Exhibit 99.1
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[LITTELFUSE LOGO] N E W S
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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 THIRD QUARTER FINANCIAL RESULTS
DES PLAINES, ILLINOIS, NOVEMBER 2, 2006 - Littelfuse, Inc.
(NASDAQ/NGS:LFUS) today reported results for the third quarter of 2006.
Third Quarter Highlights
- - Sales of $143.4 million for the third quarter of 2006 were up 17% compared
to the prior-year quarter. Sales increased in all geographic areas, with
particular strength in Asia. Electronics end-markets were the primary
contributors to the growth, while the electrical business grew modestly and
automotive was flat.
- - Diluted earnings per share were $0.42 for the third quarter of 2006
compared to $0.17 per diluted share for the third quarter of 2005. Earnings
for the third quarter of 2006 included pre-tax charges of $3.9 million (or
approximately $0.12 per share after tax) related to the last phase of the
Heinrich consolidation. These charges included $2.3 million of accrued
employee-related cost pursuant to contract obligations and $1.6 million of
non-cash asset impairment charges.
- - The effective tax rate for the third quarter of 2006 was 22%, due to a $1.2
million favorable tax reserve adjustment that reduced the effective tax
rate by 10 percentage points.
- - Adjusted diluted earnings per share (see Supplemental Information schedule)
were $0.48. This excludes the Heinrich charges and the one-time tax benefit
mentioned above.
- - Adjusted operating margin (see Supplemental Information schedule) was 11.3%
for the third quarter of 2006, compared to adjusted operating margin of
8.1% for the third quarter of 2005 and adjusted operating margin of 12.4%
for the second quarter of 2006.
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- - Another strong cash flow quarter brought year-to-date cash flow from
operating activities to $54.4 million. This has more than funded the $14.1
million in capital expenditures and four acquisitions totaling $37.6
million. Cash flow for the year 2006 is expected to be a Littelfuse record.
- - The book-to-bill ratio for electronics for the third quarter of 2006 was
.91. This is down from 1.03 for the second quarter and 1.17 for the first
quarter.
- - Overall capacity utilization for electronics held steady at about 85%, with
Teccor also continuing at about 85%.
Third Quarter Operating Results
The strong sales growth for the quarter and year to date has been
driven largely by the electronics business, which has performed well across all
geographies and all end-markets. However, the declining electronics book-to-bill
ratio indicates that these markets are slowing down. The electrical business
continues to grow steadily, while automotive has weakened and was flat for the
quarter.
"It was another good quarter for Littelfuse," said Gordon Hunter, Chief
Executive Officer. "We posted solid financial results and made excellent
progress on integrating our recent acquisitions and transitioning several
manufacturing operations to Asia. However, it is now becoming clear that our
electronic sales growth of 22% so far this year has outpaced the end-market
growth and resulted in some inventory build at distributors, contract
manufacturers and OEMs. Thus, the inventory correction, which we mentioned as a
possibility three months ago, now seems more certain."
"As expected, our adjusted operating margin for the third quarter
declined sequentially due to higher commodity prices, as well as higher costs
related to acquisition integration and plant and warehouse consolidation
activities," said Phil Franklin, Chief Financial Officer. "We have implemented
price increases that will partially offset the higher commodity prices, but
because of existing contracts, some of the largest increases will not take
effect until early next year."
"The next few quarters will be bumpy as we work through the electronics
inventory correction and complete a number of acquisition integrations and
manufacturing transitions," said Hunter.
Fourth Quarter Outlook
- Fourth quarter sales now look like they will be down at least 10%
sequentially, and maybe as much as 15%, reflecting an electronics
inventory correction on top of the normal fourth quarter seasonal
decline.
- At these sales levels, earnings per share would be expected to be in
the $0.18 to $0.25 range, reflecting negative operating leverage,
continued costs related to acquisition integrations and manufacturing
transitions and a temporary increase in the tax rate to 36-38%.
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"As we look out past the next few quarters, our future still looks
bright," said Hunter. "Our growth strategies are firmly in place and we have a
clear plan to achieve our long-term operating margin target of 15%. Barring a
more protracted slowdown than we currently see, we still believe that earnings
of $2.00 per share is within reach for 2007."
