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Segment Reporting | 3 Months Ended
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Mar. 29, 2025
Segment Reporting [Abstract] |
SEGMENT REPORTING | 12. SEGMENT REPORTING The Company has two reportable segments: Hydraulics and Electronics. These segments are organized primarily based on the similar nature of products offered for sale, the types of customers served and the methods of distribution and are consistent with how the segments are managed, how resources are allocated and how information is used by the Chief Operating Decision Maker ("CODM"). Our Chief Executive Officer ("CEO") serves as our CODM and is responsible for reviewing segment performance and making decisions regarding resource allocation. Our CODM evaluates each segment’s performance based on metrics such as net sales, segment gross profit and operating income, and other key financial indicators presented in the tables below in this section, as well as guides strategic decisions to align with company-wide goals. On a monthly basis, the CODM considers budget-to-actual variances for key measures when making decisions about allocating capital to the segments. The Hydraulics segment designs and manufactures hydraulic components and systems used to transmit power and control force, speed and motion. There are two categories based on Hydraulic system architecture: MCT and FCT. MCT includes components used to control the flow and pressure of fluids in a system including valves, pumps, actuators, sensors, and filters. FCT includes components used to convey fluids and fluid power through a system and are designed to grant maximum flexibility of design and reliability. MCT includes manifold and cartridge valve technology and FCT includes quick release coupling solutions. CVT products provide functions important to a hydraulic system: to control rates and direction of fluid flow and to regulate and control pressures. QRC products allow users to connect and disconnect quickly from any hydraulic circuit without leakage and ensures high-performance under high temperature and pressure using one or multiple couplers. Engineered solutions that incorporate CVT and QRC technologies are also provided to machine users, manufacturers or designers to fulfill complete system design requirements including electro-hydraulic, remote control, electronic control and programmable logic controller systems. The Electronics segment provides complete, fully-tailored display and control solutions for engines, engine-driven equipment, specialty vehicles, therapy baths and traditional and swim spas. This broad range of products is complemented by extensive application expertise and unparalleled depth of software, embedded programming, hardware and sustaining engineering teams. Product categories include traditional mechanical and electronic gauge instrumentation, plug and go CAN-based instruments, robust environmentally sealed controllers, pumps and jets, hydraulic controllers, engineered panels, process monitoring instrumentation, proprietary hardware and software, printed circuit board assemblies and wiring harnesses. Support services include design and manufacturing and after-market support through global distribution. The Company evaluates performance and allocates resources based primarily on segment operating income. Certain costs were not allocated to the business segments as they are not used in evaluating the results of, or in allocating resources to the Company’s segments. These costs are presented in the Corporate and other line item. For the three months ended March 29, 2025, the unallocated costs totaled $8.4 and included certain corporate costs not deemed to be allocable to either business segment of $0.1 and amortization of acquisition-related intangible assets of $8.3. The accounting policies of the Company’s operating segments are the same as those used to prepare the accompanying Consolidated, Unaudited Financial Statements. Net sales and operating profit of our business segments exclude intersegment sales and the related cost of sales and profit as these activities are eliminated in consolidation and thus are not included in management’s evaluation of performance of each segment. Beginning in our 2024 annual reporting, we adopted ASU 2023-07 retrospectively. The following tables set forth our segment information of revenue, significant segment expenses, and operating income from operations for the periods ended March 29, 2025 and March 30, 2024:
|  | Three Months Ended March 29, 2025 |
|  | Hydraulics |  |  | Electronics |  |  | Unallocated expenses |  |  | Total |
Net sales from external customers |  | $ | 126.4 |  |  | $ | 69.1 |  |  | $ | - |  |  | $ | 195.5 |
Reportable segment total cost of sales |  |  | 89.0 |  |  |  | 46.6 |  |  |  | - |  |  |  | 135.6 |
Reportable segment gross profit |  | $ | 37.4 |  |  | $ | 22.5 |  |  | $ | - |  |  | $ | 59.9 |
Selling, engineering and administrative expenses (a) |  | $ | 14.8 |  |  | $ | 10.1 |  |  | $ | - |  |  | $ | 24.9 |
Research and development (b) |  |  | 2.1 |  |  |  | 2.8 |  |  |  | - |  |  |  | 4.9 |
Indirect expenses (c) |  |  | 3.1 |  |  |  | 1.6 |  |  |  | 0.1 |  |  |  | 4.8 |
Amortization of intangible assets (d) |  |  | - |  |  |  | - |  |  |  | 8.3 |  |  |  | 8.3 |
Operating income |  | $ | 17.4 |  |  | $ | 8.0 |  |  | $ | (8.4 | ) |  | $ | 17.0 |
(a) Selling, engineering, and administrative expenses primarily include selling, general, and administrative costs, information technology, professional services, and facility-related expenses directly incurred by the segments. (b) Research and development primarily includes engineering-related costs to create new products and to make improvements to products currently in use. (c) Indirect expenses represent corporate costs and shared expenses allocated to businesses. (d) Amortization of intangible assets includes those resulting from the acquisition of new businesses.
