Form 8-K LITTELFUSE INC /DE For: Jul 28
Exhibit 99.1
NEWS RELEASE | Littelfuse Inc. 8755 West Higgins Road, Suite 500 Chicago, Illinois 60631 p: (773) 628-1000 f: (773) 628-0802 www.littelfuse.com |
LITTELFUSE REPORTS SECOND QUARTER RESULTS FOR 2021
Record sales and earnings driven by strong business fundamentals
CHICAGO, July 28, 2021 - Littelfuse, Inc. (NASDAQ: LFUS), an industrial technology manufacturing company empowering a sustainable, connected, and safer world, today reported financial results for the second quarter ended June 26, 2021:
•Net sales of $523.5 million driven by strong demand across a number of electronics, automotive and industrial end markets, and operational execution
•GAAP operating margin was 18.4%; adjusted operating margin was 19.5%
•GAAP diluted EPS of $3.30 and adjusted diluted EPS of $3.41
•Cash flow from operations was $76.2 million and free cash flow was $58.2 million
•The company’s Board of Directors approved a 10% increase in the quarterly cash dividend from $0.48 to $0.53; this equates to an annualized dividend of $2.12 per share
“Through exceptional teamwork and strong business fundamentals, we delivered record revenue and earnings within a challenging operating environment,” said Dave Heinzmann, Littelfuse President and Chief Executive Officer. “I am extremely proud of our day-to-day execution over the past several quarters, while continuing to execute on our strategic initiatives to deliver our five-year strategy. Across our end markets, we expect strong demand through the year, with content growth led by increased electrification and more sophisticated protection.”
Third Quarter of 2021*
For the third quarter, the company expects net sales in the range of $510 to $524 million and adjusted diluted EPS in the range of $3.07 to $3.23.
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*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 $0.53 per share on September 2, 2021 to shareholders of record as of August 19, 2021
Conference Call and Webcast Information
Littelfuse will host a conference call today, Wednesday, July 28, 2021, at 9:00 a.m. Central Time to discuss the results. The call will be broadcast live and available for replay at Littelfuse.com. A slide presentation will be available in the Investor Relations section of the company’s website at Littelfuse.com.
About Littelfuse
Littelfuse (NASDAQ: LFUS) is an industrial technology manufacturing company empowering a sustainable, connected, and safer world. Across more than 15 countries, and with 12,000 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. These statements may involve risks and uncertainties, including, but 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; failure of an indemnification for environmental liability; exchange rate fluctuations; commodity and other raw material price fluctuations; the effect of Littelfuse, Inc.'s ("Littelfuse" or the "Company") 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 26, 2020.
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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 26, 2020, 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 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, consolidated total gross debt, consolidated EBITDA (as defined in the private placement senior notes), and ratio of consolidated total gross debt to consolidated EBITDA. 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 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 consolidated total gross debt, consolidated EBITDA, and ratio of consolidated total gross debt to consolidated EBITDA 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.
CONTACT: Trisha Tuntland
Head of Investor Relations
(773) 628-2163
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LFUS-F
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LITTELFUSE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) | ||||||||||||||
(in thousands) | June 26, 2021 | December 26, 2020 | ||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 616,330 | $ | 687,525 | ||||||||||
