PERKINELMER INC [PKI] Filings

10-Q 1 pki-20220403.htm 10-Q pki-20220403

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________

FORM 10-Q

_______________________________________

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 3, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number 001-5075

_______________________________________

PerkinElmer, Inc.

(Exact name of Registrant as specified in its Charter)

_______________________________________

Massachusetts

04-2052042

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

940 Winter Street,

Waltham,

Massachusetts

02451

(Address of principal executive offices)

(Zip Code)

(781) 663-6900

(Registrant’s telephone number, including area code)

______________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol (s)	Name of each exchange on which registered
Common stock, $1 par value per share	PKI	The New York Stock Exchange
1.875% Notes due 2026	PKI 21A	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark whether the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of May 5, 2022, there were outstanding 126,148,473 shares of common stock, $1 par value per share.

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TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Unaudited Financial Statements	4
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Balance Sheets	6
	Condensed Consolidated Statements of Stockholders' Equity	7
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
	Overview	25
	Critical Accounting Policies and Estimates	25
	Consolidated Results of Continuing Operations	26
	Reporting Segment Results of Continuing Operations	28
	Liquidity and Capital Resources	29
	Dividends	31
	Effects of Recently Adopted and Issued Accounting Pronouncements	31

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32

Item 4.	Controls and Procedures	32

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	33

Item 1A.	Risk Factors	33

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42

Item 6.	Exhibits	43

Signatures		44

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PART I. FINANCIAL INFORMATION

Item 1.Unaudited Financial Statements

PERKINELMER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended
	April 3, 2022		April 4, 2021
	(In thousands, except per share data)
Product revenue	$	866,945	$	811,552
Service revenue	392,497		496,137
Total revenue	1,259,442		1,307,689
Cost of product revenue	403,651		339,312
Cost of service revenue	176,560		183,231
Total cost of revenue	580,211		522,543
Selling, general and administrative expenses	334,393		251,410
Research and development expenses	76,609		60,216
Restructuring and other costs, net	13,384		5,744
Operating income from continuing operations	254,845		467,776
Interest and other expense (income), net	37,245		(12,706)
Income from continuing operations before income taxes	217,600		480,482
Provision for income taxes	40,597		101,139
Income from continuing operations	177,003		379,343

Loss on disposition of discontinued operations before income taxes	—		—
Provision for income taxes on discontinued operations and dispositions	41		38
Loss from discontinued operations and dispositions	(41)		(38)
Net income	$	176,962	$	379,305
Basic earnings per share:
Income from continuing operations	$	1.40	$	3.39
Loss from discontinued operations and dispositions	(0.00)		(0.00)
Net income	$	1.40	$	3.39
Diluted earnings per share:
Income from continuing operations	$	1.40	$	3.37
Loss from discontinued operations and dispositions	(0.00)		(0.00)
Net income	$	1.40	$	3.37
Weighted average shares of common stock outstanding:
Basic	126,137		112,028
Diluted	126,635		112,495
Cash dividends declared per common share	$	0.07	$	0.07

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PERKINELMER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended
	April 3, 2022		April 4, 2021
	(In thousands)
Net income	$	176,962	$	379,305
Other comprehensive (loss) income:
Foreign currency translation adjustments, net of income taxes	(84,011)		(72,305)


Unrealized (loss) gain on securities, net of income taxes	(16)		94
Other comprehensive loss	(84,027)		(72,211)
Comprehensive income	$	92,935	$	307,094

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PERKINELMER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	April 3, 2022		January 2, 2022
	(In thousands, except share and per share data)
Current assets:
Cash and cash equivalents	$	669,755	$	618,319
Accounts receivable, net	941,722		1,023,792

Inventories	645,924		624,714
Other current assets	197,110		173,955

Total current assets	2,454,511		2,440,780
Property, plant and equipment, net	547,035		545,605
Operating lease right-of-use assets	201,966		207,775
Intangible assets, net	3,942,878		4,063,104
Goodwill	7,367,284		7,416,584
Other assets, net	334,793		326,706

