[X]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the Quarterly Period Ended June 30, 2014
|
|
or
|
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from ___________ to ____________
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NEW JERSEY
|
22-1463699
|
|
(State of incorporation)
|
(I.R.S. Employer Identification No.)
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
|
Yes [X]
|
No [ ]
|
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
|
Yes [X]
|
No [ ]
|
Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
|
Large accelerated filer [ ]
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Accelerated filer [X]
|
Non-accelerated filer [ ]
(Do not check if a smaller reporting company)
|
Smaller reporting company [ ]
|
||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
|
Yes [ ]
|
No [X]
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Title of Each Class
|
Number of Shares of Common Stock Outstanding
as of August 1, 2014
|
|||
Class A Common Stock ($0.10 par value)
|
2,174,912 | |||
Class B Common Stock ($0.10 par value)
|
9,702,877 |
INDEX
|
|||
Page
|
|||
Part I
|
|||
Item 1.
|
1
|
||
2
|
|||
3
|
|||
4
|
|||
5 - 6
|
|||
7 - 20
|
|||
Item 2.
|
|||
21 - 29
|
|||
Item 3.
|
|||
29
|
|||
Item 4.
|
29
|
||
Part II
|
|||
Item 1.
|
29
|
||
Item 6.
|
30
|
||
31
|
1.
|
BASIS OF PRESENTATION AND ACCOUNTING POLICIES
|
2.
|
EARNINGS PER SHARE
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Numerator:
|
||||||||||||||||
Net earnings
|
$ | 3,065 | $ | 1,689 | $ | 5,568 | $ | 1,131 | ||||||||
Less Dividends declared:
|
||||||||||||||||
Class A
|
131 | 131 | 261 | 261 | ||||||||||||
Class B
|
653 | 643 | 1,307 | 1,275 | ||||||||||||
Undistributed earnings (loss)
|
$ | 2,281 | $ | 915 | $ | 4,000 | $ | (405 | ) | |||||||
Undistributed earnings (loss) allocation - basic and diluted:
|
||||||||||||||||
Class A undistributed earnings (loss)
|
$ | 414 | $ | 168 | $ | 726 | $ | (74 | ) | |||||||
Class B undistributed earnings (loss)
|
1,867 | 747 | 3,274 | (331 | ) | |||||||||||
Total undistributed earnings (loss)
|
$ | 2,281 | $ | 915 | $ | 4,000 | $ | (405 | ) | |||||||
Net earnings allocation - basic and diluted:
|
||||||||||||||||
Class A net earnings
|
$ | 545 | $ | 299 | $ | 987 | $ | 187 | ||||||||
Class B net earnings
|
2,520 | 1,390 | 4,581 | $ | 944 | |||||||||||
Net earnings
|
$ | 3,065 | $ | 1,689 | $ | 5,568 | $ | 1,131 | ||||||||
Denominator:
|
||||||||||||||||
Weighted-average shares outstanding:
|
||||||||||||||||
Class A common share - basic and diluted
|
2,174,912 | 2,174,912 | 2,174,912 | 2,174,912 | ||||||||||||
Class B common share - basic and diluted
|
9,331,982 | 9,213,178 | 9,333,460 | 9,217,119 | ||||||||||||
Earnings per share:
|
||||||||||||||||
Class A common share - basic and diluted
|
$ | 0.25 | $ | 0.14 | $ | 0.45 | $ | 0.09 | ||||||||
Class B common share - basic and diluted
|
$ | 0.27 | $ | 0.15 | $ | 0.49 | $ | 0.10 |
Acquisition-Date
|
|||||
Fair Values
|
|||||
Cash and cash equivalents
|
$ | 20,913 | |||
Accounts receivable
|
29,388 | ||||
Inventories
|
33,156 |
(a)
|
|||
Other current assets
|
5,387 | ||||
Property, plant and equipment
|
28,176 |
(b)
|
|||
Intangible assets
|
21,188 |
(c)
|
|||
Other assets
|
536 | ||||
Total identifiable assets
|
138,744 | ||||
Accounts payable
|
(26,180 | ) | |||
Accrued expenses
|
(20,290 | ) | |||
Income taxes payable
|
223 | ||||
Deferred income tax liability, noncurrent
|
860 | ||||
Other long-term liabilities
|
(99 | ) | |||
Total liabilities assumed
|
(45,486 | ) | |||
Net identifiable assets acquired
|
93,258 | ||||
Goodwill
|
37,534 |
(d)
|
|||
Net assets acquired
|
$ | 130,792 | |||
Cash paid
|
$ | 130,792 | |||
Deferred consideration
|
- | ||||
Fair value of consideration transferred
|
$ | 130,792 |
(a)
|
The determination of fair value related to the inventory acquired was still in progress as of the date of this filing. The amount above represents only the carrying value of the inventory on Power Solutions’ balance sheet as of the acquisition date.
