Attached files
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| 8-K - CURRENT REPORT - LITTELFUSE INC /DE | littelfuse_8k-021011.htm |
Exhibit 99.1
NEWS RELEASE
CONTACT: Phil Franklin,
Vice President, Operations Support, CFO and Treasurer (773) 628-0810
LITTELFUSE REPORTS FOURTH QUARTER AND FULL YEAR RESULTS
CHICAGO, February 10, 2011 – Littelfuse, Inc. (NASDAQ:LFUS) today reported sales and earnings for the fourth quarter and full year of 2010.
Fourth Quarter Highlights
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·
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Sales for the fourth quarter of 2010 were $142.6 million, a 11% increase compared to the fourth quarter of 2009. This was consistent with the most recent guidance of $138 to $145 million.
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o
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Electronics sales increased 13% year over year due to increased demand across all geographies and end markets with North America contributing the strongest growth at 23%.
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Automotive sales increased 6% year over year due to strong growth in Asia and continued rebound in Europe.
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Electrical sales increased 14% due to a 43% increase in protection relay sales. Power fuse sales declined 3% year over year due primarily to continued weakness in the non-residential construction market.
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The book-to-bill ratio for electronics for the fourth quarter of 2010 was 0.93.
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On a GAAP basis, diluted earnings per share for the fourth quarter of 2010 increased to $0.88 from $0.53 in the fourth quarter of 2009 due primarily to higher sales and an improved cost structure. Diluted earnings per share were above the most recent guidance of $0.75 to $0.85 due primarily to a lower-than-expected tax rate resulting from more income earned in low-tax jurisdictions and favorable reserve adjustments.
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Adjusted earnings per share were $0.82 (see Supplemental Schedule on page 9). Adjustments to GAAP earnings were to normalize the tax rate and to remove $0.8 million of one-time charges related to legacy operations and acquisition expenses.
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Cash provided by operating activities was $29.1 million for the fourth quarter of 2010 compared to $28.9 million for the fourth quarter of 2009. Cash flow for the fourth quarter of 2010 was reduced by a $10.1 million cash payment to fully fund a legacy German pension plan.
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Page 2
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The company repurchased 73,637 shares of its common stock in the fourth quarter at an average price of $41.98. For the year, the company repurchased 643,777 shares at an average price of $39.42.
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On December 17, 2010, Littelfuse acquired the Cole Hersee Company for $50.0 million in cash. Cole Hersee had approximately $43 million in revenue for 2010. The impact of Cole Hersee on the company’s fourth quarter financial results was immaterial.
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Full Year Highlights
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Sales for 2010 were $608.0 million, a 41% increase compared to sales of $430.1 million in 2009, reflecting strong growth in all market segments and all geographies. The main factors driving this growth were the global economic recovery, distributor re-stocking and effective execution of the company’s strategic growth plans.
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Diluted earnings per share for 2010 improved to $3.52 compared to $0.43 for 2009 as a result of strong sales growth, a much-improved cost structure and lower restructuring charges in the current year.
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Cash provided by operating activities was $104.0 million for 2010 compared to $29.6 million in 2009. The primary driver of this higher cash flow was earnings improvement.
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Capital expenditures were $22.4 million in 2010 compared to $15.5 million in 2009. There were $5.0 million of proceeds from asset sales in 2010 versus $1.6 million in 2009.
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“2010 was by all measures an extraordinary year for Littelfuse,” said Gordon Hunter, Chief Executive Officer. “We set records for sales and cash flow, and earnings were more than double our previous high. This performance was the culmination of many years of hard work in which we transformed our cost structure and positioned the company for what we believe will be stronger growth and higher margins for the foreseeable future.”
“The fourth quarter financial performance was consistent with our guidance and demonstrates that even in a quarter where sales declined 13% sequentially, we can generate margins and earnings that are well above our historical highs,” said Phil Franklin, Chief Financial Officer.
Outlook
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Sales for the first quarter of 2011 (including Cole Hersee) are expected to be in the range of $156 to $165 million, which represents 8% to 14% growth over the first quarter of 2010. Cole Hersee is expected to contribute $11 to $13 million of sales in the first quarter of 2011.
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Earnings for the first quarter of 2011 (including Cole Hersee) are expected to be in the range of $0.83 to $0.97 per diluted share assuming a tax rate of 29%. Cole Hersee is expected to be approximately $0.02 accretive to earnings in the first quarter of 2011.
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Sales for the full year 2011 are expected to be in the range of $670 to $690 million. This represents 10% to 13% growth over 2010.
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Earnings for the full year 2011 are expected to be in the range of $3.75 to $4.05 per diluted share. The tax rate for 2011 is expected to be in the range of 28% to 30%.
