x |
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
For
the year ended
|
December
31, 2005
|
o |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
NEW
JERSEY
|
22-1463699
|
(State
of other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
206
Van Vorst Street, Jersey City, New Jersey
|
07302
|
(Address
of principal executive offices)
|
(Zip
Code)
|
BEL
FUSE INC.
|
|||
Forward
Looking Information
|
Page
|
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1
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12
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18
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18
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20
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21
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22
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24
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26
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45
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45
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47
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47
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49
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49
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49
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49
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49
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49
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50
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53
|
|||
Item 1. |
§
|
Discrete
components
|
§
|
Power
transformers
|
§
|
MagJack®
integrated connector modules
|
§
|
Power
conversion modules
|
§
|
Integrated
analog front end modules
|
§
|
Custom
modules
|
§
|
Miniature
fuses
|
§
|
Micro
fuses
|
§
|
Surface
mount fuses
|
§
|
Passive
jacks
|
§
|
Plugs
|
§
|
Cable
assemblies
|
Product
Group
|
Function
|
Application
|
|
Magnetics
|
|||
Discrete
Components
|
Condition,
filter and isolate the electronic signal to ensure accurate data
and/or
voice transmission.
|
Network
switches, routers, hubs and PCs used in 10/100Base-TX, Gigabit, Voice
over
the Internet Protocol (”VoIP"), home networking and cable modem
applications.
|
|
Power
Transformers
|
Safety
isolation and distribution.
|
Power
supplies, alarm, fire detection and security systems, HVAC, lighting
and
medical equipment.
|
|
MagJack®
Integrated Connector Modules
|
Condition,
filter and isolate an electronic signal to ensure accurate data and/or
voice transmission and to provide RJ45 and USB
connectivity
|
Network
switches, routers, hubs and PCs used in 10/100Base-TX, Gigabit, and
VoIP.
|
|
Modules
|
|||
Power
Conversion Modules
(DC-DC
Converters)
|
Convert
DC voltage level to other DC level as required to meet the power
needs of
low voltage silicon devices
|
Networking
equipment, distributed power architecture, telecom devices, computers
and
peripherals.
|
|
Integrated
Analog Front End Modules
|
Condition,
filter and isolate the electronic signal to ensure accurate data
and/or
voice transmission.
|
Broadband
and telecom equipment supporting ISDN, T1/E1, xDSL technologies.
|
|
Custom
Modules
|
Integrate
several discrete devices to provide customized, space-saving
solution.
|
Automotive
products.
|
|
Circuit
Protection
|
|||
Miniature
Fuses
|
Protects
devices by preventing current in an electrical circuit from exceeding
acceptable levels.
|
Power
supplies, electronic ballasts and consumer electronics.
|
|
Micro
Fuses
|
Protects
devices by preventing current in an electrical circuit from exceeding
acceptable levels.
|
Cellular
phone chargers, consumer electronics, power supplies and set top
boxes.
|
|
Surface
Mount Fuses
|
Protects
devices by preventing current in an electrical circuit from exceeding
acceptable levels.
|
Cellular
phones, mobile computers, IC and battery protection, power supplies
and
telecom line cards.
|
|
Interconnect
|
|||
Passive
Jacks
|
RJ45
and RJ11 connectivity for
data
and/or voice transmission.
|
Network
routers, hubs, switches and patch panels deployed in Category 5,
5e and 6
cable systems.
|
|
Plugs
|
RJ45
and RJ11 connectivity for
data
and/or voice transmission.
|
Network
routers, hubs, switches and patch panels deployed in Category 5,
5e and 6
cable systems.
|
|
Cable
Assemblies
|
RJ45
and RJ11 connectivity for
data
and voice transmission.
|
Structured
Category 5, 5e and 6 cabling systems (premise
wiring).
|
December
31,
|
|||||||
2005
|
2004
|
||||||
Net
sales
|
$
|
221,227
|
$
|
212,331
|
|||
Net
earnings
|
20,026
|
25,419
|
|||||
Earnings
per share - diluted
|
1.74
|
2.21
|
Cash
|
$
|
311,856
|
||
Accounts
receivable
|
3,687,331
|
|||
Inventories
|
2,862,571
|
|||
Prepaid
expenses
|
96,120
|
|||
Income
taxes receivable
|
5,488
|
|||
Property,
plant and
|
||||
equipment
|
1,545,526
|
|||
Other
assets
|
32,083
|
|||
Deferred
tax asset
|
1,392,850
|
|||
Goodwill
|
12,456,080
|
|||
Intangible
assets
|
1,960,000
|
|||
Notes
payable
|
(860,694
|
)
|
||
Accounts
payable
|
(2,129,165
|
)
|
||
Accrued
expenses
|
(465,002
|
)
|
||
Net
assets acquired
|
$
|
20,895,044
|
·
|
announcements
of technological or competitive
developments;
|
·
|
acquisitions
or strategic alliances by us or our
competitors;
|
·
|
the
gain or loss of a significant customer or
order;
|
·
|
changes
in estimates of our financial performance or changes in recommendations
by
securities analysts regarding us or our industry;
or
|
·
|
general
market or economic conditions.
|
Item 2. |
Location
|
Approximate
Square
Feet
|
Owned/
Leased
|
Percentage
Used
for
Manufacturing
|
|||||||
Donnguan,
People's
|
||||||||||
Republic
of China
|
346,000
|
Leased
|
61
|
%
|
||||||
Zhongshan,
People's
|
||||||||||
Republic
of China
|
416,000
|
Leased
|
81
|
%
|
||||||
Zhongshan,
People's
|
||||||||||
Republic
of China
|
128,000
|
Leased
|
74
|
%
|
||||||
Zhongshan,
People's
|
||||||||||
Republic
of China
|
77,000
|
Owned
|
81
|
%
|
||||||
Hong
Kong
|
66,000
|
Owned
|
29
|
%
|
||||||
Macao
|
71,000
|
Owned
|
28
|
%
|
||||||
Prague,
Czech Republic
|
9,000
|
Leased
|
76
|
%
|
||||||
Dominican
Republic
|
29,000
|
Leased
|
76
|
%
|
||||||
Cananea,
Mexico
|
28,000
|
Leased
|
65
|
%
|
||||||
Inwood,
New York
|
35,000
|
Owned
|
60
|
%
|
||||||
Glen
Rock, Pennsylvania
|
74,000
|
Owned
|
60
|
%
|
||||||
Westboro,
MA
|
22,000
|
Leased
|
85
|
%
|
||||||
1,301,000
|
Item 3. |
(a) |
Market
Information
|
Class
A
|
Class
A
|
Class
B
|
Class
B
|
||||||||||
High
|
Low
|
High
|
Low
|
||||||||||
Year
Ended December 31, 2004
|
|||||||||||||
First
Quarter
|
$
|
34.75
|
$
|
24.24
|
$
|
40.16
|
$
|
28.80
|
|||||
Second
Quarter
|
36.00
|
24.00
|
42.00
|
29.78
|
|||||||||
Third
Quarter
|
35.96
|
27.15
|
41.99
|
32.12
|
|||||||||
Fourth
Quarter
|
31.20
|
24.62
|
36.45
|
30.33
|
|||||||||
Year
Ended December 31, 2005
|
|||||||||||||
First
Quarter
|
29.79
|
24.10
|
34.92
|
28.42
|
|||||||||
Second
Quarter
|
26.74
|
21.50
|
31.72
|
25.54
|
|||||||||
Third
Quarter
|
29.50
|
24.50
|
36.48
|
29.72
|
|||||||||
Fourth
Quarter
|
30.10
|
22.39
|
37.00
|
28.88
|
(b) |
Holders
|
(c) |
Dividends
|
(d)
|
Securities
authorized for issuance under the Equity Compensation
Plans
|
Plan
category
|
Number
of securities to be
issued
