Bel Fuse Inc. announced financial results for the third quarter of 2008. Net sales for the three months ended September 30, 2008 increased 1% to $66,964,000, compared to net sales of $66,379,000 for the third quarter of 2007, as higher sales in Bel’s Modules, Magnetics and Interconnect product groups were offset by slightly lower sales of Circuit Protection products.
Net earnings for the third quarter of 2008 were $1,946,000 compared to net earnings of $5,914,000 for the third quarter of 2007. Net earnings for this year’s third quarter included a pre-tax labor severance charge of $329,000 for the previously announced closure of the company’s manufacturing plant in Westborough, Massachusetts, and a non-cash pre-tax charge of $1,397,000 primarily for the other-than-temporary impairment of Bel’s holdings in Toko Inc.. In addition, the income tax provision for this year’s third quarter was reduced by the reversal of an accrual for uncertain tax positions resulting from the expiration of certain statutes of limitations and the finalization of a tax audit, partially offset by changes in estimates for prior years’ taxes upon finalization of 2007 tax returns.
The company expects to expense additional pre-tax restructuring charges of up to $2,100,000 in the fourth quarter of 2008 related to the Westborough manufacturing plant closure.
Net earnings per diluted Class A common share were $0.16 for this year’s third quarter. For the third quarter of 2007, net earnings per diluted Class A common share were $0.47. Net earnings per diluted Class B common share were $0.17 for this year’s third quarter. Diluted Class B common share earnings were $0.50 for last year’s third quarter.
"Third quarter revenue growth was affected by the global economic slowdown, which continues to cloud the outlook as we look forward. Also, margins in the third quarter were pressured by higher labor and raw materials costs and the weakness of the dollar against the Chinese yuan. We expect margins to benefit beginning in the current quarter from recent reductions in commodity prices and higher product pricing schedules, as well as reduced overtime," said President and Chief Executive Officer Daniel Bernstein.
Noting that Bel currently owns 7,339,000, or 8.4%, of the outstanding common shares of Power-One, Inc., Bernstein added, "We continue to seek acquisition opportunities with the potential to increase shareholder value."
