Littelfuse Reports Third Quarter Results
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CHICAGO--(BUSINESS WIRE)-- Littelfuse, Inc. (NASDAQ: LFUS) today reported sales and earnings for the third quarter of 2009, which were at the high end of guidance issued on September 16, 2009.
Third Quarter Highlights
-- Sales for the third quarter of 2009 were $116.4 million, a 15%
sequential increase from the second quarter of 2009 and an 18% decline
compared to the prior-year quarter.
-- Diluted earnings per share for the third quarter of 2009 were $0.37 on a
GAAP basis, compared to $0.18 for the third quarter of 2008.
-- Adjusted diluted earnings per share for the third quarter of 2009 were
$0.33, which excludes a one-time tax benefit and restructuring charges
primarily related to the consolidation of facilities in Europe (see
Supplemental Information on page 8).
-- Capital expenditures for the third quarter of 2009 were $2.0 million,
which was down from $4.2 million in the second quarter of 2009 and $7.2
million in the first quarter of 2009.
-- Cash provided by operating activities was $5.0 million for the third
quarter of 2009, which included a $6.4 million contribution to the
company's U.S. pension fund. Excluding the pension contribution, cash
provided by operating activities was $11.4 million for the quarter.
-- The company ended the third quarter of 2009 with $57.4 million in cash
and $71.5 million of borrowing capacity under its revolving credit
facility. At September 26, 2009, the company was in compliance with all
debt covenants and expects to remain so for the foreseeable future.
-- The book-to-bill ratio for electronics for the third quarter of 2009 was
1.06.
"The strong sequential sales increase in the third quarter was driven by strengthening electronics and automotive demand and higher output at Startco reflecting recent capacity increases," said Gordon Hunter, Chief Executive Officer. "Improving end markets, automotive incentive programs and low distributor inventories all contributed to the increased demand."
"With our leaner cost structure and lower breakeven point, the recent ramp-up in sales has resulted in strong margin expansion," said Phil Franklin, Chief Financial Officer. "We will continue to tightly control costs even as sales improve to more normal levels in future quarters."
Outlook
-- The company is on a 4-4-5 calendar, which means that the first two
months of each quarter have four weeks each and the last month has five
weeks for a total of 91 days in the quarter. As a result, every seventh
year there is an extra week in the fourth quarter. Accordingly, the
fourth quarter of 2009 will include 14 weeks instead of 13. The
company's fourth quarter ends on January 2, 2010. Because the quarter
extends into January, there will also be additional holidays in this
quarter compared to prior years' fourth quarters.
-- Sales for the fourth quarter of 2009 are expected to be in the range of
$116 to $123 million, which would represent 10% to 16% growth over the
fourth quarter of 2008.
-- Earnings for the fourth quarter of 2009 are expected to be in the range
of $0.33 to $0.46 per diluted share.
-- Capital spending for 2009 is now expected to be $17 to $19 million.
"The Littelfuse team has performed extremely well throughout this very challenging year," said Hunter. "We effectively managed our balance sheet. We executed well on plant moves and lean initiatives. We dramatically reduced operating expenses. And we successfully ramped-up sales and profitability as the global economy recovered. As a result, we will be heading into 2010 with a strong balance sheet, a much-improved cost structure and an enviable market position as the global leader in circuit protection."
Conference Call Webcast Information
Littelfuse will host a conference call today, Thursday, October 29, 2009 at 11:00 a.m. Eastern/10:00 a.m. Central time to discuss the third quarter results. The call will be broadcast live over the Internet and can be accessed through the company's Web site: www.littelfuse.com. Listeners should go to the Web site at least 15 minutes prior to the call to download and install any necessary audio software. The call will be available for replay through December 31, 2009 and can be accessed through the Web site listed above.
About Littelfuse
As the worldwide leader in circuit protection products and solutions with annual sales of $530.9 million in 2008, the Littelfuse portfolio is backed by industry-leading technical support, design and manufacturing expertise. Littelfuse products are vital components in virtually every product that uses electrical energy, including automobiles, computers, consumer electronics, handheld devices, industrial equipment and telecom/datacom circuits. Littelfuse offers Teccor(R), Wickmann(R) and Pudenz(R) brand circuit protection products. In addition to its Chicago, Illinois, world headquarters, Littelfuse has sales, distribution, manufacturing and engineering facilities in Brazil, Canada, China, England, Germany, Hong Kong, India, Japan, Korea, Mexico, the Netherlands, the Philippines, Singapore, Taiwan and the U.S.
