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 ~~28, 2020~~27, 2021



☐			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~~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 ☒ 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 ~~24, 2020,~~23, 2021, the registrant had outstanding ~~24,276,841~~24,555,229 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 ~~28, 2020~~27, 2021 (unaudited) and December ~~28, 2019~~26, 2020	3
	Condensed Consolidated Statements of Net Income for the three months ended March ~~28, 2020~~27, 2021 (unaudited) and March ~~30, 2019~~28, 2020 (unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income for the three months ended March ~~28, 2020~~27, 2021 (unaudited) and March ~~30, 2019~~28, 2020 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the three months ended March ~~28, 2020~~27, 2021 (unaudited) and March ~~30, 2019~~28, 2020 (unaudited)	6
	Condensed Consolidated Statements of Stockholders' Equity for the three months ended March ~~28, 2020~~27, 2021 (unaudited) and March ~~30, 2019~~28, 2020 (unaudited)	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2625
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3532
Item 4.	Controls and Procedures	3532
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	3633
Item 1A.	Risk Factors	3633
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3633
Item 3.	Defaults Upon Senior Securities	3733
Item 4.	Mine Safety Disclosures	3733
Item 5.	Other Information	3734
Item 6.	Exhibits	3734
Signatures		3935

Table of Contents

LITTELFUSE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


	(Unaudited)							(Unaudited)
(in thousands)	March 28, 2020			December 28, 2019			(in thousands)	March 27, 2021		December 26, 2020
ASSETS							ASSETS
Current assets:							Current assets:
Cash and cash equivalents	$	620,575		$	531,139		Cash and cash equivalents	$	572,771	$	687,525
Short-term investments	43			44			Short-term investments	53		54
Trade receivables, less allowances of $37,482 and $42,043 at March 28, 2020 and December 28, 2019, respectively	207,912			202,309
Trade receivables, less allowances of $42,624 and $45,237 at March 27, 2021 and December 26, 2020, respectively							Trade receivables, less allowances of $42,624 and $45,237 at March 27, 2021 and December 26, 2020, respectively	276,687		232,760
Inventories	227,282			237,507			Inventories	295,057		258,002
Prepaid income taxes and income taxes receivable	4,253			4,831			Prepaid income taxes and income taxes receivable	4,146		3,029
Prepaid expenses and other current assets	32,418			28,564			Prepaid expenses and other current assets	43,698		35,939
Total current assets	1,092,483			1,004,394			Total current assets	1,192,412		1,217,309

Net property, plant, and equipment	334,829			344,617			Net property, plant, and equipment	344,914		344,178
Intangible assets, net of amortization	308,393			321,247			Intangible assets, net of amortization	317,294		291,887
Goodwill	812,763			820,589			Goodwill	845,586		816,812
Investments	21,248			24,099			Investments	37,285		30,547
Deferred income taxes	7,608			8,069			Deferred income taxes	9,854		11,224
Right of use lease assets, net	20,611			21,918			Right of use lease assets, net	19,560		17,615
Other assets	14,694			14,965			Other assets	19,965		18,021
Total assets	$	2,612,629		$	2,559,898		Total assets	$	2,786,870	$	2,747,593
LIABILITIES AND EQUITY							LIABILITIES AND EQUITY
Current liabilities:							Current liabilities:
Accounts payable	$	106,796		$	117,320		Accounts payable	$	179,723	$	145,984

Accrued liabilities	73,512			84,120			Accrued liabilities	98,354		110,478
Accrued income taxes	17,907			14,122			Accrued income taxes	23,468		19,186
Current portion of long-term debt	10,000			10,000			Current portion of long-term debt	25,000		0
Total current liabilities	208,215			225,562			Total current liabilities	326,545		275,648
Long-term debt, less current portion	764,195			669,158			Long-term debt, less current portion	623,865		687,034
Deferred income taxes	49,698			49,763			Deferred income taxes	51,229		50,134
Accrued post-retirement benefits	35,904			38,198			Accrued post-retirement benefits	42,894		45,802
Non-current operating lease liabilities	15,960			17,166			Non-current operating lease liabilities	14,190		12,950
Other long-term liabilities	61,709			64,037			Other long-term liabilities	67,410		67,252
Shareholders’ equity:							Shareholders’ equity:
Common stock, par value $0.01 per share: 34,000,000 shares authorized; shares issued, March 28, 2020–25,902,213; December 28, 2019–25,855,203	256			256
Treasury stock, at cost: 1,626,357 and 1,473,901 shares, respectively	(239,817		)	(216,447		)
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							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
Additional paid-in capital	874,360			867,996			Additional paid-in capital	918,762		907,858
Treasury stock, at cost: 1,644,283 and 1,644,283 shares, respectively							Treasury stock, at cost: 1,644,283 and 1,644,283 shares, respectively	(242,366)		(242,366)
Accumulated other comprehensive loss	(121,802		)	(106,823		)	Accumulated other comprehensive loss	(96,028)		(91,157)
Retained earnings	963,820			950,901			Retained earnings	1,079,979		1,034,048
Littelfuse, Inc. shareholders’ equity	1,476,817			1,495,883			Littelfuse, Inc. shareholders’ equity	1,660,606		1,608,642
Non-controlling interest	131			131			Non-controlling interest	131		131
Total equity	1,476,948			1,496,014			Total equity	1,660,737		1,608,773
Total liabilities and equity	$	2,612,629		$	2,559,898		Total liabilities and equity	$	2,786,870	$	2,747,593

See accompanying Notes to Condensed Consolidated Financial Statements.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


	Littelfuse, Inc. Shareholders’ Equity
(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
Net income	—		—		—		—		24,644		—		24,644



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

Withheld shares on restricted share units for withholding taxes	—		—		(443)		—		—		—		(443)
Stock options exercised	—		3,399		—		—		—		—		3,399
Repurchases of common stock	—		—		(22,927)		—		—		—		(22,927)

Cash dividends paid ($0.48 per share)	—		—		—		—		(11,725)		—		(11,725)
Balance at March 28, 2020	$	256	$	874,360	$	(239,817)	$	(121,802)	$	963,820	$	131	$	1,476,948

Littelfuse, Inc. Shareholders’ Equity
(in thousands, except share and per share data) Common Stock Addl. Paid in Capital Treasury Stock Accum. Other Comp. Inc. (Loss) Retained Earnings Non-controlling Interest Total
Balance at December 29, 2018 $ 254
$ 835,828
$ (116,454 ) $ (97,924 ) $ 856,507
$ 131
$ 1,478,342
Net income —
—
—
—
36,989
—
36,989
Other comprehensive loss, net of tax —
—
—
8,073
—
—
8,073
Stock-based compensation —
3,966
—
—
—
—
3,966
Withheld shares on restricted share units for withholding taxes —
—
(94 ) —
—
—
(94 )
Stock options exercised —
2,292
—
—
—
—
2,292
Repurchases of common stock —
—
(13,555 ) —
—
—
(13,555 )
Cash dividends paid ($0.43 per share) —
—
—
—
(10,625 ) —
(10,625 )
Balance at March 30, 2019 $ 254
$ 842,086
$ (130,103 ) $ (89,851 ) $ 882,871
$ 131
$ 1,505,388

See accompanying Notes to Condensed Consolidated Financial Statements.

Notes to Condensed Consolidated Financial Statements

1. Summary of Significant Accounting Policies and Other Information

Nature of Operations

Founded in 1927, Littelfuse ~~Inc.~~is an industrial technology manufacturing company empowering a sustainable, connected, and ~~subsidiaries (the “Company”) is a~~safer world. Across more than 15 countries, and with 12,000 global ~~manufacturer of leading technologies in circuit protection, power control~~associates, we partner with customers to design and ~~sensing.~~deliver innovative, reliable solutions. Serving over 100,000 end customers, ~~the Company’s~~our products are found in ~~automotive~~a variety of industrial, transportation and ~~commercial vehicles, industrial applications, data and telecommunications, medical devices, consumer~~ electronics and appliances. With its broad product portfolio of fuses, semiconductors, polymers, ceramics, relays and sensors, and extensive global infrastructure, the Company’s worldwide associates partner with its customers to design, manufacture and deliver innovative, high-quality solutions for a safer, greener and increasingly connected world.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 ~~28, 2019~~26, 2020 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 Disaggregation

The following tables disaggregate the Company’s revenue by primary business units for the three months ended March ~~28, 2020~~27, 2021 and March ~~30, 2019:~~28, 2020:

Three Months Ended March 28, 2020
(in thousands)
Electronics
Segment

Automotive
Segment

Industrial
Segment

Total
Electronics – Passive Products and Sensors $ 84,598
$ —
$ —
$ 84,598
Electronics – Semiconductor 129,591
—
—
129,591
Passenger Car Products —
52,645
—
52,645
Automotive Sensors —
24,174
—
24,174
Commercial Vehicle Products —
27,951
—
27,951
Industrial Products —
—
27,137
27,137
Total $ 214,189

$ 104,770

$ 27,137

$ 346,096

Three Months Ended March 30, 2019
(in thousands)
Electronics
Segment

Automotive
Segment

Industrial
Segment

Total
Electronics – Passive Products and Sensors $ 108,377
$ —
$ —
$ 108,377
Electronics – Semiconductor 157,017
—
—
157,017
Passenger Car Products —
56,543
—
56,543
Automotive Sensors —
26,057
—
26,057
Commercial Vehicle Products —
30,883
—
30,883
Industrial Products —
—
26,623
26,623
Total $ 265,394
$ 113,483
$ 26,623
$ 405,500


	Three Months Ended March 28, 2020
(in thousands)	Electronics Segment		Automotive Segment		Industrial Segment		Total
Electronics – Passive Products and Sensors	$	84,598	$	0	$	0	$	84,598
Electronics – Semiconductor	129,591		0		0		129,591
Passenger Car Products	0		52,645		0		52,645
Automotive Sensors	0		24,174		0		24,174
Commercial Vehicle Products	0		27,951		0		27,951
Industrial Products	0		0		27,137		27,137
Total	$	214,189	$	104,770	$	27,137	$	346,096

See Note ~~16,~~15, Segment Information for net sales by segment and countries.

