Note 14 - Business Unit Segment Information

9 Months Ended

Oct. 01, 2011

Segment Reporting Disclosure [Text Block]

14. Business Unit Segment Information

The company and its subsidiaries design, manufacture and sell circuit protection devices throughout the world. The company reports its operations by the following business unit segments: Electronics, Automotive, and Electrical. Each operating segment is directly responsible for sales, marketing and research and development. Manufacturing, purchasing, logistics, customer service, finance, information technology and human resources are shared functions that are allocated back to the three operating segments. The CEO 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. All other functions are shared by the operating segments and expenses for these shared functions are allocated to the operating segments and included in the operating results reported below. The company does not report inter-segment revenue because the operating segments do not record it. The company does not allocate interest and other income, interest expense, or taxes to operating segments. Although the CEO 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.

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”).

During the first quarter of 2011, as previously reported, the company adjusted its business segment reporting methodology to report results by product line rather than by sales organization. The company’s total consolidated revenues and operating income did not change.

Business unit segment information for the three and nine months ended October 1, 2011 and October 2, 2010 are summarized as follows (in thousands):

	For the Three Months Ended						For the Nine Months Ended
	October 1, 2011			October 2, 2010			October 1, 2011			October 2, 2010
Net sales
Electronics	$	96,288		$	103,644		$	282,032		$	287,058
Automotive		47,703			34,177			151,957			105,732
Electrical		29,996			25,644			83,773			72,585
Total net sales	$	173,987		$	163,465		$	517,762		$	465,375
Operating income
Electronics	$	18,610		$	22,830		$	56,974		$	53,237
Automotive		6,456			6,401			24,580			13,538
Electrical		7,472			7,865			21,467			19,471
Other(a)		(2,964	)		(2,988	)		(7,238	)		(2,988	)
Total operating income		29,574			34,108			95,783			83,258
Interest expense		414			313			1,271			1,096
Other (income) expense, net		(1,897	)		(29	)		(1,934	)		(1,328	)
Income before income taxes	$	31,057		$	33,824		$	96,446		$	83,490

(a) Included  in “Other” operating income for the three and nine months ended October 1, 2011 are asset impairment charges of $2.3 million, as discussed in Note 11. Included in “Other” operating income for the nine months ended October 1, 2011 are acquisition related fees of $1.0 million and a non-cash charge of $3.7 million for the sale of inventory that had been stepped-up to fair value at the acquisition date of Cole Hersee in 2010 as required by purchase accounting rules. As the inventory was sold, the non-cash charge impacted operating income.  Included in “Other” operating income for the three and  nine months ended October 2, 2010 are asset impairment charges of $3.0 million.

The company’s net sales by geographical area for the three and nine months ended October 1, 2011 and October 2, 2010 are summarized as follows (in thousands):

	For the Three Months Ended				For the Nine Months Ended
	October 1, 2011		October 2, 2010		October 1, 2011		October 2, 2010
Net sales
Americas	$	75,721	$	61,734	$	222,195	$	172,989
Europe		27,297		29,192		90,944		88,203
Asia-Pacific		70,969		72,539		204,623		204,183
Total net sales	$	173,987	$	163,465	$	517,762	$	465,375

The company’s long-lived assets (net property, plant and equipment) by geographical area as of October 1, 2011 and January 1, 2011 are summarized as follows (in thousands):

	October 1, 2011		January 1, 2011
Long-lived assets
Americas	$	54,719	$	58,869
Europe		715		3,080
Asia-Pacific		64,836		68,198
Consolidated total	$	120,270	$	130,147