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8-K - 8-K - BELDEN INC.d672136d8k.htm

Exhibit 99.1

 

LOGO   

1 North Brentwood Boulevard

15th Floor

St. Louis, Missouri 63105

  

Phone: 314.854.8000

Fax: 314.854.8003

 

www.Belden.com

  

        News Release

Belden Reports Solid Results in Fourth Quarter 2013 and Announces Binding

Offer to Acquire Privately Held Grass Valley for $220 Million

St. Louis, Missouri – February 6, 2014 – Belden Inc. (NYSE: BDC), a global leader in high quality, end-to-end signal transmission solutions for mission-critical applications, today reported fiscal fourth quarter and full year 2013 results for the period ended December 31, 2013.

On its regularly scheduled earnings conference call, Belden will also discuss its offer to acquire privately held Grass Valley, a leading provider of innovative technology for the broadcast market.

Fourth Quarter 2013 Highlights

 

    Grew revenue by 6.7% year-over-year;

 

    Achieved adjusted gross profit margins of 35.2%, increasing 200 basis points from 33.2% in the year-ago period;

 

    Improved adjusted operating profit margins to 13.8%, increasing 230 basis points from 11.5% in the year-ago period; and

 

    Increased adjusted income from continuing operations per diluted share to $0.91, up 16.7% over last year’s $0.78 per diluted share.

Full Year 2013 Highlights

 

    Achieved adjusted gross profit margins of 35.2%, increasing 310 basis points from 32.1% in the year-ago period;

 

    Improved adjusted operating profit margins to 13.8%, increasing 270 basis points from 11.1% in the year-ago period;

 

    Increased adjusted income from continuing operations per diluted share to $3.69, up 31.8% over last year’s $2.80 per diluted share;

 

    Generated a record $200 million of free cash flow for the year, exceeding adjusted income from continuing operations for the 9th year in a row; and

 

    Purchased 1.7 million shares of Belden common stock for $93.75 million during the year, bringing the total combined program to date shares repurchased to 5.4 million.

Fourth Quarter 2013

On a GAAP basis, revenue for the quarter totaled $509.8 million, up $32.1 million, or 6.7%, compared to $477.7 million in the fourth quarter 2012. Gross margin in the fourth quarter was 34.3%, increasing 280 basis points from 31.5% in the year-ago period. Operating profit margin in the fourth quarter was 9.6%, increasing from 6.6% in the year-ago period. Income from continuing operations per diluted share totaled $0.54, compared to $0.88 in the fourth quarter 2012, a year-over-year decrease of 38.6%, largely a result of favorable discrete tax items in the year-ago period.


Belden Reports Solid Results in Fourth Quarter 2013 and Announces Binding

Offer to Acquire Privately Held Grass Valley for $220 Million —

Page 2 of 5

 

Adjusted revenue for the quarter totaled $515.9 million, up $34.7 million, or 7.2%, compared to $481.2 million in the fourth quarter 2012. Adjusted gross margin in the fourth quarter was 35.2%, increasing 200 basis points from 33.2% in the year-ago period. Adjusted operating profit margin in the fourth quarter was 13.8%, increasing 230 basis points from 11.5% in the year-ago period. Adjusted income from continuing operations per diluted share totaled $0.91, compared to $0.78 in the fourth quarter 2012, a year-over-year increase of 16.7%. A non-GAAP reconciliation table is provided as an appendix to this release.

John Stroup, President and CEO of Belden Inc., said, “I’m pleased with the solid finish to the year. Results were as we expected, as our Enterprise and Broadcast platforms benefitted from improved year-over-year market demand.”

Full Year 2013

On a GAAP basis, revenue for the year totaled $2.069 billion, up $228 million, or 12.4%, compared to $1.841 billion in the full year 2012. Gross margin in 2013 was 34.0%, increasing 320 basis points from 30.8% in the year-ago period. Operating profit margin in 2013 was 9.7%, increasing 380 basis points from 5.9% in the year-ago period. Income from continuing operations per diluted share totaled $2.34, compared to $0.94 in 2012, a year-over-year increase of 149%.