Total assets	$	14,848,467	$	15,000,554
Current liabilities:
Current portion of long-term debt	$	3,729	$	4,240
Accounts payable	376,694		355,458

Accrued expenses and other current liabilities	882,628		854,046

Total current liabilities	1,263,051		1,213,744
Long-term debt	4,863,978		4,979,737
Deferred taxes and long-term liabilities	1,354,991		1,480,469
Operating lease liabilities	180,105		185,359

Total liabilities	7,662,125		7,859,309
Commitments and contingencies (see Note 14)
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 126,140,000 shares and 126,241,000 shares at April 3, 2022 and January 2, 2022, respectively	126,140		126,241
Capital in excess of par value	2,721,690		2,760,522
Retained earnings	4,585,231		4,417,174
Accumulated other comprehensive loss	(246,719)		(162,692)
Total stockholders’ equity	7,186,342		7,141,245
Total liabilities and stockholders’ equity	$	14,848,467	$	15,000,554

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PERKINELMER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)


	For the Three-Month Period Ended April 3, 2022
	Common Stock Shares	Common Stock Amount		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
		(In thousands)
Balance, January 2, 2022	126,241	$	126,241	$	2,760,522	$	4,417,174	$	(162,692)	$	7,141,245
Net income	—	—		—		176,962		—		176,962
Other comprehensive loss	—	—		—		—		(84,027)		(84,027)
Dividends	—	—		—		(8,905)		—		(8,905)
Exercise of employee stock options and related income tax benefits	18	18		1,379		—		—		1,397

Purchases of common stock	(307)	(307)		(55,285)		—		—		(55,592)
Issuance of common stock for long-term incentive program	188	188		12,282		—		—		12,470
Stock compensation	—	—		2,792		—		—		2,792
Balance, April 3, 2022	126,140	$	126,140	$	2,721,690	$	4,585,231	$	(246,719)	$	7,186,342


		For the Three-Month Period Ended April 4, 2021
	Common Stock Shares	Common Stock Amount		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
		(In thousands)
Balance, January 3, 2021	112,090	$	112,090	$	148,101	$	3,507,262	$	(31,961)	$	3,735,492

Net income	—	—		—		379,305		—		379,305
Other comprehensive loss	—	—		—		—		(72,211)		(72,211)
Dividends	—	—		—		(7,846)		—		(7,846)
Exercise of employee stock options and related income tax benefits	95	95		4,892		—		—		4,987
Issuance of common stock for employee stock purchase plans	—	—		8		—		—		8
Purchases of common stock	(295)	(295)		(42,484)		—		—		(42,779)
Issuance of common stock for long-term incentive program	176	176		4,274		—		—		4,450
Stock compensation	—	—		899		—		—		899
Balance, April 4, 2021	112,066	$	112,066	$	115,690	$	3,878,721	$	(104,172)	$	4,002,305

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PERKINELMER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended
	April 3, 2022		April 4, 2021
	(In thousands)
Operating activities:
Net income	$	176,962	$	379,305
Loss from discontinued operations and dispositions, net of income taxes	41		38
Income from continuing operations	177,003		379,343
Adjustments to reconcile income from continuing operations to net cash provided by continuing operations:
Stock-based compensation	15,262		5,157
Restructuring and other costs, net	13,384		5,744
Depreciation and amortization	120,052		70,186


Change in fair value of contingent consideration	693		240

Amortization of deferred debt financing costs and accretion of discounts and debt extinguishment costs	1,900		896
Change in fair value of financial securities	12,125		(19,298)

Amortization of acquired inventory revaluation	16,868		2,981
Changes in assets and liabilities which provided (used) cash, excluding effects from companies acquired:
Accounts receivable, net	69,065		165,190

Inventories	(46,968)		(15,008)
Accounts payable	26,352		(5,048)

Accrued expenses and other	(122,521)		(116,883)
Net cash provided by operating activities of continuing operations	283,215		473,500


