GlobeNewswire Inc | Jul 30, 2021 07:30AM EDT

July 30, 2021

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 increased14.5%to$138.7 million from $121.2million in last year's second quarter? Gross profit of $34.2million, or24.7%of net sales, compared to $31.3 million, or25.8% of net sales in Q2-20 GAAP net earnings of $7.9million, or EPS of $0.61 per Class A share and? $0.64 per Class B share, versus GAAP net earnings of $5.6million in Q2-20, or EPS of $0.43per Class A share and$0.46per 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 earningsof $1.0million to Bels results during the second quarter.

"The higher sales volume this quarter led toimproved fixed cost absorption and our margins also continued to benefit fromcost 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 toresult 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 CFOcoming on board earlier in 2021, there is a heightened focus on profit improvement and he will continue to driveoperational 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-relatedcosts,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 CallBel has scheduled a conference call at 11:00 a.m. ET today. To participate in the conference call, investors should dial 866-248-8441, or323-289-6576 if dialing internationally. The presentation will additionally be broadcast live over the Internet and will be available at https://ir.belfuse.com/events-and-presentations. The webcast will be available via replay for a period of 20 days at this same Internet address. For those unable to access the live call, a telephone replay will be available at 844-512-2921, or412-317-6671 if dialing internationally, using access code1881858 after 2:00 p.m. ET, also for 20 days.

About BelBel (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 StatementsNon-historical information contained in this press release (including the statements regarding anticipated cost savings resulting from the closure of Bels modules design and technical support center in Maidstone, UK, expectations concerning pricing adjustments taking effect and their impact on offsetting labor and material cost increases, the Companys plans, intentions, expectations and efforts in connection with profit improvement and maximization, operational efficiencies, and the pursuit of certain opportunities and markets, expectations regarding backlog as an indicator of sales, supply chain constraints and the Company's ability to manage them, and anticipated future trends, plans and results for the business including for the second half of 2021) are forward-looking statements (as described under the Private Securities Litigation Reform Act of 1995) 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 impact of public health crises (such as the governmental, social and economic effects of COVID-19); the effects of business and economic conditions; difficulties associated with integrating previously 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; the impact of changes to U.S. trade and tariff policies; and the risk factors detailed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and from time to time in the Company's other SEC reports. In light of the risks and uncertainties impacting our business, 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.

Non-GAAP Financial MeasuresThe Non-GAAP measures identified in this press release as well as in the supplementary information to this press release (Non-GAAP net earnings, Non-GAAP EPS, EBITDA and Adjusted EBITDA) 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. We present results adjusted to exclude the effects of certain unusual or special items and their related tax impact that would otherwise be included under U.S. 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.

Website InformationWe routinely post important information for investors on our website,www.belfuse.com, in the "Investor Relations" section. We use our website as a means of disclosing material, otherwise non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investor Relations section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.

[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 104,537 89,882 190,241 168,104 (2)Gross profit 34,204 31,290 59,144 57,045 As a % of net 24.7 % 25.8 % 23.7 % 25.3 %sales Research anddevelopment 5,464 6,116 10,384 12,175 costsSelling,general and 21,828 19,079 43,569 39,772 administrativeexpenses(2)As a % of net 15.7 % 15.7 % 17.5 % 17.7 %salesRestructuring 277 44 277 172 chargesGain on sale - - (6,175 ) - of property Income from 6,635 6,051 11,089 4,926 operationsAs a % of net 4.8 % 5.0 % 4.4 % 2.2 %sales Interest (721 ) (1,250 ) (1,523 ) (2,601 )expenseOther income/expense, net 113 1,195 660 (905 )(2)Earningsbefore income 6,027 5,996 10,226 1,420 taxes (Benefit from)provision for (1,853 ) 423 (854 ) (349 )income taxesEffective tax -30.7 % 7.1 % -8.4 % -24.6 %rateNet earnings $ 7,880 $ 5,573 $ 11,080 $ 1,769 As a % of net 5.7 % 4.6 % 4.4 % 0.8 %sales Weightedaverage number of sharesoutstanding:Class A commonshares - basic 2,145 2,145 2,145 2,145 and dilutedClass B commonshares - basic 10,237 10,178 10,220 10,151 and diluted Net earningsper common share:Class A commonshares - basic $ 0.61 $ 0.43 $ 0.85 $ 0.13 and dilutedClass B commonshares - basic $ 0.64 $ 0.46 $ 0.91 $ 0.15 and diluted