Adjusted revenue for the year totaled $2.084 billion, up $237 million, or 12.9%, compared to $1.847 billion in 2012. Adjusted gross margin in 2013 was 35.2%, increasing 310 basis points from 32.1% in the year-ago period. Adjusted operating profit margin in 2013 was 13.8%, increasing 270 basis points from 11.1% in the year-ago period. Adjusted income from continuing operations per diluted share totaled $3.69, compared to $2.80 in 2012, a year-over-year increase of 31.8%.

Mr. Stroup remarked, “2013 was a very good year at Belden. We successfully integrated two important acquisitions and transformed our structure from a legacy regional organization to its current form of four global platforms serving the Broadcast, Enterprise, and Industrial markets. While market demand made for a challenging year, we remained focused on creating value through the disciplined execution of our Belden Business System. As a result, revenue and profitability are at an all-time high, and we are well positioned for the future.”

Acquisition of Grass Valley

Belden has submitted a binding offer to purchase privately held Grass Valley, a leader within the broadcast market, for $220 million. The binding offer is subject to consultation with Grass Valley’s foreign labor works council, after which we will enter into a definitive agreement. Grass Valley provides innovative technologies including production switchers, cameras, servers, and editing solutions within the mission critical applications of broadcast customers. When combined with Miranda, the resulting end-to-end solution will be the most complete and compelling in the industry.

 


Belden Reports Solid Results in Fourth Quarter 2013 and Announces Binding

Offer to Acquire Privately Held Grass Valley for $220 Million —

Page 3 of 5

 

“We are extremely excited to have Grass Valley join the Belden family. By combining Grass Valley and Miranda, we will create the broadcast industry’s largest and most complete portfolio,” said Mr. Stroup.

A full discussion of this transaction and its potential financial impact on Belden’s consolidated results will accompany the fourth quarter’s earnings call occurring today, February 6th at 10:30 am EST. This transaction is expected to close by March 31, 2014 and is subject to regulatory approvals, the completion of audited financial statements, and other customary closing conditions.

Outlook

“Market demand appears to be stable in the majority of our end-markets. This in combination with the execution of our Market Delivery System should create the catalyst for organic growth and margin expansion. Even after completing the acquisition of Grass Valley, our funnel and balance sheet will remain strong. We are confident that these initiatives position us to perform well, and we remain comfortable with our previously announced earnings outlook for 2014,” said Mr. Stroup.

The Company expects first quarter 2014 adjusted revenues to be $495 – $505 million and adjusted income from continuing operations per diluted share to be $0.77 – $0.82. For the full year ending December 31, 2014, the Company expects adjusted revenues to be $2.11 – $2.15 billion and adjusted income from continuing operations per diluted share to be $3.81 – $4.11. These figures exclude the potential impact of Grass Valley, as this transaction has not yet been completed.

On a GAAP basis, the Company expects first quarter 2014 revenues to be $491 – $501 million and income from continuing operations per diluted share to be $0.55 – $0.60. For the full year ending December 31, 2014, the Company expects revenues to be $2.096 – $2.136 billion and income from continuing operations per diluted share to be $2.95 – $3.25. These figures exclude the potential impact of Grass Valley, as this transaction has not yet been completed.

Earnings Conference Call

Management will host a conference call today at 10:30 am EST to discuss results of the quarter and full-year. 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 Web site 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 Web site at http://investor.belden.com.

