JERSEY CITY, N.J., Feb. 18, 2021 (GLOBE NEWSWIRE) -- Bel Fuse Inc. (Nasdaq: BELFA and BELFB) today announced preliminary financial results for the fourth quarter and full year of 2020.
Fourth Quarter 2020 Highlights
| • | Net sales of $116.1 million, up 0.9% from Q4-19 despite COVID-related challenges |
| • | Gross profit margin of 25.3%, up from 21.1% in Q4-19 led by improvement in Power Solutions and Protection product group margins |
| • | Net earnings of $3.6 million versus a net loss of $(6.4) million in Q4-19 |
| • | Adjusted EBITDA of $7.8 million, representing an increase of 157% compared to Q4-19 |
| • | Realized $1.4 million of cost savings during Q4-20 under global cost reduction program |
| • | Net sales of $465.8 million, down 5.4% from 2019 largely driven by an $18.8 million, or 60%, decline in commercial aerospace sales and COVID-related challenges |
| • | Gross profit margin of 25.7%, up from 22.3% in 2019, driven by strong performance across all segments |
| • | Global cost reduction program resulting in $6.1 million of savings during 2020 |
| • | Net earnings of $12.8 million versus a net loss of $(8.7) million in 2019 |
| • | Adjusted EBITDA of $32.3 million, an improvement of over 24% from 2019 |
| • | Ended year with $32.9 million in net debt, a 55% decline as compared to the 2019 year-end level |
| • | Announced two acquisitions in January 2021 (rms Connectors and EOS) for a combined purchase price of $15.5 million, financed through cash and lines of credit with our banks |
| • | Appointment of Farouq Tuweiq as Chief Financial Officer effective February 15, 2021 |
Non-GAAP financial measures, such as Non-GAAP net earnings, Non-GAAP EPS, EBITDA and Adjusted EBITDA, exclude a gain on sale of property, costs associated with ERP system implementation costs, restructuring charges, the impact of a non-cash goodwill impairment charge, and non-cash charges associated with the liquidation of foreign subsidiaries. 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.
CEO Comments
Daniel Bernstein, President and CEO, said, "We are pleased to report another quarter of improved profitability versus what was experienced in 2019. Our fourth quarter sales, while only marginally higher than in the fourth quarter of 2019, gave us margin benefits from a stronger mix of product, enabling a $5 million increase in gross profit on a $1 million increase in sales. The Power Solutions and Protection group benefited from a full quarter of CUI sales and steady growth within e-mobility during the 2020 period, coupled with the elimination of low-margin power products from our portfolio. Military sales grew by 60% from fourth quarter 2019, mitigating the impact of lower demand from our commercial aerospace products during the 2020 quarter. While sales of our Magnetic Solution products were down 22% in the fourth quarter of 2020 as compared to the 2019 quarter, we saw a rebound in bookings for this group in the fourth quarter of 2020, a strong indicator for potential rebound in the near term.
"On the cost side, Bel's continued dedication to and successful execution of its global cost reduction program has resulted in a streamlined organization and leaves the Company well-positioned for further margin expansion once overall sales rebound. During the fourth quarter, we sold our Switzerland facility at a gain of $1.9 million. This facility closure and other actions implemented by the end of 2020 are expected to result in $4.4 million of cost savings in 2021, which will be incremental to the $6.1 million that we have already successfully taken out of our ongoing cost structure during the past year. We are proud of the margin progress we’ve made, and still believe there is more benefit to come as demand in many of our markets continues to recover.
"In January 2021, Bel announced two acquisitions that are strategic to our future growth plans. The acquisition of rms Connectors enabled us to increase our market share within the commercial aerospace end market, and we anticipate rms to be accretive to Bel's EBITDA by June 2021 as operations transition to a nearby Bel facility. The acquisition of EOS Power, expected to close late in the first quarter, will broaden Bel's power product portfolio with industrial and medical products. Importantly, this acquisition will extend our manufacturing footprint outside of China with a turnkey operation and will provide access to the fast-growing India market for all of Bel's products. These two acquisitions, which were executed at favorable valuations for us, fit squarely into Bel's growth strategy by increasing market share while diversifying our product portfolios and geographic footprint.
"Visibility continues to be limited as a result of COVID and long lead times for semiconductors and certain components and these factors may affect our organic growth for 2021. We believe, however, that the incremental contribution from the two new acquisitions coupled with continued actions under our global cost savings initiative will bode well for further profitability in the coming year," concluded Mr. Bernstein.
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, 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.
