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8-K - FORM 8-K - BELDEN INC.c62792e8vk.htm
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 Fourth Quarter and Full Year 2010 Results
Fourth quarter earnings per diluted share increase 179% year-over-year
Fourth Quarter Highlights
    Increased non-GAAP income from continuing operations per diluted share to $0.55, up 41% over last year’s $0.39 per diluted share;
 
    Grew revenue 13% year-over-year to $425.2 million, from $374.7 million in the fourth quarter 2009;
 
    Strengthened the Company’s connectivity and networking product platforms with the acquisitions of GarrettCom and the Thomas & Betts communications products business, with combined trailing 12-month revenue of approximately $100 million;
 
    Generated an after-tax gain on the sale of Trapeze Networks of $44.8 million, or $0.93 per diluted share, and
 
    Raised guidance for fiscal 2011 to revenues of $1.85 — $1.90 billion and income from continuing operations per diluted share of $2.05 — $2.25, up from prior guidance of $1.75 — $1.80 billion and $2.00 — $2.20, respectively.
Full Year 2010 Highlights
    Increased non-GAAP income from continuing operations per diluted share to $1.77, up 53% over last year’s $1.16 per diluted share;
 
    Grew revenue 19% to $1.62 billion, from $1.36 billion in 2009, and
 
    Generated free cash flow in excess of non-GAAP net income and increased the balance of cash and cash equivalents to $358.7 million at December 31, 2010.
St. Louis, Missouri — February 3, 2011 — Belden Inc. (NYSE: BDC), a global leader in signal transmission solutions for mission critical applications, today reported fiscal fourth quarter and full year 2010 results for the period ended December 31, 2010.
Fourth Quarter 2010
Revenue for the quarter totaled $425.2 million, up $50.5 million or 13% compared to $374.7 million in the fourth quarter 2009. Earnings per diluted share totaled $1.17, compared to $0.42 in the fourth quarter 2009.
John Stroup, President and CEO of Belden Inc. said, “Our fourth quarter results reflect a strong finish to a great year. In addition, the two acquisitions we completed in the fourth quarter represent meaningful additions to our connectivity and networking product platforms.”
Non-GAAP operating income totaled $40.9 million or 9.8% of revenue, compared to $35.0 million or 9.0% of revenue in the fourth quarter 2009. Non-GAAP income from continuing operations per diluted share totaled $0.55, compared to $0.39 in the fourth quarter 2009.

 


 

Belden Reports Strong Fourth Quarter and Full Year 2010 Results — Page 2 of 3
Full Year 2010
Revenue for the year totaled $1.62 billion, up $0.26 billion or 19% compared to $1.36 billion in 2009. Earnings per diluted share totaled $2.27 for the year, compared to $(0.53) in 2009.
Non-GAAP revenue for the year totaled $1.64 billion, up $0.22 billion or 16% compared to non-GAAP revenue of $1.42 billion in 2009. Non-GAAP operating income totaled $150.1 million or 9.1% of revenue for the year, compared to $111.9 million or 7.9% of revenue in 2009. Non-GAAP income from continuing operations per diluted share totaled $1.77 for the year, compared to $1.16 in 2009.
Mr. Stroup remarked, “I am extremely pleased with the Company’s results in 2010, which include 53% earnings growth, double-digit organic growth, and another year where free cash flow exceeded net income. I am encouraged by the fact that our superior performance was achieved without the benefit of a full recovery in all of our end markets.”
Outlook
“Based on another strong quarter of performance and increased evidence of a sustainable economic recovery, we have raised our outlook for 2011. The focused efforts of the Belden team around our strategic goals, including our Market Delivery System and Lean Enterprise initiatives, position us well to take advantage of a full economic recovery,” added Mr. Stroup.
The Company expects first quarter 2011 revenues to be $445 million to $450 million and income from continuing operations per diluted share to be $0.42 to $0.45. For the full year ending December 31, 2011, the Company expects revenues to be $1.85 billion to $1.90 billion and income from continuing operations per diluted share to be $2.05 to $2.25.
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.
Fourth quarter 2010 non-GAAP results exclude Trapeze Networks, the communications products business acquired from Thomas & Betts, and the GarrettCom acquisition. Additional non-GAAP revenue and income adjustments exclude the impact of the deferral of revenues and cost of sales, 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.

