ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Massachusetts
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04-2052042
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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PART I. FINANCIAL INFORMATION
|
||
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Item 1.
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||
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||
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||
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Item 2.
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Item 3.
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Item 4.
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PART II. OTHER INFORMATION
|
|
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Item 1.
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||
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Item 1A.
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||
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Item 2.
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Item 6.
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||
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Item 1.
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Unaudited Financial Statements
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
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(In thousands, except per share data)
|
||||||||||||||
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
|
|
||||
Cost of product revenue
|
173,139
|
|
|
172,706
|
|
|
336,308
|
|
|
327,534
|
|
||||
Cost of service revenue
|
116,320
|
|
|
109,982
|
|
|
227,655
|
|
|
218,084
|
|
||||
Total cost of revenue
|
289,459
|
|
|
282,688
|
|
|
563,963
|
|
|
545,618
|
|
||||
Selling, general and administrative expenses
|
147,944
|
|
|
150,952
|
|
|
293,037
|
|
|
295,490
|
|
||||
Research and development expenses
|
33,562
|
|
|
31,868
|
|
|
66,850
|
|
|
61,839
|
|
||||
Restructuring and contract termination charges, net
|
—
|
|
|
4,468
|
|
|
9,651
|
|
|
4,468
|
|
||||
Operating income from continuing operations
|
75,997
|
|
|
66,266
|
|
|
127,576
|
|
|
126,843
|
|
||||
Interest and other expense, net
|
5,205
|
|
|
5,393
|
|
|
16,801
|
|
|
16,479
|
|
||||
Income from continuing operations before income taxes
|
70,792
|
|
|
60,873
|
|
|
110,775
|
|
|
110,364
|
|
||||
Provision for income taxes
|
8,066
|
|
|
3,117
|
|
|
11,987
|
|
|
10,864
|
|
||||
Income from continuing operations
|
62,726
|
|
|
57,756
|
|
|
98,788
|
|
|
99,500
|
|
||||
(Loss) income from discontinued operations before income taxes
|
(3,109
|
)
|
|
4,927
|
|
|
650
|
|
|
13,117
|
|
||||
Gain (loss) on disposition of discontinued operations before income taxes
|
180,377
|
|
|
(8
|
)
|
|
180,377
|
|
|
(11
|
)
|
||||
Provision for (benefit from) income taxes on discontinued operations and dispositions
|
35,925
|
|
|
(1,182
|
)
|
|
37,143
|
|
|
1,283
|
|
||||
Income from discontinued operations and dispositions
|
141,343
|
|
|
6,101
|
|
|
143,884
|
|
|
11,823
|
|
||||
Net income
|
$
|
204,069
|
|
|
$
|
63,857
|
|
|
$
|
242,672
|
|
|
$
|
111,323
|
|
Basic earnings per share:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
0.57
|
|
|
$
|
0.53
|
|
|
$
|
0.90
|
|
|
$
|
0.91
|
|
Income from discontinued operations and dispositions
|
1.29
|
|
|
0.06
|
|
|
1.31
|
|
|
0.11
|
|
||||
Net income
|
$
|
1.86
|
|
|
$
|
0.59
|
|
|
$
|
2.21
|
|
|
$
|
1.01
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
0.57
|
|
|
$
|
0.53
|
|
|
$
|
0.89
|
|
|
$
|
0.90
|
|
Income from discontinued operations and dispositions
|
1.28
|
|
|
0.06
|
|
|
1.30
|
|
|
0.11
|
|
||||
Net income
|
$
|
1.84
|
|
|
$
|
0.58
|
|
|
$
|
2.20
|
|
|
$
|
1.01
|
|
Weighted average shares of common stock outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
109,894
|
|
|
108,970
|
|
|
109,681
|
|
|
109,690
|
|
||||
Diluted
|
110,762
|
|
|
109,844
|
|
|
110,484
|
|
|
110,520
|
|
||||
Cash dividends declared per common share
|
$
|
0.07
|
|
|
$
|
0.07
|
|
|
$
|
0.14
|
|
|
$
|
0.14
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
|
(In thousands)
|
||||||||||||||
Net income
|
$
|
204,069
|
|
|
$
|
63,857
|
|
|
$
|
242,672
|
|
|
$
|
111,323
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
18,192
|
|
|
(30,994
|
)
|
|
37,400
|
|
|
573
|
|
||||
Unrealized gains on securities, net of tax
|
11
|
|
|
(2
|
)
|
|
34
|
|
|
30
|
|
||||
Other comprehensive income
|
18,203
|
|
|
(30,996
|
)
|
|
37,434
|
|
|
603
|
|
||||
Comprehensive income
|
$
|
222,272
|
|
|
$
|
32,861
|
|
|
$
|
280,106
|
|
|
$
|
111,926
|
|
|
July 2,
2017 |
|
January 1,
2017 |
||||
|
(In thousands, except share and per share data)
|
||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
616,308
|
|
|
$
|
359,265
|
|
Accounts receivable, net
|
440,412
|
|
|
425,588
|
|
||
Inventories
|
275,085
|
|
|
246,847
|
|
||
Other current assets
|
102,021
|
|
|
99,246
|
|
||
Current assets of discontinued operations
|
—
|
|
|
58,985
|
|
||
Total current assets
|
1,433,826
|
|
|
1,189,931
|
|
||
Property, plant and equipment:
|
|
|
|
||||
At cost
|
460,750
|
|
|
427,903
|
|
||
Accumulated depreciation
|
(306,594
|
)
|
|
(282,409
|
)
|
||
Property, plant and equipment, net
|
154,156
|
|
|
145,494
|
|
||
Intangible assets, net
|
453,059
|
|
|
420,224
|
|
||
Goodwill
|
2,356,690
|
|
|
2,247,966
|
|
||
Other assets, net
|
207,373
|
|
|
204,679
|
|
||
Long-term assets of discontinued operations
|
—
|
|
|
68,389
|
|
||
Total assets
|
$
|
4,605,104
|
|
|
$
|
4,276,683
|
|
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
2,225
|
|
|
$
|
1,172
|
|
Accounts payable
|
153,754
|
|
|
168,033
|
|
||
