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Operating Segments and Geographic Information
3 Months Ended
Sep. 30, 2017
Segment Reporting [Abstract]  
Operating Segments and Geographic Information
Note 17. Operating Segments and Geographic Information
Our chief executive officer is our Chief Operating Decision Maker (“CODM”). The CODM allocates resources to the segments based on their business prospects, competitive factors, net revenue and gross margin.
We are an industry leading provider of optical and photonic products defined by revenue and market share addressing a range of end-market applications including optical communications and commercial lasers. We have two operating segments, Optical Communications, which we refer to as OpComms, and Commercial Lasers, which we refer to as Lasers. The two operating segments were primarily determined based on how the CODM views and evaluates our operations. Operating results are regularly reviewed by the CODM to make decisions about resources to be allocated to the segments and to assess their performance. Other factors, including market separation and customer specific applications, go-to-market channels, products and manufacturing, are considered in determining the formation of these operating segments.
We do not allocate research and development, sales and marketing, or general and administrative expenses to our segments because management does not include the information in its measurement of the performance of the operating segments. In addition, we do not allocate amortization and impairment of acquisition-related intangible assets, stock-based compensation and certain other charges impacting the gross margin of each segment because management does not include this information in its measurement of the performance of the operating segments.
Information on reportable segments utilized by our CODM is as follows (in millions):
 
Three Months Ended
 
September 30, 2017

October 1, 2016
Net revenue:
 
 
 
OpComms
$
207.9

 
$
218.3

Lasers
35.3

 
39.8

Net revenue
$
243.2

 
$
258.1

Gross profit:
 
 
 
OpComms
72.1

 
71.0

Lasers
10.6

 
17.2

Total segment gross profit
82.7

 
88.2

Unallocated amounts:
 
 
 
Stock-based compensation
(2.7
)
 
(2.0
)
Amortization of intangibles
(0.8
)
 
(1.7
)
Other charges (1)
(10.7
)
 
(2.8
)
Gross profit
$
68.5

 
$
81.7


(1) The increase in unallocated corporate items primarily relates to inventory write-downs due to canceled programs which were not allocated to the segments.
The table below discloses the percentage of our total net revenue attributable to each of our two reportable segments. In addition, it discloses the percentage of our total net revenue attributable to our product offerings which serve the Telecom, Datacom and consumer and industrial (“Consumer and Industrial”) markets which accounted for more than 10% or more of our total net revenue during the last three fiscal years:
 
Three Months Ended
 
 
September 30, 2017
 
October 1, 2016
OpComms:
 
85.5
%
 
84.6
%
Telecom
 
45.4
%
 
64.2
%
Datacom
 
18.6
%
 
17.1
%
Consumer and Industrial
 
21.5
%
 
3.3
%
Lasers
 
14.5
%
 
15.4
%

We operate in three geographic regions: Americas, Asia-Pacific, and EMEA (Europe, Middle East, and Africa). Net revenue is assigned to the geographic region and country where our product is initially shipped. For example, certain customers may request shipment of our product to a contract manufacturer in one country, which may differ from the location of their end customers. The following table presents net revenue by the three geographic regions we operate in and net revenue from countries that exceeded 10% of our total net revenue (in millions, except percentage data):
 
Three Months Ended
 
September 30, 2017
 
October 1, 2016
Net revenue:
 
 
 
 
 
 
 
Americas:
 
 
 
 
 
 
 
United States
$
33.6

 
13.8
%
 
$
35.9

 
13.9
%
Mexico
24.8

 
10.3

 
39.8

 
15.4

Other Americas
2.2

 
0.9

 
4.0

 
1.5

Total Americas
$
60.6

 
25.0
%
 
$
79.7

 
30.8
%
 

 

 

 

Asia-Pacific:

 

 

 

Hong Kong
$
48.9

 
20.1
%
 
$
58.3

 
22.6
%
Japan
34.1

 
14.0

 
31.3

 
12.1

Other Asia-Pacific
74.2

 
30.5

 
65.4

 
25.3

Total Asia-Pacific
$
157.2

 
64.6
%
 
$
155.0

 
60.0
%
 

 

 

 

EMEA
$
25.4

 
10.4
%
 
$
23.4

 
9.2
%
 

 

 

 

Total net revenue
$
243.2

 

 
$
258.1

 


Long-lived assets, namely net property, plant and equipment were identified based on the operations in the corresponding geographic areas (in millions):
 
As of
 
September 30, 2017

July 1, 2017
Property, Plant and Equipment, net
 
 
 
United States
$
94.4

 
$
88.2

China
84.2

 
82.5

Thailand
86.8

 
85.3

Other countries
28.3

 
17.5

Total long-lived assets
$
293.7

 
$
273.5


In March 2017, we completed the purchase of a property in Thailand for approximately $9.9 million in cash. This property will provide additional manufacturing capacity for future growth. The building was valued at $5.5 million and the land was valued at $4.4 million.
We purchase a substantial portion of our inventory from contract manufacturers and vendors located primarily in Thailand and China. As of September 30, 2017, 45% total inventory was purchased from a single contract manufacturer, and 26% and 11%, respectively, were purchased from two other contract manufacturers.