upon exercise of
outstanding
options, warrants
and
rights and restricted stock
awards
to be granted
|
Weighted
average exercise
price
of outstanding options,
warrants
and rights
|
Number
of securities remaining
available
for future issuance
|
|||||||
Equity
compensation plans approved by
security holders
|
286,013
|
$
|
24.96
|
810,985
|
||||||
Equity
compensation plans not approved
by security holders
|
—
|
—
|
—
|
|||||||
Totals
|
286,013
|
$
|
24.96
|
810,985
|
||||||
Years
Ended December 31,
|
||||||||||||||||
2005
|
2004
|
2003
|
2002
|
2001
|
||||||||||||
(In
thousands of dollars, except per share data)
|
||||||||||||||||
Selected
Statements of Operations Data: (a) (b) (c)
|
||||||||||||||||
Net
sales
|
$
|
215,916
|
$
|
190,022
|
$
|
158,498
|
$
|
95,528
|
$
|
96,045
|
||||||
Cost
of sales
|
156,147
|
132,776
|
113,813
|
72,420
|
89,603
|
|||||||||||
Selling,
general and
|
||||||||||||||||
administrative
expenses
|
33,152
|
31,302
|
26,757
|
22,270
|
21,561
|
|||||||||||
Fixed
asset impairment
|
—
|
1,033
|
—
|
—
|
—
|
|||||||||||
Interest
income - net
|
1,098
|
525
|
249
|
940
|
2,411
|
|||||||||||
Lawsuit
proceeds
|
—
|
2,935
|
—
|
—
|
—
|
|||||||||||
Earnings
(loss) before provision (benefit)
|
||||||||||||||||
for
income taxes
|
27,715
|
28,371
|
18,177
|
1,778
|
(12,709
|
)
|
||||||||||
Income
tax provision (benefit)
|
7,482
|
3,649
|
4,413
|
1,199
|
(547
|
)
|
||||||||||
Net
earnings (loss)
|
20,233
|
24,722
|
13,764
|
579
|
(12,162
|
)
|
||||||||||
Earnings
(loss) per common
|
||||||||||||||||
share
- basic
|
1.76
|
2.19
|
1.25
|
0.05
|
(1.13
|
)
|
||||||||||
Earnings
(loss) per common
|
||||||||||||||||
share
- diluted
|
1.75
|
2.15
|
1.24
|
0.05
|
(1.13
|
)
|
||||||||||
Cash
dividends declared per
|
||||||||||||||||
Class
A common share
|
0.16
|
0.16
|
0.08
|
—
|
—
|
|||||||||||
Cash
dividends declared per
|
||||||||||||||||
Class
B common share
|
0.20
|
0.20
|
0.20
|
0.20
|
0.20
|
|||||||||||
As
of December 31,
|
||||||||||||||||
2005
|
2004
|
2003
|
2002
|
2001
|
||||||||||||
(In
thousands of dollars, except per share data and
percentages)
|
||||||||||||||||
Selected
Balance Sheet Data and Ratios:
|
||||||||||||||||
Working
capital
|
$
|
128,203
|
$
|
127,624
|
$
|
102,370
|
$
|
82,986
|
$
|
83,698
|
||||||
Total
assets
|
242,056
|
217,777
|
181,817
|
147,840
|
147,517
|
|||||||||||
Long
term debt
|
—
|
6,500
|
8,500
|
—
|
—
|
|||||||||||
Stockholders'
equity
|
201,577
|
178,461
|
146,855
|
130,659
|
129,463
|
|||||||||||
Book
value per
|
||||||||||||||||
share
|
18.21
|
15.70
|
13.16
|
11.95
|
12.02
|
|||||||||||
Return
on average
|
||||||||||||||||
total
assets, %
|
8.83
|
12.37
|
7.95
|
0.40
|
(7.60
|
)
|
||||||||||
Return
on average
|
||||||||||||||||
Stockholders'
|
||||||||||||||||
equity,
%
|
10.75
|
15.20
|
9.93
|
0.44
|
(8.80
|
)
|
(a)
|
On
May 11, 2001, the Company acquired 100% of the common stock of E-Power
Ltd
("E-Power") and the assets and business of Current Concepts, Inc.
("Current Concepts") for an aggregate of $6,285,000 in cash (including
acquisition expenses). During the years ended December 31, 2005,
2004,
2003 and 2002, the Company paid $697,000, $354,000, $209,000 and
$61,000,
respectively, in contingent purchase price payments. The transactions
were
accounted for using the purchase method of accounting and, accordingly,
the results of operations of Current Concepts and E-Power have been
included in the Company's financial statements since the date of
acquisition.
|
(b)
|
See
Item 1 for information regarding the acquisitions during 2005 of
Galaxy
and Netwatch and during 2003 of APC and the Passive Components Group
of
Insilco. These transactions were accounted for using the purchase
method
of accounting and, accordingly, the results of operations of Galaxy,
Netwatch, the Passive Components Group of Insilco and APC have been
included in the Company's financial statements since their respective
dates of acquisition.
|
(c) |
The
Company was a party to an arbitration proceeding related to the
acquisition of its Telecom Components business in 1998. The Company
asserted that the seller breached the terms of a related Global
Procurement Agreement dated October 2, 1998 and sought damages
related
thereto. During December 2004, the Company and the seller settled
this
matter. The settlement resulted in a payment to the Company and
an
unconditional release by the seller of all counterclaims against
the
Company. The net gain of $2,935,000 from the settlement is included
in the
Company’s consolidated statement of operations for the year ended December
31, 2004.
|
Percentage
of Net Sales
|
||||||||||
Years
Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
Net
sales
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||
Cost
of sales
|
72.3
|
69.9
|
71.8
|
|||||||
Selling,
general and
|
||||||||||
administrative
expenses
|
15.4
|
16.5
|
16.9
|
|||||||
Fixed
asset impairment
|
—
|
0.5
|
—
|
|||||||
Interest
income - net
|
0.5
|
0.3
|
0.2
|
|||||||
Lawsuit
proceeds
|
—
|
1.5
|
—
|
|||||||
Earnings
before provision for
|
||||||||||
income
taxes
|
12.8
|
14.9
|
11.5
|
|||||||
Income
tax provision
|
3.5
|
1.9
|
2.8
|
|||||||
Net
earnings
|
9.3
|
13.0
|
8.7
|
Increase
(Decrease) from
|
|||||||
Prior
Period
|
|||||||
2005
compared
|
2004 compared | ||||||
with
2004
|
with
2003
|
||||||
Net
sales
|
13.6
|
%
|
19.9
|
%
|
|||
Cost
of sales
|
17.6
|
16.7
|
|||||
Selling,
general and administrative expenses
|
5.9
|
17.0
|
|||||
Net
earnings
|
(18.2
|
)
|
79.6
|
||||
¨ |
The
Company incurred a 2.1% increase in material costs as a percentage
of net
sales. The increase in raw material costs is principally related
to
increased manufacturing of value-added products (including new Galaxy
products in 2005), which have a higher raw material content than
the
Company’s other products, and increased costs for raw materials such as
copper, steel and petroleum-based
products.
|
¨ |
The
Company has also started to pay higher wage rates and benefits to
its
production workers in China. These higher rates and benefits are
reflected
in the Company’s cost of goods sold.
|
¨ |
Sales
of the Company’s DC-DC power products have increased. While these products
are strategic to Bel’s growth and important to total earnings, they return
lower gross profit percentage margins as a larger percentage of their
bills of materials are purchased components. As these sales continue
to
increase, the Company’s average gross profit percentage will likely
decrease. The increasing sales also have an impact on the accelerated
write off of intangibles related to contingent purchase price payments
arising from the acquisition of Current
Concepts.
|
Payments
due by period
|
||||||||||||||||
Contractual
Obligations
|
Total
|
Less
than
1
year
|
1-3
years
|
3-5
years
|
More
than
5
years
|
|||||||||||
Capital
expenditure obligations
|
$
|
1,753,728
|
$
|
1,753,728
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Contingent
purchase price commitments
|
2,000,000
|
2,000,000
|
—
|
|||||||||||||
Operating
leases
|
3,287,395
|
1,472,846
|
1,102,869
|
711,680
|
||||||||||||
Raw
material purchase obligations
|
12,016,161
|
12,016,161
|
|
|
|
|||||||||||
Total
|
$
|
19,057,284
|
$
|
17,242,735
|
$
|
1,102,869
|
$
|
711,680
|
$
|
—
|
||||||
BEL
FUSE INC.
