BELDEN INC. - Quarter Report: 2011 July (Form 10-Q)

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 001-12561

 

BELDEN INC.

(Exact name of registrant as specified in its charter)

Delaware		36-3601505
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o.

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate website, if any, every interactive data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o.

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ.

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

As of August 8, 2011, the Registrant had 47,439,040 outstanding shares of common stock.

 

 

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

BELDEN INC.
CONSOLIDATED BALANCE SHEETS

		July 3, 2011				December 31, 2010
		(Unaudited)
		(In thousands)
ASSETS
Current assets:
Cash and cash equivalents		$	329,312			$	358,653
Receivables, net			363,373				298,266
Inventories, net			201,930				175,659
Deferred income taxes			9,097				9,473
Other current assets			18,575				18,804
Total current assets			922,287				860,855
Property, plant and equipment, less accumulated depreciation			291,793				278,866
Goodwill			353,849				322,556
Intangible assets, less accumulated amortization			161,257				143,820
Deferred income taxes			22,567				27,565
Other long-lived assets			72,473				62,822
		$	1,824,226			$	1,696,484
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	239,138			$	212,084
Accrued liabilities			144,814				145,840
Total current liabilities			383,952				357,924
Long-term debt			550,984				551,155
Postretirement benefits			119,485				112,426
Other long-term liabilities			39,338				36,464
Stockholders’ equity:
Preferred stock			—				—
Common stock			503				503
Additional paid-in capital			596,684				595,519
Retained earnings			223,382				171,568
Accumulated other comprehensive income (loss)			21,439				(8,919	)
Treasury stock			(111,541	)			(120,156	)
Total stockholders’ equity			730,467				638,515
		$	1,824,226			$	1,696,484

The accompanying notes are an integral part of these Consolidated Financial Statements

BELDEN INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

		Three Months Ended								Six Months Ended
		July 3, 2011				July 4, 2010				July 3, 2011				July 4, 2010
		(In thousands, except per share data)
Revenues		$	536,251			$	410,563			$	997,879			$	794,987
Cost of sales			(379,637	)			(293,259	)			(710,810	)			(567,273	)
Gross profit			156,614				117,304				287,069				227,714
Selling, general and administrative expenses			(84,380	)			(68,407	)			(159,316	)			(137,142	)
Research and development			(14,530	)			(9,911	)			(28,159	)			(20,219	)
Amortization of intangibles			(3,347	)			(2,587	)			(7,026	)			(5,300	)
Income from equity method investment			3,855				3,211				7,717				5,852
Operating income			58,212				39,610				100,285				70,905
Interest expense			(12,748	)			(14,186	)			(24,556	)			(27,132	)
Interest income			156				136				315				318
Other income			—				1,465				—				1,465
Income from continuing operations before taxes			45,620				27,025				76,044				45,556
Income tax expense			(10,739	)			(5,440	)			(19,145	)			(9,641	)
Income from continuing operations			34,881				21,585				56,899				35,915
Loss from discontinued operations, net of tax			(156	)			(1,913	)			(284	)			(4,496	)
Net income		$	34,725			$	19,672			$	56,615			$	31,419
Weighted average number of common shares and equivalents:
Basic			47,401				46,779				47,304				46,737
Diluted			48,414				47,788				48,372				47,647
Basic income (loss) per share:
Continuing operations		$	0.73			$	0.46			$	1.20			$	0.77
Discontinued operations			—				(0.04	)			(0.01	)			(0.10	)
Net income		$	0.73			$	0.42			$	1.19			$	0.67
Diluted income (loss) per share:
Continuing operations		$	0.72			$	0.45			$	1.18			$	0.75
Discontinued operations			—				(0.04	)			(0.01	)			(0.09	)
Net income		$	0.72			$	0.41			$	1.17			$	0.66
Dividends declared per share		$	0.05			$	0.05			$	0.10			$	0.10

The accompanying notes are an integral part of these Consolidated Financial Statements

BELDEN INC.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)

