Earnings

Littelfuse Books A $28.5 Million One-Time Dortmund Fee, Says It Opens Power Chip Options

CEO Greg Henderson says a contract amendment speeds deliveries and drops restrictive covenants as the company weighs its power chip footprint.

Littelfuse, which makes fuses, switches, relays, sensors and power semiconductors, took a $28.5 million one-time fee for amending a supply contract tied to its Dortmund facility, CEO Greg Henderson said on the company's third-quarter earnings call Wednesday. He said the deal gives the company "significant strategic flexibility and optionality" as it evaluates its broader power semiconductor footprint.

What the Dortmund amendment does

Henderson said Littelfuse amended a commercial supply agreement for Dortmund during the third quarter, in exchange for a one-time payment. The change accelerates delivery of contracted volumes and removes restrictive covenants, a step he said "materially improves the underlying economics of the Dortmund asset."

Chief Financial Officer Abhishek Khandelwal put the payment at $28.5 million and called it a one-time customer amendment fee that was "not contemplated in our previous guidance." It sits inside reported third-quarter sales: net sales were $767 million, and electronics sales were $426 million.

Henderson paired the move with what he called active portfolio rationalization and footprint optimization in power semiconductors, and said the company is focusing on higher-power, higher-value applications.

Electronics margin and the quarter

Excluding the fee, Khandelwal said, electronics adjusted EBITDA margin was 33.1%, up 910 basis points from a year earlier. Organic electronics sales rose 27%, with passive products up 30% and semiconductor products up 24%.

Company-wide, organic growth accelerated to 22%, adjusted EBITDA was $226 million at a 28.4% margin, and adjusted earnings per share were $5.79, up 96% and a company record. Free cash flow was $216 million; for the first nine months it was $409 million, up 66%. Littelfuse ended the quarter with $825 million in cash and a net leverage ratio of 0.7 times.

Khandelwal said semiconductor organic growth ran 8% in the first quarter, 15% in the second and 24% in the third.

Outlook and the savings plan

For the fourth quarter, Khandelwal guided to net sales of $750 million to $770 million and adjusted earnings per share of $5.05 to $5.25. He said the company expects about $5 million of 2026 run-rate savings from its operational excellence program, toward a 2030 goal of $50 million, with more to come in 2027.

He said management expects to lay out further detail as 2027 becomes clearer. Management also reiterated 2030 targets of $4.5 billion in revenue, $1.1 billion in adjusted EBITDA and more than $600 million in annual free cash flow.

Khandelwal said the company will be transparent about additional product-rationalization savings as 2027 comes into focus.