BELFA 8-K
Bel Fuse Inc /Nj (BELFA)
|
|
|
|
||
|
(State of incorporation)
|
(Commission File Number)
|
(I.R.S. Employer Identification No.)
|
|
|
||
|
(Address of principal executive offices)
|
(Zip Code)
|
|
Not Applicable
|
|
(Former Name or Former Address, if Changed Since Last Report)
|
|
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
|
Title of Each Class
|
Trading Symbol
|
Name of Exchange on Which Registered
|
||
|
|
|
|
||
|
|
|
|
|
●
|
Part I, Item 1. Business (solely to reflect changes regarding the organization of the Company’s reportable segments);
|
|
●
|
Part I, Item 1A. Risk Factors (solely to update segment references);
|
|
●
|
Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations; and
|
|
●
|
Part II, Item 8. Financial Statements and Supplementary Data (solely to reflect changes in the “Notes to Consolidated Financial Statements,” specifically “Note 1 – Description of Business and Summary of Significant Accounting Policies,” “Note 3 – Acquisition,” “Note 4 – Revenue,” “Note 5 – Goodwill and Other Intangible Assets,” and “Note 14 – Segments”).
|
|
23.1
|
|
|
99.1
|
Updates, where applicable, to Part I, Item 1. Business, Part I, Item 1A. Risk Factors, Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Part II, Item 8. Financial Statements and Supplementary Data, from Bel Fuse’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on February 24, 2026 |
|
101
|
Interactive Data Files (embedded within the Inline XBRL document).
|
|
104
|
Cover Page Interactive Data File (embedded within the Inline XBRL document).
|
|
Date: May 12, 2026
|
BEL FUSE INC.
|
|
(Registrant)
|
|
|
By:
|
/s/Farouq Tuweiq
|
|
Farouq Tuweiq
|
|
|
President and Chief Executive Officer
|
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have issued our reports for the year ended December 31, 2025, dated February 24, 2026 (except for Note 14 and the effects thereof, as to which the date is May 12, 2026), with respect to the consolidated financial statements and internal control over financial reporting, dated February 24, 2026, included in the Current Report of Bel Fuse Inc. on Form 8-K. We consent to the incorporation by reference of said reports in the Registration Statement of Bel Fuse Inc. on Form S-8 (File No. 333-239267).
/s/ GRANT THORNTON LLP
Edison, New Jersey
May 12, 2026
Exhibit 99.1
PART I
Item 1. Business
Bel Fuse Inc. designs, manufactures, and markets critical electronic components, systems and solutions for customers in aerospace, defense, industrial, and data-driven markets. Understanding that our customers face increasingly complex technical challenges, Bel delivers a comprehensive portfolio of solutions including power systems, high-reliability connectors and cable assemblies, circuit protection, and networking products that enable Original Equipment Manufacturers (OEMs) to bring their innovations to market. Bel partners closely with customers to deliver both customized and standard solutions tailored to their specific applications and performance requirements. With manufacturing facilities and technical support teams worldwide, Bel serves as a strategic partner to customers who require proven reliability in demanding end markets.
With more than 75 years in operation, Bel has reliably demonstrated the ability to participate in a variety of product areas across a global platform. The Company has a strong track record of technical innovation working with the engineering teams of market leaders. Bel has proven itself a valuable supplier to world-class companies by developing new products with cost effective solutions.
The Company was incorporated in 1949 and is organized under New Jersey law. Bel's principal executive offices are located at 300 Executive Drive, Suite 300, West Orange, New Jersey 07052, and Bel's telephone number is (201) 432-0463. The Company operates facilities in North America, Europe and the Middle East (referred to as the "EMEA" region throughout), and Asia and trades on the NASDAQ Global Select Market (ticker symbols BELFA and BELFB). For information regarding Bel's operating segments, see Note 14, "Segments", of the notes to our consolidated financial statements. Hereinafter, all references to "Note" will refer to the notes to our consolidated financial statements included in Part II, Item 8. "Financial Statements and Supplementary Data" of this Exhibit 99.1.
Acquisitions have played a critical role in the growth of Bel and the expansion of both our product portfolio and our customer base and continue to be an important element in our growth strategy. We frequently evaluate possible acquisition candidates that would expand our product and technology offerings to our customers and/or optimize our overall cost structure.
On November 14, 2024, the Company closed on the 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, and FF3 Holdings, L.P., for itself and as Sellers’ Representative (“FF3”), and each of the other seller parties signatory thereto (collectively with FF3, 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. The Enercon business is part of Bel’s Aerospace, Defense & Rugged Solutions group. 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. Pursuant to the transaction documents, Bel may acquire the remaining 20% stake in Enercon and has the current intention to so purchase such remaining interest by early 2027 in accordance with the terms and subject to the conditions of a shareholders’ agreement, which was also entered into on November 14, 2024. See Note 3, “Acquisition” for further details about the Enercon acquisition.
On February 1, 2023, Bel closed on an €8.0 million (approximately $8.8 million as of the February 2023 closing) noncontrolling (one-third) investment in innolectric AG ("innolectric"), a Germany-based business in the field of on-board charging for eMobility applications. This passive investment was intended to create a strategic alliance that is focused on Electric Vehicles (“EV”) on-board power electronics, and in particular next generation fast-charging technology. The innolectric investment has been part of Bel's Industrial Technology & Data Solutions group. See Note 2, “Investment and Impairment in Innolectric” for further information on the current status of the Company’s investment in innolectric.
On March 31, 2021, the Company completed the acquisition of EOS Power ("EOS") through a stock purchase agreement for $7.8 million, net of cash acquired, including a working capital adjustment. EOS, located in Mumbai, India, enhanced Bel's position related to certain industrial and medical markets historically served by EOS, with a strong line of high-power density and low-profile products with high convection ratings. In addition to new products and customers acquired, this acquisition diversified Bel's manufacturing footprint in Asia. The EOS business is part of Bel's Industrial Technology & Data Solutions group.
On January 8, 2021, the Company acquired rms Connectors, Inc. (“rms Connectors” or "rms"), from rms Company Inc., a division of Cretex Companies, Inc., for $9.0 million in cash, including a working capital adjustment. rms Connectors is a highly regarded connector manufacturer with over 30 years of experience producing harsh environment circular connectors used in a variety of military and aerospace applications. This acquisition complemented Bel's existing military and aerospace product portfolio and enabled us to expand key customer relationships within these end markets and leverage the combined manufacturing resources to improve our operational efficiency. Originally based in Coon Rapids, Minnesota, the rms Connectors business was relocated into Bel's existing facilities during 2021 and is part of Bel's Aerospace, Defense & Rugged Solutions group.
During the first quarter of 2026, Bel Fuse Inc. (the “Company”) implemented a change in its internal organizational and reporting structure to better align management reporting with customer end markets. As a result, effective March 31, 2026, the Company updated the reportable segment view used by the Company’s Chief Operating Decision Maker (“CODM”), the chief executive officer, to assess performance and allocate resources. The CODM has not changed.
Following this change, the Company has two reportable segments: (i) Aerospace, Defense & Rugged Solutions and (ii) Industrial Technology & Data Solutions. Prior period segment information has been recast to conform to the current period presentation. Accordingly, prior-year segment amounts have been recast for comparability to conform to the current period presentation.
The segment information in this Form 8-K has been recast to conform to the way we internally manage and monitor our business during fiscal year 2026. These changes primarily impacted Note 4 – “Revenue”, Note 5 – “Goodwill and Other Intangible Assets”, and Note 14 – “Segments”.
The Aerospace, Defense & Rugged Solutions segment primarily includes the Company’s legacy Connectivity Solutions business and Enercon operations. The Industrial Technology & Data Solutions segment primarily includes the Company’s legacy Power Solutions and Protection and Magnetic Solutions operations. These segment descriptions reflect how results are reviewed by the CODM.
Products
The Company primarily generates revenue through the sale of its products. Bel offers a broad array of product offerings, which are grouped as follows: Aerospace, Defense & Rugged Solutions (55% of net sales in 2025), and Industrial Technology & Data Solutions (45% of net sales in 2025). While there are key customers and end markets within each of the two reportable segments, there were no direct customers who accounted for more than 10% of our consolidated net sales in 2025. Our diverse product mix and customer base minimizes our dependence on any one customer or end market.
Aerospace, Defense & Rugged Solutions
Bel offers a comprehensive line of customized power supplies, networking solutions, and high speed and harsh environment copper and optical fiber connectors and integrated assemblies, which are utilized in a wide range of applications across multiple industries including commercial aerospace, military communications, defense, network infrastructure, structured building cabling and several industrial applications.
|
|
Product Line |
Function |
Applications |
Brands Sold Under |
| Aerospace, Defense & Rugged Solutions | Expanded Beam Fiber Optic Connectors, Cable Assemblies and Active Optical Devices (transceivers and media converters) |
Harsh-environment, high-reliability, flight-grade optical connectivity for high-speed communications. |
Military/aerospace, space, oil and gas well monitoring and exploration, broadcast, communications, RADAR. |
Stratos®, Fibreco® |
| Copper-based Connectors / Cable Assemblies-FQIS |
Harsh-environment, high-reliability connectivity and fuel quantity monitoring (FQIS). |
Avionics, smart munitions, communications, radar and various industrial equipment. |
Cinch® |
|
| RF Connectors, Cable Assemblies, Microwave Devices and Low Loss Cable |
Connectors and cable assemblies designed to provide connectivity within radio frequency (RF) applications. |
Military/aerospace, space, test and measurement, internet-of-things (IoT), 5G high-frequency and wireless communications. |
Johnson, Trompeter, Midwest MicrowaveTM, Semflex® |
|
| Ethernet, I/O, Industrial and Power Connectivity | RJ45, RJ11, M12, IP67 and USB connectivity for data/voice/video transmission. | Applications including routers, hubs, switches, peripheral device connectivity and patch panels; and emerging IoT applications. | Stewart Connector | |
| Military, Aerospace and Defense Products | Customized Power and Networking solutions designed to meet harsh environment standards. | Military, Aerospace and Defense applications including air, ground, sea, space and soldier. | Enercon, MilPower |
Industrial Technology & Data Solutions
Bel's Industrial Technology & Data Solutions products are primarily comprised of power supplies, circuit protection products, integrated connector modules (ICMs), power inductors and transformers which are primarily used in the Networking, Transportation, Consumer, Medical and Industrial markets. Bel's power conversion products include internal and external AC/DC power supplies, DC/DC converters and DC/AC inverters. Bel circuit protection products include a board offering of surface mount and through-hole level fuses as well as Polymeric PTC (Positive Temperature Coefficient) devices. The Company's ICM products integrate RJ45 connectors with discrete magnetic components to provide better performance and a more robust device that allows customers to substantially reduce board space and optimize performance. Power Transformers include standard and custom designs for use in a wide array of applications, including industrial instrumentation, alarm and security systems, motion control, elevators, and medical products.
|
|
Product Line |
Function |
Applications |
Brands Sold Under |
| Industrial Technology & Data Solutions | Front-End Power Supplies |
Provides the primary point of isolation between AC main line (input) and the low-voltage DC output that is used to power all electronics downstream. |
Servers, telecommunication, network and data storage equipment. |
Bel Power Solutions & Protection |
| Board-Mount Power Products |
These are designed to be mounted on a circuit board. These converters take input voltage and provide localized on-board power to low-voltage electronics. |
Telecommunication, networking and a broad range of industrial applications. |
Bel Power Solutions & Protection, MelcherTM, CUI |
|
| Industrial and Transportation Power Products |
Designed to be used in industrial equipment or on-board and off-board transportation applications for powering various AC and DC electronics, battery charging and power management. |
Rail, transportation, automation, test and measurement, medical and eMobility applications. |
Bel Power Solutions & Protection, MelcherTM, CUI, EOS |
|
| External Power Products | Standard and customizable desktop and wall plug adapters that convert AC main input voltages to a variety of DC output voltages. | Consumer and industrial devices and equipment. | CUI, EOS | |
| Circuit Protection |
Protects devices by preventing current in an electrical circuit from exceeding acceptable levels. |
Consumer electronics, power supplies, electric vehicles, EV chargers, battery charging and lighting. |
Bel Power Solutions & Protection |
|
|
Integrated Connector Modules (ICMs)
|
Condition, filter, and isolate the electronic signal to ensure accurate data/voice/video transmission and provide RJ45 and USB connectivity.
|
Network switches, routers, hubs, and PCs used in multi-speed Gigabit Ethernet, Power over Ethernet (PoE), PoE Plus and home networking applications.
|
Bel, TRP Connector
®, MagJack
®
|
|
|
Power Transformers
|
Safety isolation and distribution.
|
Power supplies, alarm, fire detection, and security systems, HVAC, lighting and medical equipment. Class 2, three phase, chassis mount, and PC mount designs available.
|
Signal
|
|
|
SMD Power Inductors & SMPS Transformers
|
A passive component that stores energy in a magnetic field. Widely used in analog electronic circuitry.
|
Switchmode power supplies, DC/DC converters, LED lighting, automotive and consumer electronics.
|
Signal
|
|
|
Discrete Components-Ethernet
|
Condition, filter, and isolate the electronic signals to ensure high speed Ethernet data transmission.
|
Network switches, routers, hubs, and PCs used in multi-speed Gigabit Ethernet and Power over Ethernet (PoE).
|
Bel
|
Sales and Marketing
We sell our products to customers throughout North America, Europe and Asia. Sales are made through one of three channels: strategic account managers or in some cases, regional sales managers, working directly with our customers; regional sales managers working with independent sales representative organizations; or authorized distributors. Bel's strategic account managers are assigned to handle major accounts requiring global coordination.
Independent sales representatives and authorized distributors are overseen by the Company's sales management personnel located throughout the world. As of December 31, 2025, we had a sales and support staff of approximately 212 people that supported a network of sales representative organizations and non-exclusive distributors. We have written agreements with all our sales representative organizations and most of our major distributors. These written agreements, terminable on short notice by either party, are standard in the industry.
Sales support functions have also been established and located in our international facilities to provide timely, efficient support for customers. This supplemental level of service, in addition to first-line sales support, enables us to be more responsive to customers' needs on a global level. Our marketing capabilities include product management which drives new product development, application engineering for technical support and marketing communications.
Market Factors
Competition
We operate in a variety of markets, all of which are highly competitive. There are numerous independent companies and divisions of major companies that manufacture products that are competitive with one or more of our products.
Our ability to compete is dependent upon several factors including product performance, quality, reliability, depth of product line, customer service, technological innovation, design, delivery time and price. Overall financial stability and global presence also give us a favorable position in relation to some of our competitors. Management intends to maintain a strong competitive posture in the markets we serve by continued expansion of our product lines and ongoing investment in research, development and manufacturing resources.
Trends in Market Demand
Product orders, or bookings, received during 2025 amounted to $732.9 million, a 75.8% increase from 2024. By reporting segment group, orders received for our Aerospace, Defense & Rugged Solutions group amounted to $406.9 million in 2025, a 80.5% increase from 2024, largely due to increased demand from our aerospace and defense customers. Orders received for our Industrial Technology & Data Solutions group were $326.0 million in 2025, 70.3% higher than in 2024, primarily as a result of increased demand from our networking customers.
Backlog of Orders
We typically manufacture products against firm orders and projected usage by customers. Cancellation and return arrangements are either negotiated by us on a transactional basis or contractually determined. We estimate the value of the backlog of orders as of January 31, 2026 to be approximately $452.2 million as compared with a backlog of $388.1 million as of January 31, 2025. Management estimates that approximately 80%-85% of the Company's backlog as of January 31, 2026 will be shipped by December 31, 2026. Factors that could cause the Company to fail to ship all such orders by year-end include unanticipated supply difficulties, changes in customer demand and new customer designs. Due to these factors, backlog may not be a reliable indicator of the timing of future sales.
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. The global capabilities and collaborative approach allow Bel to develop leading edge technological products that support highly complex and evolving markets such as defense, commercial aerospace, eMobility, cloud computing, and others. On occasion, we execute non-disclosure agreements with customers to help develop proprietary, next generation products intended for rapid deployment. We also sponsor membership in technical organizations that allow our engineers to participate in developing standards for emerging technologies. It is management's opinion that this participation is critical in establishing credibility and a reputable level of expertise in the marketplace, as well as positioning the Company as an industry leader in new product development.
R&D costs are expensed as incurred. Generally, R&D is performed internally for the benefit of the Company. R&D costs include salaries, building maintenance and utilities, rents, materials, administrative costs and miscellaneous other items.
Resources
Raw Materials and Sourcing
We have multiple suppliers for most of the raw materials that we purchase. Where possible, we have contractual agreements with suppliers to assure a continuing supply of critical components.
With respect to those items which are purchased from single sources, we believe that comparable items would be available in the event that there was a termination of our existing business relationship with any such supplier. While such a termination could produce a disruption in production, we believe that the termination of business with any one of our suppliers would not have a material adverse effect on our long-term operations. Actual experience could differ materially from this belief as a result of a number of factors, including the time required to locate an alternative supplier, and the nature of the demand for our products. Sharp increases in metal commodity prices, particularly Gold (Au), Silver (Ag) and Copper (Cu) over the past few years continue to impact cost structures and supplier pricing. Even though we may have more than one supplier for certain materials, it is possible that these materials may not be available to us in sufficient quantities or at the times desired by us. In the event that economic conditions have a negative impact on the financial condition of our suppliers, this may impact the availability and cost of our raw materials.
Intellectual Property
We have acquired or been granted a number of patents in the U.S., Europe and Asia and have additional patent applications pending relating to our products. Our U.S. design patents have a life of 15 years and our U.S. utility patents have a life of 20 years from filing of patent applications. Our existing patents expire on various dates through July 2041. It is management's opinion that the successful continuation and operation of our business does not depend upon the ownership of patents or the granting of pending patent applications, but upon the innovative skills, technical competence and marketing and managerial abilities of our personnel.
We utilize registered trademarks in the U.S., Europe and Asia to identify various products that we manufacture. The trademarks survive as long as they are in use and the registrations of these trademarks are renewed.
Government Contracts
We must comply with and are affected by laws and regulations relating to the award, administration, and performance of U.S. Government contracts. Government contract laws and regulations affect how we do business with our customers and, in some instances, impose added costs on our business. A violation of specific laws and regulations could result in the imposition of fines and penalties or the termination of our contracts or debarment from bidding on contracts. These fines and penalties could be imposed for failing to follow procurement integrity and bidding rules, employing improper billing practices or otherwise failing to follow cost accounting standards, receiving or paying kickbacks, or filing false claims. We have been, and expect to continue to be, subjected to audits and investigations by government agencies. The failure to comply with the terms of our government contracts could harm our business reputation. It could also result in our progress payments being withheld.