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.

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.

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.

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 and December 26, 2020 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)	March 27, 2021		December 26, 2020
Cash and cash equivalents	$	572,771	$	687,525
Restricted cash included in prepaid expenses and other current assets	3,462		0
Restricted cash included in other assets	1,064		$	0
Total cash, cash equivalents and restricted cash	$	577,297	$	687,525

Recently Adopted Accounting Standards

In ~~June 2016,~~December 2019, the ~~FASB~~Financial Accounting Standards Board (FASB) issued ASU No. ~~2016-13, "Financial Instruments~~2019-12, "Income Taxes (Topic 740) - ~~Credit Losses (Topic 326), Measurement~~Simplifying the Accounting for Income Taxes" as part of ~~Credit Losses on Financial Instruments."~~its initiative to reduce complexity in the accounting standards. The ~~standard modifies the measurement approach~~guidance is effective for credit losses on financial instruments, including trade receivables, from an incurred loss method to a current expected credit loss method ("CECL"). The standard requires the measurement of expected credit losses to be based on relevant information, including historical experiences, current conditions and a forecast that is supportable. The Company adopted the new standard onfiscal years beginning after December ~~29, 2019. The~~15, 2020 with early adoption ~~of the standard did not have a material effect on our Condensed Consolidated Financial Statements.~~

The Company accounts for acquisitions using the ~~FASB issued ASU No. 2018-15, "Intangibles - Goodwill~~acquisition method in accordance with ASC 805, “Business Combinations,” in which assets acquired and ~~Other - Internal-Use Software (Subtopic: 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus~~liabilities assumed are recorded at fair value as of the ~~FASB Emerging Issues Task Force)." ASU 2018-15 aligns~~date of acquisition. The operating results of the ~~requirements~~acquired business are included in the Company’s Consolidated Financial Statements from the date of the acquisition.

The total purchase consideration of $109.9 million, net of cash, cash equivalents, and restricted cash has been allocated, on a ~~hosting arrangement~~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, 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 isare not yet finalized relate to the completion of the valuations of certain acquired income tax assets and liabilities. As a ~~service contract~~result, these allocations are subject to change during the purchase price allocation period as the valuations are finalized.

The following table summarizes the 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
Allocation of consideration to assets acquired and liabilities assumed:
Trade receivables, net	14,305
Inventories	36,306
Other current assets	2,384
Property, plant, and equipment	6,296
Intangible assets	39,660
Goodwill	38,929
Other non-current assets	3,542
Current liabilities	(25,024)
Other non-current liabilities	(6,546)
	$	109,852

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 ~~requirements~~Company’s existing industrial products portfolio. Goodwill resulting from the Hartland acquisition is not expected to be deductible for ~~capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license).~~ 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 ~~adopted~~recorded a $6.8 million step-up of inventory to its fair value as of the ~~new standard~~acquisition date based on the preliminary valuation. The step-up is being amortized as a non-cash charge to cost of goods sold during the first and second quarters of 2021, as the acquired inventory is sold, and 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.

The following table summarizes, on an unaudited pro forma basis, the combined results of operations of the Company and Hartland as though the acquisition had occurred as of December 29, 2019. The ~~adoption~~pro forma amounts presented are not necessarily indicative of ~~ASU 2018-15 did not have a material impact on our Condensed Consolidated Financial Statements.~~either the actual consolidated results had the Hartland acquisition occurred as of December 29, 2019 or of future consolidated operating results.


	For the Three Months Ended
(in thousands, except per share amounts)	March 27, 2021		March 28, 2020
Net sales	$	470,832	$	363,617
Income before income taxes	77,288		31,431
Net income	61,317		21,438
Net income per share — basic	2.50		0.88
Net income per share — diluted	2.46		0.87

Pro forma results presented above primarily reflect the following adjustments:


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

(a)The amortization adjustment for the three months ended March 28, 2020 primarily reflects incremental amortization resulting for the ~~FASB issued ASU 2020-04 Reference Rate Reform (Topic 848): Facilitation~~measurement of intangibles at their fair values.

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

(c)The amortization of inventory step-up adjustment reflects the reversal of the ~~Effects~~amount recognized during the three months ended March 27, 2021 and the recognition of Reference Rate Reform on Financial Reporting.” This ASU provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The objective of this is to provide optional guidance for a ~~limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting due to the cessation~~full quarter of the ~~London Interbank Offered Rate (LIBOR).~~amortization during the three months ended March 28, 2020. The ~~amendments in this update are effective for all entities~~inventory step-up was amortized over four months as ~~of March 12, 2020 through December 31, 2022. The Company does not expect a material effect from~~ the ~~adoption of this guidance on its Condensed Consolidated Financial Statements.~~inventory was sold.

The components of inventories at March ~~28, 2020~~27, 2021 and December ~~28, 2019~~26, 2020 are as follows:

(in thousands) March 28, 2020 December 28, 2019
Raw materials $ 75,202
$ 76,732
Work in process 84,030
84,561
Finished goods 100,415
110,388
Inventory Reserves (32,365 ) (34,174 )
Total $ 227,282

$ 237,507

3.4. Property, Plant, and Equipment

The components of net property, plant, and equipment at March ~~28, 2020~~27, 2021 and December ~~28, 2019~~26, 2020 are as follows:

(in thousands) March 28, 2020 December 28, 2019
Land $ 22,781
$ 24,758
Building 105,067
108,501
Equipment 633,899
631,273
Accumulated depreciation and amortization (426,918 ) (419,915 )
Total $ 334,829
$ 344,617

The Company recorded depreciation expense of $13.7 million and $13.8 ~~million~~ ~~and~~ ~~$13.1~~ million for the three months ended March 27, 2021 and March 28, 2020, ~~and March 30, 2019,~~ respectively.

4.5. Goodwill and Other Intangible Assets

The amounts for goodwill and changes in the carrying value by segment for the three months ended March ~~28, 2020~~27, 2021 are as follows:

(in thousands) Electronics Automotive Industrial Total
As of December 28, 2019 $ 650,796
$ 131,321
$ 38,472
$ 820,589
Currency translation (5,873 ) (1,693 ) (260 ) (7,826 )
As of March 28, 2020 $ 644,923

$ 129,628

$ 38,212

$ 812,763

Table of Contents


(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 atas of March ~~28,~~27, 2021 and December 26, 2020 ~~and December 28, 2019~~ are as follows:

As of March 28, 2020
(in thousands)
Gross
Carrying
Value

Accumulated Amortization

Net Book
Value
Land use rights $ 9,545
$ 1,755
$ 7,790
Patents, licenses and software 129,380
$ 80,506
$ 48,874
Distribution network 43,076
36,560
6,516
Customer relationships, trademarks, and tradenames 357,188
111,975
245,213
Total $ 539,189

$ 230,796

$ 308,393


	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

As of December 28, 2019
(in thousands)
Gross
Carrying
Value

Accumulated
Amortization

Net Book
Value
Land use rights $ 9,649
$ 1,730
$ 7,919
Patents, licenses and software 131,164
78,828
52,336
Distribution network 43,239
36,163
7,076
Customer relationships, trademarks, and tradenames 360,534
106,618
253,916
Total $ 544,586
$ 223,339
$ 321,247

During the three months ended March ~~28, 2020~~27, 2021 and March ~~30, 2019,~~28, 2020, the Company recorded amortization expense of ~~$10.0~~$10.5 million and ~~$10.2~~$10.0 million, respectively.

~~During the three months ended March 28, 2020, the~~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

Estimated annual amortization expense related to intangible assets with definite lives as of March ~~28, 2020~~27, 2021 is as follows:

(in thousands)
Amount
2020 $ 38,291
2021 37,487
2022 36,561
2023 32,195
2024 29,135
2025 and thereafter 144,705
Total $ 318,374


(in thousands)	Amount
2021	$	41,545
2022	40,791
2023	36,491
2024	33,054
2025	32,603
2026 and thereafter	143,331
Total	$	327,815

Leases cost
(in thousands)
Condensed Consolidated Statements of Net Income Classification Three Months Ended March 28, 2020 Three Months Ended
March 30, 2019
Short-term lease expenses Cost of sales, SG&A expenses $ 117
$ 153
Variable lease expenses Cost of sales, SG&A expenses 318
194
Operating lease rent expenses Cost of sales, SG&A expenses 2,173
2,193
Total operating lease costs Cost of sales, SG&A expenses $ 2,608
$ 2,540

Maturity of Lease Liabilities as of March 28, 2020
(in thousands)
Operating leases
2020 (excluding the three months ended March 28, 2020) $ 6,156
2021 6,620
2022 5,341
2023 3,590
2024 3,177
2025 and thereafter 498
Total lease payments $ 25,382

Present value of lease liabilities $ 23,033



~~Operating Lease Term and Discount Rate~~	~~March 28, 2020~~
~~Weighted-average remaining lease term (years)~~	~~3.90~~
~~Weighted-average discount rate~~	~~5.04~~	%

Other Information
(in thousands)
Three Months Ended
March 28, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flow payments for operating leases $ (2,242 )
Leased assets obtained in exchange for operating lease liabilities 848

6. Accrued Liabilities

The components of accrued liabilities atas of March ~~28, 2020~~27, 2021 and December ~~28, 2019~~26, 2020 are as follows:

(in thousands) March 28, 2020 December 28, 2019
Employee-related liabilities $ 32,381
$ 40,774
Operating lease liability 7,073
7,259
Interest 3,159
5,058
Professional services 3,359
3,986
Restructuring liability 3,336
2,679
Other non-income taxes 2,058
1,940
Other 22,146
22,424
Total $ 73,512
$ 84,120

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.

