Bel Fuse Inc. (NASDAQ:BELFA and NASDAQ:BELFB) today
announced preliminary financial results for the fourth quarter and
full year 2015.
Fourth Quarter and Full Year 2015 Highlights
- Fourth quarter net sales decreased 9.0%
to $135.2 million compared with net sales of $148.7 million in the
fourth quarter of 2014.
- Fourth quarter operating profit
increased 66.3% to $4.2 million compared with operating profit of
$2.5 million in the fourth quarter of 2014.
- Fourth quarter net earnings per share –
"EPS" – was $0.19 per Class A share and $0.21 per Class B share
compared with EPS of $0.14 per Class A share and $0.15 per Class B
share in the fourth quarter of 2014.
- 2015 net sales increased 16.4% to
$567.1 million compared with net sales of $487.1 million in
2014.
- 2015 operating profit more than doubled
to $28.0 million compared with operating profit of $13.5 million in
2014.
- 2015 EPS was $1.49 per Class A share
and $1.59 per Class B share compared with EPS of $0.69 per Class A
share and $0.75 per Class B share in 2014.
These results include the operations of Power Solutions,
acquired in June 2014, and Connectivity Solutions, acquired in July
and August 2014, from the respective dates of acquisition.
CEO Comments
Daniel Bernstein, President and CEO, said, "Driven by an
increase in gross margin to 18.9% of sales in the fourth quarter of
2015 compared with 18.5% in the same period last year, and by a
decrease in fourth quarter SG&A expenses to 15.3% of sales
compared with 16.5% in the fourth quarter of 2014, Bel delivered a
sharp increase in operating profit, improved net earnings and
strong cash flow in the quarter despite a decrease in revenue that
was in line with industry trends. As a result, we were able to
reduce total debt to $187.2 million at December 31, 2015, repaying
$10.5 million during the fourth quarter and $45.4 million since
December 31, 2014. We remain focused on cost reduction. During the
quarter we completed additional facility consolidations and
operational enhancements that resulted in a $798,000 restructuring
charge. We expect these latest initiatives to save an estimated
incremental $1 million annually beginning in 2016. This is on top
of the $3.5 million in annual savings we anticipate to achieve in
2016 from our previously announced restructuring efforts."
"At Bel Power Solutions, a variety of quality, manufacturing and
R&D improvements we made during the year helped us sustain our
position at the cutting edge of technology and new product
development. Strategic customers continued to award Bel their
highest quality ratings, and we continued to win new designs from
networking, data center, industrial, and storage customers. While
some of this new business shipped in the fourth quarter as
expected, some did not, as overall customer demand slowed during
the period. We restructured our sales team in 2015 to enhance our
ability to capture new accounts and grow the business. Combined
with our commitment to offering the highest quality, competitively
priced products, we remain optimistic about the outlook for Bel
Power Solutions for 2016."
"Bel's Cinch Connectivity Solutions reported improved fourth
quarter operating results in a challenging market environment,
primarily as a result of our restructuring initiatives during 2015.
We aggressively pursued cost reductions in all areas of the
business. During the fourth quarter we completed the closure of our
Array Connector facility in Miami, and resumed production as
scheduled at our facilities in McAllen, Texas and Reynosa, Mexico.
We also completed the consolidation of our administrative offices
in the Chicago area, which we expect to enhance the productivity of
our US-based Connectivity management team."
"While we cannot control business conditions in the global
markets, we have taken substantial steps to adjust to the downturn.
We believe this strategy has both strengthened our competitive
position and enhanced our ability to achieve our goals in the years
ahead."
Fourth Quarter 2015 Results
Net sales decreased 9.0% to $135.2 million in the fourth quarter
of 2015, compared with $148.7 million in the fourth quarter of
2014, primarily due to lower sales of Bel's power solutions and
protection products, as well as certain magnetic and connectivity
products.
Operating income increased to $4.2 million in the fourth quarter
of 2015, compared with operating income of $2.5 million in the
fourth quarter of 2014. This increase reflected higher gross profit
margin and lower SG&A expenses as a percentage of revenue.
