Good day, everyone. And welcome to the Littelfuse Fourth Quarter 2018 Earnings Conference Call. Today’s call is being recorded. At this time, I will turn the call over to Head of Investor Relations, Trisha Tuntland. Please go ahead, ma’am.

Good morning. And welcome to the Littelfuse fourth quarter 2018 earnings conference call. With me today are Dave Heinzmann, President and CEO; and Meenal Sethna, Executive Vice President and CFO. This morning, we reported results for our fourth quarter and fiscal year 2018, and a copy of our earnings release is available in the Investor Relations section of our website. A webcast of today’s conference call will also be available on our website. Our discussion today will include forward-looking statements. These forward-looking statements may involve significant risks and uncertainties. Please review today’s press release and our Form 10-K and 10-Q for more detail about important risks that could cause actual results to differ materially from our expectations. We assume no obligation to update any of this forward-looking information. Also, our remarks today refer to non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measure is provided in our earnings release available in the Investor Relations section of our website. I will now turn the call over to Dave.

Thank you, Trisha. Good morning and thanks for joining us today. Littelfuse had an exceptional year in 2018, despite softening demand in the fourth quarter. Fourth quarter revenue of $402 million was up 32% compared to last year. Organic revenue growth for the quarter was up 4%. Full year 2018 revenue grew 41% with organic sales growth of 8% and adjusted EPS growth of 22%. For the year, we generated nearly $260 million in free cash flow, a record for the company and returned 40% of our free cash to shareholders through dividends and share repurchases. These results reflect the strong execution of our strategy. During the year, we made significant progress integrating the company’s largest acquisition, IXYS Corporation and are seeing the benefits of our expanded portfolio and combined global team. Across our segments, we captured many strategic wins in our target end markets. We remain confident that our leading technologies, global footprint, close customer relationships and talented associates position us for continued content grow and access to the markets we serve. Before we go into further detail on the results, we want to talk about our growth strategy and the progress we have made. At our Analyst Day two years ago, we introduced our updated five-year strategy centered on the long-term fundamental growth drivers of a safer, greener and more connected world. These global trends are driving the increasing electronification and electrification of everything from Internet-connected devices to factory automation, full electric vehicles to more sophisticated appliances. These trends will continue to increase content opportunities across the end markets we serve. Continued growth in all these areas leverages our product portfolio centered around circuit protection, power control and sensing. These long-term secular growth trends are key enablers for the goals and long-term guidance we communicated in 2016. Our…

Thanks, Dave, and good morning, everyone. Let me start with some highlights from our fourth quarter of 2018. We finished the year with sales in the fourth quarter of $402 million, up 32% on a reported basis over last year and up 4% organically. Sales growth was below our guidance due to weaker end market demand across both our Electronics and Automotive segments. Within our legacy Electronics businesses, we saw softer than expected demand patterns across China, as well as in electronics products we sell into automotive end market. We saw similar declines in demand across our IXYS business which grew 4% over last year in the quarter. Across Automotive, while market forecast had estimated a 1% decline in global auto production, auto builds were down 4% and notably down 13% in China. This had an unfavorable impact on our expected automotive sales for the quarter. Foreign exchange also reduced our sales growth to 1% over last year due to the weaker euro and Chinese RMB. For the year, sales finished at $1.72 billion with a reported growth of 41%. Organic sales growth was 8%, finishing ahead of our target business model of 5% to 7% organic growth. GAAP operating margins finished at 12.8% while our adjusted operating margins were 15.1% for the quarter. The lower sales volume and associated expense leverage unfavorably impacted our margins. During the quarter, we also incurred some higher than expected inventory obsolescence charges related to our IXYS business. For the year, GAAP operating margins were 13.1%. Adjusted operating margins were 18.3%, well within our targeted margin range of 17% to 19% and are a testament to our continued focus on profitable growth. Fourth quarter GAAP diluted EPS was $1.29. GAAP EPS included $15 million in after-tax charges mainly due to purchase accounting and integration…

