GlobeNewswire Inc | Oct 29, 2021 07:30AM EDT

October 29, 2021

JERSEY CITY, N.J., Oct. 29, 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 and operating results for the third quarter of 2021.

Third Quarter 2021 Highlights

? Net sales increased18.1%to$147.0 million from $124.5million in last year's third quarter? Gross profit margin of24.5%compared to26.8%in Q3-20 GAAP net earnings of $5.7million, or EPS of $0.44 per Class A share and? $0.47 per Class B share, versus GAAP net earnings of $7.5million in Q3-20, or EPS of $0.57per Class A share and$0.61per Class B share All-time record backlog of $390 million at September 30, 2021 represents? growth of over 100% from December 31, 2020; record quarterly bookings of $223 million, approximately 3x the order volume compared to Q3-20

Daniel Bernstein, President and CEO, said, Our increased backlog has continued to translate into sales as evidenced by three consecutive quarters of year-over-year sales growth. The sales growth in the third quarter was primarily driven by our Power Solutions and Magnetics segments across various end markets and product families, reinforcingour confidence in Bel's strategic diversification strategy. Our recent acquisitions of CUI, EOS and rms Connectors have continued to contribute substantially to our long-term growth. CUI achievedyear-over-year growth of 58% and Bel's original product line, fuses, had a record quarter with sales growth upover 50% from the third quarter of 2020. Strong end markets this quarter included electric vehicles, commercial air, and industrial. With almost $750 million in orders received in the last 12 months, we remain impacted by materialshortages and the worldwide logistics situationwhich we estimateimpacted our net salesby approximately $10 million this quarter. Margins continue to see pressure given the global increase in labor and materials costs; however, we continue to focus on internal initiatives to improve our margins.

As we head into the fourthquarter planning and take a reflective look on 2021 thus far, we remain strategically focused on assessing all parts of the organization to drive long-term value forour stakeholders. This includes a refresh of our growth and operating strategic plans, investing in our communities while minimizing our impact on the environment and continuing to promote disciplined capital allocation. As a 70+ year organization that thrives on learning and continuous improvement, Bel welcomes and embraces this journey, concluded Mr. Bernstein.

Non-GAAP financial measures included in this press release including those identified in the supplementary information included herewith, such as Non-GAAP net earnings, Non-GAAP EPS, EBITDA and Adjusted EBITDA, exclude the impact of acquisition-relatedcosts,restructuring charges, gain on sale of property and deferred financing costs. 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 code1310155 after 2:00 p.m. ET, also for 20 days.

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 StatementsNon-historical information contained in this press release (including our statements regarding expectations concerning backlog and sales, our diversification strategy, expectations concerning our long-term growth and the impact of acquisitions, the anticipated impacts on our business and the estimated effects on our operating results of the ongoing material shortages and worldwide logistics situation, internal initiatives to improve margins, our expectations, plans and intentions for fourth quarter and beyond, and with respect to our strategic focuses, strategic plans, community investment, environmental impact, and capital allocation) 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 fluctuations in foreign currency exchange rates and interest rates; 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 Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Net sales $ 146,966 $ 124,492 $ 396,351 $ 349,642 Cost of sales 110,992 91,183 301,234 259,286 (2)Gross profit 35,974 33,309 95,117 90,356 As a % of net 24.5 % 26.8 % 24.0 % 25.8 %sales Research anddevelopment 5,918 5,713 16,301 17,889 costsSelling,general and 21,188 19,368 64,757 59,140 administrativeexpenses(2)As a % of net 14.4 % 15.6 % 16.3 % 16.9 %salesRestructuring 398 111 675 283 chargesGain on sale (403 ) - (6,578 ) - of property Income from 8,873 8,117 19,962 13,044 operationsAs a % of net 6.0 % 6.5 % 5.0 % 3.7 %sales Interest (1,491 ) (1,242 ) (3,014 ) (3,843 )expenseOther income/expense, net (201 ) (483 ) 458 (1,390 )(2)Earningsbefore income 7,181 6,392 17,406 7,811 taxes Provision for(benefit from) 1,447 (1,083 ) 593 (1,433 )income taxesEffective tax 20.2 % -16.9 % 3.4 % -18.3 %rateNet earnings $ 5,734 $ 7,475 $ 16,813 $ 9,244 As a % of net 3.9 % 6.0 % 4.2 % 2.6 %sales Weightedaverage number of sharesoutstanding:Class A commonshares - basic 2,145 2,145 2,145 2,145 and dilutedClass B commonshares - basic 10,269 10,223 10,237 10,176 and diluted Net earningsper common share:Class A commonshares - basic $ 0.44 $ 0.57 $ 1.29 $ 0.70 and dilutedClass B commonshares - basic $ 0.47 $ 0.61 $ 1.37 $ 0.76 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 Quarterly Report 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,general and administrative expense. For the three and nine months ended September 30, 2020 presented above, a total of $0.7 million in gains and$0.2 million in gains, respectively, on SERP investments have beenreclassified from cost of sales and selling, general and administrativeexpense and are now included within other income/expense, net.

