UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________

FORM 10-Q

(MARK ONE)

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Quarterly Period Ended June 30, ~~2013~~2014
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 No. 0-11676

_____________________

BEL FUSE INC.

206 Van Vorst Street

Jersey City, NJ 07302

(201) 432-0463

(Address of principal executive offices and zip code)

(Registrant’s telephone number, including area code)

NEW JERSEY		22-1463699
(State of incorporation)		(I.R.S. Employer Identification No.)

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 by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).	Yes [X]	No [ ]

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [X]	Non-accelerated filer [ ] (Do not check if a smaller reporting company)	Smaller reporting company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).				Yes [ ]	No [X]

Title of Each Class	Number of Shares of Common Stock Outstanding as of August 1, ~~2013~~2014
Class A Common Stock ($0.10 par value)		2,174,912
Class B Common Stock ($0.10 par value)		~~9,234,927~~9,702,877

BEL FUSE INC.

INDEX

			Page
Part I		Financial Information

	Item 1.	Financial Statements (unaudited)	1

		Condensed Consolidated Balance Sheets as of June 30, ~~2013~~2014
		and December 31, ~~2012~~2013 (unaudited)	2

		Condensed Consolidated Statements of Operations for the Three and Six
		Months Ended June 30, ~~2013~~2014 and ~~2012~~2013 (unaudited)	3

		Condensed Consolidated Statements of Comprehensive Income (Loss) for
		the Three and Six Months Ended June 30, ~~2013~~2014 and ~~2012~~2013 (unaudited)	4

		Condensed Consolidated Statements of Cash Flows for the Six
		Months Ended June 30, ~~2013~~2014 and ~~2012~~2013 (unaudited)	5 - 6

		Notes to Condensed Consolidated Financial Statements (unaudited)	7 - 1820

	Item 2.	Management's Discussion and Analysis of
		Financial Condition and Results of Operations	1921 - 2529

	Item 3.	Quantitative and Qualitative Disclosures About
		Market Risk	2529

	Item 4.	Controls and Procedures	2529

Part II		Other Information

	Item 1.	Legal Proceedings	26

	~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	2629

	Item 6.	Exhibits	2730

	Signatures		28
			31

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PART I. Financial Information

Item 1. Financial Statements ~~(Unaudited~~)(Unaudited)

Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted from the following condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. The following condensed consolidated financial statements should 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, ~~2012.~~2013.

The results of operations for the three and six months ended June 30, ~~2013~~2014 are not necessarily indicative of the results for the entire fiscal year or for any other period.

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BEL FUSE INC. AND SUBSIDIARIES	BEL FUSE INC. AND SUBSIDIARIES							BEL FUSE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS	CONDENSED CONSOLIDATED BALANCE SHEETS							CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share and per share data)	(dollars in thousands, except share and per share data)							(dollars in thousands, except share and per share data)
(Unaudited)	(Unaudited)							(Unaudited)

		June 30,			December 31,				June 30,		December 31,
		2013			2012				2014		2013
ASSETS
Current Assets:
Cash and cash equivalents		$	38,599		$	71,262			$	87,769	$	62,123
Accounts receivable - less allowance for doubtful accounts of $1,110
and $743 at June 30, 2013 and December 31, 2012, respectively			62,167			43,086
Accounts receivable - less allowance for doubtful accounts of $1,900
and $941 at June 30, 2014 and December 31, 2013, respectively										97,507		63,849
Inventories			66,604			54,924				98,706		70,019
Restricted cash			12,993			12,993
Prepaid expenses and other current assets			6,354			4,482				7,486		3,519
Refundable income taxes			3,441			2,955				2,446		1,650
Deferred income taxes			2,827			1,437				4,963		2,995
Total Current Assets			192,985			191,139				298,877		204,155

Property, plant and equipment - net			38,268			34,988				67,051		40,896
Deferred income taxes			3,614			1,404				3,537		1,680
Intangible assets - net			19,710			20,949				49,689		29,472
Goodwill			22,231			14,218				55,644		18,490
Other assets			12,608			12,510				20,045		13,448
TOTAL ASSETS		$	289,416		$	275,208			$	494,843	$	308,141

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable		$	29,934		$	18,862			$	58,369	$	29,518
Accrued expenses			29,746			25,360				40,435		22,442
Accrued restructuring costs			1,191			122
Short-term borrowings under revolving credit line										-		12,000
Current maturities of long-term debt										7,250
Notes payable			349			205				479		739
Income taxes payable			1,193			1,040				1,562		1,496
Dividends payable			823			799				843		786
Total Current Liabilities			63,236			46,388				108,938		66,981

Long-term Liabilities:
Long-term debt, noncurrent										137,750		-
Liability for uncertain tax positions			2,175			2,161				1,687		1,218
Minimum pension obligation and unfunded pension liability			11,713			11,045				11,376		10,830
Other long-term liabilities			258			233				508		410
Total Long-term Liabilities			14,146			13,439				151,321		12,458
Total Liabilities			77,382			59,827				260,259		79,439

Commitments and Contingencies

Stockholders' Equity:
Preferred stock, no par value, 1,000,000 shares authorized; none issued			-			-				-		-
Class A common stock, par value $.10 per share, 10,000,000 shares
authorized; 2,174,912 shares outstanding at each date (net of
1,072,769 treasury shares)			217			217				217		217
Class B common stock, par value $.10 per share, 30,000,000 shares
authorized; 9,235,727 and 9,372,170 shares outstanding, respectively
authorized; 9,330,877 and 9,335,677 shares outstanding, respectively
(net of 3,218,307 treasury shares)			924			937				933		933
Additional paid-in capital			17,978			20,452				20,089		18,914
Retained earnings			195,550			195,202				211,994		207,993
Accumulated other comprehensive loss			(2,635	)		(1,427	)
Accumulated other comprehensive income										1,351		645
Total Stockholders' Equity			212,034			215,381				234,584		228,702
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	289,416		$	275,208			$	494,843	$	308,141


See notes to unaudited condensed consolidated financial statements.	See notes to unaudited condensed consolidated financial statements.							See notes to unaudited condensed consolidated financial statements.

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BEL FUSE INC. AND SUBSIDIARIES	BEL FUSE INC. AND SUBSIDIARIES													BEL FUSE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS													CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except share and per share data)	(dollars in thousands, except share and per share data)													(dollars in thousands, except share and per share data)
(Unaudited)	(Unaudited)													(Unaudited)

		Three Months Ended						Six Months Ended							Three Months Ended						Six Months Ended
		June 30,						June 30,							June 30,						June 30,
		2013			2012			2013			2012				2014			2013			2014			2013

Net Sales		$	93,981		$	73,222		$	157,009		$	138,783			$	99,439		$	93,981		$	182,085		$	157,009

Costs and expenses:
Cost of sales			78,041			61,081			131,959			116,218				81,493			78,717			150,069			132,649
Selling, general and administrative			12,129			9,563			22,522			18,421				13,176			12,342			24,365			22,741
Restructuring charges			1,263			245			1,387			382				1,056			1,263			1,056			1,387
			91,433			70,889			155,868			135,021				95,725			92,322			175,490			156,777

Income from operations			2,548			2,333			1,141			3,762				3,714			1,659			6,595			232

Impairment of investment			-			(478	)		-			(478	)
Interest expense			(3	)		-			(6	)		-				(225	)		(5	)		(255	)		(8	)
Interest income and other, net			69			77			109			153				49			69			100			107

Earnings before provision (benefit) for income taxes			2,614			1,932			1,244			3,437				3,538			1,723			6,440			331
Provision (benefit) for income taxes			187			491			(640	)		1,124				473			34			872			(800	)

Net earnings		$	2,427		$	1,441		$	1,884		$	2,313			$	3,065		$	1,689		$	5,568		$	1,131


Earnings per share:
Class A common share - basic and diluted		$	0.20		$	0.11		$	0.15		$	0.18			$	0.25		$	0.14		$	0.45		$	0.09
Class B common share - basic and diluted		$	0.22		$	0.12		$	0.17		$	0.20			$	0.27		$	0.15		$	0.49		$	0.10

Weighted-average shares outstanding:
Class A common share - basic and diluted			2,174,912			2,174,912			2,174,912			2,174,912				2,174,912			2,174,912			2,174,912			2,174,912
Class B common share - basic and diluted			9,213,178			9,677,141			9,217,119			9,654,473				9,331,982			9,213,178			9,333,460			9,217,119

Dividends paid per share:
Class A common share		$	0.06		$	0.06		$	0.12		$	0.12			$	0.06		$	0.06		$	0.12		$	0.12
Class B common share		$	0.07		$	0.07		$	0.14		$	0.14			$	0.07		$	0.07		$	0.14		$	0.14


See notes to unaudited condensed consolidated financial statements.	See notes to unaudited condensed consolidated financial statements.													See notes to unaudited condensed consolidated financial statements.

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BEL FUSE INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(dollars in thousands)
(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012

Net earnings $ 2,427 $ 1,441 $ 1,884 $ 2,313

Other comprehensive income (loss):
Currency translation adjustment, net of taxes of $5, $0,
($216) and $0, respectively 231 (749 ) (1,182 ) (334 )
Reclassification adjustment for write-down of marketable
securities included in net earnings, net of tax of $181 - 296 - 296
Unrealized holding losses on marketable securities arising during
the period, net of taxes of ($63), ($72), ($11) and ($59), respectively (103 ) (117 ) (18 ) (91 )
Change in unfunded SERP liability, net of taxes of $24, $18,
($4) and $35, respectively 53 40 (8 ) 80
Other comprehensive income (loss) 181 (530 ) (1,208 ) (49 )

Comprehensive income $ 2,608 $ 911 $ 676 $ 2,264

See notes to unaudited condensed consolidated financial statements.

BEL FUSE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(dollars in thousands)
(Unaudited)

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2014		2013			2014		2013

Net earnings	$	3,065	$	1,689		$	5,568	$	1,131

Other comprehensive income:
Currency translation adjustment, net of taxes of $89, $5, $123 and ($216), respectively		368		231			537		(1,182	)
Unrealized holding losses on marketable securities arising during the period,
net of taxes of $48, ($63), $65 and ($11), respectively		78		(103	)		106		(18	)
Change in unfunded SERP liability, net of taxes of $14, $24, $28 and ($4), respectively		32		53			63		(8	)
Other comprehensive income (loss)		478		181			706		(1,208	)

Comprehensive income (loss)	$	3,543	$	1,870		$	6,274	$	(77	)


See notes to unaudited condensed consolidated financial statements.

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BEL FUSE INC. AND SUBSIDIARIES	BEL FUSE INC. AND SUBSIDIARIES							BEL FUSE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS							CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)	(dollars in thousands)							(dollars in thousands)
(Unaudited)	(Unaudited)							(Unaudited)
		Six Months Ended							Six Months Ended
		June 30,							June 30,
		2013			2012				2014			2013
Cash flows from operating activities:
Net earnings		$	1,884		$	2,313			$	5,568		$	1,131
Adjustments to reconcile net earnings to net
cash (used in) provided by operating activities:
cash provided by (used in) operating activities:
Depreciation and amortization			4,871			4,270				6,507			5,397
Stock-based compensation			934			897				1,143			934
(Gain) loss on disposal of property, plant and equipment			(13	)		110
Impairment of investment			-			478
Gain on disposal of property, plant and equipment										-			(13	)
Other, net			471			449				269			471
Deferred income taxes			(958	)		(1,030	)			(475	)		(1,120	)
Changes in operating assets and liabilities (see page 6)			(11,050	)		(7,258	)			(318	)		(10,661	)
Net Cash (Used in) Provided by Operating Activities			(3,861	)		229
Net Cash Provided by (Used in) Operating Activities										12,694			(3,861	)

Cash flows from investing activities:
Increase in cash equivalents within Rabbi Trust										(2,936	)		-
Purchase of company-owned life insurance (COLI)										(2,820	)		-
Purchase of property, plant and equipment			(3,088	)		(2,296	)			(2,969	)		(3,088	)
Payment for acquisition, net of cash acquired (see page 6)			(20,932	)		(2,695	)			(109,879	)		(20,932	)
Purchase of marketable securities			-			(12	)
Proceeds from surrender of COLI										5,756			-
Proceeds from disposal of property, plant and equipment			13			5				20			13
Net Cash Used in Investing Activities			(24,007	)		(4,998	)			(112,828	)		(24,007	)

Cash flows from financing activities:
Dividends paid to common shareholders			(1,512	)		(1,565	)			(1,511	)		(1,512	)
Increase in notes payable			149			-
Deferred financing costs										(5,422	)		-
Repayments under revolving credit line										(12,000	)		-
(Decrease) increase in notes payable										(255	)		149
Proceeds from long-term debt										145,000			-
Purchase and retirement of Class B common stock			(3,356	)		-				-			(3,356	)
Net Cash Used In Financing Activities			(4,719	)		(1,565	)
Net Cash Provided by (Used In) Financing Activities										125,812			(4,719	)

Effect of exchange rate changes on cash			(76	)		(78	)			(32	)		(76	)

Net Decrease in Cash and Cash Equivalents			(32,663	)		(6,412	)
Net Increase (Decrease) in Cash and Cash Equivalents										25,646			(32,663	)
Cash and Cash Equivalents - beginning of period			71,262			88,241				62,123			71,262
Cash and Cash Equivalents - end of period		$	38,599		$	81,829			$	87,769		$	38,599

(Continued)	(Continued)							(Continued)
See notes to unaudited condensed consolidated financial statements.	See notes to unaudited condensed consolidated financial statements.							See notes to unaudited condensed consolidated financial statements.

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BEL FUSE INC. AND SUBSIDIARIES	BEL FUSE INC. AND SUBSIDIARIES							BEL FUSE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)							CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(dollars in thousands)	(dollars in thousands)							(dollars in thousands)
(Unaudited)	(Unaudited)							(Unaudited)
		Six Months Ended							Six Months Ended
		June 30,							June 30,
		2013			2012				2014			2013

Changes in operating assets and liabilities consist of:
Increase in accounts receivable		$	(7,894	)	$	(4,446	)		$	(4,235	)	$	(7,894	)
Increase in inventories			(4,886	)		(4,152	)
Decrease (increase) in inventories										4,539			(4,497	)
Increase in prepaid expenses and other current assets			(1,071	)		(1,081	)			(701	)		(1,071	)
Increase in other assets			(27	)		(171	)			(312	)		(27	)
Increase in accounts payable			2,487			1,257				2,692			2,487
(Decrease) increase in accrued expenses			(428	)		135
Decrease in accrued expenses										(2,298	)		(428	)
Increase in other liabilities			29			-				6			29
Increase in accrued restructuring costs			1,069			-				-			1,069
(Decrease) increase in income taxes payable			(329	)		1,200
Decrease in income taxes payable										(9	)		(329	)
		$	(11,050	)	$	(7,258	)		$	(318	)	$	(10,661	)

Supplementary information:
Cash paid during the period for:
Income taxes, net of refunds received		$	651		$	864			$	1,387		$	651
Interest			6			-				60			6

Details of acquisitions:
Fair value of identifiable net assets acquired		$	21,913		$	157			$	93,258		$	28,108
Goodwill			8,193			2,577				37,534			1,240
Fair value of net assets acquired		$	30,106		$	2,734			$	130,792		$	29,348

Fair value of net assets acquired		$	30,106		$	2,734			$	130,792		$	29,348
Less: Cash acquired in acquisition			(8,388	)		-				(20,913	)		(8,388	)
Deferred consideration			(786	)		(39	)			-			(28	)
Cash paid for acquisitions, net of cash acquired		$	20,932		$	2,695			$	109,879		$	20,932
See notes to unaudited condensed consolidated financial statements.	See notes to unaudited condensed consolidated financial statements.							See notes to unaudited condensed consolidated financial statements.

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BEL FUSE INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.	BASIS OF PRESENTATION AND ACCOUNTING POLICIES

The condensed consolidated balance sheet as of June 30, ~~2013,~~2014, and the condensed consolidated statements of operations, comprehensive income and cash flows for the periods presented herein have been prepared by Bel Fuse Inc. (the “Company” or “Bel”) 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. The results for the three and six months ended June 30, ~~2013~~2014 should not be viewed as indicative of the Company’s annual results or the Company’s results for any other period. The information for the condensed consolidated balance sheet as of December 31, ~~2012~~2013 was derived from audited financial statements. These financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Bel Fuse Annual Report on Form 10-K for the year ended December 31, ~~2012.~~2013.

