Attached files

file filename
8-K - FORM 8-K - BELDEN INC.c65641e8vk.htm
         
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 Earnings Up 60% on Strong Revenue Growth in Second Quarter 2011
Board authorizes $150 million share repurchase program
St. Louis, Missouri — July 28, 2011 — Belden Inc. (NYSE: BDC), a global leader in signal transmission solutions for mission critical applications, today reported fiscal second quarter 2011 results for the period ended July 3, 2011.
Second Quarter Highlights
    Increased income from continuing operations per diluted share to $0.72, up 60% over $0.45 per diluted share in the second quarter 2010;
 
    Grew revenue 31% year-over-year to $536.3 million and 17%, excluding acquisitions and currency effects;
 
    Generated $38.8 million in free cash flow, increasing cash and cash equivalents to $329.3 million at quarter-end;
 
    Improved operating income percentage to 10.9% from 9.6% in the year-ago period; and
 
    Raised full-year guidance for fiscal 2011 to revenues of $2.01 - $2.03 billion and income from continuing operations per diluted share of $2.30 - $2.40, up from prior guidance of $1.96 - $2.00 billion and $2.15 - $2.30, respectively.
Second Quarter Results
Revenue for the quarter totaled $536.3 million, up $125.7 million or 31% compared to $410.6 million in the second quarter 2010. Income from continuing operations per diluted share for the quarter totaled $0.72, compared to $0.45 per diluted share in the second quarter 2010. Results for the current quarter include four acquisitions completed during the fourth quarter 2010 and the first quarter 2011.
John Stroup, President and CEO of Belden Inc. remarked, “As expected, we experienced strong earnings growth and operating margin expansion due principally to the benefits of healthy organic growth. Additionally, I am extremely pleased with the progress made in smoothly integrating our recent acquisitions.”
Share Repurchase Authorization
The Company also today announced that its board of directors approved a new share repurchase program that enables the Company to purchase up to $150 million of its common stock through open market purchases, negotiated transactions, or other means, in accordance with applicable securities laws and other restrictions.
Mr. Stroup added, “The $150 million share repurchase program approved by the Board reflects their confidence in the Company’s business and in management’s continuing ability to execute our strategic plan successfully. Our existing cash balance, projected free cash flow generation, and the additional liquidity available through the $400 million revolving credit facility, allows us the flexibility to execute this program in tandem with our ongoing strategic acquisition initiatives.”

 


 

Belden Earnings Up 60% on Strong Revenue Growth in Second Quarter 2011 — Page 2 of 3
Outlook
“Our first half results were achieved through solid execution and a robust recovery across our industrial end markets. Our guidance assumes no meaningful change in the global economy over the remainder of this year, but adjusts for the usual third quarter seasonality in our business,” said Mr. Stroup.
The Company expects third quarter 2011 revenues to be $505 — $510 million and income from continuing operations per diluted share of $0.56 — $0.59. For the full year ending December 31, 2011, the Company expects revenues to be $2.01 — $2.03 billion and income from continuing operations per diluted share of $2.30 — $2.40.
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.
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. There can be no assurance that the recent improvements in the global economy will continue. 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; 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, electronic components, 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; security risks and the potential for business interruption from operating in volatile countries; disruptions or failures of our (or our suppliers or customers) systems or operations in the event of a major earthquake, weather event, cyber-attack, terrorist attack, or other catastrophic event that could cause delays in completing sales, providing services, or performing other mission-critical functions; 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, 2010, filed with the SEC on February 25, 2011. Belden disclaims any duty to update any forward looking statements as a result of new information, future developments, or otherwise.

 


 

Belden Earnings Up 60% on Strong Revenue Growth in Second Quarter 2011 — 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 6,900 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, South 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 3, 2011     July 4, 2010     July 3, 2011     July 4, 2010  
            (In thousands, except per share data)          
Revenues
  $ 536,251     $ 410,563     $ 997,879     $ 794,987  
Cost of sales
    (379,637 )     (293,259 )     (710,810 )     (567,273 )
 
                       
Gross profit
    156,614       117,304       287,069       227,714  
Selling, general and administrative expenses
    (84,380 )     (68,407 )     (159,316 )     (137,142 )
Research and development
    (14,530 )     (9,911 )     (28,159 )     (20,219 )
Amortization of intangibles
    (3,347 )     (2,587 )     (7,026 )     (5,300 )
Income from equity method investment
    3,855       3,211       7,717       5,852  
 
                       
Operating income
    58,212       39,610       100,285       70,905  
Interest expense
    (12,748 )     (14,186 )     (24,556 )     (27,132 )
Interest income
    156       136       315       318  
Other income
          1,465             1,465  
 
                       
Income from continuing operations before taxes
    45,620       27,025       76,044       45,556  
Income tax expense
    (10,739 )     (5,440 )     (19,145 )     (9,641 )
 
                       
Income from continuing operations
    34,881       21,585       56,899       35,915  
Loss from discontinued operations, net of tax
    (156 )     (1,913 )     (284 )     (4,496 )
 
