BEL FUSE INC NJ

BEL FUSE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022

Bel Fuse Inc. and subsidiaries ("Bel," the "Company," "we," "us," and "our") design, manufacture and market a broad array of products that power, protect and connect electronic circuits. These products are used around the world, primarily in the defense, commercial aerospace, networking, telecommunications, computing, general industrial, high-speed data transmission, transportation and eMobility industries. Bel's portfolio of products also finds application in the automotive, medical, broadcasting and consumer electronics markets. We manage our operations by product group through our reportable operating segments, Power Solutions and Protection, Connectivity Solutions and Magnetic Solutions.

All amounts included in the tables to these notes to consolidated financial statements, except per share amounts, are in thousands.

Principles of Consolidation - The consolidated financial statements include all of the accounts of the Company and its wholly owned subsidiaries. In accordance with the guidance under ASC Topic810 "Consolidations", while the Company only owns an 80% interest in Enercon, the accompanying consolidated financial statements include100% of Enercon's financial activity since the effective date of the acquisition. The redeemable noncontrolling interest is reported in the mezzanine (temporary equity) section of the accompanying consolidated balance sheet at* December 31, 2024.*All intercompany transactions and balances have been eliminated in consolidation.

Reclassifications - Certain prior year amounts in the consolidated financial statements have been reclassified to conform to the current year presentation.

Estimates and Uncertainties - The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including butnot limited to those related to product returns, provisions for bad debt, inventories, goodwill, intangible assets, investments, Supplemental Executive Retirement Plan ("SERP") expense, income taxes, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that arenot readily apparent from other sources. Actual results* may*differ from these estimates under different assumptions or conditions.

Cash, Cash Equivalents and Investments - Cash equivalents include short-term investments in money market funds and certificates of deposit with anoriginal maturity ofthree months or less when purchased. Accounts at each U.S. institution are insured by the Federal Deposit Insurance Corporation ("FDIC") up to*$250,000.* Substantially all of our U.S. cash and cash equivalents balances are in excess of the FDIC insured limit. The Company periodically invests its excess cash in money market funds and U.S. Treasury Bills. The Company's cash and cash equivalents are placed with high credit quality financial institutions.

The Company has held to maturity securities comprised of U.S. Treasury Bills. These investments are classified as held to maturity as the Company has the intent and ability to hold these investments until they mature. The held to maturity securities mature within the next12 months. The table below shows the amortized costs, associated gross unrealized gains and associated fair value of the held to maturity securities at* December 31, 2024and2023:*

In determining the fair value of the Company's held to maturity U.S. Treasury securities, the Company utilized Level1 inputs of the market price for comparable securities as of* December 31, 2024and on December 31, 2023.*

Allowance for Credit Losses - The Company currently measures the expected credit losses based on our historical credit loss experience. The Company hasnot experienced significant recent or historical credit losses and isnot forecasting any significant credit losses which would require adjustments to our methodology. If current conditions and supportable forecasts indicate that our historical loss experience isnot reasonable andno longer supportable, the Company* mayadjust its historical credit loss experience to reflect these conditions and forecasts. The Company regularly analyzes its significant customer accounts and, when the Company becomes aware of a customer’s inability to meet its financial obligations, the Company records a specific reserve for bad debt to reduce the related receivable to the amount the Company reasonably believes is collectible. There wereno* significant impairment losses related to our receivables in2024 or2023.

Effects of Foreign Currency – In non-U.S. locations that arenot considered highly inflationary, we translate the non-equity components of our foreign balance sheets at the end of period exchange rates with translation adjustments accumulated within stockholders' equity on our consolidated balance sheets. We translate the statements of operations at the average exchange rates during the applicable period. In connection with foreign currency denominated transactions, including multi-currency intercompany payable and receivable transactions and loans, the Company incurred net realized and unrealized currency exchange (losses) gains of ($1.9) million, ($1.4) million and $0.3 million for the years ended* December 31, 2024,*2023 and2022, respectively, which were included in other expense, net on the consolidated statements of operations.

Concentration of Credit Risk - Financial instruments which potentially subject us to concentrations of credit risk consist principally of accounts receivable and temporary cash investments. We grant credit to customers that are primarily original equipment manufacturers, subcontractors of original equipment manufacturers and distributors based on an evalu ation of the customer's financial condition, without requiring collateral. Exposure to losses on receivables is principally dependent on each customer's financial condition. We control our exposure to credit risk through credit approvals, credit limits and monitoring procedures and establish allowances for anticipated losses. See Note14, "Segments," for disclosures regarding significant customers.

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Inventories - Inventories are stated at the lower of cost or net realizable value. Material costs are determined by standard costs or weighted average cost, both of which approximate actual costs. Costs related to inventories include raw materials, direct labor and manufacturing overhead which are included in cost of sales on the consolidated statements of operations upon sale.

Revenue Recognition – Revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods and services. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of sales.

Product Warranties – Warranties vary by product line and are competitive for the markets in which the Company operates. Warranties generally extend forone tothree years from the date of sale, providing customers with assurance that the related product will function as intended. The Company reviews its warranty liability quarterly based on an analysis of actual expenses and failure rates accompanied with estimated future costs and projected failure rate trends. Factors taken into consideration when evaluating our warranty reserve are (i) historical claims for each product, (ii) volume increases, (iii) life of warranty, (iv) historical warranty repair costs and (v) other factors. To the extent that actual experience differs from our estimate, the provision for product warranties will be adjusted in future periods. Actual warranty repair costs are charged against the reserve balance as incurred. See Note12, "Accrued Expenses."

Product Returns – We estimate product returns, including product exchanges under warranty, based on historical experience. In general, the Company isnot contractually obligated to accept returns except for defective product or in instances where the product doesnot meet the Company's product specifications. However, the Company* maypermit its customers to return product for other reasons. In certain instances, the Company would generally require a significant cancellation penalty payment by the customer. The Company estimates such returns, where applicable, based upon management's evaluation of historical experience, market acceptance of products produced and known negotiations with customers. Such estimates are deducted from sales and provided for at the time revenue is recognized. Distribution customers often receive what is referred to as "ship and debit" arrangements, whereby Bel will invoice them at an agreed upon unit price upon shipment of product and a price reduction maybe granted if the market price of the product declines after shipment. Distributors may*also be entitled to special pricing discount credits, and certain customers are entitled to return allowances based on previous sales volumes. Bel deducts estimates for anticipated credits, refunds and returns from sales each quarter based on historical experience.

Goodwill and Identifiable Intangible Assets– Goodwill represents the excess of the aggregate of the following: (1) consideration transferred, (2) the fair value of any noncontrolling interest in the acquiree and, (3) if the business combination is achieved in stages, the acquisition-date fair value of our previously held equity interest in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.

Identifiable intangible assets consist primarily of patents, licenses, trademarks, trade names, customer lists and relationships, non-compete agreements and technology-based intangibles and other contractual agreements. We amortize finite-lived identifiable intangible assets over the shorter of their stated or statutory duration or their estimated useful lives, ranging from 1 to 17 years, on a straight-line basis to their estimated residual values and periodically review them for impairment. Total identifiable intangible assets comprise 24.4% and 8.6% at* December 31,*2024 and2023, respectively, of our consolidated total assets.

We use the acquisition method of accounting for those business combinations in which we acquire100% of the equity. We donot amortize goodwill or intangible assets with indefinite useful lives. Goodwill and intangible assets with indefinite useful lives are tested for possible impairment annually during thefourth quarter of each fiscal year or more frequently if events or changes in circumstances indicate that the asset might be impaired.

Impairment and Disposal of Long-Lived Assets– For definite-lived intangible assets, such as customer relationships, contracts, intellectual property, and for other long-lived assets, such as property, plant and equipment, whenever impairment indicators are present, we perform a review for impairment. We calculate the undiscounted value of the projected cash flows associated with the asset, or asset group, and compare this estimated amount to the carrying amount. If the carrying amount is found to be greater, we record an impairment loss for the excess of book value over the fair value. In addition, in all cases of an impairment review, we re-evaluate the remaining useful lives of the assets and modify them, as appropriate. At* December 31, 2024and2023,* respectively, a total of $2.1 million and $1.3 million of property was classified as assets held for sale (within other current assets) on the accompanying consolidated balance sheet related to properties in the People’s Republic of China ("PRC") and in2024, Glen Rock, Pennsylvania, which are being exited in connection with our recent restructuring initiatives related to facility consolidation efforts. These assets have been evaluated for impairment and it was determined thatno impairment existed as of* December 31, 2024.*

For indefinite-lived intangible assets, such as goodwill, trademarks and tradenames, each year and whenever impairment indicators are present, we determine the fair value of the asset and record an impairment loss for the excess of book value over the fair value, if any. During the year ended* December 31, 2024,the Company recorded a $0.4 million impairment charge related to its CUI tradename in connection with a significant change in market conditions due to trade restrictions placed onone* of CUI's large suppliers in the PRC by the U.S. government. In addition, in all cases of an impairment review we re-evaluate whether continuing to characterize the asset as indefinite-lived is appropriate. See Note5, "Goodwill and Other Intangible Assets," for additional details.

Depreciation - Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated primarily using the straight-line method over the estimated useful life of the asset. The estimated useful lives primarily range from 1 to 33 years for buildings and leasehold improvements, and from 3 to 14 years for machinery and equipment.

