LFUS - Earnings call transcript Q3 2018

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Operator

Good day, everyone. And welcome to the Littelfuse Third Quarter 2018 Conference Call. Today's call is being recorded. At this time, I will turn the call over to Head of Investor Relations, Trisha Tuntland. Please begin.

Trisha Tuntland

morning. Good the XXXX to conference third Littelfuse welcome earnings quarter call. And President today and and are me and CFO. Dave President With Vice Heinzmann, CEO Executive Meenal Sethna, This the investor quarter, section of our our morning site. release relations results Web copy earnings in a of third available is our we reported and for conference will be available webcast our Web A call of on today's also site.

our XX-Q Please statements. to involve significant Our more non-GAAP may review press remarks important discussion refer could the statements today's most today risks Also, and over this from the no Web to These cause Dave. financial provided to financial comparable will turn forward-looking information. expectations. Form GAAP release detail of will about measure these actual section obligation call and our include relations to We assume site. in any measures for today available forward-looking differ I earnings release now and uncertainties. XX-K is our forward-looking to that update risks materially measures. our our non-GAAP of in investor of A reconciliation the results

Dave Heinzmann

segments organic Trisha. solid as and Good morning, Industrial joining quarter for today. third momentum revenue X% growth. you, in Electronics we and thanks achieved Sustained results our Thank us everyone drove

was Our our $X.XX earnings XX% adjusted per end last share year. above of increase top the of guidance over and a

strong million. free another of generation. generated cash very drove quarter bringing position flow, cash of Our our to $XXX efforts million Year-to-date we’ve cash nearly $XXX

that I’ll the Meenal provide our flexibility year results. color digit on some five third to balance sheet double introduction, who to the provides turn With continue strategy. additional strong us delivering over will on financial Our with quarter call growth our brief

Meenal Sethna

Great, thanks Dave.

third our of from highlights some XXXX. Now quarter

both XX% growth our by and last year growth Electronics growing and Industrial XX%. organically. over of We segment quarter at million, segment was XX% the Organic sales led sales our at trajectory X% third $XXX with continued in

saw we Europe up of Automotive year-over-year China, X% both experienced Our market as which and builds. both weakness was segment car in in declines

record growing nearly another had last also sales, quarter IXYS year. million in $XXX over of Our XX%

our Electronics while XX.X% Foreign exchange took XX.X%, operating continued euro. a a segment, mainly operations our our margins Littelfuse acquired and a at from GAAP enhance operations. off our the foundation deployment operating growth, operating lean Chinese our the and as margins as existing a well our principles, improvements from and leverage adjusted operating point quarter. new in system. for finished With We of continues particularly were weaker in business our system RMB framework establishes volume for ongoing sales to from from saw growth, of capabilities

the XX% $X.XX, with diluted grew across strong margin year. year. last EPS was improving of was associated included EPS after noted, as execution last and IXYS grew I led synergy which $XX charges, the operational XX% mainly accounting over $X.XX, operating as and diluted integration million GAAP continued costs Growth was due performance Our Adjusted by to over in purchase business. the the restructuring, which It IXYS. tax acquisition well

rate was rate for and guidance. tax tax consistent the effective XX% Our XX.X% our quarter adjusted GAAP effective was our with

has this business. Let Overall, for to and weaker seasonal and normally margins margin limited XX.X%. continued Electronics and highlights in operating been was The We’ve me some to continued operating currency, foreign running quarter margin Auto seen sequential the IXYS business. provide integrate performance by the expected to unfavorable The pricing QX Electronics improvement a demand as China, additional historical our softness primarily year margin we averages increased leverage. exaggerated declines stronger at pressure. X.X%. volumes, contributed than finished due

during over production in are on an next quarter products our and new resources improving sensor new technology have launches business. product we last that also The needed launches We to is we focused automotive This the midst drop profitability. the across in and several quarters. noted the area few are that of contributed increased inefficiencies

last Our industrial basis segment achieved XX.X% operating versus points the quarter, margin year. for XXX improvement

the profitable with expand of growth performance pleased markets are continues to business new as the across ongoing margins. We

of earmarked We million operating continue flow to into quarter. at finished cash million We be due and growth. in We million. our of business capacity free for much cash the the the a of adding expenditures, quarter strong for reinvested cash which generator with $XXX $XX robust to flow back capital $XX was for

income. over this net far flow, free year, in generated a conversion and we’ve cash growth $XXX XXX% nearly So year million well XX% from last over

