Exhibit 99.1
|
1 North Brentwood Boulevard 15th Floor St. Louis, Missouri 63105 |
Phone: 314.854.8000 Fax: 314.854.8003
www.Belden.com |
News Release
Belden Reports Solid Results in Fourth Quarter 2013 and Announces Binding
Offer to Acquire Privately Held Grass Valley for $220 Million
St. Louis, Missouri – February 6, 2014 – Belden Inc. (NYSE: BDC), a global leader in high quality, end-to-end signal transmission solutions for mission-critical applications, today reported fiscal fourth quarter and full year 2013 results for the period ended December 31, 2013.
On its regularly scheduled earnings conference call, Belden will also discuss its offer to acquire privately held Grass Valley, a leading provider of innovative technology for the broadcast market.
Fourth Quarter 2013 Highlights
| • | Grew revenue by 6.7% year-over-year; |
| • | Achieved adjusted gross profit margins of 35.2%, increasing 200 basis points from 33.2% in the year-ago period; |
| • | Improved adjusted operating profit margins to 13.8%, increasing 230 basis points from 11.5% in the year-ago period; and |
| • | Increased adjusted income from continuing operations per diluted share to $0.91, up 16.7% over last year’s $0.78 per diluted share. |
Full Year 2013 Highlights
| • | Achieved adjusted gross profit margins of 35.2%, increasing 310 basis points from 32.1% in the year-ago period; |
| • | Improved adjusted operating profit margins to 13.8%, increasing 270 basis points from 11.1% in the year-ago period; |
| • | Increased adjusted income from continuing operations per diluted share to $3.69, up 31.8% over last year’s $2.80 per diluted share; |
| • | Generated a record $200 million of free cash flow for the year, exceeding adjusted income from continuing operations for the 9th year in a row; and |
| • | Purchased 1.7 million shares of Belden common stock for $93.75 million during the year, bringing the total combined program to date shares repurchased to 5.4 million. |
Fourth Quarter 2013
On a GAAP basis, revenue for the quarter totaled $509.8 million, up $32.1 million, or 6.7%, compared to $477.7 million in the fourth quarter 2012. Gross margin in the fourth quarter was 34.3%, increasing 280 basis points from 31.5% in the year-ago period. Operating profit margin in the fourth quarter was 9.6%, increasing from 6.6% in the year-ago period. Income from continuing operations per diluted share totaled $0.54, compared to $0.88 in the fourth quarter 2012, a year-over-year decrease of 38.6%, largely a result of favorable discrete tax items in the year-ago period.
Belden Reports Solid Results in Fourth Quarter 2013 and Announces Binding
Offer to Acquire Privately Held Grass Valley for $220 Million —
Page 2 of 5
Adjusted revenue for the quarter totaled $515.9 million, up $34.7 million, or 7.2%, compared to $481.2 million in the fourth quarter 2012. Adjusted gross margin in the fourth quarter was 35.2%, increasing 200 basis points from 33.2% in the year-ago period. Adjusted operating profit margin in the fourth quarter was 13.8%, increasing 230 basis points from 11.5% in the year-ago period. Adjusted income from continuing operations per diluted share totaled $0.91, compared to $0.78 in the fourth quarter 2012, a year-over-year increase of 16.7%. A non-GAAP reconciliation table is provided as an appendix to this release.
John Stroup, President and CEO of Belden Inc., said, “I’m pleased with the solid finish to the year. Results were as we expected, as our Enterprise and Broadcast platforms benefitted from improved year-over-year market demand.”
Full Year 2013
On a GAAP basis, revenue for the year totaled $2.069 billion, up $228 million, or 12.4%, compared to $1.841 billion in the full year 2012. Gross margin in 2013 was 34.0%, increasing 320 basis points from 30.8% in the year-ago period. Operating profit margin in 2013 was 9.7%, increasing 380 basis points from 5.9% in the year-ago period. Income from continuing operations per diluted share totaled $2.34, compared to $0.94 in 2012, a year-over-year increase of 149%.
