Segment Information

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Segment Information

15. Segment Information

Reportable Segments

The Company’s Chief Operating Decision Maker (“CODM”) utilizes certain financial information to make decisions about allocating resources and assessing performance for the entire Company. The Company evaluates the performance of and allocates resources to its segments based on revenue, gross profit and operating profit. The Company’s reportable segments have been identified based on commonality and adjacency of technologies, applications and customers amongst the Company’s individual product lines. The Company determined that disclosing revenue by specific product is impracticable due to the highly customized and extensive portfolio of technologies offered to customers.

Based upon the information provided to the CODM, the Company has determined that it operates in three reportable segments: Precision Medicine and Manufacturing, Medical Solutions, and Robotics and Automation. The reportable segments and their principal activities are described below.

Precision Medicine and Manufacturing

The Precision Medicine and Manufacturing segment designs, manufactures and markets photonics-based solutions, including laser scanning, laser beam delivery, CO2 laser, solid state laser, ultrafast laser, and optical light engine products. The segment serves highly demanding photonics-based applications for advanced industrial processes, metrology, medical and life science imaging, DNA sequencing, and medical laser procedures, particularly ophthalmology applications. The vast majority of the segment’s product offerings are sold to OEM customers worldwide. The segment sells these products both directly, utilizing a highly technical sales force, and indirectly, through resellers and distributors.

Medical Solutions

The Medical Solutions segment designs, manufactures and markets a range of medical grade technologies, including medical insufflators, pumps and related disposables; visualization solutions; wireless technologies, video recorder and video integration technologies for operating room integrations; optical data collection and machine vision technologies; radio frequency identification (“RFID”) technologies; thermal chart recorders; spectrometry technologies; and embedded touch screen solutions. The vast majority of the segment’s product offerings are sold to OEM customers worldwide. The segment sells these products both directly, utilizing a highly technical sales force, and indirectly, through resellers and distributors.

Robotics and Automation

The Robotics and Automation segment designs, manufactures and markets optical and inductive encoders, precision motors, servo drives and motion control solutions, integrated stepper motors, intelligent robotic end-of-arm technology solutions, air bearings, and air bearing spindles. The vast majority of the segment’s product offerings are sold to OEM customers worldwide. The segment sells these products both directly, utilizing a highly technical sales force, and indirectly, through resellers and distributors.

Reportable Segment Financial Information

Revenue, gross profit, gross profit margin, operating income (loss), and depreciation and amortization expenses by reportable segment were as follows (in thousands, except percentage data):

	Three Months Ended				Six Months Ended
	June 30,		July 1,		June 30,		July 1,
Revenue	2023		2022		2023		2022
Precision Medicine and Manufacturing	$	74,333	$	69,461	$	143,861	$	132,243
Medical Solutions		83,322		65,516		160,962		127,566
Robotics and Automation		71,809		80,379		143,767		159,763
Total	$	229,464	$	215,356	$	448,590	$	419,572

	Three Months Ended						Six Months Ended
	June 30,			July 1,			June 30,			July 1,
Gross Profit	2023			2022			2023			2022
Precision Medicine and Manufacturing	$	36,513		$	31,182		$	70,846		$	59,569
Medical Solutions		34,257			26,535			66,143			51,765
Robotics and Automation		34,909			38,864			67,724			77,014
Unallocated Corporate and Shared Services		(1,556	)		(1,336	)		(2,962	)		(2,827	)
Total	$	104,123		$	95,245		$	201,751		$	185,521

	Three Months Ended						Six Months Ended
	June 30,			July 1,			June 30,			July 1,
Gross Profit Margin	2023			2022			2023			2022
Precision Medicine and Manufacturing		49.1	%		44.9	%		49.2	%		45.0	%
Medical Solutions		41.1	%		40.5	%		41.1	%		40.6	%
Robotics and Automation		48.6	%		48.4	%		47.1	%		48.2	%
Total		45.4	%		44.2	%		45.0	%		44.2	%

	Three Months Ended						Six Months Ended
	June 30,			July 1,			June 30,			July 1,
Operating Income (Loss)	2023			2022			2023			2022
Precision Medicine and Manufacturing	$	19,611		$	13,996		$	36,295		$	27,431
Medical Solutions		10,083			7,024			19,924			12,066
Robotics and Automation		15,248			14,083			27,248			32,421
Unallocated Corporate and Shared Services		(12,744	)		(11,812	)		(24,957	)		(24,344	)
Total	$	32,198		$	23,291		$	58,510		$	47,574

	Three Months Ended				Six Months Ended
	June 30,		July 1,		June 30,		July 1,
Depreciation and Amortization Expenses	2023		2022		2023		2022
Precision Medicine and Manufacturing	$	2,661	$	2,697	$	5,257	$	5,474
Medical Solutions		4,044		4,322		8,017		8,749
Robotics and Automation		4,917		6,678		9,762		13,415
Unallocated Corporate and Shared Services		315		114		632		217
Total	$	11,937	$	13,811	$	23,668	$	27,855

Revenue by Geography

The Company aggregates geographic revenue based on the customer locations where products are shipped to. Revenue by geography was as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,		July 1,		June 30,		July 1,
	2023		2022		2023		2022
United States	$	107,594	$	86,649	$	211,436	$	169,355
Germany		32,097		33,123		66,959		64,901
Rest of Europe		34,537		37,918		63,902		71,260
China		20,854		29,871		38,652		56,670
Rest of Asia-Pacific		27,390		23,090		55,501		47,585
Other		6,992		4,705		12,140		9,801
Total	$	229,464	$	215,356	$	448,590	$	419,572

The majority of revenue from Precision Medicine and Manufacturing, Medical Solutions and Robotics and Automation segments is generated from sales to customers within the United States and Europe. Each segment also generates revenue across the other geographies, with no significant concentration of any segment’s remaining revenue.

Revenue by End Market

The Company primarily operates in two end markets: the medical market and the advanced industrial market. Revenue by end market was approximately as follows:

	Three Months Ended						Six Months Ended
	June 30,			July 1,			June 30,			July 1,
	2023			2022			2023			2022
Medical		53	%		47	%		53	%		47	%
Advanced Industrial		47	%		53	%		47	%		53	%
Total		100	%		100	%		100	%		100	%

The majority of revenue from the Precision Medicine and Manufacturing and Robotics and Automation segments is generated from sales to customers in the advanced industrial market. The majority of revenue from the Medical Solutions segment is generated from sales to customers in the medical market.