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CEO Comments
Daniel Bernstein, President and CEO, said, "With the operating efficiencies the Company identified in 2015 and 2016 and $17 million in annual cost savings now fully implemented, we are pleased with the financial performance that we achieved in the year, despite the sales decline. That said, we are working hard to pursue every path available to us to reinvigorate the top line and grow the business in 2017. The recent addition of Vincent Vellucci to the Board was key to the signing of our global agreement with Arrow in the fourth quarter. As the former President of Americas Components at Arrow, he has provided valuable insights as to how to improve our utilization of this channel to increase Bel's revenue. Our North American sales organization has been realigned to implement better accountability programs for our sales team and reward them for clearly defined performance. In Europe, we shifted from a single sales organization for all our products to two distinct groups, each with their own areas of concentration. One group will support the Cinch brand with focus on the military and aerospace markets; the other group will be under the Bel umbrella and will serve networking, data storage, industrial and telecommunications customers. Our pipeline for new opportunities is growing, which bodes well for future sales, and we will continue to invest in our R&D to meet this demand.

"This was a challenging year for our Power Solutions business as our engineering and sales teams worked hard to generate new design wins following missed design cycles due to pre-acquisition quality issues. Despite the decline in sales in the fourth quarter, we are pleased with our new design efforts made within our Power Solutions business this year. Much of our focus has been on data center initiatives, as well as in the area of e-Mobility, and these efforts have started to translate into a recent increase in our backlog for these products.

"Bel's Cinch Connectivity Solutions business saw sales decline in the fourth quarter as a result of general weakness within the military and industrial segments as well as through distribution where reduced demand from broadline distributors offset increases from our value-added distributors. We expect to see a slight improvement in sales of our connectivity products in 2017, primarily within the commercial aerospace segment, and to a lesser extent in the military segment. Our labor efficiencies continue to improve within this group, including the previously-announced closure of our Shanghai manufacturing facility in the fourth quarter of 2016. We anticipate profitability within this group to increase in 2017 on marginally improved sales.

"Bel's Magnetic Solutions group continues to be the market leader in the deployment of 10-gigabit Ethernet connector modules, though sales volumes were impacted by general market weakness during the fourth quarter. We have now completed initial development and are actively working with strategic customers to begin shipments of our next generation multi-gigabit Ethernet connector modules that now include 2.5 and 5-gigabit options. These new products address the need for a more flexible and cost effective solution between the currently available 1-gigabit and 10-gigabit devices on the market today," concluded Mr. Bernstein.

Financial Summary

All comparative percentages are on a year-over-year basis, unless otherwise noted.

Fourth Quarter 2016 Results

Net Sales
Net sales were $118.5 million, down 12.4% from last year's fourth quarter. By geographic segment, North America was down by 18.2%, Asia was down by 8.6% and Europe was up by 3.4%. By product group, Power Solutions and Protection sales were 21.3% lower, Connectivity Solutions was down by 9.8% and Magnetics Solutions was down by 4.2%. During the fourth quarter of 2016, 34% of our sales related to our Power Solutions and Protection products (compared to 37% for the same period of 2015), 33% related to our Connectivity Solutions products (compared to 32% in 2015) and 34% related to our Magnetic Solutions products (compared to 31% in 2015).

Of the $16.7 million decline in fourth quarter sales year-over-year, $10.0 million was specific to the Power Solutions business due to a general reduction in networking hardware sales coupled with a further delay of datacenter shipments to the first quarter of 2017. The remaining decline is primarily attributable to weakness in distribution sales during the fourth quarter, as previously discussed.

Gross Profit
Gross profit margin improved to 20.7%, up from 19.3% in the fourth quarter of 2015, driven by several factors. Our connectivity products generate the highest of our margins while power products generate lower ones. The shift in product mix noted above had a favorable impact on our margins during the fourth quarter of 2016. Our margin also benefited from lower material costs in the People's Republic of China (PRC) and lower labor and overhead costs at our facilities in Mexico and the PRC, due to the strengthening of the U.S. dollar compared to the Mexican Peso and Chinese Renminbi during the quarter. Restructuring initiatives have resulted in cost savings in direct labor costs and overhead costs from last year, and quality improvement efforts have served to reduce costs associated with warranties, repair work and scrap.

