New
Jersey
|
22-1463699
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
incorporation
or organization)
|
Identification
No.)
|
BEL
FUSE INC.
|
||||||||||
INDEX
|
||||||||||
Page
|
||||||||||
Part
I
|
Financial
Information
|
|
||||||||
Item
1.
|
|
Financial
Statements
|
|
1
|
||||||
|
Consolidated
Balance Sheets as of June 30, 2005 (unaudited)
and December 31, 2004
|
2-3
|
||||||||
|
Consolidated
Statements of Operations for the Six
and Three Months Ended June 30, 2005 and 2004
(unaudited)
|
4 | ||||||||
|
||||||||||
|
Consolidated
Statements of Stockholders' Equity for
the Years Ended December 31, 2004 and 2003 and the
Six Months Ended June 30, 2005
(unaudited)
|
5-6 | ||||||||
|
||||||||||
Consolidated
Statements of Cash Flows for the Six Months
Ended June 30, 2005 and 2004 (unaudited)
|
7-9 | |||||||||
Notes
to Consolidated Financial Statements
(unaudited)
|
10-26
|
|||||||||
Item 2. |
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
27-45
|
||||||||
Item 3. |
Quantitative
and Qualitative Disclosures About Market
Risk
|
45
|
||||||||
Item 4. |
Controls
and Procedures
|
46
|
||||||||
Part II |
Other
Information
|
|||||||||
Item 1. |
Legal
Proceedings
|
47
|
||||||||
Item 4. |
Submission
of Matters to a Vote of Security Holders
|
48
|
||||||||
Item 6. |
Exhibits
|
48
|
||||||||
Signatures |
49
|
|||||||||
BEL
FUSE INC. AND SUBSIDIARIES
|
|||||||
CONSOLIDATED
BALANCE SHEETS
|
|||||||
June
30,
|
December
31,
|
||||||
2005
|
2004
|
||||||
(Unaudited)
|
|||||||
ASSETS
|
|||||||
Current
Assets:
|
|||||||
Cash and cash equivalents |
$
|
54,051,516
|
$
|
71,197,891
|
|||
Marketable
securities
|
18,456,292
|
23,120,028
|
|||||
Accounts
receivable - less allowance for doubtful
|
|||||||
accounts
of $1,273,000 and $1,610,000 as of
|
|||||||
June
30, 2005 and December 31, 2004, respectively
|
40,436,358
|
33,247,911
|
|||||
Inventories
|
33,003,754
|
29,101,060
|
|||||
Prepaid
expenses and other current
|
|||||||
assets
|
1,997,279
|
2,404,718
|
|||||
Deferred
income taxes
|
248,000
|
-
|
|||||
Assets
held for sale
|
797,724
|
696,013
|
|||||
Total
Current Assets
|
148,990,923
|
159,767,621
|
|||||
Property,
plant and equipment - net
|
42,599,973
|
41,244,759
|
|||||
Intangible
assets - net
|
4,016,544
|
2,691,682
|
|||||
Goodwill
|
24,425,055
|
9,881,854
|
|||||
Prepaid
pension costs
|
1,127,941
|
1,127,941
|
|||||
Other
assets
|
2,772,413
|
3,062,714
|
|||||
TOTAL
ASSETS
|
$
|
223,932,849
|
$
|
217,776,571
|
|||
BEL
FUSE INC. AND SUBSIDIARIES
|
|||||||
CONSOLIDATED
BALANCE SHEETS
|
|||||||
June
30,
|
December
31,
|
||||||
2005
|
2004
|
||||||
(Unaudited)
|
|||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Current
Liabilities:
|
|||||||
Current portion of long-term debt |
$
|
-
|
$
|
2,000,000
|
|||
Short-term
debt
|
482,509
|
-
|
|||||
Accounts
payable
|
14,007,266
|
8,814,161
|
|||||
Accrued
expenses
|
9,115,296
|
10,293,576
|
|||||
Deferred
income taxes
|
-
|
3,322,000
|
|||||
Income
taxes payable
|
9,093,026
|
7,172,955
|
|||||
Dividends
payable
|
545,000
|
541,000
|
|||||
Total
Current Liabilities
|
33,243,097
|
32,143,692
|
|||||
Long-term
Liabilities:
|
|||||||
Minimum
pension obligation
|
2,602,583
|
2,261,583
|
|||||
Long-term
debt - net of current portion
|
-
|
4,500,000
|
|||||
Deferred
income taxes
|
1,234,000
|
410,000
|
|||||
Total
Long-term Liabilities
|
3,836,583
|
7,171,583
|
|||||
Total
Liabilities
|
37,079,680
|
39,315,275
|
|||||
Commitments
and Contingencies
|
|||||||
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
|
|||||||
2,702,677
and 2,702,677 shares, respectively
|
|||||||
(net
of 1,072,770 treasury shares)
|
270,268
|
270,268
|
|||||
Class
B common stock, par value
|
|||||||
$.10
per share - authorized
|
|||||||
30,000,000
shares; outstanding 8,778,589
