LFUS 10-Q
Littelfuse Inc /De (LFUS)
10-Q
2025-10-29
For: 2025-09-27
View Original
Added on
April 10, 2026
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 September 27, 2025
OR
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)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| | ||||||||
| (Address of principal executive offices) | (ZIP Code) | |||||||
Registrant’s telephone number, including area code: 773 -628-1000
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of exchange on which registered | |||||||||||||||
| Global Select Market | |||||||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one): Large accelerated filer [X] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes [ ] No [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No [X ]
As of October 24, 2025, the registrant had outstanding 24,901,687 shares of Common Stock, net of Treasury Shares.
TABLE OF CONTENTS
| Page | ||||||||
| PART I | ||||||||
| Item 1. | ||||||||
| Condensed Consolidated Balance Sheets as of September 27, 2025 (unaudited) and December 28, 2024 | ||||||||
| Condensed Consolidated Statements of Net Income for the three and nine months ended September 27, 2025 (unaudited) and September 28, 2024 (unaudited) | ||||||||
| Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 27, 2025 (unaudited) and September 28, 2024 (unaudited) | ||||||||
| Condensed Consolidated Statements of Cash Flows for the nine months ended September 27, 2025 (unaudited) and September 28, 2024 (unaudited) | ||||||||
| Condensed Consolidated Statements of Stockholders' Equity for the nine months ended September 27, 2025 (unaudited) and September 28, 2024 (unaudited) | ||||||||
| Item 2. | ||||||||
| Item 3. | ||||||||
| Item 4. | ||||||||
PART II | ||||||||
| Item 1. | ||||||||
| Item 1A. | ||||||||
| Item 2. | ||||||||
| Item 3. | ||||||||
| Item 4. | ||||||||
| Item 5. | ||||||||
| Item 6. | ||||||||
2
ITEM 1. FINANCIAL STATEMENTS
LITTELFUSE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| (Unaudited) | ||||||||||||||
| (in thousands, except share and per share data) | September 27, 2025 | December 28, 2024 | ||||||||||||
| ASSETS | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents (Note 1) | $ | $ | ||||||||||||
| Short-term investments | ||||||||||||||
Trade receivables, less allowances of $ | ||||||||||||||
| Inventories (Note 3) | ||||||||||||||
| Prepaid income taxes and income taxes receivable | ||||||||||||||
| Prepaid expenses and other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
| Net property, plant, and equipment (Note 4) | ||||||||||||||
| Intangible assets, net of amortization (Note 5) | ||||||||||||||
| Goodwill (Note 5) | ||||||||||||||
| Investments | ||||||||||||||
| Deferred income taxes | ||||||||||||||
| Right of use lease assets | ||||||||||||||
| Other long-term assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | $ | ||||||||||||
| Accrued liabilities (Note 6) | ||||||||||||||
| Accrued income taxes | ||||||||||||||
| Current portion of long-term debt (Note 8) | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Long-term debt, less current portion (Note 8) | ||||||||||||||
| Deferred income taxes | ||||||||||||||
| Accrued post-retirement benefits | ||||||||||||||
| Non-current lease liabilities | ||||||||||||||
| Other long-term liabilities | ||||||||||||||
| Total liabilities | $ | $ | ||||||||||||
| Commitments and contingencies (Note 15) | ||||||||||||||
| Shareholders’ equity: | ||||||||||||||
Common stock, par value $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
Treasury stock, at cost: | ( | ( | ||||||||||||
| Accumulated other comprehensive loss | ( | ( | ||||||||||||
| Retained earnings | ||||||||||||||
| Littelfuse, Inc. shareholders’ equity | ||||||||||||||
| Non-controlling interest | ||||||||||||||
| Total equity | ||||||||||||||
| Total liabilities and equity | $ | $ | ||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
3
LITTELFUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| (in thousands, except per share data) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Cost of sales | ||||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||||
| Selling, general, and administrative expenses | ||||||||||||||||||||||||||
| Research and development expenses | ||||||||||||||||||||||||||
| Amortization of intangibles | ||||||||||||||||||||||||||
| Restructuring, impairment, and other charges | ||||||||||||||||||||||||||
| Total operating expenses | ||||||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||
| Foreign exchange loss | ||||||||||||||||||||||||||
| Other income, net | ( | ( | ( | ( | ||||||||||||||||||||||
| Income before income taxes | ||||||||||||||||||||||||||
| Income taxes | ||||||||||||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||||||||||||
| Earnings per share: | ||||||||||||||||||||||||||
| Basic | $ | $ | $ | $ | ||||||||||||||||||||||
| Diluted | $ | $ | $ | $ | ||||||||||||||||||||||
| Weighted-average shares and equivalent shares outstanding: | ||||||||||||||||||||||||||
| Basic | ||||||||||||||||||||||||||
| Diluted | ||||||||||||||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
4
LITTELFUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| (in thousands) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||||||||||||
| Other comprehensive income (loss): | ||||||||||||||||||||||||||
| Pension and postemployment adjustments, net of tax | ||||||||||||||||||||||||||
| Cash flow hedges, net of tax | ( | ( | ||||||||||||||||||||||||
| Foreign currency translation adjustments, net of tax | ( | |||||||||||||||||||||||||
| Comprehensive income | $ | $ | $ | $ | ||||||||||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
5
LITTELFUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Nine Months Ended | ||||||||||||||
| (in thousands) | September 27, 2025 | September 28, 2024 | ||||||||||||
| OPERATING ACTIVITIES | ||||||||||||||
| Net income | $ | $ | ||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
| Depreciation | ||||||||||||||
| Amortization of intangibles | ||||||||||||||
| Deferred revenue | ( | |||||||||||||
| Impairment charges | ||||||||||||||
| Stock-based compensation | ||||||||||||||
| Loss (gain) on investments and other assets | ( | |||||||||||||
| Deferred income taxes | ( | |||||||||||||
| Other | ||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| Trade receivables | ( | ( | ||||||||||||
| Inventories | ||||||||||||||
| Accounts payable | ||||||||||||||
| Accrued liabilities and income taxes | ( | |||||||||||||
| Prepaid expenses and other assets | ( | |||||||||||||
| Net cash provided by operating activities | ||||||||||||||
| INVESTING ACTIVITIES | ||||||||||||||
| Acquisitions of businesses, net of cash acquired | ( | |||||||||||||
| Purchases of property, plant, and equipment | ( | ( | ||||||||||||
| Net proceeds from sale of property, plant and equipment, and other | ||||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||
| FINANCING ACTIVITIES | ||||||||||||||
| Payments of senior notes payable | ( | |||||||||||||
| Repayments of other debts | ( | ( | ||||||||||||
| Payments of term loan | ( | ( | ||||||||||||
| Net proceeds related to stock-based award activities | ||||||||||||||
| Repurchases of common stock, with excise tax | ( | ( | ||||||||||||
| Cash dividends paid | ( | ( | ||||||||||||
| Net cash used in financing activities | ( | ( | ||||||||||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | ( | |||||||||||||
| Increase in cash, cash equivalents, and restricted cash | ||||||||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | ||||||||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | $ | ||||||||||||
| Supplementary Cash Flow Information | ||||||||||||||
| Reconciliation of cash and cash equivalents: | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Restricted cash included in other long-term assets | ||||||||||||||
| Cash paid during the period for interest | ||||||||||||||
| Capital expenditures, not yet paid | ||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
6
LITTELFUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
| Littelfuse, Inc. Shareholders’ Equity | |||||||||||||||||||||||||||||||||||||||||
| (in thousands, except share and per share data) | Common Stock | Addl. Paid in Capital | Treasury Stock | Accum. Other Comp. Income (Loss) | Retained Earnings | Non-controlling Interest | Total | ||||||||||||||||||||||||||||||||||
| Balance at December 28, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Non-controlling interest | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||
| Withheld shares on restricted share units for withholding taxes | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Stock options exercised | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Repurchases of common stock, with excise tax | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Cash dividends paid ($ | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
| Balance at March 29, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Non-controlling interest | — | ( | — | — | ( | ( | |||||||||||||||||||||||||||||||||||
| Withheld shares on restricted share units for withholding taxes | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Stock options exercised | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Excise tax adjustment on stock options exercised | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Cash dividends paid ($ | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
| Balance at June 28, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Non-controlling interest | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Withheld shares on restricted share units for withholding taxes | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Stock options exercised | |||||||||||||||||||||||||||||||||||||||||
| Excise tax adjustment on stock options exercised | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Cash dividends paid ($ | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
| Balance at September 27, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||
7
| 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 30, 2023 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Non-controlling interest | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||
| Withheld shares on restricted share units for withholding taxes | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Stock options exercised | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Repurchases of common stock, with excise tax | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Cash dividends paid ($ | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
| Balance at March 30, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Non-controlling interest | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||
| Withheld shares on restricted share units for withholding taxes | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Stock options exercised | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Repurchases of common stock, with excise tax | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Cash dividends paid ($ | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
| Balance at June 29, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Other comprehensive gain, net of tax | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Non-controlling interest | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Withheld shares on restricted share units for withholding taxes | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Stock options exercised | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Excise tax adjustment on stock options exercised | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Cash dividends paid ($ | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
| Balance at September 28, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
8
Notes to Condensed Consolidated Financial Statements
1. Summary of Significant Accounting Policies and Other Information
Nature of Operations
Founded in 1927, Littelfuse, Inc. ("Littelfuse" or the "Company") is a diversified, industrial technology manufacturing company empowering a sustainable, connected, and safer world. Across more than 20 countries, and with approximately 16,000 global associates, the Company partners with customers to design and deliver innovative, reliable solutions. Serving over 100,000 end customers, the Company’s products are found in a variety of industrial, transportation and electronics end markets – everywhere, every day.
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 statements of stockholders' equity prepared in conformity with U.S. GAAP have been condensed or omitted as permitted by such rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. 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, 2024, which should be read in conjunction with the disclosures therein. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal, recurring nature. Operating results for interim periods are not necessarily indicative of annual operating results.
Revenue Recognition
Revenue Disaggregation
The following tables disaggregate the Company’s revenue by primary business units for the three and nine months ended September 27, 2025 and September 28, 2024:
| Three Months Ended September 27, 2025 | Nine Months Ended September 27, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Electronics Segment | Transportation Segment | Industrial Segment | Total | Electronics Segment | Transportation Segment | Industrial Segment | Total | ||||||||||||||||||||||||||||||||||||||||||
| Electronics – Semiconductor | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Electronics – Passive Products and Sensors | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial Vehicle Products | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Passenger Car Products | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Automotive Sensors | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Industrial Products | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
9
| Three Months Ended September 28, 2024 | Nine Months Ended September 28, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Electronics Segment | Transportation Segment | Industrial Segment | Total | Electronics Segment | Transportation Segment | Industrial Segment | Total | ||||||||||||||||||||||||||||||||||||||||||
| Electronics – Semiconductor | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Electronics – Passive Products and Sensors | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial Vehicle Products | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Passenger Car Products | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Automotive Sensors | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Industrial Products | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
See Note 14, Segment Information, for net sales by segment and country.
Revenue Recognition
The Company recognizes revenue on product sales in the period in which the Company satisfies its performance obligation and control of the product is transferred to the customer. The Company’s sales arrangements with customers are predominately short term in nature and generally provide for transfer of control at the time of shipment as this is the point at which title and risk of loss of the product transfers to the customer. At the end of each period, for those shipments where title to the products and the risk of loss and rewards of ownership do not transfer until the product has been received by the customer, the Company adjusts revenues and cost of sales for the delay between the time that the products are shipped and when they are received by the customer. The amount of revenue recorded reflects the consideration to which the Company expects to be entitled in exchange for goods and may include adjustments for customer allowances, rebates and price adjustments. The Company’s distribution channels are primarily through direct sales and independent third-party distributors.
The Company has elected the practical expedient under Accounting Standards Codification ("ASC") 340-40-25-4 to expense commissions when incurred as the amortization period of the commission asset the Company would have otherwise recognized is less than one year.
Revenue and Billing
The Company generally accepts orders from customers through receipt of purchase orders or electronic data interchange based on written sales agreements and purchasing contracts. Contract pricing and selling agreement terms are based on market factors, costs, and competition. Pricing is often negotiated as an adjustment (premium or discount) from the Company’s published price lists. The customer is invoiced when the Company’s products are shipped to them in accordance with the terms of the sales agreement. As the Company’s standard payment terms are less than one year, the Company elected the practical expedient under ASC 606-10-32-18 to not assess whether a contract has a significant financing component. The Company also elected the practical expedient provided in ASC 606-10-25-18B to treat all product shipping and handling activities as fulfillment activities, and therefore recognize the gross revenue associated with the contract, inclusive of any shipping and handling revenue.
Ship and Debit Program
Some of the terms of the Company’s sales agreements and normal business conditions provide customers (distributors) the ability to receive price adjustments on products previously shipped and invoiced. This practice is common in the industry and is referred to as a “ship and debit” program. This program allows the distributors 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
10
historical activity, distributor inventory levels and actual authorizations for the debit and recognizes these debits as a reduction of revenue.
Return to Stock
The Company has a return to stock policy whereby certain customers, with prior authorization from the Company's management, can return previously purchased goods for full or partial credit. The Company establishes an estimated allowance for these returns based on historical activity. Sales revenue and cost of sales are reduced to anticipate estimated returns.
Volume Rebates
The Company offers volume-based sales incentives to certain customers to encourage greater product sales. If customers achieve their specific quarterly or annual sales targets, they are entitled to rebates. The Company estimates the projected amount of rebates that will be achieved by the customer and recognizes this estimated cost as a reduction to revenue as products are sold.
Cash, Cash Equivalents, and Restricted Cash
The following table provides a reconciliation of cash, cash equivalents, and restricted cash at September 27, 2025 and December 28, 2024 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) | September 27, 2025 | December 28, 2024 | ||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Restricted cash included in other long-term assets | ||||||||||||||
| Total cash, cash equivalents, and restricted cash | $ | $ | ||||||||||||
Recently Issued Accounting Standards
In September 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("ASU") No. 2025-06, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software." The amendments in this update require the entity to start capitalizing software costs when both of the following criteria are met: (1) management has authorized and committed to funding the software project, and (2) it is probable that the project will be completed and the software will be used to perform the function intended (referred to as the "probable-to-complete recognition threshold"). The amendments clarify that the intangibles disclosures are not required for capitalized internal-use software costs. Additionally, the amendments in this update supersede the website development costs guidance and incorporate the recognition requirements for website-specific development costs. The guidance is effective for fiscal years beginning after December 15, 2027 with early adoption permitted. The Company is currently evaluating the potential effects of these amendments on its Condensed Consolidated Financial Statements.