 


 

Belden Reports Strong Fourth Quarter and Full Year 2010 Results — Page 3 of 3
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 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 achieve acquisition performance expectations and 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; security risks and the potential for business interruption from operating in volatile countries, including Mexico; 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 6,600 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     Twelve Months Ended  
    December 31, 2010     December 31, 2009     December 31, 2010     December 31, 2009  
            (In thousands, except per share data)          
Revenues
  $ 425,176     $ 374,670     $ 1,617,090     $ 1,362,016  
Cost of sales
    (303,780 )     (269,438 )     (1,149,796 )     (974,331 )
 
                       
Gross profit
    121,396       105,232       467,294       387,685  
Selling, general and administrative expenses
    (76,371 )     (67,276 )     (279,677 )     (262,473 )
Research and development
    (11,499 )     (11,688 )     (42,605 )     (40,441 )
Amortization of intangibles
    (3,289 )     (2,735 )     (11,189 )     (9,871 )
Income from equity method investment
    3,035       2,003       11,940       6,405  
Asset impairment
    (16,574 )     (1,575 )     (16,574 )     (27,751 )
Loss on sale of assets
                      (17,184 )
 
                       
Operating income
    16,698       23,961       129,189       36,370  
Interest expense
    (10,916 )     (13,169 )     (49,826 )     (41,962 )
Interest income
    786       244       1,184       1,043  
Other income (expense)
                1,465       (1,541 )
 
                       
Income (loss) from continuing operations before taxes
    6,568       11,036       82,012       (6,090 )
Income tax benefit (expense)
    4,171       (179 )     (12,714 )     (1,175 )
 
                       
Income (loss) from continuing operations
    10,739       10,857       69,298       (7,265 )
Gain (loss) from discontinued operations, net of tax
    849       9,058       (5,686 )     (17,636 )
Gain on disposal of discontinued operations, net of tax
    44,847             44,847        
 
                       
Net income (loss)
  $ 56,435     $ 19,915     $ 108,459     $ (24,901 )
 
                       
Weighted average number of common shares and equivalents:
                               
Basic
    46,936       46,650       46,805       46,594  
Diluted
    48,134       47,315       47,783       46,594  
Basic income (loss) per share
                               
Continuing operations
  $ 0.23     $ 0.23     $ 1.48     $ (0.16 )
Discontinued operations
    0.02       0.20       (0.11 )     (0.37 )
Disposal of discontinued operations
    0.95             0.95        
 
                       
Net income (loss)
  $ 1.20     $ 0.43     $ 2.32     $ (0.53 )
 
                       
Diluted income (loss) per share
                               
Continuing operations
  $ 0.22     $ 0.23     $ 1.45     $ (0.16 )
Discontinued operations
    0.02       0.19       (0.11 )     (0.37 )
Disposal of discontinued operations
    0.93             0.93        
 
                       
Net income (loss)
  $ 1.17     $ 0.42     $ 2.27     $ (0.53 )
 
                       
Dividends declared per share
  $ 0.05     $ 0.05     $ 0.20     $ 0.20  

 


 

BELDEN INC.
OPERATING SEGMENT INFORMATION
(Unaudited)
                                 
    External                     Operating  
    Customer     Affiliate     Total     Income  
    Revenues     Revenues     Revenues     (Loss)  
            (In thousands)          
Three Months Ended December 31, 2010
                               
Americas
  $ 248,834     $ 12,294     $ 261,128     $ 30,760  
EMEA
    92,656       23,156       115,812       11,729  
Asia Pacific
    83,686             83,686       12,001  
 
                       
Total Segments
    425,176       35,450       460,626       54,490  
Corporate expenses
                      (23,850 )
Eliminations
          (35,450 )     (35,450 )     (13,942 )
 
                       
Total
  $ 425,176     $     $ 425,176     $ 16,698  
 
                       
 
                               
Three Months Ended December 31, 2009
                               
Americas
  $ 205,490     $ 11,616     $ 217,106     $ 27,992  
EMEA
    89,886       16,575       106,461       9,799  
Asia Pacific
    79,294             79,294       10,498  
 
                       
Total Segments
    374,670       28,191       402,861       48,289  
Corporate expenses
                      (13,570 )
Eliminations
          (28,191 )     (28,191 )     (10,758 )
 
