UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K/A (Amendment No. 2)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 16, 2004
Belden CDT Inc.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
Delaware 001-12561 36-3601505
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(State or other jurisdiction of (Commission File Number) (IRS Employer Identification No.)
incorporation)
7701 Forsyth Boulevard, Suite 800
St. Louis, Missouri 63105
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(Address of Principal Executive Offices, including Zip Code)
(314) 854-8000
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(Registrant's telephone number, including area code)
n/a
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if this Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
EXPLANATORY NOTE
Belden CDT Inc. (the Company) files this second amendment to its Current Report
("Report") on Form 8-K, which it initially filed on July 16, 2004 and then
amended on August 9, 2004 to include financial statements of Belden Inc.
("Belden") in response to Item 7 of the Form 8-K instructions that applied at
the time the amendment was filed. Now, the Company files this second amendment
to include the financial statements required by Item 9.01 of the amended
instructions to Form 8-K.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(b) Pro Forma Financial Information
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma combined condensed balance sheet of
Belden CDT as of June 30, 2004 and the unaudited pro forma combined condensed
statement of operations for the six months ended June 30, 2004 and the year
ended December 31, 2003 are based on the historical financial statements of
Belden and CDT after giving effect to the merger. In accordance with Statement
of Financial Accounting Standards No. 141, "Business Combinations" (SFAS 141),
and the assumptions and adjustments described in the accompanying notes to the
unaudited pro forma combined condensed financial statements, Belden is
considered the accounting acquiror. The merger was completed on July 15, 2004.
Because Belden's owners as a group retained or received the larger portion of
the voting rights in the combined entity and Belden's senior management
represents a majority of the senior management of the combined entity, Belden
was considered the acquiror for accounting purposes and will account for the
merger as a reverse acquisition under the purchase method of accounting for
business combinations under accounting principles generally accepted in the
United States of America, which means that the consideration paid (purchase
price) will be allocated to the tangible and intangible net assets of CDT based
upon their fair values, and the net assets of CDT will be recorded at fair
value as of the completion of the merger and added to those of Belden. Belden
CDT's fiscal year will end on December 31.
The unaudited pro forma combined condensed balance sheet as of June
30, 2004 is presented to give effect to the proposed merger as if it occurred
on June 30, 2004 and, due to different fiscal period-ends, combines the
historical balance sheet of Belden at June 30, 2004 and the historical balance
sheet of CDT at April 30, 2004. The unaudited pro forma combined condensed
statement of operations of Belden and CDT for the six months ended June 30,
2004 and year ended December 31, 2003 are presented as if the combination had
taken place on January 1, 2004 and January 1, 2003 for Belden and November 1,
2003 and February 1, 2003 for CDT and, due to different fiscal period-ends,
combines the historical results of Belden for the six month period ending June
30, 2004 and twelve month period ended December 31, 2003 and the historical
results of CDT for the six month period ending April 30, 2004 twelve month
period ended January 31, 2004.
Reclassifications have been made to CDT's historical financial
statements to conform to Belden's historical financial statement presentation.
In accordance with SFAS 141, CDT's tangible and intangible net assets
were adjusted to their fair values and the excess of the purchase price over
the fair value of CDT's net assets was recorded as goodwill. The preliminary
adjustments to tangible and intangible net assets including goodwill that are
shown in these unaudited pro forma combined condensed financial statements are
based on various preliminary estimates by management. The work performed by
independent valuation specialists has been considered in management's estimates
of the fair values. A final determination of these fair values will include
management's consideration of a final valuation by the independent valuation
specialists. This final valuation will be based on the actual net tangible and
intangible assets of CDT that existed as of the completion date of the merger.
The unaudited pro forma combined condensed financial statements include
preliminary adjustments for liabilities resulting from integration planning.
Preliminary Liability adjustments include change in control and integration
incentive costs of $10,785, severance costs of $8,603, costs of vacating some
facilities (leased or owned) of CDT and other costs
2
associated with exiting activities of CDT of $11,165, and benefit plan
obligations of $13,838. In addition, Belden CDT announced significant
restructuring activities after completion of the merger and will incur costs
for severance or relocation costs related to Belden employees, costs of
vacating some facilities (leased or owned) of Belden, or other costs associated
with exiting activities of Belden. Cost associated with exiting activities of
Belden are not included in the pro forma adjustments since such activities are
not part of CDT. The unaudited pro forma combined condensed financial
statements also do not reflect cost savings that are expected to result from
the integration activities and elimination of duplicate expenses after the
merger.
