What changed in this filing

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Item 1. Financial Statements

2023-05-03 compared with 2022-11-02 · 211 added, 313 removed, 574 unchanged (48% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands) October 1,

2022 January 1,

(in thousands) April 1,

2023 December 31,

Current assets:

1 unchanged sentence

Short-term investments 85 84

Trade receivables, less allowanc es of $ 83,872 and $ 59,232 at October 1, 2022 and January 1, 2022, respectively

Trade receivables, less allowanc es o f $ 88,923 a n d $ 83,562 at April 1, 2023 and December 31, 2022, respectively

324,583 306,578

26 unchanged sentences

34,000,000 shares authorized;

shares issued, October 1, 2022 – 26,440,679 ;

January 1, 2022 – 26,350,763

shares issued, April 1, 2023– 26,483,444 ;

December 31, 2022– 26,445,618

Additional paid-in capital 983,065 974,097

12 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME

Three Months Ended Nine Months Ended

(in thousands, except per share data) October 1,

2022 September 25,

2021 October 1,

2022 September 25,

Three Months Ended

(in thousands, except per share data) April 1,

2023 April 2,

Net sales $ 609,782 $ 623,330

8 unchanged sentences

Interest expense 9,646 4,302

Foreign exchange loss 18,191 3,154 40,051 8,315

Foreign exchange (gain) loss ( 1,675 ) 7,736

Other (income) expense, net ( 6,233 ) 4,427

11 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended Nine Months Ended

(in thousands) October 1,

2022 September 25,

2021 October 1,

2022 September 25,

Three Months Ended

(in thousands) April 1,

2023 April 2,

Net income $ 88,745 $ 117,518

Other comprehensive (loss) income:

Other comprehensive income (loss):

Pension and postemployment adjustment, net of tax 6 310

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Nine Months Ended

(in thousands) October 1, 2022 September 25, 2021

Three Months Ended

(in thousands) April 1, 2023 April 2, 2022

OPERATING ACTIVITIES

6 unchanged sentences

Stock-based compensation 3,730 3,886

Loss (gain) on investments and other assets 13,740 ( 9,739 )

(Gain) loss on investments and other assets ( 1,779 ) 4,729

Deferred income taxes 1,624 ( 2,112 )

13 unchanged sentences

FINANCING ACTIVITIES

Proceeds of term loan 300,000 —

Proceeds of senior notes 100,000 —

Payments of senior notes payable — ( 25,000 )

1 unchanged sentence

Payments of term loan ( 1,875 ) —

Payments of revolving credit facility — ( 30,000 )

Net proceeds related to stock-based award activities 5,219 1,016

Debt issuance costs ( 2,600 ) —

Cash dividends paid ( 14,880 ) ( 13,086 )

Net cash provided by (used in) financing activities 321,923 ( 60,877 )

Net cash used in financing activities ( 12,204 ) ( 37,070 )

Effect of exchange rate changes on cash, cash equivalents, and restricted cash 4,571 ( 2,738 )

(Decrease) increase in cash, cash equivalents, and restricted cash ( 6,581 ) 8,344

Decrease in cash, cash equivalents, and restricted cash ( 137,414 ) ( 17,865 )

Cash, cash equivalents, and restricted cash at beginning of period 564,939 482,836

5 unchanged sentences

Restricted cash included in other long-term assets $ 1,586 $ 1,609

Cash paid interest during the period $ 16,888 $ 14,830

Cash interest during the period $ 11,027 $ 6,018

Capital expenditures, not yet paid $ 7,523 $ 9,553

7 unchanged sentences

(Loss) Retained Earnings Non-controlling Interest Total

Balance at January 1, 2022 $ 260 $ 946,588 $ ( 248,120 ) $ ( 73,463 ) $ 1,268,124 $ 131 $ 1,893,520

Balance at December 31, 2022 $ 261 $ 974,097 $ ( 252,866 ) $ ( 95,764 ) $ 1,585,466 $ 184 $ 2,211,378

Net income — — — — 88,745 — 88,745

Other comprehensive loss, net of tax — — — ( 2,203 ) — — ( 2,203 )

Other comprehensive gain, net of tax — — — 13,283 — — 13,283

Stock-based compensation — 3,730 — — — — 3,730

Non-controlling interest — — — — ( 66 ) 66 —

Withheld shares on restricted share units for withholding taxes — — ( 18 ) — — — ( 18 )

3 unchanged sentences

Balance at April 1, 2023 $ 261 $ 983,065 $ ( 252,884 ) $ ( 82,481 ) $ 1,659,265 $ 250 $ 2,307,476

Net income — — — — 87,016 — 87,016

Other comprehensive loss, net of tax — — — ( 31,349 ) — — ( 31,349 )

Stock-based compensation — 11,382 — — — — 11,382

Withheld shares on restricted share units for withholding taxes — — ( 4,704 ) — — — ( 4,704 )

Stock options exercised 1 2,060 — — — — 2,061

Cash dividends paid ($ 0.53 per share)

— — — — ( 13,115 ) — ( 13,115 )

Balance at July 2, 2022 $ 261 $ 964,937 $ ( 252,828 ) $ ( 107,015 ) $ 1,446,457 $ 131 $ 2,051,943

Net income — — — — 75,468 — 75,468

Other comprehensive loss, net of tax — — — ( 28,188 ) — — ( 28,188 )

Stock-based compensation — 4,464 — — — — 4,464

Non-controlling interest ( 36 ) 36 —

Stock options exercised — 58 — — — — 58

Cash dividends paid ($ 0.60 per share)

— — — — ( 14,854 ) — ( 14,854 )

Balance at October 1, 2022 $ 261 $ 969,459 $ ( 252,828 ) $ ( 135,203 ) $ 1,507,035 $ 167 $ 2,088,891

See accompanying Notes to Condensed Consolidated Financial Statements.

Littelfuse, Inc.

3 unchanged sentences

(Loss) Retained Earnings Non-controlling Interest Total

Balance at December 26, 2020 $ 259 $ 907,858 $ ( 242,366 ) $ ( 91,157 ) $ 1,034,048 $ 131 $ 1,608,773

Net income — — — — 57,713 — 57,713

Other comprehensive income (loss), net of tax — — — ( 4,871 ) — — ( 4,871 )

Stock-based compensation — 3,395 — — — — 3,395

Stock options exercised — 7,509 — — — — 7,509

Cash dividends paid ($ 0.48 per share)

— — — — ( 11,782 ) — ( 11,782 )

Balance at March 27, 2021 $ 259 $ 918,762 $ ( 242,366 ) $ ( 96,028 ) $ 1,079,979 $ 131 $ 1,660,737

Net income — — — — 82,095 — 82,095

Other comprehensive income, net of tax — — — 5,454 — — 5,454

Stock-based compensation — 8,843 — — — — 8,843

Withheld shares on restricted share units for withholding taxes — — ( 5,597 ) — — — ( 5,597 )

Stock options exercised 1 2,501 — — — — 2,502

Cash dividends paid ($ 0.48 per share)

— — — — ( 11,814 ) — ( 11,814 )

Balance at June 26, 2021 $ 260 $ 930,106 $ ( 247,963 ) $ ( 90,574 ) $ 1,150,260 $ 131 $ 1,742,220

Balance at January 1, 2022 $ 260 $ 946,588 $ ( 248,120 ) $ ( 73,463 ) $ 1,268,124 $ 131 $ 1,893,520

Net income — — — — 117,518 — 117,518

5 unchanged sentences

— — — — ( 13,086 ) — ( 13,086 )

Balance at September 25, 2021 $ 260 $ 935,351 $ ( 248,078 ) $ ( 95,528 ) $ 1,229,262 $ 131 $ 1,821,398

Balance at April 2, 2022 $ 260 $ 951,495 $ ( 248,124 ) $ ( 75,666 ) $ 1,372,556 $ 131 $ 2,000,652

See accompanying Notes to Condensed Consolidated Financial Statements.

