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Segment Reporting | 6 Months Ended
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Jun. 29, 2024
Segment Reporting [Abstract] |
Segment Reporting | The Company’s financial segment reporting reflects an organizational alignment intended to align with the key elements of the advanced semiconductor manufacturing ecosystem. While these segments have separate products and technical know-how, they share common business systems and processes, technology centers and technology roadmaps. W ith the complementary capabilities across these segments, the Company believes it is uniquely positioned to create new, co-optimized and increasingly integrated solutions for its customers, which should translate into improved device performance, lower cost of ownership and faster time to market. The Company reports its financial performance in the following segments: •Materials Solutions: MS provides materials-based solutions, such as chemical mechanical planarization slurries and pads, deposition materials, process chemistries and gases, formulated cleans, etchants and other specialty materials that enable our customers to achieve better device performance and faster time to yield, while providing for lower total cost of ownership. •Microcontamination Control: MC offers advanced solutions that improve customers’ yield, device reliability and cost by filtering and purifying critical liquid chemistries and gases used in semiconductor manufacturing processes and other high-technology industries. •Advanced Materials Handling: AMH develops solutions that improve customers’ yields by protecting critical materials during manufacturing, transportation, and storage, including products that monitor, protect, transport and deliver critical liquid chemistries, wafers, and other substrates for a broad set of applications in the semiconductor, life sciences and other high-technology industries. The Company accounts for inter-segment sales similar to third-party transactions and the sales price reflects current market prices. Inter-segment sales are eliminated in consolidation and are not included in consolidated sales on the financial statements. In the third quarter of 2023, in order to align its segment financial reporting with a change in its business structure, the Company realigned its segments. All prior period amounts related to the segment change have been recast for comparability. Summarized financial information for the Company’s reportable segments is shown in the following tables.
| Three months ended |  | Six months ended
(In thousands) | June 29, 2024 |  | July 1, 2023 |  | June 29, 2024 |  | July 1, 2023
Net sales |  |  |  |  |  |  |
MS | $ | 342,333 |  |  | $ | 440,634 |  |  | $ | 692,369 |  |  | $ | 888,964 |
MC | 293,769 |  |  | 283,614 |  |  | 561,633 |  |  | 552,911 |
AMH | 188,225 |  |  | 190,356 |  |  | 351,079 |  |  | 409,209 |
Inter-segment elimination | (11,675) |  |  | (13,604) |  |  | (21,404) |  |  | (27,688) |
Total net sales | $ | 812,652 |  |  | $ | 901,000 |  |  | $ | 1,583,677 |  |  | $ | 1,823,396 |
| Three months ended |  | Six months ended
(In thousands) | June 29, 2024 |  | July 1, 2023 |  | June 29, 2024 |  | July 1, 2023
Segment profit |  |  |  |  |  |  |
MS (1) | $ | 70,268 |  |  | $ | 215,738 |  |  | $ | 137,392 |  |  | $ | 186,216 |
MC | 93,709 |  |  | 100,661 |  |  | 180,264 |  |  | 196,658 |
AMH | 28,980 |  |  | 35,830 |  |  | 53,586 |  |  | 83,995 |
Total segment profit | $ | 192,957 |  |  | $ | 352,229 |  |  | $ | 371,242 |  |  | $ | 466,869 |
(1) MS segment profit is inclusive of a $154.8 million gain, net on termination of alliance agreement for the three and six months ended July 1, 2023, a $14.9 million and $28.6 million loss on sale of business and held-for-sale assets for the three and six months ended July 1, 2023, respectively, a $88.9 million goodwill impairment charge relating to the EC reporting unit for the six months ended July 1, 2023 and a $13.0 million long-lived asset impairment charge for the six months ended June 29, 2024. The following table reconciles total segment profit to income before income tax expense (benefit):
| Three months ended |  | Six months ended
(In thousands) | June 29, 2024 |  | July 1, 2023 |  | June 29, 2024 |  | July 1, 2023
Total segment profit | $ | 192,957 |  |  | $ | 352,229 |  |  | $ | 371,242 |  |  | $ | 466,869 |
Less: |  |  |  |  |  |  |
Amortization of intangible assets | 47,513 |  |  | 54,680 |  |  | 97,672 |  |  | 112,254 |
Unallocated general and administrative expenses | 15,338 |  |  | 29,935 |  |  | 25,872 |  |  | 73,535 |
Operating income | 130,106 |  |  | 267,614 |  |  | 247,698 |  |  | 281,080 |
Interest expense | 53,687 |  |  | 80,908 |  |  | 111,060 |  |  | 167,054 |
Interest income | (1,160) |  |  | (2,303) |  |  | (4,154) |  |  | (3,628) |
Other expense, net | 2,977 |  |  | 7,724 |  |  | 17,262 |  |  | 3,066 |
Income before income tax expense (benefit) | $ | 74,602 |  |  | $ | 181,285 |  |  | $ | 123,530 |  |  | $ | 114,588 |
In the following tables, revenue is disaggregated by customers’ country or region based on the ship to location of the customer for the three and six months ended June 29, 2024 and July 1, 2023, respectively.
