Ladies and gentlemen thank you for standing by and welcome to the Littelfuse Inc., Fourth Quarter Fiscal 2019 Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today Trisha Tuntland, Head of Investor Relations. Thank you. Please go ahead ma'am.

Good morning. And welcome to the Littelfuse fourth quarter 2019 earnings conference call. With me today are Dave Heinzmann President and CEO; and Meenal Sethna Executive Vice President and CFO. This morning report results for our fourth quarter and fiscal year 2019 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 discussions today will include forward-looking statements. These forward-looking statements may involve significant risks and uncertainties. Please review today's press release and our Forms 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. Before continuing, I'd like to first mention the top of mind, for our company is the safety, health and wellbeing of our global associates, their families and communities given the Corona virus outbreak in China. Our first priority is to our people. We're taking proactive measures to protect our people. We'll continue to take necessary actions. In addition, our global business continuity teams are closely monitoring the situation to limit disruption to customers. Now I will provide an update on the performance of our company. Littelfuse navigated a challenging macro environment in 2019, while our global teams remain focused on driving long-term growth, profitability and cash generation. We actively manage costs to align to business conditions while advancing several strategic initiatives across transportation, industrial and electronics end markets we serve, demonstrating our ability to balance short-term costs, containment as long-term strategic investments. Our fourth quarter performance was consistent with our expectations; recorded fourth quarter sales of $339 million and we delivered adjusted EPS of $1.17 at the high-end of our guidance. For the full year, we recorded sales of $1.5 billion and achieved an adjusted EBITDA margin of 20%. Our disciplined cost management actions help mitigate the impact of the soft demand and channel inventory corrections to deliver adjusted EPS of $6.82. We generated $183 million in free cash flow, representing a 132% conversion from net income exceeding our 100% target. We returned $140 million of our free cash to shareholders through dividends and share repurchases. This deployment of capital during a period of soft demand reinforces the strength of our balance sheet, confirms our commitments to deliver ongoing value to our stakeholders. Since late in 2018, we have seen a volatile global economic environment impacting the end markets…

Thanks, Dave. Now, some highlights from our fourth quarter of 2019. We finished the year with fourth quarter sales of $339 million down 16% on a reported basis over the last year and down 14% organically. Sales were in line with our guidance reflecting ongoing end market challenges across our electronics product segment our sales decline continue to reflect ongoing channel and end customer inventory reductions. As expected, automotive product sales were impacted by continued global auto production declines, delay in auto sensor programs in softness in commercial vehicle end markets. Our industrial product segment grew 7% continuing it's above market growth trajectory. Foreign exchange also reduced our sales growth of 1% over last year due to the weaker Euro. Fourth quarter GAAP diluted EPS was $0.92, adjusted diluted EPS of $1.17 for the quarter was at the high-end of our guidance range. Benefits from a lower than expected tax rate contributed $0.11 of EPS, partially offset by $0.06 of unfavorability from foreign exchange. Outside of these, we essentially finished at the midpoint of our guidance range. GAAP operating margins were 9.5% with adjusted operating margins of 10.7%. Adjusted margins finished slightly below our expectations as foreign exchange was a 50 basis point headwind versus our guidance. Lower volumes and associated leverage across the electronics product segment had the biggest impact to margins both year-over-year and sequentially as sales in the quarter were the lowest we've seen in two years. For the full year of 2019, sales finished at $1.5 billion declining 13% overall and down 11% organically. This was our first sales decline in 10 years led by numerous macro factors impacting end market demand coupled with inventory destocking across our channels and end customers. GAAP diluted EPS finished at $5.60 and adjusted diluted EPS was $6.82 for the…

