Bel Fuse Inc. (NASDAQ:BELFA) (NASDAQ:BELFB) today
announced preliminary unaudited financial results for the fourth
quarter and 2010.
For the quarter, the Company reported that net sales increased
72% to a fourth quarter record $83.7 million. The net loss for the
fourth quarter of $1.0 million included an $8.1 million charge for
litigation. For 2010, net sales increased 66% to a record $302.5
million and net earnings increased to $13.6 million ($1.10 per
diluted Class A share and $1.18 per diluted Class B share) compared
to a net loss of $8.3 million ($0.71 per Class A share and $0.72
per Class B share) for 2009.
"We are pleased with the Company's strong top and bottom line
performance for the fourth quarter and 2010, which reflected solid
demand for all of Bel's product groups and strong results at Cinch
Connectors. The increase in sales raised margins, as a percentage
of sales, and we achieved efficiency gains at our plants in China.
Our hiring program in China was completed in the fourth quarter,
which also helped drive lead times down to traditional levels by
year end," said Daniel Bernstein, Bel's President and CEO.
As previously announced, the Company incurred an $8.1 million
charge for litigation in the fourth quarter in connection with the
SynQor v. Artesyn Technologies, Inc., et al. patent infringement
litigation. "Bel will appeal this verdict," Bernstein said.
Fourth Quarter Results
For the three months ended December 31, 2010, net sales
increased to $83,697,000, compared to $48,665,000 for the fourth
quarter of 2009. This year's fourth quarter net sales included
$14,810,000 attributable to Cinch Connectors, which was acquired on
January 29, 2010. Excluding the Cinch Connector sales, net sales
increased 42% for the fourth quarter of 2010 versus the same
quarter last year.
The net loss for the fourth quarter of 2010 was $1,022,000,
which was net of a charge for litigation of $8,103,000 ($8,042,000
after tax). This compares to net earnings for the fourth quarter of
2009 of $2,898,000. Net earnings for the fourth quarter of 2009
included a pre-tax net gain of $5,390,000 ($3,343,000 after tax)
resulting primarily from the sale of the Company's equity interest
in Power-One, Inc. This gain more than offset an operating loss of
$808,000, which included costs of $504,000 ($312,000 after tax)
related to the Cinch Connectors acquisition.
Adjusted to exclude the litigation charge and various other
amounts, non-GAAP net income for the fourth quarter of 2010 was
$6,873,000. This compares to a non-GAAP net loss for the fourth
quarter of 2009 of $87,000, adjusted to exclude a gain on sale of
investments and various costs. A reconciliation of non-GAAP to GAAP
financial measures is provided in the table attached to this press
release.
The net loss per Class A common share for the fourth quarter of
2010 was $0.09, compared to net earnings per diluted Class A common
share of $0.23 for the fourth quarter of 2009. Adjusted to exclude
the litigation charge and various other amounts, non-GAAP net
earnings per diluted Class A common share were $0.56 for the fourth
quarter of 2010, compared to a non-GAAP net loss per Class A common
share of $0.01 for the fourth quarter of 2009, adjusted to exclude
a gain on sale of investments and various costs.
The net loss per Class B common share was $0.09 for the fourth
quarter of 2010, compared to net earnings per diluted Class B
common share of $0.25 for the fourth quarter of 2009. Adjusted to
exclude the litigation charge and various other amounts, non-GAAP
net earnings per diluted Class B common share were $0.59 for the
fourth quarter of 2010, compared to a non-GAAP net loss per Class B
common share of $0.01 for the fourth quarter of 2009, adjusted to
exclude a gain on sale of investments and various costs.
Cost of sales decreased to 78.5% of sales for the fourth quarter
of 2010, compared to 85.3% of sales for the fourth quarter of
2009.
Adjusted to exclude the litigation charge and various other
amounts, non-GAAP income from operations for the fourth quarter of
2010 was $8,208,000, including non-GAAP operating income of
approximately $515,000 at Cinch Connectors. For the fourth quarter
of 2009, adjusted to exclude various costs, the non-GAAP loss from
operations was $269,000.
At December 31, 2010, Bel reported working capital of
approximately $157,296,000, including cash, cash equivalents,
short-term investments and marketable securities of approximately
$85,536,000, a current ratio of 4.4, total long-term obligations of
$10,571,000, and stockholders' equity of $220,333,000. In
comparison, at December 31, 2009, Bel reported working capital of
approximately $167,833,000, 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.
2010 Results
For the twelve months ended December 31, 2010, net sales were a
record $302,539,000, compared to $182,753,000 for 2009. Net
earnings for 2010 increased to $13,649,000, compared to a net loss
of $8,310,000 for 2009.
Net earnings per diluted Class A common share for 2010 were
$1.10, compared to a net loss per Class A common share of $0.71 for
2009. Net earnings per diluted Class B common share for 2010 were
$1.18, compared to a net loss per Class B common share of $0.72 for
2009.
Conference Call
Bel has scheduled a conference call at 11:00 a.m. EST today. To
participate in the call, dial (720) 545-0088, conference ID
#37590538. A simultaneous webcast is available from the Events and
Presentations link of the Investor Info 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 (706)
645-9291, conference ID #37590538 after 2:00 p.m. EST.
