DES PLAINES, IL -- Littelfuse has reported its sales and earnings for the fourth quarter and full year of 2005.

In the fourth quarter of 2005, Littelfuse entered into a definitive agreement to sell the Efen electrical switchgear business acquired as part of its acquisition of Heinrich in 2004. Beginning in the fourth quarter Efen is accounted for as a discontinued operation. The Efen sale is expected to close in the first quarter of 2006. Proceeds from the sale will be approximately $14 million, which will generate a book gain of approximately $1.5 million.

Sales for the fourth quarter of 2005 (which exclude Efen) were $115.4 million, a 1.1 percent increase from sales of $114.1 million in the fourth quarter of 2004 (which exclude Efen). Sales for the fourth quarter of 2005 were down 5.6 percent sequentially compared to the third quarter of 2005, due primarily to seasonal factors.

Diluted earnings per share were 23 cents for the fourth quarter of 2005 compared to earnings of 21 cents per diluted share for the fourth quarter of 2004. Diluted earnings per share from continuing operations were 22 cents for the fourth quarter of 2005 compared to 26 cents per diluted share for the fourth quarter of 2004.

The fourth quarter of 2005 included approximately $0.8 million of pre-tax restructuring charges, the majority of which are related to the planned move of thin film fuse manufacturing from Des Plaines, IL, to the Philippines. The fourth quarter of 2004 included approximately $2.3 million of pre-tax asset impairment charges related to write-down of the Semitron investment.

Free cash flow (cash from operating activities minus net capital expenditures) was $5.5 million for the fourth quarter of 2005 compared to $1.9 million for the prior year quarter.

In the company’s third quarter 2005 earnings press release, the company announced a downsizing of its Ireland operation and would be booking related charges over the next several quarters. In addition to the $1.6 million charge booked in the third quarter, the company indicated it expected to book additional charges in the fourth quarter of 2005 and the first half of 2006. This was in accordance with FAS 146 which requires that severance charges be amortized over the period between employee notification and employee termination. On further technical review by the company, it was determined that these charges should more appropriately have been accounted for under FAS 112 which requires all charges be booked at the time of notification. The effect of this change in interpretation is that all severance costs related to the announced Ireland downsizing (the $1.6 million previously booked in the third quarter plus an additional $3.3 million) were pushed back to the third quarter of 2005. A revised third quarter summary income statement has been provided in this press release, and this revision will be reflected in the 2005 Form 10-K.

By geography, sales for the fourth quarter of 2005 were down 3 percent in the Americas, down 4 percent in Europe and up 10 percent in Asia compared to the fourth quarter of 2004.

By market, sales for the fourth quarter of 2005 were flat for electronics, up 1 percent for automotive and up 16 percent for electrical compared to the prior year period.

The book to bill ratio for electronics in the fourth quarter was 1.11 to one as bookings accelerated late in the quarter.

Fourth Quarter Operating Results

The increase in Asia sales was driven primarily by strong demand for consumer electronics particularly in Greater China, Korea and Southeast Asia. The decline in the Americas reflected lower electronics demand, primarily for telecom products, partially offset by strong electrical sales. Sales in Europe declined due to weakness in electronics.

Full Year Results

For the full year 2005, sales were $467.1 million (excluding Efen), down 2 percent compared to the full year 2004 due to weakness in electronics, primarily in North America, partially offset by increased electrical and automotive sales. Diluted earnings per share were 78 cents for 2005, compared to earnings of $1.59 per diluted share for the prior year period. Earnings from continuing operations were 73 cents per diluted share for 2005 compared to $1.61 per diluted share for 2004. The most significant items contributing to lower earnings in 2005 were a large drop in Teccor sales with the associated negative operating leverage, approximately $8 million in severance related to the Ireland downsizing and other restructurings and a higher effective tax rate.

The effective tax rate for 2005 was 41 percent compared to 34 percent for 2004. The high 2005 tax rate reflects several factors, including the limited tax shield on Ireland restructuring charges and the repatriation of foreign earnings from lower tax jurisdictions. The tax rate for 2006 is expected to average 35-37 percent, but with significant variability from quarter to quarter. In future years, the effective tax rate is expected to be below 35 percent.

For more information about Littlefuse, go to: www.littelfuse.com .

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