EX-99.1 2 c47300exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
(LITTELFUSE LOGO)
CONTACT: Phil Franklin,
     Vice President, Operations Support & CFO (847) 391-0566
LITTELFUSE REPORTS THIRD QUARTER RESULTS
          DES PLAINES, Illinois, October 29, 2008 — Littelfuse, Inc. (NASDAQ:LFUS) today reported sales and earnings for the third quarter of 2008.
Third Quarter Highlights
  •   Sales for the third quarter of 2008 were slightly above the company’s revised guidance of September 29, and earnings per share before special items were at the high end of the guidance range.
 
  •   Sales for the third quarter of 2008 were $141.5 million, an increase of $1.3 million or 1% compared to the third quarter of 2007. Electrical and electronics sales increased 21% and 4% respectively compared to the prior year, while automotive sales declined by 15%. The automotive decline was driven by sharp reductions in global car production.
 
  •   Diluted earnings per share for the third quarter of 2008 were $0.18 compared to diluted earnings per share of $0.64 for the third quarter of 2007.
 
  •   Adjusted diluted earnings per share (see Supplemental Information) were $0.35, which excludes $6.0 million of charges primarily related to settlement of a pension plan in Ireland. This compares to $0.48 per diluted share for the third quarter of 2007 excluding special items.
 
  •   The lower adjusted earnings for the third quarter of 2008 compared to the prior year primarily reflected higher costs related to manufacturing transfer projects, price erosion in excess of cost reductions and increased freight surcharges.
 
  •   For the third quarter of 2008, cash from operating activities was $13.2 million while capital expenditures were $11.9 million. The company generated positive free cash flow for the third quarter despite high capital expenditures to support the manufacturing transfer projects and over $7 million of severance payments related to plant closures.
 
  •   The book-to-bill ratio for electronics for the third quarter of 2008 was 0.9, but this has dropped to 0.8 for the month of October.
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Fourth Quarter Outlook
“Passenger vehicle production continues to decline, and as a result, our automotive business shows few signs of recovery from the weak levels of the third quarter,” said Gordon Hunter, Chief Executive Officer. “The low third quarter electronics book-to-bill ratio has now translated into slowing shipments. As we head toward the end of the year, OEMs are reducing production rates and distributors are managing their inventories tightly. This reflects the high level of market uncertainty and concerns about the global economy.”
  •   Sales for the fourth quarter of 2008 are expected to be 12-16% below the third quarter of 2008 due to the depressed automotive market and weakening electronics sales on top of normal seasonal slowing, partially offset by the acquisition of Startco Engineering Ltd. Startco, acquired on September 30, is expected to contribute $4 to $5 million in sales for the quarter depending on the Canadian dollar exchange rate.
 
  •   The company expects diluted earnings per share before restructuring charges for the fourth quarter of 2008 to be in the range of $0.04 to $0.14 per share, or ($0.05) to $0.05 per share on a U.S. GAAP basis (see Supplemental Schedule on page 9). Startco is expected to be neutral to slightly accretive to earnings for the fourth quarter. The company expects to incur restructuring charges of approximately $0.09 per share primarily related to anticipated manufacturing transfer projects.
2009 Outlook
“The outlook for 2009 is still highly uncertain, but we believe that the current weakness in our automotive and electronics markets could persist through at least the first half of the year,” said Hunter. “The electrical market, which is still relatively healthy, could also weaken if non-residential construction declines further. Startco, on the other hand, has a strong backlog that should enable double-digit growth for the year.”
“We are not prepared to give specific 2009 guidance at this point, but it appears likely that sales will be down year over year even after the positive contribution of Startco,” added Hunter. “However, we believe the negative impacts of a weak top line in 2009 will be cushioned by significant cost savings from our manufacturing transfer projects and lower material costs if commodity prices remain at current levels.”
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Conference Call Webcast Information
          Company management will host a conference call today, Wednesday, October 29, 2008, at 11:00 a.m. Eastern/10:00 a.m. Central time to discuss the third 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 December 31, 2008 on the company’s Web site.
About Littelfuse
          As the worldwide leader in circuit protection products and solutions with annual sales of $536.1 million in 2007, the Littelfuse portfolio is backed by industry leading technical support, design and manufacturing expertise. Littelfuse products are vital components in virtually every product that uses electrical energy, including automobiles, computers, consumer electronics, handheld devices, industrial equipment, and telecom/datacom circuits. Littelfuse offers Teccor®, Wickmann® and Pudenz® brand circuit protection products. In addition to its Des Plaines, Illinois, world headquarters, Littelfuse has sales, distribution, manufacturing and engineering facilities in Brazil, China, England, Germany, Hong Kong, India, Ireland, Japan, Korea, Mexico, the Netherlands, the Philippines, Singapore, Taiwan and the U.S.
          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.
This press release may include statements that constitute “forward looking statements” within the meaning of federal securities regulations and 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 that may be detailed in the company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2007 under the heading “Risk Factors” and elsewhere in the company’s other Securities and Exchange Commission filings. These forward looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, and the company 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. The company assumes no obligation to update this forward-looking information, except as required by law.
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LITTELFUSE, INC.
Net Sales by Business Unit and Geography
(in millions, unaudited)
                                                 
