EX-99.1 2 c50929exv99w1.htm EX-99.1 EX-99.1
Exhibit 99.1
         
(BELDEN LOGO)
  7733 Forsyth Boulevard
Suite 800
St. Louis, Missouri 63105
  Phone: 314.854.8000
Fax: 314.854.8003
 
      www.Belden.com
News Release
     
From:
  Belden Investor Relations
 
  314.854.8054
Belden Announces First Quarter 2009 Results
First Quarter 2009 Highlights
    Adjusted net income per diluted share was $0.16 in the quarter.
 
    Free cash flow for the first quarter, excluding restructuring related severance payments of $22.8 million, was $25.9 million.
 
    First quarter adjusted operating margin was 4.9 percent. Excluding the wireless segment, adjusted operating margin was 7.7 percent.
 
    The Company opened its new manufacturing facility in Suzhou, China, its largest facility outside of North America.
 
    Revenue and EPS, adjusted for certain items, for the second quarter of 2009 are expected to be between $340 million and $350 million and $0.25 and $0.30 per share, respectively.
St. Louis, Missouri — Wednesday, April 29, 2009 — Belden (NYSE:BDC), a leader in the design, manufacture, and marketing of signal transmission solutions for industrial automation, data networking, and a wide range of specialty electronics markets, today announced results of its 2009 fiscal first quarter.
First Quarter 2009 Results
The Company reported first quarter 2009 revenue of $328.5 million and an operating loss of $37.6 million, compared to revenue and operating income of $511.8 million and $26.6 million in the first quarter of 2008, respectively. The Company reported a net loss of $32.5 million, or ($0.70) per diluted share, down from net income of $12.9 million, or $0.27 per diluted share, in the prior year period. The current quarter’s revenue included $19.0 million of unfavorable currency translation as compared to the prior year first quarter. Cash flow from operations was $12.6 million during the quarter, and net of capital expenditures was $3.1 million.
During the quarter, Belden recorded pre-tax non-cash asset impairment charges of $24.7 million, pre-tax severance charges of $25.9 million, and other pre-tax costs of $4.6 million, all of which were associated with the 2008 global restructuring plan and its new first quarter actions. In the first quarter of 2008, the Company incurred pre-tax charges of $25.2 million for severance, asset impairment, and other costs associated with restructuring actions in North America and Europe.

 


 

Adjusted for these items, operating income in the first quarter of 2009 was $16.1 million or 4.9 percent of revenue, compared to $51.3 million or 10.0 percent a year ago. Adjusted net income per diluted share was $0.16 in the quarter, compared to $0.67 in the first quarter of 2008. See the attached schedule, Adjusted Operating Results, for a reconciliation of GAAP results to adjusted results.
“Despite an economic environment generally as challenging as we expected, we are pleased with the overall performance of our business,” said John Stroup, President and Chief Executive Officer of Belden. “However, the environment in Europe has proven to be more demanding than initially expected. Accordingly, we are taking additional actions to size our business for what we expect to be a longer period of economic weakness.”
New First Quarter 2009 Restructuring Activities
During the quarter, the Company announced the following restructuring actions which resulted in non-cash asset impairment of $21.2 million pre-tax and severance of $13.8 million pre-tax:
    The closure of connector manufacturing facilities in Germany and the transfer of their production to facilities in Eastern Europe.
 
    The departure of Wolfgang Babel, the former President of Belden Europe, Middle East and Africa (EMEA). John Stroup, President and Chief Executive Officer of Belden will lead the EMEA business segment until a permanent replacement is found.
Stroup commented, “Although we expect the economy to remain challenging throughout the year, we are off to a strong start on our cost reduction programs. As a result of the hard work of our associates around the globe, we continue to make investments in our Lean enterprise and organic growth strategic initiatives.”
Credit Facility Amendment
During the quarter the Company amended its $350 million senior secured revolving credit facility. In general, the amendment changed the definition of EBITDA used in the computation of the 3.5 gross debt-to-EBITDA leverage ratio covenant in the agreement and increased the cost of borrowings under the facility by 100 basis points.
The amendment provides the Company with additional flexibility in managing liquidity through the weaker global demand in its served markets. This action, in conjunction with the Company’s strong cash generation capacity and its $224.4 million cash on hand, provides the Company with the liquidity necessary to implement its long-term strategies.
Outlook
The Company expects second quarter revenue and EPS, excluding the impact of the deferral of revenues and cost of goods sold with respect to its wireless segment and the impact of charges associated with already announced restructuring actions, to be between $340 million and $350

