Littelfuse Reports Fourth Quarter and Full Year Results for 2021

Rhea-AI Summary

Littelfuse, Inc. (NASDAQ: LFUS) reported record sales and earnings for Q4 and full year 2021. Q4 net sales were $553.1 million, up 38%, with GAAP diluted EPS at $2.08. For the full year, sales reached $2.1 billion, a 44% increase, and GAAP diluted EPS soared to $11.38. Strong demand across all segments and strategic acquisition of Carling Technologies contributed to growth. Cash flow from operations stood at $373 million. Guidance for Q1 2022 forecasts net sales of $563 to $577 million and adjusted EPS of $3.14 to $3.30.

Positive

• Record annual sales of $2.1 billion, a 44% increase year-on-year.
• Q4 net sales reached $553.1 million, up 38% from the previous year.
• GAAP diluted EPS increased to $11.38, up 115% year-on-year.
• Successful acquisition of Carling Technologies enhances market presence.
• Strong cash flow from operations of $373 million, with $283 million in free cash flow.

Negative

• None.

Record annual sales and earnings driven by strong business execution

CHICAGO--(BUSINESS WIRE)-- Littelfuse, Inc. (NASDAQ: LFUS), an industrial technology manufacturing company empowering a sustainable, connected, and safer world, today reported financial results for the fourth quarter and full year ended January 1, 2022:

Fourth Quarter 2021 Results

• Net sales of $553.1 million were up 38% in total and 23% organically versus the prior year, driven by stronger than expected demand across all segments
• GAAP operating margin was 16.8%; adjusted operating margin was 17.0%
• GAAP diluted EPS was $2.08 and adjusted diluted EPS was $3.16, benefiting from a lower effective tax rate driven by the receipt of a tax holiday, versus the forecasted rate, equating to approximately $0.21 in EPS
• Cash flow from operations was $133 million and free cash flow was $100 million
• On November 30, the company completed its acquisition of Carling Technologies, Inc., a leader in switching, circuit protection, and power distribution technologies with a strong global presence in commercial transportation, communications infrastructure and marine markets

Full Year 2021 Results

• Net sales of $2.1 billion were up 44% in total and 33% organically versus the prior year
• GAAP operating margin was 18.5%; adjusted operating margin was 19.1%
• GAAP diluted EPS was $11.38, up 115% versus the prior year; adjusted diluted EPS of $13.19 increased 106% versus the prior year
• Cash flow from operations was $373 million and free cash flow was $283 million, representing approximately 100% conversion from net income

“We finished the year with remarkable revenue and earnings growth, with more than 30% sales growth across all of our segments,” said Dave Heinzmann, Littelfuse President and Chief Executive Officer. “I want to thank our global teams for their tremendous efforts. Their commitment to execution during these challenging times has been outstanding. We achieved these record results while advancing our strategic initiatives, driving content and share gains in high-growth markets, both organically and through acquisition. I am confident our ongoing execution, coupled with our investments in product development, digital presence and eMobility, position us to achieve our long-term growth strategy.”

First Quarter of 2022*

For the first quarter, the company expects net sales in the range of $563 to $577 million, adjusted diluted EPS in the range of $3.14 to $3.30 and an adjusted effective tax rate of approximately 17%.

*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 March 10, 2022 to shareholders of record as of February 24, 2022

Conference Call and Webcast Information

Littelfuse will host a conference call on Wednesday, February 2, 2022, 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 approximately 17,000 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 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 (decline), 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 (decline), 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. CONSOLIDATED BALANCE SHEETS
(in thousands)	January 1, 2022			December 26, 2020
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	478,473		$	687,525
Short-term investments		28			54
Trade receivables, less allowances of $59,232 and $45,237, respectively		275,192			232,760
Inventories		445,671			258,002
Prepaid income taxes and income taxes receivable		2,035			3,029
Prepaid expenses and other current assets		68,812			35,939
Total current assets		1,270,211			1,217,309
Net property, plant, and equipment		437,889			344,178
Intangible assets, net of amortization		407,126			291,887
Goodwill		929,790			816,812
Investments		39,211			30,547
Deferred income taxes		13,127			11,224
Right of use assets, net		29,616			17,615
Other assets		24,734			18,021
Total assets	$	3,151,704		$	2,747,593
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	222,039		$	145,984
Accrued liabilities		159,689			110,478
Accrued income taxes		27,905			19,186
Current portion of long-term debt		25,000			—
Total current liabilities		434,633			275,648
Long-term debt, less current portion		611,897			687,034
Deferred income taxes		81,289			50,134
Accrued post-retirement benefits		37,037			45,802
Non-current operating lease liabilities		22,305			12,950
Other long-term liabilities		71,023			67,252
Total equity		1,893,520			1,608,773
Total liabilities and equity	$	3,151,704		$	2,747,593

