Littelfuse (LFUS) 8-K Littelfuse Reports Fourth Quarter Results

NEWS

NEWS RELEASE	Littelfuse, Inc.
	800 East Northwest Highway Des Plaines, IL 60016
	(847) 824-1188• (847) 391-0894 — FAX #

CONTACT: Phil Franklin,
Vice President, Operations Support & CFO (847) 391-0566

LITTELFUSE REPORTS FOURTH QUARTER RESULTS

     DES PLAINES, Illinois, February 6, 2008 —Littelfuse, Inc. (NASDAQ/NGS:LFUS) today reported sales and earnings for the fourth quarter and full year of 2007.

Fourth Quarter Highlights

• Sales for the fourth quarter of 2007 were $134.9 million, an increase of $7.1 million or 6% compared to the fourth quarter of 2006, reflecting growth in all three business segments and all geographies. The electrical business led the way with a 14% sales increase, while automotive and electronics sales grew 9% and 3%, respectively.

• Diluted earnings per share for the fourth quarter of 2007 were $0.36 compared to diluted earnings per share of $0.21 for the fourth quarter of 2006.

• Adjusted diluted earnings per share (see Supplemental Schedule) were $0.38, which excludes $0.8 million of non-cash asset impairment charges related to manufacturing transfers. This was above the company’s guidance of $0.33 to $0.37 per share, due primarily to a lower tax rate reflecting higher earnings in low-tax jurisdictions. Adjusted diluted earnings per share increased 52% compared to the prior-year quarter due to higher sales, improved margins and a lower tax rate.

• Cash flow from operating activities was $28.7 million for the fourth quarter of 2007 as accounts receivable days sales outstanding was reduced to 58 and inventory turns increased to 6.2.

• The company repurchased 500,000 shares of its common stock in the fourth quarter at an average price per share of $32.87. At the end of 2007, the company had 500,000 shares remaining on the current board authorization.

• The book-to-bill ratio for electronics for the fourth quarter of 2007 was .96, which is down from .98 for the third quarter of 2007.

• Capacity utilization for electronics held steady at approximately 80%.

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Full Year Highlights

• Sales for 2007 were $536.1 million, which surpassed last year’s record sales of $534.9 million. Electrical and automotive sales increased 14% and 9%, respectively. This was partially offset by a 5% decline in electronics sales due primarily to a distributor inventory correction earlier in the year and weakness in certain telecom segments. Regionally, Europe and Asia sales increased 6% and 3%, respectively, while the Americas declined 5%. In Europe, favorable currency effects and modest growth in automotive were partially offset by lower electronics sales. Both electronics and automotive contributed to the Asia growth. The decline in the Americas was due to weakness in electronics, partially offset by growth in both electrical and automotive.

• Diluted earnings per share for 2007 were $1.64 compared to $1.06 in 2006, primarily due to a gain on the sale of property in Ireland in 2007 and higher restructuring charges related to manufacturing transfers in 2006.

• 2007 was another strong year for cash flow. The company generated $59.9 million of cash from operating activities and $8.6 million from asset disposals (primarily real estate). This enabled funding of $40.5 million of capital expenditures, $4.5 million of acquisitions and $16.4 million of stock repurchases, while cash net of debt increased $21.0 million to $51.6 million.

     “2007 was a year of many accomplishments and a few disappointments,” said Gordon Hunter, Chief Executive Officer. “The automotive and electrical businesses both had record years. We made excellent progress on our manufacturing transfers, and we achieved record inventory turns and strong cash flow. On the negative side was the weak performance of our electronics business, although the return to growth in the fourth quarter for this business was encouraging.”

Current Outlook

• Sales for the first quarter of 2008 are expected to be in the range of $134 to 138 million, which represents 2 to 5% growth over the prior-year quarter.

• Margins will be impacted throughout 2008 by increasing costs related to manufacturing transfers, including redundant overhead, equipment move costs, training and retention incentives. These costs are expected to average about $3 million per quarter.

• Diluted earnings for the first quarter of 2008 are expected to be in the range of $0.32 to $0.37 per share.

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• Sales for fiscal year 2008 are expected to increase 5 to 7% compared to 2007, with the second half of the year being stronger than the first half due to increased new product sales.

