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| 8-K - FORM 8-K - LITTELFUSE INC /DE | littlefuse_8k-050511.htm |
EXHIBIT 99.1
NEWS RELEASE
CONTACT: Phil Franklin,
Vice President, Operations Support, CFO and Treasurer (773) 628-0810
LITTELFUSE REPORTS FIRST QUARTER RESULTS
CHICAGO, May 5, 2011 – Littelfuse, Inc. (NASDAQ:LFUS) today reported sales and earnings for the first quarter of 2011.
First Quarter Highlights
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Sales for the first quarter of 2011 were $167.2 million, a 16% increase compared to the first quarter of 2010.
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Electronics sales increased 4% year over year due to increased end-market demand across all geographies partially offset by some inventory reduction in the distribution channels.
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The book-to-bill ratio for electronics for the first quarter of 2011 was 1.13.
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Excluding Cole Hersee (acquired on December 17, 2010), automotive sales increased 11% due to further recovery in North America and Europe and continued strong growth in Asia. Cole Hersee added approximately $13 million in the seasonally strong first quarter.
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Electrical sales increased 12% year over year due to continued growth in protection relays and custom mining products and recovery in the industrial fuse market. This was partially offset by a pause in the high-growth solar market.
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On a GAAP basis, diluted earnings per share for the first quarter of 2011 increased to $0.96 from $0.69 in the first quarter of 2010 due primarily to higher sales and an improved cost structure.
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Adjusted diluted earnings per share were $1.08 (see Supplemental Information on page 8). The adjustment to GAAP earnings was to remove a $3.7 million non-cash charge related to the sale of Cole Hersee inventory that had been stepped-up to fair value as required by purchase accounting rules.
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Cash provided by operating activities was $13.7 million for the first quarter of 2011 compared to $6.9 million for the first quarter of 2010. Cash flow for the first quarter of 2011 was impacted by a $13.2 million payout for 2010 incentive compensation. Cash flow for the first quarter of 2010 was impacted by a $6.0 million pension contribution.
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Page 2
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“In the first quarter we made progress on our growth initiatives while continuing to control costs and drive manufacturing improvements,” said Gordon Hunter, Chief Executive Officer. “Our automotive business achieved record performance as a result of strong organic growth and a solid start for Cole Hersee. The Electrical business continues to grow with protection relays and custom products leading the way. The Electronics business posted only modest growth in the first quarter, but the order rate has been increasing and backlog is building.”
“The ability to exceed a 20% operating margin (excluding special charges) in the first quarter, which traditionally has been one of our weaker quarters, is a testament to our new, leaner business model,” said Phil Franklin, Chief Financial Officer.
Outlook
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Sales for the second quarter are expected to be in the range of $173 to $183 million, which represents 10% to 16% growth over the second quarter of 2010.
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Earnings for the second quarter of 2011 are expected to be in the range of $1.10 to $1.25 per diluted share.
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Dividend
The company will pay a cash dividend of $0.15 per common share on June 6, 2011 to shareholders of record at the close of business on May 23, 2011.
Conference Call Webcast Information
Littelfuse will host a conference call today, Thursday, May 5, 2011 at 11:00 a.m. Eastern/10:00 a.m. Central time to discuss the first quarter results. The call will be broadcast live over the Internet and can be accessed through the company’s Web site: www.littelfuse.com. Listeners should go to the Web site at least 15 minutes prior to the call to download and install any necessary audio software. The call will be available for replay through June 30, 2011 and can be accessed through the Web site listed above.
About Littelfuse
Littelfuse, Inc. is the worldwide leader in circuit protection with 2010 revenues of $608 million. Founded in 1927, Littelfuse offers the industry’s broadest and deepest portfolio of circuit protection products and solutions. Backed by industry-leading technical support, design and manufacturing expertise, Littelfuse devices protect products in virtually every market that uses electrical energy, from
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consumer electronics to automobiles to industrial equipment. In addition to its Chicago, Illinois, world headquarters, Littelfuse has more than 20 sales, distribution, manufacturing and engineering facilities in the Americas, Europe and Asia. Technologies offered by Littelfuse include Fuses; Gas Discharge Tubes (GDTs); Positive Temperature Coefficient Devices (PTCs); Protection Relays; PulseGuard® ESD Suppressors; SIDACtor® Devices; TVS Diode Arrays (SPA™ Family of Products); Switching Thyristors; TVS Diodes and Varistors. The company also offers a comprehensive line of highly reliable Electromechanical and Electronic Switch and Control Devices for commercial and specialty vehicles, as well as underground Power Distribution Centers for safe control and distribution of electricity in the mining industry.