In September 2025, the FASB issued ASU No. 2025-05, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets." The amendments in this update provide entities with a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. In developing reasonable and supportable forecasts as part of estimating expected credit losses, the practical expedient allows entities to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. The guidance is effective for fiscal years beginning after December 15, 2025 with early adoption permitted. The Company does not expect any material effect of the adoption of this guidance on the Company's Condensed Consolidated Financial Statements.
In November 2024, the FASB issued ASU No. 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)." The amendments in this update require disclosure, in the notes to financial statements, of specified information about certain costs and expenses. The amendments require that at each interim and annual reporting period an entity (a) disclose the amounts of (i) purchases of inventory, (ii) employee compensation, (iii) depreciation, (iv) intangible asset amortization, and (v) depreciation, depletion, and amortization recognized as part of oil and gas producing activities ("DD&A") included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed in (i)-(v); (b) include certain amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirements (c) disclose a qualitative description of the amounts remaining in relevant expense captions that are
11
not separately disaggregated quantitatively (d) disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The guidance is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The adoption of this guidance will increase the Company's disclosures in its Consolidated Financial Statements. The Company is currently evaluating the potential impact on the disclosures in the Company's Condensed Consolidated Financial Statements.
In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." The amendments in this update provide more transparency about income tax information through improvements to the income tax disclosure primarily related to the income tax rate reconciliation and income taxes paid information. These requirements include: (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The other amendments in this update improve the effectiveness and comparability of disclosures by (3) adding disclosures of pretax income (or loss) and income tax expense (or benefit), and (4) removing disclosures that are no longer considered cost beneficial or relevant. The guidance is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. The adoption of this guidance will modify disclosures in the Company's Condensed Consolidated Financial Statements.
In October 2023, the FASB issued ASU No. 2023-06, "Disclosure Improvements." The amendments in this update represent changes to clarify or improve the disclosure or presentation requirements of a variety of Topics in the ASC. The Company may be affected by one or more of those amendments. The amendments in this ASU should be applied prospectively and will not be effective until June 30, 2027. The Company is currently evaluating the potential effects of these amendments on its Condensed Consolidated Financial Statements.
2. Acquisitions
The Company accounts for acquisitions using the acquisition method in accordance with ASC 805, “Business Combinations,” in which assets acquired and liabilities assumed are recorded at fair value as of the date of acquisition. The operating results of the acquired business are included in the Company’s Condensed Consolidated Financial Statements from the date of the acquisition.
Dortmund Fab
On December 31, 2024, the Company completed the acquisition of a 200mm wafer fab located in Dortmund, Germany (“Dortmund Fab”) from Elmos Semiconductor SE. The total purchase price for the Dortmund Fab was approximately €94 million, of which a €37.2 million down payment (approximately $40.5 million) was paid in the third quarter of 2023 after regulatory approvals, and €56.7 million (approximately $58.8 million) was paid at closing. The business is reported in the Electronics-Semiconductor business within the Company’s Electronics segment.
The acquisition was funded with cash on hand. The total purchase consideration of $95.9 million, net of cash acquired, has been allocated to assets acquired and liabilities assumed, as of the completion of the acquisition, based on estimated fair values.
The following table summarizes the final purchase price allocation of the fair value of assets acquired and liabilities assumed in the Dortmund Fab acquisition:
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| (in thousands) | Purchase Price Allocation | ||||
| Total purchase consideration: | |||||
| Cash, net of cash acquired | $ | ||||
| Allocation of consideration to assets acquired and liabilities assumed: | |||||
| Trade receivables | |||||
| Inventories | |||||
| Other current assets | |||||
| Property, plant, and equipment | |||||
| Intangible assets | |||||
| Goodwill | |||||
| Other long-term assets | |||||
| Current liabilities | ( | ||||
| Other long-term liabilities | ( | ||||
| $ | |||||
All Dortmund Fab assets and liabilities were recorded in the Electronics segment and are primarily reflected in the Europe geographic area. The goodwill resulting from this acquisition consists largely of the Company’s expected future product sales and synergies from combining Dortmund Fab’s products and technology with the Company’s existing semiconductor products portfolio. Goodwill resulting from the Dortmund Fab acquisition is expected to be deductible for tax purposes.
During the three months ended June 28, 2025, the Company recorded measurement period adjustments to decrease other current assets of $0.2 million and deferred tax liability of $0.1 million. As a result of these adjustments, goodwill was increased by $0.1 million accordingly. In addition, the Company made a reclassification adjustment of $0.8 0.2 million in the three months ended June 28, 2025.
During the three months ended September 27, 2025, the Company recorded an additional measurement period adjustment to decrease other long-term liabilities and goodwill by $0.2 million accordingly.
Included in the Company’s Condensed Consolidated Statements of Net Income for the three and nine months ended September 27, 2025 were net sales of $12.9 million and $36.4 million, respectively, and loss before income taxes was $1.5 million and $3.9 million, respectively, since the December 31, 2024 acquisition of Dortmund Fab.
As required by purchase accounting guidance, the Company recorded a $0.5 million step-down of inventory to its fair value as of the acquisition date based on the valuation. The step-down was fully amortized as a non-cash credit to cost of sales during the first fiscal quarter of 2025 as the acquired inventory was sold and reflected as other non-segment costs.
During the nine months ended September 28, 2024, the Company incurred approximately $0.2 million of legal and professional fees related to the Dortmund Fab acquisition recognized as Selling, general, and administrative expenses in the Condensed Consolidated Statements of Net Income. A total of $3.5 million of legal and professional fees related to the Dortmund Fab acquisition was recognized since 2023. These costs were reflected as other non-segment costs.
Pro Forma Results
The following table summarizes, on an unaudited pro forma basis, the combined results of operations of the Company and Dortmund Fab as though the acquisition had occurred as of December 31, 2023. The pro forma amounts presented are not necessarily indicative of either the actual consolidated results had the Dortmund Fab acquisition occurred as of December 31, 2023, or of future consolidated operating results.
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| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||
| (in thousands, except per share amounts) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Income before income taxes | ||||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||
| Net income per share — basic | ||||||||||||||||||||||||||
| Net income per share — diluted | ||||||||||||||||||||||||||
Pro forma results presented above primarily reflect the following adjustments:
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||
| (in thousands) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||||||||||||
| Amortization of unfavorable production contract (a) | $ | $ | $ | — | $ | |||||||||||||||||||||
| Amortization of inventory step-down (b) | — | ( | ||||||||||||||||||||||||
| Depreciation | ( | — | ( | |||||||||||||||||||||||
| Amortization (c) | ( | — | ( | |||||||||||||||||||||||
| Transaction costs (d) | ( | ( | ||||||||||||||||||||||||
| Income tax (expense) benefit of above items | ( | ( | ||||||||||||||||||||||||
(a) The amortization of the unfavorable production contract during the three and nine months ended September 28, 2024 results from the fair value assigned to the unfavorable production contract liability that is amortized over four years.
(b) The amortization of the inventory step-down adjustment reflects the reversal of the amount recognized during the nine months ended September 27, 2025, and the recognition of the amortization during the nine months ended September 28, 2024. The inventory step-down was fully amortized over two months as the inventory was sold.
(c) The amortization adjustment for the three and nine months ended September 28, 2024 primarily reflects amortization resulting from the measurement of intangibles at their fair values.
(d) The transaction costs adjustment reflects certain legal and professional fees for the nine months ended September 27, 2025 and three and nine months ended September 28, 2024, respectively.
3. Inventories
The components of inventories at September 27, 2025 and December 28, 2024 were as follows:
| (in thousands) | September 27, 2025 | December 28, 2024 | ||||||||||||
| Raw materials | $ | $ | ||||||||||||
| Work in process | ||||||||||||||
| Finished goods | ||||||||||||||
| Inventory reserves | ( | ( | ||||||||||||
| Total | $ | $ | ||||||||||||
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4. Property, Plant, and Equipment, net
The components of net property, plant, and equipment at September 27, 2025 and December 28, 2024 were as follows:
| (in thousands) | September 27, 2025 | December 28, 2024 | ||||||||||||
| Land and land improvements | $ | $ | ||||||||||||
| Building and building improvements | ||||||||||||||
| Machinery and equipment | ||||||||||||||
| Accumulated depreciation and amortization | ( | ( | ||||||||||||
| Total | $ | $ | ||||||||||||
The Company recorded depreciation expense of $18.6 million and $17.3 million for the three months ended September 27, 2025 and September 28, 2024, respectively, and $56.4 million and $51.0 million for the nine months ended September 27, 2025 and September 28, 2024, respectively, in Cost of sales, Selling, general, and administrative expenses, and Research and development expenses in the Condensed Consolidated Statements of Net Income.
5. Goodwill and Other Intangible Assets
The amounts for goodwill and changes in the carrying value of goodwill by segment for the nine months ended September 27, 2025 were as follows:
| (in thousands) | Electronics | Transportation | Industrial | Total | ||||||||||||||||||||||
Net goodwill as of December 28, 2024 | ||||||||||||||||||||||||||
Gross goodwill as of December 28, 2024 | $ | $ | $ | $ | ||||||||||||||||||||||
Accumulated impairment losses as of December 28, 2024 | ( | ( | ( | |||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||
Changes during 2025: | ||||||||||||||||||||||||||
| Additions (a) | ||||||||||||||||||||||||||
| Foreign currency translation adjustments | ||||||||||||||||||||||||||
Net goodwill as of September 27, 2025 | ||||||||||||||||||||||||||
Gross goodwill as of September 27, 2025 | ||||||||||||||||||||||||||
Accumulated impairment losses as of September 27, 2025 | ( | ( | ( | |||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||
(a) The additions resulted from the acquisition of Dortmund Fab.
The components of intangible assets as of September 27, 2025 and December 28, 2024 were as follows:
| As of September 27, 2025 | |||||||||||||||||
| (in thousands) | Gross Carrying Value | Accumulated Amortization | Net Book Value | ||||||||||||||
| Land use rights | $ | $ | $ | ||||||||||||||
| Patents, licenses, and software | |||||||||||||||||
| Distribution network | |||||||||||||||||
| Customer relationships, trademarks, and tradenames | |||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
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As of December 28, 2024 | |||||||||||||||||
| (in thousands) | Gross Carrying Value | Accumulated Amortization | Net Book Value | ||||||||||||||
| Land use rights | $ | $ | $ | ||||||||||||||
| Patents, licenses, and software | |||||||||||||||||
| Distribution network | |||||||||||||||||
| Customer relationships, trademarks, and tradenames | |||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
During the three months ended September 27, 2025 and September 28, 2024, the Company recorded amortization expense of $15.0 million and $15.9 million, respectively. During the nine months ended September 27, 2025 and September 28, 2024, the Company recorded amortization expense of $44.2 million and $47.4 million, respectively.
During the nine months ended September 27, 2025, the Company recorded additions to intangible assets of $1.8 million related to the Dortmund Fab acquisition, the components of which were as follows:
(in thousands) | Weighted Average Useful Life | Amount | |||||||||
| Customer relationships, trademarks, and tradenames | $ | ||||||||||
| Total | $ | ||||||||||
Estimated annual amortization expense related to intangible assets with definite lives as of September 27, 2025 was as follows:
(in thousands) | Amount | ||||
| Remainder of 2025 | $ | ||||
| 2026 | |||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 and thereafter | |||||
| Total | $ | ||||
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6. Accrued Liabilities
The components of accrued liabilities as of September 27, 2025 and December 28, 2024 were as follows:
| (in thousands) | September 27, 2025 | December 28, 2024 | ||||||||||||
| Employee-related liabilities | $ | $ | ||||||||||||
| Current lease liability | ||||||||||||||
| Other non-income taxes | ||||||||||||||
| Professional services | ||||||||||||||
| Interest | ||||||||||||||
| Restructuring liability | ||||||||||||||
| Deferred revenue | ||||||||||||||
| Other customer reserves | ||||||||||||||
| Current benefit liability | ||||||||||||||
| Current hedge liability | ||||||||||||||
| Other | ||||||||||||||
| Total | $ | $ | ||||||||||||
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 customer-related liabilities.
7. Restructuring, Impairment, and Other Charges
The Company recorded restructuring, impairment, and other charges for the three and nine months ended September 27, 2025 and September 28, 2024 as follows:
| Three Months Ended September 27, 2025 | Nine Months Ended September 27, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Electronics | Transportation | Industrial | Total | Electronics | Transportation | Industrial | Total | |||||||||||||||||||||||||||||||||||||||
| Employee terminations | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Other restructuring charges | |||||||||||||||||||||||||||||||||||||||||||||||
| Total restructuring charges | |||||||||||||||||||||||||||||||||||||||||||||||
| Impairment | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 28, 2024 | Nine Months Ended September 28, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Electronics | Transportation | Industrial | Total | Electronics | Transportation | Industrial | Total | |||||||||||||||||||||||||||||||||||||||
| Employee terminations | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Other restructuring charges | |||||||||||||||||||||||||||||||||||||||||||||||
| Total restructuring charges | |||||||||||||||||||||||||||||||||||||||||||||||
| Impairment | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
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2025
For the three and nine months ended September 27, 2025, the Company recorded total restructuring charges of $1.6 million and $13.0 million, respectively, primarily for employee termination costs. These charges primarily related to the reorganization of certain manufacturing, selling and corporate support functions for the semiconductor business within the Electronics segment and across all businesses within the Transportation segment. In addition, during the first fiscal quarter of 2025, the Company recognized a $0.1 million impairment charge related to certain machinery and equipment within the Electronics segment.
2024
For the three and nine months ended September 28, 2024, the Company recorded total restructuring charges of $1.8 million and $9.4 million, respectively, primarily for employee termination costs. These charges primarily related to the reorganization of certain manufacturing, selling and administrative functions within the semiconductor business in the Electronics segment and the reorganization of certain selling and administrative functions within the commercial vehicle business in the Transportation segment. In addition, during the first fiscal quarter of 2024, the Company recognized a $0.9 million impairment charge related to certain machinery and equipment in the commercial vehicle business within the Transportation segment.
