Littelfuse (LFUS) 3 May 232023 Q1 Earnings call transcript

Good day, everyone, and welcome to the Littelfuse First Quarter 2023 Earnings Conference Call. Today's call is being recorded.

At this time, I will turn the call over to the Head of Investor Relations, Trisha Tuntland. Please proceed.

Good morning, and welcome to the Littelfuse first quarter 2023 earnings conference call.

Dave President and and are Sethna, and today Vice Executive CFO. me Heinzmann, CEO; President Meenal With Yesterday, we presentation reported website. a the copy results Relations for our our Investor release first earnings and of slide section is in of available our quarter and webcast will be our conference available call today's of on A also website.

two disclaimers. to Please slide advance for our

XX-K more discussions will any include information. press may about and risks significant review that today actual forward-looking yesterday's statements could for expectations. to forward-looking Our results materially uncertainties. and assume release and important risks Forms to update our involve obligation this no detail from statements. These XX-Q We Please cause of forward-looking our differ

to to financial measure of today GAAP A our earnings remarks is provided refer our in Also, of available Relations non-GAAP section most Investor the in our website. the comparable financial measures. measures release reconciliation these non-GAAP

will turn the call over Dave. to I now

and Trisha. today. you, us Good morning, thanks for joining Thank

Let's start with highlights on slide four.

delivered and results electronics environment. first teams execution tougher resiliency our of Our quarter continued profitability. strength a sales model of overall business above and EPS drove our within The global strong the adjusted guidance strong our

to global growth business for led themes quarter, progress securing the significant long-term our teams commitment connectivity, and integrating serve and sustainability, execution wins, customers. to of new profitable our our their to want During meaningful then thank made the drive structural strategy we acquisitions global I and safety. persistent

on to Moving five. slide

heavy look relationships This our shock growth our eMobility end-markets protection board Automation industrial particularly we on its announced manufacturer electrical designer and with charging and a for strategy in with in a is to slide higher-growth six. capabilities to Development and consistent capabilities Europe, As and the expands with growth our leveraging acquisition continuing five-year industrial we Research growth growth diversifications focus drive of underway combined safety acquisition Western in in February, off renewables. like and invest integration forward electrification. our further strong to of infrastructure, accelerates our on devices The and OEM with shown Limited,

business with we like to and Starting drive partners, I Before start our as we seeing. market wins, their with to quarter. customer channel the we dynamics see are electronics inventory expected, get into during the of continue reduction levels distributors the would design

expect this POS at third levels the will remained reduction into stable. continue current We inventory which quarter

our electronics Our continues one, reduced to book-to-bill largely to times. run below due lead

within to partners Our inventory hold Industrial targeted distribution ranges. normal continue

have consistent and We said the with relatively XX-days backlog we a end-market quarter healthy industrial demand second what remains ago. for

soft applications end see infrastructure. supplies, and personal renewables, to continue end strong But electronics electrification We and demand like across remains demand vehicle high-power safety, and medical, and automation in vehicles industrial consumer-facing charging power of market markets.

and unwind at and distributors we solid vehicle continued inventory across we long-term for commercial bus. outgrowth positioned and handling, content and in material with and in growth we electrification for end-markets, quarter, transportation continue Xs the long-term on double-digit wins content and Vehicle ongoing and Across markets, markets, based In truck expect applications. commercial electronification electronification. design equipment, saw our Across at vehicle and saw OEMs heavy-duty portfolio to Tier during the product our we outgrowth Passenger electrification significant construction are agriculture

and particularly this varying navigate first am businesses. of trends we strong period I of successfully our proud as performance across quarter our end-market rebalances inventory

and company continues our outlook. targets. and financial to financial deliver long-term performance additional provide execution with strong margins global color results our will Our Meenal on consistent

electronics the we industrial, to transportation, end-markets quarter. on Now, the opportunities serve. design-wins sustainability, of convergence during let's is The propelling meaningful move business connectivity, safety and first and across

solutions. in a which for is innovative themes, driving unprecedented and play capabilities the reliable and technologies our advancement demand these diversified significant Our role of

of supplier Our driven innovative to industry awards solutions, top customers. best-in-class as a by received this quarter unwavering recognize commitment our us

continue We drive will the long-term growth. which on design environment, our rich to capitalize

