Bel Fuse Inc. reports 25.5% EBITDA growth in 2018 and 11.5% Revenue growth
02/21/2019 • About Bel Fuse Inc. (
$BELFA) • By InTwits
Bel Fuse Inc. reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 8.7% in 2018, 7.8% in 2017, -10.9% in 2016, 9.1% in 2015, 6.9% in 2014
- Bel Fuse Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's a lot of higher than industry average of 8.7%.
- CAPEX is quite volatile: $143m in 2018, $64m in 2017, $67m in 2016, $81m in 2015, $77m in 2014
- The company has business model with average profitability: ROIC is 10.3%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.3x while industry average is -0.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Bel Fuse Inc.'s Revenue surged on 11.5%. Revenue growth showed acceleration in 18Q4 - it increased 19.0% YoY. During 2014-2018 Revenue growth bottomed in 2016 at -11.8% and was accelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.3 pp from 3.6% to 5.8% in 2018.
Gross Margin decreased slightly on 0.79 pp from 20.8% to 20.0% in 2018. During the last 5 years Gross Margin topped in 2017 at 20.8%. SG&A as a % of Revenue decreased on 2.6 pp from 17.2% to 14.6% in 2018. During 2014-2018 SG&A as a % of Revenue topped in 2017 at 17.2%.
Net Income margin increased on 6.2 pp from -2.4% to 3.8% in 2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 2.5% in 2018. The company's CAPEX/Revenue increased slightly on 0.77 pp from 1.7% in 2015 to 2.5% in 2018. Average CAPEX/Revenue for the last three years was 1.8%. During the last 5 years CAPEX as a % of Revenue bottomed in 2017 at 1.3%.
Return on investment
The company operates at good ROE (12.4%) while ROIC is low (10.3%). ROIC increased on 4.3 pp from 6.0% to 10.3% in 2018. ROE surged on 19.9 pp from -7.5% to 12.4% in 2018.
Leverage (Debt)
Debt level is 1.3x Net Debt / EBITDA and 2.4x Debt / EBITDA. Net Debt / EBITDA dropped on 0.1x from 1.4x to 1.3x in 2018. Debt decreased on 6.9% while cash dropped on 22.3%.
Bel Fuse Inc. has no short term refinancing risk: cash is higher than short term debt (2,149.6%).
Valuation and dividends
Bel Fuse Inc.'s trades at EV/EBITDA 2.2x and P/E 2.1x.
Management team
Daniel Bernstein is a Bel Fuse Inc.'s CEO. Daniel Bernstein is a founder and has spent 18 years with the company.
Financial and operational results
FY ended 12/31/2018
Bel Fuse Inc. ($BELFA) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 487.1 | 567.1 | 500.2 | 491.6 | 548.2 | 11.5% |
| Gross Profit | 87.4 | 108.8 | 99.9 | 102.3 | 109.8 | 7.3% |
| SG&A | 50.6 | 78.1 | 71.0 | 84.7 | 79.9 | -5.6% |
| EBITDA | 33.8 | 51.6 | -54.7 | 38.1 | 47.8 | 25.5% |
| Net Income | 8.6 | 19.2 | -64.8 | -11.9 | 20.7 | |
Balance Sheet
|
|---|
| Cash | 77.1 | 85.0 | 73.4 | 69.4 | 53.9 | -22.3% |
| Short Term Debt | 13.4 | 24.8 | 11.4 | 2.6 | 2.5 | -5.0% |
| Long Term Debt | 219.2 | 162.4 | 129.9 | 120.1 | 111.7 | -7.0% |
Cash flow
|
|---|
| Capex | 9.0 | 9.9 | 8.2 | 6.4 | 13.8 | 114.3% |
Ratios
|
|---|
| Revenue growth | 39.5% | 16.4% | -11.8% | -1.7% | 11.5% | |
| EBITDA growth | 23.4% | 52.5% | -206.1% | -169.6% | 25.5% | |
|
|---|
| Gross Margin | 17.9% | 19.2% | 20.0% | 20.8% | 20.0% | -0.8% |
| EBITDA Margin | 6.9% | 9.1% | -10.9% | 7.8% | 8.7% | 1.0% |
| SG&A, % of revenue | 10.4% | 13.8% | 14.2% | 17.2% | 14.6% | -2.6% |
| Net Income Margin | 1.8% | 3.4% | -13.0% | -2.4% | 3.8% | 6.2% |
| CAPEX, % of revenue | 1.9% | 1.7% | 1.6% | 1.3% | 2.5% | 1.2% |
|
|---|
| ROIC | 3.8% | 6.4% | -20.9% | 6.0% | 10.3% | 4.3% |
| ROE | 3.8% | 8.4% | -33.1% | -7.5% | 12.4% | 19.9% |
| Net Debt/EBITDA | 4.6x | 2.0x | | 1.4x | 1.3x | -0.1x |
Bel Fuse Inc. ($BELFA) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 118 | 141 | 146 | 143 | | 4.0% | 6.9% | 15.9% | 19.0% |
| EBITDA | 5 | 15 | 15 | 12 | | -31.2% | 21.5% | 24.0% | 108.8% |
| Net Income | -1 | 7 | 11 | 4 | | -274.7% | 112.6% | 126.0% | |