|
||
Financial
Statements
|
Page
|
|
F-1
|
||
F-2
- F-3
|
||
F-4
|
||
F-5
- F-6
|
||
F-7
- F-9
|
||
F-10
- F-39
|
||
F-40
|
BEL
FUSE INC. AND SUBSIDIARIES
|
||||
December
31,
|
|||||||
2005
|
2004
|
||||||
ASSETS
|
|||||||
Current
Assets:
|
|||||||
Cash
and cash equivalents
|
$
|
51,997,634
|
$
|
71,197,891
|
|||
Marketable
securities
|
38,463,108
|
23,120,028
|
|||||
Accounts
receivable - less allowance for doubtful
|
|||||||
accounts
of $1,107,000 and $1,610,000 at
|
|||||||
December
31, 2005 and 2004, respectively
|
39,304,984
|
33,247,911
|
|||||
Inventories
|
32,947,103
|
29,101,060
|
|||||
Prepaid
expenses and other current
|
|||||||
assets
|
1,691,017
|
2,404,718
|
|||||
Assets
held for sale
|
828,131
|
696,013
|
|||||
Total
Current Assets
|
165,231,977
|
159,767,621
|
|||||
Property,
plant and equipment - net
|
42,379,356
|
41,244,759
|
|||||
Deferred
income taxes
|
3,901,000
|
—
|
|||||
Intangible
assets - net
|
2,782,188
|
2,691,682
|
|||||
Goodwill
|
22,427,934
|
9,881,854
|
|||||
Prepaid
pension costs
|
1,655,362
|
1,127,941
|
|||||
Other
assets
|
3,678,100
|
3,062,714
|
|||||
TOTAL
ASSETS
|
$
|
242,055,917
|
$
|
217,776,571
|
|||
BEL
FUSE INC. AND SUBSIDIARIES
|
||||
CONSOLIDATED
BALANCE SHEETS
|
December
31,
|
|||||||
2005
|
2004
|
||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Current
Liabilities:
|
|||||||
Current
portion of long-term debt
|
$
|
—
|
$
|
2,000,000
|
|||
Accounts
payable
|
14,560,827
|
8,814,161
|
|||||
Accrued
expenses
|
10,667,558
|
10,293,576
|
|||||
Deferred
income taxes
|
1,412,000
|
3,322,000
|
|||||
Income
taxes payable
|
9,840,295
|
7,172,955
|
|||||
Dividends
payable
|
548,000
|
541,000
|
|||||
Total
Current Liabilities
|
37,028,680
|
32,143,692
|
|||||
Long-term
Liabilities:
|
|||||||
Minimum
pension obligation
|
3,450,688
|
2,261,583
|
|||||
Long-term
debt - net of current portion
|
—
|
4,500,000
|
|||||
Deferred
income taxes
|
—
|
410,000
|
|||||
Total
Long-term Liabilities
|
3,450,688
|
7,171,583
|
|||||
Total
Liabilities
|
40,479,368
|
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 9,013,264
|
|||||||
and
8,660,589 shares, respectively
|
|||||||
(net
of 3,218,310 treasury shares)
|
901,327
|
866,059
|
|||||
Additional
paid-in capital
|
31,713,608
|
21,989,174
|
|||||
Retained
earnings
|
167,991,188
|
149,949,283
|
|||||
Deferred
stock-based compensation
|
(3,562,709
|
)
|
—
|
||||
Cumulative
other comprehensive
|
|||||||
income
|
4,262,867
|
5,386,512
|
|||||
Total
Stockholders' Equity
|
201,576,549
|
178,461,296
|
|||||
TOTAL
LIABILITIES AND
|
|||||||
STOCKHOLDERS'
EQUITY
|
$
|
242,055,917
|
$
|
217,776,571
|
|||
BEL
FUSE INC. AND SUBSIDIARIES
|
||||||
Years
Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
|
||||||||||
Net
Sales
|
$
|
215,915,756
|
$
|
190,021,953
|
$
|
158,497,502
|
||||
Costs
and expenses:
|
||||||||||
Cost
of sales
|
156,146,724
|
132,776,304
|
113,812,860
|
|||||||
Selling,
general and administrative
|
33,151,672
|
31,301,722
|
26,757,349
|
|||||||
Fixed
asset impairment
|
—
|
1,032,786
|
—
|
|||||||
189,298,396
|
165,110,812
|
140,570,209
|
||||||||
Income
from operations
|
26,617,360
|
24,911,141
|
17,927,293
|
|||||||
Interest
expense
|
(324,802
|
)
|
(238,552
|
)
|
(228,459
|
)
|
||||
Interest
income
|
1,422,719
|
763,000
|
477,860
|
|||||||
Lawsuit
proceeds
|
—
|
2,935,000
|
—
|
|||||||
Earnings
before provision for income taxes
|
27,715,277
|
28,370,589
|
18,176,694
|
|||||||
Income
tax provision
|
7,482,000
|
3,649,000
|
4,413,000
|
|||||||
Net
earnings
|
$
|
20,233,277
|
$
|
24,721,589
|
$
|
13,763,694
|
||||
Earnings
per common share - basic
|
$
|
1.76
|
$
|
2.19
|
$
|
1.25
|
||||
Earnings
per common share - diluted
|
$
|
1.75
|
$
|
2.15
|
$
|
1.24
|
||||
Weighted
average common shares
|
||||||||||
outstanding
- basic
|
11,510,175
|
11,283,750
|
11,020,916
|
|||||||
Weighted
average common shares
|
||||||||||
outstanding
- diluted
|
11,593,258
|
11,511,095
|
11,133,471
|
|||||||
BEL
FUSE INC. AND SUBSIDIARIES
|
||||||||||||||||
|
Cumulative
|
||||||||||||||||||||||||
|
Other
|
Deferred
|
|||||||||||||||||||||||
Compre-
|
Compre-
|
Class
A
|
Class
B
|
Additional
|
Stock-
|
||||||||||||||||||||
hensive
|
Retained
|
hensive
|
Common
|
Common
|
Paid-In
|
Based
|
|||||||||||||||||||
Total
|
Income
|
Earnings
|
Income
|
Stock
|
Stock
|
Capital
|
Compensation
|
||||||||||||||||||
|
|||||||||||||||||||||||||
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 or
|
|||||||||||||||||||||||||
loss
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 or
|
|||||||||||||||||||||||||
loss
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
|
|
Cumulative
|
||||||||||||||||||||||||
|
Other
|
||||||||||||||||||||||||
Compre-
|
Compre-
|
Class
A
|
Class
B
|
Additional
|
Stock-
|
||||||||||||||||||||
hensive
|
Retained
|
hensive
|
Common
|
Common
|
Paid-In
|
Based
|
|||||||||||||||||||
Total
|
Income
|
Earnings
|
Income
|
Stock
|
Stock
|
Capital
|
Compensation
|
||||||||||||||||||
|
|||||||||||||||||||||||||
Exercise
of stock
|
|||||||||||||||||||||||||
options
|
4,115,508
|
20,028
|
4,095,480
|
||||||||||||||||||||||
Tax
benefits arising
|
|||||||||||||||||||||||||
from
the disposition of
|
|||||||||||||||||||||||||
non-qualified
|
|||||||||||||||||||||||||
incentive
stock options
|
429,802
|
429,802
|
—
|
||||||||||||||||||||||
Cash
dividends on Class A
|
|||||||||||||||||||||||||
common
stock
|
(430,940
|
)
|
(430,940
|
)
|
|||||||||||||||||||||
Cash
dividends on Class B
|
|||||||||||||||||||||||||
common
stock
|
(1,760,432
|
)
|
(1,760,432
|
)
|
|||||||||||||||||||||
Issuance
of restricted
|
|||||||||||||||||||||||||
common
stock
|
5,214,392
|
15,240
|
5,199,152
|
||||||||||||||||||||||
Deferred
stock-based
|
|||||||||||||||||||||||||
compensation
- net of taxes
|
(3,810,840
|
)
|
(3,810,840
|
)
|
|||||||||||||||||||||
Currency
translation
|
|||||||||||||||||||||||||
adjustment
- net of taxes
|
(669,153
|
)
|
$
|
(669,153
|
)
|
(669,153
|
)
|
||||||||||||||||||
Decrease
in unrealized gain or
|
|||||||||||||||||||||||||
loss
on marketable securities
|
|||||||||||||||||||||||||
-net
of taxes
|
(454,492
|
)
|
(454,492
|
)
|
(454,492
|
)
|
|||||||||||||||||||
Stock-based
compensation
|
|||||||||||||||||||||||||
expense
|
248,131
|
248,131
|