Short-term investments | 18 | 54 | ||||||||||||
Trade receivables, less allowances of $46,328 and $45,237 at June 26, 2021 and December 26, 2020, respectively | 313,332 | 232,760 | ||||||||||||
Inventories | 325,774 | 258,002 | ||||||||||||
Prepaid income taxes and income taxes receivable | 3,961 | 3,029 | ||||||||||||
Prepaid expenses and other current assets | 59,503 | 35,939 | ||||||||||||
Total current assets | 1,318,918 | 1,217,309 | ||||||||||||
Net property, plant, and equipment | 352,826 | 344,178 | ||||||||||||
Intangible assets, net of amortization | 307,771 | 291,887 | ||||||||||||
Goodwill | 851,070 | 816,812 | ||||||||||||
Investments | 39,255 | 30,547 | ||||||||||||
Deferred income taxes | 9,837 | 11,224 | ||||||||||||
Right of use lease assets, net | 28,465 | 17,615 | ||||||||||||
Other assets | 19,356 | 18,021 | ||||||||||||
Total assets | $ | 2,927,498 | $ | 2,747,593 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 205,138 | $ | 145,984 | ||||||||||
Accrued liabilities | 126,445 | 110,478 | ||||||||||||
Accrued income taxes | 25,109 | 19,186 | ||||||||||||
Current portion of long-term debt | 25,000 | — | ||||||||||||
Total current liabilities | 381,692 | 275,648 | ||||||||||||
Long-term debt, less current portion | 626,917 | 687,034 | ||||||||||||
Deferred income taxes | 47,518 | 50,134 | ||||||||||||
Accrued post-retirement benefits | 43,176 | 45,802 | ||||||||||||
Non-current operating lease liabilities | 19,241 | 12,950 | ||||||||||||
Other long-term liabilities | 66,734 | 67,252 | ||||||||||||
Total equity | 1,742,220 | 1,608,773 | ||||||||||||
Total liabilities and equity | $ | 2,927,498 | $ | 2,747,593 |
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LITTELFUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME (LOSS)
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
(in thousands, except per share data) | June 26, 2021 | June 27, 2020 | June 26, 2021 | June 27, 2020 | ||||||||||||||||||||||
Net sales | $ | 523,488 | $ | 307,337 | $ | 987,282 | $ | 653,433 | ||||||||||||||||||
Cost of sales | 326,092 | 207,435 | 629,420 | 429,175 | ||||||||||||||||||||||
Gross profit | 197,396 | 99,902 | 357,862 | 224,258 | ||||||||||||||||||||||
Selling, general, and administrative expenses | 73,315 | 53,199 | 131,603 | 104,399 | ||||||||||||||||||||||
Research and development expenses | 16,394 | 13,161 | 31,133 | 27,624 | ||||||||||||||||||||||
Amortization of intangibles | 10,641 | 9,827 | 21,162 | 19,808 | ||||||||||||||||||||||
Restructuring, impairment, and other charges | 789 | 35,665 | 1,226 | 39,627 | ||||||||||||||||||||||
Total operating expenses | 101,139 | 111,852 | 185,124 | 191,458 | ||||||||||||||||||||||
Operating income (loss) | 96,257 | (11,950) | 172,738 | 32,800 | ||||||||||||||||||||||
Interest expense | 4,626 | 5,855 | 9,299 | 11,273 | ||||||||||||||||||||||
Foreign exchange (gain) loss | (1,676) | (6,010) | 5,161 | (3,426) | ||||||||||||||||||||||
Other (income) expense, net | (1,890) | (1,210) | (9,627) | 39 | ||||||||||||||||||||||
Income (loss) before income taxes | 95,197 | (10,585) | 167,905 | 24,914 | ||||||||||||||||||||||
Income taxes | 13,102 | (1,594) | 28,097 | 9,261 | ||||||||||||||||||||||
Net income (loss) | $ | 82,095 | $ | (8,991) | $ | 139,808 | $ | 15,653 | ||||||||||||||||||
Earnings (loss) per share: | ||||||||||||||||||||||||||
Basic | $ | 3.34 | $ | (0.37) | $ | 5.69 | $ | 0.64 | ||||||||||||||||||
Diluted | $ | 3.30 | $ | (0.37) | $ | 5.62 | $ | 0.64 | ||||||||||||||||||
Weighted-average shares and equivalent shares outstanding: | ||||||||||||||||||||||||||
Basic | 24,592 | 24,312 | 24,562 | 24,353 | ||||||||||||||||||||||
Diluted | 24,900 | 24,312 | 24,894 | 24,520 | ||||||||||||||||||||||
Comprehensive income (loss) | $ | 87,549 | $ | (11,408) | $ | 140,391 | $ | (1,743) |
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LITTELFUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended | ||||||||||||||
(in thousands) | June 26, 2021 | June 27, 2020 | ||||||||||||
OPERATING ACTIVITIES | ||||||||||||||
