-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A795ScROafoG3pbrl4rH2zHRl1mYt1pvCTppd00NHlMpYeV5+HB5jegyAYSMEZcN zZVLsgZqcABAPLAop3EMog== 0000950137-03-002386.txt : 20030424 0000950137-03-002386.hdr.sgml : 20030424 20030424172049 ACCESSION NUMBER: 0000950137-03-002386 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030421 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030424 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LITTELFUSE INC /DE CENTRAL INDEX KEY: 0000889331 STANDARD INDUSTRIAL CLASSIFICATION: SWITCHGEAR & SWITCHBOARD APPARATUS [3613] IRS NUMBER: 363795742 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-20388 FILM NUMBER: 03662954 BUSINESS ADDRESS: STREET 1: 800 E NORTHWEST HWY CITY: DES PLAINES STATE: IL ZIP: 60016 BUSINESS PHONE: 7088241188 MAIL ADDRESS: STREET 1: 800 E. NORTHWEST HWY CITY: DES PLAINES STATE: IL ZIP: 60016 8-K 1 c76362e8vk.txt CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20579 --------------------------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) - April 21, 2003 Littelfuse, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 0-20388 36-3795742 - ------------------- ------------------ ------------------- (State of other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 800 E. Northwest Hwy., Des Plaines, IL 60016 - -------------------------------------- ------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (847) 824-1188 ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits 99.1 Press Release, dated April 21, 2003. 99.2 Script of the Chief Executive and Financial Officers' comments from the Registrant's First Quarter 2003 Earnings Conference Call ITEM 9. Disclosure of Results of Operations and Financial Condition (The information under this Item 9 is being furnished pursuant to Item 12 of Form 8-K). On Monday, April 21, 2003, the Registrant issued a press release disclosing financial results for the quarter ended March 29, 2003. The press release is made part of this Form and is attached as Exhibit 99.1. Also on Monday, April 21, 2003, the Registrant hosted a conference call to discuss the results for the quarter ended March 29, 2003. A script of the Chief Executive and Financial Officers' comments from the Registrant's first quarter 2003 earnings conference call is made part of this Form and is attached as Exhibit 99.2. The press release made a part of the Form includes forward looking statements that are intended to be covered by the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward looking statements include but are not limited to comments with respect to the objectives and strategies, financial condition, results of operations and business of the Registrant. These forward looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, and the risk that predictions and other forward looking statements will not be achieved. The Registrant cautions you not to place undue reliance on these forward looking statements as a number of important factors could cause actual future results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward looking statements. 1 SIGNATURE Pursuant to the requirements 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. Date: April 22, 2003 By: /s/ Philip G. Franklin -------------- ---------------------- Philip G. Franklin Vice President, Treasurer and Chief Financial Officer 2 Exhibit Index 99.1 Press Release, dated April 21, 2003. 99.2 Script of the Chief Executive and Financial Officers' comments from the Registrant's First Quarter 2003 Earnings Conference Call 3 EX-99.1 3 c76362exv99w1.txt PRESS RELEASE, DATED 4/21/03 EXHIBIT 99.1 [LITTELFUSE NEWS LETTERHEAD] CONTACT: PHIL FRANKLIN, VICE PRESIDENT, TREASURER & CFO (847) 391-0566 LITTELFUSE REPORTS FIRST QUARTER RESULTS DES PLAINES, ILLINOIS, APRIL 21, 2003 - Littelfuse, Inc. (NASDAQ/NMS:LFUS) today reported sales and earnings for the first quarter of 2003. Sales for the first quarter of 2003 were $70.0 million, a 7% increase from sales of $65.1 million in the first quarter of 2002. Diluted earnings per share were $0.15 in the first quarter of 2003 compared to $0.08 in the first quarter of 2002 before restructuring charges. "Sales increased in the first quarter due to higher electronic sales in Asia, the addition of Semitron (acquired in July 2002) and the effects of a weaker dollar," said Howard B. Witt, Chairman, President and Chief Executive Officer. Compared to the first quarter of 2002, sales increased in each geographic region with Asia up 18%, Europe up 9% and the Americas up 1%. Sales were also higher across all market segments as sales of electronic products increased 12%, automotive sales increased 2% and electrical sales increased 6%. Excluding Semitron and currency effects, electronic sales increased 1%, automotive sales decreased 4% and electrical sales increased 6%. "We continue to see gradual improvement in gross margin as we execute on our worldwide manufacturing rationalization program," said Phil Franklin, Vice President, Treasurer and Chief Financial Officer. "The 33.0% gross margin for the quarter was the best we have achieved since the second quarter of 2001," added Franklin. Littelfuse will host a conference call today, April 21, 2003, at 11:00 a.m. Eastern/10:00 a.m. Central time to discuss the first quarter results. The call will be broadcast live over the Internet and can be accessed through the company's Web site: www.littelfuse.com. Listeners should go to the Web site at least 15 minutes prior to the call to download and install any -more- Page 2 necessary audio software. The call will be available for replay through April 28, 2003, and can be accessed through the Web site