• Diluted earnings per share for 2008 are expected to be in the range of $1.80 to $1.90.

• The effective tax rate for 2008 is expected to be approximately 30%.

• Cash from operating activities will be reduced by approximately $20 million of severance payments in 2008, mostly due to the closure of the Ireland facility. Net capital expenditures are expected to increase to approximately $45 million in 2008 due to costs related to the manufacturing transfers and the move to a new headquarters facility.

     “Our critical initiatives related to improving organic growth and driving to best-in-class manufacturing costs are on schedule. As a result, we remain confident in our ability to deliver earnings of $2.50 per share in 2009 and to achieve a 15% operating margin upon the completion of the manufacturing transfers,” said Hunter.

Conference Call Webcast Information

     Littelfuse will host a conference call today, Wednesday, February 6, 2008 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, 2008 and can be accessed through the Web site listed above.

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 atwww.littelfuse.com.

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“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 30, 2006 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.
Sales by Geography and Market
(in millions, unaudited)

	Fourth Quarter							Year-to-Date
	2007		2006		% Change			2007		2006		% Change
Geography
Americas	$	48.8	$	48.0		2	%	$	204.3	$	216.0		(5	)%
Europe		29.4		26.9		10	%		118.2		111.6		6	%
Asia-Pacific		56.7		52.9		7	%		213.6		207.3		3	%
Total	$	134.9	$	127.8		6	%	$	536.1	$	534.9		—	%

	Fourth Quarter							Year-to-Date
	2007		2006		% Change			2007		2006		% Change
Market
Electronics	$	88.2	$	85.5		3	%	$	348.9	$	365.5		(5	)%
Automotive		33.6		30.8		9	%		135.1		123.6		9	%
Electrical		13.1		11.5		14	%		52.1		45.8		14	%
Total	$	134.9	$	127.8		6	%	$	536.1	$	534.9		—	%

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LITTELFUSE, INC.
Condensed Consolidated Balance Sheets
(in thousands, unaudited)

	December 29, 2007			December 30, 2006
Assets
Current assets:
Cash and cash equivalents	$	64,943		$	56,704
Accounts receivable		85,607			83,901
Inventories		58,845			65,961
Deferred income taxes		10,986			12,382
Prepaid expenses and other current assets		16,389			9,821
Total current assets		236,770			228,769
Property, plant, and equipment:
Land		12,573			10,916
Buildings		49,321			45,518
Equipment		282,416			285,758
		344,310			342,192
Accumulated depreciation		(199,748	)		(216,676	)
Net property, plant and equipment		144,562			125,516
Intangible assets, net of amortization:
Patents, licenses and software		9,231			10,118
Distribution network		13,823			15,209
Trademarks and tradenames		1,192			1,321
Goodwill		73,462			67,500
		97,708			94,148
Investments		6,544			5,231
Deferred income taxes		6,141			9,746
Other assets		1,240			1,556
Total Assets	$	492,965		$	464,966
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	32,985		$	23,334
Accrued payroll		19,441			22,468
Accrued expenses		9,988			12,579
Accrued severance		21,092			10,670
Accrued income tax		2,595			4,656
Current portion of long-term debt		12,086			24,328
Total current liabilities		98,187			98,035
Long-term debt, less current portion		1,223			1,785
Accrued severance		8,912			18,879
Accrued post-retirement benefits		20,585			27,971
Other long-term liabilities		10,501			14,488
Minority interest		143			143
Shareholders’ equity		353,414			303,665
Total Liabilities and Shareholders’ Equity	$	492,965		$	464,966
Common shares issued and outstanding of 21,869,824 and 22,110,674, at December 29, 2007, and December 30, 2006, 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 Twelve Months Ended
	Dec 29,			Dec 30,			Dec 29,			Dec 30,
	2007			2006			2007			2006
Net sales	$	134,966		$	127,836		$	536,144		$	534,859
Cost of sales		92,310			89,747			364,607			373,596
Gross profit		42,656			38,089			171,537			161,263
Selling, general and administrative expenses		26,320			26,986			103,258			110,581
Research and development expenses		5,463			4,609			21,700			18,708
Gain on sale of Ireland property		—			—			(8,037	)		—
Amortization of intangibles		894			1,096			3,307			3,116
Operating income		9,979			5,398			51,309			28,858
Interest expense		520			374			1,557			1,626
Other expense (income), net		(846	)		(547	)		(1,536	)		(2,174	)
Earnings from continuing operations before income taxes		10,305			5,571			51,288			29,406
Income taxes		2,367			927			14,453			6,170
Earnings from continuing operations		7,938			4,644			36,835			23,236
Discontinued operations (net of tax)		—			—			—			588
Net income	$	7,938		$	4,644		$	36,835		$	23,824
Net income per share:
Basic:
Continuing operations	$	0.36		$	0.21		$	1.66		$	1.04
Discontinued operations	$	—		$	—		$	—		$	0.03
Net income	$	0.36		$	0.21		$	1.66		$	1.07
Diluted:
Continuing operations	$	0.36		$	0.21		$	1.64		$	1.03
Discontinued operations	$	—		$	—		$	—		$	0.03
Net income	$	0.36		$	0.21		$	1.64		$	1.06
Weighted average shares and equivalent shares outstanding:
Basic		22,108			22,296			22,231			22,305
Diluted		22,254			22,424			22,394			22,434

