LITTELFUSE REPORTS FOURTH QUARTER AND FULL YEAR RESULTS FOR 2022
Record annual sales, earnings and cash generation driven by resilient business model and growth strategy
CHICAGO, February 1, 2023 - Littelfuse, Inc. (NASDAQ: LFUS), a diversified, industrial technology manufacturing company empowering a sustainable, connected, and safer world, today reported financial results for the fourth quarter and full year ended December 31, 2022:
Fourth Quarter 2022 Results
•Net sales of $613.3 million were up 11% versus the prior year period, and up 4% organically
•GAAP diluted EPS was $3.74, an increase of 80% from the prior year period; adjusted diluted EPS was $3.34, up 6% versus the prior year period
Full Year 2022 Results
•Net sales of $2.5 billion were up 21% in total versus the prior year, and up 11% organically
•GAAP diluted EPS was $14.94, up 31% versus the prior year; adjusted diluted EPS of $16.87 increased 28% versus the prior year
•Cash flow from operations was $419.7 million and free cash flow was $315.4 million, both 12% higher than the prior year
“In 2022 we achieved record levels of sales, earnings and cash generation, including double-digit sales growth in each of our business segments,” said Dave Heinzmann, Littelfuse President and Chief Executive Officer. “We achieved these outstanding results by continuing to expand our leadership in high-growth markets with significant new business wins and adding over $200 million in sales from two acquisitions. I want to thank our global teams for their hard work and persistent commitment to serve our customers. Our demonstrated ability to drive double-digit growth over the past five-, ten-, and fifteen-year periods speaks to the resiliency of our business model and the strength of our growth strategy. Though we may see some near-term market challenges, I am confident our ongoing execution, investments and diversification position us to deliver continued, substantial value to all of our stakeholders.”
First Quarter of 2023*
Based on current market conditions, for the first quarter the company expects,
•Net sales in the range of $575 to $605 million, adjusted diluted EPS in the range of $2.73 to $2.97 and an adjusted effective tax rate of approximately 19%
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*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
•The company will pay a cash dividend on its common stock of $0.60 per share on March 9, 2023, to shareholders of record as of February 23, 2023
Conference Call and Webcast Information
Littelfuse will host a conference call on Thursday, February 2, 2023, 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 18,000 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; the severity and duration of the COVID-19 pandemic and the measures taken in response thereto and the effects of those items on the company’s business; 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's 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 January 1, 2022.
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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 January 1, 2022, its Quarterly Report on Form 10-Q for the quarter ended October 1, 2022, 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 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 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.
CONTACT: Trisha Tuntland
Head of Investor Relations
(773) 628-2163
LFUS-F
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LITTELFUSE, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, 2022
January 1, 2022
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
562,588
$
478,473
Short-term investments
84
28
Trade receivables, less allowances of $83,562 and $59,232, respectively
306,578
275,192
Inventories
547,690
445,671
Prepaid income taxes and income taxes receivable
7,215
2,035
Prepaid expenses and other current assets
87,641
68,812
Total current assets
1,511,796
1,270,211
Net property, plant, and equipment
481,110
437,889
Intangible assets, net of amortization
593,970
407,126
Goodwill
1,186,922
929,790
Investments
24,121
39,211
Deferred income taxes
14,367
13,127
Right of use lease assets, net
57,382
29,616
Other assets
34,066
24,734
Total assets
$
3,903,734
$
3,151,704
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
208,571
$
222,039
Accrued liabilities
187,057
159,689
Accrued income taxes
41,793
27,905
Current portion of long-term debt
134,874
25,000
Total current liabilities
572,295
434,633
Long-term debt, less current portion
866,623
611,897
Deferred income taxes
100,230
81,289
Accrued post-retirement benefits
28,037
37,037
Non-current lease liabilities
45,661
22,305
Other long-term liabilities
79,510
71,023
Total equity
2,211,378
1,893,520
Total liabilities and equity
$
3,903,734
$
3,151,704
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LITTELFUSE, INC.
CONSOLIDATED STATEMENTS OF NET INCOME
(Unaudited)
Three Months Ended
Fiscal Year Ended
(in thousands, except per share data)
December 31, 2022
January 1, 2022
December 31, 2022
January 1, 2022
Net sales
$
613,251
$
553,065
$
2,513,897
$
2,079,928
Cost of sales
384,726
353,573
1,506,984
1,308,002
Gross profit
228,525
199,492
1,006,913
771,926
Selling, general, and administrative expenses
85,993
75,667
344,813
275,457
Research and development expenses
26,806
19,747
95,602
65,940
Amortization of intangibles
15,812
11,121
55,695
42,729
Restructuring, impairment, and other charges
5,712
160
9,977
2,158
Total operating expenses
134,323
106,695
506,087
386,284
Operating income
94,202
92,797
500,826
385,642
Interest expense
9,147
4,626
26,216
18,527
Foreign exchange (gain) loss
(15,692)
8,843
24,359
17,158
Other (income) expense, net
(2,582)
19,799
7,207
8,932
Income before income taxes
103,329
59,529
443,044
341,025
Income taxes
10,025
7,585
69,738
57,219
Net income
$
93,304
$
51,944
$
373,306
$
283,806
Income per share:
Basic
$
3.77
$
2.11
$
15.09
$
11.54
Diluted
$
3.74
$
2.08
$
14.94
$
11.38
Weighted-average shares and equivalent shares outstanding:
Basic
24,758
24,660
24,734
24,603
Diluted
24,978
25,001
24,986
24,932
Comprehensive income
139,811
74,009
351,005
301,500
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LITTELFUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended
(in thousands)
December 31, 2022
January 1, 2022
OPERATING ACTIVITIES
Net income
$
373,306
$
283,806
Adjustments to reconcile net income to net cash provided by operating activities
188,871
147,276
Changes in operating assets and liabilities:
Trade receivables
(19,334)
(10,234)
Inventories
(89,235)
(104,555)
Accounts payable
(22,403)
40,481
Accrued liabilities and income taxes
(9,756)
30,793
Prepaid expenses and other assets
(1,731)
(14,223)
Net cash provided by operating activities
419,718
373,344
INVESTING ACTIVITIES
Acquisitions of businesses, net of cash acquired
(532,670)
(423,633)
Purchases of property, plant, and equipment
(104,341)
(90,562)
Net proceeds from sale of property, plant, and equipment, and other
676
15,425
Other
(62)
(390)
Net cash used in investing activities
(636,397)
(499,160)
FINANCING ACTIVITIES
Net proceeds (payments) of credit facility and senior notes
371,250
(32,619)
Cash dividends paid
(55,911)
(49,730)
All other cash (used in) provided by financing activities
(5,137)
13,365
Net cash provided by (used in) financing activities
310,202
(68,984)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
(11,420)
(9,889)
Increase (decrease) in cash, cash equivalents, and restricted cash
82,103
(204,689)
Cash, cash equivalents, and restricted cash at beginning of period
482,836
687,525
Cash, cash equivalents, and restricted cash at end of period
$
564,939
$
482,836
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LITTELFUSE, INC.
