EX-99.1 2 c23659exv99w1.htm NEWS RELEASE exv99w1
 

Exhibit 99.1
         
(BELDEN LOGO)
  7701 Forsyth Boulevard
Suite 800

St. Louis, Missouri 63105
  Phone: 314.854.8000
Fax: 314.854.8003

www.Belden.com
News Release
     
From:
  Belden
 
  Dee Johnson
 
  314.854.8054
For Immediate Release — February 7, 2008
BELDEN ANNOUNCES FOURTH QUARTER 2007 EARNINGS
Reports adjusted fourth-quarter diluted EPS of $0.83 and 80% growth in adjusted net income;
confirms 2008 guidance
St. Louis, Missouri — Belden (NYSE:BDC) today announced that revenue for the fourth quarter ended December 31, 2007, was $584.6 million and operating income was $59.3 million. Income from continuing operations was $35.6 million, or $0.71 per diluted share. The quarter’s revenue included $181.1 million from businesses acquired during 2007 and $16.3 million of favorable currency translation.
During the quarter, Belden recorded a pretax charge of $3.6 million for nonrecurring purchase accounting effects related to the businesses acquired in 2007 and a pretax charge of $1.6 million related to the Voluntary Separation Program and other personnel actions announced on December 11, 2007. The Company also recorded a pretax benefit of $0.9 million associated with the net effects of its previously announced North American restructuring actions including severance charges, income with respect to retirement plan curtailments, and favorable depreciation adjustments. Additionally, Belden recorded a one-time income tax charge of $3.5 million resulting from the enactment of tax rate changes affecting the Company’s foreign operations. In the fourth quarter of 2006, the Company incurred pretax charges of $19.9 million for severance, asset impairment, and depreciation adjustments associated with restructuring actions and a gain of $1.4 million from the sale of assets.
Adjusted for these items, operating income in the fourth quarter increased 69.1 percent year over year to $63.6 million. As a percent of revenue, adjusted operating income was 10.9 percent in the fourth quarter of 2007, compared with 9.9 percent in the fourth quarter of 2006. Adjusted diluted income per share from continuing operations was $0.83 in the fourth quarter of 2007, an 80.4 percent increase from $0.46 in the fourth quarter of 2006. See the attached schedule, Adjusted Operating Results, for a reconciliation of GAAP results to adjusted results.
Full-Year Results
Revenue of $2.033 billion in the year ended December 31, 2007, was 35.9 percent higher compared with $1.496 billion in 2006, including revenue of $495.1 million from businesses acquired during 2007 and favorable currency impact of $39.3 million or 2.7 percent. Operating income in 2007 was $220.7 million, and income from continuing operations was $137.1 million, or $2.73 per diluted share.

 


 

Management Comment
“Organic revenue growth in the fourth quarter was 6 percent,” said John Stroup, President and Chief Executive Officer of Belden, “reflecting an outstanding quarter in Asia and growth in North America, partially offset by lower volume in Europe as we remain focused on improving margins. We are pleased with our results for the quarter and year, and we are encouraged by the positive organic growth in the second half of 2007.”
Items of Note
    Under its share repurchase program announced in August 2007, the Company repurchased 456,300 shares for $21.0 million during the fourth quarter for a 2007 total of 676,800 shares for $31.7 million.
 
    In November and December, the Company completed the sale of three parcels of real estate, for net proceeds of $26.8 million. The real estate sold includes the Company’s former manufacturing facility in Pointe Claire, Quebec, its excess real estate in Venlo, The Netherlands, and its occupied real estate in Venlo which the Company is leasing back.
 
    Free cash flow in the fourth quarter (cash from operations less capital expenditures) was $15.2 million.
Outlook
“As we stated in our release of December 11, we expect 2008 revenue to be between $2.2 billion and $2.3 billion. This revenue estimate is based on continuing expectations of slowing economic growth. Excluding restructuring costs and nonrecurring charges, we expect our operating profit margin to be between 12 percent and 14 percent of revenue and earnings per diluted share to be between $3.45 and $3.75 for the year,” said Mr. Stroup.
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. 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 Company’s ability to integrate successfully the 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, 2006, filed with the SEC on March 1, 2007. Belden disclaims any duty to update any forward-looking statements as a result of new information, future developments, or otherwise.
About Belden
Belden is a leader in the design, manufacture, and marketing of signal transmission solutions for data networking and a wide range of specialty electronics markets including entertainment, industrial, security and aerospace applications. 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
 
  and Corporate Communications
 
  314-854-8054

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The following schedules are provided:
    Comparative condensed consolidated statements of operations for the three-month and twelve-month periods ended December 31, 2007, and December 31, 2006.
 
    Segment results for the same periods.
 
    Condensed consolidated balance sheets as of December 31, 2007, and December 31, 2006.
 
    A supplemental schedule of adjusted consolidated results for the quarter, the year, and the prior-year comparable periods, excluding certain non-recurring purchase accounting effects, gain on sale of assets, severance charges, asset impairment, adjusted depreciation and discrete tax items.