The restructuring reserves as of September 27, 2025 and December 28, 2024 were $4.2 million and $4.6 million, respectively. The restructuring liability as of September 27, 2025 was $4.2 million and 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 during fiscal year 2025.
8. Debt
The carrying amounts of debt at September 27, 2025 and December 28, 2024 were as follows:
| (in thousands) | September 27, 2025 | December 28, 2024 | ||||||||||||
| Revolving credit facility | $ | $ | ||||||||||||
| Term loan | ||||||||||||||
| Euro Senior Notes, Series B due 2028 | ||||||||||||||
| U.S. Senior Notes, Series A due 2025 | ||||||||||||||
| U.S. Senior Notes, Series B due 2027 | ||||||||||||||
| U.S. Senior Notes, Series B due 2030 | ||||||||||||||
| U.S. Senior Notes, due 2032 | ||||||||||||||
| Other | ||||||||||||||
| Unamortized debt issuance costs | ( | ( | ||||||||||||
| Total debt | ||||||||||||||
| Less: Current maturities | ( | ( | ||||||||||||
| Total long-term debt | $ | $ | ||||||||||||
Revolving Credit Facility and Term Loan
On June 30, 2022, the Company amended and restated its Credit Agreement, dated as of April 3, 2020 (the “Credit Agreement”) to effect certain changes, including, among other changes: (i) adding a $300 million unsecured term loan credit facility; (ii) making certain financial and non-financial covenants less restrictive on the Company and its subsidiaries; (iii) replacing LIBOR-based interest rate benchmarks and modifying performance-based interest rate margins; and (iv) extending the maturity date to June 30, 2027 (the “Maturity Date”). Pursuant to the Credit Agreement, the Company may, from time to time, increase the size of the revolving credit facility or enter into one or more tranches of term loans in minimum increments of $25 million if there is no event of default and the Company is in compliance with certain financial covenants.
Loans made under the available credit facility pursuant to the Credit Agreement ("the Credit Facility") bear interest at the Company’s option, at either Secured Overnight Financing Rate ("SOFR"), fixed for interest periods of one, two, three or six-month periods, plus 1.00 % to 1.75 %, plus a SOFR adjustment of 0.10 % or at the bank’s Base Rate, as defined in the Credit Agreement, plus 0.00 % to 0.75 %, based upon the Company’s Consolidated Leverage Ratio, as defined in the Credit Agreement. The Company is also required to pay commitment fees on unused portions of the Credit Facility ranging from 0.10 % to 0.175 %, based on the Consolidated Leverage Ratio, as defined in the Credit Agreement. The Credit Agreement includes representations, covenants and events of default that are customary for financing transactions of this nature.
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Under the Credit Agreement, revolving loans may be borrowed, repaid and reborrowed until the Maturity Date, at which time all amounts borrowed must be repaid. The Company borrowed $300.0 million under a term loan on June 30, 2022. The principal balance of the term loans must be repaid in quarterly installments on the last day of each calendar quarter in the amount of $1.9 million commencing September 30, 2022, through June 30, 2024, and in the amount of $3.8 million commencing September 30, 2024, through March 31, 2027, with the remaining outstanding principal balance payable in full on the Maturity Date. Accrued interest on the loans is payable in arrears on each interest payment date applicable thereto and at such other times as may be specified in the Credit Agreement. Subject to certain conditions, (i) the Company may terminate or reduce the Aggregate Revolving Commitments, as defined in the Credit Agreement, in whole or in part, and (ii) the Company may prepay the revolving loans or the term loans at any time, without premium or penalty. During the three and nine months ended September 27, 2025, the Company made term loan payments of $3.8 million and $11.3 million, respectively. The revolving loan and term loan balances under the Credit Facility were $100.0 million and $270.0 million, respectively, as of September 27, 2025.
On May 12, 2022, the Company entered into an interest rate swap agreement to manage interest rate risk exposure, effectively converting the interest rate on the Company's SOFR based floating-rate loans to a fixed-rate. The interest rate swap, with a notional value of $200 million, was designated as a cash flow hedge against the variability of cash flows associated with the Company's SOFR based loans scheduled to mature on June 30, 2027.
As of September 27, 2025, the effective interest rate on the unhedged portion of the outstanding borrowings under the credit facility was 5.26 %, and 4.13 % on the hedged portion.
As of September 27, 2025, the Company had $0.1 million outstanding letters of credit and had $599.9 million of borrowing capacity available under the revolving credit facility. As of September 27, 2025, the Company was in compliance with all covenants under the Credit Agreement.
Senior Notes
On December 8, 2016, the Company entered into a Note Purchase Agreement, pursuant to which the Company issued and sold €212 million aggregate principal amount of senior notes in two series. The funding date for the Euro denominated senior notes occurred on December 8, 2016 for €117 million in aggregate amount of 1.14 % Senior Notes, Series A, due December 8, 2023 (“Euro Senior Notes, Series A due 2023”), and €95 million in aggregate amount of 1.83 % Senior Notes, Series B due December 8, 2028 (“Euro Senior Notes, Series B due 2028”) (together, the “Euro Senior Notes”). During the fiscal year ended December 30, 2023, the Company paid off €117 million of Euro Senior Notes, Series A due on December 8, 2023. Interest on the Euro Senior Notes due 2028 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”) were funded. During the fiscal year ended December 31, 2022, the Company paid off $25 million of U.S. Senior Notes, Series A due on February 15, 2022. Interest on the U.S. Senior Notes due 2027 is payable semiannually on February 15 and August 15, commencing August 15, 2017.
On November 15, 2017, the Company entered into a Note Purchase Agreement pursuant to which the Company issued and sold $175 million in aggregate principal amount of senior notes in two series. 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”) were funded. During the first fiscal quarter of 2025, the Company paid off $50 million of U.S. Senior Notes, Series A, due February 15, 2025. Interest on the U.S. Senior Notes, series B due 2030 is payable semiannually on February 15 and August 15, commencing on August 15, 2018.
On May 18, 2022, the above note purchase agreements were amended to, among other things, update certain terms, including financial covenants to be consistent with the terms of the restated Credit Agreement and the 2022 Purchase Agreement, as defined below.
On May 18, 2022, the Company entered into a Note Purchase Agreement (“2022 Purchase Agreement”) pursuant to which the Company issued and funded on July 18, 2022 $100 million in aggregate principal amount of 4.33 % Senior Notes, due June 30, 2032 (“U.S. Senior Notes due 2032”) (together with the U.S. Senior Notes due 2025 and 2030, the Euro Senior Notes and the U.S. Senior Notes due 2022 and 2027, the “Senior Notes”). Interest on the U.S. Senior Notes due 2032 is payable semiannually on June 30 and December 30, commencing on December 30, 2022.
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The Senior Notes have not been registered under the Securities Act of 1933 ("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. As of September 27, 2025, 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 note holders and is required to offer to repurchase the Senior Notes at par following certain events, including a change of control.
Interest paid on all Company debt was $11.1 million and $10.5 million for the three months ended September 27, 2025 and September 28, 2024, respectively, and $29.0 million and $30.1 million for the nine months ended September 27, 2025 and September 28, 2024, respectively, which included cash settlements received from the interest rate swap entered on May 12, 2022.
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.
There were no transfers in or out of Level 1, Level 2 or Level 3 during the period.
Following is a description of the valuation methodologies used for instruments measured at fair value and their classification in the valuation hierarchy.
Cash Equivalents
Cash equivalents primarily consist of money market funds, certificates of deposit, and short-term time deposits, which are held with institutions with sound credit ratings and are highly liquid. The Company classified cash equivalents as Level 1 and were 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 long-term assets.
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Derivatives Designated as Hedging Instruments
For derivatives that will be accounted for as hedging instruments, the Company formally designates and documents, at inception, the financial instrument as a hedge of a specific underlying exposure, the risk management objective and the strategy for undertaking the hedge transaction. In addition, the Company formally assesses, both at the inception and at least quarterly thereafter, whether the financial instruments used in hedging transactions are effective at offsetting changes in either the fair values or cash flows of the related underlying exposures. For highly effective cash flow hedges, ASC 815 requires the entire change in fair value of the hedging instrument included in the assessment of hedge effectiveness to be recorded in other comprehensive income. No components of the Company's hedging instruments were excluded from the assessment of hedge effectiveness.
Zero Cost Collar Agreement
In July 2024, the Company implemented a hedging program to manage foreign currency risk exposure related to fluctuations between the U.S. dollar and Mexican peso. These foreign currency zero cost collars are designated as cash flow hedges for a portion of our Mexican peso-denominated manufacturing expenses, predominantly salary expenses, vendor payments, and utility expenses. If the spot rate is between the weighted-average ceiling and floor rates on the date of maturity, then the Company would not owe or receive any payments under these collars. The Company plans to continue executing zero cost collars with 14-month rolling maturities as an ongoing strategy to hedge peso-denominated manufacturing expenses. The trade entry date, maturity date, weighted-average floor, and weighted-average ceiling for each collar trade was as follows:
| Trade Entry Date | Trade Maturity Date | Weighted-Average Floor | Weighted-Average Ceiling | ||||||||
| July 3, 2024 | August 29, 2025 | ||||||||||
| August 5, 2024 | September 29, 2025 | ||||||||||
| September 3, 2024 | November 3, 2025 | ||||||||||
| September 30, 2024 | November 26, 2025 | ||||||||||
| November 4, 2024 | January 2, 2026 | ||||||||||
| December 3, 2024 | February 2, 2026 | ||||||||||
| January 2, 2025 | March 2, 2026 | ||||||||||
| February 6, 2025 | March 30, 2026 | ||||||||||
| April 9, 2025 | June 1, 2026 | ||||||||||
| May 1, 2025 | June 29, 2026 | ||||||||||
| June 4, 2025 | August 3, 2026 | ||||||||||
| July 2, 2025 | August 31, 2026 | ||||||||||
| August 5, 2025 | September 29, 2026 | ||||||||||
| September 2, 2025 | November 2, 2026 | ||||||||||
The fair value of the collars was determined using an independent third-party valuation model. Pursuant to this model, changes in fair value of derivatives that are designated as cash flow hedges are deferred in accumulated other comprehensive loss until the underlying transactions are recognized in earnings. For the three and nine months ended September 27, 2025, the Company recorded pre-tax unrealized gains on the collars of $1.3 million and $10.7 million, respectively. As of September 27, 2025, the Company estimates that approximately $7.1 million of pre-tax gain recorded in accumulated other comprehensive loss will be recognized in earnings over the next 12 months. The amounts included in accumulated other comprehensive income will be reclassified to earnings should the hedge no longer be considered effective. No amount of ineffectiveness was included in net income for the three and nine months ended September 27, 2025. The Company will continue to assess the effectiveness of the hedge on an ongoing basis. The primary inputs into the valuation of the collars are interest yield curves, interest rate volatilities, foreign exchange rates, foreign exchange volatilities, credit risk, credit spreads and other market information. The collars are classified within Level 2 of the fair value hierarchy since all significant inputs are corroborated by market observable data.
Interest Rate Swap
On May 12, 2022, the Company entered into an interest rate swap agreement to manage interest rate risk exposure, effectively converting the interest rate on the Company's SOFR based floating-rate loans to a fixed-rate. The interest rate swap, with a notional value of $200 million, was designated as a cash flow hedge against the variability of cash flows associated with the Company's SOFR based loans scheduled to mature on June 30, 2027. The fair value of the interest rate swap was valued using an independent third-party valuation model. Pursuant to this model, changes in fair value of derivatives that are designated as cash flow hedges are deferred in accumulated other comprehensive loss until the underlying transactions are recognized in earnings. For the three and nine months ended September 27, 2025, the Company recorded a pre-tax unrealized loss on the
21
interest rate swap of $0.6 million and $4.0 million, respectively. As of September 27, 2025, the Company estimates that approximately $1.7 million of pre-tax gain recorded in accumulated other comprehensive loss will be recognized in earnings over the next 12 months. The primary inputs into the valuation of the interest rate swap are interest yield curves, interest rate volatility, credit risk, credit spreads and other market information. The interest rate swap is classified within Level 2 of the fair value hierarchy since all significant inputs are corroborated by market observable data.
The use of derivatives creates exposure to credit risk relating to potential losses that could be recognized in the event that the counterparties to these instruments fail to perform their obligations under the contracts. The Company seeks to minimize this risk by limiting its counterparties to major financial institutions with acceptable credit ratings and monitoring the total value of positions with individual counterparties. In the event of a default by one of its counterparties, the Company may not receive payments provided for under the terms of its derivatives.
The Company does not enter into derivative financial instruments for trading purposes.
As of September 27, 2025 and December 28, 2024, the fair values of the Company's derivative financial instruments and their classifications on the Condensed Consolidated Balance Sheets were as follows:
(in thousands) | Condensed Consolidated Balance Sheets Classification | September 27, 2025 | December 28, 2024 | ||||||||||||||
| Derivatives designated as hedging instruments | |||||||||||||||||
| Interest rate swap agreement: | |||||||||||||||||
| Designated as cash flow hedge | Prepaid expenses and other current assets | $ | $ | ||||||||||||||
| Other long-term assets | |||||||||||||||||
| Zero cost collar agreement: | |||||||||||||||||
| Designated as cash flow hedge | Prepaid expenses and other current assets | $ | $ | ||||||||||||||
| Other long-term assets | |||||||||||||||||
| Accrued liabilities | |||||||||||||||||
| Other long-term liabilities | |||||||||||||||||
The pre-tax (gains) losses recognized on derivative financial instruments in the Condensed Consolidated Statements of Net Income for the three and nine months ended September 27, 2025 and September 28, 2024 were as follows:
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| (in thousands) | Classification of (Gains) Losses Recognized in the Condensed Consolidated Statements of Net Income | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||||||||||||||||
| Derivatives designated as cash flow hedges | ||||||||||||||||||||||||||||||||
| Interest rate swap agreement | Interest expense | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||
| Zero cost collar agreement | Cost of sales | ( | ( | |||||||||||||||||||||||||||||
| Zero cost collar agreement | Selling, general, and administrative expenses | ( | ||||||||||||||||||||||||||||||
The pre-tax losses (gains) recognized on derivative financial instruments in the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 27, 2025 and September 28, 2024 were as follows:
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| (in thousands) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||||||||||||
| Derivatives designated as cash flow hedges | ||||||||||||||||||||||||||
| Interest rate swap agreement | $ | $ | $ | $ | ||||||||||||||||||||||
| Zero cost collar agreement | ( | ( | ||||||||||||||||||||||||
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Mutual Funds
The Company has a non-qualified Supplemental Retirement and Savings Plan which provides additional retirement benefits for certain management employees and named executive officers by allowing participants to defer a portion of their annual compensation. The Company maintains accounts for participants through which participants make investment elections. The marketable securities are classified as Level 1 under the fair value hierarchy as they are maintained in mutual funds with readily determinable fair value and recorded in Other long-term assets in the Condensed Consolidated Balance Sheets.