3 unchanged sentences

Founded in 1927, Littelfuse is an industrial technology manufacturing company empowering a sustainable, connected, and safer world.

Across more tha n 15 countries, and with approximately 19,000 glo bal associates, the Company partners with customers to design and deliver innovative, reliable solutions.

Across more than 20 countries, and with approximately 18,000 global associates, the Company partners with customers to design and deliver innovative, reliable solutions.

Serving over 100,000 end customers, the Company’s products are found in a variety of industrial, transportation and electronics end markets – everywhere, every day.

4 unchanged sentences

GAAP have been condensed or omitted as permitted by such rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

They have been prepared in accordance with accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended January 1, 2022 which should be read in conjunction with the disclosures therein.

They have been prepared in accordance with accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which should be read in conjunction with the disclosures therein.

In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal, recurring nature.

2 unchanged sentences

Revenue Disaggregation

The following tables disaggregate the Company’s revenue by primary business units for the three and nine months ended October 1, 2022 and September 25, 2021:

Three Months Ended October 1, 2022 Nine Months Ended October 1, 2022

The following tables disaggregate the Company’s revenue by primary business units for the three months ended April 1, 2023 and April 2, 2022:

Three Months Ended April 1, 2023

(in thousands) Electronics

1 unchanged sentence

Segment Industrial

Total Electronics

Segment Transportation

Segment Industrial

Electronics – Passive Products and Sensors $ 148,598 $ — $ — $ 148,598

5 unchanged sentences

Total $ 358,593 $ 166,641 $ 84,548 $ 609,782

Three Months Ended September 25, 2021 Nine Months Ended September 25, 2021

Three Months Ended April 2, 2022

(in thousands) Electronics

1 unchanged sentence

Segment Industrial

Segment Transportation

Segment Industrial

Electronics – Passive Products and Sensors $ 169,943 $ — $ — $ 169,943

25 unchanged sentences

Under certain circumstances (usually in a competitive situation or large volume opportunity), a distributor will request authorization for pricing allowances to reduce its price.

When the Company approves such a reduction, the distributor is authorized to “debit” its account for the difference

between the contracted price and the lower approved price.

When the Company approves such a reduction, the distributor is authorized to “debit” its account for the difference between the contracted price and the lower approved price.

The Company establishes reserves for this program based on historical activity, distributor inventory levels and actual authorizations for the debit and recognizes these debits as a reduction of revenue.

8 unchanged sentences

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash at October 1, 2022 and January 1, 2022 reported within the Condensed Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Condensed Consolidated Statement of Cash Flows.

(in thousands) October 1, 2022 January 1, 2022

The following table provides a reconciliation of cash, cash equivalents and restricted cash at April 1, 2023 and December 31, 2022 reported within the Condensed Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Condensed Consolidated Statement of Cash Flows.

(in thousands) April 1, 2023 December 31, 2022

Cash and cash equivalents $ 425,127 $ 562,588

2 unchanged sentences

Total cash, cash equivalents and restricted cash $ 427,525 $ 564,939

Recently Adopted Accounting Standards

In November 2021, the Financial Accounting Standards Board ("FASB") issued ASU No.

2021-10, "Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance".

The standard, requires annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy:

1) Information about the nature of the transactions and the related accounting policy used to account for the transactions;

2) The line items on the balance sheet and income statement that are affected by the transactions, and the amounts applicable to each financial statement line item;

3) Significant terms and conditions of the transactions, including commitments and contingencies.

The guidance is effective for fiscal years beginning after December 15, 2021 with early adoption permitted.

The adoption of ASU 2021-10 did not have a material impact on the Company's Condensed Consolidated Financial Statements.

In October 2021, the FASB issued ASU No.

2021-08, "Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers".

The standard requires an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606.

The guidance is effective for fiscal years beginning after December 15, 2022 with early adoption permitted.

The adoption of ASU 2021-08 did not have a material impact on the Company's Condensed Consolidated Financial Statements.

Recently Issued Accounting Standards

In March 2023, the Financial Accounting Standards Board ("FASB") issued ASU No.

2023-01, "Leases (Topic 842):

Common Control Arrangements".

The standard requires that leasehold improvements associated with common control leases be:

1) Amortized by the lessee over the useful life of the leasehold improvements to the common control group (regardless of the lease term) as long as the lessee controls the use of the underlying asset (the leased asset) through a lease.

However, if the lessor obtained the right to control the use of the underlying asset through a lease with another entity not within the same common control group, the amortization period may not exceed the amortization period of the common control group.

2) Accounted for as a transfer between entities under common control through an adjustment to equity (or net assets for not-for-profit entities) if, and when, the lessee no longer controls the use of the underlying asset.

Additionally, those leasehold improvements are subject to the impairment guidance in Topic 360, Property, Plant, and Equipment.

This standard is effective on January 1, 2024.

The Company does not expect any material effect on the Company's Condensed Consolidated Financial Statements.

The Company accounts for acquisitions using the acquisition method in accordance with ASC 805, “Business Combinations,” in which assets acquired and liabilities assumed are recorded at fair value as of the date of acquisition.

The operating results of the acquired business are included in the Company’s Consolidated Financial Statements from the date of the acquisition.

On July 19, 2022, the Company completed the previously announced acquisition of C&K Switches (“C&K”) for $ 540 million in cash.

Founded in 1928, C&K is a leading designer and manufacturer of high-performance electromechanical switches and

interconnect solutions with a strong global presence across a broad range of end markets, including industrial, transportation, aerospace, and datacom.

At the time the Company and C&K entered into the definitive agreement, C&K had annualized sales of over $ 200 million.

The business is reported as part of the Electronics-Passive Products and Sensors business within the Company's Electronics segment.

The acquisition was funded through a combination of cash on hand and debt.

The total purchase consideration of $ 523.0 million, net of cash acquired, has been allocated, on a preliminary basis, to assets acquired and liabilities assumed, as of the completion of the acquisition, based on preliminary estimated fair values.

The operating results of the acquired business are included in the Company’s Condensed Consolidated Financial Statements from the date of the acquisition.

Western Automation

On February 3, 2023, the Company completed the previously announced acquisition of Western Automation Research and Development Limited (“Western Automation”) for approximately $ 162 million in cash.

Headquartered in Galway, Ireland, Western Automation is a designer and manufacturer of electrical shock protection devices used across a broad range of high-growth end markets, including e-Mobility off-board charging infrastructure, industrial safety and renewables.

At the time the Company and Western Automation entered into the definitive agreement, Western Automation had annualized sales of approximately $ 25 million.

The business is reported within the Company’s Industrial segment.

The acquisition was funded with cash on hand.

The total purchase consideration of $ 158.3 million, net of cash, has been allocated, on a preliminary basis, to assets acquired and liabilities assumed, as of the completion of the acquisition, based on preliminary estimated fair values.

The purchase price allocation is preliminary because the evaluations necessary to assess the fair values of the net assets acquired are still in process.

The primary area not yet finalized relates to the completion of the valuation of certain acquired income tax assets and liabilities.

As a result, these allocations are subject to change during the purchase price allocation period as the valuations are finalized.

The following table summarizes the preliminary purchase price allocation of the fair value of assets acquired and liabilities assumed in the C&K acquisition:

The following table summarizes the preliminary purchase price allocation of the fair value of assets acquired and liabilities assumed in the Western Automation acquisition:

(in thousands) Purchase Price

10 unchanged sentences

Current liabilities ( 5,251 )

Long- term debt ( 14,889 )

Other non-current liabilities ( 8,998 )

All C&K goodwill, other assets and liabilities were recorded in the Electronics segment and are reflected in the Americas, Europe and Asia-Pacific geographic areas.

