Full Year Net Earnings Increase to $1.32 Per
Class A Share and $1.41 Per Class B Share on Record Revenue of
$349.2 Million
Bel Fuse Inc. (NASDAQ:BELFA)(NASDAQ:BELFB) today
announced preliminary unaudited financial results for the fourth
quarter and 2013.
Highlights
Fourth Quarter:
● Net sales increased 26.8% to $91.0 million versus $71.8
million last year.
● Net earnings were $0.61 per Class A share and $0.65 per Class
B share versus a net loss of $0.21 per Class A and Class B share
last year.
● Income from operations increased to $7.1 million versus a loss
of $3.0 million last year.
2013:
● Net sales increased 21.8% to a record $349.2 million versus
$286.6 million for 2012.
● Net earnings were $1.32 per Class A share and $1.41 per Class
B share versus $0.17 per Class A share and $0.21 per Class B share
for 2012.
CEO Comments
Daniel Bernstein, Bel's President and CEO, said, "While below
the all-time record set in the third quarter due to the normal
seasonality of our business, revenue for the three months ended
December 31, 2013 increased 26.8% to $91.0 million, a new fourth
quarter record, compared to $71.8 million for the fourth quarter of
2012. This growth was driven primarily by fourth quarter sales of
$18.8 million at TRP, which we acquired on March 29, 2013.
Excluding charges outlined in the table contained in this release,
non-GAAP operating income for the fourth quarter of 2013 increased
to $7.3 million compared to $1.3 million a year earlier, and
non-GAAP net earnings increased to $7.6 million compared to
non-GAAP net earnings of $1.3 million in the fourth quarter of
2012.
"Bel's strong fourth quarter performance also benefited from a
decrease in cost of sales as a percentage of sales to 80.3% from
84.2% in the prior year, as well as a decrease in the dollar amount
of selling, general and administrative expenses due to lower legal,
professional and acquisition-related costs as compared to the
fourth quarter of 2012. Also, previously contracted price increases
on Bel's standard product lines are now all in place, which is
especially important in view of the rise in labor costs in China,
the continued strengthening of the Chinese Yuan and a current
softer market outlook in the data and telecom markets.
"Bel and TRP ICM groups have implemented a Best Practices
program which takes advantage of the design, procurement and
manufacturing skills of both groups to obtain the most efficient
processes and sustain our competitive edge in the global market.
Through additional integration and automation, we believe we can
further reduce lead times and offset the increasing direct labor
cost in China. This is a continuing program that already has proven
to be beneficial to our China manufacturing operations, as well as
to our supply base and customer base.
"One of our first steps after acquiring TRP was to increase our
investment in R&D, with a major upgrade of the TRP Changping
facility completed last month. This new R&D center will improve
our product development cycle and enhance Bel's response time to
customers.
"We added significantly to revenue and earnings through external
growth in 2013, and continue to seek acquisition opportunities that
can contribute to sales growth and profitability. Coupled with our
intense focus on reducing overhead costs, this strategy is already
delivering the improved financial performance that we have been
working to achieve."
Fourth Quarter Results
For the three months ended December 31, 2013, net sales
increased to $91.0 million compared to $71.8 million for the fourth
quarter of 2012, as revenue from recently acquired businesses and
higher sales of magnetics and interconnect products more than
offset a decrease in modular product sales.
Cost of sales decreased to 80.3% of sales for the fourth quarter
of 2013, compared to 84.2% of sales for the fourth quarter of 2012.
Selling, general and administrative expenses for the fourth quarter
of 2013 decreased 3.5% to $10.8 million compared to $11.2 million
for the fourth quarter of 2012.
Operating income for the fourth quarter of 2013 increased to
$7.1 million. This compares to an operating loss for the fourth
quarter of 2012 of $3.0 million, which included pre-tax
restructuring charges of $3.1 million. Excluding these and other
charges, as detailed in the table reconciling GAAP to non-GAAP
financial measures included in this release, non-GAAP operating
income for the fourth quarter of 2012 was $1.3 million.