    Third Quarter     Year-to-Date  
    2008     2007     % Change     2008     2007     % Change  
Business Unit
                                                
Electronics
   $ 95.8     $ 92.4       4 %   $ 276.2     $ 260.7       6 %
Automotive
     28.9       33.9       (15 %)     104.1       101.5       3 %
Electrical
     16.8       13.9       21 %     44.7       39.0       15 %
 
                                        
 
                                                
Total
   $ 141.5     $ 140.2       1 %   $ 425.0     $ 401.2       6 %
 
                                        
                                                 
    Third Quarter     Year-to-Date  
    2008     2007     % Change     2008     2007     % Change  
Geography
                                                
Americas
   $ 51.9     $ 52.9       (2 %)   $ 156.7     $ 155.5       1 %
Europe
     29.0       28.2       3 %     98.1       88.8       10 %
Asia-Pacific
     60.6       59.1       3 %     170.2       156.9       8 %
 
                                        
 
                                                
Total
   $ 141.5     $ 140.2       1 %   $ 425.0     $ 401.2       6 %
 
                                        
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LITTELFUSE, INC.
Condensed Consolidated Balance Sheets
(in thousands, unaudited)
                 
    September 27, 2008     December 29, 2007  
Assets
                
Current assets:
                
Cash and cash equivalents
   $ 67,364     $ 64,943  
Accounts receivable
     90,373       85,607  
Inventories
     64,598       58,845  
Deferred income taxes
     10,607       10,986  
Prepaid expenses and other current assets
     11,936       14,789  
 
            
Total current assets
     244,878       235,170  
 
                
Property, plant and equipment:
                
Land
     11,067       12,573  
Buildings
     57,744       49,321  
Equipment
     294,284       282,416  
 
            
 
     363,095       344,310  
Accumulated depreciation
     (207,468 )     (199,748 )
 
            
Net property, plant and equipment
     155,627       144,562  
 
                
Intangible assets, net of amortization:
                
Patents, licenses and software
     8,435       9,231  
Distribution network
     12,395       13,823  
Customer lists, trademarks and tradenames
     3,141       1,192  
Goodwill
     80,673       73,462  
 
            
 
     104,644       97,708  
 
                
Investments
     4,733       6,544  
Deferred income taxes
     7,387       6,141  
Other assets
     1,153       1,240  
 
            
Total Assets
   $ 518,422     $ 491,365  
 
            
 
                
Liabilities and Shareholders’ Equity
                
Current liabilities:
                
Accounts payable
   $ 25,427     $ 27,889  
Accrued payroll
     17,814       19,441  
Accrued expenses
     14,184       11,595  
Accrued severance
     12,440       21,092  
Accrued income taxes
     1,701       4,484  
Current portion of long-term debt
     37,517       12,086  
 
