Bel Fuse Inc. (NASDAQ:BELFA) (NASDAQ:BELFB) today
announced preliminary unaudited financial results for the first
quarter of 2011.
First quarter highlights
- Sales increased 27% to a first quarter
record $71.4 million compared to $56.1 million for the first
quarter of 2010.
- Net earnings increased to $3.2 million
versus a net loss of $0.1 million (after charges of $1.2 million)
for the first quarter of 2010.
- Excluding charges, non-GAAP net
earnings for this year's first quarter were $0.27 per diluted Class
A share and $0.29 per diluted Class B share.
- Cost of sales decreased to 80.0% of
sales versus 84.1% for the first quarter of 2010.
- Cash and investments were approximately
$94.7 million as of March 31, 2011.
- Bel is soliciting proxies to elect two
independent nominees to the Board of Directors of Pulse Electronics
Corporation.
CEO comments
"The new year is off to a good start, led by solid shipments of
interconnect products and modules in the first quarter. Cinch
interconnect products performed extremely well during the quarter.
Within the modules product group, sales of both smart-grid and
DC-DC converter modules were particularly strong. Margins increased
as higher sales contributed to an increase in production efficiency
at our plants in China compared to the first quarter of 2010. With
improved profitability and strong cash flow, our cash and
investments increased by more than $9 million since the end of last
year to $94.7 million," said Daniel Bernstein, Bel's President and
CEO.
"Five years ago, representatives from Bel and Pulse began
discussing a framework for a potential business combination that we
believed made strong strategic sense and had the potential to
create more value than either company could achieve on its own.
Since 2008, Bel has repeatedly attempted to meet with Pulse's Board
to engage in serious discussions regarding a transaction, but each
time we were asked to wait. Until recently, we honored Pulse's
repeated requests to defer discussions; however, due to the rapidly
changing dynamics of our industry, we felt we could no longer
remain passive. As a result, we are soliciting proxies to elect two
director nominees to the Pulse Board of Directors at Pulse's 2011
Annual Meeting of Shareholders scheduled for May 18, 2011. These
highly qualified director nominees have no past affiliation with
Bel, were selected by an independent third party based on their
qualifications, and are solely concerned with pursuing the best
interests of Pulse shareholders," Bernstein added.
First Quarter Results
For the three months ended March 31, 2011, net sales increased
to a first quarter record $71,403,000 compared to $56,069,000 for
the first quarter of 2010. This year's first quarter net sales
included $16,700,000 attributable to Cinch Connectors, which was
acquired on January 29, 2010. For the period from its acquisition
to the end of the first quarter of 2010, revenue attributable to
Cinch Connectors was $9,900,000.
Cost of sales decreased to 80.0% of sales for the first quarter
of 2011, compared to 84.1% of sales for the first quarter of
2010.
Net earnings for the first quarter of 2011 were $3,244,000,
which were net of severance charges of $135,000 ($92,000 after
tax). This compares to a net loss for the first quarter of 2010 of
$120,000. The net loss for the first quarter of 2010 included
$575,000 ($502,000 after tax) of severance charges and $1,078,000
($668,000 after tax) of costs related to the Cinch Connectors
acquisition.
Excluding severance charges, non-GAAP net income for the first
quarter of 2011 was $3,336,000. This compares to non-GAAP net
income for the first quarter of 2010 of $1,050,000, adjusted to
exclude severance charges and costs related to the Cinch Connectors
acquisition. A reconciliation of non-GAAP to GAAP financial
measures is provided in the table attached to this press
release.
Net earnings per diluted Class A common share for the first
quarter of 2011 were $0.26, compared to a net loss per Class A
common share of $0.02 for the first quarter of 2010. Adjusted to
exclude severance charges, non-GAAP net earnings per diluted Class
A common share were $0.27 for the first quarter of 2011, compared
to non-GAAP net earnings per diluted Class A common share of $0.08
for the first quarter of 2010, adjusted to exclude severance
charges and costs related to the Cinch Connectors acquisition.
Net earnings per diluted Class B common share were $0.28 for the
first quarter of 2011, compared to a net loss per Class B common
share of $0.01 for the first quarter of 2010. Adjusted to exclude
severance charges, non-GAAP net earnings per diluted Class B common
share were $0.29 for the first quarter of 2011, compared to
non-GAAP net earnings per diluted Class B common share of $0.09 for
the first quarter of 2010, adjusted to exclude severance charges
and costs related to the Cinch Connectors acquisition.
Excluding severance charges, non-GAAP income from operations for
the first quarter of 2011 was $4,349,000, including non-GAAP
operating income of approximately $1,804,000 at Cinch Connectors.
For the first quarter of 2010, adjusted to exclude severance
charges and costs related to the Cinch Connectors acquisition,
non-GAAP income from operations was $1,376,000, including non-GAAP
operating income of approximately $565,000 at Cinch Connectors.
