8-K
Littelfuse Inc /De (LFUS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20579
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: February 1, 2022
(Date of earliest event reported)
LITTELFUSE, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 0-20388 | 36-3795742 |
|---|---|---|
| (State of other jurisdiction <br>of incorporation) | (Commission <br>File Number) | (IRS Employer <br>Identification No.) |
8755 W. Higgins Road, Suite 500, Chicago, IL 60631
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (773) 628-1000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | 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)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of exchange on which registered |
|---|---|---|
| Common Stock, par value $0.01 per share | LFUS | NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition |
|---|
The information contained within Item 2.02 of this Form 8-K and the Exhibits attached hereto shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
On February 1, 2022, Littelfuse, Inc. (the “Company”) issued a press release announcing the results of its operations for the quarter and full year ended January 1, 2022. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K and incorporated by reference to this Item 2.02 as if fully set forth herein. A copy of the press release will also be available on the Company’s website.
| Item 7.01 | Regulation FD Disclosure |
|---|
To supplement the information in the attached press release, the Company has also prepared a presentation, which will be available on the Company’s website at https://investor.littelfuse.com/events-and-presentations and is attached hereto as Exhibit 99.2 to this Current Report on Form 8-K.
The information contained in the press release and investor presentation attached to this Form 8-K includes forward-looking statements that are intended to be covered by the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include but are not limited to comments with respect to the objectives and strategies, financial condition, results of operations and business of the Company. These forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, and the risk that predictions and other forward-looking statements will not be achieved. The Company cautions you not to place undue reliance on these forward-looking statements as a number of important factors could cause actual future results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements.
A copy of the press release is also posted on the Company’s website.
| Item 9.01 | Financial Statements and Exhibits. |
|---|---|
| (d) | Exhibits |
| --- | --- |
| The following exhibits are furnished with this Form 8-K: | |
| 99.1 Press Release, dated February 1, 2022 | |
| 99.2 Littelfuse Presentation dated February 1, 2022 |
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Littelfuse, Inc. | |
|---|---|
| Date: February 1, 2022 | By: /s/ Meenal A. Sethna |
| Meenal A. Sethna<br>Executive Vice President and Chief Financial Officer |
EXHIBIT INDEX
| Exhibit No. | Description |
|---|---|
| 99.1 | Press release, dated February 1, 2022 |
| 99.2 | Littelfuse Presentation dated February 1, 2022 |
| 101 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
| 104 | The cover page from this Current Report on Form 8-K, formatted as Inline XBRL. |
Document
Exhibit 99.1
| NEWS RELEASE | Littelfuse Inc.<br><br>8755 West Higgins Road, Suite 500<br><br>Chicago, Illinois 60631<br><br>p: (773) 628-1000 f: (773) 628-0802<br><br>www.littelfuse.com |
|---|
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 |
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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 | %<br>Growth /(Decline) | 2021 | 2020 | %<br>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 | %<br>Growth /(Decline) | 2021 | 2020 | %<br>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 | 31.0 | (3.8) | 51.2 | 31.2 | ||||||||||||||||||
