACQUISITIONS AND DIVESTITURE - Celsis, Pro Forma Financial Information (Details) - Celsis $ / shares in Units, $ in Thousands |
12 Months Ended |
---|---|
Dec. 26, 2015
USD ($)
$ / shares
| |
Business Acquisition [Line Items] | |
Revenue | $ | $ 1,380,493 |
Net income attributable to common shareholders | $ | $ 162,672 |
Earnings (loss) per common share | |
Basic (in dollars per share) | $ / shares | $ 3.50 |
Diluted (in dollars per share) | $ / shares | $ 3.42 |
BUSINESS ACQUISITIONS AND DIVESTITURE - Sunrise, Additional Information (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
May 05, 2015 |
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Business Acquisition [Line Items] | ||||
Bargain purchase gain | $ (277) | $ 16 | $ (9,837) | |
Sunrise | ||||
Business Acquisition [Line Items] | ||||
Purchase price | $ 9,558 | |||
Bargain purchase gain | (9,821) | |||
Cash acquired | $ 100 | |||
Transaction and integration costs | $ 1,500 | |||
Sunrise | Client relationships | ||||
Business Acquisition [Line Items] | ||||
Weighted average useful life | 15 years |
BUSINESS ACQUISITIONS AND DIVESTITURE - Sunrise, Purchase Price Allocation (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
May 05, 2015 |
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Business Acquisition [Line Items] | ||||
Bargain purchase gain | $ (277) | $ 16 | $ (9,837) | |
Sunrise | ||||
Business Acquisition [Line Items] | ||||
Acquired receivables, contractual amount | $ 995 | |||
Trade receivables | 965 | |||
Inventories | 1,518 | |||
Other current assets (excluding cash) | 973 | |||
Property, plant and equipment | 13,698 | |||
Definite-lived intangible assets | 3,400 | |||
Current liabilities | (925) | |||
Long-term liabilities | (250) | |||
Total purchase price allocation | 19,379 | |||
Bargain purchase gain | (9,821) | |||
Purchase price allocation | $ 9,558 |
SUPPLEMENTAL BALANCE SHEET INFORMATION - Composition of Trade Receivables, Net (Details) - USD ($) $ in Thousands |
Dec. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Supplemental Balance Sheet Information [Abstract] | ||
Client receivables | $ 335,839 | $ 283,997 |
Unbilled revenue | 96,297 | 82,203 |
Total | 432,136 | 366,200 |
Less: Allowance for doubtful accounts | (2,120) | (2,150) |
Trade receivables, net | $ 430,016 | $ 364,050 |
SUPPLEMENTAL BALANCE SHEET INFORMATION - Additional Information (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Allowance for doubtful accounts | $ (0.9) | $ 1.8 | |
Recoveries to the allowance for doubtful accounts | $ 0.5 | ||
Depreciation | $ 89.8 | $ 85.0 | $ 70.7 |
SUPPLEMENTAL BALANCE SHEET INFORMATION - Composition of Inventories (Details) - USD ($) $ in Thousands |
Dec. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Supplemental Balance Sheet Information [Abstract] | ||
Raw materials and supplies | $ 19,858 | $ 18,893 |
Work in process | 18,200 | 13,681 |
Finished products | 76,898 | 63,259 |
Inventories | $ 114,956 | $ 95,833 |
SUPPLEMENTAL BALANCE SHEET INFORMATION - Composition of Other Current Assets (Details) - USD ($) $ in Thousands |
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
---|---|---|---|
Supplemental Balance Sheet Information [Abstract] | |||
Investments | $ 28,489 | $ 3,771 | |
Prepaid income tax | 52,234 | 40,705 | |
Restricted cash | 592 | 532 | $ 271 |
Other current assets | $ 81,315 | $ 45,008 |
SUPPLEMENTAL BALANCE SHEET INFORMATION - Composition of Other Assets (Details) - USD ($) $ in Thousands |
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
---|---|---|---|
Supplemental Balance Sheet Information [Abstract] | |||
Life insurance policies | $ 34,008 | $ 29,456 | |
Venture capital investments | 71,101 | 45,331 | |
Restricted cash | 1,945 | 1,736 | $ 1,745 |
Other | 16,948 | 11,907 | |
Other assets | $ 124,002 | $ 88,430 |
