Bel Reports Second Quarter 2024 Results
Continued Gross Margin Performance with
Provides Q3-24 Sales and Gross Margin Guidance
Second Quarter 2024 Highlights
- Net sales of
$133 .2 million compared to$168 .8 million in Q2-23 - Gross profit margin of 40.1%, up from 32.9% in Q2-23
- Net earnings of
$18 .8 million versus$27 .8 million in Q2-23 - Adjusted EBITDA of
$27.4 million (20.6% of sales) as compared to$28.6 million (17.0% of sales) in Q2-23 - Repurchased 126,552 shares of Bel stock at an aggregate cost of
$7.9 million in Q2-24
“We are pleased with our second quarter results, with sales achieving the higher end of our guidance coupled with continued margin improvement,” said
Farouq Tuweiq, CFO, added “Consistent with our views expressed last quarter, we expect more positive momentum closer to the end of 2024. Our Magnetic Solutions segment, while down from Q2-23, showed modest recovery sequentially from the first quarter of this year which is a positive sign. On the distribution front, the consensus takeaway from an industry conference in May was encouraging, and indicated that the worst is behind us.
“Looking to the third quarter, in addition to the typical seasonal slowdown in
Non-GAAP financial measures, such as Non-GAAP net earnings, Non-GAAP EPS, EBITDA and Adjusted EBITDA, adjust corresponding GAAP measures for provision for/benefit from income taxes, interest expense, and depreciation and amortization, and also exclude, where applicable for the covered period presented in the financial statements, certain unusual or special items identified by management such as restructuring charges, gains/losses on sales of businesses and properties and liquidation of foreign subsidiary, and certain litigation costs. Non-GAAP adjusted net sales exclude expedite fee revenue. 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.
Conference Call
Bel has scheduled a conference call for
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, general industrial, high-speed data transmission, military, commercial aerospace, transportation and eMobility industries. Bel's portfolio of products also finds application in the automotive, medical, broadcasting and consumer electronics markets. 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.
Company Contact:
Farouq Tuweiq
Chief Financial Officer
ir@belf.com
Investor Contact:
Three
631-418-4339
jyoung@threepa.com; shooser@threepa.com
Cautionary Language Concerning Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, our guidance for the third quarter of 2024, and our statements regarding our expectations for 2024 generally including anticipated financial performance, projections and trends for the remainder of the year and other future periods, and our statements regarding future events, performance, plans, intentions, beliefs, expectations and estimates, including statements regarding matters such as trends and expectations as to our sales, gross margin, products, product segments, customers, suppliers, end markets, distribution and inventory, statements regarding our views and expectations about positive momentum and recovery, statements regarding our expectations and beliefs regarding trends in the Company's business and industry and the broader economy and macroeconomic environment generally, statements regarding seasonal trends and the potential impact of trade restrictions, statements about the Company's and the team's focuses including with respect to growth and future development and success and other statements regarding the Company's positioning, its strategies, future progress, investments, plans, targets, goals, and other focuses and initiatives, and the expected timing and potential benefits thereof. These forward-looking statements are made as of the date of this release and are based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “forecast,” “outlook,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Bel’s control. Bel’s actual results could differ materially from those stated or implied in our forward-looking statements (including without limitation any of Bel’s projections) due to a number of factors, including