10-Q 1 lfus-20240330.htm 10-Q lfus-20240330
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United States
Securities and Exchange Commission
Washington, D.C. 20549
 
FORM 10-Q 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 30, 2024
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___

Commission file number 0-20388
LITTELFUSE, INC. 
(Exact name of registrant as specified in its charter)
Delaware36-3795742
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
8755 West Higgins Road 
 Suite 500
ChicagoIllinois60631
(Address of principal executive offices)(ZIP Code)
 
Registrant’s telephone number, including area code: 773-628-1000
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of Each Class
Trading SymbolName of exchange on which registered
Common Stock, $0.01 par valueLFUSNASDAQGlobal Select Market
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No ☐
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one): Large accelerated filer [X] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes [ ] No [ ]
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No [X]

As of April 26, 2024, the registrant had outstanding 24,784,449 shares of Common Stock, net of Treasury Shares.


TABLE OF CONTENTS
 
 Page
  
PART I 
Item 1. 
 Condensed Consolidated Balance Sheets as of March 30, 2024 (unaudited) and December 30, 2023
 Condensed Consolidated Statements of Net Income for the three months ended March 30, 2024 (unaudited) and April 01, 2023 (unaudited)
 Condensed Consolidated Statements of Comprehensive Income for the three months ended March 30, 2024 (unaudited) and April 01, 2023 (unaudited)
 Condensed Consolidated Statements of Cash Flows for the three months ended March 30, 2024 (unaudited) and April 01, 2023 (unaudited)
Condensed Consolidated Statements of Stockholders' Equity for the three months ended March 30, 2024 (unaudited) and April 01, 2023 (unaudited)
 
Item 2.
Item 3.
Item 4.
PART II 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

2


ITEM 1. FINANCIAL STATEMENTS
LITTELFUSE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)March 30,
2024
December 30,
2023
ASSETS  
Current assets:  
Cash and cash equivalents (Note 1)$562,153 $555,513 
Short-term investments231 235 
Trade receivables, less allowances of $76,496 and $84,696 at March 30, 2024 and December 30, 2023, respectively
295,876 287,018 
Inventories (Note 3)456,135 474,607 
Prepaid income taxes and income taxes receivable8,574 8,701 
Prepaid expenses and other current assets121,142 82,526 
Total current assets1,444,111 1,408,600 
Net property, plant, and equipment (Note 4)479,435 493,153 
Intangible assets, net of amortization (Note 5)584,631 606,136 
Goodwill (Note 5)1,294,737 1,309,998 
Investments24,204 24,821 
Deferred income taxes10,798 10,486 
Right of use lease assets63,718 62,370 
Other long-term assets41,827 79,711 
Total assets$3,943,461 $3,995,275 
LIABILITIES AND EQUITY  
Current liabilities:  
Accounts payable$172,809 $173,535 
Accrued liabilities (Note 6)124,288 149,214 
Accrued income taxes42,051 38,725 
Current portion of long-term debt (Note 8)65,824 14,020 
Total current liabilities404,972 375,494 
Long-term debt, less current portion (Note 8)800,849 857,915 
Deferred income taxes 100,755 110,820 
Accrued post-retirement benefits 34,049 34,422 
Non-current lease liabilities50,791 49,472 
Other long-term liabilities80,752 86,671 
Total liabilities$1,472,168 $1,514,794 
Commitments and contingencies (Note 15)
Shareholders’ equity:
Common stock, par value $0.01 per share: 34,000,000 shares authorized; shares issued, March 30, 2024–26,634,597; December 30, 2023–26,624,071
262 262 
Additional paid-in capital1,017,311 1,012,325 
Treasury stock, at cost: 1,781,633 and 1,711,290 shares, respectively
(275,398)(259,263)
Accumulated other comprehensive loss(86,108)(55,817)
Retained earnings1,814,916 1,782,662 
Littelfuse, Inc. shareholders’ equity2,470,983 2,480,169 
Non-controlling interest310 312 
Total equity2,471,293 2,480,481 
Total liabilities and equity$3,943,461 $3,995,275 
 
See accompanying Notes to Condensed Consolidated Financial Statements.
3


LITTELFUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME
(Unaudited)
 Three Months Ended
(in thousands, except per share data)March 30,
2024
April 1,
2023
Net sales$535,385 $609,782 
Cost of sales347,577 364,825 
Gross profit187,808 244,957 
Selling, general, and administrative expenses86,127 88,310 
Research and development expenses27,667 27,290 
Amortization of intangibles15,825 16,866 
Restructuring, impairment, and other charges3,237 1,850 
Total operating expenses132,856 134,316 
Operating income54,952 110,641 
Interest expense9,611 9,646 
Foreign exchange gain(5,042)(1,675)
Other income, net(5,321)(6,233)
Income before income taxes55,704 108,903 
Income taxes7,252 20,158 
Net income$48,452 $88,745 
Earnings per share:  
Basic$1.95 $3.58 
Diluted$1.93 $3.54 
Weighted-average shares and equivalent shares outstanding:
Basic24,911 24,782 
Diluted25,124 25,062 
 
See accompanying Notes to Condensed Consolidated Financial Statements.

4

LITTELFUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
 Three Months Ended
(in thousands)March 30,
2024
April 1,
2023
Net income$48,452 $88,745 
Other comprehensive income (loss):
Defined benefit pension plan and other adjustments, net of tax344 6 
Cash flow hedge, net of tax1,926 (2,518)
Foreign currency translation adjustments(32,561)15,795 
Comprehensive income$18,161 $102,028 
 
See accompanying Notes to Condensed Consolidated Financial Statements.

