Bel Fuse Inc. (NASDAQ:BELFA) (NASDAQ:BELFB) today
announced preliminary unaudited financial results for the fourth
quarter and 2012.
Highlights
- For the fourth quarter of 2012, sales
increased 4.5% to $71.8 million compared to $68.6 million for the
fourth quarter of 2011. For 2012, sales decreased 2.9% to $286.6
million compared to $295.1 million for 2011.
- For the fourth quarter of 2012, the
GAAP net loss was $2.5 million, or $0.21 per Class A share and
$0.22 per Class B share, compared to GAAP net earnings of $82,000,
or $0.00 per Class A share and $0.01 per Class B share, for the
fourth quarter of 2011. For 2012, GAAP net earnings were $2.4
million, or $0.17 per diluted Class A share and $0.21 per diluted
Class B share, compared with GAAP net earnings of $3.8 million, or
$0.28 per diluted Class A share and $0.33 per diluted Class B
share, for 2011
- Restructuring charges of $3.1 million
for the fourth quarter of 2012 and $5.2 million for 2012 are
expected to result in annual operating cost reductions of about
$5.6 million beginning in 2013.
- For the fourth quarter of 2012,
non-GAAP net earnings which excludes restructuring charges,
acquisition costs and other charges increased to $979,000, compared
to non-GAAP net earnings which excludes restructuring charges,
litigation charges and other charges for the fourth quarter of 2011
of $395,000. For 2012, non-GAAP net earnings rose to $7,365,000
compared to $7,085,000 for 2011.
- The acquisitions of Gigacom
Interconnect, Fibreco Limited and Powerbox Italy completed in 2012
advance Bel's strategy to focus on sales of higher margin,
non-commodity products.
- Bel agreed to acquire the Transpower
magnetics business of TE Connectivity, which had 2012 sales of
about $75 million. Expected to close in the first quarter of 2013,
this acquisition will solidify Bel's position as a world leader in
integrated connector modules (ICMs).
- Purchased 279,000 Class B common shares
(for an aggregate cost of $4.9 million) in the fourth quarter of
2012 and 369,000 Class B common shares (for an aggregate cost of
$6.6 million) for all of 2012 under the $10 million common share
buyback program authorized by the Board in July 2012.
CEO comments
Daniel Bernstein, Bel's President and CEO, said, "In 2012, we
made substantial progress implementing our strategy to improve
Bel's short and long-term growth in revenue and profitability.
"Our first step was to immediately improve Bel's competitiveness
and profitability in our existing products. The restructuring
program we completed in 2012 was designed to reduce operating
expenses by about $5.6 million annually, beginning in 2013. Our
GAAP net loss for the fourth quarter of 2012 primarily reflects the
costs of this restructuring. On a non-GAAP basis, excluding costs
detailed in the table reconciling GAAP to non-GAAP financial
measures included in this release, net earnings for the fourth
quarter of 2012 more than doubled versus the same quarter last
year.
"We also agreed to acquire, for approximately $22.4 million in
cash, the Transpower magnetics business of TE Connectivity, which
had 2012 sales of approximately $75 million and is expected to be
accretive to Bel's earnings following the anticipated closing of
the transaction by the end of the first quarter of 2013. Included
in this acquisition are ICM products, including RJ45, 10/100
Gigabit, 10G, PoE/PoE+, MRJ21, RJ.5, a line of modules for
smart-grid applications and discrete magnetics. We expect this
expanded product line will double our sales of ICMs and related
components, enabling us to further improve Bel's cost structure and
enhance our competitive position in the market for ICM-related
components. At closing, Bel will also receive a license to produce
ICM products using TE's planar embedded magnetics technology.
"Our next step was to add product lines which have the potential
for significant growth over the next two to three years. A key
component of this plan was our recent acquisition of Milan-based
Powerbox, which is intended to add established AC-DC products to
our existing power portfolio. In addition to established products,
the Powerbox acquisition provides Bel with valuable design and
manufacturing capabilities which will supplement our skill sets in
Europe, China and the United States. We believe that over the next
few years, the AC-DC power transformer business can grow, through
our current customer base, to over $30 million of annual
revenue.
"The third stage of our growth plan includes development of
fiber optic products which we believe will become an industry
standard for aerospace military markets over a three to five-year
horizon. Two small but important acquisitions completed in 2012 set
the foundation for this initiative, and also contributed to sales
growth in the fourth quarter of 2012. U.K.-based Fibreco and
Gigacom Interconnect AB have now been integrated into Bel's Cinch
Connectors business. We believe the combination of Fibreco's broad
range of expanded beam fiber-based connectors and Gigacom's
expanded beam EBOSATM products will enable Cinch to be a leader in
fiber connector technology. Because of the quality, reliability and
weight benefits of fiber products in comparison to copper
components currently being used in the aerospace and military
markets, we see significant growth opportunities in this area. The
mil/aerospace market can represent as much as a third of Bel's
total sales within five years.
