Segment Information

3 Months Ended

Apr. 02, 2021

Segment Reporting [Abstract]

Segment Information

15. 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
	April 2,		April 3,
Revenue	2021		2020
Photonics	$	58,493	$	55,140
Vision		67,636		69,008
Precision Motion		36,455		31,320
Total	$	162,584	$	155,468

	Three Months Ended
	April 2,			April 3,
Gross Profit	2021			2020
Photonics	$	28,109		$	24,661
Vision		26,926			26,575
Precision Motion		16,077			13,908
Unallocated Corporate and Shared Services		(2,372	)		(699	)
Total	$	68,740		$	64,445

	Three Months Ended
	April 2,			April 3,
Gross Profit Margin	2021			2020
Photonics		48.1	%		44.7	%
Vision		39.8	%		38.5	%
Precision Motion		44.1	%		44.4	%
Total		42.3	%		41.5	%

	Three Months Ended
	April 2,			April 3,
Operating Income (Loss)	2021			2020
Photonics	$	12,395		$	8,915
Vision		3,366			5,634
Precision Motion		7,446			6,538
Unallocated Corporate and Shared Services		(12,108	)		(7,837	)
Total	$	11,099		$	13,250

	Three Months Ended
	April 2,		April 3,
Depreciation and Amortization Expenses	2021		2020
Photonics	$	2,898	$	2,649
Vision		5,275		5,277
Precision Motion		1,607		1,353
Unallocated Corporate and Shared Services		69		51
Total	$	9,849	$	9,330

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
	April 2,		April 3,
	2021		2020
United States	$	59,230	$	59,205
Germany		22,363		23,233
Rest of Europe		35,575		33,085
China		22,551		15,404
Rest of Asia-Pacific		20,747		21,700
Other		2,118		2,841
Total	$	162,584	$	155,468

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
	April 2,			April 3,
	2021			2020
Medical		55	%		58	%
Advanced Industrial		45	%		42	%
Total		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.