EX-99.1 2 c19630exv99w1.htm NEWS RELEASE exv99w1
 

Exhibit 99.1
         
(BELDEN LOGO)
  7701 Forsyth Boulevard   Phone: 314.854.8000
  Suite 800   Fax: 314.854.8003
  St. Louis, Missouri 63105    
      www.Belden.com
News Release
From:   Belden
Dee Johnson
314.854.8054
For Immediate Release — October 25, 2007
BELDEN ANNOUNCES THIRD QUARTER EARNINGS
Reports third-quarter adjusted EPS of $0.77 and confirms full-year 2007 guidance
St. Louis, Missouri — Belden (NYSE:BDC) today announced that revenue for the third quarter ended September 23, 2007, was $561.6 million and operating income was $72.5 million. Income from continuing operations was $49.4 million, or $0.99 per diluted share. The quarter’s revenue included $164.8 million from businesses acquired during 2007 and $9.8 million of favorable currency translation.
During the quarter, Belden recorded a pre-tax gain of $8.6 million, or after tax $0.15 per diluted share, on the sale of assets in the Czech Republic and the United States. The Company also recorded favorable net adjustments of $0.4 million pre-tax associated with previously announced restructuring activities in North America. Additionally, Belden recorded a $3.1 million income tax benefit, or $0.06 per diluted share, associated with the enactment of lower tax rates applicable to its German operations. In the third quarter of 2006, the Company incurred pre-tax charges of $7.7 million, or $0.13 per share, for severance and asset impairment associated with restructuring actions in North America and Europe and a favorable one-time tax benefit of $4.7 million, or $0.09 per share.
Adjusted for these items, operating income in the third quarter increased 46.7 percent year over year to $63.5 million. As a percent of revenue, adjusted operating income was 11.3 percent in the third quarter of 2007, compared with 11.2 percent in the third quarter of 2006. Adjusted diluted income per share from continuing operations was $0.77 in the third quarter of 2007, a 42.6 percent increase from $0.54 in the third quarter of 2006. See the attached schedule, Adjusted Operating Results, for a reconciliation of GAAP results to adjusted results.
“Organic growth increased to a more representative level this quarter, as our significant product portfolio actions are now behind us,” said John Stroup, President and Chief Executive Officer of Belden. “But this quarter’s results do not yet reflect the financial benefit of the manufacturing restructuring we have been working on all year. Our acquisitions in the second quarter — Hirschman Automation, Lumberg Automation Components, and LTK Wiring — performed well and grew revenues substantially faster than the enterprise in total.”
Items of Note
    On July 2, 2007, Belden completed the sale of its telecommunications cable operation in the Czech Republic for $25.7 million, resulting in a pre-tax gain of $7.8 million. The transaction completed the Company’s exit from the telecommunications cable business.

 


 

    The Company’s new plant in Nogales, Mexico, began production and shipment of coaxial and twisted-pair cable, as planned.
 
    The quarter’s effective tax rate reflects the impact of the one-time $3.1 million benefit from lower tax rates for the Company’s operations in Germany, the utilization of net operating losses in Germany and the Netherlands, and the nontaxable gain on the sale of the Czech assets.
 
    Under its share repurchase program announced during the quarter, the Company repurchased 220,500 shares for $10.6 million.
Outlook
“We now expect 2007 revenue to be above $2.02 billion and earnings per diluted share to be between $2.85 and $2.95 for the year, excluding the nonrecurring items detailed on the attached schedule,” said Mr. Stroup.
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. Some of the 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, 2006, filed with the SEC on March 1, 2007. Belden disclaims any duty to update any forward-looking statements as a result of new information, future developments, or otherwise.
About Belden
Belden is a leader in the design, manufacture, and marketing of signal transmission solutions for data networking and a wide range of specialty electronics markets including entertainment, industrial, security and aerospace applications. To obtain additional information contact Investor Relations at 314-854-8054, or visit our website at www.belden.com.
Contact:
Belden
Dee Johnson, Director of Investor Relations
and Corporate Communications
314-854-8054
The following schedules are provided:
    Comparative condensed consolidated statements of operations for the three-month and nine-month periods ended September 23, 2007, and September 24, 2006.
 
