Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This quarterly report on Form 10-Q, including the following management’s discussion and analysis, contains forward-looking information that you should read in conjunction with the condensed consolidated financial statements and notes to the condensed consolidated financial statements that we have included elsewhere in this report. For this purpose, any statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. Words such as “believes,” “plans,” “anticipates,” “intends,” “expects,” “will” and similar expressions are intended to identify forward-looking statements. Our actual results may differ materially from the plans, intentions or expectations we disclose in the forward-looking statements we make. We have included important factors below under the heading “Risk Factors” in Part II, Item 1A. that we believe could cause actual results to differ materially from the forward-looking statements we make. We are not obligated to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

We are a leading provider of products, services and solutions for the diagnostics, life sciences and applied markets. Through our advanced technologies and differentiated solutions, we address critical issues that help to improve lives and the world around us.

The principal products and services of our two operating segments are:

• Discovery & Analytical Solutions. Provides products and services targeted towards the life sciences and applied markets.

• Diagnostics. Develops diagnostics, tools and applications focused on clinically-oriented customers, especially within the reproductive health, immunodiagnostics and applied genomics markets.

Overview of the Second Quarter of Fiscal Year 2022

Our overall revenue in the second quarter of fiscal year 2022 was $1,229.6 million which increased by $1.1 million, or 0.1%, as compared to the second quarter of fiscal year 2021, reflecting an increase of $147.7 million, or 29%, in our Discovery & Analytical Solutions segment revenue, partially offset by a decrease of $146.6 million, or 20%, in our Diagnostics segment revenue. The increase in our Discovery & Analytical Solutions segment revenue for the second quarter of fiscal year 2022 was driven by an increase of $134.0 million in our life sciences market revenue and $13.7 million in our applied markets revenue, partially offset by a decrease of approximately 5% in revenue attributable to unfavorable changes in foreign exchange rates. The decrease in our Diagnostics segment revenue for the second quarter of fiscal year 2022 was driven by a decrease in revenue from our COVID-19 product offerings of $143.5 million, a decrease in revenue from our core portfolio of $3.1 million, and a decrease of approximately 4% in revenue attributable to unfavorable changes in foreign exchange rates.

Our consolidated gross margins decreased 160 basis points in the second quarter of fiscal year 2022, as compared to the second quarter of fiscal year 2021, primarily due to increased amortization of acquired intangible assets and lower COVID-19 revenue partially offset by a favorable shift in product mix and service productivity. Our consolidated operating margins decreased 666 basis points in the second quarter of fiscal year 2022, as compared to the second quarter of fiscal year 2021, primarily due to lower COVID-19 revenue, increased costs related to amortization of acquired intangible assets, and investments in new product development and growth initiatives.

During the second quarter of fiscal year 2022, we experienced persistent global supply chain constraints for certain components used in our operations, particularly components used by our Discovery & Analytical Solutions segment. We continue to actively work with our suppliers to understand the existing and potential impacts to our supply chain; as such, we are taking actions to mitigate these impacts, including investment in tools, which we launched in the first quarter of fiscal year 2022 in several distribution centers, to enable us to adopt and enforce a global policy on packaging and shipping, changing our mode of outbound shipments from expedite shipping to economy mode shipping and consolidate packaging, more frequent renegotiation with our top shipping carriers, and accelerating the purchases of parts and materials, which has resulted in increased raw material balances on our balance sheet as of July 3, 2022. In the second quarter of fiscal year 2022, supply chain disruptions and inflation increased our cost of goods sold by approximately $10.0 million as compared to the second quarter of fiscal year 2021. We anticipate continued supply chain disruptions and inflation through the remainder of fiscal year 2022.

On August 1, 2022, we entered into an agreement with the intention to divest our Analytical, Food and Enterprise Services businesses for total consideration of $2.45 billion in cash, $2.30 billion of which will be received at the closing and $150 million of which will be payable contingent on the exit valuation that the proposed buyer receives on sale or other capital

events related to the businesses. The transaction is expected to close in the first quarter of fiscal year 2023, subject to regulatory approvals and other customary closing conditions.

Critical Accounting Policies and Estimates

The preparation of condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to accounting for business combinations, long-lived assets, including goodwill and other intangible assets and employee compensation and benefits. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting policies are those policies that affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements. We believe our critical accounting policies include policies regarding business combinations, valuation of long-lived assets, including goodwill and other intangibles and employee compensation and benefits.

For a more detailed discussion of our critical accounting policies and estimates, refer to the Notes to our audited consolidated financial statements and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the fiscal year ended January 2, 2022 (our “2021 Form 10-K”), as filed with the Securities and Exchange Commission. There have been no significant changes in our critical accounting policies and estimates during the six months ended July 3, 2022.

