Belden Reports Strong Third Quarter 2010 Results

Company delivers EPS of $0.43 per diluted share, compared to $(0.16) in year-ago period; Non-GAAP income from continuing operations per diluted share increases 59% year-over-year

Third Quarter Highlights:

- Improved non-GAAP income from continuing operations per diluted share to $0.43, up 59% over last year’s $0.27 per diluted share;

- Increased revenue 16% year-over-year to $411.5 million, from $355.2 million in the third quarter 2009;

- Grew non-GAAP operating margins 120 basis points year-over-year to 9.5%, from 8.3% in the third quarter 2009;

- Generated positive free cash flow during the quarter totaling $43.4 million, or 211% of non-GAAP income from continuing operations for the quarter, increasing the balance of cash and cash equivalents to $296.1 million at quarter-end, and

- Raised guidance for full year 2010 non-GAAP income from continuing operations per diluted share to $1.65 - $1.68, up from prior guidance of $1.55 - $1.65.

Oct 28, 2010, 07:30 ET from Belden Inc.

ST. LOUIS, Oct. 28 /PRNewswire-FirstCall/ -- Belden Inc. (NYSE: BDC), a global leader in signal transmission solutions for mission critical applications, today reported results for the fiscal third quarter ended October 3, 2010.

Third Quarter 2010

Revenue for the quarter totaled $411.5 million, up $56.3 million or 16% compared to $355.2 million in the third quarter 2009.  Income from continuing operations per diluted share totaled $0.43, compared to $(0.16) per diluted share in the third quarter 2009.

Non-GAAP revenue totaled $408.0 million, up $52.8 million or 15% compared to non-GAAP revenue of $355.2 million in the third quarter 2009.  Non-GAAP operating income totaled $38.8 million or 9.5% of revenue, compared to $29.6 million or 8.3% of revenue in the third quarter 2009.  Non-GAAP income from continuing operations per diluted share totaled $0.43, compared to $0.27 in the third quarter 2009.

John Stroup, President and CEO of Belden Inc., said: “We are pleased to report another strong quarter of financial and operating performance.  Our results clearly demonstrate the combined benefits of an advantaged global product portfolio and improved execution of our Market Delivery System and Lean Enterprise initiatives.”

Outlook

“Given our strong third quarter results and the usual seasonal growth we expect in the fourth quarter, we are increasing our earnings outlook for the remainder of the year,” Mr. Stroup said.

The Company expects fourth quarter non-GAAP revenues to be $420 million to $425 million and non-GAAP income from continuing operations per diluted share to be $0.43 to $0.46.  For the full year ending December 31, non-GAAP revenues are expected to be $1,643 million to $1,648 million and non-GAAP income from continuing operations per diluted share is expected to be $1.65 to $1.68.

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.

Non-GAAP revenues and income exclude the impact of the deferral of revenues and cost of sales associated with the Company’s wireless segment, the impact of charges associated with already announced restructuring actions, and other costs.  

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. 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 networking industries, including wireless; 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 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; variability associated with derivative and hedging instruments; 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, 2009, filed with the SEC on February 26, 2010. 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 Inc. designs, manufactures, and markets cable, connectivity, and networking products in markets including industrial automation, enterprise, transportation, infrastructure, and consumer electronics. It has approximately 6,500 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, 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

Nine Months Ended

October 3, 2010

September 27, 2009

October 3, 2010

September 27, 2009

(In thousands, except per share data)

Revenues

$           411,472

$                   355,159

$        1,237,961

$                1,027,492

Cost of sales

(285,777)

(247,086)

(868,061)

(726,708)

     Gross profit

125,695

108,073

369,900

300,784

Selling, general and administrative expenses

(71,392)

(71,489)

(219,775)

(215,765)

Research and development

(14,794)

(14,161)

(42,991)

(44,838)

Amortization of intangibles

(4,152)

(3,983)

(12,558)

(11,759)

Income from equity method investment

3,053

2,418

8,905

4,403

Asset impairment

-

-

-

(26,176)

Loss on sale of assets

-

-

-

(17,184)

     Operating income (loss)

38,410

20,858

103,481

(10,535)

Interest expense

(11,779)

(12,575)

(38,912)

(28,793)

Interest income

127

199

446

801

Other income (expense)

-

-

1,465

(1,541)

     Income (loss) from continuing operations before taxes

26,758

8,482

66,480

(40,068)

Income tax expense

(6,002)

(15,958)

(14,014)

(4,748)

     Income (loss) from continuing operations

20,756

(7,476)

52,466

(44,816)

Loss from discontinued operations, net of tax

(151)

-

(442)

-

     Net income (loss)

$             20,605

$                      (7,476)

$             52,024

$                    (44,816)

Weighted average number of common

   shares and equivalents:

   Basic

46,813

46,607

46,762

46,574

   Diluted

47,721

46,607

47,665

46,574

Basic income (loss) per share

   Continuing operations

$                 0.44

$                        (0.16)

$                 1.12

$                        (0.96)

   Discontinued operations

-

-

(0.01)

-

   Net income (loss)

$                 0.44

$                        (0.16)

$                 1.11

$                        (0.96)

Diluted income (loss) per share

   Continuing operations

$                 0.43

$                        (0.16)

$                 1.10

$                        (0.96)

   Discontinued operations

-

-

(0.01)

-

   Net income (loss)

$                 0.43

$                        (0.16)

$                 1.09

$                        (0.96)

Dividends declared per share

$                 0.05

$                         0.05

$                 0.15

$                         0.15

BELDEN INC.

