Littelfuse Reports Third Quarter Results for 2024

CHICAGO--(BUSINESS WIRE)--Littelfuse, Inc. (NASDAQ: LFUS), a diversified, industrial technology manufacturing company empowering a sustainable, connected, and safer world, today reported financial results for the third quarter ended September 28, 2024:

• Net sales of $567 million were down 7% versus the prior year period and organically
• GAAP diluted EPS was $2.32 and adjusted diluted EPS was $2.71
• Cash flow from operations was $80 million and free cash flow was $65 million

"In the third quarter, our global teams delivered strong execution and drove sales and earnings above our expectations," said Dave Heinzmann, Littelfuse President and Chief Executive Officer. "While we see soft end market conditions extending into the fourth quarter, we remain focused on driving operational excellence while serving our global customer base and delivering meaningful new business wins. Our proven growth strategy, diversification efforts and strong technology capabilities position us to deliver top tier long-term stakeholder value."

Fourth Quarter of 2024*

Based on current market conditions, for the fourth quarter the company expects,

• Net sales in the range of $510 - $540 million, adjusted diluted EPS in the range of $1.90 - $2.10 and an adjusted effective tax rate of approximately 14%

*Littelfuse provides guidance on a non-GAAP (adjusted) basis. GAAP items excluded from guidance may include the after-tax impact of items including acquisition and integration costs, restructuring, impairment and other charges, certain purchase accounting adjustments, non-operating foreign exchange adjustments and significant and unusual items. These items are uncertain, depend on various factors, and could be material to results computed in accordance with GAAP. Littelfuse is not able to forecast the excluded items in order to provide the most directly comparable GAAP financial measure without unreasonable efforts.

Dividend and Share Repurchase Authorization

• The company will pay a cash dividend on its common stock of $0.70 per share on December 5, 2024, to shareholders of record as of November 21, 2024

Conference Call and Webcast Information

Littelfuse will host a conference call on Wednesday, October 30, 2024, at 9:00 a.m. Central Time to discuss the results. The call will be broadcast and available for replay at Littelfuse.com. A slide presentation is available in the Investor Relations section of the company's website at Littelfuse.com.

About Littelfuse

Littelfuse, Inc. (NASDAQ: LFUS) is a diversified, industrial technology manufacturing company empowering a sustainable, connected, and safer world. Across more than 20 countries, and with approximately 16,000 global associates, we partner with customers to design and deliver innovative, reliable solutions. Serving over 100,000 end customers, our products are found in a variety of industrial, transportation and electronics end markets - everywhere, every day. Learn more at Littelfuse.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

The statements in this press release that are not historical facts are intended to constitute "forward-looking statements" entitled to the safe-harbor provisions of the Private Securities Litigation Reform Act. Such statements are based on Littelfuse, Inc.'s ("Littelfuse" or the "Company") current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties, include, but are not limited to, risks and uncertainties relating to general economic conditions; product demand and market acceptance; the impact of competitive products and pricing; product quality problems or product recalls; capacity and supply difficulties or constraints; coal mining exposures reserves; cybersecurity matters; failure of an indemnification for environmental liability; exchange rate fluctuations; commodity and other raw material price fluctuations; the effect of Littelfuse accounting policies; labor disputes; restructuring costs in excess of expectations; pension plan asset returns less than assumed; integration of acquisitions; uncertainties related to political or regulatory changes; and other risks which may be detailed in the company's Securities and Exchange Commission filings. Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, actual results and outcomes may differ materially from those indicated or implied in the forward-looking statements. This release should be read in conjunction with information provided in the financial statements appearing in the company's Annual Report on Form 10-K for the year ended December 30, 2023.

Further discussion of the risk factors of the company can be found under the caption "Risk Factors" in the company's Annual Report on Form 10-K for the year ended December 30, 2023, and in other filings and submissions with the SEC, each of which are available free of charge on the company's investor relations website at investor.littelfuse.com and on the SEC's website at www.sec.gov. These forward-looking statements are made as of the date hereof. The company does not undertake any obligation to update, amend or clarify these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the availability of new information.

