. Segment Information

The Company and its subsidiaries design, manufacture and sell components and modules for circuit protection, power control and sensing throughout the world. The Company reports its operations by the following segments: Electronics, Automotive, and Industrial. An operating segment is defined as a component of an enterprise that engages in business activities from which it

may

earn revenues and incur expenses, and about which separate financial information is regularly evaluated by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources. The CODM is the Company’s President and Chief Executive Officer (“CEO”). The CODM allocates resources to and assesses the performance of each operating segment using information about its revenue and operating income (loss) before interest and taxes, but does

not

evaluate the operating segments using discrete balance sheet information.

Sales, marketing, and research and development expenses are charged directly into each operating segment. Manufacturing, purchasing, logistics, customer service, finance, information technology, and human resources are shared functions that are allocated back to the

three

operating segments. The Company does

not

report inter-segment revenue because the operating segments do

not

record it. Certain expenses, determined by the CODM to be strategic in nature and

not

directly related to segments current results, are

not

allocated but identified as “Other”. Additionally, the Company does

not

allocate interest and other income, interest expense, or taxes to operating segments. These costs are

not

allocated to the segments, as management excludes such costs when assessing the performance of the segments. Although the CODM uses operating income (loss) to evaluate the segments, operating costs included in

one

segment

may

benefit other segments. Except as discussed above, the accounting policies for segment reporting are the same as for the Company as a whole.

●

Electronics Segment

: Consists of

one

of the broadest product offerings in the industry, including fuses and fuse accessories, positive temperature coefficient (“PTC”) resettable fuses, polymer electrostatic discharge (“ESD”) suppressors, varistors, gas discharge tubes; semiconductor and power semiconductor products such as discrete transient voltage suppressor (“TVS”) diodes, TVS diode arrays, protection and switching thyristors, silicon carbide, metal-oxide-semiconductor field-effect transistors (“MOSFETs”) and silicon carbide diodes; and insulated gate bipolar transistors (“IGBT”) technologies. The segment covers a broad range of end markets, including consumer electronics, automotive electronics, IT and telecommunications equipment, medical devices, lighting products, and white goods.

●

Automotive Segment:

Consists of a wide range of circuit protection, power control and sensing technologies for global original equipment manufacturers (“OEMs”), Tier-I suppliers and parts distributors in the automotive, commercial vehicle, and agricultural and construction equipment industries. Passenger car fuse products include fuses and fuse accessories, including blade fuses, battery cable protectors, varistors, high-current fuses, and high-voltage fuses for hybrid and electric vehicles. Commercial vehicle products include fuses, switches, relays, and power distribution modules for the commercial vehicle industry. Automotive sensor products include a wide range of automotive and commercial vehicle sensors designed to monitor the passenger compartment occupants and environment as well as the vehicle’s powertrain, emissions, speed and suspension.

●

Industrial Segment:

Consists of power fuses, protection relays and controls and other circuit protection products for use in heavy industrial applications such as mining, oil and gas, energy storage, construction, HVAC systems, elevator and other industrial equipment.

Segment information is summarized as follows:

	For the Three Months Ended
(in thousands )	March 31 , 201 8			April 1 , 201 7
Net sales
Electronics	$	264,411		$	153,767
Automotive		126,131			107,839
Industrial		27,271			23,835
Total net sales	$	417,813		$	285,441

Depreciation and amortization
Electronics	$	13,678		$	8,387
Automotive		5,970			5,371
Industrial		1,460			1,314
Other		2,504			—
Total depreciation and amortization	$	23,612		$	15,072

Operating income (loss)
Electronics	$	53,964		$	35,206
Automotive		18,390			15,065
Industrial		4,709			106
Other (a)		(39,492	)		(1,525	)
Total operating income		37,571			48,852
Interest expense		5,423			3,120
Foreign exchange loss (gain)		(10,555	)		(1,557	)
Other income, net		(1,943	)		(139	)
Income before income taxes	$	44,646		$	47,428

(a) For the

first

quarter of

2018,

“Other” Operating income (loss) of

$39.5

million consists of

$38.6

million in acquisition and integration costs associated with the Company’s

2018

acquisition of IXYS (

$18.4

million included in Cost of sales (“COS”), of which

$17.9

million relates to fair value inventory adjustments,

$16.1

million included in Selling, general, and administrative expenses (“SG&A),

$1.6

million in Research and development (“R&D”)

$2.5

million in backlog amortization expense),

$0.8

million in restructuring costs (

$0.5

million included in COS and

$0.3

million in SG&A) and

$0.1

million in year acquisition and integration costs associated with the Company’s

2017

acquisitions in SG&A.

For the

first

quarter of

2017,

“Other” Operating income (loss) of

$1.5

million consists of acquisition and integration costs associated with the Company’s

2016

acquisitions (included in COS and SG&A).

The Company’s net sales by country were as follows:

	For the Three Months Ended
(in thousands )	March 31, 2018		April 1, 2017
Net sales
United States	$	123,877	$	86,658
China (a)		106,508		78,219
Other countries ( b )		187,428		120,564
Total net sales	$	417,813	$	285,441

(a) Includes mainland China, Taiwan, and Hong Kong.

(b) Each country included in Other countries are less than

10%

of net sales.

The Company’s long-lived assets by country, as of

March 31, 2018

and

April 1, 2017,

were as follows:

(in thousands )	March 31, 2018		December 30, 2017
Long-lived assets
United States	$	49,132	$	23,490
China (a)		91,676		86,866
Mexico		64,176		62,510
Germany		36,232		1,082
Philippines		30,734		31,129
Other countries		65,255		45,500
Total long-lived assets	$	337,205	$	250,577

(a) Includes mainland China, Taiwan, and Hong Kong.

The Company’s additions to long-lived assets by country were as follows:

	For the Three Months Ended
(in thousands )	March 31, 2018		April 1, 2017
Additions to long-lived assets
United States	$	2,909	$	332
China (a)		5,144		2,392
Mexico		3,310		6,978
Germany		3,038		45
Philippines		2,162		855
Other countries		1,346		1,775
Total additions to long-lived assets	$	17,909	$	12,377

(a) Includes mainland China, Taiwan, and Hong Kong.