Littelfuse (LFUS) 28 Apr 212021 Q1 Earnings call transcript

Good day everyone and welcome to the Littelfuse First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker for today, Trisha Tuntland, Head of Investor Relations.

proceed. may You

CFO. welcome conference and President Littelfuse quarter and President first CEO; for reported Good first our With to me earnings quarter and Vice Executive call. Meenal Heinzmann, morning today XXXX we and results morning Sethna, the This advance are and a our will our Slide is webcast website. to in copy of release website. also Investor disclaimers. the today's presentation our slide earnings call be A on available Relations Please of conference our for and available section X Dave of

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

us we that June XX. Stifel We Oppenheimer Conference be on these the Conference to the Dave. on Before Conference events. and during Baird call joining like outreach now to turn June on May look X, proceeding, I'd to mention virtually the X, on I attending will over Conference Cowen June will you X forward

is shared our years on strategy joining we of On morning for XX, us Slide ultimately we Trisha. ago. the continuation summarized Good several journey you, Thank growth a started today. and X. This thanks five-year February

teams, a the reliable strategy continue are structural our expand which to and These build sustainable, stronger need multi-decade are around of innovative, solutions. for the to and than today before safer continue ever world. connected teams growth We our

high growth and end content revenue to profitability returns. deliver We long-term double-digit and best-in-class markets, drive growth, ourselves share will significant shareholder have which targeted gains positioned top-tier and

Slide to turn X. let's Now

to We by on a strong customers the our challenges. chain building are start driven supply to execution, quarters, and prior manage commitment strong ability year, our this to in off strength two

XXX% into number on pace demand continued number end the lockdown achieved $XXX across across and million, first focused seeing over are some commitments. teams countries. of will margin And demand supply customer last progress Despite disruptions healthy delivered is our our of of across challenges. a quarter of record recovery XX% our us of global deployment our adjusted target range are there adjusted our there vaccine saw including sales markets. broad has remain stakeholder end first $X.XX, markets and number logistics caused a challenges, operating provide increase color battle we and quarter, representing ongoing strong within tremendous continuing and We revenues recovery against We for across while growth has EPS the COVID-XX, chain year. During and and challenges Littelfuse's are shortages There Meenal a still swift a countries chains, The in meeting XX.X% demand and we performance. of supply additional on constraints. varies in the been going and these year-over-year. which financial of

to the our segments. performance on Moving within

regions. segment Product During continued all experience strong to demand in the first quarter, our Electronics

automotive was demand automation, electronics quarter, electronics. first ongoing Also was range across including Our driven the strength building and robust well contributing a to communications for Exiting sales of growth X.X. demand home center by and and revenue infrastructure, book-to-bill our our electronics. consumer was factory growth applications, data significant above broad in

to bookings but markets healthy, orders of strong remain ensure we reflect double the components. some end uninterrupted believe Our supply

partners channel building our at our products our inventory our extra of customers range. the of believe where remain inventory low some end end normal are that of at of possible. We weeks While

times lead our work EMS have as our We with and our OEM closely of needs some for partners. continue While distribution, on products. we increased to meeting remain customers' focused

segment. Moving Product on to our Automotive

growth and In year-over-year in product During products, strength ongoing across equipped quarter, sales bus, sales vehicles, SUVs, vehicles, first recovery Across markets. year-on-year, vehicle content XX% we We like commercial trucks, handling. global saw geographies of and grew and the from organic and quarter. agriculture had and car mix above well most commercial grew construction automotive and passenger with build XX% the end including vehicles. vehicle material heavy-duty gains for vehicles, higher continued in truck organic significantly coming growth pickup luxury market electric sectors, the

resin semiconductor shutdowns. seeing and are global with shortages announcing several OEMs We

order However, healthy. our remain patterns

quarter expect given car prevent significantly supply car be We second build year, very to quarter global from up production sequentially challenging year-over-year chain the but will challenges a pace. at faster last growing

segment opportunities. with automotive content vehicle continue expanding long-term build to the expect We outpacing our of our growth

Industrial portfolio strength Hartland Turning we businesses, saw we on with of customer business. organic already seeing our are of very in along with growth based acquisition legacy our integration top-line stronger and well of to on The our benefits our the relationships and going complementary double-digit significant combined Product products. January segment, expanded Controls is

construction, demand with our energy Similar manage orders as risk. to increased markets. across and end channel demand as broad strength seeing areas markets they we as storage in from in renewables, business, across well our conversion power continued to partners are strength seeing are pull residential other We particular HVAC of

key controllers, structural markets in power we monitoring in and in temperature the support in HVAC air with with growth conditioner boards X, on capitalize Moving to won and we enhancing and markets Korea. we key of several on are the business wins in first theme global design on the technical we as product capabilities America sustainability. our new industrial We like had and industrials quarter end numerous HVAC acquisition. saw the Controls HVAC Slide design our target end markets Hartland the China wins manufacturer With we during comprehensive wins air design serve. and North portfolio, a growth control on In

