EX-99.1 2 c07141exv99w1.txt NEWS RELEASE Exhibit 99.1 [BELDEN GRAPHIC] 7701 Forsyth Boulevard Phone: 314.854.8000 Suite 800 Fax: 314.854.8003 St. Louis, Missouri 63105 www.Belden.com News Release FROM: BELDEN DEE JOHNSON 314.854.8045 FOR IMMEDIATE RELEASE -- JULY 27, 2006 BELDEN REPORTS REVENUE GROWTH OF 31.5 PERCENT, DILUTED EPS OF $0.51 EXCLUDING CHARGES OPERATING LEVERAGE AND DISCIPLINED PRICING CONTRIBUTE TO EARNINGS GROWTH St. Louis -- Belden (NYSE:BDC) announced today that revenue for the second quarter ended June 26, 2006, was $409.6 million. For the quarter, operating income was $36.8 million, income from continuing operations was $21.5 million, and earnings per diluted share from continuing operations were $0.44. The quarterly revenue increase of 31.5 percent from the prior year included favorable currency translation of 1.3 percent or $4.0 million. During the second quarter of 2006, the Company recorded pretax charges of $4.3 million for asset impairment and severance associated with its previously communicated restructuring actions in Europe and North America. Second-quarter 2005 results included pretax charges of $6.5 million for executive succession, severance, and merger-related costs. Operating income, adjusted for these charges, increased 79.7 percent from $22.9 million to $41.1 million, and the operating margin rose 270 basis points to 10.0 percent of revenue. Earnings from continuing operations per diluted share, similarly adjusted, rose 96 percent from $0.26 in 2005 to $0.51 in 2006. See the attached reconciliation of adjusted results to GAAP results. YEAR-TO-DATE RESULTS Year-to-date, operating income was $63.8 million, income from continuing operations was $36.5 million, and earnings per diluted share from continuing operations were $0.76. Year-to-date revenue increased 22.4 percent from the prior year, with negligible effects from currency translation. MANAGEMENT COMMENT "Approximately one-third of our year-over-year revenue improvement came from higher volume, especially in our industrial markets. This increase in volume and the accompanying operating leverage it provides, coupled with cost reductions we made in 2005 and the effective hard work of our associates, were the primary reasons for the year-over-year expansion in our operating income. Pricing contributed the remaining two-thirds of our 30 percent organic revenue growth in the second quarter, as we employed our new pricing process across all our markets in response to unprecedented raw material volatility," said John Stroup, President and Chief Executive Officer. ITEMS OF NOTE Items of special note for the quarter include the following: o The Company changed its management practices with respect to working capital as part of the implementation of its strategic plan and, as a result, increased its reserve for excess and obsolete inventory by $8.2 million pretax. o On June 5, the Company announced plans to establish a new plant in Mexico and to close two U.S. manufacturing plants (in Fort Mill, South Carolina, and Tompkinsville, Kentucky). The Company recorded a $2.5 million pretax charge for asset impairment and employee severance related to these plans. OUTLOOK "We remain in a volatile material cost environment. It continues to be a challenge to manage pricing so as to maintain our profitability," said John Stroup. "We expect the general economic conditions in our served markets to remain healthy in the second half of the year. We expect diluted earnings per share from continuing operations for the third quarter (on a GAAP basis) between $0.43 and $0.48; further charges related to our on-going manufacturing restructuring may reduce that. In light of our strong first half, we are again raising our earnings guidance for the year 2006," he continued. "We expect that our diluted earnings per share from continuing operations for the year (on a GAAP basis) will be between $1.62 and $1.72. This range includes estimated restructuring charges of $0.13 for the year." FORWARD-LOOKING STATEMENTS Statements in this release, including those under "Outlook," 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. Some of the 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 degree -2- to which the Company will be able to compensate for rising costs through the pricing of its products; the Company's ability to implement its announced restructuring plans; 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, 2005, filed with the SEC on March 16, 2006. Belden disclaims any duty to update any forward-looking statements as a result of new information, future developments, or otherwise. ABOUT BELDEN Belden is one of the largest U.S.