Depreciation and amortization expense was $5.9 million in the
fourth quarter of 2015 compared with $7.4 million in the fourth
quarter of 2014, due to the timing of assets becoming fully
depreciated in the prior year. Restructuring charges in the fourth
quarter of 2015 were $798,000 compared with restructuring charges
of $466,000 in the fourth quarter of 2014.
Interest expense decreased to $1.6 million in the fourth quarter
of 2015, compared with $1.9 million in the fourth quarter of 2014,
primarily due to the repayment of borrowings used to fund the 2014
acquisitions.
Net earnings in the fourth quarter of 2015 were $2.4 million,
compared with net earnings of $1.8 million in the fourth quarter of
2014.
Full Year 2015 Results
Net sales increased 16.4% to $567.1 million in 2015, compared
with $487.1 million in 2014. Excluding $96.0 million of incremental
net sales in 2015 attributable to last year's acquisitions, net
sales declined $16.0 million, or 4.5% in 2015 compared with 2014.
This decline was primarily due to lower sales of Bel's power
solutions and protection products, as well as certain magnetic and
connectivity products.
Operating income increased to $28.0 million in 2015, compared
with operating income of $13.5 million in 2014. This increase was
primarily due to the increase in net sales as well as the
improvement in gross profit margin and reduced SG&A expenses as
a percentage of net sales. Depreciation and amortization expense
increased to $23.0 million in 2015, compared with $20.4 million in
2014, primarily reflecting the impact of the 2014 acquisitions.
Operating income in 2015 included net realized gains from foreign
currency revaluation of approximately $5.1 million before taxes
(approximately $0.33 per Class A and Class B shares, net of taxes),
primarily due to the favorable impact of the weakening of the euro
against the U.S. dollar on a $34 million intercompany loan. As of
December 31, 2015, this intercompany loan was settled.
Interest expense increased to $7.6 million in 2015, compared
with $4.0 million in 2014. This increase was due to a full year of
interest expense on the borrowings used to fund the 2014
acquisitions.
Net earnings in 2015 were $18.7 million compared with net
earnings of $8.6 million in 2014.
Balance Sheet Data
As of December 31, 2015, working capital was $155.5 million,
including $85.0 million of cash and cash equivalents and a current
ratio of 2.2-to-1. Total debt obligations were $187.2 million. In
comparison, as of December 31, 2014, working capital was $188.9
million, including $77.1 million of cash and cash equivalents and
current ratio of 2.6-to-1 and total debt obligations of $232.6
million.
Conference Call
Bel has scheduled a conference call at 11:00 a.m. EST today. To
participate, dial (720) 545 0088, conference ID number: 49751011. 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 number:
49751011 after 1:00 p.m. EST.
About Bel
Bel (www.belfuse.com) designs, manufactures and markets a broad
array of products that power, protect and connect electronic
circuits. These products are primarily used in the networking,
telecommunications, computing, military, aerospace, transportation
and broadcasting industries. Bel's product groups include Magnetic
Solutions (integrated connector modules, power transformers, power
inductors and discrete components), Power Solutions and Protection
(front-end, board-mount and industrial power products, module
products and circuit protection), and Connectivity Solutions
(expanded beam fiber optic, copper-based, RF and RJ connectors 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 annual cost savings, Bel’s ability
to achieve its goals in future periods, revenue and profitability
growth, the outlook for Bel Power Solutions for 2016 and the
cohesion and productivity of Bel’s US based Connectivity management
team) are forward-looking statements (as described under the
Private Securities Litigation Reform Act of 1995) 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 identified in the supplementary
information to this press release 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, otherwise
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)(2)
Condensed Consolidated Statements of Operations (in thousands,
except per share amounts) (unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2015
