BEL FUSE INC /NJ - 10-Q Quarterly Report

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarter Ended March 31, 2005

o Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the transition period from ________ to ________

Commission File Number 0-11676

BEL FUSE INC.

(Exact name of registrant as specified in its charter)

New Jersey	22-1463699
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

206 Van Vorst Street, Jersey City, New Jersey 07302

(201) 432-0463

(Address and telephone number, including area code, of registrant's principal executive office)

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 o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934)

Yes x No o

At April 30, 2005, there were 2,702,677 shares of Class A Common Stock, $.10 par value, outstanding and 8,775,089 shares of Class B Common Stock, $.10 par value, outstanding.

BEL FUSE INC.

INDEX

			Page
Part I		Financial Information

	Item 1.	Financial Statements	1

		Consolidated Balance Sheets as of March 31, 2005
		(unaudited) and December 31, 2004	2-3

		Consolidated Statements of Operations for the
		Three Months Ended March 31, 2005 and
		2004 (unaudited)	4

		Consolidated Statements of Stockholders' Equity
		for the Years Ended December 31, 2004 and 2003 and
		the Three Months Ended March 31, 2005 (unaudited)	5-6

		Consolidated Statements of Cash Flows for the Three
		Months Ended March 31, 2005 and 2004 (unaudited)	7-9

		Notes to Consolidated Financial Statements (unaudited)	10-25

	Item 2.	Management's Discussion and Analysis of
		Financial Condition and Results of Operations	26-41

	Item 3.	Quantitative and Qualitative Disclosures About
		Market Risk	41

	Item 4.	Controls and Procedures	42

Part II	Other Information

	Item 1.	Legal Proceedings	43

	Item 6.	Exhibits	44

	Signatures		45

PART I. Financial Information

Item 1. Financial Statements

Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America have been condensed or omitted from the following consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. It is suggested that the following consolidated financial statements 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, 2004.

The results of operations for the three months ended March 31, 2005 and 2004 are not necessarily indicative of the results for the entire fiscal year or for any other period.

BEL FUSE INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

	March 31,		December 31,
	2005		2004
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	70,086,287	$	71,197,891
Marketable securities		18,470,549		23,120,028
Accounts receivable - less allowance for doubtful
accounts of $1,766,000 and $1,610,000 as at
March 31, 2005 and December 31, 2004, respectively		33,919,726		33,247,911
Inventories		30,880,340		29,101,060
Prepaid expenses and other current
assets		2,632,768		2,404,718
Assets for sale		754,397		696,013

Total Current Assets		156,744,067		159,767,621

Property, plant and equipment - net		41,446,202		41,244,759

Intangible assets - net		4,491,993		2,691,682
Goodwill		22,483,054		9,881,854
Prepaid pension costs		1,127,941		1,127,941
Other assets		1,962,559		3,062,714

TOTAL ASSETS	$	228,255,816	$	217,776,571

See notes to unaudited consolidated financial statements

BEL FUSE INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

	March 31,		December 31,
	2005		2004
	(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt	$	2,000,000	$	2,000,000
Short-term debt		8,000,000		-
Accounts payable		14,477,652		8,814,161
Accrued expenses		8,339,822		10,293,576
Deferred income taxes		970,000		3,322,000
Income taxes payable		7,153,751		7,172,955
Dividends payable		544,000		541,000
Total Current Liabilities		41,485,225		32,143,692

Long-term Liabilities:
Minimum pension obligation		2,481,583		2,261,583
Long-term debt - net of current portion		4,000,000		4,500,000
Deferred income taxes		532,000		410,000
Total Long-term Liabilities		7,013,583		7,171,583

Total Liabilities		48,498,808		39,315,275

Commitments and Contingencies

Stockholders' Equity:
Preferred stock, no par value,
authorized 1,000,000 shares;
none issued		-		-
Class A common stock, par value
$.10 per share - authorized
10,000,000 shares; outstanding
2,702,677 and 2,702,677 shares, respectively
(net of 1,072,770 treasury shares)		270,268		270,268
Class B common stock, par value
$.10 per share - authorized
30,000,000 shares; outstanding 8,703,089
and 8,660,589 shares, respectively
(net of 3,218,310 treasury shares)		870,309		866,059
Additional paid-in capital		22,877,540		21,989,174
Retained earnings		153,718,648		149,949,283
Accumulated other comprehensive
income		2,020,243		5,386,512
Total Stockholders' Equity		179,757,008		178,461,296

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY	$	228,255,816	$	217,776,571

See notes to unaudited consolidated financial statements

BEL FUSE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Three Months Ended
	March 31,
	2005			2004

Net Sales	$	45,438,285		$	42,357,023

Costs and expenses:
Cost of sales		32,688,811			29,791,014
Selling, general and administrative		7,221,303			6,950,872
		39,910,114			36,741,886

Income from operations		5,528,171			5,615,137
Interest expense		(67,150	)		(56,766	)
Interest income		225,344			104,360

Earnings before provision for income taxes		5,686,365			5,662,731
Income tax provision		1,373,000			1,008,000

Net earnings	$	4,313,365		$	4,654,731

Earnings per common share - basic	$	0.38		$	0.42

Earnings per common share - diluted	$	0.38		$	0.41

Weighted average common shares
outstanding - basic		11,371,677			11,203,536
Weighted average common shares
outstanding - diluted		11,507,499			11,454,606

See notes to unaudited consolidated financial statements

BEL FUSE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

									Cumulative
									Other
				Compre-					Compre-			Class A		Class B		Additional
				hensive		Retained			hensive			Common		Common		Paid-In
	Total			Income (loss)		Earnings			Income (loss)			Stock		Stock		Capital

Balance, January 1, 2003	$	130,659,147				$	115,632,819		$	(50,132	)	$	267,623	$	826,149	$	13,982,688

Exercise of stock
options		2,580,224											2,544		19,920		2,557,760
Tax benefits arising
from the disposition of
non-qualified
incentive stock options		812,000															812,000
Cash dividends on Class A
common stock		(322,234	)				(322,234	)
Cash dividends on Class B
common stock		(1,667,586	)				(1,667,586	)
Currency translation
adjustment - net of taxes		1,014,808		$	1,014,808					1,014,808
Increase in unrealized gain on
marketable securities-net of taxes		14,900			14,900					14,900
Net earnings		13,763,694			13,763,694		13,763,694
Comprehensive income				$	14,793,402

Balance, December 31, 2003		146,854,953					127,406,693			979,576			270,167		846,069		17,352,448

Exercise of stock
options		3,891,266											101		19,990		3,871,175
Tax benefits arising
from the disposition of
non-qualified
incentive stock options		765,551															765,551
Cash dividends on Class A
common stock		(430,707	)				(430,707	)
Cash dividends on Class B
common stock		(1,748,292	)				(1,748,292	)
Currency translation
adjustment - net of taxes		386,257		$	386,257					386,257
Increase in unrealized gain on
marketable securities-net of taxes		4,020,679			4,020,679					4,020,679
Net earnings		24,721,589			24,721,589		24,721,589
Comprehensive income				$	29,128,525

Balance, December 31, 2004		178,461,296					149,949,283			5,386,512			270,268		866,059		21,989,174

See notes to unaudited consolidated financial statements

BEL FUSE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

										Cumulative
										Other
				Compre-						Compre-			Class A		Class B		Additional
				hensive			Retained			hensive			Common		Common		Paid-In
	Total			Income (loss)			Earnings			Income (loss)			Stock		Stock		Capital


Exercise of stock
options		776,900												-		4,250		772,650
Tax benefits arising
from the disposition of
non-qualified
incentive stock options		115,716																115,716
Cash dividends on Class A
common stock		(107,000	)					(107,000	)
Cash dividends on Class B
common stock		(437,000	)					(437,000	)
Currency translation
adjustment - net of taxes		(190,527	)	$	(190,527	)					(190,527	)
Decrease in unrealized gain on
marketable securities-net of taxes		(3,175,742	)		(3,175,742	)					(3,175,742	)
Net earnings		4,313,365			4,313,365			4,313,365
Comprehensive income				$	947,096

Balance, March 31, 2005	$	179,757,008					$	153,718,648		$	2,020,243		$	270,268	$	870,309	$	22,877,540

See notes to unaudited consolidated financial statements

BEL FUSE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Three Months Ended
	March 31,
	2005			2004
Cash flows from operating
activities:
Net earnings	$	4,313,365		$	4,654,731
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Depreciation and amortization		2,039,027			2,231,510
Other		335,716			190,000
Deferred income taxes		(118,000	)		219,000
Changes in operating assets
and liabilities (net of acquisitions)		5,844,168			1,247,516
Net Cash Provided by
Operating Activities		12,414,276			8,542,757

