Segment Information

12 Months Ended

Dec. 28, 2024

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company and its subsidiaries design, manufacture and sell component, modules and subassemblies to empower the long-term structural themes of sustainability, connectivity and safety. The Company aggregated its operating segments into the reportable segments: Electronics, Transportation, 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 and as such, segment asset information is not disclosed. The CODM’s key decisions involve the allocation of resources, such as acquisitions, divestitures, investments, capital expenditures, significant customer contracts, and other key management resources, and assessment of performance, such as executive officer hiring, promotion, and compensation. The CODM uses operating income as the key metric when establishing targets in the annual budget and in evaluating the allocation of resources to each segment. The CODM regularly reviews each segment's operating income against the forecast, budget and previous quarterly results to assess performance and make decisions about the allocation of operating and capital resources to each segment.

Sales, marketing, and research and development expenses are charged directly into each operating segment. Finance, information technology, and human resources are shared functions that are allocated back to the 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. 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, electromechanical switches and interconnect solutions, polymer electrostatic discharge (“ESD”) suppressors, varistors, reed switch based magnetic sensing, gas discharge tubes; semiconductor products such as discrete transient voltage suppressor (“TVS”) diodes, TVS diode arrays, protection and switching thyristors, silicon and silicon carbide metal-oxide-semiconductor field effect transistors (“MOSFETs”) and diodes, and insulated gate bipolar transistors (“IGBT”) technologies. The segment covers a broad range of end markets, including industrial motor drives and power conversion, automotive electronics, electric vehicle and related charging infrastructure, aerospace, power supplies, data centers and telecommunications, medical devices, alternative energy and energy storage, building and home automation, appliances, and mobile electronics.

•Transportation Segment: Consists of a wide range of circuit protection, power control and sensing technologies for global original equipment manufacturers (“OEMs”), Tier-one suppliers and parts and aftermarket distributors in passenger vehicles, heavy-duty truck and bus, off-road and recreational vehicles, material handling equipment, agricultural machinery, construction equipment and other commercial vehicle end markets. Passenger vehicle products are used in internal combustion engines, hybrid and electric vehicles including blade fuses, battery cable protectors, resettable fuses, high-current fuses, high-voltage fuses, and sensor products designed to monitor the occupant’s safety and environment as well as the vehicle’s powertrain. Commercial vehicle products include fuses, switches, circuit breakers, relays, and power distribution modules and units used in applications serving a number of end markets, including heavy-duty truck and bus, construction, agriculture, material handling and marine.

•Industrial Segment: Consists of industrial circuit protection (industrial fuses), protective and monitoring relays (protection relays, residual current devices and monitors, ground fault circuit interrupters, solid state switches, and arc fault detection devices), and industrial controls and sensors (contactors, transformers, and temperature sensors) for use in various applications such as renewable energy and energy storage systems, industrial safety, factory automation, electric vehicle charging infrastructure, HVAC systems, non-residential construction, MRO, and mining.

The Company has provided this segment information for all comparable prior periods. Segment information is summarized as follows:

 

(in thousands)	2024		2023		2022
Net sales
Electronics	$	1,186,773	$	1,350,426	$	1,492,819
Transportation	672,434		678,278		716,140
Industrial	331,561		333,953		304,938
Total net sales	$	2,190,768	$	2,362,657	$	2,513,897
Other segment expenses
Electronics	$	1,016,880	$	1,049,845	$	1,061,203
Transportation	613,856		644,644		652,601
Industrial	289,230		279,153		256,085
Total other segment expenses	$	1,919,966	$	1,973,642	$	1,969,889
Segment operating income
Electronics	$	169,893	$	300,581	$	431,616
Transportation	58,578		33,634		63,539
Industrial	42,331		54,800		48,853
Total segment operating income	270,802		389,015		544,008
Other(a)	(112,022)		(28,153)		(43,182)
Total operating income	158,780		360,862		500,826
Interest expense	38,717		39,866		26,216
Foreign exchange (gain) loss	(9,230)		12,299		24,359
Other (income) expense, net	(22,570)		(19,901)		7,207
Income before income taxes	$	151,863	$	328,598	$	443,044