7. Restructuring, Impairment and Other Charges

The Company recorded restructuring, impairment and other charges for the three months ended March ~~28, 2020~~27, 2021 and March ~~30, 2019~~28, 2020 as follows:

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.

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

The restructuring ~~reserves~~liability as of March ~~28, 2020~~27, 2021 and December ~~28, 2019 are $3.3~~26, 2020 is $2.6 million and ~~$2.7~~$4.2 million, respectively. The restructuring ~~reserves are~~liability is included within accrued liabilities in the Condensed Consolidated Balance Sheets. The Company anticipates the remaining payments associated with employee terminations will primarily be completed by ~~March 2021.~~the first quarter of 2022.

The carrying amounts of debt at March ~~28, 2020~~27, 2021 and December ~~28, 2019~~26, 2020 are as follows:

Revolving Credit Facility ~~/ Term Loan~~

On March 4, 2016, the Company entered into a five-year credit agreement (“Credit Agreement”) with a group of lenders for up to $700.0 million. The Credit Agreement consisted of an unsecured revolving credit facility (“Revolving Credit Facility”) of $575.0 million and an unsecured term loan credit facility (“Term Loan”) of up to $125.0 million. In addition, the Company had the ability, from time to time, to increase the size of the Revolving Credit Facility and the Term Loan by up to an additional $150.0 million, in the aggregate, in each case in minimum increments of $25.0 million, subject to certain conditions and the agreement of participating lenders.

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 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 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.

As of March 27, 2021, the Company had 0 amount outstanding in letters of credit and had available $571.3 million of borrowing capacity under the Revolving Credit Facility based on financial covenants. At March 27, 2021, the Company was in compliance with all covenants under the Credit Agreement.

On December 8, 2016, the Company entered into a Note Purchase Agreement, pursuant to which the Company issued and sold €212 million aggregate principal amount of senior notes in 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”) ~~(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 payable semiannually on February 15 and August 15, commencing August 15, 2017.

On November 15, 2017, the Company entered into a Note Purchase Agreement pursuant to which the Company issued and sold $175 million in aggregate principal amount of senior notes in 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 ~~28, 2020,~~27, 2021, 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 ~~$7.4~~$6.2 million and ~~$8.0~~$7.4 million for the three months ended March 27, 2021 and March 28, 2020, ~~and March 30, 2019,~~ 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 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 and other assets.

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. ~~During the three months ended March 30, 2019, the Company recorded impairment charges of $2.8 million in~~ ~~Other expense (income), net~~ ~~in the Condensed Consolidated Statements of Net Income to adjust these certain investments to their estimated fair value.~~ As of March ~~28, 2020~~27, 2021 and December ~~28, 2019,~~26, 2020, the balances of these investments were ~~$0.4~~both $0.5 million. The fair value of these investments are measured on a nonrecurring basis ~~and determined to be~~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.

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 assets.

There were no changes during the quarter ended March ~~28, 2020~~27, 2021 to the Company’s valuation techniques used to measure asset and liability fair values on a recurring basis. On October 30, 2019, the Company entered a foreign currency exchange forward contract to mitigate the currency fluctuation risk between the Chinese renminbi and U.S. dollar. The foreign currency contract was not designated as a hedge instrument and was marked to market on a monthly basis. The notional value of the forward contracts at December 28, 2019 was $16.0 million and expires on May 5, 2020. On March 23, 2020, the Company unwound the foreign currency exchange forward contract entered on October 30, 2019 and recognized a gain of $0.2 million within ~~Other expenses,~~

The following table presents assets measured at fair value by classification within the fair value hierarchy as of March ~~28, 2020:~~27, 2021:

Fair Value Measurements Using
(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 $ 198,221
$ —
$ —
$ 198,221
Investments in equity securities 10,529
—
—
10,529
Mutual funds 8,769
—
—
8,769

The following table presents assets measured at fair value by classification within the fair value hierarchy as of December ~~28, 2019:~~26, 2020:

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 ~~and term loan debt~~credit facilities’ fair values approximate book value at March ~~28, 2020~~27, 2021 and December ~~28, 2019,~~26, 2020, 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 ~~28, 2020~~27, 2021 and December ~~28, 2019~~26, 2020 were as follows:

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.~~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 ~~determined to be Level 3 under the fair value hierarchy and was~~ valued using a real estate ~~appraisal.~~appraisal and classified as a Level 3 input under the fair value hierarchy.

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 (income) expense, ~~(income),~~ net in the Condensed Consolidated Statements of Net Income. The components of net periodic benefit cost for the three months ended March ~~28, 2020~~27, 2021 and March ~~30, 2019~~28, 2020 were as follows:


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

For the Three Months Ended
(in thousands) March 28, 2020 March 30, 2019
Components of net periodic benefit cost:
Service cost $ 618
$ 500
Interest cost 658
784
Expected return on plan assets (727 ) (790 )
Amortization of prior service and net actuarial loss 145
62
Net periodic benefit cost $ 694

$ 556

The Company expects to make approximately ~~$2.3~~$2.2 million of ~~cash~~ contributions to ~~its pension~~the plans and pay $3.8 million of benefits directly in ~~2020.~~2021.

The Company also sponsors certain post-employment plans in foreign countries and other statutory benefit plans. ~~For~~The Company recorded expense of $0.5 million for both the three months ended March 27, 2021 and March 28, 2020 ~~and March 30, 2019, the Company recorded $0.5 million and $0.2 million expense,~~, respectively, in Cost of Salesand Other (income) expense, ~~(income),~~ net within the Condensed Consolidated Statements of Net Income. For the three months ended March 27, 2021 and March 28, 2020, 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.

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 UKU.K. pension plan participants, or their designated ~~beneficiaries, who have been receiving pension payments.~~beneficiaries. The purchase of this group annuity contract will reduce the Company’s outstanding pension benefit obligation by approximately ~~$36~~$55 million, representing approximately ~~30%~~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 ~~in the second half of 2021~~ currently estimated between $18 million and $22 million in the fourth quarter of 2021, reflecting the accelerated recognition of ~~a portion 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.

11. Other Comprehensive Income ~~(Loss)~~

Changes in other comprehensive income (loss) ~~income~~ 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)

The following tables set forth the changes in accumulated other comprehensive (loss) ~~income~~ by component for the three months ended March 27, 2021 and March 28, ~~2020 and March 30, 2019:~~2020:

Amounts reclassified from accumulated other comprehensive (loss) ~~income~~ to earnings for the three months ended March ~~28, 2020~~27, 2021 and March ~~30, 2019~~28, 2020 were as follows:


	Three Months Ended
(in thousands)	March 27, 2021		March 28, 2020
Pension and Postemployment plans:
Amortization of prior service and net actuarial loss	$	504	$	345

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

The effective tax rate for the three months ended March ~~28, 2020~~27, 2021 was ~~30.6%~~20.6%, compared to the effective tax rate for the three months ended March ~~30, 2019~~28, 2020 of ~~20.3%~~30.6%. The effective tax rate for the ~~2020~~2021 period is ~~higher~~lower than the effective tax rate for the ~~2019~~ comparable 2020 period primarily due to ~~a reduction~~an increase in the forecasted income earned in lower tax jurisdictions in ~~2020 driven by the uncertainty resulting from the impact of COVID-19.~~2021 as compared to 2020. The effective tax rate for the ~~2020~~2021 period is ~~higher than~~approximately the same as the applicable U.S. statutory tax rate primarily due to the forecasted impact of non-U.S. losses and expenses with no tax benefit and the U.S. GILTI tax provisions (in the 2019 period the impact of these items was more than offset by the impact of income earned in lower tax jurisdictions).rate.

13. Earnings Per Share

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

Three Months Ended
(in thousands, except per share amounts) March 28, 2020 March 30, 2019
Numerator:
Net income as reported $ 24,644
$ 36,989

Denominator:
Weighted average shares outstanding
Basic 24,393
24,717
Effect of dilutive securities 185
292
Diluted 24,578

25,009

Earnings Per Share:
Basic earnings per share $ 1.01
$ 1.50
Diluted earnings per share $ 1.00
$ 1.48


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

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

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

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 ~~153,836~~15 and ~~77,047~~153,836 for the three months ended March 27, 2021 and March 28, 2020, ~~and March 30, 2019,~~ respectively.

Share Repurchase Program

~~The Company’s Board of Directors authorized the repurchase of up to 1,000,000 shares of the Company’s common stock under a program for the period May 1, 2018 to April 30, 2019 ("2018 program").~~ On April 26, 2019, the Company's Board of Directors authorized to 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") ~~to replace its previous expired 2018 program.~~. On April ~~23,~~29, 2020, the ~~Company's~~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 ~~does not expect to~~did 0t repurchase any shares inof its common stock for the ~~near future due to the uncertainty of the impact and duration of COVID-19.~~

14. Related Party Transactions

~~As a result of the Company’s acquisition of IXYS, the~~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.

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

For the Three Months Ended March 28, 2020 For the Three Months Ended March 30, 2019
(in millions) Powersem EB Tech ATEC Powersem EB Tech ATEC
Sales to related party $ 0.4
$ —
$ —
$ 0.1
$ —
$ —
Purchase material/ service from related party 0.2
—
1.8
0.8
0.1
1.5

March 28, 2020 December 28, 2019
(in millions) Powersem EB Tech ATEC Powersem EB Tech ATEC
Accounts Receivable balance $ 0.1
$ —
$ —
$ —
$ —
$ —
Accounts Payable balance 0.1
—
—
0.2
—
0.1

Additionally, the Company has certain cost method investments in VTOOL Ltd. and Securepush Ltd. with a total book value of ~~$0.4~~$0.5 million as of March 27, 2021 and ~~March 28,~~December 26, 2020and one member of the Company’s Board of Directors is currently an investor and a director of VTOOL Ltd. and Securepush Ltd.

