What changed in this filing

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Item 1. Financial Statements

2023-08-02 compared with 2023-05-03 · 176 added, 135 removed, 650 unchanged (32% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands) April 1,

(in thousands) July 1,

2023 December 31,

2 unchanged sentences

Short-term investments 84 84

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

Trade receivables, less allowanc es o f $ 86,968 a n d $ 83,562 at July 1, 2023 and December 31, 2022, respectively

339,637 306,578

26 unchanged sentences

34,000,000 shares authorized;

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

shares issued, July 1, 2023– 26,579,761 ;

December 31, 2022– 26,445,618

13 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME

Three Months Ended

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

2023 April 2,

Three Months Ended Six Months Ended

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

Net sales $ 611,997 $ 618,436 $ 1,221,779 $ 1,241,766

22 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended

(in thousands) April 1,

2023 April 2,

Three Months Ended Six Months Ended

(in thousands) July 1,

Net income $ 70,071 $ 87,016 $ 158,816 $ 204,534

Other comprehensive income (loss):

Other comprehensive (loss) income:

Pension and postemployment adjustment, net of tax ( 159 ) 639 ( 153 ) 949

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Three Months Ended

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

Six Months Ended

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

OPERATING ACTIVITIES

5 unchanged sentences

Non-cash inventory charges — 4,769

Impairment charges 3,924 18

Stock-based compensation 16,275 15,268

15 unchanged sentences

FINANCING ACTIVITIES

Proceeds of term loan — 300,000

Payments of senior notes payable — ( 25,000 )

2 unchanged sentences

Net proceeds related to stock-based award activities 2,201 ( 1,626 )

Debt issuance costs — ( 2,156 )

Cash dividends paid ( 29,790 ) ( 26,201 )

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

Net cash (used in) provided by financing activities ( 32,686 ) 245,017

Effect of exchange rate changes on cash, cash equivalents, and restricted cash ( 1,772 ) ( 15,511 )

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

(Decrease) increase in cash, cash equivalents, and restricted cash ( 81,845 ) 329,461

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 $ 1,580 $ 1,522

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

Cash paid during the period for interest $ 21,310 $ 8,365

Capital expenditures, not yet paid $ 10,183 $ 7,243

9 unchanged sentences

Net income — — — — 88,745 — 88,745

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

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

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

5 unchanged sentences

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

Net income — — — — 70,071 — 70,071

Other comprehensive loss, net of tax — — — ( 14,911 ) — — ( 14,911 )

Stock-based compensation — 12,545 — — — — 12,545

Non-controlling interest $ ( 45 ) $ 45 —

Withheld shares on restricted share units for withholding taxes — — ( 5,999 ) — — — ( 5,999 )

Stock options exercised — 2,979 — — — — 2,979

Cash dividends paid ($ 0.60 per share)

— — — — ( 14,910 ) — ( 14,910 )

Balance at July 1, 2023 $ 261 $ 998,589 $ ( 258,883 ) $ ( 97,392 ) $ 1,714,381 $ 295 $ 2,357,251

Littelfuse, Inc.

12 unchanged sentences

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

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

See accompanying Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

Nature of Operations

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

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

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

Across more than 20 countries, and with approximate ly 18,000 glob al 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.

2 unchanged sentences

Generally Accepted Accounting Principles (“GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X.

Accordingly, certain information and disclosures normally included in the consolidated balance sheets, statements of net income and comprehensive income, statements of cash flows, and statement of stockholders' equity prepared in conformity with U.S.

Accordingly, certain information and disclosures normally included in the consolidated balance sheets, statements of net income and comprehensive income, statements of cash flows, and statements of stockholders' equity prepared in conformity with U.S.

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.

