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 Fourth Quarter and Full Year 2008 Results
Fourth Quarter and Full Year 2008 Highlights
| • | Adjusted net income per diluted share was $0.26 in the quarter and $2.68 for the full year. | ||
| • | Fourth quarter adjusted operating margin was 4.4 percent. Excluding the wireless business acquired in 2008, adjusted operating margin was 6.2 percent. | ||
| • | Free cash flow for the fourth quarter and for the year was $24.9 million and $120.3 million, respectively. | ||
| • | Liquidity of $330.6 million remains strong with $227.4 million in cash and $103.2 million in revolving credit facility borrowing capacity. | ||
| • | Revenue and EPS, adjusted for certain items, for the first quarter of 2009 are expected to be between $330.0 million and $350.0 million and $0.10 and $0.15 per share, respectively. |
St. Louis, Missouri — Thursday, February 5, 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 the fourth quarter and full year ended December 31, 2008.
Fourth Quarter 2008 Results
The Company reported fourth quarter 2008 revenue of $417.3 million with an operating loss of $482.4 million, inclusive of significant goodwill impairment and restructuring charges. Revenue in the fourth quarter of last year was $584.6 million with operating income of $59.3 million. Fourth quarter 2008 net loss was $448.1 million, or a loss of $9.64 per diluted share.
In connection with its required annual goodwill and other asset impairment testing, the Company recorded a non-cash goodwill and other asset impairment charge of $461.1 million or $9.47 per share. The impairment charge results primarily from the significant deterioration of the equity markets that occurred in the fourth quarter. The charge is a non-cash item; will not affect the Company’s cash flows, liquidity position or borrowing capacity under its credit facilities; and is excluded from the Company’s financial results in evaluating financial covenants under its credit agreements.
Belden recorded a charge of $32.7 million or $0.48 per share for severance, fixed asset impairments and loss on sale of assets related to restructuring actions announced during the fourth quarter.
Adjusted operating income in the fourth quarter of 2008 was $18.9 million or 4.4 percent of revenue, compared to 10.9 percent a year ago. Adjusted net income per diluted share was $0.26 in the quarter, compared to $0.83 in the fourth quarter of 2007. See the attached schedule, Adjusted Operating Results, for a reconciliation of GAAP results to adjusted results.
“As we announced on January 15, the continued environment of weakening demand and customer inventory reductions across all of our businesses had a significant impact on our results during the fourth quarter,” said John Stroup, President and Chief Executive Officer of Belden. “Although the economic difficulties we experienced in the fourth quarter are expected to be with us for some time, we believe the restructuring efforts initiated in early December will provide us with the cost structure necessary to succeed under the current market conditions.”
“Our balance sheet and liquidity remains a strength in today’s economy. Cash on hand at year-end was $227.4 million and cash flow from operations in the quarter was $46.0 million and, net of capital expenditures, was $24.9 million.” Stroup continued.
Full-Year Results
Revenue of $2.006 billion in the year ended December 31, 2008, was approximately 1.3 percent lower than 2007 revenue of $2.033 billion. Operating loss in 2008 was $342.2 million, and the net loss was $361.0 million, or a loss of $8.08 per diluted share. This compares to operating income of $220.7 million, and net income of $137.1 million or $2.73 per diluted share in 2007.
Adjusted operating income for fiscal 2008 was $196.5 million, and adjusted net income was $127.1 million, or $2.68 per share. This compares to adjusted operating income of $234.5 million, and adjusted net income of $144.3 million, or $2.87 per share in 2007.
Outlook
The Company expects first quarter revenue and EPS, adjusted for certain items, to be between $330.0 million and $350.0 million and $0.10 and $0.15 per share, respectively.
“As we noted at our investor day, poor visibility makes it difficult for us to provide a forecast for the full year 2009,” said Stroup. “However, we remain focused on our strategic priorities, with a particular emphasis on our Lean culture and organic growth initiatives. Our focus on disciplined cost control and executing our strategy will allow us to exit these challenging times as a clear leader within the signal transmissions industry.”