listed above. Littelfuse is a global company offering the broadest line of circuit protection products in the industry. In addition to its Des Plaines world headquarters, Littelfuse has manufacturing facilities in England, Ireland, Switzerland, Mexico, China and the Philippines, as well as in Centralia, Des Plaines and Arcola, Illinois. It also has sales, engineering and distribution facilities in the Netherlands, Singapore, Hong Kong, Taiwan, Japan, Korea and Brazil. For more information, please visit Littelfuse's web site at www.littelfuse.com. - -------------------------------------------------------------------------------- "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995. Any forward looking statements contained herein involve risks and uncertainties, including, but not limited to, product demand and market acceptance risks, the effect of economic conditions, the impact of competitive products and pricing, product development and patent protection, commercialization and technological difficulties, capacity and supply constraints or difficulties, exchange rate fluctuations, actual purchases under agreements, the effect of the company's accounting policies, labor disputes, restructuring costs in excess of expectations and other risks which may be detailed in the company's Securities and Exchange Commission filings. - -------------------------------------------------------------------------------- -more- LITTELFUSE, INC. SALES BY MARKET AND GEOGRAPHY (Dollars in millions)
FIRST QUARTER ---------------------------------------- 2003 2002 % CHANGE -------- -------- --------- MARKET - ------ Electronics $ 37.2 $ 33.2 12% Automotive 24.6 24.1 2% Electrical 8.2 7.8 6% -------- -------- --------- TOTAL $ 70.0 $ 65.1 7% ========= ======== =========
FIRST QUARTER ---------------------------------------- 2003 2002 % CHANGE -------- -------- --------- GEOGRAPHY - --------- Americas $ 34.7 $ 34.3 1% Europe 13.3 12.2 9% Asia Pacific 22.0 18.6 18% -------- -------- --------- TOTAL $ 70.0 $ 65.1 7% ======== ======== =========
-more- Page 4 LITTELFUSE, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) (unaudited)
For the Three Months Ended ----------------------------------------- MARCH 29, March 30, 2003 2002 -------------- ------------ Net sales....................................................... $ 69,962 65,130 Cost of sales................................................... 46,884 45,105 -------------- ------------ Gross profit.................................................... 23,078 20,025 Selling, general and administrative expenses.................... 15,721 14,909 Research and development expenses............................... 1,934 2,022 Amortization of intangibles..................................... 192 192 Restructuring expense........................................... - 3,744 -------------- ------------ Operating income (loss)......................................... 5,231 (842) Interest expense................................................ 537 716 Other (income)/expense.......................................... (342) (601) --------------- ------------- Income (loss) before income taxes............................... 5,036 (957) Income taxes (benefit).......................................... 1,813 (345) -------------- ------------- Net income (loss)............................................... $ 3,223 $ (612) ============== ============= Net income (loss) per share: Basic....................................................... $ 0.15 $ (0.03) ============== ============= Diluted..................................................... $ 0.15 $ (0.03) ============== ============= Net income per share before restructuring expense: Basic....................................................... $ 0.15 $ 0.08 ============== ============ Diluted..................................................... $ 0.15 $ 0.08 ============== ============ Weighted average shares and equivalent shares outstanding: Basic....................................................... 21,771 21,877 ============== ============ Diluted .................................................... 21,821 21,877 ============== ============
-more- Page 5 LITTELFUSE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, unaudited)
MARCH 29, 2003 December 28, 2002 -------------- ----------------- ASSETS: Cash and cash equivalents...................................... $ 25,514 $ 27,750 Short-term investments......................................... 10,403 8,806 Receivables.................................................... 43,021 40,810 Inventories.................................................... 47,057 44,533 Other current assets........................................... 17,569 15,146 -------------- ----------------- Total current assets........................................... $ 143,564 $ 137,045 Property, plant, and equipment, net............................ 77,550 81,122 Reorganization value, net...................................... 27,665 27,665 Other intangible assets, net................................... 28,078 28,291 Other assets................................................... 3,810 3,355 -------------- ----------------- $ 280,667 $ 277,478 ============== ================= LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities excluding current portion of long-term debt.......................................... $ 41,058 $ 41,308 Current portion of long-term debt.............................. 17,596 18,994 -------------- ----------------- Total current liabilities...................................... 58,654 60,302 Long-term debt................................................. 20,219 20,252 Deferred liabilities........................................... 1,747 1,713 Accrued post-retirement benefits............................... 9,722 9,027 Other long-term liabilities.................................... 491 473 Shareholders' equity........................................... 189,834 185,711 -------------- ----------------- Shares issued and outstanding at March 29, 2003: 21,781,065.............................. $ 280,667 $ 277,478 ============== =================
