BUSINESS SEGMENT INFORMATION

12 Months Ended

Dec. 29, 2012

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT INFORMATION

NOTE 15      BUSINESS SEGMENT INFORMATION

The operating segments reported herein are the segments of the Company for which separate financial information was available and for which operating results were evaluated regularly by the Company’s Chief Executive Officer, who is the Company’s chief operating decision maker, in deciding how to allocate resources and in assessing performance, during the periods covered by the accompanying financial statements.

The Company develops, manufactures and markets its products within three distinct business segments, its PPT Division, its Lasers Division and its Ophir Division.

The PPT Division’s products and systems are sold to end-user customers in a wide range of markets, including the microelectronics, scientific research, defense/security, life and health sciences and industrial markets.  In addition, the division sells subsystems to customers that integrate these products into larger systems, particularly for microelectronics and life and health sciences applications.  The products sold by this division include photonics instruments and systems, precision positioning systems and subsystems, vibration isolation systems and subsystems, optical components, optical hardware and opto-mechanical subassemblies.  The PPT Division also offers automated systems and subsystems for advanced applications in the manufacturing of solar panels and communications and electronic devices.

The Lasers Division offers a broad array of laser technology products and services to OEM and end-user customers across a wide range of applications and markets, including the microelectronics, scientific research, life and health sciences and industrial markets.  The lasers and laser-based systems include ultrafast lasers and amplifiers, diode-pumped solid-state lasers, high-energy pulsed lasers, tunable lasers, fiber lasers and gas lasers.

The Ophir Division, which was established at the time of the Company’s acquisition of Ophir in the fourth quarter of 2011, offers a wide range of products to OEM and end-user customers across a wide range of applications and markets, including scientific research, defense/security, life and health sciences and industrial markets.  The division’s primary product offerings consist of precision infrared optics and lens assemblies, laser measurement instrumentation and three-dimensional non-contact measurement equipment.

The Company measured income reported for each business segment, which included only those costs and charges that were directly attributable to the operations of that segment, and excluded certain unallocated operating expenses, such as corporate overhead and intangible asset amortization, other charges and gains, interest and other expense, net, and income taxes.

Selected segment financial information for the Company’s reportable segments for the years ended December 29, 2012, December 31, 2011 and January 1, 2011 were as follows:

	PPT		Lasers		Ophir
(In thousands)	Division		Division		Division			Total
Year ended December 29, 2012
Sales to external customers	$	311,310	$	181,426	$	102,610		$	595,346
Depreciation and amortization	$	4,192	$	5,710	$	6,449		$	16,351
Segment income (loss)	$	67,552	$	20,400	$	(121,796	)	$	(33,844	)
Segment assets	$	220,494	$	111,597	$	142,538		$	474,629
Expenditures for long-lived assets	$	3,302	$	2,381	$	2,568		$	8,251
Year ended December 31, 2011
Sales to external customers	$	325,972	$	191,528	$	27,554		$	545,054
Depreciation and amortization	$	6,035	$	3,632	$	1,574		$	11,241
Segment income	$	74,936	$	19,150	$	1,510		$	95,596
Segment assets	$	210,776	$	131,799	$	304,564		$	647,139
Expenditures for long-lived assets	$	6,109	$	2,423	$	991		$	9,523
Year ended January 1, 2011
Sales to external customers	$	297,666	$	182,121	$	—		$	479,787
Depreciation and amortization	$	7,039	$	3,583	$	—		$	10,622
Loss on disposal assets and related costs	$	542	$	—	$	—		$	542
Segment income	$	62,759	$	14,275	$	—		$	77,034
Segment assets	$	237,231	$	80,433	$	—		$	317,664
Expenditures for long-lived assets	$	4,815	$	854	$	—		$	5,669

The segment loss reported for the Company’s Ophir Division for 2012 included impairment charges of $130.9 million related to goodwill, intangible assets and other long-lived assets (see Note 5).

The segment income reported for the Company’s PPT Division for 2010 included a loss on the sale of assets and related costs, totaling $0.5 million, related to the sale of the Company’s Hilger Crystals Limited subsidiary (see Note 2).

The following reconciles segment income to consolidated income (loss) before income taxes:

	Year Ended
	December 29,			December 31,			January 1,
(In thousands)	2012			2011			2011
Segment income (loss)	$	(33,844	)	$	95,596		$	77,034
Unallocated operating expenses	(48,316		)	(41,773		)	(24,312		)
Gain on sale of investments	6,248			—			—
Foreign currency translation gain from sale of subsidiary	—			7,198			—
Recovery of note receivable and other amounts related to previously discontinued operations, net	—			619			—
Loss on extinguishment of debt	—			(582		)	—
Interest and other expense, net	(8,559		)	(10,550		)	(8,481		)
Consolidated income (loss) before income taxes	$	(84,471	)	$	50,508		$	44,241

The following reconciles segment depreciation and amortization, total assets and expenditures to consolidated amounts:

	As of or for the Year Ended
	December 29,		December 31,		January 1,
(In thousands)	2012		2011		2011
Depreciation and amortization for reportable segments	$	16,351	$	11,241	$	10,622
Depreciation and amortization for assets held at corporate	23,281		12,758		8,046
Total depreciation and amortization	$	39,632	$	23,999	$	18,668
Assets of reportable segments	$	474,629	$	647,139	$	317,664
Assets held at corporate, primarily cash and cash equivalents, restricted cash and marketable securities	146,332		116,930		238,726
Total assets	$	620,961	$	764,069	$	556,390
Expenditures for long-lived assets for reportable segments	$	8,251	$	9,523	$	5,669
Expenditures for assets held at corporate	3,278		4,091		1,745
Total expenditures for long-lived assets	$	11,529	$	13,614	$	7,414

Selected financial information for the Company’s operations by geographic area is presented in the table below. The table below reflects the Company’s net sales by geographic region. Sales are attributed to each location based on the customer’s address to which the product is shipped.

	As of or for the Year Ended
	December 29,		December 31,		January 1,
(In thousands)	2012		2011		2011
Geographic area net sales:
United States	$	243,674	$	240,736	$	233,479
Germany	73,383		61,580		36,982
Other European countries	78,428		72,957		65,387
Japan	62,947		52,971		57,915
Other Pacific Rim countries	94,313		80,731		65,449
Rest of world	42,601		36,079		20,575
	$	595,346	$	545,054	$	479,787
Geographic area long-lived assets:
United States	$	42,710	$	36,082
Israel	26,690		42,042
Europe	9,902		8,201
Rest of world	3,541		3,548
	$	82,843	$	89,873