The unaudited pro forma combined condensed financial statements should
be read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the historical consolidated financial
statements and accompanying notes of Belden and CDT incorporated by reference
in the joint proxy statement/prospectus filed on June 3, 2004 with the
Securities and Exchange Commission on Form S-4. The unaudited pro forma
combined condensed financial statements are not intended to represent or be
indicative of the consolidated results of operations or financial condition of
Belden CDT that would have been reported had the merger been completed as of
the dates presented, and should not be taken as representative of the future
consolidated results of operations or financial condition of Belden CDT.
3
BELDEN CDT INC. UNAUDITED PRO FORMA
COMBINED CONDENSED BALANCE SHEET
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
BELDEN CDT CDT
AMOUNTS AMOUNTS DISCONTINUED
AS OF AS OF OPERATIONS
JUNE 30, APRIL 30, PRO FORMA (1) PRO FORMA PRO FORMA
2004 2004 ADJUSTMENT ADJUSTMENTS NOTES COMBINED
----------- ----------- ------------ ----------- ----- -----------
ASSETS
Current assets:
Cash and cash equivalent $ 168,902 $ 48,928 $ (2,025) $ -- $ 215,805
Receivables, net 97,330 89,568 (14,791) -- 172,107
Inventories 91,737 118,985 (10,637) (567) (A) 199,518
Income taxes receivable 2,773 4,023 -- -- 6,796
Deferred income taxes 11,015 13,416 445 -- 24,876
Other current assets 5,523 10,773 (598) -- 15,698
Current assets of discontinued
operations 20,476 5,392 27,606 (3,791) (A) 49,683
----------- ----------- ----------- ----------- -----------
Total current assets 397,756 291,085 -- (4,358) 684,483
Property, plant and equipment, net 172,381 200,407 (27,801) (482) (B) 344,505
Goodwill and other intangibles, net 79,099 14,539 -- 210,893 (C) 304,531
Other long-lived assets 10,705 10,195 (885) (1,857) (D) 18,158
Long-lived assets of discontinued
operations 21,147 -- 28,686 (13,714) (B) 36,119
----------- ----------- ----------- ----------- -----------
$ 681,088 $ 516,226 $ -- $ 190,482 $ 1,387,796
=========== =========== =========== =========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 90,133 $ 76,318 $ (12,026) 25,260 (E) $ 179,685
Current maturities of long-term debt 64,998 3,404 -- -- 68,402
Current liabilities of
discontinued operations 20,859 -- 12,026 3,093 (E) 35,978
----------- ----------- ----------- ----------- -----------
Total current liabilities 175,990 79,722 -- 28,353 284,065
Long-term debt 136,000 111,173 (1,152) -- 246,021
Postretirement benefits other than
pensions 9,580 11,456 -- 7,527 (F) 28,563
Deferred income taxes 45,606 1,381 (1,363) 12,211 (G) 57,835
Other long-term liabilities 29,641 11,044 (1,033) 5,896 (H) 45,548
Long-term liabilities of discontinued
operations 5,368 -- 3,548 (7,715) (G/H/I) 1,201
----------- ----------- ----------- ----------- -----------
Total liabilities 402,185 214,776 -- 46,272 663,233
Minority interest in -- 8,185 -- -- 8,185
subsidiaries
Stockholders' equity:
Preferred stock -- -- -- -- --
Common stock 262 488 -- (277) (J) 473
Additional paid-in capital 39,845 206,129 -- 291,632 (K) 537,606
Retained earnings 238,486 141,412 -- (141,412) (L) 238,486
Accumulated other comprehensive
income/(loss) 7,807 11,506 -- (11,506) (L) 7,807
Unearned deferred compensation (2,721) (997) -- 997 (L) (2,721)
Treasury stock (4,776) (65,273) -- 4,776 (M) (65,273)
----------- ----------- ----------- ----------- -----------
Total stockholders' equity 278,903 293,265 -- 144,210 716,378
----------- ----------- ----------- ----------- -----------
$ 681,088 $ 516,226 $ -- $ 190,482 $ 1,387,796
=========== =========== =========== =========== ===========
These unaudited pro forma combined condensed financial statements
reflect an allocation of the merger consideration on February 4, 2004, the date
Belden and CDT signed their merger agreement. The allocation is subject to
change based on finalization of the fair values of the tangible and intangible
assets acquired and liabilities assumed. The analysis below reflects the
one-for-two reverse stock split that occurred immediately prior to the
effective time of the merger, which occurred on July 15, 2004. The calculation
of the merger consideration is as follows:
4
Common stock (21,016 shares at $20.236 per share) ............. $425,280
Restricted common shares vesting (141 shares at $20.236 per
share) ...................................................... 2,853
Fair value of CDT options converted to Belden CDT stock
options ..................................................... 9,845
--------
437,978
Direct cost of merger ......................................... 6,197
--------
Total merger consideration .................................. 444,175
Historical book value of CDT's assets and
liabilities-- April 30, 2004 ................................ 293,265
--------
Excess of merger consideration over historical book value ..... $150,910
========
The value of the CDT common stock used to determine the overall merger
consideration was calculated using the average closing price of the stock from
February 2, 2004 to February 6, 2004.
