Bel Fuse Inc. (NASDAQ:BELFA) (NASDAQ:BELFB) today announced
preliminary unaudited financial results for the fourth quarter and 2012.
Daniel Bernstein, Bel's President and CEO, said, "In 2012, we made
substantial progress implementing our strategy to improve Bel's short
and long-term growth in revenue and profitability.
"Our first step was to immediately improve Bel's competitiveness and
profitability in our existing products. The restructuring program we
completed in 2012 was designed to reduce operating expenses by about
$5.6 million annually, beginning in 2013. Our GAAP net loss for the
fourth quarter of 2012 primarily reflects the costs of this
restructuring. On a non-GAAP basis, excluding costs detailed in the
table reconciling GAAP to non-GAAP financial measures included in this
release, net earnings for the fourth quarter of 2012 more than doubled
versus the same quarter last year.
"We also agreed to acquire, for approximately $22.4 million in cash, the
Transpower magnetics business of TE Connectivity, which had 2012 sales
of approximately $75 million and is expected to be accretive to Bel's
earnings following the anticipated closing of the transaction by the end
of the first quarter of 2013. Included in this acquisition are ICM
products, including RJ45, 10/100 Gigabit, 10G, PoE/PoE+, MRJ21, RJ.5, a
line of modules for smart-grid applications and discrete magnetics. We
expect this expanded product line will double our sales of ICMs and
related components, enabling us to further improve Bel's cost structure
and enhance our competitive position in the market for ICM-related
components. At closing, Bel will also receive a license to produce ICM
products using TE's planar embedded magnetics technology.
"Our next step was to add product lines which have the potential for
significant growth over the next two to three years. A key component of
this plan was our recent acquisition of Milan-based Powerbox, which is
intended to add established AC-DC products to our existing power
portfolio. In addition to established products, the Powerbox acquisition
provides Bel with valuable design and manufacturing capabilities which
will supplement our skill sets in Europe, China and the United States.
We believe that over the next few years, the AC-DC power transformer
business can grow, through our current customer base, to over $30
million of annual revenue.
"The third stage of our growth plan includes development of fiber optic
products which we believe will become an industry standard for aerospace
military markets over a three to five-year horizon. Two small but
important acquisitions completed in 2012 set the foundation for this
initiative, and also contributed to sales growth in the fourth quarter
of 2012. U.K.-based Fibreco and Gigacom Interconnect AB have now been
integrated into Bel's Cinch Connectors business. We believe the
combination of Fibreco's broad range of expanded beam fiber-based
connectors and Gigacom's expanded beam EBOSATM products will
enable Cinch to be a leader in fiber connector technology. Because of
the quality, reliability and weight benefits of fiber products in
comparison to copper components currently being used in the aerospace
and military markets, we see significant growth opportunities in this
area. The mil/aerospace market can represent as much as a third of Bel's
total sales within five years.
"Taken together, these actions have set a clear strategy for the Company
over the next five years."
Fourth Quarter Results
For the three months ended December 31, 2012, net sales increased to
$71,752,000 compared to $68,642,000 for the fourth quarter of 2011,
reflecting the contributions of the acquired businesses as well as
higher sales of magnetics and circuit products, partially offset by
lower modular product sales. Cost of sales decreased to 84.3% of sales
for the fourth quarter of 2012, compared to 85.1% of sales for the
fourth quarter of 2011.
The operating loss for the fourth quarter of 2012 was $3,117,000,
compared to operating income for the fourth quarter of 2011 of
$1,084,000. Excluding costs detailed in the table reconciling GAAP to
non-GAAP financial measures included in this release, non-GAAP operating
income was $928,000 for the fourth quarter of 2012, compared to
$1,301,000 for the fourth quarter of 2011.
The net loss for the fourth quarter of 2012 included an income tax
benefit of $688,000, the result of pre-tax losses during the quarter.
For the fourth quarter of 2011, income tax expense was $1,078,000.