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Redeemable Noncontrolling Interests - The Company reports noncontrolling interests in the mezzanine (“temporary equity”) section, between liabilities and equity, of the consolidated balance sheets, to the extent that such noncontrolling interests have redemption features, such as a put/call option (which didnot qualify for bifurcation), that is redeemable at a fixed or determinable price on a fixed or determinable date at the option of the holder, or upon the occurrence of an event that isnot solely within the control of the Company. Due to its redeemable features that are outside the control of the Company, the redeemable noncontrolling interest is and will continue to be reported in the mezzanine section in the consolidated balance sheets for as long as the put option is exercisable by the option holder. The carrying amount of the redeemable noncontrolling interest, initially valued at fair value as part of acquisition accounting, is adjusted each reporting period to equal the greater of the (i) redemption value or (ii) carrying value of the noncontrolling interest, adjusted each reporting period for income or loss attributable to the noncontrolling interest and any distributions made to date. This subsequent valuation method is in accordance with policy elections made by the Company in its accounting for the redeemable noncontrolling interest. The redemption value is calculated based on a pre-determined multiple of trailingtwelve-months EBITDA (as defined in the Purchase Agreement as further described in Note3, "Acquisition and Divestiture". Any measurement adjustments, if applicable, to the redeemable noncontrolling interest are recognized as an adjustment to net earnings attributable to noncontrolling interest on the consolidated statement of operations. Net income attributable to redeemable noncontrolling interests is classified below net income. Earnings per share is determined after the impact of the redeemable noncontrolling interest's share in net earnings of the Company. Refer to Note3, "Acquisition and Divestiture", herein for further details related to the redeemable noncontrolling interest.

Derivative Financial Instruments - As part of our risk management strategy, when considered appropriate, the Company uses derivative financial instruments including foreign currency forward contracts and interest rate swap agreements to hedge against certain foreign currency and interest rate exposures. The intent is to mitigate gains and losses caused by the underlying exposures with offsetting gains and losses on the derivative contracts. By policy, Bel doesnot enter into speculative positions with derivative instruments.

The Company records all derivatives as assets or liabilities on our consolidated balance sheets at their fair values. Gains and losses from the changes in values of these derivatives are accounted for based on the use of the derivative and whether it qualifies for hedge accounting. The Company's interest rate swaps and foreign currency forward contracts related to the Chinese renminbi (both further described in Note13, "Derivative Instruments and Hedging Activities") have been designated as cash flow hedges and as such, gains/losses are recorded in accumulated other comprehensive loss ("AOCL")until such time the hedged item affects earnings.

The counterparties to our derivative financial instruments consist of several major international financial institutions. We regularly monitor the financial strength of these institutions. While the counterparties to these contracts expose us to the potential risk of credit-related losses in the event of a counterparty’s non-performance, the risk would be limited to the unrealized gains on such affected contracts.

Income Taxes - We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. See Note10, “Income Taxes”. We record net deferred tax assets to the extent we believe these assets will more-likely-than-not be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. We have established valuation allowances for deferred tax assets that arenot likely to be realized. In the event we were to determine that we would be able to realize our deferred income tax assets in the future in excess of our net recorded amount, we would adjust the valuation allowance, which would reduce the provision for income taxes. We establish liabilities for tax contingencies when, despite the belief that our tax return positions are fully supported, it is more likely thannot that certain positions* maybe challenged and may**not* be fully sustained. The tax contingency liabilities are analyzed on a quarterly basis and adjusted based upon changes in facts and circumstances, such as the conclusion of federal and state audits, expiration of the statute of limitations for the assessment of tax, case law and emerging legislation. Our effective tax rate includes the effect of tax contingency liabilities and changes to the liabilities as considered appropriate by management.

Earnings per Share – We utilize thetwo-class method to report our earnings per share. Thetwo-class method is an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared and participation rights in undistributed earnings. The Company's Restated Certificate of Incorporation, as amended, states that the Company's Class B common shares, par value $0.10 per share (the "Class B common stock," "Class B common shares" or "Class B shares"), are entitled to dividends at least 5% greater than dividends paid to Class A common shares, par value $0.10 per share (the "Class A common stock," "Class A common shares" or "Class A shares," and collectively with the Class B common stock, the "common stock" or the "common shares"), resulting in thetwo-class method of computing earnings per share. In computing earnings per share, the Company has allocated dividends declared to Class A and Class B shares based on amounts actually declared for each class of stock and 5% more of the undistributed earnings have been allocated to Class B shares than to the Class A shares on a per share basis. Basic earnings per common share are computed by dividing net earnings by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share, for each class of common stock, are computed by dividing net earnings by the weighted-average number of common shares and potential common shares outstanding during the period. There wereno potential common shares outstanding during the years ended* December 31, 2024,* 2023 or2022 which would have had a dilutive effect on earnings per share.

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The earnings and weighted average shares outstanding used in the computation of basic and diluted earnings per share are as follows:

Research and Development ("R&D") - Our engineering groups are strategically located around the world to facilitate communication with and access to customers' engineering personnel. This collaborative approach enables partnerships with customers for technical development efforts. On occasion, we execute non-disclosure agreements with our customers to help develop proprietary, next generation products destined for rapid deployment. R&D costs are expensed as incurred, and are shown as a separate line within operating expenses on the consolidated statements of operations. Generally, R&D is performed internally for the benefit of the Company. R&D costs include salaries, building maintenance and utilities, rents, materials, administration costs and miscellaneous other items. R&D expenses for the years ended* December 31, 2024,* 2023 and2022 amounted to $23.6 million,$22.5 million and $20.2 million, respectively.

Fair Value Measurements - We utilize the accounting guidance for fair value measurements and disclosures for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis or on a nonrecurring basis during the reporting period. The fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based upon the best use of the asset or liability at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability. We classify our fair value measurements based on the lowest level of input included in the establishedthree-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are defined as follows:

Level1 - Observable inputs such as quoted market prices in active markets

Level2 - Inputs other than quoted prices in active markets that are either directly or indirectly observable

Level3 - Unobservable inputs about which little orno market data exists, therefore requiring an entity to develop its own assumptions

For financial instruments such as cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, the carrying amount approximates fair value because of the short maturities of such instruments. See Note6, "Fair Value Measurements," for additional disclosures related to fair value measurements.

Recently Issued Accounting Standards

Recently Adopted Accounting Standards

In* November 2023,the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2023-07, Segment Reporting (Topic280): Improvements to Reportable Segment Disclosures*, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker (CODM). The ASU doesnot change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. In thefourth quarter of2024, the Company adopted this guidance and applied the amendments retrospectively to all prior periods presented in the accompanying financial statements. This adoption only impacted our disclosures and didnot have any impact to our results of operations, cash flows and financial condition. See Note14,** "Segments", for applicable reportable segment disclosures required by this guidance.

In* March 2020,the FASB issued ASU2020*-04, Reference Rate Reform (Topic848*): Facilitation of the Effects of Reference Rate Reform on Financial Reporting*. ASU2020-04 provides temporary optional guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the market transition from the London Interbank Offered Rate (“LIBOR”) to alternative reference rates. In* January 2021,the FASB issued ASU2021*-01, which refined the scope of Topic848 and clarified some of its guidance as part of the FASB’s monitoring of global reference rate activities. This updated guidance was effective upon issuance, and the Company was initially allowed to elect to apply the amendments prospectively through* December 31, 2022.In December 2022,the FASB issued ASU2022*-06, Reference Rate Reform (Topic848*), Deferral of the Sunset Date of Topic848**, which extended the date by which companies could elect to apply the amendments to December 31, 2024.During January 2023,the Company amended its credit agreement and related interest rate swap agreements to transition the reference rate from LIBOR to a Secured Overnight Financing Rate ("SOFR") effective January 31, 2023.In connection with these amendments, the Company adopted ASU2020*-04 in thefirst quarter of2023 and elected to apply the relevant practical expedients within the guidance. The adoption of this guidance didnot have a material impact on the Company's consolidated financial statements.

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In* June 2016,the FASB issued ASU2016*-13, Financial Instruments**Credit Losses (Topic326*): Measurement of Credit Losses on Financial Instruments**,as amended. The new guidance broadens the information that an entity must consider in developing its expected credit loss estimates related to its financial instruments and adds to U.S. GAAP an impairment model that is based on expected losses rather than incurred losses. On January 1, 2023,the Company adopted ASU2016*-13. The adoption of this standard didnot have a material impact on the Company's consolidated financial statements.

Accounting Standards Issued ButNot Yet Adopted

In* December 2023,the FASB issued ASU2023*-09, Income Taxes (Topic740*): Improvements to Income Tax Disclosures*, which focuses on the rate reconciliation and income taxes paid. ASU2023-09 requires a public business entity (PBE) to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least5% of total income tax payments, net of refunds received. For PBEs, the new standard is effective for annual periods beginning after* December 15, 2024,with early adoption permitted. An entity mayapply the amendments in this ASU prospectively by providing the revised disclosures for the period ending December 31, 2025and continuing to provide the pre-ASU disclosures for the prior periods, or mayapply the amendments retrospectively by providing the revised disclosures for all periods presented. We expect this ASU to only impact our disclosures withno* impacts to our results of operations, cash flows, and financial condition.

In* November 2024,the FASB issued ASU2024*-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic220*-40): Disaggregation of Income Statement Expenses,* which is intended to improve disclosures about a public business entity's expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. Such information should allow investors to better understand an entity's performance, assess future cash flows, and compare performance over time and with other entities. The amendments will require public business entities to disclose in the notes to the financial statements, at each interim and annual reporting period, specific information about certain costs and expenses, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each expense caption presented on the face of the income statement, and the total amount of an entity's selling expenses. The amendments are effective for annual reporting periods beginning after* December15,* 2026, and interim reporting periods beginning after* December15,* 2027, and* may*be applied either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance on the consolidated financial statements.

