SEC Filing - Bel Fuse Inc.

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 September 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 October 31, 2000, there were 2,643,747 shares of Class A Common Stock, $.10 par value, outstanding and 7,969,190 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 September 30, 2000 (unaudited) and December 31, 1999 2 - 3 Consolidated Statements of Opera- tions and Comprehensive Income for the Three and Nine Months Ended September 30, 2000 and 1999 (unaudited) 4 - 5 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2000 and 1999 (unaudited) 6 - 7 Notes to Consolidated Financial Statements (unaudited) 8 - 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 - 16 Item 3. Quantitative and Qualitative Disclosures About Market Risk 16 Part II . Other Information Item 1. Legal Proceedings 17 Item 6. Exhibits and Reports on Form 8-K 17 Signatures 18

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 nine-month period ended September 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 September 30, December 31, 2000 1999 ------------ ------------ (Unaudited) Current Assets: Cash and cash equivalents $ 56,392,945 $ 31,382,629 Marketable securities 1,044,957 2,253,039 Accounts receivable, less allowance for doubtful accounts of $688,000 and $661,000 24,205,920 18,815,513 Inventories 23,826,524 24,210,654 Prepaid expenses and other current assets 396,880 334,820 Deferred income taxes 465,000 111,000 ------------ ------------ Total Current Assets 106,332,226 77,107,655 Property, plant and equipment - net 37,698,134 36,021,708 Goodwill-net of amortization of $3,171,803 and $2,042,008 10,617,649 11,747,444 Other assets 365,029 372,475 ------------ ------------ TOTAL ASSETS $155,013,038 $125,249,282 ============ ============ (Continued) See notes to consolidated financial statements. -2-

BEL FUSE INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES AND STOCKHOLDERS' EQUITY September 30, December 31, 2000 1999 ------------ ------------ (Unaudited) Current Liabilities: Accounts payable $ 9,028,310 $ 4,375,915 Accrued expenses 13,427,232 9,021,672 Income taxes payable 1,485,699 241,850 Dividends payable 396,000 393,908 ------------ ------------ Total Current Liabilities 24,337,241 14,033,345 Deferred income taxes 805,000 962,000 ------------ ------------ Total Liabilities 25,142,241 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 2,640,122 and 2,632,197 shares (net of 1,072,770 treasury shares) 264,012 263,220 Class B common stock, par value $.10 per share - authorized 30,000,000 shares; outstanding 7,949,190 and 7,910,306 shares (net of 1,083,370 and 1,072,770 treasury shares) 794,919 791,031 Additional paid-in capital 8,880,010 8,811,653 Retained earnings 119,868,358 99,839,765 Cumulative other comprehensive income 63,498 548,268 ------------ ------------ Total Stockholders' Equity 129,870,797 110,253,937 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $155,013,038 $125,249,282 ============ ============ See notes to consolidated financial statements. -3-

BEL FUSE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited) Nine Months Ended Three Months Ended September 30, September 30, ----------------------------- ------------------------------ 2000 1999 2000 1999 ------------ ----------- ----------- ----------- Sales $101,415,534 $89,747,178 $41,560,409 $30,536,478 ------------ ----------- ----------- ----------- Costs and Expenses: Cost of sales 62,392,790 57,858,865 24,745,347 19,605,012 Selling, general and administrative expenses 17,020,504 14,817,201 6,274,951 5,168,857 ------------ ----------- ----------- ----------- 79,413,294 72,676,066 31,020,298 24,773,869 ------------ ----------- ----------- ----------- Income from operations 22,002,240 17,071,112 10,540,111 5,762,609 Other income - net 2,949,212 537,898 865,056 206,789 ------------ ----------- ----------- ----------- Earnings before income taxes 24,951,452 17,609,010 11,405,167 5,969,398 Income tax provision 3,736,000 2,455,000 1,221,000 654,000 ------------ ----------- ----------- ----------- Net earnings $ 21,215,452 $15,154,010 $10,184,167 $ 5,315,398 ============ =========== =========== =========== Earnings per common share-basic $2.01 $1.45 $ .96 $ .51 ===== ===== ===== ===== Earnings per common share- diluted $1.94 $1.41 $ .92 $ .50 ===== ===== ===== ===== Weighted average number of common shares outstanding-basic 10,573,661 10,459,400 10,586,365 10,481,658 ============ =========== =========== =========== Weighted average number of common shares outstanding- diluted 10,957,680 10,754,798 11,115,074 10,746,026 ============ =========== =========== =========== (Continued) See notes to consolidated financial statements. -4-

