Back to GetFilings.com
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
(Mark One) for the fiscal year ended January 3, 2004 or
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
for the transition period from to
Commission file number 0-20388
LITTELFUSE, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-3795742
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
800 East Northwest Highway,
Des Plaines, Illinois 60016
(Address of principal executive offices) (Zip Code)
847/824-1188
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.01
par value
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act). Yes [X] No [ ]
The aggregate market value of 21,359,097 shares of voting stock held by
non-affiliates of the registrant was approximately $462,638,041 based on the
last reported sale price of the registrant's Common Stock as reported on The
Nasdaq Stock Market on June 27, 2003.
As of March 12, 2004, the registrant had outstanding 22,059,993 shares
of Common Stock.
Portions of the following documents have been incorporated herein by
reference to the extent indicated herein:
Littelfuse, Inc. Proxy Statement dated March 26, 2004 (the "Proxy
Statement") --Part III.
Littelfuse, Inc. Annual Report to Stockholders for the year ended
January 3, 2004 (the "Annual Report to Stockholders") -- Parts II and
III.
PART I
ITEM 1. BUSINESS
GENERAL
Littelfuse, Inc. (the "Company" or "Littelfuse") is the world's leading
supplier of circuit protection products for the electronics industry. The
Company provides the broadest line of circuit protection solutions to worldwide
customers. The Company is also the leading provider of circuit protection for
the automotive industry and the third largest producer of electrical fuses in
North America.
In the electronic market, the Company supplies leading manufacturers
such as Alcatel, Celestica, Compal, Delta, Flextronics, Fuji, GE, HP, Huawei,
Hughes, IBM, Intel, Jabil, Legend, LG, Matsushita, Motorola, Nokia, Palm,
Quanta, Samsung, Sanmina-SCI, Sanyo, Selectron, Siemens, Sony and Toshiba. In
the automotive market, the Company's customers include major automotive
manufacturers in North American, Europe and Asia such as BMW, DaimlerChrysler,
Ford Motor, General Motors, Honda Motor, Hyundia and Toyota. The Company also
supplies wiring harness manufacturers and auto parts suppliers worldwide,
including Alcoa Fujikawa, Auto Zone, Delphi, Lear, Pep Boys, Siemens VDO and
Yazaki. The Company also competes in the electrical fuse market with
representative customers such as Abbott, Carrier, Dow Chemical, DuPont, GE,
General Motors, Heinz, International Paper, John Deere, Lithonia Lighting,
Marconi, Merck, Otis Elevator, Poland Springs, Procter & Gamble, Rockwell and
3M. See "Business Environment: Circuit Protection Market."
The Company manufactures many of its products on fully integrated
manufacturing and assembly equipment. The Company maintains product quality
through a rigorous quality assurance program with all sites certified under ISO
9001/TS16949 standards and its world headquarters certified under the ISO
9000:/TS16949 and ISO 14001 standards.
The Company's products are sold worldwide through a direct sales force
and manufacturers' representatives. For the year ended January 3, 2004,
approximately 55.9% of the Company's net sales were to customers outside the
United States (exports and foreign operations).
References herein to "2001" or "fiscal 2001" refer to the fiscal year
ended December 29, 2001. References herein to "2002" or "fiscal 2002" refer to
the fiscal year ended December 28, 2002. References herein to "2003" or "fiscal
2003" refer to the fiscal year ended January 3, 2004.
The Company's annual report on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K, and all amendments to those reports are
currently available free of charge through the "Investor Relations" section of
the Company's Internet website (http://www.littelfuse.com) as soon as
practicable after such material is electronically filed with, or furnished to,
the Securities and Exchange Commission.
1
BUSINESS ENVIRONMENT: CIRCUIT PROTECTION MARKET
The Company serves customers in three major product areas of the
circuit protection market: electronic, automotive and electrical. Net sales by
product area for the periods indicated are as follows:
Fiscal Year
(in thousands)
-----------------------------------------------------
2003 2002 2001
-------- -------- --------
Electronic $206,523 $150,838 $146,342
Automotive 98,327 98,235 91,061
Electrical 34,560 34,194 34,746
-------- -------- --------
Total $339,410 $283,267 $272,149
======== ======== ========
ELECTRONIC PRODUCTS
Electronic circuit protection products are used to protect circuits in a
multitude of electronic systems. The Company's product offering includes a
complete line of overcurrent and overvoltage solutions including: (1) fuses and
protectors (2) positive temperature coefficient (PTC) resettables (3) varistors
(4) electrostatic discharge (ESD) suppressors (5) discrete transient voltage
suppression (TVS) diodes, TVS diode arrays and protection thyristors (6) gas
discharge tubes (7) power switching components (8) fuseholders, blocks and
other.
Electronic fuses and protectors are devices that contain an element which melts
in an overcurrent condition. Electronic miniature and subminiature fuses are
designed to provide circuit protection in the limited space requirements of
electronic equipment. The Company's fuses are used in a wide variety of
electronic products, including wireless telephones, consumer electronics,
computers, modems and telecommunications equipment. The Company markets these
products under the following trademarked and brand names: PICO(R) II and NANO2
(R) SMF.
