Bel Fuse Inc. (Nasdaq: BELFA and BELFB), a
designer, manufacturer and provider of products that power, protect
and connect electronic circuits, today announced preliminary
financial results for the second quarter of 2021.
Second Quarter 2021
Highlights
• |
Net sales increased 14.5% to $138.7 million from
$121.2 million in last year's second quarter |
• |
Gross profit of $34.2 million, or 24.7% of net
sales, compared to $31.3 million, or 25.8% of net sales in
Q2-20 |
• |
GAAP net earnings of $7.9 million, or EPS of $0.61 per Class A
share and $0.64 per Class B share, versus GAAP net earnings of
$5.6 million in Q2-20, or EPS of $0.43 per Class A share
and $0.46 per Class B share |
• |
Record backlog of $314 million on June 30, 2021 represents growth
of over 100% from December 31, 2020; record quarterly bookings of
$212 million, more than double the order volume compared to
Q2-20 |
Daniel Bernstein, President and CEO, said, “We
are pleased to report our second consecutive quarter of meaningful
year-over-year sales growth, reflecting higher sales volume across
all major product lines. Solid execution from each of our three
business units enabled us to grow our top line by $18 million for
the quarter while realizing an improvement in GAAP EPS of
approximately 40% and an improvement in non-GAAP EPS of almost 50%
as compared to the second quarter of 2020. Second quarter sales
reflected a recovery in demand from key sectors we serve,
particularly commercial aerospace, networking, military, e-Mobility
and industrial. Further, our acquisitions of rms and EOS earlier in
2021 contributed combined sales of $6 million and net
earnings of $1.0 million to Bel’s results during the
second quarter.
"The higher sales volume this quarter led
to improved fixed cost absorption and our margins also
continued to benefit from cost initiatives previously
implemented. In June 2021, the decision was made to discontinue our
low-margin modules product line and as a result, our modules design
and technical support center in Maidstone, UK will be closing later
in the third quarter of 2021. The closure of this facility is
expected to result in annual cost savings of approximately
$400,000.
"In the first quarter, Bel implemented
across-the-board price adjustments to offset labor and material
cost increases and we expect to continue to see these pricing
increases taking effect over the remainder of the year. With our
new CFO coming on board earlier in 2021, there is a heightened
focus on profit improvement and he will continue to
drive operational efficiencies through our global operations
in the pursuit of greater profitability for our stakeholders. We
enter the second half of 2021 with a record backlog of over $300
million, which we believe is indicative of higher sales this year,
subject to supply chain constraints that so far we have managed
well. IoT/5G, e-Mobility and the return of aerospace demand are
expected to be strong growth drivers for Bel for the foreseeable
future,” concluded Mr. Bernstein.
Non-GAAP financial measures, such as Non-GAAP
net earnings, Non-GAAP EPS, EBITDA and Adjusted EBITDA, exclude the
impact of acquisition-related costs, restructuring
charges and gain on sale of property. Please refer to the financial
information included with this press release for reconciliations of
GAAP financial measures to Non-GAAP financial measures and our
explanation of why we present Non-GAAP financial measures.
Conference CallBel has
scheduled a conference call at 11:00 a.m. ET today. To participate
in the conference call, investors should dial 866-248-8441,
or 323-289-6576 if dialing internationally. The presentation
will additionally be broadcast live over the Internet and will be
available at https://ir.belfuse.com/events-and-presentations.
The webcast will be available via replay for a period of 20 days at
this same Internet address. For those unable to access the live
call, a telephone replay will be available at 844-512-2921,
or 412-317-6671 if dialing internationally, using access
code 1881858 after 2:00 p.m. ET, also for 20 days.
About BelBel (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, medical, 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
StatementsNon-historical information contained in this
press release (including the statements regarding anticipated cost
savings resulting from the closure of Bel’s modules design and
technical support center in Maidstone, UK, expectations concerning
pricing adjustments taking effect and their impact on offsetting
labor and material cost increases, the Company’s plans, intentions,
expectations and efforts in connection with profit improvement and
maximization, operational efficiencies, and the pursuit of certain
opportunities and markets, expectations regarding backlog as an
indicator of sales, supply chain constraints and the Company's
ability to manage them, and anticipated future trends, plans and
results for the business including for the second half of 2021) 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 impact of public health crises (such as the
governmental, social and economic effects of COVID-19); the effects
of business and economic conditions; difficulties associated with
integrating previously 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; the impact of changes to U.S. trade and
tariff policies; and the risk factors detailed in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31,
2020, and from time to time in the Company's other SEC reports. In
light of the risks and uncertainties impacting our business, 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 MeasuresThe
Non-GAAP measures identified in this press release as well as in
the supplementary information to this press release (Non-GAAP net
earnings, Non-GAAP EPS, EBITDA and Adjusted EBITDA) 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.
