LITTELFUSE INC /DE - FORM 8-K - EX-99.1 - EXHIBIT 99.1

Attached files

file	filename
8-K - FORM 8-K - LITTELFUSE INC /DE	lfus20151026_8k.htm

Exhibit 99.1

NEWS RELEASE

CONTACT: Phil Franklin,

Executive Vice President and CFO (773) 628-0810

LITTELFUSE REPORTS THIRD QUARTER RESULTS

CHICAGO, October 28, 2015 – Littelfuse, Inc. (NASDAQ:LFUS) today reported financial results for the third quarter ended September 26, 2015.

Third Quarter Highlights

●

Sales for the third quarter of 2015 were $215.5 million compared to $217.6 million for the prior-year quarter. Excluding currency effects, sales increased by 4% compared to the prior-year quarter due to continued growth in automotive and improvement in the electrical business.

●

GAAP earnings for the third quarter of 2015 were $0.50 per diluted share. This included a $30.2 million non-cash pension charge (pre-tax) related to settlement of the company’s U.S. pension plan and other special items (see Supplemental Financial Information on page 8). Excluding these special items, earnings for the third quarter of 2015 were $1.43 per diluted share. This was record performance driven largely by improvement in adjusted operating margin to 19.5%.

●

Sales trends by business unit for the third quarter were as follows:

Electronics sales declined 5% year over year (2% excluding currency effects) due to capacity constraints for sensor products as they are being transferred to the Philippines as well as a slightly weaker-than-normal seasonal ramp up for core products.

Automotive sales increased 1% year over year (8% excluding currency effects) reflecting strong constant-currency growth in Europe and moderate growth in both North America and Asia.

Electrical sales increased 8% year over year (12% excluding currency effects) due to solid growth in the core fuse business and continued recovery in custom products.

●

The electronics book-to-bill ratio for the third quarter of 2015 was 0.95.

●

Cash provided by operating activities for the third quarter of 2015 was $51.6 million ($60.7 million excluding a $9.1 million pension contribution) and now stands at $113.6 million through nine months of 2015 compared to $103.8 million through nine months of 2014. Capital expenditures through nine months of 2015 were $35.0 million compared to $19.4 million through nine months of 2014.

-more-

Page 2

The increased capital spending is primarily related to the manufacturing transfer to the Philippines and capacity additions for new automotive products.

●

The company repurchased 350,000 shares during the third quarter of 2015 at an average price of $89.29 for a total of $31.3 million. There are 650,000 shares remaining on the current repurchase authorization.

●

On September 30, the company closed on the acquisition of Sigmar, an Italian company that produces sensors used in gas and diesel engine fuel systems, as well as urea level and quality sensors used in diesel emission reduction systems. Annual revenue is approximately $6 million.

●

In the third quarter, the company entered into an agreement with an insurance company to purchase an annuity contract to settle its U.S. pension liability and transfer payment responsibility. Related to this transaction, the company contributed $9.1 million of cash to the plan and took a non-cash charge of $30.2 million to recognize unamortized losses on the balance sheet.

“Our teams continue to execute well in a generally challenging global economic environment,” said Gordon Hunter, chief executive officer. “Our electrical business is recovering on both the top and bottom lines; automotive is beginning to make progress on its margin improvement initiatives and electronics profitability continues to be strong. Manufacturing performed well across the board, with improvements at our Piedras Negras, Mexico site particularly notable.”

Outlook

“Economic signals continue to be mixed and visibility continues to be limited,” said Hunter. “Although our 0.95 book-to-bill for electronics is better than normal for the third quarter, order rates in the first few weeks of the fourth quarter have been relatively weak. At this point, we expect normal sequential declines in both sales and margins in the fourth quarter.”

●

The fourth quarter of 2015 includes an extra week (14 weeks rather than 13). Taking into account that the extra week is during the holidays, it is expected to add approximately $10 million to sales for the fourth quarter. Including this extra week, sales for the fourth quarter of 2015 are expected to be in the range of $212 to $222 million.

●

Earnings for the fourth quarter of 2015 are expected to be in the range of $1.12 to $1.24 per diluted share assuming a tax rate of 24% and excluding any special items. This includes the estimated impact of $0.02 per diluted share for the extra week.

