Revvity, Inc 10-Q for FY2021 Q2

Revvity, Inc. (RVTY)

10-Q 2021-08-10 For: 2021-07-04

Added on April 10, 2026

About this 10-Q

Revvity, Inc filed this 10-Q on August 10, 2021, covering the quarter ended July 4, 2021 (FY2021 Q2).

Headline figures

Quarter ended July 4, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.23B; up 51.3% from $811.72M a year earlier
Net income: $245.93M; up 79.3% from net income of $137.16M a year earlier
Diluted EPS: $2.19; up 78.0% from $1.23 a year earlier

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	Three Months Ended
	July 4, 2021		July 5, 2020
	(In thousands)
Cost of revenue	$	692	$	253
Research and development expenses	366		316
Selling, general and administrative expenses	6,146		9,034


Total stock-based compensation expense	$	7,204	$	9,603


	Three and Six Months Ended
	July 4, 2021		July 5, 2020
Risk-free interest rate	0.6	%	0.9	%
Expected dividend yield	0.2	%	0.3	%
Expected term	5 years		5 years
Expected stock volatility	27.3	%	23.8	%


	Number of Shares	Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term	Total Intrinsic Value
	(In thousands)			(In years)	(In millions)
Outstanding at January 3, 2021	961	$	74.40
Granted	162	134.53
Exercised	(96)	53.98

Forfeited	(7)	88.54
Outstanding at July 4, 2021	1,020	$	85.78	4.3	$	46.2
Exercisable at July 4, 2021	640	$	72.63	3.2	$	36.7


	Number of Shares	Weighted- Average Grant- Date Fair Value
	(In thousands)
Nonvested at January 3, 2021	296	$	85.67
Granted	102	129.27
Vested	(102)	83.16
Forfeited	(5)	86.90
Nonvested at July 4, 2021	291	$	101.83


	Three Months Ended
	July 4, 2021		July 5, 2020
	(In thousands)
Cost of revenue	$	692	$	253
Research and development expenses	366		316
Selling, general and administrative expenses	6,146		9,034


Total stock-based compensation expense	$	7,204	$	9,603


	Defined Benefit Pension Benefits				Postretirement Medical Benefits
	Three Months Ended
	July 4, 2021		July 5, 2020		July 4, 2021		July 5, 2020
	(In thousands)
Service and administrative costs	$	1,338	$	1,688	$	15	$	18
Interest cost	2,376		3,138		17		23
Expected return on plan assets	(6,121)		(5,371)		(397)		(347)



Net periodic pension credit	$	(2,407)	$	(545)	$	(365)	$	(306)

	Defined Benefit Pension Benefits				Postretirement Medical Benefits
	Six Months Ended
	July 4, 2021		July 5, 2020		July 4, 2021		July 5, 2020
	(In thousands)
Service and administrative costs	$	2,672	$	3,595	$	29	$	36
Interest cost	4,753		6,282		34		47
Expected return on plan assets	(12,248)		(10,755)		(794)		(694)



Net periodic benefit credit	$	(4,823)	$	(878)	$	(731)	$	(611)


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


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


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


		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	9
	Notes to Condensed Consolidated Financial Statements	11

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
	Overview	27
	Critical Accounting Policies and Estimates	27
	Consolidated Results of Continuing Operations	28
	Reporting Segment Results of Continuing Operations	31
	Liquidity and Capital Resources	33
	Dividends	35
	Contractual Obligations	35
	Effects of Recently Adopted and Issued Accounting Pronouncements	35

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35

Item 4.	Controls and Procedures	36

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	37

Item 1A.	Risk Factors	37

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45

Item 6.	Exhibits	47

Signatures		48


	July 4, 2021		January 3, 2021
	(In thousands, except share and per share data)
Current assets:
Cash and cash equivalents	$	572,810	$	402,036
Accounts receivable, net	992,602		1,155,109

Inventories	513,429		514,567
Other current assets	181,151		167,208

Total current assets	2,259,992		2,238,920
Property, plant and equipment, net	379,065		368,304
Operating lease right-of-use assets	208,494		207,236
Intangible assets, net	1,561,534		1,365,693
Goodwill	3,844,070		3,447,114
Other assets, net	486,306		333,048

Total assets	$	8,739,461	$	7,960,315
Current liabilities:
Current portion of long-term debt	$	4,669	$	380,948
Accounts payable	324,711		327,325

Accrued expenses and other current liabilities	793,443		943,916

Total current liabilities	1,122,823		1,652,189
Long-term debt	2,348,523		1,609,701
Long-term liabilities	838,974		774,531
Operating lease liabilities	189,334		188,402

