UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
October 30, 2013
BEL FUSE INC.
(Exact Name of Registrant as Specified in its Charter)
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New Jersey
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0-11676
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22-1463699
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(State or Other Jurisdiction of Incorporation)
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(Commission
File Number)
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(IRS Employer Identification No.)
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206 Van Vorst Street, Jersey City, New Jersey
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07302
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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number, including area code: (201) 432-0463
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On October 30, 2013, Bel Fuse Inc. (the “Company”) issued a press release regarding the results for the three and nine months ended September 30, 2013. A copy of this press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.
In accordance with General Instruction B.6 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
As described in Item 2.02 of this Report, the following Exhibit is furnished as part of this Current Report on Form 8-K:
99.1 Press Release of Bel Fuse Inc. dated October 30, 2013.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: October 30, 2013
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BEL FUSE INC.
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(Registrant)
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By:
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/s/ Daniel Bernstein
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Daniel Bernstein
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President and Chief Executive Officer
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EXHIBIT INDEX
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Description
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| 99.1 | Press release of Bel Fuse Inc. dated October 30, 2013. |
Exhibit 99.1
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FOR IMMEDIATE RELEASE
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Bel Fuse Inc.
206 Van Vorst Street
Jersey City, NJ 07302
www.belfuse.com
tel 201.432.0463
fax 201.432.9542
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Investor Contact:
Neil Berkman Associates
(310) 477-3118
info@berkmanassociates.com
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Company Contact:
Daniel Bernstein
President & CEO
(201) 432-0463
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Bel Reports Third Quarter Net Earnings of
$0.65 Per Class A Share and $0.69 Per Class B Share
on a 33.0% Increase in Revenue to a Record $101.2 Million
JERSEY CITY, New Jersey, October 30, 2013 -- Bel Fuse Inc. (NASDAQ:BELFA and NASDAQ:BELFB) today announced preliminary unaudited financial results for the third quarter and first nine months of 2013.
Third Quarter 2013 Highlights
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Net sales increased 33.0% to a record $101.2 million versus $76.1 million last year.
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TRP Connector ("TRP") contributed third quarter sales of $25.6 million.
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Net earnings were $0.65 per Class A share and $0.69 per Class B share versus $0.20 per Class A share and $0.21 per Class B share last year.
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Income from operations increased to $8.3 million versus $880,000 last year.
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CEO Comments
Daniel Bernstein, Bel's President and CEO, said, "The positive impact of our business plan is now becoming evident in Bel's financial performance. Third quarter sales increased to a new record, driven primarily by sales at TRP. Operating income increased to $8.3 million from $880,000 for last year's third quarter, and net income increased to $7.8 million compared to $2.5 million.
"These improvements in Bel's operating performance confirm the success of our strategy. While remaining intensely focused on reducing overhead expenses, we have added significantly to sales and profits through acquisitions this past year. Bel continues to seek acquisition opportunities that can contribute to sales growth and enhance profitability.
"We have completed our transition services agreement with TE Connectivity, so there will be no further costs associated with that agreement going forward. Bel is now implementing best practices between TRP and our manufacturing, an ongoing effort that we believe will contribute to further operating efficiencies and cost savings.
"The relocation of Cinch Connectors into our new Texas facility, which was essentially completed during the second quarter, is having the positive results we anticipated. On August 20, 2013, we completed the acquisition of privately-held Array Connector Corporation, a manufacturer of aerospace and mil-spec connector products which had revenue of approximately $10 million for the year ended December 31, 2012. While we expect this acquisition to be neutral to Bel's earnings for the balance of this year, and accretive beginning in 2014, we already have found ways to use certain Array components in our Cinch products. In addition, we have integrated the Cinch and Array sales forces to improve coverage in North America. We also are pleased by the continued strong performance of Fibreco, which we acquired last year to support the growth of our connector division.
(more)
Bel Reports Third Quarter Net Earnings of $0.65 Per Class A Share and $0.69 Per Class B Share
October 30, 2013
Page Two
"Also encouraging is that previously contracted price increases on Bel's standard product lines are now taking effect, with all of these adjustments scheduled to be in place by the fourth quarter. This is especially important in view of the rise in labor costs in China and continued strengthening of the Chinese Yuan."
Third Quarter Results
For the three months ended September 30, 2013, net sales increased to $101,164,000 compared to $76,059,000 for the third quarter of 2012, as the addition of recently acquired businesses and higher sales of magnetics products more than offset a $473,000 decrease in modular product sales. Cost of sales decreased to 79.8% of sales for the third quarter of 2013, compared to 83.5% of sales for the third quarter of 2012.
