UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





FORM
      10-Q


(Mark
      One)




**x**
                **QUARTERLY
                    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                    ACT OF
                    1934**





For
      the
      quarterly period ended  March
      31,
      2008


or





**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-F11676





BEL
      FUSE
      INC.


(Exact
      name of registrant as specified in its charter)


NEW
                  JERSEY
              
              22-1463699(State
                  of other jurisdiction of incorporation or organization)
              
              (I.R.S.
                  Employer Identification No.)206
                  Van Vorst Street
              Jersey
                  City, New Jersey
              07302(Address
                  of principal executive offices)
              
              (Zip
                  Code)





(201)
      432-0463


(Registrant's
      telephone number, including area code)







(Former
      name, former address and former fiscal year, if changed since last
      report)





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 and 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.     x
      Yes  o
      No





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





Large
                accelerated filer o
            Accelerated
                filer x
            Non-accelerated
                filer o
            Smaller
                reporting company o(Do
                not check if a smallerreporting
                company)





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


o
      Yes  x
      No




At
      May 7,
      2008, there were 2,530,489 shares of Class A Common Stock, $0.10 par value,
      outstanding and 9,321,693 shares of Class B Common Stock, $0.10 par value,
      outstanding.










BEL
      FUSE
      INC.





INDEX





PagePart
                I
            
            Financial
                InformationItem
                1.
            Financial
                Statements
            1Condensed
                Consolidated Balance Sheets as of March 31, 2008and
                December 31, 2007
            2-3Condensed
                Consolidated Statements of Operations for the ThreeMonths
                Ended March 31, 2008 and 2007
            4Condensed
                Consolidated Statements of Stockholders' Equity forthe
                Year Ended December 31, 2007 and the Three Months EndedMarch
                31, 2008
            5Condensed
                Consolidated Statements of Cash Flows for the ThreeMonths
                Ended March 31, 2008 and 2007
            6-7Notes
                to Condensed Consolidated Financial Statements
            8-29Item
                2.
            Management's
                Discussion and Analysis ofFinancial
                Condition and Results of Operations
            30-41Item
                3.
            Quantitative
                and Qualitative Disclosures AboutMarket
                Risk
            42Item
                4.
            Controls
                and Procedures
            43Part
                II
            
            Other
                InformationItem
                1.
            Legal
                Proceedings
            43-44Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            45Item
                6.
            Exhibits
            46Signatures
            47










PART
      I.  Financial
      Information





Item
      1.  Financial
      Statements (Unaudited)





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 condensed consolidated financial statements pursuant
      to the rules and regulations of the Securities and Exchange Commission. It
      is
      suggested that the following condensed 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, 2007.





The
      results of operations for the three months ended March 31, 2008 and 2007 are
      not
      necessarily indicative of the results for the entire fiscal year or for any
      other period.





-
          1
          -




**BEL
      FUSE INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**


**(dollars
      in thousands)**





March 31,
            
            December 31,2008
            
            2007**ASSETS**Current
                Assets:Cash
                and cash equivalents
            
            $
            88,874
            
            $
            83,875Marketable
                securities
            
            
            18,286
            
            
            3,273Short-term
                investments
            
            
            6,576
            
            
            20,542Accounts
                receivable - less allowance for doubtfulaccounts
                of $1,092 and $977 at March 31,2008
                and December 31, 2007, respectively
            
            
            42,542
            
            
            52,217Inventories
            
            
            42,484
            
            
            39,049Prepaid
                expenses and other currentassets
            
            
            1,921
            
            
            1,446Refundable
                income taxes
            
            
            2,764
            
            
            3,168Deferred
                income taxes
            
            
            1,723
            
            
            2,661Total
                Current Assets
            
            
            205,170
            
            
            206,231Property,
                plant and equipment - net
            
            
            41,217
            
            
            41,113Restricted
                cash
            
            
            4,576
            
            
            4,553Long-term
                investment
            
            
            8,455
            
            
            2,536Deferred
                income taxes
            
            
            3,665
            
            
            4,364Intangible
                assets - net
            
            
            1,138
            
            
            1,181Goodwill
            
            
            28,620
            
            
            28,447Other
                assets
            
            
            5,310
            
            
            5,435TOTAL
                ASSETS
            
            $
            298,151
            
            $
            293,860





See
      notes
      to condensed consolidated financial statements.




-
          2
          -




**BEL
      FUSE INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**


**(dollars
      in thousands, except per share data)**





March 31,
            
            December 31,2008
            
            2007**LIABILITIES
                AND STOCKHOLDERS' EQUITY**Current
                Liabilities:Accounts
                payable
            
            $
            17,202
            
            $
            16,145Accrued
                expenses
            
            
            9,849
            
            
            12,113Income
                taxes payable
            
            
            4,183
            
            
            4,007Dividends
                payable
            
            
            825
            
            
            795Total
                Current Liabilities
            
            
            32,059
            
            
            33,060Long-term
                Liabilities:Deferred
                gain on sale of property
            
            
            4,642
            
            
            4,645Liability
                for uncertain tax positions
            
            
            7,174
            
            
            6,930Minimum
                pension obligation and unfunded pension liability
            
            
            4,855
            
            
            4,698Total
                Long-term Liabilities
            
            
            16,671
            
            
            16,273Total
                Liabilities
            
            
            48,730
            
            
            49,333Commitments
                and ContingenciesStockholders'
                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 2,530,489 and 2,545,644 shares,
                respectively (net of 1,072,770 treasury shares)
            
            
            253
            
            
            255Class
                B common stock, par value $.10 per share -authorized
                30,000,000 shares; outstanding 9,307,693 and 9,286,627 shares,
                respectively (net of 3,218,310 treasury shares)
            
            
            931
            
            
            929Additional
                paid-in capital
            
            
            29,016
            
            
            29,107Retained
                earnings
            
            
            215,952
            
            
            214,580Accumulated
                other comprehensive income (loss)
            
            
            3,269
            
            
            (344
            )Total
                Stockholders' Equity
            
            
            249,421
            
            
            244,527TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY
            
            $
            298,151
            
            $
            293,860






See
      notes
      to condensed consolidated financial statements.




-
          3
          -




**BEL
      FUSE INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS**


**(dollars
      in thousands, except per share data)**





Three Months EndedMarch 31,2008
            
            2007Net
                Sales
            
            $
            60,869
            
            $
            61,807Costs
                and expenses:Cost
                of sales
            
            
            49,638
            
            
            47,891Selling,
                general and administrative
            
            
            8,933
            
            
            9,48358,571
            
            
            57,374Income
                from operations
            
            
            2,298
            
            
            4,433Interest
                expense and other costs
            
            
            -
            
            
            (122
            )Realized
                loss/impairment charge on investment
            
            
            (280
            )
            
            -Interest
                income
            
            
            913
            
            
            833Earnings
                before provision for income taxes
            
            
            2,931
            
            
            5,144Income
                tax provision
            
            
            764
            
            
            1,135Net
                earnings
            
            $
            2,167
            
            $
            4,009Earnings
                per Class A common shareBasic
            
            $
            0.17
            
            $
            0.32Diluted
            
            $
            0.17
            
            $
            0.32Weighted
                average Class A common shares outstandingBasic
            
            
            2,532,408
            
            
            2,702,677Diluted
            
            
            2,532,408
            
            
            2,702,677Earnings
                per Class B common shareBasic
            
            $
            0.19
            
            $
            0.34Diluted
            
            $
            0.19
            
            $
            0.34Weighted
                average Class B common shares outstandingBasic
            
            
            9,306,940
            
            
            9,172,736Diluted
            
            
            9,313,556
            
            
            9,206,463





See
      notes
      to condensed consolidated financial statements.




-
          4
          -





**BEL
      FUSE INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY**


**(dollars
      in thousands)**





AccumulatedCompre-
            
            
            
            Other
            
            Class A
            
            Class B
            
            Additionalhensive
            
            Retained
            
            Comprehensive
            
            Common
            
            Common
            
            Paid-InTotal
            
            Income
            
            Earnings
            
            Income (loss)
            
            Stock
            
            Stock
            
            CapitalBalance,
                January 1, 2007
            
            $
            222,150
            
            
            
            
            $
            190,953
            
            $
            (1,816
            )
            $
            270
            
            $
            917
            
            $
            31,826Exercise
                of stock options
            
            
            1,452
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            6
            
            
            1,446Tax
                benefits arising from the dispositionof
                non-qualified incentive stock options
            
            
            149
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            149Cash
                dividends declared on Class Acommon
                stock
            
            
            (534
            )
            
            
            
            
            (534
            )Cash
                dividends declared on Class Bcommon
                stock
            
            
            (2,175
            )
            
            
            
            
            (2,175
            )Issuance
                of restricted common stock
            
            
            -
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            7
            
            
            (7
            )Termination
                of restricted common stock
            
            
            -
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1
            )
            
            1Repurchase/retirement
                of Class Acommon
                stock
            
            
            (5,733
            )
            
            
            
            
            
            
            
            
            
            
            (15
            )
            
            
            
            
            (5,718
            )Currency
                translation adjustment
            
            
            960
            
            
            960
            
            
            
            
            
            960Unrealized
                holding gains on marketablesecurities
                arising during the year, net of taxes
            
            
            2,077
            
            
            2,077
            
            
            
            
            
            2,077Reclassification
                adjustment for gainsincluded
                in net earnings, net of taxes
            
            
            (2,058
            )
            
            (2,058
            )
            
            
            
            
            (2,058
            )Stock-based
                compensation expense
            
            
            1,410
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,410Change
                in unfunded SERP liability,net
                of taxes
            
            
            493
            
            
            493
            
            
            
            
            
            493Net
                earnings
            
            
            26,336
            
            
            26,336
            
            
            26,336Comprehensive
                income
            
            
            
            
            $
            27,808Balance,
                December 31, 2007
            
            $
            244,527
            
            
            
            
            $
            214,580
            
            $
            (344
            )
            $
            255
            
            $
            929
            
            $
            29,107Exercise
                of stock options
            
            
            49
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            2
            
            
            47Cash
                dividends declared on Class Acommon
                stock
            
            
            (158
            )
            
            
            
            
            (158
            )Cash
                dividends declared on Class Bcommon
                stock
            
            
            (637
            )
            
            
            
            
            (637
            )Repurchase/retirement
                of Class Acommon
                stock
            
            
            (394
            )
            
            
            
            
            
            
            
            
            
            
            (2
            )
            
            
            
            
            (392
            )Currency
                translation adjustment
            
            
            719
            
            
            719
            
            
            
            
            
            719Unrealized
                holding gains on marketablesecurities
                arising during the year, net of taxes
            
            
            2,894
            
            
            2,894
            
            
            
            
            
            2,894Stock-based
                compensation expense
            
            
            254
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            254Net
                earnings
            
            
            2,167
            
            
            2,167
            
            
            2,167Comprehensive
                income
            
            
            
            
            $
            5,780Balance,
                March 31, 2008
            
            $
            249,421
            
            
            
            
            $
            215,952
            
            $
            3,269
            
            $
            253
            
            $
            931
            
            $
            29,016





See
      notes
      to condensed consolidated financial statements.




-
          5
          -





**BEL
      FUSE INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**(dollars
      in thousands)**


Three Months EndedMarch
                  31,2008
              
              2007Cash
                  flows from operating activities:Net
                  earnings
              
              $
              2,167
              
              $
              4,009Adjustments
                  to reconcile net earnings to net cash provided by operating
                  activities:Depreciation
                  and amortization
              
              
              1,813
              
              
              1,916Stock-based
                  compensation
              
              
              254
              
              
              404Excess
                  tax benefits from share-based payment arrangements
              
              
              -
              
              
              (62
              )Realized
                  loss/impairment charge on investment
              
              
              280
              
              
              -Unrealized
                  foreign exchange transaction gains
              
              
              (139
              )
              
              -Other,
                  net
              
              
              157
              
              
              185Deferred
                  income taxes
              
              
              (248
              )
              
              (224
              )Changes
                  in operating assets and liabilities
              
              
              5,752
              
              
              676Net
                  Cash Provided by Operating Activities
              
              
              10,036
              
              
              6,904Cash
                  flows from investing activities:Purchase
                  of property, plant and equipment
              
              
              (1,659
              )
              
              (2,827
              )Purchase
                  of intangible asset
              
              
              (150
              )
              
              -Purchase
                  of marketable securities
              
              
              (10,124
              )
              
              (11,801
              )Redemption
                  of investment
              
              
              7,766
              
              
              -Net
                  Cash Used In Investing Activities
              
              
              (4,167
              )
              
              (14,628
              )





See
      notes
      to condensed consolidated financial statements.




