The condensed consolidated balance sheet as of March 31, 2014,2015, and the condensed consolidated statements of operations, comprehensive (loss) income and cash flows for the periods presented herein have been prepared by Bel Fuse Inc. (the “Company” or “Bel”)the Company and are unaudited. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the consolidated financial position, results of operations and cash flows for all periods presented have been made.  The results for the three months ended March 31, 2014 should2015 are not be viewed asnecessarily indicative of the Company’s annual results or the Company’s results for any other period.  The informationto be expected for the full year.  These condensed consolidated balance sheet as of December 31, 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, 2013.2014.

On March 9, 2012, the CompanyJune 19, 2014, we completed itsour acquisition of 100% of the issued and outstanding capital stock of GigaCom Interconnect AB (“GigaCom”the Power-One Power Solutions business ("Power Solutions"). from ABB Ltd.  On July 31, 2012, the Company consummated its25, 2014, we completed our acquisition of 100% of the issued and outstanding capital stock of Fibreco Ltd. (“Fibreco”the U.S. and U.K. Connectivity Solutions businesses from Emerson Electric Co. ("Emerson").  On September 12, 2012, the CompanyAugust 29, 2014, we completed itsour acquisition of 100%the Connectivity Solutions business in China from Emerson (collectively with the U.S. and U.K. portion of the issued and outstanding capital stock of Powerbox Italia S.r.L (“Powerbox”transaction, "Connectivity Solutions").  The acquisitions of GigaCom, FibrecoPower Solutions and PowerboxConnectivity Solutions may hereafter be referred to collectively as either the “2012 Acquisitions”"2014 Acquisitions" or the “2012"2014 Acquired Companies”Companies".  Accordingly, asAs 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 forvalues and the three months ended March 31, 2013 has been restated to reflect immaterial measurement period adjustments related to the applicable 2012 Acquisitions.

The Company’sCompany's significant accounting policies are summarized in Note 1 of the Company’sCompany's Annual Report on Form 10-K for the year ended December 31, 2013.2014.  There were no significant changes to these accounting policies during the three months ended March 31, 2014.  Recent accounting pronouncements2015.

In April 2014, the FASB issued guidance for the reporting of discontinued operations, which also contains new disclosure requirements for both discontinued operations and other disposals that do not meet the definition of a discontinued operation. This guidance was adopted duringby the first three monthsCompany effective January 1, 2015. The effects of 2014 are as follows:this guidance will depend on future disposals by the Company.

ASU No. 2013-11 providesIn April 2015, the FASB issued guidance on simplifying the balance sheet presentation of debt issuance costs. The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. The update is effective for fiscal years beginning after December 15, 2015. Early application is permitted. Management does not believe that the adoption of this guidance will have any material impact on the Company's condensed consolidated financial position or results of operations.

In January 2015, the FASB issued guidance on simplifying the income statement presentation by eliminating the concept 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 ASUextraordinary items.  Extraordinary items are events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence.  Eliminating the extraordinary classification simplifies income statement presentation by altogether removing the concept of extraordinary items from consideration.  This amendment 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 was effective for interim and annual periods beginning after December 15, 2013.2015.  The adoption of this ASU didstandard is not expected to have a material impact on the Company’sour condensed consolidated financial position or results of operations, financial condition or cash flows.operations.

In June 2014, the FASB issued guidance on stock compensation.  The Company utilizesamendment requires that a performance target that affects vesting and that could be achieved after the two-class methodrequisite service period be treated as a performance condition.  A reporting entity should apply existing guidance in Topic 718 as it relates to report its earnings (loss) per share.  The two-class method is an earnings (loss) allocation formulaawards with performance conditions that determines earnings (loss) per shareaffect vesting to account for each class of common stock according to dividends declared and participation rights in undistributed 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, resultingsuch awards.  Compensation cost should be recognized in the two-class method of computing earnings (loss) per share.  In computing earnings (loss) per share,period in which it becomes probable that the Company has allocated dividends declared to Class Aperformance target will be achieved and Class B based on amounts actually declared for each class of stock and 5% more ofshould represent the undistributed earnings (loss) have been allocated to Class B shares thancompensation cost attributable to the Class A sharesperiod(s) for which the requisite service has already been rendered.  The amendment is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2015.  Earlier adoption is permitted.  Management does not believe that the adoption of this guidance will have any material impact on a per share basis.  Basic earnings (loss) per common share are computed by dividing net earnings (loss) by the weighted-average numberCompany's condensed consolidated financial position or results 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 months ended March 31, 2014 or March 31, 2013 which would have had a dilutive effect on earnings per share.

