Delaware | 0-20388 | 36-3795742 |
(State of other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition |
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits |
The following exhibit is furnished with this Form 8-K: | |
Littelfuse, Inc. | |
Date: May 1, 2019 | By: /s/ Meenal A. Sethna |
Meenal A. Sethna Executive Vice President and Chief Financial Officer |
Exhibit No. | Description | |
99.1 |
NEWS RELEASE | Littelfuse Inc. 8755 West Higgins Road, Suite 500 Chicago, Illinois 60631 p: (773) 628-1000 f: (773) 628-0802 www.littelfuse.com |
• | Net sales of $405.5 million were in line with guidance, down 3% versus the prior year period, and down 4% organically |
• | Growth by segment versus the prior year period: |
• | Electronics sales were flat (down 4% organically) |
• | Automotive sales decreased 10% (down 7% organically) |
• | Industrial sales decreased 2% (up 4% organically) |
• | GAAP diluted EPS was $1.48 |
• | Adjusted diluted EPS of $1.96 was above the midpoint of guidance. As expected, EPS was unfavorably impacted by currency headwinds as well as lower volumes and associated leverage versus the prior year |
• | GAAP effective tax rate was 20.3% and the adjusted effective tax rate was 19.7% |
• | Cash flow from operations was $30.9 million and free cash flow was $16.8 million |
• | During the first quarter, the company repurchased 79,916 shares of common stock under its share repurchase authorization |
• | Net sales are expected to be in the range of $409 to $421 million |
• | Adjusted diluted EPS is expected to be in the range of $2.00 to $2.14. This includes an estimated 25 cent decline versus the prior year, due to unfavorable foreign exchange impacts and mark-to-market comparisons, as well as timing of stock compensation expense |
• | Adjusted effective tax rate is expected to be in the range of 18% - 19% |
• | The company will pay a cash dividend on its common stock of $0.43 per share on June 6, 2019 to shareholders of record as of May 23, 2019 |
• | The company’s previous share repurchase authorization expired on April 30, 2019 and has been replaced with a new one million share repurchase authorization effective through April 30, 2020 |
(Unaudited) | ||||||||
(in thousands) | March 30, 2019 | December 29, 2018 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 476,614 | $ | 489,733 | ||||
Short-term investments | 33 | 34 | ||||||
Trade receivables, less allowances of $33,140 and $36,038 at March 30, 2019 and December 29, 2018, respectively | 237,878 | 232,892 | ||||||
Inventories | 261,659 | 258,228 | ||||||
Prepaid income taxes and income taxes receivable | 758 | 2,339 | ||||||
Prepaid expenses and other current assets | 53,203 | 49,291 | ||||||
Total current assets | 1,030,145 | 1,032,517 | ||||||
Net property, plant, and equipment | 342,334 | 339,894 | ||||||
Intangible assets, net of amortization | 350,421 | 361,474 | ||||||
Goodwill | 825,467 | 826,715 | ||||||
Investments | 24,640 | 25,405 | ||||||
Deferred income taxes | 8,461 | 7,330 | ||||||
Right of use lease assets, net | 24,725 | — | ||||||
Other assets | 18,825 | 20,971 | ||||||
Total assets | $ | 2,625,018 | $ | 2,614,306 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 129,092 | $ | 126,323 | ||||
Accrued liabilities | 107,214 | 138,405 | ||||||
Accrued income taxes | 23,244 | 20,547 | ||||||
Current portion of long-term debt | 10,000 | 10,000 | ||||||
Total current liabilities | 269,550 | 295,275 | ||||||
Long-term debt, less current portion | 676,510 | 684,730 | ||||||
Deferred income taxes | 52,658 | 51,853 | ||||||
Accrued post-retirement benefits | 31,548 | 31,874 | ||||||
Non-current operating lease liabilities | 19,950 | — | ||||||