There were no changes during the quarter ended September 27, 2025 to the Company’s valuation techniques used to measure asset and liability fair values on a recurring basis. As of September 27, 2025 and December 28, 2024, the Company did not hold any non-financial assets or liabilities that are required to be measured at fair value on a recurring basis.
The following table presents assets measured at fair value by classification within the fair value hierarchy as of September 27, 2025:
| 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 | $ | $ | $ | $ | ||||||||||||||||||||||
| Investments in equity securities | ||||||||||||||||||||||||||
| Mutual funds | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
The following table presents assets measured at fair value by classification within the fair value hierarchy as of December 28, 2024:
| 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 | $ | $ | $ | $ | ||||||||||||||||||||||
| Investments in equity securities | ||||||||||||||||||||||||||
| Mutual funds | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
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 facilities' fair values approximate book value at September 27, 2025 and December 28, 2024, as the rates on these borrowings are variable in nature. The purchase price of business acquisitions is primarily allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition date, with the excess recorded as goodwill. The Company utilizes Level 3 inputs in the determination of the initial fair value for certain assets acquired and liabilities assumed in business acquisitions.
The carrying value and estimated fair values of the Company’s Euro Senior Notes, Series B and USD Senior Notes, Series A and Series B, as of September 27, 2025 and December 28, 2024 were as follows:
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| September 27, 2025 | December 28, 2024 | |||||||||||||||||||||||||
| (in thousands) | Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | ||||||||||||||||||||||
| Euro Senior Notes, Series B due 2028 | $ | $ | $ | $ | ||||||||||||||||||||||
| USD Senior Notes, Series A due 2025 | ||||||||||||||||||||||||||
| USD Senior Notes, Series B due 2027 | ||||||||||||||||||||||||||
| USD Senior Notes, Series B due 2030 | ||||||||||||||||||||||||||
| USD Senior Notes, due 2032 | ||||||||||||||||||||||||||
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10. Benefit Plans
The Company has Company-sponsored and mandatory defined benefit pension plans covering employees in the United Kingdom ("U.K."), Germany, the Philippines, China, Japan, Mexico, Italy and France. The amount of the retirement benefits provided under the plans is generally based on years of service and final average pay.
The Company recognizes interest cost, expected return on plan assets, and amortization of prior service, net within Other income, net in the Condensed Consolidated Statements of Net Income. The components of net periodic benefit cost for the three and nine months ended September 27, 2025 and September 28, 2024 were as follows:
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||
| (in thousands) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||||||||||||
| Components of net periodic benefit cost: | ||||||||||||||||||||||||||
| Service cost | $ | $ | $ | $ | ||||||||||||||||||||||
| Interest cost | ||||||||||||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ( | ||||||||||||||||||||||
| Amortization of prior service and net actuarial loss | ||||||||||||||||||||||||||
| Net periodic benefit cost | $ | $ | $ | $ | ||||||||||||||||||||||
The Company expects to make approximately $1.2 million of contributions to the plans and pay $2.1 million of benefits directly in 2025.
On October 4, 2024, the Company entered into a definitive agreement to purchase a group annuity contract, under which an insurance company is required to pay pension payments to the Company’s United Kingdom pension plan to match required pension payments until a later buyout, at which point the insurance company will directly pay and administer the benefits to the plan's participants, or to their designated beneficiaries. The purchase of this group annuity contract will reduce the Company’s outstanding pension benefit obligation by approximately $23 million, representing approximately 33 % 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 currently expects to record a one-time non-cash settlement charge in 2026 estimated between $6 million and $8 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.
The Company also sponsors certain post-employment plans in foreign countries and other statutory benefit plans. The Company recorded expense of $0.8 million and $0.6 million for the three months ended September 27, 2025 and September 28, 2024, respectively, and $2.2 million and $2.0 million for the nine months ended September 27, 2025 and September 28, 2024, respectively, in Cost of sales and Other income, net within the Condensed Consolidated Statements of Net Income. The pre-tax losses amount recognized in other comprehensive income (loss) for these plans were $0.4 million and $0.3 million for the three months ended September 27, 2025 and September 28, 2024, respectively, and $1.1 million and $0.9 million for the nine months ended September 27, 2025 and September 28, 2024, respectively.
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11. Other Comprehensive Income (Loss)
Changes in other comprehensive income (loss) by component were as follows:
| (in thousands) | Three Months Ended September 27, 2025 | Three Months Ended September 28, 2024 | ||||||||||||||||||||||||||||||||||||
| Pre-tax | Tax | Net of Tax | Pre-tax | Tax | Net of Tax | |||||||||||||||||||||||||||||||||
| Defined benefit pension plan and other adjustments | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
| Cash flow hedges | ( | ( | ||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments (a) | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Total change in other comprehensive income (loss) | $ | ( | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| (in thousands) | Nine Months Ended September 27, 2025 | Nine Months Ended September 28, 2024 | ||||||||||||||||||||||||||||||||||||
| Pre-tax | Tax | Net of Tax | Pre-tax | Tax | Net of Tax | |||||||||||||||||||||||||||||||||
| Defined benefit pension plan and other adjustments | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
| Cash flow hedges | ( | ( | ||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments (a) | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total change in other comprehensive income (loss) | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
(a) The tax shown above within foreign currency translation adjustments is the U.S. tax associated with the foreign currency translation adjustments of earnings of non-U.S. subsidiaries which have been previously taxed in the U.S. and are not permanently reinvested.
The following tables set forth the changes in the components of accumulated other comprehensive income (loss) by component for the nine months ended September 27, 2025 and September 28, 2024:
| (in thousands) | Pension and postretirement liability and reclassification adjustments | Cash flow hedges | Foreign currency translation adjustments | Accumulated other comprehensive (loss) income | ||||||||||||||||||||||
| Balance at December 28, 2024 | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||
| Activity in the period | ||||||||||||||||||||||||||
| Balance at September 27, 2025 | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||
| (in thousands) | Pension and postretirement liability and reclassification adjustments | Cash flow hedges | Foreign currency translation adjustments | Accumulated other comprehensive (loss) income | ||||||||||||||||||||||
| Balance at December 30, 2023 | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||
| Activity in the period | ( | |||||||||||||||||||||||||
| Balance at September 28, 2024 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) to earnings for the three and nine months ended September 27, 2025 and September 28, 2024 were as follows:
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| (in thousands) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||||||||||||
| Pension and postemployment plans: | ||||||||||||||||||||||||||
| Amortization of prior service and net actuarial loss, and other | $ | $ | $ | $ | ||||||||||||||||||||||
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The Company recognizes the amortization of prior service costs in Other income, net within the Condensed Consolidated Statements of Net Income.
12. Income Taxes
The effective tax rate for the three and nine months ended September 27, 2025 was 26.6 % and 26.8 %, respectively, compared to the effective tax rate for the three and nine months ended September 28, 2024 of 25.3 % and 21.9 %, respectively. The effective tax rate for 2025 was higher than the effective tax rate for the comparable 2024 periods primarily due to increases in losses in non-U.S. jurisdictions with no related tax benefit, as compared to 2024. The 2024 periods also recognized more favorable tax rate benefits due to lapses in the statute of limitations for previously unrecognized tax benefits, as compared to the 2025 periods.
The effective tax rate for three and nine months ended September 27, 2025 was higher than the statutory tax rate primarily due to foreign exchange losses and losses in non-U.S. jurisdictions with no related tax benefit. The effective tax rate for the three and nine months ended September 28, 2024 was higher than the statutory tax rate primarily due to the proportion of pre-tax income that is earned in higher tax jurisdictions, partially offset by the lapse in the statute of limitations for previously unrecognized tax benefits recognized in the first quarter.
13. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share:
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| (in thousands, except per share amounts) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||||||||||||
| Numerator: | ||||||||||||||||||||||||||
| Net income as reported | $ | $ | $ | $ | ||||||||||||||||||||||
| Denominator: | ||||||||||||||||||||||||||
| Weighted average shares outstanding | ||||||||||||||||||||||||||
| Basic | ||||||||||||||||||||||||||
| Effect of dilutive securities | ||||||||||||||||||||||||||
| Diluted | ||||||||||||||||||||||||||
| Earnings Per Share: | ||||||||||||||||||||||||||
| Basic earnings per share | $ | $ | $ | $ | ||||||||||||||||||||||
| Diluted earnings per share | $ | $ | $ | $ | ||||||||||||||||||||||
Potential shares of common stock attributable to performance share units, stock options and restricted stock units excluded from the earnings per share calculation because their effect would be anti-dilutive were 101,354 and 124,197 for the three months ended September 27, 2025 and September 28, 2024, respectively, and 322,843 and 136,635 for the nine months ended September 27, 2025 and September 28, 2024, respectively.
Share Repurchase Program
On April 25, 2024, the Company's Board of Directors authorized a three-year program to repurchase up to $300.0 million in the aggregate of shares of the Company's stock for the period from May 1, 2024 to April 30, 2027 ("2024 program") to replace its previous 2021 program. The Company did no t repurchase any shares of its common stock for the three months ended
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14. Segment Information
The Company and its subsidiaries design, manufacture and sell component, modules and subassemblies to empower the long-term structural themes of sustainability, connectivity and safety. The Company aggregated its operating segments into the reportable segments: Electronics, Transportation, and Industrial. An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, and about which separate financial information is regularly evaluated by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources. The CODM is the Company’s President and Chief Executive Officer (“CEO”). The CODM allocates resources to and assesses the performance of each operating segment using information about its revenue and operating income (loss) before interest and taxes, but does not evaluate the operating segments using discrete balance sheet information and as such, segment asset information is not disclosed. The CODM’s key decisions involve the allocation of resources, such as acquisitions, divestitures, investments, capital expenditures, significant customer contracts, and other key management resources, and assessment of performance, such as executive officer hiring, promotion, and compensation. The CODM uses operating income as the key metric when establishing targets in the annual budget and in evaluating the allocation of resources to each segment. The CODM regularly reviews each segment's operating income against the forecast, budget and previous quarterly results to assess performance and make decisions about the allocation of operating and capital resources to each segment.
Sales, marketing, and research and development expenses are charged directly into each operating segment. Finance, information technology, and human resources are shared functions that are allocated back to the 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. 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, electromechanical switches and interconnect solutions, polymer electrostatic discharge (“ESD”) suppressors, varistors, reed switch based magnetic sensing, gas discharge tubes; semiconductor products such as discrete transient voltage suppressor (“TVS”) diodes, TVS diode arrays, protection and switching thyristors, silicon and silicon carbide metal-oxide-semiconductor field effect transistors (“MOSFETs”) and diodes, 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 charging infrastructure, aerospace, power supplies, data centers and telecommunications, medical devices, alternative energy and energy storage, building and home automation, appliances, and mobile electronics.
•Transportation Segment: Consists of a wide range of circuit protection, power control and sensing technologies for global original equipment manufacturers (“OEMs”), Tier-one suppliers and parts and aftermarket distributors in passenger vehicles, heavy-duty truck and bus, off-road and recreational vehicles, material handling equipment, agricultural machinery, construction equipment and other commercial vehicle end markets. Passenger vehicle products are used in internal combustion engines, hybrid and electric vehicles including blade fuses, battery cable protectors, resettable fuses, high-current fuses, high-voltage fuses, and sensor products designed to monitor the occupant’s safety and environment as well as the vehicle’s powertrain. Commercial vehicle products include fuses, switches, circuit breakers, relays, and power distribution modules and units used in applications serving a number of end markets, including heavy-duty truck and bus, construction, agriculture, material handling and marine.
•Industrial Segment: Consists of industrial circuit protection (industrial fuses), protective and monitoring relays (protection relays, residual current devices and monitors, ground fault circuit interrupters, solid state switches, and arc fault detection devices), and industrial controls and sensors (contactors, transformers, and temperature sensors) for use in various applications such as renewable energy and energy storage systems, industrial safety, factory automation, electric vehicle charging infrastructure, HVAC systems, non-residential construction, MRO, and mining.
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The Company has provided this segment information for comparable prior periods. Segment information is summarized as follows:
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| (in thousands) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||||||||||||
| Net sales | ||||||||||||||||||||||||||
| Electronics | $ | $ | $ | $ | ||||||||||||||||||||||
| Transportation | ||||||||||||||||||||||||||
| Industrial | ||||||||||||||||||||||||||
| Total net sales | $ | $ | $ | $ | ||||||||||||||||||||||
Other segment expenses (b) | ||||||||||||||||||||||||||
| Electronics | $ | $ | $ | |||||||||||||||||||||||
| Transportation | ||||||||||||||||||||||||||
| Industrial | ||||||||||||||||||||||||||
| Total other segment expenses | $ | $ | $ | $ | ||||||||||||||||||||||
| Segment operating income | ||||||||||||||||||||||||||
| Electronics | $ | $ | $ | $ | ||||||||||||||||||||||
| Transportation | ||||||||||||||||||||||||||
| Industrial | ||||||||||||||||||||||||||
| Total segment operating income | ||||||||||||||||||||||||||
Other (a) | ( | ( | ( | ( | ||||||||||||||||||||||
| Total operating income | ||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||
| Foreign exchange loss | ||||||||||||||||||||||||||
| Other income, net | ( | ( | ( | ( | ||||||||||||||||||||||
| Income before income taxes | $ | $ | $ | $ | ||||||||||||||||||||||
(a) Included in "Other" Operating income for the third fiscal quarter of 2025 was $1.6 million ($13.1 million year-to-date) of restructuring charges primarily related to employee termination costs. During the first quarter of 2025, the Company recognized a $0.1 million impairment charge related to certain machinery and equipment within the Electronics segment. See Note 7, Restructuring, Impairment, and Other Charges, for further discussion. In addition, during the third quarter of 2025, the Company recognized $1.4 million ($3.0 million year-to-date) of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, and a $0.3 million loss related to the sale of the Marine business within the Transportation segment. During the first quarter of 2025, the Company recognized $0.5 million of purchase accounting inventory step-down adjustments related to the Dortmund Fab acquisition.
