10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED OCTOBER 1, 2016

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM             TO

Commission file number 0-20388

LITTELFUSE, INC.

(Exact name of registrant as specified in its charter)

Delaware	36-3795742
(State or other jurisdiction	(I.R.S. Employer Identification No.)
of incorporation or organization)
8755 W. Higgins Road, Suite 500
Chicago, Illinois	60631
(Address of principal executive offices)	(Zip Code)

(773) 628-1000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [X]     Accelerated filer [ ]     Non-accelerated filer [ ]     Smaller reporting company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of October 28, 2016, 22,532,130 shares of common stock, $.01 par value, of the registrant were outstanding.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements.	Page
	Condensed Consolidated Balance Sheets as of October 1, 2016 (unaudited) and January 2, 2016	1
	Consolidated Statements of Net Income for the three and nine months ended October 1, 2016 (unaudited) and September 26, 2015 (unaudited)	2
	Consolidated Statements of Comprehensive Income for the three and nine months ended October 1, 2016 (unaudited) and September 26, 2015 (unaudited)	3
	Consolidated Statements of Cash Flows for the nine months ended October 1, 2016 (unaudited) and September 26, 2015 (unaudited)	4
	Notes to Condensed Consolidated Financial Statements (unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	27
Item 4.	Controls and Procedures.	28
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	30
Signatures		31

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

LITTELFUSE, INC.

Condensed Consolidated Balance Sheets

(In thousands of USD, except share amounts)

	October 1, 2016			January 2, 2016
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	194,494		$	328,786
Short-term investments		3,961			4,179
Accounts receivable, less allowances		205,211			142,882
Inventories		121,616			98,629
Prepaid income taxes and income taxes receivable		14,344			1,510
Prepaid expenses and other current assets		15,543			7,943
Total current assets		555,169			583,929
Property, plant and equipment:
Land		10,044			5,236
Buildings		83,441			71,383
Equipment		439,430			382,429
		532,915			459,048
Accumulated depreciation		(309,062	)		(296,480	)
Net property, plant and equipment		223,853			162,568
Intangible assets, net of amortization:
Patented and unpatented technologies, licenses and software		88,322			20,221
Distribution network		19,566			16,490
Customer lists, trademarks and tradenames		116,684			54,912
Goodwill		409,527			189,767
Investments		14,974			15,197
Deferred income taxes		17,151			8,333
Other assets		12,857			14,058
Total assets	$	1,458,103		$	1,065,475
Liabilities and Equity
Current liabilities:
Accounts payable	$	81,382		$	51,658
Accrued payroll		39,517			32,611
Accrued expenses		48,713			24,145
Accrued severance		3,420			3,798
Accrued income taxes		8,622			11,836
Current portion of long-term debt		6,250			87,000
Total current liabilities		187,904			211,048
Long-term debt, less current portion		434,206			83,753
Deferred income taxes		7,345			8,014
Accrued post-retirement benefits		6,235			5,653
Other long-term liabilities		19,037			17,755
Total equity		803,376			739,252
Total liabilities and equity	$	1,458,103		$	1,065,475
Common shares issued of 22,643,816 and 22,420,785, at October 1, 2016, and January 2, 2016, respectively.

See accompanying notes.

1

LITTELFUSE, INC.

Consolidated Statements of Net Income

(In thousands of USD, except per share amounts, unaudited)

	For the Three Months Ended						For the Nine Months Ended
	October 1, 2016			September 26, 2015			October 1, 2016			September 26, 2015
Net sales	$	280,331		$	215,510		$	771,641		$	647,844
Cost of sales		166,572			129,328			472,861			400,051
Gross profit		113,759			86,182			298,780			247,793
Selling, general and administrative expenses		56,589			37,002			150,047			112,119
Research and development expenses		10,403			7,479			30,884			22,224
Pension settlement expense		-			30,194			-			30,194
Amortization of intangibles		4,432			2,923			13,384			8,953
Impairment of goodwill and intangible assets		14,809			-			14,809			-
		86,233			77,598			209,124			173,490
Operating income		27,526			8,584			89,656			74,303
Interest expense		2,571			922			6,286			3,021
Foreign exchange (gain) loss		(4,700	)		(3,549	)		(7,114	)		(1,724	)
Other (income) expense, net		(778	)		(1,430	)		(1,040	)		(3,758	)
Income before income taxes		30,433			12,641			91,524			76,764
Income taxes		(369	)		1,317			14,281			16,761
Net income	$	30,802		$	11,324		$	77,243		$	60,003
Net income per share (see Note 10):
Basic	$	1.36		$	0.50		$	3.43		$	2.65
Diluted	$	1.35		$	0.50		$	3.41		$	2.64
Weighted average shares and equivalent shares outstanding:
Basic		22,578			22,581			22,515			22,623
Diluted		22,734			22,693			22,675			22,771
Cash dividends paid per common share	$	0.33		$	0.29		$	0.91		$	0.79

2

LITTELFUSE, INC.

Consolidated Statements of Comprehensive Income

(In thousands of USD, unaudited)

	For the Three Months Ended						For the Nine Months Ended
	October 1, 2016			September 26, 2015			October 1, 2016			September 26, 2015
Net income	$	30,802		$	11,324		$	77,243		$	60,003
Other comprehensive income (loss):
Pension liability adjustments (net of tax of $30 and $7 for the three months ended 2016 and 2015, and $395 and $49 for the nine months ended 2016 and 2015, respectively)		(138	)		(16	)		(183	)		(140	)
Reclassification adjustments to expense, (net of tax of $0 and $1,244, for the three months ended 2016 and 2015, and $0 and $746 for the nine months ended 2016 and 2015, respectively)		68			(514	)		212			1,457
Reclassification of pension settlement costs to expense (net of tax of $11,742 for the three and nine months ended 2015)		—			21,124			—			21,124
Unrealized (loss) gain on investments		927			(3,354	)		(559	)		(18	)
Foreign currency translation adjustments		(5,771	)		(26,377	)		(8,951	)		(36,530	)
Comprehensive income	$	25,888		$	2,187		$	67,762		$	45,896

See accompanying notes.

3

LITTELFUSE, INC.

Consolidated Statements of Cash Flows

(In thousands of USD, unaudited)

	For the Nine Months Ended
	October 1, 2016			September 26, 2015
Operating activities:
Net income	$	77,243		$	60,003
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		24,841			22,154
Amortization of intangibles		13,384			8,952
Impairment of goodwill and intangible assets		14,809			—
Loss on sale of product line		1,391			—
Stock-based compensation		9,166			7,997
Non-cash inventory charge		7,456			—
Net loss on pension settlement, net of tax		—			19,472
Excess tax benefit on share-based compensation		(2,272	)		(1,500	)
Loss on sale of property, plant and equipment		440			308
Changes in operating assets and liabilities:
Accounts receivable		(24,862	)		(18,274	)
Inventories		4,505			(4,203	)
Accounts payable		7,845			4,216
Accrued expenses (including post-retirement)		6,497			6,577
Accrued payroll and severance		1,388			3,598
Accrued taxes		(23,613	)		4,006
Prepaid expenses and other		(18,203	)		277
Net cash provided by operating activities		100,015			113,583
Investing activities:
Purchases of property, plant, and equipment		(34,501	)		(35,016	)
Acquisition of businesses, net of cash acquired		(468,636	)		—
Proceeds from maturities of short term investments		345			—
Decrease in entrusted loan receivable		4,056			5,930
Proceeds from sale of assets		255			38
Net cash used in investing activities		(498,481	)		(29,048	)
FINANCING activities:
Proceeds of revolving credit facility		258,000			49,000
Proceeds of term loan		234,000			—
Payments of revolving credit facility		(97,500	)		(25,000	)
Payments of term loan		(119,125	)		(3,750	)
Payments of entrusted loan		(4,056	)		(5,930	)
Debt issuance costs		(1,701	)		(42	)
Cash dividends paid		(20,405	)		(17,864	)
Proceeds from exercise of stock options		14,581			6,186
Excess tax benefit on share-based compensation		2,272			1,500
Purchases of common stock		(3,685	)		(31,252	)
Net cash (used in) provided by financing activities		262,381			(27,152	)
Effect of exchange rate changes on cash and cash equivalents		1,793			(18,314	)
Increase (decrease) in cash and cash equivalents		(134,292	)		39,069
Cash and cash equivalents at beginning of period		328,786			297,571
Cash and cash equivalents at end of period	$	194,494		$	336,640

See accompanying notes.

4

Notes to CONDENSED Consolidated Financial Statements (Unaudited)

1. Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements of Littelfuse, Inc. and its subsidiaries (the “company”) have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and disclosures normally included in the consolidated balance sheet, statements of net income and comprehensive income and cash flows prepared in conformity with U.S. GAAP have been condensed or omitted as permitted by such rules and regulations, although the company believes that the disclosures made are adequate to make the information not misleading. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the periods ended October 1, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. For further information, refer to the company’s consolidated financial statements and the notes thereto incorporated by reference in the company’s Annual Report on Form 10-K for the year ended January 2, 2016.

The company’s unaudited consolidated statement of income for the three and nine months ended October 1, 2016 include the operating results of PolySwitch business purchased from TE Connectivity Ltdand the TVS Diode/Thyristor/IGBT business purchased from ON Semiconductor Corporation since the acquisition dates of these businesses of March 25, 2016 and August 29, 2016, respectively.

2. Correction of immaterial errors

In the second quarter of 2016, management determined that the company may incur additional income taxes and interest in a foreign jurisdiction with respect to the 2011 through 2015 fiscal years. The cumulative adjustment for this income tax (including interest of $1.5 million) as of January 2, 2016, is approximately $4.9 million. The adjustment applicable to 2015, 2014, 2013, 2012 and 2011 was $1.6 million, $1.3 million, $1.0 million, $0.9 million and $0.1 million, respectively.

Pursuant to the guidance of Staff Accounting Bulletin ("SAB") No. 99, Materiality, the company concluded that the errors were not material to any of its applicable prior period annual and quarterly financial statements. Although the errors were immaterial to prior periods, the prior period annual and interim financial statements were revised, in accordance with SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, due to the significance of the out-of-period correction. The adjustment for each year has been treated as applicable to the fourth quarter of each year.

A reconciliation of the effects of the adjustments to the previously reported balance sheet at January 2, 2016 follows ($ in thousands):

	January 2, 2016
	Previously Reported		Adjustment			As Revised
Other long-term liabilities	$	12,809	$	4,946		$	17,755
Total equity		744,198		(4,946	)		739,252

5

A reconciliation of the effects of the adjustments to the previously reported statements of net income for the years ended January 2, 2016 and December 27, 2014 follows ($ in thousands, except per share amounts):

	Year Ended January 2, 2016							Year Ended December 27, 2014
	Previously Reported		Adjustment			As Revised		Previously Reported		Adjustment			As Revised
Income taxes	$	24,482	$	1,600		$	26,082	$	32,228	$	1,318		$	33,546
Net income		82,466		(1,600	)		80,866		99,418		(1,318	)		98,100
Net income per share - Basic	$	3.65	$	(0.07	)	$	3.58	$	4.41	$	(0.06	)	$	4.35
Net income per share - Diluted	$	3.63	$	(0.07	)	$	3.56	$	4.37	$	(0.05	)	$	4.32

A reconciliation of the effects of the adjustments to the previously reported statements of cash flows for the years ended January 2, 2016 and December 27, 2014 follows ($ in thousands):

	Year Ended January 2, 2016								Year Ended December 27, 2014
	Previously Reported			Adjustment			As Revised		Previously Reported			Adjustment			As Revised
Net income	$	82,466		$	(1,600	)	$	80,866	$	99,418		$	(1,318	)	$	98,100
Accrued taxes		(1,043	)		1,600			557		(549	)		1,318			769
Net cash provided by operating activities		165,826			—			165,826		153,141			—			153,141

A reconciliation of the effects of the adjustments to the previously reported statements of equity for the years ended January 2, 2016 and December 27, 2014 follows ($ in thousands):

	Year Ended January 2, 2016							Year Ended December 27, 2014
	Previously Reported		Adjustment			As Revised		Previously Reported		Adjustment			As Revised
Net income	$	82,466	$	(1,600	)	$	80,866	$	99,418	$	(1,318	)	$	98,100
Comprehensive income		57,921		(1,600	)		56,321		57,875		(1,318	)		56,557
Retained earnings		562,717		(4,946	)		557,771		523,302		(3,346	)		519,956
Total shareholders’ equity		744,198		(4,946	)		739,252		727,665		(3,346	)		724,319

A reconciliation of the effects of the adjustments to the previously reported statement of equity at December 28, 2013 follows ($ in thousands):

	December 28, 2013
	Previously Reported		Adjustment			As Revised
Retained earnings	$	445,059	$	(2,028	)	$	443,031
Total shareholders’ equity		686,916		(2,028	)		684,888

6

3. Reclassifications

Certain amounts presented in the 2015 financial statements have been reclassified to conform to the 2016 presentation. In April 2015, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”)No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The amended guidance is effective for financial statements issued for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amended guidance is to be applied on a retrospective basis. The company adopted the new guidance on January 3, 2016 and has made the corresponding reclassification on its balance sheet for the fiscal year ended January 2, 2016. The adoption of the new guidance had no effect on the company’s net income, cash flows or shareholders’ equity. Additionally, the company has reclassified a portion of its current tax position at January 2, 2016 to more accurately reflect its prepaid/liability position at a jurisdictional level.

4. Acquisition of Businesses

TVS Diode/Thyristor/IGBT business

On August 29, 2016, the company acquired certain assets of select businesses (the “TVS Diode/Thyristor/IGBT business”) of ON Semiconductor Corporation for $104.0 million. The company funded the acquisition with available cash and proceeds from its credit facility. The acquired business, which is included in the Electronics segment, consists of a product portfolio that includes transient voltage suppression (TVS) diodes, switching thyristors and insulated gate bipolar transistors (IGBT) for automotive ignition applications. The acquisition expands the company’s offerings in power semiconductor applications as well as increases its presence in the automotive electronics market. The TVS Diode/Thyristor/IGBT business products have strong synergies with the company’s existing circuit protection business, will strengthen its channel partnerships and customer engagement, and expand its power semiconductor portfolio.

The following table represents the preliminary allocation of the total consideration to assets acquired and liabilities assumed in the acquisition of the TVS Diode/Thyristor/IGBT business based on the company’s preliminary estimate of their respective fair values at the acquisition date (in thousands):

Total purchase consideration:
Cash	$	104,000
Preliminary allocation of consideration to assets acquired and liabilities assumed:
Current assets, net		4,616
Customer relationships		31,650
Patented and unpatented technologies		10,250
Non-compete agreement		2,500
Goodwill		54,984
	$	104,000

All the TVS Diode/Thyristor/IGBT business goodwill and other assets were recorded in the Electronics segment and are reflected in the Americas and Europe geographic areas. The customer relationships are preliminarily being amortized over 13.5 years. The patented and unpatented technologies are preliminarily being amortized over 6-8.5 years. The non-compete agreement is preliminarily being amortized over 4 years. The goodwill resulting from this acquisition consists largely of the company’s expected future product sales and synergies from combining the TVS Diode/Thyristor/IGBT business products with the company’s existing power semiconductor product portfolio. A portion of goodwill for the above acquisition is expected to be deductible for tax purposes.

As required by purchase accounting rules, the company recorded a $0.5 million step-up of inventory to its fair value as of the acquisition date based on the preliminary valuation. $0.3 million of the step-up was amortized as a non-cash charge to cost of goods sold during the third quarter of 2016, as the acquired inventory was sold, and reflected as other non-segment costs.

7

Included in the company’s consolidated statements of net income for the three and nine months ended October 1, 2016 are net sales of approximately $5.6 million and $5.6 million, respectively, since the August 29, 2016 acquisition of the TVS Diode/Thyristor/IGBT business.

Menber’s

On April 4, 2016, the company completed the acquisition of Menber’s S.p.A. (“Menber’s”) headquartered in Legnago, Italy for $19.2 million, net of acquired cash and after settlement of a working capital adjustment. At October 1, 2016, $18.9 million of the $19.2 million purchase price has been paid and financed through a mixture of cash on hand and borrowings under the company’s revolving credit facility, with the remaining consideration expected to be paid out in the remainder of 2016. The acquired business is part of the company's commercial vehicle product business within the Automotive segment and specializes in the design, manufacturing and selling of manual and electrical high current switches and trailer connectors for commercial vehicles.

The following table represents the preliminary allocation of the total consideration to assets acquired and liabilities assumed in the acquisition of Menber’s based on the company’s preliminary estimate of their respective fair values at the acquisition date (in thousands):

Total purchase consideration:
Cash, net of acquired cash	$	18,909
Additional consideration payable		253
Total purchase consideration	$	19,162
Preliminary allocation of consideration to assets acquired and liabilities assumed:
Current assets, net	$	13,560
Property, plant and equipment		1,693
Customer relationships		3,050
Patented and unpatented technologies		224
Trademarks and tradenames		1,849
Goodwill		7,651
Current liabilities		(7,421	)
Other non-current liabilities		(1,444	)
	$	19,162

All Menber’s goodwill and other assets and liabilities were recorded in the Automotive segment and reflected in the Europe geographic area. The customer relationships are being amortized over 10 years. The patented and unpatented technologies are being amortized over 5 years. The trademarks and tradenames are being amortized over 10 years. The goodwill resulting from this acquisition consists largely of the company’s expected future product sales and synergies from combining Menber’s products with the company’s existing automotive product portfolio. Goodwill for the above acquisition is not expected to be deductible for tax purposes.

As required by purchase accounting rules, the company recorded a $0.2 million step-up of inventory to its fair value as of the acquisition date based on the preliminary valuation. The step-up was amortized as a non-cash charge to cost of goods sold during the third quarter of 2016 with the charge reflected as other non-segment costs.

Included in the company’s consolidated statements of net income for the three and nine months ended October 1, 2016 are net sales of approximately $5.3 million and $12.0 million, respectively, since the April 4, 2016 acquisition of Menber’s.

8

PolySwitch

On March 25, 2016, the company acquired 100% of the circuit protection business (“PolySwitch”) of TE Connectivity Ltd. for $348.0 million, net of acquired cash and after settlement of certain post-closing adjustments. At October 1, 2016, $342.3 million of the $348.0 million purchase price has been paid and financed through a mixture of cash on hand and borrowings under the company’s revolving credit facility, with the remaining consideration expected to be paid by the 2^nd quarter of 2017. The PolySwitch business, which is split between the Automotive and Electronics segments, has a leading position in polymer based resettable circuit protection devices, with a strong global presence in the automotive, battery, industrial, communications and mobile computing markets. PolySwitch has operations in Menlo Park, California and manufacturing facilities in Shanghai and Kunshan, China and Tsukuba, Japan. The acquisition allows the company to strengthen its global circuit protection product portfolio, as well as strengthen its presence in the automotive electronics and battery end markets. The acquisition also significantly increases the company’s presence in Japan. The company funded the acquisition with available cash and proceeds from a new credit facility.

