Littelfuse, Inc. reports 40.7% revenue growth in FY2018 and 3.9 pp EBITDA Margin decline from 23.0% to 19.1%
01/30/2019 • About Littelfuse, Inc. (
$LFUS) • By InTwits
Littelfuse, Inc. reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Littelfuse, Inc. is a fast growth stock: FY2018 revenue growth was 40.7%, 5 year revenue CAGR was 17.8% at FY2018 ROIC 12.1%
- Littelfuse, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.6%. At the same time it's in pair with industry average of 7.6%
- CAPEX is quite volatile: $27m in FY2018, $24m in FY2017, $46m in FY2016, $105m in FY2015, $36m in FY2014
- The company has highly profitable business model: ROIC is 12.1%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.6x while industry average is -0.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 40.7%. Revenue growth showed slowdown in FY18Q4 - it was 32.0% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 3.9 pp from 23.0% to 19.1% in FY2018.
Gross Margin decreased on 3.5 pp from 41.5% to 38.0% in FY2018. During FY2014-FY2018 Gross Margin topped in FY2017 at 41.5%. SG&A as a % of Revenue decreased slightly on 0.66 pp from 17.4% to 16.8% in FY2018. During the last 5 years SG&A as a % of Revenue topped in FY2016 at 19.5% and was declining since that time. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in FY2018. SBC as a % of Revenue followed a growing trend at 0.21 pp per annum in FY2014-FY2018.
Net Income margin showed almost no change in FY2018. The efficient tax rate was 19.7% in FY2018 while the average for the last five years was 26.2%.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 4.3% in FY2018. The company showed small CAPEX/Revenue decline of 0.72 pp from 5.1% in FY2015 to 4.3% in FY2018. It's average CAPEX/Revenue for the last three years was 4.7%.
Accounts receivable as a % of Revenue decreased slightly on 1.4 pp from 15.0% to 13.6% in FY2018. Inventories as a % of Revenue increased on 3.5 pp from 11.5% to 15.0% in FY2018. Accounts payable as a % of Revenue decreased on 2.4 pp from 14.2% to 11.9% in FY2018.
Littelfuse, Inc. has spent
$318m on M&A in FY2018 which accounts for 18.5% of revenue.
Return on investment
The company operates at good ROIC (12.1%) and ROE (13.7%). ROIC decreased on 3.7 pp from 15.8% to 12.1% in FY2018. ROE showed almost no change in FY2018.
Leverage (Debt)
Debt level is 0.6x Net Debt / EBITDA and 2.1x Debt / EBITDA. Net Debt / EBITDA jumped on 0.4x from 0.2x to 0.6x in FY2018. Debt jumped on 40.2% while cash surged on 14.0%.
Littelfuse, Inc. has good short term financial stability: Interest coverage ratio (ICR) is 10.0x. Littelfuse, Inc. has no short term refinancing risk: cash is higher than short term debt (4,897.3%).
Average interest expence paid by the company was 3.2% in FY2018.
Valuation and dividends
Littelfuse, Inc.'s trades at EV/EBITDA 14.6x and P/E 28.0x.
The company paid 24.3% of Net Income as dividends in FY2018. Dividends grew on average at 13.8% per annum in the last 5 years).
Management team
The company's CEO David W Heinzmann "Dave" is a founder and has spent 2 years with the company. CEO total compensation was
$4,876,689 in FY2018 which included
$763,000 salary. Meenal A Sethna is a Littelfuse, Inc.'s CFO. Meenal A Sethna has spent 3 years at the company.
Insider ownership is 2.8%. Insider ownership didn't change in 2018.
At the end of financial year the company had 12,300 employees. The number of employees surged on 15.0%. Average revenue per employee in FY2018 was
$139,713 and it jumped on 22.4%.
Financial and operational results
FY ended 12/29/2018
Littelfuse, Inc. ($LFUS) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 852 | 868 | 1,056 | 1,222 | 1,718 | 40.7% |
| Gross Profit | 324 | 330 | 413 | 507 | 653 | 28.8% |
| SG&A | 147 | 154 | 206 | 213 | 288 | 35.3% |
| EBITDA | 176 | 146 | 184 | 282 | 328 | 16.6% |
| EBIT | 134 | 104 | 131 | 219 | 225 | 3.0% |
| Interest expence | 5 | 4 | 9 | 13 | 23 | 68.7% |
| Tax | 32 | 26 | 19 | 85 | 40 | -52.2% |
| Net Income | 99 | 81 | 104 | 120 | 165 | 37.7% |
| Stock Based Compensation | 6 | 8 | 9 | 16 | 27 | 68.1% |
Balance Sheet
|
|---|
| Cash | 298 | 329 | 275 | 430 | 490 | 14.0% |
| Accounts Receivable | 135 | 143 | 198 | 183 | 233 | 27.5% |
| Inventory | 97 | 99 | 114 | 141 | 258 | 83.4% |
| Accounts Payable | 51 | 52 | 91 | 102 | 126 | 24.0% |
| Short Term Debt | 89 | 87 | 6 | 6 | 10 | 60.0% |
| Long Term Debt | 107 | 84 | 448 | 489 | 685 | 39.9% |
Cash flow
|
|---|
| Capex | 32 | 44 | 46 | 66 | 75 | 13.4% |
| Dividends | 21 | 24 | 28 | 32 | 40 | 25.0% |
| Acquisitions | 56 | 5 | 471 | 39 | 318 | 726.9% |
Ratios
|
|---|
| Revenue growth | 12.4% | 1.9% | 21.7% | 15.7% | 40.7% | |
| EBITDA growth | 6.9% | -17.0% | 26.1% | 53.2% | 16.6% | |
|
|---|
| Gross Margin | 38.1% | 38.1% | 39.1% | 41.5% | 38.0% | -3.5% |
| EBITDA Margin | 20.6% | 16.8% | 17.4% | 23.0% | 19.1% | -3.9% |
| EBIT Margin | 15.7% | 12.0% | 12.4% | 17.9% | 13.1% | -4.8% |
| SG&A, % of revenue | 17.3% | 17.7% | 19.5% | 17.4% | 16.8% | -0.7% |
| SBC, % of revenue | 0.7% | 1.0% | 0.8% | 1.3% | 1.6% | 0.3% |
| Net Income Margin | 11.7% | 9.3% | 9.9% | 9.8% | 9.6% | -0.2% |
| CAPEX, % of revenue | 3.8% | 5.1% | 4.4% | 5.4% | 4.3% | -1.0% |
|
|---|
| ROIC | 14.3% | 11.1% | 11.7% | 15.8% | 12.1% | -3.7% |
| ROE | 14.1% | 11.0% | 13.4% | 13.7% | 13.7% | -0.0% |
| Net Debt/EBITDA | -0.6x | -1.1x | 1.0x | 0.2x | 0.6x | 0.4x |
| Interest expence / Average debt | 2.5% | 2.2% | 2.8% | 2.8% | 3.2% | 0.4% |
People
|
|---|
| Insider ownership | 2.8% | 2.8% | 2.8% | 2.8% | 2.8% | 0.0% |
| Employees | 7,900 | 10,300 | 10,300 | 10,700 | 12,300 | 15.0% |
| Revenue/Employee, th. $ | 108 | 84 | 103 | 114 | 140 | 22.4% |
Littelfuse, Inc. ($LFUS) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 418 | 459 | 439 | 402 | | 46.4% | 46.5% | 38.2% | 32.0% |
| EBITDA | 61 | 86 | 102 | 79 | | -4.3% | 13.1% | 37.5% | 17.3% |
| Net Income | 36 | 42 | 54 | 33 | | -7.4% | -13.0% | 25.1% | |
Balance Sheet
|
|---|
| Cash | 412 | 408 | 498 | 490 | | 48.4% | 26.8% | 33.6% | 14.0% |
| Short Term Debt | 10 | 10 | 10 | 10 | | 61.8% | 28.8% | 7.5% | 60.0% |
| Long Term Debt | 743 | 688 | 691 | 685 | | 60.1% | 45.1% | 40.3% | 39.9% |
Ratios
|
|---|
| Gross Margin | 35.8% | 36.8% | 40.9% | 38.4% | | -4.0% | -5.5% | -1.2% | -3.2% |
| EBITDA Margin | 14.6% | 18.7% | 23.3% | 19.6% | | -7.8% | -5.5% | -0.1% | -2.5% |
| Net Income Margin | 8.6% | 9.2% | 12.2% | 8.1% | | -5.0% | -6.3% | -1.3% | 11.7% |
Peers in Electronic Components
Below you can find Littelfuse, Inc. benchmarking vs. other companies in Electronic Components industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Superconductor Technologies Inc. ($SCON) | | -61.4% | -46.3% | 240.5% | 248.9% |
| Akoustis Technologies, Inc. ($AKTS) | | | | | 148.3% |
| CPS Technologies Corp. ($CPSH) | | -5.9% | -29.5% | -5.0% | 48.0% |
| Cavitation Technologies Inc ($CVAT) | | -73.6% | 267.5% | -40.9% | 22.6% |
| Airgain, Inc. ($AIRG) | | 9.0% | 56.3% | 14.0% | 22.4% |
| |
|---|
| Median (22 companies) | | -5.9% | 1.1% | 7.7% | 14.1% |
|---|
| Littelfuse, Inc. ($LFUS) | | 1.9% | 21.7% | 15.7% | 40.7% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Cavitation Technologies Inc ($CVAT) | 93.5% | 85.0% | 93.2% | 93.5% | 90.6% |
| Dolby Laboratories ($DLB) | 92.7% | 90.2% | 89.4% | 89.1% | 87.9% |
| Flexpoint Sensor Systems Inc ($FLXT) | 96.7% | 95.2% | 92.7% | 87.9% | 86.1% |
| Airgain, Inc. ($AIRG) | 44.6% | 41.9% | 44.4% | 47.1% | 43.7% |
| II-VI Incorporated ($IIVI) | 33.2% | 36.6% | 37.8% | 40.0% | 39.8% |
| |
|---|
| Median (22 companies) | 31.7% | 36.6% | 33.7% | 34.9% | 36.3% |
|---|
| Littelfuse, Inc. ($LFUS) | 38.1% | 38.1% | 39.1% | 41.5% | 38.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Corning Incorporated ($GLW) | 32.2% | 27.5% | 27.9% | 27.3% | 25.4% |
| Dolby Laboratories ($DLB) | 34.1% | 29.1% | 30.9% | 30.8% | 25.1% |
| Amphenol Corporation ($APH) | 22.5% | 22.9% | 22.6% | 23.6% | 24.2% |
| Vishay Intertechnology, Inc. ($VSH) | 14.8% | 11.9% | 15.4% | 18.7% | 21.3% |
| IEH Corp ($IEHC) | 18.4% | 21.2% | 18.0% | 16.3% | 20.2% |
| |
|---|
| Median (22 companies) | 8.6% | 11.9% | 13.6% | 8.7% | 9.3% |
|---|
| Littelfuse, Inc. ($LFUS) | 20.6% | 16.8% | 17.4% | 23.0% | 19.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Akoustis Technologies, Inc. ($AKTS) | | | | 334.0% | 574.7% |
| CBAK Energy Technology, Inc. ($CBAK) | 8.0% | 92.4% | 57.2% | 20.6% | 30.1% |
| Corning Incorporated ($GLW) | 11.1% | 13.7% | 12.0% | 17.8% | 19.9% |
| II-VI Incorporated ($IIVI) | 4.3% | 7.1% | 7.0% | 14.3% | 13.2% |
| Superconductor Technologies Inc. ($SCON) | 586.1% | 57.8% | 0.0% | 34.1% | 12.1% |
| |
|---|
| Median (22 companies) | 4.2% | 2.7% | 3.0% | 4.2% | 3.8% |
|---|
| Littelfuse, Inc. ($LFUS) | 3.8% | 5.1% | 4.4% | 5.4% | 4.3% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Vishay Intertechnology, Inc. ($VSH) | 8.3% | 4.5% | 9.8% | 18.4% | 27.8% |
| IEH Corp ($IEHC) | 27.7% | 28.2% | 24.2% | 19.2% | 26.1% |
| Amphenol Corporation ($APH) | 19.1% | 18.5% | 18.3% | 19.2% | 21.1% |
| Inrad Optics Inc ($INRD) | -26.7% | -5.2% | -9.2% | -10.4% | 17.7% |
| Rogers Corporation ($ROG) | 13.1% | 11.0% | 10.1% | 14.5% | 11.3% |
| |
|---|
| Median (22 companies) | 6.8% | 5.8% | 4.7% | 6.0% | 7.8% |
|---|
| Littelfuse, Inc. ($LFUS) | 14.3% | 11.1% | 11.7% | 15.8% | 12.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Belden Inc ($BDC) | 3.9x | 5.2x | 2.1x | 2.6x | 2.3x |
| Inrad Optics Inc ($INRD) | | 9.9x | | | 1.4x |
| Corning Incorporated ($GLW) | -0.7x | -0.0x | -0.5x | 0.3x | 1.3x |
| Bel Fuse Inc. ($BELFA) | 4.6x | 2.0x | | 1.4x | 1.3x |
| Amphenol Corporation ($APH) | 1.4x | 0.8x | 1.4x | 1.1x | 1.2x |
| |
|---|
| Median (14 companies) | -0.6x | -0.1x | -0.5x | -0.3x | 0.6x |
|---|
| Littelfuse, Inc. ($LFUS) | -0.6x | -1.1x | 1.0x | 0.2x | 0.6x |