a storage Within play our including enabling our the globally C&K continue customers. supplies equipment, end-markets our we won industrial Industrial industrial power business wins product based a application critical strength for seven, safety ability Switches The product energy role diversity features. of from business slide renewables, high-power and serve the on significant manufacturing business Automation sustainability business for highlights of In applications on to offering Within our secured and our for to captured our acquisition and expertise related solutions, systems. wins safety. to those

commercial In portfolio. business won relationships broad and HVAC, we deep with our

business focus continues on customers with and capabilities of applications enabling on the content rate wins product leading around our to based grow expanding sustainability safety. new intensifying Our and and

transportation our eight. to end-markets on slide Turning

extending growth customers. global for within position are investments Our our leadership

collaboration and new sustainability, focused significant business. connectivity, joint safety Our on drove

passenger an in battery With In based onboard management products. high towards and of business sensors also voltage to support, systems management. in of continue new within OEMs we major business with engagement, chargers. we our the expanded with early electrification significant vehicles, power electrification ongoing applications, grow breadth and platforms on technical focus won secured We

business telematics and Within captured comfort we and in electronification, convenience applications.

to We on business applications in our low traditional our voltage proprietary design. technologies superior based expand also and continue

outgrowth. of Our design-wins and continuation the opportunities of pipeline long-term support content business double-digit

construction In and electronification digital in rail In control high vehicles we GPS power vehicles, We Embed we trains, equipment win we in switching voltage in our for modules. won and electrified won won global converters. OEMs. vehicles, the distribution, traction business and In systems, for for business fleet from commercial capabilities with business vehicles, TEGNA major business commercial delivery Carling and battery keypads. power trucks, of management trackers delivery body new two-wheelers to leveraged in acquisitions expanded and with

vehicle trucks long-term increased our and product in material our based global commercial heavy-duty we handling on markets, quality. broader content In and support

applications further newly and and Western our forward power Our charging our our business. components, secured upward with Automation long-term of range offerings, electronic differentiated our growth Products. off-board in charging expanded to capabilities, significant such We products acquired infrastructure, engineering semiconductors, our fuses comprehensive as look accelerating with

investments will our in transportation within applications confident are our growth for leadership. strengthen market We

Moving and drivers the are on electronics connectivity, Sustainability end-markets. nine. to and for slide in safety growth

and towards lighting. responsiveness, our product one push water reach, business global in efficiencies, and ongoing is the With LED meters features,

As and it broad connectivity won us from addition in infrastructure, our products technologies, electronic and Switches this support to business including supplies home portfolio, greater communications devices. relates C&K technical of requirements, power for

are Our of products safety. The on connectivity, life and wide business well-positioned protection secured a and sustainability, is lifesaving medical safety robust business are expand to vital we devices. content our of as within applications electronics we human to focused pipeline and critical extremely across of range opportunities

geographies. of wins and end-markets new represent Our business diverse a very range applications

engage will collaborations organic accelerating fully are development growth growth. product engineering and and our long-term our coupled customers’ business design-in activities. As teams, new next-generation with with We sustain acquisitions enhance from our activities, our we expect the

turn now outlook. call and to performance will I Meenal over to the financial additional our provide on color

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

foreign down versus year slide the range. with above down prior pleased Revenue essentially performance acquisitions XX. million quarter a with was X%. first last X% organically growth was start on X% of and of adding year quarter, sequential first $XXX Let's We're for finishing and earnings reducing X% in revenue the our exchange with and was it flat. the versus guidance our basis sales Revenue

just EBITDA realizing and at electronics operating drove margins target on benefits our performance, XX.X%. margins diversification, range, GAAP above finishing XX%. portfolio operational execution of from operating strong high-end environment. under our finished price of and were despite were target margin our continued XX% challenging margins realization, We Adjusted adjusted efforts the the ongoing range the

diluted EPS and GAAP-diluted adjusted earnings $X.XX share was was per quarter First $X.XX.

expectations. Our the up GAAP effective adjusted prior was rate flow year from generated and within $XX $XX cash free the quarter, XX.X% in period. our cash million tax effective XX.X%, tax-rate of We finishing and flow million XX% was operating was

to inventory our of supply certain some investments many areas. challenges in continue reducing continued We balance chain while moderate customers, inventories serve as to

in we expect of our back drive part As to the generation per trends, typical stronger year. the cash seasonal

the During below the X.X we at times times, the with we net-debt-to-EBITDA to times Incorporating of Western our quarter, target leverage acquisition, X.X low-end to quarter the Automation range. ended this Littelfuse. team welcome X.X