OPERATING SEGMENT INFORMATION

(Unaudited)

External

Operating

Customer

Affiliate

Total

Income

Three Months Ended October 3, 2010

Revenues

Revenues

Revenues

(Loss)

(In thousands)

Americas

$    232,133

$     11,735

$    243,868

$     37,708

EMEA

90,397

20,707

111,104

18,346

Asia Pacific

74,397

-

74,397

10,693

Wireless

14,545

-

14,545

(2,727)

   Total Segments

411,472

32,442

443,914

64,020

Corporate expenses

-

-

-

(13,245)

Eliminations

-

(32,442)

(32,442)

(12,365)

   Total

$    411,472

$              -

$    411,472

$     38,410

Three Months Ended September 27, 2009

Americas

$    192,135

$     12,994

$    205,129

$     31,153

EMEA

81,012

13,099

94,111

8,014

Asia Pacific

67,102

-

67,102

6,700

Wireless

14,910

-

14,910

(6,644)

   Total Segments

355,159

26,093

381,252

39,223

Corporate expenses

-

-

-

(10,141)

Eliminations

-

(26,093)

(26,093)

(8,224)

   Total

$    355,159

$              -

$    355,159

$     20,858

Nine Months Ended October 3, 2010

Americas

$    686,985

$     36,605

$    723,590

$   103,224

EMEA

273,140

53,330

326,470

52,240

Asia Pacific

231,789

62

231,851

28,146

Wireless

46,047

-

46,047

(8,561)

   Total Segments

1,237,961

89,997

1,327,958

175,049

Corporate expenses

-

-

-

(39,421)

Eliminations

-

(89,997)

(89,997)

(32,147)

   Total

$ 1,237,961

$              -

$ 1,237,961

$   103,481

Nine Months Ended September 27, 2009

Americas

$    561,079

$     31,873

$    592,952

$     89,332

EMEA

255,310

38,681

293,991

(46,626)

Asia Pacific

170,956

-

170,956

18,296

Wireless

40,147

-

40,147

(22,944)

   Total Segments

1,027,492

70,554

1,098,046

38,058

Corporate expenses

-

-

-

(27,808)

Eliminations

-

(70,554)

(70,554)

(20,785)

   Total

$ 1,027,492

$              -

$ 1,027,492

$   (10,535)

BELDEN INC.

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS

(Unaudited)

Nine Months Ended  

October 3, 2010

September 27, 2009

(In thousands)

Cash flows from operating activities:

   Net income (loss)

$             52,024

$                    (44,816)

   Adjustments to reconcile net income (loss) to net cash provided by operating activities:

       Depreciation and amortization

41,525

40,630

       Share-based compensation

9,539

8,373

       Provision for inventory obsolescence

2,924

4,912

       Non-cash loss on derivatives and hedging instruments

2,893

-

       Tax deficiency related to share-based compensation

239

1,507

       Amortization of discount on long-term debt

195

103

       Asset impairment

-

26,176

       Loss on sale of assets

-

17,184

       Pension funding in excess of pension expense

(5,753)

(7,000)

       Income from equity method investment

(8,905)

(4,403)

       Changes in operating assets and liabilities, net of the effects of currency

         exchange rate changes and acquired businesses:

           Receivables

(51,874)

40,784

           Inventories

(20,898)

49,631

           Deferred cost of sales

6,479

(514)

           Accounts payable

34,288

2,517

           Accrued liabilities

10,252

(23,543)

           Deferred revenue

(14,771)

843

           Accrued taxes

(1,295)

1,996

           Other assets

9,755

6,390

           Other liabilities

(11,206)

(834)

               Net cash provided by operating activities

55,411

119,936

Cash flows from investing activities:

   Capital expenditures

(19,198)

(26,178)

   Proceeds from disposal of tangible assets

2,332

367

   Cash provided by other investing activities

163

-

               Net cash used for investing activities

(16,703)

(25,811)

Cash flows from financing activities:

   Borrowings under credit arrangements

-

193,732

   Payments under borrowing arrangements

(46,268)

(193,732)

   Debt issuance costs

-

(11,810)

   Cash dividends paid

(7,052)

(7,037)

   Tax deficiency related to share-based compensation

(239)

(1,507)

   Proceeds from exercise of stock options

720

23

   Cash received upon termination of derivative instruments

4,217

-

               Net cash used for financing activities

(48,622)