Adjusted revenue for the year totaled $2.084 billion, up $237 million, or 12.9%, compared to $1.847 billion in 2012. Adjusted gross margin in 2013 was 35.2%, increasing 310 basis points from 32.1% in the year-ago period. Adjusted operating profit margin in 2013 was 13.8%, increasing 270 basis points from 11.1% in the year-ago period. Adjusted income from continuing operations per diluted share totaled $3.69, compared to $2.80 in 2012, a year-over-year increase of 31.8%.
Mr. Stroup remarked, “2013 was a very good year at Belden. We successfully integrated two important acquisitions and transformed our structure from a legacy regional organization to its current form of four global platforms serving the Broadcast, Enterprise, and Industrial markets. While market demand made for a challenging year, we remained focused on creating value through the disciplined execution of our Belden Business System. As a result, revenue and profitability are at an all-time high, and we are well positioned for the future.”
Acquisition of Grass Valley
Belden has submitted a binding offer to purchase privately held Grass Valley, a leader within the broadcast market, for $220 million. The binding offer is subject to consultation with Grass Valley’s foreign labor works council, after which we will enter into a definitive agreement. Grass Valley provides innovative technologies including production switchers, cameras, servers, and editing solutions within the mission critical applications of broadcast customers. When combined with Miranda, the resulting end-to-end solution will be the most complete and compelling in the industry.
Belden Reports Solid Results in Fourth Quarter 2013 and Announces Binding
Offer to Acquire Privately Held Grass Valley for $220 Million —
Page 3 of 5
“We are extremely excited to have Grass Valley join the Belden family. By combining Grass Valley and Miranda, we will create the broadcast industry’s largest and most complete portfolio,” said Mr. Stroup.
A full discussion of this transaction and its potential financial impact on Belden’s consolidated results will accompany the fourth quarter’s earnings call occurring today, February 6th at 10:30 am EST. This transaction is expected to close by March 31, 2014 and is subject to regulatory approvals, the completion of audited financial statements, and other customary closing conditions.
Outlook
“Market demand appears to be stable in the majority of our end-markets. This in combination with the execution of our Market Delivery System should create the catalyst for organic growth and margin expansion. Even after completing the acquisition of Grass Valley, our funnel and balance sheet will remain strong. We are confident that these initiatives position us to perform well, and we remain comfortable with our previously announced earnings outlook for 2014,” said Mr. Stroup.
The Company expects first quarter 2014 adjusted revenues to be $495 – $505 million and adjusted income from continuing operations per diluted share to be $0.77 – $0.82. For the full year ending December 31, 2014, the Company expects adjusted revenues to be $2.11 – $2.15 billion and adjusted income from continuing operations per diluted share to be $3.81 – $4.11. These figures exclude the potential impact of Grass Valley, as this transaction has not yet been completed.
On a GAAP basis, the Company expects first quarter 2014 revenues to be $491 – $501 million and income from continuing operations per diluted share to be $0.55 – $0.60. For the full year ending December 31, 2014, the Company expects revenues to be $2.096 – $2.136 billion and income from continuing operations per diluted share to be $2.95 – $3.25. These figures exclude the potential impact of Grass Valley, as this transaction has not yet been completed.
Earnings Conference Call
Management will host a conference call today at 10:30 am EST to discuss results of the quarter and full-year. 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 888-599-8685; the dial-in number for participants outside the U.S. is 913-312-0403. 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
Adjusted results are non-GAAP measures that 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.
Belden Reports Solid Results in Fourth Quarter 2013 and Announces Binding
Offer to Acquire Privately Held Grass Valley for $220 Million —
Page 4 of 5
Forward Looking Statements
This release contains forward looking statements including our expectations for the first quarter and full-year 2014 and the acquisition of Grass Valley. Forward looking statements also include any other 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 and are not guarantees of future performance. The Company’s actual results may differ materially from these expectations for a number of reasons including: changes in the global economy may impact the Company’s results; turbulence in financial markets may increase the Company’s borrowing costs; the Company relies 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 broadcast, enterprise, and industrial markets; 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, electronic components, and other materials; energy costs; the Company’s ability to achieve acquisition performance expectations and 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; security risks and the potential for business interruption from operating in volatile countries; disruptions or failures of the Company’s (or the Company’s suppliers or customers) systems or operations in the event of a major earthquake, weather event, cyber-attack, terrorist attack, or other catastrophic event that could cause delays in completing sales, providing services, or performing other mission-critical functions; and other factors. In addition, the completion of the acquisition of Grass Valley is subject to a number of factors, including regulatory approvals, the completion of audited financial statements, and other customary closing conditions. For a more complete discussion of risk factors, please see our Annual Report on Form 10-K for the year ended December 31, 2012, filed with the SEC on February 28, 2013. Belden disclaims any duty to update any forward looking statements as a result of new information, future developments, or otherwise, except as required by law.
