Core Insights - Bel Fuse reported revenue of $152.24 million for the quarter ended March 2025, reflecting an 18.9% increase year-over-year [1] - The company's EPS was $1.35, up from $1.26 in the same quarter last year, exceeding the consensus EPS estimate of $1.05 by 28.57% [1] - Revenue surpassed the Zacks Consensus Estimate of $148.3 million, resulting in a surprise of 2.66% [1] Financial Performance Metrics - Connectivity Solutions sales were $50.73 million, below the average estimate of $55.25 million from two analysts [4] - Power Solutions and Protection sales reached $83.05 million, exceeding the average estimate of $78.31 million from two analysts [4] - Magnetic Solutions sales amounted to $18.45 million, surpassing the estimated $16.42 million from two analysts [4] Stock Performance - Bel Fuse shares have declined by 12.2% over the past month, compared to a 5.1% decline in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Company Performance - Bel Fuse reported quarterly earnings of $1.35 per share, exceeding the Zacks Consensus Estimate of $1.05 per share, and up from $1.26 per share a year ago, representing an earnings surprise of 28.57% [1] - The company posted revenues of $152.24 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.66%, compared to $128.09 million in the same quarter last year [2] - Over the last four quarters, Bel Fuse has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Stock Performance - Bel Fuse shares have declined approximately 17.6% since the beginning of the year, while the S&P 500 has decreased by 8.6% [3] - The current consensus EPS estimate for the upcoming quarter is $1.55 on revenues of $166.04 million, and for the current fiscal year, it is $6 on revenues of $645.18 million [7] Industry Outlook - The Electronics - Miscellaneous Products industry, to which Bel Fuse belongs, is currently ranked in the bottom 40% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Bel Fuse's stock performance [5][6]

Financial Performance - Net sales for Q1 2025 were $152.2 million, an increase from $128.1 million in Q1 2024, with organic sales down 6.4% excluding $32.4 million from Enercon[8] - Gross profit margin improved to 38.6%, up from 37.5% in Q1 2024[8] - GAAP net earnings attributable to Bel shareholders were $17.9 million, compared to $15.9 million in Q1 2024[8] - Non-GAAP net earnings attributable to Bel shareholders were $16.8 million, slightly down from $17.0 million in Q1 2024[8] - Adjusted EBITDA was $30.9 million, representing 20.3% of sales, compared to $22.4 million or 17.5% of sales in Q1 2024[8] - Operating income increased by 40.1% to $25,023 thousand, representing 16.4% of net sales, compared to $17,854 thousand or 13.9% in the prior year[19] - Net earnings attributable to Bel Fuse shareholders reached $17,874 thousand, a 12.6% increase from $15,874 thousand in Q1 2024[19] - Adjusted EBITDA for Q1 2025 was $30,911 thousand, up from $22,407 thousand, with a margin of 20.3%[29] - The earnings per share (EPS) for Class A shareholders was $1.36 for Q1 2025, up from $1.19 in Q1 2024, marking a 14% increase[34] Sales and Market Trends - Projected GAAP net sales for Q2 2025 are expected to be between $145 million and $155 million, with a gross margin of 37% to 39%[5] - Approximately 75% of global sales are not currently subject to recent U.S. tariffs, with about 10% of consolidated sales related to products manufactured in China[5] - The company anticipates continued strength in defense, space, and AI end markets throughout the year[4] - Power Solutions and Protection segment sales grew by 37.9% to $83,054 thousand, while Connectivity Solutions saw a decline of 6.5% to $50,730 thousand[26] Costs and Expenses - Research and development costs rose to $7,222 thousand, up from $5,215 thousand, reflecting a focus on innovation[19] - The company reported a restructuring charge of $2,933,000 in Q1 2025, compared to $371,000 in Q1 2024, indicating a significant increase in restructuring activities[34] - Unrealized foreign currency exchange losses amounted to $3,663,000 in Q1 2025, compared to losses of $868,000 in Q1 2024, highlighting increased volatility in foreign