Littelfuse Reports Third Quarter Results
DES PLAINES, Ill.--Nov. 1, 2004--Littelfuse, Inc. today reported sales and earnings for the third quarter of 2004.Sales for the third quarter of 2004 were $135.9 million, a 44% increase from sales of $94.7 million in the third quarter of 2003. The recent acquisition of a majority interest in Heinrich Industrie accounted for $23.4 million of the increase from the prior year quarter. Excluding Heinrich, sales for the third quarter of 2004 increased 19% compared to the prior year quarter. Diluted earnings per share were $0.49 in the third quarter of 2004 compared to $0.19 for the third quarter of 2003. Heinrich was accretive to earnings by approximately $0.02 per share for the third quarter of 2004. Littelfuse acquired a majority interest in Heinrich on May 6, 2004 and currently owns approximately 87% of its shares.
For the first nine months of 2004, sales were $376.1 million, a 58% increase from sales of $237.5 million for the first nine months of 2003. Diluted earnings per share through the first nine months of 2004 were $1.38 compared to earnings of $0.51 per share for the first nine months of 2003.
"Strong performance in our electronic markets and the addition of Heinrich contributed to record sales and earnings for the third quarter," said Howard B. Witt, Chairman, President and Chief Executive Officer. "There was much to be pleased with in our third quarter performance, including continued growth in our electronics business, continued margin improvement across all of our businesses and the positive contributions of both the Teccor and Heinrich acquisitions."
By geographic segment and excluding Heinrich, sales for the third quarter of 2004 increased 19% in the Americas, 19% in Europe and 18% in Asia, compared to the same period in the prior year. By market and excluding Heinrich, sales for the third quarter of 2004 were up 27% for electronics, 1% for automotive and 9% 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 two points and three points, respectively.
"Our electronic business benefited from the strong momentum built up in the first half of the year. While we have seen some recent slowing, due in part to increased inventory in our distribution channels, we believe our end markets are still fundamentally healthy," said Witt. "After a strong first half, our automotive business slowed as expected in the third quarter. Electrical sales continue to trend above last year, reflecting steady recovery in the industrial and non-residential construction markets."
"Cost reduction efforts in manufacturing, purchasing and logistics continue to produce results," said Phil Franklin, Vice President, Operations Support and Chief Financial Officer. "Operating margin for the base business hit 15% for the first time since 2000 and Heinrich margins, while well below those of Littelfuse, have begun to improve," added Franklin.
Cash from operating activities was $23.6 million for the third quarter of 2004, compared to $18.5 million for the same quarter last year. Through nine months of 2004, cash from operating activities was $42.7 million compared to $26.9 million for the prior year period. Capital expenditures for the first nine months were $16.4 million compared to $11.7 million for the prior year period. "Free cash flow was strong in the third quarter despite increases in inventories and capital expenditures, and should continue strong through the end of the year," said Franklin.
During the third quarter, Littelfuse repurchased 168,400 shares of its common stock at an average price of $33.28. These are the only shares purchased to date in 2004.
"While we have begun to see softness in some of our markets, we cannot help but be pleased with the performance of the Company this year," said Witt. "Teccor is now fully integrated and contributing in a major way, both strategically and financially. Heinrich has been accretive from day one and all early signs continue to be positive, although much of the integration is still in front of us. We continue to have success in our relentless pursuit of cost reductions, which has positioned us well in our very competitive markets. And finally, we are more convinced than ever that our solution selling strategy is the right approach at the right time, as it begins to produce results in the marketplace."
Littelfuse will host a conference call today, Monday, November 1, 2004, at 11:00 a.m. Eastern/10:00 a.m. Central time to discuss the third 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 December 31, 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, Germany, Hungary 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)
Third Quarter Year-to-Date
---------------------------- --------------------------
2004 2003 % Change 2004 2003 % Change
-------- -------- --------- ------- -------- ---------
Market
------------
Electronics $79.2 $62.5 27% $230.9 $139.4 66%
Automotive 23.4 23.1 1% 78.6 72.4 9%
Electrical 9.9 9.1 9% 28.6 25.7 11%
-------- -------- --------- ------- -------- ---------
Subtotal 112.5 94.7 19% 338.1 237.5 42%
Heinrich 23.4 - - 38.0 - -
-------- -------- --------- ------- -------- ---------
Total $135.9 $94.7 44% $376.1 $237.5 58%
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Third Quarter Year-to-Date
---------------------------- --------------------------
2004 2003 % Change 2004 2003 % Change
-------- -------- --------- ------- -------- ---------
Geography
------------
Americas $57.4 $46.4 24% $166.0 $117.3 42%
Europe 23.5 15.3 54% 75.5 43.7 73%
Asia Pacific 55.0 33.0 67% 134.6 76.5 76%
-------- -------- --------- ------- -------- ---------
Total $135.9 $94.7 44% $376.1 $237.5 58%
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LITTELFUSE, INC.