On March 9, 2012, the Company completed its acquisition of 100% of the issued and outstanding capital stock of GigaCom Interconnect AB (“GigaCom”). On July 31, 2012, the Company consummated its acquisition of 100% of the issued and outstanding capital stock of Fibreco Ltd. (“Fibreco”). On September 12, 2012, the Company completed its acquisition of 100% of the issued and outstanding capital stock of Powerbox Italia ~~S.r.L. and its subsidiary, Powerbox Design (collectively, “Powerbox”, now merged to form Bel Power Europe S.r.l.~~S.r.L (“Powerbox”). The acquisitions of GigaCom, Fibreco and Powerbox may hereafter be referred to collectively as either the “2012 Acquisitions” or the “2012 Acquired Companies”. Accordingly, as of the respective acquisition dates, all of the assets acquired and liabilities assumed were recorded at their preliminary fair values. The accompanying condensed consolidated statement of operations for the three and six months ended June 30, 2013 have been restated to reflect immaterial measurement period adjustments related to the applicable 2012 Acquisitions.

On March 29, 2013, the Company completed its acquisition of 100% of the issued and outstanding capital stock of Transpower Technologies (HK) Limited (“Transpower”) and certain other tangible and intangible assets related to the Transpower magnetics business of TE ~~Connectivity.~~Connectivity (“TRP”). On August 20, 2013, the Company completed its acquisition of 100% of the issued and outstanding capital stock of Array Connector Corporation (“Array”). The acquisitions of TRP and Array may hereafter be referred to collectively as either the “2013 Acquisitions” or the “2013 Acquired Companies”. Accordingly, as of the respective acquisition dates, all of the assets acquired and liabilities assumed were recorded at their preliminary fair ~~values~~values. The Company’s condensed consolidated results of operations include the operating results of the 2013 Acquisitions since their respective acquisition dates. The accompanying condensed consolidated financial statements as of December 31, 2013 and for the three and six months ended June 30, 2013 have been restated to reflect measurement period adjustments, as further described in Note 3, related to the TRP acquisition.

On June 19, 2014, the Company completed its acquisition of 100% of the issued and outstanding capital stock of the Power-One Power Solutions business (“Power Solutions”) of ABB Ltd. The Company’s condensed consolidated results of operations for the three and six months ended June 30, ~~2013 and June 30, 2012~~2014 include the operating results of Power Solutions from the ~~acquired companies from their respective~~ acquisition ~~dates~~date through ~~the respective period end dates. The accompanying condensed consolidated financial statements as of December 31, 2012 and for the three and six months ended~~ June 30, ~~2012 have been restated to reflect immaterial measurement period adjustments related to the GigaCom and Fibreco acquisitions, as applicable.~~

2014.

Recent Accounting Pronouncements

The Company’s significant accounting policies are summarized in Note 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2012.~~2013. There were no significant changes to these accounting policies during the six months ended June 30, ~~2013. Recent accounting pronouncements adopted during the first six months of 2013 are as follows:~~2014.

~~Accounting~~Recently Adopted Standards ~~Update (“ASU”) No. 2012-02 – Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment (“ASU No. 2012-02”)~~

~~ASU No. 2012-02 amends ASU No. 2011-08,~~ ~~Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment,~~ ~~and permits an entity~~In July 2013, the FASB issued revised guidance to ~~first assess qualitative factors~~address the diversity in practice related to ~~determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform~~ the ~~quantitative impairment test in accordance with Subtopic 350-30,~~ ~~Intangibles - Goodwill and Other - General Intangibles Other than Goodwill. The Company adopted ASU No. 2012-02 during the first quarter of 2013. The adoption of this update did not have a material effect on the Company’s condensed consolidated financial statements.~~

~~Accounting Standards Update No. 2013-02 – Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU No. 2013-02”)~~

ASU No. 2013-02 requires disclosure of amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present either on the face of the consolidated statements of operations, or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net earnings, but only if the amount reclassified is required to be reclassified to net earnings in its entirety in the same reporting period. For amounts not reclassified in their entirety to net earnings, an entity is required to cross-reference to other disclosures that provide additional detail about those amounts. The Company adopted ASU No. 2013-02 during the first quarter of 2013. The adoption of this update did not have a material effect on the Company’s condensed consolidated financial statements.

Accounting Standards Update No. 2013-11 – Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU No. 2013-11”)

~~ASU No. 2013-11 provides guidance on~~ financial statement presentation of an unrecognized tax ~~benefit~~benefits when a net operating loss ~~(“NOL”)~~ carryforward, a similar tax loss, or a tax credit carryforward exists. The ~~FASB’s objective in issuing~~Company adopted this ~~ASU is to eliminate diversity in practice resulting from a lack of~~ guidance ~~on this topic in current U.S. GAAP. This ASU applies to all entities with unrecognized tax benefits that also have tax loss or tax credit carryforwards in the same tax jurisdiction~~ as of ~~the reporting date.~~January 1, 2014, on a prospective basis. The ~~guidance in ASU No. 2013-11 is effective for interim and annual periods beginning after December 15, 2013. The Company does~~adoption did not ~~expect the adoption of this ASU to~~ have a material impact on the Company’s ~~results~~financial statements.

Standards Issued Not Yet Adopted

In April 2014, the FASB issued guidance for the reporting of discontinued operations, which also contains new disclosure requirements for both discontinued operations and other disposals that do not meet the definition of a discontinued operation. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. Management believes that the adoption of this guidance will not have a material impact on the Company’s financial ~~condition~~statements.

In May 2014, the FASB issued guidance on the accounting for revenue from contracts with customers that will supersede most existing revenue recognition guidance, including industry-specific guidance. The core principle requires an entity to recognize revenue to depict the transfer of goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the guidance requires enhanced disclosures regarding the nature, timing and uncertainty of revenue and cash ~~flows.~~flows arising from an entity's contracts with customers. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Entities can choose to apply the guidance using either the full retrospective approach or a modified retrospective approach. Management is currently evaluating the impact that this guidance will have on the Company’s financial statements, if any, including which transition method it will adopt.

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2.	EARNINGS PER SHARE

The Company utilizes the two-class method to report its earnings per share. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared and participation rights in undistributed earnings. The Company’s Certificate of Incorporation, as amended, states that Class B common shares are entitled to dividends at least 5% greater than dividends paid to Class A common shares, resulting in the two-class method of computing earnings per share. In computing earnings per share, the Company has allocated dividends declared to Class A and Class B based on amounts actually declared for each class of stock and 5% more of the undistributed earnings have been allocated to Class B shares than to the Class A shares on a per share basis. Basic earnings per common share are computed by dividing net earnings by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share, for each class of common stock, are computed by dividing net earnings by the weighted-average number of common shares and potential common shares outstanding during the period. There were no potential common shares outstanding during the three or six months ended June 30, ~~2013~~2014 or ~~2012~~June 30, 2013 which would have had a dilutive effect on earnings per share.

The earnings and weighted-average shares outstanding used in the computation of basic and diluted earnings per share are as follows (dollars in thousands, except share and per share data):

	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
	June 30,				June 30,				June 30,				June 30,
	2013		2012		2013		2012		2014		2013		2014		2013

Numerator:
Net earnings	$	2,427	$	1,441	$	1,884	$	2,313	$	3,065	$	1,689	$	5,568	$	1,131
Less Dividends:
Less Dividends declared:
Class A		131		131		261		261		131		131		261		261
Class B		643		680		1,275		1,355		653		643		1,307		1,275
Undistributed earnings	$	1,653	$	630	$	348	$	697
Undistributed earnings (loss)									$	2,281	$	915	$	4,000	$	(405	)

Undistributed earnings allocation - basic and diluted:
Class A undistributed earnings	$	303	$	111	$	64	$	123
Class B undistributed earnings		1,350		519		284		574
Total undistributed earnings	$	1,653	$	630	$	348	$	697
Undistributed earnings (loss) allocation - basic and diluted:
Class A undistributed earnings (loss)									$	414	$	168	$	726	$	(74	)
Class B undistributed earnings (loss)										1,867		747		3,274		(331	)
Total undistributed earnings (loss)									$	2,281	$	915	$	4,000	$	(405	)

Net earnings allocation - basic and diluted:
Class A allocated earnings	$	434	$	242	$	325	$	384
Class B allocated earnings		1,993		1,199		1,559		1,929
Class A net earnings									$	545	$	299	$	987	$	187
Class B net earnings										2,520		1,390		4,581	$	944
Net earnings	$	2,427	$	1,441	$	1,884	$	2,313	$	3,065	$	1,689	$	5,568	$	1,131

Denominator:
Weighted-average shares outstanding:
Class A common share - basic and diluted		2,174,912		2,174,912		2,174,912		2,174,912		2,174,912		2,174,912		2,174,912		2,174,912
Class B common share - basic and diluted		9,213,178		9,677,141		9,217,119		9,654,473		9,331,982		9,213,178		9,333,460		9,217,119

Earnings per share:
Class A common share - basic and diluted	$	0.20	$	0.11	$	0.15	$	0.18	$	0.25	$	0.14	$	0.45	$	0.09
Class B common share - basic and diluted	$	0.22	$	0.12	$	0.17	$	0.20	$	0.27	$	0.15	$	0.49	$	0.10

3. ACQUISITIONS

2014 Acquisition:

On June 19, 2014, the Company completed its acquisition of Power Solutions for $110.0 million, net of cash acquired. Power Solutions is a leading provider of high-efficiency and high-density power conversion products for server, storage and networking equipment, industrial applications and power systems. Power Solutions offers a premier line of standard, modified-standard and custom designed AC/DC, DC/DC and other specific power conversion products for a variety of technologies in data centers, telecommunications and industrial applications. The acquisition of Power Solutions brings a complementary, industry-leading power product portfolio to Bel’s existing line of power products, expands our current customer base in the areas of server, storage and networking equipment and adds industrial and additional transportation applications to the Company’s product offering.

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~~3. ACQUISITIONS~~

~~2013 Acquisition~~:

On March 29, 2013, the Company acquired 100% of the outstanding shares of Transpower Technology (HK) Limited (“Transpower”), certain intellectual property and other tangible assets related to the Transpower magnetics business of TE Connectivity (“TE”) from Tyco Electronics Corporation (“Tyco”) for $22.4 million in cash and additional consideration including the assumption of $0.1 million in liabilities and the grant of a license to TE related to three of the Company’s patents. During the second quarter of 2013, the Company paid an additional $6.8 million in consideration to TE related to a working capital adjustment and $0.8 million remains accrued at June 30, 2013. Transpower is the sole shareholder of Dongguan Transpower Electronic Products Co., Ltd. in the People's Republic of China. The operations acquired are now doing business as TRP Connector (“TRP”). The Company’s purchase of the TRP magnetics business consisted of the integrated connector module (“ICM”) family of products, including RJ45, 10/100 Gigabit, 10G, PoE/PoE+, MRJ21 and RJ.5, a line of modules for smart-grid applications, and discrete magnetics.

During the three and six months ended June 30, ~~2013,~~2014, the Company incurred ~~$0.1~~$1.0 million and ~~$0.4~~$1.0 million, respectively, of acquisition-related costs associated with ~~TRP.~~the acquisition of Power Solutions. These costs are included in selling, general and administrative expense in the accompanying condensed consolidated ~~statement~~statements of operations for the three and six months ended June 30, ~~2013.~~2014.

While the initial accounting related to the ~~TRP~~ acquisition of Power Solutions is not complete as of the filing date of this Quarterly Report on Form 10-Q, the following table depicts the Company’s ~~initial~~current estimate of the respective acquisition date fair values of the consideration paid ~~or payable~~ and identifiable net assets acquired (in thousands):

					Measurement
					Period			March 29, 2013			Acquisition-Date
	March 29, 2013				Adjustments			(As adjusted)			Fair Values
Cash	$	8,388			$	-		$	8,388
Cash and cash equivalents											$	20,913
Accounts receivable		11,580				(39	)		11,541			29,388
Inventories		6,258		(a)		707			6,965			33,156		(a)
Other current assets		1,953				-			1,953			5,387
Property, plant and equipment		4,693		(b)		(165	)		4,528			28,176		(b)
Intangible assets		-		(c)		-			-			21,188		(c)
Other assets		1,151				-			1,151			536
Total identifiable assets		34,023				503			34,526			138,744

Accounts payable		(8,565	)			-			(8,565	)		(26,180	)
Accrued expenses		(4,003	)			(21	)		(4,024	)		(20,290	)
Other current liabilities		(25	)			1			(24	)
Income taxes payable												223
Deferred income tax liability, noncurrent												860
Other long-term liabilities												(99	)
Total liabilities assumed		(12,593	)			(20	)		(12,613	)		(45,486	)
Net identifiable assets acquired		21,430				483			21,913			93,258
Goodwill		8,278		(d)		(85	)		8,193			37,534		(d)
Net assets acquired	$	29,708			$	398		$	30,106		$	130,792


Cash paid	$	22,400			$	6,920		$	29,320		$	130,792
Assumption of severance payment		109				(109	)		-
Fair value of grant of license		-		(e)		-			-
Deferred consideration												-
Fair value of consideration transferred		22,509				6,811			29,320		$	130,792
Deferred consideration		7,199		(f)		(6,413	)		786
Total consideration paid/payable	$	29,708			$	398		$	30,106

(a)

The determination of fair value related to the inventory acquired was still in progress as of the date of this filing. The amount above represents only the carrying value of the inventory on ~~TRP’s~~Power Solutions’ balance sheet as of the acquisition date. ~~The measurement period adjustment noted above for inventory relates to additional inventory received from TE, as well as inventory on customer consignments that was not previously accounted for.~~

(b)

The appraisals related to machinery and equipment acquired were incomplete as of this filing date and, as such, the amount noted above represents only the carrying value of those assets on ~~TRP’s~~Power Solutions’ balance sheet as of the acquisition date. ~~The measurement period adjustment noted above for property, plant and equipment relates to equipment that could not be located upon a physical inventory of the assets acquired.~~

(c)

The Company has identified certain intangible assets related to the ~~TRP~~Power Solutions acquisition, including trademarks and trade names, developed technology and potential in-process research and development, license agreements, non-compete agreements, an investment in a 49%-owned joint venture and customer ~~lists,~~relationships, which are being valued by a third-party appraiser. These appraisals were not complete as of the date of this filing.

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(d)

The amount of goodwill is provisional as of the filing date, as the fair value determination of inventory acquired, and appraisals related to property, plant and equipment, ~~and~~ various intangible assets and certain liabilities such as lease liabilities are still underway. As the final amount of goodwill has not yet been determined or allocated by segment, the Company is unable to determine at this time the portion of goodwill, if any, that will be deductible for tax purposes.

~~(e)~~

As part of the consideration paid or payable, the Company granted Tyco a license related to three of the Company’s patents. The valuation related to this license grant was not complete as of the date of this filing.

~~(f)~~

Deferred consideration represents the Company’s estimate of a working capital adjustment which is payable to the seller. Such adjustment must be agreed upon between the Company and the seller, and has not yet been finalized as of the date of this filing.

The results of operations of ~~TRP~~Power Solutions have been included in the Company’s consolidated financial statements for the period subsequent to ~~March 29, 2013.~~the June 19, 2014 acquisition date. During each of the three and six months ended June 30, 2014, the Power Solutions acquisition contributed revenue of $7.2 million and a net loss of approximately $0.8 million to the Company’s consolidated financial results. The net loss resulted primarily from severance payments incurred by the Company immediately subsequent to the acquisition date.

