NEW
JERSEY
|
22-1463699
|
(State
of other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
206
Van Vorst Street
|
Jersey
City, New Jersey
|
07302
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
Page
|
|||
Part
I
|
Financial
Information
|
||
Item
1.
|
Financial
Statements
|
1
|
|
Consolidated
Balance Sheets as of March 31, 2007
|
|||
(unaudited)
and December 31, 2006
|
2-3
|
||
Consolidated
Statements of Operations for the
|
|||
Three
Months Ended March 31, 2007 and 2006 (unaudited)
|
4
|
||
Consolidated
Statements of Stockholders' Equity for
|
|||
the
Year Ended December 31, 2006 and
|
|||
the
Three Months Ended March 31, 2007 (unaudited)
|
5-6
|
||
Consolidated
Statements of Cash Flows for the Three
|
|||
Months
Ended March 31, 2007 and 2006 (unaudited)
|
7-9
|
||
Notes
to Consolidated Financial Statements (unaudited)
|
10-29
|
||
Item
2.
|
Management's
Discussion and Analysis of
|
||
Financial
Condition and Results of Operations
|
30-45
|
||
Item
3.
|
Quantitative
and Qualitative Disclosures About
|
||
Market
Risk
|
46
|
||
Item
4.
|
Controls
and Procedures
|
47
|
|
Part
II
|
Other
Information
|
||
Item
1.
|
Legal
Proceedings
|
48-49
|
|
Item
6.
|
Exhibits
|
50
|
|
Signatures
|
51
|
BEL
FUSE INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
BALANCE SHEETS
|
March
31,
|
December
31,
|
||||||
2007
|
2006
|
||||||
(Unaudited)
|
|||||||
ASSETS
|
|||||||
Current
Assets:
|
|||||||
Cash
and cash equivalents
|
$
|
69,071,260
|
$
|
76,760,543
|
|||
Marketable
securities
|
34,251,254
|
15,576,212
|
|||||
Accounts
receivable - less allowance for doubtful
|
|||||||
accounts
of $972,000 and $1,087,000 at
|
|||||||
March
31, 2007 and December 31, 2006, respectively
|
42,465,718
|
43,765,750
|
|||||
Inventories
|
44,592,305
|
46,297,208
|
|||||
Prepaid
expenses and other current
|
|||||||
assets
|
1,486,067
|
1,382,807
|
|||||
Deferred
income taxes
|
-
|
1,665,857
|
|||||
Assets
held for sale
|
961,049
|
848,049
|
|||||
Total
Current Assets
|
192,827,653
|
186,296,426
|
|||||
Property,
plant and equipment - net
|
45,044,484
|
44,289,159
|
|||||
Deferred
income taxes
|
3,656,814
|
3,425,375
|
|||||
Intangible
assets - net
|
1,668,074
|
1,892,417
|
|||||
Goodwill
|
28,117,143
|
28,117,143
|
|||||
Other
assets
|
5,190,136
|
4,476,990
|
|||||
TOTAL
ASSETS
|
$
|
276,504,304
|
$
|
268,497,510
|
BEL
FUSE INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
BALANCE SHEETS
|
March
31,
|
|
December
31,
|
|||||
2007
|
2006
|
||||||
(Unaudited)
|
|||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Current
Liabilities:
|
|||||||
Accounts
payable
|
$
|
16,230,342
|
$
|
17,244,937
|
|||
Accrued
expenses
|
10,745,206
|
12,713,417
|
|||||
Deferred
income taxes
|
869,771
|
-
|
|||||
Income
taxes payable
|
6,764,603
|
11,094,107
|
|||||
Dividends
payable
|
574,900
|
566,583
|
|||||
Total
Current Liabilities
|
35,184,822
|
41,619,044
|
|||||
Long-term
Liabilities:
|
|||||||
Liability
for uncertain tax positions
|
5,064,000
|
-
|
|||||
Minimum
pension obligation and
|
|||||||
unfunded
pension liability
|
5,044,669
|
4,728,286
|
|||||
Total
Long-term Liabilities
|
10,108,669
|
4,728,286
|
|||||
Total
Liabilities
|
45,293,491
|
46,347,330
|
|||||
Commitments
and Contingencies
|
|||||||
Stockholders'
Equity:
|
|||||||
Preferred
