Bel Fuse (BELFB) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales reached $133.2 million, down 21.1% year-over-year but at the high end of guidance, with declines in power and magnetics segments partially offset by growth in connectivity and strength in commercial air, defense, and rail markets.

• Gross margin expanded to 40.1% in Q2 2024 from 32.9% in Q2 2023, driven by operational efficiencies, strategic pricing, and product mix improvements.

• Net earnings for Q2 2024 were $18.8 million, compared to $27.8 million in Q2 2023; adjusted EBITDA was $27.4 million (20.6% of sales).

• Share repurchases totaled $14.2 million under a $25 million program as of June 30, 2024, with $7.9 million repurchased in Q2.

• Class A stock was added to the Russell 2000 index in June 2024.

Financial highlights

• Q2 2024 net sales: $133.2 million vs. $168.8 million in Q2 2023; YTD sales: $261.3 million vs. $341.1 million.

• Gross margin: 40.1% in Q2 2024, 38.8% for the first six months, both up from prior year periods.

• Net earnings: $18.8 million in Q2 2024; $34.7 million for the first six months, both down year-over-year.

• Cash and securities totaled $143.8 million at quarter-end, including $85.0 million in cash and $58.8 million in U.S. Treasury securities.

• Operating cash flow for the first half of 2024 was $38.3 million; capital expenditures were $4.3 million.

Outlook and guidance

• Q3 2024 sales expected between $118–$126 million, with gross margin guidance of 34–36%.

• Power segment projected to decline $20–$25 million year-over-year; magnetics down $10–$15 million; connectivity to see slight growth.

• Trade restrictions on a China-based supplier to impact Q3 sales by $3–$4 million; rail market expected to offset by $2 million.

• Annualized cost savings in excess of $1.0 million anticipated from Glen Rock restructuring, to be realized in 2024.

• SG&A and R&D expenses expected to remain at current run rates.