EX-99.1 2 c52654exv99w1.htm EX-99.1 exv99w1
EXHIBIT 99.1
           
()   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 Second Quarter 2009 Results
Second Quarter 2009 Highlights
    Adjusted net income per diluted share was $0.34 in the quarter
 
    Free cash flow during the second quarter was $47.9 million
 
    Second quarter adjusted operating margin was 8.5 percent. To ease the comparison to 2008 results, the adjusted operating margin excluding the wireless segment was 11.0 percent
 
    Working capital turns improved 1.4 turns sequentially and 1.6 turns year-over-year to 7.3 turns
 
    Revenue and EPS, adjusted for certain items, for the third quarter of 2009 are expected to be between $335 million and $345 million and $0.20 and $0.25 per share, respectively
St. Louis, Missouri — Wednesday, July 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 second quarter.
Second Quarter 2009 Results
The Company reported second quarter 2009 revenue of $343.8 million and operating income of $4.3 million, compared to revenue and operating income of $556.3 million and $65.9 million in the second quarter of 2008, respectively. The Company reported a net loss of $4.9 million, or ($0.10) per diluted share, down from net income of $41.8 million, or $0.88 per diluted share, in the prior year period. Revenue in the most recent quarter included $19.4 million of unfavorable currency translation as compared to the prior year second quarter. Cash flow from operations was $56.7 million during the quarter, and net of capital expenditures was $47.9 million.
During the quarter, Belden recorded pre-tax operating charges for loss on the sale of assets associated with the divestiture of HEW, a German cable business, of $17.2 million, non-cash asset impairment charges of $1.5 million and other costs of $6.2 million, which include costs associated with the Company’s global restructuring plan. In the second quarter of 2008, the Company incurred pre-tax operating charges of $4.3 million for severance, pension

 


 

settlements, and other costs associated with restructuring actions in North America and Europe.
Adjusted for these items, operating income in the second quarter of 2009 was $29.2 million or 8.5 percent of revenue, compared to $70.1 million or 12.6 percent a year ago. Adjusted net income per diluted share was $0.34 in the quarter, compared to $0.97 in the second quarter of 2008. See the attached schedule, Adjusted Operating Results, for a reconciliation of GAAP results to adjusted results.
“Our ability to expand gross profit margins and increase working capital turns despite the continuing pressures of the global economic environment is reflective of our successful restructuring initiatives and commitment to the principles of Lean enterprise,” said John Stroup, President and Chief Executive Officer of Belden. “Although we’re beginning to see signs of stabilization, we believe it is prudent to maintain our focus on executing our cost reduction programs and we will continue investing in our strategic growth initiatives to increase profitability and overall market share, which should serve us well when our markets recover.”
Senior Subordinated Notes
In the third quarter, the Company completed a $200 million aggregate principal senior subordinated notes offering due 2019 at a coupon of 9.25% and a yield of 9.75%. Belden used the net proceeds from this offering to repay existing debt under its senior secured credit facility.
“Although this offering results in an incremental quarterly interest expense of $0.05 per share, we are very pleased with our ability to place these notes in a difficult market under favorable terms. Our capital structure is better positioned to support our current operations and future opportunities,” commented Stroup.
Outlook
The Company expects third 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 $335 million and $345 million and $0.20 and $0.25 per share, respectively.
Stroup remarked, “Although we expect third quarter results to be affected by European seasonality, continued economic uncertainty and the lost revenues associated with the divestiture of HEW, we remain committed to delivering on our strategic plan and executing our global restructuring projects.”
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

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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 mission-critical applications. 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     Six Months Ended  
    June 28, 2009     June 29, 2008     June 28, 2009     June 29, 2008  
    (In thousands, except per share data)  
Revenues
  $ 343,821     $ 556,303     $ 672,333     $ 1,068,129  
Cost of sales
    (235,303 )     (389,830 )     (479,622 )     (755,839 )
 