-more- Page 6 LITTELFUSE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, unaudited)
For the Three Months Ended ------------------------------------- MARCH 29, March 30, 2003 2002 -------------- ------------ Operating activities: Net income (loss).......................................................... $ 3,223 $ (612) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation ......................................................... 4,342 4,321 Amortization ......................................................... 192 192 Changes in operating assets and liabilities: Accounts receivable................................................... (2,335) (4,656) Inventories ......................................................... (2,497) 1,197 Accounts payable and accrued expenses................................. 553 2,805 Prepaid expenses and other............................................ (2,872) (887) -------------- ------------ Net cash provided by operating activities.................................. $ 606 $ 2,360 Cash used in investing activities: Purchases of property, plant, and equipment........................... (2,627) (1,805) Sale of property, plant and equipment................................. 2,213 - Purchase of marketable securities..................................... (1,597) - -------------- ------------ Net cash used in investing activities................................. (2,011) (1,805) Cash provided by (used in) financing activities: Proceeds from long-term debt.......................................... - - Payments of long-term debt............................................ (1,444) (1,604) Proceeds from exercise of stock options and warrants.................. 636 687 Purchase of common stock and warrants................................. - - -------------- ------------ Net cash used in financing activities................................. (808) (917) Effect of exchange rate changes on cash.................................... (23) (68) -------------- ------------ Decrease in cash and cash equivalents...................................... (2,236) (430) Cash and cash equivalents at beginning of period........................... 27,750 34,527 -------------- ------------ Cash and cash equivalents at end of period................................ $ 25,514 $ 34,097 ============== ============
# # # EX-99.2 4 c76362exv99w2.txt EXHIBIT 99.2 1 EXHIBIT 99.2 LITTELFUSE INCORPORATED MODERATOR: HOWARD WITT APRIL 21, 2003 10:00 A.M. CT Operator: Good day everyone and welcome to the Littelfuse Incorporated first quarter 2003 earnings conference call. Today's call is being recorded. At this time, I'd like to turn the call over to the Chairman, President and Chief Executive Officer, Mr. Howard Witt. Please go ahead, sir. Howard Witt: Good morning, everybody, and thanks for being with us this morning on this call. This is Howard. And with me is Phil Franklin, our CFO. Welcome to our first quarter, 2003 conference call. As for the normal program, after Phil and I finish our comments we'll have questions and answers. And the total call will be approximately 45 minutes. After opening comments, Phil will cover the first quarter in detail. I'll come back on with a background to quarter one, a few comments about the future. And then Phil will come back on and close with comments in how we see the balance of the year. And then we'll have Q&A. When Phil and I spoke with you in January, we commented on the activities we'd taken over the past two years that would help set Littelfuse for the future. We also talked about the importance of the balance created by being in several focused markets, and the added balance of being an international player with significant presence in the major world economies. And all of this, we feel has contributed to the respectable first quarter reflected in the results that we released this morning. Phil, go ahead with the details please. Phil Franklin: Yes. I'd like to read the Safe Harbor language first. Any forward-looking statements contained herein involve risks and uncertainties, including but not limited to product-demand risks, the effect of economic conditions, the impact of competitive products in pricing, commercialization and technological difficulties, capacity and supply constraints, exchange-rate fluctuations, the effect of the Company's accounting policies, labor disputes, restructuring costs in excess of expectations, and other risks which may be detailed in the Company's SEC filings. Sales for the first quarter of 2003 were 70.0 million, up seven percent from the year-ago quarter. Earnings-per-share for the first quarter were 15 cents, compared to eight cents for the prior-year period before restructuring charges. By market segment, first quarter sales compared to the prior year were as follows: Electronics up 12 percent, automotive up two percent, electrical up six percent, excluding currency effects and the Semitron acquisition, first-quarter sales were flat with the prior year, with segment sales as follows: Electronics up one percent, as strength in Asia offset weakness in Europe. Automotive down four percent due primarily to high year-end inventory