-more-

Page 3

Dividend

The company will pay a cash dividend of $0.29 per common share on December 3, 2015 to shareholders of record at the close of business on November 19, 2015.

Conference Call and Webcast Information

Littelfuse will host a conference call today, Wednesday, October 28, 2015, at 10:00 a.m. Central / 11:00 a.m. Eastern time to discuss the third quarter results. The call will be broadcast live over the Internet and can be accessed through the company’s website: www.littelfuse.com. Listeners should go to the website at least 15 minutes prior to the call to download and install any necessary audio software. The call will be available for replay through December 31, 2015 on the company’s website.

About Littelfuse

Founded in 1927, Littelfuse is the world leader in circuit protection with growing global platforms in power

control and sensing. The company serves customers in the electronics, automotive and industrial markets

with technologies including fuses, semiconductors, polymers, ceramics, relays and sensors. Littelfuse has over 8,000 employees in more than 35 locations throughout the Americas, Europe and Asia. For more information, please visit the Littelfuse website: littelfuse.com.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995.

The statements in this press release that are not historical facts are intended to constitute “forward-looking statements” entitled to the safe-harbor provisions of the PSLRA. These statements may involve risks and uncertainties, including, but not limited to, risks relating to product demand and market acceptance, economic conditions, the impact of competitive products and pricing, product quality problems or product recalls, capacity and supply difficulties or constraints, coal mining exposures reserves, failure of an indemnification for environmental liability, exchange rate fluctuations, commodity price fluctuations, the effect of 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 December 27, 2014. For a further discussion of the risk factors of the company, please see Item 1A. “Risk Factors” to the company’s Annual Report on Form 10-K for the year ended December 27, 2014.

# # #

Page 4

LITTELFUSE, INC.

Net Sales and Operating Income by Business Unit

(In thousands of USD, unaudited)

	Third Quarter							Year-to-Date
	2015		2014		% Change			2015		2014		% Change

Net Sales
Electronics	$	102,616	$	107,754		(5	%)	$	307,549	$	313,726		(2	%)
Automotive		81,475		80,639		1	%		251,464		245,083		3	%
Electrical		31,419		29,215		8	%		88,831		86,566		3	%

Total net sales	$	215,510	$	217,608		(1	%)	$	647,844	$	645,375		0	%

	Third Quarter									Year-to-Date
	2015			2014			% Change			2015			2014			% Change

Operating Income/(Expense)
Electronics	$	20,923		$	25,800			(19	%)	$	61,755		$	70,805			(13	%)
Automotive		15,253			12,227			25	%		39,123			35,158			11	%
Electrical		5,781			3,224			79	%		13,220			7,541			75	%
Other⁽¹⁾		(33,373	)		(1,121	)		2877	%		(39,795	)		(6,065	)		556	%

Total operating income	$	8,584		$	40,130			(79	%)	$	74,303		$	107,439			(31	%)

Interest expense		922			1,292						3,021			3,736
Foreign exchange (gain) loss		(3,549	)		(101	)					(1,724	)		2,022
Other (income) expense, net		(1,430	)		(2,261	)					(3,758	)		(4,893	)

Income before taxes	$	12,641		$	41,200			(69%	)	$	76,764		$	106,574			(28	%)

(1) "Other" typically includes special items such as acquisition-related costs, restructuring costs, asset impairments, and gains and losses on asset sales. (See Supplemental Financial Information for details on page 8.)

-more-

Page 5

LITTELFUSE, INC.

Condensed Consolidated Balance Sheets

(In thousands of USD, except share amounts)

	September 26, 2015			December 27, 2014
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	336,640		$	297,571
Short-term investments		3,958			4,302
Accounts receivable, less allowances		145,655			135,356
Inventories		99,203			97,391
Deferred income taxes		14,139			17,481
Prepaid expenses and other current assets		14,179			13,904
Assets held for sale		-			5,500
Total current assets		613,774			571,505
Property, plant and equipment:
Land		5,292			5,697
Buildings		69,420			64,609
Equipment		378,716			370,179
		453,428			440,485
Accumulated depreciation		(290,663	)		(281,845	)
Net property, plant and equipment		162,765			158,640
Intangible assets, net of amortization:
Patents, licenses and software		20,180			23,640
Distribution network		17,175			19,428
Customer lists, trademarks and tradenames		55,366			60,605
Goodwill		190,016			196,256
		282,737			299,929
Investments		11,196			12,056
Deferred income taxes		5,189			5,393
Other assets		16,216			23,303
Total assets	$	1,091,877		$	1,070,826

