Segment Information

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segment Information

16. Segment Information

Reportable Segments

The Company’s Chief Operating Decision Maker (“CODM”) utilizes financial information to make decisions about allocating resources and assessing performance for the entire Company. The Company evaluates the performance of and allocates resources to its segments based on revenue, gross profit and operating profit. The Company’s reportable segments have been identified based on commonality and adjacency of technologies, applications and customers amongst the Company’s individual product lines. The Company determined that disclosing revenue by specific product was impracticable due to the highly customized and extensive portfolio of technologies offered to customers.

Based upon the information provided to the CODM, the Company has determined that it operates in three reportable segments: Photonics, Vision, and Precision Motion. The reportable segments and their principal activities are described below.

Photonics

The Photonics segment designs, manufactures and markets photonics-based solutions, including laser scanning, laser beam delivery, CO2 laser, solid state laser, ultrafast laser, and optical light engine products, to customers worldwide. The segment serves highly demanding photonics-based applications for advanced industrial processes, metrology, medical and life science imaging, DNA sequencing, and medical laser procedures, particularly ophthalmology applications. The vast majority of the segment’s product offerings are sold to OEM customers. The segment sells these products both directly, utilizing a highly technical sales force, and indirectly, through resellers and distributors.

Vision

The Vision segment designs, manufactures and markets a range of medical grade technologies, including medical insufflators, pumps and related disposables; visualization solutions; wireless technologies, video recorder and video integration technologies for operating room integrations; optical data collection and machine vision technologies; radio frequency identification (“RFID”) technologies; thermal chart recorders; spectrometry technologies; and embedded touch screen solutions. The vast majority of the segment’s product offerings are sold to OEM customers. The segment sells these products both directly, utilizing a highly technical sales force, and indirectly, through resellers and distributors.

Precision Motion

The Precision Motion segment designs, manufactures and markets optical and inductive encoders, precision motors, servo drives and motion control solutions, integrated stepper motors, intelligent robotic end-of-arm technology solutions, air bearings, and air bearing spindles to customers worldwide. The vast majority of the segment’s product offerings are sold to OEM customers. The segment sells these products both directly, utilizing a highly technical sales force, and indirectly, through resellers and distributors.

Reportable Segment Financial Information

Revenue, gross profit, gross profit margin, operating income (loss), and depreciation and amortization expenses by reportable segment were as follows (in thousands, except percentage data):

	Three Months Ended				Nine Months Ended
	September 30,		October 1,		September 30,		October 1,
Revenue	2022		2021		2022		2021
Photonics	$	70,799	$	55,263	$	203,042	$	176,113
Vision		73,345		65,346		200,911		196,429
Precision Motion		78,814		57,117		238,577		135,291
Total	$	222,958	$	177,726	$	642,530	$	507,833

	Three Months Ended						Nine Months Ended
	September 30,			October 1,			September 30,			October 1,
Gross Profit	2022			2021			2022			2021
Photonics	$	34,699		$	25,311		$	94,268		$	83,014
Vision		28,201			24,763			79,966			76,132
Precision Motion		36,832			27,743			113,846			64,694
Unallocated Corporate and Shared Services		(1,324	)		(1,519	)		(4,151	)		(6,396	)
Total	$	98,408		$	76,298		$	283,929		$	217,444

	Three Months Ended						Nine Months Ended
	September 30,			October 1,			September 30,			October 1,
Gross Profit Margin	2022			2021			2022			2021
Photonics		49.0	%		45.8	%		46.4	%		47.1	%
Vision		38.4	%		37.9	%		39.8	%		38.8	%
Precision Motion		46.7	%		48.6	%		47.7	%		47.8	%
Total		44.1	%		42.9	%		44.2	%		42.8	%

	Three Months Ended						Nine Months Ended
	September 30,			October 1,			September 30,			October 1,
Operating Income (Loss)	2022			2021			2022			2021
Photonics	$	18,351		$	9,294		$	45,782		$	35,885
Vision		8,744			5,606			20,811			12,178
Precision Motion		15,800			14,957			48,222			34,681
Unallocated Corporate and Shared Services		(14,234	)		(14,582	)		(38,580	)		(40,378	)
Total	$	28,661		$	15,275		$	76,235		$	42,366

	Three Months Ended				Nine Months Ended
	September 30,		October 1,		September 30,		October 1,
Depreciation and Amortization Expenses	2022		2021		2022		2021
Photonics	$	2,760	$	2,901	$	8,234	$	8,703
Vision		4,240		5,239		12,989		15,793
Precision Motion		6,050		2,691		19,467		5,916
Unallocated Corporate and Shared Services		93		59		309		201
Total	$	13,143	$	10,890	$	40,999	$	30,613

Revenue by Geography

The Company aggregates geographic revenue based on the customer locations where products are shipped to. Revenue by geography was as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,		October 1,		September 30,		October 1,
	2022		2021		2022		2021
United States	$	99,230	$	72,972	$	268,585	$	191,699
Germany		34,625		25,313		99,526		71,448
Rest of Europe		33,996		34,163		105,327		105,338
China		24,209		22,230		80,877		68,286
Rest of Asia-Pacific		26,886		21,256		74,400		64,765
Other		4,012		1,792		13,815		6,297
Total	$	222,958	$	177,726	$	642,530	$	507,833

The majority of revenue from Photonics, Vision and Precision Motion segments is generated from sales to customers within the United States and Europe. Each segment also generates revenue across the other geographies, with no significant concentration of any segment’s remaining revenue.

Revenue by End Market

The Company primarily operates in two end markets: the medical market and the advanced industrial market. Revenue by end market was approximately as follows:

	Three Months Ended						Nine Months Ended
	September 30,			October 1,			September 30,			October 1,
	2022			2021			2022			2021
Medical		50	%		53	%		48	%		53	%
Advanced Industrial		50	%		47	%		52	%		47	%
Total		100	%		100	%		100	%		100	%

The majority of revenue from the Photonics and Precision Motion segments is generated from sales to customers in the advanced industrial market. The majority of revenue from the Vision segment is generated from sales to customers in the medical market.