Cash flows from investing activities:
Purchase of property, plant
and equipment		(824,843	)		(672,388	)
Purchase of marketable
securities		(643,424	)		(646,445	)
Payment for acquisitions - net of
cash acquired		(18,803,978	)		(74,539	)
Proceeds from repayment
by contractors		-			7,250
Net Cash Used In
Investing Activities		(20,272,245	)		(1,386,122	)

See notes to unaudited consolidated financial statements

BEL FUSE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)

	Three Months Ended
	March 31,
	2005			2004
Cash flows from financing
activities:
Proceeds from borrowings		8,000,000			-
Loan repayments		(1,360,694	)		(500,000	)
Proceeds from exercise of
stock options		776,900			1,146,498
Dividends paid to common
shareholders		(541,000	)		(530,000	)
Net Cash Provided By
Financing Activities		6,875,206			116,498

Effect of exchange rate changes on cash		(128,841	)		(47,660	)

Net Increase (Decrease) in
Cash and Cash Equivalents		(1,111,604	)		7,225,473
Cash and Cash Equivalents
- beginning of period		71,197,891			57,461,152
Cash and Cash Equivalents
- end of period	$	70,086,287		$	64,686,625


Changes in operating assets
and liabilities (net of acquisitions) consist of:
Decrease in accounts receivable	$	2,586,069		$	766,031
Decrease in inventories		799,766			155,746
Increase in prepaid
expenses and other
current assets		(160,393	)		(554,873	)
Decrease in other assets		124,490			23,609
Increase in accounts payable		3,780,810			1,004,960
Increase (decrease) in income taxes payable		(20,288	)		444,827
Decrease in accrued expenses		(1,266,286	)		(592,784	)

	$	5,844,168		$	1,247,516

See notes to unaudited consolidated financial statements

BEL FUSE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Concluded)
(Unaudited)

	Three Months Ended
	March 31,
	2005		2004

Supplementary information:
Cash paid during the three months for:
Income taxes	$	1,296,000	$	269,000
Interest	$	67,000	$	56,000

Details of acquisitions:
Fair value of assets
acquired (excluding cash of $92,702
in 2005)	$	4,088,383	$	-
Intangibles		2,114,395		74,539
Goodwill		12,601,200		-
Cash paid for acquisitions	$	18,803,978	$	74,539

See notes to unaudited consolidated financial statements

BEL FUSE INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.	BASIS OF PRESENTATION AND ACCOUNTING POLICIES

The consolidated balance sheet as of March 31, 2005, and the consolidated statements of operations 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 information for the consolidated balance sheet as of December 31, 2004 was derived from audited financial statements.

Accounting Policies

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Bel Fuse Inc. and subsidiaries operate in one industry with three geographic reporting segments and are engaged in the design, manufacture and sale of products used in local area networking, telecommunication, business equipment and consumer electronic applications. The Company manages its operations geographically through its three reporting units: North America, Asia and Europe. Sales are predominantly in North America, Europe and Asia.

PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries including the businesses acquired since their respective dates of acquisition. All intercompany transactions and balances have been eliminated.

USE OF ESTIMATES - The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

CASH EQUIVALENTS - Cash equivalents include short-term investments in U.S. treasury bills and commercial paper with an original maturity of three months or less when purchased. At March 31, 2005 and December 31, 2004, cash equivalents approximated $31,782,000 and $38,355,000, respectively.

MARKETABLE SECURITIES - The Company classifies its equity securities as "available for sale", and accordingly, reflects unrealized gains and losses, net of deferred income taxes, as other comprehensive income.

The fair values of marketable securities are based on quoted market prices. Realized gains or losses from the sale of marketable securities are based on the specific identification method.

ACQUISITION EXPENSES - The Company capitalizes all direct costs associated with proposed acquisitions. If the proposed acquisitions are consummated, such costs will be included as a component of the overall cost of the acquisition. Such costs are expensed at such time as the Company deems the consummation of a proposed acquisition to be unsuccessful.

FOREIGN CURRENCY TRANSLATION - The functional currency for some foreign operations is the local currency. Assets and liabilities of foreign operations are translated at balance sheet date rates of exchange and income, expense and cash flow items are translated at the average exchange rate for the period. Translation adjustments are recorded in Other Comprehensive Income. The U.S. Dollar is used as the functional currency for certain foreign operations that conduct their business in U.S. Dollars. A combination of current and historical exchange rates is used in measuring the local currency transactions of these subsidiaries and the resulting exchange adjustments are included in the statement of operations. Current exchange rates are used for all foreign subsidiaries except for two subsidiaries in the Far East which use both current and historical exchange rates. Realized foreign currency (gains) losses were $(83,000) and $42,000 for the three months ended March 31, 2005 and 2004, respectively, and are included in Selling, General and Administrative expenses in the consolidated statement of operations.

CONCENTRATION OF CREDIT RISK - Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of accounts receivable and temporary cash investments. The Company grants credit to customers that are primarily original equipment manufacturers and to subcontractors of original equipment manufacturers based on an evaluation of the customer's financial condition, without requiring collateral. Exposure to losses on receivables is principally dependent on each customer's financial condition. The Company controls its exposure to credit risk through credit approvals, credit limits and monitoring procedures and establishes allowances for anticipated losses.

The Company places its temporary cash investments with quality financial institutions and commercial issuers of short-term paper and, by policy, limits the amount of credit exposure in any one financial instrument.

INVENTORIES - - Inventories are stated at the lower of weighted average cost or market.

REVENUE RECOGNITION -The Company recognizes revenue in accordance with the guidance contained in SEC Staff Accounting Bulletin No. 104, "Revenue Recognition in Financial Statements" ("SAB 104"). Revenue is recognized when the product has been delivered and title and risk of loss has passed to the customer, collection of the resulting receivable is deemed probable by management, persuasive evidence of an arrangement exists and the sales price is fixed and determinable. Substantially all of the Company's shipments are FCA (free carrier) which provides for title to pass upon delivery to the customer's freight carrier. Some product is shipped DDP/DDU with title passing when the product arrives at the customer's dock.

For certain customers, the Company provides consigned inventory, either at the customer’s facility or at a third party warehouse. Sales of consigned inventory are recorded when the customer withdraws inventory from consignment.

The Company typically has a twelve-month warranty policy for workmanship defects. Warranty returns have historically averaged at or below 1% of annual net sales. The Company establishes warranty reserves when a warranty issue becomes known as warranty claims have historically been immaterial. No general reserves for warranties have been established.

The Company is not contractually obligated to accept returns except for defective product or in instances where the product does not meet the customer's quality specifications. However, the Company may permit its customers to return product for other reasons. In these instances, the Company would generally require a significant cancellation penalty payment by the customer. The Company estimates such returns, where applicable, based upon management's evaluation of historical experience, market acceptance of products produced and known negotiations with customers. Such estimates are deducted from gross sales and provided for at the time revenue is recognized.

GOODWILL AND OTHER INTANGIBLES -The Company tests goodwill for impairment annually (fourth quarter), using a fair value approach at the reporting unit level. A reporting unit is an operating segment or one level below an operating segment for which discrete financial information is available and reviewed regularly by management. Assets and liabilities of the Company have been assigned to the reporting units to the extent that they are employed in or are considered a liability related to the operations of the reporting unit and were considered in determining the fair value of the reporting unit.

DEPRECIATION - - Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated primarily using the declining-balance method for machinery and equipment and the straight-line method for buildings and improvements over their estimated useful lives.

INCOME TAXES - The Company accounts for income taxes using an asset and liability approach under which deferred income taxes are recognized by applying enacted tax rates applicable to future years to the differences between the financial statement carrying amounts and the tax bases of reported assets and liabilities.

Except for a portion of foreign earnings, an income tax provision has not been recorded for U.S. federal income taxes on the undistributed earnings of foreign subsidiaries as such earnings are intended to be permanently reinvested in those operations. Such earnings would become taxable upon the sale or liquidation of these foreign subsidiaries or upon the repatriation of earnings.

The principal items giving rise to deferred taxes are unrealized gains on marketable securities available for sale, the use of accelerated depreciation methods for machinery and equipment, timing differences between book and tax amortization of intangible assets and goodwill, the assumed repatriation of a portion of foreign earnings and certain expenses which have been deducted for financial reporting purposes which are not currently deductible for income tax purposes.

STOCK-OPTION PLAN - The Company accounts for equity-based compensation issued to employees in accordance with Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees". APB No. 25 requires the use of the intrinsic value method, which measures compensation cost as the excess, if any, of the quoted market price of the stock at the measurement date over the amount an employee must pay to acquire the stock. The Company makes disclosures of pro forma net earnings and earnings per share as if the fair-value-based method of accounting had been applied as required by SFAS No. 123, "Accounting for Stock-Based Compensation".

