Bel Fuse Inc. announced preliminary financial results for the second quarter of 2018 including: Net sales of $140.7 million, representing year-over-year growth of $9.1 million, or 6.9% and GAAP net earnings of $6.6 million compared to $3.1 million in second quarter 2017. GAAP EPS of $0.52 per Class A share (versus $0.24 in Q2-17) and $0.56 per Class B share (versus $0.26 in Q2-17)
The company's $176.9 million in backlog represents gain of $30.4 million, or 21%, from December 31, 2017 and an increase of 27% from a year ago. Quarterly bookings (orders received) of $150.7 million were the highest since third quarter of 2014.
Daniel Bernstein, President and CEO, said, "We are pleased to report our third consecutive quarter of year-over-year sales growth, reflecting higher sales volume across all major product groups. This was led by a 17% increase in sales through our distribution partners, which has been a strategic growth area over the past two years.
"Within our Connectivity Solutions group, we saw higher sales of our Stewart passive connectors for structured cabling applications and strength in the military segment for our Cinch optical and copper connectors used in encryption, communications and flight-grade applications.
"Sales within our Magnetic Solutions group benefited from increased demand for our Signal Transformer products for use in medical equipment and a higher volume of our integrated connector modules for next-generation switching products.
"Our Power Solutions and Protection group also had a strong quarter resulting from higher sales of power supplies for use in traditional datacenters and blockchain technology applications.
"The second quarter of 2018 marked the highest bookings quarter since the third quarter of 2014, which is very encouraging. Our backlog has increased by 27% from a year ago bringing it to $176.9 million at June 30, 2018, with increases seen across all of our major product groups. We are confident that our sales growth is sustainable, as evidenced by our strong backlog.
"While we have good visibility into the third quarter and are optimistic as to the business opportunities we see ahead, we continue to see challenges in labor and material costs, and within certain areas of the supply chain, including resistors, capacitors, mosfets and printed circuit boards. Additionally, on July 6, 2018, the U.S. Trade Representative implemented increased duty percentages across several hundred Harmonized Tariff Codes that cover several thousand products imported from the PRC into the U.S. by Bel.
"In order to contain and offset these margin challenges, we are invoicing surcharges and pricing adjustments to our customers to cover costs incurred to expedite material lead times and additional duties imposed on products imported from the PRC. In the event that any additional tariff proposals are put into effect later in 2018, we would expect to implement similar measures to preserve our gross margins," concluded Mr. Bernstein.