 

 


Belden Reports Solid Results in Fourth Quarter 2013 and Announces Binding

Offer to Acquire Privately Held Grass Valley for $220 Million —

Page 4 of 5

 

Forward Looking Statements

This release contains forward looking statements including our expectations for the first quarter and full-year 2014 and the acquisition of Grass Valley. 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. In addition, the completion of the acquisition of Grass Valley is subject to a number of factors, including regulatory approvals, the completion of audited financial statements, and other customary closing conditions. 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

 


Belden Reports Solid Results in Fourth Quarter 2013 and Announces Binding

Offer to Acquire Privately Held Grass Valley for $220 Million —

Page 5 of 5

 

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.

Contact:

        Belden Investor Relations

        314-854-8054

        Investor.Relations@Belden.com

BDC-E

 


BELDEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

 

     Three Months Ended     Twelve Months Ended  
     December 31, 2013     December 31, 2012     December 31, 2013     December 31, 2012  
     (In thousands, except per share data)  

Revenues

   $ 509,751      $ 477,687      $ 2,069,193      $ 1,840,739   

Cost of sales

     (334,712     (327,350     (1,364,764     (1,274,142
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     175,039        150,337        704,429        566,597   

Selling, general and administrative expenses

     (96,327     (89,789     (378,009     (345,926

Research and development

     (20,780     (17,976     (83,277     (65,410

Amortization of intangibles

     (12,395     (9,647     (50,803     (22,792

Income from equity method investment

     3,637        2,450        8,922        9,704   

Asset impairment and loss on sale of assets

     —          (3,772     —          (33,676
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     49,174        31,603        201,262        108,497   

Interest expense

     (19,586     (13,730     (73,095     (52,038

Interest income

     145        300        494        1,033   

Loss on debt extinguishment

     (1,612     (1,865     (1,612     (52,450
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations before taxes

     28,121        16,308        127,049        5,042   

Income tax benefit (expense)

     (4,192     23,170        (22,315     38,194   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations

     23,929        39,478        104,734        43,236   

Income (loss) from discontinued operations, net of tax

     (1,421     2,428        (1,421     16,774   

Gain from disposal of discontinued operations, net of tax

     —          124,697        —          134,480   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 22,508      $ 166,603      $ 103,313      $ 194,490   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average number of common shares and equivalents:

        

Basic

     43,459        44,163        43,871        45,097   

Diluted

     44,214        45,028        44,737        45,942   

Basic income (loss) per share:

        

Continuing operations

   $ 0.55      $ 0.89      $ 2.39      $ 0.96   

Discontinued operations

     (0.03     0.06        (0.03     0.37   

Disposal of discontinued operations

     —          2.82        —          2.98   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 0.52      $ 3.77      $ 2.36      $ 4.31   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted income (loss) per share:

        

Continuing operations

   $ 0.54      $ 0.88      $ 2.34      $ 0.94   

Discontinued operations

     (0.03     0.05        (0.03     0.36   

Disposal of discontinued operations

     —          2.77        —          2.93   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 0.51      $ 3.70      $ 2.31      $ 4.23   
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income

   $ 31,079      $ 162,268      $ 104,697      $ 186,634   
  

 

 

   

 

 

   

 

 

   

 

 

 

Dividends declared per share

   $ 0.05      $ 0.05      $ 0.20      $ 0.20   


BELDEN INC.

OPERATING SEGMENT INFORMATION

(Unaudited)

 

     Three months ended     Twelve months ended  
   December 31, 2013     December 31, 2012     December 31, 2013     December 31, 2012  
     (In thousands)  

Revenues:

  

Broadcast Solutions

   $ 165,701      $ 115,379      $ 663,900      $ 356,320   

Enterprise Connectivity Solutions

     120,167        114,315        493,129        496,857   

Industrial Connectivity Solutions

     165,022        167,497        680,643        670,112   

Industrial IT Solutions

     58,861        56,257        231,521        219,679   

All other

     —          24,239        —          97,771   
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

   $ 509,751      $ 477,687      $ 2,069,193      $ 1,840,739   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss):

        