            
Total current liabilities
     109,083       96,587  
 
                
Long-term debt, less current portion
     —       1,223  
Accrued severance
     7,641       8,912  
Accrued post-retirement benefits
     19,480       18,371  
Other long-term liabilities
     11,473       12,715  
Minority interest
     143       143  
Total shareholders’ equity
     370,602       353,414  
 
            
Total Liabilities and Shareholders’ Equity
   $ 518,422     $ 491,365  
 
            
 
                
Common shares issued and outstanding of 21,712,017 and 21,869,824, at September 27, 2008, and December 29, 2007, respectively.
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LITTELFUSE, INC.
Consolidated Statements of Income
(in thousands, except per share data, unaudited)
                                 
    For the Three Months Ended     For the Nine Months Ended  
    Sept 27, 2008     Sept 29, 2007     Sept 27, 2008     Sept 29, 2007  
Net sales
   $ 141,448     $ 140,215     $ 424,982     $ 401,178  
 
                                
Cost of sales
     105,548       93,926       303,139       272,297  
 
                        
 
                                
Gross profit
     35,900       46,289       121,843       128,881  
 
                                
Selling, general and administrative expenses
     26,594       27,578       79,216       76,938  
Research and development expenses
     6,265       5,644       18,101       16,237  
Gain on sale of Ireland property
     —       (8,037 )     —       (8,037 )
Amortization of intangibles
     1,030       877       2,923       2,413  
 
                        
 
                                
Operating income
     2,011       20,227       21,603       41,330  
 
                                
Interest expense
     346       207       1,048       1,037  
Other expense (income), net
     (3,246 )     195       (2,890 )     (690 )
 
                        
 
                                
Income before income taxes
     4,911       19,825       23,445       40,983  
 
                                
Income taxes
     923       5,531       6,204       12,086  
 
                        
 
                                
Net income
   $ 3,988     $ 14,294     $ 17,241     $ 28,897  
 
                        
 
                                
Net income per share:
                                
Basic
   $ 0.18     $ 0.64     $ 0.79     $ 1.30  
 
                        
Diluted
   $ 0.18     $ 0.64     $ 0.79     $ 1.29  
 
                        
 
                                
Weighted average shares and equivalent shares outstanding:
                                
Basic
     21,703       22,359       21,724       22,272  
 
                        
Diluted
     21,855       22,499       21,871       22,445  
 
                        
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LITTELFUSE, INC.
Consolidated Statements of Cash Flows
(in thousands, unaudited)
                 
    For the Nine Months Ended  
    Sept 27, 2008     Sept 29, 2007  
Operating activities:
                
Net income
   $ 17,241     $ 28,897  
Adjustments to reconcile net income to net cash provided by operating activities:
                
Depreciation
     20,843       18,503  
Amortization of intangibles
     2,923       2,413  
Stock-based compensation
     3,770       3,795  
Gain on sale of property, plant and equipment
     (305 )     (8,037 )
Pension settlement expenses
     5,725       1,847  
Changes in operating assets and liabilities:
                
Accounts receivable
     (5,669 )     (5,356 )
Inventories
     (6,190 )     7,182  
Accounts payable and accrued expenses
     (223 )     (6,615 )
Accrued payroll and severance
     (11,552 )     (2,582 )
Accrued taxes
     (5,932 )     (4,373 )
Prepaid expenses and other
     7,082       (4,400 )
 
            
Net cash provided by operating activities
     27,713       31,274  
 
                
Investing activities:
                
Purchases of property, plant and equipment
     (36,956 )     (26,215 )
Purchase of business, net of cash acquired
     (9,280 )     (4,507 )
Sale of property, plant and equipment
     3,384       8,593  
 
            
Net cash used in investing activities
     (42,852 )     (22,129 )
 
                
Financing activities:
                
Proceeds from debt
     75,500       41,700  
Payments of debt
     (51,412 )     (59,866 )
Notes receivable, common stock
     5       —  
Purchases of common stock
     (6,623 )     —  
Proceeds from exercise of stock options
     1,687       6,205  
Excess tax benefit on share-based compensation
     136       1,005  
 