exchange[34] Financial Position - Total current assets decreased slightly to $368,425 thousand from $373,530 thousand year-over-year[22] - Long-term debt decreased to $280,000 thousand from $287,500 thousand, indicating improved financial stability[22] - The effective tax rate increased to 23.0% in Q1 2025 from 22.0% in Q1 2024[19] Non-GAAP Measures - Non-GAAP measures for Q1 2025 showed total earnings of $23,012,000, a decrease from $21,716,000 in Q1 2024, reflecting a 6% decline[34] - The company has revised its definitions of Non-GAAP measures to exclude stock-based compensation and amortization of intangibles, enhancing clarity in operational performance[37] - The company plans to continue utilizing non-GAAP measures for performance comparison and incentive compensation determination[40] Leadership Changes - Farouq Tuweiq has been appointed as Bel's President and CEO, effective immediately after the Annual Meeting of Shareholders in May 2025[8] Additional Information - The supplementary information for Q1 2025 is preliminary and subject to change prior to the filing of the Quarterly Report on Form 10-Q[38]

Core Viewpoint - Bel Fuse Inc. is set to release preliminary financial results for the first quarter on April 24, 2025, with a conference call scheduled for April 25, 2025 [1] Company Overview - Bel Fuse Inc. designs, manufactures, and markets a wide range of products that power, protect, and connect electronic circuits [2] - The company's products are utilized in various industries including defense, commercial aerospace, networking, telecommunications, computing, general industrial, high-speed data transmission, transportation, and eMobility [2] - Bel's product categories include Power Solutions and Protection, Connectivity Solutions, and Magnetic Solutions, with operations in facilities worldwide [2]

Core Insights - Bel Fuse Inc. has opened a new facility in Manesar, Gurugram, India, marking a significant milestone following its acquisition of Enercon in November 2024 [1][2] - The new facility will double the manufacturing capacity of Bel's Power Solutions and Protection segment in India, enhancing the company's manufacturing footprint outside of China [1][2] - The original Enercon factory, which opened in 2018, has grown from 17 associates to over 200 associates, indicating substantial growth in workforce and operations [1] Company Overview - Bel Fuse Inc. designs, manufactures, and markets a wide range of products that power, protect, and connect electronic circuits, serving various industries including defense, commercial aerospace, telecommunications, and eMobility [3] - The company's product groups include Power Solutions and Protection, Connectivity Solutions, and Magnetic Solutions, with applications in automotive, medical, broadcasting, and consumer electronics markets [3]

Part I [Business Overview](index=5&type=section&id=Item%201.%20Business) Bel Fuse Inc. designs, manufactures, and markets products that power, protect, and connect electronic circuits across various industries, including defense, aerospace, networking, and eMobility - The company operates through three product groups: Power Solutions & Protection, Connectivity Solutions, and Magnetic Solutions[20](index=20&type=chunk)[29](index=29&type=chunk) Net Sales by Product Group (2024) | Product Group | Percentage of Net Sales | | :--- | :--- | | Power Solutions & Protection | 46% | | Connectivity Solutions | 41% | | Magnetic Solutions | 13% | - On November 14, 2024, Bel acquired an **80% stake in Enercon Technologies, Ltd.