                       
Total
  $ 374,670     $     $ 374,670     $ 23,961  
 
                       
 
                               
Twelve Months Ended December 31, 2010
                               
Americas
  $ 935,819     $ 48,899     $ 984,718     $ 133,984  
EMEA
    365,796       76,485       442,281       63,969  
Asia Pacific
    315,475       62       315,537       40,147  
 
                       
Total Segments
    1,617,090       125,446       1,742,536       238,100  
Corporate expenses
                      (62,821 )
Eliminations
          (125,446 )     (125,446 )     (46,090 )
 
                       
Total
  $ 1,617,090     $     $ 1,617,090     $ 129,189  
 
                       
 
                               
Twelve Months Ended December 31, 2009
                               
Americas
  $ 766,569     $ 43,489     $ 810,058     $ 117,324  
EMEA
    345,197       55,256       400,453       (36,828 )
Asia Pacific
    250,250             250,250       28,794  
 
                       
Total Segments
    1,362,016       98,745       1,460,761       109,290  
Corporate expenses
                      (41,378 )
Eliminations
          (98,745 )     (98,745 )     (31,542 )
 
                       
Total
  $ 1,362,016     $     $ 1,362,016     $ 36,370  
 
                       

 


 

BELDEN INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
                 
    Twelve Months Ended  
    December 31, 2010     December 31, 2009  
    (In thousands)  
Cash flows from operating activities:
               
Net income (loss)
  $ 108,459     $ (24,901 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
               
Depreciation and amortization
    55,279       55,857  
Asset impairment
    16,574       27,751  
Share-based compensation
    12,107       11,748  
Provision for inventory obsolescence
    3,210       4,550  
Non-cash loss on derivatives and hedging instruments
    2,893        
Tax deficiency related to share-based compensation
    110       1,564  
Loss (gain) on sale of assets
    (44,847 )     17,184  
Income from equity method investment
    (11,940 )     (6,405 )
Deferred income tax benefit
    (11,577 )     (23,421 )
Pension funding in excess of pension expense
    (4,289 )     (8,973 )
Changes in operating assets and liabilities, net of the effects of currency exchange rate changes and acquired businesses:
               
Receivables
    (39,458 )     52,369  
Inventories
    (14,031 )     50,645  
Deferred cost of sales
    7,003       (1,036 )
Accounts payable
    38,513       9,728  
Accrued liabilities
    7,569       (33,483 )
Deferred revenue
    (15,772 )     2,564  
Accrued taxes
    (3,037 )     7,597  
Other assets
    20,206       11,665  
Other liabilities
    (15,423 )     (3,193 )
 
           
Net cash provided by operating activities
    111,549       151,810  
 
               
Cash flows from investing activities:
               
Proceeds from disposal of tangible assets
    138,952       2,031  
Cash used to acquire businesses, net of cash acquired
    (119,110 )     (20,703 )
Capital expenditures
    (28,194 )     (40,377 )
 
           
Net cash used for investing activities
    (8,352 )     (59,049 )
 
               
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
    (9,412 )     (9,373 )
Tax deficiency related to share-based compensation
    (110 )     (1,564 )
Proceeds from exercise of stock options
    3,158       699  
Cash received upon termination of derivative instruments
    4,217        
 
           
Net cash used for financing activities
    (48,415 )     (22,048 )
 
               
Effect of foreign currency exchange rate changes on cash and cash equivalents
    (5,008 )     10,753  
 
           
 
               
Increase in cash and cash equivalents
    49,774       81,466  
Cash and cash equivalents, beginning of period
    308,879       227,413  
 
           
Cash and cash equivalents, end of period
  $ 358,653     $ 308,879  
 
           

 


 

BELDEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
                 
    December 31, 2010     December 31, 2009  
    (Unaudited)          
    (In thousands)  
ASSETS
 
Current assets:
               
Cash and cash equivalents
  $ 358,653     $ 308,879  
Receivables, net
    298,266       230,360  
Inventories, net
    175,659       144,189  
Deferred income taxes
    9,473       28,115  
Other current assets
    18,804       14,966  
Current assets of discontinued operations
          133,329  
 
           
 