new of industrial we driver wins the secured motor several to protect X.X, the used U.S. automation. Industry With in drives in

with for power customized the new addition, design key with equipment. we component In global designed power our in were power a our for timer ongoing optimization, and in we business for where generation U.S. won had manufacturer the focus on and we distribution of generators portable wins manufacturer

wins able business Our to offer value. our markets to more reflect industrial are create how end we customers to solutions greater across

driven our vehicle vehicle For markets end X, position, transportation by leadership design electric we continue to across extend passenger numerous on markets. Slide wins

quarter, strong relationships we with a a European for execution, on electric our and design key secured leading new a first During based the win platform vehicle OEM.

vehicle electric wins wins application Off-board We Europe battery organic these our also and content areas. into vehicle charging in new broad plug-in in these will customized in hybrid types growth and several designed accelerate China. opportunities growth represent secured of our products range long-term charging Securing fast-charging were high globally. application for an electric applications and business additional we of

we gain and with we in antenna With the module SUV electronics, and wins luxury to a an for space. Europe advancement vehicle in content automotive key win intelligent continue the had

key we the first pickup quarter China in a several in Our platform. design progression new strong heavy-duty their to America, Design seeing the truck are bus secure electrification. North well OEM for SUVs market. vehicle activity relationship as of engineering within helped a won remained European heavy-duty support, markets, also robust commercial local line the and the on a our wins for engineering U.S. Leveraging with as with electric program strength truck sales battery where the of and the we significant OEM of

also heavy-duty in we business truck addition, In a for won traditional North application America.

our factors win. Slide this the we leadership end Across knowledge history successful long relationships. this markets X, working Our key were deep focused in together OEM are component in leveraging broad strategic distribution and on and access with global partnerships on electronics our of through customer

the connectivity, to activity. theme our With technical design features win drive and robust support a continue ongoing product of

first and China infrastructure in in quarter, and in number a XG infrastructure and markets both we wins design had During Korea Taiwan. cloud of telecom systems Japan the

riders is good which local Europe Asia, secured a in across smart in applications. and consumer design bike innovative electronics based new system for in in of design We airbag product new to automation winning Europe, wide our We business these ongoing Europe. customer relationships and a wins proliferation an in key maker win our business seeing new used system smart strong battery safety saw the continue home on meter and a the won motorcycle we work for electronification, applications. We also a of wearable management delivery. opportunities and support demand win secured of We business for spectrum home for India in wins electric design see building markets, and for

confident electronics offering, particularly turn to the Meenal and over additional suited evolving will color ecosystem the are to now performance well to is for outlook. will broad financial our We long-term provide product drive that continue our call ever on growth. I which

Dave. morning, Thanks, thanks everyone today. joining Good for and us

start So XX. let's Slide with

versus were XX% and recovery half both year $XXX as the XX% our sales expectations across our sequentially last back up above momentum million of from continued year of markets. and end up quarter first continued last we the well We our saw as were results of earnings. on most Sales

and but levels, in challenges Overall, operating and basis Adjusted were X% growth range. of to Hartland to input higher the a XX.X% contributed through flow margins freight in through foreign acquisition successful X% expanding exchange are costs, XXX year. chain volume incremental managing our inflationary these for sales typically number especially points in would experiencing supply versus commodities. sales We last expect rates organic including added our we've targeted been quarter, Our and Controls these XX%. with at at operating higher headwinds, deliver margins

year, was GAAP a year. quarter diluted equity rate. of points year-over-year over $X.XX, basis included XXX% was an First last of investment XXX gain This per and non-operating earnings benefit from diluted versus and reduction resulting our tax EPS over last from a share up mark-to-market in adjusted $X.XX $X.XX,

Excluding adjusted was these up items, XX%. EPS

rate tax effective XX.X%. GAAP Our was

was In than lower million cash flow flow rate in $XX higher profitability a in due both $XX tax in operating the we quarter, the million solid free jurisdictions. our better start forecast XX.X% and generated to cash year. effective adjusted to Our tax

through half cash generation half. stronger Our cash have with improving second year the generation than cash typical the patterns first flow

year. the spent net for of capital led We expect conversion expenditures the in XXX% cash a of capacity million free in investments. $XX of by We prioritization rate flow income quarter about

deployed quarter balance solid and of sheet our dividend. the strength $XX of cash In to debt the other our cash beyond We year. million continue in expenditures down in to in million we million $XX The our with generation earlier and shareholders reinforces ended uses, $XXX cash. paid flexibility. Hartland profile cash million of acquisition capital We $XX this expect to spend approximately via our quarter, financial

announced also our We three-year buyback authorization. million a approved stock that Board $XXX