|
(b)
|
The appraisals related to machinery and equipment acquired were incomplete as of this filing date and, as such, the amount noted above represents only the carrying value of those assets on Power Solutions’ balance sheet as of the acquisition date.
|
(c)
|
The Company has identified certain intangible assets related to the Power Solutions acquisition, including trademarks and trade names, developed technology and potential in-process research and development, license agreements, non-compete agreements, an investment in a 49%-owned joint venture and customer relationships, which are being valued by a third-party appraiser. These appraisals were not complete as of the date of this filing.
|
(d)
|
The amount of goodwill is provisional as of the filing date, as the fair value determination of inventory acquired, and appraisals related to property, plant and equipment, various intangible assets and certain liabilities such as lease liabilities are still underway. As the final amount of goodwill has not yet been determined or allocated by segment, the Company is unable to determine at this time the portion of goodwill, if any, that will be deductible for tax purposes.
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Revenue
|
$ | 136,984 | $ | 161,481 | $ | 278,451 | $ | 305,250 | ||||||||
Net earnings
|
(3,336 | ) | 1,382 | 233 | (5,977 | ) | ||||||||||
Earnings per Class A common share - basic and diluted
|
(0.28 | ) | 0.11 | 0.01 | (0.51 | ) | ||||||||||
Earnings per Class B common share - basic and diluted
|
(0.29 | ) | 0.12 | 0.02 | (0.53 | ) |
TRP
|
Array
|
2013 Acquisitions
|
||||||||||||||||||||||||||
Measurement
|
March 29,
|
Measurement
|
August 20,
|
Acquisition-Date
|
||||||||||||||||||||||||
March 29,
|
Period
|
2013
|
August 20,
|
Period
|
2013
|
Fair Values
|
||||||||||||||||||||||
2013
|
Adjustments
|
(As finalized)
|
2013
|
Adjustments
|
(As finalized)
|
(As finalized)
|
||||||||||||||||||||||
Cash
|
$ | 8,388 | $ | - | $ | 8,388 | $ | - | $ | - | $ | - | $ | 8,388 | ||||||||||||||
Accounts receivable
|
11,580 | (39 | ) | 11,541 | 994 | - | 994 | 12,535 | ||||||||||||||||||||
Inventories
|
6,258 | 1,097 | 7,355 | 2,588 | (1,595 | ) | 993 | 8,348 | ||||||||||||||||||||
Other current assets
|
1,953 | (334 | ) | 1,619 | 83 | 345 | 428 | 2,047 | ||||||||||||||||||||
Property, plant and equipment
|
4,693 | 1,097 | 5,790 | 2,285 | 1,225 | 3,510 | 9,300 | |||||||||||||||||||||
Intangible assets
|
- | 6,110 | 6,110 | - | 1,470 | 1,470 | 7,580 | |||||||||||||||||||||
Other assets
|
1,151 | 198 | 1,349 | 84 | 1,663 | 1,747 | 3,096 | |||||||||||||||||||||
Total identifiable assets
|
34,023 | 8,129 | 42,152 | 6,034 | 3,108 | 9,142 | 51,294 | |||||||||||||||||||||
Accounts payable
|
(8,565 | ) | 331 | (8,234 | ) | (677 | ) | 1 | (676 | ) | (8,910 | ) | ||||||||||||||||
Accrued expenses
|
(4,003 | ) | (462 | ) | (4,465 | ) | (206 | ) | (79 | ) | (285 | ) | (4,750 | ) | ||||||||||||||
Other current liabilities