Accrued restructuring and contract termination charges
|
8,559
|
|
|
7,479
|
|
||
Accrued expenses and other current liabilities
|
418,477
|
|
|
399,700
|
|
||
Current liabilities of discontinued operations
|
6,373
|
|
|
26,971
|
|
||
Total current liabilities
|
589,388
|
|
|
603,355
|
|
||
Long-term debt
|
1,089,395
|
|
|
1,045,254
|
|
||
Long-term liabilities
|
487,685
|
|
|
459,544
|
|
||
Long-term liabilities of discontinued operations
|
—
|
|
|
14,960
|
|
||
Total liabilities
|
2,166,468
|
|
|
2,123,113
|
|
||
Commitments and contingencies (see Note 18)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock—$1 par value per share, authorized 1,000,000 shares; none issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock—$1 par value per share, authorized 300,000,000 shares; issued and outstanding 110,196,000 shares and 109,617,000 shares at July 2, 2017 and at January 1, 2017, respectively
|
110,196
|
|
|
109,617
|
|
||
Capital in excess of par value
|
45,881
|
|
|
26,130
|
|
||
Retained earnings
|
2,345,986
|
|
|
2,118,684
|
|
||
Accumulated other comprehensive loss
|
(63,427
|
)
|
|
(100,861
|
)
|
||
Total stockholders’ equity
|
2,438,636
|
|
|
2,153,570
|
|
||
Total liabilities and stockholders’ equity
|
$
|
4,605,104
|
|
|
$
|
4,276,683
|
|
|
Six Months Ended
|
||||||
|
July 2,
2017 |
|
July 3,
2016 |
||||
|
(In thousands)
|
||||||
Operating activities:
|
|
|
|
||||
Net income
|
$
|
242,672
|
|
|
$
|
111,323
|
|
Income from discontinued operations and dispositions, net of income taxes
|
(143,884
|
)
|
|
(11,823
|
)
|
||
Income from continuing operations
|
98,788
|
|
|
99,500
|
|
||
Adjustments to reconcile income from continuing operations to net cash provided by continuing operations:
|
|
|
|
||||
Restructuring and contract termination charges, net
|
9,651
|
|
|
4,468
|
|
||
Depreciation and amortization
|
49,505
|
|
|
50,241
|
|
||
Loss (gain) on disposition of businesses and assets, net
|
301
|
|
|
(5,562
|
)
|
||
Stock-based compensation
|
11,767
|
|
|
9,675
|
|
||
Change in fair value of contingent consideration
|
909
|
|
|
5,627
|
|
||
Amortization of deferred debt financing costs and accretion of discount
|
1,231
|
|
|
751
|
|
||
Amortization of acquired inventory revaluation
|
4,240
|
|
|
396
|
|
||
Changes in assets and liabilities which provided (used) cash, excluding effects from companies acquired:
|
|
|
|
||||
Accounts receivable, net
|
5,215
|
|
|
7,364
|
|
||
Inventories
|
(9,913
|
)
|
|
(10,608
|
)
|
||
Accounts payable
|
(20,855
|
)
|
|
717
|
|
||
Accrued expenses and other
|
(55,193
|
)
|
|
(55,134
|
)
|
||
Net cash provided by operating activities of continuing operations
|
95,646
|
|
|
107,435
|
|
||
Net cash provided by operating activities of discontinued operations
|
6,207
|
|
|
20,843
|
|
||
Net cash provided by operating activities
|
101,853
|
|
|
128,278
|
|
||
Investing activities:
|
|
|
|
||||
Capital expenditures
|
(11,473
|
)
|
|
(15,870
|
)
|
||
Proceeds from disposition of businesses
|
—
|
|
|
21,000
|
|
||
Proceeds from surrender of life insurance policies
|
45
|
|
|
44
|
|
||
Changes in restricted cash balances
|
17,203
|
|
|
(2,000
|
)
|
||
Activity related to acquisitions, net of cash and cash equivalents acquired
|
(123,578
|
)
|
|
(10,484
|
)
|
||
Net cash used in investing activities of continuing operations
|
(117,803
|
)
|
|
(7,310
|
)
|
||
Net cash provided by (used in) investing activities of discontinued operations
|
276,982
|
|
|
(450
|
)
|
||
Net cash provided by (used in) investing activities
|
159,179
|
|
|
(7,760
|
)
|
||
Financing activities:
|
|
|
|
||||
Payments on borrowings
|
(145,950
|
)
|
|
(195,000
|
)
|
||
Proceeds from borrowings
|
146,952
|
|
|
240,000
|
|
||
Settlement of cash flow hedges
|
(4,314
|
)
|
|
1,278
|
|
||
Net payments on other credit facilities
|
(577
|
)
|
|
(553
|
)
|
||
Payments for acquisition-related contingent consideration
|
(8,940
|
)
|
|
(99
|
)
|
||
Proceeds from issuance of common stock under stock plans
|
13,223
|
|
|
8,953
|
|
||
Purchases of common stock
|
(3,265
|
)
|
|
(151,351
|
)
|
||
Dividends paid
|
(15,363
|
)
|
|
(15,474
|
)
|
||
Net cash used in financing activities of continuing operations
|
(18,234
|
)
|
|
(112,246
|
)
|
||
Net cash used in financing activities of discontinued operations
|
(533
|
)
|
|
(193
|
)
|
||
Net cash used in financing activities
|
(18,767
|
)
|
|
(112,439
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
14,778
|
|
|
2,072
|
|
||
Net increase in cash and cash equivalents
|
257,043
|
|
|
10,151
|
|
||
Cash and cash equivalents at beginning of period
|
359,265
|
|
|
237,932
|
|
||
Cash and cash equivalents at end of period
|
$
|
616,308
|
|
|
$
|
248,083
|
|
|
2017 Acquisition
|
||
|
(In thousands)
|
||
Fair value of business combination:
|
|
||
Cash payments
|
$
|
126,007
|
|
Other liability
|
1,273
|
|
|
Less: cash acquired
|
(2,429
|
)
|
|
Total
|
$
|
124,851
|
|
Identifiable assets acquired and liabilities assumed:
|
|
||
Current assets
|
$
|
15,825
|
|
Property, plant and equipment
|
9,643
|
|
|
Other assets
|
1,084
|
|
|
Identifiable intangible assets:
|
|
||
Core technology
|
3,500
|
|
|
Trade names
|
3,000
|
|
|
Customer relationships
|
43,000
|
|
|
Goodwill
|
72,454
|
|
|
Deferred taxes
|
(15,414
|
)
|
|
Liabilities assumed
|
(8,241
|
)
|
|
Total
|
$
|
124,851
|
|
|
2016 Acquisitions
|
||
|
(In thousands)
|
||
Fair value of business combination:
|
|
||
Cash payments
|
$
|
72,497
|
|
Working capital and other adjustments
|
(261
|
)
|
|
Less: cash acquired
|
(2,152
|
)
|
|
Total
|
$
|
70,084
|
|
Identifiable assets acquired and liabilities assumed:
|
|
||
Current assets
|
$
|
7,153
|
|
Property, plant and equipment
|
7,542
|
|
|