of on $XXX strong over on hand remains ample with facility. and Our balance credit capacity available million sheet our cash

are to while returning strategy We disciplined our also prioritizing investments to shareholders. capital allocation well-positioned capital continue our for growth

quarter first XX%, overall and XX. year's the organically. largely impact sales were XX% The from expected X% margins Switches. up rebalancing, EBITDA difference while XX%, slide Electronics from on sequentially. down starting last margins to inventory Sales just channel highlights, move Let's over operating with Despite at acquisition approached segment both of C&K finished adjusted

product above well historical our a and levels, discipline, content target execution. We top-tier growth, drive operational pricing of continue margins to

our segment was X%, Moving XX. X% X%. organically. and down commercial down vehicles growth vehicles down Organic Passenger Transportation slide to were on

were inventory sequentially, EBITDA expanding over XXX to customers see basis and mentioned, basis the Dave As XXX continue XX%. quarter. grew margins distributors levels while their in we Operating a nearly points reducing margins adjusted points to X%,

realization actions some footprint further margin drive and taken We process cost the an We're to adjustments continue of to have additional drive expect continue reduction in improving to to and business activities operational current also environment. will these trajectory. align price

drove XX, of organic quarter growth strong slide On segment our another market with sales Industrial XX%. above up

and margins above prioritize versus automation margins such adjusted year. and to renewables, XX% and higher prior EBITDA energy Operating significantly storage, safety. XX%, improving continue finished as industrial growth above We areas and sequentially both

first we thought forecast trends to XX. slide what Turning to Market the on similar the remain through quarter.

passenger across remained and growth third inventory markets continued vehicle continuing themes with Industrial electrification the into and across commercial expect rebalancing markets. Certain expect modest soft, end growth more we We Electronics distributor electronics and quarter.

expect segment. affecting a We modest distribution inventory customer Transportation our and continuation of reductions also

in range With we last the decline this the and decline segments, to growth to Industrial partially of sales Sequentially, $XXX project offset expect backdrop, a X%. sales total by sales with across across million we versus At flat be organic of an Electronics. we second Transportation in $XXX year quarter expect our million. midpoint,

We assumes range be $X.XX tax adjusted of $X.XX, to to XX% rate. the a in expect EPS which

$X.XX includes expense retirement higher provisions, second to to due quarter approximately guidance stock-compensation of Our also EPS. equating

Slide the full XX news of includes some XXXX. year additional for

XX% rates. to at neutral We to our unfavorable impact have exchange sales EPS a foreign exchange expect on and impact about current

long-term our margin XX%. our within company XX% other expect we And expect We million to $XX amortization now year maintain of full operating to items, range expense. target modeling in average

million continue million The to of current interest sales rates, to rate strong for invest a ongoing capital And expect it are we and to business And model a of expense drivers in our our $XXX performance. our expect we $XX resiliency at interest we $XXX value and year assuming full earnings expenditures. significant noted diversification portfolio XX% approximately and million of were as long-term our in quarter, stakeholders. driving QX tax last of

ahead focused macro-environment, Looking of we us. broad on execution to the see array our uncertainties what growth for to market choppiness, through balancing while current the the control, we opportunities in continuing remain can of we invest

the us Thank you around and and our that, trust our I'll stakeholders teams to day. with it comments. for some to partners to commitment our for to for world back turn Dave final And for every value your driving

Thanks, Meenal. slide we In summary, off start on a to this strong year. are XX,

and Our model resiliency strategy, our performance delivered within of the which to the last sales speaks combination XX, business environment growth strength years. Littelfuse of the has of dynamic over XX double-digit and the this earnings X, a and growth

have in our we profitability. time, end-markets, the resiliency business high-growth and our this diversified and Over which technologies, of presence geographies, leadership our improved has expanded

successfully Our our to experienced through teams manage have environments. dynamic playbook honed

value some near-term long-term continue for strategic we stakeholders. our deliver diversification, confident of manage for are our will growth challenges, through and that we all to investments execution, sustained ongoing As market

with I Q&A. back that, call now And the operator will for the to turn

Sure. [Operator Instructions]

cash $XX period. year million of free in was XX% quarter, cash flow million the from $XX and flow up We've prior operating the

with Please question first Buchalter will Cowen. from line the ahead. Our come Instructions] go of [Operator Joshua

