United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 27, 2021~~April 02, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ___

Commission file number 0-20388

LITTELFUSE, INC.

(Exact name of registrant as specified in its charter)


Delaware		36-3795742
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
8755 West Higgins Road
Suite 500
Chicago	Illinois	60631
(Address of principal executive offices)		(ZIP Code)

Registrant’s telephone number, including area code: 773-628-1000

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of exchange on which registered

Common Stock, $0.01 par value

LFUS

NASDAQ

Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒[X] No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one): Large accelerated filer [X] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes [ ] No [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No [X]

As of April ~~23, 2021,~~29, 2022, the registrant had outstanding ~~24,555,229~~24,738,721 shares of Common Stock, net of Treasury Shares.

Table of Contents

TABLE OF CONTENTS


		Page

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of ~~March 27, 2021~~April 02, 2022 (unaudited) and ~~December 26, 2020~~January 01, 2022	3
	Condensed Consolidated Statements of Net Income for the three months ended ~~March 27, 2021~~April 02, 2022 (unaudited) and March ~~28, 2020~~27, 2021 (unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income for the three months ended ~~March 27, 2021~~April 02, 2022 (unaudited) and March ~~28, 2020~~27, 2021 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the three months ended ~~March 27, 2021~~April 02, 2022 (unaudited) and March ~~28, 2020~~27, 2021 (unaudited)	6
	Condensed Consolidated Statements of Stockholders' Equity for the three months ended ~~March 27, 2021~~April 02, 2022 (unaudited) and March ~~28, 2020~~27, 2021 (unaudited)	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2527
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3234
Item 4.	Controls and Procedures	3234
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	3335
Item 1A.	Risk Factors	3335
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3335
Item 3.	Defaults Upon Senior Securities	3335
Item 4.	Mine Safety Disclosures	3335
Item 5.	Other Information	3435
Item 6.	Exhibits	3436
Signatures		3537

Table of Contents

LITTELFUSE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


		(Unaudited)					(Unaudited)
(in thousands)	(in thousands)	March 27, 2021		December 26, 2020		(in thousands)	April 2, 2022		January 1, 2022
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	572,771	$	687,525	Cash and cash equivalents	$	461,617	$	478,473
Short-term investments	Short-term investments	53		54		Short-term investments	27		28
Trade receivables, less allowances of $42,624 and $45,237 at March 27, 2021 and December 26, 2020, respectively		276,687		232,760
Trade receivables, less allowances of $62,170 and $59,232 at April 2, 2022 and January 1, 2022, respectively						Trade receivables, less allowances of $62,170 and $59,232 at April 2, 2022 and January 1, 2022, respectively	319,457		275,192
Inventories	Inventories	295,057		258,002		Inventories	470,552		445,671
Prepaid income taxes and income taxes receivable	Prepaid income taxes and income taxes receivable	4,146		3,029		Prepaid income taxes and income taxes receivable	1,570		2,035
Prepaid expenses and other current assets	Prepaid expenses and other current assets	43,698		35,939		Prepaid expenses and other current assets	64,987		68,812
Total current assets	Total current assets	1,192,412		1,217,309		Total current assets	1,318,210		1,270,211

Net property, plant, and equipment	Net property, plant, and equipment	344,914		344,178		Net property, plant, and equipment	442,022		437,889
Intangible assets, net of amortization	Intangible assets, net of amortization	317,294		291,887		Intangible assets, net of amortization	391,855		407,126
Goodwill	Goodwill	845,586		816,812		Goodwill	926,732		929,790
Investments	Investments	37,285		30,547		Investments	34,372		39,211
Deferred income taxes	Deferred income taxes	9,854		11,224		Deferred income taxes	17,119		13,127
Right of use lease assets, net	Right of use lease assets, net	19,560		17,615		Right of use lease assets, net	37,579		29,616
Other assets		19,965		18,021
Other long-term assets						Other long-term assets	25,279		24,734
Total assets	Total assets	$	2,786,870	$	2,747,593	Total assets	$	3,193,168	$	3,151,704
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	179,723	$	145,984	Accounts payable	$	212,644	$	222,039

Accrued liabilities	Accrued liabilities	98,354		110,478		Accrued liabilities	127,011		159,689
Accrued income taxes	Accrued income taxes	23,468		19,186		Accrued income taxes	25,689		27,905
Current portion of long-term debt	Current portion of long-term debt	25,000		0		Current portion of long-term debt	—		25,000
Total current liabilities	Total current liabilities	326,545		275,648		Total current liabilities	365,344		434,633
Long-term debt, less current portion	Long-term debt, less current portion	623,865		687,034		Long-term debt, less current portion	606,741		611,897
Deferred income taxes	Deferred income taxes	51,229		50,134		Deferred income taxes	80,686		81,289
Accrued post-retirement benefits	Accrued post-retirement benefits	42,894		45,802		Accrued post-retirement benefits	36,884		37,037
Non-current operating lease liabilities	Non-current operating lease liabilities	14,190		12,950		Non-current operating lease liabilities	29,511		22,305
Other long-term liabilities	Other long-term liabilities	67,410		67,252		Other long-term liabilities	73,350		71,023
Shareholders’ equity:	Shareholders’ equity:					Shareholders’ equity:
Common stock, par value $0.01 per share: 34,000,000 shares authorized; shares issued, March 27, 2021–26,196,472; December 26, 2020–26,131,544		259		259
Common stock, par value $0.01 per share: 34,000,000 shares authorized; shares issued, April 2, 2022–26,358,545; January 1, 2022–26,350,763						Common stock, par value $0.01 per share: 34,000,000 shares authorized; shares issued, April 2, 2022–26,358,545; January 1, 2022–26,350,763	260		260
Additional paid-in capital	Additional paid-in capital	918,762		907,858		Additional paid-in capital	951,495		946,588
Treasury stock, at cost: 1,644,283 and 1,644,283 shares, respectively		(242,366)		(242,366)
Treasury stock, at cost: 1,664,727 and 1,664,711 shares, respectively						Treasury stock, at cost: 1,664,727 and 1,664,711 shares, respectively	(248,124)		(248,120)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(96,028)		(91,157)		Accumulated other comprehensive loss	(75,666)		(73,463)
Retained earnings	Retained earnings	1,079,979		1,034,048		Retained earnings	1,372,556		1,268,124
Littelfuse, Inc. shareholders’ equity	Littelfuse, Inc. shareholders’ equity	1,660,606		1,608,642		Littelfuse, Inc. shareholders’ equity	2,000,521		1,893,389
Non-controlling interest	Non-controlling interest	131		131		Non-controlling interest	131		131
Total equity	Total equity	1,660,737		1,608,773		Total equity	2,000,652		1,893,520
Total liabilities and equity	Total liabilities and equity	$	2,786,870	$	2,747,593	Total liabilities and equity	$	3,193,168	$	3,151,704

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

LITTELFUSE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME

(Unaudited)


		Three Months Ended				Three Months Ended
(in thousands, except per share data)	(in thousands, except per share data)	March 27, 2021		March 28, 2020			(in thousands, except per share data)	April 2, 2022		March 27, 2021
Net sales	Net sales	$	463,794	$	346,096		Net sales	$	623,330	$	463,794
Cost of sales	Cost of sales	303,328		221,740			Cost of sales	364,734		303,328
Gross profit	Gross profit	160,466		124,356			Gross profit	258,596		160,466

Selling, general, and administrative expenses	Selling, general, and administrative expenses	58,288		51,200			Selling, general, and administrative expenses	75,508		58,288

Research and development expenses	Research and development expenses	14,739		14,463			Research and development expenses	19,556		14,739
Amortization of intangibles	Amortization of intangibles	10,521		9,981			Amortization of intangibles	12,724		10,521
Restructuring, impairment, and other charges	Restructuring, impairment, and other charges	437		3,962			Restructuring, impairment, and other charges	218		437
Total operating expenses	Total operating expenses	83,985		79,606			Total operating expenses	108,006		83,985
Operating income	Operating income	76,481		44,750			Operating income	150,590		76,481

Interest expense	Interest expense	4,673		5,418			Interest expense	4,302		4,673
Foreign exchange loss	Foreign exchange loss	6,837		2,584			Foreign exchange loss	7,736		6,837
Other (income) expense, net		(7,737)		1,249
Other expense (income), net							Other expense (income), net	4,427		(7,737)
Income before income taxes	Income before income taxes	72,708		35,499			Income before income taxes	134,125		72,708
Income taxes	Income taxes	14,995		10,855			Income taxes	16,607		14,995
Net income	Net income	$	57,713	$	24,644		Net income	$	117,518	$	57,713

Earnings per share:	Earnings per share:						Earnings per share:
Basic	Basic	$	2.35	$	1.01		Basic	$	4.76	$	2.35
Diluted	Diluted	$	2.32	$	1.00		Diluted	$	4.70	$	2.32

Weighted-average shares and equivalent shares outstanding:	Weighted-average shares and equivalent shares outstanding:						Weighted-average shares and equivalent shares outstanding:
Basic	Basic	24,532		24,393			Basic	24,689		24,532
Diluted	Diluted	24,892		24,578			Diluted	24,981		24,892

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

LITTELFUSE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


		Three Months Ended				Three Months Ended
(in thousands)	(in thousands)	March 27, 2021		March 28, 2020			(in thousands)	April 2, 2022		March 27, 2021
Net income	Net income	$	57,713	$	24,644		Net income	$	117,518	$	57,713
Other comprehensive income (loss):	Other comprehensive income (loss):						Other comprehensive income (loss):
Pension and postemployment adjustment, net of tax	Pension and postemployment adjustment, net of tax	454		561			Pension and postemployment adjustment, net of tax	310		454

Foreign currency translation adjustments	Foreign currency translation adjustments	(5,325)		(15,540)			Foreign currency translation adjustments	(2,513)		(5,325)
Comprehensive income	Comprehensive income	$	52,842	$	9,665		Comprehensive income	$	115,315	$	52,842

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

LITTELFUSE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

~~(Unaudited)~~


		Three Months Ended					Three Months Ended
(in thousands)	(in thousands)	March 27, 2021		March 28, 2020		(in thousands)	April 2, 2022		March 27, 2021
OPERATING ACTIVITIES	OPERATING ACTIVITIES					OPERATING ACTIVITIES
Net income	Net income	$	57,713	$	24,644	Net income	$	117,518	$	57,713
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	Depreciation	13,677		13,821		Depreciation	15,574		13,677
Amortization of intangibles	Amortization of intangibles	10,521		9,981		Amortization of intangibles	12,724		10,521

Deferred revenue	Deferred revenue	(157)		(145)		Deferred revenue	(158)		(157)
Non-cash inventory charges	Non-cash inventory charges	3,489		0		Non-cash inventory charges	4,769		3,489
Impairment charges		0		2,237

Stock-based compensation	Stock-based compensation	3,395		2,965		Stock-based compensation	3,886		3,395
(Gain) loss on investments and other assets		(7,675)		2,604
Loss (gain) on investments and other assets						Loss (gain) on investments and other assets	4,729		(7,675)
Deferred income taxes	Deferred income taxes	378		616		Deferred income taxes	(2,112)		378
Other	Other	8,537		3,547		Other	8,554		8,537
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Trade receivables	Trade receivables	(32,973)		(9,457)		Trade receivables	(45,945)		(32,973)
Inventories	Inventories	(6,152)		6,667		Inventories	(30,879)		(6,152)
Accounts payable	Accounts payable	17,070		(3,964)		Accounts payable	(6,611)		17,070

Accrued liabilities and income taxes	Accrued liabilities and income taxes	(15,427)		(7,012)		Accrued liabilities and income taxes	(36,287)		(15,427)
Prepaid expenses and other assets	Prepaid expenses and other assets	(2,230)		(1,225)		Prepaid expenses and other assets	5,969		(2,230)
Net cash provided by operating activities	Net cash provided by operating activities	50,166		45,279		Net cash provided by operating activities	51,731		50,166

INVESTING ACTIVITIES	INVESTING ACTIVITIES					INVESTING ACTIVITIES
Acquisitions of businesses, net of cash acquired	Acquisitions of businesses, net of cash acquired	(109,852)		0		Acquisitions of businesses, net of cash acquired	—		(109,852)

Purchases of property, plant, and equipment	Purchases of property, plant, and equipment	(14,721)		(16,586)		Purchases of property, plant, and equipment	(29,809)		(14,721)
Net proceeds from sale of property, plant and equipment		2,553		50
Net proceeds from sale of property, plant and equipment, and other						Net proceeds from sale of property, plant and equipment, and other	21		2,553
Net cash used in investing activities	Net cash used in investing activities	(122,020)		(16,536)		Net cash used in investing activities	(29,788)		(122,020)

FINANCING ACTIVITIES	FINANCING ACTIVITIES					FINANCING ACTIVITIES
Proceeds of revolving credit facility		0		100,000

Payments of revolving credit facility	Payments of revolving credit facility	(30,000)		0		Payments of revolving credit facility	—		(30,000)

Payments of senior notes payable						Payments of senior notes payable	(25,000)		—

Payments of term loan		0		(2,500)
Net proceeds related to stock-based award activities	Net proceeds related to stock-based award activities	7,509		2,956		Net proceeds related to stock-based award activities	1,016		7,509
Purchases of common stock		0		(22,927)

Cash dividends paid	Cash dividends paid	(11,782)		(11,725)		Cash dividends paid	(13,086)		(11,782)
Net cash (used in) provided by financing activities		(34,273)		65,804
Net cash used in financing activities						Net cash used in financing activities	(37,070)		(34,273)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(4,101)		(5,111)		Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(2,738)		(4,101)
(Decrease) increase in cash, cash equivalents, and restricted cash		(110,228)		89,436
Decrease in cash, cash equivalents, and restricted cash						Decrease in cash, cash equivalents, and restricted cash	(17,865)		(110,228)
Cash, cash equivalents, and restricted cash at beginning of period	Cash, cash equivalents, and restricted cash at beginning of period	687,525		531,139		Cash, cash equivalents, and restricted cash at beginning of period	482,836		687,525
Cash, cash equivalents, and restricted cash at end of period	Cash, cash equivalents, and restricted cash at end of period	$	577,297	$	620,575	Cash, cash equivalents, and restricted cash at end of period	$	464,971	$	577,297
Supplementary Cash Flow Information	Supplementary Cash Flow Information					Supplementary Cash Flow Information
Reconciliation of cash and cash equivalents:	Reconciliation of cash and cash equivalents:					Reconciliation of cash and cash equivalents:
Cash and cash equivalents	Cash and cash equivalents	$	572,771	$	620,575	Cash and cash equivalents	$	461,617	$	572,771
Restricted cash included in prepaid expenses and other current assets	Restricted cash included in prepaid expenses and other current assets	$	3,462	0		Restricted cash included in prepaid expenses and other current assets	$	1,745	3,462
Restricted cash included in other assets		$	1,064	$	0
Cash paid during the period for interest		$	6,235	$	7,354
Restricted cash included in other long-term assets						Restricted cash included in other long-term assets	$	1,609	$	1,064
Cash paid interest during the period						Cash paid interest during the period	$	6,018	$	6,235

Capital expenditures, not yet paid	Capital expenditures, not yet paid	$	4,141	$	5,832	Capital expenditures, not yet paid	$	9,553	$	4,141

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

LITTELFUSE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)


		Littelfuse, Inc. Shareholders’ Equity															Littelfuse, Inc. Shareholders’ Equity
(in thousands, except share and per share data)	(in thousands, except share and per share data)	Common Stock		Addl. Paid in Capital		Treasury Stock		Accum. Other Comp. (Loss)		Retained Earnings		Non-controlling Interest		Total		(in thousands, except share and per share data)	Common Stock		Addl. Paid in Capital		Treasury Stock		Accum. Other Comp. (Loss)		Retained Earnings		Non-controlling Interest		Total
Balance at December 26, 2020		$	259	$	907,858	$	(242,366)	$	(91,157)	$	1,034,048	$	131	$	1,608,773
Net income		—		—		—		—		57,713		—		57,713

Other comprehensive loss, net of tax		—		—		—		(4,871)		—		—		(4,871)
Stock-based compensation		—		3,395		—		—		—		—		3,395

Stock options exercised		0		7,509		—		—		—		—		7,509

Cash dividends paid ($0.48 per share)		—		—		—		—		(11,782)		—		(11,782)
Balance at March 27, 2021		$	259	$	918,762	$	(242,366)	$	(96,028)	$	1,079,979	$	131	$	1,660,737
Balance at January 1, 2022																Balance at January 1, 2022	$	260	$	946,588	$	(248,120)	$	(73,463)	$	1,268,124	$	131	$	1,893,520

Net income																Net income	—		—		—		—		117,518		—		117,518

Other comprehensive loss, net of tax																Other comprehensive loss, net of tax	—		—		—		(2,203)		—		—		(2,203)
Stock-based compensation																Stock-based compensation	—		3,886		—		—		—		—		3,886

Withheld shares on restricted share units for withholding taxes																Withheld shares on restricted share units for withholding taxes	—		—		(4)		—		—		—		(4)
Stock options exercised																Stock options exercised	—		1,021		—		—		—		—		1,021

Cash dividends paid ($0.53 per share)																Cash dividends paid ($0.53 per share)	—		—		—		—		(13,086)		—		(13,086)
Balance at April 2, 2022																Balance at April 2, 2022	$	260	$	951,495	$	(248,124)	$	(75,666)	$	1,372,556	$	131	$	2,000,652

See accompanying Notes to Condensed Consolidated Financial Statements.