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million and $0.25 and $0.30 per share, respectively.
“While still difficult, we have seen some stabilization in our markets, and we expect our channel partners to continue carefully managing their inventory levels as we jointly work our way through this difficult period.”
Forward Looking Statements
Statements in this release other than historical facts are “forward looking statements” made in reliance upon the safe harbor of the Private Securities Litigation Reform Act of 1995. These forward looking statements are based on forecasts and projections about the industries served by the Company and about general economic conditions. They reflect management’s beliefs and expectations. They are not guarantees of future performance and they involve risk and uncertainty. The Company’s actual results may differ materially from these expectations. The current global economic slowdown has adversely affected our results of operations and may continue to do so. Turbulence in financial markets may increase our borrowing costs. Some additional factors that may cause actual results to differ from the Company’s expectations include demand for the Company’s products; the cost and availability of materials including copper, plastic compounds derived from fossil fuels, and other materials; energy costs; the Company’s ability to integrate successfully the acquired businesses; and other factors. For a more complete discussion of risk factors, please see our Annual Report on Form 10-K for the year ended December 31, 2008, filed with the SEC on February 27, 2009. Belden disclaims any duty to update any forward looking statements as a result of new information, future developments, or otherwise.
About Belden
Sending All the Right Signals — from industrial automation to data centers, from broadcast studios to aerospace, from cutting-edge wireless communications to consumer electronics, Belden people are committed to delivering the best signal transmission solutions in the world. Belden associates work in copper cable, fiber, wireless technology, connectors, switches and active components to bring voice, video and data to your mission-critical application. With 2008 revenue of $2.0 billion, Belden has manufacturing capability in North America, Europe and Asia. To obtain additional information contact Investor Relations at 314-854-8054, or visit our website at www.belden.com.
     
Contact:
   
 
  Belden Investor Relations
 
  314-854-8054

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BELDEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                 
    Three Months Ended  
    March 29, 2009     March 30, 2008  
    (In thousands, except per share amounts)  
Revenues
  $ 328,512     $ 511,826  
Cost of sales
    (244,319 )     (366,009 )
 
           
Gross profit
    84,193       145,817  
Selling, general and administrative expenses
    (76,697 )     (95,163 )
Research and development
    (16,555 )     (9,071 )
Amortization of intangibles
    (3,865 )     (2,552 )
Asset impairment
    (24,723 )     (11,549 )
Loss on sale of assets
          (884 )
 
           
Operating income (loss)
    (37,647 )     26,598  
Interest expense
    (7,323 )     (8,343 )
Interest income
    364       957  
Other income (expense)
    (251 )     1,168  
 
           
Income (loss) before taxes
    (44,857 )     20,380  
Income tax benefit (expense)
    12,403       (7,495 )
 
           
Net income (loss)
  $ (32,454 )   $ 12,885  
 
           
 
               
Weighted average number of common shares and equivalents:
               
Basic
    46,526       44,139  
Diluted
    46,526       48,377  
 
               
Basic income (loss) per share
  $ (0.70 )   $ 0.29  
 
               
Diluted income (loss) per share
  $ (0.70 )   $ 0.27  
 
               
Dividends declared per share
  $ 0.05     $ 0.05  

 


 

BELDEN INC.
OPERATING SEGMENT INFORMATION
(Unaudited)
                                 
    External                     Operating  
    Customer     Affiliate     Total     Income  
Three Months Ended March 29, 2009   Revenues     Revenues     Revenues     (Loss)  
            (In thousands)          
Americas
  $ 182,210     $ 7,991     $ 190,201     $ 24,658  
Wireless
    12,003             12,003       (8,322 )
EMEA
    88,061       12,473       100,534       (43,245 )
Asia Pacific
    46,238             46,238       3,334  
 
                       
Total Segments
    328,512       20,464       348,976       (23,575 )
Corporate expenses
                      (8,357 )
Eliminations
          (20,464 )     (20,464 )     (5,715 )
 
                       
Total
  $ 328,512     $     $ 328,512     $ (37,647 )
 
                       
 
                               
Three Months Ended March 30, 2008
                               
Americas
  $ 256,594     $ 20,360     $ 276,954     $ 21,661  
Wireless
                       
EMEA
    161,530       20,898       182,428       16,831  
Asia Pacific
    93,702             93,702       11,287  
 
