Resilient business model continues to deliver
strong year-to-date performance
Littelfuse, Inc. (NASDAQ: LFUS), a diversified, industrial
technology manufacturing company empowering a sustainable,
connected, and safer world, today reported financial results for
the second quarter ended July 1, 2023:
- Net sales of $612.0 million were down 1% versus the prior year
period, and down 8% organically
- GAAP diluted EPS was $2.79; adjusted diluted EPS was $3.12
- Cash flow from operations was $98.2 million and free cash flow
was $82.4 million
- On June 28, the company entered into a purchase agreement to
acquire a 200mm wafer fab from Elmos Semiconductor SE, enhancing
its power semiconductor capabilities to support long-term business
opportunities in high-growth industrial end markets
- The company’s Board of Directors approved an 8% increase in the
quarterly cash dividend from $0.60 to $0.65; this equates to an
annualized dividend of $2.60 per share
- On July 28, the company released its 2022 Sustainability Report
on littelfuse.com/about-us/sustainability
“We delivered solid results in the second quarter driven by our
strong operating fundamentals, within an ongoing dynamic
environment,” said Dave Heinzmann, Littelfuse President and Chief
Executive Officer. “During the quarter, we secured significant new
business in sustainability, connectivity, and safety applications,
and continued to advance our strategic investments in high-growth
end markets. Our strong overall performance to date, in 2023,
reflects the resiliency of our business model. Looking ahead, our
diverse technologies and capabilities, and the strength of our
execution, continue to position us to deliver on our long-term
growth strategy.”
Third Quarter of 2023*
Based on current market conditions, for the third quarter the
company expects,
- Net sales in the range of $570 to $595 million, adjusted
diluted EPS in the range of $2.48 to $2.72 and an adjusted
effective tax rate of approximately 19.5%
*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
$0.65 per share on September 7, 2023, to shareholders of record as
of August 24, 2023
Conference Call and Webcast
Information
Littelfuse will host a conference call on Wednesday, August 2,
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)
July 1, 2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
480,743
$
562,588
Short-term investments
84
84
Trade receivables, less allowances of
$86,968 and $83,562 at July 1, 2023 and December 31, 2022,
respectively
339,637
306,578
Inventories
527,151
547,690
Prepaid income taxes and income taxes
receivable
3,407
7,215
Prepaid expenses and other current
assets
90,324
87,641
Total current assets
1,441,346
1,511,796
Net property, plant, and equipment
481,567
481,110
Intangible assets, net of amortization
628,333
593,970
Goodwill
1,289,188
1,186,922
Investments
25,248
24,121
Deferred income taxes
13,394
14,367
Right of use lease assets, net
56,379
57,382
Other long-term assets
40,259
34,066
Total assets
$
3,975,714
$
3,903,734
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
173,353
$
208,571
Accrued liabilities
143,843
187,057
Accrued income taxes
41,049
41,793
Current portion of long-term debt
137,435
134,874
Total current liabilities
495,680
572,295
Long-term debt, less current portion
864,223
866,623
Deferred income taxes
104,121
100,230
Accrued post-retirement benefits
30,038
28,037
Non-current operating lease
liabilities
43,571
45,661
Other long-term liabilities
80,830
79,510
Total equity
2,357,251
2,211,378
Total liabilities and equity
$
3,975,714
$
3,903,734
LITTELFUSE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF NET INCOME
(Unaudited)
Three Months Ended
Six Months Ended
(in thousands, except per share
data)
July 1, 2023
July 2, 2022
July 1, 2023
July 2, 2022
Net sales
$
611,997
$
618,436
$
1,221,779
$
1,241,766
Cost of sales
377,165
355,465
741,990
720,199
Gross profit
234,832
262,971
479,789
521,567
Selling, general, and administrative
expenses
94,543
93,093
182,853
168,601
Research and development expenses
24,496
23,488
51,786
43,044
Amortization of intangibles
16,885
11,592
33,751
24,316
Restructuring, impairment, and other
charges
6,855
634
8,705
852
Total operating expenses
142,779
128,807
277,095
236,813
Operating income
92,053
134,164
202,694
284,754
Interest expense
10,056
4,368
19,702
8,670
Foreign exchange (gain) loss
(1,404
)
14,124
(3,079
)
21,860
Other (income) expense, net
(2,050
)
6,060
(8,283
)
10,487
Income before income taxes
85,451
109,612
194,354
243,737
Income taxes
15,380
22,596
35,538
39,203
Net income
$
70,071
$
87,016
$
158,816
$
204,534
Earnings per share:
Basic
$
2.82
$
3.52
$
6.40
$
8.28
Diluted
$
2.79
$
3.48
$
6.33
$
8.19
Weighted-average shares and equivalent
shares outstanding:
Basic
24,839
24,734
24,810
24,712
Diluted
25,095
24,985
25,078
24,986
Comprehensive income
$
55,160
$
55,667
$
157,188
$
170,982
LITTELFUSE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
(in thousands)
July 1, 2023
July 2, 2022
OPERATING ACTIVITIES
Net income
$
158,816
$
204,534
Adjustments to reconcile net income to net
cash provided by operating activities:
83,347
114,659
Changes in operating assets and
liabilities:
Trade receivables
(30,562
)
(76,807
)
Inventories
26,638
(70,285
)
Accounts payable
(33,796
)
9,153
Accrued liabilities and income taxes
(57,790
)
(23,107
)
Prepaid expenses and other assets
4,980
7,175
Net cash provided by operating
activities
151,633
165,322
INVESTING ACTIVITIES
Acquisitions of businesses, net of cash
acquired
(158,260
)
(9,758
)
Purchases of property, plant, and
equipment
(41,501
)
(56,151
)
Net proceeds from sale of property, plant
and equipment, and other
741
542
Net cash used in investing activities
(199,020
)
(65,367
)
FINANCING ACTIVITIES
Net payments of credit facility
(3,750
)
275,000
Cash dividends paid
(29,790
)
(26,201
)
All other cash provided by (used in)
financing activities
854
(3,782
)
Net cash (used in) provided by financing
activities
(32,686
)
245,017
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(1,772
)
(15,511
)
(Decrease) increase in cash, cash
equivalents, and restricted cash
(81,845
)
329,461
Cash, cash equivalents, and restricted
cash at beginning of period
564,939
482,836
Cash, cash equivalents, and restricted
cash at end of period
$
483,094
$
812,297
LITTELFUSE, INC.