-
          6
          -





**BEL
      FUSE INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)**


**(dollars
      in thousands)**


Three Months EndedMarch
                  31,2008
              
              2007Cash
                  flows from financing activities:Proceeds
                  from exercise of stock options
              
              
              49
              
              
              489Dividends
                  paid to common shareholders
              
              
              (765
              )
              
              (558
              )Purchase
                  and retirement of Class A common stock
              
              
              (394
              )
              
              -Excess
                  tax benefits from share-based payment arrangements
              
              
              -
              
              
              62Net
                  Cash Used In Financing Activities
              
              
              (1,110
              )
              
              (7
              )Effect
                  of exchange rate changes on cash
              
              
              240
              
              
              41Net
                  Increase (decrease) inCash
                  and Cash Equivalents
              
              
              4,999
              
              
              (7,690
              )Cash
                  and Cash Equivalents-
                  beginning of period
              
              
              83,875
              
              
              76,761Cash
                  and Cash Equivalents-
                  end of period
              
              $
              88,874
              
              $
              69,071Changes
                  in operating assets and liabilities consist of:Decrease
                  in accounts receivable
              
              $
              9,988
              
              $
              1,525(Increase)
                  decrease in inventories
              
              
              (3,234
              )
              
              1,771Increase
                  in prepaid expenses and other current assets
              
              
              (453
              )
              
              (103
              )Increase
                  in other assets
              
              
              (161
              )
              
              (163
              )(Increase)
                  decrease in accounts payable
              
              
              981
              
              
              (1,017
              )Increase
                  in income taxes
              
              
              919
              
              
              797Decrease
                  in accrued expenses
              
              
              (2,288
              )
              
              (2,134
              )$
              5,752
              
              $
              676Supplementary
                  information:Cash
                  paid during the period for income taxes
              
              $
              137
              
              $
              493


See
      notes
      to condensed consolidated financial statements.




-
          7
          -




BEL
      FUSE
      INC. AND SUBSIDIARIES


NOTES
      TO
      UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




1. BASIS
          OF
          PRESENTATION AND ACCOUNTING POLICIES




The
      condensed consolidated balance sheet as of March 31, 2008, and the condensed
      consolidated statements of operations, stockholders' equity 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, changes in stockholders' equity
      and cash flows for all periods presented have been made. The results for the
      three months ended March 31, 2008 should not be viewed as indicative of the
      Company’s annual results or the Company’s results for any other period. The
      information for the condensed consolidated balance sheet as of December 31,
      2007
      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
      condensed consolidated financial statements include the accounts of the Company
      and its wholly owned subsidiaries, including businesses acquired since their
      respective dates of acquisition. All intercompany transactions and balances
      have
      been eliminated.





USE
      OF
      ESTIMATES - The
      preparation of the condensed 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, 2008 and December 31, 2007, cash equivalents approximated $33.7 million
      and
      $33.4 million, respectively.





MARKETABLE
      SECURITIES - The
      Company generally classifies its equity securities as "available for sale",
      and
      accordingly, reflects unrealized gains and losses, net of deferred income taxes,
      as a component of accumulated other comprehensive income. In
      accordance with Financial Accounting Standards Board (“FASB”) Staff Position
      Nos. FAS 115-1 and FAS 124-1 “The Meaning of Other-Than-Temporary Impairment and
      Its Application to Certain Investments” (“FSP 115-1”), the Company periodically
      reviews its marketable securities and determines whether the investments are
      other-than-temporarily impaired. If the investments are deemed to be
      other-than-temporarily impaired, the investments are written down to their
      then
      current fair market value. See Note 2 for further discussion regarding an
      impairment charge taken in the first quarter of 2008.




-
          8
          -




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 currently capitalizes all direct costs associated with proposed
      acquisitions. If the proposed acquisition is 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. Effective January 1, 2009, acquisition-related costs, including restructuring
      costs, will be recognized separately from the acquisition and will generally
      be
      expensed as incurred in accordance with Statement of Financial Accounting
      Standards (“SFAS”) No. 141(R), “Business Combinations”.





FOREIGN
      CURRENCY TRANSLATION - The
      functional currency for some foreign operations is the local currency. Assets
      and liabilities of foreign operations are translated at exchange rates as of
      the
      balance sheet date, and income, expense and cash flow items are translated
      at
      the average exchange rate for the applicable 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. Realized
      foreign currency gains were minimal for the three months ended March 31, 2008
      and 2007.




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. In December
      2007,
      the Company was notified that a $25.7 million investment in the Columbia
      Strategic Cash Portfolio was being liquidated and the fund was converting from
      a
      fixed net asset value (NAV) to a floating NAV. The Company recorded a $0.3
      million impairment charge in the first quarter of 2008 due to market value
      changes. See Note 3 for additional information regarding this
      liquidation.





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". 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 reasonably assured 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.
      DDP
      is defined as Delivered Duty Paid by the Company and DDU is Delivered Duty
      Unpaid by the Company.




-
          9
          -


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 **.** During
      all periods in 2008 and 2007, inventory on consignment was
      immaterial.





The
      Company typically has a twelve-month warranty policy for workmanship defects.
      During June 2007, the Company established a warranty accrual in the amount
      of
      approximately $1.2 million, which included a $0.4 million inventory write off
      of
      inventory on hand. The accrual related to certain defective parts, which the
      Company is replacing, sold to a customer primarily within the same quarter.
      This
      accrual has been classified within cost of sales. During the first quarter
      of
      2008, $0.4 million of this accrual was reversed, as the actual quantity of
      returns has been lower than anticipated. As of March 31, 2008, the Company
      has a
      remaining warranty accrual related to these defective parts in the amount of
      $0.4 million. The Company believes that this liability will be utilized in
      2008.
      As the Company has not historically had significant warranty claims, 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 sales and provided for at the time
      revenue is recognized.





GOODWILL – The
      Company tests goodwill for impairment annually during the 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.




-
          10
          -




For
      that
      portion of foreign earnings that have not been repatriated, 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 deferred gains on property
      sales, unrealized gains/losses on marketable securities available for sale,
      foreign tax credits, the use of accelerated depreciation methods for machinery
      and equipment, timing differences between book and tax amortization of
      intangible assets and goodwill and certain expenses including the SERP which
      have been deducted for financial reporting purposes which are not currently
      deductible for income tax purposes.





Effective
      January 1, 2007, uncertain tax positions are accounted for in accordance with
      FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes.” See
      Note 6 for further discussion.





STOCK-BASED
      COMPENSATION – The
      Company has one stock-based compensation plan under which both incentive
      stock-options and restricted stock awards are granted to employees and
      directors. The Company accounts for stock-based compensation under SFAS No.
      123
      (R), "Share-Based Payment" using the modified prospective method. Under modified
      prospective application, SFAS 123(R) applies to new awards and to awards
      modified, repurchased, or cancelled after the required effective date (January
      1, 2006). Additionally, compensation costs for the portion of the awards for
      which the requisite service has not been rendered that are outstanding as of
      the
      required effective date are being recognized as the requisite service is
      rendered after the required effective date. The compensation cost for the
      portion of awards is based on the grant-date fair value of those awards as
      calculated for either recognition or pro forma disclosures under SFAS 123.
      Changes to the grant-date fair value of equity awards granted before the
      required effective date of this Statement are precluded. The compensation cost
      for those earlier awards is attributed to periods beginning on or after the
      required effective date of SFAS 123(R) using the attribution method that was
      used under SFAS 123, except that the method of recognizing forfeitures only
      as
      they occur was not continued.





There
      were no stock options or restricted stock awards granted by the Company during
      the three months ended March 31, 2008 or 2007.





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,
      2008 and 2007 amounted to $2.0 million and $1.7 million, respectively.





EVALUATION
      OF LONG-LIVED ASSETS –
The
      Company reviews property and equipment and finite-lived intangible assets 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.





-
          11
          -





EARNINGS
      PER SHARE – The
      Company utilizes the two-class method to report its earnings per share. The
      two-class method is an earnings allocation formula that determines earnings
      per
      share for each class of common stock according to dividends declared and
      participation rights in undistributed earnings. The Company’s Certificate of
      Incorporation, as amended, states that Class B common shares are entitled to
      dividends at least 5% greater than dividends paid to Class A common shares,
      resulting in the two-class method of computing earnings per share. In computing
      earnings per share, the Company has allocated dividends declared to Class A
      and
      Class B based on amounts actually declared for each class of stock and 5% more
      of the undistributed earnings have been allocated to Class B shares than to
      the
      Class A shares on a per share basis. 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, for
      each class of common stock, 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 for Class A and B common shares which, if
      exercised, would have a dilutive effect on earnings per share.





-
          12
          -





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





Three
                Months EndedMarch
                31,2008
            
            2007Numerator:Net
                earnings
            
            $
            2,167
            
            $
            4,009Less
                Dividends declared:Class
                A
            
            
            158
            
            
            108Class
                B
            
            
            637
            
            
            450Undistributed
                earnings
            
            $
            1,372
            
            $
            3,451Undistributed
                earnings allocation - basic:Class
                A undistributed earnings
            
            $
            282
            
            $
            756Class
                B undistributed earnings
            
            
            1,090
            
            
            2,695Total
                undistributed earnings
            
            $
            1,372
            
            $
            3,451Undistributed
                earnings allocation - diluted:Class
                A undistributed earnings
            
            $
            282
            
            $
            754Class
                B undistributed earnings
            
            
            1,090
            
            
            2,697Total
                undistributed earnings
            
            $
            1,372
            
            $
            3,451Net
                earnings allocation - basic:Class
                A undistributed earnings
            
            $
            440
            
            $
            864Class
                B undistributed earnings
            
            
            1,727
            
            
            3,145Net
                earnings
            
            $
            2,167
            
            $
            4,009Net
                earnings allocation - diluted:Class
                A undistributed earnings
            
            $
            440
            
            $
            862Class
                B undistributed earnings
            
            
            1,727
            
            
            3,147Net
                earnings
            
            $
            2,167
            
            $
            4,009Denominator:Weighted
                average shares outstanding:Class
                A - basic and diluted
            
            
            2,532,408
            
            
            2,702,677Class
                B - basic
            
            
            9,306,940
            
            
            9,172,736Dilutive
                impact of stock options andunvested
                restricted stock awards
            
            
            6,616
            
            
            33,727Class
                B - diluted
            
            
            9,313,556
            
            
            9,206,463Earnings
                per share:Class
                A - basic
            
            $
            0.17
            
            $
            0.32Class
                A - diluted
            
            $
            0.17
            
            $
            0.32Class
                B - basic
            
            $
            0.19
            
            $
            0.34Class
                B - diluted
            
            $
            0.19
            
            $
            0.34




During
      the three months ended March 31, 2008 and 2007, 53,000 and 14,000 outstanding
      options, respectively, were not included in the foregoing computations for
      Class
      B common shares because their effect would be antidilutive.




-
          13
          -




FAIR
      VALUE OF FINANCIAL INSTRUMENTS - For
      financial instruments, including cash and cash equivalents, marketable
      securities, accounts receivable, accounts payable and accrued expenses, the
      carrying amount approximates fair value because of the short maturities of
      such
      instruments. Effective January 1, 2008, the Company adopted Statement of
      Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements”
(“SFAS 157”) for the Company’s financial assets and liabilities. The adoption of
      SFAS 157 in the quarter ended March 31, 2008 had no material impact on the
      financial condition, results of operations or cash flows of the Company, but
      resulted in certain additional disclosures reflected in Note 2.




2.  MARKETABLE
      SECURITIES





At
      March
      31, 2008, the Company has an investment consisting of a private placement of
      units of beneficial interest in the Columbia Strategic Cash Portfolio (the
      “Columbia Portfolio”), which is an enhanced cash fund sold as an alternative to
      money-market funds. Since June 2007, the Company has invested a portion of
      its
      cash balances on hand in this fund. During the second and third quarters of
      2007, the amounts were appropriately classified as cash equivalents in the
      consolidated balance sheet as the fund was considered both short-term and highly
      liquid in nature. These investments are subject to credit, liquidity, market
      and
      interest rate risk. For example, the Columbia Portfolio includes investments
      in
      certain asset backed securities and structured investment vehicles that are
      collateralized by sub-prime mortgage securities or related to mortgage
      securities, among other assets. As a result of adverse market conditions that
      have unfavorably affected the fair value and liquidity availability of
      collateral underlying the Columbia Portfolio, the Columbia Portfolio was
      overwhelmed with withdrawal requests from investors and it was closed with
      a
      restriction placed upon the cash redemption ability of its holders in the fourth
      quarter of 2007. At
      that
      time, the Company had $25.7 million invested in this fund, including $0.7
      million of reinvested interest. As
      such,
      the Company redesignated the Columbia Portfolio units from cash equivalents
      to
      short-term investments or long-term investments based upon the liquidation
      schedule provided by the fund.





