Market Overview

Littelfuse Reports Second Quarter Results For 2019

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Company increases dividend by 12% - continues double-digit increase

Littelfuse, Inc. (NASDAQ:LFUS), a global manufacturer of leading technologies in circuit protection, power control and sensing, today reported financial results for the second quarter ended June 29, 2019:

  • Net sales of $397.9 million were down 13% versus the prior year period, and down 11% organically, primarily due to ongoing global trade uncertainties, continued efforts by distribution partners to reduce excess electronics channel inventories and further declines in global auto production, especially in China
  • Segment performance versus the prior year period:
    • Electronics sales decreased 13% (down 11% organically)
    • Automotive sales decreased 15% (down 12% organically)
    • Industrial sales decreased 9% due to the exit of the Custom business in 2018 (up 1% organically)
  • GAAP diluted EPS was $1.75 and adjusted diluted EPS was $1.91. EPS was significantly impacted by lower volumes and associated leverage versus the prior year
  • GAAP effective tax rate was 18.2% and the adjusted effective tax rate was 17.3%
  • Cash flow from operations was $49.2 million and free cash flow was $38.0 million
  • During the second quarter and through July 26, 2019, the company repurchased 188,214 and 49,816 shares of common stock, respectively, under its share purchase authorization

"We continue to work through the challenging business cycles in the electronics and automotive end markets which we expect to persist through this year," said Dave Heinzmann, Littelfuse Chief Executive Officer. "We are actively managing costs while remaining focused on long-term growth drivers. During the quarter, we saw solid design activity and won business across a number of high-growth applications. With the strength of our core business and execution by our global teams, we are navigating the current environment as we deliver on our five-year growth strategy."

For the third quarter of 2019*:

  • Net sales are expected to be in the range of $362 to $374 million
  • Adjusted diluted EPS is expected to be in the range of $1.50 to $1.64
  • Adjusted effective tax rate is expected to be in the range of 20% - 21%

*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's Board of Directors approved a 12% increase in the quarterly cash dividend from $0.43 to $0.48. This equates to an annualized dividend of $1.92 per share. The dividend will be paid on September 5, 2019 to shareholders of record as of August 22, 2019.

Conference Call and Webcast Information

Littelfuse will host a conference call today, Wednesday, July 31, 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. Serving over 100,000 end customers, 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; 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 29, 2018. 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 29, 2018.

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, free cash flow, and adjusted leverage. 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.

LFUS-F

LITTELFUSE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

(Unaudited)

 

 

(in thousands)

 

June 29,

2019

 

December 29,

2018

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

474,781

 

 

$

489,733

 

Short-term investments

 

34

 

 

34

 

Trade receivables, less allowances of $34,468 and $36,038 at June 29, 2019 and December 29, 2018, respectively

 

245,723

 

 

232,892

 

Inventories

 

254,305

 

 

258,228

 

Prepaid income taxes and income taxes receivable

 

1,374

 

 

2,339

 

Prepaid expenses and other current assets

 

63,332

 

 

49,291

 

Total current assets

 

1,039,549

 

 

1,032,517

 

Net property, plant, and equipment

 

338,500

 

 

339,894

 

Intangible assets, net of amortization

 

341,174

 

 

361,474

 

Goodwill

 

826,408

 

 

826,715

 

Investments

 

25,456

 

 

25,405

 

Deferred income taxes

 

9,200

 

 

7,330

 

Right of use lease assets, net

 

23,280

 

 

 

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