In some instances, these laws and regulations impose terms or rights that are more favorable to the government than those typically available to commercial parties in negotiated transactions. For example, the U.S. Government may terminate any of our government contracts and, in general, subcontracts, at its convenience as well as for default based on performance. Upon termination for convenience of a fixed-price type contract, we normally are entitled to receive the purchase price for delivered items, reimbursement for allowable costs for work-in-process, and an allowance for profit on work actually completed on the contract or adjustment for loss if completion of performance would have resulted in a loss. Upon termination for convenience of a Federal Government cost reimbursement contract, we normally are entitled to reimbursement of allowable costs plus a portion of the fee. Such allowable costs would normally include our cost to terminate agreements with our suppliers and subcontractors. The amount of the fee recovered, if any, is related to the portion of the work accomplished prior to termination and is determined by negotiation.
Seasonality
In the PRC, the availability of labor is cyclical and is significantly affected by the migration of workers in relation to the annual Lunar New Year holiday. Each year following the Lunar New Year holiday, we must assess the worker return rate and whether it is adequate to meet the needs of current demand from our customers. Accordingly, we must continually recruit and train new workers to replace those lost to attrition each year and to address peaks in demand that may occur from time to time. This temporary setback in production has historically resulted in our first quarter sales being the lowest sales quarter of the year. Further, recruiting and training efforts and related inefficiencies, as well as overtime required to meet demand, can add volatility to the costs incurred by the Company for labor in the PRC, primarily during the first quarter of the year.
Government Regulations
The Company is subject to various government regulations in the United States as well as various jurisdictions where it operates. These regulations cover several diverse areas including trade compliance, anti-bribery, anti-corruption, money laundering, and data and privacy protection. Regulatory or government authorities where the Company operates may have enforcement powers that can subject the company to legal penalties or other measures and can impose changes or conditions in the way it conducts business.
Human Capital Resources, Strategy and Management
At Bel, our values guide everything we do. We are committed to the highest standards of ethical and legal conduct and have created an environment where open and honest communication is the expectation, not the exception. Failing to do so puts Bel’s name, reputation for integrity and business at risk. We hold all employees of Bel (our associates) to this standard and offer the same in return. Our code of ethics was created to ensure that our associates, officers, directors, partners, contractors, and suppliers follow our commitment to customer satisfaction in accordance with ethical and legal standards, guided by the basic, unchanging principle of integrity.
Our Human Capital Strategy is built around four areas:
Extraordinary Performance
Our associates are a critical driver of Bel’s global business results. On December 31, 2025, Bel employed approximately 4,964 associates, almost all of which are full-time, across 15 countries, with 32% located within North America. Outside of the United States, our largest employee populations were located within the PRC, Mexico, Slovakia, the Dominican Republic, Israel, India and the United Kingdom. We regularly monitor various key performance indicators around the key human capital priorities of attracting, retaining, and engaging our global talent. In addition, we enable the execution of our strategic priorities by providing all associates with access to training and development opportunities to improve critical skill sets.
Great Associates
Bel is committed to fostering an inclusive environment that respects and encourages individual differences, diversity of thought, and talent. We strive to create a workplace where associates feel that their contributions are welcomed and valued, allowing them to fully utilize their talents while achieving personal satisfaction in their respective roles within Bel.
Across the organization, we invest in our people to learn in a variety of ways - on the job, in the classroom, through self-directed learning, and through leadership programs. We have expanded our learning management system to make new content and training available to our associates. The Company has advanced its leadership development programs and continues to enhance internship and apprenticeship programs to develop new talent.
Health and Safety
Bel offers a variety of programs globally to protect the health and safety of our associates. While we maintain targets for year-over-year reduction of the total recordable incident rate and serious injuries, our goal is always zero.
Culture
In an increasingly competitive global marketplace, Bel succeeds when we attract and retain the best talent in the communities in which we operate, without regard to race, sex, religion, national origin, disability status, veteran status, or any other protected category. We support this commitment by participating in networking and community events and actively recruiting a broad group of qualified candidates.
As a global leader in delivering reliable solutions, Bel has signed a Statement of Support Program declaration to show support for National Guard and Reserve member associates coordinated by the Department of Defense's Employer Support of the Guard and Reserve (ESGR) program. The intent of the program is to increase employer support by encouraging employers to act as advocates for associate participation in the military.
The global human resources team members are strategically placed, primarily in manufacturing facilities, to provide support to all our associates. The mission of human resources is to attract, retain and engage the best people. We create a positive work environment where associates can make a difference.
As a company that has been in business for over 75 years, Bel understands the importance of trust, integrity and accountability of all levels of the organization. Our policies, practices and priorities are continually reviewed to align with the best interests of our associates, shareholders and other stakeholders.
Environmental, Social and Governance (“ESG”) Matters
Bel is committed to creating a better tomorrow by understanding how our actions impact the world around us. We aim to accomplish this by making tangible steps, big and small, to invest in our communities, to seek to minimize environmental impact and to promote alignment of interest among stakeholders. As an organization that thrives on learning and continuous improvement, Bel welcomes and embraces change. Over the last few years, we have worked to drive continuous improvements in these areas. Oversight of Bel’s compliance with government-mandated ESG disclosures and reporting requirements and other internal initiatives starts at the Board level, through its Nominating and ESG Committee. Bel also has an internal ESG Committee whose purpose is to support the Company’s ongoing commitment to ESG matters including environmental stewardship, health and safety, corporate social responsibility, corporate governance, sustainability, and other related issues of significance to the Company. Bel’s internal ESG Committee provides updates to either the Nominating and ESG Committee or to the full Board on a quarterly basis.
Environmental
At Bel, we understand the impact of climate change upon so many aspects of our lives and our future, and we are committed to reducing environmental impact for a more sustainable tomorrow. We consistently look for alternatives and approaches to consider in Bel’s business and strategies at multiple levels, from improving the efficiency ratings of our products and factories to better managing our consumption habits of electricity and water.
Bel has measured the impact of its operations on the environment and has utilized these measurements to establish reduction goals and related initiatives throughout the global organization. Today we have 15 manufacturing facilities of various sizes and five of them are ISO 14001 certified and represent 63% of our manufacturing footprint. These five sites have been measuring their consumption levels of natural gas, electricity and water and have targets in place for reducing consumption and waste and improving recycling efforts. For the rest of our manufacturing sites, we intend to follow an approach comparable to the template laid out with these five as we begin the process of better understanding our impact.
Social
Associates are the cornerstone of our business and key to our success. At Bel, we believe in the need for diversity and inclusion that reflects the communities in which we work and live. Associates are encouraged to bring with them their unique perspectives, opinions and experiences as they work for the betterment of Bel, its customers and the locations in which we operate. Bel recognizes its role in the global community and giving back is a priority. From coaching their local sports team to raising funds for local charities of choice, Bel supports and encourages our associates’ participation in these types of activities.
2025 Charitable Contribution Program:
Bel maintains a Company-wide Charitable Contribution Program to ensure consistency and drive our corporate values across the organization. The social program is also in alignment with our Core Value of Community Engagement and directly reflects the ambitions of our ESG initiative to support the global communities within which we operate. In 2025, the program resulted in contributions of more than $131,000 to 54 local charities across 11 countries. There was a matching program for the organizations selected and associates who donated. In addition, associates volunteered 7,900 hours to support their local communities, an increase from the 6,007 volunteer hours in 2024.
Governance
As a company that has been in business for more than 75 years, Bel understands the importance of trust, integrity and accountability at all levels of the organization. Recent additions to our Board and executive management team have brought greater diversity and new perspectives to Bel. We intend that our policies, practices and priorities will be periodically and continually reviewed as appropriate to better align with the best interests of our shareholders, associates and other stakeholders.
In addition to the Board-level ESG oversight, the Company adheres to Bel’s Corporate Governance Guidelines which are available at https://ir.belfuse.com/corporate-governance. These guidelines, which are designed to enhance the Company’s corporate governance, serve as a framework within which the Board will conduct its business, subject to applicable laws, regulations, listing requirements, and the Company’s organizational documents and Board committee charters.
Available Information
We maintain a website at www.belfuse.com where we make available free of charge the proxy statements, press releases, registration statements and reports on Forms 3, 4, 5, 8-K, 10-K and 10-Q, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act that we (and in the case of Section 16 reports, our insiders) file with the SEC. These forms are made available as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. Press releases are also issued via electronic transmission to provide access to our financial and product news, and we provide notification of and access to voice and internet broadcasts of our quarterly and annual results. Our website also includes investor presentations and corporate governance materials. The information contained on our website is not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC.
PART II
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The information in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A") should be read in conjunction with the Company's consolidated financial statements and the notes related thereto. The discussion of results, causes and trends should not be construed to imply any conclusion that such results, causes or trends will necessarily continue in the future. See "Cautionary Notice Regarding Forward-Looking Information" in the accompanying Current Report on Form 8-K for further information. Also, when we cross reference to a "Note," we are referring to our "Notes to Consolidated Financial Statements," unless the context indicates otherwise. All amounts and percentages are approximate due to rounding.
Overview
Our Company
We design, manufacture and market critical electronic components, systems and solutions for customers in the aerospace, defense, industrial, and data-driven markets. Understanding that our customers face increasingly complex technical challenges, Bel delivers a comprehensive portfolio of solutions including power systems, high-reliability connectors and cable assemblies, circuit protection, and networking products that enable Original Equipment Manufacturers (OEMs) to bring their innovations to market. Bel partners closely with customers to deliver both customized and standard solutions tailored to their specific applications and performance requirements. With manufacturing facilities and technical support teams worldwide, Bel serves as a strategic partner to customers who require proven reliability in demanding end markets.
We operate through two segments. In 2025, 55% of the Company's revenues were derived from our Aerospace, Defense & Rugged Solutions ("ADRS") segment and 45% from our Industrial Technology & Data Solutions ("ITDS") operating segment.
During the first quarter of 2026, Bel Fuse Inc. (the “Company”) implemented a change in its internal organizational and reporting structure to better align management reporting with customer end markets. As a result, effective March 31, 2026, the Company updated the reportable segment view used by the Company’s Chief Operating Decision Maker (“CODM”), the chief executive officer, to assess performance and allocate resources. The CODM has not changed.
Following this change, the Company has two reportable segments: (i) Aerospace, Defense & Rugged Solutions and (ii) Industrial Technology & Data Solutions. Prior period segment information has been recast to conform to the current period presentation. Accordingly, prior-year segment amounts have been recast for comparability to conform to the current period presentation.
The segment information in this Form 8-K has been recast to conform to the way we internally manage and monitor our business during fiscal year 2026. These changes primarily impacted Note 4 – “Revenue”, Note 5 – “Goodwill and Other Intangible Assets”, and Note 14 – “Segments”.
The Aerospace, Defense & Rugged Solutions segment primarily includes the Company’s legacy Connectivity Solutions business and Enercon operations. The Industrial Technology & Data Solutions segment primarily includes the Company’s legacy Power Solutions and Protection and Magnetic Solutions operations. These segment descriptions reflect how results are reviewed by the CODM.
Our operating expenses are driven principally by the cost of labor where the factories that Bel uses are located, the cost of the materials that we use and our ability to effectively and efficiently manage overhead costs. As labor and material costs vary by product line and region, any significant shift in product mix can have an associated impact on our costs of sales. Costs are recorded as incurred for all products manufactured. Such amounts are determined based upon the estimated stage of production and include labor cost and fringes and related allocations of factory overhead. Our products are manufactured at various facilities in the U.S., Mexico, Israel, India, the Dominican Republic, the United Kingdom, Slovakia and the PRC.
We have little visibility into the ordering habits of our customers and we can be subjected to large and unpredictable variations in demand for our products. Accordingly, we must continually recruit and train new workers to replace those lost to attrition and be able to address peaks in demand that may occur from time to time. These recruiting and training efforts and related inefficiencies, and overtime required to meet any increase in demand, can add volatility to the labor costs incurred by us.
Key Factors Affecting our Business
The Company believes the key factors affecting Bel's 2025 and/or future results include the following:
| ● |
Acquisition of Enercon - In November 2024, Bel acquired an 80% stake in Enercon. As a result, we benefited from a full year of Enercon's sales in 2025 within our ADRS segment. 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, and its sales and results of operations may vary depending on government spending on defense. Enercon's sales have been reflected in the accompanying consolidated statements of operations since November 1, 2024 and amounted to $136.6 million during the year ended December 31, 2025 and $20.8 million during the year ended December 31, 2024. |
| ● | Backlog – Our backlog of orders totaled $439.1 million at December 31, 2025, representing an increase of $57.5 million, or 15.1%, from December 31, 2024. From 2024 to the 2025 year-end, the backlog within our ADRS segment increased by 16.6%, due to an increase in demand. Our ITDS segment backlog increased by 12.8%, primarily due to increased order volume from our networking customers. |
| ● | Product Mix – Material and labor costs vary by product line and any significant shift in product mix between higher- and lower-margin product lines will have a corresponding impact on the Company’s gross margin percentage. In general, our products which serve the ADRS segment have historically had the highest contribution margins due to the harsh environment, high-reliability end applications for these products. Our networking products that serve the ITDS segment have higher input costs and are impacted to a greater extent by changes in material costs and by minimum- and market-based wage increases in the PRC and fluctuations in foreign exchange rates between the U.S. dollar and the Chinese renminbi. Fluctuations in sales volume among our product groups will have a corresponding impact on Bel's profit margins. |
| ● | Pricing and Availability of Materials – Pricing for commodities with Gold (Au), Silver (Ag), and Copper (Cu), is increasing as cost of these metals continue to rise to historical highs. Lead-times for certain integrated circuits (ICs) have increased we believe primarily driven by AI and the infrastructure necessary to support this technology. Regulatory changes including but not limited to trade restrictions affecting suppliers in the PRC have previously and could in future disrupt our supply chain, leading to limited access to certain parts and suppliers, increased costs, shortages, or other adverse impacts on our business and operating results. Additionally, tariffs imposed by the U.S. or foreign governments on imports and exports could result in reduced margins or increased prices, potentially decreasing customer demand. |
|
●
|
Global Tariffs – On April 5, 2025, the Trump Administration enacted reciprocal tariffs on U.S. imports from a number of countries in which Bel’s manufacturing sites and/or suppliers are located. To the extent all of these new tariffs were applicable and in force, based on information available and our sales patterns as of February 2025, our most recent estimates indicated that approximately 25% of our consolidated global sales had been subject to these recently-enacted U.S. tariffs. On February 20, 2026, the Supreme Court of the United States issued its decision in Learning Resources, Inc. v. Trump, striking down tariffs previously enacted by the Administration under the International Emergency Economic Powers Act (“IEEPA”) as invalid, and holding that IEEPA does not authorize the President to impose tariffs. However, the full impact and implications of the Court’s decision are not immediately clear amidst the rapidly-evolving regulatory landscape and the arena of international trade, and there remains great uncertainty as to what responses will emerge in light of the Court’s decision, including with respect to tariffs, international trade agreements, and international trade generally; Congress has the authority to codify tariffs in statute, and the Administration could act to impose duties or alternative tariffs under authority delegated by other laws. Imports into the U.S. from Mexico are currently exempt from tariffs as our products fall within the scope of the USMCA as presently in force. While global tariffs did not have a material financial impact on our full year 2025 financial results, we continue to closely monitor the evolving tariff landscape and are assessing possible alternatives aimed at potentially mitigating the impact of tariffs on Bel and our customers. The imposition of tariffs on our U.S. imports could result in reduced demand for our products and/or higher material costs. Our future sales and/or gross margins could be impacted as a result.
|
| ● | Labor Costs – Labor costs as a percentage of sales were relatively stable from 2025 to 2024, decreasing just slightly to 7.7% of sales in 2025 from 7.8% of sales in 2024. During 2025, minimum wage increases were enacted in Slovakia, the PRC, the Dominican Republic, and Mexico, which increased our annual labor costs by approximately $1.8 million in the aggregate. While the impact of these increases has been partially mitigated by higher consolidated revenues to date, these and any future wage increases are expected to exert upward pressure on labor costs and adversely affect profit margins. Labor costs as a percentage of sales fluctuate based on product mix. Labor costs in the PRC, Mexico, and Israel are primarily denominated in local currencies. Accordingly, significant fluctuations in exchange rates versus the U.S. dollar may materially impact our labor costs. By segment, the ADRS segment is most exposed to fluctuations in the exchange rate of the Israeli shekel and Mexican peso relative to the U.S. dollar and the ITDS segment is most exposed to fluctuations in the exchange rates of the Chinese renminbi relative to the U.S. dollar. In addition to foreign currency exchange rate exposure, our labor costs are subject to government-regulated minimum wage increases in the countries in which we operate. |
| ● | Inflationary Pressures – Inflationary pressures could result in higher input costs, including those related to our raw materials, labor, freight, utilities, healthcare and other expenses. Our future operating results will depend, in part, on our continued ability to manage these fluctuations through pricing actions, cost savings initiatives and sourcing decisions. |
| ● | Restructuring – In late 2025, we initiated a restructuring initiative within our ITDS segment related to the transition of manufacturing from Bel's Pingguo, PRC facility to an outside subcontractor (the "Pingguo initiative"). In connection with the Pingguo initiative, we incurred $1.6 million of restructuring costs during the year ended December 31, 2025. We will continue to review our operations to optimize our business, which may result in restructuring costs being recognized in future periods. |
| ● | Impact of Foreign Currency – During 2025, labor and overhead costs increased by $1.3 million compared to 2024, primarily due to unfavorable foreign exchange movements involving the Israeli shekel, Euro, and Chinese renminbi. These increases were partially offset by favorable fluctuations in the Mexican peso and Indian rupee relative to the prior year period. As further detailed in the section titled "Inflation and Foreign Currency Exchange," the Company recognized a foreign exchange revaluation gain of $10.1 million in 2025. This gain was primarily attributable to fluctuations in spot rates of certain currencies when translating balance sheet accounts at December 31, 2025, compared to December 31, 2024. As a U.S.-domiciled company, Bel translates its foreign currency-denominated financial results into U.S. dollars. Changes in the value of foreign currencies relative to the U.S. dollar, including the revaluation of certain intercompany and third-party transactions, may result in either favorable or unfavorable impacts to our consolidated statements of operations and cash flows. In 2025, the Company experienced unfavorable transactional foreign exchange impacts due to the appreciation of the Israeli shekel, Euro, and Chinese renminbi against the U.S. dollar. These impacts were partially offset by the depreciation of the Mexican peso against the U.S. dollar, compared to exchange rates in effect during 2024. Bel maintains significant manufacturing operations in the PRC, Slovakia, Mexico, and Israel, where labor and overhead costs are denominated in local currencies. As a result, the U.S. dollar equivalent costs of these operations were approximately $1.9 million higher in Israel, $0.5 million higher in Europe, and $0.1 million higher in the PRC, offset by $1.1 million lower costs in Mexico in 2025 versus 2024. The Company actively monitors changes in foreign currency exchange rates and has historically utilized foreign currency forward contracts. Bel may continue to implement additional hedging strategies and pricing actions to mitigate the impact of currency fluctuations on its consolidated operating results. |
| ● | Effective Tax Rate – The Company's effective tax rate will fluctuate based on the geographic region in which the pretax profits are earned. Of the jurisdictions in which the Company operates, the U.S. and Europe's tax rates are generally equivalent; and Asia has the lowest tax rates of the Company's three geographic regions. See Note 10, "Income Taxes", to the Company's Consolidated Financial Statements. |
Results of Operations - Summary by Operating Segment
Net Sales and Gross Margin
The Company's net sales and gross margin by operating segment for the years ended December 31, 2025, 2024 and 2023 were as follows (dollars in thousands):
| Years Ended December 31, |
||||||||||||||||||||||||
| Net Sales |
Gross Margin |
|||||||||||||||||||||||
| 2025 |
2024 |
2023 |
2025 |
2024 |
2023 |
|||||||||||||||||||
| Aerospace, Defense & Rugged Solutions |
$ | 368,862 | $ | 241,188 | $ | 210,572 | 41.0 | % | 37.5 | % | 34.2 | % | ||||||||||||
| Industrial Technology & Data Solutions |
306,593 | 293,604 | 429,241 | 37.5 | % | 38.5 | % | 33.8 | % | |||||||||||||||
| $ | 675,455 | $ | 534,792 | $ | 639,813 | 39.1 | % | 37.8 | % | 33.7 | % | |||||||||||||
2025 as Compared to 2024
Aerospace, Defense & Rugged Solutions (“ADRS”):
In ADRS, net sales increased by $127.7 million, or 52.9%, in 2025 compared to 2024. The increase was driven primarily by higher net sales in defense applications, which increased by $120.6 million, largely reflecting the incremental contribution from Enercon, which was acquired in November 2024. Of this increase, $115.8 million was attributable to Enercon. Net sales in commercial aerospace applications also increased by $20.5 million, or 27.6%, in 2025 compared to 2024. These increases were partially offset by lower net sales in rugged industrial applications, which decreased by $13.5 million, or 18.4%, in 2025 compared to 2024.
