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 ~~September~~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 ~~November~~August 1, ~~2013~~2014
Class A Common Stock ($0.10 par value)		2,174,912
Class B Common Stock ($0.10 par value)		~~9,223,927~~9,702,877

BEL FUSE INC.

INDEX

			Page
Part I		Financial Information

	Item 1.	Financial Statements (unaudited)	1

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

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

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

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

		Notes to Condensed Consolidated Financial Statements (unaudited)	7 - 1920

	Item 2.	Management's Discussion and Analysis of
		Financial Condition and Results of Operations	2021 - 2729

	Item 3.	Quantitative and Qualitative Disclosures About
		Market Risk	2729

	Item 4.	Controls and Procedures	2729

Part II		Other Information

	Item 1.	Legal Proceedings	27

	~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	2729

	Item 6.	Exhibits	2830

	Signatures		2931

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PART I. Financial Information

Item 1. Financial Statements (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 ~~nine~~six months ended ~~September~~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)

		September 30,			December 31,				June 30,		December 31,
		2013			2012				2014		2013
ASSETS
Current Assets:
Cash and cash equivalents		$	46,920		$	71,262			$	87,769	$	62,123
Accounts receivable - less allowance for doubtful accounts of $968
and $743 at September 30, 2013 and December 31, 2012, respectively			68,666			42,865
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			71,779			54,924				98,706		70,019
Restricted cash			12,994			12,993
Prepaid expenses and other current assets			6,884			4,482				7,486		3,519
Refundable income taxes			3,456			2,955				2,446		1,650
Deferred income taxes			2,838			1,437				4,963		2,995
Total Current Assets			213,537			190,918				298,877		204,155

Property, plant and equipment - net			40,338			35,002				67,051		40,896
Deferred income taxes			1,591			1,403				3,537		1,680
Intangible assets - net			22,700			22,191				49,689		29,472
Goodwill			27,222			13,559				55,644		18,490
Other assets			13,009			12,510				20,045		13,448
TOTAL ASSETS		$	318,397		$	275,583			$	494,843	$	308,141

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable		$	35,244		$	18,862			$	58,369	$	29,518
Accrued expenses			32,150			25,360				40,435		22,442
Accrued restructuring costs			-			122
Short-term borrowings under revolving credit line			12,000			-				-		12,000
Current maturities of long-term debt										7,250
Notes payable			532			205				479		739
Income taxes payable			2,585			1,040				1,562		1,496
Dividends payable			851			799				843		786
Total Current Liabilities			83,362			46,388				108,938		66,981

Long-term Liabilities:
Long-term debt, noncurrent										137,750		-
Liability for uncertain tax positions			1,218			2,161				1,687		1,218
Minimum pension obligation and unfunded pension liability			11,964			11,045				11,376		10,830
Deferred income taxes			-			394
Other long-term liabilities			512			233				508		410
Total Long-term Liabilities			13,694			13,833				151,321		12,458
Total Liabilities			97,056			60,221				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; 9,225,327 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)			923			937				933		933
Additional paid-in capital			18,421			20,452				20,089		18,914
Retained earnings			202,556			195,183				211,994		207,993
Accumulated other comprehensive loss			(776	)		(1,427	)
Accumulated other comprehensive income										1,351		645
Total Stockholders' Equity			221,341			215,362				234,584		228,702
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	318,397		$	275,583			$	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						Nine Months Ended							Three Months Ended						Six Months Ended
		September 30,						September 30,							June 30,						June 30,
		2013			2012			2013			2012				2014			2013			2014			2013

Net Sales		$	101,164		$	76,059		$	258,173		$	214,842			$	99,439		$	93,981		$	182,085		$	157,009

Costs and expenses:
Cost of sales			80,730			63,472			212,699			179,690				81,493			78,717			150,069			132,649
Selling, general and administrative			12,106			9,929			34,657			28,350				13,176			12,342			24,365			22,741
Restructuring charges			-			1,778			1,387			2,160				1,056			1,263			1,056			1,387
			92,836			75,179			248,743			210,200				95,725			92,322			175,490			156,777

Income from operations			8,328			880			9,430			4,642				3,714			1,659			6,595			232

Gain on sale of investment			98			-			98			-
Impairment of investment			-			(297	)		-			(775	)
Interest expense			(67	)		-			(75	)		-				(225	)		(5	)		(255	)		(8	)
Interest income and other, net			82			63			189			216				49			69			100			107

Earnings before provision (benefit) for income taxes			8,441			646			9,642			4,083				3,538			1,723			6,440			331
Provision (benefit) for income taxes			605			(1,845	)		(47	)		(721	)			473			34			872			(800	)

Net earnings		$	7,836		$	2,491		$	9,689		$	4,804			$	3,065		$	1,689		$	5,568		$	1,131


Earnings per share:
Class A common share - basic and diluted		$	0.65		$	0.20		$	0.80		$	0.37			$	0.25		$	0.14		$	0.45		$	0.09
Class B common share - basic and diluted		$	0.69		$	0.21		$	0.86		$	0.41			$	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			9,228,731			9,697,097			9,221,032			9,668,785				9,331,982			9,213,178			9,333,460			9,217,119

Dividends paid per share:
Class A common share		$	0.06		$	0.06		$	0.18		$	0.18			$	0.06		$	0.06		$	0.12		$	0.12
Class B common share		$	0.07		$	0.07		$	0.21		$	0.21			$	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 Nine Months Ended
September 30, September 30,
2013 2012 2013 2012

Net earnings
$ 7,836 $ 2,491 $ 9,689 $ 4,804
Other comprehensive income:
Currency translation adjustment, net of taxes of $212, $0,
   ($4) and $0, respectively 1,820 51 638 (283 )
Reclassification adjustment for (gain on sale) write-down of
    marketable securities included in net earnings, net of tax of ($37),
$113, ($37) and $295, respectively (61 ) 185 (61 ) 481
Unrealized holding losses on marketable securities arising during
the period, net of taxes of $28, ($59), $17 and ($118), respectively 46 (95 ) 28 (187 )
Change in unfunded SERP liability, net of taxes of $24, $18,
   $20 and $53, respectively 53 40 46 120
Other comprehensive income 1,858 181 651 131

Comprehensive income $ 9,694 $ 2,672 $ 10,340 $ 4,935

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
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(Unaudited)
	Six Months Ended
	June 30,
	2014			2013
Cash flows from operating activities:
Net earnings	$	5,568		$	1,131
Adjustments to reconcile net earnings to net
cash provided by (used in) operating activities:
Depreciation and amortization		6,507			5,397
Stock-based compensation		1,143			934
Gain on disposal of property, plant and equipment		-			(13	)
Other, net		269			471
Deferred income taxes		(475	)		(1,120	)
Changes in operating assets and liabilities (see page 6)		(318	)		(10,661	)
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		(2,969	)		(3,088	)
Payment for acquisition, net of cash acquired (see page 6)		(109,879	)		(20,932	)
Proceeds from surrender of COLI		5,756			-
Proceeds from disposal of property, plant and equipment		20			13
Net Cash Used in Investing Activities		(112,828	)		(24,007	)

Cash flows from financing activities:
Dividends paid to common shareholders		(1,511	)		(1,512	)
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	)
Net Cash Provided by (Used In) Financing Activities		125,812			(4,719	)

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

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

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

BEL FUSE INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(Unaudited)
Nine Months Ended
September 30,
2013 2012
Cash flows from operating activities:
Net earnings $ 9,689 $ 4,804
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 7,636 6,637
Stock-based compensation 1,376 1,294
Loss on disposal of property, plant and equipment - 111
Realized gain on sale of investment (98 ) -
Impairment of investment - 775
Other, net 356 (275 )
Deferred income taxes (223 ) (1,546 )
Changes in operating assets and liabilities (see page 6) (12,675 ) (4,002 )
      Net Cash Provided by Operating Activities 6,061 7,798

Cash flows from investing activities:
Purchase of property, plant and equipment (5,127 ) (3,374 )
Purchase of intangible asset (1,336 )
Payment for acquisitions, net of cash acquired (see page 6) (30,931 ) (19,187 )
Proceeds from sale of SERP investments 2,820 -
Purchase of company-owned life insurance (2,820 ) -
Purchase of marketable securities - (19 )
Proceeds from disposal of property, plant and equipment - 36
       Net Cash Used in Investing Activities (37,394 ) (22,544 )

Cash flows from financing activities:
Dividends paid to common shareholders (2,264 ) (2,350 )
Borrowings under revolving credit line 12,000 -
Increase (decrease) in notes payable 314 (48 )
Purchase and retirement of Class B common stock (3,356 ) (1,705 )
       Net Cash Provided by (Used In) Financing Activities 6,694 (4,103 )

