SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED April 1, 2000 OR
TRANSITION REPORT PURSUANT TO SECTION 13 OF 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 (I.R.S. Employer
of incorporation or organization) Identification No.)
800 East Northwest Highway
Des Plaines, Illinois 60016
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(847) 824-1188
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 filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes X No
As of April 1, 2000, 19,578,598 shares of common stock, $.01 par value,
of the Registrant and warrants to purchase 2,435,915 shares of common stock,
$.01 par value, of the Registrant were outstanding.
<PAGE>
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
PAGE
Item 1. Financial Statements
Condensed Consolidated Statements of Income for the periods
ended April 1, 2000 and April 3, 1999 .............................1
Condensed Consolidated Balance Sheets for the periods ended
April 1, 2000 and January 1, 2000 .................................2
Condensed Consolidated Statements of Cash Flows for the periods
ended April 1, 2000 and April 3, 1999 .............................3
Notes to the Condensed Consolidated Financial Statements ..........4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations ....................6
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K...................................12
<PAGE>
<TABLE>
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(In thousands, except per share data)
(unaudited)
For the Three
Months Ended
April 1, April 3,
2000 1999
<S> <C> <C>
Net sales $ 95,319 $ 68,971
Cost of sales 56,090 43,184
---------------- ----------------
Gross profit 39,229 25,787
Selling, general and administrative expenses 17,772 12,596
Research and development expenses 2,531 2,387
Amortization of intangibles 1,725 1,742
----------------- -----------------
Operating income 17,201 9,062
Interest expense 1,225 1,342
Other (income) /expense (234) (382)
------------------- -------------------
Income before income taxes 16,210 8,102
Income taxes 5,997 3,079
Net income $ 10,213 $ 5,023
================== ================
Net income per share -Basic $ 0.52 $ 0.25
================== =================
-Diluted $ 0.46 $ 0.23
================== =================
Weighted-average shares and
Equivalent shares outstanding -Basic 19,531 19,806
================= ================
-Diluted 22,000 21,913
================= ================
</TABLE>
<PAGE>
<TABLE>
CONDENSED CONSOLIDATED
BALANCE SHEETS
(In thousands)
(unaudited)
April 1, January 1,
2000 2000
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 3,440 $ 1,888
Receivables 66,260 59,583
Inventories 55,553 48,916
Other current assets 11,387 8,750
------------ -----------
Total current assets $ 136,640 $ 119,137
Property, plant, and equipment, net 90,394 91,791
Reorganization value, net 33,236 33,943
Other intangible assets, net 28,766 29,570
Other assets 1,267 1,257
------------ -----------
$ 290,303 $ 275,698
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities excluding current portion
of long-term debt 59,327 57,241
Current portion of long-term debt 23,085 20,974
------------ -----------
Total current liabilities 82,412 78,215
Long-term debt 54,977 55,460
Deferred income taxes 4,490 4,490
Other long-term liabilities 1,182 501
Shareholders' equity 147,242 137,032
----------- -----------
$ 290,303 $275,698
=========== ===========
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
For the Three
Months Ended
April 1, April 3,
2000 1999
Operating activities:
<S> <C> <C>
Net income $ 10,213 $ 5,023
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation 4,962 4,268
Amortization 1,725 1,742
Changes in operating assets and liabilities:
Accounts receivable (6,931) (6,409)
Inventories (6,712) (682)
Accounts payable and accrued expenses 2,119 1,398
Other, net (2,609) (836)
---------------- ----------------
Net cash provided by operating activities $ 2,767 $ 4,504
Cash used in investing activities:
Purchases of property, plant, and equipment, net (3,836) (5,003)
---------------- ---------------
$ (3,836) $ (5,003)
Cash provided by (used in) financing activities:
Borrowings/ (Payments) of long-term debt, net 2,173 (121)
Proceeds from exercise of stock options and warrants 806 68
Purchase of common stock and warrants (108) (9,833)
----------------- ---------------
$ 2,871 $ (9,886)
Effect of exchange rate changes on cash (251) (130)
---------------- ---------------
Increase/ (decrease) in cash and cash equivalents 1,551 (10,515)
Cash and cash equivalents at
beginning of period 1,888 27,961
--------------- ---------------
Cash and cash equivalents at end of period $ 3,440 $ 17,446
=============== ===============
</TABLE>
<PAGE>
Notes to Condensed Consolidated Financial Statements
(Unaudited)
April 1, 2000
1. Basis of Presentation
The accompanying unaudited consolidated condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the information
and notes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments, consisting
of normal recurring accruals, considered necessary for a fair presentation have
been included. Operating results for the period ended April 1, 2000, are not
necessarily indicative of the results that may be expected for the year ending
December 30, 2000. For further information, refer to the Company's consolidated
financial statements and the notes thereto incorporated by reference in the
Company's Annual Report on Form 10-K for the year ended January 1, 2000.