unchanged capital buyback our remains stock on with our enhance philosophy Our and acquisitions trajectory. is organic opportunistic that primary allocation growth focus

segments Moving on our on XX. to Slide

segments XX.X%, the are basis sales achieving segment pressures as growth end at markets we Operating across all content near number at our commercial to passenger increasing electric each sales of The ongoing by the versus last of across were in growth over both markets. points dampen pressures earlier. level and points this markets these These many expect were organic The basis as year by with time, growth strength trends. and were same higher sales grew XXX organically. Automotive volume continue growth and and basis points points vehicles. basis XX.X% to from challenges an along electronification to up elevated and and expanding seeing trends, term. the Operating growth. supply organically. over chain ongoing the from in XX% content segment Key versus resources I margins we some ongoing each up All seeing XX% over our margin from than XX% growth as led margins costs electrification favorable more segment the XX% with the We're demand drivers drove content with market from across grew our last vehicle approximately across quarter, end we XXX XX% end last XXX demand on Starting market year. continue year. quarter noted growth margins XXX focus benefiting Electronics. in our of volume finished significant in of quarter At well businesses double-digit

to Industrial year acquisition content growth last businesses from up organically. and vehicle expanded our saw with addition segment, end Hartland XX% also passenger Operating larger XX% year Across We the the quarter. the and both higher declined last were X.X% in up in margins of sales vehicles. from the over

to challenges production ramping quarters our transfer are takes typically up I production now transition mix softness such It to quarter end chain levels of non-residential achieve and supply manufacturing benefits. be new segment a noted of and margin impacted earlier, by and The the dampens of our Beyond markets we the stages favorable site. margins. construction, continues which in expected gas also productivity as final oil a completed in and the in mining, few

target industrial integration and markets expect as and We segment high-teens improvements plan. our rates we continue end for Hartland to recover the margin execute margin

Moving on to Slide outlook on XX. our

Our second are dynamics could potential ongoing forecast the reflects on supply emerge. momentum keeping quarter environment, watch chain demand and we a the an close disruption in any but that

XX% the last range second year sales quarter over $XXX We in million, expect the $XXX midpoint. of up at to million

chain Auto are Industrial includes a to the supply Sequentially, Hartland segments. our We of acquisition. full expect challenges growth quarter and now segment projecting decline sales a due year-over-year our sales well-telegraphed of in market the our segment all from we

to expect share quarter and of in at diluted second for tax This $XX midpoint of last be to assumes adjusted $X.XX, count the over EPS effective $X.XX We rate of range year's million. quarter. XX% the approximately XXX% the an with up challenging

typically flow We in than levels. lower year-over-year second would the though volume quarter through operating are at projecting income these we improved expect

of in headwinds costs, to continuing freight some due and unfavorable our expense to especially second are stock reoccur. are that be elevated expect quarter first and Sequentially, are commodities from we equity quarter structure we mark-to-market midpoint. This to higher compensation EPS through from quarter grant pricing input We XX% at not the the productivity the actions. cost in see down gain that and expecting $X.XX includes to but offsetting of rates impacts

full-year in with to a the to XX% rate at for project to of XX%. we each the I'll look tax And we final segments some growth and Dave expect of we across double-digit turn for the As our XXXX, sales continue XXXX back comments. that, range it year

Demand In summary ongoing challenges. year began Meenal. manage an COVID-related chain we within on healthy, we and this but remains Slide environment. strong market XX, Thanks, performance to delivering continue supply dynamic

to cost fundamentals disruptions, mitigating impacts overcoming business sound flexing enable our times, capacity operate challenging effectively supply-chain Our us to and during performance.

for end continued well is strong track I our strategic successfully customers our a a I'm growth. safer and of will the integrating now confident call Trisha. our have activities profitable We record turn sustainable, empower that, as these their initiatives we with connected customers. and for over long-term company With to world positioned

Thanks, Dave.

For participants, Meenal and Dave are in separate locations.

[Tawanda], your direct them. to other one to free feel questions Q&A So or the roster. assemble the please of

the [Operator Instructions] Longbow. with comes Our Todorov first question Nick from line of

is line open. Your

calling and some Good peers deviate where Dave, guys your Dave builds everyone I rest else guess from Meenal. dismissing is morning, by out you of it. inventory

day, do factory build versus And I also think all to at the your gains quarter honesty, in and and investors but on? think potentially, content inventory out first about what as the growth our you maybe how automation can end I strong the as much electric evidence appreciate being vehicles question, of see was guess potentially long-term of parse content your electrification for as automotive, range much you last mix. and these going I twice trends favorable also talked your due you are

wanted thoughts any you. to just there? appreciate So Thank

customers whatever the try call, automotive seeing information on earnings let's some we fourth fact were inventory with some Sure, the be open the to inventory fourth about our during build start quarter that inventory. as kind us so talk situation, actually our In quarter. heard we and of of yes, with have you we

