Bel Fuse Inc. (NASDAQ:BELFA)(NASDAQ:BELFB) today
announced preliminary financial results for the first quarter of
2014.
First Quarter Highlights
- Net sales increased 31.1% to $82.6
million versus $63.0 million in last year's first quarter.
- Net earnings increased to $0.20 per
Class A share and $0.22 per Class B share versus net losses of
$0.05 per Class A and Class B share for the first quarter last
year.
- Income from operations increased to
$2.9 million versus a loss of $1.4 million in the same quarter last
year.
Recent Event
- Agreed to acquire Power Solutions
business from ABB for $117 million.
CEO CommentsDaniel Bernstein, Bel's President and CEO,
said, "Bel delivered solid financial results in what is our
seasonally weakest quarter of the year. First quarter revenue
increased 31.1%, primarily reflecting sales of $16.2 million at
TRP, which we acquired on March 29, 2013. Cost of sales as a
percentage of revenue decreased 2.6 percentage points versus prior
year, contributing to a $4.3 million increase in operating income
for the first quarter of 2014 compared to the same period last
year. First quarter net earnings increased to $2.5 million compared
to a net loss of $0.6 million for the same quarter last year. This
performance is especially noteworthy in view of the fact that in
addition to the normal seasonal impact of the Chinese New Year on
our first quarter operations, we were also affected by a downward
adjustment in inventory levels among some of our large networking
customers.
"On April 25, 2014, we entered into a definitive agreement to
acquire the Power Solutions business of ABB Ltd. Power Solutions is
a leading provider of high-efficiency and high-density power
conversion products for server, storage and networking equipment,
industrial applications and power systems. Bel will pay
approximately $117 million in cash to acquire the business, which
had trailing twelve month revenue of approximately $251 million.
The acquisition, which is subject to regulatory approvals and other
customary closing conditions, is expected to close in the second
quarter of 2014 and to be immediately accretive to Bel's earnings.
Since 2009, we have believed that the combination of the two
respective power businesses would create a dynamic enterprise
capable of competing effectively on a global basis. Bel is excited
by the many growth opportunities that will be created by this
transaction and we look forward to building an industry leading
power business with our new colleagues at Power Solutions."
Bel intends to finance this acquisition through bank borrowings
and cash on hand.
First Quarter ResultsFor the three months ended March 31,
2014, net sales increased to $82.6 million compared to $63.0
million for the first quarter of 2013, as revenue from recently
acquired businesses and higher sales of magnetics and interconnect
products more than offset a decrease in modular product sales.
Operating income for the first quarter of 2014 increased to $2.9
million. This compares to an operating loss for the first quarter
of 2013 of $1.4 million, which included pre-tax restructuring and
acquisition-related charges of $0.6 million. Excluding these and
other charges, as detailed in the table reconciling GAAP to
non-GAAP financial measures included in this release, the non-GAAP
operating loss for the first quarter of 2013 was $0.8 million.
Net earnings for the first quarter of 2014 were $2.5 million.
This compares to a net loss for the first quarter of 2013 of $0.6
million. Excluding amounts detailed in the table reconciling GAAP
to non-GAAP financial measures mentioned above, the non-GAAP net
loss for the first quarter of 2013 was $0.4 million.
Net earnings per diluted Class A common share for the first
quarter of 2014 were $0.20, compared to a net loss per diluted
Class A common share of $0.05 for the first quarter of 2013.
Adjusted to exclude the amounts referenced above, non-GAAP net
earnings per diluted Class A common share for the first quarter of
2014 were $0.21 and the net loss per diluted Class A common share
for the first quarter of 2013 was $0.04.
Net earnings per diluted Class B common share were $0.22 for the
first quarter of 2014, compared to a net loss of $0.05 per diluted
Class B common share for the first quarter of 2013. Adjusted to
exclude the amounts referenced above, the non-GAAP net loss per
diluted Class B common share was $0.04 for the first quarter of
2013.