4 unchanged sentences

Revenue Disaggregation

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

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

Three Months Ended July 1, 2023 Six Months Ended July 1, 2023

(in thousands) Electronics

1 unchanged sentence

Segment Industrial

Total Electronics

Segment Transportation

Segment Industrial

Electronics – Passive Products and Sensors $ 152,852 $ — $ — $ 152,852 $ 301,450 $ — $ — $ 301,450

5 unchanged sentences

Total $ 350,147 $ 172,048 $ 89,802 $ 611,997 $ 708,740 $ 338,689 $ 174,350 $ 1,221,779

Three Months Ended April 2, 2022

Three Months Ended July 2, 2022 Six Months Ended July 2, 2022

(in thousands) Electronics

1 unchanged sentence

Segment Industrial

Segment Transportation

Segment Industrial

Electronics – Passive Products and Sensors $ 162,313 $ — $ — $ 162,313 $ 332,256 $ — $ — $ 332,256

24 unchanged sentences

This program allows the distributor to debit the Company for the difference between the distributors’ contracted price and a lower price for specific transactions.

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

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

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.

9 unchanged sentences

Cash, Cash Equivalents, and Restricted Cash

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

The following table provides a reconciliation of cash, cash equivalents and restricted cash at July 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) July 1, 2023 December 31, 2022

Cash and cash equivalents $ 480,743 $ 562,588

16 unchanged sentences

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.

On February 3, 2023, the Company completed the 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.

22 unchanged sentences

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 .

Included in the Company’s Condensed Consolidated Statements of Net Income for the three and six months ended July 1, 2023 are net sales of approximately $ 4.8 million and $ 7.5 million respectively, and an income before income taxes of $ 0.3 million and $ 0.2 million, respectively, since the February 3, 2023 acquisition of Western Automation.

During the six months ended July 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.

6 unchanged sentences

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.

17 unchanged sentences

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

During the three months ended July 1, 2023, the Company recorded measurement period adjustments to increase other non-current liabilities of $ 4.2 million associated with uncertain tax positions, income taxes payable of $ 0.2 million, and reduce accrued liabilities of $ 0.3 million and deferred tax liabilities of $ 0.2 million.

As a result of these adjustments, goodwill was increased by $ 3.9 million.

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.

6 unchanged sentences

Pro Forma Results

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 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 business acquired on November 30, 2021 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 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

For the Three Months Ended For the Six Months Ended

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

Net sales $ 611,997 $ 684,835 $ 1,223,665 $ 1,376,586

4 unchanged sentences

Pro forma results presented above primarily reflect the following adjustments:

For the Three Months Ended

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

For the Three Months Ended For the Six Months Ended

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

Amortization (a) $ — $ ( 3,709 ) $ ( 479 ) $ ( 7,439 )

4 unchanged sentences

Income tax expense of above items ( 3 ) ( 55 ) ( 118 ) ( 1,250 )

(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.

(a) The amortization adjustment for the six months ended July 1, 2023 and three and six months ended July 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 and six months ended July 1, 2023 and three and six months ended July 2, 2022, and recognition of those fees during the three and six months ended July 1, 2023.

(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.

1 unchanged sentence

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

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

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

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

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

Raw materials $ 229,813 $ 231,043

4 unchanged sentences

Property, Plant, and Equipment

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

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

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

Land and land improvements $ 21,970 $ 22,089

3 unchanged sentences

Total $ 481,567 $ 481,110

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.

The Company recorded depreciation expense of $ 18.0 million and $ 15.7 million for the three months ended July 1, 2023 and July 2, 2022, respectively, and $ 35.6 million and $ 31.3 million for the six months ended July 1, 2023 and July 2, 2022, respectively.

Goodwill and Other Intangible Assets

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

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

(in thousands) Electronics Transportation Industrial Total

9 unchanged sentences

Currency translation 3,384 365 ( 185 ) 3,564

Net book value of goodwill as of April 1, 2023

Gross goodwill as of April 1, 2023

Net book value of goodwill as of July 1, 2023

Gross goodwill as of July 1, 2023

916,430 235,281 179,719 1,331,430

Accumulated impairment losses as of April 1, 2023

Accumulated impairment losses as of July 1, 2023

— ( 33,524 ) $ ( 8,718 ) ( 42,242 )

Total $ 916,430 $ 201,757 $ 171,001 $ 1,289,188

(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

(a) The additions resulted from the acquisitions of Western Automation and measurement period adjustment related to the C&K acquisition.

