Littelfuse Reports Fourth Quarter and 2003 Results
DES PLAINES, Ill.--Feb. 3, 2004--Littelfuse, Inc. today reported sales and earnings for the fourth quarter and full year of 2003.Sales for the fourth quarter of 2003 were $102.0 million, a 47% increase from sales of $69.3 million in the fourth quarter of 2002. Teccor Electronics, which was acquired on July 7, 2003, contributed $21.1 million in sales for the quarter. Diluted earnings per share were $0.19 in the fourth quarter of 2003, including a $0.09 charge related to downsizing the company's Ireland operation, compared to earnings of $0.12 per diluted share for the fourth quarter of 2002.
"We are pleased with the recent operating trends in our businesses and in particular with the smooth integration and better than expected financial performance of Teccor," said Howard B. Witt, Chairman, President and Chief Executive Officer. "Our strong top-line growth and continued margin improvement are evidence that we have positioned the company well for the economic recovery which now appears to be underway."
For the full year 2003, sales were $339.4 million, a 20% increase from sales of $283.3 million in 2002. Diluted earnings per share for 2003 increased to $0.70 compared to $0.44 in 2002.
By geographic segment, sales for the fourth quarter of 2003 compared to the prior year period were up 49% in the Americas, 27% in Europe and 58% in Asia. These sales increases were driven by the addition of Teccor, the beginning of a broad-based economic recovery, an extra week in the fourth quarter of 2003 and favorable currency effects.
Excluding the Teccor acquisition, sales for the fourth quarter were up 17% over the prior year period. Each of the three markets contributed to the revenue growth, with electronics up 22%, automotive up 11% and electrical up 11%. Favorable currency effects contributed 5 percentage points to the overall growth rate, with electronic and automotive benefiting 5 points and 6 points respectively.
"In our electronics market, the strength we have been seeing throughout the year in Asia related to consumer electronics, notebook computers and handheld products has now broadened to include other markets, such as telecom and industrial, and both the North American and European regions," said Witt. "In the fourth quarter, we also saw positive year-over-year revenue comparisons in both automotive and electrical for the first time this year," added Witt.
"Teccor was approximately $.04 accretive to earnings per share for the quarter due to higher than expected volume and excellent progress on cost reduction and other integration initiatives," said Phil Franklin, Vice President, Operations Support and Chief Financial Officer. "In addition, margins for the base Littelfuse business continue to improve, reflecting the recently completed cost reduction programs, favorable currency impacts and higher overhead absorption resulting from increasing production volumes," added Franklin.
"Cash flow for the year was outstanding as we generated $47.2 million of cash from operating activities, even after a pension contribution of $3.0 million in December. This easily exceeded last year's record operating cash performance of $40.8 million," said Franklin. "Improving margins and increased inventory and receivables turnover were the major contributors."
"Looking ahead to 2004, we are anticipating high single-digit growth in our electronics market, whereas the automotive and electrical markets are expected to grow in the lower single digits," said Franklin. "In our ongoing push for cost savings, we will initiate a series of projects in 2004 to further consolidate and reduce costs in our global manufacturing and distribution operations. These and other programs are expected to generate sufficient cost savings to more than offset price erosion in 2004. At the same time, we plan to increase R&D spending to accelerate new product development, which will help to drive our future top-line growth. These programs collectively should move us toward our longer term corporate objective of a 15% pre-tax operating margin," added Franklin.
"We have a clear strategy to be the world leader in circuit protection and now have in place the management team, the product portfolio and the cost position to execute on the strategy," said Witt. "Without question there is more work to do, but our recent financial performance indicates that we are on the right track."
Littelfuse will host a conference call today, Tuesday, February 3, 2004, at 11:00 a.m. Eastern/10:00 a.m. Central time to discuss the fourth quarter results. The call will be broadcast live over the Internet and can be accessed through the company's Web site: www.littelfuse.com. Listeners should go to the Web site at least 15 minutes prior to the call to download and install any necessary audio software. The call will be available for replay through Tuesday, February 10, 2004, and can be accessed through the Web site listed above.
Littelfuse is a global company offering the broadest line of circuit protection products in the industry. In addition to its Des Plaines world headquarters, Littelfuse has manufacturing facilities in England, Ireland, Switzerland, Mexico, China and the Philippines, as well as in Des Plaines and Arcola, Illinois and Irving, Texas. It also has sales, engineering and distribution facilities in the Netherlands, Singapore, Hong Kong, Korea, Taiwan, Japan and Brazil.
For more information, please visit Littelfuse's web site at www.littelfuse.com
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995.
Any forward looking statements contained herein involve risks and uncertainties, including, but not limited to, product demand and market acceptance risks, the effect of economic conditions, the impact of competitive products and pricing, product development and patent protection, commercialization and technological difficulties, capacity and supply constraints or difficulties, exchange rate fluctuations, actual purchases under agreements, the effect of the company's accounting policies, labor disputes, restructuring costs in excess of expectations and other risks which may be detailed in the company's Securities and Exchange Commission filings.
LITTELFUSE, INC.