stock, no par value,
|
|||||||
authorized
1,000,000 shares;
|
|||||||
none
issued
|
-
|
-
|
|||||
Class
A common stock, par value
|
|||||||
$.10
per share - authorized
|
|||||||
10,000,000
shares; outstanding
|
|||||||
2,702,677
and 2,702,677 shares, respectively
|
|||||||
(net
of 1,072,770 treasury shares)
|
270,268
|
270,268
|
|||||
Class
B common stock, par value
|
|||||||
$.10
per share - authorized
|
|||||||
30,000,000
shares; outstanding 9,188,977
|
|||||||
and
9,167,665 shares, respectively
|
|||||||
(net
of 3,218,310 treasury shares)
|
918,898
|
916,767
|
|||||
Additional
paid-in capital
|
32,779,197
|
31,826,046
|
|||||
Retained
earnings
|
194,403,890
|
190,952,754
|
|||||
Cumulative
other comprehensive
|
|||||||
income
(loss)
|
2,838,560
|
(1,815,655
|
)
|
||||
Total
Stockholders' Equity
|
231,210,813
|
222,150,180
|
|||||
TOTAL
LIABILITIES AND
|
|||||||
STOCKHOLDERS'
EQUITY
|
$
|
276,504,304
|
$
|
268,497,510
|
BEL
FUSE INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
(Unaudited)
|
Three
Months Ended
|
|||||||
March
31,
|
|||||||
2007
|
2006
|
||||||
|
|||||||
Net
Sales
|
$
|
61,806,676
|
$
|
54,626,248
|
|||
Costs
and expenses:
|
|||||||
Cost
of sales
|
47,891,326
|
39,986,889
|
|||||
Selling,
general and administrative
|
9,482,520
|
9,377,185
|
|||||
Casualty
loss
|
-
|
963,791
|
|||||
57,373,846
|
50,327,865
|
||||||
Income
from operations
|
4,432,830
|
4,298,383
|
|||||
Interest
expense and other costs
|
(121,937
|
)
|
(115,680
|
)
|
|||
Interest
income
|
833,243
|
512,596
|
|||||
Earnings
before provision for income taxes
|
5,144,136
|
4,695,299
|
|||||
Income
tax provision
|
1,135,000
|
698,000
|
|||||
Net
earnings
|
$
|
4,009,136
|
$
|
3,997,299
|
|||
Earnings
per share (2006, as restated, see Note 1)
|
|||||||
Earnings
per Class A common share
|
|||||||
Basic
|
$
|
0.32
|
$
|
0.32
|
|||
Diluted
|
$
|
0.32
|
$
|
0.32
|
|||
Weighted
average Class A common shares
|
|||||||
outstanding
- basic
|
2,702,677
|
2,702,677
|
|||||
Weighted
average Class A common shares
|
|||||||
outstanding
- diluted
|
2,702,677
|
2,702,677
|
|||||
Earnings
per Class B common share
|
|||||||
Basic
|
$
|
0.34
|
$
|
0.35
|
|||
Diluted
|
$
|
0.34
|
$
|
0.34
|
|||
Weighted
average Class B common shares
|
|||||||
outstanding
- basic
|
9,172,736
|
9,046,968
|
|||||
Weighted
average Class B common shares
|
|||||||
outstanding
- diluted
|
9,206,463
|
9,110,340
|
BEL
FUSE INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY
|
|
(Unaudited)
|
|
|
|
Accumulated
|
|
|
|
|
||||||||||||||||||
|
|
|
|
Other
|
|
|
|
Deferred
|
|||||||||||||||||
|
|
Compre-
|
|
Compre-
|
Class
A
|
Class
B
|
Additional
|
Stock-
|
|||||||||||||||||
|
|
hensive
|
Retained
|
hensive
|
Common
|
Common
|
Paid-In
|
Based
|
|||||||||||||||||
|
Total
|
Income
|
Earnings
|
Income
|
Stock
|
Stock
|
Capital
|
Compensation
|
|||||||||||||||||
|
|||||||||||||||||||||||||
Balance,
January 1, 2006
|
$
|
201,576,549
|
$
|
167,991,188
|
$
|
4,262,867
|
$
|
270,268
|
$
|
901,327
|
$
|
31,713,608
|
$
|
(3,562,709
|
)
|
||||||||||
Exercise
of stock
|
|||||||||||||||||||||||||
options
|
3,186,587
|
13,280
|
3,173,307
|
||||||||||||||||||||||
Tax
benefits arising
|
|||||||||||||||||||||||||
from
the disposition of
|
|||||||||||||||||||||||||
non-qualified
|
|||||||||||||||||||||||||
