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Belden Reports Record Quarterly Results

Belden Inc. (NYSE: BDC) (the “Company”), a leading global supplier of network infrastructure and digitization solutions, today reported fiscal second-quarter results for the period ended July 2, 2023.

Second Quarter 2023 Highlights

  • Record Revenues of $692 million, +4% y/y
  • Organic Growth of +5% y/y
  • GAAP EPS of $1.60, +22% y/y
  • Record Adjusted EPS of $1.91, +19% y/y
  • Increased full-year 2023 EPS guidance
  • Executed $36 million of share repurchases during the quarter, and $90 million year to date through July

“We had another quarter of outstanding performance, achieving record quarterly revenues and adjusted EPS. Gross margins again came in better than expected, at 38%, up approximately 400 basis points year over year. Our strong growth and improved margins highlight the transformation we are undertaking to become the leading network and data solutions provider,” said Ashish Chand, President and CEO of Belden Inc. “By focusing on customer success and business outcomes, our team is capitalizing on marketplace opportunities to further drive organic growth initiatives. We remain focused on growing our solutions offerings and deploying our cash flow towards high return opportunities.”

Second Quarter 2023

Revenues for the quarter totaled $692 million, increasing $25 million, or 4%, compared to $667 million in the year-ago period. Organic year-over-year growth for the quarter was 5%, with Industrial Automation Solutions at 8% and Enterprise Solutions at 1%. Net income was $69 million, compared to $59 million in the year-ago period. Net income as a percentage of revenue was 9.9%, compared to 8.8% in the year-ago period. EPS totaled $1.60 for the quarter, compared to $1.31 in the year-ago period.

Adjusted EBITDA was $123 million, increasing $12 million, or 11%, compared to $111 million in the year-ago period. Adjusted EBITDA margin was 17.8%, up 120 bps, compared to 16.6% in the year-ago period. Adjusted EPS was $1.91, increasing 19% compared to $1.60 in the year-ago period. Adjusted results are non-GAAP measures, and a non-GAAP reconciliation table is provided as an appendix to this release.

Outlook

“The first half of 2023 was robust for Belden with the business outperforming expectations and delivering record results. With such record performance, I am happy to share that we are increasing our full-year EPS guidance,” said Dr. Chand. “We continue to benefit from long-term secular trends that have lengthy investment cycles. Investments in automation, reshoring, increased connectivity, increasing bandwidth usage, and network upgrades all bode well for Belden to produce sustainable earnings growth. We are confident in our markets and ability to execute our strategy and generate sustainable, long-term shareholder value. Belden’s business is transforming and continues to make excellent progress towards achieving our goal of at least $8.00 of Adjusted EPS by 2025.”

End demand for our products and solutions remains healthy. As expected, channel partners are taking down inventory in 2023 as the supply chain continues to normalize. However, the temporary impact on orders is slightly higher than previously anticipated. Consequently, we expect a modest impact on full-year revenue and have adjusted our guidance accordingly.

Due to successful execution and expanding margins across our business, we are increasing our full-year EPS guidance. Adjusted EPS guidance for 2023 now reflects year-over-year growth between 12% and 15%.

The table below provides updated guidance for the full year 2023 and newly issued guidance for the third quarter of 2023.

Full Year 2023:

 

 

 

 

 

 

Updated Guidance

 

Prior Guidance

Revenues (billion)

 

$2.695 - $2.725

 

$2.710 - $2.760

Organic growth

 

3% - 4%

 

3% - 5%

GAAP EPS

 

$5.95 - $6.15

 

$5.71 - $6.01

Adjusted EPS

 

$7.15 - $7.35

 

$6.95 - $7.25

 

 

 

 

 

Third Quarter 2023:

 

 

 

 

 

 

Guidance

 

 

Revenues (million)

 

$675 - $690

 

 

Organic growth

 

(1%) - +1%

 

 

GAAP EPS

 

$1.40 - $1.50

 

 

Adjusted EPS

 

$1.75 - $1.85

 

 

Earnings Conference Call

Management will host a conference call today at 8:30 am ET to discuss the results. The listen-only audio of the conference call will be broadcast live via the Internet at https://investor.belden.com. The dial-in number for participants is 888-394-8218 with confirmation code 5194490. A replay of this conference call will remain accessible in the investor relations section of the Company’s website for a limited time.

