Non-GAAP Net Earnings Increase to $0.63 Per
Class A Share and $0.67 Per Class B Share
Bel Fuse Inc. (NASDAQ:BELFA and NASDAQ:BELFB) today announced
preliminary financial results for the third quarter and first nine
months of 2014.
Third Quarter Highlights
- Net sales increased 54.5% to $156.3
million versus $101.2 million for last year's third quarter.
- GAAP net earnings were $0.12 per Class
A share and $0.13 per Class B share versus GAAP net earnings of
$0.62 per Class A share and $0.65 per Class B share last year.
- Non-GAAP net earnings increased to
$0.63 per Class A share and $0.67 per Class B share versus non-GAAP
net earnings of $0.54 per Class A share and $0.58 per Class B share
last year.
- Non-GAAP income from operations
increased 88.9% to $13.7 million versus $7.2 for prior year.
CEO Comments
Daniel Bernstein, Bel's President and CEO, said, "Bel's
record-setting third quarter performance demonstrates the value of
our strategy to substantially increase the scale of our operations,
primarily through acquisitions, while maintaining tight control
over operating costs. The acquisitions we have completed in the
past 18 months have increased Bel's revenue from $286.6 million for
2012, to $349.2 million for 2013, to the point where our most
recent quarter's revenue exceeds 54% of our revenues for all of
2012 and exceeds 44% of our revenues for all of 2013."
"Consistent with our plan, the 54.5% increase in third quarter
revenue primarily reflected sales of approximately $49.1 million
from Power Solutions, which we acquired on June 19, 2014, and
approximately $14.0 million from Network Power Connectivity
Solutions business, or CS, which we acquired from Emerson on July
25, 2014."
"Also consistent with our plan, the growth in revenue drove a
substantial increase in profitability measured on a non-GAAP basis.
On a comparable non-GAAP basis, operating income before
restructuring charges and acquisition costs nearly doubled to $13.7
million for this year's third quarter versus $7.2 million for last
year's third quarter. Net earnings for this year's third quarter,
again on a non-GAAP basis, increased 19.9% to $7.8 million compared
to non-GAAP net earnings of $6.5 million for the third quarter of
2013. It is worth noting that only a portion of the more than $5
million of annual cost savings we identified earlier this year were
reflected in our third quarter results, and we now see additional
opportunities to reduce costs and enhance efficiency as we move
forward."
"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. We
are making progress in our program to renew the business's key
customer relationships that had been allowed to atrophy by the
former owner. Bel was recently approved, by two key customers, for
consideration to bid on their new power product requirements. We
have focused much of our attention on improving product quality at
the Power Solutions China facility, and recent audits by customers
support our positive results."
"We also are pleased with developments at CS, a leading provider
of high performance RF/microwave and harsh environment optical
connectors and assemblies for military, aerospace, wireless
communications, data communications, broadcast and industrial
applications. We have focused our initial efforts on maintaining
operational efficiency and supply continuity with our customers and
partners, while realigning our direct sales force to take advantage
of synergies between CS and Bel's Cinch Connector Business."
"Within both of these new organizations, Bel has realigned the
sales and marketing groups to focus on establishing strong
relationships with our customer's product engineering and
development groups."
Third Quarter Results
For the three months ended September 30, 2014, net sales
increased to $156.3 million compared to $101.2 million for the
third quarter of 2013, reflecting higher sales of power and
interconnect products which more than offset a decrease in
magnetics product sales.
Operating income for the third quarter of 2014 decreased to $4.7
million compared to operating income for the third quarter of 2013
of $7.7 million. Excluding restructuring charges and acquisition
and other related costs detailed in the table reconciling GAAP to
non-GAAP financial measures included in this release, non-GAAP
operating income increased to $13.7 million compared to non-GAAP
operating income for the third quarter of 2013 of $7.2 million.
Net earnings for the third quarter of 2014 were $1.5 million
compared to net earnings for the third quarter of 2013 of $7.4
million. Excluding the amounts detailed in the table reconciling
GAAP to non-GAAP financial measures mentioned above, non-GAAP net
earnings for the third quarter of 2014 increased to $7.8 million
compared to non-GAAP net earnings for the third quarter of 2013 of
$6.5 million.