		Littelfuse, Inc. Shareholders’ Equity															Littelfuse, Inc. Shareholders’ Equity
(in thousands, except share and per share data)	(in thousands, except share and per share data)	Common Stock		Addl. Paid in Capital		Treasury Stock		Accum. Other Comp. (Loss)		Retained Earnings		Non-controlling Interest		Total		(in thousands, except share and per share data)	Common Stock		Addl. Paid in Capital		Treasury Stock		Accum. Other Comp. (Loss)		Retained Earnings		Non-controlling Interest		Total
Balance at December 28, 2019		$	256	$	867,996	$	(216,447)	$	(106,823)	$	950,901	$	131	$	1,496,014
Balance at December 26, 2020																Balance at December 26, 2020	$	259	$	907,858	$	(242,366)	$	(91,157)	$	1,034,048	$	131	$	1,608,773
Net income	Net income	—		—		—		—		24,644		—		24,644		Net income	—		—		—		—		57,713		—		57,713

Other comprehensive loss, net of tax	Other comprehensive loss, net of tax	—		—		—		(14,979)		—		—		(14,979)		Other comprehensive loss, net of tax	—		—		—		(4,871)		—		—		(4,871)
Stock-based compensation	Stock-based compensation	—		2,965		—		—		—		—		2,965		Stock-based compensation	—		3,395		—		—		—		—		3,395

Withheld shares on restricted share units for withholding taxes		—		—		(443)		—		—		—		(443)

Stock options exercised	Stock options exercised	—		3,399		—		—		—		—		3,399		Stock options exercised	—		7,509		—		—		—		—		7,509
Repurchases of common stock		—		—		(22,927)		—		—		—		(22,927)

Cash dividends paid ($0.48 per share)	Cash dividends paid ($0.48 per share)	—		—		—		—		(11,725)		—		(11,725)		Cash dividends paid ($0.48 per share)	—		—		—		—		(11,782)		—		(11,782)
Balance at March 28, 2020		$	256	$	874,360	$	(239,817)	$	(121,802)	$	963,820	$	131	$	1,476,948
Balance at March 27, 2021																Balance at March 27, 2021	$	259	$	918,762	$	(242,366)	$	(96,028)	$	1,079,979	$	131	$	1,660,737

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

Notes to Condensed Consolidated Financial Statements

1. Summary of Significant Accounting Policies and Other Information

Nature of Operations

Founded in 1927, Littelfuse is an industrial ~~technology~~technology manufacturing company empowering a sustainable, connected, and safer world. Across more than 15 countries, and with ~~12,000~~17,000 global associates, ~~we partner~~the Company partners with customers to design and deliver innovative, reliable solutions. Serving over 100,000 end customers, ~~our~~the Company’s products are found in a variety of industrial, transportation and electronics end markets – everywhere, every day.

Basis of Presentation

The Company’s accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. 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. GAAP have been condensed or omitted as permitted by such rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. They have been prepared in accordance with accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended ~~December 26, 2020~~January 1, 2022 which should be read in conjunction with the disclosures therein. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal, recurring nature. Operating results for interim periods are not necessarily indicative of annual operating results.

Revenue Recognition

Revenue Disaggregation

The following tables disaggregate the Company’s revenue by primary business units for the three months ended April 2, 2022 and March 27, ~~2021 and March 28, 2020:~~2021:


		Three Months Ended March 27, 2021								Three Months Ended April 2, 2022
(in thousands)	(in thousands)	Electronics Segment		Automotive Segment		Industrial Segment		Total			(in thousands)	Electronics Segment		Transportation Segment		Industrial Segment		Total
Electronics – Passive Products and Sensors	Electronics – Passive Products and Sensors	$	132,437	$	0	$	0	$	132,437		Electronics – Passive Products and Sensors	$	169,943	$	—	$	—	$	169,943
Electronics – Semiconductor	Electronics – Semiconductor	154,098		0		0		154,098			Electronics – Semiconductor	195,878		—		—		195,878
Passenger Car Products	Passenger Car Products	0		67,901		0		67,901			Passenger Car Products	—		64,494		—		64,494
Automotive Sensors	Automotive Sensors	0		28,284		0		28,284			Automotive Sensors	—		26,137		—		26,137
Commercial Vehicle Products	Commercial Vehicle Products	0		32,344		0		32,344			Commercial Vehicle Products	—		93,873		—		93,873
Industrial Products	Industrial Products	0		0		48,730		48,730			Industrial Products	—		—		73,005		73,005
Total	Total	$	286,535	$	128,529	$	48,730	$	463,794		Total	$	365,821	$	184,504	$	73,005	$	623,330

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		Three Months Ended March 28, 2020								Three Months Ended March 27, 2021
(in thousands)	(in thousands)	Electronics Segment		Automotive Segment		Industrial Segment		Total			(in thousands)	Electronics Segment		Transportation Segment		Industrial Segment		Total
Electronics – Passive Products and Sensors	Electronics – Passive Products and Sensors	$	84,598	$	0	$	0	$	84,598		Electronics – Passive Products and Sensors	$	132,437	$	—	$	—	$	132,437
Electronics – Semiconductor	Electronics – Semiconductor	129,591		0		0		129,591			Electronics – Semiconductor	154,098		—		—		154,098
Passenger Car Products	Passenger Car Products	0		52,645		0		52,645			Passenger Car Products	—		67,901		—		67,901
Automotive Sensors	Automotive Sensors	0		24,174		0		24,174			Automotive Sensors	—		28,284		—		28,284
Commercial Vehicle Products	Commercial Vehicle Products	0		27,951		0		27,951			Commercial Vehicle Products	—		32,344		—		32,344
Industrial Products	Industrial Products	0		0		27,137		27,137			Industrial Products	0		0		48,730		48,730
Total	Total	$	214,189	$	104,770	$	27,137	$	346,096		Total	$	286,535	$	128,529	$	48,730	$	463,794

See Note 15, Segment Information for net sales by segment and countries.

Revenue Recognition

The Company recognizes revenue on product sales in the period in which the Company satisfies its performance obligation and control of the product is transferred to the customer. The Company’s sales arrangements with customers are predominately short term in nature and generally provide for transfer of control at the time of shipment as this is the point at which title and risk of loss of the product transfers to the customer. At the end of each period, for those shipments where title to the products and the risk of loss and rewards of ownership do not transfer until the product has been received by the customer, the Company adjusts revenues and cost of sales for the delay between the time that the products are shipped and when they are received by the customer. The amount of revenue recorded reflects the consideration to which the Company expects to be entitled in exchange for goods and may include adjustments for customer allowance, rebates and price adjustments. The Company’s distribution channels are primarily through direct sales and independent third-party distributors.

The Company elected the practical expedient under Accounting Standards Codification ("ASC") 340-40-25-4 to expense commissions when incurred as the amortization period of the commission asset the Company would have otherwise recognized is less than one year.

Revenue and Billing

The Company generally accepts orders from customers through receipt of purchase orders or electronic data interchange based on written sales agreements and purchasing contracts. Contract pricing and selling agreement terms are based on market factors, costs, and competition. Pricing is often negotiated as an adjustment (premium or discount) from the Company’s published price lists. The customer is invoiced when the Company’s products are shipped to them in accordance with the terms of the sales agreement. As the Company’s standard payment terms are less than one year, the Company elected the practical expedient under ASC 606-10-32-18 to not assess whether a contract has a significant financing component. The Company also elected the practical expedient provided in ASC 606-10-25-18B to treat all product shipping and handling activities as fulfillment activities, and therefore recognize the gross revenue associated with the contract, inclusive of any shipping and handling revenue.

Ship and Debit Program

Some of the terms of the Company’s sales agreements and normal business conditions provide customers (distributors) the ability to receive price adjustments on products previously shipped and invoiced. This practice is common in the industry and is referred to as a “ship and debit” program. 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. When the Company approves such a reduction, the distributor is authorized to “debit” its account for the difference between the contracted price and the lower approved price. The Company establishes reserves for this program based on historic activity, electronic distributor inventory levels and actual authorizations for the debit and recognizes these debits as a reduction of revenue.

Return to Stock

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~~Return to Stock~~

The Company has a return to stock policy whereby certain customers, with prior authorization from Littelfuse management, can return previously purchased goods for full or partial credit. The Company establishes an estimated allowance for these returns based on historic activity. Sales revenue and cost of sales are reduced to anticipate estimated returns.

Volume Rebates

The Company offers volume based sales incentives to certain customers to encourage greater product sales. If customers achieve their specific quarterly or annual sales targets, they are entitled to rebates. The Company estimates the projected amount of rebates that will be achieved by the customer and recognizes this estimated cost as a reduction to revenue as products are sold.

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash at ~~March 27, 2021~~April 2, 2022 and ~~December 26, 2020~~January 1, 2022 reported within the Condensed Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Condensed Consolidated Statement of Cash Flows.


(in thousands)	(in thousands)	March 27, 2021		December 26, 2020		(in thousands)	April 2, 2022		January 1, 2022
Cash and cash equivalents	Cash and cash equivalents	$	572,771	$	687,525	Cash and cash equivalents	$	461,617	$	478,473
Restricted cash included in prepaid expenses and other current assets	Restricted cash included in prepaid expenses and other current assets	3,462		0		Restricted cash included in prepaid expenses and other current assets	1,745		2,718
Restricted cash included in other assets		1,064		$	0
Restricted cash included in other long-term assets						Restricted cash included in other long-term assets	1,609		$	1,645
Total cash, cash equivalents and restricted cash	Total cash, cash equivalents and restricted cash	$	577,297	$	687,525	Total cash, cash equivalents and restricted cash	$	464,971	$	482,836

Recently Adopted Accounting Standards

In ~~December 2019,~~November 2021, the Financial Accounting Standards Board ~~(FASB)~~("FASB") issued ASU No. ~~2019-12, "Income Taxes~~2021-10, "Government Assistance (Topic ~~740) - Simplifying~~832): Disclosures by Business Entities about Government Assistance". The standard, requires annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy: 1) Information about the ~~Accounting~~nature of the transactions and the related accounting policy used to account for ~~Income Taxes" as part~~the transactions; 2) The line items on the balance sheet and income statement that are affected by the transactions, and the amounts applicable to each financial statement line item; 3) Significant terms and conditions of ~~its initiative to reduce complexity in~~ the ~~accounting standards.~~transactions, including commitments and contingencies. The guidance is effective for fiscal years beginning after December 15, ~~2020~~2021 with early adoption permitted. The adoption of ASU ~~2019-12~~2021-10 did not have a material impact on ~~our~~the Company's Condensed Consolidated Financial Statements.

RecentlyIssuedAccounting Standards

In October 2021, the FASB issued ASU No. 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers". The standard requires an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The guidance is effective for fiscal years beginning after December 15, 2022 with early adoption permitted. The Company does not expect a material impact from the adoption of this guidance on the Company's Condensed Consolidated Financial Statements.

2. Acquisitions

The Company accounts for acquisitions using the acquisition method in accordance with ASC 805, “Business Combinations,” in which assets acquired and liabilities assumed are recorded at fair value as of the date of acquisition. The operating results of the acquired business are included in the Company’s Consolidated Financial Statements from the date of the acquisition.

Carling Technologies

On November 30, 2021, the Company completed the previously announced acquisition of Carling Technologies, Inc. (“Carling”), pursuant to the Stock Purchase Agreement, dated as of October 19, 2021. Founded in 1920, Carling has a leading position in switching and circuit protection technologies with a strong global presence in commercial vehicle, marine and datacom/telecom infrastructure markets. At the time of acquisition, Carling had annualized sales of approximately $170 million. The business is headquartered in Plainville, Connecticut, with offices and facilities located around the world and is reported as

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part of the commercial vehicle business within the Company's Transportation segment. The purchase price for Carling Technologies was approximately $315.5 million subject to a working capital adjustment.

The acquisition was funded with cash on hand. The total purchase consideration of $313.6 million, net of cash, has been allocated, on a preliminary basis, to assets acquired and liabilities assumed, as of the completion of the acquisition, based on preliminary estimated fair values. The purchase consideration will be adjusted for an additional $0.5 million associated with the final working capital adjustment, which will be settled in the second quarter of 2022. 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 areas that are not yet finalized relate to the completion of the valuations of certain property, plant and equipment and acquired income tax assets and liabilities. As a result, these allocations are subject to change during the purchase price allocation period as the valuations are finalized.

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


(in thousands)	Purchase Price Allocation
Total purchase consideration:
Cash, net of cash acquired	$	313,583
Allocation of consideration to assets acquired and liabilities assumed:
Trade receivables, net	26,129
Inventories	56,657
Other current assets	3,454
Property, plant, and equipment	58,315
Intangible assets	125,890
Goodwill	97,553
Other non-current assets	4,007
Current liabilities	(22,288)
Other non-current liabilities	(36,134)
	$	313,583

All Carling goodwill, other assets and liabilities were recorded in the Transportation segment and are reflected in the Americas, Europe and Asia-Pacific geographic areas. The goodwill resulting from this acquisition consists largely of the Company’s expected future product sales and synergies from combining Carling’s products and technology with the Company’s existing commercial vehicle products portfolio. Goodwill resulting from the Carling acquisition is not expected to be deductible for tax purposes.

