BELFA 10-K & 10-Q changes, risk factors and insider trading

We may encounternot unanticipatedrealize difficultiesthe followinganticipated strategic and revenue opportunities from our November 2024 acquisition of our 80%-owned Enercon subsidiary, including if we are unable to integrate the Enercon business successfully, or if we fail to realize the expected benefits and synergies of the acquisitionsubsidiary within the expected time period (if at all)., In addition,and our business may be disrupted if our intended acquisition of the remaining 20% stake in Enercon is not completed for any reason.

Pursuant to the transaction documents governing the Enercon acquisition, Belwe may acquire the remaining 20% stake in Enercon and haswe have the current intention to so purchase such remaining interest by early 2027 in accordance with the terms and subject to the conditions of the shareholders’ agreement, which was entered into at the November 14, 2024 closing on the initial 80% interest. The purchase of the remaining 20% interest in Enercon is subject to the put-call mechanism set forth in the shareholders’ agreement and the other terms and conditions thereof. There can be no assurances that we will complete the acquisition of the remaining 20% interest in Enercon by early 2027 as intended, or at all. Any failure to complete our intended acquisition of the remaining 20% interest may disrupt our plans, operations, and relationships with customers, suppliers, distributors, business partners and regulators, can cause potential difficulties in employee retention, and can have a material adverse effect on our business and results of operations.

Additionally, our access to parts or materials, and our ability to contract with suppliers utilized previously, may be limited or prohibited from time to time by trade restrictions or other legal or regulatory enactments. We anticipate continued downward pressure on our Power sales given trade restrictions on one of our former suppliers previously utilized for this segment, which had historically supported approximately $3 to $4 million per quarter of our sales into the consumer end market. We are currently evaluating alternative manufacturing options for the components previously supplied by this manufacturer. To the extent our suppliers in the PRC or other countries are negatively impacted by new or amended regulations, any such negative implications could adversely impact our supply chain, including in the form of increased costs, disruptions, shortages or unavailability of product or component parts, and/or other deleterious consequences, which could materially adversely affect our business and operating results.

Because certain of Enercon’s products are used in a variety of land, air and sea defense applications, Enercon derives a substantial portion of its revenue from the defense industry. For full fiscal year 2024,2025, approximately 93% of Enercon’s revenue was derived from customers in the defense industry. Although many of the programs under which Enercon sells products to prime U.S. and Israeli government contractors extend several years, they are subject to annual funding through governmental appropriations. While spending authorizations for defense-related programs by the U.S. and Israeli governments have increased in recent years, these spending levels may not be sustainable and could significantly decline. Future levels of expenditures, authorizations, and appropriations for programs Enercon supports may decrease or shift to programs in areas where Enercon does not currently provideoffer services.products or solutions. Changes in spending authorizations, appropriations, and budgetary priorities could also occur due to a shift in the number, and intensity, of potential and ongoing conflicts, shifts in spending priorities from national defense as a result of competing demands for government funds, or other factors. Enercon’s business prospects, financial condition or operating results (and as a consequence, those of Bel on a consolidated basis), could be materially harmed among other causes by the following: (1) budgetary constraints affecting U.S. and/or Israeli government spending generally, or specific departments or agencies in particular, and changes in available funding; (2) changes in government programs or requirements; and (3) a prolonged government shutdown and other potential delays in the appropriations process.

Following our November 2024 acquisition of Enercon, we may be subject to, and possibly adversely affected by, risks related to conducting business in Israel. Enercon, in which we acquired an 80% stake at thein November 2024 closing and intend to acquire the remaining 20% interest by early 2027, is based in Netanya, Israel with additional facilities in New Hampshire, U.S. and Haryana, India. Enercon has approximately 300321 employees located in Israel.

Companies based in or operating in, or having a significant number of employees located in Israel, may be more susceptible to political and economic instability. Political, economic and military conditions in Israel may directly affect their business. Since the establishment of the State of Israel in 1948, a number of armed conflicts have occurred between Israel and its neighbors. In October 2023, Hamas conducted several terrorist attacks in Israel resulting in ongoing war across the country, forcing the closure of many businesses in Israel for several days. In addition, there continues to be hostilities between Israel and Hezbollah in Lebanon and Hamas in the Gaza Strip, both of which resulted in rockets being fired into Israel, causing casualties and disruption of economic activities. In early 2023, there were a number of changes proposed to the political system in Israel by the current government which, if implemented as planned,planned or in similar form, could lead to large-scale protests and additional uncertainty, negatively impacting the operating environment in Israel. In addition, Iran has threatened to attack Israel and may be developing nuclear weapons. Further, on April 13, 2024 and October 1, 2024, Iran launched a series of drone and missile strikes against Israel, to which Israel responded, and in June 2025, additional conflict included Israeli strikes on Iranian military and nuclear facilities, and Iranian missile and drone strikes against Israel. Uprisings in various countries in the Middle East over the last few years have also affected the political stability of those countries and have led to a decline in the regional security situation. Such instability may also lead to deterioration in the political and trade relationships that exist between Israel and these countries. Ongoing military activity in the Middle East may result in disruption to our operations and facilities, such as Enercon’s manufacturing and R&D facilities located in Israel. Any military activity, armed conflicts, terrorist activities or political instability involving Israel or other countries in the region, as well as any interruption or curtailment of trade between Israel and its present trading partners, could adversely affect the business, results of operations, financial condition, cash flows and prospects of Enercon, and thus of consolidated Bel. In addition, any of these events or circumstances involving Israel or the region prior to the completion of our intended acquisition of the remaining 20% stake in Enercon may delay or prevent the completion of our purchase of the remaining 20% interest.