Net Income, Earnings per Share (EPS), and Organic Growth

All references to net income and EPS within this earnings release refer to income from continuing operations and income from continuing operations per diluted share attributable to Belden stockholders, respectively. Organic growth is calculated as the change in revenues excluding the impacts from currency exchange rates, copper prices, acquisitions and divestitures.

BELDEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

July 2,

2023

 

July 3,

2022

 

July 2,

2023

 

July 3,

2022

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except per share data)

Revenues

 

$

692,245

 

 

$

666,551

 

 

$

1,334,034

 

 

$

1,276,922

 

Cost of sales

 

 

(430,917

)

 

 

(444,246

)

 

 

(826,601

)

 

 

(845,757

)

Gross profit

 

 

261,328

 

 

 

222,305

 

 

 

507,433

 

 

 

431,165

 

Selling, general and administrative expenses

 

 

(126,635

)

 

 

(105,203

)

 

 

(248,209

)

 

 

(208,269

)

Research and development expenses

 

 

(30,970

)

 

 

(25,989

)

 

 

(60,354

)

 

 

(49,445

)

Amortization of intangibles

 

 

(11,126

)

 

 

(9,177

)

 

 

(20,736

)

 

 

(17,994

)

Operating income

 

 

92,597

 

 

 

81,936

 

 

 

178,134

 

 

 

155,457

 

Interest expense, net

 

 

(8,812

)

 

 

(11,276

)

 

 

(17,013

)

 

 

(25,687

)

Non-operating pension benefit

 

 

646

 

 

 

1,070

 

 

 

1,134

 

 

 

2,270

 

Loss on debt extinguishment

 

 

 

 

 

 

 

 

 

 

 

(6,392

)

Income from continuing operations before taxes

 

 

84,431

 

 

 

71,730

 

 

 

162,255

 

 

 

125,648

 

Income tax expense

 

 

(15,656

)

 

 

(13,088

)

 

 

(30,535

)

 

 

(22,910

)

Income from continuing operations

 

 

68,775

 

 

 

58,642

 

 

 

131,720

 

 

 

102,738

 

Loss from discontinued operations, net of tax

 

 

 

 

 

 

 

 

 

 

 

(3,685

)

Loss on disposal of discontinued operations, net of tax

 

 

 

 

 

 

 

 

 

 

 

(4,567

)

Net income

 

 

68,775

 

 

 

58,642

 

 

 

131,720

 

 

 

94,486

 

Less: Net income (loss) attributable to noncontrolling interest

 

 

22

 

 

 

81

 

 

 

(225

)

 

 

84

 

Net income attributable to Belden stockholders

 

$

68,753

 

 

$

58,561

 

 

$

131,945

 

 

$

94,402

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares and equivalents:

 

 

 

 

 

 

 

 

Basic

 

 

42,497

 

 

 

44,252

 

 

 

42,663

 

 

 

44,535

 

Diluted

 

 

43,088

 

 

 

44,782

 

 

 

43,380

 

 

 

45,179

 

 

 

 

 

 

 

 

 

 

Basic income (loss) per share attributable to Belden stockholders:

 

 

 

 

 

 

 

 

Continuing operations

 

$

1.62

 

 

$

1.32

 

 

$

3.09

 

 

$

2.31

 

Discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(0.08

)

Disposal of discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(0.10

)

Net income

 

$

1.62

 

 

$

1.32

 

 

$

3.09

 

 

$

2.12

 

 

 

 

 

 

 

 

 

 

Diluted income (loss) per share attributable to Belden stockholders:

 

 

 

 

 

 

 

 

Continuing operations

 

$

1.60

 

 

$

1.31

 

 

$

3.04

 

 

$

2.27

 

Discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(0.08

)

Disposal of discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(0.10

)

Net income

 

$

1.60

 

 

$

1.31

 

 

$

3.04

 

 

$

2.09

 

 

 

 

 

 

 

 

 

 

Common stock dividends declared per share

 

$

0.05

 

 

$

0.05

 

 

$

0.10

 

 

$

0.10

 

 

BELDEN INC.