We the in payable days term. business, also through payment improved increased improvements pursue working continued our including IXYS capital to focus on

the capital this year, our allocation net a finished quarter Our on cash With at to $XXX EBITDA of well hand robust We cash gross strategy. with X.X from is on generation times. times aligned debt below million our our X.X position well basis. is leverage

XXX,XXX at $XXX below repurchased shares During per month October, the just we of share.

in our share philosophy to market. opportunistic and back the to more we when in past, they’re stated buyback feel we’ve As undervalued the we’re shares tends buy likely be our

is element priority on doesn’t capital acquisitions. buyback our an our share of change While it allocation strategy,

this allows to with to organic new broader range opportunities. Through third portfolio us acquisitions opportunities Overall, pleased to with breadth cultivate our expand grown continue quarter, very and strength to-date our our XX%. performance the The of sales We year. balance of we’ve explore our growth of funnel. acquisitions of we’re sheet a XX%

trends. been and with operating has And execution margin color for business over it driver Dave of key operational back our XX%. a more I’ll adjusted turn to for that, performance consistent market Our on

Dave Heinzmann

Electronics by and Organic XX%, North driven Meenal. for growth sales sales XX% start up $XXX broad-based strong quarter, million, recorded led Electronics Thanks, the our year-over-year, with performance strong was of segment. Asia. we in industry demand. by We’ll In America

across as distributors demand of excluding strengths bill inventories and heading increases We some the content slowing telecom, secular industrial exited their automotive continue to particular solid and electronics. X.XX, to We the and in the sell cloud electronic, driven our IXYS book in components data market seen We’ve a through, end at and see quarter year end. in passive business. rebalance third by orders center infrastructure recent

our of passive inventories to the range. overall expected at inventories our of higher end our typical range, be distributor maybe within continue While products

to to wins closely inventory a remain their driver our distributor continue for comes for products, of greener monitor it design connected global the megatrends electronics more world We When versus sell-through. safer, and the foundational business.

wins in sophistication in and require range be protect, for Our $XX goods and home safety of end for With sensors wide light had products. a US more a variety sensor our of design portfolio, last a to We to many control focus our efficiency the line across and wins quarter, ensure than acquisition our reach. Appliances appliances. of increasing new sensors generated markets. continue of temperature year's extends features growth million as us in of used and Sensor,

a Meeting of to a One manufacturer the is of standards design high cleaner our of connected positive for driving higher The wins product very was application. growth our volume wins the was technical this development new quarter vacuum in capabilities opportunities. devices the business global portfolio. expands and across

doorbell. we new had Internet-enabled video a For key for win a example,

space, does areas. of in to the process As connectivity data, that infrastructure one growth meaningful continues the store our and to content cloud and for grow drives the so strategic too need center which data demand

Protection infrastructure applications. We expand a to IXYS in wins electronics a acquisition customer, win XG one key had also for Circuit design IXYS opened familiar wireless well pump wind our key semiconductors had established had provide expand Littelfuse continues into opportunities upgrades particular key design the related to control, highly secured offering our the with The in example and industrial protect, We win efficiency locomotives, systems. our small was several our reach energy focus is hydroelectric The semiconductor We energy storage for IXYS global the quarter quarter as railways, wins cross-selling tremendous also for ongoing design reputation. door in electrified and storage This used we acquisition. systems to This vehicles. propulsion energy marine portfolio. win on a power see of products for generators. the the and our as drives portfolio. turbine just design This leverages broad well power oceangoing from systems, from to to

our continue $XX one for year, of us our and end synergy than phase force of integration, portfolio significant breadth be We the the By for rate new sales this leverage make we with consolidating allowing to to more partnerships us strides gives IXYS our targets. customers, the our towards distribution forward will complete million combined wins. XX% run

products to silicon a we high XXX% to completed carbide Another is total of for investment of industrial carbide, allows the these key a In win see growing end to and now conversion. our silicon significant the semiconductors wins carbide side Electronics motors strategic of in market build European had Semiconductor is products the our in and our We regions applications. meaningful of power efficient electric October, The acquisition portfolio enables material provide in with power for of very broad promising us market. automotive semiconductor more quarter Monolith that across own a the sizable available on power our design medium and Silicon to address design vehicles. focus area the of company. interest in electronics activity to we used a segment supplier