Operating income for the third quarter of 2013 increased to $8,328,000, compared to operating income for the third quarter of 2012 of $880,000. Excluding amounts detailed in the table reconciling GAAP to non-GAAP financial measures included in this release, non-GAAP operating income for the third quarter of 2013 was $7,834,000, compared to non-GAAP operating income of $3,737,000 for the third quarter of 2012.
Net earnings for the third quarter of 2013 were $7,836,000, compared to net earnings for the third quarter of 2012 of $2,491,000. Excluding amounts detailed in the table reconciling GAAP to non-GAAP financial measures mentioned above, non-GAAP net earnings for the third quarter of 2013 were $6,976,000, compared to non-GAAP net earnings of $3,182,000 for the third quarter of 2012.
Net earnings per diluted Class A common share for the third quarter of 2013 were $0.65, compared to net earnings per diluted Class A common share of $0.20 for the third quarter of 2012. Adjusted to exclude the amounts referenced above, non-GAAP net earnings per diluted Class A common share were $0.58 for the third quarter of 2013, compared to non-GAAP net earnings per diluted Class A common share of $0.25 for the third quarter of 2012.
Net earnings per diluted Class B common share were $0.69 for the third quarter of 2013, compared to net earnings per diluted Class B common share of $0.21 for the third quarter of 2012. Adjusted to exclude the amounts referenced above, non-GAAP net earnings per diluted Class B common share were $0.62 for the third quarter of 2013, compared to non-GAAP net earnings per diluted Class B common share of $0.27 for the third quarter of 2012.
Nine Months Results
For the nine months ended September 30, 2013, net sales increased to $258,173,000, compared to $214,842,000 for the first nine months of 2012. Net earnings for this year's first nine months were $9,689,000, compared to net earnings of $4,804,000 for the first nine months of 2012.
Net earnings per diluted Class A common share for the first nine months of 2013 were $0.80, compared to $0.37 for the same period of 2012. Adjusted to exclude various amounts detailed in the reconciliation table included in this release, non-GAAP net earnings per diluted Class A common share were $0.84 for the first nine months of 2013, compared to $0.48 a year earlier.
Net earnings per diluted Class B common share for the first nine months of 2013 were $0.86, compared to $0.41 for the same period of 2012. Adjusted to exclude the amounts referenced above, non-GAAP net earnings per diluted Class B common share were $0.90 for the first nine months of 2013, compared to $0.53 a year earlier.
(more)
Bel Reports Third Quarter Net Earnings of $0.65 Per Class A Share and $0.69 Per Class B Share
October 30, 2013
Page Three
Balance Sheet Data
As of September 30, 2013, Bel had working capital of $129,817,000, including cash, cash equivalents and marketable securities of $46,923,000, a current ratio of 2.6-to-1, total long-term obligations of $13,445,000, and stockholders' equity of $221,341,000. In comparison, at December 31, 2012, Bel reported working capital of $144,530,000, including cash, cash equivalents and marketable securities of $71,264,000, a current ratio of 4.1-to-1, total long-term obligations of $13,833,000, and stockholders' equity of $215,362,000. The payment of cash to TE Connectivity for the acquisition of TRP contributed to the decrease in cash, cash equivalents and marketable securities during the first nine months of 2013.
Conference Call
Bel has scheduled a conference call at 11:00 a.m. EDT today. To participate dial (720) 545-0088, conference ID #76509191. A simultaneous webcast is available from the Investors link under the "About Bel" tab at www.BelFuse.com. The webcast replay will be available for 20 days at this same Internet address. For a telephone replay, dial (404) 537-3406, conference ID #76509191, after 2:00 p.m. EDT.
About Bel
Bel (www.belfuse.com) and its divisions are primarily engaged in the design, manufacture, and sale of products used in networking, telecommunications, high-speed data transmission, commercial aerospace, military, transportation, and consumer electronics. Products include magnetics (discrete components, power transformers and MagJack® connectors with integrated magnetics), modules (DC-DC converters and AC-DC power supplies, integrated analog front-end modules and custom designs), circuit protection (miniature, micro and surface mount fuses) and interconnect devices (micro, circular and filtered D-Sub connectors, fiber optic connectors, passive jacks, plugs and high-speed cable assemblies). The Company operates facilities around the world.