Resettables are positive temperature coefficient (PTC) polymer devices that
limit the current when an overcurrent condition exists and then reset themselves
once the overcurrent condition has cleared. The Company markets a line of
surface mount PTC devices used primarily for computer and peripheral
applications such as motherboards, disk drives, modems and printers.
Varistors are ceramic-based high-energy absorption devices that provide
transient overvoltage and surge suppression for automotive, telecommunication,
consumer electronics and industrial applications. The Company's product line
offers both radial leaded and multilayer surface mount products.
Electrostatic discharge (ESD) suppressors are polymer-based devices that protect
an electronic system from failure due to rapid transfer of electrostatic charge
to the circuit. The Company's PulseGuard(R) line of ESD suppressors is used in
PC and PC peripherals, digital consumer electronics and wireless applications.
2
Discrete diodes, diode arrays and protection thyristors are fast switching
silicon semiconductor structures. Discrete diodes protect a wide variety of
applications from overvoltage transients such as ESD, inductive load switching
or lightning, while diode arrays are used primarily as ESD suppressors.
Protection thyristors are commonly used to protect telecommunications circuits
from overvoltage transients such as those resulting from lightning. Applications
include telephones, modems, data transmission lines and alarm systems. The
Company markets these products under the following trademarked brand names:
TECCOR(R), SIDACtor(R) and Battrax(R).
Gas discharge tubes are very low capacitance devices designed to suppress any
transient voltage event that is greater than the breakover voltage of the
device. These devices are primarily used in telecom interface and conversion
equipment applications as protection from overvoltage transients such as
lightning.
Power switching components are used to regulate energy to various type loads
most commonly found in industrial and home equipment. These components are
easily activated from simple control circuits or interfaced to computers for
more complex load control. Typical applications include heating, cooling,
battery chargers and lighting.
In addition to the above products, the Company is also a supplier of fuse
holders (including OMNI-BLOK(R)), fuse blocks and fuse clips primarily to
customers that purchase circuit protection devices from the Company.
AUTOMOTIVE PRODUCTS
Fuses are extensively used in automobiles, trucks, buses and off-road equipment
to protect electrical circuits and the wires that supply electrical power to
operate lights, heating, air conditioning, radios, windows and other controls.
Currently, a typical automobile contains 30 to 100 fuses, depending upon the
options installed. The fuse content per vehicle is expected to continue to grow
as more electronic features are included in automobiles. The Company also
supplies fuses for the protection of electric and hybrid vehicles.
The Company is a primary supplier of automotive fuses to United States, Asian
and European automotive OEMs, automotive component parts manufacturers and
automotive parts distributors. The Company also sells its fuses in the
replacement parts market, with its products being sold through merchandisers,
discount stores and service stations, as well as under private label by national
firms. The Company invented and owns most of the U.S. patents related to the
blade type fuse which is the standard and most commonly used fuse in the
automotive industry. The Company's automotive fuse products are marketed under
the following trademarked brand names: ATO(R), MINI(R), MAXI(TM), MIDI(R),
MEGA(TM) and CablePro(TM).
A majority of the Company's North American automotive fuse sales are made to
wire harness manufacturers that incorporate the fuses into their products. The
remaining automotive fuse sales are made directly to automotive manufacturers
and through distributors who in turn sell most of their products to automotive
product wholesalers, such as warehouse distributors, discount stores and service
stations.
3
The Company has licensed its patented MINI(R) and MAXI(TM) automotive fuse
designs to Bussmann, a division of Cooper Industries. Bussmann is the Company's
largest domestic competitor. Additionally, the Company has entered into a
licensing agreement with Pacific Engineering Company, Ltd., a Japanese fuse
manufacturer, which produces and distributes the Company's patented MINI(R)
fuses to Asian automotive OEMs and wire harness manufacturers. See "Business --
Patents, Trademarks and Other Intellectual Property" and "Competition."
ELECTRICAL PRODUCTS
The Company entered the electrical fuse market in 1983 and manufactures and
sells a broad range of low-voltage and medium-voltage circuit protection
products to electrical distributors and their customers in the construction,
original equipment manufacturers ("OEM") and industrial maintenance and repair
operations ("MRO") markets.
Power fuses are used to protect circuits in various types of industrial
equipment and circuits in industrial plants, office buildings and residential
units. They are rated and listed under one of many Underwriters' Laboratories
fuse classifications. Major applications for power fuses include protection from
over-load and short-circuit currents in motor branch circuits, heating and
cooling systems, control systems, lighting circuits and electrical distribution
networks.
The Company's POWR-GARD(R) product line features the Indicator(TM) series power
fuse used in both the OEM and MRO markets. The Indicator(TM) technology provides
visual blown fuse indication at a glance, reducing maintenance and downtime on
production equipment. The Indicator(TM) product offering is widely used in motor
protection and industrial control panel applications.
PRODUCT DESIGN AND DEVELOPMENT
The Company employs scientific, engineering and other personnel to continually
improve its existing product lines and to develop new products at its research
and engineering facilities in Des Plaines, Illinois, Irving, Texas, Swindon, UK
and Dundalk, Ireland. The Product Technology Department maintains a staff of
engineers, chemists, material scientists and technicians whose primary
responsibility is the design and development of new products.
