Strong company performance above guidance
Littelfuse, Inc. (NASDAQ: LFUS), a diversified, industrial
technology manufacturing company empowering a sustainable,
connected, and safer world, today reported financial results for
the first quarter ended April 1, 2023:
- Net sales of $609.8 million were down 2% versus the prior year
period, and down 8% organically
- GAAP diluted EPS was $3.54; adjusted diluted EPS was $3.64
- Cash flow from operations was $53.4 million, up 3% from the
prior year period, and free cash flow was $27.7 million, up 26%
from the prior year period
- On February 3, the company completed the acquisition of Western
Automation Research and Development Limited, 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
“Our global teams delivered strong first quarter results, above
our sales and adjusted EPS guidance, within a tougher electronics
environment,” said Dave Heinzmann, Littelfuse President and Chief
Executive Officer. “The continued resiliency of our business model
and the strength of our execution drove strong overall
profitability. During the quarter, we made significant progress
integrating our strategy-led acquisitions and securing meaningful
new business wins within the global structural themes of
sustainability, connectivity, and safety. As we continue to manage
through some near-term market challenges, our execution,
diversification and strategic investments for growth will deliver
sustained long-term value for all of our stakeholders.”
Second Quarter of 2023*
Based on current market conditions, for the second quarter the
company expects,
- Net sales in the range of $607 to $633 million, adjusted
diluted EPS in the range of $3.20 to $3.45 and an adjusted
effective tax rate of approximately 16%
*Littelfuse provides guidance on a non-GAAP (adjusted) basis.
GAAP items excluded from guidance may include the after-tax impact
of items including acquisition and integration costs,
restructuring, impairment and other charges, certain purchase
accounting adjustments, non-operating foreign exchange adjustments
and significant and unusual items. These items are uncertain,
depend on various factors, and could be material to results
computed in accordance with GAAP. Littelfuse is not able to
forecast the excluded items in order to provide the most directly
comparable GAAP financial measure without unreasonable efforts.
Dividend
- The company will pay a cash dividend on its common stock of
$0.60 per share on June 8, 2023, to shareholders of record as of
May 25, 2023
Conference Call and Webcast
Information
Littelfuse will host a conference call on Wednesday, May 3,
2023, at 9:00 a.m. Central Time to discuss the results. The call
will be broadcast and available for replay at Littelfuse.com. A
slide presentation is available in the Investor Relations section
of the company’s website at Littelfuse.com.
About Littelfuse
Littelfuse, Inc. (NASDAQ: LFUS) is a diversified, industrial
technology manufacturing company empowering a sustainable,
connected, and safer world. Across more than 20 countries, and with
approximately 18,000 global associates, we partner with customers
to design and deliver innovative, reliable solutions. Serving over
100,000 end customers, our products are found in a variety of
industrial, transportation and electronics end markets –
everywhere, every day. Learn more at Littelfuse.com.
“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 Private Securities
Litigation Reform Act. Such statements are based on Littelfuse,
Inc.’s (“Littelfuse” or the “Company”) current expectations and are
subject to a number of factors and uncertainties, which could cause
actual results to differ materially from those described in the
forward-looking statements. These risks and uncertainties, include,
but are not limited to, risks and uncertainties relating to general
economic conditions; the severity and duration of the COVID-19
pandemic and the measures taken in response thereto and the effects
of those items on the company’s business; product demand and market
acceptance; the impact of competitive products and pricing; product
quality problems or product recalls; capacity and supply
difficulties or constraints; coal mining exposures reserves;
cybersecurity matters; failure of an indemnification for
environmental liability; exchange rate fluctuations; commodity and
other raw material price fluctuations; the effect of Littelfuse's
accounting policies; labor disputes; restructuring costs in excess
of expectations; pension plan asset returns less than assumed;
integration of acquisitions; uncertainties related to political or
regulatory changes; and other risks which may be detailed in the
company's 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 December 31, 2022. Further discussion of the risk factors of
the company can be found under the caption "Risk Factors" in the
company's Annual Report on Form 10-K for the year ended December
31, 2022, and in other filings and submissions with the SEC, each
of which are available free of charge on the company’s investor
relations website at investor.littelfuse.com and on the SEC’s
website at www.sec.gov. These forward-looking statements are made
as of the date hereof. The company does not undertake any
obligation to update, amend or clarify these forward-looking
statements to reflect events or circumstances after the date hereof
or to reflect the availability of new information.