Included in "Other" Operating income for the third quarter of 2024 was $1.8 million ($9.4 million year-to-date) of restructuring charges primarily related to employee termination costs, and $1.0 million ($2.8 million year-to-date) of legal and professional fees and other integration expenses related to completed and contemplated acquisitions. During the first quarter of 2024, the Company recognized a $0.9 million impairment charge related to certain machinery and equipment in the commercial vehicle business within the Transportation segment. See Note 7, Restructuring, Impairment, and Other Charges, for further discussion. During the third quarter of 2024, the Company recorded a gain of $0.5 million related to the sale of a land use right within the Electronics segment. In addition, the Company recognized a gain of $1.0 million for the sale of two buildings within the Transportation segment during first half of 2024.
(b) Other segment operating expenses include cost of sales, selling, general, and administration expenses, and research and development expenses. Other segment expenses are reconciled to the operating income of each segment. The CODM regularly assesses the performance of each operating segment focusing on each operating segment’s revenue and operating income. Other segment operating expenses for the three and nine months ended September 28, 2024 were included in order to adhere to the implementation of Accounting Standards Updates ("ASU") No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures."
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The Company’s depreciation and amortization expenses by segment for the three and nine months ended September 27, 2025 and September 28, 2024 were as follows:
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| (in thousands) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||||||||||||
| Depreciation | ||||||||||||||||||||||||||
| Electronics | $ | $ | $ | $ | ||||||||||||||||||||||
| Transportation | ||||||||||||||||||||||||||
| Industrial | ||||||||||||||||||||||||||
| Total depreciation | $ | $ | $ | $ | ||||||||||||||||||||||
| Amortization | ||||||||||||||||||||||||||
| Electronics | $ | $ | $ | $ | ||||||||||||||||||||||
| Transportation | ||||||||||||||||||||||||||
| Industrial | ||||||||||||||||||||||||||
| Total amortization | $ | $ | $ | $ | ||||||||||||||||||||||
The Company’s net sales by country were as follows, classified according to the country where the customer is located:
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| (in thousands) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||||||||||||
| Net sales | ||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | ||||||||||||||||||||||
| China | ||||||||||||||||||||||||||
Other countries (a) | ||||||||||||||||||||||||||
| Total net sales | $ | $ | $ | $ | ||||||||||||||||||||||
The Company’s long-lived assets represent net property, plant, and equipment, and are classified according to the country where the asset is located. The Company's long-lived assets were as follows:
| (in thousands) | September 27, 2025 | December 28, 2024 | ||||||||||||
| Long-lived assets | ||||||||||||||
| United States | $ | $ | ||||||||||||
| China | ||||||||||||||
| Mexico | ||||||||||||||
| Germany | ||||||||||||||
| Philippines | ||||||||||||||
| Other countries | ||||||||||||||
| Total long-lived assets | $ | $ | ||||||||||||
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The Company’s additions to net property, plant, and equipment by country were as follows:
| Nine Months Ended | ||||||||||||||
| (in thousands) | September 27, 2025 | September 28, 2024 | ||||||||||||
| Additions to long-lived assets | ||||||||||||||
| United States | $ | $ | ||||||||||||
| China | ||||||||||||||
| Mexico | ||||||||||||||
| Germany | ||||||||||||||
| Philippines | ||||||||||||||
| Other countries | ||||||||||||||
| Total additions to long-lived assets | $ | $ | ||||||||||||
(a)Each country included in other countries was less than 10% of net sales.
15. Commitments and Contingencies
Off-Balance Sheet Arrangements
As of September 27, 2025, the Company did not have any off-balance sheet arrangements, as defined under SEC rules. Specifically, the Company was not liable for guarantees of indebtedness owed by third parties, the Company was not directly liable for the debt of any unconsolidated entity and the Company did not have any retained or contingent interest in assets. 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.
Product Warranty Liabilities
The Company's policy is to accrue for warranty claims when a loss is both probable and estimable. Liabilities for warranty claims have historically not been material and in limited instances, customers may make claims for costs they incurred or other damages related to a claim.
The Company carries insurance for potential product liability claims at coverage levels based on the Company's prior claims experience. This coverage is subject to deductibles and various terms and conditions. The Company cannot assure that the level of coverage will be sufficient to cover every possible claim that can arise in its businesses, now or in the future, or that such coverage always will be available should the Company, now or in the future, wish to extend, increase or otherwise adjust its insurance.
The Company has been notified by one of its customers of a product recall potentially due to certain fuses provided by Littelfuse and incorporated in such products. The Company is currently working with its customer to investigate the cause and level of responsibility for this recall. The Company has determined pursuant to ASC 450, "Contingencies", that a loss is reasonably possible. However, the Company continues to evaluate this matter and the ultimate costs of the recall and range of the potential loss cannot be determined at this time. Accordingly, no accrual has been made yet for this matter. Factors that will impact the amount of such losses include the per vehicle cost of fuse replacement, the determination of the relative liability among the customer, the Company, and any relevant third parties, as well as actual insurance recoveries.
Environmental Remediation Liabilities
The Company's operations and facilities are subject to U.S. and non-U.S. laws and regulations governing the protection of the environment and its employees, including those governing air emissions, chemical usage, water discharges, the management and disposal of hazardous substances and wastes, and the cleanup of contaminated sites. The Company could incur significant costs, including cleanup costs, fines, civil or criminal sanctions, or third-party property damage or personal injury claims, in the event of violations or liabilities under these laws and regulations, or non-compliance with the environmental permits required at its facilities. Potentially significant expenditures could be required in order to comply with environmental laws that may be adopted or imposed in the future. The Company is, however, not aware of any threatened or pending material environmental investigations, lawsuits, or claims involving the Company or its operations.
Legal Proceedings
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In the ordinary course of business, the Company may be involved in a number of claims and litigation matters. While it is not feasible to predict the outcome of these matters, based upon the Company's experience and current information known, the Company does not expect the outcome of these matters, either individually or in the aggregate, to have a material adverse effect on its results of operations, financial position, and/or cash flows.
The Company accounts for litigation and claims losses in accordance with ASC 450, "Contingencies" where loss contingency provisions are recognized for probable and estimable losses at the Company's best estimate of a loss or, when a best estimate cannot be made, at its estimate of the minimum loss. These estimates require the application of considerable judgment and are refined each accounting period as additional information becomes known. If the Company is initially unable to develop a best estimate of loss, the minimum amount, which could be an immaterial amount, is recognized. As information becomes known, either the minimum loss amount is increased, or a best estimate can be made, resulting in additional loss provisions. A best estimate may be changed when events result in an expectation different than previously expected.
Pending Litigation and Claims
There were no material pending litigation or claims outstanding as of September 27, 2025.
16. Related Party Transactions
The Company has equity ownership in various investments that are accounted for under the equity method. The following is a description of the investments and related party transactions.
Powersem GmbH: The Company owns 45 % of the outstanding equity of Powersem GmbH (“Powersem”), a module manufacturer based in Germany.
EB Tech Co., Ltd.: The Company owns approximately 15 % 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.
| Three Months Ended September 27, 2025 | Three Months Ended September 28, 2024 | |||||||||||||||||||||||||
| (in millions) | Powersem | EB Tech | ATEC | Powersem | EB Tech | ATEC | ||||||||||||||||||||
| Sales to related party | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Purchase material/service from related party | ||||||||||||||||||||||||||
| Nine Months Ended September 27, 2025 | Nine Months Ended September 28, 2024 | |||||||||||||||||||||||||
| (in millions) | Powersem | EB Tech | ATEC | Powersem | EB Tech | ATEC | ||||||||||||||||||||
| Sales to related party | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Purchase material/service from related party | ||||||||||||||||||||||||||
| September 27, 2025 | December 28, 2024 | |||||||||||||||||||||||||
| (in millions) | Powersem | EB Tech | ATEC | Powersem | EB Tech | ATEC | ||||||||||||||||||||
| Accounts receivable balance | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Accounts payable balance | ||||||||||||||||||||||||||
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17. Subsequent Events
On October 24, 2025, the Company entered into a Membership Interest Purchase Agreement with Basler Holdings, LLC, pursuant to which the Company has agreed to acquire all of the issued and outstanding membership interests of Basler Electric Company (“Basler”). The purchase price is approximately $350 million in cash, subject to certain adjustments after closing. The completion of the transaction is subject to certain customary closing conditions including regulatory approval.
Basler is a leading designer and manufacturer of innovative electrical control and protection solutions for high-growth industrial markets including grid and utility infrastructure, power generation and data center. With three manufacturing facilities in Highland, IL, Taylor, TX and Piedras Negras, Mexico, Basler’s technologies regulate and protect mission-critical equipment for a broad and expanding customer base. The business will be reported in the Company's Industrial segment. The Company financed the transaction with cash on hand.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cautionary Statement Regarding Forward-Looking Statements Under the Private Securities Litigation Reform Act of 1995 (“PSLRA”).
Certain statements in this section and other parts of this Quarterly Report on Form 10-Q may constitute "forward-looking statements" within the meaning of the federal securities laws and are entitled to the safe-harbor provisions of the PSLRA. These statements include statements regarding the Company’s future performance, as well as management's expectations, beliefs, intentions, plans, estimates or projections relating to the future. Such statements can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "estimates," "will," "should," "plans" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy, although not all forward-looking statements contain such terms. The Company cautions that forward-looking statements, which speak only as of the date they are made, are subject to risks, uncertainties and other factors, and actual results and outcomes may differ materially from those indicated or implied by the forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, risks and uncertainties relating to general economic conditions; product demand and market acceptance; economic conditions; the impact of competitive products and pricing; product quality problems or product recalls; capacity and supply difficulties or constraints; coal mining exposures reserves; cybersecurity matters; failure of an indemnification for environmental liability; changes in import and export duty and tariff rates; exchange rate fluctuations; commodity price fluctuations; the effect of the Company's accounting policies; labor disputes and shortages; 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; limited realization of the expected benefits from investment and strategic plans; and other risks that may be detailed in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 3, “Quantitative and Qualitative Disclosures About Market Risk” of Part I and Item 1, “Legal Proceedings” and Item 1A, “Risk Factors” of Part II of this Report, as well as Item 1A. "Risk Factors" and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of Part II of the Company's Annual Report on Form 10-K for the year ended December 28, 2024, and the Company's other filings and submissions with the Securities and Exchange Commission. The Company does not undertake any obligation to update or revise any forward-looking statements to reflect future events or circumstances, new information or otherwise.
This report, including the Management’s Discussion and Analysis of Financial Condition and Results of Operations, should be read in conjunction with information provided in the consolidated financial statements and the related Notes thereto appearing in the Company's Annual Report on Form 10-K for the year ended December 28, 2024.
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 the Company is aware of and that may have a material effect on future performance. In addition, MD&A provides information about the Company’s segments and how the results of those segments impact the results of operations and financial condition as a whole.
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Executive Overview
Founded in 1927, Littelfuse is a diversified, industrial technology manufacturing company empowering a sustainable, connected, and safer world. Across more than 20 countries, and with approximately 16,000 global associates, we partner with customers to design and deliver innovative, reliable solutions. Serving over 100,000 end customers, our products are found in a variety of industrial, transportation and electronics end markets – everywhere, every day.
The Company maintains a network of global laboratories and engineering centers that develop new products and product enhancements, provide customer application support and test products for safety, reliability, and regulatory compliance. The Company conducts its business through three reportable segments: Electronics, Transportation, and Industrial. Within these segments, the Company designs, manufactures and sells components and modules empowering a sustainable, connected, and safer world. Our products protect against electrostatic discharge, power surges, short circuits, voltage spikes and other harmful occurrences, safely and efficiently control power and improve productivity and are used to identify and detect temperature, proximity, flow speed and fluid level in various applications.
Executive Summary
For the third quarter of 2025, the Company recognized net sales of $624.6 million, an increase of $57.3 million, or 10.1% as compared to $567.4 million in the third quarter of 2024 including $12.9 million or 2.3% of incremental net sales, from the Dortmund Fab acquisition (defined below) in the semiconductor business within the Electronics segment and $7.4 million, or 1.3% of favorable changes in foreign exchange rates. The remaining increase in net sales was primarily due to higher volume in the Electronics segment. The Company recognized net income of $69.5 million, or $2.77 per diluted share, in the third quarter of 2025 compared to $58.1 million, or $2.32 per diluted share, in the third quarter of 2024. The increase in net income was primarily due to higher operating income from the electronics products business within the Electronics segment driven by increases in net sales, volume leverage and lower foreign exchange losses of $9.5 million.
Net cash provided by operating activities was $295.1 million for the nine months ended September 27, 2025 compared to $207.0 million for the nine months ended September 28, 2024. The increase in net cash provided by operating activities of $88.1 million was primarily due to higher cash earnings and reductions in working capital.
On October 24, 2025, the Company entered into a Membership Interest Purchase Agreement with Basler Holdings, LLC, pursuant to which the Company has agreed to acquire all of the issued and outstanding membership interests of Basler Electric Company. The purchase price is approximately $350 million in cash, subject to certain adjustments after closing. The completion of the transaction is subject to certain customary closing conditions including regulatory approval. The business will be reported in the Company's Industrial segment. The Company financed the transaction with cash on hand.
On December 31, 2024, the Company completed the acquisition of a 200mm wafer fab located in Dortmund, Germany (“Dortmund Fab”) from Elmos Semiconductor SE. The total purchase price for the Dortmund Fab was approximately €94 million, of which a €37.2 million down payment (approximately $40.5 million) was paid in the third quarter of 2023 after regulatory approvals, and €56.7 million (approximately $58.8 million) was paid at closing. The business is reported in the Electronics-Semiconductor business within the Company’s Electronics segment.