"Taken together, these actions have set a clear strategy for the
Company over the next five years."
Fourth Quarter Results
For the three months ended December 31, 2012, net sales
increased to $71,752,000 compared to $68,642,000 for the fourth
quarter of 2011, reflecting the contributions of the acquired
businesses as well as higher sales of magnetics and circuit
products, partially offset by lower modular product sales. Cost of
sales decreased to 84.3% of sales for the fourth quarter of 2012,
compared to 85.1% of sales for the fourth quarter of 2011.
The operating loss for the fourth quarter of 2012 was
$3,117,000, compared to operating income for the fourth quarter of
2011 of $1,084,000. Excluding costs detailed in the table
reconciling GAAP to non-GAAP financial measures included in this
release, non-GAAP operating income was $928,000 for the fourth
quarter of 2012, compared to $1,301,000 for the fourth quarter of
2011.
The net loss for the fourth quarter of 2012 included an income
tax benefit of $688,000, the result of pre-tax losses during the
quarter. For the fourth quarter of 2011, income tax expense was
$1,078,000.
The net loss for the fourth quarter of 2012 was $2,537,000,
compared to net earnings for the fourth quarter of 2011 of
$82,000.
Excluding the charges detailed in the table reconciling GAAP to
non-GAAP financial measures mentioned above, non-GAAP net earnings
for the fourth quarter of 2012 were $979,000. This compares to
non-GAAP net earnings for the fourth quarter of 2011, excluding
charges detailed in the reconciliation table, of $395,000.
The net loss per Class A common share for the fourth quarter of
2012 was $0.21, compared to net earnings per diluted Class A common
share of $0.00 for the fourth quarter of 2011. Adjusted to exclude
the amounts referenced above, non-GAAP net earnings per diluted
Class A common share were $0.08 for the fourth quarter of 2012,
compared to $0.10 for the fourth quarter of 2011.
The net loss per Class B common share was $0.22 for the fourth
quarter of 2012, compared to net earnings per diluted Class B
common share of $0.01 for the fourth quarter of 2011. Adjusted to
exclude the amounts referenced above, non-GAAP net earnings per
diluted Class B common share were $0.09 for the fourth quarter of
2012, compared to $0.11 for the fourth quarter of 2011.
Balance Sheet Data
As of December 31, 2012, Bel reported working capital of
$144,748,000, including cash, cash equivalents and marketable
securities of $71,264,000, a current ratio of 4.1-to-1, total
long-term obligations of $13,439,000, and stockholders' equity of
$215,391,000. 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.
Twelve Month Results
For the twelve months ended December 31, 2012, net sales
decreased to $286,594,000 compared to $295,121,000 for 2011. Net
earnings for 2012 were $2,402,000, compared to net earnings for
2011 of $3,764,000.
Net earnings per diluted Class A common share for 2012 were
$0.17, compared to $0.28 for 2011. Adjusted to exclude various
amounts, detailed in the reconciliation table included in this
release, non-GAAP net earnings per diluted Class A common share
were $0.58 for 2012, compared to non-GAAP net earnings per diluted
share of $0.56 for 2011.
Net earnings per diluted Class B common share for 2012 were
$0.21, compared to $0.33 for 2011. Adjusted to exclude the amounts
referenced above, non-GAAP net earnings per diluted Class B common
share were $0.63 for 2012, compared to $0.61 for 2011.
Conference Call
Bel has scheduled a conference call at 11:00 a.m. EST today. To
participate in the call, dial (720) 545-0088, conference ID
#88040702. 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 #88040702, after 2:00 p.m. EST.
