• Revenue: $530 million for Q4 2024, down 1% year-over-year, flat organically.
• GAAP Operating Margin: Negative 6.9% due to $93 million in noncash goodwill and intangible impairment charges.
• Adjusted Operating Margin: 12% for Q4 2024.
• Adjusted EBITDA Margin: 18.1% for Q4 2024.
• GAAP Diluted Loss Per Share: $1.57 for Q4 2024.
• Adjusted Diluted Earnings Per Share: $2.04 for Q4 2024.
• Free Cash Flow: $135 million for Q4 2024; $292 million for full year 2024.
• Cash on Hand: $725 million at the end of Q4 2024.
• Net Debt-to-EBITDA Leverage: 1.2 times at the end of Q4 2024.
• Full Year Revenue: $2.2 billion, down 7% year-over-year.
• Full Year GAAP Operating Margin: 7.8%.
• Full Year Adjusted Operating Margin: 12.9%.
• Full Year Adjusted EBITDA Margin: 18.9%.
• Full Year GAAP Diluted EPS: $4.51.
• Full Year Adjusted Diluted EPS: $8.48.
• Operating Cash Flow: $368 million for full year 2024.
• Capital Returned to Shareholders: $108 million for full year 2024.

• Warning! GuruFocus has detected 4 Warning Sign with LFUS.

Release Date: January 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Littelfuse Inc (NASDAQ:LFUS) reported strong free cash flow conversion in 2024, with operating cash flow of $368 million and free cash flow of $292 million.
• The company observed improved order rates in the Electronics segment, with the book-to-bill ratio at its highest level since Q2 2022.
• Littelfuse Inc (NASDAQ:LFUS) secured significant design wins across various sectors, including data centers, medical applications, and transportation, indicating strong market positioning.
• The company achieved meaningful profitability enhancements across its businesses, driving solid margin expansion in the second half of 2024.
• Littelfuse Inc (NASDAQ:LFUS) maintained a strong balance sheet with $725 million in cash and a net debt-to-EBITDA leverage of 1.2 times, providing flexibility for future growth initiatives.

Negative Points

• Littelfuse Inc (NASDAQ:LFUS) experienced a 1% decline in revenue for the fourth quarter compared to the previous year, with a 7% decline for the full year 2024.
• The company faced a negative GAAP operating margin of 6.9% in Q4 due to $93 million in non-cash goodwill and intangible impairment charges.
• Sales in the Electronics segment were down 4% organically for the quarter, with semiconductor products declining 13%.
• The transportation products segment saw a 1% organic sales decline for both the quarter and the year, impacted by global car build declines.
• Littelfuse Inc (NASDAQ:LFUS) continues to face challenges in the power semiconductor sector, with book-to-bill ratios remaining below one, particularly in Europe and China.

Q & A Highlights

Q: Can you provide more details on the book-to-bill ratio for the Passive segment this quarter and any insights from distributors regarding restocking? A: David Heinzmann, President and CEO, explained that the inventory correction is largely behind them, with the book-to-bill ratio for electronics now above one for the first time since early 2022. Passives and protection book-to-bills are firmly above one, while power semiconductors remain below one but have improved. Conversations with distributors indicate stable book-to-bills, with more positivity in North America and Asia, while Europe remains sluggish.

Q: What are the early signs of industrial recovery relative to power semiconductors, and is this recovery geographically weighted? A: Heinzmann noted stabilization in North America and Asia for power semiconductors, while Europe remains challenging. In the industrial segment, they saw strength in safety applications and HVAC, with a shift from residential to commercial focus, leading to design wins and growth.

Q: Can you explain the transportation margins' strength in Q3 and the outlook for 2025? A: Meenal Sethna, CFO, highlighted that transportation margins improved due to pricing, footprint work, and cost reductions. Despite headwinds like declining car builds and FX volatility, they expect continued margin expansion in 2025.

Q: How will potential tariffs impact your business, especially concerning China and EV discussions? A: Heinzmann stated that while tariffs are a concern, they have experience from past tariff situations. They align manufacturing closer to customers and work with them to mitigate impacts. If necessary, costs are passed to customers through pricing actions.

Q: How do you view the long-term dynamics in the electric vehicle space, especially with higher voltage drivetrains? A: Heinzmann expressed confidence in the long-term electrification trend, noting that higher voltages increase content opportunities for Littelfuse. They are well-positioned in China and see opportunities in commercial vehicle electrification, including hydraulic to electrical transitions.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.