FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

       [X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934

             For the quarterly period ended June 30, 2000

                                       OR

       [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934

          For the transition period from ............. to ............

          Commission file number:    0-11676

                                  BEL FUSE INC.
             (Exact name of registrant as specified in its charter)

            New Jersey                                  22-1463699
   (State or other jurisdiction of                  (I.R.S. Employer
   incorporation or organization)                   Identification No.)

                              198 Van Vorst Street
                          Jersey City, New Jersey 07302
                    (Address of principal executive offices)
                                   (Zip Code)

                                  201-432-0463
              (Registrant's telephone number, including area code)

         (Former name, former address and former fiscal year, if changed
                               since last report)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes  X   No
    ---     ---

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

     At August 1, 2000, there were 2,638,310 shares of Class A Common Stock,
$.10 par value, outstanding and 7,941,641 shares of Class B Common Stock, $.10
par value, outstanding.




                                  BEL FUSE INC.

                                      INDEX

                                                                     Page Number

Part I.   Financial Information

  Item 1. Financial Statements                                             1

          Consolidated Balance Sheets as of June 30, 2000
          (unaudited) and December 31, 1999                              2 - 3

          Consolidated Statements of Operations and Comprehensive
          Income for the Three and Six Months Ended June 30, 2000
          and 1999 (unaudited)                                           4 - 5

          Consolidated Statements of Cash Flows for the Six Months
          Ended June 30, 2000 and 1999 (unaudited)                       6 - 7

          Notes to Consolidated Financial Statements (unaudited)         8 - 9

  Item 2. Management's Discussion and Analysis of Financial
          Condition and Results of Operations                           10 - 13

  Item 3. Quantitative and Qualitative Disclosures About
          Market Risk                                                      13

Part II.  Other Information

  Item 1. Legal Proceedings                                                14

  Item 6. Exhibits and Reports on Form 8-K                                 14

Signatures                                                                 15




PART I.  Financial Information

     Item 1. Financial Statements

     Certain information and footnote disclosures required under generally
accepted accounting principles have been condensed or omitted from the following
consolidated financial statements pursuant to the rules and regulations of the
Securities and Exchange Commission. It is suggested that the following
consolidated financial statements be read in conjunction with the year-end
consolidated financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1999.

     The results of operations for the six month period ended June 30, 2000 are
not necessarily indicative of the results for the entire fiscal year or for any
other period.

