Bel Fuse Inc. (NASDAQ: BELFA) (NASDAQ: BELFB) today
announced preliminary financial results for the fourth quarter and
full year 2014.
Fourth Quarter and 2014 Highlights
- Fourth quarter net sales increased
63.3% to a record $148.7 million as compared with $91.0 million for
the fourth quarter of 2013.
- Fourth quarter GAAP net earnings per
share--“EPS”--was $0.16 per Class A share and $0.17 per Class B
share as compared with GAAP EPS of $0.61 per Class A share and
$0.65 per Class B share last year.
- Fourth quarter non-GAAP EPS was $0.41
per Class A share and $0.44 per Class B share as compared with
non-GAAP EPS of $0.63 per Class A share and $0.67 per Class B share
last year.
- Full year 2014 net sales increased
39.5% to a record $487.1 million as compared with $349.2 million
last year.
- Full year 2014 GAAP EPS was $0.73 per
Class A share and $0.79 per Class B share as compared with GAAP EPS
of $1.32 per Class A share and $1.41 per Class B share last
year.
- Full year 2014 non-GAAP EPS was $1.59
per Class A share and $1.70 per Class B share as compared with
non-GAAP net earnings of $1.40 per Class A share and $1.49 per
Class B share last year.
Non-GAAP financial measures, such as non-GAAP EPS, exclude the
impact of special items, such as acquisition-related costs,
restructuring charges and certain other one-time items. Please
refer to the financial statements included with this press release
for a reconciliation of GAAP financial measures to non-GAAP
financial measures. All results included in this release include
the results of the Power Solutions and Connectivity Solutions
acquisitions from the respective acquisition dates through December
31, 2014.
The fourth quarter and full year 2014 were impacted by the
following special items (net of taxes and in thousands except per
share amounts):
Fourth Quarter
Full Year 2014 2014
Restructuring charges $ 303 $ 1,184 Acquisition related costs 1,270
4,568 Step up of inventories, net from acquisitions 890 4,063
Information technology migration costs 636 636
Total special items $
3,099 $
10,451
Total EPS impact - Class A shares $
0.25 $
0.86 Total EPS impact - Class B shares $
0.27
$
0.91
CEO Comments
Daniel Bernstein, Bel's President and CEO, said, "Bel's record
revenue for the fourth quarter and full year 2014 was driven
primarily by our recent acquisitions, as we continue to implement
our plan to grow the Company through acquisitions. Our revenue has
increased from $286.6 million for 2012, to $349.2 million for 2013,
to $487.1 million for full year 2014. On a pro forma basis, had we
acquired both Power Solutions and Connectivity Solutions on January
1, 2014, our full year 2014 net sales would have been $629.1
million.
"Revenue for the fourth quarter of 2014 included $44.5 million
from Power Solutions, which we acquired in June 2014 from ABB, and
$19.5 million from Connectivity Solutions, which we acquired in
July and August 2014 from Emerson, the '2014 acquisitions.' For
full year 2014, Power Solutions contributed revenue of $100.8
million, and Connectivity Solutions generated revenue of $33.5
million.
"Higher revenue drove an increase in operating profitability on
a non-GAAP basis, despite increased selling, general and
administrative expenses associated with the acquisitions of Power
Solutions and Connectivity Solutions. On a non-GAAP basis, fourth
quarter 2014 operating income increased 5.5% to $7.7 million
compared to $7.3 million for the fourth quarter of 2013; for the
year, non-GAAP operating income increased 82.0% to $30.4 million
compared to $16.7 million for 2013.
"We achieved the approximately $5 million in annual cost savings
we aimed for during 2014, and are now pursuing a variety of
opportunities to further reduce costs and enhance efficiency in the
new year. We also made significant progress in our quality
improvement programs at our Power Solutions business in China,
including the addition of a new General Manager and Corporate and
Far East Quality Directors. These quality gains are critical as we
strive to restore key customer relationships that had been allowed
to atrophy by the business's previous owner. Power Solutions has
recently been approved to bid on contracts with several important
former customers, and we believe the business is on track for
higher sales beginning later this year as products currently in the
design stage are brought into production.
