Business Segment, Geographic Area, and Significant Customer Information

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Business Segment, Geographic Area, and Significant Customer Information

16) Business Segment, Geographic Area, and Significant Customer Information

The Company is a global provider of instruments, systems, subsystems and process control solutions that measure, monitor, deliver, analyze, power and control critical parameters of advanced manufacturing processes to improve process performance and productivity for its customers. The Company's products are derived from its core competencies in pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, electronic control technology, reactive gas generation and delivery, power generation and delivery, vacuum technology, temperature sensing, lasers, photonics, optics, precision motion control, vibration control and laser-based manufacturing systems solutions. The Company also provides services relating to the maintenance and repair of its products, installation services and training. The Company primarily serves the semiconductor, advanced electronics and specialty industrial markets.

The Company's Chief Operating Decision Maker ("CODM"), which is the Company's Chief Executive Officer, utilizes financial information to make decisions about allocating resources and assessing performance for the entire Company, which is used in the decision-making process to assess performance.

Reportable Segments

VSD provides a broad range of instruments, components and subsystems which are derived from the Company's core competencies in pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, electronic control technology, reactive gas generation and delivery, power generation and delivery and vacuum technology.

PSD provides a broad range of instruments, components and subsystems which are derived from the Company's core competencies in lasers, photonics, optics, temperature sensing, precision motion control and vibration control.

ESD provides a range of laser-based systems and test products, including laser-based systems for printed circuit board ("PCB") manufacturing, which includes flexible interconnect PCB processing systems and high density interconnect solutions for rigid PCB manufacturing and substrate processing, and multi-layer ceramic capacitor test systems.

The Company derives its segment results directly from the manner in which results are reported in its management reporting system. The accounting policies that the Company uses to derive reportable segment results are substantially the same as those used for external reporting purposes. The Company groups its similar products within its three reportable segments.

The following table sets forth net revenues by reportable segment:

	Three Months Ended
	March 31, 2022		March 31, 2021
Vacuum Solutions Division	$	474	$	436
Photonics Solutions Division		228		182
Equipment Solutions Division		40		76
	$	742	$	694

The following table sets forth a reconciliation of gross profit by reportable segment to net income:

	Three Months Ended March 31,
	2022			2021
Gross profit by reportable segment:
Vacuum Solutions Division	$	206		$	205
Photonics Solutions Division		113			82
Equipment Solutions Division		15			35
Total gross profit by reportable segment		334			322
Operating expenses:
Research and development		52			47
Selling, general and administrative		92			96
Acquisition and integration costs		8			6
Restructuring and other		2			5
Amortization of intangible assets		15			12
Gain on sale of long-lived assets		(7	)		—
Income from operations		172			156
Interest expense		6			6
Other (income) expense, net		(5	)		2
Income before income taxes		171			148
Provision for income taxes		28			26
Net income	$	143		$	122

The following table sets forth capital expenditures by reportable segment for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
	2022		2021
Vacuum Solutions Division	$	10	$	9
Photonics Solutions Division		8		12
Equipment Solutions Division		1		6
Total capital expenditures	$	19	$	27

The following table sets forth depreciation and amortization by reportable segment for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
	2022		2021
Vacuum Solutions Division	$	6	$	6
Photonics Solutions Division		13		9
Equipment Solutions Division		9		9
Total depreciation and amortization	$	28	$	24

Total income tax expense is not presented by reportable segment because the necessary information is not available nor used by the CODM.

The following table sets forth segment assets by reportable segment:

March 31, 2022	Accounts  receivable			Inventory			Total
Vacuum Solutions Division	$	335		$	386		$	721
Photonics Solutions Division		182			188			370
Equipment Solutions Division		37			63			100
Corporate, Eliminations & Other		(74	)		(1	)		(75	)
Total segment assets	$	480		$	636		$	1,116

December 31, 2021	Accounts  receivable			Inventory			Total
Vacuum Solutions Division	$	285		$	339		$	624
Photonics Solutions Division		146			177			323
Equipment Solutions Division		36			62			98
Corporate, Eliminations & Other		(24	)		(1	)		(25	)
Total segment assets	$	443		$	577		$	1,020

The following is a reconciliation of segment assets to total assets:

	March 31, 2022		December 31, 2021
Total segment assets	$	1,116	$	1,020
Cash and cash equivalents and short-term investments		1,053		1,042
Other current assets		89		85
Property, plant and equipment, net		331		326
Right-of-use assets		180		184
Goodwill and intangible assets, net		1,788		1,804
Other assets and long-term investments		92		79
Total assets	$	4,649	$	4,540

Geographic Area

Information about the Company's operations by geographic area is presented in the tables below. Net revenues from unaffiliated customers are based on the location in which the sale originated. Intercompany sales between geographic areas are at tax transfer prices and have been eliminated from consolidated net revenues.

	Three Months Ended March 31,
Net revenues:	2022		2021
North America (1)	$	351	$	283
South Korea		83		98
China		67		81
Taiwan		35		59
Japan		51		48
Other Asia		94		70
Europe		61		55
	$	742	$	694

(1)North America includes revenue from the United States and an immaterial amount of revenue from Canada.

Long-lived assets: (1)	March 31, 2022		December 31, 2021
North America (2)	$	443	$	425
Asia		103		106
Europe		36		36
	$	582	$	567

(1)Long-lived assets include property, plant and equipment, net, right-of-use assets, and certain other assets, and exclude goodwill, intangible assets and long-term tax-related accounts.

(2)North America includes long-lived assets of $271, $164, and $8 in the United States, Mexico, and Canada, respectively, for the period ended March 31, 2022. North America includes long-lived assets of $284, $133, and $8 in the United States, Mexico, and Canada, respectively, for the period ended December 31, 2021.

Goodwill associated with each of the Company's reportable segments is as follows:

	March 31, 2022		December 31, 2021
Reportable segment:
Vacuum Solutions Division	$	195	$	195
Photonics Solutions Division		557		558
Equipment Solutions Division		475		475
Total goodwill	$	1,227	$	1,228

Major Customers

The following customers represented greater than 10% of the Company's net revenues as follows:

	Three Months Ended March 31,
	2022			2021
Lam Research Corporation		17	%		14	%
Applied Materials, Inc.		12	%		11	%