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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. The current global economic slowdown has adversely affected the Company’s results of operations and may continue to do so. Turbulence in financial markets may increase the Company’s borrowing costs. Some additional 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 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, 2007, filed with the SEC on February 29, 2008. 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 your mission-critical application. 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 | Twelve Months Ended | |||||||||||||||
| December 31, 2008 | December 31, 2007 | December 31, 2008 | December 31, 2007 | |||||||||||||
| (In thousands,except per share data) | ||||||||||||||||
| Revenues | $ | 417,267 | $ | 584,584 | $ | 2,005,890 | $ | 2,032,841 | ||||||||
| Cost of sales | (319,527 | ) | (422,799 | ) | (1,442,208 | ) | (1,471,471 | ) | ||||||||
| Gross profit | 97,740 | 161,785 | 563,682 | 561,370 | ||||||||||||
| Selling, general and administrative expenses | (94,897 | ) | (93,387 | ) | (362,122 | ) | (317,481 | ) | ||||||||
| Research and development | (14,038 | ) | (7,067 | ) | (50,089 | ) | (17,843 | ) | ||||||||
| Amortization of intangibles | (4,154 | ) | (2,069 | ) | (13,440 | ) | (10,604 | ) | ||||||||
| Gain (loss) on sale of assets | (2,843 | ) | — | (3,727 | ) | 8,556 | ||||||||||
| Goodwill and other asset impairment | (464,190 | ) | — | (476,492 | ) | (3,262 | ) | |||||||||
| Operating income (loss) | (482,382 | ) | 59,262 | (342,188 | ) | 220,736 | ||||||||||
| Interest expense | (9,642 | ) | (8,747 | ) | (36,660 | ) | (27,516 | ) | ||||||||
| Interest income | 1,242 | 1,257 | 5,300 | 6,544 | ||||||||||||
| Other income (expense) | 2,359 | 2,663 | 6,326 | 1,799 | ||||||||||||
| Income (loss) before taxes | (488,423 | ) | 54,435 | (367,222 | ) | 201,563 | ||||||||||
| Income tax benefit (expense) | 40,373 | (18,846 | ) | 6,195 | (64,440 | ) | ||||||||||
| Net income (loss) | $ | (448,050 | ) | $ | 35,589 | $ | (361,027 | ) | $ | 137,123 | ||||||
| Weighted average number of common shares and equivalents: | ||||||||||||||||
| Basic | 46,488 | 44,851 | 44,692 | 44,877 | ||||||||||||
| Diluted | 46,488 | 49,868 | 44,692 | 50,615 | ||||||||||||
| Basic income (loss) per share | $ | (9.64 | ) | $ | 0,79 | $ | (8.08 | ) | $ | 3.06 | ||||||
| Diluted income (loss) per share | $ | (9.64 | ) | $ | 0.71 | $ | (8.08 | ) | $ | 2.73 | ||||||
| Dividends declared per share | $ | 0.05 | $ | 0.05 | $ | 0.20 | $ | 0.20 | ||||||||
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 December 31, 2008 | ||||||||||||||||
| Belden Americas | $ | 169,528 | $ | 12,813 | $ | 182,341 | $ | 23,366 | ||||||||
| Specialty Products | 41,951 | 9,132 | 51,083 | (38,006 | ) | |||||||||||
| Wireless | 5,930 | 260 | 6,190 | (45,533 | ) | |||||||||||
| EMEA | 130,437 | 3,059 | 133,496 | (270,170 | ) | |||||||||||
| Asia Pacific | 69,421 | — | 69,421 | (108,616 | ) | |||||||||||
| Total Segments | 417,267 | 25,264 | 442,531 | (438,959 | ) | |||||||||||
| Finance and Administration | — | — | — | (37,842 | ) | |||||||||||
| Eliminations | — | (25,264 | ) | (25,264 | ) | (5,581 | ) | |||||||||
| Total | $ | 417,267 | $ | — | $ | 417,267 | $ | (482,382 | ) | |||||||
Three Months Ended December 31, 2007 | ||||||||||||||||
| Belden Americas | $ | 225,522 | $ | 22,227 | $ | 247,749 | $ | 44,770 | ||||||||
| Specialty Products | 63,377 | 21,455 | 84,832 | 12,303 | ||||||||||||
| EMEA | 190,340 | 5,483 | 195,823 | 14,890 | ||||||||||||
