LITTELFUSE REPORTS FOURTH QUARTER AND FULL YEAR RESULTS FOR 2021
Record annual sales and earnings driven by strong business execution
CHICAGO, February 1, 2022 - Littelfuse, Inc. (NASDAQ: LFUS), an industrial technology manufacturing company empowering a sustainable, connected, and safer world, today reported financial results for the fourth quarter and full year ended January 1, 2022:
Fourth Quarter 2021 Results
•Net sales of $553.1 million were up 38% in total and 23% organically versus the prior year, driven by stronger than expected demand across all segments
•GAAP operating margin was 16.8%; adjusted operating margin was 17.0%
•GAAP diluted EPS was $2.08 and adjusted diluted EPS was $3.16, benefiting from a lower effective tax rate driven by the receipt of a tax holiday, versus the forecasted rate, equating to approximately $0.21 in EPS
•Cash flow from operations was $133 million and free cash flow was $100 million
•On November 30, the company completed its acquisition of Carling Technologies, Inc., a leader in switching, circuit protection, and power distribution technologies with a strong global presence in commercial transportation, communications infrastructure and marine markets
Full Year 2021 Results
•Net sales of $2.1 billion were up 44% in total and 33% organically versus the prior year
•GAAP operating margin was 18.5%; adjusted operating margin was 19.1%
•GAAP diluted EPS was $11.38, up 115% versus the prior year; adjusted diluted EPS of $13.19 increased 106% versus the prior year
•Cash flow from operations was $373 million and free cash flow was $283 million, representing approximately 100% conversion from net income
“We finished the year with remarkable revenue and earnings growth, with more than 30% sales growth across all of our segments,” said Dave Heinzmann, Littelfuse President and Chief Executive Officer. “I want to thank our global teams for their tremendous efforts. Their commitment to execution during these challenging times has been outstanding. We achieved these record results while advancing our strategic initiatives, driving content and share gains in high-growth markets, both organically and through acquisition. I am confident our ongoing execution, coupled with our investments in product development, digital presence and eMobility, position us to achieve our long-term growth strategy.”
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First Quarter of 2022*
For the first quarter, the company expects net sales in the range of $563 to $577 million, adjusted diluted EPS in the range of $3.14 to $3.30 and an adjusted effective tax rate of approximately 17%.
*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 $0.53 per share on March 10, 2022 to shareholders of record as of February 24, 2022
Conference Call and Webcast Information
Littelfuse will host a conference call on Wednesday, February 2, 2022, 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 (NASDAQ: LFUS) is an industrial technology manufacturing company empowering a sustainable, connected, and safer world. Across more than 15 countries, and with approximately 17,000 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. These statements may involve risks and uncertainties, including, but 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, Inc.'s ("Littelfuse" or the "Company") 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 26, 2020.
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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 December 26, 2020, 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 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 (decline), 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, consolidated total gross debt, consolidated EBITDA (as defined in the private placement senior notes), and ratio of consolidated total gross debt to consolidated EBITDA. 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 (decline), 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 consolidated total gross debt, consolidated EBITDA, and ratio of consolidated total gross debt to consolidated EBITDA 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)
January 1, 2022
December 26, 2020
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
478,473
$
687,525
Short-term investments
28
54
Trade receivables, less allowances of $59,232 and $45,237, respectively
275,192
232,760
Inventories
445,671
258,002
Prepaid income taxes and income taxes receivable
2,035
3,029
Prepaid expenses and other current assets
68,812
35,939
Total current assets
1,270,211
1,217,309
Net property, plant, and equipment
437,889
344,178
Intangible assets, net of amortization
407,126
291,887
Goodwill
929,790
816,812
Investments
39,211
30,547
Deferred income taxes
13,127
11,224
Right of use assets, net
29,616
17,615
Other assets
24,734
18,021
Total assets
$
3,151,704
$
2,747,593
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
222,039
$
145,984
Accrued liabilities
159,689
110,478
Accrued income taxes
27,905
19,186
Current portion of long-term debt
25,000
—
Total current liabilities
434,633
275,648
Long-term debt, less current portion
611,897
687,034
Deferred income taxes
81,289
50,134
Accrued post-retirement benefits
37,037
45,802
Non-current operating lease liabilities
22,305
12,950
Other long-term liabilities
71,023
67,252
Total equity
1,893,520
1,608,773
Total liabilities and equity
$
3,151,704
$
2,747,593
Page 5
LITTELFUSE, INC.