Total liabilities	4,499,654		4,224,823
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 112,025,000 shares and 112,090,000 shares at July 4, 2021 and January 3, 2021, respectively	112,025		112,090
Capital in excess of par value	103,394		148,101
Retained earnings	4,116,825		3,507,262
Accumulated other comprehensive loss	(92,437)		(31,961)
Total stockholders’ equity	4,239,807		3,735,492
Total liabilities and stockholders’ equity	$	8,739,461	$	7,960,315


	For the Six-Month Period Ended July 4, 2021
	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	$	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		4,892		—		—		4,987
Issuance of common stock for employee stock purchase plans	—		8		—		—		8
Purchases of common stock	(295)		(42,484)		—		—		(42,779)
Issuance of common stock for long-term incentive program	176		4,274		—		—		4,450
Stock compensation	—		899		—		—		899
Balance, April 4, 2021	$	112,066	$	115,690	$	3,878,721	$	(104,172)	$	4,002,305
Net income	—		—		245,930		—		245,930
Other comprehensive income	—		—		—		11,735		11,735
Dividends	—		—		(7,826)		—		(7,826)
Exercise of employee stock options and related income tax benefits	128		9,070		—		—		9,198
Issuance of common stock for employee stock purchase plans	11		1,613		—		—		1,624
Purchases of common stock	(209)		(29,936)		—		—		(30,145)
Issuance of common stock for long-term incentive program	24		4,998		—		—		5,022
Stock compensation	5		1,959		—		—		1,964
Balance, July 4, 2021	$	112,025	$	103,394	$	4,116,825	$	(92,437)	$	4,239,807


	For the Six-Month Period Ended July 5, 2020
	Common Stock Amount		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	(In thousands)
Balance, December 29, 2019	$	111,140	$	90,357	$	2,811,973	$	(199,646)	$	2,813,824
Impact of adopting ASU 2016-13	—		—		(1,328)		—		(1,328)
Net income	—		—		33,665		—		33,665
Other comprehensive loss	—		—		—		(78,681)		(78,681)
Dividends	—		—		(7,779)		—		(7,779)
Exercise of employee stock options and related income tax benefits	21		1,085		—		—		1,106
Issuance of common stock for employee stock purchase plans	14		1,242		—		—		1,256
Purchases of common stock	(66)		(6,276)		—		—		(6,342)
Issuance of common stock for long-term incentive program	197		2,831		—		—		3,028
Stock compensation	—		997		—		—		997
Balance, April 5, 2020	$	111,306	$	90,236	$	2,836,531	$	(278,327)	$	2,759,746
Net income	—		—		137,162		—		137,162
Other comprehensive loss	—		—		—		61,655		61,655
Dividends	—		—		(7,803)		—		(7,803)
Exercise of employee stock options and related income tax benefits	175		8,792		—		—		8,967
Issuance of common stock for employee stock purchase plans	14		1,291		—		—		1,305
Purchases of common stock	(4)		(323)		—		—		(327)
Issuance of common stock for long-term incentive program	2		5,123		—		—		5,125
Stock compensation	8		1,625		—		—		1,633
Balance, July 5, 2020	$	111,501	$	106,744	$	2,965,890	$	(216,672)	$	2,967,463


	Reportable Segments
	Three Months Ended
	July 4, 2021						July 5, 2020
	Discovery & Analytical Solutions		Diagnostics		Total		Discovery & Analytical Solutions		Diagnostics		Total
	(In thousands)
Primary geographical markets
Americas	$	206,938	$	368,365	$	575,303	$	160,382	$	156,609	$	316,991
Europe	145,576		200,777		346,353		103,497		149,867		253,364
Asia	160,315		146,500		306,815		127,123		114,240		241,363
	$	512,829	$	715,642	$	1,228,471	$	391,002	$	420,716	$	811,718

Primary end-markets
Diagnostics	$	—	$	715,642	$	715,642	$	—	$	420,716	$	420,716
Life sciences	308,681		—		308,681		237,120		—		237,120
Applied markets	204,148		—		204,148		153,882		—		153,882
	$	512,829	$	715,642	$	1,228,471	$	391,002	$	420,716	$	811,718

Timing of revenue recognition
Products and services transferred at a point in time	$	378,310	$	506,603	$	884,913	$	265,903	$	398,646	$	664,549
Services transferred over time	134,519		209,039		343,558		125,099		22,070		147,169
	$	512,829	$	715,642	$	1,228,471	$	391,002	$	420,716	$	811,718


	Preliminary
	(In thousands)
Fair value of business combination:
Cash payments	$	859,548
Other liability	910