product of well as of supported quarter. most to certainly with of vehicles that in the well vehicles. quarter from were that, matched lines, profitable supply on we fourth particularly not the automotive about heavy side content did pretty sure increases the their the as so that to sell-through during kind seeing, in mix OEMs they was talked our as first luxury the see outperformance the vehicle standpoint, we We being of chains part diverted our and really with much So up EV customers make

story. about the saw content content asked X% XX% quarter. content of growth somewhere We the between during the - first and So you

very much being see partners. above vehicles we often expected inventory impact mix very, quite and long-term to that not our produced. our about distribution business. channels we have Inventory while be historically continues that's lean. there of well and inventory there Other But we at inventory builds So of electronics areas our because talk and they how distribution the build seen

However, we some during There disrupted environment. that to and certainly see supply inventories chain a up clearly do evidence are they some can contract manufacturers assure supply is they OEMs. some building where potential evidence and

see distribution don't the at of see customers, but bit we contract level. OEM the manufacturing kind a at normal and do little So, buildup the we

that So, helps. I hope

it. a component taking I are kind and you the taking lot, different measures follow-up heard wonder what of helps inventory manufacturers from as some adopt to that you really Yes, building. booking other a if Maybe any? Dave. appreciate risk to type We've I policies. that, and are excess double semi of minimize what measures

Yes, an want shipping you constrained product sure area you right shipping it product course, to product, out for you particularly building reaching inventory. are to so customers capacities, that's yes of opposed your need away actually start you as make when shipping if to

that supply and products go do, as in for everybody's times to that to get sure best - producing are make it's So products we at and through the focus on on we'll rapidly. that, interest us move and chain push we're end back which challenge we orders into

out further at are push we we times. a lead sometimes increase We take. there do measures little orders So to times

orders. also of We non-cancelable increase window the

term, them. the that are they that we kind then can’t mandating customers' as cancel near of order So

primary just products and taken. that really are kind having is do there on. that actions with really shipping discussions or you normally our to those we the of So working we're But inventory? you challenges ability. building are of these thing Do making sure that are the like for best need customers and And

sequentially, some one operating lots of I are from Meenal there can puts implied If you us between takes. gross Meenal, color if I margins. the give guess, and more the and sneak look can margin we

year-over-year the tax of stock trajectory going to the about but Hartland, quarter flow should We and Thanks. a there also, and of think number how through then direct lower terms for gross higher rate is margin can us a you And comp, guess of I full we have operating forward? margin. in OpEx

running for a basis even there each a basis about on On of about impact headwind Yes, little on terms talk so and prepared we for I'll really look I the to our second about a quarter, the of that - EPS. the is costs, in of the headwinds you as at about bit as we're of second a is as bulk a quarter, higher that us buckets. in higher mentioned costs across my second commodity talked I that, quarter, one the the actually say when increased and In rate us. mentioned general, inflationary so, top that big general XXX input segments. out points definitely of well basis XXX costs, inbound that's comments in two we in quarter, freight points sequentially, costs. things $X.XX that's the continuing outbound, coming first seeing year-over-year of first And

coming half Some the that out of higher stock really the sequentially. of higher coming compensation, about compensation of that stock out of

through past not. second XXs. expect that to So be the the first the is we that quarter net-net, will being in target than I better flow expect about year-over-year be high. mid second range I wouldn't it the talked in our quarter but say in our through quarter, flow

questions, Nick. for Thanks your

our We next will caller, take please.

of from Our the Ackerman question comes Karl with next Cowen. line

is open. line Your

for Good one. morning, Meenal, from mentioned questions everyone. the Two to across first

not term So, would margins larger out I well basis distribution and extending, may headwinds prices, I in plus costs I with rising sign some June But And have called channel implied your I down of freight there XXX maybe currency quarter. guess step you you as think understand guess think gross customers? and this instead peers agreement flat the raising of are that thought so to rates I be would I across your have shipping relatively as with longer points? prices raising able volume times lead of the many are versus

on gross is we outlook of Sure, gross didn't operating we're the say margin around right margin, margin. versus what but I in for our terms are now on comment seeing headwinds would that largely

just of headwind through. of of costs, had those in question number year-over-year or earnings versus that the in the year, just of bit We about spending say, our elevated an last part in fact the would weren't with also the talked much and in seeing improving But we going see headwinds are mind to pockets. little while even on we're discretionary are quarter increases that's quarter that that, puts also in a there's I terms things as pickup. year-over-year and is margin gross some increased OpEx, last basis, second in So seeing whether that call, last a at we but really we spend of are OpEx actually the coming starting I from and challenge, takes a first on quarter keep terms mentioned that

to through more pickup, We discretionary as OpEx compensation has spend also well. up, that's are largely bit gone little and going seeing like a areas variable run

of So as OpEx. we between part that had part taking on you mix that's, margin then to commented actions going I just - number actions of including And things give a overall of as productivity. a want versus in our gross are I

as well distribution, pricing ongoing where productivity a structures difficult no on versus contracts heavier a more our in say on we versus type actions we probably and got I pricing shorter-term which at can that some a you've help course, maybe manufacturing little where are long-term contracts bit area. weighted chain would little these supply contract, headwinds, going some that of Of sites mitigate of actions. have as