During the three months ended April 2, 2022, the Company made adjustments to reduce the fair value of fixed assets of $6.0 million, inventories of $0.8 million, net accounts receivable of $0.6 million and increase in accrued liabilities of $0.5 million. As a result of these adjustments along with a corresponding reduction of deferred tax liabilities of $1.6 million, goodwill was increased by $5.2 million.

As required by purchase accounting rules, the Company recorded a $6.4 million step-up of inventory to its fair value as of the acquisition date based on the preliminary valuation. The step-up was amortized as a non-cash charge to cost of sales during the fourth quarter of 2021 and first quarter of 2022, as the acquired inventory was sold, and reflected as other non-segment costs. The Company recognized a non-cash charge of $4.8 million to cost of sales during the three months ended April 2, 2022.

Hartland Controls

On January 28, 2021, the Company acquired Hartland Controls ("Hartland"), a manufacturer and leading supplier of electrical components used primarily in heating, ventilation, air conditioning (HVAC) and other industrial and control systems applications with annualized sales of approximately $70 million. The purchase price for Hartland was ~~approximately $112.3~~$111.0 million and the operations of Hartland are included in the Industrial segment.

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The total purchase consideration of ~~$109.9~~$108.5 million, net of cash, cash equivalents, and restricted cash has been allocated ~~on a preliminary basis,~~ to assets acquired and liabilities assumed, as of the completion of the acquisition, based on ~~preliminary~~ estimated fair values. The purchase consideration is subject to change for the final working capital adjustments. As of ~~March 27, 2021,~~April 2, 2022, the Company had restricted cash of $1.7 million in an escrow account for general indemnification purposes. 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 areas that are not yet finalized relate to the completion of the valuations 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.

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


(in thousands)	Purchase Price Allocation
Total purchase consideration:
Cash, net of cash acquired, and restricted cash	$	~~109,852~~108,516
Allocation of consideration to assets acquired and liabilities assumed:
Trade receivables, net	~~14,305~~12,915
Inventories	~~36,306~~35,808
Other current assets	~~2,384~~2,224
Property, plant, and equipment	6,296
Intangible assets	39,660
Goodwill	~~38,929~~38,502
Other non-current assets	~~3,542~~3,782
Current liabilities	~~(25,024)~~(24,861)
Other non-current liabilities	~~(6,546)~~(5,810)
	$	~~109,852~~108,516

All Hartland goodwill, other assets and liabilities were recorded in the Industrial segment and are primarily reflected in the Americas and Asia-Pacific geographic areas. The goodwill resulting from this acquisition consists largely of the Company’s expected future product sales and synergies from combining Hartland’s products and technology with the Company’s existing industrial products portfolio. Goodwill resulting from the Hartland acquisition is not expected to be deductible for tax purposes.

Included in the Company’s Condensed Consolidated Statements of Net Income for the three months ended March 27, 2021 are net sales of approximately $16.7 million, and a loss before income taxes of $2.2 million, since the January 28, 2021 acquisition of Hartland.

The Company recorded a $6.8 million step-up of inventory to its fair value as of the acquisition ~~date based on the preliminary valuation.~~date. The step-up ~~is being~~was amortized as a non-cash charge to cost of ~~goods sold~~sales during the first and second quarters of 2021, as the acquired inventory iswas sold, and is reflected as other non-segment costs. During the three months ended March 27, 2021, the Company recognized a charge of $3.5 million for the amortization of this fair value inventory step-up.

During the three months ended March 27, 2021, the Company incurred approximately $0.7 million of legal and professional fees related to this acquisition recognized as Selling, general, and administrative expenses. These costs were reflected as other non-segment costs.

Pro Forma Results

The following table summarizes, on an unaudited pro forma basis, the combined results of operations of the Company, Hartland and ~~Hartland~~Carling as though the ~~acquisition~~acquisitions had occurred as of December 29, 2019. The pro forma amounts presented are not necessarily indicative of either the actual consolidated results had the Hartland ~~acquisition~~and Carling acquisitions occurred as of December 29, 2019 or of future consolidated operating results.


		For the Three Months Ended					For the Three Months Ended
(in thousands, except per share amounts)	(in thousands, except per share amounts)	March 27, 2021		March 28, 2020		(in thousands, except per share amounts)	April 2, 2022		March 27, 2021
Net sales	Net sales	$	470,832	$	363,617	Net sales	$	623,330	$	517,399
Income before income taxes	Income before income taxes	77,288		31,431		Income before income taxes	138,894		78,595
Net income	Net income	61,317		21,438		Net income	121,238		62,573
Net income per share — basic	Net income per share — basic	2.50		0.88		Net income per share — basic	4.91		2.57
Net income per share — diluted	Net income per share — diluted	2.46		0.87		Net income per share — diluted	4.85		2.55

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Pro forma results presented above primarily reflect the following adjustments:

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		For the Three Months Ended					For the Three Months Ended
(in thousands)	(in thousands)	March 27, 2021		March 28, 2020		(in thousands)	April 2, 2022		March 27, 2021
Amortization(a)	Amortization(a)	$	(279)	$	(834)	Amortization(a)	$	—	$	(2,601)
Depreciation	Depreciation	7		48		Depreciation	—		(43)
Transaction costs(b)	Transaction costs(b)	707		(707)		Transaction costs(b)	—		707
Amortization of inventory step-up(c)	Amortization of inventory step-up(c)	3,490		(5,137)		Amortization of inventory step-up(c)	4,769		3,490
Income tax (expense) benefit of above items		(831)		1,398
Income tax expense of above items						Income tax expense of above items	(1,049)		(309)

(a)The amortization adjustment for the three months ended March ~~28, 2020~~27, 2021 primarily reflects incremental amortization resulting ~~for~~from the measurement of intangibles at their fair values.

(b)The transaction cost adjustments reflect the reversal of certain ~~bank~~legal and ~~attorney~~professional fees from the three months ended March 27, ~~2021 and recognition of those fees during the three months ended March 28, 2020.~~2021.

(c)The amortization of inventory step-up adjustment reflects the reversal of the amount recognized during ~~the~~ three months ended ~~March 27, 2021~~April 2, 2022 and the recognition of ~~a full quarter of~~ the amortization during ~~the three months ended March 28,~~ 2020. The inventory step-up was amortized over four months as the inventory was sold.

3. Inventories

The components of inventories at ~~March 27, 2021~~April 2, 2022 and ~~December 26, 2020~~January 1, 2022 are as follows:


(in thousands)	(in thousands)	March 27, 2021		December 26, 2020		(in thousands)	April 2, 2022		January 1, 2022
Raw materials	Raw materials	$	97,695	$	85,394	Raw materials	$	197,628	$	168,409
Work in process	Work in process	102,285		92,783		Work in process	122,324		117,506
Finished goods	Finished goods	130,138		114,641		Finished goods	187,477		195,656
Inventory Reserves		(35,061)		(34,816)
Inventory reserves						Inventory reserves	(36,877)		(35,900)
Total	Total	$	295,057	$	258,002	Total	$	470,552	$	445,671

4. Property, Plant, and Equipment

The components of net property, plant, and equipment at ~~March 27, 2021~~April 2, 2022 and ~~December 26, 2020~~January 1, 2022 are as follows:

(in thousands) March 27, 2021 December 26, 2020
Land $ 22,711 $ 22,851
Building 124,192 123,497
Equipment 687,563 678,220
Accumulated depreciation and amortization (489,552) (480,390)
Total $ 344,914 $ 344,178


(in thousands)	April 2, 2022		January 1, 2022
Land and land improvements	$	23,153	$	23,470
Building and building improvements	177,453		151,297
Machinery and equipment	770,642		779,559

Accumulated depreciation	(529,226)		(516,437)
Total	$	442,022	$	437,889

The Company recorded depreciation expense of ~~$13.7~~$15.6 million and ~~$13.8~~$13.7 million for the three months ended April 2, 2022 and March 27, 2021, ~~and March 28, 2020,~~ respectively.

5. Goodwill and Other Intangible Assets

~~The amounts for goodwill and changes~~Changes in the carrying value of goodwill by segment for the three months ended ~~March 27, 2021~~April 2, 2022 are as follows:

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(in thousands) Electronics Automotive Industrial Total
Net book value of goodwill as of December 26, 2020
Gross goodwill as of December 26, 2020 $ 676,325 $ 138,354 $ 47,551 $ 862,230
Accumulated impairment losses as of December 26, 2020 0 (36,423) (8,995) (45,418)
Total 676,325 101,931 38,556 816,812
Changes during 2021:
Additions(a)
0 0 38,929 38,929
Currency translation (8,124) (2,012) (19) (10,155)
Net book value of goodwill as of March 27, 2021
Gross goodwill as of March 27, 2021 668,201 136,229 86,461 890,891
Accumulated impairment losses as of March 27, 2021 0 (36,310) (8,995) (45,305)
Total $ 668,201 $ 99,919 $ 77,466 $ 845,586

~~(a) The additions resulted from the acquisition of Hartland.~~

~~The components of other intangible assets as of March 27, 2021 and~~ ~~December 26, 2020~~ ~~are as follows:~~

As of March 27, 2021
(in thousands) Gross
Carrying
Value

Accumulated Amortization

Net Book
Value
Land use rights $ 10,251 $ 2,051 $ 8,200
Patents, licenses and software 142,732 94,636 48,096
Distribution network 43,704 39,307 4,397
Customer relationships, trademarks, and tradenames 400,253 143,652 256,601
Total $ 596,940 $ 279,646 $ 317,294

As of December 26, 2020
(in thousands) Gross
Carrying
Value

Accumulated
Amortization

Net Book
Value
Land use rights $ 10,280 $ 2,007 $ 8,273
Patents, licenses and software 137,210 92,868 44,342
Distribution network 43,910 38,980 4,930
Customer relationships, trademarks, and tradenames 372,064 137,722 234,342
Total $ 563,464 $ 271,577 $ 291,887

~~During the three months ended March 27, 2021 and March 28, 2020, the Company recorded amortization expense of $10.5 million and $10.0 million, respectively.~~

The Company recognized a $0.3 million non-cash impairment charge in the first quarter of 2020 on a certain patent triggered by the Company’s announcement to consolidate a manufacturing facility within the Industrial segment.

~~During the three months ended March 27, 2021, the Company recorded additions to intangible assets of $39.7 million, related to the Hartland acquisition, the components of which were as follows:~~

(in thousands) Weighted Average Useful Life Amount
Patents, licenses and software 9.2 $ 7,559
Customer relationships, trademarks, and tradenames 13.7 32,101
Total 0 $ 39,660

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(in thousands)	Electronics		Transportation		Industrial		Total
Net book value of goodwill as of January 1, 2022
Gross goodwill as of January 1, 2022	$	660,245	$	228,555	$	86,232	$	975,032
Accumulated impairment losses as of January 1, 2022	—		(36,177)		(9,065)		(45,242)
Total	660,245		192,378		77,167		929,790
Changes during 2022:
Additions(a)	—		5,187		—		5,187

Currency translation	(6,746)		(1,610)		111		(8,245)
Net book value of goodwill as of April 2, 2022
Gross goodwill as of April 2, 2022	653,499		231,733		86,517		971,749
Accumulated impairment losses as of April 2, 2022	—		(35,778)		$	(9,239)	(45,017)
Total	$	653,499	$	195,955	$	77,278	$	926,732

(a) The additions resulted from the acquisition of Carling.

The components of other intangible assets as of April 2, 2022 and January 1, 2022 are as follows:


	As of April 2, 2022
(in thousands)	Gross Carrying Value		Accumulated Amortization		Net Book Value
Land use rights	$	19,562	$	2,019	$	17,543
Patents, licenses and software	163,214		103,649		59,565
Distribution network	43,239		40,991		2,248
Customer relationships, trademarks, and tradenames	483,872		171,373		312,499

Total	$	709,887	$	318,032	$	391,855


	As of January 1, 2022
(in thousands)	Gross Carrying Value		Accumulated Amortization		Net Book Value
Land use rights	$	19,542	$	1,906	$	17,636
Patents, licenses and software	164,556		101,307		63,249
Distribution network	43,361		40,591		2,770
Customer relationships, trademarks, and tradenames	487,710		164,239		323,471
Total	$	715,169	$	308,043	$	407,126

During the three months ended April 2, 2022 and March 27, 2021, the Company recorded amortization expense of $12.7 million and $10.5 million, respectively.

Estimated annual amortization expense related to intangible assets with definite lives as of ~~March 27, 2021~~April 2, 2022 is as follows:


(in thousands)	(in thousands)	Amount		(in thousands)	Amount
2021		$	41,545
2022	2022	40,791		2022	$	49,911
2023	2023	36,491		2023	45,302
2024	2024	33,054		2024	41,899
2025	2025	32,603		2025	41,426
2026 and thereafter		143,331
2026				2026	32,955
2027 and thereafter				2027 and thereafter	193,086
Total	Total	$	327,815	Total	$	404,579

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6. Accrued Liabilities

The components of accrued liabilities as of ~~March 27, 2021~~April 2, 2022 and ~~December 26, 2020~~January 1, 2022 are as follows:


(in thousands)	(in thousands)	March 27, 2021		December 26, 2020		(in thousands)	April 2, 2022		January 1, 2022
Employee-related liabilities	Employee-related liabilities	$	45,135	$	50,689	Employee-related liabilities	$	55,410	$	92,018
Operating lease liability	Operating lease liability	7,177		6,811		Operating lease liability	9,748		9,018
Other non-income taxes						Other non-income taxes	6,252		4,280
Professional services						Professional services	5,840		4,299
Restructuring liability						Restructuring liability	2,882		2,944
Interest	Interest	2,636		4,517		Interest	2,594		4,402
Restructuring liability		2,588		4,195
Customer liability		794		3,858
Professional services		3,010		3,321

Deferred revenue	Deferred revenue	2,713		2,959		Deferred revenue	1,216		1,105

Other non-income taxes		1,903		2,126
Other	Other	32,398		32,002		Other	43,069		41,623
Total	Total	$	98,354	$	110,478	Total	$	127,011	$	159,689

Employee-related liabilities consist primarily of payroll, sales commissions, bonus, employee benefit accruals and workers’ compensation. Bonus accruals include amounts earned pursuant to the Company’s primary employee incentive compensation plans. Other accrued liabilities include miscellaneous operating accruals and other client-related liabilities.

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7. Restructuring, Impairment, and Other Charges

The Company recorded restructuring, impairment and other charges for the three months ended April 2, 2022 and March 27, 2021 ~~and March 28, 2020~~ as follows:


		Three months ended March 27, 2021								Three months ended April 2, 2022
(in thousands)	(in thousands)	Electronics		Automotive		Industrial		Total			(in thousands)	Electronics		Transportation		Industrial		Total
Employee terminations	Employee terminations	$	257	$	0	$	163	$	420		Employee terminations	$	205	$	—	$	—	$	205
Other restructuring charges	Other restructuring charges	0		17		0		17			Other restructuring charges	—		13		—		13
Total restructuring charges	Total restructuring charges	257		17		163		437			Total restructuring charges	205		13		—		218
Impairment		0		0		0		0

Total	Total	$	257	$	17	$	163	$	437		Total	$	205	$	13	$	—	$	218


		Three months ended March 28, 2020								Three months ended March 27, 2021
(in thousands)	(in thousands)	Electronics		Automotive		Industrial		Total			(in thousands)	Electronics		Transportation		Industrial		Total
Employee terminations	Employee terminations	$	881	$	399	$	321	$	1,601		Employee terminations	$	257	$	—	$	163	$	420
Other restructuring charges	Other restructuring charges	1		120		3		124			Other restructuring charges	—		17		—		17
Total restructuring charges	Total restructuring charges	882		519		324		1,725			Total restructuring charges	257		17		163		437
Impairment		0		0		2,237		2,237

Total	Total	$	882	$	519	$	2,561	$	3,962		Total	$	257	$	17	$	163	$	437

2022

For the three months ended April 2, 2022, the Company recorded total restructuring charges of $0.2 million, primarily for employee termination costs. These charges are primarily related to the reorganization of certain manufacturing, selling and administrative functions within the Electronics segment.

