LFUS - Earnings call 3 2023 | Littelfuse, Inc.

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Operator

Good morning, ladies and gentlemen. Welcome to the Littelfuse Third Quarter 2023 Earnings Conference Call.

[Operator Instructions]

And now at this time, I would like to turn the call over to the Head of Investor Relations, Mr. David Kelly. sir. ahead, go Please

David Kelly

and Slide and Call. the Dave With and Vice and everyone, our results XXXX quarter, third Heinzmann, Third Earnings CEO; and President available also website. Please website. of Executive Sethna, of A our Conference me Meenal we is today's and for be Relations our Investor X welcome conference slide morning, reported Littelfuse release copy the for to to Quarter section will available webcast advance on a presentation President call earnings CFO. Yesterday, in Good today disclaimers. of are our

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

David Heinzmann

David. Thank and today. thanks Good morning, you, for joining us

understanding David you start at as in part know brings continue and a new Investor fostering research Please summary, X. a and strong of us shareholder delivering in welcome Relations, that, of we already to were strong Slide welcome drive his David in Head Before expect our valuable relationships sell-side with we'll growth begin, let's of industry David. With our our like to I continue many business warm extending with would coverage. David join value. the investors we insights where and I of to I prior a Jefferies, Kelly. a equity from role

both as our solid QX guidance. Our teams sales results prior exceeded and global delivered earnings

macro strong significantly performance Secular market pleased model cycles. This and content diversification our connectivity themes, profitability, performance, strong performance and including challenging underlying business overall Slide softness pockets and We're continued and environment. destocking execution, continued our financial ongoing on year-to-date end-market a reflects of resilient Our with favorable were improved, channel the strong fundamentals reflects ongoing despite momentum within versus growth growth drive organic to safety past trajectory. our X. sustainability, our yielding continue

on further want our for well have our acquisitions and recent work. balanced remain capabilities while our commitment technology and positioned Our to exposure our diverse deliver expanding We strategy. unwavering end-market global long-term persistent And hard complementing market their leadership. teams I thank our to

across our a channels. across continue Let distribution electronics destocking what me quarter, on start view our markets. see we with vehicle inventory seeing Through the we to commercial and third are

electronics remains believe below some X. Our OEM while also book-to-bill have our working we are And of through we limited reductions. inventory visibility, customers

to next order we inventory continue rates. While destocking into year, to levels inventory expect normalized expect stabilize, we as return to

with Starting varying our across a Regarding demand we're base. customer markets. electronics markets, patterns seeing end broad

well of We in continue pockets devices datacom. softness personal to see as and consumer as

applications. by impact In pockets strike of offsetting growth quarter, in supplies industrials, driven renewables, infrastructure, had from finally, low- demand. And we demand both while and the power and automotive industrial a softer benefited solid, remains in safety, UAW modest the high-voltage

expanding we as market and challenging XXXX. Broadly, in our performance the well from supports return variable year-to-date China, cash growth saw design benefit fortify strongly double-digit XX% expect continue remains We end-market cadence during upon environment within expansion launches, a as and across positions, led by a above a believe content remain design the we our we and long-term Despite generation. from environment, win benefiting to current secular through and consistent car macro range. are growth to our we our build quarter, build growth robust, content which capabilities, in automotive diversify macro Our and our targeted is we program wins our reflected to our exposures, continue margin in execution robust outgrowth. this outgrowth. activity robust invested our delivering Customers design is portfolio,

current the confident when in environment, disruptions We challenging year we experienced and a in robust outgrowth reflecting XXXX, despite For exceed opportunity delivered our XXXX. well-positioned last down-cycles cost operating we margin full and remain and expect margins to XXXX resiliency we market the structure. macro

future across Our value. to continue ability deliver growth flow and outsized portfolio, us to drive long-term strong through cycles our investing shareholder enables cash for

Now the let's during quarter. move on wins to third business design

in industrial on funnel multi-technology build leveraged the of markets secured new wins. wide and a win X, energy We end a global continue our range solutions-focused and opportunities to of robust region. design Slide storage secured solar business win design For in deliver portfolio EMEA a and a we to India, for product

across theme us, applications from safety Indonesia a wins wins energy key the an increasingly need a secured safeguards for for America. Taking industrial world. growth also design in long-term the higher back, in including North electrified remains We industrial power safety given and step sector, electrocution against