                       
Net income
  $ 34,725     $ 19,672     $ 56,615     $ 31,419  
 
                       
 
                               
Weighted average number of common shares and equivalents:
                               
Basic
    47,401       46,779       47,304       46,737  
Diluted
    48,414       47,788       48,372       47,647  
 
                               
Basic income (loss) per share:
                               
 
                               
Continuing operations
  $ 0.73     $ 0.46     $ 1.20     $ 0.77  
Discontinued operations
          (0.04 )     (0.01 )     (0.10 )
 
                       
Net income
  $ 0.73     $ 0.42     $ 1.19     $ 0.67  
 
                       
 
                               
Diluted income (loss) per share:
                               
Continuing operations
  $ 0.72     $ 0.45     $ 1.18     $ 0.75  
Discontinued operations
          (0.04 )     (0.01 )     (0.09 )
 
                       
Net income
  $ 0.72     $ 0.41     $ 1.17     $ 0.66  
 
                       
 
                               
Dividends declared per share
  $ 0.05     $ 0.05     $ 0.10     $ 0.10  

 


 

BELDEN INC.
OPERATING SEGMENT INFORMATION
(Unaudited)
                                                 
                    Total                    
Three Months Ended July 3, 2011   Americas     EMEA     Asia Pacific     Segments     Eliminations     Total  
                    (In thousands)                  
External customer revenues
  $ 325,732     $ 115,498     $ 95,021     $ 536,251     $     $ 536,251  
Affiliate revenues
    11,475       27,482       398       39,355       (39,355 )      
 
                                   
Total revenues
  $ 337,207     $ 142,980     $ 95,419     $ 575,606     $ (39,355 )   $ 536,251  
Operating income
  $ 40,379     $ 23,469     $ 9,228     $ 73,076     $ (14,864 )   $ 58,212  
 
                                               
Three Months Ended July 4, 2010
                                               
External customer revenues
  $ 236,923     $ 92,193     $ 81,447     $ 410,563     $     $ 410,563  
Affiliate revenues
    12,133       17,880       62       30,075       (30,075 )      
 
                                   
Total revenues
  $ 249,056     $ 110,073     $ 81,509     $ 440,638     $ (30,075 )   $ 410,563  
Operating income
  $ 27,053     $ 15,241     $ 7,833     $ 50,127     $ (10,517 )   $ 39,610  
 
                                               
Six Months Ended July 3, 2011
                                               
External customer revenues
  $ 602,730     $ 219,188     $ 175,961     $ 997,879     $     $ 997,879  
Affiliate revenues
    23,543       50,148       499       74,190       (74,190 )      
 
                                   
Total revenues
  $ 626,273     $ 269,336     $ 176,460     $ 1,072,069     $ (74,190 )   $ 997,879  
Operating income
  $ 71,951     $ 40,567     $ 15,601     $ 128,119     $ (27,834 )   $ 100,285  
 
                                               
Six Months Ended July 4, 2010
                                               
External customer revenues
  $ 454,852     $ 182,743     $ 157,392     $ 794,987     $     $ 794,987  
Affiliate revenues
    24,870       32,623       62       57,555       (57,555 )      
 
                                   
Total revenues
  $ 479,722     $ 215,366     $ 157,454     $ 852,542     $ (57,555 )   $ 794,987  
Operating income
  $ 50,841     $ 26,302     $ 13,543     $ 90,686     $ (19,781 )   $ 70,905  

 


 

BELDEN INC.
SUPPLEMENTAL PRODUCT GROUP INFORMATION
(Unaudited)
                                 
Three Months Ended July 3, 2011   Americas     EMEA     Asia Pacific     Total  
            (In thousands)          
Cable products
  $ 254,826     $ 46,628     $ 77,043     $ 378,497  
Networking products
    27,863       40,080       13,591       81,534  
Connectivity products
    43,043       28,790       4,387       76,220  
 
                       
Total revenues
  $ 325,732     $ 115,498     $ 95,021     $ 536,251  
 
                       
 
                               
Three Months Ended July 4, 2010
                               
Cable products
  $ 205,648     $ 37,967     $ 68,831     $ 312,446  
Networking products
    15,139       29,950       8,873       53,962  
Connectivity products
    16,136       24,276       3,743       44,155  
 
                       
Total revenues
  $ 236,923     $ 92,193     $ 81,447     $ 410,563  
 
                       
 
                               
Six Months Ended July 3, 2011
                               
Cable products
  $ 465,932     $ 89,839     $ 141,854     $ 697,625  
Networking products
    54,477       72,673       25,639       152,789  
Connectivity products
    82,321       56,676       8,468       147,465  
 
                       
Total revenues
  $ 602,730     $ 219,188     $ 175,961     $ 997,879  
 
                       
 
                               
Six Months Ended July 4, 2010
                               
Cable products
  $ 392,399     $ 77,846     $ 133,512     $ 603,757  
Networking products
    28,448       58,324       16,448       103,220  
Connectivity products
    34,005       46,573       7,432       88,010  
 
                       
Total revenues
  $ 454,852     $ 182,743     $ 157,392     $ 794,987  
 
                       

