Bel Reports Fourth Quarter and Full Year 2020 Results

JERSEY CITY, N.J., Feb. 18, 2021 (GLOBE NEWSWIRE) -- Bel Fuse Inc. (Nasdaq: BELFA and BELFB) today announced preliminary financial results for the fourth quarter and full year of 2020.

Fourth Quarter 2020 Highlights

Full Year 2020 Highlights

Subsequent Items

Non-GAAP financial measures, such as Non-GAAP net earnings, Non-GAAP EPS, EBITDA and Adjusted EBITDA, exclude a gain on sale of property, costs associated with ERP system implementation costs, restructuring charges, the impact of a non-cash goodwill impairment charge, and non-cash charges associated with the liquidation of foreign subsidiaries. Please refer to the financial information included with this press release for reconciliations of GAAP financial measures to Non-GAAP financial measures and our explanation of why we present Non-GAAP financial measures.

CEO Comments
Daniel Bernstein, President and CEO, said, "We are pleased to report another quarter of improved profitability versus what was experienced in 2019.  Our fourth quarter sales, while only marginally higher than in the fourth quarter of 2019, gave us margin benefits from a stronger mix of product, enabling a $5 million increase in gross profit on a $1 million increase in sales.  The Power Solutions and Protection group benefited from a full quarter of CUI sales and steady growth within e-mobility during the 2020 period, coupled with the elimination of low-margin power products from our portfolio.  Military sales grew by 60% from fourth quarter 2019, mitigating the impact of lower demand from our commercial aerospace products during the 2020 quarter.  While sales of our Magnetic Solution products were down 22% in the fourth quarter of 2020 as compared to the 2019 quarter, we saw a rebound in bookings for this group in the fourth quarter of 2020, a strong indicator for potential rebound in the near term.  

"On the cost side, Bel's continued dedication to and successful execution of its global cost reduction program has resulted in a streamlined organization and leaves the Company well-positioned for further margin expansion once overall sales rebound. During the fourth quarter, we sold our Switzerland facility at a gain of $1.9 million.  This facility closure and other actions implemented by the end of 2020 are expected to result in $4.4 million of cost savings in 2021, which will be incremental to the $6.1 million that we have already successfully taken out of our ongoing cost structure during the past year.  We are proud of the margin progress we’ve made, and still believe there is more benefit to come as demand in many of our markets continues to recover.

"In January 2021, Bel announced two acquisitions that are strategic to our future growth plans.  The acquisition of rms Connectors enabled us to increase our market share within the commercial aerospace end market, and we anticipate rms to be accretive to Bel's EBITDA by June 2021 as operations transition to a nearby Bel facility.  The acquisition of EOS Power, expected to close late in the first quarter, will broaden Bel's power product portfolio with industrial and medical products.  Importantly, this acquisition will extend our manufacturing footprint outside of China with a turnkey operation and will provide access to the fast-growing India market for all of Bel's products.  These two acquisitions, which were executed at favorable valuations for us, fit squarely into Bel's growth strategy by increasing market share while diversifying our product portfolios and geographic footprint.

"Visibility continues to be limited as a result of COVID and long lead times for semiconductors and certain components and these factors may affect our organic growth for 2021.  We believe, however, that the incremental contribution from the two new acquisitions coupled with continued actions under our global cost savings initiative will bode well for further profitability in the coming year," concluded Mr. Bernstein.
  
Conference Call
Bel has scheduled a conference call at 11:00 a.m. ET today.  To participate in the conference call, investors should dial 800-430-8332, or 323-289-6581 if dialing internationally. The presentation will additionally be broadcast live over the Internet and will be available at https://ir.belfuse.com/events-and-presentations. The webcast will be available via replay for a period of 20 days at this same Internet address.  For those unable to access the live call, a telephone replay will be available at 844-512-2921, or 412-317-6671 if dialing internationally, using access code 3388016 after 2:00 p.m. ET, also for 20 days.

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
Non-historical information contained in this press release (including the statements regarding potential rebound of Magnetic Solution and overall product sales, the anticipated impact of the global cost reduction initiative on Bel’s positioning for further margin expansion, anticipated cost savings resulting from the closing on the sale of the Switzerland facility, potential benefits to Bel’s margins resulting from recovery of demand in Bel’s markets, the anticipated impact of the rms Connectors acquisition including on Bel’s EBITDA, the anticipated impact of the EOS Power acquisition including the timing of the closing thereof, factors that may affect Bel’s organic growth for 2021 including continuing limited visibility as a result of COVID and long lead times for semiconductors and certain components, and the incremental contribution from the two new acquisitions coupled with the global cost savings initiative boding well for further profitability in the coming year) 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; the success of efforts to contain and otherwise respond to the Coronavirus; difficulties associated with integrating previously 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; our ongoing evaluation of the consequences of the U.S. Tax Cuts and Jobs Act; the impact of changes to U.S. trade and tariff policies; and the risk factors detailed from time to time in the Company's SEC reports. In light of the risks and uncertainties impacting our business, 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 identified in this press release as well as in the supplementary information to this press release (Non-GAAP net earnings, Non-GAAP EPS, EBITDA and Adjusted EBITDA) 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.  We present results adjusted to exclude the effects of certain unusual or special items and their related tax impact that would otherwise be included under U.S. GAAP, to aid in comparisons with other periods.  We may use Non-GAAP financial measures to determine performance-based compensation and management believes that this information may be useful to investors.

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.

[Financial tables follow]

Source: Bel Fuse Inc.