    Segment results for the same periods.
 
    Condensed consolidated balance sheets as of September 23, 2007, and December 31, 2006.
 
    A supplemental schedule of adjusted consolidated results for the quarter, the year to date, and the prior-year comparable periods, excluding certain non-recurring purchase accounting effects, gain on sale of assets, severance charges, asset impairment, adjusted depreciation and discrete tax items.

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BELDEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    September 23, 2007     September 24, 2006     September 23, 2007     September 24, 2006  
            (In thousands, except per share data)          
 
Revenues
  $ 561,611     $ 385,581     $ 1,448,257     $ 1,117,054  
Cost of sales
    (403,914 )     (296,208 )     (1,048,671 )     (862,089 )
 
                       
Gross profit
    157,697       89,373       399,586       254,965  
Selling, general and administrative expenses
    (93,756 )     (51,234 )     (243,406 )     (150,706 )
Gain on sale of assets
    8,556             8,556        
Asset impairment
          (2,522 )     (3,262 )     (4,883 )
 
                       
Operating income
    72,497       35,617       161,474       99,376  
Interest expense
    (7,561 )     (3,056 )     (18,769 )     (10,549 )
Interest income
    803       1,971       5,286       4,610  
Other income (expense)
    581       (82 )     (864 )     (551 )
 
                       
Income from continuing operations
before taxes
    66,320       34,450       147,127       92,886  
Income tax expense
    (16,904 )     (10,064 )     (45,593 )     (32,036 )
 
                       
Income from continuing operations
    49,416       24,386       101,534       60,850  
Loss from discontinued operations,
net of tax
                      (1,330 )
Loss on disposal of discontinued
operations, net of tax
                      (4,298 )
Net income
  $ 49,416     $ 24,386     $ 101,534     $ 55,222  
 
                       
 
                               
Weighted average number of common
shares and equivalents:
                               
Basic
    45,084       43,513       44,887       43,044  
Diluted
    50,131       50,527       50,893       49,964  
 
                               
Basic income (loss) per share:
                               
Continuing operations
  $ 1.10     $ 0.56     $ 2.26     $ 1.41  
Discontinued operations
                      (0.03 )
Disposal of discontinued operations
                      (0.10 )
Net income
    1.10       0.56       2.26       1.28  
 
                               
Diluted income (loss) per share:
                               
Continuing operations
  $ 0.99     $ 0.50     $ 2.01     $ 1.26  
Discontinued operations
                      (0.03 )
Disposal of discontinued operations
                      (0.08 )
Net income
    0.99       0.50       2.01       1.15  
 
                               
Dividends declared per share
  $ 0.05     $ 0.05     $ 0.15     $ 0.15  


 

BELDEN INC.
OPERATING SEGMENT INFORMATION
(Unaudited)
                                 
    External                     Operating  
    Customer     Affiliate     Total     Income  
Three Months Ended September 23, 2007
  Revenues     Revenues     Revenues     (Loss)  
    (In thousands)  
 
                               
Belden Americas
  $ 231,625     $ 18,069     $ 249,694     $ 44,929  
Specialty Products
    60,575       26,459       87,034       14,557  
Europe
    171,828       7,271       179,099       23,627  
Asia Pacific
    97,583             97,583       10,276  
 
                       
Total Segments
    561,611       51,799       613,410       93,389  
Finance and Administration
                      (10,680 )
Eliminations
          (51,799 )     (51,799 )     (10,212 )
 
                       
Total Continuing Operations
  $ 561,611     $     $ 561,611     $ 72,497  
 
                       
 
                               
Three Months Ended September 24, 2006
                               
 
                               
