FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the quarterly period ended September 30, 2003

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

     For the transition period from ............. to ............

     Commission file number:    0-11676

                                  BEL FUSE INC.
             (Exact name of registrant as specified in its charter)

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

                              206 Van Vorst Street
                          Jersey City, New Jersey 07302
                    (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 Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes  X            No
    ---              ---

         Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act) Yes  X     No
                                                   ---      ---

         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

         At November 1, 2003, there were 2,701,663 shares of Class A Common
Stock, $.10 par value, outstanding and 8,439,192 shares of Class B Common Stock,
$.10 par value, outstanding.


<PAGE>


                                  BEL FUSE INC.

                                      INDEX

                                                                     Page Number
                                                                     -----------

Part I.                    Financial Information

  Item 1.                  Financial Statements                             1

                           Consolidated Balance Sheets as of
                           September 30, 2003 (unaudited) and
                           December 31, 2002                              2 - 3

                           Consolidated Statements of
                           Operations for the Three and Nine
                           Months Ended September 30, 2003
                           and 2002 (unaudited)                             4

                           Consolidated Statements of
                           Stockholders' Equity for the
                           Year Ended December 31, 2002
                           and the Nine Months Ended
                           September 30, 2003 (Unaudited)                   5

                           Consolidated Statements of
                           Cash Flows for the Nine
                           Months Ended September 30,
                           2003 and 2002 (unaudited)                      6 - 7

                           Notes to Consolidated Financial
                           Statements (unaudited)                         8 - 25

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

  Item 3.                  Quantitative and Qualitative
                           Disclosures About Market Risk                   41

  Item 4.                  Controls and Procedures                         42

Part II.             Other Information

  Item 1.            Legal Proceedings                                     42

  Item 6.            Exhibits and Reports on Form 8-K                      43

Signatures                                                                 44



<PAGE>


PART I.  Financial Information

     Item 1.  Financial Statements
              --------------------

         Certain information and footnote disclosures required under accounting
principles generally accepted in the United States of America have been
condensed or omitted from the following consolidated financial statements
pursuant to the rules and regulations of the Securities and Exchange Commission.
It is suggested that the following consolidated financial statements be read in
conjunction with the year-end consolidated financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2002.

         The results of operations for the three and nine month periods ended
September 30, 2003 and 2002 are not necessarily indicative of the results for
the entire fiscal year or for any other period.


                                       -1-
<PAGE>


                         BEL FUSE INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>
                                                                                   September 30,    December 31,
                                                                                        2003            2002
                                                                                    ------------   ------------
                                                                                    (Unaudited)
<S>                                                                                 <C>            <C>
Current Assets:
    Cash and cash equivalents                                                       $ 50,723,907   $ 59,002,581
    Marketable securities                                                              1,308,373      4,966,275
    Accounts receivable, less allowance
     for doubtful accounts of $3,160,000 and $945,000                                 32,897,791     16,839,497
    Inventories                                                                       28,216,399     12,384,472
    Prepaid expenses and other current
     assets                                                                            1,580,375        190,199
    Refundable income taxes                                                                   --        681,887
    Deferred income taxes                                                                510,000        439,000
                                                                                    ------------   ------------
     Total Current Assets                                                            115,236,845     94,503,911


Property, plant and equipment - net                                                   45,449,727     37,605,195

Intangible assets-net                                                                  6,050,865      2,805,166

Goodwill                                                                               6,860,684      4,819,563

Other assets (including $5.5 million of deposits
    relating to the APC acquisition at December 31, 2002)                              1,322,137      7,159,077
                                                                                    ------------   ------------
     TOTAL ASSETS                                                                   $174,920,258   $146,892,912
                                                                                    ============   ============
</TABLE>


                See notes to consolidated financial statements.


                                       -2-
<PAGE>

                         BEL FUSE INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                          September 30,   December 31,
                                                                               2003           2002
                                                                          -------------   -------------
                                                                            (Unaudited)
<S>                                                                       <C>             <C>
Current Liabilities:
    Current portion of long-term debt                                     $   2,000,000   $          --
    Accounts payable                                                          8,314,526       5,099,894
    Accrued expenses                                                         10,711,183       6,202,871
    Income taxes payable                                                         26,328
    Dividends payable                                                           522,000         412,000
                                                                          -------------   -------------
           Total Current Liabilities                                         21,574,037      11,714,765
                                                                          -------------   -------------
Long-term Liabilities:
     Long-term debt - less current portion                                    7,000,000              --
    Deferred income taxes                                                     6,018,000       4,519,000
                                                                          -------------   -------------
            Long-term Liabilities                                            13,018,000       4,519,000
                                                                          -------------   -------------
     Total Liabilities                                                       34,592,037      16,233,765
                                                                          -------------   -------------
Commitments and Contingencies

Stockholders' Equity:
    Preferred stock, no par value -
      authorized 1,000,000 shares;
      none issued                                                                    --              --
    Class A common stock, par value
      $.10 per share - authorized
      10,000,000 shares; outstanding 2,701,663
        and 2,676,225 shares
      (net of 1,072,770 treasury shares)                                        270,167         267,623
    Class B common stock, par value
      $.10 per share - authorized
      30,000,000 shares; outstanding
      8,405,492 and 8,261,492 shares
      (net of 3,218,310 treasury shares)                                        840,549         826,149
    Additional paid-in capital                                               16,329,781      13,982,688
    Retained earnings                                                       122,345,331     115,632,819
    Cumulative other comprehensive
     income (loss)                                                              542,393         (50,132)
                                                                          -------------   -------------
     Total Stockholders' Equity                                             140,328,221     130,659,147
                                                                          -------------   -------------
     TOTAL LIABILITIES AND STOCKHOLDERS'
      EQUITY                                                              $ 174,920,258   $ 146,892,912
                                                                          =============   =============
</TABLE>


                See notes to consolidated financial statements.


                                       -3-
<PAGE>


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

<TABLE>
<CAPTION>
                                                       Nine Months Ended                  Three Months Ended
                                                          September 30,                      September 30,
                                                 ------------------------------    -----------------------------
                                                      2003             2002             2003             2002
                                                 -------------    -------------    -------------   -------------
<S>                                              <C>              <C>              <C>             <C>
Sales                                            $ 115,632,156    $  68,641,920    $  45,863,648   $  27,401,089
                                                 -------------    -------------    -------------   -------------
Costs and Expenses:

    Cost of sales                                   83,564,436       54,053,572       32,689,492      21,146,894
    Selling, general and
     administrative expenses                        20,791,634       12,797,301        7,622,239       4,259,888
                                                 -------------    -------------    -------------   -------------
                                                   104,356,070       66,850,873       40,311,731      25,406,782
                                                 -------------    -------------    -------------   -------------
Income from operations                              11,276,086        1,791,047        5,551,917       1,994,307

Interest expense                                      (191,900)              --         (108,615)             --

Interest income                                        305,891          767,417          106,271         232,853
                                                 -------------    -------------    -------------   -------------
Earnings before income tax provision                11,390,077        2,558,464        5,549,573       2,227,160

Income tax provision                                 3,223,000        1,340,000        1,920,000         481,000
                                                 -------------    -------------    -------------   -------------
Net earnings                                     $   8,167,077    $   1,218,464    $   3,629,573   $   1,746,160
                                                 =============    =============    =============   =============
Basic earnings per common share                  $        0.74    $        0.11    $        0.33   $        0.16
                                                 =============    =============    =============   =============
Diluted earnings per common share                $        0.73    $        0.11    $        0.32   $        0.16
                                                 =============    =============    =============   =============
Weighted average number of
 common shares outstanding-basic                    10,978,737       10,898,614       11,033,760      10,928,978
                                                 =============    =============    =============   =============
Weighted average number of
 common shares outstanding and
 potential common shares - diluted                  11,129,723       11,097,846       11,225,693      11,116,041
                                                 =============    =============    =============   =============
</TABLE>

                See notes to consolidated financial statements.


                                       -4-
<PAGE>


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

<TABLE>
<CAPTION>
                                                                                Cumulative
                                                                                   Other
                                                    Compre-                       Compre-       Class A     Class B    Additional
                                                    hensive         Retained      hensive        Common      Common      Paid-In
                                     Total        Income (loss)     Earnings    Income (loss)    Stock       Stock       Capital
                                 -------------    -------------  -------------  -------------  ---------   ---------  ------------
<S>                              <C>              <C>            <C>              <C>          <C>         <C>        <C>
Balance, January 1, 2002         $ 129,462,912                   $ 116,699,114    $  12,054    $ 266,464   $ 810,512  $ 11,674,768
Exercise of stock
  options                            1,872,716                                                     1,159      15,637     1,855,920
Tax benefits arising
  from the disposition of
  non-qualified
  incentive stock options              452,000                                                                             452,000
Cash dividends on Class B
  common stock                      (1,645,292)                     (1,645,292)
Currency translation
  adjustment - net of taxes            (19,186)   $   (19,186)                      (19,186)
Decrease in marketable
  securities-net of taxes              (43,000)       (43,000)                      (43,000)
Net income                             578,997        578,997          578,997
                                                  -----------
      Comprehensive income                        $   516,811
                                                  ===========
                                 -------------                   -------------     --------     --------    --------   -----------
Balance, December 31, 2002         130,659,147                     115,632,819      (50,132)     267,623     826,149    13,982,688
Exercise of stock
  options                            1,653,037                                                     2,544      14,400     1,636,093
Tax benefits arising
  from the disposition of
  non-qualified
  incentive stock options              711,000                                                                             711,000
Cash dividends on common stock      (1,454,565)                     (1,454,565)
Currency translation
  adjustment - net of taxes            581,425    $   581,425                       581,425
Increase in marketable
  securities-net of taxes               11,100         11,100                        11,100
Net income                           8,167,077      8,167,077        8,167,077
                                                  -----------
      Comprehensive income                        $ 8,759,602
                                                  ===========
                                 -------------                   -------------    ---------    ---------   ---------  ------------
Balance, September 30, 2003      $ 140,328,221                   $ 122,345,331    $ 542,393    $ 270,167   $ 840,549  $ 16,329,781
                                 =============                   =============    =========    =========   =========  =============
</TABLE>

                See notes to consolidated financial statements.


