10-K – 2026-02-19 – lfus-20251227.htm

The preparation of financial statements in conformity with Generally Accepted Accounting Principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes that its estimates and assumptions are reasonable, they are based upon information available when they are made, and therefore, actual results may differ from these estimates under different assumptions or conditions. The Company has reviewed these critical accounting estimates and related disclosures with the Audit Committee of its Board of Directors. Significant accounting policies are described in the Notes to Consolidated Financial Statements included elsewhere in this Annual Report.

Goodwill
 
The Company’s methodology for allocating the purchase price of acquisitions is based on established valuation techniques that reflect the consideration of a number of factors, including valuations performed by third-party appraisers when appropriate. Goodwill is measured as the excess of the cost of an acquired entity over the fair value assigned to identifiable assets acquired and liabilities assumed. Based on its current organization structure, the Company has seven reporting units for which cash flows are determinable and to which goodwill has been allocated.
 
The Company annually tests goodwill for impairment 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. The Company also performs an interim review for indicators of impairment each quarter to assess whether an interim impairment review is required for any reporting unit. As part of its interim reviews, management analyzes potential changes in the value of individual reporting units based on each reporting unit’s operating results for the period compared to expected results as of the prior year’s annual impairment test. In addition, management considers how other key assumptions, including discount rates and expected long-term growth rates, used in the last annual impairment test, could be impacted by changes in market conditions and economic events.

Based on the results of the annual goodwill impairment test in 2025, in the fourth quarter, the Company recorded a non-cash charge of $301.2 million to reflect the impairment of goodwill for the Electronics-Semiconductor reporting unit within the Electronics segment, reflecting the amount by which the reporting unit’s estimated fair value was below its carrying value. The estimated fair value declined primarily due to updates to management’s forecasts that reduced revenue growth, profitability and cash flows. These forecasts require significant judgment and are inherently uncertain, particularly in light of the recent leadership transition and strategic reassessment in the semiconductor business. The reduction in projected cash flows was driven principally by lower projected volumes in the power semiconductor business, largely associated with the Dortmund fab, which reduced expected future cash generation for the reporting unit. Changes in future operating performance relative to these projections, or further changes in strategy, market conditions, or execution related to the Dortmund fab, could affect the reporting unit’s estimated fair value and may result in additional impairment charges in future periods.

As a result of the 2024 annual goodwill impairment test, the Company recorded non-cash charges of $36.1 million and $8.6 million to reflect the impairment of goodwill for the Industrial Controls and Sensors reporting unit within the Industrial segment and the Automotive Sensors reporting unit within the Transportation segment, respectively. The goodwill impairment charge for the Industrial Controls and Sensors reporting unit was due to a reduction in the estimated fair value of the reporting unit based on lower expectations for future revenue, profitability and cash flows as compared to the expectations of the 2023 annual goodwill impairment test. These lower expectations were driven by lower-than-expected demand in the electric vehicle end market as well as reduced government funding to support charging infrastructures for electric vehicles, primarily in Europe.

There was no impairment charge recorded during the fiscal year of 2023.

Quantitative Assessment for Impairment
 
For the six reporting units with goodwill, the Company compares the estimated fair value of each reporting unit to its carrying value. There was no goodwill remaining within the Automotive Sensors reporting unit. If the carrying value of a reporting unit exceeds the estimated fair value, the difference between the estimated fair value and carrying value is recorded as the amount of the goodwill impairment charge. As a result of the impairment charge described above, the Electronics-Semiconductor reporting unit had $238.5 million of goodwill as of December 27, 2025. For the remainder of the Company's reporting units with goodwill: Electronics-Passive Products and Sensors, Passenger Car Products, Commercial Vehicle Products, Industrial Controls and Sensors, and Industrial Circuit Protection, the results of the goodwill impairment test as of September 28, 2025 indicated that their estimated fair values exceeded their respective carrying values.
 
As part of its impairment test for these reporting units, the Company engaged a third-party appraisal firm to assist in the Company’s determination of the estimated fair values. This determination included estimating the fair value of each reporting unit using both the income and market approaches. The income approach requires management to estimate a number of factors for each reporting unit, including projected operating results, economic projections, anticipated future cash flows, discount rates and the allocation of shared or corporate items. The market approach estimates fair values using comparable marketplace fair value data from within a comparable industry grouping. The Company weighted both the income and market approach equally to estimate the concluded fair value of each reporting unit. The determination of fair value requires the Company to make significant estimates and assumptions, which primarily include, but are not limited to: the selection of appropriate peer group companies; control premiums appropriate for acquisitions in which the Company competes; the discount rate; terminal growth rates; and forecasts of revenue, operating income, depreciation and amortization and capital expenditures.
 
Goodwill Impairment Assumptions
 
Although the Company believes its estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates. Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on the fair value of the reporting units. Future declines in the overall market value of the Company’s equity may also result in a conclusion that the fair value of one or more reporting units has declined below its carrying value.
 
One measure of the sensitivity of the amount of goodwill impairment charges to key assumptions is the amount by which each reporting unit “passed” (fair value exceeds the carrying value) the goodwill impairment test. With the exception of the Electronics-Semiconductor reporting unit within the Electronics segment, the other five reporting units with goodwill passed the goodwill impairment test, with estimated fair values that exceeded the carrying values between 22% and 303%. As of the most recent annual test conducted on September 28, 2025, the Company noted that the excess of fair value over the carrying value was 87%, 153%, 99%, 22% and 303% for its reporting units: Electronics-Passive Products and Sensors, Passenger Car Products, Commercial Vehicle Products, Industrial Controls and Sensors, and Industrial Circuit Protection, respectively.
 
Generally, changes in estimates of expected future cash flows would have a similar effect on the estimated fair value of the reporting unit. That is, a 1.0% decrease in estimated annual future cash flows would decrease the estimated fair value of the reporting unit by approximately 1.0%. The estimated long-term net sales growth rate can have a significant impact on the estimated future cash flows, and therefore, the fair value of each reporting unit. A 1.0% decrease in the long-term net sales growth rate would have resulted in no additional reporting units failing the goodwill impairment test. Of the other key assumptions that impact the estimated fair values, most reporting units have the greatest sensitivity to changes in the estimated discount rate. The estimated discount rate was 12.0% for the Electronics-Passive Products and Sensors reporting unit, 12.5% for the Electronics-Semiconductor reporting unit, 11.0% for the Passenger Car Products and Commercial Vehicle Products reporting units, 14.0% for the Industrial Controls and Sensors reporting unit, and 13.0% for Industrial Circuit Protection reporting unit. A 1.0% increase in the estimated discount rates would have resulted in no reporting units failing the annual goodwill impairment test. The Company believes that its estimates of future cash flows and discount rates are reasonable, but future changes in the underlying assumptions could differ due to the inherent uncertainty in making such estimates. Additionally, price deterioration or lower volume could have a significant impact on the fair values of the reporting units.

Long-Lived Assets
 
The Company evaluates the recoverability of other long-lived assets, including property, plant and equipment and certain identifiable intangible assets, whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. Factors which could trigger an impairment review include significant underperformance relative to historical or projected operating results, significant changes in the manner of use of the assets or the strategy for the overall business, and a significant decrease in the market value of the assets or significant negative industry or economic trends. When the Company determines that the carrying value of long-lived assets may not be recoverable based upon the existence of one or
more of the indicators, the assets are assessed for impairment based on the estimated future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the carrying value of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s carrying value over its fair value.

For the fiscal year ended December 27, 2025, the Company recognized impairment charges of $0.5 million and $0.4 million related to certain machinery and equipment in the commercial vehicle business within the Transportation segment and the electronics products business within the Electronics segment, respectively.

For the fiscal year ended December 28, 2024, the Company recorded non-cash impairment charges of $47.8 million for the impairment of intangible assets, including $47.6 million related to the impairment of certain acquired customer relationships, developed technology, and tradename intangible assets in the Industrial controls and sensors reporting unit within the Industrial segment. The impairment of the intangible assets resulted from lower expectations of future revenue and cash flows driven by lower-than-expected demand in the electrical vehicle end market as well as reduced government funding to support charging infrastructures for electric vehicles, primarily in Europe. The remaining impairment charges included $0.2 million for patents and customer relationships related to the exit of a small business in China within the Industrial segment. In addition, during the first quarter of 2024, the Company recognized a $0.9 million impairment related to certain machinery and equipment in the commercial vehicle business within the Transportation segment.

For the fiscal year ended December 30, 2023, the Company recognized a $3.9 million impairment charge related to the land and building of a property in the commercial vehicle business within the Transportation segment that the Company made the decision to donate, a $0.9 million impairment charge substantially related to certain patents in a business within the Industrial segment, and a $0.1 million impairment on certain machinery and equipment in the semiconductor business within the Electronics segment.

Purchase Price Allocation

The Company records acquisitions using the purchase method of accounting. All of the assets acquired and liabilities assumed are recorded at fair value as of the acquisition date. The excess of the purchase price over the estimated fair values of the net tangible and intangible assets acquired is recorded as goodwill. The application of the purchase method of accounting for business combinations requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed, in order to properly allocate purchase price consideration between assets that are depreciated and amortized from goodwill. The fair value assigned to tangible and intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. Significant assumptions and estimates include, but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted-average cost of capital, and the cost savings expected to be derived from acquiring an asset. If the actual results differ from the estimates and judgments used in these estimates, the amounts recorded in the financial statements may be exposed to potential impairment of the intangible assets and goodwill, as discussed in the Goodwill and Long-lived Assets under the Critical Accounting Estimates section.

A significant portion of these fair value measurements relate to identifiable intangible assets, including customer relationships. The valuation of customer relationships is a critical accounting estimate due to the significant judgment required and the sensitivity of the estimate to changes in assumptions. Changes in these assumptions, particularly the attrition rate and discount rate, could have a material impact on the estimated fair value of customer relationships and the related amortization expense recognized in future periods.

Income Taxes
 
The Company accounts for income taxes using the asset and liability method. Deferred taxes are recognized for the future effects of temporary differences between financial and income tax reporting using tax rates in effect for the years in which the differences are expected to reverse. The Company recognizes deferred taxes for temporary differences, operating loss carryforwards and tax credit and other tax attribute carryforwards (excluding carryforwards where usage has been determined to be remote). Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. U.S. state and non-U.S. income taxes are provided on the portion of non-U.S. income that is expected to be remitted to the U.S. and be taxable (and non-U.S. income taxes are provided on the portion of non-U.S. income that is expected to be remitted to an upper-tier non-U.S. entity). Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Deferred income taxes are not provided on the excess of the investment value for financial reporting over the tax basis of investments in those non-U.S. subsidiaries for which such excess is considered to be permanently reinvested in those operations. Management regularly evaluates whether non-U.S. earnings are expected to be permanently reinvested. This evaluation requires judgment about the future operating and liquidity needs of the Company and its non-U.S. subsidiaries. Changes in economic and business conditions, non-U.S. or U.S. tax laws, or the Company’s financial situation could result in changes to these judgments and the need to record additional tax liabilities.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

There are a number of estimates and assumptions inherent in calculating the various components of income taxes. Future events such as changes in tax legislation, jurisdictional mix of earnings, findings in tax audits, and earnings repatriation plans could have an impact on those estimates and our effective tax rate.

The 2017 Tax Cuts and Jobs Act (the "Tax Act"), among other things, imposed a one-time tax (the “Toll Charge”) on accumulated earnings of certain non-U.S. subsidiaries and included base broadening provisions commonly referred to as the global intangible low-taxed income provisions ("GILTI").

T he Company elected to pay its 2017 Toll Charge over the eight-year period prescribed by the Tax Act. The eighth and final installment of the Toll Charge of $8.2 million was paid in 2025, and accordingly, there was no remaining liability on the Consolidated Balance Sheet as of December 27, 2025.

In accordance with guidance issued by the Financial Accounting Standards Board ("FASB") staff, the Company has adopted an accounting policy to treat any GILTI inclusions as a period cost if and when incurred. Thus, for the fiscal years ended December 27, 2025, December 28, 2024, and December 30, 2023, deferred taxes were computed without consideration of the possible future impact of the GILTI provisions, and any current year impact was recorded as a part of the current portion of income tax expense.

On July 4, 2025, the United States enacted into law the legislation formally titled "An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14," and commonly referred to as the One Big Beautiful Bill Act ("OBBB"). The OBBB contains multiple business tax provisions, including the permanent extension of several expiring provisions of the Tax Act and multiple modifications to the international tax framework. The legislation has multiple effective dates with certain provisions effective in 2025 and others to be implemented in future years, and the Company determined the impact for the year ended December 27, 2025 was not significant. The Company will continue to monitor future administrative guidance and regulations that clarify the legislative text of the OBBB and the bill’s potential effect on the Company’s income taxes.

Further information regarding income taxes, including a detailed reconciliation of current year activity, is provided in Note 14, Income Taxes , of the Notes to Consolidated Financial Statements included in this Annual Report. 
 
Pension Plans
 
The Company records annual income and expense amounts relating to its pension and postretirement benefits plans based on calculations which include various actuarial assumptions including discount rates, expected long-term rates of return, and compensation increases. The Company reviews its actuarial assumptions on an annual basis as of the fiscal year-end balance sheet date (or more frequently if a significant event requiring remeasurement occurs) and modifies the assumption based on current rates and trends when it is appropriate to do so. The effects of modifications are recognized immediately on the Consolidated Balance Sheets but are generally amortized into operating earnings over future periods, with the deferred amount recorded in accumulated other comprehensive loss. The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience, market conditions and input from its actuaries and investment advisors. The Company maintains several pension plans in international locations. The expected returns on plan assets and discount rates are determined based on each plan’s investment approach, local interest rates and plan participant profiles. The weighted-average discount rates for the Company’s defined benefit plans primarily in Europe and the Asia-Pacific regions at December 27, 2025 and December 28, 2024 were 6.1% and 5.6%, respectively.

On October 4, 2024, the Company entered into a definitive agreement to purchase a group annuity contract, under which an insurance company will be 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 $25 million, representing approximately 31% 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 the second half of 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.

