Segment Information

12 Months Ended

Dec. 31, 2018

17. SEGMENT INFORMATION

The Company has organized its operating business segments according to its key product lines. The BBU segment designs, develops, manufactures, and markets the Company’s modular

DC-DC

converters and configurable products, and also includes the entities comprising Vicor Custom Power and the BBU operations of VJCL. The VI Chip segment includes VI Chip Corporation, which designs, develops, manufactures, and markets many of the Company’s advanced power component products. The VI Chip segment also includes the VI Chip business conducted through VJCL. The Picor segment, which consists of the operations of the Company’s former subsidiary Picor Corporation (see Note 16 above) designs, develops, manufactures, and markets integrated circuits for use in a variety of power management and power system applications. The Picor segment develops integrated circuits for use in the Company’s BBU and VI Chip modules, to be sold as complements to the Company’s BBU and VI Chip products, or for sale to third parties for separate (i.e., stand-alone) applications.

The Company’s Chief Executive Officer (i.e., identified as the “chief operating decision maker,”) (“CODM”), pursuant to U.S. GAAP, evaluates performance and allocates resources based on segment revenues and segment operating income (loss). The operating income (loss) for each segment includes selling, general, and administrative and research and development expenses directly attributable to the segment. Certain of the Company’s indirect overhead costs, which include corporate selling, general, and administrative expenses, are allocated among the segments based upon an estimate of costs associated with each segment. Assets allocated to each segment are based upon specific identification of such assets, which include accounts receivable, inventories, fixed assets, and certain other assets. The Corporate segment consists of those operations and assets shared by all operating segments. The costs of certain centralized executive and administrative functions are recorded in this segment, as are certain shared assets, most notably cash and cash equivalents, deferred tax assets, long-term investments, the Company’s facilities in Massachusetts, real estate, and other assets. The Company’s accounting policies and method of presentation for segments are consistent with that used throughout the Consolidated Financial Statements.

The following table provides significant segment financial data as of and for the years ended December 31 (in thousands):

	BBU		VI Chip			Picor			Corporate			Eliminations			Total
												(1)
2018:
Net revenues	$	186,715	$	84,728		$	34,552		$	—		$	(14,775	)	$	291,220
Income (loss) from operations		22,544		3,612			7,517			(1,614	)		—			32,059
Total assets		279,671		56,619			14,869			85,851			(215,942	)		221,068
Depreciation and amortization		3,621		3,504			792			1,337			—			9,254
Capital expenditures		2,954		13,386			621			1,250			—			18,211
2017:
Net revenues	$	151,789	$	61,330		$	26,297		$	—		$	(11,586	)	$	227,830
Income (loss) from operations		5,615		(11,495	)		5,400			(880	)		—			(1,360	)
Total assets		232,255		34,809			13,509			59,550			(174,399	)		165,724
Depreciation and amortization		3,907		2,782			747			1,457			—			8,893
Capital expenditures		3,188		7,505			1,249			603			—			12,545
2016:
Net revenues	$	151,428	$	39,947		$	16,684		$	—		$	(7,779	)	$	200,280
Income (loss) from operations		11,750		(16,494	)		(637	)		(933	)		—			(6,314	)
Total assets		196,987		21,389			8,583			73,253			(146,145	)		154,067
Depreciation and amortization		4,258		2,235			545			1,400			—			8,438
Capital expenditures		2,325		4,041			1,178			884			—			8,428

(1)

The elimination for net revenues is principally related to inter-segment revenues of Picor to BBU and VI Chip and for inter-segment revenues of VI Chip to BBU. The elimination for total assets is principally related to inter-segment accounts receivable due to BBU for the funding of VI Chip and Picor operations.

Substantially all long-lived assets are located in the United States.

During 2018, 2017, and 2016, one customer accounted for approximately 13.4%, 13.0%, and 16.4% of net

revenues, respectively, which were included in all three business segments in each of the three years.

Net revenues from unaffiliated customers by country, based on the location of the customer, for the years ended December 31 were as follows (in thousands):

	2018		2017		2016
United States	$	110,779	$	83,871	$	80,603
Europe		27,689		24,078		22,495
Asia Pacific		147,078		114,365		91,848
All other		5,674		5,516		5,334
	$	291,220	$	227,830	$	200,280

Net revenues from customers in China (including Hong Kong), our largest international market, accounted for approximately 37.4% of total net revenues in 2018, 35.8% in 2017 and 32.1% in 2016, respectively.