                                       -5-
<PAGE>

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

<TABLE>
<CAPTION>
                                                                           Nine Months Ended
                                                                              September 30,
                                                                      ----------------------------
                                                                          2003            2002
                                                                      ------------    ------------
<S>                                                                   <C>             <C>
Cash flows from operating activities:
     Net income                                                       $  8,167,077    $  1,218,464
Adjustments to reconcile net income
    to net cash provided by operating activities:
     Depreciation and amortization                                       6,218,809       4,589,702
     Deferred income taxes                                               1,229,000         612,000
     Other                                                                 711,000         455,000
     Changes in operating assets and
      liabilities net of acquisitions                                      606,552      (6,235,479)
                                                                      ------------    ------------
       Net Cash Provided by
        Operating Activities                                            16,932,438         639,687
                                                                      ------------    ------------
Cash flows from investing activities:
 Purchase of property, plant and
  equipment                                                             (2,047,586)     (4,907,328)
 Payment for acquisitions - net of cash acquired                       (36,169,750)        (34,249)
 Proceeds from sale of marketable
  securities                                                             4,904,875       4,398,129
 Purchase of marketable securities                                      (1,228,873)     (7,560,328)
 Proceeds from repayment by contractors                                     21,750          21,750
                                                                      ------------    ------------
      Net Cash Used in Investing Activities                            (34,519,584)     (8,082,026)
                                                                      ------------    ------------
Cash flows from financing activities:
Proceeds from borrowings                                                10,000,000              --
Loan repayments                                                         (1,000,000)             --
Proceeds from exercise of stock options                                  1,653,037       1,800,653
Dividends paid to common stockholders                                   (1,344,565)     (1,226,073)
                                                                      ------------    ------------
     Net Cash Provided by
      Financing Activities                                               9,308,472         574,580
                                                                      ------------    ------------
Net decrease in cash                                                    (8,278,674)     (6,867,759)
Cash and Cash Equivalents -
 beginning of period                                                    59,002,581      69,278,574
                                                                      ------------    ------------
Cash and Cash Equivalents -
 end of period                                                        $ 50,723,907    $ 62,410,815
                                                                      ============    ============
</TABLE>

                See notes to consolidated financial statements.


                                       -6-
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                     Nine Months Ended
                                                                                       September 30,
                                                                                ---------------------------
                                                                                    2003            2002
                                                                                ------------    -----------
<S>                                                                             <C>             <C>
Changes in operating assets and
  liabilities, net of acquisitions, consist of:
    Increase in accounts
     receivable                                                                 $ (1,131,876)   $ (7,193,047)
    Decrease in inventories                                                          239,907          70,058
    Increase in prepaid expenses and
      other current assets                                                          (429,176)       (183,055)
    Increase in refundable income taxes                                                   --          54,566
    Increase in other assets                                                        (388,507)       (460,612)
    Increase in accounts payable                                                     466,779         813,808
    Increase in accrued expenses                                                     830,210         662,803
    Increase in income taxes payable                                               1,019,215              --
                                                                                ------------     -----------
                                                                                $    606,552    $ (6,235,479)
                                                                                ============    ============
Supplementary information:
Cash paid during the period for:
    Interest                                                                    $    191,900    $         --
                                                                                ============    ============
    Income taxes                                                                $    267,000    $    200,000
                                                                                ============    ============
Non-Cash Investing Activities:

   Unrealized (gain) loss on marketable securities                             $    (11,100)   $     36,000
                                                                                ============    ============
Supplemental disclosure of noncash
   investing activities:
    Fair value of assets acquired (excluding cash
        of $799,000)                                                            $ 36,362,954
    Intangibles                                                                    6,253,917
    Less: Cash on deposit previous year                                           (6,447,121)
                                                                                ------------
                            Net cash paid                                       $ 36,169,750
                                                                                ============
</TABLE>

                See notes to consolidated financial statements.


                                       -7-
<PAGE>

                         BEL FUSE INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.       Basis of Presentation and Accounting Policies

         The consolidated balance sheet as of September 30, 2003, and the
consolidated statements of operations and cash flows for the periods presented
herein have been prepared by Bel Fuse Inc (the "Company" or "Bel") and are
unaudited. In the opinion of management, all adjustments (consisting solely of
normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows for all periods presented have
been made. The information for the consolidated balance sheet as of December 31,
2002 was derived from audited financial statements.

Accounting Policies
-------------------

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Bel Fuse Inc. and subsidiaries (the "Company") operate in one industry
with three 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. Operations are managed on a
geographic basis which include North America, Asia and Europe. Sales are
predominantly in North America, Europe and Asia.

         PRINCIPLES OF CONSOLIDATION - The consolidated financial statements
         ---------------------------
include the accounts of the Company and its wholly owned subsidiaries. All
intercompany transactions and balances have been eliminated.

         USE OF ESTIMATES - The preparation of the 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 September 30, 2003 and December 31, 2002, cash
equivalents approximate $29,031,000 and $41,207,000, respectively.

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


                                       -8-
<PAGE>


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

         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 with any one financial instrument.

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

         REVENUE RECOGNITION -The Company recognizes revenue in accordance with
         -------------------
the guidance contained in SEC Staff Accounting Bulletin No. 101, "Revenue
Recognition in Financial Statements" ("SAB 101"). Revenue is recognized when the
product has been delivered and title and risk of loss has passed to the
customer, collection of the resulting receivable is deemed probable by
management, persuasive evidence of an arrangement exists and the sales price is
fixed and determinable. Substantially all of the Company's shipments are FCA
(free carrier) which provides for title to pass upon delivery to the customer's
freight carrier. Some product is shipped DDP/DDU with title passing when the
product arrives at the customer's dock.

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

         The Company typically has a twelve month warranty policy for
workmanship defects. Warranty returns have historically averaged approximately
below 1% of net sales.

         GOODWILL AND OTHER INTANGIBLES - In June 2001, the Financial Accounting
         ------------------------------
Standards Board ("FASB") issued SFAS No. 141, "Business Combinations" ("SFAS
141"), and No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"). SFAS
141 changes the accounting for business combinations, requiring that all
business combinations be accounted for using the purchase method of accounting
and that intangible assets be recognized as assets apart from goodwill if they
arise from contractual or other legal rights, or if they are separate or capable
of being separated from the acquired entity and sold, transferred, licensed,
rented or exchanged. SFAS 141 was effective for all business combinations
initiated after June 30, 2001. SFAS 142 specifies the financial accounting and
reporting for acquired goodwill and other intangible assets. Goodwill and
intangible assets that have indefinite useful lives are not amortized but rather
they are tested at least annually for impairment unless certain impairment
indicators are identified. This standard was effective for fiscal


                                       -9-
<PAGE>

years beginning after December 15, 2001. The Company tests goodwill for
impairment, at least annually (December 31), 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. Upon
adoption of this standard, the Company allocated its goodwill and other
intangibles to two reporting units - Telecom (which is part of the Company's
North American and Asia segments) and Power Products (which is part of the
Company's Asia segment). Goodwill recognized on or before June 30, 2001 was
tested for impairment as of the beginning of the fiscal year in which SFAS 142
was initially applied (January 1, 2002) and management concluded that no
impairment was indicated.

The Company acquired the Signal Transformer division of Lucent Technologies in
October, 1998. The Company refers to this acquisition and related products as
its Telecom business. The acquired tangible and intangible assets included
manufacturing equipment, proprietary product information, an exclusive supply
agreement with Lucent and goodwill. Shortly after the acquisition, the acquired
tangible and intangible assets (including goodwill) were allocated to the
Company's North America and Asia segments based on a formal third party
appraisal of the portion of the Telecom business that would reside in each
geographic segment. Accordingly, a portion of the Telecom goodwill is included
in each geographic segment. The goodwill relating to the Company's Power
Products acquisitions of E-Power Ltd. and Current Concepts, Inc., in May, 2001,
and the Insilico Technologies, Inc's passive components group in March 2003, is
included exclusively in the Company's Asia segment.

No goodwill or other intangibles have been allocated to Europe.

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

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

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


                                      -10-
<PAGE>

         The principal items giving rise to deferred taxes are the use of
accelerated depreciation methods for plant and equipment, the assumed
repatriation of a portion of foreign earnings and certain expenses which have
been deducted for financial reporting purposes which are not currently
deductible for income tax purposes and the future tax benefit of certain foreign
net operating loss carryforwards.

         The provision for income taxes for the first nine months of 2003 was
$3.2 million as compared to $1.3 million for the first nine months of 2002. The
increase in the provision is due primarily to the Company's increased earnings
before income taxes for the nine months ended September 30, 2003 as compared
with the same period in 2002 and a valuation allowance that was established in
the amount of $.6 million associated with a foreign net operating loss
carryforward. The income tax provision is lower than the statutory federal
income tax rate primarily due to lower foreign tax rates.

         The Company was granted a ten year tax holiday in Macau which has an
effective tax rate of 8% , which is 50% of the normal tax rate. Such holiday
expires during 2004. During the nine months ended September 30, 2003 this
holiday provided no benefit to the Company as the entity incurred losses. The
deferred tax benefit of the Macau losses were offset by a valuation allowance.

         STOCK-OPTION PLAN -
         -------------------

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

         In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation-Transition and Disclosure, an amendment of FASB
Statement No. 123". SFAS No. 148 provides alternative methods of transition for
a voluntary change to the fair value based method of accounting for stock-based
employee compensation. It also requires disclosure in both annual and interim
financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results. SFAS No. 148
is effective for annual and interim periods beginning after December 15, 2002.
The Company will continue to account for stock-based employee compensation under
the recognition and measurement principle of APB Opinion No. 25 and related
interpretations.


                                      -11-
<PAGE>

         The Company has a Qualified Stock Option Plan (the "Plan") which
provides for the granting of "Incentive Stock Options" to key employees and
directors within the meaning of Section 422 of the Internal Revenue Code of
1954, as amended. The Plan provides for the issuance of 2,400,000 shares.
Substantially all options outstanding 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. The price of the 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. An option may not be exercised within one year from
the date of grant, and in general, no option will be exercisable after five
years from the date granted. No stock-based employee compensation cost is
reflected in net income, as all options granted under the Plan had an exercise
price equal to the market value of the underlying common stock on the date of
grant. The Company also granted options to directors at a price equal to the
market value of the underlying common stock on the date of grant. The following
table illustrates the effect on net income (loss) and earnings (loss) per share
if the Company had applied the fair-value recognition provisions of FASB
Statement No. 123, "Accounting for Stock-Based Compensation", to stock-based
compensation.

<TABLE>
<CAPTION>
                                                       Nine Months Ended             Three Months Ended
                                                         September 30,                  September 30,
                                                 -----------------------------   --------------------------
                                                      2003             2002          2003            2002
                                                 -------------    ------------   -----------    -----------
<S>                                              <C>              <C>            <C>            <C>
Net earnings - as reported                       $   8,167,077    $  1,218,464   $ 3,629,573    $ 1,746,160
Amortization of stock-based compensation            (1,559,134)     (1,616,951)     (599,702)      (634,003)
                                                 -------------    ------------   -----------    -----------
Net earnings (loss) - proforma                   $   6,607,943    $   (398,487)  $ 3,029,871    $ 1,112,157
                                                 =============    ============   ===========    ===========
Earnings per share - basic - as reported         $        0.74    $       0.11   $      0.33    $      0.16
Earnings (loss) per share - basic - proforma     $        0.60    $      (0.04)  $      0.27    $      0.10
Earnings per share - diluted - as reported       $        0.73    $       0.11   $      0.32    $      0.16
Earnings (loss) per share - diluted - proforma   $        0.59    $      (0.04)  $      0.27    $      0.10
</TABLE>


         The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 2003 and 2002, respectively: dividend yield of
..2% and .9%; expected volatility of 56% and 54%; risk-free interest rate of 2%
and 3%; and expected lives of 5 years.