~~On April 26, 2019, the Company sold its subsidiary Microwave Technology, LLC. (“MWT”) resulting in a loss on disposal of~~ ~~$2.6 million reflected in~~ ~~Other income (expense), net~~ ~~in the Condensed Consolidated Statements of Net Income.~~ ~~The operations of MWT were included in the Electronics segment. One member of the Company’s Board of Directors is an owner of a company that purchased MWT.~~

15. Segment Information

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

Sales, marketing, and research and development expenses are charged directly into each operating segment. 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' 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, 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, ~~consumer electronics~~building and ~~white goods.~~home automation, appliances, and mobile electronics.

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

protectors, resettable fuses, high-current fuses, and high-voltage fuses. Commercial vehicle products include fuses, switches, relays, and power distribution modules used in applications serving a number of end markets, including heavy truck, construction, agriculture 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.

•Industrial Segment: Consists of industrial circuit protection products (i.e. fuses, power distribution modules, switches) 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. Consists of a wide range of circuit protection, power control and sensing technologies for global original equipment manufacturers (“OEMs”), Tier-I suppliers and parts distributors in passenger car, heavy duty truck, off-road vehicles, material handling, agricultural, construction and other commercial vehicle end markets. Passenger car fuse products include fuses and fuse accessories for internal combustion engine vehicles and hybrid and electric vehicles including blade fuses, battery cable protectors, resettable fuses, high-current fuses, and high-voltage fuses. Commercial vehicle products include fuses, switches, relays, and power distribution modules for the commercial vehicle industry. Automotive sensor products include a wide range of automotive and commercial vehicle products designed to monitor the passenger compartment occupants, safety and environment as well as the vehicle’s powertrain.

Segment information is summarized as follows:

(a) Included in “Other” Operating income ~~(loss)~~ for the ~~2020~~ first quarter isof 2021 was $3.5 million of purchase accounting inventory step-up charges, $0.8 million of legal and professional fees and other 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 $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-related and~~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.

~~Included in "Other" Operating income (loss) for the first quarter~~

Table of 2019 is $2.4 million of acquisition integration charges primarily related to the IXYS acquisition. In addition, there were $2.7 million of restructuring charges primarily related to employee termination costs.Contents

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


	Three Months Ended					Three Months Ended
(in thousands)	March 28, 2020		March 30, 2019		(in thousands)	March 27, 2021		March 28, 2020
Net sales					Net sales
United States	$	102,910	$	119,528	United States	$	130,931	$	102,910
China	86,015		106,866		China	139,158		86,015
Other countries(a)	157,171		179,106		Other countries(a)	193,705		157,171
Total net sales	$	346,096	$	405,500	Total net sales	$	463,794	$	346,096

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

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

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

Three Months Ended
(in thousands) March 28, 2020 March 30, 2019
Additions to long-lived assets
United States $ 580
$ 905
China 1,657
1,225
Mexico 2,592
5,484
Germany 753
598
Philippines 3,218
5,229
Other countries(a)
2,508
635
Total additions to long-lived assets $ 11,308

$ 14,076

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

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; 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 ~~this~~ ~~Quarterly Report on Form 10-Q for the quarter ended March 28, 2020,~~ the Company's Annual Report on Form 10-K for the year ended December ~~28, 2019,~~26, 2020, and the Company's other ~~fillings~~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 ~~28, 2019.~~26, 2020.

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 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 global ~~manufacturer of leading technologies in circuit protection, power control~~associates, we partner with customers to design and ~~sensing.~~

deliver innovative, reliable solutions. Serving over 100,000 end customers, ~~the Company’s~~our products are found in ~~automotive~~a variety of industrial, transportation and ~~commercial vehicles, industrial~~electronics end markets – everywhere, every day.

applications, data and telecommunications, medical devices, consumer electronics and appliances. With its broad product portfolio of fuses, semiconductors, polymers, ceramics, relays and sensors, and extensive global infrastructure, the Company’s worldwide associates partner with its customers to design, manufacture and deliver innovative, high-quality solutions for a safer, greener and increasingly connected world.

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, and Industrial. Within these segments, the Company designs, manufactures and sells components and modules ~~for circuit protection, power control~~empowering a sustainable, connected, and ~~sensing products throughout the~~safer world. ~~The circuit protection~~Our products protect against electrostatic discharge, power surges, short circuits, voltage spikes and other harmful ~~occurrences; our power control products~~occurrences, safely and efficiently control power and improve productivity and ~~our sensor products~~ are used to identify and detect temperature, proximity, flow speed and fluid level in various applications.

Executive Summary

For the first quarter of ~~2020,~~2021, the Company recognized net sales of ~~$346.1~~$463.8 million compared to ~~$405.5~~$346.1 million in the first quarter of ~~2019~~2020 representing ~~a decrease~~an increase of ~~$59.4~~$117.7 million, or ~~14.6%~~34.0%. The ~~decrease~~increase was ~~primarily~~ driven by ~~lower volume~~higher volumes across all businesses in the Electronics ~~segment due to electronics distribution partners~~ and ~~end customers reducing excess inventories, lower volume in the~~ Automotive ~~segment, the impact of COVID-19 and $3.3~~segments, $16.7 million or ~~0.8%~~3.6% of ~~unfavorable~~net sales from the Hartland acquisition within the Industrial segment and $12.4 million or 3.6% of favorable changes in foreign exchange ~~rates, partially offset by higher volume~~rates. The Company recognized net income of $57.7 million, or $2.32 per diluted share, in the ~~Industrial segment. The Company recognized~~first quarter of 2021 compared to net income of $24.6 million, or $1.00 per diluted share in the first quarter of ~~2020 compared to net income of $37.0 million, or $1.48 per diluted share in the first quarter of 2019.~~2020. The ~~decrease~~increase in net income ~~was primarily due to lower~~reflects higher operating income of $31.7 million driven by a $23.3 million and $6.2 million increase in operating income in the Electronics ~~segment.~~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.

Net cash provided by operating activities was $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 as compared to $30.9 million for the three months ended March 30, 2019.~~2020. The increase in net cash provided by operating activities was primarily due to ~~lower annual incentive payments and inventory levels,~~higher cash earnings partially offset by ~~lower earnings.~~increases in working capital resulting from higher sales growth.

~~During the three months ended March 28, 2020 and March 30, 2019, the Company repurchased 175,110 and 79,916 shares of its common stock totaling $22.9 million and $13.6 million, respectively.~~

On March 25, 2020, the company borrowed $100.0 million from its current revolving credit facility to preserve financial flexibility and enhance liquidity, given the increasing levels of uncertainty related to COVID-19. On April 3, 2020, the Company amended the existing credit agreement to effect certain changes, including, among others: (i) eliminating the $200.0 million unsecured term loan credit facility, the remaining outstanding balance 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 current balance under the facility is $240.0 million as of April 3, 2020.

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 pay and administer pension payments to certain of the Company’s UK pension plan participants, or their designated beneficiaries, who have been receiving pension payments. The purchase of this group annuity contract will reduce the Company’s outstanding pension benefit obligation by approximately $36 million, representing approximately 30% 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 in the second half of 2021 currently estimated between $18 million and $22 million, reflecting the accelerated recognition of a portion of unamortized actuarial losses in the plan. The actual settlement charge could differ from this estimate due to final data and plan wind-up expenses.

Impact of COVID-19 on Business

The ~~global emergence of~~effects from COVID-19 ~~impacted the Company’s~~continue to drive increased costs, though lower than 2020 ~~first quarter results. The Electronics segment had reduced sales volume driven by production disruption from temporary closures of~~levels. Ongoing costs include spending on personal protective equipment ("PPE"), additional personnel and employee transportation costs, and manufacturing facilities in China and the Philippines as a result of government directives. The Automotive segment had reduced sales volume driven by a reduction in customer demand late in the quarter. Additionally, the Company incurred incremental costs of approximately $2.5 million primarily due to higher costs for freight and protective supplies,inefficiencies, as well as an increase in freight costs ~~related~~due to the ~~above temporary plant closures.~~

The future impacts of COVID-19 on our business are currently unknown. The Company’s priorities are to focus on our employees, customers and long-term financial health of the company. In an effort to protect the health and safety of our employees, the Company took numerous proactive, aggressive actions from the earliest signs of the outbreak in China, adopting performing temperature checks in many locations, procuring and distributing proper PPE (personal protective equipment) to employees and their families in many locations, following strict hand and respiratory hygiene, sanitization and cleaning protocols and outlining social distancing policies at our locations aroundtransportation capacity constraints across the world. The Company is also limiting the number of employees attending meetings in person, reducing the number of people in our sites at any one time, implementing working from home, and suspending employee travel.

In an effort to contain COVID-19 or slow its spread, governments around the world have also enacted various measures, including orders to close all businesses not deemed “essential,” isolate residents to their homes or places of residence, and practice social distancing when engaging in essential activities. These government measures have disrupted certain of our operating locations in Asia, Europe and Mexico. All of our China manufacturing locations that were temporarily closed in February have returned operations to normal capacity levels, while certain operations in Europe, the Philippines and Mexico continue to be temporarily closed or operating at reduced capacity levels.

The Company continues to focus on our customers and to support their critical needs. We continue to work with customers to provide necessary products, many of which are considered essential, including healthcare and medical devices, transportation, communication and energy infrastructure.