Outstanding options (after giving effect to the reverse stock split)
to purchase a total of 1,969 shares of CDT common stock were converted into a
total of 1,969 options to purchase Belden CDT common stock and those options
fully vested on the effective date of the merger. The fair value of these
options was determined using the Black-Scholes option pricing model with the
following assumptions:
Expected volatility: ............... 41.10%
Risk free interest rate: ........... 2.46%
Expected life of options (years) ... 3.7
Expected dividend yield: ........... 5.40%
The merger consideration was allocated to the preliminary fair values
of CDT's assets acquired and liabilities assumed as of the date the merger. The
excess of the merger consideration over the preliminary fair values of assets
acquired and liabilities assumed was recorded as goodwill.
(1) Reflects the CDT operations that the Company has determined it will
close or sell and will report as discontinued operations.
---------
Notes
(A) Reflects the estimated revaluation of CDT's inventory from book value
to preliminary fair value and the adjustment for product lines the
Company determined it will no longer offer to customers. The inventory
revaluation will result in increased cost of sales as inventory is
sold (estimated to sell during the first 3 to 4 months after the
merger).
CONTINUING DISCONTINUED
OPERATIONS OPERATIONS TOTAL
---------- ------------ -------
Inventory revaluation $ 3,684 $ -- $ 3,684
Product line curtailment (4,251) (3,791) (8,042)
------- ------- -------
$ (567) $(3,791) $(4,358)
======= ======= =======
(B) Reflects the estimated revaluation of CDT's property and equipment
from book value to preliminary fair value. The preliminary fair value
adjustments for the CDT property and equipment are summarized below:
CONTINUING DISCONTINUED
OPERATIONS OPERATIONS TOTAL
---------- ------------ --------
Land ..................... $ (1,796) $ 255 $ (1,541)
Buildings ................ 3,657 (2,899) 758
Machinery and equipment .. (916) (10,887) (11,803)
Furniture and fixtures ... (1,049) (183) (1,232)
5
Vehicles ................. (378) -- (378)
-------- -------- --------
$ (482) $(13,714) $(14,196)
======== ======== ========
Depreciation expense for continuing operations will decrease by
approximately $195 per year or $97 for six months as a result of the
preliminary net writedown.
(C) Reflects the adjustment for backlog of confirmed customer purchase
orders and contracts, trademarks, customer relationships, patents and
goodwill from book value to preliminary fair market value. The
preliminary fair value adjustments for CDT's identified intangible
assets and goodwill are summarized below:
PRELIMINARY AMORTIZATION
FAIR VALUE PERIOD ANNUAL
ADJUSTMENT (YEARS) AMORTIZATION
---------- ------------ -------------
Backlog .......................... $ 662 1 $ 662
Customer contracts ............... 924 3 to 4 264
Customer relationships ........... 37,944 15 to 30 1,577
Patents .......................... 5,469 20 320
Trademarks ....................... 22,567 None --
-------- --------
Identified intangible assets ... 67,566 2,822
Goodwill ......................... 143,327 None
-------- --------
$210,893 $ 2,822
======== ========
(D) Reflects the elimination of CDT's pension intangible asset and CDT's
deferred financing fees. These items are summarized below:
Pension intangible asset... $(1,643)
Deferred financing fees.... (214)
-------
$(1,857)
(E) Reflects the accrual of preliminary estimates of change of control
payments and integration incentive costs, severance, facility exiting
costs, and the elimination of a payable of $2,200 recognized by Belden
related to its 2002 purchase of the Norcom operations from CDT.
