Company Overview - Littelfuse, Inc. is a global manufacturer of electronic components, modules, and relays serving various industries [1] - The company operates through three reportable segments: Electronics, Transportation, and Industrial [1] - Littelfuse has a market capitalization of approximately $6.2 billion and employs around 16,000 people [1] Analyst Background - The author has a master's degree in Analytics from Northwestern University and a bachelor's degree in Accounting [1] - The author has over 10 years of experience in the investment field, starting as an analyst and advancing to a management role [1] - Dividend investing is a personal interest of the author, who aims to share insights with the Seeking Alpha community [1]

Core Viewpoint - Investors are encouraged to consider Littelfuse (LFUS) due to solid improvements in earnings estimates and positive short-term price momentum [1][9]. Estimate Revisions - The rising trend in earnings estimate revisions reflects growing analyst optimism regarding Littelfuse's earnings prospects, which is expected to positively impact its stock price [2]. - The Zacks Rank system indicates strong agreement among analysts in revising earnings estimates upward, leading to significant improvements in consensus estimates for both the next quarter and the full year [3]. Current-Quarter Estimates - For the current quarter, Littelfuse is expected to earn $2.64 per share, representing a decrease of 2.6% from the previous year, but the Zacks Consensus Estimate has increased by 9.56% over the last 30 days with no negative revisions [6]. Current-Year Estimates - The expected earnings for the full year are $9.72 per share, reflecting a 14.6% increase from the prior year, with a positive trend in estimate revisions as one estimate has increased without any negative revisions [7]. Zacks Rank - Littelfuse currently holds a Zacks Rank 2 (Buy), indicating promising estimate revisions, and stocks with Zacks Rank 1 (Strong Buy) and 2 (Buy) have historically outperformed the S&P 500 [8]. Stock Performance - The stock has gained 9.2% over the past four weeks, driven by solid estimate revisions, suggesting potential for further earnings growth and price appreciation [9].

Financial Data and Key Metrics Changes - The company reported revenue of $613 million for the second quarter, reflecting a 10% increase compared to the prior year and a 6% organic growth [18] - Adjusted EBITDA margin improved to 21.4%, up 280 basis points year-over-year [18] - Adjusted diluted earnings per share (EPS) was $2.85, up 45% and exceeded the high end of prior guidance [19] Business Line Data and Key Metrics Changes - **Electronics Products Segment**: Sales increased by 10% year-over-year, with a 4% organic growth. Passive products saw a 14% organic growth, while semiconductor products declined by 5% [21] - **Transportation Products Segment**: Sales grew by 6%, with 4% organic growth. Passenger car sales increased by 3% organically across North America, Europe, and China [22] - **Industrial Products Segment**: Sales grew by 17% organically, driven by strong performance in grid storage, renewable energy, data centers, and HVAC [23] Market Data and Key Metrics Changes - The company experienced a strong backlog and bookings, with a book-to-bill ratio tracking above one [9] - The company expects continued growth momentum into the third quarter, with projected sales between $610 million and $630 million [26] Company Strategy and Development Direction - The company is focusing on enhancing its capabilities in higher voltage and higher energy density applications to meet customer demands [10] - There is a strategic priority to provide more complete solutions for a broader set of customers, leveraging the company's unique product portfolio [12] - The company is also working on operational excellence to enhance long-term profitability [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capitalize on growth opportunities and maintain strong execution [16] - The management noted improved visibility in end markets compared to three to six months ago, indicating a more stable demand environment [93] Other Important Information - The company generated $82 million in operating cash flow and $73 million in free cash flow during the quarter, with a strong cash position of $685 million [20] - The company plans to prioritize cash flow for organic investments and strategic acquisitions while returning capital to shareholders through dividends and share buybacks [21] Q&A Session Summary Question: Margin upside in Transportation and Industrial segments - Management discussed the focus on operational excellence and diversifying the portfolio to improve margins in the Transportation segment [33][34] Question: Clarification on tariff timing impacts - Management clarified that the timing of price realization versus incurred costs resulted in a $0.15 benefit in Q2 that would reverse in Q3 [40] Question: Performance in the Industrial segment - Management expressed excitement about the Industrial segment's growth, particularly in energy storage and data centers [42][43] Question: Data center exposure and growth - Management indicated that data center solutions are becoming increasingly important and are expected to grow significantly [50][51] Question: Visibility and demand trends - Management noted improved visibility and stability in end markets compared to previous months, expecting growth across all segments [93][94]