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The following unaudited pro forma information presents a summary of the combined results of operations of the Company and the aggregate results of TRP, Array and Power Solutions for the periods presented as if the 2013 Acquisitions had occurred on January 1, 2012 and the acquisition of Power Solutions had occurred on January 1, 2013, along with certain pro forma adjustments. These pro forma adjustments give effect to the amortization of certain definite-lived intangible assets, adjusted depreciation based upon estimated fair value of assets acquired, interest expense and amortization of deferred financing costs related to the financing of the business combinations, and related tax effects. The 2014 unaudited pro forma net earnings were adjusted to exclude $10.2 million ($6.9 million after tax) of non-recurring expenses which were incurred in connection with the Power Solutions business combination. The 2013 unaudited pro forma net earnings were adjusted to include these charges in addition to an estimated non-recurring expense related to a fair value adjustment to acquisition-date inventory of $1.8 million and $4.4 million ($1.1 million and $2.7 million after tax) during the three and six months ended June 30, 2013, TRP contributed $22.0 million of revenues to the Company. As the Company’s determination and allocation of management fees and TRP-specific overhead charges is still underway, TRP’s contribution to the Company’s net earnings is not yet available.

respectively. The ~~unaudited~~ pro forma ~~information below presents the combined operating~~ results ~~of the Company and TRP. The unaudited pro forma results are presented for illustrative purposes only. They~~ do not reflect the realization of any potential cost savings, or any related integration costs. Certain cost savings may result from the ~~TRP acquisition;~~acquisition of Power Solutions; however, there can be no assurance that these cost savings will be achieved. ~~These~~The unaudited pro forma results doare presented for illustrative purposes only and are not ~~purport to be~~necessarily indicative of the results that would have actually been obtained if the ~~TRP acquisition~~acquisitions had occurred ~~as of January 1, 2012,~~on the assumed dates, nor is the pro forma data intended to be a projection of results that may be obtained in the ~~future. The following unaudited pro forma consolidated results of operations assume that~~future (in thousands):

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2014			2013		2014		2013

Revenue	$	136,984		$	161,481	$	278,451	$	305,250
Net earnings		(3,336	)		1,382		233		(5,977	)
Earnings per Class A common share - basic and diluted		(0.28	)		0.11		0.01		(0.51	)
Earnings per Class B common share - basic and diluted		(0.29	)		0.12		0.02		(0.53	)

2013 Acquisitions:

On March 29, 2013, the Company completed its acquisition of TRP ~~was~~for $21.0 million, net of cash acquired. The Company’s purchase of TRP consisted of the integrated connector module (“ICM”) family of products, including RJ45, 10/100 Gigabit, 10G, PoE/PoE+, MRJ21 and RJ.5, a line of modules for smart-grid applications, and discrete magnetics.

On August 20, 2013, the Company completed asits acquisition of ~~January 1, 2012.~~Array, a manufacturer of aerospace and mil-spec connector products based in Miami, Florida, for $10.0 million in cash. The ~~pro forma results noted below for~~acquisition of Array expands the Company’s portfolio of connector products that can be offered to the combined customer base, and provides an opportunity to sell other products that Bel manufactures to Array’s customers. Array has become part of Bel’s Cinch Connector business.

During the three and six months ended June 30, ~~2012 also include the effects of the 2012 Acquisitions discussed below (dollars in thousands except per share data):~~

Three Months Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012

Revenue $ 93,981 $ 95,066 $ 177,510 $ 181,461
Net earnings 2,427 4,474 4,575 7,254
Earnings per Class A common share - basic and diluted 0.20 0.36 0.38 0.58
Earnings per Class B common share - basic and diluted 0.22 0.38 0.41 0.62

~~2012 Acquisitions~~:

~~On March 9, 2012,~~2014, the Company completed its acquisition of 100% of the issued and outstanding capital stock of GigaCom with a cash payment of $2.7 million (£1.7 million). GigaCom, located in Gothenburg, Sweden, is a supplier of expanded beam fiber optic technology and a participant in the development of next-generation commercial aircraft components. GigaCom has become part of Bel’s Cinch Connector business. Management believes that GigaCom’s offering of expanded beam fiber optic (“EBOSA®”) products will enhance the Company’s position within the growing aerospace and military markets.

On July 31, 2012, the Company completed its acquisition of 100% of the issued and outstanding capital stock of Fibreco with a cash payment, net of $2.7 million of cash acquired, of $13.7 million (£8.7 million). Fibreco, located in the United Kingdom, is a supplier of a broad range of expanded beam fiber optic components for use in military communications, outside broadcast and offshore exploration applications. Fibreco has become part of Bel’s interconnect product group under the Cinch Connector business. Management believes that the addition of Fibreco’s fiber optic-based product line to Cinch’s broad range of copper-based products will increase Cinch’s presence in emerging fiber applications within the military, aerospace and industrial markets. In addition, management believes the acquisition provides access to a range of customers for the recently acquired GigaCom EBOSA® product.

On September 12, 2012, the Company completed its acquisition of 100% of the issued and outstanding capital stock of Powerbox, now known as Bel Power Europe, with a cash payment, net of $0.2 million of cash acquired, of $3.0 million. The Company also granted 30,000 restricted shares of the Company’s Class B common stock in connection with this acquisition. Compensation expense equal to the grant date fair value of these restricted shares of $0.6 million is being recorded ratably through September 2014. Bel Power Europe, located near Milan, Italy, develops high-power AC-DC power conversion solutions targeted at the broadcasting market. The acquisition of Bel Power Europe will allow Bel to expand its portfolio of power product offerings to include AC-DC products and will also establish a European design center located close to several of Bel’s existing customers.

~~Acquisition-related costs relating to the 2012 Acquisitions amounted to less than~~incurred $0.1 million ~~during each~~and $0.1 million, respectively, of acquisition-related costs associated with 2012 and 2013 Acquisitions. During the ~~three-month periods~~three and six months ended June 30, 2013, the Company incurred acquisition costs of $0.3 million and $0.7 million, respectively, related to the 2012 and ~~$0.1 million during each of the six-month periods ended June 30,~~ 2013 ~~and 2012.~~Acquisitions. These costs are included in selling, general and administrative expense in the accompanying condensed consolidated statements of ~~operations.~~operations for the three and six months ended June 30, 2014 and 2013.

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~~During~~The purchase price allocations for TRP and Array were finalized during the ~~year ended December 31, 2012, the Company completed the purchase accounting related to the GigaCom and Fibreco acquisitions.~~first quarter of 2014. The ~~initial accounting related to the Bel Power Europe acquisition is not complete as of the filing date of this Form 10-Q; accordingly, the~~ following table ~~reflects~~depicts the ~~Company’s initial estimate of the~~finalized respective acquisition date fair values of the consideration ~~transferred~~paid and identifiable net assets acquired related to Bel Power Europe, together with the finalized acquisition date fair values of the consideration transferred and identifiable net assets acquired related to the GigaCom and Fibreco acquisitions (in thousands):

				Measurement			Acquisition-Date			TRP									Array									2013 Acquisitions
	Acquisition-Date			Period			Fair Values						Measurement			March 29,						Measurement			August 20,			Acquisition-Date
	Fair Values			Adjustments			(As adjusted)			March 29,			Period			2013			August 20,			Period			2013			Fair Values
Cash and cash equivalents	$	2,991		$	-		$	2,991
										2013			Adjustments			(As finalized)			2013			Adjustments			(As finalized)			(As finalized)
Cash										$	8,388		$	-		$	8,388		$	-		$	-		$	-		$	8,388
Accounts receivable		3,750			3			3,753			11,580			(39	)		11,541			994			-			994			12,535
Inventories		1,061			(16	)		1,045			6,258			1,097			7,355			2,588			(1,595	)		993			8,348
Other current assets		90			-			90			1,953			(334	)		1,619			83			345			428			2,047
Property, plant and equipment		502			248			750			4,693			1,097			5,790			2,285			1,225			3,510			9,300
Intangible assets		30			10,358			10,388			-			6,110			6,110			-			1,470			1,470			7,580
Other assets											1,151			198			1,349			84			1,663			1,747			3,096
Total identifiable assets		8,424			10,593			19,017			34,023			8,129			42,152			6,034			3,108			9,142			51,294

Accounts payable		(1,702	)		-			(1,702	)		(8,565	)		331			(8,234	)		(677	)		1			(676	)		(8,910	)
Accrued expenses		(1,736	)		-			(1,736	)		(4,003	)		(462	)		(4,465	)		(206	)		(79	)		(285	)		(4,750	)
Notes payable		(216	)		-			(216	)
Income taxes payable		(264	)		(60	)		(324	)
Deferred income tax liability, current		(70	)		-			(70	)
Deferred income tax liability, noncurrent		-			(2,297	)		(2,297	)
Other long-term liabilities		(216	)		-			(216	)
Other current liabilities											(25	)		(734	)		(759	)		(214	)		214			-			(759	)
Noncurrent liabilities											-			(586	)		(586	)		(643	)		(1,105	)		(1,748	)		(2,334	)
Total liabilities assumed		(4,204	)		(2,357	)		(6,561	)		(12,593	)		(1,451	)		(14,044	)		(1,740	)		(969	)		(2,709	)		(16,753	)
Net identifiable assets acquired		4,220			8,236			12,456			21,430			6,678			28,108			4,294			2,139			6,433			34,541
Goodwill		17,965			(8,020	)		9,945			8,278			(7,038	)		1,240			5,666			(2,094	)		3,572			4,812
Net assets acquired	$	22,185		$	216		$	22,401		$	29,708		$	(360	)	$	29,348		$	9,960		$	45		$	10,005		$	39,353


Cash paid	$	22,138			263		$	22,401		$	22,400		$	6,948		$	29,348		$	9,960		$	45		$	10,005		$	39,353
Assumption of severance payment											109			(109	)		-			-			-			-			-
Fair value of consideration
transferred											22,509			6,839			29,348			9,960			45			10,005			39,353
Deferred consideration		47			(47	)		-			7,199			(7,199	)		-			-			-			-			-
Fair value of consideration transferred	$	22,185		$	216		$	22,401
Total consideration paid										$	29,708		$	(360	)	$	29,348		$	9,960		$	45		$	10,005		$	39,353

The measurement period adjustments noted above primarily relate to adjustments to fair value based on the appraisals on inventory, property, plant and equipment, and intangible assets. In addition, various other asset and liability accounts had measurement period adjustments related to deferred taxes.

The results of operations of the ~~2012~~2013 Acquired Companies have been included in the Company’s consolidated financial statements for the ~~periods~~period subsequent to their respective acquisition dates. During the three and six months ended June 30, 2014, the 2013 ~~Fibreco and Bel Power Europe~~Acquired Companies contributed ~~combined revenues~~revenue of ~~$3.0~~$19.7 million and ~~$5.9~~$37.6 million, respectively, and ~~combined~~ net earnings of ~~$0.1~~$3.7 million and ~~$0.8~~$4.8 million, respectively, to the Company’s consolidated financial results. ~~The acquisition~~During each of GigaCom has contributed to the Bel’s research and development efforts and has not resulted in third-party sales. GigaCom incurred expenses, primarily related to research and development, of $0.2 million and $0.5 million during the three and six months ended June 30, 2013, ~~respectively.~~the 2013 Acquired Companies contributed revenue of $22.2 million and net earnings of $3.3 million to the Company’s consolidated financial results.

4. FAIR VALUE MEASUREMENTS

Fair value is defined as an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based upon the best use of the asset or liability at the measurement date. Entities are required to use a fair value hierarchy which maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

Level 1 – Observable inputs such as quoted market prices in active markets

Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable

Level 3 – Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions

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As of June 30, ~~2013~~2014 and December 31, ~~2012,~~2013, the Company held certain financial assets that are measured at fair value on a recurring basis. These consisted of securities that are among the Company’s investments in a ~~rabbi trust~~Rabbi Trust which are intended to fund the Company’s Supplemental Executive Retirement Plan (“SERP”) obligations, and other marketable securities described below. The securities that are held in the ~~rabbi trust~~Rabbi Trust are categorized as available-for-sale securities and are included as other assets in the accompanying condensed consolidated balance sheets at June 30, ~~2013~~2014 and December 31, ~~2012.~~2013. The gross unrealized gains associated with the ~~investments~~investment securities held in the ~~rabbi trust~~Rabbi Trust were $0.6 million and $0.4 million at ~~each of~~ June 30, ~~2013~~2014 and December 31, ~~2012.~~2013, respectively. Such unrealized gains are included, net of tax, in accumulated other comprehensive ~~loss.~~income.

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As of June 30, ~~2013~~2014 and December 31, ~~2012,~~2013, the Company had other marketable securities with a combined fair value of less than $0.1 million at each date, and gross unrealized ~~losses~~gains of less than $0.1 million at each date. Such unrealized ~~losses~~gains are included, net of tax, in accumulated other comprehensive ~~loss.~~income. The fair value of the equity securities is determined based on quoted market prices in public markets and is categorized as Level 1. The Company does not have any financial assets measured at fair value on a recurring basis categorized as Level 3, and there were no transfers in or out of Level 1, Level 2 or Level 3 during the ~~three~~first six months ~~ended June 30, 2013 and 2012.~~of 2014. There were no changes to the Company’s valuation techniques used to measure asset fair values on a recurring or nonrecurring basis during the first six months ~~ended June 30, 2013.~~of 2014.

The following table sets forth by level, within the fair value hierarchy, the Company’s financial assets accounted for at fair value on a recurring basis as of June 30, ~~2013~~2014 and December 31, ~~2012~~2013 (dollars in thousands).

			Assets at Fair Value Using								Assets at Fair Value Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
As of June 30, 2013
As of June 30, 2014
Available-for-sale securities:
Investments held in rabbi trust	$	5,984	$	5,984	$	-	$	-
Investments held in Rabbi Trust									$	3,485	$	3,485	$	-	$	-
Marketable securities		3		3		-		-		4		4		-		-

Total	$	5,987	$	5,987	$	-	$	-	$	3,489	$	3,489	$	-	$	-

As of December 31, 2012
As of December 31, 2013
Available-for-sale securities:
Investments held in rabbi trust	$	6,014	$	6,014	$	-	$	-
Investments held in Rabbi Trust									$	3,313	$	3,313	$	-	$	-
Marketable securities		2		2		-		-		3		3		-		-

Total	$	6,016	$	6,016	$	-	$	-	$	3,316	$	3,316	$	-	$	-

The Company has other financial instruments, such as cash equivalents, cash equivalents held within the Rabbi Trust, accounts receivable, notes receivable, accounts payable, notes payable and accrued expenses, which are not measured at fair value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid or short-term nature. The fair value of the Company’s long-term debt is estimated using a discounted cash flow method based on interest rates that are currently available for debt issuances with similar terms and maturities. At June 30, 2014, the estimated fair value of long-term debt was $144.8 million compared to a carrying amount of $145.0 million. The Company did not have any other financial liabilities within the scope of the fair value disclosure requirements as of June 30, ~~2013~~2014 or December 31, ~~2012.~~2013.

Nonfinancial assets and liabilities, such as goodwill, indefinite-lived intangible assets and long-lived assets, are accounted for at fair value on a nonrecurring basis. These items are tested for impairment on the occurrence of a triggering event or, in the case of goodwill and indefinite-lived intangible assets, on at least an annual basis. There were no triggering events that occurred during the six months ended June 30, ~~2013~~2014 or ~~2012~~2013 that would warrant interim impairment testing.

~~Return to Index~~

5. INVENTORIES

The components of inventories are as follows (dollars in thousands):

	June 30,		December 31,		June 30,		December 31,
	2013		2012		2014		2013
Raw materials	$	31,164	$	26,157	$	48,873	$	29,428
Work in progress		10,790		8,200		12,261		8,783
Finished goods		24,650		20,567		37,572		31,808
	$	66,604	$	54,924	$	98,706	$	70,019

At June 30, 2014, Power Solutions inventory with a book value of $33.4 million is included in the table above.

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6.	PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following (dollars in thousands):

	June 30,			December 31,
	2014			2013
Land	$	3,315		$	3,229
Buildings and improvements		31,156			25,216
Machinery and equipment		107,032			82,420
Construction in progress		5,291			4,042
		146,794			114,907
Accumulated depreciation		(79,743	)		(74,011	)
	$	67,051		$	40,896

At June 30, 2014, Power Solutions property, plant and equipment with a book value of $28.2 million is included in the table above.