Equity-Based Compensation
 
Equity-based compensation expense is recorded for stock-option awards and restricted share units and performance share units based upon the fair values of the awards. The fair value of stock-option awards is estimated at the grant date using the Black-Scholes option pricing model, which includes assumptions for volatility, expected term, risk-free interest rate, and dividend yield. Expected volatility is based on implied volatilities from traded options on Littelfuse stock, historical volatility of Littelfuse stock, and other factors. Historical data is used to estimate employee termination experience and the expected term of the options. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The Company initiated a quarterly cash dividend in 2010 and expects to continue making cash dividend payments for the foreseeable future. The fair value of restricted share units without rights to dividend equivalents is determined based on the Company's stock price on the grant date reduced by the present value of expected dividends through the vesting period. The fair value of restricted share units with rights to dividend equivalents is based on the Company’s stock price on the grant date. The fair value of performance share units is estimated at the grant date using Monte Carlo simulation which includes assumptions for volatility, correlation, risk-free interest rate, and dividend yield. Expected volatilities and correlation factors are based on the historical volatility of the Company’s and each peer company’s stock price. The risk-free rates are based on yields available at the time of grant on U.S. Treasury bonds with maturities consistent with the remaining performance period.
 
Total equity-based compensation expense for all equity compensation plans was $28.6 million, $27.4 million, and $25.7 million in 2025, 2024, and 2023, respectively. Further information regarding this expense is provided in Note 12, Stock-Based Compensation , of the Notes to Consolidated Financial Statements included in this Annual Report.

In the financial review that follows, the Company discusses its consolidated results of operations, financial position, cash flows and certain other information. This discussion should be read in conjunction with the Company’s Consolidated Financial Statements and related notes.
 
RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 27, 2025 AS COMPARED TO THE YEAR ENDED DECEMBER 28, 2024

Fiscal year 2025 included $302.1 million of non-cash impairment charges, which included a $301.2 million non-cash goodwill impairment charge associated with the Electronics-Semiconductor reporting unit within the Electronics segment. In addition, the Company recognized impairment charges of $0.5 million and $0.4 million related to certain machinery and equipment in the commercial vehicle business within the Transportation segment and the electronics products business within the Electronics segment, respectively. The Company also recognized total restructuring charges of $18.0 million, primarily for employee termination costs. These charges primarily related to the reorganization of certain manufacturing, selling and administrative functions in the power semiconductor business within the Electronics segment and the reorganization of certain manufacturing, selling and administrative functions in the commercial vehicle business and automotive sensors business within the Transportation segment. See Note 8, Restructuring, Impairment and Other Charges, for further discussion. Also included in "Other" Operating income was $5.4 million of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, $0.6 million of purchase accounting inventory adjustments related to the Basler and Dortmund Fab acquisitions, and a $0.3 million loss related to the sale of the Marine business within the Transportation segment.

Fiscal year 2024 included $93.5 million of non-cash impairment charges, which included $47.8 million for the impairment of intangible assets primarily related to certain acquired customer relationships, developed technology, and tradename in the Industrial Controls and Sensors reporting unit within the Industrial segment, and $36.1 million and $8.6 million of non-cash goodwill impairment charges associated with the Industrial Controls and Sensors reporting unit within the Industrial segment and the Automotive Sensors reporting unit within the Transportation segment, respectively. The remaining impairment charges included $0.2 million for patents and customer relationships related to the exit of a small business in China within the Industrial segment. In addition, 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. The Company also recognized total restructuring charges of $14.9 million, primarily for employee termination costs related to the reorganization of certain manufacturing, selling and administrative functions in the semiconductor business within the Electronics segment and
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the reorganization of certain selling and administrative functions in the commercial vehicle business within the Transportation segment. See Note 8, Restructuring, Impairment and Other Charges, for further discussion. Also included in "Other" Operating income was $5.1 million of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, a gain of $1.0 million for the sale of two buildings within the Transportation segment, and a gain of $0.5 million recorded for the sale of a land use right within the Electronics segment.

Fiscal year 2025 also included approximately $16.6 million in foreign currency exchange losses primarily attributable to changes in the value of the Euro and Chinese renminbi against the U.S. dollar, while fiscal year 2024 included approximately $9.2 million in foreign currency exchange gains primarily attributable to changes in the value of the Euro, Korean won, and Chinese renminbi against the U.S. dollar.
 
  Fiscal Year    
(in thousands, except % change) 2025 2024 Change % Change
Net sales $ 2,386,294  $ 2,190,768  $ 195,526  8.9  %
Cost of sales 1,480,251  1,403,226  77,025  5.5  %
Gross profit 906,043  787,542  118,501  15.0  %
Operating expenses 868,515  628,762  239,753  38.1  %
Operating income 37,528  158,780  (121,252) (76.4) %
Other income, net (16,994) (22,570) (5,576) (24.7) %
Income before income taxes 3,607  151,863  (148,256) (97.6) %
Income taxes 75,307  51,673  23,634  45.7  %
Net (loss) income (71,700) 100,190  (171,890) (171.6) %

Net Sales

Net sales were $2,386.3 million, which increased by $195.5 million, or 8.9% compared to 2024, including $49.0 million or 2.2% of incremental net sales, from the Dortmund Fab acquisition in the semiconductor business within the Electronics segment and $17.6 million or 0.8% of favorable changes in foreign exchange rates for 2025 compared to 2024. The remaining increase in net sales was primarily due to higher volume of $104.5 million in the electronics products business within the Electronics segment and $32.8 million in the Industrial segment due to higher end market demand and favorable price.

Cost of Sales

Cost of sales was $1,480.3 million, or 62.0% of net sales, in 2025 compared to $1,403.2 million, or 64.1% of net sales, in 2024. As a percent of net sales, cost of sales decreased 2.1% 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 within the Transportation segment driven by volume leverage, favorable price, and cost reduction initiatives favorably impacted the decrease in cost of sales as a percentage of net sales that was partially offset by lower margin from the semiconductor business within the Electronics segment. During the fiscal year ended December 28, 2024, the Company identified certain errors in its previously issued financial statements that were corrected through cumulative out-of-period adjustments in the financial statements as of and for the year ended December 28, 2024. The error that was identified by management related to the valuation and existence of inventory that originated in prior periods at certain of our non-U.S. manufacturing locations within the Transportation and Industrial segments. As a result, the Company recorded an out-of-period adjustment of $13.5 million in the year ended December 28, 2024, of which $12.3 million was the cumulative out-of-period adjustment related to fiscal years prior to 2024. The out-of-period adjustment negatively impacted cost of sales as a percentage of net sales by 0.6%.

Gross Profit
 
Gross profit was $906.0 million, or 38.0% of net sales, in 2025 compared to $787.5 million, or 35.9% of net sales, in 2024. The $118.5 million increase in gross profit was primarily from higher net sales of $104.5 million in the electronics products business within the Electronics segment, $15.3 million in the passenger car products business within the Transportation segment, and improved margin in the industrial circuit protection products business within the Industrial segment, driven by higher volume, favorable price, and product mix. As mentioned above, the out-of-period adjustments of $13.5 million negatively impacted gross margin by 0.6% for the fiscal year 2024.

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Operating Expenses
 
Total operating expenses were $868.5 million, or 36.4% of net sales, for 2025 compared to $628.8 million, or 28.7% of net sales, for 2024. The increase in operating expenses of $239.8 million was primarily due to an increase in restructuring, impairment, and other charges of $211.6 million. The Company recorded a non-cash goodwill impairment charge of $301.2 million associated with the Electronics-Semiconductor reporting unit within the Electronics segment during 2025, while in 2024, the Company recorded $93.5 million of non-cash impairment charges, which included $47.8 million for the impairment of intangible assets primarily related to certain acquired customer relationships, developed technology, and tradename in the Industrial Controls and Sensors reporting unit within the Industrial segment, and $36.1 million and $8.6 million of non-cash goodwill impairment charges associated with the Industrial Controls and Sensors reporting unit within the Industrial segment and the Automotive Sensors reporting unit within the Transportation segment, respectively. Additionally, the remaining increase in operating expenses in 2025 was due to higher selling, general, and administrative expenses of $31.4 million driven by higher annual incentive compensation expenses and the Dortmund Fab acquisition.
 
Operating Income
 
Operating income in 2025 was $37.5 million, a decrease of $121.3 million or 76.4% compared to $158.8 million for 2024. The decrease in operating income was primarily due to the non-cash goodwill impairment charge of $301.2 million recognized in 2025 compared to the non-cash charge of $92.6 million from the impairment of intangible assets and goodwill in 2024 as noted above, partially offset by higher operating income of $50.2 million, $26.2 million and $16.7 million across the Electronics, Transportation and Industrial segments, respectively. Operating margins decreased from 7.2% in 2024 to 1.6% in 2025 primarily driven by higher non-cash impairment charge mentioned above. The non-cash charge of $301.2 million from the impairment of goodwill negatively impacted the 2025 operating margin by 12.6%, while the total non-cash charges of $92.6 million from the impairment of intangible assets and goodwill negatively impacted the 2024 operating margin by 4.2%.

Income Before Income Taxes
 
Income before income taxes in 2025 was $3.6 million, or 0.2% of net sales compared to $151.9 million, or 6.9% of net sales for 2024. In addition to the factors impacting comparative results for operating income discussed above, income before income taxes was primarily impacted by foreign exchange losses of $16.6 million in the fiscal year 2025 compared to foreign exchange gains of $9.2 million in the fiscal year 2024, and unrealized losses of $3.6 million during the fiscal year 2025 compared to unrealized gains of $0.1 million during the fiscal year 2024 related to the Company's equity investment, and higher loss of $1.0 million from investments under equity method and higher non-operating pension expense of $0.9 million.

Income Taxes
 
Income tax expense in 2025 was $75.3 million, or an effective tax rate of 2,087.8%, compared to income tax expense of $51.7 million, or an effective tax rate of 34.0% in 2024. The effective tax rate in 2025 is higher than the effective tax rate for 2024, primarily due to t he increased impact of the goodwill impairment charge in 2025 with no related tax benefit. The effective tax rate for 2025 is higher than the statutory tax rate primarily due to the impact of the 2025 goodwill impairment with no related tax benefit as previously noted. Further information regarding these items is provided in Note 14, Income Taxes , of the Notes to Consolidated Financial Statements included in this Annual Report.

Segment Information
 
The Company reports its operations by the following segments: Electronics, Transportation and Industrial. Segment information is described more fully in Note 16, Segment Information , of the Notes to Consolidated Financial Statements included in this Annual Report.
 
The following table is a summary of the Company’s net sales and operating income by segment:
 
Net Sales Fiscal Year    
(in millions) 2025 2024 Change % Change
Electronics $ 1,345.5  $ 1,186.8  $ 158.7  13.4  %
Transportation
676.4  672.4  4.0  0.6  %
Industrial 364.4  331.6  32.8  9.9  %
Total $ 2,386.3  $ 2,190.8  $ 195.5  8.9  %

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Segment Operating Income Fiscal Year    
(in millions) 2025 2024 Change % Change
Electronics $ 220.1  $ 169.9  $ 50.2  29.6  %
Transportation
84.8  58.6  26.2  44.7  %
Industrial 59.0  42.3  16.7  39.5  %
Total segment operating income 363.9  270.8  93.1 
Other (a) (326.3) (112.0) (214.3)
Total operating income $ 37.5  $ 158.8  $ (121.2) (76.4) %
 
(a) Fiscal year 2025 included $302.1 million of non-cash impairment charges, which included a $301.2 million non-cash goodwill impairment charge associated with the Electronics-Semiconductor reporting unit within the Electronics segment. In addition, the Company recognized impairment charges of $0.5 million and $0.4 million related to certain machinery and equipment in the commercial vehicle business within the Transportation segment and the electronics products business within the Electronics segment, respectively. The Company also recognized total restructuring charges of $18.0 million, primarily for employee termination costs. These charges primarily related to the reorganization of certain manufacturing, selling and administrative functions in the power semiconductor business within the Electronics segment and the reorganization of certain manufacturing, selling and administrative functions in the commercial vehicle business and automotive sensors business within the Transportation segment. See Note 8, Restructuring, Impairment and Other Charges, for further discussion. Also included in "Other" Operating income was $5.4 million of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, $0.6 million of purchase accounting inventory adjustments related to the Basler and Dortmund Fab acquisitions, and a $0.3 million loss related to the sale of the Marine business within the Transportation segment.

Fiscal year 2024 included $93.5 million of non-cash impairment charges, which included $47.8 million for the impairment of intangible assets primarily related to certain acquired customer relationships, developed technology, and tradename in the Industrial Controls and Sensors reporting unit within the Industrial segment, and $36.1 million and $8.6 million of non-cash goodwill impairment charges associated with the Industrial Controls and Sensors reporting unit within the Industrial segment and the Automotive Sensors reporting unit within the Transportation segment, respectively. The remaining impairment charges included $0.2 million for patents and customer relationships related to the exit of a small business in China within the Industrial segment. In addition, 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. The Company also recognized total restructuring charges of $14.9 million, primarily for employee termination costs related to the reorganization of certain manufacturing, selling and administrative functions in the semiconductor business within the Electronics segment and the reorganization of certain selling and administrative functions in the commercial vehicle business within the Transportation segment. See Note 8, Restructuring, Impairment and Other Charges, for further discussion. Also included in "Other" Operating income was $5.1 million of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, a gain of $1.0 million for the sale of two buildings within the Transportation segment, and a gain of $0.5 million recorded for the sale of a land use right within the Electronics segment.

Electronics Segment
 
Net Sales

Net sales in the Electronics segment increased $158.7 million, or 13.4%, in 2025 compared to 2024 and included $49.0 million or 4.1% of incremental sales from the Dortmund Fab acquisition in the semiconductor business and favorable changes in foreign exchange rates of $9.7 million or 0.8%. The net sales increase was primarily due to higher volume of $104.5 million from the electronics products business driven by higher end market demand.

Operating Income

Operating income was $220.1 million, representing an increase of $50.2 million, or 29.6%, in 2025 compared to $169.9 million in 2024. The increase in operating income was primarily from the electronics products business due to volume leverage. Operating margins increased from 14.3% in 2024 to 16.4% in 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
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Net sales in the Transportation segment increased $4.0 million, or 0.6%, in 2025 compared to 2024 and included favorable changes in foreign exchange rates of $7.5 million or 1.1%. After factoring in the favorable changes in foreign exchange, net sales decreased by $3.5 million as the lower volume from automotive sensors driven by the strategic exit of certain lower margin products more than offset increases in the passenger car products business driven by solid demand for core passenger car products and favorable price.

Operating Income

Operating income was $84.8 million, representing an increase of $26.2 million, or 44.7%, in 2025 compared to $58.6 million in 2024. The increase in operating income was primarily from the passenger car products business due to favorable price, volume leverage, cost reduction initiatives, along with the 2024 out-of-period adjustment of $11.1 million. Operating margins increased from 8.7% in 2024 to 12.5% in 2025 primarily driven by improved gross margin from the passenger car products business, partially offset by lower gross margin in the automotive sensors business. In addition to the factors impacting operating income discussed above, the 2024 out-of-period adjustment of $11.1 million negatively impacted 2024 operating margins by 1.7%.

