Segment Information

6 Months Ended

Jul. 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				Six Months Ended
	July 2,		July 3,		July 2,		July 3,
Revenue	2021		2020		2021		2020
Photonics	$	62,357	$	47,803	$	120,851	$	102,943
Vision		63,447		64,740		131,083		133,748
Precision Motion		41,719		32,185		78,173		63,505
Total	$	167,523	$	144,728	$	330,107	$	300,196

	Three Months Ended						Six Months Ended
	July 2,			July 3,			July 2,			July 3,
Gross Profit	2021			2020			2021			2020
Photonics	$	29,593		$	20,898		$	57,702		$	45,559
Vision		24,443			24,515			51,369			51,090
Precision Motion		20,874			13,834			36,951			27,742
Unallocated Corporate and Shared Services		(2,504	)		(545	)		(4,876	)		(1,244	)
Total	$	72,406		$	58,702		$	141,146		$	123,147

	Three Months Ended						Six Months Ended
	July 2,			July 3,			July 2,			July 3,
Gross Profit Margin	2021			2020			2021			2020
Photonics		47.5	%		43.7	%		47.7	%		44.3	%
Vision		38.5	%		37.9	%		39.2	%		38.2	%
Precision Motion		50.0	%		43.0	%		47.3	%		43.7	%
Total		43.2	%		40.6	%		42.8	%		41.0	%

	Three Months Ended						Six Months Ended
	July 2,			July 3,			July 2,			July 3,
Operating Income (Loss)	2021			2020			2021			2020
Photonics	$	14,196		$	6,937		$	26,591		$	15,852
Vision		3,206			4,665			6,572			10,299
Precision Motion		12,279			6,515			19,724			13,053
Unallocated Corporate and Shared Services		(13,689	)		(4,416	)		(25,796	)		(12,253	)
Total	$	15,992		$	13,701		$	27,091		$	26,951

	Three Months Ended				Six Months Ended
	July 2,		July 3,		July 2,		July 3,
Depreciation and Amortization Expenses	2021		2020		2021		2020
Photonics	$	2,905	$	2,790	$	5,803	$	5,439
Vision		5,279		5,272		10,554		10,549
Precision Motion		1,618		1,333		3,225		2,686
Unallocated Corporate and Shared Services		73		42		142		93
Total	$	9,875	$	9,437	$	19,724	$	18,767

Revenue by Geography

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

	Three Months Ended				Six Months Ended
	July 2,		July 3,		July 2,		July 3,
	2021		2020		2021		2020
United States	$	59,497	$	54,524	$	118,727	$	113,729
Germany		23,773		22,148		46,135		45,381
Rest of Europe		35,600		30,713		71,175		63,798
China		23,506		17,472		46,057		32,876
Rest of Asia-Pacific		22,762		17,842		43,509		39,542
Other		2,385		2,029		4,504		4,870
Total	$	167,523	$	144,728	$	330,107	$	300,196

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						Six Months Ended
	July 2,			July 3,			July 2,			July 3,
	2021			2020			2021			2020
Medical		52	%		55	%		53	%		57	%
Advanced Industrial		48	%		45	%		47	%		43	%
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.