For more information, please visit Littelfuse’s Web site at www.littelfuse.com.
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“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 the company’s accounting policies, labor disputes, restructuring costs in excess of expectations, pension plan asset returns less than assumed, integration of acquisitions and other risks which may be detailed in the company’s other 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 report 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 January 1, 2011. 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 January 1, 2011.
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# # #
Page 4
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LITTELFUSE, INC.
Net Sales by Business Unit and Geography
(In millions of USD, unaudited)
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| First Quarter | ||||||||||||||||||||
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2011
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2010* |
% Change
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Business Unit
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Electronics
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$ | 87.4 | $ | 84.4 | 4 | % | ||||||||||||||
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Automotive
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53.9 | 36.9 | 46 | % | ||||||||||||||||
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Electrical
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25.9 | 23.1 | 12 | % | ||||||||||||||||
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Total
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$ | 167.2 | $ | 144.4 | 16 | % | ||||||||||||||
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First Quarter
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| 2011 | 2010 |
% Change
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Geography
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Americas
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$ | 70.8 | $ | 53.3 | 33 | % | ||||||||||||||
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Europe
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32.6 | 29.8 | 9 | % | ||||||||||||||||
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Asia-Pacific
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63.8 | 61.3 | 4 | % | ||||||||||||||||
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Total
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$ | 167.2 | $ | 144.4 | 16 | % | ||||||||||||||
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*In the first quarter of 2011, the company adjusted its business segment reporting methodology
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to roll-up segment financials by product line rather than by sales organization. This change more
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closely aligns segment reporting with how the company manages its businesses. The company's
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consolidated revenues and operating income were not affected by this change.
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2010 Restated Revenue by Quarter
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| Q1 | Q2 | Q3 | Q4 | 2010 | ||||||||||||||||
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Electronics
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$ | 84.4 | $ | 99.1 | $ | 103.7 | $ | 86.4 | $ | 373.6 | ||||||||||
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Automotive
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36.9 | 34.5 | 34.1 | 33.3 | 138.8 | |||||||||||||||
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Electrical
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23.1 | 23.9 | 25.7 | 22.9 | 95.6 | |||||||||||||||
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Total
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$ | 144.4 | $ | 157.5 | $ | 163.5 | $ | 142.6 | $ | 608.0 | ||||||||||
Page 5
LITTELFUSE, INC.