Consolidated Results of Continuing Operations

Revenue

Revenue for the three months ended July 3, 2022 was $1,229.6 million, as compared to $1,228.5 million for the three months ended July 4, 2021, an increase of $1.1 million, or approximately 0.1%, which includes an approximate 10% increase in revenue attributable to acquisitions and divestitures, partially offset by a 4% decrease in revenue attributable to unfavorable changes in foreign exchange rates. The analysis in the remainder of this paragraph compares segment revenue for the three months ended July 3, 2022 as compared to the three months ended July 4, 2021 and includes the effect of foreign exchange rate fluctuations, acquisitions and divestitures. Our Diagnostics segment revenue was $569.0 million for the three months ended July 3, 2022, as compared to $715.6 million for the three months ended July 4, 2021, a decrease of $146.6 million, or 20%, primarily due to a decrease in revenue from our COVID-19 product offerings of $143.5 million and a decrease of approximately 4% in revenue due to unfavorable changes in foreign exchange rates, as well as a decrease in revenue from our core portfolio of $3.1 million. Our Discovery & Analytical Solutions segment revenue was $660.5 million for the three months ended July 3, 2022, as compared to $512.8 million for the three months ended July 4, 2021, an increase of $147.7 million, or 29%, driven by a 20% increase in revenue attributable to acquisitions and divestitures, and an increase of $134.0 million in our life sciences market revenue and $13.7 million in our applied markets revenue, partially offset by a 5% decrease in revenue attributable to unfavorable changes in foreign exchange rates. As a result of adjustments to deferred revenue related to certain acquisitions required by business combination accounting rules, we did not recognize $0.2 million of revenue for the three months ended July 3, 2022 and $1.0 million of revenue for the three months ended July 4, 2021 that otherwise would have been recorded by the acquired businesses during each of the respective periods.

Revenue for the six months ended July 3, 2022 was $2,489.0 million, as compared to $2,536.2 million for the six months ended July 4, 2021, a decrease of $47.1 million, or approximately 2%, which includes an approximate 10% increase in revenue attributable to acquisitions and divestitures, partially offset by a 3% decrease in revenue attributable to unfavorable changes in foreign exchange rates. The analysis in the remainder of this paragraph compares segment revenue for the six months ended July 3, 2022 as compared to the six months ended July 4, 2021 and includes the effect of foreign exchange rate fluctuations, acquisitions and divestitures. Our Diagnostics segment revenue was $1,226.1 million for the six months ended July 3, 2022, as compared to $1,568.7 million for the six months ended July 4, 2021, a decrease of $342.6 million, or 22%, primarily due to a decrease in revenue from our COVID-19 product offerings of $383.7 million and a decrease of approximately 3% in revenue due to unfavorable changes in foreign exchange rates, which were partially offset by increase in revenue across our core portfolio of $41.1 million. Our Discovery & Analytical Solutions segment revenue was $1,262.9 million for the six months ended July 3, 2022, as compared to $967.4 million for the six months ended July 4, 2021, an increase of $295.5 million, or 31%, driven by a 21% increase in revenue attributable to acquisitions and divestitures, and an increase of $269.2 million in our life sciences market revenue and $26.3 million in our applied markets revenue, partially offset by a decrease of approximately 4% in revenue due to unfavorable changes in foreign exchange rates. As a result of adjustments to deferred revenue related to

certain acquisitions required by business combination accounting rules, we did not recognize $0.4 million of revenue for the six months ended July 3, 2022 and $2.2 million of revenue for the six months ended July 4, 2021 that otherwise would have been recorded by the acquired businesses during each of the respective periods.

Cost of Revenue

Cost of revenue for the three months ended July 3, 2022 was $563.4 million, as compared to $543.3 million for the three months ended July 4, 2021, an increase of $20.1 million, or approximately 4%. As a percentage of revenue, cost of revenue increased to 45.8% for the three months ended July 3, 2022, from 44.2% for the three months ended July 4, 2021, resulting in a decrease in gross margin of 160 basis points to 54.2% for the three months ended July 3, 2022, from 55.8% for the three months ended July 4, 2021. For the three months ended July 3, 2022, costs of goods sold increased by approximately $10.0 million, as compared to three months ended July 4, 2021, as a result of supply chain disruptions and inflation. Amortization of intangible assets increased and was $39.2 million for the three months ended July 3, 2022, as compared to $22.7 million for the three months ended July 4, 2021. Amortization of intangible assets from our recent acquisitions amounted to $22.7 million for the three months ended July 3, 2022. The amortization of purchase accounting adjustments to record the inventory from certain acquisitions added an incremental expense of $16.9 million for the three months ended July 3, 2022, as compared to $2.3 million for the three months ended July 4, 2021. Stock compensation expense related to awards given to BioLegend employees post-acquisition added an incremental expense of $1.5 million for the three months ended July 3, 2022. Purchase accounting adjustments for depreciation on property, plant and equipment added an incremental expense of $0.1 million for the three months ended July 3, 2022. The overall decrease in gross margin was partially offset by a favorable shift in product mix and service productivity.

