UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________

FORM 10-Q

(MARK ONE)

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Quarterly Period Ended ~~June 30, 2013~~March 31, 2014
or
[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ___________ to ____________

Commission File No. 0-11676

_____________________

BEL FUSE INC.

206 Van Vorst Street

Jersey City, NJ 07302

(201) 432-0463

(Address of principal executive offices and zip code)

(Registrant’s telephone number, including area code)

NEW JERSEY		22-1463699
(State of incorporation)		(I.R.S. Employer Identification No.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.	Yes [X]	No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).	Yes [X]	No [ ]

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [X]	Non-accelerated filer [ ] (Do not check if a smaller reporting company)	Smaller reporting company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).				Yes [ ]	No [X]

Title of Each Class	Number of Shares of Common Stock Outstanding as of ~~August~~May 1, ~~2013~~2014
Class A Common Stock ($0.10 par value)		2,174,912
Class B Common Stock ($0.10 par value)		~~9,234,927~~9,333,677

BEL FUSE INC.

INDEX

			Page
Part I		Financial Information

	Item 1.	Financial Statements (unaudited)	1

		Condensed Consolidated Balance Sheets as of ~~June 30, 2013~~ March 31, 2014
		and December 31, ~~2012~~2013 (unaudited)	2

		Condensed Consolidated Statements of Operations for the Three ~~and Six~~
		Months Ended ~~June 30,~~March 31, 2014 and 2013 ~~and 2012~~ (unaudited)	3

		Condensed Consolidated Statements of Comprehensive (Loss) Income for
		the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2014 and 2013 ~~and 2012~~ (unaudited)	4

		Condensed Consolidated Statements of Cash Flows for the ~~Six~~ Three
		Months Ended ~~June 30,~~March 31, 2014 and 2013 ~~and 2012~~ (unaudited)	5 - 6

		Notes to Condensed Consolidated Financial Statements (unaudited)	7 - 1815

	Item 2.	Management's Discussion and Analysis of
		Financial Condition and Results of Operations	1916 - 2521

	Item 3.	Quantitative and Qualitative Disclosures About
		Market Risk	2522

	Item 4.	Controls and Procedures	2522

Part II		Other Information

	Item 1.	Legal Proceedings	26

	~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	2622

	Item 6.	Exhibits	2723

	Signatures		2824

PART I. Financial Information

Item 1. Financial Statements ~~(Unaudited~~)(Unaudited)

Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted from the following condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. The following condensed consolidated financial statements should be read in conjunction with the year-end consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2012.~~2013.

The results of operations for the three ~~and six~~ months ended ~~June 30, 2013~~March 31, 2014 are not necessarily indicative of the results for the entire fiscal year or for any other period.

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BEL FUSE INC. AND SUBSIDIARIES	BEL FUSE INC. AND SUBSIDIARIES							BEL FUSE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS	CONDENSED CONSOLIDATED BALANCE SHEETS							CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share and per share data)	(dollars in thousands, except share and per share data)							(dollars in thousands, except share and per share data)
(Unaudited)	(Unaudited)							(Unaudited)

		June 30,			December 31,				March 31,		December 31,
		2013			2012				2014		2013
ASSETS
Current Assets:
Cash and cash equivalents		$	38,599		$	71,262			$	53,906	$	62,123
Accounts receivable - less allowance for doubtful accounts of $1,110
and $743 at June 30, 2013 and December 31, 2012, respectively			62,167			43,086
Accounts receivable - less allowance for doubtful accounts of $977
and $941 at March 31, 2014 and December 31, 2013, respectively										57,363		63,849
Inventories			66,604			54,924				67,976		70,019
Restricted cash			12,993			12,993
Prepaid expenses and other current assets			6,354			4,482				4,072		3,519
Refundable income taxes			3,441			2,955				2,270		1,650
Deferred income taxes			2,827			1,437				2,518		2,995
Total Current Assets			192,985			191,139				188,105		204,155

Property, plant and equipment - net			38,268			34,988				39,344		40,896
Deferred income taxes			3,614			1,404				1,990		1,680
Intangible assets - net			19,710			20,949				28,987		29,472
Goodwill			22,231			14,218				18,641		18,490
Other assets			12,608			12,510				13,837		13,448
TOTAL ASSETS		$	289,416		$	275,208			$	290,904	$	308,141

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable		$	29,934		$	18,862			$	23,192	$	29,518
Accrued expenses			29,746			25,360				16,521		22,442
Accrued restructuring costs			1,191			122
Short-term borrowings under revolving credit line										4,000		12,000
Notes payable			349			205				688		739
Income taxes payable			1,193			1,040				1,445		1,496
Dividends payable			823			799				815		786
Total Current Liabilities			63,236			46,388				46,661		66,981

Long-term Liabilities:
Liability for uncertain tax positions			2,175			2,161				1,527		1,218
Minimum pension obligation and unfunded pension liability			11,713			11,045				11,103		10,830
Other long-term liabilities			258			233				417		410
Total Long-term Liabilities			14,146			13,439				13,047		12,458
Total Liabilities			77,382			59,827				59,708		79,439

Commitments and Contingencies

Stockholders' Equity:
Preferred stock, no par value, 1,000,000 shares authorized; none issued			-			-				-		-
Class A common stock, par value $.10 per share, 10,000,000 shares
authorized; 2,174,912 shares outstanding at each date (net of
1,072,769 treasury shares)			217			217				217		217
Class B common stock, par value $.10 per share, 30,000,000 shares
authorized; 9,235,727 and 9,372,170 shares outstanding, respectively
authorized; 9,333,677 and 9,335,677 shares outstanding, respectively
(net of 3,218,307 treasury shares)			924			937				933		933
Additional paid-in capital			17,978			20,452				19,460		18,914
Retained earnings			195,550			195,202				209,712		207,993
Accumulated other comprehensive loss			(2,635	)		(1,427	)
Accumulated other comprehensive income										874		645
Total Stockholders' Equity			212,034			215,381				231,196		228,702
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	289,416		$	275,208			$	290,904	$	308,141


See notes to unaudited condensed consolidated financial statements.	See notes to unaudited condensed consolidated financial statements.							See notes to unaudited condensed consolidated financial statements.

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BEL FUSE INC. AND SUBSIDIARIES	BEL FUSE INC. AND SUBSIDIARIES													BEL FUSE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS													CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except share and per share data)	(dollars in thousands, except share and per share data)													(dollars in thousands, except share and per share data)
(Unaudited)	(Unaudited)													(Unaudited)

		Three Months Ended						Six Months Ended							Three Months Ended
		June 30,						June 30,							March 31,
		2013			2012			2013			2012				2014			2013

Net Sales		$	93,981		$	73,222		$	157,009		$	138,783			$	82,646		$	63,028

Costs and expenses:
Cost of sales			78,041			61,081			131,959			116,218				68,576			53,932
Selling, general and administrative			12,129			9,563			22,522			18,421				11,189			10,399
Restructuring charges			1,263			245			1,387			382				-			124
			91,433			70,889			155,868			135,021				79,765			64,455

Income from operations			2,548			2,333			1,141			3,762
Income (loss) from operations																2,881			(1,427	)

Impairment of investment			-			(478	)		-			(478	)
Interest expense			(3	)		-			(6	)		-				(30	)		(3	)
Interest income and other, net			69			77			109			153				51			38

Earnings before provision (benefit) for income taxes			2,614			1,932			1,244			3,437
Earnings (loss) before provision (benefit) for income taxes																2,902			(1,392	)
Provision (benefit) for income taxes			187			491			(640	)		1,124				399			(834	)

Net earnings		$	2,427		$	1,441		$	1,884		$	2,313
Net earnings (loss)															$	2,503		$	(558	)


Earnings per share:
Earnings (loss) per share:
Class A common share - basic and diluted		$	0.20		$	0.11		$	0.15		$	0.18			$	0.20		$	(0.05	)
Class B common share - basic and diluted		$	0.22		$	0.12		$	0.17		$	0.20			$	0.22		$	(0.05	)

Weighted-average shares outstanding:
Class A common share - basic and diluted			2,174,912			2,174,912			2,174,912			2,174,912				2,174,912			2,174,912
Class B common share - basic and diluted			9,213,178			9,677,141			9,217,119			9,654,473				9,334,955			9,221,104

Dividends paid per share:
Class A common share		$	0.06		$	0.06		$	0.12		$	0.12			$	0.06		$	0.06
Class B common share		$	0.07		$	0.07		$	0.14		$	0.14			$	0.07		$	0.07


See notes to unaudited condensed consolidated financial statements.	See notes to unaudited condensed consolidated financial statements.													See notes to unaudited condensed consolidated financial statements.

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BEL FUSE INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(dollars in thousands)
(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012

Net earnings $ 2,427 $ 1,441 $ 1,884 $ 2,313

Other comprehensive income (loss):
Currency translation adjustment, net of taxes of $5, $0,
($216) and $0, respectively 231 (749 ) (1,182 ) (334 )
Reclassification adjustment for write-down of marketable
securities included in net earnings, net of tax of $181 - 296 - 296
Unrealized holding losses on marketable securities arising during
the period, net of taxes of ($63), ($72), ($11) and ($59), respectively (103 ) (117 ) (18 ) (91 )
Change in unfunded SERP liability, net of taxes of $24, $18,
($4) and $35, respectively 53 40 (8 ) 80
Other comprehensive income (loss) 181 (530 ) (1,208 ) (49 )

Comprehensive income $ 2,608 $ 911 $ 676 $ 2,264

See notes to unaudited condensed consolidated financial statements.

BEL FUSE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(dollars in thousands)
(Unaudited)

	Three Months Ended
	March 31,
	2014		2013

Net earnings (loss)	$	2,503	$	(558	)

Other comprehensive income:
Currency translation adjustment, net of taxes of $34 and ($221), respectively		169		(1,413	)
Unrealized holding gains on marketable securities arising during the period,
net of taxes of $17 and $52, respectively		28		85
Change in unfunded SERP liability, net of taxes of $14 and ($27), respectively		32		(61	)
Other comprehensive income (loss)		229		(1,389	)

Comprehensive income (loss)	$	2,732	$	(1,947	)


See notes to unaudited condensed consolidated financial statements.

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BEL FUSE INC. AND SUBSIDIARIES	BEL FUSE INC. AND SUBSIDIARIES							BEL FUSE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS							CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)	(dollars in thousands)							(dollars in thousands)
(Unaudited)	(Unaudited)							(Unaudited)
		Six Months Ended							Three Months Ended
		June 30,							March 31,
		2013			2012				2014			2013
Cash flows from operating activities:
Net earnings		$	1,884		$	2,313
Adjustments to reconcile net earnings to net
cash (used in) provided by operating activities:
Net earnings (loss)									$	2,503		$	(558	)
Adjustments to reconcile net earnings (loss) to net
cash provided by operating activities:
Depreciation and amortization			4,871			4,270				3,406			2,220
Stock-based compensation			934			897				546			470
(Gain) loss on disposal of property, plant and equipment			(13	)		110
Impairment of investment			-			478
Other, net			471			449				220			255
Deferred income taxes			(958	)		(1,030	)			58			(859	)
Changes in operating assets and liabilities (see page 6)			(11,050	)		(7,258	)			(4,897	)		222
Net Cash (Used in) Provided by Operating Activities			(3,861	)		229
Net Cash Provided by Operating Activities										1,836			1,750

Cash flows from investing activities:
Purchase of property, plant and equipment			(3,088	)		(2,296	)			(1,242	)		(1,151	)
Payment for acquisition, net of cash acquired (see page 6)			(20,932	)		(2,695	)			-			(14,121	)
Purchase of marketable securities			-			(12	)
Proceeds from disposal of property, plant and equipment			13			5				21			6
Net Cash Used in Investing Activities			(24,007	)		(4,998	)			(1,221	)		(15,266	)

Cash flows from financing activities:
Dividends paid to common shareholders			(1,512	)		(1,565	)			(755	)		(762	)
Increase in notes payable			149			-
Repayments under revolving credit line										(8,000	)		-
Decrease in notes payable										(50	)		(79	)
Purchase and retirement of Class B common stock			(3,356	)		-				-			(3,356	)
Net Cash Used In Financing Activities			(4,719	)		(1,565	)			(8,805	)		(4,197	)

Effect of exchange rate changes on cash			(76	)		(78	)			(27	)		(237	)

Net Decrease in Cash and Cash Equivalents			(32,663	)		(6,412	)			(8,217	)		(17,950	)
Cash and Cash Equivalents - beginning of period			71,262			88,241				62,123			71,262
Cash and Cash Equivalents - end of period		$	38,599		$	81,829			$	53,906		$	53,312

(Continued)	(Continued)							(Continued)
See notes to unaudited condensed consolidated financial statements.	See notes to unaudited condensed consolidated financial statements.							See notes to unaudited condensed consolidated financial statements.

