-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V5Nk/pCscUy75Cx3B4poxAGh2zg63I2wNsvrzHq/yKYq1EncMqNFyuC3m1niqxzk oyc5P6v9d9IEOS9lW24wOA== 0000950110-97-000911.txt : 19970513 0000950110-97-000911.hdr.sgml : 19970513 ACCESSION NUMBER: 0000950110-97-000911 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970512 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BEL FUSE INC /NJ CENTRAL INDEX KEY: 0000729580 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COILS, TRANSFORMERS & OTHER INDUCTORS [3677] IRS NUMBER: 221463699 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11676 FILM NUMBER: 97600265 BUSINESS ADDRESS: STREET 1: 198 VAN VORST ST CITY: JERSEY CITY STATE: NJ ZIP: 07302 BUSINESS PHONE: 2014320436 MAIL ADDRESS: STREET 2: 198 VAN VORST STREET CITY: JERSEY CITY STATE: NJ ZIP: 07302 10-Q 1 QUARTERLY REPORT ================================================================================ FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------- [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ............. to ............ Commission file number: 0-11676 BEL FUSE INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) New Jersey 22-1463699 - ------------------------------- ------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 198 Van Vorst Street Jersey City, New Jersey 07302 (Address of principal executive offices) (Zip Code) 201-432-0463 (Registrant's telephone number, including area code) --------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. At May 1, 1997, there were 5,073,195 shares of Common Stock, $.10 par value, outstanding. ================================================================================ BEL FUSE INC. INDEX Page Number ----------- Part I. Financial Information Item 1. Financial Statements 1 Consolidated Balance Sheets as of March 31, 1997 (unaudited) and December 31, 1996 2-3 Consolidated Statements of Operations for the Three Months Ended March 31, 1997 and 1996 (unaudited) 4 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1997 and 1996 (unaudited) 5-6 Notes to Consolidated Financial Statements (unaudited) 7-8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9-11 Part II. Other Information Item 1. Legal Proceedings 12 Item 6. Exhibits and Reports on Form 8-K 12 Signatures 13 PART I. Financial Information Item 1. Financial Statements Certain information and footnote disclosures required under generally accepted accounting principles have been condensed or omitted from the following consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. It is suggested that the following consolidated financial statements be read in conjunction with the year-end consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1996. The results of operations for the three month period ended March 31, 1997, are not necessarily indicative of the results to be expected for the entire fiscal year or for any other period. -1- BEL FUSE INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS March 31, December 31, 1997 1996 ----------- ----------- (unaudited) Current Assets: Cash and cash equivalents ................... $21,947,633 $23,498,491 Marketable securities ....................... 4,347,610 2,981,020 Accounts receivable, less allowance for doubtful accounts of $195,000 .......... 8,431,920 8,866,440 Inventories ................................. 9,814,403 8,411,540 Prepaid expenses and other current assets ..................................... 533,298 479,012 Deferred income taxes ....................... 101,000 101,000 ----------- ----------- Total Current Assets .................... 45,175,864 44,337,503 Property, plant and equipment - net ........... 26,820,507 26,321,014 Other assets .................................. 842,073 955,491 ----------- ----------- TOTAL ASSETS ............................ $72,838,444 $71,614,008 =========== =========== (Continued) See notes to consolidated financial statements. -2- BEL FUSE INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES AND STOCKHOLDERS' EQUITY March 31, December 31, 1997 1996 ----------- ----------- (unaudited) Current Liabilities: Accounts payable $ 2,738,651 $ 3,297,825 Accrued expenses 4,099,313 3,846,626 Income taxes payable 448,858 320,460 ----------- ----------- Total Current Liabilities 7,286,822 7,464,911 Deferred income taxes 812,000 750,000 ----------- ----------- Total Liabilities 8,098,822 8,214,911 ----------- ----------- Stockholders' Equity: Preferred stock, no par value -- authorized 1,000,000 shares; none issued -- -- Common stock, par value $.10 per share - authorized 10,000,000 shares; outstanding 5,073,195 and 5,070,820 shares 507,320 507,082 Additional paid-in capital 6,994,412 6,978,900 Retained earnings 57,230,695 55,920,836 Cumulative currency translation adjustment 7,195 (7,721) ----------- ----------- Total Stockholders' Equity 64,739,622 63,399,097 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $72,838,444 $71,614,008 =========== =========== See notes to consolidated financial statements. -3- BEL FUSE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three Months Ended --------------------------- March 31, --------------------------- 1997 1996 ----------- ----------- Sales ......................................... $15,962,204 $17,262,328 ----------- ----------- Costs and Expenses: Cost of sales ............................... 