Proposals for the development of new products are initiated primarily by sales
and marketing personnel with input from customers. The entire product
development process typically ranges from a couple of weeks to 18 months based
on complexity of development with continuous efforts to reduce the development
cycle. During fiscal years 2003, 2002 and 2001, the Company expended $8.7
million, $8.3 million and $8.9 million, respectively, on product design and
development.
PATENTS, TRADEMARKS AND OTHER INTELLECTUAL PROPERTY
The Company generally relies on patent and trademark laws and license and
nondisclosure agreements to protect intellectual property and proprietary
products. In cases where it is deemed necessary by management, key employees are
required to sign an agreement that they will
4
maintain the confidentiality of the Company's proprietary information and trade
secrets. This information, for business reasons, is not disclosed to the public.
As of January 3, 2004, the Company owned 160 patents in North America, 30
patents in the European Economic Community and 15 patents in other foreign
countries. The Company has also registered trademark protection for certain of
its brand names and logos. The 160 North American patents are in the following
product categories: 109 electronic, 29 automotive, 22 electrical fuse.
New products are continually being developed to replace older products. The
Company regularly applies for patent protection on such new products. Although
in the aggregate the Company's patents are important in the operation of its
businesses, the Company believes that the loss by expiration or otherwise of any
one patent or group of patents would not materially affect its business.
The Company currently licenses its MINI(R) and MAXI(TM) automotive fuse
technology to Bussmann, a division of Cooper Industries and the Company's
largest domestic competitor. The license granted in 1987 is nonexclusive and
grants the Company the right to receive royalties of 4% of the licensee's
revenues from the sale of the licensed products with an annual minimum of
$25,000. This license expires upon the expiration of the licensed product
patents.
In addition, a second license covering the MINI(R) Fuse technology was granted
to Pacific Engineering Company, Ltd., a Japanese manufacturer that produces and
distributes the Company's patented automotive fuses to Asian-based automotive
OEMs and wire harness manufacturers. The license provides the Company with
royalties of 2.5% of the licensee's revenues from the sale of the licensed
products, with an annual minimum of $100,000. This second license expires on
April 6, 2006.
License royalties amounted to $409,000, $369,000 and $390,000 for fiscal 2003,
2002 and 2001, respectively.
MANUFACTURING
The Company performs the majority of its own fabrication and stamps some of the
metal components used in its fuses, holders and switches from raw metal stock
and makes its own contacts and springs. In addition, the Company fabricates
silicon wafers for certain applications and performs its own plating (silver,
nickel, zinc, tin and oxides). All thermoplastic molded component requirements
used for such products as the ATO(R), MINI(R) and MAXI(TM) fuse product lines
are met through the Company's in-house molding capabilities.
After components are stamped, molded, plated and readied for assembly, final
assembly is accomplished on fully automatic and semi-automatic assembly
machines. Quality assurance and operations personnel, using techniques such as
Statistical Process Control, perform tests, checks and measurements during the
production process to maintain the highest levels of product quality and
customer satisfaction.
5
The principal raw materials for the Company's products include copper and copper
alloys, heat resistant plastics, zinc, melamine, glass, silver, raw silicon,
solder and various gases. The Company depends upon a sole source for several
heat resistant plastics and zinc. The Company believes that suitable alternative
heat resistant plastics and zinc are available from other sources at prices that
would not have a material adverse effect on the Company. All of the other raw
materials are purchased from a number of readily available outside sources.
A computer-aided design and manufacturing system (CAD/CAM) expedites product
development and machine design, laboratories test new products, prototype
concepts and production run samples. The Company participates in "Just-in-Time"
delivery programs and with many of its major suppliers and actively promotes the
building of strong cooperative relationships with its suppliers by utilizing
Early Supplier Involvement techniques and involving them in pre-engineering
product and process development.
MARKETING
The Company's domestic sales and marketing staff of over 25 people maintains
relations with major OEMs and distributors. The Company's sales, marketing and
engineering personnel interact directly with the OEM engineers to ensure
appropriate circuit protection and reliability within the parameters of the
OEM's circuit design. Internationally, the Company maintains a sales and
marketing staff of over 40 people and sales offices in The Netherlands, England,
France, Germany, Spain, Ireland, Singapore, Taiwan, Japan, Brazil, Hong Kong,
Korea and China. The Company also markets its products indirectly through a
worldwide organization of over 120 manufacturers' representatives and
distributes through an extensive network of electronic, automotive and
electrical distributors.
ELECTRONIC. The Company retains manufacturers' representatives to sell its
electronic products and to call on major domestic and international OEMs and
distributors. The Company distributes approximately one-third of its domestic
products directly to OEMs, with the remainder sold through distributors
nationwide.
In the Asia-Pacific region, the Company maintains a direct sales staff and
utilizes manufacturers' representatives and distributors in Japan, Singapore,
Korea, Taiwan, China, Malaysia, Thailand, Hong Kong, India, Indonesia,
Philippines, New Zealand and Australia. In Europe, the Company maintains a
direct sales force and utilizes manufacturers' representatives and distributors
to support a wide array of customers.