The following table represents the preliminary allocation of the total consideration to assets acquired and liabilities assumed in the acquisition of PolySwitch based on the company’s preliminary estimate of their respective fair values at the acquisition date (in thousands):

Total purchase consideration:
Original consideration	$	350,000
Post closing consideration adjustment received		(2,029	)
Acquired cash		(5,719	)
Acquired cash to be returned to seller		5,719
Total purchase consideration	$	347,971
Preliminary allocation of consideration to assets acquired and liabilities assumed:
Current assets, net	$	59,751
Property, plant and equipment		52,025
Land lease		4,290
Patented and unpatented technologies		56,425
Customer relationships		39,720
Goodwill		163,635
Other long-term assets		10,711
Current liabilities		(37,068	)
Other non-current liabilities		(1,518	)
	$	347,971

All PolySwitch goodwill and other assets and liabilities were recorded in the Automotive and Electronics segments and reflected in all geographic areas. The customer relationships are being amortized over 15 years. The patented and unpatented technologies are being amortized over 10 years. The goodwill resulting from this acquisition consists largely of the company’s expected future product sales and synergies from combining PolySwitch products with the company’s existing automotive and electronics product portfolio. A portion of the goodwill for the above acquisition is expected to be deductible for tax purposes.

As required by purchase accounting rules, the company recorded a $6.9 million step-up of inventory to its fair value as of the acquisition date based on the preliminary valuation. The step-up was amortized as a non-cash charge to cost of goods sold during the second quarter of 2016, as the acquired inventory was sold, and reflected as other non-segment costs.

Included in the company’s consolidated statements of net income for the three and nine months ended October 1, 2016 are net sales of approximately $47.9 million and $84.4 million, respectively, since the March 25, 2016 acquisition of PolySwitch.

9

Sigmar S.r.l

On October 1, 2015, the company acquired 100% of Sigmar S.r.l. (“Sigmar”). The total purchase price for Sigmar is expected to be $6.7 million, net of cash acquired and including: (1) additional consideration of $1.0 million paid in the first nine months of 2016 relating to certain working capital related adjustments and an earn-out clause payment; and (2) estimated additional net payments of up to $0.9 million, a portion of which is subject to the achievement of certain milestones.

Located in Ozegna, Italy, Sigmar is a leading global manufacturer of water-in-fuel sensors and also manufactures selective catalytic reduction (SCR) quality sensors and diesel fuel heaters for automotive and commercial vehicle applications. The acquisition further expanded the company’s automotive sensor product line offerings within its Automotive segment. The company funded the acquisition with available cash.

The following table sets forth the preliminary purchase price allocation for Sigmar acquisition-date net assets, in accordance with the purchase method of accounting with adjustments to record the acquired net assets at their estimated fair values (in thousands):

Total purchase consideration:
Cash	$	5,788
Estimated additional consideration payable		901
Total purchase consideration	$	6,689
Preliminary allocation of consideration to assets acquired and liabilities assumed:
Cash	$	230
Current assets, net		4,011
Property, plant and equipment		1,097
Goodwill		2,552
Patents		2,845
Current liabilities		(1,478	)
Other non-current liabilities		(2,568	)
	$	6,689

All Sigmar goodwill and other assets and liabilities were recorded in the Automotive segment and reflected in the Europe geographic area. The patents are being amortized over 10 years. The goodwill resulting from this acquisition consists largely of the company’s expected future product sales and synergies from combining Sigmar’s products with the company’s existing automotive product offerings. Goodwill for the above acquisition is not expected to be deductible for tax purposes.

Pro Forma Results

The following table summarizes, on a pro forma basis, the combined results of operations of the company and the acquired PolySwitch and the TVS Diode/Thyristor/IGBT businesses as though the acquisitions had occurred as of December 28, 2014. The company has not provided pro forma results of operations for Menber’s or Sigmar as these results were not material to the company. The pro forma amounts presented are not necessarily indicative of either the actual consolidated results had the PolySwitch or TVS Diode/Thyristor/IGBT acquisitions occurred as of December 28, 2014 or of future consolidated operating results.

	For the Three Months Ended				For the Nine Months Ended
(in thousands, except per share amounts)	October 1, 2016		September 26, 2015		October 1, 2016		September 26, 2015
Net sales	$	290,377	$	278,093	$	846,127	$	834,372
Income before income taxes		32,728		17,823		110,853		88,124
Net income		33,086		6,324		96,713		69,110
Net income per share — basic		1.47		0.28		4.30		3.05
Net income per share — diluted		1.46		0.28		4.26		3.04

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Pro forma results presented above primarily reflect: (1) incremental depreciation relating to fair value adjustments to property, plant and equipment; (2) amortization adjustments relating to fair value estimates of intangible assets; (3) incremental interest expense on assumed indebtedness; and (4) additional cost of goods sold relating to the capitalization of gross profit as part of purchase accounting recognized for purposes of the pro forma as if it was recognized during the company’s first quarter of 2015. Pro forma adjustments described above have been tax affected using the company's effective rate during the respective periods.

The historical PolySwitch and TVS Diode/Thyristor/IGBT business results for the three and nine months ended October 1, 2016 and September 26, 2015 do not include a provision for income taxes. Income tax expense for the historical PolySwitch business was only provided at the end of the business’s fiscal year ended September 25, 2015. Income tax expense for the historical TVS Diode/Thyristor/IGBT business was not provided on a standalone basis.

5. Impairment of Goodwill and Intangible Assets

The company annually tests goodwill for impairment during its fiscal fourth quarter or at an interim date if there is an event or change in circumstances that indicates the asset may be impaired. As of the most recent annual test conducted, the company concluded the fair value of its custom products reporting unit exceeded its carrying value of invested capital by 12% and therefore, no potential goodwill impairment existed in 2015.

Due to recent negative events in the potash market subsequent to the company’s 2016 second quarter end, the company conducted a step one goodwill impairment analysis for the custom products reporting unit to determine if goodwill was impaired as of July 2, 2016. The fair value of this reporting unit at this date exceeded its carrying value by less than 10%.  Since then, the potash market has continued to see a decline in market pricing in the potash mining industry. Due to this continuing decline in potash pricing, management revisited its long term projections during the company’s third quarter 2016 and conducted another step one goodwill impairment analysis. The custom products reporting unit failed the step one test and management conducted a step two analysis with the revised projections. The fair value of the unit was estimated using the expected present value of future cash flows over a seven year forecast period and appraisal of certain assets. This analysis required a write down of the reporting unit’s carrying value of $14.8 million. A goodwill impairment loss of $8.8 million and intangible assets impairments aggregating $6.0 million were recognized during the third quarter, including a $3.8 million reduction of the custom products trade names to a $0.7 million remaining value and a $2.2 million reduction of the reporting unit’s customer relationships to zero value.

6. Inventories

The components of inventories at October 1, 2016 and January 2, 2016 are as follows (in thousands):

	October 1, 2016		January 2, 2016
Raw material	$	35,450	$	33,599
Work in process		24,703		16,479
Finished goods		61,463		48,551
Total inventories	$	121,616	$	98,629

7. Investments

The company’s investments represent shares of Polytronics Technology Corporation Ltd. (“Polytronics”), a Taiwanese company, and shares of Monolith Semiconductor, Inc. (“Monolith”), a Texas-based start-up company.

Polytronics

The Polytronics investment was acquired as part of the Littelfuse GmbH acquisition. The fair value of the Polytronics investment was €10.2 million (approximately $11.5 million) at October 1, 2016 and €10.7 million (approximately $11.7 million) at January 2, 2016. Included in 2016 other comprehensive income is an unrealized loss of $0.6 million, due to the decrease in fair market value of the Polytronics investment. The remaining change in the recorded value was due to the impact of changes in exchange rates.

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Monolith

In December 2015, the company invested $3.5 million in the preferred stock of Monolith, a U.S. start-up company developing silicon carbide technology, which represents approximately 12% of the common stock of Monolith on an as-converted basis. The company accounts for its investment in Monolith under the cost method. The carrying value of the Monolith investment was $3.5 million at October 1, 2016 and January 2, 2016.

8. Debt

The carrying amounts of debt at October 1, 2016 and January 2, 2016 are as follows (in thousands):

	October 1, 2016			January 2, 2016
Revolving credit facility	$	315,500		$	77,000
Term loan		121,875			85,000
Entrusted loan		5,173			9,474
Unamortized debt issuance costs		(2,092	)		(721	)
Total debt		440,456			170,753
Less: Current maturities		(6,250	)		(87,000	)
Total long-term debt	$	434,206		$	83,753

Revolving Credit Facility / Term Loan

On March 4, 2016, the company entered into a new credit agreement with Bank of America, as agent, for up to $700.0 million which consists of an unsecured revolving credit facility of $575.0 million and an unsecured term loan credit facility of up to $125.0 million. The new credit agreement is for a five year period. The new credit agreement replaced the company’s previous credit agreement dated May 31, 2013, which was terminated on March 4, 2016. As of October 1, 2016, the company had $0.1 million outstanding in letters of credit and had available $259.4 million of borrowing capacity under the revolving credit facility at an interest rate of LIBOR plus 1.5% (2.03% as of October 1, 2016). At October 1, 2016, the company was in compliance with all covenants under the credit agreement.

Entrusted Loan

During 2014, the company entered into an entrusted loan arrangement (“Entrusted Loan”) of RMB 110.0 million (approximately $17.9 million) between two of its China legal entities, Littelfuse Semiconductor (Wuxi) Company (the “lender”) and Suzhou Littelfuse OVS Ltd. (the “borrower”), utilizing Bank of America, N.A., Shanghai Branch as agent. Direct borrowing and lending between two commonly owned commercial entities was strictly forbidden at the time under China’s regulations requiring the use of a third party agent to enable loans between Chinese legal entities. As a result, the Entrusted Loan is reflected as both a long-term asset and long-term debt on the company’s Consolidated Balance Sheets and is reflected in the investing and financing activities in its Consolidated Statements of Cash Flows. Interest expense and interest income will be recorded between the lender and borrower with no net impact on the company’s Consolidated Statements of Income since the amounts will be offsetting. The loan interest rate per annum is 5.25%. The Entrusted Loan is used to finance the operation and working capital needs of the borrower and matures in November 2019. The balance of the Entrusted Loan was RMB 34.5 million (approximately $5.2 million) at October 1, 2016.

Debt Issuance Costs

The company incurred debt issuance costs of $1.7 million in relation to the new credit agreement which, along with the remaining balance of debt issuance costs of the previous credit facility, are being amortized over the life of the new credit agreement. This new credit agreement was determined to be a modification under ASC 470-50 of the previous credit agreement.

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In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The company adopted this guidance in the first quarter of 2016, on a retrospective basis, and has reclassified the unamortized debt issuance costs into long-term debt as shown in the table above.

9. Fair Value of Assets and Liabilities

In determining fair value, the company uses various valuation approaches within the fair value measurement framework. Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability.

Applicable accounting literature establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Applicable accounting literature defines levels within the hierarchy based on the reliability of inputs as follows:

Level 1—Valuations based on unadjusted quoted prices for identical assets or liabilities in active markets;

Level 2—Valuations based on quoted prices for similar assets or liabilities or identical assets or liabilities in less active markets, such as dealer or broker markets; and

Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable, such as pricing models, discounted cash flow models and similar techniques not based on market, exchange, dealer or broker-traded transactions.

Following is a description of the valuation methodologies used for instruments measured at fair value and their classification in the valuation hierarchy.

Investments

The company holds an investment in the equity securities of Polytronics as described in Note 7. Equity securities listed on a national market or exchange, such as Polytronics securities, are valued at the last sales price. Such securities are classified within Level 1 of the valuation hierarchy. The company also holds an investment in Monolith as described in Note 7 for which the value of the $3.5 million represents the cost of the investment.

There were no changes during the quarter ended October 1, 2016 to the company’s valuation techniques used to measure asset and liability fair values on a recurring basis. As of October 1, 2016 and January 2, 2016, the company held no non-financial assets or liabilities that are required to be measured at fair value on a recurring basis.

The following table presents assets measured at fair value by classification within the fair value hierarchy as of October 1, 2016 (in thousands):

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investment in Polytronics	$	11,474	$	—	$	—	$	11,474
Total	$	11,474	$	—	$	—	$	11,474

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The following table presents assets measured at fair value by classification within the fair value hierarchy as of January 2, 2016 (in thousands):

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investment in Polytronics	$	11,697	$	—	$	—	$	11,697
Total	$	11,697	$	—	$	—	$	11,697

The company’s other financial instruments include cash and cash equivalents, short-term investments, accounts receivable, accounts payable and debt. The carrying amounts of cash and cash equivalents, short-term investments, accounts receivable, accounts payable and debt approximate their fair values. The company’s debt fair value approximates book value at October 1, 2016 and January 2, 2016, respectively, as the variable interest rates fluctuate along with market interest rates.

10. Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share for the periods ending October 1, 2016 and September 26, 2015 (in thousands, except per share amounts):

	For the Three Months Ended				For the Nine Months Ended
	October 1, 2016		September 26, 2015		October 1, 2016		September 26, 2015
Net income	$	30.802	$	11,324	$	77,243	$	60,003
Average shares outstanding - Basic		22,578		22,581		22,515		22,623
Net effect of dilutive stock options and restricted share units		156		112		160		148
Average shares - Diluted		22,734		22,693		22,675		22,771
Net income per share:
Basic	$	1.36	$	0.50	$	3.43	$	2.65
Diluted	$	1.35	$	0.50	$	3.41	$	2.64

Potential shares of common stock relating to stock options excluded from the earnings per share calculation because their effect would be anti-dilutive were 76,845 and 144,031 for the three months ended October 1, 2016 and September 26, 2015, respectively, and 45,591 and 108,193 for the nine months ended October 1, 2016 and September 26, 2015, respectively.

11. Income Taxes

The effective tax rate for the third quarter of 2016 was negative 1.2% compared to an effective tax rate of 10.4% in the third quarter of 2015. The effective tax rate for the nine months ended October 1, 2016 was 15.6% compared to an effective tax rate of 21.8% for the nine months ended September 26, 2015. The effective tax rates for the periods presented are lower than the U.S. statutory tax rate primarily due to income earned in lower tax jurisdictions and, with respect to the 2016 periods, a one-time deduction with respect to the stock of one of the company’s affiliates partially offset by the impact of the impairment of goodwill for which no tax benefit was recorded, and, with respect to the 2015 periods, the impact of a pension settlement partially offset by the impact from the restructuring of the legal ownership of the company’s Mexican manufacturing operations.

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12. Pensions

The components of net periodic benefit cost for the three and nine months ended October 1, 2016, compared with the three and nine months ended September 26, 2015, were (in thousands):

	U.S. Pension Benefits										Foreign Plans
	Three Months Ended					Nine Months Ended					Three Months Ended						Nine Months Ended
	October 1, 2016		September 26, 2015			October 1, 2016		September 26, 2015			October 1, 2016			September 26, 2015			October 1, 2016			September 26, 2015
Service cost	$	-	$	250		$	-	$	750		$	332		$	314		$	997		$	944
Interest cost		-		1,032			-		3,094			496			512			1,489			1,538
Expected return on plan assets		-		(917	)		-		(2,749	)		(520	)		(599	)		(1,560	)		(1,800	)
Amortization of net loss		-		290			-		870			74			62			220			185
Total cost (credit) of the plan		-		655			-		1,965			382			289			1,146			867
Expected plan participants’contribution		-		-			-		-			-			-			-			-
Net periodic benefit cost (credit)		-		655			-		1,965			382			289			1,146			867
Settlement charge		-		30,194			-		30,194			-			-			-			-
Total pension cost (credit)	$	-	$	30,849		$	-	$	32,159		$	382		$	289		$	1,146		$	867

* The U.S. pension plan was terminated effective July 30, 2014 and, following receipt of a favorable Letter of Determination from the IRS (dated April 14, 2015), all liabilities of the plan were settled during the third quarter of fiscal 2015.

The expected rate of return assumption on U.S. pension assets was 3.90% in 2015. The expected return on foreign pension assets is 4.95% and 5.39% in 2016 and 2015, respectively.

13. Segment and Geographic 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.

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Segment information for the three and nine months ended October 1, 2016 and September 26, 2015 are summarized as follows (in thousands):

	For the Three Months Ended						For the Nine Months Ended
	October 1, 2016			September 26, 2015			October 1, 2016			September 26, 2015
Net sales
Electronics	$	147,730		$	102,616		$	378,696		$	307,549
Automotive		106,341			81,475			309,644			251,464
Industrial		26,260			31,419			83,301			88,831
Total net sales	$	280,331		$	215,510		$	771,641		$	647,844
Depreciation and amortization
Electronics	$	7,694		$	5,811		$	20,783		$	17,384
Automotive		4,627			3,244			12,881			9,883
Industrial		1,733			1,260			4,561			3,839
Other(1)		(937	)		-			-			-
Total depreciation and amortization	$	13,117		$	10,315		$	38,225		$	31,106
Operating income (loss)
Electronics	$	34,571		$	20,923		$	82,246		$	61,755
Automotive		15,032			15,253			48,997			39,123
Industrial		57			5,781			3,758			13,220
Other(2)		(22,134	)		(33,373	)		(45,345	)		(39,795	)
Total operating income		27,526			8,584			89,656			74,303
Interest expense		2,571			922			6,286			3,021
Foreign exchange (gain) loss		(4,700	)		(3,549	)		(7,114	)		(1,724	)
Other (income) expense, net		(778	)		(1,430	)		(1,040	)		(3,758	)
Income before income taxes	$	30,433		$	12,641		$	91,524		$	76,764

(1) Consists of intangible impairments related to its loss on sale of product line now reflected in selling, general and administrative expenses for the nine months ended October 1, 2016. (See Note 15).

(2) Included in “Other” Operating income (loss) for the 2016 third quarter is $14.8 million (14.8 million year-to-date) of charges related to the impairment of the custom products reporting unit, $5.9 million ($18.2 million year-to-date) of acquisition and integration costs associated with the company’s 2016 acquisitions, primarily PolySwitch, $0.6 million ($7.5 million year-to-date) of non-cash inventory charges relating to the company’s 2016 acquisitions, primarily PolySwitch, as described in Note 4, $1.9 million year-to-date in charges related to the closure of the company’s manufacturing facility in Denmark, $1.7 million year-to-date related to the company’s transfer of its reed sensor manufacturing operations from the U.S. and China to the Philippines and $0.9 million ($1.3 million year-to-date) related to internal legal restructuring costs.

Included in “Other” Operating income (loss) for the 2015 third quarter is $2.1 million ($6.8 million year-to-date) related to internal legal restructuring, $0.3 million ($0.7 million year-to-date) related to acquisition costs and $30.9 million ($32.2 million year-to-date) of expense related to the planned termination of the U.S. pension as described in Note 12.

The company’s significant net sales by country for the three and nine months ended October 1, 2016 and September 26, 2015 are summarized as follows (in thousands):

	For the Three Months Ended(a)				For the Nine Months Ended(a)
	October 1, 2016		September 26, 2015		October 1, 2016		September 26, 2015
United States	$	92,475	$	85,049	$	270,659	$	258,030
China		70,215		49,345		181,134		143,694
Other countries		117,641		81,116		319,848		246,120
Total	$	280,331	$	215,510	$	771,641	$	647,844

(a) Sales by country represent sales to customer or distributor locations.

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The company’s significant long-lived assets by country as of October 1, 2016 and January 2, 2016 are summarized as follows (in thousands):

	Long-lived assets(b)
	October 1, 2016		January 2, 2016
United States	$	24,578	$	23,965
China		67,003		37,241
Mexico		51,988		47,130
Philippines		34,511		33,525
Other countries		45,773		20,707
Total	$	223,853	$	162,568

(b) Long-lived assets consist of net property, plant and equipment.