2021

For the three months ended March 27, 2021, the Company recorded total restructuring charges of $0.4 million, primarily for employee termination costs. These charges primarily related to the reorganization of certain manufacturing, selling and administrative functions within the Electronics and Industrial segments.

~~2020~~

For the three months ended March 28, 2020, the Company recorded total restructuring charges of $1.7 million, for employee termination costs and other restructuring charges. These charges primarily related to the reorganization of certain manufacturing, selling and administrative functions across all segments and the announced consolidation of a manufacturing facility within the Industrial segment. The Company also recognized $2.2 million of impairment charges related to the land and building associated with the Company’s announcement to consolidate a manufacturing facility within the Industrial segment.

The restructuring liability as of ~~March 27, 2021~~both April 2, 2022 and ~~December 26, 2020 is $2.6 million and $4.2 million, respectively.~~January 1, 2022 is $2.9 million. The restructuring liability is included within accrued liabilities in the Condensed ~~Consolidated~~Consolidated Balance Sheets. The Company anticipates the remaining payments associated with employee terminations will primarily be completed ~~by the first quarter of~~in fiscal year 2022.

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8. Debt

The carrying amounts of debt at ~~March 27, 2021~~April 2, 2022 and ~~December 26, 2020~~January 1, 2022 are as follows:


(in thousands)	(in thousands)	March 27, 2021		December 26, 2020		(in thousands)	April 2, 2022		January 1, 2022
Revolving Credit Facility	Revolving Credit Facility	$	100,000	$	130,000	Revolving Credit Facility	$	100,000	$	100,000

Euro Senior Notes, Series A due 2023	Euro Senior Notes, Series A due 2023	138,039		142,679		Euro Senior Notes, Series A due 2023	129,478		132,444
Euro Senior Notes, Series B due 2028	Euro Senior Notes, Series B due 2028	112,083		115,850		Euro Senior Notes, Series B due 2028	105,132		107,540
U.S. Senior Notes, Series A due 2022	U.S. Senior Notes, Series A due 2022	25,000		25,000		U.S. Senior Notes, Series A due 2022	—		25,000
U.S. Senior Notes, Series B due 2027	U.S. Senior Notes, Series B due 2027	100,000		100,000		U.S. Senior Notes, Series B due 2027	100,000		100,000
U.S. Senior Notes, Series A due 2025	U.S. Senior Notes, Series A due 2025	50,000		50,000		U.S. Senior Notes, Series A due 2025	50,000		50,000
U.S. Senior Notes, Series B due 2030	U.S. Senior Notes, Series B due 2030	125,000		125,000		U.S. Senior Notes, Series B due 2030	125,000		125,000
Other	Other	2,619		2,619		Other	—		—
Unamortized debt issuance costs	Unamortized debt issuance costs	(3,876)		(4,114)		Unamortized debt issuance costs	(2,869)		(3,087)
Total debt	Total debt	648,865		687,034		Total debt	606,741		636,897
Less: Current maturities	Less: Current maturities	(25,000)		0		Less: Current maturities	—		(25,000)
Total long-term debt	Total long-term debt	$	623,865	$	687,034	Total long-term debt	$	606,741	$	611,897

Revolving Credit Facility

On April 3, 2020, the Company amended its Credit Agreement to effect certain changes, including, among others: (i) eliminating the $200.0 million unsecured term loan credit facility, the remaining outstanding balance ($140.0 million) of which was repaid in full on April 3, 2020 through the revolving credit facility; (ii) making certain financial and non-financial covenants less restrictive on the Company; (iii) modifying performance-based interest rate margins and undrawn fees; and (iv) extending the maturity date to April 3, 2025. The amended Credit Agreement also allows the Company to increase the size of the revolving credit facility or enter into one or more tranches of term loans if there is no event of default and the Company is in compliance with certain financial covenants.~~The Company made payments of $30.0 million on the amended revolving credit facility during the three months ended March 27, 2021.~~ The balance under the facility was $100.0 million as of ~~March 27, 2021.~~April 2, 2022.

Outstanding borrowings under the amended Credit Agreement bears interest, at the Company’s option, at either LIBOR, fixed for interest periods of one, two, three or six-month periods, plus 1.25% to 2.00%, or at the bank’s Base Rate, as defined, plus 0.25% to 1.00%, based upon the Company’s Consolidated Leverage Ratio, as defined. The Company ~~was~~is also required to pay commitment fees on unused portions of the credit agreement ranging from 0.125% to 0.20%, based on the Consolidated Leverage Ratio, as defined in the agreement. The amended Credit Agreement ~~included~~includes representations, covenants and events of default that are customary for financing transactions of this nature. The effective interest rate on outstanding borrowings under the credit facility was ~~1.61% at March 27, 2021.~~1.71% on April 2, 2022.

As of ~~March 27, 2021,~~April 2, 2022, the Company had 0no amount outstanding in letters of credit and had available ~~$571.3~~$600.0 million of borrowing capacity under the Revolving Credit ~~Facility based on financial covenants. At March 27, 2021,~~Facility. As of April 2, 2022, the Company was in compliance with all covenants under the Credit Agreement.

Senior Notes

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 2 series. The funding date for the Euro denominated senior notes occurred on December 8, 2016 for €117 million in aggregate amount of 1.14% Senior Notes, Series A, due December 8, 2023 (“Euro Senior Notes, Series A due 2023”), and €95 million in aggregate amount of 1.83% Senior Notes, Series B due December 8, 2028 (“Euro Senior Notes, Series B due 2028”) (together, the “Euro Senior Notes”). Interest on the Euro Senior Notes is payable semiannually on June 8 and December 8, commencing June 8, 2017.

On December 8, 2016, the Company entered into a Note Purchase Agreement, pursuant to which the Company issued and sold $125 million aggregate principal amount of senior notes in 2 series. On February 15, 2017, $25 million in aggregate principal amount of 3.03% Senior Notes, Series A, due February 15, 2022 (“U.S. Senior Notes, Series A due 2022”), and $100 million in aggregate principal amount of 3.74% Senior Notes, Series B, due February 15, 2027 (“U.S. Senior Notes, Series B due 2027”)

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~~(together,~~ (together, the “U.S. Senior Notes due 2022 and 2027”) were funded. Interest on the U.S. Senior Notes due 2022 and 2027 is

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payable semiannually on February 15 and August 15, commencing August 15, 2017. During the three months ended April 2, 2022, the Company paid $25.0 million of U.S. Senior Notes, Series A due on February 15, 2022.

On November 15, 2017, the Company entered into a Note Purchase Agreement pursuant to which the Company issued and sold $175 million in aggregate principal amount of senior notes in 2 series. On January 16, 2018, $50 million aggregate principal amount of 3.48% Senior Notes, Series A, due February 15, 2025 (“U.S. Senior Notes, Series A due 2025”) and $125 million in aggregate principal amount of 3.78% Senior Notes, Series B, due February 15, 2030 (“U.S. Senior Notes, Series B due 2030”) (together the “U.S. Senior Notes due 2025 and 2030” and with the Euro Senior Notes and the U.S. Senior Notes due 2022 and 2027, the “Senior Notes”) were funded. Interest on the U.S. Senior Notes due 2025 and 2030 is payable semiannually on February 15 and August 15, commencing on August 15, 2018.

The Senior Notes have not been registered under the Securities Act, or applicable state securities laws. The Senior Notes are general unsecured senior obligations and rank equal in right of payment with all existing and future unsecured unsubordinated indebtedness of the Company.

The Senior Notes are subject to certain customary covenants, including limitations on the Company’s ability, with certain exceptions, to engage in mergers, consolidations, asset sales and transactions with affiliates, to engage in any business that would substantially change the general business of the Company, and to incur liens. In addition, the Company is required to satisfy certain financial covenants and tests relating to, among other matters, interest coverage and leverage. At ~~March 27, 2021,~~April 2, 2022, 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 ~~$6.2~~$6.0 million and ~~$7.4~~$6.2 million for the three months ended April 2, 2022 and March 27, 2021, ~~and March 28, 2020,~~ respectively.

9. Fair Value of Assets and Liabilities

For assets and liabilities measured at fair value on a recurring and nonrecurring basis, a three-level hierarchy of measurements based upon observable and unobservable inputs is used to arrive at fair value. Observable inputs are developed based on market data obtained from independent sources, while unobservable inputs reflect the Company’s assumptions about valuation based on the best information available in the circumstances. Depending on the inputs, the Company classifies each fair value measurement as follows:

Level 1—Valuations based on unadjusted quoted prices for identical assets or liabilities in active markets;

Level 2—Valuations based upon quoted prices for similar instruments, prices for identical or similar instruments in markets that are not active, or model-derived valuations, all of whose significant inputs are observable, and

Level 3—Valuations based upon one or more significant unobservable inputs.

Following is a description of the valuation methodologies used for instruments measured at fair value and their classification in the valuation hierarchy.

Cash Equivalents

Cash equivalents primarily consist of money market funds, which are held with an institution with sound credit rating and are highly liquid. The Company classified cash equivalents as Level 1 and are valued at cost which approximates fair value.

Investments in Equity Securities

Investments in equity securities listed on a national market or exchange are valued at the last sales price and classified within Level 1 of the valuation hierarchy and recorded in ~~investments~~Investments and ~~other~~Other long-term assets.

~~Other Investments~~

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The Company has certain convertible debt and convertible preferred stock investments that are accounted for under the cost method reflected in other assets in the Condensed Consolidated Balance Sheets. As of March 27, 2021 and December 26, 2020, the balances of these investments were both $0.5 million. The fair value of these investments are measured on a nonrecurring basis using Level 3 inputs under the fair value hierarchy. The Company's accounting and finance management determines the valuation policies and procedures for Level 3 fair value measurements and is responsible for the development and determination of unobservable inputs.

Mutual Funds

The Company has a non-qualified Supplemental Retirement and Savings Plan which provides additional retirement benefits for certain management employees and named executive officers by allowing participants to defer a portion of their annual compensation. The Company maintains accounts for participants through which participants make investment elections. 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~~Other long-term assets.

There ~~were~~were no changes during the quarter ended ~~March 27, 2021~~April 2, 2022 to the Company’s valuation techniques used to measure asset and liability fair values onon a recurring basis. As of ~~March 27, 2021~~April 2, 2022 and ~~December 26, 2020,~~January 1, 2022, the Company did not hold any non-financial assets or liabilities that are required to be measured at fair value on a recurring basis.

The following table presents assets measured at fair value by classification within the fair value hierarchy as of ~~March 27, 2021:~~April 2, 2022:


		Fair Value Measurements Using									Fair Value Measurements Using
(in thousands)	(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Cash Equivalents		$	66,565	$	0	$	0	$	66,565
Cash equivalents										Cash equivalents	$	12,476	$	—	$	—	$	12,476
Investments in equity securities	Investments in equity securities	25,830		0		0		25,830		Investments in equity securities	20,864		—		—		20,864
Mutual funds	Mutual funds	13,397		0		0		13,397		Mutual funds	15,546		—		—		15,546
Total	Total	$	105,792	$	0	$	0	$	105,792	Total	$	48,886	$	—	$	—	$	48,886

The following table presents assets measured at fair value by classification within the fair value hierarchy as of ~~December 26, 2020:~~January 1, 2022:


		Fair Value Measurements Using									Fair Value Measurements Using
(in thousands)	(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Cash Equivalents		$	73,461	$	0	$	0	$	73,461
Cash equivalents										Cash equivalents	$	12,475	$	—	$	—	$	12,475
Investments in equity securities	Investments in equity securities	19,186		0		0		19,186		Investments in equity securities	26,070		—		—		26,070
Mutual funds	Mutual funds	13,249		0		0		13,249		Mutual funds	15,021		—		—		15,021
Total	Total	$	105,896	$	0	$	0	$	105,896	Total	$	53,566	$	—	$	—	$	53,566

In addition to the methods and assumptions used for the financial instruments recorded at fair value as discussed above, the following methods and assumptions are used to estimate the fair value of other financial instruments that are not marked to market on a recurring basis. The Company’s other financial instruments include cash and cash equivalents, short-term investments, accounts receivable and its long-term debt. 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 credit facilities’ fair values approximate book value at ~~March 27, 2021~~April 2, 2022 and ~~December 26, 2020,~~January 1, 2022, as the rates on these borrowings are variable in nature.

The carrying value and estimated fair values of the Company’s Euro Senior Notes, Series A and Series B and USD Senior Notes, Series A and Series B, as of ~~March 27, 2021~~April 2, 2022 and ~~December 26, 2020~~January 1, 2022 were as follows:

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		March 27, 2021				December 26, 2020					April 2, 2022				January 1, 2022
(in thousands)	(in thousands)	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value		(in thousands)	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Euro Senior Notes, Series A due 2023	Euro Senior Notes, Series A due 2023	$	138,039	$	140,084	$	142,679	$	144,323	Euro Senior Notes, Series A due 2023	$	129,478	$	129,149	$	132,444	$	134,119
Euro Senior Notes, Series B due 2028	Euro Senior Notes, Series B due 2028	112,083		117,703		115,850		123,588		Euro Senior Notes, Series B due 2028	105,132		101,072		107,540		110,837
USD Senior Notes, Series A due 2022	USD Senior Notes, Series A due 2022	25,000		25,375		25,000		25,437		USD Senior Notes, Series A due 2022	—		—		25,000		25,055
USD Senior Notes, Series B due 2027	USD Senior Notes, Series B due 2027	100,000		106,174		100,000		109,552		USD Senior Notes, Series B due 2027	100,000		98,501		100,000		104,828
USD Senior Notes, Series A due 2025	USD Senior Notes, Series A due 2025	50,000		52,817		50,000		53,474		USD Senior Notes, Series A due 2025	50,000		49,284		50,000		51,720
USD Senior Notes, Series B due 2030	USD Senior Notes, Series B due 2030	125,000		130,764		125,000		138,036		USD Senior Notes, Series B due 2030	125,000		122,010		125,000		131,837

The Company recognized impairment charges of $1.9 million for the land and building and $0.3 million for a certain patent as a result of the Company’s announcement to consolidate a manufacturing facility within the Industrial segment during the first quarter of 2020. See Note 7, ~~Restructuring, Impairment and Other Charges,~~ ~~for further discussion. The fair value of the land and building was valued using a real estate appraisal and classified as a Level 3 input under the fair value hierarchy.~~

10. Benefit Plans

The Company has company-sponsored defined benefit pension plans covering employees in the U.K., Germany, the Philippines, China, Japan, Mexico, Italy and France. The amount of the retirement benefits provided under the plans is based on years of service and final average pay.

