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Item 2. Management’s Discussion and Analysis

2025-10-29 compared with 2025-07-30 · 141 added, 126 removed, 212 unchanged (56% of the section changed)

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Executive Summary

For the second quarter of 2025, the Company recognized net sales of $613.4 million, an increase of $54.9 million, or 9.8% as compared to $558.5 million in the second quarter of 2024 including $13.4 million or 2.4% of incremental net sales from the Dortmund Fab acquisition (defined below) in the semiconductor business within the Electronics segment and $7.0 million or 1.3% of favorable changes in foreign exchange rates.

The remaining increase in net sales was primarily due to higher volume in the Electronics and Industrial segments.

The Company recognized net income of $57.3 million, or $2.30 per diluted share, in the second quarter of 2025 compared to $45.5 million, or $1.82 per diluted share, in the second quarter of 2024.

The increase in net income was primarily due to higher operating income across all segments driven by increases in net sales, volume leverage and cost saving initiatives, which were partially offset by higher foreign exchange losses.

Net cash provided by operating activities was $148.2 million for the six months ended June 28, 2025 compared to $126.6 million for the six months ended June 29, 2024.

The increase in net cash provided by operating activities was primarily due to higher cash earnings.

For the third quarter of 2025, the Company recognized net sales of $624.6 million, an increase of $57.3 million, or 10.1% as compared to $567.4 million in the third quarter of 2024 including $12.9 million or 2.3% of incremental net sales, from the Dortmund Fab acquisition (defined below) in the semiconductor business within the Electronics segment and $7.4 million, or 1.3% of favorable changes in foreign exchange rates.

The remaining increase in net sales was primarily due to higher volume in the Electronics segment.

The Company recognized net income of $69.5 million, or $2.77 per diluted share, in the third quarter of 2025 compared to $58.1 million, or $2.32 per diluted share, in the third quarter of 2024.

The increase in net income was primarily due to higher operating income from the electronics products business within the Electronics segment driven by increases in net sales, volume leverage and lower foreign exchange losses of $9.5 million.

Net cash provided by operating activities was $295.1 million for the nine months ended September 27, 2025 compared to $207.0 million for the nine months ended September 28, 2024.

The increase in net cash provided by operating activities of $88.1 million was primarily due to higher cash earnings and reductions in working capital.

On October 24, 2025, the Company entered into a Membership Interest Purchase Agreement with Basler Holdings, LLC, pursuant to which the Company has agreed to acquire all of the issued and outstanding membership interests of Basler Electric Company.

The purchase price is approximately $350 million in cash, subject to certain adjustments after closing.

The completion of the transaction is subject to certain customary closing conditions including regulatory approval.

The business will be reported in the Company's Industrial segment.

The Company financed the transaction with cash on hand.

On December 31, 2024, the Company completed the acquisition of a 200mm wafer fab located in Dortmund, Germany (“Dortmund Fab”) from Elmos Semiconductor SE.

The total purchase price for the Dortmund Fab is approximately €94 million, of which a €37.2 million down payment (approximately $40.5 million) was paid in the third quarter of 2023 after regulatory approvals, and €56.7 million (approximately $58.8 million) was paid at closing.

The total purchase price for the Dortmund Fab was approximately €94 million, of which a €37.2 million down payment (approximately $40.5 million) was paid in the third quarter of 2023 after regulatory approvals, and €56.7 million (approximately $58.8 million) was paid at closing.

The business is reported in the Electronics-Semiconductor business within the Company’s Electronics segment.

Risk Related to Market Conditions

The Company performs its goodwill impairment tests annually on the first day of its fiscal fourth quarter, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.

As part of its interim review for indicators of impairment, management analyzed potential changes in value of individual reporting units with goodwill based on each reporting unit’s operating results for the nine months ended September 27, 2025 compared to expected results.

In addition, management considered how other key assumptions, including discount rates and expected long-term growth rates, used in the last fiscal year’s impairment analysis could be impacted by changes in market conditions and economic events.

Management considered trends in these factors when performing its assessment of whether an interim impairment review was required for any reporting unit.

Based on this interim assessment, management concluded that as of September 27, 2025, no events or changes in circumstances indicated that it was more likely than not that the fair value of any reporting unit had declined below its carrying value.

Nevertheless, significant changes in global economic and market conditions could result in changes to expectations of future financial results and key valuation assumptions.

Such changes could result in revisions of management’s estimates of the fair value of the Company’s reporting units and could result in a material impairment of goodwill as of September 28, 2025, the Company’s next annual measurement date.

In particular, the Electronics-Semiconductor reporting unit within the Electronics segment is at risk for future impairment if projected operating results are not met or other inputs into the fair value measurement change.

The potential reduction in the estimated fair value of the reporting unit is due to lower expectations for future revenue, profitability and cash flows for the Electronics-Semiconductor reporting unit as compared to the expectations of the 2024 annual goodwill impairment test driven by lower-than-expected demand in the power semiconductor business.

Continued negative trends could have a significant impact on the estimate fair value of this reporting unit and could result in future impairment charges.

As of the September 29, 2024 annual goodwill impairment test, the Electronics-Semiconductor reporting unit’s estimated fair value exceeded book value by approximately 82%.

As of September 27, 2025, the Electronics-Semiconductor reporting unit had $539.2 million of goodwill.

The Company has been notified by one of its customers of a product recall potentially due to certain fuses provided by Littelfuse and incorporated in such products.

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The following table summarizes the Company’s unaudited condensed consolidated results of operations for the periods presented.

The second quarter of 2025 included $2.5 million ($11.4 million year-to-date) of restructuring charges primarily related to employee termination costs.

The third quarter of 2025 included $1.6 million ($13.1 million year-to-date) of restructuring charges primarily related to employee termination costs.

During the first quarter of 2025, the Company recognized a $0.1 million impairment charge related to certain machinery and equipment within the Electronics segment.