Identifiable intangible assets:
|
|
||
Core technology
|
6,600
|
|
|
Trade names
|
570
|
|
|
Customer relationships
|
14,900
|
|
|
Goodwill
|
43,588
|
|
|
Deferred taxes
|
(8,284
|
)
|
|
Liabilities assumed
|
(1,985
|
)
|
|
Total
|
$
|
70,084
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
|
(In thousands)
|
||||||||||||||
Revenue
|
$
|
8,249
|
|
|
$
|
36,458
|
|
|
$
|
44,343
|
|
|
$
|
77,224
|
|
Cost of revenue
|
8,138
|
|
|
24,729
|
|
|
32,933
|
|
|
50,484
|
|
||||
Selling, general and administrative expenses
|
1,926
|
|
|
3,042
|
|
|
5,869
|
|
|
6,049
|
|
||||
Research and development expenses
|
1,294
|
|
|
3,139
|
|
|
4,891
|
|
|
6,953
|
|
||||
Restructuring and contract termination charges, net
|
—
|
|
|
621
|
|
|
—
|
|
|
621
|
|
||||
(Loss) income from discontinued operations before income taxes
|
$
|
(3,109
|
)
|
|
$
|
4,927
|
|
|
$
|
650
|
|
|
$
|
13,117
|
|
|
July 2,
2017 |
|
January 1,
2017 |
||||
|
(In thousands)
|
||||||
Current assets of discontinued operations:
|
|
|
|
||||
Accounts receivable
|
$
|
—
|
|
|
$
|
28,400
|
|
Inventories
|
—
|
|
|
26,977
|
|
||
Prepaid income taxes
|
—
|
|
|
425
|
|
||
Other current assets
|
—
|
|
|
3,183
|
|
||
Total current assets of discontinued operations
|
—
|
|
|
58,985
|
|
||
Property, plant and equipment, net
|
—
|
|
|
25,219
|
|
||
Intangible assets
|
—
|
|
|
3,292
|
|
||
Goodwill
|
—
|
|
|
38,794
|
|
||
Other assets, net
|
—
|
|
|
1,084
|
|
||
Long-term assets of discontinued operations
|
—
|
|
|
68,389
|
|
||
Total assets of discontinued operations
|
$
|
—
|
|
|
$
|
127,374
|
|
|
|
|
|
||||
Current liabilities of discontinued operations:
|
|
|
|
||||
Accounts payable
|
$
|
—
|
|
|
$
|
16,770
|
|
Accrued restructuring and contract termination charges
|
—
|
|
|
209
|
|
||
Accrued expenses and other current liabilities
|
6,373
|
|
|
9,992
|
|
||
Total current liabilities of discontinued operations
|
6,373
|
|
|
26,971
|
|
||
Deferred income taxes
|
—
|
|
|
7,851
|
|
||
Long-term liabilities
|
—
|
|
|
7,109
|
|
||
Total long-term liabilities
|
—
|
|
|
14,960
|
|
||
Total liabilities of discontinued operations
|
$
|
6,373
|
|
|
$
|
41,931
|
|
|
Workforce Reductions
|
|
Closure of Excess Facility
|
|
Total
|
|
(Expected) Date Payments Substantially Completed by
|
||||||||||||||||||
|
Headcount Reduction
|
|
Discovery & Analytical Solutions
|
|
Diagnostics
|
|
Discovery & Analytical Solutions
|
|
Diagnostics
|
|
|
Severance
|
|
Excess Facility
|
|||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||
|
(In thousands, except headcount data)
|
|
|
|
|
||||||||||||||||||||
Q1 2017 Plan
|
90
|
|
$
|
5,000
|
|
|
$
|
1,631
|
|
|
$
|
33
|
|
|
$
|
33
|
|
|
$
|
6,697
|
|
|
Q2 FY2018
|
|
Q2 FY2018
|
Q3 2016 Plan
|
22
|
|
1,779
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
1,820
|
|
|
Q4 FY2017
|
|
—
|
|||||
Q2 2016 Plan
|
72
|
|
4,106
|
|
|
561
|
|
|
—
|
|
|
—
|
|
|
4,667
|
|
|
Q3 FY2017
|
|
—
|
|
Balance at January 1, 2017
|
|
2017 Charges
|
|
2017 Changes in Estimates, Net
|
|
2017 Amounts Paid
|
|
Balance at July 2, 2017
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Severance:
|
|
|
|
|
|
|
|
|
|
||||||||||
Q1 2017 Plan
|
$
|
—
|
|
|
$
|
6,631
|
|
|
$
|
—
|
|
|
$
|
(2,665
|
)
|
|
$
|
3,966
|
|
Q3 2016 Plan
|
1,208
|
|
|
—
|
|
|
—
|
|
|
(765
|
)
|
|
443
|
|
|||||
Q2 2016 Plan
|
1,436
|
|
|
—
|
|
|
—
|
|
|
(446
|
)
|
|
990
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Facility:
|
|
|
|
|
|
|
|
|
|
||||||||||
Q1 2017 Plan
|
—
|
|
|
66
|
|
|
—
|
|
|
(9
|
)
|
|
57
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Previous Plans
|
7,780
|
|
|
—
|
|
|
—
|
|
|
(2,063
|
)
|
|
5,717
|
|
|||||
Restructuring
|
10,424
|
|
|
6,697
|
|
|
—
|
|
|
(5,948
|
)
|
|
11,173
|
|
|||||
Contract Termination
|
117
|
|
|
2,909
|
|
|
45
|
|
|
(25
|
)
|
|
3,046
|
|
|||||
Total Restructuring and Contract Termination
|
$
|
10,541
|
|
|
$
|
9,606
|
|
|
$
|
45
|
|
|
$
|
(5,973
|
)
|
|
$
|
14,219
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
|
(In thousands)
|
||||||||||||||
Interest income
|
$
|
(490
|
)
|
|
$
|
(127
|
)
|
|
$
|
(710
|
)
|
|
$
|
(237
|
)
|
Interest expense
|
10,672
|
|
|
9,939
|
|
|
21,536
|
|
|
19,780
|
|
||||
Loss (gain) on disposition of businesses and assets, net
|
301
|
|
|
(5,562
|
)
|
|
301
|
|
|
(5,562
|
)
|
||||
Other (income) expense, net
|
(5,278
|
)
|
|
1,143
|
|
|
(4,326
|
)
|
|
2,498
|
|
||||
Total interest and other expense, net
|
$
|
5,205
|
|
|
$
|
5,393
|
|
|
$
|
16,801
|
|
|
$
|
16,479
|
|
|
July 2,
2017 |
|
January 1,
2017 |
||||
|
(In thousands)
|
||||||
Raw materials
|
$
|
94,210
|
|
|
$
|
79,189
|
|
Work in progress
|
8,155
|
|
|
6,561
|
|
||
Finished goods
|
172,720
|
|
|
161,097
|
|
||
Total inventories
|
$
|
275,085
|
|
|
$
|
246,847
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
|
(In thousands)
|
||||||||||||||
Continuing operations
|
$
|
8,066
|
|
|
$
|
3,117
|
|
|
$
|
11,987
|
|
|
$
|
10,864
|
|
Discontinued operations and dispositions
|
35,925
|
|
|
(1,182
|
)
|
|
37,143
|
|
|
1,283
|
|
||||
Total
|
$
|
43,991
|
|
|
$
|
1,935
|
|
|
$
|
49,130
|
|
|
$
|
12,147
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||
|
(In thousands)
|
||||||||||
Number of common shares—basic
|
109,894
|
|
|
108,970
|
|
|
109,681
|
|
|
109,690
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||
Stock options
|
668
|
|
|
688
|
|
|
636
|
|
|
675
|
|
Restricted stock awards
|
200
|
|
|
186
|
|
|
167
|
|
|
155
|
|
Number of common shares—diluted
|
110,762
|
|
|
109,844
|
|
|
110,484
|
|
|
110,520
|
|
Number of potentially dilutive securities excluded from calculation due to antidilutive impact
|
457
|
|
|
250
|
|
|
558
|
|
|
674
|
|
•
|
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.