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BEL FUSE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(dollars in thousands)
(Unaudited)
	Three Months Ended
	March 31,
	2014			2013

Changes in operating assets and liabilities consist of:
Decrease in accounts receivable	$	6,490		$	5,652
Decrease in inventories		2,052			237
Increase in prepaid expenses and other current assets		(555	)		(1,494	)
(Increase) decrease in other assets		(315	)		12
Decrease in accounts payable		(6,301	)		(2,170	)
Decrease in accrued expenses		(5,912	)		(2,104	)
Increase in other liabilities		8			7
Decrease in accrued restructuring costs		-			(122	)
(Decrease) increase in income taxes payable		(364	)		204
	$	(4,897	)	$	222

Supplementary information:
Cash paid (received) during the period for:
Income taxes, net of refunds received	$	676		$	(237	)
Interest		11			3

Details of acquisitions:
Fair value of identifiable net assets acquired	$	-		$	28,108
Goodwill		-			1,240
Fair value of net assets acquired	$	-		$	29,348

Fair value of net assets acquired	$	-		$	29,348
Less: Cash acquired in acquisition		-			(8,388	)
Deferred consideration		-			(6,839	)
Cash paid for acquisitions, net of cash acquired	$	-		$	14,121
See notes to unaudited condensed consolidated financial statements.

BEL FUSE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(dollars in thousands)
(Unaudited)
Six Months Ended
June 30,
2013 2012

Changes in operating assets and liabilities consist of:
Increase in accounts receivable $ (7,894 ) $ (4,446 )
Increase in inventories (4,886 ) (4,152 )
Increase in prepaid expenses and other current assets (1,071 ) (1,081 )
Increase in other assets (27 ) (171 )
Increase in accounts payable 2,487 1,257
(Decrease) increase in accrued expenses (428 ) 135
Increase in other liabilities 29 -
Increase in accrued restructuring costs 1,069 -
(Decrease) increase in income taxes payable (329 ) 1,200
$ (11,050 ) $ (7,258 )

Supplementary information:
Cash paid during the period for:
    Income taxes, net of refunds received $ 651 $ 864
    Interest 6 -

Details of acquisitions:
   Fair value of identifiable net assets acquired $ 21,913 $ 157
   Goodwill 8,193 2,577
       Fair value of net assets acquired $ 30,106 $ 2,734

   Fair value of net assets acquired $ 30,106 $ 2,734
   Less:  Cash acquired in acquisition (8,388 ) -
   Deferred consideration (786 ) (39 )
      Cash paid for acquisitions, net of cash acquired $ 20,932 $ 2,695
See notes to unaudited condensed consolidated financial statements.

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BEL FUSE INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.	BASIS OF PRESENTATION AND ACCOUNTING POLICIES

The condensed consolidated balance sheet as of ~~June 30, 2013,~~March 31, 2014, and the condensed consolidated statements of operations, comprehensive income and cash flows for the periods presented herein have been prepared by Bel Fuse Inc. (the “Company” or “Bel”) and are unaudited. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for all periods presented have been made. The results for the three ~~and six~~ months ended ~~June 30, 2013~~March 31, 2014 should not be viewed as indicative of the Company’s annual results or the Company’s results for any other period. The information for the condensed consolidated balance sheet as of December 31, ~~2012~~2013 was derived from audited financial statements. These financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Bel Fuse Annual Report on Form 10-K for the year ended December 31, ~~2012.~~2013.

On March 9, 2012, the Company completed its acquisition of 100% of the issued and outstanding capital stock of GigaCom Interconnect AB (“GigaCom”). On July 31, 2012, the Company consummated its acquisition of 100% of the issued and outstanding capital stock of Fibreco Ltd. (“Fibreco”). On September 12, 2012, the Company completed its acquisition of 100% of the issued and outstanding capital stock of Powerbox Italia ~~S.r.L. and its subsidiary, Powerbox Design (collectively, “Powerbox”, now merged to form Bel Power Europe S.r.l.~~S.r.L (“Powerbox”). The acquisitions of GigaCom, Fibreco and Powerbox may hereafter be referred to collectively as either the “2012 Acquisitions” or the “2012 Acquired Companies”. Accordingly, as of the respective acquisition dates, all of the assets acquired and liabilities assumed were recorded at their preliminary fair values. The accompanying condensed consolidated statement of operations for the three months ended March 31, 2013 has been restated to reflect immaterial measurement period adjustments related to the applicable 2012 Acquisitions.

On March 29, 2013, the Company completed its acquisition of 100% of the issued and outstanding capital stock of Transpower Technologies (HK) Limited (“Transpower”) and certain other tangible and intangible assets related to the Transpower magnetics business of TE ~~Connectivity.~~Connectivity (“TRP”). On August 20, 2013, the Company completed its acquisition of 100% of the issued and outstanding capital stock of Array Connector Corporation (“Array”). The acquisitions of TRP and Array may hereafter be referred to collectively as either the “2013 Acquisitions” or the “2013 Acquired Companies”. Accordingly, as of the respective acquisition dates, all of the assets acquired and liabilities assumed were recorded at their preliminary fair values and the Company’s condensed consolidated results of operations for the three and six months ended June 30, 2013 and June 30, 2012 include the operating results of the acquired companies from their respective acquisition dates through the respective period end dates.values. The accompanying condensed consolidated financial statements as of December 31, ~~2012~~2013 and for the three ~~and six~~ months ended ~~June 30, 2012~~March 31, 2013 have been restated to reflect immaterial measurement period adjustments related to the ~~GigaCom and Fibreco acquisitions, as applicable.~~

applicable 2013 Acquisitions. There were no operating activities related to either of the 2013 Acquisitions during the three months ended March 31, 2013. The Company’s condensed consolidated results of operations for the three months ended March 31, 2014 include the operating results of the 2013 Acquisitions for the entire period.

Recent Accounting Pronouncements

The Company’s significant accounting policies are summarized in Note 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2012.~~2013. There were no significant changes to these accounting policies during the ~~six~~three months ended ~~June 30, 2013.~~March 31, 2014. Recent accounting pronouncements adopted during the first ~~six~~three months of ~~2013~~2014 are as follows:

~~Accounting Standards Update (“ASU”) No. 2012-02 – Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment (“ASU No. 2012-02”)~~

~~ASU No. 2012-02 amends ASU No. 2011-08,~~ ~~Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment,~~ and permits an entity to first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, ~~Intangibles - Goodwill and Other - General Intangibles Other than Goodwill. The Company adopted ASU No. 2012-02 during the first quarter of 2013. The adoption of this update did not have a material effect on the Company’s condensed consolidated financial statements.~~

~~Accounting Standards Update No. 2013-02 – Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU No. 2013-02”)~~

ASU No. 2013-02 requires disclosure of amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present either on the face of the consolidated statements of operations, or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net earnings, but only if the amount reclassified is required to be reclassified to net earnings in its entirety in the same reporting period. For amounts not reclassified in their entirety to net earnings, an entity is required to cross-reference to other disclosures that provide additional detail about those amounts. The Company adopted ASU No. 2013-02 during the first quarter of 2013. The adoption of this update did not have a material effect on the Company’s condensed consolidated financial statements.

Accounting Standards Update No. 2013-11 – Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU No. 2013-11”)

ASU No. 2013-11 provides guidance on financial statement presentation of an unrecognized tax benefit when a net operating loss (“NOL”) carryforward, a similar tax loss, or a tax credit carryforward exists. The FASB’s objective in issuing this ASU is to eliminate diversity in practice resulting from a lack of guidance on this topic in current U.S. GAAP. This ASU applies to all entities with unrecognized tax benefits that also have tax loss or tax credit carryforwards in the same tax jurisdiction as of the reporting date. The guidance in ASU No. 2013-11 iswas effective for interim and annual periods beginning after December 15, 2013. The ~~Company does not expect the~~ adoption of this ASU todid not have a material impact on the Company’s results of operations, financial condition or cash flows.

~~Return to Index~~

2.	EARNINGS (LOSS) PER SHARE

The Company utilizes the two-class method to report its earnings (loss) per share. The two-class method is an earnings (loss) allocation formula that determines earnings (loss) per share for each class of common stock according to dividends declared and participation rights in undistributed ~~earnings.~~earnings (loss). The Company’s Certificate of Incorporation, as amended, states that Class B common shares are entitled to dividends at least 5% greater than dividends paid to Class A common shares, resulting in the two-class method of computing earnings (loss) per share. In computing earnings (loss) per share, the Company has allocated dividends declared to Class A and Class B based on amounts actually declared for each class of stock and 5% more of the undistributed earnings (loss) have been allocated to Class B shares than to the Class A shares on a per share basis. Basic earnings (loss) per common share are computed by dividing net earnings (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per common share, for each class of common stock, are computed by dividing net earnings (loss) by the weighted-average number of common shares and potential common shares outstanding during the period. There were no potential common shares outstanding during the three ~~or six~~ months ended ~~June 30,~~March 31, 2014 or March 31, 2013 ~~or 2012~~ which would have had a dilutive effect on earnings per share.

-7-

The earnings and weighted-average shares outstanding used in the computation of basic and diluted earnings per share are as follows (dollars in thousands, except share and per share data):

Three Months Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012

Numerator:
Net earnings $ 2,427 $ 1,441 $ 1,884 $ 2,313
Less Dividends:
     Class A 131 131 261 261
     Class B 643 680 1,275 1,355
Undistributed earnings $ 1,653 $ 630 $ 348 $ 697

Undistributed earnings allocation - basic and diluted:
     Class A undistributed earnings $ 303 $ 111 $ 64 $ 123
     Class B undistributed earnings 1,350 519 284 574
     Total undistributed earnings $ 1,653 $ 630 $ 348 $ 697

Net earnings allocation - basic and diluted:
     Class A allocated earnings $ 434 $ 242 $ 325 $ 384
     Class B allocated earnings 1,993 1,199 1,559 1,929
     Net earnings $ 2,427 $ 1,441 $ 1,884 $ 2,313

Denominator:
Weighted-average shares outstanding:
     Class A common share - basic and diluted 2,174,912 2,174,912 2,174,912 2,174,912
     Class B common share - basic and diluted 9,213,178 9,677,141 9,217,119 9,654,473

Earnings per share:
     Class A common share - basic and diluted $ 0.20 $ 0.11 $ 0.15 $ 0.18
     Class B common share - basic and diluted $ 0.22 $ 0.12 $ 0.17 $ 0.20

~~Return to Index~~

~~3. ACQUISITIONS~~

	Three Months Ended
	March 31,
	2014		2013

Numerator:
Net earnings (loss)	$	2,503	$	(558	)
Less Dividends declared:
Class A		130		130
Class B		654		632
Undistributed earnings (loss)	$	1,719	$	(1,320	)

Undistributed earnings (loss) allocation - basic and diluted:
Class A undistributed earnings (loss)	$	312	$	(242	)
Class B undistributed earnings (loss)		1,407		(1,078	)
Total undistributed earnings (loss)	$	1,719	$	(1,320	)

Net earnings (loss) allocation - basic and diluted:
Class A net earnings (loss)	$	442	$	(112	)
Class B net earnings (loss)		2,061		(446	)
Net earnings (loss)	$	2,503	$	(558	)

Denominator:
Weighted-average shares outstanding:
Class A common share - basic and diluted		2,174,912		2,174,912
Class B common share - basic and diluted		9,334,955		9,221,104

Earnings (loss) per share:
Class A common share - basic and diluted	$	0.20	$	(0.05	)
Class B common share - basic and diluted	$	0.22	$	(0.05	)

~~2013 Acquisition~~:

3. ACQUISITIONS

On March 29, 2013, the Company ~~acquired 100%~~completed its acquisition of ~~the outstanding shares~~TRP for $21.0 million, net of Transpower Technology (HK) Limited (“Transpower”), certain intellectual property and other tangible assets related to the Transpower magnetics business of TE Connectivity (“TE”) from Tyco Electronics Corporation (“Tyco”) for $22.4 million in cash and additional consideration including the assumption of $0.1 million in liabilities and the grant of a license to TE related to three of the Company’s patents. During the second quarter of 2013, the Company paid an additional $6.8 million in consideration to TE related to a working capital adjustment and $0.8 million remains accrued at June 30, 2013. Transpower is the sole shareholder of Dongguan Transpower Electronic Products Co., Ltd. in the People's Republic of China. The operations acquired are now doing business as TRP Connector (“TRP”).acquired. The Company’s purchase of ~~the~~ TRP ~~magnetics business~~ consisted of the integrated connector module (“ICM”) family of products, including RJ45, 10/100 Gigabit, 10G, PoE/PoE+, MRJ21 and RJ.5, a line of modules for smart-grid applications, and discrete magnetics.

On August 20, 2013, the Company completed its acquisition of Array, a manufacturer of aerospace and mil-spec connector products based in Miami, Florida, for $10.0 million in cash. The acquisition of Array expands the Company’s portfolio of connector products that can be offered to the combined customer base, and provides an opportunity to sell other products that Bel manufactures to Array’s customers. Array has become part of Bel’s Cinch Connector business.

During the three ~~and six~~ months ended ~~June 30,~~March 31, 2014 and 2013, the Company incurred less than $0.1 million and ~~$0.4~~$0.3 million, respectively, of acquisition-related costs associated with ~~TRP.~~the 2013 Acquisitions. These costs are included in selling, general and administrative expense in the accompanying condensed consolidated ~~statement~~statements of operations for the three ~~and six~~ months ended ~~June 30,~~March 31, 2014 and 2013.