SUPPLEMENTAL BALANCE SHEET INFORMATION - Composition of Other Current Liabilities (Details) - USD ($) $ in Thousands |
Dec. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Supplemental Balance Sheet Information [Abstract] | ||
Accrued income taxes | $ 43,250 | $ 25,621 |
Other | 1,210 | 879 |
Other current liabilities | $ 44,460 | $ 26,500 |
SUPPLEMENTAL BALANCE SHEET INFORMATION - Composition of Other Long-Term Liabilities (Details) - USD ($) $ in Thousands |
Dec. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Supplemental Balance Sheet Information [Abstract] | ||
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Transition Tax for Accumulated Foreign Earnings, Provisional Liability, Noncurrent | $ 61,038 | $ 0 |
Long-term pension liability | 52,364 | 89,984 |
Accrued executive supplemental life insurance retirement plan and deferred compensation plan | 37,582 | 32,880 |
Other | 43,831 | 36,375 |
Other long-term liabilities | $ 194,815 | $ 159,239 |
VENTURE CAPITAL INVESTMENTS AND MARKETABLE SECURITIES - Additional Information (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Marketable Securities and Equity-Method Affiliates [Abstract] | |||
Gains related to venture capital investments | $ 22,867,000 | $ 10,284,000 | $ 3,823,000 |
Total commitment | 88,200,000 | ||
Venture capital investments | 51,200,000 | ||
Dividends received | 10,100,000 | 7,100,000 | $ 7,300,000 |
Consolidated retained earnings (accumulated deficit) | 12,100,000 | 4,400,000 | |
Marketable securities | $ 0 | 0 | |
Sales of available for sale securities | $ 4,600,000 |
FAIR VALUE - Additional Information (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
|
Fair Value Disclosures [Abstract] | ||
Transfers between fair value levels | $ 0 | $ 0 |
FAIR VALUE - Rollforward of Contingent Consideration (Details) - Contingent Consideration - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 3,621 | $ 1,370 |
Additions | 296 | 3,600 |
Payments | (3,606) | (872) |
Total gains or losses (realized/unrealized): | ||
Reversal of previously recorded contingent liability and change in fair value | (13) | (477) |
Ending balance | $ 298 | $ 3,621 |
GOODWILL AND INTANGIBLE ASSETS - Additional Information (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Goodwill impairment | $ 0 | $ 0 | $ 0 |
Impairment charge | 1,900,000 | ||
Amortization of intangible assets | 41,370,000 | $ 41,699,000 | $ 24,229,000 |
Client relationships | Disposal Group, Disposed of by Sale, Not Discontinued Operations | CDMO Business | |||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Decrease in intangible assets resulting from divestiture of business | 16,800,000 | ||
Backlog | Disposal Group, Disposed of by Sale, Not Discontinued Operations | CDMO Business | |||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Decrease in intangible assets resulting from divestiture of business | $ 300,000 |
GOODWILL AND INTANGIBLE ASSETS - Estimated Amortization Expense for Intangible Assets for Next Five Fiscal Years (Details) $ in Thousands |
Dec. 30, 2017
USD ($)
|
---|---|
Estimated amortization expense for each of the next five fiscal years | |
2018 | $ 38,262 |
2019 | 34,087 |
2020 | 33,036 |
2021 | 31,361 |
2022 | $ 30,801 |
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS - Long-term Debt, Net (Details) - USD ($) $ in Thousands |
Dec. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Total debt | $ 1,120,539 | $ 1,212,694 |
Less: Current portion of long-term debt | (28,546) | (24,560) |
Long-term debt | 1,091,993 | 1,188,134 |
Debt discount and debt issuance costs | (5,770) | (7,633) |
Long-term debt, net | 1,086,223 | 1,180,501 |
Term loans | ||
Debt Instrument [Line Items] | ||
Total debt | 601,250 | 633,750 |
Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Total debt | 500,997 | 578,759 |
