Segment Information

6 Months Ended

Jul. 01, 2022

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 are described below.

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, particularly ophthalmology applications. 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 technologies, video 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 motors, servo drives and motion control solutions, integrated stepper motors, 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				Six Months Ended
	July 1,		July 2,		July 1,		July 2,
Revenue	2022		2021		2022		2021
Photonics	$	69,461	$	62,357	$	132,243	$	120,851
Vision		65,516		63,447		127,566		131,083
Precision Motion		80,379		41,719		159,763		78,173
Total	$	215,356	$	167,523	$	419,572	$	330,107

	Three Months Ended						Six Months Ended
	July 1,			July 2,			July 1,			July 2,
Gross Profit	2022			2021			2022			2021
Photonics	$	31,182		$	29,593		$	59,569		$	57,702
Vision		26,535			24,443			51,765			51,369
Precision Motion		38,864			20,874			77,014			36,951
Unallocated Corporate and Shared Services		(1,336	)		(2,504	)		(2,827	)		(4,876	)
Total	$	95,245		$	72,406		$	185,521		$	141,146

	Three Months Ended						Six Months Ended
	July 1,			July 2,			July 1,			July 2,
Gross Profit Margin	2022			2021			2022			2021
Photonics		44.9	%		47.5	%		45.0	%		47.7	%
Vision		40.5	%		38.5	%		40.6	%		39.2	%
Precision Motion		48.4	%		50.0	%		48.2	%		47.3	%
Total		44.2	%		43.2	%		44.2	%		42.8	%

	Three Months Ended						Six Months Ended
	July 1,			July 2,			July 1,			July 2,
Operating Income (Loss)	2022			2021			2022			2021
Photonics	$	13,996		$	14,196		$	27,431		$	26,591
Vision		7,024			3,206			12,066			6,572
Precision Motion		14,083			12,279			32,421			19,724
Unallocated Corporate and Shared Services		(11,812	)		(13,689	)		(24,344	)		(25,796	)
Total	$	23,291		$	15,992		$	47,574		$	27,091

	Three Months Ended				Six Months Ended
	July 1,		July 2,		July 1,		July 2,
Depreciation and Amortization Expenses	2022		2021		2022		2021
Photonics	$	2,697	$	2,905	$	5,474	$	5,803
Vision		4,322		5,279		8,749		10,554
Precision Motion		6,678		1,618		13,415		3,225
Unallocated Corporate and Shared Services		114		73		217		142
Total	$	13,811	$	9,875	$	27,855	$	19,724

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				Six Months Ended
	July 1,		July 2,		July 1,		July 2,
	2022		2021		2022		2021
United States	$	86,649	$	59,497	$	169,355	$	118,727
Germany		33,123		23,773		64,901		46,135
Rest of Europe		37,918		35,600		71,260		71,175
China		29,871		23,506		56,670		46,057
Rest of Asia-Pacific		23,090		22,762		47,585		43,509
Other		4,705		2,385		9,801		4,504
Total	$	215,356	$	167,523	$	419,572	$	330,107

The majority of revenue from 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 the advanced industrial market. Revenue by end market was approximately as follows:

	Three Months Ended						Six Months Ended
	July 1,			July 2,			July 1,			July 2,
	2022			2021			2022			2021
Medical		47	%		52	%		47	%		53	%
Advanced Industrial		53	%		48	%		53	%		47	%
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.