AUTOMOTIVE. The Company maintains a direct sales force to service all the major
automotive OEMs (including the United States manufacturing operations of
foreign-based OEMs) through both the engineering and purchasing departments of
these companies. Twenty-two manufacturers' representatives represent the
Company's products to aftermarket fuse retailers such as Autozone and Pep Boys.
In Europe, the Company uses both a direct sales force and manufacturers'
representatives to distribute its products to BMW, Volvo, Saab, Jaguar and other
OEMs, as well as aftermarket distributors. In the Asia-Pacific region, the
Company has licensed its automotive fuse technology to a Japanese firm, which
supplies the majority of the automotive fuses to the Japanese customers in the
region including Toyota, Honda and Nissan.
6
ELECTRICAL. The Company markets and sells its power fuses through manufacturers'
representatives across North America. These representatives sell power fuse
products through an electrical distribution network comprised of approximately
1,600 distributor buying locations. These distributors have customers that
include electrical contractors, municipalities, utilities and factories
(including both MRO and OEM).
The Company's field sales force (including regional sales managers and
application engineers) and manufacturers' representatives call on both
distributors and end-users (consulting engineers, municipalities, utilities and
OEMs) in an effort to educate these customers on the capabilities and
characteristics of the Company's products.
BUSINESS SEGMENT INFORMATION
The Company has three reportable business segments: The Americas, Europe and
Asia-Pacific. For information with respect to the Company's operations in its
three geographic areas for the fiscal year ended January 3, 2004, see "Item 8.
Financial Statements and Supplementary Data - Business Segment Information"
incorporated herein by reference.
CUSTOMERS
The Company sells to over 10,000 customers worldwide. No single customer
accounted for more than 10% of net sales during the last three years. During the
2003, 2002 and 2001 fiscal years, net sales to customers outside the United
States (exports and foreign operations) accounted for approximately 55.9%, 53.7%
and 51.9%, respectively, of the Company's total net sales.
COMPETITION
The Company's products compete with similar products of other manufacturers,
some of which have substantially greater financial resources than the Company.
In the electronics market, the Company's competitors include AVX, Bel Fuse,
Bourns, Cooper Electronics, EPCOS, Raychem Division of TYCO International, San-O
Industrial Corp., STMicroelectronics and Wickmann-Werke GmbH. In the automotive
fuse market, the Company's competitors, both in sales to automobile
manufacturers and in the aftermarket, include Bussmann Division of Cooper
Industries, Pudenz Division of Wickmann-Werke and MTA in Italy. The Company
licenses several of its automotive fuse designs to Bussmann. In the electrical
market, the Company's major competitors include Cooper Bussmann and Ferraz
Shawmut. The Company believes that it competes on the basis of innovative
products, the breadth of its product line, the quality and design of its
products and the responsiveness of its customer service in addition to price.
BACKLOG
The backlog of unfilled orders at January 3, 2004, was approximately $55.4
million, compared to $29.2 million at December 28, 2002. Substantially all of
the orders currently in backlog are scheduled for delivery in 2004.
7
EMPLOYEES
As of January 3, 2004, the Company employed 4,896 persons. Approximately 45
employees in Des Plaines, 1730 employees in Mexico, and 138 employees in Ireland
are covered by collective bargaining agreements. The Des Plaines agreement
expires in March 2005, the Mexico agreement expires February 2005 for 515
employees and February 2006 for 1,215 employees and the Ireland agreement
expires December 31, 2006. Overall, the Company has historically maintained
satisfactory employee relations and many of its employees have long experience
with the Company.
ENVIRONMENTAL REGULATION
The Company is subject to numerous federal, state and local regulations relating
to air and water quality, the disposal of hazardous waste materials, safety and
health. Compliance with applicable environmental regulations has not
significantly changed the Company's competitive position, capital spending or
earnings in the past and the Company does not presently anticipate that
compliance with such regulations will change its competitive position, capital
spending or earnings for the foreseeable future. The Company employs an
environmental engineer to monitor regulatory matters and believes that it is
currently in compliance in all material respects with applicable environmental
laws and regulations, except with respect to its facilities located in Ireland
and Irving, Texas. The Ireland facility was acquired in October 1999 in
connection with the acquisition of the Harris suppression products division.
Corrective steps are being taken to bring this facility into compliance with
Irish environmental laws, and the Company received an indemnity from Harris
Corporation with respect to these matters. The Irving, Texas facility lease was
assumed in July 2003 in connection with the acquisition of Teccor Electronics,
Inc. The Company is taking the appropriate measures to bring this facility into
compliance with Texas environmental laws, and the Company also received an
indemnity from Invensys plc with respect to this matter.
RISKS AND UNCERTAINTIES
The Company's business is subject to several risks and uncertainties, including:
(a) the highly competitive nature of the Company's industry and the impact that
competitors' new products and pricing may have upon the Company, (b) risks
associated with the Company's ability to manufacture and deliver products in a
manner that is responsive to its customers' needs, (c) risks of business
interruption resulting from labor disputes and (d) the likelihood that revenues
may vary significantly from one accounting period to another due to a variety of
factors, including customers' buying decisions, the Company's product mix and
general market and economic conditions. Such factors, as well as shortfalls in
the Company's results of operations as compared with analysts' expectations,
capital market conditions and general economic conditions, may also cause
substantial volatility in the market price of the Company's common stock.