Other long-term debt | ||
Debt Instrument [Line Items] | ||
Total debt | $ 18,292 | $ 185 |
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS - Principal Maturities of Long Term Debt (Details) $ in Thousands |
Dec. 30, 2017
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
2018 | $ 28,545 |
2019 | 52,813 |
2020 | 81,250 |
2021 | 939,747 |
Total debt | 1,102,355 |
Other long-term debt | |
Debt Instrument [Line Items] | |
Total debt | $ 18,200 |
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS - Future Minimum Lease Payments Under Capital Lease Payments (Details) $ in Thousands |
Dec. 30, 2017
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2018 | $ 3,618 |
2019 | 3,229 |
2020 | 2,969 |
2021 | 2,757 |
2022 | 2,362 |
Thereafter | 28,281 |
Total | $ 43,216 |
EQUITY AND NONCONTROLLING INTERESTS - Reconciliation of Numerator and Denominator in the Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Numerator: | |||
Income from continuing operations, net of income taxes | $ 125,586 | $ 156,086 | $ 152,037 |
Income (loss) from discontinued operations, net of income taxes | (137) | 280 | (950) |
Less: Net income attributable to noncontrolling interests | 2,094 | 1,601 | 1,774 |
Net income attributable to common shareholders | $ 123,355 | $ 154,765 | $ 149,313 |
Denominator: | |||
Weighted-average shares outstanding—Basic (in shares) | 47,481 | 47,014 | 46,496 |
Effect of dilutive securities: | |||
Stock options, restricted stock units, performance share units and restricted stock (in shares) | 1,083 | 944 | 1,138 |
Weighted-average shares outstanding—Diluted (in shares) | 48,564 | 47,958 | 47,634 |
EQUITY AND NONCONTROLLING INTERESTS - Earnings Per Share, Additional Information (Details) - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Weighted-average shares outstanding—Diluted (in shares) | 48,564 | 47,958 | 47,634 |
Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 600 | 800 | 500 |
Restricted Stock, Restricted Stock Units, and PSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Weighted-average shares outstanding—Diluted (in shares) | 1,100 | 1,100 | 1,100 |
EQUITY AND NONCONTROLLING INTERESTS - Nonredeemable Noncontrolling Interest, Additional Information (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 26, 2015 |
---|---|---|
Equity [Abstract] | ||
Nonredeemable noncontrolling interest | $ (2.1) | $ 0.8 |
EQUITY AND NONCONTROLLING INTERESTS - Redeemable Noncontrolling Interest, Additional Information (Details) - USD ($) $ in Millions |
1 Months Ended | |||
---|---|---|---|---|
Jul. 07, 2016 |
Jan. 31, 2013 |
Dec. 30, 2017 |
Dec. 31, 2016 |
|
Schedule of Investments [Line Items] | ||||
Redeemable noncontrolling interest, contractually defined redemption value | $ 15.8 | |||
Vital River | ||||
Schedule of Investments [Line Items] | ||||
Ownership interest | 12.00% | 75.00% | 87.00% | 12.00% |
Remaining noncontrolling equity interest | 25.00% | 13.00% | 13.00% | |
Purchase price of additional equity interest | $ 10.8 | |||
Gain in equity equal to the excess fair value of additional equity interest purchased | 1.6 | |||
Charge in other income, net equal to the excess fair value of the hybrid equity instrument | $ 1.5 | |||
Vital River | ||||
Schedule of Investments [Line Items] | ||||
Purchase price | $ 24.2 | |||
Cash acquired | $ 2.7 |
EQUITY AND NONCONTROLLING INTERESTS - Rollforward of Redeemable Noncontrolling Interest (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Dec. 31, 2016 |
Jul. 07, 2016 |
Dec. 30, 2017 |
|
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Beginning balance | $ 25,985 | $ 28,008 | $ 14,659 |
Purchase of 12% equity interest | (12,360) | 0 | |
Foreign currency translation | (818) | (653) | 1,034 |
Change in fair value, included in additional paid-in capital | (1,690) | ||
Ending balance | 14,659 | 25,985 | 16,609 |
