7701 Forsyth Boulevard, Suite 800
Company Perspectives:
Belden CDT, Inc., formed in July 2004 through the merger of Belden In c. and Cable Design Technologies Corp., is one of the largest U.S.-ba sed manufacturers of high-speed electronic cables and focuses on prod ucts for the specialty electronics and data networking markets, inclu ding connectivity.
Belden CDT Inc. operates as one of the largest manufacturers of high- speed electronic cables in the United States. The company serves the electronic, electrical, and communications markets and offers wire, c able, and fiber optic products. Approximately 60 percent of sales ste m from Belden CDT's North American operations, while the remaining re venues are secured in Europe and Asia. The company exited the telecom munications industry when it sold its North American communications a ssets in June 2004. Belden Inc. merged with Cable Design Technologies Corporation (CDT) in July of that year. The company adopted its curr ent moniker upon completion of the deal.
Recognizing a Need in 1902
Belden was founded by Joseph C. Belden in Chicago in 1902. Belden had been working as a purchasing agent for Kellogg Switchboard & Sup ply Company of Chicago but was finding it difficult to locate the hig h-quality, silk-wrapped magnetic wire needed for telephone coils. Rec ognizing the need for this product, Belden, then 26, decided to go in to business for himself, selling shares in the company, called Belden Manufacturing Company, to 11 investors for $25,000 in start-up c apital. Belden served as the company's president until 1939.
The wiring of America was just getting underway, and Belden quickly f ound a market for his product. However, in order to protect itself fr om fluctuations in demand, the company began to expand its product li ne. An initial foray into supply silk-wound wire frames for ladies' h ats proved less successful given caprices of fashion, and Belden quic kly found two new markets--the nascent automotive and electrical appl iance industries--for the company's wire products. Belden's early com mitment to quality helped the company become a leading source of wiri ng and cables for these industries. Early customers included Thomas E dison and Lee De Forest, creator of the radio vacuum tube. By the end of the century's first decade, the company had achieved sales of  6;350,000.
Belden was already establishing its reputation for innovative product development, with strong research and development efforts and a quic k recognition of market opportunities. The increasing use of electric ity demanded better insulation capacities, and in 1910, Belden introd uced its enamel insulation, marketing under the trade name Beldenamel , which would become an industry standard and open the way for such w ire refinements as fine and ultra-fine magnet wire. At the same time, Belden also introduced rubber-covered wire products. The new additio ns to the Belden line helped the company nearly triple its sales to & #36;900,000 by 1913.
Belden next expanded operations to include plastic manufacturing capa bilities, primarily to supply bakelite housings and other products fo r the electrical markets. However, the outbreak of World War I provid ed the company's strongest growth, as Belden supplied wire and cables for such support units as motorized transport and field communicatio ns for the war effort. The company also began receiving orders from E ngland and Russia for enameled copper wire--Belden later discovered t hat its products were used for developing and installing wireless rad io communications, bringing the company into a new market. After the war, Belden continued to supply both the aviation and radio markets. Meanwhile, the company had a two-year backlog of orders from its dome stic customers.
When commercial radio broadcasting began in the 1920s, Belden's low t ension cables, aerial wire, and magnet wire found strong demand. The company also began selling parts to jobbers in the radio industry, be ginning the company's distribution arm. In the late 1920s, Belden ent ered another market with the development of a molded rubber plug. By then, orders for the company's expanded product line were outstrippin g its production capacity, and in 1928 the company opened its second plant, in Richmond, Indiana, which would later become the site of the company's Electronic Division. In that year, also, the company start ed producing for the automotive aftermarket. Four years later, Belden signed a distribution agreement with the recently formed National Au tomotive Parts Association.