Forward-Looking Statements
Except for historical information contained in this press release, the matters discussed in this press release (including the statements regarding further operating efficiencies and cost savings to be derived from the TRP acquisition, the accretive nature of the Array Connector Corporation acquisition and the timing of when that acquisition will become accretive to earnings, and the implementation of price increases, are forward-looking statements that involve risks and uncertainties. Actual results could differ materially from Bel's projections. Among the factors that could cause actual results to differ materially from such statements are: the market concerns facing our customers; the continuing viability of sectors that rely on our products; the effects of business and economic conditions; difficulties associated with integrating recently acquired companies; capacity and supply constraints or difficulties; product development, commercialization or technological difficulties; the regulatory and trade environment; risks associated with foreign currencies; uncertainties associated with legal proceedings; the market's acceptance of the Company's new products and competitive responses to those new products; and the risk factors detailed from time to time in the Company's SEC reports. In light of the risks and uncertainties, there can be no assurance that any forward-looking statement will in fact prove to be correct. We undertake no obligation to update or revise any forward looking statements.
(tables attached)
#490x
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BEL FUSE INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(000s omitted, except for per share data)
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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2013
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2012 | * | 2013 | 2012 | * | |||||||||||
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(unaudited)
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(unaudited)
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Net sales
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$ | 101,164 | $ | 76,059 | $ | 258,173 | $ | 214,842 | ||||||||
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Costs and expenses:
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Cost of sales
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80,730 | 63,472 | 212,699 | 179,690 | ||||||||||||
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Selling, general and administrative
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12,106 | 9,929 | 34,657 | 28,350 | ||||||||||||
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Restructuring charges
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-- | 1,778 | 1,387 | 2,160 | ||||||||||||
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Total costs and expenses
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92,836 | 75,179 | 248,743 | 210,200 | ||||||||||||
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Income from operations
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8,328 | 880 | 9,430 | 4,642 | ||||||||||||
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Interest expense
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(67 | ) | -- | (75 | ) | -- | ||||||||||
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Impairment of investment
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-- | (297 | ) | -- | (775 | ) | ||||||||||
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Gain on sale of investment
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98 | -- | 98 | -- | ||||||||||||
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Interest income and other, net
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82 | 63 | 189 | 216 | ||||||||||||
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Earnings before provision (benefit) for income taxes
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8,441 | 646 | 9,642 | 4,083 | ||||||||||||
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Provision (benefit) for income taxes
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605 | (1,845 | ) | (47 | ) | (721 | ) | |||||||||
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Net earnings
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$ | 7,836 | $ | 2,491 | $ | 9,689 | $ | 4,804 | ||||||||
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Earnings per Class A common share - basic and diluted
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$ | 0.65 | $ | 0.20 | $ | 0.80 | $ | 0.37 | ||||||||
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Weighted average Class A common shares outstanding
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- basic and diluted
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2,175 | 2,175 | 2,175 | 2,175 | ||||||||||||
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Earnings per Class B common share - basic and diluted
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$ | 0.69 | $ | 0.21 | $ | 0.86 | $ | 0.41 | ||||||||
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Weighted average Class B common shares outstanding
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- basic and diluted
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9,229 | 9,697 | 9,221 | 9,669 | ||||||||||||
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* Prior period amounts have been restated to reflect immaterial adjustments previously reported during the measurement
period related to the 2012 acquisitions as if all such adjustments had been recognized on the dates of acquisition.
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CONDENSED CONSOLIDATED BALANCE SHEETS
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(000s omitted)
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Sep. 30,
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Dec. 31,
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Sep. 30,
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Dec. 31,
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ASSETS
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2013
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2012
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LIABILITIES & EQUITY
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2013
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2012
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(unaudited)
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(audited)
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(unaudited)
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(audited)
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Current assets
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$ | 213,537 | $ | 190,918 |
Short-term borrowing
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$ | 12,532 | $ | 205 | ||||||||
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Property, plant &
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equipment, net
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40,338 | 35,002 |
Other current liabilities
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71,188 | 46,183 | ||||||||||||
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Goodwill and intangibles
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50,031 | 35,750 |
Noncurrent liabilities