Broadcast Solutions

   $ 4,199      $ (3,958   $ 15,099      $ (11,657

Enterprise Connectivity Solutions

     11,259        7,709        48,753        40,056   

Industrial Connectivity Solutions

     20,843        19,651        92,562        72,366   

Industrial IT Solutions

     10,505        8,866        38,440        32,807   

All other

     —          (2,801     1,278        (32,640
  

 

 

   

 

 

   

 

 

   

 

 

 

Total segments

     46,806        29,467        196,132        100,932   

Eliminations

     (1,269     (314     (3,792     (2,139

Income from equity method investment

     3,637        2,450        8,922        9,704   
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

   $ 49,174      $ 31,603      $ 201,262      $ 108,497   
  

 

 

   

 

 

   

 

 

   

 

 

 


BELDEN INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

     December 31, 2013     December 31, 2012  
     (Unaudited)        
     (In thousands)  
ASSETS     

Current assets:

    

Cash and cash equivalents

   $ 613,304      $ 395,095   

Receivables, net

     304,204        300,864   

Inventories, net

     207,980        215,282   

Deferred income taxes

     30,417        19,885   

Other current assets

     35,655        28,456   
  

 

 

   

 

 

 

Total current assets

     1,191,560        959,582   

Property, plant and equipment, less accumulated depreciation

     300,835        307,048   

Goodwill

     775,426        778,708   

Intangible assets, less accumulated amortization

     376,976        428,273   

Deferred income taxes

     32,179        46,970   

Other long-lived assets

     79,362        64,002   
  

 

 

   

 

 

 
   $ 2,756,338      $ 2,584,583   
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY     

Current liabilities:

    

Accounts payable

   $ 199,897      $ 183,672   

Accrued liabilities

     197,316        166,272   

Current maturities of long-term debt

     2,500        15,678   

Current liabilities of discontinued operations

     —          86,860   
  

 

 

   

 

 

 

Total current liabilities

     399,713        452,482   

Long-term debt

     1,364,536        1,135,527   

Postretirement benefits

     105,924        144,320   

Other long-term liabilities

     49,624        40,394   

Stockholders’ equity:

    

Common stock

     503        503   

Additional paid-in capital

     585,753        598,180   

Retained earnings

     556,214        461,756   

Accumulated other comprehensive loss

     (29,181     (30,565

Treasury stock

     (276,748     (218,014
  

 

 

   

 

 

 

Total stockholders’ equity

     836,541        811,860   
  

 

 

   

 

 

 
   $ 2,756,338      $ 2,584,583   
  

 

 

   

 

 

 


BELDEN INC.

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS

(Unaudited)

 

     Twelve Months Ended  
     December 31, 2013     December 31, 2012  
     (In thousands)  

Cash flows from operating activities:

    

Net income

   $ 103,313      $ 194,490   

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

    

Depreciation and amortization

     94,451        59,355   

Share-based compensation

     14,854        12,374   

Deferred income tax expense (benefit)

     11,932        (42,750

Provision for inventory obsolescence

     4,623        5,085   

Pension funding less than pension expense

     2,833        593   

Loss on debt extinguishment

     1,612        52,450   

Asset impairment and loss on sale of assets

     —          33,676   

Gain from disposal of discontinued operations

     —          (134,480

Income from equity method investment

     (8,922     (9,704

Tax benefit related to share-based compensation

     (10,734     (4,119

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

    

Receivables

     (18,132     5,628   

Inventories

     2,249        31,706   

Accounts payable

     12,994        (55,166

Accrued liabilities

     30,561        (681

Accrued taxes

     (93,524     (10,760

Other assets

     3,293        968   

Other liabilities

     13,198        723   
  

 

 

   

 

 

 

Net cash provided by operating activities

     164,601        139,388   

Cash flows from investing activities:

    

Capital expenditures

     (40,209     (41,010

Cash used to acquire businesses, net of cash acquired

     (9,979     (860,353

Proceeds from disposal of tangible assets

     3,169        9,575   

Proceeds from disposal of businesses

     3,735        299,848   
  

 

