Bel Fuse Inc. Q4 FY2025 earnings call

• 2025 was a milestone year with record revenue and EBITDA. Aerospace and defense, including space, were strong drivers. Order volumes remained strong with a full year book-to-bill ratio of 1.1. • Successfully closed China facility in Q4, optimizing global footprint. Paid down $90 million in debt in 2025. • Welcomed Tom Smelker to executive team. Recognized Pete Bittner's retirement and Dan Bernstein's transition. • R&D expenses in Q4 were $8 million, up $1.1 million from Q4 '24. SG&A expenses in Q4 '25 were $32.6 million, down $2.2 million from Q4 '24.

For the full year 2025, net sales were $675.5 million, up 26.3% from 2024. Fourth quarter sales were $175.9 million, up 17.4% year-over-year. Gross margin was 39.1% for the year. Power Solutions and Protection had Q4 sales of $92.5 million, up 18.5% y-o-y, gross margin 44.5%. Connectivity Solutions had Q4 sales of $60.5 million, up 15.1% y-o-y, gross margin 37.2%. Magnetic Solutions had Q4 sales of $22.9 million, up 19.1% y-o-y, gross margin 27.3%.

• Anticipate continued growth in aerospace, defense, space, AI, networking, consumer premise wiring markets. • Foresee increased raw material input costs and weaker USD, requiring proactive pricing management. • Pipeline for M&A activity remains active. • Expect Q1 2026 sales in range of $165 million to $180 million, gross margin in range of 37% to 39%.

• Material pricing issues like gold, copper, PCBs. • Unfavorable FX movements in peso, renminbi, shekel. • Margin pressure from FX and material costs. • Geopolitical and regulatory hurdles in facility moves.

Q: Touch on sales initiatives moving forward and win rates.

A: Long-cycle design business, new wins across end markets, better defining wins and margin, moving to systems type sales.

Q: Impact of spike in memory prices.

A: Customers are influenced, not directly impacted by memory price spike.

Q: Ability to hedge gold, copper, PCB prices and weaker dollar.

A: Hedge FX exposure, focus on solutions, pass along price increases if can't offset.

Q: Exposure to drone market in aerospace.

A: Generally have exposure, but more in military primes and OEMs, not consumer drones.

Q: Seasonality impact on guidance.

A: Chinese New Year causes two weeks of pencils down, affecting business, guidance built to midpoint of range.