| SEGMENT REPORTING |
SEGMENT REPORTING As disclosed in Note 19 to the Company's consolidated financial statements for the year ended December 31, 2019, the Company has determined there are five reportable segments: U.S. Operations, Swiss Operations, Western European Operations, Chinese Operations and Other. The Company evaluates segment performance based on Segment Profit (gross profit less research and development and selling, general and administrative expenses, before amortization, interest expense, restructuring charges, other charges (income), net and taxes). The following tables show the operations of the Company’s operating segments: | | | | | | | | | | | | | | | | | | | | | | Net Sales to | | Net Sales to | | | | | | As of June 30, | For the three months ended | External | | Other | | Total Net | | Segment | | 2020 | June 30, 2020 | Customers | | Segments | | Sales | | Profit | | Goodwill | U.S. Operations | $ | 249,340 |
| | $ | 27,515 |
| | $ | 276,855 |
| | $ | 52,581 |
| | $ | 414,370 |
| Swiss Operations | 28,948 |
| | 142,487 |
| | 171,435 |
| | 48,248 |
| | 22,830 |
| Western European Operations | 149,051 |
| | 39,699 |
| | 188,750 |
| | 30,345 |
| | 84,975 |
| Chinese Operations | 140,907 |
| | 45,731 |
| | 186,638 |
| | 63,955 |
| | 621 |
| Other (a) | 122,427 |
| | 875 |
| | 123,302 |
| | 13,122 |
| | 14,828 |
| Eliminations and Corporate (b) | — |
| | (256,307 | ) | | (256,307 | ) | | (31,608 | ) | | — |
| Total | $ | 690,673 |
| | $ | — |
| | $ | 690,673 |
| | $ | 176,643 |
| | $ | 537,624 |
|
| | | | | | | | | | | | | | | | | | | | Net Sales to | | Net Sales to | | | | | | | For the six months ended | External | | Other | | Total Net | | Segment | | | June 30, 2020 | Customers | | Segments | | Sales | | Profit | | | U.S. Operations | $ | 490,750 |
| | $ | 53,904 |
| | $ | 544,654 |
| | $ | 97,519 |
| | | Swiss Operations | 60,844 |
| | 295,336 |
| | 356,180 |
| | 102,158 |
| | | Western European Operations | 302,376 |
| | 81,413 |
| | 383,789 |
| | 54,452 |
| | | Chinese Operations | 241,506 |
| | 94,480 |
| | 335,986 |
| | 109,505 |
| | | Other (a) | 244,359 |
| | 1,771 |
| | 246,130 |
| | 24,148 |
| | | Eliminations and Corporate (b) | — |
| | (526,904 | ) | | (526,904 | ) | | (69,861 | ) | | | Total | $ | 1,339,835 |
| | $ | — |
| | $ | 1,339,835 |
| | $ | 317,921 |
| | |
| | (a) | Other includes reporting units in Eastern Europe, Latin America, Southeast Asia and other countries. |
| | (b) | Eliminations and Corporate includes the elimination of inter-segment transactions and certain corporate expenses and intercompany investments, which are not included in the Company’s operating segments. |
| | | | | | | | | | | | | | | | | | | | | | Net Sales to | | Net Sales to | | | | | | As of June 30, | For the three months ended | External | | Other | | Total Net | | Segment | | 2019 | June 30, 2019 | Customers | | Segments | | Sales | | Profit | | Goodwill | U.S. Operations | $ | 267,889 |
| | $ | 26,571 |
| | $ | 294,460 |
| | $ | 53,986 |
| | $ | 410,021 |
| Swiss Operations | 31,358 |
| | 151,931 |
| | 183,289 |
| | 48,613 |
| | 22,157 |
| Western European Operations | 163,681 |
| | 39,212 |
| | 202,893 |
| | 22,229 |
| | 86,749 |
| Chinese Operations | 136,459 |
| | 52,568 |
| | 189,027 |
| | 65,489 |
| | 643 |
| Other (a) | 131,979 |
| | 1,334 |
| | 133,313 |
| | 14,300 |
| | 14,987 |
| Eliminations and Corporate (b) | — |
| | (271,616 | ) | | (271,616 | ) | | (26,876 | ) | | — |
| Total | $ | 731,366 |
| | $ | — |
| | $ | 731,366 |
| | $ | 177,741 |
| | $ | 534,557 |
|
| | | | | | | | | | | | | | | | | | | | Net Sales to | | Net Sales to | | | | | | | For the six months ended | External | | Other | | Total Net | | Segment | | | June 30, 2019 | Customers | | Segments | | Sales | | Profit | | | U.S. Operations | $ | 502,540 |
| | $ | 52,716 |
| | $ | 555,256 |
| | $ | 91,971 |
| | | Swiss Operations | 64,935 |
| | 305,662 |
| | 370,597 |
| | 102,135 |
| | | Western European Operations | 329,587 |
| | 83,257 |
| | 412,844 |
| | 47,954 |
| | | Chinese Operations | 258,181 |
| | 109,425 |
| | 367,606 |
| | 124,973 |
| | | Other (a) | 255,575 |
| | 2,595 |
| | 258,170 |
| | 27,487 |
| | | Eliminations and Corporate (b) | — |
| | (553,655 | ) | | (553,655 | ) | | (68,938 | ) | | | Total | $ | 1,410,818 |
| | $ | — |
| | $ | 1,410,818 |
| | $ | 325,582 |
| | |
| | (a) | Other includes reporting units in Eastern Europe, Latin America, Southeast Asia and other countries. |
| | (b) | Eliminations and Corporate includes the elimination of inter-segment transactions and certain corporate expenses and intercompany investments, which are not included in the Company’s operating segments. |
A reconciliation of earnings before taxes to segment profit for the three and six month periods ended June 30 follows:
| | | | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | 2020 | | 2019 | | 2020 | | 2019 | Earnings before taxes | $ | 155,255 |
| | $ | 155,216 |
| | $ | 273,754 |
| | $ | 280,892 |
| Amortization | 13,889 |
| | 12,326 |
| | 27,887 |
| | 24,548 |
| Interest expense | 9,582 |
| | 8,882 |
| | 19,801 |
| | 17,976 |
| Restructuring charges | 860 |
| | 2,891 |
| | 2,765 |
| | 4,414 |
| Other charges (income), net | (2,943 | ) | | (1,574 | ) | | (6,286 | ) | | (2,248 | ) | Segment profit | $ | 176,643 |
| | $ | 177,741 |
| | $ | 317,921 |
| | $ | 325,582 |
|
During the three months ended June 30, 2020, restructuring charges of $0.9 million were recognized, of which $0.3 million, $0.3 million, $0.1 million and $0.2 million related to the Company’s U.S., Western European, Chinese and Other Operations, respectively. Restructuring charges of $2.9 million were recognized during the three months ended June 30, 2019, of which $1.1 million, $0.3 million, $1.1 million, and $0.4 million, related to the Company’s U.S., Swiss, Western European, and Chinese Operations, respectively. Restructuring charges of $2.8 million were recognized during the six months ended June 30, 2020, of which $0.6 million, $0.7 million, $1.1 million, $0.1 million and $0.3 million related to the Company’s U.S., Swiss, Western European, Chinese and Other Operations, respectively. Restructuring charges of $4.4 million were recognized during the six months ended June 30, 2019, of which $1.6 million, $0.3 million, $2.1 million, and $0.4 million and related to the Company’s U.S., Swiss, Western European, and Chinese Operations, respectively.
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