During the year ended December 31, 2024,2025, there were no direct customers or ultimate end customers whose sales exceeded 10% of our 20242025 consolidated net sales. While there were no customers who exceeded 10% of our net sales in 2024,2025, we have experienced significant concentrations of customers in prior years (see Note 14, "Segments").years. Furthermore, factors that negatively impact the businesses of our major customers could materially and adversely affect us even if the customer represents less than 10% of our 20242025 consolidated net sales.

Over the past three years, the Company has undertaken a series of facility consolidations around the world, including as further described in "Overview -– Key Factors Affecting our Business – Restructuring" in Item 7 of this Annual Report and in Note 12, "Accrued Expenses - Restructuring Activities" in Item 7 of this Annual Report. We make certain assumptions in estimating the anticipated savings we expect to achieve related to these initiatives, which include the estimated savings from the elimination of certain headcount and the consolidation of facilities. These assumptions may turn out to be incorrect due to a variety of factors. In addition, our ability to realize the expected benefits from these programs is subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. If we are unsuccessful in implementing these or any similar future programs or if we do not achieve our expected results, our results of operations and cash flows could be adversely affected or our business operations could be disrupted.

A significant portion of our electronic components, sub-assemblies, and finished products are manufactured in or sourced from the PRC and Mexico. We currently estimate that approximately 12-13% of our sales relate to product shipped from the PRC into the U.S., with an additional approximately 4% of our sales relating to product shipped from Mexico into the U.S. Additionally, as a global organization our business involves a material volume of shipments into and out of the U.S. to and from a number of other countries, including IndiaIndia, Israel and throughout Europe. The ongoingevolving regulatory landscape including the implementation and modification of tariffs, trade restrictions, and changes in trade agreements involving the aforementioned countries,countries among others, together with general uncertainty about future changes in policy (including any new regulations, increased tariff rates, new tariffs or trade restrictions that may be implemented), could substantially increase our operating costs, reduce demand for our products and disrupt our supply chain. On February 20, 2026, the Supreme Court of the United States issued its decision in Learning Resources, Inc. v. Trump, striking down tariffs previously enacted by the Administration under the International Emergency Economic Powers Act (“IEEPA”) as invalid, and holding that IEEPA does not authorize the President to impose tariffs. However, the full impact and implications of the Court’s decision are not immediately clear amidst the rapidly-evolving regulatory landscape and the arena of international trade, and there remains great uncertainty as to what responses will emerge in light of the Court’s decision, including with respect to tariffs, international trade agreements, and international trade generally. For example, following and notwithstanding the Court’s ruling, the U.S. Congress could act in its discretion to codify tariffs, including ones similar to, more extensive and/or at higher rates than the duties invalidated by the Court’s decision; the Administration could act to impose duties or alternative tariffs under laws other than the IEEPA statute addressed in the Court’s decision; the state of bilateral and multilateral trade agreements is and may continue to be uncertain; foreign countries may yet impose tariffs (including retaliatory tariffs) or increase duty rates, among other uncertainties. At this time, following the tariffs enacted by the Administration and the subsequent Supreme Court ruling, it remains unclear what further measures will be implemented in response or if additional countries may impose retaliatory tariffs. Any new or continued trade disputes or increased tensions between the U.S. and other countries, and any governmental actions, including further increases of existing tariffs or the imposition of new tariffs, may further exacerbate any increases to our operating costs, decreases in demand for our products, and disruptions to our supply chain. While we continue to actively monitor the evolving and ever-changing regulatory landscape and to implement strategies intended to mitigate these impacts, including diversifying our manufacturing footprint and seeking alternative suppliers, these efforts may not be fully successful and could result in increased costs, delayed shipments, and reduced margins.

Specifically regarding the PRC, recent actions by the U.S. government to impose and potentially expand tariffs on Chinese-origin goods, particularly in the electronics and semiconductor sectors, have increased our production and procurement costs. These tariffs,or any similar tariffs or duties, combined with potential retaliatory measures by Chinese authorities, could further increase the cost of our products and components or limit our ability to source critical materials and parts. Additionally, ongoing geopolitical tensions and potential expansion of export controls or restrictions on technology transfers could further complicate our supply chain operations and impact our ability to maintain competitive pricing.

With respect to our Mexican manufacturing operations and sourcing activities, changes in trade policies, including potential modifications to or withdrawal from existing trade agreements, could result in increased tariffs and other trade barriers. The United States-Mexico-Canada Agreement (USMCA) is scheduled for a comprehensive review and potential renewal in 2026, and if it is extended on less favorable terms, Bel could face increased risks related to supply chain disruptions, higher tariffs, and reduced market access throughout North America. The renegotiation process will address key structural changes, trade imbalances, and heightened geopolitical competition, potentially resulting in revised rules of origin, labor obligations, and domestic policy requirements that may adversely impact Bel’s operations and cost structure. Such changes could necessitate significant modifications to our regional manufacturing strategy and supply chain organization, potentially resulting in supply chain disruptions and inventory management challenges leading to higher input costs, increased manufacturing costs and a potential loss of customers. If the agreement expires or undergoes significant revision, Bel may need to rapidly adapt to new trade regulations and market conditions, which could have a material adverse effect on our business, financial condition, and results of operations.

