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8-K - FORM 8-K - BELDEN INC. | c65641e8vk.htm |
Exhibit 99.1
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 Companys business and in managements 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
Companys 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 Companys
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 managements beliefs and
expectations. They are not guarantees of future performance and they involve risk and uncertainty.
The Companys 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 Companys expectations include: the Companys reliance on key distributors in
marketing products; the Companys 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 Companys major geographic markets;
difficulties in realigning manufacturing capacity and capabilities among the Companys global
manufacturing facilities; the competitiveness of the
global cable, connectivity and networking
industries; variability in the Companys quarterly and annual effective tax rates; changes in
accounting rules and interpretation of these rules which may affect the Companys reported
earnings; changes in currency exchange rates and political and economic uncertainties in the
countries where the Company conducts business; demand for the Companys products; the cost and
availability of materials including copper, plastic compounds derived from fossil fuels, electronic
components, and other materials; energy costs; the Companys 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
314-854-8054
Investor.Relations@Belden.com
BELDEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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)
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)
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
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)
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)
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 | ) | |||||||