-based manufacturers of high-speed electronic cables and focuses on products for specialty electronics and data networking, including connectivity. To obtain additional information contact Investor Relations at 314-854-8054, or visit our website at www.belden.com. CONTACT: Belden Dee Johnson, Director of Investor Relations 314-854-8054 The following schedules are provided: o Comparative condensed consolidated statements of operations for the three- and six-month periods ended June 25, 2006 and June 26, 2005. o Segment results for the same periods. o Condensed consolidated balance sheets as of June 25, 2006, and December 31, 2005. o A supplemental schedule of adjusted consolidated results for the quarter and year to date, excluding charges for severance, asset impairment, accelerated depreciation, executive succession, and merger-related costs. -3- BELDEN CDT INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 25, JUNE 26, JUNE 25, JUNE 26, 2006 2005 2006 2005 --------- ---------- ----------- ---------- (IN THOUSANDS, EXCEPT PER SHARE DATA) Revenues $ 409,568 $ 311,438 $ 731,473 $ 597,706 Cost of sales (317,391) (239,162) (565,881) (462,645) --------- ---------- ----------- ---------- Gross profit 92,177 72,276 165,592 135,061 Selling, general and administrative (53,013) (55,917) (99,472) (104,051) expenses Asset impairment (2,361) -- (2,361) -- --------- ---------- ----------- ---------- Operating income 36,803 16,359 63,759 31,010 Interest expense (3,701) (3,918) (7,493) (7,676) Interest income 1,644 1,318 2,639 2,074 Minority interest (252) (169) (469) (336) --------- ---------- ----------- ---------- Income from continuing operations 34,494 13,590 58,436 25,072 before taxes Income tax expense (12,970) (4,732) (21,972) (8,832) --------- ---------- ----------- ---------- Income from continuing operations 21,524 8,858 36,464 16,240 Gain (loss) from discontinued operations, net of tax -- 1,144 (1,330) 405 Gain (loss) on disposal of discontinued operations, net of tax -- 8,763 (4,298) 15,163 --------- ---------- ----------- ---------- Net income $ 21,524 $ 18,765 $ 30,836 $ 31,808 ========= ========== =========== ========== Weighted average number of common shares and equivalents: Basic 43,036 46,971 42,801 46,989 Diluted 50,026 53,472 49,679 53,568 Basic income (loss) per share: Continuing operations $ 0.50 $ 0.19 $ 0.85 $ 0.35 Discontinued operations -- 0.02 (0.03) 0.01 Disposal of discontinued operations -- 0.19 (0.10) 0.32 Net income 0.50 0.40 0.72 0.68 Diluted income (loss) per share: Continuing operations $ 0.44 $ 0.18 $ 0.76 $ 0.33 Discontinued operations -- 0.02 (0.03) 0.01 Disposal of discontinued operations -- 0.16 (0.08) 0.28 Net income 0.44 0.36 0.65 0.62 Dividends declared per share $ 0.05 $ 0.05 $ 0.10 $ 0.10
-4- BELDEN CDT INC. SEGMENT INFORMATION (Unaudited)
EXTERNAL OPERATING CUSTOMER AFFILIATE TOTAL INCOME THREE MONTHS ENDED JUNE 25, 2006 REVENUES REVENUES REVENUES (LOSS) -------------------------------- ---------- ---------- ----------- ----------- (IN THOUSANDS) Belden Americas $ 219,830 $ 18,802 $ 238,632 $ 37,796 Specialty Products 73,582 8,845 82,427 9,498 Europe 100,501 1,873 102,374 69 Asia Pacific 15,655 -- 15,655 1,480 ---------- ---------- ----------- --------- Total Segments 409,568 29,520 439,088 48,843 Finance and Administration -- -- -- (6,776) Eliminations -- (29,520) (29,520) (5,264) --------- --------- --------- --------- Total Continuing Operations $ 409,568 $ -- $ 409,568 $ 36,803 ========= ========= ========= ========= THREE MONTHS ENDED JUNE 26, 2005 Belden Americas $ 152,238 $ 23,435 $ 175,673 $ 20,912 Specialty Products 61,950 4,038 65,988 8,622 Europe 84,425 2,925 87,350 2,748 Asia Pacific 12,825 -- 12,825 434 --------- --------- --------- --------- Total Segments 311,438 30,398 341,836 32,716 Finance and Administration -- -- -- (11,482) Eliminations -- (30,398) (30,398) (4,875) --------- --------- --------- --------- Total Continuing Operations $ 311,438 $ -- $ 311,438 $ 16,359 ========= ========= ========= ========= SIX MONTHS ENDED JUNE 25, 2006 Belden Americas $ 395,196 $ 33,714 $ 428,910 $ 68,829 Specialty Products 134,300 14,215 148,515 16,400 Europe 173,513 4,009 177,522 (1,071) Asia Pacific 28,464 -- 28,464 2,933 --------- --------- --------- --------- Total Segments 731,473 51,938 783,411 87,091 Finance and Administration -- -- -- (13,041) Eliminations -- (51,938) (51,938) (10,291) --------- --------- --------- --------- Total Continuing Operations $ 731,473 $ -- $ 731,473 $ 63,759 ========= ========= ========= ========= SIX MONTHS ENDED JUNE 26, 2005 Belden Americas $ 294,659 $ 41,400 $ 336,059 $ 37,556 Specialty Products 115,870 8,092 123,962 16,050 Europe 163,372 4,527 167,899 3,467 Asia Pacific 23,805 -- 23,805 529 --------- --------- --------- --------- Total Segments 597,706 54,019 651,725 57,602 Finance and Administration -- -- -- (17,434) Eliminations -- (54,019) (54,019) (9,158) --------- --------- --------- --------- Total Continuing Operations $ 597,706 $ -- $ 597,706 $ 31,010 ========= ========= ========= =========