Conference Call Webcast Information
Littelfuse will host a conference call today, Thursday, November 2,
2006 at 10:00 a.m. Eastern/ 9:00 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, 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)
THIRD QUARTER YEAR-TO-DATE
----------------------------- -----------------------------
2006 2005 % CHANGE 2006 2005 % CHANGE
---- ---- -------- ---- ---- --------
GEOGRAPHY
Americas $ 55.4 $ 51.3 8% $167.9 $150.9 11%
Europe 27.9 23.6 18% 84.7 75.0 13%
Asia-Pacific 60.1 47.4 27% 154.4 125.8 23%
------ ------ ------ ------ ------ ------
TOTAL $143.4 $122.3 17% $407.0 $351.7 16%
====== ====== ====== ====== ====== ======
THIRD QUARTER YEAR-TO-DATE
----------------------------- -----------------------------
2006 2005 % CHANGE 2006 2005 % CHANGE
---- ---- -------- ---- ---- --------
MARKET
Electronics $101.1 $ 80.8 25% $279.9 $228.6 22%
Automotive 30.2 30.1 0% 92.8 90.8 2%
Electrical 12.1 11.4 6% 34.3 32.3 6%
------ ------ ------ ------ ------ ------
TOTAL $143.4 $122.3 17% $407.0 $351.7 16%
====== ====== ====== ====== ====== ======
* 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)
SEPTEMBER 30, 2006 December 31, 2005
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ASSETS:
Cash and cash equivalents .................................... $ 42,889 $ 21,947
Receivables .................................................. 99,929 80,303
Inventories .................................................. 66,187 63,423
Current deferred tax asset ................................... 12,960 11,927
Assets held for sale (Efen) .................................. - 17,633
Other current assets ......................................... 11,523 7,936
-------- --------
Total current assets ......................................... 233,488 203,169
Property, plant, and equipment, net .......................... 128,864 125,493
Intangible assets, net ....................................... 32,042 14,742
Goodwill ..................................................... 63,051 54,440
Investments .................................................. 5,422 5,590
Long-term deferred tax asset ................................. 11,360 -
Other assets ................................................. 860 497
-------- --------
Total assets ............................................. $475,087 $403,931
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable ............................................. $ 26,672 $ 20,457
Accrued payroll .............................................. 22,960 20,128
Accrued expenses ............................................. 9,665 8,141
Accrued severance ............................................ 28,245 7,866
Accrued income tax ........................................... 23,498 9,920
Liabilities held for sale (Efen) ............................. - 6,722
Current portion of long-term debt ............................ 25,927 26,682
-------- --------
Total current liabilities .................................... 136,967 99,916
Long-term debt ............................................... 1,863 -
Long-term deferred tax liability ............................. - 1,879
Accrued post-retirement benefits ............................. 21,082 19,268
Other long-term liabilities .................................. 5,368 5,658
Minority interest ............................................ 143 144
Shareholders' equity ......................................... 309,664 277,066
-------- --------
Total liabilities and shareholders' equity ................ $475,087 $403,931
======== ========
Common shares issued and outstanding
of 22,389,992 and 22,229,288,
at September 30, 2006, and December 31, 2005, respectively
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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 Nine Months Ended
-------------------------- -------------------------
SEPT 30, Oct 1, SEPT 30, Oct 1,
-------- ------ -------- ------
2006 2005 2006 2005
---- ---- ---- ----
Net sales ................................... $ 143,471 $ 122,266 $ 407,023 $ 351,716
Cost of sales ............................... 96,386 87,957 283,849 245,069
--------- --------- --------- ---------
Gross profit ................................ 47,085 34,309 123,174 106,647
Selling, general and administrative
expense ................................. 29,174 25,513 83,595 74,512
Research and development expenses ........... 4,634 4,257 14,099 12,782
Amortization of intangibles ................. 909 436 2,020 1,501
--------- --------- --------- ---------
Total operating expense ..................... 34,717 30,206 99,714 88,795
Operating income ............................ 12,368 4,103 23,460 17,852
Interest expense ............................ 480 587 1,252 1,628
Other income ................................ (117) (2,988) (1,627) (3,215)
--------- --------- --------- ---------
Earnings from continuing
operations before minority interest
and income taxes ........................ 12,005 6,504 23,835 19,439
Minority interest ........................... - (40) - (38)
Income taxes ................................ 2,645 3,423 5,243 7,756
--------- --------- --------- ---------
Earnings from continuing operations ......... 9,360 3,121 18,592 11,721
Discontinued operations (net of tax) ........ - 650 588 746
--------- --------- --------- ---------
Net income .................................. $ 9,360 $ 3,771 $ 19,180 $ 12,467
========= ========= ========= =========
Net income per share:
Basic:
Continuing operations ............... $ 0.42 $ 0.14 $ 0.83 $ 0.52
========= ========= ========= =========
Discontinued operations ............. $ - $ 0.03 $ 0.03 $ 0.04
========= ========= ========= =========
Net income .......................... $ 0.42 $ 0.17 $ 0.86 $ 0.56
========= ========= ========= =========
Diluted:
Continuing operations ............... $ 0.42 $ 0.14 $ 0.82 $ 0.52
========= ========= ========= =========
Discontinued operations ............. $ - $ 0.03 $ 0.03 $ 0.03
========= ========= ========= =========
Net income .......................... $ 0.42 $ 0.17 $ 0.85 $ 0.55