"Last month we completed the sale of Power Solutions' Network
Power Systems division for approximately $10 million. We used the
net proceeds to reduce debt in January 2015 in accordance with the
provisions of our credit agreement. This divestiture will allow us
to focus exclusively on Power Solutions' core product groups--Front
End, Industrial and Board Mounted Power--as we work to develop
Bel's global power business.
"Our integration of the former Emerson Network Power
Connectivity Solutions business, now Connectivity Solutions, into
Bel has continued as planned. Our focus on maintaining operational
continuity during the initial transition has been effective with no
noticeable drop off in service or quality to our customers. We have
now completed the consolidation of our Fibreco and Gigacom
Interconnect businesses out of Great Dunmow, UK and Gothenburg,
Sweden into the newly acquired Connectivity Solutions facility in
Chelmsford, UK. These operations were transferred without
disruption to our customers and will provide both opportunities for
cost savings and better operational efficiencies in our Chelmsford
facility. We have now also completed the transition of critical IT
resources from the Emerson shared facility to a third-party service
center. In parallel we've expanded the group to support the broader
Information Technology needs of Bel. Finally we've completed
critical steps in the integration of the former Connectivity
Solutions Sales and Marketing team with the Cinch Connector
business now combining resources and coordinating customer support
efforts as Cinch Connectivity Solutions.”
Fourth Quarter 2014 Results
Net sales increased 63.3% to $148.7 million compared to $91.0
million for the fourth quarter of 2013. Excluding the $64.0 million
increase in net sales from the 2014 acquisitions, net sales
decreased by $8.8 million as a result of lower sales volume in
Bel’s DC/DC converters, integrated modules and Cinch products,
partially offset by a $1.7 million increase in sales in custom
modules.
Operating income decreased to $2.8 million compared to operating
income for the fourth quarter of 2013 of $7.1 million. Non-GAAP
operating income increased to $7.7 million compared to non-GAAP
operating income for the fourth quarter of 2013 of $7.3 million,
reflecting the incremental contributions of the 2014 acquisitions.
Depreciation and amortization expense increased to $7.1 million for
the fourth quarter of 2014 from $3.7 million for the fourth quarter
of 2013, due to additional depreciation and amortization expense on
the fair value step-ups of tangible and intangible assets
associated with the 2014 acquisitions. In addition to the higher
depreciation and amortization expense, operating income as a
percentage of sales was lower in the fourth quarter of 2014 as
compared to the fourth quarter of 2013 due to a higher SG&A
structure in the Connectivity Solutions business. The Company
implemented a restructuring program related to the U.S. sales team
during the fourth quarter of 2014 to better align the overall
selling costs with the new combined revenue base.
Interest expense was $1.9 million as compared with $0.1 million
in the prior year, primarily due to the interest on borrowings used
to fund the 2014 acquisitions.
Net earnings for the fourth quarter of 2014 were $2.0 million
compared to net earnings for the fourth quarter of 2013 of $7.4
million. Non-GAAP net earnings for the fourth quarter of 2014
decreased to $5.1 million compared to non-GAAP net earnings for the
fourth quarter of 2013 of $7.6 million.
Full Year 2014 Results
Net sales increased 39.5% to $487.1 million compared to $349.2
million for 2013. Excluding the $134.3 million increase in net
sales from the 2014 acquisitions, net sales increased by $18.3
million primarily due to higher sales volume of custom modules,
integrated modules and passive connector products, as well as a
full year of net sales associated with TRP (acquired in March 2013)
and Array (acquired in August 2013). These increases were heavily
offset by a $15.1 million decline in sales of DC/DC converter
products, discrete magnetics and Cinch products.
Operating income decreased to $14.1 million compared to
operating income of $15.0 million in 2013. Non-GAAP operating
income increased to $30.4 million compared to non-GAAP operating
income of $16.7 million for 2013, reflecting the incremental
contributions of the 2013 and 2014 acquisitions. Depreciation and
amortization expense amounted to $19.7 million for the full year of
2014 as compared to $12.4 million for 2013.
Interest expense for 2014 was $4.0 million, as compared with
interest expense of $0.2 million in the prior year primarily due to
the interest on borrowings used to fund the 2014 acquisitions.
