Bel Reports Third Quarter Results

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Bel Reports Third Quarter Results

JERSEY CITY, N.J.--(BUSINESS WIRE)-- Bel Fuse Inc. (Nasdaq: BELFA)(Nasdaq: BELFB) today announced preliminary unaudited financial results for the third quarter and first nine months of 2012.

Third Quarter Highlights


● Sales for the third quarter of 2012 increased 0.2% to $76.1 million compared to $75.9 million for the third quarter of 2011, and increased 3.9% sequentially compared to $73.2 million for the second quarter of 2012.

● For the third quarter of 2012, GAAP net earnings were $2.6 million, or $0.20 per diluted Class A share and $0.22 per diluted Class B share.

● For the third quarter of 2012, non-GAAP net earnings before restructuring charges, acquisition costs, the expiration of tax statutes of limitations and other charges were $3.3 million, or $0.26 per diluted Class A share and $0.28 per diluted Class B share.

● Acquired Powerbox Italy and Fibreco Limited, the latest steps in Bel's strategy to focus on non-commodity-based products.

● Incurred $1.8 million in restructuring charges under a streamlining program expected to save approximately $5.5 million annually, with full implementation expected by the end of 2012.

● Purchased 90,000 Class B common shares (for an aggregate cost of $1.7 million) under the $10 million common share buyback program authorized by the Board in July.

CEO comments

Daniel Bernstein, Bel's President and CEO, said, "While GAAP operating income declined by 47% from the third quarter of 2011 to the third quarter of 2012, we are encouraged by our 78% increase in non-GAAP operating income compared to the third quarter last year on essentially flat sales. This is due to an improved product mix, including higher sales of magnetic and interconnect products, and the success of our cost reduction program. The increase in sales within the magnetic and interconnect product groups was equally offset by lower demand for module products during the third quarter of 2012.

"During the quarter we completed two acquisitions that will strengthen our strategy of focusing on sales of non-commodity products. U.K.-based Fibreco has joined Gigacom Interconnect AB, which we acquired in March 2012, as part of Bel's Cinch Connectors business. Fibreco's fiber optic-based products complement Cinch's copper-based products, increasing Cinch's reach into aerospace, military, and industrial markets, while providing Fibreco with access to well-established sales channels it had not previously explored. We believe the combination of Fibreco's broad range of expanded beam fiber-based connectors and Gigacom's expanded beam EBOSATM products will enable Cinch to be a leader in fiber connector technology. Our expectation for significant growth is based on the quality, reliability and weight benefits of fiber products in comparison with copper components currently being used in the aerospace and military markets.

"Our acquisition of Milan, Italy-based Powerbox adds established AC-DC products to our existing power portfolio and adds important capabilities in the design and manufacture of these devices to our skill sets in Europe, China and the U.S. With Bel's key European power customers located in Italy, we expect that this acquisition will allow us immediately to penetrate these customers with Powerbox's medium to high power AC-DC power conversion products.

"We are optimistic that the opportunities created by these acquisitions will fuel the growth of our modular and interconnect business groups in the coming years."

Bernstein said that Bel is pursuing another potential acquisition representing in excess of $60 million in annual revenue.

Noting that Bel has recorded pre-tax expenses related to its corporate restructuring program of about $2.2 million in the first nine months of 2012, Bernstein said, "We currently estimate up to an additional $2.9 million in pre-tax expenses associated with these steps in the fourth quarter. We expect the program to reduce our operating costs by approximately $5.5 million annually once it is fully implemented by the end of this year. The overhead cost reduction steps we already have taken at our facilities in Asia began to benefit our operating results in the third quarter."

Third Quarter Results

For the three months ended September 30, 2012, net sales increased to $76,059,000 compared to $75,903,000 for the third quarter of 2011.

Cost of sales decreased slightly to 83.4% of sales for the third quarter of 2012, compared to 84.1% of sales for the third quarter of 2011.

Operating income for the third quarter of 2012 decreased to $1,025,000, compared to $1,938,000 for the third quarter of 2011. Excluding costs detailed in the table reconciling GAAP to non-GAAP financial measures included in this release, non-GAAP operating income was $3,883,000 for the third quarter of 2012, compared to $2,182,000 for the third quarter of 2011.

