EQUITY AND NONCONTROLLING INTERESTS

12 Months Ended

Dec. 28, 2019

Earnings Per Share

The following table reconciles the numerator and denominator in the computations of basic and diluted earnings per share:



	Fiscal Year
	2019		2018		2017
	(in thousands)
Numerator:
Income from continuing operations, net of income taxes	$	254,061	$	227,218	$	125,586
Income (loss) from discontinued operations, net of income taxes	—		1,506		(137		)
Less: Net income attributable to noncontrolling interests	2,042		2,351		2,094
Net income attributable to common shareholders	$	252,019	$	226,373	$	123,355

Denominator:
Weighted-average shares outstanding—Basic	48,730		47,947		47,481
Effect of dilutive securities:
Stock options, restricted stock, restricted stock units and performance share units	963		1,071		1,083
Weighted-average shares outstanding—Diluted	49,693		49,018		48,564

Options to purchase 0.4 million shares, 0.5 million shares, and 0.6 million shares for fiscal years 2019, 2018 and 2017, 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 fiscal years 2019, 2018 and 2017 excluded the impact of 1.0 million shares, 1.0 million shares and 1.1 million shares, respectively, of non-vested restricted stock, RSUs and PSUs.

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 did not repurchase any shares in fiscal years 2019 and 2018. The Company repurchased 1.0 million shares totaling $90.6 million in fiscal year 2017. As of December 28, 2019, the Company had $129.1 million remaining on the authorized stock repurchase program.

The Company’s stock-based compensation plans permit the netting of common stock upon vesting of restricted stock, RSUs, and PSUs in order to satisfy individual statutory tax withholding requirements. The Company acquired 0.1 million shares for $18.1 million, 0.1 million shares for $13.8 million, and 0.2 million shares for $16.3 million in fiscal years 2019, 2018 and 2017, respectively, from such netting.

In fiscal years 2019 and 2018, the Company’s Board of Directors approved the cancellation and return to the Company’s authorized and unissued capital stock of 0.1 million treasury shares totaling $18.1 million and 40.2 million treasury shares totaling $1.7 billion, respectively, reducing treasury stock on the Company’s consolidated balance sheet. The Company allocated the excess of the repurchase price over the par value of shares acquired to reduce both retained earnings and additional paid-in capital for $13.8 million and $4.3 million, respectively, in fiscal 2019 and $0.5 billion and $1.2 billion, respectively, in fiscal year 2018.

Accumulated Other Comprehensive Income (Loss)

Changes to each component of accumulated other comprehensive income (loss), net of income taxes, are as follows:



	Foreign Currency Translation Adjustment and Other			Pension and Other Post-Retirement Benefit Plans			Total
	(in thousands)
December 30, 2017	$	(77,545	)	$	(67,186	)	$	(144,731	)
Other comprehensive loss before reclassifications ⁽¹⁾	(27,352		)	(1,659		)	(29,011		)
Amounts reclassified from accumulated other comprehensive income (loss)	—			2,477			2,477
Net current period other comprehensive (loss) income	(27,352		)	818			(26,534		)
Amount reclassified from accumulated other comprehensive loss due to the adoption of ASU 2018-02	—			3,330			3,330
Income tax (benefit) expense	(2,698		)	806			(1,892		)
December 29, 2018	(102,199		)	(70,504		)	(172,703		)
Other comprehensive income (loss) before reclassifications ⁽¹⁾	14,444			(25,165		)	(10,721		)
Amounts reclassified from accumulated other comprehensive income (loss)	—			1,772			1,772
Net current period other comprehensive income (loss)	14,444			(23,393		)	(8,949		)
Income tax (benefit)	(177		)	(3,456		)	(3,633		)
December 28, 2019	$	(87,578	)	$	(90,441	)	$	(178,019	)
⁽¹⁾ The impact of the foreign currency translation adjustment to other comprehensive income (loss) before reclassifications 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.

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 within Equity in the accompanying consolidated balance sheets. The activity within the nonredeemable noncontrolling interest during fiscal years 2019, 2018, and 2017 was not significant.

Redeemable Noncontrolling Interests

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. As the noncontrolling interest holders have the ability to require the Company to purchase the remaining 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 equity interest.

During fiscal years 2016 through the 2019, the following transactions and amendments impacted the Vital River redeemable noncontrolling interest as follows:

•

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%. 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, which represents a derivative embedded within the equity instrument. These rights are exercisable beginning in 2019 and are accelerated in certain events. Subsequent to the amendment during fiscal years 2016 through 2019, the redeemable noncontrolling interest was 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 ($18.5 million as of December 29, 2018) and its carrying amount adjusted for net income (loss) attributable to the noncontrolling interest.

•

On June 13, 2019, the Company purchased an additional 5% equity interest in Vital River for $7.9 million, resulting in total ownership of 92%. The Company recorded a $0.8 million gain in equity equal to the excess fair value of the 5% equity interest over the purchase price. Concurrent with the transaction, the pre-existing agreement was further amended to provide the Company with the right to purchase, and the noncontrolling interest holders with the right to sell, the remaining 8% equity interest (redeemable noncontrolling interest) at a contractually defined redemption value, subject to a redemption floor, which represents a derivative embedded within the equity instrument. These rights are exercisable beginning in 2022 and are accelerated in certain events. The Company recorded a charge of $2.2 million in Selling, general and administrative expenses within the consolidated statements of income, equal to the excess fair value of the hybrid instrument (equity interest with embedded derivative) over the fair value of the 8% 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 ($15.5 million as of December 28, 2019) and the 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 8% 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 8% equity interest.

As part of the Citoxlab acquisition on April 29, 2019, the Company acquired a less than wholly owned subsidiary that is fully consolidated under the voting interest model. The Company acquired an approximate 90% equity interest, which includes an approximate 10% redeemable noncontrolling interest. The noncontrolling interest holders have the ability to require the Company to purchase the remaining approximate 10% interest at certain dates in the future between 2021 through 2023. The noncontrolling interest is classified in the mezzanine section of the consolidated balance sheets and is approximately $4 million as of December 28, 2019.

On August 28, 2019, the Company acquired an 80% equity interest in a supplier, which included a 20% redeemable noncontrolling interest. The contract provides the Company the right to purchase, and the noncontrolling interest holders with the right to sell, the remaining 20% equity interest at its appraised value. These rights are exercisable beginning in 2022. 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 appraised value and the carrying amount adjusted for net income (loss) attributable to the noncontrolling interest or a pre-determined floor value. As the noncontrolling interest holders have the ability to require the Company to purchase the remaining 20% 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 20% equity interest.

The following table provides a rollforward of the activity related to the Company’s redeemable noncontrolling interests:



	Fiscal Year
	2019			2018
	(in thousands)
Beginning balance	$	18,525		$	16,609
Adjustment to Vital River redemption value	1,451			2,069
Purchase of Vital River 5% equity interest	(8,745		)	—
Change in fair value of Vital River 8% equity interest, included in additional paid-in capital	2,708			—
Modification of Vital River 8% purchase option	2,196			—
Acquisition of an approximate 10% non-controlling interest through acquiring Citoxlab	4,035			—
Acquisition of a 20% non-controlling interest through acquiring a supplier	8,740			—
Net (loss) income attributable to noncontrolling interests	(42		)	800
Foreign currency translation	(221		)	(953		)
Ending balance	$	28,647		$	18,525