         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 nine months ended September 30, 2003 and 2002 amounted to $6.2
million and $4.3 million, respectively, and for the three months ended September
30, 2003 and 2002 amounted to $2.5 million and $1.5 million, respectively. The
increase for both the nine-month and three-month periods in 2003 is attributed
to the APC and Insilco acquisitions.


                                      -12-
<PAGE>

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

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

2.       Acquisitions

         On March 22, 2003, the Company acquired certain assets, subject to
certain liabilities, and common shares of certain entities comprising Insilco
Technologies, Inc.'s ("Insilco") Passive Component Group for $37.0 million in
cash, including transaction costs of approximately $1.3 million. Purchase price
allocations have been initially estimated by management and will be adjusted
after management considers a number of factors, including valuations, actual
results and independent formal appraisals, when making these determinations.
Management has estimated that approximately $4.1 million of identifiable
intangible assets arose from the transaction and will be amortized on a straight
line basis over a period of five years.

         The Company believes that the purchase of Insilco's passive components
group is a logical strategic fit with Bel's current products and markets. The
Company believes this acquisition strengthens Bel and enables the Company to
offer a larger customer base a wider breadth of products. With the increased
diversification of its product line, the Company believes it has become a more
attractive supplier to current customers seeking a greater variety of products.

         Both the Company's legacy operations and the acquired Stewart Connector
Systems Group ("Stewart") (acquired as part of the Insilco acquisition) are
leaders in the high-growth Integrated Connector Module (ICM) market.
Consolidating the engineering, manufacturing and sales capabilities of Bel and
Stewart are expected to help improve the Company's product leadership and growth
rate in this important market. The Company's expertise in electrical engineering
and high-volume, low-cost manufacturing complements Stewart's strengths in
mechanical design and engineering.

         The Signal Transformer Group (also acquired as part of the Insilco
acquisition) adds a new product line and many new customers. The Company
expects to leverage the Signal Transformer brand name to develop a magnetics
distribution business.


                                      -13-
<PAGE>

         Effective January 2, 2003, the Company entered into an asset purchase
agreement with Advanced Power Components plc ("APC") to purchase the
communication products division of APC for $5.5 million in cash plus the
assumption of certain liabilities. The Company will be required to make
contingent payments equal to 5% of sales (as defined) in excess of $5.5 million
per year for the years 2003 and 2004. Purchase price allocations have been
initially estimated by management and will be adjusted after management
considers a number of factors including valuations, actual results and
independent formal appraisals, when making these determination. Management has
estimated that the excess of the purchase price over net assets acquired, of
approximately $2.0 million, will be allocated to goodwill. Goodwill related to
this acquisition has been included in the Company's Asia reporting segment.

         There was no in-process research and development acquired as part of
these acquisitions.

         These transactions were accounted for using the purchase method of
accounting and, accordingly, the results of operations of Insilco have been
included in the Company's financial statements from March 22, 2003 and the
results of operations of APC have been included in the Company's financial
statements from January 2, 2003.

         The following unaudited pro forma summary results of operations assumes
that both Insilco and APC had been acquired as of January 1, 2002 (in
thousands):

                                     Nine Months Ended      Three Months Ended
                                        September 30,          September 30,
                                   ---------------------  ---------------------
                                      2003        2002       2003        2002
                                   ---------   ---------  ---------   ---------
Sales                              $ 131,345   $ 121,240  $  61,377   $  45,398
Net income (loss)                      8,813      (4,650)     3,585         773
Earnings (loss) per share - diluted     0.79       (0.43)      0.32        0.07

         The information above is not necessarily indicative of the results of
operations that would have occurred if the acquisitions had been consummated as
of January 1, 2002. Such information should not be construed as being a
representation of the future results of operations of the Company.


                                      -14-
<PAGE>

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

         Cash                                     $    799,000
         Accounts receivable                        14,390,000
         Inventories                                15,845,000
         Prepaid expenses                              961,000
         Income tax receivable                         733,000
         Property, plant and
           equipment                                11,049,000
         Other assets                                  244,000
         Goodwill                                    2,041,000
         Intangible assets                           4,076,000
         Accounts payable                           (2,748,000)
         Accrued expenses                           (3,679,000)
         Income taxes payable                         (164,000)
         Deferred income taxes payable                (266,000)
                                                  ------------
         Net assets acquired                      $ 43,281,000
                                                  ============

3.       Goodwill and Other Intangibles

         Goodwill represents the excess of the purchase price and related costs
over the value assigned to the net tangible and other intangible assets with
finite lives acquired in a business acquisition. Prior to January 1, 2002,
goodwill had been amortized on a straight-line basis over 4 to 15 years.

         Effective January 1, 2002, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets".
Under SFAS No. 142, goodwill and intangible assets deemed to have indefinite
lives are no longer amortized, but are subject to, at a minimum, an annual
impairment test. If the carrying value of goodwill or intangible assets exceeds
its fair market value, an impairment loss would be recorded. The Company uses a
discounted cash flow model to determine the fair market value of the Company's
reporting units.

         The Company recognized an impairment charge in its Telecom business of
$5.2 million related to goodwill in 2002. Upon adoption of SFAS 142 on January
1, 2002, the Company completed an impairment test and, based on the results of a
valuation performed, management concluded that there was no impairment. This
conclusion was based on the results of a discounted projected cash flow model,
including an estimate of terminal value and various other generally accepted
valuation methodologies. In 2001, the Telecom industry overestimated their
future requirements, which resulted in lower revenues and profits for the
Company. By late 2002, management had concluded that a market turnaround was not
likely to occur as had been expected. It should be noted that during 2001 and
2002, the Company's telecom business did not operate at a loss. However,
management concluded, in late 2002,


                                      -15-
<PAGE>

that it needed to revise projected revenue, profit and cash flows projections in
2003 and beyond based on market conditions. Management performed the required
annual impairment test as of December 31, 2002 based on the same valuation
methodology used by the Company upon adopting SFAS 142 and concluded that an
impairment charge of $5.2 million was appropriate.

         Other intangibles include patents, product information, covenants
not-to-compete and supply agreements. Amounts assigned to these intangibles have
been determined by management. Management considered a number of factors in
determining the allocations, including valuations and independent appraisals.
Other intangibles are being amortized over 4 to 10 years. Amortization expense
was $968,000 and $711,000 for the nine months ended September 30, 2003 and 2002,
respectively and $401,000 and $176,000 for the three months ended September 30,
2003 and 2002, respectively.

         Under the terms of the E-Power and Current Concepts, Inc. acquisition
agreements, of May 11, 2001, the Company will be required to make contingent
purchase price payments up to an aggregate of $7.6 million should the acquired
companies attain specified sales levels. E-Power will be paid $2.0 million in
contingent purchase price payments when sales, as defined, reach $15.0 million
and an additional $4.0 million when sales reach $25.0 million on a cumulative
basis through May, 2007. No payments have been made to date with respect to
E-Power. Current Concepts will be paid 16% of sales, as defined, on the first
$10.0 million of sales through May 2007. During the nine months ended September
30, 2003 the Company paid approximately $136,000 in contingent purchase price
payments to Current Concepts ($29,000, $65,000 and $42,000 during the first,
second and third quarters of 2003, respectively). The contingent purchase price
payments are accounted for as additional purchase price and increase goodwill
when such payment obligations are incurred.

         The changes in the carrying value of goodwill for the nine months ended
September 30, 2003 are as follows:

                                         Total        Asia     North America
                                         -----        ----     -------------
Balance, January 1, 2003              $4,819,563   $3,396,181   $1,423,382
Preliminary goodwill allocation
  related to acquisition               2,041,121    2,041,121           --
                                      ----------   ----------   ----------
Balance September 30, 2003            $6,860,684   $5,437,302   $1,423,382
                                      ==========   ==========   ==========


           As of September 30, 2003, goodwill classified by reporting segment,
net of accumulated amortization, consists of the following:

     North America Segment:                                  $1,423,382
                                                             ----------
          (Related to Telecom Acquisition)
     Asia Segment                                             3,968,868
          (Related to the Power Products Acquisitions)
          Telecom reporting unit                              1,468,434
                                                             ----------
              Sub-Totel Asia                                  5,437,302
                                                             ----------

     Consolidated Total                                      $6,860,684
                                                             ==========


                                      -16-
<PAGE>


         The components of other intangibles are as follows:
<TABLE>
<CAPTION>
                                                     September 30, 2003
                                           Total                           Asia                        North America
                               -----------------------------   ----------------------------    ----------------------------
                               Gross Carrying   Accumulated    Gross Carrying  Accumulated     Gross Carrying  Accumulated
                                   Amount       Amortization       Amount      Amortization        Amount      Amortization
                               --------------   ------------   --------------  ------------    --------------  ------------
<S>                             <C>             <C>             <C>             <C>             <C>             <C>
Patents and Product
  Information                   $ 5,411,540     $ 1,024,151     $ 1,868,308     $   546,003     $ 3,543,232     $   478,148

Covenants not-to-compete          3,097,667       1,434,191       3,097,667       1,434,191              --              --

Supply agreement                  2,660,000       2,660,000       1,409,800       1,409,800       1,250,200       1,250,200
                                -----------     -----------     -----------     -----------     -----------     -----------
                                $11,169,207     $ 5,118,342     $ 6,375,775     $ 3,389,994     $ 4,793,432     $ 1,728,348
                                ===========     ===========     ===========     ===========     ===========     ===========

<CAPTION>

                                                     December 31, 2002
                                           Total                           Asia                        North America
                               -----------------------------   ----------------------------    ----------------------------
                               Gross Carrying   Accumulated    Gross Carrying  Accumulated     Gross Carrying  Accumulated
                                   Amount       Amortization       Amount      Amortization        Amount      Amortization
                               --------------   ------------   --------------  ------------    --------------  ------------
<S>                             <C>             <C>             <C>             <C>             <C>             <C>
Patents and Product
  Information                   $ 1,335,000     $   486,819     $ 1,053,000     $   366,969     $   282,000     $   119,850

Covenants not-to-compete          2,961,411       1,004,426       2,961,411       1,004,426              --              --

Supply agreement                  2,660,000       2,660,000       1,409,800       1,409,800       1,250,200       1,250,200
                                -----------     -----------     -----------     -----------     -----------     -----------
                                $ 6,956,411     $ 4,151,245     $ 5,424,211     $ 2,781,195     $ 1,532,200     $ 1,370,050
                                ===========     ===========     ===========     ===========     ===========     ===========
</TABLE>


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

                                            Estimated
                                           Amortization
                         December 31,        Expense
                         ------------      ------------
                             2003          $1,349,000
                             2004           1,582,000
                             2005           1,499,000
                             2006           1,301,000
                             2007             905,000

4.       Earnings Per Share

         Basic earnings per common share are computed by dividing net earnings
by the weighted average number of common shares outstanding during the year.
Diluted earnings per common share are computed by dividing net earnings by the
weighted average number of common shares and potential common shares outstanding
during the year. Potential common shares used in computing diluted earnings per
share relate to stock options and warrants which, if exercised, would have a
dilutive effect on earnings per share. During the three and nine months ended
September 30, 2003 and 2002, there were no antidilutive options and warrants
omitted from the calculation of diluted earnings per share.