|
(25 | ) | (734 | ) | (759 | ) | (214 | ) | 214 | - | (759 | ) | ||||||||||||||||
Noncurrent liabilities
|
- | (586 | ) | (586 | ) | (643 | ) | (1,105 | ) | (1,748 | ) | (2,334 | ) | |||||||||||||||
Total liabilities assumed
|
(12,593 | ) | (1,451 | ) | (14,044 | ) | (1,740 | ) | (969 | ) | (2,709 | ) | (16,753 | ) | ||||||||||||||
Net identifiable assets acquired
|
21,430 | 6,678 | 28,108 | 4,294 | 2,139 | 6,433 | 34,541 | |||||||||||||||||||||
Goodwill
|
8,278 | (7,038 | ) | 1,240 | 5,666 | (2,094 | ) | 3,572 | 4,812 | |||||||||||||||||||
Net assets acquired
|
$ | 29,708 | $ | (360 | ) | $ | 29,348 | $ | 9,960 | $ | 45 | $ | 10,005 | $ | 39,353 | |||||||||||||
Cash paid
|
$ | 22,400 | $ | 6,948 | $ | 29,348 | $ | 9,960 | $ | 45 | $ | 10,005 | $ | 39,353 | ||||||||||||||
Assumption of severance payment
|
109 | (109 | ) | - | - | - | - | - | ||||||||||||||||||||
Fair value of consideration
|
||||||||||||||||||||||||||||
transferred
|
22,509 | 6,839 | 29,348 | 9,960 | 45 | 10,005 | 39,353 | |||||||||||||||||||||
Deferred consideration
|
7,199 | (7,199 | ) | - | - | - | - | - | ||||||||||||||||||||
Total consideration paid
|
$ | 29,708 | $ | (360 | ) | $ | 29,348 | $ | 9,960 | $ | 45 | $ | 10,005 | $ | 39,353 |
Assets at Fair Value Using
|
||||||||||||||||
Total
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Significant Unobservable Inputs (Level 3)
|
|||||||||||||
As of June 30, 2014
|
||||||||||||||||
Available-for-sale securities:
|
||||||||||||||||
Investments held in Rabbi Trust
|
$ | 3,485 | $ | 3,485 | $ | - | $ | - | ||||||||
Marketable securities
|
4 | 4 | - | - | ||||||||||||
Total
|
$ | 3,489 | $ | 3,489 | $ | - | $ | - | ||||||||
As of December 31, 2013
|
||||||||||||||||
Available-for-sale securities:
|
||||||||||||||||
Investments held in Rabbi Trust
|
$ | 3,313 | $ | 3,313 | $ | - | $ | - | ||||||||
Marketable securities
|
3 | 3 | - | - | ||||||||||||
Total
|
$ | 3,316 | $ | 3,316 | $ | - | $ | - |
June 30,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
Raw materials
|
$ | 48,873 | $ | 29,428 | ||||
Work in progress
|
12,261 | 8,783 | ||||||
Finished goods
|
37,572 | 31,808 | ||||||
$ | 98,706 | $ | 70,019 |
6.
|
PROPERTY, PLANT AND EQUIPMENT
|
June 30,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
Land
|
$ | 3,315 | $ | 3,229 | ||||
Buildings and improvements
|
31,156 | 25,216 | ||||||
Machinery and equipment
|
107,032 | 82,420 | ||||||
Construction in progress
|
5,291 | 4,042 | ||||||
146,794 | 114,907 | |||||||
Accumulated depreciation
|
(79,743 | ) | (74,011 | ) | ||||
$ | 67,051 | $ | 40,896 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Total segment sales:
|
||||||||||||||||
North America
|
$ | 39,405 | $ | 32,301 | $ | 70,859 | $ | 61,523 | ||||||||
Asia
|
61,968 | 64,036 | 111,860 | 96,760 | ||||||||||||
Europe
|
16,550 | 10,591 | 27,441 | 20,716 | ||||||||||||
Total segment sales
|
117,923 | 106,928 | 210,160 | 178,999 | ||||||||||||
Reconciling item:
|
||||||||||||||||
Intersegment sales
|
(18,484 | ) | (12,947 | ) | (28,075 | ) | (21,990 | ) | ||||||||
Net sales
|
$ | 99,439 | $ | 93,981 | $ | 182,085 | $ | 157,009 | ||||||||
Income from operations:
|
||||||||||||||||
North America
|
$ | (1,617 | ) | $ | (2,012 | ) | $ | (734 | ) | $ | (3,495 | ) | ||||
Asia
|
4,715 | 3,776 | 6,388 | 3,112 | ||||||||||||
Europe
|
616 | (105 | ) | 941 | 615 | |||||||||||
$ | 3,714 | $ | 1,659 | $ | 6,595 | $ | 232 | |||||||||
June 30,
|
December 31,
|
|||||||||||||||
2014 | 2013 | |||||||||||||||
Total Assets:
|
||||||||||||||||
North America
|
$ | 175,953 | $ | 117,261 | ||||||||||||
Asia
|
202,476 | 148,780 | ||||||||||||||
Europe
|
78,880 | 42,100 | ||||||||||||||
457,309 | 308,141 | |||||||||||||||
Unallocated Goodwill
|
37,534 | - | ||||||||||||||
$ | 494,843 | $ | 308,141 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Sales to External Customers:
|
||||||||||||||||
North America:
|
||||||||||||||||
Array
|
$ | 1,903 | $ | - | $ | 3,544 | $ | - | ||||||||
Power Solutions
|
5,037 | - | 5,037 | - | ||||||||||||
6,940 | - | 8,581 | - | |||||||||||||
Asia:
|
||||||||||||||||
TRP
|
17,227 | 21,788 | 32,831 | 21,788 | ||||||||||||
Power Solutions
|
357 | - | 357 | - | ||||||||||||
17,584 | 21,788 | 33,188 | 21,788 | |||||||||||||
Europe:
|
||||||||||||||||
TRP
|
555 | 392 | 1,186 | 392 | ||||||||||||
Power Solutions
|
1,839 | - | 1,839 | - | ||||||||||||
2,394 | 392 | 3,025 | 392 | |||||||||||||
Net sales from 2013-2014 acquisitions
|
26,918 | 22,180 | 44,794 | 22,180 | ||||||||||||
Income from operations:
|
||||||||||||||||
North America:
|
||||||||||||||||
Array
|
(175 | ) | - | (682 | ) | - | ||||||||||
Power Solutions
|
(1,125 | ) | - | (1,125 | ) | - | ||||||||||
(1,300 | ) | - | (1,807 | ) | - | |||||||||||
Asia:
|
||||||||||||||||
TRP
|
3,710 | 3,596 | 5,110 | 3,587 | ||||||||||||
Power Solutions
|
(162 | ) | - | (162 | ) | - | ||||||||||
3,548 | 3,596 | 4,948 | 3,587 | |||||||||||||
Europe:
|
||||||||||||||||
TRP
|
128 | 104 | 228 | 104 | ||||||||||||
Power Solutions
|
297 | - | 297 | - | ||||||||||||
425 | 104 | 525 | 104 | |||||||||||||
Total income from operations from
|
||||||||||||||||
2013-2014 acquisitions
|
$ | 2,673 | $ | 3,700 | $ | 3,666 | $ | 3,691 |
June 30,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
Sales commissions
|
$ | 1,903 | $ | 1,431 | ||||
Subcontracting labor
|
2,218 | 2,406 | ||||||
Salaries, bonuses and related benefits
|
24,609 | 13,674 | ||||||
Litigation reserve
|
726 | 723 | ||||||
Warranty accrual
|
3,667 | - | ||||||
Other
|
7,312 | 4,208 | ||||||
$ | 40,435 | $ | 22,442 |
June 30,
|
||||
2014
|
||||
Beginning balance as of June 19, 2014
|
$ | 4,111 | ||
Charges and costs accrued
|
45 | |||
Adjustments related to pre-existing warranties (including changes in estimates)
|
- | |||
Less repair costs incurred
|
(521 | ) | ||
Change due to foreign currency
|
32 | |||
Ending balance as of June 30, 2014
|
$ | 3,667 |
10.
