EX-99.1 2 c60995exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
         
(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 Third Quarter 2010 Results
     Company delivers EPS of $0.43 per diluted share, compared to $(0.16) in year-ago period; Non-GAAP income from continuing operations per diluted share increases 59% year-over-year
Third Quarter Highlights:
  o   Improved non-GAAP income from continuing operations per diluted share to $0.43, up 59% over last year’s $0.27 per diluted share;
 
  o   Increased revenue 16% year-over-year to $411.5 million, from $355.2 million in the third quarter 2009;
 
  o   Grew non-GAAP operating margins 120 basis points year-over-year to 9.5%, from 8.3% in the third quarter 2009;
 
  o   Generated positive free cash flow during the quarter totaling $43.4 million, or 211% of non-GAAP income from continuing operations for the quarter, increasing the balance of cash and cash equivalents to $296.1 million at quarter-end, and
 
  o   Raised guidance for full year 2010 non-GAAP income from continuing operations per diluted share to $1.65 – $1.68, up from prior guidance of $1.55 – $1.65.
St. Louis, Missouri – October 28, 2010 – Belden Inc. (BDC-NYSE), a global leader in signal transmission solutions for mission critical applications, today reported results for the fiscal third quarter ended October 3, 2010.
Third Quarter 2010
Revenue for the quarter totaled $411.5 million, up $56.3 million or 16% compared to $355.2 million in the third quarter 2009. Income from continuing operations per diluted share totaled $0.43, compared to $(0.16) per diluted share in the third quarter 2009.
Non-GAAP revenue totaled $408.0 million, up $52.8 million or 15% compared to non-GAAP revenue of $355.2 million in the third quarter 2009. Non-GAAP operating income totaled $38.8 million or 9.5% of revenue, compared to $29.6 million or 8.3% of revenue in the third quarter 2009. Non-GAAP income from continuing operations per diluted share totaled $0.43, compared to $0.27 in the third quarter 2009.
John Stroup, President and CEO of Belden Inc. said, “We are pleased to report another strong quarter of financial and operating performance. Our results clearly demonstrate the combined benefits of an advantaged global product portfolio and improved execution of our Market Delivery System and Lean Enterprise initiatives.”

 


 

Belden Reports Strong Third Quarter 2010 Results — Page 2 of 3
Outlook
“Given our strong third quarter results and the usual seasonal growth we expect in the fourth quarter, we are increasing our earnings outlook for the remainder of the year,” Mr. Stroup said.
The Company expects fourth quarter non-GAAP revenues to be $420 million to $425 million and non-GAAP income from continuing operations per diluted share to be $0.43 to $0.46. For the full year ending December 31, non-GAAP revenues are expected to be $1,643 million to $1,648 million and non-GAAP income from continuing operations per diluted share is expected to be $1.65 to $1.68.
Earnings Conference Call
Management will host a conference call today at 10:30 a.m. Eastern to discuss results of the quarter. The listen-only audio of the conference call will be broadcast live via the Internet at http://investor.belden.com. The dial-in number for participants in the U.S. is 866-304-1238; the dial-in number for participants outside the U.S. is 913-312-6650. A replay of this conference call will remain accessible in the investor relations section of the Company’s Web site for a limited time.
Use of Non-GAAP Financial Information
Non-GAAP measures 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.
Non-GAAP 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, 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 markets and 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 networking industries, including wireless; 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

 


 

Belden Reports Strong Third Quarter 2010 Results — Page 3 of 3
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 acquired businesses successfully; 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.
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 6,500 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     Nine Months Ended  
    October 3, 2010     September 27, 2009     October 3, 2010     September 27, 2009  
            (In thousands, except per share data)          
Revenues
  $ 411,472     $ 355,159     $ 1,237,961     $ 1,027,492  
Cost of sales
    (285,777 )     (247,086 )     (868,061 )     (726,708 )
 
