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, reed switch based magnetic sensing, 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 industrial and automotive electronics, electric vehicle infrastructure, data and telecommunications, medical devices, LED lighting, consumer electronics and appliances

•

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 passenger car, heavy duty truck, off-road vehicles, material handling, agricultural, construction and other commercial vehicle industries. Passenger car fuse products include fuses and fuse accessories for internal combustion engine vehicles and hybrid and electric vehicles including blade fuses, battery cable protectors, resettable fuses, high-current fuses, and high-voltage fuses. 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 products designed to monitor the passenger compartment occupants, safety 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 various industrial applications such as oil, gas, mining, alternative energy - solar and wind, electric vehicle infrastructure, construction, HVAC systems, elevator and other industrial equipment.

Segment information is summarized as follows:



	Three Months Ended
(in thousands)	March 30, 2019			March 31, 2018
Net sales
Electronics	$	265,394		$	264,411
Automotive	113,483			126,131
Industrial	26,623			27,271
Total net sales	$	405,500		$	417,813

Depreciation and amortization
Electronics	$	15,342		$	13,678
Automotive	6,877			5,970
Industrial	1,060			1,460
Other	—			2,504
Total depreciation and amortization	$	23,279		$	23,612

Operating income (loss)
Electronics	$	49,037		$	53,964
Automotive	13,200			18,390
Industrial	3,505			4,709
Other(a)	(5,069		)	(39,492		)
Total operating income	60,673			37,571
Interest expense	5,686			5,423
Foreign exchange loss (gain)	4,243			(10,555		)
Other expense (income), net	4,305			(1,943		)
Income before income taxes	$	46,439		$	44,646

(a) Included in “Other” Operating income (loss) for the 2019 first quarter is $2.4 million of acquisition integration charges primarily related to the IXYS acquisition. In addition, there were $2.7 million of restructuring charges primarily related to employee termination costs.

The first quarter of 2018 includes approximately $38.6 million of charges primarily related to the IXYS acquisition, which include $17.9 million of purchase accounting inventory step-up charges, $11.6 million in acquisition-related and integration costs primarily related to legal, accounting and other expenses, $2.5 million in backlog amortization costs, and $4.5 million in stock compensation expense recognized immediately upon close for converted IXYS options related to prior service periods and $2.1 million change in control expense related to IXYS. In addition, there were $0.8 million of employee termination costs and $0.1 million of acquisition-related expenses for other contemplated acquisitions.

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



	Three Months Ended
(in thousands)	March 30, 2019		March 31, 2018
Net sales
United States	$	119,528	$	123,877
China	57,334		106,508
Other countries(a)	228,638		187,428
Total net sales	$	405,500	$	417,813

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



(in thousands)	March 30, 2019		December 29, 2018
Long-lived assets
United States	$	57,527	$	58,691
China	94,807		95,806
Mexico	73,694		70,495
Germany	35,536		36,548
Philippines	36,223		32,459
Other countries(a)	44,547		45,895
Total long-lived assets	$	342,334	$	339,894

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



	Three Months Ended
(in thousands)	March 30, 2019		March 31, 2018
Additions to long-lived assets
United States	$	905	$	2,909
China	1,225		5,144
Mexico	5,484		3,310
Germany	598		3,038
Philippines	5,229		2,162
Other countries(a)	635		1,346
Total additions to long-lived assets	$	14,076	$	17,909


(a)	Each country included in other countries are less than 10% of net sales.