OPERATING SEGMENT INFORMATION

(Unaudited)

 

 

 

Enterprise

Solutions

 

Industrial

Automation

Solutions

 

Total

Segments

 

 

 

 

 

 

 

 

(In thousands, except percentages)

 

 

 

 

 

 

 

For the three months ended July 2, 2023

 

 

 

 

 

 

Segment Revenues

 

$

312,529

 

 

$

379,716

 

 

$

692,245

 

Segment EBITDA

 

 

43,956

 

 

 

78,631

 

 

 

122,587

 

Segment EBITDA margin

 

 

14.1

%

 

 

20.7

%

 

 

17.7

%

Depreciation expense

 

 

6,193

 

 

 

6,489

 

 

 

12,682

 

Amortization of intangibles

 

 

6,208

 

 

 

4,918

 

 

 

11,126

 

Amortization of software development intangible assets

 

 

 

 

 

1,820

 

 

 

1,820

 

Severance, restructuring, and acquisition integration costs

 

 

1,669

 

 

 

2,390

 

 

 

4,059

 

Adjustments related to acquisitions and divestitures

 

 

325

 

 

 

(76

)

 

 

249

 

 

 

 

 

 

 

 

For the three months ended July 3, 2022

 

 

 

 

 

 

Segment Revenues

 

$

307,444

 

 

$

359,107

 

 

$

666,551

 

Segment EBITDA

 

 

41,887

 

 

 

68,060

 

 

 

109,947

 

Segment EBITDA margin

 

 

13.6

%

 

 

19.0

%

 

 

16.5

%

Depreciation expense

 

 

5,768

 

 

 

5,602

 

 

 

11,370

 

Amortization of intangibles

 

 

4,442

 

 

 

4,735

 

 

 

9,177

 

Amortization of software development intangible assets

 

 

22

 

 

 

959

 

 

 

981

 

Severance, restructuring, and acquisition integration costs

 

 

4,575

 

 

 

1,282

 

 

 

5,857

 

Adjustments related to acquisitions and divestitures

 

 

(558

)

 

 

1,134

 

 

 

576

 

 

 

 

 

 

 

 

For the six months ended July 2, 2023

 

 

 

 

 

 

Segment Revenues

 

$

587,872

 

 

$

746,162

 

 

$

1,334,034

 

Segment EBITDA

 

 

81,161

 

 

 

152,418

 

 

 

233,579

 

Segment EBITDA margin

 

 

13.8

%

 

 

20.4

%

 

 

17.5

%

Depreciation expense

 

 

12,147

 

 

 

12,889

 

 

 

25,036

 

Amortization of intangibles

 

 

10,703

 

 

 

10,033

 

 

 

20,736

 

Amortization of software development intangible assets

 

 

 

 

 

3,272

 

 

 

3,272

 

Severance, restructuring, and acquisition integration costs

 

 

1,694

 

 

 

4,077

 

 

 

5,771

 

Adjustments related to acquisitions and divestitures

 

 

325

 

 

 

222

 

 

 

547

 

 

 

 

 

 

 

 

For the six months ended July 3, 2022

 

 

 

 

 

 

Segment Revenues

 

$

575,874

 

 

$

701,048

 

 

$

1,276,922

 

Segment EBITDA

 

 

72,708

 

 

 

135,588

 

 

 

208,296

 

Segment EBITDA margin

 

 

12.6

%

 

 

19.3

%

 

 

16.3

%

Depreciation expense

 

 

11,194

 

 

 

11,402

 

 

 

22,596

 

Amortization of intangibles

 

 

8,539

 

 

 

9,455

 

 

 

17,994

 

Amortization of software development intangible assets

 

 

44

 

 

 

1,944

 

 

 

1,988

 

Severance, restructuring, and acquisition integration costs

 

 

4,903

 

 

 

4,677

 

 

 

9,580

 

Adjustments related to acquisitions and divestitures

 

 

(558

)

 

 

1,134

 

 

 

576

 

 

BELDEN INC.