Thanks, Meenal. We will start with Electronics segment. In the fourth quarter, sales of $264 million were up 62% of 7% organic growth. Despite some softness in the fourth quarter, full-year sales were $1.1 billion, up 70% versus last year led by the addition of IXYS. Organic growth was 11% for the year. As we mentioned on our call at the end of October, we started seeing slowing order rates for passives earlier in the fourth quarter. Softness progressed through December as distributors began to rebalance their inventories in response to flattening demand. Our electronics book-to-bill exited the fourth quarter -- exiting the fourth quarter was below 1.0. We carefully monitor distributor point-of-sales data and inventory levels. As we exited the fourth quarter, channel inventories were running higher than ideal, which is typically about 11 weeks to 14 weeks and we continue to see softening and broad line distributor demand where the book-to-bill for our products is just below 1.0. Looking ahead for electronics, we expect some continued softness in the first half of the year because of slowing Chinese economic growth, as well as elevated inventory levels. Turning to the new business front, in our Electronics segment, we continue to see strong broad-based design win activity from appliances, automotive electronics building automation to data center, cloud infrastructure, LED lighting and transportation. We secured new design wins throughout the year as we continue to grow our Electronics content across our Protect, Control and Sense product portfolio. The addition of the IXYS portfolio and leveraging their presence with industrial customers provided great growth in 2018 and will continue to present new opportunities for the future. From heavy industrial to transportation and medical devices, we secured design wins across a wide range of applications. January marks the one year anniversary of the…

Thanks, Dave. Let’s move on to our guidance. As Dave mentioned, we see the muted demand environment continuing into the beginning of 2019, mainly impacting our Electronics and Automotive segments. Across Electronics, our book-to-bill continues to run below 1.0 with impacts in the global trade environment and slower China economy. We also expect the continuation of the inventory rebalancing by our channel partners, largely across North America and Asia. Given current indications, we expect this to continue through the first half of the year. The lower global auto demand has slowed growth across all products we sell into the Automotive end market, while external market sources point to a slight car production growth for 2019, our assumption is a 2% to 4% global auto production decline for the year with a greater decline in the first half of the year. Given these factors, we anticipate sales for the first quarter of 2019 of $404 million to $416 million. The midpoint of the guidance reflects the 2% decline in reported sales and a 4% organic sales decline versus the prior year. We expect first quarter adjusted earnings per diluted share to be in the range of $1.86 to $2. The EPS guidance assumes an adjusted effective tax rate in the range of 19% to 21% for the quarter. On a year-over-year basis, we have a $0.10 drag on EPS from several items below operating income due to a mark-to-market benefit in the first quarter of last year, a higher tax rate and share dilution versus this quarter last year. We are currently estimating $25 million in diluted shares for the first quarter, which incorporates the shares that we bought back to-date. A few additional comments on our first quarter forecast and beyond, during 2019 we are undertaking several manufacturing and supply…

Thanks, Meenal. In summary, 2018 was a great year and we made significant progress across our business segments. We continue to execute our strategy. Looking ahead with today’s volatile macro environment, we expect to see continued softness in the first half of 2019. However, the fundamentals of growth in our business remain sound. We remain confident that the continued momentum towards a safer, greener and more connected world will provide increased content opportunities across our portfolio. On that note, I just wanted to thank our Littelfuse associates around the globe for their commitment in 2018 and I look forward to their contributions in 2019 and beyond, as we create additional value for our customers and shareholders. With that, we will open the call for questions.

Thank you. [Operator Instructions] And our first question comes from Christopher Glynn from Oppenheimer. Your line is now open.

Thanks.

Good morning, Chris.

Good morning. Hi. Just talking about the Electronics profitability, with the IXYS integration, it sounds like a small deferral in synergies, but as you do make some progress, would you expect the Electronics margins to expand a little bit for the full year 2019 or otherwise complexion if not a specific answer?

