Littelfuse (LFUS) Q4 2001 earnings summary

Executive summary

• 2001 net sales fell 27% YoY to $272.1M; net income declined to $4.1M and diluted EPS to $0.19 amid the sharp electronics downturn and broader weakness across markets.

• Cost actions, working-capital reductions and strategic manufacturing shifts generated $26.2M of free cash and strengthened the position for a potential recovery.

Financial highlights

• 2001 gross profit was $91.9M, down 39% YoY; operating income was $8.5M, down 86%, and net income was $4.1M, down 89%.

• 2001 included $6.3M of restructuring charges, or $0.18 per diluted share, for plant closures and workforce reductions.

• Q4 2001 net sales were $60.9M; operating loss was $4.1M, net loss was $2.8M, and diluted loss per share was $0.13.

• Operating cash flow was $40.3M; net capital expenditures were $14.1M; cash at year-end was $34.5M.

Outlook and guidance

• 2002 sales expected to start slowly, with electronics and electrical weakness continuing through at least H1; improvement expected in H2 on stronger electronics demand and lower distributor inventories.

• New product introductions and increased penetration of recently launched products expected to support sales; continued cost reductions and manufacturing restructuring planned amid price pressure and low profitability.

• 2002 capital expenditures expected to be similar to 2001 levels, primarily for new-product tooling and production equipment, funded from operating cash flow.

• SFAS 142 adoption expected to increase 2002 net income by $2.4M, or $0.11 per diluted share, from cessation of goodwill amortization; impairment testing impact remained undetermined.