Selling, General and Administrative Expenses (SG&A)
SG&A expenses were $16.0 million, down from $20.4 million in the fourth quarter of 2015. Fluctuation in currency exchange rates resulted in a $3.2 million favorable variance within SG&A as compared to the fourth quarter of 2015 (this fluctuation equated to an increase of approximately $0.19 per Class A share and $0.20 per Class B share in 2016). Other factors contributing to the decrease included lower commissions from reduced sales volumes and a decrease in fixed SG&A costs due to cost saving measures implemented in late-2015.

Gain on Sale of Property
The Company closed on the sale of a property in San Diego in the fourth quarter of 2016, which resulted in a pre-tax gain of $1.0 million.

Operating Income
Operating income was $7.6 million, up from $4.8 million in the fourth quarter of 2015, with an operating margin of 6.4% compared to 3.5% in the fourth quarter of 2015.

Income Taxes
The provision for income taxes was $3.0 million in the fourth quarter of 2016 as compared with $0.3 million during the same period of 2015. The Company's income tax provision can fluctuate significantly based upon the geographic segment in which the pre-tax profits and losses are earned. Of the geographic segments in which the company operates, the U.S. has the highest tax rates; Europe tax rates are generally lower than those of the U.S.; and Asia has the lowest tax rates. During the fourth quarter of 2016, a greater percentage of our pre-tax earnings were generated in our North America segment as compared to the fourth quarter of 2015. Also, within our foreign operations, a higher percentage of profits were generated in higher tax jurisdictions in 2016 versus 2015. These factors resulted in an effective tax rate of 46.9% during the fourth quarter of 2016, compared to an effective tax rate of 9.4% during the same quarter last year.

Net Earnings
Net earnings were $3.4 million in the fourth quarter of 2016 as compared with $2.9 million in the fourth quarter of 2015.

Full Year December 31, 2016 Results

Net Sales
Net sales were $500.2 million, down 11.8%. By geographic segment, North America was down by 15.6%, Asia was down by 10.5% and Europe was up by 0.4%. By product group, Power Solutions and Protection was down by 19.8%, Connectivity Solutions was down by 7.1% and Magnetics Solutions was down by 6.7%. During 2016, 34% of our sales related to our Power Solutions and Protection products (compared to 38% for the same period of 2015), 34% related to our Connectivity Solutions products (compared to 32% in 2015) and 32% related to our Magnetic Solutions products (compared to 30% in 2015).

Of the $66.9 million decline in sales in 2016 compared to 2015, $34.4 million was specific to the Power Solutions business, primarily due to missed design cycles in prior quarters and general market weakness which impacted all product lines during the year.

Gross Profit
Gross profit margin was 20.0%, up from 19.2% in 2015. Lower material costs, lower warranty costs and a favorable mix of products sold resulted in a favorable impact to gross profit margin in 2016 as compared with 2015. In addition, the restructuring efforts taken last year and strengthening of the U.S. dollar versus the Mexican Peso and Chinese Renminbi throughout 2016 also resulted in reduced direct labor and fixed overhead costs during the 2016 period.

Selling, General and Administrative Expenses
SG&A expenses declined to $71.0 million in 2016 compared to $78.0 million in 2015. In 2016, Bel recorded a benefit of $5.2 million for certain value-added and business tax items recorded in connection with the acquisition of Power Solutions. The 2016 period also benefited from cost savings initiatives in North America and Europe implemented during the earlier part of 2016. These factors were partially offset by a decrease in net foreign currency exchange gains of $2.0 million in 2016 as compared with 2015.

Goodwill and Other Intangible Assets Impairment
During the first half of 2016, we recorded an impairment charge related to our goodwill and other intangible assets of $106.0 million. As previously disclosed, this impairment charge will not result in any future cash expenditures, impact liquidity, affect the ongoing business or financial performance of our reporting units, or impact compliance with our debt covenants.

Operating (Loss) Income
Operating loss was $(76.5) million in 2016 as compared with operating income of $28.6 million in 2015.

Income Taxes
Income tax benefit was $(17.7) million in 2016 as compared with a provision of $6.5 million in 2015. The income tax benefit in 2016 included a net benefit related to the resolution of certain liabilities for uncertain tax positions of $13.0 million and a net benefit related to the goodwill and other intangible assets impairment of $4.4 million. In addition, the mix of pre-tax earnings and losses in different jurisdictions contributed to the benefit in 2016.