                       
Gross profit
    108,518       166,473       192,711       312,290  
Selling, general and administrative expenses
    (67,579 )     (86,913 )     (144,276 )     (182,076 )
Research and development
    (14,122 )     (11,093 )     (30,677 )     (20,164 )
Amortization of intangibles
    (3,911 )     (2,609 )     (7,776 )     (5,161 )
Asset impairment
    (1,453 )           (26,176 )     (11,549 )
Loss on sale of assets
    (17,184 )           (17,184 )     (884 )
 
                       
Operating income (loss)
    4,269       65,858       (33,378 )     92,456  
Interest expense
    (8,895 )     (11,066 )     (16,218 )     (19,409 )
Interest income
    238       1,875       602       2,832  
Other income
    695       1,986       444       3,154  
 
                       
Income (loss) before taxes
    (3,693 )     58,653       (48,550 )     79,033  
Income tax benefit (expense)
    (1,193 )     (16,848 )     11,210       (24,343 )
 
                       
Net income (loss)
  $ (4,886 )   $ 41,805     $ (37,340 )   $ 54,690  
 
                       
                                 
Weighted average number of common shares and equivalents:
                               
Basic
    46,587       43,506       46,557       43,821  
Diluted
    46,587       47,478       46,557       47,926  
 
                               
Basic income (loss) per share
  $ (0.10 )   $ 0.96     $ (0.80 )   $ 1.25  
 
                               
Diluted income (loss) per share
  $ (0.10 )   $ 0.88     $ (0.80 )   $ 1.14  
 
                               
Dividends declared per share
  $ 0.05     $ 0.05     $ 0.10     $ 0.10  

 


 

BELDEN INC.
OPERATING SEGMENT INFORMATION
(Unaudited)
                                 
    External                     Operating  
    Customer     Affiliate     Total     Income  
    Revenues     Revenues     Revenues     (Loss)  
            (In thousands)          
Three Months Ended June 28, 2009
                               
Americas
  $ 186,734     $ 10,888     $ 197,622     $ 33,521  
Wireless
    13,234             13,234       (7,978 )
EMEA
    86,237       13,109       99,346       (13,380 )
Asia Pacific
    57,616             57,616       8,262  
 
                       
Total Segments
    343,821       23,997       367,818       20,425  
Corporate expenses
                      (9,310 )
Eliminations
          (23,997 )     (23,997 )     (6,846 )
 
                       
Total
  $ 343,821     $     $ 343,821     $ 4,269  
 
                       
 
                               
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  
 
                       
 
                               
Six Months Ended June 28, 2009
                               
 
                               
Americas
  $ 368,944     $ 18,879     $ 387,823     $ 58,179  
Wireless
    25,237             25,237       (16,300 )
EMEA
    174,298       25,582       199,880       (56,625 )
Asia Pacific
    103,854             103,854       11,596  
 
                       
Total Segments
    672,333       44,461       716,794       (3,150 )
Corporate expenses
                      (17,667 )
Eliminations
          (44,461 )     (44,461 )     (12,561 )
 
                       
Total
  $ 672,333     $     $ 672,333     $ (33,378 )
 
                       
 
                               
Six Months Ended June 29, 2008
                               
 
                               
Americas
  $ 535,172     $ 37,377     $ 572,549     $ 70,480  
Wireless
                       
EMEA
    333,218       44,665       377,883       41,229  
Asia Pacific
    199,739       111       199,850       27,062  
 
                       
Total Segments
    1,068,129       82,153       1,150,282       138,771  
Corporate expenses
                      (26,223 )
Eliminations
          (82,153 )     (82,153 )     (20,092 )
 
                       
Total
  $ 1,068,129     $     $ 1,068,129     $ 92,456  
 
                       

 


 

BELDEN INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
                 
    Six Months Ended  
    June 28, 2009     June 29, 2008  
    (In thousands)  
Cash flows from operating activities:
               
Net income (loss)
  $ (37,340 )   $ 54,690  
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
               