Investing activities:
Capital expenditures	(29,431)		(14,311)
Purchases of investments	(22,995)		(4,000)



Cash paid for acquisitions, net of cash, cash equivalents and restricted cash acquired	(3,880)		(443,543)
Net cash used in investing activities of continuing operations	(56,306)		(461,854)


Financing activities:
Payments on borrowings	(220,000)		(743,545)
Proceeds from borrowings	220,000		584,000
Payments of term loan	(100,000)		—

Proceeds from sale of senior unsecured notes	—		799,856
Payments of debt financing and equity issuance costs	—		(7,882)
Settlement of cash flow hedges	(762)		6,005
Net payments on other credit facilities	(1,064)		(9,799)

Proceeds from issuance of common stock under stock plans	1,397		4,987
Purchases of common stock	(55,592)		(42,779)
Dividends paid	(8,837)		(7,852)
Net cash (used in) provided by financing activities of continuing operations	(164,858)		582,991


Effect of exchange rate changes on cash, cash equivalents and restricted cash	(10,636)		(6,849)

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Net increase in cash, cash equivalents and restricted cash	51,415		587,788
Cash, cash equivalents and restricted cash at beginning of period	619,337		402,613
Cash, cash equivalents and restricted cash at end of period	$	670,752	$	990,401

Supplemental disclosures of cash flow information
Reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total shown in the condensed consolidated statements of cash flows:
Cash and cash equivalents	$	669,755	$	988,234
Restricted cash included in other current assets	997		2,167

Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$	670,752	$	990,401

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PERKINELMER, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1: Basis of Presentation

The condensed consolidated financial statements included herein have been prepared by PerkinElmer, Inc. (the “Company”), in accordance with accounting principles generally accepted in the United States of America (the “U.S.” or the "United States") and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information in the footnote disclosures of the financial statements has been condensed or omitted where it substantially duplicates information provided in the Company’s latest audited consolidated financial statements, in accordance with the rules and regulations of the SEC. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes included in its Annual Report on Form 10-K for the fiscal year ended January 2, 2022, filed with the SEC (the “2021 Form 10-K”). The balance sheet amounts at January 2, 2022 in this report were derived from the Company’s audited 2021 consolidated financial statements included in the 2021 Form 10-K. The condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods indicated. The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and classifications of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The results of operations for the three months ended April 3, 2022 and April 4, 2021, respectively, are not necessarily indicative of the results for the entire fiscal year or any future period.

Note 2: Revenue

Disaggregation of revenue

In the following tables, revenue is disaggregated by primary geographical markets, primary end-markets and timing of revenue recognition.


	Reportable Segments
	Three Months Ended
	April 3, 2022						April 4, 2021
	Discovery & Analytical Solutions		Diagnostics		Total		Discovery & Analytical Solutions		Diagnostics		Total
	(In thousands)
Primary geographical markets
Americas	$	273,158	$	327,936	$	601,094	$	175,115	$	400,927	$	576,042
Europe	158,238		198,168		356,406		135,458		311,743		447,201
Asia	170,970		130,972		301,942		144,036		140,410		284,446
	$	602,366	$	657,076	$	1,259,442	$	454,609	$	853,080	$	1,307,689

Primary end-markets
Diagnostics	$	—	$	657,076	$	657,076	$	—	$	853,080	$	853,080
Life sciences	412,409		—		412,409		277,201		—		277,201
Applied markets	189,957		—		189,957		177,408		—		177,408
	$	602,366	$	657,076	$	1,259,442	$	454,609	$	853,080	$	1,307,689

Timing of revenue recognition
Products and services transferred at a point in time	$	461,314	$	554,520	$	1,015,834	$	326,662	$	615,106	$	941,768
Services transferred over time	141,052		102,556		243,608		127,947		237,974		365,921
	$	602,366	$	657,076	$	1,259,442	$	454,609	$	853,080	$	1,307,689

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Major Customer Concentration

Revenues from one customer in the Company's Diagnostics segment represent approximately $112.7 million and $205.6 million of the Company's total revenue for the three months ended April 3, 2022 and April 4, 2021, respectively.