(1) The supplementary information included in this press release for 2021 ispreliminary and subject to change prior to the filing of our upcoming QuarterlyReport on Form 10-Q with the Securities and Exchange Commission.(2)During the fourth quarter of 2020,the Company changed its financialstatement presentation related to gain/loss on its SERP investments. Thesegains/losses were previously included within cost of sales and selling, generaland administrative expense. For the three and six months ended June 30, 2020presented 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 andselling, general and administrative expense and are now included within otherincome/expense, net.

Bel Fuse Inc.Supplementary Information(1)Condensed Consolidated Balance Sheets(in thousands, unaudited)

June 30, December 31, 2021 2020Assets 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, 90,833 89,755 netOther 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' $ 473,879 $ 453,866 equity

(1) The supplementary information included in this press release for 2021 ispreliminary and subject to change prior to the filing of our upcoming QuarterlyReport 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 (1,853 ) 423 (854 ) (349 )income taxesDepreciation and 4,267 4,108 8,478 8,234 amortizationEBITDA $ 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 - - (6,175 ) - propertyRestructuring 277 44 277 172 chargesAcquisition-related 317 - 483 186 costs 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 ispreliminary and subject to change prior to the filing of our upcoming QuarterlyReport on Form 10-Q with the Securities and Exchange Commission.(2) In this press release and supplemental information, we have includedNon-GAAP financial measures, including Non-GAAP net earnings, Non-GAAP EPS,EBITDA and Adjusted EBITDA. We present results adjusted to exclude the effectsof certain specified items and their related tax impact that would otherwise beincluded under GAAP, to aid in comparisons with other periods. We may useNon-GAAP financial measures to determine performance-based compensation andmanagement 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 Earnings Benefit Earnings ProvisionReconciling Items before from Net Class A Class B before for Net Class A Class B taxes income earnings EPS(3) EPS(3) taxes income earnings EPS(3) EPS(3) taxes taxes GAAP measures $ 6,027 $ (1,853 ) $ 7,880 $ 0.61 $ 0.64 $ 5,996 $ 423 $ 5,573 $ 0.43 $ 0.46Items included in SG&A expenses:Acquisition-related 317 73 244 0.02 0.02 - - - - -costsGain on sale of - - - - - - - - - -propertyRestructuring 277 40 237 0.02 0.02 44 12 32 - -chargesNon-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 Earnings Benefit Earnings BenefitReconciling Items before from Net Class A Class B before from Net Class A Class B taxes income earnings EPS(3) EPS(3) taxes income earnings EPS(3) EPS(3) taxes taxes GAAP measures $ 10,226 $ (854 ) $ 11,080 $ 0.85 $ 0.91 $ 1,420 $ (349 ) $ 1,769 $ 0.13 $ 0.15Items included in SG&A expenses:Acquisition-related 483 111 372 0.03 0.03 186 43 143 0.01 0.01costsGain on sale of (6,175 ) - (6,175 ) (0.48 ) (0.50 ) - - - - -propertyRestructuring 277 40 237 0.02 0.02 172 40 132 0.01 0.01chargesNon-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 ispreliminary and subject to change prior to the filing of our upcoming QuarterlyReport on Form 10-Q with the Securities and Exchange Commission.(2) In this press release and supplemental information, we have includedNon-GAAP financial measures, including Non-GAAP net earnings, Non-GAAP EPS,EBITDA and Adjusted EBITDA. We present results adjusted to exclude the effectsof certain specified items and their related tax impact that would otherwise beincluded under GAAP, to aid in comparisons with other periods. We may useNon-GAAP financial measures to determine performance-based compensation andmanagement believes that this information may be useful to investors.(3) Individual amounts of earnings per share may not agree to the total due torounding.



Investor Contact: Company Contact:Darrow Associates Lynn Hutkintel 516.419.9915 Director of Financial Reportingpseltzberg@darrowir.com ir@belf.com