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,
| December 31,
| ||||
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,
| July 2,
| July 1,
| July 2,
| ||||||||||
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 | ||||||||||||||