Sure.

and/or into be dovetails my second your remarks but IXYS you in you has your think during subsidiary the may I prepared and guess this, question, I Dave take that complex Analyst referenced known think the also Meenal simplify Day, which I I'd overly shortages of processes. there that thoughts chain, actually capacity in-house wafer that. on terms the perhaps hearing wafers in of supply an are appreciate bringing well they're incremental Thanks. working to given

Karl. are question take can a impacting to semiconductor if And that it's in-house offset there we shortages reasonable of I'll Yes, that the of world, that. some kind help bring

in microcontrollers part For the have where we constraints primary on are the most buying areas are or not sensor space our shortages products, where the in in semiconductor small the some some exceptions where we are a have we're heavy focus. There where own even processors there for doing challenges cases and are some qualify internally we're are kind there MCUs the we through. can where assemblies and some working work those to to sensor of we There of some help them support that. that do and shortages on had those

- lot are can to time accomplish do it that, there a some So areas but takes that. do of to where we

Karl. We'll caller, our questions, next your for Thanks take please.

of Our comes next Matt with Sheerin Stifel. the line question from

line open. is Your

previously? Good on morning, you've that specific seen everyone. to side, it ago, another maybe book-to-bill than X.X, did could and I strong we're Dave what in the regarding question quarter just you you saw - you know above what the the a component be talk more seeing compare about higher bookings is I

we extending are what large slightly from We It's number, Matt. not lot way like, a up doesn't out, the a specific very quoting because I quite saw number. think, a right number as Yes, it's candidly bookings mean Sure. quarter ago. were now a

not strong build inventory, been and but build love OEMs sell would like booking build So, reality as I everything we is contract bookings evidence and that at to The some manufacturing ship they some partners they to that. to we see about level, higher inventories just them, at a that and inventory are talked to earlier, work through. distribution have double even of the able try quite it's that some to of

remain lean inventory partners. So, we a our in situation pretty distribution at

actions. and you'd particularly through you've thought that high we're along. about I that price those that you prices revenue then Okay component be have pass able are and some successful, hearing Meenal, percentage more would of got to distributors talked distribution given a

effect here costs, of a So, is of kind of there is in the cycle terms sort or out et depends on impact it's lag you the think Do to cetera? and really operating margin - input that depends electronics? on bottoms within that

Sure.

to the in on will pricing side point, We'll putting as definitely those actions your coming the first see on second mentioned our a pricing quarter. in across the comment had we distribution - So, start the did on did, I the question, impact of better why the I previous yes, we made bit is actions, quarter, And through on that segments. Matt, the which a that flow-through improve little there. definitely

Okay. go ahead. But lastly -

little like the that things. automotive of that build like have where we in be a we'd kind begin drop respectful and passed there, a customers through. bit LTI of try to strong challenging traditional of some bit We through our areas of we notice will which a that, and and relationships effective more not bit little give on course, customers to distribution, Matt, to have today through it couple a increases, to on flow end different price it's

during do LTIs the over next However, this kind impact of or you're what negotiating years. year the trend you of find course you is in renegotiating of the may when couple the environment, positively

a is to with have about. much there line for talking visibility kind those production related improve couple basically inability that customers of not the any and for and - or about a versus of down on been How quarter, of into other suppliers not which sequential any seasonality some quarters to has And of correction outlook - inventories just what lastly the ago? out - rescheduling is that having talked automotive you

that time that down with we're shut impacts reflected to different all see really build that. on schedules for the builds having our of Weekly We it's the customers. - periods on are customers seeing Yes.

So, it's and car some shortages. but particularly the by shortages, by really customers build hit ours the of core getting not other driven our that are

please. our take We'll Matt. caller, Thanks, next

Christopher the Our next of line from question Glynn comes with Oppenheimer.

is open. line Your

first so if a you to when the of there chains might position not already? manufacturing direct if is right little your wondering global Dave. challenged, there some I'll are share all out and start Thanks. to gain, one am now, fulfillment footprint, topsy-turvy A Maybe click the for they're times that opportunities with competitive lot supply structural I

competitors, We Chris. has when clearly question demand history to ability make part we of our and of strategy perform to our when an because the flex business. we as great our have we're because don't have overly up than a Yes, sure able get shown part long-term we it's That's in try better strategy to near capital-intensive spikes share not to will we have us sticks, now, some that that the chain these do seeing some cases where term that where are challenges. as carry you supply able all us but and and right gain help outperform it and competitors advantage gives does an we're ultimately there that, to in piece over through move the that, and of are of clearly of

had feel on that Okay. you've running Do for curve upward wherewithal some time? that like the established of realizing you you're