5

LITTELFUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
 Three Months Ended
(in thousands)March 30, 2024April 1, 2023
OPERATING ACTIVITIES  
Net income$48,452 $88,745 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation16,668 17,616 
Amortization of intangibles15,825 16,866 
Deferred revenue(918)639 
Impairment charges 933  
Stock-based compensation3,617 3,730 
Loss (gain) on investments and other assets379 (1,779)
Deferred income taxes(8,811)1,624 
Other1,036 (6,138)
Changes in operating assets and liabilities:
Trade receivables(12,723)(13,176)
Inventories16,179 (1,535)
Accounts payable345 (16,246)
Accrued liabilities and income taxes(28,042)(43,578)
Prepaid expenses and other assets4,210 6,639 
Net cash provided by operating activities57,150 53,407 
INVESTING ACTIVITIES  
Acquisitions of businesses, net of cash acquired (158,260)
Purchases of property, plant, and equipment(15,547)(25,665)
Net proceeds from sale of property, plant and equipment, and other7,064 737 
Net cash used in investing activities(8,483)(183,188)
FINANCING ACTIVITIES  
Repayments of other debts(678)(668)
Payments of term loan(1,875)(1,875)
Net proceeds related to stock-based award activities1,364 5,219 
Repurchases of common stock(16,131) 
Cash dividends paid(16,200)(14,880)
Net cash used in financing activities(33,520)(12,204)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(8,550)4,571 
Increase (decrease) in cash, cash equivalents, and restricted cash6,597 (137,414)
Cash, cash equivalents, and restricted cash at beginning of period557,123 564,939 
Cash, cash equivalents, and restricted cash at end of period$563,720 $427,525 
Supplementary Cash Flow Information
Reconciliation of cash and cash equivalents:
Cash and cash equivalents$562,153 $425,127 
Restricted cash included in prepaid expenses and other current assets$ $812 
Restricted cash included in other long-term assets$1,567 $1,586 
Cash paid during the period for interest$13,235 $11,027 
Capital expenditures, not yet paid$9,968 $7,523 
See accompanying Notes to Condensed Consolidated Financial Statements.
6

LITTELFUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
 Littelfuse, Inc. Shareholders’ Equity
(in thousands, except share and per share data)Common StockAddl. Paid in CapitalTreasury StockAccum. Other Comp. LossRetained EarningsNon-controlling InterestTotal
Balance at December 30, 2023$262 $1,012,325 $(259,263)$(55,817)$1,782,662 $312 $2,480,481 
Net income— — — — 48,452 — 48,452 
Other comprehensive loss, net of tax— — — (30,291)— — (30,291)
Stock-based compensation— 3,617 — — — — 3,617 
Non-controlling interest— — — — 2 (2) 
Withheld shares on restricted share units for withholding taxes— — (4)— — — (4)
Stock options exercised— 1,369 — — — — 1,369 
Repurchases of common stock— — (16,131)— — — (16,131)
Cash dividends paid ($0.65 per share)
— — — — (16,200)— (16,200)
Balance at March 30, 2024$262 $1,017,311 $(275,398)$(86,108)$1,814,916 $310 $2,471,293 


 Littelfuse, Inc. Shareholders’ Equity
(in thousands, except share and per share data)Common StockAddl. Paid in CapitalTreasury StockAccum. Other Comp. (Loss) IncomeRetained EarningsNon-controlling InterestTotal
Balance at December 31, 2022$261 $974,097 $(252,866)$(95,764)$1,585,466 $184 $2,211,378 
Net income— — — — 88,745 — 88,745 
Other comprehensive income, net of tax— — — 13,283 — — 13,283 
Stock-based compensation— 3,730 — — — — 3,730 
Non-controlling interest— — — — (66)66  
Withheld shares on restricted share units for withholding taxes— — (18)— — — (18)
Stock options exercised— 5,238 — — — — 5,238 
Cash dividends paid ($0.60 per share)
— — — — (14,880)— (14,880)
Balance at April 1, 2023$261 $983,065 $(252,884)$(82,481)$1,659,265 $250 $2,307,476 

See accompanying Notes to Condensed Consolidated Financial Statements.
7

Notes to Condensed Consolidated Financial Statements 
 
1. Summary of Significant Accounting Policies and Other Information
 
Nature of Operations 
 
Founded in 1927, Littelfuse is a diversified, industrial technology manufacturing company empowering a sustainable, connected, and safer world. Across more than 20 countries, and with approximately 16,000 global associates, the Company partners with customers to design and deliver innovative, reliable solutions. Serving over 100,000 end customers, the Company’s products are found in a variety of industrial, transportation and electronics end markets – everywhere, every day. 

Basis of Presentation 
 
The Company’s accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and disclosures normally included in the consolidated balance sheets, statements of net income and comprehensive income, statements of cash flows, and statements of stockholders' equity prepared in conformity with U.S. GAAP have been condensed or omitted as permitted by such rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. They have been prepared in accordance with accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023, which should be read in conjunction with the disclosures therein. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal, recurring nature. Operating results for interim periods are not necessarily indicative of annual operating results.
 