Turning X. markets transportation Slide end to the on

safety. by and ongoing sustainability, We greater see strong continue meaningful connectivity a driven push content funnel of to the opportunities towards

which current quarter. leveraging business new low- infrastructure OEM were For inverter systems our by portfolio. applications. C&K in both key platforms, sensor new module success coming EV offerings in and An Switches offerings, applications. our telematics online area from for battery won particularly for seeing for drive the business EVs secure with a management are of opportunities and help vehicle where China helping new high-voltage we launch is new and a We win wins passenger vehicles, are Momentum the driver several programs product innovative design EV-charging

complementary a our to from will the leveraging that conjunction from acquisition of technologies a for win revenue software multi-technology portfolio, great Within example vehicle synergies. our secured in EV with medium-duty commercial we utilize space, Embed drive truck hardware legacy

win South for we Japan, portfolio China. In and applications to new business from were for and construction to vehicle new and leverage products America won and business reliable able rugged of also the We applications. our commercial some in bus truck specialty Carling switch

to Slide general end seeing tools, to We set on X. design globally a markets. door we're openers, range multi-technology a of and garage design Moving of electronics wins end diverse markets, be wins, broad power secured activity and robust, other across continues including design appliances electronics. In

with end We and in continue markets equipment to see globally. medical growth security wins

strong. Our geographies, end which meaningful extensive success and remain We've a across global applications our of diverse design reach. and momentum markets, capabilities in achieved range securing wins underscores

accelerating of next-generation with collaboration products development has teams our played design role initiatives. close and engineering customers' Our in a pivotal the

will turn to new strategic and outlook. activities the to the continue over continue through to our organically provide additional growth bolstered now positioned are we to As well grow long-term on financial by business acquisitions, strategy. I Meenal call color we on performance executing our

Meenal Sethna

Adjusted morning, turn than foreign our appreciate high today. XX% exceeded operating our $X.XX continued stronger with through operating us margins down finished Adjusted Please and you our GAAP quarter as guidance, of and Acquisitions working was $X.XX. Slide growth. GAAP third several diluted exchange organically Dave. $XXX our quarter. and driven Good XX.X% of per X% supported backlog we end million to the down at X% joining sales XX margins Revenue launches. Thanks, in were was in product year. to start of we the everyone, results. Revenue diluted EBITDA while EPS customer higher added projections the earnings XX%. was adjusted share margins by last were performance. XX.X%, quarter versus and

$XXX and flow. over also EBITDA we million for We've generated million in was and $XXX was effective conversion resiliency our effective tax GAAP furthering operating quarter, net operating XX%. execution our business cash future while our XX%. The free pleased rate in in XXX% margins spending of rate resulting flow, as high-growth adjusted We're flow we rate operating XX.X%, margins in free adjusted adjusted continued opportunities cash of income. cash with XX.X% business a in $XXX of to and million year-to-date shined vectors, tax multiple Year-to-date, in pipeline. be prudent Our this to generated strength across model the investments and

year seasonality, inventory free quarter of cash inventory million far testament days. With and XX quarter XXX% target our cash on another by of this net as our conversion focus investments. debt-to-EBITDA on strong overall days continuing our lowered growth full management. inorganic expect ahead and year, both cash of net working earnings, capital percentage to lower are organic $XX fourth typical We we year generation, inventory income. leverage hand We've X.Xx, capacity so and of own our to aligned despite maintained for last a a to ongoing our provide ample reduced at also We've

over maintained to at down expected, were to down amidst had we on through margins Sales rebalancing. strong over semiconductor in work XX. and backlog to continued quarter. segment Operating market Please margins and sales continue Moving than with turn XX% XX%. stronger Slide our XX% We've end profitability year-over-year adjusted EBITDA customers the organically. a inventory results. dynamic Electronics environment and were profile we as XX% the

on by X% Trends this Transportation the varied organic to overall Slide quarter. were Sales on segment an XX. Turning X% down down and again end basis. market

particularly supported Our their on platform several as XX% customers business across passenger grew launches, we vehicle China.