Non-GAAP Financial Measures

The information included in this press release includes the non-GAAP financial measures of organic net sales (decline) growth, adjusted operating income, adjusted operating margin, adjusted EBITDA, adjusted EBITDA margin, adjusted diluted earnings per share, adjusted income taxes, adjusted effective tax rate, free cash flow, net debt, consolidated EBITDA, and consolidated net leverage ratio (as defined in the credit agreement). Many of these non-GAAP financial measures exclude the effect of certain expenses and income not related directly to the underlying performance of our fundamental business operations. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is set forth in the attached schedules. The company believes that organic net sales (decline) growth, adjusted operating income, adjusted operating margin, adjusted EBITDA, adjusted EBITDA margin, adjusted diluted earnings per share, adjusted income taxes, and adjusted effective tax rate provide useful information to investors regarding its operational performance because they enhance an investor's overall understanding of our core financial performance and facilitate comparisons to historical results of operations, by excluding items that are not related directly to the underlying performance of our fundamental business operations or were not part of our business operations during a comparable period. The company believes that free cash flow is a useful measure of its ability to generate cash. The company believes that net debt, consolidated EBITDA, and consolidated net leverage ratio are useful measures of its credit position. The company believes that all of these non-GAAP financial measures are commonly used by financial analysts and others in the industries in which we operate, and thus further provide useful information to investors. Management additionally uses these measures when assessing the performance of the business and for business planning purposes. Note that our definitions of these non-GAAP financial measures may differ from those terms as defined or used by other companies.

LFUS-F

LITTELFUSE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
		(Unaudited)
(in thousands, except share and per share data)		September 28, 2024			December 30, 2023
ASSETS
Current assets:
Cash and cash equivalents		$	629,670		$	555,513
Short-term investments			1,011			235
Trade receivables, less allowances of $76,151 and $84,696 at September 28, 2024 and December 30, 2023, respectively			338,758			287,018
Inventories			453,781			474,607
Prepaid income taxes and income taxes receivable			6,793			8,701
Prepaid expenses and other current assets			132,510			82,526
Total current assets			1,562,523			1,408,600
Net property, plant, and equipment			481,592			493,153
Intangible assets, net of amortization			560,994			606,136
Goodwill			1,317,748			1,309,998
Investments			26,607			24,821
Deferred income taxes			11,955			10,486
Right of use lease assets			60,277			62,370
Other long-term assets			40,548			79,711
Total assets		$	4,062,244		$	3,995,275
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable		$	179,486		$	173,535
Accrued liabilities			152,772			149,214
Accrued income taxes			39,809			38,725
Current portion of long-term debt			67,799			14,020
Total current liabilities			439,866			375,494
Long-term debt, less current portion			799,949			857,915
Deferred income taxes			95,554			110,820
Accrued post-retirement benefits			31,373			34,422
Non-current lease liabilities			52,074			49,472
Other long-term liabilities			70,328			86,671
Total equity			2,573,100			2,480,481
Total liabilities and equity		$	4,062,244		$	3,995,275

LITTELFUSE, INC. CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME (Unaudited)
		Three Months Ended								Nine Months Ended
(in thousands, except per share data)		September 28, 2024				September 30, 2023				September 28, 2024				September 30, 2023
Net sales		$	567,390			$	607,071			$	1,661,263			$	1,828,850
Cost of sales			351,498				380,200				1,050,559				1,122,190
Gross profit			215,892				226,871				610,704				706,660
Selling, general, and administrative expenses			83,897				87,204				263,395				270,057
Research and development expenses			26,470				25,484				81,283				77,270
Amortization of intangibles			15,864				16,022				47,418				49,773
Restructuring, impairment, and other charges			1,840				4,516				10,329				13,221
Total operating expenses			128,071				133,226				402,425				410,321
Operating income			87,821				93,645				208,279				296,339
Interest expense			9,772				10,101				29,358				29,803
Foreign exchange loss			9,630				11,776				4,273				8,697
Other income, net			(9,297	)			(3,527	)			(19,916	)			(11,810	)
Income before income taxes			77,716				75,295				194,564				269,649
Income taxes			19,658				17,507				42,588				53,045
Net income		$	58,058			$	57,788			$	151,976			$	216,604
Earnings per share:
Basic		$	2.34			$	2.32			$	6.12			$	8.72
Diluted		$	2.32			$	2.30			$	6.07			$	8.63
Weighted-average shares and equivalent shares outstanding:
Basic			24,796				24,893				24,822				24,838
Diluted			25,025				25,143				25,040				25,100
Comprehensive income		$	114,451			$	55,654			$	157,011			$	212,842