The
      Company deemed a portion of its carrying value in the Columbia Portfolio to
      be
      other-than-temporarily impaired at December 31, 2007. Accordingly, the Company
      wrote down the carrying value of the investments to their then current market
      value at December 31, 2007 and the reduction in value of $0.3 million was
      recorded as an impairment charge during the fourth quarter of 2007. The net
      asset value of these investments continued to decline throughout the first
      quarter to an NAV of $.9701 at March 31, 2008 and, accordingly, the Company
      recorded an additional impairment charge of $0.3 million during the first
      quarter of 2008. This is included in the accompanying Condensed Consolidated
      Statement of Operations for the three months ended March 31, 2008. As of March
      31, 2008, the Company has received total cash redemptions to date of $10.1
      million (including $7.8 million in the three months ended March 31, 2008) at
      a
      weighted-average net asset value of $.9863 per unit. The additional realized
      losses associated with these redemptions were minimal. Information and the
      markets relating to these investments remain dynamic, and there may be further
      declines in the value of these investments, the value of the collateral held
      by
      these entities, and the liquidity of the Company’s investments. To the extent
      that the Company determines that there is a further decline in fair value,
      the
      Company may recognize additional impairment charges in future periods up to
      the
      aggregate amount of these investments.




-
          14
          -




As
      of
      March 31, 2008, the Company owned a total of 1,840,919 shares, or approximately
      1.9% of the
      outstanding shares ,
      of the
      common stock of Toko, Inc. (“Toko”) at a total cost of $5.6 million. Toko had a
      market capitalization of approximately $225.3 million as of March 31, 2008.
      These shares are reflected on the Company’s condensed consolidated balance
      sheets as marketable securities. These marketable securities are considered
      to
      be available for sale under SFAS No. 115, “Accounting for Certain Investments in
      Debt and Equity Securities”. Thus, as of March 31, 2008, the Company has
      recorded an unrealized loss, net of income tax benefit, of approximately $0.9
      million which is included in accumulated other comprehensive income in
      stockholders’ equity. The Company’s investment in Toko has been in an unrealized
      loss position for approximately twelve months. In accordance with FSP 115-1,
      the
      Company periodically reviews its marketable securities and determines whether
      the investments are other-than-temporarily impaired. The Company reviewed
      various factors in making its determination, including volatility of the Toko
      share price over the last year, Toko’s recent financial results and the
      Company’s intention and ability to hold the investment. The Toko share price has
      been extremely volatile over the last year, ranging from $1.22 - $4.20 (the
      Company’s cost basis in its remaining shares of Toko stock is $3.07 per share).
      In the second quarter of 2007, a gain was recognized on the disposition of
      a
      majority of the Company’s holdings of Toko stock. In addition, the Company’s
      unrealized loss, net of tax benefit, improved from $1.4 million at December
      31,
      2007 to $0.9 million at March 31, 2008, as the Toko share price increased from
      $1.77 at December 31, 2007 to $2.31 at March 31, 2008. The Company has the
      intention and the ability to hold the investment until it is in a gain position.
      As a result of these factors, management believes that the investment in Toko
      is
      not other-than-temporarily impaired at March 31, 2008.





On
      February 25, 2008, the Company announced that it had acquired 4,370,052 shares
      of Power-One, Inc. (“Power-One”) common stock representing, to the Company’s
      knowledge, 5% of Power-One’s outstanding common stock, at a total purchase price
      of $10.1 million. Power-One’s common stock is quoted on the NASDAQ Global
      Market. Power-One is a designer and manufacturer of power conversion and power
      management products. As
      of
      March 31, 2008, the Company has recorded an unrealized gain, net of income
      tax,
      of approximately $2.4 million which is included in accumulated other
      comprehensive income in stockholders’ equity.





At
      March
      31, 2008 and December 31, 2007, respectively, marketable securities had a cost
      of approximately $15.8 million and $5.6 million, an estimated fair value of
      approximately $18.3 million and $3.3 million and gross unrealized gains (losses)
      of approximately $2.5 million and $(2.3) million. Such unrealized gains (losses)
      are included, net of tax, in accumulated other comprehensive income (loss).
      The
      Company had no realized gains or losses during the three months ending March
      31,
      2008 or 2007. Included in other assets at March 31, 2008 and December 31, 2007
      are marketable securities designated for utilization in accordance with the
      Company’s SERP plan with a cost of approximately $4.6 million and $4.6 million,
      respectively, and an estimated fair value of approximately $4.7 million and
      $4.9
      million, respectively. Such unrealized net gains are included, net of tax,
      in
      accumulated other comprehensive loss.




-
          15
          -




Effective
      January 1, 2008, the Company has adopted the provisions of SFAS 157 for its
      financial assets and liabilities. Although this partial adoption of SFAS 157
      had
      no material impact on its financial condition, results of operations or cash
      flows, the Company is now required to provide additional disclosures as part
      of
      its financial statements. SFAS 157 clarifies that fair value is an exit price,
      representing the price that would be received to sell an asset or paid to
      transfer a liability in an orderly transaction between market participants
      at
      the measurement date. The Company utilizes market data or assumptions that
      market participants would use in pricing the asset or liability. SFAS 157
      establishes a three-tier fair value hierarchy, which prioritizes the inputs
      used
      in measuring fair value. These tiers include: Level 1, defined as observable
      inputs such as quoted market prices in active markets; Level 2, defined as
      inputs other than quoted prices in active markets that are either directly
      or
      indirectly observable; and Level 3, defined as unobservable inputs about which
      little or no market data exists, therefore requiring an entity to develop its
      own assumptions.





As
      of
      March 31, 2008, the Company held certain financial assets that are measured
      at
      fair value on a recurring basis. These consisted of the Company’s investments in
      Toko and Power-One stock (categorized as available-for-sale securities) and
      the
      marketable securities designated for utilization in accordance with the
      Company’s SERP plan (categorized as an other long-term investment). The fair
      value of these investments is determined based on quoted market prices in public
      market and are categorized as Level 1. The Company does not have any financial
      assets measured at fair value on a recurring basis categorized as Level 2 or
      Level 3, and there were no transfers in or out of Level 2 or Level 3 during
      the
      quarter ended March 31, 2008.





The
      following table sets forth by level within SFAS 157’s fair value hierarchy of
      the Company’s financial assets accounted for at fair value on a recurring basis
      as of March 31, 2008 (dollars in thousands).





Assets at Fair Value as of March 31, 2008Total
            
            Quoted Prices
              in Active
              Markets for
              Identical
              Assets
              (Level 1)
            
            Significant
              Other
              Observable
              Inputs
              (Level 2)
            
            Significant
              Unobservable
              Inputs
              (Level 3)Available-for-sale
                securities
            
            $
            18,278
            
            $
            18,278
            
            
            -
            
            
            -Other
                long-term investment
            
            
            4,722
            
            
            4,722
            
            
            -
            
            
            -Total
            
            $
            23,000
            
            $
            23,000
            
            
            -
            
            
            -




-
          16
          -





The
      following table sets forth by level within SFAS 157’s fair value hierarchy of
      the Company’s financial assets accounted for at fair value on a nonrecurring
      basis as of March 31, 2008 (dollars in thousands). These consisted of the
      Company’s investment in the Columbia Portfolio (categorized as an other
      investment in the table below). The fair value of these investments is
      determined based on significant other observable inputs and are categorized
      as
      Level 2.





Assets at Fair Value as of March 31, 2008Total
            
            Quoted Prices
              in Active
              Markets for
              Identical
              Assets
              (Level 1)
            
            Significant
              Other
              Observable
              Inputs
              (Level 2)
            
            Significant
              Unobservable
              Inputs
              (Level 3)
            
            Total Gains
              (Losses) During
              the Three
              Months Ended
              March 31, 2008Other
                investment
            
            $
            15,031
            
            
            -
            
            $
            15,031
            
            
            -
            
            $
            (280
            )Total
            
            $
            15,031
            
            
            -
            
            $
            15,031
            
            
            -
            
            $
            (280
            )




There
      were no changes to the Company’s valuation techniques used to measure asset fair
      values on a recurring or nonrecurring basis during the quarter ended March
      31,
      2008 and the Company did not have any financial liabilities as of March 31,
      2008.




3.  INVENTORIES





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





March 31,
            
            December 31,2008
            
            2007Raw
                materials
            
            $
            26,832
            
            $
            24,089Work
                in progress
            
            
            2,837
            
            
            2,434Finished
                goods
            
            
            12,815
            
            
            12,526$
            42,484
            
            $
            39,049




-
          17
          -





4.  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
      (dollars in thousands):





Three Months EndedMarch
                31,2008
            
            2007Total
                segment revenuesNorth
                America
            
            $
            22,991
            
            $
            18,431Asia
            
            
            42,139
            
            
            46,036Europe
            
            
            6,786
            
            
            9,134Total
                segment revenues
            
            
            71,916
            
            
            73,601Reconciling
                items:Intersegment
                revenues
            
            
            (11,047
            )
            
            (11,794
            )Net
                sales
            
            $
            60,869
            
            $
            61,807Income
                from Operations:North
                America
            
            $
            1,097
            
            $
            959Asia
            
            
            841
            
            
            3,157Europe
            
            
            360
            
            
            317$
            2,298
            
            $
            4,433




5. DEBT





Short-term
      debt





During
      the first quarter of 2007, the Company entered into a new unsecured credit
      agreement in the amount of $20 million, which expires on July 21, 2008. There
      have not been any borrowings under the credit agreement and as such, there
      was
      no balance outstanding as of March 31, 2008. At that date, the entire $20
      million line of credit was available to the Company to borrow. The credit
      agreement bears interest at LIBOR plus 0.75% to 1.25% based on certain financial
      statement ratios maintained by the Company.





The
      Company’s Hong Kong subsidiary had an unsecured line of credit of approximately
      $2 million which was unused as of March 31, 2008. The line of credit expires
      July 31, 2008. Any borrowing on the line of credit will be guaranteed by the
      U.S. parent. The line of credit bears interest at a rate determined by the
      bank
      as the financing is extended.





Included
      in interest expense for the three months ended March 31, 2007 is the write-off
      of approximately $0.1 million of previously unamortized deferred financing
      charges in connection with the Company’s prior credit facility.




-
          18
          -





6. INCOME
          TAXES





The
      Company adopted the provisions of FASB Interpretation No. 48, Accounting for
      Uncertainties in Income Taxes (“FIN 48”), on January 1, 2007. Although the
      implementation of FIN 48 did not impact the total amount of the Company’s
      liabilities for uncertain tax positions, which amounted to $12.4 million at
      January 1, 2007, the Company separately recognizes the liability for uncertain
      tax positions on its balance sheet. Included in the liabilities for uncertain
      tax positions at the date of adoption is $1.4 million for interest and
      penalties.





At
      March
      31, 2008 and December 31, 2007, the Company has approximately $9.4 million
      and
      $9.2 million, respectively, of liabilities for uncertain tax positions
      (including interest and penalties). Of these amounts, the current portions
      of
      $2.2 million and $2.3 million are included in income tax payable and the
      noncurrent portions of $7.2 million and $6.9 million are included in liability
      for uncertain tax positions. These liabilities for uncertain tax positions,
      if
      recognized, would reduce the Company’s effective tax rate.





The
      Company and its subsidiaries file income tax returns in the U.S. federal
      jurisdiction and various states and foreign jurisdictions. The Company is no
      longer subject to U.S. federal examinations by tax authorities for years before
      2004 and for state examinations before 2003. Regarding foreign subsidiaries,
      the
      Company is no longer subject to examination by tax authorities for years before
      2000. The Internal Revenue Service (“IRS”) commenced an examination of the
      Company’s U.S. income tax returns for 2004 and reviewed 2003 and 2005 during the
      fourth quarter of 2006. During April 2007, the IRS wrote a preliminary letter
      to
      the Company accepting the tax return as originally filed for 2004.





The
      Company is currently being audited by the State of New Jersey, Department of
      the
      Treasury, Division of Taxation (“New Jersey”) for the years ended December 31,
      2003 through 2006. The State of New Jersey is proposing a tax adjustment for
      the
      years 2003 through 2006 in the amount of $0.2 million. The assessment arises
      from the method the Company utilized to account for home office charges from
      the
      parent company to its related entities. The Company intends to challenge the
      state’s position on this matter. During the quarter ended March 31, 2008, the
      Company accrued the $0.2 million tax assessment.