Industrial Segment
 
Net Sales

Net sales in the Industrial segment increased by $32.8 million, or 9.9%, in 2025 compared to 2024 and included favorable changes in foreign exchange rates of $0.4 million or 0.1%. The net sales increase was due to higher volume from industrial circuit protection and industrial control and sensor products driven by growth from energy storage, renewables, data center and HVAC end markets and favorable price.

Operating Income

Operating income was $59.0 million, representing an increase of $16.7 million, or 39.5%, in 2025 compared to $42.3 million in 2024. The increase in operating income was driven by higher volume from industrial circuit protection and industrial control and sensor products driven by increased end market demand, favorable price and cost reductions along with the 2024 out-of-period adjustment of $4.1 million. Operating margins increased from 12.8% in 2024 to 16.2% in 2025 primarily due to higher volume, favorable price and cost reductions. In addition to the factors impacting operating income discussed above, the 2024 out-of-period adjustment related to the Industrial segment negatively impacted the 2024 operating margin by 1.2%.

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:
 
  Fiscal Year    
(in millions) 2025 2024 Change % Change
Americas 947.9  $ 900.4  $ 47.6  5.3  %
Asia-Pacific 906.5  824.7  81.8  9.9  %
Europe 531.9  465.7  66.1  14.2  %
Total $ 2,386.3  $ 2,190.8  $ 195.5  8.9  %

Americas
 
Net sales in the Americas increased $47.6 million, or 5.3%, in 2025 compared to 2024. The increase in net sales was primarily due to higher volume from the electronics products business within the Electronics segment and all businesses across the Industrial segment, partially offset by lower volume from the automotive sensors business within the Transportation segment and lower volume from the semiconductor business within the Electronics segment compared to 2024.

Asia-Pacific
 
Asia-Pacific net sales increased $81.8 million, or 9.9%, in 2025 compared to 2024 and included unfavorable changes in foreign exchange rates of $1.3 million. The increase in net sales was primarily due to higher volume from the Electronics segment,
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industrial circuit protection products within the Industrial segment and the passenger car products business within the Transportation segment, partially offset by lower volume from the automotive sensors business within the Transportation segment compared to 2024.
 
Europe
 
Europe net sales increased $66.1 million, or 14.2%, in 2025 compared to 2024 and included $49.0 million or 10.5% of incremental net sales from the Dortmund Fab acquisition in the semiconductor business within the Electronics segment and favorable changes in foreign exchange rates of $18.9 million. After factoring in the favorable changes in exchange rates, net sales decreased due to lower power semiconductor volumes.

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 28, 2024 AS COMPARED TO THE YEAR ENDED DECEMBER 30, 2023

Fiscal year 2024 included $93.5 million of non-cash impairment charges, which included $47.8 million for the impairment of intangible assets primarily related to certain acquired customer relationships, developed technology, and tradename in the Industrial Controls and Sensors reporting unit within the Industrial segment, and $36.1 million and $8.6 million of non-cash goodwill impairment charges associated with the Industrial Controls and Sensors reporting unit within the Industrial segment and the Automotive Sensors reporting unit within the Transportation segment, respectively. The remaining impairment charges included $0.2 million for patents and customer relationships related to the exit of a small business in China within the Industrial segment. In addition, 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. The Company also recognized total restructuring charges of $14.9 million, primarily for employee termination costs related to the reorganization of certain manufacturing, selling and administrative functions in the semiconductor business within the Electronics segment and the reorganization of certain selling and administrative functions in the commercial vehicle business within the Transportation segment. See Note 8, Restructuring, Impairment and Other Charges, for further discussion. Also included in "Other" Operating income was $5.1 million of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, a gain of $1.0 million for the sale of two buildings within the Transportation segment, and a gain of $0.5 million recorded for the sale of a land use right within the Electronics segment.

Fiscal year 2023 included $28.2 million of non-segment charges, of which $11.7 million related to legal and professional fees and other integration expenses related to completed and contemplated acquisitions and $16.5 million of restructuring, impairment and other charges, primarily associated with employee termination costs and a $3.9 million impairment charge for the land and building in the commercial vehicle business within the Transportation segment. See Note 8, Restructuring, Impairment, and Other Charges, for further discussion.

Fiscal year 2024 also included approximately $9.2 million in foreign currency exchange gains primarily attributable to changes in the value of the Euro, Korean won, and Chinese renminbi against the U.S. dollar, while fiscal year 2023 included approximately $12.3 million in foreign currency exchange losses primarily attributable to changes in the value of the Euro, Sterling, and Chinese renminbi against the U.S. dollar.
 
  Fiscal Year    
(in thousands, except % change) 2024 2023 Change % Change
Net sales $ 2,190,768  $ 2,362,657  $ (171,889) (7.3) %
Cost of sales 1,403,226  1,462,416  (59,190) (4.0) %
Gross profit 787,542  900,241  (112,699) (12.5) %
Operating expenses 628,762  539,379  89,383  16.6  %
Operating income 158,780  360,862  (202,082) (56.0) %
Other income, net (22,570) (19,901) 2,669  13.4  %
Income before income taxes 151,863  328,598  (176,735) (53.8) %
Income taxes 51,673  69,113  (17,440) (25.2) %
Net income 100,190  259,485  (159,295) (61.4) %

Net Sales

Net sales were $2,190.8 million, which decreased by $171.9 million, or 7.3% compared to 2023, including $7.9 million of unfavorable changes in foreign exchange rates for 2024 compared to 2023. The net sales decrease was primarily due to lower
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volume of $163.7 million in the Electronics segment, primarily driven by reduced demand and inventory rebalancing in the semiconductor business.

Cost of Sales

Cost of sales was $1,403.2 million, or 64.1% of net sales, in 2024 compared to $1,462.4 million, or 61.9% of net sales, in 2023. As a percent of net sales, cost of sales increased 2.2% driven by lower volume in the Electronics segment, partially offset by improved margin from all businesses within the Transportation segment driven by favorable price, product mix and cost reduction initiatives. In addition, during the year ended December 28, 2024, the Company identified certain errors in its previously issued financial statements that were corrected through cumulative out-of-period adjustments in the financial statements as of and for the year ended December 28, 2024. The error that was identified by management related to the valuation and existence of inventory that originated in prior periods at certain of our non-U.S. manufacturing locations within the Transportation and Industrial segments. As a result, the Company recorded an out-of-period adjustment of $13.5 million in the year ended December 28, 2024, of which $12.3 million was the cumulative out-of-period adjustment related to fiscal years prior to 2024. The out-of-period adjustment negatively impacted cost of sales as percentage of net sales by 0.6%.

Gross Profit
 
Gross profit was $787.5 million, or 35.9% of net sales, in 2024, compared to $900.2 million, or 38.1% of net sales, in 2023. The $112.7 million decrease in gross profit was primarily due to lower volume in the Electronics and Industrial segments, partially offset by improved margin from all businesses within the Transportation segment driven by favorable price, product mix and cost reduction initiatives. As mentioned above, the out-of-period adjustments of $13.5 million negatively impacted gross margin by 0.6%.

Operating Expenses
 
Total operating expenses were $628.8 million, or 28.7% of net sales, for 2024 compared to $539.4 million, or 22.8% of net sales, for 2023. The increase in operating expenses of $89.4 million was primarily due to an increase in restructuring, impairment, and other charges of $91.9 million, which included a non-cash impairment charge of $47.8 million for the impairment of intangible assets primarily related to certain acquired customer relationships, developed technology, and tradename in the Industrial controls and sensors reporting unit within the Industrial segment, and $36.1 million and $8.6 million of non-cash goodwill impairment charges associated with the Industrial controls and sensors reporting unit within the Industrial segment and the Automotive sensors reporting unit within the Transportation segment, respectively. Additionally, the Company incurred higher research and development expenses of $5.3 million. These increases in operating expenses were partially offset by lower selling, general, and administrative expenses of $4.2 million as a result of lower legal and professional fees and other integration expenses related to completed and contemplated acquisitions and lower amortization expense of $3.7 million.
 
Operating Income
 
Operating income for 2024 was $158.8 million , a decrease of $202.1 million or 56.0% compared to $360.9 million for 2023. The decrease in operating income was due to lower operating income of $130.7 million from the Electronics segment and higher operating expenses due to the non-cash charge of $92.6 million from the impairment of intangible assets and goodwill as noted above, partially offset by higher operating income of $24.9 million from the Transportation segment. Operating margins decreased from 15.3% in 2023 to 7.2% in 2024 primarily driven by low er volume in the Electronics segment and the higher operating expenses mentioned ab ove. The total non-cash charges of $92.6 million from the impairment of intangible assets and goodwill negatively impacted the 2024 operating margin by 4.2%.

Income Before Income Taxes
 
Income before income taxes for 2024 was $151.9 million, or 6.9% of net sales compared to $328.6 million, or 13.9% of net sales for 2023. In addition to the factors impacting comparative results for operating income discussed above, income before income taxes was primarily benefited by foreign exchange gains of $9.2 million in the fiscal year 2024 compared to foreign exchange losses of $12.3 million in the fiscal year 2023, and higher interest income of $9.0 million from short-term investments in cash equivalents, partially offset by higher coal mine charges of $1.8 million and non-operating pension expense.

Income Taxes
 
Income tax expense for 2024 was $51.7 million, or an effective tax rate of 34.0%, compared to income tax expense of $69.1 million, or an effective tax rate of 21.0% for 2023. The effective tax rate for 2024 is higher than the effective tax rate for 2023,
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primarily due to t he impact of goodwill impairments and non-US losses with no related tax benefit. The effective tax rate for 2024 is higher than the statutory tax rate primarily due to the impact of goodwill impairments and non-US losses with no related tax benefit as previously noted. Further information regarding these items is provided in Note 14, Income Taxes , of the Notes to Consolidated Financial Statements included in this Annual Report.

Segment Information
 
The Company reports its operations by the following segments: Electronics, Transportation and Industrial. Segment information is described more fully in Note 16, Segment Information , of the Notes to Consolidated Financial Statements included in this Annual Report.
 
The following table is a summary of the Company’s net sales and operating income by segment:
 
Net Sales Fiscal Year    
(in millions) 2024 2023 Change % Change
Electronics $ 1,186.8  $ 1,350.4  $ (163.7) (12.1) %
Transportation
672.4  678.3  (5.9) (0.9) %
Industrial 331.6  334.0  (2.4) (0.7) %
Total $ 2,190.8  $ 2,362.7  $ (171.9) (7.3) %

Segment Operating Income Fiscal Year    
(in millions) 2024 2023 Change % Change
Electronics $ 169.9  $ 300.6  $ (130.7) (43.5) %
Transportation
58.6  33.7  24.9  73.9  %
Industrial 42.3  54.8  (12.5) (22.8) %
Total segment operating income 270.8  389.1  (118.3)
Other (a) (112.0) (28.2) (83.8)
Total Operating income $ 158.8  $ 360.9  $ (202.1) (56.0) %
 
(a) Included in “Other” Operating income for the 2024 was $93.5 million of non-cash impairment charges, which included $47.8 million for the impairment of intangible assets primarily related to certain acquired customer relationships, developed technology, and tradename in the Industrial controls and sensors reporting unit within the Industrial segment, and $36.1 million and $8.6 million of non-cash goodwill impairment charges associated with the Industrial controls and sensors reporting unit within the Industrial segment and the Automotive sensors reporting unit within the Transportation segment, respectively. The remaining impairment charges included $0.2 million for patents and customer relationships related to the exit of a small business in China within the Industrial segment. In addition, 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. The Company also recognized total restructuring charges of $14.9 million, primarily for employee termination costs related to the reorganization of certain manufacturing, selling and administrative functions in the semiconductor business within the Electronics segment and the reorganization of certain selling and administrative functions in the commercial vehicle business within the Transportation segment. See Note 8, Restructuring, Impairment and Other Charges, for further discussion. Also included in "Other" Operating income was $5.1 million of legal and professional fees and other integration expenses related to completed and contemplated acquisitions, a gain of $1.0 million for the sale of two buildings within the Transportation segment, and a gain of $0.5 million recorded for the sale of a land use right within the Electronics segment.

Included in “Other” Operating income for the 2023 was $28.2 million of non-segment charges, of which $11.7 million was for legal and professional fees and other integration expenses related to completed and contemplated acquisitions, $16.5 million of restructuring, impairment and other charges, primarily related to employee termination costs and a $3.9 million impairment charge related to the land and building in the commercial vehicle business within the Transportation segment. See Note 8, R estructuring, Impairment and Other Charges , for further discussion.

Electronics Segment
 
Net Sales

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Net sales for the Electronics segment decreased $163.7 million, or 12.1%, in 2024 compared to 2023 and included unfavorable changes in foreign exchange rates of $4.3 million or 0.3%. The net sales decrease was mainly due to lower volume from the semiconductor business of $152.0 million and to a lesser extent the electronics products business driven by inventory rebalancing at certain distributors and reduced demand across certain electronics markets, including consumer facing and personal electronics, as well as industrial markets.

Operating Income

Operating income was $169.9 million, representing a decrease of $130.7 million, or 43.5%, in 2024 compared to $300.6 million in 2023. The decrease in operating income was primarily due to lower volume leverage and unfavorable product mix that were partially offset by cost control initiatives. Operating margins decreased from 22.3% in 2023 to 14.3% in 2024 primarily due to the lower volume from the semiconductor business.

Transportation Segment
 
Net Sales

Net sales in the Transportation segment decreased $5.9 million, or 0.9%, in 2024 compared to 2023 and included unfavorable changes in foreign exchange rates of $2.4 million or 0.4%. The sales decrease was mainly driven by lower volume of $15.0 million and $3.2 million from the automotive sensors and the commercial vehicles businesses, respectively, due to the strategic exit of certain lower margin products and reduced demand largely due to inventory rebalancing at certain distributors and customers, partially offset by a sales increase of $12.3 million from the passenger car business driven by the ongoing electronification and electrification of vehicles and vehicle content growth.

Operating Income

Operating income was $58.6 million, representing an increase of $24.9 million, or 73.9%, in 2024 compared to $33.7 million in 2023. The increase in operating income was primarily due to favorable price and cost reduction initiatives from the commercial vehicle business. Operating margins increased from 5.0% to 8.7% primarily driven by favorable price and product mix and cost reduction initiatives from the commercial vehicle business. In addition, as mentioned above, during the year ended December 28, 2024, the Company identified certain errors in its previously issued financial statements that were corrected through cumulative out-of-period adjustments in the financial statements as of and for the year ended December 28, 2024. The out-of-period adjustment related to the Transportation segment was $11.1 million, which negatively impacted operating margin by 1.7%.