Revenue Recognition
  
Revenue Disaggregation
 
The following tables disaggregate the Company’s revenue by primary business units for the three months ended March 30, 2024 and April 1, 2023:
 Three Months Ended March 30, 2024
(in thousands)Electronics
Segment
Transportation
Segment
Industrial
Segment
 
Total
Electronics – Semiconductor$157,871 $ $ $157,871 
Electronics – Passive Products and Sensors133,234   133,234 
Commercial Vehicle Products 79,514  79,514 
Passenger Car Products 70,262  70,262 
Automotive Sensors 20,591  20,591 
Industrial Products  73,913 73,913 
Total$291,105 $170,367 $73,913 $535,385 

 Three Months Ended April 1, 2023
(in thousands)Electronics
Segment
Transportation
Segment
Industrial
Segment
 
Total
Electronics – Semiconductor$209,995 $ $ $209,995 
Electronics – Passive Products and Sensors148,598   148,598 
Commercial Vehicle Products 84,146  84,146 
Passenger Car Products 61,697  61,697 
Automotive Sensors 20,798  20,798 
Industrial Products  84,548 84,548 
Total$358,593 $166,641 $84,548 $609,782 

See Note 14, Segment Information, for net sales by segment and countries.
 

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Revenue Recognition
 
The Company recognizes revenue on product sales in the period in which the Company satisfies its performance obligation and control of the product is transferred to the customer. The Company’s sales arrangements with customers are predominately short term in nature and generally provide for transfer of control at the time of shipment as this is the point at which title and risk of loss of the product transfers to the customer. At the end of each period, for those shipments where title to the products and the risk of loss and rewards of ownership do not transfer until the product has been received by the customer, the Company adjusts revenues and cost of sales for the delay between the time that the products are shipped and when they are received by the customer. The amount of revenue recorded reflects the consideration to which the Company expects to be entitled in exchange for goods and may include adjustments for customer allowances, rebates and price adjustments. The Company’s distribution channels are primarily through direct sales and independent third-party distributors.
 
The Company has elected the practical expedient under Accounting Standards Codification ("ASC") 340-40-25-4 to expense commissions when incurred as the amortization period of the commission asset the Company would have otherwise recognized is less than one year.
 
Revenue and Billing
 
The Company generally accepts orders from customers through receipt of purchase orders or electronic data interchange based on written sales agreements and purchasing contracts. Contract pricing and selling agreement terms are based on market factors, costs, and competition. Pricing is often negotiated as an adjustment (premium or discount) from the Company’s published price lists. The customer is invoiced when the Company’s products are shipped to them in accordance with the terms of the sales agreement. As the Company’s standard payment terms are less than one year, the Company elected the practical expedient under ASC 606-10-32-18 to not assess whether a contract has a significant financing component. The Company also elected the practical expedient provided in ASC 606-10-25-18B to treat all product shipping and handling activities as fulfillment activities, and therefore recognize the gross revenue associated with the contract, inclusive of any shipping and handling revenue.
 
Ship and Debit Program
 
Some of the terms of the Company’s sales agreements and normal business conditions provide customers (distributors) the ability to receive price adjustments on products previously shipped and invoiced. This practice is common in the industry and is referred to as a “ship and debit” program. This program allows the distributor to debit the Company for the difference between the distributors’ contracted price and a lower price for specific transactions. Under certain circumstances (usually in a competitive situation or large volume opportunity), a distributor will request authorization for pricing allowances to reduce its price. When the Company approves such a reduction, the distributor is authorized to “debit” its account for the difference between the contracted price and the lower approved price. The Company establishes reserves for this program based on historical activity, distributor inventory levels and actual authorizations for the debit and recognizes these debits as a reduction of revenue.

Return to Stock 
 
The Company has a return to stock policy whereby certain customers, with prior authorization from the Company's management, can return previously purchased goods for full or partial credit. The Company establishes an estimated allowance for these returns based on historical activity. Sales revenue and cost of sales are reduced to anticipate estimated returns.
 
Volume Rebates
 
The Company offers volume based sales incentives to certain customers to encourage greater product sales. If customers achieve their specific quarterly or annual sales targets, they are entitled to rebates. The Company estimates the projected amount of rebates that will be achieved by the customer and recognizes this estimated cost as a reduction to revenue as products are sold.
 
Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash at March 30, 2024 and December 30, 2023 reported within the Condensed Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Condensed Consolidated Statement of Cash Flows.

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(in thousands)March 30, 2024December 30, 2023
Cash and cash equivalents$562,153 $555,513 
Restricted cash included in other long-term assets1,567 1,610 
Total cash, cash equivalents, and restricted cash$563,720 $557,123 

Recently Adopted Accounting Standards

In March 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("ASU")ASU No. 2023-01, "Leases (Topic 842): Common Control Arrangements". The standard requires that leasehold improvements associated with common control leases be: 1) Amortized by the lessee over the useful life of the leasehold improvements to the common control group (regardless of the lease term) as long as the lessee controls the use of the underlying asset (the leased asset) through a lease. However, if the lessor obtained the right to control the use of the underlying asset through a lease with another entity not within the same common control group, the amortization period may not exceed the amortization period of the common control group. 2) Accounted for as a transfer between entities under common control through an adjustment to equity (or net assets for not-for-profit entities) if, and when, the lessee no longer controls the use of the underlying asset. Additionally, those leasehold improvements are subject to the impairment guidance in Topic 360, Property, Plant, and Equipment. This standard is effective for fiscal years beginning after December 15, 2023 including interim periods within those fiscal years. The adoption of ASU 2023-01 did not have a material impact on the Company's Condensed Consolidated Financial Statements.

