Operating Segment Information

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Operating Segment Information

Operating Segment Information

Our reporting structure is comprised of the following strategic operating segments: AES and EMS. The remaining operations, which represent our non-core businesses, are reported in the Other operating segment.

Our AES operating segment designs, develops, manufactures and sells circuit materials, ceramic substrate materials, busbars and cooling solutions for applications in electric and hybrid electric vehicles (EV/HEV), automotive (i.e., advanced driver assistance systems (ADAS)), aerospace and defense (i.e., antenna systems, communication systems and phased array radar systems), renewable energy (i.e., wind and solar), wireless infrastructure (i.e., power amplifiers, antennas and small cells), mass transit, industrial (variable frequency drives), connected devices (i.e., mobile internet devices and thermal solutions) and wired infrastructure (i.e., computing and internet protocol (IP) infrastructure) markets.

Our EMS operating segment designs, develops, manufactures and sells engineered material solutions for a wide variety of applications and markets. These include polyurethane and silicone materials used in cushioning, gasketing and sealing, and vibration management applications for EV/HEV, general industrial, portable electronics, automotive, mass transit, aerospace and defense and footwear and impact mitigation markets; customized silicones used in flex heater and semiconductor thermal applications for EV/HEV, general industrial, portable electronics, automotive, mass transit, aerospace and defense and medical markets; and polytetrafluoroethylene and ultra-high molecular weight polyethylene materials used in wire and cable protection, electrical insulation, conduction and shielding, hose and belt protection, vibration management, cushioning, gasketing and sealing, and venting applications for EV/HEV, general industrial, automotive and aerospace and defense markets.

Our Other operating segment consists of elastomer components for applications in the general industrial market, as well as elastomer floats for level sensing in fuel tanks, motors, and storage tanks applications in the general industrial and automotive markets.

The following table presents a disaggregation of revenue from contracts with customers and other pertinent financial information, for the periods indicated; inter-segment sales have been eliminated from the net sales data:

(Dollars in thousands)	Advanced Electronics Solutions		Elastomeric Material Solutions		Other		Total
Three Months Ended September 30, 2023
Net sales - recognized over time	$	60,788	$	1,331	$	4,093	$	66,212
Net sales - recognized at a point in time	65,612		96,655		669		162,936
Total net sales	$	126,400	$	97,986	$	4,762	$	229,148
Operating income	$	5,674	$	19,851	$	1,597	$	27,122
Three Months Ended September 30, 2022
Net sales - recognized over time	$	72,969	$	3,346	$	4,110	$	80,425
Net sales - recognized at a point in time	57,639		107,637		1,530		166,806
Total net sales	$	130,608	$	110,983	$	5,640	$	247,231
Operating income	$	2,263	$	14,322	$	1,891	$	18,476
Nine Months Ended September 30, 2023
Net sales - recognized over time	$	180,338	$	17,423	$	12,011	$	209,772
Net sales - recognized at a point in time	212,102		278,153		3,789		494,044
Total net sales	$	392,440	$	295,576	$	15,800	$	703,816
Operating income	$	6,001	$	43,293	$	5,470	$	54,764
Nine Months Ended September 30, 2022
Net sales - recognized over time	$	214,091	$	9,090	$	12,763	$	235,944
Net sales - recognized at a point in time	190,835		317,223		3,465		511,523
Total net sales	$	404,926	$	326,313	$	16,228	$	747,467
Operating income	$	12,342	$	43,920	$	5,501	$	61,763

Net sales by operating segment and by geographic area were as follows:

(Dollars in thousands)	Net Sales(1)
Region/Country	Advanced Electronics Solutions		Elastomeric Material Solutions		Other		Total
Three Months Ended September 30, 2023
United States	$	20,403	$	37,269	$	1,060	$	58,732
Other Americas	273		2,453		(34)		2,692
Total Americas	20,676		39,722		1,026		61,424
China	33,719		28,341		1,762		63,822
Other APAC	20,766		8,793		555		30,114
Total APAC	54,485		37,134		2,317		93,936
Germany	24,830		6,295		95		31,220
Other EMEA	26,409		14,835		1,324		42,568
Total EMEA	51,239		21,130		1,419		73,788
Total net sales	$	126,400	$	97,986	$	4,762	$	229,148
Three Months Ended September 30, 2022
United States	$	33,969	$	46,772	$	1,087	$	81,828
Other Americas	843		2,534		247		3,624
Total Americas	34,812		49,306		1,334		85,452
China	36,126		37,349		2,290		75,765
Other APAC	16,544		5,173		508		22,225
Total APAC	52,670		42,522		2,798		97,990
Germany	19,727		7,310		393		27,430
Other EMEA	23,399		11,845		1,115		36,359
Total EMEA	43,126		19,155		1,508		63,789
Total net sales	$	130,608	$	110,983	$	5,640	$	247,231

(1)Net sales are allocated to countries based on the location of the customer. The table above lists individual countries with 10% or more of net sales for the periods indicated.

(Dollars in thousands)	Net Sales(1)
Region/Country	Advanced Electronics Solutions		Elastomeric Material Solutions		Other		Total
Nine Months Ended September 30, 2023
United States	$	63,263	$	123,109	$	3,127	$	189,499
Other Americas	3,232		11,961		282		15,475
Total Americas	66,495		135,070		3,409		204,974
China	110,237		69,227		6,187		185,651
Other APAC	67,817		23,760		1,934		93,511
Total APAC	178,054		92,987		8,121		279,162
Germany	74,002		22,449		334		96,785
Other EMEA	73,889		45,070		3,936		122,895
Total EMEA	147,891		67,519		4,270		219,680
Total net sales	$	392,440	$	295,576	$	15,800	$	703,816
Nine Months Ended September 30, 2022
United States	$	94,907	$	136,340	$	3,075	$	234,322
Other Americas	2,814		7,550		614		10,978
Total Americas	97,721		143,890		3,689		245,300
China	113,448		99,734		6,048		219,230
Other APAC	60,023		18,418		1,778		80,219
Total APAC	173,471		118,152		7,826		299,449
Germany	57,653		23,784		874		82,311
Other EMEA	76,081		40,487		3,839		120,407
Total EMEA	133,734		64,271		4,713		202,718
Total net sales	$	404,926	$	326,313	$	16,228	$	747,467

(1)Net sales are allocated to countries based on the location of the customer. The table above lists individual countries with 10% or more of net sales for the periods indicated.

Revenue from Contracts with Customers

We have contract assets primarily related to unbilled revenue for revenue recognized related to products that are deemed to have no alternative use whereby we have the right to payment. Revenue is recognized in advance of billing to the customer in these circumstances as billing is typically performed at the time of shipment to the customer. The unbilled revenue is included in contract assets on the condensed consolidated statements of financial position.

Contract assets by operating segment were as follows:

(Dollars in thousands)	September 30, 2023		December 31, 2022
Advanced Electronics Solutions	$	41,264	$	33,736
Elastomeric Material Solutions	1,503		1,584
Other	3,709		3,533
Total contract assets	$	46,476	$	38,853

We did not have any contract liabilities as of September 30, 2023 or December 31, 2022. No impairment losses were recognized for the three- and nine- month periods ended September 30, 2023 and 2022, respectively, on any receivables or contract assets arising from our contracts with customers.