Other long-term liabilities | 69,414 | 72,232 | ||||||
Total equity | 1,505,388 | 1,478,342 | ||||||
Total liabilities and equity | $ | 2,625,018 | $ | 2,614,306 |
Three Months Ended | ||||||||
(in thousands, except per share data) | March 30, 2019 | March 31, 2018 | ||||||
Net sales | $ | 405,500 | $ | 417,813 | ||||
Cost of sales | 250,272 | 268,190 | ||||||
Gross profit | 155,228 | 149,623 | ||||||
Selling, general, and administrative expenses | 62,955 | 77,514 | ||||||
Research and development expenses | 21,409 | 22,540 | ||||||
Amortization of intangibles | 10,191 | 11,998 | ||||||
Total operating expenses | 94,555 | 112,052 | ||||||
Operating income | 60,673 | 37,571 | ||||||
Interest expense | 5,686 | 5,423 | ||||||
Foreign exchange loss (gain) | 4,243 | (10,555 | ) | |||||
Other expense (income), net | 4,305 | (1,943 | ) | |||||
Income before income taxes | 46,439 | 44,646 | ||||||
Income taxes | 9,450 | 8,617 | ||||||
Net income | $ | 36,989 | $ | 36,029 | ||||
Income per share: | ||||||||
Basic | $ | 1.50 | $ | 1.48 | ||||
Diluted | $ | 1.48 | $ | 1.45 | ||||
Weighted-average shares and equivalent shares outstanding: | ||||||||
Basic | 24,717 | 24,339 | ||||||
Diluted | 25,009 | 24,775 | ||||||
Comprehensive income | $ | 45,062 | $ | 35,750 |
Three Months Ended | ||||||||
(in thousands) | March 30, 2019 | March 31, 2018 | ||||||
OPERATING ACTIVITIES | ||||||||
Net income | $ | 36,989 | $ | 36,029 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | 35,376 | 49,286 | ||||||
Changes in operating assets and liabilities: | ||||||||
Trade receivables | (5,800 | ) | (8,417 | ) | ||||
Inventories | (3,250 | ) | (269 | ) | ||||
Accounts payable | (8,499 | ) | 2,990 | |||||
Accrued liabilities and income taxes | (27,170 | ) | (7,208 | ) | ||||
Prepaid expenses and other assets | 3,273 | (3,143 | ) | |||||
Net cash provided by operating activities | 30,919 | 69,268 | ||||||
INVESTING ACTIVITIES | ||||||||
Acquisitions of businesses, net of cash acquired | (775 | ) | (306,487 | ) | ||||
Purchases of property, plant, and equipment | (14,076 | ) | (17,909 | ) | ||||
Proceeds from sale of property, plant, and equipment | 607 | 19 | ||||||
Net cash used in investing activities | (14,244 | ) | (324,377 | ) | ||||
FINANCING ACTIVITIES | ||||||||
Net (payments) proceeds from credit facility and senior notes | (5,000 | ) | 250,500 | |||||
Purchases of common stock | (17,906 | ) | — | |||||
Cash dividends paid | (10,625 | ) | (9,198 | ) | ||||
All other cash provided by (used in) financing activities | 2,198 | (994 | ) | |||||
Net cash (used in) provided by financing activities | (31,333 | ) | 240,308 | |||||
Effect of exchange rate changes on cash and cash equivalents | 1,539 | (2,417 | ) | |||||
Decrease in cash and cash equivalents | (13,119 | ) | (17,218 | ) | ||||
Cash and cash equivalents at beginning of period | 489,733 | 429,676 | ||||||
Cash and cash equivalents at end of period | $ | 476,614 | $ | 412,458 |
First Quarter | |||||||||||
(in thousands) | 2019 | 2018 | % Growth /(Decline) | ||||||||
Net sales | |||||||||||
Electronics | $ | 265,394 | $ | 264,411 | 0.4 | % | |||||
Automotive | 113,483 | 126,131 | (10.0 | )% | |||||||
Industrial | 26,623 | 27,271 | (2.4 | )% | |||||||
Total net sales | $ | 405,500 | $ | 417,813 | (2.9 | )% | |||||
Operating income (loss) | |||||||||||
Electronics | $ | 49,037 | $ | 53,964 | (9.1 | )% | |||||
Automotive | 13,200 | 18,390 | (28.2 | )% | |||||||
Industrial | 3,505 | 4,709 | (25.6 | )% | |||||||
Other(a) | (5,069 | ) | (39,492 | ) | N.M. | ||||||
Total operating income | $ | 60,673 | $ | 37,571 | 61.5 | % | |||||
Operating Margin | 15.0 | % | 9.0 | % | |||||||
Interest expense | 5,686 | 5,423 | |||||||||
