Belden Earnings up 38% on Strong Revenue Growth in Third Quarter 2011

News provided by

Belden Inc.

Oct 27, 2011, 07:30 ET

ST. LOUIS, Oct. 27, 2011 /PRNewswire/ -- Belden Inc. (NYSE: BDC), a global leader in signal transmission solutions for mission-critical applications, today reported fiscal third quarter 2011 results for the period ended October 2, 2011.

Third Quarter Highlights

  • Increased income from continuing operations per diluted share to $0.65, up 38% over $0.47 per diluted share in the third quarter 2010;
  • Grew revenue 31% year-over-year to $519.7 million, and 18%, excluding acquisitions and currency effects;
  • Generated $61.4 million in free cash flow, increasing cash and cash equivalents to $348.2  million at quarter-end;
  • Purchased 867,000 shares of Belden common stock for $25 million under the previously announced share repurchase program; and
  • Narrowed the range of full-year guidance for fiscal 2011 to revenues of $2.01 – $2.02 billion and income from continuing operations per diluted share of $2.33 – $2.38.

Third Quarter Results
Revenue for the quarter totaled $519.7 million, up $122.8 million or 31% compared to $396.9 million in the third quarter 2010. Income from continuing operations per diluted share for the quarter totaled $0.65, compared to $0.47 per diluted share in the third quarter 2010.  

John Stroup, President and CEO of Belden Inc., commented, "I am extremely pleased with our third quarter results.  Our ability to achieve 18% organic growth and 38% earnings growth in today's economic environment is a testament to the improvements we have made to our business system and portfolio.  In addition, our cash flow generation was exceptional.  This is due, in part, to the traction made with our lean initiatives in our recently acquired companies."

Outlook
"Despite a strong third quarter, our September order rates appeared to reflect increased caution among many of our customers and channel partners.  Volatility in commodity prices and concerns regarding the economic state of most developed countries could translate into lower growth rates and reduced customer inventory levels.  Therefore, we expect our fourth quarter 2011 revenues to be $490 – $500 million and income from continuing operations per diluted share to be $0.50 - $0.55," said Mr. Stroup.

For the full year 2011, the Company expects revenues to be $2.01 - $2.02 billion and income from continuing operations per diluted share to be $2.33 - $2.38.

Earnings Conference Call
Management will host a conference call today at 10:30 a.m. Eastern to discuss results of the quarter. The listen-only audio of the conference call will be broadcast live via the Internet at http://investor.belden.com. The dial-in number for participants in the U.S. is 866-304-1238; the dial-in number for participants outside the U.S. is 913-312-6650. A replay of this conference call will remain accessible in the investor relations section of the Company's Web site for a limited time.

Use of Non-GAAP Financial Information
Non-GAAP measures reflect certain adjustments the Company makes to provide insight into operating results. All GAAP to non-GAAP reconciliations accompany the consolidated financial statements included in this release and have been published to the investor relations section of the Company's Web site at http://investor.belden.com.

Forward Looking Statements
Statements in this release other than historical facts are "forward looking statements" made in reliance upon the safe harbor of the Private Securities Litigation Reform Act of 1995. Forward looking statements include any statements regarding future revenues, costs and expenses, operating income, earnings per share, margins, cash flows, dividends, and capital expenditures. These forward looking statements are based on forecasts and projections about the markets and industries served by the Company and about general economic conditions. They reflect management's beliefs and expectations. They are not guarantees of future performance and they involve risk and uncertainty. The Company's actual results may differ materially from these expectations. Changes in the global economy may impact the Company's results. Turbulence in financial markets may increase the Company's borrowing costs. Additional factors that may cause actual results to differ from the Company's expectations include: the Company's reliance on key distributors in marketing products; the Company's ability to execute and realize the expected benefits from strategic initiatives (including revenue growth, cost control, and productivity improvement programs); changes in the level of economic activity in the Company's major geographic markets; difficulties in realigning manufacturing capacity and capabilities among the Company's global manufacturing facilities; the competitiveness of the global cable, connectivity and networking industries; 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. For a more complete discussion of risk factors, please see our Annual Report on Form 10-K for the year ended December 31, 2010, filed with the SEC on February 25, 2011. Belden disclaims any duty to update any forward looking statements as a result of new information, future developments, or otherwise.

About Belden
St. Louis-based Belden Inc. designs, manufactures, and markets cable, connectivity, and networking products in markets including industrial automation, enterprise, transportation, infrastructure, and consumer electronics. It has approximately 6,800 employees, and provides value for industrial automation, enterprise, education, healthcare, entertainment and broadcast, sound and security, transportation, infrastructure, consumer electronics and other industries. Belden has manufacturing capabilities in North America, South America, Europe, and Asia, and a market presence in nearly every region of the world. Belden was founded in 1902, and today is a leader with some of the strongest brands in the signal transmission industry. For more information, visit www.belden.com.

