Bel Fuse Inc. (NASDAQ:BELFA) (NASDAQ:BELFB) today
announced preliminary unaudited financial results for the second
quarter and first half of 2011.
Highlights
- Sales increased 1.9% to a second
quarter record $79.2 million compared to $77.7 million for the
second quarter of 2010. For the first half, sales increased 12.5%
to $150.6 million compared to $133.8 million for the first half
last year.
- Second quarter results were impacted by
a charge of $2,599,000 related to two lawsuits, resulting in a net
loss for the quarter of $574,000, or $0.05 per diluted share.
Excluding litigation and certain other charges referenced below,
non-GAAP net earnings for this year's second quarter were $2.1
million, or $0.17 per diluted Class A share and $0.18 per diluted
Class B share.
- Cash and investments were $99.7 million
as of June 30, 2011, up $14.1 million since December 31, 2010.
CEO comments
"Strong shipments of modules and interconnect products drove
record revenue for the second quarter and first half of 2011. Bel's
growing modules product business, which typically has higher
material content and lower average profit margins, reduced the
second quarter gross margin percentage. Cash flow is healthy, as
evidenced by an increase of more than $14 million in our cash and
investments since the end of last year," said Daniel Bernstein,
Bel's President and CEO.
Second Quarter Results
For the three months ended June 30, 2011, net sales increased to
$79,173,000 compared to $77,732,000 for the second quarter of
2010.
Cost of sales increased to 82.6% of sales for the second quarter
of 2011, compared to 79.2% of sales for the second quarter of 2010,
primarily due to a shift in the product mix to sales of a higher
proportion of modules products comprising higher materials content
and lower profit margins than Bel's other product lines.
After litigation and other charges, the second quarter 2011 net
loss was $574,000, which included litigation charges of $2,824,000
($2,599,000 after tax) and costs associated with the Pulse proxy
initiative of $221,000 ($137,000 after tax). This compares to net
earnings for the second quarter of 2010 of $4,790,000, which
included severance and plant closure costs of $477,000 ($455,000
after tax) primarily related to the relocation of manufacturing
operations in China.
Excluding litigation and other charges referenced below in the
comparison of GAAP and non-GAAP measures, non-GAAP net income for
the second quarter of 2011 was $2,088,000. This compares to
non-GAAP net income for the second quarter of 2010 of $5,243,000,
adjusted to exclude severance and plant closure charges. A
reconciliation of non-GAAP to GAAP financial measures is provided
in the table attached to this press release.
The net loss per Class A common share for the second quarter of
2011 was $0.05, compared to net income per diluted Class A common
share of $0.39 for the second quarter of 2010. Adjusted to exclude
litigation and other charges, non-GAAP net earnings per diluted
Class A common share were $0.17 for the second quarter of 2011,
compared to non-GAAP net earnings per diluted Class A common share
of $0.43 for the second quarter of 2010, adjusted to exclude
severance and plant closure charges.
The net loss per Class B common share was $0.05 for the second
quarter of 2011, compared to net income per diluted Class B common
share of $0.42 for the second quarter of 2010. Adjusted to exclude
litigation and other charges, non-GAAP net earnings per diluted
Class B common share were $0.18 for the second quarter of 2011,
compared to non-GAAP net earnings per diluted Class B common share
of $0.45 for the second quarter of 2010, adjusted to exclude
severance and plant closure charges.
Excluding litigation and other charges, non-GAAP income from
operations for the second quarter of 2011 was $3,205,000. For the
second quarter of 2010, adjusted to exclude severance and plant
closure charges, non-GAAP income from operations was
$6,344,000.
Balance Sheet Data
As of June 30, 2011, Bel reported working capital of
$163,014,000, including cash, cash equivalents, and marketable
securities of $99,665,000, a current ratio of 4.2 to 1, total
long-term obligations of $11,256,000, and stockholders' equity of
$222,971,000. 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 to
1, total long-term obligations of $10,571,000, and stockholders'
equity of $220,333,000.
First Half Results
For the six months ended June 30, 2011, net sales increased to a
first-half record $150,576,000 compared to $133,801,000 for the
first six months of 2010. Net earnings were $2,670,000 for this
year's first half, compared to net earnings of $4,670,000 for the
same period last year. A full six months of results are included in
2011 for Cinch, which was acquired on January 29, 2010. Cinch's
January 2011 revenue accounted for $5.5 million of the first-half
increase in Bel's total net sales.
Net earnings per diluted Class A common share for the first six
months of 2011 were $0.21, compared to net earnings per diluted
Class A common share of $0.37 for the first six months of 2010.
Adjusted to exclude litigation and other charges, non-GAAP net
earnings per diluted Class A common share were $0.44 for the first
six months of 2011, compared to non-GAAP net earnings per diluted
Class A common share of $0.51 for the same period last year,
adjusted to exclude severance, plant closure and
acquisition-related charges.
Net earnings per diluted Class B common share were $0.23 for the
first six months of 2011, compared to net earnings per diluted
Class B common share of $0.41 for the first six months of 2010.