Net earnings for the third quarter of 2012 included an income tax benefit of $1,809,000, the result of the expiration of certain statutes of limitations in September 2012. For the third quarter of 2011, income tax expense was $1,046,000.

Net earnings for the third quarter of 2012 were $2,600,000, compared to net earnings for the third quarter of 2011 of $1,012,000.

Excluding the charges detailed in the table reconciling GAAP to non-GAAP financial measures mentioned above, non-GAAP net earnings for the third quarter of 2012 were $3,292,000. This compares to non-GAAP net earnings for the third quarter of 2011, excluding charges detailed in that table, of $1,233,000.

Net earnings per diluted Class A common share for the third quarter of 2012 were $0.20, compared to net earnings per Class A common share of $0.08 for the third quarter of 2011. Adjusted to exclude the amounts referenced above, non-GAAP net earnings per diluted Class A common share were $0.26 for the third quarter of 2012, compared to $0.10 for the third quarter of 2011.

Net earnings per diluted Class B common share were $0.22 for the third quarter of 2012, compared to net earnings per Class B common share of $0.09 for the third quarter of 2011. Adjusted to exclude the amounts referenced above, non-GAAP net earnings per diluted Class B common share were $0.28 for the third quarter of 2012, compared to $0.11 for the third quarter of 2011.

Balance Sheet Data

As of September 30, 2012, Bel reported working capital of $149,638,000, including cash, cash equivalents and marketable securities of $74,773,000, a current ratio of 4.0-to-1, total long-term obligations of $12,248,000, and stockholders' equity of $223,219,000. In comparison, at December 31, 2011, Bel reported working capital of $165,264,000, including cash, cash equivalents, and marketable securities of $93,972,000, a current ratio of 4.9-to-1, total long-term obligations of $13,406,000, and stockholders' equity of $221,080,000.

Nine Month Results

For the nine months ended September 30, 2012, net sales decreased to $214,842,000 compared to $226,479,000 for the first nine months of 2011. Net earnings for this year's first nine months were $4,939,000, compared to net earnings of $3,682,000 for the first nine months of 2011.

Net earnings per diluted Class A common share for the first nine months of 2012 were $0.38, compared to $0.29 for the same period of 2011. Adjusted to exclude various amounts, detailed in the reconciliation table included in this release, non-GAAP net earnings per diluted Class A common share were $0.50 for the first nine months of 2012, compared to $0.53 a year earlier.

Net earnings per diluted Class B common share for the first nine months of 2012 were $0.42, compared to $0.32 for the same period of 2011. Adjusted to exclude the amounts referenced above, non-GAAP net earnings per diluted Class B common share were $0.55 for the first nine months of 2012, compared to $0.58 a year earlier.

Conference Call

Bel has scheduled a conference call at 11:00 a.m. EDT today. To participate in the call, dial (720) 545-0088, conference ID #52264897. A simultaneous webcast is available from the Investors link under the "About Bel" tab at www.BelFuse.com. The webcast will be available for replay for a period of 20 days at this same Internet address. For a telephone replay, dial (404) 537-3406, conference ID #52264897, after 2:00 p.m. EDT.

About Bel

Bel (www.belfuse.com) and its divisions are primarily engaged in the design, manufacture, and sale of products used in networking, telecommunications, high-speed data transmission, commercial aerospace, military, transportation, and consumer electronics. Products include magnetics (discrete components, power transformers and MagJack® connectors with integrated magnetics), modules (DC-DC converters and AC-DC power supplies, integrated analog front-end modules and custom designs), circuit protection (miniature, micro and surface mount fuses) and interconnect devices (micro, circular and filtered D-Sub connectors, fiber optic connectors, passive jacks, plugs and high-speed cable assemblies). The Company operates facilities around the world.