Balance Sheet DataAs of March 31, 2014 (and without
giving effect to the Power Solutions transaction), Bel had working
capital of $141.4 million, including cash and cash equivalents of
$53.9 million, a current ratio of 4.0-to-1, total long-term
obligations of $13.0 million, and stockholders' equity of $231.2
million. In comparison, at December 31, 2013, Bel reported working
capital of $137.2 million, including cash and cash equivalents of
$62.1 million, a current ratio of 3.0-to-1, total long-term
obligations of $12.5 million, and stockholders' equity of $228.7
million. Cash and cash equivalents decreased by $8.2 million since
the end of 2013 primarily due to repayments of short-term
borrowings.
Conference CallBel has scheduled a conference call at
11:00 a.m. EDT today. To participate, dial (720) 545-0088,
conference ID #25431617. 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 #25431617, after 2:00 p.m. EDT.
About BelBel (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 StatementsExcept for historical
information contained in this press release, the matters discussed
in this press release (including the statements regarding the
anticipated accretive impact of the pending Power Solutions
transaction and the growth opportunities that may result from that
transaction) 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
March 31,
2014 2013
(unaudited) Net sales $ 82,646 $ 63,028
Costs and expenses: Cost of sales 68,576 53,932 Selling, general
and administrative 11,189 10,399 Restructuring charges --
124 Total costs and expenses
79,765 64,455 Income (loss) from
operations 2,881 (1,427 ) Interest expense (30 ) (3 )
Interest income and other, net 51 38
Earnings (loss) before provision (benefit) for income taxes
2,902 (1,392 ) Provision (benefit) for income taxes 399
(834 ) Net earnings (loss) $ 2,503 $
(558 ) Earnings (loss) per Class A common share - basic and
diluted $ 0.20 $ (0.05 ) Weighted average Class A
common shares outstanding - basic and diluted 2,175
2,175 Earnings (loss) per Class B common share
- basic and diluted $ 0.22 $ (0.05 ) Weighted average
Class B common shares outstanding - basic and diluted 9,335
9,221
* Prior period amounts have been restated to reflect 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)
Mar. 31, Dec. 31, Mar. 31,
Dec. 31,
ASSETS 2014 2013
LIABILITIES &
EQUITY 2014 2013 (unaudited) (audited)*
(unaudited) (audited)* Current
assets $ 188,105 $ 204,155 Short-term borrowings $ 4,688 $ 12,739
Property, plant & equipment, net
39,344 40,896 Other current liabilities 41,973 54,242 Goodwill and
intangibles 47,628 47,962 Noncurrent liabilities 13,047 12,458
Other assets 15,827 15,128 Stockholders' equity
231,196 228,702 Total Assets $ 290,904
$ 308,141
Total Liabilities & Equity
$ 290,904 $ 308,141
BEL FUSE INC. AND
SUBSIDIARIES NON-GAAP MEASURES (unaudited) (000s omitted,
except for per share data) Three Months Ended
March 31, 2014
Incomefromoperations
Netearnings(2)
Net earnings perClass A commonshare -
diluted(3)
Net earnings perClass B commonshare -
diluted(3)
GAAP measures $ 2,881 $ 2,503 $ 0.20 $ 0.22 Severance costs
57 35 0.01 -- Acquisitions and other related costs 9
6 -- -- Non-GAAP
measures(1) $ 2,947 $ 2,544 $ 0.21 $ 0.22
Three Months Ended March 31, 2013
Lossfromoperations
Netloss(2)
Net loss perClass A commonshare -
diluted(3)
Net loss perClass B commonshare -
diluted(3)
GAAP measures $ (1,427 ) $ (558 ) $ (0.05 ) $ (0.05 )
Restructuring charges, severance and
reorganization costs
208 129 0.01 0.01
Acquisitions and other related costs 402
365 0.03 0.03
Restoration of prior year Research and
Experimentation (R&E) credit
-- (385 ) (0.03 ) (0.03 )
Non-GAAP measures(1) $ (817 ) $ (449 ) $ (0.04 ) $ (0.04 )
(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 (loss) from operations, net earnings (loss), earnings (loss)
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; acquisition-related costs; and certain income
tax adjustments 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 Bernstein, President &
CEO201-432-0463www.belfuse.com
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