On* February 1, 2023,the Company closed on a noncontrolling (one-third) investment in Germany-based innolectric AG (“innolectric”) for consideration of€8.0 million (approximately $8.8 million as of the February 2023closing). Transaction costs associated with the Company's investment in innolectric amounted to $1.3 million and these costs have been recorded as part of the carrying value of the investment. Under the terms of the investment agreement, if innolectric achieves certain EBITDA thresholds within a specified timeframe, the Company would be committed to acquiring the remaining shares of innolectric at that time. The accompanying consolidated balance sheet reflects the fair value as of the February 2023closing of the initialone*-third equity method investment, inclusive of transaction costs, of $11.0 million, and a separate liability of $1.0 million associated with the net fair value of the put and call options related to the remaining shares pursuant to the agreement in the event certain profitability thresholds are met.

This passive investment creates a strategic alliance that is focused on Electric Vehicles (“EV”) on-board power electronics, and in particular next generation fast-charging technology. Withno product overlap, this relationship expands the Bel eMobility Power portfolio, further enhancing Bel's competitive position in this emerging field. Our investment in innolectric is accounted for using the equity method and we have determined that the innolectric investment isnot a variable interest entity (VIE). Results from this investment have been included in Bel's Power Solution and Protection segment within other expense, net and amounted to losses of $0.6 million and $0.8 million during the years ended* December 31, 2024and2023,* respectively. The Company adopted a policy to record its share of innolectric's results on aone-month lag on a consistent basis to allow time for innolectric to provide its financial statements to Bel.

Related Party Transactions

From time to time, the Company provides cash loans to innolectric to fund working capital needs and further business development. At* December 31, 2024and2023,* the Company had related party loans to innolectric in the aggregate amount of€2.8 million (approximately $2.9 million at the* December 31, 2024exchange rate), and€2.0 million (approximately $2.1 million at the December 31, 2023exchange rate), respectively. These loans bear interest at a rate of 5% per annum. These balances are shown as a related-party note receivable on the accompanying consolidated balance sheets at December 31, 2024and2023.*

Acquisition of Enercon

On* November 14, 2024,the Company closed on its acquisition of its majority 80% stake in Enercon Technologies, Ltd. (“Enercon”), pursuant to the terms of the Share Purchase Agreement, dated as of September 19, 2024 (the “Purchase Agreement”), by and among the Company, Enercon, andFF3* Holdings, L.P., for itself and as Sellers’ Representative (“FF3”), and each of the other seller parties signatory thereto (collectively withFF3, the “Sellers”). Enercon is a leading supplier of highly customized power conversion and networking solutions to aerospace and defense markets globally, providing robust and reliable solutions across air, land and sea applications. Enercon is based in Netanya, Israel with additional facilities in New Hampshire, U.S. and Haryana, India.

Under the terms of the Purchase Agreement, on the* November 14, 2024closing date (and deemed effective solely for accounting purposes as of November 1, 2024),Bel acquired from the Sellers 80% of the issued and outstanding share capital of Enercon on a fully-diluted basis for (i) a cash purchase price of $320 million (subject to customary adjustments), plus (ii) up to $10 million in potential earnout payments for the2025*-2026 period (the “Earnout Payments”), as further described below (the “Transaction” or the "acquisition"). Bel* mayacquire the remaining 20% stake in Enercon and has the current intention to so purchase such remaining interest by early2027* in accordance with the terms and subject to the conditions of a shareholders’ agreement, which was also entered into on* November 14, 2024.*

At the closing, Bel paid an aggregate of approximately $325.6 million in cash in respect of the cash purchase price (after giving effect to estimated adjustments taken at closing including for Enercon’s cash, indebtedness, net working capital and unpaid transaction costs, and subject to further adjustment post-closing). Bel funded the closing of the Transaction through cash on hand of approximately $85.6 million and with approximately $240 million provided through incremental borrowings under the Company’s revolving credit facility, as amended in connection with the Transaction.

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The potential Earnout Payments* maybecome payable of up to $5 million for each of the fiscal2025* and fiscal2026 earnout periods (each, an “Earnout Period”), subject to Enercon’s achievement of certain specified EBITDA targets for each respective Earnout Period, as calculated and determined in accordance with the Purchase Agreement. In the event that (i) the target for the respective Earnout Period has been achieved, the full $5 million Earnout Payment for the Earnout Period shall be payable, or (ii) achievement for the respective Earnout Period is at least90% of the target level but less than100% of the target level, then the amount payable in respect of the Earnout Payment for such Earnout Period shall be $2.5 million. In the event that achievement for the respective Earnout Period is less than90% of the target level, no Earnout Payment shall be due for such period.

During the year ended* December 31, 2024,*the Company incurred $12.9 million of acquisition-related costs associated with the Transaction primarily for investment banker fees, legal fees, audit-related fees and other consulting costs. These costs are included in selling, general and administrative expenses on the consolidated statements of operations.

Fair Value Estimate of Assets Acquired and Liabilities Assumed

With respect to the acquisition of Enercon, we are continuing our review of our fair value estimate of assets acquired and liabilities assumed during the measurement period, which will conclude as soon as we receive the information we are seeking about facts and circumstances that existed as of the acquisition date, or learn that more information isnot available. This measurement period willnot exceedone year from the acquisition date. At the effective date of the acquisition, the assets acquired and liabilities assumed are generally required to be measured at fair value.

Our fair value estimate of assets acquired and liabilities assumed is pending completion of several elements, including the finalization of an independent appraisal and valuations of fair value of the assets acquired and liabilities assumed and final review by our management. The primary areas that arenot yet finalized relate to the tangible assets acquired and liabilities assumed, the valuation of property and equipment, the valuation of intangible assets acquired, operating leases, contingent liabilities and income taxes. Accordingly, there could be material adjustments to our consolidated financial statements, including changes to our depreciation and amortization expense related to the valuation of property and equipment and intangible assets acquired and their respective useful lives among other adjustments. The Company expects to finalize these valuations and complete the purchase price allocation as soon as practicable butno later thanone year from the acquisition date.

The following table depicts the Company’s current preliminary estimates of the acquisition date fair values of the consideration paid, identifiable net assets acquired and goodwill:

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The results of operations of Enercon have been included in the Company’s consolidated financial statements for the period from* November 1, 2024through December 31, 2024.The activity between the accounting effective date of November 1, 2024and the legal close date of November 14, 2024wasnot* material to Bel's financial statements. During the year ended* December 31, 2024,*Enercon contributed revenue of $20.8 million and net earnings of approximately $1.0 million to the Company’s consolidated financial results.

The following unaudited pro forma information presents a summary of the combined results of operations of the Company and the results of Enercon for the periods presented as if the Transaction had occurred on* January 1, 2023,along with certain pro forma adjustments. These pro forma adjustments give effect to the amortization of certain definite-lived intangible assets, adjusted depreciation based upon estimated fair value of assets acquired, interest expense and amortization of deferred financing costs related to the financing of the acquisition, and related tax effects. The2023* unaudited pro forma net earnings were adjusted to include an estimated non-recurring expense related to a fair value adjustment to acquisition-date inventory of $2.4 million ($1.8 million after tax) during the year ended* December 31, 2023.The pro forma results donot* reflect the realization of any potential cost savings, or any related integration costs. Certain cost savings* mayresult from these acquisitions; however, there can beno* assurance that these cost savings will be achieved. The pro forma results also exclude the impact of any change in the redemption value of the noncontrolling interest. The unaudited pro forma results are presented for illustrative purposes only and arenot necessarily indicative of the results that would have actually been obtained if the acquisitions had occurred on the assumed dates, nor is the pro forma data intended to be a projection of results that* may*be obtained in the future:

During2024, the acquisition of Enercon resulted in a noncontrolling interest holder who is entitled to a put option, giving the Sellers the ability to put their redeemable interest in the shares of the acquiree to the Company. Specifically, if exercised by the noncontrolling interest holder, the Company would be required to purchase the remaining 20% of the Seller's redeemable interest, at a redemption price during specified time period(s) stipulated in the Enercon acquisition agreement. Upon acquisition, the redeemable noncontrolling interest was initially valued at a fair value of $72.4 million. The redeemable noncontrolling interest recorded on the accompanying consolidated balance sheet at* December 31, 2024will remain in temporary equity until the applicable put-call option is either fully exercised or expires. At December 31, 2024,the redeemable noncontrolling interest was adjusted to reflect its redemption value of $80.6 million. The redemption value of the redeemable noncontrolling interest is generally calculated using Level3* unobservable inputs based on a multiple of earnings. A rollforward of the redeemable noncontrolling interest for the year ended* December 31, 2024*is included in the accompanying consolidated statements of stockholders' equity and redeemable noncontrolling interest.

Sale of Czech Republic Business

On* June 1, 2023,*the Company completed its divestment of Bel Stewart s.r.o., a former subsidiary in the Czech Republic which has historically been reported within Bel’s Connectivity Solutions segment. The business was sold to PEI Genesis (“PEI”) for total consideration of $5.1 million, subject to working capital adjustments. The divestiture of this non-core business was a strategic decision which allows the Connectivity Solutions segment to focus on its main product categories serving customer end markets such as commercial air, defense, industrial and networking which better align with its long-term growth objectives.

The carrying amounts of the major classes of assets and liabilities included as part of the sale were as follows:

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Nature of Goods and Services

Our revenues are substantially derived from sales of our products.