Effect of exchange rate changes on cash 297 133

Net Decrease in Cash and Cash Equivalents (24,342 ) (18,716 )
Cash and Cash Equivalents - beginning of period 71,262 88,241
Cash and Cash Equivalents - end of period $ 46,920 $ 69,525

(Continued)
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)
		Nine Months Ended							Six Months Ended
		September 30,							June 30,
		2013			2012				2014			2013

Changes in operating assets and liabilities consist of:
Increase in accounts receivable		$	(13,015	)	$	(3,562	)		$	(4,235	)	$	(7,894	)
Increase in inventories			(7,180	)		(1,718	)
Decrease (increase) in inventories										4,539			(4,497	)
Increase in prepaid expenses and other current assets			(1,483	)		(668	)			(701	)		(1,071	)
Increase in other assets			(95	)		(189	)			(312	)		(27	)
Increase in accounts payable			6,920			288				2,692			2,487
Increase in accrued expenses			2,640			1,174
Decrease in accrued expenses										(2,298	)		(428	)
Increase in other liabilities			274			-				6			29
(Decrease) increase in accrued restructuring costs			(122	)		1,159
Increase in accrued restructuring costs										-			1,069
Decrease in income taxes payable			(614	)		(486	)			(9	)		(329	)
		$	(12,675	)	$	(4,002	)		$	(318	)	$	(10,661	)

Supplementary information:
Cash paid during the period for:
Income taxes, net of refunds received		$	1,152		$	1,234			$	1,387		$	651
Interest			75			2				60			6

Details of acquisitions:
Fair value of identifiable net assets acquired		$	25,689		$	13,282			$	93,258		$	28,108
Goodwill			13,630			8,903				37,534			1,240
Fair value of net assets acquired		$	39,319		$	22,185			$	130,792		$	29,348

Fair value of net assets acquired		$	39,319		$	22,185			$	130,792		$	29,348
Less: Cash acquired in acquisition			(8,388	)		(2,991	)			(20,913	)		(8,388	)
Deferred consideration			-			(7	)			-			(28	)
Cash paid for acquisitions, net of cash acquired		$	30,931		$	19,187			$	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 ~~September~~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 ~~nine~~six months ended ~~September~~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 (“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 and the~~values. The Company’s condensed consolidated results of operations ~~for the three and nine months ended September 30, 2013 and September 30, 2012~~ include the operating results of the ~~acquired companies from~~2013 Acquisitions since their respective acquisition ~~dates through the respective period end~~ dates. The accompanying condensed consolidated financial statements as of December 31, ~~2012~~2013 and for the three and ~~nine~~six months ended ~~September~~June 30, ~~2012~~2013 have been restated to reflect ~~immaterial~~ measurement period adjustments, as further described in Note 3, related to the ~~2012 Acquisitions, as applicable.~~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, 2014 include the operating results of Power Solutions from the acquisition date through June 30, 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 ~~nine~~six months ended ~~September~~June 30, ~~2013. Recent accounting pronouncements adopted during the first nine 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 of operations,~~ financial ~~condition or cash flows.~~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 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 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.

Return to Index

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 ~~nine~~six months ended ~~September~~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
	June 30,				June 30,
	2014		2013		2014		2013

Numerator:
Net earnings	$	3,065	$	1,689	$	5,568	$	1,131
Less Dividends declared:
Class A		131		131		261		261
Class B		653		643		1,307		1,275
Undistributed earnings (loss)	$	2,281	$	915	$	4,000	$	(405	)

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 net earnings	$	545	$	299	$	987	$	187
Class B net earnings		2,520		1,390		4,581	$	944
Net earnings	$	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
Class B common share - basic and diluted		9,331,982		9,213,178		9,333,460		9,217,119

Earnings per share:
Class A common share - basic and diluted	$	0.25	$	0.14	$	0.45	$	0.09
Class B common share - basic and diluted	$	0.27	$	0.15	$	0.49	$	0.10

3. ACQUISITIONS

2014 Acquisition:

Three Months Ended Nine Months Ended
September 30, September 30,
2013 2012 2013 2012

Numerator:
Net earnings $ 7,836 $ 2,491 $ 9,689 $ 4,804
Less Dividends:
     Class A 131 130 391 392
     Class B 650 681 1,925 2,036
Undistributed earnings $ 7,055 $ 1,680 $ 7,373 $ 2,376

Undistributed earnings allocation - basic and diluted:
     Class A undistributed earnings $ 1,293 $ 296 $ 1,353 $ 419
     Class B undistributed earnings 5,762 1,384 6,020 1,957
     Total undistributed earnings $ 7,055 $ 1,680 $ 7,373 $ 2,376

Net earnings allocation - basic and diluted:
     Class A allocated earnings $ 1,424 $ 426 $ 1,744 $ 811
     Class B allocated earnings 6,412 2,065 7,945 3,993
     Net earnings $ 7,836 $ 2,491 $ 9,689 $ 4,804

Denominator:
Weighted-average shares outstanding:
     Class A common share - basic and diluted 2,174,912 2,174,912 2,174,912 2,174,912
     Class B common share - basic and diluted 9,228,731 9,697,097 9,221,032 9,668,785

Earnings per share:
     Class A common share - basic and diluted $ 0.65 $ 0.20 $ 0.80 $ 0.37
     Class B common share - basic and diluted $ 0.69 $ 0.21 $ 0.86 $ 0.41
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.

Return to Index

~~3. ACQUISITIONS~~During the three and six months ended June 30, 2014, the Company incurred $1.0 million and $1.0 million, respectively, of acquisition-related costs associated with the acquisition of Power Solutions. These costs are included in selling, general and administrative expense in the accompanying condensed consolidated statements of operations for the three and six months ended June 30, 2014.

While the initial accounting related to the 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 current estimate of the respective acquisition date fair values of the consideration paid and identifiable net assets acquired (in thousands):


	Acquisition-Date
	Fair Values
Cash and cash equivalents	$	20,913
Accounts receivable		29,388
Inventories		33,156		(a)
Other current assets		5,387
Property, plant and equipment		28,176		(b)
Intangible assets		21,188		(c)
Other assets		536
Total identifiable assets		138,744

Accounts payable		(26,180	)
Accrued expenses		(20,290	)
Income taxes payable		223
Deferred income tax liability, noncurrent		860
Other long-term liabilities		(99	)
Total liabilities assumed		(45,486	)
Net identifiable assets acquired		93,258
Goodwill		37,534		(d)
Net assets acquired	$	130,792


Cash paid	$	130,792
Deferred consideration		-
Fair value of consideration transferred	$	130,792

(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 Power Solutions’ balance sheet as of the acquisition date.

(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 Power Solutions’ balance sheet as of the acquisition date.

(c)

The Company has identified certain intangible assets related to the 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 relationships, which are being valued by a third-party appraiser. These appraisals were not complete as of the date of this filing.

(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, 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.

The results of operations of Power Solutions have been included in the Company’s consolidated financial statements for the period subsequent to 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.

Return to Index

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, respectively. The pro forma results do not reflect the realization of any potential cost savings, or any related integration costs. Certain cost savings may result from the acquisition of Power Solutions; however, there can be no assurance that these cost savings will be achieved. The unaudited pro forma results are presented for illustrative purposes only and are not necessarily indicative of the results that would have actually been obtained if the acquisitions had occurred on the assumed dates, nor is the pro forma data intended to be a projection of results that may be obtained in the 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 ~~acquired 100%~~completed its acquisition of ~~the outstanding shares~~TRP for $21.0 million, net 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 an additional net payment of $0.1 million was made in the third quarter of 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”).acquired. 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.

On August 20, 2013, the Company completed its acquisition of Array, a manufacturer of aerospace and mil-spec connector products based in Miami, Florida, for $10.0 million in cash. The 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~~Array’s customers. Array has become part of Bel’s Cinch Connector business.

During the three and ~~nine~~six months ended ~~September~~June 30, ~~2013,~~2014, the Company incurred $0.1 million and ~~$0.6~~$0.1 million, respectively, of acquisition-related costs associated with 2012 and 2013 Acquisitions. During the 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 2013 Acquisitions. These costs are included in selling, general and administrative expense in the accompanying condensed consolidated ~~statement~~statements of operations for the three and ~~nine~~six months ended ~~September~~June 30, 2014 and 2013.