2014
2015
2014
Net sales
$
135,246
$
148,650
$
567,080
$
487,076
Cost of sales
109,617
121,091
458,667
399,721
Gross profit
25,629
27,559
108,413
87,355
As a % of net sales
18.9
%
18.5
%
19.1
%
17.9
%
Selling, general and administrative
expenses
20,646
24,576
78,309
72,051
As a % of net sales
15.3
%
16.5
%
13.8
%
14.8
%
Restructuring charges
798
466
2,114
1,832
Income from operations
4,185
2,517
27,990
13,472
As a % of net sales
3.1
%
1.7
%
4.9
%
2.8
%
Interest expense
(1,623
)
(1,854
)
(7,588
)
(3,978
)
Interest income and other, net
22
155
4,720
276
Earnings before provision (benefit) for
income taxes
2,584
818
25,122
9,770
Provision (benefit) for income taxes
174
(957
)
6,410
1,167
Effective tax rate
6.7
%
-117.1
%
25.5
%
11.9
%
Net earnings available to common
stockholders
$
2,410
$
1,775
$
18,712
$
8,603
As a % of net sales
1.8
%
1.2
%
3.3
%
1.8
%
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
9,710
9,703
9,698
9,491
Net earnings per common share:
Class A common shares - basic and
diluted
$
0.19
$
0.14
$
1.49
$
0.69
Class B common shares - basic and
diluted
$
0.21
$
0.15
$
1.59
$
0.75
(1) The supplementary information included in
this press release for 2015 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. Some prior period amounts
have been reclassified to conform to the current year presentation.
These reclassifications, individually and in the aggregate, had no
impact on our consolidated statements of operations. (2) The
2014 Condensed Consolidated Statements of Operations have been
revised to reflect measurement period adjustments recorded during
2015 for the acquisition of Power Solutions. The measurement period
adjustments primarily relate to the finalization of the valuations
of property and equipment and intangible assets and deferred taxes
and these revisions were not considered material.
Bel Fuse Inc. Supplementary Information(1)(2) Condensed
Consolidated Balance Sheets (in thousands, unaudited)
December 31,
2015
2014
Assets
Current assets:
Cash and cash equivalents
$
85,040
$
77,138
Accounts receivable, net
86,268
99,605
Inventories
98,194
113,630
Other current assets
15,737
20,283
Total current assets
285,239
310,656
Property, plant and equipment, net
57,611
69,261
Goodwill and other intangible assets,
net
209,461
213,871
Other assets
34,080
41,633
Total assets
$
586,391
$
635,421
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable
$
49,798
$
61,926
Current portion of long-term debt
32,525
13,438
Other current liabilities
47,449
46,438
Total current liabilities
129,772
121,802
Long-term debt
154,663
219,187
Other liabilities
69,391
70,159
Total liabilities
353,826
411,148
Stockholders' equity
232,565
224,273
Total liabilities and stockholders'
equity
$
586,391
$
635,421
(1) The supplementary information included in this press
release for 2015 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. Some prior period amounts have
been reclassified to conform to the current year presentation.
These reclassifications, individually and in the aggregate, had no
impact on our condensed consolidated balance sheets. (2) The
December 31, 2014 Condensed Consolidated Balance Sheet has been
revised to reflect measurement period adjustments recorded during
2015 for the acquisition of Power Solutions. The measurement period
adjustments primarily relate to the finalization of the valuations
of property and equipment and intangible assets and deferred taxes.
These revisions were not considered material to the Condensed
Consolidated Balance Sheet.
Bel Fuse Inc.
Supplementary Information(1) Reconciliation of U.S. GAAP Net
Earnings Available to Common Stockholders to Non U.S. GAAP
EBITDA(2) (in thousands, unaudited)
Three Months Ended Year Ended
December 31, December 31, 2015 2014 2015 2014
U.S. GAAP net earnings available to common
stockholders
$
2,410
$
1,775
$
18,712
$
8,603
Interest expense
1,623
1,854
7,588
3,978
Provision (benefit) for income taxes
174
(957
)
6,410
1,167
Depreciation and amortization
5,884
7,380
23,008
20,367
Non U.S. GAAP EBITDA $ 10,091 $ 10,052
$ 55,718 $ 34,115
% of net sales
7.5
%
6.8
%
9.8
%
7.0
%
(1) The supplementary information included in this
press release for 2015 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) In this supplemental information, we
have included non U.S. GAAP financial measures, including Non-U.S.
