Market Overview

Littelfuse Reports Fourth Quarter and Full Year Results for 2018

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Littelfuse,
Inc.
(NASDAQ:LFUS), a global manufacturer of leading
technologies in circuit protection, power control and sensing, today
reported financial results for the fourth quarter and full year ended
December 29, 2018:

Fourth Quarter 2018 Highlights

  • Net sales were $402.3 million, up 32% versus the prior year period.
    Organic revenue growth was 4%
  • Growth by segment versus the prior year:
    • Electronics sales increased 62% (up 7% organically)
    • Automotive sales decreased 3% on global auto production decline of
      4% (down 1% organically)
    • Industrial sales decreased 3% due to the exit of the Custom
      business in 2018 (up 11% organically)
  • GAAP diluted EPS was $1.29, up from a loss of $0.48 in the prior year,
    and includes $14.7 million of after-tax charges primarily related to
    certain purchase accounting adjustments and integration costs for the
    IXYS business, and non-operating foreign exchange losses
  • Adjusted diluted EPS of $1.87 increased 3% over the prior year
  • GAAP effective tax rate was 17.9% and the adjusted effective tax rate
    was 14.6%
  • Cash flow from operations was $79.7 million and free cash flow was
    $60.9 million
  • During the fourth quarter and as of January 29, 2019, the company
    repurchased approximately 392,000 and 67,000 shares of common stock,
    respectively, under its share repurchase authorization

Full Year 2018 Highlights

  • Net sales were $1.72 billion, up 41% versus the prior year period, and
    up 8% organically
  • Growth by segment versus the prior year:
    • Electronics sales increased 70% (up 11% organically)
    • Automotive sales increased 6% on a small decline in global auto
      production (up 4% organically)
    • Industrial sales increased 8% (up 13% organically)
  • GAAP diluted EPS was $6.52, up 25% versus the prior year
  • Adjusted diluted EPS of $9.44 increased 22% versus the prior year
  • GAAP effective tax rate was 19.7% and the adjusted effective tax rate
    was 18.9%
  • Cash flow from operations was $331.8 million and free cash flow was
    $257.0 million, both records for the company

"2018 was an exceptional year for us," said Dave Heinzmann, Littelfuse
Chief Executive Officer. "Full year organic sales growth of 8% and
adjusted EPS growth of 22% reflects the strong execution of our strategy
despite softening demand during the fourth quarter. During the year, we
made significant progress integrating the company's largest acquisition,
IXYS Corporation, and are seeing the benefits of our expanded portfolio
and combined global teams. Across our segments, we captured many
strategic wins in our target end markets. We remain confident that our
leading technologies, global footprint, close customer relationships,
and talented associates position us for continued content growth in
excess of the markets we serve."

For the first quarter of 2019*:

  • Net sales are expected to be in the range of $404 to $416 million,
    down 2% on an as reported basis and down 4% organically, at the
    midpoint versus the prior year quarter
  • Adjusted diluted earnings per share are expected to be in the range of
    $1.86 to $2.00
  • Adjusted effective tax rate is expected to be in the range of 19% - 21%

For the 2019 full year*:

  • Adjusted effective tax rate is expected to be in the range of 18% - 20%
  • Capital expenditures are expected to be in the range of $90 - $95
    million

*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 $0.43 per
share on March 7, 2019 to shareholders of record as of February 21, 2019.

Conference Call and Webcast Information

Littelfuse will host a conference call today, Wednesday, January 30,
2019, at 9:00 a.m. Central Time to discuss the results. The call will be
broadcast live and available for replay at Littelfuse.com.

About Littelfuse

Littelfuse (NASDAQ:LFUS) is a global manufacturer of leading
technologies in circuit protection, power control and sensing. Sold in
over 150 countries, our products are found in automotive and commercial
vehicles, industrial applications, data and telecommunications, medical
devices, consumer electronics and appliances. Our 12,000 worldwide
associates partner with customers to design, manufacture and deliver
innovative, high-quality solutions, for a safer, greener and
increasingly connected world - 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 PSLRA. These statements may involve risks
and uncertainties, including, but not limited to, risks relating to
product demand and market acceptance; economic conditions; 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 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; uncertainties related to
political or regulatory changes; the integration of the recently
acquired business of IXYS Corporation ("IXYS") and the risk that
expected benefits, synergies and growth prospects of the acquisition of
IXYS may not be achieved in a timely manner, or at all; 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, 2017. For a further discussion of the risk factors of the
company, please see Item 1A. "Risk Factors" to the company's Annual
Report on Form 10-K for the year ended December 30, 2017.

Non-GAAP Financial Measures

The information included in this press release includes the non-GAAP
financial measures of organic revenue growth, adjusted operating income,
adjusted operating margin, adjusted EBITDA, adjusted EBITDA margin,
adjusted diluted earnings per share, adjusted effective tax rate and
free cash flow. 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 revenue growth, adjusted operating
income, adjusted operating margin, adjusted EBITDA, adjusted EBITDA
margin, adjusted diluted earnings per share, 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 free cash flow is a useful measure of its ability to
generate cash. 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.

 
LITTELFUSE, INC.
CONSOLIDATED BALANCE SHEETS
 
    December 29,     December 30,
(in thousands) 2018 2017
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 489,733 $ 429,676
Short-term investments 34 35
Trade receivables, less allowances of $36,038 and $27,516,
respectively
232,892 182,699
Inventories 258,228 140,789
Prepaid income taxes and income taxes receivable 2,339 1,689
Prepaid expenses and other current assets 49,291   37,452
Total current assets 1,032,517 792,340
Net property, plant, and equipment 339,894 250,577
Intangible assets, net of amortization 361,474 203,850
Goodwill 826,715 453,414
Investments 25,405 10,993
Deferred income taxes 7,330 11,858
Other assets 20,971   17,070
Total assets $ 2,614,306   $ 1,740,102
 
LIABILITIES AND EQUITY
Current liabilities:
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