Gross margin increased to 41.0% in 2025, representing an improvement of 350 basis points from 37.5% in 2024. The improvement in gross margin was primarily attributable to an enhanced product mix, favorable exchange rate fluctuations between the U.S. dollar and Mexican peso, and operational efficiencies resulting from facility consolidations completed in 2024. The improvement was also driven by increased sales volume and a favorable product mix resulting from the Enercon acquisition, including a shift toward higher-margin aerospace and defense applications, which contributed positively to segment profitability. These benefits were partially offset by higher wage rates in Mexico.
Industrial Technology & Data Solutions (“ITDS”):
In ITDS, net sales increased by $13.0 million, or 4.4%, in 2025 compared to 2024. The increase was driven primarily by higher net sales in data solution applications, which increased by $30.6 million, or 24.6%, primarily due to higher demand in networking and datacenter applications. This increase was partially offset by lower net sales in transportation applications, which decreased by $16.2 million, or 28.4%, and a slight decrease in industrial applications, which decreased by $1.4 million, or 1.2%, in 2025 compared to 2024.
Gross margin was 37.5% in 2025, a decrease of 100 basis points from 38.5% in 2024, primarily due to unfavorable product mix and unfavorable foreign exchange rates between the Chinese renminbi and the U.S. dollar, partially offset by benefits from facility consolidation in the People’s Republic of China (PRC).
2024 as Compared to 2023
In ADRS, net sales increased by $30.6 million, or 14.5%, in 2024 compared to 2023. The increase was driven primarily by higher net sales in defense applications, which increased by $49.2 million, or 110.2%, reflecting the initial contribution from Enercon, which contributed $20.8 million of defense applications sales during the last two months of 2024 following its acquisition. Net sales in commercial aerospace applications also increased by $21.1 million, or 39.6%, in 2024 compared to 2023. These increases were partially offset by lower net sales in rugged industrial applications, which decreased by $39.7 million, or 35.2%, in 2024 compared to 2023.
Gross margin increased to 37.5% in 2024, representing an improvement of 330 basis points from 34.2% in 2023. Gross margin for 2024 was favorably impacted by the Enercon acquisition, pricing actions on certain contract renewals, operational efficiencies from the facility consolidations completed in 2023, and a favorable fluctuation in exchange rates between the U.S. dollar and Mexican peso in 2024 versus 2023. These factors were partially offset by higher wage rates in Mexico in 2024 as compared to 2023.
In ITDS, net sales decreased by $135.6 million, or 31.6%, in 2024 compared to 2023. The decline was primarily attributable to lower sales in data solutions applications, which decreased by $93.5 million, or 43.0%, year over year. Net sales in industrial applications decreased by $41.3 million, or 26.9%, while net sales in transportation applications decreased by $0.8 million, or 1.5%, during the same period.
Despite lower net sales, gross margin increased to 38.5% in 2024, up 470 basis points from 33.8% in 2023, driven by favorable product mix, profitability initiatives, a favorable exchange rate of the Chinese renminbi versus the U.S. dollar, and a lower volume of low-margin expedite fee revenue, partially offset by the impact of lower sales volume.
Cost of Sales
Cost of sales as a percentage of net sales for the years ended December 31, 2025, 2024 and 2023 consisted of the following:
| Years Ended |
||||||||||||
| December 31, |
||||||||||||
| 2025 |
2024 |
2023 |
||||||||||
| Material costs |
31.3 | % | 29.7 | % | 40.8 | % | ||||||
| Labor costs |
7.7 | % | 7.8 | % | 6.6 | % | ||||||
| Other expenses |
21.9 | % | 24.7 | % | 18.9 | % | ||||||
| Total cost of sales |
60.9 | % | 62.2 | % | 66.3 | % | ||||||
Material costs as a percentage of sales increased in 2025 compared to 2024, primarily due to a shift in production mix driven by higher sales of Power products, which typically have greater material content.
Labor costs as a percentage of sales declined slightly for full year 2025, relative to 2024. This decrease reflects increased sales and favorable exchange rate fluctuations in the Mexican peso versus the U.S. dollar, partially offset by higher minimum wage rates and unfavorable exchange rate fluctuations in the Israeli shekel versus the U.S. dollar.
Other expenses, including fixed costs such as support labor and benefits, depreciation and amortization, and facility costs (rent, utilities, insurance), remained relatively stable from a dollar amount perspective, aside from the inclusion of Enercon’s overhead expenses in 2025. However, as a percentage of sales, these expenses decreased in 2025 compared to 2024, benefiting from higher sales volumes during the year.
2024 as Compared to 2023
Material costs as a percentage of sales during 2024 were lower compared to 2023, due to a shift in product mix, the stabilization of raw material pricing, shorter lead times, and better procurement efforts. Labor costs in 2024 as a percentage of sales increased compared to 2023 due to lower sales volume, a shift in product mix in 2024 compared to the previous year, and the increase in statutory minimum wage rate in Mexico. This increase in labor cost was partially offset by lower labor costs in the PRC due to the favorable fluctuation in the Chinese renminbi exchange rate versus the U.S. dollar.
The other expenses noted in the table above include fixed cost items such as support labor and fringe, depreciation and amortization, and facility costs (i.e. rent, utilities, insurance). In total, these other expenses within cost of sales decreased by $1.5 million in 2024 as compared to 2023. As a percentage of sales, other expenses increased due to the lower sales volume in 2024 as compared to 2023.
Research and Development ("R&D")
R&D expenses were $30.9 million, $23.6 million and $22.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. The increase in R&D expenses in 2025 compared to 2024 was primarily due to the inclusion of a full year of Enercon-related salaries, benefits, product development costs, and other R&D expenses, whereas 2024 reflected only two months of Enercon’s R&D activity following its November 2024 acquisition. The increase noted in R&D expenses during 2024 compared to 2023 is largely due to higher salaries, benefits, and product development costs and R&D expense resulting from the November 2024 Enercon acquisition, which have been included in Bel's results since its acquisition date.
Selling, General and Administrative Expenses ("SG&A")
2025 as Compared to 2024
SG&A expenses were $125.8 million in 2025, compared to $110.6 million in 2024. The increase was primarily due to the incremental increase in Enercon’s SG&A expense by $20.8 million in 2025, versus inclusion of only two months of Enercon SG&A activity in 2024 after its acquisition. Excluding Enercon, legacy Bel SG&A expenses declined $5.6 million, driven by lower legal fees in 2025 compared to 2024.
2024 as Compared to 2023
SG&A expenses were $110.6 million in 2024 as compared with $99.1 million in 2023. The primary drivers for the increase in SG&A during 2024 related to acquisition-related costs within SG&A of $10.9 million in connection with the acquisition of Enercon, and $2.5 million of SG&A expenses attributable to the acquired business for the two months of 2024 under Bel ownership. Excluding these items related to Enercon, legacy-Bel SG&A expenses declined due to lower legal fees, as well as lower incentive compensation, commissions and business promotion expenses in 2024, as compared to 2023 due to the lower sales base in the 2024 period.
Restructuring Charges
In 2025, new restructuring charges totaled $2.4 million, primarily consisting of $1.6 million in severance and other costs associated to the transition of manufacturing from Bel's Pingguo, PRC facility to an outside subcontractor (the "Pingguo initiative"), and $0.4 million in charges related to the transition of certain manufacturing operations from Glen Rock, Pennsylvania to other existing Bel sites. These charges were partially offset by a $3.2 million reversal, resulting from a non-cash settlement of liabilities associated with the prior consolidation of two ITDS manufacturing sites into a single new facility.
The Company recorded $3.5 million of restructuring charges in 2024 largely in connection with the Glen Rock initiative and the Fuse initiative. In 2023, the Company recorded $10.1 million of restructuring charges largely in connection with its four facility consolidation projects in the U.S., the United Kingdom and the PRC.
Gain on Sale of Properties
In 2025, the Company recognized gains on sales of assets totaling $5.7 million, primarily attributable to the sale of multiple buildings in Zhongshan, PRC and the sale of property in Glen Rock, Pennsylvania. During 2023, the Company recorded a gain of $3.8 million related to the sale of one of its properties in Jersey City, New Jersey.
Interest Expense
2025 as Compared to 2024
Interest expense was $14.8 million in 2025, compared to $4.1 million in 2024. The increase in 2025 was primarily driven by higher outstanding borrowings under the Company's Credit Agreement, including amounts incurred to finance the Enercon acquisition and related costs. For further information on the Company's outstanding debt, refer to "Liquidity and Capital Resources" below and Note 11, "Debt." Additional details related to the Enercon acquisition are provided in Note 3, "Acquisition."
2024 as Compared to 2023
The Company incurred interest expense of $4.1 million in 2024 and $2.9 million in 2023 primarily due to its outstanding borrowings under the Company's Credit Agreement. The increase in interest expense during 2024 related to an increase in debt balance in the fourth quarter of 2024 due to Enercon acquisition (see Note 3, “Acquisition” for additional details). See "Liquidity and Capital Resources" and Note 11, "Debt" for further information on the Company's outstanding debt.
Interest Income
Interest income was $1.0 million for the year ended December 31, 2025, representing a decrease of $3.7 million, or 78.2%, compared to $4.8 million for the year ended December 31, 2024. The decrease was primarily attributable to lower average balances of U.S. Treasury Bills held during 2025 as compared to the prior year.
Interest income for the year ended December 31, 2024 increased to $4.8 million, compared to $1.7 million for the year ended December 31, 2023. The increase was primarily driven by higher levels of investment in U.S. Treasury Bills during 2024, which resulted in higher interest income relative to the prior year.
Impairment of Innolectric
On November 26, 2025, management concluded that an impairment charge was required in connection with the Company’s noncontrolling minority investment in innolectric, a Germany-based e-Mobility technology company, and related party notes receivable. Bel acquired a one-third (1/3) noncontrolling equity interest in innolectric in February 2023. Based on management’s assessment of the carrying value of the investment and the recoverability of the related party notes receivable, the Company recorded a pre-tax impairment charge of $13.1 million in the fourth quarter of 2025. This charge represents the full impairment of Bel’s investment in innolectric and the related notes receivable, and the Company does not expect any future recovery through the insolvency process. The impairment was determined based on indicators of impairment including the cessation of financial support from the majority owner, recent financial performance, changes in market conditions, and other relevant factors affecting innolectric’s business. This impairment was recorded in the ITDS segment.
Other Income (Expense), Net
2025 as Compared to 2024
Other income (expense), net was income of $10.9 million for the year ended December 31, 2025, compared to expense of $3.2 million for the year ended December 31, 2024, representing an increase of $14.1 million year-over-year. The increase in other income (expense), net for 2025 was primarily attributable to a foreign exchange gain of $10.8 million, which was an improvement of $12.8 million compared to the prior year. Additionally, gains from the Company's Supplemental Executive Retirement Plan ("SERP") investments increased by $0.1 million to $1.4 million, and stamp duty tax expense decreased by $2.0 million in 2025 as compared to 2024.
2024 as Compared to 2023
Other income (expense), net was a net expense of $3.2 million in 2024 compared to a net expense of $4.5 million in 2023. The net expense in 2024 was comprised of a foreign exchange loss of $1.9 million, $0.6 million of losses associated with Bel's investment in innolectric and $2.0 million of stamp duty fees related to Enercon; partially offset by a gain of $1.3 million related to the Company's SERP investments. The net expense in 2023 was comprised of a foreign exchange loss of $1.4 million, the loss on liquidation of a foreign subsidiary of $2.7 million, $0.8 million of losses associated with Bel's investment in innolectric and $0.8 million of other expense; partially offset by a gain of $1.2 million related to the Company's SERP investments.
Income Taxes
The Company’s effective tax rate will fluctuate based on the geographic regions in which the pretax profits are earned. Of the jurisdictions in which the Company operates, the U.S. and Europe’s tax rates are generally equivalent; and Asia has the lowest tax rates of the Company’s three geographic regions. See Note 10, “Income Taxes.”
2025 as Compared to 2024
The provision for income taxes increased by $8.3 million for the year ended December 31, 2025, compared to the year ended December 31, 2024. This increase was primarily attributable to a higher level of worldwide income before income taxes in 2025.
The Company’s effective tax rate increased to 22.0% for the year ended December 31, 2025, from 20.5% for the prior year. The increase in the effective tax rate was primarily driven by the following factors:
|
●
|
Changes in the mix of jurisdictional earnings: A greater proportion of earnings was generated in jurisdictions with higher statutory tax rates, resulting in an increased overall tax rate. | |
|
●
|
Higher U.S. taxes on foreign subsidiary income: There was an increase in taxes related to income from foreign subsidiaries that is subject to U.S. taxation under the provisions of the Tax Cuts and Jobs Act. | |
|
●
|
Decrease in tax benefit from reversal of uncertain tax positions: The tax benefit recognized in connection with the reversal of previously recorded uncertain tax positions declined, as certain statutes of limitations expired during the year. |
2024 as Compared to 2023
The provision for income taxes increased by $3.1 million for the year ended December 31, 2024, compared to the year ended December 31, 2023. The Company’s effective tax rate increased to 20.5% for the year ended December 31, 2024, from 11.4% for the prior year. The increase in the effective tax rate was primarily driven by the following factors:
|
●
|
Higher U.S. taxes resulting from an adjustment for non-deductible tax expenses in the prior year. | |
|
●
|
Higher foreign taxes resulting from valuation allowances on foreign net operating losses. | |
|
●
|
Decrease in tax benefit from reversal of uncertain tax positions: The tax benefit recognized in connection with the reversal of previously recorded uncertain tax positions declined, as certain statutes of limitations expired during the year. |
Other Tax Matters
The Company has a portion of its products manufactured on the mainland of the PRC where Bel is not subject to corporate income tax on manufacturing services provided by third parties. Hong Kong has a territorial tax system which imposes corporate income tax at a rate of 16.5% on income from activities solely conducted in Hong Kong.
The Company holds an offshore business license from the government of Macao. With this license, a Macao offshore company named Bel Fuse (Macao Commercial Offshore) Limited ("Bel Fuse Macao") has been established to handle the Company’s sales to third-party customers in Asia. Sales by this company primarily consist of products manufactured in the PRC. Bel Fuse Macao is subject to Macao's corporate tax rate of 12% on income from activities solely conducted in Macao.
Due to the practicality of determining the deferred taxes on outside basis differences in our investments in our foreign subsidiaries, management has not provided for deferred taxes on outside basis differences at December 31, 2025 and deemed that these basis differences will be indefinitely reinvested.
Inflation and Foreign Currency Exchange
During the past three years, we do not believe the effect of inflation was material to our consolidated financial position or our consolidated results of operations. We are exposed to market risk from changes in foreign currency exchange rates. Fluctuations of the U.S. dollar against other major currencies have not significantly affected our foreign operations as most sales continue to be denominated in U.S. dollars or currencies directly or indirectly linked to the U.S. dollar. Most significant expenses, including raw materials, labor and manufacturing expenses, are incurred primarily in U.S. dollars, Mexican pesos, the Chinese renminbi or the Israeli shekel, and to a lesser extent in British pounds, or Indian rupees. The Mexican peso depreciated by 5%, the Euro appreciated by 4%, the British pound appreciated by 3%, the Israeli shekel appreciated by 6% and the Chinese renminbi remained flat versus the U.S. dollar in 2025 compared to 2024. To the extent the renminbi, peso or shekel appreciate in future periods, it could result in the Company's incurring higher costs for most expenses incurred in the PRC, Mexico and Israel. The Company periodically uses foreign currency forward contracts to manage its short-term exposures to fluctuations in operational cash flows resulting from changes in foreign currency exchange rates as further described in Note 13, "Derivative Instruments and Hedging Activities." The Company's European entities, whose functional currencies are Euros and British pounds, enter into transactions which include sales that are denominated principally in Euros, British pounds and various other European currencies, and purchases that are denominated principally in U.S. dollars and British pounds. Such transactions, as well as those related to our multi-currency intercompany payable and receivable transactions, resulted in a net realized and unrealized currency exchange gain of $10.1 million in 2025, a loss of $1.9 million in 2024 and a loss of $1.4 million in 2023 which were included in other income (expense), net on the consolidated statements of operations. Translation of subsidiaries' foreign currency financial statements into U.S. dollars resulted in translation adjustments, net of taxes, of $2.5 million and ($5.5) million for the years ended December 31, 2025 and 2024, respectively, which are included in accumulated other comprehensive loss on the consolidated balance sheets.
Liquidity and Capital Resources
Our principal sources of liquidity include $57.8 million of cash and cash equivalents at December 31, 2025, cash provided by operating activities 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, purchases of common stock under our Repurchase Program, debt obligations and other long-term liabilities. Our liquidity may also be utilized to fund potential acquisitions in future periods, as well as potential future cash requirements related to the Enercon acquisition, including potential Earnout Payments 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. 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.