The Company has taken cost containment initiatives to help offset the impact of lower demand and the business disruption created by COVID-19. During the quarter, the Company suspended annual wage increases and its 2020 annual cash incentive program. The Company also reduced salaries of the CEO and executive leadership team, and reduced cash compensation of its board of directors. The Company continues to develop and execute contingency plans to manage our business performance within this uncertain environment.

The Company anticipates that the global health crisis caused by COVID-19 ~~will~~may continue to negatively impact its business ~~activity.~~activity for the foreseeable future. It is currently difficult to estimate the magnitude ~~and duration~~ of the COVID-19 disruption, if future disruptions will occur due to a resurgence in COVID-19 cases and its impact on our employees, customers, suppliers and vendors. The Company will continue to actively monitor the situation and may take further actions altering our business operations that we determine are in the best interests of our employees, customers, partners, suppliers, and other stakeholders, or as required by federal, state, or local authorities. It is not clear what the potential effects any such alterations or modifications may have on our business and operations, including the effects on our customers, employees, and prospects, or on our financial results for the ~~remainder of~~ fiscal ~~2020.~~year 2021.

~~Risks Related to Market Conditions~~

The Company performs its annual goodwill impairment tests as of September 30, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Since September 30, 2019, the date of the Company’s last annual review for impairment, the market value of the Company’s stock has declined. Management has considered the resulting decline in the Company’s market capitalization in performing its assessment of whether an interim impairment review was required for any reporting units. As part of this assessment, management analyzed the potential declines in value of individual reporting units based on each reporting unit’s operating results for the three months ended March 28, 2020 compared to expected results as of September 30, 2019. In addition, management considered how other key assumptions, including discount rates, expected profitability and long-term growth rates used in the last fiscal year’s impairment analysis, could be impacted by recent market conditions and economic events. Based on this interim assessment, management concluded that as of March 28, 2020, no events or changes in circumstances indicated that it was more likely than not that the fair value for any reporting unit had declined below its carrying value. A continued global economic slowdown and further business disruption due to COVID-19 could result in changes to expectations of future financial results and key valuation assumptions. These changes could result in changes to management’s estimates of the fair value of the Company’s reporting units and could

~~result in a review for impairment of goodwill prior to September 29, 2020, the Company’s next annual measurement date, and a potential corresponding impairment charge.~~

In particular, the automotive sensors reporting unit has experienced declines in sales due to lower automotive market car build, reduced volumes and temporary customer shut-downs due to COVID-19. In addition, the semiconductors reporting unit has experienced declines in sales due to temporary plant shut-downs and lower customer demand primarily due to COVID-19. The Company continues to evaluate the impact of COVID-19 on its future long-term expectations for these units. Further negative developments having a significant impact on the estimated fair value of these reporting units could result in future goodwill impairment charges. As of the September 30, 2019 annual goodwill impairment test, the automotive sensors and semiconductors reporting units estimated fair values exceeded its book value by approximately 40% and 42%, respectively. As of March 28, 2020, $42.2 million and $462.7 million of goodwill was allocated to the automotive sensors and semiconductors reporting units, respectively. The automotive sensors reporting unit is included within the Automotive segment and the semiconductors reporting unit is included within the Electronics segment.

While the Company has not historically had significant credit risk on accounts receivable, the impact of the COVID-19 pandemic and associated economic slowdown may increase the Company’s credit risk on accounts receivable. It is possible that the Company’s customers may experience liquidity issues which may impact the timing of the collections on receivables. The Company will continue to evaluate how the ongoing pandemic may impact collectability.

Results of Operations

The following table summarizes the Company’s unaudited condensed consolidated results of operations for the periods presented. The first quarter of 2021 includes $3.5 million of purchase accounting inventory step-up charges, $0.8 million of legal and professional fees and other 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 $1.9 million gain from the sale of a building within the Electronics segment.

The first quarter of 2020 includes ~~$5.2~~$1.2 million of ~~non-segment~~acquisition integration charges ~~which included~~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 inwithin the Industrial segment and $1.7 million of employee termination costs and other restructuring ~~charges and $1.2 million of acquisition-related and integration charges primarily related to the IXYS acquisition and other contemplated acquisitions.~~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	%

The first quarter of 2019 includes $2.4 million of acquisition integration charges primarily related to the IXYS acquisition. In addition, there were $2.7 million of restructuring charges primarily related to employee termination costs.

First Quarter
(in thousands) 2020 2019 Change
%
Change
Net sales $ 346,096
$ 405,500
$ (59,404 ) (14.6 )%
Gross profit 123,712
155,228
(31,516 ) (20.3 )%
Operating expenses 78,962
94,555
(15,593 ) (16.5 )%
Operating income 44,750
60,673
(15,923 ) (26.2 )%
Income before income taxes 35,499
46,439
(10,940 ) (23.6 )%
Income taxes 10,855
9,450
1,405
14.9 %
Net income $ 24,644
$ 36,989
$ (12,345 ) (33.4 )%

Net Sales

Net sales ~~decreased $59.4~~increased $117.7 million or ~~14.6%~~34.0% including $12.4 million or 3.6% of favorable changes in foreign exchange rates for the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019~~2020. The increase was primarily due to ~~lower volume across the Electronics segment from electronics distribution partners~~higher sales of $72.3 million and ~~end customers reducing excess inventories and production, and lower volume across the Automotive segment due to a decline~~$23.8 million, respectively, in ~~global auto production driven by lower global end market demand and a reduction in customer demand due to COVID-19, disruption across~~ the Electronics and Automotive segments driven by higher volumes across all businesses within these segments. The volume increase within the Electronics segment was led by greater customer demand for products 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 volume increase within the Automotive segment was due to ~~temporary closures~~stronger global auto and commercial vehicle market demand. The remaining increase in net sales was due to $16.7 million of ~~manufacturing facilities~~net sales resulting from ~~government directives due to~~ the ~~impact of COVID-19, and $3.3 million or 0.8% of unfavorable changes in foreign exchange rates, partially offset by higher volume~~Hartland acquisition included in the Industrial segment.

Cost of Sales

Cost of sales was $303.3 million, or 65.4% of net sales, in 2021, compared to $221.7 million, or 64.1% of net sales, in 2020. The increase in cost of sales was primarily due to greater volume in the Electronics and Automotive segments driven by the factors discussed above along with the acquisition of Hartland. As a percent of net sales, cost of sales increased 1.3% driven by higher freight costs 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.

Gross Profit

Gross profit was ~~$123.7~~$160.5 million, or ~~35.7%~~34.6% of net sales, in the first quarter of ~~2020~~2021 compared to ~~$155.2~~$124.4 million, or ~~38.3%~~35.9% of net sales, infor the first quarter of ~~2019.~~2020. The $36.1 million increase in gross profit was primarily due to higher volume in the Electronics and Automotive segments. The decrease in gross ~~profit is~~margin of 1.3% was primarily due to ~~lower volumes across~~ the ~~Electronics segment, additional costs associated with~~ higher freight ~~supplies and other~~ costs ~~associated with government-directed plant shutdowns and supply chain constraints due to~~of $7.3 million or 0.9%, the ~~impact~~purchase accounting inventory charges of ~~COVID-19,~~$3.5 million or 0.8%, higher commodity costs, and unfavorable price and ~~product mix.~~foreign exchange partially offset by higher volumes within the Electronics and Automotive segments.

Operating Expenses

Total operating expenses were ~~$79.0~~$84.0 million, or ~~22.8%~~18.1% of net sales, for the first quarter of ~~2020~~2021 compared to ~~$94.6~~$79.6 million, or ~~23.3%~~23.0% of net sales, for the first quarter of ~~2019.~~2020. The ~~decrease~~increase in operating expenses of ~~$15.6~~$4.4 million iswas primarily due to ~~global cost saving initiatives across all segments, lower~~higher selling, general and administrative expenses of $7.1 million largely due to higher accrued incentive compensation ~~lower sales commissions~~ and ~~travel expenses due to COVID-19, and lower acquisition-related and integration charges~~the

Table of ~~$1.2 million,~~Contents

Hartland acquisition partially offset by a $1.9 million gain from 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 ~~$2.2 million related to the Company’s announcement to consolidate a manufacturing facility within the Industrial segment.~~$3.5 million.

Operating Income

Operating income was ~~$44.8~~$76.5 million, ~~a decrease~~an increase of ~~$15.9~~$31.7 million, or ~~26.2%~~70.9%, for the first quarter of ~~2020~~2021 compared to ~~$60.7~~$44.8 million for the first quarter of ~~2019.~~2020. The ~~decrease~~increase in operating income iswas primarily due to ~~lower~~higher gross ~~margin across~~profit from the Electronics ~~segment, partially offset by the lower operating expenses noted above.~~and Automotive segments. Operating margins ~~decreased~~increased from ~~15.0% in the first quarter of 2019 to~~ 12.9% in the first quarter of 2020 to 16.5% in the first quarter of 2021 driven by the factors mentioned above.

Income Before Income Taxes

Income before income taxes was $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 compared~~2020. In addition to ~~$46.4 million, or 11.5% of net sales,~~the factors impacting comparative results for ~~the first quarter of 2019. The decline in~~operating income discussed above, income before income taxes was primarily ~~driven be lower operating income discussed above. In addition, income before taxes was primarily~~ impacted by ~~impairment charges~~increases of ~~$2.8~~$9.7 million ~~for certain other investments and a $2.6 million loss on the disposal~~ of a business within the Electronics segment during three months ended March 28, 2019, lower foreign exchange losses of $1.7 million during the three months ended March 28, 2020 compared to the three months ended March 30, 2019 and higher interest income of $0.9 million during three months ended March 28, 2020 compared to the three months ended March 30, 2019, partially offset by unrealized ~~investment losses of $2.3 million~~gains associated with our equity investments ~~during the three months ended March 28, 2020 compared to unrealized gains~~partially offset by higher foreign exchange losses of ~~$0.4 million during the three months ended March 30, 2019.~~$4.3 million.