OPERATING SEGMENT RECONCILIATION TO CONSOLIDATED RESULTS

(Unaudited)

 

 

 

Three Months

Ended

 

Six Months

Ended

 

 

July 2,

2023

 

July 3,

2022

 

July 2,

2023

 

July 3,

2022

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

Total Segment and Consolidated Revenues

 

$

692,245

 

 

$

666,551

 

 

$

1,334,034

 

 

$

1,276,922

 

 

 

 

 

 

 

 

 

 

Total Segment EBITDA

 

$

122,587

 

 

$

109,947

 

 

$

233,579

 

 

$

208,296

 

Total non-operating pension benefit

 

 

646

 

 

 

1,070

 

 

 

1,134

 

 

 

2,270

 

Eliminations

 

 

(54

)

 

 

(50

)

 

 

(83

)

 

 

(105

)

Consolidated Adjusted EBITDA (1)

 

$

123,179

 

 

$

110,967

 

 

$

234,630

 

 

$

210,461

 

Depreciation expense

 

 

(12,682

)

 

 

(11,370

)

 

 

(25,036

)

 

 

(22,596

)

Amortization of intangibles

 

 

(11,126

)

 

 

(9,177

)

 

 

(20,736

)

 

 

(17,994

)

Interest expense, net

 

 

(8,812

)

 

 

(11,276

)

 

 

(17,013

)

 

 

(25,687

)

Amortization of software development intangible assets

 

 

(1,820

)

 

 

(981

)

 

 

(3,272

)

 

 

(1,988

)

Severance, restructuring, and acquisition integration costs

 

 

(4,059

)

 

 

(5,857

)

 

 

(5,771

)

 

 

(9,580

)

Adjustments related to acquisitions and divestitures

 

 

(249

)

 

 

(576

)

 

 

(547

)

 

 

(576

)

Loss on debt extinguishment

 

 

 

 

 

 

 

 

 

 

 

(6,392

)

Income from continuing operations before taxes

 

$

84,431

 

 

$

71,730

 

 

$

162,255

 

 

$

125,648

 

(1)

Consolidated Adjusted EBITDA is a non-GAAP measure. See Reconciliation of Non-GAAP Measures for additional information.

 

BELDEN INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

July 2, 2023

 

December 31, 2022

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

(In thousands)

ASSETS

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

514,767

 

 

$

687,676

 

Receivables, net

 

 

509,801

 

 

 

440,102

 

Inventories, net

 

 

345,427

 

 

 

341,563

 

Other current assets

 

 

66,525

 

 

 

66,866

 

Total current assets

 

 

1,436,520

 

 

 

1,536,207

 

Property, plant and equipment, less accumulated depreciation

 

 

392,593

 

 

 

381,864

 

Operating lease right-of-use assets

 

 

73,435

 

 

 

73,376

 

Goodwill

 

 

893,419

 

 

 

862,253

 

Intangible assets, less accumulated amortization

 

 

286,583

 

 

 

246,830

 

Deferred income taxes

 

 

15,412

 

 

 

14,642

 

Other long-lived assets

 

 

47,365

 

 

 

46,503

 

 

 

$

3,145,327

 

 

$

3,161,675

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

 

 

 

 

Accounts payable

 

$

290,382

 

 

$

350,058

 

Accrued liabilities

 

 

277,405

 

 

 

289,861

 

Total current liabilities

 

 

567,787

 

 

 

639,919

 

Long-term debt

 

 

1,187,152

 

 

 

1,161,176

 

Postretirement benefits

 

 

67,248

 

 

 

67,828

 

Deferred income taxes

 

 

68,172

 

 

 

58,582

 

Long-term operating lease liabilities

 

 

60,480

 

 

 

59,250

 

Other long-term liabilities

 

 

31,497

 

 

 

30,970

 

Stockholders’ equity:

 

 

 

 

Common stock

 

 

503

 

 

 

503

 

Additional paid-in capital

 

 

809,332

 

 

 

825,669

 

Retained earnings

 

 

879,179

 

 

 

751,522

 

Accumulated other comprehensive loss

 

 

(28,173

)

 

 

(5,871

)

Treasury stock

 

 

(497,873

)

 

 

(428,812

)

Total Belden stockholders’ equity

 

 

1,162,968

 

 

 

1,143,011

 

Noncontrolling interests

 

 

23

 

 

 

939

 

Total stockholders’ equity

 

 

1,162,991

 

 

 

1,143,950

 

 

 

$

3,145,327

 

 

$

3,161,675

 

 

BELDEN INC.