2. Inventories
The components of inventories are as follows (in thousands):
<TABLE>
April 1, January 1,
2000 2000
<S> <C> <C>
Raw material $13,441 $ 12,684
Work in process 16,415 14,854
Finished goods 25,697 21,378
------- ---------
Total $55,553 $ 48,916
======= ========
</TABLE>
<PAGE>
3. Per Share Data
Net income per share amounts for the three months ended April 1, 2000 and April
3, 1999 are based on the weighted average number of common and common
equivalent shares outstanding during the periods as follows (in thousands,
except per share data):
<TABLE>
Three months ended
April 1, April 3,
2000 1999
------- --------
<S> <C> <C>
Average shares outstanding 19,531 19,806
Net effect of dilutive stock options,
warrants and restricted shares
- Basic - -
------------ -----------
- Diluted 2,469 2,107
------------ -----------
Average shares outstanding
- Basic 19,531 19,806
============ ===========
- Diluted 22,000 21,913
============ ===========
Net income $ 10,213 $ 5,023
============ ===========
Net income per share
- Basic $ 0.52 $ 0.25
=========== ===========
- Diluted $ 0.46 $ 0.23
=========== ===========
</TABLE>
4. Comprehensive Income
In accordance with Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income," total comprehensive income for the three
months ended April 1, 2000, and April 3, 1999, was approximately $9.5 million
and $3.6 million, respectively. The adjustment for comprehensive income is
related to the Company's foreign currency translation.
<PAGE>
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
Results of Operations
Sales increased 38 % to $95.3 million in the first quarter this year compared to
$69.0 million in the first quarter of 1999. Gross margin was 41.2% this year
compared to 37.4 % in the same period of the prior year. Operating income
increased to 18.0% of sales in the first quarter of 2000 compared to 13.1% in
the prior year. Net income increased 103% to $10.2 million in the first quarter
this year compared to $5.0 million in the first quarter of last year and diluted
earnings per share increased approximately 100% to $0.46 in the first quarter
this year compared to $0.23 per diluted share in the same quarter last year.
First quarter 2000 sales increased $26.3 million compared to the same quarter in
the prior year. Continued growth in worldwide demand for electronic products,
particularly in the telecom, datacom and wireless markets, was the driving force
behind the first quarter sales increase. Sales in the Americas increased 45%
over the first quarter of 1999 primarily due to continued strength in the
electronics market. Europe sales grew 27% in dollars and 37% in constant
currency. Increased Southeast Asia and Korea electronic sales contributed to a
31% sales increase in the Asia-Pacific region.
Electronic sales increased to $57.0 million in the first quarter of 2000 from
$33.2 million in the same quarter of last year for an increase of $23.8 million
or 72%. This was the first full quarter of suppression product sales following
the acquisition of the Harris suppression products group. Electronic sales
excluding suppression sales were up 40% compared to the same period last year.
Automotive sales increased to $27.7 million in the first quarter 2000 from $26.3
million the same quarter last year for an increase of $1.4 million or 5%.
Automotive sales excluding suppression products were flat compared to the prior
year. Strength in U.S. car builds as well as higher aftermarket product sales
contributed to a 9% increase in U.S. automotive sales for the quarter. This
increase was offset by a 17% decrease in Europe due to a weaker Euro combined
with lower automotive sales as compared with the same period last year. Power
fuse sales grew to $10.6 million in the first quarter 2000 from $9.5 million in
the same quarter last year for an increase of $1.1 million or 11 %.
Gross profit was $39.2 million or 41.2% of sales for the first quarter of 2000
compared to $25.8 million or 37.4% in the same quarter last year. The key
factors behind the increase in gross profit were increased unit volume,
allocation of some capacity constrained products to higher gross margin
opportunities and continued cost reduction efforts.
Operating expenses, excluding amortization, were $20.3 million or 21.3% of sales
for the first quarter of 2000 compared to $15.0 million or 21.7% of sales for
the same quarter in the prior year. Amortization of the reorganization value and
other intangibles decreased to 1.8% of sales for the first quarter of 2000, from
2.5 % of sales in the first quarter of 1999 due to increased sales. Total
operating expenses, including intangible amortization, were 23.1% of sales in
the first quarter 2000 compared to 24.2% of sales in the same quarter last year.