Net Income Attributable to Noncontrolling Interest | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Net income attributable to noncontrolling interest | 357 | $ 320 | 916 |
Other Income (Expense) | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Net income attributable to noncontrolling interest | $ 1,495 | $ 0 |
INCOME TAXES - Components of Income from Continuing Operations Before Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Income from continuing operations before income taxes: | |||
U.S. | $ 123,896 | $ 59,255 | $ 76,157 |
Non-U.S. | 173,059 | 163,666 | 119,271 |
Income from continuing operations, before income taxes | 296,955 | 222,921 | 195,428 |
Current: | |||
Federal | 93,871 | 18,592 | 23,687 |
Foreign | 37,150 | 39,829 | 8,572 |
State | 12,361 | 5,263 | 6,819 |
Total current | 143,382 | 63,684 | 39,078 |
Deferred: | |||
Federal | 9,416 | 7,206 | 1,790 |
Foreign | 14,953 | (4,024) | 3,064 |
State | 3,618 | (31) | (541) |
Total deferred | 27,987 | 3,151 | 4,313 |
Provision for income taxes | $ 171,369 | $ 66,835 | $ 43,391 |
INCOME TAXES - Deferred Taxes (Details) - USD ($) $ in Thousands |
Dec. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Deferred tax assets: | ||
Compensation | $ 40,788 | $ 70,863 |
Accruals and reserves | 8,248 | 8,103 |
Inventory reserves and valuations | 2,135 | 3,447 |
Net operating loss and credit carryforwards | 33,160 | 58,081 |
Other | 7,661 | 8,141 |
Valuation allowance | (10,591) | (10,101) |
Total deferred tax assets | 81,401 | 138,534 |
Deferred tax liabilities: | ||
Goodwill and other intangibles | (89,636) | (121,256) |
Financing related | (429) | (854) |
Depreciation related | (23,763) | (32,271) |
Venture capital investments | (7,796) | (5,084) |
Tax on unremitted earnings | (19,204) | (821) |
Other | (7,459) | (5,220) |
Total deferred tax liabilities | (148,287) | (165,506) |
Net deferred taxes | $ (66,886) | $ (26,972) |
INCOME TAXES - Reconciliation of US Statutory Tax Rate and Effective Tax Rate (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Income Tax Disclosure [Abstract] | |||
U.S. statutory income tax rate | 35.00% | 35.00% | 35.00% |
Foreign tax rate differences | (6.80%) | (10.30%) | (8.60%) |
State income taxes, net of federal tax benefit | 2.00% | 1.60% | 1.90% |
Research tax credits and enhanced deductions | (2.40%) | (3.50%) | (2.60%) |
Stock-based compensation | (3.20%) | (0.00%) | (0.00%) |
Enacted tax rate changes | (4.20%) | (0.80%) | (1.50%) |
Transition Tax | 24.80% | 0.00% | 0.00% |
Impact of tax uncertainties | (0.40%) | 0.20% | (5.20%) |
Tax on unremitted earnings | 7.30% | 2.00% | 3.40% |
Impact of acquisitions and restructuring | 3.80% | 1.80% | (2.00%) |
Other | 1.80% | 4.00% | 1.80% |
Effective income tax rate | 57.70% | 30.00% | 22.20% |
INCOME TAXES - Change in Tax Positions (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Reconciliation of Unrecognized Tax Benefits | |||
Beginning balance | $ 24,186 | $ 23,338 | $ 34,627 |
Additions to tax positions for current year | 1,791 | 2,194 | 2,362 |
Additions to tax positions for prior years | 1,428 | 2,035 | 3,028 |
Reductions to tax positions for prior years | 0 | (1,866) | (3,991) |
Settlements | (1,754) | (918) | (1,946) |
Expiration of statute of limitations | (941) | (597) | (10,742) |
Ending balance | $ 24,710 | $ 24,186 | $ 23,338 |
EMPLOYEE BENEFIT PLANS - Amounts Recognized in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands |
Dec. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Amounts recognized in accumulated other comprehensive income (loss) | ||
Net actuarial loss | $ 94,705 | $ 123,743 |
Net prior service cost (credit) | (3,203) | (3,300) |
Net amount recognized | $ 91,502 | $ 120,443 |
