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.

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

(314) 854-8000
Registrant’s telephone number, including area code

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, and (2) has been subject to such filing requirements for the past 90 days.

The registrant is not a shell company.

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)

Following is the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at May 2, 2008
Common Stock, $0.01 Par Value		43,749,726

 

 

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

BELDEN INC.
CONSOLIDATED BALANCE SHEETS

		March 30,				December 31,
		2008				2007
		(Unaudited)
		(In thousands)
ASSETS
Current assets:
Cash and cash equivalents		$	196,842			$	159,964
Receivables, net			370,882				373,108
Inventories, net			262,687				257,540
Deferred income taxes			28,931				28,578
Other current assets			17,313				17,392
Total current assets			876,655				836,582
Property, plant and equipment, less accumulated depreciation			328,516				369,803
Goodwill			704,399				648,882
Intangible assets, less accumulated amortization			157,484				154,786
Other long-lived assets			65,414				58,796
		$	2,132,468			$	2,068,849
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	375,693			$	350,047
Current maturities of long-term debt			110,000				110,000
Total current liabilities			485,693				460,047
Long-term debt			350,000				350,000
Postretirement benefits			103,387				98,084
Deferred income taxes			64,075				78,140
Other long-term liabilities			13,558				9,915
Stockholders’ equity:
Preferred stock			—				—
Common stock			503				503
Additional paid-in capital			642,524				638,690
Retained earnings			489,790				478,776
Accumulated other comprehensive income			153,975				93,198
Treasury stock			(171,037	)			(138,504	)
Total stockholders’ equity			1,115,755				1,072,663
		$	2,132,468			$	2,068,849

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

BELDEN INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

		Three Months Ended
		March 30, 2008				March 25, 2007
		(In thousands, except per share amounts)
Revenues		$	511,826			$	336,703
Cost of sales			(366,009	)			(246,014	)
Gross profit			145,817				90,689
Selling, general and administrative expenses			(97,715	)			(51,903	)
Research and development			(9,071	)			(146	)
Loss on sale of assets			(884	)			—
Asset impairment			(11,549	)			(1,392	)
Operating income			26,598				37,248
Interest expense			(7,819	)			(2,526	)
Interest income			957				2,743
Other income (expense)			1,168				(2,016	)
Income before taxes			20,904				35,449
Income tax expense			(7,684	)			(13,435	)
Net income		$	13,220			$	22,014
Weighted average number of common shares and equivalents:
Basic			44,139				44,465
Diluted			48,377				51,689
Basic income per share		$	0.30			$	0.50
Diluted income per share		$	0.27			$	0.44
Dividends declared per share		$	0.05			$	0.05

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

BELDEN INC.
CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)

		Three Months				Three Months
		Ended				Ended
		March 30, 2008				March 25, 2007
		(In thousands)
Cash flows from operating activities:
Net income		$	13,220			$	22,014
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			13,758				8,541
Share-based compensation			3,287				1,760
Provision for excess and obsolete inventories			1,660				2,786
Asset impairment			11,549				1,392
Loss on disposal of tangible assets			884				—
Pension funding in excess of pension expense			(2,650	)			(2,005	)
Excess tax benefits related to share-based compensation			(895	)			(5,370	)
Changes in operating assets and liabilities, net of the effects of currency exchange rate changes and business acquisitions and disposals:
Receivables			1,091				(11,928	)
Inventories			(3,927	)			8,129
Accounts payable and accrued liabilities			(8,709	)			11,416
Income taxes			8,145				7,918
Other assets and liabilities, net			(6,721	)			(5,038	)
Net cash provided by operating activities			30,692				39,615
Cash flows from investing activities:
Proceeds from disposal of tangible assets			39,140				6,911
Capital expenditures			(6,905	)			(11,415	)
Cash used for other investing activities			(61	)			—
Net cash provided by (used for) investing activities			32,174				(4,504	)
Cash flows from financing activities:
Proceeds from exercise of stock options			4,300				24,584
Excess tax benefits related to share-based compensation			895				5,370
Payments under share repurchase program			(36,298	)			—
Cash dividends paid			(2,251	)			(2,264	)
Proceeds received under borrowing arrangements			—				475,000
Payments under borrowing arrangements			—				(187,000	)
Debt issuance costs			—				(9,524	)
Net cash provided by (used for) financing activities			(33,354	)			306,166
Effect of foreign currency exchange rate changes on cash and cash equivalents			7,366				7,102
Increase in cash and cash equivalents			36,878				348,379
Cash and cash equivalents, beginning of period			159,964				254,151
Cash and cash equivalents, end of period		$	196,842			$	602,530