~~While~~

-8-

The purchase price allocations for TRP and Array were finalized during the ~~initial accounting related to the TRP acquisition is not complete as~~first quarter of ~~the filing date of this Form 10-Q, the~~2014. The following table depicts the ~~Company’s initial estimate of the~~finalized respective acquisition date fair values of the consideration paid ~~or payable~~ and identifiable net assets acquired (in thousands):

											TRP									Array									2013 Acquisitions
					Measurement									Measurement			March 29,						Measurement			August 20,			Acquisition-Date
					Period			March 29, 2013			March 29,			Period			2013			August 20,			Period			2013			Fair Values
	March 29, 2013				Adjustments			(As adjusted)			2013			Adjustments			(As finalized)			2013			Adjustments			(As finalized)			(As finalized)
Cash	$	8,388			$	-		$	8,388		$	8,388		$	-		$	8,388		$	-		$	-		$	-		$	8,388
Accounts receivable		11,580				(39	)		11,541			11,580			(39	)		11,541			994			-			994			12,535
Inventories		6,258		(a)		707			6,965			6,258			1,097			7,355			2,588			(1,595	)		993			8,348
Other current assets		1,953				-			1,953			1,953			(334	)		1,619			83			345			428			2,047
Property, plant and equipment		4,693		(b)		(165	)		4,528			4,693			1,097			5,790			2,285			1,225			3,510			9,300
Intangible assets		-		(c)		-			-			-			6,110			6,110			-			1,470			1,470			7,580
Other assets		1,151				-			1,151			1,151			198			1,349			84			1,663			1,747			3,096
Total identifiable assets		34,023				503			34,526			34,023			8,129			42,152			6,034			3,108			9,142			51,294

Accounts payable		(8,565	)			-			(8,565	)		(8,565	)		331			(8,234	)		(677	)		1			(676	)		(8,910	)
Accrued expenses		(4,003	)			(21	)		(4,024	)		(4,003	)		(462	)		(4,465	)		(206	)		(79	)		(285	)		(4,750	)
Other current liabilities		(25	)			1			(24	)		(25	)		(734	)		(759	)		(214	)		214			-			(759	)
Noncurrent liabilities												-			(586	)		(586	)		(643	)		(1,105	)		(1,748	)		(2,334	)
Total liabilities assumed		(12,593	)			(20	)		(12,613	)		(12,593	)		(1,451	)		(14,044	)		(1,740	)		(969	)		(2,709	)		(16,753	)
Net identifiable assets acquired		21,430				483			21,913			21,430			6,678			28,108			4,294			2,139			6,433			34,541
Goodwill		8,278		(d)		(85	)		8,193			8,278			(7,038	)		1,240			5,666			(2,094	)		3,572			4,812
Net assets acquired	$	29,708			$	398		$	30,106		$	29,708		$	(360	)	$	29,348		$	9,960		$	45		$	10,005		$	39,353


Cash paid	$	22,400			$	6,920		$	29,320		$	22,400		$	6,948		$	29,348		$	9,960		$	45		$	10,005		$	39,353
Assumption of severance payment		109				(109	)		-			109			(109	)		-			-			-			-			-
Fair value of grant of license		-		(e)		-			-
Fair value of consideration transferred		22,509				6,811			29,320
Fair value of consideration
transferred												22,509			6,839			29,348			9,960			45			10,005			39,353
Deferred consideration		7,199		(f)		(6,413	)		786			7,199			(7,199	)		-			-			-			-			-
Total consideration paid/payable	$	29,708			$	398		$	30,106
Total consideration paid											$	29,708		$	(360	)	$	29,348		$	9,960		$	45		$	10,005		$	39,353

~~(a)~~

The determination of fair value related to the inventory acquired was still in progress as of the date of this filing. The amount above represents only the carrying value of the inventory on TRP’s balance sheet as of the acquisition date. The measurement period adjustment noted above for inventory relates to additional inventory received from TE, as well as inventory on customer consignments that was not previously accounted for.

~~(b)~~

The appraisals related to machinery and equipment acquired were incomplete as of this filing date and, as such, the amount noted above represents only the carrying value of those assets on TRP’s balance sheet as of the acquisition date. The measurement period adjustment noted above for property, plant and equipment relates to equipment that could not be located upon a physical inventory of the assets acquired.

~~(c)~~

The Company has identified certain intangible assets related to the TRP acquisition, including technology, license agreements and customer lists, which are being valued by a third-party appraiser. These appraisals were not complete as of the date of this filing.

~~Return~~The measurement period adjustments noted above primarily relate to ~~Index~~

~~(d)~~

The amount of goodwill is provisional as of the filing date, as the fair value determination of inventory acquired, and appraisals related to property, plant and equipment and various intangible assets are still underway. As the final amount of goodwill has not yet been determined or allocated by segment, the Company is unable to determine at this time the portion of goodwill, if any, that will be deductible for tax purposes.

~~(e)~~

As part of the consideration paid or payable, the Company granted Tyco a license related to three of the Company’s patents. The valuation related to this license grant was not complete as of the date of this filing.

~~(f)~~

Deferred consideration represents the Company’s estimate of a working capital adjustment which is payable to the seller. Such adjustment must be agreed upon between the Company and the seller, and has not yet been finalized as of the date of this filing.

adjustments to fair value based on the appraisals on inventory, property, plant and equipment, and intangible assets. In addition, various other asset and liability accounts had measurement period adjustments related to deferred taxes.

The results of operations of ~~TRP~~the 2013 Acquired Companies have been included in the Company’s consolidated financial statements for the period subsequent to ~~March 29, 2013.~~their respective acquisition dates. During the three ~~and six~~ months ended ~~June 30,~~March 31, 2014, the 2013 ~~TRP~~Acquired Companies contributed ~~$22.0~~$17.9 million of ~~revenues to the Company. As the Company’s determination~~revenue and ~~allocation~~$1.3 million of ~~management fees and TRP-specific overhead charges is still underway, TRP’s contribution~~net earnings to the Company’s ~~net earnings is not yet available.~~consolidated financial results. There was no operating activity related to either of the 2013 Acquisitions during the three months ended March 31, 2013.

The unaudited pro forma information below presents the combined operating results of the Company and ~~TRP.~~the 2013 Acquired Companies. The unaudited pro forma results are presented for illustrative purposes only. They do not reflect the realization of any potential cost savings, or any related integration costs. Certain cost savings may result from the ~~TRP acquisition;~~2013 Acquisitions; however, there can be no assurance that these cost savings will be achieved. These pro forma results do not purport to be indicative of the results that would have actually been obtained if the ~~TRP acquisition~~2013 Acquisitions had occurred as of January 1, 2012, nor is the pro forma data intended to be a projection of results that may be obtained in the future. The following unaudited pro forma consolidated results of operations assume that the ~~acquisition~~acquisitions of ~~TRP was~~the 2013 Acquired Companies were completed as of January 1, 2012. The 2013 unaudited pro forma ~~results noted below for~~net earnings were adjusted to exclude $0.3 million of acquisition-related costs ($0.3 million after tax) incurred during the ~~three and six months ended June 30, 2012 also include the effects~~first quarter of ~~the 2012 Acquisitions discussed below~~2013 (dollars in thousands except per share data):

	Three Months Ended				Six Months Ended
	June 30,				June 30,				Three Months Ended
	2013		2012		2013		2012		March 31, 2013

Revenue	$	93,981	$	95,066	$	177,510	$	181,461	$	85,291
Net earnings		2,427		4,474		4,575		7,254		2,368
Earnings per Class A common share - basic and diluted		0.20		0.36		0.38		0.58		0.20
Earnings per Class B common share - basic and diluted		0.22		0.38		0.41		0.62		0.21

~~2012 Acquisitions~~:

On March 9, 2012, the Company completed its acquisition of 100% of the issued and outstanding capital stock of GigaCom with a cash payment of $2.7 million (£1.7 million). GigaCom, located in Gothenburg, Sweden, is a supplier of expanded beam fiber optic technology and a participant in the development of next-generation commercial aircraft components. GigaCom has become part of Bel’s Cinch Connector business. Management believes that GigaCom’s offering of expanded beam fiber optic (“EBOSA®”) products will enhance the Company’s position within the growing aerospace and military markets.

On July 31, 2012, the Company completed its acquisition of 100% of the issued and outstanding capital stock of Fibreco with a cash payment, net of $2.7 million of cash acquired, of $13.7 million (£8.7 million). Fibreco, located in the United Kingdom, is a supplier of a broad range of expanded beam fiber optic components for use in military communications, outside broadcast and offshore exploration applications. Fibreco has become part of Bel’s interconnect product group under the Cinch Connector business. Management believes that the addition of Fibreco’s fiber optic-based product line to Cinch’s broad range of copper-based products will increase Cinch’s presence in emerging fiber applications within the military, aerospace and industrial markets. In addition, management believes the acquisition provides access to a range of customers for the recently acquired GigaCom EBOSA® product.

On September 12, 2012, the Company completed its acquisition of 100% of the issued and outstanding capital stock of Powerbox, now known as Bel Power Europe, with a cash payment, net of $0.2 million of cash acquired, of $3.0 million. The Company also granted 30,000 restricted shares of the Company’s Class B common stock in connection with this acquisition. Compensation expense equal to the grant date fair value of these restricted shares of $0.6 million is being recorded ratably through September 2014. Bel Power Europe, located near Milan, Italy, develops high-power AC-DC power conversion solutions targeted at the broadcasting market. The acquisition of Bel Power Europe will allow Bel to expand its portfolio of power product offerings to include AC-DC products and will also establish a European design center located close to several of Bel’s existing customers.

Acquisition-related costs relating to the 2012 Acquisitions amounted to less than $0.1 million during each of the three-month periods ended June 30, 2013 and 2012 and $0.1 million during each of the six-month periods ended June 30, 2013 and 2012. These costs are included in selling, general and administrative expense in the accompanying condensed consolidated statements of operations.

10-9-

~~Return to Index~~

During the year ended December 31, 2012, the Company completed the purchase accounting related to the GigaCom and Fibreco acquisitions. The initial accounting related to the Bel Power Europe acquisition is not complete as of the filing date of this Form 10-Q; accordingly, the following table reflects the Company’s initial estimate of the acquisition date fair values of the consideration transferred and identifiable net assets acquired related to Bel Power Europe, together with the finalized acquisition date fair values of the consideration transferred and identifiable net assets acquired related to the GigaCom and Fibreco acquisitions (in thousands):

Measurement Acquisition-Date
Acquisition-Date Period Fair Values
Fair Values Adjustments (As adjusted)
Cash and cash equivalents $ 2,991 $ - $ 2,991
Accounts receivable 3,750 3 3,753
Inventories 1,061 (16 ) 1,045
Other current assets 90 - 90
Property, plant and equipment 502 248 750
Intangible assets 30 10,358 10,388
     Total identifiable assets 8,424 10,593 19,017

Accounts payable (1,702 ) - (1,702 )
Accrued expenses (1,736 ) - (1,736 )
Notes payable (216 ) - (216 )
Income taxes payable (264 ) (60 ) (324 )
Deferred income tax liability, current (70 ) - (70 )
Deferred income tax liability, noncurrent - (2,297 ) (2,297 )
Other long-term liabilities (216 ) - (216 )
     Total liabilities assumed (4,204 ) (2,357 ) (6,561 )
     Net identifiable assets acquired 4,220 8,236 12,456
     Goodwill 17,965 (8,020 ) 9,945
     Net assets acquired $ 22,185 $ 216 $ 22,401

Cash paid $ 22,138 263 $ 22,401
Deferred consideration 47 (47 ) -
     Fair value of consideration transferred $ 22,185 $ 216 $ 22,401

The results of operations of the 2012 Acquired Companies have been included in the Company’s consolidated financial statements for the periods subsequent to their respective acquisition dates. During the three and six months ended June 30, 2013, Fibreco and Bel Power Europe contributed combined revenues of $3.0 million and $5.9 million, respectively, and combined net earnings of $0.1 million and $0.8 million, respectively, to the Company’s consolidated financial results. The acquisition of GigaCom has contributed to the Bel’s research and development efforts and has not resulted in third-party sales. GigaCom incurred expenses, primarily related to research and development, of $0.2 million and $0.5 million during the three and six months ended June 30, 2013, respectively.

4. FAIR VALUE MEASUREMENTS

Fair value is defined as an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based upon the best use of the asset or liability at the measurement date. Entities are required to use a fair value hierarchy which maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

Level 1 – Observable inputs such as quoted market prices in active markets

Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable

Level 3 – Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions

~~Return to Index~~

As of ~~June 30, 2013~~March 31, 2014 and December 31, ~~2012,~~2013, the Company held certain financial assets that are measured at fair value on a recurring basis. These consisted of securities that are among the Company’s investments in a rabbi trust which are intended to fund the Company’s Supplemental Executive Retirement Plan (“SERP”) obligations, and other marketable securities described below. The securities that are held in the rabbi trust are categorized as available-for-sale securities and are included as other assets in the accompanying condensed consolidated balance sheets at ~~June 30, 2013~~March 31, 2014 and December 31, ~~2012.~~2013. The gross unrealized gains associated with the investments held in the rabbi trust were $0.5 million and $0.4 million at ~~each of June 30, 2013~~March 31, 2014 and December 31, ~~2012.~~2013, respectively. Such unrealized gains are included, net of tax, in accumulated other comprehensive ~~loss.~~income.

As of ~~June 30, 2013~~March 31, 2014 and December 31, ~~2012,~~2013, the Company had marketable securities with a combined fair value of less than $0.1 million at each date, and gross unrealized ~~losses~~gains of less than $0.1 million at each date. Such unrealized ~~losses~~gains are included, net of tax, in accumulated other comprehensive ~~loss.~~income. The fair value of the equity securities is determined based on quoted market prices in public markets and is categorized as Level 1. The Company does not have any financial assets measured at fair value on a recurring basis categorized as Level 3, and there were no transfers in or out of Level 1, Level 2 or Level 3 during the ~~three months ended June 30, 2013 and 2012.~~first quarter of 2014. There were no changes to the Company’s valuation techniques used to measure asset fair values on a recurring or nonrecurring basis during the ~~six months ended June 30, 2013.~~first quarter of 2014.

