Belden Reports Strong Results in First Quarter 2013

Belden Reports Strong Results in First Quarter 2013

ST. LOUIS--(BUSINESS WIRE)-- Belden Inc. (NYS: BDC) , a global leader in signal transmission solutions for mission-critical applications, today reported fiscal first quarter 2013 results for the period ended March 31, 2013.

First Quarter Highlights

  • Grew revenue by 15.4% year-over-year;
  • Improved adjusted operating income margin to 13.1%, increasing 400 basis points from 9.1% in the year-ago period;
  • Increased adjusted income from continuing operations per diluted share to $0.84, up 82.6% over last year's $0.46 per diluted share;
  • Purchased 612,982 shares of Belden common stock for $31.25 million during the quarter, bringing the total program-to-date shares repurchased to 4.32 million shares under both the previously announced program and recently announced extension, and
  • Raised full-year guidance for fiscal 2013 adjusted income from continuing operations per diluted share to $3.49 - $3.69.

First Quarter 2013

Revenue for the quarter totaled $507.5 million, up $67.9 million, or 15.4%, compared to $439.6 million in the first quarter 2012. Operating income margin in the first quarter was 8.7%, increasing 30 basis points from 8.4% in the year-ago period. Income from continuing operations per diluted share totaled $0.49, compared to $0.42 in the first quarter 2012, a year-over-year increase of 16.7%.

Adjusted revenue for the quarter totaled $510.4 million, up $70.8 million, or 16.1%, compared to $439.6 million in the first quarter 2012. On an organic basis, revenue was down slightly compared to the same period last year. Adjusted income from continuing operations per diluted share totaled $0.84, compared to $0.46 in the first quarter 2012, an increase of 82.6%. A non-GAAP reconciliation table is provided as an appendix to this release.

John Stroup, President and CEO of Belden Inc., said, "We're pleased with our strong start to the year. As expected, our two industrial platforms performed well in the quarter, and they more than offset demand weakness in our European and enterprise markets. Year-over-year operating income margin expansion is a clear highlight and a direct result of our business transformation and commitment to continuous improvement."

Outlook

"Although the global macroeconomic environment has proven challenging and difficult to predict, we feel confident that our portfolio, business system, and focus on execution provide a level of stability and predictability. Therefore, we are increasing our earnings outlook for the full year," said Mr. Stroup.

Belden is now organized around four new global business segments: Broadcast, Enterprise Connectivity, Industrial Connectivity, and Industrial IT. Management believes that this will allow the Company to better execute its strategic plan, which includes the Market Delivery System and Lean Enterprise.

The Company expects second quarter 2013 revenues to be $530 - $540 million and adjusted income from continuing operations per diluted share to be $0.90 - $0.95. For the full year ending December 31, 2013, the Company expects revenues to be $2.07 - $2.12 billion and adjusted income from continuing operations per diluted share to be $3.49 - $3.69.

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.

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.

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 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. 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.

About Belden

Belden Inc., a global leader in high quality, end-to-end signal transmission solutions, delivers a comprehensive product portfolio designed to meet the mission-critical network infrastructure needs of industrial, enterprise and broadcast markets. With innovation solutions targeted at reliable and secure transmission of rapidly growing 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; follow us on Twitter @BeldenInc.

 
 
 
 
 
BELDEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME
(Unaudited)
    
 
Three Months Ended
March 31, 2013April 1, 2012
(In thousands, except per share amounts)
 
Revenues$507,473$439,600
Cost of sales (340,120) (306,801)
Gross profit167,353132,799
Selling, general and administrative expenses(91,982)(81,522)
Research and development(20,425)(13,808)
Amortization of intangibles(12,977)(3,084)
Income from equity method investment 2,271  2,741 
Operating income44,24037,126
Interest expense(15,905)(11,919)
Interest income 108  351 
Income from continuing operations before taxes28,44325,558
Income tax expense (6,198) (5,819)
Income from continuing operations22,24519,739
Income from discontinued operations, net of tax -  4,536 
Net income$22,245 $24,275 
 
Weighted average number of common shares and equivalents:
Basic44,42045,912
Diluted45,42746,938
 
Basic income per share
Continuing operations$0.50$0.43
Discontinued operations -  0.10 
Net income$0.50 $0.53 
 
Diluted income per share
Continuing operations$0.49$0.42
Discontinued operations -  0.10 
Net income$0.49 $0.52 
 
Comprehensive income$14,892 $34,901 
 
Dividends declared per share$0.05$0.05
 
 
 
 
 
 
BELDEN INC.
OPERATING SEGMENT INFORMATION
(Unaudited)
    
 
Three months ended
March 31, 2013April 1, 2012
External customer revenues:(In thousands)
Broadcast Solutions$155,586$70,057
Enterprise Connectivity Solutions116,627124,352
Industrial Connectivity Solutions176,721169,633
Industrial IT Solutions58,53950,882
All other -  24,676 
Consolidated$507,473 $439,600 
 
Operating income (loss):
Broadcast Solutions$(146)$1,168
Enterprise Connectivity Solutions8,8359,752
Industrial Connectivity Solutions24,44918,973
Industrial IT Solutions9,5175,713
All other -  (542)
Total segments42,65535,064
Eliminations(686)(679)
Income from equity method investment 2,271  2,741 
Consolidated$44,240 $37,126 
 
 
 
 
 
 
BELDEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
    
March 31, 2013December 31, 2012
(Unaudited)
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents$469,406$395,095
Receivables, net301,400300,864
Inventories, net219,068215,282
Deferred income taxes17,90319,885
Other current assets 23,013  28,456 
 
Total current assets1,030,790959,582
 
Property, plant and equipment, less accumulated depreciation302,767307,048
Goodwill778,989778,708
Intangible assets, less accumulated amortization417,390428,273
Deferred income taxes45,74546,970
Other long-lived assets 72,298  64,002 
 
$2,647,979 $2,584,583 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$191,376$183,672
Accrued liabilities138,287166,272
Current maturities of long-term debt15,32815,678
Current liabilities of discontinued operations -  86,860 
 
Total current liabilities344,991452,482
 
Long-term debt1,317,9971,135,527
Postretirement benefits140,690144,320
Other long-term liabilities41,84240,394
Stockholders' equity:
Common stock503503
Additional paid-in capital593,010598,180
Retained earnings481,750461,756
Accumulated other comprehensive loss(37,918)(30,565)
Treasury stock (234,886) (218,014)
 
Total stockholders' equity 802,459  811,860 
 
$2,647,979 $2,584,583 
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BELDEN INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
   
Three Months Ended
March 31, 2013April 1, 2012
(In thousands)
Cash flows from operating activities:
Net income$22,245$24,275
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Depreciation and amortization22,54612,157
Share-based compensation3,4192,977
Provision for inventory obsolescence4742,491
Pension funding less than pension expense798756
Income from equity method investment(2,271)(2,741)
Tax benefit related to share-based compensation(4,227)(4,119)

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

Receivables(9,785)11,904
Inventories(2,723)(4)
Accounts payable5,520(5,634)
Accrued liabilities(30,347)(30,141)