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

BELDEN INC.
CONSOLIDATED STOCKHOLDERS’ EQUITY STATEMENTS
THREE MONTHS ENDED MARCH 30, 2008 AND MARCH 25, 2007
(Unaudited)

																										Accumulated Other
																										Comprehensive Income (Loss)
																										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, 2006			50,335			$	503			$	591,416			$	348,069				(6,184	)		$	(111,100	)		$	44,841			$	(29,828	)		$	843,901
Net income															22,014																				22,014
Foreign currency translation																											5,070								5,070
Comprehensive income																																			27,084
Exercise of stock options											24,584								810																24,584
Share-based compensation, net of tax withholding forfeitures											7,651								(6	)			(313	)											7,338
Adoption of FIN No. 48															2,684																				2,684
Dividends ($.05 per share)															(2,264	)																			(2,264	)
Balance at March 25, 2007			50,335			$	503			$	623,651			$	370,503				(5,380	)		$	(111,413	)		$	49,911			$	(29,828	)		$	903,327
Balance at December 31, 2007			50,335			$	503			$	638,690			$	478,776				(5,742	)		$	(138,504	)		$	108,720			$	(15,522	)		$	1,072,663
Net income															13,220																				13,220
Foreign currency translation																											60,777								60,777
Comprehensive income																																			73,997
Exercise of stock options, net of tax withholding forfeitures											1,256								148				3,036												4,292
Release of restricted stock, net of tax withholding forfeitures											(1,611	)							50				729												(882	)
Share-based compensation											4,189																								4,189
Share repurchase program																			(900	)			(36,298	)											(36,298	)
Dividends ($0.05 per share)															(2,206	)																			(2,206	)
Balance at March 30, 2008			50,335			$	503			$	642,524			$	489,790				(6,444	)		$	(171,037	)		$	169,497			$	(15,522	)		$	1,115,755

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, 2007:

	•		Are prepared from the books and records without audit, and
	•		Are prepared in accordance with the instructions to 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 2007 Annual Report on Form 10-K.

Business Description

We design, manufacture, and market signal transmission solutions, including cable, connectivity and active components for mission-critical applications in markets ranging from industrial automation to data centers, broadcast studios, and aerospace.

Reporting Periods

Our fiscal year and fiscal fourth quarter both end on December 31. Typically, our fiscal first, second and third quarter each end on the last Sunday falling on or before their respective calendar quarter-end. The three months ended March 30, 2008 and March 25, 2007 include 90 and 84 calendar days, respectively.

Reclassifications

We have made certain reclassifications to the 2007 Consolidated Financial Statements with no impact to reported net income in order to conform to the 2008 presentation.

Contingent Liabilities

We have established liabilities for environmental and legal contingencies that are probable of occurrence and reasonably estimable. We accrue environmental remediation costs, on an undiscounted basis, 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.

At March 30, 2008, we were party to unused bank guaranties, unused standby letters of credit, and surety bonds totaling $7.4 million, $6.1 million, and $2.6 million, respectively.

Current-Year Adoption of Accounting Pronouncements

On January 1, 2008, we adopted Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements. This Statement establishes a framework for measuring fair value within generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. This Statement does not require any new fair value measurements following generally accepted accounting principles. However, the definition of fair value in SFAS No. 157 may affect assumptions used by companies in determining fair value. Adoption of SFAS No. 157 did not have a material impact on our operating results, cash flows and financial condition.

On January 1, 2008, we adopted SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. This Statement permits entities to choose to measure many financial instruments and certain other items at fair value in an effort to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently. Adoption of SFAS No. 159 did not have a material impact on our operating results, cash flows and financial condition as we elected not to use the fair value measurement option on our financial instruments and other applicable items.