		Six Months Ended
		July 3, 2011				July 4, 2010
		(In thousands)
Cash flows from operating activities:
Net income		$	56,615			$	31,419
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			25,111				28,676
Share-based compensation			5,716				6,588
Pension funding less than (greater than) pension expense			1,820				(2,700	)
Provision for inventory obsolescence			1,160				1,752
Non-cash loss on derivatives and hedging instruments			—				2,749
Tax deficiency (benefit) related to share-based compensation			(1,796	)			210
Income from equity method investment			(7,717	)			(5,852	)
Changes in operating assets and liabilities, net of the effects of currency exchange rate changes and acquired businesses:
Receivables			(50,623	)			(61,382	)
Inventories			(18,616	)			(11,326	)
Accounts payable			19,282				27,182
Accrued liabilities			(14,535	)			(10,708	)
Accrued taxes			13,040				(5,267	)
Other assets			1,310				11,638
Other liabilities			383				(7,466	)
Net cash provided by operating activities			31,150				5,513
Cash flows from investing activities:
Cash used to acquire businesses, net of cash acquired			(52,418	)			—
Capital expenditures			(14,883	)			(12,705	)
Proceeds from disposal of tangible assets			1,222				2,332
Cash provided by other investing activities			—				163
Net cash used for investing activities			(66,079	)			(10,210	)
Cash flows from financing activities:
Payments under borrowing arrangements			—				(46,268	)
Cash dividends paid			(4,718	)			(4,712	)
Debt issuance costs			(3,296	)			—
Tax benefit (deficiency) related to share-based compensation			1,796				(210	)
Proceeds from exercise of stock options			4,554				634
Net cash used for financing activities			(1,664	)			(50,556	)
Effect of foreign currency exchange rate changes on cash and cash equivalents			7,252				(8,011	)
Decrease in cash and cash equivalents			(29,341	)			(63,264	)
Cash and cash equivalents, beginning of period			358,653				308,879
Cash and cash equivalents, end of period		$	329,312			$	245,615

The accompanying notes are an integral part of these Consolidated Financial Statements

BELDEN INC.
CONSOLIDATED STOCKHOLDERS’ EQUITY STATEMENT
SIX MONTHS ENDED JULY 3, 2011
(Unaudited)

																										Accumulated O ther
																										Comprehensive Income (Loss)
										Additional																Translation				Pension and
		Common Stock								Paid-In				Retained				Treasury Stock								Component				Postretirement
		Shares				Amount				Capital				Earnings				Shares				Amount				of Equity				Liability				Total
		(In thousands )
Balance at December 31, 2010			50,335			$	503			$	595,519			$	171,568				(3,290	)		$	(120,156	)		$	32,095			$	(41,014	)		$	638,515
Net income			—				—				—				56,615				—				—				—				—				56,615
Foreign currency translation			—				—				—				—				—				—				30,358				—				30,358
Comprehensive																																			86,973
income
Exercise of stock options, net of tax withholding forfeitures			—				—				(1,816	)			—				251				5,809				—				—				3,993
Conversion of restricted stock units into commom stock, net of tax withholding forfeitures			—				—				(4,531	)			—				143				2,806				—				—				(1,725	)
Share-based compensation			—				—				7,512				—				—				—				—				—				7,512
Dividends ($0.10 per share)			—				—				—				(4,801	)			—				—				—				—				(4,801	)
Balance at July 3, 2011			50,335			$	503			$	596,684			$	223,382				(2,896	)		$	(111,541	)		$	62,453			$	(41,014	)		$	730,467

The accompanying notes are an integral part of these Consolidated Financial Statements

BELDEN INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1: Summary of Significant Accounting Policies

Basis of Presentation

The accompanying Consolidated Financial Statements include Belden Inc. and all of its subsidiaries (the Company, us, we, or our). We eliminate all significant affiliate accounts and transactions in consolidation.

The accompanying Consolidated Financial Statements presented as of any date other than December 31, 2010:

	•		Are prepared from the books and records without audit, and
	•		Are prepared in accordance with the instructions for Form 10-Q and do not include all of the information required by accounting principles generally accepted in the United States for complete statements, but
	•		Include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial statements.

These Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Supplementary Data contained in our 2010 Annual Report on Form 10-K.

Business Description

We design, manufacture, and market a portfolio of cable, connectivity, and networking products in markets including industrial, enterprise, broadcast, and consumer electronics. Our products provide for the transmission of signals for data, sound, and video applications.

Reporting Periods

Our fiscal year and fiscal fourth quarter both end on December 31. Our fiscal first quarter ends on the Sunday falling closest to 91 days after December 31. Our fiscal second and third quarters each have 91 days.