|
|
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
|
|
|
July 2,
2017 |
|
January 1,
2017 |
||||
|
(In thousands)
|
||||||
Foreign currency translation adjustments
|
$
|
(63,523
|
)
|
|
$
|
(100,923
|
)
|
Unrecognized prior service costs, net of income taxes
|
399
|
|
|
399
|
|
||
Unrealized net losses on securities, net of income taxes
|
(303
|
)
|
|
(337
|
)
|
||
Accumulated other comprehensive loss
|
$
|
(63,427
|
)
|
|
$
|
(100,861
|
)
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
|
(In thousands)
|
||||||||||||||
Cost of revenue
|
$
|
281
|
|
|
$
|
304
|
|
|
$
|
541
|
|
|
$
|
494
|
|
Research and development expenses
|
377
|
|
|
231
|
|
|
704
|
|
|
400
|
|
||||
Selling, general and administrative expenses
|
6,183
|
|
|
5,294
|
|
|
10,522
|
|
|
8,781
|
|
||||
Total stock-based compensation expense
|
$
|
6,841
|
|
|
$
|
5,829
|
|
|
$
|
11,767
|
|
|
$
|
9,675
|
|
|
Three and Six Months Ended
|
||||
|
July 2,
2017 |
|
July 3,
2016 |
||
Risk-free interest rate
|
1.8
|
%
|
|
1.3
|
%
|
Expected dividend yield
|
0.5
|
%
|
|
0.6
|
%
|
Expected term
|
5 years
|
|
|
5 years
|
|
Expected stock volatility
|
22.4
|
%
|
|
25.2
|
%
|
|
Number
of
Shares
|
|
Weighted-
Average Exercise
Price
|
|
Weighted-Average
Remaining
Contractual Term
|
|
Total
Intrinsic
Value
|
|||||
|
(In thousands)
|
|
|
|
(In years)
|
|
(In millions)
|
|||||
Outstanding at January 1, 2017
|
2,287
|
|
|
$
|
37.64
|
|
|
|
|
|
||
Granted
|
451
|
|
|
53.54
|
|
|
|
|
|
|||
Exercised
|
(432
|
)
|
|
30.64
|
|
|
|
|
|
|||
Forfeited
|
(6
|
)
|
|
50.48
|
|
|
|
|
|
|||
Outstanding at July 2, 2017
|
2,300
|
|
|
$
|
42.04
|
|
|
4.3
|
|
$
|
46.2
|
|
Exercisable at July 2, 2017
|
1,359
|
|
|
$
|
37.09
|
|
|
3.2
|
|
$
|
34.0
|
|
|
Number of
Shares
|
|
Weighted-
Average
Grant-
Date Fair
Value
|
|||
|
(In thousands)
|
|
|
|||
Nonvested at January 1, 2017
|
521
|
|
|
$
|
46.48
|
|
Granted
|
217
|
|
|
53.92
|
|
|
Vested
|
(204
|
)
|
|
45.57
|
|
|
Forfeited
|
(15
|
)
|
|
49.00
|
|
|
Nonvested at July 2, 2017
|
519
|
|
|
$
|
49.87
|
|
|
Discovery & Analytical Solutions
|
|
Diagnostics
|
|
Consolidated
|
||||||
|
(In thousands)
|
||||||||||
Balance at January 1, 2017
|
$
|
1,303,936
|
|
|
$
|
944,030
|
|
|
$
|
2,247,966
|
|
Foreign currency translation
|
21,771
|
|
|
16,699
|
|
|
38,470
|
|
|||
Acquisitions and other
|
(1,800
|
)
|
|
72,054
|
|
|
70,254
|
|
|||
Balance at July 2, 2017
|
$
|
1,323,907
|
|
|
$
|
1,032,783
|
|
|
$
|
2,356,690
|
|
|
July 2,
2017 |
|
January 1,
2017 |
||||
|
(In thousands)
|
||||||
Patents
|
$
|
39,930
|
|
|
$
|
39,901
|
|
Less: Accumulated amortization
|
(33,758
|
)
|
|
(32,408
|
)
|
||
Net patents
|
6,172
|
|
|
7,493
|
|
||
Trade names and trademarks
|
43,900
|
|
|
40,086
|
|
||
Less: Accumulated amortization
|
(26,135
|
)
|
|
(24,017
|
)
|
||
Net trade names and trademarks
|
17,765
|
|
|
16,069
|
|
||
Licenses
|
50,983
|
|
|
57,767
|
|
||
Less: Accumulated amortization
|
(41,111
|
)
|
|
(46,507
|
)
|
||
Net licenses
|
9,872
|
|
|
11,260
|
|
||
Core technology
|
295,956
|
|
|
304,187
|
|
||
Less: Accumulated amortization
|
(229,848
|
)
|
|
(233,720
|
)
|
||
Net core technology
|
66,108
|
|
|
70,467
|
|
||
Customer relationships
|
422,291
|
|
|
383,303
|
|
||
Less: Accumulated amortization
|
(219,052
|
)
|
|
(213,062
|
)
|
||
Net customer relationships
|
203,239
|
|
|
170,241
|
|
||
IPR&D
|
84,252
|
|
|
78,515
|
|
||
Less: Accumulated amortization
|
(4,933
|
)
|
|
(4,405
|
)
|
||
Net IPR&D
|
79,319
|
|
|
74,110
|
|
||
Net amortizable intangible assets
|
382,475
|
|
|
349,640
|
|
||
Non-amortizing intangible assets:
|
|
|
|
||||
Trade name
|
70,584
|
|
|
70,584
|
|
||
Total
|
$
|
453,059
|
|
|
$
|
420,224
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
|
(In thousands)
|
||||||||||||||
Balance at beginning of period
|
$
|
8,937
|
|
|
$
|
9,751
|
|
|
$
|
9,012
|
|
|
$
|
9,843
|
|
Provision charged to income
|
3,391
|
|
|
3,793
|
|
|
6,380
|
|
|
7,452
|
|
||||
Payments
|
(3,412
|
)
|
|
(3,699
|
)
|
|
(7,137
|
)
|
|
(7,614
|
)
|
||||
Adjustments to previously provided warranties, net
|
(24
|
)
|
|
(182
|
)
|
|
515
|
|
|
(249
|
)
|
||||
Foreign currency translation and acquisitions
|
196
|
|
|
(67
|
)
|
|
318
|
|
|
164
|
|
||||
Balance at end of period
|
$
|
9,088
|
|
|
$
|
9,596
|
|
|
$
|
9,088
|
|
|
$
|
9,596
|
|
|
Defined Benefit
Pension Benefits
|
|
Postretirement
Medical Benefits
|
||||||||||||
|
Three Months Ended
|
||||||||||||||
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
|
(In thousands)
|
||||||||||||||
Service cost
|
$
|
1,222
|
|
|
$
|
1,096
|
|
|
$
|
23
|
|
|
$
|
25
|
|
Interest cost
|
4,133
|
|
|
4,727
|
|
|
31
|
|
|
36
|
|
||||
Expected return on plan assets
|
(6,541
|
)
|
|
(6,174
|
)
|
|
(278
|
)
|
|
(259
|
)
|
||||
Amortization of prior service costs
|
(48
|
)
|
|
(55
|
)
|
|
—
|
|
|
—
|
|
||||
Net periodic pension credit
|
$
|
(1,234
|
)
|
|
$
|
(406
|
)
|
|
$
|
(224
|
)
|
|
$
|
(198
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
Defined Benefit
Pension Benefits
|
|
Postretirement
Medical Benefits
|
||||||||||||
|
Six Months Ended
|
||||||||||||||
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
|
(In thousands)
|
||||||||||||||
Service cost
|
$
|
2,436
|
|
|
$
|
2,188
|
|
|
$
|
46
|
|
|
$
|
50
|
|
Interest cost
|
8,260
|
|
|
9,457
|
|
|
62
|
|
|
72
|
|
||||
Expected return on plan assets
|
(13,041
|
)
|
|
(12,362
|
)
|
|
(557
|
)
|
|
(518
|
)
|
||||