EV other several had also for applications. in China carbide charging wins design We silicon

in includes many specifically electronics content high for to core continue electronics, requirements strong needed electric We the designed traditional autos vehicles. and automotive see reliability which momentum in of products, our

several This and had such vehicle battery within electric management as wins systems on-vehicle we charging. quarter, design the space,

traditional controls, secured also and applications, safety body as such system We braking wins for systems. and powertrain engine management windowless more

Electronics segment, trends opportunities driving As on we the long-term I confident segment. remain the up across wrap growth the secular

remain greener markets connected the electronification solutions more end with takes need we our the they shape for in to well-positioned safer, customers we provide world. serve, and As

million segment cover sales quarter. Next, will of $XXX where the the automotive for had we I

Our on sales auto build. automotive flat X% increased global

production, business, the was China, OEM this third Automotive WLTP drive fuse opportunities content profitability sensors expectations. with Worldwide revenue and Vehicle soft a our growth of one the in Light negatively Procedure business. quarter, Testing in delayed by performed production in the but While significant impacted growth Europe, growth German achieved strong that last auto below program our year time a in our

we're new Meenal technology higher incurring with mentioned, As costs program launches. associated and

focused on improve the long-term will remained operating margin meeting profitability We our business, expectations. and

motors. We made CVP market gain traction content quarter products handling significant opportunity in for Our $XX in towards North in manufacturer automotive Japanese several safer, more design represents with region. fuse power light and commercial this had segment. vehicle of a than as wins for million in-roads a momentum look Asia We traditional high-growth truck connected a all more increasingly The automaker delivered wins the America quarter design drive vehicles across with protect a up products to geographies. The window also we greener to to our strong across and CVP. good our that business with win demand material revenue top or growth

sensors sensors clutch sensors, our in had growth we a won as trusted design quarters used with In opportunities. a manufactured North of wins systems, control climate power and in with we with one relationship as speed a solar for design had We’ve power and business we module, wins for dual talked For automotive a our this partner. used America distribution tailgates. trucks. strategic We win new built for become design In great about customer additional used also this previous added wins Europe company solar China, sensors semi-custom specialty well in sensor CVP, have position in transmission.

helping connections, fewer the and improving allows weight Our customer for lower overall reliability, solution costs. reducing

automotive build, modules, new this across in trends lineup. business beyond build. the to Beyond markets; car our will grow long-term sales one excess entire XX% relationships we drive the we we've confident growth great to switches that won meaningful leveraging Overall, and of opportunities broad end growing ruggedized and continue to vehicle portfolio successful power to-date design-in content year our car across secular see been to are customer of continue distribution solutions recently global

cover our Next, segment. we industrial will

quarter during Third impact quarter. the flat were business exiting sales of of our second the custom year-over-year, which reflects $XX million

gains applications share organic growth a and by we across to we Asia XX% performance and serve; made driven we we end outpace outside markets America, However, product Latin and in portfolio oil some distribution gas continue saw range America; the growth, industrial North North and by expanding center of driving of great data presence led the in growth markets the growth and our of is that solar region. wins driving in electronics channel; projects our America, rebounding Asia are across in the progress

in One in in offering, for design the of the quarter was be the our and China. to U.S. industrial protect data wins centers key higher which our customers' industrial fuse servers will at used power

seasonality these, IXYS normal applications recovery oil, of And expect continue and we all their mining, drive further are and all we base. segment, to do. our the industrial growth. expect Industrial portfolio and solar our to access we the industrial in we what for industries fourth for our heavier given ahead and EV is Looking market to in quarter. customer Longer-term, Across excellence participate businesses, to operational well-positioned broad solutions of core the established to gas

quarter, third this for year Manufacturing third our the Association were the important Asia recognized operations the consecutive by receiving recognition. During for we again in Excellence,

Following supported our In across wins than associates to our the X,XXX continuous on negative world. plants the award plant and trends Meenal. strategy teams on by Philippines Littelfuse are tremendous annualized by a our greener and three recognize markets, segments, I the drive of connected our of XXXX, summary, the the of Philippines our will over accomplishment. With pipeline their by footprint, double-digit our focused our I With more efforts improvement in the strong customers XXXX our ongoing recipient. congratulate well operations. and safer, remain to the award and across growth. global opportunities want and year, global this AME in serving our turn China AME more a new positioned commitment was teams driven healthy in an business end earnings this of that, sales and their five-year to we call execute

Meenal Sethna

Thanks Dave.

