Exhibit 99.1
NEWS RELEASE
CONTACT: Phil Franklin,
Vice President, Operations Support and CFO (773) 628-0810
LITTELFUSE REPORTS THIRD QUARTER RESULTS
CHICAGO, October 30, 2013 –Littelfuse, Inc. (NASDAQ:LFUS) today reported sales and earnings for the third quarter of 2013.
Third Quarter Highlights
● | Sales for the third quarter of 2013 increased 7% sequentially and 16% year over year to a record $201.0 million. This included $21.1 million of sales from the Hamlin acquisition. |
● | On a GAAP basis, third quarter 2013 earnings were $1.19 per diluted share. This included a $1.5 million foreign exchange loss and $0.6 million of costs related to the Hamlin acquisition. These special items reduced earnings by approximately $0.07 per share. |
● | GAAP operating margin for the third quarter of 2013 was 18.7%. This included the $0.6 million of Hamlin acquisition costs mentioned above as well as $1.4 million of amortization of intangibles related to Hamlin. |
● | Sales and order trends by business unit were as follows for the third quarter: |
o | Electronics sales (excluding acquisitions) increased 3% sequentially and 4% year over year. The book to bill for the third quarter was .95 compared to .89 for the prior year. |
o | Automotive sales (excluding acquisitions) increased 11% year over year due primarily to strong growth in passenger vehicle fuses and Accel sensors. |
o | Electrical sales declined 10% year over year due to a drop-off in custom products selling into the potash mining market. This was partially offset by strong performance of the power fuse business reflecting continued success in the solar, HVAC and lighting markets. |
● | Cash provided by operating activities was $46.8 million for the third quarter of 2013 compared to $43.5 million for the third quarter of 2012. Capital expenditures for the third quarter of 2013 were $10.9 million compared to $6.0 million for the prior-year quarter. The increased capital spending is related to several capacity expansion projects which support the company’s growth plans and new product introductions. |
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“We had an excellent third quarter as sales were just above the middle of guidance and margins were at the upper end of our expectations,” said Gordon Hunter, Chief Executive Officer. “The electronics business continues to deliver superior profit margins in a challenging market environment. Automotive is benefiting from recent acquisitions and strong performance in the passenger vehicle market. In the electrical business, continued growth in power fuses is helping to offset reduced sales of custom products into the mining market.”
“In a slow-growth global economy with trends in our key end markets that are at best mixed, we delivered double-digit sales growth and near-record margins and cash flow in the third quarter,” said Phil Franklin, Chief Financial Officer. “This is a good indication that our strategy is sound, our business model is working and our teams are executing well.”
Outlook
● | Sales for the fourth quarter of 2013 are expected to be in the range of $185 to $195 million which, at the midpoint, represents 20% growth compared to the fourth quarter of 2012. |
● | Earnings for the fourth quarter of 2013 are expected to be in the range of $0.96 to $1.10 per diluted share. |
Dividend
The company will pay a cash dividend of $0.22 per common share on December 5, 2013 to shareholders of record at the close of business on November 20, 2013.
Conference Call and Webcast Information
Littelfuse will host a conference call today, Wednesday, October 30, 2013, 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, 2013 on the company’s website.
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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 7,000 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 29, 2012. 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 29, 2012. |
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LITTELFUSE, INC.
Net Sales and Operating Income by Business Unit
(In thousands of USD, unaudited)
Third Quarter | Year-to-Date | |||||||||||||||||||||||
2013 | 2012 | % Change | 2013 | 2012 | % Change | |||||||||||||||||||
Net Sales | ||||||||||||||||||||||||
Electronics(2) | $ | 101,013 | $ | 87,779 | 15% | $ | 271,878 | $ | 254,342 | 7% | ||||||||||||||
Automotive (3) | 70,386 | 51,878 | 36% | 194,319 | 155,954 | 25% | ||||||||||||||||||
Electrical | 29,641 | 33,031 | (10%) | 93,527 | 98,823 | (5%) | ||||||||||||||||||
Total net sales (1) | $ | 201,040 | $ | 172,688 | 16% | $ | 559,724 | $ | 509,119 | 10% | ||||||||||||||
(1) Total net sales for 2013 include $21.1M for the quarter and $28.1M for year-to-date from the Hamlin acquisition.
(2) Total Electronics net sales for 2013 include $10.1M for the quarter and $13.5M for year-to-date from the Hamlin acquisition.
(3) Total Automotive net sales for 2013 include $11.0M for the quarter and $14.6M for year-to-date from the Hamlin acquisition.