~~While the initial accounting related~~

Return to ~~the acquisitions of~~Index

The purchase price allocations for TRP and Array ~~is not complete as~~were finalized during the first quarter of ~~the filing date of this Form 10-Q, the~~2014. The following table depicts the ~~Company’s initial estimate of the~~finalized respective acquisition date fair values of the consideration paid ~~or payable~~ and identifiable net assets acquired (in thousands):

	TRP										Array			2013 Acquisitions			TRP									Array									2013 Acquisitions
					Measurement			March 29,						Acquisition-Date						Measurement			March 29,						Measurement			August 20,			Acquisition-Date
	March 29,				Period			2013			August 20,			Fair Values			March 29,			Period			2013			August 20,			Period			2013			Fair Values
	2013				Adjustments			(As adjusted)			2013			(As adjusted)			2013			Adjustments			(As finalized)			2013			Adjustments			(As finalized)			(As finalized)
Cash	$	8,388			$	-		$	8,388		$	-		$	8,388		$	8,388		$	-		$	8,388		$	-		$	-		$	-		$	8,388
Accounts receivable		11,580				(39	)		11,541			994			12,535			11,580			(39	)		11,541			994			-			994			12,535
Inventories		6,258		(a)		707			6,965			2,588			9,553			6,258			1,097			7,355			2,588			(1,595	)		993			8,348
Other current assets		1,953				-			1,953			83			2,036			1,953			(334	)		1,619			83			345			428			2,047
Property, plant and equipment		4,693		(b)		(165	)		4,528			2,285			6,813			4,693			1,097			5,790			2,285			1,225			3,510			9,300
Intangible assets		-		(c)		-			-			-			-			-			6,110			6,110			-			1,470			1,470			7,580
Other assets		1,151				-			1,151			84			1,235			1,151			198			1,349			84			1,663			1,747			3,096
Total identifiable assets		34,023				503			34,526			6,034			40,560			34,023			8,129			42,152			6,034			3,108			9,142			51,294

Accounts payable		(8,565	)			-			(8,565	)		(677	)		(9,242	)		(8,565	)		331			(8,234	)		(677	)		1			(676	)		(8,910	)
Accrued expenses		(4,003	)			132			(3,871	)		(206	)		(4,077	)		(4,003	)		(462	)		(4,465	)		(206	)		(79	)		(285	)		(4,750	)
Other current liabilities		(25	)			(671	)		(696	)		(214	)		(910	)		(25	)		(734	)		(759	)		(214	)		214			-			(759	)
Noncurrent liabilities		-				-			-			(643	)		(643	)		-			(586	)		(586	)		(643	)		(1,105	)		(1,748	)		(2,334	)
Total liabilities assumed		(12,593	)			(539	)		(13,132	)		(1,740	)		(14,229	)		(12,593	)		(1,451	)		(14,044	)		(1,740	)		(969	)		(2,709	)		(16,753	)
Net identifiable assets acquired		21,430				(36	)		21,394			4,294			25,688			21,430			6,678			28,108			4,294			2,139			6,433			34,541
Goodwill		8,278		(d)		(313	)		7,965			5,666			13,631			8,278			(7,038	)		1,240			5,666			(2,094	)		3,572			4,812
Net assets acquired	$	29,708			$	(349	)	$	29,359		$	9,960		$	39,319		$	29,708		$	(360	)	$	29,348		$	9,960		$	45		$	10,005		$	39,353


Cash paid	$	22,400			$	6,959		$	29,359		$	9,960		$	39,319		$	22,400		$	6,948		$	29,348		$	9,960		$	45		$	10,005		$	39,353
Assumption of severance payment		109				(109	)		-			-			-			109			(109	)		-			-			-			-			-
Fair value of grant of license		-		(e)		-			-			-			-
Fair value of consideration transferred		22,509				6,850			29,359			9,960			39,319
Fair value of consideration
transferred																		22,509			6,839			29,348			9,960			45			10,005			39,353
Deferred consideration		7,199		(f)		(7,199	)		-			-			-			7,199			(7,199	)		-			-			-			-			-
Total consideration paid/payable	$	29,708			$	(349	)	$	29,359		$	9,960		$	39,319
Total consideration paid																	$	29,708		$	(360	)	$	29,348		$	9,960		$	45		$	10,005		$	39,353

~~(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 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 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 acquisition, including technology, license agreements and customer lists, which are being valued by a third-party appraiser. These appraisals were not complete as of the date of this filing.

~~(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 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 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 2013 Acquired Companies have been included in the Company’s consolidated financial statements for the period subsequent to their respective acquisition dates. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2013,~~2014, the 2013 Acquired Companies contributed ~~$26.4~~revenue of $19.7 million and $48.6 million of revenue, respectively, and $4.6 million and $8.7 million of net earnings, respectively, to the Company’s consolidated financial results. The Company is still in the process of revising its corporate overhead allocations, and the results disclosed related to the 2013 Acquisitions do not yet include such allocations.

The unaudited pro forma information below presents the combined operating results of the Company and the 2013 Acquired Companies. 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 2013 Acquisitions; however, there can be no assurance that these cost savings will be achieved. These pro forma results do not purport to be indicative of the results that would have actually been obtained if the 2013 Acquisitions had occurred as of January 1, 2012, 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 the acquisitions of the 2013 Acquired Companies were completed as of January 1, 2012. The pro forma results noted below for the three and nine months ended September 30, 2012 also include the effects of the 2012 Acquisitions discussed below (dollars in thousands except per share data):

Three Months Ended Nine Months Ended
September 30, September 30,
2013 2012 2013 2012

Revenue $ 102,056 $ 97,982 $ 283,137 $ 283,986
Net earnings 7,882 5,295 12,606 12,578
Earnings per Class A common share - basic and diluted 0.66 0.42 1.05 1.00
Earnings per Class B common share - basic and diluted 0.70 0.45 1.12 1.08

~~2012 Acquisitions~~:

On March 9, 2012, 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. 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 $0.1 million and $0.6 million during the three-month periods ended September 30, 2013 and 2012, respectively, and $0.1 million and $0.6 million during the nine-month periods ended September 30, 2013 and 2012, respectively. These costs are included in selling, general and administrative expense in the accompanying condensed consolidated statements of operations.

During the year ended December 31, 2012, the Company completed the purchase accounting related to the GigaCom and Fibreco acquisitions. During the third quarter of 2013, the Company completed the purchase accounting related to its acquisition of Bel Power Europe. The following table reflects the finalized acquisition date fair values of the consideration transferred and identifiable net assets acquired related to the 2012 acquisitions (in thousands):

Measurement Acquisition-Date
Acquisition-Date Period Fair Values
Fair Values Adjustments (As finalized)
Cash and cash equivalents $ 2,991 $ - $ 2,991
Accounts receivable 3,750 3 3,753
Inventories 1,061 (16 ) 1,045
Other current assets 90 - 90
Property, plant and equipment 502 263 765
Intangible assets 30 11,626 11,656
     Total identifiable assets 8,424 11,876 20,300

Accounts payable (1,702 ) - (1,702 )
Accrued expenses (1,736 ) - (1,736 )
Notes payable (216 ) - (216 )
Income taxes payable (264 ) (60 ) (324 )
Deferred income tax liability, current (70 ) - (70 )
Deferred income tax liability, noncurrent - (2,700 ) (2,700 )
Other long-term liabilities (216 ) - (216 )
     Total liabilities assumed (4,204 ) (2,760 ) (6,964 )
     Net identifiable assets acquired 4,220 9,116 13,336
     Goodwill 17,965 (8,900 ) 9,065
     Net assets acquired $ 22,185 $ 216 $ 22,401

Cash paid $ 22,138 263 $ 22,401
Deferred consideration 47 (47 ) -
     Fair value of consideration transferred $ 22,185 $ 216 $ 22,401

~~The fair value of identifiable intangible assets noted above (as adjusted) consists of the following:~~

Weighted-Average Life Acquisition-Date Fair Value
Trademarks Indefinite $ 1,264
Technology 20 years 6,542
Customer relationships 16 years 3,292
Non-compete agreements 2 years 558
Total identifiable intangible assets acquired $ 11,656

The results of operations of the 2012 Acquired Companies have been included in the Company’s consolidated financial statements for the periods subsequent to their respective acquisition dates. During the three-month periods ended September 30, 2013 and 2012, Fibreco and Bel Power Europe contributed combined revenues of $1.8 million and $0.9$37.6 million, respectively, and ~~combined~~ net earnings of ~~$0.1~~$3.7 million and ~~less than $0.1~~$4.8 million, respectively, to the Company’s consolidated financial results. During each of the ~~nine-month periods~~three and six months ended ~~September~~June 30, 2013, ~~and 2012, Fibreco and Bel Power Europe~~the 2013 Acquired Companies contributed ~~combined revenues~~revenue of ~~$7.7~~$22.2 million and ~~$0.9 million, respectively, and combined~~ net earnings of ~~$0.7~~$3.3 million ~~and less than $0.1 million, respectively,~~ to the Company’s consolidated financial results. The acquisition of GigaCom has contributed to Bel’s research and development efforts and its technology has been incorporated into products now being sold by Fibreco. GigaCom incurred expenses, primarily related to research and development, of $0.2 million and $0.1 million during the three-month periods ended September 30, 2013 and 2012, respectively, and $0.7 million and $0.3 million during the nine-month periods ended September 30, 2013 and 2012, respectively.