Thanks, Meenal. Now I'll provide commentary on the key end markets we served beginning with transportation. Development of Advanced Driver Assistance Systems or ADAS continues to outpace expectations, enhancements beyond level two are on the near term horizon brings significant upside for content opportunities. Increasing global safety, efficiency and connectivity requirements are propelling an electrical architecture revolution and cockpit transformation, key factors for growth in automotive, electronics and electrical systems. In the fourth quarter, we had strategic design wins across a wide range of applications in all regions. In the electric vehicle space, we won new business to protect battery systems and on-vehicle chargers for manufacturers in Europe and Japan. The plan launch of nearly 30 new electric vehicle models in 2020 with a broad range of automotive manufacturers where we are designed in remains a positive for our content opportunities. Our product quality and strong customer relationships helped secure a new circuit protection winds in Japan and Korea, including design wins to protect window lift motors and power seat motors. We won new power semiconductor business in India for ignition systems for two and three wheeled vehicles. With our excellent engineering support, customer responsiveness and reputation for quality and reliability, we had several key wins in China, in Europe across our automotive sensor portfolio from solar, speed and position sensors, the fluid level sensors. Turning to commercial vehicles, during the fourth quarter, we continued to see soft demand across most of our end markets and geographies versus last year. We expect these conditions to persist through the majority of 2020 as the North America heavy duty truck market continues to come off of peak revenue and build rates slow in agriculture and construction. Our commercial vehicle business continues its push to expand beyond North America with key design wins…

Thanks, Dave. Now let me start with impacts that we are currently seeing from the Corona virus outbreak. We are closely monitoring updates from local authorities as the potential business interruption impacts are still evolving. Local China authorities have extended the New Year Holidays one week at our production site. Additional impact could include extended production stoppages, staffing shortages as well as supplier and customer implications. We have incorporated the cost impact of the longer New Year holiday within our guidance. Outside of this, both our first quarter and our full year forecast assume business as usual. This is a fluid situation; we are not able to quantify further potential impacts to our forecast at this time. Now moving onto the first quarter of 2020, we expect sales of $352 million to $364 million versus last year the mid point reflects a 12% decline in total sales and an 11% organic sales decline. We estimate foreign exchange to be about a 1% headwind versus last year. First quarter adjusted diluted EPS is expected to be in the range of $1.21 to $1.35, this assumes an adjusted effective tax rate in the range of 18.5% to 19.5% for the quarter. Notably, our guidance midpoint reflects sequential improvement with 6% sales growth, 9% EPS growth and adjusted operating margin expansion. Our growth is dampened by an EPS headwind of about $0.15 stemming from both foreign exchange and a higher tax rate. Excluding these items, sequential EPS growth would be 23%. For the quarter, we're estimating global car builds to be down in the low single digits. Across our electronics product segment our book to bill is running above 1.0. We believe the majority of excess channel and OEM inventory has been depleted and expect the remaining to burn through over the next…

Thanks, Meenal. In summary, during 2019 we made significant progress across our business segments as we continued to execute our growth strategy in a challenging market. Looking ahead, we are confident that our strong business fundamentals and operational excellence position our company for profitable growth through the course of 2020. The evolution of our company continues to highlight the importance and value of our Board of Directors and consistent with this, I'm pleased that Maria Green, retired Senior Vice President and General Counsel of Ingersoll-Rand will join our Board effective February 1. Maria brings a wealth of global public company leadership experience, going to be a great addition to the Littelfuse Board. On that note, I want to thank our Littelfuse associates around the globe for their commitment in 2019 and I look forward to their contributions in 2020 and beyond as we create additional value for all Littelfuse stakeholders. With that, we'll open the call for questions.

Thank you, sir. [Operator Instructions] I show our first question comes from Shawn Harrison from Longbow Research. Please go ahead.

Hi. Good morning everyone. Wanted to delve in more to the operating profit margin in the electronics business? I have to go back to 2011 to find something this low. And I understand, volume in the incremental margins associated with that are high, but it was surprisingly low and it seems like at least the lift implied in the March quarter guidance is going to be a little bit less than typical. So if you could kind of walk me through the drags there and kind of how we should expect that margin to rebound it as you progress through 2020s, distribution demand normalizes.

