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Segment Information
 6 Months Ended
Jun. 30, 2011
Segment Information  
Segment Information

Note 6—Segment Information

 

We manage the business, review operating results and assess performance, as well as allocate resources, based upon two separate reporting segments that reflect the market focus of each business. The Light Emitting Diode (“LED”) & Solar segment consists of metal organic chemical vapor deposition (“MOCVD”) systems, molecular beam epitaxy (“MBE”) systems, Copper, Indium, Gallium, Selenide (“CIGS”) deposition systems and thermal deposition sources. These systems are primarily sold to customers in the high-brightness LED (“HB LED”) and solar industries, as well as to scientific research customers. This segment has manufacturing, product development and marketing sites in Somerset, New Jersey, St. Paul, Minnesota and Tewksbury, Massachusetts and has a product development site in Clifton Park, New York. As of July 28, 2011 we announced a plan to discontinue our CIGS solar systems business. The Data Storage segment consists of the ion beam etch, ion beam deposition, diamond-like carbon, physical vapor deposition and dicing and slicing products sold primarily to customers in the data storage industry. This segment has manufacturing, product development and marketing sites in Plainview, New York, Camarillo, California and Ft. Collins, Colorado.

 

We evaluate the performance of our reportable segments based on income (loss) from continuing operations before interest, income taxes, amortization and certain items (“Segment profit (loss)”), which is the primary indicator used to plan and forecast future periods. The presentation of this financial measure facilitates meaningful comparison with prior periods, as management believes Segment profit (loss) reports baseline performance and thus provides useful information. Certain items include restructuring credits, equity-based compensation expense and loss on extinguishment of debt. The accounting policies of the reportable segments are the same as those described in the summary of critical accounting policies.

 

The following tables present certain data pertaining to our reportable product segments and a reconciliation of segment profit (loss) to income (loss) from continuing operations before income taxes for the three and six months ended June 30, 2011 and 2010, respectively, and goodwill and total assets as of June 30, 2011 and December 31, 2010 (in thousands):

 

 

 

LED & Solar

 

Data Storage

 

Unallocated
Corporate
Amount

 

Total

 

Three months ended June 30, 2011

 

 

 

 

 

 

 

 

 

Net sales

 

$

219,135

 

$

45,680

 

$

—

 

$

264,815

 

Segment profit (loss)

 

$

70,964

 

$

13,050

 

$

(4,082

)

$

79,932

 

Interest, net

 

—

 

—

 

86

 

86

 

Amortization

 

1,108

 

356

 

25

 

1,489

 

Equity-based compensation

 

1,238

 

352

 

2,473

 

4,063

 

Restructuring

 

11,125

 

—

 

—

 

11,125

 

Asset impairment charge

 

6,211

 

—

 

—

 

6,211

 

Inventory write-offs

 

33,375

 

—

 

—

 

33,375

 

Loss on extinguishment of debt

 

—

 

—

 

3,045

 

3,045

 

Income (loss) from continuing operations before income taxes

 

$

17,907

 

$

12,342

 

$

(9,711

)

$

20,538

 

Three months ended June 30, 2010

 

 

 

 

 

 

 

 

 

Net sales

 

$

185,647

 

$

35,742

 

$

—

 

$

221,389

 

Segment profit (loss)

 

$

57,397

 

$

9,605

 

$

(3,361

)

$

63,641

 

Interest, net

 

—

 

—

 

1,762

 

1,762

 

Amortization

 

796

 

383

 

59

 

1,238

 

Equity-based compensation

 

671

 

308

 

1,544

 

2,523

 

Income (loss) from continuing operations before income taxes

 

$

55,930

 

$

8,914

 

$

(6,726

)

$

58,118

 

 

 

 

 

 

 

 

 

 

 

Six months ended June 30, 2011

 

 

 

 

 

 

 

 

 

Net sales

 

$

433,833

 

$

85,658

 

$

—

 

$

519,491

 

Segment profit (loss)

 

$

144,927

 

$

25,281

 

$

(6,374

)

$

163,834

 

Interest, net

 

—

 

—

 

1,385

 

1,385

 

Amortization

 

1,822

 

719

 

83

 

2,624

 

Equity-based compensation

 

2,215

 

660

 

4,286

 

7,161

 

Restructuring

 

11,125

 

—

 

—

 

11,125

 

Asset impairment charge

 

6,211

 

—

 

—

 

6,211

 

Inventory write-offs

 

33,375

 

—

 

—

 

33,375

 

Loss on extinguishment of debt

 

—

 

—

 

3,349

 

3,349

 

Income (loss) from continuing operations before income taxes

 

$

90,179

 

$

23,902

 

$

(15,477

)

$

98,604

 

Six months ended June 30, 2010

 

 

 

 

 

 

 

 

 

Net sales

 

$

297,152

 

$

58,987

 

$

—

 

$

356,139

 

Segment profit (loss)

 

$

85,755

 

$

12,482

 

$

(6,497

)

$

91,740

 

Interest, net

 

—

 

—

 

3,544

 

3,544

 

Amortization

 

1,592

 

766

 

118

 

2,476

 

Equity-based compensation

 

1,138

 

523

 

2,728

 

4,389

 

Restructuring

 

—

 

(179

)

—

 

(179

)

Income (loss) from continuing operations before income taxes

 

$

83,025

 

$

11,372

 

$

(12,887

)

$

81,510

 

 

 

 

 

 

 

 

 

 

 

 

 

LED & Solar

 

Data Storage

 

Unallocated
Corporate
Amount

 

Total

 

As of June 30, 2011

 

 

 

 

 

 

 

 

 

Goodwill

 

$

67,107

 

$

—

 

$

—

 

$

67,107

 

Total assets

 

$

352,739

 

$

59,563

 

$

708,141

 

$

1,120,443

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2010

 

 

 

 

 

 

 

 

 

Goodwill

 

$

52,003

 

$

—

 

$

—

 

$

52,003

 

Total assets

 

$

323,096

 

$

61,691

 

$

763,247

 

$

1,148,034

 

 

As of June 30, 2011 and December 31, 2010 unallocated corporate total assets were comprised principally of cash and cash equivalents, short-term investments and restricted cash.