Segment Information

6 Months Ended

Jul. 03, 2020

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 consist of the following:

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. 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, 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 motor and motion control sub-assemblies, servo drives, 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				Six Months Ended
	July 3,		June 28,		July 3,		June 28,
	2020		2019		2020		2019
Revenue
Photonics	$	47,803	$	58,286	$	102,943	$	117,511
Vision		64,740		65,895		133,748		131,831
Precision Motion		32,185		30,964		63,505		62,989
Total	$	144,728	$	155,145	$	300,196	$	312,331

	Three Months Ended						Six Months Ended
	July 3,			June 28,			July 3,			June 28,
	2020			2019			2020			2019
Gross Profit
Photonics	$	20,898		$	27,308		$	45,559		$	54,622
Vision		24,515			25,211			51,090			51,184
Precision Motion		13,834			13,759			27,742			27,280
Unallocated Corporate and Shared Services		(545	)		(496	)		(1,244	)		(1,015	)
Total	$	58,702		$	65,782		$	123,147		$	132,071

	Three Months Ended						Six Months Ended
	July 3,			June 28,			July 3,			June 28,
	2020			2019			2020			2019
Gross Profit Margin
Photonics		43.7	%		46.9	%		44.3	%		46.5	%
Vision		37.9	%		38.3	%		38.2	%		38.8	%
Precision Motion		43.0	%		44.4	%		43.7	%		43.3	%
Total		40.6	%		42.4	%		41.0	%		42.3	%

	Three Months Ended						Six Months Ended
	July 3,			June 28,			July 3,			June 28,
	2020			2019			2020			2019
Operating Income (Loss)
Photonics	$	6,937		$	11,666		$	15,852		$	23,976
Vision		4,665			4,215			10,299			8,772
Precision Motion		6,515			5,983			13,053			11,618
Unallocated Corporate and Shared Services		(4,416	)		(6,759	)		(12,253	)		(14,868	)
Total	$	13,701		$	15,105		$	26,951		$	29,498

	Three Months Ended				Six Months Ended
	July 3,		June 28,		July 3,		June 28,
	2020		2019		2020		2019
Depreciation and Amortization Expenses
Photonics	$	2,790	$	2,589	$	5,439	$	5,210
Vision		5,272		5,197		10,549		10,226
Precision Motion		1,333		1,183		2,686		2,552
Unallocated Corporate and Shared Services		42		71		93		126
Total	$	9,437	$	9,040	$	18,767	$	18,114

Revenue by Geography

The Company aggregates geographic revenue based on the customer location where products are shipped. Revenue from these customers was as follows (in thousands):

	Three Months Ended				Six Months Ended
	July 3,		June 28,		July 3,		June 28,
	2020		2019		2020		2019
United States	$	54,524	$	62,010	$	113,729	$	126,770
Germany		22,148		18,838		45,381		42,315
Rest of Europe		30,713		35,971		63,798		66,741
China		17,472		15,392		32,876		30,500
Rest of Asia-Pacific		17,842		20,702		39,542		41,149
Other		2,029		2,232		4,870		4,856
Total	$	144,728	$	155,145	$	300,196	$	312,331

The majority of revenue from our 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 advanced industrial market. Revenue by end market was approximately as follows:

	Three Months Ended						Six Months Ended
	July 3,			June 28,			July 3,			June 28,
	2020			2019			2020			2019
Medical		55	%		55	%		57	%		55	%
Advanced Industrial		45	%		45	%		43	%		45	%
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.