Bel Fuse, Inc. :BELFA-US: Earnings Analysis: Q4, 2016 By the Numbers : March 23, 2017

Bel Fuse, Inc. reports financial results for the quarter ended December 31, 2016.

We analyze the earnings along side the following peers of Bel Fuse, Inc. – AVX Corporation, Amphenol Corporation Class A, Transcat, Inc., Giga-tronics Incorporated and Littelfuse, Inc. (AVX-US, APH-US, TRNS-US, GIGA-US and LFUS-US) that have also reported for this period.


  • Summary numbers: Revenues of USD 118.54 million, Net Earnings of USD 3.38 million.
  • Gross margins narrowed from 23.98% to 20.73% compared to the same period last year, operating (EBITDA) margins now 9.10% from 8.05%.
  • Year-on-year change in operating cash flow of -43.89% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Earnings growth from operating margin improvements as well as one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2016-12-31 2016-09-30 2016-06-30 2016-03-31 2015-12-31
Relevant Numbers (Quarterly)
Revenues (mil) 118.54 128.81 131.62 121.18 135.25
Revenue Growth (%YOY) -12.35 -10.65 -9.64 -14.67 -9.02
Earnings (mil) 3.38 9.71 22.78 -100.7 2.41
Earnings Growth (%YOY) 40.12 97.36 275.72 -1908.48 19.31
Net Margin (%) 2.85 7.54 17.3 -83.09 1.78
EPS 0.25 0.72 2.29 -7.46 0.18
Return on Equity (%) 8.43 24.7 63.63 -219.53 4.14
Return on Assets (%) 3.12 8.78 20.47 -78.08 1.62

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Market Share Versus Profits

Revenues History
Earnings History

BELFA-US‘s change in revenue this period compared to the same period last year of -12.35% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that BELFA-US is holding onto its market share. Also, for comparison purposes, revenues changed by -7.97% and earnings by -65.22% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

The company’s gross margins showed no year-on-year improvement. In spite of this, the company’s earnings rose, influenced primarily by the improvement in operating margins (EBITDA margins) from 8.05% to 9.10%. For comparison, gross margins were 25.76% and EBITDA margins were 9.77% in the last period.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Gross Margin Trend

Companies sometimes sacrifice improvements in revenues and margins in order to extend friendlier terms to customers and vendors. Capital Cube probes for such activity by comparing the changes in gross margins with any changes in working capital. If the gross margins improved without a worsening of working capital, it is possible that the company’s performance is a result of truly delivering in the marketplace and not simply an accounting prop-up using the balance sheet.

Gross Margin History
Working Capital Days History

BELFA-US‘s decline in gross margins has not produced any significant offsetting improvement in its working capital . This leads Capital Cube to conclude that the decline in gross margins are likely from operating issues and not trade-offs with the balance sheet. Working capital days are currently 124.32 days, compared to last year’s level of 114.38 days.

Gross Margin Versus Working Capital Days

Quadrant label definitions. Hover to know more

Customer Financed, Cash Starved, Supplier Financed, Cash Rich

Cash Versus Earnings – Sustainable Performance?

It is important to examine a company�s cash versus earnings numbers to gauge whether its performance is sustainable.

BELFA-US‘s change in operating cash flow of -43.89% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Cash Flow based Earnings, Likely Non-cash Earnings, Low Cash Flow Base, Likely Undeclared Earnings


The company’s earnings growth has also been influenced by the following factors: (1) Improvements in operating (EBIT) margins from 3.68% to 4.54% and (2) one-time items. The company’s pretax margins are now 5.37% compared to 1.91% for the same period last year.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

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Company Profile

Bel Fuse, Inc. engages in the development, manufacture, and trade of products, which powers, protects, and connects electronic circuits. It operates through the following geographic segments: North America, Asia and Europe. Its products include magnetic, power transformers, modules, circuit protection, fiber optic connectors, and interconnect devices. The company was founded by Elliot Bernstein in 1949 and is headquartered in Jersey City, NJ.

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