|
|||||||
and
8,660,589 shares, respectively
|
|||||||
(net
of 3,218,310 treasury shares)
|
877,859
|
866,059
|
|||||
Additional
paid-in capital
|
24,235,077
|
21,989,174
|
|||||
Retained
earnings
|
159,841,414
|
149,949,283
|
|||||
Accumulated
other comprehensive
|
|||||||
income
|
1,628,551
|
5,386,512
|
|||||
Total
Stockholders' Equity
|
186,853,169
|
178,461,296
|
|||||
TOTAL
LIABILITIES AND
|
|||||||
STOCKHOLDERS'
EQUITY
|
$
|
223,932,849
|
$
|
217,776,571
|
|||
BEL
FUSE INC. AND SUBSIDIARIES
|
|||||||||||||
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|||||||||||||
(Unaudited)
|
|||||||||||||
Six
Months Ended
|
Three
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2005
|
2004
|
2005
|
2004
|
||||||||||
|
|||||||||||||
Net
Sales
|
$
|
102,983,706
|
$
|
90,747,265
|
$
|
57,545,421
|
$
|
48,390,242
|
|||||
Costs
and expenses:
|
|||||||||||||
Cost
of sales
|
73,380,908
|
62,987,015
|
40,692,097
|
33,196,001
|
|||||||||
Selling,
general and administrative
|
15,839,939
|
15,069,585
|
8,618,636
|
8,118,713
|
|||||||||
Fixed
asset impairment
|
-
|
1,032,786
|
-
|
1,032,786
|
|||||||||
89,220,847
|
79,089,386
|
49,310,733
|
42,347,500
|
||||||||||
Income
from operations
|
13,762,859
|
11,657,879
|
8,234,688
|
6,042,742
|
|||||||||
Interest
expense
|
(207,469
|
)
|
(116,474
|
)
|
(140,319
|
)
|
(59,708
|
)
|
|||||
Interest
income
|
632,650
|
279,579
|
407,306
|
175,219
|
|||||||||
Lawsuit
proceeds
|
-
|
2,935,000
|
-
|
2,935,000
|
|||||||||
Earnings
before provision for income taxes
|
14,188,040
|
14,755,984
|
8,501,675
|
9,093,253
|
|||||||||
Income
tax provision
|
3,206,000
|
2,956,000
|
1,833,000
|
1,948,000
|
|||||||||
Net
earnings
|
$
|
10,982,040
|
$
|
11,799,984
|
$
|
6,668,675
|
$
|
7,145,253
|
|||||
Earnings
per common share - basic
|
$
|
0.96
|
$
|
1.05
|
$
|
0.58
|
$
|
0.64
|
|||||
Earnings
per common share - diluted
|
$
|
0.95
|
$
|
1.03
|
$
|
0.58
|
$
|
0.63
|
|||||
Weighted
average common shares
|
|||||||||||||
outstanding
- basic
|
11,420,305
|
11,225,389
|
11,468,398
|
11,247,242
|
|||||||||
Weighted
average common shares
|
|||||||||||||
outstanding
- diluted
|
11,519,992
|
11,418,840
|
11,532,455
|
11,426,868
|
|||||||||
BEL
FUSE INC. AND SUBSIDIARIES
|
||||||||||||||||||||||
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||
|
Cumulative
|
|||||||||||||||||||||
|
Other
|
|||||||||||||||||||||
Compre-
|
Compre-
|
Class
A
|
Class
B
|
Additional
|
||||||||||||||||||
hensive
|
Retained
|
hensive
|
Common
|
Common
|
Paid-In
|
|||||||||||||||||
Total
|
Income
(loss)
|
Earnings
|
Income
(loss)
|
Stock
|
Stock
|
Capital
|
||||||||||||||||
|
||||||||||||||||||||||
Balance,
January 1, 2003
|
$
|
130,659,147
|
$
|
115,632,819
|
$
|
(50,132
|
)
|
$
|
267,623
|
$
|
826,149
|
$
|
13,982,688
|
|||||||||
Exercise
of stock
|
||||||||||||||||||||||
options
|
2,580,224
|
2,544
|
19,920
|
2,557,760
|
||||||||||||||||||
Tax
benefits arising
|
||||||||||||||||||||||
from
the disposition of
|
||||||||||||||||||||||
non-qualified
|
||||||||||||||||||||||
incentive
stock options
|
812,000
|
812,000
|
||||||||||||||||||||
Cash
dividends on Class A
|
||||||||||||||||||||||
common
stock
|
(322,234
|
)
|
(322,234
|
)
|
||||||||||||||||||
Cash
dividends on Class B
|
||||||||||||||||||||||
common
stock
|
(1,667,586
|
)
|
(1,667,586
|
)
|
||||||||||||||||||
Currency
translation
|
||||||||||||||||||||||
adjustment
- net of taxes
|
1,014,808
|
$
|
1,014,808
|
1,014,808
|
||||||||||||||||||
Increase
in unrealized gain on
|
||||||||||||||||||||||
marketable
securities-net of taxes
|
14,900
|
14,900
|
14,900
|
|||||||||||||||||||
Net
earnings
|
13,763,694
|
13,763,694
|
13,763,694
|
|||||||||||||||||||
Comprehensive
income
|
$
|
14,793,402
|
||||||||||||||||||||
Balance,