Pending Adoption of Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations, which replaces SFAS No. 141 and retains the fundamental requirements in SFAS No. 141, including that the purchase method be used for all business combinations and for an acquirer to be identified for each business combination. This standard defines the acquirer as the entity that obtains control of one or more businesses in the business combination and establishes the acquisition date as the date that the acquirer achieves control instead of the date that the consideration is transferred. SFAS No. 141(R) requires an acquirer in a business combination to recognize the assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date, with limited exceptions. It also requires the recognition of assets acquired and liabilities assumed arising from certain contractual contingencies as of the acquisition date, measured at their acquisition-date fair values. SFAS No. 141(R) becomes effective for us for any business combination with an acquisition date on or after January 1, 2009. We are currently evaluating the potential impact of SFAS No. 141(R) on our operating results, cash flows and financial condition.

Note 2: Acquisitions

During 2007, we completed three acquisitions. We acquired Hirschmann Automation and Control GmbH (Hirschmann) on March 26, 2007 for $258.0 million. Hirschmann has its headquarters in Germany and is a leading supplier of industrial ethernet solutions and industrial connectivity. The acquisition of Hirschmann enables us to deliver connectivity and networking solutions for demanding industrial environments and large-scale infrastructure projects worldwide. On March 27, 2007, we acquired LTK Wiring Co. Ltd. (LTK), a Hong Kong company, for $214.4 million. LTK is one of the largest manufacturers of electronic cable for the China market. LTK gives us a strong presence in China among OEM customers, including consumer electronics manufacturers. On April 30, 2007, we purchased the assets of Lumberg Automation Components (Lumberg Automation) for $117.5 million. Lumberg

Automation has its headquarters in Germany and is a leading supplier of industrial connectors, high performance cord-sets and fieldbus communication components for factory automation machinery. Lumberg Automation complements the industrial connectivity portfolio of Hirschmann as well as our expertise in signal transmission. The results of operations of each acquisition have been included in our results of operations from their respective acquisition dates. Hirschmann and Lumberg Automation are included in the Europe, Middle East and Africa (EMEA) segment, and LTK is included in the Asia Pacific segment.

All three acquisitions were cash transactions and were valued in total at $589.9 million, including transaction costs. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed (in thousands).

Current assets		$	235,092
Property, plant and equipment			96,243
Goodwill			375,814
Intangible assets			88,629
Other assets			29,014
Assets acquired			824,792
Liabilities assumed			234,915
Net assets acquired		$	589,877

The allocation above differs from our allocation as of December 31, 2007 primarily due to the following adjustments, which all impacted goodwill:

	•		a $13.9 million decrease in the estimated fair value of property, plant and equipment;
	•		a $23.9 million accrual for restructuring costs related to finalizing certain plans to realign portions of the acquired businesses;
	•		a $4.3 million accrual for unfavorable lease agreements and service provider contracts; and
	•		a $4.5 million increase to current deferred tax assets, and a $10.6 million decrease to long-term deferred tax liabilities related to the adjustments described above.

The above purchase price allocation related to Lumberg Automation is preliminary and is subject to revision as more detailed analyses are completed and additional information becomes available related to restructuring costs and the fair value of certain assets. Management expects to complete its restructuring plans and fair value analyses during the second quarter of 2008. Any change in the fair value of the acquired net assets, any restructuring costs, and resolution of income tax uncertainties will change the amount of the purchase price allocable to goodwill.

Note 3: Operating Segments

We conduct our operations through four reported operating segments—Belden Americas, Specialty Products, EMEA, and Asia Pacific.

Finance and administration costs reflected in the column entitled F&A in the following tables represent corporate headquarters operating and treasury expenses. Amounts reflected in the column entitled Eliminations represent the eliminations of affiliate revenues and affiliate cost of sales.

