Bel Fuse Inc. (NASDAQ:BELFA) (NASDAQ:BELFB) today
announced preliminary unaudited financial results for the first
quarter of 2012.
First Quarter Highlights
- Sales for the first quarter of 2012
decreased 8.2% to $65.6 million compared to $71.4 million for the
first quarter of 2011.
- GAAP net earnings for the first quarter
of 2012 were $876,000, or $0.07 per diluted Class A share and $0.08
per diluted Class B share.
- Excluding certain charges detailed in
the table reconciling GAAP to non-GAAP financial measures attached
to this release, non-GAAP net earnings for the first quarter of
2012 were $1.1 million, or $0.09 per diluted Class A share and
$0.10 per diluted Class B share.
- Cash and investments were $91.9 million
as of March 31, 2012.
- Bel completed the acquisition of
GigaCom Interconnect AB, a supplier of expanded beam fiber optic
technology for aerospace markets.
- Bel launched a program to streamline
operations that is expected to save $4.2 million annually once
fully implemented later this year.
CEO comments
Daniel Bernstein, Bel's President and CEO, said, "Bel's first
quarter operating profit of $1.4 million was a sequential
improvement compared to the $1.1 million reported for the fourth
quarter of 2011, but was below the $4.2 million reported for last
year's first quarter as margins in our traditional connector,
magnetic and circuit protection businesses continued to be affected
by lower volume and higher material and labor costs while pricing
has not kept pace.
"We are encouraged by the solid performance turned in by Cinch
Connectors in the first quarter, driven by strength in its
commercial aerospace business in the U.S. and its military business
in Europe. In March we completed the acquisition of GigaCom
Interconnect AB, Gothenburg, Sweden, a supplier of expanded beam
fiber optic technology and a participant in the development of
next-generation commercial aircraft standards, which has become
part of Cinch. GigaCom's offering of expanded beam fiber optic
products, which are replacing traditional copper-based components
due to their superior performance, reliability and lighter weight,
should enhance Cinch's position in the growing aerospace
market.
"We also recently relocated our European R&D headquarters
for integrated electronic modules to a new high-technology center
in Maidstone, England. Module products are the fastest growing
segment of our business. As we turn our focus away from commodity
products, product development in non-commodity areas is key to the
success of our growth strategy. This new location is
well-recognized as a center for top engineering talent in the U.K.,
and should enable us to support more effectively our growing
international customer base.
"A decrease in legal expenses and bonus accruals in the first
quarter helped lower selling, general and administrative expenses
for the period compared to last year. We also began implementing
our plan to take advantage of a variety of operational
efficiencies, and recorded expenses related to these initiatives of
about $0.3 million in the first quarter. Over the next three
quarters, we plan to implement additional streamlining steps. We
currently estimate that the pre-tax costs associated with these
steps will be approximately an additional $4.5 million, although
the actual costs may differ. We anticipate that these steps will
result in annual savings of approximately $4.2 million."
First Quarter Results
For the three months ended March 31, 2012, net sales decreased
to $65,561,000 compared to $71,403,000 for the first quarter of
2011.
Cost of sales increased to 84.1% of sales for the first quarter
of 2012, compared to 80.0% of sales for the first quarter of 2011,
primarily due to lower volumes and higher material and labor costs
in Bel's connector, magnetic and circuit protection businesses.
Operating income for the first quarter of 2012 was $1,434,000,
compared to $4,214,000 for the first quarter of 2011. Excluding a
restructuring charge, severance and reorganization costs, loss on
disposal of property, plant and equipment, and acquisition and
other related costs detailed in the table reconciling GAAP to
non-GAAP financial measures attached to this release, non-GAAP
operating income was $1,870,000 for the first quarter of 2012,
compared to $4,349,000 for the first quarter of 2011.
Bel's effective tax rate was 42.0% for the first quarter of
2012, compared to 24.2% for the first quarter of 2011, reflecting
losses with no tax benefit in Asia, where tax rates are lower,
combined with profits in the U.S. and Europe.
Net earnings for the first quarter of 2012 were $876,000, which
included restructuring charges of $137,000 ($85,000 after tax),
severance and reorganization costs of $187,000 ($116,000 after
tax), loss on disposal of property, plant and equipment of $69,000
($43,000 after tax), and acquisition and other related costs of
$43,000 ($27,000 after tax). This compares to net earnings for the
first quarter of 2011 of $3,244,000, which included severance and
plant closing costs of $135,000 ($92,000 after tax).
Excluding the restructuring and other charges mentioned above,
non-GAAP net earnings for the first quarter of 2012 were
$1,147,000. This compares to non-GAAP net earnings for the first
quarter of 2011, excluding the above-mentioned severance and plant
closing costs, of $3,336,000.