Cost of revenue for the six months ended July 3, 2022 was $1,143.6 million, as compared to $1,065.8 million for the six months ended July 4, 2021, an increase of $77.8 million, or approximately 7%. As a percentage of revenue, cost of revenue increased to 45.9% for the six months ended July 3, 2022, from 42.0% for the six months ended July 4, 2021, resulting in a decrease in gross margin of 392 basis points to 54.1% for the six months ended July 3, 2022, from 58.0% for the six months ended July 4, 2021. For the six months ended July 3, 2022, costs of goods sold increased by approximately $30.0 million, as compared to the six months ended July 4, 2021, as a result of supply chain disruptions and inflation. Amortization of intangible assets increased and was $79.3 million for the six months ended July 3, 2022, as compared to $43.0 million for the six months ended July 4, 2021. Amortization of intangible assets from our recent acquisitions amounted to $45.6 million for the six months ended July 3, 2022. The amortization of purchase accounting adjustments to record the inventory from certain acquisitions added an incremental expense of $33.7 million for the six months ended July 3, 2022, as compared to $5.3 million for the six months ended July 4, 2021. Stock compensation expense related to awards given to BioLegend employees post-acquisition added an incremental expense of $3.2 million for the six months ended July 3, 2022. Purchase accounting adjustments for depreciation on property, plant and equipment added an incremental expense of $0.3 million for the six months ended July 3, 2022. The overall decrease in gross margin was partially offset by a favorable shift in product mix and service productivity.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended July 3, 2022 were $330.0 million, as compared to $281.8 million for the three months ended July 4, 2021, an increase of $48.2 million, or 17%. As a percentage of revenue, selling, general and administrative expenses increased and were 26.8% for the three months ended July 3, 2022, as compared to 22.9% for the three months ended July 4, 2021. Amortization of intangible assets increased and was $61.7 million for the three months ended July 3, 2022, as compared to $36.9 million for the three months ended July 4, 2021. Amortization of intangible assets from our recent acquisitions amounted to $34.3 million for the three months ended July 3, 2022. Purchase accounting adjustments added an incremental expense of $0.7 million for the three months ended July 3, 2022, which primarily consisted of a change in contingent consideration, as compared to $0.2 million for the three months ended July 4, 2021. Acquisition and divestiture-related expenses, which primarily consisted of legal, due diligence and integration costs, added an incremental expense of $19.0 million for the three months ended July 3, 2022, as compared to $10.6 million for the three months ended July 4, 2021. Legal and settlement costs for significant litigation matters, net of reversals, decreased expenses by $1.7 million for the three months ended July 3, 2022. In addition to the above items, the increase in selling, general and administrative expenses was primarily the result of costs related to investments in people, digital capabilities, innovation, and recent acquisitions.

Selling, general and administrative expenses for the six months ended July 3, 2022 were $664.4 million, as compared to $533.2 million for the six months ended July 4, 2021, an increase of $131.2 million, or 25%. As a percentage of revenue, selling, general and administrative expenses increased and were 26.7% for the six months ended July 3, 2022, as compared to 21.0% for the six months ended July 4, 2021. Amortization of intangible assets increased and was $124.3 million for the six months ended July 3, 2022, as compared to $70.7 million for the six months ended July 4, 2021. Amortization of intangible assets from our recent acquisitions amounted to $68.4 million for the six months ended July 3, 2022. Purchase accounting

adjustments added an incremental expense of $1.4 million for the six months ended July 3, 2022, which primarily consisted of a change in contingent consideration, as compared to $0.5 million for the six months ended July 4, 2021. Acquisition and divestiture-related expenses, which primarily consisted of legal, due diligence and integration costs, added an incremental expense of $36.4 million for the six months ended July 3, 2022, as compared to $20.3 million for the six months ended July 4, 2021. Legal and settlement costs for significant litigation matters, net of reversals, were $1.3 million for the six months ended July 3, 2022. In addition to the above items, the increase in selling, general and administrative expenses was primarily the result of costs related to investments in people, digital capabilities, innovation, and recent acquisitions.

Research and Development Expenses

Research and development expenses for the three months ended July 3, 2022 were $73.4 million, as compared to $65.8 million for the three months ended July 4, 2021, an increase of $7.5 million, or 11%. The increase in research and development expenses from our recent acquisitions were $9.7 million for the three months ended July 3, 2022. As a percentage of revenue, research and development expenses increased and were 6.0% for the three months ended July 3, 2022, as compared to 5.4% for the three months ended July 4, 2021. Stock compensation expense related to awards given to BioLegend employees post-acquisition added an incremental expense of $1.3 million for the three months ended July 3, 2022. Purchase accounting adjustments for depreciation on property, plant and equipment added an incremental expense of $0.1 million for the three months ended July 3, 2022. Excluding the factors above, the net decrease in research and development expenses was driven by a decrease in COVID-19-related research and development expenses and timing of non-COVID-19 investments in new product development.