We present results adjusted to exclude the effects of certain
unusual or special 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-GAAP financial measures to determine
performance-based compensation and management believes that this
information may be useful to investors.
Website InformationWe 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.
[Financial tables follow]
Bel Fuse Inc. |
Supplementary Information(1) |
Condensed Consolidated Statements of
Operations |
(in thousands, except per share amounts) |
(unaudited) |
|
Three Months Ended |
|
|
Six Months Ended |
|
|
June 30, |
|
|
June 30, |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
$ |
138,741 |
|
|
$ |
121,172 |
|
|
$ |
249,385 |
|
|
$ |
225,149 |
|
Cost of sales(2) |
|
104,537 |
|
|
|
89,882 |
|
|
|
190,241 |
|
|
|
168,104 |
|
Gross
profit |
|
34,204 |
|
|
|
31,290 |
|
|
|
59,144 |
|
|
|
57,045 |
|
As a % of net sales |
|
24.7 |
% |
|
|
25.8 |
% |
|
|
23.7 |
% |
|
|
25.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
costs |
|
5,464 |
|
|
|
6,116 |
|
|
|
10,384 |
|
|
|
12,175 |
|
Selling, general and
administrative expenses(2) |
|
21,828 |
|
|
|
19,079 |
|
|
|
43,569 |
|
|
|
39,772 |
|
As a % of net sales |
|
15.7 |
% |
|
|
15.7 |
% |
|
|
17.5 |
% |
|
|
17.7 |
% |
Restructuring charges |
|
277 |
|
|
|
44 |
|
|
|
277 |
|
|
|
172 |
|
Gain on sale of property |
|
- |
|
|
|
- |
|
|
|
(6,175 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations |
|
6,635 |
|
|
|
6,051 |
|
|
|
11,089 |
|
|
|
4,926 |
|
As a % of net sales |
|
4.8 |
% |
|
|
5.0 |
% |
|
|
4.4 |
% |
|
|
2.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(721 |
) |
|
|
(1,250 |
) |
|
|
(1,523 |
) |
|
|
(2,601 |
) |
Other income/expense,
net(2) |
|
113 |
|
|
|
1,195 |
|
|
|
660 |
|
|
|
(905 |
) |
Earnings before income
taxes |
|
6,027 |
|
|
|
5,996 |
|
|
|
10,226 |
|
|
|
1,420 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Benefit from) provision for
income taxes |
|
(1,853 |
) |
|
|
423 |
|
|
|
(854 |
) |
|
|
(349 |
) |
Effective tax rate |
|
-30.7 |
% |
|
|
7.1 |
% |
|
|
-8.4 |
% |
|
|
-24.6 |
% |
Net
earnings |
$ |
7,880 |
|
|
$ |
5,573 |
|
|
$ |
11,080 |
|
|
$ |
1,769 |
|
As a % of net sales |
|
5.7 |
% |
|
|
4.6 |
% |
|
|
4.4 |
% |
|
|
0.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common shares - basic
and diluted |
|
2,145 |
|
|
|
2,145 |
|
|
|
2,145 |
|
|
|
2,145 |
|
Class B common shares - basic
and diluted |
|
10,237 |
|
|
|
10,178 |
|
|
|
10,220 |
|
|
|
10,151 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common shares - basic
and diluted |
$ |
0.61 |
|
|
$ |
0.43 |
|
|
$ |
0.85 |
|
|
$ |
0.13 |
|
Class B common shares - basic
and diluted |
$ |
0.64 |
|
|
$ |
0.46 |
|
|
$ |
0.91 |
|
|
$ |
0.15 |
|
(1) The supplementary information included in this press release
for 2021 is preliminary and subject to change prior to the filing
of our upcoming Quarterly Report on Form 10-Q with the Securities
and Exchange Commission. |
(2) During the fourth quarter of 2020, the Company
changed its financial statement presentation related to gain/loss
on its SERP investments. These gains/losses were previously
included within cost of sales and selling, general and
administrative expense. For the three and six months ended June 30,
2020 presented above, a total of $1.5 million in gains and $0.5
million in losses, respectively, on SERP investments have been
reclassified from cost of sales and selling, general and
administrative expense and are now included within other
income/expense, net. |
Bel Fuse Inc. |
Supplementary Information(1) |
Condensed Consolidated Balance Sheets |
(in thousands, unaudited) |
|
June 30, 2021 |
|
|
December 31, 2020 |
|
Assets |
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
66,425 |
|
|
$ |