**, a supplier for aerospace and defense markets, for approximately **$325.6 million**; Bel intends to purchase the remaining 20% by early 2027[25](index=25&type=chunk) - On February 3, 2025, the company announced that CEO Daniel Bernstein will step down after the 2025 Annual Meeting, to be succeeded by Farouq Tuweiq, with Mr. Bernstein expected to become Non-Executive Chairman[23](index=23&type=chunk) [Products](index=6&type=section&id=1.1%20Products) Bel offers a diverse product portfolio categorized into three groups: Power Solutions and Protection, Connectivity Solutions, and Magnetic Solutions - Power Solutions and Protection products (**46% of 2024 net sales**) are used in aerospace, defense, servers, networking, and transportation[29](index=29&type=chunk)[30](index=30&type=chunk) - Connectivity Solutions products (**41% of 2024 net sales**) serve markets like commercial aerospace, military communications, and network infrastructure[29](index=29&type=chunk)[32](index=32&type=chunk) - Magnetic Solutions products (**13% of 2024 net sales**) are primarily used in network switches, routers, and Power over Ethernet (PoE) applications[29](index=29&type=chunk)[34](index=34&type=chunk) [Market Factors](index=8&type=section&id=1.2%20Market%20Factors) Product orders decreased by 7% to $416.8 million in 2024, driven by declines in Power and Magnetic solutions, while the order backlog increased to $388.1 million due to the Enercon acquisition Product Order Trends (2024 vs 2023) | Product Group | 2024 Orders (millions) | Change vs 2023 | | :--- | :--- | :--- | | Power Solutions & Protection | $139.7 | -24% | | Connectivity Solutions | $212.1 | -1% | | Magnetic Solutions | $65.0 | -24% | | **Total** | **$416.8** | **-7%** | - The order backlog was **$388.1 million** as of Jan 31, 2025, compared to $358.3 million a year prior; the 2025 backlog includes **$132.5 million** from the newly acquired Enercon[42](index=42&type=chunk) - Management estimates that approximately **80%-85%** of the January 31, 2025 backlog will be shipped by the end of 2025[42](index=42&type=chunk) [Human Capital and ESG](index=9&type=section&id=1.3%20Human%20Capital%20and%20ESG) Bel employed approximately 5,370 associates globally in 2024, focusing on employee development and ESG initiatives overseen by the Board's Nominating and ESG Committee - The company employed approximately **5,370 associates** as of December 31, 2024, with **31.0%** located in North America[54](index=54&type=chunk) - The Board's Nominating and ESG Committee provides oversight for ESG matters; five of its 22 manufacturing facilities are ISO 14001 certified, representing **63% of its manufacturing footprint**[62](index=62&type=chunk)[64](index=64&type=chunk) - In 2024, the company's charitable program resulted in contributions of **$168,975**, and employees volunteered **6,007 hours**, a significant increase from 3,181 hours in 2023[66](index=66&type=chunk) [Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including intense competition, acquisition integration challenges, dependence on new products, operational risks from PRC and Israel manufacturing, and financial risks from costs, tariffs, and debt - A key risk is the potential for unanticipated difficulties in integrating the recently acquired **80%-owned Enercon subsidiary** and the risk that the intended acquisition of the remaining 20% is not completed[75](index=75&type=chunk)[76](index=76&type=chunk) - The company has substantial manufacturing operations in the PRC, with **41% of associates** and **62% of manufacturing facility square footage** located there, exposing it to significant political, economic, and regulatory risks[89](index=89&type=chunk) - Following the Enercon acquisition, the company faces risks related to political, economic, and military conditions in Israel, where Enercon is based and has approximately **300 employees**[95](index=95&type=chunk)[96](index=96&type=chunk) - Changes in trade policies and tariffs, particularly concerning the PRC and Mexico, pose a material risk; approximately **12-13% of sales** relate to products shipped from the PRC to the U.S., and **4% from Mexico to the U.S.**[103](index=103&type=chunk) - The company's consolidated outstanding indebtedness was **$287.5 million** at year-end 2024, resulting in a **Leverage Ratio of 2.1x**, which exposes it to risks in the event of business downturns[112](index=112&type=chunk) [Cybersecurity](index=21&type=section&id=Item%201C.%20Cybersecurity) Bel manages cybersecurity through a full-time expert and third-party specialists, with oversight from the Audit Committee, investing in layered defenses and training - The company employs a full-time Cybersecurity Expert and works with third-party specialists to enhance its security programs[135](index=135&type=chunk) - The Audit Committee of the Board of Directors is responsible for overseeing cybersecurity risks and receives quarterly updates[136](index=136&type=chunk) [Properties](index=22&type=section&id=Item%202.