                                       -1-



                         BEL FUSE INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

June 30, December 31, 2000 1999 ------------ ------------ (Unaudited) Current Assets: Cash and cash equivalents $ 44,864,522 $31,382,629 Marketable securities 1,129,284 2,253,039 Accounts receivable, less allowance for doubtful accounts of $679,000 and $661,000 21,648,434 18,815,513 Inventories 22,697,513 24,210,654 Prepaid expenses and other current assets 750,406 334,820 Deferred income taxes 510,000 111,000 ------------ ------------ Total Current Assets 91,600,159 77,107,655 Property, plant and equipment - net 36,649,640 36,021,708 Goodwill-net of amortization of $2,795,204 and $2,042,008 10,994,248 11,747,444 Other assets 377,666 372,475 ------------ ------------ TOTAL ASSETS $139,621,713 $125,249,282 ============ ============
See notes to consolidated financial statements. -2- BEL FUSE INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, December 31, 2000 1999 ------------ ------------ (unaudited) Current Liabilities: Accounts payable $ 5,893,756 $ 4,375,915 Accrued expenses 10,628,926 9,021,672 Income taxes payable 1,332,661 241,850 Dividends payable 397,057 393,908 ------------ ------------ Total Current Liabilities 18,252,400 14,033,345 Deferred income taxes 1,067,000 962,000 ------------ ------------ Total Liabilities 19,319,400 14,995,345 ------------ ------------ Stockholders' Equity: Preferred stock, no par value - authorized 1,000,000 shares; none issued -- -- Class A common stock, par value $.10 per share - authorized 10,000,000 shares; outstanding 2,638,310 and 2,632,197 shares (net of 1,072,770 treasury shares) 263,831 263,220 Class B common stock, par value $.10 per share - authorized 30,000,000 shares; outstanding 7,941,641 and 7,910,306 shares (net of 1,072,770 treasury shares) 794,164 791,031 Additional paid-in capital 9,129,586 8,811,653 Retained earnings 110,078,638 99,839,765 Cumulative other comprehensive income 36,094 548,268 ------------ ------------ Total Stockholders' Equity 120,302,313 110,253,937 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $139,621,713 $125,249,282 ============ ============
See notes to consolidated financial statements. -3-
BEL FUSE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited) Six Months Ended Three Months Ended June 30, June 30, ---------------------------- ---------------------------- 2000 1999 2000 1999 ----------- ----------- ----------- ----------- Sales $59,855,125 $59,210,700 $33,721,946 $28,451,932 ----------- ----------- ----------- ----------- Costs and Expenses: Cost of sales 37,647,443 38,253,853 20,942,948 17,939,247 Selling, general and administrative expenses 10,745,553 9,648,344 5,575,859 4,843,473 ----------- ----------- ----------- ----------- 48,392,996 47,902,197 26,518,807 22,782,720 ----------- ----------- ----------- ----------- Income from operations 11,462,129 11,308,503 7,203,139 5,669,212 Other income - net 2,084,156 331,109 607,345 179,367 ----------- ----------- ----------- ----------- Earnings before income taxes 13,546,285 11,639,612 7,810,484 5,848,579 Income tax provision 2,515,000 1,801,000 1,251,000 1,131,000 ----------- ----------- ----------- ----------- Net earnings $11,031,285 $9,838,612 $6,559,484 $4,717,579 =========== ========== ========== ========== Earnings per common share-basic $1.04 $.94 $.62 $.45 ===== ==== ==== ==== Earnings per common share- diluted $1.01 $.91 $.60 $.44 ===== ==== ==== ==== Weighted average number of common shares outstanding-basic 10,567,240 10,448,298 10,578,765 10,469,694 =========== ========== ========== ========== Weighted average number of common shares outstanding- diluted 10,878,914 10,759,000 10,901,506 10,752,822 =========== ========== ========== ========== See notes to consolidated financial statements.
-4-
BEL FUSE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited) Six Months Ended Three Months Ended June 30, June 30, ---------------------------- -------------------------- 2000 1999 2000 1999 ----------- ---------- ---------- ---------- Net earnings $11,031,285 $9,838,612 $6,559,484 $4,717,579 Other comprehensive income (expense), net of income taxes: Unrealized gain (loss) on marketable securities (482,218) -- 20,694 Foreign currency translation adjustment (6,939) 9,225 1,053 2,278 ----------- ---------- ---------- ---------- Comprehensive income $10,542,128 $9,847,837 $6,581,231 $4,719,857 =========== ========== ========== ========== See notes to consolidated financial statements.
-5- BEL FUSE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Six Months Ended June 30, ----------------------------------- 2000 1999 ----------- ----------- Cash flows from operating activities: Net income $11,031,285 $ 9,838,612 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,791,819 2,982,029 Gain on sale of marketable securities (1,012,095) -- Other 121,000 (78,000) Changes in operating assets and liabilities 2,398,886 (8,791,097) ----------- ----------- Net Cash Provided by Operating Activities 15,330,895 3,951,544 ----------- ----------- Cash flows from investing activities: Purchase of property, plant and equipment (2,672,820) (2,872,939) Payment for acquisition -- (43,806) Proceeds from sale of marketable securities 2,071,157 -- Purchase of marketable securities (773,253) -- Proceeds from repayment by contractors 64,500 64,500 ----------- ----------- Net Cash Used in Investing Activities (1,310,416) (2,852,245) ----------- ----------- Cash flows from financing activities: Proceeds from exercise of stock options 250,677 308,057 Dividends paid to common shareholders (789,263) (524,479) ----------- ----------- Net Cash Used in Financing Activities (538,586) (216,422) ----------- ----------- Net increase in Cash 13,481,893 882,877 Cash and Cash Equivalents - beginning of period 31,382,629 14,923,685 ----------- ----------- Cash and Cash Equivalents - end of period $44,864,522 $15,806,562 =========== ===========