The goodwill resulting from this acquisition consists largely of the Company’s expected future product sales and synergies from combining C&K’s products and technology with the Company’s existing Electronics products portfolio.

Goodwill resulting from the C&K acquisition is not expected to be deductible for tax purposes.

Included in the Company’s Condensed Consolidated Statements of Net Income for the three months ended October 1, 2022 are net sales of approximately $ 37.9 million, and a loss before income taxes of $ 6.1 million, since the July 19, 2022 acquisition of C&K.

As required by purchase accounting rules, the Company recorded a $ 10.8 million step-up of inventory to its fair value as of the acquisition date based on the preliminary valuation.

The step-up was partially amortized as a non-cash charge to cost of sales during the three months ended October 1, 2022, as the acquired inventory was sold, and reflected as other non-segment costs.

The Company recognized a non-cash charge of $ 6.8 million to cost of sales during the three months ended October 1, 2022.

During the three and nine months ended October 1, 2022, the Company incurred approximately $ 3.5 million and $ 9.2 million, respectively, of legal and professional fees related to C&K acquisition recognized as Selling, general, and administrative expenses .

All Western Automation assets and liabilities were recorded in the Industrial segment and are primarily reflected in the Europe geographic area.

The goodwill resulting from this acquisition consists largely of the Company’s expected future product sales and synerg ies from combining Western Automation’s products and technology with the Company’s existing Industrial products portfolio.

Goodwill resulting from the Western Automation acquisition is not expected to be deductible for tax purposes.

Included in the Company’s Condensed Consolidated Statements of Net Income for the three months ended April 1, 2023 are net sales of $ 2.7 million, and a loss before income taxes of $ 0.1 million, since the February 3, 2023 acquisition of Western Automation.

During the three months ended April 1, 2023, the Company incurred approximately $ 1.4 million of legal and professional fees related to the Western Automation acquisition recognized as Selling, general, and administrative expenses .

These costs were reflected as other non-segment costs.

On April 12, 2022, the Company acquired Embed Ltd.

Founded in 2005, Embed is a proven provider of embedded software and firmware developed for a broad range of applications serving transportation end markets.

The business is included in the commercial vehicle business within the Company's Transportation segment.

The acquisition was funded with the Company’s cash on hand.

The total purchase consideration was $ 9.2 million, net of cash.

Carling Technologies

On November 30, 2021, the Company completed the previously announced acquisition of Carling Technologies, Inc.

(“Carling”), pursuant to the Stock Purchase Agreement, dated as of October 19, 2021.

Founded in 1920, Carling has a leading position in switching and circuit protection technologies with a strong global presence in commercial vehicle, marine and datacom/telecom infrastructure markets.

At the time of acquisition, Carling had annualized sales of approximately $ 170 million.

The operations of Carling are included in the commercial vehicle business within the Company's Transportation segment.

The purchase price for Carling Technologies was approximately $ 315.5 million subject to a working capital adjustment.

The acquisition was funded with cash on hand.

The total purchase consideration of $ 314.1 million, net of cash, has been allocated, on a preliminary basis, to assets acquired and liabilities assumed, as of the completion of the acquisition, based on preliminary estimated fair values.

On July 19, 2022, the Company completed the previously announced acquisition of C&K Switches (“C&K”) for $ 540 million in cash.

Founded in 1928, C&K is a leading designer and manufacturer of high-performance electromechanical switches and interconnect solutions with a strong global presence across a broad range of end markets, including industrial, transportation, datacom, and aerospace.

At the time the Company and C&K entered into the definitive agreement, C&K had annualized sales of over $ 200 million.

The business is reported as part of the electronics-passive products and sensors business within the Company's Electronics segment.

The acquisition was funded through a combination of cash on hand and debt.

The purchase price allocation is preliminary because the evaluations necessary to assess the fair values of the net assets acquired are still in process.

The primary area not yet finalized relates to the completion of the valuation of certain acquired income tax assets and liabilities.

As a result, these allocations are subject to change during the purchase price allocation period as the valuations are finalized.

The following table summarizes the preliminary purchase price allocation of the fair value of assets acquired and liabilities assumed in the Carling acquisition:

The following table summarizes the preliminary purchase price allocation of the fair value of assets acquired and liabilities assumed in the C&K acquisition:

(in thousands) Purchase Price

10 unchanged sentences

Current liabilities ( 47,734 )

Long- term debt ( 9,626 )

Other non-current liabilities ( 59,026 )

All Carling goodwill, other assets and liabilities were recorded in the Transportation segment and are reflected in the Americas, Europe and Asia-Pacific geographic areas.

The goodwill resulting from this acquisition consists largely of the Company’s expected future product sales and synergies from combining Carling’s products and technology with the Company’s existing commercial vehicle products portfolio.

Goodwill resulting from the Carling acquisition is not expected to be deductible for tax purposes.

During the nine months ended October 1, 2022, the Company paid $ 0.5 million related to the final working capital adjustment and made measurement period adjustments to reduce the fair value of property, plant and equipment of $ 8.2 million, inventories of $ 0.8 million, and an increase in net accounts receivable of $ 0.6 million and intangible assets attributable to customer relationships of $ 0.5 million.

As a result of these adjustments along with a corresponding reduction of deferred tax liabilities of $ 2.5 million, goodwill was increased by $ 5.9 million.

All C&K goodwill, other assets and liabilities were recorded in the Electronics segment and are reflected in the Americas, Europe and Asia-Pacific geographic areas.

Goodwill resulting from the C&K acquisition is not expected to be deductible for tax purposes.

As required by purchase accounting rules, the Company recorded a $ 10.8 million step-up of inventory to its fair value as of the acquisition date based on the preliminary valuation.

The step-up was amortized as a non-cash charge to cost of sales during the fourth quarter of 2021 and first quarter of 2022, as the acquired inventory was sold, and reflected as other non-segment costs.

The Company recognized a non-cash charge of $ 4.8 million to cost of sales during the nine months ended October 1, 2022.

Hartland Controls

On January 28, 2021, the Company acquired Hartland Controls ("Hartland"), a manufacturer and leading supplier of electrical components used primarily in heating, ventilation, air conditioning (HVAC) and other industrial and control systems applications with annualized sales of approximately $ 70 million.

The purchase price for Hartland was $ 111.0 million and the operations of Hartland are included in the Industrial segment.

The total purchase consideration of $ 108.5 million, net of cash, cash equivalents, and restricted cash has been allocated to assets acquired and liabilities assumed, as of the completion of the acquisition, based on estimated fair values.

As of October 1, 2022, the Company had restricted cash of $ 0.8 million in an escrow account for general indemnification purposes.

The following table summarizes the final purchase price allocation of the fair value of assets acquired and liabilities assumed in the Hartland acquisition:

(in thousands) Purchase Price

Total purchase consideration:

Cash, net of cash acquired, and restricted cash $ 108,516

Allocation of consideration to assets acquired and liabilities assumed:

Trade receivables, net 12,915

Inventories 35,808

Other current assets 2,224

Property, plant, and equipment 6,296

Intangible assets 39,660

Goodwill 38,502

Other non-current assets 3,782

Current liabilities ( 24,861 )

Other non-current liabilities ( 5,810 )

All Hartland goodwill, other assets and liabilities were recorded in the Industrial segment and are primarily reflected in the Americas and Asia-Pacific geographic areas.

