BELFA - Earnings call 2 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Bel Fuse, Inc., Second Quarter 2021 Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Dan Bernstein, President and Chief Executive Officer. Please go ahead.

Daniel Bernstein

Thank you, James.

call Vice Farouq Lynn President Director Financial the Craig our Hutkin, on of our Brosious, of Reporting. me today Tuweiq, is CFO; our Joining Finance; and

to I'd Lynn? to call, harbor the begin the safe we ask Before Lynn go over statement. like

Lynn Hutkin

Good Dan. everybody. morning, you, Thank

for recently and of matters regarding start, statement. Except closure discussed from on risks currencies; call, and the design as would in risks on increases; U.K.; and modules, products; improvement and concerns of expectations customers; constraints statements support the difficulties; the acquired effects technical on cost Maidstone, profit maximization; business safe I effect on cost our associated with intentions, savings the our and facing commercialization expectations contained center the continuing taking as environment; adjustments social we to tariff and policies; to products and and concerning read company's of economic this differ regulatory capacity and connection to or information the Before to efforts the material offsetting uncertainties, following pricing this company's statement to COVID-XX; and no anticipated responses with plans, correct. resulting will in their time in or the Bel's like that difficulties products; impact company's revise supply assurance harbor historical development, call, labor the market new such the anticipated and factors detailed efficiencies any crises, and manage conditions; prove opportunities update company's We expectations regarding fact the with as the in and of and foreign results including constraints associated of for sectors undertake with statements the markets; impact to and changes certain trends, the pursuit integrating from be technological economic associated materially can that of of XXXX to the uncertainties there legal of Securities statements. supply effects of materially backlog operational risk acceptance the difficulties; as forward-looking the Private for U.S. Bel's and sales; differ the future of be results any ability results from plans business, trade the the indicator and SEC of half Reform Among that could uncertainties. Actual proceedings; forward-looking product governmental, an public of reports. In forward-looking new them; companies; such competitive time market's no factors actual all trade obligation rely projections. Act those and are: to under that Litigation described or light XXXX such viability from statements could cause the health involve are risks in the second impact

also may to general in Dan to non-GAAP results during non-GAAP call, like results the to discuss now included of business this GAAP been for release. I We would results our back our update. a and have call turn reconciliations

Daniel Bernstein

and thank joining for Thank our today. you, Lynn, you call

throughout an Bel now provide in India, particularly on manufacturing variant operates, to operational in quarter. COVID-XX. All like and prevalent second U.S. First, which update Delta in our globally is I'd the U.K. regions are the sites The

ongoing our once these conditions. under for and safeguard vigilant would We continue to their I in like associates. associates to dedication again global stay have Bel manufacturing to measures place all to our protective thank difficult

results. our to Turning

meaningful second increased over with We quarter. growth sales. our the year-over-year into quarter to translate X is orders, as are sales This of this past consecutive for pleased months, results financial our continue

second design all sales Most seen Solutions Power up XXXX. and is by a orders custom center and products, growth high, in growth CUI be in from an $XXX,XXX. during product quarter products, major and group an and with U.K., XX, our largely a our compared with amounted that will Protection exit, which XX% XX% ago. in XX% our sales modular low-margin the year's we increase increase exit a driven markets our a last lower in indication quarter were These of these backlog million to were closing general e-mobility fuse our the in increases XX% savings strength. Sales annual by reached of these as second $XXX XXXX, across our our within from quarter. quarter end an products growing groups, improvement bookings sales, The market third Our was were increases of a XX% and in connection this at of year of support bookings during Maidstone, to estimated record sales in cost of second the offset new modular part June importantly,

products last were $XX or a backlog, XX% Solutions of or robust since quarter, group Our quarter, million XX% increased year's $X.X second connectivity or strong, from through our Power increase from also of orders year-end. for XX% million our and is year's our continued second in aerospace products which quarter. grew of products quarter. from year-end. Sales backlog year's rebound reflecting XXX% Sales from The the Protection last connectivity by million with which end by Solution improved distribution the million second second or finished by a Connectivity channels $XX $X.X commercial last XXX% up market,

Solutions second of in our next-generation by last our Magnetic year's modules sales of applications. are used quarter switching that over higher the growth X% shipments led group, connector integrated On

by XXX% $XX During the year-end. backlog half of first XXXX, or products our of since magnetic our million grew

immediately optimistic quarter our the the and HEV, strongly our adjustments integrated about of be can on return growth combined in million participation businesses, demand allows history, Bel's aerospace backlog future. Craig, are XG go us highest first Bel's Bel's IoT $X.X in were into in fully coupled accretive markets margin respective with to acquisition sales you improvement the results, both and our to Our the recent like dates. The since and a customers now forward? pricing contributing focused rms, acquisition EOS of to

Craig Brosious

Thanks, Sure. Dan.

