67 WALL STREET, New York - May 24, 2013 - The Wall Street Transcript has just published its Industrial Equipment, Aerospace and Defense Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Commercial Aviation and Energy Expenditures - Industrial Restructuring - Emerging Markets Penetration - Heightened M&A Activity - Defense Budget Uncertainty - Capital Equipment Technology Investing
Companies include: Belden, Inc. (BDC) and many more.
In the following excerpt from the Industrial Equipment, Aerospace and Defense Report, the SVP Finance and CFO of Belden Inc. (BDC) discusses company strategy and the outlook for this vital industry:
TWST: Last year the company made some changes to its portfolio. You had a few acquisitions - Miranda Technologies and PPC - as well as the sale of consumer electronics assets and some other businesses. What was the strategic reasoning or value behind those transactions, and how does that fit into the company's overall business plan going forward?
Mr. Derksen: 2012 was a very busy year for us here at Belden. It was also a very exciting year, because we felt that it allowed us to enter this new phase in the transformation of the company. By these strategic actions, we have successfully transitioned nearly 35% of our revenue to higher margin products applied in faster growing markets, so the business model has changed quite substantially. Remember that we want to sell solutions to the attractive markets that we operate in, and where we cannot build a solution, we are unlikely to achieve the growth and profitability we require.
The consumer electronics market was very challenging for us. We sold, effectively, a component into an assembly house, and margins were very unlikely to reach the corporate average and our margin goals of 14% to 16%. The business was substantially breaking even - to divest that business was a fairly straight-forward decision, and it was the right decision for us. The decision to divest our Thermax and Raydex cable businesses - again, component-oriented - was mainly made because of the fact that we felt we were unable to build a platform with connectivity, given the consolidation that was going on in the aerospace and defense market.
These businesses were profitable, but the opportunity for growth, given their isolated position as a component supplier, was simply not there. We got a wonderful price for that asset. We felt that reallocating that capital into platforms that offered more attractive acquisition opportunities for us would lever more value to our shareholders. As a result of that, we purchased Miranda, a leading provider in video technology for broadcasters, in August; and later, in December, we acquired PPC. PPC is a market leader for connectors for broadband providers around the world. In the first quarter of this year, the combined impact of adding Miranda and PPC to the company added approximately $100 million in revenues on a year-over-year basis, so a substantial increase in revenues and, more importantly...
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.