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Business Segment, Geographic Area, Product and Significant Customer Information | 6 Months Ended
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Jun. 30, 2019
Segment Reporting [Abstract] |
Business Segment, Geographic Area, Product and Significant Customer Information |
17) | Business Segment, Geographic Area, Product and Significant Customer Information
The Company is a global provider of instruments, subsystems and process control solutions that measure, monitor, deliver, analyze, power and control critical parameters of advanced manufacturing processes to improve process performance and productivity for its customers. The Company’s products are derived from its core competencies in pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, residual gas analysis, leak detection, control technology, ozone generation and delivery, power, reactive gas generation, vacuum technology, lasers, photonics, sub-micron positioning, vibration control, optics and laser-based manufacturing solutions. The Company also provides services relating to the maintenance and repair of its products, installation services and training. The Company’s primary served markets include semiconductor, industrial technologies, life and health sciences, and research and defense. 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. Effective February 1, 2019, in conjunction with its acquisition of ESI, the Company created a third reportable segment known as the Equipment & Solutions segment in addition to its two then-existing reportable segments: the Vacuum & Analysis segment and the Light & Motion segment. The Vacuum & Analysis segment provides a broad range of instruments, components and subsystems 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 technology, ozone generation and delivery, RF & DC power, reactive gas generation and vacuum technology. The Light & Motion segment 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 control, and optics. The Equipment & Solutions segment provides laser-based manufacturing solutions for the micro-machining industry that enable customers to optimize production. The segment’s market is composed primarily of flexible and rigid PCB processing/fabrication, semiconductor wafer processing and passive component manufacturing & test. Equipment & Solutions incorporate specialized laser technology and proprietary control software to efficiently process the materials and components that are an integral part of electronic devices and systems. 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 table sets forth net revenues by reportable segment:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Vacuum & Analysis |  | $ | 235,655 |  |  | $ | 368,328 |  |  | $ | 470,010 |  |  | $ | 716,672 |
Light & Motion |  |  | 182,579 |  |  |  | 204,812 |  |  |  | 376,567 |  |  |  | 410,743 |
Equipment & Solutions |  |  | 55,876 |  |  |  | — |  |  |  | 91,094 |  |  |  | — |
|  | $ | 474,110 |  |  | $ | 573,140 |  |  | $ | 937,671 |  |  | $ | 1,127,415 |
The following table sets forth a reconciliation of segment gross profit to consolidated net income:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Gross profit by reportable segment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Vacuum & Analysis |  | $ | 102,095 |  |  | $ | 171,082 |  |  | $ | 200,234 |  |  | $ | 329,582 |
Light & Motion |  |  | 84,948 |  |  |  | 103,795 |  |  |  | 177,689 |  |  |  | 208,150 |
Equipment & Solutions |  |  | 23,984 |  |  |  | — |  |  |  | 31,222 |  |  |  |  |
Total gross profit by reportable segment |  |  | 211,027 |  |  |  | 274,877 |  |  |  | 409,145 |  |  |  | 537,732 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Research and development |  |  | 41,855 |  |  |  | 36,504 |  |  |  | 80,788 |  |  |  | 71,361 |
Selling, general and administrative |  |  | 83,236 |  |  |  | 76,181 |  |  |  | 165,691 |  |  |  | 159,130 |
Fees and expenses related to term loan |  |  | — |  |  |  | 378 |  |  |  | 5,847 |  |  |  | 378 |
Acquisition and integration costs |  |  | 3,240 |  |  |  | (1,168 | ) |  |  | 33,407 |  |  |  | (1,168 | )
Restructuring and other |  |  | 1,242 |  |  |  | 790 |  |  |  | 3,165 |  |  |  | 3,010 |
Amortization of intangible assets |  |  | 17,552 |  |  |  | 10,901 |  |  |  | 33,279 |  |  |  | 22,091 |