LITTELFUSE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
		Nine Months Ended
(in thousands)		September 28, 2024				September 30, 2023
OPERATING ACTIVITIES
Net income		$	151,976			$	216,604
Adjustments to reconcile net income to net cash provided by operating activities:			101,437				137,988
Changes in operating assets and liabilities:
Trade receivables			(50,672	)			(21,752	)
Inventories			19,865				66,456
Accounts payable			5,460				(38,475	)
Accrued liabilities and income taxes			(19,434	)			(61,359	)
Prepaid expenses and other assets			(1,633	)			13,678
Net cash provided by operating activities			206,999				313,140
INVESTING ACTIVITIES
Acquisitions of businesses, net of cash acquired			-				(198,810	)
Purchases of property, plant, and equipment			(50,065	)			(63,166	)
Net proceeds from sale of property, plant and equipment, and other			8,931				597
Net cash used in investing activities			(41,134	)			(261,379	)
FINANCING ACTIVITIES
Net payments of credit facility			(3,750	)			(5,625	)
Repurchases of common stock			(40,862	)			-
Cash dividends paid			(49,687	)			(45,973	)
All other cash provided by financing activities			3,000				4,454
Net cash used in financing activities			(91,299	)			(47,144	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			(396	)			(7,965	)
Increase (decrease) in cash, cash equivalents, and restricted cash			74,170				(3,348	)
Cash, cash equivalents, and restricted cash at beginning of period			557,123				564,939
Cash, cash equivalents, and restricted cash at end of period		$	631,293			$	561,591

LITTELFUSE, INC. NET SALES AND OPERATING INCOME BY SEGMENT (Unaudited)
		Third Quarter											Year-to-Date
(in thousands)			2024				2023			% (Decline) / Growth				2024				2023			% (Decline) / Growth
Net sales
Electronics		$	304,188			$	343,933			(11.6	)%		$	900,932			$	1,052,673			(14.4	)%
Transportation			171,381				177,019			(3.2	)%			510,711				515,708			(1.0	)%
Industrial			91,821				86,119			6.6	%			249,620				260,469			(4.2	)%
Total net sales		$	567,390			$	607,071			(6.5	)%		$	1,661,263			$	1,828,850			(9.2	)%
Operating income
Electronics		$	48,891			$	77,022			(36.5	)%		$	132,859			$	247,028			(46.2	)%
Transportation			23,485				9,694			142.3	%			54,925				26,015			111.1	%
Industrial			17,711				13,201			34.2	%			32,054				45,450			(29.5	)%
Other(a)			(2,266	)			(6,272	)		N.M.				(11,559	)			(22,154	)		N.M.
Total operating income		$	87,821			$	93,645			(6.2	)%		$	208,279			$	296,339			(29.7	)%
Operating Margin			15.5	%			15.4	%						12.5	%			16.2	%
Interest expense			9,772				10,101							29,358				29,803
Foreign exchange loss			9,630				11,776							4,273				8,697
Other income, net			(9,297	)			(3,527	)						(19,916	)			(11,810	)
Income before income taxes		$	77,716			$	75,295			3.2	%		$	194,564			$	269,649			(27.8	)%
(a) "other" typically includes non-GAAP adjustments such as acquisition-related and integration costs, purchase accounting inventory adjustments and restructuring and impairment charges. (See Supplemental Financial Information for details.) N.M. - Not meaningful

		Third Quarter									Year-to-Date
(in thousands)		2024			2023			% (Decline) / Growth			2024			2023			% (Decline) / Growth
Operating Margin
Electronics		16.1	%		22.4	%		(6.3	)%		14.7	%		23.5	%		(8.8	)%
Transportation		13.7	%		5.5	%		8.2	%		10.8	%		5.0	%		5.8	%
Industrial		19.3	%		15.3	%		4.0	%		12.8	%		17.4	%		(4.6	)%