On March 29, 2013,June 19, 2014, the Company completed its acquisition of TRPPower Solutions for $21.0$109.9 million, net of cash acquired.  The Company’s purchasePower Solutions is a leading provider of TRP consisted of the integrated connector module (“ICM”) family ofhigh-efficiency and high-density power conversion products including RJ45, 10/100 Gigabit, 10G, PoE/PoE+, MRJ21for server, storage and RJ.5, a line of modules for smart-gridnetworking equipment, industrial applications and discrete magnetics.power systems. In connection with its acquisition of Power Solutions, the Company acquired a 49% interest in a joint venture in the People's Republic of China ("PRC").  The Company provisionally assigned no value to this investment.  See Note 15, Related Party Transactions, for additional information.

On August 20, 2013,July 25, 2014, the Company completed its acquisition of Array,the U.S. and U.K. entities of Connectivity Solutions. On August 29, 2014, the China portion of the transaction closed.  The Company paid a manufacturertotal of $98.8 million for Connectivity Solutions, net of cash acquired and including a working capital adjustment.  Connectivity Solutions is a leading provider of high‑performance RF/Microwave and Harsh Environment Optical Connectors and Assemblies for military, aerospace, wireless communications, data communications, broadcast 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.industrial applications.

During the three months ended March 31, 2014 and 2013,2015, the Company incurred less than $0.1$0.4 million and $0.3 million, respectively, of acquisition-related costs associated with the 2013independent valuations of and separate independent audits of the 2014 Acquisitions.  These costs are included in selling, general and administrative expense inon the accompanying condensed consolidated statements of operations foroperations.

The table below depicts the Company's fair value estimates of assets acquired and liabilities assumed as of the respective acquisition dates.  There were no measurement period adjustments recorded during the three months ended March 31, 20142015.  The amounts noted in the table below are provisional since the valuations of property and 2013.

The results of operations of the 20132014 Acquired Companies have been included in the Company’sCompany's condensed consolidated financial statements for the period subsequent to their respective acquisition dates.  During the three months ended March 31, 2014,2015, the 20132014 Acquired Companies contributed $17.9revenue of $58.8 million, and operating income of revenue and $1.3approximately $5.9 million, of net earnings to the Company’sCompany's condensed consolidated financial results.  There was no operating activity related to either of the 20132014 Acquisitions during the three months ended March 31, 2013.2014.

The following unaudited pro forma information below presents a summary of the combined operating results of operations of the Company and the aggregate results of Power Solutions and Connectivity Solutions for the periods presented as if the 2014 Acquisitions had occurred on January 1, 2013, Acquired Companies.along with certain pro forma adjustments.  The unaudited pro forma results are presented for illustrative purposes only.  They doonly and are not reflect the realization of any potential cost savings, or any related integration costs. Certain cost savings may result from the 2013 Acquisitions; however, there can be no assurance that these cost savings will be achieved. These pro forma results do not purport to benecessarily indicative of the results that would have actually been obtained if the 2013 Acquisitionsacquisitions had occurred as ofon January 1, 2012,2013, nor is the pro forma data intended to be a projection of results that may be obtained in the future.future:

On January 23, 2015, the Company completed the sale of the Network Power Systems ("NPS") product line and related transactions of the acquired Power Solutions business to Unipower LLC ("Unipower") for $9.0 million in cash. The following unaudited pro formasale also included $1.0 million of escrow pending Unipower's realization of certain sales targets. The net proceeds of $9 million from the sale were used to repay outstanding borrowings in accordance with the provisions of the Credit and Security Agreement (see Note 8, Debt).  The transaction provides that Bel will move processes and people to Unipower under an interim transition services agreement and Bel will also continue to manufacture the NPS products for up to 24 months under a manufacturing services agreement.