The Company grants stock options with exercise prices at fair market value at the date of the grant. The Company will continue to account for stock-based employee compensation under the recognition and measurement principle of APB Opinion No. 25 and related interpretations through December 31, 2005. Thereafter, the Company will account for stock based compensation under Statement on Financial Accounting Standards ("SFAS") No. 123 (R), "Share Based Payment" (revised). The Company is currently evaluating its position and will make its determination to account for the compensation costs either prospectively or retroactively at the time of adoption.

The Company has adopted the disclosure-only provisions of SFAS No. 123, "Accounting for Stock-Based Compensation". Had compensation cost for the Company's stock option plan been determined based on the fair value at the grant date for awards in 2005 and 2004 consistent with the provisions of SFAS No. 123, the Company's net earnings and earnings per share would have been reduced to the pro forma amounts indicated below:

	March 31,
	2005		2004
Net earnings - as reported	$	4,313,365	$	4,654,731
Deduct: Total stock-based
employee compensation expense
determined under fair value based
method for all awards		160,868		309,899
Net earnings- pro forma	$	4,152,497	$	4,344,832
Earnings per common share -
basic-as reported	$	0.38	$	0.42
Earnings per common share -
basic-pro forma	$	0.37	$	0.39
Earnings per common share -
diluted-as reported	$	0.37	$	0.41
Earnings per common share -
diluted-pro forma	$	0.36	$	0.38

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants in 2004: dividends yield of .9%, expected volatility of 35% for Class B; risk-free interest rate of 5% and expected lives of 5 years. No options were granted during the three months ended March 31, 2005.

RESEARCH AND DEVELOPMENT - Research and development costs are expensed as incurred, and are included in cost of sales. Generally all research and development is performed internally for the benefit of the Company. The Company does not perform such activities for others. Research and development costs include salaries, building maintenance and utilities, rents, materials, administration costs and miscellaneous other items. Research and development expenses for the three months ended March 31, 2005 and 2004 amounted to $1.9 million and $1.8 million, respectively.

EVALUATION OF LONG-LIVED ASSETS - The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable in accordance with guidance in SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” If the carrying value of the long-lived asset exceeds the present value of the related estimated future cash flows, the asset would be adjusted to its fair value and an impairment loss would be charged to operations in the period identified.

EARNINGS PER SHARE - Basic earnings per common share are computed by dividing net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per common share are computed by dividing net earnings by the weighted average number of common shares and potential common shares outstanding during the period. Potential common shares used in computing diluted earnings per share relate to stock options and warrants which, if exercised, would have a dilutive effect on earnings per share.

The following table includes a reconciliation of shares used in the calculation of basic and diluted earnings per share:

	Three Months Ended
	March 31,
	2005		2004

Weighted average shares outstanding - basic		11,371,677		11,203,536

Dilutive impact of options outstanding		135,822		251,070

Weighted average shares oustanding - diluted		11,507,499		11,454,606

During the three months ended March 31, 2005 and 2004, respectively, 24,000 and -0- outstanding options were not included in the foregoing computations because they were antidilutive.

FAIR VALUE OF FINANCIAL INSTRUMENTS - For financial instruments, including cash, accounts receivable, accounts payable and accrued expenses, it was assumed that the carrying amount approximated fair value because of the short maturities of such instruments. Interest rates that are currently available to the Company for issuance of debt with similar terms and remaining maturities are used to estimate fair value for bank debt. Management believes that the carrying amount of bank debt is a reasonable estimate of its fair value.

2.	ACQUISITION

On March 22, 2005, the Company acquired the common stock of Galaxy Power Inc. ("Galaxy") for approximately $18.8 million in cash including transaction costs of approximately $.2 million. Galaxy is a designer and manufacturer of high-density dc-dc converters for distributed power and telecommunication applications. Purchase price allocations have been initially estimated by management and are subject to adjustment. Management is in the process of obtaining independent valuations and independent formal appraisals and will adjust the purchase price allocations accordingly.. Management has estimated approximately $12.6 million of goodwill and $2.0 million of identifiable intangible assets arose from the transaction. The identifiable intangible assets will be amortized on a straight line basis over their estimated useful lives..

The Company expects the purchase of Galaxy’s Power Group to be a logical strategic fit with Bel’s current Power Products group. The products are highly complementary with minimal overlap. The customer base is similar but still affords ample opportunity for cross-selling. While Bel will offer Galaxy a much-needed cost competitive manufacturing base in

China, Galaxy brings a portfolio of products and technologies aimed at higher end markets. In

addition to these strategic synergies, the Company expects significant opportunities for expense reduction and the elimination of redundancies.

The acquisition has been accounted for using the purchase method of accounting and, accordingly, the results of operations of Galaxy have been included in the Company's financial statements from March 23, 2005.

There was no in-process research and development acquired as part of this acquisition.

The following unaudited pro forma summary results of operations assume that Galaxy had been acquired as of January 1, 2004 (in thousands, except per share data):

	Three Months Ended
	March 31,
	2005		2004
Net sales	$	49,732	$	46,515
Net earnings		4,039		4,827
Earnings per share - diluted		0.35		0.42

The information above is not necessarily indicative of the results of operations that would have occurred if the Galaxy acquisition had been consummated as of January 1, 2004. Such information should not be construed as a representation of the future results of operations of the Company.

A condensed balance sheet of the major assets and liabilities of Galaxy at the acquisition date is as follows:

Cash

$

92,702

Accounts receivable

3,352,007

Inventories

2,635,763

Prepaid expenses

90,510

Property, plant and

equipment

1,159,391

Other assets

32,083

Goodwill

12,601,200

Intangible assets

2,000,000

Notes payable

(860,694

)

Accounts payable

(1,882,681

)

Accrued expenses

(436,912

)

Income taxes payable

(1,084

)

Net assets acquired

$

18,782,285

3.	GOODWILL AND OTHER INTANGIBLES

Goodwill and intangible assets deemed to have indefinite lives are not amortized, but are subject to, at a minimum, an annual impairment test which is performed during the fourth quarter. If the carrying value of goodwill or intangible assets exceeds its fair market value, an impairment loss would be recorded.

Other intangibles include patents, product information, covenants not-to-compete and supply agreements. Amounts assigned to these intangibles have been determined by management. Management considered a number of factors in determining the allocations, including valuations and independent appraisals. Other intangibles are being amortized over 4 to 10 years. Amortization expense was $315,000 and $284,000 for the three months ended March 31, 2005 and 2004, respectively.

Under the terms of the E-Power and Current Concepts, Inc. acquisition agreements of May 11, 2001, the Company is required to make contingent purchase price payments up to an aggregate of $7.6 million should the acquired companies attain specified sales levels. E-Power will be paid $2.0 million in contingent purchase price payments when sales, as defined, reach $15.0 million and an additional $4.0 million when sales reach $25.0 million on a cumulative basis through May 2007. No payments have been required through March 31, 2005 with respect to E-Power. Current Concepts will be paid 16% of sales, as defined, on the first $10.0 million of sales through May 2007. During the three months ended March 31, 2005 and 2004, the Company paid approximately $114,000 and $75,000, respectively, in contingent purchase price payments to Current Concepts. The contingent purchase price payments are accounted for as additional purchase price and as an increase intangible assets when such payment obligations are incurred.

The changes in the carrying value of goodwill classified by geographic reporting units, net of accumulated amortization, for the three months ended March 31, 2005 and the year ended December 31, 2004 are as follows:

	Total		Asia		North America		Europe

Balance, January 1, 2004	$	9,881,854	$	6,407,435	$	2,869,092	$	605,327

Goodwill allocation
related to acquisitions		-		-		-		-

Balance, December 31, 2004		9,881,854		6,407,435		2,869,092		605,327

Goodwill allocation
related to acquisitions		12,601,200		-		12,601,200		-

Balance, March 31, 2005	$	22,483,054	$	6,407,435	$	15,470,292	$	605,327

The components of intangible assets other than goodwill by geographic reporting unit are as follows:

	December 31, 2004
	Total				Asia				North America
	Gross Carrying		Accumulated		Gross Carrying		Accumulated		Gross Carrying		Accumulated
	Amount		Amortization		Amount		Amortization		Amount		Amortization

Patents and Product
Information	$	2,935,000	$	1,338,765	$	2,653,000	$	1,188,654	$	282,000	$	150,111

Covenants not-to-compete		3,523,516		2,428,069		3,523,516		2,428,069		-		-

Supply agreement		2,660,000		2,660,000		1,409,800		1,409,800		1,250,200		1,250,200

	$	9,118,516	$	6,426,834	$	7,586,316	$	5,026,523	$	1,532,200	$	1,400,311

		March 31, 2005
		Total				Asia				North America
		Gross Carrying		Accumulated		Gross Carrying		Accumulated		Gross Carrying		Accumulated
		Amount		Amortization		Amount		Amortization		Amount		Amortization