Sure. Hi, Shawn. So just stepping back the level of decline that we've seen in our sales across electronics, right? We haven't seen this type of decline in 10 years. So the combination of the macro factors that we've seen plus the inventory destocking not just channel but also with end customers like EMS and OEM that's had a significant impact from an absorption perspective and just the variable margin that we see across the electronics is fairly strong. The other thing I would point out is that our margin had been running a little bit lower already with IXYS coming into the fold. And there's a -- while we've recognized a fair amount of the synergies that we've committed to, there's still that last batch that we said that we've got to work on that's really primarily going to impact gross margins. So we also expect to see a gross margin uplift over the next 12 to 24 months as those programs get into place and we start to see those efficiencies as well.

I guess as you ramp here into the first half of the year, it feels as if the leverage off the bottom is less than we would anticipate. Is there something incrementally from a cost perspective that's pushing down profitability, be it, some of the cost takeout actions or something else that limiting leverage off the bottom?

I would say, I mean if I just look at the overall company, the other piece I would also talk about is foreign exchange. That's also been a drag where if I go back to 2018 and 2017 were foreign exchange, we've talked about had been a nice tailwind for us. We saw some better pricing when there were shortages in the market, but now we've got foreign exchange. That's now a headwind for us. A big headwind in '19, but even in '20 going into the year and we've seen pricing come back to more normalized levels across electronics.

Okay. And then I guess just a quick follow up. Dave, in kind of the full year view, would you expect either your distributors or OEM or EMS customers to begin destocking is really the baseline due for the year that the destocking headwind you've seen stops and you just back to consumption selling versus sell through kind of not being normal versus anything else?

Yes. As we talked a little bit in the prepared remarks, certainly fourth quarter was pretty challenging. We took significant amount of inventory out of the channels which needs to happen of course, to kind of reach that equilibrium point. There's still a bit more to go during the first quarter, but we're reasonably confident that when we get through the first quarter, we're kind of done with these destocking sorts of work. And just the mere fact that, as you get past first quarter, so you kind look at fourth quarter, first quarter is kind of the bottom of that, that momentum on inventory correction you get an uplift just out of the matching of selling and sell through. But we also believe that we'll begin to see in the back half of the year some end market improvement as well with some penetration into some higher growth end markets. So first half the year is still going to be quite, kind of challenging if you will, but begin to show that improvement as we kind of move out of the first quarter and into the back half of the year. We'll see stronger growth.

Thank you.

Thank you, Shawn. We'll take our next caller please.

Thank you. Our next question comes from Christopher Glynn from Oppenheimer. Please go ahead.

Thank you. Good morning. Hey, Meenal and Dave. And so nice operating margin at automotive, good momentum there in the back half last year. And that's, still with the organic headwinds, fairly pronounced. The suggest you gave, back to the mid teens margin pretty quickly, if you get top-line and potentially even approach that in the back half this year?

Well, we're expecting for 2020, we're expecting to see continued margin expansion in automotive. I think a couple of things, I mentioned, I'm part of the way through my full year commentary that we're working on some footprint programs some of which we've talked about as they relate to semiconductor and our IXYS acquisition, but some of which are also with part of our automotive business as well. So that's going to take us a little time as much as most programs do. I say the second piece is with foreign exchange, we tend to see the biggest impact, the IXYS impact coming through automotive. And so some of that is also going to depend on what happens with foreign exchange in a whole host of different countries from a year-over-year basis. But we absolutely expect to make progress this year. And I would say it's probably going to be more like '20, 21 before we see that mid-teens improvement.

Okay. And then, just on the M&A pipeline. Curious if you could comment on, first the breadth of properties, sizes, sectors, actionability, those dynamics as well as your operational capacity to be active there. Because you said you have a lot going on with the footprint and all.