 


 

BELDEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
                 
    July 3, 2011        
    (Unaudited)     December 31, 2010  
    (In thousands)  
ASSETS
               
Current assets:
               
Cash and cash equivalents
  $ 329,312     $ 358,653  
Receivables, net
    363,373       298,266  
Inventories, net
    201,930       175,659  
Deferred income taxes
    9,097       9,473  
Other current assets
    18,575       18,804  
 
           
 
               
Total current assets
    922,287       860,855  
 
               
Property, plant and equipment, less accumulated depreciation
    291,793       278,866  
Goodwill
    353,849       322,556  
Intangible assets, less accumulated amortization
    161,257       143,820  
Deferred income taxes
    22,567       27,565  
Other long-lived assets
    72,473       62,822  
 
           
 
               
 
  $ 1,824,226     $ 1,696,484  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current liabilities:
               
Accounts payable
  $ 239,138     $ 212,084  
Accrued liabilities
    144,814       145,840  
 
           
 
               
Total current liabilities
    383,952       357,924  
 
               
Long-term debt
    550,984       551,155  
Postretirement benefits
    119,485       112,426  
Other long-term liabilities
    39,338       36,464  
Stockholders’ equity:
               
Common stock
    503       503  
Additional paid-in capital
    596,684       595,519  
Retained earnings
    223,382       171,568  
Accumulated other comprehensive income (loss)
    21,439       (8,919 )
Treasury stock
    (111,541 )     (120,156 )
 
           
 
               
Total stockholders’ equity
    730,467       638,515  
 
           
 
               
 
  $ 1,824,226     $ 1,696,484  
 
           

 


 

BELDEN INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
                 
    Six Months Ended  
    July 3, 2011     July 4, 2010  
    (In thousands)  
Cash flows from operating activities:
               
Net income
  $ 56,615     $ 31,419  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
    25,111       28,676  
Share-based compensation
    5,716       6,588  
Pension funding less than (greater than) pension expense
    1,820       (2,700 )
Provision for inventory obsolescence
    1,160       1,752  
Non-cash loss related to derivatives and hedging instruments
          2,749  
Tax deficiency (benefit) related to share-based compensation
    (1,796 )     210  
Income from equity method investment
    (7,717 )     (5,852 )
Changes in operating assets and liabilities, net of the effects of currency exchange rate changes and acquired businesses:
               
Receivables
    (50,623 )     (61,382 )
Inventories
    (18,616 )     (11,326 )
Accounts payable
    19,282       27,182  
Accrued liabilities
    (14,535 )     (10,708 )
Accrued taxes
    13,040       (5,267 )
Other assets
    1,310       11,638  
Other liabilities
    383       (7,466 )
 
           
Net cash provided by operating activities
    31,150       5,513  
 
               
Cash flows from investing activities:
               
Cash used to acquire businesses, net of cash acquired
    (52,418 )      
Capital expenditures
    (14,883 )     (12,705 )
Proceeds from disposal of tangible assets
    1,222       2,332  
Cash provided by other investing activities
          163  
 
           
Net cash used for investing activities
    (66,079 )     (10,210 )
 
               
Cash flows from financing activities:
               
Payments under borrowing arrangements
          (46,268 )
Cash dividends paid
    (4,718 )     (4,712 )
Debt issuance costs
    (3,296 )      
Tax benefit (deficiency) related to share-based compensation
    1,796       (210 )
Proceeds from exercise of stock options
    4,554       634  
 
           
Net cash used for financing activities
    (1,664 )     (50,556 )
 
               
Effect of foreign currency exchange rate changes on cash and cash equivalents
    7,252       (8,011 )
 
           
 
               
Decrease in cash and cash equivalents
    (29,341 )     (63,264 )
Cash and cash equivalents, beginning of period
    358,653       308,879  
 
           
Cash and cash equivalents, end of period
  $ 329,312     $ 245,615  
 
           

 


 

BELDEN INC.
RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)
We define free cash flow, which is a non-GAAP financial measure, as net cash provided by operating activities less capital expenditures, net of proceeds from the disposal of tangible assets. We believe free cash flow provides useful information to investors regarding our ability to generate cash from business operations that is available for acquisitions and other investments, service of debt principal, dividends and share repurchases. We use free cash flow, as defined, as one financial measure to monitor and evaluate performance and liquidity. Non-GAAP financial measures should be considered only in conjunction with financial measures reported according to accounting principles generally accepted in the United States. Our definition of free cash flow may differ from definitions used by other companies.
                                 
    Three Months Ended     Three Months Ended     Six Months Ended     Six Months Ended  
    July 3, 2011     July 4, 2010     July 3, 2011     July 4, 2010  
            (In thousands)          
GAAP net cash provided by operating activities
  $ 46,777     $ 18,720     $ 31,150     $ 5,513  
Capital expenditures, net of proceeds from the disposal of tangible assets
    (7,999 )     (5,195 )     (13,661 )     (10,373 )
 
                       
Non-GAAP free cash flow
  $ 38,778     $ 13,525     $ 17,489     $ (4,860 )