-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D55DXctQmoHIGobVANnAz7FvpHezRH44xpWhk8kzLp9hrj+o4mF86kIejbq3rThz A/KIvPcRlLE4gt9uGT9OOQ== 0000950137-05-013452.txt : 20051108 0000950137-05-013452.hdr.sgml : 20051108 20051108092855 ACCESSION NUMBER: 0000950137-05-013452 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051108 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051108 DATE AS OF CHANGE: 20051108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BELDEN CDT INC. CENTRAL INDEX KEY: 0000913142 STANDARD INDUSTRIAL CLASSIFICATION: DRAWING AND INSULATING NONFERROUS WIRE [3357] IRS NUMBER: 363601505 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12561 FILM NUMBER: 051184895 BUSINESS ADDRESS: STREET 1: BELDEN CDT INC. STREET 2: 7701 FORSYTH BOULEVARD, SUITE 800 CITY: ST. LOUIS STATE: MO ZIP: 63105 BUSINESS PHONE: 314-854-8000 MAIL ADDRESS: STREET 1: BELDEN CDT INC. STREET 2: 7701 FORSYTH BOULEVARD, SUITE 800 CITY: ST. LOUIS STATE: MO ZIP: 63105 FORMER COMPANY: FORMER CONFORMED NAME: CABLE DESIGN TECHNOLOGIES CORP DATE OF NAME CHANGE: 19931006 8-K 1 c99852e8vk.txt CURRENT REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ---------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): November 8, 2005 Belden CDT Inc. (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER) Delaware 001-12561 36-3601505 (State or other jurisdiction of (Commission File Number) (IRS Employer incorporation) Identification No.)
7701 Forsyth Boulevard, Suite 800 St. Louis, Missouri 63105 (Address of Principal Executive Offices, including Zip Code) (314) 854-8000 (Registrant's telephone number, including area code) n/a (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if this Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) TABLE OF CONTENTS Item 2.02 Results of Operations and Financial Condition Item 9.01 Financial Statements and Exhibits SIGNATURES
EXHIBIT INDEX Exhibit 99.1 News Release dated November 8, 2005 2 ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. Earnings Release. On November 8, 2005, the Company issued the press release attached as Exhibit 99.1, which reports Belden's results of operation for the third quarter of 2005. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. 99.1 Company news release dated November 8, 2005, titled "Belden CDT Reports Strong Third Quarter Operating Performance." SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BELDEN CDT INC. Date: November 8, 2005 By: /s/ Kevin L. Bloomfield ------------------------------------ 3 EX-99.1 2 c99852exv99w1.txt NEWS RELEASE EXHIBIT 99.1 (BELDEN CDT LOGO) NEWS RELEASE Belden CDT Inc. 7701 Forsyth Boulevard, Suite 800 St. Louis, Missouri 63105 314-854-8000 www.beldencdt.com FOR IMMEDIATE RELEASE November 8, 2005 BELDEN CDT REPORTS STRONG THIRD QUARTER OPERATING PERFORMANCE SALES OF $342 MILLION REFLECT 11.8% ORGANIC GROWTH OPERATING PROFIT REACHES 8.9% OF SALES EXCLUDING SPECIAL ITEMS DILUTED EPS OF $0.37 EXCLUDING SPECIAL ITEMS St. Louis - Belden CDT Inc. (NYSE:BDC) announced today that revenue from continuing operations for the quarter ended September 30, 2005 was $342.4 million, compared with revenue of $281.5 million reported in the third quarter of 2004. Compared with year-ago revenue adjusted as if the merger of Belden and CDT had happened on July 1, 2004 instead of July 15, 2004, revenue increased 12.7% year over year. Income from continuing operations was $6.1 million in the third quarter of 2005 or $0.13 per diluted share, including charges (previously announced) for asset impairment, severance, and merger-related items and a one-time tax benefit. Excluding the charges and the one-time tax benefit, income from continuing operations was $18.4 million and diluted earnings per share were $0.37 for the third quarter. HIGHLIGHTS OF THE QUARTER - Revenue increased 11.8 percent organically year-over-year (compared with pro-forma 2004 third-quarter revenue), reflecting increases in both volume and price in the North American market, with the strongest volume improvement in the North American networking operations. Revenue increased an additional 0.9 percent because of currency exchange rates. - Operating profit from continuing operations, excluding the special charges, was $30.3 million, or 8.9 percent of sales, an increase of $6.3 million year over year and an increase of $5.0 million sequentially. This improvement is the result primarily of the Company's cost reduction work over the past four quarters, which included the closing of three manufacturing plants at mid-year. - On September 29 the Company announced restructuring plans for its European operations. The Company expects that these actions will result in a 10 percent reduction in European manufacturing floor space and overhead