Bel Fuse (US:BELFB)2022-03-13 16:00Revenue and Sales Performance - The Company's revenues increased by $77.7 million, or 16.7%, in 2021 compared to 2020, with Power Solutions and Protection sales and Magnetic Solutions sales each increasing by 20%, while Connectivity Solutions sales increased by 9%[142]. - The backlog of orders totaled $467.8 million at December 31, 2021, representing an increase of $312.8 million, or over 200%, from December 31, 2020, driven by increased demand for e-Mobility products and restored demand from networking customers[143]. - Connectivity Solutions sales increased by $14.3 million in 2021 compared to 2020, driven by a $10.9 million rise in demand from distribution partners and a $5.5 million rebound in commercial aerospace demand, offset by a $10.5 million decline in military sales[154]. - Magnetic Solutions sales improved by $26.9 million in 2021, attributed to heightened orders in recent quarters, despite increased labor costs due to a competitive labor market in China and currency appreciation against the U.S. Dollar[155]. - Power Solutions and Protection sales rose by $36.5 million in 2021, with significant contributions from Bel Power Solutions ($16.7 million), CUI sales ($12.7 million), and a $12.4 million contribution from the March 2021 acquisition of EOS[156]. - Net sales for the year ended December 31, 2021, were $543,494, an increase of 16.7% compared to $465,771 in 2020[237]. - The Company reported a significant increase in accounts receivable, which rose to $87,135 in 2021 from $71,372 in 2020, an increase of 22.1%[235]. - The Company’s revenue from North America for the year ended December 31, 2021, was $317.437 million, up from $265.676 million in 2020, reflecting a growth of approximately 19.5%[300]. Cost and Expense Management - Material costs as a percentage of revenue increased to 46.2% during 2021 from 43.3% in 2020 due to ongoing supply constraints and increased prices for components[146]. - Labor costs decreased from 9.9% of sales in 2020 to 9.0% in 2021, primarily due to a reclassification of expenses, despite increased costs from minimum wage hikes in the PRC and Mexico[147]. - Cost of sales as a percentage of net sales increased from 73.9% in 2020 to 75.3% in 2021, primarily due to a rise in material costs and labor costs, which increased from 53.2% to 55.2% of sales[157]. - R&D expenses decreased to $21.9 million in 2021 from $23.6 million in 2020, mainly due to cost savings from the closure of the Power R&D facility in Switzerland[159]. - SG&A expenses increased to $86.6 million in 2021 from $78.7 million in 2020, with salary and fringe benefits rising by $5.8 million[160]. - Interest expense decreased to $3.5 million in 2021 from $4.7 million in 2020, attributed to lower interest rates and a reduced debt balance[165]. Profitability and Earnings - Gross profit for 2021 was $134,383, representing a gross margin of 24.7%, up from $119,730 in 2020[237]. - Net earnings available to common shareholders increased to $24,821 in 2021, compared to $12,795 in 2020, reflecting a growth of 94.3%[237]. - Class A common shares net earnings per share rose to $1.90 in 2021, up from $0.97 in 2020, while Class B common shares increased to $2.02 from $1.05[237]. - Net earnings for the year ended December 31, 2021, were $24,821,000, a significant increase from $12,795,000 in 2020, representing a growth of 94.3%[242]. - The company reported net earnings of $24.8 million for the year ended December 31, 2021, compared to $12.8 million for the year ended December 31, 2020, representing an increase of 94.3%[270]. Cash Flow and Liquidity - The company held $61.8 million in cash and cash equivalents as of December 31, 2021, supporting its liquidity for operating expenses and investments[177]. - Cash and cash equivalents decreased by $23.2 million in 2021, primarily due to acquisition payments of $16.8 million and long-term debt repayments of $104.8 million[179]. - Cash flows from operating activities provided $4,632,000 in 2021, a decrease from $46,108,000 in 2020, indicating a decline of 90%[242]. - The company reported a net cash used in investing activities of $18,878,000 in 2021, compared to $1,515,000 in 2020, indicating a significant increase in investment outflows[245]. - The company had $112.5 million outstanding under its revolving credit facility as of December 31, 2021, with no mandatory principal payments due in the next twelve months[183]. Acquisitions and Investments - The Company acquired rms Connectors for $9.0 million in cash, enhancing its military and aerospace product portfolio[279]. - The acquisition of EOS Power was completed for $7.8 million, with EOS generating $12.0 million in sales for the year ended December 31, 2020[280]. - The 2021 Acquired Companies contributed aggregate revenues of $17.1 million and net earnings of $1.9 million during the year ended December 31, 2021[285]. - The final accounting for the 2021 Acquisitions was completed, with net identifiable assets acquired totaling $18.2 million[283]. Taxation and Regulatory Compliance - The effective tax rate will fluctuate based on the geographic region of pretax profits, with Asia having the lowest tax rates among the regions where the Company operates[151]. - The effective tax rate increased to 9.2% in 2021 from (5.4%) in 2020, primarily due to higher U.S. income and the addition of uncertain tax positions[171]. - The company has established valuation allowances for deferred tax assets that are not likely to be realized, demonstrating a cautious approach to tax planning[267]. - The company’s effective tax rate includes the effect of tax contingency liabilities, which are analyzed quarterly and adjusted based on changes in circumstances[268]. Financial Position and Assets - Total current assets increased to $329,016 in 2021, up from $280,216 in 2020, marking an increase of 17.4%[235]. - Total liabilities rose to $303,103 in 2021, compared to $268,067 in 2020, indicating a growth of 13.0%[235]. - Total stockholders' equity increased to $208,743 in 2021, compared to $185,799 in 2020, reflecting an increase of 12.3%[235]. - The Company had goodwill balances totaling $25.8 million as of October 1, 2021, with no impairment identified[218]. - Goodwill increased from $23.966 million at the beginning of 2021 to $26.651 million by December 31, 2021, marking an increase of 11.2%[311]. Risk Management and Controls - The Company maintained effective internal control over financial reporting as of December 31, 2021[223]. - The company does not enter into speculative positions with derivative instruments, focusing instead on risk management through hedging strategies[263]. - The company executed interest rate swap agreements to mitigate risks associated with variable interest rates on its borrowings, effective through August 2026[191].