Condensed Consolidated Balance Sheets
(In thousands of USD, except share amounts)
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April 2, 2011
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January 1, 2011
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(Unaudited)
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ASSETS
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Current assets:
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Cash and cash equivalents
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$ | 131,533 | $ | 109,720 | ||||
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Accounts receivable, less allowances
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110,685 | 97,753 | ||||||
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Inventories
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77,061 | 80,182 | ||||||
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Deferred income taxes
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9,437 | 10,588 | ||||||
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Prepaid expenses and other current assets
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16,863 | 13,882 | ||||||
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Assets held for sale
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6,831 | 6,831 | ||||||
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Total current assets
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352,410 | 318,956 | ||||||
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Property, plant and equipment:
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Land
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5,857 | 5,688 | ||||||
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Buildings
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54,040 | 53,089 | ||||||
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Equipment
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273,980 | 276,371 | ||||||
| 333,877 | 335,148 | |||||||
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Accumulated depreciation
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(204,987 | ) | (205,001 | ) | ||||
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Net property, plant and equipment
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128,890 | 130,147 | ||||||
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Intangible assets, net of amortization:
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Patents, licenses and software
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10,949 | 11,211 | ||||||
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Distribution network
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19,250 | 9,752 | ||||||
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Customer lists, trademarks and tradenames
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15,775 | 20,865 | ||||||
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Goodwill
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110,227 | 112,687 | ||||||
| 156,201 | 154,515 | |||||||
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Investments
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13,656 | 11,660 | ||||||
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Deferred income taxes
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3,201 | 3,271 | ||||||
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Other assets
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2,666 | 2,580 | ||||||
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Total Assets
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$ | 657,024 | $ | 621,129 | ||||
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LIABILITIES AND EQUITY
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Current liabilities:
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Accounts payable
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$ | 28,253 | $ | 24,079 | ||||
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Accrued payroll
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14,683 | 24,186 | ||||||
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Accrued expenses
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10,481 | 10,307 | ||||||
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Accrued severance
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2,633 | 3,279 | ||||||
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Accrued income taxes
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15,339 | 14,997 | ||||||
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Current portion of long-term debt
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36,000 | 33,000 | ||||||
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Total current liabilities
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107,389 | 109,848 | ||||||
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Long-term debt, less current portion
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39,000 | 41,000 | ||||||
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Accrued severance
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557 | 486 | ||||||
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Accrued post-retirement benefits
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5,684 | 5,564 | ||||||
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Other long-term liabilities
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11,609 | 11,571 | ||||||
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Total equity
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492,785 | 452,660 | ||||||
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Total liabilities and equity
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$ | 657,024 | $ | 621,129 | ||||
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Common shares issued and outstanding of
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21,992,475 and 21,752,536, at April 2, 2011,
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and January 1, 2011, respectively.
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Page 6
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LITTELFUSE, INC.
Consolidated Statements of Income
(In thousands of USD, except per share data, unaudited)
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For the Three Months Ended
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April 2, 2011
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April 3, 2010
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Net sales
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$ | 167,160 | $ | 144,402 | ||||
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Cost of sales
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102,457 | 91,122 | ||||||
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Gross profit
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64,703 | 53,280 | ||||||
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Selling, general and administrative
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expenses
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27,395 | 26,447 | ||||||
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Research and development expenses
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4,795 | 3,950 | ||||||
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Amortization of intangibles
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1,595 | 1,240 | ||||||
| 33,785 | 31,637 | |||||||
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Operating income
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30,918 | 21,643 | ||||||
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Interest expense
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336 | 427 | ||||||
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Other expense (income), net
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(26 | ) | 110 | |||||
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Income before income taxes
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30,608 | 21,106 | ||||||
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Income taxes
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9,030 | 5,637 | ||||||
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Net income
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$ | 21,578 | $ | 15,469 | ||||
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Income per share:
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Basic
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$ | 0.98 | $ | 0.70 | ||||
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Diluted
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$ | 0.96 | $ | 0.69 | ||||
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Weighted average shares and
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equivalent shares outstanding:
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Basic
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21,878 | 21,847 | ||||||
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Diluted
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22,328 | 22,205 | ||||||
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Diluted Income Per Share
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Net income as reported
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$ | 21,578 | $ | 15,469 | ||||
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Less: income allocated to participating securities
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(102 | ) | (126 | ) | ||||
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Net income available to common shareholders
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$ | 21,476 | $ | 15,343 | ||||
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Weighted average shares adjusted for dilutive securities
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22,328 | 22,205 | ||||||
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Diluted income per share
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$ | 0.96 | $ | 0.69 | ||||
Page 7
LITTELFUSE, INC.