14. Accumulated Other Comprehensive Income (Loss) (AOCI)

The following table sets forth the changes in the components of AOCI by component (in thousands):

AOCI component	Balance at January 2, 2016			Other comprehensive income (loss) activity			Reclassification adjustment for expense included in net income		Balance at October 1, 2016
Pension and post employment liability and reclassification adjustments(a)	$	(8,722	)	$	(183	)	$	212	$	(8,693	)
Unrealized gain on investments(b)		11,584			(559	)		—		11,025
Foreign currency translation adjustment		(48,533	)		(8,951	)		—		(57,484	)
AOCI (loss) income	$	(45,671	)	$	(9,693	)	$	212	$	(55,152	)

(a) Balances are net of tax of $661 and $1,056 for January 2, 2016 and October 1, 2016, respectively.

(b) Balances are net of tax of $0 and $0 for January 2, 2016 and October 1, 2016, respectively.

15. Product Line Sale

During the first quarter of 2016, the company sold its tangible and intangible assets relating to a marine product line that it acquired as part of its acquisition of Selco A/S in 2011. In connection with this sale, the company recorded a loss on sale of the product line of $1.4 million reflected within selling, general and administrative expenses for the nine months ended October 1, 2016. This loss was recognized as an “other” charge for segment reporting purposes.

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16. Recently issued accounting pronouncements

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 ("ASU 2014-09"), Revenue from Contracts with Customers, which amends guidance for revenue recognition. Under the new standard, revenue will be recognized when control of the promised goods or services is transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services. The standard creates a five-step model that will generally require companies to use more judgment and make more estimates than under current guidance when considering the terms of contracts along with all relevant facts and circumstances. These include the identification of customer contracts and separating performance obligations, the determination of transaction price that potentially includes an estimate of variable consideration, allocating the transaction price to each separate performance obligation, and recognizing revenue in line with the pattern of transfer. In August 2015, the FASB issued an No. 2015-14, "Deferral of Effective Date" (Topic 606) to defer the effective date for all entities by one year. The new standard will become effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted as of annual reporting periods beginning after December 15, 2016. Companies have the option of using either a full or modified retrospective approach in applying this standard. In March 2016, the FASB issued ASU No. 2016-08, "Principal versus Agent Considerations (Reporting Revenue Gross versus Net)" (Topic 606). ASU 2016-08 provides clarification for the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10, ASU No. 2016-11, and ASU 2016-12, all of which provide additional clarification of the original revenue standard. The company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.

In July 2015, the FASB issued Accounting Standards Update No. 2015-11 ("ASU 2015-11"), Simplifying the Measurement of Inventory. ASU 2015-11 clarifies that inventory should be held at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price, less the estimated costs to complete, dispose and transport such inventory. ASU 2015-11 will be effective for fiscal years and interim periods beginning after December 15, 2016. ASU 2015-11 is required to be applied prospectively and early adoption is permitted. The company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (“ASU 2016-02”), Leases (Topic 842). ASU 2016-02 establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for capital leases and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09 ("ASU 2016-09"), Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 will directly impact the tax administration of equity plans. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted and any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.

17. Subsequent Event

On October 14, 2016, the Company completed the sale of its portable electrical house (e-house) business, located in Winnipeg, Manitoba, Canada. This business was included in the company’s custom products reporting unit within the Industrial segment, and mainly served mining and utility markets. Neither the sale nor the historical results of operation of the sold business are material to the company’s financial results.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Cautionary Statement Regarding Forward-Looking Statements Under the Private Securities Litigation Reform Act of 1995 (“PSLRA”).

Certain statements in this section and other parts of this Quarterly Report on Form 10-Q may constitute "forward-looking statements" within the meaning of the federal securities laws and are entitled to the safe-harbor provisions of the PSLRA.  These statements include statements regarding the company’s future performance, as well as management's expectations, beliefs, intentions, plans, estimates or projections relating to the future.  Such statements can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "estimates," "will," "should," "plans" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy, although not all forward-looking statements contain such terms.  The company cautions that forward-looking statements, which speak only as of the date they are made, are subject to risks, uncertainties and other factors, and actual results and outcomes may differ materially from those indicated or implied by the forward-looking statements.  These risks, uncertainties and other factors include, but  are not limited to, risks relating to product demand and market acceptance, economic conditions, the impact of competitive  products and pricing, product quality problems or product recalls, capacity and supply difficulties or constraints, coal mining  exposures reserves, failure of an indemnification for environmental liability, exchange rate fluctuations, commodity price fluctuations, the effect of the company's accounting policies, labor disputes, restructuring costs in excess of expectations,  pension plan asset returns less than assumed, integration of acquisitions and other risks which may be detailed in the  company's other Securities and Exchange Commission filings, including those set forth under  Item 1A. "Risk Factors" of the company's Annual Report on Form 10-K for the year ended January 2, 2016.  The company does not undertake any obligation to update or revise any forward-looking statements to reflect future events or circumstances, new information or otherwise. 

This report, including the Management’s Discussion and Analysis of Financial Condition and Results of Operations,  should be read in conjunction with information provided in the financial statements and the related Notes thereto appearing in the company's Annual Report on Form 10-K for the year ended January 2, 2016. 

Littelfuse Overview

Littelfuse, Inc. and its subsidiaries (the “company” or “Littelfuse”) is the worldwide leader in circuit protection offering the industry's broadest and deepest portfolio of circuit protection products and solutions. The company’s devices protect products in virtually every market that uses electrical energy, from consumer electronics to automobiles to industrial equipment. The company’s worldwide revenue in 2015 was $867.9 million and net earnings were $82.5 million. The company conducts its business through three reportable segments, which are defined by markets and consist of Electronics, Automotive, and Industrial. The company’s customer base includes original equipment manufacturers, tier one automotive suppliers and distributors.

In addition to protecting and growing its core circuit protection business, Littelfuse has been expanding its portfolio in power control and sensing technologies. These platforms, combined with the company’s strong balance sheet and operating cash flow, provide opportunities for increased organic and acquisition growth. In 2012, the company set a five-year strategic plan to grow annual sales at 15% per year; 5% organically and 10% through acquisitions.

To maximize shareholder value, the company’s primary strategic goals are to:

● Grow organically faster than its markets;

● Double the pace of acquisitions;

● Sustain high-teens operating margins;

● Improve return on investment; and

● Return excess cash to shareholders.

The company serves markets that are directly impacted by global economic trends with significant exposures to the consumer electronics, automotive, industrial and mining end markets. The company’s results will be impacted positively or negatively by changes in these end markets.

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Electronics Segment

The Electronics segment sells passive and semiconductor components and modules as well as sensors primarily into the global consumer electronics, general industrial and telecommunications markets. The core electronics markets are characterized by significant Asia-Pacific competition and price erosion. As a result the company is focusing additional efforts on higher growth, less price sensitive niche markets (such as LED lighting) and higher-power industrial applications. The PolySwitch business acquisition in 2016 has expanded the company’s product offering used in a wide variety of electronic products and utilizes many of the same distribution channels as the company’s legacy electronics products. On August 29, 2016, the company completed the acquisition of the TVS Diode/Thyristor/IGBT business from ON Semiconductor Corporation. This business is complimentary to and will further expand the semiconductor markets that the segment serves.

Automotive Segment

The Automotive segment is comprised of passenger vehicle circuit protection, commercial vehicle products and sensors. The primary growth drivers for these businesses are increasing global demand for passenger and commercial vehicles and increasing content per vehicle for both circuit protection and sensing products. The move away from internal combustion engines to hybrid and electric drive systems that require more circuit protection continues to be an additional growth driver. The PolySwitch business acquisition in 2016 has added to the company’s strong global presence in the automotive market. The acquisition of Menber’s further strengthens the company’s position in electrical high current switches and connectors for the commercial vehicle market.

Industrial Segment

The Industrial segment derives its revenues from power fuses, protection relays and custom products selling primarily into the industrial, mining, solar and oil and gas markets. Protection relay sales have declined due to the general slowdown in the global mining and oil and gas markets. Custom products sales have declined significantly over the past two years due to continued end market softness in the potash mining market. The potash market has recently experienced a steep decline in market pricing and consolidation. Due to negative events in the potash market subsequent to the company’s 2016 second quarter end, the company conducted a step one goodwill impairment analysis for the custom products reporting unit to determine if goodwill was impaired as of July 2, 2016. The fair value of this reporting unit at this date exceeded its carrying value by less than 10%.  Since then, the potash market has continued to see a decline in market pricing in the potash mining industry. Due to this continuing decline in potash pricing, management revisited its long term projections during the company’s third quarter 2016 and conducted another step one goodwill impairment analysis. Based on the revised projections, the custom products reporting unit failed. As required by GAAP, management conducted a step two analysis which indicated a write down of the reporting unit’s carrying value by $14.8 million, with $8.8 million from goodwill and $6.0 million from intangible assets.

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The following table is a summary of the company’s net sales by business unit and geography:

Net Sales by Business Unit and Geography (in thousands, unaudited)

	Third Quarter							First Nine Months
	2016		2015		% Change			2016		2015		% Change
Business Unit
Electronics	$	147,730	$	102,616		44	%	$	378,696	$	307,549		23	%
Automotive		106,341		81,475		31	%		309,644		251,464		23	%
Industrial		26,260		31,419		(16%	)		83,301		88,831		(6%	)
Total	$	280,331	$	215,510		30	%	$	771,641	$	647,844		19	%
Geography(a)
Americas	$	106,112	$	98,974		7	%	$	313,231	$	299,061		5	%
Europe		52,200		37,520		39	%		149,417		115,613		29	%
Asia-Pacific		122,019		79,016		54	%		308,993		233,170		33	%
Total	$	280,331	$	215,510		30	%	$	771,641	$	647,844		19	%

(a) Sales by geography represent sales to customer or distributor locations.

The following table summarizes the company’s consolidated results of operations for the periods presented. The quarter of 2016 includes approximately $22.1 million ($45.3 million year-to-date) of other non-segment charges. These included $14.8 million (14.8 million year-to-date) of charges related to the impairment of the custom products reporting unit, $5.9 million ($18.2 million year-to-date) of acquisition and integration costs associated with the company’s 2016 acquisitions, primarily PolySwitch, $0.6 million ($7.5 million year-to-date) of non-cash inventory charges relating to the company’s 2016 acquisitions, primarily PolySwitch, as described in Note 4, $1.9 million year-to-date in charges related to the closure of the company’s manufacturing facility in Denmark, $1.7 million year-to-date related to the company’s transfer of its reed sensor manufacturing operations from the U.S. and China to the Philippines and $0.9 million ($1.3 million year-to-date) related to internal legal restructuring costs.

The third quarter of 2015 includes approximately $33.4 million ($39.8 million year-to-date) of other non-segment charges. These included $2.1 million ($6.8 million year-to-date) related to internal legal restructuring, $0.3 million ($0.7 million year-to-date) related to acquisition costs and $30.9 million ($32.2 million year-to-date) of expense related to the planned termination of the U.S. pension as described in Note 12.

(In thousands, unaudited)	Third Quarter									First Nine Months
	2016			2015			% Change			2016			2015			% Change
Sales	$	280,331		$	215,510			30	%	$	771,641		$	647,844			19	%
Gross profit		113,759			86,182			32	%		298,780			247,793			21	%
Operating expense		86,233			77,598			11	%		209,124			173,490			21	%
Operating income		27,526			8,584			221	%		89,656			74,303			21	%
Interest expense		2,571			922			179	%		6,286			3,021			108	%
Foreign exchange (gain) loss		(4,700	)		(3,549	)		32	%		(7,114	)		(1,724	)		313	%
Other (income) expense, net		(778	)		(1,430	)		(46%	)		(1,040	)		(3,758	)		(72%	)
Income before income taxes		30,433			12,641			141	%		91,524			76,764			19	%
Net income	$	30,802		$	11,324			172	%	$	77,243		$	60,003			29	%

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Results of Operations – Third Quarter, 2016 compared to 2015

Consolidated net sales of $280.3 for the third quarter of 2016 increased $64.8 million, or 30%, compared to the prior year quarter, reflecting $59.6 million of revenues from businesses acquired over the previous twelve months as well as strong organic growth in the Automotive segment, partially offset by lower sales from the Industrial segment due to weaker end markets.

Electronics sales of $147.7 million for the third quarter of 2016 increased $45.1 million, or 44%, compared to the prior year quarter, reflecting $40.5 million of revenues from businesses acquired over the previous twelve months as well as organic growth in sensor, passive and semiconductor products. This segment continues to leverage the company’s technology expertise to design its products into a broad variety of end markets and market segments.

Automotive sales of $106.3 million for the third quarter of 2016 increased $24.9 million, or 31%, compared to the prior year quarter, reflecting. reflecting $19.1 million of revenues from businesses acquired over the previous twelve months as well as strong organic growth in passenger car products in North America and China, partially offset by lower sales of legacy commercial vehicle products, reflecting weakness in the North American heavy truck, construction and agricultural end markets.      

Industrial sales of $26.3 million of the third quarter of 2016 decreased $5.2 million, or 16%, to $26.3 million in the third quarter of 2016 compared to $31.4 million in the third quarter of 2015 primarily reflecting lower relay, fuse and custom product sales due to weakness in the solar, oil and gas and mining markets. The company’s fuse business has benefited from a strong U.S. solar market for a number of years, however this market slowed in the second half of 2016. As the U.S. Congress extended solar energy related tax credits late in 2015, many solar original equipment manufacturers delayed projects to focus on scale and efficiencies. Sales in both the protection relay and custom products businesses continued to be impacted by weakness in the heavy industrial markets, particularly mining, and oil and gas, as those customers restrict their capital spending. In the custom products business, the potash market has continued to see a decline in market pricing in the potash mining industry. As a result, the company has taken an impairment charge of $14.8 million with $8.8 million in goodwill and $6.0 million in intangible assets related to the custom business in this segment.

On a geographic basis, sales in the Americas increased $7.1 million, or 7%, to $106.1 million in the third quarter of 2016 compared to $99.0 million in the third quarter of 2015 primarily reflecting the addition of the PolySwitch and the TVS Diode/Thyristor/IGBT businesses in the current year and, to a lesser extent, increased Automotive segment sales, partially offset by lower Industrial segment sales.

Europe sales increased $14.7 million, or 39%, to $52.2 million in the third quarter of 2016 compared to $37.5 million in the third quarter of 2015 primarily due to strong sales of automotive sensor products, the addition of the businesses acquired in the previous twelve months, increased organic electronic sales and $0.1 million in favorable currency effects primarily from sales denominated in euro. Excluding currency effects, Europe sales increased $14.6 million, or 39%, year-over-year.

Asia-Pacific sales increased $43.0 million, or 54%, to $122.0 million in the third quarter of 2016 compared to $79.0 million in the third quarter of 2015 primarily reflecting the addition of the PolySwitch and the TVS Diode/Thyristor/IGBT businesses in the current year and increased demand for electronics and automotive products, partially offset by unfavorable currency effects of $0.9 million. Excluding currency effects, Asia-Pacific sales increased $43.9 million, or 56%, year-over-year.

Gross profit was $113.8 million, or 41% of net sales, for the third quarter of 2016 compared to $86.2 million, or 40% of net sales, in the same quarter last year. Gross profit for 2016 includes a $0.6 million inventory adjustment relating to the Menber’s and TVS Diode/Thyristor/IGBT business acquisitions and $0.2 million in charges related to restructuring in the relay business. Gross profit for 2015 included $1.2 million of charges related to the reed switch production transfer. Excluding the impact of these charges, gross profit was $114.2 million, or 41% of net sales, for the third quarter of 2016 compared to $87.4 million, or 41% of net sales, in the third quarter of 2015.

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Total operating expense was $86.2 million, or 31% of net sales, for the third quarter of 2016 compared to $77.6 million, or 36% of net sales, for the same quarter in 2015. Operating expense in 2016 included $5.9 million of acquisition and integration costs associated with the company’s 2016 acquisitions, primarily PolySwitch, $0.4 million related to restructuring in the relay and custom businesses, $14.8 million in charges related to the goodwill and intangible assets impairments in the custom business and $0.4 million in charges related to the Selco site closure. Operating expense in 2015 included $30.2 million related to settlement of the company’s U.S. pension plan. Excluding these charges, total operating expense was $64.7 million, or 23% of net sales, for 2016 compared to $47.4 million, or 22% of net sales, in 2015.

Due to the reasons noted above, operating income for the third quarter of 2016 was approximately $27.5 million compared to operating income of $8.6 million for the same quarter in 2015.

Interest expense was $2.6 million in the third quarter of 2016 as compared to $0.9 million in the third quarter of 2015, primarily reflecting higher borrowings relating to the March 2016 acquisition of the PolySwitch business.

Foreign exchange (gain) loss, reflecting net gains and losses resulting from the effect of exchange rate changes on various foreign currency transactions worldwide, was approximately $4.7 million of income for the third quarter of 2016 and $3.5 million of income for the third quarter of 2015 and primarily reflects fluctuations in the euro and Philippine peso against the U.S. dollar and the euro against the Japanese yen.

Other (income) expense, net, consisting of interest income, royalties and non-operating income items was approximately $0.8 million of income for the third quarter of 2016 and $1.4 million of income for the third quarter of 2015. The quarter over quarter decline primarily reflects lower interest income in the current year quarter due to cash used for the acquisition of the PolySwitch business in March 2016.

Income before income taxes was $30.4 million for the third quarter of 2016 compared to $12.6 million for the third quarter of 2015. Income tax benefit was $0.4 million with an effective tax rate of negative 1.2% for the third quarter of 2016 compared to income tax expense of $1.3 million with an effective tax rate of 10.4% in the third quarter of 2015. The effective tax rates for these quarterly periods are lower than the U.S. statutory tax rate primarily due to income earned in lower tax jurisdictions and, with respect to the 2016 period, a one-time deduction with respect to the stock of one of the company’s affiliates partially offset by the impact of the impairment of goodwill for which no tax benefit was recorded, and, with respect to the 2015 period, the impact of a pension settlement partially offset by the impact from the restructuring of the legal ownership of the company’s Mexican manufacturing operations.

Net income for the third quarter of 2016 was $30.8 million or $1.35 per diluted share compared to net income of $11.3 million or $0.50 per diluted share for the same quarter of 2015.

Results of Operations – Nine Months, 2016 compared to 2015

Consolidated net sales for the first nine months of 2016 of $771.6 million increased $123.8 million, or 19%, compared to the prior year period, reflecting $106.5 million of revenues from businesses acquired over the previous twelve months as well as strong organic growth in the Automotive segment and to a lesser extent organic growth in the Electronics segment.

Electronics sales of $378.7 million for the first nine months of 2016 increased $71.2 million, or 23%, compared to the prior year period, reflecting $64.7 million of revenues from businesses acquired over the previous twelve months as well as organic growth in sensor products and to a lesser extent passive and semiconductor products. The Electronics segment experienced $1.8 million in unfavorable currency effects in the first nine months of 2016 primarily from sales denominated in the renminbi and, to a lesser extent, sales denominated in the Korean won. Excluding currency effects, net sales excluding PolySwitch and TVS Diode/Thyristor/IGBT business, increased $8.2 million, or 3%, year-over-year.

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Automotive sales of $309.6 million for the first nine months of 2016 increased $58.2 million, or 23%, compared to the prior year period, reflecting. reflecting $41.8 million of revenues from businesses acquired over the previous twelve months as well as organic growth in sensor and passenger car products. These increases in sales were partially offset by lower sales of legacy commercial vehicle products, reflecting weakness in the North American heavy truck, construction and agricultural end markets. The Automotive segment experienced $2.5 million in unfavorable currency effects in the first nine months of 2016 primarily from sales denominated in the renminbi. Excluding currency effects, net sales increased $35.5 million, or 14%, year-over-year.

