EXHIBIT 99.1
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[LITTELFUSE LOGO] NEWS
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Littelfuse, Inc.
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NEWS RELEASE 800 East Northwest Highway Des Plaines, IL 60016
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(847) 824-1188 - (847) 391-0894 - FAX #
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CONTACT: PHIL FRANKLIN,
VICE PRESIDENT, OPERATIONS SUPPORT & CFO (847) 391-0566
LITTELFUSE REPORTS RECORD SALES AND CASH FLOW FOR SECOND QUARTER
DES PLAINES, ILLINOIS, AUGUST 9, 2006 - Littelfuse, Inc. (NASDAQ/NGS:LFUS)
today reported second quarter 2006 results which included record sales and cash
flow from operating activities.
Second Quarter Highlights
- - Sales of $137.9 million for the second quarter of 2006 were up 19% compared
to the prior-year quarter due to strong performance across all geographies.
Electronics end markets were particularly strong, while the automotive and
electrical markets also contributed to the increase. Sales grew 10%
sequentially (9% excluding a partial quarter of sales from the Concord
Semiconductor acquisition) compared to guidance of 5% to 8% sequential
growth.
- - Diluted earnings per share were $0.02 for the second quarter of 2006
compared to $0.19 per diluted share for the second quarter of 2005.
Earnings for the second quarter of 2006 included pre-tax charges of $17.1
million and $2.8 million related to the closure of the Ireland plant and
write-down of Heinrich real estate in Germany, respectively. Earnings also
included a tax benefit of $2.8 million, partially offset by tax charges of
$0.9 million. The tax benefit related to the recognition of certain net
operating losses acquired as part of the Teccor acquisition.
- - Adjusted operating margin (see Supplemental Information schedule) improved
to 12.4% in the second quarter of 2006 compared to adjusted operating
margin of 7.3% for the second quarter of 2005.
- - Cash flow from operating activities was $25.7 million for the second
quarter of 2006 compared to $12.1 million for the prior year quarter. This
reflects improvements in profitability and working capital performance.
- - The book-to-bill ratio for electronics for the second quarter of 2006 was
1.03. This is down from 1.17 for the first quarter but still indicative of
a generally healthy market environment.
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- - Overall capacity utilization for electronics is currently running at
approximately 85%, with capacity utilization for Teccor products also at
about 85%.
- - The company has announced five acquisitions so far in 2006. SurgX, Concord
Semiconductor, Catalina and SRC have all closed. The Song Long transaction
is awaiting Chinese government approval and is expected to close in the
fourth quarter of 2006. These acquisitions are expected to add over $10
million of sales in the second half of 2006 and should in the aggregate be
modestly accretive to earnings.
Second Quarter Operating Results
Higher sales in the Americas and Europe continue to be driven by
increased demand from broadline electronic distributors, reflecting strength in
the telecom and general electronics end markets. To a lesser extent, increased
electrical sales contributed to the Americas sales growth and higher automotive
sales contributed to the gains in Europe. The increase in Asia sales was due
primarily to strong consumer electronics and telecom demand in Greater China and
increased consumer electronics sales in Japan.
"It was a great quarter on many fronts," said Gordon Hunter, Chief
Executive Officer. "We set new records for sales and cash flow. Our earnings,
excluding special charges, were outstanding. We continue to make small but
strategic acquisitions which add to our capabilities and improve our market
position. We established a clear path forward to move the varistor product line
to China. And finally, we are making excellent progress on the Heinrich
integration and other critical cost reduction initiatives."
"As expected, our operating margin for the second quarter, excluding
special charges, was similar to the first quarter as the favorable operating
leverage from increased sales was offset by higher commodity prices," said Phil
Franklin, Chief Financial Officer. "We have implemented price increases that
will partially offset these higher commodity prices, but because of existing
contracts, some of the largest increases will not take effect until late this
year or early next year."
Second Half Outlook
- - Third quarter sales are expected to be up 0% to 3% sequentially reflecting
the recent acquisitions. Operating margin for the third quarter is expected
to be somewhat lower than adjusted operating margin for the second quarter
due to higher commodity prices and temporary cost increases related to
plant, warehouse and office consolidations which will be mostly complete by
the end of the year. Diluted earnings per share for the third quarter are
expected to be in the range of $0.45 to $0.50
- - The fourth quarter is expected to show the typical seasonal sales decline
of about 5% sequentially. Although we currently see no signs of a slowdown,
there is some risk of an electronics distributor inventory correction
before the end of the year if the global economy slows.
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- - The effective tax rate for the second half of the year could vary
significantly from quarter to quarter, but is expected to average about
35%. We expect the 2007 effective tax rate to be in the 30% to 35% range.
Conference Call Webcast Information
Littelfuse will host a conference call today, Wednesday, August 9, 2006
at 11:00 a.m. Eastern/ 10:00 a.m. Central time to discuss the second 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
September 30, 2006 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 $467.1 million in 2005, 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(R), Wickmann(R) and Pudenz(R) 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.
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"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.
