Belden Announces Fourth Quarter and Full Year 2009 Results
Fourth Quarter and Full Year 2009 Highlights
- Adjusted income from continuing operations per diluted share was $0.39 in the quarter and $1.16 for the full year.
- Fourth quarter adjusted operating margin was 8.5 percent, a 410 basis point improvement over the prior year period.
- Working capital and inventory turns improved 1.5 and 0.7 turns on a sequential basis to 10.9 and 7.3 turns, respectively.
- Free cash flow (cash from operations less capital expenditures) for the fourth quarter and for the full year was $17.7 million and $111.4 million, respectively.
- Revenue and EPS, adjusted for certain items, for the first quarter of 2010 are expected to be between $370 million and $380 million and $0.20 and $0.25 per share, respectively.
ST. LOUIS, Feb. 4 /PRNewswire-FirstCall/ -- Belden (NYSE: BDC), a leader in comprehensive cable, wireless signal, industrial networking and other transmission solutions, today announced results of the fourth quarter and full year ended December 31, 2009.
Fourth Quarter 2009 Results
The Company reported fourth quarter 2009 revenue of $387.8 million with an operating profit of $16.6 million. Net income during the fourth quarter of 2009 was $19.9 million, or $0.42 per diluted share. Revenue in the fourth quarter of 2008 was $417.3 million with an operating loss of $482.4 million and a net loss of $448.1 million, or a loss of $9.64(1) per diluted share.
Adjusted operating income in the fourth quarter of 2009 was $33.0 million or 8.5 percent of revenue, compared to 4.4 percent a year ago. Adjusted income from continuing operations in the fourth quarter was $18.4 million or $0.39 per diluted share, compared to $12.2 million or $0.26 per diluted share in the fourth quarter of 2008. See the attached schedule, Adjusted Operating Results, for a reconciliation of GAAP results to adjusted results.
Full-Year Results
Revenue of $1.4 billion in the year ended December 31, 2009, was approximately 29 percent lower than 2008 revenue of $2.0 billion. Operating income in 2009 was $1.6 million, and the net loss was $24.9 million, or a loss of $0.53 per diluted share. This compares to an operating loss of $342.2 million, and a net loss of $361.8 million or a loss of $8.10 per diluted share in 2008.
Adjusted operating income for fiscal 2009 was $105.5 million, and adjusted income from continuing operations was $54.4 million, or $1.16 per share. This compares to adjusted operating income of $196.5 million and adjusted income from continuing operations of $127.1 million, or $2.68 per share in 2008.
Discussing the results, John Stroup, President and Chief Executive Officer of Belden said, "Although we experienced a historic downturn as a result of the global economic crisis in 2009, our decision to take direct, aggressive restructuring actions early in the year allowed us to significantly improve our cost structure and exit the year a much stronger company. I would like to thank all of our associates for their hard work throughout this process.
"As a result of those efforts we yielded consecutive quarters of double-digit operating margins in our EMEA segment as well as sequential improvement in adjusted operating earnings in our Wireless segment in the second half of the year. Furthermore, cash flows remained very strong with full year free cash flow exceeding $111 million, which generated an ending cash balance of more than $308 million.
"Additionally we are very pleased to have recently announced the hiring of two new members to our senior leadership team, Dhrupad Trivedi and Christoph Gusenleitner, who will lead our Wireless and EMEA segments, respectively. We are fortunate to welcome both Dhrupad and Christoph aboard and believe their combined expertise will be a valuable asset as we continue to grow the Company and improve shareholder value."
Outlook
The Company expects adjusted first quarter revenue and EPS to be between $370 million and $380 million and $0.20 and $0.25 per share, respectively. For the year, the Company expects adjusted revenue and EPS to be between $1.50 billion and $1.55 billion and $1.35 and $1.50, respectively. Both periods exclude the impact of the deferral of revenues and cost of goods sold with respect to its wireless segment, the impact of charges associated with already announced restructuring actions, and discontinued operations.
"Our markets are stable, but the timing and magnitude of the recovery remains uncertain. Therefore, our focus remains on those things within our control, including our Lean Enterprise and Market Delivery System," commented Stroup. "The business is well-positioned to deliver expanded profitability and solid cash flow and to further benefit from the economic recovery whenever it occurs."