and our across inventory markets. commercial well are as We're vehicle the product XX%, extending adjusted margins improved business Segment starting among continued our China to from we vehicle passenger Our our business, margin optimize the commercial XX%. footprint customer work actions destocking weakness operating with largely X.X% business. Across structure continued across mix. reduction to was down reducing partners to benefits cost vehicle as and also distribution EBITDA over see sequentially our and

mid-teens will We and near the While resources segment our refocus sales' these will XX, sales up toward were profitability. actions anticipate this progress we to segment margin Slide X% our on reduce to our target. Across expect sustain X% growth organically. in reduce industrial up and term, our amplify

capital as wins solar, across softness areas fast in We tech were profitability over bit residential We've and we growth drive customers XX%. Sales adjusted mining, through excess XX% equipment a working continue than softer as charging with expected margins industrial strong EV seeing market operating inventory. to as and margins in infrastructure. and such manufacturing markets end over well we some some just as started clean EBITDA HVAC maintained

Turning XX. Slide the to on forecast

versus sales sequentially. million. that's $XXX million the to in a year, the expect and $XXX quarter of We range XX% At fourth decline XX% of last midpoint,

sequentially seeing Electronics with into a all segment going industrial down we end expect typically are decline some across are fourth across sales our of more reminder, softness of the do pronounced some segments the our quarter. in a We Products As our markets.

Additionally, line in about expect X% our We've factored the pruning commercial to decline which sales destocking XXXX. in continued relating a vehicle also we assumed inventory business. into product to we've continue

EPS XX expense interest tax expenditures rate earnings projecting projecting in the of about the operating is million. largely to around to point $XXX XX% in a and which rate, a of to $XX million. XX.X%, foreign exchange in some range a At year quarter. we full $XX includes unfavorable forecasted We of sequential fourth EPS be material margins, full but impact impact rate $X.XX and current an XX rates, $X.XX, no tax our decline. Slide we basis have expect additional amortization we're full quarter $X.XX decline of to by to on expense on year million the sales. We're volume driven capital year color. adjusted sales million expect $XX our Based to headwind The expect assumes and XXXX

our of Dave, with Before the with operational we portfolio strength to structural back that teams, We've I reiterate, laid execution. business. to I want the of foundation growth our the combining ongoing turn and confident diversification remain long-term fundamentals it in

to us hard every as to to core I'll it our cycles. growth on upper members that, for focus on they continue We're customers final like and And the for well some to our investing back operating We'll year, for historical strategy. I'd for than stronger positioned deliver organic long-term opportunities bolstering day. and teens during team blocks work margin performance unwavering deliver their our our well our confident and Dave generation. these We're areas growth comments. turn with inorganic dedication to everywhere control, position and we thank for market cash past the drive both building

David Heinzmann

Thanks, Meenal.

for to Before earlier the highlight capable Vice to year. we and adding Communications some and continue diverse, Greg talented Littelfuse Group Board our Senior and Board President Henderson refresh we wrap, Automotive leaders. Board, I Dr. to Energy, additions Devices. business the this Greg the of wanted joined is of as Aerospace Directors Analog

CEO Gayla addition seasoned extensive global to Board company was of our growth experience member Electronics serve. and set markets complement expansion also before strategy. broad our experience a delivering Board. technology growth markets, great our Gayla's driving public across execute our record will financial reflects companies in diversified His Directors track of of pleased and and while to be technical increasingly Delly our leadership experience our will recently and make broad a solid across market the summary, will joined Gayla environment Board. Gayla operating to expertise, the He's of leader year-to-date add management with XX, both Slide in model. performance We're on we of we a comprehensive Benchmark diverse range end Greg performance Board. macro retiring management business the with him challenging Her Board beneficial and our resilient Board. In end of XXXX. as

deliver XXXX. to We term long-term challenges, from value. results confident While continued expect market return our during to to shareholder in our financial will the ability growth remain we in impacted be near

and we of And XX% double-digit XX% we track the to As sales the and multiple execution projected growth, turn EPS target exemplify CAGRs now and I'll record believe cycles. for call Q&A. with EPS sales that, our to operator continue back through our XX-year

Operator

Instructions] [Operator

first Luke Baird. Junk go to morning We'll this at

Luke Junk

I the order lead on First that ended in with comment expect placements we're you end seeing in to the wanted And I to picking just little growth survey to in the customers gear hurting XXXX. want you to off now. -- mixed that you're a now, return fact question, Dave, inventory maybe up shorter align destocking the just with guess that right well. times right business as work, are distributor our