 

   

 

 

 

Net cash used for investing activities

     (43,284     (591,940

Cash flows from financing activities:

    

Borrowings under credit arrangements

     637,595        1,149,966   

Payments under borrowing arrangements

     (434,743     (593,864

Tax benefit related to share-based compensation

     10,734        4,119   

Proceeds from settlement of derivatives

     —          4,024   

Proceeds from exercise of stock options, net of withholding tax payments

     (3,019     2,372   

Cash dividends paid

     (6,678     (11,441

Debt issuance costs paid

     (17,376     (15,414

Payments under share repurchase program

     (93,750     (75,000
  

 

 

   

 

 

 

Net cash provided by financing activities

     92,763        464,762   

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

     4,129        333   
  

 

 

   

 

 

 

Increase in cash and cash equivalents

     218,209        12,543   

Cash and cash equivalents, beginning of period

     395,095        382,552   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 613,304      $ 395,095   
  

 

 

   

 

 

 


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 adjusted for acquisition and divestiture transaction costs, capital expenditures net of the proceeds from the disposal of tangible assets, non-recurring payments related to divestitures, and non-recurring tax payments related to the settlement of a tax sharing agreement. 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      Twelve Months Ended  
     December 31, 2013      December 31, 2012      December 31, 2013      December 31, 2012  
     (In thousands)  

GAAP net cash provided by operating activities

   $ 113,798       $ 46,053       $ 164,601       $ 139,388   

Capital expenditures, net of proceeds from the disposal of tangible assets

     (8,790      (883      (37,040      (31,435

Working capital settlement in connection with the sale of consumer electronics assets

     —           32,333         —           32,333   

Acquisition and divestiture transaction costs

     —           4,928         —           4,928   

Non-recurring tax payments made for gain on 2012 sale of Thermax and Raydex cable business

     —           —           41,808         —     

Non-recurring tax payments made in settlement of tax sharing agreement with Cooper Industries

     —           —           30,000         —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-GAAP free cash flow

   $ 105,008       $ 82,431       $ 199,369       $ 145,214   
  

 

 

    

 

 

    

 

 

    

 

 

 


BELDEN INC.

RECONCILIATION OF NON-GAAP MEASURES

(Unaudited)

In addition to reporting financial results in accordance with accounting principles generally accepted in the United States, we provide non-GAAP operating results adjusted for certain items, including: asset impairments; accelerated depreciation expense due to plant consolidation activities; purchase accounting effects related to acquisitions, such as the adjustment of acquired inventory to fair value; acquisition and divestiture transaction costs; revenue and cost of sales deferrals for acquired product lines subject to software revenue recognition accounting requirements; severance and other restructuring costs; gains (losses) recognized on the disposal of businesses and tangible assets; amortization of intangible assets; gains (losses) on debt extinguishment; non-recurring tax benefits related to the settlement of a tax sharing agreement; and other costs. We utilize the adjusted results to review our ongoing operations without the effect of these adjustments and for comparison to budgeted operating results. We believe the adjusted results are useful to investors because they help them compare our results to previous periods and provide important insights into underlying trends in the business and how management oversees our business operations on a day-to-day basis. Adjusted results should be considered only in conjunction with results reported according to accounting principles generally accepted in the United States.

 

     Three Months Ended     Twelve Months Ended  
     December 31, 2013     December 31, 2012     December 31, 2013     December 31, 2012  
     (In thousands, except percentages and per share amounts)  

GAAP revenues

   $ 509,751      $ 477,687      $ 2,069,193      $ 1,840,739   

Deferred revenue adjustments

     6,127        3,482        15,297        6,272   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted revenues

   $ 515,878      $ 481,169      $ 2,084,490      $ 1,847,011   
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP gross profit