The Company recognizes interest cost, expected return on plan assets, and amortization of prior service, net within Other expense (income) ~~expense,~~, net in the Condensed Consolidated Statements of Net Income. The components of net periodic benefit cost for the three months ended April 2, 2022 and March 27, 2021 ~~and March 28, 2020~~ were as follows:


		For the Three Months Ended				For the Three Months Ended
(in thousands)	(in thousands)	March 27, 2021		March 28, 2020			(in thousands)	April 2, 2022		March 27, 2021
Components of net periodic benefit cost:	Components of net periodic benefit cost:						Components of net periodic benefit cost:
Service cost	Service cost	$	702	$	618		Service cost	$	768	$	702
Interest cost	Interest cost	440		658			Interest cost	644		440
Expected return on plan assets	Expected return on plan assets	(367)		(727)			Expected return on plan assets	(403)		(367)
Amortization of prior service and net actuarial loss	Amortization of prior service and net actuarial loss	331		145			Amortization of prior service and net actuarial loss	101		331
Net periodic benefit cost	Net periodic benefit cost	$	1,106	$	694		Net periodic benefit cost	$	1,110	$	1,106

The Company expects to make approximately ~~$2.2~~$2.6 million of contributions to the plans and pay ~~$3.8~~$1.8 million of benefits directly in ~~2021.~~2022.

The Company also sponsors certain post-employment plans in foreign countries and other statutory benefit plans. The Company recorded expense of $0.5 million for both the three months ended ~~March 27, 2021~~April 2, 2022 and March ~~28, 2020~~27, 2021, respectively, in Cost of Sales and Other expense (income) ~~expense,~~, net within the Condensed Consolidated Statements of Net Income. For the three months ended ~~March 27, 2021~~April 2, 2022 and March ~~28, 2020,~~27, 2021, the pre-tax amounts recognized in other comprehensive income (loss) as components of net periodic benefit costs for these plans were ~~both $0.2 million.~~$0.1 million and $0.2 million, respectively.

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in the plan. The actual amount and timing of the settlement charge could differ from this estimate due to final data and plan wind-up expenses. Due to the signing of the group annuity contract being a significant change in the U.K. pension plan, the liabilities of the plan were remeasured as of April 6, 2020 resulting in an increase of $13.4 million (£10.9 million) to both the net pension liability and unamortized actuarial loss within other comprehensive income (loss) during the second quarter of 2020. Additionally, the Company made a cash contribution of $10.4 million (£8.4 million) under this agreement during the second quarter of 2020.

11. Other Comprehensive (Loss) Income

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

(in thousands) Three Months Ended
March 27, 2021 Three Months Ended
March 28, 2020
Pre-tax Tax Net of Tax Pre-tax Tax Net of Tax
Defined benefit pension plan and other adjustments $ 506 $ 52 $ 454 $ 555 $ (6) $ 561
Foreign currency translation adjustments (5,325) 0 (5,325) (15,540) 0 (15,540)
Total change in other comprehensive income (loss) $ (4,819) $ 52 $ (4,871) $ (14,985) $ (6) $ (14,979)

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(in thousands)	Three Months Ended April 2, 2022						Three Months Ended March 27, 2021
	Pre-tax		Tax		Net of Tax		Pre-tax		Tax		Net of Tax
Defined benefit pension plan and other adjustments	$	323	$	13	$	310	$	506	$	52	$	454

Foreign currency translation adjustments (1)	(3,215)		(702)		(2,513)		(5,325)		—		(5,325)
Total change in other comprehensive (loss) income	$	(2,892)	$	(689)	$	(2,203)	$	(4,819)	$	52	$	(4,871)

(1) The tax shown above within the foreign currency translation adjustments is the U.S. tax associated with the foreign currency translation adjustments of earnings of non-U.S. subsidiaries which have been previously taxed in the U.S. 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 2, 2022 and March 27, ~~2021 and March 28, 2020:~~2021:


(in thousands)	(in thousands)	Defined benefit pension plan and other adjustments		Foreign currency translation adjustment		Accumulated other comprehensive (loss)		(in thousands)	Defined benefit pension plan and other adjustments		Foreign currency translation adjustment		Accumulated other comprehensive (loss)
Balance at December 26, 2020		$	(34,141)	$	(57,016)	$	(91,157)
Balance at January 1, 2022								Balance at January 1, 2022	$	(11,928)	$	(61,535)	$	(73,463)

Activity in the period	Activity in the period	454		(5,325)		(4,871)		Activity in the period	310		(2,513)		(2,203)
Balance at March 27, 2021		$	(33,687)	$	(62,341)	$	(96,028)
Balance at April 2, 2022								Balance at April 2, 2022	$	(11,618)	$	(64,048)	$	(75,666)


(in thousands)	(in thousands)	Defined benefit pension plan and other adjustments		Foreign currency translation adjustment		Accumulated other comprehensive (loss)		(in thousands)	Defined benefit pension plan and other adjustments		Foreign currency translation adjustment		Accumulated other comprehensive (loss)
Balance at December 28, 2019		$	(18,046)	$	(88,777)	$	(106,823)
Balance at December 26, 2020								Balance at December 26, 2020	$	(34,141)	$	(57,016)	$	(91,157)

Activity in the period	Activity in the period	561		(15,540)		(14,979)		Activity in the period	454		(5,325)		(4,871)
Balance at March 28, 2020		$	(17,485)	$	(104,317)	$	(121,802)
Balance at March 27, 2021								Balance at March 27, 2021	$	(33,687)	$	(62,341)	$	(96,028)

Amounts reclassified from accumulated other comprehensive (loss) to earnings for the three months ended April 2, 2022 and March 27, 2021 ~~and March 28, 2020~~ were as follows:

Three Months Ended

(in thousands)

March 27, 2021

March 28, 2020

(in thousands)

April 2, 2022

March 27, 2021

Pension and Postemployment plans:

Amortization of prior service and net actuarial loss

504

345

Amortization of prior service and net actuarial loss

197

504

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

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12. Income Taxes

The effective tax rate for the three months ended ~~March 27, 2021~~April 2, 2022 was ~~20.6%~~12.4%, compared to the effective tax rate for the three months ended March ~~28, 2020~~27, 2021 of ~~30.6%~~20.6%. The effective tax rate for the ~~2021 period~~first quarter of 2022 is lower than the effective tax rate for the comparable ~~2020~~2021 period, primarily due to ~~an increase~~a one-time deduction that resulted from the dissolution of one of the Company’s affiliates, which resulted in a net benefit of $7.2 million. The effective tax rate for the 2022 period is lower than the applicable U.S. statutory tax rate due to a one-time deduction that resulted from the dissolution of one of the Company’s affiliates, as well as the forecasted impact of income earned in lower tax ~~jurisdictions in 2021 as compared to 2020.~~jurisdictions. The effective tax rate for the comparable 2021 period is approximately the same as the applicable U.S. statutory tax rate.

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13. Earnings Per Share

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


		Three Months Ended				Three Months Ended
(in thousands, except per share amounts)	(in thousands, except per share amounts)	March 27, 2021		March 28, 2020			(in thousands, except per share amounts)	April 2, 2022		March 27, 2021
Numerator:	Numerator:						Numerator:
Net income as reported	Net income as reported	$	57,713	$	24,644		Net income as reported	$	117,518	$	57,713

Denominator:	Denominator:						Denominator:
Weighted average shares outstanding	Weighted average shares outstanding						Weighted average shares outstanding
Basic	Basic	24,532		24,393			Basic	24,689		24,532
Effect of dilutive securities	Effect of dilutive securities	360		185			Effect of dilutive securities	292		360
Diluted	Diluted	24,892		24,578			Diluted	24,981		24,892

Earnings Per Share:	Earnings Per Share:						Earnings Per Share:
Basic earnings per share	Basic earnings per share	$	2.35	$	1.01		Basic earnings per share	$	4.76	$	2.35
Diluted earnings per share	Diluted earnings per share	$	2.32	$	1.00		Diluted earnings per share	$	4.70	$	2.32

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 1557,928 and ~~153,836~~15 for the three months ended April 2, 2022 and March 27, 2021, ~~and March 28, 2020,~~ respectively.

Share Repurchase Program

On April 26, 2019, the Company's Board of Directors authorized a program to repurchase up to 1,000,000 shares of the Company's common stock for the period May 1, 2019 to April 30, 2020 ("2019 program"). On April 29, 2020, the Company announced that the Board of Directors authorized a new program to repurchase up to 1,000,000 shares of the Company's common stock for the period May 1, 2020 to April 30, 2021 (the "2020 program") to replace its previous expired 2019 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 0tnot repurchase any shares of its common stock for the three months ended April 2, 2022, and March 27, 2021. ~~During the three months ended March 28, 2020, the Company repurchased 175,110 shares of its common stock totaling $22.9 million.~~

14. Related Party Transactions

The Company has equity ownership in various investments that are accounted for under the equity method. The following is a description of the investments and related party transactions.

Powersem GmbH: The Company owns 45% of the outstanding equity of Powersem GmbH (“Powersem”), a module manufacturer based in Germany.

EB-Tech Co., Ltd.: The Company owns approximately 19% of the outstanding equity of EB Tech Co., Ltd. (“EB Tech”), a company with expertise in radiation technology based in South Korea.

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Automated Technology (Phil), Inc.: The Company owns approximately 24% of the outstanding common shares of Automated Technology (Phil), Inc. (“ATEC”), a supplier located in the Philippines that provides assembly and test services. One member of the Company's Board of Directors serves on the Board of Directors of ATEC.

For the Three Months Ended March 27, 2021 For the Three Months Ended March 28, 2020
(in millions) Powersem EB Tech ATEC Powersem EB Tech ATEC
Sales to related party $ 0.2 $ 0 $ 0 $ 0.4 $ 0 $ 0
Purchase material/service from related party $ 1.1 $ 0.1 $ 3.0 $ 0.2 $ 0 $ 1.8
March 27, 2021 December 26, 2020
(in millions) Powersem EB Tech ATEC Powersem EB Tech ATEC
Accounts Receivable balance $ 0 $ 0 $ 0 $ 0.1 $ 0 $ 0
Accounts Payable balance $ 0.2 $ 0 $ 0.3 $ 0.1 $ 0 $ 0.2

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~~Additionally, the Company has certain cost method investments in VTOOL Ltd. and Securepush Ltd. with a total book value of $0.5 million as of March 27, 2021 and~~ ~~December 26, 2020~~ ~~and one~~ ~~member of the Company’s Board of Directors is currently an investor and a director of VTOOL Ltd. and Securepush Ltd.~~


	Three Months Ended April 2, 2022						Three Months Ended March 27, 2021
(in millions)	Powersem		EB Tech		ATEC		Powersem		EB Tech		ATEC
Sales to related party	$	—	$	—	$	—	$	0.2	$	—	$	—
Purchase material/service from related party	0.2		0.1		2.9		1.1		0.1		3.0






	April 2, 2022						January 1, 2022
(in millions)	Powersem		EB Tech		ATEC		Powersem		EB Tech		ATEC

Accounts payable balance	—		—		2.0		—		—		1.8

15. Segment Information

The Company and its subsidiaries design, manufacture and sell ~~components~~component, modules and ~~modules empowering a sustainable, connected,~~subassemblies to empower the long-term structural themes of sustainability, connectivity and ~~safer world.~~safety. The Company reports its operations by the following segments: Electronics, ~~Automotive,~~Transportation, and Industrial. An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, and about which separate financial information is regularly evaluated by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources. The CODM is the Company’s President and Chief Executive Officer (“CEO”). The CODM allocates resources to and assesses the performance of each operating segment using information about its revenue and operating income (loss) before interest and taxes, but does not evaluate the operating segments using discrete balance sheet information.

Sales, marketing, and research and development expenses are charged directly into each operating segment. Purchasing, logistics, customer service, finance, information technology, and human resources are shared functions that are allocated back to the 3 operating segments. The Company does not report inter-segment revenue because the operating segments do not record it. Certain expenses, determined by the CODM to be strategic in nature and not directly related to ~~segments'~~segments current results, are not allocated but identified as “Other”. Additionally, the Company does not allocate interest and other income, interest expense, or taxes to operating segments. These costs are not allocated to the segments, as management excludes such costs when assessing the performance of the segments. Although the CODM uses operating income (loss) to evaluate the segments, operating costs included in one segment may benefit other segments. Except as discussed above, the accounting policies for segment reporting are the same as for the Company as a whole.

•Electronics Segment: Consists of one of the broadest product offerings in the industry, including fuses and fuse accessories, positive temperature coefficient (“PTC”) resettable fuses, 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 ~~silicon carbide~~ diodes; and insulated gate bipolar transistors (“IGBT”) technologies. The segment covers a broad range of end markets, including industrial motor drives and power conversion, automotive electronics, electric vehicle and related infrastructure, power supplies, data centers and telecommunications, medical devices, alternative energy and energy storage, building and home automation, appliances, and mobile electronics.

•~~Automotive~~Transportation Segment:Consists of a wide range of circuit protection, power control and sensing technologies for global original equipment manufacturers (“OEMs”), ~~Tier-I~~Tier-one suppliers and parts and aftermarket distributors in passenger ~~car, heavy duty~~vehicle, heavy-duty truck, off-road ~~vehicles,~~vehicle, material handling, agricultural, construction and other commercial vehicle end markets. Passenger ~~car fuse~~vehicle products ~~for~~are used in internal combustion engine, hybrid and electric vehicles including blade fuses, battery cable

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protectors, resettable fuses, high-current fuses, high-voltage fuses, and ~~high-voltage fuses.~~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~~heavy-duty truck, construction, agriculture, material handling and material handling. Automotive sensor products include a wide range of automotive and commercial vehicle products designed to monitor the passenger compartment occupant's safety and environment as well as the vehicle’s powertrain.marine.

•Industrial Segment: Consists of industrial circuit protection ~~products (i.e. fuses, power distribution modules, switches)~~(industrial fuses), industrial controls (protection relays, contactors, and transformers) and temperature sensors for use in various applications such as renewable energy and energy storage systems, electric vehicle infrastructure, HVAC systems, industrial safety, non-residential construction, MRO, mining and industrial control products (i.e. relays, transformers, contactors, sensors). These products are used in a variety of applications and end-markets including: Renewable Energy, Energy Storage, HVAC, Electric Vehicle Infrastructure, Industrial Equipment, Industrial Automation, Construction, Mining, and Oil & Gas.automation.