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

As of ~~September~~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 ~~September~~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 September~~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 ~~September~~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 ~~nine~~first six months ~~ended September 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 ~~nine~~first six months ~~ended September 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 ~~September~~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 September 30, 2013
As of June 30, 2014
Available-for-sale securities:
Investments held in rabbi trust	$	3,238	$	3,238	$	-	$	-
Investments held in Rabbi Trust									$	3,485	$	3,485	$	-	$	-
Marketable securities		3		3		-		-		4		4		-		-

Total	$	3,241	$	3,241	$	-	$	-	$	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 ~~September~~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 ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014 or ~~2012~~2013 that would warrant interim impairment testing.

5. INVENTORIES

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

	September 30,		December 31,		June 30,		December 31,
	2013		2012		2014		2013
Raw materials	$	30,919	$	26,157	$	48,873	$	29,428
Work in progress		12,081		8,200		12,261		8,783
Finished goods		28,779		20,567		37,572		31,808
	$	71,779	$	54,924	$	98,706	$	70,019

~~6. INTANGIBLE ASSET~~

~~During the third quarter~~At June 30, 2014, Power Solutions inventory with a book value of ~~2013, the Company paid $1.3~~$33.4 million ~~and received $0.3 million associated with licensing agreements entered into with Radiall SA. The agreements cover the parties’ respective technologies for EBOSA~~® ~~fibre optic termini and the EPX~~® ~~connector range.~~ ~~The $1.3 million paid by the Company is reflected as an intangible asset and the $0.3 million received by the Company~~ is included in ~~other long-term liabilities on~~ the ~~accompanying condensed consolidated balance sheet at September 30, 2013. Each will be amortized over the life of the respective agreement of 20 years.~~

table above.

1312

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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						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30,						September 30,						June 30,						June 30,
	2013			2012			2013			2012			2014			2013			2014			2013
Total segment sales:
North America	$	34,273		$	34,370		$	95,796		$	106,349		$	39,405		$	32,301		$	70,859		$	61,523
Asia		69,602			47,238			166,362			125,881			61,968			64,036			111,860			96,760
Europe		9,313			8,983			30,029			24,200			16,550			10,591			27,441			20,716
Total segment sales		113,188			90,591			292,187			256,430			117,923			106,928			210,160			178,999
Reconciling item:
Intersegment sales		(12,024	)		(14,532	)		(34,014	)		(41,588	)		(18,484	)		(12,947	)		(28,075	)		(21,990	)
Net sales	$	101,164		$	76,059		$	258,173		$	214,842		$	99,439		$	93,981		$	182,085		$	157,009

Income (loss) from operations:
Income from operations:
North America	$	(96	)	$	(189	)	$	(3,591	)	$	4,074		$	(1,617	)	$	(2,012	)	$	(734	)	$	(3,495	)
Asia		8,400			1,048			12,377			8			4,715			3,776			6,388			3,112
Europe		24			21			644			560			616			(105	)		941			615
	$	8,328		$	880		$	9,430		$	4,642		$	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~~At June 30, 2014, Power Solutions’ total assets of $181.4 million are included in the ~~three and nine months ended September 30, 2013, 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 ~~revenues of $25.6 million and $47.8 million, respectively, and~~to Bel’s segment sales, income from operations ~~of $5.0 million~~ and $9.5 million, respectively, to the Company’s Asia operating segment. During each of the three and nine months ended September 30, 2013, the acquisition of Array contributed revenues of $0.8 million to the Company’s North America operating segment. The Company is still in the process of revising its corporate overhead allocations, and the results disclosed related to the 2013 Acquisitions do not yet include such allocations. During the three-month periods ended September 30, 2013 and 2012, Fibreco and Bel Power Europe contributed combined revenues of $1.8 million and $0.9 million, respectively, and combined operating income of $0.1 million and $0.1 million, respectively, to the Company’s Europe operating segment. During the nine-month periods ended September 30, 2013 and 2012, Fibreco and Bel Power Europe contributed combined revenues of $7.7 million and $0.9 million, respectively, and combined operating income of $1.3 million and $0.1 million, respectively, to the Company’s Europe operating segment.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.

8. INCOME TAXES

At ~~September~~June 30, ~~2013~~2014 and December 31, ~~2012,~~2013, the Company has approximately ~~$2.2~~$2.5 million and ~~2.7~~$2.2 million, respectively, of liabilities for uncertain tax positions ($~~1.0~~0.8 million and ~~$0.5~~$1.0 million, respectively, included in income taxes payable and ~~$1.2~~$1.7 million and ~~$2.2~~$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 ~~September~~June 30, ~~2013.~~2014. A total of ~~$1.0~~$0.8 million of previously recorded liabilities for uncertain tax positions relates ~~primarily~~principally to the ~~2008~~2010 tax ~~year which~~year. The statute of limitations related to these liabilities is scheduled to expire ~~during the three months ended~~on September ~~30,~~15, 2014. Additionally, a total of $0.5 million and $2.5 million of previously recorded liabilities for uncertain tax positions, interest and penalties relating to the 2006 and 2009 tax years and the 2007 through 2009 tax years, respectively, were reversed during the quarters ended September 30, 2013 and 2012, respectively. This was offset in part by an increase in the liability for uncertain tax positions in the amount of $1.2 million during the quarter ended September 30, 2012.

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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 ~~nine~~six months ended ~~September~~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 ~~September~~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 ~~completed~~was required to complete a 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 million,~~ $0.6 million and ~~$0.4~~$1.0 million respectively for the ~~Fibreco, Gigacom~~TRP and ~~Bel Power Europe~~Array acquisitions. At ~~September~~June 30, ~~2013 and December 31, 2012,~~2014, a ~~combined~~net deferred tax ~~liability~~asset of ~~$2.4~~$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 September 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 direct 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 nine months ended September 30, 2013. However, U.S. deferred taxes need not be provided under current U.S. tax law. At September 30, 2013, the fair market value reports have not been completed and therefore the Company had no additional deferred tax amounts relating to the TRP acquisition.

In connection with the 2013 acquisition of Array, the Company has not completed a preliminary fair market value report of property, plant and equipment and intangibles. The Company acquired a deferred tax liability in the amount of $0.9 million arising from temporary differences related to property, plant and equipment. At September 30, 2013, there were no additional deferred tax amounts reported on the condensed consolidated balance sheet as the fair market value report has not been completed.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)~~. ~~The Company is considering making a Section 338(g) election with respect to the 2013 acquisition of Array.~~

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.

9. ACCRUED EXPENSES

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

	September 30,		December 31,		June 30,		December 31,
	2013		2012		2014		2013
Sales commissions	$	1,589	$	1,295	$	1,903	$	1,431
Subcontracting labor		2,626		2,408		2,218		2,406
Salaries, bonuses and related benefits		12,905		6,023		24,609		13,674
Litigation reserve		11,549		11,549		726		723
Warranty accrual						3,667		-
Other		3,481		4,085		7,312		4,208
	$	32,150	$	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 and liability balances related to restructuring charges for the nine months ended September 30, 2013 are shown in the table below (dollars in thousands). The liability at December 31, 2012 related to the final severance payments due related to the closure of the Vinita, Oklahoma manufacturing facility. New charges noted below relate to severance costs associated with an additional reduction in workforce implemented in the second quarter of 2013.

Liability at December 31, 2012 New Charges Cash Payments and Other Settlements Liability at September 30, 2013
Severance costs $ 122 $ 1,239 $ (1,361 ) $ -
Transportation of equipment - 100 (100 ) -
Other restructuring charges - 48 (48 ) -
Total $ 122 $ 1,387 $ (1,509 ) $ -

10.

