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Belden Reports Strong Results and Record EPS for Third Quarter 2022

Belden Inc. (NYSE: BDC), a leading global supplier of network infrastructure solutions, today reported fiscal third quarter 2022 results for the period ended October 2, 2022.

Third Quarter 2022

Revenues for the quarter totaled $670 million, increasing $65 million, or 11%, compared to $605 million in the year-ago period. Net income was $104 million, compared to $44 million in the year-ago period. Net income as a percentage of revenue was 15.5%, compared to 7.3% in the year-ago period. Net income in the quarter included a $38 million pre-tax gain on the sale of an asset. EPS totaled a quarterly record $2.35, compared to $0.97 in the third quarter 2021.

Adjusted revenues for the quarter totaled $670 million, increasing $65 million, or 11%, compared to $605 million in the year-ago period. Adjusted EBITDA was $118 million, increasing $17 million, or 17%, compared to $101 million in the year-ago period. Adjusted EBITDA margin was 17.6%, compared to 16.7% in the year-ago period. Adjusted EPS was a quarterly record $1.77, increasing 33% compared to $1.33 in the third 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, “I am pleased with our third quarter performance and the strong execution by our global teams to meet the needs of our customers and deliver record quarterly EPS. Revenues increased organically by 15% in the third quarter. Once again, the strength was broad-based, with each of our businesses growing organically, demonstrating the strength and strategic positioning of our portfolio. Despite facing continued inflationary pressures, we delivered strong profitability, with expanded margins and 33% Adjusted EPS growth. Additionally, we continued to return capital to shareholders, while ending the quarter with net leverage of 1.1x.”

Outlook

“As a result of another strong quarter and an improved outlook for the fourth quarter, we are increasing our full-year 2022 guidance. Our full-year revenue guidance now reflects expected organic revenue growth of 15% to 16%, up from 12% to 13% in our prior guidance. The macroeconomic environment remains very dynamic with considerable uncertainties, including volatile foreign exchange rates and commodity prices. However, we have significant levels of customer backlog, and we continue to gain momentum with our strategic growth initiatives. We remain 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 fourth quarter 2022 revenues to be $635 - $650 million. Compared to third quarter 2022 revenues, the Company expects fourth quarter 2022 revenues to be lower due to a stronger U.S. dollar and typical seasonal patterns.

For the year ending December 31, 2022, the Company now expects revenues to be $2.583 - $2.598 billion, compared to prior guidance of $2.520 - $2.550 billion. The full-year revenue guidance now reflects expected organic growth of 15% - 16%, compared to prior guidance of 12% to 13%.

The Company expects fourth quarter 2022 GAAP EPS to be $1.27 - $1.37. For the year ending December 31, 2022, the Company now expects GAAP EPS to be $5.89 - $5.99, compared to prior guidance of $4.67 - $4.87.

The Company expects fourth quarter 2022 adjusted EPS to be $1.60 - $1.70. For the year ending December 31, 2022, the Company now expects adjusted EPS to be $6.27 - $6.37, compared to prior guidance of $5.90 - $6.10. The full-year adjusted EPS guidance now represents growth of 32% to 34%.

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 800-458-4121 with confirmation code 7787011. 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 Net Leverage

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. Net leverage is calculated as (A) total debt less cash and cash equivalents divided by (B) the sum of trailing twelve months Adjusted EBITDA plus trailing twelve months stock-based compensation expense.

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.

BELDEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

October 2, 2022

 

October 3, 2021

 

October 2, 2022

 

October 3, 2021

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except per share data)

Revenues

 

$

670,491

 

 

$

604,761

 

 

$

1,947,413

 

 

$

1,689,301

 

Cost of sales

 

 

(431,845

)

 

 

(401,384

)

 

 

(1,277,602

)

 

 

(1,125,387

)

Gross profit

 

 

238,646

 

 

 

203,377

 

 

 

669,811

 

 

 

563,914

 

Selling, general and administrative expenses

 

 

(110,478

)

 

 

(95,337

)

 

 

(318,747

)

 

 

(269,542

)