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Segment information is summarized as follows:


		Three Months Ended				Three Months Ended
(in thousands)	(in thousands)	March 27, 2021		March 28, 2020			(in thousands)	April 2, 2022		March 27, 2021
Net sales	Net sales						Net sales
Electronics	Electronics	$	286,535	$	214,189		Electronics	$	365,821	$	286,535
Automotive		128,529		104,770
Transportation							Transportation	184,504		128,529
Industrial	Industrial	48,730		27,137			Industrial	73,005		48,730
Total net sales	Total net sales	$	463,794	$	346,096		Total net sales	$	623,330	$	463,794

Depreciation and amortization	Depreciation and amortization						Depreciation and amortization
Electronics	Electronics	$	15,381	$	15,531		Electronics	$	15,393	$	15,381
Automotive		7,073		7,187
Transportation							Transportation	10,744		7,073
Industrial	Industrial	1,744		1,084			Industrial	2,161		1,744

Total depreciation and amortization	Total depreciation and amortization	$	24,198	$	23,802		Total depreciation and amortization	$	28,298	$	24,198

Operating income	Operating income						Operating income
Electronics	Electronics	$	55,523	$	32,272		Electronics	$	120,577	$	55,523
Automotive		20,316		14,116
Transportation							Transportation	26,308		20,316
Industrial	Industrial	3,506		3,534			Industrial	12,505		3,506
Other(a)	Other(a)	(2,864)		(5,172)			Other(a)	(8,800)		(2,864)
Total operating income	Total operating income	76,481		44,750			Total operating income	150,590		76,481
Interest expense	Interest expense	4,673		5,418			Interest expense	4,302		4,673
Foreign exchange loss	Foreign exchange loss	6,837		2,584			Foreign exchange loss	7,736		6,837
Other (income) expense, net		(7,737)		1,249
Other expense (income), net							Other expense (income), net	4,427		(7,737)
Income before income taxes	Income before income taxes	$	72,708	$	35,499		Income before income taxes	$	134,125	$	72,708

(a) Included in “Other” Operating income for the first quarter of 2022 was $4.8 million of purchase accounting inventory step-up charges, $3.8 million of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, and $0.2 million of restructuring, impairment and other charges, primarily related to employee termination costs. See Note 7, Restructuring, Impairment, and Other Charges, for further discussion.

Included in “Other” Operating income for the 2021 first quarter was $3.5 million of purchase accounting inventory step-up charges, $0.8 million of legal and professional fees and other integration expenses related to Hartland and other contemplated acquisitions, and $0.4 million of restructuring, impairment and other charges, primarily related to employee termination costs. See Note 7, Restructuring, Impairment, and Other Charges, for further discussion. In addition, there was a gain of $1.9 million ~~gain~~ from the sale of a building within the Electronics segment.

Included in "Other" Operating income for the first quarter of 2020 was $1.2 million of acquisition integration charges related to the IXYS acquisition and other contemplated acquisitions. In addition, there were $4.0 million of restructuring, impairment and other charges, primarily related to impairment charges of $2.2 million associated with the announced consolidation of a manufacturing facility within the Industrial segment and $1.7 million of employee termination costs and other restructuring charges. See Note 7, ~~Restructuring, Impairment and Other Charges, for further discussion.~~

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


		Three Months Ended				Three Months Ended
(in thousands)	(in thousands)	March 27, 2021		March 28, 2020			(in thousands)	April 2, 2022		March 27, 2021
Net sales	Net sales						Net sales
United States	United States	$	130,931	$	102,910		United States	$	220,238	$	130,931
China	China	139,158		86,015			China	164,782		139,158
Other countries(a)	Other countries(a)	193,705		157,171			Other countries(a)	238,310		193,705
Total net sales	Total net sales	$	463,794	$	346,096		Total net sales	$	623,330	$	463,794

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


(in thousands)	(in thousands)	March 27, 2021		December 26, 2020		(in thousands)	April 2, 2022		January 1, 2022
Long-lived assets	Long-lived assets					Long-lived assets
United States	United States	$	48,908	$	46,132	United States	$	65,163	$	57,923
China	China	85,280		85,876		China	117,403		122,867
Mexico	Mexico	72,499		70,125		Mexico	107,120		107,283
Germany	Germany	36,227		37,976		Germany	38,044		39,055
Philippines	Philippines	66,956		66,994		Philippines	78,918		74,918
Other countries(a)	Other countries(a)	35,044		37,075		Other countries(a)	35,374		35,843
Total long-lived assets	Total long-lived assets	$	344,914	$	344,178	Total long-lived assets	$	442,022	$	437,889

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


		Three Months Ended					Three Months Ended
(in thousands)	(in thousands)	March 27, 2021		March 28, 2020		(in thousands)	April 2, 2022		March 27, 2021
Additions to long-lived assets	Additions to long-lived assets					Additions to long-lived assets
United States	United States	$	683	$	580	United States	$	3,174	$	683
China	China	2,142		1,657		China	6,949		2,142
Mexico	Mexico	6,121		2,592		Mexico	7,918		6,121
Germany	Germany	593		753		Germany	918		593
Philippines	Philippines	2,443		3,218		Philippines	6,970		2,443
Other countries(a)	Other countries(a)	754		2,508		Other countries(a)	1,561		754
Total additions to long-lived assets	Total additions to long-lived assets	$	12,736	$	11,308	Total additions to long-lived assets	$	27,490	$	12,736

(a)Each country included in other countries is less than 10% of net sales.

16. Subsequent events

On April 8, 2022, the Company announced that it had entered into a definitive agreement to acquire C&K Switches (“C&K”) for $540 million in cash, subject to a working capital adjustment. Founded in 1928, C&K Switches is a leading designer and manufacturer of high-performance electromechanical switches and interconnect solutions with a strong global presence across a broad range of end markets, including industrial, transportation, aerospace, and datacom. At the time the Company and C&K entered into the definitive agreement, C&K had annualized sales of over $200 million. The business is headquartered in Waltham, Massachusetts, with facilities located around the world and will be reported as part of the Electronics-Passive Products and Sensors business within the Company's Electronics segment. The transaction is subject to customary closing conditions and regulatory approvals, and is expected to close during the second quarter of 2022. The Company expects to finance the transaction through a combination of cash on hand and debt.

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On April 12, 2022, the Company acquired Embed Ltd. (“Embed”). Founded in 2005, Embed is a proven provider of embedded software and firmware developed for a broad range of applications serving transportation end markets. The business is headquartered in Coventry, United Kingdom, and will be included in the Commercial Vehicle business within the Company's Transportation segment. The acquisition was funded with the Company’s cash on hand.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Cautionary Statement Regarding Forward-Looking Statements Under the Private Securities Litigation Reform Act of 1995 (“PSLRA”).

Certain statements in this section and other parts of this Quarterly Report on Form 10-Q may constitute "forward-looking statements" within the meaning of the federal securities laws and are entitled to the safe-harbor provisions of the PSLRA. These statements include statements regarding the Company’s future performance, as well as management's expectations, beliefs, intentions, plans, estimates or projections relating to the future. Such statements can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "estimates," "will," "should," "plans" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy, although not all forward-looking statements contain such terms. The Company cautions that forward-looking statements, which speak only as of the date they are made, are subject to risks, uncertainties and other factors, and actual results and outcomes may differ materially from those indicated or implied by the forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, risks and uncertainties relating to general economic conditions; the severity and duration of the coronavirus disease 2019 ("COVID-19") pandemic and the measures taken in response thereto and the effects of those items on the Company’s business; product demand and market acceptance; economic conditions; the impact of competitive products and pricing; product quality problems or product recalls; capacity and supply difficulties or constraints; coal mining exposures reserves; cybersecurity matters; failure of an indemnification for environmental liability; exchange rate fluctuations; commodity price fluctuations; the effect of the Company's accounting policies; labor disputes; restructuring costs in excess of expectations; pension plan asset returns less than assumed; uncertainties related to political or regulatory changes; integration of acquisitions may not be achieved in a timely manner, or at all; and other risks that may be detailed in Item 1A. "Risk Factors" of the Company's Annual Report on Form 10-K for the year ended ~~December 26, 2020,~~January 1, 2022, and the Company's other filings and submissions with the Securities and Exchange Commission. The Company does not undertake any obligation to update or revise any forward-looking statements to reflect future events or circumstances, new information or otherwise.

This report, including the Management’s Discussion and Analysis of Financial Condition and Results of Operations, should be read in conjunction with information provided in the consolidated financial statements and the related Notes thereto appearing in the Company's Annual Report on Form 10-K for the year ended ~~December 26, 2020.~~January 1, 2022.

Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is designed to provide information that is supplemental to, and should be read together with, the consolidated financial statements and the accompanying notes. Information in MD&A is intended to assist the reader in obtaining an understanding of (i) the consolidated financial statements, (ii) the changes in certain key items within those financial statements from year-to-year, (iii) the primary factors that contributed to those changes, and (iv) any changes in known trends or uncertainties that ~~we are~~the Company is aware of and that may have a material effect on future performance. In addition, MD&A provides information about the Company’s segments and how the results of those segments impact the results of operations and financial condition as a whole.

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Executive Overview

Founded in 1927, Littelfuse is an industrial technology manufacturing company empowering a sustainable, connected, and safer world. Across more than 15 countries, and with ~~12,000~~17,000 global associates, we partner with customers to design and deliver innovative, reliable solutions. Serving over 100,000 end customers, our products are found in a variety of industrial, transportation and electronics end markets – everywhere, every day.

The Company maintains a network of global laboratories and engineering centers that develop new products and product enhancements, provide customer application support and test products for safety, reliability, and regulatory compliance. The Company conducts its business through three reportable segments: Electronics, ~~Automotive,~~Transportation, and Industrial. Within these segments, the Company designs, manufactures and sells components and modules empowering a sustainable, connected, and safer world. Our products protect against electrostatic discharge, power surges, short circuits, voltage spikes and other harmful occurrences, safely and efficiently control power and improve productivity and are used to identify and detect temperature, proximity, flow speed and fluid level in various applications.

Executive Summary

For the first quarter of ~~2021,~~2022, the Company recognized net sales of ~~$463.8~~$623.3 million, an increase of $159.5 million, or 34.4% as compared to ~~$346.1~~$463.8 million in the first quarter of ~~2020 representing an increase of $117.7 million, or 34.0%.~~2021. The increase was primarily driven by higher volumes ~~across all businesses~~ in the Electronics and ~~Automotive~~Industrial segments ~~$16.7~~and $55.8 million or ~~3.6%~~12.0% of net sales from the ~~Hartland~~Carling acquisition within the ~~Industrial segment and $12.4 million or 3.6% of favorable changes in foreign exchange rates.~~Transportation segment. The Company recognized net income of $117.5 million, or $4.70 per diluted share, in the first quarter of 2022 compared to $57.7 million, or $2.32 per diluted share in the first quarter of ~~2021 compared to net income of $24.6 million, or $1.00 per diluted share in the first quarter of 2020.~~2021. The increase in net income reflects higher operating income of ~~$31.7~~$74.1 million ~~driven by a $23.3 million and $6.2 million~~primarily due to an increase in operating income of $65.1 million in the Electronics ~~and Automotive segments, respectively, increases of $9.7 million of unrealized gains associated with our equity investments partially offset by higher foreign exchange losses of $4.3 million.~~segment.

~~On January 28, 2021,~~Supply chain constraints, including transportation capacity shortages have and are expected to continue to impact the Company, ~~acquired Hartland Controls ("Hartland"), a manufacturer~~its suppliers and ~~leading supplier of electrical components used primarily~~its customers.This has resulted in ~~heating, ventilation, air conditioning (HVAC)~~higher transportation and ~~other industrial and control systems applications with annualized sales of approximately $70 million. The purchase price for Hartland was approximately $112.3 million and~~input costs incurred by the ~~operations of Hartland are included in the Industrial segment.~~Company.

Net cash provided by operating activities was $51.7 million for the three months ended April 2, 2022 as compared to $50.2 million for the three months ended March 27, ~~2021 as compared to $45.3 million for the three months ended March 28, 2020.~~2021. The slight increase in net cash provided by operating activities was primarily due to higher cash earnings, ~~partially~~largely offset by increases in working capital resulting from higher sales ~~growth.~~growth and higher annual incentive bonus payments made in 2022 as compared to 2021.

On April 8, 2022, the Company announced that it had entered into a definitive agreement to acquire C&K Switches (“C&K”) for $540 million in cash, subject to a working capital adjustment. Founded in 1928, C&K Switches is a leading designer and manufacturer of high-performance electromechanical switches and interconnect solutions with a strong global presence across a broad range of end markets, including industrial, transportation, aerospace, and datacom.At the time the Company and C&K entered into the definitive agreement, C&K had annualized sales of over $200 million. The business is headquartered in Waltham, Massachusetts, with facilities located around the world and will be reported as part of the Electronics-Passive Products and Sensors within the Company's Electronics Segment. The transaction is subject to customary closing conditions and regulatory approvals, and is expected to close during the second quarter of 2022. The Company expects to finance the transaction through a combination of cash on hand and debt.

Impact of COVID-19 on Business

The effects from COVID-19 continue to drive ~~increased~~higher ongoing costs ~~though lower than 2020 levels. Ongoing costs include~~including spending on personal protective equipment ("PPE"), additional personnel and employee transportation costs, and manufacturing inefficiencies as well as an increase in ~~freight~~material costs and transportation costs due to ~~the transportation capacity~~global supply chain and logistics constraints ~~across~~around the world.

During the first quarter of 2022, the Company's manufacturing facilities were operational and were generally running at normal capacity levels. However, the recent outbreak of COVID-19 in China in late March has resulted in the temporary shut-down of certain of the Company's China manufacturing facilities throughout April. The Company is focused on the safety and well-being of its employees and actively monitoring the current situation. The Company is not currently able to determine the duration of the temporary shut-down, the impact on its customers, suppliers and transportation in and out of China or the potential financial impact on the Company's 2022 financial results.

The Company anticipates that the ~~global health crisis~~disruptions caused by COVID-19 may continue to ~~negatively~~ impact its business activity for the foreseeable future. It is currently difficult to estimate the magnitude of the COVID-19 disruption, if future disruptions will occur due to a resurgence in COVID-19 cases and its impact on ~~our~~the Company's employees, customers, suppliers and vendors. The Company will continue to actively monitor the situation and may take further actions altering ~~our~~its business operations that ~~we determine~~the Company determines are in the best interests of ~~our~~its employees, customers, partners, suppliers, and other stakeholders, or as

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required by federal, state, or local authorities. It is not clear what the potential effects any such alterations or modifications may have on ~~our~~the Company's business and operations, including the effects on ~~our~~its customers, employees, and prospects, or on ~~our~~the Company's financial results for the fiscal year ~~2021.~~2022.

Risks Related to Market Conditions

The Company continues to operate in a more volatile macro environment given events related to the war in Ukraine. The company does not have any direct operations in Ukraine or Russia. The war has had a modest impact on the Company, including higher transportation costs due to the Company modifying its shipping logistics as well as suspending sales into and purchases from Russia. Additionally, the war has impacted certain OEM customers who have had lower production levels due to shut-downs and ongoing material shortages.

Results of Operations

The following table summarizes the Company’s unaudited condensed consolidated results of operations for the periods presented. The first quarter of 2022 includes $4.8 million of purchase accounting inventory step-up charges, $3.8 million of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, and $0.2 million of restructuring, impairment and other charges, primarily related to employee termination costs. See Note 7, Restructuring, Impairment, and Other Charges, for further discussion.

The first quarter of 2021 includes ~~$3.5~~$3.5 million of purchase accounting inventory step-up charges, $0.8 million of legal and professional fees and other integration expenses related to Hartland and other contemplated acquisitions and $0.4 million of

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restructuring, impairment and other charges, primarily related to employee termination costs. In addition, there was a gain of $1.9 million ~~gain~~ from the sale of a building within the Electronics segment.

The first quarter of 2020 includes $1.2 million of acquisition integration charges related to the IXYS acquisition and other contemplated acquisitions. In addition, there were $4.0 million of restructuring, impairment and other charges, primarily related to impairment charges of $2.2 million associated with the announced consolidation of a manufacturing facility within the Industrial segment and $1.7 million of employee termination costs and other restructuring charges.