The goodwill resulting from this acquisition consists largely of the Company’s expected future product sales and synergies from combining Hartland’s products and technology with the Company’s existing industrial products portfolio.

Goodwill resulting from the Hartland acquisition is not expected to be deductible for tax purposes.

The Company recorded a $ 6.8 million step-up of inventory to its fair value as of the acquisition date.

The step-up was amortized as a non-cash charge to cost of sales during the first and second quarters of 2021, as the acquired inventory was sold, and is reflected as other non-segment costs.

During the three and nine months ended September 25, 2021, the Company recognized a charge of $ 3.3 million and 6.8 million, respectively, for the amortization of this fair value inventory step-up.

During the nine months ended September 25, 2021, the Company incurred approximately $ 0.8 million of legal and professional fees related to Hartland acquisition recognized as Selling, general, and administrative expenses .

These costs were reflected as other non-segment costs.

The step-up was amortized as a non-cash charge to cost of sales during the third and fourth quarter of 2022 as the acquired inventory was sold and reflected as other non-segment costs.

On April 12, 2022, the Company acquired Embed Ltd.

Founded in 2005, Embed is a proven provider of embedded software and firmware developed for a broad range of applications serving transportation end markets, primarily including commercial vehicle electrification and eMobility.

The business is included in the commercial vehicle business within the Company's Transportation segment.

The acquisition was funded with the Company’s cash on hand.

The total purchase consideration was $ 9.2 million, net of cash.

Pro Forma Results

The following table summarizes, on an unaudited pro forma basis, the combined results of operations of the Company, C&K as though the acquisition had occurred as of December 27, 2020, and Hartland and Carling as though the acquisitions had occurred as of December 29, 2019.

The following table summarizes, on an unaudited pro forma basis, the combined results of operations of the Company and Western Automation as though the acquisition had occurred as of January 2, 2022, and C&K as though the acquisition had occurred as of December 27, 2020, and Carling as though the acquisition had occurred as of December 29, 2019.

The Company has not included pro forma results of operations for Embed as its operations were not material to the Company.

The pro forma amounts presented are not necessarily indicative of either the actual consolidated results had the C&K acquisition occurred as of December 27, 2020 and had the Hartland and Carling acquisitions occurred as of December 29, 2019 or of future consolidated operating results.

For the Three Months Ended For the Nine Months Ended

(in thousands, except per share amounts) October 1, 2022 September 25, 2021 October 1, 2022 September 25, 2021

The pro forma amounts presented are not necessarily indicative of either the actual consolidated results had the Western Automation acquisition occurred as of January 2, 2022, and had the C&K acquisition occurred as of December 27, 2020 and had Carling acquisition occurred as of December 29, 2019 or of future consolidated operating results.

For the Three Months Ended

(in thousands, except per share amounts) April 1, 2023 April 2, 2022

Net sales $ 611,668 $ 691,751

4 unchanged sentences

Pro forma results presented above primarily reflect the following adjustments:

For the Three Months Ended For the Nine Months Ended

(in thousands) October 1, 2022 September 25, 2021 October 1, 2022 September 25, 2021

For the Three Months Ended

(in thousands) April 1, 2023 April 2, 2022

Amortization (a) $ ( 479 ) $ ( 3,731 )

3 unchanged sentences

Interest expense (d) — 194

Income tax (expense) benefit of above items ( 2,794 ) 1,412 ( 4,582 ) 5,456

(a) The amortization adjustment for the three and nine months ended October 1, 2022 and September 25, 2021 primarily reflects incremental amortization resulting from the measurement of intangibles at their fair values.

(b) The transaction cost adjustments reflect the reversal of certain legal and professional fees from the three and nine months ended October 1, 2022 and September 25, 2021, and recognition of those fees during the three and nine months ended September 25, 2021.

(c) The amortization of inventory step-up adjustment reflects the reversal of the amount recognized during the three and nine months ended October 1, 2022, and the recognition of the amortization during the nine months ended September 25, 2021.

Income tax expense of above items ( 115 ) ( 1,195 )

(a) The amortization adjustment for the three months ended April 1, 2023 and April 2, 2022 primarily reflects incremental amortization resulting from the measurement of intangibles at their fair values.

(b) The transaction cost adjustments reflect the reversal of certain legal and professional fees from the three months ended April 1, 2023 and April 2, 2022, and recognition of those fees during the three months ended April 2, 2022.

(c) The amortization of inventory step-up adjustment reflects the reversal of the amount recognized related to the Carling acquisition during the three months ended April 2, 2022.

The inventory step-up was amortized over four months as the inventory was sold.

(d) The interest expense adjustment reflects incremental interest expense related to the financing of the C&K acquisition.

The components of inventories at October 1, 2022 and January 1, 2022 are as follows:

(in thousands) October 1, 2022 January 1, 2022

The components of inventories at April 1, 2023 and December 31, 2022 are as follows:

(in thousands) April 1, 2023 December 31, 2022

Raw materials $ 241,055 $ 231,043

4 unchanged sentences

Property, Plant, and Equipment

The components of net property, plant, and equipment at October 1, 2022 and January 1, 2022 are as follows:

(in thousands) October 1, 2022 January 1, 2022

The components of net property, plant, and equipment at April 1, 2023 and December 31, 2022 are as follows:

(in thousands) April 1, 2023 December 31, 2022

Land and land improvements $ 22,112 $ 22,089

3 unchanged sentences

Total $ 492,368 $ 481,110

The Company recorded depreciation expense of $ 17.0 million and $ 14.2 million for the three months ended October 1, 2022 and September 25, 2021, respectively, and $ 48.3 million and $ 41.4 million for the nine months ended October 1, 2022 and September 25, 2021, respectively.

The Company recorded depreciation expense of $ 17.6 million and $ 15.6 million for the three months ended April 1, 2023 and April 2, 2022, respectively.

Goodwill and Other Intangible Assets

Changes in the carrying value of goodwill by segment for the nine months ended October 1, 2022 are as follows:

Changes in the carrying value of goodwill by segment for the three months ended April 1, 2023 are as follows:

(in thousands) Electronics Transportation Industrial Total

Net book value of goodwill as of January 1, 2022

Gross goodwill as of January 1, 2022 $ 660,245 $ 228,555 $ 86,232 $ 975,032

Accumulated impairment losses as of January 1, 2022 — ( 36,177 ) ( 9,065 ) ( 45,242 )

Net book value of goodwill as of December 31, 2022

Gross goodwill as of December 31, 2022

$ 909,167 $ 234,793 $ 84,889 $ 1,228,849

Accumulated impairment losses as of December 31, 2022

— ( 33,401 ) ( 8,526 ) ( 41,927 )

Total 909,167 201,392 76,363 1,186,922

3 unchanged sentences

Currency translation 5,846 1,551 87 7,484

Net book value of goodwill as of October 1, 2022

Gross goodwill as of October 1, 2022

Net book value of goodwill as of April 1, 2023

Gross goodwill as of April 1, 2023

915,013 236,945 179,820 1,331,778

Accumulated impairment losses as of October 1, 2022

Accumulated impairment losses as of April 1, 2023

— ( 34,002 ) $ ( 8,547 ) ( 42,549 )

Total $ 915,013 $ 202,943 $ 171,273 $ 1,289,229

(a) The additions resulted from the acquisitions of C&K, Embed and Carling.

The components of other intangible assets as of October 1, 2022 and January 1, 2022 are as follows:

As of October 1, 2022

(a) The additions resulted from the acquisitions of Western Automation.

