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Business Segment, Geographic Area, Product and Significant Customer Information | 9 Months Ended
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Sep. 30, 2016
Segment Reporting [Abstract] |
Business Segment, Geographic Area, Product and Significant Customer Information |
19) | Business Segment, Geographic Area, Product and Significant Customer Information
The Company is a global provider of instruments, subsystems and process control solutions that measure, control, power, monitor and analyze critical parameters of advanced manufacturing processes to improve process performance and productivity. The Company also provides services relating to the maintenance and repair of products it sells, software maintenance, installation services and training. The Company’s Chief Operating Decision Maker (“CODM”) utilizes financial information to make decisions about allocating resources and assessing performance for the entire Company, which is used in the decision making process to assess performance. Based upon the information provided to the CODM, the Company has determined it has two reportable segments. Effective April 29, 2016, in conjunction with the Newport Merger, the Company changed its reportable segments based upon the organizational structure of the Company and how the CODM utilizes information provided to allocate resources and make decisions. The Company’s two reportable segments are the Vacuum & Analysis Division and the Light & Motion Division. The Vacuum & Analysis Division provides a broad range of instruments, components, subsystems and software which are derived from the Company’s core competencies in pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, residual gas analysis, leak detection, control and information technology, ozone generation and delivery, RF & DC power, reactive gas generation and vacuum technology. The Light & Motion Division provides a broad range of instruments, components and subsystems which are derived from the Company’s core competencies in lasers, photonics, sub-micron positioning, vibration isolation and optics. The Company derives its segment results directly from the manner in which results are reported in its management reporting system. The accounting policies that the Company uses to derive reportable segment results are substantially the same as those used for external reporting purposes. The Company does not disclose external or intersegment revenues separately by reportable segment as this information is not presented to the CODM for decision making purposes. The following is net revenues by reportable segment:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |
Vacuum & Analysis Division |  | $ | 229,167 |  |  | $ | 209,332 |  |  | $ | 620,207 |  |  | $ | 641,137 |
Light & Motion Division |  |  | 151,493 |  |  |  | — |  |  |  | 269,995 |  |  |  | — |
|  | $ | 380,660 |  |  | $ | 209,332 |  |  | $ | 890,202 |  |  | $ | 641,137 |
The following is a reconciliation of segment gross profit to consolidated net income:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |
Gross profit by reportable segment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Vacuum & Analysis Division |  | $ | 104,232 |  |  | $ | 94,229 |  |  | $ | 273,004 |  |  | $ | 290,073 |
Light & Motion Division |  |  | 64,153 |  |  |  | — |  |  |  | 109,207 |  |  |  | — |
Total gross profit by reportable segment |  |  | 168,385 |  |  |  | 94,229 |  |  |  | 382,211 |  |  |  | 290,073 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Research and development |  |  | 32,268 |  |  |  | 17,217 |  |  |  | 77,709 |  |  |  | 51,464 |
Selling, general and administrative |  |  | 70,424 |  |  |  | 33,396 |  |  |  | 175,803 |  |  |  | 97,532 |
Acquisition costs |  |  | 233 |  |  |  | — |  |  |  | 10,932 |  |  |  | 30 |
Restructuring |  |  | — |  |  |  | 562 |  |  |  | 24 |  |  |  | 1,569 |
Amortization of intangible assets |  |  | 12,452 |  |  |  | 1,691 |  |  |  | 22,990 |  |  |  | 5,071 |
Income from operations |  |  | 53,008 |  |  |  | 41,363 |  |  |  | 94,753 |  |  |  | 134,407 |
Interest and other (expense) income, net |  |  | (10,760 | ) |  |  | 721 |  |  |  | (16,332 | ) |  |  | 2,015 |
Income before income taxes |  |  | 42,248 |  |  |  | 42,084 |  |  |  | 78,421 |  |  |  | 136,422 |
Provision for income taxes |  |  | 9,699 |  |  |  | 12,315 |  |  |  | 19,099 |  |  |  | 39,647 |
Net income |  | $ | 32,549 |  |  | $ | 29,769 |  |  | $ | 59,322 |  |  | $ | 96,775 |
The following is capital expenditures by reportable segment for the three and nine months ended September 30, 2016 and 2015:
|  | Vacuum & Analysis Division |  |  | Light & Motion Division |  |  | Total |
Three Months Ended September 30, 2016: |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures |  | $ | 2,772 |  |  | $ | 1,923 |  |  | $ | 4,695 |
Nine Months Ended September 30, 2016: |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures |  | $ | 7,964 |  |  | $ | 3,995 |  |  | $ | 11,959 |
|  | Vacuum & Analysis Division |  |  | Light & Motion Division |  |  | Total |
Three Months Ended September 30, 2015: |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures |  | $ | 3,497 |  |  | $ | — |  |  | $ | 3,497 |
Nine Months Ended September 30, 2015: |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures |  | $ | 8,831 |  |  | $ | — |  |  | $ | 8,831 |
The following is depreciation and amortization by reportable segment for the three and nine months ended September 30, 2016 and 2015:
|  | Vacuum & Analysis Division |  |  | Light & Motion Division |  |  | Total |
