Bel Fuse Inc. (NASDAQ:BELFA) (NASDAQ:BELFB) today
announced preliminary unaudited financial results for the third
quarter and first nine months of 2013.
Third Quarter 2013 Highlights
- Net sales increased 33.0% to a record
$101.2 million versus $76.1 million last year.
- TRP Connector ("TRP") contributed third
quarter sales of $25.6 million.
- Net earnings were $0.65 per Class A
share and $0.69 per Class B share versus $0.20 per Class A share
and $0.21 per Class B share last year.
- Income from operations increased to
$8.3 million versus $880,000 last year.
CEO Comments
Daniel Bernstein, Bel's President and CEO, said, "The positive
impact of our business plan is now becoming evident in Bel's
financial performance. Third quarter sales increased to a new
record, driven primarily by sales at TRP. Operating income
increased to $8.3 million from $880,000 for last year's third
quarter, and net income increased to $7.8 million compared to $2.5
million.
"These improvements in Bel's operating performance confirm the
success of our strategy. While remaining intensely focused on
reducing overhead expenses, we have added significantly to sales
and profits through acquisitions this past year. Bel continues to
seek acquisition opportunities that can contribute to sales growth
and enhance profitability.
"We have completed our transition services agreement with TE
Connectivity, so there will be no further costs associated with
that agreement going forward. Bel is now implementing best
practices between TRP and our manufacturing, an ongoing effort that
we believe will contribute to further operating efficiencies and
cost savings.
"The relocation of Cinch Connectors into our new Texas facility,
which was essentially completed during the second quarter, is
having the positive results we anticipated. On August 20, 2013, we
completed the acquisition of privately-held Array Connector
Corporation, a manufacturer of aerospace and mil-spec connector
products which had revenue of approximately $10 million for the
year ended December 31, 2012. While we expect this acquisition to
be neutral to Bel's earnings for the balance of this year, and
accretive beginning in 2014, we already have found ways to use
certain Array components in our Cinch products. In addition, we
have integrated the Cinch and Array sales forces to improve
coverage in North America. We also are pleased by the continued
strong performance of Fibreco, which we acquired last year to
support the growth of our connector division.
"Also encouraging is that previously contracted price increases
on Bel's standard product lines are now taking effect, with all of
these adjustments 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."
Third Quarter Results
For the three months ended September 30, 2013, net sales
increased to $101,164,000 compared to $76,059,000 for the third
quarter of 2012, as the addition of recently acquired businesses
and higher sales of magnetics products more than offset a $473,000
decrease in modular product sales. Cost of sales decreased to 79.8%
of sales for the third quarter of 2013, compared to 83.5% of sales
for the third quarter of 2012.
Operating income for the third quarter of 2013 increased to
$8,328,000, compared to operating income for the third quarter of
2012 of $880,000. Excluding amounts detailed in the table
reconciling GAAP to non-GAAP financial measures included in this
release, non-GAAP operating income for the third quarter of 2013
was $7,834,000, compared to non-GAAP operating income of $3,737,000
for the third quarter of 2012.
Net earnings for the third quarter of 2013 were $7,836,000,
compared to net earnings for the third quarter of 2012 of
$2,491,000. Excluding amounts detailed in the table reconciling
GAAP to non-GAAP financial measures mentioned above, non-GAAP net
earnings for the third quarter of 2013 were $6,976,000, compared to
non-GAAP net earnings of $3,182,000 for the third quarter of
2012.
Net earnings per diluted Class A common share for the third
quarter of 2013 were $0.65, compared to net earnings per diluted
Class A common share of $0.20 for the third quarter of 2012.
Adjusted to exclude the amounts referenced above, non-GAAP net
earnings per diluted Class A common share were $0.58 for the third
quarter of 2013, compared to non-GAAP net earnings per diluted
Class A common share of $0.25 for the third quarter of 2012.
Net earnings per diluted Class B common share were $0.69 for the
third quarter of 2013, compared to net earnings per diluted Class B
common share of $0.21 for the third quarter of 2012. Adjusted to
exclude the amounts referenced above, non-GAAP net earnings per
diluted Class B common share were $0.62 for the third quarter of
2013, compared to non-GAAP net earnings per diluted Class B common
share of $0.27 for the third quarter of 2012.
Nine Months Results
For the nine months ended September 30, 2013, net sales
increased to $258,173,000, compared to $214,842,000 for the first
nine months of 2012. Net earnings for this year's first nine months
were $9,689,000, compared to net earnings of $4,804,000 for the
first nine months of 2012.
Net earnings per diluted Class A common share for the first nine
months of 2013 were $0.80, compared to $0.37 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 $0.84 for the first
nine months of 2013, compared to $0.48 a year earlier.
Net earnings per diluted Class B common share for the first nine
months of 2013 were $0.86, compared to $0.41 for the same period of
2012. Adjusted to exclude the amounts referenced above, non-GAAP
net earnings per diluted Class B common share were $0.90 for the
first nine months of 2013, compared to $0.53 a year earlier.
