. Segment Information

The

Company and its subsidiaries design, manufacture and sell components and modules for circuit protection, power control and sensing throughout the world. The Company reports its operations by the following segments: Electronics, Automotive, 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.

Sales, marketing

, and research and development expenses are charged directly into each operating segment. Manufacturing, purchasing, logistics, customer service, finance, information technology, and human resources are shared functions that are allocated back to the

three

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. Although the CODM uses operating income (loss) 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.

●

Electronics Segment

: Provides circuit protection components for overcurrent and overvoltage protection, as well as sensor components and modules to leading global manufacturers of a wide range of electronic products. The segment covers a broad range of end markets, including consumer electronics, telecommunications equipment, medical devices, lighting products, and white goods. The Electronics segment supplies circuit protection, sensing and control products to various leading manufacturers. The Electronics segment has

one

of the broadest product offerings in the industry including fuses and protectors, positive temperature coefficient (“PTC”) resettable fuses, varistors, polymer electrostatic discharge (“ESD”) suppressors, discrete TVS diodes, TVS diode arrays protection and switching thyristors, gas discharge tubes, power switching components, fuseholders, reed switch and sensor assemblies, IGBT blocks, and related accessories.

●

Automotive

Segment

Provides circuit protection and sensor products to the worldwide automotive original equipment manufacturers (“OEM”) and parts distributors of passenger automobiles, trucks, buses, and off-road equipment. In addition, the Company supplies heavy duty power distribution modules, switches and relays to the commercial vehicle industry. The Company also sells its fuses, including blade fuses and high current fuses, battery cable protectors, and varistors, in the automotive replacement parts market. The Company also supplies wiring harness manufacturers and auto parts suppliers worldwide.

●

Industrial

Segment

Provides circuit protection products for industrial and commercial customers. Products include power fuses and other circuit protection devices, including protection and time delay relays, which are used in commercial and industrial buildings and large equipment such as HVAC systems, elevators, and machine tools. The Company also supplies industrial ground fault protection in mining and other large industrial operations.

Segment inform

ation is summarized as follows:

	For the Three Months Ended						For the Six Months Ended
(in thousands )	July 1, 201 7			July 2 , 201 6			July 1, 201 7			July 2, 2016
Net sales
Electronics	$	169,387		$	132,170		$	323,154		$	230,966
Automotive		116,457			111,370			224,297			203,303
Industrial		27,511			28,372			51,346			57,041
Total net sales	$	313,355		$	271,912		$	598,797		$	491,310

Depreciation and amortization
Electronics	$	8,707		$	7,717		$	17,095		$	13,089
Automotive		5,580			4,988			10,950			8,254
Industrial		1,330			1,376			2,645			2,828
Other		-			—			-			937
Total depreciation and amortization	$	15,617		$	14,081		$	30,690		$	25,108

Operating income (loss)
Electronics	$	42,967		$	25,259		$	78,173		$	47,675
Automotive		15,713			16,474			30,778			33,965
Industrial		1,905			2,028			2,012			3,701
Other (a)		(315	)		(14,059	)		(1,840	)		(23,211	)
Total operating income		60,270			29,702			109,123			62,130
Interest expense		3,281			1,670			6,401			3,715
Foreign exchange loss (gain)		(558	)		(6,237	)		(2,115	)		(2,414	)
Other expense (income), net		190			255			52			(262	)
Income before income taxes	$	57,357		$	34,014		$	104,785		$	61,091

(a)

Included in “Other” Operating income (loss) for the

2017

second

quarter is of

$0.3

million (

$1.8

million year-to-date) of acquisition and integration costs associated with the Company’s

2016

acquisitions (included in Cost of sales (“COS”) and Selling, general, and administrative expenses (“SG&A)).

Included in “Other” Operating income

(loss) for the

2016

second

quarter is

$6.1

million (

$12.3

million year-to-date) of acquisition-related costs primarily related to legal and integration costs associated with the company’s acquisition of the PolySwitch business, a

$6.9

million (

$6.9

million year-to-date) inventory adjustment relating to the PolySwitch acquisition as described in Note

$0.3

million (

$1.9

million year-to-date) in charges related to the closure of the company’s manufacturing facility in Denmark,

$0.7

million (

$1.7

million year-to-date) related to the company’s transfer of its reed sensor manufacturing operations from the U.S. and China to the Philippines and

$0.1

million (

$0.4

million year-to-date) related to internal legal restructuring costs.

The

Company’s net sales by country are as follows:

	For the Three Months Ended				For the Six Months Ended
(in thousands )	July 1, 201 7		July 2 , 201 6		July 1, 201 7		July 2, 2016
Net sales
United States	$	100,648	$	93,036	$	187,306	$	178,184
China		83,055		62,411		157,745		110,919
Other countries		129,652		116,465		253,746		202,207
Total net sales	$	313,355	$	271,912	$	598,797	$	491,310

The

Company’s long-lived assets by country, as of

July

2017

and

December 31, 2016,

are as follows:

(in thousands )	July 1, 2017		December 31 , 2016
Long-lived assets
United States	$	23,415	$	23,731
China		70,671		65,345
Mexico		60,172		52,262
Philippines		31,573		33,345
Other countries		46,708		42,492
Total long-lived assets	$	232,539	$	217,175

The

Company’s additions to long-lived assets by country are as follows:

	For the Six Months Ended
(in thousands )	July 1, 2017		July 2, 2016
Additions to long-lived assets
United States	$	1,149	$	2,783
China		10,149		3,847
Mexico		10,925		8,164
Philippines		1,345		2,925
Other countries		5,310		2,498
Total additions to long-lived assets	$	28,878	$	20,217