On March 31, 2022, the Company was notified by the California Department of Public Health (“CDPH”) that, due to the decrease in COVID-19 cases and the related decreased need for testing for COVID-19, the CDPH intends to end its contract with the Company for the supply and operation of the Valencia Branch Laboratory effective on May 15, 2022. The Company shall recognize the unamortized contract liability pertaining to the nonrefundable prepayment as revenue over the remaining period through May 15, 2022. As of March 31, 2022, the unamortized contract liability was $126.2 million. The contract liability that the Company expects to recognize in revenue in the second quarter of fiscal year 2022 amounts to $117.8 million.

Contract Balances

Contract assets: The unbilled receivables (contract assets) primarily relate to the Company's right to consideration for work completed but not billed at the reporting date. The unbilled receivables are transferred to trade receivables when billed to customers. Contract assets are generally classified as current assets and are included in "Accounts receivable, net" in the condensed consolidated balance sheets.


	(In thousands)
Balance at January 2, 2022	$	72,117
Transferred to trade receivables from unbilled receivables recognized at the beginning of the period	(37,062)
Increases as a result of recognition of revenue before billing to customers, excluding amounts transferred to trade receivables during the period	27,156
Balance at April 3, 2022	$	62,211

Contract liabilities: The contract liabilities primarily relate to the advance consideration received from customers for products and related services for which transfer of control has not occurred at the balance sheet date. Contract liabilities are classified as either current in "Accounts payable" or "Accrued expenses and other current liabilities" or as long-term in "Long-term liabilities" in the condensed consolidated balance sheets based on the timing of when the Company expects to recognize revenue.


	(In thousands)
Balance at January 2, 2022	$	201,073
Revenue recognized that was included in the contract liability balance at the beginning of the period	(57,691)
Increases due to cash received, excluding amounts recognized as revenue during the period	28,486
Balance at April 3, 2022	$	171,868

Note 3: Business Combinations

Acquisitions in fiscal year 2022

During the first quarter of fiscal year 2022, the Company completed the acquisition of two businesses for aggregate consideration of $13.5 million. Identifiable definite-lived intangible assets, such as core technology, acquired as part of these acquisitions had a weighted average amortization period of 5 years.

Acquisitions in fiscal year 2021

Acquisition of BioLegend, Inc. In fiscal year 2021, the Company completed the acquisition of BioLegend, Inc. ("BioLegend") and paid an aggregate consideration of $5.7 billion, net of cash acquired of $292.4 million, reflecting working capital and other adjustments (the "Aggregate Consideration"). The Aggregate Consideration was paid in a combination of $3.3 billion in cash and shares of the Company's common stock having a fair value of approximately $2.6 billion based on the $187.56 per share closing price of the Company's common stock on the New York Stock Exchange on September 17, 2021 (the "Stock Consideration"). The Stock Consideration consisted of 14,066,799 shares of the Company's common stock. BioLegend is recognized as a leading, global provider of life science antibodies and reagents, headquartered in San Diego, California, with approximately 700 employees. The operations for this acquisition is reported within the results of the Company's Discovery & Analytical Solutions segment from the acquisition date. The excess of the purchase price over the fair value of the acquired net assets represents cost and revenue synergies specific to the Company, as well as non-capitalizable intangible assets, such as the employee workforce acquired, and is not tax deductible. Identifiable definite-lived intangible assets, such as core technology,

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trade names, customer relationships and clone library, acquired as part of this acquisition had a weighted-average amortization period of 16.3 years.