ManyWhile most of theBel’s orders are non-cancellable and non-returnable, and are subject to penalty if cancelled, Bel has historically worked with large customers to provide for cancellation if no costs have yet been incurred by Bel. Nonetheless, some orders that comprise our backlog may be delayed, acceleratedaccelerated, or canceled by customers without penalty.customers. Customers may on occasionoccasionally double order from multiple sources to ensure timely delivery when lead times are particularly long.long, Customersand often cancel orders when business is weak andor inventories are excessive. Additional factors that could cause the CompanyBel to fail to ship orders comprising our backlog include unanticipated supply difficulties, changes in customer demanddemand, and new customer designs. Due to the foregoingthese factors, we cannot be certain that the amount of our backlog equals or exceeds the level of orders that will ultimately be delivered, and backlog may not be a reliable indicator of the timing of future sales. Our results of operations could be adversely impacted if customers cancel a material portion of orders in our backlog.backlog, even with our policies in place.

We have incurred substantial amounts of indebtedness including to fund the acquisition of Enercon in 2024, and we may need to incur additional indebtedness to finance operations or for other general corporate purposes. Our consolidated principal amount of outstanding indebtedness was $287.5$197.5 million at December 31, 2024,2025, resulting in a Leverage Ratio of 2.1x1.4x Consolidated EBITDA, each as defined and calculated in accordance with our creditCredit agreement.Agreement. Accordingly, our U.S. debt service requirements are significant in relation to our U.S. revenue and cash flow. This leverage exposes us to risk in the event of downturns in our business, in our industry or in the economy generally, and may impair our operating flexibility and our ability to compete effectively. Our current creditCredit agreementAgreement requires us to maintain certain covenant ratios. For example, the applicable creditCredit agreementAgreement covenant pertaining to the Leverage Ratio referenced above provides, subject to certain exceptions, that our Leverage Ratio must not exceed 3.50 to 1.00. Additionally, the interest rate that we pay under our creditCredit agreementAgreement increases as our Leverage Ratio increases. If we do not continue to satisfy the required ratios including the Leverage Ratio or receive waivers from our lenders, we will be in default under the creditCredit agreement,Agreement, which could result in an accelerated maturity of our debt obligations. We cannot assure investors that we will be able to access private or public debt or equity on satisfactory terms, or at all. Any equity financing that could be arranged may dilute existing shareholders and any debt financing that could be arranged may result in the imposition of more stringent financial and operating covenants.

From time to time, we receive claims by third parties asserting that our products violate their intellectual property rights. Any intellectual property claims, with or without merit, could be time consuming and expensive to litigate or settle and could divert management attention from administering our business. A third partythird-party asserting infringement claims against us or our customers with respect to our current or future products may materially and adversely affect us by, for example, causing us to enter into costly royalty arrangements or forcing us to incur settlement or litigation costs.

Our manufacturing operations, products and/or product packaging are subject to environmental laws and regulations governing air emissions; wastewater discharges; the handling, disposal and remediation of hazardous substances, wastes and certain chemicals used or generated in our manufacturing processes; employee health and safety labeling or other notifications with respect to the content or other aspects of our processes, products or packaging; restrictions on the use of certain materials in or on design aspects of our products or product packaging; and,and responsibility for disposal of products or product packaging. Discussions and proposals related to gas emissions and climate change have increasingly become the subject of substantial attention; additional regulation in this area could have the effect of restricting our business operations or increasing our operating costs. More stringent environmental regulations may be enacted in the future, and we cannot presently determine the modifications, if any, in our operations that any such future regulations might require, or the cost of compliance with these regulations.

Regulatory frameworks continue to evolve rapidly across our key markets. The European Union's enhanced environmental reporting framework introduces comprehensive sustainability disclosure requirements affecting both domestic and international operators. In the United States, recent federal initiatives havesought establishedto establish new environmental disclosure standards for public companies, though implementation timelines remainwere subjectstayed toby ongoing legal review.review and in March 2025, the SEC announced that it had voted to end its defense of the challenged rules regarding enhancement and standardization of climate-related disclosures. However, the withdrawal of the SEC’s defense does mean these or similar SEC disclosures will not become mandatory in the future, including in the event the SEC’s priorities should change, and climate-related disclosures are still rapidly proliferating at the U.S. state level and internationally. We arecontinue to actively developingmonitor the rapidly evolving regulatory landscape to be prepared to develop compliance frameworks for theseapplicable requirements, any of which if implemented may require substantial operational adjustments and additional incremental resources.

Many governments, regulators, investors, employees, customers and other stakeholders are increasinglyhave focused in recent years on environmental, social and governance (“ESG”) considerations relating to businesses. At the same time, there are efforts by some stakeholders and policymakers to reduce companies’ attention to certain ESG-related matters. Advocates and opponents of ESG matters arehave increasinglyfrom resortingtime to time resorted to a range of activism to promote their viewpoints, which may require us to incur additional costs or otherwise adversely impact our business. Some stakeholders may disagree with our goals and initiatives and the focus of stakeholders may change and evolve over time. Stakeholders also may have very different views on where ESG focus should be placed, including differing views of regulators in various jurisdictions in which we operate. Any failure, or perceived failure, by us to achieve any goals that we may set, further our initiatives, adhere to our public statements, comply with federal, state or international ESG laws and regulations, or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against us and materially adversely affect our business, reputation, results of operations, financial condition and stock price.

