Bel Fuse (BELFB)2025-05-01 17:25Financial Performance - For the three months ended March 31, 2025, the company's revenue was $152.2 million, an increase of 18.9% from $128.1 million in the same period of 2024[111]. - The backlog of orders increased to $395.7 million as of March 31, 2025, up $14.1 million or 4% from December 31, 2024, with a 7% rise in the Power Solutions and Protection segment[108]. - Sales in the Power Solutions and Protection segment increased by $22.8 million (37.9%) in Q1 2025, driven by new markets in aerospace and defense[112]. - Connectivity Solutions sales decreased by $3.6 million (6.5%) in Q1 2025, primarily due to declines in commercial aerospace and industrial markets[114]. - Sales of Magnetic Solutions products increased by $4.9 million (36.1%) in Q1 2025 compared to Q1 2024, driven by demand from networking customers and distribution channels[115]. Cost and Expenses - Labor costs represented 8.4% of revenue in Q1 2025, up from 8.0% in Q1 2024, influenced by minimum wage increases in the PRC and Mexico[109]. - The gross margin for the Power Solutions and Protection segment was 42.6% in Q1 2025, down from 44.0% in Q1 2024, affected by non-recurring items in the previous year[111]. - Cost of sales as a percentage of revenue decreased from 62.5% in Q1 2024 to 61.4% in Q1 2025, with material costs rising to 29.4% from 28.1%[116]. - R&D expenses rose to $7.2 million in Q1 2025 from $5.2 million in Q1 2024, largely due to the inclusion of Enercon's R&D expenses of $1.7 million[119]. - SG&A expenses increased to $29.5 million in Q1 2025 from $24.9 million in Q1 2024, primarily due to Enercon's SG&A expenses of $6.0 million[120]. - Interest expense surged to $4.2 million in Q1 2025 from $0.4 million in Q1 2024, attributed to higher borrowings related to the Enercon acquisition[121]. Foreign Exchange and Taxation - The company realized a foreign exchange transactional gain of $4.3 million in Q1 2025, benefiting from favorable currency fluctuations[110]. - Other income increased to $2.6 million in Q1 2025 from $1.8 million in Q1 2024, driven by foreign exchange gains of $4.3 million compared to $0.6 million in Q1 2024[123]. - The provision for income taxes rose to $5.5 million in Q1 2025 from $4.5 million in Q1 2024, with an effective tax rate of 23.0% compared to 22.0%[125]. Cash Flow and Liquidity - Cash and cash equivalents decreased by $2.3 million in Q1 2025, with accounts receivable down by $8.2 million due to lower sales volume[127]. - The current ratio improved to 3.3:1 at March 31, 2025, compared to 2.9:1 at December 31, 2024[128]. - The company had $45 million of available borrowings under its revolving credit facility at March 31, 2025, with no mandatory principal payments due in 2025[130]. Strategic Acquisitions - The company acquired an 80% stake in Enercon in November 2024, which is expected to contribute to sales in the Power Solutions and Protection segment in 2025[108]. Market Conditions - Approximately 75% of the company's global sales are not currently subject to new U.S. tariffs, while 25% are affected, primarily from the PRC and Israel[109]. - Inflationary pressures continue to impact input costs, with the company focusing on pricing actions and cost-saving initiatives to manage these fluctuations[109].