BEL FUSE INC /NJ

Previous wording

In the six months ended June 30, 2026,54% of our revenues were derived from Aerospace, Defense & Rugged Solutions and 46% from Industrial Technology & Data Solutions.

Current wording

In the nine months ended September 30, 2026,52% of our revenues were derived from Aerospace, Defense & Rugged Solutions and 48% from Industrial Technology & Data Solutions.

Previous wording

We believe that in addition torecent global tariffs and inflationary pressures on the costs of goods and services in general, as well as ongoing conflicts/political unrest includingin or near the countries in which Bel operates, the key factors affecting and/or potentially affecting our results for the six months ended June 30, 2026 and/or future results include the following:

Current wording

We believe that in addition torecent global tariffs and inflationary pressures on the costs of goods and services in general, as well as ongoing conflicts/political unrest includingin or near the countries in which Bel operates, the key factors affecting and/or potentially affecting our results for the nine months ended September 30, 2026 and/or future results include the following:

Previous wording

Our revenue and gross margin by operating segment for the three and six months ended June 30, 2026 and 2025 were as follows:

Current wording

Our revenue and gross margin by operating segment for the three and nine months ended September 30, 2026 and 2025 were as follows:

Previous wording

Net sales increased by $23.8 million, or 31.1%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was primarily driven by higher sales volumes in Data Solutions, partially offset by lower sales in Transportation. Data Solutions sales increased by $20.7 million, or 54.4%, and Industrial sales increased by $3.5 million, or 12.1%, each compared to the prior-year period. Transportation sales decreased by $0.4 million, or 4.3%, compared to the prior-year period.

Current wording

Net sales increased by $31.2 million, or 37.8%, for the three months ended September 30, 2026, compared with the three months ended September 30, 2025. The increase was driven by higher sales volumes in Data Solutions and Industrial, partially offset by lower sales in Transportation. Data Solutions sales increased by $27.4 million, or 61.5%, and Industrial sales increased by $5.1 million, or 18.1%, compared with the prior-year period. Transportation sales decreased by $1.3 million, or 12.8%, compared with the prior-year period.

Previous wording

Net sales increased by $33.3 million, or 22.9%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily attributable to higher sales in Data Solutions and Industrial, partially offset by lower sales in Transportation. Data Solutions sales increased by $30.3 million, or 43.4%, and Industrial sales increased by $7.6 million, or 14.2%, each compared to the prior-year period. Transportation sales decreased by $4.6 million, or 20.6%, compared to the prior-year period.

Current wording

Net sales increased by $64.5 million, or 28.3%, for the nine months ended September 30, 2026, compared with the nine months ended September 30, 2025. The increase reflected higher sales in Data Solutions and Industrial, partially offset by lower sales in Transportation. Data Solutions sales increased by $57.7 million, or 50.4%, and Industrial sales increased by $12.7 million, or 15.5%, compared with the prior-year period. Transportation sales decreased by $5.9 million, or 18.2%, compared with the prior-year period.

Previous wording

Gross margin for the 2026 periods was favorably impacted primarily by a more favorable product mix and improved operational efficiencies, including benefits from higher volumes and improved factory utilization. These favorable impacts were partially offset by unfavorable foreign currency fluctuations, primarily due to the weakening of the U.S. dollar against the Chinese renminbi, and euro, which increased costs in certain manufacturing locations. The increase in gross margin was more pronounced in the current quarter than on a year-to-date basis, as the benefits from mix and operational efficiencies were stronger in the quarter, while the year-to-date period includes earlier period results with comparatively lower margins.

Current wording

Gross margin in the 2026 periods benefited primarily from pricing actions implemented earlier in 2026, a more favorable product mix, higher sales volumes, and improved operational efficiencies, including improved absorption of direct labor and manufacturing overhead resulting from increased production levels and improved factory utilization. These favorable impacts were partially offset by unfavorable foreign currency fluctuations, reflecting the weakening of the U.S. dollar against the Chinese renminbi and the euro, which increased costs at certain manufacturing locations. The year-to-date period also included results from earlier periods with comparatively lower gross margins.

Previous wording

Cost of sales as a percentage of revenue for the three and six months ended June 30, 2026 and 2025 consisted of the following:

Current wording

Cost of sales as a percentage of revenue for the three and nine months ended September 30, 2026 and 2025 consisted of the following:

Previous wording

The increase in material costs as a percentage of net sales in the 2026 periods was primarily due to an unfavorable product and production mix, driven by higher sales volumes in offerings with higher bill-of-material (“BOM”) content, including power products, within the Aerospace, Defense & Rugged Solutions and Industrial Technology & Data Solutions segments. These products generally have a greater proportion of purchased components and raw materials relative to labor and overhead, which increased material costs as a percentage of net sales.