                                      -17-
<PAGE>

5.       Inventories

         There was a strong demand for the Company's products during 1999-2000
due to the growth of the Telecom and Local Area Networking ("LAN") product
lines. While sales and profits increased, it was, at times, difficult to obtain
raw materials and components at reasonable prices in the Local Area Networking
and Telecommunications product lines. Many OEMS (Original Equipment
Manufacturers) used third party contract manufacturers, and as the Company
concluded in the middle of 2001, its customers and contract manufacturers, in
many instances, ordered quantities well in excess of their needs in order to
minimize their risk of shortages and/or price increases. In response to the
increased demand for certain product lines, the Company entered into
non-cancelable forward material purchase orders based on customer forecasts.
These forward contracts were necessary to ensure the availability of materials
at prices and quantities management projected were necessary to meet anticipated
customer orders. Use of non-cancelable forward purchase commitments is a
customary practice in the industry.

         In May 2001, the Company received a number of requests from major
customers and their contract manufacturers seeking to postpone or cancel orders
they had made. The Company took immediate steps to negotiate with its customers
and suppliers. With suppliers it cancelled purchase orders where it could,
renegotiated contracts to substitute different materials, paid cancellation
penalties, or paid suppliers fees not to deliver product. Management also
believed that the raw materials on hand in these product lines were either in
excess of any foreseeable needs, or would become technologically obsolete before
a significant recovery occurred.

         Estimates were made of materials in excess of reasonable projected
needs, and, in the second quarter of 2001, a charge of $12.0 million was
recorded to reduce the carrying value of on-hand raw material inventory related
to the magnetic product lines. This charge included a reserve of $5.0 million
related to management's estimate of losses projected to be incurred on
non-cancelable purchase orders related to these product lines. Negotiations with
both customers and suppliers continued through 2002 in attempts to minimize the
Company's estimated losses associated with the cancellation of customer orders
and cancellation of non-cancelable purchase orders with suppliers. Ultimately,
the Company accepted delivery of approximately $3.1 million of the purchase
commitments it attempted to cancel and was able to mitigate losses with
suppliers for the remaining $1.9 million reserve established in June, 2001.
During that time period, raw material replacement costs dropped dramatically.

         During 2001 and each quarter of 2002, management evaluated existing
reserve levels for both non-cancelable purchase orders and other on-hand
inventory (other than what had been written-off in June 2001). Adjustments to
the existing reserve levels were made each quarter based on management's
assessments of the status of settlements with suppliers, estimates of excess
levels of on-hand inventory, existing customer backlog and general market
conditions. Through September 30, 2003, the Company was able to use
approximately $.7 million of the inventory that was included in the June 2001
net $12 million charge. Gross profit was not significantly impacted due to
comparable deductions in selling prices that were necessary to be competitive.


                                      -18-
<PAGE>

         When inventory is written-off, it is never written back up; the cost
remains at zero or the level to which it has been written-down. When inventory
that has been written-off is subsequently used in the manufacturing process, the
lower adjusted cost of the material is charged to cost of sales. At September
30, 2003, approximately $11.4 million of inventory (at original cost before the
write-down or reserve in 2001) was on hand, including $3.1 million of raw
materials received from the outstanding purchase commitments. During the third
quarter of 2003 approximately $2.5 million of this inventory was scrapped.
Management intends to retain the balance of this inventory for possible use in
future orders. Should any of this inventory be used in the manufacturing process
for customer orders, the improved gross profit will be recognized at the time
the completed product is shipped and the sale is recorded.

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

                        4th Quarter   2001   $ 164,329

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

                        1st Quarter   2003      77,069
                        2nd Quarter   2003      80,046
                        3rd Quarter   2003      28,851
                                             ---------
                                             $ 733,008
                                             =========

         The components of inventory are as follows:

                               September 30,  December 31,
                                   2003           2002
                                   ----           ----
          Raw material        $ 14,062,661   $  7,350,130
          Work in progress       3,142,914         53,776
          Finished goods        11,010,824      4,980,566
                              ------------   ------------
                              $ 28,216,399   $ 12,384,472
                              ============   ============

6.       Impairment Loss and Restructuring Charges

         The Company incurred charges during the fourth quarter of 2001 in the
total amount of $5.6 million, principally for the write-down of fixed assets
($4.1 million) due to changing customer preferences and projected lower volumes
in mature product lines and other charges ($1.5 million) related to the
consolidation of the Company's engineering facilities. The charges were computed
in accordance with the guidance included in SFAS 121. Accordingly, since
management concluded that the future undiscounted cash flows and estimated
residual value was less than its carrying value, an impairment loss was
recognized which was measured by the difference between the carrying value of
the assets and the present value of the discounted estimated future cash flows.


                                      -19-
<PAGE>

         The fixed assets that were written down principally include telecom
equipment and an idle facility in Indiana and are part of the Company's North
America and Asia segments. The $5.6 million write-down was included in income
(loss) from operations in cost of sales in the Company's statement of operations
in 2001.

         Restructuring Charges
         ---------------------

         During the fourth quarter of 2001 the Company approved a plan related
to the consolidation of the Company's engineering facilities. As a result, the
Company recognized a restructuring charge of approximately $1.5 million
consisting of $.9 million of employee separation costs, $.2 million of related
expenses and $.4 million of inventory related items. The number of employees
affected by this restructuring was approximately 21. The accrual for employee
severance costs was made in accordance with the guidance in EITF 94-3. Prior to
such accrual, management adopted a formal plan to consolidate its engineering
facilities, all of the affected employees were notified on or about November 9,
2001 and the specific amount of severance was determined and discussed with each
employee. The $1.5 million restructuring was included in income (loss) from
operations in cost of sales in the Company's statement of operations in 2001.

         During 2003 the Company incurred approximately $.3 million of severance
costs and anticipates additional severance expenses for the remainder of the
year of approximately $150,000 as more jobs in Hong Kong are moved to mainland
China.

7.       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:

<TABLE>
<CAPTION>
                                                         Nine Months Ended               Three Months Ended
                                                           September 30,                    September 30,
                                                 ------------------------------    ------------------------------
                                                      2003              2002             2003           2002
                                                 -------------    -------------    -------------    -------------
<S>                                              <C>              <C>              <C>              <C>
Total Revenues:
   North America                                 $  45,755,115    $  21,282,601    $  18,833,893    $   6,935,903
   Asia                                             85,768,598       64,986,327       29,757,680       25,563,970
   Europe                                            8,353,411               --        3,262,520               --
   Less intergeographic
    revenues                                       (24,244,968)     (17,627,008)      (5,990,445)      (5,098,784)
                                                 -------------    -------------    -------------    -------------
                                                 $ 115,632,156    $  68,641,920    $  45,863,648    $  27,401,089
                                                 =============    =============    =============    =============
Income (loss) from Operations:
  North America                                  $   2,101,819    $   1,531,243    $   1,484,629    $    (180,444)
  Asia                                               8,210,570          259,804        3,574,354        2,174,751
  Europe                                               963,697               --          492,934               --
                                                 -------------    -------------    -------------    -------------
                                                 $  11,276,086    $   1,791,047    $   5,551,917    $   1,994,307
                                                 =============    =============    =============    =============
</TABLE>


                                      -20-
<PAGE>


                                          September 30,    December 31,
                                              2003             2002
                                         -------------    -------------
       Identifiable Assets:
               United States             $  51,599,935    $  46,101,626
               Asia                        120,921,194      118,819,792
               Europe                        5,998,379               --
               Less intergeographic
                 eliminations               (3,599,250)     (18,028,506)
                                         -------------    -------------
       Total Identifiable Assets         $ 174,920,258    $ 146,892,912
                                         =============    =============

8.       Debt

         On March 21, 2003, the Company entered into a $10 million secured term
loan. The loan was used to partially finance the Company's acquisition of the
Passive Components division of Insilco Technologies, Inc. The loan will be paid
in 20 equal quarterly installments of principal with a final maturity on March
31, 2008 and currently bears interest at LIBOR plus 1.25 percent (3.1875 percent
at September 30, 2003) payable monthly. The rate may vary based upon the
Company's performance with respect to certain financial covenants. In addition,
the note may be prepaid in certain circumstances. The loan is collateralized
with a first priority security interest in and lien on 65% of all the issued and
outstanding shares of the capital stock of certain of the foreign subsidiaries
of Bel Fuse Inc. and all other personal property and certain real property of
Bel Fuse Inc. The Company is required to maintain certain financial covenants,
as defined in the agreement. As of September 30, 2003, the Company was in
compliance with all financial covenants. As of September 30, 2003, the balance
due on the term loan was $9.0 million. For the nine and three months ended
September 30, 2003, the Company recorded interest expense of $192,000 and
$109,000, respectively.

9.       Accrued Expenses

         Accrued expenses consist of the following:

                                          September 30,    December 31,
                                              2003             2002
                                         -------------    -------------
               Sales commissions         $ 1,700,275      $   939,432
               Subcontracting labor        1,881,697        1,838,134
               Salaries, bonuses and
                related benefits           4,738,328        1,742,637
               Other                       2,390,883        1,682,668
                                         -----------      -----------
                                         $10,711,183      $ 6,202,871
                                         ===========      ===========


                                      -21-
<PAGE>



10.      RETIREMENT FUND AND PROFIT SHARING PLAN

         The Company maintains a domestic profit sharing plan and a contributory
stock ownership and savings 401(K) plan, which combines stock ownership and
individual voluntary savings provisions to provide retirement benefits for plan
participants. The plan provides for participants to voluntarily contribute a
portion of their compensation, subject to certain legal maximums. The Company
will match, based on a sliding scale, up to $350 for the first $600 contributed
by each participant. Matching contributions plus additional discretionary
contributions will be made with Company stock purchased in the open market. The
expense for the nine months ended September 30, 2003 and 2002 amounted to
approximately $190,000 and $68,000, respectively, and for the three months ended
September 30, 2003 and 2002 amounted to approximately $165,000, and $43,000,
respectively. As of September 30, 2003, the plans owned 27,370 and 130,631
shares of Bel Fuse Inc. Class A and Class B common stock, respectively.

           The Company's Far East subsidiaries have a retirement fund covering
substantially all of their Hong Kong based full-time employees. Eligible
employees contribute up to 5% of salary to the fund. In addition, the Company
may contribute an amount up to 7% of eligible salary, as determined by Hong Kong
government regulations, in cash or Company stock. The expense for the nine
months ended September 30, 2003 and 2002 amounted to approximately $259,000 and
$84,000, respectively, and for the three months ended September 30, 2003 and
2002 amounted to approximately $275,000, and $89,000, respectively. As of
September 30, 2003, the plan owned 3,323 and 16,842 shares of Bel Fuse Inc.
Class A and Class B common stock, respectively.