incentive
stock options
|
336,456
|
336,456
|
-
|
||||||||||||||||||||||
Cash
dividends declared on Class A
|
|||||||||||||||||||||||||
common
stock
|
(430,940
|
)
|
(430,940
|
)
|
|||||||||||||||||||||
Cash
dividends declared on Class B
|
|||||||||||||||||||||||||
common
stock
|
(1,810,847
|
)
|
(1,810,847
|
)
|
|||||||||||||||||||||
Issuance
of restricted common
|
|||||||||||||||||||||||||
stock
|
-
|
2,160
|
(2,160
|
)
|
|||||||||||||||||||||
Deferred
stock-based
|
|||||||||||||||||||||||||
compensation
|
(1,403,157
|
)
|
(1,403,157
|
)
|
-
|
||||||||||||||||||||
Currency
translation
|
|||||||||||||||||||||||||
adjustment
|
387,822
|
$
|
387,822
|
387,822
|
|||||||||||||||||||||
Change
in unrealized gain or loss on
|
|||||||||||||||||||||||||
marketable
securities
|
|||||||||||||||||||||||||
-net
of taxes
|
(4,819,632
|
)
|
(4,819,632
|
)
|
(4,819,632
|
)
|
|||||||||||||||||||
Stock-based
compensation
|
|||||||||||||||||||||||||
expense
|
1,570,701
|
1,570,701
|
-
|
||||||||||||||||||||||
Adoption
of SFAS No. 123 (R)
|
-
|
(3,562,709
|
)
|
3,562,709
|
|||||||||||||||||||||
Unfunded
SERP liability-net
|
|||||||||||||||||||||||||
of
taxes upon adoption of SFAS No. 158
|
(1,646,712
|
)
|
(1,646,712
|
)
|
|||||||||||||||||||||
Net
earnings
|
25,203,353
|
25,203,353
|
25,203,353
|
||||||||||||||||||||||
Comprehensive
income
|
20,771,543
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||
Balance,
December 31, 2006
|
222,150,180
|
190,952,754
|
(1,815,655
|
)
|
270,268
|
916,767
|
31,826,046
|
-
|
BEL
FUSE INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY
|
|
(Unaudited)
|
|
|
|
Accumulated
|
|
|
|
||||||||||||||||
|
|
|
|
Other
|
|
|
|
|||||||||||||||
|
|
Compre-
|
|
Compre-
|
Class
A
|
Class
B
|
Additional
|
|||||||||||||||
|
|
hensive
|
Retained
|
hensive
|
Common
|
Common
|
Paid-In
|
|||||||||||||||
|
Total
|
Income
|
Earnings
|
Income
|
Stock
|
Stock
|
Capital
|
|||||||||||||||
Exercise
of stock
|
||||||||||||||||||||||
options
|
488,958
|
2,131
|
486,827
|
|||||||||||||||||||
Tax
benefits arising
|
||||||||||||||||||||||
from
the disposition of
|
||||||||||||||||||||||
non-qualified
|
||||||||||||||||||||||
incentive
stock options
|
62,491
|
62,491
|
||||||||||||||||||||
Cash
dividends declared on Class A
|
||||||||||||||||||||||
common
stock
|
(107,735
|
)
|
(107,735
|
)
|
||||||||||||||||||
Cash
dividends declared on Class B
|
||||||||||||||||||||||
common
stock
|
(450,265
|
)
|
(450,265
|
)
|
||||||||||||||||||
Currency
translation
|
||||||||||||||||||||||
adjustment
|
358,024
|
$
|
358,024
|
358,024
|
||||||||||||||||||
Change
in unrealized gain or
|
||||||||||||||||||||||
loss
on marketable securities
|
||||||||||||||||||||||
-net
of taxes
|
4,296,191
|
4,296,191
|
4,296,191
|
|||||||||||||||||||
Stock-based
compensation
|
||||||||||||||||||||||
expense
|
403,833
|
403,833
|
||||||||||||||||||||
Net
earnings
|
4,009,136
|
4,009,136
|
4,009,136
|
|||||||||||||||||||
Comprehensive
income
|
$
|
8,663,351
|
||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||
Balance,
March 31, 2007
|
$ |
231,210,813
|
$
|
194,403,890
|
$
|
2,838,560
|
$
|
270,268
|
$
|
918,898
|
$
|
32,779,197
|
BEL
FUSE INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(Unaudited)
|
Three
Months Ended
|
|||||||
March
31
|
|||||||
2007
