. 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 power control products and 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 information is summarized as follows:

	For the Three Months Ended						For the Nine Months Ended
(in thousands )	September 30 , 2017			October 1 , 2016			September 30 , 2017			October 1 , 2016
Net sales
Electronics	$	175,899		$	147,730		$	499,052		$	378,696
Automotive		113,797			106,341			338,094			309,644
Industrial		28,193			26,260			79,539			83,301
Total net sales	$	317,889		$	280,331		$	916,685		$	771,641

Depreciation and amortization
Electronics	$	8,986		$	7,694		$	26,080		$	20,783
Automotive		5,622			4,627			16,572			12,881
Industrial		1,338			1,733			3,982			4,561
Other		—			(937	)		—			—
Total depreciation and amortization	$	15,946		$	13,117		$	46,634		$	38,225

Operating income (loss)
Electronics	$	44,345		$	34,571		$	122,518		$	82,246
Automotive		16,821			15,032			47,599			48,997
Industrial		3,757			57			5,769			3,758
Other (a)		(6,314	)		(22,134	)		(8,155	)		(45,345	)
Total operating income		58,609			27,526			167,731			89,656
Interest expense		3,467			2,571			9,868			6,286
Foreign exchange loss (gain)		632			(4,700	)		(1,483	)		(7,114	)
Other income, net		(1,013	)		(778	)		(962	)		(1,040	)
Income before income taxes	$	55,523		$	30,433		$	160,308		$	91,524

(a)	Included in “Other” Operating income (loss) for the 2017 third quarter is $4.8 million ( $6.6 million year-to-date) of acquisition-related and integration charges associated with the company’s acquisitions, including $1.6 million ( $1.6 million year-to-date) of purchase accounting inventory charges related to the company’s 2017 acquisition of US Sensor as described in Note 2 and $1.5 million ( $1.5 million year-to-date) of charges related to restructuring and production transfers in our Asia operations.

	Included in “Other” Operating income (loss) for the 2016 third quarter is $14.8 million ( 14.8 million year-to-date) of charges related to the impairment of goodwill and other intangible assets within the custom products reporting unit, $5.9 million ( $18.2 million year-to-date) of acquisition-related and integration charges associated with the company’s 2016 acquisitions, $0.6 million ( $7.5 million year-to-date) of non-cash inventory charges relating to the company’s 2016 acquisitions as described in Note 2, $1.9 million year-to-date in charges related to the closure of the company’s manufacturing facility in Denmark, $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 $0.9 million ( $1.3 million year-to-date) related to internal legal restructuring costs.

The

Company’s net sales by country were as follows:

	For the Three Months Ended				For the Nine Months Ended
(in thousands )	September 30 , 2017		October 1 , 2016		September 30 , 2017		October 1 , 2016
Net sales
United States	$	103,233	$	92,475	$	290,538	$	270,659
China (a)		82,986		70,215		240,731		181,134
Other countries		131,670		117,641		385,416		319,848
Total net sales	$	317,889	$	280,331	$	916,685	$	771,641

(a)

Included in China are net sales in China and Hong Kong.

The

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

September 30, 2017

and

December 31, 2016,

were as follows:

(in thousands )	September 30 , 2017		December 31, 2016
Long-lived assets
United States	$	23,922	$	23,731
China (a)		80,616		65,345
Mexico		61,664		52,262
Philippines		30,760		33,345
Other countries		47,912		42,492
Total long-lived assets	$	244,874	$	217,175

(a)

Included in China are long-lived assets in China and Hong Kong.

The

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

	For the Nine Months Ended
(in thousands )	September 30, 2017		October 1 , 2016
Additions to long-lived assets
United States	$	2,752	$	4,485
China (a)		22,165		8,272
Mexico		15,041		12,312
Philippines		2,018		4,054
Other countries		6,494		5,378
Total additions to long-lived assets	$	48,470	$	34,501

(a)

Included in China are additions to long-lived assets in China and Hong Kong.