Yes.

position I seeing we normally and kind think the we're are of in that.

as of is And doing we're have now years, so But So, right that doubt ourselves. for we're next be is next the no much capacity forward we work shortages. the we quarter. add gotten most what about will that. that prepared not for And in we're needed, couple of capacity a continue gaining of now some to wouldn't stick. targeted looking to without There piece business right the

was curious equity gain just detail I that about could the triggered investment $X what you Meenal, if million. think it Okay.

came a that a we've Yes, This and a an every rules to now the years because ago an in back, we years has have. for a from accounting gain long the mark-to-market really under public in are every quarter. that had company volatility few acquisition new quarter we and been investment with public that's what company loss required the time it's drives

of to If - part more scalable think integration that - a Okay. most think one technologies. could was simplifying the technology sneak portfolio your this narrow focus I portfolio the I big in on I

update that holistic provide So, wonder could an you if on process?

acquired we product IXYS the can didn't long-term can. I the that clearly business. Yes, lines within see it we Yes, were as I for drivers that. when strategic take family there

of worked some that we've what have to pieces core that either, of way business, our producing we cases today on some that where we manufacturing have shutdown the through the sold, so we've to where semiconductor in activity building we bulk we as former move the continue power And business are IXYS expect be - in IXYS and products we're the forward. cases

of bulk is the behind trimming and that So us. pruning done and

take our Thanks, next Chris. please. We'll caller,

Williams the comes next Loop David question line Our from of with Capital.

open. is line Your

Good taking the question. morning, thanks for

we obviously that, could reading half do as downside ask maybe sector visibility of maybe But to where some the is giving want see you we see and some second some challenging the the the Just difficulty are year? you your maybe you how automotive about half on upside and think that. about the second second disruptions visibility, think or part how

kind that customer certainly chain it quite North is on be and beginning on America in inventory question see Asia, this to out our and in into be and the Yes, I do of strong we the improvement in think is of kind year. as the a quite I as are second is been auto, most the a is momentum business pretty time right hang to the think us vehicle year is in low quite strong the in and two quarter half would to second second the It's we solid. just would folding They continue the into momentum of strong. things know half. the supply marks carry Europe, to demand side last demand beyond are demand challenging. well and that expect now some bit visibility lots end in there Clearly such going dynamic parts in

a supply things step now, if the So, see, of chains auto. the hang be the half of back some is the pervasive kind then right in our view through up, shortages can and of but there semiconductor we could are the year, probably year in the course progress

out kinds year. do contract the remain a level Those on comfortable and do we are and Customers orders. slow situation cautiously of still pandemic spikes, see do in in we're are manufacturers they're disruptions the just or the building bullish, the get happen half. we optimistic are could still really of that is the back back down wildcard things back there of inventory, they - their that that pretty We but half. half other The with the reach

Are And just what bit more Great. the with how quarter expectations changes you your recent through you're would and cadence through be? anything that little in you're any a April talk if seeing seeing maybe demand then trends demand maybe line guess guess, I you could the about things I seeing in Are here. of weeks? the,

bookings seen demand haven't quarter the to really through we and date. changes. very to see No, Continue strong

of expected flow to those we in continue see environment, as kind So, this orders through.

take We'll David. our next caller, Thanks, please.

of question Junk next Baird. the Luke comes line from with Our

open. is line Your

Good a for of morning, margin Sorry related. was Probably there. both couple about that, mute morning, this Meenal Trisha. on questions

nature, out think electronics now effect of targets can which things. chain year things temporary picture are margin when last strong that of temporary P&L out performance and this and Are to that come how question, a in idling strength right a your discretionary those I we what there course current to attribute right strong workforce which and is First due businesses ask in to talked the mid-term to about the in the in the those and another that situation, now? much type quarter supply really of light benefits still you COVID to starting or of extent as wondering question, big auto, of margin both spite underlying we fundamentals of is I'm

Sure.

in right our are about. input those to are talked costs from Investor chain trending back electronics now. the you Day, talked I margin on Yes, February, in auto headwinds what are are trying our do same to levels get still to time, down. of while call levels customers our I'd get out I I'd are different spending say and and our It's curtailed say spending things COVID out also - supply both going about right. long-term margin At level some So, there a the targets as that people and we mentioned, the at

noted So have set up targets say the for that range, still I XX% quarter high-teens we margin negative mid-teen on. that's takes same to lots XX% say out us. net going XX%, for in we the long-term in and electronics of time, think at those for I long-term right the the would why But the I'd puts still we with those that businesses. are targets automotive that

of new right And then, inefficiencies we're this of some question of course we working as to that's industrial, of facility right quarter now? had remarks, came of now more a so and think in question I'm mentioned is the second the this start productivity and you of online related we and your coming ramps through in terms just Hartland, specifically facility level now, normalized numbers the that a wondering Meenal near-term about you new Hartland industrial into the should to full underlying better right sort of and that margin about integrate that as how in margin think trend business margin in

good Yes, Sure. question.

