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: July 31, 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 $397.9 million were down 13% versus the prior year period, and down 11% organically, primarily due to ongoing global trade uncertainties, continued efforts by distribution partners to reduce excess electronics channel inventories and further declines in global auto production, especially in China |
• | Segment performance versus the prior year period: |
• | Electronics sales decreased 13% (down 11% organically) |
• | Automotive sales decreased 15% (down 12% organically) |
• | Industrial sales decreased 9% due to the exit of the Custom business in 2018 (up 1% organically) |
• | GAAP diluted EPS was $1.75 and adjusted diluted EPS was $1.91. EPS was significantly impacted by lower volumes and associated leverage versus the prior year |
• | GAAP effective tax rate was 18.2% and the adjusted effective tax rate was 17.3% |
• | Cash flow from operations was $49.2 million and free cash flow was $38.0 million |
• | During the second quarter and through July 26, 2019, the company repurchased 188,214 and 49,816 shares of common stock, respectively, under its share purchase authorization |
• | Net sales are expected to be in the range of $362 to $374 million |
• | Adjusted diluted EPS is expected to be in the range of $1.50 to $1.64 |
• | Adjusted effective tax rate is expected to be in the range of 20% - 21% |
(Unaudited) | ||||||||
(in thousands) | June 29, 2019 | December 29, 2018 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 474,781 | $ | 489,733 | ||||
Short-term investments | 34 | 34 | ||||||
Trade receivables, less allowances of $34,468 and $36,038 at June 29, 2019 and December 29, 2018, respectively | 245,723 | 232,892 | ||||||
Inventories | 254,305 | 258,228 | ||||||
Prepaid income taxes and income taxes receivable | 1,374 | 2,339 | ||||||
Prepaid expenses and other current assets | 63,332 | 49,291 | ||||||
Total current assets | 1,039,549 | 1,032,517 | ||||||
Net property, plant, and equipment | 338,500 | 339,894 | ||||||
Intangible assets, net of amortization | 341,174 | 361,474 | ||||||
Goodwill | 826,408 | 826,715 | ||||||
Investments | 25,456 | 25,405 | ||||||
Deferred income taxes | 9,200 | 7,330 | ||||||
Right of use lease assets, net | 23,280 | — | ||||||
Other assets | 18,018 | 20,971 | ||||||
Total assets | $ | 2,621,585 | $ | 2,614,306 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 123,058 | $ | 126,323 | ||||
Accrued liabilities | 111,696 | 138,405 | ||||||
Accrued income taxes | 21,657 | 20,547 | ||||||
Current portion of long-term debt | 10,000 | 10,000 | ||||||
Total current liabilities | 266,411 | 295,275 | ||||||
Long-term debt, less current portion | 676,940 | 684,730 | ||||||
Deferred income taxes | 53,039 | 51,853 | ||||||
Accrued post-retirement benefits | 30,666 | 31,874 | ||||||
Non-current operating lease liabilities | 18,643 | — | ||||||
Other long-term liabilities | 65,944 | 72,232 | ||||||
Total equity | 1,509,942 | 1,478,342 | ||||||
Total liabilities and equity | $ | 2,621,585 | $ | 2,614,306 |
Three Months Ended | Six Months Ended | |||||||||||||||
(in thousands, except per share data) | June 29, 2019 | June 30, 2018 | June 29, 2019 | June 30, 2018 | ||||||||||||
Net sales | $ | 397,879 | $ | 459,183 | $ | 803,379 | $ | 876,996 | ||||||||