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 and AC-DC power
supplies, 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, fiber optic 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 future impact of restructuring charges
taken during 2012; the timing of the closing of the acquisition of
the Transpower magnetics business of TE Connectivity and the
parties' abilities to satisfy all conditions of closing with
respect to that acquisition; the impact of that acquisition on
Bel's ICM sales and business, on Bel's cost structure and on Bel's
competitive position; the expected accretive nature of that
acquisition; the impact of the Powerbox acquisition on the future
growth of Bel's AC-DC power transformer business; the future
revenues of Bel's AC-DC power transformer business; the potential
contribution of fiber optic products to Bel's future operating
results; the potential growth in Bel's sales to the aerospace
market; the anticipated effects of the three aspects of Bel's
growth plan on Bel's ability to achieve near-term improvements in
profitability, on Bel's competitive position in high-volume
commodity components, on Bel's technology base and on Bel's ability
to expand its portfolio of non-commodity technologically advanced
components; and the potential for non-commodity technologically
advanced components to become the primary drivers of Bel's future
sales and earnings) are forward-looking statements 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, 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 Twelve Months Ended December 31, December 31,
2012 2011 2012 2011
(unaudited) (unaudited) Net sales $ 71,752 $
68,642 $ 286,594 $ 295,121 Costs and expenses: Cost of sales
60,505 58,384 240,092 244,749 Selling, general and administrative
11,207 8,957 39,343 39,284 Litigation charges -- -- 26 3,471
Restructuring charges 3,085 314 5,245 314 Loss (gain) on disposal
of property, plant and equipment 72 (97 )
183 (93 ) Total costs and expenses
74,869 67,558 284,889
287,725 (Loss) income from operations (3,117 )
1,084 1,705 7,396 (Loss) gain on investment (142 ) -- (917 ) 119
Interest expense (14 ) -- (16 ) -- Interest income and other, net
48 76 266 357
(Loss) earnings before (benefit) provision for income
taxes (3,225 ) 1,160 1,038 7,872 (Benefit) provision for income
taxes (688 ) 1,078 (1,364 )
4,108 Net (loss) earnings $ (2,537 ) $ 82 $
2,402 $ 3,764 (Loss) earnings per Class A
common share - basic and diluted $ (0.21 ) $ 0.00 $ 0.17
$ 0.28 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 $ (0.22 ) $
0.01 $ 0.21 $ 0.33 Weighted average
Class B common shares outstanding - basic and diluted 9,493
9,637 9,625 9,598
CONDENSED CONSOLIDATED BALANCE SHEET DATA (000s
omitted) Dec. 31, Dec. 31,
Dec. 31, Dec. 31,
ASSETS 2012 2011
LIABILITIES & EQUITY 2012 2011
(unaudited) (unaudited) (unaudited) (unaudited)
Current assets $ 191,136 $ 207,689 Current liabilities $
46,388 $ 42,425 Property, plant & equipment, net 34,988 39,414
Noncurrent liabilities 13,439 13,406 Goodwill and intangibles
35,181 15,040 Other assets 13,913 14,768
Stockholders' equity 215,391 221,080 Total
Assets $ 275,218 $ 276,911 Total Liabilities & Equity $ 275,218
$ 276,911
BEL FUSE INC. AND SUBSIDIARIES NON-GAAP
MEASURES (unaudited) (000s omitted, except for per share data)
Three Months Ended December 31, 2012
Twelve Months Ended December 31, 2012 Income (loss) from
operations
Net (loss)
earnings(2)
Net (loss) earnings
per Class A common
share - diluted(3)
Net (loss) earnings
per Class B common
share - diluted(3)
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 $ (3,117 ) $ (2,537 ) $ (0.21 ) $ (0.22 ) $
1,705 $ 2,402 $ 0.17 $ 0.21 Restructuring charges,
severance and reorganization costs 3,381 2,171 0.18 0.19 6,075
4,067 0.33 0.35 Storm clean-up and damage to property, plant and
equipment 341 211 0.02 0.02 341 211 0.02 0.02 Gain on other
disposals of property, plant and equipment (202 ) (180 ) (0.01 )
(0.02
)
(91 ) (111 ) (0.01 ) (0.01 ) Acquisition-related costs 525 556 0.05
0.05 1,283 1,026 0.08 0.09 Impairment of Pulse shares, net of
income tax -- 382 0.03 0.03 -- 863 0.07 0.07 Expiration of tax
statutes of limitations and R&D credit, net --
376 0.03 0.03 --
(1,093 ) (0.09 ) (0.09 )
Non-GAAP measures(1) $ 928 $ 979 $ 0.08 $ 0.09
$ 9,313 $ 7,365 $ 0.58 $ 0.63
Three Months Ended December 31, 2011 Twelve Months
Ended December 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)
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 $ 1,084 $ 82 $ 0.00 $ 0.01 $ 7,396 $ 3,764 $ 0.28 $
0.33 Restructuring charges, severance and reorganization costs 314
234 -- -- 449 326 0.03 0.03 Litigation charges, net -- 139 0.02
0.02 3,071 2,961 0.24 0.25 Costs associated with Pulse proxy
initiative -- -- -- -- 267 166 0.01 0.01 Gain on sale of property,
plant and equipment (97 ) (60 ) -- -- (93 ) (58 ) -- -- Gain on
sale of Pulse shares, net of tax -- --
-- -- -- (74 )
(0.01 ) (0.01 ) Non-GAAP measures(1) $ 1,301
$ 395 $ 0.10 $ 0.11 $ 11,090 $
7,085 $ 0.56 $ 0.61 (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,
(loss) income from operations, net (loss) earnings, (loss) 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 restructuring, severance,
reorganization, losses on the disposal of property, plant and
equipment, costs related to Hurricane Sandy and acquisition-related
costs facilitates comparison of our results among reporting
periods. We believe that such amounts are not reflective of the
relevant business in the period in which the charge is recorded for
accounting purposes. (2) Net of income tax at effective rate
in the applicable tax jurisdiction. (3) Individual amounts
of net (loss) earnings per share may not agree to the total due to
rounding.
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