Net income | $ | 139,808 | $ | 15,653 | ||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | 63,947 | 96,009 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Trade receivables | (69,881) | 13,914 | ||||||||||||
Inventories | (38,205) | (10,761) | ||||||||||||
Accounts payable | 38,955 | 3,439 | ||||||||||||
Accrued liabilities and income taxes | 4,488 | (19,144) | ||||||||||||
Prepaid expenses and other assets | (12,766) | 2,176 | ||||||||||||
Net cash provided by operating activities | 126,346 | 101,286 | ||||||||||||
INVESTING ACTIVITIES | ||||||||||||||
Acquisitions of businesses, net of cash acquired | (109,852) | — | ||||||||||||
Purchases of property, plant, and equipment | (32,657) | (29,479) | ||||||||||||
Net proceeds from sale of property, plant, and equipment, and other | 2,569 | 89 | ||||||||||||
Net cash used in investing activities | (139,940) | (29,390) | ||||||||||||
FINANCING ACTIVITIES | ||||||||||||||
Net (payments) proceeds from credit facility | (30,000) | 95,000 | ||||||||||||
Purchases of common stock | — | (22,927) | ||||||||||||
Cash dividends paid | (23,596) | (23,403) | ||||||||||||
All other cash provided by financing activities | 4,413 | 1,856 | ||||||||||||
Net cash (used in) provided by financing activities | (49,183) | 50,526 | ||||||||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (2,894) | (1,694) | ||||||||||||
(Decrease) increase in cash, cash equivalents, and restricted cash | (65,671) | 120,728 | ||||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 687,525 | 531,139 | ||||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 621,854 | $ | 651,867 |
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LITTELFUSE, INC.
NET SALES AND OPERATING INCOME (LOSS) BY SEGMENT
(Unaudited)
Second Quarter | Year-to-Date | |||||||||||||||||||||||||||||||||||||
(in thousands) | 2021 | 2020 | % Growth /(Decline) | 2021 | 2020 | % Growth /(Decline) | ||||||||||||||||||||||||||||||||
Net sales | ||||||||||||||||||||||||||||||||||||||
Electronics | $ | 325,347 | $ | 223,271 | 45.7 | % | $ | 611,882 | $ | 437,460 | 39.9 | % | ||||||||||||||||||||||||||
Automotive | 133,318 | 61,999 | 115.0 | % | 261,847 | 166,769 | 57.0 | % | ||||||||||||||||||||||||||||||
Industrial | 64,823 | 22,067 | 193.8 | % | 113,553 | 49,204 | 130.8 | % | ||||||||||||||||||||||||||||||
Total net sales | $ | 523,488 | $ | 307,337 | 70.3 | % | $ | 987,282 | $ | 653,433 | 51.1 | % | ||||||||||||||||||||||||||
Operating income (loss) | ||||||||||||||||||||||||||||||||||||||
Electronics | $ | 74,236 | $ | 32,651 | 127.4 | % | $ | 129,759 | $ | 64,923 | 99.9 | % | ||||||||||||||||||||||||||
Automotive | 19,258 | (8,857) | 317.4 | % | 39,574 | 5,259 | 652.5 | % | ||||||||||||||||||||||||||||||
Industrial | 8,375 | (23) | 36,513.0 | % | 11,881 | 3,511 | 238.4 | % | ||||||||||||||||||||||||||||||
Other(a) | (5,612) | (35,721) | N.M. | (8,476) | (40,893) | N.M. | ||||||||||||||||||||||||||||||||
Total operating income (loss) | $ | 96,257 | $ | (11,950) | 905.5 | % | $ | 172,738 | $ | 32,800 | 426.6 | % | ||||||||||||||||||||||||||
Operating Margin | 18.4 | % | (3.9) | % | 17.5 | % | 5.0 | % | ||||||||||||||||||||||||||||||
Interest expense | 4,626 | 5,855 | 9,299 | 11,273 | ||||||||||||||||||||||||||||||||||
Foreign exchange (gain) loss | (1,676) | (6,010) | 5,161 | (3,426) | ||||||||||||||||||||||||||||||||||
Other (income) expense, net | (1,890) | (1,210) | (9,627) | 39 | ||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 95,197 | $ | (10,585) | 999.4 | % | $ | 167,905 | $ | 24,914 | 573.9 | % |
(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) | 2021 | 2020 | % Growth /(Decline) | 2021 | 2020 | % Growth /(Decline) | ||||||||||||||||||||||||||||||||
Operating Margin | ||||||||||||||||||||||||||||||||||||||
Electronics | 22.8 | % | 14.6 | % | 8.2 | % | 21.2 | % | 14.8 | % | 6.4 | % | ||||||||||||||||||||||||||
Automotive | 14.4 | % | (14.3) | % | 28.7 | % | 15.1 | % | 3.2 | % | 11.9 | % | ||||||||||||||||||||||||||
Industrial | 12.9 | % | (0.1) | % | 13.0 | % | 10.5 | % | 7.1 | % | 3.4 | % |
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LITTELFUSE, INC.
