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Reportable Segments | 6 Months Ended
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Jul. 03, 2022
Segment Reporting [Abstract] |
Reportable Segments | Reportable Segments We are organized around two global businesses: Enterprise Solutions and Industrial Automation Solutions. Each of the global businesses represents a reportable segment. In conjunction with the Tripwire divestiture during the first quarter of 2022, we changed the name of our former Industrial Solutions segment to Industrial Automation Solutions. The composition of the segment did not change as a result of this name change. The key measures of segment profit or loss are Segment Revenues and Segment EBITDA. Segment Revenues represent non-affiliate revenues. Segment EBITDA excludes certain items, including depreciation expense; amortization of intangibles; asset impairment; severance, restructuring, and acquisition integration costs; purchase accounting effects related to acquisitions, such as the adjustment of acquired inventory to fair value; and other costs. We allocate corporate expenses to the segments for purposes of measuring Segment EBITDA. Corporate expenses are allocated on the basis of each segment’s relative EBITDA prior to the allocation. Our measure of segment assets does not include cash, goodwill, intangible assets, deferred tax assets, or corporate assets. All goodwill is allocated to reporting units of our segments for purposes of impairment testing. Inter-company revenues between our segments is not material.
|  | Enterprise Solutions |  | Industrial Automation Solutions |  | Total Segments
|  | (In thousands)
As of and for the three months ended July 3, 2022 |  |  |  |  |  |
Segment Revenues |  | $ | 307,444 |  |  | $ | 359,107 |  |  | $ | 666,551 |
Segment EBITDA |  | 41,887 |  |  | 68,060 |  |  | 109,947 |
Depreciation expense |  | 5,768 |  |  | 5,602 |  |  | 11,370 |
Amortization of intangibles |  | 4,442 |  |  | 4,735 |  |  | 9,177 |
Amortization of software development intangible assets |  | 22 |  |  | 959 |  |  | 981 |
Severance, restructuring, and acquisition integration costs |  | 4,575 |  |  | 1,282 |  |  | 5,857 |
Adjustments related to acquisitions and divestitures |  | (558) |  |  | 1,134 |  |  | 576 |
Segment assets |  | 607,386 |  |  | 649,595 |  |  | 1,256,981 |
As of and for the three months ended July 4, 2021 |  |  |  |  |  |
Segment Revenues |  | $ | 267,528 |  |  | $ | 309,178 |  |  | $ | 576,706 |
Segment EBITDA |  | 36,001 |  |  | 55,464 |  |  | 91,465 |
Depreciation expense |  | 5,372 |  |  | 5,286 |  |  | 10,658 |
Amortization of intangibles |  | 4,439 |  |  | 2,733 |  |  | 7,172 |
Amortization of software development intangible assets |  | 20 |  |  | 302 |  |  | 322 |
Severance, restructuring, and acquisition integration costs |  | 2,464 |  |  | 576 |  |  | 3,040 |
Adjustments related to acquisitions and divestitures |  | (32) |  |  | 1,944 |  |  | 1,912 |
Segment assets |  | 522,635 |  |  | 580,653 |  |  | 1,103,288 |
As of and for the six months ended July 3, 2022 |  |  |  |  |  |
Segment revenues |  | $ | 575,874 |  |  | $ | 701,048 |  |  | $ | 1,276,922 |
Segment EBITDA |  | 72,708 |  |  | 135,588 |  |  | 208,296 |
Depreciation expense |  | 11,194 |  |  | 11,402 |  |  | 22,596 |
Amortization of intangibles |  | 8,539 |  |  | 9,455 |  |  | 17,994 |
Amortization of software development intangible assets |  | 44 |  |  | 1,944 |  |  | 1,988 |
Severance, restructuring, and acquisition integration costs |  | 4,903 |  |  | 4,677 |  |  | 9,580 |
Adjustments related to acquisitions and divestitures |  | (558) |  |  | 1,134 |  |  | 576 |
Segment assets |  | 607,386 |  |  | 649,595 |  |  | 1,256,981 |
As of and for the six months ended July 4, 2021 |  |  |  |  |  |
Segment Revenues |  | $ | 493,883 |  |  | $ | 591,506 |  |  | $ | 1,085,389 |
Segment EBITDA |  | 64,292 |  |  | 103,075 |  |  | 167,367 |
Depreciation expense |  | 10,735 |  |  | 10,650 |  |  | 21,385 |
Amortization of intangibles |  | 8,775 |  |  | 6,390 |  |  | 15,165 |
Amortization of software development intangible assets |  | 52 |  |  | 679 |  |  | 731 |
Severance, restructuring, and acquisition integration costs |  | 4,416 |  |  | 3,795 |  |  | 8,211 |
Adjustments related to acquisitions and divestitures |  | (6,339) |  |  | 1,877 |  |  | (4,462) |
Asset impairments |  | — |  |  | 6,995 |  |  | 6,995 |
Segment assets |  | 522,635 |  |  | 580,653 |  |  | 1,103,288 |
The following table is a reconciliation of the total of the reportable segments’ Revenues and EBITDA to consolidated revenues and consolidated income from continuing operations before taxes, respectively.