Financial Data and Key Metrics Changes - Revenue for the second quarter was $613 million, reflecting a 10% increase year-over-year and a 6% organic growth, with the Dortmund acquisition contributing 2% to sales growth and foreign exchange providing a 1% tailwind [19][20] - Adjusted EBITDA margin improved to 21.4%, up 280 basis points, driven by strong sales growth and operational performance [19][20] - Adjusted diluted earnings per share (EPS) was $2.85, up 45% compared to the previous year, exceeding the high end of prior guidance [20] Business Line Data and Key Metrics Changes - **Electronics Products Segment**: Sales increased by 10% year-over-year and 4% organically, with passive products up 14% organically, while semiconductor products declined by 5% [22][23] - **Transportation Products Segment**: Sales grew by 6%, with organic sales up 4%. Passenger car sales increased by 3% organically across North America, Europe, and China [24] - **Industrial Products Segment**: Sales grew by 17% organically, benefiting from strong growth in grid storage, renewable energy, data centers, industrial safety, and HVAC [25][26] Market Data and Key Metrics Changes - The company reported a book-to-bill ratio above one, with bookings at the highest run rate since 2022, indicating strong demand across all segments [7][8] - The company is experiencing increased demand for higher power and higher energy density applications across its end markets, which is driving growth [9][10] Company Strategy and Development Direction - The company is focusing on enhancing its capabilities to capitalize on future growth opportunities, particularly in higher voltage and higher energy density applications [9][10] - There is a strategic priority to provide more complete solutions for a broader set of customers, leveraging the company's unique product portfolio [11][12] - The company is also working on driving operational excellence to enhance long-term profitability and optimize its operating structure [14][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue strong growth into the third quarter, supported by a solid backlog and improved operational execution [17][20] - The management team highlighted the importance of aligning technology capabilities and sales structures to better serve customers and drive ongoing product innovations [11][12] Other Important Information - The company generated $73 million in free cash flow during the quarter, with a strong cash position of $685 million and a net debt to EBITDA leverage of 1.1 times [21] - The company plans to prioritize cash flow for organic investments and strategic acquisitions while continuing to return capital to shareholders through dividends and share buybacks [21][22] Q&A Session Summary Question: Margin upside in Transportation and Industrial segments - Management discussed the focus on operational excellence and diversifying the portfolio to improve margins in the Transportation segment, with expectations for continued margin upside [31][34][36] Question: Clarification on tariff timing impacts - Management clarified that the timing of price realization versus incurred costs resulted in a $0.15 benefit in Q2 that would reverse in Q3 [40][42] Question: Insights on the Industrial segment's performance - Management expressed excitement about the Industrial segment's growth, emphasizing the focus on energy storage and data center markets [44][46] Question: Data center exposure and growth - Management confirmed that data center solutions are becoming increasingly important, with strong traction in design wins and a growing pipeline [48][50][54] Question: Visibility on demand and market conditions - Management noted improved visibility in end markets compared to previous months, with expectations for continued growth across all segments [99][100][102]

Q2 2025 Earnings Release July 30, 2025 DISCLAIMERS Important Information About Littelfuse, Inc. This presentation does not constitute or form part of, and should not be construed as, an offer or solicitation to purchase or sell securities of Littelfuse, Inc. and no investment decision should be made based upon the information provided herein. Littelfuse strongly urges you to review its filings with the Securities and Exchange Commission, which can be found at investor.littelfuse.com. This website also provi ...