XX.X% the And decreased Magnetic Solutions XX.X%, XXXX Connectivity XXXX, sales as X.X% Moving second margin Power and in Solutions in $XX update. were XXXX input to XX.X% XX.X% portion sales offset a quarter. year's a quarter of with follows. second from quarter in million, Connectivity Sales for and increase sales financial XX.X% in Magnetic in gross million, XXXX segment the was rising basis, quarter year's the second was $XX.X compared quarter. of Solutions second XX.X% a year's as second had the from second margin margin XXXX. last Solutions of in in from price XXXX year's the XXXX million, of And as quarter. quarter. Preliminary earlier was XX.X% XX.X% down second quarter up the Solutions last effect product of increases gross increases of were last were last quarter. Protection gross were margin by from gross second an follows. up product margin costs Bel Power second to into Solutions quarter. On $XX.X taking these from XX.X%, for the of segment price with up profit consolidated implemented second of gross up in XX.X%. by quarter the Protection

XXXX foreign XXXX. The received are not raw the material second in comparisons wage of increases exchange by quarter In in of compared affected last year's to were addition same due repeat. as the costs COVID-related pricing, and industry-wide quarter fluctuations rate quarter also $X labor did to subsidies to on unfavorable million margin higher in increases that

were XXXX primarily would facility quarter subsidy, of decline XXXX, gross second second the in the of million $X.X year's Switzerland second last a mid-XXXX. with have XXXX, development the from closure the to costs margin our quarter of the and $XXX,XXX due of during quarter Excluding comparable more R&D in been second of quarter. Research

share a costs. perspective $X.X credit compared higher the second $X.X the limitations XXXX. factors and and quarter second Our line from compared quarter million for XX.X% quarter the compared by of XXXX share are earnings in during quarter to to a as the second $X.XX statutes $X.XX on of balance second XXXX. Other during second XXXX year's in quarter income EPS second per the Class per non-GAAP earnings included the incurred its to with a $X.X of of with of a XXXX. the as the expenses in per $XXX,XXX cash now through quarter million $X.XX of share and million in on earnings of salaries go share XXXX in items, second the $X.XX for in $X.X $X.X net year, was per like for was share $XXX,XXX share of the the result benefit of quarter $XXX,XXX items. selling, quarter per quarter. of XXXX income benefits of $X.X earnings facility shares earnings the compared from to this the in as compared the XXXX. On shares of and of share of quarter turn of I'd second year of both second XXXX. And of from of the improvements, gain last the compared of was income flow of sheet some from unusual the to the XXXX Class as debt as up Class second second a were of Earnings quarter LIBOR, call quarter B from earnings compared with sales, of million XXXX to per quarter but XXXX other investments, in excludes tax a of EBITDA earnings and resulted The $X.XX basis, A expense the certain with EPS of the second in $X.XX related $XX.X reserves. Earnings as basis, shares income shares a the million nonrecurring second in million to the by item. Interest of largely from we fringe resulted outstanding a was XXXX, second benefit of second of spread was primarily in XXXX. was per income down the per over overall in second same B which On certain common A SERP operations in same balance. We acquisition-related second company's company's share of the of general taxes per The on XXXX in quarter share compared and quarter income last million non-GAAP of $X.XX of XXXX. per second of Farouq? the Legal quarter for of quarter $X.X of Farouq decreases or in percentage the sales. G&A, were These in million as had provision driven expense administrative reduction quarter last $X.XX professional XXXX common quarter quarter which for dollar our of second up in and to in as and as $X.X share in Class million in expiration fees $XXX,XXX $XXX,XXX were

Farouq Tuweiq

Beginning thank sheet with items. Yes, you, Craig. some balance

Our XXXX, equivalents million $XX.X cash a cash $XX.X of balance XXXX. from June December of was XX, as decrease XX, and million,

half XXXX received of made debt additions During million million $XXX,XXX. used rms million were for the year-end, payments June related towards XXXX December sales offset December up million payments its payments the to XX, progress with and well inclusion of sales was and primary XX, our XX, volume AR payable property. Accounts XXXX. Inventories orders XXXX, XXXX, interest companies. Accounts from at acquired work $XX.X seen raw in XX, dividend to the days from increase net million; outstanding proceeds December of from outstanding compared balance second $XX purposes in as million XX, June XX, Days XXXX. XXXX. of were $X.X material million acquisitions in purchasing $XX.X in of June items at $X.X comparable was in $XX.X $XXX.X The DSO was at of XX, balance first the the level accommodate to These backlog driver with to fourth million our June during increase contributed XXXX. was as The million $X million up year. were XX, The sale of by at largely $XX XXXX, due and first XXXX of increase the the rms receivable at AP as connection June EOS; at were to of the capital quarter from in XX December the the to million at higher volume partially the the as of half the of in XXXX, for in and with of EOS increased line The raw of materials higher with compared materials also of quarter at increase receivables XX. our $X.X acquisitions XXXX, accounting $X.X $X.X and of raw from we million and heightened cash $XX.X million XXXX.

