Segment Reporting

9 Months Ended

Mar. 31, 2020

The Company reports its business segments using the “management approach” model for segment reporting. This means that the Company determines its reportable business segments based on the way the chief operating decision maker organizes business segments within the Company for making operating decisions and assessing financial performance.

The Company reports its financial results in the following two segments: (i) Compound Semiconductors, and (ii) Photonic Solutions, and the Company’s chief operating decision maker receives and reviews financial information based on these segments. The Company evaluates business segment performance based upon segment operating income, which is defined as earnings before income taxes, interest and other income or expense. The segments are managed separately due to the market, production requirements and facilities unique to each segment.

On September 24, 2019, the Company completed its acquisition of Finisar. See Note 3, Finisar Acquisition. Through September 30, 2019, the operating results of the Finisar acquisition are reflected in Unallocated and Other. Finisar results have been included in the Photonic Solutions and Compound Semiconductors segments during the three and nine months ended March 31, 2020.

The accounting policies are consistent across each segment. To the extent possible, the Company’s corporate expenses and assets are allocated to the segments. Unallocated and Other includes eliminating inter-segment sales and transfers, the results of Finisar since the acquisition date through September 30, 2019, and transaction costs related to the Finisar transaction. See Note 3 for additional information.

The following tables summarize selected financial information of the Company’s operations by segment ($000):


	Three Months Ended March 31, 2020
	Photonic Solutions		Compound Semiconductors		Unallocated & Other		Total
Revenues	$	417,769	$	209,272	$	—	$	627,041
Inter-segment revenues	6,899		36,492		(43,391)		—
Operating income (loss)	48,706		24,894		(4,563)		69,036
Interest expense	—		—		—		(28,530)
Other expense, net	—		—		—		(7,168)
Income taxes	—		—		—		(27,417)
Net earnings	—		—		—		5,921
Depreciation and amortization	14,272		23,752		—		38,024
Expenditures for property, plant & equipment	8,083		19,604		—		27,687
Segment assets	3,410,742		1,696,081		—		5,106,823
Goodwill	1,095,489		186,273		—		1,281,762


	Three Months Ended March 31, 2019
	Photonic Solutions		Compound Semiconductors		Unallocated & Other		Total
Revenues	$	166,473	$	176,023	$	—	$	342,496
Inter-segment revenues	3,115		20,693		(23,808)		—
Operating income (loss)	20,723		14,314		(3,907)		31,130
Interest expense	—		—		—		(5,647)
Other income, net	—		—		—		1,532
Income taxes	—		—		—		(2,377)
Net earnings	—		—		—		24,638
Depreciation and amortization	6,795		16,366		—		23,161
Expenditures for property, plant & equipment	11,177		23,606		—		34,783


	Nine Months Ended March 31, 2020
	Photonic Solutions		Compound Semiconductors		Unallocated & Other		Total
Revenues	$	1,019,518	$	592,212	$	22,051	$	1,633,781
Inter-segment revenues	21,245		116,548		(137,793)		—
Operating income (loss)	793		42,580		(71,389)		(28,017)
Interest expense	—		—		—		(63,888)
Other expense, net	—		—		—		(12,734)
Income taxes	—		—		—		(13,651)
Net loss	—		—		—		(118,290)
Depreciation and amortization	76,262		67,119		3,743		147,124
Expenditures for property, plant & equipment	38,785		66,426		2,764		107,975


	Nine Months Ended March 31, 2019
	Photonic Solutions		Compound Semiconductors		Unallocated & Other		Total
Revenues	$	461,323	$	538,445	$	—	$	999,768
Inter-segment revenues	8,451		59,599		(68,050)		—
Operating income (loss)	59,722		59,237		(11,010)		107,949
Interest expense	—		—		—		(16,811)
Other income, net	—		—		—		2,946
Income taxes	—		—		—		(14,595)
Net earnings	—		—		—		79,489
Depreciation and amortization	19,456		48,171		—		67,627
Expenditures for property, plant & equipment	34,451		73,719		—		108,170