[Performance Overview and Outlook](index=1&type=section&id=Performance%20Overview%20and%20Outlook) Littelfuse exceeded Q2 2025 expectations with strong sales and EPS growth, provided positive Q3 guidance, and increased its quarterly dividend Q2 2025 Key Financial Highlights | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Net Sales | $613 million | +9.8% | | Organic Growth | N/A | +6.2% | | GAAP Diluted EPS | $2.30 | +26% | | Adjusted Diluted EPS | $2.85 | +45% | | GAAP Operating Margin | 15.1% | +340 bps | | Adjusted EBITDA Margin | 21.4% | +280 bps | | YTD Operating Cash Flow | $148 million | N/A | | YTD Free Cash Flow | $115 million | N/A | - Management emphasized **solid growth** and **operational execution**, focusing on capitalizing on opportunities and driving excellence[2](index=2&type=chunk) Q3 2025 Financial Guidance | Guidance Metric | Q3 2025 Range | | :--- | :--- | | Net Sales | $610 - $630 million | | Adjusted Diluted EPS | $2.65 - $2.85 | | Adjusted Effective Tax Rate | 25% | - The Board approved a **7% increase** in the quarterly cash dividend to **$0.75 per share**[3](index=3&type=chunk)[5](index=5&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) Consolidated financial statements reflect a healthy position with asset growth, increased net income, and strong operating cash flow [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to **$4.07 billion** by June 28, 2025, driven by goodwill and property, while cash and debt remained stable Condensed Consolidated Balance Sheets | Balance Sheet Item | June 28, 2025 (in thousands) | December 28, 2024 (in thousands) | | :--- | :--- | :--- | | **Total Current Assets** | **$1,542,050** | **$1,552,009** | | Cash and cash equivalents | $685,184 | $724,924 | | **Total Assets** | **$4,065,881** | **$3,891,779** | | **Total Current Liabilities** | **$379,742** | **$433,905** | | Long-term debt, less current portion | $792,524 | $788,502 | | **Total Equity** | **$2,598,965** | **$2,413,612** | [Condensed Consolidated Statements of Net Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Net%20Income) Q2 2025 net sales grew **9.8%** to **$613.4 million**, driving a **41.6%** increase in operating income and higher net income Condensed Consolidated Statements of Net Income | Income Statement | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YTD 2025 (in thousands) | YTD 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net sales | $613,413 | $558,489 | $1,167,720 | $1,093,874 | | Gross profit | $232,054 | $207,004 | $439,310 | $394,812 | | Operating income | $92,778 | $65,506 | $162,928 | $120,458 | | Net income | $57,342 | $45,466 | $100,913 | $93,918 | | Diluted EPS | $2.30 | $1.82 | $4.05 | $3.75 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased to **$148.2 million** year-to-date, while investing and financing activities used significant cash Condensed Consolidated Statements of Cash Flows | Cash Flow | YTD 2025 (in thousands) | YTD 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $148,225 | $126,574 | | Net cash used in investing activities | ($89,704) | ($26,677) | | Net cash used in financing activities | ($120,543) | ($79,290) | | (Decrease) increase in cash | ($39,554) | $6,173 | [Segment Performance](index=8&type=section&id=Segment%20Performance) All segments demonstrated strong Q2 2025 growth, with Industrial leading sales and significant operating income gains across segments Q2 2025 Net Sales by Segment | Q2 2025 Net Sales | Amount (in thousands) | YoY Growth | | :--- | :--- | :--- | | Electronics | $335,666 | 9.8% | | Transportation | $179,400 | 6.2% | | Industrial | $98,347 | 17.2% | | **Total net sales** | **$613,413** | **9.8%** | Q2 2025 Operating Income by Segment | Q2 2025 Operating Income | Amount (in thousands) | YoY Growth | | :--- | :--- | :--- | | Electronics | $49,861 | 8.0% | | Transportation | $28,074 | 84.3% | | Industrial | $18,863 | 97.6% | | **Total operating income** | **$92,778** | **41.6%** | Segment Operating Margins | Operating Margin | Q2 2025 (%) | Q2 2024 (%) | | :--- | :--- | :--- | | Electronics | 14.9% | 15.1% | | Transportation | 15.6% | 9.0% | | Industrial | 19.2% | 11.4% | [Supplemental Financial Information (Non-GAAP)](index=9&type=section&id=Supplemental%20Financial%20Information%20%28Non-GAAP%29) This