Net earnings per Class A common share for the first quarter of
2012 were $0.07, compared to net earnings per Class A common share
of $0.26 for the first quarter of 2011. Adjusted to exclude the
amounts referenced above, non-GAAP net earnings per diluted Class A
common share were $0.09 for the first quarter of 2012, compared to
$0.27 for the first quarter of 2011.
Net earnings per Class B common share were $0.08 for the first
quarter of 2012, compared to net earnings per Class B common share
of $0.28 for the first quarter of 2011. Adjusted to exclude the
amounts referenced above, non-GAAP net earnings per diluted Class B
common share were $0.10 for the first quarter of 2012, compared to
$0.29 for the first quarter of 2011.
Balance Sheet Data
As of March 31, 2012, Bel reported working capital of
$163,528,000, including cash, cash equivalents and marketable
securities of $91,928,000, a current ratio of 4.7 to 1, total
long-term obligations of $13,465,000, and stockholders' equity of
$222,082,000. In comparison, at December 31, 2011, Bel reported
working capital of $165,264,000, including cash, cash equivalents,
and marketable securities of $93,972,000, a current ratio of 4.9 to
1, total long-term obligations of $13,406,000, and stockholders'
equity of $221,080,000.
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
#73306569. A simultaneous webcast is available from the Investors
link under the "About Bel" 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 #73306569, 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 (including the
statements regarding the effects and costs of, and the anticipated
savings resulting from, Bel's streamlining activities, the time
required to implement such streamlining activities, Cinch's place
in the aerospace market, anticipated changes in product offerings
and the Company's ability to support more effectively its growing
international customer base) 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,
2012
2011
(unaudited)
Net sales
$
65,561
$
71,403
Costs and expenses:
Cost of sales
55,132
57,132
Selling, general and administrative
8,789
10,057
Restructuring charge
137
--
Loss on disposal of property, plant and
equipment
69
--
Total costs and expenses
64,127
67,189
Income from operations
1,434
4,214
Interest income and other, net
76
68
Earnings before provision for income
taxes
1,510
4,282
Provision for income taxes
634
1,038
Net earnings
$
876
$
3,244
Earnings per Class A common share - basic
and diluted
$
0.07
$
0.26
Weighted average Class A common shares
outstanding
- basic and diluted
2,175
2,175
Earnings per Class B common share - basic
and diluted
$
0.08
$
0.28
Weighted average Class B common shares
outstanding
- basic and diluted
9,632
9,526
CONDENSED CONSOLIDATED BALANCE SHEET
DATA
(000s omitted)
Mar. 31,
Dec.31,
Mar. 31,
Dec.31,
ASSETS
2012
2011
LIABILITIES & EQUITY
2012
2011
(unaudited)
(unaudited)
Current assets
$
207,317
$
207,689
Current liabilities
$
43,789
$
42,425
Property, plant &
equipment, net
38,634
39,414
Noncurrent liabilities
13,465
13,406
Goodwill and intangibles
17,751
15,040
Other assets
15,634
14,768
Stockholders' equity
222,082
221,080
Total Assets
$
279,336
$
276,911
Total Liabilities & Equity
$
279,336
$
276,911
BEL FUSE INC. AND SUBSIDIARIES
NON-GAAP MEASURES (unaudited) (000s omitted, except for per share
data) Three Months Ended March 31, 2012 Income
from
operations
Net
earnings(2)
Net earnings per
Class A common
share - diluted(3)
Net earnings per
Class B common
share - diluted(3)
GAAP measures $ 1,434 $ 876 $ 0.07 $ 0.08 Restructuring
charge 137 85 0.01 0.01 Severance and reorganization costs 187 116
0.01 0.01 Loss on disposal of property, plant and equipment 69 43
0.00 0.00 Acquisition and other related costs 43 27
0.00 0.00 Non-GAAP measures(1) $ 1,870 $ 1,147
$ 0.09 $ 0.10 Three Months Ended March 31,
2011 Income
from
operations
Net
earnings(2)
Net earnings per
Class A common
share - diluted(3)
Net earnings per
Class B common
share - diluted(3)
GAAP measures $ 4,214 $ 3,244 $ 0.26 $ 0.28 Severance and
plant closure costs 135 92 0.01 0.01
Non-GAAP measures(1) $ 4,349 $ 3,336 $ 0.27 $ 0.29
(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
restructuring charges, severance, reorganization and plant closure
costs, loss on disposal of property, plant and equipment 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 per share may not agree
to the total due to rounding.
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