December 31, 2003
|
146,854,953
|
127,406,693
|
979,576
|
270,167
|
846,069
|
17,352,448
|
||||||||||||||||
Exercise
of stock
|
||||||||||||||||||||||
options
|
3,891,266
|
101
|
19,990
|
3,871,175
|
||||||||||||||||||
Tax
benefits arising
|
||||||||||||||||||||||
from
the disposition of
|
||||||||||||||||||||||
non-qualified
|
||||||||||||||||||||||
incentive
stock options
|
765,551
|
765,551
|
||||||||||||||||||||
Cash
dividends on Class A
|
||||||||||||||||||||||
common
stock
|
(430,707
|
)
|
(430,707
|
)
|
||||||||||||||||||
Cash
dividends on Class B
|
||||||||||||||||||||||
common
stock
|
(1,748,292
|
)
|
(1,748,292
|
)
|
||||||||||||||||||
Currency
translation
|
||||||||||||||||||||||
adjustment
- net of taxes
|
386,257
|
$
|
386,257
|
386,257
|
||||||||||||||||||
Increase
in unrealized gain on
|
||||||||||||||||||||||
marketable
securities-net of taxes
|
4,020,679
|
4,020,679
|
4,020,679
|
|||||||||||||||||||
Net
earnings
|
24,721,589
|
24,721,589
|
24,721,589
|
|||||||||||||||||||
Comprehensive
income
|
$
|
29,128,525
|
||||||||||||||||||||
Balance,
December 31, 2004
|
178,461,296
|
149,949,283
|
5,386,512
|
270,268
|
866,059
|
21,989,174
|
||||||||||||||||
BEL
FUSE INC. AND SUBSIDIARIES
|
||||||||||||||||||||||
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY
|
|
|||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||
|
Cumulative
|
|||||||||||||||||||||
|
Other
|
|||||||||||||||||||||
Compre-
|
Compre-
|
Class
A
|
Class
B
|
Additional
|
||||||||||||||||||
hensive
|
Retained
|
hensive
|
Common
|
Common
|
Paid-In
|
|||||||||||||||||
Total
|
Income
(loss)
|
Earnings
|
Income
(loss)
|
Stock
|
Stock
|
Capital
|
||||||||||||||||
|
||||||||||||||||||||||
Exercise
of stock
|
||||||||||||||||||||||
options
|
2,067,330
|
-
|
11,800
|
2,055,530
|
||||||||||||||||||
Tax
benefits arising
|
||||||||||||||||||||||
from
the disposition of
|
||||||||||||||||||||||
non-qualified
|
||||||||||||||||||||||
incentive
stock options
|
190,373
|
190,373
|
||||||||||||||||||||
Cash
dividends on Class A
|
||||||||||||||||||||||
common
stock
|
(215,470
|
)
|
(215,470
|
)
|
||||||||||||||||||
Cash
dividends on Class B
|
||||||||||||||||||||||
common
stock
|
(874,439
|
)
|
(874,439
|
)
|
||||||||||||||||||
Currency
translation
|
||||||||||||||||||||||
adjustment
- net of taxes
|
(614,665
|
)
|
$
|
(614,665
|
)
|
(614,665
|
)
|
|||||||||||||||
Decrease
in unrealized gain on
|
||||||||||||||||||||||
marketable
securities-net of taxes
|
(3,143,296
|
)
|
(3,143,296
|
)
|
(3,143,296
|
)
|
||||||||||||||||
Net
earnings
|
10,982,040
|
10,982,040
|
10,982,040
|
|||||||||||||||||||
Comprehensive
income
|
$
|
7,224,079
|
||||||||||||||||||||
Balance,
June 30, 2005 (unaudited)
|
$
|
186,853,169
|
$
|
159,841,414
|
$
|
1,628,551
|
$
|
270,268
|
$
|
877,859
|
$
|
24,235,077
|
||||||||||
BEL
FUSE INC. AND SUBSIDIARIES
|
|||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|||||||
(Unaudited)
|
|||||||
Six
Months Ended
|
|||||||
June
30,
|
|||||||
2005
|
2004
|
||||||
Cash
flows from operating
|
|||||||
activities:
|
|||||||
Net
earnings
|
$
|
10,982,040
|
$
|
11,799,984
|
|||
Adjustments
to reconcile net
|
|||||||
earnings
to net cash provided
|
|||||||
by
operating activities:
|
|||||||
Depreciation
and amortization
|
4,502,560
|
4,372,332
|
|||||
Fixed
asset impairment
|
-
|
1,032,786
|
|||||
Other
|
531,373
|
674,000
|
|||||
Deferred
income taxes
|
(1,423,000
|
)
|
1,665,000
|
||||
Changes
in operating assets
|
|||||||
and
liabilities (net of acquisitions)
|
(650,121
|
)
|
(4,431,561
|
)
|
|||
Net
Cash Provided by
|
|||||||
Operating
Activities
|
13,942,852
|
15,112,541
|
|||||
Cash
flows from investing activities:
|
|||||||
Purchase
of property, plant
|
|||||||
and
equipment
|
(3,405,163
|
)
|
(2,010,767
|
)
|
