Revenue

3 Months Ended

Apr. 03, 2022

Revenue from Contract with Customer [Abstract]

Revenue

(5) Revenue

Contract balances

Timing of revenue recognition may differ from timing of invoicing to customers. The Company records an asset when revenue is recognized prior to invoicing a customer (“contract asset”). Contract assets are included within Other current assets or Other assets in the Company’s unaudited consolidated balance sheet and are transferred to accounts receivable when the right to payment becomes unconditional. The balance of Contract assets recorded in the Company’s unaudited consolidated balance sheets were as follows:

	April 3, 2022		January 2, 2022
Other current assets	$	52.2	$	47.2
Other assets		—		1.0
Total contract assets	$	52.2	$	48.1

The contract asset balance consists of the following components:

•A customer supply agreement under which the difference between the timing of invoicing and revenue recognition resulted in a contract asset of $9.0 million as of April 3, 2022 was recorded in Other current assets. As of January 2, 2022, the balance of the contract asset related to this agreement was $12.4 million, of which $11.5 million was recorded in Other current assets and $1.0 million was recorded in Other assets.

•Contractual arrangements with certain customers under which the Company invoices the customers based on reportable results generated by its reagents; however, control of the goods transfers to the customers upon shipment or delivery of the products, as determined under the terms of the contract. Using the expected value method, the Company estimates the number of reagents that will generate a reportable result. The Company records the revenue upon shipment and an associated contract asset, and relieves the contract asset upon completion of the invoicing. The balance of the contract asset related to these arrangements was $43.2 million and $35.7 million as of April 3, 2022 and January 2, 2022, respectively.

The Company reviews contract assets for expected credit losses resulting from the collectability of customer accounts. Expected losses are established based on historical losses, customer mix and credit policies, current economic conditions in customers’ country or industry, and expectations associated with reasonable and supportable forecasts. No credit losses related to contract assets were recognized during the fiscal quarters ended April 3, 2022 and April 4, 2021.

The Company recognizes a contract liability when a customer pays an invoice prior to the Company transferring control of the goods or services (“contract liabilities”). The Company’s contract liabilities consist of deferred revenue primarily related to customer service contracts. The Company classifies deferred revenue as current or noncurrent based on the timing of the transfer of control or performance of the service. The balance of the Company’s current deferred revenue was $30.5 million and $34.5 million as of April 3, 2022 and January 2, 2022, respectively. The Company has one arrangement with a customer where the revenue is expected to be recognized beyond one year. The balance of the deferred revenue included in long-term liabilities was $8.7 million and $5.6 million as of April 3, 2022 and January 2, 2022, respectively, and was included in Other liabilities in the unaudited consolidated balance sheets. The amount of deferred revenue as of January 2, 2022 that was recorded in Net revenue during the fiscal quarter ended April 3, 2022 was $19.3 million.

Disaggregation of revenue

The Company generates product revenue in the following lines of business:

•Clinical Laboratories—Focused on (i) clinical chemistry, which is the measurement of target chemicals in bodily fluids for the evaluation of health and the clinical management of patients, (ii) immunoassay instruments, which test the measurement of proteins as they act as antigens in the spread of disease, antibodies in the immune response spurred by disease, or markers of proper organ function and health, and (iii) testing to detect and monitor disease progression across a broad spectrum of therapeutic areas.

•Transfusion Medicine—Focused on (i) immunohematology instruments and tests used for blood typing to ensure patient-donor compatibility in blood transfusions, and (ii) donor screening instruments and tests used for blood and plasma screening for infectious diseases for customers primarily in the U.S.

•Other Product Revenue—Includes revenues primarily from contract manufacturing.

The Company also enters into collaboration and license agreements pursuant to which the Company derives collaboration and royalty revenues. During the fiscal quarter ended September 27, 2020, the Company entered into two agreements with the Biomedical Advanced Research and Development Authority, a division of the U.S. Department of Health and Human Services, for two awards of up to $13.6 million to develop and submit Emergency Use Authorizations and 510(k) applications to the U.S. Food and Drug Administration for its COVID-19 antigen and antibody tests. An additional award was granted to the Company on April 16, 2021 for an amount up to $3.6 million to submit a 510(k) application for its COVID-19 antigen test. During the fiscal quarter ended April 3, 2022 and April 4, 2021, the Company recognized $0.2 million and $4.0 million, respectively, of Net revenue related to these grants based upon project milestones completed to date.

The following table summarizes Net revenue by line of business for the fiscal quarter ended April 3, 2022 and April 4, 2021:

	Fiscal Quarter Ended
	April 3, 2022		April 4, 2021
Clinical Laboratories	$	321.2	$	334.0
Transfusion Medicine		173.6		161.4
Other Product Revenue		0.4		4.3
Total Product Revenue		495.2		499.7
Collaborations and Other Revenue		4.8		7.1
Net Revenue	$	500.1	$	506.8