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 |
From: | Belden Investor Relations 314.854.8054 |
Belden Announces Third Quarter 2009 Results
Third Quarter 2009 Highlights
• | Adjusted net income per diluted share was $0.27 in the quarter | ||
• | Free cash flow during the third quarter was $42.8 million | ||
• | Third quarter adjusted operating margin was 7.7 percent | ||
• | Inventory turns improved 0.5 turns sequentially and 1.1 turns year-over-year to 6.6 turns | ||
• | Revenue and EPS, adjusted for certain items, for the fourth quarter of 2009 are expected to be between $365 million and $375 million and $0.27 and $0.32 per share, respectively |
St. Louis, Missouri — Wednesday, October 28, 2009 — Belden (NYSE:BDC), a leader in the design, manufacture, and marketing of signal transmission solutions for industrial automation, data networking, and a wide range of specialty electronics markets, today announced results of its 2009 fiscal third quarter.
Third Quarter 2009 Results
The Company reported third quarter 2009 revenue of $355.2 million and operating income of $18.4 million, compared to revenue and operating income of $520.5 million and $47.7 million in the third quarter of 2008, respectively. The Company reported a net loss of $7.5 million, or ($0.16) per diluted share, down from net income of $31.5 million, or $0.67 per diluted share, in the prior year period. Revenue in the most recent quarter included $7.7 million of unfavorable currency translation as compared to the prior year third quarter. Cash flow from operations was $50.6 million during the quarter, and net of capital expenditures was $42.8 million.
During the quarter, Belden recorded pre-tax operating charges for contract termination costs of $2.2 million, severance and employee relocation costs of $1.5 million, equipment relocation costs of $0.7 million, and other costs of $4.4 million associated with the Company’s previously announced global restructuring plan.
In the third quarter of 2008, the Company incurred pre-tax operating charges of $8.4 million for revenue deferrals, purchase accounting effects for acquisitions, asset impairment and severance costs.
Adjusted for these items, operating income in the third quarter of 2009 was $27.2 million, or 7.7 percent of revenue, compared to $56.1 million or 10.6 percent one year ago. Adjusted net income per diluted share was $0.27 in the quarter, compared to $0.78 in the third quarter of 2008. See the attached schedule, Adjusted Operating Results, for a reconciliation of GAAP results to adjusted results.
“Though the world economy remains weakened, our results reflect stabilizing demand in most of our major markets, with improving levels in Asia. Further, we continue to see the benefits from our Lean approach, which forms the basis for disciplined cost control and strong cash flow generation despite this challenging economic environment,” said John Stroup, President and Chief Executive Officer of Belden. “Our focus on customers, cost and cash flow, coupled with the dedication and skill of our worldwide associates, allows the Company to perform well in these uncertain times and positions us to excel when recovery re-ignites demand.”
Stroup continued, “We are especially pleased with our third quarter free cash flow of $42.8 million. This brings our year-to-date free cash flow generation to $93.8 million and a cash balance in excess of $310 million.”
Outlook
The Company expects adjusted fourth quarter revenue and EPS to be between $365 million and $375 million and $0.27 and $0.32 per share, respectively, excluding the impact of the deferral of revenues and cost of goods sold with respect to its wireless segment and the impact of charges associated with already announced restructuring actions.
Stroup remarked, “Despite a competitive environment we expect our fourth quarter results to benefit from slightly improved demand, seasonality and continued contributions from our global restructuring efforts.”
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 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 wireless 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;
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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 acquired businesses; 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; 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, 2008, filed with the SEC on February 27, 2009. Belden disclaims any duty to update any forward looking statements as a result of new information, future developments, or otherwise.
About Belden
Sending All the Right Signals — from industrial automation to data centers, from broadcast studios to aerospace, from cutting-edge wireless communications to consumer electronics, Belden people are committed to delivering the best signal transmission solutions in the world. Belden associates work in copper cable, fiber, wireless technology, connectors, switches and active components to bring voice, video and data to mission-critical applications. With 2008 revenue of $2.0 billion, Belden has manufacturing capability in North America, Europe and Asia. To obtain additional information contact Investor Relations at 314-854-8054, or visit our website atwww.belden.com.