Foreign exchange loss (gain) | 4,243 | (10,555 | ) | ||||||||
Other expense (income), net | 4,305 | (1,943 | ) | ||||||||
Income before income taxes | $ | 46,439 | $ | 44,646 | 4.0 | % |
First Quarter | |||||||||
(in thousands) | 2019 | 2018 | % Growth /(Decline) | ||||||
Operating Margin | |||||||||
Electronics | 18.5 | % | 20.4 | % | (1.9 | )% | |||
Automotive | 11.6 | % | 14.6 | % | (2.9 | )% | |||
Industrial | 13.2 | % | 17.3 | % | (4.1 | )% |
Non-GAAP EPS reconciliation | ||||||||
Q1-19 | Q1-18 | |||||||
GAAP diluted EPS | $ | 1.48 | $ | 1.45 | ||||
EPS impact of Non-GAAP adjustments (below) | 0.48 | 0.94 | ||||||
Adjusted diluted EPS | $ | 1.96 | $ | 2.39 |
Non-GAAP adjustments - (income)/expense | ||||||||
Q1-19 | Q1-18 | |||||||
Acquisition related and integration costs (a) | $ | 2.4 | $ | 11.7 | ||||
Restructuring, impairment and other charges (b) | 2.7 | 0.8 | ||||||
Amortization backlog - IXYS (c) | — | 2.5 | ||||||
Change in control - IXYS (d) | — | 2.1 | ||||||
Acquisition related stock-based compensation charge (e) | — | 4.5 | ||||||
Purchase accounting inventory adjustments (f) | — | 17.9 | ||||||
Non-GAAP adjustments to operating income | 5.1 | 39.5 | ||||||
Other expense, net (g) | 5.2 | — | ||||||
Non-operating foreign exchange loss (gain) | 4.2 | (10.6 | ) | |||||
Non-GAAP adjustments to income before income taxes | 14.5 | 28.9 | ||||||
Income taxes (h) | 2.5 | 5.8 | ||||||
Non-GAAP adjustments to net income | $ | 12.0 | $ | 23.1 | ||||
Total EPS impact | $ | 0.48 | $ | 0.94 |
Adjusted operating margin /Adjusted EBITDA reconciliation | ||||||||
Q1-19 | Q1-18 | |||||||
Net sales | $ | 405.5 | $ | 417.8 | ||||
GAAP operating income | $ | 60.7 | $ | 37.6 | ||||
Add back non-GAAP adjustments | 5.1 | 39.5 | ||||||
Adjusted operating income | $ | 65.8 | $ | 77.1 | ||||
Adjusted operating margin | 16.2 | % | 18.5 | % | ||||
Add back amortization | 10.2 | 12.0 | ||||||
Add back depreciation | 13.1 | 11.6 | ||||||
Adjusted EBITDA | $ | 89.1 | $ | 100.7 | ||||
Adjusted EBITDA margin | 22.0 | % | 24.1 | % |
Net sales reconciliation | Q1-19 vs. Q1-18 | |||||||||||
Electronics | Automotive | Industrial | Total | |||||||||
Net sales growth | — | % | (10 | )% | (2 | )% | (3 | )% | ||||
Less: | ||||||||||||
Acquisitions | 6 | % | — | — | 3 | % | ||||||
Divestitures | — | — | (5 | )% | — | % | ||||||
FX impact | (2 | )% | (3 | )% | (1 | )% | (2 | )% | ||||
Organic net sales growth | (4 | )% | (7 | )% | 4 | % | (4 | )% |
Income tax reconciliation | ||||||||
Q1-19 | Q1-18 | |||||||
Income taxes | $ | 9.5 | $ | 8.6 | ||||
Effective rate | 20.3 | % | 19.3 | % | ||||
Non-GAAP adjustments - income taxes | 2.5 | 5.8 | ||||||
Adjusted income taxes | $ | 12.0 | $ | 14.4 | ||||
Adjusted effective rate | 19.7 | % | 19.6 | % | ||||
Free cash flow reconciliation | ||||||||
Q1-19 | Q1-18 | |||||||
Net cash provided by operating activities | $ | 30.9 | $ | 69.3 | ||||
Less: Purchases of property, plant and equipment | (14.1 | ) | (17.9 | ) | ||||
Free cash flow | $ | 16.8 | $ | 51.4 |
Q2-18 | Q3-18 | Q4-18 | Q1-19 | For the Twelve Months Ended March 30, 2019 | ||||||||||||||||
Adjusted EBITDA | $ | 111.4 | $ | 110.5 | $ | 84.3 | $ | 89.1 | $ | 395.3 | ||||||||||
March 30, 2019 | ||||||||||||||||||||
Current portion of long-term debt | $ | 10.0 | ||||||||||||||||||
Long-term debt, less current portion | 676.5 | |||||||||||||||||||
Total debt | $ | 686.5 | ||||||||||||||||||
Less: Cash | 476.6 | |||||||||||||||||||
Net debt | $ | 209.9 | ||||||||||||||||||
Adjusted Gross Leverage (defined as total debt divided by adjusted EBITDA) | 1.7 | |||||||||||||||||||
Adjusted Net Leverage (defined as net debt divided by adjusted EBITDA) | 0.5 |
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