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS

(Unaudited)

 

 

 

Six Months Ended

 

 

July 2, 2023

 

July 3, 2022

 

 

 

 

 

 

 

(In thousands)

Cash flows from operating activities:

 

 

 

 

Net income

 

$

131,720

 

 

$

94,486

 

Adjustments to reconcile net income to cash flows from operating activities:

 

 

 

 

Depreciation and amortization

 

 

49,044

 

 

 

42,686

 

Share-based compensation

 

 

12,154

 

 

 

10,870

 

Loss on debt extinguishment

 

 

 

 

 

6,392

 

Changes in operating assets and liabilities, net of the effects of currency exchange rate changes, acquired businesses and disposals:

 

 

 

 

Receivables

 

 

(71,212

)

 

 

(20,699

)

Inventories

 

 

10,347

 

 

 

(47,305

)

Accounts payable

 

 

(59,295

)

 

 

(23,563

)

Accrued liabilities

 

 

(22,855

)

 

 

(58,525

)

Income taxes

 

 

5,204

 

 

 

163

 

Other assets

 

 

(4,197

)

 

 

(2,634

)

Other liabilities

 

 

3,805

 

 

 

(10,452

)

Net cash provided by (used for) operating activities

 

 

54,715

 

 

 

(8,581

)

Cash flows from investing activities:

 

 

 

 

Cash used for business acquisitions, net of cash acquired

 

 

(97,585

)

 

 

(104,123

)

Capital expenditures

 

 

(32,729

)

 

 

(31,010

)

Proceeds from disposal of tangible assets

 

 

9

 

 

 

1,424

 

Proceeds from disposal of businesses, net of cash sold

 

 

9,300

 

 

 

338,686

 

Net cash provided by (used for) investing activities

 

 

(121,005

)

 

 

204,977

 

Cash flows from financing activities:

 

 

 

 

Payments under share repurchase program

 

 

(86,224

)

 

 

(66,559

)

Withholding tax payments for share-based payment awards

 

 

(16,940

)

 

 

(5,167

)

Cash dividends paid

 

 

(4,285

)

 

 

(4,520

)

Payments under financing lease obligations

 

 

(115

)

 

 

(83

)

Payments under borrowing arrangements

 

 

 

 

 

(230,639

)

Proceeds from issuance of common stock

 

 

1,679

 

 

 

3,717

 

Net cash used for financing activities

 

 

(105,885

)

 

 

(303,251

)

Effect of foreign currency exchange rate changes on cash and cash equivalents

 

 

(734

)

 

 

(9,220

)

Decrease in cash and cash equivalents

 

 

(172,909

)

 

 

(116,075

)

Cash and cash equivalents, beginning of period

 

 

687,676

 

 

 

643,757

 

Cash and cash equivalents, end of period

 

$

514,767

 

 

$

527,682

 

The Condensed Consolidated Cash Flow Statement for the six months ended July 3, 2022 includes the results of discontinued operations up to the February 22, 2022 disposal date.

BELDEN INC.

RECONCILIATION OF NON-GAAP MEASURES

(Unaudited)

In addition to reporting financial results in accordance with accounting principles generally accepted in the United States, we provide non-GAAP operating results adjusted for certain items, including: asset impairments; accelerated depreciation expense due to plant consolidation activities; purchase accounting effects related to acquisitions, such as the adjustment of acquired inventory to fair value, and transaction costs; severance, restructuring, and acquisition integration costs; gains (losses) recognized on the disposal of businesses and assets; amortization of intangible assets; gains (losses) on debt extinguishment; certain gains (losses) from patent settlements; discontinued operations; and other costs. We adjust for the items listed above in all periods presented, unless the impact is clearly immaterial to our financial statements. When we calculate the tax effect of the adjustments, we include all current and deferred income tax expense commensurate with the adjusted measure of pre-tax profitability.

We utilize the adjusted results to review our ongoing operations without the effect of these adjustments and for comparison to budgeted operating results. We believe the adjusted results are useful to investors because they help them compare our results to previous periods and provide important insights into underlying trends in the business and how management oversees our business operations on a day-to-day basis. As an example, we adjust for acquisition-related expenses, such as amortization of intangibles and impacts of fair value adjustments because they generally are not related to the acquired business' core business performance. As an additional example, we exclude the costs of restructuring programs, which can occur from time to time for our current businesses and/or recently acquired businesses. We exclude the costs in calculating adjusted results to allow us and investors to evaluate the performance of the business based upon its expected ongoing operating structure. We believe the adjusted measures, accompanied by the disclosure of the costs of these programs, provides valuable insight.