Recently Issued Accounting Standards

In March 2024, the Securities and Exchange Commission (SEC) issued a final rule that requires registrants to provide climate disclosures in annual reports and registration statements. The climate-related final rule requires disclosures in the footnotes to the financial statements, including: 1) specified financial statement effects of severe weather events and other natural conditions, 2) certain carbon offsets and renewable energy credits or certificates if used as a material component of a registrant's plans to achieve its disclosed climate-related targets or goals, 3) material impacts on financial estimates and assumptions in the financial statements if they would materially impacted by risks and uncertainties associated with severe weather events and other natural conditions, previously disclosed climate-related targets, and transition plans. The financial statement disclosure requirements are effective beginning with annual reports for the fiscal year beginning in calendar year 2025, for the Company as a large accelerated filer. These disclosures will be subject to existing audit requirement for financial statements. On April 4, 2024, the SEC chose to stay its climate disclosure rules pending judicial review. The adoption of this rule will increase the Company's disclosures in its Consolidated Financial Statements. The Company is currently evaluating and is in the process of performing its initial assessment of the potential impact on its Condensed Consolidated Financial Statements.

In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures". The amendments in this update provide more transparency about income tax information through improvements to the income tax disclosure primarily related to the income tax rate reconciliation and income taxes paid information. These requirements include: (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The other amendments in this update improve the effectiveness and comparability of disclosures by (3) adding disclosures of pretax income (or loss) and income tax expense (or benefit), and (4) removing disclosures that are no longer considered cost beneficial or relevant. The guidance is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. The adoption of this guidance will modify the Company's disclosures in its Condensed Consolidated Financial Statements.

In November 2023, the FASB issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures". The amendments in this update require additional detailed and enhanced information about reportable segments' expense, including significant segment expenses and other segment items that bridge segment revenue, significant expenses to segment profit or loss. The ASU also requires disclosure of the title and position of the Chief Operating Decision Maker (“CODM”) on annual basis as well as an explanation of how CODM uses the reported measures and other disclosures. The amendments in this update do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The adoption of this guidance will modify the Company's disclosures in its Condensed Consolidated Financial Statements.

In October 2023, the FASB issued ASU No. 2023-06, "Disclosure Improvements". The amendments in this update represent changes to clarify or improve the disclosure or presentation requirements of a variety of Topics in the ASC. The Company may be affected by one or more of those amendments. The amendments in this ASU should be applied prospectively and will not be
10

effective until June 30, 2027. The company is currently evaluating the potential effects of these amendments on its Condensed Consolidated Financial Statements.


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

Dortmund Fab

On June 28, 2023, the Company entered into a definitive purchase agreement to acquire a 200mm wafer fab located in Dortmund, Germany (“Dortmund Fab”) from Elmos Semiconductor SE. The acquisition of the Dortmund Fab is expected to close in early fiscal year 2025. The total purchase price for the Dortmund Fab is approximately 93 million Euro, of which 37.2 million Euro down payment (approximately $40.5 million) recorded in Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets was paid in the third quarter of 2023 after regulatory approvals and approximately 56 million Euro will be paid at closing. The transaction is not expected to have a material impact on the Company’s fiscal year 2024 financial results and will be reported in the Electronics-Semiconductor business within the Company’s Electronics segment.

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, including e-Mobility off-board 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 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 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 receivables3,359 
Inventories3,678 
Other current assets718 
Property, plant, and equipment1,328 
Intangible assets68,000 
Goodwill93,937 
Other long-term assets573 
Current liabilities(4,335)
Other long-term liabilities(8,998)
 $158,260 



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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.

During the three months ended April 1, 2023, the Company incurred approximately $1.4 million of legal and professional fees related to the Western Automation acquisition recognized as Selling, general, and administrative expenses. These costs were reflected as other non-segment costs.

Pro Forma Results

The following table summarizes, on an unaudited pro forma basis, the combined results of operations of the Company 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 Western Automation acquisition occurred as of January 2, 2022, or of future consolidated operating results.
 For the Three Months Ended
(in thousands, except per share amounts)April 1, 2023
Net sales$611,668 
Income before income taxes110,613 
Net income90,241 
Net income per share — basic3.64 
Net income per share — diluted3.60 

Pro forma results presented above primarily reflect the following adjustments:
 
 For the Three Months Ended
(in thousands)April 1, 2023
Amortization (a)$(479)
Transaction costs (b)1,397 
Income tax expense of above items(115)

(a) The amortization adjustment for the three months ended April 1, 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 three months ended April 1, 2023, and recognition of those fees during the three months ended April 2, 2022.



3. Inventories
 
The components of inventories at March 30, 2024 and December 30, 2023 are as follows:
 
(in thousands)March 30, 2024December 30, 2023
Raw materials$201,625 $201,984 
Work in process142,598 137,688 
Finished goods173,149 195,886 
Inventory reserves(61,237)(60,951)
Total$456,135 $474,607 
 

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4. Property, Plant, and Equipment
 
The components of net property, plant, and equipment at March 30, 2024 and December 30, 2023 are as follows:
 
(in thousands)March 30, 2024December 30, 2023
Land and land improvements$18,529 $22,212 
Building and building improvements196,292 202,764 
Machinery and equipment862,653 859,060 
Accumulated depreciation(598,039)(590,883)
Total$479,435 $493,153 

The Company recorded depreciation expense of $16.7 million and $17.6 million for the three months ended March 30, 2024 and April 1, 2023, respectively.


