Adjusted Earnings up 10% on Solid Operating Results in Third Quarter 2012

Adjusted Earnings up 10% on Solid Operating Results in Third Quarter 2012

ST. LOUIS--(BUSINESS WIRE)-- Belden Inc. (NYS: BDC) , a global leader in signal transmission solutions for mission-critical applications, today reported third quarter 2012 results for the period ended September 30, 2012.

Third Quarter Highlights

  • Achieved record adjusted gross profit margins of 33.1%, increasing 370 basis points from 29.4% in the year-ago period;

  • Improved adjusted operating profit margins to 12.1%, increasing 150 basis points from 10.6% in the year-ago period;

  • Generated $54 million of free cash flow, increasing cash and cash equivalents to $386 million;

  • Purchased 655,017 shares of Belden common stock for $25.0 million during the quarter, bringing the total program-to-date shares retired to 3.71 million under the previously announced share repurchase program; and

  • Updated guidance for full year 2012 adjusted revenue of $1.94 - $1.95 billion and increased the low end of the range of adjusted income from continuing operations per diluted share to $3.00 - $3.05.


Third Quarter Results
Revenue for the quarter totaled $490.4 million, up 1% compared to $484.0 million in the second quarter 2012. A loss from continuing operations of $1.14 per diluted share included recent debt refinancing costs of $0.76 per share, impairment charges of $0.57 per share primarily resulting from the pending consumer electronics asset sale, restructuring charges of $0.27 per share, purchase accounting effects related to acquisitions of $0.19 per share, and amortization of intangibles of $0.12 per share.

Adjusted revenue for the quarter totaled $493.2 million, up 2% compared to $484.0 million in the second quarter 2012. Adjusted income from continuing operations per diluted share for the quarter totaled $0.77, compared to $0.70 per diluted share in the third quarter 2011.

John Stroup, President and CEO of Belden Inc., commented, "I am proud of our third quarter results, including record adjusted gross profit margins and strong free cash flow generation. Our ability to perform well in this weakened macro-economic climate is the result of our stronger portfolio and unique business system that is proving effective in a variety of business environments. Additionally, we believe the strategic actions discussed on our second quarter earnings call put us in a better position to execute well for the remainder of the year."

Outlook
For the full year 2012, the Company expects adjusted revenues to be $1.94 - $1.95 billion and adjusted income from continuing operations per diluted share to be $3.00 - $3.05.

"Clearly, the weak demand environment presents challenges and the uncertainty affects our visibility. We believe this climate is likely to continue, therefore we'll focus on driving improvements to the business through the implementation of our strategic plan. Despite these pressures, we remain committed to our full year EPS guidance. We expect our fourth quarter 2012 adjusted revenues to be $500 - $510 million and adjusted income from continuing operations per diluted share to be $0.72 - $0.77," said Mr. Stroup.

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 website at http://investor.belden.com.

Adjusted results exclude certain items, including asset impairments, purchase accounting effects related to acquisitions, revenue and cost of sales deferrals, severance and other restructuring costs, gains (losses) recognized on the disposal of tangible assets, amortization of intangible assets, gains (losses) on debt extinguishment, and other costs.

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 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 website for a limited time.

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, 2011, filed with the SEC on February 29, 2012. 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 7,400 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.

BELDEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

Three Months Ended

Nine Months Ended

September 30, 2012

October 2, 2011

September 30, 2012

October 2, 2011

(In thousands, except per share data)

Revenues

$

490,367

$

519,713

$

1,438,700

$

1,517,592

Cost of sales

(343,593

)

(366,962

)

(998,287

)

(1,077,772

)

Gross profit

146,774

152,751

440,413

439,820

Selling, general and administrative expenses

(100,120

)

(85,355

)

(261,277

)

(244,671

)

Research and development

(19,020

)

(13,641

)

(48,082

)

(41,800

)

Amortization of intangibles

(7,798

)

(3,371

)

(13,603

)

(10,397

)

Income from equity method investment

2,553

1,479

7,254

9,196

Asset impairment

(29,998

)

-

(29,998

)

-

Operating income (loss)

(7,609

)

51,863

94,707

152,148

Interest expense

(13,892

)

(11,690

)

(38,315

)

(36,246

)

Interest income

171

211

733

526

Loss on debt extinguishment

(50,585

)

-

(50,585

)

-

Income (loss) from continuing operations before taxes

(71,915

)

40,384

6,540

116,428

Income tax benefit (expense)

20,781

(9,019

)

8,991

(28,164

)

Income (loss) from continuing operations

(51,134

)

31,365

15,531

88,264

Gain from disposal of discontinued operations, net of tax

9,783

-

9,783

-

Income (loss) from discontinued operations, net of tax

2,574

(162

)

2,574

(446

)

Net income (loss)

$

(38,777

)

$

31,203

$

27,888

$

87,818

Weighted average number of common

shares and equivalents:

Basic

44,787

47,344

45,410

47,317

Diluted

44,787

48,244

46,249

48,329

Basic income (loss) per share:

Continuing operations

$

(1.14

)

$

0.66

$

0.34

$

1.87

Disposal of discontinued operations

0.22

-

0.22

-

Discontinued operations

0.05

-

0.05

(0.01

)

Net income

$

(0.87

)

$

0.66

$

0.61

$

1.86

Diluted income (loss) per share:

Continuing operations

$

(1.14

)

$

0.65

$

0.34

$

1.83

Disposal of discontinued operations

0.22

-

0.21

-

Discontinued operations

0.05

-

0.05

(0.01

)

Net income

$

(0.87

)

$

0.65

$

0.60

$

1.82

Comprehensive income (loss)

$

(24,687

)

$

4,134

$

24,366

$

91,108

Dividends declared per share

$

0.05

$

0.05

$

0.15

$

0.15

BELDEN INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2012

December 31, 2011

(Unaudited)

(In thousands)

ASSETS

Current assets:

Cash and cash equivalents

$

385,639

$

382,716

Receivables, net

299,936

299,070

Inventories, net

208,478

202,143

Deferred income taxes

15,648

19,660

Income tax receivable

21,471

-

Other current assets

18,977

21,832

Current assets held for sale

52,829

-

Total current assets

1,002,978

925,421

Property, plant and equipment, less accumulated depreciation

290,815

286,933

Goodwill

516,424

348,032

Intangible assets, less accumulated amortization

290,153

151,683

Deferred income taxes

-

12,219

Other long-lived assets

75,229

63,832

$

2,175,599

$

1,788,120

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

231,477

$

227,571

Accrued liabilities

144,598

153,995

Current maturities of long-term debt

12,770

-

Current liabilities held for sale

20,664

-

Total current liabilities

409,509

381,566

Long-term debt

959,762

550,926

Postretirement benefits

132,731

131,237

Deferred income taxes

118

-

Other long-term liabilities

24,598

29,842

Stockholders' equity:

Common stock

503

503

Additional paid-in capital

595,640

601,484

Retained earnings

297,382

276,363

Accumulated other comprehensive loss

(26,231

)

(22,709

)

Treasury stock

(218,413

)

(161,092

)

Total stockholders' equity

648,881

694,549

$

2,175,599

$

1,788,120