Industrial sales of $83.3 million for the first nine months of 2016 decreased $5.5 million, or 6%, to $83.3 million in the first nine months of 2016 compared to $88.8 million in the first nine months of 2015 primarily reflecting lower sales of relay and custom products. The company’s fuse business has benefited from a strong U.S. solar market for a number of years, however this market slowed in the second half of 2016. As the U.S. Congress extended solar energy related tax credits late in 2015, many solar original equipment manufacturers pushed out projects to focus on scale and efficiencies. Sales in both the protection relay and custom products businesses continued to be impacted by weakness in the heavy industrial markets, particularly mining, and oil and gas, as those customers restrict their capital spending. In the custom products business, the company continues to see a decline in its potash market, which has resulted in the aforementioned impairment charge.

On a geographic basis, sales in the Americas increased $14.2 million, or 5%, to $313.2 million in the first nine months of 2016 compared to $299.1 million in the first nine months of 2015 primarily reflecting the addition of the PolySwitch and TVS Diode/Thyristor/IGBT businesses in the current year and increased Electronics and Automotive segment sales, partially offset by lower Industrial segment sales.

Europe sales increased $33.8 million, or 29%, to $149.4 million in the first nine months of 2016 compared to $115.6 million in the first nine months of 2015 primarily reflecting the addition of the businesses acquired in the previous twelve months and increased automotive and electronic segment sales, partially offset by lower Industrial segment sales.

Asia-Pacific sales increased $75.8 million, or 33%, to $309.0 million in the first nine months of 2016 compared to $233.2 million in the first nine months of 2015 primarily reflecting the addition of the PolySwitch and the TVS Diode/Thyristor/IGBT businesses in the current year and increased demand for electronics and automotive products, partially offset by unfavorable currency effects of $3.9 million. Excluding currency effects, Asia-Pacific sales increased $79.8 million, or 34%, year-over-year.

Gross profit was $298.8 million, or 39% of net sales, for the first nine months of 2016 compared to $247.8 million, or 38% of net sales, in the same period last year. Gross profit for 2016 includes $7.5 million of non-cash inventory charges relating primarily to the PolySwitch acquisition and to a lesser extent the Menber’s and TVS Diode/Thyristor/IGBT business acquisitions, $1.5 million related to the transfer of the company’s reed switch production from the U.S. and China to the Philippines, $0.9 million of acquisition-related costs primarily related to integration costs associated with the company’s acquisition of the PolySwitch business, $0.1 million in charges related to the closure of the company’s manufacturing facility in Denmark and $0.1 million related to internal legal restructuring costs. Gross profit for 2015 included $3.1 million related to the reed switch production transfer. Excluding the impact of these charges, gross profit was $309.1 million, or 40% of net sales, for the first nine months of 2016 compared to $250.9 million, or 39% of net sales, in the first nine months of 2015.

Total operating expense was $209.1 million, or 27% of net sales, for the first nine months of 2016 compared to $173.5 million, or 27% of net sales, for the same period in 2015. Operating expense in 2016 included $17.3 million of acquisition and integration costs associated with the company’s 2016 acquisitions, primarily PolySwitch, $14.8 million in charges related to the goodwill and intangible asset impairments in the custom business, $0.4 million in charges related to the restructuring in the relay and custom businesses, the $1.8 million in charges related to the closure of the company’s manufacturing facility in Denmark, $0.3 million related to internal legal restructuring costs and $0.2 million related to the transfer of the company’s reed switch production from the U.S. and China to the Philippines. Operating expense in 2015 included $30.2 million related to the settlement of the company’s U.S. pension plan. Excluding these charges, total operating expense was $174.1 million, or 23% of net sales, for 2016 compared to $143.3 million, or 22% of net sales, in 2015, partially reflecting increased research and development expenses in the current year quarter as compared to the prior year quarter and incremental amortization of intangible assets associated with recent acquisitions.

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Operating income for the first nine months of 2016 was approximately $89.7 million compared to operating income of $74.3 million for the same period in 2015.

Interest expense was $6.3 million in the first nine months of 2016 as compared to $3.0 million in the first nine months of 2015, primarily reflecting higher borrowings relating to the March 2016 acquisition of the PolySwitch business.

Foreign exchange (gain) loss, reflecting net gains and losses resulting from the effect of exchange rate changes on various foreign currency transactions worldwide, was approximately $7.1 million of income for the first nine months of 2016 and $1.7 million of income for the first nine months of 2015 and primarily reflects fluctuations in the euro and Philippine peso against the U.S. dollar and the euro against the Japanese yen.

Other (income) expense, net, consisting of interest income, royalties and non-operating income items was approximately $1.0 million of income for first nine months of 2016 and $3.8 million of income for the first nine months of 2015. The period over period decline primarily reflects lower interest income in the current year period due to cash used for the acquisition of the PolySwitch business in March 2016.

Income before income taxes was $91.5 million for the first nine months of 2016 compared to $76.8 million for the first nine months of 2015. Income tax expense was $14.3 million with an effective tax rate of 15.6% for the first nine months of 2016 compared to income tax expense of $16.8 million with an effective tax rate of 21.8% in the first nine months of 2015. The effective tax rates for these nine month periods are lower than the U.S. statutory tax rate primarily due to income earned in lower tax jurisdictions and, with respect to the 2016 period, a one-time deduction with respect to the stock of one of the company’s affiliates partially offset by the impact of the impairment of goodwill for which no tax benefit was recorded, and, with respect to the 2015 period, the impact of a pension settlement partially offset by the impact from the restructuring of the legal ownership of the company’s Mexican manufacturing operations.

Net income for the first nine months of 2016 was $77.2 million or $3.41 per diluted share compared to net income of $60.0 million or $2.64 per diluted share for the same period of 2015.

Liquidity and Capital Resources 

As of October 1, 2016, $182.1 million of the $194.5 million of the company’s cash and cash equivalents was held by foreign subsidiaries. Of the $182.1 million held by foreign subsidiaries, approximately $19.7 million could be repatriated with minimal tax consequences. The company expects to maintain its foreign cash balances (other than the aforementioned $19.7 million) for local operating requirements, to provide funds for future capital expenditures and for potential acquisitions. The company does not expect to repatriate these funds to the U.S.

The company historically has financed capital expenditures through cash flows from operations. Management expects that cash flows from operations and available lines of credit will be sufficient to support both the company’s operations and its debt obligations for the foreseeable future.

Revolving Credit Facility/Term Loan

On March 4, 2016, the company entered into a new credit agreement with Bank of America, as agent, for up to $700.0 million which consists of an unsecured revolving credit facility of $575.0 million and an unsecured term loan credit facility of up to $125.0 million. The new credit agreement is for a five year period. The new credit agreement replaced the company’s previous credit agreement dated May 31, 2013, which was terminated on March 4, 2016. As of October 1, 2016, the company had available $259.4 million of borrowing capacity under the revolving credit facility at an interest rate of LIBOR plus 1.5% (2.03% as of October 1, 2016).

The company incurred debt issuance costs of $1.7 million in relation to the new credit agreement which along with the remaining balance of debt issuance costs of the previous credit facility, are being amortized over the life of the new credit agreement. This new credit agreement was determined to be a modification under ASC 470-50 of the previous credit agreement.

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This arrangement contains covenants that, among other matters, impose limitations on the incurrence of additional indebtedness, future mergers, sales of assets, payment of dividends, and changes in control, as defined in the agreement. In addition, the company is required to satisfy certain financial covenants and tests relating to, among other matters, interest coverage and leverage. At October 1, 2016, the company was in compliance with all covenants under the credit agreement.

The company also had $0.1 million outstanding in letters of credit at October 1, 2016. No amounts were drawn under these letters of credit at October 1, 2016.

Entrusted Loan

During the fourth quarter of 2014, the company entered into an entrusted loan arrangement (“Entrusted Loan”) of RMB 110.0 million (approximately $17.9 million) between two of its China legal entities, Littelfuse Semiconductor (Wuxi) Company (the “lender”) and Suzhou Littelfuse OVS Ltd. (the “borrower”), utilizing Bank of America, N.A., Shanghai Branch as agent. Direct borrowing and lending between two commonly owned commercial entities was strictly forbidden at the time under China’s regulations requiring the use of a third party agent to enable loans between Chinese legal entities. As a result, the Entrusted Loan is reflected as both a long-term asset and long-term debt on the company’s Consolidated Balance Sheets and is reflected in the investing and financing activities in its Consolidated Statements of Cash Flows. Interest expense and interest income is recorded between the lender and borrower with no net impact on the company’s Consolidated Statements of Net Income since the amounts will be offsetting. The loan interest rate per annum is 5.25%. The Entrusted Loan is used to finance the operation and working capital needs of the borrower and matures in November 2019. The balance of the Entrusted Loan was RMB 34.5 million (approximately $5.2 million) at October 1, 2016.

Stock Repurchase Program

The company’s Board of Directors authorized the repurchase of up to 1,000,000 shares of the company’s common stock under a program for the period May 1, 2016 to April 30, 2017. The company’s prior share repurchase authorization of 1,000,000 shares expired on April 30, 2016 with 650,000 shares remaining in the program. The company did not repurchase any shares of its common stock during the first nine months of fiscal 2016 under the stock repurchase program.

Cash Flow 

The company started 2016 with $328.8 million of cash and cash equivalents. Net cash provided by operating activities was approximately $100.0 million for the first nine months of 2016 reflecting $77.2 million in net income and $69.2 million in non-cash adjustments (primarily $38.2 million in depreciation and amortization) offset by uses of $46.4 million to various operating assets and liabilities.

Changes in operating assets and liabilities for the first nine months of 2016 (including short-term and long-term items) that impacted cash flows negatively consisted of uses from accounts receivable ($24.9 million), accrued taxes ($23.6 million) and prepaid expenses and other ($18.2 million), partially offset by sources from accrued expenses ($6.5 million), accounts payable ($7.8 million), inventories ($4.5 million) and accrued payroll and severance ($1.4 million). The increase in prepaid and other was due primarily to the revaluation of inter-company loans. The increase in accounts receivable was due to increased sales in the third quarter. The increase in accrued payroll and severance was due primarily to more payroll from acquisitions.

Net cash used in investing activities for the first nine months of 2016 was approximately $498.5 million and primarily related to the acquisition of the PolySwitch business ($342.3 million, net of cash acquired), the acquisition of the TVS Diode/Thyristor/IGBT business ($104.0 million), the acquisition of Menber’s ($18.9 million) and capital expenditures ($34.5 million).

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Net cash provided by financing activities for the first nine months of 2016 was approximately $262.4 million and included $271.3 million in net proceeds on borrowings offset by dividends paid of $20.4 million and debt issuance costs related to the new credit agreement of $1.7 million, partially offset by $16.9 million from the exercise of stock options including tax benefits. The effects of exchange rate changes increased cash and cash equivalents by approximately $1.8 million. The net cash provided by operating activities combined with the effects of exchange rate changes less net cash used in investing and financing activities resulted in a $134.3 million decrease in cash, which left the company with a cash and cash equivalents balance of $194.5 million at October 1, 2016.

The ratio of current assets to current liabilities was 3.0 to 1 at the end of the third quarter of 2016 compared to 2.8 to 1 at year-end 2015 and 2.7 to 1 at the end of the third quarter of 2015. Days sales outstanding in accounts receivable was approximately 67 days at the end of the third quarter of 2016 compared to 62 days at the end of the third quarter of 2015 and 59 days at year-end 2015. Days inventory outstanding was approximately 66 days at the end of the third quarter of 2016, 65 days at the year-end 2015 and 70 days at the end of the third quarter of 2015.

Outlook

Sales in the 4^th quarter of 2016 are expected to be in the range of $270 million to $280 million. This represents approximately 24% revenue growth at the midpoint from the prior year quarter. Excluding acquisitions, the effects of the e-house business sale and the 2015 “extra week”, this represents approximately 3% revenue growth at the midpoint.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

The company is exposed to market risk from changes in interest rates, foreign exchange rates and commodity prices.

Interest Rates

The company had $437.4 million in debt outstanding at October 1, 2016 related to the unsecured revolving credit facility and term loan. Because 100% of this debt has variable interest rates, the company is subject to future interest rate fluctuations in relation to these borrowings which could potentially have a negative impact on cash flows of the company. A prospective increase of 100 basis points in the interest rate applicable to the Company’s outstanding borrowings under its credit facility would result in an increase of approximately $4.4 million in annual interest expense. The Company is not party to any currency exchange or interest rate protection agreements as of October 1, 2016.

Foreign Exchange Rates

The majority of the company’s operations consist of manufacturing and sales activities in foreign countries. The company has manufacturing facilities in the U.S., Mexico, Canada, China, Italy, Lithuania, Japan and the Philippines. During the first nine months of 2016, sales to customers outside the U.S. were approximately 65% of total net sales. Substantially all sales in Europe are denominated in euros and substantially all sales in the Asia-Pacific region are denominated in U.S. dollars, Japanese yen, Korean won, Chinese yuan or Taiwanese dollars.

The company’s foreign exchange exposures result primarily from sale of products in foreign currencies, foreign currency denominated purchases, inter-company loans, employee-related and other costs of running operations in foreign countries and translation of balance sheet accounts denominated in foreign currencies. The company’s most significant net long exposure is to the euro. The company’s most significant net short exposures are to the Chinese yuan, Mexican peso and Philippine peso. Changes in foreign exchange rates could affect the company’s sales, costs, balance sheet values and earnings. The company uses netting and offsetting intercompany account management techniques to reduce known foreign currency exposures where possible.

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Commodity Prices

The company uses various metals in the manufacturing of its products, including copper, zinc, tin, gold and silver. Prices of these commodities can and do fluctuate significantly, which can impact the company’s earnings. The most significant of these exposures is to copper, zinc, silver and gold where at current prices and volumes, a 10% price change would affect annual pre-tax profit by approximately $3.2 million for copper, $0.9 million for zinc, $0.7 million for silver and $0.2 million for gold. From time to time, the company has utilized derivative instruments to hedge certain commodity exposures.

Item 4. Controls and Procedures. 

Each of our Chief Executive Officer and Chief Financial Officer has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended) as of the end of the period covered by this quarterly report. Based on such evaluation, such officers have concluded that, as of the end of the period covered by this quarterly report, our disclosure controls and procedures are effective.

There have been no changes in our internal controls over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities and Exchange Act of 1934, as amended) during the quarter ended October 1, 2016 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors.

There have been no material changes from risk factors previously disclosed in our Annual Report on Form 10-K for the year ended January 2, 2016 in response to Item 1A to Part 1 of Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following table provides information about shares of common stock the Company acquired during the three months ended October 1, 2016:

Issuer Purchases of Equity Securities

	Total number of shares purchased (a)		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs		Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs (b)
July 3, 2016 to July 30, 2016		—		—		—		1,000,000
July 31, 2016 to August 27, 2016		2,574	$	123.72		—		1,000,000
August 28, 2016 to October 1, 2016		—		—		—		1,000,000
Total		2,574	$	123.72		—		1,000,000

(a) Represents shares withheld to satisfy certain tax withholding obligations in connection with vesting of restricted stock units.

(b) The company’s Board of Directors authorized the repurchase of up to 1,000,000 shares of the company’s common stock under a program for the period May 1, 2016 to April 30, 2017. The company’s prior share repurchase authorization of 1,000,000 shares expired on April 30, 2016 with 650,000 shares remaining in the program. The company did not repurchase any shares of its common stock during the first nine months of fiscal 2016.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

29

Item 6. Exhibits.

Exhibit Description

10.1† Form of Restricted Stock Unit Award Agreement (Tier 1) under Littelfuse, Inc. Long-Term Incentive Plan (filed as Exhibit 10.1 to the company’s Current Report on Form 8-K dated July 20, 2016).

31.1* Certification of Gordon Hunter, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2* Certification of Meenal A. Sethna, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1** Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS* XBRL Instance Document

101.SCH* XBRL Taxonomy Extension Schema Document

101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF* XBRL Taxonomy Definition Linkbase Document

101.LAB* XBRL Taxonomy Extension Label Linkbase Document

101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
†	Indicates management contract or compensatory arrangement.
*	Filed herewith.
**	Furnished herewith.

30

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q for the quarter ended October 1, 2016, to be signed on its behalf by the undersigned thereunto duly authorized.

	Littelfuse, Inc.
Date: November 4, 2016	By:	/s/ Meenal A. Sethna
		Meenal A. Sethna
		Executive Vice President and Chief Financial Officer (As duly authorized officer and as the principal financial and accounting officer)

 31

EX-31.1

EXHIBIT 31.1

SECTION 302 CERTIFICATION

I, Gordon Hunter, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Littelfuse Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 4 , 2016

/s/ Gordon Hunter

Gordon Hunter

Chairman, President and

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

SECTION 302 CERTIFICATION

I, Meenal A. Sethna, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Littelfuse Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 4, 2016

/s/ MEENAL A. SETHNA          

Meenal A. Sethna

Executive Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

LITTELFUSE, INC.

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of title 18, United States Code), each of the undersigned officers of Littelfuse, Inc. (“the Company”) does hereby certify that:

The Quarterly Report of the Company on Form 10-Q for the fiscal quarter ended October 1, 2016 (“the Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Gordon Hunter	/s/ MEENAL A. SETHNA
Gordon Hunter	Meenal A. Sethna
Chairman, President and	Executive Vice President and
Chief Executive Officer	Chief Financial Officer
Dated: November 4, 2016	Dated: November 4, 2016

XML

Document And Entity Information - shares	9 Months Ended
	Oct. 01, 2016	Oct. 28, 2016
Document Information [Line Items]
Entity Registrant Name	LITTELFUSE INC /DE
Entity Central Index Key	0000889331
Trading Symbol	lfus
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Entity Common Stock, Shares Outstanding (in shares)		22,532,130
Document Type	10-Q
Document Period End Date	Oct. 01, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Oct. 01, 2016	Jan. 02, 2016
Current assets:
Cash and cash equivalents	$ 194,494	$ 328,786
Short-term investments	3,961	4,179
Accounts receivable, less allowances	205,211	142,882
Inventories	121,616	98,629
Prepaid income taxes and income taxes receivable	14,344	1,510
Prepaid expenses and other current assets	15,543	7,943
Total current assets	555,169	583,929
Property, plant and equipment:
Land	10,044	5,236
Buildings	83,441	71,383
Equipment	439,430	382,429
	532,915	459,048
Accumulated depreciation	(309,062)	(296,480)
Net property, plant and equipment	223,853	162,568
Intangible assets, net of amortization:
Patented and unpatented technologies, licenses and software	88,322	20,221
Distribution network	19,566	16,490
Customer lists, trademarks and tradenames	116,684	54,912
Goodwill	409,527	189,767
Investments	14,974	15,197
Deferred income taxes	17,151	8,333
Other assets	12,857	14,058
Total assets	1,458,103	1,065,475
Liabilities and Equity
Accounts payable	81,382	51,658
Accrued payroll	39,517	32,611
Accrued expenses	48,713	24,145
Accrued severance	3,420	3,798
Accrued income taxes	8,622	11,836
Current portion of long-term debt	6,250	87,000
Total current liabilities	187,904	211,048
Long-term debt, less current portion	434,206	83,753
Deferred income taxes	(7,345)	(8,014)
Accrued post-retirement benefits	6,235	5,653
Other long-term liabilities	19,037	17,755
Total equity	803,376	739,252
Total liabilities and equity	$ 1,458,103	$ 1,065,475

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - shares	Oct. 01, 2016	Jan. 02, 2016
Common shares issued (in shares)	22,643,816	22,420,785
Common shares oustanding (in shares)	22,643,816	22,420,785

XML

Consolidated Statements of Net Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
		Oct. 01, 2016	Sep. 26, 2015	Oct. 01, 2016	Sep. 26, 2015
Revenue, Net	[1]	$ 280,331	$ 215,510	$ 771,641	$ 647,844
Cost of sales		166,572	129,328	472,861	400,051
Gross profit		113,759	86,182	298,780	247,793
Selling, general and administrative expenses		56,589	37,002	150,047	112,119
Research and development expenses		10,403	7,479	30,884	22,224
Pension settlement expense			30,194		30,194
Amortization of intangibles		4,432	2,923	13,384	8,952
Impairment of goodwill and intangible assets		14,809		14,809
		86,233	77,598	209,124	173,490
Operating income		27,526	8,584	89,656	74,303
Interest expense		2,571	922	6,286	3,021
Foreign exchange (gain) loss		(4,700)	(3,549)	(7,114)	(1,724)
Other (income) expense, net		(778)	(1,430)	(1,040)	(3,758)
Income before income taxes		30,433	12,641	91,524	76,764
Income taxes		(369)	1,317	14,281	16,761
Net income		$ 30,802	$ 11,324	$ 77,243	$ 60,003
Net income per share (see Note 10):
Basic (in dollars per share)		$ 1.36	$ 0.50	$ 3.43	$ 2.65
Diluted (in dollars per share)		$ 1.35	$ 0.50	$ 3.41	$ 2.64
Weighted average shares and equivalent shares outstanding:
Basic (in shares)		22,578	22,581	22,515	22,623
Diluted (in shares)		22,734	22,693	22,675	22,771
Cash dividends paid per common share (in dollars per share)		$ 0.33	$ 0.29	$ 0.91	$ 0.79

[1] Sales by country represent sales to customer or distributor locations.