| Income taxes (f) | 3.9 | — | 6.0 | 3.9 | ||||||||||||||||||
| Non-GAAP adjustments to net income | $ | 27.1 | $ | (3.8) | $ | 45.2 | $ | 27.3 | ||||||||||||||
| Total EPS impact | $ | 1.08 | $ | (0.16) | $ | 1.81 | $ | 1.11 | Adjusted operating margin /Adjusted EBITDA reconciliation | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||
| Q4-21 | Q4-20 | YTD-21 | YTD-20 | |||||||||||||||||||
| Net sales | $ | 553.1 | $ | 400.7 | $ | 2,079.9 | $ | 1,445.7 | ||||||||||||||
| GAAP operating income | 92.8 | 65.0 | 385.6 | 162.4 | ||||||||||||||||||
| Add back non-GAAP adjustments | 1.3 | 1.5 | 12.6 | 44.0 | ||||||||||||||||||
| Adjusted operating income | $ | 94.1 | $ | 66.5 | $ | 398.2 | $ | 206.4 | ||||||||||||||
| Adjusted operating margin | 17.0 | % | 16.6 | % | 19.1 | % | 14.3 | % | ||||||||||||||
| Add back amortization | 11.1 | 10.1 | 42.7 | 40.0 | ||||||||||||||||||
| Add back depreciation | 14.5 | 14.2 | 55.9 | 56.1 | ||||||||||||||||||
| Adjusted EBITDA | $ | 119.7 | $ | 90.8 | $ | 496.8 | $ | 302.5 | ||||||||||||||
| Adjusted EBITDA margin | 21.6 | % | 22.7 | % | 23.9 | % | 20.9 | % | Net sales reconciliation | Q4-21 vs. Q4-20 | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||
| Electronics | Transportation (1) | Industrial | Total | |||||||||||||||||||
| Net sales growth | 39 | % | 14 | % | 121 | % | 38 | % | ||||||||||||||
| Less: | ||||||||||||||||||||||
| Acquisitions | — | % | 13 | % | 89 | % | 11 | % | ||||||||||||||
| 53rd week of extra sales in fiscal year 2021 | 4 | % | 4 | % | 9 | % | 5 | % | ||||||||||||||
| FX impact | (1) | % | (1) | % | — | % | (1) | % | ||||||||||||||
| Organic net sales growth (decline) | 36 | % | (2) | % | 23 | % | 23 | % |
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| Net sales reconciliation | YTD-21 vs. YTD-20 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Electronics | Transportation (1) | Industrial | Total | |||||||||
| Net sales growth | 39 | % | 33 | % | 124 | % | 44 | % | ||||
| Less: | ||||||||||||
| Acquisitions | — | % | 4 | % | 90 | % | 8 | % | ||||
| 53rd week of extra sales in fiscal year 2021 | 1 | % | 1 | % | 2 | % | 1 | % | ||||
| Transfer a product line between segments | (1) | % | — | 4 | % | — | % | |||||
| FX impact | 2 | % | 3 | % | 1 | % | 2 | % | ||||
| Organic net sales growth | 37 | % | 25 | % | 27 | % | 33 | % | ||||
| Income tax reconciliation | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Q4-21 | Q4-20 | YTD-21 | YTD-20 | |||||||||
| Income taxes | $ | 7.6 | $ | 9.9 | $ | 57.2 | $ | 31.3 | ||||
| Effective rate | 12.7 | % | 14.4 | % | 16.8 | % | 19.4 | % | ||||
| Non-GAAP adjustments - income taxes | 3.9 | — | 6.0 | 3.9 | ||||||||
| Adjusted income taxes | $ | 11.5 | $ | 9.9 | $ | 63.2 | $ | 35.2 | ||||
| Adjusted effective rate | 12.7 | % | 15.3 | % | 16.1 | % | 18.3 | % | ||||
| Free cash flow reconciliation | ||||||||||||
| Q4-21 | Q4-20 | YTD-21 | YTD-20 | |||||||||
| Net cash provided by operating activities | $ | 132.6 | $ | 93.7 | $ | 373.3 | $ | 258.0 | ||||
| Less: Purchases of property, plant and equipment | (33.0) | (14.6) | (90.6) | (56.2) | ||||||||
| Free cash flow | $ | 99.6 | $ | 79.1 | $ | 282.7 | $ | 201.8 | ||||
| Consolidated Total Debt | As of January 1, 2022 | |||||||||||
| --- | --- | --- | ||||||||||
| Consolidated total gross debt | $ | 615.0 | ||||||||||
| Unamortized debt issuance costs | (3.1) | |||||||||||
| Consolidated Total Debt | $ | 611.9 | ||||||||||
| Consolidated EBITDA (as defined in the Private Placement Senior Notes) (2) | Twelve Months Ended<br>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.
