Littelfuse, Inc.

Good day, everyone, and welcome to the Little Fuse third quarter 2022 earnings conference call. Today's call is being recorded. At this time, I will turn the call over to the head of investor relations, Tricia Tuntland. Please proceed.

Good morning, and welcome to the Little Fuse third quarter 2022 earnings conference call. With me today are Dave Heinsman, President and CEO, and Meenal Sethna, Executive Vice President and CFO. Yesterday, we reported results for our third 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 discussion today will include forward-looking statements. These forward-looking statements may involve significant risks and uncertainties. Please review yesterday'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 relations section of our website. I will now turn the call over to Dave.

Thank you, Tricia. Good morning, and thanks for joining us today. Let's start with slide four, which provides an overview of recent highlights. We delivered strong third quarter results, which were above our expectations. Our outperformance was driven by a faster-than-expected recovery from China COVID shutdowns in the second quarter and continued growth from global business wins and progress on our operational initiatives. We achieved revenue growth of 22% and organic growth of 8% despite FX headwinds. We have created tremendous demand for our broad range of products and expanded our capabilities through acquisitions. while continuing to deliver margins and earnings growth above our strategic long-term targets. I'd like to thank our associates around the world for another outstanding quarter. I'm particularly proud of our sustained success, which is an outcome of our highly skilled people and the market-leading solutions we deliver to customers. Our year-to-date record performance, including double-digit sales and earnings growth, It's a testament to our global team's execution across the breadth of our end markets and the power of our strategy, which is shown on slide five. We are investing for growth both organically and through acquisitions to diversify the end markets we serve and expand our organic growth opportunities within the structural growth themes of sustainability, connectivity, and safety. As a result, we continue to increase our product content and share gains in high-growth markets and geographies. Our significant achievements to date position us for ongoing long-term profitable growth and top-tier shareholder returns. MEDA will provide additional color on our strong financial performance and four-quarter outlook. Moving on to slide six, we published our 2021 Sustainability Report, which is available on our website. Last year, we set a goal to achieve a greenhouse gas reduction of 38% by 2035. To help accomplish this goal, we've been conducting energy audits at all manufacturing locations and implementing action plans. We also expanded our programs and investments to support our energy and water conservation and waste reduction initiatives, which contributed to lower intensity levels in 2021. leaders to 25%, and more than double our percentage of our Black and African American employees in the United States by 2026. Consistent with these goals, we launched additional initiatives around diversity, increased our focus on talent development, and expanded our efforts around inclusion and belonging. We are committed to the long-term value of a robust ESG strategy and are proud of our achievements. Before we get into highlights from the quarter, I'd like to discuss some market, customer, and channel dynamics we are seeing. Starting with sales through our distribution channel partners, POS remains robust, and in-market demand is solid across a broad set of markets. We have strategically aligned ourselves with customers' applications, enabling the greater sustainability, connectivity, and safety, like factory and building automation, industrial safety, data centers, telecom infrastructure, energy efficiency, electrification of vehicles, and charging infrastructure. As discussed last quarter, we continue to see software demand and consumer-oriented end markets like appliances and personal electronics. We're also experiencing broader softening in China. Within our electronics distribution partners, inventory levels of some of our products are above our target range. And more recently, we have seen our electronics book-to-bill below 1. This is driven by our product lead time reductions and inventory rebalancing from some of our channel partners. Across our industrial distribution partners, book-to-bills are running around 1.0, and inventory is solidly within our target ranges. Within passenger vehicle land markets, we continue to operate in a noisy environment. Tier 1s continue to unwind last year's global inventory build, leading to quarterly fluctuations in our sales. As supply chains continue to improve, we do expect to see stabilizing car build and modest global auto production growth next year. With the growing themes of electrification, electronification, and ADAS, we expect continued long-term market outperformance. Now let's move on to highlights and design wins in the end markets we serve. Within our industrial end markets on slide seven, we are expanding our leadership presence in applications focused on sustainability. During the third quarter, our design and efforts captured business for energy storage systems and alternative energy. In HVAC, a broad range of offerings secured business for commercial and residential applications. In the area of safety, we continue to expand our market positions for electrical safety systems and commercial kitchens with major restaurant chains. We also grew our business in general industrial applications and secured business in industrial motor drives, electrical utility infrastructure, and automated test equipment with our technical expertise and reputation for quality. With our diverse portfolio, we are increasing product content with leading customers and expect this to continue given their intensifying focus on sustainability and safety. Turning to our transportation end markets on slide eight, we continue to increase our leadership in the passenger vehicle market, leveraging the growth of both electrification and electronification of vehicles. Over the years, we have leveraged our automotive technology portfolio across all of our businesses and expanded the range of our offerings, especially from our electronics business. As a result, we have seen double digit content outgrowth over the last three years. This has led to average content across vehicles increasing to $7. This year's design wins support a continuation of this content growth. Our extended pipeline of new business opportunities and our expanding portfolio support our ability to continue that double digit outgrowth. During the third quarter, we captured substantial business in onboard chargers with key OEMs based on our technical leadership and the strength of our product portfolio secured business in battery management systems. For off-board electric vehicle charging, our engineering capabilities and differentiated range of products like power semiconductors, fuses, relays, and switches from our C&K acquisition secured significant new business. The addition of the C&K portfolio will further expand opportunities to grow our product content. With the global ongoing transition to electric vehicles, our company is playing a tremendous role with the breadth of our products that are enabling our customers' applications. We look forward to continuing to grow our leadership with them in this high-growth end market. Within all passenger vehicles and automotive electronics, we secured business with multiple OEMs based on our long-term relationships and innovative solutions for infotainment, telematics, and comfort and convenience applications. We also captured wins in ADAS applications with the ongoing focus on safety. In addition, we won business with C&K start-stop buttons in the vehicle interior due to our speed and flexibility. In commercial vehicles, we captured business in key strategic end markets. Within the electrification of trucks, we secured business wins with several of our legacy products, as well as Carling products based on performance and the breadth of the portfolio. For electric two and three wheelers in Asia, we grew our business for battery management systems, telematics, and keyless systems with CNK switches. For trains, we secured business in railway traction. In construction equipment, we won a project with our market-leading Carling products based on our strong relationships and the breadth of our portfolios across the businesses. In heavy-duty trucks, we won business with our high-quality solutions and lower cost of ownership. Given our significant business wins and investments in transportation applications, including expanded capabilities and portfolios from acquisitions, we are positioned very well for strong, continued long-term growth. Moving on to slide nine, electronics in markets, greater connectivity requirements continue to drive product content opportunities and new business wins. During the third quarter, we expanded our business for data centers and building automation systems based on product features. With the ongoing push towards sustainability and battery power, we captured business in power tools and electric bicycles. As it pertains to safety, of applications centered within connectivity, sustainability, and safety. Our new business wins have been significant and represent a diverse range of end markets and applications. We also continue to build the pipeline of identifying new business opportunities as we see our customers' engineering teams return focus to new product development. We fully expect that the organic growth from new business activities coupled with our acquisitions, will enhance and sustain our long-term growth. I will now turn the call over to Miedl to provide additional color on our financial performance and efforts.