-5- BELDEN CDT INC. CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 25,2006 DECEMBER 31, 2005 -------------- ----------------- (UNAUDITED) (IN THOUSANDS) ASSETS Current assets: Cash and cash equivalents $ 195,784 $ 134,638 Receivables 240,292 174,360 Inventories 268,536 245,481 Deferred income taxes 27,839 27,845 Other current assets 6,341 8,015 Current assets of discontinued operations - 56,997 -------------- ----------------- Total current assets 738,792 647,336 Property, plant and equipment, less 280,572 287,778 accumulated depreciation Goodwill, less accumulated amortization 273,882 272,290 Other intangibles, less accumulated 71,873 72,459 amortization Other long-lived assets 17,968 6,214 -------------- ----------------- $ 1,383,087 $ 1,286,077 ============== ================= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 223,730 $ 196,078 Current maturities of long-term debt 59,054 59,000 Current liabilities of discontinued operations 463 13,342 -------------- ----------------- Total current liabilities 283,247 268,420 Long-term debt 172,000 172,051 Postretirement benefits other than pensions 34,450 33,167 Deferred income taxes 81,104 73,851 Other long-term liabilities 18,121 17,166 Minority interest 8,796 7,914 Stockholders' equity: Preferred stock - - Common stock 503 503 Additional paid-in capital 567,112 540,430 Retained earnings 317,393 290,870 Accumulated other comprehensive income 11,750 (6,881) (loss) Unearned deferred compensation - (336) Treasury stock (111,389) (111,078) -------------- ----------------- Total stockholders' equity 785,369 713,508 -------------- ----------------- $ 1,383,087 $ 1,286,077 ============== =================
-6- BELDEN CDT 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 severance charges, accelerated depreciation, asset impairment, executive succession charges, and merger-related costs. We utilize the adjusted results to review our ongoing operations without the effect of restructuring and related charges 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 generally accepted accounting principles.
AS THREE MONTHS ENDED JUNE 25, 2006 REPORTED ADJUSTMENTS ADJUSTED -------------------------------- ----------- ----------- ---------- (In thousands, except percentages and per share amounts) Revenues $ 409,568 $ -- $409,568 Gross profit $ 92,177 $ 1,522 $ 93,699 as a percent of revenues 22.5% 22.9% Operating income $ 36,803 $ 4,323 $ 41,126 as a percent of revenues 9.0% 10.0% Income from continuing operations $ 21,524 $ 3,362 $ 24,886 as a percent of revenues 5.3% 6.1% Income from continuing operations per diluted share $ 0.44 $ 0.07 $ 0.51 THREE MONTHS ENDED JUNE 26, 2005 -------------------------------- Revenues $ 311,438 $ -- $311,438 Gross profit $ 72,276 $ 218 $ 72,494 as a percent of revenues 23.2% 23.3% Operating income $ 16,359 $ 6,522 $ 22,881 as a percent of revenues 5.3% 7.3% Income from continuing operations $ 8,858 $ 4,375 $ 13,233 as a percent of revenues 2.8% 4.2% Income from continuing operations per diluted share $ 0.18 $ 0.08 $ 0.26
Adjustments for the three months ended June 25, 2006 included asset impairment of $2.4 million and severance charges of $1.9 million. Adjustments for the three months ended June 26, 2005 included executive succession, merger-related, and severance charges totaling $5.1 million, $1.2 million, and $0.2 million, respectively. -7- BELDEN CDT INC. ADJUSTED OPERATING RESULTS (Unaudited)
As SIX MONTHS ENDED JUNE 25, 2006 REPORTED ADJUSTMENTS ADJUSTED ----------- ----------- ---------- (In thousands, except percentages and per share amounts) Revenues $ 731,473 $ -- $ 731,473 Gross profit $ 165,592 $ 3,160 $ 168,752 as a percent of revenues 22.6% 23.1% Operating income $ 63,759 $ 6,722 $ 70,481 as a percent of revenues 8.7% 9.6% Income from continuing operations $ 36,464 $ 5,523 $ 41,987 as a percent of revenues 5.0% 5.7% Income from continuing operations per diluted share $ 0.76 $ 0.11 $ 0.87 SIX MONTHS ENDED JUNE 26, 2005 Revenues $ 597,706 $ -- $ 597,706 Gross profit $ 135,061 $ 700 $ 135,761 as a percent of revenues 22.6% 22.7% Operating income $ 31,010 $ 8,567 $ 39,577 as a percent of revenues 5.2% 6.6% Income from continuing operations $ 16,240 $ 5,805 $ 22,045 as a percent of revenues 2.7% 3.7% Income from continuing operations per diluted share $ 0.33 $ 0.11 $ 0.44
Adjustments for the six months ended June 25, 2006 included severance charges, asset impairment, and accelerated depreciation totaling $3.0 million, $2.4 million, and $1.3 million, respectively. Adjustments for the six months ended June 26, 2005 included executive succession, merger-related, and severance charges totaling $5.1 million, $2.8 million, and $0.7 million, respectively. -8-