Less: cash acquired	(157,278)
Total	$	703,180
Identifiable assets acquired and liabilities assumed:
Current assets	$	35,265
Property, plant and equipment	13,293
Other assets	15,187
Identifiable intangible assets:
Core technology	193,260
Trade names	26,070
Patents	150

Customer relationships	104,270

Goodwill	428,923
Deferred taxes	(68,821)


Liabilities assumed	(44,417)
Total	$	703,180


	Three Months Ended
	July 4, 2021		July 5, 2020
	(In thousands)
Balance at beginning of period	$	12,073	$	8,812
Provision charged to income	3,691		2,712
Payments	(6,182)		(3,266)
Adjustments to previously provided warranties, net	2,455		1,052
Foreign currency translation and acquisitions	(190)		(269)
Balance at end of period	$	11,847	$	9,041


	Three Months Ended
	July 4, 2021		July 5, 2020
	(In thousands)
Balance at beginning of period	$	12,073	$	8,812
Provision charged to income	3,691		2,712
Payments	(6,182)		(3,266)
Adjustments to previously provided warranties, net	2,455		1,052
Foreign currency translation and acquisitions	(190)		(269)
Balance at end of period	$	11,847	$	9,041


	Three Months Ended				Six Months Ended
	July 4, 2021		July 5, 2020		July 4, 2021		July 5, 2020
	(In thousands, except per share data)
Product revenue	$	767,759	$	601,506	$	1,579,311	$	1,027,035
Service revenue	460,712		210,212		956,849		437,079
Total revenue	1,228,471		811,718		2,536,160		1,464,114
Cost of product revenue	365,823		240,494		705,135		446,684
Cost of service revenue	177,454		123,880		360,685		262,063
Total cost of revenue	543,277		364,374		1,065,820		708,747
Selling, general and administrative expenses	281,819		221,026		533,229		429,595
Research and development expenses	65,824		49,521		126,040		98,435
Restructuring and other costs, net	5,063		1,158		10,807		7,016
Operating income from continuing operations	332,488		175,639		800,264		220,321
Interest and other expense (income), net	6,431		10,812		(6,275)		20,805
Income from continuing operations before income taxes	326,057		164,827		806,539		199,516
Provision for income taxes	80,089		27,614		181,228		28,588
Income from continuing operations	245,968		137,213		625,311		170,928

Loss on disposition of discontinued operations before income taxes	—		—		—		—
Provision for income taxes on discontinued operations and dispositions	38		51		76		101
Loss from discontinued operations and dispositions	(38)		(51)		(76)		(101)
Net income	$	245,930	$	137,162	$	625,235	$	170,827
Basic earnings per share:
Income from continuing operations	$	2.20	$	1.23	$	5.58	$	1.54
Loss from discontinued operations and dispositions	(0.00)		(0.00)		(0.00)		(0.00)
Net income	$	2.20	$	1.23	$	5.58	$	1.54
Diluted earnings per share:
Income from continuing operations	$	2.19	$	1.23	$	5.56	$	1.53
Loss from discontinued operations and dispositions	(0.00)		(0.00)		(0.00)		(0.00)
Net income	$	2.19	$	1.23	$	5.56	$	1.53
Weighted average shares of common stock outstanding:
Basic	111,973		111,329		112,000		111,225
Diluted	112,417		111,869		112,456		111,756
Cash dividends declared per common share	$	0.07	$	0.07	$	0.14	$	0.14


	Six Months Ended
	July 4, 2021		July 5, 2020
	(In thousands)
Operating activities:
Net income	$	625,235	$	170,827
Loss from discontinued operations and dispositions, net of income taxes	76		101
Income from continuing operations	625,311		170,928
Adjustments to reconcile income from continuing operations to net cash provided by continuing operations:
Stock-based compensation	12,361		12,654
Restructuring and other costs, net	10,807		7,016
Depreciation and amortization	145,822		120,047
Loss on disposition of businesses and assets, net	—		485

Change in fair value of contingent consideration	477		(11,446)

Amortization of deferred debt financing costs and accretion of discounts	1,724		1,642
Change in fair value of financial securities	(27,931)		—
Amortization of acquired inventory revaluation	5,303		1,485
Changes in assets and liabilities which provided (used) cash, excluding effects from companies acquired:
Accounts receivable, net	155,270		4,312

Inventories	7,239		(126,707)
Accounts payable	(26,795)		20,907

Accrued expenses and other	(148,226)		(2,677)
Net cash provided by operating activities of continuing operations	761,362		198,646