BEL FUSE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Nine Months Ended September 30, ---------------------------------- 2000 1999 ----------- ----------- Cash flows from operating activities: Net income $21,215,452 $15,154,010 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,292,884 4,495,684 Gain on sale of marketable securities (1,081,437) (187,000) Other (90,000) - Changes in operating assets and liabilities 5,123,200 (6,845,336) ----------- ----------- Net Cash Provided by Operating Activities 29,460,099 12,617,358 ----------- ----------- Cash flows from investing activities: Purchase of property, plant and equipment (4,835,348) (4,683,352) Purchase of treasury stock (342,526) - Payment for acquisition - (43,806) Proceeds from sale of marketable securities 2,251,179 - Purchase of marketable securities (773,253) (1,353,396) Proceeds from repayment by contractors 96,750 96,750 ----------- ----------- Net Cash Used in Investing Activities (3,603,198) (5,983,804) ----------- ----------- Cash flows from financing activities: Proceeds from exercise of stock options 344,712 449,464 Dividends paid to common shareholders (1,191,297) (786,947) ----------- ----------- Net Cash Used in Financing Activities (846,585) (337,483) ----------- ----------- Net Increase in Cash 25,010,316 6,296,071 Cash and Cash Equivalents - beginning of period 31,382,629 14,923,685 ----------- ---------- Cash and Cash Equivalents - end of period $56,392,945 $21,219,756 =========== =========== See notes to consolidated financial statements. -6-

BEL FUSE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (unaudited) Nine Months Ended September 30, ---------------------------------- 2000 1999 ----------- ----------- Changes in operating assets and liabilities consist of: (Increase) in accounts receivable $(5,417,407) $(3,067,209) (Increase) decrease in inventories 384,130 (2,952,219) (Increase) in prepaid expenses and other current assets (158,810) (336,072) Decrease in other assets 7,446 59,421 Increase (decrease) in accounts payable 4,652,395 (1,782,049) Increase (decrease) in accrued expenses 4,411,597 (398,475) Increase in income taxes payable 1,243,849 1,631,267 ----------- ----------- $ 5,123,200 $(6,845,336) =========== =========== Supplementary information: Cash paid during the period for: Income taxes $ 1,320,000 $ 1,018,000 =========== =========== Non-cash investing activities: Unrealized loss on marketable securities $ 488,975 $ 328,206 =========== =========== See notes to consolidated financial statements. -7-

BEL FUSE INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation The consolidated balance sheet as of September 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 periods presented. Diluted earnings per common share are computed using the weighted average number of common shares and potential common shares outstanding during the periods presented. 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 Nine Months Ended Three Months Ended September 30, September 30, ------------------------------ ------------------------------ 2000 1999 2000 1999 ------------ ------------ ------------ ------------ Total Revenues: United States $ 60,437,686 $ 56,020,435 $ 25,860,735 $ 17,674,263 Asia 94,371,509 86,094,564 37,233,628 32,136,515 Less intergeographic revenues (53,393,661) (52,367,821) (21,533,954) (19,274,300) ------------ ------------ ------------ ------------ $101,415,534 $ 89,747,178 $ 41,560,409 $ 30,536,478 ============ ============ ============ ============ Income from Operations: United States $ 2,274,072 $ 1,732,530 $ 672,851 $ 1,051,172 Asia 19,728,168 15,338,582 9,867,260 4,711,437 ------------ ------------ ------------ ------------ $ 22,002,240 $ 17,071,112 $ 10,540,111 $ 5,762,609 ============ ============ ============ ============ 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. As of September 30, 2000 the Company had repurchased 10,600 Class B shares at a total cost of approximately $343,000. -9-