5. Goodwill and Other Intangible Assets
 
Changes in the carrying value of goodwill by segment for the three months ended March 30, 2024 are as follows:
 
(in thousands)ElectronicsTransportationIndustrialTotal
Net goodwill as of December 30, 2023
Gross goodwill as of December 30, 2023
$936,505 $237,115 $179,117 $1,352,737 
Accumulated impairment losses as of December 30, 2023
 (34,004)(8,735)(42,739)
Total936,505 203,111 170,382 1,309,998 
Changes during 2024:
Foreign currency translation adjustments(13,103)(2,003)(155)(15,261)
Net goodwill as of March 30, 2024
Gross goodwill as of March 30, 2024
923,402 234,620 178,761 1,336,783 
Accumulated impairment losses as of March 30, 2024
 (33,512)$(8,534)(42,046)
Total$923,402 $201,108 $170,227 $1,294,737 
The components of other intangible assets as of March 30, 2024 and December 30, 2023 are as follows:

As of March 30, 2024
(in thousands)Gross
Carrying
Value
 
Accumulated Amortization
 
Net Book
Value
Land use rights$17,298 $2,864 $14,434 
Patents, licenses, and software271,905 167,403 104,502 
Distribution network41,917 41,917  
Customer relationships, trademarks, and tradenames681,982 216,287 465,695 
Total$1,013,102 $428,471 $584,631 
 
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December 30, 2023
(in thousands)Gross
Carrying
Value
 
Accumulated
Amortization
 
Net Book
Value
Land use rights$17,621 $2,786 $14,835 
Patents, licenses, and software275,337 163,799 111,538 
Distribution network43,210 43,210  
Customer relationships, trademarks, and tradenames689,244 209,481 479,763 
Total$1,025,412 $419,276 $606,136 

During the three months ended March 30, 2024 and April 1, 2023, the Company recorded amortization expense of $15.8 million and $16.9 million, respectively.

Estimated annual amortization expense related to intangible assets with definite lives as of March 30, 2024 is as follows:
 
(in thousands)
Amount
Remainder of 2024$47,167 
202562,662 
202651,823 
202749,755 
202849,135 
2029 and thereafter324,089 
Total$584,631 
 
 
6. Accrued Liabilities
 
The components of accrued liabilities as of March 30, 2024 and December 30, 2023 are as follows:
 
(in thousands)March 30, 2024December 30, 2023
Employee-related liabilities$56,285 $72,635 
Current lease liability11,531 12,110 
Other non-income taxes7,828 7,855 
Other customer reserves5,399 5,998 
Professional services5,229 5,282 
Interest3,191 6,387 
Restructuring liability2,081 2,141 
Current benefit liability1,482 1,482 
Deferred revenue1,400 2,198 
Other29,862 33,126 
Total$124,288 $149,214 

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

7. Restructuring, Impairment, and Other Charges

The Company recorded restructuring, impairment, and other charges for the three months ended March 30, 2024 and April 1, 2023 as follows:
14

Three Months Ended March 30, 2024
(in thousands)ElectronicsTransportationIndustrialTotal
Employee terminations$544 $1,190 $435 $2,169 
Other restructuring charges52 78 5 135 
Total restructuring charges596 1,268 440 2,304 
Impairment  933  933 
   Total$596 $2,201 $440 $3,237 

 Three Months Ended April 1, 2023
(in thousands)ElectronicsTransportationIndustrialTotal
Employee terminations$672 $582 $317 $1,571 
Other restructuring charges7 272  279 
   Total$679 $854 $317 $1,850 

2024
For the three months ended March 30, 2024, the Company recorded total restructuring charges of $2.3 million, primarily for employee termination costs. These charges primarily related to the reorganization of certain manufacturing, selling and administrative functions within the Transportation segment’s commercial vehicle business, and the reorganization of certain selling and administrative functions within the Electronics and Industrial segments. 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.

2023
For the three months ended April 1, 2023, the Company recorded total restructuring charges of $1.9 million, primarily for employee termination costs. These charges primarily related to the reorganization of certain manufacturing, selling and administrative functions within the Transportation segment’s commercial vehicle business and the reorganization of certain selling and administrative functions within the Electronics segment due to the C&K acquisition.

The restructuring reserves as of both March 30, 2024 and December 30, 2023 is $2.1 million. The restructuring liability is included within accrued liabilities in the Condensed Consolidated Balance Sheets. The Company anticipates the remaining payments associated with employee terminations will primarily be completed in the fourth quarter fiscal year 2024.

8. Debt
 
The carrying amounts of debt at March 30, 2024 and December 30, 2023 are as follows:
 
(in thousands)March 30, 2024December 30, 2023
Revolving credit facility$100,000 $100,000 
Term loan286,875 288,750 
Euro Senior Notes, Series B due 2028102,458 105,246 
U.S. Senior Notes, Series B due 2027100,000 100,000 
U.S. Senior Notes, Series A due 202550,000 50,000 
U.S. Senior Notes, Series B due 2030125,000 125,000 
U.S. Senior Notes, due 2032100,000 100,000 
Other5,857 6,709 
Unamortized debt issuance costs(3,517)(3,770)
Total debt866,673 871,935 
Less: Current maturities(65,824)(14,020)
Total long-term debt$800,849 $857,915 
 
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Revolving Credit Facility and Term Loan

On June 30, 2022, the Company amended and restated its Credit Agreement, dated as of April 3, 2020 (the “Credit Agreement”) to effect certain changes, including, among other changes: (i) adding a $300 million unsecured term loan credit facility; (ii) making certain financial and non-financial covenants less restrictive on the Company and its subsidiaries; (iii) replacing LIBOR-based interest rate benchmarks and modifying performance-based interest rate margins; and (iv) extending the maturity date to June 30, 2027 (the “Maturity Date”). Pursuant to the Credit Agreement, the Company may, from time to time, increase the size of the revolving credit facility or enter into one or more tranches of term loans in minimum increments of $25 million if there is no event of default and the Company is in compliance with certain financial covenants.