Net earnings for the fourth quarter of 2013 were $7.4
million,compared to a net loss for the fourth quarter of 2012 of
$2.4 million. Excluding amounts detailed in the table reconciling
GAAP to non-GAAP financial measures mentioned above, non-GAAP net
earnings for the fourth quarter of 2012 were $1.3 million.
Net earnings per diluted Class A common share for the fourth
quarter of 2013 were $0.61, compared to a net loss per diluted
Class A common share of $0.21 for the fourth quarter of 2012.
Adjusted to exclude the amounts referenced above, non-GAAP net
earnings per diluted Class A common share for the fourth quarter of
2012 were $0.10.
Net earnings per diluted Class B common share were $0.65 for the
fourth quarter of 2013, compared to a net loss of $0.21 per diluted
Class B common share for the fourth quarter of 2012. Adjusted to
exclude the amounts referenced above, non-GAAP net earnings per
diluted Class B common share were $0.11 for the fourth quarter of
2012.
Twelve Months Results
For the twelve months ended December 31, 2013, net sales
increased 21.8% to a record $349.2 million, compared to $286.6
million for 2012. Net earnings for 2013 were $15.9 million,
compared to net earnings of $2.4 million for 2012.
Net earnings per diluted Class A common share for 2013 were
$1.32, compared to $0.17 for 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 $0.58 for 2012.
Net earnings per diluted Class B common share for 2013 were
$1.41, compared to $0.21 for 2012. Adjusted to exclude the amounts
referenced above, non-GAAP net earnings per diluted Class B common
share were $0.64 for 2012.
Balance Sheet Data
As of December 31, 2013, Bel had working capital of $137.3
million, including cash and cash equivalents of $62.1 million, a
current ratio of 3.1-to-1, total long-term obligations of $12.5
million, and stockholders' equity of $228.7 million. In comparison,
at December 31, 2012, Bel reported working capital of $144.5
million, including cash and cash equivalents of $71.3 million, a
current ratio of 4.1-to-1, total long-term obligations of $13.8
million, and stockholders' equity of $215.4 million. The payment of
cash to TE Connectivity for the acquisition of TRP contributed to
the decrease in cash and cash equivalents during 2013.
Conference Call
Bel has scheduled a conference call at 11:00 a.m. EST today. To
participate dial (720) 545-0088, conference ID #57594769. 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 (855) 859-2056, conference ID #57594769,
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 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 reduced lead times, Bel's abilities to offset
the increasing direct labor cost in China, the impact that Bel's
new R&D center will have on Bel's product development cycle and
on Bel's response time to customers and Bel's acquisition plans)
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
Twelve Months Ended December 31, December 31, 2013
2012* 2013 2012* (unaudited)
(unaudited) Net sales $ 91,016 $ 71,752 $
349,189 $ 286,594 Costs and expenses: Cost of
sales 73,106 60,425 286,888 240,115 Selling, general and
administrative 10,826 11,221 45,867 39,571 Restructuring charges
-- 3,085 1,387
5,245 Total costs and expenses 83,932 74,731 334,142
284,931 Income (loss) from operations 7,084 (2,979 ) 15,047
1,663 Interest expense (81 ) (14 ) (156 ) (16 ) Impairment of
investment -- -- -- (775 ) Gain (loss) on sale of investment --
(142 ) 98 (142 ) Interest income and other, net (12 )
49 176 267 Earnings
(loss) before benefit from income taxes 6,991 (3,086 ) 15,165 997
Benefit from income taxes (407 ) (654 )
(743 ) (1,376 ) Net earnings (loss) $ 7,398 $
(2,432 ) $ 15,908 $ 2,373 Earnings (loss) per
Class A common share - basic and diluted $ 0.61 $ (0.21 ) $
1.32 $ 0.17 Weighted average Class A common
shares outstanding - basic and diluted 2,175
2,175 2,175 2,175
Earnings (loss) per Class B common share - basic and diluted $ 0.65
$ (0.21 ) $ 1.41 $ 0.21 Weighted
average Class B common shares outstanding - basic and diluted
9,295 9,493 9,240
9,625 * Prior period amounts have been restated to
reflect immaterial adjustments arising during the measurement
period related to the 2012 and 2013 acquisitions as if all such
adjustments had been recognized on the dates of acquisition.