Patents and Product
Information	$	4,935,000	$	1,457,293	$	2,653,000	$	1,300,132	$	2,282,000	$	157,161

Covenants not-to-compete		3,637,969		2,623,683		3,637,969		2,623,683		-		-

	$	8,572,969	$	4,080,976	$	6,290,969	$	3,923,815	$	2,282,000	$	157,161

Estimated amortization expense for intangible assets for the next five years is as follows:

	Estimated
Year Ending	Amortization
December 31,	Expense

2005	$	1,217,000
2006		806,000
2007		417,000
2008		153,000
2009		14,000

4.	MARKETABLE SECURITIES

The Company has acquired a total of 2,037,500 shares of the common stock of Artesyn Technologies, Inc. (“Artesyn”) at a total purchase price of $16,331,469. These purchases are reflected on the Company's consolidated statement of cash flows as purchases of marketable securities and are reflected on the Company's consolidated balance sheet as marketable securities. As of March 31, 2005, the Company has recorded an unrealized gain, net of income taxes, of approximately $1,415,000, which is included in accumulated other comprehensive income as stated in the Consolidated Statement of Stockholders' Equity. In connection with this transaction, the Company is obligated to pay an investment banker's advisory fee to a third party of 20% of the appreciation in the stock of Artesyn, or $1 million, whichever is lower. As of March 31, 2005, the Company has accrued a fee in the amount of approximately $283,000. Such amount has been classified within other assets. The Company has proposed to Artesyn that the Company acquire Artesyn, but to date Artesyn has not indicated any interest in negotiating such a transaction with the Company. If the proposed acquisition of Artesyn is consummated, the fee will be capitalized as part of the acquisition costs. Such amount will be expensed at such time as the Company deems the consummation of the proposed acquisition to be unsuccessful.

At March 31, 2005 and December 31, 2004, respectively, marketable securities have a cost of approximately $17,071,000 and $16,428,000, an estimated fair value of approximately $18,470,000 and $23,120,000 and gross unrealized gains of approximately $1,399,000 and $6,692,000. Such unrealized gains are included in other comprehensive income.

5.	INVENTORIES

The components of inventories are as follows:

	March 31,		December 31,
	2005		2004
Raw material	$	17,228,703	$	15,236,393
Work in progress		1,827,821		1,607,052
Finished goods		11,823,816		12,257,615
	$	30,880,340	$	29,101,060

6.	Business Segment Information

The Company operates in one industry with three reportable segments. The segments are geographic and include North America, Asia and Europe. The primary criteria by which financial performance is evaluated and resources are allocated are revenues and operating income. The following is a summary of key financial data:

	Three Months Ended
	March 31,
	2005			2004
Intersegment Revenues
North America	$	17,960,953		$	19,613,333
Asia		31,135,372			30,485,269
Europe		3,998,422			3,784,100
Total intersegment revenues		53,094,747			53,882,702
Reconciling items:
Intersegment revenues		(7,656,462	)		(11,525,679	)
Total Consolidated Revenues	$	45,438,285		$	42,357,023

Income from Operations:
North America	$	1,284,654		$	1,384,986
Asia		4,084,950			3,855,152
Europe		158,567			374,999
	$	5,528,171		$	5,615,137

DEBT

a. Short-term debt

The Company has one domestic line of credit amounting to $10 million. During March 2005, the Company borrowed $8 million against the line of credit to partially finance the acquisition of Galaxy. The $10 million line of credit expires on March 21, 2006 and is in addition to the Company’s $10 million term loan described below. Borrowings under this $10 million line of credit are secured by the same assetsthat secure the term loan described below. The line of credit bears interest at LIBOR plus 1.50 percent (4.5% at March 31, 2005).

b. Long-term debt

On March 21, 2003, the Company entered into a $10 million secured term loan. The loan was used to partially finance the Company's acquisition of Insilco's Passive Components Group. The loan is payable in 20 equal quarterly installments of principal with a final maturity on March 31, 2008 and currently bears interest at LIBOR plus 1.50 percent (4.5 percent at March 31, 2005) payable quarterly. The rate may vary based upon the Company's performance with respect to certain financial covenants. In addition, the note may be prepaid in certain circumstances. The loan is collateralized with a first priority security interest in and lien on 65% of all the issued and outstanding shares of the capital stock of certain of the foreign subsidiaries of Bel Fuse Inc. and all other personal property and certain real property of Bel Fuse Inc. The Company is required to maintain certain financial covenants, as defined in the loan agreement. As of March 31, 2005, the Company was in compliance with all financial covenants. As of March 31, 2005, the balance due on the term loan was $6.0 million. For the three months ended March 31, 2005 and 2004, the Company recorded interest expense of approximately $67,000 and $57,000, respectively.

8.	ACCRUED EXPENSES

Accrued expenses consist of the following:

	March 31,		December 31,
	2005		2004
Sales commissions	$	1,347,600	$	1,431,169
Investment banking commissions		283,031		1,000,000
Subcontracting labor		1,587,060		1,624,963
Salaries, bonuses and
related benefits		2,163,272		3,480,213
Other		2,958,859		2,757,231
	$	8,339,822	$	10,293,576

9.	RETIREMENT FUND AND PROFIT SHARING PLAN

The Company maintains a domestic profit sharing plan and a contributory stock ownership and savings 401(K) plan, which combines stock ownership and individual voluntary savings provisions to provide retirement benefits for plan participants. The plan provides for participants to voluntarily contribute a portion of their compensation, subject to certain legal maximums. The Company will match, based on a sliding scale, up to $350 for the first $600 contributed by each participant. Matching contributions plus additional discretionary contributions will be made with Company stock purchased in the open market. The expense for the three months ended March 31, 2005 and 2004 amounted to approximately $123,000 and $109,000, respectively. These expenses are included as a component of cost of sales and selling, general and administrative expenses on the accompanying Consolidated Statement of Operations. As of March 31, 2005, the plans owned 19,936 and 128,230 shares of Bel Fuse Inc. Class A and Class B common stock, respectively.

The Company's Far East subsidiaries have a retirement fund covering substantially all of their Hong Kong based full-time employees. Eligible employees contribute up to 5% of salary to the fund. In addition, the Company may contribute an amount up to 7% of eligible salary, as determined by Hong Kong government regulations, in cash or Company stock. The expense for the three months ended March 31, 2005 and 2004 amounted to approximately $104,000 and $107,000, respectively. As of March 31, 2005, the plan owned 3,323 and 15,256 shares of Bel Fuse Inc. Class A and Class B common stock, respectively.

The Supplemental Executive Retirement Plan (the “Plan” or "SERP") is designed to provide a limited group of key management and highly compensated associates of the Company supplemental retirement and death benefits. The Plan was established by the Company in 2002. Employees are selected at the sole discretion of the Board of Directors of the Company to participate in the Plan. The Plan is unfunded. The Company utilizes life insurance to partially cover its obligations under the Plan. The benefits available under the Plan vary according to when and how the participant terminates employment with the Company. If a participant retires (with the prior written consent of the Company) on his normal retirement date (65 years old, 20 years of service, and 5 years of Plan participation), his normal retirement benefit under the Plan would be annual payments equal to 40% of his average base compensation (calculated using compensation from the highest 5 consecutive calendar years of Plan participation), payable in monthly installments for the remainder of his life.

If a participant retires early from the Company (55 years old, 20 years of service, and 5 years of Plan participation), his early retirement benefit under the Plan would be an amount (i) calculated as if his early retirement date were in fact his normal retirement date, (ii) multiplied by a fraction, with the numerator being the actual years of service the participant has with the Company and the denominator being the years of service the participant would have had if he had retired at age 65, and (iii) actuarially reduced to reflect the early retirement date. If a participant dies prior to receiving 120 monthly payments under the Plan, his beneficiary would be entitled to continue receiving benefits for the shorter of (i) the time necessary to complete 120 monthly payments or (ii) 60 months.

If a participant dies while employed by the Company, his beneficiary would receive, as a survivor benefit, an annual amount equal to (i) 100% of the participant’s annual base salary at date of death for one year, and (ii) 50% of the participant’s annual base salary at date of death for each of the following 4 years, each payable in monthly installments. The Plan also provides for disability benefits, and a forfeiture of benefits if a participant terminates employment for reasons other than those contemplated under the Plan. The expense for the three months ended March 31, 2005 and 2004 amounted to approximately $220,000 and $94,000, respectively.

The components of SERP expense are as follows:

	Three Months Ended
	March 31,
	2005		2004
Service cost	$	99,000	$	35,000
Interest cost		77,000		40,000
Amortization of adjustments		44,000		19,000
Total SERP expense	$	220,000	$	94,000

	March 31,		December 31,
	2005		2004
Balance sheet amounts:
Accrued pension liability	$	2,481,583	$	2,261,583
Intangible asset		1,127,941		1,127,941

10.	COMMON STOCK

During 2000, the Board of Directors of the Company authorized the purchase of up to ten percent (10%) of the Company’s outstanding Class B common shares. As of March 31, 2005, the Company had purchased and retired 23,600 Class B common shares at a cost of approximately $808,000 which reduced the number of Class B common shares outstanding.