EMPLOYEE BENEFIT PLANS - Accumulated Benefit Obligation and Fair Value of Plan Assets for Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets (Details) - USD ($) $ in Thousands |
Dec. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Plans with Accumulated Benefit Obligations in Excess of Plan Assets | ||
Accumulated benefit obligation | $ 359,965 | $ 346,122 |
Fair value of plan assets | $ 285,609 | $ 242,172 |
EMPLOYEE BENEFIT PLANS - Projected Benefit Obligation and Fair Value of Plan Assets for Pension Plans with Projected Benefit Obligations in Excess of Plan Assets (Details) - USD ($) $ in Thousands |
Dec. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Retirement Benefits [Abstract] | ||
Projected benefit obligation | $ 381,960 | $ 379,942 |
Fair value of plan assets | $ 292,152 | $ 256,903 |
EMPLOYEE BENEFIT PLANS - Amounts in Accumulated Other Comprehensive Income Expected to be Recognized as Components of Net Periodic Benefit Cost Over the Next Fiscal Year (Details) $ in Thousands |
Dec. 30, 2017
USD ($)
|
---|---|
Retirement Benefits [Abstract] | |
Amortization of net actuarial loss | $ 3,007 |
Amortization of net prior service credit | $ (521) |
EMPLOYEE BENEFIT PLANS - Components of Net Period Benefit Cost (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Retirement Benefits [Abstract] | |||
Service cost | $ 3,110 | $ 2,453 | $ 4,293 |
Interest cost | 11,642 | 12,046 | 12,974 |
Expected return on plan assets | (14,249) | (14,164) | (16,987) |
Amortization of prior service cost (credit) | (496) | (292) | (581) |
Amortization of net loss (gain) | 3,845 | 2,003 | 3,198 |
Curtailment | 0 | (279) | 0 |
Settlements | 0 | 788 | 0 |
Net periodic cost (benefit) | $ 3,852 | $ 2,555 | $ 2,897 |
EMPLOYEE BENEFIT PLANS - Weighted-average Assumptions (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Weighted-average assumptions used to determine projected benefit obligations | |||
Discount rate | 2.82% | 3.01% | |
Rate of compensation increase | 3.16% | 3.25% | |
Weighted-average assumptions used to determine net periodic benefit cost | |||
Discount rate | 3.01% | 3.89% | 3.75% |
Expected long-term return on plan assets | 5.41% | 5.83% | 6.24% |
Rate of compensation increase | 3.25% | 3.17% | 3.18% |
EMPLOYEE BENEFIT PLANS - Estimated Future Benefit Payments (Details) - Pension Plans $ in Thousands |
Dec. 30, 2017
USD ($)
|
---|---|
Defined Benefit Plan Disclosure [Line Items] | |
2018 | $ 8,905 |
2019 | 9,181 |
2020 | 9,623 |
2021 | 33,623 |
2022 | 10,243 |
Thereafter | $ 68,838 |
STOCK-BASED COMPENSATION - Financial Statement Line Items in Which Stock-Based Compensation is Located (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation, before income taxes | $ 44,003 | $ 43,642 | $ 40,122 |
Provision for income taxes | (13,428) | (15,548) | (14,225) |
Stock-based compensation, net of income taxes | 30,575 | 28,094 | 25,897 |
Cost of revenue (excluding amortization of intangible assets) | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation, before income taxes | 6,509 | 6,508 | 6,511 |
Selling, general and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation, before income taxes | $ 37,494 | $ 37,134 | $ 33,611 |
STOCK-BASED COMPENSATION - Stock Options, Weighted Average Assumptions (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Expected life (in years) | 3 years 7 months 12 days | 3 years 7 months 12 days | 3 years 7 months 12 days |
Expected volatility | 24.00% | 25.00% | 28.00% |
Risk-free interest rate | 1.60% | 1.20% | 1.10% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
STOCK-BASED COMPENSATION - Restricted Stock and Restricted Stock Units Activity (Details) - 2007 Incentive Plan - Restricted Stock and Restricted Stock Units shares in Thousands |
12 Months Ended |
---|---|
Dec. 30, 2017
$ / shares
shares
| |
Restricted Stock and Restricted Stock Units | |