Consolidated Statements of Cash Flows
(In thousands of USD, unaudited)
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For the Three Months Ended
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April 2, 2011
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April 3, 2010
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OPERATING ACTIVITIES:
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Net income
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$ | 21,578 | $ | 15,469 | ||||
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Adjustments to reconcile net income to net cash
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provided by operating activities:
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Depreciation
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5,995 | 7,534 | ||||||
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Amortization of intangibles
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1,595 | 1,240 | ||||||
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Non-cash inventory write-off*
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3,678 | - | ||||||
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Stock-based compensation
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1,182 | 1,120 | ||||||
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Excess tax benefit on Stock-based compensation
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(975 | ) | (217 | ) | ||||
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(Gain) on sale of assets
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(167 | ) | (563 | ) | ||||
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Changes in operating assets and liabilities:
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Accounts receivable
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(11,279 | ) | (13,942 | ) | ||||
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Inventories
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675 | (4,540 | ) | |||||
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Accounts payable
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3,904 | 2,794 | ||||||
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Accrued expenses (including post retirement)
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(557 | ) | (4,837 | ) | ||||
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Accrued payroll and severance
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(10,124 | ) | (2,083 | ) | ||||
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Accrued taxes
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771 | 5,940 | ||||||
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Prepaid expenses and other
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(2,559 | ) | (1,025 | ) | ||||
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Net cash provided by operating activities
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13,717 | 6,890 | ||||||
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INVESTING ACTIVITIES:
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Purchases of property, plant and equipment
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(4,614 | ) | (2,276 | ) | ||||
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Proceeds from sale of assets
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167 | 4,532 | ||||||
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Net cash (used in) provided by investing activities
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(4,447 | ) | 2,256 | |||||
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FINANCING ACTIVITIES:
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Proceeds from debt
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15,000 | 4,095 | ||||||
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Payments of debt
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(14,000 | ) | (8,517 | ) | ||||
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Cash dividends paid
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(3,284 | ) | - | |||||
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Proceeds from exercise of stock options
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9,998 | 3,818 | ||||||
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Excess tax benefit on stock-based compensation
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975 | 217 | ||||||
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Net cash provided by (used in) financing activities
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8,689 | (387 | ) | |||||
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Effect of exchange rate changes on cash and cash
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equivalents
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3,854 | (1,978 | ) | |||||
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Increase in cash and cash equivalents
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21,813 | 6,781 | ||||||
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Cash and cash equivalents at beginning of period
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109,720 | 70,354 | ||||||
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Cash and cash equivalents at end of period
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$ | 131,533 | $ | 77,135 | ||||
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* Purchase accounting adjustment related to the Cole Hersee acquisition.
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Page 8
LITTELFUSE, INC.
Supplemental Information
(In thousands of USD, except per share data, unaudited)
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For the Three Months Ended
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April 2, 2011
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U.S. GAAP
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Special Items
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Adjusted
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Net sales
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$ | 167,160 | $ | - | $ | 167,160 | ||||||
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Cost of sales
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102,457 | (3,678 | )(1) | 98,779 | ||||||||
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Gross profit
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64,703 | 3,678 | 68,381 | |||||||||
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% of sales
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38.7 | % | 40.9 | % | ||||||||
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Total operating expenses
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33,785 | - | 33,785 | |||||||||
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% of sales
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20.2 | % | 20.2 | % | ||||||||
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Operating income
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30,918 | 3,678 | 34,596 | |||||||||
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% of sales
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18.5 | % | 20.7 | % | ||||||||
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Interest/other expense (income), net
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310 | - | 310 | |||||||||
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Income before income taxes
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30,608 | 3,678 | 34,286 | |||||||||
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Income tax expense
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9,030 | 1,085 | 10,115 | |||||||||
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Effective tax rate
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29.5 | % | 29.5 | % | ||||||||
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Net income as reported
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21,578 | 2,593 | 24,171 | |||||||||
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Less: Income allocated to participating securities
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(102 | ) | (14 | ) | (116 | ) | ||||||
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Net Income available to common shareholders
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$ | 21,476 | $ | 2,579 | $ | 24,055 | ||||||
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Net income per diluted share:
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$ | 0.96 | $ | 0.12 | $ | 1.08 | ||||||
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Weighted average shares adjusted for
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dilutive securities:
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22,328 | 22,328 | 22,328 | |||||||||
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Note: The Company believes that adjusted operating income is more indicative of its ongoing operating performance than U.S. GAAP operating income because the former excludes special charges that are one-time in nature.
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Special Items:
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(1)
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Purchase accounting adjustment related to the Cole Hersee acquisition.
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