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

As of July 1, 2023

(in thousands) Gross

12 unchanged sentences

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

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:

During the three months ended July 1, 2023 and July 2, 2022, the Company recorded amortization expense of $ 16.9 million and $ 11.6 million, respectively.

During the six months ended July 1, 2023 and July 2, 2022, the Company recorded amortization expense of 33.8 million and $ 24.3 million, respectively.

During the six months ended July 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 April 1, 2023 is as follows:

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

(in thousands)

3 unchanged sentences

Accrued Liabilities

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

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

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

Employee-related liabilities $ 63,644 $ 99,089

5 unchanged sentences

Deferred revenue 2,488 2,593

Current benefit liability 1,318 1,318

Restructuring liability 1,744 2,434

Current benefit liability 1,318 1,318

Other 38,318 41,515

4 unchanged sentences

Restructuring, Impairment, and Other Charges

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

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

Three months ended July 1, 2023 Six months ended July 1, 2023

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

Employee terminations $ 987 $ 351 $ 277 $ 1,615 $ 1,659 $ 933 $ 594 $ 3,186

Other restructuring charges 250 412 654 1,316 257 684 654 1,595

Total restructuring charges 1,237 763 931 2,931 1,916 1,617 1,248 4,781

Impairment — 3,870 54 3,924 — 3,870 54 3,924

Total $ 1,237 $ 4,633 $ 985 $ 6,855 $ 1,916 $ 5,487 $ 1,302 $ 8,705

Three months ended April 2, 2022

(in thousands) Electronics Transportation Industrial Total

Three months ended July 2, 2022 Six months ended July 2, 2022

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

Employee terminations $ 201 $ 423 $ — $ 624 $ 406 $ 423 $ — $ 829

1 unchanged sentence

Total $ 204 $ 430 $ — $ 634 $ 409 $ 443 $ — $ 852

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.

For the three and six months ended July 1, 2023, the Company recorded total restructuring charges of $ 2.9 million and $ 4.8 million, respectively, primarily for employee termination costs.

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

In addition, during the second quarter of 2023, the Company recognized a $ 3.9 million impairment charge related to the land and building of a property in the commercial vehicle business within the Transportation segment that the Company made the decision to donate.

For the three and six months ended July 2, 2022, the Company recorded total restructuring charges of $ 0.6 million and $ 0.9 million, respectively.

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 as of July 1, 2023 and December 31, 2022 is $ 1.7 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 April 1, 2023 and December 31, 2022 are as follows:

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

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

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

Revolving Credit Facility $ 100,000 $ 100,000

2 unchanged sentences

Euro Senior Notes, Series B due 2028 103,298 101,265

Senior Notes, Series A due 2022 — —

Senior Notes, Series B due 2027 100,000 100,000

22 unchanged sentences

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 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.

During the three and six months ended July 1, 2023, the Company made payments of $ 1.9 million and $ 3.8 million on its term loan, respectively.

The revolving loan and term loan balance under the Credit Facility was $ 100.0 million and $ 292.5 million, respectively, as of July 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 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.

As of July 1, 2023, the effective interest rate on revolving loan and term loan outstanding borrowings was 6.45 %.

As of July 1, 2023, the Company had $ 0.2 million outstanding letters of credit under the Credit Facility and had $ 599.8 million of borrowing capacity available under the revolving Credit Facility.

As of July 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.

27 unchanged sentences

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

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

At July 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 $ 11.0 million and $ 6.0 million for the three months ended April 1, 2023 and April 2, 2022, respectively.

Interest paid on all Company debt was $ 10.3 million and $ 2.3 million for the three months ended July 1, 2023 and July 2, 2022, respectively, and $ 21.3 million and $ 8.4 million for the six months ended July 1, 2023 and July 2, 2022, respectively.

Fair Value of Assets and Liabilities

20 unchanged sentences

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.

2 unchanged sentences

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

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

The notional value of the forward contract at July 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 (gain) loss in the Consolidated Statements of Operations.

