Business Segments

9 Months Ended

Jan. 03, 2021

Effective April 1, 2020, the Company's chief operating decision maker, or CODM (the Company's Chief Executive Officer), changed the manner in which he reviews financial information for purposes of assessing business performance and allocating resources, by focusing on the lines of business on a global basis, rather than on geographic basis. As a result of this change, the Company re-evaluated the identification of its operating segments and reportable segments and identified the following as its three new operating segments, based on lines of business:

•Energy Systems - uninterruptible power systems, or “UPS” applications for computer and computer-controlled systems, as well as telecommunications systems, switchgear and electrical control systems used in industrial facilities and electric utilities, large-scale energy storage and energy pipelines. Energy Systems also includes highly integrated power solutions and services to broadband, telecom, renewable and industrial customers, as well as thermally managed cabinets and enclosures for electronic equipment and batteries.

•Motive Power - power for electric industrial forklifts used in manufacturing, warehousing and other material handling applications, as well as mining equipment, diesel locomotive starting and other rail equipment; and

•Specialty - premium starting, lighting and ignition applications in transportation, energy solutions for satellites, military aircraft, submarines, ships and other tactical vehicles, as well as medical and security systems.

The new operating segments also represent the Company's reportable segments under ASC 280, Segment Reporting. All prior comparative periods presented have been recast to conform to these changes.

Summarized financial information related to the Company's reportable segments for the third quarter and nine months ended January 3, 2021 and December 29, 2019, is shown below:


	Quarter ended				Nine months ended
	January 3, 2021		December 29, 2019		January 3, 2021		December 29, 2019
Net sales by segment to unaffiliated customers
Energy Systems	$	337,248	$	345,507	$	1,031,457	$	1,042,325
Motive Power	304,373		315,517		830,945		995,219
Specialty	109,446		102,674		301,991		268,521
Total net sales	$	751,067	$	763,698	$	2,164,393	$	2,306,065
Operating earnings by segment
Energy Systems	$	18,407	$	16,293	$	63,489	$	60,337
Motive Power	40,270		30,894		91,695		102,523
Specialty	12,590		9,159		29,224		29,186
Inventory step up to fair value relating to acquisitions - Energy Systems	—		(1,636)		—		(1,636)
Inventory step up to fair value relating to acquisitions - Specialty	—		(2,209)		—		(2,209)
Restructuring charges - Energy Systems	(868)		(4,594)		(2,711)		(6,326)
Restructuring and other exit charges - Motive Power	(14,348)		(520)		(16,791)		(1,512)
Restructuring and other exit charges - Specialty	20		(4,303)		(200)		(4,792)
Fixed asset write-off relating to exit activities and other - Energy Systems	—		—		—		(50)
Fixed asset write-off relating to exit activities and other - Motive Power	—		—		—		(5,380)
Fixed asset write-off relating to exit activities - Specialty	—		—		—		(11)
Total operating earnings (1)	$	56,071	$	43,084	$	164,706	$	170,130

(1) The Company does not allocate interest expense or other (income) expense to the reportable segments.

(2) The Company does not identify or allocate assets by reportable segment, nor does the CODM evaluate reportable segments using discrete asset information.

(3) Reportable segments do not record inter-segment revenues and accordingly there are none to report.

Goodwill

Concurrent with the change in reporting segments effective April 1, 2020, goodwill was reassigned to the affected reporting units that have been identified within each operating segment, using a relative fair value approach outlined in ASC 350, Intangibles - Goodwill and Other.

The following table presents the amount of goodwill that has been reassigned to each of the Company's reportable segments as of April 1, 2020, using the relative fair value approach, as well as any changes in the carrying amount of goodwill by segment during the nine months of fiscal 2021:


	Energy Systems		Motive Power		Specialty		Total
Balance at March 31, 2020	$	263,150	$	308,497	$	92,289	$	663,936
Measurement period adjustments	1,348		—		1,648		2,996
Foreign currency translation adjustment	15,349		19,993		4,897		40,239
Balance as of January 3, 2021	$	279,847	$	328,490	$	98,834	$	707,171