Income from operations |  |  | 63,902 |  |  |  | 151,291 |  |  |  | 86,968 |  |  |  | 282,930 |
Interest and other expense, net |  |  | 12,039 |  |  |  | 2,747 |  |  |  | 19,769 |  |  |  | 7,644 |
Income before income taxes |  |  | 51,863 |  |  |  | 148,544 |  |  |  | 67,199 |  |  |  | 275,286 |
Provision for income taxes |  |  | 14,124 |  |  |  | 25,682 |  |  |  | 17,005 |  |  |  | 47,303 |
Net income |  | $ | 37,739 |  |  | $ | 122,862 |  |  | $ | 50,194 |  |  | $ | 227,983 |
The following table sets forth capital expenditures by reportable segment for the three and six months ended June 30, 2019 and 2018:
|  | Vacuum & Analysis |  |  | Light & Motion |  |  | Equipment & Solutions |  |  | Total |
Three Months Ended June 30, 2019: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures |  | $ | 6,700 |  |  | $ | 4,938 |  |  | $ | 2,087 |  |  | $ | 13,725 |
Six Months Ended June 30, 2019: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures |  | $ | 14,188 |  |  | $ | 10,092 |  |  | $ | 3,974 |  |  | $ | 28,254 |
Three Months Ended June 30, 2018: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures |  | $ | 6,972 |  |  | $ | 5,456 |  |  | $ | — |  |  | $ | 12,428 |
Six Months Ended June 30, 2018: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures |  | $ | 13,169 |  |  | $ | 8,649 |  |  | $ | — |  |  | $ | 21,818 |
The following table sets forth depreciation and amortization by reportable segment for the three and six months ended June 30, 2019 and 2018:
|  | Vacuum & Analysis |  |  | Light & Motion |  |  | Equipment & Solutions |  |  | Total |
Three Months Ended June 30, 2019: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  | $ | 3,941 |  |  | $ | 13,292 |  |  | $ | 10,211 |  |  | $ | 27,444 |
Six Months Ended June 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  | $ | 7,986 |  |  | $ | 27,432 |  |  | $ | 17,237 |  |  | $ | 52,655 |
Three Months Ended June 30, 2018: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  | $ | 4,968 |  |  | $ | 14,917 |  |  | $ | — |  |  | $ | 19,885 |
Six Months Ended June 30, 2018: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  | $ | 10,097 |  |  | $ | 30,280 |  |  | $ | — |  |  | $ | 40,377 |
Total income tax expense is not presented by reportable segment because the necessary information is not available or used by the CODM. The following table sets forth segment assets by reportable segment:
June 30, 2019: |  | Vacuum & Analysis |  |  | Light & Motion |  |  | Equipment & Solutions |  |  | Corporate, Eliminations & Other |  |  | Total |
Segment assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade accounts receivable |  | $ | 141,551 |  |  | $ | 155,452 |  |  | $ | 46,322 |  |  | $ | (29,795 | ) |  | $ | 313,530 |
Inventories |  |  | 232,595 |  |  |  | 174,124 |  |  |  | 72,918 |  |  |  | (140 | ) |  |  | 479,497 |
Total segment assets |  | $ | 374,146 |  |  | $ | 329,576 |  |  | $ | 119,240 |  |  | $ | (29,935 | ) |  | $ | 793,027 |
December 31, 2018: |  | Vacuum & Analysis |  |  | Light & Motion |  |  | Equipment & Solutions |  |  | Corporate, Eliminations & Other |  |  | Total |
Segment assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade accounts receivable |  | $ | 171,604 |  |  | $ | 140,658 |  |  | $ | — |  |  | $ | (16,808 | ) |  | $ | 295,454 |
Inventories |  |  | 222,965 |  |  |  | 161,658 |  |  |  | — |  |  |  | 66 |  |  |  | 384,689 |
Total segment assets |  | $ | 394,569 |  |  | $ | 302,316 |  |  | $ | — |  |  | $ | (16,742 | ) |  | $ | 680,143 |
The following is a reconciliation of segment assets to consolidated total assets:
|  | June 30, 2019 |  |  | December 31, 2018 |
Total segment assets |  | $ | 793,027 |  |  | $ | 680,143 |
Cash and cash equivalents and investments |  |  | 470,321 |  |  |  | 728,461 |
Other current assets |  |  | 80,303 |  |  |  | 65,790 |
Assets classified as held for sale |  |  | 36,750 |  |  |  | — |
Property, plant and equipment, net |  |  | 230,649 |  |  |  | 194,367 |
Right-of-use asset |  |  | 68,631 |  |  |  | — |
Goodwill and intangible assets, net |  |  | 1,658,039 |  |  |  | 906,803 |
Other assets |  |  | 44,228 |  |  |  | 38,682 |
Consolidated total assets |  | $ | 3,381,948 |  |  | $ | 2,614,246 |
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 tax transfer prices and have been eliminated from consolidated net revenues.