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 01, 2016	Sep. 26, 2015	Oct. 01, 2016	Sep. 26, 2015
Net income	$ 30,802	$ 11,324	$ 77,243	$ 60,003
Other comprehensive income (loss):
Pension liability adjustments (net of tax of $30 and $7 for the three months ended 2016 and 2015, and $395 and $49 for the nine months ended 2016 and 2015, respectively)	(138)	(16)	(183)	(140)
Reclassification adjustments to expense, (net of tax of $0 and $1,244, for the three months ended 2016 and 2015, and $0 and $746 for the nine months ended 2016 and 2015, respectively)	68	(514)	212	1,457
Reclassification of pension settlement costs to expense (net of tax of $11,742 for the three and nine months ended 2015)		21,124		21,124
Unrealized (loss) gain on investments	927	(3,354)	(559)	(18)
Foreign currency translation adjustments	(5,771)	(26,377)	(8,951)	(36,530)
Comprehensive income	$ 25,888	$ 2,187	$ 67,762	$ 45,896

XML

Consolidated Statements of Comprehensive Income (Unaudited) (Parentheticals) - USD ($)	3 Months Ended		9 Months Ended
	Oct. 01, 2016	Sep. 26, 2015	Oct. 01, 2016	Sep. 26, 2015
Pension liability adjustments, tax	$ 30,000	$ 7,000	$ 395,000	$ 49,000
Reclassification liability adjustment, tax	$ 0	1,244,000	$ 0	746,000
Pension settlement adjustment, tax		$ 11,742,000		$ 11,742,000

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Oct. 01, 2016	Sep. 26, 2015
Operating activities:
Net income	$ 77,243	$ 60,003
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	24,841	22,154
Amortization of intangibles	13,384	8,952
Impairment of goodwill and intangible assets	14,809
Loss on sale of product line	1,391
Stock-based compensation	9,166	7,997
Inventory Charge Related to Step-up in Cost Basis	7,456
Net loss on pension settlement, net of tax		19,472
Excess tax benefit on share-based compensation	(2,272)	(1,500)
Loss on sale of property, plant and equipment	440	308
Accounts receivable	(24,862)	(18,274)
Inventories	4,505	(4,203)
Accounts payable	7,845	4,216
Accrued expenses (including post-retirement)	6,497	6,577
Accrued payroll and severance	1,388	3,598
Accrued taxes	(23,613)	4,006
Prepaid expenses and other	(18,203)	277
Net cash provided by operating activities	100,015	113,583
Investing activities:
Purchases of property, plant, and equipment	(34,501)	(35,016)
Acquisition of businesses, net of cash acquired	(468,636)
Proceeds from maturities of short term investments	345
Decrease in entrusted loan receivable	4,056	5,930
Proceeds from sale of assets	255	38
Net cash used in investing activities	(498,481)	(29,048)
Financing activities:
Proceeds of revolving credit facility	258,000	49,000
Proceeds of term loan	234,000
Payments of revolving credit facility	(97,500)	(25,000)
Payments of term loan	(119,125)	(3,750)
Payments of entrusted loan	(4,056)	(5,930)
Debt issuance costs	(1,701)	(42)
Cash dividends paid	(20,405)	(17,864)
Proceeds from exercise of stock options	14,581	6,186
Excess tax benefit on share-based compensation	2,272	1,500
Purchases of common stock	(3,685)	(31,252)
Net cash (used in) provided by financing activities	262,381	(27,152)
Effect of exchange rate changes on cash and cash equivalents	1,793	(18,314)
Increase (decrease) in cash and cash equivalents	(134,292)	39,069
Cash and cash equivalents at beginning of period	328,786	297,571
Cash and cash equivalents at end of period	$ 194,494	$ 336,640

XML

Note 1 - Basis of Presentation

9 Months Ended

Oct. 01, 2016

Notes to Financial Statements

Basis of Accounting [Text Block]

1. Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements of Littelfuse, Inc. and its subsidiaries (the “company”) have been prepared in accordance with U.S.

Generally Accepted Accounting Principles

(GAAP) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and disclosures normally included in the consolidated balance sheet, statements of net income and comprehensive income and cash flows prepared in conformity with U.S. GAAP have been condensed or omitted as permitted by such rules and regulations, although the company believes that the disclosures made are adequate to make the information not misleading. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the periods ended October 1, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. For further information, refer to the company’s consolidated financial statements and the notes thereto incorporated by reference in the company’s Annual Report on Form 10-K for the year ended January 2, 2016.

The company’s unaudited consolidated statement of income for the three and nine months ended October 1, 2016 include the operating results of PolySwitch business purchased from TE Connectivity Ltd

and the TVS Diode/Thyristor/IGBT business purchased from ON Semiconductor Corporation

since the acquisition dates of these businesses of March 25, 2016 and August 29, 2016, respectively.

XML

Note 2 - Correction of Immaterial Errors

9 Months Ended

Oct. 01, 2016

Notes to Financial Statements

Accounting Changes and Error Corrections [Text Block]

2. Correction of immaterial errors

In the second quarter of 2016, management determined that the company may incur additional income taxes and interest in a foreign jurisdiction with respect to the 2011 through 2015 fiscal years. The cumulative adjustment for this income tax (including interest of $1.5 million) as of January 2, 2016, is approximately $4.9 million. The adjustment applicable to 2015, 2014, 2013, 2012 and 2011 was $1.6 million, $1.3 million, $1.0 million, $0.9 million and $0.1 million, respectively.

Pursuant to the guidance of Staff Accounting Bulletin ("SAB") No. 99, Materiality, the company concluded that the errors were not material to any of its applicable prior period annual and quarterly financial statements. Although the errors were immaterial to prior periods, the prior period annual and interim financial statements were revised, in accordance with SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, due to the significance of the out-of-period correction. The adjustment for each year has been treated as applicable to the fourth quarter of each year.

A reconciliation of the effects of the adjustments to the previously reported balance sheet at January 2, 2016 follows ($ in thousands):

	January 2, 2016
	Previously Reported		Adjustment			As Revised
Other long-term liabilities	$	12,809	$	4,946		$	17,755
Total equity		744,198		(4,946	)		739,252

A reconciliation of the effects of the adjustments to the previously reported statements of net income for the years ended January 2, 2016 and December 27, 2014 follows ($ in thousands, except per share amounts):

	Year Ended January 2, 2016							Year Ended December 27, 2014
	Previously Reported		Adjustment			As Revised		Previously Reported		Adjustment			As Revised
Income taxes	$	24,482	$	1,600		$	26,082	$	32,228	$	1,318		$	33,546
Net income		82,466		(1,600	)		80,866		99,418		(1,318	)		98,100
Net income per share - Basic	$	3.65	$	(0.07	)	$	3.58	$	4.41	$	(0.06	)	$	4.35
Net income per share - Diluted	$	3.63	$	(0.07	)	$	3.56	$	4.37	$	(0.05	)	$	4.32

A reconciliation of the effects of the adjustments to the previously reported statements of cash flows for the years ended January 2, 2016 and December 27, 2014 follows ($ in thousands):

	Year Ended January 2, 2016								Year Ended December 27, 2014
	Previously Reported			Adjustment			As Revised		Previously Reported			Adjustment			As Revised
Net income	$	82,466		$	(1,600	)	$	80,866	$	99,418		$	(1,318	)	$	98,100
Accrued taxes		(1,043	)		1,600			557		(549	)		1,318			769
Net cash provided by operating activities		165,826			—			165,826		153,141			—			153,141

A reconciliation of the effects of the adjustments to the previously reported statements of equity for the years ended January 2, 2016 and December 27, 2014 follows ($ in thousands):

	Year Ended January 2, 2016							Year Ended December 27, 2014
	Previously Reported		Adjustment			As Revised		Previously Reported		Adjustment			As Revised
Net income	$	82,466	$	(1,600	)	$	80,866	$	99,418	$	(1,318	)	$	98,100
Comprehensive income		57,921		(1,600	)		56,321		57,875		(1,318	)		56,557
Retained earnings		562,717		(4,946	)		557,771		523,302		(3,346	)		519,956
Total shareholders’ equity		744,198		(4,946	)		739,252		727,665		(3,346	)		724,319

A reconciliation of the effects of the adjustments to the previously reported statement of equity at December 28, 2013 follows ($ in thousands):

	December 28, 2013
	Previously Reported		Adjustment			As Revised
Retained earnings	$	445,059	$	(2,028	)	$	443,031
Total shareholders’ equity		686,916		(2,028	)		684,888

XML

Note 3 - Reclassifications

9 Months Ended

Oct. 01, 2016

Notes to Financial Statements

Reclassifications [Text Block]

3

. Reclassifications

Certain amounts presented in the 2015 financial statements have been reclassified to conform to the 2016 presentation. In April 2015, the

Financial Accounting Standards Board (the “FASB”)

issued

Accounting Standards Update (“ASU”)

No. 2015-03,

Interest - Imputation of Interest

(Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.

The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts.

The amended guidance is effective for financial statements issued for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amended guidance is to be applied on a retrospective basis. The company adopted the new guidance on January 3, 2016 and has made the corresponding reclassification on its balance sheet for the fiscal year ended January 2, 2016. The adoption of the new guidance had no effect on the company’s net income, cash flows or shareholders’ equity. Additionally, the company has reclassified a portion of its current tax position at January 2, 2016 to more accurately reflect its prepaid/liability position at a jurisdictional level.

XML

Note 4 - Acquisition of Businesses

9 Months Ended

Oct. 01, 2016

Notes to Financial Statements

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

4

. Acquisition of Businesses

TVS Diode/Thyristor/IGBT business

On August 29, 2016, the company acquired certain assets of select businesses (the “TVS Diode/Thyristor/IGBT business”) of ON Semiconductor Corporation for $104.0 million. The company funded the acquisition with available cash and proceeds from its credit facility

. The acquired business, which is included in the Electronics segment,

consists of a product portfolio that includes transient voltage suppression (TVS) diodes, switching thyristors and insulated gate bipolar transistors (IGBT) for automotive ignition applications. The acquisition expands the company’s offerings in power semiconductor applications as well as increases its presence in the automotive electronics market. The TVS Diode/Thyristor/IGBT business products have strong synergies with the company’s existing circuit protection business, will strengthen its channel partnerships and customer engagement, and expand its power semiconductor portfolio.

The following table represents the preliminary allocation of the total consideration to assets acquired and liabilities assumed in the acquisition of the TVS Diode/Thyristor/IGBT business based on the company’s preliminary estimate of their respective fair values at the acquisition date (in thousands):

Total purchase consideration:
Cash	$	104,000
Preliminary allocation of consideration to assets acquired and liabilities assumed:
Current assets, net		4,616
Customer relationships		31,650
Patented and unpatented technologies		10,250
Non-compete agreement		2,500
Goodwill		54,984
	$	104,000

All the TVS Diode/Thyristor/IGBT business goodwill and other assets were recorded in the Electronics segment and are reflected in the Americas and Europe geographic areas. The customer relationships are preliminarily being amortized over 13.5 years. The patented and unpatented technologies are preliminarily being amortized over 6-8.5 years. The non-compete agreement is preliminarily being amortized over 4 years. The goodwill resulting from this acquisition consists largely of the company’s expected future product sales and synergies from combining the TVS Diode/Thyristor/IGBT business products with the company’s existing

power semiconductor product portfolio. A portion of goodwill for the above acquisition is expected to be deductible for tax purposes.

As required by purchase accounting rules, the company recorded a $0.5 million step-up of inventory to its fair value as of the acquisition date based on the preliminary valuation. $0.3 million of the step-up was amortized as a non-cash charge to cost of goods sold during the third quarter of 2016, as the acquired inventory was sold, and reflected as other non-segment costs.

Included in the company’s consolidated statements of net income for the three and nine months ended October 1, 2016 are net sales of approximately $5.6 million and $5.6 million, respectively, since the August 29, 2016 acquisition of the TVS Diode/Thyristor/IGBT business

.

Menber’s

On April 4, 2016, the company completed the acquisition of Menber’s S.p.A. (“Menber’s”) headquartered in Legnago, Italy for $19.2 million, net of acquired cash and after settlement of a working capital adjustment. At October 1, 2016, $18.9 million of the $19.2 million purchase price has been paid and financed through a mixture of cash on hand and borrowings under the company’s revolving credit facility, with the remaining consideration expected to be paid out in the remainder of 2016. The acquired business is part of the company's commercial vehicle product business within the Automotive segment and specializes in the design, manufacturing and selling of manual and electrical high current switches and trailer connectors for commercial vehicles.

The following table represents the preliminary allocation of the total consideration to assets acquired and liabilities assumed in the acquisition of Menber’s based on the company’s preliminary estimate of their respective fair values at the acquisition date (in thousands):

Total purchase consideration:
Cash, net of acquired cash	$	18,909
Additional consideration payable		253
Total purchase consideration	$	19,162
Preliminary allocation of consideration to assets acquired and liabilities assumed:
Current assets, net	$	13,560
Property, plant and equipment		1,693
Customer relationships		3,050
Patented and unpatented technologies		224
Trademarks and tradenames		1,849
Goodwill		7,651
Current liabilities		(7,421	)
Other non-current liabilities		(1,444	)
	$	19,162

All Menber’s goodwill and other assets and liabilities were recorded in the Automotive segment and reflected in the Europe geographic area. The customer relationships are being amortized over 1

0 years. The patented and unpatented technologies are being amortized over 5 years. The trademarks and tradenames are being amortized over 10 years. The goodwill resulting from this acquisition consists largely of the company’s expected future product sales and synergies from combining Menber’s products with the company’s existing automotive product portfolio. Goodwill for the above acquisition is not expected to be deductible for tax purposes.

As required by purchase accounting rules, the company recorded a $0.2 million step-up of inventory to its fair value as of the acquisition date based on the preliminary valuation. The step-up was amortized as a non-cash charge to cost of goods sold during the third quarter of 2016 with the charge reflected as other non-segment costs.

Included in the company’s consolidated statements of net income for the three and nine months ended October 1, 2016 are net sales of approximately $5.3 million and $12.0 million, respectively, since the April 4, 2016 acquisition of Menber’s.

PolySwitch

On March 25, 2016, the company acquired 100% of the circuit protection business (“PolySwitch”) of TE Connectivity Ltd. for $348.0 million, net of acquired cash and after settlement of certain post-closing adjustments.

At October 1, 2016, $342.3 million of the $348.0 million purchase price has been paid and financed through a mixture of cash on hand and borrowings under the company’s revolving credit facility, with the remaining consideration expected to be paid by the 2

nd

quarter of 2017. The PolySwitch business, which is split between the Automotive and Electronics segments,

has a leading position in polymer based resettable circuit protection devices, with a strong global presence in the automotive, battery, industrial, communications and mobile computing markets. PolySwitch has operations in Menlo Park, California and manufacturing facilities in Shanghai and Kunshan, China and Tsukuba, Japan. The acquisition allows the company to strengthen its global circuit protection product portfolio, as well as strengthen its presence in the automotive electronics and battery end markets. The acquisition also significantly increases the company’s presence in Japan. The company funded the acquisition with available cash and proceeds from a new credit facility

.

The following table represents the preliminary allocation of the total consideration to assets acquired and liabilities assumed in the acquisition of PolySwitch based on the company’s preliminary estimate of their respective fair values at the acquisition date (in thousands):

Total purchase consideration:
Original consideration	$	350,000
Post closing consideration adjustment received		(2,029	)
Acquired cash		(5,719	)
Acquired cash to be returned to seller		5,719
Total purchase consideration	$	347,971
Preliminary allocation of consideration to assets acquired and liabilities assumed:
Current assets, net	$	59,751
Property, plant and equipment		52,025
Land lease		4,290
Patented and unpatented technologies		56,425
Customer relationships		39,720
Goodwill		163,635
Other long-term assets		10,711
Current liabilities		(37,068	)
Other non-current liabilities		(1,518	)
	$	347,971

All PolySwitch goodwill and other assets and liabilities were recorded in the Automotive and Electronics segments and reflected in all geographic areas. The customer relationships are being amortized over 15 years. The patented and unpatented technologies are being amortized over 10 years. The goodwill resulting from this acquisition consists largely of the company’s expected future product sales and synergies from combining PolySwitch products with the company’s existing automotive and electronics product portfolio. A portion of the goodwill for the above acquisition is expected to be deductible for tax purposes.

As required by purchase accounting rules, the company recorded a $6.9 million step-up of inventory to its fair value as of the acquisition date based on the preliminary valuation. The step-up was amortized as a non-cash charge to cost of goods sold during the second quarter of 2016, as the acquired inventory was sold, and reflected as other non-segment costs.

Included in the company’s consolidated statements of net income for the three and nine months ended October 1, 2016 are net sales of approximately $47.9 million and $84.4 million, respectively, since the March 25, 2016 acquisition of PolySwitch.

Sigmar S.r.l

On October 1, 2015, the company acquired 100% of Sigmar S.r.l. (“Sigmar”). The total purchase price for Sigmar is expected to be $6.7 million, net of cash acquired and including: (1) additional consideration of $1.

0 million paid in the first nine months of 2016 relating to certain working capital related adjustments and an earn-out clause payment; and (2) estimated additional net payments of up to $0.9 million, a portion of which is subject to the achievement of certain milestones.

Located in Ozegna, Italy, Sigmar is a leading global manufacturer of water-in-fuel sensors and also manufactures selective catalytic reduction (SCR) quality sensors and diesel fuel heaters for automotive and commercial vehicle applications. The acquisition further expanded the company’s automotive sensor product line offerings within its Automotive segment. The company funded the acquisition with available cash.

