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Business Segment, Geographic Area, and Significant Customer Information
 3 Months Ended
Mar. 31, 2023
Segment Reporting [Abstract]  
Business Segment, Geographic Area, and Significant Customer Information
(16)
Business Segment, Geographic Area, and Significant Customer Information

The Company has three reportable segments: VSD, PSD and MSD. During the third quarter of 2022, MKS consolidated ESD into PSD and prior periods were recast to reflect this change. 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 and allocate resources to the three segments.

Reportable Segments

VSD delivers foundational technology solutions to leading edge semiconductor manufacturing, advanced electronics and specialty industrial applications. VSD products are derived from our 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.

PSD provides a full range of solutions including lasers, beam measurement and profiling, precision motion control, vibration isolation systems, photonics instruments, temperature sensing, opto-mechanical components, optical elements, laser-based systems for flexible PCB processing, laser-based systems for high density interconnect PCB and package substrate manufacturing, and high-speed multilayer ceramic capacitor testing.

MSD develops leading process and manufacturing technologies for advanced surface modification, electroless and electrolytic plating, and surface finishing. Atotech is a brand within MSD. Applying a comprehensive systems-and-solutions approach, MSD’s portfolio includes chemistry, equipment, software, and services for innovative and high-technology applications in a wide variety of end markets.

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 similar products within its three reportable segments.

The following table sets forth net revenues by reportable segment:

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Vacuum Solutions Division

 

$

293

 

 

$

474

 

Photonics Solutions Division

 

 

197

 

 

 

268

 

Materials Solutions Division

 

 

304

 

 

 

—

 

 

$

794

 

 

$

742

 

The following table reconciles gross profit by reportable segment to net (loss) income:

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Gross profit by reportable segment:

 

 

 

 

 

 

Vacuum Solutions Division

 

$

108

 

 

$

206

 

Photonics Solutions Division

 

 

81

 

 

 

128

 

Materials Solutions Division

 

 

147

 

 

 

—

 

Total gross profit by reportable segment

 

 

335

 

 

 

334

 

Operating expenses:

 

 

 

 

 

 

Research and development

 

 

72

 

 

 

52

 

Selling, general and administrative

 

 

174

 

 

 

92

 

Acquisition and integration costs

 

 

6

 

 

 

8

 

Restructuring and other

 

 

1

 

 

 

2

 

Amortization of intangible assets

 

 

81

 

 

 

15

 

Gain on sale of long-lived assets

 

 

—

 

 

 

(7

)

Income from operations

 

 

1

 

 

 

172

 

Interest income

 

 

(3

)

 

 

—

 

Interest expense

 

 

85

 

 

 

6

 

Other income, net

 

 

(2

)

 

 

(5

)

(Loss) income before income taxes

 

 

(79

)

 

 

171

 

(Benefit) provision for income taxes

 

 

(37

)

 

 

28

 

Net (loss) income

 

$

(42

)

 

$

143

 

Interest income, interest expense and income tax (benefit) expense are not presented by reportable segment because the necessary information is not classified within the segments nor used by the CODM.

The following table sets forth segment assets by reportable segment:

March 31, 2023

 

Accounts
 receivable, net

 

 

Inventories

 

 

Total

 

Vacuum Solutions Division

 

$

229

 

 

$

548

 

 

$

777

 

Photonics Solutions Division

 

 

194

 

 

 

322

 

 

 

516

 

Materials Solutions Division

 

 

275

 

 

 

187

 

 

 

463

 

Corporate, Eliminations & Other

 

 

(126

)

 

 

—

 

 

 

(126

)

Total segment assets

 

$

572

 

 

$

1,058

 

 

$

1,630

 

 

December 31, 2022

 

Accounts
 receivable, net

 

 

Inventories

 

 

Total

 

Vacuum Solutions Division

 

$

307

 

 

$

491

 

 

$

798

 

Photonics Solutions Division

 

 

210

 

 

 

296

 

 

 

506

 

Materials Solutions Division

 

 

298

 

 

 

190

 

 

 

488

 

Corporate, Eliminations & Other

 

 

(95

)

 

 

—

 

 

 

(95

)

Total segment assets

 

$

720

 

 

$

977

 

 

$

1,697

 

 

The following table reconciles segment assets to total assets:

 

 

March 31, 2023

 

 

December 31, 2022

 

Total segment assets

 

$

1,630

 

 

$

1,697

 

Cash and cash equivalents and short-term investments

 

 

881

 

 

 

910

 

Other current assets

 

 

237

 

 

 

187

 

Property, plant and equipment, net

 

 

794

 

 

 

800

 

Right-of-use assets, net

 

 

240

 

 

 

234

 

Goodwill and intangible assets, net

 

 

7,435

 

 

 

7,481

 

Other assets

 

 

149

 

 

 

186

 

Total assets

 

$

11,366

 

 

$

11,495

 

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,

 

Net revenues:

 

2023

 

 

2022

 

United States

 

$

254

 

 

$

342

 

China

 

 

147

 

 

 

67

 

South Korea

 

 

74

 

 

 

83

 

Germany

 

 

73

 

 

 

38

 

Other

 

 

246

 

 

 

212

 

 

$

794

 

 

$

742

 

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

Long-lived assets:

 

March 31, 2023

 

 

December 31, 2022

 

United States

 

$

476

 

 

$

508

 

Germany

 

 

158

 

 

 

160

 

China

 

 

172

 

 

 

175

 

Other

 

 

343

 

 

 

343

 

 

$

1,150

 

 

$

1,186

 

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

 

 

March 31, 2023

 

 

December 31, 2022

 

Reportable segment:

 

 

 

 

 

 

Vacuum Solutions Division

 

$

194

 

 

$

195

 

Photonics Solutions Division

 

 

1,027

 

 

 

1,026

 

Materials Solutions Division

 

 

3,106

 

 

 

3,087

 

Total goodwill

 

$

4,327

 

 

$

4,308