| Three months ended June 29, 2024
(In thousands) | MS |  | MC |  | AMH |  | Inter-segment |  | Total
North America | $ | 78,830 |  |  | $ | 52,907 |  |  | $ | 61,230 |  |  | $ | (11,675) |  |  | $ | 181,292 |
Taiwan | 58,594 |  |  | 72,715 |  |  | 28,718 |  |  | — |  |  | 160,027 |
China | 63,783 |  |  | 60,333 |  |  | 45,038 |  |  | — |  |  | 169,154 |
South Korea | 50,461 |  |  | 31,127 |  |  | 21,056 |  |  | — |  |  | 102,644 |
Japan | 28,624 |  |  | 36,195 |  |  | 8,031 |  |  | — |  |  | 72,850 |
Europe | 27,864 |  |  | 24,160 |  |  | 17,072 |  |  | — |  |  | 69,096 |
Southeast Asia | 34,177 |  |  | 16,332 |  |  | 7,080 |  |  | — |  |  | 57,589 |
| $ | 342,333 |  |  | $ | 293,769 |  |  | $ | 188,225 |  |  | $ | (11,675) |  |  | $ | 812,652 |
| Three months ended July 1, 2023
(In thousands) | MS |  | MC |  | AMH |  | Inter-segment |  | Total
North America | $ | 140,881 |  |  | $ | 45,947 |  |  | $ | 56,275 |  |  | $ | (13,604) |  |  | $ | 229,499 |
Taiwan | 57,126 |  |  | 53,987 |  |  | 28,780 |  |  | — |  |  | 139,893 |
China | 50,703 |  |  | 54,701 |  |  | 35,213 |  |  | — |  |  | 140,617 |
South Korea | 55,885 |  |  | 29,824 |  |  | 27,184 |  |  | — |  |  | 112,893 |
Japan | 25,714 |  |  | 57,789 |  |  | 11,768 |  |  | — |  |  | 95,271 |
Europe | 65,805 |  |  | 24,647 |  |  | 21,902 |  |  | — |  |  | 112,354 |
Southeast Asia | 44,520 |  |  | 16,719 |  |  | 9,234 |  |  | — |  |  | 70,473 |
| $ | 440,634 |  |  | $ | 283,614 |  |  | $ | 190,356 |  |  | $ | (13,604) |  |  | $ | 901,000 |
| Six months ended June 29, 2024
(In thousands) | MS |  | MC |  | AMH |  | Inter-segment |  | Total
North America | $ | 175,574 |  |  | $ | 88,366 |  |  | $ | 112,015 |  |  | $ | (21,404) |  |  | $ | 354,551 |
Taiwan | 113,468 |  |  | 141,806 |  |  | 59,882 |  |  | — |  |  | 315,156 |
China | 118,953 |  |  | 124,021 |  |  | 75,929 |  |  | — |  |  | 318,903 |
South Korea | 97,316 |  |  | 62,262 |  |  | 42,687 |  |  | — |  |  | 202,265 |
Japan | 59,053 |  |  | 67,521 |  |  | 15,736 |  |  | — |  |  | 142,310 |
Europe | 62,172 |  |  | 47,967 |  |  | 32,245 |  |  | — |  |  | 142,384 |
Southeast Asia | 65,833 |  |  | 29,690 |  |  | 12,585 |  |  | — |  |  | 108,108 |
| $ | 692,369 |  |  | $ | 561,633 |  |  | $ | 351,079 |  |  | $ | (21,404) |  |  | $ | 1,583,677 |
| Six months ended July 1, 2023
(In thousands) | MS |  | MC |  | AMH |  | Inter-segment |  | Total
North America | $ | 288,210 |  |  | $ | 87,713 |  |  | $ | 131,873 |  |  | $ | (27,688) |  |  | $ | 480,108 |
Taiwan | 115,320 |  |  | 108,222 |  |  | 65,442 |  |  | — |  |  | 288,984 |
China | 98,663 |  |  | 110,372 |  |  | 67,013 |  |  | — |  |  | 276,048 |
South Korea | 112,256 |  |  | 59,653 |  |  | 61,640 |  |  | — |  |  | 233,549 |
Japan | 55,070 |  |  | 107,542 |  |  | 23,084 |  |  | — |  |  | 185,696 |
Europe | 129,232 |  |  | 51,651 |  |  | 43,886 |  |  | — |  |  | 224,769 |
Southeast Asia | 90,213 |  |  | 27,758 |  |  | 16,271 |  |  | — |  |  | 134,242 |
| $ | 888,964 |  |  | $ | 552,911 |  |  | $ | 409,209 |  |  | $ | (27,688) |  |  | $ | 1,823,396 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 48 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-48 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards 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