Littelfuse reports steep drop in sales
Des Plaines-based Littelfuse Inc. reported sales for the first quarter dipped 37 percent compared with last year.
Sales for the first quarter of 2009 were $84.4 million. The slow start to the current year was due to exceptionally weak end markets across all geographies for automotive, consumer electronics and telecom, as a result of the global economic downturn and credit crisis, according to the company.
Extended factory shutdowns for automotive parts and electronic contract manufacturers in an attempt to bring inventories in line. Inventory reductions at electronics distributors in all geographies. Weakness in the electrical fuse business, reflecting the downturn in nonresidential construction and inventory reductions in the distribution channel.
The company reported a loss of 36 cents per share in the first quarter of 2009. This compared to earnings of 19 cents a share for the first quarter of 2008. The sharp earnings decline compared to the prior year was primarily the result of lower sales and, to a lesser extent, an unfavorable tax rate due to nonrecurring tax effects in Asia. These negative impacts were partially offset by reductions in both manufacturing and operating expenses.
The company ended the first quarter of 2009 with $60.2 million in cash and had $75 million of borrowing capacity under its revolving credit facility. At March 28, 2009, the company was in compliance with all debt covenants and expects to remain in compliance for the foreseeable future.
“The first quarter started even slower than expected, and we did not see much improvement in order rates until well into March,” said CEO Gordon Hunter.
“The initial signs of improvement came from our electronics business in Taiwan and China, and more recently we have seen increased orders from North American distributors. The automotive business in Europe and Asia has come off the lows of January and February, but the U.S. business continues to be very weak.”
“The extreme weakness of the first quarter and the increasing likelihood of an extended downturn caused us to take further actions to improve cash flow and reduce our break-even point,” said CFO Phil Franklin. Operating expenses, which we previously indicated would be $15 million lower than 2008 levels, are now expected to be more than $20 million below 2008 levels. We also will be making further cuts in manufacturing costs and capital expenditures.”
Daily Herald business writer Kim Mikus contributed to this report.