7. BUSINESS SEGMENT INFORMATION

The Company operates in one industry with three reportable operating segments, which are geographic in nature. The segments consist of North America, Asia and Europe. The primary criteria by which financial performance is evaluated and resources are allocated are sales and income from operations. The following is a summary of key financial data (dollars in thousands):

	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
	June 30,						June 30,						June 30,						June 30,
	2013			2012			2013			2012			2014			2013			2014			2013
Total segment sales:
North America	$	32,301		$	35,455		$	61,523		$	71,980		$	39,405		$	32,301		$	70,859		$	61,523
Asia		64,036			43,795			96,760			78,642			61,968			64,036			111,860			96,760
Europe		10,591			7,227			20,716			15,217			16,550			10,591			27,441			20,716
Total segment sales		106,928			86,477			178,999			165,839			117,923			106,928			210,160			178,999
Reconciling item:
Intersegment sales		(12,947	)		(13,255	)		(21,990	)		(27,056	)		(18,484	)		(12,947	)		(28,075	)		(21,990	)
Net sales	$	93,981		$	73,222		$	157,009		$	138,783		$	99,439		$	93,981		$	182,085		$	157,009

Income (loss) from operations:
Income from operations:
North America	$	(2,012	)	$	1,953		$	(3,495	)	$	4,263		$	(1,617	)	$	(2,012	)	$	(734	)	$	(3,495	)
Asia		4,642			523			3,977			(1,039	)		4,715			3,776			6,388			3,112
Europe		(82	)		(143	)		659			538			616			(105	)		941			615
	$	2,548		$	2,333		$	1,141		$	3,762		$	3,714		$	1,659		$	6,595		$	232

													June 30,			December 31,
														2014			2013
Total Assets:
North America													$	175,953		$	117,261
Asia														202,476			148,780
Europe														78,880			42,100
														457,309			308,141
Unallocated Goodwill														37,534			-
													$	494,843		$	308,141

~~The following items are included in the income (loss) from operations presented above:~~

Recent Acquisitions – ~~During the three and six months ended~~At June 30, ~~2013,~~2014, Power Solutions’ total assets of $181.4 million are included in the ~~acquisition~~table above.

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The acquisitions of TRP in March 2013, Array in August 2013 and Power Solutions in June 2014 contributed ~~$22.0 million in~~to Bel’s segment sales, to the Company’s Asia operating segment in each period. During the three and six months ended June 30, 2013, the 2012 acquisitions of Fibreco and Powerbox contributed combined revenues of $3.0 million and $5.9 million, respectively, and income from operations ~~of $0.2 million~~ and $1.1 million, respectively, to the Company’s Europe operating segment. The 2012 Acquisitions did not have a material impact on the Company’s condensed consolidated statement of operations for the three or six months ended June 30, 2012.total assets as follows:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2014			2013		2014			2013
Sales to External Customers:
North America:
Array	$	1,903		$	-	$	3,544		$	-
Power Solutions		5,037			-		5,037			-
		6,940			-		8,581			-
Asia:
TRP		17,227			21,788		32,831			21,788
Power Solutions		357			-		357			-
		17,584			21,788		33,188			21,788
Europe:
TRP		555			392		1,186			392
Power Solutions		1,839			-		1,839			-
		2,394			392		3,025			392
Net sales from 2013-2014 acquisitions		26,918			22,180		44,794			22,180

Income from operations:
North America:
Array		(175	)		-		(682	)		-
Power Solutions		(1,125	)		-		(1,125	)		-
		(1,300	)		-		(1,807	)		-
Asia:
TRP		3,710			3,596		5,110			3,587
Power Solutions		(162	)		-		(162	)		-
		3,548			3,596		4,948			3,587
Europe:
TRP		128			104		228			104
Power Solutions		297			-		297			-
		425			104		525			104
Total income from operations from
2013-2014 acquisitions	$	2,673		$	3,700	$	3,666		$	3,691

Segment Sales – Segment sales are attributed to individual segments based on the geographic source of the billing for such customer sales. Transfers between geographic areas include finished products manufactured in foreign countries which are then transferred to the United States and Europe for sale; finished goods manufactured in the United States which are transferred to Europe and Asia for sale; and semi-finished components manufactured in any one of the ~~United States which are sold~~geographic segments and transferred to ~~Asia~~any of the other geographic segments for sale or further processing. Income ~~(loss)~~ from operations represents net sales less operating costs and expenses.

~~Return to Index~~

7.8. INCOME TAXES

At June 30, ~~2013~~2014 and December 31, ~~2012,~~2013, the Company has approximately ~~$2.7~~$2.5 million and $2.2 million, respectively, of liabilities for uncertain tax positions ($~~0.5~~0.8 million and $1.0 million, respectively, included in income taxes payable and ~~$2.2~~$1.7 million and $1.2 million, respectively, included in liability for uncertain tax positions) all of which, if recognized, would reduce the Company’s effective tax rate.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company is no longer subject to U.S. federal examinations by tax authorities for years before 2010 and for state examinations before 2007. Regarding foreign subsidiaries, the Company is no longer subject to examination by tax authorities for years before ~~2004~~2008 in Asia and generally 2006 in Europe.

As a result of the expiration of the statute of limitations for specific jurisdictions, it is reasonably possible that the related unrecognized benefits for tax positions taken regarding previously filed tax returns may change materially from those recorded as liabilities for uncertain tax positions in the Company’s condensed consolidated financial statements at June 30, ~~2013.~~2014. A total of ~~$0.6~~$0.8 million of previously recorded liabilities for uncertain tax positions relates principally to the ~~2007~~2010 tax year. The statute of limitations related to these liabilities is scheduled to expire on September 15, ~~2013.~~2014.

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The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits arising from uncertain tax positions as a component of the current provision for income taxes. During each of the six months ended June 30, ~~2013~~2014 and ~~2012,~~2013, the Company recognized an immaterial amount of interest and penalties ~~and no interest and penalties, respectively,~~ in the condensed consolidated statements of operations. The Company has approximately $0.2 million accrued for the payment of such interest and penalties at June 30, ~~2013~~2014 and December 31, ~~2012,~~2013, a portion of which is included in ~~the~~each of income taxes payable and liability for uncertain tax positions in the accompanying condensed consolidated balance sheets at each date.

Upon completion of the acquisition of ~~Fibreco, Fibreco~~Power Solutions, it had deferred tax assets of $3.0 million, arising from various temporary differences, which are included in the condensed consolidated balance sheet at June 30, 2014. At June 30, 2014, the fair market value reports have not been completed and therefore the Company had no additional deferred tax amounts relating to this acquisition.

The Company intends to make elections to step up the tax basis of the 2014 acquisitions to fair value under IRC Section 338(g).

Upon the acquisition of TRP, TRP had a deferred tax asset in the amount of $2.2 million arising from various timing differences related to depreciation and accrued expenses. Upon the acquisition of Array, Array had a deferred tax liability ~~in the amount~~ of ~~$0.1~~$0.7 million arising from ~~various temporary differences.~~timing differences related to depreciation and a deferred tax asset of $2.1 million arising from the NOL acquired. In connection with the ~~2012~~2013 Acquisitions, the Company was required to complete a ~~preliminary~~ fair market value report of property, plant and equipment and intangibles. As a result of that report, the Company established deferred tax liabilities at the date of acquisition in the ~~amounts~~amount of ~~$1.7~~$0.6 million and ~~$0.6~~$1.0 million respectively for the ~~Fibreco~~TRP and ~~GigaCom~~Array acquisitions. At June 30, ~~2013 and December 31, 2012,~~2014, a ~~combined~~net deferred tax ~~liability~~asset of ~~$2.1~~$1.5 million ~~and $2.2 million, respectively,~~ remains on the condensed consolidated balance sheets. Upon completion of the acquisition of TRP, TRP had deferred tax assets of $2.2 million arising from various temporary differences, which are included in the condensed consolidated balance sheet at June 30, 2013. It is the Company’s intention to repatriate substantially all net income from its wholly owned PRC subsidiary, DG Transpower, a Chinese Limited Company, to its indirect Hong Kong parent company Transpower Technologies (Hong Kong) Ltd. Applicable income and dividend withholding taxes have been reflected in the accompanying condensed consolidated statements of operations for the three and six months ended June 30, 2013. However, U.S. deferred taxes need not be provided under current U.S. tax law. At June 30, 2013, the fair market value reports have not been completed and therefore the Company had no additional deferred tax amounts relating to the Bel Power Europe and TRP acquisitions.sheet.

The Company ~~has made elections under Internal Revenue Code (“IRC”) Section 338(g)~~does not intend to ~~step-up~~make any election to step up the tax basis of the ~~2012 Acquisitions~~2013 acquisitions to fair ~~value. The elections made~~value under IRC Section 338(g) ~~affect only the U.S. income taxes (not those of the foreign countries where the acquired entities were incorporated)~~.

On ~~January 2,~~December 31, 2013, ~~President Obama signed~~under the “American Taxpayer Relief Act” (“ATRA”)~~. Among other things, ATRA extends~~, the Research and Experimentation credit (“R&E”)~~, which expired at~~ expired. The Company did not recognize any R&E credits during the ~~end of 2011, through 2013 and~~six months ended June 30, 2014. If the R&E credit is extended back to January 1, 2014, ~~respectively. Under Accounting Standards Codification (“ASC”) 740,~~ ~~Income Taxes, the effects of the new legislation are recognized upon enactment, which is when the President signs a tax bill into law. Although the extenders were effective retroactively for 2012,~~ the Company ~~could only consider currently enacted tax law as of~~will recognize the ~~balance sheet date in determining current and deferred taxes~~R&E credit at ~~December 31, 2012.~~that time. The annual R&E credit is approximately $0.4 million. During the first quarter of 2013, the Company recognized ~~the~~a $0.4 million R&E credit from 2012 as an increase in the March 31, 2013 quarterly benefit for income taxes.

The Company continues to monitor proposed legislation affecting the taxation of transfers of U.S. intangible property and other potential tax law changes.

~~Return to Index~~

8.9. ACCRUED EXPENSES

Accrued expenses consist of the following (dollars in thousands):

	June 30,		December 31,		June 30,		December 31,
	2013		2012		2014		2013
Sales commissions	$	1,837	$	1,295	$	1,903	$	1,431
Subcontracting labor		2,818		2,408		2,218		2,406
Salaries, bonuses and related benefits		8,568		6,023		24,609		13,674
Litigation reserve		11,550		11,549		726		723
Consideration payable on Transpower acquisition		786		-
Warranty accrual						3,667		-
Other		4,187		4,085		7,312		4,208
	$	29,746	$	25,360	$	40,435	$	22,442

~~Accrued Restructuring Costs~~Warranty Accrual - Power Solutions generally offers its customers a standard two-year warranty on power products sold, although warranty periods may vary by product type and application. The Company reviews its warranty liability quarterly based on an analysis of actual expenses and failure rates by specific product lines and estimated future costs and projected failure rate trends by specific product lines. Factors taken into consideration when evaluating the Company's warranty reserve are (i) historical claims for each product, (ii) the maturity of the product within its life cycle, (iii) volume increases, (iv) life of warranty, (v) historical warranty repair costs and (vi) other factors. To the extent that actual experience differs from our estimate, the provision for product warranties will be adjusted in future periods. Actual warranty repair costs are charged against the reserve balance as incurred.

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A tabular presentation of the activity within the warranty accrual account for the period from the acquisition date of Power Solutions through June 30, 2014 is presented below (in thousands):

	June 30,
	2014
Beginning balance as of June 19, 2014	$	4,111
Charges and costs accrued		45
Adjustments related to pre-existing warranties (including changes in estimates)		-
Less repair costs incurred		(521	)
Change due to foreign currency		32
Ending balance as of June 30, 2014	$	3,667

~~Activity~~

10.

DEBT

At December 31, 2013, the Company maintained a $30 million line of credit with Bank of America (the “Credit Agreement”), which was due to expire on October 14, 2016. At December 31, 2013, the borrowings under the line of credit amounted to $12.0 million and ~~liability balances~~the balance available under the Credit Agreement was $18.0 million. The Credit Agreement bore interest at LIBOR plus 1.00% to 1.50% based on certain financial statement ratios maintained by the Company. The interest rate in effect on the borrowings outstanding at December 31, 2013 was 1.4%. The Company incurred interest expense of less than $0.1 million related to ~~restructuring charges for~~the borrowings under the Credit Agreement during the six months ended June 30, 2014. There was no interest expense related to the line of credit during the six months ended June 30, 2013 ~~are shown~~as there were no borrowings outstanding during that period. Under the terms of the Credit Agreement, the Company was required to maintain certain financial ratios and comply with other financial conditions. During the six months ended June 30, 2014, the Company repaid the full $12.0 million balance outstanding and terminated the Credit Agreement.

On June 19, 2014, the Company entered into a senior Credit and Security Agreement with KeyBank National Association (“KeyBank”), as administrative agent and lender, which was amended on June 30, 2014 principally to add a syndicate of additional lenders (as so amended, the “New Secured Credit Agreement”). The maturity date of the New Secured Credit Agreement is June 18, 2019.

The New Secured Credit Agreement consists of (i) a $50 million revolving credit facility (“Revolver”), (ii) a $145 million term loan facility (“Term Loan”) and (iii) a $70 million delayed draw term loan (“DDTL”). Under the terms of the New Secured Credit Agreement, the Company is entitled, subject to the satisfaction of certain conditions, to request additional commitments under the revolving credit facility or term loans in the ~~table below (dollars in thousands). The liability at December 31, 2012 related~~aggregate principal amount of up to $100 million to the ~~final severance payments due related~~extent that existing or new lenders agree to provide such additional commitments and/or term loans.

The obligations of the Company under the New Secured Credit Agreement are guaranteed by certain of the Company's material U.S. subsidiaries (together with the Company, the “Loan Parties”) and are secured by a first priority security interest in substantially all of the existing and future personal property of the Loan Parties, certain material real property of the Loan Parties and certain of the Loan Parties’ material U.S. subsidiaries, including 65% of the voting capital stock of certain of the Loan Parties’ direct foreign subsidiaries.

The borrowings under the New Secured Credit Agreement will bear interest at a rate equal to, at the Company's option, either (1) LIBOR, plus a margin ranging from 1.75% per annum to 3.00% per annum depending on the Company’s leverage ratio, or (2)(a) an “Alternate Base Rate,” which is the highest of (i) the federal funds rate plus 0.50%, (ii) KeyBank’s prime rate and (iii) the LIBOR rate with a maturity of one month plus 1.00%, plus (b) a margin ranging from 0.75% per annum to 2.00% per annum, depending on the Company’s leverage ratio. The interest rate in effect at June 30, 2014 was 3.0%, which consists of LIBOR of 0.25% plus the Company’s margin of 2.75%.

The New Secured Credit Agreement contains customary representations and warranties, covenants and events of default and financial covenants that measure (i) the ratio of the Company's total funded indebtedness, on a consolidated basis, to the ~~closure~~amount of the ~~Vinita, Oklahoma manufacturing facility.~~Company’s consolidated EBITDA, as defined, (“Leverage Ratio”) and (ii) the ratio of the amount of the Company’s consolidated EBITDA to the Company’s consolidated fixed charges (“Fixed Charge Coverage Ratio”). If an event of default occurs, the lenders under the New ~~charges noted below relate~~Secured Credit Agreement would be entitled to ~~severance~~take various actions, including the acceleration of amounts due thereunder and all actions permitted to be taken by a secured creditor. At June 30, 2014, the Company was in compliance with its most restrictive covenant, the Leverage Ratio. The unused credit available under the credit facility at June 30, 2014 was $120 million, of which we had the ability to incur total additional indebtedness of $100.1 million without violating our Leverage Ratio covenant based on the Company’s existing consolidated EBITDA.

Concurrent with its entry into the New Secured Credit Agreement on June 19, 2014, the Company borrowed $145.0 million under the Term Loan to complete its acquisition of Power Solutions. During the three and six months ended June 30, 2014, the Company recorded $5.4 million in deferred financing costs, ~~associated with an~~which will be amortized over the five-year term, and incurred $0.2 million of interest expense. At June 30, 2014, borrowings outstanding related solely to the $145.0 million Term Loan. The $70.0 million DDTL and $50.0 million Revolver were fully available at June 30, 2014.

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Scheduled principal payments of the long-term debt outstanding at June 30, 2014 are as follows (in thousands):

2014	$	3,625
2015		9,063
2016		10,875
2017		12,687
2018		16,313
Thereafter		92,437
Total long-term debt		145,000
Less: Current maturities of long-term debt		(7,250	)
Noncurrent portion of long-term debt	$	137,750

See Note 14 for discussion of additional ~~reduction in workforce implemented in~~borrowings under the ~~second quarter of 2013.~~New Secured Credit Agreement subsequent to the June 30, 2014 quarter-end.