Contact: | Belden Investor Relations 314-854-8054 |
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BELDEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 27, 2009 | September 28, 2008 | September 27, 2009 | September 28, 2008 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Revenues | $ | 355,159 | $ | 520,494 | $ | 1,027,492 | $ | 1,588,623 | ||||||||
Cost of sales | (247,086 | ) | (366,842 | ) | (726,708 | ) | (1,122,681 | ) | ||||||||
Gross profit | 108,073 | 153,652 | 300,784 | 465,942 | ||||||||||||
Selling, general and administrative expenses | (71,489 | ) | (85,149 | ) | (215,765 | ) | (267,225 | ) | ||||||||
Research and development | (14,161 | ) | (15,887 | ) | (44,838 | ) | (36,051 | ) | ||||||||
Amortization of intangibles | (3,983 | ) | (4,125 | ) | (11,759 | ) | (9,286 | ) | ||||||||
Asset impairment | — | (753 | ) | (26,176 | ) | (12,302 | ) | |||||||||
Loss on sale of assets | — | — | (17,184 | ) | (884 | ) | ||||||||||
Operating income (loss) | 18,440 | 47,738 | (14,938 | ) | 140,194 | |||||||||||
Interest expense | (12,575 | ) | (8,857 | ) | (28,793 | ) | (28,266 | ) | ||||||||
Interest income | 199 | 1,226 | 801 | 4,058 | ||||||||||||
Other income | 2,418 | 813 | 2,862 | 3,967 | ||||||||||||
Income (loss) before taxes | 8,482 | 40,920 | (40,068 | ) | 119,953 | |||||||||||
Income tax expense | (15,958 | ) | (9,386 | ) | (4,748 | ) | (33,729 | ) | ||||||||
Net income (loss) | $ | (7,476 | ) | $ | 31,534 | $ | (44,816 | ) | $ | 86,224 | ||||||
Weighted average number of common shares and equivalents: | ||||||||||||||||
Basic | 46,607 | 44,571 | 46,574 | 44,072 | ||||||||||||
Diluted | 46,607 | 47,082 | 46,574 | 47,643 | ||||||||||||
Basic income (loss) per share | $ | (0.16 | ) | $ | 0.71 | $ | (0.96 | ) | $ | 1.96 | ||||||
Diluted income (loss) per share | $ | (0.16 | ) | $ | 0.67 | $ | (0.96 | ) | $ | 1.81 | ||||||
Dividends declared per share | $ | 0.05 | $ | 0.05 | $ | 0.15 | $ | 0.15 |
BELDEN INC.
OPERATING SEGMENT INFORMATION
(Unaudited)
OPERATING SEGMENT INFORMATION
(Unaudited)
External | Operating | |||||||||||||||
Customer | Affiliate | Total | Income | |||||||||||||
Revenues | Revenues | Revenues | (Loss) | |||||||||||||
(In thousands) | ||||||||||||||||
Three Months Ended September 27, 2009 | ||||||||||||||||
Americas | $ | 192,135 | $ | 12,994 | $ | 205,129 | $ | 31,153 | ||||||||
Wireless | 14,910 | — | 14,910 | (6,644 | ) | |||||||||||
EMEA | 81,012 | 13,099 | 94,111 | 5,596 | ||||||||||||
Asia Pacific | 67,102 | — | 67,102 | 6,700 | ||||||||||||
Total Segments | 355,159 | 26,093 | 381,252 | 36,805 | ||||||||||||
Corporate expenses | — | — | — | (10,141 | ) | |||||||||||
Eliminations | — | (26,093 | ) | (26,093 | ) | (8,224 | ) | |||||||||
Total | $ | 355,159 | $ | — | $ | 355,159 | $ | 18,440 | ||||||||
Three Months Ended September 28, 2008 | ||||||||||||||||
Americas | $ | 277,235 | $ | 13,692 | $ | 290,927 | $ | 51,148 | ||||||||
Wireless | 7,792 | 38 | 7,830 | (8,784 | ) | |||||||||||
EMEA | 139,489 | 20,818 | 160,307 | 11,674 | ||||||||||||
Asia Pacific | 95,978 | — | 95,978 | 11,755 | ||||||||||||
Total Segments | 520,494 | 34,548 | 555,042 | 65,793 | ||||||||||||
Corporate expenses | — | — | — | (10,824 | ) | |||||||||||
Eliminations | — | (34,548 | ) | (34,548 | ) | (7,231 | ) | |||||||||
Total | $ | 520,494 | $ | — | $ | 520,494 | $ | 47,738 | ||||||||
Nine Months Ended September 27, 2009 | ||||||||||||||||
Americas | $ | 561,079 | $ | 31,873 | $ | 592,952 | $ | 89,332 | ||||||||
Wireless | 40,147 | — | 40,147 | (22,944 | ) | |||||||||||
EMEA | 255,310 | 38,681 | 293,991 | (51,029 | ) | |||||||||||
Asia Pacific | 170,956 | — | 170,956 | 18,296 | ||||||||||||