| Asia Pacific | 105,345 | 464 | 105,809 | 11,997 | ||||||||||||
| Total Segments | 584,584 | 49,629 | 634,213 | 83,960 | ||||||||||||
| Finance and Administration | — | — | — | (13,441 | ) | |||||||||||
| Eliminations | — | (49,629 | ) | (49,629 | ) | (11,257 | ) | |||||||||
| Total | $ | 584,584 | $ | — | $ | 584,584 | $ | 59,262 | ||||||||
Twelve Months Ended December 31, 2008 | ||||||||||||||||
| Belden Americas | $ | 758,434 | $ | 69,603 | $ | 828,037 | $ | 141,248 | ||||||||
| Specialty Products | 211,571 | 61,570 | 273,141 | (27,810 | ) | |||||||||||
| Wireless | 13,722 | 298 | 14,020 | (54,317 | ) | |||||||||||
| EMEA | 678,617 | 19,341 | 697,958 | (213,967 | ) | |||||||||||
| Asia Pacific | 343,546 | 111 | 343,657 | (79,562 | ) | |||||||||||
| Total Segments | 2,005,890 | 150,923 | 2,156,813 | (234,408 | ) | |||||||||||
| Finance and Administration | — | — | — | (74,889 | ) | |||||||||||
| Eliminations | — | (150,923 | ) | (150,923 | ) | (32,891 | ) | |||||||||
| Total | $ | 2,005,890 | $ | — | $ | 2,005,890 | $ | (342,188 | ) | |||||||
Twelve Months Ended December 31, 2007 | ||||||||||||||||
| Belden Americas | $ | 865,183 | $ | 69,993 | $ | 935,176 | $ | 166,360 | ||||||||
| Specialty Products | 245,185 | 83,552 | 328,737 | 53,265 | ||||||||||||
| EMEA | 620,455 | 20,495 | 640,950 | 48,272 | ||||||||||||
| Asia Pacific | 302,018 | 464 | 302,482 | 30,593 | ||||||||||||
| Total Segments | 2,032,841 | 174,504 | 2,207,345 | 298,490 | ||||||||||||
| Finance and Administration | — | — | — | (43,313 | ) | |||||||||||
| Eliminations | — | (174,504 | ) | (174,504 | ) | (34,441 | ) | |||||||||
| Total | $ | 2,032,841 | $ | — | $ | 2,032,841 | $ | 220,736 | ||||||||
BELDEN INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
| Twelve Months Ended | ||||||||
| December 31, 2008 | December 31,2007 | |||||||
| (In thousands) | ||||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | (361,027 | ) | $ | 137,123 | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 56,836 | 51,746 | ||||||
| Goodwill and other asset impairment | 476,492 | 3,262 | ||||||
| Deferred income tax expense (benefit) | (37,146 | ) | 24,945 | |||||
| Pension funding in excess of pension expense | (6,917 | ) | (5,883 | ) | ||||
| Share-based compensation | 13,568 | 10,562 | ||||||
| Provision for inventory obsolescence | 12,994 | 4,802 | ||||||
| Loss (gain) on disposal of tangible assets | 3,727 | (8,556 | ) | |||||
| Excess tax benefits related to share-based compensation | (1,279 | ) | (8,533 | ) | ||||
| Changes in operating assets and liabilities, net of the effects of currency exchange rate changes and acquired businesses: | ||||||||
| Receivables | 73,526 | 5,148 | ||||||
| Inventories | 28,188 | 21,428 | ||||||
| Deferred cost of sales | (7,270 | ) | — | |||||
| Accounts payable | (35,666 | ) | 18,935 | |||||
| Accrued liabilities | (14,042 | ) | 9,161 | |||||
| Deferred revenue | 18,266 | — | ||||||
| Accrued taxes | (31,770 | ) | (30,620 | ) | ||||
| Other assets | (1,525 | ) | (12,826 | ) | ||||
| Other liabilities | (13,081 | ) | (15,138 | ) | ||||
| Net cash provided by operating activities | 173,874 | 205,556 | ||||||
| Cash flows from investing activities: | ||||||||
| Cash used to invest in and acquire businesses | (147,384 | ) | (589,816 | ) | ||||
| Proceeds from disposal of tangible assets | 40,898 | 60,182 | ||||||
| Capital expenditures | (53,561 | ) | (63,501 | ) | ||||
| Cash provided by other investing activities | — | 2,911 | ||||||
| Net cash used in investing activities | (160,047 | ) | (590,224 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from exercise of stock options | 6,103 | 32,335 | ||||||