Net earnings for 2014 were $9.1 million compared to net earnings
of $15.9 million for 2013. Non-GAAP net earnings increased to $19.5
million for 2014, compared to non-GAAP net earnings for 2013 of
$16.9 million.
Balance Sheet Data
As of December 31, 2014, Bel had working capital of $188.9
million, including cash and cash equivalents of $77.1 million, a
current ratio of 2.6-to-1, and total debt obligations under our
credit facility of $232.6 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, and total debt obligations under our former revolving credit
facility of $12.0 million. The increase in debt primarily reflects
borrowings that were used to fund the 2014 acquisitions.
Conference Call
Bel has scheduled a conference call at 11:00 a.m. EST today. To
participate, dial (720) 545 0088, conference ID #54522569. 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
#54522569 after 2:00 p.m. EST.
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 sales growth, opportunities to
reduce costs and enhance efficiency in the future, efforts to renew
customer relationships with former Power Solutions customers, and
benefits arising from the consolidation of Bel’s Fibreco and
Gigacom Interconnect businesses) 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.
Non-GAAP Financial Measures
The non-GAAP measures presented in this press release and
supplementary information 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.
Website Information
We routinely post important information for investors on our
website, www.belfuse.com, in the "Investor Relations" section.
We use our website as a means of disclosing material, non-public
information and for complying with our disclosure obligations under
Regulation FD. Accordingly, investors should monitor the Investor
Relations section of our website, in addition to following our
press releases, SEC filings, public conference calls, presentations
and webcasts. The information contained on, or that may be accessed
through, our website is not incorporated by reference into, and is
not a part of, this document.
BEL FUSE INC.
Supplementary Information(1)
Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2014
2013
2014
2013
Sales
$
148,650
$
91,016
$
487,076
$
349,189
Cost of sales
120,781
73,106
399,100
286,888
Gross profit
27,869
17,910
87,976
62,301
As a % of sales
18.7
%
19.7
%
18.1
%
17.8
%
Selling, general and administrative
expenses
24,576
10,826
72,051
45,867
As a % of sales
16.5
%
11.9
%
14.8
%
13.1
%
Restructuring charges
466
--
1,832
1,387
Income from operations
2,827
7,084
14,093
15,047
As a % of sales
1.9
%
7.8
%
2.9
%
4.3
%
Interest expense
(1,854
)
(81
)
(3,978
)
(156
)
Interest income and other, net
155
(12
)
276
274
Earnings before tax provision
(benefit)
1,128
6,991
10,391
15,165
Income tax provision (benefit)
(892
)
(407
)
1,296
(743
)
Effective tax rate
-79.1
%
-5.8
%
12.5
%
-4.9
%
Net earnings available to common
stockholders
$
2,020
$
7,398
$
9,095
$
15,908
As a % of sales
1.4
%
8.1
%
1.9
%
4.6
%
Weighted average number of shares
outstanding:
Class A common shares - basic and
diluted
2,175
2,175
2,175
2,175
Class B common shares - basic and
diluted
9,703
9,295
9,491
9,240
Net earnings per common share:
Class A common shares - basic and
diluted
$
0.16
$
0.61
$
0.73
$
1.32
Class B common shares - basic and
diluted
$
0.17
$
0.65
$
0.79
$
1.41
(1)
The supplementary information included in
this press release for 2014 is preliminary and subject to change
prior to the filing of our upcoming Annual Report on Form 10-K with
the Securities and Exchange Commission.
Bel Fuse Inc.