As a multi-national company, we are faced with increased complexities due to recent changes to the U.S. corporate tax code relating to our unremitted foreign earnings, potential revisions to international tax law treaties, and renegotiated trade deals. In addition, other events, such as the ongoing discussion and negotiations concerning varying levels of tariffs on product imported from the PRC, Mexico, IndiaIndia, Israel and throughout Europe also create a level of uncertainty. If we are unable to anticipate and effectively manage these and other risks, it could have a material and adverse effect on our business, our consolidated results of operations and consolidated financial condition.

We have little visibility into the ordering habits of our customers and we can be subjected to large and unpredictable variations in demand for our products. Accordingly, we must continually recruit and train new workers to replace those lost to attrition and be able 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 any increase in demand, can add volatility to the labor costs incurred by us.

Sales of our Power Solutions and Protection products were lower by $68.6 million (21.8%) in 2024 as compared to 2023. This decrease was primarily due to lower sales of our front-end power products and board mount power products of $45.3 million and $9.5 million, respectively, both of which are used in networking and datacenter applications. Sales of our CUI products were down by $21.2 million in 2024 as compared to 2023 due to the loss of sales in connection with a trade restriction placed on one of our suppliers in the PRC. Further, sales of product into the eMobility end market decreased by $12.9 million as compared to 2023. These decreases were offset in part by an increase in sales of our rail products by $11.8 million as compared to 2023. Raw material expedite fee revenue for this segment totaled $0.1 million in 2024 as compared to $14.9 million in 2023. Enercon contributed $20.8 million of military, aerospace and defense applications sales in the last two months of 2024. Gross margin improved in 2024 as compared to 2023 as a result of the Enercon acquisition, favorable exchange rates with the Chinese renminbi versus the U.S. dollar, a lower volume of low-margin expedite fees and a favorable shift in product mix.

Sales of our Magnetic Solutions products declined by $46.3 million (40.2%) during 2024 as compared to 2023. Reduced demand for our ICM products from our networking customers and through our distribution channels was the primary driver as we believe these customers continue to work through inventory on hand. Recent facility consolidations in the PRC, diligent cost management, product mix and a favorable exchange rate with the Chinese renminbi versus the U.S. dollar, were the primary drivers of gross margin expansion for this product group in 2024 as compared with 2023, despite the decline in revenue.

TheOther otherexpenses, expenses noted in the table above includeincluding fixed cost itemscosts such as support labor and fringe,benefits, depreciation and amortization, and facility costs (i.e. rent, utilities, insurance)., Inremained total,relatively thesestable otherfrom a dollar amount perspective, aside from the inclusion of Enercon’s overhead expenses within cost of sales have decreased by $1.5 million in 20242025. However, as compared to 2023. As a percentage of sales, otherthese expenses increased due to the lower sales volumedecreased in 2024 as2025 compared to 2023.2024, benefiting from higher sales volumes during the year.

Material costs as a percentage of sales during 20232024 camewere downlower compared to 2022,2023, as pricing actions helpeddue to offseta shift in product mix, the continued heightened coststabilization of certain raw materials.material pricing, shorter lead times, and better procurement efforts. Labor costs in 20232024 as a percentage of sales decreasedincreased significantlycompared fromto 20222023 due to lower sales volume, a variety of factors, including the shift in product mix resultingin 2024 compared to the previous year, and the increase in astatutory lowerminimum consolidatedwage percentagerate ofin salesMexico. fromThis ofincrease ourin labor-intensivelabor Magneticcost products,was partially offset by lower labor costs in the PRC due to the favorable fluctuation in the Chinese renminbi exchange rate versus the U.S. dollar, and the restructuring and efficiency programs implemented throughout 2023 in our Connectivity Solutions segment. The reduction in labor costs were partially offset by the unfavorable fluctuation of the Mexican Peso exchange rate versus the U.S. dollar in 2023 versus 2022.dollar.

The other expenses noted in the table above include fixed cost items such as support labor and fringe, depreciation and amortization, and facility costs (i.e. rent, utilities, insurance). In total, these other expenses werewithin largelycost theof samesales decreased by $1.5 million in 20232024 as compared to 20222023. As a percentage of sales, other expenses increased due to the lower sales volume in 2024 as thecompared benefits realized on cost savings initiatives were offset by higher costs from the redundant operations in the PRC that were in place while our facility consolidation project was underway for much ofto 2023.

R&D expenses were $23.6$30.9 million, $22.5$23.6 million and $20.2$22.5 million for the years ended December 31, 2024,2025, 2024 and 2023, respectively. The increase in R&D expenses in 2025 compared to 2024 was primarily due to the inclusion of a full year of Enercon-related salaries, benefits, product development costs, and 2022,other respectively.R&D expenses, whereas 2024 reflected only two months of Enercon’s R&D activity following its November 2024 acquisition. The increase noted in R&D expenses during 2024 compared to 2023 is largely due to higher salaries, benefits, and product development costs and R&D expense ofresulting from the November 2024 Enercon acquisition, which have been included in Bel's results since its acquisition date. The increase noted in R&D expenses during 2023 compared to 2022 is largely due to higher salaries, benefits, and product development costs.

The Company recorded $3.5 million of restructuring charges in 2024 largely in connection with the Glen Rock initiative and the Fuse initiative, as further described in "Overview - Key Factors Affecting our Business - Restructuring" above.initiative. In 2023, the Company recorded $10.1 million of restructuring charges largely in connection with theits four facility consolidation projects in the U.S., UKthe United Kingdom and PRC. In 2022, the Company recorded $7.3 million of restructuring charges related to these same four facility consolidation projects in the U.S., UK and PRC.