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 and 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
plans to appeal the SynQor verdict) 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 effects 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 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
Twelve Months Ended December 31, December 31, 2010 2009 2010 2009
(unaudited) (unaudited) Net Sales $ 83,697 $ 48,665
$ 302,539 $ 182,753 Costs and expenses:
Cost of sales 65,661 41,535 239,185 161,454 Selling, general and
administrative 9,801 7,988 40,443 30,055 Impairment of goodwill --
-- -- 12,875 Litigation charge 8,103 -- 8,103 -- Restructuring
charge -- -- -- 413 Loss (gain) loss on sale of property, plant and
equipment 17 (50 ) (352 ) (4,693
) Total costs and expenses 83,582
49,473 287,379 200,104
Income (loss) from operations 115 (808 ) 15,160 (17,351 )
Gain on sale of investments -- 5,390 -- 7,129 Interest
income and other, net 95 125 420
527 Earnings (loss) before provision
(benefit) for income taxes 210 4,707 15,580 (9,695 )
Provision (benefit) for income taxes 1,232
1,809 1,931 (1,385 ) Net (loss)
earnings $ (1,022 ) $ 2,898 $ 13,649 $ (8,310 )
(Loss) earnings per Class A common share basic and diluted $
(0.09 ) $ 0.23 $ 1.10 $ (0.71 ) Weighted
average Class A common shares outstanding basic and diluted
2,175 2,175 2,175 2,175
(Loss) earnings per Class B common share basic and
diluted $ (0.09 ) $ 0.25 $ 1.18 $ (0.72 )
Weighted average Class B common shares outstanding basic and
diluted 9,528 9,423 9,504
9,363
CONDENSED CONSOLIDATED
BALANCE SHEET DATA (000s omitted)
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
ASSETS 2010 2009
LIABILITIES & EQUITY 2010 2009
(unaudited) (audited) (unaudited) (audited)
Current assets $ 203,564 $ 195,830 Current
liabilities $ 46,268 $ 27,997
Property, plant & equipment, net
44,793 35,943 Noncurrent liabilities 10,571 9,017 Goodwill 4,264
1,957 Intangibles & other assets 24,551 12,216
Stockholders' equity 220,333 208,932 Total
Assets $ 277,172 $ 245,946 Total Liabilities & Equity $ 277,172
$ 245,946
BEL FUSE INC. AND
SUBSIDIARIES NON-GAAP MEASURES (unaudited) (000s omitted,
except for per share data) Three Months Ended
December 31, 2010 Twelve Months Ended December
31, 2010
Income
from
Operations
Net
(loss)
earnings(2)
Net (loss) earningsper Class A commonshare
- diluted(3)
Net (loss) earningsper Class B commonshare
- diluted(3)
Income
from
Operations
Net
earnings(2)
Net earnings perClass A commonshare -
diluted(3)
Net earnings perClass B commonshare -
diluted(3)
GAAP measures $ 115 $ (1,022 ) $ (0.09 ) $ (0.09 ) $ 15,160
$ 13,649 $ 1.10 $ 1.18 Severance costs and plant closure expenses
80 63 0.01 0.01 1,176 1,064 0.09 0.09 Litigation charge 8,103 8,042
0.66 0.69 8,103 8,042 0.66 0.69 Recovery of unauthorized stock
issuance costs (121 ) (75 ) (0.01 ) (0.01 ) (121 ) (75 ) (0.01 )
(0.01 )
Acquisition-related costs and
inventory-related purchase accounting adjustments
14 9 0.00 0.00 1,141 707 0.06 0.06 Loss (gain) on sale of property,
plant and equipment 17 11 0.00 0.00 (352 ) (299 ) (0.02 ) (0.03 )
Expiration of tax statutes of limitations, net --
(155 ) (0.01 ) (0.01 ) --
(887 ) (0.07 ) (0.08 )
Non-GAAP measures excluding severance and
plant closure, litigation reserve; recovery of unauthorized stock
issuance costs; acquisition-related costs and inventory-related
purchase accounting adjustments; gains on sale of property plant
and equipment; and net effect of expiration of statutes of
limitations(1)
$ 8,208 $ 6,873 $ 0.56 $ 0.59 $ 25,107
$ 22,201 $ 1.80 $ 1.92
Three Months Ended December 31, 2009 Twelve Months Ended December
31, 2009 (Loss)
from
Operations
Net
earnings
(loss)(2)
Net earnings (loss)per Class A commonshare
- diluted(3)
Net earnings (loss)per Class B commonshare
- diluted(3)
(Loss)
from
Operations
Net
(loss)(2)
Net (Loss) perClass A commonshare -
diluted(3)
Net (Loss) perClass B commonshare -
diluted(3)
GAAP measures $ (808 ) $ 2,898 $ 0.23 $ 0.25 $ (17,351 ) $
(8,301 ) $ (0.71 ) $ (0.72 )
Restructuring, severance, and unauthorized
stock issuance costs
85 77 0.01 0.01 2,547 1,807 0.15 0.16 Impairment of goodwill -- --
-- -- 12,875 12,875 1.07 1.13 License fee paid in settlement of
lawsuit -- -- -- -- 2,001 1,241 0.10 0.11 Acquisition-related costs
504 312 0.03 0.03 605 375 0.03 0.03 Gain on sale of property, plant
and equipment (50 ) (31 ) 0.00 0.00 (4,693 ) (2,910 ) (0.24 ) (0.25
) Gain on sale of investments, net of income tax -- (3,343 ) (0.28
) (0.29 ) -- (4,420 ) (0.37 ) (0.39 ) Expiration of tax statutes of
limitations, net -- -- --
-- -- (2,955 ) (0.25 )
(0.26 )
Non-GAAP measures excluding restructuring,
impairment charges and other costs; gain on sale of investments
(net of income tax); gain on sale of property, plant and equipment
and net effect of expiration of tax statutes of limitations(1)
$ (269 ) $ (87 ) $ (0.01 ) $ (0.01 ) $ (4,016 ) $ (2,297 ) $ (0.21
) $ (0.20 ) (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 sales of
investments and real estate, tax benefits resulting from the
expiration of tax statutes of limitations, and charges for
severance, factory closure, amounts paid or reserved for lawsuits,
restructuring, impairment of assets, 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 relevant 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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