a2021q4earningsslidesfin
1 Q4 / FULL YEAR 2021 EARNINGS RELEASE February 1, 2022
2Littelfuse, Inc. © 2022 DISCLAIMERS Important Information About Littelfuse, Inc. This presentation does not constitute or form part of, and should not be construed as, an offer or solicitation to purchase or sell securities of Littelfuse, Inc. and no investment decision should be made based upon the information provided herein. Littelfuse strongly urges you to review its filings with the Securities and Exchange Commission, which can be found at investor.littelfuse.com/sec.cfm. This website also provides additional information about Littelfuse. “Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995. The statements in this presentation 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 presentation 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. 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 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 presentation includes the non-GAAP financial measures of organic net sales growth (decline), adjusted operating margin, adjusted diluted earnings per share, adjusted effective tax rate, and free cash flow. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth in the appendix. The company believes that these non-GAAP financial measures provide useful information to investors regarding its operational performance and ability to generate cash enhancing an investor’s overall understanding of its core financial performance. The company believes that these non-GAAP financial measures are commonly used by financial analysts and provide useful information to analysts. Management uses these measures when assessing the performance of the business and for business planning purposes. Note that the definitions of these non-GAAP financial measures may differ from those terms as defined or used by other companies.
BUSINESS UPDATE Dave Heinzmann, President & CEO
4Littelfuse, Inc. © 2022 Q4 / FULL YEAR 2021 HIGHLIGHTS Continued momentum to deliver strong fourth quarter performance Significant growth driven by content & share gains Broad-based strength across industrial, transportation & electronics end markets Completed Hartland Controls & Carling Technologies acquisitions, ~$300m annualized sales Record annual results YoY: Revenue +44%; Adjusted Earnings +106% Adjusted Operating Margin 19.1%
5Littelfuse, Inc. © 2022 Structural Growth Themes Sustainability Connectivity Safety 2021 – 2025 GROWTH STRATEGY EMPOWERING A SUSTAINABLE, CONNECTED, AND SAFER WORLD Our Growth Drivers Content & Share Gains Strategic Acquisitions High-Growth Markets & Geographies Outcomes Double-Digit Revenue Growth Best-in-Class Profitability Deliver Top Tier Shareholder Returns
6Littelfuse, Inc. © 2022 LITTELFUSE & CARLING TECHNOLOGIES: COMBINATION OF TWO INDUSTRY LEADING BRANDS STRENGTHENS COLLECTIVE MARKET POSITION Economies of scale to leverage technologies & other investments Optimization of customer facing & operational structures, leveraging respective strengths Added operational infrastructure aligned with global customer base Enables Combined Critical Scale Accelerates Growth in Strategic Applications & Markets Expands addressable market with addition of market leading electromechanical & electronic switching, & circuit breaker technologies Strengthens engineering, design & test capabilities in switching, controls & software/firmware applications Expansion of Technologies & Capabilities Significant expansion of in-vehicle electronification in transportation markets: Commercial vehicles Heavy-duty truck Construction Agriculture Marine Strengthened position in 5G telecom, data center & cloud communications infrastructure markets Leverages Complementary Customers & Channels Expands customer penetration through complementary & new OEM relationships Significant overlap in global distribution partnerships bolsters position in channel Increased after-market penetration leveraging Littelfuse relationships