The following table sets forth by level, within the fair value hierarchy, the Company’s financial assets accounted for at fair value on a recurring basis as of ~~June 30, 2013~~March 31, 2014 and December 31, ~~2012~~2013 (dollars in thousands).

			Assets at Fair Value Using								Assets at Fair Value Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
As of June 30, 2013
As of March 31, 2014
Available-for-sale securities:
Investments held in rabbi trust	$	5,984	$	5,984	$	-	$	-	$	3,359	$	3,359	$	-	$	-
Marketable securities		3		3		-		-		4		4		-		-

Total	$	5,987	$	5,987	$	-	$	-	$	3,363	$	3,363	$	-	$	-

As of December 31, 2012
As of December 31, 2013
Available-for-sale securities:
Investments held in rabbi trust	$	6,014	$	6,014	$	-	$	-	$	3,313	$	3,313	$	-	$	-
Marketable securities		2		2		-		-		3		3		-		-

Total	$	6,016	$	6,016	$	-	$	-	$	3,316	$	3,316	$	-	$	-

The Company has other financial instruments, such as cash equivalents, accounts receivable, notes receivable, accounts payable, notes payable and accrued expenses, which are not measured at fair value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid or short-term nature. The Company did not have any other financial liabilities within the scope of the fair value disclosure requirements as of ~~June 30, 2013~~March 31, 2014 or December 31, ~~2012.~~2013.

Nonfinancial assets and liabilities, such as goodwill, indefinite-lived intangible assets and long-lived assets, are accounted for at fair value on a nonrecurring basis. These items are tested for impairment on the occurrence of a triggering event or, in the case of goodwill and indefinite-lived intangible assets, on at least an annual basis. There were no triggering events that occurred during the ~~six~~three months ended ~~June 30, 2013 or 2012~~March 31, 2014 that would warrant interim impairment testing.

12-10-

~~Return to Index~~

5. INVENTORIES

The components of inventories are as follows (dollars in thousands):

	June 30,		December 31,		March 31,		December 31,
	2013		2012		2014		2013
Raw materials	$	31,164	$	26,157	$	29,942	$	29,428
Work in progress		10,790		8,200		8,636		8,783
Finished goods		24,650		20,567		29,398		31,808
	$	66,604	$	54,924	$	67,976	$	70,019

6. BUSINESS SEGMENT INFORMATION

The Company operates in one industry with three reportable operating segments, which are geographic in nature. The segments consist of North America, Asia and Europe. The primary criteria by which financial performance is evaluated and resources are allocated are sales and income from operations. The following is a summary of key financial data (dollars in thousands):

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30,						June 30,						March 31,
	2013			2012			2013			2012			2014			2013
Total segment sales:
North America	$	32,301		$	35,455		$	61,523		$	71,980		$	31,454		$	29,222
Asia		64,036			43,795			96,760			78,642			49,891			32,725
Europe		10,591			7,227			20,716			15,217			10,892			10,125
Total segment sales		106,928			86,477			178,999			165,839			92,237			72,072
Reconciling item:
Intersegment sales		(12,947	)		(13,255	)		(21,990	)		(27,056	)		(9,591	)		(9,044	)
Net sales	$	93,981		$	73,222		$	157,009		$	138,783		$	82,646		$	63,028

Income (loss) from operations:
North America	$	(2,012	)	$	1,953		$	(3,495	)	$	4,263		$	882		$	(1,482	)
Asia		4,642			523			3,977			(1,039	)		1,673			(666	)
Europe		(82	)		(143	)		659			538			326			721
	$	2,548		$	2,333		$	1,141		$	3,762		$	2,881		$	(1,427	)

The following items are included in the income (loss) from operations presented above:

Recent Acquisitions – During the three ~~and six~~ months ended ~~June 30, 2013,~~March 31, 2014, the acquisition of TRP contributed ~~$22.0~~revenues of $15.6 million ~~in sales~~and income from operations of $1.4 million to the Company’s Asia operating segment ~~in each period. During the three~~ and ~~six months ended June 30, 2013, the 2012 acquisitions of Fibreco and Powerbox contributed combined~~ revenues of ~~$3.0~~$0.6 million ~~and $5.9 million, respectively,~~ and income from operations of ~~$0.2~~$0.1 million ~~and $1.1 million, respectively,~~ to the Company’s Europe operating segment. ~~The 2012 Acquisitions did not have~~During the three months ended March 31, 2014, the acquisition of Array contributed revenues of $1.6 million and a ~~material impact on~~loss from operations of $0.5 million to the Company’s ~~condensed consolidated statement~~North America operating segment. There was no operating activity related to either of ~~operations for~~the 2013 Acquisitions during the three ~~or six~~ months ended ~~June 30, 2012.~~March 31, 2013.

Segment Sales – Segment sales are attributed to individual segments based on the geographic source of the billing for such customer sales. Transfers between geographic areas include finished products manufactured in foreign countries which are then transferred to the United States and Europe for sale; finished goods manufactured in the United States which are transferred to Europe and Asia for sale; and semi-finished components manufactured in the United States which are sold to Asia for further processing. Income (loss) from operations represents net sales less operating costs and expenses.

13-11-

~~Return to Index~~

7. INCOME TAXES

At ~~June 30, 2013~~March 31, 2014 and December 31, ~~2012,~~2013, the Company has approximately ~~$2.7~~$2.3 million and $2.2 million, respectively, of liabilities for uncertain tax positions ($~~0.5~~0.8 million and $1.0 million, respectively, included in income taxes payable and ~~$2.2~~$1.5 million and $1.2 million, respectively, included in liability for uncertain tax positions) all of which, if recognized, would reduce the Company’s effective tax rate.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company is no longer subject to U.S. federal examinations by tax authorities for years before 2010 and for state examinations before 2007. Regarding foreign subsidiaries, the Company is no longer subject to examination by tax authorities for years before ~~2004~~2008 in Asia and generally 2006 in Europe.

As a result of the expiration of the statute of limitations for specific jurisdictions, it is reasonably possible that the related unrecognized benefits for tax positions taken regarding previously filed tax returns may change materially from those recorded as liabilities for uncertain tax positions in the Company’s condensed consolidated financial statements at ~~June 30, 2013.~~March 31, 2014. A total of ~~$0.6~~$0.8 million of previously recorded liabilities for uncertain tax positions relates principally to the ~~2007~~2010 tax year. The statute of limitations related to these liabilities is scheduled to expire on September 15, ~~2013.~~2014.

The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits arising from uncertain tax positions as a component of the current provision for income taxes. During each of the ~~six~~three months ended ~~June 30,~~March 31, 2014 and 2013, ~~and 2012,~~ the Company recognized an immaterial amount of interest and penalties ~~and no interest and penalties, respectively,~~ in the condensed consolidated statements of operations. The Company has approximately $0.2 million accrued for the payment of such interest and penalties at ~~June 30, 2013~~March 31, 2014 and December 31, ~~2012,~~2013, a portion of which is included in ~~the~~each of income taxes payable and liability for uncertain tax positions in the accompanying condensed consolidated balance sheets at each date.

Upon the acquisition of ~~Fibreco, Fibreco~~TRP, TRP had a deferred tax asset in the amount of $2.2 million arising from various timing differences related to depreciation and accrued expenses. Upon the acquisition of Array, Array had a deferred tax liability ~~in the amount~~ of ~~$0.1~~$0.7 million arising from ~~various temporary differences.~~timing differences related to depreciation and a deferred tax asset of $2.1 million arising from the NOL acquired. In connection with the ~~2012~~2013 Acquisitions, the Company was required to complete a ~~preliminary~~ fair market value report of property, plant and equipment and intangibles. As a result of that report, the Company established deferred tax liabilities at the date of acquisition in the ~~amounts~~amount of ~~$1.7~~$0.6 million and ~~$0.6~~$1.0 million respectively for the ~~Fibreco~~TRP and ~~GigaCom~~Array acquisitions. At ~~June 30, 2013 and December~~March 31, ~~2012,~~2014, a ~~combined~~net deferred tax ~~liability~~asset of ~~$2.1~~$1.9 million ~~and $2.2 million, respectively,~~ remains on the condensed consolidated balance sheets. Upon completion of the acquisition of TRP, TRP had deferred tax assets of $2.2 million arising from various temporary differences, which are included in the condensed consolidated balance sheet at June 30, 2013. It is the Company’s intention to repatriate substantially all net income from its wholly owned PRC subsidiary, DG Transpower, a Chinese Limited Company, to its indirect Hong Kong parent company Transpower Technologies (Hong Kong) Ltd. Applicable income and dividend withholding taxes have been reflected in the accompanying condensed consolidated statements of operations for the three and six months ended June 30, 2013. However, U.S. deferred taxes need not be provided under current U.S. tax law. At June 30, 2013, the fair market value reports have not been completed and therefore the Company had no additional deferred tax amounts relating to the Bel Power Europe and TRP acquisitions.sheet.

The Company ~~has made elections under Internal Revenue Code (“IRC”) Section 338(g)~~does not intend to ~~step-up~~make any election to step up the tax basis of the ~~2012~~2013 Acquisitions to fair ~~value. The elections made~~value under IRC Section 338(g) ~~affect only the U.S. income taxes (not those of the foreign countries where the acquired entities were incorporated)~~.

On ~~January 2,~~December 31, 2013, ~~President Obama signed~~under the “American Taxpayer Relief Act” (“ATRA”)~~. Among other things, ATRA extends~~, the Research and Experimentation credit (“R&E”)~~, which expired at~~ expired. The Company did not recognize any R&E credits during the ~~end of 2011, through 2013 and~~three months ended March 31, 2014. If the R&E credit is extended back to January 1, 2014, ~~respectively. Under Accounting Standards Codification (“ASC”) 740,~~ ~~Income Taxes, the effects of the new legislation are recognized upon enactment, which is when the President signs a tax bill into law. Although the extenders were effective retroactively for 2012,~~ the Company ~~could only consider currently enacted tax law as of~~will recognize the ~~balance sheet date in determining current and deferred taxes~~R&E credit at ~~December 31, 2012.~~that time. The annual R&E credit is approximately $0.4 million. During the first quarter of 2013, the Company recognized ~~the~~a $0.4 million R&E credit from 2012 as an increase in the March 31, 2013 quarterly benefit for income taxes.

The Company continues to monitor proposed legislation affecting the taxation of transfers of U.S. intangible property and other potential tax law changes.

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8. ACCRUED EXPENSES

Accrued expenses consist of the following (dollars in thousands):

	June 30,		December 31,		March 31,		December 31,
	2013		2012		2014		2013
Sales commissions	$	1,837	$	1,295	$	1,378	$	1,431
Subcontracting labor		2,818		2,408		2,201		2,406
Salaries, bonuses and related benefits		8,568		6,023		8,706		13,674
Litigation reserve		11,550		11,549		724		723
Consideration payable on Transpower acquisition		786		-
Other		4,187		4,085		3,512		4,208
	$	29,746	$	25,360	$	16,521	$	22,442

~~Accrued Restructuring Costs~~

DEBT

~~Activity~~At March 31, 2014 and ~~liability balances related to restructuring charges for the six months ended June 30, 2013 are shown in the table below (dollars in thousands). The liability at~~ December 31, ~~2012~~2013, the Company maintained a $30 million line of credit, which expires on October 14, 2016. The borrowings under the line of credit amounted to $4.0 million and $12.0 million at March 31, 2014 and December 31, 2013, respectively. At March 31, 2014 and December 31, 2013, the balance available under the credit agreement was $26.0 million and $18.0 million, respectively. Amounts outstanding under this line of credit are collateralized with a first priority security interest in 100% of the issued and outstanding shares of the capital stock of the Company's material domestic subsidiaries and 65% of all the issued and outstanding shares of the capital stock of certain of the foreign subsidiaries of the Company. The credit agreement bears interest at LIBOR plus 1.00% to 1.50% based on certain financial statement ratios maintained by the Company. The interest rate in effect on the borrowings outstanding at March 31, 2014 and December 31, 2013 was 1.4% at each date. The Company incurred interest expense of less than $0.1 million related to the ~~final severance payments due~~borrowings under the credit agreement during the three months ended March 31, 2014. There was no interest expense related to the ~~closure~~line of credit during the three months ended March 31, 2013 as there were no borrowings outstanding during that period. Under the terms of the ~~Vinita, Oklahoma manufacturing facility. New charges noted below relate~~credit agreement, the Company is required to ~~severance costs associated~~maintain certain financial ratios and comply with ~~an additional reduction~~other financial conditions. The Company was in ~~workforce implemented in the second quarter~~compliance with its debt covenants as of ~~2013.~~

Liability at New Cash Payments and Liability at
December 31, 2012 Charges Other Settlements June 30, 2013
Severance costs $ 122 $ 1,239 $ (170 ) $ 1,191
Transportation of equipment - 100 (100 ) -
Other restructuring charges - 48 (48 ) -
Total $ 122 $ 1,387 $ (318 ) $ 1,191
March 31, 2014.

