Bel Fuse (BELFB) 28th Annual Needham Growth Conference Virtual summary

Company Overview and Transformation

• Over 75 years in business, with $657M in annual sales as of TTM 9/30/25 and nearly 21% EBITDA margin after significant margin improvement efforts.

• Shifted from a magnetics-focused business to a diversified portfolio: power (50%+ of sales), connectivity (about 33%), and magnetics (13%).

• Aerospace and defense now represent 40% of end markets, up from 17% after the Enercon acquisition in November 2024.

• Sales have remained relatively flat since 2021, but profitability has increased dramatically due to operational changes and margin focus.

• Recognized by Forbes as one of America's most successful small companies for 2026.

Margin Improvement and Operational Changes

• EBITDA margin improved from 5% in 2020 to nearly 21% through SKU rationalization, price adjustments, procurement improvements, and sales team changes.

• Implemented pay-for-performance culture, ERP system, CRM, dashboards, and facility consolidations.

• Maintained margin expansion even during periods of flat sales.

• Margins in the PS&P business are industry-leading and expected to remain strong, with ongoing focus on operational leverage.

• FX headwinds expected in 2025-2026, particularly from the Chinese renminbi and Israeli shekel.

Market Trends and Demand Outlook

• 2025 saw robust demand across all business units, with recovery driven by actual demand rather than restocking.

• 2026 is expected to continue this trend, with strong growth and healthy backlog, especially in A&D.

• Power segment benefits from diverse applications, including AI infrastructure, data centers, rail, e-mobility, and industrial.

• AI-related sales, especially to GPU manufacturers, are a significant growth driver.

• Distribution channels have rebounded, contributing to resilience in power applications.