Adjusted results should be considered only in conjunction with results reported according to accounting principles generally accepted in the United States.

 

 

Three Months Ended

 

Six Months Ended

 

 

July 2,

2023

 

July 3,

2022

 

July 2,

2023

 

July 3,

2022

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except percentages and per share amounts)

GAAP and Adjusted Revenues

 

$

692,245

 

 

$

666,551

 

 

$

1,334,034

 

 

$

1,276,922

 

 

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

261,328

 

 

$

222,305

 

 

$

507,433

 

 

$

431,165

 

Severance, restructuring, and acquisition integration costs

 

 

259

 

 

 

4,611

 

 

 

488

 

 

 

5,975

 

Amortization of software development intangible assets

 

 

1,820

 

 

 

981

 

 

 

3,272

 

 

 

1,988

 

Adjustments related to acquisitions and divestitures

 

 

325

 

 

 

1,134

 

 

 

325

 

 

 

1,134

 

Adjusted gross profit

 

$

263,732

 

 

$

229,031

 

 

$

511,518

 

 

$

440,262

 

 

 

 

 

 

 

 

 

 

GAAP gross profit margin

 

 

37.8

%

 

 

33.4

%

 

 

38.0

%

 

 

33.8

%

Adjusted gross profit margin

 

 

38.1

%

 

 

34.4

%

 

 

38.3

%

 

 

34.5

%

 

 

 

 

 

 

 

 

 

GAAP selling, general and administrative expenses

 

$

(126,635

)

 

$

(105,203

)

 

$

(248,209

)

 

$

(208,269

)

Severance, restructuring, and acquisition integration costs

 

 

3,706

 

 

 

1,246

 

 

 

5,189

 

 

 

3,605

 

Adjustments related to acquisitions and divestitures

 

 

(76

)

 

 

(558

)

 

 

222

 

 

 

(558

)

Adjusted selling, general and administrative expenses

 

$

(123,005

)

 

$

(104,515

)

 

$

(242,798

)

 

$

(205,222

)

 

 

 

 

 

 

 

 

 

GAAP research and development expenses

 

$

(30,970

)

 

$

(25,989

)

 

$

(60,354

)

 

$

(49,445

)

Severance, restructuring, and acquisition integration costs

 

 

94

 

 

 

 

 

 

94

 

 

 

 

Adjusted research and development expenses

 

$

(30,876

)

 

$

(25,989

)

 

$

(60,260

)

 

$

(49,445

)

 

 

 

 

 

 

 

 

 

GAAP income from continuing operations

 

$

68,775

 

 

$

58,642

 

 

$

131,720

 

 

$

102,738

 

Income tax expense

 

 

15,656

 

 

 

13,088

 

 

 

30,535

 

 

 

22,910

 

Interest expense, net

 

 

8,812

 

 

 

11,276

 

 

 

17,013

 

 

 

25,687

 

Loss on debt extinguishment

 

 

 

 

 

 

 

 

 

 

 

6,392

 

Total non-operating adjustments

 

 

24,468

 

 

 

24,364

 

 

 

47,548

 

 

 

54,989

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

11,126

 

 

 

9,177

 

 

 

20,736

 

 

 

17,994

 

Amortization of software development intangible assets

 

 

1,820

 

 

 

981

 

 

 

3,272

 

 

 

1,988

 

Severance, restructuring, and acquisition integration costs

 

 

4,059

 

 

 

5,857

 

 

 

5,771

 

 

 

9,580

 

Adjustments related to acquisitions and divestitures

 

 

249

 

 

 

576

 

 

 

547

 

 

 

576

 

Total operating income adjustments

 

 

17,254

 

 

 

16,591

 

 

 

30,326

 

 

 

30,138

 

Depreciation expense

 

 

12,682

 

 

 

11,370

 

 

 

25,036

 

 

 

22,596

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

123,179

 

 

$

110,967

 

 

$

234,630

 

 

$

210,461

 

 

 

 

 

 

 

 

 

 

GAAP income from continuing operations margin

 

 