Just how newer digest up them. how you're with these maybe lines your view, world short dynamics if seeing could long and take that curious to or also

David Heinzmann

look lead for back quite been normal of the come for -- and lines, some particularly Thanks, always, most we Luke. to challenge now. have at It's the products, -- times the Littelfuse as as destocking, kind electronics, certainly and in question time down down product for

that of inventory and more inventory dollar to our they're distribution in is products we power and declining the values Some stage to semiconductor month-to-month, now, inventory we've seen just their time we're environment. What at partners. are reaching lead partners, distribution at coming really our normal where seeing the look carrying,

to then their reach just to that steady So they again. end reasonably lead next ordering when that to start things some to their actually We them flat, making start up and matching And will up distributors, it's again, of times of the if where be progress. that we'll even course, the then hopeful got matching we later which markets get are end inventories return see drive adjust where stage we're markets that distributors need customers to growth, year. in begin some end momentum

So best that's kind it. of our view of

Luke Junk

I there? sales and specifically looking well. going in you specifically product transportation, headwind appreciate working costs products Okay. comment you mentioned just as in the of your then you're Great. reduce and to the that And that actions vehicle commercial on Can customers remarks, And you in that business provided on mix at customer what optimize portion and your forward. X%

Meenal Sethna

Yes. Sure.

that look back, a not necessarily and we're something we is portfolio. anything and is driving value this done. acquisitions new that resources and within especially portfolio the we've at of making the our step taking our areas focusing from regularly right taking the This do sure a Just

expectations there's really acquisition, area an look an even in as sensor few couple of portfolio really looked mentioned, entire a both this at just example, our through And So and perspective back portfolio, and a that a we really we're remind from some backlog of on at I we and we say have select trying I areas you, the Carling focusing past, have the through gotten in us forward business, that, we've when we delivering we're now and to years, a there out an of product little recently that taking customers this customer XXXX, with perspective. And is as that profitability this opportunity meet of a improve are we've really come are customer where the talked about there. pass to type the same on it's focusing back are -- recall the is really we portfolio. done though been acquired for years the thing. I'll you stuff were starting of that automotive a bit,

our think So this we is about just part as running playbook of the company.

Luke Junk

just the you've if And and maybe the see you'd one weakness last and if of of just been electronics how in pockets -- terms to in business just I that of could the Dave, compared you -- the comment sneak point backlog the demand question through highlighted could that in some just for in the fact industrial. of you backlog sales just sort semiconductor on working company

David Heinzmann

-- for lot And companies, power us backlog that able the majority there the last environment in we've semiconductor backlog strong lead semiconductor on in up time. there to down. We Yes. a to for couple working power quarter that how has side, talked quite in third quarter inventory been to had vast particularly or We've into like quarters get and improvements on the an down clean really semiconductor of we've of the stable were particularly been business, more we extended been able a on of kind in side, where throughput that the sort a be showing the there some the to the of business. of in times power bring level semi

bit a there's if industrial We're as some softness. base. business that's heavy seeing you usual. So customer where That's pockets becomes very -- a some it recall,

softness areas seeing But from some growth strong where we're also have seen we've we So there. there.

medical right quite business a renewable, there industrial strong Some other as well. like have now that also applications we is

the are safety pockets industrials broader-based industrial We've broader-based these see we these of side, where of kind of pockets. growth about it things energy, kind beginning things like softness, and there's some talked although that. slow, balance that, of like of in renewable some seeing driven to we're help still industrial So out these that

So complex it's the different of And helps bit. serve actually with it lot of it's applications serving. portfolio, markets a different business to we're a is we end part a we've the strength that balance that of targeted do many that

Operator

now next be We'll Sheerin at Stifel. going to Matt

Matthew Sheerin

XXX the down just your points question it's It basis to like A know into be that points regarding XXX profitability. sequentially, I'm is margin, going that pricing on basis roughly down that. I -- operating will sorry, looks other looks or margins it so guidance volume backing But there significantly where year-on-year. factors? -- in leverage basically into the negative were lowest Because be a pandemic, the plays X years. like the during they

So bottom of there play mark does here? at in terms Or are things this the margins? other