between now and the end of 2006. - The Company continued its share repurchase program. On May 23, the Board of Directors authorized a share repurchase program of up to $125 million. Between the authorization date and September 30, 2005, the Company repurchased 2.5 million shares of common stock (approximately 5% of the shares previously outstanding) at an aggregate cost of $51.7 million. MANAGEMENT COMMENT "We were pleased to see the revenue increase coming from volume to a much greater extent than from pricing," said Richard K. Reece, Vice President Finance and Chief Financial Officer. "The Networking segment in North America in particular had a very good sales quarter, which we believe indicates that this group is recovering its market share that dipped late last year and early this year as we launched our new brand. The recent consolidation of capacity is yielding improved manufacturing productivity, and the North American operations of our Electronics segment are enjoying operating margins in the mid-teens. We can clearly see in the operating results the benefit of the cost reduction work that the Company has been pursuing for the last several quarters. With the restructuring actions announced September 29, the Company is taking additional steps to enhance the profitability of its European operations, which should significantly help our consolidated results over the next year and beyond." John Stroup, who joined Belden CDT Inc. as President and Chief Executive Officer on October 31, 2005, said, "Belden CDT is a company with many strengths: its people, brands, outstanding products, channel relationships, profitability, excellent cash generation, a sound financial foundation, and good governance. I am delighted at the opportunity to join and lead this team." BACKGROUND - MERGER OF BELDEN AND CDT IN 2004 On July 15, 2004, the Company, formerly called Cable Design Technologies Corporation (CDT), merged with Belden Inc. (Belden) and changed its name to Belden CDT Inc. For accounting purposes, the Company treated the merger as an acquisition by Belden. Results of the legacy CDT operations are included in 2004 results from July 16 onwards. Prior-year results in this release (other than pro forma results) reflect the results of Belden only. ADJUSTED RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005
Adjusted Pro As Reported Adjusted Three Forma Three Three Months Months Ended Months Ended Ended September September 30, September 30, 30, 2005 Adjustments (1) 2005 2004 (2) --------------- --------------- -------------- ------------- Results of Continuing Operations Revenues $342,389 $ -- $342,389 $303,779 Operating Profit 14,774 15,530 30,304 24,024 Percent of revenue 4.3% 8.9% 7.9% Income from Continuing Operations 6,078 12,330 18,408 10,994 Income from Continuing Operations per diluted share $ 0.13 $ 0.37 $ 0.22
(1) Impairment charges, severance charges, merger-related costs, expenses for executive succession, and one-time tax benefit. (2) Pro forma results, as if Belden and CDT were combined at the beginning of the third quarter of 2004, restated for discontinued operations, the change in inventory accounting method from LIFO to FIFO, merger-related costs, and the gain on the 2004 sale of a Belden European operation. 2 YEAR-TO-DATE RESULTS For the nine months ended September 30, 2005, revenue was $989.2 million. Operating earnings for the period were $49.7 million, and income from continuing operations was $25.1 million, or $0.51 per diluted share including the dilutive effect of the Company's convertible debentures. These results included $24.1million in impairment charges and pretax expenses related to merger integration and executive succession, which together amounted to $0.34 per diluted share. ADJUSTED RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005
Adjusted Pro As Reported Adjusted Nine Forma Nine Nine Months Months Ended Months Ended Ended September September 30, September 30, 30, 2005 Adjustments (1) 2005 2004 (2) --------------- --------------- -------------- ------------- Results of Continuing Operations Revenues $989,201 $ -- $989,201 $910,919 Operating Profit 49,709 24,097 73,806 52,603 Percent of revenue 5.0% 7.5% 5.8% Income from Continuing Operations 25,148 18,130 43,278 23,980 Income from Continuing Operations per diluted share $ 0.51 $ 0.85 $ .50
