Segment Information

9 Months Ended

Sep. 29, 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				Nine Months Ended
	September 29,		September 30,		September 29,		September 30,
Revenue	2023		2022		2023		2022
Precision Medicine and Manufacturing	$	71,277	$	70,799	$	215,138	$	203,042
Medical Solutions		83,378		73,345		244,340		200,911
Robotics and Automation		66,848		78,814		210,615		238,577
Total	$	221,503	$	222,958	$	670,093	$	642,530

	Three Months Ended						Nine Months Ended
	September 29,			September 30,			September 29,			September 30,
Gross Profit	2023			2022			2023			2022
Precision Medicine and Manufacturing	$	36,208		$	34,699		$	107,054		$	94,268
Medical Solutions		34,027			28,201			100,170			79,966
Robotics and Automation		32,652			36,832			100,376			113,846
Unallocated Corporate and Shared Services		(1,296	)		(1,324	)		(4,258	)		(4,151	)
Total	$	101,591		$	98,408		$	303,342		$	283,929

	Three Months Ended						Nine Months Ended
	September 29,			September 30,			September 29,			September 30,
Gross Profit Margin	2023			2022			2023			2022
Precision Medicine and Manufacturing		50.8	%		49.0	%		49.8	%		46.4	%
Medical Solutions		40.8	%		38.4	%		41.0	%		39.8	%
Robotics and Automation		48.8	%		46.7	%		47.7	%		47.7	%
Total		45.9	%		44.1	%		45.3	%		44.2	%

	Three Months Ended						Nine Months Ended
	September 29,			September 30,			September 29,			September 30,
Operating Income (Loss)	2023			2022			2023			2022
Precision Medicine and Manufacturing	$	18,508		$	18,351		$	54,803		$	45,782
Medical Solutions		11,050			8,744			30,974			20,811
Robotics and Automation		12,208			15,800			39,456			48,222
Unallocated Corporate and Shared Services		(11,457	)		(14,234	)		(36,414	)		(38,580	)
Total	$	30,309		$	28,661		$	88,819		$	76,235

	Three Months Ended				Nine Months Ended
	September 29,		September 30,		September 29,		September 30,
Depreciation and Amortization Expenses	2023		2022		2023		2022
Precision Medicine and Manufacturing	$	2,644	$	2,760	$	7,901	$	8,234
Medical Solutions		3,860		4,240		11,877		12,989
Robotics and Automation		4,705		6,050		14,467		19,467
Unallocated Corporate and Shared Services		188		93		820		309
Total	$	11,397	$	13,143	$	35,065	$	40,999

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				Nine Months Ended
	September 29,		September 30,		September 29,		September 30,
	2023		2022		2023		2022
United States	$	110,462	$	99,230	$	321,898	$	268,585
Germany		33,263		34,625		100,222		99,526
Rest of Europe		34,257		33,996		98,159		105,327
China		15,679		24,209		54,331		80,877
Rest of Asia-Pacific		24,060		26,886		79,561		74,400
Other		3,782		4,012		15,922		13,815
Total	$	221,503	$	222,958	$	670,093	$	642,530

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						Nine Months Ended
	September 29,			September 30,			September 29,			September 30,
	2023			2022			2023			2022
Medical		57	%		50	%		54	%		48	%
Advanced Industrial		43	%		50	%		46	%		52	%
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.