Research and development expenses for the six months ended July 3, 2022 were $150.0 million, as compared to $126.0 million for the six months ended July 4, 2021, an increase of $23.9 million, or 19%. The increase in research and development expenses from our recent acquisitions were $22.4 million for the six months ended July 3, 2022. As a percentage of revenue, research and development expenses increased and were 6.0% for the six months ended July 3, 2022, as compared to 5.0% for the six months ended July 4, 2021. Stock compensation related to awards given to BioLegend employees post-acquisition added an incremental expense of $2.8 million for the six months ended July 3, 2022. Purchase accounting adjustments for depreciation on property, plant and equipment added an incremental expense of $0.1 million for the six months ended July 3, 2022. Excluding the factors above, the net decrease in research and development expenses was driven by a decrease in COVID-19-related research and development expenses and timing of non-COVID-19 investments in new product development.

Restructuring and Other Costs, Net

We implemented restructuring plans in the first and second quarters 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" and "Q2 2022 Plan", respectively). We 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 our 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)
Q2 2022 Plan			243						$	7,336					$	2,052					$	—					$	—					$	9,388					Q3 FY2022						—
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						—

We terminated various contractual commitments in connection with certain disposal activities and have 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. We recorded net pre-tax charges of $1.8 million and $8.0 million in the Discovery & Analytical Solutions segment during the three and six months ended July 3, 2022, respectively, as a result of these contract terminations. We recorded net pre-tax charges (gains) of $0.3 million and $(0.1) million in the Diagnostics segment during the three and six months ended July 3, 2022, respectively, as a result of changes in estimates from prior contract terminations.

We recorded pre-tax charges of $0.3 million and $1.7 million associated with closure of facilities during the three and six months ended July 3, 2022, respectively, in the Discovery & Analytical Solutions segment. We recorded pre-tax charges of $0.1 million associated with closure of facilities during each of the three and six months ended July 3, 2022 in the Diagnostics segment. We expect to make payments on these relocation activities through end of fiscal year 2022.

Interest and Other Expense, Net

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

			Three Months Ended												Six Months Ended
			July 3, 2022						July 4, 2021						July 3, 2022						July 4, 2021
			(In thousands)
Interest income			$	(762)					$	(367)					$	(1,357)					$	(778)
Interest expense			27,128						16,750						55,516						30,876
Change in fair value of financial securities			(2,910)						(8,633)						9,215						(27,931)
Other components of net periodic pension credit			(2,324)						(3,785)						(4,686)						(7,504)
Other expense (income), net			5,254						2,466						4,943						(938)
Total interest and other expense (income), net			$	26,386					$	6,431					$	63,631					$	(6,275)

The increase in interest and other expense (income), net, for the three months ended July 3, 2022, as compared to the three months ended July 4, 2021, was primarily due to an increase of $10.4 million in interest expense, which was the result of an overall increase in debt, a decrease in the change in fair value of financial securities of $5.7 million, and an increase in other components of net periodic pension cost of $1.5 million, partially offset by an increase in other expense, net of $2.8 million.

The increase in interest and other expense (income), net, for the six months ended July 3, 2022, as compared to the six months ended July 4, 2021, was primarily due to an increase of $24.6 million in interest expense, which was the result of an overall increase in debt, a change in fair value of financial securities of $9.2 million that was recognized during the six months ended July 3, 2022 as compared to $(27.9) million that was recognized during the six months ended July 4, 2021, an increase in other components of net periodic pension cost of $2.8 million and an increase in other expense, net of $5.9 million.

Provision for Income Taxes

The provision for income taxes from continuing operations was $45.2 million for the three months ended July 3, 2022, as compared to $80.1 million for the three months ended July 4, 2021. The provision for income taxes from continuing operations was $85.8 million for the six months ended July 3, 2022, as compared to $181.2 million for the six months ended July 4, 2021.

The effective tax rate from continuing operations was 20.2% and 19.4% for the three and six months ended July 3, 2022, respectively, as compared to 24.6% and 22.5% for the three and six months ended July 4, 2021, respectively. The lower effective tax rate during the three and six months ended July 3, 2022, as compared to the three and six months ended July 4, 2021, was primarily due to projected lower income in certain higher tax rate jurisdictions in fiscal year 2022 as compared to fiscal year 2021, and a one-time discrete expense of $14.6 million due to the remeasurement of deferred tax liabilities in connection with a rate change in the United Kingdom that was recorded in the three months ended July 4, 2021.