(1) Impairment charges, expenses for executive succession, merger-related costs, severance charges and one-time tax benefit. (2) Pro forma results, as if Belden and CDT were combined at the beginning of 2004, restated for discontinued operations, the change in inventory accounting method from LIFO to FIFO, merger-related costs, and the gain on the 2004 sale of a Belden European operation. EUROPEAN RESTRUCTURING AND OTHER CHARGES Third quarter 2005 results include pretax charges of $15.5 million, as follow: - A $2.2 million charge for non-cash impairment of assets of the Company's Manchester, U.K. operation and a related $2.7 million adjustment to goodwill. The Company said, in a September 29, 2005 announcement, that it is reexamining its participation in the telecommunications cable market in the United Kingdom and is considering alternatives for the Manchester operation. - Additional non-cash impairment charges of $7.9 million related to restructuring activities in Europe that were announced on September 29. - Charges of $2.7 million for severance, merger-related costs, and executive succession. TAX MATTERS Year-to-date income tax expense reflects the non-deductibility of certain goodwill impairment charges, the establishment of valuation allowances against the net operating losses in certain European jurisdictions, and one-time third-quarter items amounting to $0.9 million resulting from the favorable resolution of prior-period tax matters. In its pro forma analysis of results excluding the charges and excluding the one-time tax benefits, the Company's effective tax rate for the nine months ending September 30, 2005 was 34.0%. 3 ELECTRONICS SEGMENT External customer revenue of the Electronics segment for the quarter ended September 30, 2005 was $199.5 million, and total sales including sales to affiliates were $219.8 million. Operating profit of the segment was $28.9 million, or 13.1 percent of total revenues. Included in this result were severance and merger-related costs of $0.4 million. Without these charges, operating income of the segment for the quarter was 13.3 percent of sales. Total revenue and operating income of this segment in the third quarter of 2004 were $187.2 million and $1.9 million, respectively. "The Electronics segment has benefited from rising economic activity and from technology-driven growth in security applications, in-flight entertainment, and other specialty markets," said Mr. Reece. "Our capacity utilization is high in North America and improving in Europe, where restructuring will drive further improvement. The North American operations in the Electronics segment have been very effective in continuing to raise prices this year to keep pace with rising material costs. In Europe, we are making some progress in raising prices but pricing continues to lag material cost." Year to date, external customer revenue of the Electronics segment was $582.0 million, and total revenue including sales to affiliates was $653.3 million. Operating profit of the segment year-to-date was $76.4 million including $2.7 million of charges and merger-related costs. In the nine months ended September 30, 2004, revenue of the segment was $472.6 million in total and operating earnings were $28.5 million. NETWORKING SEGMENT Revenue from external customers of the Networking segment for the quarter ended September 30, 2005 was $142.9 million, and total revenue, including sales to affiliates, was $146.9 million. The operating loss of the segment was $1.0 million. Excluding impairment charges and merger-related costs of $11.8 million, operating profit of the Networking segment was $10.8 million or 7.3 percent of sales for the quarter. Total revenues and operating profit in the third quarter of 2004 were respectively $109.5 million and $7.1 million for this segment. The year-over-year increase in segment revenue was because of stronger volume in the North American market, the impact of the merger, improved pricing, and currency translation effects. "We are delighted with the strong performance of our Networking group in North America and in Europe," said Mr. Reece. "We are experiencing significant volume improvement year-over-year and sequentially, accompanied by favorable trends toward higher category cables and more connectivity, which improve our margin mix," he said. Year to date, external customer revenue of the Networking segment was $407.2 million and total revenue, including affiliate sales, was $417.0 million. Operating profit of the segment year-to-date was $14.6 million including $12.4 million of charges and merger-related costs. For the first nine months of 2004, total revenue of the Networking segment was $228.2 million and operating profit was $15.3 million. 