During
      February 2008, the Company received correspondence from the State of California
      Franchise Tax Board. They requested copies of U.S. federal income tax returns
      for the years 2005 and 2006 for further analysis to determine if the tax returns
      will be selected for audit. To date, the Company has not received any further
      communications from the State of California regarding this matter.





The
      Inland Revenue Department (“IRD”) of Hong Kong commenced an examination of one
      of the Company’s Hong Kong subsidiaries’ income tax returns for the years 2000
      through 2005 and issued a notice of additional assessment during 2007 and demand
      for tax in the amount of $3.8 million. This was paid in May and August 2007.
      There is no interest or penalties in connection with this assessment. The IRD
      proposed certain adjustments to the Company’s offshore income tax claim
      position, with which Company management agreed.




-
          19
          -




Based
      on
      possible outcomes of the examinations mentioned above, or as a result of the
      expiration of the statute of limitations for specific jurisdictions, it is
      reasonably possible that the related unrecognized benefits for tax positions
      taken regarding previously filed tax returns may change materially from those
      recorded as liabilities for uncertain tax positions in the Company’s condensed
      consolidated financial statements at March 31, 2008. Based on the number of
      tax
      years currently under audit by the relevant tax authorities, the Company
      anticipates that several of these audits may be finalized in the next twelve
      months. It is not possible to estimate the effect of changes, if any, that
      will
      be made to previously recorded uncertain tax positions over the next
      year.





The
      Company’s policy is to recognize interest and penalties related to uncertain tax
      positions as a component of the current provision for income taxes. During
      the
      three months ended March 31, 2008 and 2007, the Company recognized approximately
      $0.1 million and $0.1 million, respectively in interest and penalties in the
      Condensed Consolidated Statements of Operations. The Company has approximately
      $1.9 million and $1.8 million accrued for the payment of interest and penalties
      at March 31, 2008 and December 31, 2007, respectively, which is included in
      both
      income taxes payable and liability for uncertain tax positions in the Condensed
      Consolidated Balance Sheets.





7.  ACCRUED
      EXPENSES





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





March 31,
            
            December 31,2008
            
            2007Sales
                commissions
            
            $
            1,576
            
            $
            2,930Subcontracting
                labor
            
            
            2,229
            
            
            1,723Salaries,
                  bonuses and related
                  benefits
            
            
            3,489
            
            
            4,208Other
            
            
            2,555
            
            
            3,252$
            9,849
            
            $
            12,113




8.  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 are made with Company stock purchased in the open market. The
      expense for the three months ended March 31, 2008 and 2007 amounted to
      approximately $0.1 million and $0.2 million, respectively. As of March 31,
      2008,
      the plans owned 17,121 and 146,604 shares of Bel Fuse Inc. Class A and Class
      B
      common stock, respectively.





The
      Company's subsidiaries in Asia 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 must contribute a minimum
      of 5% of eligible salary, as determined by Hong Kong government regulations.
      The
      Company currently contributes 7% of eligible salary, in cash or Company stock. The
      expense for the three months ended March 31, 2008 and 2007 amounted to
      approximately $0.1 million and $0.1 million, respectively. As of March 31,
      2008,
      the plan owned 3,323 and 17,756 shares of Bel Fuse Inc. Class A and Class B
      common stock, respectively.




-
          20
          -




The
      Supplemental Executive Retirement Plan (the "SERP" or the “Plan”) is designed to
      provide a limited group of key management and highly compensated employees
      of
      the Company with supplemental
      retirement and death benefits. Participants
      in the SERP are selected by the Compensation Committee of the Board of
      Directors .
      The
      SERP initially became effective in 2002
      and
      was amended and restated in April 2007 to conform with applicable requirements
      of Section 409A of the Internal Revenue Code and to modify the provisions
      regarding benefits payable in connection with a change in control of the
      Company. The
      Plan
      is unfunded. Benefits under the SERP are payable from the general assets of
      the
      Company, but the Company has certain life insurance policies in effect on
      participants to partially cover the Company’s obligations under the Plan. The
      Plan also allows the Company to establish a grantor trust to provide for the
      payment of Plan benefits.





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




Three Months EndedMarch 31,2008
            
            2007Service
                cost
            
            $
            73
            
            $
            78Interest
                cost
            
            
            76
            
            
            70Amortization
                of adjustments
            
            
            33
            
            
            37Total
                SERP expense
            
            $
            182
            
            $
            185




March 31,
            
            December 31,2008
            
            2007Balance
                sheet amounts:Minimum
                pension obligationand
                unfunded pension liability
            
            
            4,855
            
            
            4,698Accumulated
                other comprehensiveincome
                (loss)
            
            
            (1,154
            )
            
            (1,154
            )




Included
      in other assets at March 31, 2008 and December 31, 2007 are marketable
      securities designated for utilization in accordance with the Company’s SERP plan
      with a cost of approximately $4.6 million and $4.6 million, respectively, and
      an
      estimated fair value of approximately $4.7 million and $4.9 million,
      respectively. Such unrealized net gains are included, net of tax, in accumulated
      other comprehensive income (loss). The
      Company contributed $0.1 million to this investment during the three months
      ended March 31, 2008. No contributions were made to this investment during
      the
      three months ended March 31, 2007.




-
          21
          -




9.
      SHARE-BASED COMPENSATION





On
      January 1, 2006, the Company adopted SFAS No. 123 (R)
      "Share-Based Payment" requiring the recognition of compensation expense in
      the
      Condensed Consolidated Statements of Operations related to the fair value of
      its
      employee stock-based options and awards. SFAS No. 123 (R)
      revises SFAS No. 123 "Accounting for Stock-Based Compensation" and supersedes
      APB Opinion No. 25 "Accounting for Stock Issued to Employees." SFAS No. 123(R)
      is supplemented by SEC Staff Accounting Bulletin ("SAB") No. 107 "Share-Based
      Payment." SAB No. 107 expresses the SEC staff's views regarding the interaction
      between SFAS No. 123(R) and certain SEC rules and regulations including the
      valuation of stock-based payment arrangements.





The
      aggregate pretax compensation cost recognized in net earnings for stock-based
      compensation (including incentive stock options and restricted stock, as further
      discussed below) amounted to approximately $0.3 million and $0.4 million for
      the
      three months ended March 31, 2008 and 2007, respectively .
      The
      Company did not use any cash to settle any equity instruments granted under
      share-based arrangements during the three months ended March 31, 2008 and 2007.





Stock
      Options





The
      Company has an
      equity
      compensation program (the
      " Program ")
      which
      provides for the granting of "Incentive Stock Options" within
      the meaning of Section 422 of the Internal Revenue Code of 1986, as
      amended ,
      non-qualified stock options and restricted stock awards . The
      Company believes that such awards better align the interest of its employees
      with those of its shareholders. The Program provides for the issuance of 2.4
      million common shares. Unless
      otherwise provided at the date of grant or unless subsequently accelerated,
      options granted under the Program  become
      exercisable twenty-five percent (25%) one
      year
      from the date of grant and twenty-five percent (25%) for each year of the three
      years thereafter. Upon exercise the Company will issue new shares. The exercise
      price of  incentive
      stock options
      granted pursuant to the Plan is not to be less than 100 percent of the fair
      market value of the shares on the date of grant. In general,
      no option will be exercisable after ten years
      from the date granted. No stock options were granted during the three months
      ended March 31, 2008 or 2007.




-
          22
          -





Information
      regarding the Company’s stock
      options for the
      three months ended March 31, 2008 is as follows. All of the stock options noted
      below relate to options to purchase shares of the Company’s Class B common
      stock.




WeightedAverageWeighted
            
            Remaining
            
            AggregateAverage
            
            Contractual
            
            IntrinsicOptions
            
            Shares
            
            Exercise
                Price
            
            Term
            
            Value
                (000's)Outstanding
                at January 1, 2008
            
            
            70,000
            
            $
            28.42Granted
            
            
            -Exercised
            
            
            (2,500
            )
            
            18.89Forfeited
                or expired
            
            
            -
            
            
            -Outstanding
                at March 31, 2008
            
            
            67,500
            
            $
            28.78
            
            1.55
                years
            
            $
            130Exercisable
                at March 31, 2008
            
            
            34,000
            
            $
            27.29
            
            1.02
                years
            
            $
            130





During
      the three months ended March 31, 2008 and 2007 the Company received less than
      $0.1 million and $0.5 million, respectively, from the exercise of stock options
      and realized minimal tax benefits during the three months ended March 31, 2008
      and $0.1 million in tax benefits during the three months ended March 31, 2007.
      The total intrinsic value of options exercised during the three months ended
      March 31, 2008 and 2007 was less than $0.1 million and $0.3 million,
      respectively. Stock compensation expense applicable to stock options was minimal
      for the three months ended March 31, 2008 and was approximately $0.1 million
      for
      the three months ended March 31, 2007.





A
      summary
      of the status of the Company's nonvested shares as of December 31, 2007 and
      changes during the three months ended March 31, 2008 is presented
      below:





Weighted-AverageGrant-DateNonvested
                Shares
            
            Shares
            
            Fair ValueNonvested
                at December 31, 2007
            
            
            33,500
            
            $
            30.28Granted
            
            
            -Vested
            
            
            -Forfeited
            
            
            -Nonvested
                at March 31, 2008
            
            
            33,500
            
            $
            30.28




At
      March
      31, 2008, there was less than $0.1 million of total unrecognized cost related
      to
      nonvested incentive stock options arrangements under the  Program .
      The
      cost is expected to be recognized over a weighted average period of 3.75 months.
      Currently, the Company believes that substantially all options will vest.




-
          23
          -





Restricted
      Stock Awards





The
      Company provides common stock awards to certain officers and key employees.
      The
      Company grants these awards, at its discretion, from the shares available under
      the Program.
      Unless otherwise provided at the date of grant or unless subsequently
      accelerated, the shares
      awarded are earned in 25% increments on the second,
      third, fourth and fifth anniversaries of the award ,
      respectively, and are distributed provided the employee has remained employed
      by
      the Company through such anniversary dates; otherwise the unearned shares are
      forfeited. The market value of these shares at the date of award is recorded
      as
      compensation expense on the straight-line method over the five  year
      periods from the respective award dates, as adjusted for forfeitures of unvested
      awards. No common stock awards were granted by the Company during the three
      months ended March 31, 2008 or 2007. In connection with awards granted in prior
      years, the Company recorded pre-tax compensation expense of $0.2 million and
      $0.3 million for the three months ended March 31, 2008 and 2007, respectively.





A
      summary
      of the activity under the Restricted Stock Awards Plan as of March 31, 2008
      is
      presented below:




WeightedWeighted
            
            AverageAverage
            
            RemainingRestricted
                Stock
            
            
            
            Award
            
            ContractualAwards
            
            Shares
            
            Price
            
            TermOutstanding
                at January 1, 2008
            
            
            195,400
            
            $
            35.31
            
            3.43
                yearsGranted
            
            
            -Vested
            
            
            -Forfeited
            
            
            (3,850
            )
            $
            33.98Outstanding
                at March 31, 2008
            
            
            191,550
            
            $
            35.33
            
            3.18
                years




As
      of
      March 31, 2008, there was $4.6 million of total pre-tax unrecognized
      compensation cost included within additional paid-in-capital related to
      non-vested stock based compensation arrangements granted under the restricted
      stock award plan; that cost is expected to be recognized over a period of 4.1
      years. The
      Company's policy is to issue new shares to satisfy Restricted Stock Awards
      and
      incentive stock option exercises. In calculating the stock-based compensation
      expense related to stock awards, the Company has estimated that 5% of the
      outstanding unvested stock awards will forfeit each year related to employee
      attrition.




-
          24
          -





10.
      COMMON STOCK





During
      2000, the Board of Directors of the Company authorized the purchase of up to
      ten
      percent of the Company’s outstanding common shares. As of March 31, 2008, the
      Company had purchased and retired 23,600 Class B common shares at a cost of
      approximately $0.8 million and had purchased and retired 172,240 Class A common
      shares at a cost of approximately $6.1 million. No shares of Class B common
      stock were repurchased during the three months ended March 31, 2008 and 12,207
      shares of Class A common stock were repurchased during the three months ended
      March 31, 2008 at a cost of $0.4 million.





There
      are
      no contractual restrictions on the Company's ability to pay dividends provided
      the Company is not in default immediately before such payment and after giving
      effect to such payment. On February 1, 2008, the Company paid a $0.07 per share
      dividend to all shareholders of record of Class B Common Stock in the total
      amount of $0.6 million and a $0.06 per share dividend to all shareholders of
      record of Class A Common Stock in the total amount of $0.2 million.