| Excess tax benefits related to share-based compensation | 1,279 | 8,533 | ||||||
| Payments under share repurchase program | (68,336 | ) | (31,664 | ) | ||||
| Cash dividends paid | (8,926 | ) | (9,026 | ) | ||||
| Debt issuance costs | — | (11,070 | ) | |||||
| Borrowings under credit arrangements | 240,000 | 566,000 | ||||||
| Payments under borrowing arrangements | (110,000 | ) | (278,000 | ) | ||||
| Net cash provided by financing activities | 60,120 | 277,108 | ||||||
| Effect of foreign currency exchange rate changes on cash and cash equivalents | (6,498 | ) | 13,373 | |||||
| Increase (decrease) in cash and cash equivalents | 67,449 | (94,187 | ) | |||||
| Cash and cash equivalents, beginning of period | 159,964 | 254,151 | ||||||
| Cash and cash equivalents, end of period | $ | 227,413 | $ | 159,964 | ||||
Free cash flow is defined by the Company as net cash provided by operating activities less capital expenditures. Free cash flow was $120,313 ($173,874 — $53,561) for 2008 and $142,055 ($205,556 — $63,501) for 2007.
BELDEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED BALANCE SHEETS
| December 31, 2008 | December 31, 2007 | |||||||
| (Unaudited) | ||||||||
| (In thousands) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 227,413 | $ | 159,964 | ||||
| Receivables | 292,236 | 373,108 | ||||||
| Inventories, net | 216,022 | 257,540 | ||||||
| Deferred income taxes | 22,606 | 28,578 | ||||||
| Other current assets | 34,826 | 17,392 | ||||||
| Total current assets | 793,103 | 836,582 | ||||||
| Property, plant and equipment, less accumulated depreciation | 324,569 | 369,803 | ||||||
| Goodwill | 321,478 | 648,882 | ||||||
| Intangible assets, less accumulated amortization | 156,025 | 154,786 | ||||||
| Other long-lived assets | 53,388 | 58,796 | ||||||
| $ | 1,648,563 | $ | 2,068,849 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 160,744 | $ | 190,018 | ||||
| Accrued liabilities | 180,801 | 160,029 | ||||||
| Current maturities of long-term debt | — | 110,000 | ||||||
| Total current liabilities | 341,545 | 460,047 | ||||||
| Long-term debt | 590,000 | 350,000 | ||||||
| Postretirement benefits | 120,256 | 98,084 | ||||||
| Deferred income taxes | 4,270 | 78,140 | ||||||
| Other long-term liabilities | 21,624 | 9,915 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock | 503 | 503 | ||||||
| Additional paid-in capital | 583,977 | 638,690 | ||||||
| Retained earnings | 108,676 | 478,776 | ||||||
| Accumulated other comprehensive income | 10,227 | 93,198 | ||||||
| Treasury stock | (132,515 | ) | (138,504 | ) | ||||
| Total stockholders’ equity | 570,868 | 1,072,663 | ||||||
| $ | 1,648,563 | $ | 2,068,849 | |||||
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 goodwill and other asset impairment, certain purchase accounting effects related to acquisitions (inventory cost step-up, amortization of the sales backlog intangible, and in-process research and development charges), revenue deferrals related to Trapeze Networks, severance charges, adjusted depreciation, gains (losses) recognized on the disposal of certain tangible assets, and one-time tax benefits (charges). 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 December 31, 2008 | ||||||||||||
| Revenues | $ | 417,267 | $ | 9,545 | $ | 426,812 | ||||||
| Gross profit | $ | 97,740 | $ | 20,279 | $ | 118,019 | ||||||
as a percent of revenues | 23.4 | % | 27.7 | % | ||||||||
| Operating income (loss) | $ | (482,382 | ) | $ | 501,328 | $ | 18,946 | |||||
as a percent of revenues | -115.6 | % | 4.4 | % | ||||||||