The net discrete tax benefit for the three and six months ended July 3, 2022 primarily related to excess tax benefits on stock compensation of $1.8 million and $2.0 million, respectively. The discrete tax expense in the second quarter of fiscal year 2021 included $13.4 million due to the remeasurement of deferred tax assets and liabilities in connection with a rate change in the United Kingdom. The remaining discrete tax benefit for the three and six months ended July 4, 2021, excluding the United Kingdom rate change, primarily related to excess tax benefits on stock compensation of $1.1 million and $4.1 million, respectively, and $6.4 million resulting from a transaction that was completed during the second quarter of fiscal year 2021, offset by an accrual for uncertain tax positions of $2.6 million and return to provision adjustments of $3.7 million.

Reporting Segment Results of Continuing Operations

Discovery & Analytical Solutions

Revenue for the three months ended July 3, 2022 was $660.5 million, as compared to $512.8 million for the three months ended July 4, 2021, an increase of $147.7 million, or 29%, which includes an approximate 20% increase in revenue attributable to acquisitions and divestitures and a decrease of approximately 5% in revenue attributable to unfavorable changes in foreign exchange rates. The life sciences market revenue increased by $134.0 million while the applied markets revenue increased by $13.7 million. The analysis in the remainder of this paragraph compares selected revenue by end market for the three months ended July 3, 2022, as compared to the three months ended July 4, 2021, and includes the effect of foreign exchange fluctuations, acquisitions and divestitures. The increase in our life sciences revenue was the result of an increase in revenue from businesses acquired in fiscal year 2021 along with organic growth in our pharmaceutical and biotechnology markets. The increase in our applied markets revenue was driven by increased demand from our industrial and environmental markets.

Revenue for the six months ended July 3, 2022 was $1,262.9 million, as compared to $967.4 million for the six months ended July 4, 2021, an increase of $295.5 million, or 31%, which includes an approximate 21% increase in revenue attributable to acquisitions and divestitures and a decrease of approximately 4% in revenue attributable to unfavorable changes in foreign exchange rates. The life sciences market revenue increased by $269.2 million while the applied markets revenue increased by $26.3 million. The analysis in the remainder of this paragraph compares selected revenue by end market for the six months ended July 3, 2022, as compared to the six months ended July 4, 2021, and includes the effect of foreign exchange fluctuations, acquisitions and divestitures. The increase in our life sciences revenue was the result of an increase in revenue from businesses acquired in fiscal year 2021 along with organic growth in our pharmaceutical and biotechnology markets. The increase in our applied markets revenue was driven by increased demand from our industrial, food and environmental markets.

Operating income from continuing operations for the three months ended July 3, 2022 was $70.1 million, as compared to $64.2 million for the three months ended July 4, 2021, an increase of $6.0 million, or 9%. Amortization of intangible assets was $67.5 million for the three months ended July 3, 2022, as compared to $23.1 million for the three months ended July 4, 2021. Amortization of intangible assets from our recent acquisitions amounted to $51.6 million for the three months ended July 3, 2022. Restructuring and other charges, net, were $9.4 million for the three months ended July 3, 2022, as compared to $3.6 million for the three months ended July 4, 2021. The amortization of purchase accounting adjustments to record the inventory from certain acquisitions was $16.6 million for the three months ended July 3, 2022, as compared to $0.6 million for the three months ended July 4, 2021. Acquisition and divestiture-related expenses, contingent consideration and other costs added an

incremental expense of $15.7 million for the three months ended July 3, 2022, as compared to $9.5 million for the three months ended July 4, 2021. Legal and settlement costs for significant litigation matters, net of reversals, decreased expenses by $1.7 million for the three months ended July 3, 2022. Excluding the factors noted above, operating income increased for the three months ended July 3, 2022, as compared to the three months ended July 4, 2021, primarily as a result of higher sales volume and favorable product mix, partially offset by increased investments in new product development and growth initiatives.

Operating income from continuing operations for the six months ended July 3, 2022 was $84.6 million, as compared to $107.1 million for the six months ended July 4, 2021, a decrease of $22.5 million, or 21%. Amortization of intangible assets was $135.3 million for the six months ended July 3, 2022, as compared to $43.5 million for the six months ended July 4, 2021. Amortization of intangible assets from our recent acquisitions amounted to $102.8 million for the six months ended July 3, 2022. Restructuring and other charges, net, were $22.8 million for the six months ended July 3, 2022, as compared to $7.7 million for the six months ended July 4, 2021. The amortization of purchase accounting adjustments to record the inventory from certain acquisitions was $33.2 million for the six months ended July 3, 2022, as compared to $1.6 million for the six months ended July 4, 2021. Acquisition and divestiture-related expenses, contingent consideration and other costs added an incremental expense of $29.7 million for the six months ended July 3, 2022, as compared to $16.5 million for the six months ended July 4, 2021. Legal and settlement costs for significant litigation matters, net of reversals, decreased expenses by $1.3 million for the six months ended July 3, 2022. Excluding the factors noted above, operating income increased for the six months ended July 3, 2022, as compared to the six months ended July 4, 2021, primarily as a result of higher sales volume and favorable product mix, partially offset by increased investments in new product development and growth initiatives.

