Bel Reports Second Quarter 2021 Results
07/30/2021 - 07:30 AM
JERSEY CITY, N.J., July 30, 2021 (GLOBE NEWSWIRE) -- Bel Fuse Inc . (Nasdaq: BELFA and BELFB), a designer, manufacturer and provider of products that power, protect and connect electronic circuits, today announced preliminary financial results for the second quarter of 2021.
Second Quarter 2021 Highlights
• Net sales increased 14.5% to $138.7 million from $121.2 million in last year's second quarter • Gross profit of $34.2 million , or 24.7% of net sales, compared to $31.3 million , or 25.8% of net sales in Q2-20 • GAAP net earnings of $7.9 million , or EPS of $0.61 per Class A share and $0.64 per Class B share, versus GAAP net earnings of $5.6 million in Q2-20, or EPS of $0.43 per Class A share and $0.46 per Class B share • Record backlog of $314 million on June 30, 2021 represents growth of over 100% from December 31, 2020; record quarterly bookings of $212 million , more than double the order volume compared to Q2-20
Daniel Bernstein, President and CEO, said, “We are pleased to report our second consecutive quarter of meaningful year-over-year sales growth, reflecting higher sales volume across all major product lines. Solid execution from each of our three business units enabled us to grow our top line by $18 million for the quarter while realizing an improvement in GAAP EPS of approximately 40% and an improvement in non-GAAP EPS of almost 50% as compared to the second quarter of 2020. Second quarter sales reflected a recovery in demand from key sectors we serve, particularly commercial aerospace, networking, military, e-Mobility and industrial. Further, our acquisitions of rms and EOS earlier in 2021 contributed combined sales of $6 million and net earnings of $1.0 million to Bel’s results during the second quarter.
"The higher sales volume this quarter led to improved fixed cost absorption and our margins also continued to benefit from cost initiatives previously implemented. In June 2021, the decision was made to discontinue our low-margin modules product line and as a result, our modules design and technical support center in Maidstone, UK will be closing later in the third quarter of 2021. The closure of this facility is expected to result in annual cost savings of approximately $400,000.
"In the first quarter, Bel implemented across-the-board price adjustments to offset labor and material cost increases and we expect to continue to see these pricing increases taking effect over the remainder of the year. With our new CFO coming on board earlier in 2021, there is a heightened focus on profit improvement and he will continue to drive operational efficiencies through our global operations in the pursuit of greater profitability for our stakeholders. We enter the second half of 2021 with a record backlog of over $300 million , which we believe is indicative of higher sales this year, subject to supply chain constraints that so far we have managed well. IoT/5G, e-Mobility and the return of aerospace demand are expected to be strong growth drivers for Bel for the foreseeable future,” concluded Mr. Bernstein.
Non-GAAP financial measures, such as Non-GAAP net earnings, Non-GAAP EPS, EBITDA and Adjusted EBITDA, exclude the impact of acquisition-related costs, restructuring charges and gain on sale of property. Please refer to the financial information included with this press release for reconciliations of GAAP financial measures to Non-GAAP financial measures and our explanation of why we present Non-GAAP financial measures.
Conference Call
About Bel Bel (www.belfuse.com) designs, manufactures and markets a broad array of products that power, protect and connect electronic circuits. These products are primarily used in the networking, telecommunications, computing, military, aerospace, medical, transportation and broadcasting industries. Bel's product groups include Magnetic Solutions (integrated connector modules, power transformers, power inductors and discrete components), Power Solutions and Protection (front-end, board-mount and industrial power products, module products and circuit protection), and Connectivity Solutions (expanded beam fiber optic, copper-based, RF and RJ connectors and cable assemblies). The Company operates facilities around the world.
Forward-Looking Statements
Non-GAAP Financial Measures
Website Information
[Financial tables follow]
Bel Fuse Inc. Supplementary Information (1) Condensed Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited)
Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Net sales $ 138,741 $ 121,172 $ 249,385 $ 225,149 Cost of sales(2) 104,537 89,882 190,241 168,104 Gross profit 34,204 31,290 59,144 57,045 As a % of net sales 24.7 % 25.8 % 23.7 % 25.3 % Research and development costs 5,464 6,116 10,384 12,175 Selling, general and administrative expenses(2) 21,828 19,079 43,569 39,772 As a % of net sales 15.7 % 15.7 % 17.5 % 17.7 % Restructuring charges 277 44 277 172 Gain on sale of property - - (6,175 ) - Income from operations 6,635 6,051 11,089 4,926 As a % of net sales 4.8 % 5.0 % 4.4 % 2.2 % Interest expense (721 ) (1,250 ) (1,523 ) (2,601 ) Other income/expense, net(2) 113 1,195 660 (905 ) Earnings before income taxes 6,027 5,996 10,226 1,420 (Benefit from) provision for income taxes (1,853 ) 423 (854 ) (349 ) Effective tax rate -30.7 % 7.1 % -8.4 % -24.6 % Net earnings $ 7,880 $ 5,573 $ 11,080 $ 1,769 As a % of net sales 5.7 % 4.6 % 4.4 % 0.8 % Weighted average number of shares outstanding: Class A common shares - basic and diluted 2,145 2,145 2,145 2,145 Class B common shares - basic and diluted 10,237 10,178 10,220 10,151 Net earnings per common share: Class A common shares - basic and diluted $ 0.61 $ 0.43 $ 0.85 $ 0.13 Class B common shares - basic and diluted $ 0.64 $ 0.46 $ 0.91 $ 0.15
(1) The supplementary information included in this press release for 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission. (2) During the fourth quarter of 2020, the Company changed its financial statement presentation related to gain/loss on its SERP investments. These gains/losses were previously included within cost of sales and selling, general and administrative expense. For the three and six months ended June 30, 2020 presented above, a total of $1.5 million in gains and $0.5 million in losses, respectively, on SERP investments have been reclassified from cost of sales and selling, general and administrative expense and are now included within other income/expense, net.