Operating income was $17.2 million or 18.0 % of sales for the first quarter 2000
compared to $9.1 million or 13.1 % of sales for the same quarter of last year.
Interest expense was $1.2 million in the first quarter of this year compared to
$1.3 million in the first quarter of last year due to lower average debt levels.
Other income was $0.2 million for the first quarter of 2000 compared to $0.4
million of other expense in the first quarter of the prior year.
Income before income taxes was $16.2 million for the first quarter 2000 compared
to $8.1 million for the first quarter of 1999. Income taxes were $6.0 million
with an effective tax rate of 37% for the first quarter of 2000 compared to $3.1
million with an effective tax rate of 38 % in the first quarter of last year.
Net income for the first quarter 2000 was $10.2 million or $0.46 per diluted
share compared to $5.0 million or $0.23 per diluted share for the same quarter
of last year.
Liquidity and Capital Resources
Assuming no material adverse changes in market conditions or interest rates,
management expects that the Company will have sufficient cash from operations to
support both its operations and its current debt obligations for the foreseeable
future.
Littelfuse started the 2000 year with $1.9 million of cash. Net cash provided by
operations was $2.8 million for the first three months. Net cash used to invest
in property, plant and equipment was $3.8 million. Cash used to repay long term
debt and to repurchase stock was $0.2 million. In addition, proceeds from
warrant and stock option exercises were $0.8 million and proceeds from
borrowings were $2.2 million, resulting in net cash provided by financing
activities of $2.8 million. The net increase in cash for the three months ended
April 1, 2000 was $1.6 million. This left the Company with a cash balance of
approximately $3.4 million at April 1, 2000.
The ratio of current assets to current liabilities was 1.7 to 1 at the end of
the first quarter 2000 compared to 1.6 to 1 at year end 1999 and 2.0 to 1 at the
end of the first quarter 1999. The days sales in receivables was approximately
63 days at the end of the first quarter 2000 compared to 68 days at year end
1999 and 59 days at first quarter end 1999. The system transition difficulties
that caused an increase in accounts receivable in 1999 have been mitigated and
days sales outstanding in accounts receivable has been favorably reduced in the
first quarter of this year. The days inventory outstanding was approximately 83
days at first quarter end 2000 compared to 94 days at year-end 1999 and 77 days
at first quarter end 1999. Despite the increased working capital required to
support higher sales, management is committed to improve working capital levels
in the remainder of 2000.
The Company's capital expenditures were $3.8 million for the first quarter 2000.
The Company expects that capital expenditures, which will be primarily for new
machinery, equipment and information systems, will be approximately $22-23
million in 2000.
The long-term debt at the end of the first quarter 2000 consisted of five types
totaling $78.0 million. They are as follows: (1) private placement notes
totaling $64.0 million, (2) foreign revolver borrowings totaling $9.1 million,
(3) notes payable relating to mortgages totaling $0.4 million, (4) U.S. revolver
borrowings totaling $3.0 million and (5) other long-term debt, including capital
leases, totaling $1.5 million. These five items include $23.1 million of senior
notes and mortgage notes, which are considered to be current liabilities. This
leaves net long-term debt totaling $54.9 million at April 1, 2000. The private
placement notes carry interest rates of 6.31% and 6.16%. The Company has a $55.0
million revolver in the U.S., of which $52.0 million was available at April 1,
2000. The bank revolver loan notes carry an interest rate of prime or LIBOR plus
0.375%, which currently is approximately 6.6%. The Company also has a $8.0
million letter of credit facility, of which approximately $1.6 million was being
used at April 1, 2000
Business Segment Information
The Company designs, manufactures and sells circuit protection devices
throughout the world. The Company has three reportable geographic segments: The
Americas, Europe and Asia-Pacific. The circuit protection market in these
geographical segments is categorized into three major product areas: electronic,
automotive and power fuses.
The Company evaluates the performance of each geographic segment based on its
net income or loss. The Company also accounts for intersegment sales as if the
sales were to third parties.
The Company's reportable segments are the business units where the revenue is
earned and expenses are incurred. The Company has subsidiaries in The Americas,
Europe, and Asia-Pacific where each region is measured based on its sales and
operating income or loss.
