Littelfuse, Inc.

Good day, everyone, and welcome to the Little Fuse first quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaking presentation, there will be a question and answer session. To ask the question during this session, you will need to press star then 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star then 0. I would now like to hand the conference over to you, speaker, for today. Trisha Tauntland, Head of Investor Relations. You may proceed.

Good morning and welcome to the Little Fuse First Quarter 2021 Earnings Conference Call. With me today are Dave Hindsman, President and CEO, and Meenal Sethna, Executive Vice President and CFO. This morning we reported results for our first quarter and a copy of our earnings release and slide presentation is available in the Investor Relations section of our website. A webcast of today's conference call will also be available on our website. Please advance to slide two for our disclaimers. Our discussions today will include forward-looking statements. These forward-looking statements may involve significant risks and uncertainties. Please review today's press release and our forms 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 Release section of our website. Before proceeding, I'd like to mention that we will be virtually attending the Oppenheimer Conference on May 5th, Cowan Conference on June 2nd, DEFO Conference on June 8th, and the Baird Conference on June 10th. We look forward to you joining us during these outreach events. I will now turn the call over to Dave.

Thank you, Tricia. Good morning, and thanks for joining us today. On February 23rd, we shared our five-year growth strategy summarized on slide four. This is ultimately a continuation of the journey we started several years ago. We continue to build our strategy around the structural growth themes of a sustainable, connected, and safer world. These are multi-decade themes which are stronger today than ever before and continue to expand the need for our innovative, reliable solutions. We have positioned ourselves to drive significant content and share gains in targeted high-growth end markets, which will deliver long-term double-digit revenue growth, best-in-class profitability, and top-tier shareholder returns. Now let's turn to slide five. We are off to a strong start this year, building on strength in the prior two quarters, driven by our strong execution, commitment to customers, and our ability to manage supply chain challenges. During the first quarter, we saw continued demand recovery across a number of our end markets. We achieved first quarter sales of $464 million, representing record revenues for us, and a 34% increase over last year. We delivered adjusted operating margins of 17.1% within target range and adjusted EPS of $2.67, which is 107% growth year over year. MENA will provide additional color on our strong financial performance. The swift demand recovery has caused some broad challenges across Little Fuses and our customer supply chains, including supply chain disruptions and shortages and logistics constraints. And while there has been tremendous progress in the battle against COVID-19, there are continuing challenges. There are a number of countries still in and going into lockdown, and the pace of vaccine deployment varies across countries. Despite these ongoing challenges, we are seeing healthy demand across a number of our end markets, and our global teams remain focused on meeting stakeholder commitments. Moving on to the performance within our segments. During the first quarter, our electronics product segment continued to experience strong demand in all regions. Our significant revenue growth was driven by ongoing strength across a broad range of applications, including data center and communications infrastructure, factory, building, and home automation, and demand for consumer electronics. Also contributing to our sales growth was robust demand in automotive electronics. Exiting the first quarter, our electronics book-to-bill was well above 1.0. Our end markets remain healthy, but we believe the strong orders reflect some double bookings to ensure uninterrupted supply of components. While weeks of inventory of our products at our channel partners remain at the low end of our normal range, we believe that some of our end customers are building extra inventory where possible. While our lead times have increased for some of our products, We remain focused on meeting customers' needs as we continue to work closely with our distribution, EMS, and OEM partners. Moving on to our automotive product segment, during the first quarter, organic sales grew 17% year-over-year with the ongoing recovery in automotive and commercial vehicle end markets. Across passenger vehicle products, organic sales grew 22% year-on-year, significantly above global car build growth in the quarter. We had higher content gains coming from product mix for well-equipped vehicles, like luxury vehicles, SUVs, pickup trucks, and continued growth of electric vehicles. In commercial vehicles, we saw market strength across most geographies and sectors, including heavy-duty truck and bus, construction and agriculture, and material handling. We are seeing global semiconductor and resin shortages, with several OEMs announcing shutdowns. However, our order patterns remain healthy. We expect second quarter global