Despite the Depression, Belden's diversified product line and its exp ansion into the replacement parts market helped the company continue to grow. In 1939, with sales of $4.9 million, and a net income of $378,000, the company went public, listing on the Midwest Stock Exchange. Joe Belden died in 1939; replacing him was Whipple Jacobs, who had started in the company's cost department as a temporary clerk earning $9.10 a week in 1914. Whipple led Belden into the World War II era, during which, Belden, already a major military supplier, converted much of its production to supply the war effort. Belden als o began introducing new forms of wire insulation using such recently developed chemical compounds as vinyl, nylon, and neoprene, further e xpanding the Belden family of products with Beldure, Nylclad, Formvar , Beldfoil and other brand names. Belden also introduced the first so lderable enamel compound, replacing its Beldenamel with the Celenamel trademark. During the postwar years, Belden continued to supply the electric product markets but also expanded into the new and growing f ields of radar, sonar, and electronics. Whipple stepped down as presi dent, and Charles S. Craigmile, who had started with the company as a n electrical engineer in 1915, was named in his place.
Growth through the 1970s
Belden began its shift toward the television and data processing mark ets as these industries began their commercial growth in the 1950s. B elden's sales continued to grow steadily, and it continued to add cap acity to its Chicago and Richmond plants. By 1965, the company's sale s had grown to $53 million. In that year, Robert W. Hawkinson bec ame the company's president. Hawkinson, who joined Belden in 1945 as an engineer after serving as a fighter-bomber captain in the Army Air Forces during the Second World War, would lead Belden through its ne xt growth phase.
That era began in 1966, when Belden changed its name to Belden Corpor ation and built a plant in Franklin, North Carolina--its first new pl ant since 1938. Over the next three years, the company constructed tw o more plants, one in Pontotoc, Mississippi, and a 170,000-square-foo t site in Jena, Louisiana. The company also went on an acquisition bi nge, acquiring Complete-Reading Electric Company, a distributor of el ectrical motor parts, in 1967. The following year, Belden acquired So uthern Electric Sales Company, based in Dallas, which distributed ele ctrical wire, insulating material, and replacement parts, and Insulat ion & Copper Sales, a Detroit-based distributor of magnet wire, l ead wire, and associated products. Capping the expansion of Belden's distribution business, which gave the company 16 warehouse distributi on centers, was the 1969 stock-swap acquisition of Electrical Special ty Company of San Francisco, adding that company's electrical wire, i nsulating materials, industrial plastics, and shop equipment distribu tion facilities. Meanwhile, Belden was also expanding its production capacity, with the acquisition of General Wire & Cable Company Lt d. of Canada and that company's two manufacturing plants. At the same time, Belden moved to consolidate its research and development opera tions, building the company's Technical Research Center in Geneva, Il linois. Among the products Belden developed during this period was it s Duofoil brand of coaxial cables for master antenna and cable televi sion systems.
By 1970, sales had topped $100 million, and the company began lis ting on the New York Stock Exchange. Helping to fuel this growth was a stepping up of its activity in the automotive aftermarket, which it self was growing rapidly with the steady increases in car sales of th e period. During the 1970s, the company continued to expand its produ ction capacity, adding a 75,000-square-foot automotive aftermarket fa cility to its Jena plant, while adding new plants in Dumas, Arkansas, and Monticello, Kentucky. The company also moved to improve its prof its by exiting the low-margin commodity market, discontinuing product ion of heavy wire and closing its original Chicago plant. By 1978, th e company's sales had grown to $240 million, earning profits of & #36;8.8 million.
Reemerging in the 1990s
Belden's stock price, however, had not kept pace with its revenue gro wth. By 1980, the company had become the target of a hostile takeover , and Belden found refuge in a merger with Crouse-Hinds Company. The following year, when Crouse-Hinds itself became a takeover target, an other white knight appeared, and Belden found itself a subsidiary of Cooper Industries. Belden served Cooper as a source of cash flow to f uel Cooper's expansion into other industries; meanwhile, Belden began positioning itself toward the international market, while also expan ding heavily in the booming computer industry. In 1993, Cooper spun o ff Belden as an independent, publicly-traded company with annual sale s of $300 million.