Page 3


 

BELDEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                                 
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2007     2006     2007     2006  
            (In thousands, except per share data)  
Revenues
  $ 584,584     $ 378,757     $ 2,032,841     $ 1,495,811  
Cost of sales
    (422,799 )     (300,409 )     (1,471,471 )     (1,162,498 )
 
                       
Gross profit
    161,785       78,348       561,370       333,313  
Selling, general and administrative expenses
    (102,523 )     (54,433 )     (345,928 )     (205,139 )
Gain on sale of assets
          1,383       8,556       1,383  
Asset impairment
          (6,196 )     (3,262 )     (11,079 )
 
                       
Operating income
    59,262       19,102       220,736       118,478  
Interest expense
    (8,747 )     (2,547 )     (27,516 )     (13,096 )
Interest income
    1,257       2,471       6,544       7,081  
Other income (expense)
    2,663       364       1,799       (187 )
 
                       
Income from continuing operations before taxes
    54,435       19,390       201,563       112,276  
Income tax expense
    (18,846 )     (8,677 )     (64,440 )     (40,713 )
 
                       
Income from continuing operations
    35,589       10,713       137,123       71,563  
Loss from discontinued operations, net of tax
                      (1,330 )
Loss on disposal of discontinued operations, net of tax
                      (4,298 )
 
                       
Net income
  $ 35,589     $ 10,713     $ 137,123     $ 65,935  
 
                       
Weighted average number of common shares and equivalents:
                               
Basic
    44,851       44,067       44,877       43,319  
Diluted
    49,868       51,125       50,615       50,276  
 
                               
Basic income (loss) per share:
                               
Continuing operations
  $ 0.79     $ 0.24     $ 3.06     $ 1.65  
Discontinued operations
                      (0.03 )
Disposal of discontinued operations
                      (0.10 )
Net income
    0.79       0.24       3.06       1.52  
 
                               
Diluted income (loss) per share:
                               
Continuing operations
  $ 0.71     $ 0.22     $ 2.73     $ 1.48  
Discontinued operations
                      (0.03 )
Disposal of discontinued operations
                      (0.08 )
Net income
    0.71       0.22       2.73       1.37  
 
                               
Dividends declared per share
  $ 0.05     $ 0.05     $ 0.20     $ 0.20  

 


 

BELDEN INC.
OPERATING SEGMENT INFORMATION
(Unaudited)
                                 
    External                     Operating  
    Customer     Affiliate     Total     Income  
Three Months Ended December 31, 2007   Revenues     Revenues     Revenues     (Loss)  
            (In thousands)          
Belden Americas
  $ 225,522     $ 22,227     $ 247,749     $ 44,770  
Specialty Products
    63,377       21,455       84,832       12,303  
Europe
    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 Continuing Operations
  $ 584,584     $     $ 584,584     $ 59,262  
 
                       
 
                               
Three Months Ended December 31, 2006
                               
 
                               
Belden Americas
  $ 208,569     $ 15,094     $ 223,663     $ 18,508  
Specialty Products
    56,934       8,039       64,973       6,030  
Europe
    95,997       2,032       98,029       4,973  
Asia Pacific
    17,257             17,257       2,484  
 
                       
Total Segments
    378,757       25,165       403,922       31,995  
Finance and Administration
                      (8,092 )
Eliminations
          (25,165 )     (25,165 )     (4,801 )
 
                       
Total Continuing Operations
  $ 378,757     $     $ 378,757     $ 19,102  
 
                       
 
                               
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  
Europe
    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 Continuing Operations
  $ 2,032,841     $     $ 2,032,841     $ 220,736  
 
                       
 
                               
Twelve Months Ended December 31, 2006
                               
 
                               
Belden Americas
  $ 819,119     $ 64,235     $ 883,354     $ 123,675  
Specialty Products
    247,316       30,459       277,775       33,116  
Europe
    365,079       8,659       373,738       4,072  
Asia Pacific
    64,297             64,297       6,803  
 
                       
Total Segments
    1,495,811       103,353       1,599,164       167,666  
Finance and Administration
                      (29,220 )
Eliminations
          (103,353 )     (103,353 )     (19,968 )
 
                       
Total Continuing Operations
  $ 1,495,811     $     $ 1,495,811     $ 118,478  
 
                       

 


 

BELDEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
                 
    December 31, 2007 (1)     December 31, 2006  
    (Unaudited)          
    (In thousands)  
ASSETS
               
Current assets:
               
Cash and cash equivalents
  $ 159,964     $ 254,151  
Receivables
    373,108       217,908  
Inventories, net
    257,540       202,248  
Deferred income taxes
    28,578       34,664  
Other current assets
    17,392       10,465  
 
           
 
               
Total current assets
    836,582       719,436  
 
               
Property, plant and equipment, less accumulated depreciation
    369,803       272,285  
Goodwill, less accumulated amortization
    648,882       275,134  
Intangible assets, less accumulated amortization
    154,786       70,964  
Other long-lived assets
    58,796       18,149  
 
