Bel Fuse (BELFB) Q4 2024 earnings summary

Executive summary

• Achieved a 410 basis point improvement in gross margin for 2024 versus 2023, despite a 16.4% sales decline year-over-year; 2024 was the second-best year for earnings and EBITDA in company history.

• Q4 2024 net sales reached $149.9M, up 7% year-over-year; organic sales down 7.8% excluding Enercon acquisition.

• Completed Enercon acquisition, making aerospace and defense the largest end market.

• Transition in leadership: Dan Bernstein to chairman, Farouq Tuweiq to CEO, marking the first non-family CEO in 76 years; CEO transition planned for 2025.

• Completed two major facility consolidations in 2024, with $1.5 million in cost savings realized and more expected in 2025.

Financial highlights

• Q4 2024 sales were $149.9 million, up from $140 million in Q4 2023; full-year 2024 sales were $535 million, down from $640 million in 2023.

• Q4 2024 gross margin was 37.5% (vs. 36.6% in Q4 2023); full-year gross margin up 410 basis points to 37.8%.

• Q4 Adjusted EBITDA was $30.3M (20.2% of sales), up from $27.3M (19.5%) in Q4-23; full year Adjusted EBITDA was $101.9M (19.0% of sales), down from $116.8M (18.3%) in 2023.

• Q4 Non-GAAP net earnings were $19.0M vs. $19.5M in Q4-23; full year Non-GAAP net earnings were $72.1M vs. $89.6M.

• Backlog at year-end was $382 million, including $119 million from Enercon.

Outlook and guidance

• AI, defense, and space expected to be key growth drivers in 2025; Enercon to be significantly additive to revenue.

• Q1 2025 net sales expected between $144M and $154M; gross margin projected at 36%-38%.

• Anticipate recovery in distribution, networking, and industrial markets in 2025; consumer end market to remain challenged.

• Power segment (excluding Enercon) expected to be flat to up; magnetics to lead growth, followed by Enercon.

• Tariffs on China and Mexico expected to have minimal financial impact as costs are passed to customers.