CONDENSED CONSOLIDATED BALANCE SHEETS (000s omitted)
Dec 31, Dec. 31,
Dec 31,
Dec. 31,
ASSETS 2013 2012
LIABILITIES &
EQUITY 2013 2012 (unaudited)
(unaudited)*
(unaudited) (unaudited)*
Current assets $ 204,194 $ 190,918 Short-term borrowings $ 12,739 $
205 Property, plant & equipment, net 40,896 35,002 Other
current liabilities 54,151 46,183 Goodwill and intangibles 47,832
35,750 Noncurrent liabilities 12,458 13,833 Other assets
15,128 13,913 Stockholders' equity 228,702
215,362 Total Assets $ 308,050 $ 275,583 Total Liabilities
& Equity $ 308,050 $ 275,583
BEL FUSE INC. AND
SUBSIDIARIES NON-GAAP MEASURES (unaudited) (000s omitted,
except for per share data) Three Months
Ended December 31, 2013 Twelve Months Ended
December 31, 2013 Income
Net earnings per Net earnings per Income
Net earnings per
Net earnings per from Net Class A common Class B
common from Net Class A common Class B common operations
earnings(2)
share - diluted(3)
share - diluted(3)
operations
earnings(2)
share - diluted(3)
share - diluted(3)
GAAP measures $ 7,084 $ 7,398 $ 0.61 $ 0.65 $ 15,047 $
15,908 $ 1.32 $ 1.41
Restructuring charges, severance and
reorganization costs
-- -- -- -- 1,686 1,167 0.10 0.10 Storm insurance recovery, net of
costs -- -- -- -- (689 ) (427 ) (0.04 ) (0.04 ) Acquisitions and
other related costs 214 166 0.01 0.01 933 795 0.07 0.07
Gain on sale of investment securities, net
of income tax
-- -- --
--
-- -- (61 ) (0.01 ) (0.01 ) Restoration of expired prior year
R&E credit -- -- -- -- -- (385 ) (0.03 ) (0.03 ) Expiration of
tax statutes of limitations, net -- --
-- -- -- (529 )
(0.04 ) (0.05 ) Non-GAAP measures(1) $ 7,298
$ 7,564 $ 0.63 $ 0.67 $ 16,977 $
16,468 $ 1.37 $ 1.46 Three
Months Ended December 31, 2012 Twelve Months Ended December 31,
2012 Income Net (loss) earnings Net (loss) earnings Income Net
earnings per Net earnings per (loss) from Net (loss) per Class A
common per Class B common from Net Class A common Class B common
operations
earnings(2)
share - diluted(3)
share - diluted(3)
operations
earnings(2)
share - diluted(3)
share - diluted(3)
GAAP measures $ (2,979 ) $ (2,432 ) $ (0.21 ) $ (0.21 ) $
1,663 $ 2,373 $ 0.17 $ 0.21
Restructuring charges, severance and
reorganization costs
3,381 2,171 0.18 0.19 6,075 4,067 0.33 0.35
Storm clean-up and damage to property,
plant and equipment
341 211 0.02 0.02 341 211 0.02 0.02 Acquisition and other related
costs 525 556 0.05 0.05 1,283 1,026 0.08 0.09 Impairment of Pulse
shares, net of income tax -- 382 0.03 0.03 -- 863 0.07 0.07
Expiration of tax statutes of limitations
and restoration of R&E credit, net
-- 376 0.03 0.03 -- (1,093 ) (0.09 ) (0.09 ) Non-GAAP
measures(1) $ 1,268 $ 1,264 $ 0.10 $ 0.11 $ 9,362 $ 7,447 $ 0.58 $
0.64
(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
Associates310-477-3118info@berkmanassociates.comorCompany
Contact:Bel Fuse Inc.Daniel BernsteinPresident &
CEO201-432-0463
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