Condensed Consolidated Statements of Income
(in thousands, except per share data, unaudited)
For the Three For the Nine
Months Ended Months Ended
------------- ------------
Oct 2, Sept 27, Oct 2, Sept 27,
2004 2003 2004 2003
---- ---- ---- ----
Net sales $135,926 $94,696 $376,103 $237,447
Cost of sales 86,565 66,910 242,758 162,709
-------- ------- -------- --------
Gross profit 49,361 27,786 133,345 74,738
Selling, general and
administrative expenses 26,181 18,228 70,296 49,449
Research and development
expenses 4,324 2,297 11,661 6,092
Amortization of intangibles 480 192 1,289 575
-------- ------- --------- --------
Operating income 18,376 7,069 50,099 18,622
Interest expense 387 544 1,305 1,594
Other (income) expense 303 160 (158) (391)
-------- ------- --------- --------
Income before income taxes
and minority interest 17,686 6,365 48,952 17,419
Minority interest 75 - 135 -
Income taxes 6,361 2,292 17,617 6,271
-------- ------- --------- --------
Net income $ 11,250 $ 4,073 $ 31,200 $ 11,148
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Net income per share:
Basic $ 0.50 $ 0.19 $ 1.41 $ 0.51
======== ======= ======== ========
Diluted $ 0.49 $ 0.19 $ 1.38 $ 0.51
======== ======= ======== ========
Weighted average shares and
equivalent shares
outstanding:
Basic 22,350 21,823 22,189 21,794
======== ======= ======== ========
Diluted 22,844 21,955 22,594 21,862
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LITTELFUSE, INC.
Condensed Consolidated Balance Sheets
(in thousands, unaudited)
October 2, January 3,
2004 2004
Assets: ---- ----
Cash and cash equivalents $ 27,325 $ 22,128
Receivables 82,959 52,149
Inventories 78,769 52,598
Other current assets 28,372 22,265
--------- ---------
Total current assets 217,425 149,140
Property, plant, and equipment, net 130,247 98,479
Intangible assets, net 18,797 11,943
Goodwill 61,704 48,643
Other assets 9,604 3,365
--------- ---------
$ 437,777 $ 311,570
========= =========
Liabilities and Shareholders' Equity:
Current liabilities excluding current
portion of long-term debt $ 100,334 $ 64,892
Current portion of long-term debt 38,403 18,496
--------- ---------
Total current liabilities 138,737 83,388
Long-term debt 1,574 10,201
Accrued post-retirement benefits 18,717 4,564
Other long-term liabilities 14,476 1,072
Minority interest 12,309 143
Shareholders' equity 251,964 212,202
--------- ---------
Shares issued and outstanding
at October 2, 2004: 22,252,982 $ 437,777 $ 311,570
========= =========
LITTELFUSE, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
For the Three For the Nine
Months Ended Months Ended
------------- ------------
Oct 2, Sept 27, Oct 2, Sept 27,
2004 2003 2004 2003
Operating activities: ---- ---- ---- ----
Net income $ 11,250 $ 4,073 $ 31,200 $ 11,148
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation 5,828 5,223 17,644 13,857
Amortization 480 192 1,289 575
Changes in operating assets and
liabilities:
Accounts receivable (598) (2,806) (14,416) (4,608)
Inventories (6,834) 4,309 (8,067) 1,588
Accounts payable and accrued
expenses 1,817 6,428 3,596 5,814
Other, net 11,683 1,125 11,442 (1,431)
------ ------ ------ ------
Net cash provided by operating
activities 23,626 18,544 42,688 26,943
Cash provided by (used in)
investing activities:
Purchases of property, plant, and
equipment (7,343) (9,136) (16,394) (11,712)
Acquisitions, net of cash
acquired (2,512) (44,496) (35,319) (44,496)
Sale of property, plant &
equipment 2,684 - 2,684 -
Sale of marketable securities,
net - - - 8,806
------ ------ ------ ------
Net cash provided by (used in)
investing activities (7,171) (53,632) (49,029) (47,402)
Cash provided by (used in)
financing activities:
Proceeds from long-term debt 700 30,500 32,700 30,500
Payments of long-term debt (19,603) (28,550) (22,650) (29,991)
Proceeds from exercise of
stock options 2,026 282 10,335 982
Purchase of treasury stock (5,604) - (5,604) -
------ ------ ------ ------
Net cash provided by (used in)
financing activities (22,481) 2,232 14,781 1,491
Effect of exchange rate changes
on cash (1,033) 1,315 (3,243) 1,956
------ ------ ------ ------
Increase/(decrease) in cash and
cash equivalents (7,059) (31,541) 5,197 (17,012)
Cash and cash equivalents at
beginning of period 34,384 42,279 22,128 27,750
------ ------ ------ ------
Cash and cash equivalents at end
of period $ 27,325 $ 10,738 $ 27,325 $ 10,738
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