The Company maintains two classes of outstanding common stock, Class A Common Stock (“Class A”) and Class B Common Stock (“Class B”). The following is a summary of the pertinent rights and privileges of each class outstanding:

·	Voting - Class A receives one vote per share; Class B is non-voting;

Dividends (cash) - Cash dividends are payable at the discretion of the Board of Directors and is subject to a 5% provision whereby cash dividends paid out to Class B must be at least 5% higher per share annually than Class A. At the discretion of the Board of Directors, Class B may receive a cash dividend without Class A receiving a cash dividend.

·	Dividends (other than cash) and distributions in connection with any recapitalization and upon liquidation, dissolution or winding up of the Company - Shared equally among Class A and Class B;

·	Mergers and consolidations - Equal amount and form of consideration per share among Class A and Class B;

Class B Protection - Any person or group that purchases 10% or more of the outstanding Class A (excluding certain shares, as defined) must make a public cash tender offer (within 90 days) to acquire additional shares of Class B to avoid disproportionate voting rights. Failure to do so will result in forfeiture of voting rights for those shares acquired after the recapitalization. Alternatively, the purchaser can sell Class A shares to reduce the purchaser's holdings below 10% (excluding shares owned prior to recapitalization). Above 10%, this protection transaction is triggered every 5% (i.e., 15%, 20%, 25%, etc.);

Convertibility - Not convertible into another class of Common Stock or any other security by the Company, unless by resolution by the Board of Directors to convert such shares as a result of either class becoming excluded from quotation on NASDAQ, or if total outstanding shares of Class A falls below 10% of the aggregate number of outstanding shares of both classes (in which case, all Class B shares will be automatically converted in Class A shares).

·	Transferability and trading - Both Class A and Class B are freely transferable and publicly traded on NASDAQ National Market;

·	Subdivision of shares - Any split, subdivision or combination of the outstanding shares of Class A or Class B must be proportionately split with the other class in the same manner and on the same basis.

11.	COMPREHENSIVE INCOME

Comprehensive income for the three months ended March 31, 2005 and 2004 consists of:

	Three Months Ended
	March 31,
	2005			2004
Net earnings	$	4,313,365		$	4,654,731
Currency translation adjustment-
net of taxes		(190,527	)		(222,438	)
Increase (decrease) in unrealized
gain on marketable securities
- net of taxes		(3,175,742	)		15,700

Comprehensive income	$	947,096		$	4,447,993

12.	ASSET HELD FOR SALE

On July 15, 2004, the Company entered into an agreement for the sale of a certain parcel of land located in Jersey City, New Jersey. The sales agreement is subject to a due diligence period by the buyer. The seller and buyer are aware that a portion of the property may be subject to tidelands claims by the State of New Jersey. The Company has reclassified the asset as available for sale with a net book value of $754,397 and $696,013 on the Company's balance sheet at March 31, 2005 and December 31, 2004, respectively.

13.	NEW FINANCIAL ACCOUNTING STANDARDS

In December 2004, the FASB issued SFAS No. 123(R), that will require compensation costs related to share-based payment transactions to be recognized in the financial statements. With limited exceptions, the amount of compensation cost will be measured based on the grant-date fair value of the equity or liability instruments issued. In addition, if granted, liability awards will be remeasured each reporting period. Compensation cost will be recognized over the period that an employee provides service in exchange for the reward. The statement also amends SFAS No. 95, "Statement of Cash Flows", to require that excess tax benefits be reported as a financing cash inflow rather than as a reduction of taxes paid. SFAS No. 123(R) is effective as to the Company as of the beginning of the 2006 fiscal year. The Company is currently evaluating its position and will make its determination to account for the compensation costs either prospectively or retroactively at the time of adoption. The adoption of SFAS 123(R) is expected to have a material effect on the Company's results of operations.

In December 2004, the FASB staff issued FASB Staff Position ("FSP") FAS 109-1, "Application of FASB Statement No. 109, Accounting for Income Taxes, to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004" to provide guidance on the application of Statement 109 to the provision within the American Jobs Creations Act of 2004 (the "Act") that provides tax relief to U.S. domestic manufacturers. The FSP states that the manufacturers', deduction provided for under the Act should be accounted for as a special deduction in accordance with FASB Statement No. 109 and not as a tax rate reduction. The FSP is effective upon issuance. The adoption of FAS 109-1 could have a material effect on the Company's results of operations and financial position.

In December 2004, the FASB staff issued FSP FAS 109-2, "Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision Within the American Jobs Creation Act of 2004" to provide accounting and disclosure guidance for the repatriation provisions included in the Act. The Act introduced a special limited-time dividends received deduction on the repatriation of certain foreign earnings to a U.S. taxpayer. The FSP is effective upon issuance. The adoption of FAS 109-2 could have a material effect on the Company's results of operations and financial position.

In December 2004, the FASB issued SFAS No. 153, an amendment of APB Opinion No. 29 "Exchanges of Nonmonetary Assets". SFAS No. 153 amends APB Opinion No. 29 by eliminating the exception under APB No. 29 for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for periods beginning after June 15, 2005. The adoption of SFAS No. 153 is not expected to have a material effect on the Company's financial position or results of operations.

In November 2004, the FASB issued SFAS No. 151, an amendment to ARB No. 43 chapter 4 "Inventory Costs". SFAS No. 151 requires that abnormal costs of idle facility expenses, freight, handling costs and wasted material (spoilage) be recognized as current-period charges. SFAS No. 151 is effective for fiscal years beginning after June 15, 2005. Adoption of SFAS No. 151 is not expected to have a material impact on the Company's results of operations or financial position.

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

The Company’s quarterly and annual operating results are affected 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, 2004. 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 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, 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

Bel is a leading producer of electronic products that help make global connectivity a reality. The Company designs, manufactures and markets a broad array of magnetics, modules, circuit protection devices and interconnect products. While these products are deployed primarily in the computer, networking and telecommunication industries, Bel’s expanding portfolio of products also finds application in the automotive, medical and consumer electronics markets. Bel's products are designed to protect, regulate, connect, isolate or manage a variety of electronic circuits.

During the first three months of 2005, approximately $.5 million of the sales increase compared to the first three months of 2004 is attributable to the acquisition by the Company of Galaxy Power, Inc. (“Galaxy”) which occurred on March 22, 2005. Gross profit margins were lower during the first quarter of 2005 compared to 2004 principally due to increased raw material costs due to changes in the Company’s product mix and additional inventory obsolescence adjustments.

Critical Accounting Policies

The Company’s discussion and analysis of its financial condition and results of operations are based upon the Company’s 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, intangible assets, investments, 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.

The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

Allowance for Doubtful Accounts

The Company maintains allowances for doubtful accounts for estimated losses from the inability of its customers to make required payments. The Company determines its reserves by both specific identification of customer accounts where appropriate and the application of historical loss experience to non-specific accounts. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

Inventory

The Company makes purchasing decisions principally based upon firm sales orders from customers, the availability and pricing of raw materials and projected customer requirements. Future events that could adversely affect these decisions and result in significant charges to the Company’s operations include miscalculating customer requirements, technology changes which render certain raw materials and finished goods obsolete, loss of customers and/or cancellation of sales orders, stock rotation with distributors and termination of distribution agreements. The Company writes down its inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and the estimated market value based upon the aforementioned assumptions. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required.

When inventory is written-off, it is never written back up; the cost remains at zero or the level to which it has been written-down. When inventory that has been written-off is subsequently used in the manufacturing process, the lower adjusted cost of the material is charged to cost of sales. During 2001 the Company wrote down or reserved $12 million of inventory, including non cancelable purchase commitments. At December 31, 2004, approximately $1.4 million of inventory (at original cost before the write-down or reserve in 2001) was on hand. During 2003 and 2004 approximately $2.5 million and $7.0 million of this inventory was scrapped. Management intends to retain the balance of this inventory for possible use in future orders. Should any of this inventory be used in the manufacturing process for customer orders, the improved gross profit will be recognized at the time the completed product is shipped and the sale is recorded.

The following is a quarterly schedule of material reintroduced into production since the initial $12 million charge.