BioLegend's revenue and net loss from the acquisition date to January 2, 2022 were $91.7 million and $25.8 million, respectively. The net loss includes $47.0 million of amortization of intangible assets recognized in the acquisition as well as $16.6 million of amortization of fair value adjustment to acquired inventory. The following unaudited pro forma information presents the combined financial results for the Company and BioLegend as if the acquisition of BioLegend had been completed at the beginning of fiscal year 2020:


	Three Months Ended April 4, 2021
	(In thousands, except per share data)
Pro Forma Statement of Operations Information:
Revenue	$	1,385,114
Income from continuing operations	$	370,624
Basic earnings per share:
Income from continuing operations	$	2.94
Diluted earnings per share:
Income from continuing operations	$	2.93

The unaudited pro forma information for the first quarter of fiscal year 2021 has been calculated after applying the Company's accounting policies and the impact of acquisition date fair value adjustments. These pro forma condensed consolidated financial results have been prepared for comparative purposes only and include certain adjustments, such as increased interest expense on debt obtained to finance the transaction, and increased amortization for the fair value of acquired intangible assets.

The pro forma information does not reflect the effect of costs or synergies that would have been expected to result from the integration of the acquisition. The pro forma information does not purport to be indicative of the results of operations that actually would have resulted had the combination occurred at the beginning of the period presented, or of future results of the consolidated entities. The actual results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

Other acquisitions in 2021. During fiscal year 2021, the Company also completed the acquisition of seven other businesses for aggregate consideration of $1.2 billion. The acquired businesses include Oxford Immunotec Global PLC, a company based in Abingdon, UK with approximately 275 employees, for total consideration of $590.9 million and Nexcelom Bioscience Holdings, LLC, a company based in Lawrence, Massachusetts with approximately 130 employees, for total consideration of $267.3 million, and five other businesses, which were acquired for total consideration of $318.6 million. The excess of the purchase prices over the fair values of the acquired businesses' net assets represents cost and revenue synergies specific to the Company, as well as non-capitalizable intangible assets, such as employee workforces acquired, and has been allocated to goodwill, which is not tax deductible. Identifiable definite-lived intangible assets, such as core technology, trade names, and customer relationships, acquired as part of these acquisitions had a weighted-average amortization period of 12.3 years.

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The total purchase price for the acquisitions in fiscal year 2021 has been allocated to the estimated fair value of assets acquired and liabilities assumed as follows:


	BioLegend		Other
	(In thousands)
Fair value of business combination:
Cash payments	$	3,336,115	1,128,584
Common stock issued	2,638,369		—
Other liability	6,857		2,910
Contingent consideration	—		45,031
Working capital and other adjustments	—		183
Less: cash acquired	(292,377)		(195,010)
Total	$	5,688,964	$	981,698
Identifiable assets acquired and liabilities assumed:
Current assets	$	184,704	$	72,104
Property, plant and equipment	147,200		26,507
Other assets	9,330		15,564
Identifiable intangible assets:
Core technology and clone library	782,400		290,089
Trade names and patents	38,000		39,626
Licenses	8,979		—
Customer relationships and backlog	1,714,800		141,670

Goodwill	3,510,710		550,023
Deferred taxes	(668,920)		(86,100)
Deferred revenue	—		(1,197)
Debt assumed	—		(4,628)
Liabilities assumed	(38,239)		(61,960)
Total	$	5,688,964	$	981,698

The preliminary allocations of the purchase prices for acquisitions are based upon initial valuations. The Company's estimates and assumptions underlying the initial valuations are subject to the collection of information necessary to complete its valuations within the measurement periods, which are up to one year from the respective acquisition dates. The primary areas of the preliminary purchase price allocations that are not yet finalized relate to the fair value of certain tangible and intangible assets acquired and liabilities assumed, assets and liabilities related to income taxes and related valuation allowances, and residual goodwill. The Company expects to continue to obtain information to assist in determining the fair values of the net assets acquired at the acquisition dates during the measurement periods. During the measurement periods, the Company will adjust assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition dates that, if known, would have resulted in the recognition of those assets and liabilities as of those dates. These adjustments will be made in the periods in which the amounts are determined and the cumulative effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition dates. All changes that do not qualify as adjustments made during the measurement periods are also included in current period earnings. There were no material measurement period adjustments recognized in the current period.

