Bel Fuse (BELFB) 27th Annual Needham Growth Conference summary

Tariff exposure and supply chain

• 60% of manufacturing footprint is in China, but most magnetics products stay within Asia, limiting U.S. tariff exposure.

• Connectivity manufacturing is mainly in the U.S. and Europe, with minimal China exposure.

• Power segment, especially CUI, is most exposed to tariffs, but recent supplier bans and soft consumer demand have reduced risk.

• Only 12%-13% of legacy revenue is potentially tariffable; Enercon acquisition reduces this to below 10%.

Enercon acquisition and strategic fit

• Enercon, acquired in late November, is 93% defense and 7% aerospace, with $120M revenue and strong U.S. and Israeli presence.

• Business model focuses on low-volume, high-customization, and sole-source contracts, aligning with existing strengths.

• Acquisition enables cross-selling in Israel and Europe, leveraging existing facilities and relationships.

• Enercon faces limited competition, mainly from customers' internal R&D, and is positioned for growth as defense spending rises.

• Pro forma, defense and aerospace become the largest end market at 32%-33% of sales, improving margin profile.

Financial impact and balance sheet

• Enercon acquisition is accretive to gross margin, EBIT, EBITDA, and non-GAAP EPS from the start.

• $240M debt and $85M cash used for the deal; intangibles and other adjustments to be detailed in upcoming filings.

• Leverage expected to be around 2x or slightly below in the near term.

• Near-term capital deployment focuses on debt paydown and refinancing, with M&A appetite remaining but at a reduced scale.