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Segment Information
 9 Months Ended
Sep. 30, 2014
Segment Information  
Segment Information

Note 5—Segment Information

 

We have five identified operating segments that we aggregate into two reportable segments: the VIBE and Mechanical operating segments which are reported in our Data Storage segment; and the metal organic chemical vapor deposition (“MOCVD”), molecular beam epitaxy (“MBE”) and atomic layer deposition (“ALD”) operating segments are reported in our LED & Solar segment. We manage the business, review operating results and assess performance, as well as allocate resources, based upon our operating segments that reflect the market focus of each business. The LED & Solar segment consists of MOCVD systems, MBE systems, thermal deposition sources, ALD technology and other types of deposition systems. These systems are primarily sold to customers in the LED, OLED and solar industries, as well as to scientific research customers. This segment has product development and marketing sites in Somerset, New Jersey, Poughkeepsie, New York, St. Paul, Minnesota, Fremont, California, and Korea. 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 product development and marketing sites in Plainview, New York, Ft. Collins, Colorado and Camarillo, California. As of September 30, 2014, we are continuing the consolidation of our Ft. Collins, Colorado facility into our Plainview, New York facility and have begun consolidation of our Camarillo, California facility into the Plainview, New York facility.

 

We evaluate the performance of our reportable segments based on income (loss) from operations before interest, income taxes, amortization and other 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. Other items include restructuring expenses, asset impairment charges, equity-based compensation expense and other non-recurring items. The accounting policies of the reportable segments are the same as those described in the summary of critical accounting policies. Beginning in the third quarter of 2014, we began evaluating our reportable segments using segment profit (loss) before depreciation. Prior period segment profit (loss) reported below reflect this change for comparability.

 

The following table presents certain data pertaining to our reportable segments and a reconciliation of segment profit (loss) to income (loss) before income taxes for the three months ended September 30, 2014 and 2013, respectively (in thousands):

 

 

 

LED & Solar

 

Data Storage

 

Unallocated

 

Total

 

Three months ended September 30, 2014

 

 

 

 

 

 

 

 

 

Net sales

 

$
76,850

 

$
16,491

 

$

—

 

$
93,341

 

Segment profit (loss)

 

$
3,767

 

$
(1,417

)

$
(4,118

)

$
(1,768

)

Interest income (expense), net

 

—

 

—

 
305

 
305

 

Depreciation

 
(2,267

)
(417

)
(216

)
(2,900

)

Amortization

 
(2,825

)
(324

)

—

 
(3,149

)

Equity-based compensation

 
(2,083

)
(647

)
(1,760

)
(4,490

)

Restructuring

 
(557

)
(1,403

)
(357

)
(2,317

)

Asset impairment

 
(2,799

)
(65

)

—

 
(2,864

)

Income (loss) before income taxes

 

$
(6,764

)

$
(4,273

)

$
(6,146

)

$
(17,183

)

Three months ended September 30, 2013

 

 

 

 

 

 

 

 

 

Net sales

 

$
75,001

 

$
24,323

 

$

—

 

$
99,324

 

Segment profit (loss)

 

$
801

 

$
2,570

 

$
(5,210

)

$
(1,839

)

Interest income (expense), net

 

—

 

—

 
192

 
192

 

Depreciation

 
(2,524

)
(435

)
(281

)
(3,240

)

Amortization

 
(531

)
(324

)

—

 
(855

)

Equity-based compensation

 
(1,016

)
(439

)
(1,308

)
(2,763

)

Restructuring

 
(793

)
(447

)

—

 
(1,240

)

Income (loss) before income taxes

 

$
(4,063

)

$
925

 

$
(6,607

)

$
(9,745

)

 

The following table presents certain data pertaining to our reportable segments and a reconciliation of segment profit (loss) to income (loss) before income taxes for the nine months ended September 30, 2014 and 2013, respectively (in thousands):

 

 

 

LED & Solar

 

Data Storage

 

Unallocated

 

Total

 

Nine months ended September 30, 2014

 

 

 

 

 

 

 

 

 

Net sales

 

$
224,759

 

$
54,545

 

$

—

 

$
279,304

 

Segment profit (loss)

 

$
8,768

 

$
(1,634

)

$
(12,808

)

$
(5,674

)

Interest income (expense), net

 

—

 

—

 
541

 
541

 

Depreciation

 
(6,760

)
(1,191

)
(747

)
(8,698

)

Amortization

 
(7,980

)
(971

)

—

 
(8,951

)

Equity-based compensation

 
(6,595

)
(2,029

)
(5,679

)
(14,303

)

Restructuring

 
(794

)
(2,359

)
(357

)
(3,510

)

Changes in contingent consideration

 
29,368

 

—

 

—

 
29,368

 

Asset impairment

 
(2,799

)
(65

)

—

 
(2,864

)

Income (loss) before income taxes

 

$
13,208

 

$
(8,249

)

$
(19,050

)

$
(14,091

)

Nine months ended September 30, 2013

 

 

 

 

 

 

 

 

 

Net sales

 

$
193,241

 

$
65,299

 

$

—

 

$
258,540

 

Segment profit (loss)

 

$
(2,327

)

$
3,531

 

$
(14,671

)

$
(13,467

)

Interest income (expense), net

 

—

 

—

 
620

 
620

 

Depreciation

 
(7,494

)
(1,142

)
(878

)
(9,514

)

Amortization

 
(1,595

)
(971

)

—

 
(2,566

)

Equity-based compensation

 
(3,042

)
(1,057

)
(4,956

)
(9,055

)

Restructuring

 
(1,216

)
(497

)
(58

)
(1,771

)

Income (loss) before income taxes

 

$
(15,674

)

$
(136

)

$
(19,943

)

$
(35,753

)

 

 

 

 

 

 

 

 

 

 

 

The following table presents goodwill and total assets as of September 30, 2014 and December 31, 2013 (in thousands):

 

 

 

LED & Solar

 

Data Storage

 

Unallocated

 

Total

 

As of September 30, 2014

 

 

 

 

 

 

 

 

 

Goodwill

 

$
91,521 

 

$

—

 

$

—

 

$
91,521 

 

Total assets

 

$
388,745 

 

$
33,936 

 

$
533,717 

 

$
956,398 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2013

 

 

 

 

 

 

 

 

 

Goodwill

 

$
91,348 

 

$

—

 

$

—

 

$
91,348 

 

Total assets

 

$
359,464 

 

$
37,910 

 

$
550,595 

 

$
947,969 

 

 

As of September 30, 2014 and December 31, 2013 unallocated assets were comprised principally of cash and cash equivalents, restricted cash and short-term investments.