Segment Information

6 Months Ended

Jul. 28, 2019

The Company’s CEO functions as the chief operating decision maker ("CODM"). The CODM makes operating decisions and assesses performance based on the Company's major product lines, which represent its operating segments. The Company has three operating segments—Protection, Signal Integrity, and Wireless and Sensing—that have similar economic characteristics and have been aggregated into one reportable segment identified as the "Semiconductor Products Group."

The Company’s assets are commingled among the various operating segments and the CODM does not use asset information in making operating decisions or assessing performance. Therefore, the Company has not included asset information by segment in the segment disclosures below.

Net sales by segment were as follows:



	Three Months Ended				Six Months Ended
(in thousands)	July 28, 2019		July 29, 2018		July 28, 2019		July 29, 2018
Semiconductor Products Group	$	137,146	$	163,211	$	268,500	$	293,640
Total	$	137,146	$	163,211	$	268,500	$	293,640

The following table presents a reconciliation of operating income by segment to consolidated income before taxes. Historical amounts have been adjusted to conform to the current presentation:



	Three Months Ended						Six Months Ended
(in thousands)	July 28, 2019			July 29, 2018			July 28, 2019			July 29, 2018
Semiconductor Products Group	$	31,505		$	47,110		$	60,133		$	87,922
Operating income by segment	31,505			47,110			60,133			87,922
Items to reconcile segment operating income to consolidated income before taxes:
Share-based compensation	8,646			13,966			19,974			49,481
Intangible amortization	3,908			6,480			9,051			13,441
Changes in the fair value of contingent earn-out obligations	—			(900		)	(2,161		)	(900		)
Restructuring and other reserves	2,571			85			2,711			431
Litigation cost, net of recoveries	799			(5,857		)	725			(5,297		)
Transaction and integration related	33			400			1,468			927
Interest expense	2,597			2,200			5,064			4,390
Non-operating expense, net	(1,213		)	(542		)	(2,256		)	(732		)
Income before taxes	$	14,164		$	31,278		$	25,557		$	26,181

Information by Product Line

The Company operates exclusively in the semiconductor industry and primarily within the analog and mixed-signal sector.

The table below provides net sales activity by product line on a comparative basis:



	Three Months Ended								Six Months Ended
(in thousands, except percentages)	July 28, 2019				July 29, 2018				July 28, 2019				July 29, 2018
Signal Integrity	$	55,094	40	%	$	68,802	42	%	$	105,350	39	%	$	134,401		45	%
Wireless and Sensing	41,696		30	%	48,410		30	%	83,903		31	%	93,949			32	%
Protection	40,356		30	%	45,999		28	%	79,247		30	%	86,791			30	%
Other: Warrant Shares ⁽¹⁾	—		—	%	—		—	%	—		—	%	(21,501		)	(7	)%
Total net sales	$	137,146	100	%	$	163,211	100	%	$	268,500	100	%	$	293,640		100	%

⁽¹⁾ For the six-month period ended July 29, 2018, the revenue offset reflects the cost associated with the Warrant of $21.5 million, including $15.9 million related to the Acceleration Event (see Note 3 for discussion regarding Share-Based Compensation).

Information by Sales Channel



	Three Months Ended				Six Months Ended
(in thousands)	July 28, 2019		July 29, 2018		July 28, 2019		July 29, 2018
Distributor	$	99,138	$	109,844	$	180,280	$	212,317
Direct	38,008		53,367		88,220		102,824
Other: Warrant Shares	—		—		—		(21,501		)
Total net sales	$	137,146	$	163,211	$	268,500	$	293,640

Geographic Information

The Company generates virtually all of its sales from its Semiconductor Products Group through sales of analog and mixed-signal devices.

Net sales activity by geographic region was as follows:



	Three Months Ended				Six Months Ended
	July 28, 2019		July 29, 2018		July 28, 2019		July 29, 2018
Asia-Pacific	74	%	75	%	76	%	72	%
North America	16	%	19	%	14	%	28	%
Europe	10	%	6	%	10	%	7	%
Other: Warrant Shares	—	%	—	%	—	%	(7	)%
	100	%	100	%	100	%	100	%

The Company attributes sales to a country based on the ship-to address. The table below summarizes sales activity to countries that represented greater than 10% of total net sales for at least one of the periods presented:



	Three Months Ended				Six Months Ended
(percentage of total sales)	July 28, 2019		July 29, 2018		July 28, 2019		July 29, 2018
China (including Hong Kong)	52	%	56	%	52	%	53	%
United States	9	%	10	%	10	%	12	%