9.10. RETIREMENT FUND AND PROFIT SHARING PLAN

The Company maintains the Bel Fuse Inc. Employees’ Savings Plan, a defined contribution plan that is intended to meet the applicable requirements for tax-qualification under sections 401(a) and (k) of the IRC. The Employees’ Savings Plan allows eligible employees to voluntarily contribute a percentage of their eligible compensation, subject to Code limitations, which contributions are matched by the Company. The Company’s matching contributions are equal to 100% of the first 1% of compensation contributed by participants, and 50% of the next 5% of compensation contributed by participants. The expense for the three months ended ~~June 30,~~March 31, 2014 and 2013 ~~and 2012~~ amounted to approximately $0.2 million and $0.1 million, ~~in each period. The expense for the six months ended June 30, 2013 and 2012 amounted to approximately $0.3 million in each period.~~respectively. Prior to January 1, 2012, the plan’s structure provided for a Company match and discretionary profit sharing contributions that were made in the form of the Company’s common stock. As of ~~June 30, 2013,~~March 31, 2014, the plan owned ~~14,925~~14,899 and ~~209,892~~186,030 shares of Bel Fuse Inc. Class A and Class B common stock, respectively.

The ~~Company’s subsidiaries in Asia, other than TRP, have~~Company also has a retirement fund ~~covering~~in Asia which covers substantially all of ~~their~~its Hong Kong-based full-time employees. Eligible employees contribute up to 5% of salary to the fund. In addition, the Company must contribute a minimum of 5% of eligible salary, as determined by Hong Kong government regulations. The Company currently contributes 7% of eligible salary in cash or Company stock. The expense for the three months ended ~~June 30,~~March 31, 2014 and 2013 ~~and 2012 amounted to approximately $0.1 million in each period. The expense for the six months ended June 30, 2013 and 2012~~ amounted to approximately $0.1 million in each period. As of ~~June 30, 2013,~~March 31, 2014, the plan owned 3,323 and 17,342 shares of Bel Fuse Inc. Class A and Class B common stock, respectively.

The Company maintains a SERP plan, which is designed to provide a limited group of key management and highly compensated employees of the Company with supplemental retirement and death benefits.

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The components of SERP expense are as follows (dollars in thousands):

	Three Months Ended				Six Months Ended				Three Months Ended
	June 30,				June 30,				March 31,
	2013		2012		2013		2012		2014		2013
Service cost	$	139	$	109	$	278	$	218	$	138	$	139
Interest cost		112		104		224		208		135		112
Amortization of adjustments		77		58		154		116		46		77
Total SERP expense	$	328	$	271	$	656	$	542	$	319	$	328

	June 30,		December 31,		March 31,		December 31,
	2013		2012		2014		2013
Balance sheet amounts:
Minimum pension obligation
and unfunded pension liability	$	11,713	$	11,045	$	11,103	$	10,830

Amounts recognized in accumulated
other comprehensive loss, pretax:
Prior service cost	$	968	$	877	$	1,184	$	1,230
Net gains		2,804		2,884
Net loss						1,004		1,004
	$	3,772	$	3,761	$	2,188	$	2,234

~~10.~~11. ACCUMULATED OTHER COMPREHENSIVE ~~LOSS~~INCOME

The components of accumulated other comprehensive ~~loss~~income at ~~June 30, 2013~~March 31, 2014 and December 31, ~~2012~~2013 are summarized below (dollars in thousands):

June 30, December 31,
2013 2012

Foreign currency translation adjustment, net of taxes of ($216)
  at June 30, 2013 $ (255 ) $ 927
Unrealized holding gains on available-for-sale
  securities, net of taxes of $150 and $161 as of
  June 30, 2013 and December 31, 2012 238 256
Unfunded SERP liability, net of taxes of ($1,154) and ($1,151) as
  of June 30, 2013 and December 31, 2012 (2,618 ) (2,610 )

Accumulated other comprehensive loss $ (2,635 ) $ (1,427 )

	March 31,			December 31,
	2014			2013

Foreign currency translation adjustment, net of taxes of $111 and $77
at March 31, 2014 and December 31, 2013	$	2,073		$	1,904
Unrealized holding gains on available-for-sale
securities, net of taxes of $186 and $169 as of
March 31, 2014 and December 31, 2013		310			282
Unfunded SERP liability, net of taxes of ($679) and ($693) as
of March 31, 2014 and December 31, 2013		(1,509	)		(1,541	)

Accumulated other comprehensive income	$	874		$	645

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Changes in accumulated other comprehensive loss by component during the ~~six~~three months ended ~~June 30, 2013~~March 31, 2014 are as follows. All amounts are net of tax (dollars in thousands).

Unrealized Holding
Foreign Currency Gains on
Translation Available-for- Unfunded
Adjustment Sale Securities SERP Liability Total

Balance at January 1, 2013 $ 927 $ 256 $ (2,610 ) $ (1,427 )
     Other comprehensive loss before reclassifications (1,182 ) (18 ) (162 ) (1,362 )
     Amounts reclassified from accumulated other
          comprehensive loss - - 154 154 (a)
     Net current period other comprehensive loss (1,182 ) (18 ) (8 ) (1,208 )

Balance at June 30, 2013 $ (255 ) $ 238 $ (2,618 ) $ (2,635 )

(a) This reclassification from accumulated other comprehensive loss relates to the amortization of prior service costs and gains/losses
associated with the Company's SERP plan. This expense is allocated between cost of sales and selling, general and administrative
expense based upon the employment classification of the plan participants.

			Unrealized Holding
	Foreign Currency		Gains on
	Translation		Available-for-		Unfunded
	Adjustment		Sale Securities		SERP Liability					Total

Balance at January 1, 2014	$	1,904	$	282	$	(1,541	)			$	645
Other comprehensive income (loss) before reclassifications		169		28		-					197
Amounts reclassified from accumulated other
comprehensive income (loss)		-		-		32		(a)			32
Net current period other comprehensive income (loss)		169		28		32			��		229

Balance at March 31, 2014	$	2,073	$	310	$	(1,509	)			$	874

(a) This reclassification relates to the amortization of prior service costs associated with the Company's SERP plan.
This expense is allocated between cost of sales and selling, general and administrative expense based upon the employment
classification of the plan participants.

~~11. COMMITMENTS AND CONTINGENCIES~~

~~Leases~~

The Company leases various facilities. Some of these leases require the Company to pay certain executory costs (such as insurance and maintenance). At December 31, 2012, the Company’s total future minimum lease payments for operating leases amounted to $11.5 million. The only significant change since December 31, 2012 relates to the inclusion of TRP lease commitments. At June 30, 2013, the additional lease commitments related to TRP amounted to $2.7 million.

~~Other Commitments~~

The Company submits purchase orders for raw materials to various vendors throughout the year for current production requirements, as well as forecasted requirements. Certain of these purchase orders relate to special purpose material and, as such, the Company may incur penalties if the order is cancelled. At December 31, 2012, the Company had outstanding purchase orders related to purchase of raw materials in the aggregate amount of $18.8 million and purchase orders related to capital expenditures of $1.7 million. The only significant change since December 31, 2012 relates to the inclusion of TRP purchase orders. At June 30, 2013, the Company had additional purchase orders related to the purchase of raw materials of $4.5 million associated with TRP and additional purchase orders related to capital expenditures of $0.2 million associated with TRP.

~~Legal Proceedings~~12. LEGAL PROCEEDINGS

The Company is party to a number of legal actions and claims, none of which individually or in the aggregate, in the opinion of management, are expected to have a material adverse effect on the Company’s results of operations or financial position. See the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2012~~2013 for the details of all of Bel’s material pending lawsuits. Certain developments that have arisen in legal proceedings subsequent to the filing of the Company’s Annual Report on Form 10-K are described below.

The Company iswas a defendant in a lawsuit captioned SynQor, Inc. v. Artesyn Technologies, Inc., et al. brought in the United States District Court, Eastern District of Texas in November ~~2007.~~2007 (“SynQor I case”). The plaintiff alleged that eleven defendants, including Bel, infringed its patents covering certain power products. With ~~respect~~respect to the Company, the plaintiff claimed that the Company infringed its patents related to unregulated bus converters and/or point-of-load (POL) converters used in intermediate bus architecture power supply systems. The case initially went to trial in December ~~2010 and a partial judgment~~2010. A decision was ~~entered on December 29, 2010 based on the jury verdict. The jury found that certain products~~ultimately rendered in November 2013 in favor of the ~~defendants directly and/or indirectly infringe the SynQor patents. The jury awarded damages of $8.1 million against~~plaintiff, and the Company ~~which was recorded by the~~released a payment to SynQor of $10.9 million. The Company assubsequently received a ~~litigation charge in the consolidated statement~~$2.1 million payment from one of ~~operations in the fourth quarter of 2010. On July 11, 2011, the Court awarded supplemental damages of $2.5 million against the Company. Of this amount, $1.9 million is covered through~~its customers related to an indemnification agreement ~~with one~~and reimbursement of Bel’s customers and the remaining $0.6 million was recorded as an expense by the Company during the second quarter of 2011. During the third quarter of 2011, the Company recorded costs and interest associated with this lawsuit of $0.2 million. A final judgment in the case was entered on August 17, 2011. The Company was in the process of appealing the verdict and judgment and filed a notice of appeal with the Federal Circuit Court of Appeals on October 28, 2011. The Company was advised that the full amount of the damage award plus costs and interest would need to be posted as a supersedeas bond upon filing of the notice of appeal. In November 2011, the Company posted a $13.0 million supersedeas bond to the Court in the Eastern District of Texas while the case was on appeal to the Federal Circuit. The amount of the bond was reflected as restricted cash in the accompanying condensed consolidated balance sheets at June 30, 2013 and December 31, 2012. The United States Court of Appeals for the Federal Circuit (“CAFC”) heard oral argument in the SynQor case on October 2, 2012 and issued its opinion on March 13, 2013. In its opinion, the CAFC affirmed the district court’s findings and judgment on all issues up on appeal. The Company and the other Defendants jointly filed a Petition for Rehearing En Banc with the CAFC on April 12, 2013, which was denied by the CAFC on May 14, 2013. The Defendants are in the process of filing a joint petition for certiorari with the Supreme Court.certain legal fees.

~~Return to Index~~

In a related matter, on September 29, 2011, the United States District Court for the Eastern District of Texas ordered SynQor, Inc.’s continuing causes of action for ~~post-injunction~~post-verdict damages to be severed from the original action and assigned to a new case number. The new action captioned SynQor, Inc. v. Artesyn Technologies, Inc., et al. (Case Number 2:11cv444) is a patent infringement action for damages in the form of lost profits and reasonable royalties for the period beginning January 24, ~~2011.~~2011 (“SynQor II case”). SynQor, Inc. also seeks enhanced damages. The Company has an indemnification agreement in place with one of its customers specifically covering ~~post-injunction~~post-verdict damages related to this case. ~~As a result, the Company does not anticipate that its consolidated statement of operations will be materially impacted by any potential post-injunction damages.~~ This case went to trial on July 30, 2013. In April 2014, a final judgment was rendered in this case, whereby the Company was assessed an additional $0.7 million in post-verdict damages. This amount was accrued at March 31, 2014, and is subject to reimbursement under the previously-mentioned indemnification agreement.

The Company is a plaintiff in a lawsuit captioned Bel Fuse Inc. et al. v. Molex Inc. brought in the United District Court of New Jersey in April 2013. The Company claims that Molex infringed three of the Company’s patents related to integrated magnetic connector products. Molex ~~is scheduled~~filed a motion to ~~file its Answer to~~dismiss the ~~Complaint~~complaint on August 6, 2013. The Company filed an amended complaint and response on August 20, 2013. Molex withdrew its original Motion to Dismiss and filed a second, revised Motion to Dismiss on September 6, 2013. The Company filed its response on October 7, 2013. There is no further update on this case as of the filing date of this Quarterly Report on Form 10-Q.

~~12.~~13. SUBSEQUENT EVENT

~~In July 2013,~~On April 25, 2014, the Company ~~finalized its insurance claim related~~entered into a Stock and Asset Purchase Agreement with ABB Ltd. (“ABB”) pursuant to which the ~~property damage inflicted by Hurricane Sandy~~Company has agreed to acquire the Power-One Power Solutions business from ABB for approximately $117.0 million in ~~October 2012. Insurance proceeds~~cash. This acquisition is expected to close at the end of ~~$0.7 million were received in July~~the second quarter of 2014 and will be ~~reported as income in the third quarter of 2013.~~funded through bank borrowings and cash on hand.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The Company’s quarterly and annual operating results are impacted by a wide variety of factors that could materially and adversely affect revenues and profitability, including the risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2012.~~2013. As a result of these and other factors, the Company may experience material fluctuations in future operating results on a quarterly or annual basis, which could materially and adversely affect its business, financial condition, operating results, and stock prices. Furthermore, this document and other documents filed by the Company with the Securities and Exchange Commission (the “SEC”) contain certain forward-looking statements under the Private Securities Litigation Reform Act of 1995 (“Forward-Looking Statements”) with respect to the business of the Company. These Forward-Looking Statements are subject to certain risks and uncertainties, including those detailed in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2012,~~2013, which could cause actual results to differ materially from these Forward-Looking Statements. The Company undertakes no obligation to publicly release the results of any revisions to these Forward-Looking Statements which may be necessary to reflect events or circumstances after the date such statements are made or to reflect the occurrence of unanticipated events. An investment in the Company involves various risks, including those which are detailed from time to time in the Company’s SEC filings.

