EX-99.1 2 c59420exv99w1.htm EX-99.1 exv99w1
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      
Belden Reports Strong Second Quarter 2010 Results
Second Quarter Highlights:
    Achieved adjusted income from continuing operations per diluted share of $0.50, up 47% over last year’s $0.34 per diluted share and up 72% sequentially from $0.29 per diluted share in the first quarter 2010;
 
    Increased revenue to $426.1 million, up 24% year-over-year and up 6% sequentially;
 
    Improved adjusted operating income margin to 9.4% of revenue, up 70 basis points (bps) year-over-year and 160 bps sequentially;
 
    Achieved record 7.8 inventory turns, up 1.7 turns year-over-year and up 0.8 turns sequentially, and
 
    Raised guidance for full year 2010 adjusted revenue to $1.640 — $1.655 billion and adjusted income from continuing operations per diluted share to $1.55 — $1.65.
St. Louis, Missouri — July 29, 2010 — Belden Inc. (BDC-NYSE), a leader in designing, manufacturing, and marketing cable, connectivity, and networking products in markets including industrial automation, enterprise, transportation, infrastructure, and consumer electronics, today reported results for the fiscal second quarter ended July 4, 2010.
Second Quarter 2010
Revenue for the quarter totaled $426.1 million, up $82.3 million or 24% compared to $343.8 million in the second quarter 2009. Income from continuing operations per diluted share totaled $0.41, compared to $(0.10) per diluted share in the second quarter 2009.
Adjusted revenue totaled $420.8 million, up $76.1 million or 22% compared to adjusted revenue of $344.7 million in the second quarter 2009. Adjusted operating income totaled $39.5 million or 9.4% of revenue, compared to $29.8 million or 8.7% of revenue in the second quarter 2009. Adjusted income from continuing operations per diluted share totaled $0.50, compared to $0.34 in the second quarter 2009.
John Stroup, President and CEO of Belden Inc. remarked, “The strong results we delivered this quarter and over the first six months of 2010 demonstrate that our strategic initiatives are working. Implementation of our Market Delivery and Lean Enterprise systems contributed to year-over-year growth in revenue and margins. The improvement in our business was broad-based with all product groups and regions contributing, a reflection of the enhanced quality and diversity of our portfolio.”
Outlook
Mr. Stroup continued, “We anticipate that the usual seasonality in our business, particularly in Europe, will result in sequentially lower revenues and earnings in the third quarter, followed by sequential improvement in the fourth quarter.”

 


 

Belden Reports Second Quarter 2010 Results — Page 2 of 3
Looking ahead to the third quarter of 2010, the Company expects adjusted revenues of $410 million to $415 million and adjusted income from continuing operations per diluted share of $0.38 to $0.41. For the full year ending December 31, adjusted revenues are expected to be $1.640 billion to $1.655 billion and adjusted income from continuing operations per diluted share are expected to be $1.55 to $1.65.
Use of Non-GAAP Financial Information
Adjusted results are non-GAAP measures that reflect certain adjustments the Company makes to provide insight into operating results. All GAAP to non-GAAP reconciliations accompany the consolidated financial statements included in this release and have been published to the investor relations section of the Company’s Web site at http://investor.belden.com.
Adjusted revenues and income exclude the impact of the deferral of revenues and cost of sales associated with the Company’s wireless segment, the impact of charges associated with already announced restructuring actions, non-cash charges associated with derivative and hedging instruments, and other costs.
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. Forward looking statements include any statements regarding future revenues, costs and expenses, operating income, earnings per share, margins, cash flows, dividends, and capital expenditures. 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. Additional factors that may cause actual results to differ from the Company’s expectations include: the Company’s reliance on key distributors in marketing products; the Company’s ability to execute and realize the expected benefits from strategic initiatives (including revenue growth, cost control, and productivity improvement programs); changes in the level of economic activity in the Company’s major geographic markets; difficulties in realigning manufacturing capacity and capabilities among the Company’s global manufacturing facilities; the competitiveness of the global cable, connectivity and wireless industries; variability in the Company’s quarterly and annual effective tax rates; changes in accounting rules and interpretation of these rules which may affect the Company’s reported earnings; changes in currency exchange rates and political and economic uncertainties in the countries where the Company conducts business; 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 acquired businesses; the ability of the Company to develop and introduce new products; the Company having to recognize charges that would reduce income as a result of impairing goodwill and other intangible assets; variability associated with derivative and hedging instruments; 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, 2009, filed with the SEC on February 26, 2010. Belden disclaims any duty to update any forward looking statements as a result of new information, future developments, or otherwise.