Current wording

Material costs as a percentage of net sales were generally consistent with the prior-year quarter and increased modestly on a year-to-date basis. The year-to-date increase principally reflected sales growth in products with relatively higher bill-of-material ("BOM") content, including certain power products within the Aerospace, Defense & Rugged Solutions and Industrial Technology & Data Solutions segments. These products generally contain a higher proportion of purchased components and raw materials relative to labor and overhead costs.

Previous wording

Material costs were also impacted by higher purchasing levels associated with increased volumes and higher unit input costs in certain commodities and electronic components, including select supplier price increases. In addition, the Company’s evolving manufacturing footprint, including the increased use of third-party manufacturing for certain products previously produced in-house at the Pingguo facility, shifted certain costs from labor and overhead to purchased materials, contributing to higher material costs as a percentage of net sales. While the Company took pricing actions and continued sourcing and cost-reduction initiatives, these measures partially offset, but did not fully mitigate, the effects of mix and higher input costs in the periods presented.

Current wording

Material costs were also affected by higher costs for certain commodities and electronic components, and select supplier price increases. In addition, changes in the Company's manufacturing footprint, including the increased use of third-party manufacturing for certain products previously produced internally, shifted a portion of production costs from labor and overhead to purchased materials. Ongoing sourcing and cost-reduction initiatives partially offset these impacts.

Previous wording

Other expenses (overhead and other manufacturing costs) were $42.1 million for the three months ended June 30, 2026, compared to $36.5 million for the three months ended June 30, 2025, an increase of $5.6 million. For the six months ended June 30, 2026, other expenses were $82.9 million, compared to $72.3 million in the prior-year period, an increase of $10.6 million. Other expenses as a percentage of net sales decreased year over year, reflecting higher net sales and increased absorption of fixed and semi-fixed manufacturing overhead. The year-over-year increase in other expenses reflects higher indirect/support labor and related benefits, other overhead, and repairs and maintenance, consistent with increased manufacturing activity and support requirements. These increases were partially offset by lower insurance and rental costs. Depreciation and amortization were generally consistent period over period, and utilities were relatively stable.

Current wording

As a percentage of net sales, other expenses decreased for both the three- and nine-month periods, reflecting the benefit of higher sales volumes and improved absorption of fixed and semi-fixed manufacturing overhead. The increase in absolute other expenses primarily reflected higher indirect labor and related benefits, repairs and maintenance, and other manufacturing support costs associated with increased production activity. These increases were partially offset by lower insurance and facility-related costs. Depreciation and amortization expense and utility costs were generally consistent with the prior-year periods.

Previous wording

Interest expense was $1.8 million for the three months ended June 30, 2026, compared to $4.0 million for the three months ended June 30, 2025, representing a decrease of $2.2 million. The decrease was primarily due to lower average outstanding borrowings under the Company’s Revolver during the 2026 period compared to the prior-year period. In particular, the Company had no outstanding borrowings under the Revolver at June 30, 2026, compared to interest incurred in the prior-year quarter on higher Revolver borrowings. Interest expense for the period also includes the effects of the Company’s 2021 interest rate swaps and amortization of deferred financing costs.

Current wording

Interest expense was less than $0.1 million for the three months ended September 30, 2026, compared with $3.6 million for the three months ended September 30, 2025, a decrease of $3.6 million. The decrease primarily reflected lower average borrowings under the Company's Credit and Security Agreement during the 2026 period, including the repayment of outstanding borrowings under the Revolver. The Company had no outstanding borrowings under the Revolver at September 30, 2026. Interest expense for both periods also included the effects of the Company's 2021 interest rate swap agreements and the amortization of deferred financing costs.

Previous wording

For the six months ended June 30, 2026, interest expense was $4.3 million, compared to $8.1 million for the six months ended June 30, 2025, representing a decrease of $3.8 million. The decrease was primarily driven by lower average borrowings under the Credit and Security Agreement during the first half of 2026 as the Company reduced and ultimately repaid amounts outstanding under the Revolver, which had $197.5 million outstanding at December 31, 2025. Interest expense for both periods includes the impact of the 2021 swaps and amortization of deferred financing costs.

