Segment and Geographic Information

12 Months Ended

Oct. 03, 2015

Segment Reporting [Abstract]

Segment and Geographic Information

SEGMENT AND GEOGRAPHIC 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. While both segments work to deliver cost-effective solutions, SLS develops and manufactures configurable, advanced-performance products largely serving the microelectronics, scientific research and government programs and OEM components and instrumentation markets. The size and complexity of many of our SLS products require service to be performed at the customer site by factory-trained field service engineers. 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 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 revenue 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 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 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 from operations for our operating segments a reconciliation of our total income from operations to net income (in thousands):

	Fiscal
	2015			2014			2013
Net sales:
Specialty Laser Systems	$	559,593		$	565,552		$	571,644
Commercial Lasers and Components	242,867			229,087			238,482
Total net sales	$	802,460		$	794,639		$	810,126
Income from operations:
Specialty Laser Systems	$	133,506		$	117,947		$	115,931
Commercial Lasers and Components	9,127			2,688			12,411
Corporate and other	(41,886		)	(43,769		)	(43,443		)
Total income from operations	$	100,747		$	76,866		$	84,899
Total other income (expense), net	(1,179		)	2,353			(1,403		)
Income before income taxes	99,568			79,219			83,496
Provision for income taxes	23,159			20,113			17,141
Net income	$	76,409		$	59,106		$	66,355

Geographic Information

Our foreign operations consist primarily of manufacturing facilities and sales offices in Europe and Asia-Pacific. Sales, marketing and customer service activities are conducted through sales subsidiaries throughout the world. Geographic sales information for fiscal 2015, 2014 and 2013 is based on the location of the end customer. Geographic long-lived asset information presented below is based on the physical location of the assets at the end of each year.

Sales to unaffiliated customers are as follows (in thousands):

	Fiscal
SALES	2015		2014		2013
United States	$	213,483	$	202,205	$	188,204
Foreign countries:
South Korea	195,589		167,473		185,737
Japan	135,674		124,765		156,152
Germany	75,474		86,023		93,855
Europe, other	53,027		64,648		58,500
Asia-Pacific, other	85,584		98,760		73,794
Rest of World	43,629		50,765		53,884
Total foreign countries sales	588,977		592,434		621,922
Total sales	$	802,460	$	794,639	$	810,126

Long-lived assets, which include all non-current assets other than goodwill, intangibles and deferred taxes, by geographic region, are as follows (in thousands):

	Fiscal Year-end
LONG-LIVED ASSETS	2015		2014
United States	$	82,951	$	82,274
Foreign countries:
Germany	33,964		38,678
Europe, other	2,993		2,920
Asia-Pacific	11,504		13,650
Total foreign countries long-lived assets	48,461		55,248
Total long-lived assets	$	131,412	$	137,522

Major Customers

We had one customer who accounted for 17%, 13% and 14% of consolidated revenue during fiscal 2015, 2014 and 2013, respectively. This customer purchased primarily from our SLS segment.