|
DEBT
|
2014
|
$ | 3,625 | ||
2015
|
9,063 | |||
2016
|
10,875 | |||
2017
|
12,687 | |||
2018
|
16,313 | |||
Thereafter
|
92,437 | |||
Total long-term debt
|
145,000 | |||
Less: Current maturities of long-term debt
|
(7,250 | ) | ||
Noncurrent portion of long-term debt
|
$ | 137,750 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Service cost
|
$ | 138 | $ | 139 | $ | 276 | $ | 278 | ||||||||
Interest cost
|
135 | 112 | 270 | 224 | ||||||||||||
Amortization of adjustments
|
46 | 77 | 92 | 154 | ||||||||||||
Total SERP expense
|
$ | 319 | $ | 328 | $ | 638 | $ | 656 |
June 30,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
Balance sheet amounts:
|
||||||||
Minimum pension obligation
|
||||||||
and unfunded pension liability
|
$ | 11,376 | $ | 10,830 | ||||
Amounts recognized in accumulated
|
||||||||
other comprehensive loss, pretax:
|
||||||||
Prior service cost
|
$ | 1,140 | $ | 1,230 | ||||
Net loss
|
1,004 | 1,004 | ||||||
$ | 2,144 | $ | 2,234 |
June 30,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
Foreign currency translation adjustment, net of taxes of $200 and $77
|
||||||||
at June 30, 2014 and December 31, 2013
|
$ | 2,441 | $ | 1,904 | ||||
Unrealized holding gains on available-for-sale
|
||||||||
securities, net of taxes of $234 and $169 as of
|
||||||||
June 30, 2014 and December 31, 2013
|
388 | 282 | ||||||
Unfunded SERP liability, net of taxes of ($665) and ($693) as
|
||||||||
of June 30, 2014 and December 31, 2013
|
(1,478 | ) | (1,541 | ) | ||||
Accumulated other comprehensive income
|
$ | 1,351 | $ | 645 |
·
|
Recent Acquisitions
– The Company completed its acquisitions of TRP and Array during late March and mid-August 2013, respectively, and its acquisition of Power Solutions in mid-June 2014. During the three and six months ended June 30, 2014, these acquisitions contributed a combined $26.9 million and $44.8 million of sales, respectively, and a combined $2.7 million and $3.7 million of income from operations, respectively. TRP contributed sales of $22.2 million and income from operations of $3.7 million during both the three and six months ended June 30, 2013. Due to the timing of the acquisition dates, there were no contributions of operating results related to the acquisitions of Array or Power Solutions during the three and six months ended June 30, 2013.
|
·
|
Revenues
– Excluding the revenue contributions from the 2013 and 2014 acquisitions described above, the Company’s revenues for the three and six months ended June 30, 2014 increased by $0.7 million and $2.5 million, respectively, as compared to the same periods of 2013.
|
·
|
Product Mix
– Material and labor costs vary by product line and any significant shift in product mix between higher- and lower-margin product lines will have a corresponding impact on the Company’s gross margin percentage. During the first half of 2014, the Company experienced a favorable shift in the mix of products sold as compared to the same period of 2013.
|
·
|
Pricing and Availability of Materials
– Pricing and availability of components that constitute raw materials in our manufacturing processes have been stable for most of the Company’s product lines, although lead times on electrical components are still extended. While pricing of electrical components during the first half of 2014 was consistent with the same period of 2013, there have been recent pricing pressures in this area which may impact future quarters. With regard to commodity pricing, the cost of certain commodities that are contained in components and other raw materials, such as gold and copper, were lower during the first half of 2014 as compared to the same period of 2013.
Any fluctuations in component prices and other commodity prices associated with Bel’s raw materials will have a corresponding impact on Bel’s profit margins.
|
·
|
Labor Costs
– Labor costs as a percentage of sales decreased slightly from 14.0% during the first half of 2013 to 13.8% during the first half of 2014. During the first half of 2013, the Company incurred higher labor costs due to inefficiencies associated with the Cinch reorganization. These additional costs did not recur in 2014. This decrease in labor costs as a percentage of sales was largely offset by rising labor costs in the PRC and the strengthening of the Chinese Renminbi. With the addition of TRP and prior to the Power Solutions acquisition, approximately half of Bel’s total sales were generated from labor-intensive magnetic products, which are primarily manufactured in the PRC.
|
·
|
Acquisition-Related Costs
– In connection with the acquisition of Power Solutions in June 2014 and the subsequent acquisition of Connectivity Solutions which closed in July 2014, the Company incurred $1.4 million during the first half of 2014, primarily during the second quarter. Various purchase accounting adjustments and professional fees, associated with the valuations of Power Solutions and Connectivity Solutions and related to ongoing audits of the historical financial statements of the acquirees, are also expected in future quarters.
|
·
|
Effective Tax Rate
– The Company’s effective tax rate will fluctuate based on the geographic segment in which the pretax profits are earned. Of the geographic segments in which the Company operates, the U.S. has the highest tax rates; Europe’s tax rates are generally lower than U.S. tax rates; and Asia has the lowest tax rates of the Company’s three geographical segments. The change in the effective tax rate during the six months ended June 30, 2014 compared to the same period in 2013 is primarily attributed to a significantly lower pretax loss in the North America segment for the six months ended June 30, 2014 compared to the same period in 2013. In addition, for the six months ended June 30, 2013, the Company recognized an additional $0.4 million in R&E credits related to the year ended December 31, 2012. See Note 8 of the condensed consolidated financial statements.