         The Supplemental Executive Retirement Plan (the "Plan") is designed to
provide a limited group of key management and highly compensated employees of
the Company supplemental retirement and death benefits. The Plan was established
by the Company in 2002. Employees are selected at the sole discretion of the
Board of Directors of the Company to participate in the Plan. The Plan is
unfunded. The Company utilizes life insurance to partially cover its obligations
under the Plan. The benefits available under the Plan vary according to when and
how the participant terminates employment with the Company. If a participant
retires (with the prior written consent of the Company) on his normal retirement
date (65 years old, 20 years of service, and 5 years of Plan participation), his
normal retirement benefit under the Plan would be annual payments equal to 40%
of his average base compensation (calculated using compensation from the highest
5 consecutive calendar years of Plan participation), payable in monthly
installments for the remainder of his life. If a participant retires early from
the Company (55 years old, 20 years of service, and 5 years of Plan
participation), his early retirement benefit under the Plan would be an amount
(i) calculated as if his early retirement date were in fact his normal
retirement date, (ii) multiplied by a fraction, with the numerator being the
actual years of service the participant has with the Company and the denominator
being the years of service the participant would have had if he had retired at
age 65, and (iii) actuarially reduced to reflect the early retirement date. If a
participant dies prior to receiving 120 monthly payments under the Plan, his
beneficiary would be entitled to continue receiving benefits for the shorter of
(i) the time necessary to complete 120 monthly payments or (ii) 60 months. If a
participant dies while employed by the Company, his beneficiary would receive,
as a survivor benefit, an annual amount equal to (i) 100% of the


                                      -22-
<PAGE>

participant's annual base salary at date of death for one year, and (ii) 50% of
the participant's annual base salary at date of death for each of the following
4 years, each payable in monthly installments. The Plan also provides for
disability benefits, and a forfeiture of benefits if a participant terminates
employment for reasons other than those contemplated under the Plan. The expense
for the nine months ended September 30, 2003 and 2002 amounted to approximately
$300,000 and $96,000, respectively. The expense for the three months ended
September 30, 2003 and 2002 amounted to approximately $111,000 and $96,000,
respectively.

11.      Comprehensive Income

<TABLE>
<CAPTION>
                                        Nine Months Ended           Three Months Ended
                                          September 30,                September 30,
                                   -------------------------    -------------------------
                                       2003          2002           2003          2002
                                   -----------   -----------    -----------   -----------
<S>                                <C>           <C>            <C>           <C>
Net earnings                       $ 8,167,077   $ 1,218,464    $ 3,629,573   $ 1,746,160
Currency translation adjustment-
   net of taxes                        581,425        (9,294)        89,671        (8,226)
Increase (decrease) in
  marketable securities -
  net of taxes                          11,100       (36,000)         6,900       (43,000)
                                   -----------   -----------    -----------   -----------
Comprehensive income               $ 8,759,602   $ 1,173,170    $ 3,726,144   $ 1,694,934
                                   ===========   ===========    ===========   ===========
</TABLE>

12.      Recent Accounting Pronouncements

         In April 2002, the FASB issued SFAS No. 145 "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections". This statement eliminates the automatic classification of gain or
loss on extinguishment of debt as an extraordinary item of income and requires
that such gain or loss be evaluated for extraordinary classification under the
criteria of Accounting Principles Board No. 30 "Reporting Results of
Operations". This statement also requires sales-leaseback accounting for certain
lease modifications that have economic effects that are similar to
sales-leaseback transactions, and makes various other technical corrections to
existing pronouncements. This statement did not have a material effect on the
Company's results of operations or financial position.

         In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." This Statement requires recording
costs associated with exit or disposal activities at their fair values when a
liability has been incurred. Under previous guidance, certain exit costs were
accrued upon management's commitment to an exit plan. The Company adopted SFAS
No. 146 on January 1, 2003. The adoption of SFAS No. 146 did not have a material
impact on the Company's result of operations or financial position.


                                      -23-
<PAGE>

         In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement
No. 133 on Derivative Instruments and Hedging Activities." This statement amends
and clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities under FASB Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This Statement is effective for contracts
entered into or modified after June 30, 2003, and for hedging relationships
designated after June 30, 2003. Management believes that adopting this statement
will not have a material effect on the Company's results of operations or
financial position.

         In November 2002, the FASB issued FASB Interpretation No. 45 (FIN 45),
Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others, and interpretation of FASB
Statements No. 5, 57,and 107 and Rescission of FASB Interpretation No. 34. FIN
45 clarifies the requirements of FASB Statement No. 5, Accounting for
Contingencies, relating to the guarantor's accounting for, and disclosure of,
the issuance of certain types of guarantees. This interpretation clarifies that
a guarantor is required to recognize, at the inception of certain types of
guarantees, a liability for the fair value of the obligation undertaken in
issuing the guarantee. The initial recognition and initial measurement
provisions of this Interpretation are applicable on a prospective basis to
guarantees issued or modified after December 31, 2002, irrespective of the
guarantor's fiscal year-end. The disclosure requirements in this interpretation
are effective for financial statements of interim or annual periods ending after
December 15, 2002. The Company adopted FIN 45 on January 1, 2003. The adoption
of FIN 45 did not have a material impact on the Company's results of operations
or financial position.

         In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46, "Consolidation of Variable Interest Entities," which
addresses consolidation by business enterprises of variable interest entities.
In general, a variable interest entity is a corporation, partnership, trust, or
any other legal structure used for business purposes that either (a) does not
have equity investors with voting rights or (b) has equity investors that do not
provide sufficient financial resources for the entity to support its activities.
A variable interest entity often holds financial assets, including loans or
receivables, real estate or other property. A variable interest entity may be
essentially passive or it may engage in research and development or other
activities on behalf of another company. The objective of Interpretation No. 46
is not to restrict the use of variable interest entities but to improve
financial reporting by companies involved with variable interest entities. Until
now, a company generally has included another entity in its consolidated
financial statements only if it controlled the entity through voting interests.
Interpretation No. 46 changes that by requiring a variable interest entity to be
consolidated by a company if that company is subject to a majority of the risk
of loss from the variable interest entity's activities or entitled to receive a
majority of the entity's residual returns or both. The consolidation
requirements of Interpretation No. 46 apply immediately to variable interest
entities created after January 31, 2003. The consolidation requirements apply to
older entities in the first fiscal year or interim period beginning after June
15, 2003. Certain of the disclosure requirements apply in all financial
statements issued after January 31, 2003, regardless of when the variable
interest entity was established. The Company does not have any variable interest
entities, and, accordingly, adoption is not expected to have a material effect
on the Company's results of operations or financial position.


                                      -24-
<PAGE>

         In May 2003, the FASB issued SFAS No. 150 "Accounting for Financial
Instruments with the Characteristics of Both Liabilities and Equities". SFAS No.
150 establishes standards regarding the manner in which an issuer classifies and
measures certain types of financial instruments having characteristics of both
liabilities and equity. Pursuant to SFAS No. 150, such freestanding financial
instruments (i.e. those entered into separately from an entity's other financial
instruments or equity transactions or that are legally detachable and separately
exercisable) must be classified as liabilities or, in some cases, assets. In
addition, SFAS No. 150 requires that financial instruments containing
obligations to repurchase the issuing entity's equity shares and, under certain
circumstances, obligations that are settled by delivery of the issuer's shares
be classified as liabilities. The Statement is effective for financial
instruments entered into or modified after May 31, 2003 and for other
instruments at the beginning of the first interim period after June 15, 2003.
Management believes that adopting this statement will not have a material effect
on the Company's results of operations or financial position.


                                      -25-
<PAGE>

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 Exhibit 99.3 to the
Company's Quarterly Report on Form 10-Q for the three months ended March 31,
2003. 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 mentioned above, and
those detailed in Item 1 of the Company's Annual Report on Form 10-K for the
year ended December 31, 2002, 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 hereof or to reflect the occurrence of
unanticipated events. An investment in the Company involves various risks,
including those mentioned above and those which are detailed from time to time
in the Company's SEC filings.

         The following discussion and analysis should be read in conjunction
with the Company's consolidated financial statements and the notes related
thereto. The discussion of results, causes and trends should not be construed to
infer any conclusion that such results, causes or trends will necessarily
continue in the future.

Critical Accounting Policies
----------------------------

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

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


                                      -26-
<PAGE>

         The Company maintains allowances for doubtful accounts for estimated
losses from the inability of its customers to make required payments. If the
financial condition of the Company's customers were to deteriorate, resulting in
an impairment of their ability to make payments, additional allowances may be
required.

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

         The Company seeks sales and profit growth by expanding its existing
customer base, developing new products and by pursuing strategic acquisitions
that meet the Company's criteria relating to the market for the products: the
Company's ability to efficiently manufacture the product; synergies that are
created by the acquisition; and a purchase price that represents fair value. If
the Company's evaluation of a target company misjudges its technology, estimated
future sales and profitability levels, or ability to keep pace with the latest
technology, these factors could impair the value of the investment, which could
materially adversely affect the Company's profitability.

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

Inventories

         There was a strong demand for the Company's products during 1999-2000
due to the growth of the Telecom and Local Area Networking ("LAN") product
lines. While sales and profits increased, it was, at times, difficult to obtain
raw materials and components at reasonable prices in the Local Area Networking
and Telecommunications product lines. Many OEMS used third party contract
manufacturers, and as the Company concluded in the middle of 2001, its customers
and contract manufacturers, in many instances, ordered quantities well in excess
of their needs in order to minimize their risk of shortages and/or price
increases. In response to the increased demand for certain product lines, the
Company entered into non-cancelable forward material purchase orders based on
customer forecasts. These forward contracts were necessary to ensure the
availability of materials at prices and quantities management projected were
necessary to meet anticipated customer orders. Non-cancelable forward purchase
commitments is a customary practice in the industry.


                                      -27-
<PAGE>

         In May 2001, the Company received a number of requests from major
customers and their contract manufacturers seeking to postpone or cancel orders
they had made. The Company took immediate steps to negotiate with its customers
and suppliers. With suppliers it cancelled purchase orders where it could,
renegotiated contracts to substitute different materials, paid cancellation
penalties, or paid suppliers fees not to deliver product. Management also
believed that the raw materials on hand in these product lines were either in
excess of any foreseeable needs, or would become technologically obsolete before
a significant recovery occurred.

         Estimates were made of materials in excess of reasonable projected
needs, and, in the second quarter of 2001, a charge of $12.0 million was
recorded to reduce the carrying value of on-hand raw material inventory related
to the magnetic product lines. This charge included a reserve of $5.0 million
related to management's estimate of losses projected to be incurred on
non-cancelable purchase orders related to these product lines. Negotiations with
both customers and suppliers continued through 2002 in attempts to minimize the
Company's estimated losses associated with the cancellation of customer orders
and cancellation of non-cancelable purchase orders with suppliers. Ultimately,
the Company accepted delivery of approximately $3.1 million of the purchase
commitments it attempted to cancel and was able to mitigate losses with
suppliers for the remaining $1.9 million reserve established in June, 2001.
During that time period, raw material replacement costs dropped dramatically.