Depreciation and amortization
    26,842       27,503  
Asset impairment
    26,176       11,549  
Loss on sale of assets
    17,184       884  
Share-based compensation
    4,719       7,292  
Provision for inventory obsolescence
    4,273       4,132  
Tax deficiency (benefit) related to share-based compensation
    1,469       (1,141 )
Pension funding in excess of pension expense
    (6,452 )     (3,339 )
Amortization of discount on convertible subordinated notes
          1,069  
Changes in operating assets and liabilities, net of the effects of currency exchange rate changes and acquired businesses:
               
Receivables
    42,655       (21,827 )
Inventories
    42,161       (3,746 )
Accounts payable
    (15,669 )     32,910  
Accrued liabilities
    (25,931 )     (32,397 )
Deferred revenue
    782        
Accrued taxes
    (16,558 )     2,931  
Other assets
    1,484       (8,060 )
Other liabilities
    3,539       2,125  
 
           
Net cash provided by operating activities
    69,334       74,575  
                 
Cash flows from investing activities:
               
Capital expenditures
    (18,342 )     (18,185 )
Cash used to invest in and acquire businesses
          (7,891 )
Proceeds from disposal of tangible assets
    367       40,249  
 
           
Net cash provided by (used for) investing activities
    (17,975 )     14,173  
                 
Cash flows from financing activities:
               
Cash dividends paid
    (4,707 )     (4,458 )
Debt issuance costs
    (1,541 )      
Tax benefit (deficiency) related to share-based compensation
    (1,469 )     1,141  
Proceeds from exercise of stock options
    23       5,171  
Payments under share repurchase program
          (68,336 )
 
           
Net cash used for financing activities
    (7,694 )     (66,482 )
                 
Effect of foreign currency exchange rate changes on cash and cash equivalents
    3,562       7,436  
 
           
 
               
Increase in cash and cash equivalents
    47,227       29,702  
Cash and cash equivalents, beginning of period
    227,413       159,964  
 
           
Cash and cash equivalents, end of period
  $ 274,640     $ 189,666  
 
           
Free cash flow is defined as net cash provided by operating activities less capital expenditures. Free cash flow was $50,992 ($69,334 - $18,342) and $56,390 ($74,575 - $18,185) for the six months ended June 28, 2009 and June 29, 2008, respectively.

 


 

BELDEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
                 
    June 28, 2009     December 31, 2008  
    (Unaudited)          
    (In thousands)  
ASSETS
Current assets:
               
Cash and cash equivalents
  $ 274,640     $ 227,413  
Receivables, net
    245,672       292,236  
Inventories, net
    155,635       216,022  
Deferred income taxes
    20,647       22,606  
Other current assets
    51,258       34,826  
 
           
                 
Total current assets
    747,852       793,103  
 
Property, plant and equipment, less accumulated depreciation
    298,548       324,569  
Goodwill
    314,194       321,478  
Intangible assets, less accumulated amortization
    142,183       156,025  
Deferred income taxes
    2,625        
Other long-lived assets
    52,640       53,388  
 
           
                 
 
  $ 1,558,042     $ 1,648,563  
 
           
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
                 
Current liabilities:
               
Accounts payable
  $ 142,367     $ 160,744  
Accrued liabilities
    147,974       180,801  
 
           
                 
Total current liabilities
    290,341       341,545  
 
Long-term debt
    590,000       590,000  
Postretirement benefits
    120,370       120,256  
Deferred income taxes
          4,270  
Other long-term liabilities
    19,842       21,624  
Stockholders’ equity:
               
Common stock
    503       503  
Additional paid-in capital
    585,650       585,704  
Retained earnings
    64,904       106,949  
Accumulated other comprehensive income
    16,107       10,227  
Treasury stock
    (129,675 )     (132,515 )
 
           
                 
Total stockholders’ equity
    537,489       570,868  
 
           
                 
 
  $ 1,558,042     $ 1,648,563  
 
           
Working capital consists of receivables and inventories, net of accounts payable and accrued liabilities (excluding current deferred revenue liabilities). Working capital turns are calculated by dividing annualized cost of sales for the quarter by the working capital balance at the end of the quarter. Working capital turns for the quarters ended June 28, 2009 and June 29, 2008 were 7.3 and 5.7 turns, respectively.