Risk Related to Market Conditions
The Company performs its goodwill impairment tests annually on the first day of its fiscal fourth quarter, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. As part of its interim review for indicators of impairment, management analyzed potential changes in value of individual reporting units with goodwill based on each reporting unit’s operating results for the nine months ended September 27, 2025 compared to expected results. In addition, management considered how other key assumptions, including discount rates and expected long-term growth rates, used in the last fiscal year’s impairment analysis could be impacted by changes in market conditions and economic events.
Management considered trends in these factors when performing its assessment of whether an interim impairment review was required for any reporting unit. Based on this interim assessment, management concluded that as of September 27, 2025, no events or changes in circumstances indicated that it was more likely than not that the fair value of any reporting unit had declined below its carrying value. Nevertheless, significant changes in global economic and market conditions could result in changes to expectations of future financial results and key valuation assumptions. Such changes could result in revisions of management’s estimates of the fair value of the Company’s reporting units and could result in a material impairment of goodwill as of September 28, 2025, the Company’s next annual measurement date.
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In particular, the Electronics-Semiconductor reporting unit within the Electronics segment is at risk for future impairment if projected operating results are not met or other inputs into the fair value measurement change. The potential reduction in the estimated fair value of the reporting unit is due to lower expectations for future revenue, profitability and cash flows for the Electronics-Semiconductor reporting unit as compared to the expectations of the 2024 annual goodwill impairment test driven by lower-than-expected demand in the power semiconductor business. Continued negative trends could have a significant impact on the estimate fair value of this reporting unit and could result in future impairment charges. As of the September 29, 2024 annual goodwill impairment test, the Electronics-Semiconductor reporting unit’s estimated fair value exceeded book value by approximately 82%. As of September 27, 2025, the Electronics-Semiconductor reporting unit had $539.2 million of goodwill.
Other Risk
The Company has been notified by one of its customers of a product recall potentially due to certain fuses provided by Littelfuse and incorporated in such products. The Company is currently working with its customer to investigate the cause and level of responsibility for this recall. The Company has determined pursuant to ASC 450, "Contingencies" that a loss is reasonably possible. However, the Company continues to evaluate this matter and the ultimate costs of the recall and range of the potential loss cannot be determined at this time. Accordingly, no accrual has been made yet for this matter. Factors that will impact the amount of such losses include the per vehicle cost of fuse replacement, the determination of the relative liability among the customer, the Company, and any relevant third parties, as well as actual insurance recoveries.
Recently, the U.S. government has imposed extensive tariffs on goods imported from several countries, including, without limitation, China, Mexico and Canada, as well as certain broad, product-specific tariffs on foreign goods and products. Tariffs may increase the cost of materials in our supply chain, incur reciprocal levies on components and finished products exported to or imported from affected countries, and have an adverse impact on our cost of goods sold in the U.S. and abroad. These factors in turn could require us to materially increase prices to our customers which may reduce demand, or, if we do not or are unable to increase prices, could result in lower margins on products sold.
Tariffs have resulted in China and other countries imposing reciprocal tariffs on U.S. goods and ceasing sales of certain products to the U.S. and could result in more U.S. trading partners adopting responsive trade policies, including making it more difficult or costly for us to export our products to those countries. Sales to customers outside of the U.S., and to China in particular, comprise a significant portion of our net sales, and reciprocal tariffs may impact our business in China. Further, tariffs and trade policies may continue to change quickly and without warning, and we may not be able to accurately anticipate and mitigate the impacts.
Results of Operations
The following table summarizes the Company’s unaudited condensed consolidated results of operations for the periods presented. The third quarter of 2025 included $1.6 million ($13.1 million year-to-date) of restructuring charges primarily related to employee termination costs. During the first quarter of 2025, the Company recognized a $0.1 million impairment charge related to certain machinery and equipment within the Electronics segment. See Note 7, Restructuring, Impairment, and Other Charges, for further discussion. In addition, during the third quarter of 2025, the Company recognized $1.4 million ($3.0 million year-to-date) of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, and a $0.3 million loss related to the sale of the Marine business within the Transportation segment. During the first quarter of 2025, the Company recognized $0.5 million of purchase accounting inventory step-down adjustments related to the Dortmund Fab acquisition.
The third quarter of 2024 included $1.8 million ($9.4 million year-to-date) of restructuring charges primarily related to employee termination costs, and $1.0 million ($2.8 million year-to-date) of legal and professional fees and other integration expenses related to completed and contemplated acquisitions. During the first quarter of 2024, the Company recognized a $0.9 million impairment charge related to certain machinery and equipment in the commercial vehicle business within the Transportation segment. See Note 7, Restructuring, Impairment, and Other Charges, for further discussion. During the third quarter of 2024, the Company recorded a gain of $0.5 million related to the sale of a land use right within the Electronics segment. In addition, the Company recognized a gain of $1.0 million for the sale of two buildings within the Transportation segment during the first half of 2024.
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| Third Quarter | First Nine Months | |||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | Change | % Change | 2025 | 2024 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 624,640 | $ | 567,390 | $ | 57,250 | 10.1 | % | $ | 1,792,360 | $ | 1,661,263 | $ | 131,097 | 7.9 | % | ||||||||||||||||||||||||||||||||||
| Cost of sales | 383,652 | 351,498 | 32,154 | 9.1 | % | 1,112,062 | 1,050,559 | 61,503 | 5.9 | % | ||||||||||||||||||||||||||||||||||||||||
| Gross profit | 240,988 | 215,892 | 25,096 | 11.6 | % | 680,298 | 610,704 | 69,594 | 11.4 | % | ||||||||||||||||||||||||||||||||||||||||
| Operating expenses | 143,572 | 128,071 | 15,501 | 12.1 | % | 419,954 | 402,425 | 17,529 | 4.4 | % | ||||||||||||||||||||||||||||||||||||||||
| Operating income | 97,416 | 87,821 | 9,595 | 10.9 | % | 260,344 | 208,279 | 52,065 | 25.0 | % | ||||||||||||||||||||||||||||||||||||||||
| Income before income taxes | 94,716 | 77,716 | 17,000 | 21.9 | % | 232,877 | 194,564 | 38,313 | 19.7 | % | ||||||||||||||||||||||||||||||||||||||||
| Income taxes | 25,194 | 19,658 | 5,536 | 28.2 | % | 62,442 | 42,588 | 19,854 | 46.6 | % | ||||||||||||||||||||||||||||||||||||||||
| Net income | 69,522 | 58,058 | 11,464 | 19.7 | % | 170,435 | 151,976 | 18,459 | 12.1 | % | ||||||||||||||||||||||||||||||||||||||||
Net Sales
Net sales increased $57.3 million, or 10.1%, for the third quarter of 2025 compared to the third quarter of 2024 including $12.9 million or 2.3% of incremental net sales from the Dortmund Fab acquisition in the semiconductor business within the Electronics segment and $7.4 million or 1.3% of favorable changes in foreign exchange rates. The remaining increase in net sales was primarily due to higher volume of $31.2 million in the electronics products business within the Electronics segment.
Net sales increased $131.1 million, or 7.9%, for the first nine months of 2025 compared to the first nine months of 2024 including $36.4 million or 2.2% of incremental net sales from the Dortmund Fab acquisition in the semiconductor business within the Electronics segment and $7.8 million of favorable changes in foreign exchange rates. The remaining increase in net sales was primarily due to higher volume of $69.5 million in the electronics products business within the Electronics segment and $29.8 million in the Industrial segment due to higher end market demand and favorable price, partially offset by lower volume from the remaining semiconductor business within the Electronics segment.
Cost of Sales
Cost of sales was $383.7 million, or 61.4% of net sales, in the third quarter of 2025 compared to $351.5 million, or 61.9% of net sales, in the third quarter of 2024. As a percent of net sales, cost of sales decreased 0.5% primarily due to improved margin from the electronics products business within the Electronics segment driven by volume leverage and favorable product mix, partially offset by lower gross margin from the semiconductor business within the Electronics segment.
Cost of sales was $1,112.1 million, or 62.0% of net sales, in the first nine months of 2025 compared to $1,050.6 million, or 63.2% of net sales, in the first nine months of 2024. As a percent of net sales, cost of sales decreased 1.2% primarily driven by higher volume in the electronics products business within the Electronics segment and across all businesses in the Industrial segment. Additionally, improved margin from the passenger car products and the commercial vehicle businesses within the Transportation segment driven by volume leverage, favorable price, and cost reduction initiatives favorably impacted the decrease in cost of net sales as a percentage of net sales that was partially offset by lower margin from the semiconductor business within the Electronics segment.
Gross Profit
Gross profit was $241.0 million, or 38.6% of net sales, in the third quarter of 2025 compared to $215.9 million, or 38.1% of net sales, in the third quarter of 2024. The $25.1 million increase in gross profit was primarily due to higher volume and favorable product mix from the electronics products business within the Electronics segment.
Gross profit was $680.3 million, or 38.0% of net sales, in the first nine months of 2025 compared to $610.7 million, or 36.8% of net sales, in the first nine months of 2024. The $69.6 million increase in gross profit was primarily from higher net sales in the electronics products business within the Electronics segment, across all businesses within the Industrial segment, and the passenger car products and the commercial vehicle businesses within the Transportation driven by higher volume, favorable price, and product mix.
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Operating Expenses
Operating expenses were $143.6 million, or 23.0% of net sales, for the third quarter of 2025 compared to $128.1 million, or 22.6% of net sales, for the third quarter of 2024. The increase in operating expenses of $15.5 million was primarily due to higher selling, general, and administrative expenses of $15.7 million driven by higher annual incentive and stock compensation expenses, and the Dortmund Fab acquisition.
Operating expenses were $420.0 million, or 23.4% of net sales, for the first nine months of 2025 compared to $402.4 million, or 24.2% of net sales, for the first nine months of 2024. The increase in operating expenses of $17.5 million was primarily due to higher selling, general, and administrative expenses of $19.4 million driven by higher annual incentive compensation expenses and the Dortmund Fab acquisition and higher restructuring, impairment, and other charges of $2.8 million related to company-wide cost control initiatives implemented in the first quarter of 2025, partially offset by lower amortization expense of $3.2 million.
Operating Income
Operating income was $97.4 million, representing an increase of $9.6 million, or 10.9%, for the third quarter of 2025 compared to $87.8 million for the third quarter of 2024. The increase in operating income was due to higher gross profit from the electronics products business within the Electronics segment, partially offset by higher operating expenses mainly driven by higher annual incentive compensation expenses and the Dortmund Fab acquisition noted above. Operating margins increased from 15.5% in the third quarter of 2024 to 15.6% in the third quarter of 2025 driven by improved gross margin from the electronics products business within the Electronics segment, which was mostly offset by lower gross margin from the semiconductor business within the Electronics segment and higher incentive compensation expenses.
Operating income was $260.3 million, representing an increase of $52.1 million, or 25.0%, for the first nine months of 2025 compared to $208.3 million for the first nine months of 2024. The increase in operating income was due to higher gross profit across all segments, partially offset by higher operating expenses mainly driven by higher selling, general, and administrative expenses and restructuring, impairment, and other charges due to company-wide cost control initiatives implemented in the first quarter of 2025. Operating margins increased from 12.5% in the first nine months of 2024 to 14.5% in the first nine months of 2025 driven by improved gross margin in the electronics products business within the Electronics segment and across the Industrial and Transportation segments.
Income Before Income Taxes
Income before income taxes was $94.7 million, or 15.2% of net sales, for the third quarter of 2025 compared to $77.7 million, or 13.7% of net sales, for the third quarter of 2024. In addition to the factors impacting comparative results for operating income discussed above, income before income taxes was primarily benefited by lower foreign exchange losses of $9.5 million in the third quarter of 2025 compared to the third quarter of 2024, partially offset by unrealized losses of $0.1 million in the third quarter of 2025 compared to unrealized gains of $3.1 million in the third quarter of 2024 related to the Company's equity investment.
Income before income taxes was $232.9 million, or 13.0% of net sales, for the first nine months of 2025 compared to $194.6 million, or 11.7% of net sales, for the first nine months of 2024. In addition to the factors impacting comparative results for operating income discussed above, income before income taxes was primarily impacted by higher foreign exchange losses of $11.2 million in the first nine months of 2025 compared to the first nine months of 2024, and unrealized losses of $2.1 million during the first nine months of 2025 compared to unrealized gains of $1.9 million during the first nine months of 2024 related to the Company's equity investment.
Income Taxes
The effective tax rate for the three and nine months ended September 27, 2025 was 26.6% and 26.8%, respectively, compared to the effective tax rate for the three and nine months ended September 28, 2024 of 25.3% and 21.9%, respectively. The effective tax rate for 2025 was higher than the effective tax rate for the comparable 2024 periods primarily due to increases in losses in non-U.S. jurisdictions with no related tax benefit, as compared to 2024. The 2024 periods also recognized more favorable tax rate benefits due to lapses in the statute of limitations for previously unrecognized tax benefits, as compared to the 2025 periods.
The effective tax rate for three and nine months ended September 27, 2025 was higher than the statutory tax rate primarily due to foreign exchange losses and losses in non-U.S. jurisdictions with no related tax benefit. The effective tax rate for the three and nine months ended September 28, 2024 was higher than the statutory tax rate primarily due to the proportion of pre-tax
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income that is earned in higher tax jurisdictions, partially offset by the lapse in the statute of limitations for previously unrecognized tax benefits recognized in the first quarter.
