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Littelfuse Reports Third Quarter Results For 2021

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Record sales and earnings driven by strong business fundamentals

CHICAGO, October 26, 2021--(BUSINESS WIRE)--Littelfuse, Inc. (NASDAQ: LFUS), an industrial technology manufacturing company empowering a sustainable, connected, and safer world, today reported financial results for the third quarter ended September 25, 2021:

  • Net sales of $539.6 million primarily driven by stronger than expected demand across the electronics segment

  • GAAP operating margin was 22.3%; adjusted operating margin was 22.8%

  • GAAP diluted EPS of $3.69 and adjusted diluted EPS of $3.95

  • Cash flow from operations was $114.3 million and free cash flow was $89.4 million

  • On October 20, the company announced it has entered into a definitive agreement to acquire Carling Technologies, Inc., a global leader in switching, circuit protection, and power distribution technologies with a strong presence in commercial vehicle and telecom infrastructure markets; the company has annualized sales of approximately $170 million

"Our ability to effectively execute within this challenging environment enabled us to deliver a quarter of outstanding performance," said Dave Heinzmann, Littelfuse President and Chief Executive Officer. "Across our global footprint, our highly skilled teams are continuously improving our operations to meet customer demand, and our results reflect their commitment and hard work. We also made further progress on our growth strategy and are excited to welcome Carling Technologies employees to the Littelfuse team. As we near the end of a challenging 2021, we are poised to achieve significant sales and earnings growth this year, and remain well-positioned to deliver ongoing superior value for our stakeholders."

Fourth Quarter of 2021*

For the fourth quarter, the company expects net sales in the range of $503 to $517 million and adjusted diluted EPS in the range of $2.80 to $2.96.

*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 December 2, 2021 to shareholders of record as of November 18, 2021

Conference Call and Webcast Information

Littelfuse will host a conference call on Wednesday, October 27, 2021, 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 (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; cybersecurity matters; 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.

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.

LFUS-F

LITTELFUSE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands)

September 25,
2021

December 26,
2020

ASSETS

Current assets:

Cash and cash equivalents

$

690,682

$

687,525

Short-term investments

28

54

Trade receivables, less allowances of $53,006 and $45,237 at September 25, 2021 and December 26, 2020, respectively

325,739

232,760

Inventories

357,024

258,002

Prepaid income taxes and income taxes receivable

2,695

3,029

Prepaid expenses and other current assets

59,768

35,939

Total current assets

1,435,936

1,217,309

Net property, plant, and equipment

364,329

344,178

Intangible assets, net of amortization

295,766

291,887

Goodwill

847,205

816,812

Investments

39,885

30,547

Deferred income taxes

9,575

11,224

Right of use lease assets, net

24,375

17,615

Other assets

21,447

18,021

Total assets

$

3,038,518

$

2,747,593

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

$

221,889

$

145,984

Accrued liabilities

139,670

110,478

Accrued income taxes

32,462

19,186

Current portion of long-term debt

27,619

Total current liabilities

421,640

275,648

Long-term debt, less current portion

620,112

687,034

Deferred income taxes

50,365

50,134

Accrued post-retirement benefits

42,026

45,802

Non-current operating lease liabilities

17,440

12,950

Other long-term liabilities

65,537

67,252

Total equity

1,821,398

1,608,773

Total liabilities and equity

$

3,038,518

$

2,747,593

LITTELFUSE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME

(Unaudited)

Three Months Ended

Nine Months Ended

(in thousands, except per share data)

September 25,
2021

September 26,
2020

September 25,
2021

September 26,
2020

Net sales

$

539,581

$

391,566

$

1,526,863

$

1,044,999

Cost of sales

325,009

252,735

954,429

681,910

Gross profit

214,572

138,831

572,434

363,089

Selling, general, and administrative expenses

67,468

49,929

199,071

154,328

Research and development expenses

15,779

12,963

46,912

40,587

Amortization of intangibles

10,446

10,104

31,608

29,912

Restructuring, impairment, and other charges

772

1,277

1,998

40,904

Total operating expenses

94,465

74,273

279,589

265,731

Operating income

120,107

64,558

292,845

97,358

Interest expense

4,602

4,988

13,901

16,261

Foreign exchange loss (gain)

3,154

(6,174)

8,315

(9,600)

Other income, net

(1,240)

(1,682)

(10,867)

(1,643)

Income before income taxes

113,591

67,426

281,496

92,340

Income taxes

21,537

12,070

49,634

21,331

Net income

$

92,054

$

55,356

$

231,862

$

71,009

Earnings per share:

Basic

$

3.74

$

2.27

$

9.43

$

2.92

Diluted

$

3.69

$

2.25

$

9.31

$

2.89

Weighted-average shares and equivalent shares outstanding:

Basic

24,622

24,357

24,582

24,354

Diluted

24,926

24,573

24,904

24,535

Comprehensive income

$

87,100

$

72,337

$

227,491

$

70,594

LITTELFUSE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Nine Months Ended

(in thousands)

September 25,
2021

September 26,
2020

OPERATING ACTIVITIES

Net income

$

231,862

$

71,009

Adjustments to reconcile net income to net cash provided by operating activities:

96,824

113,867

Changes in operating assets and liabilities:

Trade receivables

(83,793)

(29,362)

Inventories

(71,232)

(1,611)

Accounts payable

53,945

6,661

Accrued liabilities and income taxes

23,294

(2,095)

Prepaid expenses and other assets

(10,236)

5,787

Net cash provided by operating activities

240,664

164,256

INVESTING ACTIVITIES

Acquisitions of businesses, net of cash acquired

(110,646)

Purchases of property, plant, and equipment

(57,526)

(41,536)

Net proceeds from sale of property, plant, and equipment, and other

2,561

148

Net cash used in investing activities

(165,611)

(41,388)

FINANCING ACTIVITIES

Net (payments) proceeds from credit facility

(30,000)

35,000

Purchases of common stock

(22,927)

Cash dividends paid

(36,648)

(35,100)

All other cash provided by financing activities

5,771

4,651

Net cash used in financing activities

(60,877)

(18,376)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

(5,832)

6,259

Increase in cash, cash equivalents, and restricted cash

8,344

110,751

Cash, cash equivalents, and restricted cash at beginning of period

687,525

531,139

Cash, cash equivalents, and restricted cash at end of period

$

695,869

$

641,890

LITTELFUSE, INC.

NET SALES AND OPERATING INCOME BY SEGMENT

(Unaudited)

Third Quarter

Year-to-Date

(in thousands)

2021

2020

%
Growth
/(Decline)

2021

2020

%
Growth
/(Decline)

Net sales

Electronics

$

347,240

$

255,349

36.0

%

$

959,122

$

692,809

38.4

%

Automotive

124,415

104,724

18.8

%

386,262

271,493

42.3

%

Industrial

67,926

31,493

115.7

%

181,479

80,697

124.9

%

Total net sales

$

539,581

$

391,566

37.8

%

$

1,526,863

$

1,044,999

46.1

%

Operating income

Electronics

$

100,524

$

45,860

119.2

%

$

230,283

$

110,783

107.9

%

Automotive

15,806

15,383

2.7

%

55,380

20,642

168.3

%

Industrial

6,571

4,898

34.2

%

18,452

8,409

119.4

%

Other(a)

(2,794)

(1,583)

N.M.

(11,270)

(42,476)

N.M.

Total operating income

$

120,107

$

64,558

86.0

%

$

292,845

$

97,358

200.8

%

Operating Margin

22.3

%

16.5

%

19.2

%

9.3

%

Interest expense

4,602

4,988

13,901

16,261

Foreign exchange loss (gain)

3,154

(6,174)

8,315

(9,600)

Other income, net

(1,240)

(1,682)

(10,867)

(1,643)

Income before income taxes

$

113,591

$

67,426

68.5

%

$

281,496

$

92,340

204.8

%

(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

Third Quarter

Year-to-Date

(in thousands)

2021

2020

%
Growth
/(Decline)

2021

2020

%
Growth
/(Decline)

Operating Margin

Electronics

28.9

%

18.0

%

10.9

%

24.0

%

16.0

%

8.0

%

Automotive

12.7

%

14.7

%

(2.0)

%

14.3

%

7.6

%

6.7

%

Industrial

9.7

%

15.6

%

(5.9)

%

10.2

%

10.4

%

(0.2)

%

LITTELFUSE, INC.

SUPPLEMENTAL FINANCIAL INFORMATION

(In millions of USD except per share amounts - unaudited)

Non-GAAP EPS reconciliation

Q3-21

Q3-20

YTD-21

YTD-20

GAAP diluted EPS

$

3.69

$

2.25

$

9.31

$

2.89

EPS impact of Non-GAAP adjustments (below)

0.26

(0.09)

0.73

1.27

Adjusted diluted EPS

$

3.95

$

2.16

$

10.04

$

4.16

Non-GAAP adjustments - (income) / expense

Q3-21

Q3-20

YTD-21

YTD-20

Acquisition-related and integration costs (a)

$

2.0

$

0.3

$

3.4

$

1.6

Purchase accounting inventory adjustments (b)