SUPPLEMENTAL FINANCIAL INFORMATION
(In millions of USD except per share amounts - unaudited)
Non-GAAP EPS reconciliation | ||||||||||||||||||||||||||
Q2-21 | Q2-20 | YTD-21 | YTD-20 | |||||||||||||||||||||||
GAAP diluted EPS | $ | 3.30 | $ | (0.37) | $ | 5.62 | $ | 0.64 | ||||||||||||||||||
EPS impact of Non-GAAP adjustments (below) | 0.11 | 1.08 | 0.46 | 1.36 | ||||||||||||||||||||||
Adjusted diluted EPS | $ | 3.41 | $ | 0.71 | $ | 6.08 | $ | 2.00 |
Non-GAAP adjustments - (income)/expense | ||||||||||||||||||||||||||
Q2-21 | Q2-20 | YTD-21 | YTD-20 | |||||||||||||||||||||||
Acquisition-related and integration costs (a) | $ | 0.5 | $ | 0.1 | $ | 1.3 | $ | 1.3 | ||||||||||||||||||
Purchase accounting inventory adjustments (b) | 3.3 | — | 6.8 | |||||||||||||||||||||||
Restructuring, impairment and other charges (c) | 0.8 | 35.6 | 1.3 | 39.6 | ||||||||||||||||||||||
Loss (gain) on sale of fixed assets (d) | 1.0 | — | (0.9) | — | ||||||||||||||||||||||
Non-GAAP adjustments to operating income | 5.6 | 35.7 | 8.5 | 40.9 | ||||||||||||||||||||||
Other expense, net (e) | 0.5 | 2.0 | 0.5 | 2.0 | ||||||||||||||||||||||
Non-operating foreign exchange (gain) loss | (1.7) | (6.0) | 5.2 | (3.4) | ||||||||||||||||||||||
Non-GAAP adjustments to income before income taxes | 4.4 | 31.7 | 14.2 | 39.5 | ||||||||||||||||||||||
Income taxes (f) | 1.7 | 5.4 | 2.5 | 6.1 | ||||||||||||||||||||||
Non-GAAP adjustments to net income | $ | 2.7 | $ | 26.3 | $ | 11.7 | $ | 33.4 | ||||||||||||||||||
Total EPS impact | $ | 0.11 | $ | 1.08 | $ | 0.46 | $ | 1.36 |
Adjusted operating margin / Adjusted EBITDA reconciliation | ||||||||||||||||||||||||||
Q2-21 | Q2-20 | YTD-21 | YTD-20 | |||||||||||||||||||||||
Net sales | $ | 523.5 | $ | 307.3 | $ | 987.3 | $ | 653.4 | ||||||||||||||||||
GAAP operating income (loss) | 96.3 | $ | (12.0) | 172.7 | $ | 32.8 | ||||||||||||||||||||
Add back non-GAAP adjustments | 5.6 | 35.7 | 8.5 | 40.9 | ||||||||||||||||||||||
Adjusted operating income | $ | 101.9 | $ | 23.7 | $ | 181.2 | $ | 73.7 | ||||||||||||||||||
Adjusted operating margin | 19.5 | % | 7.7 | % | 18.4 | % | 11.3 | % | ||||||||||||||||||
Add back amortization | 10.6 | 9.8 | 21.2 | 19.8 | ||||||||||||||||||||||
Add back depreciation | 13.6 | 13.9 | 27.3 | 27.7 | ||||||||||||||||||||||
Adjusted EBITDA | $ | 126.1 | $ | 47.4 | $ | 229.7 | $ | 121.2 | ||||||||||||||||||
Adjusted EBITDA margin | 24.1 | % | 15.4 | % | 23.3 | % | 18.5 | % |
Net sales reconciliation | Q2-21 vs. Q2-20 | |||||||||||||||||||||||||
Electronics | Automotive | Industrial | Total | |||||||||||||||||||||||
Net sales growth | 46 | % | 115 | % | 194 | % | 70 | % | ||||||||||||||||||
Less: | ||||||||||||||||||||||||||
Acquisitions | — | — | 120 | % | 9 | % | ||||||||||||||||||||
Transfer a product line between segments | (1) | % | — | % | 12 | % | — | % | ||||||||||||||||||
FX impact | 3 | % | 9 | % | 2 | % | 4 | % | ||||||||||||||||||
