Third Quarter Operating Income Increases 68% to
$7.3 Million from $4.4 Million Last Year
Bel Fuse Inc. (NASDAQ:BELFA and NASDAQ:BELFB) today
announced preliminary financial results for the third quarter and
first nine months of 2015.
Third Quarter Highlights
- Third quarter operating profit
increased 68% to $7.3 million compared with operating profit of
$4.4 million for the third quarter of 2014.
- Third quarter net sales decreased 7.8%
to $144.2 million compared with net sales of $156.3 million for the
third quarter of 2014.
- Third quarter net earnings per share -
"EPS" - was $0.39 per Class A share and $0.42 per Class B share
compared to EPS of $0.10 per Class A share and $0.11 per Class B
share for the third quarter of 2014.
Results include the results of Power Solutions, acquired in June
2014, and Connectivity Solutions, acquired in July and August 2014
from dates of acquisition.
CEO Comments
Commenting on Bel’s financial results, Dan Bernstein, President
and CEO, said, "Due to our strong cash flow we were able to reduce
Bel's debt to $197.7 million at September 30, 2015, a decrease of
$34.9 million since December 31, 2014. We are continuing to reduce
costs with the downsizing and consolidation of facilities in the
United States and Asia. In the third quarter the company recognized
$814,000 of restructuring charges for further consolidations that
are anticipated to generate additional annual savings of $3.5
million.
"Bel's Cinch Connectivity Solutions, which includes the
connectivity business acquired from Emerson on July 25, 2014,
posted slightly higher revenue for this year's third quarter than a
year ago primarily as a result of a full quarter of sales from the
acquired Emerson business. Incremental sales coupled with
significant progress made in reducing fixed costs resulted in a
solid quarter. We also are encouraged by the progress of our new
product development effort, where we successfully met key
milestones including first customer deliveries of next generation
aerospace products. Customer audits in our McAllen, Texas and
Reynosa, Mexico facilities also were completed successfully,
confirming our ability to accommodate the anticipated increase in
production of commercial aircraft.
"Bel's Power Solutions Group has reduced costs, increased
efficiencies and substantially improved quality over the past year.
This has resulted in new design wins for cloud computing/data
center applications, networking and other applications from new and
returning customers. We had anticipated shipping some of these new
products in the third quarter, but this did not occur. Bel's
decision to walk away from low margin products resulted in $8.0
million of the decrease in power solutions and protection sales in
the third quarter. With our world class engineering and
manufacturing, we remain confident that Power Solutions will be an
important growth engine for Bel in the future."
"Bel’s third quarter sales decline was in line with
industry-wide trends, and due to limited visibility in the
marketplace it is difficult to predict when sales will
improve."
Third Quarter 2015 Results
Net sales decreased 7.8% to $144.2 million compared to $156.3
million for the third quarter of 2014. Excluding $4.5 million of
incremental net sales for the third quarter of 2015 attributable to
last year's Connectivity Solutions acquisition, net sales declined
$16.7 million. This decline was primarily due to Bel’s decision to
walk away from low margin products resulting in lower sales volume
of Bel's power solutions and protection products. Bel also
experienced lower sales volumes in Magnetics products. These
declines were partially offset by increased sales volume of Custom
modules products.
Operating income increased to $7.3 million compared to operating
income for the third quarter of 2014 of $4.4 million, primarily
reflecting lower costs related to the 2014 acquisitions.
Depreciation and amortization expense decreased to $5.5 million for
the third quarter of 2015 from $6.5 million for the third quarter
of 2014, primarily due to the timing of assets becoming fully
depreciated in the prior year.
Interest income and other, net was $4.3 million primarily due to
the recognition of an acquisition-related settlement.
Net earnings for the third quarter of 2015 were $4.9 million
compared to net earnings for the third quarter of 2014 of $1.3
million.
Nine Months 2015 Results
Net sales increased 27.6% to $431.8 million compared to $338.4
million for the first nine months of 2014. Excluding $104.7 million
of incremental net sales for the first nine months of 2015
attributable to last year's acquisitions, net sales declined $11.3
million due to lower sales volume of Bel's Interconnect products
and DC/DC converters, partially offset by increased sales volume of
Custom modules.