                       
Gross profit
    125,695       108,073       369,900       300,784  
Selling, general and administrative expenses
    (71,392 )     (71,489 )     (219,775 )     (215,765 )
Research and development
    (14,794 )     (14,161 )     (42,991 )     (44,838 )
Amortization of intangibles
    (4,152 )     (3,983 )     (12,558 )     (11,759 )
Income from equity method investment
    3,053       2,418       8,905       4,403  
Asset impairment
                      (26,176 )
Loss on sale of assets
                      (17,184 )
 
                       
Operating income (loss)
    38,410       20,858       103,481       (10,535 )
Interest expense
    (11,779 )     (12,575 )     (38,912 )     (28,793 )
Interest income
    127       199       446       801  
Other income (expense)
                1,465       (1,541 )
 
                       
Income (loss) from continuing operations before taxes
    26,758       8,482       66,480       (40,068 )
Income tax expense
    (6,002 )     (15,958 )     (14,014 )     (4,748 )
 
                       
Income (loss) from continuing operations
    20,756       (7,476 )     52,466       (44,816 )
Loss from discontinued operations, net of tax
    (151 )           (442 )      
 
                       
Net income (loss)
  $ 20,605     $ (7,476 )   $ 52,024     $ (44,816 )
 
                       
 
                               
Weighted average number of common shares and equivalents:
                               
Basic
    46,813       46,607       46,762       46,574  
Diluted
    47,721       46,607       47,665       46,574  
 
                               
Basic income (loss) per share
                               
Continuing operations
  $ 0.44     $ (0.16 )   $ 1.12     $ (0.96 )
Discontinued operations
                (0.01 )      
 
                       
Net income (loss)
  $ 0.44     $ (0.16 )   $ 1.11     $ (0.96 )
 
                       
 
                               
Diluted income (loss) per share
                               
Continuing operations
  $ 0.43     $ (0.16 )   $ 1.10     $ (0.96 )
Discontinued operations
                (0.01 )      
 
                       
Net income (loss)
  $ 0.43     $ (0.16 )   $ 1.09     $ (0.96 )
 
                       
 
                               
Dividends declared per share
  $ 0.05     $ 0.05     $ 0.15     $ 0.15  

 


 

BELDEN INC.
OPERATING SEGMENT INFORMATION
(Unaudited)
                                 
    External                     Operating  
    Customer     Affiliate     Total     Income  
    Revenues     Revenues     Revenues     (Loss)  
            (In thousands)          
Three Months Ended October 3, 2010
                               
 
                               
Americas
  $ 232,133     $ 11,735     $ 243,868     $ 37,708  
EMEA
    90,397       20,707       111,104       18,346  
Asia Pacific
    74,397             74,397       10,693  
Wireless
    14,545             14,545       (2,727 )
 
                       
Total Segments
    411,472       32,442       443,914       64,020  
Corporate expenses
                      (13,245 )
Eliminations
          (32,442 )     (32,442 )     (12,365 )
 
                       
Total
  $ 411,472     $     $ 411,472     $ 38,410  
 
                       
 
                               
Three Months Ended September 27, 2009
                               
Americas
  $ 192,135     $ 12,994     $ 205,129     $ 31,153  
EMEA
    81,012       13,099       94,111       8,014  
Asia Pacific
    67,102             67,102       6,700  
Wireless
    14,910             14,910       (6,644 )
 
                       
Total Segments
    355,159       26,093       381,252       39,223  
Corporate expenses
                      (10,141 )
Eliminations
          (26,093 )     (26,093 )     (8,224 )
 
                       
Total
  $ 355,159     $     $ 355,159     $ 20,858  
 
                       
 
                               
Nine Months Ended October 3, 2010
                               
 
                               
Americas
  $ 686,985     $ 36,605     $ 723,590     $ 103,224  
EMEA
    273,140       53,330       326,470       52,240  
Asia Pacific
    231,789       62       231,851       28,146  
Wireless
    46,047             46,047       (8,561 )
 
                       
Total Segments
    1,237,961       89,997       1,327,958       175,049  
Corporate expenses
                      (39,421 )
Eliminations
          (89,997 )     (89,997 )     (32,147 )
 