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

In addition, during the second quarter of 2025, the Company recognized $1.5 million ($1.6 million year-to-date) of legal and professional fees and other integration expenses related to completed and contemplated acquisitions.

During the first quarter of 2025, the Company recognized a $0.5 million purchase accounting inventory step-down adjustment related to the Dortmund Fab acquisition.

The second quarter of 2024 included $5.3 million ($7.6 million year-to-date) of restructuring charges primarily related to employee termination costs.

In addition, during the third quarter of 2025, the Company recognized $1.4 million ($3.0 million year-to-date) of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, and a $0.3 million loss related to the sale of the Marine business within the Transportation segment.

During the first quarter of 2025, the Company recognized $0.5 million of purchase accounting inventory step-down adjustments related to the Dortmund Fab acquisition.

The third quarter of 2024 included $1.8 million ($9.4 million year-to-date) of restructuring charges primarily related to employee termination costs, and $1.0 million ($2.8 million year-to-date) of legal and professional fees and other integration expenses related to completed and contemplated acquisitions.

During the first quarter of 2024, the Company recognized a $0.9 million impairment charge related to certain machinery and equipment in the commercial vehicle business within the Transportation segment.

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

In addition, during the second quarter of 2024, the Company recognized $0.8 million ($1.8 million year-to-date) of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, partially offset by a gain of $0.7 million ($1.0 million year-to-date) recorded for the sale of two buildings within the Transportation segment.

Second Quarter First Six Months

During the third quarter of 2024, the Company recorded a gain of $0.5 million related to the sale of a land use right within the Electronics segment.

In addition, the Company recognized a gain of $1.0 million for the sale of two buildings within the Transportation segment during the first half of 2024.

Third Quarter First Nine Months

(in thousands) 2025 2024 Change %

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Net income 69,522 58,058 11,464 19.7 % 170,435 151,976 18,459 12.1 %

Net sales increased $54.9 million, or 9.8%, for the second quarter of 2025 compared to the second quarter of 2024 including $13.4 million or 2.4% of incremental net sales from the Dortmund Fab acquisition in the semiconductor business within the Electronics segment and $7.0 million or 1.3% of favorable changes in foreign exchange rates.

The remaining increase in net sales was primarily due to higher volume of $22.6 million in the electronics products business within the Electronics segment, $14.5 million in the Industrial segment, and $7.1 million and $5.5 million in the passenger car products and the commercial vehicle businesses, respectively, within the Transportation segment due to higher end market demand and favorable price, partially offset by lower volume from the remaining semiconductor business within the Electronics segment.

Net sales increased $73.8 million, or 6.8%, for the six months of 2025 compared to the six months of 2024 including $23.5 million or 2.2% of incremental net sales from the Dortmund Fab acquisition in the semiconductor business within the Electronics segment and $0.4 million of favorable changes in foreign exchange rates.

Net sales increased $57.3 million, or 10.1%, for the third quarter of 2025 compared to the third quarter of 2024 including $12.9 million or 2.3% of incremental net sales from the Dortmund Fab acquisition in the semiconductor business within the Electronics segment and $7.4 million or 1.3% of favorable changes in foreign exchange rates.

The remaining increase in net sales was primarily due to higher volume of $31.2 million in the electronics products business within the Electronics segment.

Net sales increased $131.1 million, or 7.9%, for the first nine months of 2025 compared to the first nine months of 2024 including $36.4 million or 2.2% of incremental net sales from the Dortmund Fab acquisition in the semiconductor business within the Electronics segment and $7.8 million of favorable changes in foreign exchange rates.

The remaining increase in net sales was primarily due to higher volume of $69.5 million in the electronics products business within the Electronics segment and $29.8 million in the Industrial segment due to higher end market demand and favorable price, partially offset by lower volume from the remaining semiconductor business within the Electronics segment.

Cost of Sales

Cost of sales was $381.4 million, or 62.2% of net sales, in the second quarter of 2025 compared to $351.5 million, or 62.9% of net sales, in the second quarter of 2024.

As a percent of net sales, cost of sales decreased 0.7% primarily driven by improved margin from the commercial vehicle and passenger car products businesses within the Transportation segment and across all businesses within the Industrial segment driven by favorable price, volume leverage, and cost reduction initiatives.

In addition, higher volume from the electronics products business within the Electronics segment favorably impacted the decrease in cost of sales as percent of net sales that was partially offset by lower gross margin from the semiconductor business within the Electronics segment.

Cost of sales was $728.4 million, or 62.4% of net sales, in the first six months of 2025 compared to $699.1 million, or 63.9% of net sales, in the first six months of 2024.

Cost of sales was $383.7 million, or 61.4% of net sales, in the third quarter of 2025 compared to $351.5 million, or 61.9% of net sales, in the third quarter of 2024.

As a percent of net sales, cost of sales decreased 0.5% primarily due to improved margin from the electronics products business within the Electronics segment driven by volume leverage and favorable product mix, partially offset by lower gross margin from the semiconductor business within the Electronics segment.

Cost of sales was $1,112.1 million, or 62.0% of net sales, in the first nine months of 2025 compared to $1,050.6 million, or 63.2% of net sales, in the first nine months of 2024.

As a percent of net sales, cost of sales decreased 1.2% primarily driven by higher volume in the electronics products business within the Electronics segment and across all businesses in the Industrial segment.

Additionally, improved margin from the commercial vehicle and the passenger car products businesses within the Transportation segment driven by volume leverage, favorable price, and cost reduction initiatives favorably impacted the decrease in cost of net sales as percent of net sales that was partially offset by lower volume from the semiconductor business within the Electronics segment.

Gross profit was $232.1 million, or 37.8% of net sales, in the second quarter of 2025 compared to $207.0 million, or 37.1% of net sales, in the second quarter of 2024.