Cash Flow Summary
During the year ended December 31, 2025, the Company's cash and cash equivalents decreased by $10.5 million. This decrease was primarily due to the following:
| ● | net repayments of long-term debt of $90.0 million; | |
| ● | purchases of property, plant and equipment of $12.0 million; | |
| ● | dividend payments of $3.5 million; and | |
| ● |
deferred financing costs of $0.7 million; partially offset by
|
|
| ● net cash provided by operating activities of $80.6 million; | ||
| ● proceeds from the sale of property of $7.8 million; and | ||
|
|
● proceeds from held to maturity securities of $1.0 million; |
During the year ended December 31, 2025, the Company’s operating activities demonstrated continued growth and operational efficiency, supported by strong cash generation and disciplined working capital management. Accounts receivable increased by $8.6 million, primarily due to higher sales volume compared to 2024. Notably, the Company improved its collection efficiency, as reflected by a decrease in days sales outstanding (DSO) to 64 days at December 31, 2025, from 68 days at December 31, 2024. This improvement underscores enhanced cash conversion from sales and effective receivables management. Inventories increased by $2.4 million over the prior year, primarily due to higher sales volumes and increased purchasing activity to support customer demand. The Company’s inventory turns improved to 2.5 times in 2025 from 2.1 times in 2024, indicating more efficient inventory utilization and stronger demand for products. Other operating cash flow line items, such as changes in accounts payable and accrued expenses, contributed positively to liquidity, as the Company maintained disciplined expense management and optimized payment cycles.
During the year ended December 31, 2024, accounts receivable decreased by $6.8 million primarily due to the lower sales volume in 2024 as compared to 2023. Days sales outstanding (DSO) increased to 68 days at December 31, 2024 from 55 days at December 31, 2023. Inventories increased by $24.8 million from the December 31, 2023 level primarily due to the inclusion of Enercon's inventory balance at December 31, 2024 of $42.7 million. Inventory turns were 2.1 times for the year ended December 31, 2024 and 3.1 times for the year ended December 31, 2023. Given the nature of Enercon’s manufacturing process and low unit quantity per order, a higher value of inventory is kept on hand for longer periods of time, with Enercon’s inventory turns being 1.6 times, bringing Bel’s consolidated inventory turn level down substantially.
During the year ended December 31, 2023, the Company's cash and cash equivalents increased by $19.1 million. This increase was primarily due to cash provided by operating activities of $108.3 million, proceeds from the sale of property, plant and equipment of $6.0 million, proceeds from held to maturity securities of $19.9 million, and proceeds from the sale of our business in the Czech Republic of $5.1 million; partially offset by the purchases of held to maturity and marketable securities of $60.0 million, payments for our equity method investment in innolectric of $10.3 million, purchases of property, plant and equipment of $12.1 million, dividend payments of $3.5 million, and net repayments under our revolving credit line of $35.0 million. During the year ended December 31, 2023, accounts receivable decreased $22.5 million primarily due to the lower sales volume in the second half of 2023 as compared to the same period of 2022. DSO decreased to 55 days at December 31, 2023 from 58 days at December 31, 2022. Inventories decreased by $33.6 million from the December 31, 2022 level. Inventory turns were 3.1 times for the year ended December 31, 2023 and 2.7 times for the year ended December 31, 2022.
Cash and cash equivalents, held to maturity U.S. Treasury securities and accounts receivable comprised approximately 19.2% and 19.0% of the Company's total assets at December 31, 2025 and December 31, 2024, respectively. The Company's current ratio (i.e., the ratio of current assets to current liabilities) was 3.0 to 1 and 2.9 to 1 at December 31, 2025 and December 31, 2024, respectively. At December 31, 2025 and 2024, $43.4 million and $48.4 million, respectively (or 75% and 71%, respectively), of cash and cash equivalents was held by foreign subsidiaries of the Company. During 2025, the Company repatriated $26.0 million of funds from outside of the U.S., with minimal incremental tax liability. We continue to analyze our global working capital and cash requirements and the potential tax liabilities attributable to further repatriation, and we have yet to make any further determination regarding repatriation of funds from outside the U.S. to fund the Company's U.S. operations in the future. In the event these funds were needed for Bel's U.S. operations, the Company would be required to accrue and pay U.S. state taxes and any applicable foreign withholding taxes to repatriate these funds.
Future Cash Requirements
The Company expects foreseeable liquidity and capital resource requirements to be met through its existing cash and cash equivalents, and anticipated cash flows from operations, as well as borrowings available under its revolving credit facility, if needed. The Company's material cash requirements arising in the normal course of business primarily include:
Debt Obligations and Interest Payments - The Company had $197.5 million outstanding under its revolving credit facility at December 31, 2025, as further described below and in Note 11, "Debt." There were no mandatory principal payments due on the credit facility borrowings during 2025. The current balance of $197.5 million is due upon expiration of the credit facility on September 1, 2028. Anticipated interest payments due amount to $26.8 million, of which $10.0 million is expected to be paid in 2026 based on our debt balance and interest rate in place at December 31, 2025.
Lease Obligations - 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. As of December 31, 2025, the Company was contractually obligated to pay future operating lease payments of $26.9 million, of which $9.2 million is expected to be paid in 2026, and future financing lease obligations of $1.3 million, of which $0.5 million is expected to be paid in 2026. See Note 18, "Leases," for further information.
Purchase Obligations - 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 may incur penalties if an order is cancelled. The Company had outstanding purchase orders related to raw materials in the amount of $81.5 million at December 31, 2025, of which $79.5 million is expected to be paid in 2026. The Company also had outstanding purchase orders related to capital expenditures which totaled $2.0 million at December 31, 2025, of which $1.4 million is expected to be paid in 2026.
Pension Benefit Obligations - As further described in Note 15, "Retirement Fund and Profit Sharing Plan", the Company maintains a Supplemental Executive Retirement Plan ("SERP"). At December 31, 2025, estimated future obligations under the plan amounted to $18.9 million. It is expected that the Company will pay $1.1 million in benefit payments in connection with the SERP during 2026. Included in other assets at December 31, 2025 is the cash surrender value of company-owned life insurance and marketable securities held in a rabbi trust with an aggregate value of $18.4 million, which has been designated by the Company to be utilized to fund the Company's SERP obligations.
Dividends - The Company has historically paid quarterly dividends on its two classes of common stock, which amounted to $3.5 million in each of 2025 and 2024. Consistent with the dividend rates declared in prior years, Bel's Board of Directors declared dividends on October 31, 2025 and again on February 17, 2026 on each of our two classes of common stock. These two quarterly payments, the first made in January 2026 and the second scheduled for later in the first half of 2026, comprise a total anticipated amount of $1.7 million.
Share Repurchase Program - In February 2024, Bel's Board of Directors authorized the repurchase of up to $25 million of the Company's common stock. The Repurchase Program does not obligate the Company to repurchase any dollar amount or number of shares, and the Repurchase Program may be suspended or terminated at any time. The timing and actual number of shares repurchased will depend on a variety of factors including price, market conditions, corporate and regulatory requirements and the consideration of other uses of cash including other investment opportunities. At December 31, 2025, the Company had an aggregate amount of $9.0 million of authorized repurchases under the program that had not yet been executed upon.
Tax Payments - At December 31, 2025, we had liabilities for unrecognized tax benefits and related interest and penalties of $17.5 million, all of which is included in other liabilities on our consolidated balance sheet. At December 31, 2025, we cannot reasonably estimate the future period or periods of cash settlement of these liabilities. See Note 10, "Income Taxes", for further discussion.
In addition to its cash requirements arising in the normal course of business described above, the Company has potential future cash requirements related to its acquisition of Enercon, whereby the Company has recorded earnout liabilities having a fair value as of December 31, 2025 in the amount of $6.6 million that would be paid in early 2026 and early 2027 in the event certain financial thresholds are achieved by the acquired business based on the Purchase Agreement provision which provides for potential earnout payments of up to $5.0 million for each of the fiscal 2025 and fiscal 2026 earnout periods subject to the achievement of the financial thresholds. Further, there are put-call options associated with the redeemable noncontrolling interest in early 2027. As described elsewhere in this Exhibit 99.1, we have the current intention to purchase the remaining 20% interest in Enercon by early 2027 in accordance with the terms and subject to the conditions of the shareholders' agreement. At December 31, 2025, the redemption value related to the redeemable noncontrolling interest was $93.2 million. See Note 3, "Acquisition" and Note 6, "Fair Value Measurements" for further information.
Contractual Obligations
The following table sets forth at December 31, 2025 the amounts of payments due under specific types of contractual obligations, aggregated by category of contractual obligation, for the time periods described below.
| Payments due by period (dollars in thousands) |
||||||||||||||||||||
| Contractual Obligations |
Total |
Less than 1 year |
1-3 years |
3-5 years |
More than 5 years |
|||||||||||||||
| Long-term debt obligations(1) |
$ | 197,500 | $ | - | $ | 197,500 | $ | - | $ | - | ||||||||||
| Interest payments due on long-term debt(2) |
26,798 | 10,032 | 16,766 | - | - | |||||||||||||||
| Capital expenditure obligations |
1,980 | 1,390 | 590 | - | - | |||||||||||||||
| Operating leases(3) |
26,945 | 9,203 | 10,894 | 4,414 | 2,434 | |||||||||||||||
| Raw material purchase obligations |
81,503 | 79,513 | 1,990 | - | - | |||||||||||||||
| First quarter 2026 quarterly cash dividend declared |
880 | 880 | - | - | - | |||||||||||||||
| Total |
$ | 335,606 | $ | 101,018 | $ | 227,740 | $ | 4,414 | $ | 2,434 | ||||||||||
| (1) |
Represents the principal amount of the debt required to be repaid in each period. |
|
| (2) |
Includes interest payments required under our CSA related to our revolver balance. The interest rate in place under our Credit and Security Agreement on December 31, 2025 was utilized and this calculation assumes obligations are repaid when due. |
| (3) |
Represents estimated future minimum annual rental commitments primarily under non-cancelable real and personal property leases as of December 31, 2025. |
Critical Accounting Estimates
The Company's consolidated financial statements include certain amounts that are based on management's best estimates and judgments. The Company bases its estimates on historical experience and on various other assumptions, including in some cases future projections, that are believed to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Different assumptions and judgments could change the estimates used in the preparation of the consolidated financial statements, which, in turn, could change the results from those reported. Management evaluates its estimates, assumptions and judgments on an ongoing basis.
Based on the above, we have determined that our most critical accounting estimates are those related to business combinations, inventory valuation, goodwill and other indefinite-lived intangible assets, and those related to our pension benefit obligations.
Business Combinations
In a business combination, we allocate the fair value of purchase price consideration to the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree based on their estimated fair values. The excess of the fair value of purchase price consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customers or earned through the use of acquired trademarks, estimated royalty rates, acquired technology, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
Inventory Valuation
Inventories consist of raw materials and purchased components and are stated at the lower of cost and net realizable value. Material costs are principally determined by standard cost or the weighted moving average method, both of which approximate actual cost. The Company reduces the carrying value of its inventory for estimated obsolescence or unmarketable inventory by an amount equal to the difference between the cost of inventory and the estimated market value based on the aforementioned assumptions. Our reserve calculations are based on historical experience related to slow-moving inventory in addition to specific known concerns in the case of products going end-of-life or customer cancellations. As of December 31, 2025 and 2024, the Company had reserves for excess or obsolete inventory of $18.0 million and $14.5 million, respectively. In the event of a sudden decrease in demand for our products, or a higher incidence of inventory obsolescence, the Company could be required to increase its inventory reserve, which would have an unfavorable impact on our gross margin.
Goodwill
We use a fair value approach to test goodwill for impairment. We must recognize a non-cash impairment charge for the amount, if any, by which the carrying amount of goodwill exceeds its implied fair value. We derive an estimate of fair values for each of our reporting units using a combination of an income approach and an appropriate market approach, each based on an applicable weighting. We assess the applicable weighting based on such factors as current market conditions and the quality and reliability of the data. Absent an indication of fair value from a potential buyer or similar specific transactions, we believe that the use of these methods provides a reasonable estimate of a reporting unit's fair value.
Fair value computed by these methods is arrived at using a number of factors, including projected future operating results, anticipated future cash flows, effective income tax rates, comparable marketplace data within a consistent industry grouping, and the cost of capital. There are inherent uncertainties, however, related to these factors and to our judgment in applying them to this analysis. Nonetheless, we believe that the combination of these methods provides a reasonable approach to estimate the fair value of our reporting units. Assumptions for sales, net earnings and cash flows for each reporting unit were consistent among these methods.
Income Approach Used to Determine Fair Values
The income approach is based upon the present value of expected cash flows. Expected cash flows are converted to present value using factors that consider the timing and risk of the future cash flows. The estimate of cash flows used is prepared on an unleveraged debt-free basis. We use a discount rate that reflects a market-derived weighted average cost of capital. We believe that this approach is appropriate because it provides a fair value estimate based upon the reporting unit's expected long-term operating and cash flow performance. The projections are based upon our best estimates of projected economic and market conditions over the related period including growth rates, estimates of future expected changes in operating margins and cash expenditures. Other significant estimates and assumptions include terminal value long-term growth rates, provisions for income taxes, future capital expenditures and changes in future cashless, debt-free working capital. We applied a combined weighting of 75% to the income approach when determining the fair value of our reporting units.
Market Approach Used to Determine Fair Values
The market approach estimates the fair value of the reporting unit by applying multiples of operating performance measures to the reporting unit's operating performance (the "Guideline Publicly Traded Company Method"). These multiples are derived from comparable publicly traded companies with similar investment characteristics to the reporting unit, and such comparables are reviewed and updated as needed annually. We believe that this approach is appropriate because it provides a fair value estimate using multiples from entities with operations and economic characteristics comparable to our reporting units and the Company as a whole. The key estimates and assumptions that are used to determine fair value under this market approach include current and forward 12-month operating performance results and the selection of the relevant multiples to be applied. Under the Guideline Publicly Traded Company Method, a control premium, or an amount that a buyer is usually willing to pay over the current market price of a publicly traded company, is applied to the calculated equity values to adjust the public trading value upward for a 100% ownership interest, where applicable.
In order to assess the reasonableness of the calculated fair values of our reporting units, we also compare the sum of the reporting units' fair values to our market capitalization and calculate an implied control premium (the excess of the sum of the reporting units' fair values over the market capitalization). We evaluate the control premium by comparing it to control premiums of recent comparable market transactions. If the implied control premium is not reasonable in light of these recent transactions, we will reevaluate our fair value estimates of the reporting units by adjusting the discount rates and/or other assumptions.
We applied a combined weighting of 25% to the market approach when determining the fair value of our reporting units.
As indicated in Note 5, "Goodwill and Other Intangible Assets", the fair value of each of our four reporting units exceeded their respective carrying values by a very large margin (ranging from 56% to 540%). If market factors change and the discount rate utilized in the fair value calculation changes, it would result in a higher or lower fair value of our reporting units. The discount rates utilized in our October 1, 2025 impairment test ranged from 10.0% to 12.0%. An increase in the discount rate assumption of 50 basis points would have impacted the fair values of our reporting units, and would have reduced the excess of fair value over carrying value to a revised range of 51% to 517%. Further, if we are unable to achieve the projected revenue growth rates or margins assumed in our projections, this would also impact the fair value of our reporting units. If we were to change our reporting unit structure again or if other events and circumstances change (such as a sustained decrease in the price of our common stock, a decline in current market multiples, a significant adverse change in legal factors or business climates, an adverse action or assessment by a regulator, heightened 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), we may be required to record impairment charges in future periods. Any impairment charges that we may take in the future could be material to our consolidated results of operations and consolidated financial condition.
The Company conducted its annual goodwill impairment test as of October 1, 2025, and no impairment was identified at that time. Management has also concluded that the fair value of its goodwill exceeded the associated carrying value at December 31, 2025 and that no impairment exists as of that date. See Note 5, "Goodwill and Other Intangible Assets," for details of our goodwill balance and the goodwill review performed in 2025. We will continue to monitor goodwill on an annual basis and whenever events or changes in circumstances, such as significant adverse changes in business climate or operating results, changes in management's business strategy or significant declines in our stock price, indicate that there may be a potential indicator of impairment.
Indefinite-Lived Intangible Assets
The Company tests indefinite-lived intangible assets for impairment annually on October 1, or upon a triggering event, using a fair value approach, the relief-from-royalty method (a form of the income approach). The Company conducted its annual impairment tests as of October 1, 2025 and in connection with its analysis, did not identify any impairment as of that date. Management has also concluded that the fair value of its trademarks exceeds the associated carrying values at December 31, 2025 and that no impairment existed as of that date. At December 31, 2025, the Company's indefinite-lived intangible assets related solely to trademarks.
Pension Benefit Obligations
Net periodic benefit cost for the Company's SERP totaled $1.1 million in 2025, $1.4 million in 2024, and $1.3 million in 2023. Benefit plan information for financial reporting purposes is calculated using actuarial assumptions including a discount rate for plan benefit obligations. The changes in net periodic benefit cost year-over-year are attributable to demographic changes within the plan, as well as any changes to the discount rate or the assumption around the future annual increases in compensation. The discount rate utilized for the net periodic benefit cost was 5.50% at December 31, 2025 and 4.75% at December 31, 2024. An increase or decrease in this 2025 discount rate assumption of 25 basis points would have increased/decreased the 2025 periodic benefit cost by less than $0.1 million. The discount rate utilized for the pension benefit obligation was 5.25% at December 31, 2025 and 5.50% at December 31, 2024. An increase in this 2025 discount rate assumption of 25 basis points would have reduced the pension benefit obligation by $0.4 million at December 31, 2025. A decrease in this 2025 discount rate assumption of 25 basis points would have increased the pension benefit obligation by $0.5 million at December 31, 2025.
Other Matters
The Company believes that it has sufficient cash reserves to fund its foreseeable working capital needs. It may, however, seek to expand such resources through bank borrowings, at favorable lending rates, from time to time. If the Company were to undertake another substantial acquisition for cash, the acquisition would either be funded with cash on hand or would be financed through cash on hand and through bank borrowings or the issuance of public or private debt or equity. If the Company borrows additional money to finance acquisitions, this would further decrease the Company's ratio of earnings to fixed charges, and could further impact the Company's material restrictive covenants, depending on the size of the borrowing and the nature of the target company. Under its existing credit facility, the Company is required to obtain its lender's consent for certain additional debt financing and to comply with other covenants, including the application of specific financial ratios, which may limit the Company’s ability to pay cash dividends on its common stock and/or the amounts thereof, including to the extent that payment of any such dividend would cause noncompliance with any such financial ratio. Depending on the nature of the transaction, the Company cannot assure investors that the necessary acquisition financing would be available to it on acceptable terms, or at all, when required. If the Company issues a substantial amount of stock either as consideration in an acquisition or to finance an acquisition, such issuance may dilute existing shareholders and may take the form of capital stock having preferences over its existing common stock.
New Financial Accounting Standards
The discussion of new financial accounting standards applicable to the Company is incorporated herein by reference to Note 1, "Description of Business and Summary of Significant Accounting Policies."
