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Business Segment, Geographic Area, and Significant Customer Information
 3 Months Ended
Mar. 31, 2021
Segment Reporting [Abstract]  
Business Segment, Geographic Area, and Significant Customer Information

16)

Business Segment, Geographic Area, and Significant Customer Information

The Company is a global provider of instruments, systems, 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, electronic control technology, reactive gas generation and delivery, power generation and delivery, vacuum technology, lasers, photonics, optics, precision motion control, vibration control and laser-based manufacturing systems 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”), which is the Company’s Chief Executive Officer, 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.

Reportable Segments

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, electronic control technology, reactive gas generation and delivery, power generation and delivery 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, optics, precision motion control and vibration control.

The Equipment & Solutions segment provides a range of products including laser-based systems for PCB manufacturing, which includes flexible interconnect PCB processing systems and high density interconnect solutions for rigid PCB manufacturing and substrate processing and multi-layer ceramic capacitor test 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 groups its similar products within its three reportable segments.

The following table sets forth net revenues by reportable segment:

 

 

 

Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

Vacuum & Analysis

 

$

435.8

 

 

$

319.3

 

Light & Motion

 

 

182.0

 

 

 

165.4

 

Equipment & Solutions

 

 

76.1

 

 

 

51.0

 

 

 

$

693.9

 

 

$

535.7

 

 

 

The following table sets forth a reconciliation of segment gross profit to consolidated net income:

 

 

 

Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

Gross profit by reportable segment:

 

 

 

 

 

 

 

 

Vacuum & Analysis

 

$

205.0

 

 

$

140.8

 

Light & Motion

 

 

82.1

 

 

 

75.6

 

Equipment & Solutions

 

 

35.0

 

 

 

23.2

 

Total gross profit by reportable segment

 

 

322.1

 

 

 

239.6

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

 

47.2

 

 

 

42.4

 

Selling, general and administrative

 

 

95.9

 

 

 

87.2

 

Acquisition and integration costs

 

 

6.2

 

 

 

2.2

 

Restructuring and other

 

 

4.9

 

 

 

0.4

 

Amortization of intangible assets

 

 

12.4

 

 

 

16.3

 

Asset impairment

 

 

—

 

 

 

1.2

 

Income from operations

 

 

155.5

 

 

 

89.9

 

Interest income

 

 

0.2

 

 

 

0.7

 

Interest expense

 

 

6.4

 

 

 

8.9

 

Other expense, net

 

 

1.1

 

 

 

0.4

 

Income before income taxes

 

 

148.2

 

 

 

81.3

 

Provision for income taxes

 

 

25.9

 

 

 

12.2

 

Net income

 

$

122.3

 

 

$

69.1

 

 

The following table sets forth capital expenditures by reportable segment for the three months ended March 31, 2021 and 2020:

 

Capital expenditures:

 

Vacuum &

Analysis

 

 

Light &

Motion

 

 

Equipment &

Solutions

 

 

Total

 

Three Months Ended March 31, 2021

 

$

8.6

 

 

$

11.6

 

 

$

6.3

 

 

$

26.5

 

Three Months Ended March 31, 2020

 

$

4.1

 

 

$

4.0

 

 

$

1.9

 

 

$

10.0

 

 

The following table sets forth depreciation and amortization by reportable segment for the three months ended March 31, 2021 and 2020:

 

Depreciation and amortization:

 

Vacuum &

Analysis

 

 

Light &

Motion

 

 

Equipment &

Solutions

 

 

Total

 

Three Months Ended March 31, 2021

 

$

5.8

 

 

$

9.0

 

 

$

9.0

 

 

$

23.8

 

Three Months Ended March 31, 2020

 

$

4.9

 

 

$

13.4

 

 

$

10.1

 

 

$

28.4

 

 

Total income tax expense is not presented by reportable segment because the necessary information is not available nor used by the CODM.