            
Net cash provided by (used in) financing activities
     19,293       (10,956 )
 
                
Effect of exchange rate changes on cash
     (1,733 )     2,823  
 
            
 
                
Increase in cash and cash equivalents
     2,421       1,012  
Cash and cash equivalents at beginning of period
     64,943       56,704  
 
            
Cash and cash equivalents at end of period
   $ 67,364     $ 57,716  
 
            
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LITTELFUSE, INC.
Supplemental Information
(in thousands, except per share data, unaudited)
                 
    For the Three Months Ended  
    Sept 27, 2008     Sept 29, 2007  
Net sales
   $ 141,448     $ 140,215  
 
                
Cost of sales
     105,548       93,926  
Special items (1)
     (6,029 )     (475 )
 
            
Adjusted cost of sales
     99,519       93,451  
 
                
Adjusted gross profit
     41,929       46,764  
% of sales
     29.6 %     33.4 %
 
                
Total operating expenses
     33,889       26,062  
Special items (2)
     (516 )     5,963  
 
            
Adjusted total operating expenses
     33,373       32,025  
% of sales
     23.6 %     22.8 %
 
                
Adjusted operating income
     8,556       14,739  
 
            
% of sales
     6.0 %     10.5 %
 
                
Interest/other (income) expense
     (2,900 )     402  
Special items (3)
     577       (745 )
 
            
Adjusted interest/other (income) expense
     (2,323 )     (343 )
 
                
Adjusted income before tax
     10,879       15,082  
 
                
Adjusted income tax expense
     3,220       4,208  
 
            
Effective rate
     29.6 %     27.9 %
 
                
Adjusted net income
   $ 7,659     $ 10,874  
 
            
 
                
Adjusted diluted earnings per share
   $ 0.35     $ 0.48  
 
            
 
                
Diluted shares
     21,855       22,499  
 
            
Note: The Company believes that adjusted operating income is more indicative of its ongoing operating performance than U.S. GAAP operating income since the former excludes special charges that are related to closure of legacy operations.
Special Items:
 
(1)   Special items for 2008 relate to the Ireland pension settlement and Swindon severance. Special items for 2007 relate to Ireland severance.
 
(2)   Special items for 2008 relate to Swindon severance. Special items for 2007 relate to the gain on the sale of property in Ireland and the U.K. pension settlement.
 
(3)   Special items for 2008 reflect the net exchange rate impact from the Ireland pension settlement. Special items for 2007 reflect the net exchange rate impact from the Ireland long-term severance adjustments.
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LITTELFUSE, INC.
Supplemental Schedule (unaudited)
Diluted Earnings Per Share — Fiscal Year 2008
                         
    Actual For the     Forecasted For     Forecasted For  
    Nine Months     the Final Three     the Year Ended  
    Ended September 27,     Months of Fiscal     December 27,  
    2008     Year 2008     2008  
Diluted Earnings Per Share — U.S. GAAP
   $ 0.79     $ (0.05) - 0.05     $ 0.74 - 0.84  
Adjustments / Special Items
     0.37 (1)     0.09 (2)     0.46  
 
                  
Diluted Earnings Per Share — Adjusted
   $ 1.16     $ 0.04 - 0.14     $ 1.20 - 1.30  
 
                  
Note: The Company believes that adjusted earnings per share is more indicative of its ongoing operating performance than U.S. GAAP earnings per share since the former excludes special charges that are related to closure of legacy operations.
Adjustments / Special Items:
 
(1)   Special items for the nine months ended September 27, 2008 relate to restructuring charges involving the transfer of the Company’s Matamoros, Mexico manufacturing operations to China, severance and impairment charges for Ireland, Swindon (UK) and Dongguan Wickman (China) and the Ireland pension settlement.
 
(2)   Special items forecasted for the remaining three months of fiscal year 2008 relate to restructuring charges involving anticipated manufacturing transfer projects.
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