Income Taxes

Income tax expense for the first quarter of 2021 was $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 compared to income tax expense of $9.5 million, or an effective tax rate of 20.3%, for the first quarter of 2019.~~2020. The effective tax rate for the ~~2020 period~~first quarter of 2021 is ~~higher~~lower than the effective tax rate for the ~~2019~~ comparable 2020 period, primarily due to ~~a reduction~~an increase in the forecasted income earned in lower tax jurisdictions in ~~2020 driven by the uncertainty resulting from the impact of COVID-19.~~2021 compared to 2020. The effective tax rate for the ~~2020~~2021 period is ~~higher than~~approximately the same as the applicable U.S. statutory tax rate primarily due to the forecasted impact of non-U.S. losses and expenses with no tax benefit and the U.S. GILTI tax provisions (in the 2019 period the impact of these items was more than offset by the impact of income earned in lower tax jurisdictions).rate.

Segment Results of Operations

The Company reports its operations by the following segments: Electronics, Automotive 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
(in thousands)	2021		2020		Change		% Change
Electronics	$	286,535	$	214,189	$	72,346	33.8	%
Automotive	128,529		104,770		23,759		22.7	%
Industrial	48,730		27,137		21,593		79.6	%
Total	$	463,794	$	346,096	$	117,698	34.0	%

First Quarter
(in thousands) 2020 2019 Change
%
Change
Electronics $ 214,189
$ 265,394
$ (51,205 ) (19.3 )%
Automotive 104,770
113,483
(8,713 ) (7.7 )%
Industrial 27,137
26,623
514
1.9 %
Total $ 346,096
$ 405,500
$ (59,404 ) (14.6 )%

Electronics Segment

Net sales ~~decreased $51.2~~increased $72.3 million, or ~~19.3%~~33.8%, in the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019 primarily due to lower volume across all businesses from electronics distribution partners~~2020 and ~~end customers reducing excess inventories, production disruption from temporary closures of manufacturing facilities resulting from government directives due to the impact of COVID-19, and unfavorable~~included favorable changes in foreign exchange rates of ~~$1.7~~$6.5 million. The sales increase was primarily due to increased volume for the electronics products and semiconductor businesses of $47.8 million and $24.5 million, respectively. The volume increases were led by greater customer demand for products 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.

Automotive Segment

Net sales ~~decreased $8.7~~increased $23.8 million, or ~~7.7%~~22.7%, in the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019 due to decreased volume across all businesses from a decline in global auto production, a reduction in customer demand late in the quarter due to the impact of COVID-19,~~2020 and ~~unfavorable~~included favorable changes in foreign exchange rates of ~~$1.5~~$5.6 million. The sales increase was due to higher volume in passenger car products, commercial vehicle products, and the automotive sensors business of $15.3 million, $4.4 million, and $4.1 million,

Table of Contents

respectively. These increases were due to stronger global auto and commercial vehicle market demand. Our Asia region experienced the most growth driven by an increase in global auto market demand as compared to the first quarter of 2020 that had production disruptions due to the impact of COVID-19. Sales also grew due to the launch of new products and higher content per vehicle.

Industrial Segment

Net sales increased by ~~$0.5~~$21.6 million, or ~~1.9%~~79.6%, in the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019 primarily due to higher volume across all businesses, partially offset by unfavorable~~2020, which included favorable changes in foreign exchange rates of ~~$0.1~~$0.3 million. The increase in net sales was primarily due to incremental net sales of $16.7 million or 61.5% 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.

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)	2020		2019		Change			% Change		(in thousands)	2021		2020		Change		% Change
Asia-Pacific	$	140,873	$	172,781	$	(31,908	)	(18.5	)%	Asia-Pacific	$	212,185	$	140,873	$	71,312	50.6	%
Americas	120,501		138,034		(17,533		)	(12.7	)%	Americas	152,906		120,501		32,405		26.9	%
Europe	84,722		94,685		(9,963		)	(10.5	)%	Europe	98,703		84,722		13,981		16.5	%
Total	$	346,096	$	405,500	$	(59,404	)	(14.6	)%	Total	$	463,794	$	346,096	$	117,698	34.0	%

Net sales ~~decreased $31.9~~increased $71.3 million, or ~~18.5%~~50.6%, in the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019.~~2020 and included favorable changes in foreign exchange rates of $4.2 million. The ~~decrease~~increase in net sales was primarily due to ~~lower~~higher volume across all businesses within the Electronics and Automotive segments, compared to the first quarter of 2020 that had production disruptions due to the impact of COVID-19.

Net sales increased $32.4 million, or 26.9%, in the first quarter of 2021 compared to the first quarter of 2020 and included favorable 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 acquisition, higher volume across all businesses within the Electronics segment, ~~lower~~and higher volume in ~~passenger car products and automotive sensor businesses within~~ the ~~Automotive segment, and unfavorable changes in foreign exchange rates of $0.9 million~~.

Net sales increased $14.0 million, or 16.5%, in the first quarter of 2021 compared to the first quarter of 2020. The increase in net sales was primarily due to favorable changes in foreign exchange rates of ~~$2.3~~$8.1 million and increased volume across all businesses within the Automotive segment and Electronics products business within the Electronics segment, partially offset by ~~higher~~lower volume in ~~automotive sensor~~the semiconductor business within the Electronics segment.

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.

Cash and cash equivalents were ~~$620.6~~$572.8 million as of March ~~28, 2020, an increase~~27, 2021, a decrease of ~~$89.4~~$114.8 million as compared to December ~~28, 2019.~~26, 2020. As of March ~~28, 2020, $310.1~~27, 2021, $306.6 million of the Company's ~~$620.6~~$572.8 million cash and cash equivalents was held by U.S. subsidiaries.

Revolving Credit ~~Facility/Term Loan~~Facility

~~Further information regarding~~

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 also required to pay commitment fees on unused portions of the credit agreement ~~is provided~~ranging from 0.125% to 0.20%, based on the Consolidated Leverage Ratio, as defined in ~~Note 8,~~ the agreement. The amended Credit Agreement included representations, covenants and events of default that are customary for financing transactions of this nature~~Debt~~. The effective interest rate on outstanding borrowings under the credit facility was 1.61% at March 27, 2021.

As of March 27, 2021, the ~~Notes to~~Company had no amount outstanding in letters of credit and had available $571.3 million of borrowing capacity under the ~~Condensed Consolidated Financial Statements included~~Revolving Credit Facility based on financial covenants. At March 27, 2021, the Company was in ~~this Quarterly Report.~~compliance with all covenants under the Credit Agreement.

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

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

The Company was in compliance with all covenants under the Credit Agreement and Senior Notes as of March ~~28, 2020~~27, 2021 and currently expects to remain in compliance based on management’s estimates of operating and financial results for ~~2020.~~2021. As of March ~~28, 2020,~~27, 2021, the Company met all the conditions required to borrow under the Credit Agreement and management expects the Company to continue to meet the applicable borrowing conditions.

On 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 ~~ultimate magnitude~~purchase price for Hartland was approximately $112.3 million and the operations of ~~COVID-19, including~~Hartland Controls are included in the ~~extent~~Industrial segment. The net cash payment of ~~its impact on our financial and operational results, which could be material, will be determined~~$109.9 million for this acquisition was funded by the ~~length of time that the pandemic continues, its effect~~Company's cash on the demand for our products, as well as the effect of governmental regulations imposed in response to the pandemic. While we cannot at this time predict the impact of the COVID-19, it could have a material negative impact on our business, financial condition, results of operations and future cash flows which could impact the Company’s ability to comply with debt covenants in the future.hand.

During the first quarter of 2020 the Company paid quarterly dividends of ~~$11.7~~$11.8 million to the shareholders. On April ~~23, 2020,~~28, 2021, the Board of Directors of the Company declared a quarterly cash dividend of $0.48 per share, payable on June ~~4, 2020~~3, 2021 to stockholders of record as of May ~~21, 2020. Future determinations regarding~~20, 2021.

On April 7, 2020, the ~~declaration and payment of dividends~~Company entered into a definitive agreement to purchase a group annuity contract, under which an insurance company will be atrequired to directly pay and administer pension payments to certain of the ~~discretion~~Company’s U.K. pension plan participants, or their designated beneficiaries. The purchase of ~~our board~~this group annuity contract will reduce the Company’s outstanding pension benefit obligation by approximately $55 million, representing approximately 37% of ~~directors~~the total obligations of the Company’s qualified pension plans, and will ~~depend~~be funded with pension plan assets and additional cash on ~~then-existing conditions, including our results~~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 ~~operations, payout ratio, capital requirements, financial condition, prospects~~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 ~~factors that our board~~comprehensive income (loss) during the second quarter of ~~directors may deem relevant.~~2020. Additionally, the Company made a cash contribution of $10.4 million (£8.4 million) under this agreement during the second quarter of 2020.

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 $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, compared to $30.9 million during the three months ended March 30, 2019.~~2020. The increase in net cash provided by operating activities was primarily due to ~~lower annual incentive payments and inventory levels,~~higher cash earnings partially offset by ~~lower earnings.~~increases in working capital resulting from higher sales growth.

Cash Flow from Investing Activities

Net cash used in investing activities was ~~$16.5~~$122.0 million for the three months ended March ~~28, 2020~~27, 2021 compared to ~~$14.2~~$16.5 million during the three months ended March ~~30, 2019.~~28, 2020. Net cash paid for the Hartland acquisition was $109.9 million for the three

months ended March 27, 2021. Capital expenditures were ~~$16.6~~$14.7 million, representing ~~an increase~~a decrease of ~~$2.5~~$1.9 million compared to ~~2019.~~ 2020. During the three months ended March 28, 2020, the Company received proceeds of $2.6 million from the sale of a property within the Electronics segment.