Diagnostics

Revenue for the three months ended July 3, 2022 was $569.0 million, as compared to $715.6 million for the three months ended July 4, 2021, a decrease of $146.6 million, or 20%, which includes a 4% decrease in revenue attributable to unfavorable changes in foreign exchange rates, partially offset by an increase of approximately 2% in revenue attributable to acquisitions and divestitures. As a result of adjustments to deferred revenue related to certain acquisitions required by business combination accounting rules, we did not recognize $0.2 million of revenue in our Diagnostics segment for each of the three months ended July 3, 2022 and July 4, 2021 that otherwise would have been recorded by the acquired businesses during each of the respective periods. The decrease in our Diagnostics segment revenue for the three months ended July 3, 2022 was due to a decrease in revenue from our COVID-19 product offerings of $143.5 million and a decrease of approximately 4% in revenue due to unfavorable changes in foreign exchange rates, as well as a decrease in revenue from our core portfolio of $3.1 million.

Revenue for the six months ended July 3, 2022 was $1,226.1 million, as compared to $1,568.7 million for the six months ended July 4, 2021, a decrease of $342.6 million, or 22%, which includes a 3% decrease in revenue attributable to unfavorable changes in foreign exchange rates, offset by an increase of approximately 3% in revenue attributable to acquisitions and divestitures. As a result of adjustments to deferred revenue related to certain acquisitions required by business combination accounting rules, we did not recognize $0.4 million of revenue in our Diagnostics segment for each of the six months ended July 3, 2022 and July 4, 2021 that otherwise would have been recorded by the acquired businesses during each of the respective periods. The decrease in our Diagnostics segment revenue for the six months ended July 3, 2022 was due to a decrease in revenue from our COVID-19 product offerings of $383.7 million and a decrease of approximately 3% in revenue due to unfavorable changes in foreign exchange rates, which were partially offset by increase in revenue across our core portfolio of $41.1 million. Due to the termination of our contract with CDPH, we recognized the contract liability pertaining to the nonrefundable prepayment amounting to $117.8 million as revenue in the second quarter of fiscal year 2022.

Operating income from continuing operations for the three months ended July 3, 2022 was $201.2 million, as compared to $286.3 million for the three months ended July 4, 2021, a decrease of $85.0 million, or 30%. Amortization of intangible assets decreased and was $33.4 million for the three months ended July 3, 2022, as compared to $36.5 million for the three months ended July 4, 2021. Amortization of intangible assets from our recent acquisitions amounted to $5.4 million for the three months ended July 3, 2022. Restructuring and other charges, net, were $2.5 million for the three months ended July 3, 2022, as compared to $1.4 million for the three months ended July 4, 2021. The amortization of purchase accounting adjustments to record the inventory from certain acquisitions was $0.3 million for the three months ended July 3, 2022, as compared to $1.7 million for the three months ended July 4, 2021. Acquisition and divestiture-related expenses, contingent consideration and other costs added an incremental expense of $7.3 million for the three months ended July 3, 2022, as compared to $2.4 million for the three months ended July 4, 2021. Excluding the factors noted above, operating income decreased for the three months ended July 3, 2022, as compared to the three months ended July 4, 2021, primarily as a result of lower sales volume related to COVID-19 product offerings and unfavorable product mix.

Operating income from continuing operations for the six months ended July 3, 2022 was $459.2 million, as compared to $727.7 million for the six months ended July 4, 2021, a decrease of $268.5 million, or 37%. Amortization of intangible assets decreased and was $68.3 million for the six months ended July 3, 2022, as compared to $70.2 million for the six months ended

July 4, 2021. Amortization of intangible assets from our recent acquisitions amounted to $11.2 million for the six months ended July 3, 2022. Restructuring and other charges, net, were $2.5 million for the three months ended July 3, 2022, as compared to $3.1 million for the six months ended July 4, 2021. The amortization of purchase accounting adjustments to record the inventory from certain acquisitions was $0.5 million for the six months ended July 3, 2022, as compared to $3.7 million for the six months ended July 4, 2021. Acquisition and divestiture-related expenses, contingent consideration and other costs added an incremental expense of $15.0 million for the six months ended July 3, 2022, as compared to $6.5 million for the six months ended July 4, 2021. Excluding the factors noted above, operating income decreased for the six months ended July 3, 2022, as compared to the six months ended July 4, 2021, primarily as a result of lower sales volume related to COVID-19 product offerings and unfavorable product mix.