As a result of the sale and related transactions, the Company recorded deferred revenue of $9.0 million and recognized net sales of $0.9 million in the condensed consolidated resultsstatement of operations assume thatfor the acquisitionsthree months ended March 31, 2015.  The Company will recognize the $1 million currently in escrow when and if Unipower realizes certain sales targets and such amount would be included in interest income and other, net on the condensed consolidated statements of the 2013 Acquired Companies were completed as of January 1, 2012.  The 2013 unaudited pro forma net earnings were adjusted to exclude $0.3 million of acquisition-related costs ($0.3 million after tax) incurred during the first quarter of 2013 (dollars in thousands except per share data):

FairFair 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:

As of March 31, 20142015 and December 31, 2013,2014, 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’sCompany's investments in a rabbi trust which are intended to fund the Company’sCompany's Supplemental Executive Retirement Plan (“SERP”("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 March 31, 20142015 and December 31, 2013.2014.  The gross unrealized gains associated with the investmentsinvestment securities held in the rabbi trust were $0.5$0.8 million and $0.4$0.7 million at March 31, 20142015 and December 31, 2013,2014, respectively.  Such unrealized gains are included, net of tax, in accumulated other comprehensive income.loss.

As of March 31, 20142015 and December 31, 2013,2014, the Company had marketable securities with a combined fair value of less than $0.1 million at each date, and gross unrealized gains of less than $0.1 million at each date.  Such unrealized gains are included, net of tax, in accumulated other comprehensive income.  The fair value of the equity securities is determined based on quoted market prices in public markets and is categorized as Level 1.  As of March 31, 2015 and December 31, 2014, our available-for-sale securities, which primarily consist of investments held in a rabbi trust of $6.6 million and $6.5 million, respectively, are measured at fair value using quoted prices in active markets for identical assets (Level 1) inputs.  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 first quarter ofthree months ended March 31, 2015 or March 31, 2014.  There were no changes to the Company’sCompany's valuation techniques used to measure asset fair values on a recurring or nonrecurring basis during the first quarter of 2014.three months ended March 31, 2015.

The following table sets forth by level, within the fair value hierarchy, the Company’sThere were no financial assets accounted for at fair value on a recurringnonrecurring basis as of March 31, 2014 and2015 or December 31, 2013 (dollars in thousands).

The Company has other financial instruments, such as cash and cash equivalents, accounts receivable, notes receivable,restricted cash, accounts payable, accrued expenses and 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 fair value of the Company's long-term debt is estimated using a discounted cash flow method based on interest rates that are currently available for debt issuances with similar terms and maturities (Level 2 inputs).  At March 31, 2015, the estimated fair value of long-term debt was $223.8 million compared to a carrying amount of $220.9 million. The Company did not have any other financial liabilities within the scope of the fair value disclosure requirements as of March 31, 2014 or December 31, 2013.2015.

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 three months ended March 31, 2015 or 2014 that would warrant interim impairment testing.

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

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 20102011 and for state examinations before 2007.2008.   Regarding foreign subsidiaries, the Company is no longer subject to examination by tax authorities for years before 20082003 in Asia and generally 20062007 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’sCompany's condensed consolidated financial statements at March 31, 2014.  A total of $0.8 million2015.  An immaterial amount of previously recorded liabilities for uncertain tax positions relates principally to the 20102011 tax year.  The statute of limitations related to these liabilities is scheduled to expire on September 15, 2014.2015.