11.
      COMPREHENSIVE INCOME




Comprehensive
      income for the three months ended March 31, 2008 and 2007 consists of the
      following (dollars in thousands):




Three Months EndedMarch 31,2008
            
            2007Net
                earnings
            
            $
            2,167
            
            $
            4,009Currency
                translation adjustment
            
            
            719
            
            
            358Increase
                  (decrease) in unrealizedgain
                on marketable securities-
                net of taxes
            
            
            2,894
            
            
            4,296Comprehensive
                income
            
            $
            5,780
            
            $
            8,663




12.
      SALE
      OF PROPERTY





During
      May 2007, the Company sold a parcel of land located in Jersey City, New Jersey
      for $6.0 million. The Company had previously estimated that approximately $0.8
      million of the proceeds would be payable to the State of New Jersey, as a
      portion of the property is subject to tideland claims. In December 2007, the
      Tidelands Resource Council voted to approve the Bureau of Tideland’s
      Management’s recommendation for a Statement of No Interest. On March 14, 2008,
      the Commissioner of the Department of Environmental Protection signed a letter
      to approve the Statement of No Interest. As final approval of the Statement
      of
      No Interest is still pending, the Company has continued to defer the estimated
      gain on sale of the land, in the amount of $4.6 million. Of the $6.0 million
      sales price, the Company received cash of $1.5 million before closing costs,
      and
      $4.6 million (including interest) is being held in escrow pending final
      resolution of the State of New Jersey tideland claim and certain environmental
      costs the Company is liable for in the maximum amount of $0.4 million. The
      Company anticipates resolution of this sale, release of the escrow and
      corresponding guarantees and recognition of the gain by the end of fiscal 2008.
      As the timing of the release of the escrow of $4.6 million is not under the
      Company’s control, it has been classified in non-current assets as restricted
      cash and the deferred gain of $4.6 million has been classified in deferred
      gain
      on the sale of property in the Condensed Consolidated Balance Sheet as of March
      31, 2008.




-
          25
          -




13.  NEW
      FINANCIAL ACCOUNTING STANDARDS





In
      September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
      No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines
      fair value, establishes a framework for measuring fair value in generally
      accepted accounting principles and expands disclosures about fair value
      measurements. SFAS 157 was effective for the Company’s financial assets and
      liabilities on January 1, 2008. The FASB approved a one-year deferral of the
      adoption of SFAS 157 as it relates to non-financial assets and liabilities
      with the issuance in February 2008 of FASB Staff Position FAS 157-2,  “Effective
      Date of FASB Statement No. 157”, as a result of which implementation by the
      Company is now required on January 1, 2009. The partial adoption of
      SFAS 157 in the quarter ended March 31, 2008 had no material impact on
      the financial condition, results of operations or cash flows of the Company,
      but
      resulted in certain additional disclosures reflected in Note 2.





In
      February 2007, the FASB issued SFAS No. 159 (“SFAS 159”) “The Fair Value Option
      for Financial Assets and Financial Liabilities”, providing companies with an
      option to report selected financial assets and liabilities at fair value. The
      Standard’s objective is to reduce both complexity in accounting for financial
      instruments and the volatility in earnings caused by measuring related assets
      and liabilities differently. It also requires entities to display the fair
      value
      of those assets and liabilities for which the Company has chosen to use fair
      value on the face of the balance sheet. The adoption of SFAS 159 on January
      1,
      2008 did not impact the Company’s condensed consolidated financial
      statements.





In
      June
      2007, the FASB issued EITF Issue No. 07-3, "Accounting for Nonrefundable Advance
      Payments for Goods or Services Received for Use in Future Research and
      Development Activities". The Task Force concluded that nonrefundable advance
      payments for goods or services that will be used or rendered for future research
      and development activities should be deferred and capitalized. Such amounts
      should be recognized as an expense as the related goods are delivered or the
      services are performed, or when the goods or services are no longer expected
      to
      be provided. The
      adoption of the guidance under EITF Issue No. 07-3 on January 1, 2008 did not
      impact the Company’s condensed consolidated financial statements.





In
      December 2007, the FASB issued SFAS 141(R), which replaces SFAS 141 “Business
      Combinations”. This Statement is intended to improve the relevance, completeness
      and representational faithfulness of the information provided in financial
      reports about the assets acquired and the liabilities assumed in a business
      combination. This Statement requires an acquirer to recognize the assets
      acquired, the liabilities assumed, and any noncontrolling interest in the
      acquiree at the acquisition date, measured at their fair values as of that
      date,
      with limited exceptions specified in the Statement. Under SFAS 141(R),
      acquisition-related costs, including restructuring costs, must be recognized
      separately from the acquisition and will generally be expensed as incurred.
      That
      replaces SFAS 141’s cost-allocation process, which required the cost of an
      acquisition to be allocated to the individual assets acquired and liabilities
      assumed based on their estimated fair values. SFAS 141(R) shall be applied
      prospectively to business combinations for which the acquisition date is on
      or
      after the beginning of the first annual report period beginning on or after
      December 15, 2008. The Company will implement this Statement in
      2009.




-
          26
          -




In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements – an amendment of ARB No. 51” (“SFAS No.
      160”). SFAS No. 160 amends Accounting Research Bulletin (“ARB”) No. 51 to
      establish accounting and reporting standards for the noncontrolling (minority)
      interest in a subsidiary and for the deconsolidation of a subsidiary. It
      clarifies that a noncontrolling interest in a subsidiary is an ownership
      interest in the consolidated entity that should be reported as equity in the
      Consolidated Financial Statements. SFAS No. 160 also requires consolidated
      net
      income to be reported at amounts that include the amounts attributable to both
      the parent and the noncontrolling interest on the face of the consolidated
      statement of income. Under SFAS No. 160, the accounting for changes in a
      parent’s ownership interest in a subsidiary that do not result in
      deconsolidation must be accounted for as equity transactions for the difference
      between the parent’s carrying value and the cash exchanged in the transaction.
      In addition, SFAS No. 160 also requires that a parent recognize a gain or loss
      in net income when a subsidiary is deconsolidated (except in the case of a
      spin-off), and requires expanded disclosure in the Consolidated Financial
      Statements that clearly identify and distinguish between the interests of the
      parent’s ownership interest and the interests of the noncontrolling owners of a
      subsidiary. This Statement is effective for fiscal years, and interim periods
      within those fiscal years, beginning on or after December 15, 2008. The Company
      will adopt SFAS No. 160 on January 1, 2009, as required, and is currently
      evaluating the impact of such adoption on its financial statements.





In
      March
      2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
      and Hedging Activities”, an amendment of FASB Statement No. 133 (“SFAS No.
      161”). The new standard is intended to improve financial reporting about
      derivative instruments and hedging activities by requiring enhanced disclosures
      to enable investors to better understand their effects on an entity’s financial
      position, financial performance and cash flows. It is effective for financial
      statements issued for fiscal years and interim periods beginning after November
      15, 2008. The Company does not believe that SFAS No. 161 will have a material
      impact on its financial statements.




14.  LEGAL
      PROCEEDINGS





The
      Company is a defendant in a lawsuit captioned Synqor, Inc. v. Artesyn
      Technologies, Inc., Astec America, Inc., Emerson Network Power, Inc., Emerson
      Electric Co., Bel Fuse Inc., Cherokee International Corp., Delta Electronics,
      Inc., Delta Products Corp., Murata Electronics North America, Inc., Murata
      Manufacturing Co., Ltd., Power-One, Inc., Tyco Electronics Corp. and Tyco
      Electronics Ltd. brought in the United States District Court, Eastern District
      of Texas in November 2007. With respect to its claims against the Company,
      the
      Plaintiff claims that the Company infringed its patents covering certain power
      products. Synqor is seeking unspecified damages against the Company. The Company
      filed an Answer to Synqor’s complaint, denying the allegations of infringement
      and asserting invalidity of the patents.




-
          27
          -




The
      Company is a defendant in a lawsuit captioned Halo Electronics, Inc. (“Halo”) v.
      Bel Fuse Inc., Pulse Engineering, Inc. and Technitrol, Inc. brought in Nevada
      Federal District Court. Plaintiff claims that the Company has infringed its
      patents covering certain surface mount discrete magnetic products made by the
      Company. Halo is seeking unspecified damages, which it claims should be trebled.
      In December 2007, this case was dismissed by the Nevada Federal District Court
      for lack of personal jurisdiction. Halo then re-filed this suit in the Northern
      California Federal District Court, captioned Halo Electronics, Inc. v. Bel
      Fuse
      Inc., Elec & Eltek (USA) Corporation, Wurth Electronics Midcom, Inc., and
      Xfmrs, Inc.





The
      Company is a plaintiff in a lawsuit captioned Bel Fuse Inc. v. Halo Electronics,
      Inc. brought in the United States District Court of New Jersey during May 2007.
      The Company claims that Halo has infringed a patent covering certain integrated
      connector modules made by Halo. The Company is seeking unspecified damages
      plus
      interest, costs and attorney fees.





The
      Company and two of its officers were defendants in a wrongful termination
      lawsuit brought in the District Court of Frankfurt am Main, Germany by a former
      employee at a foreign subsidiary of the Company. During July 2007, this lawsuit
      was settled for approximately $0.5 million. The Company had provided for this
      liability in its financial statements prior to the settlement.





The
      Company is a plaintiff in a lawsuit captioned Bel Fuse Inc. and Bel Power,
      Inc.
      v. Andrew Ferencz, Gregory Zvonar, Bernhard Schroter, EE2GO, Inc., Howard E.
      Kaepplein and William Ng, brought in the Superior Court of the Commonwealth
      of
      Massachusetts. The Company was granted injunctive relief and is seeking damages
      against the former stockholders of Galaxy Power, Inc., key employees of Galaxy
      and a corporation formed by some or all of the individual defendants. The
      Company has alleged that the defendants violated their written non-competition,
      non-disclosure and non-solicitation agreements, diverted business and usurped
      substantial business opportunities with key customers, misappropriated
      confidential information and trade secrets, and harmed the Company’s business.





In
      a
      related matter, the Company is a defendant in a lawsuit captioned Robert
      Chimielnski, P.C. on behalf of the stockholder representatives and the former
      stockholders of Galaxy Power, Inc. v. Bel Fuse Inc. et al. brought in the
      Superior Court of the Commonwealth of Massachusetts. This complaint for damages
      and injunctive relief is based on an alleged breach of contract and other
      allegedly illegal acts in a corporate context arising out of the Company’s
      objection to the release of nearly $2.0 million held in escrow under the terms
      of the stock purchase agreement between Galaxy and the Company.





The
      Company is a defendant in a lawsuit captioned Murata Manufacturing Company,
      Ltd.
      v. Bel Fuse Inc. et al, brought in the United States District Court, Northern
      District of Illinois. 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 $0.5 million; 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., 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 $0.5 million 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
      dismissing the Company's invalidity counterclaim against Regal Electronics.
      Regal has appealed the Court's rejection of its infringement claims to the
      U.S.
      Court of Appeals. The case was heard on February 6, 2007 and the U.S. Court
      of
      Appeals upheld the District Court’s ruling in favor of the Company.




-
          28
          -




The
      Company cannot predict the outcome of the unresolved matters; however,
      management believes that the ultimate resolution of these matters will not
      have
      a material impact on the Company's consolidated financial condition or results
      of operations. As of March 31, 2008, no amounts have been accrued in connection
      with these lawsuits, as the amounts are not determinable.




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





15.  ACCUMULATED
      OTHER COMPREHENSIVE INCOME (LOSS)





The
      components of accumulated other comprehensive income (loss) as of March 31,
      2008
      and December 31, 2007 are summarized below (dollars in thousands):





March 31,
            
            December 31,2008
            
            2007Foreign
                currency translation adjustment
            
            $
            2,820
            
            $
            2,101Unrealized
                holding gain (loss) on available-for-salesecurities
                under SFAS No. 115, net of taxes of$985
                    and $(789) as of March 31, 2008 and December 31,
                    2007
            
            
            1,603
            
            
            (1,291
            )Unfunded
                SERP liability, net of taxes of ($483)as
                of March 31, 2008 and December 31, 2007
            
            
            (1,154
            )
            
            (1,154
            )Accumulated
                other comprehensive income (loss)
            
            $
            3,269
            
            $
            (344
            )





-
          29
          -





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, 2007. As a result of these
      and other factors, the Company may experience material fluctuations in future
      operating results on a quarterly or annual basis, which could materially and
      adversely affect its business, financial condition, operating results, and
      stock
      prices. Furthermore, this document and other documents filed by the Company
      with
      the Securities and Exchange Commission (the “SEC”) contain certain
      forward-looking statements under the Private Securities Litigation Reform Act
      of
      1995 (“Forward-Looking Statements”) with respect to the business of the Company.
      These Forward-Looking Statements are subject to certain risks and uncertainties,
      including those detailed in Item 1A of the Company’s Annual Report on Form 10-K
      for the year ended December 31, 2007, 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.