Net (Loss) Earnings
Net loss was $(64.8) million in 2016 as compared with net earnings of $19.2 million in 2015.

Balance Sheet Data
As of December 31, 2016, working capital was $163.1 million, including $73.4 million of cash and cash equivalents with a current ratio of 2.8-to-1. In comparison, as of December 31, 2015, working capital was $158.6 million, including $85.0 million of cash and cash equivalents with a current ratio of 2.3-to-1 Total debt at December 31, 2016 was $141.2 million as compared to $183.5 million at December 31, 2015, reflecting $42.3 million of debt repayments made during 2016.

Conference Call
Bel has scheduled a conference call at 11:00 a.m. EST today. To participate, dial (719) 325-2345, conference ID number: 6990529. A simultaneous webcast of the conference call may be accessed online from the Events and Presentations link of the Investors page under the "About Bel" tab at www.BelFuse.com. The webcast replay will be available for a period of 20 days at this same Internet address. For a telephone replay, dial (412) 317-6671, conference ID number: 6990529 after 2:00 p.m. EST.

About Bel
Bel (www.belfuse.com) designs, manufactures and markets a broad array of products that power, protect and connect electronic circuits. These products are primarily used in the networking, telecommunications, computing, military, aerospace, transportation and broadcasting industries. Bel's product groups include Magnetic Solutions (integrated connector modules, power transformers, power inductors and discrete components), Power Solutions and Protection (front-end, board-mount and industrial power products, module products and circuit protection), and Connectivity Solutions (expanded beam fiber optic, copper-based, RF and RJ connectors and cable assemblies). The Company operates facilities around the world.

Forward-Looking Statements
Non-historical information contained in this press release (including the statements regarding sales growth, R&D spending and profitability of Bel's connectivity solutions business) are forward-looking statements (as described under the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties. Actual results could differ materially from Bel's projections. Among the factors that could cause actual results to differ materially from such statements are: the market concerns facing our customers; the continuing viability of sectors that rely on our products; the effects of business and economic conditions; difficulties associated with integrating recently acquired companies; capacity and supply constraints or difficulties; product development, commercialization or technological difficulties; the regulatory and trade environment; risks associated with foreign currencies; uncertainties associated with legal proceedings; the market's acceptance of the Company's new products and competitive responses to those new products; and the risk factors detailed from time to time in the Company's SEC reports. In light of the risks and uncertainties impacting our business, there can be no assurance that any forward-looking statement will in fact prove to be correct. We undertake no obligation to update or revise any forward looking statements.

Non-GAAP Financial Measures
The non-GAAP measures identified in this press release as well as in the supplementary information to this press release (Non-GAAP EPS, Non-GAAP EBITDA and Adjusted Non-GAAP EBITDA) are not measures of performance under accounting principles generally accepted in the United States of America ("GAAP"). These measures should not be considered a substitute for, and the reader should also consider, income from operations, net earnings, earnings per share and other measures of performance as defined by GAAP as indicators of our performance or profitability. Our non-GAAP measures may not be comparable to other similarly-titled captions of other companies due to differences in the method of calculation. We present results adjusted to exclude the effects of certain unusual or special items and their related tax impact that would otherwise be included under U.S. GAAP, to aid in comparisons with other periods. We may use Non-GAAP financial measures to determine performance-based compensation and management believes that this information may be useful to investors.

Website Information
We routinely post important information for investors on our website, www.belfuse.com, in the "Investor Relations" section. We use our website as a means of disclosing material, otherwise non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investor Relations section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.

[Financial tables follow]

The following tables reconcile our US GAAP net earnings per common Class A and Class B basic and diluted shares ("GAAP EPS") to Non US GAAP net earnings per common Class A and Class B basic and diluted shares ("Non GAAP EPS"). Non GAAP EPS for the 2015 periods presented below has been revised to reflect the impact of the Power Solutions acquisition related items and settlements included in selling, general and administrative expenses and income taxes in order to provide comparable presentation in the prior year periods presented. In 2015, Non GAAP EPS was previously presented as $0.24 per Class A share and $0.26 per Class B share for the three months ended December 31, 2015 and $1.48 per Class A share and $1.58 per Class B share for the year ended December 31, 2015.

(a) The following tables detail the impact of certain unusual or special items had on the Company's net earnings per common Class A and Class B basic and diluted shares and the line items these items were included on the condensed consolidated statements of operations.