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Stock-Based Compensation
 12 Months Ended
Dec. 29, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-based Compensation
Stock-based compensation expense was as follows:
Fiscal Year Ended
(In millions)202420232022
Cost of sales, excluding amortization of intangibles$5.5 $4.3 $2.9 
Selling, marketing and administrative26.0 37.7 27.4 
Research and development3.4 4.9 4.9 
Acquisition and integration costs7.5 16.9 30.4 
Total stock-based compensation expense$42.4 $63.8 $65.6 
Income tax (expense) benefit$(7.1)$1.7 $2.1 
The table above includes $12.2 million and $17.2 million of compensation expense related to liability-classified awards for fiscal years ended 2023 and 2022, respectively, which has been or is expected to be settled in cash. These awards primarily represent the $7.14 per share cash settled portion of the replacement awards issued in connection with the Combinations. Cash paid to settle liability-classified awards was $7.3 million and $20.9 million for fiscal years ended 2023 and 2022, respectively. Amounts related to fiscal year ended 2024 were not material.
For fiscal years ended 2024, 2023 and 2022, the Company recorded $0.6 million, $1.5 million and $3.7 million in stock-based compensation expense, respectively, associated with the Employee Deferred Compensation Plan described in “—Note 12. Stockholders’ Equity.”
Stock Options
A summary of the status of stock option activity for fiscal year ended 2024 is as follows:
(In thousands, except price data)
SharesWeighted-Average
Exercise Price
Per Share		Weighted-Average
Remaining Contractual Term (In Years)		Aggregate Intrinsic Value
Outstanding at December 31, 20231,636 $89.69 
Granted219 42.27 
Exercised(106)21.18 
Cancellations(650)89.04 
Outstanding at December 29, 20241,099 $87.22 5.61$3,484 
Vested and expected to vest at December 29, 20241,084 $87.71 5.56$3,427 
Exercisable at December 29, 2024815 $96.24 4.50$2,598 
Compensation expense related to stock options granted is recognized ratably over the service vesting period for the entire option award. The estimated fair value of each stock option was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions for the option grants:
Fiscal Year Ended
December 29, 2024December 31, 2023January 1, 2023
Risk-free interest rate4.60 %3.52 %1.96 %
Expected option life (in years)5.695.534.80
Volatility rate59 %57 %57 %
Dividend rate0 %0 %0 %
Weighted-average grant date fair value$24.37$48.17$50.62
The computation of the expected option life is based on a weighted-average calculation combining the average life of options that have already been exercised and post-vest cancellations with the estimated life of the remaining vested and unexercised options. The expected volatility is based on the historical volatility of the Company’s common stock. The risk-free interest rate is based on the U.S. Treasury yield curve over the expected term of the option. The Company has never paid any cash dividends on its common stock, and does not anticipate paying any cash dividends in the foreseeable future. Consequently, the Company uses an expected dividend yield of zero in the Black-Scholes option valuation model. The Company’s estimated forfeiture rate is based on its historical experience and future expectations.
The Company’s determination of fair value is affected by the Company’s stock price, as well as a number of assumptions that require judgment. The total intrinsic value was $2.1 million, $4.4 million and $13.7 million for options exercised during fiscal years ended 2024, 2023 and 2022, respectively.
In January 2023, the Compensation Committee of the Board approved a modification to the vesting terms of certain stock options that were previously granted by Ortho to certain Ortho employees, such that the stock options vested on December 31, 2023. The modification resulted in an additional $11.1 million of stock-based compensation expense recognized during fiscal year ended 2023.
As of December 29, 2024, total unrecognized compensation expense related to stock options was approximately $6.3 million and the related weighted-average period over which it is expected to be recognized is approximately 1.8 years. The maximum contractual term of the Company’s stock options is ten years.
RSUs
A summary of the status of RSU activity for fiscal year ended 2024 is as follows:
(In thousands, except price data)
SharesWeighted-Average
Grant Date
Fair Value
Non-vested at December 31, 20231,156 $95.56 
Granted1,240 50.05 
Vested(522)94.55 
Forfeited(492)83.45 
Non-vested at December 29, 20241,382 $59.42 
The total amount of unrecognized compensation expense related to non-vested RSUs as of December 29, 2024 was approximately $53.4 million, which is expected to be recognized over a weighted-average period of approximately 1.8 years.
The fair value of RSUs is determined based on the closing market price of the Company’s common stock on the grant date. The weighted-average fair value of RSUs granted during the fiscal years ended December 31, 2023 and January 1, 2023 was $86.49 and $97.31, respectively.