$XXX quarter growth to to XXX reported on environment, year. guidance sales on XXXX sales of foreign The current exchange fourth XX% Based the our and anticipate move rates organic last the the growth midpoint million of million. of regulatory guidance. for Let's X% and reflects we the over

range quarter, year. the effective We XX% guidance quarter from Earnings within in to business $X.XX our adjusted typically distributor to with volume sales a an XX% for the We slightly earnings see passives in the Electronics. quarter. led range segment. the slowing rebalancing by our expect rate from diluted fourth EPS of fourth overall per last quarter the this impacted The to over we're in deleveraging going adjusted with fourth $X.XX representing typically a XX% with share impact midpoint be Electronics into the tax assumes of declines are the seeing growth higher inventory

expense For expense of financial full-year we're amortization $XX approximately items, million. projecting and estimates approximately on specific of adjusted million $XX interest

range. XX.X% higher full-year of tax midpoint approximately the We XX%, of expect rate slightly than the prior our

we're after Our the and full-year of netting the XX% growth about growth, and from estimate $X.XX sales accretion interest organic tremendous also in a another expense IXYS dilution additional business include share projecting of from X% growth acquisition. In summary, rate. year

earnings continue grow to business. to while Trisha, generation, our confident up And our cash our in ability upon sales with executing questions. performance to our margins to-date, and reinvesting it flow the expand double-digit open We strategy. We're further and growth increase let's build for that,

Trisha Tuntland

please. question take Meenal. first our We'll Thanks

Operator

Instructions] [Operator question first of Christopher Our from Oppenheimer. comes Glynn

is line open. Your

Christopher Glynn

call. earlier bit You allocation about little the in priorities talked a capital

how of cost and in the is as ease acquisition reform, if What M&A seat sensors group? of a pipeline wondering terms your in repatriation a are structure complexities post strategy or now. that bit tax Just get you looks the back aligned right

Dave Heinzmann

and Chris, take let and on Meenal our I repatriation the general, me active. things. and very let In is of comments would funnel acquisition I'll those say comment sorts pipeline

gives sheet and acquisitions. us our strategic to We our at funnel freedom very look key think the expand I continue balance and to and explore flexibility

fit area So our for clearly, model looking we and continue opportunities in right strategy. the that are our and that

it backseat. particularly bit You probably think can space, place But automotive think, side, I the sensors specifically healthier about I on to a us be. But and the the necessarily general we’ve our wouldn't sensors, the backseat? that's a automotive into focus opportunity. within on take targeting takes that a as industrial we’re narrowed does say asked or that see an sell also for areas electronics overall, we specific do space

you pipeline. bit can sensor of in of Meenal, still our little about the maybe repatriation? the certainly, So acquisitions funnel part and are challenge talk a are

Meenal Sethna

plans did cash Chris bring year I to of cash the in early of on this have repatriated IXYS half in we We that wanted the we back. of million this we the mentioned year acquisition So $XXX as put overseas. first year earlier earlier from that part over together

Given the looking business, of round strength the our doing cash our to same color the and of on we’re now little in next add call position the January and be a at plans we’ll that. bit more

Christopher Glynn

very a then And electronics. question on broad

by pretty firm revenue the IXYS it as channel within and Just breakout recurring rates as the is partners a similarly gets been thoughts base downstream notion therefore for a revenue baseline, electronics? about consumed on thought that the and your run largely