The six months ended July 3, 2011 and July 4, 2010 included 184 and 185 calendar days, respectively.

Reclassifications

We have made certain reclassifications to the 2010 Consolidated Financial Statements with no impact to reported net income in order to conform to the 2011 presentation, including reclassifications associated with a discontinued operation.

Fair Value Measurement

Accounting guidance for fair value measurements specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources or reflect our own assumptions of market participant valuation. The hierarchy is broken down into three levels based on the reliability of the inputs as follows:

	•		Level 1 — Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;
	•		Level 2 — Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets, or financial instruments for which significant inputs are observable, either directly or indirectly;
	•		Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

As of and for the three and six months ended July 3, 2011 and July 4, 2010, we utilized Level 1 inputs to determine the fair value of cash equivalents, and we utilized Level 2 inputs to determine the fair value of derivatives and hedging instruments (see Note 8).

Cash and Cash Equivalents

We classify cash on hand and deposits in banks, including commercial paper, money market accounts, and other investments with an original maturity of three months or less, that we hold from time to time, as cash and cash equivalents. We periodically have cash equivalents consisting of short-term money market funds and other investments. The primary objective of our investment activities is to preserve our capital for the purpose of funding operations. We do not enter into investments for trading or speculative purposes. The fair value of these cash equivalents as of July 3, 2011 was $74.7 million and is based on quoted market prices in active markets (i.e., Level 1 valuation).

Contingent Liabilities

We have established liabilities for environmental and legal contingencies that are probable of occurrence and reasonably estimable. We accrue environmental remediation costs based on estimates of known environmental remediation exposures developed in consultation with our environmental consultants and legal counsel. We are, from time to time, subject to routine litigation incidental to our business. These lawsuits primarily involve claims for damages arising out of the use of our products, allegations of patent or trademark infringement, and litigation and administrative proceedings involving employment matters and commercial disputes. Based on facts currently available, we believe the disposition of the claims that are pending or asserted will not have a materially adverse effect on our financial position, results of operations or cash flow.

As of July 3, 2011, we were party to standby letters of credit, bank guaranties, and surety bonds totaling $10.7 million, $7.1 million, and $1.7 million, respectively.

Revenue Recognition

We recognize revenue when all of the following circumstances are satisfied: (1) persuasive evidence of an arrangement exists, (2) price is fixed or determinable, (3) collectibility is reasonably assured, and (4) delivery has occurred. Delivery occurs in the period in which the customer takes title and assumes the risks and rewards of ownership of the products specified in the customer’s purchase order or sales agreement. We record revenue net of estimated rebates, price allowances, invoicing adjustments, and product returns. We record revisions to these estimates in the period in which the facts that give rise to each revision become known.

Discontinued Operations

On December 16, 2010, we completed the sale of Trapeze Networks, Inc. (Trapeze). The Trapeze operations comprised the entirety of the former Wireless segment. For the three and six months ended July 4, 2010, we recognized a loss of $2.6 million ($1.7 million net of tax) and $5.8 million ($4.2 million net of tax), respectively, related to the Trapeze operations, which is included in discontinued operations.

During 2005, we completed the sale of our discontinued communications cable operation in Phoenix, Arizona. In connection with this sale and related tax deductions, we established a reserve for uncertain tax positions. For the three and six months ended July 3, 2011, we recognized $0.3 million and $0.5 million of interest expense, respectively ($0.2 million and $0.3 million net of tax, respectively) related to the uncertain tax positions, which is included in discontinued operations. For the three and six months ended July 4, 2010, we recognized $0.3 million and $0.5 million of interest expense, respectively ($0.2 million and $0.3 million net of tax, respectively) related to the uncertain tax positions, which is included in discontinued operations.

Other Income

For the six months ended July 4, 2010, we recorded $1.5 million of other income related to an escrow settlement. The escrow settlement related to indemnification for certain tax matters arising from a previous acquisition.

Subsequent Events

We have evaluated subsequent events after the balance sheet date through the financial statement issuance date for appropriate accounting and disclosure. See Note 12.