Industrial Segment
 
Net Sales

The Industrial segment net sales decreased by $2.4 million, or 0.7%, in 2024 compared to 2023 and included unfavorable changes in foreign exchange rates of $1.2 million or 0.4%. The sales decrease was due to lower volume across industrial control products driven by softer end market demand in the first half of 2024.

Operating Income

Operating income was $42.3 million, representing a decrease of $12.5 million, or 22.8%, in 2024 compared to $54.8 million in 2023. The decrease in operating income was driven by lower volume due to reduced industrial end market demand across industrial control products and industrial circuit protection along with cost inflation. Operating margins were 12.8% in 2024 compared to 16.4% in 2023. The decrease in operating margin was due to cost inflation, partially offset by favorable price. In addition, as mentioned above, during the year ended December 28, 2024, the Company identified certain errors in its previously issued financial statements that were corrected through cumulative out-of-period adjustments in the financial statements as of and for the year ended December 28, 2024. The out-of-period adjustment related to the Industrial segment was $4.1 million, which negatively impacted operating margin by 1.2%.

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:
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  Fiscal Year    
(in millions) 2024 2023 Change % Change
Americas $ 900.4  $ 901.5  $ (1.1) (0.1) %
Asia-Pacific 824.7  898.9  (74.2) (8.3) %
Europe 465.7  562.3  (96.6) (17.2) %
Total $ 2,190.8  $ 2,362.7  $ (171.9) (7.3) %

Americas
 
Net sales in the Americas decreased $1.1 million, or 0.1%, in 2024 compared to 2023 and included unfavorable changes in foreign exchange rates of $0.7 million. The decrease in net sales was primarily due to lower volume from the semiconductor business within the Electronics segment, partially offset by higher volume from the Industrial segment and the commercial vehicle and passenger car products businesses within the Transportation segment compared to 2023.

Asia-Pacific
 
Asia-Pacific net sales decreased $74.2 million, or 8.3%, in 2024 compared to 2023 and included unfavorable changes in foreign exchange rates of $9.2 million. The decrease in net sales was primarily due to lower net sales from the semiconductor business within the Electronics segment and the industrial circuit protection business within the Industrial segment, partially offset by higher net sales from the passenger car products business within the Transportation segment compared to 2023.
 
Europe
 
Europe net sales decreased $96.6 million, or 17.2%, in 2024 compared to 2023 and included favorable changes in foreign exchange rates of $2.0 million. The decrease in net sales was primarily due to lower net sales from the Electronics segment and lower net sales from the commercial vehicle and automotive sensors businesses within the Transportation segment compared to 2023.

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Liquidity and Capital Resources
 
Cash and cash equivalents were $563.4 million as of December 27, 2025, a decrease of $161.5 million as compared to December 28, 2024.
 
As of December 27, 2025, $419.1 million of the Company's $563.4 million cash and cash equivalents was held by non-U.S. subsidiaries. Of the $419.1 million, at least $230.4 million can be repatriated with minimal tax consequences, although in certain cases a non-U.S. withholding tax would be payable but subsequently refunded. With respect to the remaining $188.7 million, the Company has recognized deferred tax liabilities on approximately $114.4 million as of December 27, 2025 because the amounts are not considered to be permanently reinvested, and the Company may access additional amounts through loans and other means. Repatriation of some non-U.S. cash balances is restricted by local laws. Management regularly evaluates whether foreign earnings are expected to be permanently reinvested. This evaluation requires judgment about the future operating and liquidity needs of the Company and its foreign subsidiaries. Changes in economic and business conditions and tax laws could result in changes to these judgments and the need to record additional tax liabilities.

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.
 
Revolving Credit Facility and Term Loan

On June 30, 2022, the Company amended and restated its Credit Agreement, dated as of April 3, 2020 (as so amended and restated, 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 fiscal year ended December 27, 2025, the Company made term loan payments of $15.0 million. The revolving loan and term loan balance under the Credit Facility was $100.0 million and $266.3 million, respectively, as of December 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 December 27, 2025, the effective interest rate on unhedged portion of the outstanding borrowings under the Credit Facility was 4.82%, and 3.88% on the hedged portion.
 
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As of December 27, 2025, the Company had $1.1 million outstanding letters of credit and had available $598.9 million of borrowing capacity under the revolving credit facility. As of December 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 2023. Interest on the Euro Senior Notes, Series B 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”) (together, the “U.S. Senior Notes due 2022 and 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 2022. Interest on the U.S. Senior Notes, Series B 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 2025. Interest on the U.S. Senior Notes Series B due 2030 is payable 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 amended and 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, 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 December 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.

Debt Covenants
The Company was in compliance with its debt covenants as of December 27, 2025. As of December 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 11, 2025, the Company completed the acquisition of Basler. 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. At the time of acquisition, Basler had annualized sales of approximately $130 million. The business is reported within the Company’s Industrial segment. The total purchase consideration was $350.3 million, net of cash acquired, subject to a working capital adjustment. The acquisition was funded with the Company's 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 Dortmund Fab will increase power semiconductor capacity to support opportunities across a broad base of industrial end markets including energy storage, automation, motor drives, renewables, power supplies, and charging infrastructure. 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 the Company’s cash on hand.

On February 3, 2023, the Company completed the acquisition of Western Automation for approximately $162 million in cash. Headquartered in Galway, Ireland, Western Automation is a designer and manufacturer of electrical shock protection devices used across a broad range of high-growth end markets, including electric vehicle charging infrastructure, industrial safety and renewables. At the time the Company and Western Automation entered into the definitive agreement, Western Automation had annualized sales of approximately $25 million. The business is reported within the Company’s Industrial segment. The Company financed the transaction with cash on hand.

Cash Flow Overview
 
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.
 
The following describes the Company’s cash flows for the fiscal year ended December 27, 2025 and December 28, 2024:

  Fiscal Year
(in millions) 2025 2024
Net cash provided by operating activities $ 433.8  $ 367.6 
Net cash used in investing activities (468.9) (65.8)
Net cash used in financing activities (149.3) (112.4)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash 23.0  (20.1)
(Decrease) increase in cash, cash equivalents, and restricted cash (161.3) 169.3 
Cash, cash equivalents, and restricted cash at beginning of period 726.4  557.1 
Cash, cash equivalents, and restricted cash at end of period $ 565.1  $ 726.4 

 
Cash Flow from Operating Activities

Net cash provided by operating activities was $433.8 million in the fiscal year 2025, an increase of $66.1 million, compared to $367.6 million in the fiscal year 2024. The increase in net cash provided by operating activities was primarily due to higher cash earnings.

Cash Flow from Investing Activities
 
Net cash used in investing activities was $468.9 million in the fiscal year 2025, compared to $65.8 million in the fiscal year 2024. Net cash paid for acquisitions was $407.7 million for the Basler and Dortmund Fab acquisitions in the fiscal year 2025. Capital expenditures were $67.6 million, representing a decrease of $8.2 million compared to the fiscal year 2024. The Company also received proceeds of $5.6 million mainly from the sale of the Marine business within the Transportation segment in the fiscal year 2025 as compared to proceeds of $10.8 million from the sale of a land use right within the Electronics segment and two buildings from the Transportation segment in the fiscal year 2024.

 
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Cash Flow from Financing Activities
 
Net cash used in financing activities was $149.3 million in the fiscal year 2025 compared to $112.4 million in the fiscal year 2024. During the fiscal year 2025, the Company paid $50 million of U.S. Senior Notes, Series A, due February 15, 2025 and $15.0 million on the term loan under the Credit Facility. During the fiscal year 2024, the Company paid $7.5 million on the term loan. The Company paid dividends of $72.0 million, an increase of $4.9 million, in the fiscal year 2025 compared to $67.1 million in the fiscal year 2024. In addition, the Company repurchased 120,689 shares and 179,311 shares of its common stock totaling $27.4 million and $40.9 million during the fiscal year 2025 and 2024, respectively. The Company paid a $0.2 million excise tax related to the share repurchases during the fiscal year 2025. Additionally, the Company received $22.6 million of net proceeds from stock option exercises and restricted stock units vesting activities during the fiscal year 2025 compared to $5.7 million in the fiscal year 2024.

The following describes the Company’s cash flows for the fiscal year ended December 28, 2024 and December 30, 2023:

  Fiscal Year
(in millions) 2024 2023
Net cash provided by operating activities $ 367.6  $ 457.4 
Net cash used in investing activities (65.8) (284.3)
Net cash used in financing activities (112.4) (185.7)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash (20.1) 4.8 
Increase (decrease) in cash, cash equivalents, and restricted cash 169.3  (7.8)
Cash, cash equivalents, and restricted cash at beginning of period 557.1  564.9 
Cash, cash equivalents, and restricted cash at end of period $ 726.4  $ 557.1 

 
Cash Flow from Operating Activities

Net cash provided by operating activities was $367.6 million for the fiscal year 2024, a decrease of $89.8 million, compared to $457.4 million during the fiscal year 2023. The decrease in net cash provided by operating activities was primarily due to lower cash earnings.

Cash Flow from Investing Activities
 
Net cash used in investing activities was $65.8 million for the fiscal year 2024, compared to $284.3 million during the fiscal year 2023. Net cash paid for acquisitions was $198.8 million for the Western Automation and Dortmund Fab acquisitions during the fiscal year 2023. Capital expenditures were $75.9 million, representing a decrease of $10.3 million compared to the fiscal year 2023. The Company also received proceeds of $10.8 million mainly from the sale of a land use right within the Electronics segment and two buildings from the Transportation segment during the fiscal year 2024 as compared to proceeds of $0.8 million from the sale of a property within the Electronics segment during the fiscal year 2023.
 
Cash Flow from Financing Activities
 
Net cash used in financing activities was $112.4 million for the fiscal year 2024 compared to $185.7 million during the fiscal year 2023. During the fiscal year 2024, the Company paid $7.5 million on the term loan. During the fiscal year 2023, the Company paid $121.3 million (€117 million) of Euro Senior Notes, Series A due 2023 and $7.5 million on the term loan. The Company paid dividends of $67.1 million and $62.2 million for the fiscal year 2024 and 2023, respectively, representing an increase of $4.9 million from the fiscal year 2023. Additionally, the Company repurchased 179,311 shares of its common stock totaling $40.9 million during the fiscal year 2024.

Contractual Obligations and Commitments
 
The following table summarizes outstanding contractual obligations and commitments as of December 27, 2025:
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Payments Due by Period
(in thousands) Total Less than
1 Year 1 to 3
 Years 3 to 5
 Years Greater
than
 5 Years
Total debt (a)
$ 804,460  $ 96,233  $ 483,227  $ 125,000  $ 100,000 
Interest payments (b)
86,960  32,270  32,447  15,748  6,495 
Operating and finance lease payments (c)
102,348  15,376  28,263  23,618  35,091 
Purchase obligations (d)
16,574  14,692  1,882  —  — 
Total $ 1,010,342  $ 158,571  $ 545,819  $ 164,366  $ 141,586 

 
(a) Excludes offsetting issuance costs of $1.8 million. Euro denominated debt amounts are converted based on the Euro to U.S. Dollar spot rate at year end. For more information see Note 9, Debt, of the Notes to Consolidated Financial Statements.

(b) Amounts represent estimated contractual interest payments on outstanding debt. Rates in effect as of December 27, 2025 are used for variable rate debt. For more information see Note 9, Debt, of the Notes to Consolidated Financial Statements.

(c) For more information see Note 7, Lease Commitments, of the Notes to Consolidated Financial Statements.

(d) Purchase obligations include purchase commitments and commitments for capital expenditures not recognized in the Company’s Consolidated Balance Sheets.

In addition to the above contractual obligations and commitments, the Company had the following obligations at December 27, 2025: 

The Company has Company-sponsored defined benefit pension plans covering employees at various non-U.S. subsidiaries including the U.K., Germany, the Philippines, China, Japan, Mexico, Italy, and France. At December 27, 2025, the Company had a net unfunded status of $40.2 million. The Company expects to make approximately $1.5 million of contributions to the plans and pay $2.3 million of benefits directly in 2026. For additional information, see Note 11, Benefit Plans , of the Notes to Consolidated Financial Statements.
 
Dividends

Cash dividends paid totaled $72.0 million, $67.1 million and $62.2 million for 2025, 2024 and 2023, respectively. On January 28, 2026, the Board of Directors of the Company declared a quarterly cash dividend of $0.75 per share, payable on March 5, 2026 to stockholders of record as of February 19, 2026.

Capital Resources

The Company expends capital to support its operating and strategic plans. Such expenditures include strategic acquisitions, investments to maintain capital assets, develop new products or improve existing products, and to enhance capacity or productivity. Many of the associated projects have long lead-times and require commitments in advance of actual spending.

Share Repurchase Program

The Company's Board of Directors authorized the repurchase of up to $300 million in the aggregate of shares of the Company’s common stock for the period May 1, 2021 to April 30, 2024 ("2021 program"). On April 25, 2024, the Company's Board of Directors authorized a new three-year program to repurchase up to $300.0 million in the aggregate of shares of the Company's stock for the period May 1, 2024 to April 30, 2027 ("2024 program") to replace the expired 2021 program.

During the fiscal year of 2025, the Company repurchased 120,689 shares of its common stock totaling $27.4 million pursuant to the 2024 program. There is $270.6 million of an authorized amount not yet purchased under the 2024 program as of December 27, 2025. During the fiscal year of 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. During the fiscal year of 2023, the Company did not repurchase any shares of its common stock.
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Off-Balance Sheet Arrangements
 
As of December 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.

Recent Accounting Pronouncements
 
Recently issued accounting standards and their estimated effect on the Company’s Consolidated Financial Statements are described in Note 1, Summary of Significant Accounting Policies and Other Information , of the Notes to Consolidated Financial Statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 
The Company is exposed to market risk from changes in interest rates, foreign exchange rates and commodity prices.
 
Interest Rate Risk

On June 30, 2022, the Company amended and restated its Credit Agreement, dated as of April 3, 2020 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.

The revolving loan and term loan balance under the Credit Facility was $100.0 million and $266.3 million, respectively, as of December 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. The cash flow hedge reduces the Company exposure to future interest rate fluctuation. After consideration of the hedge above, the remaining borrowings of $166.3 million, which represents approximately 21% of the Company's total debt, is subject to future interest rate fluctuations which could potentially have a negative impact on the Company's cash flows. A prospective increase of 100 basis points in the interest rate applicable to the Company’s outstanding borrowings under its credit facility would result in an increase of approximately $1.7 million in annual interest expense. This exposure would be partially if not fully offset by higher interest income from the Company's investments.