9.9

%

 

 

8.8

%

 

 

9.9

%

 

 

8.0

%

Adjusted EBITDA margin

 

 

17.8

%

 

 

16.6

%

 

 

17.6

%

 

 

16.5

%

 

 

 

 

 

 

 

 

 

GAAP income from continuing operations

 

$

68,775

 

 

$

58,642

 

 

$

131,720

 

 

$

102,738

 

Less: Net income (loss) attributable to noncontrolling interest

 

 

22

 

 

 

81

 

 

 

(225

)

 

 

84

 

GAAP net income from continuing operations attributable to Belden stockholders

 

$

68,753

 

 

$

58,561

 

 

$

131,945

 

 

$

102,654

 

 

 

 

 

 

 

 

 

 

GAAP income from continuing operations

 

$

68,775

 

 

$

58,642

 

 

$

131,720

 

 

$

102,738

 

Plus: Operating income adjustments from above

 

 

17,254

 

 

 

16,591

 

 

 

30,326

 

 

 

30,138

 

Plus: Loss on debt extinguishment

 

 

 

 

 

 

 

 

 

 

 

6,392

 

Less: Net income (loss) attributable to noncontrolling interest

 

 

22

 

 

 

81

 

 

 

(225

)

 

 

84

 

Less: Tax effect of adjustments above

 

 

3,638

 

 

 

3,692

 

 

 

6,520

 

 

 

8,239

 

Adjusted net income from continuing operations attributable to Belden stockholders

 

$

82,369

 

 

$

71,460

 

 

$

155,751

 

 

$

130,945

 

 

 

 

 

 

 

 

 

 

GAAP income from continuing operations per diluted share attributable to Belden stockholders

 

$

1.60

 

 

$

1.31

 

 

$

3.04

 

 

$

2.27

 

Adjusted income from continuing operations per diluted share attributable to Belden stockholders

 

$

1.91

 

 

$

1.60

 

 

$

3.59

 

 

$

2.90

 

 

 

 

 

 

 

 

 

 

GAAP and adjusted diluted weighted average shares

 

 

43,088

 

 

 

44,782

 

 

 

43,380

 

 

 

45,179

 

 

BELDEN INC.

RECONCILIATION OF NON-GAAP MEASURES

(Unaudited)

We define free cash flow, which is a non-GAAP financial measure, as net cash from operating activities adjusted for capital expenditures net of the proceeds from the disposal of assets. We believe free cash flow provides useful information to investors regarding our ability to generate cash from business operations that is available for acquisitions and other investments, service of debt principal, dividends and share repurchases. We use free cash flow, as defined, as one financial measure to monitor and evaluate performance and liquidity. Non-GAAP financial measures should be considered only in conjunction with financial measures reported according to accounting principles generally accepted in the United States. Our definition of free cash flow may differ from definitions used by other companies.

 

 

Three Months Ended

 

Six Months Ended

 

 

July 2,

2023

 

July 3,

2022

 

July 2,

2023

 

July 3,

2022

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

GAAP net cash provided by (used for) operating activities

 

$

86,587

 

 

$

49,374

 

 

$

54,715

 

 

$

(8,581

)

Capital expenditures, net of proceeds from disposal of tangible assets

 

 

(18,877

)

 

 

(18,679

)

 

 

(32,720

)

 

 

(29,586

)

Non-GAAP free cash flow

 

$

67,710

 

 

$

30,695

 

 

$

21,995

 

 

$

(38,167

)

 

BELDEN INC.

RECONCILIATION OF NON-GAAP MEASURES

2023 Guidance

 

 

 

Year Ended

 

Three Months Ended

 

 

December 31, 2023

 

October 1, 2023

 

 

 

 

 

 

 

(In thousands)

GAAP income from continuing operations per diluted share attributable to Belden common stockholders

 

$5.95 - $6.15

 

$1.40 - $1.50

Amortization of intangible assets

 

0.87

 

0.22

Severance, restructuring, and acquisition integration costs

 

0.30

 

0.12

Adjustments related to acquisitions and divestitures

 

0.03

 

0.01

Adjusted income from continuing operations per diluted share attributable to Belden common stockholders

 

$7.15 - $7.35

 

$1.75 - $1.85

Our guidance is based upon information currently available regarding events and conditions that will impact our future operating results. In particular, our results are subject to the factors listed under "Forward-Looking Statements" in this release. In addition, our actual results are likely to be impacted by other additional events for which information is not available, such as asset impairments, adjustments related to acquisitions and divestitures, severance, restructuring, and acquisition integration costs, gains (losses) recognized on the disposal of assets, gains (losses) on debt extinguishment, discontinued operations, and other gains (losses) related to events or conditions that are not yet known. Such information is not available for our 2025 fiscal year, and therefore we are unable to estimate 2025 GAAP income from continuing operations per diluted share attributable to Belden common stockholders.