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||||||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||||||||||||||||||
North America
|
$ | 35,064 | 35 | % | $ | 28,628 | 30 | % | $ | 63,795 | 35 | % | $ | 55,444 | 35 | % | ||||||||||||||||
Asia
|
51,223 | 52 | % | 55,157 | 59 | % | 94,271 | 52 | % | 81,573 | 52 | % | ||||||||||||||||||||
Europe
|
13,152 | 13 | % | 10,196 | 11 | % | 24,019 | 13 | % | 19,992 | 13 | % | ||||||||||||||||||||
$ | 99,439 | 100 | % | $ | 93,981 | 100 | % | $ | 182,085 | 100 | % | $ | 157,009 | 100 | % |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Total segment sales:
|
||||||||||||||||
North America
|
$ | 39,405 | $ | 32,301 | $ | 70,859 | $ | 61,523 | ||||||||
Asia
|
61,968 | 64,036 | 111,860 | 96,760 | ||||||||||||
Europe
|
16,550 | 10,591 | 27,441 | 20,716 | ||||||||||||
Total segment sales
|
117,923 | 106,928 | 210,160 | 178,999 | ||||||||||||
Reconciling item:
|
||||||||||||||||
Intersegment sales
|
(18,484 | ) | (12,947 | ) | (28,075 | ) | (21,990 | ) | ||||||||
Net sales
|
$ | 99,439 | $ | 93,981 | $ | 182,085 | $ | 157,009 | ||||||||
Income from operations:
|
||||||||||||||||
North America
|
$ | (1,617 | ) | $ | (2,012 | ) | $ | (734 | ) | $ | (3,495 | ) | ||||
Asia
|
4,715 | 3,776 | 6,388 | 3,112 | ||||||||||||
Europe
|
616 | (105 | ) | 941 | 615 | |||||||||||
$ | 3,714 | $ | 1,659 | $ | 6,595 | $ | 232 |
Percentage of Net Sales
|
Percentage of Net Sales
|
||||||||||
Three Months Ended
|
Six Months Ended
|
||||||||||
June 30,
|
June 30,
|
||||||||||
2014
|
2013
|
2014
|
2013
|
||||||||
Net sales
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
|||
Cost of sales
|
82.0
|
83.8
|
82.4
|
84.5
|
|||||||
Selling, general and administrative ("SG&A") expenses
|
13.3
|
13.1
|
13.4
|
14.5
|
|||||||
Restructuring charges
|
1.1
|
1.3
|
0.6
|
0.9
|
|||||||
Interest expense
|
(0.2)
|
-
|
(0.1)
|
-
|
|||||||
Interest income and other, net
|
-
|
0.1
|
0.1
|
0.1
|
|||||||
Earnings before provision (benefit) for income taxes
|
3.6
|
1.8
|
3.5
|
0.2
|
|||||||
Provision (benefit) for income taxes
|
0.5
|
-
|
0.5
|
(0.5)
|
|||||||
Net earnings
|
3.1
|
1.8
|
3.1
|
0.7
|
Increase from
|
Increase from
|
|||||||
Prior Period
|
Prior Period
|
|||||||
Three Months Ended
|
Six Months Ended
|
|||||||
June 30, 2014
|
June 30, 2014
|
|||||||
Compared with
|
Compared with
|
|||||||
Three Months Ended
|
Six Months Ended
|
|||||||
June 30, 2013
|
June 30, 2013
|
|||||||
Net sales
|
5.8
|
%
|
16.0
|
%
|
||||
Cost of sales
|
3.5
|
13.1
|
||||||
SG&A expenses
|
6.8
|
7.1
|
||||||
Net earnings
|
81.5
|
392.3
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||||||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||||||||||||||||||
Magnetic solutions
|
$ | 44,732 | 45 | % | $ | 48,758 | 52 | % | $ | 84,029 | 46 | % | $ | 70,015 | 45 | % | ||||||||||||||||
Connectivity solutions
|
32,197 | 32 | % | 27,093 | 29 | % | 62,367 | 34 | % | 53,205 | 34 | % | ||||||||||||||||||||
Power solutions and protection
|
22,510 | 23 | % | 18,130 | 19 | % | 35,689 | 20 | % | 33,789 | 21 | % | ||||||||||||||||||||
$ | 99,439 | 100 | % | $ | 93,981 | 100 | % | $ | 182,085 | 100 | % | $ | 157,009 | 100 | % |
Three Months Ended
|
Six Months Ended
|
||||||
June 30,
|
June 30,
|
||||||
2014
|
2013
|
2014
|
2013
|
||||
Material costs