car production to be significantly up year over year, given the very challenging quarter last year, but supply chain challenges will prevent car build from growing sequentially at a faster pace. We expect the long-term growth of our automotive segment to continue outpacing vehicle build with our expanding content opportunities. Turning to our industrial product segments, we saw significant strength on the top line with our acquisition of Heartland Controls in January, along with double-digit organic growth of our legacy business. The integration is going very well, and we are already seeing benefits based on our combined businesses, stronger customer relationships, and expanded portfolio of complementary products. We are seeing broad demand across HVAC in markets with particular strength in residential construction, as well as continued strength across renewables, energy storage, and power conversion markets. Similar to other areas of our business, we are seeing increased demand from our channel partners as they pull in orders to manage risk. Moving on to key design wins in the end markets we serve. In the industrials end markets on slide six, we are enhancing our capabilities and growth and target industrial markets like HVAC with the Heartland Controls acquisition. We had several key design wins in HVAC during the first quarter as we capitalized on the structural growth theme of sustainability. With our technical support and comprehensive product portfolio, we won new HVAC business in North America with a global manufacturer, and we saw numerous design-ins on temperature controllers, air monitoring, and air conditioner power control boards in China and Korea. With the driver of Industry 4.0, we secured several new wins in the U.S. to protect motor drives used in industrial automation. In addition, with the ongoing focus on power optimization, we won new business in the U.S., where we were designed in for a customized timer for a global manufacturer of portable power generators, and we had key design wins with a component manufacturer for power generation and distribution equipment. Our business wins across industrial end markets reflect how we are able to offer more solutions to our customers to create greater value. For transportation end markets on slide 7, we continue to extend our leadership position driven by numerous electric vehicle design wins across passenger vehicle markets. During the first quarter, based on our strong relationships and execution, we secured a key design win for a new electric vehicle platform with a leading European OEM. We also secured several additional battery and plug-in hybrid electric vehicle WINS globally. Off-board charging applications represent content opportunities for a broad range of products, and we were designed into an electric vehicle fast charging application in Europe and customized charging application in China. Securing these types of new business WINS will accelerate our long-term organic growth in these high-growth areas. With advancement in automotive electronics, we had a key win in Europe for an intelligent antenna module, and we continue to gain content wins with the luxury vehicle and SUV space. Our strong engineering relationship helped secure several key design wins with a US OEM for the heavy-duty pickup truck in North America, as well as a new line of SUVs for the China market. Design activity in the first quarter remained robust within commercial vehicle markets, but we are also seeing the progression of electrification. Leveraging the strength of our local sales and engineering support, we won a significant program with the European OEM on their battery electric heavy-duty truck and bus platform. In addition, we also won business for a traditional heavy-duty truck application in North America. Our component knowledge and long successful history of working together with this customer were key factors in this win. Across electronics end markets on slide eight, we are focused on leveraging our leadership and broad global access through our strategic distribution partnerships and deep OEM relationships. With the ongoing theme of connectivity, our technical support and our robust product features continue to drive design-win activity. During the fourth quarter, we had During the first quarter, we had a number of design wins in 5G telecom infrastructure systems in Japan and Korea and cloud infrastructure markets in both China and Taiwan. We continue to see good design work in the building and home automation markets, winning new business for a smart meter in India, and wins in Europe for smart home applications. We saw key wins across a wide spectrum of innovative consumer electronics applications, We secured a new business win for an electric bike battery management system in Asia, which is also seeing strong demand in Europe. In the ongoing proliferation of electronification, we secured a design win for a maker of wearable safety airbag system used for motorcycle riders in Europe. We won these new business opportunities based on our local design support in customer relationships and product delivery. We are confident that our broad product offering particularly well suited for the ever-evolving electronics ecosystem, will continue to drive long-term growth. I will now turn the call over to Meenal to provide additional color on our financial performance and outlook.