The $25.1 million increase in gross profit was primarily due to higher volume from the electronics products business within the Electronics segment and across all businesses within the Industrial segment and improved margin from the commercial vehicle and the passenger car products businesses within the Transportation segment, partially offset by lower volume from the semiconductor business within the Electronics segment.

Gross profit was $439.3 million, or 37.6% of net sales, in the first six months of 2025 compared to $394.8 million, or 36.1% of net sales, in the first six months of 2024.

The $44.5 million increase in gross profit was primarily from higher volume in the electronics products business within the Electronics segment, across all businesses within the Industrial segment, and the commercial vehicle and the passenger car products businesses within the Transportation driven by higher volume, favorable price, and product mix, partially offset by lower volume from the semiconductor business within the Electronics segment.

Additionally, improved margin from the passenger car products and the commercial vehicle businesses within the Transportation segment driven by volume leverage, favorable price, and cost reduction initiatives favorably impacted the decrease in cost of net sales as a percentage of net sales that was partially offset by lower margin from the semiconductor business within the Electronics segment.

Gross profit was $241.0 million, or 38.6% of net sales, in the third quarter of 2025 compared to $215.9 million, or 38.1% of net sales, in the third quarter of 2024.

The $25.1 million increase in gross profit was primarily due to higher volume and favorable product mix from the electronics products business within the Electronics segment.

Gross profit was $680.3 million, or 38.0% of net sales, in the first nine months of 2025 compared to $610.7 million, or 36.8% of net sales, in the first nine months of 2024.

The $69.6 million increase in gross profit was primarily from higher net sales in the electronics products business within the Electronics segment, across all businesses within the Industrial segment, and the passenger car products and the commercial vehicle businesses within the Transportation driven by higher volume, favorable price, and product mix.

Operating Expenses

Operating expenses were $139.3 million, or 22.7% of net sales, for the second quarter of 2025 compared to $141.5 million, or 25.3% of net sales, for the second quarter of 2024.

The decrease in operating expenses of $2.2 million was primarily due to lower restructuring, impairment, and other charges of $2.7 million related to cost control initiatives in the semiconductor business within the Electronics segment implemented in the prior year.

Operating expenses were $276.4 million, or 23.7% of net sales, for the first six months of 2025 compared to $274.4 million, or 25.1% of net sales, for the first six months of 2024.

The increase in operating expenses of $2.0 million was primarily due to higher selling, general, and administrative expenses of $3.7 million driven by the Dortmund Fab acquisition and restructuring, impairment, and other charges of $3.0 million related to company-wide cost control initiatives implemented in the first quarter of 2025, partially offset by lower amortization expense of $2.4 million and research and development expenses of $2.4 million.

Operating expenses were $143.6 million, or 23.0% of net sales, for the third quarter of 2025 compared to $128.1 million, or 22.6% of net sales, for the third quarter of 2024.

The increase in operating expenses of $15.5 million was primarily due to higher selling, general, and administrative expenses of $15.7 million driven by higher annual incentive and stock compensation expenses, and the Dortmund Fab acquisition.

Operating expenses were $420.0 million, or 23.4% of net sales, for the first nine months of 2025 compared to $402.4 million, or 24.2% of net sales, for the first nine months of 2024.

The increase in operating expenses of $17.5 million was primarily due to higher selling, general, and administrative expenses of $19.4 million driven by higher annual incentive compensation expenses and the Dortmund Fab acquisition and higher restructuring, impairment, and other charges of $2.8 million related to company-wide cost control initiatives implemented in the first quarter of 2025, partially offset by lower amortization expense of $3.2 million.

Operating Income

Operating income was $92.8 million, representing an increase of $27.3 million, or 41.6%, for the second quarter of 2025 compared to $65.5 million for the second quarter of 2024.

The increase in operating income was due to higher gross profit from the electronics products business within the Electronics segment and the Transportation and Industrial segments, and lower operating expenses mainly driven by lower restructuring, impairment, and other charges, partially offset by lower gross profit from the semiconductor business within the Electronics segment.

Operating margins increased from 11.7% in the second quarter of 2024 to 15.1% in the second quarter of 2025 driven by improved gross margin in the Transportation and Industrial segments.

Operating income was $162.9 million, representing an increase of $42.5 million, or 35.3%, for the first six months of 2025 compared to $120.5 million for the first six months of 2024.

The increase in operating income was due to higher gross profit across all segments, partially offset by higher operating expenses mainly driven by higher selling, general, and administrative expenses from the Dortmund Fab acquisition and restructuring, impairment, and other charges due to company-wide cost control initiatives implemented in the first quarter of 2025.

Operating margins increased from 11.0% in the first six months of 2024 to 14.0% in the first six months of 2025 driven by improved gross margin in the Industrial and Transportation segments.

Operating income was $97.4 million, representing an increase of $9.6 million, or 10.9%, for the third quarter of 2025 compared to $87.8 million for the third quarter of 2024.

The increase in operating income was due to higher gross profit from the electronics products business within the Electronics segment, partially offset by higher operating expenses mainly driven by higher annual incentive compensation expenses and the Dortmund Fab acquisition noted above.

Operating margins increased from 15.5% in the third quarter of 2024 to 15.6% in the third quarter of 2025 driven by improved gross margin from the electronics products business within the Electronics segment, which was mostly offset by lower gross margin from the semiconductor business within the Electronics segment and higher incentive compensation expenses.

Operating income was $260.3 million, representing an increase of $52.1 million, or 25.0%, for the first nine months of 2025 compared to $208.3 million for the first nine months of 2024.

The increase in operating income was due to higher gross profit across all segments, partially offset by higher operating expenses mainly driven by higher selling, general, and administrative expenses and restructuring, impairment, and other charges due to company-wide cost control initiatives implemented in the first quarter of 2025.

Operating margins increased from 12.5% in the first nine months of 2024 to 14.5% in the first nine months of 2025 driven by improved gross margin in the electronics products business within the Electronics segment and across the Industrial and Transportation segments.