CONTINUING DISCONTINUED
OPERATIONS OPERATIONS TOTAL
---------- ------------ -------
Change in control and integration incentive costs $10,785 $ -- $10,785
Severance 4,414 4,189 8,603
Facility exiting costs 10,061 1,104 11,165
Norcom purchase liability -- (2,200) (2,200)
-------- ------- --------
$25,260 $ 3,093 $28,353
======= ======= =======
(F) Reflects the adjustment to record CDT's postretirement benefits
liability at an amount equal to the preliminary accumulated
postretirement benefits obligation less the fair value of plan assets.
(G) Reflects the net deferred tax liability on preliminary fair value
adjustments of identified assets and liabilities.
CONTINUING DISCONTINUED
OPERATIONS OPERATIONS TOTAL
---------- ------------ --------
Identified asset preliminary adjustments, net $ 64,660 $(10,805) $ 53,855
Identified liability preliminary adjustments (38,683) 992 (37,691)
-------- -------- --------
Net taxable temporary differences 25,977 (9,813) 16,164
Effective tax rate 37% 37% 37%
-------- -------- --------
Deferred tax liability 9,611 (3,630) 5,981
Valuation allowance 2,600 -- 2,600
-------- -------- --------
$ 12,211 $ (3,630) $ 8,581
======== ======== ========
(H) Reflects the adjustment to record CDT's pension liability at an amount
equal to the preliminary projected
6
benefit obligation less the fair value of plan assets (continuing
operations $5,896, discontinued operations $415).
(I) Reflects the elimination of a payable of $4,500 recognized by Belden
related to its 2002 purchase of the Norcom operations from CDT.
(J) Reflects the reduction in par value related to CDT's one-for-two
reverse stock split.
(K) Reflects the adjustment to additional paid in capital to record the
impact of the acquisition and the revaluation of common stock.
(L) Reflects the elimination of CDT's equity accounts (including the
charge for a minimum pension liability of $2,826 in accumulated other
comprehensive income/(loss)).
(M) Reflects the elimination of Belden's treasury stock as a result of its
cancellation in the merger agreement.
7
BELDEN CDT INC. UNAUDITED PRO FORMA
COMBINED CONDENSED STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
FOR THE SIX MONTHS ENDED
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CDT
JUNE 30, APRIL 30, DISCONTINUED
2004 2004 OPERATIONS PRO
BELDEN CDT PRO FORMA (1) PRO FORMA FORMA
AMOUNTS AMOUNTS ADJUSTMENTS ADJUSTMENTS NOTE COMBINED
---------- ---------- ------------- ----------- ---- ---------
Revenues $ 354,410 $ 270,120 $ (33,501) $ -- $ 591,029
Cost of Sales 288,933 212,830 (31,372) 3,587 (A) 473,978
--------- --------- --------- --------- ---------
Gross Profit 65,477 57,290 (2,129) (3,587) 117,051
Selling, general and administrative expenses 49,458 51,230 (2,811) (1,082) (B) 96,795
Other operating expenses/(earnings) -- (136) -- -- (136)
--------- --------- --------- --------- ---------
Operating earnings/(loss) 16,019 6,196 (2,505) 20,392
682
Nonoperating expenses/(earnings) (1,732) 61 -- (1,833)
(162)
Interest expense 6,333 2,646 (32) (396) (C) 8,551
--------- --------- --------- --------- ---------
Income/(loss) from continuing operations
before taxes and minority interest 11,418 3,489 876 (2,109) 13,674
Income tax expense/(benefit) 3,140 2,784 536 (780) (D) 5,680
--------- --------- --------- --------- ---------
Income/(loss) from continuing operations
before minority interest 8,278 705 340 (1,329) 7,994
Minority interest, net -- (518) -- -- (518)
--------- --------- --------- --------- ---------
Income/(loss) from continuing operations $ 8,278 $ 187 $ 340 $ (1,329) $ 7,476
========= ========= ========= ========= =========
Basic average shares outstanding 25,504 21,008 46,512
Basic earnings per share from continuing
operations $ 0.32 $ 0.01 $ 0.16
Diluted average shares outstanding 25,827 21,096 46,923
Diluted earnings per share from continuing
Operations, $ 0.32 $ 0.01 $ 0.16
The following is a summary of the weighted average basic and diluted
shares used to calculate earnings per share. The CDT shares are adjusted to
give effect to the one-for-two reverse stock split.
COMMON
BASIC EQUIVALENT DILUTED
------ ---------- -------
Belden ... 25,504 323 25,827
CDT ...... 21,008 88 21,096
------ ------ ------
46,512 411 46,923
CDT common equivalent shares do not include the "if converted" effect
for CDT's convertible debt because it would be antidilutive.
