Segment Information

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Segment Information

15. 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 is 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: Precision Medicine and Manufacturing, Medical Solutions, and Robotics and Automation. The reportable segments and their principal activities are described below.

Precision Medicine and Manufacturing

The Precision Medicine and Manufacturing 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. 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 worldwide. The segment sells these products both directly, utilizing a highly technical sales force, and indirectly, through resellers and distributors.

Medical Solutions

The Medical Solutions 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 worldwide. The segment sells these products both directly, utilizing a highly technical sales force, and indirectly, through resellers and distributors.

Robotics and Automation

The Robotics and Automation 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. The vast majority of the segment’s product offerings are sold to OEM customers worldwide. 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
	March 31,		April 1,
Revenue	2023		2022
Precision Medicine and Manufacturing	$	69,528	$	62,782
Medical Solutions		77,640		62,050
Robotics and Automation		71,958		79,384
Total	$	219,126	$	204,216

	Three Months Ended
	March 31,			April 1,
Gross Profit	2023			2022
Precision Medicine and Manufacturing	$	34,333		$	28,387
Medical Solutions		31,886			25,230
Robotics and Automation		32,815			38,150
Unallocated Corporate and Shared Services		(1,406	)		(1,491	)
Total	$	97,628		$	90,276

	Three Months Ended
	March 31,			April 1,
Gross Profit Margin	2023			2022
Precision Medicine and Manufacturing		49.4	%		45.2	%
Medical Solutions		41.1	%		40.7	%
Robotics and Automation		45.6	%		48.1	%
Total		44.6	%		44.2	%

	Three Months Ended
	March 31,			April 1,
Operating Income (Loss)	2023			2022
Precision Medicine and Manufacturing	$	16,684		$	13,435
Medical Solutions		9,841			5,042
Robotics and Automation		12,000			18,338
Unallocated Corporate and Shared Services		(12,213	)		(12,532	)
Total	$	26,312		$	24,283

	Three Months Ended
	March 31,		April 1,
Depreciation and Amortization Expenses	2023		2022
Precision Medicine and Manufacturing	$	2,596	$	2,777
Medical Solutions		3,973		4,427
Robotics and Automation		4,845		6,737
Unallocated Corporate and Shared Services		317		103
Total	$	11,731	$	14,044

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
	March 31,		April 1,
	2023		2022
United States	$	103,842	$	82,715
Germany		34,862		31,778
Rest of Europe		29,365		33,373
China		17,798		26,799
Rest of Asia-Pacific		28,111		22,840
Other		5,148		6,711
Total	$	219,126	$	204,216

The majority of revenue from Precision Medicine and Manufacturing, Medical Solutions and Robotics and Automation 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
	March 31,			April 1,
	2023			2022
Medical		54	%		47	%
Advanced Industrial		46	%		53	%
Total		100	%		100	%

The majority of revenue from the Precision Medicine and Manufacturing and Robotics and Automation segments is generated from sales to customers in the advanced industrial market. The majority of revenue from the Medical Solutions segment is generated from sales to customers in the medical market.