SEGMENT REPORTING

The Company's financial segment reporting reflects an organizational alignment intended to leverage the Company's unique portfolio of capabilities to create value for its customers by developing mission-critical solutions to maximize manufacturing yields and enable higher performance of devices. While these segments have separate products and technical know-how, they share a global generalist sales force, common business systems and processes, technology centers, and strategic and technology roadmaps. The Company leverages its expertise from these three segments to create new and increasingly integrated solutions for its customers. The Company's business is reported in the following segments:


•	Specialty Chemicals and Engineered Materials (SCEM): SCEM provides high-performance and high-purity process chemistries, gases, and materials and safe and efficient delivery systems to support semiconductor and other advanced manufacturing processes.


•	Microcontamination Control (MC): MC solutions purify critical liquid chemistries and gases used in semiconductor manufacturing processes and other high-technology industries.


•	Advanced Materials Handling (AMH): AMH develops solutions to monitor, protect, transport, and deliver critical liquid chemistries and substrates for a broad set of applications in the semiconductor industry and other high-technology industries.

Inter-segment sales are not significant. In the first quarter of 2018, the Company has changed its definition of segment profit. Segment profit is now defined as net sales less direct and indirect segment operating expenses, including certain general and administrative costs for the Company’s human resources, finance and information technology functions previously unallocated by the Company. The remaining unallocated expenses consist mainly the Company's corporate functions as well as interest expense, amortization of intangible assets and income tax expense. Prior quarter information was recast to reflect the change in the Company's definition of segment profit.

Summarized financial information for the Company’s reportable segments is shown in the following tables.



	Three months ended				Six months ended
(In thousands)	June 30, 2018		July 1, 2017		June 30, 2018		July 1, 2017
Net sales
SCEM	$	134,336	$	121,174	$	265,079	$	235,609
MC	124,681		104,407		243,318		204,462
AMH	124,042		103,421		241,861		206,308
Total net sales	$	383,059	$	329,002	$	750,258	$	646,379



	Three months ended				Six months ended
(In thousands)	June 30, 2018		July 1, 2017		June 30, 2018		July 1, 2017
Segment profit
SCEM	$	37,316	$	29,060	$	68,878	$	52,188
MC	39,054		31,796		81,045		62,783
AMH	23,114		15,169		46,256		29,129
Total segment profit	$	99,484	$	76,025	$	196,179	$	144,100

The following table reconciles total segment profit to income before income taxes:



	Three months ended						Six months ended
(In thousands)	June 30, 2018			July 1, 2017			June 30, 2018			July 1, 2017
Total segment profit	$	99,484		$	76,025		$	196,179		$	144,100
Less:
Amortization of intangible assets	12,014			11,007			23,683			21,952
Unallocated general and administrative expenses	12,537			5,928			19,090			12,138
Operating income	74,933			59,090			153,406			110,010
Interest expense	8,296			8,196			16,455			16,669
Interest income	(1,371		)	(93		)	(2,304		)	(173		)
Other expense (income), net	3,877			(46		)	4,016			856
Income before income tax expense	$	64,131		$	51,033		$	135,239		$	92,658

In the following tables, revenue is disaggregated by country or region for the three and six months ended June 30, 2018 and July 1, 2017.



(In thousands)	Three months ended June 30, 2018								Six months ended June 30, 2018
	SCEM		MC		AMH		Total		SCEM		MC		AMH		Total
Taiwan	$	26,575	$	23,572	$	17,280	$	67,427	$	54,217	$	46,104	$	32,197	$	132,518
United States	34,128		20,272		29,466		83,866		66,529		41,047		62,555		170,131
South Korea	20,791		19,982		23,961		64,734		41,118		39,805		46,549		127,472
Japan	14,060		28,545		12,079		54,684		28,566		54,537		23,111		106,214
China	16,726		15,753		14,319		46,798		31,706		29,057		26,530		87,293
Europe	7,970		10,406		17,553		35,929		15,766		20,090		32,960		68,816
Southeast Asia	14,086		6,151		9,384		29,621		27,177		12,678		17,959		57,814
	$	134,336	$	124,681	$	124,042	$	383,059	$	265,079	$	243,318	$	241,861	$	750,258



(In thousands)	Three months ended July 1, 2017								Six months ended July 1, 2017
	SCEM		MC		AMH		Total		SCEM		MC		AMH		Total
Taiwan	$	28,018	$	28,912	$	19,446	$	76,376	$	55,465	$	61,106	$	37,937	$	154,508
United States	28,766		17,216		24,965		70,947		57,384		32,486		46,866		136,736
South Korea	18,507		15,043		18,448		51,998		36,288		28,387		34,646		99,321
Japan	10,602		21,132		8,958		40,692		18,594		39,264		18,278		76,136
China	17,735		9,786		6,983		34,504		31,154		17,955		14,580		63,689
Europe	7,316		6,391		15,075		28,782		15,328		13,764		30,637		59,729
Southeast Asia	10,230		5,927		9,546		25,703		21,396		11,500		23,364		56,260
	$	121,174	$	104,407	$	103,421	$	329,002	$	235,609	$	204,462	$	206,308	$	646,379