Current wording

For the nine months ended September 30, 2026, interest expense was $4.4 million, compared with $11.8 million for the nine months ended September 30, 2025, a decrease of $7.4 million. The decrease reflected lower average borrowings under the Company's Credit and Security Agreement during 2026 as the Company reduced and ultimately repaid amounts outstanding under the Revolver, which totaled $197.5 million at December 31, 2025. Interest expense for both periods also included the effects of the Company's 2021 interest rate swap agreements and the amortization of deferred financing costs.

Previous wording

The Company’s effective tax rate will fluctuate based on the geographic regions in which the pretax profits are earned. Tax rates in the U.S. and Europe are generally comparable, while Asia generally has lower statutory tax rates. See Note 11, “Income Taxes”.

Current wording

The Company’s effective tax rate may fluctuate based on the geographic mix of pretax earnings. Tax rates in the U.S. and Europe are generally comparable, while Asia generally has lower statutory tax rates. See Note 12, “Income Taxes.”

Previous wording

For the six months ended June 30, 2026, the provision for income taxes was $6.6 million, compared to $12.4 million for the same period in 2025. Earnings before income taxes for the six months ended June 30, 2026, decreased by $1.9 million compared to the same period in 2025, primarily due to lower income from the Europe region, partially offset by an increase in income from the North America region. The Company’s effective tax rate for the six months ended June 30, 2026, was 11.9% compared to 21.5% for the same period in 2025. The decrease in the effective tax rate was attributable to the same factors noted above. See Note 11,“Income Taxes”.

Current wording

For the three months ended September 30, 2026, the provision for income taxes was $8.3 million, compared to $5.4 million for the same period in 2025. Earnings before income taxes for the three months ended September 30, 2026, increased by $18.6 million compared to the same period in 2025, primarily due to higher income from the North America and Asia regions, partially offset by a decrease in income from the Europe region. The Company’s effective tax rate for the three months ended September 30, 2026, was 17.7%, compared to 19.5% for the same period in 2025. The decrease in the effective tax rate was primarily driven by a decrease in taxes related to income from foreign subsidiaries taxed in the U.S. as part of the Tax Cuts and Jobs Act. See Note 12,“Income Taxes.”

Previous wording

For the three months ended June 30, 2026, the provision for income taxes was $3.8 million, compared to $6.9 million for the same period in 2025. Earnings before income taxes for the three months ended June 30, 2026, increased by $4.1 million compared to the same period in 2025, primarily due to higher income from the North America and Asia regions, partially offset by a decrease in income from the Europe region. The Company’s effective tax rate for the three months ended June 30, 2026, was 10.0%, compared to 20.5% for the same period in 2025. The decrease in the effective tax rate was primarily driven by a benefit from restricted stock vesting and the reversal of uncertain tax positions due to statute expirations, as well as deferred tax benefit arising from a rate increase in a foreign deferred tax asset. See Note 11,“Income Taxes.”

Current wording

For the nine months ended September 30, 2026, the provision for income taxes was $14.8 million, compared to $17.8 million for the same period in 2025. Earnings before income taxes for the nine months ended September 30, 2026, increased by $16.7 million compared to the same period in 2025, primarily due to higher income from the North America and Asia regions, partially offset by a decrease in income from the Europe region. The Company’s effective tax rate for the nine months ended September 30, 2026, was 14.5% compared to 20.8% for the same period in 2025. The decrease in the effective tax rate was attributable to a tax benefit from restricted stock vesting and the reversal of uncertain tax positions resulting from the expiration of applicable statutes of limitations, and a deferred tax benefit arising from a foreign tax rate increase that resulted in the remeasurement of certain deferred tax assets. See Note 12,“Income Taxes.”

Previous wording

Our principal sources of liquidity include $306.1 million of cash and cash equivalents at June 30, 2026, cash provided by operating activities, proceeds from securities offerings and borrowings available under our credit facility. We expect to use this liquidity for operating expenses, investments in working capital, capital expenditures, interest, taxes, lease and purchase obligations, pension benefit obligations, dividends, and debt obligations and other long-term liabilities. Our liquidity may also be utilized for purchases of common stock under our Repurchase Program, fund potential acquisitions in future periods, as well as potential future cash requirements related to the Enercon acquisition, including the potential 2026 Earnout Payment that may become due and the put-call options under the Enercon shareholders’ agreement, pursuant to which Bel has the current intention to purchase the remaining 20% interest by early 2027. See the discussion “Liquidity and Capital Resources” appearing in Item 7, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. We believe that our current liquidity position and future cash flows from operations will enable us to fund our operations, both in the next twelve months and in the longer term.