but not limited to, the market concerns facing our customers, and risks for the Company’s business in the event of the loss of certain substantial customers; the continuing viability of sectors that rely on our products; the effects of business and economic conditions, and challenges impacting the macroeconomic environment generally and/or our industry in particular; the effects of rising input costs, and cost changes generally, including the potential impact of inflationary pressures; difficulties associated with integrating previously acquired companies; capacity and supply constraints or difficulties, including supply chain constraints or other challenges; the impact of public health crises (such as the governmental, social and economic effects of COVID or other future epidemics or pandemics); difficulties associated with the availability of labor, and the risks of any labor unrest or labor shortages; risks associated with our international operations, including our substantial manufacturing operations in
Non-GAAP Financial Measures
The Non-GAAP financial measures identified in this press release as well as in the supplementary information to this press release (Non-GAAP adjusted net sales, Non-GAAP net earnings, Non-GAAP EPS, EBITDA and Adjusted EBITDA) are not measures of performance under accounting principles generally accepted in
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,
Supplementary Information(1) Condensed Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited) |
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Three Months Ended | Six Months Ended | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Net sales | $ | 133,205 | $ | 168,777 | $ | 261,295 | $ | 341,121 | ||||||||
Cost of sales | 79,809 | 113,240 | 159,821 | 231,920 | ||||||||||||
Gross profit | 53,396 | 55,537 | 101,474 | 109,201 | ||||||||||||
As a % of net sales | 40.1 | % | 32.9 | % | 38.8 | % | 32.0 | % | ||||||||
Research and development costs | 5,994 | 6,006 | 11,209 | 11,229 | ||||||||||||
Selling, general and administrative expenses | 24,141 | 25,135 | 49,085 | 50,432 | ||||||||||||
As a % of net sales | 18.1 | % | 14.9 | % | 18.8 | % | 14.8 | % | ||||||||
Restructuring charges | 638 | 709 | 703 | 4,215 | ||||||||||||
Gain on sale of property | - | (3,672 | ) | - | (3,672 | ) | ||||||||||
Income from operations | 22,623 | 27,359 | 40,477 | 46,997 | ||||||||||||
As a % of net sales | 17.0 | % | 16.2 | % | 15.5 | % | 13.8 | % | ||||||||
Gain on sale of |
- | 1,115 | - | 1,115 | ||||||||||||
Interest expense | (415 | ) | (908 | ) | (849 | ) | (1,890 | ) | ||||||||
Interest income | 1,146 | - | 2,261 | - | ||||||||||||
Other income/expense, net | (471 | ) | (270 | ) | 1,346 | (190 | ) | |||||||||
Earnings before income taxes | 22,883 | 27,296 | 43,235 | 46,032 | ||||||||||||
Provision for (benefit from) income taxes | 4,077 | (479 | ) | 8,555 | 3,685 | |||||||||||
Effective tax rate | 17.8 | % | -1.8 | % | 19.8 | % | 8.0 | % | ||||||||
Net earnings | $ | 18,806 | $ | 27,775 | $ | 34,680 | $ | 42,347 | ||||||||
As a % of net sales | 14.1 | % | 16.5 | % | 13.3 | % | 12.4 | % | ||||||||
Weighted average number of shares outstanding: | ||||||||||||||||
Class A common shares - basic and diluted | 2,124 | 2,142 | 2,131 | 2,142 | ||||||||||||
Class B common shares - basic and diluted | 10,492 | 10,634 | 10,551 | 10,636 | ||||||||||||
Net earnings per common share: | ||||||||||||||||
Class A common shares - basic and diluted | $ | 1.43 | $ | 2.08 | $ | 2.61 | $ | 3.17 | ||||||||
Class B common shares - basic and diluted | $ | 1.50 | $ | 2.19 | $ | 2.76 | $ | 3.34 |
(1) | The supplementary information included in this press release for 2024 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the |
Supplementary Information(1) Condensed Consolidated Balance Sheets (in thousands, unaudited) |
||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 84,976 | $ | 89,371 | ||||
Held to maturity |
58,822 | 37,548 | ||||||
Accounts receivable, net | 81,153 | 84,129 | ||||||
Inventories | 127,931 | 136,540 | ||||||
Other current assets | 23,139 | 33,890 | ||||||
