Fourth Quarter Results
Net sales for the three months ended December 31, 2008 decreased to $58,063,000 compared to $69,339,000 for the fourth quarter of 2007.
The net loss for the fourth quarter of 2008 of $20,853,000 included asset impairment and restructuring charges totaling $21,926,000. Charges affecting income from operations consisted of $14,066,000 impairment of goodwill, as well as $739,000 for impairment of fixed assets and restructuring charges of $793,000 for the termination of manufacturing operations at the company’s DC-DC manufacturing facility in Massachusetts. In addition, the company recognized a charge of $6,328,000 primarily associated with a write-down of the market value of Bel’s investment in the common stock of Power One Net earnings for the fourth quarter of 2007 were $10,255,000.
The net loss per diluted Class A common share was $1.78 for the fourth quarter of 2008, compared to diluted Class A common share earnings of $0.83 for the fourth quarter of 2007. The net loss per diluted Class B common share was $1.85 for the fourth quarter of 2008, compared to diluted Class B common share earnings of $0.88 for the same quarter last year.
We are taking steps to reduce costs in line with the decrease in demand for our products. We are consolidating manufacturing facilities in southeast China and relocating the more labor intensive operations to lower labor cost areas in China. In addition Bel is evaluating other initiatives to streamline operations in other countries, said Daniel Bernstein, Bel Fuse’s president.
With very limited visibility into our customers’ near-term requirements for our products, we must implement these difficult but necessary steps to improve our performance going forward. Our strong financial position, with cash, cash equivalents, short-term investments and marketable securities of around $92.7 million, gives us the flexibility we need to properly position Bel for the future, Bernstein said.
At December 31, 2008, Bel reported working capital of around $164,000,000, a current ratio of 6.5-to-1, total long-term obligations of $14,377,000, and shareholders’ equity of $217,773,000. At December 31, 2007, cash, cash equivalents, short-term investments and marketable securities were around $107,700,000, working capital was around $173,171,000, the current ratio was 6.2-to-1, total long-term obligations were $16,273,000, and shareholders’ equity was $244,527,000. Bel Fuse repurchased 10,822 Class A common shares during the fourth quarter and repurchased a total of 361,714 Class A common shares in the twelve months ended December 31, 2008.
Twelve Month Results
For the twelve months ended December 31, 2008, the net loss per diluted Class A common share was $1.28 compared to net earnings of $2.11 for 2007. The net loss per diluted Class B common share was $1.30 compared to net earnings per common share of $2.24 for the prior year.