Balance Sheet
|
|---|
| Cash | 67 | 56 | 54 | 54 | | -7.5% | -5.0% | -21.7% | -22.3% |
| Short Term Debt | 3 | 3 | 3 | 3 | | -80.4% | -82.6% | -5.1% | -5.0% |
| Long Term Debt | 119 | 113 | 112 | 112 | | -7.8% | -2.7% | -6.4% | -7.0% |
Ratios
|
|---|
| Gross Margin | 17.9% | 20.6% | 19.9% | 21.3% | | -2.7% | -1.5% | -2.0% | 2.8% |
| EBITDA Margin | 4.4% | 10.8% | 10.2% | 8.7% | | -2.3% | 1.3% | 0.7% | 3.8% |
| Net Income Margin | -1.1% | 4.7% | 7.7% | 2.8% | | -1.8% | 2.3% | 3.8% | 20.2% |
Peers in Electronic Components
Below you can find Bel Fuse Inc. benchmarking vs. other companies in Electronic Components industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Superconductor Technologies Inc. ($SCON) | | -61.4% | -46.3% | 240.5% | 248.9% |
| Akoustis Technologies, Inc. ($AKTS) | | | | | 148.3% |
| CPS Technologies Corp. ($CPSH) | | -5.9% | -29.5% | -5.0% | 48.0% |
| Littelfuse, Inc. ($LFUS) | | 1.9% | 21.7% | 15.7% | 40.7% |
| Cavitation Technologies Inc ($CVAT) | | -73.6% | 267.5% | -40.9% | 22.6% |
| |
|---|
| Median (22 companies) | | -5.9% | 2.1% | 8.3% | 16.6% |
|---|
| Bel Fuse Inc. ($BELFA) | | 16.4% | -11.8% | -1.7% | 11.5% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Cavitation Technologies Inc ($CVAT) | 93.5% | 85.0% | 93.2% | 93.5% | 90.6% |
| Dolby Laboratories ($DLB) | 92.7% | 90.2% | 89.4% | 89.1% | 87.9% |
| Flexpoint Sensor Systems Inc ($FLXT) | 96.7% | 95.2% | 92.7% | 87.9% | 86.1% |
| Airgain, Inc. ($AIRG) | 44.6% | 41.9% | 44.4% | 47.1% | 43.7% |
| II-VI Incorporated ($IIVI) | 33.2% | 36.6% | 37.8% | 40.0% | 39.8% |
| |
|---|
| Median (22 companies) | 33.2% | 36.7% | 33.7% | 38.3% | 37.6% |
|---|
| Bel Fuse Inc. ($BELFA) | 17.9% | 19.2% | 20.0% | 20.8% | 20.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Corning Incorporated ($GLW) | 32.2% | 27.5% | 27.9% | 27.3% | 25.4% |
| Dolby Laboratories ($DLB) | 34.1% | 29.1% | 30.9% | 30.8% | 25.1% |
| Amphenol Corporation ($APH) | 22.5% | 22.9% | 22.6% | 23.6% | 24.2% |
| Vishay Intertechnology, Inc. ($VSH) | 14.8% | 11.9% | 15.4% | 18.7% | 21.3% |
| IEH Corp ($IEHC) | 18.4% | 21.2% | 18.0% | 16.3% | 20.2% |
| |
|---|
| Median (22 companies) | 9.4% | 12.2% | 14.1% | 11.4% | 12.7% |
|---|
| Bel Fuse Inc. ($BELFA) | 6.9% | 9.1% | -10.9% | 7.8% | 8.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Akoustis Technologies, Inc. ($AKTS) | | | | 334.0% | 574.7% |
| CBAK Energy Technology, Inc. ($CBAK) | 8.0% | 92.4% | 57.2% | 20.6% | 30.1% |
| Corning Incorporated ($GLW) | 11.1% | 13.7% | 12.0% | 17.8% | 19.9% |
| II-VI Incorporated ($IIVI) | 4.3% | 7.1% | 7.0% | 14.3% | 13.2% |
| Superconductor Technologies Inc. ($SCON) | 586.1% | 57.8% | 0.0% | 34.1% | 12.1% |
| |
|---|
| Median (22 companies) | 4.2% | 3.1% | 3.4% | 5.1% | 4.1% |
|---|
| Bel Fuse Inc. ($BELFA) | 1.9% | 1.7% | 1.6% | 1.3% | 2.5% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Vishay Intertechnology, Inc. ($VSH) | 8.3% | 4.5% | 9.8% | 18.4% | 27.8% |
| IEH Corp ($IEHC) | 27.7% | 28.2% | 24.2% | 19.2% | 26.1% |
| Amphenol Corporation ($APH) | 19.1% | 18.5% | 18.3% | 19.2% | 21.1% |
| Inrad Optics Inc ($INRD) | -26.7% | -5.2% | -9.2% | -10.4% | 17.7% |
| Littelfuse, Inc. ($LFUS) | 14.3% | 11.1% | 11.7% | 15.8% | 12.1% |
| |
|---|
| Median (22 companies) | 6.9% | 5.8% | 6.4% | 7.0% | 7.8% |
|---|
| Bel Fuse Inc. ($BELFA) | 3.8% | 6.4% | -20.9% | 6.0% | 10.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Belden Inc ($BDC) | 3.9x | 5.2x | 2.1x | 2.6x | 2.3x |
| Inrad Optics Inc ($INRD) | | 9.9x | | | 1.4x |
| Corning Incorporated ($GLW) | -0.7x | -0.0x | -0.5x | 0.3x | 1.3x |
| Amphenol Corporation ($APH) | 1.4x | 0.8x | 1.4x | 1.1x | 1.2x |
| II-VI Incorporated ($IIVI) | 0.7x | 0.0x | 0.1x | 0.5x | 0.9x |
| |
|---|
| Median (14 companies) | -0.6x | -0.3x | -0.5x | -0.3x | 0.5x |
|---|
| Bel Fuse Inc. ($BELFA) | 4.6x | 2.0x | | 1.4x | 1.3x |