So I would say it depends on the comparison date you are looking at. I’d say, overall if I think in general how I think about 2019 Electronics margins, I would say, yes, we will continue to see improvement due to IXYS synergies, but at the same time, I have been mentioning for the past couple of years that we have had some positive tailwinds coming through in our Electronics margins that we think have been a little more transitory. One being around currencies and I just mentioned that we think currencies will be more neutral with where we sit today, and secondly, as the market settles down, we’d seen much less price erosion than we have typically seen in the past few years. So I’d say, net-net, when you factor all those in, I wouldn’t expect to see any significant increase in year-over-year margins versus where we have been in ‘18.

Okay. And switching to auto, in the past you have talked about a mid-teens operating margin target. Just wondering what it takes to get those in gear and to what extent need to maybe qualify that target or at least in terms of what’s plausible in the next couple of years.

Yeah. So, our target margins for Automotive is unchanged, and we still talk about mid-teens. I would say the -- in the near-term the lower levels of volume have definitely hampered our margins as we think about the -- in our Automotive business, the fixed cost is higher than we see in some of the other businesses, because of some of the more customized equipment, et cetera, that we have for different platforms and different initiatives across the business. Having said that, we do need to see some pickup back in the volume range that we have been seeing, I’d say that’s one. But secondly, we have started talking about, I mentioned in my comments that we have taken some cost reduction actions in our sensor business. I also mentioned some manufacturing footprint activities that we are looking at some of which will include our Automotive business. So those are some pieces that we are looking at both in the short and the longer term.

Okay. And then, lastly, just capital allocation, looking back, this is the kind of most significant little burst of share purchase that we can track. Just wondering what the biases there going forward, what’s the authorization and how actionable do you think the deal funnel looks today?

Sure. Let me talk -- I will talk a little bit about share buyback and maybe let Dave comment a little more on the pipeline right now. So maybe just setting the stage here, our share authorization which is effective through April 30th of this year is for 1 million shares. To-date, under that authorization, we repurchased a little over 450,000 shares. So we have got about 550,000 shares that in theory we could buy as well. We have always talked about our philosophy that we are not the company that has a regular program that we put in place where we are buying back a set amount every quarter, but more looking at things opportunistically. I would say for us the opportunistic pieces the past few quarters have been A, with the market in a lot of the fluctuations that it’s been. We have seen our share price dipped quite a bit on Sundays and so we have taken that opportunity to buyback our shares where we feel they have been pretty undervalued. And then, secondly, with all the strong cash generation we had even balancing that with our acquisitions funnel, we felt that we had the cash on the balance sheet, didn’t have to take on additional debt for it that we could go buy shares. I would also say one of the things that we looked at as I mentioned that we bought back shares in the low 170s was the average price and when we issued shares back to the IXYS deal about a year ago, it was really based on the value of the low 180s So that was also a great point that we were looking at as we thought about share buybacks.

On the acquisition front, Chris, I -- what I would say is as always acquisitions can be lumpy. Our funnel continues to be quite healthy and a great deal of optionality really across our businesses and technologies and markets that we are looking at, so a lot of activity there. Certainly, we continue to make sure they meet first the strategic threshold that we are looking for and followed by the financial return on that. So, certainly, expect that we will be doing more acquisitions in the coming months and years. So we continue to be a pretty full call.

Thank you.

Thank you, Chris. We will take our next question, please.

Thank you. And our next question comes from Matt Sheerin from Stifel. Your line is now open.

Yes. Thanks.

Good morning, Matt.

Hi. Good morning, everyone. Just a question to Dave just regarding your outlook for the year, I think in your earlier comments you talked about looking forward to some growth this year in -- for the overall business and if you look at, obviously, starting at a lower base here, it sounds like Electronics is going to go through at least two-quarter correction. And so I guess the question is, I mean, are you still confident that you can grow both businesses this year, and then -- and obviously we will be more back end loaded? And then same thing for EPS, because of some of the margins, headwinds that you talked about in both businesses?

