Segment Information

12 Months Ended

Dec. 31, 2011

Segment Information

13. Segment Information

Reportable Segments

The Company identifies its reportable segments based on its operating and reporting structure. The Company operates in three reportable segments: Laser Products, Precision Motion and Technologies and Semiconductor Systems. The Company’s chief operating decision maker is the Chief Executive Officer. As a result of the Chief Executive Officer’s reassessment of the Company’s operating and reporting structure, the Company realigned the structure of its internal organization in April 2011 into three distinct operating divisions, each reporting to a separate divisional manager. Consequently, the realignment caused the composition of the Company’s reportable segments to change from prior years, with the exception of the Semiconductor Systems segment. The new structure allows the Company to prioritize its investments, align its resources to meet the demands of the markets the Company serves, optimize business performance and maximize opportunities for collaboration and synergy within each segment. The Company’s reportable segments have been identified based on commonality of end markets, customers and technologies amongst the Company’s individual product lines, which is consistent with the Company’s operating structure and associated management structure. The Company’s reportable segment financial information has been restated to reflect the updated reportable segment structure for all periods presented. The Company’s reportable segments and their principal activities are described below.

Laser Products

The Laser Products segment designs, manufactures and markets photonics-based solutions, consisting of lasers and laser-based systems, to customers worldwide. The segment serves highly demanding photonics-based applications such as cutting, welding, marking, engraving, micro-machining, and scientific research. The segment sells these products both directly utilizing the highly technical sales force and indirectly through resellers and distributors.

Precision Motion and Technologies

The Precision Motion and Technologies segment designs, manufactures and markets air bearing spindles, encoders, thermal printers, laser scanning devices, and light and color measurement systems to customers worldwide. The vast majority of the segment’s product offerings in precision motion and optical control technologies are sold to original equipment manufacturers (“OEM’s”). The segment sells these products both directly utilizing a highly technical sales force and indirectly through resellers and distributors.

Semiconductor Systems

Our Semiconductor Systems segment designs, develops and sells laser based production systems for semiconductor, microelectronics and electronics manufacturing. The segment offers a full spectrum of production systems, featuring high precision laser and motion technology, to process semiconductor wafers, LCD panels and microelectronic components. Semiconductor Systems’ solutions address a wide range of applications in a variety of end markets, including industrial, scientific, consumer electronics, medical, and aerospace. Today, the segment supplies leading global foundries, integrated design manufacturers and component manufacturers.

Reportable Segment Financial Information

	2011			2010			2009
	(In thousands)
Sales
Laser Products
External	$	130,957		$	121,360		$	94,567
Intersegment		1,802			1,659			591
Precision Motion and Technologies
External		191,382			180,872			110,152
Intersegment		843			912			325
Semiconductor Systems
External		43,941			81,284			49,669
Intersegment		—			—			—
Intersegment sales elimination		(2,645	)		(2,571	)		(916	)
Total	$	366,280		$	383,516		$	254,388

	2011			2010			2009
	(In thousands)
Gross Profit
Laser Products
External	$	48,724		$	46,734		$	34,611
Intersegment		1,051			958			515
Precision Motion and Technologies
External		90,741			88,352			47,787
Intersegment		449			451			150
Semiconductor Systems
External		20,915			31,315			16,148
Intersegment		—			—			—
Intersegment sales elimination		(1,500	)		(1,409	)		(665	)
Total	$	160,380		$	166,401		$	98,546

The Company reports operating expenses and assets on a consolidated basis to the chief operating decision maker.

Geographic Information

The Company aggregates geographic sales based on the customer location where products are shipped. Sales to these customers are as follows (in thousands):

	2011					2010					2009
	Sales		% of Total			Sales		% of Total			Sales		% of Total
United States	$	123,243		33.6	%	$	130,622		34.1	%	$	80,299		31.6	%
Asia-Pacific		83,290		22.7			120,545		31.4			80,028		31.4
Japan		46,367		12.7			46,099		12.0			30,525		12.0
Europe		106,044		29.0			83,960		21.9			61,606		24.2
Other		7,336		2.0			2,290		0.6			1,930		0.8
Total	$	366,280		100.0	%	$	383,516		100.0	%	$	254,388		100.0	%

Long-lived assets consist of property, plant and equipment and are aggregated based on the location of assets. A summary of these long-lived assets is as follows (in thousands):

	As of December 31,
	2011		2010
United States	$	34,082	$	37,270
Europe		4,972		4,561
Japan		419		272
Asia-Pacific and other		3,938		3,299
Total	$	43,411	$	45,402

Significant Customers

During 2011, no customers accounted for greater than 10% of the Company’s sales. In 2010, one customer within the Semiconductor Systems segment accounted for approximately 11% of our sales. In 2009, a different customer and certain related parties of that customer within the Semiconductor Systems segment accounted for approximately 10% of our sales.