Third Quarter | Year-to-Date | |||||||||||||||||||||||
2013 | 2012 | % Change | 2013 | 2012 | % Change | |||||||||||||||||||
Operating Income | ||||||||||||||||||||||||
Electronics | $ | 20,362 | $ | 17,186 | 18% | $ | 52,284 | $ | 43,075 | 21% | ||||||||||||||
Automotive | 11,135 | 7,018 | 59% | 29,531 | 23,489 | 26% | ||||||||||||||||||
Electrical | 6,687 | 8,235 | (19%) | 18,801 | 23,795 | (21%) | ||||||||||||||||||
Other(4) | (625 | ) | (1,508 | ) | n/a | (3,558 | ) | (1,508 | ) | n/a | ||||||||||||||
Total operating income | $ | 37,559 | $ | 30,931 | 21% | $ | 97,058 | $ | 88,851 | 9% | ||||||||||||||
Interest expense | 939 | 454 | 1,959 | 1,298 | ||||||||||||||||||||
Investment impairment(5) | - | 1,965 | 10,678 | 3,523 | ||||||||||||||||||||
| Foreign currency revaluation (income) expense | 1,476 | 834 | (1,929 | ) | 1,903 | |||||||||||||||||||
Other (income) expense, net | (1,380 | ) | (1,350 | ) | (3,543 | ) | (3,075 | ) | ||||||||||||||||
Income before taxes | $ | 36,524 | $ | 29,028 | 26% | $ | 89,893 | $ | 85,202 | 6% | ||||||||||||||
(4) "Other" typically includes special items such as acquisition-related costs, restructuring costs, asset impairments, and gains and losses on asset sales. For the third quarter of 2013, "other" included legal and investment banking fees and other costs related to the Hamlin acquisition ($337K all in G&A) and a purchase accounting adjustment (ASC 805) also related to the Hamlin acquisition ($345K all in Cost of sales).
(5) Impairment and loan losses from investment in Shocking Technologies.
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LITTELFUSE, INC.
Condensed Consolidated Balance Sheets
(In thousands of USD, except share amounts)
September 28, 2013 | December 29, 2012 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 292,936 | $ | 235,404 | ||||
Short-term investments | 8,808 | - | ||||||
Accounts receivable, less allowances | 129,122 | 100,559 | ||||||
Inventories | 91,978 | 75,580 | ||||||
Deferred income taxes | 11,157 | 11,890 | ||||||
Prepaid expenses and other current assets | 17,771 | 16,532 | ||||||
Total net sales | 5,500 | 5,500 | ||||||
Total current assets | 557,272 | 445,465 | ||||||
Property, plant and equipment: | ||||||||
Land | 4,080 | 6,243 | ||||||
Buildings | 59,602 | 54,559 | ||||||
Equipment | 358,324 | 304,954 | ||||||
| 422,006 | 365,756 | |||||||
Accumulated depreciation | (275,906 | ) | (244,845 | ) | ||||
Net property, plant and equipment | 146,100 | 120,911 | ||||||
Intangible assets, net of amortization: | ||||||||
Patents, licenses and software | 42,461 | 11,144 | ||||||
Distribution network | 32,174 | 18,964 | ||||||
Customer lists, trademarks and tradenames | 22,452 | 18,704 | ||||||
Goodwill | 186,667 | 133,592 | ||||||
| 283,754 | 182,404 | |||||||
Investment in unconsolidated entity | - | 8,666 | ||||||
Investments | 11,136 | 10,327 | ||||||
Deferred income taxes | 3,776 | 8,090 | ||||||
Other assets | 4,893 | 1,865 | ||||||
Total assets | $ | 1,006,931 | $ | 777,728 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 38,937 | $ | 27,226 | ||||
Accrued payroll | 26,686 | 20,540 | ||||||
Accrued expenses | 11,643 | 11,062 | ||||||
Accrued severance | 345 | 1,033 | ||||||
Accrued income taxes | 10,154 | 11,559 | ||||||
Current portion of long-term debt | 133,500 | 84,000 | ||||||
Total current liabilities | 221,265 | 155,420 | ||||||
Long-term debt, less current portion | 95,000 | - | ||||||
Accrued post-retirement benefits | 14,928 | 22,338 | ||||||
Other long-term liabilities | 15,331 | 12,412 | ||||||
Total equity | 660,407 | 587,558 | ||||||
Total liabilities and equity | $ | 1,006,931 | $ | 777,728 | ||||
Common shares issued and outstanding of22,419,676 and 22,029,446 at September 28, 2013 andDecember 29, 2012, respectively.
