●

Sales for the first quarter of 2016 were $219.4 million, with growth of 4%. Excluding currency effects, sales increased 6% due to continued growth in the automotive and industrial segments.

●

GAAP earnings for the first quarter of 2016 were $0.85 per diluted share. This included $13.0 million of special charges primarily related to transaction and integration planning costs for the acquisition of the circuit protection device business (PolySwitch) from TE Connectivity, and non-operating foreign exchange losses. Excluding these special items, adjusted earnings for the first quarter of 2016 were $1.38 per diluted share, representing a 28% increase.

●

Highlights by segment included:

o

Electronics sales declined about 1% (increased nearly 1% excluding foreign currency effects) as semiconductor sales declined, partially offset by higher sensor sales.

o

Automotive sales increased 9% (11% excluding foreign currency effects) reflecting strong growth in Asia and Europe, and globally across the automotive sensor business.

o

Industrial sales increased 7% (9% excluding foreign currency effects) due to strong growth in the fuse business and growth in custom products.

●

The electronics book-to-bill ratio for the first quarter of 2016 was 1.05.

●

Cash provided by operating activities was $9.5 million for the first quarter of 2016 compared to $23.2 million for the first quarter of 2015, primarily driven by integration costs related to the PolySwitch business and the quarter calendarization which impacted receivable collections in the first quarter.

●

Capital expenditures for the first quarter of 2016 decreased to $9.1 million compared to $12.3 million in the prior year. 2016 also included $1.0 million of capital expenditures relating to integration activities for the PolySwitch acquisition.

●

As previously announced, the company completed the acquisition of the PolySwitch business of TE Connectivity Ltd. on March 25, 2016 for $350 million. The company’s first quarter results include the balance sheet from the PolySwitch business but do not include any income statement activity of the business.

●

On April 4, 2016, the company announced the acquisition of Menber’s S.p.A., an Italian-based designer and manufacturer of manual and electrical battery switches and trailer connectors for commercial vehicles. Menber’s had sales of approximately $23 million (€21 million) in 2015.

●

Total sales for the second quarter of 2016 are expected to be in the range of $265 million to $277 million.

o

Sales of the PolySwitch business are expected to be in the range of $35 to $37 million, reflecting certain unfavorable market trends, and one-time distributor inventory rebalancing.

●

Total earnings for the second quarter of 2016 are expected to be in the range of $1.35 to $1.49 per diluted share, excluding special items.

o

Earnings for the core business are expected to be in the range of $1.48 to $1.62 per diluted share, excluding special items, which reflects growth of 17% at the midpoint.

o

Excluding amortization expense, earnings per diluted share for the PolySwitch business are expected to be approximately break-even, excluding special items. PolySwitch amortization expense is estimated at $0.13 for the quarter.

●

The 2016 full year tax rate is expected to be approximately 22% for the company.

●

Capital expenditures for the full year 2016 are expected to be in the range of $40 to $45 million for the core business. In addition, capital expenditures for the PolySwitch business and related integration activities are expected to be between $10 and $12 million for 2016.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995.

The statements in this press release that are not historical facts are intended to constitute "forward-looking statements" entitled to the safe-harbor provisions of the PSLRA. These statements may involve risks and uncertainties, including, but not limited to, risks relating to product demand and market acceptance, economic conditions, the impact of competitive products and pricing, product quality problems or product recalls, capacity and supply difficulties or constraints, coal mining exposures reserves, failure of an indemnification for environmental liability, exchange rate fluctuations, commodity price fluctuations, the effect of the company's accounting policies, labor disputes, restructuring costs in excess of expectations, pension plan asset returns less than assumed, integration of acquisitions and other risks which may be detailed in the company's other Securities and Exchange Commission filings. Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, actual results and outcomes may differ materially from those indicated or implied in the forward-looking statements. This release should be read in conjunction with information provided in the financial statements appearing in the company's Annual Report on Form 10-K for the year ended January 2, 2016. For a further discussion of the risk factors of the company, please see Item 1A. "Risk Factors" to the company's Annual Report on Form 10-K for the year ended January 2, 2016.

First Quarter

2016

2015

% Change

Net Sales

Electronics

Automotive

Industrial

Total net sales

First Quarter

2016

2015

% Change

Operating Income/(Expense)

Electronics

Automotive

Industrial

Other ⁽¹⁾

Total operating income

Interest expense

Foreign exchange loss (gain)

Other (income) expense, net

Income before taxes

First Quarter

2016

2015

% Change

Segment Amortization Expense

Electronics

Automotive

Industrial

Other⁽²⁾

na

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

Short-term investments

Accounts receivable, less allowances

Inventories

Prepaid expenses and other current assets

Total current assets

Property, plant and equipment:

Land

Buildings

Equipment

Accumulated depreciation

Net property, plant and equipment

Intangible assets, net of amortization:

Patents, licenses and software

Distribution network

Customer lists, trademarks and tradenames

Goodwill

Investments

Deferred income taxes

Other assets

Total assets

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

Accrued payroll

Accrued expenses

Accrued severance

Accrued income taxes

Consideration payable

Current portion of long-term debt

Total current liabilities

Long-term debt, less current portion

Deferred income taxes

Accrued post-retirement benefits

Other long-term liabilities

Total equity

Total liabilities and equity

Net sales

Cost of sales

Gross profit

Selling, general and administrative expenses

Research and development expenses

Amortization of intangibles

Operating income

Interest expense

Foreign exchange loss

Other (income) expense, net

Income before income taxes

Income taxes

Net income

Net income per share:

Basic

Diluted

Weighted average shares and equivalent shares outstanding:

Basic

Diluted

Comprehensive income

OPERATING ACTIVITIES:

Net income

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

Amortization of intangibles

Stock-based compensation

Impairment of assets

Excess tax benefit on stock-based compensation

Loss on sale of assets

Changes in operating assets and liabilities:

Accounts receivable

Inventories

Accounts payable

Accrued expenses (including post retirement)

Accrued payroll and severance

Accrued taxes

Prepaid expenses and other

Net cash provided by operating activities

INVESTING ACTIVITIES:

Acquisition of businesses, net of cash acquired

Purchases of property, plant and equipment

Proceeds from sale of assets

Net cash used in investing activities

FINANCING ACTIVITIES:

Proceeds of revolving credit facility

Proceeds of term loan

Payments of revolving credit facility

Payments of term loan

Debt issuance costs paid

Cash dividends paid

Proceeds from exercise of stock options

Excess tax benefit on stock-based compensation

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash and cash equivalents

Decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

GAAP EPS Reconciliation

Q1-16

Q1-15

GAAP diluted EPS

EPS impact of special items (below)

Adjusted diluted EPS

Year-over-year adjusted EPS growth

Special charges (income)/expense

Reed switch manufacturing transfer costs

Restructuring

Acquisition expenses

Pension wind-up

Impairment and severance charges

Adjustment to Operating income

Foreign exchange loss/(gain)

Adjustment to pre-tax income

Total EPS impact

Operating margin / EBITDA reconciliation

Q1-16

Q1-15

Net sales

GAAP operating income

Add back special operating items

Adjusted operating income

Adjusted operating margin

Add back amortization

Add back depreciation

Adjusted EBITDA

Adjusted EBITDA margin

Year-over-year adjusted EBITDA growth