Belden Americas
  $ 209,166     $ 15,266     $ 224,432     $ 35,768  
Specialty Products
    62,270       8,366       70,636       11,256  
Europe
    95,569       2,618       98,187       170  
Asia Pacific
    18,576             18,576       1,386  
 
                       
Total Segments
    385,581       26,250       411,831       48,580  
Finance and Administration
                      (8,087 )
Eliminations
          (26,250 )     (26,250 )     (4,876 )
 
                       
Total Continuing Operations
  $ 385,581     $     $ 385,581     $ 35,617  
 
                       
 
                               
Nine Months Ended September 23, 2007
                               
 
                               
Belden Americas
  $ 639,661     $ 47,766     $ 687,427     $ 121,590  
Specialty Products
    181,808       62,097       243,905       40,962  
Europe
    430,115       15,012       445,127       33,382  
Asia Pacific
    196,673             196,673       18,596  
 
                       
Total Segments
    1,448,257       124,875       1,573,132       214,530  
Finance and Administration
                      (29,872 )
Eliminations
          (124,875 )     (124,875 )     (23,184 )
 
                       
Total Continuing Operations
  $ 1,448,257     $     $ 1,448,257     $ 161,474  
 
                       
 
                               
Nine Months Ended September 24, 2006
                               
 
                               
Belden Americas
  $ 610,550     $ 49,141     $ 659,691     $ 105,167  
Specialty Products
    190,382       22,420       212,802       27,086  
Europe
    269,082       6,627       275,709       (901 )
Asia Pacific
    47,040             47,040       4,319  
 
                       
Total Segments
    1,117,054       78,188       1,195,242       135,671  
Finance and Administration
                      (21,128 )
Eliminations
          (78,188 )     (78,188 )     (15,167 )
 
                       
Total Continuing Operations
  $ 1,117,054     $     $ 1,117,054     $ 99,376  
 
                       


 

BELDEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
                 
    September 23, 2007 (1)     December 31, 2006  
    (Unaudited)          
    (In thousands)  
 
               
ASSETS
 
               
Current assets:
               
Cash and cash equivalents
  $ 120,324     $ 254,151  
Receivables
    429,609       217,908  
Inventories, net
    259,542       202,248  
Deferred income taxes
    40,828       34,664  
Other current assets
    16,860       10,465  
 
           
 
               
Total current assets
    867,163       719,436  
 
               
Property, plant and equipment, less accumulated depreciation
    382,885       272,285  
Goodwill, less accumulated amortization
    637,095       275,134  
Intangible assets, less accumulated amortization
    163,494       70,964  
Other long-lived assets
    53,115       18,149  
 
           
 
               
 
  $ 2,103,752     $ 1,355,968  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
               
Current liabilities:
               
Accounts payable and accrued liabilities
  $ 410,219     $ 200,008  
Current maturities of long-term debt
    110,000       62,000  
 
           
 
               
Total current liabilities
    520,219       262,008  
 
               
Long-term debt
    350,000       110,000  
Postretirement benefits
    127,891       62,995  
Deferred income taxes
    91,753       71,399  
Other long-term liabilities
    6,866       5,665  
Stockholders’ equity:
               
Common stock
    503       503  
Additional paid-in capital
    634,034       591,416  
Retained earnings
    445,469       348,069  
Accumulated other comprehensive income
    47,384       15,013  
Treasury stock
    (120,367 )     (111,100 )
 
           
 
               
Total stockholders’ equity
    1,007,023       843,901  
 
           
 
               
 
  $ 2,103,752     $ 1,355,968  
 
           
 
(1)   The September 23, 2007 condensed consolidated balance sheet includes the assets and liabilities of Hirschmann Automation and Control, LTK Wiring and Lumberg Automation, all of which were acquired during 2007.