Amortization of prior service costs
|
(95
|
)
|
|
(109
|
)
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit credit
|
$
|
(2,440
|
)
|
|
$
|
(826
|
)
|
|
$
|
(449
|
)
|
|
$
|
(396
|
)
|
|
|
|
Fair Value Measurements at July 2, 2017 Using:
|
||||||||||||
|
Total Carrying Value at July 2, 2017
|
|
Quoted Prices in
Active Markets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
|
(In thousands)
|
||||||||||||||
Marketable securities
|
$
|
1,893
|
|
|
$
|
1,893
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange derivative assets
|
7,057
|
|
|
—
|
|
|
7,057
|
|
|
—
|
|
||||
Foreign exchange derivative liabilities
|
(1,946
|
)
|
|
—
|
|
|
(1,946
|
)
|
|
—
|
|
||||
Contingent consideration
|
(64,076
|
)
|
|
—
|
|
|
—
|
|
|
(64,076
|
)
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
|
(In thousands)
|
||||||||||||||
Balance at beginning of period
|
$
|
(63,978
|
)
|
|
$
|
(58,579
|
)
|
|
$
|
(63,201
|
)
|
|
$
|
(57,350
|
)
|
Amounts paid and foreign currency translation
|
—
|
|
|
6
|
|
|
34
|
|
|
100
|
|
||||
Change in fair value (included within selling, general and administrative expenses)
|
(98
|
)
|
|
(4,305
|
)
|
|
(909
|
)
|
|
(5,628
|
)
|
||||
Balance at end of period
|
$
|
(64,076
|
)
|
|
$
|
(62,878
|
)
|
|
$
|
(64,076
|
)
|
|
$
|
(62,878
|
)
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
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.
|
|
Workforce Reductions
|
|
Closure of Excess Facility
|
|
Total
|
|
(Expected) Date Payments Substantially Completed by
|
||||||||||||||||||
|
Headcount Reduction
|
|
Discovery & Analytical Solutions
|
|
Diagnostics
|
|
Discovery & Analytical Solutions
|
|
Diagnostics
|
|
|
Severance
|
|
Excess Facility
|
|||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||
|
(In thousands, except headcount data)
|
|
|
|
|
||||||||||||||||||||
Q1 2017 Plan
|
90
|
|
$
|
5,000
|
|
|
$
|
1,631
|
|
|
$
|
33
|
|
|
$
|
33
|
|
|
$
|
6,697
|
|
|
Q2 FY2018
|
|
Q2 FY2018
|
Q3 2016 Plan
|
22
|
|
1,779
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
1,820
|
|
|
Q4 FY2017
|
|
—
|
|||||
Q2 2016 Plan
|
72
|
|
4,106
|
|
|
561
|
|
|
—
|
|
|
—
|
|
|
4,667
|
|
|
Q3 FY2017
|
|
—
|
|
Balance at January 1, 2017
|
|
2017 Charges
|
|
2017 Changes in Estimates, Net
|
|
2017 Amounts Paid
|
|
Balance at July 2, 2017
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Severance:
|
|
|
|
|
|
|
|
|
|
||||||||||
Q1 2017 Plan
|
$
|
—
|
|
|
$
|
6,631
|
|
|
$
|
—
|
|
|
$
|
(2,665
|
)
|
|
$
|
3,966
|
|
Q3 2016 Plan
|
1,208
|
|
|
—
|
|
|
—
|
|
|
(765
|
)
|
|
443
|
|
|||||
Q2 2016 Plan
|
1,436
|
|
|
—
|
|
|
—
|
|
|
(446
|
)
|
|
990
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Facility:
|
|
|
|
|
|
|
|
|
|
||||||||||
Q1 2017 Plan
|
—
|
|
|
66
|
|
|
—
|
|
|
(9
|
)
|
|
57
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Previous Plans
|
7,780
|
|
|
—
|
|
|
—
|
|
|
(2,063
|
)
|
|
5,717
|
|
|||||
Restructuring
|
10,424
|
|
|
6,697
|
|
|
—
|
|
|
(5,948
|
)
|
|
11,173
|
|
|||||
Contract Termination
|
117
|
|
|
2,909
|
|
|
45
|
|
|
(25
|
)
|
|
3,046
|
|
|||||
Total Restructuring and Contract Termination
|
$
|
10,541
|
|
|
$
|
9,606
|
|
|
$
|
45
|
|
|
$
|
(5,973
|
)
|
|
$
|
14,219
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
|
(In thousands)
|
||||||||||||||
Interest income
|
$
|
(490
|
)
|
|
$
|
(127
|
)
|
|
$
|
(710
|
)
|
|
$
|
(237
|
)
|
Interest expense
|
10,672
|
|
|
9,939
|
|
|
21,536
|
|
|
19,780
|
|
||||
Loss (gain) on disposition of businesses and assets, net
|
301
|
|
|
(5,562
|
)
|
|
301
|
|
|
(5,562
|
)
|
||||
Other (income) expense, net
|
(5,278
|
)
|
|
1,143
|
|
|
(4,326
|
)
|
|
2,498
|
|
||||
Total interest and other expense, net
|
$
|
5,205
|
|
|
$
|
5,393
|
|
|
$
|
16,801
|
|
|
$
|
16,479
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
|
(In thousands)
|
||||||||||||||
Revenue
|
$
|
8,249
|
|
|
$
|
36,458
|
|
|
$
|
44,343
|
|
|
$
|
77,224
|
|
Cost of revenue
|
8,138
|
|
|
24,729
|
|
|
32,933
|
|
|
50,484
|
|
||||
Selling, general and administrative expenses
|
1,926
|
|
|
3,042
|
|
|
5,869
|
|
|
6,049
|
|
||||
Research and development expenses
|
1,294
|
|
|
3,139
|
|
|
4,891
|
|
|
6,953
|
|
||||
Restructuring and contract termination charges, net
|
—
|
|
|
621
|
|
|
—
|
|
|
621
|
|
||||
(Loss) income from discontinued operations before income taxes
|
$
|
(3,109
|
)
|
|
$
|
4,927
|
|
|
$
|
650
|
|
|
$
|
13,117
|
|
•
|
changes in sales due to weakness in markets in which we sell our products and services, and
|
•
|
changes in our working capital requirements.
|
•
|
financial covenants contained in the financial instruments controlling our borrowings that limit our total borrowing capacity,
|
•
|
increases in interest rates applicable to our outstanding variable rate debt,
|
•
|
a ratings downgrade that could limit the amount we can borrow under our senior unsecured revolving credit facility and our overall access to the corporate debt market,
|
•
|
increases in interest rates or credit spreads, as well as limitations on the availability of credit, that affect our ability to borrow under future potential facilities on a secured or unsecured basis,
|
•
|
a decrease in the market price for our common stock, and
|
•
|
volatility in the public debt and equity markets.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
•
|
determining and recording adjustments to the beginning retained earnings for the modified retrospective transition method.
