Industry Segment Information

3 Months Ended

Apr. 02, 2017

Segment Reporting [Abstract]

Industry Segment Information

Industry Segment Information

The Company discloses information about its operating segments based on the way that management organizes the segments within the Company for making operating decisions and assessing financial performance. The Company evaluates the performance of its operating segments based on revenue and operating income. Intersegment revenue and transfers are not significant. The accounting policies of the operating segments are the same as those described in Note 1 to the audited consolidated financial statements in the 2016 Form 10-K.

Effective October 3, 2016, the Company realigned its businesses to better organize around customer requirements, positioning the Company to grow in attractive end markets and expand share with the Company's core product offerings. Diagnostics became a standalone operating segment and the Company formed a new operating segment, Discovery & Analytical Solutions. The results reported for the three months ended April 2, 2017 reflect this new alignment of the Company's operating segments. Financial information in this report relating to the three months ended April 3, 2016 has been retrospectively adjusted to reflect this change to the Company's operating segments.

The principal products and services of the Company's two operating segments are:

• Discovery & Analytical Solutions. Provides products and services targeted towards the environmental, industrial, food, life sciences research and laboratory services markets.

• Diagnostics. Develops diagnostics, tools and applications focused on clinically-oriented customers, especially within the reproductive health, emerging market diagnostics and applied genomics markets. The Diagnostics segment serves the diagnostics market.

The Company has included the expenses for its corporate headquarters, such as legal, tax, audit, human resources, information technology, and other management and compliance costs, as well as the activity related to the mark-to-market adjustment on postretirement benefit plans, as “Corporate” below. The Company has a process to allocate and recharge expenses to the reportable segments when these costs are administered or paid by the corporate headquarters based on the extent to which the segment benefited from the expenses. These amounts have been calculated in a consistent manner and are included in the Company’s calculations of segment results to internally plan and assess the performance of each segment for all purposes, including determining the compensation of the business leaders for each of the Company’s operating segments. During the first quarter of fiscal year 2017, the Company changed the manner in which certain shared functional costs are allocated to the operating segments. Segment financial information relating to the three months ended April 3, 2016 has been retrospectively adjusted to reflect this change to the cost allocation methodology. Accordingly, for the three months ended April 3, 2016, operating income from continuing operations from the Discovery & Analytical Solutions segment decreased by $3.7 million with a corresponding increase in operating income from continuing operations of the Diagnostics segment.

Revenue and operating income (loss) from continuing operations by operating segment are shown in the table below:

	Three Months Ended
	April 2, 2017			April 3, 2016
	(In thousands)
Discovery & Analytical Solutions
Product revenue	$	215,160		$	219,406
Service revenue	146,600			137,041
Total revenue	361,760			356,447
Operating income from continuing operations	30,579			39,469
Diagnostics
Product revenue	118,554			104,947
Service revenue	33,801			36,622
Total revenue	152,355			141,569
Operating income from continuing operations	33,410			33,774
Corporate
Operating loss from continuing operations	(12,410		)	(12,666		)
Continuing Operations
Product revenue	333,714			324,353
Service revenue	180,401			173,663
Total revenue	514,115			498,016
Operating income from continuing operations	51,579			60,577
Interest and other expense, net (see Note 5)	11,596			11,086
Income from continuing operations before income taxes	$	39,983		$	49,491