Loans made under the available credit facility pursuant to the Credit Agreement ("the Credit Facility") bear interest at the Company’s option, at either Secured Overnight Financing Rate ("SOFR"), fixed for interest periods of one, two, three or six-month periods, plus 1.00% to 1.75%, plus a SOFR adjustment of 0.10% or at the bank’s Base Rate, as defined in the Credit Agreement, plus % to 0.75%, based upon the Company’s Consolidated Leverage Ratio, as defined in the Credit Agreement. The Company is also required to pay commitment fees on unused portions of the Credit Facility ranging from 0.10% to 0.175%, based on the Consolidated Leverage Ratio, as defined in the Credit Agreement. The Credit Agreement includes representations, covenants and events of default that are customary for financing transactions of this nature.

Under the Credit Agreement, revolving loans may be borrowed, repaid and reborrowed until the Maturity Date, at which time all amounts borrowed must be repaid. The Company borrowed $300.0 million under a term loan on June 30, 2022. The principal balance of the term loans must be repaid in quarterly installments on the last day of each calendar quarter in the amount of $1.9 million commencing September 30, 2022, through June 30, 2024, and in the amount of $3.8 million commencing September 30, 2024, through March 31, 2027, with the remaining outstanding principal balance payable in full on the Maturity Date. Accrued interest on the loans is payable in arrears on each interest payment date applicable thereto and at such other times as may be specified in the Credit Agreement. Subject to certain conditions, (i) the Company may terminate or reduce the Aggregate Revolving Commitments, as defined in the Credit Agreement, in whole or in part, and (ii) the Company may prepay the revolving loans or the term loans at any time, without premium or penalty. During the three months ended March 30, 2024, the Company made payments of $1.9 million on its term loan. The revolving loan and term loan balance under the Credit Facility was $100.0 million and $286.9 million, respectively, as of March 30, 2024.

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 March 30, 2024, the effective interest rate on unhedged portion of the outstanding borrowings under the credit facility was 6.68%, and 4.13% on the hedged portion.

As of March 30, 2024, the Company had $0.2 million outstanding letters of credit under the Credit Facility and had $599.8 million of borrowing capacity available under the revolving credit facility. As of March 30, 2024, 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 fourth quarter of 2023, the Company paid off €117 million of Euro Senior Notes, Series A due on December 8, 2023. Interest on the Euro Senior Notes due 2028 is payable semiannually on June 8 and December 8, commencing June 8, 2017.
 
On December 8, 2016, the Company entered into a Note Purchase Agreement, pursuant to which the Company issued and sold $125 million aggregate principal amount of senior notes in two series. On February 15, 2017, $25 million in aggregate principal amount of 3.03% Senior Notes, Series A, due February 15, 2022 (“U.S. Senior Notes, Series A due 2022”), and $100 million in aggregate principal amount of 3.74% Senior Notes, Series B, due February 15, 2027 (“U.S. Senior Notes, Series B due 2027”) were funded. During the first quarter of 2022, the Company paid off $25 million of U.S. Senior Notes, Series A due on February 15, 2022. Interest on the U.S. Senior Notes due 2027 is payable semiannually on February 15 and August 15, commencing August 15, 2017.
 
16

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. Interest on the U.S. Senior Notes due 2025 and 2030 is payable semiannually on February 15 and August 15, commencing on August 15, 2018.

On May 18, 2022, the above note purchase agreements were amended to, among other things, update certain terms, including financial covenants to be consistent with the terms of the restated Credit Agreement and the 2022 Purchase Agreement, as defined below.

On May 18, 2022, the Company entered into a Note Purchase Agreement (“2022 Purchase Agreement”) pursuant to which the Company issued and funded on July 18, 2022 $100 million in aggregate principal amount of 4.33% Senior Notes, due June 30, 2032 (“U.S. Senior Notes, due 2032”) (together with the U.S. Senior Notes due 2025 and 2030, the Euro Senior Notes and the U.S. Senior Notes due 2022 and 2027, the “Senior Notes”). Interest on the U.S. Senior Notes due 2032 is payable semiannually on June 30 and December 30, commencing on December 30, 2022.

The Senior Notes have not been registered under the Securities Act, or applicable state securities laws. The Senior Notes are general unsecured senior obligations and rank equal in right of payment with all existing and future unsecured unsubordinated indebtedness of the Company.
 
The Senior Notes are subject to certain customary covenants, including limitations on the Company’s ability, with certain exceptions, to engage in mergers, consolidations, asset sales and transactions with affiliates, to engage in any business that would substantially change the general business of the Company, and to incur liens. In addition, the Company is required to satisfy certain financial covenants and tests relating to, among other matters, interest coverage and leverage. At March 30, 2024, the Company was in compliance with all covenants under the Senior Notes.
 
The Company may redeem the Senior Notes upon the satisfaction of certain conditions and the payment of a make-whole amount to noteholders and are required to offer to repurchase the Senior Notes at par following certain events, including a change of control.

Interest paid on all Company debt was $13.2 million and $11.0 million for the three months ended March 30, 2024 and April 1, 2023, respectively.

9. Fair Value of Assets and Liabilities
 
For assets and liabilities measured at fair value on a recurring and nonrecurring basis, a three-level hierarchy of measurements based upon observable and unobservable inputs is used to arrive at fair value. Observable inputs are developed based on market data obtained from independent sources, while unobservable inputs reflect the Company’s assumptions about valuation based on the best information available in the circumstances. Depending on the inputs, the Company classifies each fair value measurement as follows:
 
Level 1—Valuations based on unadjusted quoted prices for identical assets or liabilities in active markets;
 
Level 2—Valuations based upon quoted prices for similar instruments, prices for identical or similar instruments in markets that are not active, or model-derived valuations, all of whose significant inputs are observable, and
 
Level 3—Valuations based upon one or more significant unobservable inputs
.
There were no transfers in or out of Level 1, Level 2 and Level 3 during the period.