section reconciles GAAP to non-GAAP measures, detailing adjusted EPS, EBITDA margins, organic sales growth, and debt leverage [Non-GAAP EPS and EBITDA Reconciliations](index=9&type=section&id=Non-GAAP%20EPS%20and%20EBITDA%20Reconciliations) Q2 2025 GAAP diluted EPS of **$2.30** was adjusted to **$2.85**, with GAAP operating income adjusted to a **21.4%** EBITDA margin Non-GAAP Diluted EPS Reconciliation | EPS Reconciliation | Q2 2025 ($) | Q2 2024 ($) | | :--- | :--- | :--- | | GAAP diluted EPS | $2.30 | $1.82 | | EPS impact of Non-GAAP adjustments | $0.55 | $0.15 | | **Adjusted diluted EPS** | **$2.85** | **$1.97** | Non-GAAP Margin Reconciliations | Margin Reconciliation | Q2 2025 (%) | Q2 2024 (%) | | :--- | :--- | :--- | | GAAP Operating Margin | 15.1% | 11.7% | | Adjusted Operating Margin | 15.8% | 12.7% | | Adjusted EBITDA Margin | 21.4% | 18.6% | [Segment-Level and Other Reconciliations](index=10&type=section&id=Segment-Level%20and%20Other%20Reconciliations) Q2 2025 adjusted EBITDA margins were strong across segments, with total organic sales growth of **6%** and increased free cash flow Q2 2025 Organic Net Sales Growth by Segment | Q2 2025 Organic Net Sales Growth | Electronics (%) | Transportation (%) | Industrial (%) | Total (%) | | :--- | :--- | :--- | :--- | :--- | | Net sales growth | 10% | 6% | 17% | 10% | | Less: Acquisitions & FX | 5% | 2% | 0% | 4% | | **Organic net sales growth** | **4%** | **4%** | **17%** | **6%** | Free Cash Flow Reconciliation | Free Cash Flow Reconciliation | YTD 2025 (in millions) | YTD 2024 (in millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $148.2 | $126.6 | | Less: Purchases of property, plant and equipment | ($33.0) | ($34.7) | | **Free cash flow** | **$115.2** | **$91.9** | [Debt and Leverage Analysis](index=11&type=section&id=Debt%20and%20Leverage%20Analysis) As of June 28, 2025, net debt was **$547.6 million**, resulting in a **1.1x** Consolidated Net Leverage Ratio, well below covenant Net Debt Calculation | Net Debt Calculation | As of June 28, 2025 (in millions) | | :--- | :--- | | Consolidated Total Debt | $810.2 | | Plus: Unamortized debt issuance costs & Finance lease liability | $2.5 | | Less: Cash held in U.S. | ($265.1) | | **Net debt** | **$547.6** | - The Consolidated Net Leverage Ratio for the twelve months ended June 28, 2025 was **1.1x**[30](index=30&type=chunk) [Disclosures](index=3&type=section&id=Disclosures) This section provides standard disclosures on forward-looking statements and the rationale for using non-GAAP financial measures - The "Safe Harbor" statement cautions that forward-looking statements are subject to **risks and uncertainties** that could cause actual results to differ materially[9](index=9&type=chunk) - Non-GAAP financial measures are used to enhance understanding of **core financial performance** and facilitate historical comparisons, with reconciliations provided[12](index=12&type=chunk)

Company Overview - Littelfuse is a diversified, industrial technology company with $2.4 billion in revenue for FY 2023[7] - The company has demonstrated a 15-year double-digit compound annual growth rate (CAGR) in sales of 10% and earnings per share (EPS) of 18%[8] - Littelfuse sells over 17 billion components annually to over 100,000 customers[28] Financial Performance & Strategy - The company targets double-digit revenue CAGR through a combination of 5-7% organic growth and 5-7% growth from acquisitions[13,32] - Littelfuse achieved a free cash flow conversion of net income of 143% in FY 2023[42] - The company's adjusted EBITDA margin was 22.3% in FY 2023[40] Segment Performance (FY 2023) - The Electronics segment generated $1.35 billion in revenue with an adjusted EBITDA margin of 28.1%[43] - The Transportation segment generated $678 million in revenue with an adjusted EBITDA margin of 11.2%[46] - The Industrial segment generated $334 million in revenue with an adjusted EBITDA margin of 21.1%[49] Capital Allocation - The company plans to return 40% of free cash flow to shareholders and allocate the remainder to acquisitions[13] - Littelfuse deployed over $1.2 billion in capital on strategic acquisitions[30]