About Belden
St. Louis—based Belden Inc. delivers a comprehensive product portfolio designed to meet the mission-critical network infrastructure needs of industrial, enterprise and broadcast markets. With innovative solutions targeted at reliable and secure transmission of rapidly growing
Belden Reports Solid Results in Fourth Quarter 2013 and Announces Binding
Offer to Acquire Privately Held Grass Valley for $220 Million —
Page 5 of 5
amounts of data, audio and video needed for today’s applications, Belden is at the center of the global transformation to a connected world. Founded in 1902, the company is headquartered in St. Louis and has manufacturing capabilities in North and South America, Europe and Asia. For more information, visit us at www.belden.com or follow us on Twitter @BeldenInc.
Contact:
Belden Investor Relations
314-854-8054
Investor.Relations@Belden.com
BDC-E
BELDEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
| (In thousands, except per share data) | ||||||||||||||||
| Revenues |
$ | 509,751 | $ | 477,687 | $ | 2,069,193 | $ | 1,840,739 | ||||||||
| Cost of sales |
(334,712 | ) | (327,350 | ) | (1,364,764 | ) | (1,274,142 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Gross profit |
175,039 | 150,337 | 704,429 | 566,597 | ||||||||||||
| Selling, general and administrative expenses |
(96,327 | ) | (89,789 | ) | (378,009 | ) | (345,926 | ) | ||||||||
| Research and development |
(20,780 | ) | (17,976 | ) | (83,277 | ) | (65,410 | ) | ||||||||
| Amortization of intangibles |
(12,395 | ) | (9,647 | ) | (50,803 | ) | (22,792 | ) | ||||||||
| Income from equity method investment |
3,637 | 2,450 | 8,922 | 9,704 | ||||||||||||
| Asset impairment and loss on sale of assets |
— | (3,772 | ) | — | (33,676 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating income |
49,174 | 31,603 | 201,262 | 108,497 | ||||||||||||
| Interest expense |
(19,586 | ) | (13,730 | ) | (73,095 | ) | (52,038 | ) | ||||||||
| Interest income |
145 | 300 | 494 | 1,033 | ||||||||||||
| Loss on debt extinguishment |
(1,612 | ) | (1,865 | ) | (1,612 | ) | (52,450 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from continuing operations before taxes |
28,121 | 16,308 | 127,049 | 5,042 | ||||||||||||
| Income tax benefit (expense) |
(4,192 | ) | 23,170 | (22,315 | ) | 38,194 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from continuing operations |
23,929 | 39,478 | 104,734 | 43,236 | ||||||||||||
| Income (loss) from discontinued operations, net of tax |
(1,421 | ) | 2,428 | (1,421 | ) | 16,774 | ||||||||||
| Gain from disposal of discontinued operations, net of tax |
— | 124,697 | — | 134,480 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
$ | 22,508 | $ | 166,603 | $ | 103,313 | $ | 194,490 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Weighted average number of common shares and equivalents: |
||||||||||||||||
| Basic |
43,459 | 44,163 | 43,871 | 45,097 | ||||||||||||
| Diluted |
44,214 | 45,028 | 44,737 | 45,942 | ||||||||||||
| Basic income (loss) per share: |
||||||||||||||||
| Continuing operations |
$ | 0.55 | $ | 0.89 | $ | 2.39 | $ | 0.96 | ||||||||
| Discontinued operations |
(0.03 | ) | 0.06 | (0.03 | ) | 0.37 | ||||||||||
| Disposal of discontinued operations |
— | 2.82 | — | 2.98 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
$ | 0.52 | $ | 3.77 | $ | 2.36 | $ | 4.31 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted income (loss) per share: |
||||||||||||||||
| Continuing operations |
$ | 0.54 | $ | 0.88 | $ | 2.34 | $ | 0.94 | ||||||||
| Discontinued operations |
(0.03 | ) | 0.05 | (0.03 | ) | 0.36 | ||||||||||
| Disposal of discontinued operations |
— | 2.77 | — | 2.93 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
$ | 0.51 | $ | 3.70 | $ | 2.31 | $ | 4.23 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Comprehensive income |
$ | 31,079 | $ | 162,268 | $ | 104,697 | $ | 186,634 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Dividends declared per share |
$ | 0.05 | $ | 0.05 | $ | 0.20 | $ | 0.20 | ||||||||
BELDEN INC.