Non-GAAP Financial
Measures
The information included in this press release includes the
non-GAAP financial measures of organic net sales (decline) growth,
adjusted operating income, adjusted operating margin, adjusted
EBITDA, adjusted EBITDA margin, adjusted diluted earnings per
share, adjusted income taxes, adjusted effective tax rate, free
cash flow, net debt, consolidated EBITDA, and consolidated net
leverage ratio (as defined in the credit agreement). Many of these
non-GAAP financial measures exclude the effect of certain expenses
and income not related directly to the underlying performance of
our fundamental business operations.
A reconciliation of these non-GAAP financial measures to the
most directly comparable GAAP financial measures is set forth in
the attached schedules.
The company believes that organic net sales (decline) growth,
adjusted operating income, adjusted operating margin, adjusted
EBITDA, adjusted EBITDA margin, adjusted diluted earnings per
share, adjusted income taxes, and adjusted effective tax rate
provide useful information to investors regarding its operational
performance because they enhance an investor’s overall
understanding of our core financial performance and facilitate
comparisons to historical results of operations, by excluding items
that are not related directly to the underlying performance of our
fundamental business operations or were not part of our business
operations during a comparable period. The company believes that
free cash flow is a useful measure of its ability to generate cash.
The company believes that net debt, consolidated EBITDA, and
consolidated net leverage ratio are useful measures of its credit
position. The company believes that all of these non-GAAP financial
measures are commonly used by financial analysts and others in the
industries in which we operate, and thus further provide useful
information to investors. Management additionally uses these
measures when assessing the performance of the business and for
business planning purposes. Note that our definitions of these
non-GAAP financial measures may differ from those terms as defined
or used by other companies.
LFUS-F
LITTELFUSE, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(in thousands)
April 1, 2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
425,127
$
562,588
Short-term investments
85
84
Trade receivables, less allowances of
$88,923 and $83,562 at April 1, 2023 and December 31, 2022,
respectively
324,583
306,578
Inventories
559,828
547,690
Prepaid income taxes and income taxes
receivable
5,857
7,215
Prepaid expenses and other current
assets
86,124
87,641
Total current assets
1,401,604
1,511,796
Net property, plant, and equipment
492,368
481,110
Intangible assets, net of amortization
646,963
593,970
Goodwill
1,289,229
1,186,922
Investments
26,581
24,121
Deferred income taxes
13,780
14,367
Right of use lease assets, net
56,583
57,382
Other long-term assets
34,628
34,066
Total assets
$
3,961,736
$
3,903,734
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
191,346
$
208,571
Accrued liabilities
147,776
187,057
Accrued income taxes
42,587
41,793
Current portion of long-term debt
137,929
134,874
Total current liabilities
519,638
572,295
Long-term debt, less current portion
866,925
866,623
Deferred income taxes
109,453
100,230
Accrued post-retirement benefits
29,557
28,037
Non-current operating lease
liabilities
43,919
45,661
Other long-term liabilities
84,768
79,510
Total equity
2,307,476
2,211,378
Total liabilities and equity
$
3,961,736
$
3,903,734
LITTELFUSE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF NET INCOME
(Unaudited)
Three Months Ended
(in thousands, except per share
data)
April 1, 2023
April 2, 2022
Net sales
$
609,782
$
623,330
Cost of sales
364,825
364,734
Gross profit
244,957
258,596
Selling, general, and administrative
expenses
88,310
75,508