The Company incurred interest expense of $4.1 million in 2024 and $2.9 million in 2023 primarily due to its outstanding borrowings under the Company's creditCredit agreement.Agreement. The increase in interest expense during 2024 related to aan increase in debt balance in the fourth quarter of 2024 due to Enercon acquisition (see Note 3, “Acquisition and Divestiture” for additional details). See "Liquidity and Capital Resources" and Note 11, "Debt" for further information on the Company's outstanding debt.

Other Expense,Income (Expense), Net

Other expense,income (expense), net was a net expense of $3.2 million in 2024 compared to a net expense of $4.5 million in 2023. The net expense in 2024 was comprised of a foreign exchange loss of $1.9 million, $0.6 million of losses associated with Bel's investment in innolectric and $2.0 million of stamp duty fees related to Enercon; partially offset by a gain of $1.3 million related to the Company's SERP investments. The net expense in 2023 was comprised of a foreign exchange loss of $1.4 million, the loss on liquidation of a foreign subsidiary of $2.7 million, $0.8 million of losses associated with Bel's investment in innolectric and $0.8 million of other expense; partially offset by a gain of $1.2 million related to the Company's SERP investments.

During the past twothree years, we do not believe the effect of inflation was material to our consolidated financial position or our consolidated results of operations. We are exposed to market risk from changes in foreign currency exchange rates. Fluctuations of the U.S. dollar against other major currencies have not significantly affected our foreign operations as most sales continue to be denominated in U.S. dollars or currencies directly or indirectly linked to the U.S. dollar. Most significant expenses, including raw materials, labor and manufacturing expenses, are incurred primarily in U.S. dollars, Mexican pesos, the Chinese renminbi or the Israeli shekel, and to a lesser extent in British pounds, or Indian rupees. The Mexican pesospeso depreciated by 3%,5%, the Euro wasappreciated flat,by 4%, the British pound appreciated by 2%, and3%, the IndianIsraeli rupeeshekel appreciated by 6% and the Chinese renminbi eachremained depreciated by 2%flat versus the U.S. dollar in 20242025 compared to 2023.2024. To the extent the renminbi, peso or shekel appreciate in future periods, it could result in the Company's incurring higher costs for most expenses incurred in the PRC, Mexico and Israel. The Company periodically uses foreign currency forward contracts to manage its short-term exposures to fluctuations in operational cash flows resulting from changes in foreign currency exchange rates as further described in Note 13, "Derivative Instruments and Hedging Activities". The Company's European entities, whose functional currencies are Euros and British pounds, enter into transactions which include sales that are denominated principally in Euros, British pounds and various other European currencies, and purchases that are denominated principally in U.S. dollars and British pounds. Such transactions, as well as those related to our multi-currency intercompany payable and receivable transactions, resulted in a net realized and unrealized currency exchangelossexchange gain of $10.1 million in 2025, a loss of $1.9 million in 2024,2024 and a loss of $1.4 million in 2023 and a gain of $0.3 million in 2022 which were included in other expense,income (expense), net on the consolidated statements of operations. Translation of subsidiaries' foreign currency financial statements into U.S. dollars resulted in translation adjustments, net of taxes, of ($5.5)$2.5 million and $6.7($5.5) million for the years ended December 31, 20242025 and 2023,2024, respectively, which are included in accumulated other comprehensive loss on the consolidated balance sheets.

Our principal sources of liquidity include $68.3$57.8 million of cash and cash equivalents at December 31, 2024, $1.0 million of held to maturity investments in U.S. Treasury securities,2025, cash provided by operating activities and borrowings available under our credit facility. We expect to use this liquidity for operating expenses, investments in working capital, capital expenditures, interest, taxes, lease and purchase obligations, pension benefit obligations, dividends, purchases of common stock under our Repurchase Program, and dividends, debt obligations and other long-term liabilities. Our liquidity may also be utilized to fund potential acquisitions in future periods, as well as potential future cash requirements related to the Enercon acquisition, including potential Earnout Payments that may become due and the put-call options under the Enercon shareholders’ agreement, pursuant to which Bel has the current intention to purchase the remaining 20% interest by early 2027. We believe that our current liquidity position and future cash flows from operations will enable us to fund our operations, both in the next twelve months and in the longer term.

Cash and cash equivalents, held to maturity U.S. Treasury securities and accounts receivable comprised approximately 19.2% and 19.0% and36.9% of the Company's total assets at December 31, 20242025 and December 31, 2023,2024, respectively. The Company's current ratio (i.e., the ratio of current assets to current liabilities) was 2.93.0 to 1 and 3.42.9 to 1 at December 31, 20242025 and December 31, 2023,2024, respectively. At December 31, 20242025 and 2023,2024, $48.4$43.4 million and $40.9$48.4 million, respectively (or 71%75% and 46%,71%, respectively), of cash and cash equivalents was held by foreign subsidiaries of the Company. During 2024,2025, the Company repatriated $48$26.0 million of funds from outside of the U.S., with minimal incremental tax liability. We continue to analyze our global working capital and cash requirements and the potential tax liabilities attributable to further repatriation, and we have yet to make any further determination regarding repatriation of funds from outside the U.S. to fund the Company's U.S. operations in the future. In the event these funds were needed for Bel's U.S. operations, the Company would be required to accrue and pay U.S. state taxes and any applicable foreign withholding taxes to repatriate these funds.