|||
Purchase
of marketable
|
|||||||
securities
|
(643,424
|
)
|
(1,392,146
|
)
|
|||
Payment
for acquisitions - net of
|
|||||||
cash
acquired
|
(20,340,853
|
)
|
(74,539
|
)
|
|||
Proceeds
from repayment
|
|||||||
by
contractors
|
-
|
14,500
|
|||||
Proceeds
from sale of marketable
|
|||||||
securities
|
-
|
4,953,449
|
|||||
Net
Cash Used In
|
|||||||
Investing
Activities
|
(24,389,440
|
)
|
1,490,497
|
||||
BEL
FUSE INC. AND SUBSIDIARIES
|
|||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS (Continued)
|
|||||||
(Unaudited)
|
|||||||
Six
Months Ended
|
|||||||
June
30,
|
|||||||
2005
|
2004
|
||||||
Cash
flows from financing
|
|||||||
activities:
|
|||||||
Proceeds
from borrowings
|
8,000,000
|
-
|
|||||
Loan
repayments
|
(15,360,694
|
)
|
(1,000,000
|
)
|
|||
Proceeds
from exercise of
|
|||||||
stock
options
|
2,067,330
|
2,927,226
|
|||||
Dividends
paid to common
|
|||||||
shareholders
|
(1,086,095
|
)
|
(1,088,950
|
)
|
|||
Net
Cash Provided By (Used In)
|
|||||||
Financing
Activities
|
(6,379,459
|
)
|
838,276
|
||||
Effect
of exchange rate changes on cash
|
(320,328
|
)
|
(71,490
|
)
|
|||
Net
Increase (Decrease) in
|
|||||||
Cash
and Cash Equivalents
|
(17,146,375
|
)
|
17,369,824
|
||||
Cash
and Cash Equivalents
|
|||||||
-
beginning of period
|
71,197,891
|
57,461,152
|
|||||
Cash
and Cash Equivalents
|
|||||||
-
end of period
|
$
|
54,051,516
|
$
|
74,830,976
|
|||
Changes
in operating assets
|
|||||||
and
liabilities (net of acquisitions) consist of:
|
|||||||
Increase
in accounts receivable
|
$
|
(3,735,125
|
)
|
$
|
(4,165,495
|
)
|
|
Increase
in inventories
|
(1,181,135
|
)
|
(4,244,931
|
)
|
|||
(Increase)
decrease in prepaid
|
|||||||
expenses
and other
|
|||||||
current
assets
|
480,706
|
(645,237
|
)
|
||||
Increase
in other assets
|
(624,818
|
)
|
(104,682
|
)
|
|||
Increase
in accounts payable
|
3,075,709
|
3,628,710
|
|||||
Increase
in income taxes payable
|
1,925,559
|
410,097
|
|||||
Increase
(decrease) in accrued expenses
|
(591,017
|
)
|
689,977
|
||||
$
|
(650,121
|
)
|
$
|
(4,431,561
|
)
|
||
BEL
FUSE INC. AND SUBSIDIARIES
|
|||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS (Continued)
|
|||||||
(Unaudited)
|
|||||||
Six
Months Ended
|
|||||||
June
30,
|
|||||||
2005
|
2004
|
||||||
Supplementary
information:
|
|||||||
Cash
paid during the six months for:
|
|||||||
Income
taxes
|
$
|
2,389,322
|
$
|
410,021
|
|||
Interest
|
$
|
207,469
|
$
|
116,474
|
|||
Details
of acquisitions:
|
|||||||
Fair
value of assets
|
|||||||
acquired
(excluding acquired cash of
|
|||||||
$311,856
in 2005)
|
$
|
3,977,256
|
$
|
-
|
|||
Intangibles
|
2,302,905
|
74,539
|
|||||
Goodwill
|
14,543,201
|
-
|
|||||
20,823,362
|
74,539
|
||||||
Less:
Amounts due on acquisition payment
|
482,509
|
-
|
|||||
Cash
paid for acquisition
|
$
|
20,340,853
|
$
|
74,539
|
|||
Six
Months Ended
|
Three
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2005
|
2004
|
2005
|
2004
|
||||||||||
Net
earnings - as reported
|
$
|
10,982,040
|
$
|
11,799,984
|
$
|
6,668,675
|
$
|
7,145,253
|
|||||
Deduct:
Total stock-based
|
|||||||||||||
employee
compensation expense
|
|||||||||||||
determined
under fair value based
|
|||||||||||||
method
for all awards
|
(321,736
|
)
|
(619,797
|
)
|
(160,868
|
)
|
(309,899
|
)
|
|||||
Net
earnings- pro forma
|
$
|
10,660,304
|
$
|
11,180,187
|
$
|
6,507,807
|
$
|
6,835,354
|
|||||
Earnings
per common share -
|
|||||||||||||
basic-as
reported
|
$
|
0.96
|
$
|
1.05
|
$
|
0.58
|
$
|
0.64
|
|||||
Earnings
per common share -
|
|||||||||||||
basic-pro
forma
|
$
|
0.93
|
$
|
0.99
|
$
|
0.57
|
$
|
0.61
|
|||||
Earnings
per common share -
|
|||||||||||||
diluted-as
reported
|
$
|
0.95
|
$
|
1.03
|
$
|
0.58
|
$
|
0.63
|
|||||
Earnings
per common share -
|