CONSOLIDATED STATEMENTS OF NET INCOME
(Unaudited)
Three Months Ended
Fiscal Year Ended
(in thousands, except per share data)
January 1, 2022
December 26, 2020
January 1, 2022
December 26, 2020
Net sales
$
553,065
$
400,696
$
2,079,928
$
1,445,695
Cost of sales
353,573
262,613
1,308,002
944,523
Gross profit
199,492
138,083
771,926
501,172
Selling, general, and administrative expenses
75,667
50,179
275,457
204,507
Research and development expenses
19,747
11,951
65,940
52,538
Amortization of intangibles
11,121
10,127
42,729
40,039
Restructuring, impairment, and other charges
160
812
2,158
41,716
Total operating expenses
106,695
73,069
386,284
338,800
Operating income
92,797
65,014
385,642
162,372
Interest expense
4,626
4,816
18,527
21,077
Foreign exchange loss (gain)
8,843
(5,275)
17,158
(14,875)
Other expense (income), net
19,799
(3,440)
8,932
(5,083)
Income before income taxes
59,529
68,913
341,025
161,253
Income taxes
7,585
9,936
57,219
31,267
Net income
$
51,944
$
58,977
$
283,806
$
129,986
Income per share:
Basic
$
2.11
$
2.41
$
11.54
$
5.33
Diluted
$
2.08
$
2.39
$
11.38
$
5.29
Weighted-average shares and equivalent shares outstanding:
Basic
24,660
24,423
24,603
24,371
Diluted
25,001
24,726
24,932
24,592
Comprehensive income
74,009
75,058
301,500
145,652
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LITTELFUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended
(in thousands)
January 1, 2022
December 26, 2020
OPERATING ACTIVITIES
Net income
$
283,806
$
129,986
Adjustments to reconcile net income to net cash provided by operating activities
147,276
123,685
Changes in operating assets and liabilities:
Trade receivables
(10,234)
(25,588)
Inventories
(104,555)
(12,425)
Accounts payable
40,481
28,820
Accrued liabilities and income taxes
30,793
6,765
Prepaid expenses and other assets
(14,223)
6,788
Net cash provided by operating activities
373,344
258,031
INVESTING ACTIVITIES
Acquisitions of businesses, net of cash acquired
(423,633)
—
Purchases of property, plant, and equipment
(90,562)
(56,191)
Net proceeds from sale of property, plant, and equipment, and other
15,425
4,758
Other
(390)
—
Net cash used in investing activities
(499,160)
(51,433)
FINANCING ACTIVITIES
Net payments of credit facility and other loan
(32,619)
(15,000)
Cash dividends paid
(49,730)
(46,839)
Purchases of common stock
—
(22,927)
All other cash provided by financing activities
13,365
16,958
Net cash used in financing activities
(68,984)
(67,808)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
(9,889)
17,596
(Decrease) Increase in cash, cash equivalents, and restricted cash
(204,689)
156,386
Cash, cash equivalents, and restricted cash at beginning of period
687,525
531,139
Cash, cash equivalents, and restricted cash at end of period
$
482,836
$
687,525
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LITTELFUSE, INC.
NET SALES AND OPERATING INCOME BY SEGMENT
(Unaudited)
Fourth Quarter
Year-to-Date
(in thousands)
2021
2020
% Growth /(Decline)
2021
2020
% Growth /(Decline)
Net sales
Electronics
$
341,622
$
244,953
39.5
%
$
1,300,744
$
937,762
38.7
%
Transportation (1)
141,796
124,271
14.1
%
528,058
395,764
33.4
%
Industrial
69,647
31,472
121.3
%
251,126
112,169
123.9
%
Total net sales
$
553,065
$
400,696
38.0
%
$
2,079,928
$
1,445,695
43.9
%
Operating income
Electronics
$
79,350
$
41,912
89.3
%
$
309,633
$
152,695
102.8
%
Transportation (1)
10,599
21,013
(49.6)
%
65,979
41,655
58.4
%
Industrial
4,169
3,587
16.2
%
22,621
11,996
88.6
%
Other (a)
(1,321)
(1,498)
N.M.