GAAP EPS and EBITDA. We present results adjusted to exclude the
effects of certain specified items and their related tax impact
that would otherwise be included under U.S GAAP, to aid in
comparisons with other periods. We may use non U.S. GAAP financial
measures to determine performance-based compensation and management
believes that this information may be useful to investors.
The following tables reconcile our US GAAP net
earnings per common Class A and Class B basic and diluted shares
("US GAAP EPS") to Non US GAAP net earnings per common Class A and
Class B basic and diluted shares ("Non US GAAP EPS"). Amounts in
thousands, except per share data, unaudited.
Three Months Ended December 31,
Year Ended December 31,
2015
2014
2015
2014
Class A
Class B
Class A
Class B
Class A
Class B
Class A
Class B
US GAAP EPS
$
0.19
$
0.21
$
0.14
$
0.15
$
1.49
$
1.59
$
0.69
$
0.75
Reconciling items (a)
0.05
0.05
0.24
0.27
(0.01
)
(0.01
)
0.86
0.91
Non US GAAP EPS
$
0.24
$
0.26
$
0.38
$
0.42
$
1.48
$
1.58
$
1.55
$
1.66
(a) The following tables detail the impact of certain unusual or
non-recurring items had on the Company's net earnings per common
Class A and Class B basic and diluted shares and the line items
these items were included on the condensed consolidated statements
of operations.
Three Months Ended December 31, 2015
Three Months Ended December 31, 2014
Reconciling Items
GrossImpact
TaxEffect
NetEarningsImpact
Class AEPSImpact
Class BEPSImpact
GrossImpact
TaxEffect
NetEarningsImpact
Class AEPSImpact
Class BEPSImpact
Restructuring charges
$
798
$
288
$
510
$
0.04
$
0.04
$
466
$
163
$
303
$
0.02
$
0.03
Acquisition related costs included in
selling general and administrative expenses
54
21
33
--
--
2,083
813
1,270
0.10
0.11
Acquisition related settlement payment
--
--
--
--
--
--
--
--
--
--
Information technology migration and
rebranding costs included in selling, general and administrative
expenses
186
66
120
0.01
0.01
1,017
381
636
0.05
0.05
Acquisition related inventory step-up
included in cost of sales
--
--
--
--
--
1,309
419
890
0.07
0.08
Total reconciling items
$
1,038
$
375
$
663
$
0.05
$
0.05
$
4,875
$
1,776
$
3,099
$
0.24
$
0.27
Year Ended December 31, 2015 Year Ended December 31,
2014
Reconciling Items
GrossImpact
TaxEffect
NetEarningsImpact
Class AEPSImpact
Class BEPSImpact
GrossImpact
TaxEffect
NetEarningsImpact
Class AEPSImpact
Class BEPSImpact
Restructuring charges
$
2,114
$
708
$
1,406
$
0.11
$
0.12
$
1,832
$
648
$
1,184
$
0.10
$
0.10
Acquisition related costs included in
selling general and administrative expenses
605
227
378
0.03
0.03
7,463
2,895
4,568
0.38
0.40
Acquisition related settlement payment
(4,233
)
(1,609
)
(2,624
)
(0.21
)
(0.22
)
--
--
--
--
--
Information technology migration and
rebranding costs included in selling, general and administrative
expenses
1,124
409
715
0.06
0.06
1,017
381
636
0.05
0.06
Acquisition related inventory step-up
included in cost of sales
--
--
--
--
--
5,948
1,885
4,063
0.33
0.35
Total
$
(390
)
$
(265
)
$
(125
)
$
(0.01
)
$
(0.01
)
$
16,260
$
5,809
$
10,451
$
0.86
$
0.91
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160218005398/en/
Investors:Neil Berkman
Associates310-477-3118info@berkmanassociates.comorBel Fuse
Inc.Daniel Bernstein, 201-432-0463Presidentir@belf.com
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