Littelfuse, Inc. (LFUS) - Q2 2026 10-Q Summary
Business Context and Reporting Period
This filing covers the quarterly period ended June 27, 2026. Littelfuse, Inc. is a diversified industrial technology manufacturer operating through three segments: Electronics, Transportation, and Industrial. The company serves over 100,000 end customers globally with products focused on circuit protection, power control, and sensing technologies.
Key Financial Metrics
| Metric | Q2 2026 | Q2 2025 | YTD 2026 | YTD 2025 |
|---|---|---|---|---|
| Net Sales | $738.8 million | $613.4 million | $1,395.8 million | $1,167.7 million |
| Gross Profit | $306.1 million | $232.1 million | $560.2 million | $439.3 million |
| Gross Margin | 41.4% | 37.8% | 40.1% | 37.6% |
| Operating Income | $119.7 million | $92.8 million | $220.9 million | $162.9 million |
| Operating Margin | 16.2% | 15.1% | 15.8% | 14.0% |
| Net Income | $89.4 million | $57.3 million | $164.6 million | $100.9 million |
| Diluted EPS | $3.49 | $2.30 | $6.44 | $4.05 |
| Operating Cash Flow (YTD) | $226.5 million | $148.2 million | N/A | N/A |
| Cash & Equivalents | $628.2 million | N/A | N/A | N/A |
| Total Debt | $629.7 million | N/A | N/A | N/A |
Material Changes vs. Prior Period
- Revenue Growth: Net sales increased 20.4% in Q2 and 19.5% YTD, driven by volume growth in the Electronics segment and the acquisition of Basler Electric (Industrial segment).
- Profitability: Net income surged 55.9% in Q2 and 63.1% YTD. Operating margins expanded due to volume leverage, favorable product mix, and operational execution.
- Acquisition Impact: The Basler acquisition contributed $35.8 million in incremental sales in Q2. The Industrial segment sales grew 52.5% in Q2, largely attributable to this acquisition.
- Restructuring & Impairment: The company recorded $20.0 million in restructuring, impairment, and other charges in Q2 (up from $2.5 million in Q2 2025). This included $13.1 million in fixed asset impairment charges related to the closure of two semiconductor manufacturing sites.
- Debt Restructuring: In March 2026, the company amended its credit agreement, eliminating a $300 million term loan, increasing the revolving facility to $800 million, and extending the maturity to 2031.
Guidance, Outlook, and Risks
- Dividends: The company declared a quarterly cash dividend of $0.80 per share, a 7% increase from the previous quarter.
- Share Repurchases: No shares were repurchased in Q2 2026 under the $300 million program authorized in April 2024.
- Future Charges: Management expects a one-time non-cash settlement charge of $6 million to $8 million in Q1 2027 related to a UK pension plan buyout.
- Risks:
- Product Recall: A customer notified the company of a potential product recall regarding certain fuses. The company is investigating liability; no accrual has been made as the loss is not yet estimable.
- Geopolitical/Energy: Ongoing conflicts in the Middle East (U.S., Israel, Iran, Lebanon) are causing volatility in energy markets and shipping disruptions, potentially increasing material and logistics costs.
- Integration: Risks associated with the timely integration of the Basler and Dortmund Fab acquisitions.
Investor Verification Checklist
- Impairment Details: Verify the specific impact of the $13.1 million semiconductor site closure on future capacity and long-term R&D capabilities.
- Recall Liability: Monitor updates on the fuse product recall to assess potential future financial exposure and brand impact.
- Basler Integration: Review subsequent filings for the finalization of the Basler purchase price allocation and realization of projected synergies.
- Debt Covenants: Confirm continued compliance with the amended Credit Agreement covenants, particularly given the shift from term loans to revolver utilization.
- Pension Settlement: Track the timing and final amount of the anticipated $6M-$8M pension settlement charge in 2027.