Forward-Looking Statements

Except for historical information contained in this press release, the matters discussed in this press release (including the statements regarding the anticipated impact of the Fibreco and Powerbox acquisitions, the possibility of Bel's effecting another acquisition and the remaining costs to be incurred in, and anticipated savings from, Bel's corporate restructuring program) are forward looking statements that involve risks and uncertainties.Actual results could differ materially from Bel's projections.Among the factors that could cause actual results to differ materially from such statements are: the market concerns facing our customers; the continuing viability of sectors that rely on our products; the effects of business and economic conditions; difficulties associated with integrating recently acquired companies; capacity and supply constraints or difficulties; product development, commercializing or technological difficulties; the regulatory and trade environment; risks associated with foreign currencies; uncertainties associated with legal proceedings; the market's acceptance of the Company's new products and competitive responses to those new products; and the risk factors detailed from time to time in the Company's SEC reports.In light of the risks and uncertainties, there can be no assurance that any forward looking statement will in fact prove to be correct. We undertake no obligation to update or revise any forward looking statements.

 

BEL FUSE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(000s omitted, except for per share data)

 

 

 

   

Three Months Ended

   

Nine Months Ended

September 30,

September 30,

2012

   

2011

2012

   

2011

Net sales

$

76,059

 

$

75,903

 

$

214,842

 

$

226,479

 

Costs and expenses:

 

 

 

 

Cost of sales

63,404

63,865

179,587

186,365

Selling, general and administrative

9,851

9,856

28,136

30,327

Restructuring charge

1,778

--

2,160

--

Litigation charges

--

247

26

3,471

Loss (gain) on disposal of property, plant and equipment

 

1

  

(3

)

 

111

  

4

 

Total costs and expenses

 

75,034

  

73,965

  

210,020

  

220,167

 

Income from operations

1,025

1,938

4,822

6,312

Impairment of investment

(297

)

--

(775

)

--

Gain on sale of investment

--

--

--

119

Interest income and other, net

 

63

  

120

  

216

  

281

 

Earnings before provision for income taxes

791

2,058

4,263

6,712

 

(Benefit) provision for income taxes

 

(1,809

)

 

1,046

  

(676

)

 

3,030

 

Net earnings

$

2,600

 

$

1,012

 

$

4,939

 

$

3,682

 

Earnings per Class A common share - basic and diluted

$

0.20

 

$

0.08

 

$

0.38

 

$

0.29

 

Weighted average Class A common shares outstanding

 

 

 

 

- basic and diluted

 

2,175

  

2,175

  

2,175

  

2,175

 

Earnings per Class B common share - basic and diluted

$

0.22

 

$

0.09

 

$

0.42

 

$

0.32

 

Weighted average Class B common shares outstanding

 

 

 

 

- basic and diluted

 

9,697

  

9,644

  

9,669

  

9,584

 
 
 

CONDENSED CONSOLIDATED BALANCE SHEET DATA

(000s omitted)

 

   

Sept. 30,

   

Dec.31,

      

 

   

Sept. 30,

   

Dec.31,

ASSETS

2012

2011

LIABILITIES & EQUITY

2012

2011

 

   

(unaudited)

   

(unaudited)

      

 

   

(unaudited)

   

(unaudited)

Current assets

$

199,226

$

207,689

Current liabilities

$

49,588

$

42,425

Property, plant &

 

 

 

 

 

equipment, net

37,237

39,414

Noncurrent liabilities

12,248

13,406

Goodwill and intangibles

33,006

15,040

 

 

 

Other assets

 

15,586

 

14,768

Stockholders' equity

 

223,219

 

221,080

Total Assets

$

285,055

$

276,911

Total Liabilities & Equity

$

285,055

$

276,911

 
 
BEL FUSE INC. AND SUBSIDIARIES
NON-GAAP MEASURES (unaudited)
(000s omitted, except for per share data)
   Three Months Ended September 30, 2012     Nine Months Ended September 30, 2012
Income

from

operations

   

Net

earnings(2)

   Net earnings per

Class A common

share - diluted(3)

   Net earnings per

Class B common

share - diluted(3)

Income

from

operations

   

Net

earnings(2)

   Net earnings per

Class A common

share - diluted(3)

   Net earnings per

Class B common

share - diluted(3)

GAAP measures$1,025$2,600$0.20$0.22$4,822$4,939$0.38 Read Full Story

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