Information concerning the operations in these geographic segments for the
period ended April 1, 2000 and April 3, 1999, is as follows (in thousands):
<TABLE>
Revenues 2000 Q1 1999 Q1
<S> <C> <C>
The Americas 56,452 39,047
Europe 17,522 13,836
Asia-Pacific 21,345 16,088
------ --------
Combined Total 95,319 68,971
Corporate - -
Reconciliation - -
Consolidated Total 95,319 68,971
Intersegment Revenues 2000 Q1 1999 Q1
The Americas 9,689 8,085
Europe 3,631 2,656
Asia-Pacific 1,439 773
------- -------
Combined Total 14,759 11,514
Corporate - -
Reconciliation (14,759) (11,514)
-------- --------
Consolidated Total - -
Interest Expense 2000 Q1 1999 Q1
The Americas 1,123 1,281
Europe 37 -
Asia-Pacific 65 61
-------- --------
Combined Total 1,225 1,342
Corporate - -
Reconciliation - -
Consolidated Total 1,225 1,342
======== ========
Depreciation and Amortization 2000 Q1 1999 Q1
The Americas 2,900 2,527
Europe 702 330
Asia-Pacific 988 899
-------- --------
Combined Total 4,590 3,756
Corporate 2,097 2,254
-------- --------
Reconciliation - -
Consolidated Total 6,687 6,010
======== ========
Other income (loss) 2000 Q1 1999 Q1
The Americas (2) 291
Europe 137 111
Asia-Pacific 99 (20)
-------- --------
Combined Total 234 382
Corporate - -
Reconciliation - -
Consolidated Total 234 382
======== ========
Income Tax Expense 2000 Q1 1999 Q1
The Americas 3,714 891
Europe 1,383 1,319
Asia-Pacific 900 869
-------- --------
Combined Total 5,997 3,079
Corporate - -
Reconciliation - -
Consolidated Total 5,997 3,079
======== ========
Net Income 2000 Q1 1999 Q1
The Americas 7,114 3,960
Europe 3,128 2,362
Asia-Pacific 2,087 955
-------- --------
Combined Total 12,329 7,277
Corporate (2,116) (2,254)
Reconciliation - -
Consolidated Total 10,213 5,023
======== ========
2000 Q1 1999 Q1
Revenues Revenues
Electronic 57,077 33,198
Automotive 27,692 26,287
Power Fuse 10,550 9,486
-------- --------
Consolidated Total 95,319 68,971
======== ========
</TABLE>
Revenues from no single customer of the Company amount to 10% or more for the
quarter ended April 1, 2000.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995.
The preceding commentary presents management's discussion and analysis of the
Company's financial condition and results of operations for the periods
presented. Certain of the statements included above, including those regarding
future financial performance or results or those that are not historical facts,
are or contain "forward-looking" information as that term is defined in the
Securities Exchange Act of 1934, as amended. The words "expect," "believe,"
"anticipate," "project," "estimate," and similar expressions are intended to
identify forward-looking statements. The Company cautions readers that any such
statements are not guarantees of future performance or events and such
statements involve risks, uncertainties and assumptions, including, but not
limited to, product demand and market acceptance risks, the effect of economic
conditions, the impact of competitive products and pricing, product development
and patent protection, commercialization and technological difficulties,
capacity and supply constraints or difficulties, actual purchases under
agreements, the effect of the Company's accounting policies, and other factors
discussed above and in the Company's Annual Report on Form 10-K for the year
ended January 1, 2000. 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 report 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 January 1, 2000.
<PAGE>
PART II - OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibit Description
Exhibit No. 27 Financial Data Schedule
(b) There were no reports on Form 8-K during the quarter
ended April 1, 2000.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Quarterly Report on Form 10-Q for the quarter
ended April 1, 2000, to be signed on its behalf by the undersigned thereunto
duly authorized.
Littelfuse, Inc.
Date: May 8, 2000 By /s/ Philip G. Franklin
--------------------------------
Philip G. Franklin Vice
President, Treasurer, and
Chief Financial Officer (As
duly authorized officer and
as the principal financial
and accounting officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<CURRENCY> us dollar
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-30-2000
<PERIOD-START> Jan-02-2000
<PERIOD-END> Apr-01-2000
<EXCHANGE-RATE> 1
<CASH> 3,440
<SECURITIES> 0
<RECEIVABLES> 66,260
<ALLOWANCES> 0
<INVENTORY> 55,553
<CURRENT-ASSETS> 136,640
<PP&E> 90,394
<DEPRECIATION> 4,962
<TOTAL-ASSETS> 290,303
<CURRENT-LIABILITIES> 82,412
<BONDS> 0
0
0
<COMMON> 195
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 290,303
<SALES> 95,319
<TOTAL-REVENUES> 95,319
<CGS> 56,090
<TOTAL-COSTS> 56,090
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,225
<INCOME-PRETAX> 16,210
<INCOME-TAX> 5,997
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,213
<EPS-BASIC> 0.52
<EPS-DILUTED> 0.46
</TABLE>