Net earnings per diluted Class A common share for the third
quarter of 2014 were $0.12, compared to net earnings per diluted
Class A common share of $0.62 for the third quarter of 2013.
Adjusted to exclude the amounts referenced above, non-GAAP net
earnings per diluted Class A common share for the third quarter of
2014 were $0.63, compared to non-GAAP net earnings per diluted
Class A common share for the third quarter of 2013 of $0.54.
Net earnings per diluted Class B common share were $0.13 for the
third quarter of 2014, compared to net earnings of $0.65 per
diluted Class B common share for the first quarter of 2013.
Adjusted to exclude the amounts referenced above, non-GAAP net
earnings per diluted Class B common share were $0.67 for the third
quarter of 2014, compared to non-GAAP net earnings per diluted
Class B common share of $0.58 for the third quarter of 2013.
Nine Months Results
For the nine months ended September 30, 2014, net sales
increased 31.1% to $338.4 million compared to $258.2 million for
the first nine months of 2013. Net earnings for this year's first
nine months were $7.1 million compared to net earnings of $8.5
million for the first nine months of 2013. Net earnings for the
first nine months of 2013 included an income tax benefit of $0.3
million, the result of pre-tax losses in North America and a
favorable adjustment related to the Research and Experimentation
("R&E") credit. Excluding restructuring charges and acquisition
and other related costs detailed in the table reconciling GAAP to
non-GAAP financial measures included in this release, non-GAAP net
earnings increased to $15.0 million for the first nine months of
2014, compared to non-GAAP net earnings for the same period of 2013
of $8.9 million.
Net earnings per diluted Class A common share for the first nine
months of 2014 were $0.57 compared to net earnings per diluted
Class A common share of $0.70 for the same period of 2013. Adjusted
to exclude the amounts referenced above, non-GAAP net earnings per
diluted Class A common share were $1.23 for the first nine months
of 2014, compared to non-GAAP net earnings per diluted Class A
common share of $0.74 a year earlier.
Net earnings per diluted Class B common share for the first nine
months of 2014 were $0.62 compared to net earnings per diluted
Class B common share of $0.76 for the same period of 2013. Adjusted
to exclude the amounts referenced above, non-GAAP net earnings per
diluted Class B common share were $1.31 for the first nine months
of 2014, compared to non-GAAP net earnings per diluted Class B
common share of $0.79 a year earlier.
Balance Sheet Data
As of September 30, 2014 Bel had working capital of $181.4
million, including cash and cash equivalents of $83.1 million, a
current ratio of 2.3 to 1, total long term obligations of $273.0
million, and stockholders' equity of $229.3 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. The increase
in long term obligations primarily reflects borrowings that were
used to fund the acquisition of Power Solutions on June 19, 2014
and CS on July 25, 2014.
Conference Call
Bel has scheduled a conference call at 11:00 a.m. EDT today. To
participate, dial (720) 545 0088, conference ID #24959937. A
simultaneous webcast of the conference call may be accessed online
from the Events and Presentations link of the Investors page under
the "About Bel" tab at www.BelFuse.com. The webcast replay will be
available for a period of 20 days at this same Internet address.
For a telephone replay, dial (404) 537 3406, conference ID
#24959937 after 2:00 p.m. EDT.
About Bel
Bel (www.belfuse.com) is primarily engaged in the design,
manufacture, and sale of products used in aerospace, data
transmission, military, transportation, and consumer electronics.