The following table sets forth segment assets by reportable segment:

 

March 31, 2021

 

Vacuum &

Analysis

 

 

Light &

Motion

 

 

Equipment &

Solutions

 

 

Corporate,

Eliminations &

Other

 

 

Total

 

Segment assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

$

247.4

 

 

$

132.9

 

 

$

61.5

 

 

$

(21.0

)

 

$

420.8

 

Inventory, net

 

 

290.5

 

 

 

157.4

 

 

 

69.9

 

 

 

(2.6

)

 

 

515.2

 

Total segment assets

 

$

537.9

 

 

$

290.3

 

 

$

131.4

 

 

$

(23.6

)

 

$

936.0

 

 

December 21, 2020

 

Vacuum &

Analysis

 

 

Light &

Motion

 

 

Equipment &

Solutions

 

 

Corporate,

Eliminations &

Other

 

 

Total

 

Segment assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

$

229.1

 

 

$

122.6

 

 

$

51.7

 

 

$

(10.7

)

 

$

392.7

 

Inventory, net

 

 

273.3

 

 

 

166.1

 

 

 

63.7

 

 

 

(1.7

)

 

 

501.4

 

Total segment assets

 

$

502.4

 

 

$

288.7

 

 

$

115.4

 

 

$

(12.4

)

 

$

894.1

 

 

The following is a reconciliation of segment assets to consolidated total assets:

 

 

 

March 31, 2021

 

 

December 31, 2020

 

Total segment assets

 

$

936.0

 

 

$

894.1

 

Cash and cash equivalents and short-term investments

 

 

909.5

 

 

 

836.0

 

Other current assets

 

 

77.0

 

 

 

74.3

 

Property, plant and equipment, net

 

 

297.0

 

 

 

284.3

 

Right-of-use asset

 

 

182.7

 

 

 

184.4

 

Goodwill and intangible assets, net

 

 

1,560.5

 

 

 

1,578.6

 

Other assets and long-term investments

 

 

55.2

 

 

 

52.1

 

Consolidated total assets

 

$

4,017.9

 

 

$

3,903.8

 

 

Geographic Area

Information about the Company’s operations by geographic area is presented in the tables below. Net revenues from unaffiliated customers are based on the location in which the sale originated. Intercompany sales between geographic areas are at tax transfer prices and have been eliminated from consolidated net revenues.

 

 

 

Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

Net revenues:

 

 

 

 

 

 

 

 

United States

 

$

282.8

 

 

$

231.5

 

South Korea

 

 

97.9

 

 

 

76.0

 

China

 

 

81.3

 

 

 

49.7

 

Taiwan

 

 

59.4

 

 

 

25.3

 

Japan

 

 

48.0

 

 

 

40.0

 

Other Asia

 

 

70.1

 

 

 

58.9

 

Europe

 

 

54.4

 

 

 

54.3

 

 

 

$

693.9

 

 

$

535.7

 

 

Long-lived assets:(1)

 

March 31, 2021

 

 

December 31, 2020

 

United States

 

$

379.7

 

 

$

364.0

 

Europe

 

 

37.3

 

 

 

94.8

 

Asia

 

 

101.3

 

 

 

45.1

 

 

 

$

518.3

 

 

$

503.9

 

 

 

(1)

Long-lived assets include property, plant and equipment, net, right-of-use assets, and certain other assets, and exclude goodwill, intangible assets and long-term tax-related accounts.

Goodwill associated with each of the Company’s reportable segments is as follows:

 

 

 

March 31, 2021

 

 

December 31, 2020

 

Reportable segment:

 

 

 

 

 

 

 

 

Vacuum & Analysis

 

$

195.7

 

 

$

196.2

 

Light & Motion

 

 

391.9

 

 

 

395.3

 

Equipment & Solutions

 

 

474.5

 

 

 

474.9

 

Total goodwill

 

$

1,062.1

 

 

$

1,066.4

 

 

Major Customers

The following customers represented greater than 10% of the Company’s net revenues as follows:

 

 

 

Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

Lam Research Corporation

 

 

13

%

 

 

10

%

Applied Materials, Inc.

 

 

11

%

 

 

11

%