Segment Information

9 Months Ended

Oct. 01, 2021

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, intelligent robotic end-of-arm technology solutions, 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 1,		October 2,		October 1,		October 2,
Revenue	2021		2020		2021		2020
Photonics	$	55,263	$	46,394	$	176,113	$	149,337
Vision		65,346		64,299		196,429		198,047
Precision Motion		57,117		32,236		135,291		95,741
Total	$	177,726	$	142,929	$	507,833	$	443,125

	Three Months Ended						Nine Months Ended
	October 1,			October 2,			October 1,			October 2,
Gross Profit	2021			2020			2021			2020
Photonics	$	25,311		$	20,166		$	83,014		$	65,725
Vision		24,763			24,586			76,132			75,676
Precision Motion		27,743			15,011			64,694			42,753
Unallocated Corporate and Shared Services		(1,519	)		(658	)		(6,396	)		(1,902	)
Total	$	76,298		$	59,105		$	217,444		$	182,252

	Three Months Ended						Nine Months Ended
	October 1,			October 2,			October 1,			October 2,
Gross Profit Margin	2021			2020			2021			2020
Photonics		45.8	%		43.5	%		47.1	%		44.0	%
Vision		37.9	%		38.2	%		38.8	%		38.2	%
Precision Motion		48.6	%		46.6	%		47.8	%		44.7	%
Total		42.9	%		41.4	%		42.8	%		41.1	%

	Three Months Ended						Nine Months Ended
	October 1,			October 2,			October 1,			October 2,
Operating Income (Loss)	2021			2020			2021			2020
Photonics	$	9,294		$	7,026		$	35,885		$	22,878
Vision		5,606			3,799			12,178			14,098
Precision Motion		14,957			7,675			34,681			20,728
Unallocated Corporate and Shared Services		(14,582	)		(6,634	)		(40,378	)		(18,887	)
Total	$	15,275		$	11,866		$	42,366		$	38,817

	Three Months Ended				Nine Months Ended
	October 1,		October 2,		October 1,		October 2,
Depreciation and Amortization Expenses	2021		2020		2021		2020
Photonics	$	2,901	$	2,864	$	8,703	$	8,303
Vision		5,239		5,296		15,793		15,845
Precision Motion		2,691		1,369		5,916		4,055
Unallocated Corporate and Shared Services		59		67		201		160
Total	$	10,890	$	9,596	$	30,613	$	28,363

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
	October 1,		October 2,		October 1,		October 2,
	2021		2020		2021		2020
United States	$	72,972	$	57,635	$	191,699	$	171,364
Germany		25,313		18,885		71,448		64,266
Rest of Europe		34,163		30,483		105,338		94,281
China		22,230		17,409		68,286		50,285
Rest of Asia-Pacific		21,256		16,414		64,765		55,956
Other		1,792		2,103		6,297		6,973
Total	$	177,726	$	142,929	$	507,833	$	443,125

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 1,			October 2,			October 1,			October 2,
	2021			2020			2021			2020
Medical		53	%		54	%		53	%		56	%
Advanced Industrial		47	%		46	%		47	%		44	%
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.