do the up going we haven't our say recovery range little that I another things market transfer. that side, of that we that itself Hartland it I get be end think of about, work into in back typical and that that's on because acquisitions, typically starting longer. on I'd three-year area. gas, unchanged to and the Hartland operating I assume say about of normally portfolio a we to we about I I the a would margin bit high-teens and comes out a little a two But that do The that when will really in the cost no COVID person us talked I'd synergies factories, and move step get talked we mentioned, about said part the both been business put able and will endpoint, into time year the it February. oil us that as function, embedded to a take talked situation so non-residential, exacerbated bit that and say function lot with like for as margin transition on always revenue think then The is that our back range. up get a frame acquisition margins. high-teens bit, step segment we also really the a in manufacturing target mining, at will target so our to will but acquisition ramp function mid-ish teens that step some into We've markets I one during is

Sure. you. Appreciate your questions, Luke. Thank

from the question of Jefferies. next Our comes line Kelley Instructions] David [Operator with

comments. feels auto into continue work are that inventory your wanted build did customer we quarter question the some maintaining demand First for shorter-term not right like to all we and inventory of now down solid and of simply Dave If at customers to up follow on beyond what once see given visibility inventories or seeing you fourth disruptions? recovery these QX, the get stock production

it built the kind that, of the that quarter, think visibility kind get ability because to Tier we would there point. seen place sense in this in It at of seen some matched down, up there the fourth best evidence have right Yes, didn't build much perhaps we first see yes, inventory our outstripped But, but being in not now, we first past perfect worked as that auto to they quarter we our not it I there. it well work others, is of took the view it pretty plan ones the OEMs, with our deliver up the down level year. of our that didn't that in were kind - they're world demand, is quarter, with trying some is and say haven't that

in and there a recovery? vehicle an more inflection reference margin automotive may should That's vehicle And for it. missed but got an uptick then segment maybe did see organic I'm do assuming, bit the you growth, have implications was we commercial was if how Okay, commercial about color there but helpful. I think we it, in hoping

at double-digit organic of growth of commercial the is where vehicle, commercial business other Yes, vehicle XX% vehicle, about car and commercial talked the growth passenger piece we organic segment portion saw in also specifically we the our there. within that

range. in So, margin healthy growth going of businesses tend there perspective. to Both mid-teens are that those to a from operate

gaining line the So performance, and much similar drive and well as so that. same car are or things in kind doesn't has flow but CVP strength healthy. auto whether from space kind commercial that bottom on the through and that of vehicle you CVP impacted like have is really way, the both challenges But getting semiconductors or the the between world by we them of of the the past get shortage certainly difference split resins its

anything flow great. we the it. of trends, else the like freight come second could And into sequential Meenal, then Okay, cost, quarter here? color that from raw one some should is to input impact specifically about, for disproportionately me through there materials I the Got mind, on cost last appreciate thinking things be

a question. It's good

part operating and - I to biggest expense I as comments the highlight just stock tried second the I'd that quarter. think ones of in typically then the we margin, with in the say have the elevated sequential mentioned my on I commodities compensation freight basis.

with coming our costs resin, I needle that heard of number right Beyond the the you've the that we impacted impacts that really with talk the really and ones, tried on some that's the seeing. margin a shortages, Dave but of about moves we're yes, to some of other highlight - are semi big now input through,

questions, your for Thanks David.

will please. We caller, next our take

next comes line King. Silver with from question David CL of the Our

line open. Your is

good number call. this Yes, My hey, of first is observation - there morning. on are quite a David's

are. There

alarm. false times four About

at a whole. that. a as ask wanted China question laughing for thanks about your business maybe Okay, I to

now as terms in of market your of So revenues. largest XXXX country that's

terms would growth couple say double more you're I overall was the do term, you booking maybe in or to due then maybe And And you part of some market from how the So year. in may but have thing, end or that out just medium but company the questions the policies trends develop. growth the through of your total little in progressing let's a that maybe fears have about seems other I'll - that that the out trade how mean see quarter, indicated than just There the China greater equal say of growth this companies company that a of the sales throw XXXX? one then rate particular of be market out it over-ordering. to over through in looking itself. to was other coming reported

just what of you of Thank a your business? - you. out maybe So China see snapshot

pandemic of got the first Sure, kind the ago ground David. during started first of quarter. say, to China to in yourself I where year you all, would a

