Exhibit 99.1
NEWS RELEASE
CONTACT: Phil Franklin,
Vice President, Operations Support, CFO and Treasurer (773) 628-0810
LITTELFUSE REPORTS FIRST QUARTER RESULTS
CHICAGO, April 29, 2014 –Littelfuse, Inc. (NASDAQ:LFUS) today reported sales and earnings for the first quarter of 2014.
First Quarter Highlights
● | Sales for the first quarter of 2014 were $206.9 million, a 21% increase compared to the prior-year quarter. This excellent sales performance was due to the Hamlin and SymCom acquisitions as well as strong organic growth in automotive and electronics, partially offset by lower electrical sales reflecting weakness in the mining sector. Excluding acquisitions, sales increased 6% compared to the prior year. |
● | On a GAAP basis, first quarter 2014 earnings were $1.12 per diluted share. This included $1.2 million of special, non-cash items primarily related to the SymCom acquisition. Excluding these special items, earnings for the first quarter of 2014 were $1.16 per diluted share. |
● | Sales and order trends by business unit were as follows: |
o | Electronics sales increased 21% year over year due primarily to strong growth for semiconductor products and the addition of the Hamlin electronic sensor business. Excluding acquisitions, electronics sales increased 9% compared to the prior year. |
o | Automotive sales increased 39% year over year due to strong organic growth for passenger car fuses, commercial vehicle products and Accel sensors and the acquisition of Hamlin. Excluding acquisitions, automotive sales increased 18% compared to the prior year. |
o | Electrical sales declined 11% year over year as the decline in sales into the mining market more than offset growth in electrical fuses and the addition of SymCom. Excluding acquisitions, electrical sales declined 25% compared to the prior year. | |
| o | The electronics book-to-bill ratio for the first quarter of 2014 was 1.11 excluding Hamlin. |
● | Cash provided by operating activities was $11.5 million for the first quarter of 2014 compared to $16.0 million for the first quarter of 2013. These cash flows included voluntary pension contributions which reduced operating cash by $9.9 million and $5.0 million respectively. All company pension plans are now close to fully funded on an accounting basis. |
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● | The previous share repurchase authorization expires on April 30, 2014 and has been replaced with a one million share repurchase authorization effective through April 30, 2015. No shares were repurchased during the last 12 months. |
“The momentum that started to build in our automotive and electronics businesses in the second half of 2013 continued through the first quarter,” said Gordon Hunter, Chief Executive Officer. “Despite ongoing weakness in the mining sector, we had a very solid start to the year and are cautiously optimistic about the remainder of 2014.”
“For the first time since we rolled out our strategic targets in late 2012, we over-achieved on both organic and acquisition growth,” said Phil Franklin, Chief Financial Officer. “With our first quarter sales increase of 21% (15% from acquisitions and 6% organic) and strong growth expected again in the second quarter, we believe we are on track with our five-year growth plan.”
Outlook
● | Sales for the second quarter of 2014 are expected to be in the range of $216 to $226 million which represents 18% year-over-year growth at the midpoint. |
● | Earnings for the second quarter of 2014 are expected to be in the range of $1.23 to $1.37 per diluted share, excluding any special items. |
Dividend
The company will pay a cash dividend of $0.22 per common share on June 5, 2014 to shareholders of record at the close of business on May 22, 2014.
Conference Call and Webcast Information
Littelfuse will host a conference call today, Tuesday, April 29, 2014, at 10:00 a.m. Central / 11:00 a.m. Eastern time to discuss the first 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 June 30, 2014 on the company’s website.
About Littelfuse
Founded in 1927, Littelfuse is the world leader in circuit protection with growing global platforms in powercontrol and sensing. The company serves customers in the electronics, automotive and industrial marketswith technologies including fuses, semiconductors, polymers, ceramics, relays and sensors. Littelfuse has over 7,500 employees in more than 35 locations throughout the Americas, Europe and Asia. For more information, please visit the Littelfuse website:littelfuse.com.