(1) Reflects the CDT operations that the Company has determined it will
close or sell and will report as discontinued operations.
Notes
(A) Reflects the lower depreciation expense of $(97) on the property and
equipment writedown from book value to preliminary fair value and the
estimated revaluation of CDT's inventory from book value to
preliminary fair value of $3,684.
(B) Reflects the additional amortization expense on the intangibles
preliminary fair value and the reversal of merger expenses recorded by
CDT that were included in its unaudited historical statement of
operations for the six month period ended April 30, 2004:
Intangibles amortization..... $ 1,411
Merger expenses.............. (2,493)
-------
$(1,082)
=======
(C) Reflects the elimination of CDT's deferred financing fee amortization.
(D) Reflects the blended effective tax rate of 37% on the pro forma
adjustments.
8
BELDEN CDT INC. UNAUDITED PRO FORMA
COMBINED CONDENSED STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
FOR THE TWELVE MONTHS ENDED
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CDT
DECEMBER 31, JANUARY 31, DISCONTINUED
2003 2004 OPERATIONS PRO
BELDEN CDT PRO FORMA (1) PRO FORMA FORMA
AMOUNTS AMOUNTS RECLASSIFICATION ADJUSTMENTS NOTES COMBINED
----------- ----------- ---------------- ----------- ----- -----------
Revenues $ 624,106 $ 503,445 $ (59,145) $ -- $ 1,068,406
Cost of Sales 503,486 391,517 (55,358) 3,489 (A) 843,134
----------- ----------- ----------- ----------- -----------
Gross Profit 120,620 111,928 (3,787) (3,489) 225,272
Selling, general and administrative
expenses 94,717 97,931 (6,458) 329 (B) 186,519
Other operating expenses/(earnings) 352 3,797 -- -- 4,149
----------- ----------- ----------- ----------- -----------
Operating earnings/(loss) 25,551 10,200 2,671 (3,818) 34,604
Nonoperating expenses/(earnings) -- (391) (550) -- (941)
CDTInterest expense 12,571 4,942 (195) (463) (C) 16,855
----------- ----------- ----------- ----------- -----------
Income/(loss) from continuing
operations before taxes and
minority interest 12,980 5,649 3,416 (3,355) 18,690
Income tax expense/(benefit) 3,851 3,770 1,115 (1,241) (D) 7,495
----------- ----------- ----------- ----------- -----------
Income/(loss) from continuing
operations before minority
interest 9,129 1,879 2,301 (2,114) 11,195
Minority interest, net -- (2,164) -- -- (2,164)
----------- ----------- ----------- ----------- -----------
Income/(loss) from continuing
operations $ 9,129 $ (285) $ 2,301 $ (2,114) $ 9,031
=========== =========== =========== =========== ===========
Basic average shares outstanding 25,158 21,527 46,685
Basic earnings/(loss) per share from
continuing operations $ 0.36 $ (0.01) $ 0.19
Diluted average shares outstanding 25,387 21,527 46,986
Diluted earnings/ (loss) per share
from continuing operations $ 0.36 $ (0.01) $ 0.19
The following is a summary of the weighted average basic and diluted
shares used to calculate earnings per share. The CDT shares are adjusted to
give effect to the one-for-two reverse stock split.
COMMON
BASIC EQUIVALENT DILUTED
------ ---------- -------
Belden..... 25,158 229 25,387
CDT........ 21,527 72 21,599
------ ---- ------
46,685 301 46,986
CDT common equivalent shares do not include the "if converted" effect
for CDT's convertible debt because it would be antidilutive.
(1) Reflects the CDT operations that the Company has determined it will
close or sell and will report as discontinued operations.
Notes
(A) Reflects the lower depreciation expense of ($195) on the property and
equipment writedown from book value to preliminary fair value and the
estimated revaluation of CDT's inventory from book value to
preliminary fair value of $3,684.
(B) Reflects the additional amortization expense on the intangibles
preliminary fair value and the reversal of merger expenses recorded by
CDT that were included in its unaudited historical statement of
operations for the twelve month period ended January 31, 2004:
Intangibles amortization..... $ 2,822
Merger expenses.............. (2,493)
-------
9
$ 329
=======
(C) Reflects the elimination of CDT's deferred financing fee amortization.
(D) Reflects the blended effective tax rate of 37% on the pro forma
adjustments.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
BELDEN CDT INC.
Date: September 28, 2004 By: /s/ Richard K. Reece
---------------------------
Richard K. Reece
Vice President, Finance and
Chief Financial Officer