|||||||||||||||||||||||
Net
earnings
|
20,233,277
|
20,233,277
|
20,233,277
|
||||||||||||||||||||||
Comprehensive
income
|
$
|
19,109,632
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||
Balance,
December 31, 2005
|
$
|
201,576,549
|
$
|
167,991,188
|
$
|
4,262,867
|
$
|
270,268
|
$
|
901,327
|
$
|
31,713,608
|
$
|
(3,562,709
|
)
|
||||||||||
BEL
FUSE INC. AND SUBSIDIARIES
|
||||||
Years
Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
Cash
flows from operating
|
||||||||||
activities:
|
||||||||||
Net
income
|
$
|
20,233,277
|
$
|
24,721,589
|
$
|
13,763,694
|
||||
Adjustments
to reconcile net
|
||||||||||
income
to net cash provided
|
||||||||||
by
operating activities:
|
||||||||||
Depreciation
and amortization
|
10,104,373
|
9,025,364
|
8,374,918
|
|||||||
Fixed
asset impairment
|
—
|
1,032,786
|
364,843
|
|||||||
Other
|
1,712,000
|
1,238,000
|
812,000
|
|||||||
Deferred
income taxes
|
(3,602,000
|
)
|
(4,986,000
|
)
|
1,591,000
|
|||||
Changes
in operating assets
|
||||||||||
and
liabilities (net of acquisitions)
|
2,825,445
|
1,077,010
|
3,759,738
|
|||||||
Net
Cash Provided by
|
||||||||||
Operating
Activities
|
31,273,095
|
32,108,749
|
28,666,193
|
|||||||
Cash
flows from investing activities:
|
||||||||||
Purchase
of property, plant
|
||||||||||
and
equipment
|
(7,745,817
|
)
|
(6,578,658
|
)
|
(3,119,321
|
)
|
||||
Purchase
of marketable
|
||||||||||
securities
|
(17,998,601
|
)
|
(17,723,615
|
)
|
(4,953,449
|
)
|
||||
Payment
for acquisitions - net of
|
||||||||||
cash
acquired
|
(20,807,083
|
)
|
(353,464
|
)
|
(36,277,457
|
)
|
||||
Proceeds
from repayment
|
||||||||||
by
contractors
|
—
|
29,000
|
29,000
|
|||||||
Proceeds
from sale of
|
||||||||||
marketable
securities
|
1,621,603
|
6,345,595
|
4,904,875
|
|||||||
Proceeds
from sale of
|
||||||||||
building
|
252,587
|
—
|
—
|
|||||||
Net
Cash Used in
|
||||||||||
Investing
Activities
|
(44,677,311
|
)
|
(18,281,142
|
)
|
(39,416,352
|
)
|
||||
BEL
FUSE INC. AND SUBSIDIARIES
|
||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Continued)
|
Year
Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
Cash
flows from financing
|
||||||||||
activities:
|
||||||||||
Proceeds
from borrowings
|
12,000,000
|
—
|
10,000,000
|
|||||||
Loan
repayments
|
(19,360,694
|
)
|
(2,000,000
|
)
|
(1,500,000
|
)
|
||||
Proceeds
from exercise of
|
||||||||||
stock
options
|
4,115,508
|
3,891,266
|
2,580,224
|
|||||||
Dividends
paid to common
|
||||||||||
shareholders
|
(2,183,371
|
)
|
(2,168,258
|
)
|
(1,871,494
|
)
|
||||
Net
Cash (Used In) Provided By
|
||||||||||
Financing
Activities
|
(5,428,557
|
)
|
(276,992
|
)
|
9,208,730
|
|||||
Effect
of exchange rate changes on cash
|
(367,484
|
)
|
186,124
|
—
|
||||||
Net
Increase (decrease) in
|
||||||||||
Cash
and Cash Equivalents
|
(19,200,257
|
)
|
13,736,739
|
(1,541,429
|
)
|
|||||
Cash
and Cash Equivalents
|
||||||||||
-
beginning of year
|
71,197,891
|
57,461,152
|
59,002,581
|
|||||||
Cash
and Cash Equivalents
|
||||||||||
-
end of year
|
$
|
51,997,634
|
$
|
71,197,891
|
$
|
57,461,152
|
||||
Changes
in operating assets
|
||||||||||
and
liabilities (net of acquisitions) consist of:
|
||||||||||
(Increase)
decrease in accounts
|
||||||||||
receivable
|
$
|
(2,638,200
|
)
|
$
|
(2,671,513
|
)
|
$
|
1,763,149
|
||
(Increase)
decrease in inventories
|
(1,145,242
|
)
|
(2,774,275
|
)
|
2,043,609
|
|||||
(Increase)
decrease in prepaid
|
||||||||||
expenses
and other
|
||||||||||
current
assets
|
809,821
|
(700,243
|
)
|
(1,187,276
|
)
|
|||||
Decrease
in prepaid taxes
|
—
|
—
|
681,887
|
|||||||
(Increase)
decrease in other assets
|
(383,980
|
)
|
(738,878
|
)
|
(425,880
|
)
|
||||
Increase
(decrease) in
|
||||||||||
accounts
payable
|
3,629,923
|
1,299,301
|
(295,887
|
)
|
||||||
Increase
in income taxes payable
|
3,071,828
|
6,946,523
|
792,432
|
|||||||
(Decrease)
increase in
|
||||||||||
accrued
expenses
|
(518,705
|
)
|
(283,905
|
)
|
387,704
|
|||||
$
|
2,825,445
|
$
|
1,077,010
|
$
|
3,759,738
|
|||||
BEL
FUSE INC. AND SUBSIDIARIES
|
||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Concluded)
|
Year
Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
Supplementary
information:
|
||||||||||
Cash
paid during the year for:
|
||||||||||
Income
taxes
|
$
|
6,578,000
|
$
|
2,128,000
|
$
|
1,031,000
|
||||
Interest
|
$
|
325,000
|
$
|
239,000
|
$
|
228,000
|
||||
Details
of acquisitions:
|
||||||||||
Fair
value of assets acquired (excluding
|
||||||||||
cash
of $311,856 in 2005 and $799,000
|
||||||||||
in
2003)
|
$
|
6,167,138
|
$
|
—
|
$
|
35,853,854
|
||||
Intangibles
|
2,657,518
|
353,464
|
6,870,724
|
|||||||
Goodwill
|
12,456,080
|
—
|
—
|
|||||||
21,280,736
|
353,464
|
42,724,578
|
||||||||
Less:
Cash on deposit in 2002
|
—
|
—
|
(6,447,121
|
)
|
||||||
Amounts
due on acquisition payment
|
(473,653
|
)
|
—
|
—
|
||||||
Cash
paid for acquisitions
|
$
|
20,807,083
|
$
|
353,464
|
$
|
36,277,457
|
||||
December
31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
Net
earnings - as reported
|
$
|
20,233,277
|
$
|
24,721,589
|
$
|
13,763,694
|
||||
Add:
Stock-based compensation
|
||||||||||
expense
included in net income,
|
||||||||||
net
of taxes, as reported
|
179,295
|
—
|
—
|
|||||||
Deduct:
Total stock-based
|
||||||||||
employee
compensation expense
|
||||||||||
determined
under fair value based
|
||||||||||
method
for all awards,
|
||||||||||
net
of taxes
|
(643,472
|
)
|
(1,125,427
|
)
|
(2,080,375
|
)
|
||||
Net
earnings- pro forma
|
$
|
19,769,100
|
$
|
23,596,162
|
$
|
11,683,319
|
||||
Earnings
per common share -
|
||||||||||
basic-as
reported
|
$
|
1.76
|
$
|
2.19
|
$
|
1.25
|
||||
Earnings
per common share -
|
||||||||||
basic-pro
forma
|
$
|
1.72
|
$
|
2.09
|
$
|
1.06
|
||||
Earnings
per common share -
|
||||||||||
diluted-as
reported
|
$
|
1.75
|
$
|
2.15
|
$
|
1.24
|
||||
Earnings
per common share -
|
||||||||||
diluted-pro
forma
|
$
|
1.71
|
$
|
2.04
|
$
|
1.05
|
2005
|
2004
|
2003
|
||||||||
Weighted
average shares outstanding - basic
|
11,510,175
|
11,283,750
|
11,020,916
|
|||||||
Dilutive
impact of stock options and
|
||||||||||
unvested
restricted stock awards
|
83,083
|
227,345
|
112,555
|
|||||||
Weighted
average shares oustanding - diluted
|
11,593,258
|
11,511,095
|
11,133,471
|
2.
