Belden Inc. (NYSE: BDC), a leading global supplier of network infrastructure solutions, today reported fiscal second quarter 2022 results for the period ended July 3, 2022.

Second Quarter 2022

Revenues for the quarter totaled $667 million, increasing $91 million, or 16%, compared to $576 million in the year-ago period. Net income was $59 million, compared to $45 million in the year-ago period. Net income as a percentage of revenue was 8.8%, compared to 7.9% in the year-ago period. EPS totaled $1.31, compared to $1.00 in the second quarter 2021.

Adjusted revenues for the quarter totaled $667 million, increasing $90 million, or 16%, compared to $577 million in the year-ago period. Adjusted EBITDA was $111 million, increasing $18 million, or 19%, compared to $93 million in the year-ago period. Adjusted EBITDA margin was 16.6%, compared to 16.1% in the year-ago period. Adjusted EPS was $1.60, increasing 31% compared to $1.22 in the second quarter 2021. Adjusted results are non-GAAP measures, and a non-GAAP reconciliation table is provided as an appendix to this release.

Roel Vestjens, President and CEO of Belden Inc., said, “We delivered another strong quarter of profitable growth. I am pleased with the revenue performance, up 18% organically, with broad-based strength across all businesses. Our global teams are executing our strategic plan and successfully navigating the inflationary environment, resulting in solid margin expansion and 31% EPS growth. Additionally, we continued to deploy capital to share repurchases, while ending the quarter with net leverage of 1.4x, below our recently announced target of 1.5x.”

Outlook

“As a result of the strong quarter and an improved outlook for the remainder of the year, we are increasing our full year 2022 guidance. Our full year revenue guidance now represents organic revenue growth of 12% to 13%, up from 7% to 9% in our prior guidance. The macroeconomic environment remains very dynamic with considerable uncertainties, including volatile foreign exchange rates and commodity prices. However, we continue to gain momentum with our strategic growth initiatives, and I am confident in our ability to support our customers, create value for our shareholders, and deliver at least $8.00 of adjusted EPS by 2025,” said Mr. Vestjens.

The Company expects third quarter 2022 revenues to be $625 - $640 million. Compared to second quarter 2022 revenues, the Company expects third quarter 2022 revenues to be lower by approximately $25 million due to a stronger U.S. dollar and lower copper pass-through pricing.

Driven by stronger organic growth, for the year ending December 31, 2022, the Company now expects revenues to be $2.520 - $2.550 billion, compared to prior guidance of $2.480 - $2.530 billion. The full year revenue guidance now represents organic growth of 12% to 13%, compared to prior guidance of 7% to 9%.

The Company expects third quarter 2022 GAAP EPS to be $1.16 - $1.26. For the year ending December 31, 2022, the Company now expects GAAP EPS to be $4.67 - $4.87, compared to prior guidance of $4.31 - $4.61.

The Company expects third quarter 2022 adjusted EPS to be $1.50 - $1.60. For the year ending December 31, 2022, the Company now expects adjusted EPS to be $5.90 - $6.10, compared to prior guidance of $5.55 - $5.85. The full year adjusted EPS guidance now represents growth of 24% to 28%.

Earnings Conference Call

Management will host a conference call today at 8:30 am ET to discuss results of the quarter. 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 1022870. 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 and Earnings per Share (EPS)

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.

Use of Non-GAAP Financial Information

Adjusted results are non-GAAP measures that reflect certain adjustments the Company makes to provide insight into operating results. GAAP to non-GAAP reconciliations accompany the condensed consolidated financial statements included in this release and have been published to the investor relations section of the Company’s website at https://investor.belden.com.

The Condensed Consolidated Cash Flow Statement includes the results of discontinued operations up to the disposal date, February 22, 2022.

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 tangible 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.

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 tangible 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.

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 tangible 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 as such we are unable to estimate 2025 GAAP income from continuing operations per diluted share attributable to Belden common stockholders.

Forward-Looking Statements

This release and any statements made by us concerning the subject matter of this release may contain forward-looking statements, including our expectations for the third quarter and full-year 2022, and the results of our restructuring program. Forward-looking statements also include any statements regarding future financial performance (including revenues, 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 disruptions in the global supply chain, including the inability to obtain raw materials and components in sufficient quantities on commercially reasonable terms; the lack of certainty as to the duration and magnitude of the impact of COVID-19 and the economic recovery from that impact; foreign and domestic political, economic and other uncertainties, including changes in currency exchange rates; the impact of a challenging global economy or a downturn in served markets; the inability to successfully complete and integrate acquisitions in furtherance of the Company’s strategic plan; difficulty in forecasting revenue due to the unpredictable timing of orders related to customer projects as well as the impacts of channel inventory; inflation and changes in the price and availability of raw materials leading to higher input and labor costs; the inability to execute and realize the expected benefits from strategic initiatives (including revenue growth, cost control, and productivity improvement programs); the inability to retain key employees; the increased influence of chief information officers on purchasing decisions; disruptions in the Company’s information systems including due to cyber-attacks leading to exposures of personally identifiable information; changes in tax laws and variability in the Company’s quarterly and annual effective tax rates; the competitiveness of the global markets in which we operate; the presence of substitute products in the marketplace; the increased prevalence of cloud computing; the inability of the Company to develop and introduce new products and competitive responses to our products; 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 activists proposing certain actions by the Company; perceived or actual product failures; risks related to the use of open source software; disruption of, or changes in, the Company’s key distribution channels; 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; the impact of regulatory requirements and other legal compliance issues; 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, 2021, filed with the SEC on February 15, 2022. 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 100-plus years, 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 or follow us on Twitter @BeldenInc.

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