 


 

Belden Reports Second Quarter 2010 Results — Page 3 of 3
About Belden
St. Louis-based Belden Inc. designs, manufactures, and markets cable, connectivity, and networking products in markets including industrial automation, enterprise, transportation, infrastructure, and consumer electronics. It has approximately 6,600 employees, and provides value for industrial automation, enterprise, education, healthcare, entertainment and broadcast, sound and security, transportation, infrastructure, consumer electronics and other industries. Belden has manufacturing capabilities in North America, Europe, and Asia, and a market presence in nearly every region of the world. Belden was founded in 1902, and today is a leader with some of the strongest brands in the signal transmission industry. For more information, visit www.belden.com.
Contact:
Belden Investor Relations
314-854-8054
Investor.Relations@Belden.com

 


 

BELDEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                                 
    Three Months Ended     Six Months Ended  
    July 4, 2010     June 28, 2009     July 4, 2010     June 28, 2009  
    (In thousands, except per share data)  
Revenues
  $ 426,140     $ 343,821     $ 826,489     $ 672,333  
Cost of sales
    (300,343 )     (235,303 )     (582,284 )     (479,622 )
 
                       
Gross profit
    125,797       108,518       244,205       192,711  
Selling, general and administrative expenses
    (74,523 )     (67,579 )     (148,383 )     (144,276 )
Research and development
    (13,400 )     (14,122 )     (28,197 )     (30,677 )
Amortization of intangibles
    (4,140 )     (3,911 )     (8,406 )     (7,776 )
Income from equity method investment
    3,211       695       5,852       1,985  
Asset impairment
          (1,453 )           (26,176 )
Loss on sale of assets
          (17,184 )           (17,184 )
 
                       
Operating income (loss)
    36,945       4,964       65,071       (31,393 )
Interest expense
    (14,187 )     (8,895 )     (27,133 )     (16,218 )
Interest income
    136       238       319       602  
Other income (expense)
    1,465             1,465       (1,541 )
 
                       
Income (loss) from continuing operations before taxes
    24,359       (3,693 )     39,722       (48,550 )
Income tax benefit (expense)
    (4,532 )     (1,193 )     (8,012 )     11,210  
 
                       
Income (loss) from continuing operations
    19,827       (4,886 )     31,710       (37,340 )
Loss from discontinued operations, net of tax
    (155 )           (291 )      
 
                       
Net income (loss)
  $ 19,672     $ (4,886 )   $ 31,419     $ (37,340 )
 
                       
 
                               
Weighted average number of common shares and equivalents:
                               
Basic
    46,779       46,587       46,737       46,557  
Diluted
    47,788       46,587       47,647       46,557  
 
                               
Basic income (loss) per share
                               
Continuing operations
  $ 0.42     $ (0.10 )   $ 0.68     $ (0.80 )
Discontinued operations
                (0.01 )      
 
                       
Net income (loss)
  $ 0.42     $ (0.10 )   $ 0.67     $ (0.80 )
 
                       
 
                               
Diluted income (loss) per share
                               
Continuing operations
  $ 0.41     $ (0.10 )   $ 0.67     $ (0.80 )
Discontinued operations
                (0.01 )      
 
                       
Net income (loss)
  $ 0.41     $ (0.10 )   $ 0.66     $ (0.80 )
 
                       
 
                               
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 July 4, 2010
                               
Americas
  $ 236,923     $ 12,133     $ 249,056     $ 34,159  
EMEA
    92,193       17,880       110,073       19,314  
Asia Pacific
    81,447       62       81,509       9,927  
Wireless
    15,577             15,577       (2,665 )
 
                       
Total Segments
    426,140       30,075       456,215       60,735  
Corporate expenses
                      (13,272 )
Eliminations
          (30,075 )     (30,075 )     (10,518 )
 
                       
Total
  $ 426,140     $     $ 426,140     $ 36,945  
 
                       
 
                               
Three Months Ended June 28, 2009
                               
Americas
  $ 186,734     $ 10,888     $ 197,622     $ 33,521  
EMEA
    86,237       13,109       99,346       (12,685 )
Asia Pacific
    57,616             57,616       8,262  
Wireless
    13,234             13,234       (7,978 )
 
                       
Total Segments
    343,821       23,997       367,818       21,120  
Corporate expenses
                      (9,310 )
Eliminations
          (23,997 )     (23,997 )     (6,846 )
 
                       
Total
  $ 343,821     $     $ 343,821     $ 4,964  
 
                       
 
                               
Six Months Ended July 4, 2010
                               
Americas
  $ 454,852     $ 24,870     $ 479,722     $ 65,516  
EMEA
    182,743       32,623       215,366       33,894  
Asia Pacific
    157,392       62       157,454       17,453  
Wireless
    31,502             31,502       (5,834 )
 