Segment Results of Operations
The Company reports its operations by the following segments: Electronics, Transportation and Industrial. Segment information is described more fully in Note 14, 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 and operating income by segment:
| Net Sales | Third Quarter | First Nine Months | ||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | Change | % Change | 2025 | 2024 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||||
| Electronics | $ | 357,457 | $ | 304,188 | $ | 53,269 | 17.5 | % | $ | 1,000,372 | $ | 900,932 | $ | 99,440 | 11.0 | % | ||||||||||||||||||||||||||||||||||
| Transportation | 171,311 | 171,381 | (70) | — | % | 512,573 | 510,711 | 1,862 | 0.4 | % | ||||||||||||||||||||||||||||||||||||||||
| Industrial | 95,872 | 91,821 | 4,051 | 4.4 | % | 279,415 | 249,620 | 29,795 | 11.9 | % | ||||||||||||||||||||||||||||||||||||||||
| Total | $ | 624,640 | $ | 567,390 | $ | 57,250 | 10.1 | % | $ | 1,792,360 | $ | 1,661,263 | $ | 131,097 | 7.9 | % | ||||||||||||||||||||||||||||||||||
| Segment Operating Income | Third Quarter | First Nine Months | ||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | Change | % Change | 2025 | 2024 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||||
| Electronics | $ | 63,640 | $ | 48,891 | $ | 14,749 | 30.2 | % | $ | 160,267 | $ | 132,859 | $ | 27,408 | 20.6 | % | ||||||||||||||||||||||||||||||||||
| Transportation | 20,187 | 23,485 | (3,298) | (14.0) | % | 67,178 | 54,925 | 12,253 | 22.3 | % | ||||||||||||||||||||||||||||||||||||||||
| Industrial | 16,918 | 17,711 | (793) | (4.5) | % | 48,855 | 32,054 | 16,801 | 52.4 | % | ||||||||||||||||||||||||||||||||||||||||
| Total segment operating income | 100,745 | 90,087 | 10,658 | 276,300 | 219,838 | 56,462 | ||||||||||||||||||||||||||||||||||||||||||||
Other (a) | (3,329) | (2,266) | (1,063) | (15,956) | (11,559) | (4,397) | ||||||||||||||||||||||||||||||||||||||||||||
| Total operating income | $ | 97,416 | $ | 87,821 | $ | 9,595 | 10.9 | % | $ | 260,344 | $ | 208,279 | $ | 52,065 | 25.0 | % | ||||||||||||||||||||||||||||||||||
(a) Included in “Other” Operating income for the third quarter of 2025 was $1.6 million ($13.1 million year-to-date) of restructuring charges primarily related to employee termination costs. During the first quarter of 2025, the Company recognized a $0.1 million impairment charge related to certain machinery and equipment within the Electronics segment. See Note 7, Restructuring, Impairment, and Other Charges, for further discussion. In addition, during the third quarter of 2025, the Company recognized $1.4 million ($3.0 million year-to-date) of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, and a $0.3 million loss related to the sale of the Marine business within the Transportation segment. During the first quarter of 2025, the Company recognized $0.5 million of the purchase accounting inventory step-down adjustments related to the Dortmund Fab acquisition.
Included in "Other" Operating income for the third quarter of 2024 was $1.8 million ($9.4 million year-to-date) of restructuring charges primarily related to employee termination costs, and $1.0 million ($2.8 million year-to-date) of legal and professional fees and other integration expenses related to completed and contemplated acquisitions. During the first quarter of 2024, the Company recognized a $0.9 million impairment charge related to certain machinery and equipment in the commercial vehicle business within the Transportation segment. See Note 7, Restructuring, Impairment, and Other Charges, for further discussion. During the third quarter of 2024, the Company recorded a gain of $0.5 million related to the sale of a land use right within the Electronics segment. In addition, the Company recognized a gain of $1.0 million for the sale of two buildings within the Transportation segment during first half of 2024.
Electronics Segment
Net Sales
Net sales increased $53.3 million, or 17.5%, in the third quarter of 2025 compared to the third quarter of 2024 and included favorable changes in foreign exchange rates of $4.2 million or 1.4%. The net sales increase was primarily due to higher volume of $31.2 million from the electronics products business driven by higher end market demand and $12.9 million of incremental net sales from the Dortmund Fab acquisition in the semiconductor business.
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Net sales increased $99.4 million, or 11.0%, in the first nine months of 2025 compared to the first nine months of 2024 and included favorable changes in foreign exchange rates of $4.0 million or 0.4%. The net sales increase was primarily due to higher volume of $69.5 million from the electronics products business driven by higher end market demand and $36.4 million of incremental net sales from the Dortmund Fab acquisition in the semiconductor business, partially offset by lower volume from the remaining semiconductor business.
Operating Income
Operating income was $63.6 million, representing an increase of $14.7 million, or 30.2%, for the third quarter of 2025 compared to $48.9 million for the third quarter of 2024. The increase in operating income was primarily from the electronics products business due to volume leverage and favorable product mix. Operating margins increased from 16.1% in the third quarter of 2024 to 17.8% in the third quarter of 2025 primarily due to volume leverage from the electronics products business, partially offset by lower gross margin from the semiconductor business.
Operating income was $160.3 million, representing an increase of $27.4 million, or 20.6%, for the first nine months of 2025 compared to $132.9 million for the first nine months of 2024. The increase in operating income was primarily from the electronics products business due to volume leverage. Operating margins increased from 14.7% in the first nine months of 2024 to 16.0% in the first nine months of 2025 primarily due to volume leverage from the electronics products business, partially offset by lower gross margin from the semiconductor business.
Transportation Segment
Net Sales
Net sales decreased $0.1 million in the third quarter of 2025 compared to the third quarter of 2024 and included favorable changes in foreign exchange rates of $2.8 million or 1.7%. The net sales decrease was primarily due to lower net sales of $2.6 million and $1.8 million in the automotive sensor products and commercial vehicle products businesses respectively, offset by higher net sales of $4.3 million in the passenger car products driven by favorable price.
Net sales increased $1.9 million, or 0.4%, in the first nine months of 2025 compared to the first nine months of 2024 and included favorable changes in foreign exchange rates of $3.8 million or 0.7%. The net sales increase was primarily due to higher net sales of $10.2 million in the passenger car products business driven by favorable price and increased end market demand and favorable changes in foreign exchange rates, partially offset by lower automotive sensors business volume of $10.3 million driven by the strategic exit of certain lower margin products.
Operating Income
Operating income was $20.2 million, representing a decrease of $3.3 million, or 14.0%, for the third quarter of 2025 compared to $23.5 million for the third quarter of 2024. The decrease in operating income was primarily due to higher operating expenses and lower gross margin from the commercial vehicle and automotive sensor products businesses, partially offset by higher gross margin from the passenger car products business driven by favorable price. Operating margins decreased from 13.7% in the third quarter of 2024 to 11.8% in the third quarter of 2025.
Operating income was $67.2 million, representing an increase of $12.3 million, or 22.3%, for the first nine months of 2025 compared to $54.9 million for the first nine months of 2024. The increase in operating income was primarily from the commercial vehicle and passenger car products businesses due to favorable price, volume leverage, and cost reduction initiatives. Operating margins increased from 10.8% in the first nine months of 2024 to 13.1% in the first nine months of 2025 primarily driven by improved gross margin from the passenger car and commercial vehicle products businesses, partially offset by lower gross margin in the automotive sensors business.
Industrial Segment
Net Sales
Net sales increased $4.1 million, or 4.4%, in the third quarter of 2025 compared to the third quarter of 2024 and included favorable changes in foreign exchange rates of $0.4 million. The net sales increase was due to higher net sales from industrial circuit protection products driven by favorable price and higher volume.
Net sales increased $29.8 million, or 11.9%, in the first nine months of 2025 compared to the first nine months of 2024. The net sales increase was due to higher volume from industrial control and sensor and industrial circuit protection products driven by higher end market demand and favorable price.
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Operating Income
Operating income was $16.9 million, representing a decrease of $0.8 million, or 4.5%, for the third quarter of 2025 compared to $17.7 million for the third quarter of 2024. The decrease in operating income was due to higher operating expenses. Operating margins decreased from 19.3% in the third quarter of 2024 to 17.6% in the third quarter of 2025 due to higher operating expenses and lower gross margin in the industrial circuit protection products driven by unfavorable mix and cost inflation.
Operating income was $48.9 million, representing an increase of $16.8 million, or 52.4%, for the first nine months of 2025 compared to $32.1 million for the first nine months of 2024. The increase in operating income was driven by higher volume from industrial control and sensor and industrial circuit protection products driven by increased end market demand, favorable price and cost reductions. Operating margins increased from 12.8% in the first nine months of 2024 to 17.5% in the first nine months of 2025 due to higher volume, favorable price and cost reductions.
Geographic Net Sales Information
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:
| Third Quarter | First Nine Months | |||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | Change | % Change | 2025 | 2024 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||||
| Americas | $ | 249,880 | $ | 237,951 | $ | 11,929 | 5.0 | % | $ | 724,010 | $ | 681,064 | $ | 42,946 | 6.3 | % | ||||||||||||||||||||||||||||||||||
| Asia-Pacific | 238,008 | 213,942 | 24,066 | 11.2 | % | 667,095 | 621,731 | 45,364 | 7.3 | % | ||||||||||||||||||||||||||||||||||||||||
| Europe | 136,752 | 115,497 | 21,255 | 18.4 | % | 401,255 | 358,468 | 42,787 | 11.9 | % | ||||||||||||||||||||||||||||||||||||||||
| Total | $ | 624,640 | $ | 567,390 | $ | 57,250 | 10.1 | % | $ | 1,792,360 | $ | 1,661,263 | $ | 131,097 | 7.9 | % | ||||||||||||||||||||||||||||||||||
Americas
Net sales increased $11.9 million, or 5.0%, in the third quarter of 2025 compared to the third quarter of 2024 and included favorable changes in foreign exchange rates of $0.2 million. The increase in net sales was primarily due to higher volume from the electronics products business within the Electronics segment, partially offset by lower volume from the commercial vehicle businesses within the Transportation segment and industrial circuit protection products within the Industrial segment.
Net sales increased $42.9 million, or 6.3%, in the first nine months of 2025 compared to the first nine months of 2024 and included unfavorable changes in foreign exchange rates of $0.4 million. The increase in net sales was due to higher volume from the electronics products business within the Electronics segment and the Industrial segment, partially offset by lower volume from the automotive sensor products and passenger car product businesses within the Transportation segment.
Asia-Pacific
Net sales increased $24.1 million, or 11.2%, in the third quarter of 2025 compared to the third quarter of 2024 and included favorable changes in foreign exchange rates of $0.2 million. The increase in net sales was primarily due to higher volume from the Electronics segment and industrial circuit protection products within the Industrial segment.
Net sales increased $45.4 million, or 7.3%, in the first nine months of 2025 compared to the first nine months of 2024 and included unfavorable changes in foreign exchange rates of $1.6 million. The increase in net sales was primarily due to higher volume from the electronics products business within the Electronics segment, industrial circuit protection products within the Industrial segment and the passenger car products and the commercial vehicle businesses within the Transportation segment, partially offset by lower volume from the automotive sensor business within the Transportation segment.
Europe
Net sales increased $21.3 million, or 18.4%, in the third quarter of 2025 compared to the third quarter of 2024 and included favorable changes in foreign exchange rates of $7.0 million. The increase in net sales was primarily due to $12.9 million or 11.1% of incremental net sales from the Dortmund Fab acquisition in the semiconductor business within the Electronics segment.
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Net sales increased $42.8 million, or 11.9%, in the first nine months of 2025 compared to the first nine months of 2024 and included favorable changes in foreign exchange rates of $9.8 million. The increase in net sales was primarily due to $36.4 million or 10.2% of incremental net sales from the Dortmund Fab acquisition in the semiconductor business within the Electronics segment.
Liquidity and Capital Resources
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 $814.7 million as of September 27, 2025, an increase of $89.8 million, as compared to December 28, 2024. As of September 27, 2025, $345.0 million of the Company's $814.7 million cash and cash equivalents was held by U.S. subsidiaries.
Revolving Credit Facility and Term Loan
On June 30, 2022, the Company amended and restated its Credit Agreement, dated as of April 3, 2020 (the “Credit Agreement”) to effect certain changes, including, among other changes: (i) adding a $300 million unsecured term loan credit facility; (ii) making certain financial and non-financial covenants less restrictive on the Company and its subsidiaries; (iii) replacing LIBOR-based interest rate benchmarks and modifying performance-based interest rate margins; and (iv) extending the maturity date to June 30, 2027 (the “Maturity Date”). Pursuant to the Credit Agreement, the Company may, from time to time, increase the size of the revolving credit facility or enter into one or more tranches of term loans in minimum increments of $25 million if there is no event of default and the Company is in compliance with certain financial covenants.
Loans made under the available credit facility pursuant to the Credit Agreement ("the Credit Facility") bear interest at the Company’s option, at either Secured Overnight Financing Rate ("SOFR"), fixed for interest periods of one, two, three or six-month periods, plus 1.00% to 1.75%, plus a SOFR adjustment of 0.10% or at the bank’s Base Rate, as defined in the Credit Agreement, plus 0.00% to 0.75%, based upon the Company’s Consolidated Leverage Ratio, as defined in the Credit Agreement. The Company is also required to pay commitment fees on unused portions of the Credit Facility ranging from 0.10% to 0.175%, based on the Consolidated Leverage Ratio, as defined in the Credit Agreement. The Credit Agreement includes representations, covenants and events of default that are customary for financing transactions of this nature.
Under the Credit Agreement, revolving loans may be borrowed, repaid and reborrowed until the Maturity Date, at which time all amounts borrowed must be repaid. The Company borrowed $300.0 million under a term loan on June 30, 2022. The principal balance of the term loans must be repaid in quarterly installments on the last day of each calendar quarter in the amount of $1.9 million commencing September 30, 2022, through June 30, 2024, and in the amount of $3.8 million commencing September 30, 2024, through March 31, 2027, with the remaining outstanding principal balance payable in full on the Maturity Date. Accrued interest on the loans is payable in arrears on each interest payment date applicable thereto and at such other times as may be specified in the Credit Agreement. Subject to certain conditions, (i) the Company may terminate or reduce the Aggregate Revolving Commitments, as defined in the Credit Agreement, in whole or in part, and (ii) the Company may prepay the revolving loans or the term loans at any time, without premium or penalty. During the three and nine months ended September 27, 2025, the Company made term loan payments of $3.8 million and $11.3 million, respectively. The revolving loan and term loan balances under the Credit Facility were $100.0 million and $270.0 million, respectively, as of September 27, 2025.
On May 12, 2022, the Company entered into an interest rate swap agreement to manage interest rate risk exposure, effectively converting the interest rate on the Company's SOFR based floating-rate loans to a fixed-rate. The interest rate swap, with a notional value of $200 million, was designated as a cash flow hedge against the variability of cash flows associated with the Company's SOFR based loans scheduled to mature on June 30, 2027.
As of September 27, 2025, the effective interest rate on the unhedged portion of the outstanding borrowings under the credit facility was 5.26%, and 4.13% on the hedged portion.