The following table sets forth the preliminary purchase price allocation for Sigmar acquisition-date net assets, in accordance with the purchase method of accounting with adjustments to record the acquired net assets at their estimated fair values (in thousands):

Total purchase consideration:
Cash	$	5,788
Estimated additional consideration payable		901
Total purchase consideration	$	6,689
Preliminary allocation of consideration to assets acquired and liabilities assumed:
Cash	$	230
Current assets, net		4,011
Property, plant and equipment		1,097
Goodwill		2,552
Patents		2,845
Current liabilities		(1,478	)
Other non-current liabilities		(2,568	)
	$	6,689

All Sigmar goodwill and other assets and liabilities were recorded in the Automotive segment and reflected in the Europe geographic area. The patents are being amortized over 10 years. The goodwill resulting from this acquisition consists largely of the company’s expected future product sales and synergies from combining Sigmar’s products with the company’s existing automotive product offerings. Goodwill for the above acquisition is not expected to be deductible for tax purposes.

Pro Forma Results

The following table summarizes, on a pro forma basis, the combined results of operations of the company and the acquired PolySwitch and the TVS Diode/Thyristor/IGBT businesses as though the acquisitions had occurred as of December 28, 2014. The company has not provided pro forma results of operations for Menber’s or Sigmar as these results were not material to the company. The pro forma amounts presented are not necessarily indicative of either the actual consolidated results had the PolySwitch or TVS Diode/Thyristor/IGBT acquisitions occurred as of December 28, 2014 or of future consolidated operating results

.

	For the Three Months Ended				For the Nine Months Ended
(in thousands, except per share amounts)	October 1 , 201 6		September 26 , 201 5		October 1 , 201 6		September 26 , 201 5
Net sales	$	290,377	$	278,093	$	846,127	$	834,372
Income before income taxes		32,728		17,823		110,853		88,124
Net income		33,086		6,324		96,713		69,110
Net income per share — basic		1.47		0.28		4.30		3.05
Net income per share — diluted		1.46		0.28		4.26		3.04

Pro forma results presented above primarily reflect: (1) incremental depreciation relating to fair value adjustments to property, plant and equipment; (2) amortization adjustments relating to fair value estimates of intangible assets; (3) incremental interest expense on assumed indebtedness; and (4) additional cost of goods sold relating to the capitalization of gross profit as part of purchase accounting recognized for purposes of the pro forma as if it was recognized during the company’s first quarter of 2015. Pro forma adjustments described above have been tax affected using the company's effective rate during the respective periods.

The historical PolySwitch and TVS Diode/Thyristor/IGBT business results for the three and nine months ended October 1, 2016 and September 26, 2015 do not include a provision for income taxes. Income tax expense for the historical PolySwitch business was only provided at the end of the business’s fiscal year ended September 25, 2015. Income tax expense for the historical TVS Diode/Thyristor/IGBT business was not provided on a standalone basis.

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Note 5 - Impairment of Goodwill and Intangible Assets

9 Months Ended

Oct. 01, 2016

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

5

.

Impairment of Goodwill and Intangible Assets

The company annually tests goodwill for impairment during

its fiscal fourth quarter or at an interim date if there is an event or change in circumstances that indicates the asset may be impaired. As of the most recent annual test conducted, the company concluded the fair value of its custom products reporting unit exceeded its carrying value of invested capital by 12% and therefore, no potential goodwill impairment existed in 2015.

Due to recent negative events in the potash market subsequent to the company’s 2016

second quarter end, the company conducted a step one goodwill impairment analysis for the custom products reporting unit to determine if goodwill was impaired as of July 2, 2016. The fair value of this reporting unit at this date exceeded its carrying value by less than 10%.  Since then, the potash market has continued to see a decline in market pricing in the potash mining industry. Due to this continuing decline in potash pricing

, management revisited its long term projections during the company’s third quarter 2016 and conducted another step one goodwill impairment analysis. The custom products reporting unit failed the step one test and management conducted a step two analysis with the revised projections. The fair value of the unit was estimated using the expected present value of future cash flows over a seven year forecast period and appraisal of certain assets. This analysis required a write down of the reporting unit’s carrying value of $14.8 million. A goodwill impairment loss of $8.8 million and intangible assets impairments aggregating $6.0 million were recognized during the third quarter, including a $3.8 million reduction of the custom products trade names to a $0.7 million remaining value and a $2.2 million reduction of the reporting unit’s customer relationships to zero value.

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Note 6 - Inventories

9 Months Ended

Oct. 01, 2016

Notes to Financial Statements

Inventory Disclosure [Text Block]

6

. Inventories

The components of inventories at October 1, 2016 and January 2, 2016 are as follows (in thousands):

	October 1 , 2016		January 2, 2016
Raw material	$	35,450	$	33,599
Work in process		24,703		16,479
Finished goods		61,463		48,551
Total inventories	$	121,616	$	98,629

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Note 7 - Investments

9 Months Ended

Oct. 01, 2016

Notes to Financial Statements

Cost and Equity Method Investments Disclosure [Text Block]

7

. Investments

The company’s investments represent shares of Polytronics Technology Corporation Ltd. (“Polytronics”), a Taiwanese company

, and shares of Monolith Semiconductor, Inc. (“Monolith”), a Texas-based start-up company.

Polytronics

The Polytronics investment was acquired as part of the Littelfuse GmbH acquisition. The fair value of the Polytronics investment was €10.2 million (approximately $11.5 million) at October 1, 2016 and €10.7 million (approximately $11.7 million) at January 2, 2016. Included in 2016 other comprehensive income is an unrealized loss of $0.6 million, due to the decrease in fair market value of the Polytronics investment. The remaining change in the recorded value was due to the impact of changes in exchange rates.

Monolith

In December 2015, the company invested $3.5 million in the preferred stock of Monolith, a U.S. start-up company developing silicon carbide technology, which represents approximately 12% of the common stock of Monolith on an as-converted basis. The company accounts for its investment in Monolith under the cost method. The carrying value of the Monolith investment was $3.5 million at October 1, 2016 and January 2, 2016.

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Note 8 - Debt

9 Months Ended

Oct. 01, 2016

Notes to Financial Statements

Debt Disclosure [Text Block]

8

. Debt

The carrying amounts of debt at October 1, 2016 and January 2, 2016 are as follows (in thousands):

	October 1 , 2016			January 2, 2016
Revolving credit facility	$	315,500		$	77,000
Term loan		121,875			85,000
Entrusted loan		5,173			9,474
Unamortized debt issuance costs		(2,092	)		(721	)
Total debt		440,456			170,753
Less: Current maturities		(6,250	)		(87,000	)
Total long-term debt	$	434,206		$	83,753

Revolving Credit F

acility / Term Loan

On March 4, 2016, the company entered into a new credit agreement with Bank of America, as agent, for up to $700.0 million which consists of an unsecured revolving credit facility of $575.0 million and an unsecured term loan credit facility of up to $125.0 million. The new credit agreement is for a five year period. The new credit agreement replaced the company’s previous credit agreement dated May 31, 2013, which was terminated on March 4, 2016. As of October 1, 2016, the company

had $0.1 million outstanding in letters of credit and had available $259.4 million of borrowing capacity under the revolving credit facility at an interest rate of LIBOR plus 1.5% (2

.03% as of October 1, 2016). At October 1, 2016, the company was in compliance with all covenants under the credit agreement

.

Entrusted Loan

During 2014, the company entered into an entrusted loan arrangement (“Entrusted Loan”) of RMB 110.0 million (approximately $17.9 million) between two of its China legal entities, Littelfuse Semiconductor (Wuxi) Company (the “lender”) and Suzhou Littelfuse OVS Ltd. (the “borrower”), utilizing Bank of America, N.A., Shanghai Branch as agent. Direct borrowing and lending between two commonly owned commercial entities was strictly forbidden at the time under China’s regulations requiring the use of a third party agent to enable loans between Chinese legal entities. As a result, the Entrusted Loan is reflected as both a long-term asset and long-term debt on the company’s Consolidated Balance Sheets and is reflected in the investing and financing activities in its Consolidated Statements of Cash Flows. Interest expense and interest income will be recorded between the lender and borrower with no net impact on the company’s Consolidated Statements of Income since the amounts will be offsetting. The loan interest rate per annum is 5.25%. The Entrusted Loan is used to finance the operation and working capital needs of the borrower and matures in November 2019. The balance of the Entrusted Loan was RMB 34.5 million (approximately $5.2 million) at October 1, 2016.

Debt Issuance Costs

The company incurred debt issuance costs of $1.7 million in relation to the new credit agreement which

, along with the remaining balance of debt issuance costs of the previous credit facility, are being amortized over the life of the new credit agreement.

This new credit agreement was determined to be a modification under ASC 470-50 of the previous credit agreement.

In April 2015, the FASB issued ASU No. 2015-03,

Interest - Imputation of Interest

(Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The company adopted this guidance in the first quarter of 2016, on a retrospective basis, and has reclassified the unamortized debt issuance costs into long-term debt as shown in the table above.

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Note 9 - Fair Value of Assets and Liabilities

9 Months Ended

Oct. 01, 2016

Notes to Financial Statements

Fair Value Disclosures [Text Block]

9

. Fair Value of Assets and Liabilities

In determining fair value, the company uses various valuation approaches within the fair value measurement framework. Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability.

Applicable accounting literature establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Applicable accounting literature defines levels within the hierarchy based on the reliability of inputs as follows:

Level 1—Valuations based on unadjusted quoted prices for identical assets or liabilities in active markets;

Level 2—Valuations based on quoted prices for similar assets or liabilities or identical assets or liabilities in less active markets, such as dealer or broker markets; and

Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable, such as pricing models, discounted cash flow models and similar techniques not based on market, exchange, dealer or broker-traded transactions.

Following is a description of the valuation methodologies used for instruments measured at fair value and their classification in the valuation hierarchy.

Investments

The company holds an investment in the equity securities of Polytronics as described in Note 7. Equity securities listed on a national market or exchange, such as Polytronics securities, are valued at the last sales price. Such securities are classified within Level 1 of the valuation hierarchy. The company also holds an investment in Monolith as described in Note 7 for which the value of the $3.5 million represents the cost of the investment.

There were no changes during the quarter ended October 1, 2016 to the company’s valuation techniques used to measure asset and liability fair values on a recurring basis. As of October 1, 2016 and January 2, 2016

, the company held no non-financial assets or liabilities that are required to be measured at fair value on a recurring basis.

The following table presents assets measured at fair value by classification within the fair value hierarchy as of October 1, 2016 (in thousands):

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investment in Polytronics	$	11,474	$	—	$	—	$	11,474
Total	$	11,474	$	—	$	—	$	11,474

The following table presents assets measured at fair value by classification within the fair value hierarchy as of January 2, 2016 (in thousands):

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investment in Polytronics	$	11,697	$	—	$	—	$	11,697
Total	$	11,697	$	—	$	—	$	11,697

The company’s other financial instruments include cash and cash equivalents, short-term investments, accounts receivable, accounts payable and debt. The carrying amounts of cash and cash equivalents, short-term investments, accounts receivable, accounts payable and debt approximate their fair values. The company’s debt fair value approximates book value at October 1, 2016 and January 2, 2016, respectively, as the variable interest rates fluctuate along with market interest rates.

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Note 10 - Earnings Per Share

9 Months Ended

Oct. 01, 2016

Notes to Financial Statements

Earnings Per Share [Text Block]

10

. Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share for the periods ending October 1, 2016 and September 26, 2015 (in thousands, except per share amounts):

	For the Three Months Ended				For the Nine Months Ended
	October 1 , 201 6		September 26, 2015		October 1 , 201 6		September 26, 2015
Net income	$	30.802	$	11,324	$	77,243	$	60,003
Average shares outstanding - Basic		22,578		22,581		22,515		22,623
Net effect of dilutive stock options and restricted share units		156		112		160		148
Average shares - Diluted		22,734		22,693		22,675		22,771
Net income per share:
Basic	$	1.36	$	0.50	$	3.43	$	2.65
Diluted	$	1.35	$	0.50	$	3.41	$	2.64

Potential shares of common stock relating to stock options excluded from the earnings per share calculation because their effect would be anti-dilutive were 76,845 and 144,031 for the three months ended October 1, 2016 and September 26, 2015, respectively, and 45,591 and 108,193 for the nine months ended October 1, 2016 and September 26, 2015, respectively.

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Note 11 - Income Taxes

9 Months Ended

Oct. 01, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

11

. Income Taxes

The effective tax rate for the third quarter of 2016 was negative 1.2% compared to an effective tax rate of 10.4% in the third quarter of 2015. The effective tax rate for the nine months ended October 1, 2016 was 15.6% compared to an effective tax rate of 21.8% for the nine months ended September 26, 2015. The effective tax rates for the periods presented are lower than the U.S. statutory tax rate primarily due to income earned in lower tax jurisdictions and, with respect to the 2016 periods, a one-time deduction with respect to the stock of one of the company’s affiliates partially offset by the impact of the impairment of goodwill for which no tax benefit was recorded, and, with respect to the 2015 periods, the impact of a pension settlement partially offset by the impact from the restructuring of the legal ownership of the company’s Mexican manufacturing operations.

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Note 12 - Pensions

9 Months Ended

Oct. 01, 2016

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

1

2. Pensions

The components of net periodic benefit cost for the three and nine months ended October 1, 2016, compared with the three and nine months ended September 26, 2015, were (in thousands):

	U.S. Pension Benefits										Foreign Plans
	Three Months Ended					Nine Months Ended					Three Months Ended						Nine Months Ended
	October 1, 2016		September 26, 2015			October 1, 2016		September 26, 2015			October 1, 2016			September 26, 2015			October 1, 2016			September 26, 2015
Service cost	$	-	$	250		$	-	$	750		$	332		$	314		$	997		$	944
Interest cost		-		1,032			-		3,094			496			512			1,489			1,538
Expected return on plan assets		-		(917	)		-		(2,749	)		(520	)		(599	)		(1,560	)		(1,800	)
Amortization of net loss		-		290			-		870			74			62			220			185
Total cost (credit) of the plan		-		655			-		1,965			382			289			1,146			867
Expected plan participants’ contribution		-		-			-		-			-			-			-			-
Net periodic benefit cost (credit)		-		655			-		1,965			382			289			1,146			867
Settlement charge		-		30,194			-		30,194			-			-			-			-
Total pension cost (credit)	$	-	$	30,849		$	-	$	32,159		$	382		$	289		$	1,146		$	867

* The U.S. pension plan was terminated effective July 30, 2014 and, following receipt of a favorable Letter of Determination from the IRS (dated April 14, 2015), all liabilities of the plan were settled during the third quarter of fiscal 2015.

The expected rate of return assumption on U.S. pension assets was 3.90% in 2015. The expected return on foreign pension assets is 4

.95% and 5.39% in 2016 and 2015, respectively.

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Note 13 - Segment and Geographic Information

9 Months Ended

Oct. 01, 2016

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

1

3

. Segment and Geographic 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.

Segment information for the three and nine months ended October 1, 2016 and September 26, 2015 are summarized as follows (in thousands):

	For the Three Months Ended						For the Nine Months Ended
	October 1 , 201 6			September 26, 2015			October 1, 2016			September 26, 2015
Net sales
Electronics	$	147,730		$	102,616		$	378,696		$	307,549
Automotive		106,341			81,475			309,644			251,464
Industrial		26,260			31,419			83,301			88,831
Total net sales	$	280,331		$	215,510		$	771,641		$	647,844
Depreciation and amortization
Electronics	$	7,694		$	5,811		$	20,783		$	17,384
Automotive		4,627			3,244			12,881			9,883
Industrial		1,733			1,260			4,561			3,839
Other (1)		(937	)		-			-			-
Total depreciation and amortization	$	13,117		$	10,315		$	38,225		$	31,106
Operating income (loss)
Electronics	$	34,571		$	20,923		$	82,246		$	61,755
Automotive		15,032			15,253			48,997			39,123
Industrial		57			5,781			3,758			13,220
Other (2 )		(22,134	)		(33,373	)		(45,345	)		(39,795	)
Total operating income		27,526			8,584			89,656			74,303
Interest expense		2,571			922			6,286			3,021
Foreign exchange (gain) loss		(4,700	)		(3,549	)		(7,114	)		(1,724	)
Other (income) expense, net		(778	)		(1,430	)		(1,040	)		(3,758	)
Income before income taxes	$	30,433		$	12,641		$	91,524		$	76,764

(1) Consists of intangible impairments related to its loss on sale of product line now reflected in selling, general and administrative expenses for the nine months ended October 1, 2016. (See Note 15).

(2) Included in “Other” Operating income (loss) for the 2016 third quarter is $14.8 million (14.8 million year-to-date) of charges related to the impairment of the custom products reporting unit, $5.9 million ($18.2 million year-to-date) of acquisition and integration costs associated with the company’s 2016 acquisitions, primarily PolySwitch, $0.6 million ($7.5 million year-to-date) of non-cash inventory charges relating to the company’s 2016 acquisitions, primarily PolySwitch, as described in Note 4, $1.9 million year-to-date in charges related to the closure of the company’s manufacturing facility in Denmark, $1.7 million year-to-date related to the company’s transfer of its reed sensor manufacturing operations from the U.S. and China to the Philippines and $0.9 million ($1.3 million year-to-date) related to internal legal restructuring costs.

Included in “Other” Operating income (loss) for the 2015 third quarter is $2.1 million ($6.8 million year-to-date) related to internal legal restructuring, $0.3 million ($0.7 million year-to-date) related to acquisition costs and $30.9 million ($32.2 million year-to-date) of expense related to the planned termination of the U.S. pension as described in Note 12

.

The company’s significant net sales by country for the three and nine months ended October 1, 2016 and September 26, 2015 are summarized as follows (in thousands):

	For the Three Months Ended ( a )				For the Nine Months Ended ( a )
	October 1, 2016		September 26, 2015		October 1, 2016		September 26, 2015
United States	$	92,475	$	85,049	$	270,659	$	258,030
China		70,215		49,345		181,134		143,694
Other countries		117,641		81,116		319,848		246,120
Total	$	280,331	$	215,510	$	771,641	$	647,844

(a) Sales by country represent sales to customer or distributor locations.

The company’s significant long-lived assets by country as of October 1, 2016 and January 2, 2016 are summarized as follows (in thousands):

	Long-lived assets (b)
	October 1 , 2016		January 2, 2016
United States	$	24,578	$	23,965
China		67,003		37,241
Mexico		51,988		47,130
Philippines		34,511		33,525
Other countries		45,773		20,707
Total	$	223,853	$	162,568

(b) Long-lived assets consist of net property, plant and equipment.

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Note 14 - Accumulated Other Comprehensive Income (Loss) (AOCI)

9 Months Ended

Oct. 01, 2016

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

1

4

. Accumulated Other Comprehensive Income (Loss) (AOCI)

The following table sets forth the changes in the components of AOCI by component (in thousands):

AOCI component	Balance at January 2, 2016			Other comprehensive income (loss) activity			Reclassification adjustment for expense included in net income		Balance at October 1, 2016
Pension and post employment liability and reclassification adjustments (a)	$	(8,722	)	$	(183	)	$	212	$	(8,693	)
Unrealized gain on investments (b)		11,584			(559	)		—		11,025
Foreign currency translation adjustment		(48,533	)		(8,951	)		—		(57,484	)
AOCI (loss) income	$	(45,671	)	$	(9,693	)	$	212	$	(55,152	)

(a) Balances are net of tax of $661 and $1,056 for January 2, 2016 and October 1, 2016, respectively.

(b) Balances are net of tax of $0 and $0 for January 2, 2016 and October 1, 2016, respectively.

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Note 15 - Product Line Sale

9 Months Ended

Oct. 01, 2016

Notes to Financial Statements

Asset Impairment Charges [Text Block]

1

5

. Product Line Sale

During the first quarter of 2016, the company sold its tangible and intangible assets relating to a marine product line that it acquired as part of its acquisition of Selco A/S in 2011. In connection with this sale, the company recorded a loss on sale of the product line of $1.4 million reflected within selling, general and administrative expenses for the nine months ended October 1, 2016. This loss was recognized as an “other” charge for segment reporting purposes.