In our Power Solutions and Protection product group, we provide AC/DC and DC/DC power conversion devices and circuit protection products. Applications range from board-mount power to system-level architectures for servers, storage, networking, industrial, transportation, commercial aerospace and defense applications.

In our Connectivity Solutions product group, we provide connectors and cable assemblies to the aerospace, military/defense, commercial, rugged harsh environment and communication markets. This group also includes passive jacks, plugs and cable assemblies that provide connectivity in networking equipment, as well as modular plugs and cable assemblies used within the structured cabling system, known as premise wiring.

In our Magnetic Solutions product group, we provide an extensive line of integrated connector modules (ICM), where an Ethernet magnetic solution is integrated into a connector package. Products within the Company's Magnetic Solutions group are primarily used in networking and industrial applications.

The Company also provides incremental services to our customers in the form of training, highly-customized product development services, technical support, special tooling, and other support as deemed necessary from time to time. For purposes of ASC606, all such incremental services were concluded to be immaterial in the context of the contracts.

Types of Contracts

Substantially all of the Company's revenue is derived from contracts with its customers underone of the following types of contracts:

Significant Payment Terms

Contracts with customers indicate the general terms and conditions in which business will be conducted for a set period of time. Individual purchase orders state the description, quantity and price of each product purchased. Payment for products sold under direct contracts with customers or contracts with distributors is typically due in full within30-90 days from the transfer of title to the customer. Payment for products sold under our customer-designated hub arrangements is typically due within60 days of the customer pulling the product from the hub. Payment due related to our licensing agreements is generally within30 days of receiving the licensee sales data, which is either on a quarterly or annual basis.

Since the customer agrees to a stated price for each product on each purchase order, the majority of contracts arenot subject to variable consideration. However, the "ship and debit" arrangements with distributors, royalty income associated with our licensing agreements, and the product returns described above are each deemed to be variable consideration which requires the Company to make constrained estimates based on historical data.

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Disaggregation of Revenue

The following table provides information about disaggregated revenue by geographic region and sales channel, and includes a reconciliation of the disaggregated revenue to our reportable segments:

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Contract Assets and Contract Liabilities:

A contract asset results when goods or services have been transferred to the customer but payment is contingent upon a future event, other than passage of time. In the case of our customer-controlled hub arrangements, we are unable to invoice the customer until product is pulled from the hub by the customer, which generates an unbilled receivable (a contract asset) when revenue is initially recognized.

A contract liability results when cash payments are received or due in advance of our performance obligation being met. We have certain customers who provide payment in advance of product being shipped, which results in deferred revenue (a contract liability).

The balances of the Company's contract assets and contract liabilities at2024, 2023, and2022 are as follows:

The change in balance of our unbilled receivables from* December 31, 2023* to* December 31, 2024* primarily relates to a timing difference between the Company's performance (i.e. when our product is shipped to a customer-controlled hub) and the point at which the Company can invoice the customer per the terms of the customer contract (i.e. when the customer pulls our product from the customer-controlled hub). The deferred revenue balance is included within other current liabilities on the accompanying balance sheets.

A tabular presentation of the activity within the deferred revenue account for the year ended* December 31, 2024* and* December 31, 2023*are presented below:

Transaction Price Allocated to Future Obligations:

The aggregate amount of transaction price allocated to remaining performance obligations that havenot been fully satisfied as of* December 31, 2024related to contracts that exceedone* year in duration amounted to $16.6 million, with expected contract expiration dates that range largely from2026 –2027**.** It is expected that $11.0 million of this aggregate amount will be recognized in 2026, $4.0 million will be recognized in 2027 and the remainder will be recognized in years beyond2027. The majority of the Company's orders received (butnot yet shipped) at* December 31, 2024is related to contracts that have an original expected duration ofone* year or less, for which the Company is electing to utilize the practical expedient available within the guidance, and are excluded from the transaction price related to these future obligations. The Company will generally satisfy the remaining performance obligations as we transfer control of the products ordered to our customers.

Goodwill

Goodwill represents the excess of the purchase price and related acquisition costs over the fair value assigned to the net tangible and other intangible assets acquired in a business acquisition. At* December 31, 2024* and2023, the Company's reportable operating segments were as follows:

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The changes in the carrying value of goodwill classified by our segment reporting structure for the year ended* December 31, 2024* are as noted in the table below.

The addition of $182.9 million of goodwill during the year ended* December 31, 2024related to the Company's acquisition of Enercon, as further discussed in Note3,* "Acquisition and**Divestiture". The Company has accumulated impairment charges totaling $137.5 million, which were incurred under a former segment and reporting unit structure which was in place prior to* October 1, 2019.*

As discussedin Note6, "Fair Value Measurements", goodwill is reviewed for impairment on a reporting unit basis annually during thefourth quarter of each year and whenever events or changes in circumstances indicate the carrying value of goodwill* may**not* be recoverable. In testing goodwill for impairment, we* mayperform both a qualitative assessment and quantitative assessment. For the qualitative test, the assessment is based on a review of general macroeconomic conditions, industry and market conditions, changes in cost factors, overall financial performance (both actual and expected performance) and other reporting unit-specific events such as significant changes in management, customers, litigation or a change in the carrying amount of net assets. If it is determined that a potential impairment may*exist, we would proceed with a quantitative assessment. In cases where we elect to perform a quantitative assessment, we estimate the fair value of these reporting units using a weighting of fair values derived from income and market approaches. Under the income approach, we determine the fair value of a reporting unit based on the present value of estimated future cash flows. Cash flow projections are based on management's estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate used is based on a weighted average cost of capital adjusted for the relevant risk associated with the characteristics of the business and the projected cash flows. The market approach estimates fair value based on market multiples of revenue and earnings derived from comparable publicly traded companies with similar operating and investment characteristics as the reporting unit.

2024 Annual Impairment Test

On* October 1, 2024,the Company completed a quantitative assessment of our annual goodwill impairment test for ourthree existing reporting units. We concluded that the fair value of the Company's Power Solutions and Protection (excluding CUI), Connectivity Solutions, and CUI reporting units exceeded the carrying value and that there wasno* indication of impairment.

The excess of estimated fair values over carrying value, including goodwill for each of our reporting units that had goodwill as of the2024 annual impairment test were as follows:

2023 Annual Impairment Test

Prior to* October 1, 2023,the Company's reporting units were Power Europe, Connectivity Europe, CUI and EOS. On October 1, 2023,the Company completed a quantitative assessment of our annual goodwill impairment test for each of thefour* existing reporting units at that time. We concluded that the fair value of the Company's Connectivity Europe, Power Europe, CUI and EOS reporting units exceeded the carrying value and that there wasno indication of impairment. Effective* October 1, 2023,in connection with a then-recent shift in how management views and manages the business in light of the consolidation or our ERP systems, recent facility consolidations and other streamlining initiatives at the product group level, the Company changed its reporting unit structure. The Company's new reporting units are Power Solutions and Protection (excluding CUI), CUI, Connectivity Solutions and Magnetic Solutions. The Company performed a qualitative analysis (Step0*) on the new reporting units as of the* October 1, 2023testing date and concludedno* impairment existed for the new reporting units at that time.

As noted above, the fair value determined in connection with the goodwill impairment test completed in thefourth quarter of202**4 exceeded the carrying value for each reporting unit. Therefore, there wasno impairment of goodwill. However, if the fair value decreases in future periods, the Company* may*need to complete an interim goodwill impairment test and any potential goodwill impairment charge would be dependent upon the estimated fair value of the reporting unit at that time and the outcome of the impairment test. The fair values of the assets and liabilities of the reporting unit, including the intangible assets, could vary depending on various factors.

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The future occurrence of a potential indicator of impairment, such as a decrease in expected net earnings, adverse equity market conditions, a decline in current market multiples, a sustained decrease in the price of our common stock, a significant adverse change in legal factors or business climates, an adverse action or assessment by a regulator, unanticipated competition, strategic decisions made in response to economic or competitive conditions, or a more-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or disposed of, could require an interim assessment for some or all of the reporting units before the next required annual assessment. In the event of significant adverse changes of the nature described above, it* may*be necessary for us to recognize an additional non-cash impairment of goodwill, which could have a material adverse effect on our consolidated financial condition and consolidated results of operations.

Other Intangible Assets

Other identifiable intangible assets include patents, technology, license agreements, non-compete agreements and trademarks. Amounts assigned to these intangible assets have been determined by management. Management considered a number of factors in determining the allocations, including valuations and independent appraisals. Trademarks have indefinite lives and are reviewed for impairment on an annual basis, or when there is a triggering event. Other intangible assets, excluding trademarks, are being amortized over 1 to 17 years.

The Company tests indefinite-lived intangible assets for impairment using a fair value approach, the relief-from-royalty method (a form of the income approach). At* December 31, 2024*, the Company's indefinite-lived intangible assets related to the trademarks acquired in the Enercon, CUI, Power Solutions, Connectivity Solutions, Cinch and Fibreco acquisitions.

The components of definite and indefinite-lived intangible assets are as follows:

The increases in gross carrying amounts noted above as of* December 31, 2024related intangibles acquired in connection with the Enercon transaction, as further detailed in Note3,* "Acquisition and**Divestiture". Amortization expense was $6.5 million,$4.7 million and $6.0 million during each of2024,2023 and2022 respectively.