Foreign Exchange Rate Risk
 
The majority of the Company’s operations consist of manufacturing and sales activities in foreign countries. The Company has operations in China, France, Germany, India, Ireland, Mexico, Philippines, U.K., Japan, Lithuania, Netherlands, Portugal, Singapore, South Korea, Spain, U.S., and Vietnam. During 2025, sales to customers outside the U.S. were approximately 65% of total net sales. During 2024, sales to customers outside the U.S. were approximately 63% of total net sales. Substantially all sales in Europe are denominated in euros and substantially all sales in the Asia-Pacific region are denominated in U.S. dollars, Chinese renminbi, Japanese yen, or Korean won.
 
The Company’s foreign exchange exposures result primarily from intercompany loans, external borrowings, sale of products in foreign currencies, foreign currency denominated purchases, employee-related, and other costs of running operations in foreign countries. The Company’s most significant foreign currency exposures are to the euro, Chinese renminbi, Mexican peso, and Philippine peso. Changes in foreign exchange rates could affect the Company’s sales, costs, balance sheet values, and earnings. 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.
 
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At December 27, 2025, the net value of the Company’s assets with exposure to foreign currency risk was approximately $19.2 million, with the largest exposure being a Japanese Yen denominated intercompany loan with a U.S. Dollars functional currency subsidiary. The reduction in earnings from a hypothetical instantaneous 10% adverse change in quoted foreign currency spot rates applied to foreign currency sensitive asset instruments would be $1.9 million at December 27, 2025. At December 27, 2025, the net value of the Company’s liabilities with exposure to foreign currency risk was $13.2 million, with the largest exposure being U.S. Dollar denominated intercompany loans with Sterling and Mexican Peso functional currency subsidiaries. The reduction in earnings from a hypothetical instantaneous 10% adverse change in quoted foreign currency spot rates applied to foreign currency sensitive liability instruments would be $1.3 million at December 27, 2025. As a result of the mix in currencies impacting the hypothetical 10% changes, the movements in some instruments would offset movements in other instruments reducing the hypothetical exposure to the Company.
 
Commodity Price Risk
 
The Company uses various metals in the manufacturing of its products, including copper, zinc, tin, gold, silver, and ruthenium. Worldwide demand, availability, and pricing of these raw materials have been volatile. In recent years, the prices of many of these raw materials continue to fluctuate, and in many cases increase, and fluctuations may persist in the future. The increase in prices of these and other commodities can rise and result in materially higher costs of producing our products. The Company believes it has adequate primary and secondary sources of supply for each of our key materials. While the Company is exposed to significant changes in certain metal prices and expects higher material costs, the Company actively monitors these exposures, has taken and may take various actions in the future, including price increases and productivity improvements to mitigate any negative impacts of these exposures.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 
Index Page
   
Report of Independent Registered Public Accounting Firm – Consolidated Financial Statements (PCAOB ID Number 34 and PCAOB ID Number 248 )
46

Report of Independent Registered Public Accounting Firm – Internal Control Over Financial Reporting
49

Consolidated Financial Statements

  Consolidated Balance Sheets
50

  Consolidated Statements of Net (Loss) Income
51

  Consolidated Statements of Comprehensive Income
52

  Consolidated Statements of Cash Flows
53

  Consolidated Statements of Equity
54

Notes to Consolidated Financial Statements

  1. Summary of Significant Accounting Policies and Other Information
55

  2. Acquisitions
65

  3. Inventories
68

4. Property, Plant, and Equipment, net
68

  5. Goodwill and Other Intangible Assets
69

  6. Accrued Liabilities
71

  7. Lease Commitments
71

  8. Restructuring, Impairment , and Other Charges
73

  9. Debt
75

  10. Fair Value of Assets and Liabilities
77

  11. Benefit Plans
82

  12. Stock-Based Compensation
88

  13. Other Comprehensive Income (Loss)
90

  14. Income Taxes
92

15. (Loss) Earnings Per Share
97

16. Segment Information
97

17. Commitments and Contingencies
102

18. Related Party Transactions
103

 

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Report of Independent Registered Public Accounting Firm
 
Board of Directors and Shareholders  
Littelfuse, Inc.

Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of Littelfuse, Inc. and subsidiaries (the “Company”) as of December 27, 2025 and December 28, 2024, the related consolidated statements of net (loss) income, comprehensive income, equity, and cash flows, for the periods ended December 27, 2025 and December 28, 2024, and the related notes and financial statement schedule included under Item 15(a) (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 27, 2025 and December 28, 2024, and the results of its operations and its cash flows for the periods ended December 27, 2025 and December 28, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 27, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 19, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical audit matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill and Other Intangible Assets– Refer to Notes 1 and 5 to the financial statements

Critical Audit Matter Description
The Company’s evaluation of goodwill for impairment involves the comparison of the estimated fair value of each reporting unit to its carrying value. The Company engages a third-party appraisal firm to assist in the Company’s determination of the estimated fair values for each reporting unit. This determination includes estimating the fair value of each reporting unit using both the income and market approaches. The income approach requires management to estimate a number of factors for each reporting unit, including projected operating results, economic projections, anticipated future cash flows, discount rates and the allocation of shared or corporate items. The market approach estimates fair values using comparable marketplace fair value data from within a comparable industry grouping.

We identified the valuation of goodwill within the Electronics-Semiconductor and Industrial Controls and Sensors reporting units (“reporting units”) as a critical audit matter because of the reporting units’ historical and current year performance as compared to projections and because of the significant judgments made by management to estimate the respective fair values. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when auditing management’s judgments related to forecasts of revenue and earnings before interest, taxes, depreciation, and amortization (“EBITDA”), in addition to the selection of the discount rate in estimating the fair value of the reporting units.

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How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s forecasts of revenue and EBITDA, and the selection of the discount rate used by management to estimate the fair value of the reporting units, included the following, among others:

• We tested the design and operating effectiveness of controls over the annual goodwill impairment assessment, including those over the preparation of the revenue and EBITDA forecasts, and the selection of the discount rate to estimate the fair value of the reporting units.
• We evaluated management’s ability to accurately forecast revenue and EBITDA (“forecasts”) by comparing actual results to management’s historical forecasts.
• We evaluated the reasonableness of management’s forecasts by comparing the forecasts to:
◦ Internal communications to management and the Board of Directors.
◦ Historical results, third-party economic research, industry performance, and peer company performance.
◦ Actual results from the September 28, 2025, annual measurement date to December 27, 2025.
• We performed sensitivity analyses to evaluate changes to the impairment test if key assumptions are changed.
• With the assistance of our fair value specialists, for the goodwill impairment assessments we evaluated the reasonableness of the (1) valuation methodology, and (2) discount rate, by:
◦ Evaluating whether the fair value model being used is appropriate considering the Company’s circumstances and valuation premise identified.
◦ Developing a range of independent estimates and comparing those to the discount rate selected by management.
◦ Testing the underlying source information and mathematical accuracy of the calculations.

/ s/ Deloitte & Touche LLP  

Chicago, Illinois
February 19, 2026

We have served as the Company's auditor since 2024.

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Report of Independent Registered Public Accounting Firm
 
Board of Directors and Shareholders  
Littelfuse, Inc.
 
Opinion on the financial statements

We have audited the accompanying consolidated balance sheet of Littelfuse, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 30, 2023 (not presented herein), the related consolidated statements of net income, comprehensive income, equity, and cash flows for the year then ended, and the related notes and financial statement schedule included under Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 30, 2023, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ GRANT THORNTON LLP
 
We have served as the Company’s auditor from 2014 to 2023.
 
Southfield, Michigan
February 16, 2024 (except for Note 16, as to which the date is March 13, 2025)
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Report of Independent Registered Public Accounting Firm
 
Board of Directors and Shareholders
Littelfuse, Inc.  
 
Opinion on internal control over financial reporting

We have audited the internal control over financial reporting of Littelfuse, Inc. and subsidiaries (the “Company”) as of December 27, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 27, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 27, 2025, of the Company and our report dated February 19, 2026, expressed an unqualified opinion on those consolidated financial statements.

On December 11, 2025, the Company completed the acquisition of Basler, as discussed in Note 2 – Acquisitions. Management has excluded Basler’s internal controls over financial reporting from its assessment of the effectiveness of internal controls over financial reporting as of December 27, 2025. Basler’s net sales and total assets represent approximately 0.2% and 9%, respectively, of the consolidated financial statement amounts as of and for the fiscal year ended, December 27, 2025.

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and limitations of internal control over financial reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP
Chicago, Illinois
February 19, 2026
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LITTELFUSE, INC.
CONSOLIDATED BALANCE SHEETS
 
(in thousands, except share and per share data) December 27, 2025 December 28, 2024
ASSETS    
Current assets:    
Cash and cash equivalents (Note 1) $ 563,391   $ 724,924  
Short-term investments 287   976  
Trade receivables, less allowances of $ 77,073 and $ 69,990 , respectively
363,215   294,371  
Inventories (Note 3) 416,472   416,273  
Prepaid income taxes and income taxes receivable 6,137   11,749  
Prepaid expenses and other current assets 85,832   103,716  
Total current assets 1,435,334   1,552,009  

Net property, plant, and equipment (Note 4) 540,640   477,068  
Intangible assets, net of amortization (Note 5) 594,907   482,118  
Goodwill (Note 5) 1,211,411   1,228,502  
Investments (Note 1) 20,010   23,245  
Deferred income taxes (Note 14) 5,255   4,899  
Right of use lease assets (Note 7) 86,263   72,211  
Other long-term assets 62,976   51,727  
Total assets $ 3,956,796   $ 3,891,779  
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 211,079   $ 188,359  

Accrued liabilities (Note 6) 199,271   148,276  
Accrued income taxes 26,186   29,658  
Current portion of long-term debt (Note 9) 96,233   67,612  
Total current liabilities 532,769   433,905  
Long-term debt, less current portion (Note 9) 706,394   788,502  
Deferred income taxes (Note 14) 102,335   95,532  
Accrued post-retirement benefits (Note 11) 38,733   29,836  
Non-current lease liabilities (Note 7) 71,765   60,559  
Other long-term liabilities 78,766   69,833  
Total liabilities 1,530,762   1,478,167  
Commitments and contingencies (Note 17)
Shareholders’ equity:
Common stock, par value $ 0.01 per share: 34,000,000 shares authorized; shares issued, 27,014,490 and 26,758,730 , respectively
264   262  
Additional paid-in capital 1,098,150   1,049,079  
Treasury stock, at cost: 2,088,409 and 1,937,380 shares, respectively
( 338,696 ) ( 305,351 )
Accumulated other comprehensive loss ( 5,383 ) ( 146,361 )
Retained earnings 1,671,699   1,815,628  
Littelfuse, Inc. shareholders’ equity 2,426,034   2,413,257  
Non-controlling interest —   355  
Total equity 2,426,034   2,413,612  
Total liabilities and equity $ 3,956,796   $ 3,891,779  

 
See accompanying Notes to Consolidated Financial Statements.
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LITTELFUSE, INC.
CONSOLIDATED STATEMENTS OF NET (LOSS) INCOME
 
  Fiscal Year Ended
(in thousands, except per share data) December 27, 2025 December 28, 2024 December 30, 2023
Net sales $ 2,386,294   $ 2,190,768   $ 2,362,657  
Cost of sales 1,480,251   1,403,226   1,462,416  
Gross profit 906,043   787,542   900,241  

Selling, general, and administrative expenses 381,773   350,421   354,655  

Research and development expenses 106,899   107,773   102,429  
Amortization of intangibles 59,793   62,127   65,794  
Restructuring, impairment, and other charges 320,050   108,441   16,501  
Total operating expenses 868,515   628,762   539,379  
Operating income 37,528   158,780   360,862  

Interest expense 34,303   38,717   39,866  
Foreign exchange loss (gain) 16,612   ( 9,230 ) 12,299  
Other income, net ( 16,994 ) ( 22,570 ) ( 19,901 )
Income before income taxes 3,607   151,863   328,598  
Income taxes 75,307   51,673   69,113  
Net (loss) income $ ( 71,700 ) $ 100,190   $ 259,485  

(Loss) income per share:
Basic $ ( 2.89 ) $ 4.04   $ 10.44  
Diluted $ ( 2.89 ) $ 4.00   $ 10.34  

Weighted average shares and equivalent shares outstanding:
Basic 24,817   24,821   24,854  
Diluted 24,817   25,039   25,102  

 
See accompanying Notes to Consolidated Financial Statements.

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LITTELFUSE, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 
  Year Ended
(in thousands) December 27, 2025 December 28, 2024 December 30, 2023
Net (loss) income $ ( 71,700 ) $ 100,190   $ 259,485  
Other comprehensive (loss) income:

Pension and postemployment adjustments, net of tax ( 2,178 ) ( 2,896 ) ( 5,420 )
Cash flow hedges, net of tax 6,831   ( 3,147 ) ( 2,148 )
Foreign currency translation adjustments, net of tax 136,325   ( 84,501 ) 47,515  
Comprehensive income $ 69,278   $ 9,646   $ 299,432  

 
See accompanying Notes to Consolidated Financial Statements.