         During 2001 and each quarter of 2002, management evaluated existing
reserve levels for both non-cancelable purchase orders and other on-hand
inventory (other than what had been written-off in June 2001). Adjustments to
the existing reserve levels were made each quarter based on management's
assessments of the status of settlements with suppliers, estimates of excess
levels of on-hand inventory, existing customer backlog and general market
conditions. Through September 30, 2003, the Company was able to use
approximately $.7 million of the inventory that was included in the June 2001
net $12 million charge. Gross profit was not significantly impacted due to
comparable deductions in selling prices that were necessary to be competitive.

         When inventory is written-off, it is never written back up; the cost
remains at zero or the level to which it has been written-down. When inventory
that has been written-off is subsequently used in the manufacturing process, the
lower adjusted cost of the material is charged to cost of sales. At September
30, 2003, approximately $11.4 million of inventory (at original cost before the
write-down or reserve in 2001) was on hand, including $3.1 million of raw
materials received from the outstanding purchase commitments. During the third
quarter of 2003 approximately $2.5 million of this inventory was scrapped.
Management intends to retain the balance of this inventory for possible use in
future orders. Should any of this inventory be used in the manufacturing process
for customer orders, the improved gross profit will be recognized at the time
the completed product is shipped and the sale is recorded.


                                      -28-
<PAGE>

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

                  4th Quarter   2001   $ 164,329

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

                  1st Quarter   2003      77,069
                  2nd Quarter   2003      80,046
                  3rd Quarter   2003      28,851
                                       ---------
                                       $ 733,008
                                       =========


Results of Operations
---------------------

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

                                Percentage of Net Sales  Percentage of Net Sales
                                -----------------------  -----------------------
                                  Nine Months Ended        Three Months Ended
                                     September 30,           September 30,
                                    --------------           --------------
                                     2003    2002             2003    2002
                                    -----    -----           -----    -----

        Net sales                   100.0%   100.0%          100.0%   100.0%
        Cost of sales                72.3     78.7            71.3     77.2
        Selling, general and
         administrative expenses     18.0     18.6            16.6     15.5
        Interest expense              0.2       --             0.2       --
        Interest income               0.3      1.1             0.2      0.8
        Earnings before income
         tax provision                9.8      3.7            12.1      8.1
        Income tax provision          2.8      1.9             4.2      1.7
        Net earnings                  7.0      1.8             7.9      6.4


                                      -29-
<PAGE>

         The following table sets forth, for the period indicated, the
percentage increase (decrease) of items included in the Company's consolidated
statements of operations.

                                 Increase (Decrease)      Increase (Decrease)
                                  from Prior Period        from Prior Period
                                  -----------------        -----------------
                                  Nine Months Ended        Three Months Ended
                                  September 30, 2003       September 30, 2003
                                  compared with 2002       compared with 2002
                                  -----------------        -----------------
           Net sales                     68.5%                    67.4%
           Cost of sales                 54.6                     54.6
           Selling, general and
            administrative expenses      62.5                     78.9
           Interest expense                NM                       NM
           Interest income              (60.1)                   (54.4)
           Earnings before
            income tax provision        345.2                    149.2

           Income tax provision         140.5                    299.2
           Net earnings                 570.3                    107.9

NM= Percentage not meaningful


                                      -30-
<PAGE>


Nine Months ended September 30, 2003 vs.
----------------------------------------
  Nine Months ended September 30, 2002
  ------------------------------------

Sales
-----

         Net sales increased 68.5% from $68,641,920 during the first nine months
of 2002 to $115,632,156 during the first nine months of 2003. The Company
attributes this increase principally to sales from its two acquisitions in 2003,
Insilco and APC, of approximately $37.9 million and strong demand for magnetic
sales of $10.2 million offset, in part, by a decrease in value added sales of
approximately $.8 million. Sales in 2002 were impacted by a decline in demand
affecting the global electronic industry.

         Sales by Insilco and APC will continue to affect comparisons of 2003
quarters and 2002 quarters through the balance of 2003. The Company cannot
assure investors that magnetic products revenues will continue to grow during
the balance of 2003, especially in light of the impact that competition may have
in the market. The Company has limited visibility as to future magnetic products
sales and had sales in excess of 10% of total sales to several customers. The
loss of any of these customers could have a material adverse effect on the
Company's results of operations, financial position and cash flows.

         The significant components of the Company's sales were from magnetic
products of $88.6 million (as compared with $50.3 million during the nine months
ended September 30, 2002), fuses of $12.7 million (as compared with $12.7
million during the nine months ended September 30, 2002), plugs and cables of
$9.5 million(as compared with $-0- during the nine months ended September 30,
2002), and value added sales of $4.8 million (as compared with $5.6 million
during the nine months ended September 30, 2002).

         At this time the Company cannot quantify the extent of sales growth
arising from unit sales mix and/or price changes. Given the change in the nature
of the products purchased by customers from period to period, the Company
believes that neither unit changes or price changes are meaningful. The Company
does not believe that it experienced a material change in unit sales during the
nine months ended September 30, 2003 compared to September 30, 2002. Over the
past year newer and more sophisticated products with higher unit selling prices
have been introduced. As products become mature, average selling prices tend to
decrease. Through the Company's engineering and research effort, the Company has
been successful in adding additional value to existing product lines, which
tends to increase sales prices initially until that generation of products
becomes mature and sales prices experience price degradation. The Company
believes that with the current level of engineering and research dollars
expended and the engineering teams the Company has in place, it should continue
to be an innovative leader in its industry.


                                      -31-
<PAGE>

Cost of Sales
-------------

         Certain finished goods are manufactured by four independent third party
contractors in the Far East. Under the terms of the Company's agreements with
these contractors, the Company is only responsible for value-added costs when
finished goods pass the Company's quality control inspections. Therefore, no
value-added costs are recorded until the Company's Quality Control group
approves the finished goods. The Company's raw materials are valued as finished
goods when they are returned from these third-party contractors.

         Value-added costs are recorded as incurred for all products
manufactured at the Company's own manufacturing facilities. Such amounts are
determined based upon the estimated stage of production and include labor cost
and fringes and related allocations of factory overhead. Such costs are not
significant as a percentage of total inventory costs at any point in time. The
Company manufactures finished goods at its own manufacturing facilities in Glen
Rock, Pennsylvania, Inwood, New York, Dominican Republic and Mexico. See
"Critical Accounting Policies" above for information regarding the use of
inventories in the manufacturing process that have been written down in prior
years.

         Cost of sales as a percentage of net sales decreased from 78.7 % during
the first nine months of 2002 to 72.3% in 2003. The decrease in the cost of
sales percentage is primarily attributable to a 2.1% decrease in material cost
as a percentage of sales which offset the slightly lower gross profit margin
associated with sales of Insilco products. The decrease in material costs is
attributable to the current sales mix and bills of materials currently used in
production. The Company also had (expressed as a percentage of sales) decreases
of 1.1% for depreciation, 2.0% for direct labor and 1.3% for factory overheads.
The decrease in direct labor as a percentage of sales is primarily attributable
to the lower direct labor costs associated with the Insilco manufacturing
operations. The decrease in factory overhead expenses as a percentage of sales
is primarily attributable to the increase in sales and cost containment measures
resulting primarily from the shut down of the Company's Dallas sales,
manufacturing and research facility and the Company's Indiana research facility.
The closings of the Dallas and Indiana facilities are not expected to materially
impact the level of the Company's spending on research and development efforts.

         The acquisition of Insilco resulted in additional cost of sales in the
amount of $26.4 million during the nine months ended September 30, 2003. Such
cost represented 72.7% of net sales of Insilco products during the nine months
ended September 30, 2003. The Company expects increases in cost of sales to
continue in future quarters in relation to increases or decreases of Insilco
sales.

         Included in cost of sales are research and development expenses of $6.2
million and $4.3 million for the nine months ended September 30, 2003 and
September 30, 2002, respectively. The increase is principally attributable to
increased research and development expenditures at the Company's Power Supply
facility and the purchase of the Passive Component Group of Insilco and APC.


                                      -32-
<PAGE>



Selling, General and Administrative Expenses
--------------------------------------------

         The percentage relationship of selling, general and administrative
expenses to net sales decreased from 18.6 % during the first nine months of 2002
to 18.0% during the first nine months of 2003, in part as a result of the
Company's ability to leverage general and administrative expenses over a larger
revenue base. The Company attributes the $8.0 million increase in the dollar
amount of such expenses primarily to costs associated with the Insilco and APC
operations of approximately $5.9 million, additional salaries and benefits of
$1.4 million, additional professional fees of approximately $.6 million,
increased severance amounts of $.3 million, $.3 million write-off of the
building in Illinois and increases in sales commissions of $.2 million offset,
in part, by reduced selling expenses of approximately $.5 million. This decrease
is attributable to reduced shipping charges and sales salaries resulting from
the closing of the Texas sales facility.

         The increase in salaries and benefits is principally attributable to
bonus and salary increases; professional fees related to Sarbanes - Oxley
compliance; severance expense related to moving jobs from Hong Kong to China;
and sales expenses principally related to higher foreign sales.

         The Company anticipates continued increases in professional fees for
the remainder of the year principally associated with Sarbanes - Oxley
compliance. Future increases in sales related expenses and salaries and benefits
are more dependent on the future sales growth and profitability of the Company.
The Company anticipates additional severance expenses for the remainder of the
year, of approximately $150,000, as more jobs in Hong Kong are moved to China.
The Company anticipates increases in selling, general and administrative
expenses in future quarters principally due to the acquisition of Insilco.

Interest Income - net
---------------------

         Interest income earned on cash and cash equivalents decreased by
approximately $461,000 during the first nine months of 2003 compared to the
first nine months of 2002. The decrease is due primarily to lower interest rates
earned on cash and cash equivalents and lower cash balances due to the use of
approximately $36.1 million of cash for the acquisition of the Passive
Components Group from Insilco Technologies, Inc. and the communications products
division of APC.

Income Tax Provision
--------------------

         The provision for income taxes for the first nine months of 2003 was
$3.2 million as compared to $1.3 million for the first nine months of 2002. The
increase in the provision is due primarily to the Company's increased earnings
before income taxes for the nine months ended September 30, 2003, as compared
with the same period in 2002 and a valuation allowance of approximately $.6
million that was established in connection with foreign net operating losses.
The income tax provision is lower than the statutory federal income tax rate
primarily due to lower foreign tax rates.


                                      -33-
<PAGE>

         The Company was granted a ten year tax holiday in Macau at an effective
8% tax rate, which is 50% of the normal tax rate, and expires during 2004.
During the nine months ended September 30, 2003 this holiday had no benefit to
the Company as the entity incurred losses. The deferred tax benefit of the
losses were offset by a valuation allowance.

Net Earnings
------------

         Net earnings for the period March 22, 2003 (date of acquisition) to
September 30, 2003 includes approximately $3.4 million attributable to the
Passive Component Group. The contribution of APC was not material.

