Bel Fuse (BELFB) - 2024 Q2 - Quarterly Results

Acquisition Details - Bel Fuse Inc. acquires an 80% stake in Enercon Technologies for $320 million in cash, with potential earnout payments of up to$ 10 million for 2025-2026, and plans to acquire the remaining 20% by early 2027[1] - The transaction is expected to be completed by the end of 2024, subject to customary closing conditions and regulatory approvals[2] - Bel will finance the acquisition through a combination of cash on hand and an expansion of its existing credit facility[4] Financial Impact and Margins - The acquisition expands Bel's exposure to the aerospace and defense end market from 17.5% to 31% of total revenue based on LTM Q2 2024[2] - Enercon's gross margin is 46.0% and Adjusted EBITDA margin is 32.5% for LTM Q2 2024, which is ahead of Bel's historical margin profile[2] - The transaction is expected to be accretive to Bel's GAAP EPS within one-year post-close and to Bel's non-GAAP EPS on Day 1[2] - Bel's Power segment revenue from aerospace and defense end markets will increase to 30%, and approximately 37% of consolidated Bel revenue will support these markets[3] - Enercon's LTM Q2 2024 sales are $111 million with a gross profit margin of 46%[5] - Bel expects net leverage to be under 2.0x within one quarter from close as T-bills mature[2] Operational Expansion - The acquisition will expand Bel's manufacturing footprint into India and the U.S., and add new manufacturing capabilities and engineers in Israel[2] Financial Performance (Bel Fuse Inc.) - GAAP Net sales for the trailing 12-month period ended June 30, 2024, were$ 559.987 million[16] - GAAP Net earnings for the trailing 12-month period ended June 30, 2024, were $66.164 million[16] - EBITDA for the trailing 12-month period ended June 30, 2024, was$ 96.176 million, representing 17.2% of net sales[16] - Adjusted EBITDA for the trailing 12-month period ended June 30, 2024, was $105.750 million, representing 18.9% of net sales[16] - Restructuring charges for the trailing 12-month period ended June 30, 2024, were$ 6.602 million[16] Financial Performance (Enercon Technologies) - Enercon's GAAP Net sales for the period ended 2024 were $110.684 million[16] - Enercon's GAAP Net earnings for the period ended 2024 were$ 24.587 million[16] - Enercon's EBITDA for the period ended 2024 was $35.922 million, representing 32.5% of net sales[16] - Enercon's forecasted GAAP Net sales for the full year 2024 are$ 120 million[16] - Enercon's forecasted EBITDA for the full year 2024 is $38.489 million, representing 32.1% of net sales[16]