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LITTELFUSE, INC.
Sales by Geography and Market*
(Dollars in millions)
SECOND QUARTER YEAR-TO-DATE
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2006 2005 % CHANGE 2006 2005 % CHANGE
---- ---- -------- ---- ---- --------
GEOGRAPHY
Americas $ 57.9 $ 49.4 17% $ 112.5 $ 99.6 13%
Europe 29.0 24.3 19% 56.8 51.4 11%
Asia-Pacific 51.0 42.0 21% 94.3 78.4 20%
-------- -------- ------ -------- -------- ------
TOTAL $ 137.9 $ 115.7 19% $ 263.6 $ 229.4 15%
======== ======== ====== ======== ======== ======
SECOND QUARTER YEAR-TO-DATE
------------------------------------ ------------------------------------
2006 2005 % CHANGE 2006 2005 % CHANGE
---- ---- -------- ---- ---- --------
MARKET
Electronics $ 94.8 $ 75.0 27% $ 178.8 $ 147.8 21%
Automotive 31.6 29.8 6% 62.6 60.7 3%
Electrical 11.5 10.9 6% 22.2 20.9 6%
-------- -------- ------ -------- -------- ------
TOTAL $ 137.9 $ 115.7 19% $ 263.6 $ 229.4 15%
======== ======== ====== ======== ======== ======
* Certain prior year amounts have been reclassified to conform to the current
year presentation. Amounts exclude Efen.
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LITTELFUSE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
<Table>
<Caption>
July 1, 2006 December 31, 2005
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ASSETS:
Cash and cash equivalents .............................. $ 34,780 $ 21,947
Receivables ............................................ 96,498 80,303
Inventories ............................................ 65,831 63,423
Deferred income taxes .................................. 12,946 11,927
Assets held for sale (Efen) ............................ - 17,633
Other current assets ................................... 11,406 7,936
-------- --------
Total current assets ................................... 221,461 203,169
Property, plant, and equipment, net .................... 131,692 125,493
Intangible assets, net ................................. 19,177 14,742
Goodwill ............................................... 69,038 54,440
Investments ............................................ 5,328 5,590
Long-term deferred tax asset ........................... 6,653 -
Other assets ........................................... 856 497
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Total assets ....................................... $454,205 $403,931
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LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable ....................................... $ 24,798 $ 20,457
Accrued payroll ........................................ 16,430 20,128
Accrued expenses ....................................... 14,140 8,141
Accrued severance ...................................... 26,048 7,866
Accrued income tax ..................................... 21,507 9,920
Liabilities held for sale (Efen) ....................... - 6,722
Current portion of long-term debt ...................... 24,524 26,682
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Total current liabilities .............................. 127,447 99,916
Long-term debt ......................................... 1,605 -
Deferred income taxes .................................. - 1,879
Accrued post-retirement benefits ....................... 23,407 19,268
Other long-term liabilities ............................ 5,412 5,658
Minority interest ...................................... 143 144
Shareholders' equity ................................... 296,191 277,066
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Total liabilities and shareholders' equity .......... $454,205 $403,931
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Common shares issued and outstanding
of 22,335,039 and 22,229,288,
at July 1, 2006, and December 31, 2005, respectively
</Table>
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LITTELFUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data, unaudited)
For the Three Months Ended For the Six Months Ended
------------------------------- -------------------------------
JULY 1, July 2, JULY 1, July 2,
------- ------- ------- -------
2006 2005 2006 2005
---- ---- ---- ----
Net sales ..................................... $ 137,941 $ 115,693 $ 263,552 $ 229,450
Cost of sales ................................. 106,652 80,576 187,463 157,112
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Gross profit .................................. 31,289 35,117 76,089 72,338
Selling, general and administrative
expense ................................... 28,599 23,538 54,421 48,999
Research and development expenses ............. 4,790 4,246 9,465 8,525
Amortization of intangibles ................... 591 434 1,111 1,065
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Total operating expense ....................... 33,980 28,218 64,997 58,589
Operating income (loss) ....................... (2,691) 6,899 11,092 13,749
Interest expense .............................. 359 568 772 1,041
Other income .................................. (939) (96) (1,510) (227)
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Earnings (loss) from continuing
operations before minority interest
and income taxes .......................... (2,111) 6,427 11,830 12,935
Minority interest ............................. - (5) - 2
Income taxes (benefit) ........................ (2,560) 2,118 2,598 4,333
--------- --------- --------- ---------
Earnings from continuing operations ........... 449 4,314 9,232 8,600
Discontinued operations (net of tax) .......... - (57) 588 96
--------- --------- --------- ---------
Net income .................................... $ 449 $ 4,257 $ 9,820 $ 8,696
========= ========= ========= =========
Net income per share:
Basic:
Continuing operations ................. $ 0.02 $ 0.19 $ 0.41 $ 0.38
========= ========= ========= =========
Discontinued operations ............... $ - $ - $ 0.03 $ 0.01
