Belden Announces Record Adjusted Diluted EPS of $0.97 for Second Quarter

ST. LOUIS, July 24, 2008 /PRNewswire-FirstCall via COMTEX/ -- BDC | Quote | Chart | News | PowerRating -- Belden (NYSE: BDC), a leader in the design, manufacture, and marketing of signal transmission solutions for industrial automation, data networking, and a wide range of specialty electronics markets, today announced results of the second quarter ended June 29, 2008.

Second Quarter 2008 Results

In the quarter, revenue was $556.3 million and operating income was $65.9 million. Net income was $42.2 million, or $0.89 per diluted share. The quarter's revenue included $31.8 million of favorable currency translation.

During the quarter, Belden recorded a pre-tax $1.8 million pension settlement expense related to restructuring of its Canadian operations; severance charges and accelerated depreciation of $1.6 million pre-tax related to the previously announced plan to close a manufacturing plant in Manchester, Connecticut; charges of $0.9 million pre-tax associated with the restructuring of European and North American operations; and interest expense of $1.9 million pre-tax related to the unfavorable resolution of Canadian tax matters pertaining to Belden's 2004 merger with Cable Design Technologies. In the second quarter of 2007, the Company incurred pre-tax charges of $2.9 million in severance, asset impairment, and adjusted depreciation charges associated with restructuring activities in North America and $12.2 million in nonrecurring purchase accounting effects related to businesses acquired during the quarter.

Adjusted for these items, operating income in the second quarter increased 4.9 percent year over year to $70.1 million. As a percent of revenue, adjusted operating income was 12.6 percent in the second quarter of 2008, compared with 12.2 percent in the second quarter of 2007. Adjusted diluted income per share was $0.97 in the second quarter of 2008, a 22.8 percent increase from $0.79 in the second quarter of 2007. See the attached schedule, Adjusted Operating Results, for a reconciliation of GAAP results to adjusted results.

"An improved business portfolio and the successful execution of margin expansion initiatives drove our record performance," said John Stroup, President and Chief Executive Officer. "The business now reflects much better geographic diversification, an improved mix of connectivity and high-value networking products, and more emphasis on attractive vertical markets like industrial automation. We drove margin improvement through changes to our manufacturing footprint, our on-going management of the product portfolio, and the reduction of waste through the implementation of Lean Enterprise methods. Our strong results are attributable to a team focused on our strategic priorities, committed to creating sustainable processes, and dedicated to continuous improvement."

Outlook

"Despite an uncertain macroeconomic environment, we are reaffirming our full-year revenue and earnings outlook," said Mr. Stroup. "We continue to expect that our revenue will be in the range from $2.2 to $2.3 billion for 2008. We are also maintaining our outlook for operating margins, adjusted for restructuring and other charges including the amortization of short-lived intangible assets associated with our recent acquisition of Trapeze Networks, at 11 to 12 percent of revenue. Finally, we are maintaining our outlook for earnings per diluted share, similarly adjusted, at $3.15 to $3.35."

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, 2007, filed with the SEC on February 29, 2008. Belden disclaims any duty to update any forward looking statements as a result of new information, future developments, or otherwise.

About Belden

Sending All the Right Signals -- from industrial automation to data centers, from broadcast studios to aerospace, from cutting-edge wireless communications to consumer electronics, Belden people are committed to delivering the best signal transmission solutions in the world. Our 8,000 associates worldwide work in copper cable, fiber, wireless technology, connectors, switches and active components to bring voice, video and data to your mission-critical application. With 2007 revenue of $2.0 billion, Belden has manufacturing capability in North America, Europe and Asia. To obtain additional information contact Investor Relations at 314-854-8054, or visit our website at http://www.belden.com.