As a result, changes in fair value are reported in Foreign exchange (gain) loss in the Condensed 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 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

As of July 1, 2023 and December 31, 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 July 1, 2023 December 31, 2022

Derivatives Designated as Hedging Instruments

4 unchanged sentences

Foreign exchange forward contract Prepaid expenses and other current assets $ 7,245 $ 6,186

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

The pre-tax (gains) losses recognized on derivative financial instruments in the Condensed Consolidated Statements of Operations for the three and six months ended July 1, 2023 and July 2, 2022 were as follows:

Three Months Ended Six Months Ended

(in thousands) Classification of (Gain) Loss Recognized in the

Condensed Consolidated Statements of Operations July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

Derivatives designated as cash flow hedges

Interest rate swap agreement Interest expense $ ( 975 )

Interest rate swap agreement Interest expense, net $ ( 1,119 ) $ 21 $ ( 2,094 ) $ 21

Derivatives Not Designated as Hedging Instruments

Foreign exchange forward contract Foreign exchange (gain) loss $ ( 264 ) $ — $ ( 1,083 ) $ —

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

The pre-tax (gains) losses recognized on derivative financial instruments in the Condensed Consolidated Statements of Comprehensive Income for the three and six months ended July 1, 2023 and July 2, 2022 was as follows:

Three Months Ended Six Months Ended

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

Derivatives designated as cash flow hedges

4 unchanged sentences

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 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:

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

As of July 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 July 1, 2023:

Fair Value Measurements Using

24 unchanged sentences

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 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

The Company’s revolving and term loan debt facilities' fair values approximate book value at July 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 July 1, 2023 and December 31, 2022 were as follows:

July 1, 2023 December 31, 2022

(in thousands) Carrying

12 unchanged sentences

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 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

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

For the Three Months Ended For the Six Months Ended

(in thousands) July 1, 2023 July 2, 2022 July 1, 2023 July 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 $ 0.4 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:

The Company recorded expense of $ 0.4 million and $ 0.5 million for the three months ended July 1, 2023 and July 2, 2022 , respectively, and of $ 0.8 million and $ 0.5 million for the six months ended July 1, 2023 and July 2, 2022, respectively, in Cost of Sales and Other (income) expense, net within the Condensed Consolidated Statements of Net Income.

Other Comprehensive (Loss) Income

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

(in thousands) Three Months Ended

April 1, 2023

Pre-tax Tax Net of Tax

July 1, 2023 Three Months Ended

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

Defined benefit pension plan and other adjustments $ ( 146 ) $ ( 13 ) $ ( 159 ) $ 722 $ ( 83 ) $ 639

1 unchanged sentence

Foreign currency translation adjustments (a) ( 17,865 ) — ( 17,865 ) ( 32,167 ) 720 ( 31,447 )

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

Total change in other comprehensive (loss) income $ ( 13,915 ) $ ( 996 ) $ ( 14,911 ) $ ( 32,157 ) $ 808 $ ( 31,349 )

(in thousands) Six Months Ended

July 1, 2023 Six Months Ended

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

Defined benefit pension plan adjustments $ ( 122 ) $ ( 31 ) $ ( 153 ) 1,045 ( 96 ) $ 949

Cash flow hedge 783 ( 188 ) 595 ( 712 ) 171 ( 541 )

Foreign currency translation adjustments (a) ( 1,797 ) ( 273 ) ( 2,070 ) $ ( 35,382 ) $ 1,422 $ ( 33,960 )

Total change in other comprehensive (loss) income $ ( 1,136 ) $ ( 492 ) $ ( 1,628 ) $ ( 35,049 ) $ 1,497 $ ( 33,552 )

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

2 unchanged sentences

and are not permanently reinvested.

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:

The following tables set forth the changes i n accumulated other comprehensive loss by compon ent for the six months ended July 1, 2023 and July 2, 2022:

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

3 unchanged sentences

Activity in the period ( 153 ) 595 ( 2,070 ) ( 1,628 )

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 July 1, 2023 $ ( 2,346 ) $ 7,191 $ ( 102,237 ) $ ( 97,392 )

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

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

Activity in the period 949 ( 541 ) ( 33,960 ) ( 33,552 )

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

Balance at July 2, 2022 $ ( 10,979 ) $ ( 541 ) $ ( 95,495 ) $ ( 107,015 )

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

Three Months Ended Six Months Ended

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

Pension and Postemployment plans:

1 unchanged sentence

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 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 rate for the three and six months ended July 1, 2023 was 18.0 % and 18.3 %, respectively, compared to the effective tax rate for the three and six months ended July 2, 2022 of 20.6 % and 16.1 %, respectively.