Josh. morning, Good

Good thanks. Thank my and congrats the morning. on results. for Hi, you questions taking resilient

clarify, quarter the the to third that some for segment? I Dave, a in you comments healthy your quarter. we second correction going [Technical situation Electronics should wanted like, levels. segment. were last Thank in your be on you. was into to expect, channel But mentioned made It the there First, clarify in sounded inventory Could that down Difficulty] third Electronics the and you you guess, just I

Sure, Josh.

normal talked the of basis. in The partners in operating obviously distribution there. would That month-to-month that we've the a we side about all declining elevated almost business categories it that our news remains and ranges is on expect. and So, good is our of above our Electronics kind

take reduction some inventory the kind expect bleed the channel, happening that news that remains is our will though do of as the sell-through We expected. to POS, So, with good The pretty it is stable. in time distributors down.

through to going through and levels. current that POS into it's So third we the kind we or kind of given way of do model work our take quarter expect us really that the that to

still there's sort healthy Okay, more takeaway? so getting of some the do to is work and

they into and gave it knew kind it's quarter Yes. continue behaving first we built of the the guidance of is We We've modeling kind for The were that second down. to that bleed into our the elevated. will good quarter and as expected. news

it. given essentially expanded basis you you. margin. give there? And margins walk-through flat any follow-up, for costs ask and able the commentary firm, environment? remains particular, It and and wanted there to to update results that drivers did about your Thank pricing Okay, along Thank the pricing got you hear to XXX comfortably pass you. you're my higher we'd can the still sounds on gross like of you input over some I points. mean, and I Can revenue then in love

nice really continued our around the above there. elevation market volume. about of part across channel high-teens historically some margin well good good that We're midst despite strength profile. and portfolio, have grow that even our through some and profile and uptick about. margin, Yes, an industrial balance in the electronics also as of on continues the It's as we've as business rate inventory we've business, then we Dave talked to good as at the Sure. and right? of targeted talked some The margins gross margin It's coming on rebalancing

hop queue. you. I'll back Thank the in

you. Thank take Josh. our please? Great, next We'll caller,

Please line question next Williams go Benchmark. of Your ahead. the from David with comes

morning, David. Good

and the execution on solid questions the environment. this taking congrats for Thanks navigating and morning. good Hey,

Thank you.

detail maybe so And to about of on footprint the what first you incorporates? more Yes, there wanted you I ask, if is adjustments. just the could give thinking, curious kind a maybe talked expectation what just us and that little

of across are it through portfolio whether real -- the Sure. little sales more of look think more that that really estate us manufacturing opportunities have. doing we of just across we've there non-manufacturing to chain the the time. for like are segment David that our acquisitions with are size, the it locations, a a more offices comes pretty to years, sites will Transportation business, it's We acquisitions one supply given where over what we our the the planning, when given easy. at versus when we comes take look consolidate, take end at areas We little number And with few overall been at the synergies about past

So, broad acquisition acquisition, especially with made, our we that Carling large pretty pretty footprint.

I'd normal again, that So there's the some also activities that we're about and doing at there. line talked our -- of of business movements look business. we grows, we ordinary product we as some And call evolves that do, it course then have, I business course

through? of magnitude terms would in Anything to of savings flow the Okay. you expect

overall segment We the margins. progression Yes. Transportation it's to of for it -- the about that sequential talking part we're basis. margins on as improved relates a The

where this not quarters, of We part going still, improvements make not but in to needs improvement as going as that. expect a keep we continue it be, the we're through to to

then improving you just in of about kind in seeing to and one out is, just U.S., real of maybe where there? Asia levels anything the Europe particular there terms anything are or Okay, of and last Just greater And inventory? quick great. demand thinking call one geographically

Yes.

a just I on color think, that. maybe little

so was consumer-facing the and rebalances and of some during sorts are we've things at that are for builds and most car look soft which electronics, in about as that pretty Asia that's at, if a the obviously, the well. rebalancing, couple that through end quarters, Certainly, was quarter, there amount. the market some some inventory dynamics our was by we're as by talked end-markets, like the soft. look of China quarter as kind were going down I first region of to goods, of think inventory you continues And first the driven last you of If the that well meaningful be in softness shifting. Also

far that America driven organic actually of was most most. down was Asia So Europe as region from by being as but And really the up much down that inventory the us rebalancing. for not by Asia North was was. an was near also standpoint.

some in growth Europe. we So saw

much. so Thanks

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

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

morning. Good

we right morning, what continuing well Thank course up think on Good expand extent to of rebalancing with inventory that thinking passive questions. sustainable? thanks hoping where start subsegment passive of on you and or pieces the the the piece, seems is Trisha, happening. Dave, semi terms in I'm semi It so like drill seeing we're you could is for to is the taking the now just down semiconductor versus just and you. hold Can electronics, is products.