Organic net sales growth | 44 | % | 106 | % | 60 | % | 57 | % |
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Net sales reconciliation | YTD-21 vs. YTD-20 | |||||||||||||||||||||||||
Electronics | Automotive | Industrial | Total | |||||||||||||||||||||||
Net sales growth | 40 | % | 57 | % | 131 | % | 51 | % | ||||||||||||||||||
Less: | ||||||||||||||||||||||||||
Acquisitions | — | — | 88 | % | 6 | % | ||||||||||||||||||||
Transfer a product line between segments | (1) | % | — | % | 9 | % | — | % | ||||||||||||||||||
FX impact | 3 | % | 7 | % | 2 | % | 4 | % | ||||||||||||||||||
Organic net sales growth | 38 | % | 50 | % | 32 | % | 41 | % |
Income tax reconciliation | ||||||||||||||||||||||||||
Q2-21 | Q2-20 | YTD-21 | YTD-20 | |||||||||||||||||||||||
Income taxes | $ | 13.1 | $ | (1.6) | $ | 28.1 | $ | 9.3 | ||||||||||||||||||
Effective rate | 13.8 | % | 15.1 | % | 16.7 | % | 37.2 | % | ||||||||||||||||||
Non-GAAP adjustments - income taxes | 1.7 | 5.4 | 2.5 | 6.1 | ||||||||||||||||||||||
Adjusted income taxes | $ | 14.8 | $ | 3.8 | $ | 30.6 | $ | 15.4 | ||||||||||||||||||
Adjusted effective rate | 14.8 | % | 18.2 | % | 16.8 | % | 23.8 | % | ||||||||||||||||||
Free cash flow reconciliation | ||||||||||||||||||||||||||
Q2-21 | Q2-20 | YTD-21 | YTD-20 | |||||||||||||||||||||||
Net cash provided by operating activities | $ | 76.2 | $ | 56.0 | $ | 126.3 | $ | 101.3 | ||||||||||||||||||
Less: Purchases of property, plant and equipment | (17.9) | (12.9) | (32.6) | (29.5) | ||||||||||||||||||||||
Free cash flow | $ | 58.2 | $ | 43.1 | $ | 93.7 | $ | 71.8 |
Consolidated Total Debt | As of June 26, 2021 | |||||||
Consolidated total gross debt | $ | 655.6 | ||||||
Unamortized debt issuance costs | (3.7) | |||||||
Consolidated Total Debt | $ | 651.9 | ||||||
Consolidated EBITDA (as defined in the Private Placement Senior Notes) (1) | Twelve Months Ended June 26, 2021 | |||||||
Net Income | $ | 254.1 | ||||||
Interest expense | 19.1 | |||||||
Income taxes | 50.1 | |||||||
Depreciation | 55.7 | |||||||
Amortization | 41.4 | |||||||
Non-cash additions (reductions): | ||||||||
Stock-based compensation expense | 19.5 | |||||||
Purchase accounting inventory step-up charge | 6.8 | |||||||
Unrealized gain on investments | (14.1) | |||||||
Impairment charges | — | |||||||
Other | (4.5) | |||||||
Consolidated EBITDA (as defined in the Private Placement Senior Notes) (1) | $ | 428.1 | ||||||
Ratio of Consolidated total gross debt to Consolidated EBITDA (as defined in Private Placement Senior Notes)* | 1.5x |
* Our Private Placement Senior Notes, with maturities ranging from 2022 to 2030, contain a financial ratio covenant providing that if, as of the last day of each fiscal quarter, the ratio of Consolidated total gross debt at such time to Consolidated EBITDA 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 Private Placement Senior Notes) is triggered.