                       
Total Segments
    826,489       57,555       884,044       111,029  
Corporate expenses
                      (26,176 )
Eliminations
          (57,555 )     (57,555 )     (19,782 )
 
                       
Total
  $ 826,489     $     $ 826,489     $ 65,071  
 
                       
 
                               
Six Months Ended June 28, 2009
                               
Americas
  $ 368,944     $ 18,879     $ 387,823     $ 58,179  
EMEA
    174,298       25,582       199,880       (54,640 )
Asia Pacific
    103,854             103,854       11,596  
Wireless
    25,237             25,237       (16,300 )
 
                       
Total Segments
    672,333       44,461       716,794       (1,165 )
Corporate expenses
                      (17,667 )
Eliminations
          (44,461 )     (44,461 )     (12,561 )
 
                       
Total
  $ 672,333     $     $ 672,333     $ (31,393 )
 
                       

 


 

BELDEN INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
                 
    Six Months Ended  
    July 4, 2010     June 28, 2009  
    (In thousands)  
Cash flows from operating activities:
               
Net income (loss)
  $ 31,419     $ (37,340 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
               
Depreciation and amortization
    28,676       26,842  
Asset impairment
          26,176  
Loss on sale of assets
          17,184  
Share-based compensation
    6,588       4,719  
Non-cash loss related to derivatives and hedging instruments
    2,749        
Provision for inventory obsolescence
    1,752       4,273  
Tax deficiency related to share-based compensation
    210       1,469  
Amortization of discount on long-term debt
    208        
Income from equity method investment
    (5,852 )     (1,985 )
Pension funding in excess of pension expense
    (2,700 )     (6,452 )
Changes in operating assets and liabilities, net of the effects of currency exchange rate changes and acquired businesses:
               
Receivables
    (61,382 )     42,655  
Deferred cost of sales
    4,896       35  
Inventories
    (11,326 )     42,161  
Accounts payable
    27,182       (15,669 )
Accrued liabilities
    554       (25,931 )
Deferred revenue
    (11,262 )     782  
Accrued taxes
    (5,267 )     (16,558 )
Other assets
    6,742       3,434  
Other liabilities
    (7,674 )     3,539  
 
           
Net cash provided by operating activities
    5,513       69,334  
 
               
Cash flows from investing activities:
               
Capital expenditures
    (12,705 )     (18,342 )
Proceeds from disposal of tangible assets
    2,332       367  
Cash provided by other investing activities
    163        
 
           
Net cash used for investing activities
    (10,210 )     (17,975 )
 
               
Cash flows from financing activities:
               
Payments under borrowing arrangements
    (46,268 )      
Cash dividends paid
    (4,712 )     (4,707 )
Debt issuance costs
          (1,541 )
Tax deficiency related to share-based compensation
    (210 )     (1,469 )
Proceeds from exercise of stock options
    634       23  
 
           
Net cash used for financing activities
    (50,556 )     (7,694 )
Effect of foreign currency exchange rate changes on cash and cash equivalents
    (8,011 )     3,562  
 
           
 
               
Increase (decrease) in cash and cash equivalents
    (63,264 )     47,227  
Cash and cash equivalents, beginning of period
    308,879       227,413  
 
           
Cash and cash equivalents, end of period
  $ 245,615     $ 274,640  
 
           

 


 

BELDEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
                 
    July 4, 2010     December 31, 2009  
    (Unaudited)      
    (In thousands)  
ASSETS
               
Current assets:
               
Cash and cash equivalents
  $ 245,615     $ 308,879  
Receivables, net
    291,372       242,145  
Inventories, net
    154,983       151,262  
Deferred income taxes
    26,705       26,996  
Other current assets
    24,104       35,036  
 
           
 
               
Total current assets
    742,779       764,318  
 
               
Property, plant and equipment, less accumulated depreciation
    275,119       299,586  
Goodwill
    302,524       313,030  
Intangible assets, less accumulated amortization
    128,458       143,013  
Deferred income taxes
    35,723       37,205  
Other long-lived assets
    69,076       63,426  
 
           
 
  $ 1,553,679     $ 1,620,578  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current liabilities:
               
Accounts payable
  $ 192,455     $ 169,763  
Accrued liabilities
    126,822       141,922  
Current maturities of long-term debt
          46,268  
 
           
 
               
Total current liabilities
    319,277       357,953  
 
               
Long-term debt
    548,769       543,942  
Postretirement benefits
    111,894       121,745  
Other long-term liabilities
    41,039       45,890  
Stockholders’ equity:
               