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
•
|
accurately anticipate customer needs,
|
•
|
innovate and develop new reliable technologies and applications,
|
•
|
successfully commercialize new technologies in a timely manner,
|
•
|
price our products competitively, and manufacture and deliver our products in sufficient volumes and on time, and
|
•
|
differentiate our offerings from our competitors’ offerings.
|
•
|
competition among buyers and licensees,
|
•
|
the high valuations of businesses and technologies,
|
•
|
the need for regulatory and other approval, and
|
•
|
our inability to raise capital to fund these acquisitions.
|
•
|
demand for and market acceptance of our products,
|
•
|
competitive pressures resulting in lower selling prices,
|
•
|
changes in the level of economic activity in regions in which we do business,
|
•
|
changes in general economic conditions or government funding,
|
•
|
settlements of income tax audits,
|
•
|
expenses incurred in connection with claims related to environmental conditions at locations where we conduct or formerly conducted operations,
|
•
|
contract termination and litigation costs,
|
•
|
differing tax laws and changes in those laws, or changes in the countries in which we are subject to taxation,
|
•
|
changes in our effective tax rate,
|
•
|
changes in industries, such as pharmaceutical and biomedical,
|
•
|
changes in the portions of our revenue represented by our various products and customers,
|
•
|
our ability to introduce new products,
|
•
|
our competitors’ announcement or introduction of new products, services or technological innovations,
|
•
|
costs of raw materials, energy or supplies,
|
•
|
changes in healthcare or other reimbursement rates paid by government agencies and other third parties for certain of our products and services,
|
•
|
our ability to realize the benefit of ongoing productivity initiatives,
|
•
|
changes in the volume or timing of product orders,
|
•
|
fluctuation in the expense related to the mark-to-market adjustment on postretirement benefit plans,
|
•
|
changes in our assumptions underlying future funding of pension obligations,
|
•
|
changes in assumptions used to determine contingent consideration in acquisitions, and
|
•
|
changes in foreign currency exchange rates.
|
•
|
changes in actual, or from projected, foreign currency exchange rates,
|
•
|
changes in a country’s or region’s political or economic conditions, particularly in developing or emerging markets,
|
•
|
longer payment cycles of foreign customers and timing of collections in foreign jurisdictions,
|
•
|
embargoes, trade protection measures and import or export licensing requirements,
|
•
|
policies in foreign countries benefiting domestic manufacturers or other policies detrimental to companies headquartered in the United States,
|
•
|
differing tax laws and changes in those laws, or changes in the countries in which we are subject to tax,
|
•
|
adverse income tax audit settlements or loss of previously negotiated tax incentives,
|
•
|
differing business practices associated with foreign operations,
|
•
|
difficulty in transferring cash between international operations and the United States,
|
•
|
difficulty in staffing and managing widespread operations,
|
•
|
differing labor laws and changes in those laws,
|
•
|
differing protection of intellectual property and changes in that protection,
|
•
|
increasing global enforcement of anti-bribery and anti-corruption laws, and
|
•
|
differing regulatory requirements and changes in those requirements.
|
•
|
requiring us to dedicate significant cash flow from operations to the payment of principal and interest on our debt, which reduces the funds we have available for other purposes, such as acquisitions and stock repurchases;
|
•
|
reducing our flexibility in planning for or reacting to changes in our business and market conditions; and
|
•
|
exposing us to interest rate risk since a portion of our debt obligations are at variable rates.
|
•
|
pay dividends on, redeem or repurchase our capital stock,
|
•
|
sell assets,
|
•
|
incur obligations that restrict our subsidiaries’ ability to make dividend or other payments to us,
|
•
|
guarantee or secure indebtedness,
|
•
|
enter into transactions with affiliates, and
|
•
|
consolidate, merge or transfer all, or substantially all, of our assets and the assets of our subsidiaries on a consolidated basis.
|
•
|
operating results that vary from our financial guidance or the expectations of securities analysts and investors,
|
•
|
the financial performance of the major end markets that we target,
|
•
|
the operating and securities price performance of companies that investors consider to be comparable to us,
|
•
|
announcements of strategic developments, acquisitions and other material events by us or our competitors, and
|
•
|
changes in global financial markets and global economies and general market conditions, such as interest or foreign exchange rates, commodity and equity prices and the value of financial assets.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
Issuer Repurchases of Equity Securities
|
|||||||||||
Period
|
Total Number
of Shares
Purchased
(1)(2)
|
|
Average Price
Paid Per
Share
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
|
|
Maximum Number of
Shares that May Yet
Be Purchased
Under the Plans or
Programs
|
|||||
April 3, 2017 - April 30, 2017
|
527
|
|
|
$
|
56.95
|
|
|
—
|
|
|
8,000,000
|
|
May 1, 2017 - May 28, 2017
|
6,365
|
|
|
59.99
|
|
|
—
|
|
|
8,000,000
|
|
|
May 29, 2017 - July 2, 2017
|
699
|
|
|
64.00
|
|
|
—
|
|
|
8,000,000
|
|
|
Activity for quarter ended July 2, 2017
|
7,591
|
|
|
$
|
60.15
|
|
|
—
|
|
|
8,000,000
|
|
(1)
|
On July 27, 2016, our Board of Directors (our "Board") authorized us to repurchase up to
8.0 million
shares of common stock under a stock repurchase program (the "Repurchase Program"). The Repurchase Program will expire on July 26, 2018 unless terminated earlier by our Board, and may be suspended or discontinued at any time. During the
six
months ended
July 2, 2017
, we had
no
stock repurchases under the Repurchase Program. As of
July 2, 2017
,
8.0 million
shares remained available for repurchase under the Repurchase Program.
|
(2)
|
Our Board has authorized us to repurchase shares of common stock to satisfy minimum statutory tax withholding obligations in connection with the vesting of restricted stock awards and restricted stock unit awards granted pursuant to our equity incentive plans and to satisfy obligations related to the exercise of stock options made pursuant to our equity incentive plans. During the
second
quarter of
fiscal year 2017
, the Company repurchased
7,591
shares of common stock for this purpose at an aggregate cost of
$0.5 million
. The repurchased shares have been reflected as additional authorized but unissued shares, with the payments reflected in common stock and capital in excess of par value.