NET SALES AND OPERATING INCOME
BY SEGMENT
(Unaudited)
Second Quarter
Year-to-Date
(in thousands)
2023
2022
% Growth /
(Decline)
2023
2022
% Growth
/(Decline)
Net sales
Electronics
$
350,147
$
358,176
(2.2
)%
$
708,740
$
723,997
(2.1
)%
Transportation
172,048
182,027
(5.5
)%
338,689
366,531
(7.6
)%
Industrial
89,802
78,233
14.8
%
174,350
151,238
15.3
%
Total net sales
$
611,997
$
618,436
(1.0
)%
$
1,221,779
$
1,241,766
(1.6
)%
Operating income
Electronics
$
79,844
$
105,958
(24.6
)%
$
170,006
$
226,535
(25.0
)%
Transportation
7,789
18,309
(57.5
)%
16,321
44,617
(63.4
)%
Industrial
15,108
15,285
(1.2
)%
32,249
27,790
16.0
%
Other(a)
(10,688
)
(5,388
)
N.M.
(15,882
)
(14,188
)
N.M.
Total operating income
$
92,053
$
134,164
(31.4
)%
$
202,694
$
284,754
(28.8
)%
Operating Margin
15.0
%
21.7
%
16.6
%
22.9
%
Interest expense
10,056
4,368
19,702
8,670
Foreign exchange (gain) loss
(1,404
)
14,124
(3,079
)
21,860
Other (income) expense, net
(2,050
)
6,060
(8,283
)
10,487
Income before income taxes
$
85,451
$
109,612
(22.0
)%
$
194,354
$
243,737
(20.3
)%
(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
Second Quarter
Year-to-Date
(in thousands)
2023
2022
% (Decline)
2023
2022
% Growth
/(Decline)
Operating Margin
Electronics
22.8
%
29.6
%
(6.8
)%
24.0
%
31.3
%
(7.3
)%
Transportation
4.5
%
10.1
%
(5.6
)%
4.8
%
12.2
%
(7.4
)%
Industrial
16.8
%
19.5
%
(2.7
)%
18.5
%
18.4
%
0.1
%
LITTELFUSE, INC.