========= ========= ========= =========
Net income ............................ $ 0.02 $ 0.19 $ 0.44 $ 0.39
========= ========= ========= =========
Diluted:
Continuing operations ................. $ 0.02 $ 0.19 $ 0.41 $ 0.38
========= ========= ========= =========
Discontinued operations ............... $ - $ - $ 0.03 $ -
========= ========= ========= =========
Net income ............................ $ 0.02 $ 0.19 $ 0.44 $ 0.38
========= ========= ========= =========
Weighted average shares and equivalent
shares outstanding:
Basic ..................................... 22,328 22,423 22,293 22,453
========= ========= ========= =========
Diluted ................................... 22,693 22,613 22,612 22,681
========= ========= ========= =========
</Table>
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LITTELFUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
For the Three Months Ended For the Six Months Ended
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JULY 1, July 2, JULY 1, July 2,
------- ------- ------- -------
2006 2005 2006 2005
---- ---- ---- ----
Operating activities:
Net income .......................................... $ 449 $ 4,257 $ 9,820 $ 8,696
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation ................................... 8,688 7,511 14,900 14,152
Amortization ................................... 591 463 1,111 1,094
Stock-based compensation ....................... 1,251 - 2,704 -
Changes in operating assets and liabilities:
Accounts receivable ............................ (6,847) (4,908) (10,622) (6,435)
Inventories .................................... 4,055 4,006 496 4,951
Accounts payable and accrued expenses .......... 17,741 (1,971) 20,518 (9,234)
Prepaid expenses and other ..................... (197) 2,759 802 (1,014)
-------- -------- -------- --------
Net cash provided by operating
activities ..................................... 25,731 12,117 39,729 12,210
Cash used in investing activities:
Purchases of property and equipment ............ (4,797) (8,266) (9,400) (16,964)
Acquisitions of businesses ..................... (28,825) (991) (31,526) (1,019)
Sale of Efen ................................... 2,146 - 11,574 -
-------- -------- -------- --------
Net cash used in investing activities ............... (31,476) (9,257) (29,352) (17,983)
Cash provided by financing activities:
Proceeds from long-term debt ................... 16,500 11,895 22,858 26,951
Payments of long-term debt ..................... (8,924) (11,000) (25,298) (16,213)
Proceeds from repayment of notes
receivable, common stock ................. - 12 7 3,533
Proceeds from exercise of stock options......... 1,516 214 3,350 675
Purchase of treasury stock ..................... - - - (3,199)
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Net cash provided by financing activities ........... 9,092 1,121 917 11,747
Effect of exchange rate changes on cash ............. 983 (724) 1,539 (1,910)
-------- -------- -------- --------
Increase in cash and cash equivalents ............... 4,330 3,257 12,833 4,064
Cash and cash equivalents at beginning
of period ...................................... 30,450 29,390 21,947 28,583
-------- -------- -------- --------
Cash and cash equivalents at end of
period ......................................... $ 34,780 $ 32,647 $ 34,780 $ 32,647
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LITTELFUSE, INC.
SUPPLEMENTAL INFORMATION
(in thousands, except per share data, unaudited)
<Table>
<Caption>
July 1, 2006 July 2, 2005 April 1, 2006
------------ ------------ -------------
Net sales .................................................. $ 137,941 $ 115,693 $ 125,611
Cost of sales .............................................. 106,652 80,576 80,811
Special charges (1) .................................... (17,076) (1,600) (852)
--------- --------- ---------
Adjusted cost of sales ..................................... 89,576 78,976 79,959
Adjusted gross profit ...................................... 48,365 36,717 45,652
% of sales .............................................. 35.1% 31.7% 36.3%
Selling, general and administrative expenses ............... 28,599 23,538 25,822
Special charges (2) .................................... (2,764) - (1,206)
Stock-based compensation ............................... (1,251) - (1,453)
--------- --------- ---------
Adjusted selling, general and administrative
expenses ............................................... 24,584 23,538 23,163
Adjusted operating expenses ................................ 29,965 28,218 28,358
% of sales .............................................. 21.7% 24.4% 22.6%
Adjusted operating income excluding stock-based compensation 18,400 8,499 17,294
========= ========= =========
% of sales .............................................. 13.3% 7.3% 13.8%
OPERATING INCOME (LOSS) .................................... (2,691) 6,899 13,783
SPECIAL CHARGES ........................................ 19,840 1,600 2,058
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ADJUSTED OPERATING INCOME .................................. 17,149 8,499 15,841
========= ========= =========
% OF SALES .............................................. 12.4% 7.3% 12.6%
</Table>
Note: The company believes that adjusted operating income is more indicative of
the company's ongoing operating performance than GAAP operating income since it
excludes charges that are related to closure of legacy operations.
Special Charges:
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(1) Special charges relate to Ireland severance for the period ending July 1,
2006, inventory and asset write-downs for the periods ending July 2, 2005
and Heinrich severance for the period ending April 1, 2006.
(2) Special charges relate to Heinrich real estate write-down for the period
ending July 1, 2006 and Heinrich severance for the period ending April 1,
2006.
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