Liability at New Cash Payments and Liability at
December 31, 2012 Charges Other Settlements June 30, 2013
Severance costs $ 122 $ 1,239 $ (170 ) $ 1,191
Transportation of equipment - 100 (100 ) -
Other restructuring charges - 48 (48 ) -
Total $ 122 $ 1,387 $ (318 ) $ 1,191

9.11. RETIREMENT FUND AND PROFIT SHARING PLAN

The Company maintains the Bel Fuse Inc. Employees’ Savings Plan (the “U.S. Plan”), a defined contribution plan that is intended to meet the applicable requirements for tax-qualification under sections 401(a) and (k) of the IRC. The ~~Employees’ Savings~~U.S. Plan allows eligible employees to voluntarily contribute a percentage of their eligible compensation, subject to Code limitations, which contributions are matched by the Company. The Company’s matching contributions are equal to 100% of the first 1% of compensation contributed by participants, and 50% of the next 5% of compensation contributed by participants. The expense for the three months ended June 30, ~~2013~~2014 and ~~2012~~2013 amounted to approximately $0.1 million in each period. The expense for the six months ended June 30, ~~2013~~2014 and ~~2012~~2013 amounted to approximately $0.3 million in each period. Prior to January 1, 2012, the ~~plan’s~~U.S. Plan’s structure provided for a Company match and discretionary profit sharing contributions that were made in the form of the Company’s common stock. As of June 30, ~~2013,~~2014, the ~~plan~~U.S. Plan owned ~~14,925~~14,886 and ~~209,892~~182,539 shares of Bel Fuse Inc. Class A and Class B common stock, respectively.

The ~~Company’s subsidiaries in Asia, other than TRP, have~~Company also has a retirement fund ~~covering~~in Asia (the “Asia Plan”) which covers substantially all of ~~their~~its Hong Kong-based full-time employees. Eligible employees contribute up to 5% of salary to the fund. In addition, the Company must contribute a minimum of 5% of eligible salary, as determined by Hong Kong government regulations. The Company currently contributes 7% of eligible salary in cash or Company stock. The expense for the three months ended June 30, ~~2013~~2014 and ~~2012~~2013 amounted to approximately $0.1 million in each period. The expense for the six months ended June 30, ~~2013~~2014 and ~~2012~~2013 amounted to approximately $0.1 million in each period. As of June 30, ~~2013,~~2014, the ~~plan~~Asia Plan owned 3,323 and 17,342 shares of Bel Fuse Inc. Class A and Class B common stock, respectively.

The Company maintains a SERP, which is designed to provide a limited group of key management and highly compensated employees of the Company with supplemental retirement and death benefits.

~~Return to Index~~

The components of SERP expense are as follows (dollars in thousands):

	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
	June 30,				June 30,				June 30,				June 30,
	2013		2012		2013		2012		2014		2013		2014		2013
Service cost	$	139	$	109	$	278	$	218	$	138	$	139	$	276	$	278
Interest cost		112		104		224		208		135		112		270		224
Amortization of adjustments		77		58		154		116		46		77		92		154
Total SERP expense	$	328	$	271	$	656	$	542	$	319	$	328	$	638	$	656

June 30, December 31,
2013 2012
Balance sheet amounts:
   Minimum pension obligation
      and unfunded pension liability $ 11,713 $ 11,045

   Amounts recognized in accumulated
      other comprehensive loss, pretax:
         Prior service cost $ 968 $ 877
         Net gains 2,804 2,884
$ 3,772 $ 3,761

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	June 30,		December 31,
	2014		2013
Balance sheet amounts:
Minimum pension obligation
and unfunded pension liability	$	11,376	$	10,830

Amounts recognized in accumulated
other comprehensive loss, pretax:
Prior service cost	$	1,140	$	1,230
Net loss		1,004		1,004
	$	2,144	$	2,234

~~10.~~12. ACCUMULATED OTHER COMPREHENSIVE ~~LOSS~~INCOME

The components of accumulated other comprehensive ~~loss~~income at June 30, ~~2013~~2014 and December 31, ~~2012~~2013 are summarized below (dollars in thousands):

June 30, December 31,
2013 2012

Foreign currency translation adjustment, net of taxes of ($216)
  at June 30, 2013 $ (255 ) $ 927
Unrealized holding gains on available-for-sale
  securities, net of taxes of $150 and $161 as of
  June 30, 2013 and December 31, 2012 238 256
Unfunded SERP liability, net of taxes of ($1,154) and ($1,151) as
  of June 30, 2013 and December 31, 2012 (2,618 ) (2,610 )

Accumulated other comprehensive loss $ (2,635 ) $ (1,427 )

	June 30,			December 31,
	2014			2013

Foreign currency translation adjustment, net of taxes of $200 and $77
at June 30, 2014 and December 31, 2013	$	2,441		$	1,904
Unrealized holding gains on available-for-sale
securities, net of taxes of $234 and $169 as of
June 30, 2014 and December 31, 2013		388			282
Unfunded SERP liability, net of taxes of ($665) and ($693) as
of June 30, 2014 and December 31, 2013		(1,478	)		(1,541	)

Accumulated other comprehensive income	$	1,351		$	645

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Changes in accumulated other comprehensive loss by component during the six months ended June 30, ~~2013~~2014 are as follows. All amounts are net of tax (dollars in thousands).

			Unrealized Holding
	Foreign Currency		Gains on
	Translation		Available-for-		Unfunded
	Adjustment		Sale Securities		SERP Liability				Total

Balance at January 1, 2014	$	1,904	$	282	$	(1,541	)		$	645
Other comprehensive income (loss) before reclassifications		537		106		-				643
Amounts reclassified from accumulated other
comprehensive income (loss)		-		-		63		(a)		63
Net current period other comprehensive income (loss)		537		106		63				706

Balance at June 30, 2014	$	2,441	$	388	$	(1,478	)		$	1,351

(a) This reclassification relates to the amortization of prior service costs associated with the Company's SERP.
This expense is allocated between cost of sales and selling, general and administrative expense based upon the employment

Unrealized Holding
Foreign Currency Gains on
Translation Available-for- Unfunded
Adjustment Sale Securities SERP Liability Total

Balance at January 1, 2013 $ 927 $ 256 $ (2,610 ) $ (1,427 )
     Other comprehensive loss before reclassifications (1,182 ) (18 ) (162 ) (1,362 )
     Amounts reclassified from accumulated other
          comprehensive loss - - 154 154 (a)
     Net current period other comprehensive loss (1,182 ) (18 ) (8 ) (1,208 )

Balance at June 30, 2013 $ (255 ) $ 238 $ (2,618 ) $ (2,635 )

(a) This reclassification from accumulated other comprehensive loss relates to the amortization of prior service costs and gains/losses
associated with the Company's SERP plan. This expense is allocated between cost of sales and selling, general and administrative
expense based upon the employment classification of the plan participants.

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~~11.~~13. COMMITMENTS AND CONTINGENCIES

Leases

The Company leases various ~~facilities. Some of these~~facilities under operating leases ~~require the Company to pay certain executory costs (such as insurance and maintenance).~~expiring through March 2023. At December 31, ~~2012,~~2013, the Company’s total future minimum lease payments for operating leases amounted to ~~$11.5~~$15.3 million. The ~~only significant change since December 31, 2012 relates to the inclusion of TRP lease commitments. At June 30, 2013, the~~Company incurred additional lease commitments ~~related to TRP amounted to $2.7~~upon the acquisition of Power Solutions and at June 30, 2014, Power Solutions’ lease commitments totaled $3.9 million.

Other Commitments

The Company submits purchase orders for raw materials to various vendors throughout the year for current production requirements, as well as forecasted requirements. Certain of these purchase orders relate to special purpose material and, as such, the Company may incur penalties if the order is cancelled. At December 31, ~~2012,~~2013, the Company had outstanding purchase orders related to ~~purchase~~purchases of raw materials in the aggregate amount of ~~$18.8~~$23.4 million and purchase orders related to capital expenditures of ~~$1.7~~$3.0 million. The ~~only significant change since December 31, 2012 relates to~~Company incurred additional commitments upon the ~~inclusion~~acquisition of ~~TRP purchase orders. At~~Power Solutions and at June 30, ~~2013, the Company had additional~~2014, Power Solutions’ purchase orders related to the purchase of raw materials ~~of $4.5~~totaled $15.5 million ~~associated with TRP~~ and ~~additional purchase orders related to~~ capital expenditures ~~of $0.2 million associated with TRP.~~totaled $0.4 million.

Legal Proceedings

The Company is party to a number of legal actions and claims, none of which individually or in the aggregate, in the opinion of management, are expected to have a material adverse effect on the Company’s results of operations or financial position. See the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2012~~2013 for the details of all of Bel’s material pending lawsuits. Certain developments that have arisen in legal proceedings subsequent to the filing of the Company’s Annual Report on Form 10-K are described below.

The Company iswas a defendant in a lawsuit captioned SynQor, Inc. v. Artesyn Technologies, Inc., et al. brought in the United States District Court, Eastern District of Texas in November ~~2007.~~ 2007 (“SynQor I case”). The plaintiff alleged that eleven defendants, including Bel, infringed its patents covering certain power products. With respect to the Company, the plaintiff claimed that the Company infringed its patents related to unregulated bus converters and/or point-of-load (POL) converters used in intermediate bus architecture power supply systems. The case initially went to trial in December ~~2010 and a partial judgment~~2010. A decision was ~~entered on December 29, 2010 based on the jury verdict. The jury found that certain products~~ultimately rendered in November 2013 in favor of the ~~defendants directly and/or indirectly infringe the SynQor patents. The jury awarded damages of $8.1 million against~~plaintiff, and the Company ~~which was recorded by the~~released a payment to SynQor of $10.9 million. The Company assubsequently received a ~~litigation charge in the consolidated statement~~$2.1 million payment from one of ~~operations in the fourth quarter of 2010. On July 11, 2011, the Court awarded supplemental damages of $2.5 million against the Company. Of this amount, $1.9 million is covered through~~its customers related to an indemnification agreement ~~with one~~and reimbursement of Bel’s customers and the remaining $0.6 million was recorded as an expense by the Company during the second quarter of 2011. During the third quarter of 2011, the Company recorded costs and interest associated with this lawsuit of $0.2 million. A final judgment in the case was entered on August 17, 2011. The Company was in the process of appealing the verdict and judgment and filed a notice of appeal with the Federal Circuit Court of Appeals on October 28, 2011. The Company was advised that the full amount of the damage award plus costs and interest would need to be posted as a supersedeas bond upon filing of the notice of appeal. In November 2011, the Company posted a $13.0 million supersedeas bond to the Court in the Eastern District of Texas while the case was on appeal to the Federal Circuit. The amount of the bond was reflected as restricted cash in the accompanying condensed consolidated balance sheets at June 30, 2013 and December 31, 2012. The United States Court of Appeals for the Federal Circuit (“CAFC”) heard oral argument in the SynQor case on October 2, 2012 and issued its opinion on March 13, 2013. In its opinion, the CAFC affirmed the district court’s findings and judgment on all issues up on appeal. The Company and the other Defendants jointly filed a Petition for Rehearing En Banc with the CAFC on April 12, 2013, which was denied by the CAFC on May 14, 2013. The Defendants are in the process of filing a joint petition for certiorari with the Supreme Court.certain legal fees.

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In a related matter, on September 29, 2011, the United States District Court for the Eastern District of Texas ordered SynQor, Inc.’s continuing causes of action for ~~post-injunction~~post-verdict damages to be severed from the original action and assigned to a new case number. The new action captioned SynQor, Inc. v. Artesyn Technologies, Inc., et al. (Case Number 2:11cv444) is a patent infringement action for damages in the form of lost profits and reasonable royalties for the period beginning January 24, ~~2011.~~2011 (“SynQor II case”). SynQor, Inc. also seeks enhanced damages. The Company has an indemnification agreement in place with one of its customers specifically covering ~~post-injunction~~post-verdict damages related to this case. ~~As a result, the Company does not anticipate that its consolidated statement of operations will be materially impacted by any potential post-injunction damages.~~ This case went to trial on July 30, 2013. In April 2014, a final judgment was rendered in this case, whereby the Company was assessed an additional $0.7 million in post-verdict damages. This amount was accrued at June 30, 2014, was subsequently paid in July 2014, and is subject to reimbursement per the terms of the previously-mentioned indemnification agreement.

The Company is a plaintiff in a lawsuit captioned Bel Fuse Inc. et al. v. Molex Inc. brought in the United District Court of New Jersey in April 2013. The Company claims that Molex infringed three of the Company’s patents related to integrated magnetic connector products. Molex ~~is scheduled~~filed a motion to ~~file its Answer to~~dismiss the ~~Complaint~~complaint on August 6, 2013. The Company filed an amended complaint and response on August 20, 2013. Molex withdrew its original Motion to Dismiss and filed a second, revised Motion to Dismiss on September 6, 2013. The Company filed its response on October 7, 2013. The Court denied Molex’s revised Motion to Dismiss on June 16, 2014. In June 2014, Molex initiated an Inter Partes Review (IPR) at the U.S. Patent and Trademark Office for one of the three patents associated with this case.

14. SUBSEQUENT EVENTS

On July 25, 2014, the Company completed its acquisition of the U.S. and U.K. entities of the Emerson Network Power Connectivity Solutions business (“CS”) from Emerson Electric Co. with a payment, net of cash acquired and including a working capital adjustment, of $90.7 million. A remaining payment of approximately $9 million is expected to be paid by the end of the third quarter of 2014, upon the closing of the China portion of the transaction. CS is a leading provider of high-performance RF/Microwave and Harsh Environment Optical Connectors and Assemblies for military, aerospace, wireless communications, data communications, broadcast and industrial applications. CS is headquartered in Bannockburn, Illinois, and has manufacturing facilities in North America, the U.K. and China. CS will become part of Bel’s Connectivity Solutions product group under the Cinch Connector business. Management believes the acquisition of CS will enable the Company to further expand into the aerospace and military markets where long-term product reliability resulting from highly engineered solutions is critical. The addition of the CS Stratos brand with our Fibreco/Gigacom Interconnect products will also give the Company a solid position in the expanded beam fiber optic market place. The CS group will also significantly expand the Company’s existing copper-based product offerings with the addition of RF/Microwave components and assemblies. Given the proximity of the closing date of the CS transaction to the filing date of this Quarterly Report on Form 10-Q, the Company has not yet had the opportunity to complete the purchase price allocation and other related disclosure requirements.

~~12. SUBSEQUENT EVENT~~

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During each of the three and six months ended June 30, 2014, the Company incurred $0.4 million in acquisition-related costs associated with the CS transaction.

In July ~~2013,~~2014, in connection with the acquisition of CS, the Company ~~finalized its insurance claim related to~~borrowed an additional $90.0 million under the ~~property damage inflicted by Hurricane Sandy in October 2012. Insurance proceeds of $0.7~~New Secured Credit Agreement ($70.0 million ~~were received in July~~through the DDTL and ~~will be reported as income in~~$20.0 million under the ~~third quarter of 2013.~~Revolver).

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The Company’s quarterly and annual operating results are impacted by a wide variety of factors that could materially and adversely affect revenues and profitability, including the risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2012.~~2013. As a result of these and other factors, the Company may experience material fluctuations in future operating results on a quarterly or annual basis, which could materially and adversely affect its business, financial condition, operating results, and stock prices. Furthermore, this document and other documents filed by the Company with the Securities and Exchange Commission (the “SEC”) contain certain forward-looking statements under the Private Securities Litigation Reform Act of 1995 (“Forward-Looking Statements”) with respect to the business of the Company. These Forward-Looking Statements are subject to certain risks and uncertainties, including those detailed in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2012,~~2013, which could cause actual results to differ materially from these Forward-Looking Statements. The Company undertakes no obligation to publicly release the results of any revisions to these Forward-Looking Statements which may be necessary to reflect events or circumstances after the date such statements are made or to reflect the occurrence of unanticipated events. An investment in the Company involves various risks, including those which are detailed from time to time in the Company’s SEC filings.