           
 
               
 
  $ 2,068,849     $ 1,355,968  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current liabilities:
               
Accounts payable and accrued liabilities
  $ 350,047     $ 200,008  
Current maturities of long-term debt
    110,000       62,000  
 
           
 
               
Total current liabilities
    460,047       262,008  
 
               
Long-term debt
    350,000       110,000  
Postretirement benefits
    101,390       62,995  
Deferred income taxes
    78,140       71,399  
Other long-term liabilities
    6,609       5,665  
Stockholders’ equity:
               
Common stock
    503       503  
Additional paid-in capital
    638,690       591,416  
Retained earnings
    478,776       348,069  
Accumulated other comprehensive income
    93,198       15,013  
Treasury stock
    (138,504 )     (111,100 )
 
           
 
               
Total stockholders’ equity
    1,072,663       843,901  
 
           
 
               
 
  $ 2,068,849     $ 1,355,968  
 
           
 
(1)   The December 31, 2007 condensed consolidated balance sheet includes the assets and liabilities of Hirschmann Automation and Control, LTK Wiring and Lumberg Automation, all of which were acquired during 2007.

 


 

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 purchase accounting effects related to acquisitions (inventory cost step-up, amortization of the sales backlog intangible asset, and in-process research and development charges), severance charges, adjusted depreciation, asset impairment, gains (losses) on sales of assets, benefits from retirement plan curtailments, and one-time tax benefits (charges). 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 accounting principles generally accepted in the United States.
                         
    As              
Three Months Ended December 31, 2007   Reported     Adjustments     Adjusted  
    (In thousands, except percentages and per share amounts)  
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 %
 
                       
Income from continuing operations
  $ 35,589     $ 5,745     $ 41,334  
as a percent of revenues
    6.1 %             7.1 %
 
                       
Income from continuing operations per diluted share
  $ 0.71     $ 0.12     $ 0.83  
 
                       
Three Months Ended December 31, 2006
                       
 
Revenues
  $ 378,757     $     $ 378,757  
 
                       
Gross profit
  $ 78,348     $ 11,351     $ 89,699  
as a percent of revenues
    20.7 %             23.7 %
 
                       
Operating income
  $ 19,102     $ 18,519     $ 37,621  
as a percent of revenues
    5.0 %             9.9 %
 
                       
Income from continuing operations
  $ 10,713     $ 12,203     $ 22,916  
as a percent of revenues
    2.8 %             6.1 %
 
                       
Income from continuing operations per diluted share
  $ 0.22     $ 0.24     $ 0.46  
Adjustments for the three months ended December 31, 2007 included after-tax purchase accounting effects for acquisitions and severance related to the Voluntary Separation Program and other personnel actions of $2.3 million and $1.0 million, respectively, and a $3.5 million tax adjustment partially offset by after-tax benefits totaling $0.5 million associated with our previously announced North American restructuring actions including severance charges, income with respect to retirement plan curtailments, and favorable depreciation adjustments, and a $0.6 million after-tax gain on sales of assets.
Adjustments for the three months ended December 31, 2006 included after-tax charges for severance, asset impairment, adjusted depreciation, and lease breakage of $9.0 million, $4.0 million, $0.4 million and $0.1 million, respectively, and an after-tax gain on the disposal of tangible assets of $1.3 million.

 


 

                         
    As              
Twelve Months Ended December 31, 2007   Reported     Adjustments     Adjusted  
    (In thousands, except percentages and per share amounts)  
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 %
 
                       
Income from continuing operations
  $ 137,123     $ 7,166     $ 144,289  
as a percent of revenues
    6.7 %             7.1 %
 
                       
Income from continuing operations per diluted share
  $ 2.73     $ 0.14     $ 2.87  
 
                       
Twelve Months Ended December 31, 2006
                       
 
                       
Revenues
  $ 1,495,811     $     $ 1,495,811  
 
                       
Gross profit
  $ 333,313     $ 19,418     $ 352,731  
as a percent of revenues
    22.3 %             23.6 %
 
                       
Operating income
  $ 118,478     $ 32,912     $ 151,390  
as a percent of revenues
    7.9 %             10.1 %
 
                       
Income from continuing operations
  $ 71,563     $ 19,997     $ 91,560  
as a percent of revenues
    4.8 %             6.1 %
 
                       
Income from continuing operations per diluted share
  $ 1.48     $ 0.40     $ 1.88  
Adjustments for the twelve months ended December 31, 2007 included after-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 $10.4 million, $2.5 million, $1.0 million, and $1.0 million, respectively, and a $0.4 million one-time tax adjustment partially offset by a $8.1 million after-tax gain on sales of assets.
Adjustments for the twelve months ended December 31, 2006 included after-tax charges for severance, asset impairment, adjusted depreciation, and lease breakage totaling $16.9 million, $7.5 million, $1.5 million, and $0.1 million, respectively, a one-time tax benefit of $4.7 million, and an after-tax gain on the disposal of tangible assets of $1.3 million.