Contact:
             Belden Investor Relations
             314-854-8054
             [email protected]

BELDEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)




















Three Months Ended

Nine Months Ended


October 2, 2011

October 3, 2010

October 2, 2011

October 3, 2010


(In thousands, except per share data)









Revenues

$           519,713

$           396,927

$        1,517,592

$        1,191,914

Cost of sales

(366,962)

(278,743)

(1,077,772)

(846,016)

     Gross profit

152,751

118,184

439,820

345,898

Selling, general and administrative expenses

(85,355)

(66,164)

(244,671)

(203,306)

Research and development

(13,641)

(10,887)

(41,800)

(31,106)

Amortization of intangibles

(3,371)

(2,600)

(10,397)

(7,900)

Income from equity method investment

1,479

3,053

9,196

8,905

     Operating income


51,863

41,586

152,148

112,491

Interest expense

(11,690)

(11,778)

(36,246)

(38,910)

Interest income

211

80

526

398

Other income


-

-

-

1,465

     Income from continuing operations before taxes


40,384

29,888

116,428

75,444

Income tax expense

(9,019)

(7,244)

(28,164)

(16,885)

     Income from continuing operations

31,365

22,644

88,264

58,559

Loss from discontinued operations, net of tax

(162)

(2,039)

(446)

(6,535)

     Net income


$             31,203

$             20,605

$             87,818

$             52,024


















Weighted average number of common







   shares and equivalents:







   Basic

47,344

46,813

47,317

46,762

   Diluted

48,244

47,721

48,329

47,665









Basic income (loss) per share:







   Continuing operations

$                 0.66

$                 0.48

$                 1.87

$                 1.25

   Discontinued operations

-

(0.04)

(0.01)

(0.14)

   Net income


$                 0.66

$                 0.44

$                 1.86

$                 1.11









Diluted income (loss) per share:







   Continuing operations

$                 0.65

$                 0.47

$                 1.83

$                 1.23

   Discontinued operations

-

(0.04)

(0.01)

(0.14)

   Net income


$                 0.65

$                 0.43

$                 1.82

$                 1.09









Dividends declared per share

$                 0.05

$                 0.05

$                 0.15

$                 0.15

BELDEN INC.

OPERATING SEGMENT INFORMATION

(Unaudited)


































Total



Three Months Ended October 2, 2011

Americas

EMEA

Asia Pacific

Segments

Eliminations

Total


(In thousands)

External customer revenues

$ 325,248

$103,713

$      90,752

$   519,713

$               -

$    519,713

Affiliate revenues

9,919

30,795

159

40,873

(40,873)

-

Total revenues

$ 335,167

$134,508

$      90,911

$   560,586

$      (40,873)

$    519,713













Operating income

$   39,636

$  22,767

$        6,980

$     69,383

$      (17,520)

$      51,863







































Three Months Ended October 3, 2010











External customer revenues

$ 232,133

$  90,397

$      74,397

$   396,927

$               -

$    396,927

Affiliate revenues

11,735

20,707

-

32,442

(32,442)

-

Total revenues

$ 243,868

$111,104

$      74,397

$   429,369

$      (32,442)

$    396,927













Operating income

$   30,474

$  14,850

$        8,629

$     53,953

$      (12,367)

$      41,586




















































Nine Months Ended October 2, 2011














External customer revenues

$ 927,978

$322,901

$    266,713

$1,517,592

$               -

$ 1,517,592

Affiliate revenues

33,462

80,943

658

115,063

(115,063)

-

Total revenues

$ 961,440

$403,844

$    267,371

$1,632,655

$    (115,063)

$ 1,517,592













Operating income

$ 111,587

$  63,334

$      22,581

$   197,502

$      (45,354)

$    152,148







































Nine Months Ended October 3, 2010











External customer revenues

$ 686,985

$273,140

$    231,789

$1,191,914

$               -

$ 1,191,914

Affiliate revenues

36,605

53,330

62

89,997

(89,997)

-

Total revenues

$ 723,590

$326,470

$    231,851

$1,281,911

$      (89,997)

$ 1,191,914













Operating income

$   81,315

$  41,152

$      22,172

$   144,639

$      (32,148)

$    112,491

BELDEN INC.