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

September 30, December 2021 31, 2020Assets Current assets: Cash and cash equivalents $ 61,961 $ 84,939 Accounts receivable, net 86,031 71,372 Inventories 128,179 100,133 Other current assets 39,374 23,772 Total current assets 315,545 280,216 Property, plant and equipment, net 35,553 34,501 Right-of-use assets 11,314 14,217 Goodwill and other intangible assets, net 88,544 89,755 Other assets 36,627 35,177 Total assets $ 487,583 $ 453,866 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 57,610 $ 39,774 Current portion of long-term debt - 5,286 Operating lease liability, current 5,623 6,591 Other current liabilities 43,003 35,885 Total current liabilities 106,236 87,536 Long-term debt 112,500 110,294 Operating lease liability, long-term 5,944 8,064 Other liabilities 62,701 62,173 Total liabilities 287,381 268,067 Stockholders' equity 200,202 185,799 Total liabilities and stockholders' $ 487,583 $ 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 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 Nine Months Ended September 30, September 30, 2021 2020 2021 2020 GAAP net earnings $ 5,734 $ 7,475 $ 16,813 $ 9,244 Interest expense 1,491 1,242 3,014 3,843 Provision for(benefit from) 1,447 (1,083 ) 593 (1,433 )income taxesDepreciation and 4,036 4,089 12,514 12,322 amortizationEBITDA $ 12,708 $ 11,723 $ 32,934 $ 23,976 % of net sales 8.6 % 9.4 % 8.3 % 6.9 % Unusual or special items:Gain on sale of (403 ) - (6,578 ) - propertyRestructuring 398 111 675 283 chargesAcquisition-related - - 483 186 costs Adjusted EBITDA $ 12,703 $ 11,834 $ 27,514 $ 24,445 % of net sales 8.6 % 9.5 % 6.9 % 7.0 %

(1) The supplementary information included in this press release for 2021 ispreliminary 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 includedNon-GAAP financial measures, including Non-GAAP net earnings, Non-GAAP EPS,EBITDA and Adjusted EBITDA. We present results adjusted to exclude theeffects 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-basedcompensation and management believes that this information may be useful toinvestors.

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 itemshad on the Company's net earnings per common Class A and Class B basic anddiluted shares ("EPS") and the line items in which these items were included inthe condensed consolidated statements of operations.

Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Earnings Provision Earnings BenefitReconciling before forincome Net Class A Class B before from Net Class A Class B Items taxes taxes earnings EPS(3) EPS(3) taxes income earnings EPS(3) EPS(3) taxes GAAP measures $ 7,181 $ 1,447 $ 5,734 $ 0.44 $ 0.47 $ 6,392 $ (1,083 ) $ 7,475 $ 0.57 $ 0.61 Gain on sale (403 ) - (403 ) (0.03 ) (0.03 ) - - - - - of propertyRestructuring 398 79 319 0.02 0.03 111 21 90 0.01 0.01 chargesWrite-off ofdeferred 820 189 631 0.05 0.05 - - - - - financingcostsNon-GAAP $ 7,996 $ 1,715 $ 6,281 $ 0.48 $ 0.51 $ 6,503 $ (1,062 ) $ 7,565 $ 0.58 $ 0.62 measures

Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Earnings Provision Earnings BenefitReconciling Items before for 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 $ 17,406 $ 593 $ 16,813 $ 1.29 $ 1.37 $ 7,811 $ (1,433 ) $ 9,244 $ 0.70 $ 0.76 Items included in SG&A expenses:Acquisition-related 483 111 372 0.03 0.03 186 43 143 0.01 0.01 costsGain on sale of (6,578 ) - (6,578 ) (0.51 ) (0.54 ) - - - - - propertyRestructuring 675 119 556 0.04 0.05 283 62 221 0.02 0.02 chargesWrite-off ofdeferred financing 820 189 631 0.05 0.05 - - - - - costsNon-GAAP measures $ 12,806 $ 1,012 $ 11,794 $ 0.90 $ 0.96 $ 8,280 $ (1,328 ) $ 9,608 $ 0.73 $ 0.79

(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:Bel Investor Relations Lynn Hutkinir@belf.com Director of Financial Reporting lynn.hutkin@belf.com