The components of other intangible assets as of April 1, 2023 and December 31, 2022 are as follows:

As of April 1, 2023

(in thousands) Gross

5 unchanged sentences

Total $ 1,015,512 $ 368,549 $ 646,963

As of January 1, 2022

December 31, 2022

(in thousands) Gross

4 unchanged sentences

Total $ 942,995 $ 349,025 $ 593,970

During the three months ended October 1, 2022 and September 25, 2021, the Company recorded amortization expense of $ 15.6 million and $ 10.4 million, respectively.

During the nine months ended October 1, 2022 and September 25, 2021, the Company recorded amortization expense of $ 39.9 million and $ 31.6 million, respectively.

During the three months ended October 1, 2022 , the Company recorded additions to intangible assets of $ 254.7 million, related to the C&K acquisition, the components of which were as follows:

During the three months ended April 1, 2023 and April 2, 2022, the Company recorded amortization expense of $ 16.9 million and $ 12.7 million, respectively.

During the three months ended April 1, 2023, the Company recorded additions to intangible assets of $ 68.0 million, related to the Western Automation acquisition, the components of which were as follows:

(in thousands) Weighted Average Useful Life Amount

2 unchanged sentences

Total $ 68,000

Estimated annual amortization expense related to intangible assets with definite lives as of October 1, 2022 is as follows:

Estimated annual amortization expense related to intangible assets with definite lives as of April 1, 2023 is as follows:

(in thousands)

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Accrued Liabilities

The components of accrued liabilities as of October 1, 2022 and January 1, 2022 are as follows:

(in thousands) October 1, 2022 January 1, 2022

The components of accrued liabilities as of April 1, 2023 and December 31, 2022 are as follows:

(in thousands) April 1, 2023 December 31, 2022

Employee-related liabilities $ 66,427 $ 99,089

Operating lease liability 11,880 9,018

Professional services 11,475 4,299

Current lease liability 12,853 12,841

Other non-income taxes 7,691 10,594

Restructuring liability 3,556 2,944

Professional services 7,023 7,160

Other customer reserves 4,790 5,064

Interest 3,548 4,449

Current post-retirement benefits liability 1,606 1,248

Deferred revenue 2,886 2,593

Current benefit liability 1,318 1,318

Restructuring liability 1,248 2,434

Other 39,992 41,515

4 unchanged sentences

Restructuring, Impairment, and Other Charges

The Company recorded restructuring, impairment and other charges for the three and nine months ended October 1, 2022 and September 25, 2021 as follows:

Three months ended October 1, 2022 Nine months ended October 1, 2022

(in thousands) Electronics Transportation Industrial Total Electronics Transportation Industrial Total

The Company recorded restructuring, impairment and other charges for the three months ended April 1, 2023 and April 2, 2022 as follows:

Three months ended April 1, 2023

(in thousands) Electronics Transportation Industrial Total

Employee terminations $ 672 $ 582 $ 317 $ 1,571

Other restructuring charges 7 272 — 279

Total restructuring charges 1,474 1,939 — 3,413 1,883 2,382 — 4,265

Total $ 679 $ 854 $ 317 $ 1,850

Three months ended September 25, 2021 Nine months ended September 25, 2021

(in thousands) Electronics Transportation Industrial Total Electronics Transportation Industrial Total

Three months ended April 2, 2022

(in thousands) Electronics Transportation Industrial Total

Employee terminations $ 205 $ — $ — $ 205

Other restructuring charges — 13 — 13

Total restructuring charges 542 97 133 772 1,094 602 302 1,998

Total $ 205 $ 13 $ — $ 218

For the three and nine months ended October 1, 2022, the Company recorded total restructuring charges of $ 3.4 million and $ 4.3 million, respectively, primarily for employee termination costs.

These charges are primarily related to the reorganization of certain manufacturing, selling and administrative functions within the passenger vehicle and automotive sensor businesses in the Transportation segment and the reorganization of selling and administrative functions due to the C&K acquisition within the Electronics segment.

For the three and nine months ended September 25, 2021, the Company recorded total restructuring charges of $ 0.8 million and $ 2.0 million, respectively, primarily for employee termination costs.

These charges primarily related to the reorganization of certain manufacturing, selling and administrative functions within the Electronic and Transportation segments.

The restructuring liability as of October 1, 2022 and January 1, 2022 is $ 3.6 million and $ 2.9 million, respectively.

For the three months ended April 1, 2023, the Company recorded total restructuring charges of $ 1.9 million, primarily for employee termination costs.

These charges primarily related to the reorganization of certain manufacturing, selling and administrative functions within the Transportation segment’s commercial vehicle business and the reorganization of certain selling and administrative functions within the Electronics segment due to the C&K acquisition.

For the three months ended April 2, 2022, the Company recorded total restructuring charges of $ 0.2 million, primarily for employee termination costs.

These charges are primarily related to the reorganization of certain manufacturing, selling and administrative functions within the Electronics segment.

The restructuring liability as of April 1, 2023 and December 31, 2022 is $ 1.2 million and $ 2.4 million, respectively.

The restructuring liability is included within accrued liabilities in the Condensed Consolidated Balance Sheets.

The Company anticipates the remaining payments associated with employee terminations will primarily be completed in fiscal year 2023.

The carrying amounts of debt at October 1, 2022 and January 1, 2022 are as follows:

(in thousands) October 1, 2022 January 1, 2022

The carrying amounts of debt at April 1, 2023 and December 31, 2022 are as follows:

(in thousands) April 1, 2023 December 31, 2022

Revolving Credit Facility $ 100,000 $ 100,000

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The Credit Agreement includes representations, covenants and events of default that are customary for financing transactions of this nature.

Revolving loans may be borrowed, repaid and reborrowed until the Maturity Date, at which time all amounts borrowed must be repaid.

Under the Credit Agreement, revolving loans may be borrowed, repaid and reborrowed until the Maturity Date, at which time all amounts borrowed must be repaid.

The Company borrowed $ 300.0 million under a term loan on June 30, 2022.

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Subject to certain conditions, (i) the Company may terminate or reduce the Aggregate Revolving Commitments, as defined in the Credit Agreement, in whole or in part, and (ii) the Company may prepay the revolving loans or the term loans at any time, without premium or penalty.

During the three months ended October 1, 2022, the Company paid $ 1.9 million of term loan.

The revolving loan and term loan balance under the Credit Facility was $ 100.0 million and $ 298.1 million, respectively, as of October 1, 2022.

During the three months ended April 1, 2023, the Company made payments of $ 1.9 million on its term loan.

The revolving loan and term loan balance under the Credit Facility was $ 100.0 million and $ 294.4 million, respectively, as of April 1, 2023.

On May 12, 2022, the Company entered into an interest rate swap agreement to manage interest rate risk exposure, effectively converting the interest rate on the Company's SOFR based floating-rate loans to a fixed-rate.

The interest rate swap, with a notional value of $ 200 million, was designated as a cash flow hedge against the variability of cash flows associated with the Company's SOFR based loans scheduled to mature on June 30, 2027.

As of October 1, 2022, the effective interest rate on revolving loan and term loan outstanding borrowings was 4.13 %.

As of October 1, 2022, the Company had no outstanding in letters of credit under the Credit Facility and had available $ 600.0 million of borrowing capacity under the revolving Credit Facility.

As of October 1, 2022, the Company was in compliance with all covenants under the Credit Agreement.

Debt Issuance Costs

During three and nine months ended October 1, 2022, the Company paid debt issuance costs of $ 0.4 million and $ 2.6 million in connection with the new amended Credit Agreement on June 30, 2022 which, along with the remaining balance of debt issuance costs of the previous credit facility, are being amortized over the life of the new amended Credit Agreement.

As of April 1, 2023, the effective interest rate on revolving loan and term loan outstanding borrowings was 5.91 %.

As of April 1, 2023, the Company had no outstanding letters of credit under the Credit Facility and had $ 600.0 million of borrowing capacity available under the revolving Credit Facility.