Operating income increased to $23.8 million compared to
operating income for the first nine months of 2014 of $11.0
million, primarily reflecting lower costs related to the 2014
acquisitions. Depreciation and amortization expense increased to
$17.1 million for the first nine months of 2015 compared to $13.0
million for the first nine months of 2014, reflecting the
incremental impact of the 2014 acquisitions. Operating income for
the first nine months of 2015 included net unrealized gains from
foreign currency revaluation of approximately $5.6 million before
tax (approximately $0.37 per Class A and Class B shares net of
tax), primarily due to the favorable impact of the weakening of the
Euro against the U.S. dollar on a $34 million intercompany
loan.
Interest expense increased to $6.0 million as compared with $2.1
million for the first nine months of 2014 due to the issuance of
long-term debt in the second quarter of 2014 to fund the 2014
acquisitions.
Net earnings for the first nine months of 2015 were $16.3
million compared to net earnings for the first nine months of 2014
of $6.8 million.
Balance Sheet Data
As of September 30, 2015, Bel reported working capital of $176.6
million, including cash and cash equivalents of $76.3 million and a
current ratio of 2.5-to-1. Total debt obligations were $197.7
million. In comparison, as of December 31, 2014 Bel had working
capital of $188.9 million, including cash and cash equivalents of
$77.1 million, a current ratio of 2.6-to-1, and total debt
obligations of $232.6 million.
Conference Call
Bel has scheduled a conference call at 11:00 a.m. EDT today. To
participate, dial (720) 545 0088, conference ID #64102195. A
simultaneous webcast of the conference call may be accessed online
from the Events and Presentations link of the Investors page under
the "About Bel" tab at www.BelFuse.com. The webcast replay will be
available for a period of 20 days at this same Internet address.
For a telephone replay, dial (404) 537 3406, conference ID
#64102195 after 1:00 p.m. EDT.
About Bel
Bel (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, 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 Statements
Except for historical information contained in this press
release, the matters discussed in this press release (including the
statements regarding positioning Bel Power Solutions to be an
important growth engine for Bel in the future, an anticipated
increase in production of commercial aircraft and savings resulting
from restructuring effort) 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
effects of business and economic conditions; difficulties
associated with integrating recently 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; 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.
Non-GAAP Financial Measures
The Non-GAAP measures included in the supplementary information
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.
Website Information
We 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.
Bel Fuse Inc.
Supplementary
Information(1)(2)
Condensed Consolidated Statements of
Operations
(in thousands, except per share
amounts) (unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2015
2014
2015
2014
Net sales
$
144,161
$
156,341
$
431,834
$
338,426
Cost of sales
116,749
128,561
349,050
278,630
Gross profit
27,412
27,780
82,784
59,796
As a % of net sales
19.0
%
17.8
%
19.2
%
17.7
%
Selling, general and administrative
expenses
19,291
23,110
57,663
47,475
As a % of net sales
13.4
%
14.8
%
13.4
%
14.0
%
Restructuring charges
814
309
1,316
1,365
Income from operations
7,307
4,361
23,805
10,956
As a % of net sales
5.1
%
2.8
%
5.5
%
3.2
%
Interest expense
(1,792
)
(1,869
)
(5,965
)
(2,124
)
Interest income and other, net
4,278
21
4,698
121
Earnings before provision for income
taxes
9,793
2,513
22,538
8,953
Provision for income taxes
4,873
1,252
6,236
2,124
Effective tax rate
49.8
%
49.8
%
27.7
%
23.7
%
Net earnings available to common
stockholders
$
4,920
$
1,261
$
16,302
$
6,829
As a % of net sales
3.4
%
0.8
%
3.8
%
2.0
%
Weighted average number of shares
outstanding:
Class A common shares - basic and
diluted
2,175
2,175
2,175
2,175
Class B common shares - basic and
diluted
9,719
9,591
9,694
9,420
Net earnings per common share:
Class A common shares - basic and
diluted
$
0.39
$
0.10
$
1.30
$
0.55
Class B common shares - basic and
diluted
$
0.42
$
0.11
$
1.39
$
0.60
(1) The supplementary information included in this press release
for 2015 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. Some prior period amounts have been
reclassified to conform to the current year presentation. These
reclassifications, individually and in the aggregate, had no impact
on our consolidated statements of operations. (2) The 2014
Condensed Consolidated Statements of Operations has been revised to
reflect measurement period adjustments recorded during 2015 for the
acquisition of Power Solutions. The measurement period adjustments
primarily relate to the finalization of the valuations of property
and equipment and intangible assets and deferred taxes. These
revisions were not considered material to the Condensed
Consolidated Statements of Operations.
