Reportable Segments

3 Months Ended

Apr. 04, 2021

Segment Reporting [Abstract]

Reportable Segments

Reportable Segments

We are organized around two global business platforms: Enterprise Solutions and Industrial Solutions. Each of the global business platforms represents a reportable segment.

The key measures of segment profit or loss are Segment Revenues and Segment EBITDA. Segment Revenues represent non-affiliate revenues and include revenues that would have otherwise been recorded by acquired businesses as independent entities but were not recognized in our Condensed Consolidated Statements of Operations and Comprehensive Income due to the effects of purchase accounting and the associated write-down of acquired deferred revenue to fair value. Segment EBITDA excludes certain items, including depreciation expense; amortization of intangibles; asset impairment; severance, restructuring, and acquisition integration costs; purchase accounting effects related to acquisitions, such as the adjustment of acquired inventory and deferred revenue to fair value; and other costs. We allocate corporate expenses to the segments for purposes of measuring Segment EBITDA. Corporate expenses are allocated on the basis of each segment’s relative EBITDA prior to the allocation.

Our measure of segment assets does not include cash, goodwill, intangible assets, deferred tax assets, or corporate assets. All goodwill is allocated to reporting units of our segments for purposes of impairment testing.

 

	Enterprise Solutions		Industrial Solutions		Total Segments
	(In thousands)
As of and for the three months ended April 4, 2021
Segment revenues	$	226,355	$	310,026	$	536,381
Affiliate revenues	331		23		354
Segment EBITDA	28,106		51,363		79,469
Depreciation expense	5,350		6,210		11,560
Amortization of intangibles	4,336		5,611		9,947
Amortization of software development intangible assets	32		657		689
Severance, restructuring, and acquisition integration costs	1,915		3,256		5,171
Adjustments related to acquisitions and divestitures	(6,286)		6,907		621
Segment assets	476,742		582,585		1,059,327
As of and for the three months ended March 29, 2020
Segment revenues	$	212,213	$	251,313	$	463,526
Affiliate revenues	224		6		230
Segment EBITDA	24,712		35,527		60,239
Depreciation expense	5,081		5,201		10,282
Amortization of intangibles	5,504		10,681		16,185
Amortization of software development intangible assets	55		275		330
Severance, restructuring, and acquisition integration costs	2,550		1,069		3,619
Adjustments related to acquisitions and divestitures	20		—		20
Segment assets	503,658		468,600		972,258

The following table is a reconciliation of the total of the reportable segments’ Revenues and EBITDA to consolidated revenues and consolidated income from continuing operations before taxes, respectively. 

	Three Months Ended
	April 4, 2021		March 29, 2020
	(In thousands)
Total Segment and Consolidated Revenues	$	536,381	$	463,526
Total Segment EBITDA	$	79,469	$	60,239
Amortization of intangibles	(9,947)		(16,185)
Depreciation expense	(11,560)		(10,282)
Severance, restructuring, and acquisition integration costs (1)	(5,171)		(3,619)
Amortization of software development intangible assets	(689)		(330)
Adjustments related to acquisitions and divestitures (2)	(621)		(20)
Eliminations	(33)		(95)
Consolidated operating income	51,448		29,708
Interest expense, net	(15,511)		(13,324)
Total non-operating pension benefit	684		699
Consolidated income from continuing operations before taxes	$	36,621	$	17,083

(1) See Note 12, Severance, Restructuring, and Acquisition Integration Activities, for details.

(2) During the three months ended April 4, 2021, we reduced the Opterna earn-out liability by $5.8 million, recognized a $3.6 million impairment on assets held and used, recognized a $3.4 million impairment on assets held for sale, collected $1.4 million of receivables associated with the sale of Grass Valley that were previously written off, and recognized cost of sales of $0.8 million related to purchase accounting adjustments of acquired inventory to fair value for the OTN acquisition. During the three months ended March 29, 2020, we recognized cost of sales related to purchase accounting adjustments of acquired inventory to fair value for the SPC acquisition.