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Capital spending for 2011 is expected to be in the range of $29 to $32 million.
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“The build-up of inventory in the channel that contributed to our more-than-seasonal slowdown in the fourth quarter seems to have mostly corrected itself,” said Hunter. “Order rates began improving in the early weeks of 2011, and electronics book-to-bill was at 1.10 for the month of January.”
“Early indications from Cole Hersee are positive. In addition, we are gaining confidence in our ability to achieve our 5% organic growth target this year,” added Hunter. “Despite headwinds from commodity prices, we believe that we can sustain our recent margin improvements and grow earnings at least in line with sales in 2011.”
Dividend
The company will pay a cash dividend of $0.15 per common share on March 7, 2011 to shareholders of record at the close of business on February 21, 2011.
Conference Call Webcast Information
Littelfuse will host a conference call today, Thursday, February 10, 2011 at 11:00 a.m. Eastern/10:00 a.m. Central time to discuss the fourth 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 March 31, 2011 and can be accessed through the Web site listed above.
About Littelfuse
Littelfuse is the worldwide leader in circuit protection, offering the industry’s broadest and deepest portfolio of circuit protection products and solutions. Backed by industry-leading technical support, design and manufacturing expertise, Littelfuse products are vital components in virtually every product that uses electrical energy, including portable and consumer electronics, automobiles, industrial equipment and telecom/datacom circuits. In addition to its Chicago, Illinois, world headquarters, Littelfuse has over 20 sales, distribution, manufacturing and engineering facilities in the Americas, Europe and Asia.
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Technologies offered by Littelfuse include Fuses; Gas Discharge Tubes (GDTs); Positive Temperature Coefficient Devices (PTCs); Protection Relays; PulseGuard® ESD Suppressors; SIDACtor® Devices; Silicon Protection Arrays(SPA™); Switching Thyristors; TVS Diodes and Varistors.
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/A for the year ended January 2, 2010. 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/A for the year ended January 2, 2010.
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LITTELFUSE, INC.
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Net Sales by Business Unit and Geography
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(In millions of USD, unaudited)
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Fourth Quarter
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Year-to-Date
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2010
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2009
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% Change
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2010
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2009
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% Change
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Business Unit
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Electronics
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$ | 89.4 | $ | 79.2 | 13% | $ | 389.9 | $ | 263.0 | 48% | ||||||||||||
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Automotive
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31.8 | 30.0 | 6% | 130.3 | 98.5 | 32% | ||||||||||||||||
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Electrical
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21.4 | 18.8 | 14% | 87.8 | 68.6 | 28% | ||||||||||||||||
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Total
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$ | 142.6 | $ | 127.9 | 11% | $ | 608.0 | $ | 430.1 | 41% | ||||||||||||
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Fourth Quarter
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Year-to-Date
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| 2010 | 2009 |
% Change
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2010 | 2009 |
% Change
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Geography
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Americas
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$ | 54.8 | $ | 49.2 | 11% | $ | 227.7 | $ | 166.1 | 37% | ||||||||||||
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Europe
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26.9 | 24.3 | 11% | 115.1 | 83.4 | 38% | ||||||||||||||||
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Asia-Pacific
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60.9 | 54.5 | 12% | 265.2 | 180.6 | 47% | ||||||||||||||||
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Total
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$ | 142.6 | $ | 127.9 | 11% | $ | 608.0 | $ | 430.1 | 41% | ||||||||||||
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LITTELFUSE, INC.
