LITTELFUSE INC /DE [LFUS] Filings

10-Q 1 lfus-20221001.htm 10-Q lfus-20221001

United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended October 01, 2022


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

For the transition period from ___ to ___

Commission file number 0-20388

LITTELFUSE, INC.

(Exact name of registrant as specified in its charter)


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)

Registrant’s telephone number, including area code: 773-628-1000

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of exchange on which registered

Common Stock, $0.01 par value

LFUS

NASDAQ

Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one): Large accelerated filer [X] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company ☐ 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. Yes [ ] No [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No [X]

As of October 28, 2022, the registrant had outstanding 24,755,581 shares of Common Stock, net of Treasury Shares.

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TABLE OF CONTENTS


		Page

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of October 01, 2022 (unaudited) and January 01, 2022	3
	Condensed Consolidated Statements of Net Income for the three and nine months ended October 01, 2022 (unaudited) and September 25, 2021 (unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended October 01, 2022 (unaudited) and September 25, 2021 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the nine months ended October 01, 2022 (unaudited) and September 25, 2021 (unaudited)	6
	Condensed Consolidated Statements of Stockholders' Equity for the nine months ended October 01, 2022 (unaudited) and September 25, 2021 (unaudited)	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	39
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41
Signatures		42

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ITEM 1. FINANCIAL STATEMENTS

LITTELFUSE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


	(Unaudited)
(in thousands)	October 1, 2022		January 1, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	474,003	$	478,473
Short-term investments	79		28
Trade receivables, less allowances of $83,872 and $59,232 at October 1, 2022 and January 1, 2022, respectively	339,729		275,192
Inventories	536,026		445,671
Prepaid income taxes and income taxes receivable	5,833		2,035
Prepaid expenses and other current assets	75,643		68,812
Total current assets	1,431,313		1,270,211






Net property, plant, and equipment	458,234		437,889
Intangible assets, net of amortization	605,310		407,126
Goodwill	1,168,458		929,790
Investments	23,770		39,211
Deferred income taxes	10,461		13,127
Right of use lease assets, net	46,175		29,616
Other long-term assets	34,207		24,734
Total assets	$	3,777,928	$	3,151,704
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	219,447	$	222,039



Accrued liabilities	177,127		159,689
Accrued income taxes	42,016		27,905
Current portion of long-term debt	10,220		25,000
Total current liabilities	448,810		434,633
Long-term debt, less current portion	975,610		611,897
Deferred income taxes	116,595		81,289
Accrued post-retirement benefits	36,842		37,037
Non-current operating lease liabilities	35,778		22,305
Other long-term liabilities	75,402		71,023
Shareholders’ equity:
Common stock, par value $0.01 per share: 34,000,000 shares authorized; shares issued, October 1, 2022–26,440,679; January 1, 2022–26,350,763	261		260
Additional paid-in capital	969,459		946,588
Treasury stock, at cost: 1,685,182 and 1,664,711 shares, respectively	(252,828)		(248,120)
Accumulated other comprehensive loss	(135,203)		(73,463)
Retained earnings	1,507,035		1,268,124
Littelfuse, Inc. shareholders’ equity	2,088,724		1,893,389
Non-controlling interest	167		131
Total equity	2,088,891		1,893,520
Total liabilities and equity	$	3,777,928	$	3,151,704

See accompanying Notes to Condensed Consolidated Financial Statements.

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LITTELFUSE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME

(Unaudited)


	Three Months Ended				Nine Months Ended
(in thousands, except per share data)	October 1, 2022		September 25, 2021		October 1, 2022		September 25, 2021
Net sales	$	658,880	$	539,581	$	1,900,646	$	1,526,863
Cost of sales	402,059		325,009		1,122,258		954,429
Gross profit	256,821		214,572		778,388		572,434

Selling, general, and administrative expenses	90,219		67,468		258,820		199,071

Research and development expenses	25,752		15,779		68,796		46,912
Amortization of intangibles	15,567		10,446		39,883		31,608
Restructuring, impairment, and other charges	3,413		772		4,265		1,998
Total operating expenses	134,951		94,465		371,764		279,589
Operating income	121,870		120,107		406,624		292,845

Interest expense	8,399		4,602		17,069		13,901
Foreign exchange loss	18,191		3,154		40,051		8,315
Other (income) expense, net	(698)		(1,240)		9,789		(10,867)
Income before income taxes	95,978		113,591		339,715		281,496
Income taxes	20,510		21,537		59,713		49,634
Net income	$	75,468	$	92,054	$	280,002	$	231,862

Earnings per share:
Basic	$	3.05	$	3.74	$	11.32	$	9.43
Diluted	$	3.02	$	3.69	$	11.21	$	9.31

Weighted-average shares and equivalent shares outstanding:
Basic	24,755		24,622		24,726		24,582
Diluted	24,988		24,926		24,986		24,904

See accompanying Notes to Condensed Consolidated Financial Statements.