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Note 16 - Recently Issued Accounting Pronouncements

9 Months Ended

Oct. 01, 2016

Notes to Financial Statements

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

1

6

.

Recently issued accounting pronouncements

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 ("ASU 2014-09"), Revenue from Contracts with Customers, which amends guidance for revenue recognition. Under the new standard, revenue will be recognized when control of the promised goods or services is transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services. The standard creates a five-step model that will generally require companies to use more judgment and make more estimates than under current guidance when considering the terms of contracts along with all relevant facts and circumstances. These include the identification of customer contracts and separating performance obligations, the determination of transaction price that potentially includes an estimate of variable consideration, allocating the transaction price to each separate performance obligation, and recognizing revenue in line with the pattern of transfer. In August 2015, the FASB issued an No. 2015-14, "Deferral of Effective Date" (Topic 606) to defer the effective date for all entities by one year. The new standard will become effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted as of annual reporting periods beginning after December 15, 2016. Companies have the option of using either a full or modified retrospective approach in applying this standard. In March 2016, the FASB issued ASU No. 2016-08, "Principal versus Agent Considerations (Reporting Revenue Gross versus Net)" (Topic 606). ASU 2016-08 provides clarification for the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10, ASU No. 2016-11, and ASU 2016-12, all of which provide additional clarification of the original revenue standard. The company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.

In July 2015, the FASB issued Accounting Standards Update No. 2015-11 ("ASU 2015-11"), Simplifying the Measurement of Inventory. ASU 2015-11 clarifies that inventory should be held at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price, less the estimated costs to complete, dispose and transport such inventory. ASU 2015-11 will be effective for fiscal years and interim periods beginning after December 15, 2016. ASU 2015-11 is required to be applied prospectively and early adoption is permitted. The company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (“ASU 2016-02”), Leases (Topic 842). ASU 2016-02 establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for capital leases and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09 ("ASU 2016-09"), Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 will directly impact the tax administration of equity plans. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted and any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.

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Note 17 - Subsequent Event

9 Months Ended

Oct. 01, 2016

Notes to Financial Statements

Subsequent Events [Text Block]

1

7

.

Subsequent Event

On October 14

, 2016, the Company completed the sale of its portable electrical house (e-house) business, located in Winnipeg, Manitoba, Canada. This business was included in the company’s custom products reporting unit within the Industrial segment, and mainly served mining and utility markets. Neither the sale nor the historical results of operation of the sold business are material to the company’s financial results.

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Note 2 - Correction of Immaterial Errors (Tables)

9 Months Ended

Oct. 01, 2016

Adjustments to Statement of Shareholders' Equity Elements [Member]

Notes Tables

Schedule of Error Corrections and Prior Period Adjustments [Table Text Block]

	Year Ended January 2, 2016							Year Ended December 27, 2014
	Previously Reported		Adjustment			As Revised		Previously Reported		Adjustment			As Revised
Net income	$	82,466	$	(1,600	)	$	80,866	$	99,418	$	(1,318	)	$	98,100
Comprehensive income		57,921		(1,600	)		56,321		57,875		(1,318	)		56,557
Retained earnings		562,717		(4,946	)		557,771		523,302		(3,346	)		519,956
Total shareholders’ equity		744,198		(4,946	)		739,252		727,665		(3,346	)		724,319

	December 28, 2013
	Previously Reported		Adjustment			As Revised
Retained earnings	$	445,059	$	(2,028	)	$	443,031
Total shareholders’ equity		686,916		(2,028	)		684,888

Adjustments to Statement of Cash Flow Elements [Member]

Notes Tables

Schedule of Error Corrections and Prior Period Adjustments [Table Text Block]

	Year Ended January 2, 2016								Year Ended December 27, 2014
	Previously Reported			Adjustment			As Revised		Previously Reported			Adjustment			As Revised
Net income	$	82,466		$	(1,600	)	$	80,866	$	99,418		$	(1,318	)	$	98,100
Accrued taxes		(1,043	)		1,600			557		(549	)		1,318			769
Net cash provided by operating activities		165,826			—			165,826		153,141			—			153,141

Adjustments to Statement of Income Elements [Member]

Notes Tables

Schedule of Error Corrections and Prior Period Adjustments [Table Text Block]

	Year Ended January 2, 2016							Year Ended December 27, 2014
	Previously Reported		Adjustment			As Revised		Previously Reported		Adjustment			As Revised
Income taxes	$	24,482	$	1,600		$	26,082	$	32,228	$	1,318		$	33,546
Net income		82,466		(1,600	)		80,866		99,418		(1,318	)		98,100
Net income per share - Basic	$	3.65	$	(0.07	)	$	3.58	$	4.41	$	(0.06	)	$	4.35
Net income per share - Diluted	$	3.63	$	(0.07	)	$	3.56	$	4.37	$	(0.05	)	$	4.32

Adjustments to Balance Sheet Elements [Member]

Notes Tables

Schedule of Error Corrections and Prior Period Adjustments [Table Text Block]

	January 2, 2016
	Previously Reported		Adjustment			As Revised
Other long-term liabilities	$	12,809	$	4,946		$	17,755
Total equity		744,198		(4,946	)		739,252

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Note 4 - Acquisition of Businesses (Tables)

9 Months Ended

Oct. 01, 2016

Notes Tables

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

Total purchase consideration:
Cash	$	104,000
Preliminary allocation of consideration to assets acquired and liabilities assumed:
Current assets, net		4,616
Customer relationships		31,650
Patented and unpatented technologies		10,250
Non-compete agreement		2,500
Goodwill		54,984
	$	104,000

Total purchase consideration:
Cash, net of acquired cash	$	18,909
Additional consideration payable		253
Total purchase consideration	$	19,162
Preliminary allocation of consideration to assets acquired and liabilities assumed:
Current assets, net	$	13,560
Property, plant and equipment		1,693
Customer relationships		3,050
Patented and unpatented technologies		224
Trademarks and tradenames		1,849
Goodwill		7,651
Current liabilities		(7,421	)
Other non-current liabilities		(1,444	)
	$	19,162

Total purchase consideration:
Original consideration	$	350,000
Post closing consideration adjustment received		(2,029	)
Acquired cash		(5,719	)
Acquired cash to be returned to seller		5,719
Total purchase consideration	$	347,971
Preliminary allocation of consideration to assets acquired and liabilities assumed:
Current assets, net	$	59,751
Property, plant and equipment		52,025
Land lease		4,290
Patented and unpatented technologies		56,425
Customer relationships		39,720
Goodwill		163,635
Other long-term assets		10,711
Current liabilities		(37,068	)
Other non-current liabilities		(1,518	)
	$	347,971

Total purchase consideration:
Cash	$	5,788
Estimated additional consideration payable		901
Total purchase consideration	$	6,689
Preliminary allocation of consideration to assets acquired and liabilities assumed:
Cash	$	230
Current assets, net		4,011
Property, plant and equipment		1,097
Goodwill		2,552
Patents		2,845
Current liabilities		(1,478	)
Other non-current liabilities		(2,568	)
	$	6,689

Business Acquisition, Pro Forma Information [Table Text Block]

	For the Three Months Ended				For the Nine Months Ended
(in thousands, except per share amounts)	October 1 , 201 6		September 26 , 201 5		October 1 , 201 6		September 26 , 201 5
Net sales	$	290,377	$	278,093	$	846,127	$	834,372
Income before income taxes		32,728		17,823		110,853		88,124
Net income		33,086		6,324		96,713		69,110
Net income per share — basic		1.47		0.28		4.30		3.05
Net income per share — diluted		1.46		0.28		4.26		3.04

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Note 6 - Inventories (Tables)

9 Months Ended

Oct. 01, 2016

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	October 1 , 2016		January 2, 2016
Raw material	$	35,450	$	33,599
Work in process		24,703		16,479
Finished goods		61,463		48,551
Total inventories	$	121,616	$	98,629

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Note 8 - Debt (Tables)

9 Months Ended

Oct. 01, 2016

Notes Tables

Schedule of Long-term Debt Instruments [Table Text Block]

	October 1 , 2016			January 2, 2016
Revolving credit facility	$	315,500		$	77,000
Term loan		121,875			85,000
Entrusted loan		5,173			9,474
Unamortized debt issuance costs		(2,092	)		(721	)
Total debt		440,456			170,753
Less: Current maturities		(6,250	)		(87,000	)
Total long-term debt	$	434,206		$	83,753

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Note 9 - Fair Value of Assets and Liabilities (Tables)

9 Months Ended

Oct. 01, 2016

Notes Tables

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investment in Polytronics	$	11,474	$	—	$	—	$	11,474
Total	$	11,474	$	—	$	—	$	11,474

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investment in Polytronics	$	11,697	$	—	$	—	$	11,697
Total	$	11,697	$	—	$	—	$	11,697

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Note 10 - Earnings Per Share (Tables)

9 Months Ended

Oct. 01, 2016

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	For the Three Months Ended				For the Nine Months Ended
	October 1 , 201 6		September 26, 2015		October 1 , 201 6		September 26, 2015
Net income	$	30.802	$	11,324	$	77,243	$	60,003
Average shares outstanding - Basic		22,578		22,581		22,515		22,623
Net effect of dilutive stock options and restricted share units		156		112		160		148
Average shares - Diluted		22,734		22,693		22,675		22,771
Net income per share:
Basic	$	1.36	$	0.50	$	3.43	$	2.65
Diluted	$	1.35	$	0.50	$	3.41	$	2.64

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Note 12 - Pensions (Tables)

9 Months Ended

Oct. 01, 2016

Notes Tables

Schedule of Net Benefit Costs [Table Text Block]

	U.S. Pension Benefits										Foreign Plans
	Three Months Ended					Nine Months Ended					Three Months Ended						Nine Months Ended
	October 1, 2016		September 26, 2015			October 1, 2016		September 26, 2015			October 1, 2016			September 26, 2015			October 1, 2016			September 26, 2015
Service cost	$	-	$	250		$	-	$	750		$	332		$	314		$	997		$	944
Interest cost		-		1,032			-		3,094			496			512			1,489			1,538
Expected return on plan assets		-		(917	)		-		(2,749	)		(520	)		(599	)		(1,560	)		(1,800	)
Amortization of net loss		-		290			-		870			74			62			220			185
Total cost (credit) of the plan		-		655			-		1,965			382			289			1,146			867
Expected plan participants’ contribution		-		-			-		-			-			-			-			-
Net periodic benefit cost (credit)		-		655			-		1,965			382			289			1,146			867
Settlement charge		-		30,194			-		30,194			-			-			-			-
Total pension cost (credit)	$	-	$	30,849		$	-	$	32,159		$	382		$	289		$	1,146		$	867

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Note 13 - Segment and Geographic Information (Tables)

9 Months Ended

Oct. 01, 2016

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	For the Three Months Ended						For the Nine Months Ended
	October 1 , 201 6			September 26, 2015			October 1, 2016			September 26, 2015
Net sales
Electronics	$	147,730		$	102,616		$	378,696		$	307,549
Automotive		106,341			81,475			309,644			251,464
Industrial		26,260			31,419			83,301			88,831
Total net sales	$	280,331		$	215,510		$	771,641		$	647,844
Depreciation and amortization
Electronics	$	7,694		$	5,811		$	20,783		$	17,384
Automotive		4,627			3,244			12,881			9,883
Industrial		1,733			1,260			4,561			3,839
Other (1)		(937	)		-			-			-
Total depreciation and amortization	$	13,117		$	10,315		$	38,225		$	31,106
Operating income (loss)
Electronics	$	34,571		$	20,923		$	82,246		$	61,755
Automotive		15,032			15,253			48,997			39,123
Industrial		57			5,781			3,758			13,220
Other (2 )		(22,134	)		(33,373	)		(45,345	)		(39,795	)
Total operating income		27,526			8,584			89,656			74,303
Interest expense		2,571			922			6,286			3,021
Foreign exchange (gain) loss		(4,700	)		(3,549	)		(7,114	)		(1,724	)
Other (income) expense, net		(778	)		(1,430	)		(1,040	)		(3,758	)
Income before income taxes	$	30,433		$	12,641		$	91,524		$	76,764

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]

	For the Three Months Ended ( a )				For the Nine Months Ended ( a )
	October 1, 2016		September 26, 2015		October 1, 2016		September 26, 2015
United States	$	92,475	$	85,049	$	270,659	$	258,030
China		70,215		49,345		181,134		143,694
Other countries		117,641		81,116		319,848		246,120
Total	$	280,331	$	215,510	$	771,641	$	647,844

Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block]

	Long-lived assets (b)
	October 1 , 2016		January 2, 2016
United States	$	24,578	$	23,965
China		67,003		37,241
Mexico		51,988		47,130
Philippines		34,511		33,525
Other countries		45,773		20,707
Total	$	223,853	$	162,568

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Note 14 - Accumulated Other Comprehensive Income (Loss) (AOCI) (Tables)

9 Months Ended

Oct. 01, 2016

Notes Tables

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

AOCI component	Balance at January 2, 2016			Other comprehensive income (loss) activity			Reclassification adjustment for expense included in net income		Balance at October 1, 2016
Pension and post employment liability and reclassification adjustments (a)	$	(8,722	)	$	(183	)	$	212	$	(8,693	)
Unrealized gain on investments (b)		11,584			(559	)		—		11,025
Foreign currency translation adjustment		(48,533	)		(8,951	)		—		(57,484	)
AOCI (loss) income	$	(45,671	)	$	(9,693	)	$	212	$	(55,152	)

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Note 2 - Correction of Immaterial Errors (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended					60 Months Ended
	Oct. 01, 2016	Sep. 26, 2015	Oct. 01, 2016	Sep. 26, 2015	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013	Dec. 29, 2012	Dec. 31, 2011	Jan. 02, 2016
Restatement Adjustment [Member] | Foreign Tax Authority [Member]
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense										$ 1,500
Income Tax Expense (Benefit)					$ 1,600	$ 1,300	$ 1,000	$ 900	$ 100	$ 4,900
Restatement Adjustment [Member]
Income Tax Expense (Benefit)					1,600	1,318
Income Tax Expense (Benefit)	$ (369)	$ 1,317	$ 14,281	$ 16,761	$ 26,082	$ 33,546

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Note 2 - Correction of Immaterial Errors - Effects of Adjustments to Correct Immaterial Errors, Balance Sheet (Details) - USD ($) $ in Thousands	Oct. 01, 2016	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Scenario, Previously Reported [Member]
Other long-term liabilities		$ 12,809
Total equity		744,198	$ 727,665	$ 686,916
Restatement Adjustment [Member]
Other long-term liabilities		4,946
Total equity		(4,946)	(3,346)	(2,028)
Other long-term liabilities	$ 19,037	17,755
Total equity	$ 803,376	$ 739,252	$ 724,319	$ 684,888

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Note 2 - Correction of Immaterial Errors - Effects of Adjustments to Correct Immaterial Errors, Statements of Net Income (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended			12 Months Ended
	Oct. 01, 2016	Sep. 26, 2015	Oct. 01, 2016	Oct. 01, 2016	Sep. 26, 2015	Jan. 02, 2016	Dec. 27, 2014
Scenario, Previously Reported [Member]
Income Tax Expense (Benefit)						$ 24,482	$ 32,228
Net income						$ 82,466	$ 99,418
Net income per share - Basic (in dollars per share)						$ 3.65	$ 4.41
Net income per share - Diluted (in dollars per share)						$ 3.63	$ 4.37
Restatement Adjustment [Member]
Income Tax Expense (Benefit)						$ 1,600	$ 1,318
Net income						$ (1,600)	$ (1,318)
Net income per share - Basic (in dollars per share)						$ (0.07)	$ (0.06)
Net income per share - Diluted (in dollars per share)						$ (0.07)	$ (0.05)
Income Tax Expense (Benefit)	$ (369)	$ 1,317		$ 14,281	$ 16,761	$ 26,082	$ 33,546
Net income	$ 30,802	$ 11,324	$ 77,243	$ 77,243	$ 60,003	$ 80,866	$ 98,100
Net income per share - Basic (in dollars per share)	$ 1.36	$ 0.50		$ 3.43	$ 2.65	$ 3.58	$ 4.35
Net income per share - Diluted (in dollars per share)	$ 1.35	$ 0.50		$ 3.41	$ 2.64	$ 3.56	$ 4.32

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Note 2 - Correction of Immaterial Errors - Effects of Adjustments to Correct Immaterial Errors, Statements of Cash Flows (Details) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Oct. 01, 2016	Sep. 26, 2015	Jan. 02, 2016	Dec. 27, 2014
Scenario, Previously Reported [Member]
Net income			$ 82,466	$ 99,418
Accrued taxes			(1,043)	(549)
Net cash provided by operating activities			165,826	153,141
Restatement Adjustment [Member]
Net income			(1,600)	(1,318)
Accrued taxes			1,600	1,318
Net cash provided by operating activities
Net income	$ 77,243	$ 60,003	80,866	98,100
Accrued taxes	(23,613)	4,006	557	769
Net cash provided by operating activities	$ 100,015	$ 113,583	$ 165,826	$ 153,141

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Note 2 - Correction of Immaterial Errors - Effects of Adjustments to Correct Immaterial Errors, Statements of Equity (Details) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Oct. 01, 2016	Sep. 26, 2015	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Scenario, Previously Reported [Member] | Retained Earnings [Member]
Total equity			$ 562,717	$ 523,302	$ 445,059
Scenario, Previously Reported [Member]
Net income			82,466	99,418
Comprehensive income			57,921	57,875
Total equity			744,198	727,665	686,916
Restatement Adjustment [Member] | Retained Earnings [Member]
Total equity			(4,946)	(3,346)	(2,028)
Restatement Adjustment [Member]
Net income			(1,600)	(1,318)
Comprehensive income			(1,600)	(1,318)
Total equity			(4,946)	(3,346)	(2,028)
Retained Earnings [Member]
Total equity			557,771	519,956	443,031
Net income	$ 77,243	$ 60,003	80,866	98,100
Comprehensive income			56,321	56,557
Total equity	$ 803,376		$ 739,252	$ 724,319	$ 684,888

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Note 4 - Acquisition of Businesses (Details Textual) - USD ($) $ in Thousands							3 Months Ended		9 Months Ended
		Oct. 01, 2016	Aug. 29, 2016	Apr. 04, 2016	Mar. 25, 2016	Oct. 01, 2015	Oct. 01, 2016	Sep. 26, 2015	Oct. 01, 2016	Sep. 26, 2015
TVS Diode, Thyristor and IGBT Business [Member] | Customer Relationships [Member]
Finite-Lived Intangible Asset, Useful Life			13 years 182 days
TVS Diode, Thyristor and IGBT Business [Member] | Patented and Unpatented Technologies [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life			6 years
TVS Diode, Thyristor and IGBT Business [Member] | Patented and Unpatented Technologies [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life			8 years 182 days
TVS Diode, Thyristor and IGBT Business [Member] | Noncompete Agreements [Member]
Finite-Lived Intangible Asset, Useful Life			4 years
TVS Diode, Thyristor and IGBT Business [Member]
Business Combination, Consideration Transferred			$ 104,000
Business Acquisition Inventory Stepup			500
Noncash Charges Related To Inventory Stepup			300
Revenue, Net							$ 5,600		$ 5,600
Payments to Acquire Businesses, Gross			$ 104,000
Menber's S.p.A. [Member] | Customer Relationships [Member]
Finite-Lived Intangible Asset, Useful Life				10 years
Menber's S.p.A. [Member] | Patented and Unpatented Technologies [Member]
Finite-Lived Intangible Asset, Useful Life				5 years
Menber's S.p.A. [Member] | Trademarks and Trade Names [Member]
Finite-Lived Intangible Asset, Useful Life				10 years
Menber's S.p.A. [Member]
Business Combination, Consideration Transferred				$ 19,162
Business Acquisition Inventory Stepup				200
Revenue, Net							5,300		12,000
Payments to Acquire Businesses, Gross		$ 18,900		$ 18,909
PolySwitch [Member] | Customer Relationships [Member]
Finite-Lived Intangible Asset, Useful Life					15 years
PolySwitch [Member] | Patented and Unpatented Technologies [Member]
Finite-Lived Intangible Asset, Useful Life					10 years
PolySwitch [Member]
Business Combination, Consideration Transferred					$ 347,971
Business Acquisition Inventory Stepup					6,900
Revenue, Net							47,900		84,400
Payments to Acquire Businesses, Gross					$ 342,300
Business Acquisition, Percentage of Voting Interests Acquired					100.00%
Sigmar [Member] | Patents [Member]
Finite-Lived Intangible Asset, Useful Life						10 years
Sigmar [Member]
Business Combination, Consideration Transferred						$ 6,689
Payments to Acquire Businesses, Gross						$ 5,788
Business Acquisition, Percentage of Voting Interests Acquired						100.00%
Payments to Acquire Businesses, Net of Cash Acquired						$ 6,700
Payments for Previous Acquisition									1,000
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High		$ 900					900		900
Revenue, Net	[1]						$ 280,331	$ 215,510	771,641	$ 647,844
Payments to Acquire Businesses, Net of Cash Acquired									$ (1,391)

[1] Sales by country represent sales to customer or distributor locations.