%20Properties) Bel's headquarters are in West Orange, NJ, with manufacturing facilities across 8 countries, totaling 2.3 million square feet, primarily in the PRC, with 14% owned Principal Manufacturing Locations (as of Dec 31, 2024) | Location | Approx. Square Feet | Product Group(s) | | :--- | :--- | :--- | | Dongguan, PRC | 661,000 | Magnetic Solutions | | Shenzhen, PRC | 227,000 | Power Solutions & Protection | | Zhongshan, PRC | 349,000 | All three product groups | | Guangxi, PRC | 243,000 | Magnetic Solutions | | Waseca, Minnesota | 128,000 | Connectivity Solutions | | Reynosa, Mexico | 88,000 | Connectivity Solutions | - Approximately **14% of the 2.3 million square feet** of manufacturing space is owned, with the rest being leased[139](index=139&type=chunk) [Legal Proceedings](index=22&type=section&id=Item%203.%20Legal%20Proceedings) Bel is involved in several legal actions, including a patent infringement lawsuit against Monolithic Power Systems and ongoing tax and customs claims related to past acquisitions, for which it is indemnified - In a patent infringement lawsuit against Monolithic Power Systems, the court granted a motion for summary judgment in favor of the defendant; Bel is evaluating an appeal[426](index=426&type=chunk) - An ongoing tax claim in Italy related to the 2014 ABB acquisition has an estimated liability of **$12.0 million**, for which Bel is fully indemnified by ABB[427](index=427&type=chunk) Part II [Common Stock and Shareholder Matters](index=23&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Bel's Class A (BELFA) and Class B (BELFB) common stocks trade on NASDAQ, with $3.5 million in dividends paid in 2024 and a $25.0 million share repurchase program authorized, of which $16.0 million has been utilized - Quarterly dividends in 2024 were **$0.06 per Class A share** and **$0.07 per Class B share**, totaling **$3.5 million** for the year[146](index=146&type=chunk) - A **$25.0 million share repurchase program** was authorized in February 2024; as of year-end, **$16.0 million** in shares had been repurchased ($1.9M Class A, $14.1M Class B)[153](index=153&type=chunk) - Approximately **$9.0 million** remains available for repurchase under the current program ($2.1M for Class A and $6.9M for Class B)[153](index=153&type=chunk) [Management's Discussion and Analysis (MD&A)](index=25&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2024, revenues decreased 16.4% to $534.8 million due to customer destocking, while gross margin improved to 37.8% from the Enercon acquisition and favorable mix, despite lower operating income Financial Performance (2024 vs. 2023) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $534.8M | $639.8M | -16.4% | | Gross Profit | $202.4M | $215.8M | -6.2% | | Gross Margin | 37.8% | 33.7% | +4.1 p.p. | | Income from Operations | $64.3M | $88.0M | -27.0% | | Net Earnings | $49.2M | $73.8M | -33.3% | - The year-end backlog at Dec 31, 2024, was **$381.6 million**, a **2% decrease** from the prior year; excluding the **$119 million backlog** from the newly acquired Enercon, the legacy business backlog saw a significant decline[160](index=160&type=chunk) - SG&A expenses increased to **$110.6 million** in 2024 from $99.1 million in 2023, primarily due to **$10.9 million in acquisition-related costs** for Enercon[176](index=176&type=chunk) [Results of Operations by Segment](index=27&type=section&id=7.1%20Results%20of%20Operations%20by%20Segment) In 2024, Power Solutions sales fell due to lower demand, Connectivity Solutions grew from aerospace and military markets, and Magnetic Solutions sales dropped from reduced networking demand, with margins improving across segments Segment Sales and Gross Margin (2024 vs. 2023) | Segment | 2024 Sales (M) | 2023 Sales (M) | % Change | 2024 GM | 2023 GM | | :--- | :--- | :--- | :--- | :--- | :--- | | Power Solutions & Protection | $245.6 | $314.1 | -21.8% | 42.4% | 38.1% | | Connectivity Solutions | $220.4 | $210.6 | +4.7% | 37.1% | 34.2% | | Magnetic Solutions | $68.9 | $115.1 | -40.2% | 25.3% | 22.0% | - The Enercon acquisition contributed **$20.8 million** to Power Solutions sales in the last two months of 2024[164](index=164&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=7.2%20Liquidity%20and%20Capital%20Resources) Cash decreased by $21.1 million in 2024 to $68.3 million, primarily due to the $320.5 million Enercon acquisition funded by new debt, increasing total debt to $287.5 million - Cash and cash equivalents decreased by **$21.1 million** to **$68.3 million** at year-end 2024[193](index=193&type=chunk) - The Enercon acquisition was a major cash use (**$320.5M**), funded by proceeds from long-term debt (**$242.5M**) and cash on hand[193](index=193&type=chunk) - The company had **$287.5 million** outstanding under its revolving credit facility at Dec 31, 2024, with **$37.5 million** of unused credit available[197](index=197&type=chunk)[208](index=208&type=chunk) - At Dec 31, 2024, the company had purchase obligations for raw materials of **$82.2 million** and for capital expenditures of **$4.7 million**[199](index=199&type=chunk) [Critical Accounting Estimates](index=33&type=section&id=7.3%20Critical%20Accounting%20Estimates) Critical accounting estimates include business combination valuations, inventory obsolescence reserves, goodwill impairment testing, and pension benefit obligations, all requiring significant management judgment - Key critical accounting estimates include business combinations, inventory valuation, goodwill and other indefinite-lived intangible assets, and pension benefit obligations[211](index=211&type=chunk) - Reserves for excess or obsolete inventory were **$14.5 million** as of December 31, 2024[213](index=213&type=chunk) - The annual goodwill impairment test as of October 1, 2024, showed that the fair value of each reporting unit exceeded its carrying value by a large margin, ranging from **44% to 500%**[221](index=221&type=chunk) [Financial Statements and Supplementary Data](index=36&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) Consolidated financial statements for 2024 show total assets increased to $949.8 million and liabilities to $508.6 million due to the Enercon acquisition, with net sales of $534.8 million and net income of $41.0 million Consolidated Financial Highlights (as of Dec 31) | Metric (in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | **Balance Sheet:** | | | | Total Current Assets | $373,530 | $381,478 | | Total Assets | $949,789 | $571,631 | | Total Current Liabilities | $128,069 | $110,609 | | Long-Term Debt | $287,500 | $60,000 | | Total Liabilities | $508,627 | $231,073 | | Total Stockholders' Equity | $360,576 | $340,558 | Consolidated Statement of Operations (Year Ended Dec 31) | Metric (in thousands) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net Sales | $534,792 | $639,813 | $654,233 | | Gross Profit | $202,358 | $215,849 | $183,453 | | Income from Operations | $64,297 | $87,976 | $65,147 | | Net Earnings Attributable to Bel | $40,960 | $73,831 | $52,689 | Consolidated Cash Flow Summary (Year Ended Dec 31) | Metric (in thousands) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | $74,064 | $108,349 | $40,257 | | Net Cash from Investing Activities | ($297,893) | ($53,535) | ($6,999) | | Net Cash from Financing Activities | $206,258 | ($38,597) | ($21,262) | | Net Change in Cash | ($21,118) | $19,105 | $8,510 | [Controls and Procedures](index=73&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal controls over financial reporting were effective as of December 31, 2024, excluding the newly acquired Enercon subsidiary from the internal control assessment - Management concluded that disclosure controls and procedures were effective as of December 31, 2024[439](index=439&type=chunk) - Management's assessment of internal control over financial reporting excluded the newly acquired Enercon subsidiary; Enercon constituted **15.9% of consolidated total assets** and **3.9% of consolidated net sales** for 2024[441](index=441&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=74&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2025 