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; 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
St. Louis-based Belden is a leader in comprehensive cable, wireless signal, industrial networking and other transmission solutions. It has approximately 6,200 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 throughout North America and Europe 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.
(1) In 2008, 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 resulted primarily from the significant deterioration of the equity markets that occurred in the fourth quarter of 2008.
Contact: |
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Belden Investor Relations |
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314-854-8054 |
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BELDEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------ -------------------
2009 2008 2009 2008
---- ---- ---- ----
(In thousands, except per share data)
Revenues $387,770 $417,267 $1,415,262 $2,005,890
Cost of sales (275,356) (319,527) (1,002,064) (1,442,208)
-------- -------- ---------- ----------
Gross profit 112,414 97,740 413,198 563,682
Selling, general and
administrative expenses (73,907) (94,897) (289,672) (362,122)
Research and development (16,032) (14,038) (60,870) (50,089)
Amortization of intangibles (4,321) (4,154) (16,080) (13,440)
Loss on sale of assets - (2,843) (17,184) (3,727)
Goodwill and other asset
impairment (1,575) (464,190) (27,751) (476,492)
------ -------- ------- --------
Operating income (loss) 16,579 (482,382) 1,641 (342,188)
Interest expense (13,064) (9,642) (41,857) (37,908)
Interest income 245 1,242 1,046 5,300
Other income 1,894 2,359 4,756 6,326
----- ----- ----- -----
Income (loss) From
continuing operations
before taxes 5,654 (488,423) (34,414) (368,470)
Income tax benefit 15,657 40,373 10,909 6,644
------ ------ ------ -----
Income (loss) From
continuing operations 21,311 (448,050) (23,505) (361,826)
Loss from discontinued
operations, net of tax (1,396) - (1,396) -
------ --- ------ ---
Net income (loss) $19,915 $(448,050) $(24,901) $(361,826)
======= ========= ======== =========
Weighted average number of
common shares and equivalents:
Basic 46,650 46,488 46,594 44,692
Diluted 47,315 46,488 46,594 44,692
Basic income (loss) per share:
Continuing operations $0.46 $(9.64) $(0.50) $(8.10)
Discontinued operations (0.03) - (0.03) -
----- --- ----- ---
Net income (loss) $0.43 $(9.64) $(0.53) $(8.10)
===== ====== ====== ======
Diluted income (loss) per
share:
Continuing operations $0.45 $(9.64) $(0.50) $(8.10)
Discontinued operations (0.03) - (0.03) -
----- --- ----- ---
Net income (loss) $0.42 $(9.64) $(0.53) $(8.10)
===== ====== ====== ======
Dividends declared per share $0.05 $0.05 $0.20 $0.20
BELDEN INC.
OPERATING SEGMENT INFORMATION
(Unaudited)
Three Months Ended External Operating
December 31, 2009 Customer Affiliate Total Income
------------------ Revenues Revenues Revenues (Loss)
-------- -------- -------- ------
(In thousands)
Americas $205,490 $11,616 $217,106 $27,992
Wireless 13,100 - 13,100 (5,381)
EMEA 89,886 16,575 106,461 7,797
Asia Pacific 79,294 - 79,294 10,498
------ --- ------ ------
Total Segments 387,770 28,191 415,961 40,906
Corporate expenses - - - (13,570)
Eliminations - (28,191) (28,191) (10,757)
--- ------- ------- -------
Total $387,770 $- $387,770 $16,579
======== === ======== =======
Three Months Ended
December 31, 2008
------------------
Americas $228,840 $10,499 $239,339 $(14,735)
Wireless 5,930 260 6,190 (45,533)
EMEA 104,965 20,156 125,121 (271,285)
Asia Pacific 77,532 - 77,532 (104,910)
------ --- ------ --------