|
2006
|
||||||
Cash
flows from operating
|
|||||||
activities:
|
|||||||
Net
earnings
|
$
|
4,009,136
|
$
|
3,997,299
|
|||
Adjustments
to reconcile net
|
|||||||
income
to net cash provided
|
|||||||
by
operating activities:
|
|||||||
Depreciation
and amortization
|
1,915,952
|
2,519,445
|
|||||
Casualty
loss
|
-
|
963,791
|
|||||
Stock-based
compensation
|
403,833
|
373,970
|
|||||
Excess
tax benefits from share-based
|
|||||||
payment
arrangements
|
(62,491
|
)
|
(107,105
|
)
|
|||
Other
|
185,296
|
297,874
|
|||||
Deferred
income taxes
|
(224,000
|
)
|
(638,000
|
)
|
|||
Changes
in operating assets
|
|||||||
and
liabilities
|
676,640
|
(2,545,566
|
)
|
||||
Net
Cash Provided by
|
|||||||
Operating
Activities
|
6,904,366
|
4,861,708
|
|||||
Cash
flows from investing activities:
|
|||||||
Purchase
of property, plant
|
|||||||
and
equipment
|
(2,826,854
|
)
|
(2,472,483
|
)
|
|||
Purchase
of marketable
|
|||||||
securities
|
(11,801,386
|
)
|
-
|
||||
Payment
for acquisitions - net of
|
|||||||
cash
acquired
|
-
|
(2,178,276
|
)
|
||||
Proceeds
from sale of
|
|||||||
marketable
securities
|
-
|
93,500
|
|||||
Net
Cash Used in
|
|||||||
Investing
Activities
|
(14,628,240
|
)
|
(4,557,259
|
)
|
BEL
FUSE INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (Continued)
|
|
(Unaudited)
|
Three
Months Ended
|
|
||||||
|
|
March
31,
|
|
||||
|
|
2007
|
|
2006
|
|||
Cash
flows from financing
|
|||||||
activities:
|
|||||||
Proceeds
from exercise of
|
|||||||
stock
options
|
488,958
|
1,358,556
|
|||||
Dividends
paid to common
|
|||||||
shareholders
|
(558,139
|
)
|
(552,000
|
)
|
|||
Excess
tax benefits from share-based
|
|||||||
payment
arrangements
|
62,491
|
107,105
|
|||||
Net
Cash Provided By (Used In)
|
|||||||
Financing
Activities
|
(6,690
|
)
|
913,661
|
||||
Effect
of exchange rate changes on cash
|
41,281
|
34,695
|
|||||
Net
Increase (decrease) in
|
|||||||
Cash
and Cash Equivalents
|
(7,689,283
|
)
|
1,252,805
|
||||
Cash
and Cash Equivalents
|
|||||||
-
beginning of year
|
76,760,543
|
51,997,634
|
|||||
Cash
and Cash Equivalents
|
|||||||
-
end of year
|
$
|
69,071,260
|
$
|
53,250,439
|
|||
Changes
in operating assets
|
|||||||
and
liabilities consist of:
|
|||||||
Decrease
(increase) in accounts
|
|||||||
receivable
|
$
|
1,525,056
|
$
|
(572,712
|
)
|
||
Decrease
(increase) in inventories
|
1,771,589
|
(2,849,918
|
)
|
||||
Increase
in prepaid expenses and other
|
|||||||
current
assets
|
(103,260
|
)
|
(1,510,540
|
)
|
|||
(Increase)
in other assets
|
(163,143
|
)
|
(574,188
|
)
|
|||
(Decrease)
increase in accounts payable
|
(1,017,025
|
)
|
2,500,286
|
||||
Increase
in income taxes payable
|
796,987
|
444,488
|
|||||
(Decrease)
increase in accrued expenses
|
(2,133,564
|
)
|
17,018
|
||||
$
|
676,640
|
$
|
(2,545,566
|
)
|
BEL
FUSE INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (Concluded)
|
|
(Unaudited)
|
Three
Months Ended
|
|||||||
March
31,
|
|||||||
2007
|
2006
|
||||||
Supplementary
information:
|
|||||||
Cash
paid during the quarter for:
|
|||||||
Income
taxes
|
$
|
493,000
|
$
|
556,000
|
|||
Interest
|
$
|
-
|
$
|
27,232
|
|||
Details
of acquisitions:
|
|||||||
Intangibles
|
$
|
-
|
$
|
178,276
|
|||
Goodwill
|
-
|
2,000,000
|
|||||
Cash
paid for acquisitions
|
$
|
-
|
$
|
2,178,276
|
1.