Income Before Income Taxes

The effective tax rate for the three and six months ended June 28, 2025 was 26.7% and 27.0%, respectively, compared to the effective tax rate for the three and six months ended June 29, 2024 of 25.6% and 19.6%, respectively.

The effective tax rate for 2025 was higher than the effective tax rate for the comparable 2024 periods primarily due to increases in foreign exchange losses and losses in non-U.S.

jurisdictions with no related tax benefit, as compared to 2024.

The 2024 periods also recognized more favorable tax rate benefits due to lapses in the statute of limitations for previously unrecognized tax benefits, as compared to the 2025 periods.

The effective tax rates for three and six months ended June 28, 2025 were higher than the statutory tax rate primarily due to foreign exchange losses and losses in non-U.S.

jurisdictions with no related tax benefit.

The effective tax rate for the three months ended June 29, 2024 was higher than the statutory tax rate primarily due to the proportion of pre-tax income that is earned in higher tax jurisdictions.

The effective tax rate for the six months ended June 29, 2024 was lower than the statutory tax rate primarily due to the lapse in the statute of limitations for previously unrecognized tax benefits recognized in the first quarter.

The effective tax rate for 2025 is higher than the effective tax rate for the comparable 2024 periods primarily due to increases in foreign exchange losses and losses in non-U.S.

Income before income taxes was $94.7 million, or 15.2% of net sales, for the third quarter of 2025 compared to $77.7 million, or 13.7% of net sales, for the third quarter of 2024.

In addition to the factors impacting comparative results for operating income discussed above, income before income taxes was primarily benefited by lower foreign exchange losses of $9.5 million in the third quarter of 2025 compared to the third quarter of 2024, partially offset by unrealized losses of $0.1 million in the third quarter of 2025 compared to unrealized gains of $3.1 million in the third quarter of 2024 related to the Company's equity investment.

Income before income taxes was $232.9 million, or 13.0% of net sales, for the first nine months of 2025 compared to $194.6 million, or 11.7% of net sales, for the first nine months of 2024.

In addition to the factors impacting comparative results for operating income discussed above, income before income taxes was primarily impacted by higher foreign exchange losses of $11.2 million in the first nine months of 2025 compared to the first nine months of 2024, and unrealized losses of $2.1 million during the first nine months of 2025 compared to unrealized gains of $1.9 million during the first nine months of 2024 related to the Company's equity investment.

The effective tax rate for the three and nine months ended September 27, 2025 was 26.6% and 26.8%, respectively, compared to the effective tax rate for the three and nine months ended September 28, 2024 of 25.3% and 21.9%, respectively.

The effective tax rate for 2025 was higher than the effective tax rate for the comparable 2024 periods primarily due to increases in losses in non-U.S.

jurisdictions with no related tax benefit, as compared to 2024.

The 2024 periods also recognized more favorable tax rate benefits due to lapses in the statute of limitations for previously unrecognized tax benefits, as compared to the 2025 periods.

The effective tax rates for the three and six months ended June 28, 2025 are higher than the statutory tax rate primarily due to foreign exchange losses and losses in non-U.S.

The effective tax rate for three and nine months ended September 27, 2025 was higher than the statutory tax rate primarily due to foreign exchange losses and losses in non-U.S.

jurisdictions with no related tax benefit.

The effective tax rate for the three months ended June 29, 2024 is higher than the statutory tax rate primarily due to the proportion of pre-tax income that is earned in higher tax jurisdictions.

The effective tax rate for the six months ended June 29, 2024 is lower than the statutory tax rate primarily due to the lapse in the statute of limitations for previously unrecognized tax benefits recognized in the first quarter.

The effective tax rate for the three and nine months ended September 28, 2024 was higher than the statutory tax rate primarily due to the proportion of pre-tax

income that is earned in higher tax jurisdictions, partially offset by the lapse in the statute of limitations for previously unrecognized tax benefits recognized in the first quarter.

Segment Results of Operations

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The following table is a summary of the Company’s net sales and operating income by segment:

Net Sales Second Quarter First Six Months

Net Sales Third Quarter First Nine Months

(in thousands) 2025 2024 Change %

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Total $ 624,640 $ 567,390 $ 57,250 10.1 % $ 1,792,360 $ 1,661,263 $ 131,097 7.9 %

Segment Operating Income Second Quarter First Six Months

Segment Operating Income Third Quarter First Nine Months

(in thousands) 2025 2024 Change %

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Total operating income $ 97,416 $ 87,821 $ 9,595 10.9 % $ 260,344 $ 208,279 $ 52,065 25.0 %

(a) Included in “Other” Operating income for the second quarter of 2025 was $2.5 million ($11.4 million year-to-date) of restructuring charges primarily related to employee termination costs.

(a) Included in “Other” Operating income for the third quarter of 2025 was $1.6 million ($13.1 million year-to-date) of restructuring charges primarily related to employee termination costs.

During the first quarter of 2025, the Company recognized a $0.1 million impairment charge related to certain machinery and equipment within the Electronics segment.

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

During the first quarter of 2025, the Company recognized a $0.5 million purchase accounting inventory step-down adjustment related to the Dortmund Fab acquisition.

Included in “Other” Operating income for the second quarter of 2024 was $5.3 million ($7.6 million year-to-date) of restructuring charges primarily related to employee termination costs.

During the first quarter of 2025, the Company recognized $0.5 million of the purchase accounting inventory step-down adjustments related to the Dortmund Fab acquisition.

Included in "Other" Operating income for the third quarter of 2024 was $1.8 million ($9.4 million year-to-date) of restructuring charges primarily related to employee termination costs, and $1.0 million ($2.8 million year-to-date) of legal and professional fees and other integration expenses related to completed and contemplated acquisitions.

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

During the third quarter of 2024, the Company recorded a gain of $0.5 million related to the sale of a land use right within the Electronics segment.