Total current assets | 376,021 | 381,478 | ||||||
Property, plant and equipment, net | 35,082 | 36,533 | ||||||
Right-of-use assets | 21,945 | 20,481 | ||||||
Related-party note receivable | 2,785 | 2,152 | ||||||
Equity method investment | 9,943 | 10,282 | ||||||
72,130 | 76,033 | |||||||
Other assets | 49,698 | 44,672 | ||||||
Total assets | $ | 567,604 | $ | 571,631 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 36,415 | $ | 40,441 | ||||
Operating lease liability, current | 5,992 | 6,350 | ||||||
Other current liabilities | 47,348 | 63,818 | ||||||
Total current liabilities | 89,755 | 110,609 | ||||||
Long-term debt | 60,000 | 60,000 | ||||||
Operating lease liability, long-term | 16,131 | 14,212 | ||||||
Other liabilities | 45,303 | 46,252 | ||||||
Total liabilities | 211,189 | 231,073 | ||||||
Stockholders' equity | 356,415 | 340,558 | ||||||
Total liabilities and stockholders' equity | $ | 567,604 | $ | 571,631 |
(1) | The supplementary information included in this press release for 2024 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the |
Supplementary Information(1) Condensed Consolidated Statements of Cash Flows (in thousands, unaudited) |
||||||||
Six Months Ended | ||||||||
2024 | 2023 | |||||||
Cash flows from operating activities: | ||||||||
Net earnings | $ | 34,680 | $ | 42,347 | ||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 7,123 | 6,571 | ||||||
Stock-based compensation | 1,775 | 1,851 | ||||||
Amortization of deferred financing costs | 27 | 33 | ||||||
Deferred income taxes | (2,930 | ) | (3,128 | ) | ||||
Net unrealized (gains) losses on foreign currency revaluation | (355 | ) | 505 | |||||
Gain on sale of property | - | (3,672 | ) | |||||
Gain on sale of |
- | (1,115 | ) | |||||
Other, net | 487 | (1,124 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable, net | 2,805 | (236 | ) | |||||
Unbilled receivables | 6,887 | 5,018 | ||||||
Inventories | 7,972 | 13,473 | ||||||
Accounts payable | (4,026 | ) | (11,544 | ) | ||||
Accrued expenses | (14,802 | ) | 2,448 | |||||
Accrued restructuring costs | (1,553 | ) | 2,343 | |||||
Income taxes payable | 4,517 | 3,856 | ||||||
Other operating assets/liabilities, net | (4,265 | ) | (16,970 | ) | ||||
Net cash provided by operating activities | 38,342 | 40,656 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property, plant and equipment | (4,278 | ) | (7,081 | ) | ||||
Purchases of held to maturity |
(122,345 | ) | - | |||||
Proceeds from held to maturity securities | 101,071 | - | ||||||
Payment for equity method investment | - | (9,975 | ) | |||||
Investment in related party notes receivable | (633 | ) | - | |||||
Proceeds from sale of property, plant and equipment | 229 | 5,239 | ||||||
Proceeds from sale of business | - | 5,198 | ||||||
Net cash used in investing activities | (25,956 | ) | (6,619 | ) | ||||
Cash flows from financing activities: | ||||||||
Dividends paid to common stockholders | (1,674 | ) | (1,658 | ) | ||||
Repayments under revolving credit line | - | (40,000 | ) | |||||
Borrowings under revolving credit line | - | 5,000 | ||||||
Purchases of common stock | (14,175 | ) | - | |||||
Net cash used in financing activities | (15,849 | ) | (36,658 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (932 | ) | (2,592 | ) | ||||
Net decrease in cash and cash equivalents | (4,395 | ) | (5,213 | ) | ||||
Cash and cash equivalents - beginning of period | 89,371 | 70,266 | ||||||
Cash and cash equivalents - end of period | $ | 84,976 | $ | 65,053 | ||||
Supplementary information: | ||||||||
Cash paid during the period for: | ||||||||
Income taxes, net of refunds received | $ | 8,277 | $ | 10,358 | ||||
Interest payments | $ | 1,985 | $ | 2,762 | ||||
ROU assets obtained in exchange for lease obligations | $ | 4,239 | $ | 5,172 |
(1) | The supplementary information included in this press release for 2024 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the |
Supplementary Information(1) Product Group Highlights (dollars in thousands, unaudited) |
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Sales | Gross Margin | |||||||||||||||||||||||
Q2-24 | Q2-23 | % Change | Q2-24 | Q2-23 | Basis Point Change | |||||||||||||||||||