DEBT

At ~~September 30, 2013 and~~ December 31, ~~2012,~~2013, the Company maintained a $30 million line of credit with Bank of America (the “Credit Agreement”), which was due to expire on ~~June 30, 2014. In August~~October 14, 2016. At December 31, 2013, the ~~Company borrowed $12.0 million~~borrowings under the line of credit ~~in connection with its acquisition of Array. At September 30, 2013,~~amounted to $12.0 million and the balance available under the ~~credit agreement~~Credit Agreement was $18.0 million. There were no previous borrowings under the credit agreement and, as a result, there was no balance outstanding as of December 31, 2012. Amounts outstanding under this line of credit are collateralized with a first priority security interest in 100% of the issued and outstanding shares of the capital stock of the Company's material domestic subsidiaries and 65% of all the issued and outstanding shares of the capital stock of certain of the foreign subsidiaries of the Company. 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. 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 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,~~Credit Agreement, the Company iswas required to maintain certain financial ratios and comply with other financial conditions. AsDuring 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 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 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 was ~~not~~ in compliance with its ~~tangible net worth debt~~most restrictive covenant, ~~as of September 30, 2013. In November 2013,~~the Leverage Ratio. The unused credit available under the credit ~~agreement~~facility at June 30, 2014 was ~~amended~~$120 million, of which we had the ability to ~~reflect modifications~~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, 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 ~~minimum tangible net worth~~$145.0 million Term Loan. The $70.0 million DDTL and ~~maximum leverage covenant calculations, and~~$50.0 million Revolver were fully available at June 30, 2014.

Return to ~~extend the term~~Index

Scheduled principal payments of the ~~agreement through October~~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 ~~2016.~~for discussion of additional borrowings under the New Secured Credit Agreement subsequent to the June 30, 2014 quarter-end.

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 ~~September~~June 30, ~~2013~~2014 and ~~2012~~2013 amounted to approximately $0.1 million in each period. The expense for the ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014 and ~~2012~~2013 amounted to approximately ~~$0.4~~$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 ~~September~~June 30, ~~2013,~~2014, the ~~plan~~U.S. Plan owned ~~14,911~~14,886 and ~~203,069~~182,539 shares of Bel Fuse Inc. Class A and Class B common stock, respectively.

The Company also has a retirement fund in Asia (the “Asia Plan”) which covers substantially all of 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 ~~September~~June 30, ~~2013~~2014 and ~~2012~~2013 amounted to approximately $0.1 million in each period. The expense for the ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014 and ~~2012~~2013 amounted to approximately ~~$0.2~~$0.1 million in each period. As of ~~September~~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.

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

Three Months Ended Nine Months Ended
September 30, September 30,
2013 2012 2013 2012
Service cost $ 139 $ 109 $ 417 $ 327
Interest cost 112 104 337 312
Amortization of adjustments 77 58 231 174
Total SERP expense $ 328 $ 271 $ 985 $ 813

September 30, December 31,
2013 2012
Balance sheet amounts:
   Minimum pension obligation
      and unfunded pension liability $ 11,964 $ 11,045

   Amounts recognized in accumulated
      other comprehensive loss, pretax:
         Prior service cost $ 931 $ 877
         Net gains 2,764 2,884
$ 3,695 $ 3,761

~~12. ACCUMULATED OTHER COMPREHENSIVE LOSS~~

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

September 30, December 31,
2013 2012

Foreign currency translation adjustment, net of taxes of ($4)
  at September 30, 2013 $ 1,565 $ 927
Unrealized holding gains on available-for-sale
  securities, net of taxes of $140 and $161 as of
  September 30, 2013 and December 31, 2012 223 256
Unfunded SERP liability, net of taxes of ($1,131) and ($1,151) as
  of September 30, 2013 and December 31, 2012 (2,564 ) (2,610 )

Accumulated other comprehensive loss $ (776 ) $ (1,427 )

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Service cost	$	138	$	139	$	276	$	278
Interest cost		135		112		270		224
Amortization of adjustments		46		77		92		154
Total SERP expense	$	319	$	328	$	638	$	656

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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

12. ACCUMULATED OTHER COMPREHENSIVE INCOME

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

	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

Changes in accumulated other comprehensive loss by component during the ~~nine~~six months ended ~~September~~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, 2013 $ 927 $ 256 $ (2,610 ) $ (1,427 )
     Other comprehensive income (loss) before reclassifications 638 28 (185 ) 481
     Amounts reclassified from accumulated other
          comprehensive income (loss) - (61 ) (a) 231 (b) 170
     Net current period other comprehensive income (loss) 638 (33 ) 46 651

Balance at September 30, 2013 $ 1,565 $ 223 $ (2,564 ) $ (776 )

(a) This reclassification relates to the gain on sale of SERP investments during the third quarter of 2013. This is recorded as
a gain on sale of investment in the accompanying condensed consolidated statements of operations.

(b) This reclassification 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.

			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

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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 lease commitments associated with the 2013 Acquired Companies. At September 30, 2013, the~~Company incurred additional lease commitments ~~related to~~upon the ~~2013 Acquired Companies amounted to $3.6~~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 ~~purchase orders associated with the 2013 Acquired Companies. At September~~Power Solutions and at June 30, ~~2013, the Company had additional~~2014, Power Solutions’ purchase orders related to the purchase of raw materials ~~of approximately $4.5~~totaled $15.5 million and ~~additional purchase orders related to~~ capital expenditures ~~of $0.5 million associated with the 2013 Acquired Companies.~~ 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 ~~resp~~ectrespect 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 September 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 filed a joint petition for certiorari with the Supreme Court on September 23, 2013.certain legal fees.

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 filed a motion to dismiss the 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.

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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 2014, in connection with the acquisition of CS, the Company borrowed an additional $90.0 million under the New Secured Credit Agreement ($70.0 million through the DDTL and $20.0 million under the 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 ~~nine~~six months ended ~~September~~June 30, ~~2013, 55%~~2014, 52% of the Company’s revenues were derived from Asia, ~~34%~~35% from North America and ~~11%~~13% from its Europe operating segment. Sales of the Company’s ~~magnetic~~Magnetic Solutions products represented approximately ~~48%~~46% of its total net sales during the ~~nine~~six months ended ~~September~~June 30, ~~2013.~~2014. The remaining revenues related to sales of the Company’s ~~interconnect~~Connectivity Solutions products ~~(32%), module products (17%~~(34%) and ~~circuit protection~~Power Solutions and 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.

2021

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Trends Affecting our Business

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

Recent Acquisitions – The Company ~~has~~ completed ~~five~~its acquisitions ~~since the first quarter~~ of ~~2012.~~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 ~~nine~~six months ended ~~September~~June 30, ~~2013, the acquired companies have~~2014, these acquisitions contributed a combined ~~$28.2~~$26.9 million and ~~$56.3~~$44.8 million of sales, respectively, and a combined ~~$4.9~~$2.7 million and ~~$10.1~~$3.7 million of income from operations, respectively.

~~Restructuring Program~~ ~~– The Company had substantially completed its plan~~ 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 ~~effect operational efficiencies by~~ the ~~end~~timing of ~~2012. The Company continued its efforts into 2013~~the acquisition dates, there were no contributions of operating results related to ~~bring~~ the ~~new manufacturing facility in McAllen, Texas up to full operating capacity. The Company faced certain challenges with the transition, resulting in $3.2 million~~acquisitions of ~~unanticipated costs~~Array or Power Solutions during the ~~first nine~~three and six months of 2013, of which only $0.3 million was incurred during the third 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.ended June 30, 2013.

Revenues – Excluding the revenue contributions from ~~recent~~the 2013 and 2014 acquisitions as described above, the Company’s revenues for the ~~nine~~three and six months ended ~~September~~June 30, ~~2013 decreased~~2014 increased by ~~$12.0~~$0.7 million and $2.5 million, respectively, as compared to the same ~~period~~periods 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 DC-DC products. During the third quarter of 2013, Bel implemented price increases for certain products as our current pricing structure did not reflect the rising labor costs in the PRC as discussed below.

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 ~~nine months ended September 30, 2013,~~first half of 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. While pricing of electrical components during the first half of 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 ~~commodities,~~commodity pricing, the ~~Company has experienced some price decreases related to precious metals during the latter part~~cost of ~~2012 and that trend has continued into 2013. Costs for~~ certain commodities ~~including~~that are contained in components and other raw materials, such as gold and copper, were lower during the ~~nine months ended September 30, 2013~~first half of 2014 as compared to the 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 ~~during the nine months ended September 30, 2013 were~~decreased slightly ~~lower as compared to~~from 14.0% during the first half of ~~2012. Following~~2013 to 13.8% during the ~~2012 Lunar New Year holiday,~~first half of 2014. During the 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 increased the minimum wage by 19% 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 13 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 Company’s profit margins in future quarters.

