. Segment Information

The

Company and its subsidiaries design, manufacture and sell components and modules for circuit protection, power control and sensing throughout the world. The Company reports its operations by the following segments: Electronics, Automotive, and Industrial. An operating segment is defined as a component of an enterprise that engages in business activities from which it

may

earn revenues and incur expenses, and about which separate financial information is regularly evaluated by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources. The CODM is the Company’s President and Chief Executive Officer (“CEO”). The CODM allocates resources to and assesses the performance of each operating segment using information about its revenue and operating income (loss) before interest and taxes, but does

not

evaluate the operating segments using discrete balance sheet information.

Sales, marketing

, and research and development expenses are charged directly into each operating segment. Manufacturing, purchasing, logistics, customer service, finance, information technology, and human resources are shared functions that are allocated back to the

three

operating segments. The Company does

not

report inter-segment revenue because the operating segments do

not

record it. Certain expenses, determined by the CODM to be strategic in nature and

not

directly related to segments current results, are

not

allocated but identified as “Other”. Additionally, the Company does

not

allocate interest and other income, interest expense, or taxes to operating segments. These costs are

not

allocated to the segments, as management excludes such costs when assessing the performance of the segments. Although the CODM uses operating income (loss) to evaluate the segments, operating costs included in

one

segment

may

benefit other segments. Except as discussed above, the accounting policies for segment reporting are the same as for the Company as a whole.

●

Electronics Segment

: Consists of

one

of the broadest product offerings in the industry, including fuses and fuse accessories, positive temperature coefficient (“PTC”) resettable fuses, polymer electrostatic discharge (“ESD”) suppressors, varistors, gas discharge tubes; semiconductor and power semiconductor products such as discrete transient voltage suppressor (“TVS”) diodes, TVS diode arrays, protection and switching thyristors, silicon carbide, metal-oxide-semiconductor field-effect transistors (“MOSFETs”) and silicon carbide diodes; and insulated gate bipolar transistors (“IGBT”) technologies. The segment covers a broad range of end markets, including consumer electronics, automotive electronics, IT and telecommunications equipment, medical devices, lighting products, and white goods.

●

Automotive Segment:

Consists of a wide range of circuit protection, power control and sensing technologies for global original equipment manufacturers (“OEMs”), Tier-I suppliers and parts distributors in the automotive, commercial vehicle, and agricultural and construction equipment industries. Passenger car fuse products include fuses and fuse accessories, including blade fuses, battery cable protectors, varistors, high-current fuses, and high-voltage fuses for hybrid and electric vehicles. Commercial vehicle products include fuses, switches, relays, and power distribution modules for the commercial vehicle industry. Automotive sensor products include a wide range of automotive and commercial vehicle sensors designed to monitor the passenger compartment occupants and environment as well as the vehicle’s powertrain, emissions, speed and suspension.

●

Industrial Segment:

Consists of power fuses, protection relays and controls and other circuit protection products for use in heavy industrial applications such as mining, oil and gas, energy storage, construction, HVAC systems, elevator and other industrial equipment.

The

Company has provided this segment information for all comparable prior periods.

Segment information is summarized as follows:

(in thousands )	201 7			201 6			201 5
Net sales
Electronics	$	661,928		$	535,191		$	405,497
Automotive		453,227			415,200			339,957
Industrial		106,379			105,768			122,410
Total net sales	$	1,221,534		$	1,056,159		$	867,864

Depreciation and amortization
Electronics	$	35,215		$	29,141		$	22,936
Automotive		22,459			18,107			13,437
Industrial		5,337			5,889			5,268
Total depreciation and amortization	$	63,011		$	53,137		$	41,641

Operating income (loss)
Electronics	$	155,880		$	117,088		$	78,194
Automotive		62,571			59,905			53,086
Industrial		10,334			3,615			18,094
Other (a)		(10,274	)		(49,964	)		(45,217	)
Total operating income		218,511			130,644			104,157
Interest expense		13,380			8,628			4,091
Foreign exchange loss (gain)		2,376			472			(1,465	)
Other (income) expense, net		(1,282	)		(1,730	)		(5,417	)
Income before income taxes	$	204,037		$	123,274		$	106,948

(a)

Included in “Other” Operating income (loss) for

2017

are costs related to the acquisition and integration costs associated with the Company’s completed and pending acquisitions (

$8.0

million in

Cost of sales

(“COS”) and

Selling, general, and administrative expenses

(“SG&A”) and charges related to restructuring and production transfers in the Company’s Asia operations (

$2.2

million in SG&A).

Included in “Other” Operating income (loss) for

2016

are costs related to the impairment of the

Custom Products reporting unit (

$14.8

million), acquisition and integration costs associated with the Company’s

2016

acquisitions (

$29.2

million in COS and SG&A), transfer of the Company’s reed switch manufacturing operations from its Lake Mills, Wisconsin and Suzhou, China locations to the Philippines (

$1.6

million in COS), impairment and severance costs related to the closure of the Company’s manufacturing facility in Denmark (

$1.9

million in SG&A), and restructuring costs (

$2.5

million in SG&A and

Research and development expenses

Included in “Other” Operating income (loss) for

2015

are costs related to the transfer of the

Company’s reed switch manufacturing operations from its Lake Mills, Wisconsin and Suzhou, China locations to the Philippines (

$5.2

million in COS), acquisition related fees (

$4.6

million included in SG&A), pension settlement and other costs (

$31.9

million in SG&A), and restructuring costs (

$3.6

million in SG&A).

The

Company’s significant net sales, long-lived assets and additions to long-lived assets by country for the fiscal years ended

2017,

2016,

and

2015

are as follows:

(in thousands )	201 7		201 6		201 5
Net sales
United States	$	383,025	$	356,674	$	344,305
China		321,111		263,701		193,792
Other countries		517,398		435,784		329,767
Total net sales	$	1,221,534	$	1,056,159	$	867,864

Long-lived assets
United States	$	23,490	$	23,731	$	23,965
China		86,310		65,345		37,241
Mexico		62,510		52,262		47,130
Philippines		31,129		33,345		33,525
Other countries		47,138		42,492		20,707
Total long-lived assets	$	250,577	$	217,175	$	162,568

Additions to long-lived assets
United States	$	3,518	$	4,694	$	8,609
China		32,775		13,181		9,710
Mexico		19,395		15,667		9,193
Philippines		2,979		5,096		12,620
Other countries		7,258		7,590		3,887
Total additions to long-lived assets	$	65,925	$	46,228	$	44,019

For the year ended

December 30, 2017,

approximately

69%

of the Company’s net sales were to customers outside the United States (exports and foreign operations) including

26%

to China (including Hong Kong). Sales to Arrow Electronics, Inc., which were included in the Electronics, Automotive, and Industrial segments, were

10.6%

of consolidated net sales in

2017

but less than

10%

for

2016

and

2015.

other single customer accounted for more than

10%

of net sales during the last

three

years.