The
      Company’s revenues are primarily driven by the designs of its products for
      customer applications and by working closely with its customers’ engineering
      staffs and aligning them with industry standards committees and various
      integrated circuit (IC) manufacturers.





The
      Company’s expenses are driven principally by the cost of labor where Bel’s
      factories are located and the cost of the materials that it uses. Since
      the
      conclusion of Chinese New Year holiday in early February, the Company hired
      approximately 3,500 employees to meet a 40% increase in its Magnetics product
      backlog. The Company will need to hire an additional 1,500 workers to bring
      its
      backlog down to normal lead times. As a result of the considerable number of
      new
      hires, the Company experienced a significant reduction in productivity levels
      while new workers became familiar with our methods of production. In addition,
      People’s Republic of China (“PRC”) officials announced an increase in wage rates
      to be effective April 1, 2008 in the areas where our products are manufactured.
      In order to attract new workers, and encourage existing workers to return to
      work after returning home for the Chinese New Year, the Company needed to effect
      an early implementation of those higher wage rates during the first quarter
      of
      2008. Additionally, the U.S. dollar continued to fall in value against the
      PRC
      yuan in which all PRC factory workers are paid. With
      regard to material costs, the increasing cost of gold, copper, solder wire
      and
      tantalum capacitors have had a significant impact on the Company’s overall cost
      of sales .
      The
      weakening of the U.S. dollar relative to the PRC yuan also exacerbated the
      increase in material costs.




-
          30
          -




The
      Company’s sales decreased by $0.9 million or 1.5% during the three months ended
      March 31, 2008 as compared to the same period in 2007. The decrease in sales
      is
      primarily due to a decrease in the Company’s ICM sales of $5.8 million from the
      first quarter of 2007 to the first quarter of 2008 as a result of the production
      inefficiencies in the PRC referred to above, which inhibited the Company’s
      ability to ship product and resulted in an increase in backlog. These factors
      were offset in part by an increase in power products revenue by $3.8 million
      and
      an increase in interconnect products revenue by $1.0 million during the first
      quarter of 2008 as compared with the same period in 2007. Certain of the power
      products went into production at the end of the first quarter of 2007, as
      compared to a full quarter of revenue stream associated with these new products
      in 2008.





Gross
      profit margins were lower during the three months ended March 31, 2008 compared
      to the same period in 2007 by $2.7 million. Approximately $1.6 million of this
      decrease in margin relates to increased labor costs associated with Bel’s ICM
      revenue. As a percentage of revenue, the labor costs on this product line
      increased from 16.7% during the first quarter of 2007 to 25.3% during the first
      quarter of 2008. In addition, sales of the Company’s power products increased by
      $3.8 million in the first quarter of 2008 as compared to the first quarter
      of
      2007. While
      these products are strategic to Bel’s growth and important to total earnings,
      they return lower gross profit percentage margins as a larger percentage of
      their bills of material are purchased components. As these sales continue to
      increase, the Company’s average gross profit percentage will likely decrease
      unless offset by increased sales of higher margin products. Other product lines
      have also experienced a reduction in margin as a result of the increasing cost
      of materials such as gold, copper, solder wire and tantalum
      capacitors.




Critical
      Accounting Policies





The
      Company’s discussion and analysis of its financial condition and results of
      operations are based upon the Company’s condensed consolidated financial
      statements, which have been prepared in accordance with accounting principles
      generally accepted in the United States of America. The preparation of these
      financial statements requires the Company to make estimates and judgments that
      affect the reported amounts of assets, liabilities, revenues and expenses,
      and
      related disclosure of contingent assets and liabilities. On an on-going basis,
      the Company evaluates its estimates, including those related to product returns,
      bad debts, inventories, intangible assets, investments, SERP expense, income
      taxes and contingencies and litigation. The Company bases its estimates on
      historical experience and on various other assumptions that are believed to
      be
      reasonable under the circumstances, the results of which form the basis for
      making judgments about the carrying values of assets and liabilities that are
      not readily apparent from other sources. Actual results may differ from these
      estimates under different assumptions or conditions. For a discussion of the
      Company’s critical accounting policies, see the Company’s Annual Report on Form
      10-K for 2007.





-
          31
          -




Results
      of Operations





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


Percentage of Net SalesThree Months EndedMarch 31,2008
            
            2007Net
                sales
            
            
            100.0
            %
            
            100.0
            %Cost
                of sales
            
            
            81.5
            
            
            77.5Selling,
                general andadministrative
                expenses
            
            
            14.7
            
            
            15.3Realized
                loss/impairment charge oninvestment
            
            
            (0.5
            )
            
            -Interest
                income, net of interestand
                financing expense
            
            
            1.5
            
            
            1.1Earnings
                before provisionfor
                income taxes
            
            
            4.8
            
            
            8.3Income
                tax provision
            
            
            1.3
            
            
            1.8Net
                earnings
            
            
            3.6
            
            
            6.5




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





Increase (decrease) fromPrior PeriodThree Months EndedMarch 31, 2008Compared withThree Months EndedMarch 31, 2007Net
                sales
            
            
            (1.5)
            %Cost
                of sales
            
            
            3.6Selling,
                general andadministrative
                expenses
            
            
            (5.8
            )Net
                earnings
            
            
            (45.9
            )




-
          32
          -





**THREE
      MONTHS ENDED MARCH 31, 2008 VERSUS**


**THREE
      MONTHS ENDED MARCH 31, 2007**





Sales





Net
      sales
      decreased 1.5% from $61.8 million during the three months ended March 31, 2007
      to $60.9 million during the three months ended March 31, 2008. The Company
      attributes the decrease to a decrease in magnetic sales of $6.6 million, and
      a
      decrease in circuit protection sales of $0.3 million offset in part by an
      increase in module sales of $5.1 million and an increase in interconnect sales
      of $0.9 million. The decrease in magnetic sales is primarily due to a decrease
      in the Company’s ICM sales of $5.8 million from the first quarter of 2007 to the
      first quarter of 2008 as a result of production inefficiencies in the PRC
      referred to above. The partially offsetting increase in module sales includes
      $3.8 million of additional power products revenue during the first quarter
      of
      2008 as compared with the same period in 2007. Certain of the power products
      went into production at the end of the first quarter of 2007, as compared to
      a
      full quarter of revenue stream associated with these new products in 2008.
      The
      increase in module sales was constrained by production inefficiencies associated
      with increased demand.





The
      significant components of the Company's revenues for the three months ended
      March 31, 2008 were magnetic products of $25.0 million (as compared with $31.6
      million during the three months ended March 31, 2007), interconnect products
      of
      $12.0 million (as compared with $11.1 million during the three months ended
      March 31, 2007), module products of $19.9 million (as compared with $14.8
      million during the three months ended March 31, 2007), and circuit protection
      products of $4.0 million (as compared with $4.3 million during the three months
      ended March 31, 2007).





Cost
      of Sales





Cost
      of
      sales as a percentage of net sales increased from 77.5% during the three months
      ended March 31, 2007 to 81.5% during the three months ended March 31, 2008.
      The
      increase in the cost of sales percentage is primarily attributable to the
      following:





 ̈
            The
                Company is currently paying higher wage rates and benefits to its
                production workers in China. These higher rates and benefits are
                reflected
                in the Company’s cost of sales and result from new labor regulations and a
                continuing tightening of the labor market. In addition, the foreign
                exchange impact of the weakened U.S. dollar has contributed to the
                rising
                cost of labor in China.





 ̈
            The
                Company incurred a 2.4% increase in material costs as a percentage
                of net
                sales. The increase in raw material costs is principally related
                to
                increased costs for raw materials such as gold, copper, solder wire
                and
                tantalum capacitors. In addition, the shift in product mix has lead
                to
                increased manufacturing of value-added products, which have a higher
                raw
                material content than the Company’s other products. Since the majority of
                the manufacturing is conducted in Asia, the increased material costs
                negatively impact the Company’s operating profits in
                Asia.




-
          33
          -




 ̈
            Sales
                of the Company’s DC-DC power products have increased. While these products
                are strategic to Bel’s growth and important to total earnings, they return
                lower gross profit percentage margins as a larger percentage of their
                bills of materials are purchased components. As these sales continue
                to
                increase, the Company’s average gross profit percentage will likely
                decrease.





 ̈
            These
                increases in cost of sales were partially offset by a reversal of
                $0.4
                million of a warranty accrual established during 2007 for a defective
                part, as actual returns were lower than anticipated.




Included
      in cost of sales are research and development expenses of $2.0 million and
      $1.7
      million for the three months ended March 31, 2008 and 2007, respectively.





Selling,
      General and Administrative Expenses





The
      percentage relationship of selling, general and administrative expenses to
      net
      sales decreased from 15.3% during the three months ended March 31, 2007 to
      14.7%
      during the three months ended March 31, 2008. The decrease in the dollar amount
      of selling, general and administrative expense for the three months ended March
      31, 2008 compared to the three months ended March 31, 2007 was approximately
      $0.6 million. The dollar decrease is principally attributed to the
      following:





 ̈
            Legal
                and professional fees decreased by $0.5 million from the first quarter
                of
                2007 principally due to the implementation of an internal audit and
                SOX
                function which reduced audit and external consultant fees
                significantly.





 ̈
            Other
                general and administrative costs decreased by $0.3 million during
                the
                first quarter of 2008 as compared to the first quarter of 2007. The
                Company did not accrue any additional discretionary bonuses during
                the
                first quarter of 2008 as a result of lower profitability this quarter.
                In
                addition, the Company recorded a $0.1 million reduction of stock-based
                compensation expense related to forfeitures of the restricted stock
                awards. There were additional reductions in other general and
                administrative costs that were not individually
                significant.





Offsetting
      these factors in part, bad debt expense increased by $0.2 million during the
      first quarter of 2008 as compared to the same period of 2007. This increase
      resulted from a specific reserve on a large account in Germany that was recorded
      during the first quarter of 2008.





Interest
      Income





Interest
      income earned on cash and cash equivalents increased by approximately $0.1
      million during the three months ended March 31, 2008, as compared to the
      comparable period in 2007. The increase is due primarily to increased average
      balances of cash and cash equivalent balances, partially offset by lower
      interest rates earned on invested balances.




-
          34
          -





Realized
      Loss/Impairment Charge on Investment





During
      the three months ended March 31, 2008, the Company recorded an
      other-than-temporary impairment charge of $0.3 million related to its investment
      in the Columbia Strategic Cash Portfolio. See “Liquidity and Capital Resources”
for further discussion.





Provision
      for Income Taxes





The
      provision for income taxes for the three months ended March 31, 2008 was $0.8
      million compared to a $1.1 million provision for the three months ended March
      31, 2007. The Company's earnings before income taxes for the three months ended
      March 31, 2008 are approximately $2.2 million lower than the same period in
      2007. The Company’s effective tax rate, the income tax provision as a percentage
      of earnings before provision for income taxes, was 26.1% and 22.1% for the
      three
      months ended March 31, 2008 and March 31, 2007, respectively. The increase
      is
      principally related to an increase in the provision related to the State of
      New
      Jersey tax assessment in the amount of $0.2 million during the quarter ended
      March 31, 2008 and higher U.S. taxable income to total pretax income during
      the
      quarter ended March 31, 2008 compared with March 31, 2007.




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 Macao Pataca or the Chinese Renminbi.
      However, the Chinese Renminbi has appreciated in value significantly
      (approximately 7.6%) during the first quarter of 2008 as compared to the same
      period of 2007. Further
      appreciation of the Renminbi would result in the Company’s incurring higher
      costs for all expenses incurred in the PRC. Commencing with the Company’s
      acquisition of its Passive Components Group in 2005, 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 unrealized
      exchange gains of $0.7 million and $0.4 million for the three months ended
      March
      31, 2008 and March 31, 2007, respectively, relating
      to the translation of foreign subsidiary financial statements which are included
      in accumulated other comprehensive income. Realized currency gains (losses)
      during the three months ended March 31, 2008 and March 31, 2007 were not
      material. Any change in the linkage of the U.S. Dollar and the Hong Kong Dollar
      or the Macao Pataca could have a material effect on the Company's consolidated
      financial position or results of operations.