Liquidity and Capital Resources

We require cash to pay our operating expenses, make capital expenditures, make strategic acquisitions, service our debt and other long-term liabilities, repurchase shares of our common stock and pay dividends on our common stock. Our principal sources of funds are from our operations, borrowing capacity available under our senior unsecured credit facility and access to debt markets. We anticipate that our internal operations will generate sufficient cash to fund our operating expenses, capital expenditures, smaller acquisitions, interest payments on our debt and dividends on our common stock. However, we expect to use external sources to satisfy the balance of our debt when due, any larger acquisitions and other long-term liabilities, such as contributions to our postretirement benefit plans.

We and our subsidiaries may from time to time, in our sole discretion, purchase, repay, redeem or retire any of our outstanding debt securities (including any publicly issued debt securities), in privately negotiated or open market transactions, by tender offer or otherwise, or extend or refinance any of our outstanding indebtedness.

Principal factors that could affect the availability of our internally generated funds include:

• changes in sales due to weakness in markets in which we sell our products and services, and

• changes in our working capital requirements and capital expenditures.

Principal factors that could affect our ability to obtain cash from external sources include:

• financial covenants contained in the financial instruments controlling our borrowings that limit our total borrowing capacity,

• increases in interest rates applicable to our outstanding variable rate debt,

• a ratings downgrade that could limit the amount we can borrow under our senior unsecured revolving credit facility and our overall access to the corporate debt market,

• increases in interest rates or credit spreads, as well as limitations on the availability of credit, that affect our ability to borrow under future potential facilities on a secured or unsecured basis,

• a decrease in the market price for our common stock, and

• volatility in the public debt and equity markets.

At July 3, 2022, we had cash and cash equivalents of $360.9 million, of which $289.1 million was held by our non-U.S. subsidiaries, and we had $1.5 billion of borrowing capacity available under our senior unsecured revolving credit facility. We had no other liquid investments at July 3, 2022.

We utilize a variety of tax planning and financing strategies to ensure that our worldwide cash is available in the locations in which it is needed. We use our non-U.S. cash for needs outside of the U.S. including foreign operations, capital investments, acquisitions and repayment of debt. In addition, we transfer cash to the U.S. using nontaxable returns of capital, distribution of previously taxed income, as well as dividends, where the related income tax cost is managed efficiently. We have accrued tax expense on the unremitted earnings of foreign subsidiaries as required by the Tax Cuts and Jobs Act of 2017 (the "Tax Act") and where the foreign earnings are not considered permanently reinvested. In accordance with the Tax Act, we are making scheduled annual cash payments on our accrued transition tax. As of the end of fiscal year 2021, we identified approximately $1.2 billion in earnings that we no longer considered permanently reinvested, and have recorded a provision of approximately $37.1 million for the U.S. federal, U.S. state and non-U.S. taxes that would fall due when such earnings are repatriated. We began repatriating such earnings to the U.S. in the first quarter of fiscal year 2022 and expect to continue the repatriation beyond fiscal year 2022. No additional income tax expense has been provided for any remaining undistributed foreign earnings, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested.

On July 31, 2020, our Board of Directors (the "Board") authorized us to repurchase shares of common stock for an aggregate amount up to $250.0 million under a stock repurchase program (the "Repurchase Program"). During the six months ended July 3, 2022, we repurchased 240,000 shares of common stock under the Repurchase Program for an aggregate cost of $43.4 million. As of July 3, 2022, $144.0 million remained available for aggregate repurchases of shares under the Repurchase Program. On July 22, 2022, the Repurchase Program was terminated by the Board and the Board authorized us to repurchase shares of common stock for an aggregate amount up to $300.0 million under a new stock repurchase program (the "New Repurchase Program"). The New Repurchase Program will expire on July 22, 2024 unless terminated earlier by the Board and may be suspended or discontinued at any time.

As of July 3, 2022, we may have to pay contingent consideration related to acquisitions with open contingency periods of up to $106.6 million. As of July 3, 2022, we have recorded contingent consideration obligations of $48.6 million, of which $1.3 million was recorded in accrued expenses and other current liabilities, and $47.3 million was recorded in long-term liabilities. The expected maximum earnout period for acquisitions with open contingency periods does not exceed 6.4 years from July 3, 2022, and the remaining weighted average expected earnout period at July 3, 2022 was 5.4 years.

Distressed global financial markets could adversely impact general economic conditions by reducing liquidity and credit availability, creating increased volatility in security prices, widening credit spreads, increasing the cost of borrowings and decreasing valuations of certain investments. The widening of credit spreads may create a less favorable environment for certain of our businesses and may affect the fair value of financial instruments that we issue or hold. Increases in credit spreads, as well as limitations on the availability of credit at rates we consider to be reasonable, could affect our ability to borrow under future potential facilities on a secured or unsecured basis, which may adversely affect our liquidity and results of operations. In difficult global financial markets, we may be forced to fund our operations at a higher cost, or we may be unable to raise as much funding as we need to support our business activities or fund our strategic transactions.