 

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 purchase accounting effects related to acquisitions (inventory cost step-up, amortization of the sales backlog intangible asset, and in-process research and development charges), severance charges, adjusted depreciation, asset impairment, gains (losses) on sales of assets, and one-time tax benefits (charges). We utilize the adjusted results to review our ongoing operations without the effect of restructuring and related charges 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 September 23, 2007
  Reported     Adjustments     Adjusted  
    (In thousands, except percentages and per share amounts)  
 
                       
Revenues
  $ 561,611     $     $ 561,611  
 
                       
Gross profit
  $ 157,697     $ (435 )   $ 157,262  
as a percent of revenues
    28.1 %             28.0 %
 
                       
Operating income
  $ 72,497     $ (8,973 )   $ 63,524  
as a percent of revenues
    12.9 %             11.3 %
 
                       
Income from continuing operations
  $ 49,416     $ (11,015 )   $ 38,401  
as a percent of revenues
    8.8 %             6.8 %
 
                       
Income from continuing operations per diluted share
  $ 0.99     $ (0.22 )   $ 0.77  
 
                       
Three Months Ended September 24, 2006
                       
 
                       
Revenues
  $ 385,581     $     $ 385,581  
 
                       
Gross profit
  $ 89,373     $ 4,907     $ 94,280  
as a percent of revenues
    23.2 %             24.5 %
 
                       
Operating income
  $ 35,617     $ 7,671     $ 43,288  
as a percent of revenues
    9.2 %             11.2 %
 
                       
Income from continuing operations
  $ 24,386     $ 2,271     $ 26,657  
as a percent of revenues
    6.3 %             6.9 %
 
                       
Income from continuing operations per diluted share
  $ 0.50     $ 0.04     $ 0.54  
Adjustments for the three months ended September 23, 2007 included after-tax gain on sales of assets and adjusted depreciation of $7.7 million and $0.2 million, respectively, and a one-time tax benefit of $3.1 million.
Adjustments for the three months ended September 24, 2006 included after-tax charges for severance and asset impairment of $4.9 million and $2.1 million, respectively, and a one-time tax benefit of $4.7 million.

 


 

                         
    As              
Nine Months Ended September 23, 2007
  Reported     Adjustments     Adjusted  
    (In thousands, except percentages and per share amounts)  
 
                       
Revenues
  $ 1,448,257     $     $ 1,448,257  
 
                       
Gross profit
  $ 399,586     $ 10,374     $ 409,960  
as a percent of revenues
    27.6 %             28.3 %
 
                       
Operating income
  $ 161,474     $ 9,418     $ 170,892  
as a percent of revenues
    11.1 %             11.8 %
 
                       
Income from continuing operations
  $ 101,534     $ 1,421     $ 102,955  
as a percent of revenues
    7.0 %             7.1 %
 
                       
Income from continuing operations per diluted share
  $ 2.01     $ 0.03     $ 2.04  
 
                       
Nine Months Ended September 24, 2006
                       
 
                       
Revenues
  $ 1,117,054     $     $ 1,117,054  
 
                       
Gross profit
  $ 254,965     $ 8,067     $ 263,032  
as a percent of revenues
    22.8 %             23.5 %
 
                       
Operating income
  $ 99,376     $ 14,393     $ 113,769  
as a percent of revenues
    8.9 %             10.2 %
 
                       
Income from continuing operations
  $ 60,850     $ 7,794     $ 68,644  
as a percent of revenues
    5.4 %             6.1 %
 
                       
Income from continuing operations per diluted share
  $ 1.26     $ 0.15     $ 1.41  
Adjustments for the nine months ended September 23, 2007 included after-tax purchase accounting effects for acquisitions, asset impairment, severance, and adjusted depreciation of $8.0 million, $2.5 million, $0.7 million, and $0.8 million, respectively, partially offset by a $7.5 million after-tax gain on sales of assets and a $3.1 million one-time tax benefit.
Adjustments for the nine months ended September 24, 2006 included after-tax charges for severance, asset impairment and adjusted depreciation of $7.9 million, $3.5 million and $1.1 million, respectively, and a one-time tax benefit of $4.7 million.