Dave Heinzmann

for our about semi conductor, want the little where challenged of three I higher normal end look rebalance optimistic year leading that. the of passives, at think the and bit. And business, we Clearly, call things business channels, in of distributors flowing know managing and a what through I and the would end heavy which their through, inventory critical to two electronics probably look our are for sell is at do end matching stories core in spend years into our the specific demand positions am been or We they rates we’re our that to the has talk that they're drivers and a a quite pretty we the and particularly last like pretty back us. good. that continue about energy And range. that the amount time to our distribution driving look as content say not secular strong to lot market I of and to have times distributors continued is around inventories at do pretty that.

challenges that there. little sell orders, distribution don't overall, is the with near-term or we through is the guidance. XX-XX which in a we see see we in direct IXYS reflected in sales. that our are But those So between a of different and bit seeing is softness problems more fact split IXYS bit a

and that and some end strong one probably probably finding very the standpoint. have pure And see a with continue changing little areas color bill base will through get book So measure markets flow to visibility noisier a a to because to a we on, a may exactly case, we we of backlogs little maybe in customers But thing in type to order and bit metric patterns use year. little industrial constrained the what capacity is and changing IXYS end channel, in to the demands out of our better are true that orders as as the are, give more as customer book metric send still things customers. the a course we’re they

electronics they the off agreements, automotive really one use orders don’t do system. channels, orders Our scheduling customers do actually they who in may -- scheduling

a it's the to today pull little exact So, measure of noisier that and from demand. as trying

Operator

from Fox Research. comes of Cross question Our next Steven

Your line is open.

Steven Fox

I and volumes buying the much you breakout First in was follow-up. then have and was margin you question, progressions quarter-over-quarter. versus related takes? how just the of the And been wondering drove in rest I to that of versus what Can the else through then have the can rationale maybe walk it, anything in if a secondly, might Monolith terms acquisitions puts

Dave Heinzmann

Meenal ago and intended and acquisition was of years progression. Let Monolith a cover me cover as the that as question quarter-over-quarter really a in, a step was Monolith a started we couple in invested investing start-up the can start-up.

from milestones it ownership. their were We we milestones, and milestones really only the as planned standpoint. so outside production on further delivered founders on for would they production to and the a progression commitments achieve, technology technology a take them and investor was have beyond We

space. strong long-term very carbide in have potential of belief the We silicon

mid-range high-end key future clearly We of today, the have and the portfolio very power a that. for semiconductor side is end broad focused range silicon the element in high on of carbide a and power very

can And the the our side. see that, key power progression in cover so we electronics quarter. to Meenal it the critical very With on you and strategy

Meenal Sethna

the well. and would the operational about about half progression, specifics, of break start and business probably half, IXYS, margin efficiencies as to within business, get to increase harder due the I'd the continue Littelfuse it's the well some as improvement volumes IXYS legacy I in we say generally On synergy think to harder pass and to legacy say, throughput gets full in business, you if quarters but the as expansion integrate sequential out in we it you half around as IXYS realization margin due margin operational as to

Steven Fox

cited that's that that helpful. or the you Great, But the a just in as saw auto auto Electronics necessarily? And that also that segment. in I markets within where you really then some the would you segment, quick not imagined weakness Was have case so Auto of your serving the market? follow-up,

Dave Heinzmann

Steve a Electronics it's does really roll weakness segment. the mainly. great and electronics, We there, into a question, Yes, automotive lot really our and didn't of up which see

our I automotive Whereas the the and there's us, really, of driver it's is side, not particularly think automotive is steady of the the reason a content for global electronics electronics on story as in and share our business, that's in it's story. growth. for opportunity core some fusing driver quite Also our market share market well. a or

really electronics we So opportunities well as in see in both automotive the so as automotive side. didn't in growth electronics, have pullback any share content

Operator

Longbow Research. comes next And Thank from Harrison you. of Shawn question

open. is line Your

Shawn Harrison

on Few appetite of what's continue questions the you remainder to guys first stepping through the the in may, buyback buyback share up the see quarter? if that just I with October. to here, Nice

Meenal Sethna

we've talked past. As about in the

we part the Your have. that capital buyback is a absolutely allocation philosophy of

we you've from an our take to shares be likely our or company opportunistic think and a we see I it are to we a seen that going history, comes program, us are undervalued dip. little share not and to buy annual the to you're shares buyback think when more bit when more our has tend

and I context then acquisition would in share coming we we prioritize a of tend funnel for extra is philosophically look acquisition And maybe the how sheet cash and got that we've that's say, talked we'll buyback. how in up So the we've with funnel being as If ends so think along, it. to buyback, investors, balance. at take about general, on a the balance it

