Segment Information

6 Months Ended

Jun. 30, 2011

Significant Customer Information and Segment Information [Abstract]

SEGMENT INFORMATION

NOTE 19. SEGMENT INFORMATION

During the first quarter of fiscal 2011, we began to operate as two reportable business segments. The creation of two business units, Thin Films and Renewables, has improved our execution and strategic focus in two distinct markets. The re-alignment of our businesses reflects the success of our strategy to maintain our leadership in thin-film markets, while also expanding into high-growth renewable markets with our inverter product portfolio. The creation of these two units will enable greater focus on each business’ unique needs and requirements, allowing each to expand and accelerate growth by better serving each of these very different industries.

Our chief operating decision maker and management personnel began reviewing our performance and making resource allocation decisions by reviewing the results of our two business segments separately. Revenue and operating profit is now reviewed by our chief operating decision maker, however, we have only divided inventory and property and equipment based on business segment. Due to the structure of our internal organization and the manner in which expenses were tracked and managed and as a result of the design of our internal systems during fiscal 2010, we were unable to recast related financial information by operating segment for fiscal 2010 and prior. As such, segment information, other than revenue, for the three months and six months ended June 30, 2010 is not reported as it is impracticable to do so.

We are organized into the Thin Films and Renewables strategic business units (“SBU”) based on the products and services provided.

Thin Films Processing Power Conversion and Thermal Instrumentation (“Thin Films”) SBU offers our products for direct current (“DC”), pulsed DC mid frequency, and radio frequency (“RF”) power supplies, matching networks and RF instrumentation as well as thermal instrumentation products. Our Thin Films SBU principally serves original equipment manufacturers (“OEMs”) and end customers in the semiconductor, flat panel display, solar module and other capital equipment markets.

• Our power conversion systems refine, modify and control the raw electrical power from a utility and convert it into power that may be customized and is predictable and repeatable. Our power conversion systems are primarily used by semiconductor, solar panel and similar thin-film manufacturers including flat panel display, data storage and architectural glass manufacturers.

• Our thermal instrumentation products provide temperature measurement solutions for applications in which time-temperature cycles affect material properties, productivity and yield. These products are used in rapid thermal processing, chemical vapor deposition, and other semiconductor and solar applications requiring non-contact temperature measurement.

• Our network of global service support centers offer repair services, conversions, upgrades and refurbishments to companies using our products.

Renewable Power Inverters (“Renewables”) SBU offers both a transformer-based or transformerless advanced grid-tie PV solution for residential, commercial and utility-scale system installations. Our PV inverters are designed to convert renewable solar power, drawn from large and small scale solar arrays, into high-quality, reliable electrical power. Our Renewables SBU focuses on residential, commercial and utility-scale solar projects and installations, selling primarily to distributors; engineering, procurement, and construction contractors; developers; and utility companies. Our Renewables revenue has seasonal variations. Installations of inverters are normally lowest during the first quarter as a result of typically poor weather and installation tendencies.

Revenue with respect to operating segments for the three months and six months ending June 30, 2011 and 2010 is as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Thin Films	$	97,331	$	85,697	$	197,430	$	153,120
Renewables		40,823		14,410		78,376		16,674
Total	$	138,154	$	100,107	$	275,806	$	169,794

Income from continuing operations before income taxes by operating segment for the three months and six months ended June 30, 2011 is as follows (in thousands):

	Three Months Ended			Six Months Ended
	June 30, 2011			June 30, 2011
Thin Films	$	20,042		$	44,866
Renewables		321			2,833
Total segment operating income		20,363			47,699
Corporate expenses		(3,045	)		(6,024	)
Other income, net		92			755
Income from continuing operations before income taxes	$	17,410		$	42,430

Segment assets consist of inventories and property and equipment, net. A summary of consolidated total assets by segment as of June 30, 2011 follows (in thousands):

Thin Films	$	74,724
Renewables		63,069
Total segment assets		137,793
Unallocated corporate property and equipment		1,008
Corporate assets		403,203
Consolidated total assets	$	542,004

“Corporate” is a non-operating business segment with the main purpose of supporting operations. Our amortization of intangibles is not allocated to business segment financial statements reviewed by our chief operating decision maker and management personnel. Unallocated corporate assets include accounts receivable, deferred income taxes and intangible assets.