Bel Fuse Reports 23% Revenue Decline, Net Earnings Drop in Nine Months Ended September 30, 2024

Bel Fuse Inc. reported its financial results for the nine months ended September 30, 2024, revealing a significant decline in revenue and profitability compared to the same period in 2023. Net sales for the nine months totaled $384.9 million, down 23% from $499.8 million in 2023. The decrease was primarily attributed to reduced demand from networking customers and distribution partners in the Power Solutions and Protection and Magnetic Solutions segments. In contrast, the Connectivity Solutions segment experienced a modest increase in sales, driven by higher distribution channel sales and growth in aerospace and defense markets.

For the three months ended September 30, 2024, net sales were $123.6 million, a decrease from $158.7 million in the same quarter of 2023. Gross profit for the same period fell to $44.7 million from $55.5 million, reflecting the overall decline in sales. Income from operations also decreased significantly, with $11.4 million reported for Q3 2024 compared to $24.5 million in Q3 2023. Net earnings available to common stockholders for the third quarter were $8.1 million, down from $19.4 million in the prior year.

The company’s total assets increased to $584.4 million as of September 30, 2024, from $571.6 million at the end of 2023, while total liabilities decreased to $217.1 million from $231.1 million. Cash and cash equivalents rose to $134.3 million, up from $89.4 million at the end of 2023, indicating improved liquidity. The current ratio improved to 4.0:1, up from 3.4:1, reflecting a stronger short-term financial position.

Strategically, Bel Fuse announced a significant acquisition, entering into a Share Purchase Agreement to acquire an 80% stake in Enercon Technologies for $320 million, with plans to close the transaction in Q4 2024. This acquisition aims to enhance Bel's product offerings in the aerospace and defense sectors. Additionally, the company divested its subsidiary Bel Stewart s.r.o. for $5.1 million in June 2023, allowing a sharper focus on core product categories.

Restructuring initiatives were also noted, particularly in the Power segment related to fuse manufacturing, which incurred costs of $4.2 million but is expected to yield annual savings of $1.5 million starting in Q2 2025. Labor costs as a percentage of revenue increased to 7.8% from 6.5% in the previous year, influenced by wage increases in Mexico and Slovakia.

Overall, Bel Fuse's financial performance reflects challenges in certain market segments, while strategic acquisitions and restructuring efforts aim to position the company for future growth.