Investing activities:
Capital expenditures	(34,675)		(37,138)
Purchases of investments	(14,507)		(7,393)

Proceeds from disposition of businesses and assets	—		1,815
Proceeds from surrender of life insurance policies	—		131
Cash paid for acquisitions, net of cash, cash equivalents and restricted cash acquired	(702,697)		(2,990)
Net cash used in investing activities of continuing operations	(751,879)		(45,575)


Financing activities:


	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)
Q2 2021 Plan	25	$	968	$	564	$	—	$	—	$	1,532	Q1 FY2022	—
Q1 2021 Plan	77	3,941		1,615		—		—		5,556		Q4 FY2021	—
Q3 2020 Plan	23	2,080		901		—		—		2,981		Q2 FY2021	—
Q1 2020 Plan	32	2,312		1,134		92		682		4,220		Q4 FY2020	Q1 FY2022


	July 4, 2021
	Outstanding Principal		Unamortized Debt Discount		Unamortized Debt Issuance Costs		Net Carrying Amount
	(In thousands)
Long-Term Debt:
Senior Unsecured Revolving Credit Facility	$	125,000	$	—	$	(2,264)	$	122,736
1.875% Senior Unsecured Notes due in 2026 ("2026 Notes")	592,300		(2,904)		(2,531)		586,865
3.3% Senior Unsecured Notes due in 2029 ("2029 Notes")	850,000		(2,368)		(6,556)		841,076
2.55% Senior Unsecured Notes due in 2031	400,000		(136)		(3,563)		396,301
3.625% Senior Unsecured Notes due in 2051	400,000		(4)		(4,545)		395,451
Other Debt Facilities, non-current	6,094		—		—		6,094
Total Long-Term Debt	$	2,373,394	$	(5,412)	$	(19,459)	$	2,348,523
Current Portion of Long-term Debt:

Other Debt Facilities, current	4,669		—		—		4,669
Total	$	2,378,063	$	(5,412)	$	(19,459)	$	2,353,192


	Discovery & Analytical Solutions		Diagnostics		Consolidated
	(In thousands)
Balance at January 3, 2021	$	1,755,887	$	1,691,227	$	3,447,114
Foreign currency translation	(19,151)		(17,806)		(36,957)

Acquisitions, earn-outs and other	155,199		278,714		433,913
Balance at July 4, 2021	$	1,891,935	$	1,952,135	$	3,844,070


			Fair Value Measurements at July 4, 2021 Using:
	Total Carrying Value at July 4, 2021		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Marketable securities	$	50,100	$	50,100	$	—	$	—
Foreign exchange derivative assets	2,663		—		2,663		—
Foreign exchange derivative liabilities	(13,670)		—		(13,670)		—
Contingent consideration	(3,334)		—		—		(3,334)


			Fair Value Measurements at January 3, 2021 Using:
	Total Carrying Value at January 3, 2021		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Marketable securities	$	2,154	$	2,154	$	—	$	—
Foreign exchange derivative assets	31,248		—		31,248		—
Foreign exchange derivative liabilities	(21,413)		—		(21,413)		—
Contingent consideration	(2,953)		—		—		(2,953)


	Issuer Repurchases of Equity Securities
Period	Total Number of Shares Purchased(1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)	Maximum Number (or Approximate Dollar Value) Shares that May Yet Be Purchased Under the Plans or Programs
April 5, 2021—May 2, 2021	4,063	$	131.09	—	$	216,371,739
May 3, 2021—May 30, 2021	124,062	144.27		120,000	199,056,763
May 31, 2021—July 4, 2021	80,497	145.52		80,000	187,415,787
Activity for quarter ended July 4, 2021	208,622	$	144.50	200,000	$	187,415,787


Exhibit Number						Exhibit Name

31.1						Certification of Chief Executive Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2						Certification of Chief Financial Officer pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1						Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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	PERKINELMER, INC.

August 10, 2021	By:	/s/ JAMES M. MOCK
		James M. Mock Senior Vice President and Chief Financial Officer (Principal Financial Officer)


	PERKINELMER, INC.

August 10, 2021	By:	/s/ ANDREW OKUN
		Andrew Okun Vice President, Chief Accounting Officer and Treasurer (Principal Accounting Officer)


Date:	August 10, 2021	/s/ PRAHLAD SINGH, PhD
		Prahlad Singh, PhD President and Chief Executive Officer


Dated:	August 10, 2021	/S/ PRAHLAD SINGH, PhD
		Prahlad Singh, PhD President and Chief Executive Officer

Dated:	August 10, 2021	/S/ JAMES M. MOCK
		James M. Mock Senior Vice President and Chief Financial Officer