Cost of sales | 256,071 | 290,196 | 506,343 | 558,386 | ||||||||||||
Gross profit | 141,808 | 168,987 | 297,036 | 318,610 | ||||||||||||
Selling, general, and administrative expenses | 57,666 | 73,244 | 120,621 | 150,758 | ||||||||||||
Research and development expenses | 21,458 | 22,748 | 42,867 | 45,288 | ||||||||||||
Amortization of intangibles | 10,050 | 13,373 | 20,241 | 25,371 | ||||||||||||
Total operating expenses | 89,174 | 109,365 | 183,729 | 221,417 | ||||||||||||
Operating income | 52,634 | 59,622 | 113,307 | 97,193 | ||||||||||||
Interest expense | 5,589 | 5,782 | 11,275 | 11,205 | ||||||||||||
Foreign exchange (gain) loss | (3,575 | ) | 3,200 | 668 | (7,354 | ) | ||||||||||
Other (income) expense, net | (2,947 | ) | (1,678 | ) | 1,358 | (3,621 | ) | |||||||||
Income before income taxes | 53,567 | 52,318 | 100,006 | 96,963 | ||||||||||||
Income taxes | 9,775 | 9,992 | 19,225 | 18,609 | ||||||||||||
Net income | $ | 43,792 | $ | 42,326 | $ | 80,781 | $ | 78,354 | ||||||||
Income per share: | ||||||||||||||||
Basic | $ | 1.77 | $ | 1.69 | $ | 3.27 | $ | 3.18 | ||||||||
Diluted | $ | 1.75 | $ | 1.67 | $ | 3.23 | $ | 3.12 | ||||||||
Weighted-average shares and equivalent shares outstanding: | ||||||||||||||||
Basic | 24,740 | 25,004 | 24,729 | 24,671 | ||||||||||||
Diluted | 24,983 | 25,401 | 24,998 | 25,086 | ||||||||||||
Comprehensive income | $ | 38,061 | $ | 26,384 | $ | 83,123 | $ | 62,133 |
Six Months Ended | ||||||||
(in thousands) | June 29, 2019 | June 30, 2018 | ||||||
OPERATING ACTIVITIES | ||||||||
Net income | $ | 80,781 | $ | 78,354 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | 62,053 | 105,559 | ||||||
Changes in operating assets and liabilities: | ||||||||
Trade receivables | (13,242 | ) | (33,481 | ) | ||||
Inventories | 6,230 | (1,502 | ) | |||||
Accounts payable | (17,927 | ) | 13,684 | |||||
Accrued liabilities and income taxes | (36,713 | ) | (16,383 | ) | ||||
Prepaid expenses and other assets | (1,090 | ) | (5,316 | ) | ||||
Net cash provided by operating activities | 80,092 | 140,915 | ||||||
INVESTING ACTIVITIES | ||||||||
Acquisitions of businesses, net of cash acquired | (775 | ) | (310,487 | ) | ||||
Purchases of property, plant, and equipment | (25,249 | ) | (40,315 | ) | ||||
Proceeds from sale of property, plant, and equipment | 6,212 | 68 | ||||||
Net cash used in investing activities | (19,812 | ) | (350,734 | ) | ||||
FINANCING ACTIVITIES | ||||||||
Net (payments) proceeds from credit facility and senior notes | (7,500 | ) | 209,975 | |||||
Purchases of common stock | (49,861 | ) | — | |||||
Cash dividends paid | (21,274 | ) | (18,458 | ) | ||||
All other cash provided by financing activities | 3,011 | 4,690 | ||||||
Net cash (used in) provided by financing activities | (75,624 | ) | 196,207 | |||||
Effect of exchange rate changes on cash and cash equivalents | 392 | (7,917 | ) | |||||
Decrease in cash and cash equivalents | (14,952 | ) | (21,529 | ) | ||||
Cash and cash equivalents at beginning of period | 489,733 | 429,676 | ||||||
Cash and cash equivalents at end of period | $ | 474,781 | $ | 408,147 |
Second Quarter | Year-to-Date | |||||||||||||||||||||||||||||
(in thousands) | 2019 | 2018 | Change | % Growth /(Decline) | 2019 | 2018 | Change | % Growth /(Decline) | ||||||||||||||||||||||
Net sales | ||||||||||||||||||||||||||||||