OPERATING SEGMENT INFORMATION
(Unaudited)
| Three months ended | Twelve months ended | |||||||||||||||
| December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
| (In thousands) | ||||||||||||||||
| Revenues: |
||||||||||||||||
| Broadcast Solutions |
$ | 165,701 | $ | 115,379 | $ | 663,900 | $ | 356,320 | ||||||||
| Enterprise Connectivity Solutions |
120,167 | 114,315 | 493,129 | 496,857 | ||||||||||||
| Industrial Connectivity Solutions |
165,022 | 167,497 | 680,643 | 670,112 | ||||||||||||
| Industrial IT Solutions |
58,861 | 56,257 | 231,521 | 219,679 | ||||||||||||
| All other |
— | 24,239 | — | 97,771 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Consolidated |
$ | 509,751 | $ | 477,687 | $ | 2,069,193 | $ | 1,840,739 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating income (loss): |
||||||||||||||||
| Broadcast Solutions |
$ | 4,199 | $ | (3,958 | ) | $ | 15,099 | $ | (11,657 | ) | ||||||
| Enterprise Connectivity Solutions |
11,259 | 7,709 | 48,753 | 40,056 | ||||||||||||
| Industrial Connectivity Solutions |
20,843 | 19,651 | 92,562 | 72,366 | ||||||||||||
| Industrial IT Solutions |
10,505 | 8,866 | 38,440 | 32,807 | ||||||||||||
| All other |
— | (2,801 | ) | 1,278 | (32,640 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total segments |
46,806 | 29,467 | 196,132 | 100,932 | ||||||||||||
| Eliminations |
(1,269 | ) | (314 | ) | (3,792 | ) | (2,139 | ) | ||||||||
| Income from equity method investment |
3,637 | 2,450 | 8,922 | 9,704 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Consolidated |
$ | 49,174 | $ | 31,603 | $ | 201,262 | $ | 108,497 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
BELDEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| December 31, 2013 | December 31, 2012 | |||||||
| (Unaudited) | ||||||||
| (In thousands) | ||||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 613,304 | $ | 395,095 | ||||
| Receivables, net |
304,204 | 300,864 | ||||||
| Inventories, net |
207,980 | 215,282 | ||||||
| Deferred income taxes |
30,417 | 19,885 | ||||||
| Other current assets |
35,655 | 28,456 | ||||||
|
|
|
|
|
|||||
| Total current assets |
1,191,560 | 959,582 | ||||||
| Property, plant and equipment, less accumulated depreciation |
300,835 | 307,048 | ||||||
| Goodwill |
775,426 | 778,708 | ||||||
| Intangible assets, less accumulated amortization |
376,976 | 428,273 | ||||||
| Deferred income taxes |
32,179 | 46,970 | ||||||
| Other long-lived assets |
79,362 | 64,002 | ||||||
|
|
|
|
|
|||||
| $ | 2,756,338 | $ | 2,584,583 | |||||
|
|
|
|
|
|||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 199,897 | $ | 183,672 | ||||
| Accrued liabilities |
197,316 | 166,272 | ||||||
| Current maturities of long-term debt |
2,500 | 15,678 | ||||||
| Current liabilities of discontinued operations |
— | 86,860 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
399,713 | 452,482 | ||||||
| Long-term debt |
1,364,536 | 1,135,527 | ||||||
| Postretirement benefits |
105,924 | 144,320 | ||||||
| Other long-term liabilities |
49,624 | 40,394 | ||||||
| Stockholders’ equity: |
||||||||
| Common stock |
503 | 503 | ||||||
| Additional paid-in capital |
585,753 | 598,180 | ||||||
| Retained earnings |
556,214 | 461,756 | ||||||