Bel Fuse
Inc. Supplementary Information(1) Condensed
Consolidated Balance Sheets (in thousands, unaudited)
September 30, December 31, 2015 2014
Revised(2) Assets Current assets: Cash
and cash equivalents $ 76,292 $ 77,138 Accounts receivable, net
92,866 99,605 Inventories, net 104,603 113,630 Other current assets
23,420 20,283 Total current assets 297,181 310,656
Property, plant and equipment, net 61,510 69,261 Goodwill
and other intangible assets, net 211,984 213,871 Other assets
35,267 41,633 Total assets $ 605,942 $ 635,421
Liabilities and Stockholders' Equity Current
liabilities: Accounts payable $ 51,621 $ 61,926 Current portion of
long-term debt 16,125 13,438 Other current liabilities
52,878 46,438 Total current liabilities 120,624 121,802
Long-term debt 181,594 219,187 Other liabilities
71,568 70,159 Total liabilities 373,786 411,148
Stockholders' equity 232,156 224,273 Total
liabilities and stockholders' equity $ 605,942 $ 635,421
(1) The supplementary information included in this press
release for 2015 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. Some prior period amounts have
been reclassified to conform to the current year presentation.
These reclassifications, individually and in the aggregate, had no
impact on our condensed consolidated balance sheets. (2) The
December 31, 2014 Condensed Consolidated Balance Sheet has been
revised to reflect measurement period adjustments recorded during
2015 for the acquisition of Power Solutions. The measurement period
adjustments primarily relate to the finalization of the valuations
of property and equipment and intangible assets and deferred taxes.
These revisions were not considered material to the Condensed
Consolidated Balance Sheet.
Bel Fuse Inc.
Supplementary Information(1) Reconciliation of
GAAP to Non GAAP Condensed Consolidated Statements of
Operations (in thousands, except per share amounts)
(unaudited)
Three Months Ended Three Months Ended September
30, 2015 September 30, 2014 Special
Non- Special Non- GAAP
Items(2) GAAP(3) GAAP
Items(2) GAAP(3) Net sales $
144,161 $ -- $ 144,161 $ 156,341 $ -- $ 156,341 Cost of sales
116,749 -- 116,749
128,561 (4,647 ) 123,914 Gross
profit 27,412 -- 27,412 27,780 (4,647 ) 32,427 As a % of net sales
19.0 % 19.0 % 17.8 % 20.7 % Selling, general and
administrative expenses 19,291 (252 ) 19,039 23,110 (3,854 ) 19,256
As a % of net sales 13.4 % 13.2 % 14.8 % 12.3 % Restructuring
charges 814 (814 ) -- 309
(309 ) -- Income from operations
7,307 1,066 8,373 4,361 8,810 13,171 As a % of net sales 5.1 % 5.8
% 2.8 % 8.4 % Interest expense (1,792 ) -- (1,792 ) (1,869 )
-- (1,869 ) Interest income and other, net 4,278
(4,233 ) 45 21 --
21 Earnings before provision for income taxes
9,793 (3,167 ) 6,626 2,513 8,810 11,323 Provision for income taxes
4,873 (1,232 ) 3,641 1,252 2,619 3,871 Effective tax rate
49.8 % 54.9 % 49.8 % 34.2 %
Net earnings available to common stockholders $ 4,920
$ (1,935 ) $ 2,985 $ 1,261 $ 6,191 $ 7,452
As a % of net sales
3.4
%
2.1
%
0.8
%
4.8
%
Weighted average number of shares outstanding: Class A
common shares - basic and diluted 2,175 2,175
2,175 2,175 Class B common
shares - basic and diluted 9,719 9,719
9,591 9,591 Net earnings per
common share: Class A common shares - basic and diluted $ 0.39