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Net revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 217,549 |  |  | $ | 281,818 |  |  | $ | 441,896 |  |  | $ | 558,538 |
China |  |  | 56,002 |  |  |  | 32,005 |  |  |  | 93,750 |  |  |  | 63,077 |
Korea |  |  | 38,896 |  |  |  | 66,983 |  |  |  | 74,698 |  |  |  | 120,994 |
Japan |  |  | 30,995 |  |  |  | 54,087 |  |  |  | 73,097 |  |  |  | 112,361 |
Other Asia |  |  | 72,426 |  |  |  | 75,188 |  |  |  | 136,005 |  |  |  | 145,500 |
Europe |  |  | 58,242 |  |  |  | 63,059 |  |  |  | 118,225 |  |  |  | 126,945 |
|  | $ | 474,110 |  |  | $ | 573,140 |  |  | $ | 937,671 |  |  | $ | 1,127,415 |
|  | June 30, 2019 |  |  | December 31, 2018 |
Long-lived assets: (1) |  |  |  |  |  |  |  |
United States |  | $ | 171,324 |  |  | $ | 146,687 |
Europe |  |  | 30,514 |  |  |  | 26,794 |
Asia |  |  | 60,072 |  |  |  | 50,572 |
|  | $ | 261,910 |  |  | $ | 224,053 |
(1) | Long-lived assets include property, plant and equipment, net and certain other long-term assets, excluding long-term tax related accounts.
Goodwill associated with each of the Company’s reportable segments is as follows:
|  | June 30, 2019 |  |  | December 31, 2018 |
Reportable segment: |  |  |  |  |  |  |  |
Vacuum & Analysis |  | $ | 196,777 |  |  | $ | 197,126 |
Light & Motion |  |  | 389,539 |  |  |  | 389,870 |
Equipment & Solutions |  |  | 472,351 |  |  |  | — |
Total goodwill |  | $ | 1,058,667 |  |  | $ | 586,996 |
Worldwide Product Information The Company groups its product offerings into three groups based upon the similarity of product function as follows:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Advanced Manufacturing Components |  | $ | 359,123 |  |  | $ | 509,999 |  |  | $ | 730,468 |  |  | $ | 1,006,676 |
Global Service |  |  | 72,784 |  |  |  | 63,141 |  |  |  | 138,982 |  |  |  | 120,739 |
Advanced Manufacturing Systems |  |  | 42,203 |  |  |  | — |  |  |  | 68,221 |  |  |  | — |
|  | $ | 474,110 |  |  | $ | 573,140 |  |  | $ | 937,671 |  |  | $ | 1,127,415 |
Advanced manufacturing components are comprised of product revenues from the Company’s Vacuum & Analysis and Light & Motion segments. Global service is comprised of total service revenues for all three of the Company’s reportable segments. Advanced manufacturing systems is comprised of product revenues for the Company’s Equipment & Solutions segment.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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