8
ITEM 2. PROPERTIES
LITTELFUSE FACILITIES
The Company's operations are located in 22 owned or leased facilities worldwide,
representing an aggregate of approximately 1,042,705 square feet. The U.S.
headquarters and largest manufacturing facility are located in Des Plaines,
Illinois, supported by the Company's new North American distribution center in
nearby Elk Grove Village, Illinois. The Company has additional North American
manufacturing facilities in Arcola, Illinois, and Irving, Texas, as well as two
plants in Mexico. The European headquarters and primary European distribution
center are in Utrecht, the Netherlands, with manufacturing plants in England,
Ireland and Switzerland. Asian operations include sales and distribution centers
located in Singapore, Taiwan, Japan and Korea, with manufacturing plants in
China and the Philippines. The Company does not believe that it will encounter
any difficulty in renewing its existing leases upon the expiration of their
current terms. Management believes that the Company's facilities are adequate to
meet its requirements for the foreseeable future.
The following table provides certain information concerning the Company's
facilities:
Lease
Size Lease/ Expiration
Location Use (sq.ft.) Own Date Primary Product
-------- --- -------- --- ---- ---------------
Des Plaines, Illinois Administrative, 340,000 Owned -- Auto, Electronic,
Engineering, Electrical
Manufacturing,
Testing and Research
Irving, Texas Administrative, 101,000 Leased 2005 Electronic
Engineering,
Manufacturing,
Testing and Research
Brownsville, Texas Distribution 20,000 Leased 2009 Electronic
Matamoros, Mexico Manufacturing 77,500 Leased 2005 Electronic
Matamoros, Mexico Administrative, 14,000 Leased 2005 Electronic
Manufacturing
Arcola, Illinois Manufacturing 36,000 Owned -- Electrical
Piedras Negras, Mexico Manufacturing, 11,151 Leased 2004 Electronic and
Warehousing Electrical
9
Piedras Negras, Mexico Warehousing 22,306 Leased 2006 Electronic and
Electrical
Swindon, England Manufacturing 55,000 Leased 2004 Electronic
Utrecht, the Netherlands Sales, 34,642 Owned -- Auto and Electronic
Administrative and
Distribution
Grenchen, Switzerland Manufacturing 11,000 Owned -- Auto
Lease
Size Lease/ Expiration
Location Use (sq.ft.) Own Date Primary Product
-------- --- -------- --- ---- ---------------
Singapore Sales and 15,696 Leased 2006 Electronic & Auto
Distribution
Seoul, Korea Sales 4,589 Leased 2004 Electronic and Auto
Philippines Manufacturing 58,127 Owned -- Electronic
Suzhou, China Manufacturing 43,913 Owned -- Electronic
Suzhou, China Warehousing 26,039 Leased 2004 Electronic
Hong Kong, China Sales 2,000 Leased 2004 Electronic
Taipei, Taiwan Sales 255 Leased 2007 Electronic
Yokohama, Japan Sales 6,243 Leased 2004 Electronic
Yokohama, Japan Distribution 17,858 Leased 2005 Electronic
Sao Paulo, Brazil Sales 800 Leased 2004 Electronic & Auto
Dundalk, Ireland Manufacturing 120,000 Owned -- Electronic & Auto
10
Properties with lease expirations in 2004 renew at various times throughout the
year. At this point, the Company does not anticipate any material impact as a
result of such expirations.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any legal proceedings that it believes will have a
material adverse effect upon the conduct of its business or its financial
position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to the Company's stockholders during the fourth
quarter of fiscal 2003.
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Company are as follows:
Name Age Position
---- --- --------
Howard B. Witt 63 Chairman, President and Chief Executive Officer
Gordon Hunter 52 Chief Operating Officer
Kenneth R. Audino 60 Vice President, Organizational Development
and Total Quality Management
Philip G. Franklin 52 Vice President, Operations Support and Chief
Financial Officer
Mary S. Muchoney 58 Secretary
Officers of Littelfuse are elected by the Board of Directors and serve at the
discretion of the Board.
Howard B. Witt was elected as the Chairman of the Board of the Company in May,
1993. He was promoted to President and Chief Executive Officer of the Company in
February, 1990. Prior to his appointment as President and Chief Executive
Officer, Mr. Witt served in several other key management positions since joining
the Company as Operations Manager in 1979. Mr. Witt serves as a Director of
Franklin Electric Co., Inc. and is a member of the Electronic Industries
Alliance Board of Directors. He also serves as a director of the Artisan Mutual
Fund.
Gordon Hunter, Chief Operating Officer, has the responsibility for global sales
and production. Mr. Hunter has been a member of the Board of Directors of the
Company since 2002, where he has served as Chairman of the Technology Committee.
Prior to joining Littelfuse, Mr. Hunter
11
was employed with Intel Corporation, where he was Vice President, Intel
Communications Group, and General Manager, Optical Products Group responsible
for managing the access and optical communications business segments. His
experience includes 20 years with Raychem Corporation in the United States and
Europe, with responsibilities in sales, marketing, engineering and general
management.
Kenneth R. Audino, Vice President, Organizational Development and Total Quality
Management, is responsible for the Company's overall quality, reliability and
environmental compliance, quality systems, human resources and training efforts.