|  | Three Months Ended March 30, 2024 |
|  | Hydraulics |  |  | Electronics |  |  | Unallocated expenses |  |  | Total |
Net sales from external customers |  | $ | 142.4 |  |  | $ | 69.6 |  |  | $ | - |  |  | $ | 212.0 |
Reportable segment total cost of sales |  |  | 97.9 |  |  |  | 46.9 |  |  |  | - |  |  |  | 144.8 |
Reportable segment gross profit |  | $ | 44.5 |  |  | $ | 22.7 |  |  | $ | - |  |  | $ | 67.2 |
Selling, engineering and administrative expenses (a) |  | $ | 15.3 |  |  | $ | 10.0 |  |  | $ | - |  |  | $ | 25.3 |
Research and development (b) |  |  | 2.1 |  |  |  | 3.1 |  |  |  | - |  |  |  | 5.2 |
Indirect expenses (c) |  |  | 5.3 |  |  |  | 2.5 |  |  |  | 0.7 |  |  |  | 8.5 |
Amortization of intangible assets (d) |  |  | - |  |  |  | - |  |  |  | 7.9 |  |  |  | 7.9 |
Operating income |  | $ | 21.8 |  |  | $ | 7.1 |  |  | $ | (8.6 | ) |  | $ | 20.3 |
(a) Selling, engineering, and administrative expenses primarily include selling, general, and administrative costs, information technology, professional services, and facility-related expenses directly incurred by the segments. (b) Research and development primarily includes engineering-related costs to create new products and to make improvements to products currently in use. (c) Indirect expenses represent corporate costs and shared expenses allocated to businesses. (d) Amortization of intangible assets includes those resulting from the acquisition of new businesses.
|  | Three Months Ended |
|  | March 29, 2025 |  |  | March 30, 2024 |
Capital expenditures |  |  |  |  |  |
Hydraulics |  | $ | 4.5 |  |  | $ | 3.2 |
Electronics |  |  | 1.6 |  |  |  | 2.3 |
Total |  | $ | 6.1 |  |  | $ | 5.5 |
Depreciation and amortization |  |  |  |  |  |
Hydraulics |  | $ | 5.4 |  |  | $ | 5.7 |
Electronics |  |  | 2.3 |  |  |  | 2.1 |
Corporate and Other |  |  | 8.3 |  |  |  | 8.0 |
Total |  | $ | 16.0 |  |  | $ | 15.8 |
|  | March 29, 2025 |  |  | December 28, 2024 |
Goodwill |  |  |  |  |  |
Hydraulics |  | $ | 296.6 |  |  | $ | 287.1 |
Electronics |  |  | 211.8 |  |  |  | 211.8 |
Total |  | $ | 508.4 |  |  | $ | 498.9 |
Total assets |  |  |  |  |  |
Hydraulics |  | $ | 946.1 |  |  | $ | 926.6 |
Electronics |  |  | 573.6 |  |  |  | 572.4 |
Corporate and Other |  |  | 6.6 |  |  |  | 6.4 |
Total |  | $ | 1,526.3 |  |  | $ | 1,505.4 |
Geographic Region Information Net sales are measured based on the geographic destination of sales. In the first quarter of 2025, sales to the U.S. represented approximately 46% of total net sales. Other countries with net sales concentration included China, 9%, Australia, 8%, and Germany, 5%, approximately. All other countries individually represented less than 5% of total net sales. Tangible long-lived assets are shown based on the physical location of the assets and primarily include net property, plant and equipment and exclude right of use assets. The following table presents financial information by region:
|  | Three Months Ended |
|  | March 29, 2025 |  |  | March 30, 2024 |
Net sales |  |  |  |  |  |
Americas |  | $ | 106.6 |  |  | $ | 113.9 |
EMEA |  |  | 44.1 |  |  |  | 52.0 |
APAC |  |  | 44.8 |  |  |  | 46.1 |
Total |  | $ | 195.5 |  |  | $ | 212.0 |
|  | March 29, 2025 |  |  | December 28, 2024 |
Tangible long-lived assets |  |  |  |  |  |
Americas |  | $ | 136.3 |  |  | $ | 139.1 |
EMEA |  |  | 39.0 |  |  |  | 36.5 |
APAC |  |  | 18.5 |  |  |  | 17.9 |
Total |  | $ | 193.8 |  |  | $ | 193.5 |

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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/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 48 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-48 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards 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