Supplementary Information(1)
Condensed Consolidated Balance Sheets
(in thousands) (unaudited)
December 31,
2014
2013
Assets
Current assets:
Cash and cash equivalents
$
77,138
$
62,123
Accounts receivable, net
99,605
63,849
Inventories, net
113,630
70,019
Other current assets
20,283
8,164
Total current assets
310,656
204,155
Property, plant and equipment, net
70,661
40,896
Goodwill and other intangible assets,
net
213,201
47,962
Other assets
41,634
15,128
Total assets
$
636,152
$
308,141
Liabilities and Stockholders'
Equity
Current liabilities:
Short-term borrowings and notes
payable
$
13,943
$
12,739
Accounts payable
61,926
29,518
Other current liabilities
45,934
24,724
Total current liabilities
121,803
66,981
Long-term debt
219,187
--
Other liabilities
70,284
12,458
Total liabilities
411,274
79,439
Stockholders' equity
224,878
228,702
Total liabilities and stockholders'
equity
$
636,152
$
308,141
(1)
The supplementary information included in
this press release for 2014 is preliminary and subject to change
prior to the filing of our upcoming Annual Report on Form 10-K with
the Securities and Exchange Commission. Prior period amounts have
been restated to reflect immaterial adjustments previously reported
during the measurement period related to the 2013 acquisitions as
if all such adjustments had been recognized on the dates of
acquisition.
Bel Fuse Inc. Supplementary Information(1)
Consolidated Statements of Operations (in thousands, except per
share amounts) (unaudited) Three Months Ended
December 31, 2014 Three Months Ended December 31,
2013 As Reported Special As Adjusted As
Reported Special As Adjusted GAAP
Items(2) Non-GAAP(3) GAAP Items(2) Non-GAAP(3) Sales $ 148,650 -- $
148,650 $ 91,016 -- $ 91,016 Cost of sales 120,781
(1,309 ) 119,472 73,106
-- 73,106 Gross profit 27,869 1,309 29,178
17,910 -- 17,910 As a % of sales 18.7 % 19.6 % 19.7 % 19.7 %
Selling, general and administrative expenses 24,576 (3,100 ) 21,476
10,826 (214 ) 10,612 As a % of sales 16.5 % 14.4 % 11.9 % 11.7 %
Restructuring charges 466 (466 )
--
--
-- -- Income from operations
2,827 4,875 7,702 7,084 214 7,298 As a % of sales 1.9 % 5.2 % 7.8 %
8.0 % Interest expense (1,854 ) -- (1,854 ) (81 ) -- (81 )
Interest income and other, net 155 --
155 (12 ) -- (12 )
Earnings before tax provision (benefit) 1,128 4,875 6,003 6,991 214
7,205 Income tax provision (benefit) (892 ) 1,776 884 (407 )
48 (359 ) Effective tax rate -79.1 % 14.7 %
-5.8 % -5.0 % Net earnings available to common
stockholders $ 2,020 $ 3,099 $ 5,119 $ 7,398
$ 166 $ 7,564
As a % of sales
1.4
%
3.4
%
8.1
%
8.3
%
Weighted average number of shares outstanding: Class A
common shares - basic and diluted 2,175 2,175
2,175 2,175 Class B common
shares - basic and diluted 9,703 9,703
9,295 9,295 Net earnings per
common share: Class A common shares - basic and diluted $ 0.16
$ 0.25 $ 0.41 $ 0.61 $ 0.02 $
0.63 Class B common shares - basic and diluted $ 0.17
$ 0.27 $ 0.44 $ 0.65 $ 0.02 $ 0.67
(1) The supplementary information included
in this press release for 2014 is preliminary and subject to change
prior to the filing of our upcoming Annual Report on Form 10-K with
the Securities and Exchange Commission.
(2) Special items primarily consist of the following expenses
and/or income items:
Three Months Ended December 31, 2014 Three Months Ended December
31, 2013 Gross Taxes Net of taxes Gross Taxes Net of taxes
Restructuring charges 466 163 303 -- -- -- Acquisition related
costs 2,083 813 1,270 214 48 166 Step up of inventories, net from
acquisitions included in cost of sales 1,309 419 890 -- -- --
Information technology migration costs 1,017
381 636 -- --
-- Total special items $ 4,875 $ 1,776
$ 3,099 $ 214 $ 48 $ 166 (3) In
this press release and supplemental information, we have included
several non-GAAP financial measures, including non-GAAP Net
Earnings and EPS, Non-GAAP Gross Profit, Non-GAAP Operating Profit.