Mr. Audino joined Littelfuse as a Control Technician in 1964. From 1964 to 1977,
he progressed through several quality and reliability positions to Manager of
Reliability and Standards. In 1983, he became Managing Director of the European
Headquarters and later was named Corporate Director of Quality Assurance and
Reliability. He was promoted to his current position in 1998.
Philip G. Franklin, Vice President, Operations Support and Chief Financial
Officer, has responsibility for the treasury, investor relations, accounting,
information systems and global supply chain functions of the Company. Mr.
Franklin joined the Company in 1998 from OmniQuip International, a $450 million
construction equipment manufacturer which he helped take public.
Mary S. Muchoney has served as Corporate Secretary since 1991, after joining
Littelfuse in 1977. She is responsible for providing all secretarial and
administrative functions for the President and Littelfuse Board of Directors.
Ms. Muchoney is a member of the American Society of Corporate Secretaries.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information set forth under "Quarterly Stock Prices" on page 40 of the
Annual Report to Stockholders is incorporated herein by reference. As of March
12, 2004, there were 186 holders of record of the Company's Common Stock and
approximately 5,000 beneficial holders of its Common Stock.
Shares of the Company's Common Stock are traded under the symbol "LFUS" on The
Nasdaq Stock Market.
The Company has not paid any cash dividends in its history. Future dividend
policy will be determined by the Board of Directors based upon their evaluation
of earnings, cash availability and general business prospects. Currently, there
are restrictions on the payment of dividends contained in the Company's credit
agreements which relate to the maintenance of a minimum net worth and certain
financial ratios.
12
ITEM 6. SELECTED FINANCIAL DATA
The information set forth under "Selected Financial Data - Five Year Summary" on
page 40 of the Annual Report to Stockholders is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information set forth under "Management's Discussion and Analysis of
Financial Condition and Results of Operations" on pages 13 through 20 of the
Annual Report to Stockholders is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
The information set forth under "Market Risk" on page 19 of the Annual Report to
Stockholders is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Report of Independent Auditors and the Consolidated Financial Statements and
notes thereto of the Company set forth on pages 20 through 39 of the Annual
Report to Stockholders are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
The Company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the Company's Exchange Act
reports is recorded, processed, summarized and reported within the time periods
specified in the Commission's rules and forms, and that such information is
accumulated and communicated to the Company's management, including the Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure.
As of the end of the period covered by this Annual Report on Form 10-K for
January 3, 2004, the Chief Executive Officer and Chief Financial Officer of the
Company evaluated the effectiveness of the disclosure controls and procedures of
the Company and concluded that these disclosure controls and procedures are
effective to ensure that material information relating to the Company and its
consolidated subsidiaries has been made known to them by the employees of the
Company and its consolidated subsidiaries during the period preceding the filing
of this Report. There were no significant changes in the Company's internal
controls during the period covered by this Report that could materially affect
these controls or could reasonably be expected to materially affect the
Company's internal control reporting, disclosures and procedures subsequent to
the last day they were evaluated by the Chief Executive Officer and Chief
Financial Officer of the Company.
13
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information set forth under "Election of Directors" and "Section 16(a)
Beneficial Ownership Reporting Compliance" in the Proxy Statement is
incorporated herein by reference. Please also refer to the information set forth
under "Executive Officers of the Registrant" in Part I of this Report.
ITEM 11. EXECUTIVE COMPENSATION
The information set forth under "Compensation of Executive Officers" in the
Proxy Statement is incorporated herein by reference, except for the sections
captioned "Reports of the Compensation Committee on Executive Compensation" and
"Company Performance."
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information set forth under "Ownership of Littelfuse, Inc. Common Stock" in
the Proxy Statement is incorporated herein by reference.
STOCK PLAN DISCLOSURE
The following table represents the Company's equity compensation plans,
including both stockholder approved plans and non-stockholder approved plans.
The section entitled "Compensation of Directors" in the Proxy Statement,
contains a summary explanation of the Stock Plan for New Directors of
Littelfuse, Inc., which has been adopted without the approval of stockholders
and is incorporated herein by reference.
Number of securities
Number of securities remaining available
to be issued upon Weighted-average for future issuance
exercise of exercise price of under equity
Plan Category outstanding options outstanding options compensation plans
------------- ------------------- ------------------- ------------------
Equity compensation plans
approved by security holders 2,036,720 $23.55 759,870
Equity compensation plans not
approved by security holders 10,000 $23.48 15,000
Total 2,046,720 $23.55 774,870
14
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information set forth under "Certain Relationships and Related Transactions"
in the Proxy Statement is incorporated herein by reference.
PART IV
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
THE INFORMATION SET FORTH UNDER "AUDIT AND NON-AUDIT FEES" IN THE PROXY
STATEMENT IS INCORPORATED HEREIN BY REFERENCE.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial Statements and Schedules
(1) Financial Statements. The following financial statements
included in the Annual Report to Stockholders are incorporated
herein by reference.
(i) Report of Independent Auditors (page 20).
(ii) Consolidated Balance Sheet as of January 3, 2004, and
December 28, 2002 (page 21).