In addition, the Company recognized a gain of $1.0 million for the sale of two buildings within the Transportation segment during first half of 2024.

Electronics Segment

Net sales increased $30.0 million, or 9.8%, in the second quarter of 2025 compared to the second quarter of 2024 and included favorable changes in foreign exchange rates of $3.7 million or 1.2% .

Net sales increased $53.3 million, or 17.5%, in the third quarter of 2025 compared to the third quarter of 2024 and included favorable changes in foreign exchange rates of $4.2 million or 1.4%.

The net sales increase was primarily due to higher volume of $31.2 million from the electronics products business driven by higher end market demand and $12.9 million of incremental net sales from the Dortmund Fab acquisition in the semiconductor business.

Net sales increased $99.4 million, or 11.0%, in the first nine months of 2025 compared to the first nine months of 2024 and included favorable changes in foreign exchange rates of $4.0 million or 0.4%.

The net sales increase was primarily due to higher volume of $69.5 million from the electronics products business driven by higher end market demand and $36.4 million of incremental net sales from the Dortmund Fab acquisition in the semiconductor business, partially offset by lower volume from the remaining semiconductor business.

Net sales increased $46.2 million, or 7.7%, in the first six months of 2025 compared to the first six months of 2024 and included unfavorable changes in foreign exchange rates of $0.1 million.

The sales increase was primarily due to higher volume of $38.4 million from the electronics products business driven by higher end market demand and $23.5 million of incremental net sales from the Dortmund Fab acquisition in the semiconductor business, partially offset by lower volume from the remaining semiconductor business.

Operating Income

Operating income was $49.9 million, representing an increase of $3.7 million, or 8.0%, for the second quarter of 2025 compared to $46.2 million for the second quarter of 2024.

The increase in operating income was primarily from the electronics products business due to volume leverage.

Operating margins decreased from 15.1% in the second quarter of 2024 to 14.9% in the second quarter of 2025 primarily due to lower gross margin for the semiconductor business, partially offset by volume leverage from the electronics products business.

Operating income was $96.6 million, representing an increase of $12.7 million, or 15.1%, for the first six months of 2025 compared to $84.0 million for the first six months of 2024.

Operating income was $63.6 million, representing an increase of $14.7 million, or 30.2%, for the third quarter of 2025 compared to $48.9 million for the third quarter of 2024.

The increase in operating income was primarily from the electronics products business due to volume leverage and favorable product mix.

Operating margins increased from 16.1% in the third quarter of 2024 to 17.8% in the third quarter of 2025 primarily due to volume leverage from the electronics products business, partially offset by lower gross margin from the semiconductor business.

Operating income was $160.3 million, representing an increase of $27.4 million, or 20.6%, for the first nine months of 2025 compared to $132.9 million for the first nine months of 2024.

The increase in operating income was primarily from the electronics products business due to volume leverage.

Operating margins increased from 14.1% in the first six months of 2024 to 15.0% in the first six months of 2025 primarily due to volume leverage from the electronics products business, partially offset by lower gross margin from the semiconductor business.

Operating margins increased from 14.7% in the first nine months of 2024 to 16.0% in the first nine months of 2025 primarily due to volume leverage from the electronics products business, partially offset by lower gross margin from the semiconductor business.

Transportation Segment

Net sales increased $10.4 million, or 6.2%, in the second quarter of 2025 compared to the second quarter of 2024 and included favorable changes in foreign exchange rates of $3.1 million or 1.8%.

The net sales increase was primarily due to higher net sales of $7.1 million and $5.5 million in the passenger car products and the commercial vehicle businesses, respectively, driven by increased end market demand and favorable price.

Net sales increased $1.9 million, or 0.6%, in the first six months of 2025 compared to the first six months of 2024 and included favorable changes in foreign exchange rates of $0.9 million.

The net sales increase was primarily due to higher net sales of $5.9 million and $3.8 million in the passenger car products and the commercial vehicle businesses respectively, driven by increased end market demand and favorable price, partially offset by lower automotive sensors business volume of $7.7 million driven by the strategic exit of certain lower margin products.

Net sales decreased $0.1 million in the third quarter of 2025 compared to the third quarter of 2024 and included favorable changes in foreign exchange rates of $2.8 million or 1.7%.

The net sales decrease was primarily due to lower net sales of $2.6 million and $1.8 million in the automotive sensor products and commercial vehicle products businesses respectively, offset by higher net sales of $4.3 million in the passenger car products driven by favorable price.

Net sales increased $1.9 million, or 0.4%, in the first nine months of 2025 compared to the first nine months of 2024 and included favorable changes in foreign exchange rates of $3.8 million or 0.7%.

The net sales increase was primarily due to higher net sales of $10.2 million in the passenger car products business driven by favorable price and increased end market demand and favorable changes in foreign exchange rates, partially offset by lower automotive sensors business volume of $10.3 million driven by the strategic exit of certain lower margin products.

Operating Income

Operating income was $28.1 million, representing an increase of $12.8 million, or 84.3%, for the second quarter of 2025 compared to $15.2 million for the second quarter of 2024.

The increase in operating income was primarily from the commercial vehicle and passenger car products businesses due to favorable price, volume leverage, and cost reduction initiatives.

Operating margins increased from 9.0% in the second quarter of 2024 to 15.6% in the second quarter of 2025 primarily driven by improved gross margin from the commercial vehicle and passenger car products businesses.

Operating income was $47.0 million, representing an increase of $15.6 million, or 49.5%, for the first six months of 2025 compared to $31.4 million for the first six months of 2024.

Operating income was $20.2 million, representing a decrease of $3.3 million, or 14.0%, for the third quarter of 2025 compared to $23.5 million for the third quarter of 2024.

The decrease in operating income was primarily due to higher operating expenses and lower gross margin from the commercial vehicle and automotive sensor products businesses, partially offset by higher gross margin from the passenger car products business driven by favorable price.

