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Littelfuse Reports First Quarter Results for 2024

Solid execution drives Q1 sales above, and EPS in-line with guidance

Littelfuse, Inc. (NASDAQ: LFUS), a diversified, industrial technology manufacturing company empowering a sustainable, connected, and safer world, today reported financial results for the first quarter ended March 30, 2024:

  • Net sales of $535 million were down 12% versus the prior year period, and down 12% organically
  • GAAP diluted EPS was $1.93 and adjusted diluted EPS was $1.76
  • Cash flow from operations was $57 million and free cash flow was $42 million

“Our global team delivered solid first quarter results, with sales above and earnings in-line with our expectations, as our increasingly diversified end market exposures, robust technology offering, and portfolio optimization initiatives helped to offset ongoing inventory destocking,” said Dave Heinzmann, Littelfuse President and Chief Executive Officer. “Further, our strong cash generation reflects disciplined execution, while our well-positioned balance sheet will continue to allow us to capitalize on growth opportunities. Looking forward, we remain confident in an expected return to growth during 2024, and believe our experienced team, agile operations and unwavering long-term strategic focus will drive top-tier value for our stakeholders.”

Second Quarter of 2024*

Based on current market conditions, for the second quarter the company expects,

  • Net sales in the range of $525 - $555 million, adjusted diluted EPS in the range of $1.65 - $1.85 and an adjusted effective tax rate of approximately 23%

*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 and Share Repurchase Authorization

  • The company’s Board of Directors approved a new stock repurchase authorization to replace its expiring previous 3-year program. The company may repurchase up to $300 million in the aggregate of shares of the company’s common stock for the period May 1, 2024, to April 30, 2027.
  • The company will pay a cash dividend on its common stock of $0.65 per share on June 6, 2024, to shareholders of record as of May 23, 2024

Conference Call and Webcast Information

Littelfuse will host a conference call on Wednesday, May 1, 2024, 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, Inc. (NASDAQ: LFUS) is a diversified, industrial technology manufacturing company empowering a sustainable, connected, and safer world. Across more than 20 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. Such statements are based on Littelfuse, Inc.’s (“Littelfuse” or the “Company”) current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties, include, but are not limited to, risks and uncertainties relating to general economic conditions; 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 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 30, 2023.

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 30, 2023, 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 (decline) 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, net debt, consolidated EBITDA, and consolidated net leverage ratio (as defined in the credit agreement). 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 (decline) 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 net debt, consolidated EBITDA, and consolidated net leverage ratio 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)

 

March 30,

2024

 

December 30,

2023

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

562,153

 

$

555,513

Short-term investments

 

 

231

 

 

235

Trade receivables, less allowances of $76,496 and $84,696 at March 30, 2024 and December 30, 2023, respectively

 

 

295,876

 

 

287,018

Inventories

 

 

456,135

 

 

474,607

Prepaid income taxes and income taxes receivable

 

 

8,574

 

 

8,701

Prepaid expenses and other current assets

 

 

121,142

 

 

82,526

Total current assets

 

 

1,444,111

 

 

1,408,600

Net property, plant, and equipment

 

 

479,435

 

 

493,153

Intangible assets, net of amortization

 

 

584,631

 

 

606,136

Goodwill

 

 

1,294,737

 

 

1,309,998

Investments

 

 

24,204

 

 

24,821

Deferred income taxes

 

 

10,798

 

 

10,486

Right of use lease assets

 

 

63,718

 

 

62,370

Other long-term assets

 

 

41,827

 

 

79,711

Total assets

 

$

3,943,461

 

$

3,995,275

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

172,809

 

$

173,535

Accrued liabilities

 

 

124,288

 

 

149,214

Accrued income taxes

 

 

42,051

 

 

38,725

Current portion of long-term debt

 

 

65,824

 

 

14,020

Total current liabilities

 

 

404,972

 

 

375,494

Long-term debt, less current portion

 

 

800,849

 

 

857,915

Deferred income taxes

 

 

100,755

 

 

110,820

Accrued post-retirement benefits

 

 

34,049

 

 

34,422

Non-current lease liabilities

 

 

50,791

 

 

49,472

Other long-term liabilities

 

 

80,752

 

 

86,671

Total equity

 

 

2,471,293

 

 