Sure. Yeah. No. Great question, Matt. And certainly kind of our expectation is the early part of the year and the first half of year is going to be a little bumpy and clearly there is inventory in the channel at the bottom of the range that our channel partners would like to see in the electronics world. And with kind of their demand flattening, end markets -- we are not seeing their end markets declining but they are really flattening instead of the spectacular growth we have kind of seen over the last couple of years. That’s really driving them to correct a little bit in their inventory position. Typical for us, that’s going to take a couple of quarters to kind of work our way through. So we do expect that it will drag on growth in electronics. Global car build, our view -- and there’s a lot of views on this. If you look at the market data, it’s more favorable than this. But we talked to our peers. We talked to our customers. I think our outlook of actually a decline of 2% to 4% in global car build is probably a better planning place for us to work around and that’s certainly worse than that in the first half of the year. So, we expect first half the year to be a little bumpy certainly on the growth side and that does translate to some of our EPS performance. But unless end market demands degrade from what we are seeing today, we do expect that the back half of the year to see improvement both in the growth of the business, but certainly in the profitability of the business as well and we feel confident in improving margins and EPS in the back half of the year as long as there’s not some additional bad news in the end market.

On the IXYS, it sounds like you are pushing out some of the restructuring activities and capacity plans. Do you expect though to see -- still have incremental accretion in the business this year from IXYS?

Yeah. And on the IXYS synergies, we kind of laid out -- we said we’d be at a run rate end of 2019 at $30 million of synergies. In the plans we laid out from synergy actions, we are actually at the end of 2018. We are ahead of our timing plan. However, really strong demand in the course of 2018, and we made strategic decisions that the return for us and our shareholders in the long-term was certainly better for us to optimize the opportunity to take advantage of that, which really fell through and better accretion than we had planned in 2018. That will flow through on to 2019. And when I say we made those decisions to push out, it’s pushing out a couple of quarters. It’s not pushing it out dramatically. We are still highly confident in getting $30 million plus in synergies out of the business, and certainly, expect that accretion will continue and improve in IXYS through the course of 2019.

Okay. Great. And just last quick, regarding your book-to-bill commentary you said it was below 1. I think last quarter it was 0.91 in Electronics. Could you tell us what the number was?

Yeah. If you remember last quarter, I talked a little bit about the fact that the book-to-bill data is getting a little less crisp for us and that’s really driven by a few things. One is our customer base has shifted particularly IXYS to a higher mix of direct customers versus distribution. They order in different ways many times with scheduling agreements as opposed to orders, booked orders as such, also automotive electronics, which has now become somewhere in that 10% range of our Electronics business. They also do scheduling agreements. They don’t do standard booking. So those things kind of add complexity to it. And then we have also had a couple of our -- particularly one of our larger distribution partners who has changed their ordering strategies through the course and by the way, they changed three times during the fourth quarter and how they were placing orders. So our book to bill from day to day, week to week within the fourth quarter was all over the map. So what I think we’d say is our best view of that is it’s between 0.9 and 1. So it’s not terrible. But it’s certainly below. We will normally see kind of going into the first quarter and that’s why we really didn’t quote a number because a mathematical number was not very helpful because of the volatility.

Fair enough. Okay. Well, thanks a lot.

Sure.

Thanks for your questions, Matt. We will take our next caller, please.

Thank you. And our next question comes from Steven Fox from Cross Research. Your line is now open.

Hi.

Good morning, Steven,

Good morning. A few inventory questions start off. First of all, did you disclose the inventory obsolescence charge, how much would it gross margins in the quarter?

I didn’t specifically but for overall electronics margins, it was about a 50-basis point impact for the quarter.

And what does that say going forward about possible other obsolescence charges, do you think you have cleaned up the IXYS balance sheet or could it be others?

So I would say in the fourth quarter, there were a few things that were going on. One you heard in some of Dave’s earlier comments that we did some work around some business exits, so there were some inventory obsolescence charges related to some of these exits and transitions. Secondly, we don’t talk about every single product line transfer that we do, but we actually -- in 2018, we did a few IXYS product line transfers and any time you do that, specifically, some inventory obsolescence there and so that was part of it. And third, with the higher demand that we were seeing in 2018, we were expecting to sell certain -- various inventory that we had. We worked on that, sold some of it but by the end of 2018, especially as we started to see a little bit of the demand slowdown and we took an obsolescence charge. I think most of it is behind us. There might be again with some of these demand patterns a little bit more to go and/or as we continue to have manufacturing and supply chain infrastructure changes. There may be some related to that but I’d say the set of issues that happened in the fourth quarter are done.