Balance Sheet Data
As of September 30, 2013, Bel had working capital of
$129,817,000, including cash, cash equivalents and marketable
securities of $46,923,000, a current ratio of 2.6-to-1, total
long-term obligations of $13,445,000, and stockholders' equity of
$221,341,000. In comparison, at December 31, 2012, Bel reported
working capital of $144,530,000, including cash, cash equivalents
and marketable securities of $71,264,000, a current ratio of
4.1-to-1, total long-term obligations of $13,833,000, and
stockholders' equity of $215,362,000. 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 nine months 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 #76509191. 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 #76509191,
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 further operating efficiencies and cost
savings to be derived from the TRP acquisition, the accretive
nature of the Array Connector Corporation acquisition and the
timing of when that acquisition will become accretive to earnings,
and the implementation of price increases, 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,
commercialization 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, 2013 2012* 2013
2012* (unaudited) (unaudited) Net sales $ 101,164 $
76,059 $ 258,173 $ 214,842 Costs and expenses:
Cost of sales 80,730 63,472 212,699 179,690 Selling, general and
administrative 12,106 9,929 34,657 28,350 Restructuring charges
-- 1,778 1,387
2,160 Total costs and expenses 92,836
75,179 248,743 210,200 Income
from operations 8,328 880 9,430 4,642 Interest expense (67 ) -- (75
) -- Impairment of investment -- (297 ) -- (775 ) Gain on sale of
investment 98 -- 98 -- Interest income and other, net 82
63 189 216
Earnings before provision (benefit) for income taxes 8,441 646
9,642 4,083 Provision (benefit) for income taxes 605
(1,845 ) (47 ) (721 ) Net earnings $ 7,836
$ 2,491 $ 9,689 $ 4,804 Earnings per
Class A common share - basic and diluted $ 0.65 $ 0.20
$ 0.80 $ 0.37
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
$ 0.69 $ 0.21 $ 0.86 $ 0.41
Weighted average Class B common shares
outstanding - basic and diluted
9,229 9,697 9,221
9,669
* 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) Sep. 30, Dec. 31,
Sep. 30, Dec. 31,
ASSETS 2013 2012
LIABILITIES & EQUITY 2013 2012 (unaudited)
(audited) (unaudited)
(audited) Current assets $ 213,537 $ 190,918
Short-term borrowing $ 12,532 $ 205
Property, plant & equipment, net
40,338 35,002 Other current liabilities 71,188 46,183 Goodwill and
intangibles 50,031 35,750 Noncurrent liabilities 13,445 13,833
Other assets 14,600 13,913 Stockholders' equity
221,341 215,362 Total Assets $ 318,506 $ 275,583
Total Liabilities & Equity $ 318,506 $ 275,583
BEL FUSE INC. AND SUBSIDIARIES NON-GAAP MEASURES (unaudited)
(000s omitted, except for per share data) Three
Months Ended September 30, 2013 Nine Months Ended
September 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 $ 8,328 $ 7,836 $ 0.65 $ 0.69 $ 9,430 $ 9,689
$ 0.80 $ 0.86
Restructuring charges, severance and
reorganization costs
50
38
-- -- 1,686 1,167 0.10 0.10 Storm insurance recovery, net of costs
(689 ) (427 ) (0.04 ) (0.04 ) (689 ) (427 ) (0.04 ) (0.04 )
Acquisitions and other related costs 145 119 0.01 0.01 719 629 0.05
0.06
Gain on sale of investment securities, net
of income tax
-- (61 )
(0.01
)
(0.01 ) -- (61 ) (0.01 ) (0.01 ) Restoration of expired prior year
R&D credit -- -- -- -- -- (385 ) (0.03 ) (0.03 ) Expiration of
tax statutes of limitations, net -- (529 )
(0.04 ) (0.05 ) -- (529 )
(0.04 ) (0.05 ) Non-GAAP measures(1) $ 7,834 $ 6,976
$ 0.58 $ 0.62 $ 11,146 $ 10,083
$ 0.84 $ 0.90 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 $ 880 $ 2,491 $ 0.20 $ 0.21 $ 4,642 $ 4,804 $
0.37 $ 0.41
Restructuring charges, severance and
reorganization costs
2,200 1,568 0.13 0.13 2,694 1,896 0.15 0.16 Acquisition and other
related costs 657 407 0.03 0.03 758 470 0.04 0.04 Impairment of
Pulse shares, net of income tax -- 185 0.01 0.02 -- 481 0.04 0.04
Expiration of tax statutes of limitations, net --
(1,469 ) (0.12 ) (0.12 ) --
(1,469 ) (0.12 ) (0.13 ) Non-GAAP measures(1)
$ 3,737 $ 3,182 $ 0.25 $ 0.27 $ 8,094
$ 6,182 $ 0.48 $ 0.53
(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,
and reorganization; costs and insurance recoveries related to
Hurricane Sandy; acquisition-related costs; gains and losses
related to investment securities; and fluctuations in tax-related
reserves such as the liability for uncertain tax positions
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 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 per share may not agree to
the total due to rounding.
Investor Contact:Neil Berkman Associates(310)
477-3118info@berkmanassociates.comorBel Fuse Inc.Daniel
BernsteinPresident & CEO(201) 432-0463
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