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LITTELFUSE, INC.
Consolidated Statements of Cash Flows
(in thousands, unaudited)

	For the Twelve Months Ended
	December 29, 2007			December 30, 2006
Operating activities:
Net income	$	36,835		$	23,824
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		26,196			29,749
Amortization of intangibles		3,307			3,116
Stock-based compensation		4,957			5,187
Gain on sale of Ireland property		(8,037	)		—
Changes in operating assets and liabilities:
Accounts receivable		(249	)		2,970
Inventories		9,112			1,240
Accounts payable and accrued expenses		(1,914	)		19,969
Accrued taxes		(2,807	)		(6,491	)
Prepaid expenses and other		(7,460	)		1,351
Net cash provided by operating activities		59,940			80,915
Investing activities:
Purchases of property, plant and equipment		(40,501	)		(19,613	)
Purchase of businesses, net of cash acquired		(4,507	)		(37,841	)
Sale of business and property, plant and equipment		10,200			14,901
Net cash used in investing activities		(34,808	)		(42,553	)
Financing activities:
Proceeds from debt		89,200			43,273
Payments of debt		(101,991	)		(45,626	)
Notes receivable, common stock		6			7
Proceeds from exercise of stock options		6,316			5,734
Purchases of common stock		(16,434	)		(10,262	)
Excess tax benefit on share-based compensation		610			468
Net cash used in financing activities		(22,293	)		(6,406	)
Effect of exchange rate changes on cash		5,400			2,801
Increase in cash and cash equivalents		8,239			34,757
Cash and cash equivalents at beginning of period		56,704			21,947
Cash and cash equivalents at end of period	$	64,943		$	56,704

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LITTELFUSE, INC.
Supplemental Information
(in thousands, except per share data, unaudited)

	For the Three Months Ended
	Dec 29, 2007			Dec 30, 2006
Net sales	$	134,966		$	127,836
Cost of sales		92,310			89,747
Special items (1)		(767	)		(2,714	)
Adjusted cost of sales		91,543			87,033
Adjusted gross profit		43,423			40,803
% of sales		32.2	%		31.9	%
Operating expenses		32,677			32,691
Special items		—			—
Adjusted operating expenses		32,677			32,691
% of sales		24.2	%		25.6	%
Adjusted operating income		10,746			8,112
% of sales		8.0	%		6.3	%
Interest/other (income) expense		(326	)		(173	)
Special items		—			—
Adjusted interest/other (income) expense		(326	)		(173	)
Adjusted income before tax		11,072			8,285
Adjusted income tax expense		2,547			2,651
Effective rate		23.0	%		32.0	%
Adjusted net income	$	8,525		$	5,634
Adjusted earnings per share	$	0.38		$	0.25
Diluted shares		22,254			22,424

Note: The company believes that adjusted operating income is more indicative of its ongoing operating performance than GAAP operating income since it excludes gains on asset sales and special charges that are related to closure of legacy operations.

Special Charges:

(1) Special items for the period ended December 29, 2007 primarily relate to impairment charges incurred in China and Germany for manufacturing transfers. Special items for the period ended December 30, 2006 primarily relate to Ireland and Teccor severance and asset write-downs.

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