Prior Quarters		$	164,329

1st Quarter	2002		4,538
2nd Quarter	2002		68,098
3rd Quarter	2002		38,914
4th Quarter	2002		271,163

1st Quarter	2003		77,069
2nd Quarter	2003		80,046
3rd Quarter	2003		28,851
4th Quarter	2003		98,263

1st Quarter	2004		31,051
2nd Quarter	2004		78,232
3rd Quarter	2004		72,857
4th Quarter	2004		53,295

1st Quarter	2005		777
		$	1,067,483

Acquisitions

On March 22, 2005, the Company acquired the common stock of Galaxy Power Inc. for approximately $18.8 million in cash including transaction costs of approximately $.2 million. Purchase price allocations have been initially estimated by management and are subject to adjustment. Management is in the process of obtaining independent valuations and independent formal appraisals and will adjust purchase price allocations accordingly. Management has estimated that approximately $12.6 million of goodwill and $2.0 million of the identifiable intangible assets arose from the transaction. The identifiable intangible assets will be amortized on a straight-line basis over their estimated useful lives.

The Company believes that the purchase of Galaxy’s Power Group is a logical strategic fit with Bel’s current Power Products group. The Company believes that the products are highly complementary with minimal overlap. The customer base is similar but still affords ample opportunity for cross-selling. While Bel will offer Galaxy a much-needed cost competitive manufacturing base in China, Galaxy brings a portfolio of products and technologies aimed at higher end markets. In

addition to these strategic synergies, there is significant opportunity for expense reduction and the elimination of redundancies.

This acquisition was accounted for using the purchase method of accounting and accordingly, the results of operations of Galaxy have been included in the Company’s financial statements from March 23, 2005.

The following unaudited proforma summary results of operations assumes that Galaxy had been acquired as of January 1, 2004 (in thousands except per share data):

	Three Months Ended
	March 31,
	2005		2004
Net sales	$	49,732	$	46,515
Net earnings		4,039		4,827
Earnings per share-diluted		0.35		0.42

The information above is not necessarily indicative of the results of operations that would have occurred if the acquisition had been consummated as of January 1, 2004. Such information should not be construed as being a representation of the future results of operations of the Company.

A condensed balance sheet of the major assets and liabilities of Galaxy at the acquisition date is as follows:

Cash	$	92,702
Accounts receivable		3,352,007
Inventories		2,635,763
Prepaid expenses		90,510
Property, plant and
equipment		1,159,391
Other assets		32,083
Goodwill		12,601,200
Intangible assets		2,000,000
Notes payable		(860,694	)
Accounts payable		(1,882,681	)
Accrued expenses		(436,912	)
Income taxes payable		(1,084	)
Net assets acquired	$	18,782,285

Income Taxes

The Company files income tax returns in every jurisdiction in which it has reason to believe it is subject to tax. Historically, the Company has been subject to examination by various taxing jurisdictions. To date, none of these examinations has resulted in any material additional tax. Nonetheless, any tax jurisdiction may contend that a filing position claimed by the Company regarding one or more of its transactions is contrary to that jurisdiction's laws or regulations.

Revenue Recognition

The Company recognizes revenue in accordance with the guidance contained in SEC Staff Accounting Bulletin No. 104, “Revenue Recognition in Financial Statements” (“SAB 104”). Revenue is recognized when the product has been delivered and title and risk of loss have passed to the customer, collection of the resulting receivable is deemed probable by management, persuasive evidence of an arrangement exists and the sale price is fixed and determinable.

Historically the Company has been successful in mitigating the risks associated with its revenue recognition. Some issues relate to product warranty, credit worthiness of its customers and concentration of sales among a few major customers.

The Company is not contractually obligated to accept returns except for defective product or in instances where the product does not meet the Company’s quality specifications. If these conditions existed, the Company would be obligated to repair or replace the defective product or make a cash settlement with the customer. If the financial conditions of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances for bad debt may be required which could have a material adverse effect on the Company’s results of operations and financial condition. The Company has a significant amount of sales with several major customers. The loss of any one of these customers could have a material adverse effect on the Company’s results of operations and financial position.

Results of Operations

The following table sets forth, for the first quarters of 2005 and 2004, the percentage relationship to net sales of certain items included in the Company’s consolidated statements of operations.

	Percentage of Net Sales
	Three Months Ended
	March 31,
	2005			2004

Net sales		100.0	%		100.0	%
Cost of sales		71.9			70.3
Selling, general and
administrative expenses		15.9			16.4
Interest income - net		0.3			0.1
Earnings before provision for
income taxes		12.5			13.4
Income tax provision		3.0			2.4
Net earnings		9.5			11.0

The following table sets forth the year over year percentage increase or decrease of certain items included in the Company's consolidated statements of operations.

	Increase (decrease) from
	Prior Period
	Three Months Ended
	March 31, 2005
	compared with Three
	Months Ended March
	31, 2004

Net sales		7.3	%

Cost of sales		9.7

Selling, general and
administrative expenses		3.9

Net earnings		(7.3	)

Sales

Net sales increased 7.3% from $42.4 million during the first quarter of 2004 to $45.4 million during 2005. The Company attributes the increase to strong demand for interconnect sales, resulting in an increase of $2.6 million in such sales, and increased module sales of $1.1 million of which $.5 million is from the acquisition of Galaxy offset in part by decreases in circuit protection sales of $.3 million and magnetic sales of $.4 million.

The significant components of the Company's first quarter 2005 sales were from magnetic products of $28.9 million (as compared with $29.3 million during the first quarter of 2004), circuit protection products of $4.6 million (as compared with $4.9 million during the first quarter of 2004), interconnect products of $8.3 million (as compared with $5.7 million during the first quarter of 2004), and module products of $3.6 million (as compared with $2.5 million during the first quarter of 2004).

Net sales for the first quarter of 2005 were approximately $3.8 million less than net sales for the fourth quarter of 2004. In both 2003 and 2004, the first quarter has been the Company's weakest revenue quarter.

Based on conflicting opinions the Company received from customers and competitors in the electronics industry pertaining to revenue growth during 2005, the Company can not predict with any degree of certainty sales revenue for 2005. Although the Company's backlog has been stable, the Company feels that this is not a good indicator of revenues.. The Company continues to have limited visibility as to future customer requirements. The Company had two customers with sales in excess of 10% (14.4% and 11.1%) of total sales during the quarter ended March 31, 2005. The loss of any one of these customers could have a material adverse effect on the Company's results of operations, financial position and cash flows.

The Company cannot quantify the extent of sales growth arising from unit sales mix and/or price changes. Given the change in the nature of the products purchased by customers from period to period, the Company believes that neither unit changes nor price changes are meaningful. Over the past year, newer and more sophisticated products with higher unit selling prices have been introduced. Through the Company's engineering and research effort, the Company has been successful in adding additional value to existing product lines, which tends to increase sales prices initially until that generation of products becomes mature and sales prices experience price degradation. In general, as products become mature, average selling prices decrease.

Cost of Sales

Bel generally enters into processing arrangements with five independent third party contractors in the Far East. Costs are recorded as incurred for all products manufactured either at the Company's third party contractors or at the Company's own manufacturing facilities. 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 manufactures finished goods at its own manufacturing facilities in Glen Rock, Pennsylvania, Inwood, New York, the Dominican Republic and Mexico. See "Critical Accounting Policies" above for information regarding the use of inventories in the manufacturing process that have been written down in prior years.

Cost of sales as a percentage of net sales increased from 70.3 % during the first quarter of 2004 to 71.9 % in 2005. The increase in the cost of sales percentage is primarily attributable to a 1.6 % increase in material costs as a percentage of sales. The increase in raw material costs is principally related to increased manufacturing of value-added products which has a higher raw material content than the Company’s other products and increases in obsolescence reserves. In addition, the Company's results for the first quarter of 2004 benefited from a reversal of certain 2003 year-end reserves for raw material obsolescence.

Included in cost of sales are research and development expenses of $1.9 million and $1.8 million for the first quarters of 2005 and 2004, respectively. The Company has experienced minor increases in research and development expense throughout its domestic facilities offset in part by lower research and development costs in the Far East as many of these jobs were moved by the Company from Hong Kong to China and several positions were eliminated.

Selling, General and Administrative Expenses

The percentage relationship of selling, general and administrative expenses to net sales decreased from 16.4% during the three months ended March 31, 2004 to 15.9% during the three months ended March 31, 2005, in part as a result of the Company's ability to leverage general and administrative expenses over a larger revenue base. The Company attributes the $.3 million increase in the dollar amount of such expenses primarily to increased selling expenses of approximately $.1 million which includes salaries, commissions and related expenses. This increase relates to increased sales. In addition, the Company incurred a $.1 million increase in employee benefit costs and other various net selling, general and administrative expenses of $.1 million.

During 2006, the Company will be required to expense share based compensation costs in accordance with SFAS No. 123(R). This charge will be principally included in selling, general and administrative expenses. See "New Financial Accounting Standards" included in Management's Discussion and Analysis of Financial Condition and Results of Operations for information regarding SFAS No. 123(R).

Interest Income - net

Interest income earned on cash and cash equivalents increased by approximately $121,000 during the first three months ended March 31, 2005 compared to 2004. The increase is due primarily to increased earnings on higher cash and cash equivalent balances.