Power Solutions and Protection | $ | 58,551 | $ | 87,091 | -32.8 | % | 45.7 | % | 35.7 | % | 1,000 | |||||||||||||
Connectivity Solutions | 57,822 | 54,843 | 5.4 | % | 38.9 | % | 37.4 | % | 150 | |||||||||||||||
Magnetic Solutions | 16,832 | 26,843 | -37.3 | % | 26.4 | % | 24.6 | % | 180 | |||||||||||||||
Total | $ | 133,205 | $ | 168,777 | -21.1 | % | 40.1 | % | 32.9 | % | 720 |
Sales | Gross Margin | |||||||||||||||||||||||
YTD |
YTD |
% Change | YTD |
YTD |
Basis Point Change | |||||||||||||||||||
Power Solutions and Protection | $ | 118,798 | 170,272 | -30.2 | % | 44.8 | % | 35.7 | % | 910 | ||||||||||||||
Connectivity Solutions | 112,107 | 108,239 | 3.6 | % | 37.6 | % | 35.9 | % | 170 | |||||||||||||||
Magnetic Solutions | 30,390 | 62,610 | -51.5 | % | 21.8 | % | 23.6 | % | (180 | ) | ||||||||||||||
Total | $ | 261,295 | $ | 341,121 | -23.4 | % | 38.8 | % | 32.0 | % | 680 |
(1) | The supplementary information included in this press release for 2024 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the |
Supplementary Information(1) Reconciliation of GAAP Reconciliation of GAAP Net Earnings to EBITDA and Adjusted EBITDA(2) (in thousands, unaudited) |
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Three Months Ended | Six Months Ended | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
GAAP net sales | $ | 133,205 | $ | 168,777 | $ | 261,295 | $ | 341,121 | ||||||||
Expedite fee revenue | - | 5,663 | 57 | 13,417 | ||||||||||||
Non-GAAP adjusted net sales | $ | 133,205 | $ | 163,114 | $ | 261,238 | $ | 327,704 |
Three Months Ended | Six Months Ended | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
GAAP Net earnings | $ | 18,806 | $ | 27,775 | $ | 34,680 | $ | 42,347 | ||||||||
Interest expense | 415 | 908 | 849 | 1,890 | ||||||||||||
Provision for (benefit from) income taxes | 4,077 | (479 | ) | 8,555 | 3,685 | |||||||||||
Depreciation and amortization | 3,439 | 3,335 | 7,123 | 6,571 | ||||||||||||
EBITDA | $ | 26,737 | $ | 31,539 | $ | 51,207 | $ | 54,493 | ||||||||
% of net sales | 20.1 | % | 18.7 | % | 19.6 | % | 16.0 | % | ||||||||
Unusual or special items: | ||||||||||||||||
Restructuring charges | 638 | 709 | 703 | 4,215 | ||||||||||||
MPS litigation costs | - | 1,160 | - | 2,771 | ||||||||||||
Gain on sale of |
- | (1,115 | ) | - | (1,115 | ) | ||||||||||
Gain on sale of property | - | (3,672 | ) | - | (3,672 | ) | ||||||||||
Adjusted EBITDA | $ | 27,375 | $ | 28,621 | $ | 51,910 | $ | 56,692 | ||||||||
% of net sales | 20.6 | % | 17.0 | % | 19.9 | % | 16.6 | % |
(1) | The supplementary information included in this press release for 2024 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the |
(2) | In this press release and supplemental information, we have included Non-GAAP financial measures, including Non-GAAP adjusted net sales, Non-GAAP net earnings, Non-GAAP EPS, EBITDA and Adjusted EBITDA. We present results adjusted to exclude the effects of certain specified items and their related tax impact that would otherwise be included under GAAP, to aid in comparisons with other periods. We believe that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to our financial condition and results of operations. We use these non-GAAP measures to compare the Company’s performance to that of prior periods for trend analysis and for budgeting and planning purposes. We also believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other similarly situated companies in our industry, many of which present similar non-GAAP financial measures to investors. We also use non-GAAP measures in determining incentive compensation. See the section above captioned “Non-GAAP Financial Measures” for additional information. |
Supplementary Information(1)
Reconciliation of GAAP Measures to Non-GAAP Measures(2)
(in thousands, except per share data)
(unaudited)
The following tables detail the impact that certain unusual or special items had on the Company's net earnings per common Class A and Class B basic and diluted shares ("EPS") and the line items in which these items were included on the consolidated statements of operations.