First Quarter
(in thousands) 2021 2020 Change %
Change
Net sales $ 463,794 $ 346,096 $ 117,698 34.0 %
Cost of sales 303,328 221,740 81,588 36.8 %
Gross profit 160,466 124,356 36,110 29.0 %
Operating expenses 83,985 79,606 4,379 5.5 %
Operating income 76,481 44,750 31,731 70.9 %
Income before income taxes 72,708 35,499 37,209 104.8 %
Income taxes 14,995 10,855 4,140 38.1 %
Net income $ 57,713 $ 24,644 $ 33,069 134.2 %


	First Quarter
(in thousands)	2022		2021		Change		% Change
Net sales	$	623,330	$	463,794	$	159,536	34.4	%
Cost of sales	364,734		303,328		61,406		20.2	%
Gross profit	258,596		160,466		98,130		61.2	%
Operating expenses	108,006		83,985		24,021		28.6	%
Operating income	150,590		76,481		74,109		96.9	%
Income before income taxes	134,125		72,708		61,417		84.5	%
Income taxes	16,607		14,995		1,612		10.8	%
Net income	$	117,518	$	57,713	$	59,805	103.6	%

Net Sales

Net sales increased ~~$117.7~~$159.5 million, or ~~34.0%~~34.4%, including ~~$12.4~~$55.8 million or ~~3.6%~~12.0% from the Carling acquisition within the Transportation segment and $8.6 million or 1.9% of ~~favorable~~unfavorable changes in foreign exchange rates for the first quarter of ~~2021~~2022 compared to the first quarter of ~~2020.~~2021. The remaining increase was primarily ~~due to higher~~driven by growth across the Company's Electronics and Industrial segments, which had sales increases of ~~$72.3~~$79.3 million and ~~$23.8~~$24.3 million, ~~respectively, in the Electronics and Automotive segments driven by higher volumes across all businesses within these segments.~~respectively. The ~~volume~~ increase within the Electronics segment was led by ~~greater customer~~continued broad-based demand ~~for products~~across electronics, transportation and ~~devices for work-from-home and stay-at-home needs, and strong global automotive demand driving an~~industrial end markets. The increase for products used in automotive electronics and electric vehicles. The volume increase within the Automotive segment was due to stronger global auto and commercial vehicle market demand. The remaining increase in net sales was due to $16.7 million of net sales resulting from the Hartland acquisition included in the Industrial segment was driven across all businesses within the segment.

Cost of Sales

Cost of sales was $364.7 million, or 58.5% of net sales, in 2022, compared to $303.3 million, or 65.4% of net sales, in ~~2021, compared to $221.7 million, or 64.1% of net sales, in 2020.~~2021. The increase in cost of sales was primarily due to greater volume inacross the Electronics and ~~Automotive~~Industrial segments driven by the factors discussed above along with the acquisition of ~~Hartland.~~Carling. As a percent of net sales, cost of sales ~~increased 1.3%~~decreased 6.9% driven by volume leverage and favorable product mix predominantly in the Electronics segment, partially offset by higher ~~freight costs~~transportation, duty and tariff charges of ~~$7.3 million, or~~ 0.9%~~, the Hartland purchase accounting inventory charges of $3.5 million or 0.8%~~, and higher commodity ~~costs partially offset by cost reductions.~~

costs.

Gross Profit

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Gross profit was ~~$160.5~~$258.6 million, or ~~34.6%~~41.5% of net sales, in the first quarter of ~~2021~~2022 compared to ~~$124.4~~$160.5 million, or ~~35.9%~~34.6% of net sales, for the first quarter of ~~2020.~~2021. The ~~$36.1~~$98.1 million increase in gross profit was primarily due to higher volume in the Electronics ~~and Automotive segments.~~segment. The ~~decrease~~increase in gross margin of ~~1.3%~~6.9% was primarily ~~due to~~driven by volume leverage and favorable product mix within the Electronics segment and higher ~~freight costs of $7.3 million or 0.9%, the purchase accounting inventory charges of $3.5 million or 0.8%, higher commodity costs, and unfavorable price and foreign exchange~~prices, partially offset by higher ~~volumes within the Electronics~~transportation, duty and ~~Automotive segments.~~tariff charges as a percent of net sales of 0.9%, and higher commodity costs.

Operating Expenses

Total operating expenses were $108.0 million, or 17.3% of net sales, for the first quarter of 2022 compared to $84.0 million, or 18.1% of net sales, for the first quarter of ~~2021 compared to $79.6 million, or 23.0% of net sales, for the first quarter of 2020.~~2021. The increase in operating expenses of ~~$4.4~~$24.0 million was primarily due to the higher selling, general, and administrative expenses of ~~$7.1~~$17.2 million largely due to the Carling acquisition and increased acquisition-related expenses of $3.0 million, higher ~~accrued incentive compensation~~research and ~~the~~

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~~Hartland acquisition partially offset by a $1.9~~$4.8 million, ~~gain from~~and higher amortization expense of $2.2 million due to the ~~sale of a building within the Electronics segment. The increase in operating expenses was also partially offset by lower restructuring, impairment and other charges of $3.5 million.~~Carling acquisition.

Operating Income

Operating income was ~~$76.5~~$150.6 million, an increase of ~~$31.7~~$74.1 million, or ~~70.9%~~96.9%, for the first quarter of ~~2021~~2022 compared to ~~$44.8~~$76.5 million for the first quarter of ~~2020.~~2021. The increase in operating income was ~~primarily~~ due to higher gross profit from all segments, particularly in the Electronics ~~and Automotive segments.~~segment, partially offset by higher operating expenses as noted above. Operating margins increased from ~~12.9% in the first quarter of 2020 to~~ 16.5% in the first quarter of 2021 to 24.2% in the first quarter of 2022 driven by the factors mentioned above.

Income Before Income Taxes

Income before income taxes was $134.1 million, or 21.5% of net sales, for the first quarter of 2022 compared to $72.7 million, or 15.7% of net sales, for the first quarter of ~~2021 compared to $35.5 million, or 10.3% of net sales, for the first quarter of 2020.~~2021. In addition to the factors impacting comparative results for operating income discussed above, income before income taxes was primarily impacted by ~~increases of $9.7~~$4.7 million of unrealized ~~gains~~losses associated with ~~our~~the Company's equity ~~investments partially offset by~~investment in the first quarter of 2022 compared to unrealized gains of $7.5 million from the Company's equity investment in the first quarter of 2021, and higher foreign exchange losses of ~~$4.3~~$0.9 million.

Income Taxes

Income tax expense for the first quarter of ~~2021~~2022 was $16.6 million, or an effective tax rate of 12.4%, compared to $15.0 million, or an effective tax rate of 20.6%, ~~compared to income tax expense of $10.9 million, or an effective tax rate of 30.6%,~~ for the first quarter of ~~2020.~~2021. The effective tax rate for the first quarter of ~~2021~~2022 is lower than the effective tax rate for the comparable ~~2020~~2021 period, primarily due to ~~an increase~~a one-time deduction that resulted from the dissolution of one of the Company’s affiliates, which resulted in a net benefit of $7.2 million for the ~~forecasted income earned in lower tax jurisdictions in 2021 compared to 2020.~~first quarter of 2022. The effective tax rate for the 2022 period is lower than the applicable U.S. statutory tax rate due to the one-time deduction that resulted from the dissolution of one of the Company’s affiliates that is referred to in the preceding sentence, as well as the forecasted impact of income earned in lower tax jurisdictions. The effective tax rate for the comparable 2021 period is approximately the same as the applicable U.S. statutory tax rate.

Segment Results of Operations

The Company reports its operations by the following segments: Electronics, ~~Automotive~~Transportation and Industrial. Segment information is described more fully in Note 15, Segment Information, of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report.

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


		First Quarter								First Quarter
(in thousands)	(in thousands)	2021		2020		Change		% Change			(in thousands)	2022		2021		Change		% Change
Electronics	Electronics	$	286,535	$	214,189	$	72,346	33.8	%		Electronics	$	365,821	$	286,535	$	79,286	27.7	%
Automotive		128,529		104,770		23,759		22.7	%
Transportation											Transportation	184,504		128,529		55,975		43.6	%
Industrial	Industrial	48,730		27,137		21,593		79.6	%		Industrial	73,005		48,730		24,275		49.8	%
Total	Total	$	463,794	$	346,096	$	117,698	34.0	%		Total	$	623,330	$	463,794	$	159,536	34.4	%

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Electronics Segment

Net sales increased ~~$72.3~~$79.3 million, or ~~33.8%~~27.7%, in the first quarter of ~~2021~~2022 compared to the first quarter of ~~2020~~2021 and included ~~favorable~~unfavorable changes in foreign exchange rates of ~~$6.5~~$4.8 million. The sales increase was primarily due to increased volume for the semiconductor and electronics products ~~and semiconductor~~ businesses of ~~$47.8~~$41.8 million and ~~$24.5~~$37.5 million, ~~respectively. The volume increases were~~respectively, led by ~~greater customer~~continued broad-based demand ~~for products~~across electronics, transportation and devices for work-from-home and stay-at-home needs, and strong global automotive demand driving an increase for products used in automotive electronics and electric vehicles. The first quarter of 2020 also included production disruptions due to the impact of COVID-19. industrial end markets.

~~Automotive~~Transportation Segment

Net sales increased ~~$23.8~~$56.0 million, or ~~22.7%~~43.6%, in the first quarter of ~~2021~~2022 compared to the first quarter of ~~2020~~2021 and included ~~favorable~~unfavorable changes in foreign exchange rates of ~~$5.6~~$3.6 million. The sales increase was primarily due to ~~higher volume~~the acquisition of Carling which contributed net sales of $55.8 million. Net sales in the commercial vehicle business increased by $61.5 million, largely due to the Carling acquisition noted previously and continued demand across a number of commercial vehicle end markets. The passenger car products ~~commercial vehicle products,~~ and ~~the~~ automotive sensors ~~business~~businesses had sales decreases of ~~$15.3 million, $4.4~~$3.4 million and ~~$4.1~~$2.1 million,

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~~respectively. These increases were due to stronger global auto and commercial vehicle market demand. Our Asia region experienced the most growth~~ respectively, driven by ~~an increase~~a decline in global ~~auto market demand as~~car build compared to the ~~first~~same quarter ~~of 2020 that had production disruptions~~last year largely due to ~~the impact~~supply chain constraints and OEM shut downs caused by market shortages of ~~COVID-19. Sales also grew~~semiconductor chips as well as a reduction of demand in Europe due to ~~the launch of new products~~Ukraine/Russia conflict partially offset by greater content growth from vehicle mix and ~~higher content per vehicle.~~electric vehicles.

Industrial Segment

Net sales increased by ~~$21.6~~$24.3 million, or ~~79.6%~~49.8%, in the first quarter of ~~2021~~2022 compared to the first quarter of ~~2020,~~2021, which included ~~favorable~~unfavorable changes in foreign exchange rates of ~~$0.3~~$0.2 million. The increase in net sales was primarily due to higher volume and demand across product lines in industrial safety, HVAC, renewables, nonresidential construction, and industrial maintenance, repair, and operations end markets and incremental net sales of ~~$16.7~~$9.1 million or ~~61.5%~~18.6% from the Hartland acquisition, higher volume of $4.5 million in the power fuse business, and the transfer of the temperature sensor product line totaling $1.9 million which was previously reported in the Electronics segment, partially offset by lower volume in the relay business.acquisition.

Geographic Net Sales Information

Net sales by geography represent net sales to customer or distributor locations. The following table is a summary of the Company’s net sales by geography:


		First Quarter								First Quarter
(in thousands)	(in thousands)	2021		2020		Change		% Change			(in thousands)	2022		2021		Change		% Change
Asia-Pacific	Asia-Pacific	$	212,185	$	140,873	$	71,312	50.6	%		Asia-Pacific	$	260,218	$	212,185	$	48,033	22.6	%
Americas	Americas	152,906		120,501		32,405		26.9	%		Americas	237,230		152,906		84,324		55.1	%
Europe	Europe	98,703		84,722		13,981		16.5	%		Europe	125,882		98,703		27,179		27.5	%
Total	Total	$	463,794	$	346,096	$	117,698	34.0	%		Total	$	623,330	$	463,794	$	159,536	34.4	%

Asia-Pacific

Net sales increased ~~$71.3~~$48.0 million, or ~~50.6%~~22.6%, in the first quarter of ~~2021~~2022 compared to the first quarter of ~~2020~~2021 and included ~~favorable~~unfavorable changes in foreign exchange rates of ~~$4.2~~$1.1 million. The increase in net sales was primarily due to higher volume across all businesses within the Electronics segment and ~~Automotive segments,~~incremental sales from the Carling acquisition included in the commercial vehicle products business within the Transportation segment compared to the first quarter of ~~2020 that had production disruptions due to the impact of COVID-19.~~2021.

Americas

Net sales increased ~~$32.4~~$84.3 million, or ~~26.9%~~55.1%, in the first quarter of ~~2021~~2022 compared to the first quarter of ~~2020~~2021 and included ~~favorable~~unfavorable changes in foreign exchange rates of $0.1 million. The increase in net sales was primarily due to incremental sales ~~of $16.7 million~~ from the ~~Hartland~~Carling acquisition included in the commercial vehicle products business within the Transportation segment and higher volume from all businesses within the Electronics and Industrial segments compared to the first quarter of 2021.

Europe

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Net sales increased $27.2 million, or 27.5%, in the first quarter of 2022 compared to the first quarter of 2021 and included unfavorable changes in foreign exchange rates of $7.4 million. The increase in net sales was primarily due to increased volume across all businesses within the Electronics segment and ~~higher volume~~incremental sales from the Carling acquisition included in the ~~passenger car products and~~ commercial vehicle ~~businesses~~products business within the ~~Automotive segment.~~

~~Europe~~

~~Net sales increased $14.0 million, or 16.5%, in the first quarter of 2021~~Transportation segment compared to the first quarter of 2020. The increase in net sales was primarily due to favorable changes in foreign exchange rates of $8.1 million and increased volume across all businesses within the Automotive segment and Electronics products business within the Electronics segment, partially offset by lower volume in the semiconductor business within the Electronics segment.2021.

Liquidity and Capital Resources

The Company has historically supported its liquidity needs through cash flows from operations. 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.

~~Table~~ ~~of Contents~~

Cash and cash equivalents were ~~$572.8~~$461.6 million as of ~~March 27, 2021,~~April 2, 2022, a decrease of ~~$114.8~~$16.9 million as compared to ~~December 26, 2020.~~January 1, 2022. As of ~~March 27, 2021, $306.6~~April 2, 2022, $145.3 million of the Company's ~~$572.8~~$461.6 million cash and cash equivalents was held by U.S. subsidiaries.

Revolving Credit Facility

As of ~~March 27, 2021,~~April 2, 2022, the Company had no amount outstanding in letters of credit and had available ~~$571.3~~$600.0 million of borrowing capacity under the Revolving Credit ~~Facility based on financial covenants.~~Facility. At ~~March 27, 2021,~~April 2, 2022, the Company was in compliance with all covenants under the Credit Agreement.

Senior Notes

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. The funding date for the Euro denominated senior notes occurred on December 8, 2016 for €117 million in aggregate amount of 1.14% Senior Notes, Series A, due December 8, 2023 (“Euro Senior Notes, Series A due 2023”), and €95 million in aggregate amount of 1.83% Senior Notes, Series B due December 8, 2028 (“Euro Senior Notes, Series B due 2028”) (together, the “Euro Senior Notes”). Interest on the Euro Senior Notes is payable semiannually on June 8 and December 8, commencing June 8, 2017.