                       
Total
  $ 1,237,961     $     $ 1,237,961     $ 103,481  
 
                       
 
                               
Nine Months Ended September 27, 2009
                               
 
                               
Americas
  $ 561,079     $ 31,873     $ 592,952     $ 89,332  
EMEA
    255,310       38,681       293,991       (46,626 )
Asia Pacific
    170,956             170,956       18,296  
Wireless
    40,147             40,147       (22,944 )
 
                       
Total Segments
    1,027,492       70,554       1,098,046       38,058  
Corporate expenses
                      (27,808 )
Eliminations
          (70,554 )     (70,554 )     (20,785 )
 
                       
Total
  $ 1,027,492     $     $ 1,027,492     $ (10,535 )
 
                       

 


 

BELDEN INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
                 
    Nine Months Ended  
    October 3, 2010     September 27, 2009  
    (In thousands)  
Cash flows from operating activities:
               
Net income (loss)
  $ 52,024     $ (44,816 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
               
Depreciation and amortization
    41,525       40,630  
Share-based compensation
    9,539       8,373  
Provision for inventory obsolescence
    2,924       4,912  
Non-cash loss on derivatives and hedging instruments
    2,893        
Tax deficiency related to share-based compensation
    239       1,507  
Amortization of discount on long-term debt
    195       103  
Asset impairment
          26,176  
Loss on sale of assets
          17,184  
Pension funding in excess of pension expense
    (5,753 )     (7,000 )
Income from equity method investment
    (8,905 )     (4,403 )
Changes in operating assets and liabilities, net of the effects of currency exchange rate changes and acquired businesses:
               
Receivables
    (51,874 )     40,784  
Inventories
    (20,898 )     49,631  
Deferred cost of sales
    6,479       (514 )
Accounts payable
    34,288       2,517  
Accrued liabilities
    10,252       (23,543 )
Deferred revenue
    (14,771 )     843  
Accrued taxes
    (1,295 )     1,996  
Other assets
    9,755       6,390  
Other liabilities
    (11,206 )     (834 )
 
           
Net cash provided by operating activities
    55,411       119,936  
 
               
Cash flows from investing activities:
               
Capital expenditures
    (19,198 )     (26,178 )
Proceeds from disposal of tangible assets
    2,332       367  
Cash provided by other investing activities
    163        
 
           
Net cash used for investing activities
    (16,703 )     (25,811 )
 
               
Cash flows from financing activities:
               
Borrowings under credit arrangements
          193,732  
Payments under borrowing arrangements
    (46,268 )     (193,732 )
Debt issuance costs
          (11,810 )
Cash dividends paid
    (7,052 )     (7,037 )
Tax deficiency related to share-based compensation
    (239 )     (1,507 )
Proceeds from exercise of stock options
    720       23  
Cash received upon termination of derivative instruments
    4,217        
 
           
Net cash used for financing activities
    (48,622 )     (20,331 )
 
               
Effect of foreign currency exchange rate changes on cash and cash equivalents
    (2,884 )     10,585  
 
           
 
               
Increase (decrease) in cash and cash equivalents
    (12,798 )     84,379  
Cash and cash equivalents, beginning of period
    308,879       227,413  
 
           
Cash and cash equivalents, end of period
  $ 296,081     $ 311,792  
 
           

 


 

BELDEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
                 
    October 3, 2010     December 31, 2009  
    (Unaudited)          
    (In thousands)  
ASSETS
Current assets:
               
Cash and cash equivalents
  $ 296,081     $ 308,879  
Receivables, net
    291,132       242,145  
Inventories, net
    167,483       151,262  
Deferred income taxes
    26,854       26,996  
Other current assets
    18,077       35,036  
 
           
 
               
Total current assets
    799,627       764,318  
 
               
Property, plant and equipment, less accumulated depreciation
    282,517       299,586  
Goodwill
    308,864       313,030  
Intangible assets, less accumulated amortization
    128,014       143,013  
Deferred income taxes
    36,376       37,205  
Other long-lived assets
    70,261       63,426  
 
           
 
               
 