|
ACQUISITIONS
|
Years
Ended
|
|||||||
December
31,
|
|||||||
2005
|
2004
|
||||||
Net
sales
|
$
|
221,227
|
$
|
212,331
|
|||
Net
earnings
|
20,026
|
25,419
|
|||||
Earnings
per share - diluted
|
1.74
|
2.21
|
Cash
|
$
|
311,856
|
||
Accounts
receivable
|
3,687,331
|
|||
Inventories
|
2,862,571
|
|||
Prepaid
expenses
|
96,120
|
|||
Income
taxes receivable
|
5,488
|
|||
Property,
plant and
|
||||
equipment
|
1,545,526
|
|||
Other
assets
|
32,083
|
|||
Deferred
tax asset
|
1,392,850
|
|||
Goodwill
|
12,456,080
|
|||
Intangible
assets
|
1,960,000
|
|||
Notes
payable
|
(860,694
|
)
|
||
Accounts
payable
|
(2,129,165
|
)
|
||
Accrued
expenses
|
(465,002
|
)
|
||
Net
assets acquired
|
$
|
20,895,044
|
3.
|
GOODWILL
AND OTHER INTANGIBLES
|
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
|
12,546,080
|
—
|
11,543,846
|
1,002,234
|
|||||||||
Balance,
December 31, 2005
|
$
|
22,427,934
|
$
|
6,407,435
|
$
|
14,412,938
|
$
|
1,607,561
|
December
31, 2005
|
|||||||||||||||||||
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
|
$
|
1,812,853
|
$
|
2,653,000
|
$
|
1,634,566
|
$
|
282,000
|
$
|
178,287
|
|||||||
Customer
relationships
|
1,160,000
|
178,833
|
—
|
—
|
1,160,000
|
178,833
|
|||||||||||||
Covenants
not-to-compete
|
5,021,034
|
4,342,160
|
4,221,034
|
3,813,589
|
800,000
|
528,571
|
|||||||||||||
$
|
9,116,034
|
$
|
6,333,846
|
$
|
6,874,034
|
$
|
5,448,155
|
$
|
2,242,000
|
$
|
885,691
|
||||||||
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
|
||||||||
Estimated
|
||||
Year
Ending
|
Amortization
|
|||
December
31,
|
Expense
|
|||
2006
|
$
|
1,282,901
|
||
2007
|
675,277
|
|||
2008
|
400,287
|
|||
2009
|
293,569
|
|||
2010
|
104,196
|
December
31,
|
|||||||
2005
|
2004
|
||||||
Raw
material
|
$
|
19,342,703
|
$
|
15,236,393
|
|||
Work
in progress
|
2,515,174
|
1,607,052
|
|||||
Finished
goods
|
11,089,226
|
12,257,615
|
|||||
$
|
32,947,103
|
$
|
29,101,060
|
December
31,
|
|||||||
2005
|
2004
|
||||||
Land
|
$
|
3,348,788
|
$
|
3,274,641
|
|||
Buildings
and improvements
|
25,168,168
|
23,858,419
|
|||||
Machinery
and equipment
|
73,418,183
|
66,945,194
|
|||||
101,935,139
|
94,078,254
|
||||||
Less
accumulated depreciation
|
59,555,783
|
52,833,495
|
|||||
$
|
42,379,356
|
$
|
41,244,759
|
Years
Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
Current:
|
||||||||||
Federal
|
$
|
4,590,000
|
$
|
3,524,000
|
$
|
1,004,000
|
||||
Foreign
|
6,250,000
|
5,234,000
|
1,624,000
|
|||||||
State
|
244,000
|
(123,000
|
)
|
194,000
|
||||||
11,084,000
|
8,635,000
|
2,822,000
|
||||||||
Deferred:
|
||||||||||
Federal
and state
|
(1,420,000
|
)
|
(1,586,000
|
)
|
1,031,000
|
|||||
Foreign
|
(2,182,000
|
)
|
(3,400,000
|
)
|
560,000
|
|||||
(3,602,000
|
)
|
(4,986,000
|
)
|
1,591,000
|
||||||
$
|
7,482,000
|
$
|
3,649,000
|
$
|
4,413,000
|
Years
Ended December 31,
|
||||||||||
2005
|
2004
|
2003
|
||||||||
Tax
provision
|
||||||||||
computed
at the Federal
|
||||||||||
statutory
rate of 34%
|
$
|
9,423,000
|
$
|
9,646,000
|
$
|
6,180,000
|
||||
Increase
(decrease) in
|
||||||||||
taxes
resulting from:
|
||||||||||
Benefit
relating to tax rate differential on foreign
|
||||||||||
earnings
to be repatriated in 2005-net (1)
|
—
|
(1,017,000
|
)
|
|||||||
Repatriation
of foreign earnings
|
||||||||||
net
of foreign tax credit of $529,000
|
3,100,000
|
|||||||||
Different
tax rates and permanent
|
||||||||||
differences
applicable to
|
||||||||||
foreign
operations
|
(5,250,000
|
)
|
(3,380,000
|
)
|
(2,467,000
|
)
|
||||
Utilization
of foreign net operating loss
|
||||||||||
carryforward
|
—
|
(165,000
|
)
|
|||||||
Principally
the utilization of research and
|
||||||||||
development
tax credits
|
(630,000
|
)
|
(1,413,000
|
)
|
||||||
Reversal
of a pre-acquisition tax benefit
|
399,000
|
|||||||||
Foreign
valuation allowance
|
—
|
—
|
571,000
|
|||||||
State
(benefit) taxes, net of federal benefit
|
161,000
|
(81,000
|
)
|
128,000
|
||||||
Other,
net
|
279,000
|
59,000
|
1,000
|
|||||||
$
|
7,482,000
|
$
|
3,649,000
|
$
|
4,413,000
|
|||||
(1) |
Under
the American Jobs Creation Act of 2004 (the "Act"), the Company has
repatriated earnings from controlled foreign corporations ("CFC's")
in the
amount of $70,560,000 in order to take advantage of the temporary
85
percent dividends received deduction for cash dividends in excess
of the
historical "base-period" average. This results in an effective federal
tax
rate of approximately 5.0%. The election to repatriate these CFC
earnings
expired on December 31, 2005 and the dividend proceeds must meet
a number
of criteria as outlined in the Act to be eligible for the favorable
tax
rate. In prior years, the Company provided deferred taxes of approximately
$7,668,000 on a portion of its CFC earnings which management concluded
would likely be repatriated. As a result of the favorable tax treatment
afforded the repatriation of CFC earnings and management’s decision to
repatriate such funds in 2005, the Company recorded a $6,326,000
tax
benefit in 2004 which results from the difference in tax rates between
the
Act and the tax rates previously provided on the portion of CFC earnings
which were expected to be repatriated leaving deferred income taxes
in the
amount of approximately $1,342,000 recorded pertaining to such earnings
to
be repatriated. In light of the planned repatriation during 2004
of CFC
earnings in 2005, Management had identified certain domestic and
foreign
tax exposures relating to such operations. Such amount has been included
in Income Taxes Payable in the accompanying consolidated balance
sheet.
Prior to the enactment of the Act, it was management’s intention to
permanently reinvest the majority of the earnings of foreign subsidiaries
in the expansion of its foreign operations. No earnings were repatriated
during 2004 and 2003. Unrepatriated earnings, upon which U.S. income
taxes
have not been accrued, approximate $67.2 million at December 31,
2005.