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Note 4 - Acquisition of Businesses - Preliminary Price Allocation (Details) - USD ($) $ in Thousands	Oct. 01, 2016	Aug. 29, 2016	Apr. 04, 2016	Mar. 25, 2016	Oct. 01, 2015	Jan. 02, 2016	Mar. 25, 2015
TVS Diode, Thyristor and IGBT Business [Member] | Customer Relationships [Member]
Intangible assets, other than goodwill		$ 31,650
TVS Diode, Thyristor and IGBT Business [Member] | Patented and Unpatented Technologies [Member]
Intangible assets, other than goodwill		10,250
TVS Diode, Thyristor and IGBT Business [Member] | Noncompete Agreements [Member]
Intangible assets, other than goodwill		2,500
TVS Diode, Thyristor and IGBT Business [Member]
Cash		104,000
Current assets, net		4,616
Goodwill		54,984
		104,000
Cash, net of acquired cash		104,000
Total purchase consideration		104,000
Current assets, net		$ 4,616
Menber's S.p.A. [Member] | Customer Relationships [Member]
Intangible assets, other than goodwill			$ 3,050
Menber's S.p.A. [Member] | Patented and Unpatented Technologies [Member]
Intangible assets, other than goodwill			224
Menber's S.p.A. [Member] | Trademarks and Trade Names [Member]
Intangible assets, other than goodwill			1,849
Menber's S.p.A. [Member]
Cash	$ 18,900		18,909
Current assets, net			13,560
Goodwill			7,651
			19,162
Cash, net of acquired cash	18,900		18,909
Additional consideration payable			253
Total purchase consideration			19,162
Property, plant and equipment			1,693
Current liabilities			(7,421)
Other non-current liabilities			(1,444)
Acquired cash to be returned to seller			253
Current assets, net			13,560
Other non-current liabilities			$ (1,444)
PolySwitch [Member] | Customer Relationships [Member]
Intangible assets, other than goodwill				$ 39,720
PolySwitch [Member] | Patented and Unpatented Technologies [Member]
Intangible assets, other than goodwill				56,425
PolySwitch [Member]
Cash				342,300
Current assets, net				59,751
Goodwill				163,635
				347,971
Cash, net of acquired cash				342,300
Additional consideration payable				5,719
Total purchase consideration				347,971
Property, plant and equipment				52,025
Current liabilities				(37,068)
Other non-current liabilities				(1,518)
Original consideration				350,000
Post closing consideration adjustment received				(2,029)
Acquired cash				(5,719)
Acquired cash to be returned to seller				5,719
Current assets, net				59,751
Land lease				4,290
Other long-term assets							$ 10,711
Other non-current liabilities				$ (1,518)
Sigmar [Member] | Patents [Member]
Intangible assets, other than goodwill					$ 2,845
Sigmar [Member]
Cash					5,788
Current assets, net					4,011
Goodwill					2,552
					6,689
Cash, net of acquired cash					5,788
Additional consideration payable					901
Total purchase consideration					6,689
Property, plant and equipment					1,097
Current liabilities					(1,478)
Other non-current liabilities					(2,568)
Acquired cash to be returned to seller					901
Current assets, net					4,011
Cash					230
Other non-current liabilities					$ (2,568)
Goodwill	$ 409,527					$ 189,767

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Note 4 - Acquisition of Businesses - Business Acquisition Pro Forma Information (Details) - PolySwitch [Member] - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 01, 2016	Sep. 26, 2015	Oct. 01, 2016	Sep. 26, 2015
Net sales	$ 290,377	$ 278,093	$ 846,127	$ 834,372
Income before income taxes	32,728	17,823	110,853	88,124
Net income	$ 33,086	$ 6,324	$ 96,713	$ 69,110
Net income per share — basic (in dollars per share)	$ 1.47	$ 0.28	$ 4.30	$ 3.05
Net income per share — diluted (in dollars per share)	$ 1.46	$ 0.28	$ 4.26	$ 3.04

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Note 5 - Impairment of Goodwill and Intangible Assets (Details Textual) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Oct. 01, 2016	Sep. 26, 2015	Oct. 01, 2016	Sep. 26, 2015	Dec. 26, 2015	Jul. 02, 2016
Industrial [Member] | Custom Products Reporting Unit [Member] | Trade Names [Member]
Impairment of Intangible Assets (Excluding Goodwill)	$ 3,800,000
Intangible Assets, Net (Excluding Goodwill)	700,000		$ 700,000
Industrial [Member] | Custom Products Reporting Unit [Member] | Customer Relationships [Member]
Impairment of Intangible Assets (Excluding Goodwill)	2,200,000
Intangible Assets, Net (Excluding Goodwill)	0		0
Industrial [Member] | Custom Products Reporting Unit [Member]
Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount					12.00%	10.00%
Goodwill, Impairment Loss	8,800,000				$ 0
Goodwill and Intangible Asset Impairment	14,800,000
Impairment of Intangible Assets (Excluding Goodwill)	6,000,000
Goodwill and Intangible Asset Impairment	$ 14,809,000		$ 14,809,000

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Note 6 - Inventories - Components of Inventories (Details) - USD ($) $ in Thousands	Oct. 01, 2016	Jan. 02, 2016
Raw material	$ 35,450	$ 33,599
Work in process	24,703	16,479
Finished goods	61,463	48,551
Total inventories	$ 121,616	$ 98,629

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Note 7 - Investments (Details Textual) € in Millions, $ in Millions	9 Months Ended
	Oct. 01, 2016 USD ($)	Oct. 01, 2016 EUR (€)	Jan. 02, 2016 USD ($)	Jan. 02, 2016 EUR (€)
Monolith [Member]
Cost Method Investments, Fair Value Disclosure	$ 3.5		$ 3.5
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, before Tax	(0.6)
Cost Method Investments			$ 3.5
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners			12.00%	12.00%
Polytronics [Member]
Marketable Securities, Equity Securities	$ 11.5	€ 10.2	$ 11.7	€ 10.7

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Note 8 - Debt (Details Textual) $ in Thousands, ¥ in Millions				9 Months Ended
	Oct. 01, 2016 USD ($)	Jul. 02, 2016	Mar. 04, 2016 USD ($)	Oct. 01, 2016 USD ($)	Sep. 26, 2015 USD ($)	Oct. 01, 2016 CNY (¥)	Jan. 02, 2016 USD ($)	Dec. 27, 2014 USD ($)	Dec. 27, 2014 CNY (¥)
Bank of America [Member] | Unsecured Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate	2.03%	1.50%
Bank of America [Member] | Unsecured Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity			$ 575,000
Line of Credit Facility, Remaining Borrowing Capacity	$ 259,400			$ 259,400
Bank of America [Member]
Line of Credit Facility, Maximum Borrowing Capacity			700,000
Loans Payable to Bank			$ 125,000
Line of Credit Facility, Expiration Period			5 years
Letters of Credit Outstanding, Amount	$ 100			$ 100
Entrustment Loan Member
Entrusted Loan								$ 17,900	¥ 110.0
Debt Instrument, Interest Rate, Stated Percentage	5.25%			5.25%		5.25%
Entrusted Loan, Total	$ 5,200			$ 5,200		¥ 34.5
Loans Payable to Bank	121,875			121,875			$ 85,000
Entrusted Loan	$ 5,173			5,173			$ 9,474
Payments of Debt Issuance Costs				$ 1,701	$ 42

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Note 8 - Debt - Carrying Amounts of Long-term Debt (Details) - USD ($) $ in Thousands	Oct. 01, 2016	Jan. 02, 2016
Revolving credit facility	$ 315,500	$ 77,000
Term loan	121,875	85,000
Entrusted loan	5,173	9,474
Unamortized debt issuance costs	(2,092)	(721)
Total debt	440,456	170,753
Less: Current maturities	6,250	87,000
Total long-term debt	$ 434,206	$ 83,753

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Note 9 - Fair Value of Assets and Liabilities (Details Textual) - USD ($) $ in Millions	Oct. 01, 2016	Jan. 02, 2016
Monolith [Member]
Cost Method Investments, Fair Value Disclosure	$ 3.5	$ 3.5

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Note 9 - Fair Value of Assets and Liabilities - Assets Measured at Fair Value (Details) - Polytronics [Member] - USD ($) $ in Thousands	Oct. 01, 2016	Jan. 02, 2016
Fair Value, Inputs, Level 1 [Member]
Investment in Polytronics	$ 11,474	$ 11,697
Total	11,474	11,697
Investment in Polytronics	11,474	11,697
Total	$ 11,474	$ 11,697

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Note 10 - Earnings Per Share (Details Textual) - shares	3 Months Ended		9 Months Ended
	Oct. 01, 2016	Sep. 26, 2015	Oct. 01, 2016	Sep. 26, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	76,845	144,031	45,591	108,193

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Note 10 - Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended			12 Months Ended
	Oct. 01, 2016	Sep. 26, 2015	Oct. 01, 2016	Oct. 01, 2016	Sep. 26, 2015	Jan. 02, 2016	Dec. 27, 2014
Net income	$ 30,802	$ 11,324	$ 77,243	$ 77,243	$ 60,003	$ 80,866	$ 98,100
Basic (in shares)	22,578	22,581		22,515	22,623
Net effect of dilutive stock options and restricted share units (in shares)	156	112		160	148
Average shares - Diluted (in shares)	22,734	22,693		22,675	22,771
Net income per share (see Note 10):
Net income per share - Basic (in dollars per share)	$ 1.36	$ 0.50		$ 3.43	$ 2.65	$ 3.58	$ 4.35
Net income per share - Diluted (in dollars per share)	$ 1.35	$ 0.50		$ 3.41	$ 2.64	$ 3.56	$ 4.32

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Note 11 - Income Taxes (Details Textual)	3 Months Ended		9 Months Ended
	Oct. 01, 2016	Sep. 26, 2015	Oct. 01, 2016	Sep. 26, 2015
Effective Income Tax Rate Reconciliation, Percent	(1.20%)	10.40%	15.60%	21.80%

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Note 12 - Pensions (Details Textual)	9 Months Ended	12 Months Ended
	Oct. 01, 2016	Jan. 02, 2016
United States Pension Plan of US Entity [Member]
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-term Return on Assets		3.90%
Foreign Pension Plan [Member]
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-term Return on Assets	4.95%	5.39%

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Note 12 - Pensions - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Oct. 01, 2016		Sep. 26, 2015	Oct. 01, 2016	Sep. 26, 2015
United States Pension Plan of US Entity [Member]
Service cost		[1]	$ 250		$ 750
Interest cost		[1]	1,032		3,094
Expected return on plan assets			(917)		(2,749)
Amortization of net loss		[1]	290		870
Total cost (credit) of the plan		[1]	655		1,965
Net periodic benefit cost (credit)		[1]	655		1,965
Pension settlement expense			30,194		30,194
Total pension cost (credit)			30,849		32,159
Foreign Pension Plan [Member]
Service cost	332		314	997	944
Interest cost	496		512	1,489	1,538
Expected return on plan assets	(520)		(599)	(1,560)	(1,800)
Amortization of net loss	74		62	220	185
Total cost (credit) of the plan	382		289	1,146	867
Net periodic benefit cost (credit)	382		289	1,146	867
Pension settlement expense
Total pension cost (credit)	382		289	1,146	867
Pension settlement expense			$ 30,194		$ 30,194

[1] The U.S. pension plan was terminated effective July 30, 2014 and, following receipt of a favorable Letter of Determination from the IRS (dated April14, 2015), all liabilities of the plan were settled during the third quarter of fiscal 2015.

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Note 13 - Segment and Geographic Information (Details Textual) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 01, 2016 USD ($)	Sep. 26, 2015 USD ($)	Oct. 01, 2016 USD ($)	Sep. 26, 2015 USD ($)
Custom Products Reporting Unit [Member]
Asset Impairment Charges	$ 14,800		$ 14,800
PolySwitch [Member]
Business Combination, Acquisition Related Costs	5,900		18,200
Inventory Charge Related to Step-up in Cost Basis	600		7,500
DENMARK
Business Exit Costs			1,900
Facility Relocation [Member]
Restructuring Charges			1,700
Internal Legal Restructuring Costs [Member]
Restructuring Charges	$ 900	$ 2,100	$ 1,300	$ 6,800
Number of Operating Segments			3
Business Combination, Acquisition Related Costs		300		700
Inventory Charge Related to Step-up in Cost Basis			$ 7,456
Termination of U.S. Pension Plan, Expense		$ 30,900		$ 32,200

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Note 13 - Segment and Geographic Information - Business Unit Segment Information (Details) - USD ($) $ in Thousands		3 Months Ended			9 Months Ended
		Oct. 01, 2016		Sep. 26, 2015	Oct. 01, 2016	Sep. 26, 2015
Electronics [Member]
Net sales		$ 147,730		$ 102,616	$ 378,696	$ 307,549
Depreciation and amortization		7,694		5,811	20,783	17,384
Operating income		34,571		20,923	82,246	61,755
Automotive [Member]
Net sales		106,341		81,475	309,644	251,464
Depreciation and amortization		4,627		3,244	12,881	9,883
Operating income		15,032		15,253	48,997	39,123
Industrial [Member]
Net sales		26,260		31,419	83,301	88,831
Depreciation and amortization		1,733		1,260	4,561	3,839
Operating income		57		5,781	3,758	13,220
Other Segments [Member]
Depreciation and amortization		(937)	[1]
Operating income	[2]	(22,134)		(33,373)	(45,345)	(39,795)
Net sales	[3]	280,331		215,510	771,641	647,844
Depreciation and amortization		13,117		10,315	38,225	31,106
Operating income		27,526		8,584	89,656	74,303
Interest expense		2,571		922	6,286	3,021
Foreign exchange (gain) loss		(4,700)		(3,549)	(7,114)	(1,724)
Other (income) expense, net		(778)		(1,430)	(1,040)	(3,758)
Income before income taxes		$ 30,433		$ 12,641	$ 91,524	$ 76,764

[1] Consists of intangible impairments related to its loss on sale of product line. (See Note 15).

[2] Included in "Other" Operating income (loss) for the 2016 third quarter is $14.8 million (14.8 million year-to-date) of charges related to the impairment of the custom business unit, $5.9 million ($18.2 million year-to-date) of acquisition-related costs primarily related to legal and integration costs associated with the company's acquisition of the PolySwitch business, a $0.6 million ($7.5 million year-to-date) inventory adjustment relating to the PolySwitch acquisition as described in Note 4, $1.9 million year-to-date in charges related to the closure of the company's manufacturing facility in Denmark, $1.7 million year-to-date related to the company's transfer of its reed sensor manufacturing operations from the U.S. and China to the Philippines and $0.9 million ($1.3 million year-to-date) related to internal legal restructuring costs.

[3] Sales by country represent sales to customer or distributor locations.

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Note 13 - Segment and Geographic Information - Net Sales by Geographical Area (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Oct. 01, 2016	Sep. 26, 2015	Oct. 01, 2016	Sep. 26, 2015
UNITED STATES
Net sales	[1]	$ 92,475	$ 85,049	$ 270,659	$ 258,030
CHINA
Net sales	[1]	70,215	49,345	181,134	143,694
Other Countries [Member]
Net sales	[1]	117,641	81,116	319,848	246,120
Net sales	[1]	$ 280,331	$ 215,510	$ 771,641	$ 647,844

[1] Sales by country represent sales to customer or distributor locations.

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Note 13 - Segment and Geographic Information - Long-lived Assets by Geographical Area (Details) - USD ($) $ in Thousands		Oct. 01, 2016	Jan. 02, 2016
UNITED STATES
Long-lived assets	[1]	$ 24,578	$ 23,965
CHINA
Long-lived assets	[1]	67,003	37,241
MEXICO
Long-lived assets		51,988	47,130
PHILIPPINES
Long-lived assets		34,511	33,525
Other Countries [Member]
Long-lived assets	[1]	45,773	20,707
Long-lived assets	[1]	$ 223,853	$ 162,568

[1] Long-lived assets consists of net property, plant and equipment.

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Note 14 - Accumulated Other Comprehensive Income (Loss) (AOCI) (Details Textual) - USD ($)	Oct. 01, 2016	Jan. 02, 2016
Accumulated Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Tax	$ 1,056,000	$ 661,000
Accumulated Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Tax	$ 0	$ 0

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Note 14 - Accumulated Other Comprehensive Income (Loss) (AOCI) - Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Oct. 01, 2016	Sep. 26, 2015	Oct. 01, 2016	Oct. 01, 2016		Sep. 26, 2015
Pension and post employment liability and reclassification adjustments(a)	[1]				$ (8,722)
Pension and post employment liability and reclassification adjustments(a)	[1]				(183)
Pension and post employment liability and reclassification adjustments(a)			$ 21,124		212	[1]	$ 21,124
Pension and post employment liability and reclassification adjustments(a)	[1]	(8,693)		(8,693)	(8,693)
Unrealized gain on investments(b)	[2]				11,584
Unrealized gain on investments(b)	[2]				(559)
Unrealized gain on investments(b)	[2]	11,025		11,025	11,025
Foreign currency translation adjustment					(48,533)
Foreign currency translation adjustment					(8,951)
Foreign currency translation adjustment		(57,484)		(57,484)	(57,484)
AOCI (loss) income					(45,671)
AOCI (loss) income					(9,693)
AOCI (loss) income		$ (55,152)		$ (55,152)	$ (55,152)

[1] Balances are net of tax of $654 and $661 for July 2, 2016 and January 2, 2016, respectively.

[2] Balances are net of tax of $0 and $0 for July 2, 2016 and January 2, 2016, respectively.

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Note 15 - Product Line Sale (Details Textual) $ in Millions	9 Months Ended
	Oct. 01, 2016 USD ($)
Gain (Loss) on Sale of Assets and Asset Impairment Charges	$ (1.4)