		Belden				Specialty								Asia
		Americas				Products				EMEA				Pacific				F&A				Eliminations				Total
		(In thousands)
Three Months Ended March 30, 2008
Total assets		$	356,539			$	197,586			$	1,531,860			$	366,685			$	1,065,033			$	(1,385,235	)		$	2,132,468
External customer revenues			186,278				53,432				184,563				87,553				—				—				511,826
Affiliate revenues			19,828				18,345				6,056				—				—				(44,229	)			—
Operating income (loss)			31,281				(7,082	)			16,909				8,897				(13,896	)			(9,511	)			26,598
Three Months Ended March 25, 2007
Total assets		$	388,806			$	213,079			$	1,132,565			$	28,728			$	916,812			$	(966,440	)		$	1,713,550
External customer revenues			186,298				56,653				81,948				11,804				—				—				336,703
Affiliate revenues			11,278				12,423				2,708				—				—				(26,409	)			—
Operating income (loss)			34,308				10,315				3,802				1,527				(7,940	)			(4,764	)			37,248

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

		Three Months Ended
		March 30, 2008				March 25, 2007
		(In thousands)
Operating income		$	26,598			$	37,248
Interest expense			(7,819	)			(2,526	)
Interest income			957				2,743
Other income (expense)			1,168				(2,016	)
Income before taxes		$	20,904			$	35,449

Note 4: Income per Share

The following table presents the basis of the income per share computation:

		March 30,				March 25,
Three Months Ended		2008				2007
		(in thousands, except per share amounts)
Numerator for basic income per share:
Net income		$	13,220			$	22,014
Numerator for diluted income per share:
Net income			13,220				22,014
Tax-effected interest expense on convertible subordinated debentures			—				678
Adjusted net income		$	13,220			$	22,692
Denominator:
Denominator for basic income per share—weighted average shares			44,139				44,465
Effect of dilutive common stock equivalents			4,238				7,224
Denominator for diluted income per share—adjusted weighted average shares			48,377				51,689

Note 5: Inventories

The major classes of inventories were as follows:

		March 30,				December 31,
		2008				2007
		(In thousands)
Raw materials		$	82,511			$	78,847
Work-in-process			58,188				57,562
Finished goods			139,123				136,305
Perishable tooling and supplies			4,489				4,355
Gross inventories			284,311				277,069
Obsolescence and other reserves			(21,624	)			(19,529	)
Net inventories		$	262,687			$	257,540

Note 6: Long-Lived Assets

Disposals

In March 2008, we sold and leased back under a normal sale-leaseback certain Belden Americas segment real estate in Mexico. The sales price was $25.0 million, and we recognized a loss of $0.9 million on the transaction. The lease term is 15 years with an option to renew up to an additional 10 years. Of the $25.0 million sales price, $24.0 million was received in the first quarter of 2008. The remaining $1.0 million was received in the second quarter of 2008.

In January 2008, we sold our assembly operation in the Czech Republic for $8.2 million. We did not recognize a significant gain or loss on the transaction.

During the first quarter of 2007, we sold certain Belden Americas segment real estate and equipment in South Carolina and Vermont for $6.7 million cash. We did not recognize a significant gain or loss on these transactions.

Impairments

During the first quarter of 2008, we recognized an impairment loss of $7.3 million in the operating results of our Specialty Products segment due to the decision to close our manufacturing facility in Manchester, Connecticut. We also recognized impairment losses of $3.8 million and $0.4 million in the operating results of our Specialty Products and Belden Americas segments, respectively, related to our decision to consolidate capacity and dispose of excess machinery and equipment.

During the first quarter of 2007, we determined that certain asset groups related to our plants in the Czech Republic and the Netherlands were impaired due to product portfolio management and product sourcing actions. We estimated the fair market value of these long-lived assets based upon anticipated net proceeds from their eventual sale and recognized an impairment loss of $1.4 million in the operating results of our EMEA segment.

Depreciation and Amortization Expense

We recognized depreciation expense of $11.2 million and $7.8 million in the three-month periods ended March 30, 2008 and March 25, 2007, respectively.

We recognized amortization expense related to our intangible assets of $2.6 million and $0.7 million in the three-month periods ended March 30, 2008 and March 25, 2007, respectively.

Note 7: Restructuring Activities

EMEA Restructuring

In the first quarter of 2008, we finalized certain plans to realign our EMEA operations in order to consolidate manufacturing capacity. We recognized $28.7 million of restructuring costs related to these realignment plans, including $23.9 million that was accounted for through purchase accounting and $4.8 million that was charged to the statement of operations. We expect to incur additional restructuring charges in 2008 of approximately $2 million related to these realignment plans. In prior years, we announced various decisions to restructure certain EMEA operations in an effort to reduce manufacturing floor space and overhead, starting with the closures of a manufacturing facility in Sweden and sales offices in the United Kingdom and Germany, as well as product portfolio actions in the Czech Republic and the Netherlands. We do not expect to recognize additional costs related to these prior year restructuring activities.

