Segment Information

6 Months Ended

Jun. 30, 2013

Segment Information

Segment Information

Note 4—Segment Information

We manage the business, review operating results and assess performance, as well as allocate resources, based upon four reporting units that are aggregated into two segments: the VIBE and Mechanical reporting units which are reported in our Data Storage segment; and the MOCVD and molecular beam epitaxy (“MBE”) reporting units which are reported in our Light Emitting Diode (“LED”) and Solar segment. In identifying the reporting units, management considered the economic characteristics of operating segments including the products and services provided, production processes, types or classes of customer and product distribution.  Our LED & Solar segment consists of MOCVD systems, MBE systems and thermal deposition sources. These systems are primarily sold to customers in the LED, wireless devices and solar industries, as well as to scientific research customers. This segment has manufacturing, product development and marketing sites in Somerset, New Jersey; Poughkeepsie, New York; and St. Paul, Minnesota. Our Data Storage segment consists of the ion beam etch, ion beam deposition, diamond-like carbon, physical vapor deposition and dicing and slicing products sold primarily to customers in the data storage industry. This segment has manufacturing, product development and marketing sites in Plainview, New York; Camarillo, California; and Ft. Collins, Colorado.

We evaluate the performance of our reportable segments based on income (loss) from continuing operations before interest, income taxes, amortization and certain items (in the aggregate “segment profit (loss)”), which is the primary indicator used to plan and forecast future periods. The presentation of this financial measure facilitates meaningful comparison with prior periods, as management believes segment profit (loss) reports baseline performance and thus provides useful information. Certain items include restructuring charges and equity-based compensation expense. The accounting policies of the reportable segments are the same as those described in the summary of critical accounting policies.

The following tables present certain data pertaining to our reportable segments and a reconciliation of segment profit (loss) to income (loss) from continuing operations before income taxes for the three and six months ended June 30, 2013 and 2012, respectively, and goodwill and total assets as of June 30, 2013 and December 31, 2012 (in thousands):

	LED & Solar			Data Storage			Unallocated Corporate			Total
Three months ended June 30, 2013
Net sales	$	75,933		$	21,502		$	—		$	97,435
Segment profit (loss)	$	3,124		$	(121	)	$	(5,247	)	$	(2,244	)
Interest income, net	—			—			236			236
Amortization	(532		)	(323		)	—			(855		)
Equity-based compensation	(1,316		)	(488		)	(1,909		)	(3,713		)
Income (loss) from continuing operations before income taxes	$	1,276		$	(932	)	$	(6,920	)	$	(6,576	)
Three months ended June 30, 2012
Net sales	$	86,778		$	49,769		$	—		$	136,547
Segment profit (loss)	$	9,587		$	12,136		$	(1,404	)	$	20,319
Interest income, net	—			—			329			329
Amortization	(861		)	(324		)	—			(1,185		)
Equity-based compensation	(1,096		)	(440		)	(2,478		)	(4,014		)
Income (loss) from continuing operations before income taxes	$	7,630		$	11,372		$	(3,553	)	$	15,449
Six months ended June 30, 2013
Net sales	$	118,240		$	40,976		$	—		$	159,216
Segment (loss) profit	$	(8,098	)	$	254		$	(10,058	)	$	(17,902	)
Interest income, net	—			—			428			428
Amortization	(1,064		)	(647		)	—			(1,711		)
Equity-based compensation	(2,026		)	(618		)	(3,648		)	(6,292		)
Restructuring	(423		)	(50		)	(58		)	(531		)
Loss from continuing operations before income taxes	$	(11,611	)	$	(1,061	)	$	(13,336	)	$	(26,008	)
Six months ended June 30, 2012
Net sales	$	182,352		$	94,104		$	—		$	276,456
Segment profit (loss)	$	27,073		$	21,089		$	(2,489	)	$	45,673
Interest income, net	—			—			532			532
Amortization	(1,724		)	(676		)	—			(2,400		)
Equity-based compensation	(2,102		)	(851		)	(4,191		)	(7,144		)
Restructuring	(58		)	(5		)	—			(63		)
Income (loss) from continuing operations before income taxes	$	23,189		$	19,557		$	(6,148	)	$	36,598

As of June 30, 2013	LED & Solar		Data Storage		Unallocated Corporate		Total
Goodwill	$	55,828	$	—	$	—	$	55,828
Total assets	$	257,030	$	39,275	$	641,763	$	938,068

As of December 31, 2012
Goodwill	$	55,828	$	—	$	—	$	55,828
Total assets	$	276,352	$	38,664	$	622,288	$	937,304