As of April 1, 2023, the Company was in compliance with all covenants under the Credit Agreement.

On December 8, 2016, the Company entered into a Note Purchase Agreement, pursuant to which the Company issued and sold € 212 million aggregate principal amount of senior notes in two series.

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Senior Notes, Series A due 2022”), and $ 100 million in aggregate principal amount of 3.74 % Senior Notes, Series B, due February 15, 2027 (“U.S.

Senior Notes, Series B due 2027”) (together, the “U.S.

Senior Notes due 2022 and 2027”) were funded.

Interest on the U.S.

Senior Notes due 2022 and 2027 is payable semiannually on February 15 and August 15, commencing August 15, 2017.

During the nine months ended October 1, 2022, the Company paid $ 25.0 million of U.S.

Senior Notes, Series B due 2027”) were funded.

During the first quarter of 2022, the Company paid off $ 25 million of U.S.

Senior Notes, Series A due on February 15, 2022.

Interest on the U.S.

Senior Notes due 2027 is payable semiannually on February 15 and August 15, commencing August 15, 2017.

On November 15, 2017, the Company entered into a Note Purchase Agreement pursuant to which the Company issued and sold $ 175 million in aggregate principal amount of senior notes in two series.

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In addition, the Company is required to satisfy certain financial covenants and tests relating to, among other matters, interest coverage and leverage.

At October 1, 2022, the Company was in compliance with all covenants under the Senior Notes.

At April 1, 2023, the Company was in compliance with all covenants under the Senior Notes.

The Company may redeem the Senior Notes upon the satisfaction of certain conditions and the payment of a make-whole amount to noteholders and are required to offer to repurchase the Senior Notes at par following certain events, including a change of control.

Interest paid on all Company debt was $ 8.5 million and $ 6.1 million for the three months ended October 1, 2022 and September 25, 2021 , respectively, and $ 16.9 million and $ 14.8 million for the nine months ended October 1, 2022 and September 25, 2021, respectively.

Interest paid on all Company debt was $ 11.0 million and $ 6.0 million for the three months ended April 1, 2023 and April 2, 2022, respectively.

Fair Value of Assets and Liabilities

16 unchanged sentences

The fair value of the interest rate swap was valued using an independent third-party valuation model.

Changes in fair value of derivatives that are designated as cash flow hedges are deferred in accumulated other comprehensive (loss) income until the underlying transactions are recognized in earnings.

Pursuant to this model, c hanges in fair value of derivatives that are designated as cash flow hedges are deferred in accumulated other comprehensive loss u ntil the underlying transactions are recognized in earnings.

The primary inputs into the valuation of the interest rate swap are interest yield curves, interest rate volatility, credit risk, credit spreads and other market information.

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The use of derivatives creates exposure to credit risk relating to potential losses that could be recognized in the event that the counterparties to these instruments fail to perform their obligations under the contracts.

The Company seeks to minimize this risk by limiting our counterparties to major financial institutions with acceptable credit ratings and monitoring the total value of positions with individual counterparties.

The Company seeks to minimize this risk by limiting our counterparties to major financial institutions with acceptable credit ratings and monitoring the total value of

positions with individual counterparties.

In the event of a default by one of our counterparties, the Company may not receive payments provided for under the terms of our derivatives.

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dollar on its Euro denominated Senior Notes, Series A due 2023.

The notional value of the forward contract at July 14, 2023 was € 117.0 million and expires on December 7, 2023.

The notional value of the forward contract at April 1, 2023 was € 117.0 million and expires on December 7, 2023.

The foreign currency contract was not designated as a hedge instrument and is marked to market on a monthly basis.

As a result, changes in fair value are reported in Foreign exchange loss in the Consolidated Statements of Operations.

As a result, changes in fair value are reported in Foreign exchange (gain) loss in the Consolidated Statements of Operations.

The fair value of the foreign currency forward contract was valued using market exchange rates by a third party and classified as a Level 2 input under the fair value hierarchy.

As of October 1, 2022, the fair values of our derivative financial instrument and their classifications on the Condensed Consolidated Balance Sheets were as follows:

(in thousands) Consolidated Balance Sheet Classification October 1, 2022

As of April 1, 2023, the fair values of our derivative financial instrument and their classifications on the Condensed Consolidated Balance Sheets were as follows:

(in thousands) Consolidated Balance Sheet Classification April 1, 2023

Derivatives Designated as Hedging Instruments

3 unchanged sentences

Derivatives Not Designated as Hedging Instruments

Foreign exchange forward contract Other long-term liabilities $ 3,179

The pre-tax losses recognized on derivative financial instruments in the Condensed Consolidated Statements of Operations for the three and nine months ended October 1, 2022 were as follows:

Three Months Ended Nine Months Ended

(in thousands) Classification of Loss Recognized in the

Condensed Consolidated Statements of Operations October 1, 2022 October 1, 2022

Foreign exchange forward contract Prepaid expenses and other current assets $ 7,092

The pre-tax gains recognized on derivative financial instruments in the Condensed Consolidated Statements of Operations for the three months ended April 1, 2023 were as follows:

Three Months Ended

(in thousands) Classification of Gain Recognized in the

Condensed Consolidated Statements of Operations April 1, 2023

Derivatives designated as cash flow hedges

Interest rate swap agreement Interest expense, net $ 314 $ 335

Interest rate swap agreement Interest expense $ ( 975 )

Derivatives Not Designated as Hedging Instruments

Foreign exchange forward contract Foreign exchange loss $ 3,209 $ 3,209

The pre-tax gain recognized on derivative financial instruments in the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended October 1, 2022 was as follows:

Three Months Ended Nine Months Ended

(in thousands) October 1, 2022 October 1, 2022

Foreign exchange forward contract Foreign exchange (gain) loss $ ( 819 )

The pre-tax gain recognized on derivative financial instruments in the Condensed Consolidated Statements of Comprehensive Income for the three months ended April 1, 2023 was as follows:

Three Months Ended

(in thousands) April 1, 2023

Derivatives designated as cash flow hedges

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The marketable securities are classified as Level 1 under the fair value hierarchy as they are maintained in mutual funds with readily determinable fair value and recorded in Other long-term assets.

There we re no changes during the quarter ended October 1, 2022 to the Company’s valuation techniques used to measure asset and liability fair values o n a recurring basis.

As of October 1, 2022 and January 1, 2022, the Company did not hold any non-financial assets or liabilities that are required to be measured at fair value on a recurring basis.

The following table presents assets measured at fair value by classification within the fair value hierarchy as of October 1, 2022:

There we re no changes during the quarter ended April 1, 2023 to the Company’s valuation techniques used to measure asset and liability fair values o n a recurring basis.

As of April 1, 2023 and December 31, 2022, the Company did not hold any non-financial assets or liabilities that are required to be measured at fair value on a recurring basis.

The following table presents assets measured at fair value by classification within the fair value hierarchy as of April 1, 2023:

Fair Value Measurements Using

9 unchanged sentences

Total $ 194,430 $ — $ — $ 194,430

The following table presents assets measured at fair value by classification within the fair value hierarchy as of January 1, 2022:

The following table presents assets measured at fair value by classification within the fair value hierarchy as of December 31, 2022:

Fair Value Measurements Using

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Due to their short-term maturity, the carrying amounts of cash and cash equivalents, short-term investments and accounts receivable approximate their fair values.

The Company’s Credit Facilities’ fair values approximate book value at October 1, 2022 and January 1, 2022, as the rates on these borrowings are variable in nature.