6.8

Restructuring, impairment and other charges (c)

0.8

1.3

2.0

40.9

Gain on sale of fixed assets (d)

(0.9)

Non-GAAP adjustments to operating income

2.8

1.6

11.3

42.5

Other expense, net (e)

0.1

0.1

0.6

2.1

Non-operating foreign exchange loss (gain)

3.2

(6.2)

8.3

(9.6)

Non-GAAP adjustments to income before income taxes

6.1

(4.5)

20.2

35.0

Income taxes (f)

(0.4)

(2.2)

2.1

3.9

Non-GAAP adjustments to net income

$

6.5

$

(2.3)

$

18.1

$

31.1

Total EPS impact

$

0.26

$

(0.09)

$

0.73

$

1.27

Adjusted operating margin / Adjusted EBITDA reconciliation

Q3-21

Q3-20

YTD-21

YTD-20

Net sales

$

539.6

$

391.6

$

1,526.9

$

1,045.0

GAAP operating income

120.1

$

64.6

292.8

$

97.4

Add back non-GAAP adjustments

2.8

1.6

11.3

42.5

Adjusted operating income

$

122.9

$

66.2

$

304.1

$

139.9

Adjusted operating margin

22.8

%

16.9

%

19.9

%

13.4

%

Add back amortization

10.4

10.1

31.6

29.9

Add back depreciation

14.2

14.2

41.4

42.0

Adjusted EBITDA

$

147.5

$

90.5

$

377.1

$

211.8

Adjusted EBITDA margin

27.3

%

23.1

%

24.7

%

20.3

%

Net sales reconciliation

Q3-21 vs. Q3-20

Electronics

Automotive

Industrial

Total

Net sales growth

36

%

19

%

116

%

38

%

Less:

Acquisitions

93

%

8

%

Transfer a product line between segments

%

%

%

%

FX impact

1

%

2

%

1

%

1

%

Organic net sales growth

35

%

17

%

22

%

29

%

Net sales reconciliation

YTD-21 vs. YTD-20

Electronics

Automotive

Industrial

Total

Net sales growth

38

%

42

%

125

%

46

%

Less:

Acquisitions

90

%

7

%

Transfer a product line between segments

(1)

%

%

6

%

%

FX impact

2

%

5

%

1

%

3

%

Organic net sales growth

37

%

37

%

28

%

36

%

Income tax reconciliation

Q3-21

Q3-20

YTD-21

YTD-20

Income taxes

$

21.5

$

12.1

$

49.6

$

21.3

Effective rate

19.0

%

17.9

%

17.6

%

23.1

%

Non-GAAP adjustments - income taxes

(0.4)

(2.2)

2.1

3.9

Adjusted income taxes

$

21.1

$

9.9

$

51.7

$

25.2

Adjusted effective rate

17.6

%

15.7

%

17.1

%

19.8

%

Free cash flow reconciliation

Q3-21

Q3-20

YTD-21

YTD-20

Net cash provided by operating activities

$

114.3

$

63.0

$

240.7

$

164.3

Less: Purchases of property, plant and equipment

(24.9)

(12.1)

(57.5)

(41.6)

Free cash flow

$

89.4

$

50.9

$

183.2

$

122.7

Consolidated Total Debt

As of September 25, 2021

Consolidated total gross debt

$

651.1

Unamortized debt issuance costs

(3.4)

Consolidated Total Debt

$

647.7

Consolidated EBITDA (as defined in the Private Placement Senior Notes) (1)

Twelve Months Ended
September 25, 2021

Net Income

$

290.9

Interest expense

18.7

Income taxes

59.6

Depreciation

55.6

Amortization

41.7

Non-cash additions (reductions):

Stock-based compensation expense

19.6

Purchase accounting inventory step-up charge

6.8

Unrealized gain on investments

(13.2)

Impairment charges

Other

3.4

Consolidated EBITDA (as defined in the Private Placement Senior Notes) (1)

$

483.1

Ratio of Consolidated total gross debt to Consolidated EBITDA (as defined in Private Placement Senior Notes)*

1.3

x

* 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.

(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 year-to-date gain of $0.9 million from the sale of a building within the Electronics segment during 2021.

(e) Q3 2021 included a $0.1 million charge for an asset retirement obligation related to the disposal of a business in 2019. 2021 year-to-date amount included $0.5 million of impairment charges on certain other investments. Q3 2020 amount included $0.1 million of impairment charges on certain other investments. 2020 year-to date 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211026005366/en/

Contacts

Trisha Tuntland
Head of Investor Relations
(773) 628-2163