Voluntary Separation Program

In 2007, we announced a voluntary separation program primarily for associates in the United States who are at least 50 years of age and have 10 years of service with the Company. We recognized $6.5 million of severance costs ($3.5 million in SG&A expenses and $3.0 million in cost of sales) in the first quarter of 2008. Severance costs of $3.5 million, $2.4 million, and $0.6 million were recognized by the Belden Americas segment, the Specialty Products segment and F&A, respectively. To date, we have recognized severance costs totaling $7.2 million related to these activities. We do not expect to recognize additional costs related to this program.

Reduction in Force

Beginning in 2006, we identified certain positions throughout the organization for elimination in an effort to reduce production, selling, and administration costs. In the first quarter of 2008, we recognized severance costs totaling $0.6 million ($0.4 million in cost of sales and $0.2 million in SG&A expenses) related to North America position eliminations in the Specialty Products segment. To date, we have recognized severance costs totaling $4.8 million related to these activities. We do not expect to recognize additional costs related to these restructuring activities.

The following table sets forth restructuring activity that occurred during the three months ended March 30, 2008:

										Voluntary
		EMEA				Reduction				Separation
(In thousands)		Restructuring				in Force				Program
Balance at December 31, 2007		$	759			$	967			$	707
New charges			4,826				612				6,479
Purchase accounting			23,850				—				—
Cash payments			(45	)			(188	)			(209	)
Foreign currency translation			4,040				4				—
Other adjustments			—				(18	)			—
Balance at March 30, 2008		$	33,430			$	1,377			$	6,977

The Company continues to review its business strategies and evaluate further restructuring actions. This could result in additional restructuring costs in future periods.

Note 8: Long-Term Debt and Other Borrowing Arrangements

Senior Subordinated Notes

In 2007, we completed an offering of $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 domestic subsidiaries. The notes rank senior to our convertible subordinated debentures, rank equal in right of payment with any of our future senior subordinated debt, and 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.

Convertible Subordinated Debentures

On April 20, 2007, we completed the exchange of $110.0 million aggregate principal of new 4.0% convertible subordinated debentures due 2023 for $110.0 million aggregate principal outstanding of the previous 4.0% convertible subordinated debentures due 2023. The new convertible debentures contain a net share settlement feature requiring us upon conversion to pay the principal amount in cash and to pay any conversion consideration in excess of the principal amount in shares of our common stock. The previous debentures were convertible only into shares of our common stock. We may call some or all of the debentures on or after July 21, 2008. Holders may surrender their debentures for conversion into cash and shares of common stock upon satisfaction of any of the following conditions: (1) the closing sale price of our common stock is at least 110% of the conversion price for a minimum of 20 days in the 30 trading-day period ending on the trading day prior to surrender; (2) the senior implied rating assigned to us by Moody’s Investors Service, Inc. is downgraded to B2 or below and the corporate credit rating assigned to us by Standard & Poor’s is downgraded to B or below; (3) we have called the debentures for redemption; or, (4) upon the occurrence of certain corporate transactions as specified in the indenture. As of March 30, 2008, condition (1) had been satisfied. Because the holders of these debentures may at their election currently tender them for conversion, we have classified the obligations as a current liability. As of March 30, 2008, the debentures are convertible into cash of $110.0 million and approximately 3.1 million shares of common stock based on a conversion price of $17.679. To date, no holders of the debentures have surrendered their debentures for conversion into cash and shares of our common stock.

Interest of 4.0% is payable semiannually in arrears, on January 15 and July 15. The debentures mature on July 15, 2023, if not previously redeemed.

Medium-Term Notes

On February 16, 2007, we redeemed our medium-term notes in the aggregate principal amount of $62.0 million. In connection therewith, we paid a make-whole premium of approximately $2.0 million which was recognized as other expense in the Consolidated Statements of Operations. The redemption was made with cash on hand.