Item 8. Financial Statements and Supplementary Data
See the consolidated financial statements listed in the accompanying Index to Consolidated Financial Statements for the information required by this item.
| BEL FUSE INC. AND SUBSIDIARIES | |||
| INDEX TO CONSOLIDATED FINANCIAL STATEMENTS | |||
|
|
|
|
|
| Financial Statements |
| Page |
|
|
|
|
|
|
|
|
|
|
|
| Reports of Independent Registered Public Accounting Firm (Grant Thornton LLP, Edison, New Jersey, PCAOB #248) |
| 19 |
|
|
| 21 |
| |
|
|
|
| |
| Consolidated Statements of Operations for the Three Years Ended December 31, 2025 |
| 22 |
|
|
|
|
| |
| Consolidated Statements of Comprehensive Income for the Three Years Ended December 31, 2025 |
| 23 |
|
|
|
|
| |
|
| 24 |
| |
|
|
|
| |
| Consolidated Statements of Cash Flows for the Three Years Ended December 31, 2025 |
| 25 |
|
|
|
|
| |
|
| 27 |
| |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Shareholders
Bel Fuse Inc.
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of Bel Fuse Inc. (a New Jersey corporation) and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, shareholders’ equity and redeemable noncontrolling interest, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule included under Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 24, 2026, expressed an unqualified opinion.
Basis for opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical audit matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgements. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Goodwill and indefinite-lived intangible assets impairment assessment: Enercon reporting unit, Enercon Technologies Trademark and Milpower Source Trademark
As described further in Notes 1 and 5 to the consolidated financial statements, the Company performed a quantitative goodwill impairment assessment and an impairment assessment of indefinite‑lived intangible assets as of October 1, 2025. We identified the goodwill impairment assessment for the Enercon reporting unit and the impairment assessment of the Enercon Technologies and Milpower Source indefinite-lived trademarks as a critical audit matter.
The principal considerations for our determination that the quantitative goodwill impairment assessment for the Enercon reporting unit and the impairment assessment of Enercon Technologies and Milpower Source indefinite-lived trademarks are a critical audit matter are (i) the assessments required management to make significant estimates and assumptions in determining fair value, (ii) the high degree of auditor judgement and subjectivity in performing procedures and evaluating management’s significant assumptions relating to the revenue growth rate, and weighted average cost of capital (“WACC”) and (iii) the audit effort involved the use of professionals with specialized skills and knowledge.
Our audit procedures related to the quantitative goodwill impairment assessment for the Enercon reporting unit and the impairment assessment of Enercon Technologies and Milpower Source indefinite-lived trademarks included the following, among others:
| ● | We tested the design and operating effectiveness of relevant controls over management’s impairment assessment process, including controls over the development and review of key valuation assumptions and the appropriateness of the valuation models used. |
| ● | We tested the forecasted revenue growth rate, by assessing the reasonableness of management’s forecasts compared to historical results and forecasted industry trends. |
| ● | With the assistance of professionals with specialized skills and knowledge, we assessed the assumptions and methodologies used in developing the WACC by developing a range of independent estimates and comparing those to the rate selected by management. |
/s/ GRANT THORNTON LLP
We served as the Company’s auditor from 2021 to 2026.
Edison, New Jersey
February 24, 2026 (except for Note 14 and the effects thereof, as to which the date is May 12, 2026)
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Shareholders
Bel Fuse Inc.
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of Bel Fuse Inc. (a New Jersey corporation and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2025, and our report dated February 24, 2026 expressed an unqualified opinion on those financial statements.
Basis for opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ GRANT THORNTON LLP
Edison, New Jersey
February 24, 2026
| CONSOLIDATED BALANCE SHEETS |
|||||||
| (dollars in thousands, except share and per share data) |
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Held to maturity U.S. Treasury securities | ||||||||
| Accounts receivable, net of credit losses of $ and $, at December 31, 2025 and 2024, respectively | ||||||||
| Inventories | ||||||||
| Unbilled receivables | ||||||||
| Assets held for sale | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Property, plant and equipment, net | ||||||||
| Right-of-use assets | ||||||||
| Related-party note receivable | ||||||||
| Equity method investment | ||||||||
| Intangible assets, net | ||||||||
| Goodwill, net | ||||||||
| Deferred income taxes | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Operating lease liability, current | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities: | ||||||||
| Long-term debt | ||||||||
| Operating lease liability, long-term | ||||||||
| Liability for uncertain tax positions | ||||||||
| Minimum pension obligation and unfunded pension liability | ||||||||
| Deferred income taxes | ||||||||
| Related-party note payable | ||||||||
| Other long-term liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (see Note 19) | ||||||||
| Redeemable noncontrolling interest | ||||||||
| Shareholders' equity: | ||||||||
| Preferred stock, par value, shares authorized; issued | ||||||||
| Class A common stock, par value $ per share, shares authorized; shares outstanding at each date (net of restricted treasury shares) | ||||||||
| Class B common stock, par value $ per share, shares authorized; shares and shares outstanding at December 31, 2025 and December 31, 2024, respectively (net of restricted treasury shares) | ||||||||
| Treasury stock (unrestricted; outstanding at December 31, 2025, and at December 31, 2024) | ||||||||
| Additional paid-in capital | ||||||||
| Retained earnings | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total shareholders' equity | ||||||||
| Total liabilities, redeemable noncontrolling interest and shareholders' equity | $ | $ | ||||||
| See accompanying notes to consolidated financial statements. |
| CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||
| (in thousands, except per share data) |
| Year Ended December 31, |
||||||||||||
| 2025 |
2024 |
2023 |
||||||||||
| Net sales |
$ | $ | $ | |||||||||
| Cost of sales |
||||||||||||
| Gross profit |
||||||||||||
| Research and development costs |
||||||||||||
| Selling, general and administrative expenses |
||||||||||||
| Impairment of CUI tradename |
||||||||||||
| Restructuring (credits) charges |
( |
) | ||||||||||
| Gain on sale of properties |
( |
) | ( |
) | ||||||||
| Earnout liability adjustments |
||||||||||||
| Income from operations |
||||||||||||
| Gain on sale of Czech Republic business |
||||||||||||
| Interest expense |
( |
) | ( |
) | ( |
) | ||||||
| Interest income |
||||||||||||
| Impairment of equity method investment and related party notes |
( |
) | ||||||||||
| Other income (expense), net |
( |
) | ( |
) | ||||||||
| Earnings before provision for income taxes |
||||||||||||
| Provision for income taxes |
||||||||||||
| Net earnings available to common shareholders |
||||||||||||
| Less: Net earnings attributable to noncontrolling interest |
||||||||||||
| Redemption value adjustment attributable to noncontrolling interest |
||||||||||||
| Net earnings attributable to Bel Fuse shareholders |
$ | $ | $ | |||||||||
| Net earnings per common share: |
||||||||||||
| Class A common shares - basic and diluted |
$ | $ | $ | |||||||||
| Class B common shares - basic |
$ | $ | $ | |||||||||
| Class B common shares - diluted |
$ | $ | $ | |||||||||
| Weighted-average shares outstanding: |
||||||||||||
| Class A common shares - basic and diluted |
||||||||||||
| Class B common shares - basic |
||||||||||||
| Class B common shares - diluted |
||||||||||||
| See accompanying notes to consolidated financial statements. |
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
|||||||
| (dollars in thousands) |
| Year Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Net earnings available to common shareholders | $ | $ | $ | |||||||||
| Other comprehensive income: | ||||||||||||
| Currency translation adjustment, net of taxes of $, $ and ($) | ( | ) | ||||||||||
| Unrealized losses on interest rate swap cash flow hedge, net of taxes of $ in all periods | ( | ) | ( | ) | ( | ) | ||||||
| Unrealized holding gains on marketable securities arising during the period, net of taxes of $ in all periods | ||||||||||||
| Change in unfunded SERP liability, net of taxes of ($), ($) and ($) | ( | ) | ( | ) | ||||||||
| Other comprehensive income (loss) | ( | ) | ||||||||||
| Comprehensive income | $ | $ | $ | |||||||||
| Comprehensive income attributable to noncontrolling interest | $ | $ | $ | |||||||||
| Comprehensive income attributable to Bel shareholders | $ | $ | $ | |||||||||
| See accompanying notes to consolidated financial statements. |
| CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND REDEEMABLE NONCONTROLLING INTEREST |
|||||||||||||||||||||||
| (in thousands, except per share data) |
| Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Class A Common Stock | Class A # of Shares | Class B Common Stock | Class B # of Shares | Treasury Stock | Additional Paid-In Capital | Total shareholders' equity | Redeemable Noncontrolling Interest | |||||||||||||||||||||||||||||||
| Balance at December 31, 2022 | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||||||
| Net earnings | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Dividends declared: | ||||||||||||||||||||||||||||||||||||||||
| Class A Common Stock, $/share | ( | ) | - | - | - | - | - | - | - | ( | ) | - | ||||||||||||||||||||||||||||
| Class B Common Stock, $/share | ( | ) | - | - | - | - | - | - | - | ( | ) | - | ||||||||||||||||||||||||||||
| Issuance of restricted common stock | - | - | - | - | - | ( | ) | - | - | |||||||||||||||||||||||||||||||
| Forfeiture of restricted common stock | - | - | - | - | ( | ) | ( | ) | - | - | - | |||||||||||||||||||||||||||||
| Repurchase of treasury stock | - | - | - | - | ( | ) | ( | ) | - | ( | ) | - | ||||||||||||||||||||||||||||
| Foreign currency translation adjustment, including writeoff of $ related to liquidation of foreign subsidiary, net of taxes of ($) | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Unrealized gains on interest rate swap cashflow hedge, net of taxes of $ | - | ( | ) | - | - | - | - | - | - | ( | ) | - | ||||||||||||||||||||||||||||
| Unrealized holding gains on marketable securities, net of taxes of $ | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Stock-based compensation expense | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Change in unfunded SERP liability, net of taxes of ($) | - | ( | ) | - | - | - | - | - | - | ( | ) | - | ||||||||||||||||||||||||||||
| Balance at December 31, 2023 | ( | ) | ( | ) | - | |||||||||||||||||||||||||||||||||||
| Acquisition resulting in redeemable noncontrolling interest ("NCI") | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Redemption value adjustment on redeemable NCI | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||
| Net earnings | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||
| Dividends declared: | ||||||||||||||||||||||||||||||||||||||||
| Class A Common Stock, $/share | ( | ) | - | - | - | - | - | - | - | ( | ) | - | ||||||||||||||||||||||||||||
| Class B Common Stock, $/share | ( | ) | - | - | - | - | - | - | - | ( | ) | - | ||||||||||||||||||||||||||||
| Issuance of restricted common stock | - | - | - | - | - | ( | ) | - | - | |||||||||||||||||||||||||||||||
| Forfeiture of restricted common stock | - | - | - | - | ( | ) | ( | ) | - | - | - | |||||||||||||||||||||||||||||
| Purchase of common stock | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | - | |||||||||||||||||||||||||
| Cancellation of treasury shares | - | - | - | - | - | - | ( | ) | - | - | ||||||||||||||||||||||||||||||
| Foreign currency translation adjustment, net of taxes of $ | - | ( | ) | - | - | - | - | - | - | ( | ) | - | ||||||||||||||||||||||||||||
| Unrealized losses on interest rate swap cash flow hedge, net of taxes of $ | - | ( | ) | - | - | - | - | - | - | ( | ) | - | ||||||||||||||||||||||||||||
| Unrealized holding gains on marketable securities, net of taxes of $ | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Stock-based compensation expense | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Change in unfunded SERP liability, net of taxes of ($) | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Redemption value adjustment on redeemable NCI | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Net earnings | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||
| Dividends declared: | - | |||||||||||||||||||||||||||||||||||||||
| Class A Common Stock, $/share | ( | ) | - | - | - | - | - | - | - | ( | ) | - | ||||||||||||||||||||||||||||
| Class B Common Stock, $/share | ( | ) | - | - | - | - | - | - | - | ( | ) | - | ||||||||||||||||||||||||||||
| Issuance of restricted common stock | - | - | - | - | - | ( | ) | - | - | |||||||||||||||||||||||||||||||
| Forfeiture of restricted common stock | - | - | - | - | ( | ) | ( | ) | - | - | - | |||||||||||||||||||||||||||||
| Foreign currency translation adjustment, net of taxes of $ | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Unrealized losses on interest rate swap cash flow hedge, net of taxes of $ | - | ( | ) | - | - | - | - | - | - | ( | ) | - | ||||||||||||||||||||||||||||
| Share-based compensation expense | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Change in unfunded SERP liability, net of taxes of ($) | - | ( | ) | - | - | - | - | - | - | ( | ) | - | ||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | ( | ) | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| See accompanying notes to consolidated financial statements. |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
| (dollars in thousands) |
| Years Ended December 31, |
||||||||||||
| 2025 |
2024 |
2023 |
||||||||||
| Cash flows from operating activities: |
||||||||||||
| Net earnings |
$ | $ | $ | |||||||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: |
||||||||||||
| Impairment of equity method investment and related party notes |
||||||||||||
| Depreciation and amortization |
||||||||||||
| Stock-based compensation |
||||||||||||
| Amortization of deferred financing costs |
||||||||||||
| Deferred income taxes benefit/(expense) |
( |
) | ( |
) | ||||||||
| Net unrealized (gains)/losses on foreign currency revaluation |
( |
) | ||||||||||
| Gains on sale/disposal of property, plant and equipment |
( |
) | ( |
) | ||||||||
| Gain on sale of Czech Republic business |
( |
) | ||||||||||
| Other, net |
( |
) | ||||||||||
| Changes in operating assets and liabilities: |
||||||||||||
| Accounts receivable |
( |
) | ( |
) | ||||||||
| Unbilled receivables |
( |
) | ||||||||||
| Inventories |
( |
) | ||||||||||
| Other current assets |
( |
) | ( |
) | ( |
) | ||||||
| Other assets |
( |
) | ||||||||||
| Accounts payable |
( |
) | ||||||||||
| Accrued expenses |
( |
) | ||||||||||
| Accrued restructuring costs |
( |
) | ( |
) | ||||||||
| Other liabilities |
( |
) | ( |
) | ( |
) | ||||||
| Income taxes payable |
( |
) | ( |
) | ( |
) | ||||||
| Net cash provided by operating activities |
||||||||||||
| Cash flows from investing activities: |
||||||||||||
| Purchase of property, plant and equipment |
( |
) | ( |
) | ( |
) | ||||||
| Purchases of held to maturity U.S. Treasury securities |
( |
) | ( |
) | ||||||||
| Proceeds from held to maturity securities |
||||||||||||
| Payment for equity method investment |
( |
) | ||||||||||
| Investment in related party notes receivable |
( |
) | ( |
) | ||||||||
| Proceeds from disposal/sale of property, plant and equipment |
||||||||||||
| Acquisition of business, net of cash acquired |
( |
) | ||||||||||
| Proceeds from sale of business |
||||||||||||
| Net cash used in investing activities |
( |
) | ( |
) | ( |
) | ||||||
| (continued) |
| BEL FUSE INC. AND SUBSIDIARIES |
|||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) |
|||||||
| (dollars in thousands) |
| Year Ended December 31, |
||||||||||||
| 2025 |
2024 |
2023 |
||||||||||
| Cash flows from financing activities: |
||||||||||||
| Dividends paid to common shareholders |
( |
) | ( |
) | ( |
) | ||||||
| Purchase of treasury stock |
( |
) | ( |
) | ||||||||
| Deferred financing costs |
( |
) | ( |
) | ||||||||
| Borrowings under revolving line of credit |
||||||||||||
| Proceeds of long-term debt |
||||||||||||
| Repayments under revolving line of credit |
( |
) | ( |
) | ( |
) | ||||||
| Net cash (used in) provided by financing activities |
( |
) | ( |
) | ||||||||
| Effect of exchange rate changes on cash |
( |
) | ||||||||||
| Net (decrease) increase in cash and cash equivalents |
( |
) | ( |
) | ||||||||
| Cash and cash equivalents - beginning of year |
||||||||||||
| Cash and cash equivalents - end of year |
$ | $ | $ | |||||||||
| Supplemental cash flow information: |
||||||||||||
| Cash paid during the year for: |
||||||||||||
| Income taxes, net of refunds received |
$ | $ | $ | |||||||||
| Interest payments |
$ | $ | $ | |||||||||
| Redeemable noncontrolling interest assumed in exchange for acquired net assets |
$ | $ | $ | |||||||||
| ROU assets obtained in exchange for lease obligations |
$ | $ | $ | |||||||||
| See accompanying notes to consolidated financial statements. |
BEL FUSE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023
| 1. | DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Bel Fuse Inc. and subsidiaries ("Bel," the "Company," "we," "us," and "our") design, manufacture and market critical electronic components, systems and solutions for customers in the aerospace, defense, industrial, and data-driven markets. Bel delivers a comprehensive portfolio of solutions including power systems, high-reliability connectors and cable assemblies, circuit protection, and networking products that enable Original Equipment Manufacturers (OEMs) to bring their innovations to market. We manage our operations through our
During the first quarter of 2026, Bel Fuse Inc. (the “Company”) implemented a change in its internal organizational and reporting structure to better align management reporting with customer end markets. As a result, effective March 31, 2026, the Company updated the reportable segment view used by the Company’s Chief Operating Decision Maker (“CODM”), the chief executive officer, to assess performance and allocate resources. The CODM has not changed.
Following this change, the Company has
The segment information in this Form 8-K has been recast to conform to the way we internally manage and monitor our business during fiscal year 2026. These changes primarily impacted Note 4 – “Revenue”, Note 5 – “Goodwill and Other Intangible Assets”, and Note 14 – “Segments”.
The Aerospace, Defense & Rugged Solutions segment primarily includes the Company’s legacy Connectivity Solutions business and Enercon operations. The Industrial Technology & Data Solutions segment primarily includes the Company’s legacy Power Solutions and Protection and Magnetic Solutions operations. These segment descriptions reflect how results are reviewed by the CODM.
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 Topic 810 "Consolidations", while the Company only owns an
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 but not 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 are not 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 an original maturity of three 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 were classified as held to maturity as the Company had the intent and ability to hold these investments until they matured. The table below shows the amortized costs, associated gross unrealized gains and associated fair value of the held to maturity securities at December 31, 2025 and 2024:
| December 31, 2025 | December 31, 2024 | |||||||
| Held to maturity U.S. Treasury securities | ||||||||
| Amortized Cost | $ | $ | ||||||
| Gross Unrealized Gain | $ | $ | ||||||
| Fair Value | $ | $ | ||||||
In determining the fair value of the Company's held to maturity U.S. Treasury securities, the Company utilized Level 1 inputs of the market price for comparable securities as of December 31, 2025 and on December 31, 2024.
Allowance for Credit Losses - The Company currently measures the expected credit losses based on our historical credit loss experience. The Company has not experienced significant recent or historical credit losses and is not forecasting any significant credit losses which would require adjustments to our methodology. If current conditions and supportable forecasts indicate that our historical loss experience is not reasonable and no longer supportable, the Company may adjust 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. Aside from the related party loan further described in Note 2 "Investment and Impairment in Innolectric", there were no significant impairment losses related to our receivables in 2025 or 2024.
Effects of Foreign Currency – In non-U.S. locations that are not 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 shareholders' 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 $
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 evaluation 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 Note 14, "Segments," for disclosures regarding significant customers.