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	53,308		$	50,793
Accrued payroll		31,281			30,511
Accrued expenses		20,641			13,059
Accrued severance		2,619			790
Accrued income taxes		6,738			9,045
Current portion of accrued post-retirement benefits		-			11,768
Current portion of long-term debt		117,500			88,500
Total current liabilities		232,087			204,466
Long-term debt, less current portion		91,517			106,658
Deferred income taxes		18,565			11,076
Accrued post-retirement benefits		5,025			5,147
Other long-term liabilities		10,943			15,814
Total equity		733,740			727,665
Total liabilities and equity	$	1,091,877		$	1,070,826

Common shares issued and outstanding of 22,379,901 and 22,585,529 at September 26, 2015 and December 27, 2014, respectively.

-more-

Page 6

LITTELFUSE, INC.

Consolidated Statements of Comprehensive Income

(In thousands of USD, except per share data, unaudited)

	For the Three Months Ended						For the Nine Months Ended

	September 26, 2015			September 27, 2014			September 26, 2015			September 27, 2014

Net sales	$	215,510		$	217,608		$	647,844		$	645,375

Cost of sales		129,328			130,228			400,051			396,506

Gross profit		86,182			87,380			247,793			248,869


Selling, general and administrative expenses		37,002			36,647			112,119			109,146
Research and development expenses		7,479			7,449			22,224			22,833
Pension settlement expense		30,194			-			30,194			-
Amortization of intangibles		2,923			3,154			8,953			9,451
		77,598			47,250			173,490			141,430

Operating income		8,584			40,130			74,303			107,439

Interest expense		922			1,292			3,021			3,736
Foreign exchange (gain) loss		(3,549	)		(101	)		(1,724	)		2,022
Other (income) expense, net		(1,430	)		(2,261	)		(3,758	)		(4,893	)

Income before income taxes		12,641			41,200			76,764			106,574
Income taxes		1,317			11,260			16,761			26,667

Net income	$	11,324		$	29,940		$	60,003		$	79,907

Net income per share:
Basic	$	0.50		$	1.33		$	2.65		$	3.55
Diluted	$	0.50		$	1.32		$	2.64		$	3.52

Weighted average shares and equivalent shares outstanding:
Basic		22,581			22,536			22,623			22,536
Diluted		22,693			22,689			22,771			22,722

Comprehensive income	$	2,187		$	13,209		$	45,896		$	66,444

-more-

Page 7

LITTELFUSE, INC.

Consolidated Statements of Cash Flows

(In thousands of USD, unaudited)

	For the Nine Months Ended
	September 26, 2015			September 27, 2014

OPERATING ACTIVITIES:
Net income	$	60,003		$	79,907
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		22,154			21,736
Amortization of intangibles		8,952			9,451
Non-cash inventory charge⁽¹⁾		-			2,769
Stock-based compensation		7,997			7,168
Excess tax benefit on stock-based compensation		(1,500	)		(2,477	)
Net loss on pension settlement, net of tax		19,472			-
Loss on sale of assets		308			673
Changes in operating assets and liabilities:
Accounts receivable		(18,274	)		(9,728	)
Inventories		(4,203	)		(4,118	)
Accounts payable		4,216			3,024
Accrued expenses (including post retirement)		6,577			(7,080	)
Accrued payroll and severance		3,598			(1,198	)
Accrued taxes		4,006			5,756
Prepaid expenses and other		277			(2,052	)
Net cash provided by operating activities		113,583			103,831

INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(35,016	)		(19,422	)
Acquisition of business, net of cash acquired		-			(52,768	)
Proceeds from maturities of short-term investments		-			6,770
Decrease in entrusted loan receivable		5,930			-
Proceeds from sale of assets		38			72
Net cash used in investing activities		(29,048	)		(65,348	)