Current wording

Our principal sources of liquidity include $333.1 million of cash and cash equivalents at September 30, 2026, cash provided by operating activities, proceeds from securities offerings and borrowings available under our credit facility. We expect to use this liquidity for operating expenses, investments in working capital, capital expenditures, interest, taxes, lease and purchase obligations, pension benefit obligations, dividends, and debt obligations and other long-term liabilities. Our liquidity may also be utilized for purchases of common stock under our Repurchase Program, to fund potential acquisitions in future periods, as well as probable future cash requirements associated with the Enercon acquisition, including amounts that may become payable under contingent consideration arrangements and contractual settlement obligations related to the remaining 20% ownership interest in Enercon, as amended by the Letter Agreement. See the discussion “Liquidity and Capital Resources” appearing in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. We believe that our current liquidity position and future cash flows from operations will enable us to fund our operations, both in the next twelve months and in the longer term.

Previous wording

During the six months ended June 30, 2026, our cash and cash equivalents increased by $248.3 million. This increase was primarily due to the following:

Current wording

During the nine months ended September 30, 2026, our cash and cash equivalents increased by $275.3 million. This increase was primarily attributable to the following:

Previous wording

Net cash provided by financing activities was $236.3 million for the six months ended June 30, 2026. Financing cash flows were primarily driven by $441.6 million of net proceeds from the Company’s May 2026 underwritten public offering of 1,725,000 shares of Class B common stock (including shares issued pursuant to the underwriters’ option).

Current wording

Net cash provided by financing activities was $234.6 million for the nine months ended September 30, 2026. Financing activities were primarily driven by $441.6 million of net proceeds from the Company's May 2026 underwritten public offering of 1,725,000 shares of Class B common stock. These proceeds were partially offset by the repayment of $197.5 million of outstanding borrowings under the Company's Credit and Security Agreement, dividend payments, and contingent consideration payments. The Company used a portion of the net proceeds from the offering to repay all outstanding borrowings under its Credit and Security Agreement and intends to use the remaining proceeds to fund the acquisition of the remaining 20% ownership interest in Enercon, pursue acquisition and partnership opportunities, and for general corporate purposes.

Previous wording

Cash and cash equivalents and accounts receivable, in the aggregate, comprised approximately 36.5% of total assets as of June 30, 2026, compared to 19.2% as of December 31, 2025. The Company’s current ratio was 4.5 to 1 as of June 30, 2026 compared to 3.0 to 1 as of December 31, 2025.

Current wording

Cash and cash equivalents and accounts receivable, in the aggregate, comprised approximately 37.4% of total assets as of September 30, 2026, compared with 19.2% as of December 31, 2025. The Company's current ratio was 2.6 to 1 as of September 30, 2026, compared with 3.0 to 1 as of December 31, 2025.

Previous wording

At June 30, 2026 and December 31, 2025, $36.3 million and $43.4 million, respectively (representing 12% and 75%, respectively), of cash and cash equivalents was held by foreign subsidiaries. The Company repatriated $11.8 million of funds from outside of the U.S. during the six months ended June 30, 2026. The Company continues to evaluate its global working capital and cash requirements and the potential tax costs associated with additional repatriations. The Company has not made a determination regarding additional repatriations to fund U.S. operations. If these funds were needed in the U.S., the Company could be required to incur U.S. state taxes and any applicable foreign withholding taxes in connection with repatriation.

Current wording

At September 30, 2026 and December 31, 2025, approximately $52.7 million and $43.4 million, respectively, of cash and cash equivalents was held by foreign subsidiaries, representing approximately 16% and 75%, respectively, of total cash and cash equivalents. During the nine months ended September 30, 2026, the Company repatriated $16.8 million of cash from foreign jurisdictions. The Company continues to evaluate its global working capital and liquidity requirements, as well as the potential tax consequences associated with future repatriations. The Company has not determined whether additional repatriations will be required to fund U.S. operations. If such funds were needed in the United States, the Company could incur U.S. state income taxes and applicable foreign withholding taxes in connection with their repatriation.

Previous wording

We expect foreseeable liquidity and capital resource requirements in the ordinary course to be met through existing cash and cash equivalents and anticipated cash flows from operations, as well as borrowings available under our revolving credit facility, if needed. Our material cash requirements arising in the normal course of business are outlined in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There were no material changes to our future cash requirements during the six months ended June 30, 2026.

Current wording

We expect foreseeable liquidity and capital resource requirements in the ordinary course to be met through existing cash and cash equivalents and anticipated cash flows from operations, as well as borrowings available under our revolving credit facility, if needed. Our material cash requirements arising in the normal course of business are outlined in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There were no material changes to our future cash requirements during the nine months ended September 30, 2026.