Contact: Belden Dee Johnson, Director of Investor Relations and Corporate Communications 314-854-8054 The following schedules are provided: -- Comparative condensed consolidated statements of operations for the three- and six-month periods ended June 29, 2008, and June 24, 2007. -- Segment results for the same periods. -- Comparative condensed consolidated cash flow statements for the six-month periods ended June 29, 2008, and June 24, 2007. -- Condensed consolidated balance sheets as of June 29, 2008, and December 31, 2007. -- A supplemental schedule of adjusted consolidated results for the quarter, year to date, and the prior-year comparable periods, excluding certain non-recurring severance charges, asset impairment, restructuring charges, adjusted depreciation and discrete tax items. BELDEN INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Six Months Ended June 29, June 24, June 29, June 24, 2008 2007 2008 2007 (In thousands, except per share data) Revenues $556,303 $549,943 $1,068,129 $886,646 Cost of sales (389,830) (398,743) (755,839) (644,757) Gross profit 166,473 151,200 312,290 241,889 Selling, general and administrative expenses (89,522) (92,475) (187,237) (144,378) Research and development (11,093) (5,126) (20,164) (5,272) Loss on sale of assets - - (884) - Asset impairment - (1,870) (11,549) (3,262) Operating income 65,858 51,729 92,456 88,977 Interest expense (10,528) (8,682) (18,347) (11,208) Interest income 1,875 1,740 2,832 4,483 Other income (expense) 1,986 571 3,154 (1,445) Income before taxes 59,191 45,358 80,095 80,807 Income tax expense (17,041) (15,254) (24,725) (28,689) Net income $42,150 $30,104 $55,370 $52,118 Weighted average number of common shares and equivalents: Basic 43,506 45,078 43,821 44,784 Diluted 47,478 50,920 47,926 51,289 Basic income per share $0.97 $0.67 $1.26 $1.16 Diluted income per share $0.89 $0.60 $1.16 $1.03 Dividends declared per share $0.05 $0.05 $0.10 $0.10 BELDEN INC. OPERATING SEGMENT INFORMATION (Unaudited) External Operating Customer Affiliate Total Income Three Months Ended June 29, 2008 Revenues Revenues Revenues (Loss) (In thousands) Belden Americas $200,063 $19,404 $219,467 $40,283 Specialty Products 59,652 18,238 77,890 10,171 EMEA 199,265 5,639 204,904 26,318 Asia Pacific 97,323 111 97,434 11,314 Total Segments 556,303 43,392 599,695 88,086 Finance and Administration - - - (12,327) Eliminations - (43,392) (43,392) (9,901) Total Continuing Operations $556,303 $- $556,303 $65,858 Three Months Ended June 24, 2007 Belden Americas $221,738 $18,419 $240,157 $42,353 Specialty Products 64,580 23,215 87,795 16,090 EMEA 176,339 5,033 181,372 5,953 Asia Pacific 87,286 - 87,286 6,793 Total Segments 549,943 46,667 596,610 71,189 Finance and Administration - - - (11,252) Eliminations - (46,667) (46,667) (8,208) Total Continuing Operations $549,943 $- $549,943 $51,729 Six Months Ended June 29, 2008 Belden Americas $386,341 $39,232 $425,573 $71,564 Specialty Products 113,084 36,583 149,667 3,089 EMEA 383,828 11,695 395,523 43,227 Asia Pacific 184,876 111 184,987 20,211 Total Segments 1,068,129 87,621 1,155,750 138,091 Finance and Administration - - - (26,223) Eliminations - (87,621) (87,621) (19,412) Total Continuing Operations $1,068,129 $- $1,068,129 $92,456 Six Months Ended June 24, 2007 Belden Americas $408,036 $29,697 $437,733 $76,661 Specialty Products 121,233 35,638 156,871 26,405 EMEA 258,287 7,741 266,028 9,755 Asia Pacific 99,090 - 99,090 8,320 Total Segments 886,646 73,076 959,722 121,141 Finance and Administration - - - (19,192) Eliminations - (73,076) (73,076) (12,972) Total Continuing Operations $886,646 $- $886,646 $88,977 BELDEN INC. CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (Unaudited) Six Months Ended June 29, 2008 June 24, 2007 (In thousands) Cash flows from operating activities: Net income $55,370 $52,118 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 27,503 25,312 Asset impairment 11,549 3,262 Pension funding in excess of pension expense (3,339) (2,200) Share-based compensation 7,292 4,314 Provision for inventory obsolescence 4,132 4,872 Loss (gain) on disposal of tangible assets 884 (164) Excess tax benefits related to share-based compensation (1,141) (6,914) Changes in operating assets and liabilities, net of the effects of acquisitions and currency exchange rate changes: Receivables (21,827) (28,652) Inventories (3,746) 6,734 Accounts payable and accrued liabilities 513 64,421 Accrued taxes 3,313 11,931 Other assets (8,053) (3,571) Other liabilities 2,125 (15,119) Net cash provided by operating activities 74,575 116,344 Cash flows from investing activities: Cash used to invest in and acquire businesses (7,891) (571,356) Proceeds from disposal of tangible assets 40,249 7,608 Capital expenditures (18,185) (28,132) Net cash provided by (used in) investing activities 14,173 (591,880) Cash flows from financing activities: Proceeds from