The Company expects foreseeable liquidity and capital resource requirements to be met through its existing cash and cash equivalents, held to maturity investments in U.S. Treasury securities and anticipated cash flows from operations, as well as borrowings available under its revolving credit facility, if needed. The Company's material cash requirements arising in the normal course of business primarily include:

Debt Obligations and Interest Payments - The Company had $287.5$197.5 million outstanding under its revolving credit facility at December 31, 2024,2025, as further described below and in Note 11, "Debt". There arewere no mandatory principal payments due on the credit facility borrowings during 2025. The current balance of $287.5$197.5 million is due upon expiration of the credit facility on September 1, 2026.2028. Anticipated interest payments due amount to $28.7$26.8 million, of which $17.2$10.0 million is expected to be paid in 20252026 based on our debt balance and interest rate in place at December 31, 2024.2025.

Purchase Obligations - 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 an order is cancelled. The Company had outstanding purchase orders related to raw materials in the amount of $82.2$81.5 million at December 31, 2024,2025, of which $75.1$79.5 million is expected to be paid in 2025.2026. The Company also had outstanding purchase orders related to capital expenditures which totaled $4.7$2.0 million at December 31, 2024, all2025, of which $1.4 million is expected to be paid in 2025.2026.

Dividends - The Company has historically paid quarterly dividends on its two classes of common stock, which amounted to $3.5 million in 2024each asof compared2025 toand $3.5 million in 2023.2024. Consistent with the dividend rates declared in prior years, Bel's Board of Directors declared dividends on NovemberOctober 1,31, 20242025 and again on February 12,17, 20252026 on each of our two classes of common stock. These two quarterly paymentspayments, willthe befirst made in January 2026 and the second scheduled for later in the first half of 20252026, incomprise thea total anticipated amount of $1.7 million.

Share Repurchase Program - In February 2024, Bel's Board of Directors authorized the repurchase of up to $25 million of the Company's common stock. The Repurchase Program does not obligate the Company to repurchase any dollar amount or number of shares, and the Repurchase Program may be suspended or terminated at any time. The timing and actual number of shares repurchased will depend on a variety of factors including price, market conditions, corporate and regulatory requirements and the consideration of other uses of cash including other investment opportunities. At December 31, 2024,2025, the Company had an aggregate amount of $9.0 million of authorized repurchases under the planprogram that had not yet been executed upon.

Tax Payments - At December 31, 2024,2025, we had liabilities for unrecognized tax benefits and related interest and penalties of $18.1$17.5 million, all of which is included in other liabilities on our consolidated balance sheet. At December 31, 2024,2025, we cannot reasonably estimate the future period or periods of cash settlement of these liabilities. See Note 10, "Income Taxes", for further discussion. Also included on our consolidated balance sheet at December 31, 2024 is $2.0 million of liabilities for transition tax associated with the 2017 U.S. tax reform, all of which is expected to be paid in 2025.

In addition to its cash requirements arising in the normal course of business described above, the Company has potential future cash requirements related to its acquisition of Enercon, whereby the Company has recorded earnout liabilities having a fair value as of December 31, 20242025 in the amount of $3.5$6.6 million that would be paid overin 2025early 2026 and 2026early 2027 in the event certain financial thresholds are achieved by the acquired business based on the Purchase Agreement provision which provides for potential earnout payments of up to $5$5.0 million for each of the fiscal 2025 and fiscal 2026 earnout periods subject to the achievement of the financial thresholds. Further, there are put-call options associated with the redeemable noncontrolling interest in early 2027. As described elsewhere in this Annual Report, we have the current intention to purchase the remaining 20% interest in Enercon by early 2027 in accordance with the terms and subject to the conditions of the shareholders' agreement. At December 31, 2024,2025, the redemption value related to the redeemable noncontrolling interest was $80.6$93.2 million. See Note 3, "Acquisition and Divestiture" and Note 6, "Fair Value Measurements" for further information.

At December 31, 2024,2025, the Company was also a party to two pay-fixed, receive-variable interest rate swap agreements coveringin the fullaggregate amount of its$60 then variable interest exposuremillion through August 2026. See Note 13, "Derivative Instruments and Hedging Activities" for further details.

Inventories consist of raw materials and purchased components and are stated at the lower of cost and net realizable value. Material costs are principally determined by standard cost or the weighted moving average method, both of which approximate actual cost. The Company reduces the carrying value of its inventory for estimated obsolescence or unmarketable inventory by an amount equal to the difference between the cost of inventory and the estimated market value based on the aforementioned assumptions. Our reserve calculations are based on historical experience related to slow-moving inventory in addition to specific known concerns in the case of products going end-of-life or customer cancellations. As of December 31, 20242025 and 2023,2024, the Company had reserves for excess or obsolete inventory of $14.5$18.0 million and $13.7$14.5 million, respectively. With the recent acquisition of Enercon our value of inventory on hand has increased by $24.8 million from December 31, 2023 to December 31, 2024. In the event of a sudden decrease in demand for our products, or a higher incidence of inventory obsolescence, the Company could be required to increase its inventory reserve, which would have an unfavorable impact on our gross margin.