Overview

Our Company

The Company ~~designs, manufactures~~is primarily engaged in the design, manufacture, and ~~markets a broad array~~sale of ~~magnetics, modules, circuit protection devices and interconnect products. Bel’s~~ products ~~are primarily~~ used in ~~the networking, telecommunications, computing,~~aerospace, data transmission, military, ~~aerospace,~~ transportation, and ~~broadcasting industries. Bel’s portfolio of products also finds application in the automotive, medical~~consumer electronics. Bel's product groups include Magnetic Solutions (discrete components, power transformers and ~~consumer electronics markets.~~MagJack® connectors with integrated magnetics), Power Solutions and Protection (AC-DC power supplies, DC-DC converters, custom designs, miniature, micro, surface mount and resettable fuses) and Connectivity Solutions (micro, circular, filtered D Sub, fiber optic, RF connectors, microwave components, passive jacks, plugs and cable assemblies).

Bel’s business is operated through three geographic segments: North America, Asia and Europe. During the six months ended June 30, ~~2013,~~2014, 52% of the Company’s revenues were derived from Asia, 35% from North America and 13% from its Europe operating segment. Sales of the Company’s ~~magnetic~~Magnetic Solutions products represented approximately ~~45%~~46% of its total net sales during the six months ended June 30, ~~2013.~~2014. The remaining revenues related to sales of the Company’s ~~interconnect~~Connectivity Solutions products (34%)~~, module~~ and Power Solutions and Protection products ~~(18%) and circuit protection products (3%~~(20%).

The Company’s expenses are driven principally by the cost of labor where the factories that Bel uses are located, the cost of the materials that it uses and its ability to effectively and efficiently manage overhead costs. As labor and material costs vary by product line, any significant shift in the mix of higher- versus lower-margin product ~~mix can~~lines will have an associated impact on the Company’s costs of sales. Costs are recorded as incurred for all products manufactured. Such amounts are determined based upon the estimated stage of production and include labor cost and fringes and related allocations of factory overhead. The Company’s products are manufactured at various facilities in: the People’s Republic of China (“PRC”); Glen Rock, Pennsylvania; Inwood, New York; McAllen, Texas; Miami, Florida; Haina, Dominican Republic; Reynosa and Cananea, Mexico; Louny, Czech Republic; ~~and~~ Worksop and Great Dunmow, ~~England.~~England; and Dubnica nad Vahom, Slovakia.

In the PRC, where the Company generally enters into processing arrangements with several independent third-party contractors and also has its own manufacturing facilities, the availability of labor is cyclical and is significantly affected by the migration of workers in relation to the annual Lunar New Year holiday as well as economic conditions in the PRC. In addition, the Company has little visibility into the ordering habits of its customers and can be subjected to large and unpredictable variations in demand for its products. Accordingly, the Company must continually recruit and train new workers to replace those lost to attrition each year and to address peaks in demand that may occur from time to time. These recruiting and training efforts and related inefficiencies, and overtime required in order to meet demand, can add volatility to the costs incurred by the Company for labor in the PRC.

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Trends Affecting our Business

The Company believes the key factors affecting Bel’s results for the three and six months ended June 30, ~~2013~~2014 and/or future results include the following:

Recent Acquisitions – ~~On March 29, 2013, the~~The Company completed its ~~purchase~~acquisitions of TRP and Array during late March and mid-August 2013, respectively, and its acquisition of Power Solutions in mid-June 2014. During the three and six months ended June 30, 2014, these acquisitions contributed a combined $26.9 million and $44.8 million of sales, respectively, and a combined $2.7 million and $3.7 million of income from operations, respectively. TRP contributed sales of $22.2 million and income from operations of $3.7 million during both the three and six months ended June 30, 2013. Due to the timing of the ~~Transpower magnetics business and other tangible and intangible assets~~acquisition dates, there were no contributions of ~~TE Connectivity (“TRP”). The TRP business contributed $22.0 million~~operating results related to the acquisitions of ~~sales~~Array or Power Solutions during the three and six months ended June 30, 2013. The Company also completed three small acquisitions in 2012. Fibreco and Powerbox, both acquired in 2012, contributed a combined $3.0 million and $5.9 million of sales during the three and six months ended June 30, 2013, respectively.

~~Restructuring Program~~ – The Company had substantially completed its plan to effect operational efficiencies by the end of 2012. The Company continued its efforts in the first half of 2013 to bring the new manufacturing facility in McAllen, Texas up to full operating capacity. The Company faced certain challenges with the transition, resulting in $2.8 million of unanticipated costs during the first half of 2013, of which $1.1 million was incurred during the second quarter. These costs included additional overtime, scrap, a higher volume of purchased materials, expedited freight charges and other costs. During the second quarter of 2013, the Company also initiated additional restructuring actions which resulted in $1.3 million of severance and other charges in the second quarter. The Company does not anticipate any significant costs related to restructuring programs for the foreseeable future.

Revenues – Excluding the revenue contributions from ~~recent~~the 2013 and 2014 acquisitions as described above, the Company’s revenues for the ~~first half of 2013 decreased~~three and six months ended June 30, 2014 increased by ~~$9.6~~$0.7 million and $2.5 million, respectively, as compared to the first half of 2012. The decrease in sales was primarily due to reduced orders of module products from one customer in North America. The order volume related to this customer has now stabilized, but we expect to report large year-over-year decreases (2013 vs. 2012) in our module products group through the end of 2013 as a result of the lower volume in 2013. Revenue reductions resulting from manufacturing inefficiencies associated with the restructuring of Cinch operations described above were partially offset by increases in the sales volume of Bel’s magnetic and DC-DC products. Bel is in the process of implementing price increases for certain products as our current pricing structure does not reflect the rising labor costs in the PRC as discussed below. Management expects the majority of these changes to be in effect by the fourth quartersame periods of 2013.

Product Mix – Material and labor costs vary by product line and any significant shift in product mix between higher- and lower-margin product lines will have a corresponding impact on the Company’s gross margin percentage. During the first half of ~~2013,~~2014, the Company experienced a favorable shift in the mix of products sold as compared to the same period of ~~2012, which partially mitigated the effects of reduced sales and operational inefficiencies at our Texas facility.~~2013.

Pricing and Availability of Materials – ~~Component pricing~~Pricing and availability of components that constitute raw materials in our manufacturing processes have been stable for most of the Company’s product lines, although lead times on electrical components are still extended. ~~With regard to commodities, the Company has experienced some price decreases related to precious metals~~While pricing of electrical components during ~~the latter part of 2012 and that trend has continued into~~ the first half of ~~2013. Costs for~~2014 was consistent with the same period of 2013, there have been recent pricing pressures in this area which may impact future quarters. With regard to commodity pricing, the cost of certain commodities ~~including~~that are contained in components and other raw materials, such as gold and copper, were lower induring the first half of ~~2013~~2014 as compared to the ~~first half~~same period of ~~2012.~~2013. Any fluctuations in component prices and other commodity prices associated with Bel’s raw materials will have a corresponding impact on Bel’s profit margins.

Labor Costs – Labor costs as a percentage of sales decreased slightly from 14.0% during the first half of 2013 ~~were essentially flat as compared~~ to 13.8% during the first half of ~~2012. Following~~2014. During the ~~2012 Lunar New Year holiday,~~first half of 2013, the Company incurred higher labor costs due to inefficiencies associated with the Cinch reorganization. These additional ~~recruiting, training and overtime charges were incurred in the PRC; this trend~~costs did not recur in ~~2013. However,~~2014. This decrease in labor costs as a percentage of sales was largely offset by rising labor costs in the PRC and the strengthening of the Chinese ~~Renminbi continue to impact our overall profit margins.~~Renminbi. With the addition of TRP and prior to the Power Solutions acquisition, approximately half of Bel’s total sales ~~are now~~were generated from labor-intensive magnetic products, which are primarily manufactured in the PRC. ~~In February 2013, the PRC government issued a 19% increase to the minimum wage in regions where the factories that Bel uses are located. This increase was effective May 1, 2013.~~

~~Impact of Pending Lawsuits~~ – As further described in Note 11 to the accompanying condensed consolidated financial statements, there has been additional legal activity in 2013 related to the SynQor and Molex lawsuits. Ongoing legal costs related to these lawsuits will impact the profit margins of future quarters.

Acquisition-Related Costs – ~~The~~In connection with the acquisition of ~~TRP~~Power Solutions in ~~2013~~June 2014 and the ~~valuations~~subsequent acquisition of Connectivity Solutions which closed in July 2014, the ~~2012 Acquired Companies gave rise to acquisition-related costs of $0.5~~Company incurred $1.4 million during the first ~~six months~~half of ~~2013. Bel’s continuing strategy~~2014, primarily during the second quarter. Various purchase accounting adjustments and professional fees, associated with the valuations of Power Solutions and Connectivity Solutions and related to ~~actively consider potential acquisitions could result in additional legal and other professional costs~~ongoing audits of the historical financial statements of the acquirees, are also expected in future ~~periods.~~quarters.

Effective Tax Rate – The Company’s effective tax rate will fluctuate based on the geographic segment in which the pretax profits are earned. Of the geographic segments in which the Company operates, the U.S. has the highest tax rates; Europe’s tax rates are generally lower than U.S. tax rates; and Asia has the lowest tax rates of the Company’s three geographical segments. The change in the effective tax rate during the six months ended June 30, 2014 compared to the same period in 2013 is primarily ~~attributable~~attributed to a significantly lower pretax loss in the North America segment for the six months ended June 30, 2014 compared to the ~~recognition under~~same period in 2013. In addition, for the ~~new tax law, ATRA, of~~six months ended June 30, 2013, the Company recognized an additional $0.4 million in R&E credits related to the year ended December 31, 2012, which the Company recognized during the first quarter of 2013. In addition, the Company incurred a loss in the North America segment for the six months ended June 30, 2013, compared to a pretax profit for the same period in 2012, which was partially offset by an increase in the Asia segment pretax profit. Additionally, the Company reversed a portion2012. See Note 8 of the liability for uncertain tax positions related to the results of the Internal Revenue Service audit which resulted in a reduction to the tax provision for the six months ended June 30, 2012. It is the Company’s intention to repatriate substantially all net income from its wholly owned PRC subsidiary, DG Transpower, a Chinese Limited Company, to its indirect Hong Kong parent company Transpower Technologies (Hong Kong) Ltd. Applicable income and dividend withholding taxes have been reflected. However, U.S. deferred taxes need not be provided under current U.S. tax law.condensed consolidated financial statements.

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~~With the completion~~Based on historical results of ~~the three acquisitions in 2012,~~Bel and the ~~acquisition~~recently acquired businesses (including CS), the Company is at a current run rate of ~~TRP during~~approximately $700 million in annual sales. The focus going forward will be on improving quality at the ~~first quarter~~factory levels, working closely with our large customers and their engineering teams, and continued overhead cost containment internally. Management has already implemented annual cost savings of 2013, management is optimistic that the resulting opportunities will fuel growth in our core product groups in future periods. Management believes that the difficulties experienced during the first half of 2013over $5.0 million related to the ~~transition~~acquisitions of ~~Cinch’s manufacturing operations were largely resolved by~~Power Solutions and Connectivity Solutions and has identified additional opportunities to streamline the ~~end of~~consolidated businesses in the ~~second quarter and we look forward to seeing the benefits of these active measures during the second half of 2013.~~future. Statements regarding future results constitute Forward-Looking Statements and could be materially adversely affected by the risk factors identified by the Company in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2012.~~2013.

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Summary by Reportable Operating Segment

Net sales to external customers by reportable operating segment for the three and six months ended June 30, ~~2013~~2014 and ~~2012~~2013 were as follows (dollars in thousands):

	Three Months Ended								Six Months Ended								Three Months Ended								Six Months Ended
	June 30,								June 30,								June 30,								June 30,
	2013				2012				2013				2012				2014				2013				2014				2013
North America	$	28,628	30	%	$	32,059	44	%	$	55,444	35	%	$	65,496	47	%	$	35,064	35	%	$	28,628	30	%	$	63,795	35	%	$	55,444	35	%
Asia		55,157	59	%		34,412	47	%		81,573	52	%		58,889	43	%		51,223	52	%		55,157	59	%		94,271	52	%		81,573	52	%
Europe		10,196	11	%		6,751	9	%		19,992	13	%		14,398	10	%		13,152	13	%		10,196	11	%		24,019	13	%		19,992	13	%
	$	93,981	100	%	$	73,222	100	%	$	157,009	100	%	$	138,783	100	%	$	99,439	100	%	$	93,981	100	%	$	182,085	100	%	$	157,009	100	%

Net sales and income from operations by reportable operating segment for the three and six months ended June 30, ~~2013~~2014 and ~~2012~~2013 were as follows (dollars in thousands):

	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
	June 30,						June 30,						June 30,						June 30,
	2013			2012			2013			2012			2014			2013			2014			2013
Total segment sales:
North America	$	32,301		$	35,455		$	61,523		$	71,980		$	39,405		$	32,301		$	70,859		$	61,523
Asia		64,036			43,795			96,760			78,642			61,968			64,036			111,860			96,760
Europe		10,591			7,227			20,716			15,217			16,550			10,591			27,441			20,716
Total segment sales		106,928			86,477			178,999			165,839			117,923			106,928			210,160			178,999
Reconciling item:
Intersegment sales		(12,947	)		(13,255	)		(21,990	)		(27,056	)		(18,484	)		(12,947	)		(28,075	)		(21,990	)
Net sales	$	93,981		$	73,222		$	157,009		$	138,783		$	99,439		$	93,981		$	182,085		$	157,009

Income (loss) from operations:
Income from operations:
North America	$	(2,012	)	$	1,953		$	(3,495	)	$	4,263		$	(1,617	)	$	(2,012	)	$	(734	)	$	(3,495	)
Asia		4,642			523			3,977			(1,039	)		4,715			3,776			6,388			3,112
Europe		(82	)		(143	)		659			538			616			(105	)		941			615
	$	2,548		$	2,333		$	1,141		$	3,762		$	3,714		$	1,659		$	6,595		$	232

During the three and six months ended June 30, 2014 as compared to the same periods of 2013, the 2013 acquisitions of TRP and Array contributed significantly to Bel’s Asia and North America segment sales, and TRP’s income from operations in Asia more than offset Bel’s loss from operations in North America. The ~~recent~~ acquisition of ~~TRP~~Power Solutions in June 2014 contributed ~~$22.0 million in~~significantly to Bel’s North America segment sales, and to ~~the Company’s Asia operating~~a lesser extent Europe segment sales during the three and six months ended June 30, 2014 as compared to the same periods of 2013. ~~Sales~~See Note 7 to the accompanying condensed consolidated financial statements for further details. Within North America, the improvement in the Company’s Europe operating segment were favorably impacted by the acquisitions of Fibreco and Powerbox which occurred in the second half of 2012. These two acquisitions contributed sales of $3.0 million and $5.9 millionincome from operations during the three and six months ended June 30, 2014 as compared to the same periods of 2013 ~~respectively,~~was also attributable to the recovery of the Cinch operations. Both sales and income from operations of $0.2 million and $1.1 million during the three and six months ended June 30, 2013. The decrease in sales in North America primarily related to reduced demand in 2013 for Bel’s module products which are manufactured in China. Thus, the decrease in North American sales caused a corresponding decrease in intersegment sales of module products from Asia to North America. North America sales during the first half of 2013 were ~~also~~negatively impacted by the ~~transition~~relocation of ~~operations from~~ Cinch’s North American manufacturing ~~facility in Vinita, Oklahoma to its new manufacturing facility in McAllen, Texas.~~operations. Manufacturing inefficiencies resulted in reduced production levels and lower overall sales of Cinch products. In addition, various other costs associated with the Cinch reorganization further reduced our income from operations in North America during early 2013. These transition issues were resolved by the ~~first half~~end of 2013.

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Overview of Financial Results

Sales for the ~~first half of 2013~~six months ended June 30, 2014 increased by ~~13.1%~~16.0% to ~~$157.0~~$182.1 million from ~~$138.8~~$157.0 million for the ~~first half~~same period of ~~2012.~~2013. Sales were favorably impacted by the contributions made by the ~~recent~~ acquisitions of TRP, ~~Powerbox~~Array and ~~Fibreco. Costs incurred related to~~Power Solutions, and the ~~transition~~rebounding of Cinch sales after the relocation of its manufacturing operations in early 2013. Pricing to customers was adjusted during the ~~new manufacturing facility~~latter half of 2013 to recover some of the higher labor costs in ~~Texas heavily impacted our profit margin~~China and other cost increases resulting from the continued strengthening of the Chinese Renminbi. These increased prices are reflected in the first half of 2013. Margins in our traditional connector, magnetic and circuit protection businesses continued to be affected by higher labor costs, and pricing to customers during the first half of 2013 did not yet reflect these higher costs.2014 sales figures above. Selling, general and administrative expense was ~~$4.1~~$1.6 million higher in the first ~~half~~six months of ~~2013~~2014 as compared to the same period of ~~2012,~~2013, primarily due to the inclusion of expenses from the acquisition of TRP and the 2012 Acquired Companies as well as higher acquisition-related costs, legal and professional fees in 2013. The Company also incurred $1.4 million of restructuring charges in the first half of 2013 related to additional workforce reductions.recent acquisitions. These factors led to net earnings of ~~$1.9~~$5.6 million for the first half of ~~2013~~2014 as compared to ~~net earnings of $2.3~~$1.1 million for the ~~first half~~same period of ~~2012.~~2013. Additional details related to these factors affecting the six-month results are described in the Results of Operations section below.