Three Months Ended |
Three Months Ended |
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Reconciling Items | Earnings before taxes | Provision for income taxes | Net earnings | Class A EPS(3) | Class |
Earnings before taxes | Benefit from income taxes | Net earnings | Class A EPS(3) | Class |
||||||||||||||||||||||||||||||
GAAP measures | $ | 22,883 | $ | 4,077 | $ | 18,806 | $ | 1.43 | $ | 1.50 | $ | 27,296 | $ | (479 | ) | $ | 27,775 | $ | 2.08 | $ | 2.19 | |||||||||||||||||||
Restructuring charges | 638 | 153 | 485 | 0.04 | 0.04 | 709 | 118 | 591 | 0.04 | 0.05 | ||||||||||||||||||||||||||||||
MPS litigation costs | - | - | - | - | - | 1,160 | 267 | 893 | 0.07 | 0.07 | ||||||||||||||||||||||||||||||
Gain on sale of |
- | - | - | - | - | (1,115 | ) | (56 | ) | (1,059 | ) | (0.08 | ) | (0.08 | ) | |||||||||||||||||||||||||
Gain on sale of property | - | - | - | - | - | (3,672 | ) | (734 | ) | (2,938 | ) | (0.22 | ) | (0.23 | ) | |||||||||||||||||||||||||
Non-GAAP measures | $ | 23,521 | $ | 4,230 | $ | 19,291 | $ | 1.46 | $ | 1.54 | $ | 24,378 | $ | (884 | ) | $ | 25,262 | $ | 1.89 | $ | 1.99 |
Six Months Ended |
Six Months Ended |
|||||||||||||||||||||||||||||||||||||||
Reconciling Items | Earnings before taxes | Provision for income taxes | Net earnings | Class A EPS(3) | Class |
Earnings before taxes | Provision for income taxes | Net earnings | Class A EPS(3) | Class |
||||||||||||||||||||||||||||||
GAAP measures | $ | 43,235 | $ | 8,555 | $ | 34,680 | $ | 2.61 | $ | 2.76 | $ | 46,032 | $ | 3,685 | $ | 42,347 | $ | 3.17 | $ | 3.34 | ||||||||||||||||||||
Restructuring charges | 703 | 163 | 540 | 0.04 | 0.04 | 4,215 | 600 | 3,615 | 0.27 | 0.29 | ||||||||||||||||||||||||||||||
MPS litigation costs | - | - | - | - | - | 2,771 | 637 | 2,134 | 0.16 | 0.17 | ||||||||||||||||||||||||||||||
Gain on sale of |
- | - | - | - | - | (1,115 | ) | (56 | ) | (1,059 | ) | (0.08 | ) | (0.08 | ) | |||||||||||||||||||||||||
Gain on sale of property | - | - | - | - | - | (3,672 | ) | (734 | ) | (2,938 | ) | (0.22 | ) | (0.23 | ) | |||||||||||||||||||||||||
Non-GAAP measures | $ | 43,938 | $ | 8,718 | $ | 35,220 | $ | 2.66 | $ | 2.80 | $ | 48,231 | $ | 4,132 | $ | 44,099 | $ | 3.30 | $ | 3.48 |
(1) | The supplementary information included in this press release for 2024 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the |
(2) | In this press release and supplemental information, we have included Non-GAAP financial measures, including Non-GAAP adjusted net sales, Non-GAAP net earnings, Non-GAAP EPS, EBITDA and Adjusted EBITDA. We present results adjusted to exclude the effects of certain specified items and their related tax impact that would otherwise be included under GAAP, to aid in comparisons with other periods. We believe that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to our financial condition and results of operations. We use these non-GAAP measures to compare the Company’s performance to that of prior periods for trend analysis and for budgeting and planning purposes. We also believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other similarly situated companies in our industry, many of which present similar non-GAAP financial measures to investors. We also use non-GAAP measures in determining incentive compensation. See the section above captioned “Non-GAAP Financial Measures” for additional information. |
(3) | Individual amounts of earnings per share may not agree to the total due to rounding. |
![](https://ml.globenewswire.com/media/N2FhYWFhN2MtZmIyMy00NDQzLTk3ZjQtNGFhZGFhZmEzODg5LTEwOTQ5MTc=/tiny/Bel-Fuse-Inc-.png)
Source: Bel Fuse Inc.