$ (0.15 ) $ 0.24 $ 0.10 $ 0.50 $ 0.60
Class B common shares - basic and diluted $ 0.42 $
(0.17 ) $ 0.25 $ 0.11 $ 0.53 $ 0.64
(1) The supplementary information included in this press
release for 2015 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) Special items
primarily consist of the following items:
Three Months
Ended Three Months Ended September 30, 2015
September 30, 2014 Gross Taxes Net of
taxes Gross Taxes Net of taxes
Restructuring charges $ 814 $ 283 $ 531 $ 309 $ 118 $ 191
Acquisition related costs included in
selling, general and administrative expenses
88 33 55 3,854 794 3,060 Acquisition related settlement payment
(4,233 ) (1,609 ) (2,624 ) -- -- --
Information technology migration and
rebranding costs included in selling, general and administrative
expenses
164 61 103 -- -- --
Acquisition related inventory step-up
included in cost of sales
--
--
--
4,647
882
3,765
Expiration of tax statutes of limitations, net --
-- -- --
825 (825 ) Total special items $ (3,167 ) $ (1,232 )
$ (1,935 ) $ 8,810 $ 2,619 $ 6,191
(3) In this press release and supplemental information, we
have included several non GAAP financial measures, including
Non-GAAP Cost of Sales, Non-GAAP Gross Profit, Non-GAAP Selling,
General and Administrative Expenses, Non-GAAP Income from
Operations, Non-GAAP Interest Income and other, Non-GAAP Earnings
Before Provision for Income Taxes, Non-GAAP Provision for Income
Taxes, Non-GAAP Net Earnings Available to Common Stockholders,
Non-GAAP earnings per share, and EBITDA. We may use such Non-GAAP
measures to determine performance-based compensation. Management
believes that this information may be useful to investors.
Bel Fuse Inc. Supplementary
Information(1) Reconciliation of GAAP to Non- GAAP
Condensed Consolidated Statements of Operations (in
thousands, except per share amounts) (unaudited)
Nine Months Ended Nine
Months Ended September 30, 2015 September 30,
2014 Special Non- Special
Non- GAAP Items(2)
GAAP(3) GAAP Items(2)
GAAP(3) Net sales $ 431,834 $ -- $ 431,834 $
338,426 $ -- $ 338,426 Cost of sales 349,050
-- 349,050 278,630 (4,647
) 273,983 Gross profit 82,784 -- 82,784 59,796
(4,647 ) 64,443 As a % of net sales 19.2 % 19.2 % 17.7 % 19.0 %
Selling, general and administrative expenses 57,663 (1,324 )
56,339 47,475 (5,372 ) 42,103 As a % of net sales 13.4 % 13.0 %
14.0 % 12.4 % Restructuring charges 1,316
(1,316 ) -- 1,365 (1,365 )
-- Income from operations 23,805 2,640 26,445
10,956 11,384 22,340 As a % of net sales 5.5 % 6.1 % 3.2 % 6.6 %
Interest expense (5,965 ) -- (5,965 ) (2,124 ) -- (2,124 )
Interest income and other, net 4,698 (4,233 )
465 121 -- 121
Earnings before provision for income taxes 22,538
(1,593 ) 20,945 8,953 11,384 20,337 Provision for income taxes
6,236 (702 ) 5,534 2,124 3,703 5,827 Effective tax rate 27.7
% 26.4 % 23.7 % 28.7 %
Net earnings available to common stockholders $ 16,302 $
(891 ) $ 15,411 $ 6,829 $ 7,681 $ 14,510
As a % of net sales 3.8 % 3.6 % 2.0 % 4.3 % Weighted
average number of shares outstanding: Class A common shares - basic
and diluted 2,175 2,175 2,175
2,175 Class B common shares - basic and
diluted 9,694 9,694 9,420
9,420 Net earnings per common share: Class A
common shares - basic and diluted $ 1.30 $ (0.07 ) $ 1.23
$ 0.55 $ 0.64 $ 1.19 Class B common