Following is a description of the valuation methodologies used for instruments measured at fair value and their classification in the valuation hierarchy.
 
Cash Equivalents
 
Cash equivalents primarily consist of money market funds, certificates of deposit, and short-term time deposits, which are held with institutions with sound credit ratings and are highly liquid. The Company classified cash equivalents as Level 1 and are valued at cost which approximates fair value.
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Investments in Equity Securities

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

Derivatives Designated as Hedging Instruments

On May 12, 2022, the Company entered into an interest rate swap agreement to manage interest rate risk exposure, effectively converting the interest rate on the Company's SOFR based floating-rate loans to a fixed-rate. The interest rate swap, with a notional value of $200 million, was designated as a cash flow hedge against the variability of cash flows associated with the Company's SOFR based loans scheduled to mature on June 30, 2027. The fair value of the interest rate swap was valued using an independent third-party valuation model. Pursuant to this model, changes in fair value of derivatives that are designated as cash flow hedges are deferred in accumulated other comprehensive loss until the underlying transactions are recognized in earnings. The primary inputs into the valuation of the interest rate swap are interest yield curves, interest rate volatility, credit risk, credit spreads and other market information. The interest rate swap is classified within Level 2 of the fair value hierarchy, since all significant inputs are corroborated by market observable data.

The use of derivatives creates exposure to credit risk relating to potential losses that could be recognized in the event that the counterparties to these instruments fail to perform their obligations under the contracts. The Company seeks to minimize this risk by limiting its counterparties to major financial institutions with acceptable credit ratings and monitoring the total value of positions with individual counterparties. In the event of a default by one of its counterparties, the Company may not receive payments provided for under the terms of its derivatives.

Derivatives Not Designated as Hedging Instruments

On July 14, 2022, the Company entered into a foreign currency exchange forward contract to mitigate the currency fluctuation risk between the Euro and U.S. dollar on its Euro denominated Senior Notes, Series A due 2023. The notional value of the forward contract at July 14, 2022 was €117.0 million and expired on December 7, 2023 with the final settlement value of $6.3 million which the Company used to convert USD to Euro to pay down the €117.0 million of Euro Senior Notes, Series A due 2023. The foreign currency contract was not designated as a hedge instrument and was marked to market on a monthly basis. As a result, changes in fair value during 2023 were reported in Foreign exchange gain in the Condensed Consolidated Statements of Net Income. The fair value of the foreign currency forward contract was valued using market exchange rates by a third party and classified as a Level 2 input under the fair value hierarchy.

As of March 30, 2024 and December 30, 2023, the fair values of the Company's derivative financial instrument and their classifications on the Condensed Consolidated Balance Sheets were as follows:


(in thousands)
Condensed Consolidated Balance Sheet ClassificationMarch 30, 2024December 30, 2023
Derivatives designated as hedging instruments
Interest rate swap agreement:
Designated as cash flow hedgePrepaid expenses and other current assets$3,952 $3,712 
Other long-term assets$4,434 $2,140 

The pre-tax gains recognized on derivative financial instruments in the Condensed Consolidated Statements of Net Income for the three months ended March 30, 2024 and April 1, 2023 were as follows:
Three Months Ended
(in thousands)Classification of Gain Recognized in the Condensed Consolidated Statements of Net IncomeMarch 30, 2024April 1, 2023
Derivatives designated as cash flow hedges
Interest rate swap agreementInterest expense$(1,280)$(975)
Derivatives not designated as hedging instruments
Foreign exchange forward contractForeign exchange gain$ $(819)
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The pre-tax (gains) recognized on derivative financial instruments in the Condensed Consolidated Statements of Comprehensive Income for the three months ended March 30, 2024 and April 1, 2023 was as follows:
 Three Months Ended
(in thousands)March 30, 2024April 1, 2023
Derivatives designated as cash flow hedges
Interest rate swap agreement$(2,534)$(5,366)

The pre-tax gain of $4.2 million from accumulated other comprehensive loss to earnings is expected to be recognized during the next twelve months.

Mutual Funds
 
The Company has a non-qualified Supplemental Retirement and Savings Plan which provides additional retirement benefits for certain management employees and named executive officers by allowing participants to defer a portion of their annual compensation. The Company maintains accounts for participants through which participants make investment elections. The marketable securities are classified as Level 1 under the fair value hierarchy as they are maintained in mutual funds with readily determinable fair value and recorded in Other long-term assets.
 
There were no changes during the quarter ended March 30, 2024 to the Company’s valuation techniques used to measure asset and liability fair values on a recurring basis. As of March 30, 2024 and December 30, 2023, the Company did not hold any non-financial assets or liabilities that are required to be measured at fair value on a recurring basis.

The following table presents assets measured at fair value by classification within the fair value hierarchy as of March 30, 2024:
 
 Fair Value Measurements Using 
(in thousands)Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Cash equivalents$452,453 $ $ $452,453 
Investments in equity securities10,178   10,178 
Mutual funds21,509   21,509 
   Total $484,140 $ $ $484,140 


The following table presents assets measured at fair value by classification within the fair value hierarchy as of December 30, 2023: 
 Fair Value Measurements Using 
(in thousands)Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Cash equivalents$415,788 $ $ $415,788 
Investments in equity securities10,832   10,832 
Mutual funds20,148   20,148 
   Total$446,768 $ $ $446,768 

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In addition to the methods and assumptions used for the financial instruments recorded at fair value as discussed above, the following methods and assumptions are used to estimate the fair value of other financial instruments that are not marked to market on a recurring basis. The Company’s other financial instruments include cash and cash equivalents, short-term investments, accounts receivable and its long-term debt. Due to their short-term maturity, the carrying amounts of cash and cash equivalents, short-term investments and accounts receivable approximate their fair values. The Company’s revolving and term loan debt facilities' fair values approximate book value at March 30, 2024 and December 30, 2023, as the rates on these borrowings are variable in nature.