Research and development expenses
27,290
19,556
Amortization of intangibles
16,866
12,724
Restructuring, impairment, and other
charges
1,850
218
Total operating expenses
134,316
108,006
Operating income
110,641
150,590
Interest expense
9,646
4,302
Foreign exchange (gain) loss
(1,675
)
7,736
Other (income) expense, net
(6,233
)
4,427
Income before income taxes
108,903
134,125
Income taxes
20,158
16,607
Net income
$
88,745
$
117,518
Earnings per share:
Basic
$
3.58
$
4.76
Diluted
$
3.54
$
4.70
Weighted-average shares and equivalent
shares outstanding:
Basic
24,782
24,689
Diluted
25,062
24,981
Comprehensive income
$
102,028
$
115,315
LITTELFUSE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
(in thousands)
April 1, 2023
April 2, 2022
OPERATING ACTIVITIES
Net income
$
88,745
$
117,518
Adjustments to reconcile net income to net
cash provided by operating activities:
32,558
47,966
Changes in operating assets and
liabilities:
Trade receivables
(13,176
)
(45,945
)
Inventories
(1,535
)
(30,879
)
Accounts payable
(16,246
)
(6,611
)
Accrued liabilities and income taxes
(43,578
)
(36,287
)
Prepaid expenses and other assets
6,639
5,969
Net cash provided by operating
activities
53,407
51,731
INVESTING ACTIVITIES
Acquisitions of businesses, net of cash
acquired
(158,260
)
—
Purchases of property, plant, and
equipment
(25,665
)
(29,809
)
Net proceeds from sale of property, plant
and equipment, and other
737
21
Net cash used in investing activities
(183,188
)
(29,788
)
FINANCING ACTIVITIES
Net payments of credit facility
(1,875
)
(25,000
)
Cash dividends paid
(14,880
)
(13,086
)
All other cash provided by financing
activities
4,551
1,016
Net cash used in financing activities
(12,204
)
(37,070
)
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
4,571
(2,738
)
Decrease in cash, cash equivalents, and
restricted cash
(137,414
)
(17,865
)
Cash, cash equivalents, and restricted
cash at beginning of period
564,939
482,836
Cash, cash equivalents, and restricted
cash at end of period
$
427,525
$
464,971
LITTELFUSE, INC.
NET SALES AND OPERATING INCOME
BY SEGMENT
(Unaudited)
First Quarter
(in thousands)
2023
2022
% Growth
/(Decline)
Net sales
Electronics
$
358,593
$
365,821
(2.0
)%
Transportation
166,641
184,504
(9.7
)%
Industrial
84,548
73,005
15.8
%
Total net sales
$
609,782
$
623,330
(2.2
)%
Operating income
Electronics
$
90,162
$
120,577
(25.2
)%
Transportation
8,532
26,308
(67.6
)%
Industrial
17,141
12,505
37.1
%
Other(a)
(5,194
)
(8,800
)
N.M.
Total operating income
$
110,641
$
150,590
(26.5
)%
Operating Margin
18.1
%
24.2
%
Interest expense
9,646
4,302
Foreign exchange (gain) loss
(1,675
)
7,736
Other (income) expense, net
(6,233
)
4,427
Income before income taxes
$
108,903
$
134,125
(18.8
)%
(a) "other" typically includes non-GAAP
adjustments such as acquisition-related and integration costs,
purchase accounting inventory adjustments and restructuring and
impairment charges. (See Supplemental Financial Information for
details.)
N.M. - Not meaningful
First Quarter
(in thousands)
2023
2022
% Growth
/(Decline)
Operating Margin
Electronics
25.1
%
33.0
%
(7.9
)%
Transportation
5.1
%
14.3
%
(9.2
)%
Industrial
20.3
%
17.1
%
3.2
%
LITTELFUSE, INC.
SUPPLEMENTAL FINANCIAL
INFORMATION
(In millions of USD except per share
amounts - unaudited)
Non-GAAP EPS reconciliation
Q1-23
Q1-22
GAAP diluted EPS
$
3.54
$
4.70
EPS impact of Non-GAAP adjustments
(below)
0.10
0.29
Adjusted diluted EPS
$
3.64
$
4.99
Non-GAAP adjustments - (income) /
expense
Q1-23
Q1-22
Acquisition-related and integration costs
(a)
$
3.3
$
3.8
Purchase accounting inventory adjustments
(b)
—
4.8
Restructuring, impairment and other
charges (c)
1.9
0.2
Non-GAAP adjustments to operating
income
5.2
8.8
Other income, net (d)
(0.2
)
—
Non-operating foreign exchange (gain)
loss
(1.7
)
7.7
Non-GAAP adjustments to income before
income taxes
3.3
16.5
Income taxes (e)