The allocations of the purchase prices for acquisitions are based on estimates of the fair value of the net assets acquired and are subject to adjustment upon finalization of the purchase price allocations. The accounting for business combinations requires estimates and judgments as to expectations for future cash flows of the acquired business, and the allocation of those cash flows to identifiable intangible assets, in determining the estimated fair values for assets acquired and liabilities assumed.

As of April 3, 2022, the Company may have to pay contingent consideration related to acquisitions with open contingency periods of up to $111.3 million. As of April 3, 2022, the Company has recorded contingent consideration obligations of $49.8 million, of which $1.1 million was recorded in accrued expenses and other current liabilities, and $48.7 million was recorded in long-term liabilities. As of January 2, 2022, the Company had recorded contingent consideration obligations with an estimated fair value of $58.0 million, of which $1.3 million was recorded in accrued expenses and other

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current liabilities, and $56.7 million was recorded in long-term liabilities. The expected maximum earnout period for acquisitions with open contingency periods does not exceed 6.7 years from April 3, 2022, and the remaining weighted average expected earnout period at April 3, 2022 was 5.7 years. If the actual results differ from the estimates and judgments used in these fair values, the amounts recorded in the condensed consolidated financial statements could result in a possible impairment of the intangible assets and goodwill, require acceleration of the amortization expense of definite-lived intangible assets or the recognition of additional contingent consideration which would be recognized as a component of operating expenses from continuing operations.

Total acquisition and divestiture-related costs for the three months ended April 3, 2022 and April 4, 2021 were $20.5 million and $4.4 million, respectively. These amounts included $7.5 million of stock compensation expense related to awards given to BioLegend employees for the three months ended April 3, 2022 and $5.4 million of net foreign exchange gain related to the Company's acquisition of Oxford and $5.4 million of incentive award associated with the Company's acquisition of Meizheng Group for the three months ended April 4, 2021. These acquisition and divestiture-related costs were expensed as incurred and recorded in selling, general and administrative expenses and interest and other expense, net in the Company's condensed consolidated statements of operations.

Note 4: Restructuring and Other Costs, Net

The Company implemented a restructuring plan in the first quarter of fiscal year 2022 consisting of workforce reductions principally intended to realign resources to emphasize growth initiatives and integrate new acquisitions (the "Q1 2022 Plan"). The Company implemented restructuring plans in each quarter of fiscal year 2021 consisting of workforce reductions principally intended to realign resources to emphasize growth initiatives and integrate new acquisitions (the "Q1 2021 Plan", "Q2 2021 Plan", "Q3 2021 Plan" and "Q4 2021 Plan", respectively). Details of the plans initiated in previous years (the “Previous Plans”) are discussed more fully in Note 4, Restructuring and Other Costs, Net, to the audited consolidated financial statements in the 2021 Form 10-K.

The following table summarizes the reductions in headcount, the initial restructuring or contract termination charges by reporting segment, and the dates by which payments were substantially completed, or the dates by which payments are expected to be substantially completed, for restructuring actions implemented during fiscal years 2022 and 2021:


	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 2022 Plan	81	$	5,832	$	399	$	—	$	—	$	6,231	Q4 FY2022	—
Q4 2021 Plan	31	3,139		77		150		—		3,366		Q3 FY2022	Q1 FY2023
Q3 2021 Plan	39	420		366		—		—		786		Q2 FY2022	—
Q2 2021 Plan	25	968		564		—		—		1,532		Q1 FY2022	—
Q1 2021 Plan	77	3,941		1,615		—		—		5,556		Q4 FY2021	—

The Company has terminated various contractual commitments in connection with certain disposal activities and has recorded charges for the costs of terminating these contracts before the end of their terms and the costs that will continue to be incurred for the remaining terms without economic benefit to the Company. The Company recorded net pre-tax charges of $6.3 million in the Discovery & Analytical Solutions segment during the three months ended April 3, 2022 as a result of these contract terminations. The Company recorded net pre-tax gains of $0.4 million in the Diagnostics segment during the three months ended April 3, 2022 as a result of changes in estimates from prior contract terminations.