Balance at the beginning of the period (in shares) | shares | 515 |
Granted (in shares) | shares | 253 |
Vested (in shares) | shares | (223) |
Canceled (in shares) | shares | (31) |
Balance at the end of the period (in shares) | shares | 514 |
Weighted Average Grant Date Fair Value | |
Balance at the beginning of the period (in dollars per share) | $ / shares | $ 67.62 |
Granted (in dollars per share) | $ / shares | 88.86 |
Vested (in dollars per share) | $ / shares | 60.82 |
Canceled (in dollars per share) | $ / shares | 77.43 |
Balance at the end of the period (in dollars per share) | $ / shares | $ 80.45 |
STOCK-BASED COMPENSATION - Performance Based Stock Award Program (Details) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Key Assumptions: | |||
Expected volatility | 24.00% | 25.00% | 28.00% |
Risk-free interest rate | 1.60% | 1.20% | 1.10% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Trading day average stock price on grant date | 20 days | ||
PSU Grantee Group One | PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
PSUs granted (in shares) | 197,645 | 190,628 | 148,900 |
Key Assumptions: | |||
Expected volatility | 26.00% | 24.00% | 23.00% |
Risk-free interest rate | 1.34% | 0.91% | 0.96% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
20 trading day average stock price on grant date | 17.70% | (4.80%) | 20.60% |
PSU Grantee Group One | 2007 Incentive Plan | PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average per share fair value (in dollars per share) | $ 99.96 | $ 80.38 | $ 88.62 |
FOREIGN CURRENCY CONTRACTS - Gains (Losses) Recognized on Foreign Exchange Forward Contracts (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Other income, net | Foreign Exchange Contract | |||
Derivatives, Fair Value [Line Items] | |||
Gain (loss) recognized | $ 0 | $ 3,373 | $ (4,917) |
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense from operating leases | $ 26.3 | $ 21.8 | $ 23.4 |
Maximum insurance deductibles | 5.0 | ||
Unconditional purchase obligations | $ 90.3 |
COMMITMENTS AND CONTINGENCIES - Minimum Rental Commitments Under Non-Cancelable Leases (Details) $ in Thousands |
Dec. 30, 2017
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2018 | $ 25,361 |
2019 | 23,177 |
2020 | 20,725 |
2021 | 16,480 |
2022 | 13,203 |
Thereafter | 45,159 |
Total | $ 144,105 |
RESTRUCTURING AND ASSET IMPAIRMENTS - Severance and Retention Costs by Reportable Segment (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Segment Reporting Information [Line Items] | |||
Total severance and transition costs | $ 4,778 | $ 17,879 | $ 8,006 |
RMS | |||
Segment Reporting Information [Line Items] | |||
Total severance and transition costs | 18,145 | ||
Total reportable segments | RMS | |||
Segment Reporting Information [Line Items] | |||
Total severance and transition costs | 291 | 759 | 3,171 |
Total reportable segments | DSA | |||
Segment Reporting Information [Line Items] | |||
Total severance and transition costs | 1,604 | 17,114 | 1,068 |
Total reportable segments | Manufacturing | |||
Segment Reporting Information [Line Items] | |||
Total severance and transition costs | 2,883 | 6 | 1,639 |
Unallocated corporate | |||
Segment Reporting Information [Line Items] | |||
Total severance and transition costs | $ 0 | $ 0 | $ 2,128 |
RESTRUCTURING AND ASSET IMPAIRMENTS - Rollforward of Severance and Transition and Lease Obligation Liabilities (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Restructuring Reserve [Roll Forward] | |||
Beginning balance | $ 8,102 | $ 2,969 | $ 2,666 |
Expense | 4,278 | 13,070 | 6,173 |
Payments / utilization | (6,103) | (7,667) | (5,820) |
Foreign currency adjustments | 579 | (270) | (50) |
Ending balance | $ 6,856 | $ 8,102 | $ 2,969 |
SEGMENT AND GEOGRAPHIC INFORMATION - Financial Information by Reportable Business Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2017 |