   $ 175,039      $ 150,337      $ 704,429      $ 566,597   

Deferred gross profit adjustments

     4,484        2,038        11,337        2,902   

Severance and other restructuring costs

     2,078        44        7,124        6,482   

Accelerated depreciation

     —          —          4,861        —     

Purchase accounting effects related to acquisitions

     —          7,124        6,550        16,048   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted gross profit

   $ 181,601      $ 159,543      $ 734,301      $ 592,029   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted gross profit margin

     35.2     33.2     35.2     32.1

GAAP operating income

   $ 49,174      $ 31,603      $ 201,262      $ 108,497   

Amortization of intangible assets

     12,395        9,647        50,803        22,792   

Severance and other restructuring costs

     5,365        500        14,888        17,927   

Deferred gross profit adjustments

     4,484        2,038        11,337        2,902   

Accelerated depreciation

     —          —          4,861        —     

Asset impairment and loss on sale of assets

     —          3,772        —          33,676   

Purchase accounting effects related to acquisitions

     —          7,563        6,550        18,782   

Gain on sale of assets

     —          —          (1,278     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating income adjustments

     22,244        23,520        87,161        96,079   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted operating income

   $ 71,418      $ 55,123      $ 288,423      $ 204,576   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted operating income margin

     13.8     11.5     13.8     11.1

GAAP income from continuing operations

   $ 23,929      $ 39,478      $ 104,734      $ 43,236   

Operating income adjustments from above

     22,244        23,520        87,161        96,079   

Loss on debt extinguishment

     1,612        1,865        1,612        52,450   

Tax benefit from Cooper tax sharing agreement

     —          (21,043     —          (21,043

Tax effect of adjustments

     (7,561     (8,523     (28,368     (42,092
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted income from continuing operations

   $ 40,224      $ 35,297      $ 165,139      $ 128,630   
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP income from continuing operations per diluted share

   $ 0.54      $ 0.88      $ 2.34      $ 0.94   

Adjusted income from continuing operations per diluted share

   $ 0.91      $ 0.78      $ 3.69      $ 2.80   

GAAP and Adjusted diluted weighted average shares

     44,214        45,028        44,737        45,942   


BELDEN INC.

RECONCILIATION OF NON-GAAP MEASURES

(Unaudited)

In addition to reporting financial results in accordance with accounting principles generally accepted in the United States, we provide non-GAAP operating results adjusted for certain items, including: asset impairments; accelerated depreciation expense due to plant consolidation activities; purchase accounting effects related to acquisitions, such as the adjustment of acquired inventory to fair value; acquisition and divestiture transaction costs; revenue and cost of sales deferrals for acquired product lines subject to software revenue recognition accounting requirements; severance and other restructuring costs; gains (losses) recognized on the disposal of businesses and tangible assets; amortization of intangible assets; and other costs. We utilize the adjusted results to review our ongoing operations without the effect of these adjustments and for comparison to budgeted operating results. We believe the adjusted results are useful to investors because they help them compare our results to previous periods and provide important insights into underlying trends in the business and how management oversees our business operations on a day-to-day basis. Adjusted results should be considered only in conjunction with results reported according to accounting principles generally accepted in the United States.

 

    Three Months Ended December 31, 2013  
    Broadcast
Solutions
    Enterprise
Connectivity
Solutions
    Industrial
Connectivity
Solutions
    Industrial IT
Solutions
    All Other     Total Segments     Eliminations     Income from
equity method
investment
    Consolidated  
    (In thousands, except percentages)  

GAAP revenues

  $ 165,701      $ 120,167      $ 165,022      $ 58,861      $ —        $ 509,751      $ —        $ —        $ 509,751   

Deferred revenue adjustments

    6,127        —          —          —          —          6,127        —          —          6,127   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted revenues

  $ 171,828      $ 120,167      $ 165,022      $ 58,861      $ —        $ 515,878      $ —        $ —        $ 515,878   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP operating income