                       
Total Segments
    511,826       41,258       553,084       49,779  
Corporate expenses
                      (13,896 )
Eliminations
          (41,258 )     (41,258 )     (9,285 )
 
                       
Total
  $ 511,826     $     $ 511,826     $ 26,598  
 
                       
 
                               
Three Months Ended June 29, 2008
                               
Americas
  $ 278,578     $ 17,017     $ 295,595     $ 48,819  
Wireless
                       
EMEA
    171,688       23,767       195,455       24,398  
Asia Pacific
    106,037       111       106,148       15,775  
 
                       
Total Segments
    556,303       40,895       597,198       88,992  
Corporate expenses
                      (12,327 )
Eliminations
          (40,895 )     (40,895 )     (10,807 )
 
                       
Total
  $ 556,303     $     $ 556,303     $ 65,858  
 
                       
 
                               
Three Months Ended September 28, 2008
                               
Americas
  $ 277,235     $ 13,692     $ 290,927     $ 51,076  
Wireless
    7,792       38       7,830       (8,784 )
EMEA
    139,489       20,818       160,307       11,674  
Asia Pacific
    95,978             95,978       11,755  
 
                       
Total Segments
    520,494       34,548       555,042       65,721  
Corporate expenses
                      (10,824 )
Eliminations
          (34,548 )     (34,548 )     (7,159 )
 
                       
Total
  $ 520,494     $     $ 520,494     $ 47,738  
 
                       
 
                               
Three Months Ended December 31, 2008
                               
Americas
  $ 228,840     $ 10,499     $ 239,339     $ (14,799 )
Wireless
    5,930       260       6,190       (45,533 )
EMEA
    104,965       20,156       125,121       (271,282 )
Asia Pacific
    77,532             77,532       (104,910 )
 
                       
Total Segments
    417,267       30,915       448,182       (436,524 )
Corporate expenses
                      (37,842 )
Eliminations
          (30,915 )     (30,915 )     (8,016 )
 
                       
Total
  $ 417,267     $     $ 417,267     $ (482,382 )
 
                       

 


 

BELDEN INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
                 
    Three Months Ended  
    March 29, 2009     March 30, 2008  
    (In thousands)  
Cash flows from operating activities:
               
Net income (loss)
  $ (32,454 )   $ 12,885  
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
               
Depreciation and amortization
    13,288       13,758  
Share-based compensation
    2,020       3,287  
Provision for inventory obsolescence
    2,548       1,660  
Asset impairment
    24,723       11,549  
Loss on disposal of tangible assets
          884  
Amortization of discount on convertible subordinated notes
          524  
Pension funding in excess of pension expense
    (2,318 )     (2,650 )
Tax deficiency (benefit) related to share-based compensation
    1,104       (895 )
Changes in operating assets and liabilities, net of the effects of currency exchange rate changes and acquired businesses:
               
Receivables
    40,847       1,091  
Inventories
    29,497       (3,927 )
Deferred cost of sales
    228        
Accounts payable
    (31,204 )     (8,881 )
Accrued liabilities
    (18,372 )     172  
Deferred revenue
    (49 )      
Accrued taxes
    (11,209 )     7,956  
Other assets
    (2,347 )     (1,695 )
Other liabilities
    (3,679 )     (5,026 )
 
           
Net cash provided by operating activities
    12,623       30,692  
 
               
Cash flows from investing activities:
               
Capital expenditures
    (9,554 )     (6,905 )
Proceeds from disposal of tangible assets
          39,140  
Cash used for other investing activities
    (18 )     (61 )
 
           
Net cash provided by (used for) investing activities
    (9,572 )     32,174  
 
               
Cash flows from financing activities:
               
Cash dividends paid
    (2,373 )     (2,251 )
Debt issuance costs
    (1,541 )      
Tax benefit (deficiency) related to share-based compensation
    (1,104 )     895  
Payments under share repurchase program
          (36,298 )
Proceeds from exercise of stock options
          4,300  
 
           
Net cash used for financing activities
    (5,018 )     (33,354 )
 
               
Effect of foreign currency exchange rate changes on cash and cash equivalents
    (1,003 )     7,366  
 
           
 
               
Increase (decrease) in cash and cash equivalents
    (2,970 )     36,878  
Cash and cash equivalents, beginning of period
    227,413       159,964  
 
           
Cash and cash equivalents, end of period
  $ 224,443     $ 196,842  
 
           
Free cash flow is defined as net cash provided by operating activities less capital expenditures. Free cash flow was $3,069 ($12,623 - $9,554) and $23,787 ($30,692 - $6,905) for the three months ended March 29, 2009 and March 30, 2008, respectively.

