Littelfuse Inc 10-Q for FY2020 Q3

Littelfuse Inc /De (LFUS)

10-Q 2020-10-28 For: 2020-09-26

Added on April 10, 2026

About this 10-Q

Littelfuse Inc filed this 10-Q on October 28, 2020, covering the quarter ended September 26, 2020 (FY2020 Q3).

Headline figures

Quarter ended September 26, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $391.57M; up 8.2% from $361.97M a year earlier
Net income: $55.36M; up 55.3% from net income of $35.65M a year earlier
Diluted EPS: $2.25; up 56.3% from $1.44 a year earlier

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Delaware		36-3795742
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
8755 West Higgins Road
Suite 500
Chicago	Illinois	60631
(Address of principal executive offices)		(ZIP Code)


		Page

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of September 26, 2020 (unaudited) and December 28, 2019	3
	Condensed Consolidated Statements of Net Income for the three and nine months ended September 26, 2020 (unaudited) and September 28, 2019 (unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 26, 2020 (unaudited) and September 28, 2019 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 26, 2020 (unaudited) and September 28, 2019 (unaudited)	6
	Condensed Consolidated Statements of Stockholders' Equity for the nine months ended September 26, 2020 (unaudited) and September 28, 2019 (unaudited)	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	38
Signatures		39


	(Unaudited)
(in thousands)	September 26, 2020		December 28, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	641,890	$	531,139
Short-term investments	52		44
Trade receivables, less allowances of $42,737 and $42,043 at September 26, 2020 and December 28, 2019, respectively	231,930		202,309
Inventories	243,832		237,507
Prepaid income taxes and income taxes receivable	1,218		4,831
Prepaid expenses and other current assets	30,012		28,564
Total current assets	1,148,934		1,004,394





Net property, plant, and equipment	339,870		344,617
Intangible assets, net of amortization	296,159		321,247
Goodwill	799,791		820,589
Investments	26,066		24,099
Deferred income taxes	7,173		8,069
Right of use lease assets, net	18,811		21,918
Other assets	17,566		14,965
Total assets	$	2,654,370	$	2,559,898
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	120,938	$	117,320



Accrued liabilities	98,437		84,120
Accrued income taxes	15,231		14,122
Current portion of long-term debt	—		10,000
Total current liabilities	234,606		225,562
Long-term debt, less current portion	725,507		669,158
Deferred income taxes	46,584		49,763
Accrued post-retirement benefits	40,279		38,198
Non-current operating lease liabilities	14,193		17,166
Other long-term liabilities	63,639		64,037
Shareholders’ equity:
Common stock, par value $0.01 per share: 34,000,000 shares authorized; shares issued, September 26, 2020–26,015,067; December 28, 2019–25,855,203	258		256
Treasury stock, at cost: 1,644,103 and 1,473,901 shares, respectively	(242,323)		(216,447)
Additional paid-in capital	891,924		867,996
Accumulated other comprehensive loss	(107,238)		(106,823)
Retained earnings	986,810		950,901
Littelfuse, Inc. shareholders’ equity	1,529,431		1,495,883
Non-controlling interest	131		131
Total equity	1,529,562		1,496,014
Total liabilities and equity	$	2,654,370	$	2,559,898


	Three Months Ended				Nine Months Ended
(in thousands, except per share data)	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Net sales	$	391,566	$	361,971	$	1,044,999	$	1,165,350
Cost of sales	253,390		231,025		684,012		737,368
Gross profit	138,176		130,946		360,987		427,982

Selling, general, and administrative expenses	50,465		54,224		158,832		174,845
Goodwill impairment charge	—		—		33,841		—
Research and development expenses	13,049		19,728		41,044		62,595
Amortization of intangibles	10,104		9,827		29,912		30,068
Total operating expenses	73,618		83,779		263,629		267,508
Operating income	64,558		47,167		97,358		160,474

Interest expense	4,988		5,559		16,261		16,834
Foreign exchange (gain) loss	(6,174)		4,968		(9,600)		5,636
Other income, net	(1,682)		(4,764)		(1,643)		(3,406)
Income before income taxes	67,426		41,404		92,340		141,410
Income taxes	12,070		5,757		21,331		24,982
Net income	$	55,356	$	35,647	$	71,009	$	116,428

Income per share:
Basic	$	2.27	$	1.46	$	2.92	$	4.72
Diluted	$	2.25	$	1.44	$	2.89	$	4.68

Weighted-average shares and equivalent shares outstanding:
Basic	24,357		24,482		24,354		24,646
Diluted	24,573		24,684		24,535		24,894


	Three Months Ended				Nine Months Ended
(in thousands)	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Net income	$	55,356	$	35,647	$	71,009	$	116,428
Other comprehensive income (loss):
Pension and postemployment adjustment, net of tax	563		137		(9,715)		249



