DES PLAINES, Ill. -- Littelfuse, Inc. reported sales and earnings for the second quarter of 2004.

Sales for the second quarter of 2004 were $128.8 million, a 77 percent increase from sales of $72.8 million in the second quarter of 2003. The recent acquisitions of Teccor Electronics and Heinrich Industrie accounted for approximately $40 million of the increase from the prior year quarter. Excluding these acquisitions, sales for the second quarter of 2004 increased approximately 22 percent compared to the prior year quarter. Diluted earnings per share were $0.46 in the second quarter of 2004 compared to earnings of $0.18 per diluted share for the second quarter of 2003. Earnings for the second quarter of 2004 include $1.3 million of pre-tax restructuring charges related to manufacturing transfers and plant downsizing activities. The Heinrich business acquired on May 6, 2004 was accretive to earnings by $0.01 per share for the second quarter.

Sales for the first six months of 2004 were $240.2 million, a 68 percent increase compared to the prior year period. Diluted earnings per share through the first six months of 2004 were $0.89 compared to earnings of $0.32 per diluted share for the first six months of 2003.

"Strength in each of our key markets continued through the second quarter," said Howard Witt, chairman, president and CEO. "These improving markets, combined with early successes from our solution-selling strategy and the addition of Teccor and Heinrich, resulted in record top-line growth."

By geographic segment and excluding Heinrich, sales for the second quarter of 2004 increased 52 percent in the Americas, 33 percent in Europe and 82 percent in Asia, compared to the same period in the prior year. By market and excluding Heinrich, sales for the second quarter of 2004 were up 94 percent for electronics, 10 percent for automotive and 19 percent for electrical, compared to the prior year period. Favorable currency effects contributed two percentage points to the overall growth rate, with electronics and automotive benefiting three points and two points respectively.

"Our electronic end markets continue to be healthy, with digital consumer, telecom and industrial all contributing to our strong second quarter," said Witt. "Automotive sales, while down sequentially from the first quarter, showed growth over the prior year quarter across all geographies. Electrical sales have begun to trend up, reflecting continued improvement in industrial activity and the beginnings of a recovery in non-residential construction," added Witt.

"Our profit improvement initiatives are on track as the business (excluding Heinrich) continues to make progress toward our 15 percent operating margin goal," said Phil Franklin, vice president, operations support and CFO. "The sequential decline in operating margin in the second quarter was due entirely to the addition of Heinrich and the $1.3 million of manufacturing restructuring charges. In the second half of the year we expect cost reductions to more than offset price erosion, but we will incur additional manufacturing restructuring charges of approximately $1.4 million pre-tax, mostly in the third quarter," he added.

Cash from operating activities was $16.1 million for the second quarter of 2004 compared to $8 million for the same quarter last year. Through six months of 2004, cash from operating activities was $19.1 million compared to $8.6 million for the prior year period. Capital expenditures for the first six months were $9.1 million compared to $4.8 million for the prior year period. "Cash flow ramped-up in the second quarter due to strong profitability and excellent working capital control. In the second half of the year, we expect cash from operating activities to continue strong, but capital expenditures will also increase significantly as we add capacity for both electronic and automotive products," said Franklin.

After purchasing 82.4 percent of the Heinrich shares on May 6, 2004 for 39.5 million euros, Littelfuse initiated a tender offer for the remaining shares. The tender offer is now complete with the result that Littelfuse purchased additional Heinrich shares for approximately 2.1 million euros, increasing its total ownership to 86.7 percent.

"Overall, we are pleased with the progress we have made so far this year," said Witt. "Teccor is essentially fully integrated and has proven to be a tremendous addition to Littelfuse and, while the integration of Heinrich will be a longer-term project, early indications are positive. Our cost position continues to improve as we move forward aggressively on our cost savings initiatives, and our solution-selling strategy is beginning to gain traction in the marketplace."

For more information, please visit Littelfuse's web site at www.littelfuse.com .

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