Total Segments | 1,027,492 | 70,554 | 1,098,046 | 33,655 | ||||||||||||
Corporate expenses | — | — | — | (27,808 | ) | |||||||||||
Eliminations | — | (70,554 | ) | (70,554 | ) | (20,785 | ) | |||||||||
Total | $ | 1,027,492 | $ | — | $ | 1,027,492 | $ | (14,938 | ) | |||||||
Nine Months Ended September 28, 2008 | ||||||||||||||||
Americas | $ | 812,407 | $ | 51,069 | $ | 863,476 | $ | 121,628 | ||||||||
Wireless | 7,792 | 38 | 7,830 | (8,784 | ) | |||||||||||
EMEA | 472,707 | 65,483 | 538,190 | 52,903 | ||||||||||||
Asia Pacific | 295,717 | 111 | 295,828 | 38,817 | ||||||||||||
Total Segments | 1,588,623 | 116,701 | 1,705,324 | 204,564 | ||||||||||||
Corporate expenses | — | — | — | (37,047 | ) | |||||||||||
Eliminations | — | (116,701 | ) | (116,701 | ) | (27,323 | ) | |||||||||
Total | $ | 1,588,623 | $ | — | $ | 1,588,623 | $ | 140,194 | ||||||||
BELDEN INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
Nine Months Ended | ||||||||
September 27, 2009 | September 28, 2008 | |||||||
(In thousands) | ||||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | (44,816 | ) | $ | 86,224 | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 40,630 | 42,394 | ||||||
Asset impairment | 26,176 | 12,302 | ||||||
Loss on sale of assets | 17,184 | 884 | ||||||
Share-based compensation | 8,373 | 10,614 | ||||||
Provision for inventory obsolescence | 4,912 | 6,495 | ||||||
Tax deficiency (benefit) related to share-based compensation | 1,507 | (1,297 | ) | |||||
Amortization of discount on long-term debt | 103 | 1,256 | ||||||
Pension funding in excess of pension expense | (7,000 | ) | (1,114 | ) | ||||
Changes in operating assets and liabilities, net of the effects of currency exchange rate changes and acquired businesses: | ||||||||
Receivables | 40,784 | (9,297 | ) | |||||
Inventories | 49,631 | (7,440 | ) | |||||
Deferred cost of sales | (514 | ) | (3,300 | ) | ||||
Accounts payable | 2,517 | 21,148 | ||||||
Accrued liabilities | (23,543 | ) | (33,154 | ) | ||||
Deferred revenue | 843 | 8,721 | ||||||
Accrued taxes | 1,996 | (5,890 | ) | |||||
Other assets | 1,987 | (1,995 | ) | |||||
Other liabilities | (834 | ) | 1,316 | |||||
Net cash provided by operating activities | 119,936 | 127,867 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (26,178 | ) | (32,421 | ) | ||||
Cash used to invest in and acquire businesses | — | (144,625 | ) | |||||
Proceeds from disposal of tangible assets | 367 | 40,488 | ||||||
Net cash used for investing activities | (25,811 | ) | (136,558 | ) | ||||
Cash flows from financing activities: | ||||||||
Borrowings under credit arrangements | 193,732 | 240,000 | ||||||
Payments under borrowing arrangments | (193,732 | ) | (110,000 | ) | ||||
Debt issuance costs | (11,810 | ) | — | |||||
Cash dividends paid | (7,037 | ) | (6,616 | ) | ||||
Tax benefit (deficiency) related to share-based compensation | (1,507 | ) | 1,297 | |||||
Proceeds from exercise of stock options | 23 | 5,957 | ||||||
Payments under share repurchase program | — | (68,336 | ) | |||||
Net cash provided by (used for) financing activities | (20,331 | ) | 62,302 | |||||
Effect of foreign currency exchange rate changes on cash and cash equivalents | 10,585 | 1,864 | ||||||
Increase in cash and cash equivalents | 84,379 | 55,475 | ||||||
Cash and cash equivalents, beginning of period | 227,413 | 159,964 | ||||||
Cash and cash equivalents, end of period | $ | 311,792 | $ | 215,439 | ||||
Free cash flow is defined as net cash provided by operating activities less capital expenditures. Free cash flow was $93,758 ($119,936 — $26,178) and $95,446 ($127,867 — $32,421) for the nine months ended September 27, 2009 and September 28, 2008, respectively.
BELDEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED BALANCE SHEETS
September 27, 2009 | December 31, 2008 | |||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 311,792 | $ | 227,413 | ||||
Receivables, net | 253,318 | 292,236 | ||||||
Inventories, net | 150,476 | 216,022 | ||||||
Deferred income taxes | 25,595 | 22,606 | ||||||
Other current assets | 40,419 | 34,826 | ||||||
Total current assets | 781,600 | 793,103 | ||||||
Property, plant and equipment, less accumulated depreciation | 301,911 | 324,569 | ||||||
Goodwill | 308,620 | 321,478 | ||||||
Intangible assets, less accumulated amortization | 140,764 | 156,025 | ||||||
Deferred income taxes | 3,145 | — | ||||||
Other long-lived assets | 66,139 | 53,388 | ||||||
$ | 1,602,179 | $ | 1,648,563 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 162,625 | $ | 160,744 | ||||
Accrued liabilities | 153,676 | 180,801 | ||||||
Total current liabilities | 316,301 | 341,545 | ||||||
Long-term debt | 590,103 | 590,000 | ||||||
Postretirement benefits | 124,903 | 120,256 | ||||||
Deferred income taxes | — | 4,270 | ||||||
Other long-term liabilities | 20,732 | 21,624 | ||||||
Stockholders’ equity: | ||||||||
Common stock | 503 | 503 | ||||||
Additional paid-in capital | 589,274 | 585,704 | ||||||
Retained earnings | 55,069 | 106,949 | ||||||
Accumulated other comprehensive income | 34,969 | 10,227 | ||||||
Treasury stock | (129,675 | ) | (132,515 | ) | ||||
Total stockholders’ equity | 550,140 | 570,868 | ||||||
$ | 1,602,179 | $ | 1,648,563 | |||||
Inventory turns are calculated by dividing annualized cost of sales for the quarter by the inventory balance at the end of the quarter. Inventory turns for the quarters ended September 27, 2009 and September 28, 2008 were 6.6 and 5.5 turns, respectively.
BELDEN INC.