The carrying value and estimated fair values of the Company’s Euro Senior Notes, Series A and Series B and USD Senior Notes, Series A and Series B, as of October 1, 2022 and January 1, 2022 were as follows:

October 1, 2022 January 1, 2022

The Company’s revolving and term loan debt facilities' fair values approximate book value at April 1, 2023 and December 31, 2022, as the rates on these borrowings are variable in nature.

The carrying value and estimated fair values of the Company’s Euro Senior Notes, Series A and Series B and USD Senior Notes, Series A and Series B, as of April 1, 2023 and December 31, 2022 were as follows:

April 1, 2023 December 31, 2022

(in thousands) Carrying

4 unchanged sentences

Euro Senior Notes, Series B due 2028 103,693 90,411 101,265 87,119

USD Senior Notes, Series A due 2022 — — 25,000 25,055

USD Senior Notes, Series B due 2027 100,000 95,299 100,000 93,764

3 unchanged sentences

Benefit Plans

The Company has company-sponsored defined benefit pension plans covering employees in the U.K., Germany, the Philippines, China, Japan, Mexico, Italy and France.

The amount of the retirement benefits provided under the plans is based on years of service and final average pay.

The Company has Company-sponsored and mandatory defined benefit pension plans covering employees in the United Kingdom ("U.K."), Germany, the Philippines, China, Japan, Mexico, Italy and France.

The amount of the retirement benefits provided under the plans is generally based on years of service and final average pay.

The Company recognizes interest cost, expected return on plan assets, and amortization of prior service, net within Other (income) expense, net in the Condensed Consolidated Statements of Net Income.

The components of net periodic benefit cost for the three and nine months ended October 1, 2022 and September 25, 2021 were as follows:

For the Three Months Ended For the Nine Months Ended

(in thousands) October 1, 2022 September 25, 2021 October 1, 2022 September 25, 2021

The components of net periodic benefit cost for the three months ended April 1, 2023 and April 2, 2022 were as follows:

For the Three Months Ended

(in thousands) April 1, 2023 April 2, 2022

Components of net periodic benefit cost:

6 unchanged sentences

The Company also sponsors certain post-employment plans in foreign countries and other statutory benefit plans.

The Company recorded expense of $ 0.5 million and $ 0.6 million for the three months ended October 1, 2022 and September 25, 2021 , respectively, and $ 1.5 million and $ 1.6 million for the nine months ended October 1, 2022 and September 25, 2021, respectively, in Cost of Sales and Other (income) expense, net within the Condensed Consolidated Statements of Net Income.

The pre-tax amounts recognized in other comprehensive loss (income) as components of net periodic benefit costs for these plans were $ 0.1 million and $ 0.2 million for the three months ended October 1, 2022 and September 25, 2021, respectively, and $ 0.3 million and $ 0.5 million for the nine months ended October 1, 2022 and September 25, 2021, respectively.

Other Comprehensive (Loss) Income

Changes in other comprehensive (loss) income by component were as follows:

The Company recorded expense of $ 0.4 million and $ 0.5 million for the three months ended April 1, 2023 and April 2, 2022 , respectively, in Cost of Sales and Other (income) expense, net within the Condensed Consolidated Statements of Net Income.

The pre-tax amounts recognized in other comprehensive income (loss) as components of net periodic benefit costs for these plans were nominal and $ 0.1 million for the three months ended April 1, 2023 and April 2, 2022, respectively.

Other Comprehensive Income

Changes in other comprehensive income by component were as follows:

(in thousands) Three Months Ended

October 1, 2022 Three Months Ended

September 25, 2021

Pre-tax Tax Net of Tax Pre-tax Tax Net of Tax

April 1, 2023

Pre-tax Tax Net of Tax

Defined benefit pension plan and other adjustments $ 24 $ ( 18 ) $ 6

Cash flow hedge ( 3,313 ) 795 ( 2,518 )

Foreign currency translation adjustments (1) ( 37,289 ) ( 893 ) ( 36,396 ) ( 5,441 ) — ( 5,441 )

Total change in other comprehensive (loss) income $ ( 26,604 ) $ 1,584 $ ( 28,188 ) $ ( 4,840 ) $ 114 $ ( 4,954 )

(in thousands) Nine Months Ended

October 1, 2022 Nine Months Ended

September 25, 2021

Pre-tax Tax Net of Tax Pre-tax Tax Net of Tax

Defined benefit pension plan adjustments $ 1,718 $ 170 $ 1,548 1,479 209 $ 1,270

Cash flow hedge 9,300 2,232 7,068 — — —

Foreign currency translation adjustments (1) ( 72,671 ) ( 2,315 ) ( 70,356 ) $ ( 5,641 ) $ — $ ( 5,641 )

Total change in other comprehensive (loss) income $ ( 61,653 ) $ 87 $ ( 61,740 ) $ ( 4,162 ) $ 209 $ ( 4,371 )

(1) The tax shown above within the foreign currency translation adjustments is the U.S.

Foreign currency translation adjustments (a) 16,068 ( 273 ) 15,795

Total change in other comprehensive income (loss) $ 12,779 $ 504 $ 13,283

(a) The tax shown above within the foreign currency translation adjustments is the U.S.

tax associated with the foreign currency translation adjustments of earnings of non-U.S.

1 unchanged sentence

and are not permanently reinvested.

The following tables set forth the changes in accumulated other comprehensive (loss) income by component for the nine months ended October 1, 2022 and September 25, 2021:

The following tables set forth the changes in accumulated other comprehensive loss by component for the three months ended April 1, 2023 and April 2, 2022:

(in thousands) Defined benefit pension plan and other adjustments Cash flow hedge Foreign currency

1 unchanged sentence

comprehensive loss

Balance at January 1, 2022 $ ( 11,928 ) $ — $ ( 61,535 ) $ ( 73,463 )

Balance at December 31, 2022 $ ( 2,193 ) $ 6,596 $ ( 100,167 ) $ ( 95,764 )

Activity in the period 6 ( 2,518 ) 15,795 13,283

Balance at October 1, 2022 $ ( 10,380 ) $ 7,068 $ ( 131,891 ) $ ( 135,203 )

Balance at April 1, 2023 $ ( 2,187 ) $ 4,078 $ ( 84,372 ) $ ( 82,481 )

(in thousands) Defined benefit pension plan and other adjustments Foreign currency translation adjustment Accumulated other comprehensive loss

Balance at December 26, 2020 $ ( 34,141 ) $ ( 57,016 ) $ ( 91,157 )

Balance at January 1, 2022 $ ( 11,928 ) $ ( 61,535 ) $ ( 73,463 )

Activity in the period 310 ( 2,513 ) ( 2,203 )

Balance at September 25, 2021 $ ( 32,871 ) $ ( 62,657 ) $ ( 95,528 )

Amounts reclassified from accumulated other comprehensive (loss) income to earnings for the three and nine months ended October 1, 2022 and September 25, 2021 were as follows:

Three Months Ended Nine Months Ended

(in thousands) October 1, 2022 September 25, 2021 October 1, 2022 September 25, 2021

Balance at April 2, 2022 $ ( 11,618 ) $ ( 64,048 ) $ ( 75,666 )

Amounts reclassified from accumulated other comprehensive loss to e arnings for the three months ended April 1, 2023 and April 2, 2022 were as follows:

Three Months Ended

(in thousands) April 1, 2023 April 2, 2022

Pension and Postemployment plans:

Amortization of prior service and net actuarial loss $ 193 $ 501 $ 588 $ 1,514

Amortization of prior service and net actuarial (gain) loss $ ( 11 ) $ 197

The Company recognizes the amortization of prior service costs in Other (income) expense, net within the Condensed Consolidated Statements of Net Income.