Senior Secured Credit Facility

We have a senior secured credit facility with a $350.0 million commitment. The facility matures in 2011, has a variable interest rate based on LIBOR and is secured by our overall cash flow and certain of our assets in the United States. The facility contains certain financial covenants, including maintenance of maximum leverage and minimum fixed charge coverage ratios, with which we are required to comply. At March 30, 2008, there were no outstanding borrowings under the facility, we had $346.8 million in available borrowing capacity, and we were in compliance with the covenants required by the facility.

Note 9: Income Taxes

Tax expense of $7.7 million for the three months ended March 30, 2008 resulted from income before taxes of $20.9 million. The difference between the effective rate reflected in the provision for income taxes on income before taxes and the amount determined by applying the applicable statutory United States tax rate for the three months ended March 30, 2008 is analyzed below:

Three Months Ended March 30, 2008		Amount				Rate
		(in thousands, except rate data)
United States federal statutory rate		$	7,317				35.0	%
State and local income taxes			50				0.2
Decrease in deferred tax asset valuation allowance			(641	)			(3.0	)
Increase in uncertain tax positions			58				0.3
Effect of foreign tax rate changes on deferred taxes			1,974				9.4
Foreign income tax rate differences and other, net			(1,074	)			(5.1	)
Total tax expense		$	7,684				36.8	%

In the first quarter of 2008, we recorded a net increase to income tax expense to reflect the impact of changes to statutory tax rates in several foreign jurisdictions. Income tax expense increased by $2.0 million due to the application of the new statutory rates to deferred tax balances in Germany, Italy, Denmark and China.

Note 10: Pension and Other Postretirement Obligations

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

		Pension Obligations								Other Postretirement Obligations
		March 30,				March 25,				March 30,				March 25,
Three Months Ended		2008				2007				2008				2007
		(In thousands)
Service cost		$	1,400			$	1,494			$	35			$	167
Interest cost			3,229				2,429				653				586
Expected return on plan assets			(3,170	)			(3,119	)			—				—
Amortization of prior service cost			4				4				(54	)			(27	)
Net loss recognition			323				483				171				153
Net periodic benefit cost		$	1,786			$	1,291			$	805			$	879

Note 11: Share Repurchases

In 2007, the Board of Directors authorized the Company to repurchase up to $100.0 million of common stock in the open market or in privately negotiated transactions. In the first quarter of 2008, we repurchased 899,714 shares of our common stock at an aggregate cost of $36.3 million, an average price per share of $40.34. Through March 30, 2008, we have repurchased 1,576,514 shares of our common stock at an aggregate cost of $68.0 million resulting in $32.0 million remaining under this share repurchase program.

Note 12: Supplemental Guarantor Information

In 2007, Belden Inc. (the Issuer) issued $350.0 million aggregate principal amount of 7.0% senior subordinated notes due 2017. The notes rank senior to our convertible subordinated debentures, rank equal in right of payment with any of our future senior subordinated debt, and 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. Belden Inc. and its current and future material domestic subsidiaries have fully and unconditionally guaranteed the notes on a joint and several basis. The following consolidating financial information presents information about the Issuer, guarantor subsidiaries and non-guarantor subsidiaries. Investments in subsidiaries are accounted for on the equity basis. Intercompany transactions are eliminated.

Supplemental Condensed Consolidating Balance Sheets

		March 30, 2008
										Non-
						Guarantor				Guarantor
		Issuer				Subsidiaries				Subsidiaries				Eliminations				Total
										(In thousands)
ASSETS
Current assets:
Cash and cash equivalents		$	—			$	36,185			$	160,657			$	—			$	196,842
Receivables, net			7				92,574				278,301				—				370,882
Inventories, net			—				124,406				138,281				—				262,687
Deferred income taxes			—				(6,509	)			35,440				—				28,931
Other current assets			1,148				4,602				11,563				—				17,313
Total current assets			1,155				251,258				624,242				—				876,655
Property, plant and equipment, less accumulated depreciation			—				119,734				208,782				—				328,516
Goodwill			—				248,936				455,463				—				704,399
Intangible assets, less accumulated amortization			—				53,523				103,961				—				157,484
Investment in subsidiaries			1,070,164				659,858				—				(1,730,022	)			—
Other long-lived assets			7,352				5,840				52,222				—				65,414
		$	1,078,671			$	1,339,149			$	1,444,670			$	(1,730,022	)		$	2,132,468
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	5,450			$	131,199			$	239,044			$	—			$	375,693
Current maturities of long-term debt			110,000				—				—				—				110,000
Total current liabilities			115,450				131,199				239,044				—				485,693
Long-term debt			350,000				—				—				—				350,000
Postretirement benefits			—				17,616				85,771				—				103,387
Deferred income taxes			—				41,932				22,143				—				64,075
Other long-term liabilities			5,212				3,403				4,943				—				13,558
Intercompany accounts			95,804				(387,447	)			291,643				—				—
Total stockholders’ equity			512,205				1,532,446				801,126				(1,730,022	)			1,115,755
		$	1,078,671			$	1,339,149			$	1,444,670			$	(1,730,022	)		$	2,132,468