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Condensed Consolidated Balance Sheets
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(In thousands of USD)
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January 1, 2011
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January 2, 2010
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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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$ | 109,720 | $ | 70,354 | ||||
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Accounts receivable, less allowances
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97,753 | 79,521 | ||||||
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Inventories
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80,182 | 52,567 | ||||||
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Deferred income taxes
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10,588 | 13,804 | ||||||
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Prepaid expenses and other current assets
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13,882 | 18,196 | ||||||
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Assets held for sale
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6,831 | 9,573 | ||||||
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Total current assets
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318,956 | 244,015 | ||||||
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Property, plant and equipment:
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Land
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5,688 | 7,028 | ||||||
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Buildings
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53,089 | 55,466 | ||||||
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Equipment
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276,371 | 280,928 | ||||||
| 335,148 | 343,422 | |||||||
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Accumulated depreciation
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(205,001 | ) | (207,500 | ) | ||||
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Net property, plant and equipment
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130,147 | 135,922 | ||||||
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Intangible assets, net of amortization:
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Patents, licenses and software
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11,211 | 12,451 | ||||||
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Distribution network
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9,752 | 10,837 | ||||||
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Customer lists, trademarks and tradenames
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20,865 | 13,363 | ||||||
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Goodwill
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112,687 | 94,986 | ||||||
| 154,515 | 131,637 | |||||||
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Investments
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11,660 | 11,742 | ||||||
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Deferred income taxes
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3,271 | 8,460 | ||||||
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Other assets
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2,580 | 1,351 | ||||||
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Total assets
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$ | 621,129 | $ | 533,127 | ||||
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LIABILITIES AND EQUITY
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Current liabilities:
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Accounts payable
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$ | 24,079 | $ | 23,646 | ||||
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Accrued payroll
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24,186 | 13,291 | ||||||
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Accrued expenses
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10,307 | 8,561 | ||||||
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Accrued severance
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3,279 | 11,418 | ||||||
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Accrued income taxes
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14,997 | 4,525 | ||||||
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Current portion of long-term debt
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33,000 | 14,183 | ||||||
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Total current liabilities
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109,848 | 75,624 | ||||||
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Long-term debt, less current portion
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41,000 | 49,000 | ||||||
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Accrued severance
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486 | 421 | ||||||
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Accrued post-retirement benefits
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5,564 | 18,271 | ||||||
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Other long-term liabilities
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11,571 | 11,212 | ||||||
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Total equity
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452,660 | 378,599 | ||||||
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Total liabilities and equity
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$ | 621,129 | $ | 533,127 | ||||
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Common shares issued and outstanding of
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21,752,536 and 21,792,241, at January 1, 2011,
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and January 2, 2010, respectively.
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LITTELFUSE, INC.
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Consolidated Statements of Income
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(In thousands of USD, except per share data, unaudited)
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For the Three Months Ended
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For the Twelve Months Ended
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Jan. 1, 2011
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Jan. 2, 2010*
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Jan. 1, 2011
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Jan. 2, 2010*
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Net sales
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$ | 142,646 | $ | 127,928 | $ | 608,021 | $ | 430,147 | ||||||||
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Cost of sales
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88,690 | 82,871 | 374,149 | 304,786 | ||||||||||||
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Gross profit
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53,956 | 45,057 | 233,872 | 125,361 | ||||||||||||
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Selling, general and administrative expenses
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23,463 | 22,044 | 103,671 | 88,506 | ||||||||||||
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Research and development expenses
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4,904 | 4,379 | 17,602 | 18,134 | ||||||||||||
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Amortization of intangibles
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1,273 | 1,394 | 5,025 | 5,026 | ||||||||||||
| 29,640 | 27,817 | 126,298 | 111,666 | |||||||||||||
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Operating income
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24,316 | 17,240 | 107,574 | 13,695 | ||||||||||||
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Interest expense
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341 | 533 | 1,437 | 2,377 | ||||||||||||
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Other (income) expense, net
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(214 | ) | 949 | (1,542 | ) | 481 | ||||||||||
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Income before income taxes
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24,189 | 15,758 | 107,679 | 10,837 | ||||||||||||
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Income taxes
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4,611 | 4,037 | 29,016 | 1,426 | ||||||||||||
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Net income
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$ | 19,578 | $ | 11,721 | $ | 78,663 | $ | 9,411 | ||||||||
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Income per share:
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Basic
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$ | 0.89 | $ | 0.54 | $ | 3.58 | $ | 0.43 | ||||||||
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Diluted
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$ | 0.88 | $ | 0.53 | $ | 3.52 | $ | 0.43 | ||||||||
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Weighted average shares and equivalent shares outstanding:
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Basic
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21,664 | 21,772 | 21,875 | 21,743 | ||||||||||||
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Diluted
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22,094 | 21,982 | 22,214 | 21,812 | ||||||||||||
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Diluted Income Per Share
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Net income as reported
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$ | 19,578 | $ | 11,721 | $ | 78,663 | $ | 9,411 | ||||||||
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Less: income allocated to participating securities
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(219 | ) | (96 | ) | (408 | ) | (78 | ) | ||||||||
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Net income available to common shareholders
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$ | 19,359 | $ | 11,625 | $ | 78,255 | $ | 9,333 | ||||||||
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Weighted average shares adjusted for dilutive securities
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22,094 | 21,982 | 22,214 | 21,812 | ||||||||||||
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Diluted income per share
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$ | 0.88 | $ | 0.53 | $ | 3.52 | $ | 0.43 | ||||||||
*2009 had 53 and 14 weeks for the fiscal year and quarter, respectively as compared to 52 and 13 weeks for the 2010 fiscal year and quarter.
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LITTELFUSE, INC.