 


 

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, gains (losses) on sales of assets, and other restructuring costs. 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 June 28, 2009   Reported   Adjustments   Adjusted
    (In thousands, except percentages and per share amounts)
Revenues
  $ 343,821     $ 831     $ 344,652  
 
Gross profit
  $ 108,518     $ 5,634     $ 114,152  
as a percent of revenues
    31.6 %             33.1 %
 
Operating income
  $ 4,269     $ 24,885     $ 29,154  
as a percent of revenues
    1.2 %             8.5 %
 
Net income (loss)
  $ (4,886 )   $ 20,728     $ 15,842  
as a percent of revenues
    -1.4 %             4.6 %
 
Net income (loss) per diluted share
  $ (0.10 )   $ 0.44     $ 0.34  
 
                       
Three Months Ended June 29, 2008
                       
 
Revenues
  $ 556,303     $     $ 556,303  
 
Gross profit
  $ 166,473     $ 2,286     $ 168,759  
as a percent of revenues
    29.9 %             30.3 %
 
Operating income
  $ 65,858     $ 4,276     $ 70,134  
as a percent of revenues
    11.8 %             12.6 %
 
Net income
  $ 41,805     $ 4,020     $ 45,825  
as a percent of revenues
    7.5 %             8.2 %
 
Net income per diluted share
  $ 0.88     $ 0.09     $ 0.97  
Adjustments for the three months ended June 28, 2009 included pre-tax operating charges for loss on sale of assets, asset impairment, revenue deferrals, and other costs of $17.2 million, $1.5 million, $0.6 million, and $5.6 million, respectively.
Adjustments for the three months ended June 29, 2008 included pre-tax operating charges for pension settlements, severance, and other costs of $1.8 million, $1.5 million, and $1.0 million, respectively, and pre-tax non-operating charges of $2.4 million.

 


 

                         
    As        
Six Months Ended June 28, 2009   Reported   Adjustments   Adjusted
    (In thousands, except percentages and per share amounts)
Revenues
  $ 672,333     $ 782     $ 673,115  
 
Gross profit
  $ 192,711     $ 23,529     $ 216,240  
as a percent of revenues
    28.7 %             32.1 %
 
Operating income (loss)
  $ (33,378 )   $ 78,612     $ 45,234  
as a percent of revenues
    -5.0 %             6.7 %
 
Net income (loss)
  $ (37,340 )   $ 60,438     $ 23,098  
as a percent of revenues
    -5.6 %             3.4 %
 
Net income (loss) per diluted share
  $ (0.80 )   $ 1.29     $ 0.49  
 
Six Months Ended June 29, 2008
                       
 
                       
Revenues
  $ 1,068,129     $     $ 1,068,129  
 
Gross profit
  $ 312,290     $ 6,242     $ 318,532  
as a percent of revenues
    29.2 %             29.8 %
 
Operating income
  $ 92,456     $ 28,964     $ 121,420  
as a percent of revenues
    8.7 %             11.4 %
 
Net income
  $ 54,690     $ 23,318     $ 78,008  
as a percent of revenues
    5.1 %             7.3 %
 
Net income per diluted share
  $ 1.14     $ 0.49     $ 1.63  
Adjustments for the six months ended June 28, 2009 included pre-tax operating charges for asset impairment, severance, loss on sale of assets, revenue deferrals, and other costs of $26.2 million, $26.0 million, $17.2 million, $0.8 million, and $8.4 million, respectively, and pre-tax non-operating charges of $1.5 million.
Adjustments for the six months ended June 29, 2008 included pre-tax operating charges for severance, asset impairment, pension settlements, loss on sale of assets, and other costs of $13.4 million, $11.5 million, $1.8 million, $0.9 million, and $1.4 million, respectively, and pre-tax non-operating charges of $2.9 million.