levels at two major customers. Electrical was up six percent, reflecting recent share gains in what continues to be a very weak market. Our manufacturing rationalization program, and other cost reduction programs, remain on schedule and have been largely responsible for a gradual improvement in gross margin over the 2 last several quarters, despite ongoing price erosion. The thirty-three point zero percent, gross margin, although still well below our historical norm, is the best gross margin we've posted since the early stages of the electronics downturn. The operating margin at seven and-a-half percent for the quarter showed improvement over the full-year 2002-operating margin of 6.9 percent. And this should continue to improve over the next several quarters as we benefit from seasonally stronger sales and continued cost reductions. In the first quarter, we also gained about a penny a share on the other-income line, which was a combination of a gain on the sale of our Korean manufacturing facility, and some foreign-exchange gains. We were about break even on free cash flow for the first quarter. But let me remind you that the free cash flow is typically weak for us in the first half of the year, when sales and working capital are increasingly seasonally, and that we generate the majority of free cash for the year in the second half. Now I'd like to turn it back to Howard. Howard Witt: As Phil has noted in the opening comments, several initiatives have clearly contributed to the first quarter, and cost reduction is one of these. The continued progress on the plant consolidation program and the planned closure of our Centralia facility this summer is providing access to lower-cost labor at our established Mexico, China and Philippines factories. I would also add, to expand, we're adding space to the China and the Philippines factories this year as well. Cost reduction is not only moving production lines. We also take cost out by an aggressive program to substitute lower-cost materials and source offshore. We continue to take costs out of our product, and exceed the market-driven price pressures in each of our markets. We've recently, in this last year, added talent -- or Phil's added talent, because he heads this organization -- in our purchasing team. And that team is traveling globally seeking high quality, lower-cost sources, and gaining the leverage of combining purchases from a cross section of our businesses. Let me use maybe two examples. You know, we have talked a lot about plastic material savings. Those activities are going on primarily in our automotive area, with material substitution, and using consigned inventory programs. An example of another area -- when we make fuses, we have a metal end cap on each of the fuses we have purchased from suppliers over a long period of time. And our new team, with heavy offshore travel, is consolidating from two suppliers located in Europe for one, and the U.S., to a source in China where we will reduce our material costs by over 20 percent. There will be additional freight savings shifting to this China supplier, because of our manufacturing base located there. And our shipping costs will really decrease by 90 percent. Total savings on this one initiative, when it's once completed, will be approximately a million dollars per year. We've also taken cost out of our logistics operation through our new North American distribution center located here in the Chicago area. We have both increased customer service and reduced our direct labor cost by 20 percent. In automotive parts manufacturing, we've added over one million dollars in new plastic-injection loading machines, in our Des Plaines plant, to improve productivity. The improvement has been approximately 22 percent related to faster cycle times. This investment has also allowed us to reduce some of our heavy overtime that we've been experiencing in the automotive business. I would note that in the first quarter of this year, one-half of our cap ex has been in our automotive 3 business. So you can see, in addition to moving sites, the basic blocking and tackling with respect to raw-material costs and logistics are really adding to our bottom line. Related to acquisitions and product extensions, as Phil and I have pointed out, we used our strong cash generation to fund both new product activities and focused acquisitions. The Semitron acquisition last year is now contributing sales of new technologies to our product offering. Our feeling is that to be successful and profitable in the future, we need to do more than sell parts, albeit important parts, we need to broaden our product offering to our global electronic and automotive customer base. The objective here, as we spelled out and touched on in our annual report recently passed to you, is that rather than selling parts, we'd be able to sell solutions on a widened technology base. We will continue to seek very focused product portfolio additions that add technology and increase our presence, and affect our market share, to become dominant total-solution provider to our circuit protection customers. Being effectively debt free in the early part of this year provides us great flexibility in making strategic long-term investments. We have just a few comments on the three markets as we see them in reminding those who may be new to the stock on the call that, we have focused, P&L driven teams in each of our three business units. Speaking to each of them -- in the electrical area, as Phil pointed out, the market is weak due to several factors, including low non-residential construction, and low-plant utilization. Given that