11,370,115 12,040,350 Selling, general and administrative expenses ................................... 3,093,309 2,794,291 ----------- ----------- 14,463,424 14,834,641 ----------- ----------- Income from operations ........................ 1,498,780 2,427,687 Other income -- net ........................... 340,079 166,222 ----------- ----------- Earnings before income taxes .................. 1,838,859 2,593,909 Income tax provision .......................... 529,000 361,000 ----------- ----------- Net earnings .................................. $ 1,309,859 $ 2,232,909 =========== =========== Earnings per common share ..................... $.26 $.44 === === Weighted average number of common shares outstanding ........................ 5,072,094 5,051,857 =========== =========== See notes to consolidated financial statements. -4- BEL FUSE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Three Months Ended --------------------------- March 31, --------------------------- 1997 1996 ----------- ----------- Cash flows from operating activities: Net income .................................. $ 1,309,859 $ 2,232,909 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ............... 775,307 763,745 Deferred income taxes ....................... 62,000 104,000 Net loss on sale of marketable securities ................................. -- 888 Changes in operating assets and liabilities ................................ (1,133,907) 633,300 ----------- ----------- Net Cash Provided by Operating Activities ............................. 1,013,259 3,734,842 ----------- ----------- Cash flows from investing activities: Purchase of property, plant and equipment .................................... (1,269,628) (465,383) Purchase of marketable securities ............. (2,000,000) - Proceeds from sale of marketable securities ................................... 633,410 400,000 Proceeds from repayment by contractor ......... 41,445 14,750 ----------- ----------- Net Cash (used in) Investing Activities ............................. (2,594,773) (50,633) ----------- ----------- Cash flows from financing activities: Proceeds from exercise of stock options ...... 15,750 24,500 ----------- ----------- Effect of exchange rate changes on cash and cash equivalents ..................... 14,906 -- ----------- ----------- Net (Decrease) Increase in Cash ................ (1,550,858) 3,708,709 Cash and Cash Equivalents -- beginning of period ........................... 23,498,491 8,343,925 ----------- ----------- Cash and Cash Equivalents -- end of period ................................. $21,947,633 $12,052,634 =========== =========== (Continued) See notes to consolidated financial statements. -5- BEL FUSE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (unaudited) Three Months Ended --------------------------- March 31, --------------------------- 1997 1996 ----------- ----------- Changes in operating assets and liabilities consist of: Decrease in accounts receivable ............... $ 434,520 $ 1,189,993 (Increase) decrease in inventories ............ (1,402,863) 393,124 (Increase) in prepaid expenses and other current assets ......................... (95,731) (301,983) Decrease in other assets ...................... 108,246 61,819 (Decrease) in accounts payable ................ (559,174) (657,300) Increase (decrease) in accrued expenses ..................................... 252,697 (110,824) Increase in income taxes payable .............. 128,398 58,471 ----------- ----------- $(1,133,907) $ 633,300 =========== =========== Supplementary information: Cash paid during the period for: Interest .................................... $ -- $ -- =========== =========== Income taxes ................................ $ 337,000 $ 184,000 =========== =========== Supplemental disclosures of non-cash activities: Unrealized gains on marketable securities ................................. $ -- $ 223,197 =========== =========== See notes to consolidated financial statements. -6- BEL FUSE INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. The consolidated balance sheet as of March 31, 1997, and the consolidated statements of operations and cash flows for the three months ended March 31, 1997 and 1996 have been prepared by the Company and are unaudited. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for all periods presented have been made. Certain items in the March 31, 1996 financial statements have been reclassified to conform to March 31, 1997 classifications. The information for December 31, 1996 was derived from audited financial statements. 2. Earnings Per Share - Earnings per common share are computed using the weighted average number of common shares outstanding during the period. The dilutive effect of outstanding options at March 31, 1997 and 1996 was not material. 3. Inventories consist of the following: March 31, 1997 December 31, 1996 -------------- ----------------- Raw materials .................... $ 6,933,550 $ 5,718,079 Work-in-process .................. 76,108 89,660 Finished goods ................... 2,804,745 2,603,801 ----------- ----------- $ 9,814,403 $ 8,411,540 =========== =========== 4. Property, plant and equipment consists of the following: March 31, 1997 December 31, 1996 -------------- ----------------- Land ............................. $ 835,218 $ 835,218 Buildings and improvements ....... 13,708,175 13,510,703 Machinery and equipment .......... 33,928,159 32,856,003 Idle property held for sale ...... 935,000 935,000 ----------- ----------- 49,406,552 48,136,924 Less accumulated depreciation and amortization .................... 22,586,045 21,815,910 ----------- ----------- Net property, plant and equipment ....................... $26,820,507 $26,321,014 =========== =========== -7- BEL FUSE INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 5. In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings Per Share", which establishes new standards for computing and presenting net income per share and replaces the standards previously found in Accounting Principles Board Opinion No. 15, "Earnings Per Share". The Company will begin reporting net income per share according to this new standard in its 1997 annual report on Form 10K. The Company does not expect the implementation of SFAS No. 128 to have a material effect on the Company's computation of earnings per share. -8- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations The following table sets forth, for the periods indicated, the percentage relationship to net sales of certain items included in the Company's consolidated statements of operations. Percentage of Net Sales ----------------------- Three Months Ended March 31, ----------------------- 1997 1996 ---- ---- Net sales ................................. 100.0% 100.0% Cost of sales ............................. 71.2 69.8 Selling, general and administrative expenses .................. 19.4 16.2 Other income, net of interest expense ......................... 2.1 1.0 Earnings before income tax provision ............................ 11.5 15.0 Income tax provision ...................... 3.3 2.1 Net earnings .............................. 8.2 12.9 The following table sets forth, for the periods indicated, the percentage increase (decrease) of items included in the Company's consolidated statements of operations. Increase (Decrease) -------------------- from Prior Period -------------------- Three Months Ended March 31, 1997 compared with 1996 ----------------------- Net sales ............................. (7.5)% Cost of sales ......................... (5.6) Selling, general and administrative expenses .............. 10.7 Other income - net .................... 104.6 Earnings before income tax provision ............................ (29.1) Income tax provision .................. 46.5 Net earnings .......................... (41.3) -9- Sales Net sales decreased 7.5% from $17,262,328 during the first three months of 1996 to $15,962,204 during the first three months of 1997. The Company attributes this decrease primarily to reduced sales of customer-specific value-added circuits and assemblies offset, in part, by sales growth in network and fuse products. Cost of Sales Cost of sales as a percentage of net sales increased 1.4% from 69.8% during the first three months of 1996 to 71.2% during the first three months of 1997. The increase in the cost of sales percentage is primarily attributable to increases in direct labor due to the current sales mix which has higher direct labor associated with it offset, in part, by lower material content associated with the current sales mix. Selling, General and Administrative Expenses The percentage relationship of selling, general and administrative