Adjusted to exclude litigation and other charges, non-GAAP net
earnings per diluted Class B common share were $0.47 for the first
six months of 2011, compared to non-GAAP net earnings per diluted
Class B common share of $0.55 for the first six months of 2010,
adjusted to exclude severance, plant closure and
acquisition-related charges.
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
#85759718. A simultaneous webcast is available from the Events and
Presentations link on 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 (404)
537-3406, conference ID #85759718 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.
Forward-Looking Statements
Except for historical information contained in this press
release, the matters discussed in this press release 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 Six Months Ended
June 30, June 30, 2011 2010*
2011 2010* (unaudited) (unaudited) Net sales $
79,173 $ 77,732 $ 150,576 $ 133,801 Costs and
expenses: Cost of sales 65,368 61,570 122,500 108,727 Selling,
general and administrative 10,421 10,291 20,478 19,480 Litigation
charges 3,224 -- 3,224 --
Total costs and expenses 79,013 71,861 146,202 128,207
Income from operations 160 5,871 4,374 5,594 Gain on sale of
investment 119 -- 119 -- Interest income and other, net
93 116 161 238 Earnings
before provision for income taxes 372 5,987 4,654 5,832
Provision for income taxes 946 1,197
1,984 1,162 Net (loss) earnings $ (574 ) $ 4,790 $
2,670 $ 4,670 (Loss) earnings per Class A common share basic
and diluted $ (0.05 ) $ 0.39 $ 0.21 $ 0.37 Weighted average
Class A common shares outstanding basic and diluted 2,175
2,175 2,175 2,175 (Loss)
earnings per Class B common share basic and diluted $ (0.05 ) $
0.42 $ 0.23 $ 0.41 Weighted average Class B common shares
outstanding basic and diluted 9,583 9,496
9,554 9,480
*
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) June 30, Dec. 31,
June 30, Dec. 31,
ASSETS
2011 2010
LIABILITIES & EQUITY 2011
2010 (unaudited) (audited)
(unaudited) (audited)
Current assets $ 213,210 $ 203,564 Current liabilities $ 50,196 $
46,268 Property, plant & equipment, net 42,365 44,793
Noncurrent liabilities 11,256 10,571 Goodwill and intangibles
15,585 15,555 Other assets 13,263 13,260
Stockholders' equity 222,971 220,333 Total
Assets $ 284,423 $ 277,172 Total Liabilities & Equity $ 284,423
$ 277,172
BEL FUSE INC. AND SUBSIDIARIES NON-GAAP
MEASURES (unaudited) (000s omitted, except for per share data)
Three Months Ended June 30, 2011
Six Months Ended June 30, 2011 Income Net
Net (loss) earnings
Net (loss) earnings
Income
Net earnings per
Net earnings per
from (loss)
per Class A common
per Class B common
from
Net
Class A common
Class B common
Operations
earnings(2)
share - diluted(3)
share - diluted(3)
Operations
earnings(2)
share - diluted(3)
share - diluted(3)
GAAP measures $ 160 $ (574 ) $ (0.05 ) $ (0.05 ) $ 4,374 $
2,670 $ 0.21
$
0.23
Severance costs -- -- -- -- 135 92 0.01 0.01 Litigation charges,
net 2,824 2,599 0.21 0.22 2,824 2,599 0.21 0.22 Costs associated
with Pulse proxy initiative 221 137 0.01 0.01 267 166 0.01 0.01
Gain on sales of Pulse shares, net of income tax --
(74 ) (0.01 ) (0.01 ) -- (74 )
(0.01 ) (0.01 )
Non-GAAP measures(1)
$
3,205
$
2,088
$
0.17
$
0.18
$
7,600
$
5,453
$
0.44
$
0.47
Three Months Ended June 30, 2010 Six Months
Ended June 30, 2010 Income
Net earnings per Net earnings per Income
Net earnings per
Net earnings per
from
Net
Class A common Class B common from
Net
Class A common
Class B common
Operations
earnings(2)
share - diluted(3)
share - diluted(3)
Operations
earnings(2)
share - diluted(3)
share - diluted(3)
GAAP measures $ 5,871 $ 4,790 $ 0.39 $ 0.42 $ 5,594 $ 4,670
$ 0.37 $ 0.41 Severance and plant closure costs 477 455 0.04 0.04
1,052 957 0.08 0.08 Acquisition-related costs and inventory-related
purchase accounting adjustments (4 ) (2 ) 0.00
0.00 1,074 666
0.05 0.06 Non-GAAP measures(1) $ 6,344
$ 5,243 $ 0.43 $ 0.45 $ 7,720 $ 6,293 $
0.51 $ 0.55
(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 gains on sales of investments, charges for
severance, factory closure, amounts paid or reserved for lawsuits,
inventory-related purchase accounting adjustments and
acquisition-related costs 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 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 (loss) per
share may not agree to the total due to rounding.
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