Segment Information

The Company’s CEO functions as the CODM. The Company’s CODM makes operating decisions and assesses performance based on these operating segments. As part of a realignment strategy, during the first quarter of fiscal year 2019, the Company restructured and combined the Power and High Reliability operating segment with the Wireless and Sensing operating segment to better align resources with our LoRa® initiatives. This resulted in the Company having three operating segments compared to previously having four operating segments. The three operating segments: Protection, Signal Integrity, and Wireless and Sensing, all have similar economic characteristics and have been aggregated into one reportable segment identified in the table below as the "Semiconductor Products Group".

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

Net sales by segment are as follows:



	Three Months Ended				Six Months Ended
(in thousands)	July 29, 2018		July 30, 2017		July 29, 2018		July 30, 2017
Semiconductor Products Group	$	163,211	$	153,127	$	293,640	$	296,929
Total	$	163,211	$	153,127	$	293,640	$	296,929

Income by segment and reconciliation to consolidated operating income:



	Three Months Ended					Six Months Ended
(in thousands)	July 29, 2018			July 30, 2017		July 29, 2018			July 30, 2017
Semiconductor Products Group	$	47,110		$	42,856	$	87,922		$	82,078
Operating income by segment	47,110			42,856		87,922			82,078
Items to reconcile segment operating income to consolidated income before taxes
Share-based compensation	13,966			15,525		49,481			28,810
Intangible amortization	6,480			6,675		13,441			12,961
Changes in the fair value of contingent earn-out obligations	(900		)	—		(900		)	—
Litigation cost net of recoveries	(6,632		)	—		(6,632		)	—
Other non-segment related expenses	1,260			1,764		2,693			2,969
Amortization of fair value adjustments related to acquired property, plant and equipment	—			—		—			190
Interest expense, net	2,200			2,029		4,390			4,075
Non-operating expense, net	(542		)	204		(732		)	836
Income before taxes	$	31,278		$	16,659	$	26,181		$	32,237

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 29, 2018				July 30, 2017					July 29, 2018					July 30, 2017
Signal Integrity	$	68,802	42	%	$	66,666		44	%	$	134,401		45	%	$	134,724		46	%
Protection	45,999		28	%	45,058			29	%	86,791			30	%	87,307			29	%
Wireless and Sensing	48,410		30	%	44,600			29	%	93,949			32	%	83,375			28	%
Other: Warrant Shares ⁽¹⁾	—		—	%	(3,197		)	(2	)%	(21,501		)	(7	)%	(8,477		)	(3	)%
Total net sales	$	163,211	100	%	$	153,127		100	%	$	293,640		100	%	$	296,929		100	%

⁽¹⁾The cost of the Warrant granted was recognized as an offset to net sales over the respective performance period. The Warrant is now fully-vested and exercisable for a total of 869,565 shares, with no additional costs to be recognized in future periods following the first quarter of fiscal year 2019.

Information by Sales Channel



	Three Months Ended					Six Months Ended
(in thousands)	July 29, 2018		July 30, 2017			July 29, 2018			July 30, 2017
Distributor	$	109,844	$	100,121		$	212,317		$	194,643
Direct	53,367		56,203			102,824			110,763
Other: Warrant Shares	—		(3,197		)	(21,501		)	(8,477		)
Total net sales	$	163,211	$	153,127		$	293,640		$	296,929

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 is as follows:



	Three Months Ended				Six Months Ended
	July 29, 2018		July 30, 2017		July 29, 2018		July 30, 2017
Asia-Pacific	75	%	73	%	72	%	75	%
North America	19	%	21	%	28	%	21	%
Europe	6	%	8	%	7	%	7	%
Other: Warrant Shares	—	%	(2	)%	(7	)%	(3	)%
	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 29, 2018		July 30, 2017		July 29, 2018		July 30, 2017
China (including Hong Kong)	56	%	49	%	53	%	50	%
United States	10	%	9	%	12	%	9	%