LITTELFUSE, INC. SUPPLEMENTAL FINANCIAL INFORMATION (In millions of USD except per share amounts - unaudited)
Non-GAAP EPS reconciliation
		Q3-24			Q3-23			YTD-24			YTD-23
GAAP diluted EPS		$	2.32		$	2.30		$	6.07		$	8.63
EPS impact of Non-GAAP adjustments (below)			0.39			0.67			0.37			1.09
Adjusted diluted EPS		$	2.71		$	2.97		$	6.44		$	9.72

Non-GAAP adjustments - (income) / expense
		Q3-24				Q3-23			YTD-24				YTD-23
Acquisition-related and integration costs (a)		$	1.0			$	1.8		$	2.8			$	9.0
Restructuring, impairment and other charges (b)			1.8				4.5			10.3				13.2
Gain on sale of fixed assets (c)			(0.5	)			-			(1.5	)			-
Non-GAAP adjustments to operating income			2.3				6.3			11.6				22.2
Other income, net (d)			-				-			(0.3	)			(0.2	)
Non-operating foreign exchange loss			9.6				11.8			4.3				8.7
Non-GAAP adjustments to income before income taxes			11.9				18.1			15.6				30.7
Income taxes (e)			2.1				1.2			6.2				3.2
Non-GAAP adjustments to net income		$	9.8			$	16.9		$	9.4			$	27.5
Total EPS impact		$	0.39			$	0.67		$	0.37			$	1.09

Adjusted operating margin / Adjusted EBITDA reconciliation
		Q3-24				Q3-23				YTD-24				YTD-23
Net income		$	58.1			$	57.8			$	152.0			$	216.6
Add:
Income taxes			19.7				17.5				42.6				53.0
Interest expense			9.8				10.1				29.4				29.8
Foreign exchange loss			9.6				11.8				4.3				8.7
Other income, net			(9.3	)			(3.5	)			(19.9	)			(11.8	)
GAAP operating income		$	87.8			$	93.6			$	208.3			$	296.3
Non-GAAP adjustments to operating income			2.3				6.3				11.6				22.2
Adjusted operating income		$	90.1			$	99.9			$	219.9			$	318.5
Amortization of intangibles			15.9				16.0				47.4				49.8
Depreciation expense			17.3				17.9				51.0				53.5
Adjusted EBITDA		$	123.3			$	133.8			$	318.3			$	421.8
Net sales		$	567.4			$	607.1			$	1,661.3			$	1,828.9
Net income as a percentage of net sales			10.2	%			9.5	%			9.1	%			11.8	%
Operating margin			15.5	%			15.4	%			12.5	%			16.2	%
Adjusted operating margin			15.9	%			16.5	%			13.2	%			17.4	%
Adjusted EBITDA margin			21.7	%			22.0	%			19.2	%			23.1	%

Adjusted EBITDA by Segment		Q3-24												Q3-23
		Electronics				Transportation				Industrial				Electronics				Transportation				Industrial
GAAP operating income		$	48.9			$	23.5			$	17.7			$	77.0			$	9.7			$	13.2
Add:
Add back amortization			9.9				3.4				2.6				9.8				3.6				2.6
Add back depreciation			10.1				5.7				1.5				9.8				6.6				1.5
Adjusted EBITDA		$	68.9			$	32.6			$	21.8			$	96.6			$	19.9			$	17.3
Adjusted EBITDA Margin			22.6	%			19.0	%			23.8	%			28.1	%			11.2	%			20.1	%

Adjusted EBITDA by Segment		YTD-24												YTD-23
		Electronics				Transportation				Industrial				Electronics				Transportation				Industrial
GAAP operating income		$	132.9			$	54.9			$	32.1			$	247.0			$	26.0			$	45.5
Add:
Add back amortization			29.6				10.1				7.7				30.1				12.2				7.5
Add back depreciation			30.1				16.7				4.2				29.1				20.4				4.0
Adjusted EBITDA		$	192.5			$	81.8			$	44.0			$	306.2			$	58.6			$	57.0
Adjusted EBITDA Margin			21.4	%			16.0	%			17.6	%			29.1	%			11.4	%			21.9	%

