Bel Fuse Inc. (NASDAQ:BELFA) (NASDAQ:BELFB) today
announced preliminary unaudited financial results for the second
quarter and first half of 2013.
Second Quarter 2013 Highlights
- Sales increased 28.4% to a record $94.0
million compared to $73.2 million for the second quarter of
2012.
- TRP Connector ("TRP"), acquired on
March 29, 2013 to solidify Bel's position as the world leader in
integrated connector modules (ICMs), contributed second quarter
sales of $22.0 million.
- GAAP net earnings were $2.4 million, or
$0.20 per Class A share and $0.22 per Class B share, compared to
GAAP net earnings of $1.4 million, or $0.11 per diluted Class A
share and $0.12 per diluted Class B share for the second quarter of
2012.
- Non-GAAP net earnings, which excludes
restructuring charges, acquisition costs, and certain other
amounts, were $3,572,000, or $0.30 per Class A share and $0.32 per
Class B share. For the second quarter of 2012, non-GAAP net
earnings were $1.9 million, or $0.15 per Class A share and $0.16
per Class B share.
- Acquisition costs and restructuring,
severance and reorganization charges totaled $1.6 million for the
second quarter of 2013, versus $228,000 for the second quarter of
2012.
- The transition of Cinch Connector's
operations from Oklahoma to a new facility in Texas, which resulted
in approximately $1.1 million of transition costs in the second
quarter of 2013, is now essentially complete.
CEO Comments
Daniel Bernstein, Bel's President and CEO, said, "We believe
that Bel has turned the corner. Our restructuring program is now
essentially complete, including the transition of Cinch Connector's
operations to our new Texas facility. Start-up costs at Cinch's new
facility amounted to approximately $1.1 million in the second
quarter of 2013. This is in addition to restructuring and severance
costs of $1.3 million for the quarter related to our corporate
streamlining program. We do not anticipate any significant costs
associated with our restructuring program going forward.
"In addition, previously contracted price increases on Bel's
standard product lines are now beginning to take effect, with all
of the increases scheduled to be in place by the fourth quarter.
This is especially important in view of the rise in labor costs in
China and continued strengthening of the Chinese Yuan.
"The integration of the TRP magnetics business has gone smoothly
so far, and we have encountered no unanticipated problems. TRP
generated sales of $22.0 million, which was slightly higher than
our expectations. The positive impact of this acquisition on Bel is
evident in our second quarter financial results, which were
highlighted by record sales and strong non-GAAP net earnings
despite a $3.8 million decrease in module sales, primarily
attributable to a single customer. We are also pleased by the
continued strong performance of Fibreco, acquired in July 2012, and
we are optimistic about the long-term growth potential of Fibreco
and Powerbox. We continue to seek additional acquisition
opportunities.
"We have received a great deal of positive feedback from
customers regarding the cross-licensing agreement recently entered
into between Cinch and Radiall SA covering their respective
technologies for the EPX® connector range and EBOSA® fibre optic
termini. This agreement is the first step in what we hope will be a
long-term working relationship between our companies aimed at
offering compatible and innovative solutions to the commercial
aerospace industry while also providing a true dual source for
secure supply."
Second Quarter Results
For the three months ended June 30, 2013, net sales increased to
$93,981,000 compared to $73,222,000 for the second quarter of 2012,
as the addition of recently acquired businesses and higher sales of
magnetics products more than offset lower modular product sales.
Cost of sales decreased slightly to 83.0% of sales for the second
quarter of 2013, compared to 83.4% of sales for the second quarter
of 2012.
Operating income for the second quarter of 2013 was $2,548,000,
compared to operating income for the second quarter of 2012 of
$2,333,000. Excluding amounts detailed in the table reconciling
GAAP to non-GAAP financial measures included in this release,
non-GAAP operating income for the second quarter of 2013 was
$4,148,000, compared to non-GAAP operating income of $2,561,000 for
the second quarter of 2012.
Net earnings for the second quarter of 2013 were $2,427,000,
compared to net earnings for the second quarter of 2012 of
$1,441,000.
Excluding amounts detailed in the table reconciling GAAP to
non-GAAP financial measures mentioned above, non-GAAP net earnings
for the second quarter of 2013 were $3,572,000. This compares to
non-GAAP net earnings of $1,900,000 for the second quarter of 2012,
excluding charges detailed in the reconciliation table.
Net earnings per diluted Class A common share for the second
quarter of 2013 were $0.20, compared to net earnings per diluted
Class A common share of $0.11 for the second quarter of 2012.
Adjusted to exclude the amounts referenced above, non-GAAP net
earnings per diluted Class A common share were $0.30 for the second
quarter of 2013, compared to non-GAAP net earnings per diluted
Class A common share of $0.15 for the second quarter of 2012.
Net earnings per diluted Class B common share were $0.22 for the
second quarter of 2013, compared to net earnings per diluted Class
B common share of $0.12 for the second quarter of 2012. Adjusted to
exclude the amounts referenced above, non-GAAP net earnings per
diluted Class B common share were $0.32 for the second quarter of
2013, compared to non-GAAP net earnings per diluted Class B common
share of $0.16 for the second quarter of 2012.
First Half Results
For the six months ended June 30, 2013, net sales increased to
$157,009,000, compared to $138,783,000 for the first six months of
2012. Net earnings for this year's first half were $1,884,000,
compared to net earnings of $2,313,000 for the first six months of
2012.
Net earnings for the first half of 2013 included an income tax
benefit of $640,000, the result of pre-tax losses in North America
and a favorable adjustment related to the R&E credit during the
first quarter. For the first six months of 2012, income tax expense
was $1,124,000.