Operating margins decreased from 13.7% in the third quarter of 2024 to 11.8% in the third quarter of 2025.

Operating income was $67.2 million, representing an increase of $12.3 million, or 22.3%, for the first nine months of 2025 compared to $54.9 million for the first nine months of 2024.

The increase in operating income was primarily from the commercial vehicle and passenger car products businesses due to favorable price, volume leverage, and cost reduction initiatives.

Operating margins increased from 9.3% in the first six months of 2024 to 13.8% in the first six months of 2025 primarily driven by improved gross margin from the commercial vehicle and passenger car products businesses.

Operating margins increased from 10.8% in the first nine months of 2024 to 13.1% in the first nine months of 2025 primarily driven by improved gross margin from the passenger car and commercial vehicle products businesses, partially offset by lower gross margin in the automotive sensors business.

Industrial Segment

Net sales increased $14.5 million, or 17.2%, in the second quarter of 2025 compared to the second quarter of 2024 and included favorable changes in foreign exchange rates of $0.2 million.

The net sales increase was due to higher volume from industrial control and sensor and industrial circuit protection products driven by favorable price and higher end market demand.

Net sales increased $25.7 million, or 16.3%, in the first six months of 2025 compared to the first six months of 2024 and included unfavorable changes in foreign exchange rates of $0.4 million.

Net sales increased $4.1 million, or 4.4%, in the third quarter of 2025 compared to the third quarter of 2024 and included favorable changes in foreign exchange rates of $0.4 million.

The net sales increase was due to higher net sales from industrial circuit protection products driven by favorable price and higher volume.

Net sales increased $29.8 million, or 11.9%, in the first nine months of 2025 compared to the first nine months of 2024.

The net sales increase was due to higher volume from industrial control and sensor and industrial circuit protection products driven by higher end market demand and favorable price.

Operating Income

Operating income was $18.9 million, representing an increase of $9.3 million, or 97.6%, for the second quarter of 2025 compared to $9.5 million for the second quarter of 2024.

The increase in operating income was driven by higher net sales from industrial control and sensor and industrial circuit protection products driven by favorable price, increased end market demand and product mix.

Operating margins increased from 11.4% in the second quarter of 2024 to 19.2% in the second quarter of 2025 due to favorable price and higher volume.

Operating income was $31.9 million, representing an increase of $17.6 million, or 122.7%, for the first six months of 2025 compared to $14.3 million for the first six months of 2024.

The increase in operating income was driven by higher volume from industrial control and sensor and industrial circuit protection products driven by increased end market demand, favorable price and product mix.

Operating margins increased from 9.1% in the first six months of 2024 to 17.4% in the first six months of 2025 due to higher volume and favorable price.

Operating income was $16.9 million, representing a decrease of $0.8 million, or 4.5%, for the third quarter of 2025 compared to $17.7 million for the third quarter of 2024.

The decrease in operating income was due to higher operating expenses.

Operating margins decreased from 19.3% in the third quarter of 2024 to 17.6% in the third quarter of 2025 due to higher operating expenses and lower gross margin in the industrial circuit protection products driven by unfavorable mix and cost inflation.

Operating income was $48.9 million, representing an increase of $16.8 million, or 52.4%, for the first nine months of 2025 compared to $32.1 million for the first nine months of 2024.

Operating margins increased from 12.8% in the first nine months of 2024 to 17.5% in the first nine months of 2025 due to higher volume, favorable price and cost reductions.

Geographic Net Sales Information

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The following table is a summary of the Company’s net sales by geography:

Second Quarter First Six Months

Third Quarter First Nine Months

(in thousands) 2025 2024 Change %

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Total $ 624,640 $ 567,390 $ 57,250 10.1 % $ 1,792,360 $ 1,661,263 $ 131,097 7.9 %

Net sales increased $21.1 million, or 9.2%, in the second quarter of 2025 compared to the second quarter of 2024.

The increase in net sales was primarily due to higher volume from the Industrial segment, the electronics products business within the Electronics segment and the commercial vehicle businesses within the Transportation segment.

Net sales increased $31.0 million, or 7.0%, in the first six months of 2025 compared to the first six months of 2024 and included unfavorable changes in foreign exchange rates of $0.6 million.

The increase in net sales was due to higher volume from the Industrial segment, the electronics products business within the Electronics segment, partially offset by lower volume from the passenger car product business within the Transportation segment.

Net sales increased $9.7 million, or 4.5%, in the second quarter of 2025 compared to the second quarter of 2024 and included favorable changes in foreign exchange rates of $0.8 million.

The increase in net sales was primarily due to higher net sales from

the electronics products business within the Electronics segment and the passenger car products business within the Transportation segment, partially offset by lower volume from the semiconductor business within the Electronics segment.

Net sales increased $21.3 million, or 5.2%, in the first six months of 2025 compared to the first six months of 2024 and included unfavorable changes in foreign exchange rates of $1.8 million.

The increase in net sales was primarily due to higher net sales from the electronics products business within the Electronics segment and the passenger car products and the commercial vehicle businesses within the Transportation segment, partially offset by lower volume from the semiconductor business within the Electronics segment and the automotive sensor business within the Transportation segment.

Net sales increased $24.1 million, or 20.8%, in the second quarter of 2025 compared to the second quarter of 2024 and included favorable changes in foreign exchange rates of $6.2 million.

The increase in net sales was primarily due to $13.4 million or 2.4% of incremental net sales from the Dortmund Fab acquisition in the semiconductor business within the Electronics segment and higher net sales from the electronics products business within the Electronics segment.

Net sales increased $21.5 million, or 8.9%, in the first six months of 2025 compared to the first six months of 2024 and included favorable changes in foreign exchange rates of $2.8 million.

Net sales increased $11.9 million, or 5.0%, in the third quarter of 2025 compared to the third quarter of 2024 and included favorable changes in foreign exchange rates of $0.2 million.