2,480,481

Total liabilities and equity

 

$

3,943,461

 

$

3,995,275

LITTELFUSE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME

(Unaudited)

 

 

 

Three Months Ended

(in thousands, except per share data)

 

March 30,

2024

 

April 1,

2023

Net sales

 

$

535,385

 

 

$

609,782

 

Cost of sales

 

 

347,577

 

 

 

364,825

 

Gross profit

 

 

187,808

 

 

 

244,957

 

 

 

 

 

 

Selling, general, and administrative expenses

 

 

86,127

 

 

 

88,310

 

Research and development expenses

 

 

27,667

 

 

 

27,290

 

Amortization of intangibles

 

 

15,825

 

 

 

16,866

 

Restructuring, impairment, and other charges

 

 

3,237

 

 

 

1,850

 

Total operating expenses

 

 

132,856

 

 

 

134,316

 

Operating income

 

 

54,952

 

 

 

110,641

 

 

 

 

 

 

Interest expense

 

 

9,611

 

 

 

9,646

 

Foreign exchange gain

 

 

(5,042

)

 

 

(1,675

)

Other income, net

 

 

(5,321

)

 

 

(6,233

)

Income before income taxes

 

 

55,704

 

 

 

108,903

 

Income taxes

 

 

7,252

 

 

 

20,158

 

Net income

 

$

48,452

 

 

$

88,745

 

 

 

 

 

 

Earnings per share:

 

 

 

 

Basic

 

$

1.95

 

 

$

3.58

 

Diluted

 

$

1.93

 

 

$

3.54

 

 

 

 

 

 

Weighted-average shares and equivalent shares outstanding:

 

 

 

 

Basic

 

 

24,911

 

 

 

24,782

 

Diluted

 

 

25,124

 

 

 

25,062

 

 

 

 

 

 

Comprehensive income

 

$

18,161

 

 

$

102,028

 

LITTELFUSE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Three Months Ended

(in thousands)

 

March 30, 2024

 

April 1, 2023

OPERATING ACTIVITIES

 

 

 

 

Net income

 

$

48,452

 

 

$

88,745

 

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

 

 

28,729

 

 

 

32,558

 

Changes in operating assets and liabilities:

 

 

 

 

Trade receivables

 

 

(12,723

)

 

 

(13,176

)

Inventories

 

 

16,179

 

 

 

(1,535

)

Accounts payable

 

 

345

 

 

 

(16,246

)

Accrued liabilities and income taxes

 

 

(28,042

)

 

 

(43,578

)

Prepaid expenses and other assets

 

 

4,210

 

 

 

6,639

 

Net cash provided by operating activities

 

 

57,150

 

 

 

53,407

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

Acquisitions of businesses, net of cash acquired

 

 

 

 

 

(158,260

)

Purchases of property, plant, and equipment

 

 

(15,547

)

 

 

(25,665

)

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

 

 

7,064

 

 

 

737

 

Net cash used in investing activities

 

 

(8,483

)

 

 

(183,188

)

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

Net payments of credit facility

 

 

(1,875

)

 

 

(1,875

)

Repurchases of common stock

 

 

(16,131

)

 

 

 

Cash dividends paid

 

 

(16,200

)

 

 

(14,880

)

All other cash provided by financing activities

 

 

686

 

 

 

4,551

 

Net cash used in financing activities

 

 

(33,520

)

 

 

(12,204

)

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

 

 

(8,550

)

 

 

4,571

 

Increase (decrease) in cash, cash equivalents, and restricted cash

 

 

6,597

 

 

 

(137,414

)

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

 

 

557,123

 

 

 

564,939

 

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

 

$

563,720

 

 

$

427,525

 

LITTELFUSE, INC.

NET SALES AND OPERATING INCOME BY SEGMENT

(Unaudited)

 

 

 

First Quarter

(in thousands)

 

 

2024

 

 

 

2023

 

 

%

(Decline) /

Growth

Net sales

 

 

 

 

 

 

Electronics

 

$

291,105

 

 

$

358,593

 

 

(18.8

)%

Transportation

 

 

170,367

 

 

 

166,641

 

 

2.2

%

Industrial

 

 

73,913

 

 

 

84,548

 

 

(12.6

)%

Total net sales

 

$

535,385

 

 

$

609,782

 

 

(12.2

)%

 

 

 

 

 

 

 

Operating income

 

 

 

 

 

 

Electronics

 

$

37,803

 

 

$

90,162

 

 

(58.1

)%

Transportation

 

 

16,206

 

 

 

8,532

 

 

89.9

%

Industrial

 

 

4,796

 

 

 

17,141

 

 

(72.0

)%

Other(a)

 

 

(3,853

)

 

 

(5,194

)

 

N.M.