The carrying value and estimated fair values of the Company’s Euro Senior Notes, Series A and Series B and USD Senior Notes, Series A and Series B, as of March 30, 2024 and December 30, 2023 were as follows:

 March 30, 2024December 30, 2023
(in thousands)Carrying
Value
Estimated
Fair Value
Carrying
Value
Estimated
Fair Value
Euro Senior Notes, Series B due 2028$102,458 $93,470 $105,246 $96,532 
USD Senior Notes, Series B due 2027100,000 95,654 100,000 96,127 
USD Senior Notes, Series A due 202550,000 49,203 50,000 49,070 
USD Senior Notes, Series B due 2030125,000 114,269 125,000 115,687 
USD Senior Notes, due 2032100,000 91,365 100,000 93,228 

10. Benefit Plans
 
The Company has Company-sponsored and mandatory defined benefit pension plans covering employees in the United Kingdom ("U.K."), Germany, the Philippines, China, Japan, Mexico, Italy and France. The amount of the retirement benefits provided under the plans is generally based on years of service and final average pay.
 
The Company recognizes interest cost, expected return on plan assets, and amortization of prior service, net within Other income, net in the Condensed Consolidated Statements of Net Income. The components of net periodic benefit cost for the three months ended March 30, 2024 and April 1, 2023 were as follows: 
 
 For the Three Months Ended
(in thousands)March 30, 2024April 1, 2023
Components of net periodic benefit cost:  
Service cost$795 $692 
Interest cost995 937 
Expected return on plan assets(518)(469)
Amortization of prior service and net actuarial loss46 11 
Net periodic benefit cost$1,318 $1,171 

The Company expects to make approximately $2.2 million of contributions to the plans and pay $2.1 million of benefits directly in 2024.

The Company also sponsors certain post-employment plans in foreign countries and other statutory benefit plans. The Company recorded expense of $0.7 million and $0.4 million for the three months ended March 30, 2024 and April 1, 2023, respectively, in Cost of Sales and Other income, net within the Condensed Consolidated Statements of Net Income. The pre-tax (gains) losses amount recognized in other comprehensive income (loss) as components of net periodic benefit costs for these plans were $0.3 million and nominal for the three months ended March 30, 2024 and April 1, 2023, respectively.

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11. Other Comprehensive Income (Loss)

Changes in other comprehensive income (loss) by component were as follows:
(in thousands)Three Months Ended
March 30, 2024
Three Months Ended
April 1, 2023
Pre-taxTaxNet of TaxPre-taxTaxNet of Tax
Defined benefit pension plan and other adjustments$360 $(16)$344 $24 $(18)$6 
Cash flow hedge2,534 (608)1,926 (3,313)795 (2,518)
Foreign currency translation adjustments (a)(33,170)609 (32,561)16,068 (273)15,795 
Total change in other comprehensive (loss) income$(30,276)$(15)$(30,291)$12,779 $504 $13,283 
(a) The tax shown above within the foreign currency translation adjustments is the U.S. tax associated with the foreign currency translation adjustments of earnings of non-U.S. subsidiaries which have been previously taxed in the U.S. and are not permanently reinvested.

The following tables set forth the changes in accumulated other comprehensive loss by component for the three months ended March 30, 2024 and April 1, 2023:
 
(in thousands)Defined benefit pension plan and other adjustmentsCash flow hedgeForeign currency
translation adjustment
Accumulated other
comprehensive loss
Balance at December 30, 2023$(7,613)$4,448 $(52,652)$(55,817)
Activity in the period344 1,926 (32,561)(30,291)
Balance at March 30, 2024$(7,269)$6,374 $(85,213)$(86,108)
(in thousands)Defined benefit pension plan and other adjustmentsCash flow hedgeForeign currency translation adjustmentAccumulated other comprehensive loss
Balance at December 31, 2022$(2,193)$6,596 $(100,167)$(95,764)
Activity in the period6 (2,518)15,795 13,283 
Balance at April 1, 2023$(2,187)$4,078 $(84,372)$(82,481)

Amounts reclassified from accumulated other comprehensive loss to earnings for the three months ended March 30, 2024 and April 1, 2023 were as follows:
 Three Months Ended
(in thousands)March 30, 2024April 1, 2023
Pension and postemployment plans:
Amortization of prior service and net actuarial loss (gain)$356 $(11)

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


12. Income Taxes

The effective tax rate for the three months ended March 30, 2024 was 13.0%, compared to the effective tax rate for the three months ended April 1, 2023 of 18.5%. The effective tax rate for the first quarter of 2024 is lower than the effective tax rate for the comparable 2023 period primarily due to the lapse in the statute of limitations for previously unrecognized tax benefits. The effective tax rate for 2023 is lower than the statutory tax rate primarily due to income earned in lower tax jurisdictions, and the effective tax rate for 2024 is lower than the statutory tax rate primarily due to the lapse in the statute of limitations for previously unrecognized tax benefits.

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13. Earnings Per Share
 
The following table sets forth the computation of basic and diluted earnings per share: 
 Three Months Ended
(in thousands, except per share amounts)March 30, 2024April 1, 2023
Numerator:
Net income as reported$48,452 $88,745 
Denominator:
Weighted average shares outstanding
Basic24,911 24,782 
Effect of dilutive securities213 280 
Diluted25,124 25,062 
Earnings Per Share:
Basic earnings per share$1.95 $3.58