Within three years, Belden would more than double its annual sales, a growth fueled in large part by sales of the company's network cable products. The company's international sales to Canada, Europe, and La tin America were also becoming a strong source of revenue, nearing 25 percent of annual sales by the mid-1990s. After moving its headquart ers to St. Louis in 1994, the company prepared for a new string of ac quisitions. In March 1995, Belden acquired American Electric Cordsets , based in Bensenville, Illinois, adding the $24 million company to its newly formed Cord Products Division. Two months later, Belden purchased rival Pope Cable and Wire B.V., based in Venlo, the Netherl ands, for $50 million, adding that company's $112 million in annual sales and strengthening Belden's position in Europe. A year la ter, Belden acquired the wire division of Alpha Wire Corporation, bas ed in Elizabeth, New Jersey, further positioning Belden to achieve a strong share of the ongoing networking products boom. It also added C owen Cable Corporation to its arsenal. Meanwhile, Belden began prepar ing for expansion into the growing Asian and Pacific Rim markets, whi le extending its Latin American reach as well. With the new market fo r Internet and corporate intranet products just beginning to explode in the mid-1990s, Belden's history of quickly shifting its focus to e merging technologies and markets continued to serve the company well.
Changes in the Late 1990s and Beyond
During 1998 and 1999, the company continued to focus on strengthening its Communications division. During 1999, Belden acquired Cable Syst ems International Inc. (CSI), the second-largest copper telephone cab le manufacturer in the United States. The addition of CSI to Belden's holdings gave it a significant advantage in the growing specialty wi re and cable market. Indeed, the purchase helped Belden secure a $ ;700 million contract to provide copper telephone cable to SBC Commun ications for the next five-years.
While Belden's future seemed bright, an economic slowdown began plagu ing the telecommunications industry in 2001. Lower demand led to fall ing income and revenues. Belden responded by cutting nearly 6,000 job s. In 2002, the company purchased Cable Design Technologies' NORCOM w ire and cable division. NORCOM provided telecommunications cable in C anada and the United States. A continued turndown in the industry how ever, forced Belden to shutter its NORCOM facility and close down man ufacturing operations in Australia and Germany. During 2003, Belden's North American communications division reported an operating loss on $109.4 million. Overall, the company reported a net loss of $ ;60.7 million for the year.
With its telecommunications arm stifling profits, Belden revamped its strategy and decided to jettison that portion of its business. Its e xit from the telecommunications industry was made evident in June 200 4 when the company sold its North American communications assets to S uperior Essex Inc. Meanwhile, Belden's CEO C. Baker Cunningham had st arted toying with the idea of merging with Cable Design Technologies (CDT). After meeting with CDT's CEO Fred Kuznik in November 2003, the two companies hammered out the details and announced merger plans in February 2004.
CDT had been established in 1980 as Intercole Automation Inc. and wen t public in 1993. The company had grown throughout its short history by acquiring many companies including Northern Telecom Ltd.'s (Nortel ) communication cable and network wiring products businesses. By 2004 , CDT was also struggling to shore up profits and eyed the union with Belden as a lucrative alternative to going alone in the industry.
The union was structured as a stock deal with each share of Belden st ock exchanged for one share in the combined company, while two shares of CDT stock were exchanged for one share of the combined company. T he merger-of-equals was completed on July 15, 2004 and created one of the largest manufacturers of high-speed electronic cables in the Uni ted States.
With five operating divisions, the newly created Belden CDT Inc. stoo d on much stronger ground. Its Electronics division accounted for nea rly 60 percent of sales while its Networking arm secured the remainin g revenues. The company expected to save $35 million within two y ears of the merger and immediately set plans in motion to shut down p lants in England, Massachusetts, and Vermont. At first glance, the me rger appeared to have paid off. Sales increased by nearly 17 percent over the previous year and the company posted net income of $15.2 million. While management was optimistic about the company's prospec ts, only time would tell what the future had in store for Belden CDT.
Principal Divisions: Electronics; Networking; Specialty; Europ ean Operations; West Penn Wire.
Principal Competitors: Alcatel Alsthom Compagnie Gén&ea cute;rale d'Electricité; Pirelli & C. SpA; Sumitomo Electr ic Industries Ltd.
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