Foreign currency translation adjustments	16,418		(17,163)		9,300		(14,933)
Comprehensive income	$	72,337	$	18,621	$	70,594	$	101,744


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Nine Months Ended
(in thousands)	September 26, 2020		September 28, 2019
OPERATING ACTIVITIES
Net income	$	71,009	$	116,428
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	41,953		38,988
Amortization of intangibles	29,912		30,068

Deferred revenue	(438)		(228)

Impairment charges	36,078		322

Stock-based compensation	14,544		15,738
(Gain) loss on investments and other assets	(1,200)		559
Deferred income taxes	1,567		(203)
Other	(8,549)		8,267
Changes in operating assets and liabilities:
Trade receivables	(29,362)		2,781
Inventories	(1,611)		18,102
Accounts payable	6,661		(29,453)



Accrued liabilities and income taxes	(2,095)		(44,241)
Prepaid expenses and other assets	5,787		3,735
Net cash provided by operating activities	164,256		160,863

INVESTING ACTIVITIES
Acquisitions of businesses, net of cash acquired	—		(775)


Purchases of property, plant, and equipment	(41,536)		(38,397)
Net proceeds from sale of property, plant and equipment	148		6,212
Net cash used in investing activities	(41,388)		(32,960)

FINANCING ACTIVITIES
Proceeds of revolving credit facility	240,000		—
Payments of revolving credit facility	(60,000)		—


Payments of term loan	(145,000)		(7,500)
Net proceeds related to stock-based award activities	6,437		4,412
Purchases of common stock	(22,927)		(99,387)
Debt issuance costs	(1,786)		—
Cash dividends paid	(35,100)		(32,990)
Net cash used in financing activities	(18,376)		(135,465)
Effect of exchange rate changes on cash and cash equivalents	6,259		(6,114)
Increase (decrease) in cash and cash equivalents	110,751		(13,676)
Cash and cash equivalents at beginning of period	531,139		489,733
Cash and cash equivalents at end of period	$	641,890	$	476,057
Supplementary Cash Flow Information
Cash paid during the period for interest	$	17,228	$	17,872

Capital expenditures, not yet paid	$	6,267	$	8,978


	Littelfuse, Inc. Shareholders’ Equity
(in thousands, except share and per share data)	Common Stock		Addl. Paid in Capital		Treasury Stock		Accum. Other Comp. (Loss) Income		Retained Earnings		Non-controlling Interest		Total
Balance at December 28, 2019	$	256	$	867,996	$	(216,447)	$	(106,823)	$	950,901	$	131	$	1,496,014
Net income	—		—		—		—		24,644		—		24,644


Other comprehensive loss, net of tax	—		—		—		(14,979)		—		—		(14,979)
Stock-based compensation	—		2,965		—		—		—		—		2,965

Withheld shares on restricted share units for withholding taxes	—		—		(443)		—		—		—		(443)
Stock options exercised	—		3,399		—		—		—		—		3,399
Repurchases of common stock	—		—		(22,927)		—		—		—		(22,927)
Cash dividends paid ($0.48 per share)	—		—		—		—		(11,725)		—		(11,725)
Balance at March 28, 2020	$	256	$	874,360	$	(239,817)	$	(121,802)	$	963,820	$	131	$	1,476,948
Net loss	—		—		—		—		(8,991)		—		(8,991)



Other comprehensive loss, net of tax	—		—		—		(2,417)		—		—		(2,417)
Stock-based compensation	—		7,887		—		—		—		—		7,887

Withheld shares on restricted share units for withholding taxes	—		—		(2,375)		—		—		—		(2,375)
Stock options exercised	1		3,059		—		—		—		—		3,060

Cash dividends paid ($0.48 per share)	—		—		—		—		(11,678)		—		(11,678)
Balance at June 27, 2020	$	257	$	885,306	$	(242,192)	$	(124,219)	$	943,151	$	131	$	1,462,434
Net income	—		—		—		—		55,356		—		55,356



Other comprehensive income, net of tax	—		—		—		16,981		—		—		16,981
Stock-based compensation	—		3,692		—		—		—		—		3,692

Withheld shares on restricted share units for withholding taxes	—		—		(131)		—		—		—		(131)
Stock options exercised	1		2,926		—		—		—		—		2,927

Cash dividends paid ($0.48 per share)	—		—		—		—		(11,697)		—		(11,697)
Balance at September 26, 2020	$	258	$	891,924	$	(242,323)	$	(107,238)	$	986,810	$	131	$	1,529,562