Total operating income

 

$

54,952

 

 

$

110,641

 

 

(50.3

)%

Operating Margin

 

 

10.3

%

 

 

18.1

%

 

 

 

 

 

 

 

 

 

Interest expense

 

 

9,611

 

 

 

9,646

 

 

 

Foreign exchange gain

 

 

(5,042

)

 

 

(1,675

)

 

 

Other income, net

 

 

(5,321

)

 

 

(6,233

)

 

 

Income before income taxes

 

$

55,704

 

 

$

108,903

 

 

(48.8

)%

 

(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

 

 

First Quarter

(in thousands)

 

2024

 

2023

 

%

(Decline)/

Growth

Operating Margin

 

 

 

 

 

 

Electronics

 

13.0

%

 

25.1

%

 

(12.1

)%

Transportation

 

9.5

%

 

5.1

%

 

4.4

%

Industrial

 

6.5

%

 

20.3

%

 

(13.8

)%

LITTELFUSE, INC.

SUPPLEMENTAL FINANCIAL INFORMATION

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

 

Non-GAAP EPS reconciliation

 

 

 

 

 

 

Q1-24

 

Q1-23

GAAP diluted EPS

 

$

1.93

 

 

$

3.54

EPS impact of Non-GAAP adjustments (below)

 

 

(0.17

)

 

 

0.10

Adjusted diluted EPS

 

$

1.76

 

 

$

3.64

Non-GAAP adjustments - (income) / expense

 

 

 

 

 

 

Q1-24

 

Q1-23

Acquisition-related and integration costs (a)

 

$

0.9

 

 

$

3.3

 

Restructuring, impairment and other charges (b)

 

 

3.2

 

 

 

1.9

 

Gain on sale of fixed assets (c)

 

 

(0.3

)

 

 

 

Non-GAAP adjustments to operating income

 

 

3.8

 

 

 

5.2

 

Other loss (income), net (d)

 

 

0.2

 

 

 

(0.2

)

Non-operating foreign exchange gain

 

 

(5.0

)

 

 

(1.7

)

Non-GAAP adjustments to income before income taxes

 

 

(1.0

)

 

 

3.3

 

Income taxes (e)

 

 

3.3

 

 

 

0.9

 

Non-GAAP adjustments to net income

 

$

(4.3

)

 

$

2.4

 

 

 

 

 

 

Total EPS impact

 

$

(0.17

)

 

$

0.10

 

Adjusted operating margin / Adjusted EBITDA reconciliation

 

 

 

 

 

 

Q1-24

 

Q1-23

Net income

 

$

48.5

 

 

$

88.7

 

Add:

 

 

 

 

Income taxes

 

 

7.3

 

 

 

20.2

 

Interest expense

 

 

9.6

 

 

 

9.6

 

Foreign exchange gain

 

 

(5.0

)

 

 

(1.7

)

Other income, net

 

 

(5.3

)

 

 

(6.2

)

GAAP operating income

 

$

55.0

 

 

$

110.6

 

Non-GAAP adjustments to operating income

 

 

3.8

 

 

 

5.2

 

Adjusted operating income

 

$

58.8

 

 

$

115.8

 

Amortization of intangibles

 

 

15.8

 

 

 

16.9

 

Depreciation expenses

 

 

16.7

 

 

 

17.6

 

Adjusted EBITDA

 

$

91.3

 

 

$

150.3

 

 

 

 

 

 

Net sales

 

$

535.4

 

 

$

609.8

 

Net income as a percentage of net sales

 

 

9.1

%

 

 

14.5

%

Operating margin

 

 

10.3

%

 

 

18.1

%

Adjusted operating margin

 

 

11.0

%

 

 

19.0

%

Adjusted EBITDA margin

 

 

17.1

%

 

 

24.6

%

Adjusted EBITDA by Segment

 

Q1-24

 