SUPPLEMENTAL FINANCIAL
INFORMATION
(In millions of USD except per
share amounts - unaudited)
Non-GAAP EPS reconciliation
Q2-23
Q2-22
YTD-23
YTD-22
GAAP diluted EPS
$
2.79
$
3.48
$
6.33
$
8.19
EPS impact of Non-GAAP adjustments
(below)
0.33
0.78
0.42
1.06
Adjusted diluted EPS
$
3.12
$
4.26
$
6.75
$
9.25
Non-GAAP adjustments - (income) /
expense
Q2-23
Q2-22
YTD-23
YTD-22
Acquisition-related and integration costs
(a)
$
3.8
$
4.8
$
7.2
$
8.6
Purchase accounting inventory adjustments
(b)
—
—
—
4.8
Restructuring, impairment and other
charges (c)
6.9
0.6
8.7
0.8
Non-GAAP adjustments to operating
income
10.7
5.4
15.9
14.2
Other income, net (d)
—
(0.5
)
(0.2
)
(0.5
)
Non-operating foreign exchange (gain)
loss
(1.4
)
14.1
(3.1
)
21.9
Non-GAAP adjustments to income before
income taxes
9.3
19.0
12.6
35.6
Income taxes (e)
1.0
(0.4
)
1.9
9.1
Non-GAAP adjustments to net income
$
8.3
$
19.4
$
10.7
$
26.5
Total EPS impact
$
0.33
$
0.78
$
0.42
$
1.06
Adjusted operating margin / Adjusted
EBITDA reconciliation
Q2-23
Q2-22
YTD-23
YTD-22
Net sales
$
612.0
$
618.4
$
1,221.8
$
1,241.8
GAAP operating income
$
92.1
$
134.2
$
202.7
$
284.8
Add back non-GAAP adjustments
10.7
5.4
15.9
14.2
Adjusted operating income
$
102.8
$
139.6
$
218.6
$
299.0
Adjusted operating margin
16.8
%
22.6
%
17.9
%
24.1
%
Add back amortization
16.9
11.6
33.8
24.3
Add back depreciation
18.0
15.7
35.6
31.3
Adjusted EBITDA
$
137.7
$
166.9
$
288.0
$
354.6
Adjusted EBITDA margin
22.5
%
27.0
%
23.6
%
28.6
%
Adjusted EBITDA by Segment
Q2-23
Q2-22
Electronics
Transportation
Industrial
Electronics
Transportation
Industrial
GAAP operating income
$
79.8
$
7.8
$
15.1
$
106.0
$
18.3
$
15.3
Add:
Add back amortization
10.1
4.2
2.7
6.1
4.3
1.2
Add back depreciation
9.7
6.9
1.4
8.4
6.3
1.0
Adjusted EBITDA
$
99.6
$
18.9
$
19.2
$
120.5
$
28.9
$
17.5
Adjusted EBITDA Margin
28.5
%
11.0
%
21.4
%
33.6
%
15.9
%
22.3
%
Adjusted EBITDA by Segment
YTD-23
YTD-22
Electronics
Transportation
Industrial
Electronics
Transportation
Industrial
GAAP operating income
$
170.0
$
16.3
$
32.2
$
226.5
$
44.6
$
27.8
Add:
Add back amortization
20.3
8.6
4.9
12.8
9.0
2.5
Add back depreciation
19.5
13.6
2.5
17.1
12.3
1.9
Adjusted EBITDA
$
209.9
$
38.5
$
39.6
$
256.4
$
65.9
$
32.2
Adjusted EBITDA Margin
29.6
%
11.4
%
22.8
%
35.4
%
18.0
%
21.3
%
Net sales reconciliation
Q2-23 vs. Q2-22
Electronics
Transportation
Industrial
Total
Net sales (decline) growth
(2
)%
(5
)%
15
%
(1
)%
Less:
Acquisitions
11
%
1
%
6
%
7
%
FX impact
—
%
—
%
—
%
—
%
Organic net sales (decline) growth
(13
)%
(6
)%
9
%
(8
)%
Net sales reconciliation
YTD-23 vs. YTD-22
Electronics
Transportation
Industrial
Total
Net sales (decline) growth
(2
)%
(8
)%
15
%
(2
)%
Less:
Acquisitions
12
%
—
%
5
%
7
%
FX impact
(1
)%
(1
)%
(1
)%
(1
)%
Organic net sales (decline) growth
(13
)%
(7
)%
11
%
(8
)%
Income tax reconciliation
Q2-23
Q2-22
YTD-23
YTD-22
Income taxes
$
15.4
$
22.6
$
35.5
$
39.2
Effective rate
18.0
%
20.6
%
18.3
%
16.1
%
Non-GAAP adjustments - income taxes
1.0
(0.4
)
1.9
9.1
Adjusted income taxes
$
16.4
$
22.2
$
37.4
$
48.3
Adjusted effective rate
17.4
%
17.3
%
18.1
%
17.3
%
Free cash flow reconciliation
Q2-23
Q2-22
YTD-23
YTD-22
Net cash provided by operating
activities
$
98.2
$
113.6
$
151.6
$
165.3
Less: Purchases of property, plant and
equipment
(15.8
)
(26.4
)
(41.5
)
(56.2
)
Free cash flow
$
82.4
$
87.2
$
110.1
$
109.1
Consolidated Total Debt
As of July 1, 2023
Consolidated Total Debt
$
1,001.7
Unamortized debt issuance costs
4.3
Consolidated funded indebtedness
1,006.0
Cash held in U.S. (up to $400 million)
127.4
Net debt
$
878.6
Consolidated EBITDA
Twelve Months Ended July 1,
2023
Net Income
$
327.4
Interest expense
37.2
Income taxes
66.1
Depreciation
69.3
Amortization
65.1
Non-cash additions:
Stock-based compensation expense
24.6
Purchase accounting inventory step-up
charge
10.8
Unrealized loss on investments
0.8
Impairment charges
8.5
Other
19.4
Consolidated EBITDA (1)
$
629.2
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 YTD gain of $0.2 million
from the sale of a building within the Electronics segment in the
first quarter of 2023. 2022 amount included $0.5 million gain from
the sale of a building within Transportation segment.
(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/20230801001781/en/
Trisha Tuntland Head of Investor Relations
(773) 628-2163
Littelfuse (NASDAQ:LFUS)
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