Annual report pursuant to Section 13 and 15(d)

Segment Reporting

v3.20.4
Segment Reporting
 12 Months Ended
Jan. 02, 2021
Segment Reporting [Abstract]  
SEGMENT REPORTING

16.  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 makers.

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The Hydraulics segment provides the global capital goods industries with hydraulic components and systems used to transmit power and control force, speed and motion. There are three key technologies within the Hydraulics segment: cartridge valve technology (CVT), quick-release hydraulic coupling solutions (QRC) and hydraulic system design (Systems). 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 ensure high-performance under high temperature and pressure using one or multiple couplers. Systems provide engineered solutions for machine users, manufacturers or designers to fulfill complete system design requirements including electro-hydraulic, remote control, electronic control and programmable logic controller systems, as well as automation of existing equipment.

The Electronics segment provides complete, fully-tailored display and control solutions for engines, engine-driven equipment, specialty vehicles and therapy baths and spas. This broad range of products is complemented by extensive application expertise and unparalleled depth of software, embedded programming, hardware and sustaining engineering teams. This technology is referred to as Electronic Controls (EC). 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 and application specialists, process monitoring instrumentation, proprietary hardware and software development, printed circuit board assembly and wiring harness 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 year ended January 2, 2021, these unallocated costs totaled $65,947 and include certain corporate costs not deemed to be allocable to either business segment of $2,567, goodwill impairment recognized on the Faster business unit of $31,871, acquisition related costs including Balboa transaction costs of $6,644, charges related to the inventory step up to fair value of $1,874, amortization of acquisition-related intangible assets of $22,114 and other acquisition and integration related activities of $877. The accounting policies of the Company’s operating segments are the same as those used to prepare the accompanying Consolidated Financial Statements.

The following table presents financial information by reportable segment for the last three fiscal years:

 

 

 

2020

 

 

2019

 

 

2018

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

 

Hydraulics

 

$

407,192

 

 

$

442,812

 

 

$

381,845

 

Electronics

 

 

115,848

 

 

 

111,853

 

 

 

126,200

 

Total

 

$

523,040

 

 

$

554,665

 

 

$

508,045

 

Operating income:

 

 

 

 

 

 

 

 

 

 

 

 

Hydraulics

 

$

81,996

 

 

$

86,027

 

 

$

83,858

 

Electronics

 

 

19,363

 

 

 

21,994

 

 

 

25,046

 

Corporate and other

 

 

(65,947

)

 

 

(17,906

)

 

 

(33,350

)

Total

 

$

35,412

 

 

$

90,115

 

 

$

75,554

 

Capital expenditures:

 

 

 

 

 

 

 

 

 

 

 

 

Hydraulics

 

$

11,725

 

 

$

22,221

 

 

$

25,782

 

Electronics

 

 

2,855

 

 

 

2,804

 

 

 

2,598

 

Total

 

$

14,580

 

 

$

25,025

 

 

$

28,380

 

Total assets:

 

 

 

 

 

 

 

 

 

 

 

 

Hydraulics

 

$

765,155

 

 

$

768,324

 

 

$

771,409

 

Electronics

 

 

523,502

 

 

 

251,252

 

 

 

263,412

 

Corporate

 

 

8,322

 

 

 

2,175

 

 

 

7,344

 

Total

 

$

1,296,979

 

 

$

1,021,751

 

 

$

1,042,165

 

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Geographic Region Information:

Net sales are measured based on the geographic destination of 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 ROU assets. The following table presents financial information by region for the last three fiscal years:

 

 

 

2020

 

 

2019

 

 

2018

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

224,470

 

 

$

258,542

 

 

$

257,684

 

EMEA

 

 

142,062

 

 

 

150,091

 

 

 

139,776

 

APAC

 

 

156,508

 

 

 

146,032

 

 

 

110,585

 

Total

 

$

523,040

 

 

$

554,665

 

 

$

508,045

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible long-lived assets

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

96,752

 

 

$

87,104

 

 

$

83,664

 

EMEA

 

 

31,091

 

 

 

28,436

 

 

 

26,724

 

APAC

 

 

18,718

 

 

 

18,004

 

 

 

16,480

 

Total

 

$

146,561

 

 

$

133,544

 

 

$

126,868