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				Nine Months Ended
(in thousands)	October 28, 2018		October 29, 2017		October 28, 2018		October 29, 2017
Semiconductor Products Group	$	173,550	$	150,304	$	467,190	$	447,233
Total	$	173,550	$	150,304	$	467,190	$	447,233

Income by segment and reconciliation to consolidated operating income:



	Three Months Ended						Nine Months Ended
(in thousands)	October 28, 2018			October 29, 2017			October 28, 2018			October 29, 2017
Semiconductor Products Group	$	52,738		$	42,828		$	140,660		$	124,906
Operating income by segment	52,738			42,828			140,660			124,906
Items to reconcile segment operating income to consolidated income before taxes
Share-based compensation	11,466			15,356			60,947			44,166
Intangible amortization	6,480			7,453			19,921			20,414
Investment impairments, net of offsets	30,000			4,000			30,000			4,000
Changes in the fair value of contingent earn-out obligations	(8,519		)	188			(9,419		)	188
Litigation cost net of recoveries	(264		)	—			(5,476		)	—
Other non-segment related expenses	1,708			2,252			2,981			5,221
Amortization of fair value adjustments related to acquired property, plant and equipment	—			—			—			190
Interest expense, net	2,355			2,032			6,745			6,107
Non-operating expense, net	(1,182		)	(5,267		)	(1,914		)	(4,431		)
Income before taxes	$	10,694		$	16,814		$	36,875		$	49,051

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									Nine Months Ended
(in thousands, except percentages)	October 28, 2018				October 29, 2017					October 28, 2018					October 29, 2017
Signal Integrity	$	69,981	40	%	$	63,921		42	%	$	204,381		44	%	$	198,645		43	%
Protection	53,085		31	%	49,366			33	%	139,875			30	%	136,673			31	%
Wireless and Sensing	50,484		29	%	43,266			29	%	144,435			31	%	126,641			29	%
Other: Warrant Shares ⁽¹⁾	—		—	%	(6,249		)	(4	)%	(21,501		)	(5	)%	(14,726		)	(3	)%
Total net sales	$	173,550	100	%	$	150,304		100	%	$	467,190		100	%	$	447,233		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					Nine Months Ended
(in thousands)	October 28, 2018		October 29, 2017			October 28, 2018			October 29, 2017
Distributor	$	120,009	$	103,463		$	332,304		$	298,089
Direct	53,541		53,090			156,387			163,870
Other: Warrant Shares	—		(6,249		)	(21,501		)	(14,726		)
Total net sales	$	173,550	$	150,304		$	467,190		$	447,233

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				Nine Months Ended
	October 28, 2018		October 29, 2017		October 28, 2018		October 29, 2017
Asia-Pacific	77	%	75	%	74	%	74	%
North America	16	%	21	%	26	%	21	%
Europe	7	%	8	%	7	%	8	%
Other: Warrant Shares	—	%	(4	)%	(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				Nine Months Ended
(percentage of total sales)	October 28, 2018		October 29, 2017		October 28, 2018		October 29, 2017
China (including Hong Kong)	55	%	50	%	54	%	50	%
United States	10	%	9	%	11	%	9	%