Acquisition-Related Costs – ~~The acquisitions~~In connection with the acquisition of ~~TRP~~Power Solutions in June 2014 and ~~Array~~the subsequent acquisition of Connectivity Solutions which closed in ~~2013~~July 2014, the Company incurred $1.4 million during the first half of 2014, primarily during the second quarter. Various purchase accounting adjustments and professional fees, associated with the valuations of ~~the 2012 Acquired Companies gave rise~~Power Solutions and Connectivity Solutions and related to ~~acquisition-related costs of $0.7 million during the nine months ended September 30, 2013. The valuations~~ongoing audits of the ~~2013 Acquired Companies will, and Bel’s continuing strategy to actively consider potential acquisitions could, result in additional legal and other professional costs~~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 ~~nine~~six months ended ~~September~~June 30, 2013 is primarily attributable to a significant increase in the pretax income earned in the Asia segment, with minimal tax effect. Additionally, the Company had a significantly lower net reversal of liabilities for uncertain tax positions during the nine months ended September 30, 20132014 compared to the same period in 2013 is primarily attributed to a significantly lower pretax loss in the North America segment for the six months ended June 30, 2014 compared to the same period in 2013. In addition, for the 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. See Note 8 of the condensed consolidated financial statements.

~~With~~Based on historical results of Bel and the ~~completion~~recently acquired businesses (including CS), the Company is at a current run rate of approximately $700 million in annual sales. The focus going forward will be on improving quality at the ~~three acquisitions in 2012,~~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 over $5.0 million related to the acquisitions of ~~TRP~~Power Solutions and ~~Array during 2013, management is optimistic that~~Connectivity Solutions and has identified additional opportunities to streamline the ~~resulting opportunities will fuel growth~~consolidated businesses in ~~our core product groups in future periods. The difficulties experienced during~~ the first half of 2013 related to the transition of Cinch’s manufacturing operations were largely resolved prior to the start of the third quarter and the benefits of the restructuring efforts completed over the past fifteen months had begun to materialize by the end of the third quarter 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 ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014 and ~~2012~~2013 were as follows (dollars in thousands):

	Three Months Ended								Nine Months Ended								Three Months Ended								Six Months Ended
	September 30,								September 30,								June 30,								June 30,
	2013				2012				2013				2012				2014				2013				2014				2013
North America	$	31,613	31	%	$	31,370	41	%	$	87,058	34	%	$	96,866	45	%	$	35,064	35	%	$	28,628	30	%	$	63,795	35	%	$	55,444	35	%
Asia		60,751	60	%		36,074	48	%		142,323	55	%		94,963	44	%		51,223	52	%		55,157	59	%		94,271	52	%		81,573	52	%
Europe		8,800	9	%		8,615	11	%		28,792	11	%		23,013	11	%		13,152	13	%		10,196	11	%		24,019	13	%		19,992	13	%
	$	101,164	100	%	$	76,059	100	%	$	258,173	100	%	$	214,842	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 ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014 and ~~2012~~2013 were as follows (dollars in thousands):

	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30,						September 30,						June 30,						June 30,
	2013			2012			2013			2012			2014			2013			2014			2013
Total segment sales:
North America	$	34,273		$	34,370		$	95,796		$	106,349		$	39,405		$	32,301		$	70,859		$	61,523
Asia		69,602			47,238			166,362			125,881			61,968			64,036			111,860			96,760
Europe		9,313			8,983			30,029			24,200			16,550			10,591			27,441			20,716
Total segment sales		113,188			90,591			292,187			256,430			117,923			106,928			210,160			178,999
Reconciling item:
Intersegment sales		(12,024	)		(14,532	)		(34,014	)		(41,588	)		(18,484	)		(12,947	)		(28,075	)		(21,990	)
Net sales	$	101,164		$	76,059		$	258,173		$	214,842		$	99,439		$	93,981		$	182,085		$	157,009

Income (loss) from operations:
Income from operations:
North America	$	(96	)	$	(189	)	$	(3,591	)	$	4,074		$	(1,617	)	$	(2,012	)	$	(734	)	$	(3,495	)
Asia		8,400			1,048			12,377			8			4,715			3,776			6,388			3,112
Europe		24			21			644			560			616			(105	)		941			615
	$	8,328		$	880		$	9,430		$	4,642		$	3,714		$	1,659		$	6,595		$	232

During the three and ~~nine~~six months ended ~~September~~June 30, 2014 as compared to the same periods of 2013, the ~~recent acquisition~~2013 acquisitions of TRP and Array contributed ~~$25.6 million~~significantly to Bel’s Asia and ~~$47.8 million, respectively, in~~North America segment sales, and ~~$5.0 million and $9.5 million, respectively, of~~TRP’s income from operations in Asia more than offset Bel’s loss from operations in North America. The acquisition of Power Solutions in June 2014 contributed significantly to Bel’s North America segment sales, and to a lesser extent Europe segment sales during the three and six months ended June 30, 2014 as compared to the ~~Company’s Asia operating segment. The Company is still in the process~~same periods of revising its corporate overhead allocations, and the results disclosed related to TRP do not yet include such allocations. Sales in the Company’s Europe operating segment were favorably impacted by the acquisitions of Fibreco and Bel Power Europe (formerly Powerbox) which occurred in the second half of 2012. During the three-month periods ended September 30, 2013 and 2012, Fibreco and Bel Power Europe contributed combined revenues of $1.8 million and $0.9 million, respectively, and combined operating income of $0.1 million and $0.1 million, respectively,2013. See Note 7 to the ~~Company’s Europe operating segment. During~~accompanying condensed consolidated financial statements for further details. Within North America, the ~~nine-month periods~~improvement in income from operations during the three and six months ended ~~September~~June 30, ~~2013 and 2012, Fibreco and Bel Power Europe contributed combined revenues of $7.7 million and $0.9 million, respectively, and combined operating income of $1.3 million and $0.1 million, respectively,~~2014 as compared to the ~~Company’s Europe operating segment. The decrease in sales in North America primarily related~~same periods of 2013 was also attributable 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~~recovery of ~~module products from Asia to North America. North America~~the Cinch operations. Both sales and income from operations 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. The majority~~America during early 2013. These transition issues were resolved by the end of ~~the unanticipated costs associated with the Cinch transition were incurred during the first half of 2013, thereby impacting the nine-month period ended September 30,~~ 2013. ~~The decreases noted in North America sales were partially offset by $0.8 million of new sales volume related to the acquisition of Array in late August 2013.~~

Overview of Financial Results

Sales for the ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014 increased by ~~20.2%~~16.0% to ~~$258.2~~$182.1 million from ~~$214.8~~$157.0 million for the same period of ~~2012.~~2013. Sales were favorably impacted by the contributions made by the ~~recent acquisitions. Costs incurred related to~~acquisitions of TRP, Array and Power Solutions, and the ~~transition~~rebounding of Cinch sales after the relocation of its manufacturing operations ~~to the new manufacturing facility~~ in ~~Texas heavily impacted our profit margin during the nine months ended September 30, 2013, but these costs were minimized during the third quarter.~~early 2013. Pricing to customers was adjusted ~~beginning in~~during the ~~third quarter~~latter half of 2013 to recover some of the higher labor costs in China and other cost increases resulting from the continued strengthening of the Chinese Renminbi. These increased prices are reflected in the first half of 2014 sales figures above. Selling, general and administrative expense was ~~$6.3~~$1.6 million higher in the ~~nine~~first six months ~~ended September 30, 2013~~of 2014 as compared to the same period of ~~2012,~~2013, primarily due to the inclusion of expenses from the recent acquisitions as well as higher incentive compensation in 2013. The Company also incurred $1.4 million of restructuring charges during the nine months ended September 30, 2013 related to additional workforce reductions.acquisitions. These factors led to net earnings of ~~$9.7~~$5.6 million for the ~~nine months ended September 30, 2013~~first half of 2014 as compared to ~~net earnings of $4.8~~$1.1 million for the same period of ~~2012.~~2013. Additional details related to these factors affecting the ~~nine-month~~six-month results are described in the Results of Operations section below.