4 OUTLOOK "We expect to see favorable trends in the Networking market continue into the fourth quarter and next year," said Mr. Reece. "Two developments that are enriching our mix are the accelerating migration of customer demand from category 5e cable to categories 6 and above and an increase in the proportion of connectivity products in our mix. We also perceive a strengthening of major project business, which boosts overall demand. In the electronics and specialty markets we believe we will continue to experience technology-driven growth in certain niches such as security cables and in-flight entertainment, while the majority of the business, which is more economically driven, will continue to grow at a moderate pace with economic activity in our served markets. "For the fourth quarter of 2005," Mr. Reece said, "we expect that the level of revenue will be similar to the third quarter, and that our operating margin will be between 8 and 9 percent of sales, excluding any further restructuring or severance charges and excluding $3 million from our sales incentive agreement with a private-label customer. "In 2006, we believe that revenue will rise because of both price increases designed to compensate for rising material costs and modest growth of market volume. We expect that our operating earnings in 2006 will benefit from the full-year impact of the merger-related cost reductions and will be helped by stability in raw material costs. In addition to improvements in operating margins that we plan to achieve in 2006, our earnings per share will benefit from the impact of the share repurchase program," he concluded. The Company expects that in 2006 depreciation expense will be about $37 million, capital expenditures about $30 million, and the effective tax rate 34.0 percent. 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 significantly from these expectations. Some of the factors that may cause actual results to differ from the Company's expectations include the Company's ability to implement its restructuring plans; the outcome of negotiations with British Telecom plc; the Company's degree of success in managing its European operations during the restructuring; the outcome of discussions with labor; general economic conditions; the cost and availability of materials including copper, plastic compounds derived from fossil fuels, and other materials; energy costs; the degree to which the Company will be able to compensate for rising costs through the pricing of its products; demand for the Company's products; and other factors. For a more complete discussion of risk factors, please see Belden CDT's Annual Report on Form 10-K for the year ended December 31, 2004, filed with the SEC on March 31, 2005. Belden CDT Inc. assumes no responsibility to update any forward-looking statements as a result of new information or future developments. 5 ABOUT BELDEN CDT Belden CDT Inc. is one of the largest U.S.-based manufacturers of high-speed electronic cables and focuses on products for the specialty electronics and data networking markets, including connectivity. The Company, formed in July 2004 through a merger of equals, had combined pro forma sales in 2004 of $1.2 billion. Belden CDT's 2004 annual report is available at www.beldencdt.com. CONTACT: Belden CDT Inc. Dee Johnson, Director of Investor Relations 314-854-8054 www.beldencdt.com Following are comparative consolidated income statements of Belden CDT Inc. for the three- and nine-month periods ended September 30, 2005 and September 30, 2004, segment information for the same periods, and condensed consolidated balance sheets as of September 30, 2005, and December 31, 2004. 6 BELDEN CDT INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, --------------------- --------------------- 2005 2004 2005 2004 --------- --------- --------- --------- (in thousands, except per share data) Revenues $ 342,389 $ 281,454 $ 989,201 $ 635,864 Cost of sales (266,044) (228,243) (772,511) (514,450) --------- --------- --------- --------- Gross profit 76,345 53,211 216,690 121,414 Selling, general and administrative expenses (48,722) (47,527) (154,132) (96,985) Asset impairment (12,849) (8,871) (12,849) (8,871) --------- --------- --------- --------- Operating earnings (loss) 14,774 (3,187) 49,709 15,558 Interest expense, net (2,198) (3,537) (7,682) (9,870) Minority interest (215) (225) (551) (225) Other nonoperating income -- -- -- 1,732 --------- --------- --------- --------- Income (loss) from continuing operations before taxes 12,361 (6,949) 41,476 7,195 Income tax benefit (expense) (6,283) 3,748 (16,328) (438) --------- --------- --------- --------- Income (loss) from continuing operations 6,078 (3,201) 25,148 6,757 Loss from discontinued operations(1) (13) (2,809) (2,438) (10,128) Gain (loss) on disposal of discontinued operations(2) -- (1,529) 15,163 1,491 ========= ========= ========= ========= Net income (loss) $ 6,065 $ (7,539) $ 37,873 $ (1,880) ========= ========= ========= ========= Weighted average number of common shares and equivalents: Basic 45,540 42,517 46,518 31,266 Diluted 52,213 42,517 53,167 31,643 ========= ========= ========= ========= Basic income (loss) per share: Continuing operations $ .13 $ (.08) $ .54 $ .21 Discontinued operations -- (.07) (.05) (.32) Disposal of discontinued operations -- (.03) .32 .05 Net income (loss) per share .13 (.18) .81 (.06) ========= ========= ========= ========= Diluted income (loss) per share: Continuing operations $ .13 $ (.08) $ .51 $ .21 Discontinued operations -- (.07) (.05) (.32) Disposal of discontinued operations -- (.03) .29 .05 Net income (loss) per share .13 (.18) .75 (.06) ========= ========= ========= =========