exercise of stock options 5,171 28,994 Excess tax benefits related to share-based compensation 1,141 6,914 Payments under share repurchase program (68,336) - Cash dividends paid (4,458) (4,626) Debt issuance costs - (10,212) Borrowings under credit arrangements - 530,000 Payments under borrowing arrangements - (242,000) Net cash provided by (used in) financing activities (66,482) 309,070 Effect of foreign currency exchange rate changes on cash and cash equivalents 7,436 2,411 Increase (decrease) in cash and cash equivalents 29,702 (164,055) Cash and cash equivalents, beginning of period 159,964 254,151 Cash and cash equivalents, end of period $189,666 $90,096 BELDEN INC. CONDENSED CONSOLIDATED BALANCE SHEETS June 29, 2008 December 31, 2007 (Unaudited) (In thousands) ASSETS Current assets: Cash and cash equivalents $189,666 $159,964 Receivables 393,385 373,108 Inventories, net 260,472 257,540 Deferred income taxes 21,540 28,578 Other current assets 25,388 17,392 Total current assets 890,451 836,582 Property, plant and equipment, less accumulated depreciation 326,835 369,803 Goodwill 712,395 648,882 Intangible assets, less accumulated amortization 154,875 154,786 Other long-lived assets 66,357 58,796 $2,150,913 $2,068,849 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $380,484 $350,047 Current maturities of long-term debt 110,000 110,000 Total current liabilities 490,484 460,047 Long-term debt 350,000 350,000 Postretirement benefits 103,229 98,084 Deferred income taxes 64,486 78,140 Other long-term liabilities 14,797 9,915 Stockholders' equity: Common stock 503 503 Additional paid-in capital 646,269 638,690 Retained earnings 529,757 478,776 Accumulated other comprehensive income 153,442 93,198 Treasury stock (202,054) (138,504) Total stockholders' equity 1,127,917 1,072,663 $2,150,913 $2,068,849 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, and in-process research and development charges), severance charges, adjusted depreciation, asset impairment, gains (losses) recognized on the disposal of certain tangible assets, 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 June 29, 2008 Reported Adjustments Adjusted (In thousands, except percentages and per share amounts) Revenues $556,303 $- $556,303 Gross profit $166,473 $2,286 $168,759 as a percent of revenues 29.9% 30.3% Operating income $65,858 $4,276 $70,134 as a percent of revenues 11.8% 12.6% Net income $42,150 $3,675 $45,825 as a percent of revenues 7.6% 8.2% Net income per diluted share $0.89 $0.08 $0.97 Three Months Ended June 24, 2007 Revenues $549,943 $- $549,943 Gross profit $151,200 $9,266 $160,466 as a percent of revenues 27.5% 29.2% Operating income $51,729 $15,119 $66,848 as a percent of revenues 9.4% 12.2% Net income $30,104 $9,921 $40,025 as a percent of revenues 5.5% 7.3% Net income per diluted share $0.60 $0.19 $0.79 Adjustments for the three months ended June 29, 2008 included pre-tax charges for pension settlements, severance, and adjusted depreciation of $1.8 million, $1.5 million, and $0.7 million, respectively, and a $0.3 million pre-tax loss on the disposal of certain tangible assets. Adjustments for the three months ended June 24, 2007 included pre-tax purchase accounting effects for acquisitions, asset impairment, adjusted depreciation, and severance and other restructuring costs of $12.2 million, $1.9 million, $0.8 million, and $0.2 million, respectively. As Six Months Ended June 29, 2008 Reported Adjustments Adjusted (In thousands, except percentages and per share amounts) Revenues $1,068,129 $- $1,068,129 Gross profit $312,290 $6,242 $318,532 as a percent of revenues 29.2% 29.8% Operating income $92,456 $28,964 $121,420 as a percent of revenues 8.7% 11.4% Net income $55,370 $22,638 $78,008 as a percent of revenues 5.2% 7.3% Net income per diluted share $1.16 $0.47 $1.63 Six Months Ended June 24, 2007 Revenues $886,646 $- $886,646 Gross profit $241,889 $10,809 $252,698 as a percent of revenues 27.3% 28.5% Operating income $88,977 $18,392 $107,369 as a percent of revenues 10.0% 12.1% Net income $52,118 $12,436 $64,554 as a percent of revenues 5.9% 7.3% Net income per diluted share $1.03 $0.25 $1.28 Adjustments for the six months ended June 29, 2008 included pre-tax charges for asset impairment, severance associated with the Voluntary Separation Program, pension settlements, adjusted depreciation, and severance and other restructuring costs of $11.5 million, $6.5 million, $1.8 million, $0.7 million, and $7.1 million, respectively, and a $1.4 million pre-tax loss on the disposal of certain tangible assets. Adjustments for the six months ended June 24, 2007 included pre-tax purchase accounting effects for acquisitions, asset impairment, severance, and adjusted depreciation of $12.2 million, $3.3 million, $1.2 million, and $1.7 million, respectively.

SOURCE Belden

http://www.belden.com

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