Interest Expense

A $10 million term loan was entered into on March 21, 2003 which was borrowed for the acquisition of Insilco's Passive Components Group. The loan bears interest at LIBOR plus 1.50% (4.50% at March 31, 2005) payable quarterly. Interest expense increased by approximately $10,000 during the three months ended March 31, 2005 compared with 2004. The increase is attributable in part to higher interest rates charged on the loan for the first three months of 2005 compared to 2004 and in part due to the fact that during March 2005, the Company borrowed $8.0 million against its domestic line of credit to partially finance the acquisition of Galaxy. The loan bears interest at LIBOR plus 1.5% (4.5% at March 31, 2005).

Provision for Income Taxes

The provision for income taxes for the three months ended March 31, 2005 was $1.4 million compared to $1.0 million during the first three months of 2004. The Company's earnings before income taxes for the three months ended March 31, 2005 and 2004 are comparable. The income tax provision is higher than the prior quarter's provision primarily due to higher foreign taxes. Recent developments in Hong Kong suggest that the authorities are applying different standards in the treatment of offshore income.

The Company conducts manufacturing activities in the Far East. More specifically, the Company manufactures the majority of its products in the People’s Republic of China (“PRC”), Hong Kong and Macau and has not been subject to corporate income tax in the PRC. The Company's activities in Hong Kong have generally consisted of administration, quality control and accounting, as well as some limited manufacturing activities. Hong Kong imposes corporate income tax at a rate of 17.5 percent solely on income sourced to Hong Kong. That is, its tax system is a territorial one which only seeks to tax activities conducted in Hong Kong. Since the Bel entity in Hong Kong conducts most of its manufacturing and quality control activities in the PRC, a portion of this entity’s income is deemed “offshore” and thus not fully taxable in Hong Kong. Although the statutory tax rate in Hong Kong is 17.5 percent, the Company generally pays an effective Hong Kong rate of less than 4 percent.

The Company also conducts manufacturing operations in Macau. Macau has a statutory corporate income tax rate of 16 percent. However, the Company, as a result of investing in a certain location in Macau, was able to obtain a 10-year tax holiday in Macau, thereby reducing its effective Macau income tax rate from 16 percent to 8 percent. The tax holiday in Macau expired in April 2004. Since most of the Company's operations are conducted in the Far East, the majority of its profits are sourced in these three Far East jurisdictions. Accordingly, the profits earned in the U.S. are comparatively small in relation to its profits earned in the Far East. Therefore, there is generally a significant difference between the statutory U.S. tax rate and the Company’s effective tax rate.

Net Income

The Company's net income for the first quarter of 2005 reflected a $341,000 decrease from the first quarter of 2004 and a $1.7 million decrease from the fourth quarter of 2004. The decrease from the first quarter of 2004 reflects the Company's lower gross margin in 2005 and increased taxes in 2005.

The Company has historically followed a practice of reinvesting a portion of the earnings of foreign subsidiaries in the expansion of its foreign operations. If the unrepatriated earnings were distributed to the parent corporation rather than reinvested in the Far East, such funds would be subject to United States Federal income taxes. Through March 31, 2005, management has identified a minimum of approximately $26 million of foreign earnings that will be repatriated during 2005 and will be eligible for the reduced tax rate of 5.25% under the American Jobs Creations Act of 2004.

Inflation and Foreign Currency Exchange

During the past two years, the effect of inflation on the Company's profitability was not material. Historically, fluctuations of the U.S. Dollar against other major currencies have not significantly affected the Company's foreign operations as most sales have been 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 either incurred in U.S. Dollars or the currencies of the Hong Kong Dollar, the Macau Pataca or the Chinese Renminbi. Commencing with the acquisition of the Passive Components Group, the Company's European entity has sales transactions which are denominated principally in Euros and British Pounds. Conversion of these transactions into U.S. dollars has resulted in currency exchange (gains) losses of $(83,000) and $42,000 for the three months ended March 31, 2005 and 2004, respectively, which are included in selling, general and administrative expense and approximately $190,000 and $222,000 for the three months ended March 31, 2005 and 2004, respectively, in unrealized exchange losses relating to the translation of foreign subsidiary financial statements which are included in other comprehensive income. Any change in linkage of the U.S. Dollar and the Hong Kong Dollar, the Chinese Renminbi or the Macau Pataca could have a material effect on the Company's consolidated financial position or results of operations.

Liquidity and Capital Resources

Historically, the Company has financed its capital expenditures primarily through cash flows from operating activities. Currently, due to the recent acquisitions of the Passive Components Group of Insilco Technologies, Inc. and Galaxy, the Company has borrowed money under a secured term loan and line of credit and has unused lines of credit as described below. Management believes that the cash flow from operations after payments of dividends and scheduled repayments of its bank debt, combined with its existing capital base and the Company's available lines of credit, will be sufficient to fund its operations for the near term. 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 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 result in the loss of domestic and foreign credit facilities and preclude the Company from raising debt or equity financing in the capital markets.

The Company has one domestic line of credit amounting to $10 million. During March 2005, the Company borrowed $8 million against the line of credit to partially finance the acquisition of Galaxy. The $10 million line of credit expires on March 21, 2006 and is in addition to the Company’s $10 million term loan described below. Borrowings under this $10 million line of credit are secured by the same assets, which secure the term loan described below. The line of credit bears interest at LIBOR plus 1.50 percent (4.5% at March 31, 2005).

On March 21, 2003, the Company entered into a $10 million secured term loan. The loan was used to partially finance the Company's acquisition of Insilco's Passive Components Group. The loan agreement requires 20 equal quarterly installments of principal with a final maturity on March 31, 2008 and bears interest at LIBOR plus 1.50 percent (4.50% percent at March 31, 2005) payable quarterly. The loan is collateralized with a first priority security interest in 65% of all the issued and outstanding shares of the capital stock of certain of the foreign subsidiaries of Bel Fuse Inc. and all other personal property and certain real property of Bel Fuse Inc. The Company is required to maintain certain financial covenants, as defined in the agreement. For the three months ended March 31, 2005 and 2004, the Company recorded interest expense of approximately $67,000 and $57,000, respectively, and was in compliance with all of the covenants contained in the loan agreement as of March 31, 2005.

The Company's Hong Kong subsidiary has an unsecured line of credit of approximately $2 million, which was unused at March 31, 2005. This line of credit expired on April 30, 2005. Borrowing on this line of credit was guaranteed by the Company.

For information regarding further commitments under the Company's operating leases, see Note 15 of Notes to the Company's Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended December 31, 2004.

As previously announced, the Company has acquired a total of 2,037,500 shares of the common stock of Artesyn Technologies, Inc. at a total purchase price of $16,331,469. These purchases are reflected on the Company's consolidated statement of cash flows as purchases of marketable securities and are reflected on the Company's balance sheet as marketable securities. As of March 31, 2005, the Company has recorded an unrealized gain, net of income taxes, of approximately $.8 million. In connection with this transaction the Company is obligated to pay an investment banker's advisory fee to a third party. As of March 31, 2005, the Company has accrued a fee in the amount of approximately $.3 million.The Company has proposed to Artesyn that the Company acquire Artesyn, but to date Artesyn has not idicated any interest in negotiating such a transaction with the Company. During the first quarter ended March 31, 2005 the gross unrealized gain on marketable securities decreased $5.3 million from December 31, 2004.

The Company is constructing a 117,000 square foot manufacturing facility in Zhongshan City, PRC for approximately $2.3 million. As of March 31, 2005, the Company has paid approximately $.4 million toward the construction. The Company expects to complete the construction during 2006.

On July 15, 2004, the Company entered into an agreement for the sale of a certain parcel of land located in Jersey City, New Jersey. The sales agreement is subject to a due diligence period by the buyer. The seller and buyer are aware that a portion of the property may be subject to tidelands claims by the State of New Jersey. The Company has classified the asset as held for sale with a net book value of $754,000 on the Company's consolidated balance sheet at March 31, 2005.

Under the terms of the E-Power and Current Concepts, Inc. acquisition agreements of May 11, 2001, the Company will be required to make contingent purchase price payments up to an aggregate of $7.6 million should the acquired companies attain specified related sales levels. E-Power will be paid $2.0 million in contingent purchase price payments when sales reach $15.0 million and an additional $4.0 million when sales reach $25.0 million on a cumulative basis through May, 2007. No payments have been required to date with respect to E-Power. Current Concepts will be paid 16% of related sales on the first $10.0 million in sales through May 2007. During the three months ended March 31, 2005 and 2004, the Company paid approximately $114,000 and $75,000, respectively, in contingent purchase price payments to Current Concepts. The contingent purchase price payments have been accounted for as additional purchase price and as an increase other intangibles when such payment obligations are incurred.