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(1) Represents Consolidated EBITDA as defined in our 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) For the fiscal year ended December 26, 2020, the Company presented restructuring, impairment and other charges as a separate caption in the Consolidated Statements of Net Income. Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements.
(d) reflected in SG&A, a loss of $1.0 million recorded during the second quarter of 2021 for a total year-to-date gain of $0.9 million from the sale of a building within the Electronics segment 2021.
(e) 2021 amount included $0.5 million of impairment charges on certain other investments. 2020 amount included $1.8 million increase in coal mining reserves and $0.2 million charge for an asset retirement obligation related to the disposal of a business in 2019.
(f) reflected the tax impact associated with the non-GAAP adjustments.
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1 Q2 2021 EARNINGS RELEASE July 28, 2021
2Littelfuse, Inc. © 2021 DISCLAIMERS Important Information About Interfuse, Inc. This presentation does not constitute or form part of, and should not be construed as, an offer or solicitation to purchase or sell securities of Interfuse, Inc. and no investment decision should be made based upon the information provided herein. Interfuse strongly urges you to review its filings with the Securities and Exchange Commission, which can be found at investor.littelfuse.com/sec.cfm. This website also provides additional information about Interfuse. “Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995. The statements in this presentation 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. These statements may involve risks and uncertainties, including, but 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; failure of an indemnification for environmental liability; exchange rate fluctuations; commodity and other raw material price fluctuations; the effect of Interfuse, Inc.'s ("Interfuse" or the "Company") 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 presentation 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 26, 2020. 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 26, 2020, 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 presentation includes the non-GAAP financial measures of organic net sales growth, adjusted operating margin, adjusted diluted earnings per share, adjusted income taxes, adjusted effective tax rate, and free cash flow. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth in the appendix. The company believes that these non-GAAP financial measures provide useful information to investors regarding its operational performance and ability to generate cash enhancing an investor’s overall understanding of its core financial performance. The company believes that these non-GAAP financial measures are commonly used by financial analysts and provide useful information to analysts. Management uses these measures when assessing the performance of the business and for business planning purposes. Note that the definitions of these non-GAAP financial measures may differ from those terms as defined or used by other companies.
BUSINESS UPDATE Dave Heinzmann, President & CEO
4Littelfuse, Inc. © 2021 Q2-21 KEY THEMES Ongoing strong execution within an unprecedented environment Supporting customers while navigating complex operating environment Working to mitigate impact of higher input costs Exceptional teamwork & strong business fundamentals Continued strength across broad range of electronics, transportation & industrial end markets Record quarter of performance Delivered record revenue & adjusted EPS Strong operating margins & operating leverage
5Littelfuse, Inc. © 2021 INDUSTRIAL END MARKETS POSITIONED FOR CONTINUED GROWTH Ongoing strength across HVAC, industrial automation, renewable energy & energy storage systems Captured several new design wins Integration of Hartland Controls going very well Capitalizing on strong HVAC demands Confident combined businesses will unlock other opportunities across industrial applications Q2-21 Highlights Q2-21 Key Design Wins Industrial Automation Renewable Energy HVAC
