Bel Fuse (BELFA) - 2025 Q1 - Quarterly Report

Revenue and Growth - For the three months ended March 31, 2025, the company's revenue was $152.2 million, an increase of 18.9% from$ 128.1 million in the same period of 2024[111]. - Power Solutions and Protection segment generated $83.1 million in revenue, a 37.9% increase from$ 60.2 million in the first quarter of 2024[112]. - Magnetic Solutions segment revenue increased to $18.5 million, up 36.3% from$ 13.6 million in the same period of 2024[111]. - Sales of Magnetic Solutions products increased by $4.9 million (36.1%) in Q1 2025 compared to Q1 2024, driven by demand from networking customers and distribution channels[115]. Order Backlog - The backlog of orders increased to$ 395.7 million as of March 31, 2025, up $14.1 million or 4% from December 31, 2024[108]. Costs and Expenses - Labor costs represented 8.4% of revenue in Q1 2025, up from 8.0% in Q1 2024, influenced by wage increases in the PRC and Mexico[109]. - R&D expenses rose to$ 7.2 million in Q1 2025 from $5.2 million in Q1 2024, largely due to the inclusion of Enercon's R&D expenses of$ 1.7 million[119]. - SG&A expenses increased to $29.5 million in Q1 2025 from$ 24.9 million in Q1 2024, primarily due to Enercon SG&A expenses of $6.0 million[120]. - Interest expense surged to$ 4.2 million in Q1 2025 from $0.4 million in Q1 2024, mainly due to higher borrowings related to the Enercon acquisition[121]. - Inflationary pressures are anticipated to continue affecting input costs, including raw materials and labor[109]. Tax and Income - The provision for income taxes was$ 5.5 million in Q1 2025, up from $4.5 million in Q1 2024, with an effective tax rate of 23.0% compared to 22.0% in the prior year[125]. - The effective tax rate will fluctuate based on the geographic regions where pretax profits are earned, with Asia having the lowest rates[110]. - Other income increased to$ 2.6 million in Q1 2025 from $1.8 million in Q1 2024, driven by foreign exchange gains of$ 4.3 million compared to $0.6 million in Q1 2024[123]. Cash Flow and Liquidity - Cash and cash equivalents decreased by$ 2.3 million in Q1 2025, with accounts receivable down by $8.2 million due to lower sales volume[127]. - The current ratio improved to 3.3:1 at March 31, 2025, compared to 2.9:1 at December 31, 2024[128]. - The company had$ 45 million of available borrowings under its revolving credit facility at March 31, 2025, with no mandatory principal payments due in 2025[130]. - The company expects to meet foreseeable liquidity and capital resource requirements through existing cash, investments, and anticipated cash flows from operations[129]. Acquisition - The company acquired an 80% stake in Enercon in November 2024, expected to contribute to sales in 2025[108]. Foreign Exchange - The company realized a foreign exchange transactional gain of $4.3 million during the three months ended March 31, 2025, due to favorable currency fluctuations[110].