Estimated income taxes related to unrepatriated foreign earnings
are
$20.2_
million under the current tax law as the Act has expired.
|
December
31,
|
|||||||||||||
2005
|
2004
|
||||||||||||
Temporary
|
|
Temporary
|
|
||||||||||
Difference
|
Tax
Effect
|
Difference
|
Tax
Effect
|
||||||||||
Deferred
Tax Assets -
|
|||||||||||||
non-current:
|
|||||||||||||
United
States net operating loss
|
|||||||||||||
carryforward
|
$
|
4,316,000
|
$
|
1,640,000
|
$
|
—
|
$
|
—
|
|||||
Restricted
stock grants
|
5,214,000
|
1,472,000
|
—
|
—
|
|||||||||
Depreciation
|
(2,474,000
|
)
|
(134,000
|
)
|
—
|
—
|
|||||||
Amortization
|
972,000
|
373,000
|
—
|
—
|
|||||||||
Other
accruals
|
1,446,000
|
550,000
|
—
|
—
|
|||||||||
$
|
9,474,000
|
$
|
3,901,000
|
$
|
—
|
$
|
—
|
||||||
Deferred
Tax Liability -
|
|||||||||||||
current:
|
|||||||||||||
Unremitted
earnings of
|
|||||||||||||
foreign
subsidiaries not
|
|||||||||||||
permanently
reinvested
|
$
|
—
|
$
|
—
|
$
|
25,560,000
|
$
|
1,342,000
|
|||||
Unrealized
|
|||||||||||||
appreciation/
depreciation
|
|||||||||||||
in
marketable securities
|
5,661,000
|
2,151,000
|
6,604,000
|
2,642,000
|
|||||||||
Reserves
and accruals
|
(2,352,000
|
)
|
(739,000
|
)
|
(1,655,000
|
)
|
(662,000
|
)
|
|||||
$
|
3,309,000
|
$
|
1,412,000
|
$
|
30,509,000
|
$
|
3,322,000
|
||||||
Deferred
Tax Liabilities-
|
|||||||||||||
non-current:
|
|||||||||||||
Depreciation
|
$
|
—
|
$
|
—
|
$
|
13,371,000
|
$
|
888,000
|
|||||
Amortization
|
—
|
—
|
(2,037,000
|
)
|
(815,000
|
)
|
|||||||
Other
temporary differences
|
—
|
—
|
843,000
|
337,000
|
|||||||||
|
$ |
—
|
$
|
—
|
$
|
12,177,000
|
$
|
410,000
|
|||||
Year
Ended December 31,
|
|||||||
2005
|
2004
|
||||||
Sales
commissions
|
$
|
1,812,135
|
$
|
1,431,169
|
|||
Investment
banking commissions
|
1,105,510
|
1,000,000
|
|||||
Subcontracting
labor
|
1,597,279
|
1,624,963
|
|||||
Salaries,
bonuses and
|
|||||||
related
benefits
|
2,642,729
|
3,480,213
|
|||||
Other
|
3,509,905
|
2,757,231
|
|||||
$
|
10,667,558
|
$
|
10,293,576
|
2005
|
2004
|
2003
|
||||||||
Revenue
from unrelated
|
||||||||||
entities
and country
|
||||||||||
of
Company's domicile:
|
||||||||||
North
America
|
$
|
69,089,000
|
$
|
67,177,000
|
$
|
51,218,000
|
||||
Asia
|
131,104,000
|
109,011,000
|
88,253,000
|
|||||||
Europe
|
15,723,000
|
13,834,000
|
19,027,000
|
|||||||
$
|
215,916,000
|
$
|
190,022,000
|
$
|
158,498,000
|
|||||
Total
Revenues:
|
||||||||||
North
America
|
$
|
80,836,000
|
$
|
76,979,000
|
$
|
63,033,000
|
||||
Asia
|
151,992,000
|
132,224,000
|
114,025,000
|
|||||||
Europe
|
16,967,000
|
15,194,000
|
12,076,000
|
|||||||
Less
intergeographic
|
||||||||||
revenues
|
(33,879,000
|
)
|
(34,375,000
|
)
|
(30,636,000
|
)
|
||||
$
|
215,916,000
|
$
|
190,022,000
|
$
|
158,498,000
|
|||||
Income
from Operations:
|
||||||||||
North
America
|
$
|
4,020,000
|
$
|
8,475,000
|
$
|
3,511,000
|
||||
Asia
|
22,391,000
|
15,805,000
|
13,771,000
|
|||||||
Europe
|
206,000
|
631,000
|
645,000
|
|||||||
$
|
26,617,000
|
$
|
24,911,000
|
$
|
17,927,000
|
|||||
Identifiable
Assets:
|
||||||||||
North
America
|
$
|
150,807,000
|
$
|
92,515,000
|
||||||
Asia
|
95,358,000
|
131,970,000
|
||||||||
Europe
|
7,753,000
|
3,409,000
|
||||||||
Less
intergeographic
|
||||||||||
eliminations
|
(11,862,000
|
)
|
(10,117,000
|
)
|
||||||
$
|
242,056,000
|
$
|
217,777,000
|
|||||||
Capital
Expenditures:
|
||||||||||
North
America
|
$
|
1,328,000
|
$
|
736,000
|
$
|
829,000
|
||||
Asia
|
6,322,000
|
5,557,000
|
1,911,000
|
|||||||
Europe
|
96,000
|
286,000
|
379,000
|
|||||||
$
|
7,746,000
|
$
|
6,579,000
|
$
|
3,119,000
|
|||||
Depreciation
and Amortizaion
|
||||||||||
expense:
|
||||||||||
North
America
|
$
|
2,526,000
|
$
|
1,928,000
|
$
|
1,775,000
|
||||
Asia
|
7,364,000
|
6,966,000
|
6,399,000
|
|||||||
Europe
|
214,000
|
131,000
|
201,000
|
|||||||
$
|
10,104,000
|
$
|
9,025,000
|
$
|
8,375,000
|
December
31,
|
2005
|
2004
|
|||||
Change
in benefit obligation:
|
|||||||
Projected
benefit obligation at beginning of year
|
$
|
2,890,113
|
$
|
2,637,902
|
|||
Service
cost
|
331,942
|
221,981
|
|||||
Interest
cost
|
211,920
|
145,085
|
|||||
Plan
amendments
|
444,684
|
—
|
|||||
Benefits
paid
|
(37,500
|
)
|
—
|
||||
Actuarial
(gains) losses
|
635,137
|
(114,855
|
)
|
||||
Projected
benefit obligation at end of year
|
$
|
4,476,296
|
$
|
2,890,113
|
|||
Funded
status of plan:
|
|||||||
Under
funded status
|
$
|
(4,476,296
|
)
|
$
|
(2,890,113
|
)
|
|
Unrecognized
net loss
|
869,673
|
259,218
|
|||||
Unrecognized
prior service costs
|
1,811,297
|
1,497,253
|
|||||
Accrued
pension cost
|
$
|
(1,795,326
|
)
|
$
|
(1,133,642
|
)
|
|
Change
in plan assets:
|
|||||||
Fair
value of plan assets, beginning of year
|
$
|
—
|
$
|
—
|
|||
Company
contributions
|
37,500
|
—
|
|||||
Benefit
paid
|
(37,500
|
)
|
—
|
||||
Fair
value of plan assets, end of year
|
$
|
—
|
$
|
—
|
|||
Balance
sheet amounts:
|
|||||||
Accrued
benefit liability
|
$
|
3,450,688
|
$
|
2,261,583
|
|||
Intangible
asset
|
1,655,362
|
1,127,941
|
The
components of SERP expense are as follows:
|
||||||||||
December
31,
|
2005
|
2004
|
2003
|
|||||||
Service
cost
|
$
|
331,942
|
$
|
221,981
|
$
|
217,875
|
||||
Interest
cost
|
211,920
|
145,085
|
104,719
|
|||||||
Net
amortization and deferral
|
155,322
|
142,363
|
105,110
|
|||||||
Total
SERP expense
|
$
|
699,184
|
$
|
509,429
|
$
|
427,704
|
||||
Assumption
percentages:
|
||||||||||
Discount
rate
|
5.50
|
%
|
5.50
|
%
|
5.50
|
%
|
||||
Rate
of compensation increase
|
3.00
|
%
|
3.00
|
%
|
4.00
|
%
|
2005
|
2004
|
2003
|
