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Mar 31, 2020
Bel Fuse Q1 2020 Earnings Report
Reported preliminary financial results with net loss due to COVID-19 impact and COLI policy loss, offset partially by CUI acquisition and government stimulus.
Key Takeaways
Bel Fuse Inc. reported a net loss of $(3.8) million for Q1 2020, impacted by COVID-19 related facility closures and supply chain disruptions, as well as a loss on company-owned life insurance policies. These factors were partially offset by the acquisition of CUI and stimulus funding from the Chinese government. Net sales decreased by 17.1% year-over-year to $104.0 million.
Net sales decreased by 17.1% year-over-year to $104.0 million.
Gross profit margin decreased to 24.2% from 24.5% in Q1 2019.
Operating loss was $(3.1) million, compared to an operating income of $3.4 million in Q1 2019.
CUI acquisition contributed $8.2 million in sales and $865,000 operating income.
Forward Guidance
The company anticipates an improvement in sales and financial results in the second quarter as compared to the first quarter. However, beyond the second quarter, they have limited visibility due to the evolving COVID-19 environment.
Positive Outlook
- Orders received in Q1 2020 were the highest since Q3 2018, indicating excess inventory has been worked through.
- Customers and distribution partners are starting to place replenishment orders again.
- Acquisition of CUI in late 2019 was accretive to Bel's earnings during the first quarter.
- CUI bookings during the first quarter were over $11 million, one of their highest booking quarters in history.
- Bel's consolidated book-to-bill ratio was 1.3 for the first quarter.
Challenges Ahead
- Limited visibility beyond the second quarter due to the evolving COVID-19 environment.
- Extended closure of facilities in China earlier in the quarter due to the outbreak of COVID-19.
- Related impact to the supply chain.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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