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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 28, 2013 | September 29, 2012 | September 28, 2013 | September 29, 2012 | |||||||||||||
Net sales | $ | 201,040 | $ | 172,688 | $ | 559,724 | $ | 509,119 | ||||||||
Cost of sales | 120,080 | 104,052 | 340,601 | 310,059 | ||||||||||||
Gross profit | 80,960 | 68,636 | 219,123 | 199,060 | ||||||||||||
Selling, general and administrative | 34,437 | 30,601 | 98,091 | 90,199 | ||||||||||||
Research and development expenses | 6,217 | 5,505 | 17,725 | 15,553 | ||||||||||||
Amortization of intangibles | 2,747 | 1,599 | 6,249 | 4,457 | ||||||||||||
| 43,401 | 37,705 | 122,065 | 110,209 | |||||||||||||
Operating income | 37,559 | 30,931 | 97,058 | 88,851 | ||||||||||||
Interest expense | 939 | 454 | 1,959 | 1,298 | ||||||||||||
Impairment and loan loss inunconsolidated affiliate | - | 1,965 | 10,678 | 3,523 | ||||||||||||
| Foreign currency revaluation (income) expense | 1,476 | 834 | (1,929 | ) | 1,903 | |||||||||||
Other (income) expense, net | (1,380 | ) | (1,350 | ) | (3,543 | ) | (3,075 | ) | ||||||||
Income before income taxes | 36,524 | 29,028 | 89,893 | 85,202 | ||||||||||||
Income taxes | 9,534 | 6,250 | 21,461 | 21,898 | ||||||||||||
Net income | $ | 26,990 | $ | 22,778 | $ | 68,432 | $ | 63,304 | ||||||||
Net income per share: | ||||||||||||||||
Basic | $ | 1.20 | $ | 1.04 | $ | 3.07 | $ | 2.90 | ||||||||
Diluted | $ | 1.19 | $ | 1.03 | $ | 3.04 | $ | 2.87 | ||||||||
Weighted average shares andequivalent shares outstanding: | ||||||||||||||||
Basic | 22,428 | 21,923 | 22,274 | 21,770 | ||||||||||||
Diluted | 22,625 | 22,162 | 22,497 | 22,055 | ||||||||||||
Diluted Net Income Per Share | ||||||||||||||||
Net income as reported | $ | 26,990 | $ | 22,778 | $ | 68,432 | $ | 63,304 | ||||||||
Less: income allocated to participatingsecurities | (3 | ) | (28 | ) | (38 | ) | (123 | ) | ||||||||
Net income available to commonshareholders | $ | 26,987 | $ | 22,750 | $ | 68,394 | $ | 63,181 | ||||||||
Weighted average shares adjusted forsecurities | 22,625 | 22,162 | 22,497 | 22,055 | ||||||||||||
Diluted net income per share | $ | 1.19 | $ | 1.03 | $ | 3.04 | $ | 2.87 | ||||||||
Comprehensive income | $ | 36,707 | $ | 33,100 | $ | 65,631 | $ | 74,487 | ||||||||
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LITTELFUSE, INC.
Consolidated Statements of Cash Flows
(In thousands of USD, unaudited)
For the Nine Months Ended | ||||||||
September 28, 2013 | September 29, 2012 | |||||||
OPERATING ACTIVITIES: | ||||||||
Net income | $ | 68,432 | $ | 63,304 | ||||
Adjustments to reconcile net income to net cashprovided by operating activities: | ||||||||
Depreciation | 19,603 | 19,029 | ||||||
Amortization of intangibles | 6,249 | 4,457 | ||||||
Impairment of assets held for sale | - | 549 | ||||||
Non-cash inventory charge (1) | 2,069 | 567 | ||||||
Stock-based compensation | 7,030 | 5,574 | ||||||
Excess tax benefit on stock-based compensation | (3,763 | ) | (2,471 | ) | ||||
Loss on sale of assets | 169 | 62 | ||||||
Impairment and equity in net loss ofunconsolidated affiliate | 10,678 | 3,523 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (16,348 | ) | (12,756 | ) | ||||
Inventories | (4,537 | ) | 58 | |||||
Accounts payable | 6,659 | 5,640 | ||||||
Accrued expenses (including post retirement) | (11,743 | ) | (5,234 | ) | ||||
Accrued payroll and severance | 5,492 | (4,646 | ) | |||||
Accrued taxes | (5,473 | ) | (857 | ) | ||||
Prepaid expenses and other | 1,294 | (748 | ) | |||||
Net cash provided by operating activities | 85,811 | 76,051 | ||||||
INVESTING ACTIVITIES: | ||||||||
Purchases of property, plant and equipment | (25,328 | ) | (12,797 | ) | ||||
Acquisition of businesses, net of cash acquired | (145,000 | ) | (34,016 | ) | ||||
Purchase of investment | - | (10,000 | ) | |||||
Purchase of short-term investments | (8,478 | ) | (4,616 | ) | ||||
Proceeds from sales of short-term investments | - | 17,805 | ||||||
Proceeds from sale of assets | 158 | 495 | ||||||
Net cash used in investing activities | (178,648 | ) | (43,129 | ) | ||||
FINANCING ACTIVITIES: | ||||||||
Proceeds from term loan | 100,000 | 20,251 | ||||||
Proceeds of revolving credit facility | 160,500 | - | ||||||
Payments of revolving credit facility | (116,000 | ) | (17,500 | ) | ||||
Debt issuance costs | (809 | ) | - | |||||
Cash dividends paid | (13,789 | ) | (12,181 | ) | ||||
Proceeds from exercise of stock options | 19,335 | 13,411 | ||||||
Excess tax benefit on stock-based compensation | 3,763 | 2,471 | ||||||
Net cash provided by financing activities | 153,000 | 6,452 | ||||||
Effect of exchange rate changes on cash and cashequivalents | (2,631 | ) | 4,008 | |||||
Increase in cash and cash equivalents | 57,532 | 43,382 | ||||||
Cash and cash equivalents at beginning of period | 235,404 | 164,016 | ||||||
Cash and cash equivalents at end of period | $ | 292,936 | $ | 207,398 | ||||
(1) Purchase accounting adjustment related to acquisitions.
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