See notes to consolidated financial statements. -6- BEL FUSE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (unaudited)
Six Months Ended June 30, ----------------------------------- 2000 1999 ----------- ----------- Changes in operating assets and liabilities consist of: Increase in accounts receivable $(2,850,921) $(3,262,722) (Increase) decrease in inventories 1,513,141 (5,949,678) Increase in prepaid expenses and other current assets (480,086) (406,833) (Increase) decrease in other assets (5,191) 33,614 Increase in accounts payable 1,517,841 615,722 Increase (decrease) in accrued expenses 1,613,291 (997,129) Increase in income taxes payable 1,090,811 1,175,929 ----------- ----------- $ 2,398,886 $(8,791,097) =========== =========== Supplementary information: Cash paid during the period for: Income taxes $ 830,000 $ 726,000 =========== =========== Non-cash investing activities: Unrealized loss on marketable securities $ (482,218) $ -- =========== ===========
See notes to consolidated financial statements. -7- BEL FUSE INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The consolidated balance sheet as of June 30, 2000, and the consolidated statements of operations and comprehensive income and cash flows for the periods presented herein have been prepared by the Company and are unaudited. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial position, results of operations and comprehensive income and cash flows for all periods presented have been made. The information for December 31, 1999 was derived from audited financial statements. 2. Earnings Per Share Basic earnings per common share are computed using the weighted average number of common shares outstanding during the period. Diluted earnings per common share are computed using the weighted average number of common shares and potential common shares outstanding during the period. 3. Common Stock On November 5, 1999 the Board of Directors declared a two for one stock split to be paid in the form of a special dividend of one share of Class B common stock for each share of Class A and Class B outstanding. The special dividend was payable on December 1, 1999 to all Class A and Class B shareholders of record on November 22, 1999. The Board also approved an amendment to the Company's Certificate of Incorporation increasing the number of authorized shares of Class B common stock from 10,000,000 shares to 30,000,000 shares. All shares and per share data have been retroactively adjusted to reflect the two for one stock split. 4. Business Segment Information The Company does not have reportable operating segments as defined in Statement of Financial Accounting Standards No.131, "Disclosures about Segments of an Enterprise and Related Information". The method for attributing revenues for interim purposes is based on total shipments from the country of origination less intergeographic revenues. The Company operates facilities in the United States, Europe and the Far East. The primary criteria by which financial performance is evaluated and resources are allocated include revenues and operating income. The following is a summary of key financial data: -8-
BEL FUSE INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Six Months Ended Three Months Ended June 30, June 30, ------------------------------ ------------------------------ 2000 1999 2000 1999 ------------ ------------ ------------ ------------ Total Revenues: United States $ 34,576,951 $ 38,346,172 $ 20,510,630 $ 18,538,709 Asia 57,137,881 53,958,049 31,140,306 25,437,471 Less intergeographic revenues (31,859,707) (33,093,521) (17,928,990) (15,524,248) ------------ ------------ ------------ ------------ $ 59,855,125 $ 59,210,700 $ 33,721,946 $ 28,451,932 ============ ============ ============ ============ Income from Operations: United States $ 1,601,221 $ 681,358 $ 611,489 $ 327,732 Asia 9,860,908 10,627,145 6,591,650 5,341,480 ------------ ------------ ------------ ------------ $ 11,462,129 $ 11,308,503 $ 7,203,139 $ 5,669,212 ============ ============ ============ ============
5. On May 10, 2000 the Board of Directors authorized the repurchase of up to 10% of the Company's outstanding Class A and Class B shares from time to time in market or privately negotiated transactions. -9- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The Company's quarterly and annual operating results are affected by a wide variety of factors that could materially and adversely affect revenues and profitability including the following: (a) the risk that the Company may be unable to respond adequately to rapidly changing technological developments in its industry, (b) risks associated with its Far East operations described herein under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations," (c) the highly competitive nature of the Company's industry and the impact that competitors' new products and pricing may have upon the Company, (d) the likelihood that revenues may vary significantly from one accounting period to another accounting period due to a variety of factors, including customers' buying decisions, the Company's product mix and general market and economic conditions, (e) the Company's reliance on certain substantial customers, and (f) risks associated with the Company's ability to manufacture and deliver products in a manner that is responsive to its customers' needs. As a result of these and other factors, the Company may experience material fluctuations in future operating results on a quarterly or annual basis, which could materially and adversely affect its business, financial condition, operating results, and stock prices. Furthermore, this document and other documents filed by the Company with the Securities and Exchange Commission (the "SEC") contain certain forward-looking statements under the Private Securities Litigation Reform Act of 1995 with respect to the business of the Company. These forward-looking statements are subject to certain risks and uncertainties, including those mentioned above, and those detailed in Item 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 1999, which could cause actual results to differ materially from these forward-looking statements. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements which may be necessary to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. An investment in the Company involves various risks, including those mentioned above and those which are detailed from time to time in the Company's SEC filings. -10- Results of Operations The following table sets forth, for the periods indicated, the percentage relationship to net sales of certain items included in the Company's consolidated statements of operations. Percentage of Net Sales ------------------------------------------ Six Months Ended Three Months Ended June 30, June 30, ----------------- ----------------- 2000 1999 2000 1999 ------ ------ ------ ------ Net sales 100.0% 100.0% 100.0% 100.0% Cost of sales 62.9 64.6 62.1 63.0 Selling, general and administrative expenses 18.0 16.3 16.5 17.0 Other income, net of interest expense 3.5 .6 1.8 .6 Earnings before income tax provision 22.6 19.7 23.2 20.6 Income tax provision 4.2 3.0 3.7 4.0 Net earnings 18.4 16.7 19.5 16.6 The following table sets forth, for the periods indicated, the percentage increase (decrease) of items included in the Company's consolidated statements of operations. Increase (Decrease) from Prior Period ----------------------------------------- Six Months Ended Three Months Ended June 30, 2000 June 30, 2000 compared with 1999 compared with 1999 ------------------ ------------------ Net sales 1.1 % 18.5 % Cost of sales (1.6) 16.7 Selling, general and administrative expenses 11.4 15.1 Other income - net 529.5 238.6 Earnings before income tax provision 16.4 33.5 Income tax provision 39.6 10.6 Net earnings 12.1 39.0 -11- Six Months ended June 30, 2000 vs. Six Months ended June 30, 1999 Net Sales Net sales increased 1.1 % from $59,210,700 during the first six months of 1999 to $59,855,125 during the first six months of 2000. The Company attributes this increase to higher belMag(TM) and fuse sales volume offset in part by lower sales of magnetic products primarily due to the impact during the first quarter of 2000 of a change in the structure of the supply channel by two of the Company's largest customers. Cost of Sales Cost of sales as a percentage of net sales decreased 1.7 % to 62.9 % during the first six months of 2000 from 64.6 % during the first six months of 1999. The decrease in the cost of sales percentage is primarily attributable to lower labor and factory overhead expenses due to the move of Telcom production to the Far East from Texas during the fourth quarter of 1999 offset in part by higher raw material content associated with the current sales mix. Selling, General and Administrative Expenses The percentage relationship of selling, general and administrative expenses to net sales increased 1.7 % to 18.0 % during the first six months of 2000 from 16.3 % during the first six months of 1999. The Company attributes the percentage increase primarily to an increase in the dollar amount of selling, general and administrative expenses compared to a lower increase in sales. Selling, general and administrative expenses increased in dollar amount by approximately $1,097,000. The Company attributes the increase in the dollar amount of such expenses primarily to increases in sales and marketing salaries and related expenses. Other Income and Expense During the first six months of 2000, other income, consisting principally of gain on the sale of marketable securities, and interest earned on cash equivalents, increased by approximately $1,753,000 compared to the first six months of 1999. The increase is due to the gain on the sale of marketable securities and higher interest income due to higher cash and cash equivalent balances. Provision for Income Taxes The provision for income taxes for the first six months of 2000 was $2,515,000 as compared to $1,801,000 for the first six months of 1999. The increase in the provision is due primarily to higher United States taxes, resulting from the gain on the sale of marketable securities and higher foreign earnings subject to taxes in 2000 versus 1999. -12- Three Months ended June 30, 2000 vs. Three Months ended June 30, 1999 Net Sales Net sales increased 18.5 % from $28,451,932 during the second quarter of 1999 to $33,721,946 during the second quarter of 2000. The Company attributes this increase primarily to the reasons set forth in the six month analysis. Cost of Sales Cost of sales as a percentage of net sales decreased .9% to 62.1% during the second quarter of 2000 from 63.0 % during the second quarter of 1999. The Company attributes this decrease primarily to the reasons set forth in the six month analysis. Selling, General and Administrative Expenses The percentage relationship of selling, general and administrative expenses to net sales decreased .5 % to 16.5 % during the second quarter of 2000 from 17.0 % during the second quarter of 