As indicated in Note 5, "Goodwill and Other Intangible Assets", the fair value of each of our four reporting units exceeded their respective carrying values by a very large margin (ranging from 44%56% to 500%540%). If market factors change and the discount rate utilized in the fair value calculation changes, it would result in a higher or lower fair value of our reporting units. The discount rates utilized in our October 1, 20242025 impairment test ranged from 10.0% to 14.5%.12.0%. An increase in the discount rate assumption of 50 basis points would have impacted the fair values of our reporting units, and would have reduced the excess of fair value over carrying value to a revised range of 38%51% to 478%.517%. Further, if we are unable to achieve the projected revenue growth rates or margins assumed in our projections, this would also impact the fair value of our reporting units. Effective with the October 1, 2024 testing date, we changed our reporting unit structure to align with how management is currently reviewing and managing the business. Based on the testing performed, no impairment existed either under the former reporting unit structure or under the new reporting unit structure. If we were to change our reporting unit structure again or if other events and circumstances change (such as a sustained decrease in the price of our common stock, a decline in current market multiples, a significant adverse change in legal factors or business climates, an adverse action or assessment by a regulator, heightened competition, strategic decisions made in response to economic or competitive conditions or a more-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or disposed of), we may be required to record impairment charges in future periods. Any impairment charges that we may take in the future could be material to our consolidated results of operations and consolidated financial condition.

The Company tests indefinite-lived intangible assets for impairment annually on October 1, or upon a triggering event, using a fair value approach, the relief-from-royalty method (a form of the income approach). The Company conducted its annual impairment tests as of October 1, 20242025 and in connection with its analysis, identifieddid andnot recordedidentify a $0.4 millionany impairment charge related to its CUI tradename. This charge is reflected in the accompanying statementas of operations during the year ended December 31, 2024. No impairment was identified at the Company's October 1, 2023 testingthat date. Management has also concluded that the fair value of its trademarks exceeds the associated carrying values at December 31, 20242025 and that no impairment existed as of that date. At December 31, 2024,2025, the Company's indefinite-lived intangible assets related solely to trademarks.

The Company believes that it has sufficient cash reserves to fund its foreseeable working capital needs. It may, however, seek to expand such resources through bank borrowings, at favorable lending rates, from time to time. If the Company were to undertake another substantial acquisition for cash, the acquisition would either be funded with cash on hand or would be financed through cash on hand and through bank borrowings or the issuance of public or private debt or equity. If the Company borrows additional money to finance acquisitions, this would further decrease the Company's ratio of earnings to fixed charges, and could further impact the Company's material restrictive covenants, depending on the size of the borrowing and the nature of the target company. Under its existing credit facility, the Company is required to obtain its lender's consent for certain additional debt financing and to comply with other covenants, including the application of specific financial ratios, which may limit the Company’s ability to pay cash dividends on its common stock and/or the amounts thereof, including to the extent that payment of any such dividend would cause noncompliance with any such financial ratio. Depending on the nature of the transaction, the Company cannot assure investors that the necessary acquisition financing would be available to it on acceptable terms, or at all, when required. If the Company issues a substantial amount of stock either as consideration in an acquisition or to finance an acquisition, such issuance may dilute existing stockholdersshareholders and may take the form of capital stock having preferences over its existing common stock.

In the threesix months ended MarchJune 31,30, 2026, 56%54% of our revenues were derived from Aerospace, Defense & Rugged Solutions and 44%46% from Industrial Technology & Data Solutions.

We believe that in addition to recent global tariffs and inflationary pressures on the costs of goods and services in general, as well as ongoing conflicts/political unrest including in or near the countries in which Bel operates, the key factors affecting and/or potentially affecting our results for the threesix months ended MarchJune 31,30, 2026 and/or future results include the following:

Our revenue and gross margin by operating segment for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows:

Net sales increased by $16.7$18.6 million, or 20.1%,20.3%, for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025. The increase was primarily driven by higher sales volumesvolumes, inled by defense applications,and whichrugged roseindustrial applications. Defense sales increased by $9.4$14.7 millionmillion, (18.7%),or and28.4%, industrial sales increased by $7.5 million, or 51.4%, offset by decrease in commercial aerospaceair applications, which rosesales by $4.2$3.6 millionmillion, (21.4%).or Sales14.1%, intoeach ruggedcompared industrialto applicationsthe alsoprior-year increased by $3.1 million (23.2%).period.

Cost of sales as a percentage of revenue for the three and six months ended MarchJune 31,30, 2026 and 2025 consisted of the following:

As a percentage of sales, material costs increased to 30.2% in 2026 from 29.4% in 2025. The increase in material costcosts as a percentage of net sales in the 2026 periods was primarily due to aan shift inunfavorable product and production mixmix, towarddriven by higher sales volumes in offerings with higher bill-of-material (“BOM”) content, including power productsproducts, inwithin the Aerospace, Defense & Rugged Solutions segment and the Industrial Technology & Data Solutions segment,segments. whichThese products generally have highera greater proportion of purchased components and raw materials relative to labor and overhead, which increased material content.costs as a percentage of net sales.

Research and development (“R&D”) expenses totaled $8.5$9.0 million for the three months ended MarchJune 31,30, 2026, an increase of $1.3$0.9 million from $7.2$8.1 million for the three months ended MarchJune 31,30, 2025. The increase was primarily attributable to higher R&D personnel costs, including approximately $0.5 million of higher labor and fringe benefits, and approximately $0.5 million of higher bonus expense related to the Company’s company-wide incentive program.costs. The increase in R&D expense was broad-based across both Aerospace, Defense & Rugged Solutions and Industrial Technology & Data Solutions.