 


 

BELDEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
                 
    March 29, 2009     December 31, 2008  
    (Unaudited)          
    (In thousands)  
ASSETS
               
Current assets:
               
Cash and cash equivalents
  $ 224,443     $ 227,413  
Receivables
    248,393       292,236  
Inventories, net
    181,228       216,022  
Deferred income taxes
    19,450       22,606  
Other current assets
    42,710       34,826  
 
           
 
               
Total current assets
    716,224       793,103  
 
               
Property, plant and equipment, less accumulated depreciation
    301,998       324,569  
Goodwill
    316,719       321,478  
Intangible assets, less accumulated amortization
    143,621       156,025  
Other long-lived assets
    51,723       53,388  
 
           
 
  $ 1,530,285     $ 1,648,563  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current liabilities:
               
Accounts payable
  $ 128,484     $ 160,744  
Accrued liabilities
    152,659       180,801  
 
           
 
               
Total current liabilities
    281,143       341,545  
 
               
Long-term debt
    590,000       590,000  
Postretirement benefits
    121,006       120,256  
Deferred income taxes
    1,248       4,270  
Other long-term liabilities
    18,531       21,624  
Stockholders’ equity:
               
Common stock
    503       503  
Additional paid-in capital
    584,026       585,704  
Retained earnings
    72,145       106,949  
Accumulated other comprehensive income (loss)
    (7,903 )     10,227  
Treasury stock
    (130,414 )     (132,515 )
 
           
 
               
Total stockholders’ equity
    518,357       570,868  
 
           
 
               
 
  $ 1,530,285     $ 1,648,563  
 
           

 


 

BELDEN INC.
ADJUSTED OPERATING RESULTS
(Unaudited)
In addition to reporting financial results in accordance with accounting principles generally accepted in the United States, we provide operating results adjusted for certain items including asset impairment, severance charges, revenue deferrals related to our Wireless segment, and gains (losses) recognized on the disposal of certain tangible assets. We utilize the adjusted results to review our ongoing operations without the effect of these adjustments and for comparison to budgeted operating results. We believe these adjusted results are useful to investors because they help them compare our results to previous periods and provide insights into underlying trends in the business. Adjusted results should be considered only in conjunction with results reported according to accounting principles generally accepted in the United States.
                         
    As              
Three Months Ended March 29, 2009   Reported     Adjustments     Adjusted  
    (In thousands, except percentages and per share amounts)
 
                       
Revenues
  $ 328,512     $ (49 )   $ 328,463  
 
                       
Gross profit
  $ 84,193     $ 17,895     $ 102,088  
as a percent of revenues
    25.6 %             31.1 %
 
                       
Operating income (loss)
  $ (37,647 )   $ 53,727     $ 16,080  
as a percent of revenues
    -11.5 %             4.9 %
 
                       
Net income (loss)
  $ (32,454 )   $ 39,712     $ 7,258  
as a percent of revenues
    -9.9 %             2.2 %
 
                       
Net income (loss) per diluted share
  $ (0.70 )   $ 0.86     $ 0.16  
 
                       
Three Months Ended March 30, 2008
                       
 
                       
Revenues
  $ 511,826     $     $ 511,826  
 
                       
Gross profit
  $ 145,817     $ 3,956     $ 149,773  
as a percent of revenues
    28.5 %             29.3 %
 
                       
Operating income
  $ 26,598     $ 24,688     $ 51,286  
as a percent of revenues
    5.2 %             10.0 %
 
                       
Net income
  $ 12,885     $ 19,298     $ 32,183  
as a percent of revenues
    2.5 %             6.3 %
 
                       
Net income per diluted share
  $ 0.27     $ 0.40     $ 0.67  
Adjustments for the three months ended March 29, 2009 included pre-tax operating charges for severance, asset impairment, and other costs of $25.9 million, $24.7 million, and $3.1 million, respectively, and pre-tax non-operating charges of $1.5 million.
Adjustments for the three months ended March 30, 2008 included pre-tax operating charges for severance, asset impairment, loss on the disposal of certain tangible assets, and other costs of $11.9 million, $11.5 million, $0.9 million, and $0.4 million, respectively, and pre-tax non-operating charges of $0.5 million.