Sales by Market and Geography
(Dollars in millions)
Fourth Quarter Year-to-Date
------------------------ ------------------------
2003 2002 % Change 2003 2002 % Change
---- ---- -------- ---- ---- --------
Market
------
Electronics $ 46.2 $ 38.0 22% $165.5 $150.8 10%
Automotive 25.9 23.4 11% 98.3 98.3 0%
Electrical 8.8 7.9 11% 34.6 34.2 1%
------ ------ ----- ------ ------ -----
Subtotal 80.9 69.3 17% 298.4 283.3 5%
Teccor 21.1 41.0
------ ------ ----- ------ ------ -----
Total $102.0 $ 69.3 47% $339.4 $283.3 20%
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Fourth Quarter Year-to-Date
------------------------ ------------------------
2003 2002 % Change 2003 2002 % Change
---- ---- -------- ---- ---- --------
Geography
---------
Americas $ 50.2 $ 33.8 49% $167.4 $148.1 13%
Europe 17.4 13.7 27% 61.1 51.2 19%
Asia Pacific 34.4 21.8 58% 110.9 84.0 32%
------ ------ ----- ------ ------ -----
Total $102.0 $ 69.3 47% $339.4 $283.3 20%
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LITTELFUSE, INC.
Condensed Consolidated Statements of Income
(in thousands, except per share data, unaudited)
For the For the
Three Months Ended Twelve Months Ended
-------------------- --------------------
Jan 3, Dec 28, Jan 3, Dec 28,
------ ------- ------ -------
2004 2002 2004 2002
---- ---- ---- ----
Net sales $101,963 $ 69,273 $339,410 $283,267
Cost of sales 72,275 46,569 234,984 192,870
--------- --------- --------- ---------
Gross profit 29,688 22,704 104,426 90,397
Selling, general and
administrative expenses 19,130 16,395 68,579 65,365
Research and development
expenses 2,602 2,046 8,694 8,334
Amortization of intangibles 497 192 1,072 767
--------- --------- --------- ---------
Operating income 7,459 4,071 26,081 15,931
Interest expense 451 482 2,045 2,653
Other (income) expense 459 (380) 68 (1,753)
--------- --------- --------- ---------
Income before income taxes 6,549 3,969 23,968 15,031
Income taxes 2,358 1,429 8,629 5,411
--------- --------- --------- ---------
Net income $ 4,191 $ 2,540 $ 15,339 $ 9,620
========= ========= ========= =========
Net income per share:
Basic $ 0.19 $ 0.12 $ 0.70 $ 0.44
========= ========= ========= =========
Diluted $ 0.19 $ 0.12 $ 0.70 $ 0.44
========= ========= ========= =========
Weighted average shares and
equivalent shares
outstanding:
Basic 21,958 21,857 21,881 21,858
========= ========= ========= =========
Diluted 22,119 21,910 21,945 21,971
========= ========= ========= =========
LITTELFUSE, INC.
Condensed Consolidated Balance Sheets
(in thousands, unaudited)
January 3, 2004 December 28, 2002
--------------- -----------------
Assets:
Cash and cash equivalents $ 22,128 $ 27,750
Short-term investments - 8,806
Receivables 52,149 40,810
Inventories 52,598 44,533
Other current assets 21,797 15,146
----------- -----------
Total current assets 148,672 137,045
Property, plant, and equipment, net 98,274 81,122
Reorganization value, net 27,265 27,665
Other intangible assets, net 33,526 28,291
Other assets 3,365 3,355
----------- -----------
$ 311,102 $ 277,478
=========== ===========
Liabilities and Shareholders' Equity:
Current liabilities excluding
current portion of long-term debt $ 64,909 $ 41,308
Current portion of long-term debt 18,496 18,994
----------- -----------
Total current liabilities 83,405 60,302
Long-term debt 10,201 20,252
Deferred liabilities - 1,713
Accrued post-retirement benefits 4,564 9,027
Other long-term liabilities 1,215 473
Shareholders' equity 211,717 185,711
----------- -----------
Shares issued and outstanding
at Jan 3, 2004: 22,002,119 $ 311,102 $ 277,478
=========== ===========
LITTELFUSE, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
For the For the
Three Months Ended Twelve Months Ended
------------------ -------------------
Jan 3, Dec 28, Jan 3, Dec 28,
------ ------- ------ ------
2004 2002 2004 2002
---- ---- ---- ----
Operating activities:
Net income $ 4,191 $ 2,540 $15,339 $ 9,620
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 6,172 4,904 20,029 18,137
Amortization 497 192 1,072 767
Changes in operating assets
and liabilities:
Accounts receivable 4,995 9,747 387 2,794
Inventories 4,277 (257) 5,865 4,762
Accounts payable and
accrued expenses (4,005) (2,185) 1,809 3,296
Other, net 4,149 790 2,718 1,382
-------- -------- -------- --------
Net cash provided by
operating activities 20,276 15,731 47,219 40,758
Cash used in investing activities:
Purchases of property, plant,
and equipment, net (2,329) (3,175) (14,041) (8,360)
Acquisitions, net of cash
acquired (94) - (44,590) (15,031)
Sale (purchase) of marketable
securities, net - (612) 8,806 (8,806)
-------- -------- -------- --------
Net cash used in investing
activities (2,423) (3,787) (49,825) (32,197)
Cash used in financing activities:
Proceeds from long-term debt - 112 30,500 112
Payments of long-term debt (12,005) (1,264) (41,996) (13,130)
Proceeds (purchases) from
exercise of stock options
and warrants, net 5,882 (2,163) 6,864 (1,942)
-------- -------- -------- --------
Net cash used in financing
activities (6,123) (3,315) (4,632) (14,960)
Effect of exchange rate
changes on cash (340) 1,063 1,616 (378)
-------- -------- -------- --------
Increase/(decrease) in cash
and cash equivalents 11,390 9,692 (5,622) (6,777)
Cash and cash equivalents at
beginning of period 10,738 18,058 27,750 34,527
-------- -------- -------- --------
Cash and cash equivalents at
end of period $22,128 $27,750 $22,128 $27,750
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