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Consolidated Statements of Cash Flows
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(In thousands of USD, unaudited)
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For the Twelve Months Ended
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Jan. 1, 2011
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Jan. 2 2010
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OPERATING ACTIVITIES:
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Net income
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$ | 78,663 | $ | 9,411 | ||||
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Adjustments to reconcile net income to net cash provided by operating activities:
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Depreciation
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26,980 | 31,596 | ||||||
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Amortization of intangibles
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5,025 | 5,026 | ||||||
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Provision for bad debts
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353 | 319 | ||||||
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Impairment of assets
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2,988 | 829 | ||||||
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Stock-based compensation
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5,243 | 5,503 | ||||||
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Excess tax benefit on stock-based compensation
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(1,617 | ) | (15 | ) | ||||
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Deferred income taxes
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7,784 | (2,905 | ) | |||||
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(Gain) loss on sale of property, plant and equipment
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(615 | ) | 703 | |||||
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Changes in operating assets and liabilities:
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Accounts receivable
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(12,804 | ) | (15,569 | ) | ||||
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Inventories
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(15,147 | ) | 15,549 | |||||
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Accounts payable
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(1,800 | ) | 4,360 | |||||
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Accrued expenses (including post-retirement)
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(13,645 | ) | (12,294 | ) | ||||
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Accrued payroll and severance
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2,384 | (9,018 | ) | |||||
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Accrued taxes
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14,878 | (3,322 | ) | |||||
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Prepaid expenses and other
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5,399 | (562 | ) | |||||
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Net cash provided by operating activities
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104,069 | 29,611 | ||||||
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INVESTING ACTIVITIES:
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Purchases of property, plant and equipment
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(22,433 | ) | (15,536 | ) | ||||
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Purchase of business, net of cash acquired
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(48,292 | ) | (920 | ) | ||||
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Proceeds from sale of investments
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- | 133 | ||||||
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Proceeds from sale of assets
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4,997 | 1,558 | ||||||
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Net cash used in investing activities
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(65,728 | ) | (14,765 | ) | ||||
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FINANCING ACTIVITIES:
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Proceeds from debt
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39,345 | 32,374 | ||||||
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Payments of debt
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(28,624 | ) | (50,076 | ) | ||||
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Purchases of common stock
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(25,377 | ) | - | |||||
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Cash dividends paid
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(3,248 | ) | - | |||||
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Proceeds from exercise of stock options
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18,496 | 1,505 | ||||||
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Excess tax benefit on stock-based compensation
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1,617 | 15 | ||||||
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Net cash provided by (used in) financing activities
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2,209 | (16,182 | ) | |||||
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Effect of exchange rate changes on cash and cash equivalents
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(1,184 | ) | 753 | |||||
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Increase (decrease) in cash and cash equivalents
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39,366 | (583 | ) | |||||
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Cash and cash equivalents at beginning of period
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70,354 | 70,937 | ||||||
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Cash and cash equivalents at end of period
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$ | 109,720 | $ | 70,354 | ||||
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LITTELFUSE, INC.
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Supplemental Information
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(In thousands of USD, except per share data, unaudited)
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For the Three Months Ended
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January 1, 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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$ | 142,646 | $ | - | $ | 142,646 | ||||||
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Cost of sales
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88,690 | (300 | ) | (1) | 88,390 | |||||||
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Gross profit
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53,956 | 300 | 54,256 | |||||||||
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% of sales
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37.8 | % | 38.0 | % | ||||||||
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Total operating expenses
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29,640 | (548 | ) | (2) | 29,092 | |||||||
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% of sales
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20.8 | % | 20.4 | % | ||||||||
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Operating income
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24,316 | 848 | 25,164 | |||||||||
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% of sales
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17.0 | % | 17.6 | % | ||||||||
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Interest/other expense (income), net
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127 | - | 127 | |||||||||
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Income before income taxes
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24,189 | 848 | 25,037 | |||||||||
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Income tax expense
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4,611 | 2,124 | (3) | 6,735 | ||||||||
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Effective tax rate
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19.1 | % | 26.9 | % | ||||||||
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Net income as reported
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19,578 | (1,276 | ) | 18,302 | ||||||||
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Less: Income allocated to participating securties
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(219 | ) | 17 | (202 | ) | |||||||
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Net Income available to common shareholders
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$ | 19,359 | $ | (1,259 | ) | $ | 18,100 | |||||
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Net income per diluted share:
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$ | 0.88 | $ | (0.06 | ) | $ | 0.82 | |||||
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Weighted average shares adjusted for dilutive securities:
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22,094 | 22,094 | 22,094 | |||||||||
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.
Special Items:
(1) Legal settlement related to legacy operations.
(2) Severance expense related to legacy operations, and acquisition costs.
(3) Tax expense adjusted to normalized run rate consistent with the 2010 full year rax rate.
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