	Three Months Ended September 26, 2020								Nine Months Ended September 26, 2020
(in thousands)	Electronics Segment		Automotive Segment		Industrial Segment		Total		Electronics Segment		Automotive Segment		Industrial Segment		Total
Electronics – Passive Products and Sensors	$	108,253	$	—	$	—	$	108,253	$	285,697	$	—	$	—	$	285,697
Electronics – Semiconductor	147,096		—		—		147,096		407,112		—		—		407,112
Passenger Car Products	—		52,691		—		52,691		—		135,645		—		135,645
Automotive Sensors	—		26,093		—		26,093		—		64,166		—		64,166
Commercial Vehicle Products	—		25,940		—		25,940		—		71,682		—		71,682
Industrial Products	—		—		31,493		31,493		—		—		80,697		80,697
Total	$	255,349	$	104,724	$	31,493	$	391,566	$	692,809	$	271,493	$	80,697	$	1,044,999


	Three Months Ended September 28, 2019								Nine Months Ended September 28, 2019
(in thousands)	Electronics Segment		Automotive Segment		Industrial Segment		Total		Electronics Segment		Automotive Segment		Industrial Segment		Total
Electronics – Passive Products and Sensors	$	94,766	$	—	$	—	$	94,766	$	311,624	$	—	$	—	$	311,624
Electronics – Semiconductor	132,486		—		—		132,486		440,575		—		—		440,575
Passenger Car Products	—		53,889		—		53,889		—		164,348		—		164,348
Automotive Sensors	—		23,877		—		23,877		—		74,616		—		74,616
Commercial Vehicle Products	—		26,915		—		26,915		—		87,850		—		87,850
Industrial Products	—		—		30,038		30,038		—		—		86,337		86,337
Total	$	227,252	$	104,681	$	30,038	$	361,971	$	752,199	$	326,814	$	86,337	$	1,165,350


(in thousands)	September 26, 2020		December 28, 2019
Raw materials	$	81,849	$	76,732
Work in process	90,494		84,561
Finished goods	105,425		110,388
Inventory Reserves	(33,936)		(34,174)
Total	$	243,832	$	237,507


(in thousands)	Electronics		Automotive		Industrial		Total
As of December 28, 2019	$	650,796	$	131,321	$	38,472	$	820,589

Impairments	—		(33,841)		—		(33,841)
Currency translation	11,122		1,988		(67)		13,043
As of September 26, 2020	$	661,918	$	99,468	$	38,405	$	799,791


	As of September 26, 2020
(in thousands)	Gross Carrying Value		Accumulated Amortization		Net Book Value
Land use rights	$	9,913	$	1,895	$	8,018
Patents, licenses and software	133,737		$	88,142	$	45,595
Distribution network	43,547		38,107		5,440
Customer relationships, trademarks, and tradenames	365,300		128,194		237,106

Total	$	552,497	$	256,338	$	296,159


(in thousands)	Amount
2020	$	41,742
2021	38,258
2022	37,274
2023	32,492
2024	29,695
2025 and thereafter	146,610
Total	$	326,071


(in thousands)	September 26, 2020		December 28, 2019
Employee-related liabilities	$	49,805	$	40,774
Operating lease liability	6,866		7,259
Interest	2,747		5,058
Professional services	2,869		3,986

Restructuring liability	4,542		2,679
Other non-income taxes	3,509		1,940
Other	28,099		22,424
Total	$	98,437	$	84,120


(in thousands)	September 26, 2020		December 28, 2019
Revolving Credit Facility	$	180,000	$	—
Term Loan	—		145,000
Euro Senior Notes, Series A due 2023	136,417		129,808
Euro Senior Notes, Series B due 2028	110,766		105,400
U.S. Senior Notes, Series A due 2022	25,000		25,000
U.S. Senior Notes, Series B due 2027	100,000		100,000
U.S. Senior Notes, Series A due 2025	50,000		50,000
U.S. Senior Notes, Series B due 2030	125,000		125,000
Other	2,619		2,619
Unamortized debt issuance costs	(4,295)		(3,669)
Total debt	725,507		679,158
Less: Current maturities	—		(10,000)
Total long-term debt	$	725,507	$	669,158


	Fair Value Measurements Using
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Cash Equivalents	$	92,472	$	—	$	—	$	92,472
Investments in equity securities	15,042		—		—		15,042
Mutual funds	11,692		—		—		11,692


	Fair Value Measurements Using
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Cash Equivalents	$	118,999	$	—	$	—	$	118,999
Investments in equity securities	12,969		—		—		12,969
Mutual funds	10,464		—		—		10,464