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LITTELFUSE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended				Nine Months Ended
(in thousands)	October 1, 2022		September 25, 2021		October 1, 2022		September 25, 2021
Net income	$	75,468	$	92,054	$	280,002	$	231,862
Other comprehensive (loss) income:
Pension and postemployment adjustment, net of tax	599		487		1,548		1,270


Cash flow hedge, net of tax	7,609		—		7,068		—
Foreign currency translation adjustments	(36,396)		(5,441)		(70,356)		(5,641)
Comprehensive income	$	47,280	$	87,100	$	218,262	$	227,491

See accompanying Notes to Condensed Consolidated Financial Statements.

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LITTELFUSE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	Nine Months Ended
(in thousands)	October 1, 2022		September 25, 2021
OPERATING ACTIVITIES
Net income	$	280,002	$	231,862
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	48,326		41,441
Amortization of intangibles	39,883		31,608

Deferred revenue	(377)		(2,154)
Non-cash inventory charges	11,534		6,807


Stock-based compensation	19,732		16,010
Loss (gain) on investments and other assets	13,740		(9,739)

Deferred income taxes	(4,320)		1,116
Other	55,424		11,735
Changes in operating assets and liabilities:
Trade receivables	(56,431)		(83,793)
Inventories	(83,803)		(71,232)
Accounts payable	(3,838)		53,945



Accrued liabilities and income taxes	(4,399)		23,294
Prepaid expenses and other assets	(2,034)		(10,236)
Net cash provided by operating activities	313,439		240,664
INVESTING ACTIVITIES
Acquisitions of businesses, net of cash acquired	(532,772)		(110,646)


Purchases of property, plant, and equipment	(77,773)		(57,526)
Net proceeds from sale of property, plant and equipment, and other	565		2,561
Net cash used in investing activities	(609,980)		(165,611)
FINANCING ACTIVITIES

Proceeds of term loan	300,000		—
Proceeds of senior notes	100,000		—
Payments of senior notes payable	(25,000)		—
Repayments of other debts	(5,979)		—
Payments of term loan	(1,875)		—
Payments of revolving credit facility	—		(30,000)
Net proceeds related to stock-based award activities	(1,568)		5,771

Debt issuance costs	(2,600)		—
Cash dividends paid	(41,055)		(36,648)
Net cash provided by (used in) financing activities	321,923		(60,877)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(31,963)		(5,832)
(Decrease) increase in cash, cash equivalents, and restricted cash	(6,581)		8,344
Cash, cash equivalents, and restricted cash at beginning of period	482,836		687,525
Cash, cash equivalents, and restricted cash at end of period	$	476,255	$	695,869
Supplementary Cash Flow Information
Reconciliation of cash and cash equivalents:
Cash and cash equivalents	$	474,003	$	690,682
Restricted cash included in prepaid expenses and other current assets	$	824	$	3,483
Restricted cash included in other long-term assets	$	1,428	$	1,704
Cash paid interest during the period	$	16,888	$	14,830

Capital expenditures, not yet paid	$	9,111	$	9,234

See accompanying Notes to Condensed Consolidated Financial Statements.

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LITTELFUSE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)


	Littelfuse, Inc. Shareholders’ Equity
(in thousands, except share and per share data)	Common Stock		Addl. Paid in Capital		Treasury Stock		Accum. Other Comp. (Loss)		Retained Earnings		Non-controlling Interest		Total
Balance at January 1, 2022	$	260	$	946,588	$	(248,120)	$	(73,463)	$	1,268,124	$	131	$	1,893,520
Net income	—		—		—		—		117,518		—		117,518


Other comprehensive loss, net of tax	—		—		—		(2,203)		—		—		(2,203)
Stock-based compensation	—		3,886		—		—		—		—		3,886

Withheld shares on restricted share units for withholding taxes	—		—		(4)		—		—		—		(4)
Stock options exercised	—		1,021		—		—		—		—		1,021

Cash dividends paid ($0.53 per share)	—		—		—		—		(13,086)		—		(13,086)
Balance at April 2, 2022	$	260	$	951,495	$	(248,124)	$	(75,666)	$	1,372,556	$	131	$	2,000,652
Net income	—		—		—		—		87,016		—		87,016



Other comprehensive loss, net of tax	—		—		—		(31,349)		—		—		(31,349)
Stock-based compensation	—		11,382		—		—		—		—		11,382

Withheld shares on restricted share units for withholding taxes	—		—		(4,704)		—		—		—		(4,704)
Stock options exercised	1		2,060		—		—		—		—		2,061

Cash dividends paid ($0.53 per share)	—		—		—		—		(13,115)		—		(13,115)
Balance at July 2, 2022	$	261	$	964,937	$	(252,828)	$	(107,015)	$	1,446,457	$	131	$	2,051,943
Net income	—		—		—		—		75,468		—		75,468



Other comprehensive loss, net of tax	—		—		—		(28,188)		—		—		(28,188)
Stock-based compensation	—		4,464		—		—		—		—		4,464
Non-controlling interest									(36)		36		—

Stock options exercised	—		58		—		—		—		—		58

Cash dividends paid ($0.60 per share)	—		—		—		—		(14,854)		—		(14,854)
Balance at October 1, 2022	$	261	$	969,459	$	(252,828)	$	(135,203)	$	1,507,035	$	167	$	2,088,891

See accompanying Notes to Condensed Consolidated Financial Statements.