Shawn Harrison

of may. segment Okay, was initiatives dynamics? other kind in, investments I if to you're year-over-year versus volume how margins, growth decline two I point longer-term X making that that of much follow-ups, The the believe, tied auto in

Meenal Sethna

unexpected the both. Yes, well just this And I'd know say I a definitely resource-intensiveness when some declines would sensor the the bit automotive that some with we've inefficiencies maybe quarters saw then even just we're good -- production few little that legacy up the business, products unexpected the when and launches of you're end-market with chunk longer expected seen, even drove in think starting that it. with as we new doing. quarter of say of that well some in as technology business a out about we weakness and volume we new stretch

it probably to this quarter. say was I'd So both

Shawn Harrison

basis? as the at And kind on dollar R&D as significantly basis, of SG&A of a well quarter both and both then dollars should into sequentially, SG&A I lastly, think we both look if dollar fourth a R&D pretty how dropped on

Meenal Sethna

-- synergy Yes, I cases, right, we that the don't might full little see would pieces with other bit say know and little to mean sometimes of impact especially of quarters weaker impact. get some there's then see in I difference, IXYS -- with we with R&D, with from as in I there synergy I -- we're mentioned, currencies either a FX the there's starting much a the that

R&D adjusted for the and the really about year XXX somewhere around 'XXs year, full you you give range so. think perspective, G&A about full the if mid guide think I the I think the in or would from I an So

Operator

you. Thank

comes question from next Leiker David Baird. Our of

line open. Your is

Joe Vruwink

to I to X is in target that quarter, globally wanted X quarter ones that from X% target X% above because maybe big you two guess car outgrowth an you and out-performance points as What's maybe growth the of to I deviate to to organic X% fell I so that production well. arose during plan X% bridge organic in really throw growth as which context, -- there. i unpack the factors view X% automotive in growth Can midterm passenger the with good market. level in

by First on. month as off, China month we're QX, weaken

that second in have quarter. up So how down the thing was is, you what Europe, place maybe the beyond much in WLTP, And ended German destocking would there you to then XX% alluded took production anticipated?

you vehicles of to maybe -- well. adjusted it, German obviously can I'm quite an that basis, weighed with the So and just those but plan wondering some if closer content on are high probably organically? variance adjust you as explain on

Dave Heinzmann

And China these it's some a customers. still moving -- slightly the different Clearly local actually driver and distribution rest complex situation that to world fairly soft. of the which supply the with softness, right China a a channel remains in is Clearly, and now saw relatively pieces. we quarter the in flow chain of through versus products of that our some these key

world. take place versus other the might parts you So adjustment in might see a little of that China more inventory

little the than just decremented car growth, the build. a probably more that So

So that probably impacted.

-- was sizable run about, other we we last pretty and the a OEM. it is year that statements, for in in our one-time things I third rate of briefly had One our quarter last mentioned German prepared year talked the that effects,

quarter last by year, third to that. impacted comparative a as is so certainly And

I growth kind that is long-term prospects very content overlay, say in quite of strong market have overall, story growth so we hanging The clearly, hangs get still markets are particularly story with consistent still And would good. our we if about, continue in we The very in where there to good feel feel there you automotive end growth in we a the with in it. and little feel end the is -- confident there segment very particularly the automotive electronics. overlap, --

Joe Vruwink

most have models all their regards of the to all WLTP their alleviating What that seem that pressures the to exit been year Europe, in are this some the expect plant from customers and on automakers plates, would commented you have with they in calendar hearing most name specifically of impacted, certified.

an QX entering but to then maybe still maybe by impact, to QX QX into QX back normal. Does and improvement has normal that is an back to So support relative QX? your gross in

