Segment Information

9 Months Ended

Jun. 29, 2013

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

We are organized into two reportable operating segments: Specialty Lasers and Systems (“SLS”) and Commercial Lasers and Components (“CLC”). This segmentation reflects the go-to-market strategies for various products and markets.  SLS develops and manufactures configurable, advanced-performance products largely serving the microelectronics, scientific research and government programs and original equipment manufacturer (“OEM”) components and instrumentation markets. The size and complexity of many of the SLS products generally require service to be performed at the customer site by factory-trained field service engineers. While both segments work to deliver cost-effective solutions, CLC focuses on higher volume products that are offered in set configurations. The product architectures are designed for easy exchange at the point of use such that product service and repairs are generally based upon advanced replacement and depot (i.e., factory) repair. CLC’s primary markets include materials processing, OEM components and instrumentation and microelectronics. 

We have identified SLS and CLC as operating segments for which discrete financial information is available. Both units have dedicated engineering, manufacturing, product business management and product line management functions. A small portion of our outside net sales is attributable to projects and recently developed products for which a segment has not yet been determined. The associated direct and indirect costs are presented in the category of Corporate and other, along with other corporate costs as described below.

Our Chief Executive Officer has been identified as the chief operating decision maker (CODM) as he assesses the performance of the segments and decides how to allocate resources to the segments. Income (loss) from operations is the measure of profit and loss that our CODM uses to assess performance and make decisions. As assets are not a measure used to assess the performance of the company by the CODM, asset information is not tracked or compiled by segment and is not available to be reported in our disclosures. Income (loss) from operations represents the net sales less the cost of sales and direct operating expenses incurred within the operating segments as well as allocated expenses such as shared sales and manufacturing costs. We do not allocate to our operating segments certain operating expenses which we manage separately at the corporate level. These unallocated costs include stock-based compensation and corporate functions (certain research and development, management, finance, legal and human resources) and are included in the results below under Corporate and other in the reconciliation of operating results. Management does not consider unallocated Corporate and other costs in its measurement of segment performance.

The following table provides net sales and income (loss) from operations for our operating segments (in thousands):

	Three Months Ended						Nine Months Ended
	June 29, 2013			June 30, 2012			June 29, 2013			June 30, 2012
Net sales:
Specialty Laser Systems	$	149,466		$	140,407		$	423,608		$	414,338
Commercial Lasers and Components	64,259			55,976			173,377			166,096
Total net sales	$	213,725		$	196,383		$	596,985		$	580,434
Income (loss) from operations:
Specialty Laser Systems	$	28,071		$	31,484		$	84,990		$	92,582
Commercial Lasers and Components	4,395			2,955			7,667			8,125
Corporate and other	(11,022		)	(8,117		)	(33,818		)	(28,735		)
Total income from operations	$	21,444		$	26,322		$	58,839		$	71,972

Major Customers

We had two customers during the three months endedJune 29, 2013 who accounted for 16.2% and 11.2% respectively, of consolidated net sales; and the same two customers accounted for 13.3% and 10.0%, respectively, of consolidated net sales during the nine months endedJune 29, 2013. Both customers purchased primarily from our SLS segment. There was one customer who accounted for 11.4% of consolidated net sales for the three months endedJune 30, 2012, and two customers who accounted for 10.4% and 10.3%, respectively, of consolidated net sales for the nine months endedJune 30, 2012; both customers purchased primarily from our SLS segment.

We had one customer who accounted for 18.3% of accounts receivable at June 29, 2013. There were two customers who accounted for 14.9% and 14.8%, respectively, of accounts receivable at September 29, 2012.