Belden Reports Solid Results in Second Quarter 2013

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Belden Reports Solid Results in Second Quarter 2013

ST. LOUIS--(BUSINESS WIRE)-- Belden Inc. (NYS: BDC) , a global leader in high quality, end-to-end signal transmission solutions for mission-critical applications, today reported fiscal second quarter 2013 results for the period ended June 30, 2013.

Second Quarter Highlights

  • Increased adjusted income from continuing operations per diluted share to $0.99, up 11.2% over last year's $0.89 per diluted share;
  • Expanded adjusted gross margin to 35.2% on adjusted revenues of $532.6 million, increasing 360 basis points from 31.6% in the year-ago period;
  • Grew adjusted operating income margin to 14.2%, increasing 210 basis points from 12.1% in the year-ago period;
  • Purchased 584,198 shares of Belden common stock for $31.25 million during the quarter; and
  • Raised the midpoint of full-year guidance for fiscal 2013 adjusted revenue to $2.09 - $2.12 billion and adjusted income from continuing operations per diluted share to $3.54 - $3.69.

Second Quarter 2013

Revenue for the quarter totaled $529.5 million, up $71.3 million, or 15.6%, compared to $458.2 million in the second quarter 2012. Gross margin in the second quarter was 33.8%, increasing 220 basis points from 31.6% in the year-ago period. Operating income margin in the second quarter was 10.2%, decreasing 140 basis points from 11.6% in the year-ago period. Income from continuing operations per diluted share totaled $0.66, compared to $0.86 in the second quarter 2012.

Adjusted revenue for the quarter totaled $532.6 million, up $74.4 million, or 16.2%, compared to $458.2 million in the second quarter 2012. Adjusted gross margin in the second quarter was 35.2%, increasing 360 basis points from 31.6% in the year-ago period. Adjusted operating income margin was 14.2%, increasing 210 basis points from 12.1% in the year-ago period. Adjusted income from continuing operations per diluted share totaled $0.99, compared to $0.89 in the second quarter 2012. A reconciliation of non-GAAP (adjusted) financial measures to comparable GAAP financial measures is provided as an appendix to this release.

John Stroup, President and CEO of Belden Inc., said, "Belden's formation of four global segments announced in April was a considerable endeavor and a necessary element to achieving our long-term strategic goals, so our ability to deliver solid second quarter results is especially gratifying. Our strong performance in emerging markets offset soft demand in developed markets. We are pleased with our adjusted gross and operating income margins of 35.2% and 14.2%, respectively; a direct result of our continued focus on portfolio enhancement and business system improvements.

Outlook

"The global macroeconomic environment in 2013 is generally as we anticipated, and we remain confident in our ability to deliver consistent operating results in the second half of the year. Therefore, we are increasing the midpoint of both our revenue and earnings outlook for the full year," said Mr. Stroup.

The Company expects third quarter 2013 adjusted revenues to be $525 - $535 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 now expects adjusted revenues to be $2.09 - $2.12 billion and adjusted income from continuing operations per diluted share to be $3.54 - $3.69. Previously, the Company expected full year adjusted revenues to be $2.07 - $2.12 billion and adjusted income from continuing operations per diluted share to be $3.49 - $3.69.

On a GAAP basis, the Company expects third quarter 2013 revenues to be $522 - $532 million and income from continuing operations per diluted share to be $0.55 - $0.60. For the full year ending December 31, 2013, the Company expects revenues to be $2.08 - $2.11 billion and income from continuing operations per diluted share to be $2.11 - $2.26.

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

This release contains forward looking statements including our expectations for the third quarter and full-year 2013. 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. 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 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.

BDC-E

        
BELDEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME
(Unaudited)
 
 
Three Months EndedSix Months Ended
June 30, 2013July 1, 2012June 30, 2013July 1, 2012
(In thousands, except per share data)
 
Revenues$529,491$458,218$1,036,964$897,818
Cost of sales (350,295) (313,570) (690,415) (620,371)
Gross profit179,196144,648346,549277,447
Selling, general and administrative expenses(93,503)(76,342)(185,485)(157,864)
Research and development(20,931)(14,814)(41,356)(28,622)
Amortization of intangibles(13,105)(2,415)(26,082)(5,499)
Income from equity method investment 2,256  1,960  4,527  4,701 
Operating income53,91353,03798,15390,163
Interest expense(18,345)(12,499)(34,250)(24,418)
Interest income 149  211  257  562 
Income from continuing operations before taxes35,71740,74964,16066,307
Income tax expense (6,225) (1,044) (12,423) (6,863)
Income from continuing operations29,49239,70551,73759,444
Income from discontinued operations, net of tax -  2,685  -  7,221 
Net income$29,492 $42,390 $51,737 $66,665 
 
 

Weighted average number of common shares and equivalents:

Basic43,92845,52644,17345,720
Diluted44,79046,30545,10746,623
 
Basic income per share:
Continuing operations$0.67$0.87$1.17$1.30
Discontinued operations -  0.06  -  0.16 
Net income$0.67 $0.93 $1.17 $1.46 
 
 
Diluted income per share:
Continuing operations$0.66$0.86$1.15$1.28
Discontinued operations -  0.06  -  0.15 
Net income$0.66 $0.92 $1.15 $1.43 
 
Comprehensive income$23,950 $14,152 $38,842 $49,053 
 
Dividends declared per share$0.05$0.05$0.10$0.10
 
       
BELDEN INC.
OPERATING SEGMENT INFORMATION
(Unaudited)
 
 
Three months endedSix months ended
June 30, 2013July 1, 2012June 30, 2013July 1, 2012
Revenues:(In thousands)
Broadcast Solutions$166,551$74,335$322,137$144,392
Enterprise Connectivity Solutions132,929129,475249,556253,827
Industrial Connectivity Solutions171,892173,640348,613343,273
Industrial IT Solutions58,11956,231116,658107,113
All other -  24,537  -  49,213 
Consolidated$529,491 $458,218 $1,036,964 $897,818 
 
Operating income (loss):
Broadcast Solutions$3,505$2,467$3,359$3,635
Enterprise Connectivity Solutions14,67514,28423,51024,036
Industrial Connectivity Solutions24,34426,72548,79345,698
Industrial IT Solutions9,2259,78218,74215,495
All other 1,278  (1,638) 1,278  (2,180)
Total segments53,02751,62095,68286,684
Eliminations(1,370)(543)(2,056)(1,222)
Income from equity method investment 2,256  1,960  4,527  4,701 
Consolidated$53,913 $53,037 $98,153 $90,163 
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