Research and development expenses

 

 

(26,306

)

 

 

(23,235

)

 

 

(75,751

)

 

 

(68,110

)

Amortization of intangibles

 

 

(10,105

)

 

 

(7,780

)

 

 

(28,099

)

 

 

(22,945

)

Asset impairments

 

 

 

 

 

(2,288

)

 

 

 

 

 

(9,283

)

Gain on sale of asset

 

 

37,891

 

 

 

 

 

 

37,891

 

 

 

 

Operating income

 

 

129,648

 

 

 

74,737

 

 

 

285,105

 

 

 

194,034

 

Interest expense, net

 

 

(9,883

)

 

 

(16,251

)

 

 

(35,570

)

 

 

(46,632

)

Loss on debt extinguishment

 

 

 

 

 

(5,715

)

 

 

(6,392

)

 

 

(5,715

)

Non-operating pension benefit

 

 

26

 

 

 

992

 

 

 

2,296

 

 

 

3,121

 

Income from continuing operations before taxes

 

 

119,791

 

 

 

53,763

 

 

 

245,439

 

 

 

144,808

 

Income tax expense

 

 

(16,104

)

 

 

(9,799

)

 

 

(39,014

)

 

 

(26,433

)

Income from continuing operations

 

 

103,687

 

 

 

43,964

 

 

 

206,425

 

 

 

118,375

 

Loss from discontinued operations, net of tax

 

 

 

 

 

(2,647

)

 

 

(3,685

)

 

 

(4,345

)

Loss on disposal of discontinued operations, net of tax

 

 

(5,366

)

 

 

 

 

 

(9,933

)

 

 

 

Net income

 

 

98,321

 

 

 

41,317

 

 

 

192,807

 

 

 

114,030

 

Less: Net income attributable to noncontrolling interest

 

 

27

 

 

 

53

 

 

 

111

 

 

 

336

 

Net income attributable to Belden stockholders

 

$

98,294

 

 

$

41,264

 

 

$

192,696

 

 

$

113,694

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares and equivalents:

 

 

 

 

 

 

 

 

Basic

 

 

43,466

 

 

 

44,851

 

 

 

44,181

 

 

 

44,762

 

Diluted

 

 

44,063

 

 

 

45,425

 

 

 

44,810

 

 

 

45,242

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Continuing operations

 

$

2.38

 

 

$

0.98

 

 

$

4.67

 

 

$

2.64

 

Discontinued operations

 

 

 

 

 

(0.06

)

 

 

(0.08

)

 

 

(0.10

)

Disposal of discontinued operations

 

 

(0.12

)

 

 

 

 

 

(0.22

)

 

 

 

Net income

 

$

2.26

 

 

$

0.92

 

 

$

4.36

 

 

$

2.54

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Continuing operations

 

$

2.35

 

 

$

0.97

 

 

$

4.60

 

 

$

2.61

 

Discontinued operations

 

 

 

 

 

(0.06

)

 

 

(0.08

)

 

 

(0.10

)

Disposal of discontinued operations

 

 

(0.12

)

 

 

 

 

 

(0.22

)

 

 

 

Net income

 

$

2.23

 

 

$

0.91

 

 

$

4.30

 

 

$

2.51

 

 

 

 

 

 

 

 

 

 

Common stock dividends declared per share

 

$

0.05

 

 

$

0.05

 

 

$

0.15

 

 

$

0.15

 

BELDEN INC.

OPERATING SEGMENT INFORMATION

(Unaudited)

 

 

 

Enterprise Solutions

 

Industrial Automation Solutions

 

Total Segments

 

 

 

 

 

 

 

 

(In thousands, except percentages)

 

 

 

 

 

 

 

For the three months ended October 2, 2022

 

 

 

 

 

 

Segment Revenues

 

$

319,201

 

 

$

351,290

 

 

$

670,491

 

Segment EBITDA

 

 

46,110

 

 

 

71,055

 

 

 

117,165

 

Segment EBITDA margin

 

 

14.4

%

 

 

20.2

%

 

 

17.5

%

Depreciation expense

 

 