Sure. And yes, of course, M&A we've talked about, for the last several years being critical for our strategy to drive fundamentally organic growth improvements. That has not changed and from an ability to take on acquisitions we think we're at a position to be able to do that. And if you look back in the last year and 2019 where we didn't complete an acquisition what you have visibility to, of course, are the things that fact that we didn't close any, but you don't have visibility as to the work that's going on and potentially areas where we stepped away kind of final stages. So we were quite active during 2019, but also created the discipline to make sure we stepped away and when things weren't quite where we wanted them to be. So we certainly expect to continue to be active. I still think prototypical types of deals for us are in that $40 million to $100 million for the range is kind of the prototypical sweet spot for us. We obviously will stretch larger, if the right opportunity comes along. And if it's highly strategic, we'll also do smaller deals that might bring in a technology or market access. The good news is we have good optionality because there are many of the end markets that we see opportunities for, so can be quite active. Certainly expect to continue to use that as a growth driver as we move forward.

Thank you, Dave.

Thank you, Chris. We'll take our next caller please.

Thank you. Next question comes from Karl Ackerman from Cowen. Please go ahead.

Good morning, Karl.

Hey, good morning. Hey, good morning, Dave and Meenal. Hey, I appreciate the color for the full year. I did want to go back to gross margins for a minute. Clearly the inventory overhang at distributor partners has caused elevated inventory across the channel. Meenal but I think several of your peers have reported stability in order bookings. And you actually made some comments in your repaired prepared remarks on that in electronics. So first, are you seeing stability in industrial and auto markets yet? Like what seems to be happening in electronics. Second, of the weakness in electronics may you juxtaposed to man dynamics between passives and power semis? And third, when should we expect inventory headwinds across all product lines to abate that I think would certainly enable you to improve factory loadings and margins from here. And believe it or not, I have a follow-up?

Let me start a little bit to kind of talk about the market conditions and things like that. Meenal can speak to how that translates to gross margins. Our industrial business, we've been growing well above market. We don't see that changing. We continue to have good momentum in the industrial segment. So we don't have an inventory overhang there. That's really not been an issue for us in 2019. We don't see that in 2020. We continue to see that reasonably stable. So although industrial markets are not robust, globally right now we've been able to grow nicely with our efforts to design and win beyond North America and in specific growth areas. So if we can see that, certainly continuing in 2020. On the automotive side, and candidly, all of these comments are really, I put an asterisk as to we just don't understand the potential impact of the Corona virus both in China and globally. So I'll make these comments kind of based upon what we know today in regards to that. Automotive, we certainly do not see car build growth in 2020. However, we see a little more stability. So the level of drop is reducing and slowing. The good news is, we had some challenges and made some decisions to step away from some pieces of business in the sensor side of the business in 2019 in specific applications. We're through a big part of that, have a little bit more to go. But we remain highly confident in the passenger car side that we are seeing content growth beyond car build. So we do expect growth out of automotive in 2020. Commercial vehicle, which falls in that segment is a bit more challenging. And although we'll have good growth with design wins and some share gains in 2020, clearly the end markets are not moving in our direction. So that'll kind of weigh down a little bit on the automotive segment. Electronics talked about it in the previous comment. We think we're -- through the course of the first quarter -- through the inventory corrections largely. And we really begin to reach that stability level. And we're really looking for improvements that come from just matching sell in and sell through, but also would look to see end market improvements kind of in the back half of the year. So that's kind of our view on where inventories are and how we kind of see the demand patterns looking. Meenal, maybe you can talk a little bit about how we see that translating into gross margins.

Sure. One of the point I wanted to add to Dave's comments on electronics, so versus our peers that we've mentioned in the past about 75% of the sales in our electronic segment go through distribution and through our channel partners. And that's larger than most of the peer companies that I expect you're looking at and then we look at as well. So we tend to have some higher peaks and lower valleys compared to our peers. And that's why, the monitoring of the inventory and inventory correction and even just some of then in the stabilization in the channel becomes more critical for us versus some of our peers. So having said all that, we've talked about is, we have strong variable margins definitely across electronics, across industrial, and you can see that come through when we have growth. You typically will see the gross margins improve fairly rapidly and then dropped down very well, leveraging operating margin. So that's what we expect to see a little of that in the first quarter. But as Dave mentioned earlier, as we start to see some of the growth come back in the second half, we'll definitely see some stronger improvements in gross margin commensurate with that.