7Littelfuse, Inc. © 2022 INDUSTRIAL END MARKETS POSITIONED FOR CONTINUED GROWTH Accelerated growth in: – Renewables, led by solar & energy storage systems – HVAC – Data center & cloud computing Successful acquisition of Hartland Controls New product development to support strategic growth initiatives & enable sustainability ecosystem – Electrification – Electrical safety – Industrial automation – General industrials 2021 Highlights 2021 Key Design Wins
8Littelfuse, Inc. © 2022 TRANSPORTATION END MARKETS EXTENDING OUR LEADERSHIP POSITION 2021 Key Design Wins2021 Highlights Significant passenger vehicle market outgrowth – Content growth in EVs, higher-end vehicles, automotive electronics – Market share gains Completed Carling Technologies acquisition – More than doubles size of commercial vehicle business – Accelerates growth in strategic markets Heavy-duty truck & bus Material handling Construction equipment Agricultural machinery Commercialized new high-voltage products to support eMobility
9Littelfuse, Inc. © 2022 ELECTRONICS END MARKETS LEVERAGING OUR LEADERSHIP 2021 Highlights 2021 Key Design Wins Amplified customer demand driving increased content opportunities across a broad range of applications – Data center – Telecom infrastructure – Factory & building automation – Appliances – Consumer electronics Differentiated go-to-market strategy enables broad design wins Advancements in customer-facing digital experience
10Littelfuse, Inc. © 2022 COMMITMENT TO SUSTAINABILITY DIVERSE PEOPLE. BOLD SOLUTIONS. SUSTAINED SUCCESS. Environmental Social Governance Core products enable global sustainability Global ethics & compliance policies & programs; Annual, mandatory global code of conduct training 2020 SUSTAINABILITY REPORT available on Littelfuse.com Targeting Greenhouse Gas (GHG) reduction of 38% by 2035 Women hold 54% of all positions, and 20% of leadership positions Board Composition: 22% female 33% underrepresented minorities Charging Infrastructure Renewable Energy & Energy Storage Electric VehiclesHVACR Top Equal Pay Employer Kaunas, Lithuania Greater Suzhou, China Best Employer 2021 Policies & programs focused on employee health & wellness, safety, diversity, inclusion, & engagement
FINANCIAL UPDATE Meenal Sethna, EVP & CFO
12Littelfuse, Inc. © 2022 See appendix for GAAP to non-GAAP reconciliation Highlights Record revenue, +38% vs. prior year +23% organic vs. prior year Strength in sales across all segments GAAP operating margin 16.8%; Adjusted operating margin 17.0%, +40 bps vs prior year Adjusted EPS +42% vs. prior year GAAP and Adjusted effective tax rate 12.7% Free cash flow $100m GAAP EPS $2.39 $2.08 Adj. EPS $2.23 $3.16 $401 $553 Q4-20 Q4-21 (in millions) Q4-21 FINANCIAL PERFORMANCE Revenue & EPS
13Littelfuse, Inc. © 2022 See appendix for GAAP to non-GAAP reconciliation Highlights Record revenue, +44% vs. prior year +33% organic vs. prior year GAAP operating margin 18.5%; Record adjusted operating margin 19.1% +480 bps operating margin expansion vs. prior year despite ongoing inflationary pressures Adjusted EPS +106% vs. prior year Effective tax rate: GAAP 16.8%; Adjusted 16.1% Free cash flow $283m 100% conversion from net income GAAP EPS $5.29 $11.38 Adj. EPS $6.40 $13.19 $1,446 $2,080 2020 2021 (in millions) FULL YEAR 2021 FINANCIAL PERFORMANCE Revenue & EPS