Electronics | $ | 259,553 | $ | 299,357 | $ | (39,804 | ) | (13.3 | )% | $ | 524,947 | $ | 563,768 | $ | (38,821 | ) | (6.9 | )% | ||||||||||||
Automotive | 108,650 | 127,172 | (18,522 | ) | (14.6 | )% | 222,133 | 253,302 | (31,169 | ) | (12.3 | )% | ||||||||||||||||||
Industrial | 29,676 | 32,654 | (2,978 | ) | (9.1 | )% | 56,299 | 59,926 | (3,627 | ) | (6.1 | )% | ||||||||||||||||||
Total net sales | $ | 397,879 | $ | 459,183 | $ | (61,304 | ) | (13.4 | )% | $ | 803,379 | $ | 876,996 | $ | (73,617 | ) | (8.4 | )% | ||||||||||||
Operating income (loss) | ||||||||||||||||||||||||||||||
Electronics | $ | 43,630 | $ | 67,311 | $ | (23,681 | ) | (35.2 | )% | $ | 92,666 | $ | 121,275 | $ | (28,609 | ) | (23.6 | )% | ||||||||||||
Automotive | 10,349 | 15,711 | (5,362 | ) | (34.1 | )% | 23,550 | 34,102 | (10,552 | ) | (30.9 | )% | ||||||||||||||||||
Industrial | 5,831 | 5,279 | 552 | 10.5 | % | 9,336 | 9,988 | (652 | ) | (6.5 | )% | |||||||||||||||||||
Other(a) | (7,176 | ) | (28,679 | ) | N.M. | (12,245 | ) | (68,172 | ) | N.M. | ||||||||||||||||||||
Total operating income | $ | 52,634 | $ | 59,622 | $ | (6,988 | ) | (11.7 | )% | $ | 113,307 | $ | 97,193 | $ | 16,114 | 16.6 | % | |||||||||||||
Operating Margin | 13.2 | % | 13.0 | % | 14.1 | % | 11.1 | % | ||||||||||||||||||||||
Interest expense | 5,589 | 5,782 | 11,275 | 11,205 | ||||||||||||||||||||||||||
Foreign exchange (gain) loss | (3,575 | ) | 3,200 | 668 | (7,354 | ) | ||||||||||||||||||||||||
Other (income) expense, net | (2,947 | ) | (1,678 | ) | 1,358 | (3,621 | ) | |||||||||||||||||||||||
Income before income taxes | $ | 53,567 | $ | 52,318 | $ | 1,249 | 2.4 | % | $ | 100,006 | $ | 96,963 | $ | 3,043 | 3.1 | % |
Second Quarter | Year-to-Date | |||||||||||||||||
(in thousands) | 2019 | 2018 | % Growth /(Decline) | 2019 | 2018 | % Growth /(Decline) | ||||||||||||
Operating Margin | ||||||||||||||||||
Electronics | 16.8 | % | 22.5 | % | (5.7 | )% | 17.7 | % | 21.5 | % | (3.9 | )% | ||||||
Automotive | 9.5 | % | 12.4 | % | (2.8 | )% | 10.6 | % | 13.5 | % | (2.9 | )% | ||||||
Industrial | 19.6 | % | 16.2 | % | 3.5 | % | 16.6 | % | 16.7 | % | (0.1 | )% |
Non-GAAP EPS reconciliation | ||||||||||||||||
Q2-19 | Q2-18 | YTD-19 | YTD-18 | |||||||||||||
GAAP diluted EPS | $ | 1.75 | $ | 1.67 | $ | 3.23 | $ | 3.12 | ||||||||
EPS impact of Non-GAAP adjustments (below) | 0.16 | 1.01 | 0.64 | 1.95 | ||||||||||||
Adjusted diluted EPS | $ | 1.91 | $ | 2.68 | $ | 3.87 | $ | 5.07 |
Non-GAAP adjustments - (income)/expense | ||||||||||||||||
Q2-19 | Q2-18 | YTD-19 | YTD-18 | |||||||||||||
Acquisition related and integration costs (a) | $ | 1.5 | $ | 2.3 | $ | 3.8 | $ | 14.1 | ||||||||
Restructuring, impairment and other charges (b) | 5.7 | 4.3 | 8.4 | 5.0 | ||||||||||||
Amortization backlog - IXYS (c) | — | 3.1 | — | 5.6 | ||||||||||||
Change in control - IXYS (d) | — | — | — | 2.1 | ||||||||||||
Acquisition related stock-based compensation charge (e) | — | — | — | 4.5 | ||||||||||||
Purchase accounting inventory adjustments (f) | — | 19.0 | — | 36.9 | ||||||||||||
Non-GAAP adjustments to operating income | 7.2 | 28.7 | 12.2 | 68.2 | ||||||||||||
Other expense, net (g) | 0.6 | — | 5.8 | — | ||||||||||||
Non-operating foreign exchange (gain) loss | (3.6 | ) | 3.2 | 0.7 | (7.4 | ) | ||||||||||
Non-GAAP adjustments to income before income taxes | 4.2 | 31.9 | 18.7 | 60.8 | ||||||||||||