Forward-Looking Statements

This release contains, and any statements made by us concerning the subject matter of this release may contain, forward-looking statements, including our outlook for the third quarter and full year 2023 and Adjusted EPS for 2025. Forward-looking statements also include any statements regarding future financial performance (including revenues, growth, expenses, earnings, margins, cash flows, dividends, capital expenditures and financial condition), plans and objectives, and related assumptions. In some cases these statements are identifiable through the use of words such as “anticipate,” “believe,” “estimate,” “forecast,” “guide,” “expect,” “intend,” “plan,” “project,” “target,” “can,” “could,” “may,” “should,” “will,” “would” and similar expressions. Forward-looking statements reflect management’s current beliefs and expectations and are not guarantees of future performance. Actual results may differ materially from those suggested by any forward-looking statements for a number of reasons, including, without limitation: the impact of a challenging global economy or a downturn in served markets; the competitiveness of the global markets in which we operate; the inability of the Company to develop and introduce new products; competitive responses to our products; the inability to execute and realize the expected benefits from strategic initiatives (including revenue growth, cost control, and productivity improvement programs); foreign and domestic political, economic and other uncertainties, including changes in currency exchange rates; the impact of disruptions in the global supply chain, including the inability to timely obtain raw materials and components in sufficient quantities on commercially reasonable terms; the inability to achieve our strategic priorities in emerging markets; the impact of changes in global tariffs and trade agreements; volatility in credit and foreign exchange markets; the presence of substitute products in the marketplace; disruptions in the Company’s information systems including due to cyber-attacks; inflation and changes in the price and availability of raw materials leading to higher input and labor costs; the possibility of a resurgence of COVID-19 or the spread of other viruses; difficulty in forecasting revenue due to the unpredictable timing of orders related to customer projects as well as the impacts of channel inventory; changes in tax laws and variability in the Company’s quarterly and annual effective tax rates; the increased prevalence of cloud computing; the inability to successfully complete and integrate acquisitions in furtherance of the Company’s strategic plan; the inability to retain key employees; disruption of, or changes in, the Company’s key distribution channels; the presence of activists proposing certain actions by the Company; perceived or actual product failures; the impact of regulatory requirements and other legal compliance issues; inability to satisfy the increasing expectations with respect to environmental, social and governance matters; assertions that the Company violates the intellectual property of others and the ownership of intellectual property by competitors and others that prevents the use of that intellectual property by the Company; risks related to the use of open source software; the impairment of goodwill and other intangible assets and the resulting impact on financial performance; disruptions and increased costs attendant to collective bargaining groups and other labor matters; and other factors.

For a more complete discussion of risk factors, please see our Annual Report on Form 10-K for the period ended December 31, 2022, filed with the SEC on February 24, 2023. Although the content of this release represents our best judgment as of the date of this report based on information currently available and reasonable assumptions, we give no assurances that the expectations will prove to be accurate. Deviations from the expectations may be material. For these reasons, Belden cautions readers to not place undue reliance on these forward-looking statements, which speak only as of the date made. Belden disclaims any duty to update any forward-looking statements as a result of new information, future developments, or otherwise, except as required by law.

About Belden

Belden Inc. delivers the infrastructure that makes the digital journey simpler, smarter and secure. We’re moving beyond connectivity, from what we make to what we make possible through a performance-driven portfolio, forward-thinking expertise and purpose-built solutions. With a legacy of quality and reliability spanning 120-plus years, we have a strong foundation to continue building the future. We are headquartered in St. Louis and have manufacturing capabilities in North America, Europe, Asia, and Africa. For more information, visit us at www.belden.com; follow us on Facebook, LinkedIn and Twitter.

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