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 for to 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 Note 12, "Accrued Expenses."
Product Returns – We estimate product returns, including product exchanges under warranty, based on historical experience. In general, the Company is not contractually obligated to accept returns except for defective product or in instances where the product does not meet the Company's product specifications. However, the Company may permit 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 may be 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
We use the acquisition method of accounting for those business combinations in which we acquire 100% of the equity. We do not amortize goodwill or intangible assets with indefinite useful lives. Goodwill and intangible assets with indefinite useful lives are tested for possible impairment annually during the fourth 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, 2025, property was classified as assets held for sale within other current assets on the accompanying condensed consolidated balance sheets. Accordingly, no impairment testing was performed during 2025. At December 31, 2024, a total of $
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 $
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
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 did not 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 is not 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 trailing twelve-months EBITDA (as defined in the Purchase Agreement as further described in Note 3, "Acquisition." 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 earnings attributable to redeemable noncontrolling interest is classified below net earnings. Earnings per share is determined after the impact of the redeemable noncontrolling interest's share in net earnings of the Company. Refer to Note 3, "Acquisition", 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 does not 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 Note 13, "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 Note 10, “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 are not 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 than not that certain positions may be 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 the two-class method to report our earnings per share. The two-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 $
The earnings and weighted average shares outstanding used in the computation of basic and diluted earnings per share are as follows:
| Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Numerator: | ||||||||||||
| Net earnings attributable to Bel shareholders | $ | $ | $ | |||||||||
| Less dividends declared: | ||||||||||||
| Class A | ||||||||||||
| Class B | ||||||||||||
| Undistributed earnings | $ | $ | $ | |||||||||
| Undistributed earnings allocation: | ||||||||||||
| Class A undistributed earnings | $ | $ | $ | |||||||||
| Class B undistributed earnings | ||||||||||||
| Total undistributed earnings | $ | $ | $ | |||||||||
| Net earnings allocation: | ||||||||||||
| Class A net earnings | $ | $ | $ | |||||||||
| Class B net earnings | ||||||||||||
| Net earnings | $ | $ | $ | |||||||||
| Denominator: | ||||||||||||
| Weighted average shares outstanding: | ||||||||||||
| Class A - Basic and Diluted | ||||||||||||
| Class B - Basic | ||||||||||||
| Class B - Diluted | ||||||||||||
| Net earnings per share attributable to Bel shareholders: | ||||||||||||
| Class A - Basic and Diluted | $ | $ | $ | |||||||||
| Class B - Basic | $ | $ | $ | |||||||||
| Class B - Diluted | $ | $ | $ | |||||||||
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, 2025, 2024 and 2023 amounted to $
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 established three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are defined as follows:
Level 1 - Observable inputs such as quoted market prices in active markets
Level 2 - Inputs other than quoted prices in active markets that are either directly or indirectly observable
Level 3 - Unobservable inputs about which little or no 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 Note 6, "Fair Value Measurements," for additional disclosures related to fair value measurements.
Recently Issued Accounting Standards
Recently Adopted Accounting Standards
In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which focuses on the rate reconciliation and income taxes paid. ASU 2023-09 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 least 5% of total income tax payments, net of refunds received. The Company adopted this ASU on a retrospective basis from 2023. Refer to Note 10, "Income Taxes", for the inclusion of new disclosures required.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): 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 prior to adoption of this guidance had been required annually. Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker ("CODM"). The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. In the fourth quarter of 2024, 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 did not have any impact to our results of operations, cash flows and financial condition. See Note 14, "Segments", for applicable reportable segment disclosures required by this guidance.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 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 ASU 2021-01, which refined the scope of Topic 848 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 ASU 2022-06, Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848, 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 ASU 2020-04 in the first quarter of 2023 and elected to apply the relevant practical expedients within the guidance. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments Credit Losses (Topic 326): 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 ASU 2016-13. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.
Accounting Standards Issued But Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to improve disclosures about a PBE's expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. Such information is intended to 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 PBEs 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 December 15, 2026, and interim reporting periods beginning after December 15, 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.
| 2. | INVESTMENT AND IMPAIRMENT IN INNOLECTRIC |
On February 1, 2023, the Company closed on a noncontrolling (-third) investment in Germany-based innolectric AG (“innolectric”) for consideration of million (approximately $
This passive investment was intended to create a strategic alliance focused on Electric Vehicles (“EV”) on-board power electronics, and in particular next generation fast-charging technology. Our investment in innolectric was accounted for using the equity method and we had determined that the innolectric investment was not a variable interest entity (VIE). Results from this investment have been included in Bel's Industrial Technology & Data Solutions segment within other income (expense), net and amounted to losses of $
Related Party Transactions
From time to time, the Company provided cash loans to innolectric to fund working capital needs and further business development. At December 31, 2024, the Company had related party loans to innolectric in the aggregate amount of million (approximately $
Impairment and Write-off of Investment
On November 26, 2025, Bel's management concluded that an other-than-temporary impairment charge was required in connection with the Company’s noncontrolling minority investment in innolectric and related party notes receivable. This determination was made based upon indicators of impairment including the majority owner’s cessation of financial support of innolectric, which resulted in the commencement of insolvency proceedings against innolectric’s assets in the fourth quarter of 2025, together with other indicators of impairment including recent financial performance, changes in market conditions, and other relevant factors affecting innolectric’s business.
The Company assessed the carrying value of its investment and related party loans and determined that the decline in value was other than temporary. Indicators supporting this conclusion included significant adverse changes in innolectric’s business and financial condition, prolonged losses, and the cessation of financial support from the majority owner. As a result, Bel recorded a pre-tax impairment charge of approximately $
| ● | Full impairment of the equity investment ($ |
| ● | Full impairment of related party loans ($ |
| ● | Derecognition of the call option liability ($ |
The impairment charge reflects the expectation that recovery of any material value from the investment or related loans is remote, given the priority of secured creditors and Bel’s minority position in the insolvency proceedings. The call option liability was derecognized as the option is no longer exercisable or has no value due to innolectric’s financial collapse. As of December 31, 2025, there is no value on the consolidated balance sheet related to the equity method investment, related party note receivable or call option liability.
| 3. | ACQUISITION |
Acquisition of Enercon
On November 14, 2024, the Company closed on its acquisition of its majority
Under the terms of the Purchase Agreement, on the November 14, 2024 closing date (and deemed effective solely for accounting purposes as of November 1, 2024), Bel acquired from the Sellers
At the closing, Bel paid an aggregate of approximately $
The potential Earnout Payments may become payable of up to $
During the year ended December 31, 2024, the Company incurred $
The accounting related to the Enercon acquisition has been completed as of the filing date of this Form 10-K. The following table presents the Company’s final determination of the acquisition date fair values of the consideration paid, identifiable net assets acquired, and goodwill. All valuations and the purchase price allocation are now finalized, and no further adjustments are anticipated.
| Acquisition Date | |||||
| Fair Values | |||||
| (as adjusted) | |||||
| Cash | $ | ||||
| Accounts receivable | |||||
| Inventories | (a) | ||||
| Other current assets | |||||
| Property, plant and equipment | (b) | ||||
| Intangible assets | (c) | ||||
| Other assets | |||||
| Total identifiable assets | |||||
| Accounts payable | |||||
| Accrued expenses | |||||
| Other current liabilities | |||||
| Noncurrent liabilities | (d) | ||||
| Total liabilities assumed | |||||
| Net identifiable assets acquired | |||||
| Goodwill | (e) | ||||
| Net assets acquired | $ | ||||
| Cash paid | $ | ||||
| Fair value of contingent consideration | |||||
| Fair value of noncontrolling interest | (f) | ||||
| Fair value of seller note | (g) | ||||
| Fair value of consideration transferred | |||||
| Deferred consideration | ( | ) | |||
| Total consideration paid | $ | ||||
| (a) |
The inventories noted include a step-up in fair value of $ |
| (b) |
The property, plant and equipment noted above includes a $ |
| (c) |
The fair value of identifiable intangible assets related to Enercon is shown in the table below. For those intangible assets with finite lives, the acquisition-date fair values will be amortized over their respective estimated future lives utilizing the straight-line method. |
| Acquisition Date |
Weighted Average |
||||
| Fair Value |
Amortization Period |
||||
| Trademarks |
$ | Indefinite |
|||
| Customer relationships |
|
||||
| Technology |
|
||||
| Total intangible assets acquired |
$ | ||||
| (d) |
Deferred taxes have been established on the previously-mentioned step-ups for inventories, property, plant and equipment and intangible assets. |
| (e) |
The goodwill is identifiable to the Aerospace, Defense & Rugged Solutions reportable segment and is attributable to expected synergies from combining operations, as well as intangible assets that do not qualify for separate recognition. All goodwill will be deductible for tax purposes over a period of |
| (f) |
In connection with its acquisition of Enercon, the Company recorded a redeemable noncontrolling interest which was initially recorded at a fair value of $ |
| (g) |
In connection with its acquisition of Enercon, the Company assumed a related party loan payable to FF3 in the amount of $ |
The results of operations of Enercon have been included in the Company’s consolidated financial statements for the period from November 1, 2024 through December 31, 2025. The activity between the accounting effective date of November 1, 2024 and the legal close date of November 14, 2024 was not material to Bel's financial statements. During the year ended December 31, 2024, Enercon contributed revenue of $
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 fair value of assets acquired, interest expense and amortization of deferred financing costs related to the financing of the acquisition, and related tax effects. The 2023 unaudited pro forma net earnings were adjusted to include a non-recurring expense related to a fair value adjustment to acquisition-date inventory of $
| Year Ended |
||||||||
| December 31, |
||||||||
| 2024 |
2023 |
|||||||
| Revenue, net |
$ | $ | ||||||
| Net earnings |
||||||||
| Less: Net earnings attributable to non-controlling interest |
||||||||
| Net earnings attributable to Bel Fuse |
$ | $ | ||||||
| Earnings per Class A common share - basic and diluted |
$ | $ | ||||||
| Earnings per Class B common share - basic and diluted |
$ | $ | ||||||
During 2024, 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
| 4. | REVENUE |
Nature of Goods and Services
Our revenues are substantially derived from sales of our products which are utilized in aerospace, defense, industrial and data solution applications. Within Bel’s portfolio of products, we provide:
● Power Supplies: AC/DC and DC/DC power conversion devices and circuit protection products.
● Connectivity Products: connectors, cable assemblies, passive jacks and plugs
● Magnetic Products: integrated connector modules and transformers
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 ASC 606, 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 under one of the following types of contracts:
| • |
Direct with customer: This includes contracts with original equipment manufacturers (OEMs), original design manufacturers (ODMs), and contract manufacturers (CMs). The nature of Bel's products are such that they represent components which are installed in various end applications (e.g., servers, aircraft, missiles and rail applications). The OEMs, ODMs or CMs that purchase our product for further installation are our end customers. Contracts with these customers are broad-based and cover general terms and conditions. Details such as order volume and pricing are typically contained in individual purchase orders, and as a result, we view each product on each purchase order as an individual performance obligation. Incremental services included in the contracts, such as training, highly-customized product development services, tooling and other customer support are determined to be immaterial in the context of the contract, both individually and in the aggregate. Revenue under these contracts is generally recognized at a point in time, generally upon shipping or delivery, which closely mirrors the shipping terms dictated by the applicable contract. |
| • | Distributor: Distribution customers buy product directly from Bel and sell it in the marketplace to end customers. Bel contracts directly with the distributor. These contracts are typically global in nature and cover a variety of our product groups. Similar to contracts with OEMs, ODMs and CMs, each product on each purchase order is considered an individual performance obligation. Revenue is recognized at a point in time, generally upon shipping or delivery, which closely mirrors the shipping terms dictated by the applicable contract. |
| • | Customer-Designated Hub Arrangements: These customers operate under a type of concession agreement whereby the Company ships goods to a warehouse or hub, where they will be pulled by the customer at a later date. The terms specified in the customer-designated hub contracts specify that the Company will not invoice the customer for product until it is pulled from the warehouse or hub. Once product arrives at the hub, it is generally not returned to Bel unless there is a warranty issue (see Note 1, "Description of Business and Summary of Significant Accounting Policies - Product Warranties" above). Similar to the contracts described above, each product on each purchase order is considered an individual performance obligation. Under ASC 606, it was determined that the majority of these hubs are customer-controlled, and therefore control transfers to the customer upon either delivery from Bel's warehouse, or arrival at the customer-controlled hub, depending upon the applicable shipping terms. Revenue is therefore recognized as control of the product is transferred to the customer (for customer-controlled hubs, this is at the time product is shipped to the hub). The accompanying consolidated balance sheet reflects a corresponding unbilled receivable balance, as we do not have the right to invoice the customer until product is pulled from the hub. |
| • | Licensing Agreements: License agreements are only applicable to our ITDS segment, and include provisions for Bel to receive sales-based royalty income related to the licensing of Bel's patents or other intellectual property (IP) utilized by a third-party entity. Income related to these agreements is tracked by the licensee throughout the year based on their sales of product that utilize Bel's IP, and that data is reported to Bel either on a quarterly or annual basis, with payment generally received within 30 days of the reporting date. Our performance obligation is satisfied upon delivery of the IP at the beginning of the license period, as the licenses are functional in nature. However, the recognition of revenue associated with these licenses is subject to the sales- or usage-based constraint on variable consideration. As such, the Company records a constrained estimate of this variable consideration as royalty income in the period of the underlying customers' product sales, with adjustments made as actual licensee sales data becomes available. |
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 within 30-90 days from the transfer of title to the customer. Payment for products sold under our customer-designated hub arrangements is typically due within 60 days of the customer pulling the product from the hub. Payment due related to our licensing agreements is generally within 30 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 are not 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. At the time of adoption, the Company elected to apply the practical expedient permitted under ASC Topic 606, “Revenue from Contracts with Customers.” This expedient allows entities not to adjust the promised consideration in a contract for the effects of a significant financing component if the period between the transfer of control of goods or services to the customer and receipt of payment is one year or less. The Company assessed its contracts and determined that the timing difference between the transfer of control and payment is typically less than one year. Accordingly, the Company recognizes revenue at the amount of consideration to which it expects to be entitled without separately presenting or recognizing interest income or interest expense related to the timing of payment.
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:
| Year Ended December 31, 2025 | ||||||||||||
| Aerospace, Defense & Rugged Solutions | Industrial Technology & Data Solutions | Consolidated | ||||||||||
| By Geographic Region: | ||||||||||||
| North America | $ | $ | $ | |||||||||
| EMEA | ||||||||||||
| Asia | ||||||||||||
| $ | 368,862 | $ | 306,593 | $ | 675,455 | |||||||
| By Sales Channel: | ||||||||||||
| Direct to customer | $ | $ | $ | |||||||||
| Through distribution | ||||||||||||
| $ | 368,862 | $ | 306,593 | $ | 675,455 | |||||||
| Year Ended December 31, 2024 | ||||||||||||
| Aerospace, Defense & Rugged Solutions | Industrial Technology & Data Solutions | Consolidated | ||||||||||
| By Geographic Region: | ||||||||||||
| North America | $ | $ | $ | |||||||||
| EMEA | | |||||||||||
| Asia | ||||||||||||
| $ | 241,188 | $ | 293,604 | $ | 534,792 | |||||||
| By Sales Channel: | ||||||||||||
| Direct to customer | $ | $ | $ | |||||||||
| Through distribution | ||||||||||||
| $ | 241,188 | $ | 293,604 | $ | 534,792 | |||||||
| Year Ended December 31, 2023 | ||||||||||||
| Aerospace, Defense & Rugged Solutions | Industrial Technology & Data Solutions | Consolidated | ||||||||||
| By Geographic Region: | ||||||||||||
| North America | $ | $ | $ | |||||||||
| EMEA | ||||||||||||
| Asia | ||||||||||||
| $ | 210,572 | $ | 429,241 | $ | 639,813 | |||||||
| By Sales Channel: | ||||||||||||
| Direct to customer | $ | $ | $ | |||||||||
| Through distribution | ||||||||||||
| $ | 210,572 | $ | 429,241 | $ | 639,813 | |||||||
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 at December 31, 2025, 2024, and 2023 are as follows:
| December 31, |
December 31, |
December 31, |
||||||||||
| 2025 |
2024 |
2023 |
||||||||||
| Contract assets - current (unbilled receivables) |
$ | $ | $ | |||||||||
| Contract liabilities - current (deferred revenue) |
$ | $ | $ | |||||||||
| Accounts receivable, net |
$ | $ | $ | |||||||||
The change in balance of our unbilled receivables from December 31, 2024 to December 31, 2025 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 years ended December 31, 2025 and December 31, 2024 are presented below:
| Years Ended December 31, |
||||||||
| 2025 |
2024 |
|||||||
| Balance, January 1 |
$ | $ | ||||||
| New advance payments received |
||||||||
| Recognized as revenue during period |
( |
) | ( |
) | ||||
| Currency translation |
( |
) | ||||||
| Balance, December 31 |
$ | $ | ||||||
Transaction Price Allocated to Future Obligations:
The aggregate amount of transaction price allocated to remaining performance obligations that have not been fully satisfied as of December 31, 2025 related to contracts that exceed one year in duration amounted to $
| 5. |
GOODWILL AND OTHER INTANGIBLE ASSETS |
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, 2025 and 2024, the Company's reportable operating segments were as follows:
| • | Aerospace, Defense & Rugged Solutions: includes the 2010 acquisition of Cinch Connectors, the 2012 acquisitions of Fibreco Limited and GigaCom Interconnect, the 2013 acquisition of Array Connector, the 2014 acquisition of Emerson Network Power Connectivity Solutions, the 2021 acquisition of rms Connectors, the 2024 acquisition of Enercon, in addition to sales and an estimated allocation of expenses related to the ADRS segment manufactured at Bel sites that are not end market specific. | |
| • | Industrial Technology & Data Solutions: includes the 2012 acquisition of Powerbox Italia, the 2013 acquisition of TE Connectivity's Coil Wound Magnetics business, the 2014 acquisition of ABB's Power Solutions business, the 2019 acquisition of the majority of CUI Inc.'s power products business, the 2021 acquisition of EOS, the 2023 equity method investment in innolectric, our Signal Transformer business, in addition to sales and an estimated allocation of expenses related to the ITDS segment manufactured at Bel sites that are not end market specific. |
The changes in the carrying value of goodwill classified by our segment reporting structure for the year ended December 31, 2025 are as noted in the table below.
| Total | Aerospace, Defense & Rugged Solutions | Industrial Technology & Data Solutions | ||||||||||
| Balance at January 1, 2024: | ||||||||||||
| Goodwill, gross | $ | $ | $ | |||||||||
| Goodwill, net | $ | $ | $ | |||||||||
| Goodwill allocation related to acquisition | ||||||||||||
| Foreign currency translation | ( | ) | ( | ) | ( | ) | ||||||
| Balance at December 31, 2024: | ||||||||||||
| Goodwill, gross | $ | $ | $ | |||||||||
| Goodwill, net | $ | $ | $ | |||||||||
| Goodwill allocation related to acquisition | $ | $ | ||||||||||
| Foreign currency translation | ||||||||||||
| Balance at December 31, 2025: | ||||||||||||
| Goodwill, gross | $ | $ | $ | |||||||||
| Goodwill, net | $ | $ | $ | |||||||||
During the year ended December 31, 2025, the Company recorded a measurement period adjustment of $
As discussed in Note 6, "Fair Value Measurements", goodwill is reviewed for impairment on a reporting unit basis annually during the fourth 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 may perform 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.