Meenal Sethna

question. Matt. Thanks, Good

you would we've you past, I talked to look of be what terms quarter-over-quarter, for especially that So say large in tends us, is, going profile for the pretty as volume a margin sales are in trends on. driver us and have near-term when

quarter, the we to going So volume. and sales in margin the is case I I'm -- sequential of comments, as on the that of my decline, exact really function have, decline margin comment decline not with the expected sales fourth that But a mentioned here. margin expected margin really the prepared the

expectations that and XXXX cycle, 'XX overall And we past margins 'XX, was for at even think take I is off get 'XX our about period, to about in like step where the compared margin of 'XX, a so. pandemic or a profile XX.X% life of period, what margin 'XX finished the times to during sub-XX%. cycles, lot our As reminded back our

done for diversification, the finish portfolio execution work from is, that XXXX. will a profile expect in all expectation years perspective, we from our that so I few the an And perspective, better past than margin that we've with pricing

Matthew Sheerin

success the the Okay. I years had last of you pricing Are in you And seeing higher way other environment? talk know could couple of input along costs. the here? in pressure terms about you've passing

David Heinzmann

broad-based what a our the lot I when get I seen, -- think different of it's on Matt, and not actually. been that than we've environment, it's peers. and Yes, talk we to I question kind think It's pricing

pricing to along normal driven that dealing our of really similar, seeing kind seeing are see a our is, where a to a that's years environment. and cost pressures partners do we're share cost normal more We're pressures that still but been couple that able increases pricing Our lot environment. The distribution return reality of have seeing to we've The retrenching return pricing we meaningfully. pass that the our there's the with of a not kind with, but are of and up quite customers, last been we're we pressures, to of more abnormal, customers.

of side. to kind years had you is, what right the big cost to of of but last where increases a over year, to kind couple the the now, course normal the environment that gets do make percent of holding, to it So couple see cover we are the lose on we over increases the return that pricing of

Matthew Sheerin

Okay. you trends, there Dave, there? about a OEMs, being you content and on just talk position or talked positive China Could lastly, OEMs softer. your auto And versus going OEMs little international with negative local anything about demand in China

David Heinzmann

Yes. third China. quarter launches. were that for comments in were Actually, strong our lot of preparations There quite a was platform our

maintain pretty the that been we to fact same not also side, Chinese a able strong of China, position with build China. OEMs expect As expect we with share those, Chinese strong we level have OEMs have may open good high-voltage the as about we it. We've the quarter with be on the Chinese launches to okay, lot of the feel success But OEMs. And on third Chinese pockets a know, side going not well. side, success do very launching on Car have in a continue they're we low-voltage strong the local OEMs be forward. going you on as side with high-voltage of we had to with well, particularly as multinationals, low-voltage but we may in there, the with but and lots of both tremendous And platforms. we the on

Operator

next go Williams We'll Benchmark. David to at now

David Williams

on the David congratulations First, role new there. to

But this way just an the still the And Just to you there And with do it inventory of that the size you think still a kind maybe first think to you. inventory digested working markets? to maybe destocking needs on situation, year? be going your a have to trying magnitude about across how to the remaining. next is forward end the back Looking is it or of lasting year. maybe is end sense half get we you of of XQ into this big into talked

David Heinzmann

Yes. question is is wrestle maybe distribution to they bit a more as perfect. normally quite partners' in Certainly, their with cycles, That's this we've inventory the we visibility bit what regularly But seen did. not to our customers little good. inventory a a that's visibility in cycle difference end we've than seen than perhaps customers, carried maybe and end previous

So that's inventory we've which and the down speed the channels. able and at our the been partners, drive to distribution impacted

if not would inventory channels weeks it's we few there. in extra visibility perfect at a still So our we look the say, there. Clearly, distribution we of side, have Electronics

we well wind If last unless down at been is going way able something throughout month. been be will it's when, -- haven't work month expect look we XXXX doing. of methodically first we to kind half. we we this going the that, as to in don't say, to should into that visibility the be So Exactly or have But certainly our that it's able to changes. it

David Williams

then Matt's And to differential on maybe to -- question, is the Great. just in Okay. back content.

content how ICE domestically? is from And your should it out customers, -- what maybe about think maybe domestic look how maybe in that How vehicle? in plays that as then EV opposed we difference significantly And an you If and across there? specifically, an is to differential? the versus higher China China

David Heinzmann

content. interesting on of there Kind mix Yes.