LITTELFUSE, INC. CONSOLIDATED STATEMENTS OF NET INCOME (Unaudited)
		Three Months Ended							Fiscal Year Ended
(in thousands, except per share data)		January 1, 2022			December 26, 2020				January 1, 2022			December 26, 2020
Net sales		$	553,065		$	400,696			$	2,079,928		$	1,445,695
Cost of sales			353,573			262,613				1,308,002			944,523
Gross profit			199,492			138,083				771,926			501,172
Selling, general, and administrative expenses			75,667			50,179				275,457			204,507
Research and development expenses			19,747			11,951				65,940			52,538
Amortization of intangibles			11,121			10,127				42,729			40,039
Restructuring, impairment, and other charges			160			812				2,158			41,716
Total operating expenses			106,695			73,069				386,284			338,800
Operating income			92,797			65,014				385,642			162,372
Interest expense			4,626			4,816				18,527			21,077
Foreign exchange loss (gain)			8,843			(5,275	)			17,158			(14,875	)
Other expense (income), net			19,799			(3,440	)			8,932			(5,083	)
Income before income taxes			59,529			68,913				341,025			161,253
Income taxes			7,585			9,936				57,219			31,267
Net income		$	51,944		$	58,977			$	283,806		$	129,986
Income per share:
Basic		$	2.11		$	2.41			$	11.54		$	5.33
Diluted		$	2.08		$	2.39			$	11.38		$	5.29
Weighted-average shares and equivalent shares outstanding:
Basic			24,660			24,423				24,603			24,371
Diluted			25,001			24,726				24,932			24,592
Comprehensive income			74,009			75,058				301,500			145,652

LITTELFUSE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
	Year Ended
(in thousands)	January 1, 2022				December 26, 2020
OPERATING ACTIVITIES
Net income	$	283,806			$	129,986
Adjustments to reconcile net income to net cash provided by operating activities		147,276				123,685
Changes in operating assets and liabilities:
Trade receivables		(10,234	)			(25,588	)
Inventories		(104,555	)			(12,425	)
Accounts payable		40,481				28,820
Accrued liabilities and income taxes		30,793				6,765
Prepaid expenses and other assets		(14,223	)			6,788
Net cash provided by operating activities		373,344				258,031
INVESTING ACTIVITIES
Acquisitions of businesses, net of cash acquired		(423,633	)			—
Purchases of property, plant, and equipment		(90,562	)			(56,191	)
Net proceeds from sale of property, plant, and equipment, and other		15,425				4,758
Other		(390	)			—
Net cash used in investing activities		(499,160	)			(51,433	)
FINANCING ACTIVITIES
Net payments of credit facility and other loan		(32,619	)			(15,000	)
Cash dividends paid		(49,730	)			(46,839	)
Purchases of common stock		—				(22,927	)
All other cash provided by financing activities		13,365				16,958
Net cash used in financing activities		(68,984	)			(67,808	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(9,889	)			17,596
(Decrease) Increase in cash, cash equivalents, and restricted cash		(204,689	)			156,386
Cash, cash equivalents, and restricted cash at beginning of period		687,525				531,139
Cash, cash equivalents, and restricted cash at end of period	$	482,836			$	687,525