Note 2: Acquisitions

We acquired ICM Corp. (ICM) for cash of $21.9 million on January 7, 2011. ICM is a broadcast connectivity product manufacturer located in Denver, Colorado. ICM’s strong brands and technology enhance our portfolio of broadcast products. The results of ICM have been included in our Consolidated Financial Statements from January 7, 2011, and are reported within the Americas segment. The ICM acquisition was not material to our financial position or results of operations reported as of and for the three and six months ended July 3, 2011.

We acquired Poliron Cabos Electricos Especiais Ltda (Poliron) for cash of $29.2 million on April 1, 2011. Poliron is an industrial cable manufacturer located in Sao Paulo, Brazil. The acquisition of Poliron expands our presence in emerging markets. The results of Poliron have been included in our Consolidated Financial Statements from April 1, 2011, and are reported within the Americas segment. The Poliron acquisition was not material to our financial position or results of operations reported as of and for the three and six months ended July 3, 2011.

Note 3: Operating Segments

We have organized the enterprise around geographic areas. We conduct our operations through three reported operating segments—Americas; Europe, Middle East and Africa (EMEA); and Asia Pacific.

Beginning on January 1, 2011, we allocate corporate expenses to the segments for purposes of measuring segment operating income. Corporate expenses are allocated on the basis of each segment’s relative operating income prior to the allocation. The prior period presentation has been modified accordingly.

		Americas				EMEA				Asia Pacific				Total Segments
						(In thousands)
For the three months ended July 3, 2011
External customer revenues			325,732				115,498				95,021				536,251
Affiliate revenues			11,475				27,482				398				39,355
Operating income			40,379				23,469				9,228				73,076
For the three months ended July 4, 2010
External customer revenues			236,923				92,193				81,447				410,563
Affiliate revenues			12,133				17,880				62				30,075
Operating income			27,053				15,241				7,833				50,127
For the six months ended July 3, 2011
External customer revenues			602,730				219,188				175,961				997,879
Affiliate revenues			23,543				50,148				499				74,190
Operating income			71,951				40,567				15,601				128,119
For the six months ended July 4, 2010
External customer revenues			454,852				182,743				157,392				794,987
Affiliate revenues			24,870				32,623				62				57,555
Operating income			50,841				26,302				13,543				90,686

The following table is a reconciliation of the total of the reportable segments’ operating income to consolidated income from continuing operations before taxes.

		Three Months Ended								Six Months Ended
		July 3, 2011				July 4, 2010				July 3, 2011				July 4, 2010
						(In thousands)
Segment operating income		$	73,076			$	50,127			$	128,119			$	90,686
Eliminations			(14,864	)			(10,517	)			(27,834	)			(19,781	)
Total operating income			58,212				39,610				100,285				70,905
Interest expense			(12,748	)			(14,186	)			(24,556	)			(27,132	)
Interest income			156				136				315				318
Other income			—				1,465				—				1,465
Income from continuing operations before taxes		$	45,620			$	27,025			$	76,044			$	45,556

Revenues by major product group were as follows:

		Three Months Ended								Six Months Ended
		July 3, 2011				July 4, 2010				July 3, 2011				July 4, 2010
						(In thousands)
Cable products		$	378,497			$	312,446			$	697,625			$	603,757
Networking products			81,534				53,962				152,789				103,220
Connectivity products			76,220				44,155				147,465				88,010
Total revenues		$	536,251			$	410,563			$	997,879			$	794,987

The main categories of cable products are (1) copper cables, including shielded and unshielded twisted pair cables, coaxial cables, and stranded cables, (2) fiber optic cables, which transmit light signals through glass or plastic fibers, and (3) composite cables, which are combinations of multiconductor, coaxial, and

fiber optic cables jacketed together or otherwise joined together to serve complex applications and provide ease of installation. Connectivity products include both fiber and copper connectors for the enterprise, broadcast, and industrial markets. Connectors are also sold as part of end-to-end structured cabling solutions. Networking products include Industrial Ethernet switches and related equipment, fiber optic interfaces and media converters used to bridge fieldbus networks over long distances, and load-moment indicators for mobile cranes and other load-bearing equipment.