Overview

Our Company

The Company designs, manufactures and markets a broad array of magnetics, modules, circuit protection devices and interconnect ~~products. Bel’s~~products, as further described below. These products are designed to protect, regulate, connect, isolate or manage the flow of power and data among products primarily used in the networking, telecommunications, computing, military, aerospace, transportation and broadcasting industries. Bel’s portfolio of products also finds application in the automotive, medical and consumer electronics markets.

Bel’s business is operated through three geographic segments: North America, Asia and Europe. During the ~~six~~three months ended ~~June 30, 2013,~~March 31, 2014, 52% of the Company’s revenues were derived from Asia, 35% from North America and 13% from its Europe operating segment. Sales of the Company’s magnetic products represented approximately ~~45%~~48% of its total net sales during the ~~six~~three months ended ~~June 30, 2013.~~March 31, 2014. The remaining revenues related to sales of the Company’s interconnect products ~~(34%~~(36%), module products ~~(18%~~(13%) and circuit protection products (3%).

The Company’s expenses are driven principally by the cost of labor where the factories that Bel uses are located, the cost of the materials that it uses and its ability to effectively and efficiently manage overhead costs. As labor and material costs vary by product line, any significant shift in product mix can have an associated impact on the Company’s costs of sales. Costs are recorded as incurred for all products manufactured. Such amounts are determined based upon the estimated stage of production and include labor cost and fringes and related allocations of factory overhead. The Company’s products are manufactured at various facilities in: the People’s Republic of China (“PRC”); Glen Rock, Pennsylvania; Inwood, New York; McAllen, Texas; Miami, Florida; Haina, Dominican Republic; Reynosa and Cananea, Mexico; Louny, Czech Republic; and Worksop and Great Dunmow, England.

In the PRC, where the Company generally enters into processing arrangements with several independent third-party contractors and also has its own manufacturing facilities, the availability of labor is cyclical and is significantly affected by the migration of workers in relation to the annual Lunar New Year holiday as well as economic conditions in the PRC. In addition, the Company has little visibility into the ordering habits of its customers and can be subjected to large and unpredictable variations in demand for its products. Accordingly, the Company must continually recruit and train new workers to replace those lost to attrition each year and to address peaks in demand that may occur from time to time. These recruiting and training efforts and related inefficiencies, and overtime required in order to meet demand, can add volatility to the costs incurred by the Company for labor in the PRC.

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Trends Affecting our Business

The Company believes the key factors affecting Bel’s ~~six~~results for the three months ended ~~June 30, 2013~~March 31, 2014 and/or future results include the following:

Recent Acquisitions – ~~On March 29, 2013, the~~The Company completed its ~~purchase~~acquisitions of TRP and Array during late-March and August 2013, respectively. During the ~~Transpower magnetics business and other tangible and intangible assets of TE Connectivity (“TRP”). The TRP business~~three months ended March 31, 2014, these acquisitions contributed ~~$22.0~~a combined $17.9 million of sales and a combined $1.0 million of income from operations. Due to the timing of the acquisition dates, there were no contributions of operating results related to either acquisition during the three ~~and six~~ months ended ~~June 30,~~March 31, 2013. The Company also completed three small acquisitions in 2012. Fibreco and Powerbox, both acquired in 2012, contributed a combined $3.0 million and $5.9 million of sales during the three and six months ended June 30, 2013, respectively.

~~Restructuring Program~~ – The Company had substantially completed its plan to effect operational efficiencies by the end of 2012. The Company continued its efforts in the first half of 2013 to bring the new manufacturing facility in McAllen, Texas up to full operating capacity. The Company faced certain challenges with the transition, resulting in $2.8 million of unanticipated costs during the first half of 2013, of which $1.1 million was incurred during the second quarter. These costs included additional overtime, scrap, a higher volume of purchased materials, expedited freight charges and other costs. During the second quarter of 2013, the Company also initiated additional restructuring actions which resulted in $1.3 million of severance and other charges in the second quarter. The Company does not anticipate any significant costs related to restructuring programs for the foreseeable future.

Revenues – Excluding the revenue contributions from ~~recent acquisitions as~~the 2013 Acquisitions described above, the Company’s revenues for the ~~first half of 2013 decreased~~three months ended March 31, 2014 increased by ~~$9.6~~$1.7 million as compared to the same period of 2013. Bel’s magnetic and interconnect product lines had increases in revenue of $1.8 million and $2.4 million, respectively, during the first ~~half~~quarter of ~~2012. The decrease in sales was primarily due~~2014 as compared to ~~reduced orders~~the first quarter of module products from one customer in North America. The order volume related to this customer has now stabilized, but we expect to report large year-over-year decreases (2013 vs. 2012) in our module products group through the end of 2013 as a result of the lower volume in 2013. ~~Revenue reductions resulting from manufacturing inefficiencies associated with the restructuring of Cinch operations described above~~These increases were partially offset by ~~increases~~a $2.5 million decrease in the sales volume of Bel’s magnetic and DC-DC products. Bel is in the process of implementing price increases for certain products as our current pricing structure does not reflect the rising labor costs in the PRC as discussed below. Management expects the majority of these changes to be in effect by the fourth quarter of 2013.module sales.

Product Mix – Material and labor costs vary by product line and any significant shift in product mix between higher- and lower-margin product lines will have a corresponding impact on the Company’s gross margin percentage. During the ~~first half of 2013,~~three months ended March 31, 2014, the Company experienced a favorable shift in the mix of products sold as compared to the same period of ~~2012, which partially mitigated the effects of reduced sales and operational inefficiencies at our Texas facility.~~2013.

Pricing and Availability of Materials – ~~Component pricing~~Pricing and availability of components that constitute raw materials in our manufacturing processes have been stable for most of the Company’s product lines, although lead times on electrical components are still extended. While pricing of electrical components during the first quarter of 2014 was consistent with the same period of 2013, there have been recent pricing pressures in this area which may impact future quarters. With regard to ~~commodities,~~commodity pricing, the ~~Company has experienced some price decreases related to precious metals during the latter part~~cost of ~~2012 and that trend has continued into the first half of 2013. Costs for~~ certain commodities ~~including~~that are contained in components and other raw materials, such as gold and copper, were lower induring the first ~~half~~quarter of ~~2013~~2014 as compared to the first ~~half~~quarter of ~~2012.~~2013. Any fluctuations in component prices and other commodity prices associated with Bel’s raw materials will have a corresponding impact on Bel’s profit margins.

Labor Costs – Labor costs as a percentage of sales increased from 12.6% during the first ~~half~~quarter of 2013 ~~were essentially flat as compared~~ to 14.2% during the first ~~half~~quarter of ~~2012. Following the 2012 Lunar New Year holiday, additional recruiting, training and overtime charges were incurred in the PRC; this trend did not recur in 2013. However, rising~~2014. Rising labor costs in the PRC and the strengthening of the Chinese Renminbi continue to impact our overall profit margins. With the addition of TRP, approximately half of Bel’s total sales are now generated from labor-intensive magnetic products, which are primarily manufactured in the PRC. In February 2013, the PRC government ~~issued a 19% increase to~~increased the minimum wage by 19% in regions where the factories that Bel uses are located. This increase was effective May 1, 2013.

~~Impact of Pending Lawsuits~~ – As further described in Note 11 to the accompanying condensed consolidated financial statements, there has been additional legal activity in 2013 related to the SynQor and Molex lawsuits. Ongoing legal costs related to these lawsuits will impact the profit margins of future quarters.

Acquisition-Related Costs – ~~The~~Bel continues to pursue additional acquisition of TRP in 2013 and the valuations of the 2012 Acquired Companies gave rise to acquisition-related costs of $0.5 million during the first six months of 2013. Bel’s continuing strategy to actively consider potential acquisitionsopportunities that could result in additional legal and other professional costs in future periods.

Effective Tax Rate – The Company’s effective tax rate will fluctuate based on the geographic segment in which the pretax profits are earned. Of the geographic segments in which the Company operates, the U.S. has the highest tax rates; Europe’s tax rates are generally lower than U.S. tax rates; and Asia has the lowest tax rates of the Company’s three geographical segments. The change in the effective tax rate during the ~~six~~three months ended ~~June 30,~~March 31, 2014 compared to the first quarter of 2013 is primarily ~~attributable~~attributed to a pretax profit in the ~~recognition under~~North America and Asia segments for the ~~new tax law, ATRA, of~~three months ended March 31, 2014 compared to a pretax loss in these geographic segments for the same period in 2013. In addition, for the three months ended March 31, 2013, the Company recognized an additional $0.4 million in Research and Experimentation (“R&E&E”) credits related to the year ended December 31, 2012, which the Company recognized during the first quarter of 2013. In addition, the Company incurred a loss in the North America segment for the six months ended June 30, 2013, compared to a pretax profit for the same period in 2012, which was partially offset by an increase in the Asia segment pretax profit. Additionally, the Company reversed a portion2012. See Note 7 of the liability for uncertain tax positions related to the results of the Internal Revenue Service audit which resulted in a reduction to the tax provision for the six months ended June 30, 2012. It is the Company’s intention to repatriate substantially all net income from its wholly owned PRC subsidiary, DG Transpower, a Chinese Limited Company, to its indirect Hong Kong parent company Transpower Technologies (Hong Kong) Ltd. Applicable income and dividend withholding taxes have been reflected. However, U.S. deferred taxes need not be provided under current U.S. tax law.condensed consolidated financial statements.

~~Return~~Bel’s continuing strategy to ~~Index~~

~~With the completion of the three~~leverage its overhead structure by increasing revenue primarily through acquisitions is generating positive results. The Company added significantly to revenue and earnings through acquisitions in ~~2012,~~2013 and additional acquisition opportunities, if consummated, would further expand Bel’s business in 2014. In addition to the acquisition strategy, management remains focused on controlling costs, increasing manufacturing efficiency through integration and automation, and the ~~acquisition~~adoption of ~~TRP during~~best practices throughout the first quarter of 2013, management is optimistic that the resulting opportunities will fuel growth in our core product groups in future periods. Management believes that the difficulties experienced during the first half of 2013 related to the transition of Cinch’s manufacturing operations were largely resolved by the end of the second quarter and we look forward to seeing the benefits of these active measures during the second half of 2013.organization. Statements regarding future results constitute Forward-Looking Statements and could be materially adversely affected by the risk factors identified by the Company in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2012.~~2013.

-17-

Summary by Reportable Operating Segment

Net sales to external customers by reportable operating segment for the three ~~and six~~ months ended ~~June 30,~~March 31, 2014 and 2013 ~~and 2012~~ were as follows (dollars in thousands):

	Three Months Ended								Six Months Ended								Three Months Ended
	June 30,								June 30,								March 31,
	2013				2012				2013				2012				2014				2013
North America	$	28,628	30	%	$	32,059	44	%	$	55,444	35	%	$	65,496	47	%	$	28,732	35	%	$	26,817	42	%
Asia		55,157	59	%		34,412	47	%		81,573	52	%		58,889	43	%		43,048	52	%		26,415	42	%
Europe		10,196	11	%		6,751	9	%		19,992	13	%		14,398	10	%		10,866	13	%		9,796	16	%
	$	93,981	100	%	$	73,222	100	%	$	157,009	100	%	$	138,783	100	%	$	82,646	100	%	$	63,028	100	%

Net sales and income (loss) from operations by reportable operating segment for the three ~~and six~~ months ended ~~June 30,~~March 31, 2014 and 2013 ~~and 2012~~ were as follows (dollars in thousands):

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30,						June 30,						March 31,
	2013			2012			2013			2012			2014			2013
Total segment sales:
North America	$	32,301		$	35,455		$	61,523		$	71,980		$	31,454		$	29,222
Asia		64,036			43,795			96,760			78,642			49,891			32,725
Europe		10,591			7,227			20,716			15,217			10,892			10,125
Total segment sales		106,928			86,477			178,999			165,839			92,237			72,072
Reconciling item:
Intersegment sales		(12,947	)		(13,255	)		(21,990	)		(27,056	)		(9,591	)		(9,044	)
Net sales	$	93,981		$	73,222		$	157,009		$	138,783		$	82,646		$	63,028

Income (loss) from operations:
North America	$	(2,012	)	$	1,953		$	(3,495	)	$	4,263		$	882		$	(1,482	)
Asia		4,642			523			3,977			(1,039	)		1,673			(666	)
Europe		(82	)		(143	)		659			538			326			721
	$	2,548		$	2,333		$	1,141		$	3,762		$	2,881		$	(1,427	)

~~The recent~~During the three months ended March 31, 2014, the acquisition of TRP contributed ~~$22.0~~revenues of $15.6 million ~~in sales~~and income from operations of $1.4 million to the Company’s Asia operating segment ~~during the three~~ and ~~six months ended June 30, 2013. Sales in the Company’s Europe operating segment were favorably impacted by the acquisitions~~revenues of ~~Fibreco and Powerbox which occurred in the second half of 2012. These two acquisitions contributed sales of $3.0~~$0.6 million ~~and $5.9 million during the three and six months ended June 30, 2013, respectively,~~ and income from operations of ~~$0.2~~$0.1 million to the Company’s Europe operating segment. The acquisition of Array contributed $1.6 million of sales and ~~$1.1~~a loss from operations of $0.5 million ~~during~~to the ~~three and six months ended June 30, 2013.~~Company’s North America operating segment. The ~~decrease~~improvement in ~~sales~~income from operations in North America ~~primarily related~~in the first quarter of 2014 as compared to ~~reduced demand in~~ 2013 ~~for Bel’s module products which are manufactured in China. Thus,~~relates to the ~~decrease in North American~~Cinch operations. Both sales ~~caused a corresponding decrease in intersegment sales of module products~~and income from ~~Asia to North America. North America sales~~operations during the first ~~half~~quarter of 2013 were ~~also~~negatively impacted by the ~~transition~~relocation of ~~operations from~~ Cinch’s manufacturing ~~facility in Vinita, Oklahoma to its new manufacturing facility in McAllen, Texas.~~operations. Manufacturing inefficiencies resulted in reduced production levels and lower overall sales of Cinch products. In addition, various other costs associated with the Cinch reorganization further reduced our income from operations in North America during 2013. These transition issues were resolved by the ~~first half~~end of 2013.