Net sales reconciliation		Q3-24 vs. Q3-23
		Electronics			Transportation			Industrial			Total
Net sales (decline) growth		(12	)%		(3	)%		7	%		(7	)%
Less:
Acquisitions		-	%		-	%		-	%		-	%
FX impact		-	%		-	%		-	%		-	%
Organic net sales (decline) growth		(12	)%		(3	)%		7	%		(7	)%

Net sales reconciliation		YTD-24 vs. YTD-23
		Electronics			Transportation			Industrial			Total
Net sales decline		(14	)%		(1	)%		(4	)%		(9	)%
Less:
Acquisitions		-	%		-	%		-	%		-	%
FX impact		-	%		-	%		-	%		-	%
Organic net sales decline		(14	)%		(1	)%		(4	)%		(9	)%

Income tax reconciliation
		Q3-24				Q3-23				YTD-24				YTD-23
Income taxes		$	19.7			$	17.5			$	42.6			$	53.0
Effective rate			25.3	%			23.3	%			21.9	%			19.7	%
Non-GAAP adjustments - income taxes			2.1				1.2				6.2				3.2
Adjusted income taxes		$	21.8			$	18.7			$	48.8			$	56.2
Adjusted effective rate			24.3	%			20.0	%			23.2	%			18.7	%
Free cash flow reconciliation
		Q3-24				Q3-23				YTD-24				YTD-23
Net cash provided by operating activities		$	80.4			$	161.5			$	207.0			$	313.1
Less: Purchases of property, plant and equipment			(15.4	)			(21.7	)			(50.1	)			(63.2	)
Free cash flow		$	65.0			$	139.8			$	156.9			$	250.0

Consolidated Total Debt		As of September 28, 2024
Consolidated Total Debt		$	867.7
Unamortized debt issuance costs			3.0
Finance lease liability			0.4
Consolidated funded indebtedness			871.1
Cash held in U.S. (up to $400 million)			135.5
Net debt		$	735.6
Consolidated EBITDA		Twelve Months Ended September 28, 2024
Net Income		$	194.8
Interest expense			39.4
Income taxes			58.7
Depreciation			69.1
Amortization			63.4
Non-cash additions:
Stock-based compensation expense			25.2
Purchase accounting inventory step-up charge			-
Unrealized loss on investments			(2.6	)
Impairment charges			1.0
Other			(0.2	)
Consolidated EBITDA (1)		$	448.8
Consolidated Net Leverage Ratio (as defined in the Credit Agreement) *		1.6x

* Our Credit Agreement and Private Placement Note with maturities ranging from 2024 to 2032, contain financial ratio covenants providing that if, as of the last day of each fiscal quarter, the Consolidated Net Leverage ratio at such time for the then most recently concluded period of four consecutive fiscal quarters of the Company exceeds 3.50:1.00, an Event of Default (as defined in the Credit Agreement and Private Placement Senior Notes) is triggered.

The Credit Agreement and Private Placement Senior Notes were amended in Q2 2022 and now allow for the addition of acquisition and integration costs up to 15% of Consolidated EBITDA and the netting of up to $400M of Available Cash (Cash held by US Subsidiaries).

(1) Represents Consolidated EBITDA as defined in our Credit Agreement and Private Placement Senior Notes and is calculated using the most recently concluded period of four consecutive quarters.

Note: Total will not always foot due to rounding.

(a) reflected in selling, general and administrative expenses ("SG&A").
(b) reflected in restructuring, impairment and other charges.
(c) 2024 amount reflected a gain of $0.5 million ($1.5 million year-to-date) recorded for the sale of a land use right within the Electronics segment and a gain of $1.0 million for the sale of two buildings within the Transportation segment.
(d) 2024 year-to-date also included a reversal of $0.5 million for an asset retirement obligation charge related the disposal of a business in 2019 and $0.2 million increase in coal mining reserves. 2023 amount included $0.2 million gain from the sale of a building within the Electronics segment.
(e) reflected the tax impact associated with the non-GAAP adjustments.

Contacts

David Kelley
224-727-2535
[e-mail]