Littelfuse Reports Third Quarter Results For 2021

Rhea-AI Summary

Littelfuse, Inc. (NASDAQ: LFUS) reported remarkable third-quarter results for 2021, achieving net sales of $539.6 million and a GAAP diluted EPS of $3.69. This performance was propelled by robust demand in the electronics segment. The company’s GAAP operating margin stood at 22.3%. Additionally, Littelfuse announced an acquisition agreement for Carling Technologies, expected to enhance its market position, with Carling generating annual sales of approximately $170 million. For Q4, projected net sales are between $503 million and $517 million.

Positive

• Record Q3 net sales of $539.6 million, exceeding expectations.
• GAAP EPS of $3.69 and adjusted EPS of $3.95 indicate strong earnings.
• Successful acquisition agreement for Carling Technologies, expanding market presence.

Negative

• None.

Record sales and earnings driven by strong business fundamentals

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 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/

Trisha Tuntland

Head of Investor Relations

(773) 628-2163

Source: Littelfuse, Inc.

FAQ

What were Littelfuse's Q3 2021 sales results?

Littelfuse reported Q3 2021 net sales of $539.6 million.

What is the expected guidance for Q4 2021 net sales for LFUS?

Littelfuse expects Q4 2021 net sales to be between $503 million and $517 million.

What was the GAAP diluted EPS for Littelfuse in Q3 2021?

The GAAP diluted EPS for Littelfuse in Q3 2021 was $3.69.

When will Littelfuse pay its dividend in 2021?

Littelfuse will pay a cash dividend of $0.53 per share on December 2, 2021.

What acquisition did Littelfuse announce in October 2021?

Littelfuse announced an agreement to acquire Carling Technologies, a leader in switching and power distribution technologies.