On December 8, 2016, the Company entered into a Note Purchase Agreement, pursuant to which the Company issued and sold $125 million aggregate principal amount of senior notes in two series. On February 15, 2017, $25 million in aggregate principal amount of 3.03% Senior Notes, Series A, due February 15, 2022 (“U.S. Senior Notes, Series A due 2022”), and $100 million in aggregate principal amount of 3.74% Senior Notes, Series B, due February 15, 2027 (“U.S. Senior Notes, Series B due 2027”) (together, the “U.S. Senior Notes due 2022 and 2027”) were funded. Interest on the U.S. Senior Notes due 2022 and 2027 is payable semiannually on February 15 and August 15, commencing August 15, 2017. During the three months ended April 2, 2022, the Company paid $25.0 million of U.S. Senior Notes, Series A due on February 15, 2022.

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(together the “U.S. Senior Notes due 2025 and 2030” and with the Euro Senior Notes and the U.S. Senior Notes due 2022 and 2027, the “Senior Notes”) were funded. Interest on the U.S. Senior Notes due 2025 and 2030 is payable semiannually on February 15 and August 15, commencing on August 15, 2018. ~~Further information regarding the Company’s Senior Notes is provided in Note 8,~~ ~~Debt, of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report.~~

Debt Covenants

The Company was in compliance with all covenants under the Credit Agreement and Senior Notes as of ~~March 27, 2021~~April 2, 2022 and currently expects to remain in compliance based on management’s estimates of operating and financial results for ~~2021.~~2022. As of ~~March 27, 2021,~~April 2, 2022, 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.

~~Table~~ ~~of Contents~~

Acquisitions

On ~~January 28, 2021,~~April 8, 2022, the Company ~~acquired Hartland Controls ("Hartland"),~~announced that it had entered into a definitive agreement to acquire C&K Switches for $540 million in cash, subject to a working capital adjustment. Founded in 1928, C&K Switches is a leading designer and manufacturer of high-performance electromechanical switches and ~~leading supplier~~interconnect solutions with a strong global presence across a broad range of ~~electrical components used primarily in heating, ventilation, air conditioning (HVAC)~~end markets, including industrial, transportation, aerospace, and ~~other industrial~~datacom. At the time the Company and ~~control systems applications with~~C&K entered into the definitive agreement, C&K had annualized sales of ~~approximately $70~~over $200 million. The ~~purchase price for Hartland was approximately $112.3 million~~business is headquartered in Waltham, Massachusetts, with facilities located around the world and will be reported as part of the ~~operations of Hartland Controls are included in the Industrial segment. The net cash payment of $109.9 million for this acquisition was funded by~~Electronics-Passive Products and Sensors within the Company's Electronics Segment. The transaction is subject to customary closing conditions and regulatory approvals, and is expected to close during the second quarter of 2022. The Company expects to finance the transaction through a combination of cash on ~~hand.~~hand and debt.

Dividends

During the first quarter of ~~2020~~2022 the Company paid quarterly dividends of ~~$11.8~~$13.1 million to the shareholders. On April 28, ~~2021,~~2022, the Board of Directors of the Company declared a quarterly cash dividend of ~~$0.48~~$0.53 per share, payable on June ~~3, 2021~~9, 2022 to stockholders of record as of May ~~20, 2021.~~

~~U.K. pension plan~~

On April 7, 2020, the Company entered into a definitive agreement to purchase a group annuity contract, under which an insurance company will be required to directly pay and administer pension payments to certain of the Company’s U.K. pension plan participants, or their designated beneficiaries. The purchase of this group annuity contract will reduce the Company’s outstanding pension benefit obligation by approximately $55 million, representing approximately 37% of the total obligations of the Company’s qualified pension plans, and will be funded with pension plan assets and additional cash on hand. In connection with this transaction, the Company will record a one-time non-cash settlement charge currently estimated between $18 million and $22 million in the fourth quarter of 2021, reflecting the accelerated recognition of unamortized actuarial losses in the plan. The actual amount and timing of the settlement charge could differ from this estimate due to final data and plan wind-up expenses. Due to the signing of the group annuity contract being a significant change in the U.K. pension plan, the liabilities of the plan were remeasured as of April 6, 2020 resulting in an increase of $13.4 million (£10.9 million) to both the net pension liability and unamortized actuarial loss within other comprehensive income (loss) during the second quarter of 2020. Additionally, the Company made a cash contribution of $10.4 million (£8.4 million) under this agreement during the second quarter of 2020.

26, 2022.

Cash Flow Overview


		First three Months					First three Months
(in thousands)	(in thousands)	2021		2020		(in thousands)	2022		2021
Net cash provided by operating activities	Net cash provided by operating activities	$	50,166	$	45,279	Net cash provided by operating activities	$	51,731	$	50,166
Net cash used in investing activities	Net cash used in investing activities	(122,020)		(16,536)		Net cash used in investing activities	(29,788)		(122,020)
Net cash (used in) provided by financing activities		(34,273)		65,804
Net cash used in financing activities						Net cash used in financing activities	(37,070)		(34,273)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(4,101)		(5,111)		Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(2,738)		(4,101)
(Decrease) increase in cash, cash equivalents, and restricted cash		(110,228)		89,436
Decrease in cash, cash equivalents, and restricted cash						Decrease in cash, cash equivalents, and restricted cash	(17,865)		(110,228)
Cash, cash equivalents, and restricted cash at beginning of period	Cash, cash equivalents, and restricted cash at beginning of period	687,525		531,139		Cash, cash equivalents, and restricted cash at beginning of period	482,836		687,525
Cash, cash equivalents, and restricted cash at end of period	Cash, cash equivalents, and restricted cash at end of period	$	577,297	$	620,575	Cash, cash equivalents, and restricted cash at end of period	$	464,971	$	577,297

Cash Flow from Operating Activities

Operating cash inflows are largely attributable to sales of the Company’s products. 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 $51.7 million for the three months ended April 2, 2022 as compared to $50.2 million for the three months ended March 27, ~~2021 as compared to $45.3 million for the three months ended March 28, 2020.~~2021. The slight increase in net cash provided by operating activities was primarily due to higher cash earnings, ~~partially~~largely offset by increases in working capital resulting from higher sales ~~growth.~~ growth and higher annual incentive bonus payments made in 2022 as compared to 2021.

Cash Flow from Investing Activities

Net cash used in investing activities was $29.8 million for the three months ended April 2, 2022 compared to $122.0 million during the three months ended March 27, 2021. Net cash paid for acquisitions was $109.9 million for the three months ended March 27, ~~2021 compared to $16.5 million during the three months ended March 28, 2020. Net cash paid for the Hartland acquisition was $109.9 million for the three~~

~~Table~~ ~~of Contents~~

~~months ended March 27,~~ 2021. Capital expenditures were ~~$14.7~~$29.8 million, representing ~~a decrease~~an increase of ~~$1.9~~$15.1 million compared to ~~2020.~~2021. During the three months ended March ~~28, 2020,~~27, 2021, the Company received proceeds of $2.6 million from the sale of a property within the Electronics segment.

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Cash Flow from Financing Activities

Net cash used in financing activities was $37.1 million for the three months ended April 2, 2022 compared to $34.3 million for the three months ended March 27, ~~2021 compared to net cash provided by financing activities~~2021. During the three months ended April 2, 2022, the Company paid $25.0 million of ~~$65.8 million for~~U.S. Senior Notes, Series A due on February 15, 2022. During the three months ended March ~~28, 2020. The~~27, 2021, the Company made payments of $30.0 million on the amended revolving credit facility during the first quarter of 2021. During the three months ended March 28, 2020, the Company made principal payments of $2.5 million on the term loan and borrowed $100.0 million from its revolving credit facility to preserve financial flexibility and enhance liquidity, given the increasing levels of uncertainty related to COVID-19. For the three months ended March 28, 2020, the Company repurchased 175,110 shares of its common stock totaling $22.9 million.facility. Additionally, the Company paid dividends ~~$11.8~~$13.1 million and ~~$11.7~~$11.8 million in the three months ended April 2, 2022 and March 27, 2021, ~~and March 28, 2020,~~ respectively.

Share Repurchase Program

The Company did not repurchase any shares of its common stock for the three months ended April 2, 2022, and March 27, 2021. ~~During the three months ended March 28, 2020, the Company repurchased 175,110 shares of its common stock totaling $22.9 million.~~

Off-Balance Sheet Arrangements

As of ~~March 27, 2021,~~April 2, 2022, 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. The Company does not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities.

Critical Accounting Policies and Estimates

The Company’s Condensed Consolidated Financial Statements are prepared in accordance with U.S. GAAP. In connection with the preparation of the Condensed Consolidated Financial Statements, the Company uses estimates and makes judgments and assumptions about future events that affect the reported amounts of assets, liabilities, revenue, expenses, and the related disclosures. The assumptions, estimates, and judgments are based on historical experience, current trends, and other factors the Company believes are relevant at the time it prepares the Condensed Consolidated Financial Statements.

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 26, 2020.~~January 1, 2022. During the three months ended ~~March 27, 2021,~~April 2, 2022, there were no significant changes in the application of critical accounting policies.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

See Item 7A, Quantitative and Qualitative Disclosures about Market Risk, of ~~our~~the Company's Annual Report on Form 10-K for the year ended ~~December 26, 2020.~~January 1, 2022. During the three months ended ~~March 27, 2021,~~April 2, 2022, there have been no material changes in ~~our~~the Company's exposure to market risk.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

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Disclosure controls and procedures (as defined in Rules 13a-15(b) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to management, including ~~our~~the Company's Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

In connection with the preparation of this report, management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of ~~our~~the

Table of Contents

Company's disclosure controls and procedures as of ~~March 27, 2021.~~April 2, 2022. Based on that evaluation, ~~our~~the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the quarter ended ~~March 27, 2021, our~~April 2, 2022, the Company's disclosure controls and procedures were effective.

(b) Changes in Internal Control over Financial Reporting

~~There~~During the first quarter of 2022, the Company implemented a new consolidation and financial reporting software package to enhance the Company’s worldwide consolidation function. In connection with this implementation, the Company has modified the design, operation and documentation of its internal control processes impacted by the new software. Except as noted previously, there were no other changes in ~~our~~the Company's internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(f) and 15d-15(f) under the Exchange Act that occurred during the quarter ended ~~March 27, 2021~~April 2, 2022 that have materially affected, or are reasonably likely to materially affect, ~~our~~the Company's internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

There have been no material changes in ~~our~~the Company's risk factors from those disclosed in ~~our~~the Company's Annual Report on Form 10-K for ~~our~~its year ended ~~December 26, 2020.~~January 1, 2022.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Securities

None.

Purchases of Equity Securities

On April 26, 2019, the Company's Board of Directors authorized a program to repurchase up to 1,000,000 shares of the Company's common stock for the period May 1, 2019 to April 30, 2020 ("2019 program"). On April 29, 2020, the Company announced that the Board of Directors authorized a new program to repurchase up to 1,000,000 shares of the Company's common stock for the period May 1, 2020 to April 30, 2021 (the "2020 program") to replace its previous expired 2019 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 not repurchase any shares of its common stock for the three months ended April 2, 2022 and March 27, 2021. ~~During the three months ended March 28, 2020, the Company repurchased 175,110 shares of its common stock totaling $22.9 million.~~

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

~~Table~~ ~~of Contents~~

ITEM 5. OTHER INFORMATION

None.

Table of Contents

ITEM 6. EXHIBITS


			Exhibit			Description






			10.12.1**			~~Hartland Credit~~Sale and Purchase Agreement, ~~Joinder Agreement~~dated April 7, 2022, by and between Cayman NIH VI BEIT Holdings, L.P. and Littelfuse, Inc. (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed April 8, 2022, Commission File No. 20388). ).

			10.22.2**			~~Subsidiary Guarantor Supplement (Domestic NPA) - Hartland Subsidiaries~~

			10.3*			~~Subsidiary Guarantor Supplement (Cross-Border NPA) - Hartland Subsidiaries~~

			10.4*			~~Subsidiary Guarantor Supplement (Fall 2017 NPA) - Hartland Subsidiaries~~Warranty Deed, dated April 7, 2022, by and between the warrantors party thereto and Littelfuse, Inc. (filed as Exhibit 2.2 to the Company’s Current Report on Form 8-K filed April 8, 2022, Commission File No. 20388).

			31.1*			Certification of David W. Heinzmann, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

			31.2*			Certification of Meenal A. Sethna, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

			32.1**			Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

			101			The following financial information from LITTELFUSE, Inc.'s Quarterly Report on Form 10-Q for the quarter ended ~~March 27, 2021~~April 2, 2022 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Net Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Stockholders' Equity , (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to the Condensed Consolidated Financial Statements.

			104			The cover page from this Quarterly Report on Form 10-Q for the quarter ended ~~March 27, 2021,~~April 2, 2022, formatted in Inline XBRL.


			*			Filed herewith.
			**			Furnished herewith.
			***			Annexes, exhibits and/or schedules omitted pursuant to Item 601(b)(2) of Regulation S-K. Littelfuse agrees to furnish a supplemental copy of an omitted annex, exhibit or schedule to the SEC on a confidential basis upon request

3436

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q for the quarter ended ~~March 27, 2021,~~April 2, 2022, to be signed on its behalf by the undersigned thereunto duly authorized.


	Littelfuse, Inc.

	By:	/s/ Meenal A. Sethna
		Meenal A. Sethna
	Executive Vice President and Chief Financial Officer

Date: ~~April 28, 2021~~May 4, 2022	By:	/s/ Jeffrey G. Gorski
		Jeffrey G. Gorski
	Vice President and Chief Accounting Officer

3537


	As of March 27, 2021
(in thousands)	Gross Carrying Value		Accumulated Amortization		Net Book Value
Land use rights	$	10,251	$	2,051	$	8,200
Patents, licenses and software	142,732		94,636		48,096
Distribution network	43,704		39,307		4,397
Customer relationships, trademarks, and tradenames	400,253		143,652		256,601

Total	$	596,940	$	279,646	$	317,294


	As of December 26, 2020
(in thousands)	Gross Carrying Value		Accumulated Amortization		Net Book Value
Land use rights	$	10,280	$	2,007	$	8,273
Patents, licenses and software	137,210		92,868		44,342
Distribution network	43,910		38,980		4,930
Customer relationships, trademarks, and tradenames	372,064		137,722		234,342
Total	$	563,464	$	271,577	$	291,887


(in thousands)	Weighted Average Useful Life	Amount
Patents, licenses and software	9.2	$	7,559

Customer relationships, trademarks, and tradenames	13.7	32,101
Total	0	$	39,660


(in thousands)	Three Months Ended March 27, 2021						Three Months Ended March 28, 2020
	Pre-tax		Tax		Net of Tax		Pre-tax		Tax		Net of Tax
Defined benefit pension plan and other adjustments	$	506	$	52	$	454	$	555	$	(6)	$	561

Foreign currency translation adjustments	(5,325)		0		(5,325)		(15,540)		0		(15,540)
Total change in other comprehensive income (loss)	$	(4,819)	$	52	$	(4,871)	$	(14,985)	$	(6)	$	(14,979)