Note 15 - Business Unit Segment Information

12 Months Ended

Dec. 31, 2011

Segment Reporting Disclosure [Text Block]

15. Business Unit Segment Information

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 company reports its operations by the following business unit segments: Electronics, Automotive and Electrical.

● Electronics. Provides circuit protection components and expertise to leading global manufacturers of a wide range of electronic products including mobile phones, computers, LCD TVs, telecommunications equipment, medical devices, lighting products and white goods. The Electronics business segment has the broadest product offering in the industry including fuses and protectors, positive temperature coefficient (“PTC”) resettable fuses, varistors, polymer electrostatic discharge (“ESD”) suppressors, discrete transient voltage suppression (“TVS”) diodes, TVS diode arrays and protection thyristors, gas discharge tubes, power switching components and fuseholders, blocks and related accessories.  

● Automotive. Provides circuit protection products to the worldwide automotive original equipment manufacturers (“OEM”) and parts distributors of passenger automobiles, trucks, buses and off-road equipment. The company also sells its fuses in the automotive replacement parts market. Products include blade fuses, high current fuses, battery cable protectors and varistors.  

● Electrical. Provides circuit protection products for industrial and commercial customers. Products include power fuses and other circuit protection devices that are used in commercial and industrial buildings and large equipment such as HVAC systems, elevators and machine tools.

Each of the operating segments is directly responsible for sales, marketing and research and development. Manufacturing, purchasing, logistics, customer service, finance, information technology and human resources are shared functions that are allocated back to the three operating segments. The CEO allocates resources to and assesses the performance of each operating segment using information about its revenue and operating income (loss), 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. All other functions are shared by the operating segments and expenses for these shared functions are allocated to the operating segments and included in the operating results reported below. The company does not report inter-segment revenue because the operating segments do not record it. The company does not allocate interest and other income, interest expense, or taxes to operating segments. Although the CEO uses operating income 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.

The company has provided this business unit segment information for all comparable prior periods. Segment information is summarized as follows (in thousands):

	2011			2010			2009
Net sales
Electronics	$	354,487		$	373,370		$	253,758
Automotive		197,586			139,096			104,647
Electrical		112,882			95,555			71,742
Total net sales	$	664,955		$	608,021		$	430,147
Operating income (loss)
Electronics	$	62,982		$	69,676		$	(4,396	)
Automotive		30,002			17,038			9,043
Electrical		28,902			24,697			17,389
Other*		(7,982	)		(3,837	)		(8,341	)
Total operating income		113,904			107,574			13,695
Interest expense, net		1,691			1,437			2,377
Other expense (income), net		(2,888	)		(1,542	)		481
Income before income taxes	$	115,101		$	107,679		$	10,837

* Included in “Other” Operating income for 2011 are acquisition related fees ($1.0 million), a non-cash charge for the sale of inventory that had been stepped-up to fair value at the acquisition date of Cole Hersee ($3.7 million), asset impairment charges related to closure of the company’s Des Plaines, Illinois ($0.8 million), Dundalk, Ireland ($0.6 million) and Duensen, Germany ($0.9 million) manufacturing facilities (see Note 11) and purchase accounting adjustments related to the Selco A/S acquisition ($0.7 million). Included in “Other” Operating income (loss) for 2010 are asset impairment charges related to closure of the company’s Des Plaines, Illinois ($1.3 million) and Dundalk, Ireland ($1.7 million) manufacturing facilities (see Note 11). Included in “Other” Operating income (loss) for 2009 are severance and asset impairment charges related to restructuring activities in the U.S. ($1.6 million), Europe ($5.5 million) and Asia-Pacific ($1.5 million) locations (see Note 9).

The company’s revenues and long-lived assets (total net property, plant and equipment) by geographical area for the fiscal years ended 2011, 2010 and 2009 are as follows (in thousands):

	2011		2010		2009
Net sales
Americas	$	288,592	$	227,747	$	166,137
Europe		114,895		115,113		83,449
Asia-Pacific		261,468		265,161		180,561
Total net sales	$	664,955	$	608,021	$	430,147
Long-lived assets
Americas	$	53,887	$	58,869	$	56,603
Europe		783		3,080		11,101
Asia-Pacific		64,214		68,198		68,218
Consolidated total	$	118,884	$	130,147	$	135,922

For the year ended December 31, 2011, approximately 66% of the company’s net sales were to customers outside the United States (exports and foreign operations) including 22% to China. Sales to Arrow Pemco were less than 10% for 2011 and 2009, respectively, but 10.4% in 2010. No other single customer accounted for more than 10% of net sales during the last three years.