Bel Fuse Inc. announced revenue for the first quarter, ended March 31, 2006, increased 20% to $54,626,000, a first quarter record, from $45,438,000 for the same period of 2005. Organic sales growth was approximately 12%, reflecting strong sales of interconnect products and MagJack(R)s. Galaxy Power, which was acquired on March 23, 2005, and NetWatch, which was acquired on July 1, 2005, accounted for the balance of the revenue gain.
"Our hard work to establish Bel's position in interconnect products is delivering the results we anticipated. We are continuing to invest in the development of these products, which we expect to remain important growth drivers for Bel," said Daniel Bernstein, president.
Gross margin declined slightly, to 27% for the first quarter of 2006 from 28% a year earlier, primarily due to higher energy, raw materials, transportation and direct labor costs.
SG&A expenses increased to 17.2% of sales for this year's first quarter compared to 15.9% for the first quarter of 2005, the result of higher selling expenses to support the growth in revenue as well as non-cash stock-based compensation expense of $381,000. The acquisition of Galaxy and NetWatch increased SG&A expense for the quarter by approximately $1,000,000.
Earnings before income tax provision were $4,695,000 for the first quarter of 2006, which include a pre-tax casualty loss of $964,000 for uninsured raw materials destroyed by the fire in February 2006 at the Company's leased manufacturing facility in the Dominican Republic. For the first quarter of 2005, earnings before income tax provision were $5,686,000. Bernstein said that production at Bel's Dominican Republic facility is expected to return to its pre-fire pace by the end of the second quarter of 2006.
Net earnings for the first quarter of 2006 were $3,997,000, or $0.34 per diluted share. This compares to net earnings of $4,313,000, or $0.38 per diluted share, for the first quarter of 2005.
At March 31, 2006, Bel had cash, cash equivalents and marketable securities of approximately $96,451,000, working capital of approximately $134,000,000, a current ratio of 4.2-to-1, no long-term debt, and shareholders' equity of approximately $209,392,000.