Note 4: Income per Share

The following table presents the basis for the income per share computations:

		Three Months Ended								Six Months Ended
		July 3, 2011				July 4, 2010				July 3, 2011				July 4, 2010
						(In thousands)
Numerator:
Income from continuing operations		$	34,881			$	21,585			$	56,899			$	35,915
Loss from discontinued operations, net of tax			(156	)			(1,913	)			(284	)			(4,496	)
Net income		$	34,725			$	19,672			$	56,615			$	31,419
Denominator:
Weighted average shares outstanding, basic			47,401				46,779				47,304				46,737
Effect of dilutive common stock equivalents			1,013				1,009				1,068				910
Weighted average shares outstanding, diluted			48,414				47,788				48,372				47,647

For the three and six months ended July 3, 2011, diluted weighted average shares outstanding do not include outstanding equity awards of 0.7 million and 0.6 million, respectively, because to do so would have been anti-dilutive. For the three and six months ended July 4, 2010, diluted weighted average shares outstanding do not include outstanding equity awards of 1.6 million and 1.4 million, respectively, because to do so would have been anti-dilutive.

Note 5: Inventories

The major classes of inventories were as follows:

		July 3, 2011				December 31, 2010
		(In thousands)
Raw materials		$	80,898			$	64,146
Work-in-process			48,978				42,193
Finished goods			91,523				87,982
Perishable tooling and supplies			3,170				3,615
Gross inventories			224,569				197,936
Obsolescence and other reserves			(22,639	)			(22,277	)
Net inventories		$	201,930			$	175,659

Note 6: Long-Lived Assets

Disposals

During the six months ended July 3, 2011, we sold certain real estate of the Americas segment for $1.1 million. There was no gain or loss recognized on the sale.

During the six months ended July 4, 2010, we sold certain real estate of the EMEA segment for $1.8 million. There was no gain or loss recognized on the sale.

Depreciation and Amortization Expense

We recognized depreciation expense in income from continuing operations of $8.9 million and $18.1 million in the three and six months ended July 3, 2011, respectively. We recognized depreciation expense in income from continuing operations of $9.9 million and $20.1 million in the three and six months ended July 4, 2010, respectively.

We recognized amortization expense related to our intangible assets in income from continuing operations of $3.3 million and $7.0 million in the three and six months ended July 3, 2011, respectively. We recognized amortization expense related to our intangible assets in income from continuing operations of $2.6 million and $5.3 million in the three and six months ended July 4, 2010, respectively.

Note 7: Long-Term Debt and Other Borrowing Arrangements

Senior Secured Credit Facility

On April 25, 2011, we entered into a new senior secured credit facility. The borrowing capacity under the new facility is $400.0 million, and it matures on April 25, 2016. Under the new facility, we are permitted to borrow and re-pay funds in various currencies. Interest on outstanding borrowings is variable, based on either the three month LIBOR rate or the prime rate. The new facility is secured by certain of our assets in the United States as well as the capital stock of certain of our subsidiaries. We paid $3.3 million of fees associated with the new facility, which will be amortized over the life of the new facility using the effective interest method.

The new facility contains a leverage ratio covenant and a fixed charge coverage ratio covenant. As of July 3, 2011, we were in compliance with all of the covenants of the new facility.

The new facility replaces our $230.0 million senior secured credit facility that was scheduled to mature in January 2013. There were no outstanding borrowings under the prior facility at the time of its termination.

As of July 3, 2011, there were no outstanding borrowings under the new facility, and we had $380.4 million in available borrowing capacity.

Senior Subordinated Notes

We have outstanding $200.0 million in senior subordinated notes due 2019 with a coupon interest rate of 9.25% and an effective interest rate of 9.75%. The notes are guaranteed on a senior subordinated basis by certain of our subsidiaries. The notes rank equal in right of payment with our senior subordinated notes due 2017 and with any future senior subordinated debt, and they are subordinated to all of our senior debt and

the senior debt of our subsidiary guarantors, including our senior secured credit facility. Interest is payable semiannually on June 15 and December 15. As of July 3, 2011, the carrying value of the notes was $201.0 million.

We also have outstanding $350.0 million aggregate principal amount of 7.0% senior subordinated notes due 2017. The notes are guaranteed on a senior subordinated basis by certain of our subsidiaries. The notes rank equal in right of payment with our senior subordinated notes due 2019 and with any future senior subordinated debt, and they are subordinated to all of our senior debt and the senior debt of our subsidiary guarantors, including our senior secured credit facility. Interest is payable semiannually on March 15 and September 15. As of July 3, 2011, the carrying value of the notes was $350.0 million.