| Accumulated other comprehensive loss |
(29,181 | ) | (30,565 | ) | ||||
| Treasury stock |
(276,748 | ) | (218,014 | ) | ||||
|
|
|
|
|
|||||
| Total stockholders’ equity |
836,541 | 811,860 | ||||||
|
|
|
|
|
|||||
| $ | 2,756,338 | $ | 2,584,583 | |||||
|
|
|
|
|
|||||
BELDEN INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
| Twelve Months Ended | ||||||||
| December 31, 2013 | December 31, 2012 | |||||||
| (In thousands) | ||||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 103,313 | $ | 194,490 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
94,451 | 59,355 | ||||||
| Share-based compensation |
14,854 | 12,374 | ||||||
| Deferred income tax expense (benefit) |
11,932 | (42,750 | ) | |||||
| Provision for inventory obsolescence |
4,623 | 5,085 | ||||||
| Pension funding less than pension expense |
2,833 | 593 | ||||||
| Loss on debt extinguishment |
1,612 | 52,450 | ||||||
| Asset impairment and loss on sale of assets |
— | 33,676 | ||||||
| Gain from disposal of discontinued operations |
— | (134,480 | ) | |||||
| Income from equity method investment |
(8,922 | ) | (9,704 | ) | ||||
| Tax benefit related to share-based compensation |
(10,734 | ) | (4,119 | ) | ||||
| Changes in operating assets and liabilities, net of the effects of currency exchange rate changes and acquired businesses: |
||||||||
| Receivables |
(18,132 | ) | 5,628 | |||||
| Inventories |
2,249 | 31,706 | ||||||
| Accounts payable |
12,994 | (55,166 | ) | |||||
| Accrued liabilities |
30,561 | (681 | ) | |||||
| Accrued taxes |
(93,524 | ) | (10,760 | ) | ||||
| Other assets |
3,293 | 968 | ||||||
| Other liabilities |
13,198 | 723 | ||||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
164,601 | 139,388 | ||||||
| Cash flows from investing activities: |
||||||||
| Capital expenditures |
(40,209 | ) | (41,010 | ) | ||||
| Cash used to acquire businesses, net of cash acquired |
(9,979 | ) | (860,353 | ) | ||||
| Proceeds from disposal of tangible assets |
3,169 | 9,575 | ||||||
| Proceeds from disposal of businesses |
3,735 | 299,848 | ||||||
|
|
|
|
|
|||||
| Net cash used for investing activities |
(43,284 | ) | (591,940 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Borrowings under credit arrangements |
637,595 | 1,149,966 | ||||||
| Payments under borrowing arrangements |
(434,743 | ) | (593,864 | ) | ||||
| Tax benefit related to share-based compensation |
10,734 | 4,119 | ||||||
| Proceeds from settlement of derivatives |
— | 4,024 | ||||||
| Proceeds from exercise of stock options, net of withholding tax payments |
(3,019 | ) | 2,372 | |||||
| Cash dividends paid |
(6,678 | ) | (11,441 | ) | ||||
| Debt issuance costs paid |
(17,376 | ) | (15,414 | ) | ||||
| Payments under share repurchase program |
(93,750 | ) | (75,000 | ) | ||||
|
|
|
|
|
|||||
| Net cash provided by financing activities |
92,763 | 464,762 | ||||||
| Effect of foreign currency exchange rate changes on cash and cash equivalents |
4,129 | 333 | ||||||
|
|
|
|
|
|||||
| Increase in cash and cash equivalents |
218,209 | 12,543 | ||||||
| Cash and cash equivalents, beginning of period |
395,095 | 382,552 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents, end of period |
$ | 613,304 | $ | 395,095 | ||||
|
|
|
|
|
|||||
BELDEN INC.
RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)
We define free cash flow, which is a non-GAAP financial measure, as net cash provided by operating activities adjusted for acquisition and divestiture transaction costs, capital expenditures net of the proceeds from the disposal of tangible assets, non-recurring payments related to divestitures, and non-recurring tax payments related to the settlement of a tax sharing agreement. We believe free cash flow provides useful information to investors regarding our ability to generate cash from business operations that is available for acquisitions and other investments, service of debt principal, dividends, and share repurchases. We use free cash flow, as defined, as one financial measure to monitor and evaluate performance and liquidity. Non-GAAP financial measures should be considered only in conjunction with financial measures reported according to accounting principles generally accepted in the United States. Our definition of free cash flow may differ from definitions used by other companies.
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
| (In thousands) | ||||||||||||||||
| GAAP net cash provided by operating activities |
$ | 113,798 | $ | 46,053 | $ | 164,601 | $ | 139,388 | ||||||||
| Capital expenditures, net of proceeds from the disposal of tangible assets |
(8,790 | ) | (883 | ) | (37,040 | ) | (31,435 | ) | ||||||||
| Working capital settlement in connection with the sale of consumer electronics assets |
— | 32,333 | — | 32,333 | ||||||||||||
| Acquisition and divestiture transaction costs |
— | 4,928 | — | 4,928 | ||||||||||||
| Non-recurring tax payments made for gain on 2012 sale of Thermax and Raydex cable business |
— | — | 41,808 | — | ||||||||||||
| Non-recurring tax payments made in settlement of tax sharing agreement with Cooper Industries |
— | — | 30,000 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-GAAP free cash flow |
$ | 105,008 | $ | 82,431 | $ | 199,369 | $ | 145,214 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
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: asset impairments; accelerated depreciation expense due to plant consolidation activities; purchase accounting effects related to acquisitions, such as the adjustment of acquired inventory to fair value; acquisition and divestiture transaction costs; revenue and cost of sales deferrals for acquired product lines subject to software revenue recognition accounting requirements; severance and other restructuring costs; gains (losses) recognized on the disposal of businesses and tangible assets; amortization of intangible assets; gains (losses) on debt extinguishment; non-recurring tax benefits related to the settlement of a tax sharing agreement; and other 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 the adjusted results are useful to investors because they help them compare our results to previous periods and provide important insights into underlying trends in the business and how management oversees our business operations on a day-to-day basis. Adjusted results should be considered only in conjunction with results reported according to accounting principles generally accepted in the United States.
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
| (In thousands, except percentages and per share amounts) | ||||||||||||||||
| GAAP revenues |
$ | 509,751 | $ | 477,687 | $ | 2,069,193 | $ | 1,840,739 | ||||||||
| Deferred revenue adjustments |
6,127 | 3,482 | 15,297 | 6,272 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted revenues |
$ | 515,878 | $ | 481,169 | $ | 2,084,490 | $ | 1,847,011 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| GAAP gross profit |
$ | 175,039 | $ | 150,337 | $ | 704,429 | $ | 566,597 | ||||||||
| Deferred gross profit adjustments |
4,484 | 2,038 | 11,337 | 2,902 | ||||||||||||
| Severance and other restructuring costs |
2,078 | 44 | 7,124 | 6,482 | ||||||||||||
| Accelerated depreciation |
— | — | 4,861 | — | ||||||||||||
| Purchase accounting effects related to acquisitions |
— | 7,124 | 6,550 | 16,048 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted gross profit |
$ | 181,601 | $ | 159,543 | $ | 734,301 | $ | 592,029 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted gross profit margin |