expenses to net sales increased from 16.2% for the first three months of 1996 to 19.4% for the first three months of 1997. The Company attributes the increase primarily to increases in sales salaries and related expenses and the decrease in sales. Selling, general and administrative expenses increased in dollar amount by 10.7%. The Company attributes the increase in dollar amount of such expenses primarily to increases in sales salaries and sales related expenses. Other Income and Expenses Other income, consisting of interest and dividends earned on marketable securities and on cash equivalents, increased by approximately $174,000 from the first three months of 1996 to the first three months of 1997. The increase is primarily due to higher earnings on invested funds due to higher average balances in 1997 compared to 1996. Provision for Income Taxes The provision for income taxes for the first three months of 1996 was $361,000 as compared to $529,000 for the first three months of 1997. This increase is due primarily to higher United States pretax earnings for the first three months of 1997 versus 1996 despite lower overall Company earnings. The Company's effective tax rate has been lower than the statutory United States corporate rate primarily as a result of the lower tax rates in Hong Kong and Macau. -10- Liquidity and Capital Resources Historically, the Company has financed its capital expenditures through cash flows from operating activities. Management believes that the cash flow from operations, combined with its existing capital base and the Company's available lines of credit, will be sufficient to fund its operations for the near term. This statement represents a forward-looking statement. Actual results could differ materially from such statement if the Company experiences substantial unanticipated cash requirements. The Company has lines of credit, all of which were unused at March 31, 1997, in the aggregate amount of $7,000,000, of which $5,000,000 is from domestic banks and $2,000,000 is from foreign banks. The Company has entered into an agreement to purchase an additional 3,100 square feet of manufacturing space in Hong Kong for approximately $260,000. During the first three months of 1997, the Company's cash and cash equivalents decreased by $1.6 million, reflecting $2.0 million in purchases of marketable securities and $1.3 million in purchases of plant and equipment, offset in part by $1.0 million provided by operating activities and $.6 million from the sale of marketable securities. The Company has historically followed a policy of reinvesting the earnings of foreign subsidiaries in the Far East. If the unrepatriated funds were distributed to the parent corporation, such funds would be subject to United States federal income taxes. No funds were repatriated during the first three months of 1997 or 1996. Cash, accounts receivable and marketable securities comprised approximately 47.7% and 49.3% of the Company's total assets at March 31, 1997 and December 31, 1996, respectively. The Company's current ratio (i.e., the ratio of current assets to current liabilities) was 6.2 to 1 and 5.9 to 1 at March 31, 1997 and December 31, 1996, respectively. This report contains forward-looking statements that involve substantial risks and uncertainties. The Company's actual results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the "Business", "Management's Discussion and Analysis of Financial Condition and Results of Operations", and "Risks and Uncertainties" captions in the Company's Form 10-K for the year ended December 31, 1996. -11- PART II. Other Information Item 1. Legal Proceedings See Item 3 of the Company's Form 10-K for the year ended December 31, 1996. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: Exhibit 27.1 Financial Data Schedule. (b) There were no Current Reports on Form 8-K filed by the registrant during the quarter ended March 31, 1997. -12- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BEL FUSE INC. By: /s/ DANIEL BERNSTEIN --------------------------------- Daniel Bernstein, President (Principal Financial and Accounting Officer) Dated: May 13, 1997 -13- EX-27 2 BEL FUSE INC., FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BEL FUSE INC. AND SUBSIDIARIES FINANCIAL STATEMENTS AT MARCH 31, 1997 AND THE THREE MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1 YEAR DEC-31-1997 MAR-31-1997 21,947,633 4,347,610 8,626,920 195,000 9,814,403 45,175,864 49,406,552 22,856,045 72,838,444 7,286,822 0 0 0 507,320 62,232,302 72,838,444 15,962,204 15,962,204 11,370,115 14,463,424 0 0 0 1,838,859 529,000 0 0 0 0 1,309,859 .26 0
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