For more information, please visit Littelfuse's Web site at www.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 PSLRA. These statements may involve risks and uncertainties, including, but not limited to, risks relating to product demand and market acceptance, economic conditions, the impact of competitive products and pricing, product quality problems or product recalls, capacity and supply difficulties or constraints, coal mining exposures reserves, failure of an indemnification for environmental liability, exchange rate fluctuations, commodity price fluctuations, the effect of the company's accounting policies, labor disputes, restructuring costs in excess of expectations, pension plan asset returns less than assumed, integration of acquisitions and other risks which may be detailed in the company's other 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 report 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 27, 2008. For a further discussion of the risk factors of the company, please see Item 1A. "Risk Factors" to the company's Annual Report on Form 10-K for the year ended December 27, 2008.
LITTELFUSE, INC.
Net Sales by Business Unit and Geography
(In millions of USD, unaudited)
Third Quarter Year-to-Date
2009 2008 % Change 2009 2008 % Change
Business Unit
Electronics $ 71.1 $ 95.8 (26 %) $ 183.8 $ 276.2 (33 %)
Automotive 26.9 28.9 (7 %) 68.6 104.1 (34 %)
Electrical* 18.4 16.8 10 % 49.8 44.7 11 %
Total $ 116.4 $ 141.5 (18 %) $ 302.2 $ 425.0 (29 %)
Third Quarter Year-to-Date
2009 2008 % Change 2009 2008 % Change
Geography
Americas* $ 43.3 $ 51.9 (17 %) $ 116.9 $ 156.7 (25 %)
Europe 21.8 29.0 (25 %) 59.2 98.1 (40 %)
Asia-Pacific 51.3 60.6 (15 %) 126.1 170.2 (26 %)
Total $ 116.4 $ 141.5 (18 %) $ 302.2 $ 425.0 (29 %)
* Startco Engineering, acquired at the beginning of the fourth
quarter 2008, added $7.0 million and $16.6 million in sales to the
Electrical business unit and the Americas' region in the three and
nine months ended September 26, 2009, respectively.
LITTELFUSE, INC.
Condensed Consolidated Balance Sheets
(In thousands of USD)
September 26, 2009 December 27, 2008
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 57,389 $ 70,937
Accounts receivable, less 80,146 62,126
allowances
Inventories 54,100 66,679
Deferred income taxes 11,941 11,693
Prepaid expenses and other 18,116 17,968
current assets
Total current assets 221,692 229,403
Property, plant and equipment:
Land 11,274 11,089
Buildings 73,453 68,165
Equipment 287,560 301,835
372,287 381,089
Accumulated depreciation (221,083 ) (220,939 )
Net property, plant and equipment 151,204 160,150
Intangible assets, net of
amortization:
Patents, licenses and software 12,046 8,077
Distribution network 11,409 11,577
Customer lists, trademarks and 13,037 2,954
tradenames
Goodwill 96,908 106,961
133,400 129,569
Investments 8,325 3,436
Deferred income taxes 13,815 15,235
Other assets 1,170 1,135
Total Assets $ 529,606 $ 538,928
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable $ 19,266 $ 18,854
Accrued payroll 15,328 17,863
Accrued expenses 8,837 17,220
Accrued severance 13,910 8,393
Accrued income taxes 1,745 2,570
Current portion of long-term debt 19,488 8,000
Total current liabilities 78,574 72,900
Long-term debt, less current 58,000 72,000
portion
Accrued severance 395 7,200
Accrued post-retirement benefits 24,546 41,637
Other long-term liabilities 11,261 11,340
Total shareholders' equity 356,830 333,851
Total Liabilities and $ 529,606 $ 538,928
Shareholders' Equity
Common shares issued and
outstanding of
21,766,512 and 21,719,734, at September
26, 2009,
and December 27, 2008,
respectively.
LITTELFUSE, INC.