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“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 28, 2013. 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 28, 2013. |
LFUS-F
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LITTELFUSE, INC.
Net Sales and Operating Income by Business Unit
(In thousands of USD, unaudited)
First Quarter | ||||||||||||
2014 | 2013 | % Change | ||||||||||
Net Sales | ||||||||||||
Electronics(2) | $ | 95,722 | $ | 79,415 | 21% | |||||||
Automotive (3) | 82,419 | 59,385 | 39% | |||||||||
Electrical(4) | 28,718 | 32,118 | (11%) | |||||||||
Total net sales (1) | $ | 206,859 | $ | 170,918 | 21% | |||||||
(1) Total net sales for 2014 include an incremental $26.4M from business acquisitions.
(2) Total Electronics net sales for 2014 include $9.4M from the Hamlin acquisition.
(3) Total Automotive net sales for 2014 include $12.5M from the Hamlin acquisition.
(4) Total Electrical net sales for 2014 include $4.5M from the SymCom acquisition.
First Quarter | ||||||||||||
2014 | 2013 | % Change | ||||||||||
Operating Income | ||||||||||||
Electronics | $ | 19,068 | $ | 12,143 | 57% | |||||||
Automotive | 11,899 | 9,483 | 25% | |||||||||
Electrical | 4,032 | 6,491 | (38%) | |||||||||
Other(5) | (1,409 | ) | - | na | ||||||||
Total operating income | $ | 33,590 | $ | 28,117 | 19% | |||||||
Interest expense | 1,216 | 376 | ||||||||||
Investment impairment(6) | - | 10,678 | ||||||||||
Foreign exchange (gain) loss | (252 | ) | 319 | |||||||||
Other (income) expense, net | (1,186 | ) | (1,228 | ) | ||||||||
Income before taxes | $ | 33,812 | $ | 17,972 | 88% | |||||||
(5) "Other" typically includes special items such as acquisition-related costs, restructuring costs, asset impairments, and gains and losses on asset sales. For the first quarter of 2014, "other" included a purchase accounting charge (ASC 805) related to the SymCom acquisition ($1.4M all in Cost of sales).
(6) Impairment and loan losses from investment in Shocking Technologies.
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LITTELFUSE, INC.
Supplemental Financial Information
(in millions of USD except share amounts)
GAAP EPS Reconciliation | ||||||||
Q1-14 | Q1-13 | |||||||
GAAP diluted EPS | $ | 1.12 | $ | 0.51 | ||||
EPS impact of special items (below) | 0.04 | 0.44 | ||||||
Adjusted diluted EPS | $ | 1.16 | $ | 0.95 | ||||
Year-over-year adjusted EPS growth | 22 | % | 17 | % | ||||
Special Items (income)/expense | ||||||||
Purchase accounting adjustment | $ | 1.4 | $ | - | ||||
Adjustment to Operating income | 1.4 | - | ||||||
Impairment charges | - | 10.7 | ||||||
Foreign exchange (gain)/loss | (0.2 | ) | - | |||||
Adjustment to pre-tax income | $ | 1.2 | $ | 10.7 | ||||
EPS impact of above special items | $ | 0.04 | $ | 0.29 | ||||
EPS impact of Shocking tax adjustment | - | 0.15 | (1) | |||||
Total EPS impact | $ | 0.04 | $ | 0.44 | ||||
(1) Reflects $3.3 million of the Shocking tax adjustment recorded in Q1-13.
Operating margin reconciliation | Q1-14 | Q1-13 | ||||||
Net sales | $ | 206.9 | $ | 170.9 | ||||
GAAP Operating income | $ | 33.6 | $ | 28.1 | ||||
Add back amortization | 3.1 | 1.6 | ||||||
Add back special items | 1.4 | - | ||||||
Operating income before amortization and special items | $ | 38.1 | $ | 29.7 | ||||
Operating margin before amortization and special items | 18.4 | % | 17.4 | % | ||||
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LITTELFUSE, INC.