Cash Flow from Financing Activities

Net cash used in financing activities was $34.3 million for the three months ended March 27, 2021 compared to net cash provided by financing activities ~~was~~of $65.8 million for the three months ended March 28, ~~2020 compared to net cash used in financing activities~~2020. The Company made payments of ~~$31.3~~$30.0 million ~~for~~on the ~~three months ended March 30, 2019.~~amended revolving credit facility during the first quarter of 2021. During the three months ended March 28, 2020, the ~~company~~Company made principal payments of $2.5 million on the term loan and borrowed $100.0 million from ~~the~~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, ~~and March 30, 2019,~~ the Company repurchased 175,110 ~~and 79,916~~ shares of its common stock totaling $22.9 million. Additionally, the Company paid dividends $11.8 million and $13.6 million, respectively, but made payments of $17.9 million related to settled share repurchases during the three months ended March 30, 2019. The Company made payments of $2.5 million and $5.0 million on the term loan during the three months ended March 28, 2020 and March 30, 2019, respectively. Additionally, dividends paid increased $1.1 million from $10.6$11.7 million in the three months ended March ~~30, 2019 to $11.7 million for the three months ended~~27, 2021 and March 28, ~~2020.~~2020, respectively.

Share Repurchase Program

~~The Company’s Board of Directors authorized the repurchase of up to 1,000,000 shares of the Company’s common stock under a program for the period May 1, 2018 to April 30, 2019 ("2018 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") ~~to replace its previous expired 2018 program.~~. On April ~~23,~~29, 2020, the ~~Company's~~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 ~~does~~did not ~~expect to~~ repurchase any shares inof its common stock for the ~~near future due to the uncertainty of the impact and duration of COVID-19.~~

Off-Balance Sheet Arrangements

As of March ~~28, 2020,~~27, 2021, 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 ~~28, 2019.~~26, 2020. During the three months ended March ~~28, 2020,~~27, 2021, 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 Annual Report on Form 10-K for the year ended December ~~28, 2019.~~26, 2020. During the three months ended March ~~28, 2020,~~27, 2021, there have been no material changes in our exposure to market risk.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

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 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 disclosure controls and procedures as of March ~~28, 2020.~~27, 2021. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the quarter ended March ~~28, 2020,~~27, 2021, our disclosure controls and procedures were effective.


	Three Months Ended							Three Months Ended
(in thousands)	March 28, 2020			March 30, 2019			(in thousands)	March 27, 2021		March 28, 2020
OPERATING ACTIVITIES							OPERATING ACTIVITIES
Net income	$	24,644		$	36,989		Net income	$	57,713	$	24,644
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	13,821			13,088			Depreciation	13,677		13,821
Amortization of intangibles	9,981			10,191			Amortization of intangibles	10,521		9,981

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

Stock-based compensation	2,965			3,966			Stock-based compensation	3,395		2,965
Loss on investments and other assets	2,604			2,810
(Gain) loss on investments and other assets							(Gain) loss on investments and other assets	(7,675)		2,604
Deferred income taxes	616			(72		)	Deferred income taxes	378		616
Other	3,547			5,393			Other	8,537		3,547
Changes in operating assets and liabilities:							Changes in operating assets and liabilities:
Trade receivables	(9,457		)	(5,800		)	Trade receivables	(32,973)		(9,457)
Inventories	6,667			(3,250		)	Inventories	(6,152)		6,667
Accounts payable	(3,964		)	(8,499		)	Accounts payable	17,070		(3,964)

Accrued liabilities and income taxes	(7,012		)	(27,170		)	Accrued liabilities and income taxes	(15,427)		(7,012)
Prepaid expenses and other assets	(1,225		)	3,273			Prepaid expenses and other assets	(2,230)		(1,225)
Net cash provided by operating activities	45,279			30,919			Net cash provided by operating activities	50,166		45,279

INVESTING ACTIVITIES							INVESTING ACTIVITIES
Acquisitions of businesses, net of cash acquired	—			(775		)	Acquisitions of businesses, net of cash acquired	(109,852)		0

Purchases of property, plant, and equipment	(16,586		)	(14,076		)	Purchases of property, plant, and equipment	(14,721)		(16,586)
Net proceeds from sale of property, plant and equipment	50			607			Net proceeds from sale of property, plant and equipment	2,553		50
Net cash used in investing activities	(16,536		)	(14,244		)	Net cash used in investing activities	(122,020)		(16,536)

FINANCING ACTIVITIES							FINANCING ACTIVITIES
Proceeds of revolving credit facility	100,000			—			Proceeds of revolving credit facility	0		100,000
Payments of revolving credit facility							Payments of revolving credit facility	(30,000)		0

Payments of term loan	(2,500		)	(5,000		)	Payments of term loan	0		(2,500)
Net proceeds related to stock-based award activities	2,956			2,198			Net proceeds related to stock-based award activities	7,509		2,956
Purchases of common stock	(22,927		)	(17,906		)	Purchases of common stock	0		(22,927)

Cash dividends paid	(11,725		)	(10,625		)	Cash dividends paid	(11,782)		(11,725)
Net cash provided by (used in) financing activities	65,804			(31,333		)
Effect of exchange rate changes on cash and cash equivalents	(5,111		)	1,539
Increase (decrease) in cash and cash equivalents	89,436			(13,119		)
Cash and cash equivalents at beginning of period	531,139			489,733
Cash and cash equivalents at end of period	$	620,575		$	476,614
Net cash (used in) provided by financing activities							Net cash (used in) provided by financing activities	(34,273)		65,804
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)
(Decrease) increase in cash, cash equivalents, and restricted cash							(Decrease) increase in cash, cash equivalents, and restricted cash	(110,228)		89,436
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 end of period							Cash, cash equivalents, and restricted cash at end of period	$	577,297	$	620,575
Supplementary Cash Flow Information							Supplementary Cash Flow Information
Reconciliation of cash and cash equivalents:							Reconciliation of cash and cash equivalents:
Cash and cash equivalents							Cash and cash equivalents	$	572,771	$	620,575
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 other assets							Restricted cash included in other assets	$	1,064	$	0
Cash paid during the period for interest	$	7,354		$	8,011		Cash paid during the period for interest	$	6,235	$	7,354

Capital expenditures, not yet paid	$	5,832		$	—		Capital expenditures, not yet paid	$	4,141	$	5,832


(in thousands)	March 27, 2021		December 26, 2020
Employee-related liabilities	$	45,135	$	50,689
Operating lease liability	7,177		6,811
Interest	2,636		4,517
Restructuring liability	2,588		4,195
Customer liability	794		3,858
Professional services	3,010		3,321
Deferred revenue	2,713		2,959

Other non-income taxes	1,903		2,126
Other	32,398		32,002
Total	$	98,354	$	110,478



(in thousands)	March 28, 2020			December 28, 2019
Revolving Credit Facility	$	100,000		$	—
Term Loan	142,500			145,000
Euro Senior Notes, Series A due 2023	128,316			129,808
Euro Senior Notes, Series B due 2028	104,189			105,400
U.S. Senior Notes, Series A due 2022	25,000			25,000
U.S. Senior Notes, Series B due 2027	100,000			100,000
U.S. Senior Notes, Series A due 2025	50,000			50,000
U.S. Senior Notes, Series B due 2030	125,000			125,000
Other	2,619			2,619
Unamortized debt issuance costs	(3,429		)	(3,669		)
Total debt	774,195			679,158
Less: Current maturities	(10,000		)	(10,000		)
Total long-term debt	$	764,195		$	669,158


	March 28, 2020				December 28, 2019					March 27, 2021				December 26, 2020
(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	$	128,316	$	121,124	$	129,808	$	131,710	Euro Senior Notes, Series A due 2023	$	138,039	$	140,084	$	142,679	$	144,323
Euro Senior Notes, Series B due 2028	104,189		94,743		105,400		110,336		Euro Senior Notes, Series B due 2028	112,083		117,703		115,850		123,588
USD Senior Notes, Series A due 2022	25,000		24,681		25,000		25,054		USD Senior Notes, Series A due 2022	25,000		25,375		25,000		25,437
USD Senior Notes, Series B due 2027	100,000		97,097		100,000		102,548		USD Senior Notes, Series B due 2027	100,000		106,174		100,000		109,552
USD Senior Notes, Series A due 2025	50,000		48,921		50,000		50,775		USD Senior Notes, Series A due 2025	50,000		52,817		50,000		53,474
USD Senior Notes, Series B due 2030	125,000		118,648		125,000		127,701		USD Senior Notes, Series B due 2030	125,000		130,764		125,000		138,036


	Three Months Ended					Three Months Ended
(in thousands, except per share data)	March 28, 2020		March 30, 2019		(in thousands, except per share data)	March 27, 2021		March 28, 2020
Net sales	$	346,096	$	405,500	Net sales	$	463,794	$	346,096
Cost of sales	222,384		250,272		Cost of sales	303,328		221,740
Gross profit	123,712		155,228		Gross profit	160,466		124,356

Selling, general, and administrative expenses	54,386		62,955		Selling, general, and administrative expenses	58,288		51,200

Research and development expenses	14,595		21,409		Research and development expenses	14,739		14,463
Amortization of intangibles	9,981		10,191		Amortization of intangibles	10,521		9,981
Restructuring, impairment, and other charges					Restructuring, impairment, and other charges	437		3,962
Total operating expenses	78,962		94,555		Total operating expenses	83,985		79,606
Operating income	44,750		60,673		Operating income	76,481		44,750

