Littelfuse Reports First Quarter Results
First Quarter Highlights
-
Sales for the first quarter of 2013 increased 8% sequentially and 6%
year over year to
$170.9 million . The increase in sales was broad based, as all businesses and all geographies grew compared to the prior year. -
On a GAAP basis, first quarter 2013 earnings were
$0.66 per diluted share. This includes a non-cash charge of$10.7 million pre-tax ($0.29 per share after tax) to write off the remaining equity investment and loan balance for Shocking Technologies, which is in Chapter 7 bankruptcy. Earnings per share for the first quarter of 2012 were$0.80 . -
Sales and order trends by business unit were as follows:
-
Electronics sales increased 3% year over year due primarily to low
channel inventories and improving market sentiment. While all
regions had at least modest growth, the largest increase was in
Europe reflecting partial recovery from a very weak first quarter of 2012. -
Automotive sales increased 13% year over year due to the
acquisitions of
Accel and Terra and growth in the passenger vehicle business led byAsia . This was partially offset by the commercial vehicle business which, while showing signs of recovery, still declined 10% compared to the first quarter of 2012 (excluding Terra). - Electrical sales grew 4% year over year due to growth in power fuses primarily reflecting increased sales into the solar market.
- The electronics book-to-bill ratio for the first quarter of 2013 increased to 1.18 compared to 1.16 in the first quarter of 2012.
-
Electronics sales increased 3% year over year due primarily to low
channel inventories and improving market sentiment. While all
regions had at least modest growth, the largest increase was in
-
Cash provided by operating activities was
$16.0 million for the first quarter of 2013 compared to$7.9 million for the first quarter of 2012 reflecting improved margins and strong working capital performance. Capital expenditures for the first quarter of 2013 were$5.5 million compared to$3.2 million for the first quarter of 2012.
-
The previous share repurchase authorization expired on
April 30, 2013 and was replaced with a one million share repurchase authorization effective throughApril 2014 . -
As previously announced, the company has entered into a definitive
agreement to acquire
Hamlin, Inc. from Key Safety Systems for$145 million in a cash transaction. The purchase price represents approximately 8.2 times trailing EBITDA. This transaction is expected to close by the end of May.
"The broad-based sales increase in the first quarter coupled with
improving book-to-bill is encouraging," said
Outlook
-
Sales for the second quarter of 2013 are expected to be in the range
of
$177 to$187 million which represents 1% to 6% growth compared to the second quarter of 2012. -
Earnings for the second quarter of 2013 are expected to be in the
range of
$1.03 to$1.18 per diluted share. -
Both the sales and earnings guidance above excludes Hamlin. If the
Hamlin transaction closes on schedule at the end of May, it is
expected that it would add approximately
$7 million to sales and be slightly accretive to earnings for the second quarter, excluding acquisition-related costs.
Dividend
The company will pay a cash dividend of
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"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 PSLRA. These statements may involve risks
and uncertainties, including, but not limited to, risks relating to
product demand and market acceptance, economic conditions, the impact of
competitive products and pricing, product quality problems or product
recalls, capacity and supply difficulties or constraints, coal mining
exposures reserves, failure of an indemnification for environmental
liability, exchange rate fluctuations, commodity price fluctuations, the
effect of the company's accounting policies, labor disputes,
restructuring costs in excess of expectations, pension plan asset