BEL FUSE INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6. New Accounting Pronouncements In June 1998, the Financial Accounting Standards Board (FASB)issued Statement of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities"(SFAS 133). This standard was amended by Statement of Financial Accounting Standards No. 137 "Accounting for Derivative Instruments and Hedging Activities-Deferral of the Effective Date of FASB Statement No. 133" and changed the effective date for SFAS 133 to all fiscal quarters of fiscal years beginning after June 15, 2000.In June 2000, the FASB issued SFAS 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities, ("SFAS 133"). SFAS 133 and 138 requires that all derivative instruments be recorded on the balance sheet at their respective fair values. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on the designation of the hedge transaction. For fair value hedge transactions in which the Company is hedging changes in the fair value of assets or liabilities, changes in the fair value of the derivative instrument will generally be offset by changes in the hedged item's fair value. For cash flow hedge transactions in which the Company is hedging the variability of cash flows related to a variable rate asset, liability or forecasted transaction, changes in the fair value of the derivative instrument will be reported in other comprehensive income. The gains and losses on the derivative instrument that are reported in other comprehensive income will be recognized in earnings in the periods in which earnings are impacted by the variability of the cash flows of the hedged item. The Company will adopt SFAS 133 and 138 in the first quarter of 2001 and does not expect such adoption to have a material effect on the Company's consolidated results of operations, financial position or cash flows. In December 1999, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial Statements". SAB 101 summarizes certain of the SEC's views in applying generally accepted accounting principles to revenue recognition in financial statements. The Company adopted the provisions of SAB 101 during the fourth quarter ending December 31, 2000 and it is not expected to have a material impact on the Company's consolidated results of operations, financial position or cash flows. -10-

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. -11-

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 ------------------------------------------------------ Nine Months Ended Three Months Ended September 30, September 30, ----------------------- ------------------- 2000 1999 2000 1999 ----- ----- ----- ----- Net sales 100.0% 100.0% 100.0% 100.0% Cost of sales 61.5 64.5 59.5 64.2 Selling, general and administrative expenses 16.8 16.5 15.1 16.9 Other income, net of interest expense 2.9 .6 2.1 .7 Earnings before income tax provision 24.6 19.6 27.4 19.5 Income tax provision 3.7 2.7 2.9 2.1 Net earnings 20.9 16.9 24.5 17.4 The following table sets forth, for the periods indicated, the percentage increase of items included in the Company's consolidated statements of operations. Increase from Prior Period --------------------------------------------- Nine Months Ended Three Months Ended September 30, 2000 September 30, 2000 compared with 1999 compared with 1999 ------------------ ------------------ Net sales 13.0% 36.1% Cost of sales 7.8 26.2 Selling, general and administrative expenses 14.9 21.4 Other income - net 448.3 318.3 Earnings before income tax provision 41.7 91.1 Income tax provision 52.2 86.7 Net earnings 40.0 91.6 -12-

Nine Months ended September 30, 2000 vs. Nine Months ended September 30, 1999 Net Sales Net sales increased 13% from $89,747,178 during the first nine months of 1999 to $101,415,534 during the first nine months of 2000. The Company attributes this increase primarily to an increased volume of sales of belMag(TM), fuse and xDSL products and value-added components for the telecommunications industry. Cost of Sales Cost of sales as a percentage of net sales decreased 3.0% to 61.5% during the first nine months of 2000 from 64.5% during the first nine months of 1999. The decrease 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 and higher sales volume which results in greater manufacturing efficiencies 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 .3% to 16.8% during the first nine months of 2000 from 16.5% during the first nine months of 1999. Selling, general and administrative expenses increased in dollar amount by approximately $2,203,000. The Company attributes the increase in the dollar amount of such expenses primarily to increases in commissions and other sales related expense due to increased sales and increases in sales, marketing and customer service salaries. Other Income and Expense During the first nine months of 2000 other income, consisting principally of gains on the sale of marketable securities and interest earned on cash equivalents, increased by approximately $2,411,000 compared to the first nine months of 1999. The increase is due to the gains on the sale of marketable securities and higher interest income as the Company maintained higher cash and cash equivalent balances. Provision for Income Taxes The provision for income taxes for the first nine months of 2000 was $3,736,000 as compared to $2,455,000 for the first nine months of 1999. The increase in the provision is due primarily to higher United States taxes, resulting from the gains on the sale of marketable securities and higher foreign earnings subject to taxes in 2000 versus 1999. -13-