(a) Included in “Other” Operating income for 2024 was $93.5 million of non-cash impairment charges, which included $47.8 million for the impairment of intangible assets primarily related to certain acquired customer relationships, developed technology, and tradename in the Industrial controls and sensors reporting unit within the Industrial segment, and $36.1 million and $8.6 million of non-cash goodwill impairment charges associated with the Industrial controls and sensors reporting unit within the Industrial segment and the Automotive sensors reporting unit within the Transportation segment, respectively. The remaining impairment charges included $0.2 million for patents and customer relationships related to the exit of a small business in China within the Industrial segment. In addition, during the first quarter of 2024, the Company recognized a $0.9 million impairment charge related to certain machinery and equipment in the commercial vehicle business within the Transportation segment. The Company also recognized total restructuring charges of $14.9 million, primarily for employee termination costs related to the reorganization of certain manufacturing, selling and administrative functions in the semiconductor business within the Electronics segment and the reorganization of certain selling and administrative functions in the commercial vehicle business within the Transportation segment. See Note 8, Restructuring, Impairment and Other Charges, for further discussion. Also included in "Other" Operating income was $5.1 million of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, a gain of $1.0 million for the sale of two buildings within the Transportation segment, and a gain of $0.5 million recorded for the sale of a land use right within the Electronics segment.

Included in “Other” Operating income for 2023 was 11.7 million of legal and professional fees and other integration expenses related to completed and contemplated acquisitions and $11.6 million of restructuring, impairment and other charges, primarily related to employee termination costs. During 2023, the Company recorded a $3.9 million impairment charge related to the land and building in the commercial vehicle business within the Transportation segment, $0.9 million impairment charge substantially related to certain patents in a business within the Industrial segment, and a $0.1 million impairment related to certain machinery and equipment in the semiconductor business within the Electronics segment. See Note 8, Restructuring, Impairment and Other Charges, for further discussion.

Included in “Other” Operating income for 2022 was $17.6 million of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, $15.6 million of purchase accounting inventory step-up charges, and

$10.0 million of restructuring, impairment and other charges, primarily related to employee termination costs and a $2.9 million non-cash impairment charge for certain acquired technology and patent intangible assets due to a change in use and projected cash flows within the Electronics segment in the fourth quarter of 2022. See Note 8, Restructuring, Impairment and Other Charges, for further discussion. In addition, there was a gain of $5.0 million recorded for the sale of buildings within the Electronics segment. See Note 8, Restructuring, Impairment and Other Charges, for further discussion.

Other segment operating expenses include cost of sales, selling, general, and administration expenses, and research and development expenses. Other segment expenses are reconciled to the operating income of each segment. The CODM regularly assesses the performance of each operating segment focusing on each operating segment’s revenue and operating income.

The Company’s depreciation and amortization expenses by segment for the fiscal years ended 2024, 2023, and 2022 are as follows:

(in thousands)	2024		2023		2022
Depreciation
Electronics	$	40,456	$	39,461	$	35,496
Transportation	22,117		26,732		25,647
Industrial	5,752		5,441		3,868
Total depreciation	$	68,325	$	71,634	$	65,011
Amortization
Electronics	$	39,362	$	39,883	$	32,698
Transportation	13,518		15,782		18,109
Industrial	9,247		10,129		4,888
Total amortization	$	62,127	$	65,794	$	55,695

The Company’s net sales classified according to the country where the customer is located, net property, plant, and equipment and additions to net property, plant, and equipment by country for the fiscal years ended 2024, 2023, and 2022 are as follows:

 

(in thousands)	2024		2023		2022
Net sales
U.S.	$	800,331	$	820,735	$	912,498
China	506,643		546,786		638,978
Other countries(a)	883,794		995,136		962,421
Total net sales	$	2,190,768	$	2,362,657	$	2,513,897
Long-lived assets
U.S.	$	74,698	$	73,126	$	76,325
China	132,504		139,736		129,094
Mexico	89,558		102,218		107,119
Germany	58,758		47,217		39,635
Philippines	66,174		73,217		77,240
Other countries	55,376		57,639		51,697
Total long-lived assets	$	477,068	$	493,153	$	481,110
Additions to long-lived assets
U.S.	$	19,081	$	9,502	$	14,603
China	16,045		32,805		35,297
Mexico	10,181		13,920		26,514
Germany	19,972		10,279		5,255
Philippines	4,383		6,156		14,847
Other countries	8,751		10,992		7,678
Total additions to long-lived assets	$	78,413	$	83,654	$	104,194

(a)Each country included in other countries are less than 10% of net sales.

For the year ended December 28, 2024, approximately 63% of the Company’s net sales were to customers outside the U.S. (exports and foreign operations), including approximately 23% to China. For the year ended December 30, 2023, approximately 65% of the Company's net sales were to customers outside the U.S. (exports and foreign operations), including approximately 23% to China. For the year ended December 31, 2022, approximately 64% of the Company's net sales were to customers outside the U.S. (exports and foreign operations), including approximately 25% to China. Sales to Arrow Electronics, Inc., which were included in the Electronics, Transportation, and Industrial segments, were 9.4%, 11.2%, and 11.5% of consolidated net sales in 2024, 2023, and 2022 respectively. No other single customer accounted for more than 10% of net sales during the last three years.