Interest expense was $2.5$1.8 million for the three months ended MarchJune 31,30, 2026, compared to $4.2$4.0 million for the three months that ended MarchJune 31,30, 2025, representing a decrease of $1.7$2.2 million. The decrease was primarily due to lower average outstanding borrowings under the Company’s credit facilitiesRevolver during the 2026 period compared to the prior-year period. ForIn furtherparticular, informationthe Company had no outstanding borrowings under the Revolver at June 30, 2026, compared to interest incurred in the prior-year quarter on higher Revolver borrowings. Interest expense for the Company'speriod outstandingalso debt,includes seethe "Liquidityeffects of the Company’s 2021 interest rate swaps and Capitalamortization Resources"of belowdeferred andfinancing Note 10, "Debt."costs.

Other (expense) income, net was other expense, net wasof $3.5$0.1 million for the three months ended MarchJune 31,30, 2026, compared to other income, net of $2.6$7.6 million for the three months ended MarchJune 31,30, 2025.2025, Thean year-over-yearunfavorable change wasof $7.7 million, primarily due to foreign exchange, which shifted to a $1.4 million loss in 2026 from a $7.6 million gain in 2025 driven by unfavorableexchange-rate movements on foreign exchangecurrency-denominated impacts, resulting in a foreign exchange loss of $3.2 million from fluctuations in spot exchange rates of certain currencies against the U.S. dollar when translating and remeasuring balance sheet accounts at period end compared to foreign exchange transactional gain of $4.3 million during the three-month periods ended March 31, 2025.balances. SERP investments resulted in a lossgain of $0.4$1.6 million in the firstsecond quarter of 2026 versus a gain of $0.3$0.7 million in the firstsecond quarter of 2025.2025, Additionally,primarily thedue Companyto recordedmarket income of $0.3 million associated with its investment in innolectric during the first quarter of 2025.fluctuations.

The Company’s effective tax rate will fluctuate based on the geographic regions in which the pretax profits are earned. Tax rates in the U.S. and Europe are generally comparable, while Asia generally has lower statutory.statutory tax rates. See Note 11, “Income Taxes”.

For the three months ended MarchJune 31,30, 2026, the provision for income taxes was $2.8$3.8 million, compared to $5.5$6.9 million for the same period in 2025. Earnings before income taxes for the three months ended MarchJune 31,30, 2026, decreasedincreased by $6.0$4.1 million compared to the same period in 2025, primarily due to lowerhigher income worldwide.from the North America and Asia regions, partially offset by a decrease in income from the Europe region. The Company’s effective tax rate for the three months ended MarchJune 31,30, 2026, was 15.8%,10.0%, compared to 23.0%20.5% for the same period in 2025. The decrease in the effective tax rate was primarily driven by a benefit from restricted stock vesting,vesting partiallyand offsetthe byreversal changesof uncertain tax positions due to statute expirations, as well as deferred tax benefit arising from a rate increase in the mix of jurisdictional earnings anda foreign valuationdeferred allowancestax on net operating losses.asset. See Note 11, “Income Taxes.”

Our principal sources of liquidity include $59.4$306.1 million of cash and cash equivalents at MarchJune 31,30, 2026, cash provided by operating activitiesactivities, proceeds from securities offerings and borrowings available under our credit facility. We expect to use this liquidity for operating expenses, investments in working capital, capital expenditures, interest, taxes, lease and purchase obligations, pension benefit obligations, dividends, purchases of common stock under our Repurchase Program, and debt obligations and other long-term liabilities. Our liquidity may also be utilized tofor purchases of common stock under our Repurchase Program, fund potential acquisitions in future periods, as well as potential future cash requirements related to the Enercon acquisition, including the potential 2026 Earnout Payment that may become due and the put-call options under the Enercon shareholders’ agreement, pursuant to which Bel has the current intention to purchase the remaining 20% interest by early 2027. See the discussion “Liquidity and Capital Resources” appearing in Item 7, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. We believe that our current liquidity position and future cash flows from operations will enable us to fund our operations, both in the next twelve months and in the longer term.

During the threesix months ended MarchJune 31,30, 2026, our cash and cash equivalents increased by $1.6$248.3 million. This increase was primarily due to the following:

Cash and cash equivalents, and accounts receivable comprised approximately 18.9% and 19.2% of our total assets as of March 31, 2026 and at December 31, 2025, respectively. Our current ratio (i.e., the ratio of current assets to current liabilities) was 3.2 to 1 as of March 31, 2026 and 3.0 to 1 as of December 31, 2025. At MarchJune 31,30, 2026 and December 31, 2025, $47.3$36.3 million and $43.4 million, respectively (orrepresenting 79%12% and 75%, respectively), of our cash and cash equivalents was held by our foreign subsidiaries. WeThe Company repatriated $3.0$11.8 million of funds from outside of the U.S. during the threesix months ended MarchJune 31,30, 2026. WeThe continueCompany continues to analyzeevaluate ourits global working capital and cash requirements and the potential tax liabilitiescosts attributableassociated towith furtheradditional repatriation,repatriations. andThe weCompany havehas yetnot tomade make any furthera determination regarding repatriationadditional of funds from outside the U.S.repatriations to fund our U.S. operationsoperations. in the future. In the eventIf these funds were needed forin ourthe U.S.U.S., operations,the weCompany wouldcould be required to accrue and payincur U.S. state taxes and any applicable foreign withholding taxes toin repatriateconnection thesewith funds.repatriation.

We expect foreseeable liquidity and capital resource requirements in the ordinary course to be met through existing cash and cash equivalents and anticipated cash flows from operations, as well as borrowings available under our revolving credit facility, if needed. Our material cash requirements arising in the normal course of business are outlined in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There were no material changes to our future cash requirements during the threesix months ended MarchJune 31,30, 2026.