Three Months Ended September 30, 2016: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  | $ | 5,142 |  |  | $ | 16,907 |  |  | $ | 22,049 |
Nine Months Ended September 30, 2016: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  | $ | 15,628 |  |  | $ | 28,129 |  |  | $ | 43,757 |
|  | Vacuum & Analysis Division |  |  | Light & Motion Division |  |  | Total |
Three Months Ended September 30, 2015: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  | $ | 5,524 |  |  | $ | — |  |  | $ | 5,524 |
Nine Months Ended September 30, 2015: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  | $ | 16,606 |  |  | $ | — |  |  | $ | 16,606 |
Total income tax expense is not presented by reportable segment because the necessary information is not available or used by the CODM. The following is segment assets by reportable segment:
September 30, 2016 |  | Vacuum & Analysis Division |  |  | Light & Motion Division |  |  | Corporate & Eliminations |  |  | Total |
Segment assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable |  | $ | 136,654 |  |  | $ | 128,401 |  |  | $ | (21,202 | ) |  | $ | 243,853 |
Inventory |  |  | 161,219 |  |  |  | 117,746 |  |  |  | — |  |  |  | 278,965 |
Total segment assets |  | $ | 297,873 |  |  | $ | 246,147 |  |  | $ | (21,202 | ) |  | $ | 522,818 |
December 31, 2015 |  | Vacuum & Analysis Division |  |  | Light & Motion Division |  |  | Corporate & Eliminations |  |  | Total |
Segment assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable |  | $ | 101,883 |  |  | $ | — |  |  | $ | — |  |  | $ | 101,883 |
Inventory |  |  | 152,631 |  |  |  | — |  |  |  | — |  |  |  | 152,631 |
Total segment assets |  | $ | 254,514 |  |  | $ | — |  |  | $ | — |  |  | $ | 254,514 |
A reconciliation of segment assets to consolidated total assets is as follows:
|  | September 30, 2016 |  |  | December 31, 2015 |
Total segment assets |  | $ | 522,818 |  |  | $ | 254,514 |
Cash and cash equivalents and investments |  |  | 435,234 |  |  |  | 658,237 |
Other current assets, including restricted cash |  |  | 59,547 |  |  |  | 26,760 |
Property, plant and equipment, net |  |  | 179,694 |  |  |  | 68,856 |
Goodwill and intangible assets, net |  |  | 1,014,446 |  |  |  | 243,730 |
Other assets |  |  | 29,926 |  |  |  | 21,250 |
Consolidated total assets |  | $ | 2,241,665 |  |  | $ | 1,273,347 |
Goodwill associated with the Company’s reportable segments is as follows:
|  | September 30, 2016 |  |  | December 31, 2015 |
Reportable segment: |  |  |  |  |  |  |  |
Vacuum & Analysis Division |  | $ | 200,368 |  |  | $ | 199,703 |
Light & Motion Division |  |  | 394,267 |  |  |  | — |
Total goodwill |  | $ | 594,635 |  |  | $ | 199,703 |
Worldwide Product Information The Company groups its products into six groups of similar products based upon the similarity of product function. Worldwide net revenue for each group of products is as follows:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |
Instruments, Control & Vacuum Products |  | $ | 114,491 |  |  | $ | 98,614 |  |  | $ | 317,141 |  |  | $ | 319,491 |
Power & Reactive Gas Products |  |  | 98,827 |  |  |  | 95,311 |  |  |  | 259,797 |  |  |  | 276,787 |
Analytical Solutions Products |  |  | 15,907 |  |  |  | 15,407 |  |  |  | 43,334 |  |  |  | 44,859 |
Photonics Products |  |  | 62,226 |  |  |  | — |  |  |  | 108,090 |  |  |  | — |
Optics Products |  |  | 44,331 |  |  |  | — |  |  |  | 79,594 |  |  |  | — |
Lasers Products |  |  | 44,878 |  |  |  | — |  |  |  | 82,246 |  |  |  | — |
|  | $ | 380,660 |  |  | $ | 209,332 |  |  | $ | 890,202 |  |  | $ | 641,137 |
Sales of Instruments, Control & Vacuum Products, Power & Reactive Gas Products and Analytical Solutions Products are included in the Company’s Vacuum & Analysis Division segment. Sales of Photonics Products, Optics Products and Lasers Products are included in the Light & Motion Division segment. Geographic Information about the Company’s operations in different geographic regions is presented in the tables below. Net revenues to unaffiliated customers are based on the location in which the sale originated. Transfers between geographic areas are at negotiated transfer prices and have been eliminated from consolidated net revenues.
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |
Net revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America |  | $ | 198,305 |  |  | $ | 122,348 |  |  | $ | 460,994 |  |  | $ | 365,942 |
Korea |  |  | 32,642 |  |  |  | 27,760 |  |  |  | 79,240 |  |  |  | 87,181 |
Japan |  |  | 26,970 |  |  |  | 14,699 |  |  |  | 68,738 |  |  |  | 49,001 |
Asia (excluding Korea and Japan) |  |  | 75,179 |  |  |  | 24,833 |  |  |  | 173,526 |  |  |  | 79,259 |
Europe |  |  | 47,564 |  |  |  | 19,692 |  |  |  | 107,704 |  |  |  | 59,754 |
|  | $ | 380,660 |  |  | $ | 209,332 |  |  | $ | 890,202 |  |  | $ | 641,137 |
|  | September 30, 2016 |  |  | December 31, 2015 |
Long-lived assets:(1) |  |  |  |  |  |  |  |
North America |  | $ | 120,379 |  |  | $ | 56,594 |
Europe |  |  | 30,818 |  |  |  | 5,783 |
Asia |  |  | 50,551 |  |  |  | 8,952 |
|  | $ | 201,748 |  |  | $ | 71,329 |
(1) | Long-lived assets include property, plant and equipment, net and certain other long-term assets, excluding long-term tax-related accounts.
Major Customers The Company had two customers with net revenues greater than 10% of total net revenues in the periods shown as follows:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |
Applied Materials, Inc. |  |  | 12 | % |  |  | 18 | % |  |  | 14 | % |  |  | 18 | %
LAM Research Corporation |  |  | 9 | % |  |  | 16 | % |  |  | 11 | % |  |  | 14 | %

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599 + Details
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