  $ 1,625,659     $ 1,620,578  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
               
Accounts payable
  $ 203,835     $ 169,763  
Accrued liabilities
    140,602       141,922  
Current maturities of long-term debt
          46,268  
 
           
 
               
Total current liabilities
    344,437       357,953  
 
               
Long-term debt
    551,247       543,942  
Postretirement benefits
    115,642       121,745  
Other long-term liabilities
    31,050       45,890  
Stockholders’ equity:
               
Common stock
    503       503  
Additional paid-in capital
    597,777       591,917  
Retained earnings
    117,508       72,625  
Accumulated other comprehensive income (loss)
    (7,258 )     14,614  
Treasury stock
    (125,247 )     (128,611 )
 
           
 
               
Total stockholders’ equity
    583,283       551,048  
 
           
 
               
 
  $ 1,625,659     $ 1,620,578  
 
           

 


 

BELDEN INC.
RECONCILIATION OF NON-GAAP MEASURES
(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 goodwill and other 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 non-GAAP results to review our ongoing operations without the effect of these adjustments and for comparison to budgeted operating results. We believe the non-GAAP results are useful to investors because they help them compare our results to previous periods and provide insights into underlying trends in the business. Non-GAAP results should be considered only in conjunction with results reported according to accounting principles generally accepted in the United States.
                                 
    Three Months Ended     Nine Months Ended  
    October 3, 2010     September 27, 2009     October 3, 2010     September 27, 2009  
    (In thousands, except percentages and per share amounts)  
GAAP revenues
  $ 411,472     $ 355,159     $ 1,237,961     $ 1,027,492  
Deferred revenue adjustments
    (3,509 )     61       (14,771 )     843  
 
                       
Non-GAAP revenues
  $ 407,963     $ 355,220     $ 1,223,190     $ 1,028,335  
 
                       
 
                               
GAAP operating income (loss)
  $ 38,410     $ 20,858     $ 103,481     $ (10,535 )
Severance and other restructuring related costs
    1,663       8,100       9,531       42,013  
Purchase accounting effects related to acquisitions
    635             2,258        
Accelerated depreciation
          369       2,216       891  
Asset impairment
                      26,176  
Loss on sale of assets
                      17,184  
Other
          787             787  
Deferred gross profit adjustments
    (1,927 )     (488 )     (8,292 )     329  
 
                       
Total operating income adjustments
    371       8,768       5,713       87,380  
 
                       
Non-GAAP operating income
  $ 38,781     $ 29,626     $ 109,194     $ 76,845  
 
                       
Non-GAAP operating income as a percent of non-GAAP revenues
    9.5 %     8.3 %     8.9 %     7.5 %
 
                               
GAAP income (loss) from continuing operations
  $ 20,756     $ (7,476 )   $ 52,466     $ (44,816 )
Operating income adjustments
    371       8,768       5,713       87,380  
Fees incurred to amend credit facility
                      1,541  
Derivative accounting
                2,749        
Tax effect of adjustments
    (519 )     11,604       (2,706 )     (8,111 )
 
                       
Non-GAAP income from continuing operations
  $ 20,608     $ 12,896     $ 58,222     $ 35,994  
 
                       
 
                               
GAAP income (loss) from continuing operations per diluted share
  $ 0.43     $ (0.16 )   $ 1.10     $ (0.96 )
Non-GAAP income from continuing operations per diluted share
  $ 0.43     $ 0.27     $ 1.22     $ 0.77  
 
                               
GAAP diluted weighted average shares
    47,721       46,607       47,665       46,574  
Adjustment for anti-dilutive shares that are dilutive under non-GAAP measures
          401             315  
 
                       
Non-GAAP diluted weighted average shares
    47,721       47,008       47,665       46,889  
 
                               
GAAP net cash provided by operating activities
  $ 49,898     $ 50,602     $ 55,411     $ 119,936  
Capital expenditures
    (6,493 )     (7,836 )     (19,198 )     (26,178 )
 
                       
Non-GAAP free cash flow
  $ 43,405     $ 42,766     $ 36,213     $ 93,758