Total Segments 417,267 30,915 448,182 (436,463)
Corporate expenses - - - (37,842)
Eliminations - (30,915) (30,915) (8,077)
--- ------- ------- ------
Total $417,267 $- $417,267 $(482,382)
======== === ======== =========
Twelve Months Ended
December 31, 2009
-------------------
Americas $766,569 $43,489 $810,058 $117,324
Wireless 53,247 - 53,247 (28,325)
EMEA 345,196 55,256 400,452 (43,232)
Asia Pacific 250,250 - 250,250 28,794
------- --- ------- ------
Total Segments 1,415,262 98,745 1,514,007 74,561
Corporate expenses - - - (41,378)
Eliminations - (98,745) (98,745) (31,542)
--- ------- ------- -------
Total $1,415,262 $- $1,415,262 $1,641
========== === ========== ======
Twelve Months Ended
December 31, 2008
-------------------
Americas $1,041,247 $61,568 $1,102,815 $106,893
Wireless 13,722 298 14,020 (54,317)
EMEA 577,672 85,639 663,311 (218,382)
Asia Pacific 373,249 111 373,360 (66,093)
------- --- ------- -------
Total Segments 2,005,890 147,616 2,153,506 (231,899)
Corporate expenses - - - (74,889)
Eliminations - (147,616) (147,616) (35,400)
--- -------- -------- -------
Total $2,005,890 $- $2,005,890 $(342,188)
========== === ========== =========
BELDEN INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
Twelve Months Ended
December 31, 2009 December 31, 2008
----------------- -----------------
(In thousands)
Cash flows from operating activities:
Net loss $(24,901) $(361,826)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization 55,857 56,836
Goodwill and other asset impairment 27,751 476,492
Loss on disposal of tangible assets 17,184 3,727
Share-based compensation 11,748 13,568
Provision for inventory obsolescence 4,550 12,994
Tax deficiency (benefit) related to
share-based compensation 1,564 (1,279)
Amortization of discount on
long-term debt 210 1,256
Deferred income tax benefit (23,421) (37,803)
Pension funding in excess of
pension expense (8,973) (6,917)
Changes in operating assets and
liabilities, net of the effects of
currency exchange rate changes
and acquired businesses:
Receivables 52,369 73,526
Inventories 50,645 28,188
Deferred cost of sales (1,036) (7,270)
Accounts payable 9,728 (35,666)
Accrued liabilities (33,483) (14,042)
Deferred revenue 2,564 18,266
Accrued taxes 7,597 (31,562)
Other assets 5,260 (1,533)
Other liabilities (3,403) (13,081)
------ -------
Net cash provided by
operating activities 151,810 173,874
Cash flows from investing activities:
Capital expenditures (40,377) (53,561)
Cash used to invest in and acquire
businesses (20,703) (147,384)
Proceeds from disposal of tangible
assets 2,031 40,898
----- ------
Net cash used for investing
activities (59,049) (160,047)
Cash flows from financing activities:
Borrowings under credit arrangements 193,732 240,000
Payments under borrowing arrangements (193,732) (110,000)
Debt issuance costs (11,810) -
Cash dividends paid (9,373) (8,926)
Tax benefit (deficiency) related to
share-based compensation (1,564) 1,279
Proceeds from exercise of stock options 699 6,103
Payments under share repurchase program - (68,336)
--- -------
Net cash provided by
(used for) financing
activities (22,048) 60,120
Effect of foreign currency exchange rate
changes on cash and cash equivalents 10,753 (6,498)
------ ------
Increase in cash and cash equivalents 81,466 67,449
Cash and cash equivalents, beginning
of period 227,413 159,964
------- -------
Cash and cash equivalents, end of period $308,879 $227,413
======== ========
Free cash flow is defined as net cash provided by operating activities
less capital expenditures. Free cash flow was $111,433 ($151,810 -
$40,377) for 2009 and $120,313 ($173,874 -$53,561) for 2008.
BELDEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2009 December 31, 2008
----------------- -----------------
(Unaudited)
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $308,879 $227,413
Receivables, net 242,145 292,236
Inventories, net 151,262 216,022
Deferred income taxes 26,996 22,606
Other current assets 35,036 34,826
------ ------
Total current assets 764,318 793,103
Property, plant and equipment,
less accumulated depreciation 299,586 324,569
Goodwill 313,030 321,478
Intangible assets, less accumulated
amortization 143,013 156,025
Deferred income taxes 37,205 9,830
Other long-lived assets 63,426 53,388
------ ------
$1,620,578 $1,658,393
========== ==========
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $169,763 $160,744
Accrued liabilities 141,922 180,801
------- -------
Total current liabilities 311,685 341,545
Long-term debt 590,210 590,000
Postretirement benefits 121,745 120,256
Other long-term liabilities 45,890 35,724
Stockholders’ equity:
Common stock 503 503
Additional paid-in capital 591,917 585,704
Retained earnings 72,625 106,949
Accumulated other Comprehensive
income 14,614 10,227
Treasury stock (128,611) (132,515)
-------- --------
Total stockholders’ equity 551,048 570,868
------- -------
$1,620,578 $1,658,393
========== ==========
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 December 31, 2009 and December 31, 2008 were
7.3 and 5.9 turns, respectively. Working capital is defined as receivables
plus inventories less accounts payable and accrued liabilities (excluding
current deferred revenue). Working capital turns are calculated by
dividing annualized cost of sales for the quarter by the working capital
balance at the end of the quarter. Working capital turns for the quarters
ended December 31, 2009 and December 31, 2008 were 10.9 and 6.9 turns,
respectively.
BELDEN INC.
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 goodwill and other asset
impairment, purchase accounting effects related to acquisitions (inventory
cost step-up, amortization of sales backlog intangibles, and in-process
research and development charges), revenue deferrals related to our
Wireless segment, severance charges, adjusted depreciation, gains (losses)
recognized on the disposal of tangible assets, and other restructuring
costs. 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
Three Months Ended December 31, 2009 Reported Adjustments Adjusted
------------------------------------ -------- ----------- --------
(In thousands, except percentages
and per share amounts)
Revenues $387,770 $1,721 $389,491
Gross profit $112,414 $11,457 $123,871
as a percent of revenues 29.0% 31.8%
Operating income $16,579 $16,445 $33,024
as a percent of revenues 4.3% 8.5%
Income (loss) from continuing operations $21,311 $(2,878) $18,433
as a percent of revenues 5.5% 4.7%
Income (loss) from continuing operations
per diluted share $0.45 $(0.06) $0.39
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%
Income (loss) from continuing
operations $(448,050) $460,286 $12,236
as a percent of revenues -107.4% 2.9%
Income (loss) from continuing operations
per diluted share $(9.64) $9.90 $0.26
Adjustments for the three months ended December 31, 2009 included pre-tax
operating charges for severance and employee relocation costs, accelerated
depreciation, asset impairment, contract termination costs, revenue
deferrals, and other restructuring costs of $3.2 million, $1.7 million,
$1.6 million, $1.6 million, $1.2 million, and $7.1 million, respectively.
Adjustments for the three months ended December 31, 2008 included pre-tax
operating charges for goodwill and other asset impairment, severance,
revenue deferrals, loss on sale of assets, and other restructuring costs
of $464.2 million, $26.5 million, $5.8 million, $2.8 million, and $2.0
million, respectively.
As
Twelve Months Ended December 31, 2009 Reported Adjustments Adjusted
------------------------------------- -------- ----------- --------
(In thousands, except percentages
and per share amounts)
Revenues $1,415,262 $2,564 $1,417,826
Gross profit $413,198 $40,371 $453,569
as a percent of revenues 29.2% 32.0%
Operating income $1,641 $103,825 $105,466
as a percent of revenues 0.1% 7.4%
Income (loss) from continuing operations $(23,505) $77,932 $54,427
as a percent of revenues -1.7% 3.8%
Income (loss) from continuing operations
per diluted share $(0.50) $1.66 $1.16
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%
Income (loss) from continuing operations $(361,826) $488,896 $127,070
as a percent of revenues -18.0% 6.3%
Income (loss) from continuing operations
per diluted share $(8.10) $10.78 $2.68
Adjustments for the twelve months ended December 31, 2009 included pre-tax
operating charges for severance and employee relocations costs, asset
impairment, loss on sale of assets, contract termination costs,
accelerated depreciation, revenue deferrals, and other restructuring costs
of $30.7 million, $27.8 million, $17.2 million, $3.8 million, $2.6
million, $1.5 million, and $20.2 million, respectively.
Adjustments for the twelve months ended December 31, 2008 included pre-tax
operating charges 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.
SOURCE Belden
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