Cable Design (NYSE:CDT)
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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/