		December 31, 2007
										Non-
						Guarantor				Guarantor
		Issuer				Subsidiaries				Subsidiaries				Eliminations				Total
										(In thousands)
ASSETS
Current assets:
Cash and cash equivalents		$	—			$	13,947			$	146,017			$	—			$	159,964
Receivables, net			—				100,091				273,017				—				373,108
Inventories, net			—				119,585				137,955				—				257,540
Deferred income taxes			—				(6,509	)			35,087				—				28,578
Other current assets			1,986				4,910				10,496				—				17,392
Total current assets			1,986				232,024				602,572				—				836,582
Property, plant and equipment, less accumulated depreciation			—				133,882				235,921				—				369,803
Goodwill			—				248,604				400,278				—				648,882
Intangible assets, less accumulated amortization			—				54,019				100,767				—				154,786
Investment in subsidiaries			923,888				647,642				—				(1,571,530	)			—
Other long-lived assets			7,709				5,547				45,540				—				58,796
		$	933,583			$	1,321,718			$	1,385,078			$	(1,571,530	)		$	2,068,849
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	14,418			$	123,226			$	212,403			$	—			$	350,047
Current maturities of long-term debt			110,000				—				—				—				110,000
Total current liabilities			124,418				123,226				212,403				—				460,047
Long-term debt			350,000				—				—				—				350,000
Postretirement benefits			—				15,486				82,598				—				98,084
Deferred income taxes			—				41,932				36,208				—				78,140
Other long-term liabilities			5,250				2,597				2,068				—				9,915
Intercompany accounts			(79,093	)			(246,038	)			325,131				—				—
Total stockholders’ equity			533,008				1,384,515				726,670				(1,571,530	)			1,072,663
		$	933,583			$	1,321,718			$	1,385,078			$	(1,571,530	)		$	2,068,849

Supplemental Condensed Consolidating Statements of Operations

		Three Months Ended March 30, 2008
										Non-
						Guarantor				Guarantor
		Issuer				Subsidiaries				Subsidiaries				Eliminations				Total
										(In thousands)
Revenues		$	—			$	237,400			$	325,201			$	(50,775	)		$	511,826
Cost of sales			—				(173,430	)			(243,354	)			50,775				(366,009	)
Gross profit			—				63,970				81,847				—				145,817
Selling, general and administrative expenses			(11	)			(40,531	)			(57,173	)			—				(97,715	)
Research and development			—				(1,767	)			(7,304	)			—				(9,071	)
Loss on sale of assets			—				—				(884	)			—				(884	)
Asset impairment			—				(11,549	)			—				—				(11,549	)
Operating income (loss)			(11	)			10,123				16,486				—				26,598
Interest expense			(8,121	)			6				296				—				(7,819	)
Interest income			—				163				794				—				957
Other income			—				—				1,168				—				1,168
Intercompany income (expense)			3,802				(4,609	)			807				—				—
Income (loss) from equity investment in subsidiaries			16,034				12,221				—				(28,255	)			—
Income (loss) before taxes			11,704				17,904				19,551				(28,255	)			20,904
Income tax benefit (expense)			1,516				(1,870	)			(7,330	)			—				(7,684	)
Net income (loss)		$	13,220			$	16,034			$	12,221			$	(28,255	)		$	13,220