FINANCING ACTIVITIES:
Proceeds of revolving credit facility		49,000			97,500
Payments of revolving credit facility		(25,000	)		(37,000	)
Payments of term loan		(3,750	)		(3,750	)
Payments of entrusted loan		(5,930	)		-
Debt issuance costs paid		(42	)		(108	)
Cash dividends paid		(17,864	)		(15,543	)
Purchases of common stock		(31,252	)		(14,283	)
Proceeds from exercise of stock options		6,186			12,170
Excess tax benefit on share-based compensation		1,500			2,477
Net cash (used in) provided by financing activities		(27,152	)		41,463

Effect of exchange rate changes on cash and cash equivalents		(18,314	)		(6,862	)

Increase in cash and cash equivalents		39,069			73,084
Cash and cash equivalents at beginning of period		297,571			305,192
Cash and cash equivalents at end of period	$	336,640		$	378,276

(1) Purchase accounting adjustment related to acquisitions.

-more-

Page 8

LITTELFUSE, INC.

Supplemental Financial Information

(in millions of USD except per share amounts)

GAAP EPS Reconciliation
	Q1-15			Q2-15			Q3-15			YTD-15			Q1-14			Q2-14		Q3-14			YTD-14
GAAP diluted EPS	$	0.88		$	1.26		$	0.50		$	2.64		$	1.12		$	1.08	$	1.32		$	3.52
EPS impact of special items (below)		0.20			0.07			0.93			1.20			0.04			0.18		0.03			0.25
Adjusted diluted EPS	$	1.08		$	1.33		$	1.43		$	3.84		$	1.16		$	1.26	$	1.35		$	3.77
Year-over-year adjusted EPS growth		(7	%)		6	%		6	%		2	%

Special Items (income)/expense

Reed switch manufacturing transfer costs	$	1.0		$	0.9		$	1.2		$	3.1		$	-		$	-	$	-		$	-
Restructuring		1.2			1.7			0.9			3.8			-			2.0		1.1			3.1
Acquisition expenses		0.2			0.2			0.3			0.7			-			0.2		-			0.2
U.S. Pension wind-up and settlement costs		0.7			0.7			30.8			32.2			-			-		-			-
Purchase accounting adjustment		-			-			-			-			1.4			1.4		-			2.8
Other		-			-			0.1			0.1			-			-		-			-
Adjustment to Operating income		3.0			3.4			33.4			39.8			1.4			3.5		1.1			6.1
Foreign exchange loss/(gain)		3.1			(1.3	)		(3.5	)		(1.7	)		(0.3	)		2.4		(0.1	)		2.0
Adjustment to pre-tax income	$	6.1		$	2.1		$	29.8		$	38.1		$	1.2		$	6.0	$	1.0		$	8.1

Total EPS impact	$	0.20		$	0.07		$	0.93		$	1.20		$	0.04		$	0.18	$	0.03		$	0.25

Operating margin / EBITDA reconciliation
	Q1-15			Q2-15			Q3-15			YTD-15			Q1-14			Q2-14			Q3-14			YTD-14

Net sales	$	210.3		$	222.0		$	215.5		$	647.8		$	206.9		$	220.9		$	217.6		$	645.4

GAAP operating income	$	29.5		$	36.2		$	8.6		$	74.3		$	33.6		$	33.7		$	40.1		$	107.4
GAAP operating margin		14.0	%		16.3	%		4.0	%		11.5	%		16.2	%		15.3	%		18.4	%		16.6	%

Add back special operating items		3.0			3.4			33.4			39.8			1.4			3.5			1.1			6.1
Adjusted operating income	$	32.5		$	39.6		$	42.0		$	114.1		$	35.0		$	37.2		$	41.3		$	113.5
Adjusted operating margin		15.5	%		17.8	%		19.5	%		17.6	%		16.9	%		16.8	%		19.0	%		17.6	%

Add back amortization		3.1			2.9			3.0			9.0			3.2			3.1			3.2			9.5
Add back depreciation		7.4			7.4			7.4			22.1			7.0			7.5			7.3			21.7
Adjusted EBITDA	$	43.0		$	49.9		$	52.4		$	145.2		$	45.2		$	47.8		$	51.8		$	144.6
Adjusted EBITDA margin		20.4	%		22.5	%		24.3	%		22.4	%		21.8	%		21.6	%		23.8	%		22.4	%
Year-over-year adjusted EBITDA growth		(5	%)		4	%		1	%		0	%

Note: Totals will not always foot due to rounding

###

Attached files

LITTELFUSE INC /DE Reports

Also read