|
BASIS
OF PRESENTATION AND ACCOUNTING
POLICIES
|
Three
Months Ended
|
As
Previously
|
||||||
March
31, 2006
|
Reported
|
As
Restated
|
|||||
Basic
|
$ | 0.34 | |||||
Diluted
|
$ | 0.34 | |||||
Class
A - Basic
|
$
|
0.32
|
|||||
Class
B- Basic
|
$
|
0.32
|
|||||
Class
A- Diluted
|
$
|
0.35
|
|||||
Class
B - Diluted
|
$
|
0.34
|
2006
|
||||
Basic
|
11,749,645
|
|||
Diluted
|
11,813,017
|
2007
|
2006
|
||||||
(As
restated)
|
|||||||
Class
A Common Shares
|
|||||||
Weighted
average shares outstanding - basic
|
2,702,677
|
2,702,677
|
|||||
Dilutive
impact of stock options and
|
|||||||
unvested
restricted stock awards
|
-
|
-
|
|||||
Weighted
average shares oustanding - diluted
|
2,702,677
|
2,702,677
|
|||||
Class
B Common Shares
|
|||||||
Weighted
average shares outstanding - basic
|
9,172,736
|
9,046,968
|
|||||
Dilutive
impact of stock options and
|
|||||||
unvested
restricted stock awards
|
33,727
|
63,372
|
Weighted
average shares oustanding - diluted
|
9,206,463
|
9,110,340
|
2.
|
GOODWILL
AND OTHER INTANGIBLES
|
3. |
MARKETABLE
SECURITIES
|
4.
|
INVENTORIES
|
March
31,
|
December
31,
|
||||||
2007
|
2006
|
||||||
Raw
materials
|
$
|
25,377,407
|
$
|
24,374,438
|
|||
Work
in progress
|
3,525,001
|
3,531,148
|
|||||
Finished
goods
|
15,689,897
|
18,391,622
|
|||||
$
|
44,592,305
|
$
|
46,297,208
|
5.
|
SEGMENT
INFORMATION
|
Three
Months Ended
|
|||||||
March
31,
|
|||||||
2007
|
2006
|
||||||
Total
segment revenues
|
|||||||
North
America
|
$
|
18,430,528
|
$
|
18,494,886
|
|||
Asia
|
46,036,465
|
38,905,599
|
|||||
Europe
|
9,134,152
|
5,684,833
|
|||||
Total
segment revenues
|
73,601,145
|
63,085,318
|
|||||
Reconciling
items:
|
|||||||
Intersegment
revenues
|
(11,794,469
|
)
|
(8,459,070
|
)
|
|||
Net
sales
|
$
|
61,806,676
|
$
|
54,626,248
|
|||
Income
(loss) from Operations:
|
|||||||
North
America
|
$
|
1,102,011
|
$
|
(893,902
|
)
|
||
Asia
|
3,156,751
|
4,840,319
|
|||||
Europe
|
174,068
|
351,966
|
|||||
$
|
4,432,830
|
$
|
4,298,383
|
6.
|
DEBT
|
7.