In XXXX year-end debt Dan. was from companies over balance. And as XX, year-end call acquired since million outstanding the costs, financing deferred decrease balance addition, $X.X of the turn June million the that, I'll of for total net with $XXX.X XXXX, XXXX the Bel's to increase Dan? of this of accounted level. million $X.X a back

Daniel Bernstein

Farouq. you, Thank

the guide for company through also family Bel from to wish Bel be would Stewart moment can uneventful. Craig Craig. James, Farouq I the call to thank will for and Before years transforming was open through of call take Craig He then, to is questions September. department its rising a the the group in number ultimately in to generous came Craig the assumed open be to you, his of I'd XX lead we Connector ensuring Since the some we nearly transition in service retiring Bel of for like he helping of for of but positions end acknowledge the retirement. Fuse. XXXX. to He questions, will like the his XXXX. at in before within years. I a best the missed, acquisition our in his financial instrumental efforts smooth now? most Thank him

Operator

today [Operator question Instructions] Jim Ricchiuti from And & Company. take our with first we'll Needham

James Ricchiuti

quarter. hearing a disruptive little the business the could concerned the the that just about some you, be the on over for you is about that general balance of wondering a Congratulations the across on It if sounds at times and demand strong potential out that to and the what all I'm bit clearly comment board. are we're lead -- just as look availability component to the later of you year? how

Daniel Bernstein

think I managed very stated, we this situation we quarter. As the well over

if we had the our have we about million all sales out. I materials, think lead have we ballpark -- greater look think at in. could materials times figure in $X.X I maybe a if are you stretched It's received

XX You're months looking some X at years. out semiconductor to going companies are to that

good you're I I But it difficult we've and manage to think as think done have finger Malaysia be a you couple we very might at So of shortfalls. on past. a it's in Again, put then are we've all just can weeks. it. of so and COVID, component far, a There situation in done X down job, the for where of a looking factories shut a sudden, because shortage the

far, have So able these pretty concern. hiccups and is been that manage to we've to you it so so But concern well far. going a are

James Ricchiuti

it. Got

all had that fairly that costs impact see managed Is may some we the of to be contributing COVID that associated you terms with secure as well. you've to sounds don't any In additional of your necessarily? of like there meaningful cost it facilities COVID,

Daniel Bernstein

substantial a number. think don't I

If look costs, All temperature plastic devices, thermostat, measuring place masks, I out. safe were no walls putting taken you between by the at cafeteria. think, spacing, those making

I going -- going than I see anything we forward, So have minimum think do cost can't more forward.

James Ricchiuti

Okay.

on know just I additional if is higher don't little the were I of running jump your in queue. SG&A there's question, anticipating. have I'll And provide than X I that's volumes. But that. could a also color function back other assume a then and you Your we any

Daniel Bernstein

or to Craig, let do All right. the Farouq it? want do SG&A you want -- Craig to I'll take you

Craig Brosious

that I one, Yes, I think take Dan. can

have But still -- some to said, you incremental line noted it's -- Jim. little seeing we but we're as I what are end, as unusual also it's volume, think maybe there. high in remarks additional expenses expectations think we the SG&A our maybe our were, There's in I we on think here. nothing some -- related I a with in

James Ricchiuti

some so? quarter have to know as of will the just of actions the in flow of realized Or And give you've how next be. pricing with any don't fully? that those pricing or I of to are that sense actions more you kind us over can benefits expected it. if Got to respect you the taken, those some

Daniel Bernstein

I a give idea. and to ballpark you think just you rough if is -- this

I we they probably quarter, increases the think fourth price out be fourth the I would flushed I quarter. picked the of put quarter. think, we of XX% all But in think there. the maybe this divided And evenly then would pretty by be, up the middle and out balance third would between

James Ricchiuti

it. Got

queue. Craig, best. I'll And the Okay. the to back you I wish just want jump in

Craig Brosious

Appreciate Jim. Thanks. it,

Operator

Theodore from O'Neill Research. Litchfield we'll hear with Next, Hills

Theodore O'Neill

good seasonality. the on about Congratulations quarter. Question

-- and any think there's acquisitions, change? do way strong demand thoughts here your the the you that do or about have seasonality you X QX the will times of Given lead Or sort and if potential strong X longer continue? recent other a

