Bel Fuse Inc. announced financial results for the first quarter of 2008. Net sales for the three months ended March 31, 2008 decreased 1.5% to $60,869,000 compared to net sales of $61,807,000 for the first quarter of 2007, as higher sales in Bel’s Modules product group were offset by lower sales in its Magnetics product group. Net earnings for the first quarter of 2008 were $2,167,000. This compares to net earnings of $4,009,000 for the first quarter of 2007.
Net earnings per diluted Class A common share were $0.17 for this year’s first quarter. For the first quarter of 2007, diluted Class A common share earnings were $0.32. Net earnings per diluted Class B common share were $0.19 for this year’s first quarter. Diluted Class B common share earnings were $0.34 for last year’s first quarter.
"To meet a 40% increase in our Magnetics backlog, approximately 3,500 workers were hired after the Chinese New Year holiday, and we expect an additional 1,500 to be hired to bring our backlog down to normal lead times," said Daniel Bernstein Bel’s CEO and President. "Inefficiencies associated with training these new workers reduced both revenue and gross margin in this year’s first quarter. As these new workers complete their training and become fully productive, a process that typically takes 10 to 12 weeks, we expect to see improvements in our performance beginning in the current quarter. This year’s first quarter results also were affected by higher labor and raw materials costs, and a strong Chinese yuan against the dollar. We continue to pursue acquisition opportunities with the potential to increase shareholder value."
At March 31, 2008, Bel reported cash, cash equivalents and marketable securities of approximately $113,736,000, working capital of approximately $173,111,000, a current ratio of 6.4-to-1, total long-term obligations of $16,671,000, and shareholders’ equity of $249,421,000. At December 31, 2007, cash, cash equivalents and marketable securities were approximately $107,690,000, working capital was approximately $173,171,000, the current ratio was 6.2-to-1, total long-term obligations were $16,273,000, and shareholders’ equity was $244,527,000. During the first quarter, Bel repurchased 12,207 Class A shares at a cost of $392,000.