The increase in net sales was primarily due to higher volume from the electronics products business within the Electronics segment, partially offset by lower volume from the commercial vehicle businesses within the Transportation segment and industrial circuit protection products within the Industrial segment.

Net sales increased $42.9 million, or 6.3%, in the first nine months of 2025 compared to the first nine months of 2024 and included unfavorable changes in foreign exchange rates of $0.4 million.

The increase in net sales was due to higher volume from the electronics products business within the Electronics segment and the Industrial segment, partially offset by lower volume from the automotive sensor products and passenger car product businesses within the Transportation segment.

Net sales increased $24.1 million, or 11.2%, in the third quarter of 2025 compared to the third quarter of 2024 and included favorable changes in foreign exchange rates of $0.2 million.

The increase in net sales was primarily due to higher volume from the Electronics segment and industrial circuit protection products within the Industrial segment.

Net sales increased $45.4 million, or 7.3%, in the first nine months of 2025 compared to the first nine months of 2024 and included unfavorable changes in foreign exchange rates of $1.6 million.

The increase in net sales was primarily due to higher volume from the electronics products business within the Electronics segment, industrial circuit protection products within the Industrial segment and the passenger car products and the commercial vehicle businesses within the Transportation segment, partially offset by lower volume from the automotive sensor business within the Transportation segment.

Net sales increased $21.3 million, or 18.4%, in the third quarter of 2025 compared to the third quarter of 2024 and included favorable changes in foreign exchange rates of $7.0 million.

The increase in net sales was primarily due to $12.9 million or 11.1% of incremental net sales from the Dortmund Fab acquisition in the semiconductor business within the Electronics segment.

Net sales increased $42.8 million, or 11.9%, in the first nine months of 2025 compared to the first nine months of 2024 and included favorable changes in foreign exchange rates of $9.8 million.

The increase in net sales was primarily due to $36.4 million or 10.2% of incremental net sales from the Dortmund Fab acquisition in the semiconductor business within the Electronics segment.

Liquidity and Capital Resources

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Management expects that the Company’s (i) current level of cash, cash equivalents, and marketable securities, (ii) current and forecasted cash flows from operations, (iii) availability under existing funding arrangements, and (iv) access to capital in the capital markets will provide sufficient funds to support the Company’s operations, capital expenditures, investments, and debt obligations on both a short-term and long-term basis.

Cash and cash equivalents were $685.2 million as of June 28, 2025, a decrease of $39.7 million, as compared to December 28, 2024.

As of June 28, 2025, $265.1 million of the Company's $685.2 million cash and cash equivalents was held by U.S.

Cash and cash equivalents were $814.7 million as of September 27, 2025, an increase of $89.8 million, as compared to December 28, 2024.

As of September 27, 2025, $345.0 million of the Company's $814.7 million cash and cash equivalents was held by U.S.

subsidiaries.

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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 and six months

ended June 28, 2025, the Company made term loan payments of $3.8 million and $7.5 million, respectively.

The revolving loan and term loan balances under the Credit Facility were $100.0 million and $273.8 million, respectively, as of June 28, 2025.

During the three and nine months ended September 27, 2025, the Company made term loan payments of $3.8 million and $11.3 million, respectively.

The revolving loan and term loan balances under the Credit Facility were $100.0 million and $270.0 million, respectively, as of September 27, 2025.

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 June 28, 2025, the effective interest rate on the unhedged portion of the outstanding borrowings under the credit facility was 5.68%, and 4.13% on the hedged portion.

As of June 28, 2025, the Company had $0.1 million outstanding letters of credit and had $599.9 million of borrowing capacity available under the revolving credit facility.

As of June 28, 2025, the Company was in compliance with all covenants under the Credit Agreement.

As of September 27, 2025, the effective interest rate on the unhedged portion of the outstanding borrowings under the credit facility was 5.26%, and 4.13% on the hedged portion.

As of September 27, 2025, the Company had $0.1 million outstanding letters of credit and had $599.9 million of borrowing capacity available under the revolving credit facility.

As of September 27, 2025, 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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Debt Covenants

The Company was in compliance with all covenants under the Credit Agreement and Senior Notes as of June 28, 2025 and currently expects to remain in compliance based on management’s estimates of operating and financial results for 2024.

As of June 28, 2025, the Company met all the conditions required to borrow under the Credit Agreement and management expects the Company to continue to meet the applicable borrowing conditions.

The Company was in compliance with all covenants under the Credit Agreement and Senior Notes as of September 27, 2025 and currently expects to remain in compliance based on management’s estimates of operating and financial results for 2025.

As of September 27, 2025, the Company met all the conditions required to borrow under the Credit Agreement and management expects the Company to continue to meet the applicable borrowing conditions.

On December 31, 2024, the Company completed the acquisition of Dortmund Fab from Elmos Semiconductor SE.

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The business is reported in the Electronics-Semiconductor business within the Company’s Electronics segment.

During the second quarter of 2025, the Company paid quarterly dividends of $17.3 million to its shareholders.

On July 30, 2025, the Company announced the declaration of a quarterly cash dividend of $0.75 per share, a 7% increase from the first quarter, payable on September 4, 2025 to stockholders of record as of August 21, 2025.

During the third quarter of 2025, the Company paid quarterly dividends of $18.6 million to its shareholders.

On October 29, 2025, the Company announced the declaration of a quarterly cash dividend of $0.75 per share payable on December 4, 2025 to stockholders of record as of November 20, 2025.

Cash Flow Overview

First Six Months

First Nine Months

(in thousands) 2025 2024

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Effect of exchange rate changes on cash, cash equivalents, and restricted cash 20,868 (396)

(Decrease) increase in cash, cash equivalents, and restricted cash (39,554) 6,173

Increase in cash, cash equivalents, and restricted cash 89,992 74,170

Cash, cash equivalents, and restricted cash at beginning of period 726,437 557,123

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Operating cash outflows are largely attributable to recurring expenditures for raw materials, labor, rent, interest, taxes, and other operating activities.