Very helpful. If I may squeeze in one more. You industrial business was a bright spot in the quarter. I know in the past you have mentioned that IXYS has acted as a beachhead for your industrial business opportunity. And the sales teams that being IXYS senior industrial sales teams are, I think are tightly integrated. With IXYS less than halfway integrated. Why wouldn't we see these growth rates in industrial sustaining for the next several quarters given these synergies across your product lines? Thank you.

Yes. First of all, I think we're well beyond halfway integrated of IXYS. We're kind of nearing the final stages of that of the integration activities, footprint work we have to do is certainly getting approvals from customers and things like that take longer and the footprint work on IXYS, but sales integration, systems integration, those things were kind of in the backend of those activities. We have seen improvements in our core industrial segment, so our traditional products that have been helped by access to industrial customers from IXYS. So we have seen some of that that synergy, if you will, from a sales perspective, in those areas that's part of the health for us to grow beyond what the markets are doing in industrial.

And just one other thing, Karl, I might add is, I just wanted to make sure and clarify our IXYS products being semiconductor products are in our electronics segments. So Dave was talking about the industrial product segment, IXYS in the electronics segment. And so some of the channel issues that we just talked about, we experienced with IXYS less so than maybe some of our legacy business because we've got more direct sales there. But we've also seen inventory destocking with end customers like OEM. So that's also affected our IXYS business as well within the electronics segment.

Thank you very much.

We will take the next caller please.

Thank you. Our next question comes from Steven Fox from Cross Research. Please go ahead.

Good morning, Steven.

Good morning. It's tough to follow on that one, but I'll try. So in terms of pricing, I guess pricing has been returning to normal for your fuses and power semis over the last couple of quarters. Like where are we versus a year ago comps, are we -- when does sort of pricing equalize on a year-over-year basis? And I guess that would be a decent margin help as you think about the year.

Yes. So I think when we've talked about pricing conditions, 2018 was the anomaly, not 2019, all right? So we've probably had pricing conditions in 2018 that were maybe half of what we normally would see. So through the course of 2019, we certainly saw a return to more normalized electronics pricing pressures, which can be in that 4%, 5%, 6% range. And that's what we're seeing today in the electronic side of our business. That's consistent with what we've seen in history. And certainly our teams work hard to make sure all of our cost improvements and volume increases help to offset those challenges. So really it's been a return to normal there and that we saw that happening kind of in the early stages of 2019. So we expect that to continue and it kind of it's normal pattern.

Got it. That's helpful. And then, secondly, Dave, you guys were early and accurate in sort of calling the inventory in the channel. You're now calling for it to sort of normalize by the end of this quarter, which is consistent with what you guys were saying. But the recovery that you mentioned sounded sort of a slow, steady type of recovery not any kind of anything dramatic, which depending on who you talk to is a little more conservative than other guys. Is there anything you're contemplating in that comment relative to industry specific to fuses and power semis or anything else in terms of puts and takes with content? Or do you think is just a general market outlook that you're talking about there?

Yes. No, I don't -- nothing specific we're contemplating on that. I mean we get a bit of a step function improvement when the inventory destocking has done, all right? Because you just -- you're no longer reducing sell-in to take inventory is down. So you get that step function improvement that takes place, which we kind of expect to see that after the first quarter. We'll see that improvement. Beyond that we are expecting improvement but the improvements will really be driven out of fundamental in market improvements. And yes, I think our visibility as of today would say that yes it will begin to show that end market improvement in the back half of the year. But our visibility there is not great, so we don't want to over commit, in our kind of view on how the end markets are going to behave in the back half of the year. So, some might think we're being conservative, but I think our view would be unless we see specific things that are going to drive that in the back half of the year we're not going to call it up that much. So we hope there's some upside to that in the back half of the year and as visibility improves, we'll certainly talk about that.

That's helpful. Thank you so much.

Thank you, Steven. We'll take our next caller please.

Thank you. Our next question comes from David Liker from Baird. Please go ahead.