2025 Annual Impairment Test
On October 1, 2025, the Company completed a quantitative assessment of our annual goodwill impairment test for our existing reporting units. We concluded that the fair value of the Company's Power Solutions and Protection segment, Cinch Connectivity Solutions, Enercon and CUI reporting units exceeded the carrying value and that there was no 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 the 2025 annual impairment test were as follows:
| Reporting Unit | % by Which Estimated Fair Value Exceeds Carrying Value | |||
| Power Solutions and Protection | | |||
| Cinch Connectivity Solutions | | |||
| CUI | | |||
| Enercon | | |||
On October 1, 2024, the Company completed a quantitative assessment of our annual goodwill impairment test for our Power Solutions and Protection segment, Cinch Connectivity Solutions, and CUI reporting units. The Company performed a qualitative analysis (Step 0) on the reporting units as of the October 1, 2024 testing date and concluded that the fair value these reporting units exceeded the carrying value and that there was no indication of impairment.
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
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, 2025, 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:
| December 31, 2025 |
December 31, 2024 |
|||||||||||||||||||||||
| Gross Carrying |
Accumulated |
Net Carrying |
Gross Carrying |
Accumulated |
Net Carrying |
|||||||||||||||||||
| Amount |
Amortization |
Amount |
Amount |
Amortization |
Amount |
|||||||||||||||||||
| Patents, licenses and technology |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Customer relationships |
||||||||||||||||||||||||
| Trademarks |
||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||
The increases in gross carrying amounts noted above as of December 31, 2025 related to intangibles acquired in connection with the Enercon transaction, as further detailed in Note 3, "Acquisition." Amortization expense was $
Estimated amortization expense for intangible assets for the next five years is as follows:
| December 31, |
Amortization Expense |
|||
| 2026 |
$ | |||
| 2027 |
||||
| 2028 |
||||
| 2029 |
||||
| 2030 |
||||
2025 and 2024 Impairment Tests
The Company completed its annual indefinite-lived intangible assets impairment test as of October 1, 2025 and October 1, 2024. At the October 1, 2025 testing date, it was concluded that no indication of impairment was evident at the October 1, 2025 test date for the Company's indefinite-lived intangible assets. At the October 1, 2024 testing date, it was concluded that an impairment existed related to the Company's CUI tradename given the trade restrictions with one 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 $
| 6. | FAIR VALUE MEASUREMENTS |
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, 2025 and 2024:
| December 31, 2025 | ||||||||||||||||
| Carrying value | Fair value | Cash and cash equivalents | Other Current Assets | |||||||||||||
| Cash | $ | $ | $ | $ | ||||||||||||
| Level 1: | ||||||||||||||||
| Money market funds | ||||||||||||||||
| Money market funds (Rabbi Trust) | ||||||||||||||||
| Subtotal | ||||||||||||||||
| Level 2: | ||||||||||||||||
| Certificates of deposit and time deposits | ||||||||||||||||
| Subtotal | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| December 31, 2024 | ||||||||||||||||
| Carrying value | Fair value | Cash and cash equivalents | Other Current Assets | |||||||||||||
| Cash | $ | $ | $ | $ | ||||||||||||
| Level 1: | ||||||||||||||||
| Money market funds | ||||||||||||||||
| Money market funds (Rabbi Trust) | ||||||||||||||||
| Subtotal | ||||||||||||||||
| Level 2: | ||||||||||||||||
| Certificates of deposit and time deposits | ||||||||||||||||
| Subtotal | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
As of December 31, 2025 and 2024, 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 (Level 1) inputs and amounted to $
Throughout 2025 and 2024, the Company entered into a series of foreign currency forward contracts, the fair value of which was $
The Company is a party to two interest rate swap agreements as further described in Note 13, "Derivative Instruments and Hedging Activities." The fair value of the interest rate swap agreements was $
The fair values of our derivative financial instruments (which are measured using Level 2 fair value inputs) and their classifications in our consolidated balance sheets as of December 31, 2025 and 2024 were as follows:
| Balance Sheet Classification | December 31, 2025 | December 31, 2024 | |||||||
| Derivative assets: | |||||||||
| Foreign currency forward contracts: | |||||||||
| Designated as cash flow hedges | Other current assets | $ | $ | ||||||
| Non designated as hedging instruments | Other current assets | ||||||||
| Interest rate swap agreements: | |||||||||
| Designated as a cash flow hedge | Other | ||||||||
| Total derivative assets | $ | $ | |||||||
| Derivative liabilities: | |||||||||
| Foreign currency forward contracts: | |||||||||
| Designated as cash flow hedges | Other current liabilities | $ | $ | ||||||
| Not designated as hedging instruments | Other current | ||||||||
| Total derivative liabilities | $ | $ | |||||||
In connection with the acquisition of Enercon as further described in Note 3, "Acquisition", the Sellers are eligible to receive the potential Earnout Payments based on the achievement of certain financial metrics in 2025 and 2026 Earnout Periods. 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 sheets at December 31, 2025 and December 31, 2024. The earnout liabilities were initially recorded at a fair value of $
| Level 3 | |||||||||
| Balance Sheet Classification | December 31, 2025 | December 31, 2024 | |||||||
| Contingent Liabilities: | |||||||||
| Earnout Payment liability - 2025 | Other current liabilities | $ | $ | ||||||
| Earnout Payment liability - 2026 | Other long-term liabilities | ||||||||
| $ | $ | ||||||||
The change in the earnout liability balances from December 31, 2024 to December 31, 2025 relate solely to changes in the fair value of the Earnout Payments which have been recognized through earnings during the year ended December 31, 2025.
Aside from the earnout liability described above, the Company does not have any other financial assets measured at fair value on a recurring basis categorized as Level 3, and there were no transfers in or out of Level 1, Level 2 or Level 3 during 2025 or 2024. There were no changes to the Company’s valuation techniques used to measure asset fair values on a recurring or nonrecurring basis during 2025.
During the year ended December 31, 2025, the Company performed its annual impairment test of indefinite-lived intangible assets and determined that impairment charges were required. In the prior year, ended December 31, 2024, the Company recorded an adjustment to the carrying value of the CUI tradename, reducing it to its estimated fair value. This adjustment was recognized as an impairment loss within the consolidated statements of operations. Aside from the CUI tradename impairment in 2024, the Company did have any other financial assets or indefinite-lived intangible assets measured at fair value on a nonrecurring basis as of December 31, 2025 or December 31, 2024. The Company does not have any financial assets measured at fair value on a nonrecurring basis as of either reporting date, except as noted above.
The Company has other financial instruments, such as cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, which are not 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, 2025 and 2024, the estimated fair value of total debt was $
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 Note 5, "Goodwill and Other Intangible Assets," for further information about goodwill and other indefinite-lived intangible assets.
| 7. | OTHER ASSETS |
At December 31, 2025 and 2024, the Company had obligations of $
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 does not 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 $
Other Investments
At December 31, 2025 and 2024, the Company held, in the aforementioned rabbi trust, available-for-sale investments at a cost of million at each date. 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, 2025 and 2024, the fair market value of these investments was million at each date.
| 8. |
INVENTORIES |
The components of inventories are as follows:
| December 31, |
||||||||
| 2025 |
2024 |
|||||||
| Raw materials |
$ | $ | ||||||
| Work in progress |
||||||||
| Finished goods |
||||||||
| Inventories |
$ | $ | ||||||
| 9. |
PROPERTY, PLANT AND EQUIPMENT, NET |
Property, plant and equipment, net consist of the following:
| December 31, |
||||||||
| 2025 |
2024 |
|||||||
| Land |
$ | $ | ||||||
| Buildings and improvements |
||||||||
| Machinery and equipment |
||||||||
| Construction in progress |
||||||||
| Accumulated depreciation |
( |
) | ( |
) | ||||
| Property, plant and equipment, net |
$ | $ | ||||||
Depreciation expense for the years ended December 31, 2025, 2024 and 2023 was $
| 10. | INCOME TAXES |
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company is no longer subject to U.S. federal examinations by tax authorities for years before 2022 and for state examinations before 2019. Regarding foreign subsidiaries, the Company is no longer subject to examination by tax authorities for years before 2015 in Asia and generally 2017 in Europe.
On July 4, 2025, the United States Congress enacted The One Big Beautiful Bill Act (the “Act”) which includes several significant corporate provisions, including the restoration of 100% bonus depreciation; the immediate expensing of domestic research and experimentation expenditures; modifications to the Section 163(j) interest limitations; and updates to the rules for global intangible low-taxes income and foreign-derived intangible income. The Company recognized the impacts of the Act provisions in our financial results to the extent they are applicable to the year ended December 31, 2025. We will continue to evaluate the impact of these provisions on our 2026 and subsequent consolidated financial statements, including impacts to our international tax calculations.
Election to Expense Domestic Research and Experimentation Costs
In accordance with the requirements of Section 174 of the Internal Revenue Code, effective for the years beginning after December 31, 2021, taxpayers are required to capitalize and amortize domestic research and experimentation (R&E) expenditures over a five-year period. During 2025, the Company elected, pursuant to provisions issued under the Act to expense over two years the prior year capitalization of domestic R&E.
As a result of this election in 2025, the Company recognized an accelerated deduction for previously capitalized R&E expenditures incurred in the prior year, resulting in a reduction in taxable income for 2025 of approximately $
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:
| Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Domestic | $ | $ | $ | |||||||||
| Foreign | ||||||||||||
| $ | $ | $ | ||||||||||
Federal, state and foreign income tax expense (benefit) consists of the following:
| Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Current: | ||||||||||||
| Federal | $ | $ | $ | |||||||||
| State | ||||||||||||
| Foreign | ||||||||||||
| Deferred: | ||||||||||||
| Federal | ( | ) | ( | ) | ||||||||
| State | ( | ) | ( | ) | ||||||||
| Foreign | ( | ) | ( | ) | ||||||||
| ( | ) | ( | ) | |||||||||
| $ | $ | $ | ||||||||||
Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 1, "Description of Business and Summary of Significant Accounting Policies" under the caption “Recently Issued Accounting Standards – Recently Adopted Accounting Standards”, the reconciliation of taxes at the federal statutory rate to our provision for income taxes was as follows:
| Years Ended December 31, | ||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||
| Tax Expense | Tax Rate | Tax Expense | Tax Rate | Tax Expense | Tax Rate | |||||||||||||||||||
| U.S. Federal statutory income tax rate | $ | % | $ | % | $ | % | ||||||||||||||||||
| State and local income taxes, net of federal income tax effect (1) | ( | ) | - | % | ( | ) | - | % | ( | ) | - | % | ||||||||||||
| Foreign Tax Effects | ||||||||||||||||||||||||
| Macau | ||||||||||||||||||||||||
| Rate differential | % | ( | ) | - | % | % | ||||||||||||||||||
| Adjustments relating to prior years | % | % | % | |||||||||||||||||||||
| Change in valuation allowance | % | % | % | |||||||||||||||||||||
| Other | % | % | % | |||||||||||||||||||||
| PRC | ||||||||||||||||||||||||
| Rate differential | % | % | % | |||||||||||||||||||||
| Nontaxable controlled foreign corporation ("CFC") income | % | % | ( | ) | - | % | ||||||||||||||||||
| Withholding tax on Dividends | % | % | ( | ) | - | % | ||||||||||||||||||
| Change in valuation allowance | % | % | ( | ) | - | % | ||||||||||||||||||
| Other | % | % | ( | ) | - | % | ||||||||||||||||||
| Other foreign jurisdictions | % | % | % | |||||||||||||||||||||
| % | % | ( | ) | - | % | |||||||||||||||||||
| Effects of changes in tax laws/rates enacted in the current period | ||||||||||||||||||||||||
| Effects of cross-border tax laws | ||||||||||||||||||||||||
| Global intangible low-taxed income | % | % | % | |||||||||||||||||||||
| Foreign-derived intangible income | % | % | ( | ) | - | % | ||||||||||||||||||
| Adjustments to transition tax | % | % | % | |||||||||||||||||||||
| Tax credits | ||||||||||||||||||||||||
| Research and development tax credits | ( | ) | - | % | % | ( | ) | - | % | |||||||||||||||
| Changes in valuation allowances | % | % | ( | ) | - | % | ||||||||||||||||||
| Nontaxable or nondeductible items | ||||||||||||||||||||||||
| Share-based payment awards | ( | ) | - | % | ( | ) | - | % | ( | ) | - | % | ||||||||||||
| Change in COLI | ( | ) | - | % | ( | ) | - | % | ( | ) | - | % | ||||||||||||
| Intercompany bad debt | % | % | % | |||||||||||||||||||||
| Section 162(m) limitation | % | % | % | |||||||||||||||||||||
| Other | % | % | ( | ) | - | % | ||||||||||||||||||
| Changes in unrecognized tax benefits | ( | ) | - | % | ( | ) | - | % | ( | ) | - | % | ||||||||||||
| Other adjustments | % | % | % | |||||||||||||||||||||
| Effective tax rate | $ | % | $ | % | $ | % | ||||||||||||||||||
(1) The states and local jurisdictions that contribute the majority (greater than 50%) of the tax effect in this category include Minnesota, California, Florida, and New Jersey.
Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 1, "Description of Business and Summary of Significant Accounting Policies" under the caption “Recently Issued Accounting Standards – Recently Adopted Accounting Standards”, cash paid for income taxes, net of refunds, was as follows:
| Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Federal | $ | $ | $ | |||||||||
| State and Local | ||||||||||||
| Foreign | ||||||||||||
| Slovakia | ||||||||||||
| United Kingdom | ||||||||||||
| Macau | ||||||||||||
| PRC | ||||||||||||
| Israel | ||||||||||||
| Other | ||||||||||||
| Total foreign taxes paid | ||||||||||||
| Total income taxes paid | $ | $ | $ | |||||||||
As of December 31, 2025 and 2024, the Company has gross foreign net operating losses (“NOLs”) of $
As of December 31, 2025, we are not indefinitely reinvested with respect to undistributed earnings from some of our Asian subsidiaries. There was no 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 is not 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:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Tax Effect | Tax Effect | |||||||
| Deferred tax assets: | ||||||||
| State tax credits | $ | $ | ||||||
| Reserves and accruals | ||||||||
| Federal, state and foreign net operating loss and credit carryforwards | ||||||||
| Depreciation | ||||||||
| Amortization | ||||||||
| Lease accounting | ||||||||
| Other accruals | ||||||||
| Total deferred tax assets | ||||||||
| Valuation allowance | ||||||||
| Net deferred tax assets | ||||||||
| Deferred tax liabilities: | ||||||||
| Unfunded pension liability | ||||||||
| Depreciation | ||||||||
| Amortization | ||||||||
| Lease accounting | ||||||||
| Other accruals | ||||||||
| Total deferred tax liabilities | ||||||||
| Net deferred tax liabilities | $ | ( | ) | $ | ( | ) | ||
At December 31, 2025, 2024 and 2023, the Company has approximately $
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:
| Year Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Liability for uncertain tax positions - January 1 | $ | $ | ||||||
| Additions based on tax positions related to the current year | ||||||||
| Translation adjustment | ||||||||
| Settlement/expiration of statutes of limitations | ( | ) | ( | ) | ||||
| Liability for uncertain tax positions - December 31 | $ | $ | ||||||
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, 2025, 2024 and 2023, the Company recognized $
| 11. | DEBT |
The Company has a Credit and Security Agreement with KeyBank National Association (as amended, the "Credit Agreement" or the "CSA") which currently provides for a maximum revolving credit facility of $
Pursuant to the Fourth Amendment, the parties additionally agreed to the text of a Conformed Amended and Restated Credit and Security Agreement (the “Conformed Amended and Restated Credit and Security Agreement”), which amended and restated the text of the Credit Agreement including so as to reflect and integrate the changes implemented pursuant to the Fourth Amendment, as well as the changes implemented pursuant to the previously disclosed First Amendment Agreement dated as of January 12, 2023, the Second Amendment Agreement dated as of September 18, 2024 and the Third Amendment Agreement dated as of November 14, 2024.
At December 31, 2025 and 2024, outstanding borrowings under the revolver amounted to $
The effective rate of interest for our total outstanding borrowings, including the impact of the 2021 Swaps discussed below, was
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 $
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 a first 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
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
Revolving loans borrowed under the Credit Agreement mature on September 1, 2028, 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, 2025, 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, 2025 are as follows (in thousands):
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| Total long-term debt | ||||
| Less: Current maturities of long-term debt | ||||
| Noncurrent portion of long-term debt | $ |
| 12. | ACCRUED EXPENSES |
Accrued expenses consist of the following:
| December 31, |
||||||||
| 2025 |
2024 |
|||||||
| Salaries, bonuses and related benefits |
$ | $ | ||||||
| Accrued restructuring costs |
||||||||
| Sales commissions |
||||||||
| Warranty accrual |
||||||||
| Other |
||||||||
| $ | $ | |||||||
The change in warranty accruals for the year ended December 31, 2025, primarily reflects repair costs incurred and adjustments to pre-existing warranty obligations. New material warranty charges incurred during 2025 were less than $
Restructuring Activities:
Activity and liability balances related to restructuring costs for the years ended December 31, 2024 and 2025 are as follows:
| 2024 |
2025 |
|||||||||||||||||||||||||||
| Liability at |
Cash Payments |
Liability at |
Cash Payments |
Liability at |
||||||||||||||||||||||||
| December 31, |
New |
and Other |
December 31, |
New Charges/ |
and Other |
December 31, |
||||||||||||||||||||||
| 2023 |
Charges |
Settlements |
2024 |
Other Adjustments |
Settlements |
2025 |
||||||||||||||||||||||
| Severance costs |
$ | $ | $ | ( |
) | $ | $ | $ | ( |
) | $ | |||||||||||||||||
| Other restructuring costs |
( |
) | ( |
) | ||||||||||||||||||||||||
| Total |
$ | $ | $ | ( |
) | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
The 2024 charges and ending liability balance at December 31, 2024 noted above for severance costs largely relate to an initiative within our ITDS segment related to the transition of our fuse operations to other existing sites and also within our ADRS 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 ITDS segment. The balances in other restructuring costs in the table above as of December 31, 2024 largely related to remaining liabilities associated with the Company's facility consolidation project in the PRC.
The balance of accrued restructuring costs at December 31, 2025 largely related to remaining liabilities associated with the Company's facility consolidation project in the PRC whereby two of our ITDS manufacturing sites were consolidated into a single new site. During 2025, the Company recorded a $
| 13. | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES |
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 and not 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, Israeli shekel and the Mexican peso. These foreign currency forward contracts generally have maturities of no longer than twelve months, although occasionally we will execute a contract that extends beyond twelve months, depending upon the nature of the underlying risk.