As of September 27, 2025, the Company had $0.1 million outstanding letters of credit and had $599.9 million of borrowing capacity available under the revolving credit facility. As of September 27, 2025, the Company was in compliance with all covenants under the Credit Agreement.
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Senior Notes
On December 8, 2016, the Company entered into a Note Purchase Agreement, pursuant to which the Company issued and sold €212 million aggregate principal amount of senior notes in two series. The funding date for the Euro denominated senior notes occurred on December 8, 2016 for €117 million in aggregate amount of 1.14% Senior Notes, Series A, due December 8, 2023 (“Euro Senior Notes, Series A due 2023”), and €95 million in aggregate amount of 1.83% Senior Notes, Series B due December 8, 2028 (“Euro Senior Notes, Series B due 2028”) (together, the “Euro Senior Notes”). During the fiscal year ended December 30, 2023, the Company paid off €117 million of Euro Senior Notes, Series A due on December 8, 2023. Interest on the Euro Senior Notes due 2028 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”) were funded. During the fiscal year ended December 31, 2022, the Company paid off $25 million of U.S. Senior Notes, Series A due on February 15, 2022. Interest on the U.S. Senior Notes due 2027 is payable semiannually on February 15 and August 15, commencing August 15, 2017.
On November 15, 2017, the Company entered into a Note Purchase Agreement pursuant to which the Company issued and sold $175 million in aggregate principal amount of senior notes in two series. 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”) were funded. During the first fiscal quarter of 2025, the Company paid off $50 million of U.S. Senior Notes, Series A, due February 15, 2025. Interest on the U.S. Senior Notes, series B due 2030 is payable semiannually on February 15 and August 15, commencing on August 15, 2018.
On May 18, 2022, the above note purchase agreements were amended to, among other things, update certain terms, including financial covenants to be consistent with the terms of the restated Credit Agreement and the 2022 Purchase Agreement, as defined below.
On May 18, 2022, the Company entered into a Note Purchase Agreement (“2022 Purchase Agreement”) pursuant to which the Company issued and funded on July 18, 2022 $100 million in aggregate principal amount of 4.33% Senior Notes, due June 30, 2032 (“U.S. Senior Notes due 2032”) (together with the U.S. Senior Notes due 2025 and 2030, the Euro Senior Notes and the U.S. Senior Notes due 2022 and 2027, the “Senior Notes”). Interest on the U.S. Senior Notes due 2032 is payable semiannually on June 30 and December 30, commencing on December 30, 2022.
The Senior Notes have not been registered under the Securities Act of 1933 ("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.
The Company may redeem the Senior Notes upon the satisfaction of certain conditions and the payment of a make-whole amount to note holders and are required to offer to repurchase the Senior Notes at par following certain events, including a change of control.
Debt Covenants
The Company was in compliance with all covenants under the Credit Agreement and Senior Notes as of September 27, 2025 and currently expects to remain in compliance based on management’s estimates of operating and financial results for 2025. As of September 27, 2025, the Company met all the conditions required to borrow under the Credit Agreement and management expects the Company to continue to meet the applicable borrowing conditions.
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Acquisitions
On December 31, 2024, the Company completed the acquisition of Dortmund Fab from Elmos Semiconductor SE. The total purchase price for the Dortmund Fab was approximately €94 million, of which a €37.2 million down payment (approximately $40.5 million) was paid in the third quarter of 2023 after regulatory approvals, and €56.7 million (approximately $58.8 million) was paid at closing. The business is reported in the Electronics-Semiconductor business within the Company’s Electronics segment.
Dividends
During the third quarter of 2025, the Company paid quarterly dividends of $18.6 million to its shareholders. On October 29, 2025, the Company announced the declaration of a quarterly cash dividend of $0.75 per share payable on December 4, 2025 to stockholders of record as of November 20, 2025.
Cash Flow Overview
| First Nine Months | ||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
| Net cash provided by operating activities | $ | 295,099 | $ | 206,999 | ||||||||||
| Net cash used in investing activities | (99,701) | (41,134) | ||||||||||||
| Net cash used in financing activities | (126,274) | (91,299) | ||||||||||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 20,868 | (396) | ||||||||||||
| Increase in cash, cash equivalents, and restricted cash | 89,992 | 74,170 | ||||||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | 726,437 | 557,123 | ||||||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 816,429 | $ | 631,293 | ||||||||||
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 $295.1 million for the nine months ended September 27, 2025 compared to $207.0 million for the nine months ended September 28, 2024. The increase in net cash provided by operating activities of $88.1 million was primarily due to higher cash earnings and reductions in working capital.
Cash Flow from Investing Activities
Net cash used in investing activities was $99.7 million for the nine months ended September 27, 2025 compared to $41.1 million during the nine months ended September 28, 2024. Net cash paid for the Dortmund Fab acquisition was $57.4 million during the nine months ended September 27, 2025. Capital expenditures were $48.7 million, representing a decrease of $1.4 million, compared to the nine months ended September 28, 2024. During the nine months ended September 27, 2025, the Company received proceeds of $5.6 million from the sale of the Marine business within the Transportation segment. During the nine months ended September 28, 2024, the Company received proceeds of $9.7 million from the sale of a land use right within the Electronics segment and two buildings within the Transportation segment.
Cash Flow from Financing Activities
Net cash used in financing activities was $126.3 million for the nine months ended September 27, 2025 compared to $91.3 million for the nine months ended September 28, 2024. During the nine months ended September 27, 2025, the Company paid off $50 million of U.S. Senior Notes, Series A, due February 15, 2025 and made payments of $11.3 million on the term loan. During the nine months ended September 28, 2024, the Company made payments of $3.8 million on the term loan. The Company paid dividends of $53.3 million and $49.7 million in the nine months ended September 27, 2025 and September 28, 2024, respectively. In addition, during the nine months ended September 27, 2025 and September 28, 2024, the Company repurchased 120,689 shares of its common stock totaling $27.4 million and 179,311 shares of its common stock totaling $40.9 million, respectively. The Company paid a $0.2 million excise tax related to the share repurchases during the nine months ended September 27, 2025. In addition, the Company received $17.9 million cash from stock option exercise activities during the nine months ended September 27, 2025 compared to $5.0 million for the nine months ended September 28, 2024.
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Share Repurchase Program
On April 25, 2024, the Company's Board of Directors authorized a three-year program to repurchase up to $300.0 million in the aggregate of shares of the Company's stock for the period from May 1, 2024 to April 30, 2027 ("2024 program") to replace its previous 2021 program. The Company did not repurchase shares of its common stock for the three months ended September 27, 2025. During the nine months ended September 27, 2025, the Company repurchased 120,689 shares of its common stock totaling $27.4 million pursuant to the 2024 program. During the nine months ended September 28, 2024, the Company repurchased 179,311 shares of its common stock totaling $40.9 million, of which $38.9 million was pursuant to the 2021 program and $2.0 million was pursuant to the 2024 program.
Off-Balance Sheet Arrangements
As of September 27, 2025, the Company did not have any off-balance sheet arrangements, as defined under SEC rules. Specifically, the Company was not liable for guarantees of indebtedness owed by third parties, the Company was not directly liable for the debt of any unconsolidated entity and the Company did not have any retained or contingent interest in assets. 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, 2024. During the nine months ended September 27, 2025, there were no significant changes in the application of critical accounting policies and estimates.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See Item 7A, Quantitative and Qualitative Disclosures about Market Risk, of the Company's Annual Report on Form 10-K for the year ended December 28, 2024. During the nine months ended September 27, 2025, there were no material changes in the Company's exposure to market risk.
ITEM 4. CONTROLS AND PROCEDURES
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 the Company's Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.
In connection with the preparation of this report, management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of September 27, 2025. Based on that evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the quarter ended September 27, 2025, the Company's disclosure controls and procedures were not effective, because of the previously reported material weaknesses in internal control over financial reporting, as described below.
Previously Reported Material Weaknesses in Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Exchange Act Rule 13a-15(f) and 15d-15(f) based on the criteria established in Internal Control-Integrated Framework (2013)
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issued by the Committee of Sponsoring Organizations of the Treadway Commission (“the COSO Framework). As reported in our Form 10-K for the fiscal year ended December 28, 2024, we did not maintain effective internal control over financial reporting as of December 28, 2024 as a result of material weaknesses in the control environment and control activities areas. A material weakness (as defined in Rule 12b-2 under the Exchange Act) is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Refer to our 2024 Form 10-K for a description of our material weaknesses.
Ongoing Remediation Efforts to Address Material Weaknesses
Our material weaknesses were not remediated as of September 27, 2025. Our management team is committed to maintaining a strong internal control environment. The Company, with oversight from our Audit Committee of the Board of Directors, is taking comprehensive actions to remediate the material weaknesses. The Company has developed and is in the process of implementing its remediation plan, which includes the following steps:
Control Environment
•recruiting of personnel with appropriate internal controls, and accounting knowledge and experience commensurate with our accounting and reporting requirements;
•enhanced supervision of personnel at certain locations to ensure compliance with established Company policies; and
•evaluating and updating (as appropriate) the sufficiency of policies and training provided to personnel to ensure the appropriate segregation of duties and adherence to the Code of Conduct.
Control Activities
•augmentation of training and clear instruction as to the process for recording of adjustments to inventories;
•full physical inventory observations, facilitated by independent counters, until the cycle count and related inventory existence controls at certain of our non-U.S. manufacturing locations are operating effectively;
•implementation of a management review control over inventory movements; and
•examination and enhancement of the procedures to evaluate the completeness and accuracy of data and assumptions utilized in computing inventory reserves.
The Company has made progress with a number of initiatives and actions to address the previously reported material weaknesses, which include the following:
Control Environment
•The Company has replaced certain key finance and operational roles at certain non-U.S. manufacturing locations, and continues to actively recruit the remaining open roles;
•The Company is substantially complete with the redesign of the regional operations and finance organizational structures; and
•New corporate policies and procedures have been adopted and disseminated along with training provided to strengthen the control environment and inventory management oversight.
Control Activities
•Key monitoring controls have been designed and implemented for cycle counts, full physical count, inventory storage locations, and excessive and obsolete inventory calculations; and
•Full physical inventory observations, facilitated by independent counters, have been performed in certain non-U.S. locations in the second and third quarter of 2025 and will continue for the remainder of fiscal year 2025.
We intend to remediate the material weaknesses as soon as possible; however, the material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that the appropriate controls are operating effectively.
Changes in Internal Control over Financial Reporting
Other than the ongoing remediation efforts described above, there were no changes in the Company's internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(f) and 15d-15(f) under the Exchange Act that occurred during the quarter ended September 27, 2025 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
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PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
Changes in U.S. and other countries trade policy, including the imposition of tariffs and the resulting consequences and uncertainties, may have a material adverse impact on our business and results of operations.
Our international presence subjects us to risks associated with international trade conflicts between the United States and its trade partners, particularly with regard to the risk of heightened tariffs and import/export controls. Recently, the U.S. government has imposed extensive tariffs on several countries, including, without limitation, China, Mexico and Canada, as well as certain broad, product-specific tariffs on foreign goods and products. Tariffs may increase the cost of materials in our supply chain, incur reciprocal levies on components and finished products exported to or imported from affected countries, and have an adverse impact on our cost of goods sold in the U.S. and abroad. These factors in turn could require us to materially increase prices to our customers which may reduce demand, or, if we do not or are unable to increase prices, could result in lower margins on products sold. Additionally, the adoption or threat of adoption of extensive tariffs could result in an economic slowdown, a significant reduction in consumer confidence, and an increased risk of inflationary pressure, all of which, either separately or together, could adversely affect our business.
Tariffs have resulted in China and other countries imposing reciprocal tariffs on U.S. goods and ceasing sales of certain products to the U.S. and could result in more U.S. trading partners adopting responsive trade policies, including making it more difficult or costly for us to export our products to those countries. Sales to customers outside of the U.S., and to China in particular, comprise a significant portion of our net sales, and reciprocal tariffs may impact our business in China. Continued geopolitical issues and barriers to trade may result in customers outside the U.S. seeking to source products from local suppliers, which could further result in lower sales or lost customers. Further, tariffs and trade policies may continue to change quickly and without warning, and we may not be able to accurately anticipate and mitigate the impacts.
Other than the item listed above, there have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for our year ended December 28, 2024.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Recent Sales of Unregistered Securities
None.
Repurchases of Common Stock
On April 25, 2024, the Company's Board of Directors authorized a three-year program to repurchase up to $300.0 million in the aggregate of shares of the Company's stock for the period from May 1, 2024 to April 30, 2027 ("2024 program") to replace its previous 2021 program. The Company did not repurchase shares of its common stock for the three months ended September 27, 2025. During the nine months ended September 27, 2025, the Company repurchased 120,689 shares of its common stock totaling $27.4 million pursuant to the 2024 program. During the nine months ended September 28, 2024, the Company repurchased 179,311 shares of its common stock totaling $40.9 million, of which $38.9 million was pursuant to the 2021 program and $2.0 million was pursuant to the 2024 program.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION
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ITEM 6. EXHIBITS
| Exhibit | Description | |||||||
| 2.1 | ||||||||
| 10.1* | ||||||||
| 10.2 | ||||||||
| 31.1* | ||||||||
| 31.2* | ||||||||
| 32.1** | ||||||||
| 101 | The following financial information from LITTELFUSE, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 27, 2025 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 Condensed Consolidated Statements of Stockholders' Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to the Condensed Consolidated Financial Statements. | |||||||
| 104 | The cover page from this Quarterly Report on Form 10-Q for the quarter ended September 27, 2025, formatted in Inline XBRL. | |||||||
| * | Filed herewith. | |||||||
| ** | Furnished herewith. | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q for the quarter ended September 27, 2025, to be signed on its behalf by the undersigned thereunto duly authorized.
| Littelfuse, Inc. | |||||||||||
| By: | /s/ Abhishek Khandelwal | ||||||||||
| Abhishek Khandelwal | |||||||||||
| Executive Vice President and Chief Financial Officer | |||||||||||
Date: October 29, 2025 | By: | /s/ Jeffrey G. Gorski | |||||||||
| Jeffrey G. Gorski | |||||||||||
| Senior Vice President and Chief Accounting Officer | |||||||||||
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