Income taxes (h) | 0.2 | 6.1 | 2.8 | 11.9 | ||||||||||||
Non-GAAP adjustments to net income | $ | 4.0 | $ | 25.8 | $ | 15.9 | $ | 48.9 | ||||||||
Total EPS impact | $ | 0.16 | $ | 1.01 | $ | 0.64 | $ | 1.95 |
Adjusted operating margin /Adjusted EBITDA reconciliation | ||||||||||||||||
Q2-19 | Q2-18 | YTD-19 | YTD-18 | |||||||||||||
Net sales | $ | 397.9 | $ | 459.2 | $ | 803.4 | $ | 877.0 | ||||||||
GAAP operating income | $ | 52.6 | $ | 59.6 | $ | 113.3 | $ | 97.2 | ||||||||
Add back non-GAAP adjustments | 7.2 | 28.7 | 12.2 | 68.2 | ||||||||||||
Adjusted operating income | $ | 59.8 | $ | 88.3 | $ | 125.5 | $ | 165.4 | ||||||||
Adjusted operating margin | 15.0 | % | 19.2 | % | 15.6 | % | 18.9 | % | ||||||||
Add back amortization | 10.1 | 10.3 | 20.2 | 19.8 | ||||||||||||
Add back depreciation | 12.6 | 12.8 | 25.7 | 24.4 | ||||||||||||
Adjusted EBITDA | $ | 82.5 | $ | 111.4 | $ | 171.4 | $ | 209.6 | ||||||||
Adjusted EBITDA margin | 20.7 | % | 24.3 | % | 21.3 | % | 23.9 | % |
Net sales reconciliation | Q2-19 vs. Q2-18 | |||||||||||
Electronics | Automotive | Industrial | Total | |||||||||
Net sales growth | (13 | )% | (15 | )% | (9 | )% | (13 | )% | ||||
Less: | ||||||||||||
Divestitures | (1 | )% | — | (9 | )% | — | ||||||
FX impact | (1 | )% | (3 | )% | (1 | )% | (2 | )% | ||||
Organic net sales growth | (11 | )% | (12 | )% | 1 | % | (11 | )% |
Net sales reconciliation | 2019 YTD vs. 2018 YTD | |||||||||||
Electronics | Automotive | Industrial | Total | |||||||||
Net sales growth | (7 | )% | (12 | )% | (6 | )% | (8 | )% | ||||
Less: | ||||||||||||
Acquisitions | 2 | % | — | — | 2 | % | ||||||
Divestitures | — | % | — | % | (7 | )% | (1 | )% | ||||
FX impact | (2 | )% | (3 | )% | (1 | )% | (2 | )% | ||||
Organic net sales growth | (7 | )% | (9 | )% | 2 | % | (7 | )% |
Income tax reconciliation | ||||||||||||||||
Q2-19 | Q2-18 | YTD-19 | YTD-18 | |||||||||||||
Income taxes | $ | 9.8 | $ | 10.0 | $ | 19.2 | $ | 18.6 | ||||||||
Effective rate | 18.2 | % | 19.1 | % | 19.2 | % | 19.2 | % | ||||||||
Non-GAAP adjustments - income taxes | 0.2 | 6.1 | 2.8 | 11.9 | ||||||||||||
Adjusted income taxes | $ | 10.0 | $ | 16.1 | $ | 22.0 | $ | 30.5 | ||||||||
Adjusted effective rate | 17.3 | % | 19.1 | % | 18.5 | % | 19.3 | % | ||||||||
Free cash flow reconciliation | ||||||||||||||||
Q2-19 | Q2-18 | YTD-19 | YTD-18 | |||||||||||||
Net cash provided by operating activities | $ | 49.2 | $ | 71.6 | $ | 80.1 | $ | 140.9 | ||||||||
Less: Purchases of property, plant and equipment | (11.2 | ) | (22.4 | ) | (25.2 | ) | (40.3 | ) | ||||||||
Free cash flow | $ | 38.0 | $ | 49.2 | $ | 54.8 | $ | 100.6 |
Q3-18 | Q4-18 | Q1-19 | Q2-19 | For the Twelve Months Ended June 29, 2019 | ||||||||||||||||
Adjusted EBITDA | $ | 110.5 | $ | 84.3 | $ | 89.1 | $ | 82.5 | $ | 366.4 | ||||||||||
June 29, 2019 | ||||||||||||||||||||
Current portion of long-term debt | $ | 10.0 | ||||||||||||||||||
Long-term debt, less current portion | 676.9 | |||||||||||||||||||
Total debt | $ | 686.9 | ||||||||||||||||||
Less: Cash | 474.8 | |||||||||||||||||||
Net debt | $ | 212.1 | ||||||||||||||||||
Adjusted Gross Leverage (defined as total debt divided by adjusted EBITDA) | 1.9 | |||||||||||||||||||
Adjusted Net Leverage (defined as net debt divided by adjusted EBITDA) | 0.6 |
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