  $ 4,199      $ 11,259      $ 20,843      $ 10,505      $ —        $ 46,806      $ (1,269   $ 3,637      $ 49,174   

Amortization of intangible assets

    11,097        235        268        795        —          12,395        —          —          12,395   

Severance and other restructuring costs

    4,573        207        381        204        —          5,365        —          —          5,365   

Deferred gross profit adjustments

    4,484        —          —          —          —          4,484        —          —          4,484   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating income adjustments

    20,154        442        649        999        —          22,244        —          —          22,244   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted operating income

  $ 24,353      $ 11,701      $ 21,492      $ 11,504      $ —        $ 69,050      $ (1,269   $ 3,637      $ 71,418   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted operating income margin

    14.2     9.7     13.0     19.5       13.4         13.8
    Three Months Ended December 31, 2012  
    Broadcast
Solutions
    Enterprise
Connectivity
Solutions
    Industrial
Connectivity
Solutions
    Industrial IT
Solutions
    All Other     Total Segments     Eliminations     Income from
equity method
investment
    Consolidated  
    (In thousands, except percentages)  

GAAP revenues

  $ 115,379      $ 114,315      $ 167,497      $ 56,257      $ 24,239      $ 477,687      $ —        $ —        $ 477,687   

Deferred revenue adjustments

    3,482        —          —          —          —          3,482        —          —          3,482   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted revenues

  $ 118,861      $ 114,315      $ 167,497      $ 56,257      $ 24,239      $ 481,169      $ —        $ —        $ 481,169   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP operating income (loss)

  $ (3,958   $ 7,709      $ 19,651      $ 8,866      $ (2,801   $ 29,467      $ (314   $ 2,450      $ 31,603   

Amortization of intangible assets

    8,438        189        271        749        —          9,647        —          —          9,647   

Purchase accounting effects related to acquisitions

    7,124        178        158        103        —          7,563        —          —          7,563   

Deferred gross profit adjustments

    2,038        —          —          —          —          2,038        —          —          2,038   

Severance and other restructuring costs

    500        —          —          —          —          500        —          —          500   

Asset impairment and loss on sale of assets

    —          —          —          —          3,772        3,772        —          —          3,772   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating income adjustments

    18,100        367        429        852        3,772        23,520        —          —          23,520   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted operating income

  $ 14,142      $ 8,076      $ 20,080      $ 9,718      $ 971      $ 52,987      $ (314   $ 2,450      $ 55,123   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted operating income margin

    11.9     7.1     12.0     17.3     4.0     11.0         11.5


BELDEN INC.

RECONCILIATION OF NON-GAAP MEASURES

2014 REVENUE AND EARNINGS GUIDANCE

 

     Year Ended    Three Months Ended
     December 31, 2014    March 30, 2014

Adjusted revenues

   $2.110 - $2.150 billion    $495 - $505 million

Deferred revenue adjustments

   ($14 million)    ($4 million)
  

 

  

 

GAAP revenues

   $2.096 - $2.136 billion    $491 - $501 million
  

 

  

 

Adjusted income from continuing operations per diluted share

   $3.81 - $4.11    $0.77 - $0.82

Amortization of intangible assets

   ($0.71)    ($0.18)

Deferred gross profit adjustments

   ($0.15)    ($0.04)
  

 

  

 

GAAP income from continuing operations per diluted share

   $2.95 - $3.25    $0.55 - $0.60
  

 

  

 

Our guidance for income from continuing operations per diluted share is based upon the extent of information currently available regarding events and conditions that will impact our future operating results for 2014. Our actual income from continuing operations per diluted share may be impacted by other additional events for which information is not available, such as asset impairments, purchase accounting effects related to acquisitions, severance and other restructuring costs, gains (losses) recognized on the disposal of tangible assets, gains (losses) on debt extinguishment, and other gains (losses) related to events or conditions that are not yet known. The guidance above excludes any impact of our anticipated acquisition of Grass Valley.