Three Months ended September 30, 2003 vs.
-----------------------------------------
   Three Months ended September 30, 2002
   -------------------------------------

Sales
-----

         Net sales increased 67.4% from $27,401,089 during the third quarter of
2002 to $45,863,648 during the third quarter of 2003. The Company attributes
this increase principally to sales from Insilco and APC of approximately $17.2
million and to strong demand for magnetic product sales, which increased by
approximately $1.3 million. Sales in 2002 were impacted by a decline in demand
affecting the global electronic industry.

         The significant components of the Company's sales for the three months
ended September 30, 2003 were from magnetic products of $35.8 million (as
compared with $21.1 million during the three months ended September 30, 2002),
plugs and cables of $4.3 million (as compared with $-0- during the three months
ended September 30, 2002), fuses of $4.4 million (as compared with $4.1 million
during the three months ended September 30, 2002) and value added products of
$1.4 million (as compared with $2.2 million during the three months ended
September 30, 2002). The increase in sales of magnetic products and plugs and
cables reflects the recent acquisition of the Passive Components Group.

         The discussion regarding unit sales and price changes set forth in the
nine month analysis is also applicable to the three months ended September 30,
2003 and 2002.

Cost of Sales
-------------

         Cost of sales as a percentage of net sales decreased from 77.2 % during
the third quarter of 2002 to 71.3% in 2003. The decrease in the cost of sales
percentage is primarily attributable to a decrease of 5% in direct labor and a
decrease of 1.9% in material cost as a percentage of sales offset in part by an
increase of 2.4% in support labor and related fringe benefits as a percentage of
sales. See "Critical Accounting Policies" above for information regarding the
use of inventories in the manufacturing process that have been written down in
prior years.

         The decrease in direct labor and material costs are primarily
attributable to the reasons set forth in the nine-month analysis. The increase
in support labor and benefits is primarily associated with high cost as a
percentage of sales associated with the Insilco operations.


                                      -34-
<PAGE>

         The acquisition of Insilco resulted in additional cost of sales in the
amount of $12.2 million during the three months ended September 30, 2003. Such
cost represented 72.5% of net sales of Insilco products during the three months
ended September 30, 2003. The Company expects increases in cost of sales to
continue in future quarters in relation to increases or decreases of Insilco
sales.

         Included in cost of sales are research and development expenses of $2.5
million and $1.5 million for the three months ended September 30, 2003 and
September 30, 2002, respectively. The increase is principally attributable to
the increased research and development expenditures associated with the purchase
of the Passive Component Group of Insilco and APC.

Selling, General and Administrative Expenses
--------------------------------------------

         The percentage relationship of selling, general and administrative
expenses to net sales increased from 15.5 % during the third quarter of 2002 to
16.6% during the third quarter of 2003. The Company attributes the $3.4 million
increase in the dollar amount of such expenses principally to costs associated
with the Insilco and APC operations of approximately $3.1 million, additional
salaries and benefits of $.4 million, additional professional fees of $.2
million and amortization of identifiable intangible assets of $.2 million in
connection with the acquisition of Insilco's Passive Component Group and $.3
million in connection with an impairment loss associated with an idle
manufacturing facility in Illinois, offset in part by lower sales salaries and
related selling expenses in the amount of $.5 million primarily associated with
lower shipping costs and commission expense.

         The increased salaries and professional fees are attributable to the
reasons set forth in the nine month analysis.

Interest Income
---------------

         Interest income earned on cash and cash equivalents decreased by
approximately $127,000 during the third quarter of 2003 compared to the third
quarter of 2002. The decrease is due primarily to the reasons set forth in the
nine-month analysis.

Income Tax Provision
--------------------

         The provision for income taxes for the third quarter of 2003 was $1.9
million as compared to $.5 million for the third quarter of 2002. The increase
in the provision is due primarily to the same reasons set forth in the nine
month analysis. The income tax provision is lower than the statutory federal
income tax rate primarily due to lower foreign tax rates.

Net Earnings
------------

         Net earnings for the quarter ended September 30, 2003 includes
approximately $1.6 million attributable to the Passive Component Group. The
contribution of APC was not material.


                                      -35-
<PAGE>

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 US dollars or the currencies of the Hong Kong dollar, the Macau
pataca or the Chinese renminbi. Commencing with the acquisition of the Passive
Components Group, the Company's European sales entity has transactions which are
denominated principally in Euros and British pounds. Conversion of these
transactions into U.S. dollars has resulted in currency exchange losses of
$44,000 which are included as income from realized foreign exchange and
approximately $581,000 in unrealized exchange gains which are included in
cumulative other comprehensive income. Any change in linkage of the U.S. dollar
and the Hong Kong dollar, the Chinese renminbi or the Macau pataca could have a
material effect on the Company's results of operations.

Liquidity and Capital Resources
-------------------------------

         Historically, the Company has financed its capital expenditures
primarily through cash flows from operating activities. Currently, due to the
recent acquisition of the Passive Components Group, the Company has borrowed
money under a secured term loan, and has unused lines of credit, as described
below. Management believes that the cash flow from operations after payments of
dividends and scheduled repayments of the term loan, combined with its existing
capital base and the Company's available lines of credit, will be sufficient to
fund its operations for the near term. Such statement constitutes a Forward
Looking Statement. Factors which could cause the Company to require additional
capital include, among other things, a softening in the demand for the Company's
existing products, an inability to respond to customer demand for new products,
potential acquisitions requiring substantial capital, future expansion of the
Company's operations and net losses that would result in net cash being used in
operating, investing and/or financing activities which result in net decreases
in cash and cash equivalents. Net losses may result in the loss of domestic and
foreign credit facilities and preclude the Company from raising debt or equity
financing in the capital markets.

           The Company has a domestic line of credit amounting to $1 million
which was unused at September 30, 2003. The Company also has a $10 million
domestic revolving line of credit which was unused at September 30, 2003.
Borrowings under this $10 million line of credit are secured by the same assets
which secure the term loan described below.


                                      -36-
<PAGE>

         On March 21, 2003, the Company entered into a $10 million secured term
loan. The loan was used to partially finance the Company's acquisition of
Insilco's Passive Components division. The loan agreement requires 20 equal
quarterly installments of principal with a final maturity on March 31, 2008 and
bears interest at LIBOR plus 1.25 percent (3.1875 percent at September 30, 2003)
payable monthly. The loan is collateralized with a first priority security
interest in 65% of all the issued and outstanding shares of the capital stock of
certain of the foreign subsidiaries of Bel Fuse Inc. and all other personal
property and certain real property of Bel Fuse Inc. The Company is required to
maintain certain financial covenants, as defined in the agreement. For the nine
and three months ended September 30, 2003, the Company recorded interest expense
of $192,000 and $-0-, respectively and is in compliance with all of the
covenants contained in the loan agreement.

           The Company's Hong Kong subsidiary has an unsecured line of credit of
approximately $2 million, which was unused at September 30, 2003. This line of
credit expires on December 31, 2003. Borrowing on this line of credit is
guaranteed by the U.S. parent.

           For information regarding further commitments under the Company's
operating leases, see Note 11 of Notes to the Company's Consolidated Financial
Statements in the Company's Annual Report on Form 10-K for the year ended
December 31, 2002.

         On March 22, 2003, the Company acquired certain assets, subject to
certain liabilities, and common shares of certain entities comprising Insilco
Technologies, Inc.'s ("Insilco") passive component group for $37.0 million in
cash, including transaction costs of approximately $1.3 million. Purchase price
allocations which have been initially estimated by management will be adjusted
after management considers a number of factors, including valuations and
independent formal appraisals, when making these determinations. Management has
estimated that approximately $4.1 million of identifiable intangible assets
arose from the transaction which will be amortized on a straight-line basis over
a period of five years. As of March 22, 2003, date of acquisition, a $1.0
million plant closing reserve was established in connection with a Mexican
manufacturing facility. As of September 30, 2003, approximately $.3 million
remains as a liability.

         Effective January 2, 2003, the Company entered into an asset purchase
agreement with Advanced Power Components plc ("APC") to purchase the
communication products division of APC for $5.5 million in cash plus the
assumption of certain liabilities. The Company will be required to make
contingent payments equal to 5% of sales (as defined) in excess of $6.3 million
per year for the years 2003 and 2004. Through September 30, 2003, $-0- of
contingent payments have been made. Purchase price allocations have been
initially estimated by management and will be adjusted after management
considers a number of factors, including valuations and independent formal
appraisals, when making these determinations. Management has estimated that the
excess of the purchase price over net assets acquired was approximately $2.0
million and has been allocated to goodwill.


                                      -37-
<PAGE>

         These transactions were accounted for using the purchase method of
accounting and, accordingly, the results of operations of Insilco have been
included in the Company's financial statements from March 22, 2003 and the
results of operations of APC have been included in the Company's financial
statements from January 2, 2003. Significant changes in balance sheet amounts
between December 31, 2002 and September 30, 2003 are primarily attributable to
the fact that these acquisitions were reflected in the Company's September 30,
2003 balance sheet and were not reflected in the Company's December 31, 2002
balance sheet.

         Under the terms of the E-Power and Current Concepts, Inc. acquisition
agreements, of May 11, 2001, the Company will be required to make contingent
purchase price payments up to an aggregate of $7.6 million should the acquired
companies attain specified sales levels. E-Power will be paid $2.0 million in
contingent purchase price payments when sales, as defined, reach $15.0 million
and an additional $4.0 million when sales reach $25.0 million on a cumulative
basis through May, 2007. No payments have been made to date with respect to
E-Power. Current Concepts will be paid 16% of sales, as defined, on the first
$10.0 million in sales through May 2007. During the nine months ended September
30, 2003 the Company paid approximately $136,000 in contingent purchase price
payments to Current Concepts ($29,000 through March 31, 2003, $65,000 during the
second quarter of 2003, and $42,000 during the third quarter of 2003). The
contingent purchase price payments are accounted for as additional purchase
price and increase goodwill when such payment obligations are incurred.

           On May 9, 2000, the Board of Directors authorized the repurchase of
up to 10% of the Company's outstanding common shares from time to time in market
or privately negotiated transactions. As of September 30, 2003, the Company had
purchased and retired 136,000 Class B shares at a cost of approximately $42,000,
which reduced the number of Class B common shares outstanding.

         During the nine months ended September 30, 2003, the Company's cash and
cash equivalents decreased by approximately $8.3 million, reflecting
approximately $36.2 million in payments for acquisitions, $2.0 million in
purchases of property, plant and equipment, $1.2 million in purchase of
marketable securities and $1.3 million in dividends offset, in part, by $9.0
million from proceeds from net borrowings (net of repayments), $4.9 million from
the sale of marketable securities, $1.7 million provided by the exercise of
stock options, and $16.9 million provided by operating activities.

         Increases in accounts receivable, inventories, prepaid expenses and
property, plant and equipment (approximately $38.4 million of the $40.1 million
increase) are associated principally with the acquisition of Insilco and APC.