Net cash provided by operating activities was $148.2 million for the six months ended June 28, 2025 compared to $126.6 million for the six months ended June 29, 2024.

The increase in net cash provided by operating activities was primarily due to higher cash earnings.

Net cash provided by operating activities was $295.1 million for the nine months ended September 27, 2025 compared to $207.0 million for the nine months ended September 28, 2024.

The increase in net cash provided by operating activities of $88.1 million was primarily due to higher cash earnings and reductions in working capital.

Cash Flow from Investing Activities

Net cash used in investing activities was $89.7 million for the six months ended June 28, 2025 compared to $26.7 million during the six months ended June 29, 2024.

Net cash paid for the Dortmund Fab acquisition was $57.4 million during the six months ended June 28, 2025.

Capital expenditures were $33.0 million, representing a decrease of $1.7 million, compared to the six months ended June 29, 2024.

During the six months ended June 29, 2024, the Company received proceeds of $8.7 million from the sale of two buildings within the Transportation segment.

Net cash used in investing activities was $99.7 million for the nine months ended September 27, 2025 compared to $41.1 million during the nine months ended September 28, 2024.

Net cash paid for the Dortmund Fab acquisition was $57.4 million during the nine months ended September 27, 2025.

Capital expenditures were $48.7 million, representing a decrease of $1.4 million, compared to the nine months ended September 28, 2024.

During the nine months ended September 27, 2025, the Company received proceeds of $5.6 million from the sale of the Marine business within the Transportation segment.

During the nine months ended September 28, 2024, the Company received proceeds of $9.7 million from the sale of a land use right within the Electronics segment and two buildings within the Transportation segment.

Cash Flow from Financing Activities

Net cash used in financing activities was $120.5 million for the six months ended June 28, 2025 compared to $79.3 million for the six months ended June 29, 2024.

During the six months ended June 28, 2025, the Company paid off $50 million of U.S.

Net cash used in financing activities was $126.3 million for the nine months ended September 27, 2025 compared to $91.3 million for the nine months ended September 28, 2024.

During the nine months ended September 27, 2025, the Company paid off $50 million of U.S.

Senior Notes, Series A, due February 15, 2025 and made payments of $11.3 million on the term loan.

During the six months ended June 29, 2024, the Company made payments of $3.8 million on the term loan.

The Company paid dividends of $34.7 million and $32.3 million in the six months ended June 28, 2025 and June 29, 2024, respectively.

In addition, during the six months ended June 28, 2025 and June 29, 2024, the Company repurchased 120,689 shares of its common stock totaling $27.4 million and 179,311 shares of its common stock totaling $40.9 million, respectively.

The Company paid a $0.2 million excise tax related to the share repurchases during the three and six months ended June 28, 2025.

During the nine months ended September 28, 2024, the Company made payments of $3.8 million on the term loan.

The Company paid dividends of $53.3 million and $49.7 million in the nine months ended September 27, 2025 and September 28, 2024, respectively.

In addition, during the nine months ended September 27, 2025 and September 28, 2024, the Company repurchased 120,689 shares of its common stock totaling $27.4 million and 179,311 shares of its common stock totaling $40.9 million, respectively.

The Company paid a $0.2 million excise tax related to the share repurchases during the nine months ended September 27, 2025.

In addition, the Company received $17.9 million cash from stock option exercise activities during the nine months ended September 27, 2025 compared to $5.0 million for the nine months ended September 28, 2024.

Share Repurchase Program

On April 25, 2024, the Company's Board of Directors authorized a three-year program to repurchase up to $300.0 million in the aggregate of shares of the Company's stock for the period from May 1, 2024 to April 30, 2027 ("2024 program") to replace its previous 2021 program.

The Company did not repurchase shares of its common stock for the three months ended June 28, 2025.

During the six months ended June 28, 2025, the Company repurchased 120,689 shares of its common stock totaling $27.4 million pursuant to the 2024 program.

During the three and six months ended June 29, 2024, the Company repurchased 109,031 and 179,311 shares of its common stock totaling $24.7 million and $40.9 million, respectively, of which $38.9 million was pursuant to the 2021 program and $2.0 million was pursuant to the 2024 program.

The Company did not repurchase shares of its common stock for the three months ended September 27, 2025.

During the nine months ended September 27, 2025, the Company repurchased 120,689 shares of its common stock totaling $27.4 million pursuant to the 2024 program.

During the nine months ended September 28, 2024, the Company repurchased 179,311 shares of its common stock totaling $40.9 million, of which $38.9 million was pursuant to the 2021 program and $2.0 million was pursuant to the 2024 program.

Off-Balance Sheet Arrangements

As of June 28, 2025, the Company did not have any off-balance sheet arrangements, as defined under SEC rules.

As of September 27, 2025, the Company did not have any off-balance sheet arrangements, as defined under SEC rules.

Specifically, the Company was not liable for guarantees of indebtedness owed by third parties, the Company was not directly liable for the debt of any unconsolidated entity and the Company did not have any retained or contingent interest in assets.

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The significant accounting policies and critical accounting estimates are consistent with those discussed in Note 1, Summary of Significant Accounting Policies and Other Information , to the consolidated financial statements and the MD&A section of the Company’s Annual Report on Form 10-K for the year ended December 28, 2024.

During the six months ended June 28, 2025, there were no significant changes in the application of critical accounting policies and estimates.

During the nine months ended September 27, 2025, there were no significant changes in the application of critical accounting policies and estimates.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See Item 7A, Quantitative and Qualitative Disclosures about Market Risk , of the Company's Annual Report on Form 10-K for the year ended December 28, 2024.

During the six months ended June 28, 2025, there were no material changes in the Company's exposure to market risk.

During the nine months ended September 27, 2025, there were no material changes in the Company's exposure to market risk.

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 2. Management’s Discussion and Analysis