========= ========= ========= =========
Weighted average shares and equivalent
shares outstanding:
Basic ................................... 22,347 22,441 22,308 22,449
========= ========= ========= =========
Diluted ................................. 22,504 22,626 22,440 22,671
========= ========= ========= =========
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LITTELFUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
For the Three Months Ended For the Nine Months Ended
-------------------------- -------------------------
SEPT 30, Oct 1, SEPT 30, Oct 1,
-------- ------ -------- ------
2006 2005 2006 2005
---- ---- ---- ----
Operating activities:
Net income ............................................. $ 9,360 $ 3,771 $ 19,180 $ 12,467
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation ...................................... 8,299 7,547 23,199 21,699
Amortization ...................................... 909 496 2,020 1,590
Stock-based compensation .......................... 1,199 - 3,903 -
Changes in operating assets and liabilities:
Accounts receivable ............................... (3,292) (2,618) (13,914) (9,053)
Inventories ....................................... (104) 1,894 392 6,845
Accounts payable and accrued expenses ............. (805) 3,236 18,686 (5,998)
Prepaid expenses and other ........................ 98 796 900 (218)
-------- -------- -------- --------
Net cash provided by operating activities .............. 15,664 15,122 54,366 27,332
Cash used in investing activities:
Purchases of property and equipment ............... (4,716) (4,979) (14,116) (21,943)
Acquisitions of businesses ........................ (6,116) (398) (37,642) (1,417)
Sale of Efen ...................................... - - 11,574 -
-------- -------- -------- --------
Net cash used in investing activities .................. (10,832) (5,377) (40,184) (23,360)
Cash provided by (used in) financing activities:
Proceeds from long-term debt ...................... 12,415 19,729 35,273 46,680
Payments of long-term debt ........................ (10,637) (23,901) (35,935) (40,114)
Proceeds from repayment of notes
receivable, common stock ...................... - - 7 3,533
Proceeds from exercise of stock options ........... 1,607 3,075 5,984 3,750
Excess tax benefit on share-based
compensation .................................. 408 - 408 -
Purchase of treasury stock ........................ (652) (6,761) (652) (9,960)
-------- -------- -------- --------
Net cash provided by (used in) financing activities .... 3,141 (7,858) 5,085 3,889
Effect of exchange rate changes on cash ................ 136 (201) 1,675 (2,111)
-------- -------- -------- --------
Increase in cash and cash equivalents .................. 8,109 1,686 20,942 5,750
Cash and cash equivalents at beginning
of period ......................................... 34,780 32,647 21,947 28,583
-------- -------- -------- --------
Cash and cash equivalents at end of
period ............................................ $ 42,889 $ 34,333 $ 42,889 $ 34,333
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LITTELFUSE, INC.
SUPPLEMENTAL INFORMATION
(in thousands, except per share data, unaudited)
Sept 30, 2006 Oct 1, 2005 July 1, 2006
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Net sales ........................................ $ 143,471 $ 122,266 $ 137,941
Cost of sales .................................... 96,386 87,957 106,652
Special charges (1) .......................... (2,161) (4,798) (17,076)
--------- --------- ---------
Adjusted cost of sales ........................... 94,225 83,159 89,576
Adjusted gross profit ............................ 49,246 39,107 48,365
% of sales ................................... 34.3% 32.0% 35.1%
Selling, general and administrative expenses* .... 29,174 25,513 28,599
Special charges (2) .......................... (1,730) (1,035) (2,764)
--------- --------- ---------
Adjusted selling, general and administrative
expenses ..................................... 27,444 24,478 25,835
Adjusted operating expenses ...................... 32,987 29,171 31,216
--------- --------- ---------
% of sales ................................... 23.0% 23.9% 22.6%
Adjusted operating income ........................ 16,259 9,936 17,149
% of sales ................................... 11.3% 8.1% 12.4%
Interest/other ................................... 363 (2,441) (580)
Gain on sale of LCFab equity investment........ - 1,400 -
--------- --------- ---------
Adjusted interest/other .......................... 363 (1,041) (580)
Adjusted income before tax ....................... 15,896 10,977 17,729
Income tax expense ............................... 5,087 3,842 6,205
--------- --------- ---------
Effective rate ................................ 32.0% 35.0% 35.0%
Adjusted net income .............................. $ 10,809 $ 7,135 $ 11,524
========= ========= =========
Adjusted earnings per share ...................... $ 0.48 $ 0.32 $ 0.51
========= ========= =========
Diluted shares ................................... 22,504 22,626 22,693
--------- --------- ---------
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.
* Selling, general and administrative expenses includes stock-based compensation
expense of $1,199 and $1,251 for the period ended September 30, 2006 and July 1,
2006, respectively.
Special Charges:
(1) Special charges relate to asset write-downs and accrued employee-related
cost pursuant to contract obligations for the period ended September 30,
2006, Ireland severance for the period ended October 1, 2005 and Ireland
severance for the period ended July 1, 2006.
(2) Special charges relate to asset write-downs and accrued employee-related
cost pursuant to contract obligations for the period ended September 30,
2006, an accounts receivable write-down related to Delphi Corporation's
bankruptcy filing for the period ended October 1, 2005 and a Heinrich real
estate write-down for the period ended July 1, 2006.
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