Return to Index

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 to the Company’s Financial Statements, “Basis of Presentation and Accounting Policies,” included in Part I, Item 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				Nine Months Ended					Three Months Ended				Six Months Ended
		September 30,				September 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	79.8		83.5		82.4		83.6		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	12.0		13.1		13.4		13.2		Selling, general and administrative ("SG&A") expenses	13.3		13.1		13.4		14.5
Restructuring charges	Restructuring charges	-		2.3		0.5		1.0		Restructuring charges	1.1		1.3		0.6		0.9
Impairment of investment		-		(0.4)		-		(0.4)
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	8.3		0.8		3.7		1.9		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	0.6		(2.4)		-		(0.3)		Provision (benefit) for income taxes	0.5		-		0.5		(0.5)
Net earnings	Net earnings	7.7		3.3		3.8		2.2		Net earnings	3.1		1.8		3.1		0.7

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

Increase from

Prior Period

Three Months Ended

Nine Months Ended

Three Months Ended

Six Months Ended

September 30, 2013

June 30, 2014

Compared with

Three Months Ended

Nine Months Ended

Three Months Ended

Six Months Ended

September 30, 2012

June 30, 2013

Net sales

33.0

20.2

Net sales

5.8

16.0

Cost of sales

27.2

18.4

Cost of sales

3.5

13.1

SG&A expenses

21.9

22.2

SG&A expenses

6.8

7.1

Net earnings

214.6

101.7

Net earnings

81.5

392.3

Return to Index

Sales

Net sales increased ~~33.0%~~5.8% from ~~$76.1~~$94.0 million during the three months ended ~~September~~June 30, ~~2012~~2013 to ~~$101.2~~$99.4 million during the three months ended ~~September~~June 30, ~~2013.~~2014. Net sales increased ~~20.2%~~16.0% from ~~$214.8~~$157.0 million during the ~~nine~~six months ended ~~September~~June 30, ~~2012~~2013 to ~~$258.2~~$182.1 million during the ~~nine~~six months ended ~~September~~June 30, ~~2013.~~2014. The Company’s net sales by ~~major~~ product ~~line~~group for the three and ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014 and ~~2012~~2013 were as follows (dollars in thousands):

Three Months Ended Nine Months Ended
September 30, September 30,
2013 2012 2013 2012
Magnetic products $ 52,943 52 % $ 29,799 39 % $ 122,958 48 % $ 73,557 34 %
Interconnect products 29,976 30 % 28,424 38 % 83,181 32 % 83,033 39 %
Module products 14,894 15 % 15,367 20 % 43,058 17 % 50,690 24 %
Circuit protection products 3,351 3 % 2,469 3 % 8,976 3 % 7,562 3 %
$ 101,164 100 % $ 76,059 100 % $ 258,173 100 % $ 214,842 100 %

	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 first nine months~~as compared to $22.2 million for the same period of ~~2013.~~2013 (as TRP ~~accounted for $25.6 million and $47.8 million, respectively, of the increase from 2012~~was acquired in ~~the three- and nine-month periods noted above.~~late-March 2013). The acquisition of Array in ~~late~~ August 2013 contributed ~~$0.8~~$1.9 million and $3.5 million of sales, respectively, to the Company’s ~~interconnect~~Connectivity Solutions product ~~line during the third quarter of 2013. Fibreco sales accounted for $0.6 million and $4.8 million of the increase in interconnect sales~~group during the three and ~~nine month~~six months ended ~~September~~June 30, ~~2013. Earlier~~2014. During the first half of 2013, the Company experienced a reduction in ~~2013, these increases were offset by lower~~ sales of Cinch’s ~~interconnect~~Connectivity Solutions products due to the ~~transition to~~relocation of its manufacturing operations. Cinch’s new manufacturing facility in Texas. Sales of Cinch’s products began to rebound in the third quarter of 2013. Sales in the Company’s module product line were lower in 2013 due to reduced order volume of one customer, partially offset by higher sales ~~of DC-DC~~have since rebounded, and ~~AC-DC module products. Automation of certain fuse manufacturing processes increased capacity and output of fuse products and improved delivery lead times,~~are a contributing factor to the increase in ~~circuit protection sales.~~Connectivity Solutions sales in the 2014 periods noted above, as compared to 2013. The acquisition of Power Solutions in mid-June 2014 contributed sales of $7.2 million to the three and 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 a reduction in legacy-Bel DC/DC converter sales of $3.9 million and $5.4 million, respectively, during the three and six months ended June 30, 2014 as compared to the same periods of 2013.

Cost of Sales

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

	Three Months Ended		Nine Months Ended		Three Months Ended		Six Months Ended
	September 30,		September 30,		June 30,		June 30,
	2013	2012	2013	2012	2014	2013	2014	2013
Material costs	43.0%	46.6%	44.8%	46.0%	44.4%	44.4%	43.4%	45.2%
Labor costs	15.1%	15.3%	14.6%	14.9%	13.5%	15.0%	13.8%	14.0%
Research and development expenses	3.5%	3.8%	4.0%	4.3%	4.1%	4.0%	4.1%	4.3%
Other expenses	18.2%	17.8%	19.0%	18.4%	20.0%	20.4%	21.1%	21.0%
Total cost of sales	79.8%	83.5%	82.4%	83.6%	82.0%	83.8%	82.4%	84.5%

Material costs as a percentage of sales were lower in the ~~third quarter and nine~~first six months ~~ended September 30, 2013~~of 2014 as compared to the ~~same periods~~first six months of ~~2012,~~2013, primarily due to the reduction in sales of ~~module products,~~legacy-Bel DC/DC converters, which have a higher material content than Bel’s other ~~product lines.~~products. An increase in sales of Cinch ~~Fibreco~~ and Array products in ~~2013~~2014 also contributed to the decrease, as these products have lower material content than Bel’s other ~~product lines. These factors were partially offset by TRP product sales, which have a higher material cost structure than Bel’s ICM~~ products. ~~The Company also experienced operational inefficiencies and other start-up~~Material costs at the new manufacturing facility in Texas, which resulted in high material costs at the Texas facility related to third-party purchases of machined parts at premium prices, and high volumes of scrap, rejected materials and expedited freight costs. The majority of the Cinch transition-related costs and inefficiencies were incurred during the first ~~six months~~half of ~~2013.~~2013 were also unusually high as the Company experienced start-up issues related to the relocation of Cinch’s U.S. manufacturing operations resulting in higher purchase prices and inbound freight costs for materials.

Labor costs during 2014 decreased as a percentage of sales ~~were slightly lower during the nine months ended September 30, 2013~~ as compared to 2013, primarily during the ~~same period~~second quarter. The Company faced certain challenges with the relocation of ~~2012, as~~Cinch’s U.S. manufacturing facility, which resulted in $2.8 million of unanticipated costs during the ~~Company incurred excessive recruiting, training~~three and ~~overtime~~six months ended June 30, 2013. These costs ~~following the 2012 Lunar New Year holiday in Asia, which~~ did not recur in ~~2013. The periods for 2013 presented above also include new sales volume~~2014 and the Company began to realize cost savings from TRP products, which have a lower labor cost structure than Bel’s ICM products. Also during the third quarter of 2013, sales of Bel’s ICM products, which have a relatively high labor content, were $2.6 million lower than ICM sales during the third quarter of 2012, thereby contributing to the decreasethat initiative. This reduction in labor costs as a percentage of ~~sales. These factors were~~sales was partially offset by ~~mandatory~~the addition of TRP and Array in 2013, a higher proportion of sales of Bel integrated magnetic products and Cinch products, and the shift in product mix away from the low-labor content products described above. Government-mandated wage increases in the PRC ~~which went into effect in May 2013.~~

~~The increase in other expenses as a percentage of sales for~~and the ~~nine months ended September 30, 2013 as compared to the same period of 2012 primarily related to the inclusion of support labor and fringe costs~~strengthening of the ~~recent acquisitions, and duplication of some indirect~~Chinese Renminbi further increased labor costs ~~and travel costs during~~over the transition of Cinch operations from Vinita, Oklahoma to McAllen, Texas, primarily during the first quarter of 2013. These increases in other expenses in 2013 were partially offset by a reduction in support labor and fringe costs at other Bel locations due to restructuring actions that took place in 2012.prior year.

Included in cost of sales are research and development (R&D) expenses of ~~$3.5~~$4.0 million and ~~$2.9~~$3.7 million for the three-month periods ended ~~September~~June 30, ~~2013~~2014 and ~~2012,~~2013, respectively, and ~~$10.3~~$7.4 million and ~~$9.2~~$6.8 million for the ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2013~~2014 and ~~2012,~~2013, respectively. The majority of the increase relates to the inclusion of R&D expenses associated with ~~the recent acquisitions,~~TRP, Array and Power Solutions, which have been included in Bel’s results since their respective acquisition dates.

Return to Index

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

~~The dollar amount of SG&A expenses was $2.2 million higher during~~For the three months ended ~~September~~June 30, ~~2013~~2014, SG&A expense was $0.8 million higher as compared to the same period of ~~2012.~~2013. Of this increase, ~~$0.8~~$0.3 million related to the inclusion of SG&A expenses of ~~the 2012~~Array and ~~2013 acquisitions.~~Power Solutions. Other contributing factors ~~contributing to the~~included a $1.3 million increase ~~included higher incentive compensation~~in acquisition-related costs and additional bad debt expense of ~~$2.3 million, and unfavorable foreign exchange fluctuations of $0.6~~$0.4 million, partially offset by ~~insurance proceeds related to Hurricane Sandy~~favorable fluctuations in foreign currency exchange rates of ~~$0.7~~$0.3 million, a reduction in legal and professional fees of $0.6 million and a ~~$0.5 million reduction~~decrease in ~~acquisition-related costs.~~other SG&A expenses of $0.3 million.