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13,445 | 13,833 | ||||||||||||
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Other assets
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14,600 | 13,913 |
Stockholders' equity
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221,341 | 215,362 | ||||||||||||
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Total Assets
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$ | 318,506 | $ | 275,583 |
Total Liabilities & Equity
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$ | 318,506 | $ | 275,583 | ||||||||
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BEL FUSE INC. AND SUBSIDIARIES
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NON-GAAP MEASURES (unaudited)
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(000s omitted, except for per share data)
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Three Months Ended September 30, 2013
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Nine Months Ended September 30, 2013
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Income
from
operations
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Net
earnings(2)
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Net earnings per
Class A common
share - diluted(3)
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Net earnings per
Class B common
share - diluted(3)
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Income
from
operations
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Net
earnings(2)
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Net earnings per
Class A common
share - diluted(3)
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Net earnings per
Class B common
share - diluted(3)
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GAAP measures
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$ | 8,328 | $ | 7,836 | $ | 0.65 | $ | 0.69 | $ | 9,430 | $ | 9,689 | $ | 0.80 | $ | 0.86 | ||||||||||||||||
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Restructuring charges, severance
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and reorganization costs
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50 | 38 | -- | -- | 1,686 | 1,167 | 0.10 | 0.10 | ||||||||||||||||||||||||
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Storm insurance recovery, net of costs
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(689 | ) | (427 | ) | (0.04 | ) | (0.04 | ) | (689 | ) | (427 | ) | (0.04 | ) | (0.04 | ) | ||||||||||||||||
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Acquisitions and other related costs
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145 | 119 | 0.01 | 0.01 | 719 | 629 | 0.05 | 0.06 | ||||||||||||||||||||||||
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Gain on sale of investment
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securities, net of income tax
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-- | (61 | ) | (0.01 | ) | (0.01 | ) | -- | (61 | ) | (0.01 | ) | (0.01 | ) | ||||||||||||||||||
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Restoration of expired prior year R&D credit
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-- | -- | -- | -- | -- | (385 | ) | (0.03 | ) | (0.03 | ) | |||||||||||||||||||||
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Expiration of tax statutes of limitations, net
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-- | (529 | ) | (0.04 | ) | (0.05 | ) | -- | (529 | ) | (0.04 | ) | (0.05 | ) | ||||||||||||||||||
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Non-GAAP measures(1)
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$ | 7,834 | $ | 6,976 | $ | 0.58 | $ | 0.62 | $ | 11,146 | $ | 10,083 | $ | 0.84 | $ | 0.90 | ||||||||||||||||
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Three Months Ended September 30, 2012
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Nine Months Ended September 30, 2012
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Income
from
operations
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Net
earnings(2)
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Net earnings per
Class A common
share - diluted(3)
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Net earnings per
Class B common
share - diluted(3)
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Income
from
operations
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Net
earnings(2)
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Net earnings per
Class A common
share - diluted(3)
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Net earnings per
Class B common
share - diluted(3)
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GAAP measures
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$ | 880 | $ | 2,491 | $ | 0.20 | $ | 0.21 | $ | 4,642 | $ | 4,804 | $ | 0.37 | $ | 0.41 | ||||||||||||||||
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Restructuring charges,
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severance and reorganization costs
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2,200 | 1,568 | 0.13 | 0.13 | 2,694 | 1,896 | 0.15 | 0.16 | ||||||||||||||||||||||||
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Acquisition and other related costs
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657 | 407 | 0.03 | 0.03 | 758 | 470 | 0.04 | 0.04 | ||||||||||||||||||||||||
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Impairment of Pulse shares, net of income tax
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-- | 185 | 0.01 | 0.02 | -- | 481 | 0.04 | 0.04 | ||||||||||||||||||||||||
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Expiration of tax statutes of limitations, net
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-- | (1,469 | ) | (0.12 | ) | (0.12 | ) | -- | (1,469 | ) | (0.12 | ) | (0.13 | ) | ||||||||||||||||||
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Non-GAAP measures(1)
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$ | 3,737 | $ | 3,182 | $ | 0.25 | $ | 0.27 | $ | 8,094 | $ | 6,182 | $ | 0.48 | $ | 0.53 | ||||||||||||||||
(1) The non-GAAP measures presented above are not measures of performance under accounting principles generally accepted in the United States of America ("GAAP"). These measures should not be considered a substitute for, and the reader should also consider, income from operations, net earnings, earnings per share and other measures of performance as defined by GAAP as indicators of our performance or profitability. Our non-GAAP measures may not be comparable to other similarly-titled captions of other companies due to differences in the method of calculation.
Based upon discussions with investors and analysts, we believe that the reader's understanding of Bel's performance and profitability is enhanced by reference to these non-GAAP measures. Removal of amounts such as charges for restructuring, severance, and reorganization; costs and insurance recoveries related to Hurricane Sandy; acquisition-related costs; gains and losses related to investment securities; and fluctuations in tax-related reserves such as the liability for uncertain tax positions facilitates comparison of our results among reporting periods. We believe that such amounts are not reflective of the relevant business in the period in which the gain or charge is recorded for accounting purposes.
(2) Net of income tax at effective rate in the applicable tax jurisdiction.
(3) Individual amounts of earnings per share may not agree to the total due to rounding.