Estimated amortization expense for intangible assets for the nextfive years is as follows:** **

2024 and2023 Impairment Tests

The Company completed its annual indefinite-lived intangible assets impairment test as of* October 1, 2024and October 1, 2023.During the October 1, 2024testing date, it was concluded that an impairment existed related to the Company's CUI tradename given recent trade restrictions withone* of its large suppliers in the PRC. In connection with the trade restriction, and the resulting loss of sales to our customers, the Company recorded a $0.4 million impairment charge related to the CUI tradename within the Company's Power Solutions and Protection segment during the year ended* December 31, 2024.No indication of impairment was evident at the October 1, 2023test date for the Company's indefinite-lived intangible assets. Management has concluded that the fair value of these trademarks exceeded the related carrying values at December 31, 2024and * December 31, 2023, withno indication of impairment at either date.

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The following tables show the Company's cash, cash equivalents and other marketable and held to maturity securities by significant investment category as of* December 31, 2024and2023:*

As of* December 31, 2024and2023*, our available-for-sale securities primarily consisted of investments held in a rabbi trust which are intended to fund the Company’s Supplemental Executive Retirement Plan (“SERP”) obligations. These securities are measured at fair value using quoted prices in active markets for identical assets (Level1) inputs and amounted to $0.6 million at* December 31, 2024* and $0.3 million at* December 31, 2023*.

Throughout2024 and2023, the Company entered into a series of foreign currency forward contracts, the fair value of which was ($1.0) million at* December 31, 2024* and$0.5 million at* December 31, 2023*. The estimated fair value of foreign currency forward contracts is based on quotes received from the applicable counterparty, and represents the estimated amount we would receive or pay to settle the contracts, taking into consideration current exchange rates which can be validated through readily observable data from external sources (Level2).

The Company is a party totwo interest rate swap agreements as further described in Note13, "Derivative Instruments and Hedging Activities".The fair value of the interest rate swap agreements was $2.7 million and$4.0 million at December 31, 2024 and2023, respectively, which was based on data received from the counterparty, and represents the estimated amount we would receive or pay to settle the agreements, taking into consideration current and projected future interest rates as well as the creditworthiness of the parties, all of which can be validated through readily observable data from external sources.

The fair values of our derivative financial instruments (which are measured using Level2 fair value inputs) and their classifications in our consolidated balance sheets as of* December 31, 2024* and2023 were as follows:

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In connection with the acquisition of Enercon as further described in Note3, "Acquisition and Divestiture", the Sellers are eligible to receive an earnout payment based on the achievement of certain financial metrics in2025 and2026. As this contingent consideration will be settled in cash by Bel if the related metrics are achieved, this contingent consideration has been classified as a liability on the accompanying balance sheet at* December 31, 2024.The earnout liabilities were initially recorded at a fair value of $3.3 million at the acquisition date, with subsequent remeasurement to fair value at December 31, 2024calculated using Level3* unobservable inputs. At* December 31, 2024,inputs to the valuation approach for the contingent earnout liabilities include the Company's forecasted Enercon EBITDA (as defined under the terms of the Purchase Agreement) for each of2025* and2026, an estimated EBITDA volatility measure of 52.1%, an expected term of 2 years and a discount rate on the earnout payments of 6.66%. The fair value of the earnout liabilities as of* December 31, 2024and2023* were as follows:

Aside from the earnout liability described above, the Company doesnot have any other financial assets measured at fair value on a recurring basis categorized as Level3, and there wereno transfers in or out of Level1, Level2 or Level3 during2024 or2023. There wereno changes to the Company’s valuation techniques used to measure asset fair values on a recurring or nonrecurring basis during2024.

During2024, in connection with the Company's annual impairment test of indefinite-lived intangible assets, the Company adjusted the carrying value associated with the CUI tradename to fair value. Aside from this item, there wereno other financial assets accounted for at fair value on a nonrecurring basis as of* December 31, 2024* or* December 31, 2023*.

The Company has other financial instruments, such as cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, which arenot measured at fair value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid or short-term nature. The fair value of the Company’s long-term debt is estimated using a discounted cash flow method based on interest rates that are currently available for debt issuances with similar terms and maturities. At* December 31, 2024and2023*, the estimated fair value of total debt was$286.6 million and $60.0 million, respectively, compared to a carrying amount of $287.5 million and $60.0 million, respectively. The Company didnot have any other financial liabilities within the scope of the fair value disclosure requirements as of* December 31, 2024*.

Nonfinancial assets and liabilities, such as goodwill, indefinite-lived intangible assets and long-lived assets, are accounted for at fair value on a nonrecurring basis. These items are tested for impairment upon the occurrence of a triggering event or in the case of goodwill, on at least an annual basis. See Note5,** "Goodwill and Other Intangible Assets," for further information about goodwill and other indefinite-lived intangible assets.

At* December 31, 2024and2023*, the Company had obligations of$18.0 million and $19.5 million, respectively, associated with its SERP. As a means of informally funding these obligations, the Company has invested in life insurance policies related to certain employees and marketable securities held in a rabbi trust. At* December 31, 2024and2023*, these assets had a combined value of$17.0 million and $15.4 million, respectively.

Company-Owned Life Insurance

Investments in company-owned life insurance policies ("COLI") were made with the intention of utilizing them as a long-term funding source for the Company's SERP obligations. However, the cash surrender value of the COLI doesnot represent a committed funding source for these obligations. Any proceeds from these policies are subject to claims from creditors. The cash surrender value of the COLI of $16.4 million and $15.1 million at* December 31, 2024and2023*, respectively, is included in other assets in the accompanying consolidated balance sheets. The volatility in global equity markets in recent years has also had an effect on the cash surrender value of the COLI policies. The Company recorded income (expense) toaccount for theincrease (decrease) in cash surrender value in the amount of $1.3 million, $1.3 million and ($2.2) million during the years ended* December 31, 2024,*2023 and2022, respectively. These fluctuations are classified as other income (expense), net on the consolidated statements of operations for all periods presented. This classification is consistent with the costs associated with the long-term employee benefit obligations that the COLI is intended to fund.

Other Investments

At* December 31, 2024and2023*, the Company held, in the aforementioned rabbi trust, available-for-sale investments at a cost of $0.6 million and $0.3 million, respectively. Together with the COLI described above, these investments are intended to fund the Company's SERP obligations and are classified as other assets in the accompanying consolidated balance sheets. The Company monitors these investments for impairment on an ongoing basis. At* December 31, 2024and2023*, the fair market value of these investments was $0.6 million and $0.3 million, respectively.

The components of inventories are as follows:

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Property, plant and equipment, net consist of the following:

Depreciation expense for the years ended* December 31, 2024,2023 and2022 was $9.9 million, $8.6 million and $8.9 million, respectively. At December 31, 2024* and* December 31, 2023*, a total of $2.1 million and $1.3 million, respectively, of property was classified as assets held for sale on the accompanying consolidated balance sheet related to several buildings in Zhongshan, PRC and Glen Rock, Pennsylvania.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company isno longer subject to U.S. federal examinations by tax authorities for years before2021 and for state examinations before2018. Regarding foreign subsidiaries, the Company isno longer subject to examination by tax authorities for years before2014 in Asia and generally2016 in Europe.

The components of income from operations before income taxes and the provision for income taxes are as follows:

Domestic and foreign income before taxes is as follows:

Federal, state and foreign income tax expense (benefit) consists of the following:

A reconciliation of taxes on income computed at the U.S. federal statutory rate to amounts provided is as follows:

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As of* December 31, 2024and2023.* the Company has gross foreign net operating losses (“NOLs”) of $14.4 million and $15.1 million which amount to $3.9 million and $4.0 million of deferred tax assets, respectively. The Company hasno federal or state NOLs during these periods. In addition, the Company has $0.3 million of credit carryforwards. The Company believes that it is more likely thannot that the benefit arising from certain NOL, credit carryforwards and acquisition assets willnot be realized. In recognition of this risk, the Company has provided a valuation allowance of $1.8 million on these deferred tax assets. The federal and certain foreign NOLs can be carried forward indefinitely, the state and certain foreign NOLs expire at various times during2028 –2043 and the tax credit carryforwards expire at various times during2031 -2043.

As of* December 31, 2024,we arenot* indefinitely reinvested with respect to undistributed earnings from some of our Asian subsidiaries. There wasno material deferred tax expense recorded for foreign tax costs associated with the future remittance of these undistributed earnings. The Company remains permanently reinvested with respect to undistributed earnings from our other foreign subsidiaries. It isnot practicable to estimate the amount of deferred tax liability, if any, with respect to these permanently reinvested undistributed earnings.

Components of deferred income tax assets and liabilities are as follows:

At* December 31, 2024,2023 and2022, the Company has approximately $18.1 million, $19.8 million and $24.8 million, respectively, of liabilities for uncertain tax positions. These amounts, if recognized, would reduce the Company’s effective tax rate. As of December 31, 2024,approximately $1.2 million of the Company’s liabilities for uncertain tax positions are expected to be resolved during the nexttwelve* months by way of expiration of the related statutes of limitations.

A reconciliation of the beginning and ending amount of the liability for uncertain tax positions, including the portion included in income taxes payable, is as follows:

The Company’s policy is to recognize interest and penalties related to uncertain tax positions as a component of the current provision for income taxes. During the years ended* December 31, 2024,2023 and2022, the Company recognized $0.3 million, $0.4 million and $0.6 million, respectively, in interest and penalties in the consolidated statements of operations. During the years ended December 31, 2024,2023 and2022, the Company recognized a benefit of $1.1 million, $2.3 million and $1.6 million, respectively, for the reversal of such interest and penalties, relating to the expiration of statues of limitations and settlement of the acquired liability for uncertain tax positions. The Company has approximately $1.2 million, $2.0 million and $4.0 million accrued for the payment of interest and penalties at December 31, 2024,*2023 and2022, respectively, which is included in both income taxes payable and liability for uncertain tax positions in the consolidated balance sheets.