Financial Data and Key Metrics Changes - Revenue for the first quarter was $554 million, up 4% year-over-year and up 3% organically, exceeding guidance [18] - GAAP operating margins were 12.7%, while adjusted operating margins were 14.2%, reflecting a 320 basis point increase from the prior year [19] - GAAP diluted earnings were $1.75, and adjusted diluted earnings were $2.19, up 24% year-over-year [19] - Operating cash flow was $66 million, with free cash flow of $43 million, resulting in a free cash conversion of 98% [20] Business Line Data and Key Metrics Changes - **Electronics Products Segment**: Sales increased by 6% year-over-year and 3% organically, with passive products up 13% organically, while semiconductor products declined by 5% [21][22] - **Transportation Products Segment**: Organic sales declined by 4%, with passenger car sales down 6% due to global cargo declines, but growth was noted in China [23][24] - **Industrial Products Segment**: Sales grew by 16% organically, driven by strong growth in Renewables, Data Center, and HVAC [25] Market Data and Key Metrics Changes - Book-to-bill ratio improved across all businesses, tracking above one, indicating strong demand and customer position [14] - The company entered the second quarter with a strong backlog, reflecting positive market conditions despite uncertainties [14][26] Company Strategy and Development Direction - The company aims to enhance focus on future growth opportunities and develop a structured approach to evaluate secular opportunities across evolving end markets [32][33] - Strategic acquisitions will remain a key pillar of growth strategy, aligning growth goals with long-term technology positioning [33] - The company is committed to providing complete solutions for a broader set of customers, leveraging diverse capabilities [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating through current economic uncertainties, emphasizing a flexible operating model and strong customer relationships [14][15] - There is a focus on monitoring potential demand risks in the second half of the year, particularly in the automotive and personal electronics sectors [74] - Management remains optimistic about long-term growth drivers, particularly in electrification and higher voltage applications [88] Other Important Information - The company returned $45 million to shareholders in the first quarter, with $17 million via dividends and $27 million through share repurchases [21] - A recent CFO transition was announced, with the outgoing CFO recognized for significant contributions to the company's growth [15][30] Q&A Session Summary Question: Can you elaborate on the tariff impacts and guidance assumptions? - Management highlighted a flexible operating model and local manufacturing strategies to mitigate tariff impacts, expecting minimal effect on earnings in the second quarter [39][41] Question: What are the expectations for the power semiconductor business? - Management noted that while there are pockets of strength, the overall market remains static, with opportunities for growth in high energy transfer applications [57][61] Question: How is the acquisition pipeline looking? - The company maintains a strong balance sheet and continues to evaluate acquisition opportunities as part of its growth strategy [63] Question: What is the outlook for transportation margins? - Management expressed confidence in continued margin expansion through operational excellence and leveraging best practices across the company [67] Question: How are customers responding to the current environment? - Customers are focused on short-term management of tariffs, but long-term strategic investments remain unchanged, with ongoing collaboration on R&D priorities [88]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $554 million, up 4% year-over-year and up 3% organically, exceeding guidance [17] - GAAP operating margins were 12.7%, while adjusted operating margins were 14.2%, reflecting a 320 basis point increase from the prior year [18] - Adjusted diluted earnings were $2.19, up 24% year-over-year, exceeding guidance [18] - Operating cash flow was $66 million, with free cash flow of $43 million, resulting in a free cash conversion of 98% [20] Business Line Data and Key Metrics Changes - **Electronics Products Segment**: Sales increased by 