find vehicles you approaching growth Chinese West where days, grow If with on working continues vehicles we're large of sophistication are is and the sophisticated the the ICE to we because would content vehicles, the these vehicles. pretty ICE take what drivers of dramatically in

the the tough it's in low-voltage on on EV a environment side, So OEMs China there. but side,

EV content So a in lower perhaps our may Europe. content in China than an EV in little our an be in

Operator

Instructions] [Operator

Silver at to now David Associates. & CL next go We'll King

David Silver

start million And just the put if guidance. you suspension is full is pinpoint I'm if -- of wondering here, if of earlier. more you spending it being million, for just than question or delay year I'll rather on consider your discretionary reduced. was Maybe on And in a with cancellation. $XX a where that CapEx maybe I'm maybe think But than $XX now I you this could correct number maybe out maybe terms comment lower

be your would budget? that the maybe do shift where in And So into XXXX? CapEx to how you expect progress

Meenal Sethna

Sure, David.

yes, back So think, I had the forecast and that of brought year to, compared have down. we on the the beginning we CapEx, to

one maybe coming delays -- and/or a a questions, few softer. We necessarily just a One, it's of talked things. cases, a view volumes many thought. think, little I down permanent year, to on what the to to out your -- move answer start when isn't little delays. bit little it's than we we thought was this had going a to about longer extending happen most the in we year. Clearly, a started in it reduction we And bit because

think the at look businesses know trends we to adds moving of So we'll said, can bit, off during I little that that of same where out we have a into spend where volume And given a anticipating lot what, continue year, "You we they've hold XXXX. At the we're some are." time, and the for the the health water new around the usage, around a manufacturing other usage, have, energy footprint supply growth improving and safety, There's lot areas equipment. especially our right? that chain like we that sustainability, we doing normal we're and the think things of about when growth maintenance we anticipate, that even capacity

well. to important to as our customers employees, our profitability investments our They're So and matter. important for and to us, important those they're

little the macro no So environment. than big a of shifts other given a bit delay just

David Silver

But Okay. And companies. this my other couple I heard a kind company's, come electronics parallels guess, a remarks. think has of opening some question up, your I -- the components-related I in with is and of that

sluggish think So -- I front. could new in mentioned earlier temporary? channel. other on did or just contrast the Is where wondering it if on maybe here relatively business maybe contract and softness healthy hand, Is something between, they end are markets. And cyclical? legacy as distribution customers demand maybe comment sluggish on goes. your which But one for new terms you're of activity that, now you distribution the various from products design in what In the But draw continued pretty in about was wins hearing, it you more a something it price-related? you then do the becoming interpret the sharp words,

just off next-generation fall the I markets? products distinction mean, edge markets for do long-winded pretty this versus serving current about serving the draw question. soft the the customers at year activity are due Sorry might healthy waiting some end to demand current softer for obsolescence? But might leading and a persistently clear -- markets, in between of you that

David Heinzmann

Yes. nature understand the the I question. of No.

kind Our Board great a of many, design to design activity be And deal the certainly, robust. of activity, have many in markets. electronics, extremely different continues across in end we

any see robust We of of don't new right kind signs extremely designing applications. any now. we designing new So in slowing of that products, in see activity on

pockets of the for kind a while. that's long a been Electronics medium are for talked the healthy see that markets certainly have We've So us. We end that for term fact of indicator and there within about term that. down

the the of those are PCs, So think the that, welcome to of customer-facing some consumer bottoming serving news small electronics, some kind that's kind we've of of are of chain. so perhaps the chip who some our appliances, electronics, some from challenge which that primary just things that of bulk down. to of Those markets others that advanced markets beginning good been see the bottom supply The have of like heard semi that would to is that seeing kind is of a personal of think guys they're clearly out certainly, is the That tablets. our that, they -- that inventory story and digestion see bottomed. way through. work bit, we be got We've

mathematically, And course, and out. growth between we that get through of naturally, to we'll because orders we orders as see and will in digestion, return off just balance a

things that. like uptick that, with the seeing in the of design show in beyond in that so growth an us. itself for start comes And and will then healthy demand start you and growth to when real activity And