Net earnings per diluted Class A common share for the first six
months of 2013 were $0.15, compared to $0.18 for the same period of
2012. 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 $0.26 for the first
six months of 2013, compared to $0.23 a year earlier.
Net earnings per diluted Class B common share for the first six
months of 2013 were $0.17, compared to $0.20 for the same period of
2012. Adjusted to exclude the amounts referenced above, non-GAAP
net earnings per diluted Class B common share were $0.28 for the
first six months of 2013, compared to $0.26 a year earlier.
Balance Sheet Data
As of June 30, 2013, Bel had working capital of $129,749,000,
including cash, cash equivalents and marketable securities of
$38,602,000, a current ratio of 3.1-to-1, total long-term
obligations of $14,146,000, and stockholders' equity of
$212,034,000. In comparison, at December 31, 2012, Bel reported
working capital of $144,751,000, including cash, cash equivalents
and marketable securities of $71,264,000, a current ratio of
4.1-to-1, total long-term obligations of $13,439,000, and
stockholders' equity of $215,381,000. The payment of cash to TE
Connectivity for the acquisition of TRP contributed to the decrease
in cash, cash equivalents and marketable securities during the
first half of 2013.
Conference Call
Bel has scheduled a conference call at 11:00 a.m. EDT today. To
participate dial (720) 545-0088, conference ID #18756127. A
simultaneous webcast is available from the Investors link under the "About Bel" tab at
www.BelFuse.com. The webcast replay
will be available for 20 days at this same Internet address. For a
telephone replay, dial (404) 537-3406, conference ID #18756127,
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 status of Bel's restructuring efforts, the
timing of the implementation of price increases, the growth
potential of Fibreco and Powerbox and the ongoing relationship
between Cinch and Radiall SA) 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
Six Months Ended June 30, June 30, 2013 2012*
2013 2012* (unaudited) (unaudited) Net
sales $ 93,981 $ 73,222 $ 157,009 $ 138,783
Costs and expenses: Cost of sales 78,041 61,081
131,959 116,218 Selling, general and administrative 12,129 9,563
22,522 18,421 Restructuring charges 1,263 245
1,387 382 Total
costs and expenses 91,433 70,889
155,868 135,021 Income from operations
2,548 2,333 1,141 3,762 Impairment of investment -- (478 ) -- (478
) Interest expense (3 ) -- (6 ) -- Interest income and other, net
69 77 109
153 Earnings before provision (benefit) for income
taxes 2,614 1,932 1,244 3,437 Provision (benefit) for income
taxes 187 491 (640 )
1,124 Net earnings $ 2,427 $ 1,441 $
1,884 $ 2,313 Earnings per Class A common
share - basic and diluted $ 0.20 $ 0.11 $ 0.15
$ 0.18
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 $ 0.12 $ 0.17 $ 0.20
Weighted average Class B common shares
outstanding - basic and diluted
9,213 9,677 9,217
9,654
*
Prior period amounts have been restated to
reflect immaterial adjustments previously reported during the
measurement period related to the 2012 acquisitions as if all such
adjustments had been recognized on the dates of acquisition.
CONDENSED CONSOLIDATED BALANCE SHEETS
(000s omitted) Jun. 30,
Dec. 31, Jun. 30,
Dec. 31,
ASSETS 2013 2012
LIABILITIES & EQUITY 2013 2012 (unaudited) (audited)
(unaudited) (audited) Current assets $ 192,985 $
191,139 Current liabilities $ 63,236 $ 46,388
Property, plant & equipment, net
38,269 34,988 Noncurrent liabilities 14,146 13,439 Goodwill and
intangibles 41,940 35,167 Other assets 16,222 13,914
Stockholders' equity 212,034 215,381 Total
Assets $ 289,416 $ 275,208 Total Liabilities & Equity $ 289,416
$ 275,208
BEL FUSE INC. AND
SUBSIDIARIES NON-GAAP MEASURES (unaudited) (000s omitted,
except for per share data) Three Months Ended
June 30, 2013 Six Months Ended June 30, 2013
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 $ 2,548 $ 2,427 $ 0.20 $ 0.22 $ 1,141 $ 1,884
$ 0.15 $ 0.17
Restructuring charges, severance and
reorganization costs
1,428 1,000 0.08 0.09 1,636 1,129 0.10 0.10 Acquisitions and other
related costs 172 145 0.01 0.01 574 510 0.04 0.05 Restoration of
expired prior year R&E credit -- -- --
-- -- (385 ) (0.03 ) (0.03 )
Non-GAAP measures(1) $ 4,148 $ 3,572 $ 0.30 $ 0.32 $ 3,351 $
3,138 $ 0.26 $ 0.28 Three Months
Ended June 30, 2012 Six Months Ended June 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 $ 2,333 $ 1,441 $ 0.11 $ 0.12 $ 3,762 $ 2,313
$ 0.18 $ 0.20
Restructuring charges, severance and
reorganization costs
170 127 0.01 0.01 494 328 0.03 0.03 Acquisitions and other related
costs 58 36 -- -- 101 63 0.01 0.01 Impairment of Pulse shares, net
of tax -- 296 0.02 0.03 --
296 0.02 0.03
Non-GAAP measures(1) $ 2,561 $ 1,900 $ 0.15 $ 0.16 $ 4,357 $ 3,000
$ 0.23 $ 0.26 (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 amounts such as charges for
restructuring, severance, reorganization and acquisition-related
costs facilitates comparison of our results among reporting
periods. We believe that such amounts are not reflective of the
relevant business in the period in which the charge is recorded for
accounting purposes. (2) Net of income tax at effective rate
in the applicable tax jurisdiction. (3) Individual amounts
of net earnings per share may not agree to the total due to
rounding.
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