6Littelfuse, Inc. © 2021 TRANSPORTATION END MARKETS EXTENDING OUR LEADERSHIP POSITION Q2-21 Key Design WinsQ2-21 Highlights xEV & EV Charging Infrastructure High-End Passenger Cars & SUVs EV Commercial Truck Material Handling Strong demand, content growth from EVs & well-equipped passenger vehicles Design activity continues at a robust pace Leveraging technical expertise & close customer relationships Continued momentum in commercial & passenger EVs Broad design wins Ongoing investments across eMobility strategies
7Littelfuse, Inc. © 2021 ELECTRONICS END MARKETS LEVERAGING OUR LEADERSHIP Q2-21 Highlights Q2-21 Key Design Wins Battery Protection, Notebook PCs Telecom, Data Center & Cloud Infrastructure Electric Bicycles Volume & content growth from favorable end market trends Data center & communications infrastructure Building & home automation Consumer electronics Robust design activity Secured a broad range of business wins Ongoing electronification Expanded opportunity pipeline
FINANCIAL UPDATE Meenal Sethna, EVP & CFO
9Littelfuse, Inc. © 2021 See appendix for GAAP to non-GAAP reconciliation Highlights Net sales +13% sequential, +11% excl. Hartland acquisition +70% vs prior year, +57% organic GAAP operating margin 18.4%; adjusted operating margin 19.5%, +240bps sequential Seq. incremental margins 38% Effective tax rate: GAAP 13.8%; adjusted 14.8% Free cash flow $58m; $94m YTD 10% increase in quarterly cash dividend: $0.53 12% CAGR since inceptionGAAP EPS ($0.37) $2.32 $3.30 Adj. EPS $0.71 $2.67 $3.41 $307 $464 $523 Q2-20 Q1-21 Q2-21 (in millions) Q2-21 FINANCIAL PERFORMANCE Revenue & EPS
10Littelfuse, Inc. © 2021 $22 $49 $65 Q2-20 Q1-21 Q2-21 Revenue $62 $129 $133 Q2-20 Q1-21 Q2-21 Revenue Q2-21 SEGMENT PERFORMANCE Electronics Segment Automotive Segment Industrial Segment Revenue +14% sequential Benefitting from volume & content growth across broad range of end markets, as well as solid price realization (in millions) Op Margin 14.6% 19.4% 22.8% $223 $287 $325 Q2-20 Q1-21 Q2-21 Revenue Revenue +4% sequential Impacted most by higher commodity prices & lower price realization due to customer structures Revenue +33% sequential Improvement from manufacturing footprint optimization & solid acquisition performance Op Margin (14.3%) 15.8% 14.4% Op Margin (0.1%) 7.2% 12.9% Productivity improvements driving elevated capacity to meet customer requirements
11Littelfuse, Inc. © 2021 Q3-21 GUIDANCE Highlights Key assumptions Incorporates known customer/supplier supply chain impacts No new material COVID disruptions Total Q3 revenue down 1% sequentially at midpoint Q3 adjusted EPS at midpoint down 8% sequentially 15 cents unfavorable non-operating comps Increasing input cost headwinds 16% tax rate assumed Q4 / Full year 2021 Q4 revenue seasonally down, but better than typical seasonality Full year: Adjusted operating margins 17-19% Adjusted effective tax rate 16-17% Adj. EPS $2.16 $3.41 $3.07 - $3.23 $392 $523 $510 - $524 Q3-20 Q2-21 Q3-21 Revenue & EPS (in millions) See appendix for GAAP to non-GAAP reconciliation
12Littelfuse, Inc. © 2021 Strong first half performance within an ongoing dynamic market environment H2 demand remains strong, supported by order backlog & bookings Sound business fundamentals Well-positioned for continued profitable growth consistent with long-term strategy KEY TAKEAWAYS
13Littelfuse, Inc. © 2021 Q&A
14Littelfuse, Inc. © 2021 APPENDIX
15Littelfuse, Inc. © 2021 SUPPLEMENTAL FINANCIAL INFORMATION
16Littelfuse, Inc. © 2021 SUPPLEMENTAL FINANCIAL INFORMATION CONT’D
17Littelfuse, Inc. © 2021 SUPPLEMENTAL FINANCIAL INFORMATION CONT’D
18Littelfuse, Inc. © 2021 SUPPLEMENTAL FINANCIAL INFORMATION CONT’D Non-GAAP EPS reconciliation Q3-20 GAAP diluted EPS $ 2.25 EPS impact of Non-GAAP adjustments (below) (0.09) Adjusted diluted EPS $ 2.16 Non-GAAP adjustments - (income)/expense Q3-20 Acquisition-related and integration costs (a) $ 0.3 Goodwill impairment charge — Restructuring, impairment and other charges (b) 1.3 Non-GAAP adjustments to operating (loss) income 1.6 Other expense, net (c) 0.1 Non-operating foreign exchange (gain) loss (6.2) Non-GAAP adjustments to income before income taxes (4.5) Income taxes (d) (2.2) Non-GAAP adjustments to net income $ (2.3) Total EPS impact $ (0.09)
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