proxy statement, with the company maintaining a code of ethics and insider trading policy - Detailed information for this section is incorporated by reference from the forthcoming 2025 Proxy Statement[448](index=448&type=chunk) - The company has adopted a code of ethics and an insider trading policy, both of which are available to the public[449](index=449&type=chunk)[451](index=451&type=chunk) [Executive Compensation](index=74&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's definitive proxy statement for its 2025 annual meeting - Detailed information for this section is incorporated by reference from the forthcoming 2025 Proxy Statement[452](index=452&type=chunk) [Security Ownership and Related Matters](index=74&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information is incorporated by reference from the 2025 proxy statement; as of December 31, 2024, no outstanding options existed under equity plans, with 473,764 securities available for future issuance Equity Compensation Plan Information (as of Dec 31, 2024) | Plan Category | Securities to be Issued Upon Exercise | Securities Available for Future Issuance | | :--- | :--- | :--- | | Approved by security holders | 0 | 473,764 | | Not approved by security holders | 0 | 0 | | **Total** | **0** | **473,764** |

Financial Data and Key Metrics Changes - In Q4 2024, sales reached $149.9 million, up from $140 million in Q4 2023. Full-year 2024 sales totaled $535 million, down from $640 million in 2023 [35] - Gross margin improved to 37.5% in Q4 2024 from 36.6% in Q4 2023, with a full-year increase of 410 basis points compared to 2023 [36] - Selling, general, and administrative (SG&A) expenses for Q4 2024 were $34.8 million, up 9.9% from $24.9 million in Q4 2023 [47] Business Line Data and Key Metrics Changes - Power solutions and protection products sales in Q4 2024 were $78.1 million, a 13.2% increase from Q4 2023, primarily due to Enercon's contribution of $20.8 million [37] - Connectivity solutions group sales were $52.5 million in Q4 2024, a 4% increase compared to Q4 2023, with full-year sales reaching $220 million, up almost 5% from 2023 [40] - Magnetic solutions group sales declined by 6% from Q4 2023 to $19.2 million, resulting in full-year sales of $58.9 million compared to $115 million in 2023 [44] Market Data and Key Metrics Changes - The consumer end market continues to struggle, with expectations of persistent challenges through much of 2025 due to prior trade restrictions on a supplier in China [23] - Distribution, networking, and industrial markets are showing signs of recovery, with expectations for improvement in 2025 compared to 2024 [23] Company Strategy and Development Direction - The company is focused on future growth and improved cost controls, with successful facility consolidations leading to significant cost savings [9][12] - The acquisition of Enercon is expected to enhance the company's position in mission-critical components for harsh environments, with anticipated revenue growth from this segment [10][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, citing favorable trends in AI, defense, and space as potential growth areas [21] - The company expects to see improvements in various markets, with magnetics anticipated to be the largest percentage grower [29] Other Important Information - The company closed the year with $69 million in cash and securities, down from $127 million at the end of 2023, primarily due to the Enercon acquisition [49] - The outstanding debt increased to $287.5 million, largely due to new borrowings related to the Enercon acquisition [50] Q&A Session Summary Question: Can you connect the dots from third-quarter orders momentum for PSP and Magnetics? - Management noted that Magnetics is seasonal, with Q2 and Q3 being the strongest quarters, while Power saw robust pull-ins due to anticipated tariffs [62] Question: What is the outlook for PSP in 2025? - Management indicated a flattish outlook for PSP, impacted by the Chinese supplier and pull-ins in Q4 2024 [66] Question: How much of the Q1 sales guide is attributable to Enercon? - Management stated that PSP would be down year-over-year