Sure, that analysis. and moving lots of of that kind world and that in pieces

area a over has and quite the passives has ago, is The our more our power strong. business our over The not been that go to through a and semiconductor to with rebalancing years. of to so challenge a can protection rebalance held little of now continue has couple rebalancing. area had And had certainly semiconductor there in quarters begun portion that been portion last where cycle begun mode. of the businesses inventory. inventory be an couple demand strong on that very there go That's of That into an continues

if world, mixed pieces very bit in so continue a case, And light semiconductor moving there and bit the are bag a in strong of that in inventory, a we position that. to anything power have within

additional be transportation similar get to color vehicles. commercial great question on versus car pass would some And then for

market? vehicle commercial latter, the at in you destocking mentioned especially I think the distributors So some

news behind to couple think but we in There side be we're The seeing part, car largely bulk in car pass the might the Sure. the through passenger a We've of of noise, the passenger continue we think pass side it us. the quarters, us. in of quarter. -- inventory the rebalancing good the first but the car particularly that behind business, for is in in we been see a the last of that's of in that's business, bit little most bit

heavy. inventory customer the and well saw an a declining to been expect that inventories decline quarter have over or -- is do correction area quarter the as in where have vehicle we that two. distributors bit that we in end-customer first Commercial and as balances certainly inventory to continue And next

margin for more. Meenal, just I on thank great your should be of perspective versus is thinking And one initially. are in I'd can get still you. improvement expectations. what we on picking sneak margins But Sitting double Okay, and your some in margin back improvement Thank that that. rate in then we're performing and half? track for is in early the the about that Transportation digit consistent if May for It with you up sequentially to your seeing that margins? how expectation here the be time

Yes. question, Great Luke.

right? the taking. course, headwind our bit us that's of on a on levels, in comments to say is two Here's a questions. going sequential for talked what's that the that, earlier what one some pieces market I would would there with say, then impacts of there the equation, actions our I volume, going of that improvement some We there is highlighted of production about in we're that when Dave the happens. is and just destocking and

feel going the low the general projection to when good XX At markets we so the out that car quarters. bit of still we quite us for comes -- projection I'd sometimes headwind about back in things there, remains few in lower can in the just million then say same a still a And car feel a focus while build to XXXX, the time, market, control. on we automotive that's than are a those it's it we of bit

areas. that the whether several I work, supply-chain, talked So there bit things we're are and a consolidation about some of it's little doing. other manufacturing, earlier footprint

which us. to helping we on forward move continue is that, So

progress of with to and the that that our in then price made several good comes pointing talked then perspective. from it and and select overall commercial when bring price and synergies added done the I've continues gotten with be areas business customers to about collective as year that after do going table discussions that we price past just vehicle still looking to in continue there's that we're both value there we've to we're and when growth we've the we terms good Carling in past opportunities and at quarters we've in of think leverage out the and a the about things we've

it that into the feel to trajectory going good have So, coming quarters. we the still about expect

there. leave you Thank that. I'll for it

questions, your Luke. Thank you. Appreciate

will ahead. [Operator go Instructions] from line William the Our with come next Please Kerwin question of Morningstar.

morning, Good Will.

America ask And or the competitive Thanks your term curious also, bit then entering electric Europe? in all. from about the landscape at OEMs of for I'm you those I hoping and do maybe Hi, versus a Chinese risk in to positioning upstart good morning. North competitors longer of electric with Asian the vehicle how in Asia? out disruption was China. Hi, question. little look vehicles, of the space particularly a you one view how

We've side of talked overall news significantly in things. XX-volt this XX-volt EVs, where us the larger for we in an remain content in good is intact. the of The the the past the systems than side opportunity EV in high is -- voltage about largely Sure.

high the voltage expect that business. open in the EV, side about the to we do continue. strong and the We see fact shipping low our of side as We've voltage have don't at in great into market design-wins that and or progress position We will having all. expect the voltage on do getting therefore, don't voltage high same the that's shifting the changing side side. So the been low in we share we're and

out of electrification. And aware not who expected. the play We're of kind that people we're only as seeing are

on competitors more So there that. focused are

voltage protection lower expect be So play leader therefore, still side including that and the we're electrical the we the share, seeing high in out. expect that market we to in systems,

multinational OEMs Clearly OEMs has OEMs. versus BYD difference like local there shift about very a to there. the asked strong working and the you EV share The specifically, customers on local winning is it, between others. good gaining very and news meaningfully been Geely strong have pretty we and the relationships side, with Chinese China and

because local involved negative Chinese. us many, our been opportunities So them And big success we're for multinational of to shift shift not with with We've the in seeing from many for the a we're to continuing have them. there years.