|||||||||||||
diluted-pro
forma
|
$
|
0.93
|
$
|
0.98
|
$
|
0.56
|
$
|
0.60
|
Six
Months Ended
|
Three
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2005
|
2004
|
2005
|
2004
|
||||||||||
Weighted
average shares outstanding - basic
|
11,420,305
|
11,225,389
|
11,468,398
|
11,247,242
|
|||||||||
Dilutive
impact of options outstanding
|
99,687
|
193,451
|
64,057
|
179,626
|
|||||||||
Weighted
average shares oustanding - diluted
|
11,519,992
|
11,418,840
|
11,532,455
|
11,426,868
|
|||||||||
Six
Months Ended
|
|||||||
June
30,
|
|||||||
2005
|
2004
|
||||||
Net
sales
|
$
|
108,295
|
$
|
101,478
|
|||
Net
earnings
|
10,758
|
12,226
|
|||||
Earnings
per share - diluted
|
0.93
|
1.07
|
|||||
Cash
|
$
|
311,856
|
||
Accounts
receivable
|
3,687,331
|
|||
Inventories
|
2,862,571
|
|||
Prepaid
expenses
|
96,120
|
|||
Property,
plant and
|
|
|||
equipment
|
1,545,526
|
|||
Other
assets
|
32,083
|
|||
Goodwill
|
14,543,201
|
|||
Intangible
assets
|
2,010,000
|
|||
Notes
payable
|
(860,694
|
)
|
||
Accounts
payable
|
(2,129,165
|
)
|
||
Accrued
expenses
|
(465,002
|
)
|
||
Income
taxes receivable
|
5,488
|
|||
Deferred
income taxes payable
|
(800,000 |
)
|
||
Net
assets acquired
|
$
|
20,839,315
|
Total
|
Asia
|
North
America
|
Europe
|
||||||||||
Balance,
January 1, 2004
|
$
|
9,881,854
|
$
|
6,407,435
|
$
|
2,869,092
|
$
|
605,327
|
|||||
Goodwill
allocation
|
|||||||||||||
related
to acquisitions
|
-
|
-
|
-
|
-
|
|||||||||
Balance,
December 31, 2004
|
9,881,854
|
6,407,435
|
2,869,092
|
605,327
|
|||||||||
Goodwill
allocation
|
|||||||||||||
related
to acquisitions
|
14,543,201
|
-
|
13,554,381
|
988,820
|
|||||||||
Balance,
June 30, 2005
|
$
|
24,425,055
|
$
|
6,407,435
|
$
|
16,423,473
|
$
|
1,594,147
|
December
31, 2004
|
|||||||||||||||||||
Total
|
Asia
|
North
America
|
|||||||||||||||||
Gross
Carrying
|
Accumulated
|
Gross
Carrying
|
Accumulated
|
Gross
Carrying
|
Accumulated
|
||||||||||||||
Amount
|
Amortization
|
Amount
|
Amortization
|
Amount
|
Amortization
|
||||||||||||||
Patents
and Product
|
|||||||||||||||||||
Information
|
$
|
2,935,000
|
$
|
1,338,765
|
$
|
2,653,000
|
$
|
1,188,654
|
$
|
282,000
|
$
|
150,111
|
|||||||
Covenants
not-to-compete
|
3,523,516
|
2,428,069
|
3,523,516
|
2,428,069
|
-
|
-
|
|||||||||||||
Supply
agreement
|
2,660,000
|
2,660,000
|
1,409,800
|
1,409,800
|
1,250,200
|
1,250,200
|
|||||||||||||
$
|
9,118,516
|
$
|
6,426,834
|
$
|
7,586,316
|
$
|
5,026,523
|
$
|
1,532,200
|
$
|
1,400,311
|
||||||||
June
30, 2005
|
|||||||||||||||||||
|
Total
|
Asia
|
North
America
|
||||||||||||||||
|
Gross
Carrying
|
Accumulated
|
Gross
Carrying
|
Accumulated
|
Gross
Carrying
|
Accumulated
|
|||||||||||||
|
Amount
|
Amortization
|
Amount
|
Amortization
|
Amount
|
Amortization
|
|||||||||||||
Patents
and Product
|
|||||||||||||||||||
Information
|
$
|
3,380,112
|
$
|
1,633,010
|
$
|
2,653,000
|
$
|
1,411,610
|
$
|
727,112
|
$
|
221,400
|
|||||||
Customer
relationship
|
500,000
|
26,923
|
-
|
-
|
500,000
|
26,923
|
|||||||||||||
Covenants
not-to-compete
|
4,918,712
|
3,122,347
|
3,818,712
|
2,868,501
|
1,100,000
|
253,846
|
|||||||||||||
$
|
8,798,824
|
$
|
4,782,280
|
$
|
6,471,712
|
$
|
4,280,111
|
$
|
2,327,112
|
$
|
502,169
|
Estimated
|
||||
Year
Ending
|
Amortization
|
|||
December
31,
|
Expense
|
|||
2005
|
$
|
2,011,770
|
||
2006
|
646,281
|
|||
2007
|
107,595
|
|||
2008
|
65,287
|
|||
2009
and thereafter
|
107,324
|
June
30,
|
December
31,
|
||||||
2005
|
2004
|
||||||
Raw
material
|
$
|
19,758,766
|
$
|
15,236,393
|
|||
Work
in progress
|
2,253,676
|
1,607,052
|
|||||
Finished
goods
|
10,991,312
|
12,257,615
|
|||||
$
|
33,003,754
|
$
|
29,101,060
|
||||
Six
Months Ended
|
Three
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2005
|
2004
|
2005
|
2004
|