Sep. 30, 2017 |
Jul. 01, 2017 |
Apr. 01, 2017 |
Dec. 31, 2016 |
Sep. 24, 2016 |
Jun. 25, 2016 |
Mar. 26, 2016 |
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Segment Reporting Information [Line Items] | |||||||||||
Revenue | $ 478,477 | $ 464,232 | $ 469,129 | $ 445,763 | $ 466,789 | $ 425,720 | $ 434,055 | $ 354,868 | $ 1,857,601 | $ 1,681,432 | $ 1,363,302 |
Operating income | $ 62,732 | $ 73,984 | $ 81,310 | $ 69,472 | $ 69,091 | $ 58,795 | $ 58,061 | $ 51,472 | 287,498 | 237,419 | 206,449 |
Depreciation and amortization | 131,159 | 126,658 | 94,881 | ||||||||
Capital expenditures | 82,431 | 55,288 | 63,252 | ||||||||
RMS | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 493,615 | 494,037 | 470,411 | ||||||||
Operating income | 114,712 | 136,365 | 120,973 | ||||||||
Depreciation and amortization | 19,627 | 20,853 | 22,526 | ||||||||
Capital expenditures | 20,879 | 11,642 | 17,398 | ||||||||
DSA | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 980,022 | 836,593 | 612,173 | ||||||||
Operating income | 184,063 | 138,157 | 121,981 | ||||||||
Depreciation and amortization | 79,355 | 71,816 | 46,812 | ||||||||
Capital expenditures | 36,616 | 27,493 | 30,333 | ||||||||
Manufacturing | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 383,964 | 350,802 | 280,718 | ||||||||
Operating income | 123,903 | 104,543 | 74,675 | ||||||||
Depreciation and amortization | 22,893 | 25,566 | 18,129 | ||||||||
Capital expenditures | $ 15,188 | $ 12,247 | $ 9,814 |
SEGMENT AND GEOGRAPHIC INFORMATION - Reconciliation of Segment Operating Income and Capital Expenditures (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2017 |
Sep. 30, 2017 |
Jul. 01, 2017 |
Apr. 01, 2017 |
Dec. 31, 2016 |
Sep. 24, 2016 |
Jun. 25, 2016 |
Mar. 26, 2016 |
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Segment Reporting Information [Line Items] | |||||||||||
Operating Income | $ 62,732 | $ 73,984 | $ 81,310 | $ 69,472 | $ 69,091 | $ 58,795 | $ 58,061 | $ 51,472 | $ 287,498 | $ 237,419 | $ 206,449 |
Capital expenditures | 82,431 | 55,288 | 63,252 | ||||||||
Total reportable segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Income | 422,678 | 379,065 | 317,629 | ||||||||
Capital expenditures | 72,683 | 51,382 | 57,545 | ||||||||
Unallocated corporate | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Income | (135,180) | (141,646) | (111,180) | ||||||||
Capital expenditures | $ 9,748 | $ 3,906 | $ 5,707 |
SEGMENT AND GEOGRAPHIC INFORMATION - Revenue by Product and Service Offering (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2017 |
Sep. 30, 2017 |
Jul. 01, 2017 |
Apr. 01, 2017 |
Dec. 31, 2016 |
Sep. 24, 2016 |
Jun. 25, 2016 |
Mar. 26, 2016 |
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | $ 478,477 | $ 464,232 | $ 469,129 | $ 445,763 | $ 466,789 | $ 425,720 | $ 434,055 | $ 354,868 | $ 1,857,601 | $ 1,681,432 | $ 1,363,302 |
RMS | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 493,615 | 494,037 | 470,411 | ||||||||
DSA | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 980,022 | 836,593 | 612,173 | ||||||||
Manufacturing | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | $ 383,964 | $ 350,802 | $ 280,718 |
SEGMENT AND GEOGRAPHIC INFORMATION - Unallocated Corporate Costs (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Segment Reporting Information [Line Items] | |||
Stock-based compensation, before income taxes | $ 44,003 | $ 43,642 | $ 40,122 |
Depreciation | 89,800 | 85,000 | 70,700 |
Unallocated corporate | |||
Segment Reporting Information [Line Items] | |||
Stock-based compensation, before income taxes | 27,114 | 27,272 | 25,751 |
Compensation, benefits, and other employee-related expenses | 49,100 | 39,189 | 33,026 |
External consulting and other service expenses | 22,224 | 23,421 | 15,418 |