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LITTELFUSE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
  Fiscal Year Ended
(in thousands) December 27, 2025 December 28, 2024 December 30, 2023
OPERATING ACTIVITIES      
Net (loss) income $ ( 71,700 ) $ 100,190   $ 259,485  
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation 74,871   68,325   71,634  
Amortization of intangibles 59,793   62,127   65,794  

Impairment charges 302,052   93,515   4,853  

Deferred revenue 2,399   ( 2,028 ) 1,787  

Stock-based compensation 27,301   26,012   23,898  
Loss (gain) on investments and other assets 3,639   ( 112 ) 291  
Deferred income taxes 3,339   ( 2,823 ) 46  

Other 5,186   ( 7,873 ) 5,473  
Changes in operating assets and liabilities:
Trade receivables ( 36,401 ) ( 15,347 ) 24,517  
Inventories 40,181   47,143   82,471  
Accounts payable 11,342   16,260   ( 36,277 )

Accrued liabilities and income taxes 4,095   ( 34,560 ) ( 61,022 )
Prepaid expenses and other assets 7,667   16,792   14,437  
Net cash provided by operating activities 433,764   367,621   457,387  
INVESTING ACTIVITIES
Acquisitions of businesses, net of cash acquired ( 407,718 ) —   ( 198,810 )

Purchases of property, plant, and equipment ( 67,637 ) ( 75,877 ) ( 86,188 )
Net proceeds from sale of property, plant, equipment, and other 5,806   10,836   832  
Other 689   ( 741 ) ( 151 )
Net cash used in investing activities ( 468,860 ) ( 65,782 ) ( 284,317 )
FINANCING ACTIVITIES

Payments of senior notes payable ( 50,000 ) —   ( 121,302 )

Repayments of other debts ( 2,829 ) ( 2,707 ) ( 2,697 )
Payments of term loan ( 15,000 ) ( 7,500 ) ( 7,500 )
Net proceeds related to stock-based award activities 22,630   5,694   7,934  

Cash dividends paid ( 71,991 ) ( 67,061 ) ( 62,161 )

Purchases of common stock ( 27,553 ) ( 40,862 ) —  
Other ( 4,530 ) —   —  

Net cash used in financing activities ( 149,273 ) ( 112,436 ) ( 185,726 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash 23,036   ( 20,089 ) 4,840  
(Decrease) increase in cash, cash equivalents, and restricted cash ( 161,333 ) 169,314   ( 7,816 )
Cash, cash equivalents, and restricted cash at beginning of period 726,437   557,123   $ 564,939  
Cash, cash equivalents, and restricted cash at end of period $ 565,104   $ 726,437   $ 557,123  
Supplementary Cash Flow Information
Reconciliation of cash and cash equivalents:
Cash and cash equivalents $ 563,391   $ 724,924   $ 555,513  

Restricted cash included in other long-term assets 1,713   1,513   1,610  
Cash paid during the period for interest 34,361   36,207   37,167  
Cash paid during the period for income taxes, net of refunds 81,601   83,765   73,932  
Capital expenditures, not yet paid 9,340   11,727   9,191  

See accompanying Notes to Consolidated Financial Statements.
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LITTELFUSE, INC.
CONSOLIDATED STATEMENTS OF EQUITY
 
  Littelfuse, Inc. Shareholders’ Equity
(in thousands, except share and per share data) Common Stock Addl. Paid in Capital Treasury Stock Accum. Other Comp. Inc. (Loss) Retained Earnings Non-controlling Interest Total
Balance at December 31, 2022 $ 261   $ 974,097   $ ( 252,866 ) $ ( 95,764 ) $ 1,585,466   $ 184   $ 2,211,378  
Net income —  —  —  —  259,485   —  259,485  

Other comprehensive income, net of tax —  —  —  39,947   —  —  39,947  

Stock-based compensation —  23,898   —  —  —  —  23,898  
Non-controlling interest —  —  —  —  ( 128 ) 128   —  
Withheld 25,933 shares on restricted share units for withholding taxes
—  —  ( 6,397 ) —  —  —  ( 6,397 )
Stock options exercised 1   14,330   —  —  —  —  14,331  

Cash dividends paid ($ 2.50 per share)
—  —  —  —  ( 62,161 ) —  ( 62,161 )
Balance at December 30, 2023 $ 262   $ 1,012,325   $ ( 259,263 ) $ ( 55,817 ) $ 1,782,662   $ 312   $ 2,480,481  
Net income —  —  —  —  100,190   —  100,190  

Other comprehensive loss, net of tax —  —  —  ( 90,544 ) —  —  ( 90,544 )

Stock-based compensation —  26,012   —  —  —  —  26,012  
Non-controlling interest —  —  —  —  ( 163 ) 43   ( 120 )
Withheld 21,732 shares on restricted share units for withholding taxes
—  —  ( 5,048 ) —  —  —  ( 5,048 )
Stock options exercised —   10,742   —  —  —  —  10,742  

Repurchases of common stock, with excise tax —  —  ( 41,040 ) —  —  —  ( 41,040 )
Cash dividends paid ($ 2.70 per share)
—  —  —  —  ( 67,061 ) —  ( 67,061 )
Balance at December 28, 2024 $ 262   $ 1,049,079   $ ( 305,351 ) $ ( 146,361 ) $ 1,815,628   $ 355   $ 2,413,612  
Net loss —  —  —  —  ( 71,700 ) —  ( 71,700 )

Other comprehensive income, net of tax —  —  —  140,978   —  —  140,978  

Stock-based compensation —  27,301   —  —  —  —  27,301  
Non-controlling interest —  ( 6,829 ) —  —  ( 238 ) ( 355 ) ( 7,422 )
Withheld 30,385 shares on restricted share units for withholding taxes
—  —  ( 5,971 ) —  —  —  ( 5,971 )
Stock options exercised 2   28,599   —  —  —  —  28,601  

Repurchases of common stock, with excise tax —  —  ( 27,374 ) —  —  —  ( 27,374 )
Cash dividends paid ($ 2.90 per share)
—  —  —  —  ( 71,991 ) —  ( 71,991 )
Balance at December 27, 2025 $ 264   $ 1,098,150   $ ( 338,696 ) $ ( 5,383 ) $ 1,671,699   $ —   $ 2,426,034  

 
See accompanying Notes to Consolidated Financial Statements.
 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies and Other Information
 
Nature of Operations  
 
Littelfuse, Inc. and subsidiaries (the “Company”) is a diversified, industrial technology manufacturing company empowering a sustainable, connected, and safer world. Across more than 20 countries, and with approximately 17,000 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.

Fiscal Year  
 
References herein to “2025”, “fiscal 2025” or “fiscal year 2025” refer to the fiscal year ended December 27, 2025. References herein to “2024”, “fiscal 2024” or “fiscal year 2024” refer to the fiscal year ended December 28, 2024. References herein to “2023”, “fiscal 2023” or “fiscal year 2023” refer to the fiscal year ended December 30, 2023. The Company operates on a 52-53 week fiscal year (4-4-5 basis) ending on the Saturday closest to December 31.

Basis of Presentation  
 
The Consolidated Financial Statements include the accounts of Littelfuse, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. The Company’s Consolidated Financial Statements were prepared in accordance with generally accepted accounting principles in the United States of America ("U.S.") and include the assets, liabilities, sales and expenses of all wholly owned subsidiaries and majority-owned subsidiaries over which the Company exercises control.
 
Out-of-Period Adjustments

During the year ended December 28, 2024, the Company identified certain errors in its previously issued financial statements that were corrected through cumulative out-of-period adjustments in the financial statements as of and for the year ended December 28, 2024. The error was identified by management and related to the valuation and existence of inventory that originated in prior periods at certain of our non-U.S. manufacturing locations within the Transportation and Industrial segments. As a result, the Company recorded an out-of-period adjustment to the prior years of $ 12.3  million in the year ended December 28, 2024. The adjustment increased cost of sales, offset by a reduction in inventory. The out-of-period adjustment resulted in a decrease to net income of $ 12.3  million. The Company evaluated the impact of the error and out-of-period adjustment and concluded it was not material to any previously issued financial statements and the adjustment was not material to the year ended December 28, 2024.

Use of Estimates  
 
The process of preparing financial statements in conformity with generally accepted accounting principles in the U.S. requires management to make estimates and assumptions that affect the amounts of assets and liabilities at the date of the Consolidated Financial Statements, and the reported amounts of revenues and expenses and the accompanying notes. The Company evaluates and updates its assumptions and estimates on an ongoing basis and may employ outside experts to assist in its evaluation, as considered necessary. Actual results could differ from those estimates.

Cash, Cash Equivalents and Restricted Cash
 
All highly liquid investments, with an original maturity of three months or less when purchased, are considered to be cash equivalents. The Company maintains several pools including multicurrency notional pools and physical pools internationally and a zero-balance account ("ZBA") structure in the U.S. In the notional pools, actual cash balances are not physically converted and are not commingled between participating legal entities. The Company will classify any overdraft balances within accrued expenses and other current liabilities on the Consolidated Balance Sheets.

The following table provides a reconciliation of cash, cash equivalents and restricted cash at December 27, 2025 and December 28, 2024 reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statement of Cash Flows.
 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fiscal Year Ended
(in millions) 2025 2024
Cash and cash equivalents $ 563,391   $ 724,924  

Restricted cash included in other assets 1,713   1,513  
Total cash, cash equivalents and restricted cash $ 565,104   $ 726,437  

Short-Term and Long-Term Investments

As of December 27, 2025, the Company has an investment in Polytronics Technology Corporation Ltd. (“Polytronics”). The Company’s Polytronics shares held at the end of fiscal 2025 and 2024 represent approximately 6.7 % of total Polytronics shares outstanding for both years. The Polytronics investment is carried at fair value. The fair value of the Polytronics investment was € 6.5  million (approximately $ 7.7 million) at December 27, 2025 and € 9.8 million (approximately $ 10.2 million) at December 28, 2024.
 
As a result of the Company’s acquisition of IXYS Corporation ("IXYS"), the Company has equity ownerships in various investments that are accounted for under the equity method. The Company owns 45 % of the outstanding equity of Powersem GmbH, a module manufacturer based in Germany, approximately 15 % of the outstanding equity of EB Tech Co., Ltd., a company with expertise in radiation technology based in South Korea, and approximately 24 % of the outstanding common shares of Automated Technology (Phil), Inc., a supplier located in the Philippines that provides assembly and test services. The Company recognized a loss of $ 1.0 million and $ 0.6 million from its equity method investments for the fiscal years ended December 27, 2025 and December 28, 2024, respectively, recorded in Other (income), net, in the Consolidated Statements of Net (Loss) Income. The balance of these equity method investments was $ 12.3 million and $ 13.1 million as of the fiscal years ended December 27, 2025 and December 28, 2024, respectively. See Note 18, Related Party Transactions, for further discussion.

The Company has investments related to its non-qualified Supplemental Retirement and Savings Plan. The Company maintains accounts for participants through which participants make investment elections. The investment securities are subject to the claims of the Company’s creditors. The investment securities are all mutual funds. The investment securities are measured at net asset value. As of December 27, 2025 and December 28, 2024, the investment securities balance was $ 25.7 million and $ 23.3 million, respectively, related to the plan and are included in Other long-term assets on the Consolidated Balance Sheets.
 
Trade Receivables
 
The Company performs credit evaluations of customers’ financial condition and generally does not require collateral. A receivable is considered past due if payments have not been received within agreed upon invoice terms. Write-offs are recorded at the time a customer receivable is deemed uncollectible.
 
The Company also maintains allowances against trade receivables for the settlement of rebates and sales discounts to customers. These allowances are based upon specific customer sales and sales discounts as well as actual historical experience.
 
Inventories
 
Inventories are stated at the lower of cost or net realizable value, which approximates current replacement cost. Cost is principally determined using the first-in, first-out method. The Company maintains excess and obsolete reserves against inventory to reduce the carrying value to the expected net realizable value. These reserves are based upon a combination of factors including historical sales volume, market conditions, and lower of cost or net realizable value of the inventory.
 
Property, Plant, and Equipment
 
Land, buildings, and equipment are carried at cost. Depreciation is calculated using the straight-line method with useful lives of up to 35 years for buildings, three to 20 years for equipment, seven years for furniture and fixtures, five years for tooling, and three years for computer equipment. Leasehold improvements are depreciated over the lesser of their useful life or the lease term. Maintenance and repair costs are charged to expense as incurred. Major overhauls that extend the useful lives of existing assets are capitalized.
 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Goodwill
 
The Company annually tests goodwill for impairment 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.

The results of the goodwill impairment test as of September 28, 2025 indicated that the estimated fair value for the Electronics-Semiconductor reporting unit was below its respective carrying value. Accordingly, the Company recorded a non-cash impairment charge of $ 301.2 million to reflect the impairment of goodwill for the Electronics-Semiconductor reporting unit within the Electronics segment. As a result of the impairment charge, the Electronics-Semiconductor reporting unit had $ 238.5  million of goodwill as of December 27, 2025. For the remainder of the Company's reporting units with goodwill: Electronics-Passive Products and Sensors, Passenger Car Products, Commercial Vehicle Products, Industrial Controls and Sensors, and Industrial Circuit Protection, the results of the goodwill impairment test as of September 28, 2025 indicated that their estimated fair values exceeded their respective carrying values.

During the fourth quarter of 2024, the Company recorded non-cash charges of $ 36.1 million and $ 8.6 million, respectively, to reflect the impairment of goodwill for the Industrial Controls and Sensors reporting unit within the Industrial segment and the Automotive Sensors reporting unit within the Transportation segment. As of December 27, 2025, the Industrial controls and sensors reporting unit had $ 274.9 million of remaining goodwill. There was no goodwill remaining within the Automotive sensors reporting unit as of December 28, 2024.

There was no impairment charge recorded during the fiscal year of 2023.

The Company compares each reporting unit’s fair value, estimated based on comparable company market valuations and expected future discounted cash flows to be generated by the reporting unit, to its carrying value. With the exception of the Electronics-Semiconductor reporting unit within the Electronics segment, the other five reporting units with goodwill passed the goodwill impairment test, with estimated fair values that exceeded the carrying values between 22 % and 303 %. As of the most recent annual test conducted on September 28, 2025, the Company noted that the excess of fair value over the carrying value was 87 %, 153 %, 99 %, 22 % and 303 % for its reporting units: Electronics-Passive Products and Sensors, Passenger Car Products, Commercial Vehicle Products, Industrial Controls and Sensors, and Industrial Circuit Protection, respectively. Relatively small changes in the Company’s key assumptions would not have resulted in any reporting units failing the goodwill impairment test. See Note 5, Goodwill and Other Intangible Assets, for additional information.

The Company also performs an interim review for indicators of impairment each quarter to assess whether an interim impairment review is required for any reporting unit. As part of its interim reviews, management analyzes potential changes in the value of individual reporting units based on each reporting unit’s operating results for the period compared to expected results as of the prior year’s annual impairment test. In addition, management considers how other key assumptions, including discount rates and expected long-term growth rates, used in the last annual impairment test, could be impacted by changes in market conditions and economic events. Based on the interim assessments as of December 27, 2025, management concluded that no events or changes in circumstances indicated that it was more likely than not that the fair value for any reporting unit had declined below its carrying value.  

Long-Lived Assets
 
For the fiscal year ended December 27, 2025, the Company recognized impairment charges of $ 0.5 million and $ 0.4 million related to certain machinery and equipment in the commercial vehicle business within the Transportation and the electronics products business within the Electronics segment, respectively.