||||||||||
Total
segment revenues
|
|||||||||||||
North
America
|
$
|
37,119,158
|
$
|
39,703,801
|
$
|
19,158,205
|
$
|
20,090,468
|
|||||
Asia
|
71,509,916
|
64,730,050
|
40,691,564
|
34,244,781
|
|||||||||
Europe
|
7,414,308
|
8,019,194
|
3,415,866
|
4,235,094
|
|||||||||
Total
segment revenues
|
116,043,382
|
112,453,045
|
63,265,635
|
58,570,343
|
|||||||||
Reconciling
items:
|
|||||||||||||
Intersegment
revenues
|
(13,059,676
|
)
|
(21,705,780
|
)
|
(5,720,214
|
)
|
(10,180,101
|
)
|
|||||
Net
sales
|
$
|
102,983,706
|
$
|
90,747,265
|
$
|
57,545,421
|
$
|
48,390,242
|
|||||
Income
(loss) from Operations:
|
|||||||||||||
North
America
|
$
|
3,841,040
|
$
|
1,740,892
|
$
|
2,556,574
|
$
|
355,906
|
|||||
Asia
|
9,799,777
|
8,829,494
|
5,714,850
|
4,974,342
|
|||||||||
Europe
|
122,042
|
1,087,493
|
(36,736
|
)
|
712,494
|
||||||||
$
|
13,762,859
|
$
|
11,657,879
|
$
|
8,234,688
|
$
|
6,042,742
|
||||||
June
30,
|
December
31,
|
||||||
2005
|
2004
|
||||||
Sales
commissions
|
$
|
1,474,751
|
$
|
1,431,169
|
|||
Investment
banking commissions
|
278,956
|
1,000,000
|
|||||
Subcontracting
labor
|
1,687,468
|
1,624,963
|
|||||
Salaries,
bonuses and
|
|||||||
related
benefits
|
2,462,588
|
3,480,213
|
|||||
Other
|
3,211,533
|
2,757,231
|
|||||
$
|
9,115,296
|
$
|
10,293,576
|
||||
Six
Months Ended
|
Three
Months Ended
|
||||||||||||
June
30
|
June
30,
|
||||||||||||
2005
|
2004
|
2005
|
2004
|
||||||||||
Service
cost
|
$
|
154,000
|
$
|
71,000
|
$
|
55,000
|
$
|
43,000
|
|||||
Interest
cost
|
113,000
|
80,000
|
36,000
|
40,000
|
|||||||||
Amortization
of adjustments
|
74,000
|
53,000
|
30,000
|
27,000
|
|||||||||
Total
SERP expense
|
$
|
341,000
|
$
|
204,000
|
$
|
121,000
|
$
|
110,000
|
|||||
June
30,
|
December
31,
|
||||||
2005
|
2004
|
||||||
Balance
sheet amounts:
|
|||||||
Accrued
pension liability
|
$
|
2,602,583
|
$
|
2,261,583
|
|||
Intangible
asset
|
1,127,941
|
1,127,941
|
|||||
·
|
Voting
- Class A receives one vote per share; Class B is
non-voting;
|
·
|
Dividends
(cash) - Cash dividends are payable at the discretion of the Board
of
Directors and is subject to a 5% provision whereby cash dividends
paid out
to Class B must be at least 5% higher per share annually than Class
A. At
the discretion of the Board of Directors, Class B may receive a
cash
dividend without Class A receiving a cash
dividend.
|
·
|
Dividends
(other than cash) and distributions in connection with any
recapitalization and upon liquidation, dissolution or winding up
of the
Company - Shared equally among Class A and Class B;
|
·
|
Mergers
and consolidations - Equal amount and form of consideration per
share
among Class A and Class B;
|
·
|
Class
B Protection - Any person or group that purchases 10% or more of
the
outstanding Class A (excluding certain shares, as defined) must
make a
public cash tender offer (within 90 days) to acquire additional
shares of
Class B to avoid disproportionate voting rights. Failure to do
so will
result in forfeiture of voting rights for those shares acquired
after the
recapitalization. Alternatively, the purchaser can sell Class A
shares to
reduce the purchaser's holdings below 10% (excluding shares owned
prior to
recapitalization). Above 10%, this protection transaction is triggered
every 5% (i.e., 15%, 20%, 25%,
etc.);
|
·
|
Convertibility
- Not convertible into another class of Common Stock or any other
security
by the Company, unless by resolution by the Board of Directors
to convert
such shares as a result of either class becoming excluded from
quotation
on NASDAQ, or if total outstanding shares of Class A falls below
10% of
the aggregate number of outstanding shares of both classes (in
which case,
all Class B shares will be automatically converted in Class A
shares).