|||||||||||||||||
Weighted-
|
Weighted-
|
Weighted-
|
|||||||||||||||||
Average
|
Average
|
Average
|
|||||||||||||||||
Exercise
|
Exercise
|
Exercise
|
|||||||||||||||||
Shares
|
Price
|
Shares
|
Price
|
Shares
|
Price
|
||||||||||||||
Options
out-
|
|||||||||||||||||||
standing,
begin-
|
|||||||||||||||||||
ning
of year
|
495,289
|
$
|
23.17
|
712,600
|
$
|
21.61
|
759,238
|
$
|
19.23
|
||||||||||
Options
exercised
|
(200,276
|
)
|
$
|
20.50
|
(200,911
|
)
|
$
|
19.37
|
(224,638
|
)
|
$
|
11.48
|
|||||||
Options
granted
|
—
|
$
|
—
|
24,000
|
$
|
37.00
|
200,000
|
$
|
18.89
|
||||||||||
Options
cancelled
|
(9,000
|
)
|
$
|
27.29
|
(40,400
|
)
|
$
|
22.71
|
(22,000
|
)
|
$
|
19.00
|
|||||||
Options
out-
|
|||||||||||||||||||
standing,
end
|
|||||||||||||||||||
of
year
|
286,013
|
$
|
24.96
|
495,289
|
$
|
23.17
|
712,600
|
$
|
21.61
|
||||||||||
Options
price
|
|||||||||||||||||||
range
at end
|
|||||||||||||||||||
of
year
|
$
|
18.89
to $37.00
|
$
|
17.00
to $37.00
|
$
|
15.38
to $29.50
|
|||||||||||||
Options
price
|
|||||||||||||||||||
range
for
|
|||||||||||||||||||
exercised
|
|||||||||||||||||||
shares
|
$
|
17.00
to $29.50
|
$
|
15.38
to $29.50
|
$
|
5.75
to $19.52
|
|||||||||||||
Options
available
|
|||||||||||||||||||
for
grant at end
|
|||||||||||||||||||
of
year
|
810,985
|
954,385
|
937,985
|
||||||||||||||||
Weighted-
|
|||||||||||||||||||
average
fair
|
|||||||||||||||||||
value
of options
|
|||||||||||||||||||
granted
during
|
|||||||||||||||||||
the
year
|
$
|
—
|
$
|
8.66
|
$
|
8.03
|
Weighted-
|
||||||||||||||||
Number
Out-
|
Average
|
Weighted
|
Number
|
Weighted-
|
||||||||||||
Range
of
|
standing
at
|
Remaining
|
Average
|
Exercisable
at
|
Average
|
|||||||||||
Exercise
|
December
31,
|
Contractual
|
Exercise
|
December
31,
|
Exercise
|
|||||||||||
Prices
|
2005
|
Life
|
Price
|
2005
|
Price
|
|||||||||||
$29.50
|
120,817
|
—
|
$
|
29.50
|
60,817
|
$
|
29.50
|
|||||||||
$19.52-$22.25
|
38,200
|
1
Year
|
$
|
21.29
|
22,700
|
$
|
21.29
|
|||||||||
$18.89
|
106,996
|
2
Years
|
$
|
18.89
|
21,996
|
$
|
18.89
|
|||||||||
$37.00
|
20,000
|
3
Years
|
$
|
37.00
|
5,000
|
$
|
37.00
|
|||||||||
286,013
|
110,513
|
Years
Ending
|
||||
December
31,
|
||||
2006
|
$
|
1,473,000
|
||
2007
|
745,000
|
|||
2008
|
357,000
|
|||
2009
|
318,000
|
|||
2010
|
394,000
|
|||
$
|
3,287,000
|
16.
|
SUBSEQUENT
EVENT
|
(Unaudited)
|
||||||||||||||||
Total
Year
|
||||||||||||||||
Quarter
Ended
|
Ended
|
|||||||||||||||
March
31,
|
June
30,
|
September
30,
|
December
31,
|
December
31,
|
||||||||||||
2005
|
2005
|
2005
|
2005
|
2005
|
||||||||||||
Net
sales
|
$
|
45,438,285
|
$
|
57,545,421
|
$
|
56,247,745
|
$
|
56,684,305
|
$
|
215,915,756
|
||||||
Gross
profit
|
12,749,474
|
16,853,324
|
15,827,945
|
14,338,289
|
59,769,032
|
|||||||||||
Net
earnings
|
4,313,365
|
6,668,675
|
5,986,397
|
3,264,840
|
20,233,277
|
|||||||||||
Earnings
|
||||||||||||||||
per
share
|
||||||||||||||||
-
basic (1)
|
$
|
0.38
|
$
|
0.58
|
$
|
0.52
|
$
|
0.28
|
$
|
1.76
|
||||||
Earnings
|
||||||||||||||||
per
share -
|
||||||||||||||||
diluted
(1)
|
$
|
0.38
|
$
|
0.58
|
$
|
0.52
|
$
|
0.28
|
$
|
1.75
|
||||||
Total
Year
|
||||||||||||||||
Quarter
Ended
|
Ended
|
|||||||||||||||
March
31,
|
June
30,
|
September
30,
|
December
31,
|
December
31,
|
||||||||||||
2004
|
2004
|
2004
|
2004
|
2004
|
||||||||||||
Net
sales
|
$
|
42,357,023
|
$
|
48,390,242
|
$
|
49,985,626
|
$
|
49,289,062
|
$
|
190,021,953
|
||||||
Gross
profit
|
12,566,009
|
15,194,241
|
14,977,954
|
14,507,445
|
57,245,649
|
|||||||||||
Net
earnings
|
4,654,731
|
7,145,253
|
6,894,347
|
6,027,258
|
24,721,589
|
|||||||||||
Earnings
|
||||||||||||||||
per
share
|
||||||||||||||||
-
basic (1)
|
$
|
0.42
|
$
|
0.64
|
$
|
0.61
|
$
|
0.52
|
$
|
2.19
|
||||||
Earnings
|
||||||||||||||||
per
share -
|
||||||||||||||||
diluted
(1)
|
$
|
0.41
|
$
|
0.63
|
$
|
0.60
|
$
|
0.51
|
$
|
2.15
|
||||||
(1)
|
Quarterly
amounts of earnings per share may not agree to the total for the
year due
to rounding.
|
BEL
FUSE INC. AND SUBSIDIARIES
|
||||||||||||
SCHEDULE
II - VALUATION AND QUALIFYING
ACCOUNTS
|
Column
A
|
Column
B
|
Column
C
|
Column
D
|
Column
E
|
Column
F
|
||||||||||||||
Charged
|
Additions
|
||||||||||||||||||
Balance
at
|
to
profit
|
Charged
|
Balance
|
||||||||||||||||
beginning
|
and
loss
|
to
other
|
Deductions
|
at
close
|
|||||||||||||||
Description
|
of
period
|
or
income
|
accounts
|
(describe)(a)
|
of
period
|
||||||||||||||
|
|||||||||||||||||||
Year
ended December 31, 2005
|
|||||||||||||||||||
Allowance
for doubtful
|
|||||||||||||||||||
accounts
|
$
|
1,610,000
|
$
|
275,000
|
$
|
25,000
|
(a
|
)
|
$
|
803,000
|
$
|
1,107,000
|
|||||||
Allowance
for excess and
|
|||||||||||||||||||
obsolete
inventory
|
$
|
5,471,000
|
$
|
867,000
|
$
|
475,000
|
(c
|
)
|
$
|
1,796,000
|
$
|
5,017,000
|
|||||||
Year
ended December 31, 2004
|
|||||||||||||||||||
Allowance
for doubtful
|
|||||||||||||||||||
accounts
|
$
|
1,976,000
|
$
|
233,000
|
$
|
65,000
|
(a
|
)
|
$
|
664,000
|
$
|
1,610,000
|
|||||||
Allowance
for excess and
|
|||||||||||||||||||
obsolete
inventory
|
$
|
5,679,000
|
$
|
1,250,000
|
$
|
43,000
|
(c
|
)
|
$
|
1,501,000
|
$
|
5,471,000
|
|||||||
Year
ended December 31, 2003
|
|||||||||||||||||||
Allowance
for doubtful
|
|||||||||||||||||||
accounts
|
$
|
945,000
|
$
|
(77,000
|
)
|
$
|
2,308,000
|
(b
|
)
|
$
|
1,200,000
|
$
|
1,976,000
|
||||||
Allowance
for excess and
|
|||||||||||||||||||
obsolete
inventory
|
$
|
3,136,000
|
$
|
863,000
|
$
|
3,320,000
|
(b
|
)
|
$
|
1,640,000
|
$
|
5,679,000
|
|||||||
(a) |
Write
offs.