~~Return to Index~~

Overview of Financial Results

Sales for the ~~first half of 2013~~three months ended March 31, 2014 increased by ~~13.1%~~31.1% to ~~$157.0~~$82.6 million from ~~$138.8~~$63.0 million for the ~~first half~~same period of ~~2012.~~2013. Sales were favorably impacted by the contributions made by the ~~recent~~ acquisitions of TRP ~~Powerbox~~ and ~~Fibreco. Costs incurred related to~~Array, and the ~~transition~~rebounding of Cinch sales after the relocation of its manufacturing operations in early 2013. Pricing to customers was adjusted during the ~~new manufacturing facility~~latter half of 2013 to recover some of the higher labor costs in ~~Texas heavily impacted our profit margin~~China and other cost increases resulting from the continued strengthening of the Chinese Renminbi. These increased prices are reflected in the first half of 2013. Margins in our traditional connector, magnetic and circuit protection businesses continued to be affected by higher labor costs, and pricing to customers during the first half of 2013 did not yet reflect these higher costs.quarter 2014 sales figures above. Selling, general and administrative expense was ~~$4.1~~$0.8 million higher in the first ~~half~~quarter of ~~2013~~2014 as compared to the same period of ~~2012,~~2013, primarily due to the inclusion of expenses from the acquisition of TRP and the 2012 Acquired Companies as well as higher acquisition-related costs, legal and professional fees in 2013. The Company also incurred $1.4 million of restructuring charges in the first half of 2013 related to additional workforce reductions.recent acquisitions. These factors led to net earnings of ~~$1.9~~$2.5 million for the first ~~half~~quarter of ~~2013~~2014 as compared to a net ~~earnings~~loss of ~~$2.3~~$0.6 million for the ~~first half~~same period of ~~2012.~~2013. Additional details related to these factors affecting the ~~six-month~~first quarter results are described in the Results of Operations section below.

-18-

Critical Accounting Policies

The Company’s discussion and analysis of its financial condition and results of operations are based upon the Company’s condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to product returns, bad debts, inventories, goodwill, intangible assets, investments, SERP expense, income taxes and contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Recent Accounting Pronouncements

The discussion of new financial accounting standards applicable to the Company is incorporated herein by reference to Note 1.1 to the Company’s Financial Statements, “Basis of Presentation and Accounting ~~Policies”~~Policies,” included in Part I, Item ~~1. “Financial Statements (unaudited).”~~1 of this Quarterly Report on Form 10-Q.

Results of Operations

The following table sets forth, for the periods presented, the percentage relationship to net sales of certain items included in the Company’s condensed consolidated statements of operations.

		Percentage of Net Sales				Percentage of Net Sales					Percentage of Net Sales
		Three Months Ended				Six Months Ended					Three Months Ended
		June 30,				June 30,					March 31,
		2013		2012		2013		2012			2014		2013

Net sales	Net sales	100.0	%	100.0	%	100.0	%	100.0	%	Net sales	100.0	%	100.0	%
Cost of sales	Cost of sales	83.0		83.4		84.0		83.7		Cost of sales	83.0		85.6
Selling, general and administrative ("SG&A") expenses	Selling, general and administrative ("SG&A") expenses	12.9		13.1		14.3		13.3		Selling, general and administrative ("SG&A") expenses	13.5		16.5
Restructuring charges		1.3		0.3		0.9		0.3
Impairment of investment		-		(0.7)		-		(0.3)
Restructuring charge										Restructuring charge	-		0.2
Interest income and other, net	Interest income and other, net	0.1		0.1		0.1		0.1		Interest income and other, net	-		0.1
Earnings before provision (benefit) for income taxes		2.8		2.7		0.8		2.5
Earnings (loss) before provision (benefit) for income taxes										Earnings (loss) before provision (benefit) for income taxes	3.5		(2.2)
Provision (benefit) for income taxes	Provision (benefit) for income taxes	0.2		0.7		(0.4)		0.8		Provision (benefit) for income taxes	0.5		(1.3)
Net earnings		2.6		2.0		1.2		1.7
Net earnings (loss)										Net earnings (loss)	3.0		(0.9)

~~Return to Index~~

The following table sets forth the year over year percentage increase ~~(decrease)~~ of certain items included in the Company’s condensed consolidated statements of operations.

Increase from Increase (Decrease) from
Prior Period Prior Period
Three Months Ended Six Months Ended
June 30, 2013 June 30, 2013
Compared with Compared with
Three Months Ended Six Months Ended
June 30, 2012 June 30, 2012

Net sales                           28.4 %                             13.1 %
Cost of sales                           27.8                             13.5
SG&A expenses                           26.8                             22.3
Net earnings                           68.4                           (18.5)

	Increase from
	Prior Period
	Three Months Ended
	March 31, 2014
	Compared with
	Three Months Ended
	March 31, 2013

Net sales		31.1	%
Cost of sales		27.2
SG&A expenses		7.6
Net earnings/loss		548.6

-19-

Sales

Net sales increased ~~28.4%~~31.1% from ~~$73.2~~$63.0 million during the three months ended ~~June 30, 2012~~March 31, 2013 to ~~$94.0~~$82.6 million during the three months ended ~~June 30, 2013. Net sales increased 13.1% from $138.8 million during the six months ended June 30, 2012 to $157.0 million during the six months ended June 30, 2013.~~March 31, 2014. The Company’s net sales by major product line for the three ~~and six~~ months ended ~~June 30,~~March 31, 2014 and 2013 ~~and 2012~~ were as follows (dollars in thousands):

	Three Months Ended								Six Months Ended								Three Months Ended
	June 30,								June 30,								March 31,
	2013				2012				2013				2012				2014				2013
Interconnect products																	$	30,170	36	%	$	26,112	41	%
Magnetic products	$	48,758	52	%	$	24,558	34	%	$	70,015	45	%	$	43,757	32	%		39,298	48	%		21,257	34	%
Interconnect products		27,093	29	%		27,368	37	%		53,205	34	%		54,609	39	%
Module products		14,794	16	%		18,608	25	%		28,164	18	%		35,324	25	%		10,850	13	%		13,370	21	%
Circuit protection products		3,336	3	%		2,688	4	%		5,625	3	%		5,093	4	%		2,328	3	%		2,289	4	%
	$	93,981	100	%	$	73,222	100	%	$	157,009	100	%	$	138,783	100	%	$	82,646	100	%	$	63,028	100	%

~~The~~Sales of the Company’s magnetic ~~product line, which includes Bel’s MagJack and~~products for the ~~newly-acquired~~first quarter of 2014 include $16.2 million of TRP integrated connector module (ICM) ~~products, had a strong~~products. As TRP was acquired in late-March 2013, there were no contributions from TRP during the first ~~half~~quarter of 2013. ~~TRP accounted for $22.0~~The acquisition of Array in August 2013 contributed $1.6 million of the increase from 2012 in both the three- and the six-month periods noted above. Bel’s MagJack and other ICMs increased by $1.2 million and $3.0 million during the three- and six-month periods ended June 30, 2013, respectively, as compared to the same periods of 2012. The workforce return rate after the Lunar New Year holiday in the PRC was higher than that of the prior year, resulting in more efficient operations in Asia. Revenue in Bel’s interconnect product line in the first half of 2013 was down slightly from the comparable period of 2012. Fibreco contributed $2.2 million and $4.2 millionsales to the Company’s interconnect ~~sales~~product line during the ~~three and six month ended June 30, 2013; however, these sales were more than offset by reduced shipments~~first quarter of ~~Cinch products during those same periods. Sales in the Company’s module product line continued to decline in~~2014. During the first ~~half~~quarter of 2013, the Company experienced a reduction in sales of Cinch’s interconnect products due to ~~reduced order volume~~the relocation of ~~one customer, partially offset by higher sales of DC-DC and AC-DC module products.~~its manufacturing operations.

Cost of Sales

The Company’s cost of sales as a percentage of consolidated net sales for the three ~~and six~~ months ended ~~June 30,~~March 31, 2014 and 2013 ~~and 2012~~ was comprised of the following:

	Three Months Ended		Six Months Ended		Three Months Ended
	June 30,		June 30,		March 31,
	2013	2012	2013	2012	2014	2013
Material costs	45.6%	45.6%	45.9%	45.6%	42.3%	46.3%
Labor costs	15.3%	15.4%	14.2%	14.6%	14.2%	12.6%
Research and development expenses	4.0%	4.2%	4.3%	4.5%	4.1%	4.7%
Other expenses	18.1%	18.2%	19.6%	19.0%	22.4%	22.0%
Total cost of sales	83.0%	83.4%	84.0%	83.7%	83.0%	85.6%

~~Return to Index~~

~~While overall material~~Material costs as a percentage of sales ~~remained relatively flat~~were lower in ~~2013~~the first quarter of 2014 as compared to 2012, this was the net result of two offsetting factors. The Company experienced operational inefficiencies and other start-up costs (which are now essentially complete) at the new manufacturing facility in Texas, which resulted in high material costs at the Texas facility related to third-party purchases, at premium prices, of machined parts. There were also high volumes of scrap, rejected materials and expedited freight costs at the Cinch factory during the first ~~half~~quarter of ~~2013. These additional material costs were partially offset by~~2013, primarily due to the reduction in sales of module products, which have a higher material content than Bel’s other product lines. An increase in sales of Cinch and Array products in 2014 also contributed to the decrease, as these products have lower material content than Bel’s other product lines. Material costs during the first quarter of 2013 were also unusually high as the Company experienced operational inefficiencies and other start-up costs related to the relocation of Cinch’s U.S. manufacturing operations.

Labor costs during the first quarter of 2014 increased as a percentage of sales ~~were lower in the first half of 2013~~ as compared to the same period of 2012, as the Company incurred excessive recruiting, training and overtime costs following the 2012 Lunar New Year holiday in Asia, which did not recur in 2013. The increase in other expenses as a percentage of sales for the six months ended June 30, 2013, ~~as compared~~primarily due to the ~~same period~~addition of ~~2012 primarily related to~~TRP and Array in 2013, higher sales of Bel integrated connector module (ICM) and Cinch products, and the ~~inclusion of support labor~~shift in product mix away from low-labor content products described above. Government-mandated wage increases in the PRC and ~~fringe costs~~the strengthening of the ~~2012 Acquired Companies during the first six months of 2013, and duplication of indirect~~Chinese Renminbi further increased labor costs ~~during~~over the ~~transition of Cinch operations from Vinita, Oklahoma to McAllen, Texas, primarily during the first quarter of 2013.~~prior year. These increases ~~in other expenses in 2013~~ were partially offset by ~~a reduction~~the non-recurrence of manufacturing inefficiencies associated with the Cinch manufacturing reorganization in ~~support labor~~early 2013, and ~~fringe costs at other Bel locations due to restructuring actions~~the realization of cost savings from that ~~took place in 2012.~~initiative.

Included in cost of sales are research and development (R&D) expenses of ~~$3.8~~$3.4 million and ~~$3.1~~$3.0 million for the three-month periods ended ~~June 30,~~March 31, 2014 and 2013, ~~and 2012, respectively and $6.7 million and $6.3 million for the six-month periods ended June 30, 2013 and 2012,~~ respectively. The majority of the increase relates to the inclusion of ~~TRP~~ R&D expenses ~~as well as those of the 2012 Acquired Companies,~~associated with TRP and Array, which have been included in Bel’s results since their respective acquisition dates.

Selling, General and Administrative Expenses (“SG&A”)

The dollar amount of SG&A expenses was ~~$2.6~~$0.8 million higher during the three months ended ~~June 30, 2013~~March 31, 2014 as compared to the same period of ~~2012. The increase primarily related~~2013, due almost entirely to the inclusion of SG&A expenses of ~~TRP~~the 2013 Acquisitions. Other factors included a $0.5 million increase in wages and ~~the 2012 Acquired Companies, which totaled $1.6 million during the second quarter of 2013,~~fringe expense and a $0.4 million ~~increase~~reduction in ~~legal and professional fees, additional freight charges~~acquisition-related costs during the first quarter of ~~$0.3 million and a $0.3 million increase in incentive compensation.~~

~~For the six months ended June 30, 2013, the dollar amount of SG&A expense was $4.1 million higher~~2014 as compared to the same period of 2012. Of this increase, $2.3 million related to the inclusion of SG&A expenses of TRP and the 2012 Acquired Companies. Other factors contributing to the increase included a $0.6 million increase in legal and professional fees, $0.5 million of higher acquisition-related costs, an increase in freight charges of $0.5 million and an increase in incentive compensation of $0.4 million, partially offset by a $0.2 million decrease in salaries and fringe cost as a result of the 2012 restructuring efforts.2013.