		Three Months Ended March 25, 2007
										Non-
						Guarantor				Guarantor
		Issuer				Subsidiaries				Subsidiaries				Eliminations				Total
										(In thousands)
Revenues		$	—			$	227,931			$	154,321			$	(45,549	)		$	336,703
Cost of sales			—				(168,159	)			(123,404	)			45,549				(246,014	)
Gross profit			—				59,772				30,917				—				90,689
Selling, general and administrative expenses			(29	)			(33,518	)			(18,356	)			—				(51,903	)
Research and development			—				(146	)			—				—				(146	)
Asset impairment			—				—				(1,392	)			—				(1,392	)
Operating income (loss)			(29	)			26,108				11,169				—				37,248
Interest expense			(1,935	)			(593	)			2				—				(2,526	)
Interest income			—				2,087				656				—				2,743
Other expense			—				(2,016	)			—				—				(2,016	)
Intercompany income (expense)			1,481				(939	)			(542	)			—				—
Income (loss) from equity investment in subsidiaries			21,391				7,328				—				(28,719	)			—
Income (loss) before taxes			20,908				31,975				11,285				(28,719	)			35,449
Income tax benefit (expense)			1,106				(10,584	)			(3,957	)			—				(13,435	)
Net income (loss)		$	22,014			$	21,391			$	7,328			$	(28,719	)		$	22,014

Supplemental Condensed Consolidating Statements of Cash Flows

		Three Months Ended March 30, 2008
										Non-
						Guarantor				Guarantor
		Issuer				Subsidiaries				Subsidiaries				Eliminations				Total
										(In thousands)
Net cash provided by (used in) operating activities		$	163,596			$	(106,944	)		$	(25,960	)		$	—			$	30,692
Cash flows from investing activities:
Proceeds from disposal of tangible assets			—				20				39,120				—				39,140
Capital expenditures			—				(1,080	)			(5,825	)			—				(6,905	)
Cash used for other investing activities			—				—				(61	)			—				(61	)
Net cash provided by (used for) investing activities			—				(1,060	)			33,234				—				32,174
Cash flows from financing activities:
Proceeds from exercises of stock options			4,300				—				—				—				4,300
Excess tax benefits related to share-based payments			895				—				—				—				895
Payments under share repurchase program			(36,298	)			—				—				—				(36,298	)
Cash dividends paid			(2,251	)			—				—				—				(2,251	)
Intercompany capital contributions			(130,242	)			130,242				—				—				—
Net cash provided by (used for) financing activities			(163,596	)			130,242				—				—				(33,354	)
Effect of currency exchange rate changes on cash and cash equivalents			—				—				7,366				—				7,366
Increase in cash and cash equivalents			—				22,238				14,640				—				36,878
Cash and cash equivalents, beginning of period			—				13,947				146,017				—				159,964
Cash and cash equivalents, end of period		$	—			$	36,185			$	160,657			$	—			$	196,842

		Three Months Ended March 25, 2007
										Non-
						Guarantor				Guarantor
		Issuer				Subsidiaries				Subsidiaries				Eliminations				Total
		(In thousands)
Net cash provided by (used in) operating activities		$	(368,166	)		$	220,253			$	187,528			$	—			$	39,615
Cash flows from investing activities:
Proceeds from disposal of tangible assets			—				6,724				187				—				6,911
Capital expenditures			—				(9,562	)			(1,853	)			—				(11,415	)
Net cash used for investing activities			—				(2,838	)			(1,666	)			—				(4,504	)
Cash flows from financing activities:
Proceeds received under borrowing arrangements			475,000				—				—				—				475,000
Payments under borrowing arrangements			(125,000	)			(62,000	)			—				—				(187,000	)
Cash dividends paid			(2,264	)			—				—				—				(2,264	)
Debt issuance costs			(9,524	)			—				—				—				(9,524	)
Proceeds from exercise of stock options			24,584				—				—				—				24,584
Excess tax benefits related to share-based compensation			5,370				—				—				—				5,370
Intercompany capital contributions			—				(231,127	)			231,127				—				—
Net cash provided by (used for) financing activities			368,166				(293,127	)			231,127				—				306,166
Effect of currency exchange rate changes on cash and cash equivalents			—				—				7,102				—				7,102
Increase (decrease) in cash and cash equivalents			—				(75,712	)			424,091				—				348,379
Cash and cash equivalents, beginning of period			—				136,613				117,538				—				254,151
Cash and cash equivalents, end of period		$	—			$	60,901			$	541,629			$	—			$	602,530