|
INCOME
TAXES
|
8. |
ACCRUED
EXPENSES
|
March
31,
|
December
31,
|
||||||
2007
|
2006
|
||||||
Sales
commissions
|
$
|
1,566,666
|
$
|
1,715,816
|
|||
Investment
banking commissions
|
550,000
|
-
|
|||||
Subcontracting
labor
|
2,026,530
|
2,032,763
|
|||||
Salaries,
bonuses and
|
|||||||
related
benefits
|
3,260,630
|
4,147,135
|
|||||
Other
|
3,341,380
|
4,817,703
|
|||||
$
|
10,745,206
|
$
|
12,713,417
|
9. |
RETIREMENT
FUND AND PROFIT SHARING PLAN
|
Three
Months Ended
|
|||||||
March
31,
|
|||||||
2007
|
2006
|
||||||
Service
cost
|
$
|
140,000
|
$
|
313,000
|
|||
Interest
cost
|
27,000
|
61,000
|
|||||
Amortization
of adjustments
|
18,000
|
40,000
|
|||||
Total
SERP expense
|
$
|
185,000
|
$
|
414,000
|
March
31,
|
December
31,
|
||||||
|
2007
|
2006
|
|||||
Balance
sheet amounts:
|
|||||||
Minimum
pension obligation
|
|||||||
and
unfunded liability
|
$
|
5,044,669
|
$
|
4,728,286
|
10. |
SHARE-BASED
COMPENSATION
|
Weighted
|
|||||||||||||
Average
|
|||||||||||||
Weighted
|
Remaining
|
Aggregate
|
|||||||||||
Average
|
Contractual
|
Intrinsic
|
|||||||||||
Options
|
Shares
|
|
Exercise
Price
|
|
Term
|
|
Value
|
||||||
Outstanding
at January 1, 2007
|
137,813
|
$
|
25.59
|
||||||||||
Granted
|
-
|
||||||||||||
Exercised
|
(21,313
|
)
|
22.94
|
$
|
340,103
|
||||||||
Forfeited
or expired
|
-
|
-
|
|||||||||||
Outstanding
at March 31, 2007
|
116,500
|
$
|
26.08
|
2.2
years
|
$
|
1,471,940
|
|||||||
Exercisable
at March 31, 2007
|
25,500
|
$
|
27.85
|
$
|
282,450
|
Weighted-Average
|
|||||||
Grant-Date
|
|||||||
Nonvested
Shares
|
Shares
|
|
Fair
Value
|
||||
Nonvested
at December 31, 2006
|
91,000
|
$
|
25.53
|
||||
Granted
|
-
|
-
|
|||||
Vested
|
-
|
-
|
|||||
Forfeited
|
-
|
-
|
|||||
Nonvested
at March 31, 2007
|
91,000
|
$
|
25.53
|
Weighted
|
|||||||||||||
Weighted
|
Average
|
||||||||||||
Average
|
Remaining
|
Aggregate
|
|||||||||||
Restricted
Stock
|
Award
|
Contractual
|
Intrinsic
|
||||||||||
Awards
|
Shares
|
|
Price
|
|
Term
|
|
Value
|
||||||
Outstanding
at January 1, 2007
|
167,000
|
$
|
34.93
|
3.85
years
|
|||||||||
Granted
|
-
|
-
|
|||||||||||
Awarded
|
-
|
-
|
|||||||||||
Forfeited
|
-
|
-
|
|||||||||||
Outstanding
at March 31, 2007
|
167,000
|
-
|
$
|
623,934
|
|||||||||
Exercisable
at March 31, 2007
|
-
|
-
|
$
|
-
|
11. |
COMMON
STOCK
|
12. |
COMPREHENSIVE
INCOME
|
Three
Months Ended
|
|||||||
March
31,
|
|||||||
2007
|
|
2006
|
|||||
Net
earnings
|
$
|
4,009,136
|
$
|
3,997,299
|
|||
Currency
translation adjustment-
|
|||||||
net
of taxes
|
358,024
|
91,879
|
|||||
Increase
in unrealized
|
|||||||
gain
on marketable securities
|
|||||||
-
net of taxes
|
4,296,191
|
2,507,671
|
|||||
Comprehensive
income
|
$
|
8,663,351
|
$
|
6,596,849
|
13. |
ASSETS
HELD FOR SALE
|
14. |
NEW
FINANCIAL ACCOUNTING STANDARDS
|
15. |
LEGAL
PROCEEDINGS
|
16. |
ACCUMULATED
OTHER COMPREHENSIVE INCOME
(LOSS)
|
March
31,
|
December
31,
|
||||||
2007
|
|
2006
|
|||||
Foreign
currency translation
|
|||||||
adjustment
|
$
|
1,498,908
|
$
|
1,140,884
|
|||
Unrealized
holding gain (loss)
|
|||||||
on
available-for-sale securities
|
|||||||
under
SFAS No. 115, net of
|
|||||||
taxes
of $1,829,912 and $(802,797)
|
|||||||
as
of March 31, 2007 and December 31, 2006
|
2,986,364
|
(1,309,827
|
)
|
||||
Unfunded
SERP liability net of taxes
|
|||||||
of
$(686,000) as of March 31, 2007
|
|||||||
and
December 31, 2006
|
(1,646,712
|
)
|
(1,646,712
|
)
|
|||
Accumulated
other comprehensive
|
|||||||
income
(loss)
|
$
|
2,838,560
|
$
|
(1,815,655
|
)
