Business Segment, Geographic Area, Product Information and Significant Customer Information

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Business Segment, Geographic Area, Product Information and Significant Customer Information

21) Business Segment, Geographic Area, Product Information 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’s primary served markets include semiconductor, industrial technologies, life and health sciences, research and defense.

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

The Vacuum & Analysis segment 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.

The Light & Motion segment 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.

The Equipment & Solutions segment provides a range of products including laser-based systems for PCB manufacturing, which include 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:

	Years Ended December 31,
	2021		2020		2019
Vacuum & Analysis	$	1,861.5	$	1,405.9	$	990.5
Light & Motion		813.4		689.6		725.6
Equipment & Solutions		274.7		234.5		183.7
	$	2,949.6	$	2,330.0	$	1,899.8

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

	Years Ended December 31,
	2021		2020			2019
Gross profit by reportable segment:
Vacuum & Analysis	$	867.8	$	633.7		$	426.4
Light & Motion		384.8		309.8			336.8
Equipment & Solutions		127.6		106.0			67.2
Total gross profit by reportable segment		1,380.2		1,049.5			830.4
Operating expenses:
Research and development		200.0		173.1			164.1
Selling, general and administrative		385.1		353.1			330.3
Acquisition and integration costs		29.8		3.8			37.3
Restructuring and other		11.1		9.4			7.0
Amortization of intangible assets		55.3		55.2			67.4
Asset impairment		—		2.3			4.7
COVID-19 related net credits		—		(1.2	)		—
Fees and expenses related to repricing of Term Loan Facility		—		—			6.6
Gain on sale of long-lived assets		—		—			(6.8	)
Income from operations		698.9		453.8			219.8
Interest income		0.6		1.4			5.4
Interest expense		25.4		29.1			44.1
Other expense, net		8.6		3.1			3.3
Income before income taxes		665.5		423.0			177.8
Provision for income taxes		114.1		72.9			37.4
Net income	$	551.4	$	350.1		$	140.4

The following table set forth capital expenditures by reportable segment:

	Years Ended December 31,
	2021		2020		2019
Vacuum & Analysis	$	36.6	$	36.0	$	34.1
Light & Motion		37.1		32.1		23.0
Equipment & Solutions		13.0		16.8		6.8
Total capital expenditures	$	86.7	$	84.9	$	63.9

The following table sets forth depreciation and amortization by reportable segment:

	Years Ended December 31,
	2021		2020		2019
Vacuum & Analysis	$	22.9	$	20.3	$	16.8
Light & Motion		46.0		43.2		53.9
Equipment & Solutions		35.2		35.7		39.3
Total depreciation and amortization	$	104.1	$	99.2	$	110.0

Total income tax expense is not presented by reportable segment because the necessary information is not available or used by the CODM.

The following table sets forth segment assets by reportable segment:

	Accounts Receivable			Inventory			Total
December 31, 2021
Vacuum & Analysis	$	285.4		$	338.9		$	624.3
Light & Motion		146.2			177.3			323.5
Equipment & Solutions		36.3			61.5			97.8
Corporate, Eliminations & Other		(25.3	)		(1.0	)		(26.3	)
Total segment assets	$	442.6		$	576.7		$	1,019.3

	Accounts Receivable			Inventory			Total
December 31, 2020
Vacuum & Analysis	$	229.1		$	273.3		$	502.4
Light & Motion		122.6			166.1			288.7
Equipment & Solutions		51.7			63.7			115.4
Corporate, Eliminations & Other		(10.7	)		(1.7	)		(12.4	)
Total segment assets	$	392.7		$	501.4		$	894.1

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

	December 31,
	2021		2020
Total segment assets	$	1,019.3	$	894.1
Cash and cash equivalents and short-term investments		1,042.7		836.0
Other current assets		85.3		74.3
Property, plant and equipment, net		325.3		284.3
Right-of-use assets		184.3		184.4
Goodwill and intangible assets, net		1,804.2		1,578.6
Other assets and long-term assets		79.2		52.1
Consolidated total assets	$	4,540.3	$	3,903.8

Geographic Area

Information about the Company’s operations by geographic region 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.

	Years Ended December 31,
	2021		2020		2019
Net revenues:
North America (1)	$	1,271.8	$	1,058.9	$	888.4
South Korea		385.8		278.8		167.7
China		355.1		273.5		178.6
Taiwan		197.7		113.8		95.4
Japan		196.8		163.2		143.1
Other Asia		310.4		242.6		197.3
Europe		232.0		199.2		229.3
	$	2,949.6	$	2,330.0	$	1,899.8

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

	December 31,
	2021		2020
Long-lived assets: (1)
North America (2)	$	425.2	$	364.0
Asia		105.7		94.8
Europe		35.6		45.1
	$	566.5	$	503.9

⁽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. The increase in long-lived assets in North America for 2021 primarily relates to the Photon Control Acquisition.

⁽²⁾ North America includes the United States and an immaterial amount from Canada.

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

	December 31,
	2021		2020
Vacuum & Analysis	$	195.2	$	196.2
Light & Motion		558.1		395.3
Equipment & Solutions		474.9		474.9
Total goodwill	$	1,228.2	$	1,066.4

The Company sells products and services to thousands of customers worldwide, in a wide range of end markets. Revenues from its top ten customers accounted for 47%, 44% and 33% of net revenues for 2021, 2020 and 2019, respectively, with the increasing percentages attributable to increasing semiconductor market sales. As a percentage of revenue to the Company’s top ten customers, semiconductor market revenue accounted for greater than 90% in each year.

The Company had two customers with net revenues greater than 10% of total net revenues for the years ended December 31, 2021 and 2020, as shown below. No individual customers accounted for greater than 10% of the Company’s net revenues in 2019.

	Years Ended December 31,
	2021	2020	2019
Lam Research Corporation	16%	14%	9%
Applied Materials, Inc.	11%	11%	9%