The effective tax rate for the second quarter of 2023 is lower than the effective tax rate for the comparable 2022 period, primarily due to the impact of foreign exchange losses with no related tax benefit in the 2022 period.

The effective tax rate for the first six months of 2023 is higher than the effective tax rate for the comparable 2022 period, primarily due to the impact of a one-time deduction in the first quarter of 2022 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.

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

Earnings Per Share

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

Three Months Ended

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

Three Months Ended Six Months Ended

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

Net income as reported $ 70,071 $ 87,016 $ 158,816 $ 204,534

6 unchanged sentences

Diluted earnings per share $ 2.79 $ 3.48 $ 6.33 $ 8.19

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.

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 110,598 and 88,130 for the three months ended July 1, 2023 and July 2, 2022, respectively, and 102,283 and 72,970 for the six months ended July 1, 2023 and July 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 months ended April 1, 2023, and April 2, 2022.

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

Related Party Transactions

10 unchanged sentences

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

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

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

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

1 unchanged sentence

Purchase material/service from related party 1.1 0.1 2.9 0.1 0.1 3.0

April 1, 2023 December 31, 2022

Six Months Ended July 1, 2023 Six Months Ended July 2, 2022

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

Sales to related party $ 1.2 $ — $ — $ — $ — $ —

Purchase material/service from related party 2.1 0.2 5.6 0.3 0.2 5.9

July 1, 2023 December 31, 2022

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

Accounts payable balance $ 0.7 $ — $ 2.0 $ — $ — $ 1.8

15 unchanged sentences

• Electronics Segment :

Consists of one of the broadest product offerings in the industry, including fuses and fuse accessories, positive temperature coefficient (“PTC”) resettable fuses, electromechanical switches and interconnect solutions, polymer electrostatic discharge (“ESD”) suppressors, varistors, reed switch based magnetic sensing, gas

discharge tubes;

semiconductor products such as discrete transient voltage suppressor (“TVS”) diodes, TVS diode arrays, protection and switching thyristors, silicon and silicon carbide metal-oxide-semiconductor field effect transistors (“MOSFETs”) and diodes;

2 unchanged sentences

• 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.

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 and bus, off-road and recreational vehicles, material handling equipment, agricultural machinery, construction equipment and other commercial vehicle end markets.

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

• Industrial Segment:

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.

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, factory automation, electr ic vehicle infrastructure, HVAC systems, non-residential construction, MRO, and mining.

Segment information is summarized as follows:

Three Months Ended

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

Three Months Ended Six Months Ended

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

Electronics $ 350,147 $ 358,176 $ 708,740 $ 723,997

17 unchanged sentences

Income before income taxes $ 85,451 $ 109,612 $ 194,354 $ 243,737

(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.

(a) Included in “Other” Operating income for the second quarter of 2023 was $ 3.9 million ($ 7.2 million year-to-date) of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, and $ 2.9 million ($ 4.8 million year-to-date) of restructuring charges, primarily related to employee termination costs.

In addition, during the second quarter of 2023, the Company recognized a $ 3.9 million impairment charge related to the land and building in the commercial vehicle business within the Transportation segment.

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

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.

Included in “Other” Operating income for the second quarter of 2022 was $ 4.8 million ($ 8.6 million year-to-date) of legal and professional fees and other integration expenses related to the acquisition of C&K and other integration expenses related to completed and contemplated acquisitions, and $ 0.6 million ($ 0.8 million year-to-date) of restructuring, impairment and other charges, primarily related to employee termination costs, and $ 4.8 million year-to-date of purchase accounting inventory step-up charges.

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

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

Three Months Ended

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

Three Months Ended Six Months Ended

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

United States $ 205,793 $ 224,743 $ 417,988 $ 444,981

4 unchanged sentences

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

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

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

Long-lived assets

8 unchanged sentences

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

Three Months Ended

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

Six Months Ended

(in thousands) July 1, 2023 July 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