1999. The Company attributes the percentage decrease primarily to increased sales. Selling, general and administrative expenses increased in dollar amount by approximately $733,000. The Company attributes the increase in dollar amount of such expenses primarily to increases in sales and marketing salaries and related expenses. Other Income and Expense Other income, consisting principally of interest earned on cash equivalents, increased by approximately $428,000 during the second quarter of 2000 compared to the second quarter of 1999. The increase is due to higher interest income due to higher cash and cash equivalent balances. Provision for Income Taxes The provision for income taxes for the second quarter of 2000 was $1,251,000 as compared to $1,131,000 for the second quarter of 1999. The increase in the provision is due primarily to higher foreign earnings subject to taxes in the second quarter of 2000 versus 1999. Liquidity and Capital Resources Historically, the Company has financed its capital expenditures through cash flows from operating activities. Management believes that the cash flow from operations, combined with its existing capital base and the Company's available lines of credit, will be sufficient to fund its operations for the near term. This statement represents a Forward-Looking Statement. Actual results could differ materially from such statement if the Company experiences substantial unanticipated cash requirements. The Company has lines of credit, in the aggregate amount of $14 million, all of which were unused at June 30, 2000; $12 million is from domestic banks and $2 million is from foreign banks. The Company has contracted for the renovation and addition of new corporate offices in Jersey City in the amount of $2.5 million. As of June 30, 2000 approximately $505,000 has been paid towards this contract. -13- On May 10, 2000 the Board of Directors authorized the repurchase of up to 10% of the Company's outstanding Class A and Class B shares from time to time in market or privately negotiated transactions. During the second quarter of 2000, the Company's cash and cash equivalents increased by approximately $13.5 million, reflecting approximately $15.3 million provided by operating activities and approximately $2.1 million from the sale of marketable securities, offset, in part, by approximately $2.7 million in purchases of plant and equipment, .8 million in purchases of marketable securities and approximately $.8 million in dividends paid to common shareholders. Cash and cash equivalents and accounts receivable comprised approximately 48.5 % and 41.9 % of the Company's total assets at June 30, 2000 and December 31, 1999, respectively. The Company's current ratio (i.e., the ratio of current assets to current liabilities) was 5.0 to 1 and 5.5 to 1 at June 30, 2000 and December 31, 1999, respectively. Item 3. Quantitative and Qualitative Disclosures About Market Risk Fair Value of Financial Instruments - The following disclosure of the estimated fair value of financial instruments is made in accordance with the requirements of Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments." The estimated fair values of financial instruments have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgement is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The Company has not entered into, and does not expect to enter into, financial instruments for trading or hedging purposes. The Company does not currently anticipate entering into interest rate swaps and/or similar instruments. The Company's carrying values of cash, marketable securities, accounts receivable, accounts payable and accrued expenses are a reasonable approximation of their fair value. The Company's business in this regard is subject to certain risks, including, but not limited to, differing economic conditions, loss of significant customers, changes in political climate, differing tax structures, other regulations and restrictions and foreign exchange rate volatility. The Company's future results could be materially and adversely impacted by changes in these or other factors. -14- PART II. Other Information Item 1. Legal Proceedings The Company is not presently subject to any legal proceedings which are material to the consolidated results of operations or financial condition of the Company. Item 4. Submission of Matters to a Vote of Security Holders The Company's annual meeting of security holders was held on May 25, 2000. At the meeting the following vote was taken: (1) The Board's nominees were elected to the Board of Directors for the term of three years. The votes were cast as follows: For Withheld --------- -------- Howard Bernstein 2,406,360 23,308 John Tweedy 2,406,412 23,775 There were -0- abstentions and -0- broker non-votes. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: 27.1 Financial Data Schedule (b) There were no Current Reports on Form 8-K filed by the registrant during the quarter ended June 30, 2000. -15- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BEL FUSE INC. By: /S/ DANIEL BERNSTEIN ---------------------------- Daniel Bernstein, President (Principal Financial and Accounting Officer) Dated: August 10, 2000 -16-
 


5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BEL FUSE INC. AND SUBSIDIARIES FINANCIAL STATEMENTS AT JUNE 30, 2000 AND THE SIX MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1 12-MOS DEC-31-2000 JUN-30-2000 44,864,522 1,129,284 22,327,434 679,000 22,697,513 91,600,159 70,380,120 33,730,480 139,621,713 18,252,400 0 1,057,995 0 0 119,244,318 139,621,713 59,855,125 59,855,125 37,647,443 48,392,996 0 0 0 13,546,285 2,515,000 11,031,285 0 0 0 11,031,285 1.04 1.01