First Quarter 2009 Highlights
St. Louis, Missouri - Wednesday, April 29, 2009 - 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 its 2009 fiscal first quarter.
First Quarter 2009 Results
The Company reported first quarter 2009 revenue of $328.5 million and an operating loss of $37.6 million, compared to revenue and operating income of $511.8 million and $26.6 million in the first quarter of 2008, respectively. The Company reported a net loss of $32.5 million, or ($0.70) per diluted share, down from net income of $12.9 million, or $0.27 per diluted share, in the prior year period. The current quarter's revenue included $19.0 million of unfavorable currency translation as compared to the prior year first quarter. Cash flow from operations was $12.6 million during the quarter, and net of capital expenditures was $3.1 million.
During the quarter, Belden recorded pre-tax non-cash asset impairment charges of $24.7 million, pre-tax severance charges of $25.9 million, and other pre-tax costs of $4.6 million, all of which were associated with the 2008 global restructuring plan and its new first quarter actions. In the first quarter of 2008, the Company incurred pre-tax charges of $25.2 million for severance, asset impairment, and other costs associated with restructuring actions in North America and Europe.
Adjusted for these items, operating income in the first quarter of 2009 was $16.1 million or 4.9 percent of revenue, compared to $51.3 million or 10.0 percent a year ago. Adjusted net income per diluted share was $0.16 in the quarter, compared to $0.67 in the first quarter of 2008. See the attached schedule, Adjusted Operating Results, for a reconciliation of GAAP results to adjusted results.
"Despite an economic environment generally as challenging as we expected, we are pleased with the overall performance of our business," said John Stroup, President and Chief Executive Officer of Belden. "However, the environment in Europe has proven to be more demanding than initially expected. Accordingly, we are taking additional actions to size our business for what we expect to be a longer period of economic weakness."
New First Quarter 2009 Restructuring Activities
During the quarter, the Company announced the following restructuring actions which resulted in non-cash asset impairment of $21.2 million pre-tax and severance of $13.8 million pre-tax:
The closure of connector manufacturing facilities in Germany and the transfer of their production to facilities in Eastern Europe.
The departure of Wolfgang Babel, the former President of Belden Europe, Middle East and Africa (EMEA). John Stroup, President and Chief Executive Officer of Belden will lead the EMEA business segment until a permanent replacement is found.
Stroup commented, "Although we expect the economy to remain challenging throughout the year, we are off to a strong start on our cost reduction programs. As a result of the hard work of our associates around the globe, we continue to make investments in our Lean enterprise and organic growth strategic initiatives."
Credit Facility Amendment
During the quarter the Company amended its $350 million senior secured revolving credit facility. In general, the amendment changed the definition of EBITDA used in the computation of the 3.5 gross debt-to-EBITDA leverage ratio covenant in the agreement and increased the cost of borrowings under the facility by 100 basis points.
The amendment provides the Company with additional flexibility in managing liquidity through the weaker global demand in its served markets. This action, in conjunction with the Company's strong cash generation capacity and its $224.4 million cash on hand, provides the Company with the liquidity necessary to implement its long-term strategies.
The Company expects second quarter revenue and EPS, excluding the impact of the deferral of revenues and cost of goods sold with respect to its wireless segment and the impact of charges associated with already announced restructuring actions, to be between $340 million and $350 million and $0.25 and $0.30 per share, respectively.
"While still difficult, we have seen some stabilization in our markets, and we expect our channel partners to continue carefully managing their inventory levels as we jointly work our way through this difficult period."
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. The current global economic slowdown has adversely affected our results of operations and may continue to do so. Turbulence in financial markets may increase our borrowing costs. Some additional 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, 2008, filed with the SEC on February 27, 2009. Belden disclaims any duty to update any forward looking statements as a result of new information, future developments, or otherwise.
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. Belden associates work in copper cable, fiber, wireless technology, connectors, switches and active components to bring voice, video and data to your mission-critical application. With 2008 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 www.belden.com.
Belden Investor Relations