So we bullish. remain pretty still

David Silver

ignore, just Okay. your negotiations truck environment from it's grab your high-profile cost a next recent has last overall guess, a availability, and of headlines. factor couple the auto workers thinking the labor cetera, year? was how couple any it's the that or weeks, -- thinking usually a in to maybe one. I of does just drivers, Great. whether kind months, that And labor to hate then your But quick about hard et I skilled the change situation of workers? Or and there into been industrial of general for about, does how that labor question in

David Heinzmann

a Yes. labor unusual We any of perspective. situations kind from don't have

work. regions positions where communities have within. labor heavily very hard the wherever pretty across -- of reputation in we into long-term different employer great favored invest spaces. have work We and world balanced to we We had be the we've We a the we're that of those at, kind

third quarter that news pretty -- and will a impact is I will strike our unusual. Obviously, have see has an concern. it now, usually to fourth there, but don't on down as it our modest that and seems on UAW modest a we we good don't But winding the see good even have have a as been well. so overarching -- quarter impact had an relationships balanced anything -- kind impact And of

Operator

Buchalter go at to Cowen. We'll now next Joshua TD

Joshua Buchalter

ask me to luck Let about and wanted the echo well. congrats David. as inventories good I to

inventory to in quantify over appreciate progress be? on-books now and we I it I thinking So to as to Because you'd about curious XX levels. In wondering, pre-COVID, that target your think days run of it's it but about year-to-date. level like to remarks, a I XXX used to some difficult, see be called how out channel sort and level or that -- well. you're days was you'd contextualize you is inventories range. good as still prepared in the we on-book there is I the just the be things the channel to want wanted trying how that I totally should your about ask like to time XX

Meenal Sethna

Yes. That's Josh. a great question,

As really inventory you reductions. this year progress good mentioned, on we made

working this been generation focus tailwind that's nice and the that's our few area to a it for cash As I've year. past talking about been as been a us, capital quarters, relates huge

our our somewhere We where a are adds inventory longer versus holding hand. The they more. inventory lot a XXX we reference maybe for business, have we're targets business to that XXX, little than as also XXX-ish us of continue or running hand, but on OEM-related has days of days the inventory evolved as bit little about on our versus is, a mentioned pre-pandemic bit time. times, there's at which different change are so you And of own mix, grow lead of biggest more point some

we've going end XXXX. may So I us little generation, our progress can target but going time, to make at than year the into from say, and still going that's of same would that help cash the a a got more be historical, we into the higher

the and I'm So progress pleased we're where we've where heading. with made pretty are, we

through our job really think done some I on teams dynamics. tremendous managing have a market really challenging

Joshua Buchalter

and the I nicely. there, follow-up up my pretty appreciate teed actually all color you

in personal called electronics, be sort Anything electronics You remind industrial the exposure you it's digestion, like of, about of it personal you us but think great. and us out of as things datacom inventory your we between consumer, within and this softness consumer can Could automotive. would stabilizing. and quantify, help segment electronics, sort

David Heinzmann

and piece within specifically. than if business consumer some as XX% kind well. our around Yes. corporately. keep it's it or is, less What electronics in of think of about But that's electronic power business say break I out has to or would corporately, heavy that, electronics, consumer our side, a facing really of the less electronics core We don't semiconductor on industrial the industrial mind, XX% the you

So it's portion. a meaningful

and end-market electronics traditional which talked In -- are of about although in car, as from X/X and have X/X that targeting a up that's revenues split we commercial in transportation about our that pass about applications. that vehicle fact, segments, about mind of company, our are X/X and reporting of we've the space, kind between are an have XX-XX we in ending industrial keeping exposure in kind traditional technology-based,

hopefully, a So helps color. give little to that you

Operator

[Operator Instructions]

Mr. appears I'll closing Kelly, we morning. you questions have for back comments. further things And new it to hand this no

David Kelly

We and the Have for thanks, Littelfuse. you many you. everyone, Bo, Global joining Conference for questions. That Conference. us with your concludes X, our Thank One-on-One X, and your wonderful look Baird a Thank Midwest on Growth November and of day. interest for speaking November Stifel Q&A in Thanks, to you forward today's call session. Industrial at the

Operator

Third Again, conclude gentlemen, XXXX Kelly. wish great I and Call. Again, day. a Mr. will you, thank much Thank Littelfuse Quarter all the Goodbye. that so Earnings joining. ladies for you you

Littelfuse (LFUS) 1 Nov 232023 Q3 Earnings call transcript