in Q1 2025, with Enercon being additive to the overall sales [72] Question: What are the cross-selling opportunities with Enercon? - Management expects limited cross-selling opportunities in 2025 due to the slow-moving nature of the defense sector [74] Question: What is the impact of AI on revenue? - AI is expected to significantly benefit the power group, with an estimated $7 million in revenue from AI applications in 2024 [101] Question: What is the status of destocking at major distributors? - Management reported that a major distributor indicated they hit bottom in January, with expectations for improvement [103] Question: How are global tariffs impacting the business? - Approximately 12% to 13% of 2024 revenue was subject to tariffs, with ongoing efforts to manage costs and pass on increases to customers [130] Question: What is the M&A capacity post-Enercon acquisition? - Management remains open to selective M&A opportunities, focusing on quality and size [135]

Core Insights - Bel Fuse reported revenue of $149.86 million for the quarter ended December 2024, marking a year-over-year increase of 7% [1] - The EPS for the same period was -$0.14, a significant decline from $1.37 a year ago, indicating a negative EPS surprise of -118.18% compared to the consensus estimate of $0.77 [1] - The reported revenue exceeded the Zacks Consensus Estimate of $133.3 million by 12.42% [1] Financial Performance Metrics - Sales in Connectivity Solutions reached $52.55 million, slightly above the estimated $52.30 million [4] - Sales in Power Solutions and Protection were reported at $78.07 million, significantly higher than the average estimate of $59.97 million [4] - Sales in Magnetic Solutions totaled $19.24 million, falling short of the estimated $21.12 million [4] Stock Performance - Bel Fuse shares have returned +2.9% over the past month, compared to a +4.7% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Company Performance - Bel Fuse reported a quarterly loss of $0.14 per share, significantly below the Zacks Consensus Estimate of $0.77, and a decline from earnings of $1.37 per share a year ago, representing an earnings surprise of -118.18% [1] - The company posted revenues of $149.86 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 12.42%, and an increase from year-ago revenues of $140.01 million [2] - Over the last four quarters, Bel Fuse has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] Stock Outlook - The immediate price movement of Bel Fuse's stock will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - Bel Fuse shares have underperformed the market, losing about 0.2% since the beginning of the year compared to the S&P 500's gain of 4% [3] - The current consensus EPS estimate for the coming quarter is $1 on $152 million in revenues, and $5.65 on $654 million in revenues for the current fiscal year [7] Industry Context - The Zacks Industry Rank for Electronics - Miscellaneous Products is currently in the bottom 45% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor decisions [5]

Financial Performance - Net sales for the full year 2024 were $534.8 million, down 19.7% from $639.8 million in 2023, excluding Enercon's contribution[3] - In Q4 2024, net sales were $149.9 million, an increase from $140.0 million in Q4 2023, but organic sales decreased by 7.8% when excluding Enercon's $20.8 million contribution[8] - GAAP net loss attributable to Bel shareholders in Q4 2024 was $1.8 million, compared to a net income of $12.0 million in Q4 2023[8] - Non-GAAP net earnings attributable to Bel shareholders for the full year 2024 were $72.1 million, down from $89.6 million in 2023[8] - Adjusted EBITDA for the full year 2024 was $101.9 million, representing 19.0% of sales, a decrease from $116.8 million or 18.3% of sales in 2023[8] - GAAP net sales for Q4 2024 were $149,859 thousand, an increase from $140,010 thousand in Q4 2023, while year-end GAAP net sales decreased to $534,792 thousand from $639,813 thousand[30] - Non-GAAP adjusted net sales for Q4 2024 were $149,859 thousand, compared to $139,585 thousand in Q4 2023, with year-end adjusted net sales at $534,735 thousand, up from $624,963 