Reportable Segments

3 Months Ended

Apr. 03, 2022

Segment Reporting [Abstract]

Reportable Segments

Reportable Segments

We are organized around two global businesses: Enterprise Solutions and Industrial Automation Solutions. Each of the global businesses represents a reportable segment. In conjunction with the Tripwire divestiture during the first quarter of 2022, we changed the name of our former Industrial Solutions segment to Industrial Automation Solutions. The composition of the segment did not change as a result of this name change.

The key measures of segment profit or loss are Segment Revenues and Segment EBITDA. Segment Revenues represent non-affiliate revenues. 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 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. Inter-company revenues between our segments is not material.

 

	Enterprise Solutions		Industrial Automation Solutions		Total Segments
	(In thousands)
As of and for the three months ended April 3, 2022
Segment Revenues	$	268,430	$	341,941	$	610,371
Segment EBITDA	30,821		67,528		98,349
Depreciation expense	5,426		5,800		11,226
Amortization of intangibles	4,097		4,720		8,817
Amortization of software development intangible assets	22		985		1,007
Severance, restructuring, and acquisition integration costs	328		3,395		3,723
Segment assets	574,494		628,290		1,202,784
As of and for the three months ended April 4, 2021
Segment Revenues	$	226,355	$	282,328	$	508,683
Segment EBITDA	28,291		47,611		75,902
Depreciation expense	5,363		5,364		10,727
Amortization of intangibles	4,336		3,657		7,993
Amortization of software development intangible assets	32		377		409
Severance, restructuring, and acquisition integration costs	1,952		3,219		5,171
Adjustments related to acquisitions and divestitures	(6,307)		(67)		(6,374)
Asset impairments	—		6,995		6,995
Segment assets	476,217		560,351		1,036,568

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 3, 2022		April 4, 2021
	(In thousands)
Total Segment and Consolidated Revenues	$	610,371	$	508,683
Total Segment EBITDA	$	98,349	$	75,902
Depreciation expense	(11,226)		(10,727)
Amortization of intangibles	(8,817)		(7,993)
Amortization of software development intangible assets	(1,007)		(409)
Severance, restructuring, and acquisition integration costs (1)	(3,723)		(5,171)
Asset impairments (2)	—		(6,995)
Adjustments related to acquisitions and divestitures (3)	—		6,374
Eliminations	(55)		(33)
Consolidated operating income	73,521		50,948
Interest expense, net	(14,411)		(15,511)
Loss on debt extinguishment	(6,392)		—
Total non-operating pension benefit	1,200		684
Consolidated income from continuing operations before taxes	$	53,918	$	36,121

(1) Severance, restructuring, and acquisition integration costs for the three months ended April 3, 2022 primarily relate to our Acquisition Integration Program. See Note 12. Costs for the three months ended April 4, 2021 primarily relate to our Acquisition Integration Program and completed Cost Reduction Program.

(2) During the three months ended April 4, 2021, we recognized a $3.6 million impairment on assets held and used and a $3.4 million impairment on assets held for sale. See Note 11.(3) During the three months ended April 4, 2021, we reduced the Opterna earn-out liability by $5.8 million, 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 Systems acquisition.