That’s helpful. And then just one, I am sorry, one more inventory question. If you look big picture now with your total inventories and, Dave, you were talking about distributor inventories also being high which some of your distributors are not in favor with you at this point. But your inventories have gone up two quarters in a row while your sales have gone down. What do you think about that versus what’s going on in the channel, like how do we think going forward for the first half or what you have to do to manage your inventories and like what would that be in terms of just a natural impact on gross margins, and I had one more if I could.

Yeah. So maybe just some comments on inventory in general. As some of the split sales have slowed down, and I would say, even in the fourth quarter where we were a little more surprised by the magnitude of the slowdown, we set up our plans and our scheduling to meet what we will expect to see ordering come in. And with the order slowdown that really happened in the back end of the fourth quarter, we’d say we were left with some extra inventory there higher than we thought, which unfortunately that happens when you start to see some this demand pattern changes. Having said that, definitely some of the opportunities for us around inventory are absolutely within the IXYS space and we talked about that. What we have also said is we really need to undertake some of these manufacturing supply chain infrastructure changes to really go after that because that’s really, if you take a look at sites, a number of locations internally and externally that we are manufacturing, that’s really what drives a lot of the inventory level. So, I would say that will similar to the profit on sales, it will take some time to go through that, but it’s absolutely on our list of what I’d say outside of the $30 million cost synergies, other cash synergies that we are expecting to drive in the business.

Great. That’s great detail. I appreciate that. And then just lastly from a content standpoint on the auto side, I mean, obviously, the production slowdown has been discussed a lot by Wall Street. If you think about how your average content above production is going, if you look at the auto segment, plus the auto electronics stuff, like can you give us either qualified or quantified number how much you are sort of outperforming and what the biggest drivers would be for that?

Yeah. What I would say is in the long term what we laid out is in our Automotive business, we expect organic growth to be in that kind of range of 7% plus from an organic growth standpoint. That’s based on assuming about a 2% car build or so and obviously car build is not that today right at this point in time. But overall we expect a content increase in that range of 4%, 5% sort of content increase across those applications. What can happen within quarters and things like that, it’s not a perfect mix in that way, so for instance, in North America and Europe, I believe we sell directly to the Tier 1. In Asia, because of the structure of the supply chain, often we actually sell through a distributor to the Tier 1 and so there’s a little more inventory in the channel in a China environment than there is in the western world. And so when things drop off, maybe there is channel inventories that they work through and carry a little heavier inventory that way. So it’s not perfect quarter-to-quarter, but that’s the range we see, we still see that and still feel pretty good about that content story.

Great. That’s very helpful. Thank you so much.

Thank you for your questions, Steven. We will take our next caller, please.

Thank you. And our next question comes from Shawn Harrison from Longbow Research. Your line is now open.

Good morning, Shawn.

A chilly good morning to everybody.

Yes.

They are like five -- the three of the five people in the office today.

Just I guess a clarification on the auto business right now is you exited 2018. What is the mix of CVP versus your traditional auto circuit protection versus the sensing business just in kind of rough percentages right now?

Yeah. Kind of rough percentages, we don’t report those independently on that, but we have shared in the past that kind of the passenger car circuit protection piece in the Automotive segment, about half of the revenues and then between CVP, as well as our sensor business, it’s closer to 25% to 30% on each kind of 25% split between those two.

Okay. Perfect. I know January is never a good month to make a trend in the Electronics business just given the holidays and Chinese New Year buying. But is the activity on kind of a pure demand base has continued to be accelerated or are you seeing some stabilization in trends and then on the inventory side, I am guessing you are still seeing that being pulled out of the system here in the New Year?