We present results adjusted to exclude the effects of certain
specified items ("special items") and their related tax impact that
would otherwise be included under GAAP, to aid in comparisons with
other periods. We may use Non-GAAP EPS, Non-GAAP Net Earnings,
Non-GAAP Gross Profit, Non-GAAP Operating Profit, to determine
performance-based compensation. Management believes that this
information may be useful to investors.
Bel Fuse Inc.
Supplementary Information(1) Consolidated Statements of Operations
(in thousands, except per share amounts) (unaudited)
Year Ended December 31, 2014 Year Ended
December 31, 2013 As Reported Special
As Adjusted As Reported Special As
Adjusted GAAP Items(2) Non-GAAP(3) GAAP Items(2) Non-GAAP(3) Sales
$ 487,076 -- $ 487,076 $ 349,189 -- $ 349,189 Cost of sales
399,100 (5,948 ) 393,152 286,888
689 287,577 Gross profit 87,976
5,948 93,924 62,301 (689 ) 61,612 As a % of sales 18.1 % 19.3 %
17.8 % 17.6 % Selling, general and administrative expenses
72,051 (8,480 ) 63,571 45,867 (933 ) 44,934 As a % of sales 14.8 %
13.1 % 13.1 % 12.9 % Restructuring charges 1,832
(1,832 ) -- 1,387 (1,387
) -- Income from operations 14,093 16,260 30,353
15,047 1,631 16,678 As a % of sales 2.9 % 6.2 % 4.3 % 4.8 %
Interest expense (3,978 ) -- (3,978 ) (156 ) -- (156 ) Interest
income and other, net 276 276
274 -- 274 Earnings
before tax provision (benefit) 10,391 16,260 26,651 15,165 1,631
16,796 Income tax provision (benefit) 1,296 5,809 7,105 (743
) 688 (55 ) Effective tax rate 12.5 % 26.7 %
-4.9 % -0.3 % Net earnings available to common
stockholders $ 9,095 $ 10,451 $ 19,546 $
15,908 $ 943 $ 16,851
As a % of sales
1.9
%
4.0
%
4.6
%
4.8
%
Weighted average number of shares outstanding: Class A
common shares - basic and diluted 2,175 2,175
2,175 2,175 Class B common
shares - basic and diluted 9,491 9,491
9,240 9,240 Net earnings per
common share: Class A common shares - basic and diluted $ 0.73
$ 0.86 $ 1.59 $ 1.32 $ 0.08 $
1.40 Class B common shares - basic and diluted $ 0.79
$ 0.91 $ 1.70 $ 1.41 $ 0.08 $ 1.49
(1) The supplementary information included
in this press release for 2014 is preliminary and subject to change
prior to the filing of our upcoming Annual Report on Form 10-K with
the Securities and Exchange Commission.
(2) Special items primarily consist of the following expenses
and/or income items: Year Ended December 31, 2014 Year Ended
December 31, 2013 Gross Taxes Net of taxes Gross Taxes Net of taxes
Restructuring charges 1,832 648 1,184 1,387 427 960 Acquisition
related costs 7,463 2,895 4,568 933 138 795 Step up of inventories,
net from acquisitions included in cost of sales 5,948 1,885 4,063
-- -- -- Information technology migration costs 1,017 381 636 -- --
-- Storm insurance recovery -- -- -- (689 ) (262 ) (427 )
Restoration of expired prior year R&E credit --
-- -- -- 385
(385 ) Total special items $ 16,260 $ 5,809
$ 10,451 $ 1,631 $ 688 $ 943
(3) In this press release and supplemental information, we
have included several non-GAAP financial measures, including
Non-GAAP Net Earnings and EPS, Non-GAAP Gross Profit, Non-GAAP
Operating Profit. We present results adjusted to exclude the
effects of certain specified items ("special items") and their
related tax impact that would otherwise be included under GAAP, to
aid in comparisons with other periods. We may use Non-GAAP EPS,
Non-GAAP Net Earnings, Non-GAAP Gross Profit, Non-GAAP Operating
Profit, to determine performance-based compensation. Management
believes that this information may be useful to investors.
Investor Contact:Neil Berkman
Associates310-477-3118info@berkmanassociates.comorCompany
Contact:Bel Fuse Inc.Daniel Bernstein, Presidentir@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