We held outstanding foreign currency forward contracts with notional amounts of $
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 of two multinational financial institutions under which we (i) pay interest at a fixed rate of
The 2021 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.
Fair Values of Derivative Financial Instruments
See Note 6, "Fair Value Measurements" for the gross fair values of the Company's derivative assets and liabilities as of December 31, 2025 and 2024.
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, 2025, 2024 and 2023 were as follows:
| Year Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Net gains (losses) recognized in AOCL: | ||||||||||||
| Foreign currency forward contracts | $ | $ | ( | ) | $ | ( | ) | |||||
| Interest rate swap agreements | ||||||||||||
| $ | $ | $ | ( | ) | ||||||||
| Net (losses) gains reclassified from AOCL to the consolidated statement of operations: | ||||||||||||
| Foreign currency forward contracts | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Interest rate swap agreements | ||||||||||||
| $ | $ | $ | ||||||||||
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, 2025, 2024 and 2023.
Derivative Financial Instruments Not Designated as Hedging Instruments
Gains recognized on derivative financial instruments not designated as hedging instruments in our consolidated statements of operations for the years ended December 31, 2025, 2024 and 2023 were as follows:
| Year Ended December 31, | |||||||||||||
| Classification in Consolidated Statements of Operations | 2025 | 2024 | 2023 | ||||||||||
| Foreign currency forward contracts | Other income (expense), net | $ | $ | $ | |||||||||
| $ | $ | $ | |||||||||||
| 14. | SEGMENTS |
During the quarter of 2026, the Company implemented a change in its internal organizational and reporting structure to better align management reporting with customer end markets. As a result, effective March 31, 2026, the Company updated the reportable segment view used by the Company’s Chief Operating Decision Maker (“CODM”) to assess performance and allocate resources. The CODM has not changed.
Following this change, the Company has
There are no intercompany sales between segments.
On a quarterly basis, the Company’s CODM, the Chief Executive Officer, evaluates segment performance using gross profit (a U.S. GAAP measure), which the Company has determined to be its measure of segment profit or loss under ASC 280, as amended by ASU 2023-07. The CODM uses segment gross profit to make commercial and operational decisions and to evaluate capital deployment opportunities. The CODM’s quarterly reporting package also includes segment revenues and cost of sales to arrive at gross profit; cost of sales is a significant segment expense and is therefore included in the segment financial data tables below.
The following is a summary of key financial data for each of the three years ended December 31, 2025, 2024 and 2023.
| Year Ended December 31, 2025 | ||||||||||||
| Aerospace, Defense & Rugged Solutions | Industrial Technology & Data Solutions | Total | ||||||||||
| Net sales | $ | $ | $ | |||||||||
| Cost of sales | ||||||||||||
| Segment gross profit | ||||||||||||
| Segment gross profit % | % | % | % | |||||||||
| Corporate and other | ( | ) | ||||||||||
| Total consolidated gross profit | ||||||||||||
| Gross profit % | % | |||||||||||
| Research and development costs | ||||||||||||
| Selling, general and administrative expenses | ||||||||||||
| Restructuring credits | ( | ) | ||||||||||
| Gain on sale of properties | ( | ) | ||||||||||
| Earnout liability adjustment | ||||||||||||
| Interest expense | ||||||||||||
| Interest income | ( | ) | ||||||||||
| Impairment of equity method investment and related party notes | ||||||||||||
| Other income, net | ( | ) | ||||||||||
| Earnings before provision for income taxes | $ | |||||||||||
| Year Ended December 31, 2024 | ||||||||||||
| Aerospace, Defense & Rugged Solutions | Industrial Technology & Data Solutions | Total | ||||||||||
| Net sales | $ | $ | $ | |||||||||
| Cost of sales | ||||||||||||
| Segment gross profit | ||||||||||||
| Segment gross profit % | % | % | % | |||||||||
| Corporate and other | ( | ) | ||||||||||
| Total consolidated gross profit | ||||||||||||
| Gross profit % | % | |||||||||||
| Research and development costs | ||||||||||||
| Selling, general and administrative expenses | ||||||||||||
| Impairment of CUI tradename | ||||||||||||
| Restructuring charges | ||||||||||||
| Interest expense | ||||||||||||
| Interest income | ( | ) | ||||||||||
| Other income, net | ||||||||||||
| Earnings before provision for income taxes | $ | |||||||||||
| Year Ended December 31, 2023 | ||||||||||||
| Aerospace, Defense & Rugged Solutions | Industrial Technology & Data Solutions | Total | ||||||||||
| Net sales | $ | $ | $ | |||||||||
| Cost of sales | ||||||||||||
| Segment gross profit | ||||||||||||
| Segment gross profit % | % | % | % | |||||||||
| Corporate and other | ( | ) | ||||||||||
| Total consolidated gross profit | ||||||||||||
| Gross profit % | % | |||||||||||
| Research and development costs | ||||||||||||
| Selling, general and administrative expenses | ||||||||||||
| Restructuring charges | ||||||||||||
| Gain on sale of properties | ( | ) | ||||||||||
| Gain on sale of Czech Republic business | ( | ) | ||||||||||
| Interest expense | ||||||||||||
| Interest income | ( | ) | ||||||||||
| Other income, net | ||||||||||||
| Earnings before provision for income taxes | $ | |||||||||||
| Year Ended December 31, 2025 | ||||||||||||||||||||
| Aerospace, Defense & Rugged Solutions | Industrial Technology & Data Solutions | Reportable segment total | Corporate and other | Consolidated | ||||||||||||||||
| Total Assets | $ | $ | $ | $ | $ | |||||||||||||||
| Capital Expenditures | ||||||||||||||||||||
| Depreciation and Amortization Expense | ||||||||||||||||||||
| Interest Expense | ||||||||||||||||||||
| Year Ended December 31, 2024 | ||||||||||||||||||||
| Aerospace, Defense & Rugged Solutions | Industrial Technology & Data Solutions | Reportable segment total | Corporate and other | Consolidated | ||||||||||||||||
| Total Assets | $ | $ | $ | $ | $ | |||||||||||||||
| Capital Expenditures | ||||||||||||||||||||
| Depreciation and Amortization Expense | ||||||||||||||||||||
| Interest Expense | ||||||||||||||||||||
| Year Ended December 31, 2023 | ||||||||||||||||||||
| Aerospace, Defense & Rugged Solutions | Industrial Technology & Data Solutions | Reportable segment total | Corporate and other | Consolidated | ||||||||||||||||
| Total Assets | $ | $ | $ | $ | $ | |||||||||||||||
| Capital Expenditures | ||||||||||||||||||||
| Depreciation and Amortization Expense | ||||||||||||||||||||
| Interest Expense | ||||||||||||||||||||
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.
| Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Net Sales by Geographic Location: | ||||||||||||
| United States | $ | $ | $ | |||||||||
| People's Republic of China (PRC) | ||||||||||||
| Macao | ||||||||||||
| United Kingdom | ||||||||||||
| Slovakia | ||||||||||||
| Germany | ||||||||||||
| India | ||||||||||||
| Switzerland | ||||||||||||
| Israel | ||||||||||||
| All other foreign countries | ||||||||||||
| Consolidated net sales | ||||||||||||
| Net Sales by Major Product Line: | ||||||||||||
| Aerospace, Defense & Rugged Solutions | $ | $ | $ | |||||||||
| Industrial Technology & Data Solutions | ||||||||||||
| Consolidated net sales | $ | $ | $ | |||||||||
The following is a summary of long-lived assets by geographic area as of December 31, 2025 and 2024:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Long-lived Assets by Geographic Location: | ||||||||
| United States | $ | $ | ||||||
| People's Republic of China (PRC) | ||||||||
| Slovakia | ||||||||
| Israel | ||||||||
| United Kingdom | ||||||||
| All other foreign countries | ||||||||
| Consolidated long-lived assets | $ | $ | ||||||
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 of 1997. The territory of Macao became a SAR of the PRC at the end of 1999. 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
Net Sales to Major Customers
The Company had
| 15. | RETIREMENT FUND AND PROFIT SHARING PLAN |
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 sections 401(a) and (k) of the Internal Revenue Code of 1986, 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
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
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
The Company maintains a SERP (sometimes referenced in this discussion as the “Plan”), 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 in 2002 and was amended and restated in April 2007 to conform with applicable requirements of Section 409A 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 Note 7, "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, and 5 years of Plan participation), his normal retirement benefit under the Plan would be annual payments equal to
Net Periodic Benefit Cost
The net periodic benefit cost related to the SERP consisted of the following components during the years ended December 31, 2025, 2024 and 2023:
| Years Ended December 31, |
||||||||||||
| 2025 |
2024 |
2023 |
||||||||||
| Service Cost |
$ | $ | $ | |||||||||
| Interest Cost |
||||||||||||
| Net amortization |
( |
) | ||||||||||
| Net periodic benefit cost |
$ | $ | $ | |||||||||
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.
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, 2025 and 2024 are as follows:
| Years Ended December 31, |
||||||||
| 2025 |
2024 |
|||||||
| Fair value of Plan assets, January 1 |
$ | - | $ | - | ||||
| Company contributions |
||||||||
| Benefits paid |
( |
) | ( |
) | ||||
| Fair value of Plan assets, December 31 |
$ | - | $ | - | ||||
| Benefit obligation, January 1 |
$ | $ | ||||||
| Service cost |
||||||||
| Interest cost |
||||||||
| Benefits paid |
( |
) | ( |
) | ||||
| Actuarial loss (gain) |
( |
) | ||||||
| Benefit obligation, December 31 |
$ | $ | ||||||
| Underfunded status, December 31 |
$ | ( |
) | $ | ( |
) | ||
The Company has recorded the 2025 and 2024 underfunded status as a long-term liability on the consolidated balance sheets. The accumulated benefit obligation for the SERP was $
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 million. The Company expects to make contributions of $
The following benefit payments, which reflect expected future service, are expected to be paid:
| Years Ending |
|||||
| December 31, |
|||||
| 2026 |
$ | ||||
| 2027 |
|||||
| 2028 |
|||||
| 2029 |
|||||
| 2030 |
|||||
| 2031 - 2035 |
The following gross amounts are recognized net of tax in accumulated other comprehensive loss:
| December 31, |
||||||||||||
| 2025 |
2024 |
2023 |
||||||||||
| Prior service cost |
$ | $ | $ | |||||||||
| Net 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:
| Years Ended December 31, |
||||||||||||
| 2025 |
2024 |
2023 |
||||||||||
| Net periodic benefit cost: |
||||||||||||
| Discount rate |
% | % | % | |||||||||
| Rate of compensation increase |
% | % | % | |||||||||
| Benefit obligation: |
||||||||||||
| Discount rate |
% | % | % | |||||||||
| Rate of compensation increase |
% | % | % | |||||||||
| 16. | SHARE-BASED COMPENSATION |
The Company has an equity compensation program (the "Program") which provides for the granting of "Incentive Stock Options" within the meaning of Section 422 of the Code, 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. The 2020 Equity Compensation Plan provides for the issuance of
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 $
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 in one- increments on the first, second and third 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
Performance Stock Units (PSUs)
In 2025, the Company began granting performance stock units (“PSUs”) to certain associates as part of its long-term incentive compensation program. During the year ended December 31, 2025, a total of
The PSUs granted in 2025 are subject to both a service condition and a market performance condition, each measured over a -year performance period. The actual number of shares earned at the end of the performance period may range from
The grant-date fair value of the PSUs granted in 2025 was $
During the year ended December 31, 2025, the Company recognized stock-based compensation expense related to PSUs of $
A summary of the restricted stock activity under the Program for the year ended December 31, 2025 is presented below:
| Restricted Stock Awards | Shares | Weighted Average Award Price | Weighted Average Remaining Contractual Term (In Years) | |||||||||
| Outstanding at January 1, 2025 | $ | |||||||||||
| Granted | ||||||||||||
| Vested | ( | ) | ||||||||||
| Forfeited | ( | ) | ||||||||||
| Outstanding at December 31, 2025 | $ | |||||||||||
As of December 31, 2025, there was $
| 17. | COMMON STOCK |
Throughout 2025, 2024 and 2023, the Company declared cash dividends on a quarterly basis at a rate of $
| 18. | LEASES |
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 year to 9 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 is not 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:
| Year Ended December 31, |
||||||||||||
| 2025 |
2024 |
2023 |
||||||||||
| Amortization of ROU assets - finance leases |
$ | $ | $ | |||||||||
| Interest on lease liabilities - finance leases |
||||||||||||
| Operating lease cost (cost resulting from lease payments) |
||||||||||||
| Short-term lease cost |
||||||||||||
| Variable lease cost (cost excluded from lease payments) |
||||||||||||
| Total lease cost |
$ | $ | $ | |||||||||
Supplemental cash flow information related to leases is as follows:
| Year Ended December 31, |
||||||||||||
| 2025 |
2024 |
2023 |
||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: |
||||||||||||
| Operating cash flows from operating leases |
$ | $ | $ | |||||||||
| Operating cash flows from finance leases |
||||||||||||
| Finance cash flows from finance leases |
||||||||||||
| Right-of-use assets obtained in exchange for lease obligations: |
||||||||||||
| Operating leases |
||||||||||||
| Finance leases |
||||||||||||
Supplemental balance sheet information related to leases was as follows:
| 2025 | 2024 | |||||||
| Operating Leases: | ||||||||
| Operating lease right-of-use assets | $ | $ | ||||||
| Operating lease liability, current | ||||||||
| Operating lease liability, long-term | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
| Finance Leases: | ||||||||
| Property, plant and equipment, gross | $ | $ | ||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Property, plant and equipment, net | $ | $ | ||||||
| Other current | $ | $ | ||||||
| Other long-term | ||||||||
| Total finance lease liabilities | $ | $ | ||||||
| 2025 |
2024 |
2023 |
||||||||||
| Weighted-Average Remaining Lease Term: |
||||||||||||
| Operating leases (in years) |
||||||||||||
| Finance leases (in years) |
||||||||||||
| Weighted-Average Discount Rate: |
||||||||||||
| Operating leases |
% | % | % | |||||||||
| Finance leases |
% | % | % | |||||||||
Our discount rate is based on our incremental borrowing rate, as adjusted based on the geographic regions in which our lease assets are located.
Maturities of lease liabilities were as follows as of December 31, 2025:
| Year Ending |
Operating |
Finance |
||||||
| December 31, |
Leases |
Leases |
||||||
| 2026 |
$ | $ | ||||||
| 2027 |
||||||||
| 2028 |
||||||||
| 2029 |
||||||||
| 2030 |
||||||||
| Thereafter |
||||||||
| Total undiscounted cash flows |
||||||||
| Less imputed interest |
( |
) | ( |
) | ||||
| Present value of lease liabilities |
$ | $ | ||||||
| 19. | COMMITMENTS AND CONTINGENCIES |
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 may incur penalties if an order is cancelled. The Company had outstanding purchase orders related to raw materials in the amount of $
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 styled Bel Power Solutions, Inc. v. Monolithic Power Systems, Inc., Case Number 6:21cv00655, 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's 2014 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 years 2004 to 2006. 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, 2015 before 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 $
In connection with the Company's 2021 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 to 1994. The original demand was in the amount of approximately $
The Company is not 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.
| 20. | ACCUMULATED OTHER COMPREHENSIVE LOSS |
The components of accumulated other comprehensive loss as of December 31, 2025 and 2024 are summarized below:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Foreign currency translation adjustment, net of taxes of ($) at December 31, 2025 and ($) at December 31, 2024 | $ | ( | ) | $ | ( | ) | ||
| Unrealized holding gains on interest rate swap cash flow hedge, net of taxes of $ at December 31, 2025 and $0 at December 31, 2024 | ||||||||
| Unrealized holding gains on marketable securities, net of taxes of ($) at December 31, 2025 and ($) at December 31, 2024 | ||||||||
| Unfunded SERP liability, net of taxes of $ at December 31, 2025 and $ at December 31, 2024 | ||||||||
| Accumulated other comprehensive loss | $ | ( | ) | $ | ( | ) | ||
Changes in accumulated other comprehensive (loss) income by component during the years ended December 31, 2025, 2024 and 2023 are as follows. All amounts are net of tax.
| Foreign Currency Translation Adjustment |
Unrealized Gains (Losses) on Interest Rate Swap Cash Flow Hedge |
Unrealized Holding Gains (Losses) on Marketable Securities |
Unfunded SERP Liability |
Total |
|||||||||||||||||
| Balance at January 1, 2023 |
$ | ) | $ | $ | $ | $ | ) | ||||||||||||||
| Other comprehensive income (loss) before reclassifications |
( |
) | ( |
) | |||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) |
( |
) | ( |
) | (a) |
( |
) | ||||||||||||||
| Net current period other comprehensive income (loss) |
( |
) | ( |
) | |||||||||||||||||
| Balance at December 31, 2023 |
) | ) | |||||||||||||||||||
| Other comprehensive income (loss) before reclassifications |
( |
) | ( |
) | ( |
) | |||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) |
( |
) | ( |
) | (a) |
( |
) | ||||||||||||||
| Net current period other comprehensive income (loss) |
( |
) | ( |
) | ( |
) | |||||||||||||||
| Balance at December 31, 2024 |
) | ) | |||||||||||||||||||
| Other comprehensive income (loss) before reclassifications |
( |
) | ( |
) | ( |
) | |||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) |
( |
) | (a) |
||||||||||||||||||
| Net current period other comprehensive income (loss) |
( |
) | ( |
) | |||||||||||||||||
| Balance at December 31, 2025 |
$ | ( |
) | $ | $ | $ | $ | ( |
) | ||||||||||||
| (a) | This reclassification relates to the amortization of prior service costs and gains/losses associated with the Company's SERP plan. This expense is reflected in Other income (expense), net on the accompanying consolidated statement of operations. |
BEL FUSE INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(Amounts in thousands)
| Additions |
||||||||||||||||||||
| Balance at |
|
|
Balance | |||||||||||||||||
| beginning |
Charged to costs |
Charged to other |
Deductions |
at end |
||||||||||||||||
| Description |
of period |
and expenses |
accounts (b) |
(a) |
of period |
|||||||||||||||
| Year Ended December 31, 2025 | ||||||||||||||||||||
| Allowance for doubtful accounts |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||
| Allowance for excess and obsolete inventory |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||
| Deferred tax assets - valuation allowances |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||
| Year Ended December 31, 2024 | ||||||||||||||||||||
| Allowance for doubtful accounts |
$ | $ | ( |
) | $ | ( |
) | $ | $ | |||||||||||
| Allowance for excess and obsolete inventory |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||
| Deferred tax assets - valuation allowances |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||
| Year Ended December 31, 2023 | ||||||||||||||||||||
| Allowance for doubtful accounts |
$ | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||
| Allowance for excess and obsolete inventory |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||
| Deferred tax assets - valuation allowances |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||
(a) Write-offs
(b) Includes foreign currency translation adjustments