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
|
Exhibit Name
|
|
|
|
2.1
(1)
|
|
Amendment No. 2, dated April 28, 2017, to the Master Purchase and Sale Agreement, dated as of December 21, 2016, by and between PerkinElmer, Inc. and Varex Imaging Corporation.
|
|
|
|
2.2
(1)
|
|
Share Sale and Transfer Agreement, dated June 16, 2017, by and among PerkinElmer, Inc., Prof. Dr. Winfried Stöcker and Stöcker Vermögensverwaltungsgesellschaft mbH & Co. KG.
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document.
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document.
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101.LAB
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XBRL Taxonomy Extension Labels Linkbase Document.
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document.
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(1)
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The exhibits and schedules to this agreement have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. The registrant agrees to furnish copies of any such exhibits or schedules to the SEC upon request.
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P
ERKIN
E
LMER
, I
NC
.
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August 8, 2017
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By:
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/s/ F
RANK
A. W
ILSON
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Frank A. Wilson
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
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P
ERKIN
E
LMER
, I
NC
.
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August 8, 2017
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By:
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/s/ A
NDREW
O
KUN
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Andrew Okun
Vice President and Chief Accounting Officer
(Principal Accounting Officer)
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Exhibit
Number
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Exhibit Name
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2.1
(1)
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Amendment No. 2, dated April 28, 2017, to the Master Purchase and Sale Agreement, dated as of December 21, 2016, by and between PerkinElmer, Inc. and Varex Imaging Corporation.
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2.2
(1)
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Share Sale and Transfer Agreement, dated June 16, 2017, by and among PerkinElmer, Inc., Prof. Dr. Winfried Stöcker and Stöcker Vermögensverwaltungsgesellschaft mbH & Co. KG.
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31.1
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Certification of Chief Executive Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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31.2
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Certification of Chief Financial Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1
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Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101.INS
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XBRL Instance Document.
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101.SCH
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XBRL Taxonomy Extension Schema Document.
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document.
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document.
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101.LAB
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XBRL Taxonomy Extension Labels Linkbase Document.
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document.
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(1)
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The exhibits and schedules to this agreement have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. The registrant agrees to furnish copies of any such exhibits or schedules to the SEC upon request.
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1.
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THE AMENDMENTS
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2.
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MISCELLANEOUS PROVISIONS
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1.
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PREAMBLE
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(A)
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EUROIMMUN Medizinische Labordiagnostika AG with its registered business address at Seekamp 31, 23560 Lübeck, Germany, is a German stock corporation registered in the commercial register of the Local Court of Lübeck under HRB 2330 HL and is referred to as "
Company
". The Company has a registered share capital
(Grundkapital)
of EUR 6,404,000.00 which is divided in 6,404,000 registered non-par value shares
(auf den Namen lautende Stückaktien)
(collectively "
Company Shares
").
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(B)
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The Company holds direct and indirect participations in the companies listed in
Annex (B)
("
Subsidiaries
", the Company and the Subsidiaries collectively "
Target Group Companies
" or "
Target Group
").
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(C)
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The Target Group Companies are active in the business of development, production, and distribution of test systems for the laboratory diagnosis of autoimmune and infectious diseases, allergies, and for gene analyses, including test systems for the determination of antibodies, antigens and genetic markers in patient samples (collectively "
Business
"). However, not every Subsidiary is active in every of the three business activities (meaning development, production and distribution).
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(D)
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The Seller holds 50.37 percent of the Company Shares as follows: Prof. Dr. Stöcker holds 4.06 percent of the Company Shares and Stöcker KG holds 46.31 percent of the Company Shares (collectively, "
Seller Shares
").
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(E)
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Prior to the date hereof, the Seller has entered into share transfer option agreements providing for certain terms and conditions whereby the Seller may purchase additional Company Shares from the respective shareholder for the same price per share as offered by the Purchaser to the Seller (each an "
Option Agreement
") in the form attached hereto as
Annex (E)(1)
with the other shareholders of the Company for the Company Shares represented on
Annex (E)(2)
.
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(F)
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Subject to the terms and conditions of this agreement ("
Agreement
"), the Seller undertakes to offer an Option Agreement to all shareholders of the Company who are not currently a party to an Option Agreement. The Company Shares covered under all Option Agreements entered into with shareholders of the Company on or prior to the Closing Date (as defined in Section 5.3 below) shall be referred to as "
Option Shares
" and collectively with the Seller Shares "
Salable Shares
".
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(G)
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Subject to the terms and conditions of this agreement, the Seller undertakes to sell to the Purchaser and the Purchaser undertakes to purchase from the Seller all Salable Shares ("
Transaction
").
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2.
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SIGNING
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2.1
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As of the date hereof ("
Signing Date
" and the signing of this Agreement, "
Signing
"), the Seller:
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2.2
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As of the Signing Date, the Purchaser:
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3.
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CLOSING CONDITIONS
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3.1
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The obligation of the Parties to proceed to Closing (as defined in Section 5 below) and cause the Closing Events to occur is subject to the fulfilment of the following conditions precedent
(aufschiebende Bedingungen)
("
Closing
Conditions
"):
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3.2
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Each Party shall use reasonable best efforts to ensure that the Closing Conditions will be fulfilled as soon as possible after the Signing. As soon as any Closing Condition has been fulfilled, the Seller or the Purchaser, as the case may be, shall notify the other Party thereof providing reasonable proof.
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3.3
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Except where required otherwise by mandatory law, the Purchaser shall prepare the filings required to satisfy the Closing Conditions (collectively "
Merger Filings
") and shall make all Merger Filings it can make itself under applicable law as soon as reasonable practical after the Signing. If the Company is required under mandatory law to make any Merger Filing, the Seller shall procure that the Company makes such Merger Filing based on the draft prepared and approved by the Purchaser as soon as reasonably practical after the Signing.
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3.4
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The Seller and the Company shall make available all support and information reasonably required by the Purchaser for the preparation of the Merger Filings. The Purchaser shall take the lead regarding the Merger Filings and shall keep the Seller reasonably informed about the status of the proceedings. No Merger Filing shall be submitted unless the content has been approved by the Purchaser. In case any competent merger control authority only clears the Transaction with conditions
(Auflagen und Bedingungen)
, the Purchaser is entitled in its sole discretion to determine whether such conditions are acceptable. If the Purchaser accepts such conditions, the respective Closing Condition is deemed fulfilled.
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3.5
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In the event that any of the Closing Conditions has neither been fulfilled nor duly waived within two years after the Signing Date, the Seller or the Purchaser may withdraw
(zurücktreten)
from this Agreement, unless the non-fulfilment of the Closing Condition(s) occurred because of a breach of the Seller, as far as a withdrawal of the Seller is concerned, or the Purchaser, as far as a withdrawal of the Purchaser is concerned, of any of his/its obligations under this Agreement.
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3.6
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Any withdrawal from this Agreement under Section 3.5 must be made in writing. The withdrawal shall be deemed void if at the time when the notice is received by the other Party all relevant Closing Conditions have been fulfilled. The effect of any withdrawal from this Agreement under Section 3.5 shall be limited to eliminating the obligations of the Parties to consummate this Agreement
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4.
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PURCHASE PRICE
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5.