For the fiscal year ended December 28, 2024, the Company recorded non-cash impairment charges of $ 47.8  million for the impairment of intangible assets, including $ 47.6  million related to the impairment of certain acquired customer relationships, developed technology, and tradename intangible assets in the Industrial Controls and Sensors reporting unit within the Industrial segment. The impairment of the intangible assets resulted from lower expectations of future revenue and cash flows driven by lower-than-expected demand in the electrical vehicle end market as well as reduced government funding to support charging infrastructures for electric vehicles, primarily in Europe. The fair value was determined using Level 3 inputs and estimated based on cash flow analyses, which included management’s assumptions related to future revenues and profitability. The remaining impairment charges included $ 0.2  million for patents and customer relationships related to the exit of a small business in China within the Industrial segment. In addition, during the first quarter of 2024, the Company recognized a $ 0.9  million impairment related to certain machinery and equipment in the commercial vehicle business within the Transportation segment.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the fiscal year ended December 30, 2023, the Company recognized a $ 3.9  million impairment charge related to the land and building of a property in the commercial vehicle business within the Transportation segment that the Company made the decision to donate, a $ 0.9  million impairment charge substantially related to certain patents in a business within the Industrial segment, and a $ 0.1  million impairment on certain machinery and equipment in the semiconductor business within the Electronics segment.

Customer relationships, trademarks and tradenames are amortized using the straight-line method over estimated useful lives that have a range of 3 to 20 years. Patents, licenses, and software are amortized using the straight-line method or an accelerated method over estimated useful lives that have a range of 4 to 17 years. The distribution networks are amortized on either a straight-line or accelerated basis over estimated useful lives that have a range of 4 to 10 years. Land use rights are amortized using the straight-line method up to 50 years which is the term of the land use rights.
 
The Company assesses potential impairments to its long-lived assets if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impaired asset is written down to its estimated fair value based upon the most recent information available. Estimated fair market value is generally measured by discounting estimated future cash flows. Long-lived assets, other than goodwill and other intangible assets, which are held for sale are recorded at the lower of carrying value or the fair market value less the estimated cost to sell.

Environmental Liabilities
 
Environmental liabilities are accrued based on engineering studies estimating the cost of remediating sites. Expenses related to on-going maintenance of environmental sites are expensed as incurred. If actual or estimated probable future losses exceed the Company’s recorded liability for such claims, the Company would record additional charges during the period in which the actual loss or change in estimate occurred.
 
Pension and Other Post-retirement Benefits
 
The Company records annual income and expense amounts relating to its pension and post-retirement benefits plans based on calculations which include various actuarial assumptions including discount rates, expected long-term rates of return and compensation increases. The Company reviews its actuarial assumptions on an annual basis as of the fiscal year-end balance sheet date (or more frequently if a significant event requiring remeasurement occurs) and modifies the assumption based on current rates and trends when it is appropriate to do so. The effects of modifications are recognized immediately on the Consolidated Balance Sheets, but are generally amortized into operating earnings over future periods, with the deferred amount recorded in accumulated other comprehensive loss. The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience, market conditions and input from its actuaries and investment advisors.
 
Revenue Recognition
 
Revenue Disaggregation
 
The following table disaggregates the Company’s revenue by primary business units for the fiscal years ended December 27, 2025, December 28, 2024, and December 30, 2023:
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

  Fiscal Year Ended December 27, 2025
(in thousands) Electronics
Segment Transportation
Segment Industrial
Segment  
Total

Electronics – Semiconductor $ 669,579   $ —   $ —   $ 669,579  
Electronics – Passive Products and Sensors 675,943   —   —   675,943  
Commercial Vehicle Products —   320,545   —   320,545  
Passenger Car Products —   293,641   —   293,641  
Automotive Sensors —   62,191   —   62,191  
Industrial Products —   —   364,395   364,395  
Total $ 1,345,522   $ 676,377   $ 364,395   $ 2,386,294  
 
  Fiscal Year Ended December 28, 2024
(in thousands) Electronics
Segment Transportation
Segment Industrial
Segment  
Total

Electronics – Semiconductor $ 615,372   $ —   $ —   $ 615,372  
Electronics – Passive Products and Sensors 571,401   —   —   571,401  
Commercial Vehicle Products —   320,549   —   320,549  
Passenger Car Products —   278,332   —   278,332  
Automotive Sensors —   73,553   —   73,553  
Industrial Products —   —   331,561   331,561  
Total $ 1,186,773   $ 672,434   $ 331,561   $ 2,190,768  

  Fiscal Year Ended December 30, 2023
(in thousands) Electronics
Segment Transportation
Segment Industrial
Segment  
Total

Electronics – Semiconductor $ 767,393   $ —   $ —   $ 767,393  
Electronics – Passive Products and Sensors 583,033   —   —   583,033  
Commercial Vehicle Products —   323,758   —   323,758  
Passenger Car Products —   266,004   —   266,004  
Automotive Sensors —   88,516   —   88,516  
Industrial Products —   —   333,953   333,953  
Total $ 1,350,426   $ 678,278   $ 333,953   $ 2,362,657  

See Note 16, Segment Information, for net sales by segment and country.
 
The Company recognizes revenue on product sales in the period in which the Company satisfies its performance obligation and control of the product is transferred to the customer. The Company’s sales arrangements with customers are predominately short term in nature and generally provide for transfer of control at the time of shipment as this is the point at which title and risk of loss of the product transfers to the customer. At the end of each period, for those shipments where title to the products and the risk of loss and rewards of ownership do not transfer until the product has been received by the customer, the Company adjusts revenues and cost of sales for the delay between the time that the products are shipped and when they are received by the customer. The amount of revenue recorded reflects the consideration to which the Company expects to be entitled in exchange for goods and may include adjustments for customer allowance, rebates, and price adjustments. The Company’s distribution channels are primarily through direct sales and independent third-party distributors.
 
The Company has elected the practical expedient under 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
 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Allowance for Credit Losses

The Company currently measures the expected credit losses based on our historical credit loss experience. The Company has not experienced significant recent or historical credit losses and is not forecasting any significant credit losses which would require adjustments to our methodology. If current conditions and supportable forecasts indicate that our historical loss experience is not reasonable and no longer supportable, the Company may adjust its historical credit loss experience and to reflect these conditions and forecasts. The Company regularly analyzes its significant customer accounts and, when the Company becomes aware of a customer’s inability to meet its financial obligations, the Company records a specific reserve for bad debt to reduce the related receivable to the amount the Company reasonably believes is collectible. The Company also analyzes all other customers based on a variety of factors including the length of time the receivables are past due, the financial health of the customer, macroeconomic considerations and historical collection and loss experience. Historically, the allowance for credit losses has been adequate to cover bad debts. If circumstances related to specific customers change, the estimates of the recoverability of receivables could be further adjusted.

As of December 27, 2025 and December 28, 2024, the Company’s allowance for credit losses was $ 2.5  million and $ 1.6  million, respectively. Additionally, the Company had $ 9.3  million and $ 3.8  million of trade receivables greater than 90 days past due as of December 27, 2025 and December 28, 2024, respectively.

Advertising Costs
 
The Company expenses advertising costs as incurred, which amounted to $ 4.0 million, $ 5.0 million, and $ 4.0 million in fiscal years 2025, 2024 and 2023, respectively, and are included as a component of selling, general, and administrative expenses.
 
Shipping and Handling Fees and Costs
 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Amounts billed to customers related to shipping and handling are classified as revenue. Costs incurred for shipping and handlin g of $ 14.3 million, $ 15.3 million, and $ 15.4 million in fiscal years 2025, 2024, and 2023, respectively, are classified in selling, general, and administrative expenses.
 
Foreign Currency Translation / Remeasurement
 
The Company’s foreign subsidiaries use the local currency or the U.S. dollar as their functional currency, as appropriate. Assets and liabilities are translated using exchange rates at the balance sheet date, and revenues and expenses are translated at weighted average rates. Adjustments from the translation process are recognized in Shareholders’ equity as a component of Accumulated other comprehensive loss . The amount of foreign currency loss or (gain) recognized in the Consolidated Statements of Net (Loss) Income was loss (gain) of $ 16.6 million, $( 9.2 ) million, and $ 12.3 million in fiscal years 2025, 2024 and 2023, respectively.

Stock-Based Compensation
 
The Company recognizes compensation expense for the cost of awards of equity compensation using a fair value method. Benefits of tax deductions in excess of recognized compensation expense are reported as operating cash flows. See Note 12, Stock-Based Compensation , for additional information on stock-based compensation.

Coal Mining Liability

Included in accrued liabilities is an accrual related to former coal mining operations at Littelfuse GmbH (formerly known as Heinrich Industries, AG) for the amounts of € 1.8 million ($ 2.2 million) and € 2.2 million ($ 2.3 million) at December 27, 2025 and December 28, 2024, respectively. Management, in conjunction with an independent third-party, performs an annual evaluation of the former coal mining operations in order to develop an estimate of the probable future obligations in regard to remediating the dangers (such as a shaft collapse) of abandoned coal mine shafts in the former coal mining operations. Management accrues for costs associated with such remediation efforts based on management's best estimate when such costs are probable and reasonably able to be estimated. The ultimate determination can only be done after respective investigations because the concrete conditions are mostly unknown at this time.
 
Other Income, Net
 
Other income, net generally consists of interest income, royalties, changes in fair value of available-for-sale securities, pension non-service costs and settlements and other non-operating (income) expense. The amount of interest income included in Other income, net, was $ 26.3  million, $ 28.0  million, and $ 18.9  million in fiscal years 2025, 2024 and 2023, respectively.
 
Income Taxes
 
The Company accounts for income taxes using the asset and liability method. Deferred taxes are recognized for the future effects of temporary differences between financial and income tax reporting using enacted tax rates in effect for the years in which the differences are expected to reverse. The Company recognizes deferred taxes for temporary differences, operating loss carryforwards, and tax credit and other tax attribute carryforwards (excluding carryforwards where usage has been determined to be remote). Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. U.S. state and non-U.S. income taxes are provided on the portion of non-U.S. income that is expected to be remitted to the U.S. and be taxable (and non-U.S. income taxes are provided on the portion of non-U.S. income that is expected to be remitted to an upper-tier non-U.S. entity). Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Deferred U.S. income taxes and non-U.S. taxes are not provided on the excess of the investment value for financial reporting over the tax basis of investments in those non-U.S. subsidiaries for which such excess is considered to be permanently reinvested in those operations. Management regularly evaluates whether non-U.S. earnings are expected to be permanently reinvested. This evaluation requires judgment about the future operating and liquidity needs of the Company and its non-U.S. subsidiaries. Changes in economic and business conditions, tax laws, or the Company’s financial situation could result in changes to these judgments and the need to record additional tax liabilities.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.
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The 2017 Tax Cuts and Jobs Act (the "Tax Act"), among other things, imposed a one-time tax (the “Toll Charge”) on accumulated earnings of certain non-U.S. subsidiaries and included base broadening provisions commonly referred to as the global intangible low-taxed income provisions ("GILTI").

In accordance with guidance issued by the FASB staff, the Company has adopted an accounting policy to treat any GILTI inclusions as a period cost if and when incurred. Thus, for the fiscal years ended December 27, 2025 , December 28, 2024, and December 30, 2023, deferred taxes were computed without consideration of the possible future impact of the GILTI provisions, and any current year impact was recorded as a part of the current portion of income tax expen se.

On July 4, 2025, the United States enacted into law the legislation formally titled “An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14,” and commonly referred to as the One Big Beautiful Bill Act (“OBBB”). The OBBB contains multiple business tax provisions, including the permanent extension of several expiring provisions of the Tax Act and multiple modifications to the international tax framework. The legislation has multiple effective dates with certain provisions effective in 2025 and others to be implemented in future years, and the Company determined the impact for the year ended December 27, 2025 was not significant. The Company will continue to monitor future administrative guidance and regulations that clarify the legislative text of the OBBB and the bill’s potential effect on the Company’s income taxes.
 
Fair Value Measurements
 
Certain assets and liabilities are required to be recorded at fair value on a recurring basis. Fair value is determined based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The Company records the fair value of its available-for-sale securities and pension plan assets on a recurring basis. Assets measured at fair value on a nonrecurring basis include long-lived assets held and used, long-lived assets held for sale, goodwill, and other intangible assets. The fair value of cash and cash equivalents, short-term investments, accounts receivable, accounts payable, and accrued liabilities approximate their carrying values. The three-tier value hierarchy, which prioritizes valuation methodologies based on the reliability of the inputs, is:
 
Level 1 – Valuations based on unadjusted quoted prices for identical assets and liabilities in active markets.
 
Level 2 – Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
 
Level 3 – Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants.
 
Recently Adopted Accounting Standards

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("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 Company adopted ASU 2023-09 for the year ended December 27, 2025, and applied the new disclosure requirements prospectively to the current annual period. Prior period disclosures have not been adjusted to reflect the new disclosure requirements. See Note 14, Income Taxes , for more information and the updated disclosures.

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Recently Issued Accounting Standards

In December 2025, the FASB issued ASU No. 2025-12, "Codification Improvements." The amendments in this update represent changes to the codification that clarify, correct errors, or make minor improvements. The amendments make the codification easier to understand and apply. The amendments in this update are varied in nature and may affect the application of guidance in cases in which the original guidance may have been unclear. The guidance is effective for fiscal years beginning after December 15, 2026 with early adoption permitted. The Company does not expect any material effect of the adoption of this guidance on the Company's Consolidated Financial Statements.

In December 2025, the FASB issued ASU No. 2025-11, "Interim Reporting (Topic 270): Narrow-Scope Improvements." The amendments in this update result in a comprehensive list of interim disclosures that are required by GAAP. The objective of the amendments is to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements. The amendments in this update include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The amendments in this update also clarify the applicability of Topic 270, the types of interim reporting, and the form and content of interim financial statements in accordance with GAAP. The guidance is effective for fiscal years beginning after December 15, 2027 with early adoption permitted. The Company does not expect any material effect of the adoption of this guidance on the Company's Consolidated Financial Statements.

In November 2025, the FASB issued ASU No. 2025-09, "Derivatives and Hedging (Topic 815): Hedge Accounting Improvements." The amendments in this update are intended to more closely align hedge accounting with the economics of an entity's risk management activities.The five issues addressed in this update (1) expand the hedged risks permitted to be aggregated in a group of individual forecasted transactions in a cash flow hedge by changing the requirement to designate a group of individual forecasted transactions from having a shared risk exposure to having a similar risk exposure, (2) provide a model to facilitate the application of cash flow hedge accounting to forecasted interest payments on variable-rate debt instruments with contractual terms that permit the borrower to change the interest rate index and interest rate tenor upon which interest is accrued, (3) expand hedge accounting for forecasted purchases and sales of nonfinancial assets, (4) update the hedge accounting guidance to accommodate differences in the loan and swap markets that developed after the cessation of the London Interbank Offered Rate, and (5) eliminate the recognition and presentation mismatch related to a dual hedge strategy. The guidance is effective for fiscal years beginning after December 15, 2026 with early adoption permitted. The Company does not expect any material effect of the adoption of this guidance on the Company's Consolidated Financial Statements.