Condensed Consolidated Balance Sheets
(In thousands of USD, except share amounts)
| March 29, 2014 | December 28, 2013 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 319,806 | $ | 305,192 | ||||
Short-term investments | 6,943 | 6,886 | ||||||
Accounts receivable, less allowances | 136,077 | 127,887 | ||||||
Inventories | 99,121 | 92,591 | ||||||
Deferred income taxes | 10,409 | 10,463 | ||||||
Prepaid expenses and other current assets | 19,665 | 17,080 | ||||||
Assets held for sale | 5,500 | 5,500 | ||||||
Total current assets | 597,521 | 565,599 | ||||||
Property, plant and equipment: | ||||||||
Land | 5,993 | 4,382 | ||||||
Buildings | 65,403 | 59,699 | ||||||
Equipment | 357,153 | 354,475 | ||||||
| 428,549 | 418,556 | |||||||
Accumulated depreciation | (270,032 | ) | (268,383 | ) | ||||
Net property, plant and equipment | 158,517 | 150,173 | ||||||
Intangible assets, net of amortization: | ||||||||
Patents, licenses and software | 26,339 | 25,166 | ||||||
Distribution network | 41,582 | 42,685 | ||||||
Customer lists, trademarks and tradenames | 46,090 | 30,506 | ||||||
Goodwill | 199,415 | 186,464 | ||||||
| 313,426 | 284,821 | |||||||
Investments | 13,686 | 12,286 | ||||||
Deferred income taxes | 5,287 | 5,092 | ||||||
Other assets | 7,229 | 6,402 | ||||||
Total assets | $ | 1,095,666 | $ | 1,024,373 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 37,341 | $ | 33,872 | ||||
Accrued payroll | 16,802 | 29,437 | ||||||
Accrued expenses | 13,267 | 13,087 | ||||||
Accrued severance | 196 | 182 | ||||||
Accrued income taxes | 7,357 | 5,931 | ||||||
Deferred income taxes | 236 | 229 | ||||||
Current portion of long-term debt | 193,000 | 126,000 | ||||||
Total current liabilities | 268,199 | 208,738 | ||||||
Long-term debt, less current portion | 92,500 | 93,750 | ||||||
Deferred income taxes | 11,693 | 11,585 | ||||||
Accrued post-retirement benefits | - | 8,528 | ||||||
Other long-term liabilities | 16,907 | 14,856 | ||||||
Total equity | 706,367 | 686,916 | ||||||
Total liabilities and equity | $ | 1,095,666 | $ | 1,024,373 | ||||
Common shares issued and outstanding of22,534,655 and 22,467,491 at March 29, 2014 andDecember 28, 2013, 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 | ||||||||
| March 29, 2014 | March 30, 2013 | |||||||
Net sales | $ | 206,859 | $ | 170,918 | ||||
Cost of sales | 128,365 | 106,312 | ||||||
Gross profit | 78,494 | 64,606 | ||||||
Selling, general and administrative | 34,171 | 29,202 | ||||||
Research and development expenses | 7,574 | 5,715 | ||||||
Amortization of intangibles | 3,159 | 1,572 | ||||||
Operating expenses | 44,904 | 36,489 | ||||||
Operating income | 33,590 | 28,117 | ||||||
Interest expense | 1,216 | 376 | ||||||
Impairment and loan loss inunconsolidated affiliate | - | 10,678 | ||||||
Foreign exchange (gain) loss | (252 | ) | 319 | |||||
Other (income) expense, net | (1,186 | ) | (1,228 | ) | ||||
Income before income taxes | 33,812 | 17,972 | ||||||
Income taxes | 8,423 | 6,484 | ||||||
Net income | $ | 25,389 | $ | 11,488 | ||||
Net income per share: | ||||||||
Basic | $ | 1.13 | $ | 0.52 | ||||
Diluted | $ | 1.12 | $ | 0.51 | ||||
Weighted average shares andequivalent shares outstanding: | ||||||||
Basic | 22,492 | 22,095 | ||||||
Diluted | 22,717 | 22,366 | ||||||
Diluted Net Income Per Share | ||||||||
Net income as reported | $ | 25,389 | $ | 11,488 | ||||
Less: income allocated to participatingsecurities | - | (15 | ) | |||||
Net income available to commonshareholders | $ | 25,389 | $ | 11,473 | ||||
Weighted average shares adjusted forsecurities | 22,717 | 22,366 | ||||||
Diluted net income per share | $ | 1.12 | $ | 0.51 | ||||
Comprehensive income | $ | 19,492 | $ | 7,662 | ||||
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LITTELFUSE, INC.