Three Months ended September 30, 2000 vs. Three Months ended September 30, 1999 Net Sales Net sales increased 36.1% from $30,536,478 during the third quarter of 1999 to $41,560,409 during the third quarter of 2000. The Company attributes this increase primarily to the reasons set forth in the nine-month analysis. Cost of Sales Cost of sales as a percentage of net sales decreased 4.7% to 59.5% during the third quarter of 2000 from 64.2% during the third quarter of 1999. The Company attributes this decrease primarily to the reasons set forth in the nine-month analysis. Selling, General and Administrative Expenses The percentage relationship of selling, general and administrative expenses to net sales decreased 1.8% to 15.1% during the third quarter of 2000 from 16.9% during the third quarter of 1999. The Company attributes the percentage decrease primarily to increased sales. Selling, general and administrative expenses increased in dollar amount by approximately $1,106,000. The Company attributes the increase in dollar amount of such expenses primarily to the reasons set forth in the nine-month analysis. Other Income and Expense Other income, consisting principally of interest earned on cash equivalents and gains on sale of marketable securities, increased by approximately $658,000 during the third quarter of 2000 compared to the third quarter of 1999. The increase is due to the reasons set forth in the nine-month analysis. Provision for Income Taxes The provision for income taxes for the third quarter of 2000 was $1,221,000 as compared to $654,000 for the third quarter of 1999. The increase in the provision is due primarily to higher earnings subject to taxes in the third 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 flows 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 September 30, 2000; $12 million is from domestic banks and $2 million is from foreign banks. The Company has contracted for the reconstruction and addition of new corporate offices in Jersey City in the amount of $2.5 million. As of September 30, 2000 approximately $920,000 has been paid towards this contract. -14-

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. As of October 31, 2000 the Company had repurchased 18,600 Class B shares at a total cost of approximately $609,000. During the first nine months of 2000, the Company's cash and cash equivalents increased by approximately $25 million, reflecting approximately $29.5 million provided by operating activities and approximately $2.3 million from the sale of marketable securities, offset, in part, by approximately $4.8 million in purchases of plant and equipment, $.8 million in purchases of marketable securities and approximately 1.2 million in dividends paid to common shareholders. Cash and cash equivalents and accounts receivable comprised approximately 52.7% and 41.9% of the Company's total assets at September 30, 2000 and December 31, 1999, respectively. The Company's current ratio (i.e., the ratio of current assets to current liabilities) was 4.4 to 1 and 5.5 to 1 at September 30, 2000 and December 31, 1999, respectively. New Accounting Pronouncements In June 1998, the Financial Accounting Standards Board (FASB)issued Statement of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities"(SFAS 133). This standard was amended by Statement of Financial Accounting Standards No. 137 "Accounting for Derivative Instruments and Hedging Activities-Deferral of the Effective Date of FASB Statement No. 133" and changed the effective date for SFAS 133 to all fiscal quarters of fiscal years beginning after June 15, 2000.In June 2000, the FASB issued SFAS 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities, ("SFAS 133"). SFAS 133 and 138 requires that all derivative instruments be recorded on the balance sheet at their respective fair values. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on the designation of the hedge transaction. For fair value hedge transactions in which the Company is hedging changes in the fair value of assets or liabilities, changes in the fair value of the derivative instrument will generally be offset by changes in the hedged item's fair value. For cash flow hedge transactions in which the Company is hedging the variability of cash flows related to a variable rate asset, liability or forecasted transaction, changes in the fair value of the derivative instrument will be reported in other comprehensive income. The gains and losses on the derivative instrument that are reported in other comprehensive income will be recognized in earnings in the periods in which earnings are impacted by the variability of the cash flows of the hedged item. The Company will adopt SFAS 133 and 138 in the first quarter of 2001 and does not expect such adoption to have a material effect on the Company's consolidated statement of operations, financial position or cash flows. -15-

In December 1999, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial Statements". SAB 101 summarizes certain of the SEC's views in applying generally accepted accounting principles to revenue recognition in financial statements. The Company adopted the provisions of SAB 101 during the fourth quarter ending December 31, 2000 and it is not expected to have a material impact on the Company's consolidated results of operations, financial position or cash flows. Item 3. Quantitative and Qualitative Disclosures About Market Risk 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, ability to procure adequate supplies and materials, 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. -16-

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 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 September 30, 2000. -17-

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 By: /s/ COLIN DUNN ------------------------------- Colin Dunn, Vice President (Principal Financial and Accounting Officer) Dated: November 9, 2000 -18-

5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BEL FUSE INC. AND SUBSIDIARIES FINANCIAL STATEMENTS AT SEPTEMBER 30, 2000 AND THE NINE MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1 12-MOS DEC-31-2000 SEP-30-2000 56,392,945 1,044,957 24,893,920 688,000 23,826,524 106,332,226 72,553,080 34,854,946 155,013,038 24,337,241 0 1,058,931 0 0 128,811,866 155,013,038 101,415,534 101,415,534 62,392,790 79,413,294 0 0 0 24,951,452 3,736,000 21,215,452 0 0 0 21,215,452 2.01 1.94