The Company’sCompany's liabilities for uncertain tax positions are included in the following balance sheet captions:

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 three months ended March 31, 20142015 and 2013,2014, the Company recognized $0.9 million and an immaterial amount, ofrespectively, in interest and penalties in the condensed consolidated statements of operations.  During the three months ended March 31, 2015, the Company recognized a benefit of an immaterial amount for the reversal of such interest and penalties.  The Company has approximately $0.2$2.5 million and $1.6 million, accrued for the payment of such interest and penalties at March 31, 20142015 and December 31, 2013, a portion of2014, respectively, which is included in each ofboth income taxes payable and liability for uncertain tax positions in the accompanying condensed consolidated balance sheets at each date.sheets.

Upon completion of the acquisitionacquisitions of TRP, TRP had aPower Solutions and Connectivity Solutions, there were net deferred tax asset in the amountassets of $2.2$7.1 million and $1.2 million, respectively, arising from various timingtemporary differences related to depreciation and accrued expenses.  Uponnet operating loss carry forward acquired, which are included in the acquisition of Array, Array had a deferred tax liability of $0.7 million arising from timing differences related to depreciation and a deferred tax asset of $2.1 million arising from the NOL acquired.condensed consolidated balance sheet at March 31, 2015.  In connection with the 20132014 Acquisitions, the Company was required to complete a 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 amount of $0.6$3.1 million and $1.0$16.4 million, respectively, for the TRPPower Solutions and ArrayConnectivity Solutions acquisitions. At March 31, 2014,2015, a net deferred tax assetliability of $1.9$7.5 million remains on the condensed consolidated balance sheet.sheet for the 2014 Acquisitions.  These amounts are preliminary since the measurement period for the 2014 Acquisitions is still open.  The amounts will be finalized prior to the conclusion of the measurement period, which will not exceed one year from the respective acquisition dates.  See Note 2 for further information about the 2014 Acquisitions.

The Company does not intendintends to make any electionelections to step up the tax basis of the 2013 Acquisitions to fair value under IRC Section 338(g) for the Power Solutions acquisitions and for certain jurisdictions with respect to the Connectivity Solutions acquisition.  The elections made under Section 338(g) only affect U.S. income taxes (not those of the foreign country where the acquired entities were incorporated).

On December 31, 2013, under the “American"American Taxpayer Relief Act” (“ATRA”Act" ("ATRA"), the Research and Experimentation credit (“("R&E”&E") expired.  The Company did not recognize any R&E credits during the three months ended March 31, 2014.  IfOn December 16, 2014, the R&E credit iswas extended back to January 1, 2014,2014. The R&E credits for the Company will recognize the R&E credit at that time.  The annual R&E credit is approximately $0.4 million.  During the first quarter of 2013, the Company recognized a $0.4 million R&E credit from 2012 as an increase in the March 31, 2013 quarterly benefit for income taxes.year ending 2015 have not been extended.

The Company maintains the Bel Fuse Inc. Employees’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.Internal Revenue Code of 1986, as amended (the "Code"). The Employees’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’sFor plan years beginning on and after January 1, 2012, the Company's matching contributions are made in cash and are equal to 100% of the first 1% of compensation contributed by participants, and 50% of the next 5% of compensation contributed by participants. Prior to January 1, 2012, the Company's matching and profit sharing contributions were made in the form of shares of Bel Fuse Inc. Class A and Class B common stock. The expense for the three months ended March 31, 20142015 and 20132014 amounted to approximately$0.3 million and $0.2 million, and $0.1 million, 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 March 31, 2014,2015, the plan owned 14,89913,940 and 186,030173,683 shares of Bel Fuse Inc. Class A and Class B common stock, respectively.

The Company also hasCompany's subsidiaries in Asia have a retirement fund in Asia which coverscovering substantially all of itstheir Hong Kong-basedKong 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 March 31, 20142015 and 20132014 amounted to approximately $0.1 million in each period.both periods. As of March 31, 2014,2015, 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.  As discussed in Note 4 above, the Company has investments in a rabbi trust which are intended to fund the obligations of the SERP.

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

The components of accumulated other comprehensive incomeloss at March 31, 20142015 and December 31, 20132014 are summarized below (dollars in thousands):