|
·
|
Transferability
and trading - Both Class A and Class B are freely transferable
and
publicly traded on NASDAQ National
Market;
|
·
|
Subdivision
of shares - Any split, subdivision or combination of the outstanding
shares of Class A or Class B must be proportionately split with
the other
class in the same manner and on the same
basis.
|
Six
Months Ended
|
Three
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2005
|
2004
|
2005
|
2004
|
||||||||||
Net
earnings
|
$
|
10,982,040
|
$
|
11,799,984
|
$
|
6,668,675
|
$
|
7,145,253
|
|||||
Currency
translation adjustment-
|
|||||||||||||
net
of taxes
|
(614,665
|
)
|
(203,460
|
)
|
(424,138
|
)
|
18,978
|
||||||
Increase
(decrease) in unrealized
|
|||||||||||||
gain
on marketable securities
|
|||||||||||||
-
net of taxes
|
(3,143,296
|
)
|
7,200
|
32,446
|
(8,500
|
)
|
|||||||
Comprehensive
income
|
$
|
7,224,079
|
$
|
11,603,724
|
$
|
6,276,983
|
$
|
7,155,731
|
|||||
Prior
Quarters
|
$
164,329
|
||||||
1st
Quarter
|
2002
|
4,538
|
|||||
2nd
Quarter
|
2002
|
68,098
|
|||||
3rd
Quarter
|
2002
|
38,914
|
|||||
4th
Quarter
|
2002
|
271,163
|
|||||
1st
Quarter
|
2003
|
77,069
|
|||||
2nd
Quarter
|
2003
|
80,046
|
|||||
3rd
Quarter
|
2003
|
28,851
|
|||||
4th
Quarter
|
2003
|
98,263
|
|||||
1st
Quarter
|
2004
|
31,051
|
|||||
2nd
Quarter
|
2004
|
78,232
|
|||||
3rd
Quarter
|
2004
|
72,857
|
|||||
4th
Quarter
|
2004
|
53,295
|
|||||
1st
Quarter
|
2005
|
777
|
|||||
2nd
Quarter
|
2005
|
26,737
|
|||||
$
|
1,094,220
|
||||||
Six
Months Ended
|
|||||||
June
30,
|
|||||||
2005
|
2004
|
||||||
Net
sales
|
$
|
108,295
|
$
|
101,478
|
|||
Net
earnings
|
10,758
|
12,226
|
|||||
Earnings
per share-diluted
|
0.93
|
1.07
|
|||||
Cash
|
$
|
311,856
|
||
Accounts
receivable
|
3,687,331
|
|||
Inventories
|
2,862,571
|
|||
Prepaid
expenses
|
96,120
|
|||
Property,
plant and
|
||||
equipment
|
1,545,526
|
|||
Other
assets
|
32,083
|
|||
Goodwill
|
14,543,201
|
|||
Intangible
assets
|
2,010,000
|
|||
Notes
payable
|
(860,694
|
)
|
||
Accounts
payable
|
(2,129,165
|
)
|
||
Accrued
expenses
|
(465,002
|
)
|
||
Income
taxes receivable
|
5,488
|
|||
Deferred
income taxes payable
|
(800,000 |
)
|
||
Net
assets acquired
|
$
|
20,839,315
|
||
Percentage
of Net Sales
|
Percentage
of Net Sales
|
||||||||||||
Six
Months Ended
|
Three
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2005
|
2004
|
2005
|
2004
|
||||||||||
Net
sales
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
|||||
Cost
of sales
|
71.3
|
69.4
|
70.7
|
68.6
|
|||||||||
Selling,
general and
|
|||||||||||||
administrative
expenses
|
15.4
|
16.6
|
15.0
|
16.8
|
|||||||||
Fixed
asset impairment
|
-
|
1.1
|
-
|
2.1
|
|||||||||
Interest
income - net
|
0.4
|
0.2
|
0.5
|
0.2
|
|||||||||
Lawsuit
proceeds
|
-
|
3.2
|
-
|
6.1
|
|||||||||
Earnings
before provision
|
|||||||||||||
for
income taxes
|
13.7
|
16.3
|
14.8
|
18.8
|
|||||||||
Income
tax provision
|
3.1
|
3.3
|
3.2
|
4.0
|
|||||||||
Net
earnings
|
10.6
|
13.0
|
11.6
|
14.8
|
|||||||||
Increase
(decrease) from
|
Increase
(decrease) from
|
|||||||||
Prior
Period
|
Prior
Period
|
|||||||||
Six
Months Ended
|
Three
Months Ended
|
|||||||||
June
30, 2005
|
June
30, 2005
|
|||||||||
compared
with Six
|
compared
with Three
|
|||||||||
Months
Ended June
|
Months
Ended June
|
|||||||||
30,
2004
|
30,
2004
|
|||||||||
Net
sales
|
13.5
|
%
|
18.9
|
%
|
||||||
Cost
of sales
|
16.5
|
22.6
|
||||||||
Selling,
general and
|
||||||||||
administrative
expenses
|
5.1
|
6.2
|
||||||||
Net
earnings
|
(6.9
|
)
|
(6.7
|
)
|
||||||
Payments
due by period
|
||||||||||||||||
Contractual
Obligations
|
Total
|
Less
than
1
year
|
1-3
years
|
3-5
years
|
More
than
5
years
|
|||||||||||
Short-term
debt
|
$
|
482,509
|
$
|
482,509
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Long-term
debt
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
Capital
expenditure obligations
|
6,471,249
|
6,471,249
|
-
|
|||||||||||||
Contingent
purchase price
|
||||||||||||||||
commitments
|
1,249,270
|
1,249,270
|
-
|
-
|
-
|
|||||||||||
Operating
leases
|
3,595,249
|
735,762
|
1,757,344
|
1,102,139
|
-
|
|||||||||||
Raw
material purchase obligations
|
8,867,454
|
7,999,454
|
868,000
|
-
|
-
|
|||||||||||
Total
|
$
|
20,665,731
|
$
|
16,938,244
|
$
|
2,625,344
|
$
|
1,102,139
|
$
|
-
|
a)
|
Disclosure
controls and procedures.
As of the end of the Company’s most recently completed fiscal quarter
covered by this report, the Company carried out an evaluation,
with the
participation of the Company’s management, including the Company’s chief
executive officer and vice president of finance, of the effectiveness
of
the Company’s disclosure controls and procedures pursuant to Securities