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Critical Accounting Policies

~~The Company’s~~Management’s discussion and analysis of ~~its~~Bel’s financial condition and results of operations are based upon the Company’s condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to product returns, bad debts, inventories, goodwill, intangible assets, investments, warranties, SERP expense, income taxes and contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Recent Accounting Pronouncements

The discussion of new financial accounting standards applicable to the Company is incorporated herein by reference to Note 1.1 to the Company’s Financial Statements, “Basis of Presentation and Accounting ~~Policies”~~Policies,” included in Part I, Item ~~1. “Financial Statements (unaudited).”~~1 of this Quarterly Report on Form 10-Q.

Results of Operations

The following table sets forth, for the periods presented, the percentage relationship to net sales of certain items included in the Company’s condensed consolidated statements of operations.

		Percentage of Net Sales				Percentage of Net Sales					Percentage of Net Sales				Percentage of Net Sales
		Three Months Ended				Six Months Ended					Three Months Ended				Six Months Ended
		June 30,				June 30,					June 30,				June 30,
		2013		2012		2013		2012			2014		2013		2014		2013

Net sales	Net sales	100.0	%	100.0	%	100.0	%	100.0	%	Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Cost of sales	Cost of sales	83.0		83.4		84.0		83.7		Cost of sales	82.0		83.8		82.4		84.5
Selling, general and administrative ("SG&A") expenses	Selling, general and administrative ("SG&A") expenses	12.9		13.1		14.3		13.3		Selling, general and administrative ("SG&A") expenses	13.3		13.1		13.4		14.5
Restructuring charges	Restructuring charges	1.3		0.3		0.9		0.3		Restructuring charges	1.1		1.3		0.6		0.9
Impairment of investment		-		(0.7)		-		(0.3)
Interest expense										Interest expense	(0.2)		-		(0.1)		-
Interest income and other, net	Interest income and other, net	0.1		0.1		0.1		0.1		Interest income and other, net	-		0.1		0.1		0.1
Earnings before provision (benefit) for income taxes	Earnings before provision (benefit) for income taxes	2.8		2.7		0.8		2.5		Earnings before provision (benefit) for income taxes	3.6		1.8		3.5		0.2
Provision (benefit) for income taxes	Provision (benefit) for income taxes	0.2		0.7		(0.4)		0.8		Provision (benefit) for income taxes	0.5		-		0.5		(0.5)
Net earnings	Net earnings	2.6		2.0		1.2		1.7		Net earnings	3.1		1.8		3.1		0.7

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The following table sets forth the year over year percentage increase ~~(decrease)~~ of certain items included in the Company’s condensed consolidated statements of operations.

Increase from

Increase (Decrease) from

Increase from

Prior Period

Three Months Ended

Six Months Ended

Three Months Ended

Six Months Ended

June 30, 2013

June 30, 2014

Compared with

Three Months Ended

Six Months Ended

Three Months Ended

Six Months Ended

June 30, 2012

June 30, 2013

Net sales

28.4

13.1

Net sales

5.8

16.0

Cost of sales

27.8

13.5

Cost of sales

3.5

13.1

SG&A expenses

26.8

22.3

SG&A expenses

6.8

7.1

Net earnings

68.4

(18.5)

Net earnings

81.5

392.3

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Sales

Net sales increased ~~28.4%~~5.8% from ~~$73.2 million during the three months ended June 30, 2012 to~~ $94.0 million during the three months ended June 30, ~~2013. Net sales increased 13.1% from $138.8~~2013 to $99.4 million during the ~~six~~three months ended June 30, ~~2012 to~~2014. Net sales increased 16.0% from $157.0 million during the six months ended June 30, ~~2013.~~2013 to $182.1 million during the six months ended June 30, 2014. The Company’s net sales by ~~major~~ product ~~line~~group for the three and six months ended June 30, ~~2013~~2014 and ~~2012~~2013 were as follows (dollars in thousands):

Three Months Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
Magnetic products $ 48,758 52 % $ 24,558 34 % $ 70,015 45 % $ 43,757 32 %
Interconnect products 27,093 29 % 27,368 37 % 53,205 34 % 54,609 39 %
Module products 14,794 16 % 18,608 25 % 28,164 18 % 35,324 25 %
Circuit protection products 3,336 3 % 2,688 4 % 5,625 3 % 5,093 4 %
$ 93,981 100 % $ 73,222 100 % $ 157,009 100 % $ 138,783 100 %

	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2014				2013				2014				2013
Magnetic solutions	$	44,732	45	%	$	48,758	52	%	$	84,029	46	%	$	70,015	45	%
Connectivity solutions		32,197	32	%		27,093	29	%		62,367	34	%		53,205	34	%
Power solutions and protection		22,510	23	%		18,130	19	%		35,689	20	%		33,789	21	%
	$	99,439	100	%	$	93,981	100	%	$	182,085	100	%	$	157,009	100	%

~~The~~Sales of the Company’s ~~magnetic product line, which includes Bel’s MagJack and~~Magnetic Solutions products for the ~~newly-acquired~~first six months of 2014 include $34.0 million of TRP integrated connector module (ICM) products, ~~had a strong~~as compared to $22.2 million for the same period of 2013 (as TRP was acquired in late-March 2013). The acquisition of Array in August 2013 contributed $1.9 million and $3.5 million of sales, respectively, to the Company’s Connectivity Solutions product group during the three and six months ended June 30, 2014. During the first half of ~~2013. TRP accounted for $22.0 million~~2013, the Company experienced a reduction in sales of Cinch’s Connectivity Solutions products due to the relocation of its manufacturing operations. Cinch’s sales have since rebounded, and are a contributing factor to the increase ~~from 2012~~ in ~~both~~Connectivity Solutions sales in the ~~three- and the six-month~~2014 periods noted ~~above. Bel’s MagJack~~above, as compared to 2013. The acquisition of Power Solutions in mid-June 2014 contributed sales of $7.2 million to the three and ~~other ICMs increased~~six-month Power Solutions and Protection sales figures noted above for the 2014 periods. This increase in Power Solutions and Protection sales was partially offset by ~~$1.2~~a reduction in legacy-Bel DC/DC converter sales of $3.9 million and ~~$3.0~~$5.4 million, respectively, during the ~~three-~~three and ~~six-month periods~~six months ended June 30, ~~2013, respectively,~~2014 as compared to the same periods of 2012. The workforce return rate after the Lunar New Year holiday in the PRC was higher than that of the prior year, resulting in more efficient operations in Asia. Revenue in Bel’s interconnect product line in the first half of 2013 was down slightly from the comparable period of 2012. Fibreco contributed $2.2 million and $4.2 million to the Company’s interconnect sales during the three and six month ended June 30, 2013; however, these sales were more than offset by reduced shipments of Cinch products during those same periods. Sales in the Company’s module product line continued to decline in the first half of 2013 due to reduced order volume of one customer, partially offset by higher sales of DC-DC and AC-DC module products.2013.

Cost of Sales

The Company’s cost of sales as a percentage of consolidated net sales for the three and six months ended June 30, ~~2013~~2014 and ~~2012~~2013 was comprised of the following:

	Three Months Ended		Six Months Ended		Three Months Ended		Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2013	2012	2013	2012	2014	2013	2014	2013
Material costs	45.6%	45.6%	45.9%	45.6%	44.4%	44.4%	43.4%	45.2%
Labor costs	15.3%	15.4%	14.2%	14.6%	13.5%	15.0%	13.8%	14.0%
Research and development expenses	4.0%	4.2%	4.3%	4.5%	4.1%	4.0%	4.1%	4.3%
Other expenses	18.1%	18.2%	19.6%	19.0%	20.0%	20.4%	21.1%	21.0%
Total cost of sales	83.0%	83.4%	84.0%	83.7%	82.0%	83.8%	82.4%	84.5%

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While overall material costs as a percentage of sales remained relatively flat in 2013 as compared to 2012, this was the net result of two offsetting factors. The Company experienced operational inefficiencies and other start-up costs (which are now essentially complete) at the new manufacturing facility in Texas, which resulted in high material costs at the Texas facility related to third-party purchases, at premium prices, of machined parts. There were also high volumes of scrap, rejected materials and expedited freight costs at the Cinch factory during the first half of 2013. These additional material costs were partially offset by the reduction in sales of module products, which have a higher material content than Bel’s other product lines. LaborMaterial costs as a percentage of sales were lower in the first ~~half~~six months of ~~2013~~2014 as compared to the same period of 2012, as the Company incurred excessive recruiting, training and overtime costs following the 2012 Lunar New Year holiday in Asia, which did not recur in 2013. The increase in other expenses as a percentage of sales for the six months ended June 30, 2013 as compared to the same period of 2012 primarily related to the inclusion of support labor and fringe costs of the 2012 Acquired Companies during the first six months of 2013, primarily due to the reduction in sales of legacy-Bel DC/DC converters, which have a higher material content than Bel’s other products. An increase in sales of Cinch and ~~duplication of indirect labor~~Array products in 2014 also contributed to the decrease, as these products have lower material content than Bel’s other products. Material costs during the ~~transition~~first half of ~~Cinch~~2013 were also unusually high as the Company experienced start-up issues related to the relocation of Cinch’s U.S. manufacturing operations ~~from Vinita, Oklahoma~~resulting in higher purchase prices and inbound freight costs for materials.

Labor costs during 2014 decreased as a percentage of sales as compared to ~~McAllen, Texas,~~2013, primarily during the ~~first quarter~~second quarter. The Company faced certain challenges with the relocation of Cinch’s U.S. manufacturing facility, which resulted in $2.8 million of unanticipated costs during the three and six months ended June 30, 2013. These ~~increases~~costs did not recur in ~~other expenses~~2014 and the Company began to realize cost savings from that initiative. This reduction in ~~2013 were~~labor costs as a percentage of sales was partially offset by the addition of TRP and Array in 2013, a ~~reduction~~higher proportion of sales of Bel integrated magnetic products and Cinch products, and the shift in ~~support~~product mix away from the low-labor content products described above. Government-mandated wage increases in the PRC and the strengthening of the Chinese Renminbi further increased labor ~~and fringe~~ costs ~~at other Bel locations due to restructuring actions that took place in 2012.~~over the prior year.

Included in cost of sales are research and development (R&D) expenses of ~~$3.8~~$4.0 million and ~~$3.1~~$3.7 million for the three-month periods ended June 30, ~~2013~~2014 and ~~2012,~~2013, respectively, and ~~$6.7~~$7.4 million and ~~$6.3~~$6.8 million for the six-month periods ended June 30, ~~2013~~2014 and ~~2012,~~2013, respectively. The majority of the increase relates to the inclusion of ~~TRP~~ R&D expenses ~~as well as those of the 2012 Acquired Companies,~~associated with TRP, Array and Power Solutions, which have been included in Bel’s results since their respective acquisition dates.

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Selling, General and Administrative Expenses (“SG&A”)

~~The dollar amount of SG&A expenses was $2.6 million higher during~~For the three months ended June 30, ~~2013~~2014, SG&A expense was $0.8 million higher as compared to the same period of ~~2012. The~~2013. Of this increase, ~~primarily~~$0.3 million related to the inclusion of SG&A expenses of ~~TRP~~Array and ~~the 2012 Acquired Companies, which totaled $1.6~~Power Solutions. Other contributing factors included a $1.3 million ~~during the second quarter~~increase in acquisition-related costs and additional bad debt expense of ~~2013, a~~ $0.4 million, ~~increase~~partially offset by favorable fluctuations in foreign currency exchange rates of $0.3 million, a reduction in legal and professional fees ~~additional freight charges~~ of ~~$0.3~~$0.6 million and a decrease in other SG&A expenses of $0.3 ~~million increase in incentive compensation.~~million.

For the six months ended June 30, ~~2013, the dollar amount of~~2014, SG&A expense was ~~$4.1~~$1.6 million higher as compared to the same period of ~~2012.~~2013. Of this increase, ~~$2.3~~$0.7 million related to the inclusion of SG&A expenses of ~~TRP~~Array and ~~the 2012 Acquired Companies.~~Power Solutions. Other ~~factors~~ contributing ~~to the increase~~factors included a $0.9 million increase in acquisition-related costs, higher wage and fringe-related items of $0.6 million ~~increase~~and additional bad debt expense of $0.3 million, partially offset by a reduction in legal and professional fees ~~$0.5 million of higher acquisition-related costs, an increase in freight charges of $0.5 million and an increase in incentive compensation~~ of $0.4 million, ~~partially offset by a $0.2 million decrease~~an improvement in ~~salaries and fringe cost as a result of the 2012 restructuring efforts.~~

~~Restructuring Charges~~

~~The Company recorded restructuring charges~~freight costs of $0.2 million and ~~$0.4 million during the three and six months ended June 30, 2012, respectively, related to the 2012 restructuring program. During 2013, the Company implemented additional reductions~~a decrease in ~~workforce, resulting in restructuring charges~~other SG&A expenses of ~~$1.3 million and $1.4 million during the three and six months ended June 30, 2013, respectively.~~$0.3 million.

Provision (Benefit) for Income Taxes

The Company’s effective tax rate will fluctuate based on the geographic segment in which the pretax profits are earned. Of the geographic segments in which the Company operates, the U.S. has the highest tax rates; Europe’s tax rates are generally lower than U.S. tax rates; and Asia has the lowest tax rates of the Company’s three geographical segments.

The provision for income taxes for the three months ended June 30, ~~2013~~2014 was ~~$0.2~~$0.5 million compared to ~~$0.5~~less than $0.1 million for the three months ended June 30, ~~2012.~~2013. The Company’s earnings before income taxes for the three months ended June 30, ~~2013~~2014 are approximately ~~$0.6~~$1.8 million higher than the same period in ~~2012.~~2013. The Company’s effective tax rate, the income tax provision as a percentage of earnings before provision for income taxes, was ~~7.2%~~13.4% and ~~25.4%~~2.0% for the three-month periods ended June 30, ~~2013~~2014 and ~~2012,~~2013, respectively. The change in the effective tax rate during the three months ended June 30, ~~2013~~2014 compared to the second quarter of ~~2012~~2013 is primarily attributed to the increase inof the Europe and Asia ~~segment~~segments’ profitability. ~~This was offset in part by a loss in the North America segment for the three months ended June, 30, 2013 compared to a pretax profit for the same period in 2012.~~

The ~~(benefit)~~ provision for income taxes for the six months ended June 30, ~~2013~~2014 was ~~($0.6)~~$0.9 million compared to ~~$1.1~~a benefit of ($0.8) million for the six months ended June 30, ~~2012.~~2013. The Company’s earnings before income taxes for the six months ended June 30, ~~2013~~2014 are approximately ~~$2.2~~$6.1 million ~~lower~~higher than the same period in ~~2012.~~2013. The Company’s effective tax rate, the income tax provision (benefit) as a percentage of earnings before provision (benefit) for income taxes, was ~~(51.4%)~~13.5% and ~~32.6%~~(241.7%) for the six-month periods ended June 30, ~~2013~~2014 and ~~2012,~~2013, respectively. The change in the effective tax rate during the six months ended June 30, ~~2013~~2014 compared to the same period ~~of 2012~~in 2013 is primarily attributed to the recognition under the new tax law, ATRA, of $0.4 million in R&E credit, related to the year ended December 31, 2012, which the Company recognized during the first quarter of 2013. In addition, the Company incurred a significantly lower pretax loss in the North America segment for the six months ended June 30, ~~2013~~2014 compared to ~~a pretax profit for~~ the same period in ~~2012, which was partially offset by~~2013. In addition, for the ~~increase~~six months ended June 30, 2013, the Company recognized an additional $0.4 million in R&E credits related to the ~~Asia segment pretax profit.~~

~~Return to Index~~

year ended December 31, 2012. See Note 8 of the condensed consolidated financial statements.