14Littelfuse, Inc. © 2022 2021 – 2025 FRAMEWORK CONTINUED TOP TIER SHAREHOLDER RETURNS Robust organic growth enhanced with strategic M&A REVENUE • Double-digit revenue CAGR • 5 – 7% organic • 5 – 7% from acquisitions EARNINGS • EPS growth > revenue growth • 17 – 19% operating margins • 21 – 23% EBITDA margins CASH FLOW • 100%+ free cash flow conversion • Capital expenditures 4 – 5% of revenue ROIC • 5-year goal: high-teens ROIC % • Near-term objective: mid-teens ROIC % CAPITAL ALLOCATION • Return 40% of free cash flow to shareholders • Remainder to focus on acquisitions
15Littelfuse, Inc. © 2022 $31 $70 Q4-20 Q4-21 Revenue $124 $142 Q4-20 Q4-21 Revenue Q4-21 SEGMENT PERFORMANCE Electronics Segment Transportation Segment* Industrial Segment Revenue growth +39% / organic +36% Book to bill ended quarter above 1.0 610 bps margin expansion YoY driven by volume leverage & pricing strategy (in millions) Op Margin 17.1% 23.2% Revenue growth +14% / organic (-2%) Commercial vehicle +81%, incl. Carling Passenger vehicle (-7%) vs. car build (-17%) ~500 bps headwind: FX / metals inflation, Carling margin dilution Revenue growth +121% / organic +23% Higher Hartland logistics costs Margin expansion YoY excl. Hartland Op Margin 16.9% 7.5% Op Margin 11.4% 6.0% See appendix for GAAP to non-GAAP reconciliation*Formerly known as Automotive Product Segment $245 $342 Q4-20 Q4-21 Revenue
16Littelfuse, Inc. © 2022 $396 $528 FY-20 FY-21 Revenue FULL YEAR 2021 SEGMENT PERFORMANCE Electronics Segment Transportation Segment* Industrial Segment Revenue growth +39% / organic +37% Strong demand driven by data center, telecom, appliances, automotive electronics (EV) 750 bps margin expansion (in millions) Op Margin 16.3% 23.8% Revenue growth +33% / organic +25% Commercial vehicle +58% Passenger vehicle +25% vs. car build +1% Significant growth driven by content & share gains Revenue growth +124% / organic +27% Robust demand driven by renewables, solar, energy storage systems, HVAC, general industrials Margin expansion YoY excl. Hartland Op Margin 10.5% 12.5% Op Margin 10.7% 9.0% See appendix for GAAP to non-GAAP reconciliation *Formerly known as Automotive Product Segment $112 $251 FY-20 FY-21 Revenue $938 $1,301 FY-20 FY-21 Revenue
17Littelfuse, Inc. © 2022 Q1-22 GUIDANCE Highlights Market Dynamics Demand environment remains strong ~$20m FX headwind to sales for 2022 full year at current rates +100 bps full year additional margin headwinds...ongoing inflationary pressures Expect to largely offset through pricing Q1-22 Sales $563 – $577m, +23% vs. prior year at mid-point EPS $3.14 - $3.30, +21% vs. prior year at mid-point Adjusted effective tax rate ~17% $464 Q1-21 Q1-22 Revenue & EPS $563 - $577 (in millions) See appendix for GAAP to non-GAAP reconciliation GAAP EPS $2.32 * Adj. EPS $2.67 $3.14 - $3.30
18Littelfuse, Inc. © 2022 Carling Technologies acquisition (Transportation Segment) – ~$185m – $190m revenue – ~30 cents EPS, net of deal amortization – ~100 bps company operating margin dilution Low $50m's non-cash amortization expense ~$17m interest expense at current rates Adjusted effective tax rate ~16% – 18% 100% free cash flow conversion ~$110m – $120m capital expenditures 2022 FULL YEAR CONSIDERATIONS
19Littelfuse, Inc. © 2022 Delivered record financial performance with significant sales & earnings growth Strong global growth & execution, driven by tremendous efforts from world-class associates Progress across businesses on strategic initiatives to drive demand creation Well-positioned to deliver continued long-term profitable growth & value for all stakeholders KEY TAKEAWAYS
20Littelfuse, Inc. © 2021 Q&A
21Littelfuse, Inc. © 2021 APPENDIX
22Littelfuse, Inc. © 2022 SUPPLEMENTAL FINANCIAL INFORMATION
23Littelfuse, Inc. © 2022 SUPPLEMENTAL FINANCIAL INFORMATION
24Littelfuse, Inc. © 2022 SUPPLEMENTAL FINANCIAL INFORMATION CONT’D
25Littelfuse, Inc. © 2022 SUPPLEMENTAL FINANCIAL INFORMATION CONT’D