	For the Three Months Ended				For the Nine Months Ended
(in thousands)	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Components of net periodic benefit cost:
Service cost	$	615	$	509	$	1,825	$	1,523
Interest cost	511		777		1,655		2,374
Expected return on plan assets	(422)		(773)		(1,551)		(2,384)
Amortization of prior service and net actuarial loss	279		60		688		184
Net periodic benefit cost	$	983	$	573	$	2,617	$	1,697


(in thousands)	Three Months Ended September 26, 2020						Three Months Ended September 28, 2019
	Pre-tax		Tax		Net of Tax		Pre-tax		Tax		Net of Tax
Defined benefit pension plan and other adjustments	$	273	$	(290)	$	563	$	155	$	18	$	137

Foreign currency translation adjustments	16,418		—		16,418		(17,163)		—		(17,163)
Total change in other comprehensive income (loss)	$	16,691	$	(290)	$	16,981	$	(17,008)	$	18	$	(17,026)


(in thousands)	Pension and postretirement liability and reclassification adjustments		Foreign currency translation adjustment		Accumulated other comprehensive (loss) income
Balance at December 28, 2019	$	(18,046)	$	(88,777)	$	(106,823)

Activity in the period	(9,715)		9,300		(415)
Balance at September 26, 2020	$	(27,761)	$	(79,477)	$	(107,238)


	Three Months Ended				Nine Months Ended
(in thousands, except per share amounts)	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Numerator:
Net income as reported	$	55,356	$	35,647	$	71,009	$	116,428

Denominator:
Weighted average shares outstanding
Basic	24,357		24,482		24,354		24,646
Effect of dilutive securities	216		202		181		248
Diluted	24,573		24,684		24,535		24,894

Earnings Per Share:
Basic earnings per share	$	2.27	$	1.46	$	2.92	$	4.72
Diluted earnings per share	$	2.25	$	1.44	$	2.89	$	4.68


	For the Three Months Ended September 26, 2020						For the Three Months Ended September 28, 2019
(in millions)	Powersem		EB Tech		ATEC		Powersem		EB Tech		ATEC
Sales to related party	$	0.4	$	—	$	—	$	0.2	$	—	$	—
Purchase material/service from related party	0.8		—		2.4		0.8		0.1		1.7

	For the Nine Months Ended September 26, 2020						For the Nine Months Ended September 28, 2019
(in millions)	Powersem		EB Tech		ATEC		Powersem		EB Tech		ATEC
Sales to related party	$	1.1	$	—	$	—	$	0.4	$	—	$	—
Purchase material/service from related party	1.8		—		5.8		2.4		0.3		5.5

	September 26, 2020						December 28, 2019
(in millions)	Powersem		EB Tech		ATEC		Powersem		EB Tech		ATEC
Accounts Receivable balance	$	0.1	$	—	$	—	$	—	$	—	$	—
Accounts Payable balance	0.1		—		0.1		0.2		—		0.1


	Third Quarter								First Nine Months
(in thousands)	2020		2019		Change		% Change		2020		2019		Change		% Change
Net sales	$	391,566	$	361,971	$	29,595	8.2	%	$	1,044,999	$	1,165,350	$	(120,351)	(10.3)	%
Gross profit	138,176		130,946		7,230		5.5	%	360,987		427,982		(66,995)		(15.7)	%
Operating expenses	73,618		83,779		(10,161)		(12.1)	%	263,629		267,508		(3,879)		(1.5)	%
Operating income	64,558		47,167		17,391		36.9	%	97,358		160,474		(63,116)		(39.3)	%
Income before income taxes	67,426		41,404		26,022		62.8	%	92,340		141,410		(49,070)		(34.7)	%
Income taxes	12,070		5,757		6,313		109.7	%	21,331		24,982		(3,651)		(14.6)	%
Net income	$	55,356	$	35,647	$	19,709	55.3	%	$	71,009	$	116,428	$	(45,419)	(39.0)	%


			Exhibit			Description

			10.1*			Amended and Restated Littelfuse Deferred Compensation Plan for Non-Employee Director s. ++

			31.1*			Certification of David W. Heinzmann, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

			31.2*			Certification of Meenal A. Sethna, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

			32.1**			Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

			101			The following financial information from LITTELFUSE, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 26, 2020 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Net Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Stockholders Equity , (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to the Condensed Consolidated Financial Statements.

			104			The cover page from this Quarterly Report on Form 10-Q for the quarter ended September 26, 2020, formatted in Inline XBRL.

			++			Management contract or compensatory plan or arrangement.
			*			Filed herewith.
			**			Furnished herewith.


	Littelfuse, Inc.

	By:	/s/ Meenal A. Sethna
		Meenal A. Sethna
	Executive Vice President and Chief Financial Officer

Date: October 28, 2020	By:	/s/ Jeffrey G. Gorski
		Jeffrey G. Gorski
	Vice President and Chief Accounting Officer