returns less than assumed, integration of acquisitions and other risks
which may be detailed in the company's other
LFUS - F
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Net Sales and Operating Income by Business Unit | |||||||||||
(In thousands of USD, unaudited) | |||||||||||
First Quarter | |||||||||||
2013 | 2012 | % Change | |||||||||
Net Sales |
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Electronics | $ | 79,415 | $ | 77,055 | 3 | % | |||||
Automotive | 59,385 | 52,626 | 13 | % | |||||||
Electrical | 32,118 | 30,897 | 4 | % | |||||||
Total net sales | $ | 170,918 | $ | 160,578 | 6 | % | |||||
First Quarter | |||||||||||
2013 | 2012 | % Change | |||||||||
Operating Income |
|||||||||||
Electronics | $ | 12,143 | $ | 10,112 | 20 | % | |||||
Automotive | 9,483 | 9,505 | (0 | %) | |||||||
Electrical | 6,491 | 6,207 | 5 | % | |||||||
Total operating income | $ | 28,117 | $ | 25,824 | 9 | % | |||||
Interest expense | 376 | 423 | |||||||||
Investment impairment (1) | 10,678 | 525 | |||||||||
Other (income) expense, net | (909 | ) | 101 | ||||||||
Income before taxes | $ | 17,972 | $ | 24,775 | (27 | %) | |||||
(1) Impairment and loan losses from investment in Shocking Technologies. | |||||||||||
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Condensed Consolidated Balance Sheets | |||||||||||
(In thousands of USD, except share amounts) | |||||||||||
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(Unaudited) | |||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 246,895 | $ | 235,404 | |||||||
Short-term investments | 8,344 | - | |||||||||
Accounts receivable, less allowances | 107,044 | 100,559 | |||||||||
Inventories | 71,372 | 75,580 | |||||||||
Deferred income taxes | 10,874 | 11,890 | |||||||||
Prepaid expenses and other current assets | 15,857 | 16,532 | |||||||||
Assets held for sale | 5,500 | 5,500 | |||||||||
Total current assets | 465,886 | 445,465 | |||||||||
Property, plant and equipment: | |||||||||||
Land | 6,328 | 6,243 | |||||||||
Buildings | 55,159 | 54,559 | |||||||||
Equipment | 309,975 | 304,954 | |||||||||
371,462 | 365,756 | ||||||||||
Accumulated depreciation | (251,162 | ) | (244,845 | ) | |||||||
Net property, plant and equipment | 120,300 | 120,911 | |||||||||
Intangible assets, net of amortization: | |||||||||||
Patents, licenses and software | 10,521 | 11,144 | |||||||||
Distribution network | 18,243 | 18,964 | |||||||||
Customer lists, trademarks and tradenames | 17,738 | 18,704 | |||||||||
Goodwill | 131,850 | 133,592 | |||||||||
178,352 | 182,404 | ||||||||||
Investment in unconsolidated entity | - | 8,666 | |||||||||
Other investment | 11,572 | 10,327 | |||||||||
Deferred income taxes | 9,826 | 8,090 | |||||||||
Other assets | 1,878 | 1,865 | |||||||||
Total assets | $ | 787,814 | $ | 777,728 | |||||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 29,582 | $ | 27,226 | |||||||
Accrued payroll | 13,374 | 20,540 | |||||||||
Accrued expenses | 9,703 | 11,062 | |||||||||
Accrued severance | 776 | 1,033 | |||||||||
Accrued income taxes | 8,196 | 11,559 | |||||||||
Current portion of long-term debt | 94,000 | 84,000 | |||||||||
Total current liabilities | 155,631 | 155,420 | |||||||||
Accrued post-retirement benefits | 17,692 | 22,338 | |||||||||
Other long-term liabilities | 13,820 | 12,412 | |||||||||
Total equity | 600,671 | 587,558 | |||||||||
Total liabilities and equity | $ | 787,814 | $ | 777,728 | |||||||
Common shares issued and outstanding of | |||||||||||
22,145,423 and 22,029,446 at |
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Consolidated Statements of Comprehensive Income | |||||||||||
(In thousands of USD, except per share data, unaudited) | |||||||||||
For the Three Months Ended | |||||||||||
|
|
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Net sales | $ | 170,918 | $ | 160,578 | |||||||
Cost of sales | 106,312 | 99,716 | |||||||||
Gross profit | 64,606 | 60,862 | |||||||||
Selling, general and administrative | |||||||||||
expenses | 29,202 | 28,409 | |||||||||