Fair Value of Long-Term Debt

The fair value of our debt instruments at July 3, 2011 was approximately $581.3 million based on sales prices of the debt instruments from recent trading activity. This amount represents the fair value of our senior subordinated notes with a face value of $550.0 million.

Note 8: Derivatives and Hedging Activities

There were no derivatives or hedging instruments in place as of or for the three and six months ended July 3, 2011. For each of the three and six months ended July 4, 2010, we recorded a net loss of $2.7 million on our derivative and hedging instruments, which was classified within interest expense.

Note 9: Income Taxes

Income tax expense was $10.7 million and $19.1 million for the three and six months ended July 3, 2011, respectively. The effective rate reflected in the provision for income taxes on income from continuing operations before taxes is 23.5% and 25.2% for the three and six months ended July 3, 2011, respectively. The most significant factor in the difference between the effective rate and the amount determined by applying the applicable statutory United States tax rate of 35% is the tax rate differential associated with our foreign earnings. In addition, income tax expense for the three and six months ended July 3, 2011 reflects a $2.4 million benefit, due to the final settlement of a foreign tax audit.

Note 10: Pension and Other Postretirement Obligations

The following table provides the components of net periodic benefit costs for our pension plans:

		Pension Obligations								Other Postretirement Obligations
		July 3, 2011				July 4, 2010				July 3, 2011				July 4, 2010
						(In thousands)
Three Months Ended
Service cost		$	1,364			$	1,304			$	41			$	25
Interest cost			2,867				3,031				672				632
Expected return on plan assets			(2,901	)			(2,974	)			—				—
Amortization of prior service cost			(36	)			4				(59	)			(54	)
Net loss recognition			1,545				574				111				58
Net periodic benefit cost		$	2,839			$	1,939			$	765			$	661
Six Months Ended
Service cost		$	2,713			$	3,164			$	81			$	50
Interest cost			5,678				7,257				1,353				1,258
Expected return on plan assets			(5,761	)			(7,298	)			—				—
Amortization of prior service cost			(72	)			20				(119	)			(107	)
Net loss recognition			3,088				1,518				230				116
Net periodic benefit cost		$	5,646			$	4,661			$	1,545			$	1,317

Note 11: Comprehensive Income (Loss)

The following table summarizes total comprehensive income (loss):

		Three Months Ended								Six Months Ended
		July 3, 2011				July 4, 2010				July 3, 2011				July 4, 2010
						(In thousands)
Net income		$	34,725			$	19,672			$	56,615			$	31,419
Foreign currency translation gain (loss)			7,601				(29,156	)			30,358				(51,262	)
Total comprehensive income (loss)		$	42,326			$	(9,484	)		$	86,973			$	(19,843	)

Note 12: Subsequent Events

In July 2011, our Board of Directors authorized a share repurchase program, which allows us to purchase up to $150.0 million of our common stock through open market purchases, negotiated transactions, or other means, in accordance with applicable securities laws and other restrictions. In August 2011, we entered into a prepaid variable share repurchase agreement to repurchase $25.0 million of our common stock. The $25.0 million payment under the repurchase agreement will be funded with available cash. No shares have been repurchased under this program as of August 10, 2011.

Note 13: Supplemental Guarantor Information

As of July 3, 2011, Belden Inc. (the Issuer) has outstanding $550.0 million aggregate principal amount of senior subordinated notes. The notes rank equal in right of payment with any of our future senior subordinated debt. The notes are subordinated to all of our senior debt and the senior debt of our

subsidiary guarantors, including our senior secured credit facility. Belden Inc. and certain of its subsidiaries have fully and unconditionally guaranteed the notes on a joint and several basis. In addition, effective April 25, 2011, in connection with the refinancing of our senior secured credit facility, the guarantor subsidiaries of the notes have been revised. The financial position, results of operations, and cash flows of the guarantor subsidiaries are not material and are combined with the Issuer in the following consolidating financial information. The following consolidating financial information presents information about the Issuer and non-guarantor subsidiaries. Investments in subsidiaries are accounted for on the equity basis. Intercompany transactions are eliminated.