The net loss for the fourth quarter of 2012 was $2,537,000, compared to
net earnings for the fourth quarter of 2011 of $82,000.
Excluding the charges detailed in the table reconciling GAAP to non-GAAP
financial measures mentioned above, non-GAAP net earnings for the fourth
quarter of 2012 were $979,000. This compares to non-GAAP net earnings
for the fourth quarter of 2011, excluding charges detailed in the
reconciliation table, of $395,000.
The net loss per Class A common share for the fourth quarter of 2012 was
$0.21, compared to net earnings per diluted Class A common share of
$0.00 for the fourth quarter of 2011. Adjusted to exclude the amounts
referenced above, non-GAAP net earnings per diluted Class A common share
were $0.08 for the fourth quarter of 2012, compared to $0.10 for the
fourth quarter of 2011.
The net loss per Class B common share was $0.22 for the fourth quarter
of 2012, compared to net earnings per diluted Class B common share of
$0.01 for the fourth quarter of 2011. Adjusted to exclude the amounts
referenced above, non-GAAP net earnings per diluted Class B common share
were $0.09 for the fourth quarter of 2012, compared to $0.11 for the
fourth quarter of 2011.
Balance Sheet Data
As of December 31, 2012, Bel reported working capital of $144,748,000,
including cash, cash equivalents and marketable securities of
$71,264,000, a current ratio of 4.1-to-1, total long-term obligations of
$13,439,000, and stockholders' equity of $215,391,000. In comparison, at
December 31, 2011, Bel reported working capital of $165,264,000,
including cash, cash equivalents, and marketable securities of
$93,972,000, a current ratio of 4.9-to-1, total long-term obligations of
$13,406,000, and stockholders' equity of $221,080,000.
Twelve Month Results
For the twelve months ended December 31, 2012, net sales decreased to
$286,594,000 compared to $295,121,000 for 2011. Net earnings for 2012
were $2,402,000, compared to net earnings for 2011 of $3,764,000.
Net earnings per diluted Class A common share for 2012 were $0.17,
compared to $0.28 for 2011. 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 $0.58 for 2012,
compared to non-GAAP net earnings per diluted share of $0.56 for 2011.
Net earnings per diluted Class B common share for 2012 were $0.21,
compared to $0.33 for 2011. Adjusted to exclude the amounts referenced
above, non-GAAP net earnings per diluted Class B common share were $0.63
for 2012, compared to $0.61 for 2011.
Bel has scheduled a conference call at 11:00 a.m. EST today. To
participate in the call, dial (720) 545-0088, conference ID #88040702. A
simultaneous webcast is available from the Investors
link under the "About Bel" tab at www.BelFuse.com.
The webcast will be available for replay for a period of 20 days at this
same Internet address. For a telephone replay, dial (404) 537-3406,
conference ID #88040702, after 2:00 p.m. EST.
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.
Except for historical information contained in this press release,
the matters discussed in this press release (including the statements
regarding the future impact of restructuring charges taken during 2012;
the timing of the closing of the acquisition of the Transpower magnetics
business of TE Connectivity and the parties' abilities to satisfy all
conditions of closing with respect to that acquisition; the impact of
that acquisition on Bel's ICM sales and business, on Bel's cost
structure and on Bel's competitive position; the expected accretive
nature of that acquisition; the impact of the Powerbox acquisition on
the future growth of Bel's AC-DC power transformer business; the future
revenues of Bel's AC-DC power transformer business; the potential
contribution of fiber optic products to Bel's future operating results;
the potential growth in Bel's sales to the aerospace market; the
anticipated effects of the three aspects of Bel's growth plan on Bel's
ability to achieve near-term improvements in profitability, on Bel's
competitive position in high-volume commodity components, on Bel's
technology base and on Bel's ability to expand its portfolio of
non-commodity technologically advanced components; and the potential for
non-commodity technologically advanced components to become the primary
drivers of Bel's future sales and earnings) 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, commercializing 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.
per Class A common
share - diluted(3)
per Class B common
Class A common
Class B common
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