12.

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.

Segment information is summarized as follows:

	For the Three Months Ended						For the Six Months Ended
(in thousands)	June 30 , 201 8			July 1 , 201 7			June 30 , 201 8			July 1 , 201 7
Net sales
Electronics	$	299,357		$	169,387		$	563,768		$	323,154
Automotive		127,172			116,457			253,302			224,297
Industrial		32,654			27,511			59,926			51,346
Total net sales	$	459,183		$	313,355		$	876,996		$	598,797

Depreciation and amortization
Electronics	$	15,651		$	8,707		$	29,329		$	17,095
Automotive		5,969			5,580			11,939			10,950
Industrial		1,467			1,330			2,927			2,645
Other		3,103			-			5,607			-
Total depreciation and amortization	$	26,190		$	15,617		$	49,802		$	30,690

Operating income (loss)
Electronics	$	67,311		$	42,967		$	121,275		$	78,173
Automotive		15,711			15,713			34,102			30,778
Industrial		5,279			1,905			9,988			2,012
Other (a)		(28,679	)		(315	)		(68,172	)		(1,840	)
Total operating income		59,622			60,270			97,193			109,123
Interest expense		5,782			3,281			11,205			6,401
Foreign exchange loss (gain)		3,200			(558	)		(7,354	)		(2,115	)
Other expense (income), net		(1,678	)		190			(3,621	)		52
Income before income taxes	$	52,318		$	57,357		$	96,963		$	104,785

(a) Included in “Other” Operating income (loss) for the

2018

second

quarter is

$24.4

million (

$63.2

million year-to-date) of charges primarily related to IXYS acquisition and include

$19.0

million (

$36.9

million year-to-date) of purchase accounting inventory charges,

$2.3

million (

$14.1

million year-to-date) in acquisition-related and integration costs primarily related to legal, accounting and other expenses associated with the acquisition of IXYS,

$3.1

million (

$5.6

million year-to-date) in backlog amortization costs, stock compensation expense recognized immediately upon close for converted IXYS options related to prior services periods

$4.5

million year-to-date and other charges of

$2.1

million year-to-date. In addition, there were

$3.2

million (

$3.9

million year-to-date) of severance and other restructuring charges and

$1.1

million of impairment charges (

$1.1

million year-to-date) associated with the exit of the Radio Pulse and Custom businesses, respectively.

Included in “Other” Operating income (loss) for the

2017

second

quarter is of

$0.3

million (

$1.8

million year-to-date) of acquisition and integration costs associated with the Company’s

2016

acquisitions (included in Cost of sales (“COS”) and Selling, general, and administrative expenses (“SG&A”)).

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

	For the Three Months Ended				For the Six Months Ended
(in thousands)	June 30 , 201 8		July 1 , 201 7		June 30 , 201 8		July 1 , 201 7
Net sales
United States	$	137,236	$	100,648	$	261,112	$	187,306
China (a)		127,776		86,891		234,284		165,111
Other countries (b)		194,171		125,816		381,600		246,380
Total net sales	$	459,183	$	313,355	$	876,996	$	598,797

(a) Includes mainland China, Taiwan, and Hong Kong.
(b) Each country included in Other countries are less than

10%

of net sales.

The Company’s long-lived assets by country, as of

June 30, 2018

and

December 30, 2017,

were as follows:

(in thousands)	June 30, 2018		December 30, 2017
Long-lived assets
United States	$	59,097	$	23,490
China (a)		92,832		86,866
Mexico		66,063		62,510
Germany		35,013		1,082
Philippines		31,481		31,129
Other countries		54,269		45,500
Total long-lived assets	$	338,755	$	250,577

(a) Includes mainland China, Taiwan, and Hong Kong.

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

	For the Six Months Ended
(in thousands)	June 30 , 2018		July 1, 2017
Additions to long-lived assets
United States	$	4,234	$	1,149
China (a)		14,711		10,200
Mexico		8,874		10,925
Germany		5,182		-
Philippines		4,241		1,345
Other countries		3,073		5,259
Total additions to long-lived assets	$	40,315	$	28,878

(a) Includes mainland China, Taiwan, and Hong Kong.