Liquidity and Capital Resources

Historically, the Company has financed its capital expenditures primarily through cash flows from operating activities and has financed acquisitions through cash flows from operating activities, cash reserves, borrowings, and the issuance of Bel Fuse Inc. common stock. Management believes that the cash flow from operations after payments of dividends and mandatory principal payments of long-term debt combined with its existing capital base, ~~and~~ the Company’s cash reserves and available line of credit will be sufficient to fund its operations for at least the next twelve months. Such statement constitutes a Forward-Looking Statement. Factors which could cause the Company to require additional ~~capital~~funding include, among other things, a softening in the demand for the Company’s existing ~~products,~~and recently-acquired products; an inability to respond to customer demand for new ~~products, potential~~products; an inability to successfully integrate the recent acquisitions ~~(as~~ discussed ~~below) requiring~~below, which could require substantial ~~capital,~~capital; future expansion of the Company’s operations and net losses that would result in net cash being used in operating ~~investing and/or financing~~ activities, ~~which result~~resulting in net decreases in cash and cash equivalents. Net losses may impact availability under our credit facility and preclude the Company from raising debt or equity financing in the capital markets on affordable terms or otherwise.

~~The~~On April 25, 2014, the Company ~~has an unsecured credit agreement in~~entered into a Stock and Asset Purchase Agreement with ABB Ltd. (“ABB”) pursuant to which the Company agreed to acquire the Power-One Power Solutions business from ABB for approximately $117.0 million, subject to adjustments based on working capital and the amount of cash at closing. On June 19, 2014, the Company completed its acquisition of Power Solutions with a cash payment, net of cash acquired and including a working capital adjustment, of $110.0 million. The Power Solutions acquisition was funded through bank borrowings, as discussed below.

On May 16, 2014, the Company entered into a Stock Purchase Agreement with Emerson Electric Co. (“Emerson”) pursuant to which the Company agreed to acquire the Emerson Network Power Connectivity Solutions (“CS”) business from Emerson for $98.0 million, subject to adjustments based on working capital and the amount of cash at closing. On July 25, 2014, the Company completed its acquisition of the U.S. and U.K. entities of the CS business from Emerson with a payment, net of cash acquired and including a working capital adjustment, of $90.7 million. This portion of the CS acquisition was funded primarily through additional bank borrowings and with $3.9 million funded from Bel’s cash on hand. A remaining payment of approximately $9 million is expected to be paid by the end of the third quarter, upon the closing of the China portion of the acquisition.

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At December 31, 2013, the Company maintained a $30 million line of credit with Bank of America (the “Credit Agreement”), which ~~expires~~was due to expire on ~~June 30, 2014. There have not been any~~October 14, 2016. At December 31, 2013, borrowings under the line of credit ~~agreement during 2013 or 2012~~amounted to $12.0 million and ~~as a result, there~~the balance available under the Credit Agreement was ~~no balance outstanding as of June 30, 2013 or December 31, 2012.~~$18.0 million. The ~~credit agreement bears~~Credit Agreement bore interest at LIBOR plus ~~0.75%~~1.00% to ~~1.25%~~1.50% based on certain financial statement ratios maintained by the Company. AsThe interest rate in effect on the borrowings outstanding at December 31, 2013 was 1.4%. The Company incurred interest expense of less than $0.1 million related to the borrowings under the Credit Agreement during the six months ended June 30, 2014. There was no interest expense related to the line of credit during the six months ended June 30, 2013 as there were no borrowings outstanding during that period. Under the terms of the Credit Agreement, the Company was required to maintain certain financial ratios and comply with other financial conditions. During the six months ended June 30, 2014, the Company repaid the full $12.0 million balance outstanding and terminated the Credit Agreement.

On June 19, 2014, the Company entered into a ~~result~~senior Credit and Security Agreement with KeyBank National Association (“KeyBank”), as administrative agent, and lender, which was amended on June 30, 2014 principally to add a syndicate of additional lenders (as so amended, the “New Secured Credit Agreement”). The maturity date of the New Secured Credit Agreement is June 18, 2019.

The New Secured Credit Agreement consists of (i) a $50 million revolving credit facility (“Revolver”), (ii) a $145 million term loan facility (“Term Loan”) and (iii) a $70 million delayed draw term loan (“DDTL”). Under the terms of the New Secured Credit Agreement, the Company is entitled, subject to the satisfaction of certain conditions, to request additional commitments under the revolving credit facility or term loans in the aggregate principal amount of up to $100 million to the extent that existing or new lenders agree to provide such additional commitments and/or term loans.

The borrowings under the New Secured Credit Agreement will bear interest at a rate equal to, at the Company's option, either (1) LIBOR, plus a margin ranging from 1.75% per annum to 3.00% per annum depending on the Company’s leverage ratio, or (2)(a) an “Alternate Base Rate,” which is the highest of (i) the federal funds rate plus 0.50%, (ii) KeyBank’s prime rate and (iii) LIBOR with a maturity of one month plus 1.00%, plus (b) a margin ranging from 0.75% per annum to 2.00% per annum, depending on the Company’s leverage ratio. The interest rate in effect at June 30, 2014 was 3.0%, which consists of LIBOR of 0.25% plus the Company’s margin of 2.75%.

The New Secured Credit Agreement contains customary representations and warranties, covenants and events of default and financial covenants that measure (i) the ratio of the Company's total funded indebtedness, on a consolidated basis to the amount of the Company’s ~~recent acquisitions, which resulted in~~consolidated EBITDA, as defined, (“Leverage Ratio”) and (ii) the ratio of the amount of the Company’s consolidated EBITDA to the Company’s consolidated fixed charges (“Fixed Charge Coverage Ratio”). If an event of default occurs, the lenders under the New Secured Credit Agreement would be entitled to take various actions, including the acceleration of amounts due thereunder and all actions permitted to be taken by a ~~lower cash balance and increased intangible assets,~~secured creditor. At June 30, 2014, the Company ~~has not been~~was in compliance with its ~~tangible net worth debt~~most restrictive covenant, ~~since~~ the ~~third quarter~~Leverage Ratio. The unused credit available under the credit facility at June 30, 2014 was $120 million, of ~~2012. The lender has~~which we had the ability to incur total additional indebtedness of $100.1 million without violating our Leverage Ratio covenant based on the Company’s existing consolidated EBITDA.

KeyBank and certain of the agents and lenders party to the New Secured Credit Agreement (and each of their respective subsidiaries or affiliates) have provided ~~a waiver for this event of default.~~

~~On March 29, 2013,~~and may in the future provide investment banking, cash management, underwriting, lending, commercial banking, trust, leasing services, foreign exchange and other advisory services to, or engage in transactions with, the Company ~~completed~~and its subsidiaries or affiliates. Certain of these parties have received, and these parties may in the future receive, customary compensation from the Company and its subsidiaries or affiliates, for such services.

Concurrent with its entry into the New Secured Credit Agreement on June 19, 2014, the Company borrowed $145.0 million under the Term Loan to complete its acquisition of ~~TRP for $22.4~~Power Solutions. During the three and six months ended June 30, 2014, the Company recorded $5.4 million in ~~cash~~deferred financing costs, which will be amortized over the five-year term, and ~~additional consideration including~~incurred $0.2 million of interest expense. At June 30, 2014, borrowings outstanding of $145.0 million related solely to the ~~assumption of $0.1~~Term Loan. The $70.0 million ~~in liabilities~~DDTL and ~~the grant of a license to TE related to three of the Company’s patents. During the second quarter of 2013, the Company paid an additional $6.8~~$50.0 million ~~in consideration to TE related to a working capital adjustment and $0.8 million remains accrued~~Revolver were fully available at June 30, ~~2013. Transpower Technology (HK) Limited is the sole shareholder of Dongguan Transpower Electronic Products Co., Ltd., located in the People's Republic of China. The Company’s purchase~~2014.

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Scheduled principal payments of the ~~Transpower magnetics business consisted~~long-term debt outstanding at June 30, 2014 are as follows (in thousands):

2014	$	3,625
2015		9,063
2016		10,875
2017		12,687
2018		16,313
Thereafter		92,437
Total long-term debt		145,000
Less: Current maturities of long-term debt		(7,250	)
Noncurrent portion of long-term debt	$	137,750

Subsequent to the June 30, 2014 quarter-end, the Company borrowed the full $70.0 million available under the DDTL and $20.0 million of the ~~ICM family~~Revolver in order to fund the acquisition of ~~products, including RJ45, 10/100 Gigabit, 10G, PoE/PoE+, MRJ21 and RJ.5, a line of modules for smart-grid applications and discrete magnetics.~~CS in July 2014.

Cash Flows

During the six months ended June 30, ~~2013,~~2014, the Company’s cash and cash equivalents ~~decreased~~increased by ~~$32.7~~$25.6 million. This resulted primarily from $12.7 million provided by operating activities and $145.0 million of proceeds from long-term debt, partially offset by a ~~$20.9~~$109.9 million payment, net of cash ~~payment~~acquired, for the acquisition of ~~TRP, $3.1~~Power Solutions, $12.0 million of repayments under the revolving credit line, $3.0 million paid for the purchase of property, plant and equipment and $1.5 million for payments of ~~dividends, $3.4 million for the repurchase of 178,643 shares of the Company’s Class B common stock, and $3.9 million used in operating activities.~~dividends. As compared to the six months ended June 30, ~~2012,~~2013, cash provided by operating activities ~~decreased by $4.1 million. During the six months ended June 30, 2013, accounts receivable~~ increased by ~~$7.9~~$16.6 million, ~~primarily~~partially due to the ~~addition~~improvement in net earnings in 2014 and a $4.5 million decrease in inventory levels during the first half of third party receivables at TRP, which replaced intercompany receivables collected from TRP’s pre-acquisition affiliates. TRP’s third party receivables are higher than their formerly-intercompany receivables due2014, as compared to ~~higher gross margin and longer payment terms on third party sales. The longer payment terms in TRP customer contracts acquired from the seller led to an~~a $4.5 million increase in overall days sales outstanding (DSO), Management intends to bring TRP payment terms in line with those of Bel’s existing customer base during contract renewals. Inventories increased by $4.9 millioninventory levels during the ~~six months ended June 30, 2013 primarily due to the implementation~~first half of a new stocking program, whereby certain of Bel’s customers now have quicker access to commonly-ordered parts. The level of raw materials has also increased since December 31, 2012, as the Company has been building up stocks of long-lead-time materials in order to lower lead times to customers.2013.

Cash and cash equivalents, marketable securities and accounts receivable comprised approximately ~~34.8%~~37.4% and ~~41.5%~~40.9% of the Company’s total assets at June 30, ~~2013~~2014 and December 31, ~~2012,~~2013, respectively. The Company’s current ratio (i.e., the ratio of current assets to current liabilities) was ~~3.1~~2.7 to 1 and ~~4.1~~3.0 to 1 at June 30, ~~2013~~2014 and December 31, ~~2012,~~2013, respectively.

Contractual Obligations

The following table sets forth at December 31, 2013 the amounts of payments due under specific types of contractual obligations, aggregated by category of contractual obligation, for the time periods described below. This table excludes $2.2 million of unrecognized tax benefits as of December 31, 2013, as the Company is unable to make reasonably reliable estimates of the period of cash settlements, if any, with the respective taxing authorities.

	Payments due by period (dollars in thousands)
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years			More than 5 years

Capital expenditure obligations	$	3,014	$	3,014	$	-	$	-		$	-
Operating leases		15,305		4,522		5,630		2,654			2,499
Raw material purchase obligations		23,376		23,288		88		-			-
									��
Total	$	41,695	$	30,824	$	5,718	$	2,654		$	2,499

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During the six months ended June 30, 2014, in connection with the acquisition of Power Solutions and the associated borrowings under the New Secured Credit Agreement, the following additional contractual obligations exist as of June 30, 2014:

	Payments due by period (dollars in thousands)
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years

Long-term debt obligations	$	145,000	$	7,250	$	21,750	$	116,000	$	-
Capital expenditure obligations		431		431		-		-		-
Operating leases		3,900		2,097		1,797		6		-
Raw material purchase obligations		15,533		15,504		29		-		-

Total	$	164,864	$	25,282	$	23,576	$	116,006	$	-

Subsequent to the June 30, 2014 quarter-end, the Company’s long-term debt obligations increased by an additional $90.0 million in connection with its borrowings under the Revolver and the DDTL in order to fund the acquisition of CS in July 2014.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to market risk primarily from changes in foreign currency exchange rates and ~~there~~changes in interest rates associated with its long-term debt. There have not been any material changes with regard to market risk during the six months ended June 30, ~~2013.~~2014. Refer to Item 7A, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2012~~2013 for further discussion of market risks.

Item 4. Controls and Procedures

Disclosure controls and procedures: As of the end of the Company’s most recently completed fiscal quarter covered by this report, the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer and Vice President of Finance, of the effectiveness of the Company’s disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-15. Based on that evaluation, the Company’s Chief Executive Officer and Vice President of Finance concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

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Changes in internal controls over financial reporting: There were no significant changes in the Company’s internal controls over financial reporting that occurred during the Company’s last fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. Other Information

Item 1. Legal Proceedings

The information called for by this Item is incorporated herein by reference to Note ~~11.~~13 of the Company’s Financial Statements, under “Legal Proceedings” ~~included~~, as set forth in Part I, Item ~~1. “Financial Statements (unaudited).”~~1 of this Quarterly Report on Form 10-Q.

~~Item 2~~. ~~Unregistered Sales of Equity Securities and Use of Proceeds~~

In July 2012, Bel’s Board of Directors approved a share buyback program whereby the Company was authorized to repurchase up to $10 million of the Company’s Class B common stock. In connection with the program, the Company repurchased and retired a total of 547,366 shares of the Company’s Class B common stock at an aggregate purchase price of $10.0 million by the end of the first quarter of 2013. This completed the share buyback program approved by the Board in 2012. There were no repurchases of Company stock during the second quarter of 2013.

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Item 6. Exhibits

(a) Exhibits:

3.1*	Amended and Restated By-Laws of Bel Fuse Inc.

31.1*	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*	Certification of the ~~Vice President of Finance~~principal accounting and financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**	Certification of the ~~Vice President of Finance~~principal accounting and financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS***	XBRL Instance Document

101.SCH***	XBRL Taxonomy Extension Schema Document

101.CAL***	XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF***	XBRL Taxonomy Extension Definition Linkbase Document

101.LAB***	XBRL Taxonomy Extension Label Linkbase Document

101.PRE***	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

** Submitted herewith.

*** XBRL (Extensible Business Reporting Language) information is furnished and not filed herewith, is not a part of a registration statement or Prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

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~~SIGNATURES~~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.
August ~~7, 2013~~11, 2014
By:	/s/ Daniel Bernstein
	Daniel Bernstein
	President and Chief Executive Officer

By:	/s/ Colin Dunn
	Colin Dunn
	Vice President of Finance and Secretary
	(Principal Financial Officer and Principal Accounting Officer)

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EXHIBIT INDEX

Exhibit 3.1* - Amended and Restated By-Laws of Bel Fuse Inc.

Exhibit 31.1* - Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2* - Certification of the ~~Vice President of Finance~~principal accounting and financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1** - Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2** - Certification of the ~~Vice President of Finance~~principal accounting and financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 101.INS*** – XBRL Instance Document

Exhibit 101.SCH*** – XBRL Taxonomy Extension Schema Document

Exhibit 101.CAL*** – XBRL Taxonomy Extension Calculation Linkbase Document

Exhibit 101.DEF*** – XBRL Taxonomy Extension Definition Linkbase Document

Exhibit 101.LAB*** – XBRL Taxonomy Extension Label Linkbase Document

Exhibit 101.PRE*** – XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

** Submitted herewith.

	Liability at		New		Cash Payments and			Liability at
	December 31, 2012		Charges		Other Settlements			June 30, 2013
Severance costs	$	122	$	1,239	$	(170	)	$	1,191
Transportation of equipment		-		100		(100	)		-
Other restructuring charges		-		48		(48	)		-
Total	$	122	$	1,387	$	(318	)	$	1,191