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Littelfuse Inc. Reports Operating Results (10-Q)

October 29, 2009 | About:
10qk

10qk

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Littelfuse Inc. (LFUS) filed Quarterly Report for the period ended 2009-09-26.

Littelfuse Inc. is a leading manufacturer and seller of fuses and other circuit protection devices for use in the electronic automotive and general industrial markets. In addition to its Des Plaines Illinois world headquarters Littelfuse has manufacturing facilities in England Ireland Switzerland Mexico Korea China and the Philippines as well as in Centralia and Arcola Illinois. It also has sales engineering and distribution facilities in the Netherlands Singapore Hong Kong Taiwan Japan Brazil and Livonia Michigan. Littelfuse Inc. has a market cap of $530.3 million; its shares were traded at around $24.4 with and P/S ratio of 1. Littelfuse Inc. had an annual average earning growth of 3.8% over the past 5 years.

Highlight of Business Operations:

Year over year sales in the electronics business unit decreased $24.7 million or 26% to $71.1 million in the third quarter of 2009 compared to $95.8 million in the third quarter of 2008, reflecting weaker demand in the Companys three operating regions as well as unfavorable currency impacts. Automotive sales decreased $2.0 million or 7% to $26.9 million in the third quarter of 2009 compared to $28.9 million in the third quarter of 2008 primarily due to weak demand in North America and Europe. Electrical sales increased $1.6 million or 10% to $18.4 million in the third quarter of 2009 compared to $16.8 million in the third quarter of 2008 due to the inclusion of $7.0 million of Startco, sales partially off-set by a decline in power fuse sales. Startco was acquired on September 30, 2008.

On a geographic basis, sales in the Americas decreased $8.6 million or 17% to $43.3 million in the third quarter of 2009 compared to $51.9 million in the third quarter of 2008, primarily due to weak demand across all three business units. Europe sales decreased $7.2 million or 25% to $21.8 million in the third quarter of 2009 compared to $29.0 million in the third quarter of 2008 mainly due to weak automotive and electronic sales and unfavorable currency effects. Asia-Pacific sales decreased $9.3 million or 15% to $51.3 million in the third quarter of 2009 compared to $60.6 million in the third quarter of 2008 primarily due to declines in electronic revenue and unfavorable currency effects.

Income before income taxes was $8.8 million for the third quarter of 2009 compared to income before income taxes of $4.9 million for the third quarter of 2008. Income tax expense was $0.8 million with an effective tax rate of 8.7% for the third quarter of 2009 compared to income tax expense of $0.9 million with an effective tax rate of 18.8% in the third quarter of 2008. The current quarter effective tax rate was lower primarily due to an approximately $2.0 million decrease in income tax reserves due to the lapsing of statutes of limitations on uncertain tax positions.

Sales in the electronics business unit decreased $92.4 million or 33% to $183.8 million in the first nine months of 2009 compared to $276.2 million in the first nine months of 2008, reflecting weak demand in the Companys three operating regions. Automotive sales decreased $35.5 million or 34% to $68.6 million in the first nine months of 2009 compared to $104.1 million in the first nine months of 2008 due to weak demand in the passenger vehicle market in North America and Europe and declines in the off-road truck and bus market globally. Electrical sales increased $5.1 million or 11% to $49.8 million in the first nine months of 2009 compared to $44.7 million in the first nine months of 2008 due to the inclusion of $16.6 million of Startco sales partially offset by weaker demand for power fuses.

On a geographic basis, sales in the Americas decreased $39.8 million or 25% to $116.9 million in the first nine months of 2009 compared to $156.7 million in the first nine months of 2008, primarily due to weak demand across all three business units partially offset by the inclusion of Startco revenues. Europe sales decreased $38.9 million or 40% to $59.2 million in the first nine months of 2009 compared to $98.1 million in the first nine months of 2008 mainly due to weak automotive and electronics sales and unfavorable currency effects. Asia-Pacific sales decreased $44.1 million or 26% to $126.1 million in the first nine months of 2009 compared to $170.2 million in the first nine months on 2008 primarily due to weak demand for electronics products and unfavorable currency effects.

The Company started 2009 with $70.9 million of cash and cash equivalents. Net cash provided by operating activities was approximately $0.7 million for the first nine months of 2009 reflecting a $2.3 million net loss and $29.9 million used to fund various working capital needs, partially offset by $32.9 million in non-cash adjustments (primarily $27.3 million in depreciation and amortization and $4.3 million in stock-based compensation). Working capital needs (including short-term and long-term items) that impacted cash flows in 2009 consisted of net decreases in accrued payroll and severance ($4.5 million), accounts payable and accrued expenses ($12.7 million), accrued taxes ($9.6 million), increases in accounts receivable ($16.0 million), prepaid expenses and other ($1.0 million), partially offset by a decrease in inventories ($13.8 million). During the third quarter of 2009, the Company contributed $6.4 million into its domestic defined contribution pension plan to reduce its pension liability.

Read the The complete ReportLFUS is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC.

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