The Company has a Credit and Security Agreement with KeyBank National Association (as amended, the "credit agreement" or the "CSA"). Prior to* November 14, 2024,the CSA had provided for a $175 million 5-year senior secured revolving credit facility ("revolver"), with a sublimit of up to $10 million available for letters of credit and a sublimit of up to $5 million available for swing line loans. On November 14, 2024,*Bel entered into a Third Amendment Agreement (the “Third Amendment”) to the CSA, which made certain amendments to the CSA including (i) increasing the maximum revolving amount from $175 million to $325 million in order to finance the Enercon acquisition, and (ii) making loans under the new revolver in an aggregate principal amount of $240 million.

At* December 31, 2024and2023*, outstanding borrowings under the revolver amounted to$287.5 million and $60.0 million, respectively. The unused credit available under the credit facility was$37.5 million at* December 31, 2024* and $115.0 million at* December 31, 2023*. The Company incurred $4.1 million and $2.9 million of interest expense during the years ended* December 31, 2024* and2023, respectively, in connection with interest due on its outstanding borrowings under the CSA during each period, including the effects of the2021 Swaps (as hereinafter defined) and amortization of deferred financing costs. During* January 2023,the Company amended its CSA and related2021* Swaps to transition the reference rate from LIBOR to SOFR effective* January 31, 2023**.*

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The effective rate of interest for our total outstanding borrowings, including the impact of the2021 Swaps discussed below, was 5.47% and 2.47%, respectively, as of* December 31, 2024and December 31, 2023.The interest rate in effect for the fixed-rate portion of our outstanding borrowings ($60 million at each of December 31, 2024and2023*) was 2.84% and 2.47% at* December 31, 2024and2023,* respectively. The weighted-average interest rate in effect for the variable-rate portion of our outstanding borrowings ($227.5 million at* December 31, 2024)was 6.16% at December 31, 2024,and consisted of SOFR plus the Company’s credit spread at December 31, 2024,as determined per the terms of the CSA. No outstanding borrowings were subject to a variable interest rate at December31,* 2023. In order to manage our interest rate exposure on the remaining borrowings, and as further described in Note13, "Derivative Instruments and Hedging Activities", the Company is party to the2021 Swaps, each with an aggregate notional amount of $30 million, or $60 million in the aggregate, the effect of which is to fix the SOFR portion (or, for periods prior to* January 31, 2023,the LIBOR portion) of the interest rate on a portion of our outstanding debt on our Revolver (or such portion thereof up to the aggregate $60 million notional amount of the2021* Swaps). In periods prior to* January 31, 2023,the2021* Swaps required the Company to pay interest on the notional amount at the rate of 1.3055% and 1.3180%, respectively, in exchange for theone-month LIBOR rate. Effective* January 31, 2023,in connection with the Company's transition of its reference rate from LIBOR to SOFR as further described in Recently Adopted Accounting Standards in Note1, "Description of Business and Summary of Significant Accounting Policies", the2021* Swaps require the Company to pay interest on the notional amount at the rate of 1.334% and 1.348%, respectively, in exchange for the daily SOFR rate plus 10 basis points.

Under the terms of its credit agreement, the Company is entitled, subject to the satisfaction of certain conditions, to request additional commitments under the revolver or the addition of a term loan facility in the aggregate principal amount of up to $100 million for all such increases (revolver and term) to the extent that existing or new lenders agree to provide such additional commitments and/or term loans. In addition to requesting loans denominated in U.S. dollars, the credit agreement provides that up to a U.S. dollar equivalent principal amount of $15 million of the revolver* may*be borrowed by Bel in alternate foreign currencies including Euros, Pounds Sterling, Japanese Yen and such other currency as requested by Bel and consented to by KeyBank and each lender.

In connection with the credit agreement, the Company and certain of the Company’s material U.S. subsidiaries (together with the Company, the “Loan Parties”) provided to the administrative agent, for the benefit of the lenders, guaranty of payment. As a result, the obligations of the Company under the credit agreement are guaranteed by the Loan Parties’ material U.S. subsidiaries, and secured by afirst priority security interest in substantially all of the existing and future personal property of the Loan Parties, certain material real property of the Loan Parties and certain of the Loan Parties’ material U.S. subsidiaries, including 65% of the voting capital stock of certain of the Loan Parties’ direct foreign subsidiaries.

On* January 12, 2023,the Company amended its credit agreement for the purpose of transitioning its reference rate related to interest from LIBOR to SOFR. The borrowings under the credit agreement bear interest, generally payable quarterly, at a rate equal to, at the Company's option, either (1) SOFR, plus a margin ranging from 1.125% per annum to 2.125% per annum depending on the Company’s leverage ratio, or (2)(a) an alternate “Base Rate,” which is the highest of (i) KeyBank’s prime rate, (ii) the federal funds rate plus 0.50% and (iii) the SOFR rate with a maturity ofone* month plus 1%, plus (b) a margin ranging from 0.125% per annum to 1.125% per annum, depending on the Company’s leverage ratio. Pursuant to the terms of the credit agreement, the Company has agreed to pay to KeyBank, as administrative agent for the ratable account of the revolving lenders in consideration for their commitments in respect of the revolver, a commitment fee due quarterly in arrears and calculated based on the average unused amount of the facility (exclusive of swing line exposure), at a rate ranging from 0.2% per annum to 0.3% per annum, depending on the Company’s leverage ratio.

Revolving loans borrowed under the credit agreement mature on* September 1, 2026,*and the commitments with respect to the revolver will automatically terminate on such date.

The credit agreement contains customary representations and warranties, covenants and events of default. In addition, the credit agreement contains financial covenants that measure (i) the ratio of the Company’s total funded indebtedness, on a consolidated basis, less the aggregate amount of all unencumbered cash and cash equivalents, to the amount of the Company’s consolidated EBITDA (“Leverage Ratio”) and (ii) the ratio of the amount of the Company’s consolidated EBITDA to the Company’s consolidated fixed charges (“Fixed Charge Coverage Ratio”). If an event of default occurs, the lenders under the credit agreement would be entitled to take various actions, including the acceleration of amounts due thereunder and all actions permitted to be taken by a secured creditor.

At* December 31, 2024*, the Company was in compliance with its debt covenants, including its most restrictive covenant, the Leverage Ratio.

Scheduled principal payments of the total debt outstanding at* December 31, 2024* are as follows (in thousands):

Accrued expenses consist of the following:

The change in warranty accrual during2024 primarily related to repair costs incurred and adjustments to pre-existing warranties. There wereno new material warranty charges incurred during2024.

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Restructuring Activities:

Activity and liability balances related to restructuring costs for the years ended* December 31, 2023and2024* are as follows:

During thethird quarter of2022, a series of initiatives were launched to streamline our operational footprint. In a project completed during thefourth quarter of2023, two of our Magnetic Solutions manufacturing facilities in Zhongshan and Pingguo, China, were largely consolidated into a single centralized site in the Binyang county of Southwestern China (the new Bel Guangxi facility). Further, during2023, we completed the transition out of our Tempe, Arizona and Sudbury, UK facilities (both within our Connectivity Solutions segment) into other existing Bel sites. Our Connectivity Solutions Melbourne, Florida site also transitioned its manufacturing operations into our existing site in Waseca, Minnesota during2023. The $10.1 million of restructuring charges incurred the year ended* December 31, 2023,and the accrued restructuring costs of $5.5 million at December 31, 2023,*are associated with these collective initiatives.

The2024 charges and ending liability balance at* December 31, 2024noted above for severance costs largely relate to an initiative within our Power segment related to the transition of our fuse operations to other existing sites and also within our Connectivity segment related to the transition of certain manufacturing from our Glen Rock, Pennsylvania facility to other existing Bel sites. The new charges noted above for other restructuring costs relate to housing and social insurance costs associated with our fuse restructuring initiative within our Power segment. The balances in other restructuring costs in the table above as of December 31, 2023and December 31, 2024*largely related to remaining liabilities associated with the Company's aforementioned facility consolidation project in the PRC.

Our primary objective for holding derivative financial instruments is to manage foreign currency exchange rate risk and interest rate risk, when deemed appropriate. We enter into these contracts in the normal course of business to mitigate risks andnot for speculative purposes.

Foreign Currency Forward Contracts

Under our risk management strategy, we periodically use foreign currency forward contracts to manage our short-term exposures to fluctuations in operational cash flows resulting from changes in foreign currency exchange rates. These cash flow exposures result from portions of our forecasted operating expenses, primarily compensation and related expenses, which are transacted in currencies other than the U.S. dollar, most notably the Chinese renminbi and the Mexican peso. These foreign currency forward contracts generally have maturities ofno longer thantwelve months, although occasionally we will execute a contract that extends beyondtwelve months, depending upon the nature of the underlying risk.

We held outstanding foreign currency forward contracts with notional amounts of$14.2 million and$25.8 million as of* December 31, 2024* and2023, respectively. The Company's foreign currency forward contracts related to the Chinese renminbi are designated as cash flow hedges for accounting purposes and as such, changes in their fair value are recognized in accumulated other comprehensive income (loss) in the consolidated balance sheet and are reclassified into the consolidated statement of operations within cost of goods sold in the period in which the hedged transaction affects earnings.