~~Restructuring Charges~~

-20-

The Company recorded restructuring charges of $0.2 million and $0.4 million during the three and six months ended June 30, 2012, respectively, related to the 2012 restructuring program. During 2013, the Company implemented additional reductions in workforce, resulting in restructuring charges of $1.3 million and $1.4 million during the three and six months ended June 30, 2013, respectively.

Provision (Benefit) for Income Taxes

The Company’s effective tax rate will fluctuate based on the geographic segment in which the pretax profits are earned. Of the geographic segments in which the Company operates, the U.S. has the highest tax rates; Europe’s tax rates are generally lower than U.S. tax rates; and Asia has the lowest tax rates of the Company’s three geographical segments.

The provision (benefit) for income taxes for the three months ended ~~June 30, 2013~~March 31, 2014 was ~~$0.2~~$0.4 million compared to ~~$0.5~~a benefit of ($0.8) million for the three months ended ~~June 30, 2012.~~March 31, 2013. The Company’s earnings before income taxes for the three months ended ~~June 30, 2013~~March 31, 2014 are approximately ~~$0.6~~$4.3 million higher than the same period in ~~2012.~~2013. The Company’s effective tax rate, the income tax provision (benefit) as a percentage of earnings (loss) before provision (benefit) for income taxes, was ~~7.2%~~13.8% and ~~25.4%~~(59.9%) for the three-month periods ended ~~June 30,~~March 31, 2014 and 2013, ~~and 2012,~~ respectively. The change in the effective tax rate during the three months ended ~~June 30, 2013~~March 31, 2014 compared to the ~~second~~first quarter of ~~2012~~2013 is primarily attributed to ~~the increase in the Asia segment profitability. This was offset in part by~~ a ~~loss~~pretax profit in the North America ~~segment~~and Asia segments for the three months ended ~~June, 30, 2013~~March 31, 2014 compared to a pretax ~~profit~~loss in these geographic segments for the same period in ~~2012.~~

~~The (benefit) provision for income taxes~~2013. In addition, for the ~~six~~three months ended ~~June 30,~~March 31, 2013, ~~was ($0.6) million compared to $1.1 million for~~ the six months ended June 30, 2012. The Company’s earnings before income taxes for the six months ended June 30, 2013 are approximately $2.2 million lower than the same period in 2012. The Company’s effective tax rate was (51.4%) and 32.6% for the six-month periods ended June 30, 2013 and 2012, respectively. The change in the effective tax rate during the six months ended June 30, 2013 compared to the same period of 2012 is primarily attributed to the recognition under the new tax law, ATRA, ofCompany recognized an additional $0.4 million in R&E ~~credit,~~credits related to the year ended December 31, ~~2012, which~~2012. See Note 7 of the Company recognized during the first quarter of 2013. In addition, the Company incurred a loss in the North America segment for the six months ended June 30, 2013 compared to a pretax profit for the same period in 2012, which was partially offset by the increase in the Asia segment pretax profit.

~~Return to Index~~

condensed consolidated financial statements.

Liquidity and Capital Resources

Historically, the Company has financed its capital expenditures primarily through cash flows from operating activities and has financed acquisitions through cash flows from operating activities, cash reserves, borrowings, and the issuance of Bel Fuse Inc. common stock. Management believes that the cash flow from operations after payments of dividends combined with its existing capital base, cash reserves and the Company’s available line of credit will be sufficient to fund its operations for at least the next twelve months. Such statement constitutes a Forward-Looking Statement. Factors which could cause the Company to require additional capital include, among other things, a softening in the demand for the Company’s existing products, an inability to respond to customer demand for new products, potential acquisitions (as discussed below) requiring substantial capital, future expansion of the Company’s operations and net losses that would result in net cash being used in operating, investing and/or financing activities which result in net decreases in cash and cash equivalents. Net losses may impact availability under our credit facility and preclude the Company from raising debt or equity financing in the capital markets on affordable terms or otherwise.

The Company has an unsecured credit agreement in the amount of $30 million, which expires on ~~June 30, 2014. There have not been any~~October 14, 2016. The borrowings under the line of credit amounted to $4.0 million and $12.0 million at March 31, 2014 and December 31, 2013, respectively. At March 31, 2014 and December 31, 2013, the balance available under the credit agreement ~~during 2013 or 2012~~was $26.0 million and as$18.0 million, respectively. Amounts outstanding under this line of credit are collateralized with a ~~result, there was no balance~~first priority security interest in 100% of the issued and outstanding asshares of ~~June 30, 2013 or December 31, 2012.~~the capital stock of the Company's material domestic subsidiaries and 65% of all the issued and outstanding shares of the capital stock of certain of the foreign subsidiaries of the Company. The credit agreement bears interest at LIBOR plus ~~0.75%~~1.00% to ~~1.25%~~1.50% based on certain financial statement ratios maintained by the Company. ~~As a result~~The interest rate in effect on the borrowings outstanding at March 31, 2014 and December 31, 2013 was 1.4% at each date. The Company incurred interest expense of less than $0.1 million related to the borrowings under the credit agreement during the three months ended March 31, 2014. There was no interest expense related to the line of credit during the three months ended March 31, 2013 as there were no borrowings outstanding during that period. Under the terms of the ~~Company’s recent acquisitions, which resulted in a lower cash balance and increased intangible assets,~~credit agreement, the Company ~~has not been~~is required to maintain certain financial ratios and comply with other financial conditions. The Company was in compliance with its ~~tangible net worth~~ debt ~~covenant since the third quarter~~covenants as of ~~2012. The lender has provided a waiver for this event of default.~~March 31, 2014.

On ~~March 29, 2013,~~April 25, 2014, the Company ~~completed its acquisition of TRP~~entered into a Stock and Asset Purchase Agreement with ABB Ltd. (“ABB”) pursuant to which the Company has agreed to acquire the Power-One Power Solutions business from ABB for ~~$22.4~~approximately $117.0 million in ~~cash and additional consideration including~~cash. This acquisition is expected to close at the ~~assumption~~end of ~~$0.1 million in liabilities and the grant of a license to TE related to three of the Company’s patents. During~~ the second quarter of ~~2013, the Company paid an additional $6.8 million in consideration to TE related to a working capital adjustment~~2014 and $0.8 million remains accrued at June 30, 2013. Transpower Technology (HK) Limited is the sole shareholder of Dongguan Transpower Electronic Products Co., Ltd., located in the People's Republic of China. The Company’s purchase of the Transpower magnetics business consisted of the ICM family of products, including RJ45, 10/100 Gigabit, 10G, PoE/PoE+, MRJ21will be funded through bank borrowings and ~~RJ.5, a line of modules for smart-grid applications and discrete magnetics.~~cash on hand.

Cash Flows

During the ~~six~~three months ended ~~June 30, 2013,~~March 31, 2014, the Company’s cash and cash equivalents decreased by ~~$32.7~~$8.2 million. This resulted primarily from ~~a $20.9~~$8.0 million ~~net cash payment for~~of repayments under the ~~acquisition of TRP, $3.1~~revolving credit line, $1.2 million paid for the purchase of property, plant and equipment ~~$1.5~~and $0.8 million for payments of dividends, ~~$3.4~~partially offset by $1.8 million ~~for the repurchase of 178,643 shares of the Company’s Class B common stock, and $3.9 million used in~~provided by operating activities. As compared to the ~~six~~three months ended ~~June 30, 2012,~~March 31, 2013, cash provided by operating activities ~~decreased~~increased by ~~$4.1~~$0.1 million. During the ~~six~~three months ended ~~June 30, 2013,~~March 31, 2014, accounts receivable ~~increased~~decreased by ~~$7.9~~$6.5 million primarily due to lower sales volume in the ~~addition~~first quarter of third party receivables at TRP, which replaced intercompany receivables collected from TRP’s pre-acquisition affiliates. TRP’s third party receivables are higher than their formerly-intercompany receivables due2014 as compared to ~~higher gross margin and longer payment terms on third party sales. The longer payment terms in TRP customer contracts acquired from~~ the ~~seller led to an increase in overall days sales outstanding (DSO), Management intends to bring TRP payment terms in line with those~~fourth quarter of ~~Bel’s existing customer base during contract renewals.~~2013. Inventories ~~increased~~decreased by ~~$4.9~~$2.1 million during the ~~six~~three months ended ~~June 30, 2013 primarily~~March 31, 2014 as, among other factors, production levels during the first quarter of 2014 were lower due to the implementation of a new stocking program, whereby certain of Bel’s customers now have quicker access to commonly-ordered parts. The level of raw materials has also increased since December 31, 2012, as the Company has been building up stocks of long-lead-time materials in order to lower lead times to customers.Chinese New Year holiday.

Cash and cash equivalents, marketable securities and accounts receivable comprised approximately ~~34.8%~~38.3% and ~~41.5%~~40.9% of the Company’s total assets at ~~June 30, 2013~~March 31, 2014 and December 31, ~~2012,~~2013, respectively. The Company’s current ratio (i.e., the ratio of current assets to current liabilities) was ~~3.1~~4.0 to 1 and ~~4.1~~3.0 to 1 at ~~June 30, 2013~~March 31, 2014 and December 31, ~~2012,~~2013, respectively.

-21-

Item 3.3. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to market risk primarily from changes in foreign currency exchange rates and there have not been any material changes with regard to market risk during the ~~six~~three months ended ~~June 30, 2013.~~March 31, 2014. Refer to Item 7A, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2012~~2013 for further discussion of market risks.

Item 4. Controls and Procedures

Disclosure controls and procedures: As of the end of the Company’s most recently completed fiscal quarter covered by this report, the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer and Vice President of Finance, of the effectiveness of the Company’s disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-15. Based on that evaluation, the Company’s Chief Executive Officer and Vice President of Finance concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

~~Return to Index~~

Changes in internal controls over financial reporting: There were no significant changes in the Company’s internal controls over financial reporting that occurred during the Company’s last fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. Other Information

Item 1. Legal Proceedings

The information called for by this Item is incorporated herein by reference to Note ~~11.~~12 of the Company’s Financial Statements, under “Legal Proceedings” ~~included~~, as set forth in Part I, Item ~~1. “Financial Statements (unaudited).”~~1 of this Quarterly Report on Form 10-Q.

~~Item 2~~. ~~Unregistered Sales of Equity Securities and Use of Proceeds~~

In July 2012, Bel’s Board of Directors approved a share buyback program whereby the Company was authorized to repurchase up to $10 million of the Company’s Class B common stock. In connection with the program, the Company repurchased and retired a total of 547,366 shares of the Company’s Class B common stock at an aggregate purchase price of $10.0 million by the end of the first quarter of 2013. This completed the share buyback program approved by the Board in 2012. There were no repurchases of Company stock during the second quarter of 2013.

26-22-

~~Return to Index~~

Item 6. Exhibits

(a) ~~Exhibits~~:Exhibits:

2.1*	Stock purchase agreement by and among Bel Fuse Inc., Power-One, Inc. and PWO Holdings B.V. dated as of April 25, 2014.

31.1*	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*	Certification of the ~~Vice President of Finance~~principal accounting and financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**	Certification of the ~~Vice President of Finance~~principal accounting and financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS***	XBRL Instance Document

101.SCH***	XBRL Taxonomy Extension Schema Document

101.CAL***	XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF***	XBRL Taxonomy Extension Definition Linkbase Document

101.LAB***	XBRL Taxonomy Extension Label Linkbase Document

101.PRE***	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

** Submitted herewith.

*** XBRL (Extensible Business Reporting Language) information is furnished and not filed herewith, is not a part of a registration statement or Prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

27-23-

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BEL FUSE INC.
~~August 7, 2013~~May 12, 2014
By:	/s/ Daniel Bernstein
	Daniel Bernstein
	President and Chief Executive Officer

By:	/s/ Colin Dunn
	Colin Dunn
	Vice President of Finance and Secretary
	(Principal Financial Officer and Principal Accounting Officer)

28-24-

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EXHIBIT INDEX

Exhibit 2.1* - Stock purchase agreement by and among Bel Fuse Inc., Power-One, Inc. and PWO Holdings B.V. dated as of April 25, 2014.

Exhibit 31.1* - Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2* - Certification of the ~~Vice President of Finance~~principal accounting and financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1** - Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2** - Certification of the ~~Vice President of Finance~~principal accounting and financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 101.INS*** – XBRL Instance Document

Exhibit 101.SCH*** – XBRL Taxonomy Extension Schema Document

Exhibit 101.CAL*** – XBRL Taxonomy Extension Calculation Linkbase Document

Exhibit 101.DEF*** – XBRL Taxonomy Extension Definition Linkbase Document

Exhibit 101.LAB*** – XBRL Taxonomy Extension Label Linkbase Document

Exhibit 101.PRE*** – XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

** Submitted herewith.

	Liability at		New		Cash Payments and			Liability at
	December 31, 2012		Charges		Other Settlements			June 30, 2013
Severance costs	$	122	$	1,239	$	(170	)	$	1,191
Transportation of equipment		-		100		(100	)		-
Other restructuring charges		-		48		(48	)		-
Total	$	122	$	1,387	$	(318	)	$	1,191

	Increase from			Increase (Decrease) from
	Prior Period			Prior Period
	Three Months Ended			Six Months Ended
	June 30, 2013			June 30, 2013
	Compared with			Compared with
	Three Months Ended			Six Months Ended
	June 30, 2012			June 30, 2012

Net sales		28.4	%		13.1	%
Cost of sales		27.8			13.5
SG&A expenses		26.8			22.3
Net earnings		68.4			(18.5)