you. upward but thank light comment from if bit. over then past Excellent, charging you Western quarters. And of up, electric of on don't vehicle couple Okay, And a the heard a the about infrastructure, acquisition sort station pivot little follow plays could my curious it, charging, think that it too we've of sounds the like opportunity much into charging sort

we just So update curious there? strategy the if an on get could

it's company in Automation right. they're strong absolutely a that made, strength acquisition business EV No, are applications particular great manufacturing off-board XX% Western question systems. being OEMs into of have relationships The European the we you're revenues Yes. charging Europe the absolutely, in are charging into and that with so and these that with and over a sold they designed European

design certainly strategies modules that off-board that builds portfolio for in of was that us So the into we a out components of and that it charging. broader one acquisition can

of through lot about customer our technology where OEMs it strength We're with North great relationships in that in Asia have there the offering excited strengthens remainder a and and opportunity the Europe of it in success base, broadens the we we're America we Automation can get particularly seeing the as well. and our to Western because

a meaningful So opportunity for and we success some already we're over think us time that. with that's seeing

good I'll you. jump thank but congrats on into back queue, Excellent, quarter. the a again

Thanks.

take your caller, Will. our We'll please? Thanks, next questions. Appreciate

King. line the Please question David comes Your next ahead. with CL of from go Silver

David. morning, Good

you. morning. Thank on of segment, but the quarter some Electronics think of past. you're is talked just Hi, My first question current of described operating has maybe the I optimal if I mid-XXs margin. I focus far kind discussions in believe, and term level just variation XX.X% as was to on margin that sustainable the a from Yes. Dave this is environment good kind you've “sustainable” yet say, it, margin, I being, a as the about a long would of

very that one guess. structurally let's talked maybe the So are just performance is two sales Is current buffer environment, the inventories than you. in I current wondering with reflection happening were broad-based seeing meaningfully some this there it's or the or something let's is But are cycle? about some liquidation you earlier the not to, when and a one higher-margin and that if as just margin Electronics that strong about steady inventory in of overall that of just POS maybe you I'm you in are there across things. background, sales, that portfolio, the specific Thank are sales more would structurally pandemic your say say built-up say, phase the the

Sure. David, it's Meenal, bit. and maybe I'll take a this one

in areas. of price the in some margins that downs. that year quarters with other and typically had we've very you after because Combine seen we've we that past because years, last that we've we some saw with of just -- very strong in industry price stars aligned, -- have typically the strong with we've see used volumes few phrase, and favorable mix the seen I coming the some the margins. along had through where Electronics years, all with in very Every gone price where inflation been right, and So talking realization couple where some we've an

ago. over I'll it to time, finished this I a days not rebalancing level of stay for XX%, see we the this, some better the in side we anticipated and the areas, same we Electronics year, of sustainable so bit our channel XX call versus those little I quarter at the we expected itself a as a really had Electronics saw also more said, into across XX%, of going stronger on things the little we space. said rebalancing a that really that semiconductor strength bit couple industrial than margins while of At was expected, Dave -- business the highlighted

a positive. So that's been

around years the margin we've profile about execution, being that the talked past being frankly, work, say upper-teens I over elevated good operational today. and And that level, over talking to to footprint XX%, and we that say, for used really then this all we've feel talk year for margin et XXXX, so I'd about XX% I'd I'm has done it whereas now cetera work few over about the added that keeping average margin some about

Okay.

