Bel Fuse Inc.

Good morning and welcome to Belfu's fourth quarter and full year 2024 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this call is being recorded. I would now like to turn the call over to Jean Marie Young with three-part advices. Please go ahead, Jean.

Thank you and good morning, everyone. Before we begin, I'd like to remind everyone that during today's conference call, we will make statements relating to our business that will be considered forward-looking statements under federal securities laws, such as statements regarding the company's expected operating and financial performance for future periods, including guidance for future periods in 2025. These statements are based on the company's current expectations and reflect the company's views only as of today. and should not be considered representative of the company's views as of any subsequent date. The company disclaims any obligation to update any forward-looking statements or outlook. Actual results for future periods may differ materially from those projected by these forward-looking statements due to a number of risks, uncertainties, and other factors. These material risks are summarized in the press release that we issued after market closed yesterday. Additional information about the material risks and other important factors that could potentially impact our financial performance and cause actual results to differ materially from our expectations is discussed in our findings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and our quarterly reports and other documents that we have filed or may file with the SEC from time to time. We may also discuss non-GAAP results during this call and reconciliations of our GAAP results to non-GAAP results have been included in our press release. Our press release and our SEC filings are all available at the IR section of our website. Joining me today on the call is Dan Bernstein, President and CEO through Tuix CFO, and Lynn Hutkin, Vice President of Financial Reporting and Investor Relations. With that, I'd like to turn the call over to Dan. Dan?

Thank you, Jean, very much. Okay, we are pleased with our fourth quarter and full year 2024 results, both in terms of our legacy business, as well as the first two months of performance from the recent acquisition and con business. Overall, we achieved a 410 basic points improvement in gross margin for the full year 2024 versus 2023. Despite the 16% reduction in sales from last year, This was also the second best year in Vail's history of earnings, EBITDA, and our highest stock price. A focus throughout 2024 was on two core strategies. The first is the future growth of the company, and the second, improve our cost controls. In this regard, we were successful on several fronts. We added two senior level positions focused on sales and strategic procurement. that we had not had previously. This is in addition to the other folks across the organization. The acquisition of Enercon, the largest transaction in Bell's use history, has enhanced Bell's position as a supplier of mission-critical components into harsh environment applications. Further, over the past year, we engaged in two facility consolidations, one in Glen Rock, Pennsylvania, under our connectivity segment, and the other related to the transition of our huge product line in China within our power segment. The team continues to make good progress with each of these initiatives. In the fourth quarter, the goal is to complete both in the first half of 2025. Majority of the costs associated with these consolidations were already incurred in 2024. From a cost savings perspective and the aggregate, the company realized a savings of $1.5 million. in 2024. The board will come in 2025 once these consolidations are completed. And a full year cost savings are realized. Further, there are two other properties that have been held for sale in connection with these moves. Each property is currently under contract for sale and we expect them to close during the first half of 2025. Upon completion of these two projects, we have successfully implemented six facility consolidations globally in the past three years, resulting in an annual cost savings of only $11.8 million across all the six projects. These efforts have further allowed us to reduce overhead count by 30% since the beginning of 2023 when we launched these activities. In closing, on 2024, we have demonstrated our ability to maintain our chance margins profile even during a challenging year on top loss. These accomplishments of resetting Bell's financial foundation is the result of a full global team pulling together over the past three years on a variety of fronts to improve our underlying business. When I consider all the work that's been done to position Bell for long-term success and with the collaboration with Faluk on the strategy reset, it was the right time for me to transition to the chairman role and lend all the reins to Faluk. Baruch will be the third CEO in Bell's 76-year history and makes the first time the office will be held by a person outside the Bernstein family. I am extremely excited to continue the journey of Baruch in a different capacity. I also want to thank our hardworking associates around the world for their dedication in ensuring Bell's continued commitment to success, resiliency, and ability to change.