Segment Information

9 Months Ended

Sep. 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 (loss) profit to (loss) income from continuing operations before income taxes for the three and nine months ended September 30, 2013 and 2012, respectively, and goodwill and total assets as of September 30, 2013 and December 31, 2012 (in thousands):

	LED & Solar				Data Storage				Unallocated Corporate					Total
Three months ended September 30, 2013
Net sales	$	75,001			$	24,323			$		—			$	99,324
Segment (loss) profit	$	(1,723		)	$	2,135			$		(5,491		)	$	(5,079		)
Interest income, net	—				—				192					192
Amortization	(531			)	(324			)	—					(855			)
Equity-based compensation	(1,016			)	(439			)	(1,308				)	(2,763			)
Restructuring	(793			)	(447			)	—					(1,240			)
(Loss) income from continuing operations before income taxes	$	(4,063		)	$	925			$		(6,607		)	$	(9,745		)
Three months ended September 30, 2012
Net sales	$	98,905			$	33,810			$		—			$	132,715
Segment profit	$	9,461			$	4,278			$		480			$	14,219
Interest income, net	—				—				176					176
Amortization	(1,154			)	(323			)	—					(1,477			)
Equity-based compensation	(1,914			)	(763			)	(588				)	(3,265			)
Restructuring	(660			)	(1,296			)	(58				)	(2,014			)
Income from continuing operations before income taxes	$	5,733			$	1,896			$		10			$	7,639
Nine months ended September 30, 2013
Net sales	$	193,241			$	65,299			$		—			$	258,540
Segment (loss) profit	$	(9,821		)	$	2,389			$		(15,549		)	$	(22,981		)
Interest income, net	—				—				620					620
Amortization	(1,595			)	(971			)	—					(2,566			)
Equity-based compensation	(3,042			)	(1,057			)	(4,956				)	(9,055			)
Restructuring	(1,216			)	(497			)	(58				)	(1,771			)
Loss from continuing operations before income taxes	$	(15,674		)	$	(136		)	$		(19,943		)	$	(35,753		)
Nine months ended September 30, 2012
Net sales	$	281,257			$	127,914			$		—			$	409,171
Segment profit (loss)	$	36,534			$	25,367			$		(2,009		)	$	59,892
Interest income, net	—				—				708					708
Amortization	(2,878			)	(999			)	—					(3,877			)
Equity-based compensation	(4,016			)	(1,614			)	(4,779				)	(10,409			)
Restructuring	(718			)	(1,301			)	(58				)	(2,077			)
Income (loss) from continuing operations before income taxes	$	28,922			$	21,453			$		(6,138		)	$	44,237
	LED & Solar				Data Storage					Unallocated Corporate				Total
As of September 30, 2013
Goodwill	$		55,828		$		—			$		—		$		55,828
Total assets	$		235,356		$		37,277			$		636,480		$		909,113
As of December 31, 2012
Goodwill	$		55,828		$		—			$		—		$		55,828
Total assets	$		276,352		$		38,664			$		622,288		$		937,304

As of September 30, 2013 and December 31, 2012 corporate total assets were comprised principally of cash and cash equivalents, restricted cash, and short-term investments.