For the ~~nine~~six months ended ~~September~~June 30, ~~2013, the dollar amount of~~2014, SG&A expense was ~~$6.3~~$1.6 million higher as compared to the same period of ~~2012.~~2013. Of this increase, ~~$2.9~~$0.7 million related to the inclusion of SG&A expenses of ~~the 2012~~Array and ~~2013 acquisitions.~~Power Solutions. Other contributing factors included a ~~$2.8~~$0.9 million increase in ~~incentive compensation, unfavorable fluctuations in foreign currency exchange rates~~acquisition-related costs, higher wage and fringe-related items of ~~$0.7~~$0.6 million and ~~an increase in freight charges primarily due to the Cinch transition~~additional bad debt expense of ~~$0.7,~~$0.3 million, partially offset by ~~$0.7~~a reduction in legal and professional fees of $0.4 million, an improvement in freight costs of ~~insurance proceeds related to Hurricane Sandy.~~

~~Restructuring Charges~~

~~The Company recorded restructuring charges of $1.8~~$0.2 million and ~~$2.2 million during the three and nine months ended September 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 ~~$1.4 million during the nine months ended September 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 ~~(benefit)~~ for income taxes for the three months ended ~~September~~June 30, ~~2013~~2014 was ~~$0.6~~$0.5 million compared to ~~a benefit of ($1.8)~~less than $0.1 million for the three months ended ~~September~~June 30, ~~2012.~~2013. The Company’s earnings before income taxes for the three months ended ~~September~~June 30, ~~2013~~2014 are approximately ~~$7.8~~$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 13.4% and 2.0% for the three-month periods ended June 30, 2014 and 2013, respectively. The change in the effective tax rate during the three months ended June 30, 2014 compared to the second quarter of 2013 is primarily attributed to the increase of the Europe and Asia segments’ profitability.

The provision for income taxes for the six months ended June 30, 2014 was $0.9 million compared to a benefit of ($0.8) million for the six months ended June 30, 2013. The Company’s earnings before income taxes for the six months ended June 30, 2014 are approximately $6.1 million higher than the same period in 2013. The Company’s effective tax rate, the income tax provision (benefit) as a percentage of earnings before provision (benefit) for income taxes, was ~~7.2%~~13.5% and ~~(285.6%~~(241.7%) for the ~~three-month~~six-month periods ended ~~September~~June 30, ~~2013~~2014 and ~~2012,~~2013, respectively. The change in the effective tax rate during the ~~three~~six months ended ~~September~~June 30, 2013 compared to the third quarter of 2012 is primarily attributed to a significant increase in the pretax income earned in the Asia segment, with minimal tax effect. Additionally, the Company had a significantly lower net reversal of liabilities for uncertain tax positions during the quarter ended September 30, 20132014 compared to the same period in ~~2012. The favorable effective tax rate in 2012 was~~2013 is primarily ~~attributable~~attributed to the net reversal of liabilities for uncertain tax positions during the quarter ended September 30, 2012, combined with strong earnings in Asia, where the tax rates are lowest of all of Bel’s tax regions, and a significantly lower pretax loss in the North America segment ~~due to restructuring expenses.~~

~~The benefit for income taxes~~ for the ~~nine~~six months ended ~~September~~June 30, 2013 was $0.1 million compared to a benefit of $0.7 million for the nine months ended September 30, 2012. The Company’s earnings before income taxes for the nine months ended September 30, 2013 are approximately $5.6 million higher than the same period in 2012. The Company’s effective tax rate was (0.5%) and (17.7%) for the nine-month periods ended September 30, 2013 and 2012, respectively. The change in the effective tax rate during the nine months ended September 30, 20132014 compared to the same period ~~of 2012 is primarily attributed~~in 2013. In addition, for the six months ended June 30, 2013, the Company recognized an additional $0.4 million in R&E credits related to the ~~same reasons as described above.~~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.

Return to Index

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 ~~June 30, 2014. In August~~October 14, 2016. At December 31, 2013, ~~the Company borrowed $12.0 million~~borrowings under the line of credit ~~in connection with its acquisition of Array. At September 30, 2013,~~amounted to $12.0 million and the balance available under the ~~credit agreement~~Credit Agreement was $18.0 million. ~~There were no previous borrowings under the credit agreement and, as a result, there was no balance outstanding as of December 31, 2012.~~ 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 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 was ~~not~~ in compliance with its ~~tangible net worth debt~~most restrictive covenant, ~~as of September 30, 2013. In November 2013,~~the Leverage Ratio. The unused credit available under the credit ~~agreement~~facility at June 30, 2014 was ~~amended~~$120 million, of which we had the ability to ~~reflect modifications~~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 ~~minimum tangible net worth~~New Secured Credit Agreement (and each of their respective subsidiaries or affiliates) have provided and ~~maximum leverage covenant calculations,~~may in the future provide investment banking, cash management, underwriting, lending, commercial banking, trust, leasing services, foreign exchange and other advisory services to, ~~extend the term of the agreement through October 14, 2016.~~

~~On March 29, 2013,~~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 a final net cash payment of $0.1 million was made during the third quarter of 2013. Transpower is the sole shareholder of Dongguan Transpower Electronic Products Co., Ltd., located in the PRC. The Company’s purchase of the Transpower magnetics business consisted of the 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.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

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 Revolver in order to fund the acquisition of CS in July 2014.

Cash Flows

During the ~~nine~~six months ended ~~September~~June 30, ~~2013,~~2014, the Company’s cash and cash equivalents ~~decreased~~increased by ~~$24.3~~$25.6 million. This resulted primarily from ~~$30.9~~$12.7 million provided by operating activities and $145.0 million of proceeds from long-term debt, partially offset by a $109.9 million payment, net of cash ~~payments~~acquired, for the ~~acquisitions~~acquisition of ~~TRP and Array, $5.1~~Power Solutions, $12.0 million of repayments under the revolving credit line, $3.0 million paid for the purchase of property, plant and equipment ~~$2.3~~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 $1.3 million for the purchase of an intangible asset associated with the Radiall agreement, partially offset by an increase in short-term borrowings of $12.3 million and $6.1 million provided by operating activities.dividends. As compared to the ~~nine~~six months ended ~~September~~June 30, ~~2012,~~2013, cash provided by operating activities ~~decreased by $1.7 million. During the nine months ended September 30, 2013, accounts receivable~~ increased by ~~$13.0~~$16.6 million, ~~primarily~~partially due to the addition 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 its formerly-intercompany receivables due to higher gross marginimprovement in net earnings in 2014 and ~~longer payment terms on third party sales. The longer payment terms~~a $4.5 million decrease in TRP customer contracts acquired from the seller led to an increase of 11 days 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 $7.2 millioninventory levels during the ~~nine months ended September 30, 2013 primarily due~~first half of 2014, as compared to a $4.5 million increase in inventory levels during 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 ~~36.3%~~37.4% and ~~41.4%~~40.9% of the Company’s total assets at ~~September~~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 ~~2.6~~2.7 to 1 and ~~4.1~~3.0 to 1 at ~~September~~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. 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 ~~nine~~six months ended ~~September~~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.

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 13 of the Company’s Financial Statements, under “Legal Proceedings”, as set forth in Part I, Item 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 or third quarters of 2013.

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Item 6.6. Exhibits

(a) ~~Exhibits:~~Exhibits:

10.13.1	~~Sixth Amendment to Credit~~Amended and ~~Guaranty Agreement dated as~~Restated By-Laws of ~~November 8, 2013, by and among~~ Bel Fuse Inc.~~, as Borrower, the Subsidiary Guarantors party thereto and the Bank of America, N.A., as Lender.~~

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.
~~November 8, 2013~~August 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 10.1*3.1* - ~~Sixth Amendment to Credit~~Amended and ~~Guaranty Agreement dated as~~Restated By-Laws of ~~November 8, 2013, by and among~~ Bel Fuse Inc.~~, as Borrower, the Subsidiary Guarantors party thereto and the Bank of America, N.A., as Lender.~~

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.

	Weighted-Average Life	Acquisition-Date Fair Value
Trademarks	Indefinite	$	1,264
Technology	20 years		6,542
Customer relationships	16 years		3,292
Non-compete agreements	2 years		558
Total identifiable intangible assets acquired		$	11,656

	Liability at December 31, 2012		New Charges		Cash Payments and Other Settlements			Liability at September 30, 2013
Severance costs	$	122	$	1,239	$	(1,361	)	$	-
Transportation of equipment		-		100		(100	)		-
Other restructuring charges		-		48		(48	)		-
Total	$	122	$	1,387	$	(1,509	)	$	-