|
44.4%
|
44.4%
|
43.4%
|
45.2%
|
|||
Labor costs
|
13.5%
|
15.0%
|
13.8%
|
14.0%
|
|||
Research and development expenses
|
4.1%
|
4.0%
|
4.1%
|
4.3%
|
|||
Other expenses
|
20.0%
|
20.4%
|
21.1%
|
21.0%
|
|||
Total cost of sales
|
82.0%
|
83.8%
|
82.4%
|
84.5%
|
2014
|
$ | 3,625 | ||
2015
|
9,063 | |||
2016
|
10,875 | |||
2017
|
12,687 | |||
2018
|
16,313 | |||
Thereafter
|
92,437 | |||
Total long-term debt
|
145,000 | |||
Less: Current maturities of long-term debt
|
(7,250 | ) | ||
Noncurrent portion of long-term debt
|
$ | 137,750 |
Payments due by period (dollars in thousands)
|
||||||||||||||||||||
Contractual Obligations
|
Total
|
Less than 1 year
|
1-3
years
|
3-5
years
|
More than
5 years
|
|||||||||||||||
Capital expenditure obligations
|
$ | 3,014 | $ | 3,014 | $ | - | $ | - | $ | - | ||||||||||
Operating leases
|
15,305 | 4,522 | 5,630 | 2,654 | 2,499 | |||||||||||||||
Raw material purchase obligations
|
23,376 | 23,288 | 88 | - | - | |||||||||||||||
Total
|
$ | 41,695 | $ | 30,824 | $ | 5,718 | $ | 2,654 | $ | 2,499 |
Payments due by period (dollars in thousands)
|
||||||||||||||||||||
Contractual Obligations
|
Total
|
Less than 1 year
|
1-3
years
|
3-5
years
|
More than
5 years
|
|||||||||||||||
Long-term debt obligations
|
$ | 145,000 | $ | 7,250 | $ | 21,750 | $ | 116,000 | $ | - | ||||||||||
Capital expenditure obligations
|
431 | 431 | - | - | - | |||||||||||||||
Operating leases
|
3,900 | 2,097 | 1,797 | 6 | - | |||||||||||||||
Raw material purchase obligations
|
15,533 | 15,504 | 29 | - | - | |||||||||||||||
Total
|
$ | 164,864 | $ | 25,282 | $ | 23,576 | $ | 116,006 | $ | - |
Item 6.
Exhibits
|
|
(a)
Exhibits
:
|
|
3.1* | Amended and Restated By-Laws of Bel Fuse Inc. |
31.1*
|
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2*
|
Certification of the principal accounting and financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1**
|
Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2**
|
Certification of the principal accounting and financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS***
|
XBRL Instance Document
|
101.SCH***
|
XBRL Taxonomy Extension Schema Document
|
101.CAL***
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF***
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB***
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE***
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
BEL FUSE INC.
|
|
August 11, 2014
|
|
By:
|
/s/ Daniel Bernstein
|
Daniel Bernstein
|
|
President and Chief Executive Officer
|
|
By:
|
/s/ Colin Dunn
|
Colin Dunn
|
|
Vice President of Finance and Secretary
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Bel Fuse Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: August 11, 2014
|
/s/ Daniel Bernstein
|
Daniel Bernstein
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Bel Fuse Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: August 11, 2014
|
/s/ Daniel Bernstein
|
Daniel Bernstein
|
|
President and Chief Executive Officer
|
(2) The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and consolidated results of operations of the Company for the periods presented.
|
Date: August 11, 2014
|
/s/ Colin Dunn
|
Colin Dunn
|
|
Vice President of Finance and Secretary
|
|
(principal financial officer and principal accounting officer)
|