         Cash, marketable securities and cash equivalents and accounts
receivable comprised approximately 48.5% and 55.0% of the Company's total assets
at September 30, 2003 and December 31, 2002, respectively. The Company's current
ratio (i.e., the ratio of current assets to current liabilities) was 5.3 to 1
and 8.7 to 1 at September 30, 2003 and December 31, 2002, respectively.


                                      -38-
<PAGE>

Other Matters
-------------

         Territories of Hong Kong, Macau and The People's Republic of China
         ------------------------------------------------------------------

         The Territory of Hong Kong became a Special Administrative Region
("SAR") of The People's Republic of China during 1997. The territory of Macau
became a SAR of The People's Republic of China at the end of 1999. Management
cannot presently predict what future impact, if any, this will have on the
Company or how the political climate in China will affect its contractual
arrangements in China. Substantially all of the Company's manufacturing
operations and approximately 59% of its identifiable assets are located in Hong
Kong, Macau, and The People's Republic of China. Accordingly, events resulting
from any change in the "Most Favored Nation" status granted to China by the U.S.
could have a material adverse effect on the Company.

         Accounting Pronouncements
         -------------------------

         In August 2001, the FASB issued SFAS No. 143 "Accounting for Asset
Retirement Obligations". SFAS No. 143 addresses financial accounting and
reporting for obligations and costs associated with the retirement of tangible
long-lived assets. The Company adopted SFAS 143 on January 1, 2003. The adoption
of SFAS No.143 did not have a material impact on the Company's results of
operations or financial position.

         In April 2002, the FASB issued SFAS No. 145 "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections". This statement eliminates the automatic classification of gain or
loss on extinguishment of debt as an extraordinary item of income and requires
that such gain or loss be evaluated for extraordinary classification under the
criteria of Accounting Principles Board No. 30 "Reporting Results of
Operations". This statement also requires sales-leaseback accounting for certain
lease modifications that have economic effects that are similar to
sales-leaseback transactions, and makes various other technical corrections to
existing pronouncements. This statement did not have a material effect on the
Company's results of operations or financial position.

         In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." This Statement requires recording
costs associated with exit or disposal activities at their fair values when a
liability has been incurred. Under previous guidance, certain exit costs were
accrued upon management's commitment to an exit plan. The Company adopted SFAS
No. 146 on January 1, 2003. The adoption of SFAS No. 146 did not have a material
impact on the Company's result of operations or financial position.

         In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation-Transition and Disclosure, an amendment of FASB
Statement No. 123". SFAS No. 148 provides alternative methods of transition for
a voluntary change to the fair value based method of accounting for stock-based
employee compensation. It also requires disclosure in both annual and interim
financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results. SFAS No. 148
is effective for annual and interim periods beginning after December 15, 2002.


                                      -39-
<PAGE>

         The Company will continue to account for stock-based employee
compensation under the recognition and measurement principle of APB Opinion No.
25 and related interpretations. The Company complied with the additional annual
and interim disclosure requirements effective December 31, 2002 and September
30, 2003.

         In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement
No. 133 on Derivative Instruments and Hedging Activities." This statement amends
and clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities under FASB Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This Statement is effective for contracts
entered into or modified after June 30, 2003, and for hedging relationships
designated after June 30, 2003. Management believes that adopting this Statement
will not have a material effect on the Company's results of operations or
financial condition.

         In November 2002, the FASB issued FASB Interpretation No. 45 (FIN 45),
Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others, and interpretation of FASB
Statements No. 5, 57,and 107 and Rescission of FASB Interpretation No. 34. FIN
45 clarifies the requirements of FASB Statement No. 5, Accounting for
Contingencies, relating to the guarantor's accounting for, and disclosure of,
the issuance of certain types of guarantees. This interpretation clarifies that
a guarantor is required to recognize, at the inception of certain types of
guarantees, a liability for the fair value of the obligation undertaken in
issuing the guarantee. The initial recognition and initial measurement
provisions of this Interpretation are applicable on a prospective basis to
guarantees issued or modified after December 31, 2002, irrespective of the
guarantor's fiscal year-end. The disclosure requirements in this interpretation
are effective for financial statements of interim or annual periods ending after
December 15, 2002. The Company adopted FIN 45 on January 1, 2003. The adoption
of FIN 45 did not have a material impact on the Company's results of operations
or financial position.

         In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46, "Consolidation of Variable Interest Entities," which
addresses consolidation by business enterprises of variable interest entities.
In general, a variable interest entity is a corporation, partnership, trust, or
any other legal structure used for business purposes that either (a) does not
have equity investors with voting rights or (b) has equity investors that do not
provide sufficient financial resources for the entity to support its activities.
A variable interest entity often holds financial assets, including loans or
receivables, real estate or other property. A variable interest entity may be
essentially passive or it may engage in research and development or other
activities on behalf of another company. The objective of Interpretation No. 46
is not to restrict the use of variable interest entities but to improve
financial reporting by companies involved with variable interest entities. Until
now, a company generally has included another entity in its consolidated
financial statements only if it controlled the entity through voting interests.
Interpretation No. 46 changes that by requiring a variable interest entity to be
consolidated by a company if that company is subject to a majority of the risk
of loss from


                                      -40-
<PAGE>

the variable interest entity's activities or entitled to receive a majority of
the entity's residual returns or both. The consolidation requirements of
Interpretation No. 46 apply immediately to variable interest entities created
after January 31, 2003. The consolidation requirements apply to older entities
in the first fiscal year or interim period beginning after June 15, 2003.
Certain of the disclosure requirements apply in all financial statements issued
after January 31, 2003, regardless of when the variable interest entity was
established. The Company does not have any variable interest entities, and,
accordingly, adoption is not expected to have a material effect on the Company's
results of operations or financial position.

         In May 2003, the FASB issued SFAS No. 150 "Accounting for Financial
Instruments with the Characteristics of Both Liabilities and Equities". SFAS No.
150 establishes standards regarding the manner in which an issuer classifies and
measures certain types of financial instruments having characteristics of both
liabilities and equity. Pursuant to SFAS No. 150, such freestanding financial
instruments (i.e. those entered into separately from an entity's other financial
instruments or equity transactions or that are legally detachable and separately
exercisable) must be classified as liabilities or, in some cases, assets. In
addition, SFAS No. 150 requires that financial instruments containing
obligations to repurchase the issuing entity's equity shares and, under certain
circumstances, obligations that are settled by delivery of the issuer's shares
be classified as liabilities. The Statement is effective for financial
instruments entered into or modified after May 31, 2003 and for other
instruments at the beginning of the first interim period after June 15, 2003.
Management believes adopting this statement will not have a material effect on
the Company's statement of operations or financial position.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

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

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

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

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


                                      -41-
<PAGE>

     Item 4.  Controls and Procedures

a)       Disclosure controls and procedures. As of the end of the Company's most
         ----------------------------------
         recently completed fiscal quarter (the registrant's fourth fiscal
         quarter in the case of an annual report) covered by this report, the
         Company carried out an evaluation, with the participation of the
         Company's management, including the Company's Chief Executive Officer
         and Chief Financial Officer, of the effectiveness of the Company's
         disclosure controls and procedures pursuant to Securities Exchange Act
         Rule 13a-15. Based upon that evaluation, the Company's Chief Executive
         Officer and Chief Financial Officer concluded that the Company's
         disclosure controls and procedures are effective in ensuring that
         information required to be disclosed by the Company in the reports that
         it files or submits under the Securities Exchange Act is recorded,
         processed, summarized and reported, within the time periods specified
         in the SEC's rules and forms.

a)       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 reasonably likely
         to materially affect, the Company's internal control over financial
         reporting.

PART II. Other Information

     Item 1.  Legal Proceedings
              -----------------

a)       The Company commenced an arbitration proceeding before the American
Arbitration Association against Lucent Technologies, Inc. in or about December
2000. The arbitration arises out of an Agreement for the Purchase and Sale of
Assets, dated October 2, 1998 (the "Asset Purchase Agreement"), among Bel Fuse
Inc., Lucent Technologies, Inc. and Lucent Technologies Maquiladores, Inc., and
a related Global Procurement Agreement, dated October 2, 1998 (the "Supply
Agreement"), between Lucent Technologies, Inc., as Buyer, and Bel Fuse Inc., as
Supplier. Pursuant to the Asset Purchase Agreement, the Company purchased
substantially all of the assets of Lucent's signal transformer business.
Pursuant to the Supply Agreement, Lucent agreed that except for limited
instances where Lucent was obligated to purchase product elsewhere, for a term
of 3 1/2 years, Lucent would be obligated, on an as required basis, to purchase
from the Company all of Lucent's requirements for signal transformer products.
The Supply Agreement also provided that the Company would be given the
opportunity to furnish quotations for the sale of other products.

         The Company is seeking (in arbitration proceedings) monetary damages
for alleged breaches by Lucent of the Asset Purchase Agreement and the Supply
Agreement. In its answer, Lucent denied many of the material allegations made by
the Company and also asserted two counterclaims. The counterclaims seek recovery
for alleged losses, including loss of revenue, sustained by Lucent as a result
of the Company's alleged breach of various provisions of the Supply Agreement.
The parties are currently engaged in extensive discovery proceedings. The
Company believes it has substantial and meritorious claims against Lucent and
substantial and meritorious defenses to Lucent's counterclaims. However, the
Company cannot predict how the arbitrator will decide this matter and whether it
will have a material effect on the Company's consolidated financial statements.


                                      -42-
<PAGE>

b)       The Company has received a letter from a third party which states that
its patent covers all of the Company's modular jack products and indicates the
third party's willingness 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 Insilco; an annual minimum
royalty of $500,000; payment of all attorney fees and marking of all licensed
ICM's with the third party's patent number. The Company believes that none of
its products are covered by this patent. However the Company cannot predict the
outcome of this matter and whether it will have a material effect on the
Company's consolidated financial statements.

c)       The Company has received a letter from a third party which states that
its patent covers certain of the Company's modular jack products and indicates
the third party's willingness to grant a non transferable license to the Company
for an up front fee of $500,000 plus a 6% royalty on future sales. The Company
believes that none of its products are covered by this patent. However the
Company cannot predict the outcome of this matter and whether it will have a
material effect on the Company's consolidated financial statements.


Item 6.  Exhibits and Reports on Form 8-K
         --------------------------------

         (a)      Exhibits:

                  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.

                  Exhibit 99.4 - Exhibit 99.3 of the Company's Quarterly Report
                  on Form 10-Q for the quarter ended March 31, 2003 is hereby
                  incorporated by reference.

         (b)      Current Report on Form 8-K:

                  The Company Submitted a Current Report On Form 8-K on July 28,
                  2003, disclosing (under Items 7 and 12) results of operations
                  for the quarter ended June 30, 2003.


                                      -43-
<PAGE>

                                   SIGNATURES

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

                                      BEL FUSE INC.



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

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

Dated:  November 12, 2003


                                      -44-
<PAGE>

                                  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.

Exhibit 99.4 - Exhibit 99.3 of the Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 2003 is hereby incorporated by reference.