Our pension plans have not experienced a material impact on liquidity or counterparty exposure due to the volatility and uncertainty in the credit markets. During the six months ended July 3, 2022, we contributed $3.5 million, in the aggregate, to pension plans outside of the United States, and expect to contribute an additional $3.5 million by the end of fiscal year 2022. We could potentially have to make additional contributions in future periods for all pension plans. We expect to use existing cash and external sources to satisfy future contributions to our pension plans.

Cash Flows

Operating Activities. Net cash provided by operating activities was $380.7 million for the six months ended July 3, 2022, as compared to $761.4 million for the six months ended July 4, 2021, a decrease of $380.7 million, primarily due to lower profitability and more cash used in working capital during the six months ended July 3, 2022 as compared to the six months ended July 4, 2021. The cash provided by operating activities for the six months ended July 3, 2022 was principally a result of income from continuing operations of $356.3 million, and adjustments for non-cash charges aggregating to $344.7 million, including depreciation and amortization of $239.5 million, partially offset by net cash usage in working capital of $320.3 million. The cash provided by operating activities for the six months ended July 4, 2021 was principally a result of income from continuing operations of $625.3 million, and adjustments for non-cash charges aggregating to $148.6 million, including depreciation and amortization of $145.8 million, partially offset by net cash usage in working capital of $12.5 million. During the six months ended July 3, 2022, we contributed $3.5 million, in the aggregate, to pension plans outside of the United States.

Investing Activities. Net cash used in investing activities was $84.7 million for the six months ended July 3, 2022, as compared to $751.9 million for the six months ended July 4, 2021, a decrease of $667.2 million. For the six months ended July 3, 2022, the net cash used for capital expenditures and acquisitions were $52.6 million and $5.9 million, respectively, as compared to $34.7 million and $702.7 million, respectively, for the six months ended July 4, 2021. The capital expenditures in each period were primarily for manufacturing, software and other capital equipment purchases. During the six months ended July 3, 2022, purchases of investments were $27.2 million as compared to $14.5 million during the six months ended July 4, 2021. The cash used in investing activities during the six months ended July 3, 2022 was partially offset by proceeds from disposition of businesses and assets of $1.1 million during the six months ended July 3, 2022.

Financing Activities. Net cash used in financing activities was $519.5 million for the six months ended July 3, 2022, as compared to net cash provided by financing activities of $325.3 million for the six months ended July 4, 2021, a decrease in net cash provided by financing activities of $844.7 million. During the six months ended July 3, 2022, we made net payments of $450.8 million, as compared to net borrowings of $405.6 million during the six months ended July 4, 2021. The changes reflect financing transactions in fiscal year 2021 to finance acquisitions and to refinance borrowings as compared to our intentions to pay down debt in fiscal year 2022, which we expect to continue throughout fiscal year 2022. During the six months ended July 3, 2022, we repurchased shares of our common stock for a total cost of $56.0 million, as compared to $72.9 million in the prior period. During the six months ended July 3, 2022, we paid $17.7 million in dividends as compared to $15.7 million for the

six months ended July 4, 2021. We paid $0.8 million in settlement of hedges during the six months ended July 3, 2022, as compared to $5.9 million for the six months ended July 4, 2021. The cash used in financing activities during the six months ended July 3, 2022 was partially offset by proceeds from the issuance of common stock under our stock plans of $5.8 million during the six months ended July 3, 2022, as compared to $14.2 million for the six months ended July 4, 2021.

Borrowing Arrangements

During the first half of fiscal year 2022, we repaid $450.0 million of the term loan facility. We expect to complete the repayment of the $50.0 million outstanding on the term loan facility in the second half of fiscal year 2022. See Note 7, Debt, in the Notes to Condensed Consolidated Financial Statements and Note 13, Debt, to our audited consolidated financial statements in the 2021 Form 10-K for a detailed discussion of our borrowing arrangements.

Dividends

Our Board declared a regular quarterly cash dividend of $0.07 per share for the first quarter of fiscal year 2022 and in each quarter of fiscal year 2021. At July 3, 2022, we had accrued $8.8 million for dividends declared on April 28, 2022 for the second quarter of fiscal year 2022 that will be paid on August 12, 2022. On July 22, 2022, we announced that our Board had declared a quarterly dividend of $0.07 per share for the third quarter of fiscal year 2022 that will be payable in November 2022. In the future, our Board may determine to reduce or eliminate our common stock dividend in order to fund investments for growth, repurchase shares or conserve capital resources.

Effects of Recently Adopted and Issued Accounting Pronouncements

See Note 1, Nature of Operations and Accounting Policies, to our audited consolidated financial statements in the 2021 Form 10-K for a summary of recently adopted new accounting pronouncements. We have not adopted any new accounting pronouncements during the six months ended July 3, 2022 and there were no recently issued accounting pronouncements that apply to our operations.