The Company recorded pre-tax charges of $1.3 million and $0.2 million associated with relocating facilities during the three months ended April 3, 2022 and April 4, 2021, respectively, in the Discovery & Analytical Solutions segment. The Company expects to make payments on these relocation activities through end of fiscal year 2022.

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Note 5: Interest and Other Expense, Net

Interest and other expense, net, consisted of the following:


	Three Months Ended
	April 3, 2022		April 4, 2021
	(In thousands)
Interest income	$	(595)	$	(411)
Interest expense	28,388		14,126


Change in fair value of financial securities	12,125		(19,298)
Other components of net periodic pension credit	(2,362)		(3,719)
Other income, net	(311)		(3,404)
Total interest and other expense (income), net	$	37,245	$	(12,706)

Note 6: Inventories

Inventories consisted of the following:


	April 3, 2022		January 2, 2022
	(In thousands)
Raw materials	$	239,937	$	229,356
Work in progress	77,667		69,744
Finished goods	328,320		325,614
Total inventories	$	645,924	$	624,714

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Note 7: Debt

The Company’s debt consisted of the following:


	April 3, 2022
	Outstanding Principal		Unamortized Debt Discount		Unamortized Debt Issuance Costs		Net Carrying Amount
	(In thousands)
Long-Term Debt:
Senior Unsecured Revolving Credit Facility	$	—	$	—	$	(3,181)	$	(3,181)
Unsecured Term Loan Credit Facility	400,000		—		(477)		399,523
0.550% Senior Unsecured Notes due in 2023 ("2023 Notes")	500,000		(131)		(1,798)		498,071
0.850% Senior Unsecured Notes due in 2024 ("2024 Notes")	800,000		(408)		(4,519)		795,073
1.875% Senior Unsecured Notes due in 2026 ("2026 Notes")	551,800		(2,341)		(2,155)		547,304
1.900% Senior Unsecured Notes due in 2028 ("2028 Notes")	500,000		(338)		(4,078)		495,584
3.3% Senior Unsecured Notes due in 2029 ("2029 Notes")	850,000		(2,199)		(6,086)		841,715
2.55% Senior Unsecured Notes due in March 2031 ("March 2031 Notes")	400,000		(123)		(3,227)		396,650
2.250% Senior Unsecured Notes due in September 2031 ("September 2031 Notes")	500,000		(1,458)		(4,302)		494,240
3.625% Senior Unsecured Notes due in 2051 ("2051 Notes")	400,000		(4)		(4,333)		395,663
Other Debt Facilities, non-current	3,336		—		—		3,336
Total Long-Term Debt	$	4,905,136	$	(7,002)	$	(34,156)	$	4,863,978
Current Portion of Long-term Debt:
Other Debt Facilities, current	3,729		—		—		3,729
Total	$	4,908,865	$	(7,002)	$	(34,156)	$	4,867,707

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	January 2, 2022
	Outstanding Principal		Unamortized Debt Discount		Unamortized Debt Issuance Costs		Net Carrying Amount
	(In thousands)
Long-Term Debt:
Senior Unsecured Revolving Credit Facility	$	—	$	—	$	(3,362)	$	(3,362)
Unsecured Term Loan Credit Facility	500,000		(14)		(658)		499,328
2023 Notes	500,000		(152)		(2,093)		497,755
2024 Notes	800,000		(447)		(4,945)		794,608
2026 Notes	568,600		(2,538)		(2,280)		563,782
2028 Notes	500,000		(348)		(4,200)		495,452
2029 Notes	850,000		(2,252)		(6,234)		841,514
March 2031 Notes	400,000		(126)		(3,294)		396,580
September 2031 Notes	500,000		(1,485)		(4,380)		494,135
2051 Notes	400,000		(4)		(4,335)		395,661
Other Debt Facilities, non-current	4,284		—		—		4,284