Industry Segment Information

6 Months Ended

Jul. 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 and six months ended July 2, 2017 reflect this new alignment of the Company's operating segments. Financial information in this report relating to the three and six months ended July 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 and six months ended July 3, 2016 has been retrospectively adjusted to reflect this change to the cost allocation methodology. Accordingly, for the three and six months ended July 3, 2016, operating income from continuing operations from the Discovery & Analytical Solutions segment decreased by $2.5 million and $6.2 million, respectively, 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						Six Months Ended
	July 2, 2017			July 3, 2016			July 2, 2017			July 3, 2016
	(In thousands)
Discovery & Analytical Solutions
Product revenue	$	227,290		$	236,513		$	442,450		$	455,919
Service revenue	155,838			144,991			302,438			282,032
Total revenue	383,128			381,504			744,888			737,951
Operating income from continuing operations	51,481			41,617			82,060			81,086
Diagnostics
Product revenue	127,711			120,462			246,265			225,409
Service revenue	36,123			34,276			69,924			70,898
Total revenue	163,834			154,738			316,189			296,307
Operating income from continuing operations	37,641			37,840			71,051			71,614
Corporate
Operating loss from continuing operations	(13,125		)	(13,191		)	(25,535		)	(25,857		)
Continuing Operations
Product revenue	355,001			356,975			688,715			681,328
Service revenue	191,961			179,267			372,362			352,930
Total revenue	546,962			536,242			1,061,077			1,034,258
Operating income from continuing operations	75,997			66,266			127,576			126,843
Interest and other expense, net (see Note 5)	5,205			5,393			16,801			16,479
Income from continuing operations before income taxes	$	70,792		$	60,873		$	110,775		$	110,364