|
(b)
|
For
the year ended 2003, these amounts represent the reserves established
at
date of acquisition of the Passive Components
Group of Insilco Technologies,
Inc.
|
(c) |
For
the year ended 2004 these amounts represent foreign exchange rate
changes.
|
Item 9A. |
Item 9b. |
Item 11. |
Item 12. |
|
Page
|
|
(a)
|
Financial
Statements
|
|
1.
|
Financial
statements filed as a part of this Annual Report on Form
10-K:
|
|
Report
of Independent Registered Public Accounting Firm
|
F-1
|
|
Consolidated
Balance Sheets as of December 31, 2005 and 2004
|
F-2
- F-3
|
|
Consolidated
Statements of Operations for Each of the Three Years in the Period
Ended
December 31, 2005
|
F-4
|
|
Consolidated
Statements of Stockholders' Equity for Each of the Three Years
in the
Period Ended December 31, 2005
|
F-5
- F-6
|
|
Consolidated
Statements of Cash Flows for Each of the Three Years in the Period
Ended
December 31, 2005
|
F-7
- F-9
|
|
Notes
to Consolidated Financial Statements
|
F-
10 - F-39
|
|
Selected
Quarterly Financial Data - Years Ended December 31, 2005 and 2004
(Unaudited)
|
F-40
|
|
2.
|
Financial
statement schedules filed as part of this report:
|
|
Schedule
II: Valuation and Qualifying Accounts
|
S-1
|
|
All
other schedules are omitted because they are inapplicable, not
required or
the information is included in the consolidated financial statements
or
notes thereto.
|
(c) |
Exhibits
|
3.1
|
Certificate
of Incorporation, as amended, is incorporated by reference to Exhibit
3.1
of the Company’s Annual Report on Form 10-K for the year ended December
31, 1999.
|
3.2
|
By-laws,
as amended, are incorporated by reference to Exhibit 4.2 of the Company's
Registration Statement on Form S-2 (Registration No. 33-16703) filed
with
the Securities and Exchange Commission on August 25,
1987.
|
10.1
|
Agency
agreement dated October 1, 1988 between Bel Fuse Ltd. and Rush Profit
Ltd.
Incorporated by reference to Exhibit 10.1 of the Company's annual
report
on Form 10-K for the year ended December 31,
1994.
|
10.2
|
Contract
dated March 16, 1990 between Accessorios Electronicos (Bel Fuse Macau
Ltd.) and the Government of Macao. Incorporated by reference to Exhibit
10.2 of the Company's annual report on Form 10-K for the year ended
December 31, 1994.
|
10.3
|
Loan
agreement dated February 14, 1990 between Bel Fuse, Ltd. (as lender)
and
Luen Fat Lee Electronic Factory (as borrower). Incorporated by reference
to Exhibit 10.3 of the Company's Annual Report on Form 10-K for the
year
ended December 31, 1995.
|
10.4
|
Stock
Option Plan. Incorporated by reference to Exhibit 28.1 of the Company's
Registration Statement on Form S-8 (Registration No.333-89376) filed
with
the Securities and Exchange Commission on May 29,
2002.
|
10.5
|
Amended
and Restated Credit and Guarantee Agreement, dated as of March 21,
2003,
by and among Bel Fuse Inc., as Borrower, the Subsidiary Guarantors
party
thereto and The Bank of New York, as Lender. Incorporated by reference
to
Exhibit 10.7 of the Company’s Form 10-K for the year ended December 31,
2002.
|
10.6 |
Amendment
No. 1 dated as of July 26, 2005, to the Registrant's Amended and
Restated
Credit and Guarantee Agreement dated as of March 21, 2003. Incorporated
by
Reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K
dated August 1, 2005.
|
Item 15. |
Exhibits,
Financial Statement Schedules and Reports on Form
8-K
(continued)
|
10.7
|
Agreement
and Plan of Merger dated as of March 4, 2005 by and among Bel Fuse,
Inc.,
Bel Westboro, Inc. and Galaxy Power, Inc. Incorporated by reference
to
exhibit 2.1 of the Company's Form 8-K dated March 7,
2005.
|
10.8
|
Contract
for Purchase and Sale of Real Estate dated July 15, 2004 between
Bel Fuse
Inc. and Fields Development Group Co .Incorporated by reference to
Exhibit
10.9 of the Company’s Form 10-K for the year ended December 31,
2004.
|
11.1
|
A
statement regarding the computation of earnings per share is omitted
because such computation can be clearly determined from the material
contained in this Annual Report on Form
10-K.
|
Subsidiaries
of the Registrant.
|
Consent
of Independent Registered Public Accounting
Firm.
|
24.1 |
Power
of attorney (included on the signature
page)
|
Certification
of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
Certification
of the Vice President of Finance pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
Certification
of the Chief Executive Officer pursuant to Section 906 of the Sarbanes
-
Oxley Act of 2002.
|
32.2 |
Certification
of the Vice-President of Finance pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
BEL FUSE, INC. | ||
|
|
|
Dated: March 15, 2006 | By: | /s/ DANIEL BERNSTEIN |
|
||
Name:
Daniel Bernstein
Title:
President, Chief Executive Officer and
Director
|
Signature
|
Title
|
Date
|
||
/S/
Daniel Bernstein
|
President,
Chief Executive Officer and Director
|
March
15, 2006
|
||
Daniel
Bernstein
|
|
|||
/s/
Howard Bernstein
|
Director
|
March
15, 2006
|
||
Howard
B. Bernstein
|
||||
/s/
Robert H. Simandl
|
Director
|
March
15, 2006
|
||
Robert
H. Simandl
|
||||
/s/
Peter Gilbert
|
Director
|
March
15, 2006
|
||
Peter
Gilbert
|
||||
/s/
John Tweedy
|
Director
|
March
15, 2006
|
||
John
Tweedy
|
||||
/s/
John Johnson
|
Director
|
March
15, 2006
|
||
John
Johnson
|
/s/
Avi Eden
|
Director
|
March
15, 2006
|
||
Avi
Eden
|
||||
/s/
Colin Dunn
|
Vice-President
- Finance and Secretary
|
|||
Colin
Dunn
|
|
March
15, 2006
|
EXHIBIT
22.1
|
Subsidiaries
of the Registrant
|
||
Jurisdiction
of
|
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Name
|
Incorporation
|
|
Bel
Components Ltd.
|
Hong
Kong
|
|
Bel
Connector Inc.
|
Delaware
|
|
Bel
Fuse Delaware Inc.
|
Delaware
|
|
Bel
Fuse Europe Ltd.
|
United
Kingdom
|
|
Bel
Fuse Limited
|
Hong
Kong
|
|
Bel
Fuse Macau LDA
|
Macao
|
|
Bel
Fuse (Macao Commerical
|
||
Offshore)
Limited
|
Macao
|
|
Bel
Power (Hangzhou) Co. Ltd.
|
China
|
|
Bel
Power Products Inc.
|
Delaware
|
|
Bel
Stewart Gmbh
|
Germany
|
|
Bel
Stewart Limited
|
Hong
Kong
|
|
Bel
Transformer Inc.
|
Delaware
|
|
Bel
Ventures Inc.
|
Delaware
|
|
Bel
Power Inc.
|
Massachusetts
|
|
Netwatch
s.r.o.
|
Czech
Republic
|
|
Signal
Dominicana, S.A.
|
Dominican
Republic
|
|
Stewart
Connector Systems de
|
||
Mexico,
S.A. de C.V.
|
Mexico
|
|
Top
East Corporation Limited
|
Hong
Kong
|
(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 (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting; and
|
(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.
|
(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 (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting; and
|
(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.
|