Research and development expenses | 5,715 | 5,161 | |||||||||
Amortization of intangibles | 1,572 | 1,468 | |||||||||
36,489 | 35,038 | ||||||||||
Operating income | 28,117 | 25,824 | |||||||||
Interest expense | 376 | 423 | |||||||||
Impairment and loan loss in unconsolidated | |||||||||||
affiliate | 10,678 | 525 | |||||||||
Other (income) expense, net | (909 | ) | 101 | ||||||||
Income before income taxes | 17,972 | 24,775 | |||||||||
Income taxes | 3,178 | 7,212 | |||||||||
Net income | $ | 14,794 | $ | 17,563 | |||||||
Net income per share: | |||||||||||
Basic | $ | 0.67 | $ | 0.81 | |||||||
Diluted | $ | 0.66 | $ | 0.80 | |||||||
Weighted average shares and | |||||||||||
equivalent shares outstanding: | |||||||||||
Basic | 22,095 | 21,608 | |||||||||
Diluted | 22,366 | 21,929 | |||||||||
Diluted Net Income Per Share |
|||||||||||
Net income as reported | $ | 14,794 | $ | 17,563 | |||||||
Less: income allocated to participating | |||||||||||
securities | (19 | ) | (49 | ) | |||||||
Net income available to common | |||||||||||
shareholders | $ | 14,775 | $ | 17,514 | |||||||
Weighted average shares adjusted for | |||||||||||
dilutive securities | 22,366 | 21,929 | |||||||||
Diluted net income per share | $ | 0.66 | $ | 0.80 | |||||||
Comprehensive income | $ | 10,968 | $ | 27,031 | |||||||
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Consolidated Statements of Cash Flows | |||||||||||
(In thousands of USD) |
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For the Three Months Ended | |||||||||||
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(Unaudited) | |||||||||||
OPERATING ACTIVITIES: | |||||||||||
Net income | $ | 14,794 | $ | 17,563 | |||||||
Adjustments to reconcile net income to net cash | |||||||||||
provided by operating activities: | |||||||||||
Depreciation | 6,232 | 6,481 | |||||||||
Amortization of intangibles | 1,572 | 1,468 | |||||||||
Impairment and loan loss in unconsolidated affiliate | 10,678 | 525 | |||||||||
Non-cash inventory charge(1) | - | 205 | |||||||||
Stock-based compensation | 1,779 | 1,365 | |||||||||
(Gain) loss on disposal of fixed assets | (24 | ) | 7 | ||||||||
Excess tax benefit on stock-based compensation | (467 | ) | (475 | ) | |||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | (9,745 | ) | (14,017 | ) | |||||||
Inventories | 3,632 | (1,713 | ) | ||||||||
Accounts payable | 2,452 | 8,552 | |||||||||
Accrued expenses (including post retirement) | (4,619 | ) | (5,543 | ) | |||||||
Accrued payroll and severance | (7,319 | ) | (7,728 | ) | |||||||
Accrued taxes | (3,946 | ) | 1,275 | ||||||||
Prepaid expenses and other | 1,026 | (101 | ) | ||||||||
Net cash provided by operating activities | 16,045 | 7,864 | |||||||||
INVESTING ACTIVITIES: | |||||||||||
Purchases of property, plant and equipment | (5,453 | ) | (3,244 | ) | |||||||
Purchase of short-term investments | (8,478 | ) | (4,616 | ) | |||||||
Proceeds from sale of property, plant and equipment | 9 | 21 | |||||||||
Net cash used in investing activities | (13,922 | ) | (7,839 | ) | |||||||
FINANCING ACTIVITIES: | |||||||||||
Proceeds from debt | 15,000 | 17,000 | |||||||||
Payments of revolving credit facility | (5,000 | ) | (5,500 | ) | |||||||
Cash dividends paid | (4,410 | ) | (3,888 | ) | |||||||
Proceeds from exercise of stock options | 5,283 | 4,217 | |||||||||
Excess tax benefit on stock-based compensation | 467 | 475 | |||||||||
Net cash provided by financing activities | 11,340 | 12,304 | |||||||||
Effect of exchange rate changes on cash and cash | |||||||||||
equivalents | (1,972 | ) | 2,347 | ||||||||
Increase in cash and cash equivalents | 11,491 | 14,676 | |||||||||
Cash and cash equivalents at beginning of period | 235,404 | 164,016 | |||||||||
Cash and cash equivalents at end of period | $ | 246,895 | $ | 178,692 | |||||||
(1) Purchase accounting adjustment related to acquisitions. |
Vice
President, Operations Support, CFO and Treasurer
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