Information technology | 11,997 | 13,233 | 8,400 |
Depreciation | 9,284 | 8,423 | 7,414 |
Acquisition and integration | 3,728 | 15,608 | 11,644 |
Other general unallocated corporate | 11,733 | 14,500 | 9,527 |
Total unallocated corporate expense | $ 135,180 | $ 141,646 | $ 111,180 |
SEGMENT AND GEOGRAPHIC INFORMATION - Revenue and Long-Lived Assets by Geographic Segment (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Segment Reporting Information [Line Items] | |||
Revenue | $ 1,857,601 | $ 1,681,432 | $ 1,363,302 |
Long-lived assets | 781,973 | 755,827 | 677,959 |
U.S. | |||
Segment Reporting Information [Line Items] | |||
Revenue | 959,263 | 850,422 | 659,466 |
Long-lived assets | 446,574 | 462,330 | 402,238 |
Europe | |||
Segment Reporting Information [Line Items] | |||
Revenue | 569,812 | 520,937 | 435,491 |
Long-lived assets | 203,911 | 177,423 | 159,445 |
Canada | |||
Segment Reporting Information [Line Items] | |||
Revenue | 200,343 | 194,210 | 172,349 |
Long-lived assets | 82,228 | 78,866 | 77,535 |
Asia Pacific | |||
Segment Reporting Information [Line Items] | |||
Revenue | 126,462 | 114,710 | 95,996 |
Long-lived assets | 49,020 | 37,111 | 38,741 |
Other | |||
Segment Reporting Information [Line Items] | |||
Revenue | 1,721 | 1,153 | 0 |
Long-lived assets | $ 240 | $ 97 | $ 0 |
SELECTED QUARTERLY FINANCIAL DATA (unaudited) - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 30, 2017 |
Sep. 30, 2017 |
Jul. 01, 2017 |
Apr. 01, 2017 |
Dec. 31, 2016 |
Sep. 24, 2016 |
Jun. 25, 2016 |
Mar. 26, 2016 |
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenue | $ 478,477 | $ 464,232 | $ 469,129 | $ 445,763 | $ 466,789 | $ 425,720 | $ 434,055 | $ 354,868 | $ 1,857,601 | $ 1,681,432 | $ 1,363,302 |
Gross profit | 167,749 | 177,204 | 185,662 | 171,699 | 179,881 | 156,270 | 169,747 | 140,768 | |||
Operating income | 62,732 | 73,984 | 81,310 | 69,472 | 69,091 | 58,795 | 58,061 | 51,472 | $ 287,498 | $ 237,419 | $ 206,449 |
Net income (loss) attributable to common shareholders | $ (29,849) | $ 52,474 | $ 53,952 | $ 46,778 | $ 44,680 | $ 37,735 | $ 35,207 | $ 37,143 | |||
Basic: | |||||||||||
Continuing operations attributable to common shareholders (in dollars per share) | $ (0.63) | $ 1.11 | $ 1.14 | $ 0.98 | $ 0.95 | $ 0.79 | $ 0.75 | $ 0.80 | $ 2.60 | $ 3.28 | $ 3.23 |
Discontinued operations (in dollars per share) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.01 | 0.00 | 0.00 | 0.00 | 0.01 | (0.02) |
Net income attributable to common shareholders (in dollars per share) | (0.63) | 1.11 | 1.13 | 0.98 | 0.95 | 0.80 | 0.75 | 0.80 | 2.60 | 3.29 | 3.21 |
Diluted: | |||||||||||
Continuing operations attributable to common shareholders (in dollars per share) | (0.63) | 1.09 | 1.12 | 0.97 | 0.93 | 0.78 | 0.73 | 0.78 | 2.54 | 3.22 | 3.15 |
Discontinued operations (in dollars per share) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.01 | 0.00 | 0.00 | 0.00 | 0.01 | (0.02) |
Net income attributable to common shareholders (in dollars per share) | $ (0.63) | $ 1.08 | $ 1.12 | $ 0.97 | $ 0.93 | $ 0.79 | $ 0.73 | $ 0.78 | $ 2.54 | $ 3.23 | $ 3.13 |
SUBSEQUENT EVENT (Details) - USD ($) |
Feb. 12, 2018 |
Mar. 30, 2016 |
Mar. 29, 2016 |
---|---|---|---|
Subsequent Event [Line Items] | |||
Credit facility | $ 1,650,000,000.00 | $ 1,300,000,000.0 | |
Bridge Loan | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Credit facility | $ 830,000,000 | ||
Scenario, Forecast | MPI Research | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Purchase price | 800,000,000 | ||
Minimum | MPI Research | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Termination fee payable | 48,000,000 | ||
Maximum | MPI Research | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Termination fee payable | $ 56,000,000 |
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