               
Total current assets
    860,855       859,838  
 
               
Property, plant and equipment, less accumulated depreciation
    278,866       298,258  
Goodwill
    322,556       273,126  
Intangible assets, less accumulated amortization
    143,820       116,592  
Deferred income taxes
    27,565       10,809  
Other long-lived assets
    62,822       61,955  
 
           
 
  $ 1,696,484     $ 1,620,578  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities:
               
Accounts payable
  $ 212,084     $ 166,723  
Accrued liabilities
    145,840       117,206  
Current maturities of long-term debt
          46,268  
Current liabilities of discontinued operations
          31,237  
 
           
 
               
Total current liabilities
    357,924       361,434  
 
               
Long-term debt
    551,155       543,942  
Postretirement benefits
    112,426       121,745  
Other long-term liabilities
    36,464       42,409  
Stockholders’ equity:
               
Common stock
    503       503  
Additional paid-in capital
    595,519       591,917  
Retained earnings
    171,568       72,625  
Accumulated other comprehensive income (loss)
    (8,919 )     14,614  
Treasury stock
    (120,156 )     (128,611 )
 
           
 
               
Total stockholders’ equity
    638,515       551,048  
 
           
 
  $ 1,696,484     $ 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 asset impairments, purchase accounting effects related to acquisitions, revenue and cost of sales deferrals, 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     Twelve Months Ended  
    December 31, 2010     December 31, 2009     December 31, 2010     December 31, 2009  
    (In thousands, except percentages and per share amounts)  
GAAP revenues
  $ 425,176     $ 374,670     $ 1,617,090     $ 1,362,016  
Revenues from acquisitions
    (6,544 )           (6,544 )      
Discontinued operations GAAP revenues
          13,100       46,047       53,246  
Deferred revenue adjustments
          1,721       (14,771 )     2,564  
 
                       
Non-GAAP revenues
  $ 418,632     $ 389,491     $ 1,641,822     $ 1,417,826  
 
                       
 
                               
GAAP operating income
  $ 16,698     $ 23,962     $ 129,189     $ 36,370  
Asset impairment
    16,574       1,575       16,574       27,751  
Acquisition results and related costs
    7,149       751       9,407       751  
Severance and other restructuring related costs
    509       11,222       10,041       53,234  
Accelerated depreciation
          1,698       2,216       2,589  
Loss on sale of assets
                      17,184  
Other
                      787  
Discontinued operations GAAP operating loss
          (5,381 )     (9,011 )     (28,325 )
Deferred gross profit adjustments
          1,199       (8,292 )     1,528  
 
                       
Total operating income adjustments
    24,232       11,064       20,935       75,499  
 
                       
Non-GAAP operating income
  $ 40,930     $ 35,026     $ 150,124     $ 111,869  
 
                       
Non-GAAP operating income as a percent of non-GAAP revenues
    9.8 %     9.0 %     9.1 %     7.9 %
 
                               
GAAP income (loss) from continuing operations
  $ 10,739     $ 10,857     $ 69,298     $ (7,265 )
Operating income adjustments
    24,232       11,064       20,935       75,499  
Fees incurred to amend credit facility
                      1,541  
Derivative accounting
                2,749        
Discontinued operations interest income
                47        
Tax effect of adjustments
    (8,588 )     (3,488 )     (8,424 )     (15,348 )
 
                       
Non-GAAP income from continuing operations
  $ 26,383     $ 18,433     $ 84,605     $ 54,427  
 
                       
 
                               
GAAP income (loss) from continuing operations per diluted share
  $ 0.22     $ 0.23     $ 1.45     $ (0.16 )
Non-GAAP income from continuing operations per diluted share
  $ 0.55     $ 0.39     $ 1.77     $ 1.16  
 
                               
GAAP diluted weighted average shares
    48,134       47,315       47,783       46,594  
Adjustment for anti-dilutive shares that are dilutive under non-GAAP measures
                      405  
 
                       
Non-GAAP diluted weighted average shares
    48,134       47,315       47,783       46,999  
 
                               
GAAP net cash provided by operating activities
  $ 56,138     $ 31,874     $ 111,549     $ 151,810  
Net capital expenditures
    (8,903 )     (12,561 )     (25,769 )     (38,725 )
 
                       
Non-GAAP free cash flow
  $ 47,235     $ 19,313     $ 85,780     $ 113,085