shares - basic and diluted $ 1.39 $ (0.08 ) $ 1.31 $
0.60 $ 0.67 $ 1.27 (1) The
supplementary information included in this press release for 2015
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) Special items primarily consist of
the following items:
Nine Months Ended Nine Months
Ended September 30, 2015 September 30, 2014
Gross Taxes Net of taxes Gross
Taxes Net of taxes Restructuring charges $
1,316 $ 420 $ 896 $ 1,365 $ 519 $ 846 Acquisition related costs
included in selling, general and administrative expenses 551 205
346 5,372 1,265 4,107 Acquisition related settlement payment (4,233
) (1,609 ) (2,624 ) -- -- -- Information technology migration and
rebranding costs included in selling, general and administrative
expenses 773 282 491 -- -- --
Acquisition related inventory step-up
included in cost of sales
--
--
--
4,647
882
3,765
Expiration of tax statutes of limitation, net --
-- -- -- 825
(825 ) Total special items $ (1,593 ) $ (702 ) $ (891
) $ 11,384 $ 3,703 $ 7,681 (3)
In this press release and supplemental information, we have
included several non-GAAP financial measures, including Non-GAAP
Cost of Sales, Non-GAAP Gross Profit, Non-GAAP Selling, General and
Administrative Expenses, Non-GAAP Income from Operations, Non-GAAP
Interest Income and other, Non-GAAP Earnings Before Provision for
Income Taxes, Non-GAAP Provision for Income Taxes, Non-GAAP Net
Earnings Available to Common Stockholders, Non-GAAP earnings per
share, and EBITDA. We may use such Non-GAAP measures to determine
performance-based compensation. Management believes that this
information may be useful to investors.
Bel Fuse Inc.
Supplementary
Information(1)
Reconciliation of GAAP Net
Earnings
Available to Common Stockholders to
Non- GAAP EBITDA(2)
(in thousands, unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2015
2014
2015
2014
GAAP Net earnings available to common
stockholders
$
4,920
$
1,260
$
16,302
$
6,828
Interest expense
1,792
1,869
5,965
2,124
Provision for income taxes
4,873
1,252
6,236
2,124
Depreciation and amortization
5,535
6,480
17,124
12,987
Non- GAAP Earnings Before Interest Taxes
Depreciation and Amortization
$
17,120
$
10,861
$
45,627
$
24,063
% of net sales
11.9
%
6.9
%
10.6
%
7.1
%
(1) The supplementary information included
in this press release for 2015 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 several non-GAAP financial measures,
including Non-GAAP Cost of Sales, Non-GAAP Gross Profit, Non-GAAP
Selling, General and Administrative Expenses, Non-GAAP Income from
Operations, Non-GAAP Interest Income and other, Non-GAAP Earnings
Before Provision for Income Taxes, Non-GAAP Provision for Income
Taxes, Non-GAAP Net Earnings Available to Common Stockholders,
Non-GAAP earnings per share, and EBITDA. We may use such Non-GAAP
measures to determine performance-based compensation. Management
believes that this information may be useful to investors.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151028005488/en/
Investors:Neil Berkman
Associates310-477-3118info@berkmanassociates.comorBel Fuse
Inc.Daniel Bernstein, 201-432-0463Presidentir@belf.com
Bel Fuse (NASDAQ:BELFA)
Historical Stock Chart
From Jun 2024 to Jul 2024
Bel Fuse (NASDAQ:BELFA)
Historical Stock Chart
From Jul 2023 to Jul 2024