84,939 |
|
Accounts receivable, net |
|
86,917 |
|
|
|
71,372 |
|
Inventories |
|
116,170 |
|
|
|
100,133 |
|
Other current assets |
|
29,915 |
|
|
|
23,771 |
|
Total current assets |
|
299,427 |
|
|
|
280,216 |
|
Property, plant and equipment,
net |
|
36,747 |
|
|
|
34,501 |
|
Right-of-use assets |
|
11,066 |
|
|
|
14,217 |
|
Goodwill and other intangible
assets, net |
|
90,833 |
|
|
|
89,755 |
|
Other assets |
|
35,806 |
|
|
|
35,177 |
|
Total
assets |
$ |
473,879 |
|
|
$ |
453,866 |
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
53,020 |
|
|
$ |
39,774 |
|
Current portion of long-term
debt |
|
8,273 |
|
|
|
5,286 |
|
Operating lease liability,
current |
|
5,980 |
|
|
|
6,591 |
|
Other current liabilities |
|
37,820 |
|
|
|
35,885 |
|
Total current liabilities |
|
105,093 |
|
|
|
87,536 |
|
Long-term debt |
|
104,656 |
|
|
|
110,294 |
|
Operating lease liability,
long-term |
|
5,351 |
|
|
|
8,064 |
|
Other liabilities |
|
62,182 |
|
|
|
62,173 |
|
Total liabilities |
|
277,281 |
|
|
|
268,067 |
|
Stockholders' equity |
|
196,598 |
|
|
|
185,799 |
|
Total liabilities and
stockholders' equity |
$ |
473,879 |
|
|
$ |
453,866 |
|
(1) The supplementary information included in this press release
for 2021 is preliminary and subject to change prior to the filing
of our upcoming Quarterly Report on Form 10-Q with the Securities
and Exchange Commission. |
Bel Fuse Inc. |
Supplementary Information(1) |
Reconciliation of GAAP Net Earnings to EBITDA and Adjusted
EBITDA(2) |
(in thousands, unaudited) |
|
Three Months Ended |
|
|
Six Months Ended |
|
|
June 30, |
|
|
June 30, |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net earnings |
$ |
7,880 |
|
|
$ |
5,573 |
|
|
$ |
11,080 |
|
|
$ |
1,769 |
|
Interest expense |
|
721 |
|
|
|
1,250 |
|
|
|
1,523 |
|
|
|
2,601 |
|
(Benefit from) provision for
income taxes |
|
(1,853 |
) |
|
|
423 |
|
|
|
(854 |
) |
|
|
(349 |
) |
Depreciation and
amortization |
|
4,267 |
|
|
|
4,108 |
|
|
|
8,478 |
|
|
|
8,234 |
|
EBITDA |
$ |
11,015 |
|
|
$ |
11,354 |
|
|
$ |
20,227 |
|
|
$ |
12,255 |
|
% of net sales |
|
7.9 |
% |
|
|
9.4 |
% |
|
|
8.1 |
% |
|
|
5.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unusual or special
items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of property |
|
- |
|
|
|
- |
|
|
|
(6,175 |
) |
|
|
- |
|
Restructuring charges |
|
277 |
|
|
|
44 |
|
|
|
277 |
|
|
|
172 |
|
Acquisition-related costs |
|
317 |
|
|
|
- |
|
|
|
483 |
|
|
|
186 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
$ |
11,609 |
|
|
$ |
11,398 |
|
|
$ |
14,812 |
|
|
$ |
12,613 |
|
% of net sales |
|
8.4 |
% |
|
|
9.4 |
% |
|
|
5.9 |
% |
|
|
5.6 |
% |
(1) The supplementary information included in this press release
for 2021 is preliminary and subject to change prior to the filing
of our upcoming Quarterly Report on Form 10-Q with the Securities
and Exchange Commission. |
(2) In this press release and supplemental information, we have
included Non-GAAP financial measures, including Non-GAAP net
earnings, Non-GAAP EPS, EBITDA and Adjusted EBITDA. We present
results adjusted to exclude the effects of certain specified 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
financial measures to determine performance-based compensation and
management believes that this information may be useful to
investors. |
Bel Fuse Inc. |
Supplementary Information(1) |
Reconciliation of GAAP Measures to Non-GAAP
Measures(2) |
(in thousands (except per share amounts),
unaudited) |
The following tables detail the impact that
certain unusual or special items had on the Company's net earnings
per common Class A and Class B basic and diluted shares ("EPS") and
the line items in which these items were included in the condensed
consolidated statements of operations.