-
          35
          -





Liquidity
      and Capital Resources





Historically,
      the Company has financed its capital expenditures primarily through cash flows
      from operating activities and has
      financed acquisitions both through cash flows from operating activities and
      borrowings . Management believes that the cash flow from operations after payments of
      dividends combined with its existing capital base and the Company's available
      lines of credit, will be sufficient to fund its operations for at least the
      next
      twelve months. Such statement constitutes a Forward Looking Statement. Factors
      which could cause the Company to require additional capital include, among
      other
      things, a softening in the demand for the Company’s existing products, an
      inability to respond to customer demand for new products, potential acquisitions
      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 on
      affordable terms or otherwise .





During
      February 2007, the Company entered into a new unsecured credit agreement in
      the
      amount of $20 million, which expires on July 21, 2008. There was no balance
      outstanding as of March 31, 2008. At that date, the entire $20 million line
      of
      credit was available to the Company to borrow. The loan bears interest at LIBOR
      plus 0.75% to 1.25% based on certain financial statement ratios maintained
      by
      the Company.





The
      Company's Hong Kong subsidiary had an unsecured line of credit of approximately
      $2 million ,
      which
      was unused at March 31, 2008. The
      line
      of credit expires during July 2008. Borrowing on the line of credit was
      guaranteed by the U.S. parent. The line of credit bears interest at a rate
      determined by the bank as the financing is extended.





For
      information regarding further commitments under the Company's operating leases,
      see Note 15 of Notes to the Company's Consolidated Financial Statements in
      the
      Company's 2007 Annual Report on Form 10-K.





During
      May 2007, the Company sold a parcel of land located in Jersey City, New Jersey
      for $6.0 million. The Company had previously estimated that approximately $0.8
      million of the proceeds would be payable to the State of New Jersey as a portion
      of the property is subject to tideland claims. In December 2007, the Tidelands
      Resource Council voted to approve the Bureau of Tideland’s Management’s
      recommendation for a Statement of No Interest. On March 14, 2008, the
      Commissioner of the Department of Environmental Protection signed a letter
      to
      approve the Statement of No Interest. As final approval of the Statement of
      No
      Interest is still pending, the Company has continued to defer the estimated
      gain
      on sale of the land, in the amount of $4.6 million. Of the $6.0 million sales
      price, the Company received cash of $1.5 million before closing costs, and
      $4.6
      million (including interest) is being held in escrow pending final resolution
      of
      the State of New Jersey tideland claim and certain environmental costs the
      Company is liable for in the maximum amount of $0.4 million. The Company
      anticipates resolution of this sale, release of the escrow and corresponding
      guarantees and recognition of the gain by the end of fiscal 2008. As the timing
      of the release of the escrow of $4.6 million is not under the Company’s control,
      it has been classified in non-current assets as restricted cash and the deferred
      gain of $4.6 million has been classified in deferred gain on the sale of
      property in the Condensed Consolidated Balance Sheet as of March 31, 2008.




-
          36
          -




At
      March
      31, 2008, the Company has an investment consisting of a private placement of
      units of beneficial interest in the Columbia Strategic Cash Portfolio (the
      “Columbia Portfolio”), which is an enhanced cash fund sold as an alternative to
      money-market funds. Since June 2007, the Company has invested a portion of
      its
      cash balances on hand in this fund. During the second and third quarters of
      2007, the amounts were appropriately classified as cash equivalents in the
      consolidated balance sheet, as the fund was considered both short-term and
      highly liquid in nature. These investments are subject to credit, liquidity,
      market and interest rate risk. For example, the Columbia Portfolio includes
      investments in certain asset backed securities and structured investment
      vehicles that are collateralized by sub-prime mortgage securities or related
      to
      mortgage securities, among other assets. As a result of adverse market
      conditions that have unfavorably affected the fair value and liquidity
      availability of collateral underlying the Columbia Portfolio, the Columbia
      Portfolio was overwhelmed with withdrawal requests from investors and it was
      closed with a restriction placed upon the cash redemption ability of its holders
      in the fourth quarter of 2007. At
      that
      time, the Company had $25.7 million invested in this fund, including $0.7
      million of reinvested interest. As
      such,
      the Company redesignated the Columbia Portfolio units from cash equivalents
      to
      short-term investments or long-term investments based upon the liquidation
      schedule provided by the fund.





The
      Company deemed a portion of its carrying value in the Columbia Portfolio to
      be
      other-than-temporarily impaired at December 31, 2007. Accordingly, the Company
      wrote down the carrying value of the investments to their then current market
      value at December 31, 2007 and the reduction in value of $0.3 million was
      recorded as an impairment charge during the fourth quarter of 2007. The net
      asset value of these investments continued to decline throughout the first
      quarter to an NAV of $.9701 at March 31, 2008 and, accordingly, the Company
      recorded an additional impairment charge of $0.3 million during the first
      quarter of 2008. This is included in the accompanying Condensed Consolidated
      Statement of Operations for the three months ended March 31, 2008. As of March
      31, 2008, the Company has received total cash redemptions to-date of $10.1
      million (including $7.8 million in the three months ended March 31, 2008) at
      a
      weighted-average net asset value of $.9863 per unit. The additional realized
      losses associated with these redemptions were minimal. Information and the
      markets relating to these investments remain dynamic, and there may be further
      declines in the value of these investments, the value of the collateral held
      by
      these entities, and the liquidity of the Company’s investments. To the extent
      that the Company determines that there is a further decline in fair value,
      the
      Company may recognize additional impairment charges in future periods up to
      the
      aggregate amount of these investments.




-
          37
          -




As
      of
      March 31, 2008, the Company owned a total of 1,840,919 shares, or approximately
      1.9% of the
      outstanding shares ,
      of the
      common stock of Toko, Inc. (“Toko”) at a total cost of $5.6 million. Toko had a
      market capitalization of approximately $225.3 million as of March 31, 2008.
      These shares are reflected on the Company’s condensed consolidated balance
      sheets as marketable securities. These marketable securities are considered
      to
      be available for sale under SFAS No. 115, “Accounting for Certain Investments in
      Debt and Equity Securities”. Thus, as of March 31, 2008, the Company has
      recorded an unrealized loss, net of income tax benefit, of approximately $0.9
      million which is included in accumulated other comprehensive income in
      stockholders’ equity. The Company’s investment in Toko has been in an unrealized
      loss position for approximately twelve months. In accordance with FSP 115-1,
      the
      Company periodically reviews its marketable securities and determines whether
      the investments are other-than-temporarily impaired. The Company reviewed
      various factors in making its determination, including volatility of the Toko
      share price over the last year, Toko’s recent financial results and the
      Company’s intention and ability to hold the investment. The Toko share price has
      been extremely volatile over the last year, ranging from $1.22 - $4.20 (the
      Company’s cost basis in its remaining shares of Toko stock is $3.07 per share).
      In the second quarter of 2007, a gain was recognized on the disposition of
      a
      majority of the Company’s holdings of Toko stock. In addition, the Company’s
      unrealized loss, net of tax benefit, improved from $1.4 million at December
      31,
      2007 to $0.9 million at March 31, 2008, as the Toko share price increased from
      $1.77 at December 31, 2007 to $2.31 at March 31, 2008. The Company has the
      intention and the ability to hold the investment until it is in a gain position.
      As a result of these factors, management believes that the investment in Toko
      is
      not other-than-temporarily impaired at March 31, 2008.





On
      February 25, 2008, the Company announced that it had acquired 4,370,052 shares
      of Power-One, Inc. (“Power-One”) common stock representing, to the Company’s
      knowledge, 5% of Power-One’s outstanding common stock, at a total purchase price
      of $10.1 million. Power-One’s common stock is quoted on the NASDAQ Global
      Market. Power-One is a designer and manufacturer of power conversion and power
      management products. As
      of
      March 31, 2008, the Company has recorded an unrealized gain, net of income
      tax,
      of approximately $2.4 million which is included in accumulated other
      comprehensive income in stockholders’ equity.




During
      2000, the Board of Directors of the Company authorized the purchase of up to
      ten
      percent of the Company’s outstanding common shares. As of March 31, 2008, the
      Company had purchased and retired 23,600 Class B common shares at a cost of
      approximately $0.8 million and had purchased and retired 172,240 Class A common
      shares at a cost of approximately $6.1 million. No shares of Class B common
      stock were repurchased during the three months ended March 31, 2008 and 12,207
      shares of Class A common stock were repurchased during the three months ended
      March 31, 2008 at a cost of $0.4 million.





During
      the three months ended March 31, 2008, the Company's cash and cash equivalents
      increased by $5.0 million, reflecting approximately $10.0 million provided
      by
      operating activities (principally as a result of net income of $2.2 million,
      depreciation and amortization expense of $1.8 million and a $5.8 million
      increase in operating assets and liabilities), $7.8 million from the partial
      redemption of the Columbia Portfolio offset, in part, by $10.1 million used
      for
      purchases of marketable securities, $1.7 million for the purchase of property,
      plant and equipment, $0.4 million for the repurchase of the Company’s common
      stock and $0.8 million for payments of dividends.





Cash
      and
      cash equivalents, marketable securities, short-term investments and accounts
      receivable comprised approximately 52.4% and 52.7% of the
      Company's total assets at March 31, 2008 and December 31, 2007, respectively.
      The Company's current ratio (i.e., the ratio of current assets to current
      liabilities) was 6.4 to 1 and 5.5 to 1 at March 31, 2008 and December 31, 2007,
      respectively.




-
          38
          -




The
      following table sets forth at March 31, 2008 the amounts of payments due under
      specific types of contractual obligations, aggregated by category of contractual
      obligation, for the time periods described below. This table excludes
      liabilities recorded relative to uncertain income tax positions under FIN 48,
      amounting to $2.2 million included in income taxes payable and $7.2 million
      included in liability for uncertain tax positions, as of March 31, 2008, due
      to
      the uncertain timing of the resolution of such matters.





Payments due by periodContractual Obligations
            
            Total
            
            Less than 1
              year
            
            1-3
              years
            
            3-5
              years
            
            More than
              5 yearsCapital
                expenditure obligations
            
            $
            1,964
            
            $
            1,964
            
            $
            -
            
            $
            -
            
            $
            -Operating
                leases
            
            
            4,595
            
            
            1,369
            
            
            1,743
            
            
            1,181
            
            
            302Raw
                material purchase obligations
            
            
            26,727
            
            
            26,727
            
            
            -
            
            
            -
            
            
            -Total
            
            $
            33,286
            
            $
            30,060
            
            $
            1,743
            
            $
            1,181
            
            $
            302





The
      Company is required to pay SERP obligations at the occurrence of certain events.
      As of March 31, 2008, the SERP had an unfunded benefit obligation of
      approximately $1.2 million, net of deferred income tax benefit. The gross
      minimum pension obligation and unfunded benefit obligation in the amount of
      $4.7
      million is included in long-term liabilities as an unfunded pension obligation
      on the Company’s condensed consolidated balance sheet. Included in other assets
      at March 31, 2008 are marketable securities with an estimated value of $4.7
      million, which have been designated by the Company to be utilized to fund the
      Company’s SERP obligations.





New
      Financial Accounting Standards





In
      September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
      No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines
      fair value, establishes a framework for measuring fair value in generally
      accepted accounting principles and expands disclosures about fair value
      measurements. SFAS 157 was effective for the Company’s financial assets and
      liabilities on January 1, 2008. The FASB approved a one-year deferral of the
      adoption of SFAS 157 as it relates to non-financial assets and liabilities
      with the issuance in February 2008 of FASB Staff Position FAS 157-2, “Effective
      Date of FASB Statement No. 157”, as a result of which implementation by the
      Company is now required on January 1, 2009. The partial adoption of
      SFAS 157 in the quarter ended March 31, 2008 had no material impact on
      the financial condition, results of operations or cash flows of the Company,
      but
      resulted in certain additional disclosures reflected in Note 2 to the
      Company’s condensed consolidated financial statements.





In
      February 2007, the FASB issued Statement of Financial Accounting Standards
      (“SFAS”) No. 159 (“SFAS 159”) “The Fair Value Option for Financial Assets and
      Financial Liabilities”, providing companies with an option to report selected
      financial assets and liabilities at fair value. The Standard’s objective is to
      reduce both complexity in accounting for financial instruments and the
      volatility in earnings caused by measuring related assets and liabilities
      differently. It also requires entities to display the fair value of those assets
      and liabilities for which the Company has chosen to use fair value on the face
      of the balance sheet. The adoption of SFAS 159 on January 1, 2008 did not impact
      the Company’s condensed consolidated financial statements.




