Littelfuse, Inc. (LFUS) Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 28, 2024

Press release·03/13/2025 21:35:19

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Littelfuse, Inc. filed its Annual Report on Form 10-K for the fiscal year ended December 28, 2024. The company reported total revenue of $1.43 billion, a 10% increase from the prior year. Net income was $243.8 million, a 14% increase from the prior year. The company’s gross margin was 44.1%, an increase from 42.5% in the prior year. Operating expenses increased by 12% to $444.8 million, driven by investments in research and development and sales and marketing initiatives. The company’s diluted earnings per share (EPS) was $4.95, a 15% increase from the prior year. As of March 7, 2025, the company had outstanding 24,713,072 shares of Common Stock, net of Treasury Shares.

Financial Performance Overview

Littelfuse, Inc. is a global manufacturer of electronic components, circuit protection devices, and other products used in a wide range of industries. In fiscal year 2024, the company reported net sales of $2.19 billion, a decrease of 7.3% compared to the prior year. This decline was primarily driven by lower sales volume in the Electronics segment, particularly in the semiconductor business.

Gross profit for the year was $787.5 million, or 35.9% of net sales, down from $900.2 million, or 38.1% of net sales, in the prior year. The decrease in gross profit was due to the lower sales volume as well as a one-time $13.5 million charge related to inventory valuation adjustments. Operating expenses increased to $628.8 million, or 28.7% of net sales, up from $539.4 million, or 22.8% of net sales, in the prior year. This was largely due to $93.5 million in non-cash impairment charges for goodwill and intangible assets.

As a result, operating income declined 56.0% to $158.8 million, with an operating margin of 7.2% compared to 15.3% in the prior year. Net income was $100.2 million, down 61.4% from $259.5 million in 2023. The effective tax rate increased to 34.0% from 21.0% in the prior year, primarily due to the impact of the goodwill and intangible asset impairments.

Segment Performance

The company reports results in three segments: Electronics, Transportation, and Industrial.

The Electronics segment saw a 12.1% decline in net sales to $1.19 billion, driven by lower volume in the semiconductor business. Operating income for the segment decreased 43.5% to $169.9 million, with the operating margin declining from 22.3% to 14.3%.

In the Transportation segment, net sales decreased 0.9% to $672.4 million, with lower volume in the automotive sensors and commercial vehicle businesses partially offset by growth in passenger car products. However, operating income increased 73.9% to $58.6 million, with the operating margin improving from 5.0% to 8.7%.

The Industrial segment reported a 0.7% decline in net sales to $331.6 million. Operating income decreased 22.8% to $42.3 million, with the operating margin declining from 16.4% to 12.8%. This was primarily due to lower volume and cost inflation.

Strengths and Weaknesses

A key strength of Littelfuse is its diversified business model, with exposure to a wide range of end markets including transportation, industrial, and electronics. This helps to mitigate risk and provide stability during periods of volatility in any one market.

The company also has a strong track record of innovation, investing heavily in research and development to develop new products and technologies. This has allowed Littelfuse to maintain a competitive edge and capitalize on emerging trends like electrification and automation.

However, the company faces some challenges, particularly in the Electronics segment where it experienced a significant decline in sales and profitability. The semiconductor business was impacted by inventory adjustments and weaker demand in certain consumer and industrial markets. Littelfuse will need to closely monitor market conditions and adjust its strategy accordingly.

The company also recorded substantial non-cash impairment charges related to goodwill and intangible assets, which weighed on overall financial performance. While these charges do not impact cash flow, they highlight the importance of disciplined acquisition integration and valuation.

Outlook and Strategy

Looking ahead, Littelfuse is focused on several key strategic priorities to drive growth and profitability:

Double-digit sales growth: The company aims to achieve 5-7% average annual organic sales growth, supplemented by 5-7% growth from strategic acquisitions. Key focus areas include increasing product content with existing customers, expanding into new high-growth markets and geographies, and driving innovation.
EPS growth: Littelfuse is targeting earnings per share growth that exceeds its revenue growth, through a combination of operational excellence, commercial initiatives, and disciplined cost management.
Capital allocation and returns: The company plans to deploy capital in a balanced approach, investing in organic growth opportunities, making strategic acquisitions, returning capital to shareholders through dividends and share repurchases, and maintaining a strong balance sheet. The goal is to generate free cash flow that approximates or exceeds net income.

To execute on this strategy, Littelfuse will leverage its technical expertise, global footprint, and customer relationships to capitalize on key market trends like sustainability, connectivity, and safety. The company is also focused on integrating recent acquisitions, optimizing its global operations, and streamlining administrative functions.

Overall, Littelfuse remains well-positioned as a diversified industrial technology leader. While it faces some near-term headwinds, particularly in the Electronics segment, the company’s long-term growth strategy and focus on innovation and operational excellence should enable it to deliver value for shareholders over time.