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	Littelfuse, Inc. Shareholders’ Equity
(in thousands, except share and per share data)	Common Stock		Addl. Paid in Capital		Treasury Stock		Accum. Other Comp. (Loss)		Retained Earnings		Non-controlling Interest		Total
Balance at December 26, 2020	$	259	$	907,858	$	(242,366)	$	(91,157)	$	1,034,048	$	131	$	1,608,773
Net income	—		—		—		—		57,713		—		57,713


Other comprehensive income (loss), net of tax	—		—		—		(4,871)		—		—		(4,871)
Stock-based compensation	—		3,395		—		—		—		—		3,395


Stock options exercised	—		7,509		—		—		—		—		7,509

Cash dividends paid ($0.48 per share)	—		—		—		—		(11,782)		—		(11,782)
Balance at March 27, 2021	$	259	$	918,762	$	(242,366)	$	(96,028)	$	1,079,979	$	131	$	1,660,737
Net income	—		—		—		—		82,095		—		82,095


Other comprehensive income, net of tax	—		—		—		5,454		—		—		5,454
Stock-based compensation	—		8,843		—		—		—		—		8,843

Withheld shares on restricted share units for withholding taxes	—		—		(5,597)		—		—		—		(5,597)
Stock options exercised	1		2,501		—		—		—		—		2,502


Cash dividends paid ($0.48 per share)	—		—		—		—		(11,814)		—		(11,814)
Balance at June 26, 2021	$	260	$	930,106	$	(247,963)	$	(90,574)	$	1,150,260	$	131	$	1,742,220
Net income	—		—		—		—		92,054		—		92,054


Other comprehensive loss, net of tax	—		—		—		(4,954)		—		—		(4,954)
Stock-based compensation	—		3,772		—		—		—		—		3,772

Withheld shares on restricted share units for withholding taxes	—		—		(115)		—		—		—		(115)
Stock options exercised	—		1,473		—		—		—		—		1,473


Cash dividends paid ($0.53 per share)	—		—		—		—		(13,052)		—		(13,052)
Balance at September 25, 2021	$	260	$	935,351	$	(248,078)	$	(95,528)	$	1,229,262	$	131	$	1,821,398

See accompanying Notes to Condensed Consolidated Financial Statements.

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Notes to Condensed Consolidated Financial Statements

1. Summary of Significant Accounting Policies and Other Information

Nature of Operations

Founded in 1927, Littelfuse is an industrial technology manufacturing company empowering a sustainable, connected, and safer world. Across more than 15 countries, and with approximately 19,000 global associates, the Company partners with customers to design and deliver innovative, reliable solutions. Serving over 100,000 end customers, the Company’s products are found in a variety of industrial, transportation and electronics end markets – everywhere, every day.

Basis of Presentation

The Company’s accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and disclosures normally included in the consolidated balance sheets, statements of net income and comprehensive income, statements of cash flows, and statement of stockholders' equity prepared in conformity with U.S. GAAP have been condensed or omitted as permitted by such rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. They have been prepared in accordance with accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended January 1, 2022 which should be read in conjunction with the disclosures therein. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal, recurring nature. Operating results for interim periods are not necessarily indicative of annual operating results.

Revenue Recognition

Revenue Disaggregation

The following tables disaggregate the Company’s revenue by primary business units for the three and nine months ended October 1, 2022 and September 25, 2021:


	Three Months Ended October 1, 2022								Nine Months Ended October 1, 2022
(in thousands)	Electronics Segment		Transportation Segment		Industrial Segment		Total		Electronics Segment		Transportation Segment		Industrial Segment		Total
Electronics – Passive Products and Sensors	$	188,916	$	—	$	—	$	188,916	$	521,172	$	—	$	—	$	521,172
Electronics – Semiconductor	208,713		—		—		208,713		600,454		—		—		600,454
Passenger Car Products	—		62,280		—		62,280		—		186,552		—		186,552
Automotive Sensors	—		22,998		—		22,998		—		72,336		—		72,336
Commercial Vehicle Products	—		96,457		—		96,457		—		289,378		—		289,378
Industrial Products	—		—		79,516		79,516		—		—		230,754		230,754
Total	$	397,629	$	181,735	$	79,516	$	658,880	$	1,121,626	$	548,266	$	230,754	$	1,900,646

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	Three Months Ended September 25, 2021								Nine Months Ended September 25, 2021
(in thousands)	Electronics Segment		Transportation Segment		Industrial Segment		Total		Electronics Segment		Transportation Segment		Industrial Segment		Total
Electronics – Passive Products and Sensors	$	171,299	$	—	$	—	$	171,299	$	459,012	$	—	$	—	$	459,012
Electronics – Semiconductor	175,941		—		—		175,941		500,110		—		—		500,110
Passenger Car Products	—		64,630		—		64,630		—		200,579		—		200,579
Automotive Sensors	—		24,112		—		24,112		—		79,081		—		79,081
Commercial Vehicle Products	—		35,673		—		35,673		—		106,602		—		106,602
Industrial Products	—