(iii) Consolidated Statements of Income for the years ended
January 3, 2004, December 28, 2002 and December 29,
2001 (page 22).
(iv) Consolidated Statements of Cash Flows for the years
ended January 3, 2004, December 28, 2002 and December
29, 2001 (page 23).
(v) Consolidated Statements of Shareholders' Equity for
the years ended January 3, 2004, December 28, 2002,
and December 29, 2001 (page 24).
(vi) Notes to Consolidated Financial Statements (pages
25-39).
(2) Financial Statement Schedules. The following financial
statement schedule is submitted herewith for the periods
indicated therein.
(i) Schedule II-Valuation and Qualifying Accounts and
Reserves
All other schedules for which provision is made in the
applicable accounting regulation of the Securities and
Exchange Commission are not required under the related
instructions or are inapplicable and, therefore, have been
omitted.
15
(3) Exhibits
See Exhibit Index on pages 19-21.
(b) Reports on Form 8-K
A current report on Form 8-K (Items 7 and 9 pursuant to Item
12) filed on October 22, 2003.
16
LITTELFUSE, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(IN THOUSANDS)
Additions
Balance at Charged to Balance at
Beginning Costs and Deductions End of
Description Of Year Expenses (A) Year
----------- ------- -------- --- ----
Year ended January 3, 2004
Allowance for losses on
accounts receivable ................. $ 1,067 $ 50 $ 75 $ 1,042
======= ======= ======= =======
Reserves for sales discounts
and allowances ...................... $ 6,263 $ 165 $ $ 6,428
======= ======= ======= =======
Year ended December 28, 2002
Allowance for losses on
accounts receivable ................. $ 1,244 $ 373 $ 550 $ 1,067
======= ======= ======= =======
Reserves for sales discounts
and allowances ...................... $ 6,275 $ -- $ 12 $ 6,263
======= ======= ======= =======
Year ended December 29, 2001
Allowance for losses on
accounts receivable ................. $ 1,230 $ 332 $ 318 $ 1,244
======= ======= ======= =======
Reserves for sales discounts
and allowances ...................... $ 7,948 $ -- $ 1,673 $ 6,275
======= ======= ======= =======
(A) Write-off of uncollectible accounts, net of recoveries and foreign currency
translation.
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Littelfuse, Inc.
By /s/ Howard B. Witt
------------------
Howard B. Witt,
Chairman, President and
Chief Executive Officer
Date: March 18, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on March 18, 2004.
/s/ Howard B. Witt Chairman of the Board, President
- ------------------------------ and Chief Executive Officer
Howard B. Witt (Principal Executive Officer)
/s/ Gordon Hunter Chief Operating Officer, and
- ------------------------------ Director
Gordon Hunter
/s/ John P. Driscoll Director
- ------------------------------
John P. Driscoll
/s/ Anthony Grillo Director
- ------------------------------
Anthony Grillo
/s/ Bruce A. Karsh Director
- ------------------------------
Bruce A. Karsh
/s/ John E. Major Director
- ------------------------------
John E. Major
/s/ Ronald L. Schubel Director
- ------------------------------
Ronald L. Schubel
/s/ Philip G. Franklin Vice President, Operations Support
- ------------------------------ and Chief Financial Officer
Philip G. Franklin (Principal Financial Officer)
18
LITTELFUSE INC.
INDEX TO EXHIBITS
Number Description of Exhibit
- ------ ----------------------
2.1 Plan of Reorganization under Chapter 11 of the Bankruptcy Code of Old
Littelfuse (filed as exhibit 2.1 to the Company's Form 10 effective
September 16, 1992 (1934 Act File No. 0-20388) and incorporated
herein by reference).
3.1 Certificate of Incorporation, as amended to date (filed as 3.1 to the
Company's Form 10K for the fiscal year ended January 3, 1998 (1934
Act File No. 0-20388) and incorporated herein by reference).
3.1A Certificate of Designations of Series A Preferred Stock (filed as
Exhibit 4.2 to the Company's Current Report on Form 8-K dated
December 1, 1995 (1934 Act File No. 0-20388) and incorporated herein
by reference).
3.2 Bylaws, as amended to date (filed as exhibit 2.1 to the Company's
Form 10-Q for the quarterly period ended June 29, 2002 (1934 Act File
No. 0-20388) and incorporated herein by reference).
4.1 Bank credit agreement among Littelfuse, Inc., as borrower, the
lenders named therein and the Bank of America N.A., as agent, dated
as of August 26, 2003 (filed as exhibit 4.1 to the Company's Form
10-Q for the quarterly period ended September 27, 2003 (1934 Act File
No. 0-20388) and incorporated herein by reference).
4.3 Stock Plan for Employees and Directors of Littelfuse, Inc., as
amended (filed as exhibit 4.3 to the Company's Form 10-Q for the
quarterly period ended March 30, 2002 (1934 Act File No. 0-20388) and
incorporated herein by reference).
4.4 Littelfuse, Inc. Retirement Plan dated January 1, 1992, as amended
and restated (filed as exhibit 4.4 to the Company's Form 10-K for the
fiscal year ended December 29, 2001 (1934 Act File No. 0-20388) and
incorporated herein by reference).