I that. for you of things. Thank a great. question M&A the about maybe Okay, side had

months. about So but everybody asks I C&K integration you you're bolt-on and ask consider one Auto maybe bandwidth guess your funnel, two what maybe over the currently would Western project acquisitions, integrating your just bigger like I bigger here. than about its And capability than the less or XX I would to type past,

So to have based maybe have deal powder particular capability theoretical to net your to on in or you're internally integration Thank do pursue you at time? mean, is discussing a you dry of overall handle you practical words, kind debt-to-EBITDA, you. targets. want thinking your that just are I or when to you a continue projects teams here on opportunities a you other capability there also with some or that many additional limit integration how

drive part time part to key growth sustained our as over an business Sure, Clearly, for of is organic of a ability growing thanks. well. growth enabling and Thanks, David. and the strategy M&A as our

we view strategic. very So it very,

the And foremost, acquisitions of a straightforward made to location meaningful have the there. The and strategic couple bolt-ons through ride fit one seeing lot business, much some a a our businesses. to takes that. first Western last is type from that like them very good way So, months we strategies we M&A good over are work simple, of Automation of within opportunities although years, we're into some a that's fairly our at business unit pretty quarters and news of is straightforward. C&K or complex more our and into acquisition several is bit kind both more look progress

whether the not. step piece on the is, bandwidth do units on I by thought As organization say or overall, they're absolutely our analysis the of back themselves. our we about led what And business thinking a would as process of I acquisitions

and through it's they're a acquisitions our take a the take business of Difficulty]. it's as electronics have there that bandwidth I before we bandwidth right right ones but working we work say C&K, to company, in position may [Technical another have where challenged. So where there for like we bandwidth, a is if instance little lots units, challenges feel which quarters a piece take have through a comfortable on good along and might strategic overall of more our other additional reasonable would we kind is couple additional it and of now with can On of business acquisitions units, on come be and additional it,

I good. you. Thank it. Very appreciate

Appreciate your David. questions,

please? We our will take caller, next

question line comes next Oppenheimer. ahead. from Schackart Our the of go Patrick with Please

Patrick. morning, Good

question. Good morning. Thanks taking for the

Sure.

describe You Can resilient stable expected? durable how Dave, as year? through Electronics sell-through portfolio we more you describe results you sell-through. Would mentioned you of view the than resiliency. overall as move mentioned you And the characteristics rest

Sure.

the of and through Let business sure, put like than resiliency for out and at me built even resiliency with start years we serving and we've actually ago the improving that the we're cycles model went kind and question. of markets look think a step correction company, the that kind And the we things markets maybe position we the whole we're is and technologies that applications that. better the of of if serving when five back us kind in were of we and diversity probably

resiliency So we business continues think of good. to be quite the the

it We also think improved. within electronics the also segment, has reporting

portfolio if in extreme of into fits a which as sold and of think electronics the percentage that industrial more cyclicality. balanced reporting be As being is the segment, semiconductor so to not little applications, quite within Meenal a power kind tend you our high that's mentioned, about that

the now. from seen and balance regions that of And now things on there. be we going that's of think the to call. across markets the on six out stable. in helps moving watch what I of or hard little visibility kind very up POS quarter Then be a reasonably that have don't that's from a serve. we to and carefully. to That's But stability it We So kind we've months that, tremendous that hold

to at good feel if So to our rate. see down good about then we a drive inventories continue stability, that we pretty ability

maybe think results if what And dynamics transportation and you wondering for versus just line And it's view internal largely weaker you a the and the thanks. you follow-up, the to elaborate conversely, top into or how quarter? on needs Okay, expectations of issue? to the resolve heading there of market inventory maybe happen trends could the some an

Yes.

quarter passenger of transportation carve there's which but the our piece at largely let's kind out passenger of our passenger a it of look segment, segment. I we But some out our and it, of car the car about of the revenues the have of when mostly to all, outside about you're think talk business, applications First of that I to meaningful sell our They segment, into we about. even industrial kind remind you of transportation electronics passenger talk out car come segment. car fall everyone of we when side asking of that

a of have what our are, look we we talk pass take are we're And with how to about car. at overall at content look when if that and our overall growth within and portfolio build. at we So reductions back kind we outgrowth doing we car, levels of step negative car on segment, Transportation we and small is and across about as a impact, which overall, had identified, X% out a we take impact company, compared pass we inventory at the a our FX, still, to look if story

the it there's of clean the and right for outgrowth feel pass-car. good on well. opportunity in also vary. an inventory of and not impact that's story in as other parts on enough. content it's -- unfortunately, it. Quarter-to-quarter, still But can has now work that the That going business It up we Certainly, about shows So reduction inventories. us

is it that outgrowth it reinforces remains continued story our robust. what belief So our does

from last years, to continue electrification extremely side three If our of be with emphasis, car. over the remain you wins look pass robust heavy the and confident the outgrowth. we've course, double-digit had design on coming We

as confident remain we look forward we well. in outgrowth as double-digit So this

color. pass for Thanks I'll Okay. the it on.