Supplemental Condensed Consolidating Balance Sheets

		July 3, 2011
						Non-
						Guarantor
		Issuer				Subsidiaries				Eliminations				Total
						(Unaudited)
						(In thousands)
ASSETS
Current assets:
Cash and cash equivalents		$	100,925			$	228,387			$	—			$	329,312
Receivables, net			129,875				233,498				—				363,373
Inventories, net			105,738				96,192				—				201,930
Deferred income taxes			4,634				4,463				—				9,097
Other current assets			7,132				11,443				—				18,575
Total current assets			348,304				573,983				—				922,287
Property, plant and equipment, less accumulated depreciation			120,296				171,497				—				291,793
Goodwill			220,842				133,007				—				353,849
Intangible assets, less accumulated amortization			67,402				93,855				—				161,257
Deferred income taxes			9,804				12,763				—				22,567
Other long-lived assets			12,042				60,431				—				72,473
Investment in subsidiaries			1,280,746				—				(1,280,746	)			—
		$	2,059,436			$	1,045,536			$	(1,280,746	)		$	1,824,226
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	95,638			$	143,500			$	—			$	239,138
Accrued liabilities			59,060				85,754				—				144,814
Total current liabilities			154,698				229,254				—				383,952
Long-term debt			550,984				—				—				550,984
Postretirement benefits			32,355				87,130				—				119,485
Other long-term liabilities			21,420				17,918				—				39,338
Intercompany accounts			(36,044	)			36,044				—				—
Total stockholders’ equity			1,336,023				675,190				(1,280,746	)			730,467
		$	2,059,436			$	1,045,536			$	(1,280,746	)		$	1,824,226

		December 31, 2010
						Non-
						Guarantor
		Issuer				Subsidiaries				Eliminations				Total
						(In thousands)
ASSETS
Current assets:
Cash and cash equivalents		$	173,699			$	184,954			$	—			$	358,653
Receivables, net			117,303				180,963				—				298,266
Inventories, net			109,127				66,532				—				175,659
Deferred income taxes			5,590				3,883				—				9,473
Other current assets			10,199				8,605				—				18,804
Total current assets			415,918				444,937				—				860,855
Property, plant and equipment, less accumulated depreciation			120,857				158,009				—				278,866
Goodwill			258,094				64,462				—				322,556
Intangible assets, less accumulated amortization			93,695				50,125				—				143,820
Deferred income taxes			9,342				18,223				—				27,565
Other long-lived assets			12,771				50,051				—				62,822
Investment in subsidiaries			1,227,959				—				(1,227,959	)			—
		$	2,138,636			$	785,807			$	(1,227,959	)		$	1,696,484
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	92,996			$	119,088			$	—			$	212,084
Accrued liabilities			78,013				67,827				—				145,840
Total current liabilities			171,009				186,915				—				357,924
Long-term debt			551,155				—				—				551,155
Postretirement benefits			27,949				84,477				—				112,426
Other long-term liabilities			30,047				6,417				—				36,464
Intercompany accounts			(249,051	)			249,051				—				—
Total stockholders’ equity			1,607,527				258,947				(1,227,959	)			638,515
		$	2,138,636			$	785,807			$	(1,227,959	)		$	1,696,484

Supplemental Condensed Consolidating Statements of Operations (Unaudited)

