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
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 million, a 15% 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 million, driven by investments in research and development and sales and marketing initiatives. The company’s diluted earnings per share (EPS) was $1.23, a 14% 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. The company’s aggregate market value of voting stock held by non-affiliates was approximately $6.34 billion as of June 29, 2024.
Financial Performance Overview
Littelfuse, Inc. is a global manufacturer of electronic components, circuit protection devices, and power control solutions. 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 volume in the Electronics segment, particularly in the semiconductor business.
Gross profit 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 volume in Electronics and Industrial segments, partially offset by improved margins in the Transportation segment.
Operating income was $158.8 million, a 56.0% decrease from the prior year. This was impacted by $93.5 million in non-cash impairment charges, including $47.8 million for intangible assets and $44.7 million for goodwill. Excluding these charges, operating income would have been $252.3 million.
Net income was $100.2 million, down 61.4% from the prior year, primarily due to the lower operating income and a higher effective tax rate of 34.0% compared to 21.0% in the prior year.
Segment Performance
The company reports results in three segments: Electronics, Transportation, and Industrial.
Electronics Segment
- Net sales decreased 12.1% to $1.19 billion, mainly due to lower volume in the semiconductor business.
- Operating income decreased 43.5% to $169.9 million, driven by the lower volume and unfavorable product mix, partially offset by cost control initiatives.
- Operating margin declined from 22.3% to 14.3%.
Transportation Segment
- Net sales decreased 0.9% to $672.4 million, with lower volume in automotive sensors and commercial vehicles partially offset by growth in passenger cars.
- Operating income increased 73.9% to $58.6 million, driven by favorable pricing and cost reductions in the commercial vehicle business.
- Operating margin improved from 5.0% to 8.7%.
Industrial Segment
- Net sales decreased 0.7% to $331.6 million due to lower volume in industrial control products.
- Operating income decreased 22.8% to $42.3 million, impacted by the lower volume and cost inflation.
- Operating margin declined from 16.4% to 12.8%.
Liquidity and Capital Resources
Littelfuse ended the year with $724.9 million in cash and cash equivalents, up from $557.1 million the prior year. The company generated $367.6 million in operating cash flow, a decrease of $89.8 million from 2023.
The company has a $900 million revolving credit facility and a $300 million term loan, with $100 million and $281.3 million outstanding, respectively, as of the end of 2024. It also has $495 million in senior notes outstanding. The company was in compliance with all debt covenants.
In 2024, the company paid $7.5 million on the term loan and $67.1 million in dividends. It also repurchased $40.9 million of its common stock.
Strengths and Weaknesses
Strengths:
- Diversified product portfolio across electronics, transportation, and industrial end markets
- Strong market positions and customer relationships
- Ongoing focus on innovation and new product development
- Solid free cash flow generation and disciplined capital allocation
Weaknesses:
- Exposure to cyclical end markets, particularly electronics and automotive
- Vulnerability to supply chain disruptions and cost inflation
- Goodwill and intangible asset impairments impacting profitability
- Relatively high effective tax rate compared to prior years
Outlook and Strategy
Littelfuse’s five-year strategic plan is focused on delivering top-tier shareholder returns through double-digit sales growth, best-in-class profitability, and disciplined capital allocation. Key elements of the strategy include:
- Increasing product content with existing and new customers to drive organic growth
- Expanding presence in high-growth geographies and end markets
- Enhancing innovation capabilities and investments
- Leveraging a broad go-to-market strategy
- Pursuing strategic acquisitions that align with the company’s growth objectives
The company sees significant opportunities to enable electrification and electronification trends across its transportation, industrial, and electronics end markets. It is positioning itself as a key supplier for sustainability, connectivity, and safety applications.
Management is also focused on improving operating margins through operational and commercial excellence, as well as disciplined cost management. The company targets returning 40% of free cash flow to shareholders through dividends and opportunistic share repurchases, with the remainder deployed for strategic acquisitions.
Overall, Littelfuse appears well-positioned for long-term growth, but faces near-term headwinds from cyclical end markets and the need to address recent impairment charges. Successful execution of its strategic initiatives and continued financial discipline will be critical to driving shareholder value going forward.
