Bel Fuse Inc. (NASDAQ:BELFA)(NASDAQ:BELFB) today
announced preliminary unaudited financial results for the second
quarter of 2010, highlighted by a 73% increase in net sales and an
increase in net earnings to $4.7 million compared to a net loss of
$1.3 million for the second quarter of 2009.
Daniel Bernstein, Bel's President and CEO, said, "We experienced
solid growth in all of our product groups driven by strong demand
from high-end telecom, computing and network applications. Robust
business conditions currently appear likely to continue for the
balance of the year. Substantial gains in gross margins are
primarily the result of the improved productivity of our new
associates in China. So far this year we have added approximately
2,483 new workers at our China facilities, which has allowed us to
shorten our leadtimes.
"Cinch's well-established lines of connectors and cable products
represented 45% of the increase in sales and are a natural addition
to Bel's traditional product menu. And its extensive customer base
has opened key aerospace and military markets to Bel for the first
time, while creating new opportunities for long-term growth."
Second Quarter Results
For the three months ended June 30, 2010, net sales increased
73% to $77,732,000 compared to $44,934,000 for the second quarter
of 2009. This year's second quarter net sales included $14,914,000
from Cinch Connectors, which was acquired on January 29, 2010.
Excluding the Cinch Connector sales, net sales increased 40% for
this year's second quarter versus prior year, and increased 36%
versus the first quarter of 2010.
Net earnings for the second quarter of 2010 were $4,695,000,
which was net of severance and plant closure costs of $477,000
($454,000 after tax). In comparison, the net loss for the second
quarter of 2009 was $1,272,000, which included restructuring,
severance and unauthorized stock issuance costs of $1,700,000
($1,160,000 after tax), and an after-tax net gain on sale of
investments of $671,000.
Adjusted to exclude severance and plant closure costs, non-GAAP
net income for the second quarter of 2010 was $5,171,000. This
compares to a non-GAAP net loss for the second quarter of 2009 of
$775,000, adjusted to exclude restructuring, severance and
unauthorized stock issuance costs and a gain on sale of
investments. A reconciliation of non-GAAP to GAAP financial
measures is provided in the table attached to this press
release.
Net earnings per diluted Class A common share for the second
quarter of 2010 were $0.38, compared to a net loss per diluted
Class A common share of $0.11 for the second quarter of 2009.
Adjusted to exclude severance and plant closure costs, non-GAAP net
earnings per diluted Class A common share were $0.42 for this
year's second quarter, compared to a non-GAAP net loss per Class A
common share of $0.07 for the second quarter of 2009, adjusted to
exclude restructuring, severance and unauthorized stock issuance
costs and a gain on sale of investments.
Net earnings per diluted Class B common share were $0.41 for the
second quarter of 2010, compared to a net loss per diluted Class B
common share of $0.11 for the second quarter of 2009. Adjusted to
exclude severance and plant closure costs, non-GAAP net earnings
per diluted Class B common share were $0.45 for the second quarter
of 2010, compared to a non-GAAP net loss per Class B common share
of $0.07 for the second quarter of 2009, adjusted to exclude
restructuring, severance and unauthorized stock issuance costs and
a gain on sale of investments.
Cost of sales decreased to 79.3% of sales for the second quarter
of 2010, compared to 89.4% of sales for the second quarter of
2009.
Income from operations for this year's second quarter was
$5,738,000, including operating income of approximately $1,400,000
at Cinch Connectors. This compares to an operating loss of
$2,872,000 for the second quarter of 2009. Adjusted to exclude
severance and plant closure costs, non-GAAP income from operations
for the second quarter of 2010 increased to $6,250,000, compared to
a non-GAAP loss from operations of $1,159,000 for the second
quarter of 2009, adjusted to exclude restructuring, severance and
unauthorized stock issuance costs.
At June 30, 2010, Bel reported working capital of approximately
$143,875,000, including cash, cash equivalents, short-term
investments and marketable securities of approximately $75,658,000,
a current ratio of 4.7, total long-term obligations of $9,730,000,
and stockholders' equity of $211,746,000. In comparison, at
December 31, 2009, Bel reported working capital of approximately
$167,800,000, including cash, cash equivalents, short-term
investments and marketable securities of approximately
$124,233,000, a current ratio of 7.0, total long-term obligations
of $9,017,000, and stockholders' equity of $208,932,000.
First Half Results
For the six months ended June 30, 2010, net sales increased 51%
to $133,881,000 compared to $88,805,000 for 2009. Net income for
the first six months of 2010 increased to $4,727,000, compared to a
net loss of $456,000 for the first six months of 2009.
Net earnings per Class A common share for the first six months
of 2010 were $0.38, compared to a net loss per Class A common share
of $0.05 for the same period of 2009. Net earnings per Class B
common share for the first six months of 2010 were $0.41, compared
to a net loss per Class B common share of $0.04 for the first six
months of 2009.
