Littelfuse Reports Second Quarter Results
DES PLAINES, Ill.--July 29, 2004--Littelfuse, Inc. today reported sales and earnings for the second quarter of 2004.Sales for the second quarter of 2004 were $128.8 million, a 77% increase from sales of $72.8 million in the second quarter of 2003. The recent acquisitions of Teccor Electronics and Heinrich Industrie accounted for approximately $40 million of the increase from the prior year quarter. Excluding these acquisitions, sales for the second quarter of 2004 increased approximately 22% compared to the prior year quarter. Diluted earnings per share were $0.46 in the second quarter of 2004 compared to earnings of $0.18 per diluted share for the second quarter of 2003. Earnings for the second quarter of 2004 include $1.3 million of pre-tax restructuring charges related to manufacturing transfers and plant downsizing activities. The Heinrich business acquired on May 6, 2004 was accretive to earnings by $0.01 per share for the second quarter.
Sales for the first six months of 2004 were $240.2 million, a 68% increase compared to the prior year period. Diluted earnings per share through the first six months of 2004 were $0.89 compared to earnings of $0.32 per diluted share for the first six months of 2003.
"Strength in each of our key markets continued through the second quarter," said Howard B. Witt, Chairman, President and Chief Executive Officer. "These improving markets, combined with early successes from our solution-selling strategy and the addition of Teccor and Heinrich, resulted in record top-line growth."
By geographic segment and excluding Heinrich, sales for the second quarter of 2004 increased 52% in the Americas, 33% in Europe and 82% in Asia, compared to the same period in the prior year. By market and excluding Heinrich, sales for the second quarter of 2004 were up 94% for electronics, 10% for automotive and 19% for electrical, compared to the prior year period. Favorable currency effects contributed two percentage points to the overall growth rate, with electronics and automotive benefiting three points and two points respectively.
"Our electronic end markets continue to be healthy, with digital consumer, telecom and industrial all contributing to our strong second quarter," said Witt. "Automotive sales, while down sequentially from the first quarter, showed growth over the prior year quarter across all geographies. Electrical sales have begun to trend up, reflecting continued improvement in industrial activity and the beginnings of a recovery in non-residential construction," added Witt.
"Our profit improvement initiatives are on track as the business (excluding Heinrich) continues to make progress toward our 15% operating margin goal," said Phil Franklin, Vice President, Operations Support and Chief Financial Officer. "The sequential decline in operating margin in the second quarter was due entirely to the addition of Heinrich and the $1.3 million of manufacturing restructuring charges. In the second half of the year we expect cost reductions to more than offset price erosion, but we will incur additional manufacturing restructuring charges of approximately $1.4 million pre-tax, mostly in the third quarter," he added.
Cash from operating activities was $16.1 million for the second quarter of 2004 compared to $8.0 million for the same quarter last year. Through six months of 2004, cash from operating activities was $19.1 million compared to $8.6 million for the prior year period. Capital expenditures for the first six months were $9.1 million compared to $4.8 million for the prior year period. "Cash flow ramped-up in the second quarter due to strong profitability and excellent working capital control. In the second half of the year, we expect cash from operating activities to continue strong, but capital expenditures will also increase significantly as we add capacity for both electronic and automotive products," said Franklin.
After purchasing 82.4% of the Heinrich shares on May 6, 2004 for 39.5 million euros, Littelfuse initiated a tender offer for the remaining shares. The tender offer is now complete with the result that Littelfuse purchased additional Heinrich shares for approximately 2.1 million euros, increasing its total ownership to 86.7%.
"Overall, we are pleased with the progress we have made so far this year," said Witt. "Teccor is essentially fully integrated and has proven to be a tremendous addition to Littelfuse and, while the integration of Heinrich will be a longer-term project, early indications are positive. Our cost position continues to improve as we move forward aggressively on our cost savings initiatives, and our solution-selling strategy is beginning to gain traction in the marketplace."
Littelfuse will host a conference call today, Thursday, July 29, 2004, at 11:00 a.m. Eastern/10:00 a.m. Central time to discuss the second 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 September 30, 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.
LITTELFUSE, INC.
Sales by Market and Geography
(Dollars in millions)
Second Quarter Year-to-Date
--------------------------- ---------------------------
2004 2003 % Change 2004 2003 % Change
---- ---- -------- ---- ---- --------
Market
------
Electronics $ 77.1 $ 39.8 94% $151.6 $ 76.9 97%
Automotive 27.1 24.6 10% 55.3 49.3 12%
Electrical 10.0 8.4 19% 18.7 16.6 13%
------ ------ ----- ------ ------ -----
Subtotal 114.2 72.8 57% 225.6 142.8 58%
Heinrich 14.6 - - 14.6 - -
------ ------ ----- ------ ------ -----
Total $128.8 $ 72.8 77% $240.2 $142.8 68%
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Second Quarter Year-to-Date
--------------------------- ---------------------------
2004 2003 % Change 2004 2003 % Change
---- ---- -------- ---- ---- --------
Geography
---------
Americas $ 55.7 $ 36.2 54% $108.9 $ 70.9 54%
Europe 30.9 15.1 105% 51.8 28.4 82%
Asia Pacific 42.2 21.5 96% 79.5 43.5 83%
------ ------ ----- ------ ------ -----
Total $128.8 $ 72.8 77% $240.2 $142.8 68%
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LITTELFUSE, INC.