The effective tax rate for the three and nine months ended October 1, 2022 was 21.4 % and 17.6 % , respectively, compared to the effe ctive tax rate for the three and nine months ended September 25, 2021 of 19.0 % and 17.6 %, respectively.

The effective tax rate for the third quarter of 2022 is higher than the effective tax rate for the comparable 2021 period, primarily due to higher foreign exchange losses with no related tax benefit in the 2022 period, as compared to the comparable 2021 period.

The effective tax rate for the first nine months of the 2022 period is lower than the applicable U.S.

statutory tax rate due to a one-time deduction that resulted from the dissolution of one of the Company’s affiliates, as well as the forecasted impact of income earned in lower tax jurisdictions.

The effective tax rate for the comparable 2021 period is lower than the applicable U.S.

statutory tax rate primarily due to the forecasted impact of income earned in lower tax jurisdictions.

The effective tax rate for the three months ended April 1, 2023 was 18.5 %, compared to the effective tax rate for the three months ended April 2, 2022 of 12.4 %.

The effective tax rate for the first quarter of 2023 is higher than the effective tax rate for the comparable 2022 period, primarily due to the impact in the 2022 period of a one-time deduction that resulted in a net benefit of $ 7.2 million from the dissolution of one of the Company’s affiliates.

The effective tax rates for both periods were lower than the applicable U.S.

statutory tax rate primarily due to income earned in lower tax jurisdictions, while for the 2022 period, the effective tax rate also was lower due to the impact of the one-time deduction referred to in the preceding sentence.

Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:

Three Months Ended Nine Months Ended

(in thousands, except per share amounts) October 1, 2022 September 25, 2021 October 1, 2022 September 25, 2021

Three Months Ended

(in thousands, except per share amounts) April 1, 2023 April 2, 2022

Net income as reported $ 88,745 $ 117,518

6 unchanged sentences

Diluted earnings per share $ 3.54 $ 4.70

Potential shares of common stock relating to stock options and restricted share units excluded from the earnings per share calculation because their effect would be anti-dilutive were 92,052 and 57,936 for the three months ended October 1, 2022 and September 25, 2021, respectively, and 84,027 and 32,773 for the nine months ended October 1, 2022 and September 25, 2021, respectively.

Potential shares of common stock relating to stock options and restricted share units excluded from the earnings per share calculation because their effect would be anti-dilutive were 90,297 and 57,928 for the three months ended April 1, 2023 and April 2, 2022, respectively.

Share Repurchase Program

On April 28, 2021, the Company announced that the Board of Directors authorized a new three year program to repurchase up to $ 300.0 million in the aggregate of shares of the Company’s common stock for the period May 1, 2021 to April 30, 2024 to replace its previous 2020 program.

The Company did no t repurchase any shares of its common stock for the three and nine months ended October 1, 2022, and September 25, 2021.

The Company did no t repurchase any shares of its common stock for the three months ended April 1, 2023, and April 2, 2022.

Related Party Transactions

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One member of the Company's Board of Directors serves on the Board of Directors of ATEC.

Three Months Ended October 1, 2022 Three Months Ended September 25, 2021

(in millions) Powersem EB Tech ATEC Powersem EB Tech ATEC

Purchase material/service from related party $ — $ 0.1 $ 2.9 $ 0.8 $ 0.1 $ 3.1

For the Nine Months Ended October 1, 2022 For the Nine Months Ended September 25, 2021

Three Months Ended April 1, 2023 Three Months Ended April 2, 2022

(in millions) Powersem EB Tech ATEC Powersem EB Tech ATEC

1 unchanged sentence

Purchase material/service from related party $ 1.0 $ 0.1 $ 2.7 $ 0.2 $ 0.1 $ 2.9

October 1, 2022 January 1, 2022

April 1, 2023 December 31, 2022

(in millions) Powersem EB Tech ATEC Powersem EB Tech ATEC

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• 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;

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 infrastructure, aerospace, power supplies, data centers and telecommunications, medical devices, alternative energy and energy storage, building and home automation, appliances, and mobile electronics.

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:

Formerly known as Automotive segment.

The term “Transportation” represents a more comprehensive description of the Company’s broad range of products, and the applications and end markets it serves.

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 vehicle, heavy-duty truck, off-road vehicle, material handling, agricultural, construction and other commercial vehicle end markets.

Passenger vehicle products are used in internal combustion engine, 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, construction, agriculture, material handling and marine.

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, construction, agriculture, material handling and marine.

• Industrial Segment:

Consists of industrial circuit protection (industrial fuses), industrial controls (protection relays, contactors, and transformers) and temperature sensors for use in various applications such as renewable energy and energy storage systems, electric vehicle infrastructure, HVAC systems, industrial safety, non-residential construction, MRO, mining and industrial automation.

Consists of industrial circuit protection (industrial fuses), industrial controls (protection relays, contactors, transformers, residual current devices, ground fault circuit interrupters, residual current monitors, and arc fault detection devices) and temperature sensors for use in various applications such as renewable energy and energy storage systems, industrial safety, industrial automation, electr ic vehicle infrastructure, HVAC systems, non-residential construction, MRO, and mining.

Segment information is summarized as follows:

Three Months Ended Nine Months Ended

(in thousands) October 1, 2022 September 25, 2021 October 1, 2022 September 25, 2021

Three Months Ended

(in thousands) April 1, 2023 April 2, 2022

Electronics $ 358,593 $ 365,821

14 unchanged sentences

Interest expense 9,646 4,302

Foreign exchange loss 18,191 3,154 40,051 8,315

Foreign exchange (gain) loss ( 1,675 ) 7,736

Other (income) expense, net ( 6,233 ) 4,427

Income before income taxes $ 108,903 $ 134,125

(a) Included in “Other” Operating income for the third quarter of 2022 was $ 6.8 million ($ 11.6 million year-to-date) of purchase accounting inventory step-up charges, $ 6.2 million ($ 14.8 million year-to-date) of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, and $ 3.4 million ($ 4.3 million year-to-date) of restructuring, impairment and other charges, primarily related to employee termination costs.

(a) Included in “Other” Operating income for the first quarter of 2023 was $ 3.3 million of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, and $ 1.9 million of restructuring, impairment and other charges, primarily related to employee termination costs.

See Note 7, Restructuring, Impairment, and Other Charges, for further discussion.

Included in “Other” Operating income for the third quarter of 2021 was $ 6.8 million year-to-date of purchase accounting inventory step-up charges, $ 2.0 million ($ 3.4 million year-to-date) of legal and professional fees and other integration expenses related to Hartland and other contemplated acquisitions, and $ 0.8 million ($ 2.0 million year-to-date) of restructuring, impairment and other charges, primarily related to employee termination costs.

Included in “Other” Operating income for the first quarter of 2022 was $ 4.8 million of purchase accounting inventory step-up charges, $ 3.8 million of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, and $ 0.2 million of restructuring, impairment and other charges, primarily related to employee termination costs.

See Note 7 , Restructuring, Impairment, and Other Charges, for further discussion.

In addition, there was a year-to-date gain of $ 0.9 million recorded for the sale of a building within the Electronics segment.

The Company’s net sales by country were as follows:

Three Months Ended Nine Months Ended

(in thousands) October 1, 2022 September 25, 2021 October 1, 2022 September 25, 2021

Three Months Ended

(in thousands) April 1, 2023 April 2, 2022

United States $ 212,195 $ 220,238

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

(in thousands) October 1, 2022 January 1, 2022

(in thousands) April 1, 2023 December 31, 2022

Long-lived assets

8 unchanged sentences

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

Nine Months Ended

(in thousands) October 1, 2022 September 25, 2021

Three Months Ended

(in thousands) April 1, 2023 April 2, 2022

Additions to long-lived assets

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements