Littelfuse Inc. (NASDAQ:LFUS) Q4 2019 Earnings Conference Call - Final Transcript

Jan 29, 2020 • 10:00 am ET

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Littelfuse Inc. (NASDAQ:LFUS) Q4 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by and welcome to the Littelfuse, Inc. Fourth Quarter Fiscal 2019 Conference Call. [Operator Instructions] After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Trisha Tuntland, Head of Investor Relations. Thank you. Please go ahead, ma'am.

Executive
Trisha Tuntland

Good morning, and welcome to the Littelfuse fourth quarter 2019 earnings conference call. With me today are Dave Heinzmann, President and CEO; and Meenal Sethna, Executive Vice President and CFO. This morning, we report results for our fourth quarter and fiscal year 2019 and a copy of our earnings release is available in the Investor Relations section of our website. A webcast for today's conference call will also be available on our website.

Our discussion today will include forward-looking statements. These forward-looking statements may involve significant risks and uncertainties. Please review today's press release and our Form 10-K and 10-Q for more detail about important risks that could cause actual results to differ materially from our expectations. We assume no obligation to update any of this forward-looking information. Also our remarks today refer to non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measure is provided in our earnings release available in the Investor Relations section of our website.

I will now turn the call over to Dave.

Executive
David Heinzmann

Thank you, Trisha. Good morning and thanks for joining us today. Before continuing, I'd like to first mention the top of mind for us is our -- for our company is the safety, health and well-being of our global associates, their families and communities given the coronavirus outbreak in China. Our first priority is to our people. We've taken proactive measures to protect our people and will continue to take necessary actions. In addition, our global business continuity teams are closely monitoring the situation to limit disruption to customers.

Now, I will provide an update on the performance of our company. Littelfuse navigated a challenging macro environment in 2019, while our global teams remain focused on driving long-term growth, profitability, and cash generation. We actively managed costs to align the business conditions, while advancing several strategic initiatives across transportation, industrial, and electronics end markets we serve, demonstrating our ability to balance short-term cost containment with long-term strategic investments.

Our fourth quarter performance was consistent with our expectations. We recorded fourth quarter sales of $339 million and we delivered adjusted EPS of $1.17 at the high end of our guidance. For the full year, we recorded sales of $1.5 billion and achieved an adjusted EBITDA margin of 20%. Our disciplined cost management actions help mitigate the impact of the soft demand and channel inventory corrections to deliver adjusted EPS of $6.82. We generated $183 million in free cash flow, representing a 132% conversion from net income, exceeding our 100% target. We returned $140 million of our free cash to shareholders through dividends and share repurchases. This deployment of capital