(12,591)
(43,974)
N.M.
Total operating income
$
92,797
$
65,014
42.7
%
$
385,642
$
162,372
137.5
%
Operating Margin
16.8
%
16.2
%
18.5
%
11.2
%
Interest expense
4,626
4,816
18,527
21,077
Foreign exchange loss (gain)
8,843
(5,275)
17,158
(14,875)
Other expense (income), net
19,799
(3,440)
8,932
(5,083)
Income before income taxes
$
59,529
$
68,913
(13.6)
%
$
341,025
$
161,253
111.5
%
(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)
2021
2020
% Growth /(Decline)
2021
2020
% Growth /(Decline)
Operating Margin
Electronics
23.2
%
17.1
%
6.1
%
23.8
%
16.3
%
7.5
%
Transportation (1)
7.5
%
16.9
%
(9.4)
%
12.5
%
10.5
%
2.0
%
Industrial
6.0
%
11.4
%
(5.4)
%
9.0
%
10.7
%
(1.7)
%
(1) Formerly known as Automotive segment.
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LITTELFUSE, INC.
SUPPLEMENTAL FINANCIAL INFORMATION
(In millions of USD except per share amounts unaudited)
Non-GAAP EPS reconciliation
Q4-21
Q4-20
YTD-21
YTD-20
GAAP diluted EPS
$
2.08
$
2.39
$
11.38
$
5.29
EPS impact of Non-GAAP adjustments (below)
1.08
(0.16)
1.81
1.11
Adjusted diluted EPS
$
3.16
$
2.23
$
13.19
$
6.40
Non-GAAP adjustments - (income)/expense
Q4-21
Q4-20
YTD-21
YTD-20
Acquisition-related and integration costs (a)
$
3.6
$
0.7
$
7.0
$
2.3
Purchase accounting inventory adjustments (b)
1.6
—
8.4
—
Restructuring, impairment and other charges (c)
0.2
0.8
2.2
41.7
Gain on sale of fixed assets (d)
(4.1)
—
(5.0)
—
Non-GAAP adjustments to operating income
1.3
1.5
12.6
44.0
Other expense, net (e)
20.8
—
21.4
2.1
Non-operating foreign exchange loss (gain)
8.9
(5.3)
17.2
(14.9)
Non-GAAP adjustments to income before income taxes
Consolidated EBITDA (as defined in the Private Placement Senior Notes) (2)
Twelve Months Ended January 1, 2022
Net Income
$
283.8
Interest expense
18.5
Income taxes
57.2
Depreciation
55.9
Amortization
42.7
Non-cash additions (reductions):
Non-cash pension settlement charge
19.9
Stock-based compensation expense
19.6
Purchase accounting inventory step-up charge
8.4
Unrealized gain on investments
(8.9)
Impairment charges
—
Other
26.7
Consolidated EBITDA (as defined in the Private Placement Senior Notes) (2)
$
523.8
Ratio of Consolidated total gross debt to Consolidated EBITDA (as defined in Private Placement Senior Notes)*
1.2x
Page 10
* Our Private Placement Senior Notes, with maturities ranging from 2022 to 2030, contain a financial ratio covenant providing that if, as of the last day of each fiscal quarter, the ratio of Consolidated total gross debt at such time to Consolidated EBITDA 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 Private Placement Senior Notes) is triggered
(1) Formerly known as Automotive segment.
(2) Represents Consolidated EBITDA as defined in our 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) 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 and a $0.8 million charge for an asset retirement obligation related to the disposal of a business in 2019. 2020 year-to-date amount included a $1.8 million increase in coal mining reserves, a $0.2 million charge for an asset retirement obligation related to the disposal of a business in 2019 and $0.1 million of impairment charges on certain other investments.
(f) reflected the tax impact associated with the non-GAAP adjustments.