Bel Fuse Inc. Supplementary Information (1) Condensed Consolidated Balance Sheets (in thousands, unaudited)
June 30, 2021 December 31, 2020 Assets Current assets: Cash and cash equivalents $ 66,425 $ 84,939 Accounts receivable, net 86,917 71,372 Inventories 116,170 100,133 Other current assets 29,915 23,771 Total current assets 299,427 280,216 Property, plant and equipment, net 36,747 34,501 Right-of-use assets 11,066 14,217 Goodwill and other intangible assets, net 90,833 89,755 Other assets 35,806 35,177 Total assets $ 473,879 $ 453,866 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 53,020 $ 39,774 Current portion of long-term debt 8,273 5,286 Operating lease liability, current 5,980 6,591 Other current liabilities 37,820 35,885 Total current liabilities 105,093 87,536 Long-term debt 104,656 110,294 Operating lease liability, long-term 5,351 8,064 Other liabilities 62,182 62,173 Total liabilities 277,281 268,067 Stockholders' equity 196,598 185,799 Total liabilities and stockholders' equity $ 473,879 $ 453,866
(1) The supplementary information included in this press release for 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission.
Bel Fuse Inc. Supplementary Information (1) Reconciliation of GAAP Net Earnings to EBITDA and Adjusted EBITDA (2) (in thousands, unaudited)
Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 GAAP Net earnings $ 7,880 $ 5,573 $ 11,080 $ 1,769 Interest expense 721 1,250 1,523 2,601 (Benefit from) provision for income taxes (1,853 ) 423 (854 ) (349 ) Depreciation and amortization 4,267 4,108 8,478 8,234 EBITDA $ 11,015 $ 11,354 $ 20,227 $ 12,255 % of net sales 7.9 % 9.4 % 8.1 % 5.4 % Unusual or special items: Gain on sale of property - - (6,175 ) - Restructuring charges 277 44 277 172 Acquisition-related costs 317 - 483 186 Adjusted EBITDA $ 11,609 $ 11,398 $ 14,812 $ 12,613 % of net sales 8.4 % 9.4 % 5.9 % 5.6 %
(1) The supplementary information included in this press release for 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission. (2) In this press release and supplemental information, we have included Non-GAAP financial measures, including Non-GAAP net earnings, Non-GAAP EPS, EBITDA and Adjusted EBITDA. We present results adjusted to exclude the effects of certain specified items and their related tax impact that would otherwise be included under GAAP, to aid in comparisons with other periods. We may use Non-GAAP financial measures to determine performance-based compensation and management believes that this information may be useful to investors.
Bel Fuse Inc. Supplementary Information (1) Reconciliation of GAAP Measures to Non-GAAP Measures (2) (in thousands (except per share amounts), unaudited)
The following tables detail the impact that certain unusual or special items had on the Company's net earnings per common Class A and Class B basic and diluted shares ("EPS") and the line items in which these items were included in the condensed consolidated statements of operations.
Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 Reconciling Items Earnings Benefit from income taxes Net earnings Class A EPS(3) Class B EPS(3) Earnings Provision Net earnings Class A EPS(3) Class B EPS(3) GAAP measures $ 6,027 $ (1,853 ) $ 7,880 $ 0.61 $ 0.64 $ 5,996 $ 423 $ 5,573 $ 0.43 $ 0.46 Items included in SG&A expenses: Acquisition-related costs 317 73 244 0.02 0.02 - - - - - Gain on sale of property - - - - - - - - - - Restructuring charges 277 40 237 0.02 0.02 44 12 32 - - Non-GAAP measures $ 6,621 $ (1,740 ) $ 8,361 $ 0.64 $ 0.68 $ 6,040 $ 435 $ 5,605 $ 0.43 $ 0.46
Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 Reconciling Items Earnings Benefit from income taxes Net Class A EPS(3) Class B EPS(3) Earnings Benefit from income taxes Net Class A EPS(3) Class B EPS(3) GAAP measures $ 10,226 $ (854 ) $ 11,080 $ 0.85 $ 0.91 $ 1,420 $ (349 ) $ 1,769 $ 0.13 $ 0.15 Items included in SG&A expenses: Acquisition-related costs 483 111 372 0.03 0.03 186 43 143 0.01 0.01 Gain on sale of property (6,175 ) - (6,175 ) (0.48 ) (0.50 ) - - - - - Restructuring charges 277 40 237 0.02 0.02 172 40 132 0.01 0.01 Non-GAAP measures $ 4,811 $ (703 ) $ 5,514 $ 0.42 $ 0.45 $ 1,778 $ (266 ) $ 2,044 $ 0.15 $ 0.17
(1) The supplementary information included in this press release for 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission. (2) In this press release and supplemental information, we have included Non-GAAP financial measures, including Non-GAAP net earnings, Non-GAAP EPS, EBITDA and Adjusted EBITDA. We present results adjusted to exclude the effects of certain specified items and their related tax impact that would otherwise be included under GAAP, to aid in comparisons with other periods. We may use Non-GAAP financial measures to determine performance-based compensation and management believes that this information may be useful to investors. (3) Individual amounts of earnings per share may not agree to the total due to rounding.
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