Segment Information

9 Months Ended

Oct. 02, 2020

Segment Reporting [Abstract]

Segment Information

16. Segment Information

Reportable Segments

The Company’s Chief Operating Decision Maker (“CODM”) utilizes 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 was 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: Photonics, Vision, and Precision Motion. The reportable segments and their principal activities consist of the following:

Photonics

The Photonics 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 to customers worldwide. The segment serves highly demanding photonics-based applications for advanced industrial processes, metrology, medical and life science imaging, DNA sequencing, and medical laser procedures. The vast majority of the segment’s product offerings are sold to OEM customers. The segment sells these products both directly, utilizing a highly technical sales force, and indirectly, through resellers and distributors.

Vision

The Vision segment designs, manufactures and markets a range of medical grade technologies, including medical insufflators, pumps and related disposables; visualization solutions; wireless, 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. The segment sells these products both directly, utilizing a highly technical sales force, and indirectly, through resellers and distributors.

Precision Motion

The Precision Motion segment designs, manufactures and markets optical and inductive encoders, precision motor and motion control sub-assemblies, servo drives, air bearings, and air bearing spindles to customers worldwide. The vast majority of the segment’s product offerings are sold to OEM customers. 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
	October 2,		September 27,		October 2,		September 27,
	2020		2019		2020		2019
Revenue
Photonics	$	46,394	$	54,570	$	149,337	$	172,081
Vision		64,299		69,923		198,047		201,754
Precision Motion		32,236		29,573		95,741		92,562
Total	$	142,929	$	154,066	$	443,125	$	466,397

	Three Months Ended						Nine Months Ended
	October 2,			September 27,			October 2,			September 27,
	2020			2019			2020			2019
Gross Profit
Photonics	$	20,166		$	25,289		$	65,725		$	79,911
Vision		24,586			26,922			75,676			78,106
Precision Motion		15,011			12,504			42,753			39,784
Unallocated Corporate and Shared Services		(658	)		(661	)		(1,902	)		(1,676	)
Total	$	59,105		$	64,054		$	182,252		$	196,125

	Three Months Ended						Nine Months Ended
	October 2,			September 27,			October 2,			September 27,
	2020			2019			2020			2019
Gross Profit Margin
Photonics		43.5	%		46.3	%		44.0	%		46.4	%
Vision		38.2	%		38.5	%		38.2	%		38.7	%
Precision Motion		46.6	%		42.3	%		44.7	%		43.0	%
Total		41.4	%		41.6	%		41.1	%		42.1	%

	Three Months Ended						Nine Months Ended
	October 2,			September 27,			October 2,			September 27,
	2020			2019			2020			2019
Operating Income (Loss)
Photonics	$	7,026		$	10,661		$	22,878		$	34,637
Vision		3,799			5,830			14,098			14,602
Precision Motion		7,675			5,221			20,728			16,839
Unallocated Corporate and Shared Services		(6,634	)		(8,911	)		(18,887	)		(23,779	)
Total	$	11,866		$	12,801		$	38,817		$	42,299

	Three Months Ended				Nine Months Ended
	October 2,		September 27,		October 2,		September 27,
	2020		2019		2020		2019
Depreciation and Amortization Expenses
Photonics	$	2,864	$	3,276	$	8,303	$	8,486
Vision		5,296		5,432		15,845		15,658
Precision Motion		1,369		1,061		4,055		3,613
Unallocated Corporate and Shared Services		67		71		160		197
Total	$	9,596	$	9,840	$	28,363	$	27,954

Revenue by Geography

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

	Three Months Ended				Nine Months Ended
	October 2,		September 27,		October 2,		September 27,
	2020		2019		2020		2019
United States	$	57,635	$	63,278	$	171,364	$	190,048
Germany		18,885		21,423		64,266		63,738
Rest of Europe		30,483		30,489		94,281		97,230
China		17,409		11,895		50,285		42,395
Rest of Asia-Pacific		16,414		24,218		55,956		65,367
Other		2,103		2,763		6,973		7,619
Total	$	142,929	$	154,066	$	443,125	$	466,397

The majority of revenue from our Photonics, Vision and Precision Motion 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 advanced industrial market. Revenue by end market was approximately as follows:

	Three Months Ended						Nine Months Ended
	October 2,			September 27,			October 2,			September 27,
	2020			2019			2020			2019
Medical		54	%		55	%		56	%		55	%
Advanced Industrial		46	%		45	%		44	%		45	%
Total		100	%		100	%		100	%		100	%

The majority of revenue from the Photonics and Precision Motion segments is generated from sales to customers in the advanced industrial market. The majority of revenue from the Vision segment is generated from sales to customers in the medical market.