Exchange Act Rule 13a-15. Based upon that evaluation, the Company’s chief
executive officer and vice president of finance concluded that
the
Company’s disclosure controls and procedures are effective in ensuring
that information required to be disclosed by the Company in the
reports
that it files or submits under the Securities Exchange Act is recorded,
processed, summarized and reported, within the time periods specified
in
the SEC’s rules and forms.
|
b.)
|
Changes
in internal controls over financial reporting:
There have been no changes in the Company's internal controls over
financial reporting that occurred during the Company's last fiscal
quarter
to which this report relates that have materially affected, or
are
reasonable likely to materially affect, the Company internal control
over
financial reporting.
|
For
|
Withheld
|
||||||
Avi
Eden
|
2,443,005
|
33,006
|
|||||
Robert
H. Simandl
|
2,310,316
|
165,695
|
BEL FUSE INC. | ||
|
|
|
By: | /s/ Daniel Bernstein | |
Daniel Bernstein, President and Chief Executive Officer |
|
|
|
By: | /s/ Colin Dunn | |
Colin Dunn, Vice President of Finance |
1.
|
I
have reviewed this quarterly report on Form 10-Q of Bel Fuse Inc.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such
statements
were made, not misleading with respect to the period covered by
this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial
information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
|
4.
|
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures
(as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a -
15(f) and 15d - 15(f)) for the registrant and have:
|
a.
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including
its
consolidated subsidiaries, is made known to us by others within
those
entities, particularly during the period in which this report is
being
prepared;
|
b.
|
Designed
such internal control over financial reporting, or caused such
internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
c.
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
|
d.
|
Disclosed
in this report any change in the registrant's internal control
over
financial reporting that occurred during the registrant's most
recent
fiscal quarter that has materially affected, or is reasonably likely
to
materially affect, the registrant's internal control over financial
reporting; and
|
5.
|
The
registrant's other certifying officer and I have disclosed, based
on our
most recent evaluation of internal control over financial reporting,
to
the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent functions):
|
a.
|
All
significant deficiencies and material weaknesses in the design
or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability
to record,
process, summarize and report financial information; and
|
b.
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control
over financial reporting.
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of Bel Fuse Inc.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such
statements
were made, not misleading with respect to the period covered by
this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial
information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
|
4.
|
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures
(as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a -
15(f) and 15d - 15(f)) for the registrant and have:
|
a.
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including
its
consolidated subsidiaries, is made known to us by others within
those
entities, particularly during the period in which this report is
being
prepared;
|
b.
|
Designed
such internal control over financial reporting, or caused such
internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
c.
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
|
d.
|
Disclosed
in this report any change in the registrant's internal control
over
financial reporting that occurred during the registrant's most
recent
fiscal quarter that has materially affected, or is reasonably likely
to
materially affect, the registrant's internal control over financial
reporting; and
|
5.
|
The
registrant's other certifying officer and I have disclosed, based
on our
most recent evaluation of internal control over financial reporting,
to
the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent functions):
|
a.
|
All
significant deficiencies and material weaknesses in the design
or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability
to record,
process, summarize and report financial information; and
|
b.
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control
over financial reporting.
|