Condensed Consolidated Statements of Income
(in thousands, except per share data, unaudited)
For the Three Months For the Six Months
Ended Ended
-------------------- -------------------
July 3, June 28, July 3, June 28,
------- -------- ------- --------
2004 2003 2004 2003
---- ---- ---- ----
Net sales $128,759 $72,790 $240,177 $142,752
Cost of sales 84,580 48,915 156,193 95,800
-------- ------- -------- --------
Gross profit 44,179 23,875 83,984 46,952
Selling, general and
administrative expenses 23,572 15,500 44,115 31,222
Research and development
expenses 4,156 1,861 7,337 3,794
Amortization of intangibles 470 191 809 383
-------- ------- -------- --------
Operating income 15,981 6,323 31,723 11,553
Interest expense 492 514 918 1,050
Other income (768) (209) (461) (551)
-------- ------- -------- --------
Income before income taxes
and minority interest 16,257 6,018 31,266 11,054
Minority interest 60 - 60 -
Income taxes 5,853 2,167 11,256 3,979
Net income $ 10,344 $ 3,851 $ 19,950 $ 7,075
======== ======= ======== ========
Net income per share:
Basic $ 0.47 $ 0.18 $ 0.90 $ 0.32
======== ======= ======== ========
Diluted $ 0.46 $ 0.18 $ 0.89 $ 0.32
======== ======= ======== ========
Weighted average shares and
equivalent shares
outstanding:
Basic 22,180 21,789 22,107 21,780
======== ======= ======== ========
Diluted 22,681 21,856 22,515 21,838
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LITTELFUSE, INC.
Condensed Consolidated Balance Sheets
(in thousands, unaudited)
July 3, 2004 January 3, 2004
------------ ---------------
Assets:
Cash and cash equivalents $ 34,384 $ 22,128
Receivables 81,766 52,149
Inventories 73,681 52,598
Other current assets 24,440 22,265
-------- --------
Total current assets 214,271 149,140
Property, plant, and equipment, net 130,497 98,479
Intangible assets, net 19,565 11,943
Goodwill 56,375 48,643
Other assets 8,201 3,365
-------- --------
$428,909 $311,570
======== ========
Liabilities and Shareholders' Equity:
Current liabilities excluding current
portion of long-term debt $ 94,293 $ 64,892
Current portion of long-term debt 47,392 18,496
-------- --------
Total current liabilities 141,685 83,388
Long-term debt 11,573 10,201
Accrued post-retirement benefits 17,780 4,564
Other long-term liabilities 6,131 1,072
Minority interest 12,282 143
Shareholders' equity 239,458 212,202
-------- --------
Shares issued and outstanding at
July 3, 2004: 22,282,240 $428,909 $311,570
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LITTELFUSE, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
For the Three Months For the Six Months
Ended Ended
-------------------- ------------------
July 3, June 28, July 3, June 28,
------- -------- ------- --------
2004 2003 2004 2003
---- ---- ---- ----
Operating activities:
Net income $ 10,344 $ 3,851 $ 19,950 $ 7,075
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation 6,177 4,292 11,816 8,634
Amortization 470 191 809 383
Changes in operating assets
and liabilities:
Accounts receivable (5,597) 533 (13,818) (1,802)
Inventories 1,137 (224) (1,233) (2,721)
Accounts payable and
accrued expenses 2,189 (1,168) 1,779 (614)
Other, net 1,407 500 (241) (2,374)
-------- -------- -------- --------
Net cash provided by
operating activities 16,127 7,975 19,062 8,581
Cash used in investing
activities:
Purchases of property, plant,
and equipment (6,059) (2,162) (9,051) (4,789)
Acquisitions, net of cash
acquired of $15,713 (32,807) - (32,807) -
Sale of property, plant &
equipment - - - 2,213
Sale (purchase) of marketable
securities, net - 10,403 - 8,806
-------- -------- -------- --------
Net cash used in investing
activities (38,866) 8,241 (41,858) 6,230
Cash provided by (used in)
financing activities:
Proceeds from long-term
debt 32,000 3 32,000 -
Payments of long-term debt (3,008) - (3,047) (1,441)
Proceeds from exercise of
stock options and warrants 6,425 317 8,309 952
-------- -------- -------- --------
Net cash provided by (used
in) financing activities 35,417 320 37,262 (489)
Effect of exchange rate
changes on cash (2,189) 229 (2,210) 207
-------- -------- -------- --------
Increase/(decrease) in cash
and cash equivalents 10,489 16,765 12,256 14,529
Cash and cash equivalents at
beginning of period 23,895 25,514 22,128 27,750
-------- -------- -------- --------
Cash and cash equivalents at
end of period $ 34,384 $ 42,279 $ 34,384 $ 42,279
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