6% year-over-year and 3% organically, with passive products up 13% organically, while semiconductor products declined by 5% [21][22] - **Transportation Products Segment**: Organic sales declined by 4%, with passenger car sales down 6% due to global cargo declines, though growth was noted in China [23][24] - **Industrial Products Segment**: Sales grew 16% organically, driven by strong growth in Renewables, Data Center, and HVAC sectors [25] Market Data and Key Metrics Changes - Book-to-bill ratio improved across all businesses, tracking above one, indicating strong demand and customer positioning [14] - The company entered Q2 2025 with a strong backlog, reflecting positive momentum despite market uncertainties [14][26] Company Strategy and Development Direction - The company aims to enhance focus on future growth opportunities and develop a structured approach to evaluate secular opportunities across evolving end markets [33] - Strategic acquisitions will remain a key pillar of growth, with a focus on providing complete solutions for a broader customer base [34] - Operational excellence will be prioritized to enhance long-term profitability, leveraging best practices across the organization [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating through economic uncertainties, emphasizing a flexible operating model and strong cash generation capabilities [12][20] - There is a focus on monitoring potential demand risks in the second half of 2025, particularly in automotive and personal electronics sectors [76] - The company does not expect tariffs to have a material impact on Q2 earnings due to proactive measures taken [42][43] Other Important Information - The company returned $45 million to shareholders in Q1 2025, with $17 million via dividends and $27 million through share repurchases [21] - A recent CFO transition was announced, with the outgoing CFO recognized for significant contributions to the company's growth [15][31] Q&A Session Summary Question: Can you elaborate on the tariff impacts and guidance assumptions for Q2? - Management highlighted a flexible operating model and local manufacturing strategies to mitigate tariff impacts, expecting minimal effects on earnings [40][42] Question: What drove the sequential margin improvement in the Electronics segment? - The improvement was attributed to strong operating leverage from growth in passive electronics and effective cost management [48] Question: What is the company's exposure to data center opportunities, especially related to AI? - The company has a strong position in data centers, participating in trends towards higher voltage architectures, which presents significant content opportunities [52][53] Question: How is the acquisition pipeline looking in the current environment? - The company maintains a strong balance sheet and continues to evaluate acquisition opportunities as part of its growth strategy [64] Question: What are the expectations for transportation margins moving forward? - Management is focused on continued margin expansion through pricing strategies and operational excellence initiatives [68]

Financial Performance - Revenue increased by 4% to $554 million in Q1 2025 compared to $535 million in Q1 2024[20] - Organic revenue growth was 3% year-over-year[21] - Adjusted EPS was $2.19 in Q1 2025, compared to $1.76 in Q1 2024[20] - Adjusted EBITDA margin was 20.1% in Q1 2025, compared to 17.1% in Q1 2024[20] - Free cash flow was $43 million in Q1 2025, a 3% increase compared to Q1 2024, with a free cash flow conversion of 98%[21] Segment Performance - Electronics segment revenue increased by 6% to $307 million in Q1 2025 compared to $291 million in Q1 2024, with organic growth of 3%[27,29] - Passive products in the Electronics segment increased by 12% year-over-year, with 13% organic growth[29] - Transportation segment revenue decreased by 5% to $162 million in Q1 2025 compared to $170 million in Q1 2024, with organic decline of 4%[31,32] - Industrial segment revenue increased by 15% to $85 million in Q1 2025 compared to $74 million in Q1 2024, with organic growth of 16%[34,35] Q2 2025 Guidance - The company expects revenue between $565 million and $595 million[42] - The company expects adjusted EPS between $2.10 and $2.40[41,42]