Q1-23

 

 

Electronics

 

Transportation

 

Industrial

 

Electronics

 

Transportation

 

Industrial

GAAP operating income

 

$

37.8

 

 

$

16.2

 

 

$

4.8

 

 

$

90.2

 

 

$

8.5

 

 

$

17.1

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

Add back amortization

 

 

9.8

 

 

 

3.4

 

 

 

2.6

 

 

 

10.2

 

 

 

4.5

 

 

 

2.2

 

Add back depreciation

 

 

10.0

 

 

 

5.3

 

 

 

1.4

 

 

 

9.6

 

 

 

6.8

 

 

 

1.2

 

Adjusted EBITDA

 

$

57.6

 

 

$

24.9

 

 

$

8.8

 

 

$

110.0

 

 

$

19.8

 

 

$

20.5

 

Adjusted EBITDA Margin

 

 

19.8

%

 

 

14.6

%

 

 

11.9

%

 

 

30.7

%

 

 

11.9

%

 

 

24.3

%

Net sales reconciliation

 

Q1-24 vs. Q1-23

 

 

Electronics

 

Transportation

 

Industrial

 

Total

Net sales (decline) growth

 

(19

)%

 

2

%

 

(13

)%

 

(12

)%

Less:

 

 

 

 

 

 

 

 

Acquisitions

 

%

 

%

 

1

%

 

%

FX impact

 

%

 

(1

)%

 

%

 

%

Organic net sales (decline) growth

 

(19

)%

 

3

%

 

(14

)%

 

(12

)%

Income tax reconciliation

 

 

 

 

 

 

Q1-24

 

Q1-23

Income taxes

 

$

7.3

 

 

$

20.2

 

Effective rate

 

 

13.0

%

 

 

18.5

%

Non-GAAP adjustments - income taxes

 

 

3.3

 

 

 

0.9

 

Adjusted income taxes

 

$

10.6

 

 

$

21.1

 

Adjusted effective rate

 

 

19.3

%

 

 

18.8

%

Free cash flow reconciliation

 

 

 

 

 

 

Q1-24

 

Q1-23

Net cash provided by operating activities

 

$

57.1

 

 

$

53.4

 

Less: Purchases of property, plant and equipment

 

 

(15.5

)

 

 

(25.7

)

Free cash flow

 

$

41.6

 

 

$

27.7

 

Consolidated Total Debt

 

As of March 30, 2024

Consolidated Total Debt

 

$

866.7

Unamortized debt issuance costs

 

 

3.5

Finance lease liability

 

 

0.6

Consolidated funded indebtedness

 

 

870.8

Cash held in U.S. (up to $400 million)

 

 

157.9

Net debt

 

$

712.9

 

 

 

Consolidated EBITDA

 

Twelve Months Ended

March 30, 2024

Net Income

 

$

219.1

Interest expense

 

 

39.8

Income taxes

 

 

56.2

Depreciation

 

 

70.7

Amortization

 

 

64.8

Non-cash additions:

 

 

Stock-based compensation expense

 

 

23.8

Purchase accounting inventory step-up charge

 

 

Unrealized loss on investments

 

 

2.5

Impairment charges

 

 

5.8

Other

 

 

18.3

Consolidated EBITDA (1)

 

$

501.0

 

 

 

Consolidated Net Leverage Ratio (as defined in the Credit Agreement) *

 

1.4x

* Our Credit Agreement and Private Placement Note with maturities ranging from 2024 to 2032, contain financial ratio covenants providing that if, as of the last day of each fiscal quarter, the Consolidated Net Leverage ratio at such time 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 Credit Agreement and Private Placement Senior Notes) is triggered.

 

The Credit Agreement and Private Placement Senior Notes were amended in Q2 2022 and now allow for the addition of acquisition and integration costs up to 15% of Consolidated EBITDA and the netting of up to $400M of Available Cash (Cash held by US Subsidiaries).

 

(1) Represents Consolidated EBITDA as defined in our Credit Agreement and 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 restructuring, impairment and other charges.

(c) 2024 amount included $0.3 million gain from the sale of a building within the Transportation segment.

(d) 2024 amount reflected $0.2 million increase in coal mining reserves, while 2023 amount included $0.2 million gain from the sale of a building within the Electronics segment.

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

 

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