(20,331)

Effect of foreign currency exchange rate changes on cash and cash equivalents

(2,884)

10,585

Increase (decrease) in cash and cash equivalents

(12,798)

84,379

Cash and cash equivalents, beginning of period

308,879

227,413

Cash and cash equivalents, end of period

$           296,081

$                   311,792

BELDEN INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

October 3, 2010

December 31, 2009

(Unaudited)

(In thousands)

ASSETS

Current assets:

Cash and cash equivalents

$           296,081

$                  308,879

Receivables, net

291,132

242,145

Inventories, net

167,483

151,262

Deferred income taxes

26,854

26,996

Other current assets

18,077

35,036

Total current assets

799,627

764,318

Property, plant and equipment, less accumulated depreciation

282,517

299,586

Goodwill

308,864

313,030

Intangible assets, less accumulated amortization

128,014

143,013

Deferred income taxes

36,376

37,205

Other long-lived assets

70,261

63,426

$        1,625,659

$               1,620,578

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$           203,835

$                  169,763

Accrued liabilities

140,602

141,922

Current maturities of long-term debt

-

46,268

Total current liabilities

344,437

357,953

Long-term debt

551,247

543,942

Postretirement benefits

115,642

121,745

Other long-term liabilities

31,050

45,890

Stockholders’ equity:

Common stock

503

503

Additional paid-in capital

597,777

591,917

Retained earnings

117,508

72,625

Accumulated other comprehensive income (loss)

(7,258)

14,614

Treasury stock

(125,247)

(128,611)

Total stockholders’ equity

583,283

551,048

$        1,625,659

$               1,620,578

BELDEN INC.

RECONCILIATION OF NON-GAAP MEASURES

(Unaudited)

In addition to reporting financial results in accordance with accounting principles generally accepted in the United States, we provide non-GAAP operating results adjusted for certain items including goodwill and other asset impairment, purchase accounting effects related to acquisitions, revenue and cost of sales deferrals related to our Wireless segment, severance charges, accelerated depreciation, gains (losses) recognized on the disposal of tangible assets, and other costs. We utilize the non-GAAP results to review our ongoing operations without the effect of these adjustments and for comparison to budgeted operating results. We believe the non-GAAP results are useful to investors because they help them compare our results to previous periods and provide insights into underlying trends in the business. Non-GAAP results should be considered only in conjunction with results reported according to accounting principles generally accepted in the United States.

Three Months Ended

Nine Months Ended

October 3, 2010

September 27, 2009

October 3, 2010

September 27, 2009

(In thousands, except percentages

and per share amounts)

GAAP revenues

$           411,472

$                   355,159

$        1,237,961

$                1,027,492

  Deferred revenue adjustments

(3,509)

61

(14,771)

843

Non-GAAP revenues

$           407,963

$                   355,220

$        1,223,190

$                1,028,335

GAAP operating income (loss)

$             38,410

$                     20,858

$           103,481

$                    (10,535)

  Severance and other restructuring related costs

1,663

8,100

9,531

42,013

  Purchase accounting effects related to acquisitions

635

-

2,258

-

  Accelerated depreciation

-

369

2,216

891

  Asset impairment

-

-

-

26,176

  Loss on sale of assets

-

-

-

17,184

  Other

-

787

-

787

  Deferred gross profit adjustments

(1,927)

(488)

(8,292)

329

     Total operating income adjustments

371

8,768

5,713

87,380

Non-GAAP operating income

$             38,781

$                     29,626

$           109,194

$                     76,845

  Non-GAAP operating income as a percent of non-GAAP revenues

9.5%

8.3%

8.9%

7.5%

GAAP income (loss) from continuing operations

$             20,756

$                      (7,476)

$             52,466

$                    (44,816)

  Operating income adjustments

371

8,768

5,713

87,380

  Fees incurred to amend credit facility

-

-

-

1,541

  Derivative accounting

-

-

2,749

-

  Tax effect of adjustments

(519)

11,604

(2,706)

(8,111)

Non-GAAP income from continuing operations

$             20,608

$                     12,896

$             58,222

$                     35,994

GAAP income (loss) from continuing operations per diluted share

$                 0.43

$                        (0.16)

$                 1.10

$                        (0.96)

Non-GAAP income from continuing operations per diluted share

$                 0.43

$                         0.27

$                 1.22

$                         0.77

GAAP diluted weighted average shares

47,721

46,607

47,665

46,574

  Adjustment for anti-dilutive shares that are dilutive under non-GAAP measures

-

401

-

315

Non-GAAP diluted weighted average shares

47,721

47,008

47,665

46,889

GAAP net cash provided by operating activities

$             49,898

$                     50,602

$             55,411

$                   119,936

 Capital expenditures

(6,493)

(7,836)

(19,198)

(26,178)

Non-GAAP free cash flow

$             43,405

$                     42,766

$             36,213

$                     93,758

SOURCE Belden Inc.



RELATED LINKS

http://www.belden.com