CDT Cable Design Tech Cp

CDT Announces Second Fiscal Quarter 2004 Results SCHAUMBURG, Ill., March 8 /PRNewswire-FirstCall/ -- Cable Design Technologies reported today a loss for the second fiscal quarter ending January 31, 2004 of $3.4 million, or $0.08 per diluted share. This compares with net income of $2.7 million, or $0.07 per diluted share, for the quarter ended October 31, 2003 and net income of $0.2 million, or $0.00 per diluted share, for the quarter ended January 31, 2003. The earnings for the same period lastyear included expenses of $1.5 million, before tax, related to restructuring activities. The loss for the current quarter includes unusual employee benefit related expenses of $2.4 million, before tax, and expenses related to the previously announced pending merger with Belden Inc., of $2.5 million, before tax. The expenses related to the merger with Belden are not deductible for tax purposes and were not included the preliminary results announced early last month. "With revenues being lower sequentially due to the seasonality of our business, especially in the November-December timeframe, results were as expected," CEO Fred Kuznik stated. "We had $4.9 million of unusual items during the quarter, including expenses related to the merger with Belden that we are required to recognize. Despite the impact these expenses have on our current results, the merger will provide long term benefit to our shareholders by combining well-known specialty brands for a more comprehensive array of products anda broader range of preferred cabling and connectivity solutions." Revenues for the second fiscal quarter ending January 31, 2004, were $121.2 million, compared with revenues of $130.6 million in the previous quarter and $112.0 million for the same period last year. Revenues for the second fiscal quarter 2004 benefited by approximately $7.4 million over the same period last year from the favorable effects of currency translation. Sales outside of North America represented 39.7% of CDT's current quarter revenues compared to 38.7% last quarter and 35.5% for the same period last year. The majority of the increase in sales outside North America came from sales in Western Europe. Gross margin was 20.7%, for the current quarter compared to 23.6% for the first fiscal quarter 2004 and 23.1% for the same period last year. Mr. Kuznik noted, "Our margins deteriorated this quarter due not only to the decline in revenue but also due to an increase in workers compensation expense and an unusual benefit charge, as well as product mix, the effect of seasonal discounting during the period, and higher material costs," said Mr. Kuznik. "We have and expect to continue to increase prices to offset and recover rising material costs. However, we would expect margins to continue to come under pressure until material costs stabilize," Kuznik added. Operating Expenses: Selling, general and administrative expenses were $26.3 million for the current quarter compared to $23.8 million for the quarter ending October31, 2003 and $21.8 million for the same period last year. The increase in SG&A over the same period last year is primarily due to the benefit and merger related costs noted above, and an additional $1.2 million due to the effect of foreign currency translation. Other Information: Also included in the loss for the quarter is the tax impact of the expenses associated with the merger between Belden and CDT. These expenses are discrete items in the quarter and the full tax impact must be accounted for in the period in which the expenses are recorded. This treatment has reduced the tax benefit for the quarter and has resulted in a large tax provision relative to earnings for the first six months of the year. The Company generated $3.7 million of cash during the quarter, or $2.8 million net of the benefit of foreign exchange translation. The positive cash flow was driven largely by cash flow from operations. Depreciation and Amortization for the quarter was $5.0 million, and the Company expects that the six month run-rate to continue throughout the remainder of the year. About CDT Cable Design Technologies ( http://www.cdtc.com/ ) is a leading designer and manufacturer of high bandwidth network connectivity products used in computer interconnect, switching and wireless applications and electronic data and signal transmission products that are used in automation and process control and specialty applications. Safe Harbor Provision Certain statements in this press release are forward-looking statements that are based on information currently available to management, management's beliefs and a number of assumptions concerning future events. These statements include future financial results and performance, capital expenditures, length of market downturn and timing of any turnaround. These forward looking statements are subject to various uncertainties and other factors, which could cause the actual results to differ materially from those currently expected, including the level of market demand for the Company's products, competitive pressures, economic conditions in the U.S. and other countries where the Company operates, working capital needs, information technology spending, the ability to achieve reductions in