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Segment Information
6 Months Ended
Jun. 26, 2021
Segment Reporting [Abstract]  
Segment Information Segment Information
 
The Company and its subsidiaries design, manufacture and sell components and modules empowering a sustainable, connected, and safer 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. 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 products such as discrete transient voltage suppressor (“TVS”) diodes, TVS diode arrays, protection and switching thyristors, 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 motor drives and power conversion, automotive electronics, electric vehicle and related infrastructure, power supplies, data centers and telecommunications, medical devices, alternative energy, building and home automation, appliances, and mobile electronics.

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 end markets. Passenger car fuse products for internal combustion engine, 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 used in applications serving a number of end markets, including
heavy truck, construction, agriculture and material handling. Automotive sensor products include a wide range of automotive and commercial vehicle products designed to monitor the passenger compartment occupant's safety and environment as well as the vehicle’s powertrain.

Industrial Segment: Consists of industrial circuit protection products (i.e. fuses, power distribution modules, switches) and industrial control products (i.e. relays, transformers, contactors, sensors). These products are used in a variety of applications and end-markets including: Renewable Energy, Energy Storage, HVAC, Electric Vehicle Infrastructure, Industrial Equipment, Industrial Automation, Construction, Mining, and Oil & Gas.
 
Segment information is summarized as follows: 
 Three Months EndedSix Months Ended
(in thousands)June 26, 2021June 27, 2020June 26, 2021June 27, 2020
Net sales    
Electronics$325,347 $223,271 $611,882 $437,460 
Automotive133,318 61,999 261,847 166,769 
Industrial64,823 22,067 113,553 49,204 
Total net sales$523,488 $307,337 $987,282 $653,433 
Depreciation and amortization
Electronics$15,114 $15,617 $30,495 31,148 
Automotive6,946 7,071 14,019 14,258 
Industrial2,155 1,046 3,899 2,130 
Total depreciation and amortization$24,215 $23,734 $48,413 $47,536 
Operating income (loss)
Electronics$74,236 $32,651 $129,759 $64,923 
Automotive19,258 (8,857)39,574 5,259 
Industrial8,375 (23)11,881 3,511 
Other(a)
(5,612)(35,721)(8,476)(40,893)
Total operating income (loss)96,257 (11,950)172,738 32,800 
Interest expense4,626 5,855 9,299 11,273 
Foreign exchange (gain) loss(1,676)(6,010)5,161 (3,426)
Other (income) expense, net(1,890)(1,210)(9,627)39 
Income (loss) before income taxes$95,197 $(10,585)$167,905 $24,914 
 
(a) Included in “Other” Operating income for the second quarter of 2021 was $3.3 million ($6.8 million year-to-date) of purchase accounting inventory step-up charges, $0.5 million ($1.3 million year-to-date) of legal and professional fees and other integration expenses related to Hartland and other contemplated acquisitions, and $0.8 million ($1.3 million year-to-date) of restructuring, impairment and other charges, primarily related to employee termination costs. See Note 7, Restructuring, Impairment, and Other Charges, for further discussion. In addition, there was a loss of $1.0 million recorded during the second quarter of 2021 for a total year-to-date gain of $0.9 million from the sale of a building within the Electronics segment.

Included in “Other” Operating (loss) income for the 2020 second quarter is $0.1 million ($1.3 million year-to-date) of acquisition-related and integration charges related to the IXYS acquisition and other contemplated acquisitions. In addition, there was $35.6 million ($39.6 million year-to-date) of restructuring, impairment and other charges, primarily related to the goodwill impairment charge of $33.8 million recorded in the second quarter associated with the automotive sensors reporting unit within the Automotive segment, $1.8 million ($3.5 million year-to-date) of employee termination costs, and other restructuring charges and impairment charges of $2.2 million recorded in the first quarter associated with the announced consolidation of a manufacturing facility within the Industrial segment. See Note 5, Goodwill and Other Intangible Assets and Note 7, Restructuring, Impairment, and Other Charges, for further discussion.
The Company’s net sales by country were as follows: 
 Three Months EndedSix Months Ended
(in thousands)June 26, 2021June 27, 2020June 26, 2021June 27, 2020
Net sales
United States$154,797 $76,870 $285,728 $179,780 
China156,086 102,026 295,244 188,041 
Other countries(a)
212,605 128,441 406,310 285,612 
Total net sales$523,488 $307,337 $987,282 $653,433 
 
 The Company’s long-lived assets by country were as follows:
 
(in thousands)June 26,
2021
December 26,
2020
Long-lived assets
United States$47,509 $46,132 
China87,497 85,876 
Mexico76,700 70,125 
Germany37,447 37,976 
Philippines69,308 66,994 
Other countries(a)
34,365 37,075 
Total long-lived assets$352,826 $344,178 
 
The Company’s additions to long-lived assets by country were as follows:
 
 Six Months Ended
(in thousands)June 26, 2021June 27, 2020
Additions to long-lived assets
United States$1,732 $2,026 
China7,127 4,516 
Mexico13,231 4,260 
Germany2,533 2,509 
Philippines6,941 9,039 
Other countries(a)
1,793 687 
Total additions to long-lived assets$33,357 $23,037 

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