tone in the electrical market, our distributors are very conservative about inventory investment. However given that, we're still showing growth due to the new accounts we gained last year, and creative marketing of our unique indicating technology. On the automotive side, we've seen weakness in the first quarter. With U.S. Car Builds for the year projected at 15.9 million units, which will be down about two to three percent from 2002. And again, those are the U.S. numbers. Car inventories at this point are high, though with a labor negotiations coming in that industry in the fall our initial anticipation is that the car manufacturers, at least many of them, will tend to keep their car inventories high. In auto in Europe, the build is flat, projected to be flat this year with last year, at about 16.7 million units. There is more positive activity, as you probably read in the trade journals and others, regarding hybrid vehicles, as the Japanese, and now the U.S. manufacturers are beginning to offer these vehicles. And the good news is that these will be higher dollar value to us. But with a clear caveat, this market will take time to develop. And the last of the three segments is electronic were we continue to see strength in most of the Far East. Europe is weak, but we're helped by currency, at this point, in the European market. In the U.S., OEM is weak, however, we are seeing distribution begin to show some signs of strength, mainly just in the last two or three weeks in the month of April, with increased bookings and sales. I would comment, there are a few glimmers of hope in this business that's been weak for quite a time period. And these glimmers are coming primarily from the Far East. And just a few recent examples I would share with you -- NEC, one of our customers, expects a climb in notebook computer sales in the second quarter. Secondly, speaking about Nokia -- many of you may be aware or follow this company. Nokia is expecting cell-phone unit sales up in the second quarter in the range of four to 12 percent over the first quarter. And their handset profitability is also up. Some of this activity is driven by color displays and new features on their phones. And for Nokia, this will sound familiar, their profit increase, that they recently released, that was due to increased efficient manufacturing. Our March sales in electronics in Hong Kong and China were strong, and I would say the overall electronic book to bill in March in the south portion of the Far East, was 1.1, so again, a bit of a positive sign. 4 Some of you may be aware of Henderson: this is an electronic-market forecasting service. I quote, a forward-looking comment from them. This is an April comment, "a relatively strong rebound is projected for next year as obsolescence becomes increasingly prevalent in the corporate world. Postponed PC upgrades, fueled by renewed profitability, will be at the top of the list. And Lap-tops sporting wireless communication capabilities may just be a killer app next year, if the wireless infrastructure, including Wi-Fi is expanding aggressively." Regarding SARS, I would expect there will be some questions about this as we're all concerned about this issue in the Far East, (Henderson) also reports a possible defensive buildup of parts by OEMs in quarter two to be sure they can continue a smooth production in the face of this challenge. As for the impact on us, regarding SARS, we really haven't seen the impact on our business to date. And we're somewhat insulated from direct problems because we have local people in local-language selling. That is, we're not dependent on travel to cover our accounts. We've also, as we're shared before, have, by design, locally staffed design and support centers in Japan, China, Taiwan, Korea and Singapore. And one last point before Phil closes, and this is an overriding point, but we certainly feel very strongly that our separate SBU strategy, and our distinctly different markets, auto, electronic and electrical with each team focusing on their P&L, we feel is really paying off. Phil? Phil Franklin: Thanks, Howard. I'd like to conclude now with some forward-looking guidance with a caution that our markets are still quite uncertain, and visibility has really not improved to any significant degree. With that caveat, here's our latest thinking. We are planning for sequential growth in the neighborhood of five percent over the first quarter. This is for the second quarter of this year, reflecting the typical seasonal improvement in our business, driven primarily by electronics. With this modest increase in volumes, and completion of the final stage of our manufacturing rationalization program, with the move out of the Centralia, Illinois facility, we expect gross margins to show continued improvement. Earnings-per-share for the second quarter expected to be in the range of 17 to 20 cents. The full-year outlook is must less certain, but the current analyst consensus of 69 cents per share seems reasonable to us at this time. Now we'd be happy to take your questions. Operator: Thank you. The question-and-answer session will be conducted electronically. If you would like to ask a question, you may do so by pressing the star key, followed by the digit one on your touch-tone telephone. If you're on a speakerphone, please be sure your mute function is turned off to allow your signals to reach our equipment. Howard Witt: Thank you very much for being on the call. Phil Franklin: Have a good day. Operator: This does conclude today's conference. We thank you for all your participation. You may now disconnect. END -----END PRIVACY-ENHANCED MESSAGE-----