Revenue and Sales Performance - The company's revenues decreased by 105.0million,or16.4245.6 million in 2024, down from 314.1millionin2023,whilegrossmarginimprovedto42.49.8 million, or 4.7%, in 2024, driven by a 3.6millionincreaseincommercialaerospacesales[165]−MagneticSolutionssalesdeclinedby46.3 million in 2024, primarily due to reduced demand from networking customers[166] - Net sales for 2024 decreased to 534.792million,down16.4639.813 million in 2023[257] - Revenue from North America for 2024 was 362.2million,downfrom447.8 million in 2023, indicating a decrease of about 19.2%[328] - Revenue from direct sales to customers was 357.8millionin2024,downfrom439.3 million in 2023, a decline of about 18.5%[328] Financial Position and Assets - Total assets increased significantly to 949.789millionin2024,comparedto571.631 million in 2023, marking a growth of 66.1%[255] - The company had 68.3millionincashandcashequivalentsand1.0 million in held-to-maturity investments as of December 31, 2024, supporting its liquidity position[191] - The company had 287.5millionoutstandingunderitsrevolvingcreditfacilityasofDecember31,2024,withnomandatoryprincipalpaymentsduein2025[197]−Thetotalstockholders′equityincreasedto360.576 million in 2024, up from 340.558millionin2023,indicatingagrowthof5.9111.4 million in accounts receivable, net, for 2024, an increase from 84.1millionin2023,representingagrowthofapproximately32.43.5 million in restructuring costs in 2024, with annual cost savings from the Glen Rock initiative estimated at 3.1 million[162] - R&D expenses were 23.6 million in 2024, up from 22.5 million in 2023, primarily due to higher salaries and costs related to the Enercon acquisition[175] - SG&A expenses increased to 110.6 million in 2024 from 99.1millionin2023,drivenbyacquisition−relatedcostsof10.9 million[176] - Interest expense rose to 4.1millionin2024from2.9 million in 2023, primarily due to increased debt from the Enercon acquisition[180] - The provision for income taxes was 12.6millionin2024,upfrom9.5 million in 2023, with an effective tax rate of 20.5% compared to 11.4% in 2023[185] Acquisitions and Investments - The Company acquired an 80% stake in Enercon Technologies, Ltd. for a total purchase price of 324million,withrecordedassetsincludingnoncontrollinginterestvaluedat72.3 million, trade names at 21.9million,andcustomerrelationshipsat130.3 million[242] - The total cash paid at closing for the Enercon acquisition was approximately 325.6million,fundedby85.6 million in cash on hand and 240millionfromincrementalborrowings[309]−Enerconcontributed20.8 million in revenue and approximately 1.0millioninnetearningstothecompany′sconsolidatedfinancialresultsfortheperiodfromNovember1,2024,toDecember31,2024[318]−ThecompanydivesteditsCzechRepublicsubsidiaryfortotalconsiderationof5.1 million, allowing the Connectivity Solutions segment to focus on core product categories[320] Inventory and Backlog - The backlog of orders totaled 381.6millionatDecember31,2024,adecreaseof8.5 million, or 2%, from December 31, 2023, with Power Solutions and Protection backlog decreasing by 44%[160] - Inventories increased by 24.8millionin2024,includingEnercon′sinventorybalanceof42.7 million, resulting in inventory turns of 2.1 times compared to 3.1 times in 2023[193] Shareholder Returns and Equity - The company declared dividends of 3.5millionin2024,consistentwithpreviousyears,andanticipatesadditionalpaymentsin2025[201]−Thecompanyauthorizedasharerepurchaseprogramofupto25 million in February 2024, with 9.0millionofrepurchasesnotyetexecutedasofDecember31,2024[202]−Dividendspaidtocommonshareholdersdecreasedto3,453 million in 2024 from 3,492millionin2023,reflectingareductionofapproximately1.114.5 million as of December 31, 2024, an increase from 13.7millionin2023[213]−ThefairvalueoftheCompany′sgoodwillexceededtheassociatedcarryingvaluebyamarginrangingfrom440.4 million impairment charge related to its CUI tradename during its annual impairment tests conducted on October 1, 2024[223] - The company completed its annual goodwill impairment test in October 2024, concluding that the fair value of its reporting units exceeded their carrying values, indicating no impairment[338] Currency and Commodity Risks - The Company faced significant exposure to foreign currencies, particularly the euro, Chinese renminbi, Mexican peso, and Indian rupee, with intercompany loans at risk valued at approximately 152millionandpotentiallossesof15.2 million projected from a hypothetical 10% decline in currency rates[229] - The Company actively monitors commodity price risks, particularly for metals such as copper, zinc, tin, gold, and silver, and anticipates increased material costs while implementing strategies like price adjustments and productivity improvements[230] Tax and Regulatory Matters - The effective tax rate will fluctuate based on the geographic region of pretax profits, with Asia having the lowest tax rates among the company's operational regions[162] - The effective tax rate includes the effect of tax contingency liabilities, which are analyzed quarterly and adjusted based on changes in facts and circumstances[294] - The Company has established valuation allowances for deferred tax assets that are not likely to be realized, impacting the provision for income taxes[294]
Bel Fuse (BELFB)2025-02-28 19:12