LITTELFUSE, INC. NET SALES AND OPERATING INCOME BY SEGMENT (Unaudited)
		Fourth Quarter											Year-to-Date
(in thousands)		2021				2020				% Growth /(Decline)			2021				2020				% Growth /(Decline)
Net sales
Electronics		$	341,622			$	244,953			39.5	%		$	1,300,744			$	937,762			38.7	%
Transportation (1)			141,796				124,271			14.1	%			528,058				395,764			33.4	%
Industrial			69,647				31,472			121.3	%			251,126				112,169			123.9	%
Total net sales		$	553,065			$	400,696			38.0	%		$	2,079,928			$	1,445,695			43.9	%
Operating income
Electronics		$	79,350			$	41,912			89.3	%		$	309,633			$	152,695			102.8	%
Transportation (1)			10,599				21,013			(49.6	)%			65,979				41,655			58.4	%
Industrial			4,169				3,587			16.2	%			22,621				11,996			88.6	%
Other (a)			(1,321	)			(1,498	)		N.M.				(12,591	)			(43,974	)		N.M.
Total operating income		$	92,797			$	65,014			42.7	%		$	385,642			$	162,372			137.5	%
Operating Margin			16.8	%			16.2	%						18.5	%			11.2	%
Interest expense			4,626				4,816							18,527				21,077
Foreign exchange loss (gain)			8,843				(5,275	)						17,158				(14,875	)
Other expense (income), net			19,799				(3,440	)						8,932				(5,083	)
Income before income taxes		$	59,529			$	68,913			(13.6	) %		$	341,025			$	161,253			111.5	%

(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

		Fourth Quarter									Year-to-Date
(in thousands)		2021			2020			% Growth /(Decline)			2021			2020			% Growth /(Decline)
Operating Margin
Electronics		23.2	%		17.1	%		6.1	%		23.8	%		16.3	%		7.5	%
Transportation (1)		7.5	%		16.9	%		(9.4	)%		12.5	%		10.5	%		2.0	%
Industrial		6.0	%		11.4	%		(5.4	)%		9.0	%		10.7	%		(1.7	)%
(1) Formerly known as Automotive segment.

LITTELFUSE, INC. SUPPLEMENTAL FINANCIAL INFORMATION (In millions of USD except per share amounts unaudited)
Non-GAAP EPS reconciliation
		Q4-21			Q4-20				YTD-21			YTD-20
GAAP diluted EPS		$	2.08		$	2.39			$	11.38		$	5.29
EPS impact of Non-GAAP adjustments (below)			1.08			(0.16	)			1.81			1.11
Adjusted diluted EPS		$	3.16		$	2.23			$	13.19		$	6.40

Non-GAAP adjustments - (income)/expense
		Q4-21				Q4-20				YTD-21				YTD-20
Acquisition-related and integration costs (a)		$	3.6			$	0.7			$	7.0			$	2.3
Purchase accounting inventory adjustments (b)			1.6				—				8.4				—
Restructuring, impairment and other charges (c)			0.2				0.8				2.2				41.7
Gain on sale of fixed assets (d)			(4.1	)							(5.0	)
Non-GAAP adjustments to operating income			1.3				1.5				12.6				44.0
Other expense, net (e)			20.8				—				21.4				2.1
Non-operating foreign exchange loss (gain)			8.9				(5.3	)			17.2				(14.9	)
Non-GAAP adjustments to income before income taxes			31.0				(3.8	)			51.2				31.2
Income taxes (f)			3.9				—				6.0				3.9
Non-GAAP adjustments to net income		$	27.1			$	(3.8	)		$	45.2			$	27.3
Total EPS impact		$	1.08			$	(0.16	)		$	1.81			$	1.11

Adjusted operating margin /Adjusted EBITDA reconciliation
		Q4-21				Q4-20				YTD-21				YTD-20
Net sales		$	553.1			$	400.7			$	2,079.9			$	1,445.7
GAAP operating income			92.8				65.0				385.6				162.4
Add back non-GAAP adjustments			1.3				1.5				12.6				44.0
Adjusted operating income		$	94.1			$	66.5			$	398.2			$	206.4
Adjusted operating margin			17.0	%			16.6	%			19.1	%			14.3	%
Add back amortization			11.1				10.1				42.7				40.0
Add back depreciation			14.5				14.2				55.9				56.1
Adjusted EBITDA		$	119.7			$	90.8			$	496.8			$	302.5
Adjusted EBITDA margin			21.6	%			22.7	%			23.9	%			20.9	%

Net sales reconciliation		Q4-21 vs. Q4-20
		Electronics			Transportation (1)			Industrial			Total
Net sales growth		39	%		14	%		121	%		38	%
Less:
Acquisitions		—	%		13	%		89	%		11	%
53rd week of extra sales in fiscal year 2021		4	%		4	%		9	%		5	%
FX impact		(1	)%		(1	)%		—	%		(1	)%
Organic net sales growth (decline)		36	%		(2	)%		23	%		23	%