On May 9, 2000, the Board of Directors authorized the repurchase of up to 10% of the Company’s outstanding common shares from time to time in market or privately negotiated transactions. As of March 31, 2005, the Company had purchased and retired 23,600 Class B shares at a cost of approximately $808,000, which reduced the number of Class B common shares outstanding.

During the three months ended March 31, 2005, the Company's cash and cash equivalents decreased by approximately $1.1 million, reflecting approximately $18.8 million used principally for the purchase of Galaxy, $1.4 million for loan repayments, $.9 million for the purchase of property, plant and equipment, $.6 million for the purchase of marketable securities and by $.5 million for payments of dividends offset by $12.5 million provided by operating activities (principally as a result of net income of $4.3 million, changes in operating assets and liabilities of $5.8 million and depreciation expense of $2.0 million, borrowings of $8.0 million and proceeds of $.8 million from the exercise of stock options.

Cash, marketable securities and cash equivalents and accounts receivable comprised approximately 53.6% and 58.6% of the Company's total assets at March 31, 2005 and December 31, 2004, respectively. The Company's current ratio (i.e., the ratio of current assets to current liabilities) was 3.8 to 1 and 5.0 to 1 at March 31, 2005 and December 31, 2004, respectively.

The following table sets forth at March 31, 2005 the amounts of payments due under specific types of contractual obligations, aggregated by category of contractual obligation, for the time periods described below.

	Payments due by period
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years

Short-term debt	$	8,000,000	$	8,000,000	$	-	$	-	$	-
Long-term debt		6,000,000		2,000,000		4,000,000		-		-
Capital expenditure obligations		1,874,000		1,874,000		-
Contingent purchase price
commitments		953,000		953,000		-		-		-
Operating leases		2,186,858		1,121,985		820,902		243,971		-
Raw material purchase obligations		16,862,091		16,862,091		-		-		-

Total	$	35,875,949	$	30,811,076	$	4,820,902	$	243,971	$	-

The Company is currently obligated to fund the Company's SERP. As of March 31, 2005 the SERP had an unfunded benefit obligation of approximately $2.8 million.

Other Matters

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. Should the Company pursue additional acquisitions during 2005, the Company may be required to pursue public or private equity or debt transactions to finance the acquisitions and to provide working capital to the acquired companies.

New Financial Accounting Standards

In December 2004, the Financial Accounting Standard Board (“FASB”) issued Statement on Financial Accounting Standards ("SFAS") No. 123(R), "Share-Based Payment" (revised), that will require compensation costs related to share-based payment transactions to be recognized in the financial statements. With limited exceptions, the amount of compensation cost will be measured based on the grant-date fair value of the equity or liability instruments issued. In addition, liability awards will be remeasured each reporting period. Compensation cost will be recognized over the period that an employee provides service in exchange for the reward. The statement also amends SFAS No. 95, "Statement of Cash Flows", to require that excess tax benefits be reported as a financing cash inflow rather than as a reduction of taxes paid. SFAS No. 123(R) is effective as to the Company as of the beginning of the 2006 fiscal year. The Company is currently evaluating its position and will make its determination to account for the compensation costs either prospectively or retroactively at the time of adoption. The adoption of SFAS 123(R) is expected to have a material effect on the Company's results of operations.

In December 2004, the FASB staff issued FASB Staff Position ("FSP") FAS 109-1, "Application of FASB Statement No. 109, Accounting for Income Taxes, to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004" to provide guidance on the application of FASB Statement No. 109 to the provision within the American Jobs Creations Act of 2004 (the "Act") that provides tax relief to U.S. domestic manufacturers. The FSP states that the manufacturers' deduction provided for under the Act should be accounted for as a special deduction in accordance with Statement 109 and not as a tax rate reduction. The FSP is effective upon issuance. The adoption of FAS 109-1 could have a material effect on the Company's results of operations or financial position.

In December 2004, the FASB staff issued FSP No. FAS 109-2, "Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision Within the American Jobs Creation Act of 2004" to provide accounting and disclosure guidance for the repatriation provisions included in the Act. The Act introduced a special limited-time dividends received deduction on the repatriation of certain foreign earnings to a U.S. taxpayer. The FSP is effective upon issuance. The adoption of FAS 109-2 could have a material effect on the Company's results of operations and financial position.

In November 2004 the FASB issued SFAS No. 151, an amendment to ARB No. 43 chapter 4 "Inventory Costs". SFAS No. 151 requires that abnormal costs of idle facility expenses, freight, handling costs and wasted material (spoilage) be recognized as current-period charges. SFAS No. 151 is effective for fiscal years beginning after June 15, 2005. Adoption of SFAS No. 151 is not expected to have a material impact on the Company's results of operations or financial position.

Item7A. Quantitative and Qualitative Disclosures About Market Risk

Fair Value of Financial Instruments — The following disclosure of the estimated fair value of financial instruments is made in accordance with the requirements of Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments". The estimated fair values of financial instruments have been determined by the Company using available market information and appropriate valuation methodologies.

However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange.

The Company has not entered into, and does not expect to enter into, financial instruments for trading or hedging purposes. The Company does not currently anticipate entering into interest rate swaps and/or similar instruments.

The Company's carrying values of cash, marketable securities, accounts receivable, accounts payable and accrued expenses are a reasonable approximation of their fair value.

The Company enters into transactions denominated in U.S. Dollars, Hong Kong Dollars, the Macau Pataca, the Chinese Renminbi, Euros and British Pounds. Fluctuations in the U.S. dollar exchange rate against these currencies could significantly impact the Company's consolidated results of operations.

The Company believes that a change in interest rates of 1% or 2% would not have a material effect on the Company's consolidated statement of operations or balance sheet.

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 chief financial officer, of the effectiveness of the Company’s disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-15. Based upon that evaluation, the Company’s chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

b.)

Changes in internal controls over financial reporting: There have been no 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 reasonable likely to materially affect, the Company internal control over financial reporting.

PART II. Other Information

Item 1. Legal Proceedings

The Company had been a party to an ongoing arbitration proceeding related to the acquisition of its Telecom business in 1998. The Company believes that the seller breached the terms of a related Global Procurement Agreement dated October 2, 1998 and was seeking damages related thereto. During 2004, the Company and the seller settled the matter. The settlement resulted in a payment to the Company and an unconditional release by the seller of all counterclaims against the Company. The net gain of $2,935,000 from the settlement of the lawsuit is included in the Company's consolidated statement of operations for the year ended December 31, 2004.

The Company is a defendant in a lawsuit, captioned Murata Manufacturing Company, Ltd. v. Bel Fuse Inc et al and brought in Illinois Federal District Court. Plaintiff claims that its patent covers all of the Company's modular jack products. That party had previously advised the Company that it was willing to grant a non-exclusive license to the Company under the patent for a 3% royalty on all future gross sales of ICM products; payment of a lump sum of 3% of past sales including sales of applicable Insilco products; an annual minimum royalty of $500,000; payment of all attorney fees; and marking of all licensed ICM's with the third party's patent number. The Company is also a defendant in a lawsuit , captioned Regal Electronics, Inc. v. Bel Fuse Inc. and brought in California Federal District Court. Plaintiff claims that its patent covers certain of the Company's modular jack products. That party had previously advised the Company that it was willing to grant a non transferable license to the Company for an up front fee of $500,000 plus a 6% royalty on future sales. The District Court has granted summary judgment in the Company's favor dismissing Regal Electronics' infringement claims, while at the same time the Court dismissed the Company's invalidity counterclaim against Regal Electronics. As of the date hereof, the Company has not been advised as to whether Regal will appeal the Court's rejection of its infringement claims. The Company believes that none of its products are covered by these patents and intends to vigorously defend its position and no accrual has been provided in the accompanying consolidated financial statements.

The Company is not a party to any other legal proceeding, the adverse outcome of which is expected to have a material adverse effect on the Company's consolidated financial condition or result of operations.

Item 6. Exhibits

(a) Exhibits:

2.1	Agreement and Plan of Merger dated as of March 4, 2005 by and among Bel Fuse Inc., Bel Westboro, Inc. and Galaxy Power, Inc. - Incorporated by reference to the Registrant's Current Report on Form 8-K dated March 7, 2005.

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 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 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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.

	By:	/s/Daniel Bernstein
		Daniel Bernstein, President and Chief Executive Officer




	By:	/s/ Colin Dunn
		Colin Dunn, Vice President of Finance

Dated: May 9, 2005

EXHIBIT INDEX

Exhibit 2.1 - Agreement and Plan of Merger dated as of March 4, 2005 by and among Bel Fuse Inc., Bel Westboro, Inc. and Galaxy Power, Inc. - Incorporated by reference to the Registrant's Current Report on Form 8-K dated March 7, 2005.

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 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 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.