Littelfuse Reports Third Quarter Results

Littelfuse, Inc. (NASDAQ:LFUS) today reported sales and earnings for the third quarter of 2011.

Third Quarter Highlights

• Sales were $174.0 million for the third quarter of 2011, a 6% increase compared to the third quarter of 2010 and a 1% sequential decline compared to the second quarter of 2011.
• On a GAAP basis, diluted earnings per share for the third quarter of 2011 increased to $1.12 from $1.04 in the third quarter of 2010 due primarily to a lower effective tax rate and favorable currency translation effects. The lower tax rate was primarily the result of more income earned in low-tax jurisdictions and several favorable adjustments.
• Adjusted (non-GAAP) earnings for the third quarter were $1.20 per share (see Supplemental Schedule on page 9). The adjustment to GAAP earnings was primarily to remove non-cash impairment charges related to legacy real estate holdings. Adjusted earnings were above guidance of $1.00 to $1.10 due primarily to the aforementioned tax rate and currency adjustments.
• Sales and order trends by business unit were as follows:
  • Automotive sales increased 39% year over year. Cole Hersee (acquired in December 2010) contributed $11.7 million for the quarter. Excluding Cole Hersee, automotive sales increased 5% year over year due to increased demand in Asia and Europe and the effects of a stronger euro.
  • Electrical sales increased 17% year over year due to continued organic growth in protection relays and custom mining products and the addition of Selco (acquired in August 2011), partially offset by weaker power fuse sales primarily for solar applications.
  • Electronics sales declined 7% year over year and 5% sequentially as channels reduced inventory in anticipation of weaker demand in the fourth quarter.
  • The electronics order rate dropped off sharply in the third quarter reflecting distributors’ desire to reduce inventories heading into an uncertain economic environment in the seasonally slower part of the year. The electronics book-to-bill ratio for the third quarter was 0.73, although this improved significantly in October.

• Cash provided by operating activities was $37.9 million for the third quarter of 2011 and stands at $84.0 million through nine months. Capital expenditures through nine months were $12.4 million.
• The company repurchased 859,029 shares of its common stock in the third quarter of 2011 at an average price of $43.18.
• On October 28, 2011 the Board of Directors increased the share repurchase authorization from 1 million to 1.5 million shares. This provides authority to purchase up to 640,971 additional shares between October 28, 2011 and the April 30, 2012 expiration date.

“We were very pleased with the performance of our automotive and electrical businesses in the third quarter,” said Gordon Hunter, Chief Executive Officer. “Both businesses continue to post strong sales and earnings, and their end markets seem to be holding up well. Electronics was also a significant contributor for the quarter, but orders continued the weakening trend that began in May, setting up a challenging fourth quarter for this business. The main issue seems to be distributor inventory de-stocking, since end demand generally remains solid.”

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