SUPPLEMENTAL PRODUCT GROUP INFORMATION







(Unaudited)


































Three Months Ended October 2, 2011

Americas

EMEA

Asia Pacific

Total


(In thousands)

Cable products

$ 253,855

$  39,547

$      72,565

$   365,967

Networking products

26,813

38,445

14,104

79,362

Connectivity products

44,580

25,721

4,083

74,384

Total revenues

$ 325,248

$103,713

$      90,752

$   519,713


















Three Months Ended October 3, 2010







Cable products

$ 198,042

$  36,584

$      61,786

$   296,412

Networking products

16,283

29,139

8,288

53,710

Connectivity products

17,808

24,674

4,323

46,805

Total revenues

$ 232,133

$  90,397

$      74,397

$   396,927


















Nine Months Ended October 2, 2011










Cable products

$ 719,787

$129,386

$    214,419

$1,063,592

Networking products

81,290

111,118

39,743

232,151

Connectivity products

126,901

82,397

12,551

221,849

Total revenues

$ 927,978

$322,901

$    266,713

$1,517,592


















Nine Months Ended October 3, 2010







Cable products

$ 590,441

$114,430

$    195,298

$   900,169

Networking products

44,731

87,463

24,736

156,930

Connectivity products

51,813

71,247

11,755

134,815

Total revenues

$ 686,985

$273,140

$    231,789

$1,191,914

BELDEN INC.

CONDENSED CONSOLIDATED BALANCE SHEETS









October 2, 2011

December 31, 2010




(Unaudited)





(In thousands)

ASSETS

Current assets:




Cash and cash equivalents

$           348,190

$                  358,653

Receivables, net

349,247

298,266

Inventories, net

197,100

175,659

Deferred income taxes

9,659

9,473

Other current assets

21,847

18,804







Total current assets

926,043

860,855







Property, plant and equipment, less accumulated depreciation

283,992

278,866

Goodwill

352,847

322,556

Intangible assets, less accumulated amortization

156,396

143,820

Deferred income taxes

20,997

27,565

Other long-lived assets

70,377

62,822











$        1,810,652

$               1,696,484








LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:




Accounts payable

$           233,989

$                  212,084

Accrued liabilities

166,529

145,840







Total current liabilities

400,518

357,924







Long-term debt

550,955

551,155

Postretirement benefits

116,926

112,426

Other long-term liabilities

32,539

36,464

Stockholders’ equity:




Common stock

503

503

Additional paid-in capital

599,014

595,519

Retained earnings

252,185

171,568

Accumulated other comprehensive loss

(5,629)

(8,919)

Treasury stock

(136,359)

(120,156)







Total stockholders’ equity



709,714

638,515











$        1,810,652

$               1,696,484

BELDEN INC.

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS

(Unaudited)





Nine Months Ended  

October 2, 2011

October 3, 2010

(In thousands)

Cash flows from operating activities:


   Net income

$             87,818

$             52,024

   Adjustments to reconcile net income to net cash provided by operating activities:




       Depreciation and amortization

37,676

41,525

       Share-based compensation

8,380

9,539

       Pension funding less than (greater than) pension expense

2,782

(5,753)

       Provision for inventory obsolescence

1,285

2,924

       Non-cash loss on derivatives and hedging instruments

-

2,893

       Tax deficiency (benefit) related to share-based compensation

(1,802)

239

       Income from equity method investment

(9,196)

(8,905)

       Changes in operating assets and liabilities, net of the effects of currency exchange
         rate changes and acquired businesses:                                                          


           Receivables

(42,184)

(51,874)

           Inventories

(16,953)

(20,898)

           Accounts payable

15,141

34,288

           Accrued liabilities

6,301

(4,519)

           Accrued taxes

17,850

(1,295)

           Other assets

(87)

16,234

           Other liabilities

(7,549)

(11,011)

               Net cash provided by operating activities

99,462

55,411




Cash flows from investing activities:


   Cash used to acquire businesses, net of cash acquired

(59,708)

-

   Capital expenditures

(21,760)

(19,198)

   Proceeds from disposal of tangible assets

1,206

2,332

   Cash provided by other investing activities

-

163

               Net cash used for investing activities

(80,262)

(16,703)




Cash flows from financing activities:


   Payments under share repurchase program

(25,000)

-

   Cash dividends paid

(7,090)

(7,052)

   Debt issuance costs

(3,296)

-

   Tax benefit (deficiency) related to share-based compensation

1,802

(239)

   Proceeds from exercise of stock options

4,554

720

   Cash received upon termination of derivative instruments

-

4,217

   Payments under borrowing arrangements

-

(46,268)

               Net cash used for financing activities

(29,030)

(48,622)




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

(633)

(2,884)




Decrease in cash and cash equivalents

(10,463)

(12,798)

Cash and cash equivalents, beginning of period

358,653

308,879

Cash and cash equivalents, end of period

$           348,190

$           296,081




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 less capital expenditures, net of proceeds from the disposal of tangible assets.  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

Three Months Ended

Nine Months Ended

Nine Months Ended


October 2, 2011

October 3, 2010

October 2, 2011

October 3, 2010


(In thousands)

GAAP net cash provided by operating activities

$                        68,312

$                        49,898

$                     99,462

$                     55,411

Capital expenditures, net of proceeds from









the disposal of tangible assets

(6,893)

(6,493)

(20,554)

(16,866)

Non-GAAP free cash flow

$                        61,419

$                        43,405

$                     78,908

$                     38,545

SOURCE Belden Inc.

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