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
#88718038. A simultaneous webcast is available from the
Events and Presentations link
of the Investor Info tab at
www.belfuse.com. A replay
will be available for 20 days at this same Internet address. For a
telephone replay, dial (706) 645-9291, conference ID #88718038
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, integrated analog
front-end modules, custom designs), circuit protection (miniature,
micro and surface mount fuses) and interconnect devices (micro,
circular and filtered D-Sub 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 news
release, the matters discussed in this press release (including
statements regarding the likelihood of robust business conditions
continuing in the future, opportunities for growth resulting from
the Cinch Connector acquisition and future performance) are forward
looking statements that involve risks and uncertainties. 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
effect of business and economic conditions; capacity and supply
constraints or difficulties; product development, commercializing
or technological difficulties; the regulatory and trade
environment; risks associated with integrating the Cinch Connectors
business into the Company's existing business; 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 Six Months Ended June 30 June 30
2010 2009 2010
2009 (unaudited) (unaudited)
Net Sales
$
77,732
$
44,934
$
133,881
$
88,805
Costs and expenses:
Cost of sales
61,676
40,192
108,729
78,403
Selling, general and
administrative
10,299
7,601
19,461
15,254
Restructuring charge
--
--
--
413
Loss (gain) on sale of property,
plant and equipment
19
13
19
(4,652
)
71,994
47,806
128,209
89,418
Income (loss) from operations
5,738
(2,872
)
5,672
(613
)
Gain on sale of investment
--
1,081
--
1,083
Interest income and other, net
116
127
238
316
Earnings (loss) before provision
(benefit) for income taxes
5,854
(1,664
)
5,910
786
Income tax provision (benefit)
1,159
(392
)
1,183
1,242
Net earnings (loss)
$
4,695
$
(1,272
)
$
4,727
$
(456
)
Earnings (loss) per Class A common
share basic and diluted
$
0.38
$
(0.11
)
$
0.38
$
(0.05
)
Weighted average Class A common
shares outstanding basic and diluted
2,175
2,175
2,175
2,176
Earnings (loss) per Class B common
share basic and diluted
$
0.41
$
(0.11
)
$
0.41
$
(0.04
)
Weighted average Class B common
shares outstanding basic and diluted
9,496
9,343
9,480
9,353
CONDENSED CONSOLIDATED BALANCE
SHEET DATA
(000s omitted)
Jun. 30,
Dec. 31,
Jun. 30,
Dec. 31,
ASSETS
2010
2009
LIABILITIES &
EQUITY
2010
2009
(unaudited)
(audited)
(unaudited)
(audited)
Current assets
$
182,860
$
195,830
Current liabilities
$
38,985
$
27,997
Property, plant & equipment,
net
47,835
35,943
Noncurrent liabilities
9,730
9,017
Goodwill
4,548
1,957
Intangibles & other assets
25,218
12,216
Stockholders' equity
211,746
208,932
Total Assets
$
260,461
$
245,946
Total Liabilities & Equity
$
260,461
$
245,946
BEL FUSE INC. AND SUBSIDIARIES NON-GAAP MEASURES
(unaudited) (000s omitted, except for per share data)
Three Months Ended June 30, 2010 Six Months Ended June 30,
2010 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 $ 5,738 $ 4,695 $ 0.38 $ 0.41 $ 5,672 $ 4,727
$ 0.38 $ 0.41 Severance costs and plant closure expenses 477 454
0.04 0.04 1,052 956 0.08 0.08
Acquisition-related costs and
inventory-related purchase accounting adjustments
16 10 0.00 0.00 1,094 678 0.06 0.06 Loss on sale of property, plant
and equipment 19 12 0.00
0.00 19 12 0.00
0.00
Non-GAAP measures excluding
severance and other one-time costs, acquisition-related costs, and
inventory-related purchase accounting adjustments(1)
$ 6,250 $ 5,171 $ 0.42 $ 0.45 $ 7,837
$ 6,373 $ 0.51 $ 0.55
Three Months Ended June 30, 2009 Six Months Ended June 30, 2009
(Loss)
from
Operations
Net
(Loss)(2)
Net (Loss) per
Class A common
share - diluted(3)
Net (Loss) per
Class B common
share - diluted(3)
(Loss)
from
Operations
Net
(loss)(2)
Net (Loss) per
Class A common
share - diluted(3)
Net (Loss) per
Class B common
share - diluted(3)
GAAP measures $ (2,872 ) $ (1,272 ) $ (0.11 ) $ (0.11 ) $
(613 ) $ (456 ) $ (0.05 ) $ (0.04 )
Restructuring, severance, and
unauthorized stock issuance costs
1,700 1,160 0.10 0.10 2,341 1,619 0.13 0.14
Loss (gain) on sale of property,
plant and equipment
13 8 0.00 0.00 (4,652 ) (2,884 ) (0.24 ) (0.25 ) Gain on
investments, net of income tax -- (671 )
(0.06 ) (0.06 ) (671 ) (0.06 )
(0.06 )
Non-GAAP measures excluding
restructuring and other one-time costs, gain on investment, and
gain on sale of property, plant and equipment (1)
$ (1,159 ) $ (775 ) $ (0.07 ) $ (0.07 ) $ (2,924 ) $ (2,392 ) $
(0.21 ) $ (0.21 )
(1) The non-GAAP measures
presented above are not measures of performance under accounting
principles generally accepted in the United States of America
("GAAP"). These measures should not be considered a substitute for,
and the reader should also consider, income from operations, net
earnings, earnings per share and other measures of performance as
defined by GAAP as indicators of our performance or profitability.
Our non-GAAP measures may not be comparable to other
similarly-titled captions of other companies due to differences in
the method of calculation.
Based upon discussions with
investors and analysts, we believe that the reader's understanding
of Bel's performance and profitability is enhanced by reference to
these non-GAAP measures. Removal of gains and losses on investments
and sales of real estate and charges for severance, plant closure,
restructuring, and unauthorized stock issuance costs,
inventory-related purchase accounting adjustments and
acquisition-related costs facilitates comparisons of our results
among reporting periods. We believe that such amounts are not
reflective of the underlying business in the period in which the
gain or charge is recorded for accounting purposes.
(2) Net of income tax at effective
rate in the applicable tax jurisdiction.
(3) Individual amounts of earnings
(loss) per share may not agree to the total due to rounding.
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