35.2 | % | 33.2 | % | 35.2 | % | 32.1 | % | ||||||||
| GAAP operating income |
$ | 49,174 | $ | 31,603 | $ | 201,262 | $ | 108,497 | ||||||||
| Amortization of intangible assets |
12,395 | 9,647 | 50,803 | 22,792 | ||||||||||||
| Severance and other restructuring costs |
5,365 | 500 | 14,888 | 17,927 | ||||||||||||
| Deferred gross profit adjustments |
4,484 | 2,038 | 11,337 | 2,902 | ||||||||||||
| Accelerated depreciation |
— | — | 4,861 | — | ||||||||||||
| Asset impairment and loss on sale of assets |
— | 3,772 | — | 33,676 | ||||||||||||
| Purchase accounting effects related to acquisitions |
— | 7,563 | 6,550 | 18,782 | ||||||||||||
| Gain on sale of assets |
— | — | (1,278 | ) | — | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating income adjustments |
22,244 | 23,520 | 87,161 | 96,079 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted operating income |
$ | 71,418 | $ | 55,123 | $ | 288,423 | $ | 204,576 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted operating income margin |
13.8 | % | 11.5 | % | 13.8 | % | 11.1 | % | ||||||||
| GAAP income from continuing operations |
$ | 23,929 | $ | 39,478 | $ | 104,734 | $ | 43,236 | ||||||||
| Operating income adjustments from above |
22,244 | 23,520 | 87,161 | 96,079 | ||||||||||||
| Loss on debt extinguishment |
1,612 | 1,865 | 1,612 | 52,450 | ||||||||||||
| Tax benefit from Cooper tax sharing agreement |
— | (21,043 | ) | — | (21,043 | ) | ||||||||||
| Tax effect of adjustments |
(7,561 | ) | (8,523 | ) | (28,368 | ) | (42,092 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted income from continuing operations |
$ | 40,224 | $ | 35,297 | $ | 165,139 | $ | 128,630 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| GAAP income from continuing operations per diluted share |
$ | 0.54 | $ | 0.88 | $ | 2.34 | $ | 0.94 | ||||||||
| Adjusted income from continuing operations per diluted share |
$ | 0.91 | $ | 0.78 | $ | 3.69 | $ | 2.80 | ||||||||
| GAAP and Adjusted diluted weighted average shares |
44,214 | 45,028 | 44,737 | 45,942 | ||||||||||||
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: asset impairments; accelerated depreciation expense due to plant consolidation activities; purchase accounting effects related to acquisitions, such as the adjustment of acquired inventory to fair value; acquisition and divestiture transaction costs; revenue and cost of sales deferrals for acquired product lines subject to software revenue recognition accounting requirements; severance and other restructuring costs; gains (losses) recognized on the disposal of businesses and tangible assets; amortization of intangible assets; and other 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 the adjusted results are useful to investors because they help them compare our results to previous periods and provide important insights into underlying trends in the business and how management oversees our business operations on a day-to-day basis. Adjusted results should be considered only in conjunction with results reported according to accounting principles generally accepted in the United States.
| Three Months Ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||
| Broadcast Solutions |
Enterprise Connectivity Solutions |
Industrial Connectivity Solutions |
Industrial IT Solutions |
All Other | Total Segments | Eliminations | Income from equity method investment |
Consolidated | ||||||||||||||||||||||||||||
| (In thousands, except percentages) | ||||||||||||||||||||||||||||||||||||
| GAAP revenues |
$ | 165,701 | $ | 120,167 | $ | 165,022 | $ | 58,861 | $ | — | $ | 509,751 | $ | — | $ | — | $ | 509,751 | ||||||||||||||||||
| Deferred revenue adjustments |
6,127 | — | — | — | — | 6,127 | — | — | 6,127 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Adjusted revenues |
$ | 171,828 | $ | 120,167 | $ | 165,022 | $ | 58,861 | $ | — | $ | 515,878 | $ | — | $ | — | $ | 515,878 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| GAAP operating income |
$ | 4,199 | $ | 11,259 | $ | 20,843 | $ | 10,505 | $ | — | $ | 46,806 | $ | (1,269 | ) | $ | 3,637 | $ | 49,174 | |||||||||||||||||
| Amortization of intangible assets |
11,097 | 235 | 268 | 795 | — | 12,395 | — | — | 12,395 | |||||||||||||||||||||||||||
| Severance and other restructuring costs |