4.5 First Amendment to the Littelfuse, Inc. Retirement Plan (filed as
exhibit 4.5 to the Company's Form 10-K for the fiscal year ended
December 28, 2002 (1934 Act File No. 0-20388) and incorporated
herein by reference).
4.6 Littelfuse, Inc. 401(k) Savings Plan (filed as exhibit 4.8 to the
Company's Form 10-K for the fiscal year ended December 31, 1992 (1934
Act File No. 0-20388) and incorporated herein by reference).
19
Number Description of Exhibit
- ------ ----------------------
4.7 Littelfuse Rights Plan Agreement, dated as of December 15, 1995,
between Littelfuse, Inc. and LaSalle National Bank, as Rights Agent,
together with Exhibits thereto, as amended (filed as exhibit 4.10 to
the Company's Form 10-Q for the quarterly period ended October 3,
1998 (1934 Act File No. 0-20388) and incorporated herein by
reference).
4.8 Note Purchase Agreement dated as of September 1, 1998, relating to
$60,000,000 principal amount of Littelfuse, Inc. 6.16% Senior Notes
due September 1, 2005. (filed as exhibit 4.11 to the Company's Form
10-K for the fiscal year ended January 2, 1999 (1934 Act File No.
0-20388) and incorporated herein by reference).
10.1 Employment Agreement dated as of August 8, 2003, between Littelfuse,
Inc. and Howard B. Witt (filed as exhibit 10.1 to the Company's Form
10-Q for the quarterly period ended September 27, 2003 (1934 Act File
No. 0-20388) and incorporated herein by reference).
10.2 Change of Control Employment Agreement dated as of August 8, 2003,
between Littelfuse, Inc. and Howard B. Witt (filed as exhibit 10.2 to
the Company's Form 10-Q for the quarterly period ended September 27,
2003 (1934 Act File No. 0-20388) and incorporated herein by
reference).
10.3 Patent License Agreement, dated as of July 28, 1995, between
Littelfuse, Inc. and Pacific Engineering Company, Ltd.(filed as
exhibit 10.3 to the Company's Form 10-K for the fiscal year ended
December 28, 1996 (1934 Act File No. 0-20388) and incorporated herein
by reference).
10.4 MINI(R) and MAXI(TM) License Agreement, dated as of June 21, 1989,
between Littelfuse, Inc. and Cooper Industries, Inc. (filed as
exhibit 4.6 to the Company's Form 10 effective September 16, 1992
(1934 Act File No. 0-20388) and incorporated herein by reference).
10.5 Patent License Agreement, dated as of January 1, 1987, between
Littelfuse, Inc. and Cooper Industries, Inc. (filed as exhibit 4.6 to
the Company's Form 10 effective September 16, 1992 (1934 Act File No.
0-20388) and incorporated herein by reference).
10.6 1993 Stock Plan for Employees and Directors of Littelfuse, Inc., as
amended (filed as exhibit 10.1 to the Company's Form 10-Q for the
quarterly period ended June 29, 2002 (1934 Act File No. 0-20388) and
incorporated herein by reference).
10.7 Littelfuse, Inc. Supplemental Executive Retirement Plan (filed as
exhibit 10.10 to the Company's Form 10-K for the year ended December
31, 1993 (1934 Act File No. 0-20388) and incorporated herein by
reference).
10.8 Littelfuse Deferred Compensation Plan for Non-employee Directors, as
amended (filed as exhibit 10.8 to the Company's Form 10-K for the
fiscal year ended January 2, 1999 (1934 Act File No. 0-20388) and
incorporated herein by reference).
10.9 Littelfuse Executive Loan Program (filed as Exhibit 10.2 to the
Company's Form 10-Q for the quarterly period ended June 30, 1995
(1934 Act File No. 0-20388) and incorporated herein by reference).
20
Number Description of Exhibit
- ------ ----------------------
10.10 Change of Control Employment Agreement dated as of November 3, 2003,
between Littelfuse, Inc. and Gordon Hunter.
10.12 Form of change of Control Employment Agreement dated as of September
1, 2001, between Littelfuse, Inc. and Mr. Franklin and Ms. Muchoney
(filed as exhibit 10.12 to the Company's Form 10-Q for the quarterly
period ended September 29, 2001 (1934 Act File No. 0-20388) and
incorporated herein by reference).
10.13 Form of change of Control Employment Agreement dated as of September
1, 2001, between Littelfuse, Inc. and Mr. Kenneth Audino (filed as
exhibit 10.13 to the Company's Form 10-Q for the quarterly period
ended September 29, 2001 (1934 Act File No. 0-20388) and incorporated
herein by reference).
10.14 Stock Plan for New Directors of Littelfuse, Inc. (filed as exhibit
10.1 to the Company's Form 10-Q for the quarterly period ended
September 28, 2002 (1934 Act File No. 0-20388) and incorporated
herein by reference).
13.1 Portions of Littelfuse Annual Report to Stockholders for the fiscal
year ended January 3, 2004.
14.1 Code of Ethics for Principal Executive and Financial Officers
22.1 Subsidiaries.
23.1 Consent of Independent Auditors.
31.1 Certification of Howard B. Witt, Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2 Certification of Philip Franklin, Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, 18 U.S.C. Section 1350.
21