-
          39
          -




In
      June
      2007, the FASB issued EITF Issue No. 07-3, "Accounting for Nonrefundable Advance
      Payments for Goods or Services Received for Use in Future Research and
      Development Activities". The Task Force concluded that nonrefundable advance
      payments for goods or services that will be used or rendered for future research
      and development activities should be deferred and capitalized. Such amounts
      should be recognized as an expense as the related goods are delivered or the
      services are performed, or when the goods or services are no longer expected
      to
      be provided. The
      adoption of the guidance under EITF Issue No. 07-3 on January 1, 2008 did not
      impact the Company’s condensed consolidated financial statements.





In
      December 2007, the FASB issued SFAS 141(R) (“SFAS 141(R)”), which replaces SFAS
      141 “Business Combinations”. This Statement is intended to improve the
      relevance, completeness and representational faithfulness of the information
      provided in financial reports about the assets acquired and the liabilities
      assumed in a business combination. This Statement requires an acquirer to
      recognize the assets acquired, the liabilities assumed, and any noncontrolling
      interest in the acquiree at the acquisition date, measured at their fair values
      as of that date, with limited exceptions specified in the Statement. Under
      SFAS
      141(R), acquisition-related costs, including restructuring costs, must be
      recognized separately from the acquisition and will generally be expensed as
      incurred. That replaces SFAS 141’s cost-allocation process, which required the
      cost of an acquisition to be allocated to the individual assets acquired and
      liabilities assumed based on their estimated fair values. SFAS 141(R) shall
      be
      applied prospectively to business combinations for which the acquisition date
      is
      on or after the beginning of the first annual report period beginning on or
      after December 15, 2008. The Company will implement this Statement in
      2009.





In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements – an amendment of ARB No. 51” (“SFAS No.
      160”). SFAS No. 160 amends Accounting Research Bulletin (“ARB”) No. 51 to
      establish accounting and reporting standards for the noncontrolling (minority)
      interest in a subsidiary and for the deconsolidation of a subsidiary. It
      clarifies that a noncontrolling interest in a subsidiary is an ownership
      interest in the consolidated entity that should be reported as equity in the
      Consolidated Financial Statements. SFAS No. 160 also requires consolidated
      net
      income to be reported at amounts that include the amounts attributable to both
      the parent and the noncontrolling interest on the face of the consolidated
      statement of income. Under SFAS No. 160, the accounting for changes in a
      parent’s ownership interest in a subsidiary that do not result in
      deconsolidation must be accounted for as equity transactions for the difference
      between the parent’s carrying value and the cash exchanged in the transaction.
      In addition, SFAS No. 160 also requires that a parent recognize a gain or loss
      in net income when a subsidiary is deconsolidated (except in the case of a
      spin-off), and requires expanded disclosure in the Consolidated Financial
      Statements that clearly identify and distinguish between the interests of the
      parent’s ownership interest and the interests of the noncontrolling owners of a
      subsidiary. This Statement is effective for fiscal years, and interim periods
      within those fiscal years, beginning on or after December 15, 2008. The Company
      will adopt SFAS No. 160 on January 1, 2009, as required, and is currently
      evaluating the impact of such adoption on its financial statements.




-
          40
          -




In
      March
      2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
      and Hedging Activities”, an amendment of FASB Statement No. 133 (“SFAS No.
      161”). The new standard is intended to improve financial reporting about
      derivative instruments and hedging activities by requiring enhanced disclosures
      to enable investors to better understand their effects on an entity’s financial
      position, financial performance and cash flows. It is effective for financial
      statements issued for fiscal years and interim periods beginning after November
      15, 2008. The Company does not believe that SFAS No. 161 will have a material
      impact on its financial statements.





-
          41
          -




Item
      3. Quantitative
      and Qualitative Disclosures About Market Risk





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.




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. At
      March
      31, 2008, two of the Company’s investments - the Company’s investment in Toko
      stock and the Company’s investment in the Columbia Strategic Cash Portfolio (the
“Columbia Portfolio”) - have been subject to recent market declines and if this
      trend continues, it could have a negative impact on the Company’s results of
      operations. If the per share fair market value of the remaining 1.8 million
      shares of Toko stock were to decrease by $0.23 per share (10% of the March
      31,
      2008 Toko stock price), this would result in an additional unrealized loss
      of
      $0.4 million. This investment has been in a loss position since April 2007.
      While the Company has the ability and intent to hold the stock for an indefinite
      period of time, if the stock price does not regain a positive position within
      the next three months, this investment may be deemed other-than-temporarily
      impaired. This would result in recognition of a realized loss on the Toko
      investment (the associated pre-tax unrealized loss at March 31, 2008 is $1.4
      million). The Company’s investment in the Columbia Portfolio has also been
      sensitive to the recent market decline. In December 2007, the Company was
      notified that its $25.7 million investment in the Columbia Portfolio was being
      liquidated and that the fund was converting from a fixed net asset value (“NAV”)
      to a floating NAV, which resulted in the Company’s recording a $0.3 million
      impairment charge during the year ended December 31, 2007 and an additional
      impairment charge of $0.3 million was recorded in the three months ended March
      31, 2008. See Note 2 of the Notes to the Company’s Condensed Consolidated
      Financial Statements. As of March 31, 2008, the Company has a total of $15.0
      million invested in the Columbia Portfolio. If the NAV were to decline by $0.10
      per unit (10% of the NAV of $0.9701 at March 31, 2008), the net impact to the
      Company’s results of operations and cash flows would be a decrease of income
      before provision for income taxes and cash flows from operating activities
      of
      approximately $1.5 million.





The
      Company enters into transactions denominated in U.S. Dollars, Hong Kong Dollars,
      the Macao Pataca, the Chinese Renminbi, Euros, British Pounds and the Czech
      Koruna. 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 condensed consolidated statement of operations
      or balance sheet.




-
          42
          -


Item
      4. Controls
      and Procedures





a)
            Disclosure
                controls and procedures.
                As of the end of the Company’s most recently completed fiscal quarter
                covered by this report, the Company carried out an evaluation, with
                the
                participation of the Company’s management, including the Company’s chief
                executive officer and vice president of finance, of the effectiveness
                of
                the Company’s disclosure controls and procedures pursuant to Securities
                Exchange Act Rule 13a-15. Based upon that evaluation, the Company’s chief
                executive officer and vice president of finance 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’s internal control
                over financial reporting.




PART
      II.
      Other Information





Item
      1.  Legal
      Proceedings





The
      Company is a defendant in a lawsuit captioned Synqor, Inc. v. Artesyn
      Technologies, Inc., Astec America, Inc., Emerson Network Power, Inc., Emerson
      Electric Co., Bel Fuse Inc., Cherokee International Corp., Delta Electronics,
      Inc., Delta Products Corp., Murata Electronics North America, Inc., Murata
      Manufacturing Co., Ltd., Power-One, Inc., Tyco Electronics Corp. and Tyco
      Electronics Ltd. brought in the United States District Court, Eastern District
      of Texas in November 2007. With respect to its claims against the Company,
      the
      plaintiff claims that the Company infringed its patents covering certain power
      products. Synqor is seeking unspecified damages against the Company. The Company
      filed an Answer to Synqor’s complaint, denying the allegations of infringement
      and asserting invalidity of the patents.





The
      Company is a defendant in a lawsuit captioned Halo Electronics, Inc. (“Halo”) v.
      Bel Fuse Inc., Pulse Engineering, Inc. and Technitrol, Inc. brought in Nevada
      Federal District Court. Plaintiff claims that the Company has infringed its
      patents covering certain surface mount discrete magnetic products made by the
      Company. Halo is seeking unspecified damages, which it claims should be trebled.
      In December 2007, this case was dismissed by the Nevada Federal District Court
      for lack of personal jurisdiction. Halo then re-filed this suit in the Northern
      California Federal District Court, captioned Halo Electronics, Inc. v. Bel
      Fuse
      Inc., Elec & Eltek (USA) Corporation, Wurth Electronics Midcom, Inc., and
      Xfmrs, Inc.





The
      Company is a plaintiff in a lawsuit captioned Bel Fuse Inc. v. Halo Electronics,
      Inc. brought in the United States District Court of New Jersey during May 2007.
      The Company claims that Halo has infringed a patent covering certain integrated
      connector modules made by Halo. The Company is seeking unspecified damages
      plus
      interest, costs and attorney fees.





The
      Company and two of its officers were defendants in a wrongful termination
      lawsuit brought in the District Court of Frankfurt am Main, Germany by a former
      employee at a foreign subsidiary of the Company. During July 2007, this lawsuit
      was settled for approximately $0.5 million. The Company had provided for this
      liability in its financial statements prior to the settlement.




-
          43
          -




The
      Company is a plaintiff in a lawsuit captioned Bel Fuse Inc. and Bel Power,
      Inc.
      v. Andrew Ferencz, Gregory Zvonar, Bernhard Schroter, EE2GO, Inc., Howard E.
      Kaepplein and William Ng, brought in the Superior Court of the Commonwealth
      of
      Massachusetts. The Company was granted injunctive relief and is seeking damages
      against the former stockholders of Galaxy Power, Inc., key employees of Galaxy
      and a corporation formed by some or all of the individual defendants. The
      Company has alleged that the defendants violated their written non-competition,
      non-disclosure and non-solicitation agreements, diverted business and usurped
      substantial business opportunities with key customers, misappropriated
      confidential information and trade secrets, and harmed the Company’s business.





In
      a
      related matter, the Company is a defendant in a lawsuit captioned Robert
      Chimielnski, P.C. on behalf of the stockholder representatives and the former
      stockholders of Galaxy Power, Inc. v. Bel Fuse Inc. et al. brought in the
      Superior Court of the Commonwealth of Massachusetts. This complaint for damages
      and injunctive relief is based on an alleged breach of contract and other
      allegedly illegal acts in a corporate context arising out of the Company’s
      objection to the release of nearly $2.0 million held in escrow under the terms
      of the stock purchase agreement between Galaxy and the Company.





The
      Company is a defendant in a lawsuit captioned Murata Manufacturing Company,
      Ltd.
      v. Bel Fuse Inc. et al, brought in the United States District Court, Northern
      District of Illinois. 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 $0.5 million; 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., 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 $0.5 million 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
      dismissing the Company's invalidity counterclaim against Regal Electronics.
      Regal has appealed the Court's rejection of its infringement claims to the
      U.S.
      Court of Appeals. The case was heard on February 6, 2007 and the U.S. Court
      of
      Appeals upheld the District Court’s ruling in favor of the Company.





The
      Company cannot predict the outcome of the unresolved matters; however,
      management believes that the ultimate resolution of these matters will not
      have
      a material impact on the Company's consolidated financial condition or results
      of operations. As of March 31, 2008, no amounts have been accrued in connection
      with these lawsuits, as the amounts are not determinable.




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




-
          44
          -





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





The
      following table sets forth certain information regarding the Company's purchase
      of shares of its Class A Common Stock during each calendar month in the quarter
      ended March 31, 2008:





Period
            
            Total Number
              of Shares
              Purchased
            
            Average
              Price Paid
              per Share
            
            Total Number of
              Shares Purchased as
              Part of Publicly
              Announced Plans or
              Programs
            
            Maximum Number
              of Shares that May
              Yet Be Purchased
              Under the PlanJanuary
                1 - January 31, 2008
            
            
            12,207
            
            $
            32.10
            
            
            12,207
            
            
            80,809February
                1 - February 29, 2008
            
            
            -
            
            
            -
            
            
            -
            
            
            80,809March
                1 - March 31, 2008
            
            
            -
            
            
            -
            
            
            -
            
            
            80,809Total
            
            
            12,207
            
            $
            32.10
            
            
            12,207
            
            
            80,809




As
      of
      March 31, 2008, the Company had cumulatively purchased and retired 23,600 shares
      of the Company’s Class B Common Stock. No shares of Class B common stock were
      repurchased during the quarter ended March 31, 2008. The maximum number of
      shares of Class B common stock that may yet be purchased under the plan as
      of
      January 31, 2008, February 29, 2008 and March 31, 2008 were 907,094, 907,094
      and
      907,169, respectively.




-
          45
          -




Item
      6. Exhibits


(a)
      Exhibits:




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.




-
          46
          -





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
                BernsteinDaniel
                Bernstein, President andChief
                Executive OfficerBy:
            /s/
                Colin DunnColin
                Dunn, Vice President of Finance





Dated:
      May 9, 2008





-
          47
          -





EXHIBIT
      INDEX





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.




-
          48
          -