thousand[30] - GAAP net earnings for Q4 2024 were $6,432 thousand, down from $12,036 thousand in Q4 2023, and year-end net earnings decreased to $49,192 thousand from $73,831 thousand[30] - Non-GAAP operating income for Q4 2024 was $24,629 thousand, slightly up from $23,901 thousand in Q4 2023, while year-end non-GAAP operating income decreased to $85,417 thousand from $103,512 thousand[30] - Adjusted EBITDA for Q4 2024 was $30,327 thousand, compared to $27,251 thousand in Q4 2023, with year-end adjusted EBITDA at $101,874 thousand, down from $116,824 thousand[30] Market and Operational Developments - The acquisition of Enercon, completed in Q4 2024, is expected to enhance scale and diversity, making aerospace and defense Bel's largest end market[5] - The company initiated two facility consolidation projects in 2024 and hired a Global Head of Sales to enhance operational efficiencies and drive growth[5] - Management expressed optimism for 2025, anticipating a slow and steady rebound in demand from networking and distribution partners[6] Sales and Revenue Breakdown - Power Solutions and Protection sales decreased by 21.8% to $245,551 thousand in FY 2024 from $314,105 thousand in FY 2023[28] - Connectivity Solutions sales increased by 4.7% to $220,370 thousand in FY 2024 from $210,572 thousand in FY 2023[28] Tax and Financial Metrics - The effective tax rate for FY 2024 was 20.4%, up from 11.4% in FY 2023[20] - The provision for income taxes for Q4 2024 was $953 thousand, compared to $1,463 thousand in Q4 2023, reflecting a decrease in tax expenses[30] Assets and Liabilities - Total assets increased significantly to $949,789 thousand in 2024 from $571,631 thousand in 2023[22] - Cash and cash equivalents decreased to $68,253 thousand at the end of 2024 from $89,371 thousand at the end of 2023[24] - Total liabilities rose to $508,627 thousand in 2024, compared to $231,073 thousand in 2023[22] Costs and Expenses - Research and development costs increased to $6,934 thousand in Q4 2024, up from $5,966 thousand in Q4 2023[20] - Interest expense for Q4 2024 was $2,815 thousand, significantly higher than $448 thousand in Q4 2023, indicating increased borrowing costs[30] - Restructuring charges for Q4 2024 amounted to $1,669 thousand, down from $3,808 thousand in Q4 2023, while acquisition-related costs were $8,592 thousand in Q4 2024[30] - Restructuring charges for the year ended December 31, 2024, amounted to $3,459 million, compared to $10,114 million in 2023, a reduction of 65.8%[35] - Acquisition-related costs for the year ended December 31, 2024, were $12,884 million, while there were no such costs reported in 2023[35] Earnings Per Share and Non-GAAP Measures - The earnings per share (EPS) for the three months ended December 31, 2024, was $0.14, down from $0.90 in the same period of 2023, reflecting a decrease of 84.4%[35] - Non-GAAP measures for the year ended December 31, 2024, showed net earnings of $90,919 million, compared to $103,350 million in 2023, indicating a decline of 12.0%[36] - The EPS for the year ended December 31, 2024, was $5.47, down from $6.72 in 2023, a decrease of 18.6%[36] - The company has included Non-GAAP financial measures such as Non-GAAP adjusted net sales and Non-GAAP EPS to aid in comparisons with other periods[37] - The company modified its Non-GAAP financial measures to exclude stock-based compensation and amortization of intangibles, enhancing investor insight into operational performance[32] - The use of Non-GAAP measures is intended to provide additional insight into operational performance and assist in trend analysis and budgeting[37] Foreign Currency and Other Losses - Unrealized foreign currency exchange losses for the year ended December 31, 2024, were $1,455 million, compared to $831 million in 2023, indicating an increase of 75.0%[36] - The company reported a loss on liquidation of a foreign subsidiary amounting to $2,724 million for the year ended December 31, 2024, compared to $2,043 million in 2023, an increase of 33.4%[35] - The total revenue for the year ended December 31, 2024, was $61,808 million, a decrease from $73,831 million in 2023, representing a decline of 16.3%[35]