Common stock
    503       503  
Additional paid-in capital
    595,009       591,917  
Retained earnings
    99,276       72,625  
Accumulated other comprehensive income (loss)
    (36,648 )     14,614  
Treasury stock
    (125,440 )     (128,611 )
 
           
 
               
Total stockholders’ equity
    532,700       551,048  
 
           
 
  $ 1,553,679     $ 1,620,578  
 
           
Inventory turns are calculated by dividing annualized cost of sales for the quarter by the inventory balance at the end of the quarter.
Inventory turns for the quarters ended July 4, 2010 and June 28, 2009 were 7.8 and 6.1 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 non-GAAP operating results adjusted for certain items including asset impairment, purchase accounting effects related to acquisitions, revenue and cost of sales deferrals related to our Wireless segment, severance charges, accelerated depreciation, gains (losses) recognized on the disposal of tangible assets, and other 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              
    Reported     Adjustments     Adjusted  
    (In thousands, except percentages and per share amounts)  
Three Months Ended July 4, 2010
                       
Revenues
  $ 426,140     $ (5,377 )   $ 420,763  
 
                       
Gross profit
  $ 125,797     $ 1,813     $ 127,610  
as a percent of revenues
    29.5 %             30.3 %
 
                       
Operating income
  $ 36,945     $ 2,508     $ 39,453  
as a percent of revenues
    8.7 %             9.4 %
 
                       
Income from continuing operations
  $ 19,827     $ 3,830     $ 23,657  
as a percent of revenues
    4.7 %             5.6 %
 
                       
Income from continuing operations per diluted share
  $ 0.41     $ 0.09     $ 0.50  
 
                       
Three Months Ended June 28, 2009
                       
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
  $ 4,964     $ 24,885     $ 29,849  
as a percent of revenues
    1.4 %             8.7 %
 
                       
Income (loss) from continuing operations
  $ (4,886 )   $ 20,728     $ 15,842  
as a percent of revenues
    -1.4 %             4.6 %
 
                       
Income (loss) from continuing operations per diluted share
  $ (0.10 )   $ 0.44     $ 0.34  
Adjustments for the three months ended July 4, 2010 included pre-tax operating charges for severance and other restructuring related costs, accelerated depreciation, and purchase accounting effects related to acquisitions of $3.9 million, $1.1 million, and $0.6 million, respectively, partially offset by changes in deferred gross profit of $3.1 million. Adjustments for the three months ended July 4, 2010 also include non-operating charges for non-cash losses related to derivatives and hedging instruments of $2.7 million.
Adjustments for the three months ended June 28, 2009 included pre-tax operating charges for loss on sale of assets, asset impairment, gross profit deferrals, and other costs of $17.2 million, $1.5 million, $0.6 million, and $5.6 million, respectively.

 


 

                         
    As              
    Reported     Adjustments     Adjusted  
    (In thousands, except percentages and per share amounts)  
Six Months Ended July 4, 2010
                       
Revenues
  $ 826,489     $ (11,262 )   $ 815,227  
 
                       
Gross profit
  $ 244,205     $ 3,762     $ 247,967  
as a percent of revenues
    29.5 %             30.4 %
 
                       
Operating income
  $ 65,071     $ 5,342     $ 70,413  
as a percent of revenues
    7.9 %             8.6 %
 
                       
Income from continuing operations
  $ 31,710     $ 5,904     $ 37,614  
as a percent of revenues
    3.8 %             4.6 %
 
                       
Income from continuing operations per diluted share
  $ 0.67     $ 0.12     $ 0.79  
 
                       
Six Months Ended June 28, 2009
                       
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)
  $ (31,393 )   $ 78,612     $ 47,219  
as a percent of revenues
    -4.7 %             7.0 %
 
                       
Income (loss) from continuing operations
  $ (37,340 )   $ 60,440     $ 23,100  
as a percent of revenues
    -5.6 %             3.4 %
 
                       
Income (loss) from continuing operations per diluted share
  $ (0.80 )   $ 1.30     $ 0.50  
Adjustments for the six months ended July 4, 2010 included pre-tax operating charges for severance and other restructuring related costs, accelerated depreciation, and purchase accounting effects related to acquisitions of $7.9 million, $2.2 million, and $1.6 million, respectively, partially offset by changes in deferred gross profit of $6.4 million. Adjustments for the six months ended July 4, 2010 also include non-operating charges for non-cash losses related to derivatives and hedging instruments of $2.7 million.
Adjustments for the six months ended June 28, 2009 included pre-tax operating charges for asset impairment, severance, loss on sale of assets, gross profit 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.