Net sales reconciliation		YTD-21 vs. YTD-20
		Electronics			Transportation (1)			Industrial			Total
Net sales growth		39	%		33	%		124	%		44	%
Less:
Acquisitions		—	%		4	%		90	%		8	%
53rd week of extra sales in fiscal year 2021		1	%		1	%		2	%		1	%
Transfer a product line between segments		(1	)%		—			4	%		—	%
FX impact		2	%		3	%		1	%		2	%
Organic net sales growth		37	%		25	%		27	%		33	%

Income tax reconciliation
		Q4-21				Q4-20				YTD-21				YTD-20
Income taxes		$	7.6			$	9.9			$	57.2			$	31.3
Effective rate			12.7	%			14.4	%			16.8	%			19.4	%
Non-GAAP adjustments - income taxes			3.9				—				6.0				3.9
Adjusted income taxes		$	11.5			$	9.9			$	63.2			$	35.2
Adjusted effective rate			12.7	%			15.3	%			16.1	%			18.3	%
Free cash flow reconciliation
		Q4-21				Q4-20				YTD-21				YTD-20
Net cash provided by operating activities		$	132.6			$	93.7			$	373.3			$	258.0
Less: Purchases of property, plant and equipment			(33.0	)			(14.6	)			(90.6	)			(56.2	)
Free cash flow		$	99.6			$	79.1			$	282.7			$	201.8

Consolidated Total Debt		As of January 1, 2022
Consolidated total gross debt		$	615.0
Unamortized debt issuance costs			(3.1	)
Consolidated Total Debt		$	611.9
Consolidated EBITDA (as defined in the Private Placement Senior Notes) (2)		Twelve Months Ended January 1, 2022
Net Income		$	283.8
Interest expense			18.5
Income taxes			57.2
Depreciation			55.9
Amortization			42.7
Non-cash additions (reductions):
Non-cash pension settlement charge			19.9
Stock-based compensation expense			19.6
Purchase accounting inventory step-up charge			8.4
Unrealized gain on investments			(8.9	)
Impairment charges			—
Other			26.7
Consolidated EBITDA (as defined in the Private Placement Senior Notes) (2)		$	523.8
Ratio of Consolidated total gross debt to Consolidated EBITDA (as defined in Private Placement Senior Notes)*		1.2x

* 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) Formerly known as Automotive segment.

(2) 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) reflected in restructuring, impairment and other charges.

(d) reflected a gain of $4.1 million recorded in SG&A during the fourth quarter of 2021 for a total year-to-date gain of $5.0 million from the sale of two buildings within the Electronics segment during 2021.

(e) Q4 2021 included a $19.9 million non-cash pension settlement charge, a $0.7 million charge for an asset retirement obligation related to the disposal of a business in 2019 and a $0.2 million increase in coal mining reserves. 2021 year-to-date amount also included $0.5 million of impairment charges on certain other investments and a $0.8 million charge for an asset retirement obligation related to the disposal of a business in 2019. 2020 year-to-date amount included a $1.8 million increase in coal mining reserves, a $0.2 million charge for an asset retirement obligation related to the disposal of a business in 2019 and $0.1 million of impairment charges on certain other investments.

(f) reflected the tax impact associated with the non-GAAP adjustments.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220201005562/en/

Trisha Tuntland

Head of Investor Relations

(773) 628-2163

Source: Littelfuse, Inc.

FAQ

What were Littelfuse's net sales for Q4 2021?

Littelfuse reported net sales of $553.1 million for Q4 2021.

How much did GAAP diluted EPS increase for Littelfuse in 2021?

GAAP diluted EPS increased to $11.38, a rise of 115% compared to the previous year.

What is the expected net sales range for Littelfuse in Q1 2022?

Littelfuse expects net sales in the range of $563 to $577 million for Q1 2022.

When will Littelfuse pay its next dividend?

Littelfuse will pay a cash dividend of $0.53 per share on March 10, 2022.

What was the cash flow from operations for Littelfuse in 2021?

Cash flow from operations for Littelfuse in 2021 was $373 million.