Thanks, Patrick. Appreciate your questions.

from [Operator ahead. Instructions] Cowen. with line go the of Our next Please Joshua Buchalter question will come

Hey, Josh.

to me passive vehicle, letting as the follow-up. hop about for queue. in the replace thanks potential low some industry players One heard the diesels semiconductors of such from few in electronics power We've the voltage in Hey, for relays. a back

a known in of well I one, wanted business business see passives taking including but you both guess, you this for to I have of given you've portfolio of is your got hear, on you're that? And Given MOSFETs, power this the what fuses, impacts on guys potential are sides semiconductors, place? longer-term also your two, that a transition

The got it into question. kind divide good these within markets. It's up of to in -- applications and Sure. pieces

And so state many if in ago, applications. pass-car in gone low-voltage of used packs transition to mainly solid right? components protect that did There protection side the low that has cellphone, And those that don't back we to the were which to you the shift of amperage used in battery in there sorts years some relay, a go replacement is business be produce. a a passive for to

everywhere So there's fuse. kind there's of a a relay,

very small combination. That a today. to So ranges. happens of amperage on movement our business towards some solutions there small been relays fuse There's solid be state part

that's, which to applications, our value. really XX perhaps. amperage amperage mid-level amp device is maybe a kind helps of be in high of over side the growth, content that growth even because voltage coming couple small in as Will is in voltage to automotive increase amperage of a going pennies small the for kind opposed very from and the device, of the of say, But a where all higher low significantly a the years, amperage device

area. some of types of the coming away products things. capabilities as seeing side, to growth from applications and semiconductor So the where There an is think of for towards medium-high have we're and midrange in high-voltage that's the time, side able may our solid And be opportunities future would support. state focuses is not opportunities certainly may potentially some move we power to upper as relay over capabilities do be power. that the that kind there power bulk to shifts cost in in from our we in We that area of range on do to of improve that, bring

-- you all? you if in the let color -- guide, follow-up, I there, Can how all missed I second the included at was Automation Western can. Appreciate Actually you us quarter if if I one did Dave. much but this, can apologize more know

I about in overall, business annualized about $XX the million revenue. talked Yes. being mean, we

there, mid-single So revenue you it's can think in digit pretty of it but as small.

Thank you. it. Got

I appreciate you.

caller, our take of We questions, next are proud please? Josh. you. Thank We'll

ahead. comes go David Benchmark. line Please question next the Your from with of Williams

Hi, David.

let thanks really Thanks. for another question. me appreciate it. Hey, ask I

of half. terms customer tone a Just and the we It perform the little destocking of more the than sense some half trend that get a be have if better for expectations second a of wanted maybe about to kind of you do things does could perspective. that second the But approaching in half where maybe a think levels kind little thinking second kind be like line could levels about may get a expected? below normal replenishment macroeconomic seems opportunity above pessimistic overall an been

that limited. say, the pretty is in The second I thing is David, our visibility half would first

dynamic pretty we're that days. it's a these So environment into selling

given the haven't half. as on a what really we second color lot of So we see

of will the rebalancing that view inventory hard we handle that. into get half. Just good on second to believe and a Clearly, continue

we much as months. like it's to to So to some back I'd and few think done, there as next -- over progress got still that, we're make through the

the And that expect the we half back so do therefore, into of year.

reductions, You're inefficient channels, build absolutely reduce process. ability and inefficiency, the that right very the is to the distribution inventories inventories electronics taking inventory then and a

any end bottom to off need the show for we levels when we the bottom. markets happen. get and That bounce begin improvement, inventory the hit do a if sure, to where them see be to of signs and we'll of So will

this to Just call I think when point. difficult at will it's happen, that

you perspective, do would do the very that's being they're rational think think see? helpful. guess where from customer to you get they're trying below or that No, that's to Okay. depletion you a inventories falling in But I typically of level

No.

kind of I situations and gone think behavior the we've of a they're it's And as I've and being where kind normal is pretty through as expected. lived unfortunately, of through expected. rebalancing inventory rational, and these lot

the Fantastic. certainly thanks Well, it. I appreciate for again time.

Sure.

on your Oppenheimer Xth and call you look Growth Have in Conference. May appreciate session. today's Media Littelfuse. questions, We Thank Industrial follow-up and joining Cowen day. a That your the Telecom with concludes Technology, and our interest We to Conference for speaking May TD Sure. you great during us forward XXst David. Q&A