Consolidated Statements of Cash Flows
(In thousands of USD, unaudited)
| For the Twelve Months Ended | ||||||||
| March 29, 2014 | March 30, 2013 | |||||||
(Unaudited) | ||||||||
OPERATING ACTIVITIES: | ||||||||
Net income | $ | 25,389 | $ | 11,488 | ||||
Adjustments to reconcile net income to net cashprovided by operating activities: | ||||||||
Depreciation | 7,007 | 6,232 | ||||||
Amortization of intangibles | 3,159 | 1,572 | ||||||
Non-cash inventory charge (1) | 1,409 | - | ||||||
Stock-based compensation | 1,465 | 1,779 | ||||||
Excess tax benefit on stock-based compensation | (1,057 | ) | (467 | ) | ||||
Loss (gain) on sale of assets | 69 | (24 | ) | |||||
Impairment and equity in net loss ofunconsolidated affiliate | - | 10,678 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (6,503 | ) | (9,745 | ) | ||||
Inventories | (774 | ) | 3,632 | |||||
Accounts payable | 3,056 | 2,452 | ||||||
Accrued expenses (including post retirement) | (6,455 | ) | (4,619 | ) | ||||
Accrued payroll and severance | (12,762 | ) | (7,319 | ) | ||||
Accrued taxes | 1,153 | (640 | ) | |||||
Prepaid expenses and other | (3,647 | ) | 1,026 | |||||
Net cash provided by operating activities | 11,509 | 16,045 | ||||||
INVESTING ACTIVITIES: | ||||||||
Purchases of property, plant and equipment | (6,423 | ) | (5,453 | ) | ||||
Acquisition of businesses, net of cash acquired | (52,000 | ) | - | |||||
Purchase of short-term investments | - | (8,478 | ) | |||||
Proceeds from sale of assets | 15 | 9 | ||||||
Net cash used in investing activities | (58,408 | ) | (13,922 | ) | ||||
FINANCING ACTIVITIES: | ||||||||
Proceeds of revolving credit facility | 75,000 | 15,000 | ||||||
Payments of term loan | (1,250 | ) | - | |||||
Payments of revolving credit facility | (8,000 | ) | (5,000 | ) | ||||
Debt issuance costs | (108 | ) | - | |||||
Cash dividends paid | (4,944 | ) | (4,410 | ) | ||||
Proceeds from exercise of stock options | 3,676 | 5,283 | ||||||
Excess tax benefit on stock-based compensation | 1,057 | 467 | ||||||
Net cash provided by financing activities | 65,431 | 11,340 | ||||||
Effect of exchange rate changes on cash and cashequivalents | (3,918 | ) | (1,972 | ) | ||||
Increase in cash and cash equivalents | 14,614 | 11,491 | ||||||
Cash and cash equivalents at beginning of period | 305,192 | 235,404 | ||||||
Cash and cash equivalents at end of period | $ | 319,806 | $ | 246,895 | ||||
(1) Purchase accounting adjustment related to acquisitions.
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