Dave Heinzmann

going WLTP on ahead the coming they -- and the a OEMs that inventory the show year. some us half X% there's challenged soft if see has the from in mean of look however, little is automotive bottleneck. of of a abnormal certainly continue in into nearing they're Yes, for of built how as next sitting our I we model to Yes, as is of the fourth overly back end look we're lot into rebounding they which year, up in their the fourth exactly some impacting some you've that's specifically, patterns testing build we're testing, quarter. it's got in inputs of, the of Europe, different amount as for Certainly, numbers. down things, to weakness do first of completion seeing lot of third-party that not quarter each of on. moving we been visibility kind in the In certainly out year. demand views, XXXX, some a of you previous still bit And the Overall, at quarter see sort Europe we we're the car

Joe Vruwink

and mid-teens one on if to expect and months customer were into into at ended be And from to might would place all experience it seems down a and recent point, the year. this implementing Are in the some the that your your positive can a purchase the a up it so like obviously -- if stimulus little if maybe dynamic, bit in think to to close been and China Do next fruition, to they but up like China, flat come that double-digits restocking that next plan, really in appears at selling to large impact rate it squeeze was XX lean flips sales where has for more of you'd cut and went business? being get I XXXX you different? you taxes following sudden alluded China inventories nearer year growing

Dave Heinzmann

Yes, I would our lean inventories say they're right. about right would think view particularly. I don't probably now, are

I'm would weeks ahead probably expect but pretty car and to so a bit, inventory. build up, the of expecting they're normalized picks I see down weeks crisp carrying that happen so certainly restocking pull-through car think certainly came as the pretty say they growth, and not on supply weeks today I'd not build third of fairly but maybe chain rapidly. little quarter, we during they're there, It's a some some

Operator

next of CL George Godfrey [Operator question Our King. Instructions] comes from

is open. line Your

George Godfrey

$XXX a them. before Really million probably and nice you they this running quarter, memory out IXYS, acquired if of performance $XX were quarter million serves,

You've million never growth table? synergy provided the business. core $XX quarterly basis the look But the or the X% but million that then, other if call, bringing revenue a target. $XX on on I say you're I a to million revenue at synergy is so the for And

Dave Heinzmann

they near-term synergies I we've seen growth in that backlog. think as acquired constrained They all their a against at we that of perform bulk there, when backlog. to the first very had we on of look ability IXYS, the it, revenue were strong very

would by them ability say So been more I throughput through generated and our of to the the IXYS bulk really our improvement work to has teams and with the factories. the teams drive

push level overly constraints, I of bigger think you things applications the you have driver to can't like new candidly, target some been the aggressively and trying the that's of that. when and step-up

So industrial constraints synergies doing to that's capacity flush growth, a a restrained product we capability, electronics wind core have do a to Littelfuse we example kind things space. where I the little if but begin company with of and of nice anything, one through because win new particularly turbines. that, as expect fundamental gave like bit been IXYS see set revenue that,

George Godfrey

thought the put of top add $XX probably of So line. the than there lot about synergy so your to at be in is the $XXX revenue the mouth, but words not the curve, time better on this while still more well million while to There's still you are come, the synergies you cost million. on to acquisition your mind down that

Dave Heinzmann

predict actually and the that's qualifications the of historically, of participated in takes side, to teams about of customer factories approvals. the long of that, because get be to part customer with business. the IXYS term, over the base, in But hard it's base, little to a this world IXYS long-term Timing automotive absolutely. where has we the in core is prepared handle IXYS handle time, time types at setup the auto our have automotive absolutely their bullish know very we potential continue growth portfolio, to a really not the really be Yes, we and real our point to but opportunities strong IXYS that

that So, big long we see driver. as a term, really

the revenue remain confident in to the synergies of businesses. continue We two

George Godfrey

if my X%automotive your build at What end X-year a And low we on on it the follow-up Thank for level to then looking there? could and you X% I'll to X%, the in hit X%. be the rate or That's for to great. another it to X% a midpoint that global work it the my what call say would is, taking question go assumption organic growth baseline of rates range time-frame, it way rate X% say, you the lowest with build is leave of questions. that global

Dave Heinzmann

sure, our GDP. build global baseline our assumption at that is grows about Yes, car over strategy, global time

build to So, into growth. to the build compare organic strategy we we the when car a X% in X% growth that long-term about X%

X%. So that's the assumption behind to the X%

Trisha Tuntland

questions. you, George your Thank for

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Littelfuse (LFUS) 31 Oct 182018 Q3 Earnings call transcript