Interest expense	5,418		5,686		Interest expense	4,673		5,418
Foreign exchange loss	2,584		4,243		Foreign exchange loss	6,837		2,584
Other expense, net	1,249		4,305
Other (income) expense, net					Other (income) expense, net	(7,737)		1,249
Income before income taxes	35,499		46,439		Income before income taxes	72,708		35,499
Income taxes	10,855		9,450		Income taxes	14,995		10,855
Net income	$	24,644	$	36,989	Net income	$	57,713	$	24,644

Income per share:
Earnings per share:					Earnings per share:
Basic	$	1.01	$	1.50	Basic	$	2.35	$	1.01
Diluted	$	1.00	$	1.48	Diluted	$	2.32	$	1.00

Weighted-average shares and equivalent shares outstanding:					Weighted-average shares and equivalent shares outstanding:
Basic	24,393		24,717		Basic	24,532		24,393
Diluted	24,578		25,009		Diluted	24,892		24,578


	Three Months Ended March 27, 2021
(in thousands)	Electronics Segment		Automotive Segment		Industrial Segment		Total
Electronics – Passive Products and Sensors	$	132,437	$	0	$	0	$	132,437
Electronics – Semiconductor	154,098		0		0		154,098
Passenger Car Products	0		67,901		0		67,901
Automotive Sensors	0		28,284		0		28,284
Commercial Vehicle Products	0		32,344		0		32,344
Industrial Products	0		0		48,730		48,730
Total	$	286,535	$	128,529	$	48,730	$	463,794



	Three Months Ended March 30, 2019
(in thousands)	Electronics Segment		Automotive Segment		Industrial Segment		Total
Electronics – Passive Products and Sensors	$	108,377	$	—	$	—	$	108,377
Electronics – Semiconductor	157,017		—		—		157,017
Passenger Car Products	—		56,543		—		56,543
Automotive Sensors	—		26,057		—		26,057
Commercial Vehicle Products	—		30,883		—		30,883
Industrial Products	—		—		26,623		26,623
Total	$	265,394	$	113,483	$	26,623	$	405,500



	As of March 28, 2020
(in thousands)	Gross Carrying Value		Accumulated Amortization		Net Book Value
Land use rights	$	9,545	$	1,755	$	7,790
Patents, licenses and software	129,380		$	80,506	$	48,874
Distribution network	43,076		36,560		6,516
Customer relationships, trademarks, and tradenames	357,188		111,975		245,213
Total	$	539,189	$	230,796	$	308,393



	As of December 28, 2019
(in thousands)	Gross Carrying Value		Accumulated Amortization		Net Book Value
Land use rights	$	9,649	$	1,730	$	7,919
Patents, licenses and software	131,164		78,828		52,336
Distribution network	43,239		36,163		7,076
Customer relationships, trademarks, and tradenames	360,534		106,618		253,916
Total	$	544,586	$	223,339	$	321,247



Leases (in thousands)	Condensed Consolidated Balance Sheet Classification	March 28, 2020		December 28, 2019
Assets
Operating ROU assets	Right of use lease assets, net	$	20,611	$	21,918
Liabilities
Current operating lease liabilities	Accrued liabilities	$	7,073	$	7,259
Non-current operating lease liabilities	Non-current operating lease liabilities	$	15,960	$	17,166
Total lease liabilities		$	23,033	$	24,425



Leases cost (in thousands)	Condensed Consolidated Statements of Net Income Classification	Three Months Ended March 28, 2020		Three Months Ended March 30, 2019
Short-term lease expenses	Cost of sales, SG&A expenses	$	117	$	153
Variable lease expenses	Cost of sales, SG&A expenses	318		194
Operating lease rent expenses	Cost of sales, SG&A expenses	2,173		2,193
Total operating lease costs	Cost of sales, SG&A expenses	$	2,608	$	2,540



Maturity of Lease Liabilities as of March 28, 2020 (in thousands)	Operating leases
2020 (excluding the three months ended March 28, 2020)	$	6,156
2021	6,620
2022	5,341
2023	3,590
2024	3,177
2025 and thereafter	498
Total lease payments	$	25,382

Present value of lease liabilities	$	23,033



Other Information (in thousands)	Three Months Ended March 28, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flow payments for operating leases	$	(2,242	)
Leased assets obtained in exchange for operating lease liabilities	848


	Fair Value Measurements Using
(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
Investments in equity securities	25,830		0		0		25,830
Mutual funds	13,397		0		0		13,397
Total	$	105,792	$	0	$	0	$	105,792


(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)

Activity in the period	454		(5,325)		(4,871)
Balance at March 27, 2021	$	(33,687)	$	(62,341)	$	(96,028)


(in thousands)	Pension and postretirement liability and reclassification adjustments			Foreign currency translation adjustment			Accumulated other comprehensive income (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 28, 2019	$	(18,046)	$	(88,777)	$	(106,823)

Activity in the period	561			(15,540		)	(14,979		)	Activity in the period	561		(15,540)		(14,979)
Balance at March 28, 2020	$	(17,485	)	$	(104,317	)	$	(121,802	)	Balance at March 28, 2020	$	(17,485)	$	(104,317)	$	(121,802)



	For the Three Months Ended March 28, 2020						For the Three Months Ended March 30, 2019
(in millions)	Powersem		EB Tech		ATEC		Powersem		EB Tech		ATEC
Sales to related party	$	0.4	$	—	$	—	$	0.1	$	—	$	—
Purchase material/ service from related party	0.2		—		1.8		0.8		0.1		1.5

	March 28, 2020						December 28, 2019
(in millions)	Powersem		EB Tech		ATEC		Powersem		EB Tech		ATEC
Accounts Receivable balance	$	0.1	$	—	$	—	$	—	$	—	$	—
Accounts Payable balance	0.1		—		—		0.2		—		0.1


•	~~Electronics Segment: Consists of one of the broadest product offerings in the industry, including fuses and fuse accessories,~~


•	~~Industrial Segment:~~ Consists of power fuses, protection relays and controls and other circuit protection products for use in various industrial applications such as oil, gas, mining, alternative energy, electric vehicle infrastructure, non-residential construction, HVAC systems, elevators and other industrial equipment.



	First three Months
(in thousands)	2020			2019
Net cash provided by operating activities	$	45,279		$	30,919
Net cash used in investing activities	(16,536		)	(14,244		)
Net cash provided by (used in) financing activities	65,804			(31,333		)
Effect of exchange rate changes on cash and cash equivalents	(5,111		)	1,539
Increase (decrease) in cash and cash equivalents	89,436			(13,119		)
Cash and cash equivalents at beginning of period	531,139			489,733
Cash and cash equivalents at end of period	$	620,575		$	476,614



Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs
2019 Program
December 29 through January 25	—	$	—	—	500,000
January 26 through February 22	—	—		—	500,000
February 23 through March 28	175,110	130.93		175,110	324,890
Total	175,110	$	130.93	175,110	324,890


		Exhibit	Description

		10.1*	Hartland Credit Agreement Joinder Agreement

		~~Exhibit~~	~~Description~~

~~10.1~~10.2*	Amended and Restated Credit Agreement, dated as of April 3, 2020, by and among Littelfuse, Inc., certain subsidiaries of the company, as designated borrowers, certain subsidiaries of the company, as guarantors, the lenders party thereto and Bank of America, N.A., as agent, JPMorgan Chase Bank, N.A., as syndication agent, PNC Bank, National Association, as senior documentation agent, BMO Harris Bank, N.A. and Wells Fargo Bank, National Association, as co-documentation agents, BofA Securities, Inc. as sole bookrunner and joint lead arranger, and JPMorgan Chase Bank, N.A., as joint lead arrangeSubsidiary Guarantor Supplement (Domestic NPA) - Hartland Subsidiariesr ~~(filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 7, 2020, Commission File No. 20388).+~~

~~10.2~~	~~Form of Restricted Stock Unit Award Agreement (Tier I) under the Littelfuse, Inc. Long-Term Incentive Plan~~ ~~(filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 24, 2020, Commission File No. 20388). ++~~

~~10.3~~	~~Form of Option Award Agreement (Tier I) under the Littelfuse, Inc. Long-Term Incentive Plan~~ ~~(filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed April 24, 2020, Commission File No. 20388). ++~~

~~10.4~~	~~Form of Restricted Stock Unit Award Agreement (Non-Employee Director) under the Littelfuse, Inc. Long-Term Incentive Plan~~ ~~(filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed April 24, 2020, Commission File No. 20388). ++~~



		~~10.5~~10.3*	~~Form of Option Award Agreement (Non-Employee Director) under the Littelfuse, Inc. Long-Term Incentive Plan~~Subsidiary Guarantor Supplement (Cross-Border NPA) - Hartland Subsidiaries ~~(filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K filed April 24, 2020, Commission File No. 20388). ++~~

10.6*	~~Form of Restricted Stock Unit Award Agreement (Tier II) under the Littelfuse, Inc. Long-Term Incentive Plan. ++~~

		10.710.4	~~Form of Restricted Stock Unit Award Agreement (IXYS Tier II) under the IXYS Corporation Equity Incentive Plan.~~Subsidiary Guarantor Supplement (Fall 2017 NPA) - Hartland Subsidiaries ++

		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 ~~28, 2020~~27, 2021 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 ~~Changes in Stockholders~~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 ~~28, 2020,~~27, 2021, formatted in Inline XBRL.

		+	Certain schedules and exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K promulgated by the SEC. The registrant agrees to furnish supplementary a copy of any omitted schedule or exhibit to the SEC upon request.
		++*	~~Management contract or compensatory plan or arrangement.~~Filed herewith.
		**	~~Filed herewith.~~
**	Furnished herewith.



	Littelfuse, Inc.

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

Date: April ~~29, 2020~~28, 2021	By:	/s/ Jeffrey G. Gorski
		Jeffrey G. Gorski
	Vice President and Chief Accounting Officer