|
Three Months Ended June 30, 2021 |
|
Three Months Ended June 30, 2020 |
Reconciling Items |
Earnings before taxes |
|
Benefit from income taxes |
|
Net earnings |
|
Class A EPS(3) |
|
Class B EPS(3) |
|
Earnings before taxes |
|
Provision for income taxes |
|
Net earnings |
|
Class A EPS(3) |
|
Class B EPS(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
measures |
$ |
6,027 |
|
$ |
(1,853 |
) |
$ |
7,880 |
|
$ |
0.61 |
|
$ |
0.64 |
|
$ |
5,996 |
|
$ |
423 |
|
$ |
5,573 |
|
$ |
0.43 |
|
$ |
0.46 |
Items included in SG&A
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related costs |
|
317 |
|
|
73 |
|
|
244 |
|
|
0.02 |
|
|
0.02 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
Gain on sale of property |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
Restructuring charges |
|
277 |
|
|
40 |
|
|
237 |
|
|
0.02 |
|
|
0.02 |
|
|
44 |
|
|
12 |
|
|
32 |
|
|
- |
|
|
- |
Non-GAAP
measures |
$ |
6,621 |
|
$ |
(1,740 |
) |
$ |
8,361 |
|
$ |
0.64 |
|
$ |
0.68 |
|
$ |
6,040 |
|
$ |
435 |
|
$ |
5,605 |
|
$ |
0.43 |
|
$ |
0.46 |
|
Six Months Ended June 30, 2021 |
|
Six Months Ended June 30, 2020 |
Reconciling
Items |
Earnings before taxes |
|
Benefit from income taxes |
|
Net earnings |
|
Class A EPS(3) |
|
Class B EPS(3) |
|
Earnings before taxes |
|
Benefit from income taxes |
|
Net earnings |
|
Class A EPS(3) |
|
Class B EPS(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
measures |
$ |
10,226 |
|
$ |
(854 |
) |
$ |
11,080 |
|
$ |
0.85 |
|
$ |
0.91 |
|
$ |
1,420 |
|
$ |
(349 |
) |
$ |
1,769 |
|
$ |
0.13 |
|
$ |
0.15 |
Items included in SG&A
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related costs |
|
483 |
|
|
111 |
|
|
372 |
|
|
0.03 |
|
|
0.03 |
|
|
186 |
|
|
43 |
|
|
143 |
|
|
0.01 |
|
|
0.01 |
Gain on sale of property |
|
(6,175 |
) |
|
- |
|
|
(6,175 |
) |
|
(0.48 |
) |
|
(0.50 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
Restructuring charges |
|
277 |
|
|
40 |
|
|
237 |
|
|
0.02 |
|
|
0.02 |
|
|
172 |
|
|
40 |
|
|
132 |
|
|
0.01 |
|
|
0.01 |
Non-GAAP
measures |
$ |
4,811 |
|
$ |
(703 |
) |
$ |
5,514 |
|
$ |
0.42 |
|
$ |
0.45 |
|
$ |
1,778 |
|
$ |
(266 |
) |
$ |
2,044 |
|
$ |
0.15 |
|
$ |
0.17 |
(1) The supplementary information included in this press release
for 2021 is preliminary and subject to change prior to the filing
of our upcoming Quarterly Report on Form 10-Q with the Securities
and Exchange Commission. |
(2) In this press release and supplemental information, we have
included Non-GAAP financial measures, including Non-GAAP net
earnings, Non-GAAP EPS, EBITDA and Adjusted EBITDA. We present
results adjusted to exclude the effects of certain specified 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
financial measures to determine performance-based compensation and
management believes that this information may be useful to
investors. |
(3) Individual amounts of earnings per share may not agree to the
total due to rounding. |
Investor Contact:Darrow Associatestel
516.419.9915pseltzberg@darrowir.com |
Company Contact:Lynn HutkinDirector of Financial
Reportingir@belf.com |
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