Bel's product groups include Magnetic Solutions (discrete
components, power transformers and MagJack® connectors with
integrated magnetics), Power Solutions and Protection (AC-DC power
supplies, DC-DC converters, custom designs, miniature, micro,
surface mount and resettable fuses) and Connectivity Solutions
(micro, circular, filtered D Sub, fiber optic, RF connectors,
microwave components, passive jacks, plugs and 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 potential growth and opportunities to reduce
costs and enhance efficiency in the future) 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, 2014 2013*
2014 2013* (unaudited) (unaudited) Net
sales $ 156,341 $ 101,164 $ 338,426 $ 258,173
Costs and expenses: Cost of sales 128,250 81,132
278,319 213,781 Selling, general and administrative 23,110 12,300
47,475 35,041 Restructuring charges 309 --
1,365 1,387 Total costs
and expenses 151,669 93,432
327,159 250,209 Income from operations
4,672 7,732 11,267 7,964 Interest expense (1,869 ) (67 ) (2,124 )
(75 ) Gain (loss) on sale of investment -- 98 -- 98 Interest income
and other, net 21 81 121
188 Earnings before provision (benefit) for
income taxes 2,824 7,844 9,264 8,175 Provision (benefit) for
income taxes 1,316 464 2,189
(336 ) Net earnings $ 1,507 $ 7,380
$ 7,075 $ 8,511 Earnings per Class A
common share - basic and diluted $ 0.12 $ 0.62 $ 0.57
$ 0.70 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 $ 0.13 $ 0.65
$ 0.62 $ 0.76 Weighted average Class B
common shares outstanding - basic and diluted 9,591
9,229 9,420 9,221
* 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 2014 2013
LIABILITIES & EQUITY
2014 2013 (unaudited) (unaudited)
(unaudited) (unaudited) Current
assets $ 317,877 $ 204,155 Notes payable and current Property,
plant & maturities of long-term debt $ 12,257 $ 12,739
equipment, net 74,104 40,896 Other current liabilities 124,244
54,242 Goodwill Long-term debt 223,219 -- and intangibles 214,375
47,962 Other noncurrent liabilities 49,786 12,458 Other assets
32,443 15,128 Stockholders' equity 229,293
228,702 Total Assets $ 638,799 $ 308,141 Total
Liabilities & Equity $ 638,799 $ 308,141
BEL FUSE INC. AND SUBSIDIARIES
NON-GAAP MEASURES (unaudited) (000s omitted, except for per share
data) Three Months Ended September 30, 2014
Nine Months Ended September 30, 2014
Income
from
operations
Netearnings(2)
Net earnings perClass A commonshare -
diluted(3)
Net earnings perClass B commonshare -
diluted(3)
Incomefromoperations
Netearnings(2)
Net earnings perClass A commonshare -
diluted(3)
Net earnings perClass B commonshare -
diluted(3)
GAAP measures $ 4,672 $ 1,507 $ 0.12 $ 0.13 $ 11,267 $ 7,075
$ 0.57 $ 0.62
Restructuring charges, severance and
reorganization costs
503 312 0.03 0.03 1,616 1,002 0.08 0.09
Acquisition-related costs and inventory-
related purchase accounting adjustments
8,501
6,825
0.56
0.59
10,019
7,750
0.64
0.67
Expiration of tax statutes of limitations, net --
(825 ) (0.07 ) (0.07 )
-- (825 ) (0.07 )
(0.07 ) Non-GAAP measures(1) $ 13,676 $ 7,819
$ 0.63 $ 0.67 $ 22,902 $ 15,002
$ 1.23 $ 1.31 Three Months Ended
September 30, 2013 Nine Months Ended September 30, 2013
Incomefromoperations
Netearnings(2)
Net (loss) earningsper Class A commonshare
- diluted(3)
Net (loss) earningsper Class B commonshare
- diluted(3)
Incomefromoperations
Netearnings(2)
Net earnings perClass A commonshare -
diluted(3)
Net earnings perClass B commonshare -
diluted(3)
GAAP measures $ 7,732 $ 7,380 $ 0.62 $ 0.65 $ 7,964 $ 8,511
$ 0.70 $ 0.76 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 ) Acquisition and other related costs 146 119 0.01 0.01 719
629 0.05 0.06 Gain on sale of investment, 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) $
7,239 $ 6,520 $ 0.54 $ 0.58 $ 9,680
$ 8,905 $ 0.74 $ 0.79
* 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.
(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 FIN 48 liability 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:Daniel Bernstein,201-432-0463Presidentir@belf.com
Bel Fuse (NASDAQ:BELFA)
Historical Stock Chart
From May 2024 to Jun 2024
Bel Fuse (NASDAQ:BELFA)
Historical Stock Chart
From Jun 2023 to Jun 2024