Start of the Day With Chris Forte – BELFB

Posted on August 3, 2022 by Scott Shuda

The Small Cap Technology Grand Slam: Four winners on the way up, SILC, HLIT, BELFB, and RELL. Part 3

Bel Fuse (BELFB): Here’s a few reasons to care about the Jersey City, NJ designer and manufacturer of products that power, protect and connect electronic circuits across a broad spectrum of tech markets. I’ll let the company do the talking. . .

WE ARE PROUD TO REPORT OUR SIXTH CONSECUTIVE QUARTER OF YEAR-OVER-YEAR SALES GROWTH AND MARGIN IMPROVEMENT.

Q2 WAS VERY STRONG with year-over-year growth seen across each of our product groups. Overall, second quarter sales were $170 million, an INCREASE OF 23% from the second quarter of 2021. GROSS MARGIN INCREASED TO 26% as compared to 24.7%

WE ACHIEVED RECORD-BREAKING RESULTS FOR THE SECOND QUARTER IN MANY CATEGORIES. Revenue, adjusted EBITDA, bookings and backlog were all at the HIGHEST LEVEL IN BEL’S HISTORY.

Commercial aerospace continued to rebound with $7.8 million in sales, up 43% for the same period last year and up 26% sequentially. EV sales were up $6.7 million or 89% from the same period last year and up 13% sequentially. Power and magnetics continue to perform well,

We ended the quarter with a cash balance of $65.8 million. Our working capital increased by $15.3 million.

OUR BACKLOG CONTINUES TO LOOK ROBUST with continuously improving gross margins that gets us excited as to our future prospects.

The balance of 2022, we see continued demand, demonstrated by our strong backlog of orders.

While the economic concerns of 2023 have dominated the airwaves, we have not seen any meaningful signs of a slowdown.

Second Quarter 2022 Highlights:
• Net sales of $170.6 million, up 22.9% from Q2-21
• Gross profit margin of 26.6%, up from 24.7% in Q2-21
• Net earnings of $17.0 million versus $7.9 million in Q2-21
• Adjusted EBITDA of $19.1 million, representing a 65% increase compared to Q2-21
• Record quarterly bookings of $226 million led to quarter-end backlog of orders of $580 million, an increase in backlog of 24% from December 31, 2021

BELFB has a market cap of $320M and a forward P/E of 8.
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QUICKIES
*Breakout Investor
Florian Buschek posts investment wisdom called The 70/30 Framework, which states that you should seek to make a decision only if you have at least a 70% probability of making an optimal decision. At the same time, have the humility to understand that 30% of the time, you’ll make a suboptimal decision and have to live with the consequences. Read more on the Feed.
*Drive for show, putt for dough: Greg Norman says
Tiger Woods turned down LIV Golf’s $700M – $800M offer. Don’t forget to tip your caddy.
*
DLH Holdings (DLHC) scored Q3 EPS of $0.34, a beat by $0.11 and revenue of $66.4M missed by $0.6M. DLHC is a provider of innovative healthcare services to federal agencies. Market cap $227M. Seeking Alpha author Damon Judd recently called it a Strong Buy.
*
Aehr Test Systems (AEHR) had another stellar day, gaining $1.22 (9.9%) closing at 13.59. See Breakout Investor Ashleigh Day’s room for more.
*Small but feisty
BoardwalkTech Software (BWLKF) closed up 8.9%, ending at .49. At midday it spiked to .52. Check out Florian’s research for more.
*
Perion Network (PERI) in the ad-tech space, Q2 EPS of $0.51 beat by $0.11. Revenue of $146.7M (+33.7) beats by $0.3M. The company reaffirmed full year guidance despite recessionary conditions.

“We should stop calling them ‘safe houses.’ Every terrorist gets killed in a safe house. They should call it a house that you think you’re safe in, but you never know.” — TREVOR NOAH

Good luck to all – Chris

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