costs, the ability to continue to integrate acquisitions, price fluctuations of raw materials and the potential unavailability thereof, foreign currency fluctuations, technological obsolescence, environmental matters, industry competition, uncertainties associated with thepending merger, and other specific factors discussed in the Company's Annual Report on Form 10-K for the year ended July 31, 2003 and other Securities and Exchange Commission filings by the Company. The Company does not intend to update this information to reflect developments or information obtained after the date hereof and disclaims any legal obligation to the contrary. CONTACT: Chuck Cohrs, Treasurer of Cable Design Technologies, 847-230-1900 Cable Design Technologies Corporation &Subsidiaries Condensed Consolidated Statements of Operations - Unaudited (In thousands, except share and per share data) Three Months and YTD Six Months and YTD Ended Ended January 31, January 31, 2004 2003 2004 2003 NET SALES $121,199 $ 112,024 $251,847 $ 233,065 Cost of Sales 96,134 86,154 195,892 179,502 GROSS PROFIT 25,065 25,870 55,955 53,563 Selling, general and administrative expense 26,267 21,755 50,037 45,206 Research & development expenses 1,150 804 2,255 1,853 Gain on sale of subsidiary (133) - (133) - Business restructuring (income) expense, net (22) 1,456 (22) 8,528 (LOSS) INCOME FROM OPERATIONS (2,197) 1,855 3,818 (2,024) Interest expense, net 1,241 1,451 2,505 3,091 Other expense (income), net 4 (20) (124) 249 (Loss) income before income taxes and minority interest before cumulative effect of accounting change (3,442) 424 1,437 (5,364) Income tax (benefit) provision (238) 118 1,640 (2,183) Minority interest expense, net 218 140 472 228 Net (loss) income from continuing operations before cumulative effect of accounting change (3,422)166 (675) (3,409) Loss from discontinued operations, net of tax - - - (636) Loss on sale of business, net of tax - - - (32,008) Net loss from discontinued operations - - - (32,644) Cumulative effect of change in accounting principle, net of tax benefit - - - (35,723) Net (loss) income $(3,422) $ 166 $(675) $ (71,776) NET (LOSS)INCOME PER COMMON SHARE Basic: Continuing operations $(0.08) $0.00 $(0.02) $(0.08) Discontinued operations - - - (0.73) Cumulative effect of change in accounting principle - - - (0.80) $(0.08) $0.00 $(0.02) $(1.61) Diluted: Continuing operations $(0.08)$0.00 $(0.02) $(0.08) Discontinued operations - - - (0.73) Cumulative effect of change in accounting principle - - - (0.80) $(0.08) $0.00 $(0.02) $(1.61) Basic weighted average common shares outstanding 41,702,078 44,536,876 41,601,624 44,514,925 Diluted weighted average common shares outstanding 41,702,078 44,637,538 41,601,624 44,514,925 Results for the six months ended January 31, 2003 have been adjusted to reflect the cumulative effect of accounting change related to the adoption of SFAS 142 that was retroactive to August 1, 2002 CableDesign Technologies Corporation & Subsidiaries Condensed Consolidated Balance Sheets - Unaudited (In thousands, except share and per share data ) January 31, July 31, 2004 2003 ASSETS Current Assets: Cash and cash equivalents $41,454 $32,701 Accounts receivable, net 79,349 79,121 Inventories 119,390 111,589 Other current assets 33,041 30,225 Assets held for sale 3,968 6,648 Total current assets 277,202 260,284 Property, plant and equipment, net 210,356 204,738 Goodwill, net 11,491 10,980 Intangible assets, net 3,432 3,740 Other assets 10,772 13,211 Total assets $513,253 $492,953 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current maturities of long-term debt $1,984 $1,960 Other current liabilities 69,854 70,299 Liabilities held for sale - 892 Total current liabilities 71,838 73,151 Long-term debt, excluding current maturities 111,921 112,730 Other non-current liabilities 25,614 24,168 Total liabilities 209,373 210,049 Minority interest in subsidiaries 8,172 7,027 Stockholders' Equity Common stock 488 484 Paid in capital 205,806 202,544 Deferred compensation (1,194) (727) Retained earnings 137,803 138,478 Treasury stock (65,282) (65,188) Accumulated other comprehensive income 18,087 286 Total stockholders' equity 295,708 275,877 Total liabilites and stockholders' equity $513,253 $492,953 Cable Design Technologies Corporation & Subsidiaries Segment Results of Operations - Unaudited (In thousands) Three months ended January 31, October 31, January 31, 2004 2003 2003 Net sales: Network Communication $ 69,709 $ 76,165 $66,035 Specialty Electronic 51,490 54,483 45,989 Total net sales $121,199 $130,648 $112,024 Segment operating (loss) profit: Network Communication (2,786) 761 279 Specialty Electronic 434 5,254 3,032 Total segment operating (loss) profit (2,352) 6,015 3,311 Gain on sale of subsidiary (133) - - Business restructuring (income) expense, net (22) - 1,456 Interest expense, net 1,241 1,264 1,451 Other expense (income), net 4 (128) (20) (Loss) Income from continuing operations before income taxes, minority interest and cumulative effect of change in accounting principle $(3,442) $4,879 $424 DATASOURCE: Cable Design Technologies CONTACT: Chuck Cohrs, Treasurer of Cable Design Technologies, +1-847-230-1900 Web site: http://www.cdtc.com/

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