Interest Rate Swap Agreements

To partially mitigate risks associated with the variable interest rates on the revolver borrowings under its credit agreement, the Company is a party to a pay-fixed, receive-variable interest rate swap agreement with each oftwo multinational financial institutions under which we, for periods prior to* January 31, 2023, (i) paid interest at a fixed rate of 1.3055% and received variable interest ofone*-month LIBOR on a notional amount of $30.0 million and (ii) paid interest at a fixed rate of 1.3180% and received variable interest ofone-month LIBOR on a notional amount of$30.0 million (the*“2021* Swaps”). The effective date of the2021 Swaps was* December 31, 2021,and settlements with the counterparties began on January 31, 2022and occur on a monthly basis. The2021* Swaps will terminate on* August 31, 2026.In January 2023,and in connection with related changes to its credit agreement, the Company amended itstwo* interest rate swap agreements to transition the related reference rates in these agreements from LIBOR to SOFR, effective* January 31, 2023.Effective January 31, 2023,the2021* Swaps require the Company to pay interest on the notional amount at the rate of 1.334% and 1.348%, respectively, in exchange for the daily SOFR rate plus 10 basis points.

The2021 Swaps are designated as cash flow hedges for accounting purposes and as such, changes in their fair value are recognized in accumulated other comprehensive income (loss) in the consolidated balance sheet and are reclassified into the statement of operations within interest expense in the period in which the hedged transaction affects earnings.

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Fair Values of Derivative Financial Instruments

See Note6, "Fair Value Measurements"for the gross fair values of the Company's derivative assets and liabilities as of December 31, 2024and2023.

Derivative Financial Instruments in Cash Flow Hedging Relationships

The effects of derivative financial instruments designated as cash flow hedges on AOCL and on the consolidated statements of operations for the years ended* December 31, 2024,*2023 and2022 were as follows:

The losses related to the foreign currency forward contracts are included as a component of currency translation adjustment on the accompanying consolidated statements of comprehensive income at* December 31, 2024,*2023 and2022.

Derivative Financial Instruments Not Designated as Hedging Instruments

Gains recognized on derivative financial instrumentsnot designated as hedging instruments in our consolidated statements of operations for the years ended* December 31, 2024*,2023 and2022 were as follows:

The Company operates inone industry with three reportable operating segments, which represent the Company'sthree product groups, consisting of Power Solutions and Protection, Connectivity Solutions and Magnetic Solutions:

Power Solutions and Protection Segment: This segment includes internal and external AC/DC power supplies, DC/DC converters and DC/AC inverters utilized in defense, commercial aerospace, industrial, networking and consumer applications. Bel circuit protection products include board level fuses (miniature, micro and surface mount), and Polymeric PTC (Positive Temperature Coefficient) devices, designed for the global electronic and telecommunication markets.

Connectivity Solutions Segment: This segment includes high speed and harsh environment copper and optical fiber connectors and integrated assemblies, providing connectivity solutions within the commercial aerospace, military communications, defense, network infrastructure, structured building cabling and several industrial applications.

Magnetic Solutions Segment: This segment includes the Company’s ICM products, which integrateRJ45 connectors with discrete magnetic components to provide better performance and a more robust device, substantially reducing board space and optimizing performance. This segment also includes Power Transformers for use in a wide array of applications, including industrial instrumentation, alarm and security systems, motion control, elevators, and medical products.

There areno intercompany sales between the segments.

On a quarterly basis, the Company’s chief operating decision maker (CODM), the Chief Executive Officer, utilizes gross profit (a U.S. GAAP measure) as the profitability measure in assessing segment performance. The CODM uses segment gross profit to make commercial and operational related decisions across the business and when evaluating capital deployment opportunities. In accordance with ASU2023-07, the Company has elected to disclose gross profit as its required measure of segment profit and loss since it represents the measure of segment performance that is most consistent with U.S. GAAP measurement principles.

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The following is a summary of key financial data for each of thethree years ended* December 31, 2024,*2023 and2022. In addition to total segment revenues and segment gross profit, the CODM’s quarterly reporting package also includes cost of sales in arriving at the disclosed measure of profitability. The Company has determined that cost of sales is a significant segment expense and is therefore included in the financial data disclosure tables below.

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Entity-Wide Information

The following is a summary of entity-wide information related to the Company's net sales to external customers by geographic area and by major product line. Such information attributes net sales based on markets where revenues are reported.

The following is a summary of long-lived assets by geographic area as of* December 31, 2024and2023*:

Long-lived assets consist of property, plant and equipment, net and other assets of the Company that are identified with the operations of each geographic area.

The territory of Hong Kong became a Special Administrative Region ("SAR") of the PRC in the middle of1997. The territory of Macao became a SAR of the PRC at the end of1999. Management cannot presently predict what future impact the current status of these territories, along with evolving political landscape in the region, will have on the Company, if any, or how the political climate in the PRC will affect the Company's contractual arrangements in the PRC (including risks arising out of any changes in governmental and economic policy, such as increased or new tariffs, and current or additional trade restrictions, and the potential for adverse developments arising out of any political or economic instability related to Hong Kong or Taiwan). A significant portion of the Company's manufacturing operations and approximately 30.8% of its identifiable assets are located in Asia.

Net Sales to Major Customers

The Company hadno direct customers whose net sales represented in excess often percent of the Company's consolidated net sales in2024 or2023. In2022, the Company hadone direct customer with net sales of $83.9 million (12.8% of sales). Net sales related to this significant customer were primarily reflected in the Magnetic Solutions operating segment.

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The Company maintains the Bel Fuse Inc. Employees' Savings Plan, a defined contribution plan that is intended to meet the applicable requirements for tax-qualification under sections401(a) and (k) of the Internal Revenue Code of1986, as amended (the "Code"). The Employees' Savings Plan allows eligible employees to voluntarily contribute a percentage of their eligible compensation, subject to Code limitations, which contributions are matched by the Company in an amount equal to 100% of thefirst 1% of compensation contributed by participants, and 50% of the next5% of compensation contributed by participants. The Company's matching contribution is made in the form of Bel Fuse Inc. Class A common stock. Prior to* January 1, 2012,the Company's matching and profit sharing contributions were made in the form of shares of Bel Fuse Inc. Class A and Class B common stock. The expense for each of the years ended December 31, 2024,2023 and2022 amounted to $1.4 million, $1.3 million and$1.3 million, respectively. As of December 31, 2024*, the plan owned approximately 256,585 shares and 52,924 shares of Bel Fuse Inc. Class A and Class B common stock, respectively.

The Company also maintains a Nonqualified Deferred Compensation Plan (the "DCP"). With certain exceptions, the Company's contributions to the DCP are discretionary and become fully vested by the participants upon reaching age 65. The expense for the years ended* December 31, 2024,2023 and2022 amounted to $0.2 million, $0.2 million and $0.1 million, respectively. As the plan is fully funded, the assets and liabilities related to the DCP were in equal amounts of $1.3 million at December 31, 2024* and $1.0 million at* December 31, 2023*. These amounts are included in other assets and other liabilities, respectively, on the accompanying consolidated balance sheets as of each date.

The Company's subsidiaries in Asia have a retirement fund covering substantially all of their Hong Kong based full-time employees. Eligible employees contribute up to 5% of salary to the fund. In addition, the Company must contribute a minimum of 5% of eligible salary, as determined by Hong Kong government regulations. The Company currently contributes 7% of eligible salary in cash. The expense for the years ended* December 31, 2024,*2023 and2022 amounted to approximately $0.3 million,$1.5 million and $1.8 million, respectively.

The Company maintains a SERP, which is designed to provide a limited group of key management and other key employees of the Company with supplemental retirement and death benefits. Participants in the SERP are selected by the Compensation Committee of the Board of Directors. The SERP initially became effective in2002 and was amended and restated in* April 2007to conform with applicable requirements of Section409A* of the Internal Revenue Code and to modify the provisions regarding benefits payable in connection with a change in control of the Company. The Plan is unfunded. Benefits under the SERP are payable from the general assets of the Company, but the Company has established a rabbi trust which includes certain life insurance policies in effect on participants as well as other investments to partially cover the Company's obligations under the Plan. See Note7, "Other Assets," for further information on these assets.

The benefits available under the SERP vary according to when and how the participant terminates employment with the Company. If a participant retires (with the prior written consent of the Company) on his normal retirement date (65 years old,20 years of service, and5 years of Plan participation), his normal retirement benefit under the Plan would be annual payments equal to 40% of his average base compensation (calculated using compensation from the highestfive consecutive calendar years of Plan participation), payable in monthly installments for the remainder of his life. If a participant retires early from the Company (55 years old,20 years of service, andfive years of Plan participation), his early retirement benefit under the Plan would be an amount (i) calculated as if his early retirement date were in fact his normal retirement date, (ii) multiplied by a fraction, with the numerator being the actual years of service the participant has with the Company and the denominator being the years of service the participant would have had if he had retired at age65, and (iii) actuarially reduced to reflect the early retirement date. If a participant dies prior to receiving 120 monthly payments under the Plan, his beneficiary would be entitled to continue receiving benefits for the shorter of (i) the time necessary to complete120 monthly payments or (ii)60 months. If a participant dies while employed by the Company, his beneficiary would receive, as a survivor benefit, an annual amount equal to (i)100% of the participant's annual base salary at date of death forone year, and (ii)50% of the participant's annual base salary at date of death for each of the followingfour years, each payable in monthly installments. The Plan also provides for disability benefits, and a forfeiture of benefits if a participant terminates employment for reasons other than those contemplated under the Plan. The expense related to the Plan for the years ended* December 31, 2024,*2023 and2022 amounted to $1.4 million, $1.3 million and $1.5 million, respectively.