| Three Months Ended |  | Six Months Ended
| July 3, 2022 |  | July 4, 2021 |  | July 3, 2022 |  | July 4, 2021
| (In thousands)
Total segment revenues | $ | 666,551 |  |  | $ | 576,706 |  |  | $ | 1,276,922 |  |  | $ | 1,085,389 |
Adjustments related to acquisitions | — |  |  | (849) |  |  | — |  |  | (849) |
Consolidated revenues | $ | 666,551 |  |  | $ | 575,857 |  |  | $ | 1,276,922 |  |  | $ | 1,084,540 |
Total Segment EBITDA | $ | 109,947 |  |  | $ | 91,465 |  |  | $ | 208,296 |  |  | $ | 167,367 |
Depreciation expense | (11,370) |  |  | (10,658) |  |  | (22,596) |  |  | (21,385) |
Amortization of intangibles | (9,177) |  |  | (7,172) |  |  | (17,994) |  |  | (15,165) |
Amortization of software development intangible assets | (981) |  |  | (322) |  |  | (1,988) |  |  | (731) |
Severance, restructuring, and acquisition integration costs (1) | (5,857) |  |  | (3,040) |  |  | (9,580) |  |  | (8,211) |
Adjustments related to acquisitions and divestitures (2) | (576) |  |  | (1,912) |  |  | (576) |  |  | 4,462 |
Asset impairments (3) | — |  |  | — |  |  | — |  |  | (6,995) |
Eliminations | (50) |  |  | (12) |  |  | (105) |  |  | (45) |
Consolidated operating income | 81,936 |  |  | 68,349 |  |  | 155,457 |  |  | 119,297 |
Interest expense, net | (11,276) |  |  | (14,870) |  |  | (25,687) |  |  | (30,381) |
Loss on debt extinguishment | — |  |  | — |  |  | (6,392) |  |  | — |
Total non-operating pension benefit | 1,070 |  |  | 1,445 |  |  | 2,270 |  |  | 2,129 |
Consolidated income from continuing operations before taxes | $ | 71,730 |  |  | $ | 54,924 |  |  | $ | 125,648 |  |  | $ | 91,045 |
(1) Severance, restructuring, and acquisition integration costs for the three and six months ended July 3, 2022 primarily related to our Manufacturing Footprint and Acquisition Integration programs. Costs for the three and six months ended July 4, 2021 primarily related to our Acquisition Integration and completed Cost Reduction programs. See Note 12. (2) During the three and six months ended July 3, 2022, we recognized cost of sales of $1.1 million related to purchase accounting adjustments of acquired inventory to fair value and collected $0.5 million of previously written off receivables associated with the sale of Grass Valley. During the three months ended July 4, 2021, we recognized cost of sales of $1.2 million related to purchase accounting adjustments of acquired inventory to fair value, recognized $0.8 million for the purchase accounting effect of recording deferred revenue at fair value, and collected $0.1 million of previously written off receivables associated with the sale of Grass Valley. During the six months ended July 4, 2021, we reduced the Opterna earn-out liability by $5.8 million, recognized cost of sales of $2.0 million related to purchase accounting adjustments of acquired inventory to fair value, collected $1.4 million of previously written off receivables associated with the sale of Grass Valley, and recognized $0.8 million for the purchase accounting effect of recording deferred revenue at fair value. (3) During the six months ended July 4, 2021, we recognized a $3.6 million impairment on assets held and used and a $3.4 million impairment on assets held for sale. See Note 11.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI https://asc.fasb.org/topic&trid=2134510 + Details
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