Consolidated Statements of Income
(In thousands of USD, except per share data, unaudited)
For the Three Months Ended For the Nine Months Ended
Sept. 26, Sept. 27, 2008 Sept. 26, 2009 Sept. 27, 2008
2009
Net sales $ 116,420 $ 141,448 $ 302,219 $ 424,982
Cost of sales 79,804 105,548 221,915 303,139
Gross profit 36,616 35,900 80,304 121,843
Selling,
general and
administrative
expenses 21,174 26,594 66,462 79,216
Research and
development 4,222 6,265 13,755 18,101
expenses
Amortization 1,209 1,030 3,632 2,923
of intangibles
26,605 33,889 83,849 100,240
Operating 10,011 2,011 (3,545 ) 21,603
income (loss)
Interest 537 346 1,844 1,048
expense
Other (income) 648 (3,246 ) (468 ) (2,890 )
expense, net
Income (loss)
before income 8,826 4,911 (4,921 ) 23,445
taxes
Income taxes 768 923 (2,611 ) 6,204
Net income $ 8,058 $ 3,988 $ (2,310 ) $ 17,241
(loss)
Net income
(loss) per
share:
Basic $ 0.37 $ 0.18 $ (0.11 ) $ 0.79
Diluted $ 0.37 $ 0.18 $ (0.11 ) $ 0.79
Weighted
average shares
and
equivalent
shares
outstanding:
Basic 21,750 21,703 21,733 21,724
Diluted 21,882 21,855 21,733 21,871
LITTELFUSE, INC.
Consolidated Statements of Cash Flows
(In thousands of USD, unaudited)
For the Nine Months Ended
Sept. 26, 2009 Sept. 27, 2008
OPERATING ACTIVITIES:
Net (loss) income $ (2,310 ) $ 17,241
Adjustments to reconcile net (loss) income to
net cash
provided by operating activities:
Depreciation 23,618 20,843
Amortization of intangibles 3,632 2,923
Stock-based compensation 4,297 3,770
Loss (gain) on sale of property, plant and 494 (305 )
equipment
Loss on sale of investment 68 -
Asset Impairment 829 -
Pension settlement expenses - 5,725
Changes in operating assets and liabilities:
Accounts receivable (15,984 ) (5,669 )
Inventories 13,826 (6,190 )
Accounts payable and accrued expenses* (12,713 ) (223 )
Accrued payroll and severance (4,456 ) (11,552 )
Accrued taxes (9,582 ) (5,796 )
Prepaid expenses and other (975 ) 7,082
Net cash provided by operating activities 744 27,849
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (13,362 ) (36,956 )
Purchase of business, net of cash acquired (920 ) (9,280 )
Proceeds from sale of investment 133 -
Proceeds from sale of property, plant and 72 3,384
equipment
Net cash used in investing activities (14,077 ) (42,852 )
FINANCING ACTIVITIES:
Proceeds from debt 20,488 75,500
Payments of debt (23,000 ) (51,412 )
Notes receivable, common stock - 5
Purchases of common stock - (6,623 )
Proceeds from exercise of stock options 773 1,687
Net cash (used in) provided by financing (1,739 ) 19,157
activities
Effect of exchange rate changes on cash 1,524 (1,733 )
(Decrease) increase in cash and cash (13,548 ) 2,421
equivalents
Cash and cash equivalents at beginning of 70,937 64,943
period
Cash and cash equivalents at end of period $ 57,389 $ 67,364
* Includes contributions to the Company's U.S. pension fund
LITTELFUSE, INC.
Supplemental Information
(In thousands of USD, except per share data, unaudited)
For the Three Months Ended
September 26, 2009
U.S. GAAP Special Items Adjusted
Net sales $ 116,420 $ - $ 116,420
Cost of sales 79,804 (153 ) (1 ) 79,651
Gross profit 36,616 153 36,769
% of sales 31.5 % 31.6 %
Total operating expenses 26,605 (1,205 ) (2 ) 25,400
% of sales 22.9 % 21.8 %
Operating income 10,011 1,358 11,369
% of sales 8.6 % 9.8 %
Interest/other expense 1,185 - 1,185
(income), net
Income before income taxes 8,826 1,358 10,184
Income tax expense 768 2,185 (3 ) 2,953
Effective tax rate 8.7 % 29.0 %
Net income $ 8,058 $ (827 ) $ 7,231
Net income per diluted $ 0.37 $ (0.04 ) $ 0.33
share:
Weighted average shares and
equivalent shares outstanding - 21,882 21,882 21,882
diluted:
Note: The Company believes that adjusted operating income (loss) is more
indicative of its ongoing operating performance than U.S. GAAP operating income
since the former excludes special charges that are related to closure of legacy
operations.
Special Items:
(1) Relates to severance charges in Germany and the U.S. and a pension
adjustment in Ireland.
(2) Relates to severance and asset impairment charges in Germany and Japan.
(3) Relates to a one-time tax benefit and adjusted to derive a normalized tax
rate.
Source: Littelfuse, Inc.
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