| Net income (loss) | $ | (448,050 | ) | $ | 460,286 | $ | 12,236 | |||||
as a percent of revenues | -107.4 | % | 2.9 | % | ||||||||
| Net income (loss) per diluted share | $ | (9.64 | ) | $ | 9.90 | $ | 0.26 | |||||
Three Months Ended December 31, 2007 | ||||||||||||
| Revenues | $ | 584,584 | $ | — | $ | 584,584 | ||||||
| Gross profit | $ | 161,785 | $ | 6,023 | $ | 167,808 | ||||||
as a percent of revenues | 27.7 | % | 28.7 | % | ||||||||
| Operating income | $ | 59,262 | $ | 4,360 | $ | 63,622 | ||||||
as a percent of revenues | 10.1 | % | 10.9 | % | ||||||||
| Net income | $ | 35,589 | $ | 5,745 | $ | 41,334 | ||||||
as a percent of revenues | 6.1 | % | 7.1 | % | ||||||||
| Net income per diluted share | $ | 0.71 | $ | 0.12 | $ | 0.83 | ||||||
Adjustments for the three months ended December 31, 2008 included pre-tax income impacts for goodwill and other asset impairment, severance, revenue deferrals, loss on sale of assets, and other restructuring items of $464.2 million, $26.5 million, $5.8 million, $2.8 million, and $2.0 million, respectively.
Adjustments for the three months ended December 31, 2007 included pre-tax purchase accounting effects for acquisitions and severance related to the Voluntary Separation Program and other personnel actions of $3.6 million and $1.6 million, respectively, partially offset by pre-tax benefits totaling $0.8 million associated with our previously announced North American restructuring actions including severance charges, income with respect to retirement plan curtailments, and favorable depreciation adjustments.
| As | ||||||||||||
| Reported | Adjustments | Adjusted | ||||||||||
| (In thousands, except percentages and per share amounts) | ||||||||||||
Twelve Months Ended December 31, 2008 | ||||||||||||
| Revenues | $ | 2,005,890 | $ | 18,266 | $ | 2,024,156 | ||||||
| Gross profit | $ | 563,682 | $ | 32,275 | $ | 595,957 | ||||||
as a percent of revenues | 28.1 | % | 29.4 | % | ||||||||
| Operating income (loss) | $ | (342,188 | ) | $ | 538,681 | $ | 196,493 | |||||
as a percent of revenues | -17.1 | % | 9.7 | % | ||||||||
| Net income (loss) | $ | (361,027 | ) | $ | 488,097 | $ | 127,070 | |||||
as a percent of revenues | -18.0 | % | 6.3 | % | ||||||||
| Net income (loss) per diluted share | $ | (8.08 | ) | $ | 10.76 | $ | 2.68 | |||||
Twelve Months Ended December 31, 2007 | ||||||||||||
| Revenues | $ | 2,032,841 | $ | — | $ | 2,032,841 | ||||||
| Gross profit | $ | 561,370 | $ | 16,397 | $ | 577,767 | ||||||
as a percent of revenues | 27.6 | % | 28.4 | % | ||||||||
| Operating income | $ | 220,736 | $ | 13,778 | $ | 234,514 | ||||||
as a percent of revenues | 10.9 | % | 11.5 | % | ||||||||
| Net income | $ | 137,123 | $ | 7,166 | $ | 144,289 | ||||||
as a percent of revenues | 6.7 | % | 7.%1 | |||||||||
| Net income per diluted share | $ | 2.73 | $ | 0.14 | $ | 2.87 | ||||||
Adjustments for the twelve months ended December 31, 2008 included pre-tax income impacts for goodwill and other asset impairment, severance, revenue deferrals, loss on sale of assets, and other restructuring items of $476.5 million, $39.9 million, $12.1 million, $3.7 million, and $6.5 million, respectively.
Adjustments for the twelve months ended December 31, 2007 included pre-tax purchase accounting effects for acquisitions, asset impairment, severance related to the Voluntary Separation Program and other personnel actions, and charges related to our previously announced North American restructuring actions of $15.8 million, $3.3 million, $1.6 million, and $1.4 million, respectively, partially offset by a $8.3 million pre-tax gain on sales of assets.