Yeah. What I would say is of course, early in the year and kind of looking into electronics space, there’s always a little noise around Chinese New Year and things like that. What I would say because of the fundamental slowness in the Chinese electronics market, we didn’t see a lot of pull-in that we typically would be heading into Chinese New Year. Certainly, there are some of the smaller factories certainly in the south that have shutdown for longer periods than they normally would for Chinese New Year. So that demand drag in the Chinese market certainly is impacting order rates coming into us. Overall, I would say, North America and Europe and the rest of the world, so kind of hanging in there from in-market demand. We don’t see huge negative news there. It is kind of growth has flattened, maybe stabilized, but with the in-market side, we don’t see that being particularly negative at this point in time. Clearly, some of our distribution partners are rebalancing inventory.

Okay. Great. And then Meenal on the CapEx growth into 2019, is most of that associated with bringing the [inaudible] business in-house and some of the IXYS migration or maybe where is the additional CapEx going in 2019?

Yeah. I’d say a couple of things. So as it specifically relates to the [inaudible] business, the bulk of the spending we actually did in 2017 and 2018 we had to get everything ready to then start moving everything in. I’d say for 2019, definitely, a lot of activities starting as it relates to the IXYS, as we talked about some of these manufacturing supply chain infrastructure pieces, I would say, IXYS related. We have got some activities there. And then, just in general, even though we are seeing growth has slowed down, maybe even flattened a little bit, we are still at more elevated levels than we were two years ago. So in some cases, we are still adding in capacity relating to the new volume levels that we are at. We have seen that in both in Automotive as well as across Electronics, but in general less for those.

Okay. Then last for me if I may, the Industrial business, the growth has been fantastic for the past 12 months to 18 months. I know you highlighted the EV charging infrastructure which is helping. But if we look ahead over the next 18 months to 24 months, what’s going to continue that growth rate in that business. So, there are specific applications that are driving the majority of the growth right now that we can consider when forecasting the business.

Yeah. I think some of the growth drivers in the Industrial segment that we report are really -- so we have kind of the fundamental heavier industry, oil and gas, and mining and stuff like that. We see that as they continue to become relatively stable. It’s a return to a reasonable levels and stable. What’s driving the growth beyond that is actually broadening our distribution through maybe non-traditional ways and through our electronics partners as our electronics distribution partners have begun to focus a little more on the Industrial side to drive growth that creates opportunity there. That has been a good growth driver. We continue to see that being a good driver. Also this business, historically, has been very North America centric and we have seen some of our strongest growth by the still small numbers, a big growth drivers of expanding these products into Europe and Asia. So I think growth in those areas continues to be pretty good and will continue to be a good growth driver in Industrial segment.

Thanks so much.

Thank you, Shawn. We will take our next question, please.

Thank you. And our next question comes from John Franzreb from Sidoti & Company. Your line is now open.

Good morning.

Hi, John.

It seems like in your prepared remarks that you said that in the past years, one of the benefits besides currency has also been the ability to maybe side step some pricing pressures. Are you starting to see pricing pressures emerge in any of your product lines or in markets?

Yeah. What I would say is, yeah, 2018, maybe leading into 2018 with very strong growth rate and particular challenges in supply not for our products but other components and the like in that space. Purchasing people were mainly focused on getting price and getting things out the -- getting product into their door to keep their operations running and to fill their needs. So they were not as focused on pricing. And so, yeah, that probably lessen the pricing pressure that we saw in 2018. We have not particularly seen net pricing pressure increase yet in 2019. But I think our comments really saying not sure we can expect over a long period of time that lower pricing pressure here is maintained. So we haven’t seen a really changing yet, but our expectation is it will be faster, being in a little more of a headwind than we have had in the last year.

Great. Got it. In regards to IXYS, can you kind of give us some content on how that business perform during other semi downturns and what your expectations are given the current environment for that business?

Yeah. I think, first of all, we are learning that a little bit more right as the new part of our business from the power semiconductor side. Because of the market, the customer base of that business being fundamentally different than our traditional electronics customer base, it’s more industrial electronics, larger industrial players and things like that and there are more -- in that range of maybe 50% direct, 50% per distribution. I think, they are maybe a little less volatile than our traditional electronics business has been, but certainly, cycles will impact as well.