ADJUSTED OPERATING RESULTS
(Unaudited)
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 items including asset impairment, severance charges, revenue deferrals related to our Wireless segment, gains (losses) on sales of assets, and other costs related to our restructurings. We utilize the adjusted results to review our ongoing operations without the effect of these adjustments 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 | ||||||||||||
Reported | Adjustments | Adjusted | ||||||||||
(In thousands, except percentages and per share amounts) | ||||||||||||
Three Months Ended September 27, 2009 | ||||||||||||
Revenues | $ | 355,159 | $ | 61 | $ | 355,220 | ||||||
Gross profit | $ | 108,073 | $ | 5,385 | $ | 113,458 | ||||||
as a percent of revenues | 30.4 | % | 31.9 | % | ||||||||
Operating income | $ | 18,440 | $ | 8,768 | $ | 27,208 | ||||||
as a percent of revenues | 5.2 | % | 7.7 | % | ||||||||
Net income (loss) | $ | (7,476 | ) | $ | 20,372 | $ | 12,896 | |||||
as a percent of revenues | -2.1 | % | 3.6 | % | ||||||||
Net income (loss) per diluted share | $ | (0.16 | ) | $ | 0.43 | $ | 0.27 | |||||
Three Months Ended September 28, 2008 | ||||||||||||
Revenues | $ | 520,494 | $ | 8,721 | $ | 529,215 | ||||||
Gross profit | $ | 153,652 | $ | 5,754 | $ | 159,406 | ||||||
as a percent of revenues | 29.5 | % | 30.1 | % | ||||||||
Operating income | $ | 47,738 | $ | 8,389 | $ | 56,127 | ||||||
as a percent of revenues | 9.2 | % | 10.6 | % | ||||||||
Net income | $ | 31,534 | $ | 5,292 | $ | 36,826 | ||||||
as a percent of revenues | 6.1 | % | 7.0 | % | ||||||||
Net income per diluted share | $ | 0.67 | $ | 0.11 | $ | 0.78 |
Adjustments for the three months ended September 27, 2009 included pre-tax operating charges for contract termination costs, severance and employee relocation costs, equipment transfer costs, and other costs related to our restructurings of $2.2 million, $1.5 million, $0.7 million, and $4.4 million, respectively.
Adjustments for the three months ended September 28, 2008 included pre-tax operating charges for revenue deferrals, purchase accounting effects for acquisitions, asset impairment, and severance of $6.3 million, $1.2 million, $0.8 million, and $0.1 million, respectively, and pre-tax non-operating charges of $0.2 million.
As | ||||||||||||
Reported | Adjustments | Adjusted | ||||||||||
(In thousands, except percentages and per share amounts) | ||||||||||||
Nine Months Ended September 27, 2009 | ||||||||||||
Revenues | $ | 1,027,492 | $ | 843 | $ | 1,028,335 | ||||||
Gross profit | $ | 300,784 | $ | 28,914 | $ | 329,698 | ||||||
as a percent of revenues | 29.3 | % | 32.1 | % | ||||||||
Operating income (loss) | $ | (14,938 | ) | $ | 87,380 | $ | 72,442 | |||||
as a percent of revenues | -1.5 | % | 7.0 | % | ||||||||
Net income (loss) | $ | (44,816 | ) | $ | 80,810 | $ | 35,994 | |||||
as a percent of revenues | -4.4 | % | 3.5 | % | ||||||||
Net income (loss) per diluted share | $ | (0.96 | ) | $ | 1.73 | $ | 0.77 | |||||
Nine Months Ended September 28, 2008 | ||||||||||||
Revenues | $ | 1,588,623 | $ | 8,721 | $ | 1,597,344 | ||||||
Gross profit | $ | 465,942 | $ | 11,996 | $ | 477,938 | ||||||
as a percent of revenues | 29.3 | % | 29.9 | % | ||||||||
Operating income | $ | 140,194 | $ | 37,353 | $ | 177,547 | ||||||
as a percent of revenues | 8.8 | % | 11.1 | % | ||||||||
Net income | $ | 86,224 | $ | 28,610 | $ | 114,834 | ||||||
as a percent of revenues | 5.4 | % | 7.2 | % | ||||||||
Net income per diluted share | $ | 1.81 | $ | 0.60 | $ | 2.41 |
Adjustments for the nine months ended September 27, 2009 included pre-tax operating charges for severance and employee relocation costs, asset impairment, loss on sale of assets, equipment transfer costs, contract termination costs, and other costs related to our restructurings of $27.5 million, $26.2 million, $17.2 million, $2.9 million, $2.2 million, and $11.4 million, respectively, and pre-tax non-operating charges of $1.5 million.
Adjustments for the nine months ended September 28, 2008 included pre-tax operating charges for severance, asset impairment, revenue deferrals, pension settlements, purchase accounting effects for acquisitions, loss on sale of assets, and other costs related to our restructurings of $13.5 million, $12.3 million, $6.3 million, $1.8 million, $1.2 million, $0.9 million, and $1.4 million, respectively, and pre-tax non-operating charges of $3.1 million.