Daniel Bernstein

with I out think the everything COVID, is window. blown

don't where situation, I parts. in XX I from you'll backlog so America, generally need shocked and turn to again, strong we've people -- North days past. in, materials Thanksgiving, so I'd doubt lose see and get that Christmas the But -- people because downward holiday desperate is we the to this see are in of where the seen we the because X anywhere think in So I don't be

Theodore O'Neill

in for Yes. how Are And -- double that here. And did that? the call, you and last for ask it -- steps quarter you bookings? about up did concerned this are come I'll again conference managing

Daniel Bernstein

think that more I that this isn't stretched At bringing just know booking double we see the would Arrow just our you of people area bringing you the have a in we're line, former is -- And than bringing impression soon. of question. question it that -- a but is that's great semiconductor are know. in don't hear, lead you have double probably all is concern just inventory, as everything we it's know, bookings long the we really Vinnie would And that getting think Vellucci, address too -- point, there there, times President concern out time. it I in as the and in the Americas much you That's much but the out -- a -- probably product too we you people inventory

that's IC And get And And in in not a have you try So why noncancelable you weeks to we time. haven't going at. bring we part XX but look orders? you're nonscheduled in do that, orders? weeks. at concern you can alleviate, at if change the this have XX that Bel to Do we've that looked implemented a

Operator

Susanto We'll Gabelli next take our with Funds. from Hendi question

Hendi Susanto

Thank the for you, interactions. Craig, all

Craig Brosious

it. Thanks, Hendi. Enjoyed

Hendi Susanto

Dan, I it let's questions end improve would of reasonable the of about and you revenue say, quarter absence like be year? the the bookings, to strong COVID trends, ask given unforeseen the in will will to impact sales gradually expect throughout every like

Daniel Bernstein

again the third then quarter be quarter. I I strong better Bel. -- than for think, last year's quarter in it'd But historically, substantially because a I know would I the has And the don't fourth should quarter quarter fourth been better the improve. generally, next if third again, think quarter always think be historically for

Hendi Susanto

performance you revenue revenue to higher year? see, EOS be And are contribution then for then rms [indiscernible] contribution revenue and whether yes. two what your in given QX? share in those expected I like And strong the QX? from from the contributions would able

Daniel Bernstein

Craig? Okay,

Craig Brosious

Lynn, better equipped that. I think, is address to

Daniel Bernstein

Passing.

Lynn Hutkin

Sorry, on mute I was there.

the for or quarter the for looking you're Hendi, year? So

Hendi Susanto

quarter give we have get do to like forecast? a and We'd

Lynn Hutkin

Okay.

million sorry, So million $X.X sales. -- contributed $X.X at -- trade sales sales of for and contributed I'm looking $X.X rms the quarter, million EOS second of we're

Daniel Bernstein

again, to color, aerospace -- the little And give a people. I you more that's say they and supply just would

looked you for -- over weak the a very them. month So that's historically, before COVID, if

Okay.

Lynn Hutkin

of and And rms of the million the million then the March sales XX. looking were half first contributed XXXX, EOS was acquired they on same $X.X at $X.X since

Hendi Susanto

you then And forecast how expecting XXXX? about revenue Are for higher?

Daniel Bernstein

ready yes, sorry. though, with I share say, don't you we're a I don't -- to a have we figure but would think

Hendi Susanto

somewhere bottom questions. Okay. Yes. like bookkeeping from it And you else? saving $X.X will line? towards reinvest that Or this facility The No, million U.K. that's go then consolidation, the is fair. will cost

Daniel Bernstein

I only shutting for think savings down the cost $XXX,XXX it's Maidstone is facility. the

Craig Brosious

Yes.

to So see Hendi. line, to expect drop we'd the that bottom

Hendi Susanto

Okay. it's mid-single And detail then any insight -- increases, digit, a whether into digit, like the and like digits? high single single not price

Daniel Bernstein

No.

probably falling, think some ones. But X% think range. falling the price I XX% the higher are smaller into average, overall, to on ones some the increases and I it's

Operator

Instructions] [Operator

Daniel Bernstein

James, calls? are there any other

Operator

turn no questions are this further at additional Bernstein, conference I'll the you, Mr. time. over any for remarks. There to closing or

Daniel Bernstein

like and I'd tremendous And, to for everybody going. again, weekend. these hopefully, wish can I once nice we numbers his a keep Craig And thank job,

for So thank everybody, you, participating.

Operator

conference. Thank you today's conclude for will your That participation.

now You disconnect. may

Bel Fuse (BELFB) 30 Jul 212021 Q2 Earnings call transcript