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CLOSING
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5.1
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The consummation of the Transaction shall take place at the offices of Hogan Lovells International LLP, Alstertor 21, 20095 Hamburg, Germany, within five (5) business days following the date on which all Closing Conditions were satisfied but in any event, not prior to the date that is sixty (60) days from the Signing Date, or at any other time or place which the Seller and the Purchaser mutually agree upon (such date "
Scheduled Closing Date
").
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5.2
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On the Scheduled Closing Date, the Parties shall initiate and thereafter complete the following actions or, with regard to Section 5.2(h) and Section 5.2(i), fulfil the conditions precedent
(aufschiebende Bedingungen)
(collectively "
Closing Events
") in the following order:
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5.3
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After all other Closing Events have been performed, the Parties shall sign a closing memorandum substantially in the form of
Annex 5.3
by which the Parties confirm that the Closing has taken place and all Closing Events have occurred. The point in time when the Closing Memorandum is signed by both Parties is referred to as "
Closing
". The Day on which the Closing occurs is referred to as the "
Closing Date
".
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6.
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CORPORATE REPRESENTATIONS AND WARRANTIES
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6.1
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The registered capital of the Company is fully paid in. All contributions on the registered capital of the Company have been made in compliance with applicable law and have not been repaid or returned, in whole or in part. There is no obligation to make any further contribution
(keine Nachschusspflicht)
to the Company and there are no other equity instruments of the Company such as virtual shares, warrants, options, or otherwise, issued or outstanding.
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6.2
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The Seller owns all Seller Shares and, after exercise of the Option Agreements, immediately prior to the Closing, the Seller owns all Salable Shares.
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6.3
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The Company Shares have been validly issued and, the Salable Shares, except as set out on
Annex 6.3
, are free and unencumbered from any third party rights, in particular any liens, mortgages, charges, pledges, calls, warrants or other encumbrances or commitments and are transferable to the Purchaser pursuant to the terms of this Agreement.
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6.4
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Prof. Dr. Stöcker holds 100% of the issued and outstanding capital of Stöcker KG and is authorized to bind Stöcker KG to this Agreement through his sole signature.
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7.
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NON-CORPORATE REPRESENTATIONS AND WARRANTIES
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7.1
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Financial Statements
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7.2
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Assets
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7.3
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Taxes
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7.4
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Permits, Compliance with Laws
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7.5
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Litigation and Product Liability
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7.6
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Conduct of Business and Disclosure
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8.
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REMEDIES
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8.1
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In the event of a breach of any Seller's Corporate Warranty, the Seller is liable to the Purchaser for monetary damages. The liability of the Seller under the foregoing sentence is capped at the portion of the Purchase Price relating to the Seller Shares (50.37 percent of the Overall Price). In addition, subject to the condition precedent
(unter der aufschiebenden Bedingung)
of the payments set forth in Section 5.2(g), the Seller herewith assigns to the Purchaser all warranty claims under the Option Agreements.
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8.2
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If within two years after the Closing Date (the “Escrow Period”) the Purchaser identifies any breach of any of Seller's Non-Corporate Warranties, the Purchaser shall notify the Seller of any such breach (such notification "
Breach Notification
").
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8.3
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At the end of the Escrow Period, the Parties shall jointly instruct the Escrow Agent to return all or any remaining portion of the Escrow Amount to the Seller. If, however, any Breach Notification is provided prior to the end of the Escrow Period and not finally settled by such date pursuant to Section 8.2, the Parties shall instruct the Escrow Agent to continue to hold in the Escrow Account the reasonably claimed value of the impact identified in the Breach Notification until any liability thereunder is finally determined as provided in Section 8.2. For purposes of clarity, even if the Escrow Agent continues holding a portion of the Escrow Amount following the end of the Escrow Period, the Buyer may not provide the Seller with any new Breach Notifications following the end of the Escrow Period.
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9.
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GENERAL LIABILITY CLAUSE
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10.
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BUSINESS BETWEEN SIGNING AND CLOSING
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10.1
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The Seller shall, except as otherwise approved by the Purchaser in writing, procure that between Signing and Closing the Target Group Companies are operated in the Ordinary Course, in accordance with applicable laws and in a reasonable and prudent manner and shall not take any of the following actions:
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11.
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MISCELLANEOUS
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11.1
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Should individual terms of this Agreement be or become invalid or unenforceable or should this Agreement contain gaps, this shall not affect the validity of the remaining terms of this Agreement. In place of the invalid, unenforceable or missing term, such valid term which the Parties would reasonably have agreed, had they been aware at the conclusion of this Agreement that the relevant term was invalid, unenforceable or missing, shall be deemed to have been agreed.
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11.2
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This Agreement shall be governed by the laws of the Federal Republic of Germany, excluding the United Nations Convention on Contracts for the International Sale of Goods (CISG) without regard to the conflicts of laws provisions thereof.
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11.3
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All disputes under or in connection with this Agreement or its validity shall be finally settled according to the arbitration rules of the German Institution of Arbitration e.V.
(Deutsche Institution für Schiedsgerichtsbarkeit)
without recourse to the ordinary courts of law. The arbitral tribunal shall consist of three arbitrators, appointed in accordance with the abovementioned arbitration rules. The language of the arbitral proceedings shall be English. The place of arbitration shall be Hamburg, Germany.
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11.4
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At any time prior to the Closing, Purchaser may assign this Agreement as well as Purchaser’s rights, obligations and liabilities hereunder to a wholly owned subsidiary of the Purchaser.
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11.5
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All Annexes attached hereto form an integral part of this Agreement and any amendment or supplementation of this Agreement, including of this provision, shall be valid only if made in writing, except where a stricter form (e.g. notarization) is required under applicable law.
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11.6
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Each Party shall bear the costs and fees of its own advisors, in particular the costs and fees of its legal advisors. The costs of the Merger Filings, notary fees, and of any real estate transfer Tax triggered by the Transaction shall be borne by the Purchaser. Change of control payments due to third parties under credit commitments by any Target Group Company shall remain the obligation of such Target Group Company following the Closing.
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1.
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I have reviewed this Quarterly Report on Form 10-Q of PerkinElmer, Inc.;
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2.
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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;
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3.
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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;
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4.
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The registrant's other certifying officer 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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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The registrant's other certifying officer 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):
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a)
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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
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b)
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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.
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Date:
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August 8, 2017
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/s/ R
OBERT
F. F
RIEL
|
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Robert F. Friel
Chairman, Chief Executive Officer
and President
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1.
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I have reviewed this Quarterly Report on Form 10-Q of PerkinElmer, Inc.;
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2.
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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;
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3.
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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;
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4.
|
The registrant's other certifying officer 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
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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
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5.
|
The registrant's other certifying officer 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)
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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)
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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.
|
Date:
|
August 8, 2017
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/s/ F
RANK
A. W
ILSON
|
|
|
Frank A. Wilson
Senior Vice President and
Chief Financial Officer
|
Dated:
|
August 8, 2017
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/
S
/ R
OBERT
F. F
RIEL
|
|
|
Robert F. Friel
Chairman, Chief Executive Officer
and President
|
|
|
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Dated:
|
August 8, 2017
|
/
S
/ F
RANK
A. W
ILSON
|
|
|
Frank A. Wilson
Senior Vice President and
Chief Financial Officer
|