|
Percentage
of Net Sales
|
|||||||
Three
Months Ended
|
|||||||
March
31,
|
|||||||
2007
|
2006
|
||||||
Net
sales
|
100.0
|
%
|
100.0
|
%
|
|||
Cost
of sales
|
77.5
|
73.2
|
|||||
Selling,
general and
|
|||||||
administrative
expenses
|
15.3
|
17.2
|
|||||
Casualty
loss
|
-
|
1.8
|
|||||
Interest
expense and other costs
|
(0.2
|
)
|
(0.2
|
)
|
|||
Interest
income
|
1.3
|
0.9
|
|||||
Earnings
before provision
|
|||||||
for
income taxes
|
8.3
|
8.5
|
|||||
Income
tax provision
|
1.8
|
1.3
|
|||||
Net
earnings
|
6.5
|
7.2
|
Increase
(decrease) from
|
|||||||
Prior
Period
|
|||||||
Three
Months Ended
|
|||||||
March
31, 2007
|
|||||||
compared
with Three
|
|||||||
Months
Ended
March
31,
|
|||||||
2006
|
|||||||
Net
sales
|
13.1
|
%
|
|||||
Cost
of sales
|
19.8
|
||||||
Selling,
general and
|
|||||||
administrative
expenses
|
1.1
|
||||||
Net
earnings
|
0.3
|
· |
The
Company incurred a 2.6% increase in material costs as a percentage
of net
sales. The increase in raw material costs is principally related
to
increased manufacturing of value-added products, which have a higher
raw
material content than the Company’s other products, increased costs for
raw materials such as copper, steel and petroleum-based products
and
increased transportation costs.
|
· |
The
Company is currently paying higher wage rates and benefits to its
production workers in China, which resulted in a 1.8% increase in
direct
labor costs as a percentage of net sales. These higher rates and
benefits
are reflected in the Company’s cost of sales.
|
· |
Sales
of the Company’s DC-DC power products have increased. While these products
are strategic to Bel’s growth and important to total earnings, they return
lower gross profit percentage margins as a larger percentage of their
bills of materials are purchased components. As these sales continue
to
increase, the Company’s average gross profit percentage will likely
decrease.
|
Payments
due by period
|
||||||||||||||||
Contractual
Obligations
|
Total
|
|
Less
than
1
year
|
|
1-3
years
|
|
3-5
years
|
|
More
than
5
years
|
|||||||
Capital
expenditure obligations
|
$
|
3,095,709
|
$
|
3,095,709
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Operating
leases
|
5,066,711
|
1,789,440
|
2,133,695
|
1,143,576
|
-
|
|||||||||||
Raw
material purchase obligations
|
16,527,235
|
16,527,235
|
-
|
-
|
-
|
|||||||||||
Total
|
$
|
24,689,655
|
$
|
21,412,384
|
$
|
2,133,695
|
$
|
1,143,576
|
$
|
-
|
a)
|
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 upon that evaluation, the Company’s chief
executive officer and vice president of finance concluded that the
Company’s disclosure controls and procedures are effective in ensuring
that information required to be disclosed by the Company in the reports
that it files or submits under the Securities Exchange Act is recorded,
processed, summarized and reported, within the time periods specified
in
the SEC’s rules and forms.
|
b.)
|
Changes
in internal controls over financial reporting:
There have been no 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
reasonable likely to materially affect, the Company’s internal control
over financial reporting.
|
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 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 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
BEL FUSE INC. | ||
|
|
|
By: | /s/ Daniel Bernstein | |
Daniel
Bernstein,
President
and Chief
Executive Officer
|
||
By: | /s/ Colin Dunn | |
Colin
Dunn,
Vice
President of Finance
|