Balance Sheet Data
As of March 31, 2011, Bel reported working capital of
$162,442,000, including cash, cash equivalents, and marketable
securities of $94,719,000, a current ratio of 5.1, total long-term
obligations of $10,990,000, and stockholders' equity of
$223,977,000. In comparison, as of December 31, 2010, Bel reported
working capital of $157,296,000, including cash, cash equivalents,
and marketable securities of $85,535,000, a current ratio of 4.4,
total long-term obligations of $10,571,000, and stockholders'
equity of $220,333,000.
Conference Call
Bel has scheduled a conference call at 11:00 a.m. EDT today. To
participate in the call, dial (720) 545-0088, conference ID
#60676668. A simultaneous webcast is available from the Events and
Presentations link of the Investor Info tab at www.belfuse.com. The
webcast will be available for replay, for a period of 20 days, at
this same Internet address. For a telephone replay, dial (706)
645-9291, conference ID #60676668 after 2:00 p.m. EDT.
About Bel
Bel (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, 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, passive jacks, plugs and high-speed cable assemblies).
The Company operates facilities around the world.
This communication does not constitute an offer to buy or
solicitation of an offer to sell any securities. No tender offer
for the shares of Pulse Electronics Corporation has commenced at
this time. In connection with the Company's proposal to acquire
Pulse, the Company may file tender offer documents with the U.S.
Securities and Exchange Commission ("SEC"). Any definitive tender
offer documents will be mailed to shareholders of Pulse. INVESTORS
AND SECURITY HOLDERS OF PULSE ARE URGED TO READ THESE AND OTHER
DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTION. Investors and security holders will
be able to obtain free copies of these documents (if and when
available) and other documents filed with the SEC by the Company
through the web site maintained by the SEC at
http://www.sec.gov.
Forward-Looking Statements
Except for historical information contained in this press
release, the matters discussed in this press release (including our
solicitation of proxies to elect our two director nominees to the
Board of Directors of Pulse Electronics Corporation) are forward
looking statements that involve risks and uncertainties. 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; capacity and supply
constraints or difficulties; product development, commercializing
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,
2011
2010*
(unaudited)
Net Sales
$
71,403
$
56,069
Costs and expenses:
Cost of sales
57,132
47,157
Selling, general and administrative
10,057
9,189
Total costs and expenses
67,189
56,346
Income (loss) from operations
4,214
(277
)
Interest income and other, net
68
122
Earnings (loss) before provision (benefit)
for income taxes
4,282
(155
)
Provision (benefit) for income taxes
1,038
(35
)
Net earnings (loss) $ 3,244 $ (120 ) Earnings (loss)
per Class A common share - basic and diluted $ 0.26 $ (0.02 )
Weighted average Class A common shares outstanding - basic
and diluted 2,175 2,175 Earnings (loss)
per Class B common share - basic and diluted $ 0.28 $ (0.01 )
Weighted average Class B common shares outstanding - basic
and diluted 9,526 9,464
*
Prior year amounts have been restated to
reflect adjustments previously reported during the measurement
period related to the Cinch acquisition as if all such adjustments
had been recognized on the date of acquisition.
CONDENSED CONSOLIDATED BALANCE SHEET DATA (000s
omitted) Mar. 31, Dec. 31, Mar. 31, Dec. 31,
ASSETS 2011
2010
LIABILITIES & EQUITY 2011 2010
(unaudited) (unaudited) Current
assets $ 202,171 $ 203,564 Current liabilities $ 39,729 $ 46,268
Property, plant & equipment, net 43,611 44,793 Noncurrent
liabilities 10,990 10,571 Goodwill & intangibles, net 15,638
15,555 Other assets 13,276 13,260 Stockholders'
equity 223,977 220,333 Total Assets $ 274,696
$ 277,172 Total Liabilities & Equity $ 274,696 $ 277,172
BEL FUSE INC. AND SUBSIDIARIES
NON-GAAP MEASURES (unaudited)
(000s omitted, except for per share
data)
Three Months Ended March 31, 2011
Income Net earnings Net
earnings from Net per Class A common per Class B common Operations
earnings(2)
share - diluted(3)
share - diluted(3)
GAAP measures
$
4,214
$
3,244
$
0.26
$
0.28
Severance costs
135
92
0.01
0.01
Non-GAAP measures(1)
$
4,349
$
3,336
$
0.27
$
0.29
Three Months Ended March 31, 2010
(Loss) income Net Net (loss) earnings Net (loss) earnings from
(loss) per Class A common per Class B common operations
earnings(2)
share - diluted(3)
share - diluted(3)
GAAP measures
$
(277
)
$
(120
)
$
(0.02
)
$
(0.01
)
Severance costs
575
502
0.04
0.04
Acquisition-related costs and
inventory-related purchase accounting adjustments
1,078
668
0.06
0.06
Non-GAAP measures(1)
$
1,376
$
1,050
$
0.08
$
0.09
(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 severance, acquisition-related costs
and inventory-related purchase accounting adjustments facilitates
comparisons of our results among reporting periods. We believe that
such amounts are not reflective of the relevant business in the
period in which the cost or adjustment is recorded for accounting
purposes. (2) Net of income tax at effective rate in the applicable
tax jurisdiction. (3) Individual amounts of earnings (loss) per
share may not agree to the total due to rounding.
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