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Bel Fuse Reports Q1 Results

JERSEY CITY, N.J. — 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.

    {complink 9266|Bel Fuse Inc.}

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