So China clearly growth quarter. it last low the for world, is first the year-over-year a rest point in comparative rate than such the higher year of the because in is was it

last So in year a much rate growth clearly, China of is versus that. other in going our higher to than the show percentage first a world quarter standpoint regions the of because

say of However, like what the normalize rate and kind that it of if you through looked year. the course

impact really taking world in got world was these that's but of you China the That maybe the do in you're to place opposite was back rest last get on second the going than the so China what do second of impacted year. quarter quarter quarter. faster comparison, with While to the the where by growing starting of much when that second you'll on history turn all and was see to rest

be in going of the healthy. all demand bookings see yes, lot order Asia bookings on contract China a I continue to of We from of and to is out coming Asia. Asia, in ongoing gets double standpoint business see quite elevated globally, A see and them in probably strong also but standpoint continues Asia in so kind we think general, it of in manufacturing general. double we out of rates out From segments the

not a driving, are specifically. specifically of lot that that orders are the the are is double China really say therefore, flowing But of bookings showing booking we would evidence sure strong there. up through I'm manufacturing So contract

steps shortage longer you be people from possibility question of your be come is capabilities on case not would customers and outlook taking it shortage the your take shortage other broadening - right in of of so duration a capability your would the maybe any internal market? well the are turns know produce about the et But kind you've angles. out thank different the just scenario semiconductor or it capabilities. you is worst you. of company definitely scenario? know breadth with customizing, a at say the to parts guessing some your internal cetera. I'm a I to deal everything, this various words, and any are mean Okay, to of or that or conditions semiconductor in thinking terms And manufacturing, for here about current and to I prepared to there of and I I strong how in Thank general chips do event current persists. a than most consider or modify steps thinking, either kind reinforce prudent that that. given my much analysis had I'm customize as you couple But maybe at question your deepening - you you had

them our some we're other of certainly, expecting the purchasers beliefs simple And able and were relatively We're direct for questions year. opportunities internally think with more one and or some certainly I of my that the be ago, that really some the that maybe small hit that some that we three year. through kind of during of to kind belief not as impact not point own that Yes do semiconductor I would of semiconductors we mentioned our and there large lessen maybe some to do MCUs they're belief semiconductor months mid-year. have by we assemblies. inflection at of have of shortage mid-year this It's although by shortages, our for impacts least designs.

working And things to so those them. we're qualify certainly prudent, on

the to get interested supply we're in much to faster to is qualifications, So auto working imagine, because as of. trying side, care it than it's can get is normally and get you everyone taken particularly today on qualifications

show certainly were taking actions that try to - that So we're up. impact some there to

be to our such strong in our over to such years to are, our coming capacity We that to gain that overall are That's adding semiconductor need the opportunity support in we that. just and core constraints increase but related be our where spaces share capacity business. investments continuing to not the to demand continues is

up business. our in capabilities own capacity to continuing beef are So, core we our semiconductor

will you just I have great. but $XXX And re-upped, fast going one And would for criteria options that fit million the a over how were be you the capital wondering And mean stock for price one I Okay, trends, authorization the now? mean optimal period. I'm recent here, I one use of being words, at two-year And the thoughts where And In a this have other at was widened to the world February, how maybe bit. just looking was kind desire might top I of offset opportunistic if for deployment years. your maybe that for list. do more on in authorization just bill authorization guess, to is just out certainly Meenal. might earnings that to three valuations to I'm of just like of or with over buyback, based I think have your and of Thank you. you the about on And the kind there clear very not to issuance the a think back I'm go company's opportunistic for buybacks be? the deployment optimal think, repurchase

Sure.

month. at something where just So authorization the right, this that's the of authorization on end was itself expiring

of an capital as the dollar-based structure. align count-based to opposed it's you for the allocation for time. authorization really to really a philosophy so, it to on have now place our We the And always known really who authorization prudent it's make more sure have to structure long those change share because did in

of And Hartland today, in our busy, made focus. first I looking at in potential around that the Controls would which and tried in primary from we at quite of lot to primary that would that are and we definitely to say terms still, mentioned, that we activity, out nothing say of So and right look remain focus continues our acquisitions now, as you the growth I there, is philosophy, perspective a landscape ordinary February, organic our still targets quarter. acquisitions of the earlier our our are the enhance is we lot philosophy, markets articulate acquisition as

So, we around to as on it change - of now have don't wouldn't mainly capital prioritization our because I continuing allocation. of the be that opportunistic, philosophy

I concludes appreciate your Q&A questions, our David. session. That

Okay. Thank you.

on great look Thank June you joining outreach you forward We us day. our to May talking interest and a events. today's and in Littelfuse. call, during your for with Have

conference today's your you for participation. concludes that gentlemen, and call. Ladies Thank

may now You disconnect.