4,573 | 207 | 381 | 204 | — | 5,365 | — | — | 5,365 | |||||||||||||||||||||||||||
| Deferred gross profit adjustments |
4,484 | — | — | — | — | 4,484 | — | — | 4,484 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total operating income adjustments |
20,154 | 442 | 649 | 999 | — | 22,244 | — | — | 22,244 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Adjusted operating income |
$ | 24,353 | $ | 11,701 | $ | 21,492 | $ | 11,504 | $ | — | $ | 69,050 | $ | (1,269 | ) | $ | 3,637 | $ | 71,418 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Adjusted operating income margin |
14.2 | % | 9.7 | % | 13.0 | % | 19.5 | % | 13.4 | % | 13.8 | % | ||||||||||||||||||||||||
| Three Months Ended December 31, 2012 | ||||||||||||||||||||||||||||||||||||
| Broadcast Solutions |
Enterprise Connectivity Solutions |
Industrial Connectivity Solutions |
Industrial IT Solutions |
All Other | Total Segments | Eliminations | Income from equity method investment |
Consolidated | ||||||||||||||||||||||||||||
| (In thousands, except percentages) | ||||||||||||||||||||||||||||||||||||
| GAAP revenues |
$ | 115,379 | $ | 114,315 | $ | 167,497 | $ | 56,257 | $ | 24,239 | $ | 477,687 | $ | — | $ | — | $ | 477,687 | ||||||||||||||||||
| Deferred revenue adjustments |
3,482 | — | — | — | — | 3,482 | — | — | 3,482 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Adjusted revenues |
$ | 118,861 | $ | 114,315 | $ | 167,497 | $ | 56,257 | $ | 24,239 | $ | 481,169 | $ | — | $ | — | $ | 481,169 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| GAAP operating income (loss) |
$ | (3,958 | ) | $ | 7,709 | $ | 19,651 | $ | 8,866 | $ | (2,801 | ) | $ | 29,467 | $ | (314 | ) | $ | 2,450 | $ | 31,603 | |||||||||||||||
| Amortization of intangible assets |
8,438 | 189 | 271 | 749 | — | 9,647 | — | — | 9,647 | |||||||||||||||||||||||||||
| Purchase accounting effects related to acquisitions |
7,124 | 178 | 158 | 103 | — | 7,563 | — | — | 7,563 | |||||||||||||||||||||||||||
| Deferred gross profit adjustments |
2,038 | — | — | — | — | 2,038 | — | — | 2,038 | |||||||||||||||||||||||||||
| Severance and other restructuring costs |
500 | — | — | — | — | 500 | — | — | 500 | |||||||||||||||||||||||||||
| Asset impairment and loss on sale of assets |
— | — | — | — | 3,772 | 3,772 | — | — | 3,772 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total operating income adjustments |
18,100 | 367 | 429 | 852 | 3,772 | 23,520 | — | — | 23,520 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Adjusted operating income |
$ | 14,142 | $ | 8,076 | $ | 20,080 | $ | 9,718 | $ | 971 | $ | 52,987 | $ | (314 | ) | $ | 2,450 | $ | 55,123 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Adjusted operating income margin |
11.9 | % | 7.1 | % | 12.0 | % | 17.3 | % | 4.0 | % | 11.0 | % | 11.5 | % | ||||||||||||||||||||||
BELDEN INC.
RECONCILIATION OF NON-GAAP MEASURES
2014 REVENUE AND EARNINGS GUIDANCE
| Year Ended | Three Months Ended | |||
| December 31, 2014 | March 30, 2014 | |||
| Adjusted revenues |
$2.110 - $2.150 billion | $495 - $505 million | ||
| Deferred revenue adjustments |
($14 million) | ($4 million) | ||
|
|
| |||
| GAAP revenues |
$2.096 - $2.136 billion | $491 - $501 million | ||
|
|
| |||
| Adjusted income from continuing operations per diluted share |
$3.81 - $4.11 | $0.77 - $0.82 | ||
| Amortization of intangible assets |
($0.71) | ($0.18) | ||
| Deferred gross profit adjustments |
($0.15) | ($0.04) | ||
|
|
| |||
| GAAP income from continuing operations per diluted share |
$2.95 - $3.25 | $0.55 - $0.60 | ||
|
|
|
Our guidance for income from continuing operations per diluted share is based upon the extent of information currently available regarding events and conditions that will impact our future operating results for 2014. Our actual income from continuing operations per diluted share may be impacted by other additional events for which information is not available, such as asset impairments, purchase accounting effects related to acquisitions, severance and other restructuring costs, gains (losses) recognized on the disposal of tangible assets, gains (losses) on debt extinguishment, and other gains (losses) related to events or conditions that are not yet known. The guidance above excludes any impact of our anticipated acquisition of Grass Valley.