		Three Months Ended July 3, 2011
						Non-
						Guarantor
		Issuer				Subsidiaries				Eliminations				Total
						(In thousands)
Revenues		$	281,225			$	302,918			$	(47,892	)		$	536,251
Cost of sales			(212,163	)			(215,366	)			47,892				(379,637	)
Gross profit			69,062				87,552				—				156,614
Selling, general and administrative expenses			(44,251	)			(40,129	)			—				(84,380	)
Research and development			(2,840	)			(11,690	)			—				(14,530	)
Amortization of intangibles			(820	)			(2,527	)			—				(3,347	)
Income from equity method investment			—				3,855				—				3,855
Operating income			21,151				37,061				—				58,212
Interest expense			(12,162	)			(586	)			—				(12,748	)
Interest income			29				127				—				156
Intercompany income (expense)			(13,004	)			13,004				—				—
Income (loss) from equity investment in subsidiaries			39,679				—				(39,679	)			—
Income (loss) from continuing operations before taxes			35,693				49,606				(39,679	)			45,620
Income tax expense			(812	)			(9,927	)			—				(10,739	)
Income (loss) from continuing operations			34,881				39,679				(39,679	)			34,881
Loss from discontinued operations, net of tax			(156	)			—				—				(156	)
Net income (loss)		$	34,725			$	39,679			$	(39,679	)		$	34,725
		Three Months Ended July 4, 2010
						Non-
						Guarantor
		Issuer				Subsidiaries				Eliminations				Total
						(In thousands)
Revenues		$	204,261			$	243,812			$	(37,510	)		$	410,563
Cost of sales			(146,720	)			(184,049	)			37,510				(293,259	)
Gross profit			57,541				59,763				—				117,304
Selling, general and administrative expenses			(38,111	)			(30,296	)			—				(68,407	)
Research and development			(2,603	)			(7,308	)			—				(9,911	)
Amortization of intangibles			(727	)			(1,860	)			—				(2,587	)
Income from equity method investment			—				3,211				—				3,211
Operating income			16,100				23,510				—				39,610
Interest expense			(14,443	)			257				—				(14,186	)
Interest income			30				106				—				136
Other income			—				1,465				—				1,465
Intercompany income (expense)			(1,009	)			1,009				—				—
Income (loss) from equity investment in subsidiaries			20,834				—				(20,834	)			—
Income (loss) from continuing operations before taxes			21,512				26,347				(20,834	)			27,025
Income tax benefit (expense)			73				(5,513	)			—				(5,440	)
Income (loss) from continuing operations			21,585				20,834				(20,834	)			21,585
Loss from discontinued operations, net of tax			(1,913	)			—				—				(1,913	)
Net income (loss)		$	19,672			$	20,834			$	(20,834	)		$	19,672

		Six Months Ended July 3, 2011
						Non-
						Guarantor
		Issuer				Subsidiaries				Eliminations				Total
		(In thousands)
Revenues		$	521,349			$	571,565			$	(95,035	)		$	997,879
Cost of sales			(388,902	)			(416,943	)			95,035				(710,810	)
Gross profit			132,447				154,622				—				287,069
Selling, general and administrative expenses			(83,818	)			(75,498	)			—				(159,316	)
Research and development			(5,650	)			(22,509	)			—				(28,159	)
Amortization of intangibles			(1,640	)			(5,386	)			—				(7,026	)
Income from equity method investment			—				7,717				—				7,717
Operating income			41,339				58,946				—				100,285
Interest expense			(23,944	)			(612	)			—				(24,556	)
Interest income			72				243				—				315
Intercompany income (expense)			(14,686	)			14,686				—				—
Income (loss) from equity investment in subsidiaries			55,653				—				(55,653	)			—
Income (loss) from continuing operations before taxes			58,434				73,263				(55,653	)			76,044
Income tax expense			(1,535	)			(17,610	)			—				(19,145	)
Income (loss) from continuing operations			56,899				55,653				(55,653	)			56,899
Loss from discontinued operations, net of tax			(284	)			—				—				(284	)
Net income (loss)		$	56,615			$	55,653			$	(55,653	)		$	56,615
		Six Months Ended July 4, 2010
						Non-
						Guarantor
		Issuer				Subsidiaries				Eliminations				Total
		(In thousands)
Revenues		$	396,702			$	473,498			$	(75,213	)		$	794,987
Cost of sales			(284,086	)			(358,400	)			75,213				(567,273	)
Gross profit			112,616				115,098				—				227,714
Selling, general and administrative expenses			(74,935	)			(62,207	)			—				(137,142	)
Research and development			(5,286	)			(14,933	)			—				(20,219	)
Amortization of intangibles			(1,465	)			(3,835	)			—				(5,300	)
Income from equity method investment			—				5,852				—				5,852
Operating income			30,930				39,975				—				70,905
Interest expense			(27,225	)			93				—				(27,132	)
Interest income			79				239				—				318
Other income			—				1,465				—				1,465
Intercompany income (expense)			(306	)			306				—				—
Income (loss) from equity investment in subsidiaries			32,279				—				(32,279	)			—
Income (loss) from continuing operations before taxes			35,757				42,078				(32,279	)			45,556
Income tax benefit (expense)			158				(9,799	)			—				(9,641	)
Income (loss) from continuing operations			35,915				32,279				(32,279	)			35,915
Loss from discontinued operations, net of tax			(4,496	)			—				—				(4,496	)
Net income (loss)		$	31,419			$	32,279			$	(32,279	)		$	31,419