With sales down, Bel Fuse says it plans realignment, more acquisitions

Jessica Perry//October 27, 2011

Technology component manufacturer Bel Fuse Inc. announced Thursday it plans to realign the company in a bid to cut costs and put the Jersey City company back on the path to greater profitability.

During a third-quarter results conference call, Bel Fuse president and CEO Daniel Bernstein told investors the company is addressing concerns as quickly as possible, but will not announce specific reorganization plans until the fourth quarter.

Bel reported sales in its modules group were up 50 percent, to $23 million in the third quarter, but those gains were not enough to make up losses in the company’s other three groups. Overall, sales decreased 10.7 percent year-over-year for the third quarter, coming in at $75.9 million, though year-to-date sales are better than 2010 at this time.

“There’s a tremendous amount of uncertainty,” Bernstein said. “Companies have strong cash positions — we don’t see them buying equipment and being aggressive.”

Acquisitions will continue to figure into Bel’s strategy. The company said its January 2010 acquisition of Cinch Connectors is “operating quite well” and “making good profits” in North America, despite the higher taxes than other markets the company is involved. Bernstein said one of the goals for the company is to committing to Cinch’s relationships with the aerospace industry, including with Boeing Co.

“Aerospace was a whole new world for us, and a space we like,” Bernstein said.

Bernstein said the company is nearing closure on two or three major acquisitions to bolster its portfolio. It gave up on its attempted takeover of Pulse Electronics in May after Pulse shareholders did not vote in two board members picked by Bel.

Bernstein also said the company’s litigation costs, which had increased due to a lawsuit filed by SynQor, are “96 percent done.”