(1) Net of income tax benefit of $49, $1,489, $1,330 and $5,606, respectively. (2) Net of income tax benefit (expense) of $806, $(8,529) and $(839), respectively. 7 BELDEN CDT INC. SEGMENT INFORMATION (Unaudited) (in thousands) THREE MONTHS ENDED SEPTEMBER 30, 2005
TOTAL FINANCE AND CONTINUING ELECTRONICS NETWORKING ADMINISTRATION ELIMINATIONS OPERATIONS ----------- ---------- -------------- ------------ ---------- EXTERNAL CUSTOMER REVENUES $199,529 $142,860 $ -- $ -- $342,389 AFFILIATE REVENUES 20,256 4,016 -- (24,272) -- -------- -------- ------- -------- -------- TOTAL REVENUES $219,785 $146,876 $ -- $(24,272) $342,389 ======== ======== ======= ======== ======== OPERATING EARNINGS (LOSS) $ 28,857 $ (961) $(7,826) $ (5,296) $ 14,774 ======== ======== ======= ======== ========
Three Months Ended September 30, 2004
Total Finance and Continuing Electronics Networking Administration Eliminations Operations ----------- ---------- -------------- ------------ ---------- External customer revenues $171,972 $109,482 $ -- $ -- $281,454 Affiliate revenues 15,208 -- -- (15,208) -- -------- -------- ------- -------- -------- Total revenues $187,180 $109,482 $ -- $(15,208) $281,454 ======== ======== ======= ======== ======== Operating earnings (loss) $ 1,902 $ 7,087 $(9,774) $ (2,402) $ (3,187) ======== ======== ======= ======== ========
NINE MONTHS ENDED SEPTEMBER 30, 2005
TOTAL FINANCE AND CONTINUING ELECTRONICS NETWORKING ADMINISTRATION ELIMINATIONS OPERATIONS ----------- ---------- -------------- ------------ ---------- EXTERNAL CUSTOMER REVENUES $582,007 $407,194 $ -- $ -- $989,201 AFFILIATE REVENUES 71,257 9,821 -- (81,078) -- -------- -------- -------- -------- -------- TOTAL REVENUES $653,264 $417,015 $ -- $(81,078) $989,201 ======== ======== ======== ======== ======== OPERATING EARNINGS (LOSS) $ 76,439 $ 14,595 $(25,738) $(15,587) $ 49,709 ======== ======== ======== ======== ========
Nine Months Ended September 30, 2004
Total Finance and Continuing Electronics Networking Administration Eliminations Operations ----------- ---------- -------------- ------------ ---------- External customer revenues $408,338 $227,526 $ -- $ -- $635,864 Affiliate revenues 64,225 646 -- (64,871) -- -------- -------- -------- -------- -------- Total revenues $472,563 $228,172 $ -- $(64,871) $635,864 ======== ======== ======== ======== ======== Operating earnings (loss) $ 28,539 $ 15,300 $(18,140) $(10,141) $ 15,558 ======== ======== ======== ======== ========
8 BELDEN CDT INC. CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, December 31, 2005 2004 ------------- ------------ (in thousands) (UNAUDITED) ASSETS Current assets Cash and cash equivalents $ 177,915 $ 188,798 Receivables 218,511 174,554 Inventories 241,908 227,034 Deferred income taxes 16,190 15,911 Other current assets 5,209 8,883 Current assets of discontinued operations 12,972 34,138 ---------- ---------- Total current assets 672,705 649,318 Property, plant and equipment, less accumulated depreciation 319,141 338,247 Goodwill, less accumulated amortization 275,573 286,163 Other intangible assets, less accumulated amortization 73,530 78,266 Other long-lived assets 5,863 6,460 Long-lived assets of discontinued operations 12,692 36,984 ---------- ---------- $1,359,504 $1,395,438 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued liabilities $ 213,047 $ 185,035 Accrued income taxes 6,467 -- Current maturities of long-term debt 59,052 15,702 Current liabilities of discontinued operations 8,955 17,534 ---------- ---------- Total current liabilities 287,521 218,271 Long-term debt 172,052 232,823 Postretirement benefits other than pensions 32,671 30,089 Deferred income taxes 73,710 68,158 Other long-term liabilities 15,234 25,340 Long-term liabilities of discontinued operations 1,715 1,516 Minority interest 8,384 9,241 Stockholders' equity Preferred stock -- -- Common stock 503 502 Additional paid-in capital 535,981 531,984 Retained earnings 283,322 252,114 Accumulated other comprehensive income 1,266 27,862 Unearned deferred compensation (613) (2,462) Treasury stock (52,242) -- ---------- ---------- Total stockholders' equity 768,217 810,000 ---------- ---------- $1,359,504 $1,395,438 ========== ==========
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