0.9
9.5
Non-GAAP adjustments to net income
$
2.4
$
7.0
Total EPS impact
$
0.10
$
0.29
Adjusted operating margin / Adjusted
EBITDA reconciliation
Q1-23
Q1-22
Net sales
$
609.8
$
623.3
GAAP operating income
$
110.6
$
150.6
Add back non-GAAP adjustments
5.2
8.8
Adjusted operating income
$
115.8
$
159.4
Adjusted operating margin
19.0
%
25.6
%
Add back amortization
16.9
12.7
Add back depreciation
17.6
15.6
Adjusted EBITDA
$
150.3
$
187.7
Adjusted EBITDA margin
24.6
%
30.1
%
Adjusted EBITDA by Segment
Q1-23
Q1-22
Electronics
Transportation
Industrial
Electronics
Transportation
Industrial
GAAP operating income
$
90.2
$
8.5
$
17.1
$
120.6
$
26.3
$
12.5
Add:
Add back amortization
10.2
4.5
2.2
6.8
4.7
1.2
Add back depreciation
9.6
6.8
1.2
8.6
6.0
1.0
Adjusted EBITDA
$
110.0
$
19.8
$
20.5
$
136.0
$
37.0
$
14.7
Adjusted EBITDA Margin
30.7
%
11.9
%
24.3
%
37.2
%
20.1
%
20.1
%
Net sales reconciliation
Q1-23 vs. Q1-22
Electronics
Transportation
Industrial
Total
Net sales (decline) growth
(2
)%
(10
)%
16
%
(2
)%
Less:
Acquisitions
12
%
1
%
4
%
7
%
FX impact
(2
)%
(3
)%
(1
)%
(1
)%
Organic net sales (decline) growth
(12
)%
(8
)%
13
%
(8
)%
Income tax reconciliation
Q1-23
Q1-22
Income taxes
$
20.2
$
16.6
Effective rate
18.5
%
12.4
%
Non-GAAP adjustments - income taxes
0.9
9.5
Adjusted income taxes
$
21.1
$
26.1
Adjusted effective rate
18.8
%
17.3
%
Free cash flow reconciliation
Q1-23
Q1-22
Net cash provided by operating
activities
$
53.4
$
51.7
Less: Purchases of property, plant and
equipment
(25.7
)
(29.8
)
Free cash flow
$
27.7
$
21.9
Consolidated Total Debt
As of April 1, 2023
Consolidated Total Debt
$
1,004.9
Unamortized debt issuance costs
4.6
Consolidated funded indebtedness
1,009.5
Cash held in U.S. (up to $400 million)
79.9
Net debt
$
929.6
Consolidated EBITDA
Twelve Months Ended April 1,
2023
Net Income
$
344.4
Interest expense
31.6
Income taxes
73.3
Depreciation
67.1
Amortization
59.8
Non-cash additions:
Stock-based compensation expense
23.5
Purchase accounting inventory step-up
charge
10.8
Unrealized loss on investments
7.5
Impairment charges
4.5
Other
56.9
Consolidated EBITDA (1)
$
679.4
Consolidated Net Leverage Ratio (as
defined in the Credit Agreement) *
1.4x
* Our Credit Agreement and Private
Placement Note with maturities ranging from 2023 to 2032, contain
financial ratio covenants providing that if, as of the last day of
each fiscal quarter, the Consolidated Net Leverage ratio at such
time for the then most recently concluded period of four
consecutive fiscal quarters of the Company exceeds 3.50:1.00, an
Event of Default (as defined in the Credit Agreement and Private
Placement Senior Notes) is triggered.
The Credit Agreement and Private Placement
Senior Notes were amended in Q2 2022 and now allow for the addition
of acquisition and integration costs up to 15% of Consolidated
EBITDA and the netting of up to $400M of Available Cash (Cash held
by US Subsidiaries).
(1) Represents Consolidated EBITDA as
defined in our Credit Agreement and Private Placement Senior Notes
and is calculated using the most recently concluded period of four
consecutive quarters.
Note: Total will not always foot due to
rounding.
(a) reflected in selling, general and
administrative expenses ("SG&A").
(b) reflected in cost of sales.
(c) reflected in restructuring, impairment
and other charges.
(d) reflected gain of $0.2 million from
the sale of a building within the Electronics segment in the first
quarter of 2023.
(e) reflected the tax impact associated
with the non-GAAP adjustments, and 2022 amount includes the
one-time net benefit of $7.2 million that resulted from the
dissolution of one of the Company’s affiliates.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230502005387/en/
Trisha Tuntland Head of Investor Relations
(773) 628-2163
Littelfuse (NASDAQ:LFUS)
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