EQUITY AND NONCONTROLLING INTERESTS

12 Months Ended

Dec. 26, 2020

Earnings Per Share

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


	Fiscal Year
	2020		2019		2018
	(in thousands)
Numerator:
Income from continuing operations, net of income taxes	$	365,306	$	254,061	$	227,218
Income from discontinued operations, net of income taxes	—		—		1,506
Less: Net income attributable to noncontrolling interests	1,002		2,042		2,351
Net income attributable to common shareholders	$	364,304	$	252,019	$	226,373

Denominator:
Weighted-average shares outstanding—Basic	49,550		48,730		47,947
Effect of dilutive securities:
Stock options, restricted stock, restricted stock units and performance share units	1,061		963		1,071
Weighted-average shares outstanding—Diluted	50,611		49,693		49,018

Options to purchase 0.2 million shares, 0.4 million shares, and 0.5 million shares for fiscal years 2020, 2019, and 2018, respectively, as well as a non-significant number of restricted stock, 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 2020, 2019, and 2018 excluded the impact of 0.9 million shares, 1.0 million shares and 1.0 million shares, respectively, of non-vested restricted stock, RSUs and PSUs.

Treasury Shares

The Company’s Board of Directors has authorized a $1.3 billion stock repurchase program. Under its authorized stock repurchase program, the Company did not repurchase any shares in fiscal years 2020, 2019, and 2018. As of December 26, 2020, 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 $24.0 million, 0.1 million shares for $18.1 million, and 0.1 million shares for $13.8 million in fiscal years 2020, 2019, and 2018, respectively, from such netting.

In fiscal years 2020 and 2019, 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 $24.0 million and 0.1 million treasury shares totaling $18.1 million, 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 $19.2 million and $4.8 million, respectively, in fiscal year 2020 and $13.8 million and $4.3 million, respectively, in fiscal year 2019.

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 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	—		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)
Other comprehensive income before reclassifications (1)	20,909		15,747		36,656
Amounts reclassified from accumulated other comprehensive income	—		17,861		17,861
Net current period other comprehensive income	20,909		33,608		54,517
Income tax expense	7,215		8,157		15,372
December 26, 2020	$	(73,884)	$	(64,990)	$	(138,874)
(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, Canadian Dollar, and Chinese Yuan Renminbi and to a lesser extent due to the impact of changes in the Japanese Yen and Brazilian Real.

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 2020, 2019, and 2018 was not significant.

Redeemable Noncontrolling Interests

The Company holds a 92% ownership interest in Vital River, a commercial provider of research models and related services in China as of December 26, 2020. In 2019, the Company purchased an additional 5% equity interest in Vital River for $7.9 million. 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. In 2019, 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 ($16.3 million as of December 26, 2020) 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 amount that the Company could be required to pay to purchase the remaining 8% equity interest is not limited.

As part of the Citoxlab acquisition in 2019, the Company acquired an approximate 90% equity interest in a subsidiary that was fully consolidated under the voting interest model, which included an approximate 10% redeemable noncontrolling interest. In February 2020, the Company purchased the remaining approximate 10% noncontrolling interest for approximately $4 million and assumption of a contingent consideration liability of approximately $2 million payable to the former shareholders. See Note 7. “Fair Value”.

In 2019, the Company acquired an 80% equity interest that is fully consolidated under the voting interest model, which included a 20% redeemable noncontrolling interest. The Company has the right to purchase, and the noncontrolling interest holders have 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 predetermined 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 amount that the Company could be required to pay to purchase the remaining 20% equity interest is not limited.

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


	Fiscal Year
	2020		2019
	(in thousands)
Beginning balance	$	28,647	$	18,525
Purchase of a 10% redeemable noncontrolling interest	(3,732)		—
Adjustment to Vital River redemption value	—		1,451
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% noncontrolling interest through acquiring Citoxlab	—		4,035
Acquisition of a 20% noncontrolling interest	—		8,740
Net loss attributable to noncontrolling interests	(852)		(42)
Foreign currency translation	1,436		(221)
Ending balance	$	25,499	$	28,647