Hi. Good morning. This is Erin Wilson back on for David. So, my first question just I want to dig into your automotive segment organic growth a little bit given the 8% organic sales decline. So, at least based on my math, it looks like commercial vehicle could be -- maybe as much as half of the organic sales decline within this segment. I'm wondering if you can help further contextualize your outgrowth or content growth in passenger car fuse versus commercial vehicle and then the sensor headwinds you had talked about as well.

Yes. So, when we talk about the sensor headwinds, and we've been talking about that for the last couple of quarters. Sensor headwinds end up creating a bit of a -- let's call it about a 1%, drag on organic growth to the automatic segment. Certainly commercial vehicle has an impact on it as well as, as a drag. What we're seeing today as we look forward, we clearly are comfortable in the passenger car segment; by the way, inclusive of our sensor business at this stage. Looking forward, we clearly are seeing content growth that's in that 3% to 4% range beyond car build. Obviously, car builds in 2020, we're not projecting to the show growth, but the content story continues to hold water and as we look forward, that looks so pretty solid for us. And so we remain pretty confident in that.

Okay, great. And then, my second question is, just can you to the extent possible detail the assumptions you have surrounding the Corona virus that's currently embedded in your guidance?

Yes. What I would say is the impacts we have on that today is, we know that in all of our factory locations in China and in a good part of our customer's locations, not all of course there has been a mandatory extension of the Chinese New Year holiday through an extra week. Our understanding of that, that allows kind of that gestation period of 2 to 14 days to get -- for the Chinese government to get better visibility of what's going to take place there. So what's embedded right now is the fact that where we have embedded the one additional week of shutdown in China. We haven't embedded in our forecasting, changes beyond that at this state because it's just too fluid. It's hard to predict exactly what that's going to be. It certainly has the potential of getting worse, but right now we don't have that disability.

Great. Thanks for taking my questions.

Thanks, Erin. And we'll take our next caller please.

Thank you. Our next question comes from Matt Sheerin from Stifel. Please go ahead.

Yes. Thank you. Good morning. I just wanted to get back to your revenue guidance for the year were up modestly which shows that a stronger back-half in terms of by segment, are you expecting each of the segments to be up as well or would it be more slanted towards the auto and industrial given that the correction is still playing out in electronics. And then, also relative to margin -- where margins shake out this year, are you expecting to grow operating margin and operating profits this year despite the fact that you still looking at some headwinds in terms of costs and transition costs and other things like that?

Yes, Matt. Let me talk a little bit about the revenue growth and then, Meenal can talk about kind of the bottom-line growth associated with that. Our current view today is that we expect growth in all three of the segments in 2020. Yes, to varying degrees. We're not giving guidance on, each one of those segments. But we are expecting growth in all three of those areas. Certainly we know with the dynamics I talked about earlier in electronics and the comps. So if you look at electronics, it was falling steeply through the first half of 2018 so from a comp perspective, we're not going to have growth in electronics in the first half, but we certainly expect kind of return to growth in the back half and for that to outpace the level of decline in the first task, so showing growth in electronics. And we expect with the content growth story in automotive, even with kind of an end market challenge or car build, we'll have growth there. In industrial, we continue to see good success we've had in the last year. From an operating margin perspective, Meenal, why don't you talk to that.

Sure. So, Matt, it's part of my prepared remarks what I mentioned is with the low single digit sales growth that we guided for the full year. We said that we would have year-over-year operating margin expansion and that we would see leverage in our EPS growth, but it would be lower than typical levels are lower than normal. So as an example, low single digits growth, we might in a typical year, we might see mid single-digit EPS, it would be on the -- a little bit on the lighter end of that because of the couple of things I mentioned, one being the footprint, the footprint activities that we're undertaking, but also really I'll call them general market dynamics around foreign exchange remains a headwind for us for 2020 today. And then, we have with our lower tax rate in '19, we have a little bit of a tax rate headwind as well. So that's why it's a more of a diminished the leverage, but we absolutely expect to grow EPS and operating margin expansion.

