Bel Fuse Posts 11.5% Increase in Net Sales and 12% increase in Orders for 2018
Bel Fuse Inc. posted net sales of $142.7 million for Q4 of 2018, an improvement of 19.0% year over year. GAAP net earnings were $4.0 million compared to a net loss of $20.8 million in fourth quarter 2017. The company had a GAAP EPS of $0.31 per Class A share (versus loss per share of $1.66 in Q4-17) and $0.33 per Class B share (versus loss per share of $1.74 in Q4-17).
Non-GAAP net earnings for Q4 were $4.8 million compared to a net loss of $1.2 million in the fourth quarter of 2017. Non-GAAP EPS was $0.37 per Class A share (versus loss per share of $0.09 in Q4-17) and $0.39 per Class B share (versus loss per share of $0.10 in Q4-17). The company had an adjusted EBITDA of $13.2 million (9.2% of sales) compared to $7.1 million (5.9% of sales) in the fourth quarter 2017.
For the full year 2018, net sales reached $548.2 million, up 11.5% year over year. GAAP net earnings were $20.7 million compared to a net loss of $11.9 million in 2017. The company cited the impact of tax reform as the primary reason for the 2017 net loss.
The company's adjusted EBITDA for 2018 rose from $40.4 million (8.2% of sales) in 2017 to $49.6 million (9.0% of sales).
Orders received during 2018 were $578 million up 12% from 2017. The company posted $171.2 million in backlog at December 31, 2018, an increase of $24.7 million, or 17%, from December 31, 2017
All three of the companies business units including the Power Solutions Protection group, the Magnetic Solutions group, and the Connectivity Solutions group reported substantial growth for the year.
The company's Power Solutions and Protection group saw its first year of growth since 2015. The growth in the power solutions group resulted from the company's success with the company's higher-powered ac-dc products in datacenter applications and their 48v power products with telecom customers. These growth drivers contributed to a sales increase of $16 million from 2017 for the Power Solutions and Protection group.
Daniel Bernstein, President and CEO, said, "Good execution from each of our three business units led to substantial growth for Bel in 2018, enabling us to grow our top-line by $56 million and increase our Adjusted EBITDA by over $9 million for the year.
"Increased demand for our MagJack® products in support of a key program at one of the world's leading networking equipment providers led to a $24 million increase in sales for our Magnetics Solutions group over 2017 levels, " Mr. Bernstein said.
"Our Connectivity Solutions group sales were up $16 million from 2017, largely driven by participation in key military programs in encryption and communication applications, coupled with higher demand for our products within commercial aerospace applications," he noted.
"Our Power Solutions and Protection group saw its first year of growth since 2015, as success with our higher-powered ac-dc products in datacenter applications and our 48V power products with telecom customers contributed to a sales increase of $16 million from 2017," Mr. Bernstein said.
Mr. Bernstein pointed to the $15 million in growth in its distribution business through 2018. "Each of our product groups continued to benefit from the commitment we've made to grow our distribution business; our revenue growth reflects a $15 million increase through this channel in 2018. Almost a third of our sales are generated through our distribution partners, and we expect this to remain a key channel for marketing our products going forward."
The company also completed the first phase of its enterprise resource planning system for Bel's Power Solutions business. Berstein explained that the company expects lower ERP implementation costs going forward.
"We continue to manage and optimize our operating expenses in order to mitigate the ongoing minimum wage rate increases in the countries in which we operate and the general uncertainty within our industry surrounding tariffs and trade policy," he said.
"The positive business trends noted along with our recent bookings and year-end backlog level are encouraging indicators for further growth as we head into 2019," Mr. Berstein concluded.