NET SALES AND OPERATING INCOME BY SEGMENT
(Unaudited)
Fourth Quarter
Year-to-Date
(in thousands)
2022
2021
% Growth /(Decline)
2022
2021
% Growth /(Decline)
Net sales
Electronics
$
371,193
$
341,622
8.7
%
$
1,492,819
$
1,300,744
14.8
%
Transportation
167,874
141,796
18.4
%
716,140
528,058
35.6
%
Industrial
74,184
69,647
6.5
%
304,938
251,126
21.4
%
Total net sales
$
613,251
$
553,065
10.9
%
$
2,513,897
$
2,079,928
20.9
%
Operating income
Electronics
$
91,941
$
79,350
15.9
%
$
431,616
$
309,633
39.4
%
Transportation
5,935
10,599
(44.0)
%
63,539
65,979
(3.7)
%
Industrial
8,885
4,169
113.1
%
48,853
22,621
116.0
%
Other (a)
(12,559)
(1,321)
N.M.
(43,182)
(12,591)
N.M.
Total operating income
$
94,202
$
92,797
1.5
%
$
500,826
$
385,642
29.9
%
Operating Margin
15.4
%
16.8
%
19.9
%
18.5
%
Interest expense
9,147
4,626
26,216
18,527
Foreign exchange (gain) loss
(15,692)
8,843
24,359
17,158
Other (income) expense, net
(2,582)
19,799
7,207
8,932
Income before income taxes
$
103,329
$
59,529
73.6
%
$
443,044
$
341,025
29.9
%
(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
Fourth Quarter
Year-to-Date
(in thousands)
2022
2021
% Growth /(Decline)
2022
2021
% Growth /(Decline)
Operating Margin
Electronics
24.8
%
23.2
%
1.6
%
28.9
%
23.8
%
5.1
%
Transportation
3.5
%
7.5
%
(4.0)
%
8.9
%
12.5
%
(3.6)
%
Industrial
12.0
%
6.0
%
6.0
%
16.0
%
9.0
%
7.0
%
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LITTELFUSE, INC.
SUPPLEMENTAL FINANCIAL INFORMATION
(In millions of USD except per share amounts - unaudited)
Non-GAAP EPS reconciliation
Q4-22
Q4-21
YTD-22
YTD-21
GAAP diluted EPS
$
3.74
$
2.08
$
14.94
$
11.38
EPS impact of Non-GAAP adjustments (below)
(0.40)
1.08
1.93
1.81
Adjusted diluted EPS
$
3.34
$
3.16
$
16.87
$
13.19
Non-GAAP adjustments - (income) / expense
Q4-22
Q4-21
YTD-22
YTD-21
Acquisition-related and integration costs (a)
$
2.8
$
3.6
$
17.6
$
7.0
Purchase accounting inventory adjustments (b)
4.0
1.6
15.6
8.4
Restructuring, impairment and other charges (c)
5.7
0.2
10.0
2.2
Gain on sale of fixed assets (d)
—
(4.1)
—
(5.0)
Non-GAAP adjustments to operating income
12.5
1.3
43.2
12.6
Other expense (income), net (e)
—
20.8
(0.5)
21.4
Non-operating foreign exchange (gain) loss
(15.7)
8.9
24.4
17.2
Non-GAAP adjustments to income before income taxes
Consolidated Net Leverage Ratio (as defined in the Credit Agreement) *
1.2x
* Our Credit Agreement and Private Placement Note with maturities ranging from 2023 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 cost of sales.
(c) reflected in restructuring, impairment and other charges.
(d) reflected a gain of $4.1 million recorded in SG&A during the fourth quarter of 2021 for a total year-to-date gain of $5.0 million from the sale of two buildings within the Electronics segment during 2021.
(e) 2022 year-to-date amount included $0.5 million gain from the sale of a building within the Transportation segment. Q4 2021 included a $19.9 million non-cash pension settlement charge, a $0.7 million charge for an asset retirement obligation related to the disposal of a business in 2019 and a $0.2 million increase in coal mining reserves. 2021 year-to-date amount also included $0.5 million of impairment charges on certain other investments.
(f) reflected the tax impact associated with the non-GAAP adjustments.