Sure. So, we certainly expect to get bottom-line leverage, just maybe dampened a little bit more than what we would like to see because of strategic investments we're making to set up for the long-term.

Okay. And then, you did talk about a transition costs relative to some further integration of IXYS and other things. Is there anything incremental there, that impacts the margins this year in that, looking next year you'll have even more favorable comps.

Yes. So as part of those remarks that I mentioned is, we've got footprint actions slated. So some of these are these ISIS footprint activities that we've been talking about the past few quarters. Others are ones that we're going to embark on, but we've not shared yet. And we will in future quarters. The combination of all those projects, we expect to have transition costs of about $0.30 to $0.35 linear to EPS this year. And just, the question is, well, "Hey, can you help me a little bit on the segment?" By far the bulk of that is going to be impacting the electronics segment from a year over year perspective because a lot of that is related to the IXYS work. And when I talk about transition costs, that means we have to do some pre-hiring in new locations and we've got product qualifications costs and some transfer costs. That's all part of our adjusted operating margin and adjusted EPS.

So, you're going to run that through the P&L then?

Yes. These are costs that we run through. Again, it ends up being duplicate staff for example, may be. Got it. Okay. Okay. Thank you.

Thank you, Matt. We'll take our next caller please.

Thank you. Our last question comes from David Kelley from Jefferies. Please go ahead.

Good morning. Thanks for taking my questions. Maybe starting with an auto's pricing question from me. I think you referenced an up tick last quarter. You're just curious if that's persistent or maybe even subsided now that the market seems a bit more stable or as pricing at this point, more a function of the competitive landscape you're seeing at the moment.

Yes. I would say in pricing in the automotive segment for us, we had talked about it being a little more challenging than we've seen in the past. I would say today our view would be pricing year-to-year kind of has this range. Maybe we're on the higher end of the range. We're certainly not out of kind of a normal range in the automotive segment. So we're not seeing kind of outsized pressures there and -- as the current state.

Okay. Got it. Thank you. And then maybe if you could provide a bit more color on the sensor program delays, you referenced. And also is that light vehicle or commercial vehicle customers specific?

Yes. Most of the delays in the programs we're talking about are in the passenger car light vehicle world. And the issues, these are customer delays, not Littelfuse delays. And they vary. There's a handful of them and they vary everything from -- there's one big program where actually they're delayed because another supplier can't supply components they need or their system. So it's pushed out the introduction of the new system. And in other cases, OEMs have delayed the launch of changes to some of their systems. So there's a variety of reasons. There are reasons, they're not long-term, they're not issues that are going to extend materially, but they are delays. That certainly impacted our fourth quarter a bit.

Okay, great. Thank you. Last one for me and maybe ending on kind of a high level question. You referenced the ADAS opportunity hit about pacing expectations. I guess, how do you think about, or how should we think about your addressable market in advanced data? So like the level two, what's called bubble tube plus content? And maybe if you could just kind of high level discuss some of your content opportunities you see as, as the adoption of the more advanced ADAS content grows.

Yes. The first thing I would remind you and others is that those revenues show up actually in our electronic segments because they are electronic technologies that are being designed into those automotive applications. So it's not in the electrical infrastructure of the vehicle, if you will. So, it shows up in the electronics segment of our business. And what I would say is these are traditional circuit protection types of products, whether they're over voltage protection, over current protection, over temperature protection. Those sorts of things where we are designing in our electronic products with kind of automotive qualifications and they're slightly different designs and manufacturing processes that we use to support automotive requirements. What I would say is, the content growth in the electronic systems continues to grow in the vehicle. Our share in that space, still allows for us to go after further share potential as well. So it's really kind of, they aren't particularly unique technologies for our portfolio. They're kind of our core technology, focused in the automotive areas. So we just see that lift in content and the opportunity for us continuing to drive growth in the electronics part of our business.

All right, perfect. Thank you.

Thanks David. And thanks for joining us on today's call and your interest in Littelfuse. We look forward to talking with you again soon. Have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.