In September 2025, the FASB issued 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 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 Consolidated Financial Statements.
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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 Generally Accepted Accounting Principles ("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 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 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 Consolidated Financial Statements.

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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 businesses are included in the Company’s Consolidated Financial Statements from the date of the acquisition.
 
Basler Electric

On December 11, 2025, the Company completed the acquisition of Basler. 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. At the time of acquisition, Basler had annualized sales of approximately $ 130  million. The business is reported within the Company’s Industrial segment. The purchase price for Basler was $ 361.7  million and is subject to a working capital adjustment.

The Company financed the transaction with cash on hand. The total purchase consideration of $ 350.3  million, net of cash acquired, has been allocated, on a preliminary basis, based on estimated fair values of assets acquired and liabilities assumed. As of December 27, 2025, the Company’s purchase price allocation reflects various provisional estimates that were based on the information that was available as of the acquisition date and the filing date of this Form 10-K. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed; however, the determination of those fair values, including the third-party valuation of acquired tangible and intangible assets, is not yet finalized. Thus, the preliminary measurements of fair value set forth in the table below are subject to change during the measurement period as valuations are finalized. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable.

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

(in thousands) Purchase Price
Allocation
Total purchase consideration:  
Cash, net of cash acquired $ 350,301  
Allocation of consideration to assets acquired and liabilities assumed:
Trade receivables, net 16,798  
Inventories 23,363  
Other current assets 2,965  
Property, plant, and equipment 23,237  
Intangible assets 150,000  
Goodwill 152,343  
Other long-term assets 5,731  
Current liabilities ( 21,386 )
Other long-term liabilities ( 2,750 )

  $ 350,301  

All Basler assets and liabilities were recorded in the Industrial segment and are primarily reflected in the North America geographic area. The goodwill resulting from this acquisition consists largely of the Company’s expected future product sales and synergies from combining Basler’s products and technology with the Company’s existing Industrial products portfolio. Goodwill resulting from the Basler acquisition is expected to be deductible for tax purposes.

Included in the Company’s Consolidated Statements of Net (Loss) Income for the fiscal year ended December 27, 2025 were net sales of $ 3.7  million, and a loss before income taxes of $ 1.2  million, respectively, since the December 11, 2025 acquisition of Basler.

As required by purchase accounting guidance, the Company recorded a $ 6.4  million step-up of inventory to its fair value as of the acquisition date based on the preliminary valuation. The step-up is being amortized as a non-cash charge to cost of goods sold during the fourth quarter of 2025 and first quarter of 2026, as the acquired inventory is sold, and reflected as other non-segment costs. The Company recognized a non-cash charge of $ 1.1  million to cost of goods sold during the fiscal year ended December 27, 2025.

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For the fiscal year ended December 27, 2025, the Company incurred $ 2.6 million of legal and professional fees related to the Basler acquisition recognized as Selling, general, and administrative expenses and reflected as other non-segment costs.

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 the Company’s 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:

(in thousands) Purchase Price
Allocation
Total purchase consideration:  
Cash, net of cash acquired $ 95,942  
Allocation of consideration to assets acquired and liabilities assumed:
Trade receivables, net 5,985  
Inventories 6,600  
Other current assets 8,278  
Property, plant, and equipment 30,132  
Intangible assets 1,800  
Goodwill 57,321  
Other long-term assets 8,579  
Current liabilities ( 7,464 )
Other long-term liabilities ( 15,289 )
  $ 95,942  

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.

Included in the Company’s Consolidated Statements of Net (Loss) Income for the fiscal year ended December 27, 2025 were net sales of $ 49.0  million, and a loss before income taxes of $ 69.1  million, respectively, since the December 31, 2024 acquisition of Dortmund Fab. The loss before income taxes included the goodwill impairment charge of $ 64.6  million recorded in the fourth quarter of the fiscal year 2025.

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.

For the fiscal year ended December 28, 2024 and December 30, 2023, the Company incurred $ 0.5  million and $ 3.0  million, respectively, of legal and professional fees related to the Dortmund Fab acquisition recognized as Selling, general, and administrative expenses and reflected as other non-segment costs. 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.

Western Automation

On February 3, 2023, the Company completed the acquisition of Western Automation Research and Development Limited (“Western Automation”) for approximately $ 162  million in cash. Headquartered in Galway, Ireland, Western Automation is a designer and manufacturer of electrical shock protection devices used across a broad range of high-growth end markets,
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including electric vehicle charging infrastructure, industrial safety and renewables. At the time the Company and Western Automation entered into the definitive agreement, Western Automation had annualized sales of approximately $ 25  million. The business is reported within the Company’s Industrial segment.

The acquisition was funded with cash on hand. The total purchase consideration of $ 158.3  million, net of cash, 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 Western Automation acquisition:

(in thousands) Purchase Price
Allocation
Total purchase consideration:  
Cash, net of cash acquired $ 158,260  
Allocation of consideration to assets acquired and liabilities assumed:
Trade receivables, net 3,359  
Inventories 3,678  
Other current assets 718  
Property, plant, and equipment 1,328  
Intangible assets 68,000  
Goodwill 93,937  
Other long-term assets 573  
Current liabilities ( 4,335 )
Other long-term liabilities ( 8,998 )
  $ 158,260  

All Western Automation assets and liabilities were recorded in the Industrial 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 Western Automation’s products and technology with the Company’s existing Industrial products portfolio. Goodwill resulting from the Western Automation acquisition is not expected to be deductible for tax purposes.

For the fiscal year ended December 30, 2023, the Company incurred $ 1.2  million of legal and professional fees related to the Western Automation acquisition recognized as Selling, general, and administrative expenses and 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, Basler and Dortmund Fab as though the acquisitions had occurred as of December 31, 2023, and Western Automation as though the acquisition had occurred as of January 2, 2022. The pro forma amounts presented are not necessarily indicative of either the actual consolidated results had the Basler and Dortmund Fab acquisitions occurred as of December 31, 2023, and Western Automation acquisition occurred as of January 2, 2022 or of future consolidated operating results.

  For the Fiscal Year Ended
(in thousands, except per share amounts) December 27, 2025 December 28, 2024 December 30, 2023
Net sales $ 2,515,937   $ 2,354,262   $ 2,364,543  
Income before income taxes 11,474   148,476   330,114  
Net (loss) income ( 66,100 ) 96,901   260,812  
Net (loss) income per share — basic ( 2.66 ) 3.90   10.49  
Net (loss) income per share — diluted ( 2.66 ) 3.87   10.39  

Pro forma results presented above primarily reflect the following adjustments:
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  For the Fiscal Year Ended
(in thousands) December 27, 2025 December 28, 2024 December 30, 2023
Amortization (a) $ ( 11,009 ) $ ( 10,481 ) $ ( 479 )
Depreciation ( 833 ) ( 1,821 ) —  
Transaction costs (b) 2,536   ( 2,535 ) 1,203  
Amortization of unfavorable production contract (c) —   2,269   —  
Amortization of inventory adjustment (d) 563   ( 5,890 ) —  

Income tax benefit (expense) of above items 2,130   4,352   ( 91 )
Total $ ( 6,613 ) $ ( 14,106 ) $ 633  

(a) The amortization adjustment for the twelve months ended December 27, 2025, December 28, 2024, and December 30, 2023, primarily reflects incremental amortization resulting from the measurement of intangibles at their fair values.
(b) The transaction cost adjustments reflect the reversal of certain legal and professional fees from the twelve months ended December 27, 2025 and December 30, 2023, respectively, and recognition of those fees during the twelve months ended December 28, 2024 and December 31, 2022, respectively.
(c) The amortization of the unfavorable production contract during the twelve months ended December 28, 2024 results from the fair value assigned to the unfavorable production contract liability that is amortized over four years .
(d) The amortization of inventory adjustment reflects the reversal of the amount recognized during the twelve months ended December 27, 2025 and recognition of the amortization during the twelve months ended December 28, 2024. The inventory adjustment related to the Basler acquisition is being amortized over three months as the inventory is sold. The inventory adjustment related to the Dortmund Fab acquisition was fully amortized over two months as the inventory was sold during 2025.

3. Inventories
 
The components of inventories at December 27, 2025 and December 28, 2024 were as follows:
 
(in thousands) 2025 2024
Raw materials $ 186,662   $ 193,788  
Work in process 131,129   115,497  
Finished goods 181,376   173,513  
Inventory reserves ( 82,695 ) ( 66,525 )
Total $ 416,472   $ 416,273  

4. Property, Plant, and Equipment, net
 
The components of net property, plant, and equipment at December 27, 2025 and December 28, 2024 were as follows:
 
(in thousands) 2025 2024
Land and land improvements $ 24,088   $ 17,593  
Building and building improvements 215,024   192,441  
Machinery and equipment 998,988   892,940  
Accumulated depreciation and amortization ( 697,460 ) ( 625,906 )
Total $ 540,640   $ 477,068  

The Company recorded depreciation expense of $ 74.9 million, $ 68.3 million, and $ 71.6 million for the fiscal years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively, in Cost of sales, Selling, general, and administrative expenses , and Research and development expenses in the Consolidated Statements of Net (Loss) Income.

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5. Goodwill and Other Intangible Assets
 
The amounts for goodwill and changes in the carrying value by segment were as follows:
 
(in thousands) Electronics Transportation
Industrial Total
Gross goodwill as of December 30, 2023
$ 936,505   $ 237,115   $ 179,117   $ 1,352,737  
Accumulated impairment losses as of December 30, 2023
—   ( 34,004 ) ( 8,735 ) ( 42,739 )
Net goodwill as of December 30, 2023
$ 936,505   $ 203,111   $ 170,382   $ 1,309,998  
Changes during 2024:

Impairments —   ( 8,616 ) ( 36,147 ) ( 44,763 )
Foreign currency translation adjustments ( 29,634 ) ( 2,854 ) ( 4,245 ) ( 36,733 )
Gross goodwill as of December 28, 2024
906,871   233,286   173,882   1,314,039  
Accumulated impairment losses as of December 28, 2024
—   ( 41,645 ) ( 43,892 ) ( 85,537 )
Net goodwill as of December 28, 2024
$ 906,871   $ 191,641   $ 129,990   $ 1,228,502  
Changes during 2025:

Additions (a) 57,321   —   152,343   209,664  
Impairments ( 301,185 ) —   —   ( 301,185 )
Foreign currency translation adjustments 61,322   5,758   7,350   74,430  
Gross goodwill as of December 27, 2025
1,027,462   242,192   338,739   1,608,393  
Accumulated impairment losses as of December 27, 2025
( 303,133 ) ( 44,793 ) ( 49,056 ) ( 396,982 )
Net goodwill as of December 27, 2025
$ 724,329   $ 197,399   $ 289,683   $ 1,211,411  

(a) The additions resulted from the acquisitions of Dortmund Fab and Basler.

The Company tests its goodwill annually for impairment 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. The results of the goodwill impairment test as of September 28, 2025 indicated that the estimated fair value for the Electronics-Semiconductor reporting unit was below its respective carrying value. Accordingly, the Company recorded a non-cash charge of $ 301.2 million to reflect the impairment of goodwill for the Electronics-Semiconductor reporting unit within the Electronics segment during the fourth quarter of 2025.

The goodwill impairment charge for the Electronics-Semiconductor reporting unit in the fourth quarter of 2025 was due to reductions in the estimated fair value from 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. In the context of a recent leadership transition and strategic reassessment in the semiconductor business, the reduction was primarily driven by lower projected volumes in the power semiconductor business, largely associated with the Dortmund Fab.

During the fourth quarter of 2024, the Company recorded non-cash charges of $ 36.1 million and $ 8.6 million, respectively, to reflect the impairment of goodwill for the Industrial controls and sensors reporting unit within the Industrial segment and the Automotive sensors reporting unit within the Transportation segment. There were no impairment charges recorded during the fiscal year of 2023. The goodwill impairment charge for the Industrial controls and sensors reporting unit was due to a reduction in the estimated fair value of the reporting unit based on lower expectations for future revenue, profitability and cash flows as compared to the expectations of the 2023 annual goodwill impairment test driven by lower-than-expected demand in the electric vehicle end market as well as reduced government funding to support charging infrastructures for electric vehicles, primarily in Europe.

The goodwill impairment charge was determined using Level 3 inputs, including discounted cash flow analysis and comparable marketplace fair value data. As of December 27, 2025, the Electronics-Semiconductor and the Industrial Controls and Sensors reporting units had $ 238.5  million and $ 274.9  million of remaining goodwill, respectively.
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The components of intangible assets at December 27, 2025 and December 28, 2024 were as follows:

  As of December 27, 2025
(in thousands) Gross
Carrying
Value  
Accumulated
Amortization
 
Net Book
Value

Land use rights $ 16,661   $ 3,613   $ 13,048  
Patents, licenses, and software 291,192   212,184   79,008  
Distribution network 42,384   42,384   —  
Customer relationships, trademarks, and tradenames 793,670   290,819   502,851  
Total $ 1,143,907   $ 549,000   $ 594,907  

  As of December 28, 2024
(in thousands) Gross
Carrying
Value  
Accumulated
Amortization
 
Net Book
Value

Land use rights $ 16,079   $ 2,994   $ 13,085  
Patents, licenses, and software 260,096   180,674   79,422  
Distribution network 41,667   41,667   —  
Customer relationships, trademarks, and tradenames 632,572   242,961   389,611  
Total $ 950,414   $ 468,296   $ 482,118  

During the fiscal year ended December 27, 2025, the Company recorded additions to other intangible assets of $ 150.0 million and $ 1.8 million related to the Basler and Dortmund Fab acquisitions, respectively, the components of which were as follows:

  2025
(in thousands, except weighted average useful life) Weighted Average
Useful Life (Years) Amount

Basler
Patents, developed technology 6.0 $ 15,000  
Customer relationships, trademarks, and tradenames 13.6 135,000  
$ 150,000  
Dortmund Fab
Customer relationships, trademarks, and tradenames 5.0 $ 1,800  

 
For intangible assets with definite lives, the Company recorded amortization expense of $ 59.8 million, $ 62.1 million, and $ 65.8 million in 2025, 2024, and 2023, respectively.