Net Periodic Benefit Cost

The net periodic benefit cost related to the SERP consisted of the following components during the years ended* December 31, 2024,2023 and2022:* **

The service cost component of net benefit cost is presented within cost of sales or selling, general and administrative expense on the accompanying consolidated statements of operations, in accordance with where compensation cost for the related associate is reported. All other components of net benefit cost, including interest cost and net amortization noted above, are presented within other income/expense, net in the accompanying consolidated statements of operations.

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Obligations and Funded Status

Summarized information related to the SERP about the changes in plan assets and benefit obligation, the funded status and the amounts recorded at* December 31, 2024and2023* are as follows:

The Company has recorded the2024 and2023 underfunded status as a long-term liability on the consolidated balance sheets. The accumulated benefit obligation for the SERP was$17.2 million as of* December 31, 2024* and $18.1 million as of* December 31, 2023*. The aforementioned company-owned life insurance policies and marketable securities held in a rabbi trust had a combined value of$17.0 million and $15.4 million at* December 31, 2024and2023*, respectively. See Note7, "Other Assets," for additional information on these investments.

The estimated net loss and prior service cost for the SERP that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year is $0.1 million. The Company expects to make contributions of $0.9 million to the SERP in2025. The Company hadno net transition assets or obligations recognized as an adjustment to other comprehensive income and doesnot anticipate any plan assets being returned to the Company during2025, as the plan hasno assets.

The following benefit payments, which reflect expected future service, are expected to be paid:** **

The following gross amounts are recognized net of tax in accumulated other comprehensive loss:

Actuarial Assumptions

The weighted average assumptions used in determining the periodic net cost and benefit obligation information related to the SERP are as follows:

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The Company has an equity compensation program (the "Program") which provides for the granting of "Incentive Stock Options" within the meaning of Section422 of the Internal Revenue Code of1986, as amended, non-qualified stock options and restricted stock awards. The Company believes that such awards better align the interests of its employees with those of its shareholders. The2020 Equity Compensation Plan provides for the issuance of 1.0 million shares of the Company's Class B common stock. At* December 31, 2024*,473,764 shares remained available for future issuance under the2020 Equity Compensation Plan.

The Company records compensation expense in its consolidated statements of operations related to employee stock-based options and awards. The aggregate pretax compensation cost recognized for stock-based compensation amounted to approximately $3.7 million, $3.5 million and $2.4 million for2024,2023 and2022, respectively, and related solely to restricted stock awards. The Company didnot use any cash to settle any equity instruments granted under share-based arrangements during2024 and2023. At* December 31, 2024and2023*, the only instruments issued and outstanding under the Program related to restricted stock awards.

Restricted Stock Awards

The Company provides common stock awards to certain officers, directors and key employees. The Company grants these awards, at its discretion, from the shares available under the Program. Unless otherwise provided at the date of grant or unless subsequently accelerated, effective* January 1, 2024,shares awarded are typically earned inone*-third increments on the first,second andthird anniversaries of the award and are distributed provided the employee has remained employed by the Company through such anniversary date; otherwise the unearned shares are forfeited. Prior to* January 1, 2024,shares awarded were typically earned in 25% increments on the second, third,fourth andfifth* anniversaries of the award. The market value of these shares at the date of award is recorded as compensation expense on the straight-line method over the applicable vesting period from the respective award dates utilizing an estimated annual forfeiture rate of 5%. During2024, 2023 and2022, the Company issued 57,960 shares, 10,000 shares and 322,500 shares of the Company's Class B common stock, respectively, under a restricted stock plan to various officers, directors and employees.

A summary of the restricted stock activity under the Program for the year ended* December 31, 2024* is presented below:

As of* December 31, 2024*, there was $9.3 million of total pretax unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the restricted stock award plan. That cost is expected to be recognized over a period of 3.4 years. This expense is recorded in cost of sales, R&D and SG&A expense based upon the employment classification of the award recipients.

The Company's policy in2024 was to issue new shares to satisfy restricted stock awards. Currently the Company believes that the majority of its restricted stock awards will vest.

Throughout2024, 2023 and2022, the Company declared cash dividends on a quarterly basis at a rate of $0.06 per Class A (voting) share of common stock and $0.07 per Class B (non-voting) share of common stock. The Company declared and paid cash dividends totaling $3.5 million in2024, $3.5 million in2023, and $3.4 million in 2022. There areno contractual restrictions on the Company's ability to pay dividends, provided that the Company isnot in default under its credit agreement immediately before such payment and after giving effect to such payment.

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The Company has operating leases for its facilities used for manufacturing, research and development, sales and administration. There are also operating and finance leases related to manufacturing equipment, office equipment and vehicles. These leases have remaining lease terms ranging from 1 year to9 years. Certain of the leases contain options to extend the term of the lease and certain of the leases contain options to terminate the lease within a specified period of time. These options to extend or terminate a lease are included in the lease term only when it is reasonably likely that the Company will elect that option. The Company isnot a party to any material sublease arrangements.

The components of lease expense, which are included in cost of sales, research and development costs, and selling, general and administrative expense, based on the underlying use of the ROU asset, were as follows:

Supplemental cash flow information related to leases is as follows:

Supplemental balance sheet information related to leases was as follows:

Our discount rate is based on our incremental borrowing rate, as adjusted based on the geographic regions in which our lease assets are located.

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Maturities of lease liabilities were as follows as of* December 31, 2024*:

Other Commitments

The Company submits purchase orders for raw materials to various vendors throughout the year for current production requirements, as well as forecasted requirements. Certain of these purchase orders relate to special purpose material and, as such, the Company* mayincur penalties if an order is cancelled. The Company had outstanding purchase orders related to raw materials in the amount of$82.2 million and $57.7 million at December 31, 2024* and* December 31, 2023*, respectively. The Company also had outstanding purchase orders related to capital expenditures in the amount of $4.6 million and $5.8 million at* December 31, 2024* and* December 31, 2023*, respectively.

Legal Proceedings

The Company is party to a number of legal actions and claims,none of which individually or in the aggregate, in the opinion of management, are expected to have a material adverse effect on the Company's consolidated results of operations or consolidated financial position.

On* June 23, 2021,a patent infringement lawsuit styledBel Power Solutions, Inc. v. Monolithic Power Systems, Inc., Case Number6:21cv00655,* was filed in the United States District Court for the Western District of Texas (Waco Division) by Bel Power Solutions, Inc. against Monolithic Power Systems, Inc. ("MPS") for infringement of various patents directed towards systems, methods and articles of manufacture that provide a substantial improvement in power control for circuits, including novel and unique point-of-load regulators. On* July 27, 2023,*the Western District of Texas court filed an Order granting MPS’s motion for summary judgment of non-infringement. The Court’s memorandum and opinion is forthcoming. The Company is evaluating its options for appeal.

In connection with the Company's2014 acquisition of the Power-One Power Solutions business ("Power Solutions") of ABB Ltd. ("ABB"), there is an ongoing claim by the Arezzo Revenue Agency in Italy concerning certain tax matters related to what was then Power-One Asia Pacific Electronics Shenzhen Co. Ltd. (now Bel Power Solutions Asia Pacific Electronics Shenzhen Co. Ltd, or “BPS China”) for the years2004 to2006. In* September 2012,the Tax Court of Arezzo ruled in favor of BPS China and cancelled the claim. In February 2013,the Arezzo Revenue Agency filed an appeal of the Tax Court’s ruling. The hearing of the appeal was held on October 2, 2014.On October 13, 2014,BPS China was informed of the Regional Tax Commission of Florence ruling which was in favor of the Arezzo Revenue Agency and against BPS China. An appeal was filed on July 18, 2015before the Regional Tax Commission of Florence and rejected. On December 5, 2016,the Arezzo Revenue Agency filed an appeal with the Supreme Court and BPS China filed a counter-appeal on January 4, 2017.The Supreme Court rendered a judgment against BPS China in March 2024**.* BPS China filed an appeal in* July 2024**.* The estimated liability related to this matter is approximately $12.0 million and has been included as a liability for uncertain tax positions on the accompanying consolidated balance sheets at* December 31, 2024and2023.* As Bel is fully indemnified in this matter per the terms of the stock purchase agreement with ABB, a corresponding other asset for indemnification is also included in other assets on the accompanying consolidated balance sheets at* December 31, 2024and2023.*

In connection with the Company's2021 acquisition of EOS Power ("EOS"), there is an ongoing claim asserted with respect to EOS by the Principal Commissioner of Customs (Preventive), Mumbai related to customs duties and imposed fines and penalties dating back to1994. The original demand was in the amount of approximately $1.4 million, of which EOS has paid $0.5 million. EOS filed an Appeal in2016 which is pending with the Customs, Excise and Service Tax Appellate Tribunal in Mumbai related to the $0.9 million balance of the original demand net of EOS' payment. As part of the EOS acquisition agreement entered into in* March 2021,the Company is entitled to be indemnified for this matter for a period of 7 years from the acquisition date. The Company is unable to determine at this time what amount, if any, mayultimately be due in connection with this claim. As such,no estimate was accrued as of December 31, 2024.*

The Company isnot a party to any other legal proceeding, the adverse outcome of which is likely to have a material adverse effect on the Company's consolidated financial condition or consolidated results of operations.

The components of accumulated other comprehensive loss as of* December 31, 2024and2023* are summarized below:

Changes in accumulated other comprehensive (loss) income by component during the years ended* December 31, 2024,*2023 and2022 are as follows. All amounts are net of tax.

BEL FUSE INC. AND SUBSIDIARIES

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

(Amounts in thousands)

(a) Write-offs

(b) Includes foreign currency translation adjustments

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