Thank you, John. We will take our next question please.

Thank you and our next question comes from George Godfrey from CL King. Your line is now open.

Good morning, George.

Good morning, Dave. Good morning, Meenal. Good morning, Dave. Just a couple of questions. I wanted to ask about the acquisitions. Dave, you mentioned doing some more deals in the coming months and quarters. From a time standpoint, for you and Meenal, as well as the organizational infrastructure, could you -- would you feel comfortable doing an IXYS sized deal at this point or does that integration need to get further along?

Yeah. What I would say is we found the right strategic opportunity and have the right financial return. We absolutely are prepared to take on another acquisition at similar size to IXYS. We have had those discussions with our Board and internally. We have digested a significant amount of the activity in IXYS. There’s still work to be done. But, certainly, if the right opportunity is there we would be willing to do that.

And George, I would add when we -- as we have some of these different acquisitions, we look to see where we think the bulk of the work will be or in what parts the business or functions and we can flex those parts of the organization where we add additional resources to make sure it’s a successful integration and we have done that.

Got it. And the synergy target, $30 million, I understand that some of that gets pushed out to 2020. I don’t think you have ever quantified revenue synergies but you did mention that the business is now running annualized $390 million versus $340 million. Is that $50 million increase reflective of some of those synergies or are they on the revenue synergies, are those still going to come as well?

Yeah. I would say that those are really still to come from us. Were there’s some revenue synergies in that amount? Sure, as we have taken IXYS into some of our core customers and the other way around, right, there’s certainly been some opportunities. We did not build our financial model and return on revenue synergies. But certainly that is a long-term play for us. I think the bulk of those revenue synergies are clearly to come and particularly longer term taking their products into the automotive space. That’s a two-year to three-year process to get there. Those will come in coming quarters and years.

Got it. And then my last question…

Thank you, George for your question…

Okay.

Go ahead. Okay. Thank you.

Thank you. And our last question comes from Joe Vruwink from Baird. Your line is now open.

Good morning, Joe.

Hi. Thanks. Good morning and thanks for squeezing me in. If I look at your Automotive organic growth the last two quarters and I tried to weigh what end market production is by region and just compare your organic growth. It seems like the growth has pretty well reflected what end markets are doing, which means that there’s not a lot of above-market growth in the last two quarters. Dave, you mentioned that in some geographies you are selling through distributors of various channels. So maybe the inventories were just a little bit high and what we are seeing is destocking in Q3 and Q4. I am wondering, A, is my math correct, and then, B, if inventories are in better shape and we do maybe get some snapback from various markets, China, for instance, is pursuing auto stimulus, do you think there will be restocking or do you think your Automotive business would go back to reflecting this content growth above market that your model is really predicated on?

Yeah. I think our view of the math is maybe a little different than yours. So if you look at like the fourth quarter, we had a decline of about 1% organically in our revenues in Automotive and the car build was down about 4%, so that would show about a 3% expansion, if you will, in that segment. So it shows some expansion there. And that was probably muted a little bit because of the China inventory position. The other aspect is that it’s difficult to kind of peel out, because it shows up elsewhere as automotive electronics. So in-market driver there the electronics content increase in the vehicle that’s driven of course by safety investments, autonomous driving stuff, as well as even the electrification of vehicles. It ends up rolling through our Electronics segment. And so it doesn’t get called out as a growth driver. So I do think we have seen in the last couple of quarters. We have seen automotive growth that’s above what cargo growth has been. If things do snap back and I know just yesterday the Chinese central government made some big comments in around stimulus in automotive at the local regional level if they have the money kind of comment. If that snap back, will we see the inventory restocking? Probably not, because I think they will probably be a little more cautious, because things have been booming for so long and they were quite eager to put the inventory in place to support that. But I do think it would show an increase and kind of reflect to our content story.

Okay. Got it. Great. Thank you.

Appreciate your questions, Joe. Thank you for joining us on today’s call and your interest in Littlefuse. We look forward to talking with you again soon. Have a great day.