6,020

 

 

 

5,827

 

 

 

11,847

 

Amortization of intangibles

 

 

4,512

 

 

 

5,593

 

 

 

10,105

 

Amortization of software development intangible assets

 

 

8

 

 

 

860

 

 

 

868

 

Severance, restructuring, and acquisition integration costs

 

 

2,702

 

 

 

1,858

 

 

 

4,560

 

Adjustments related to acquisitions and divestitures

 

 

(2,537

)

 

 

514

 

 

 

(2,023

)

 

 

 

 

 

 

 

For the three months ended October 3, 2021

 

 

 

 

 

 

Segment Revenues

 

$

286,231

 

 

$

319,032

 

 

$

605,263

 

Segment EBITDA

 

 

40,411

 

 

 

59,947

 

 

 

100,358

 

Segment EBITDA margin

 

 

14.1

%

 

 

18.8

%

 

 

16.6

%

Depreciation expense

 

 

5,280

 

 

 

5,306

 

 

 

10,586

 

Amortization of intangibles

 

 

4,427

 

 

 

3,353

 

 

 

7,780

 

Amortization of software development intangible assets

 

 

20

 

 

 

414

 

 

 

434

 

Severance, restructuring, and acquisition integration costs

 

 

3,381

 

 

 

947

 

 

 

4,328

 

Adjustments related to acquisitions and divestitures

 

 

(713

)

 

 

890

 

 

 

177

 

Asset impairments

 

 

 

 

 

2,288

 

 

 

2,288

 

 

 

 

 

 

 

 

For the nine months ended October 2, 2022

 

 

 

 

 

 

Segment Revenues

 

$

895,075

 

 

$

1,052,338

 

 

$

1,947,413

 

Segment EBITDA

 

 

118,818

 

 

 

206,643

 

 

 

325,461

 

Segment EBITDA margin

 

 

13.3

%

 

 

19.6

%

 

 

16.7

%

Depreciation expense

 

 

17,214

 

 

 

17,229

 

 

 

34,443

 

Amortization of intangibles

 

 

13,051

 

 

 

15,048

 

 

 

28,099

 

Amortization of software development intangible assets

 

 

52

 

 

 

2,804

 

 

 

2,856

 

Severance, restructuring, and acquisition integration costs

 

 

7,605

 

 

 

6,535

 

 

 

14,140

 

Adjustments related to acquisitions and divestitures

 

 

(3,095

)

 

 

1,648

 

 

 

(1,447

)

 

 

 

 

 

 

 

For the nine months ended October 3, 2021

 

 

 

 

 

 

Segment Revenues

 

$

780,114

 

 

$

910,538

 

 

$

1,690,652

 

Segment EBITDA

 

 

104,703

 

 

 

163,022

 

 

 

267,725

 

Segment EBITDA margin

 

 

13.4

%

 

 

17.9

%

 

 

15.8

%

Depreciation expense

 

 

16,015

 

 

 

15,956

 

 

 

31,971

 

Amortization of intangibles

 

 

13,202

 

 

 

9,743

 

 

 

22,945

 

Amortization of software development intangible assets

 

 

72

 

 

 

1,093

 

 

 

1,165

 

Severance, restructuring, and acquisition integration costs

 

 

7,797

 

 

 

4,742

 

 

 

12,539

 

Adjustments related to acquisitions and divestitures

 

 

(7,052

)

 

 

2,767

 

 

 

(4,285

)

Asset impairments

 

 

 

 

 

9,283

 

 

 

9,283

 

BELDEN INC.

OPERATING SEGMENT RECONCILIATION TO CONSOLIDATED RESULTS

(Unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

October 2, 2022

 

October 3, 2021

 

October 2, 2022

 

October 3, 2021

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

Total Segment Revenues

 

$

670,491

 

 

$

605,263

 

 

$

1,947,413

 

 

$

1,690,652

 

Adjustments related to acquisitions

 

 

 

 

 

(502

)

 

 

 

 

 

(1,351

)

Consolidated revenues

 

$

670,491

 

 

$

604,761

 

 

$

1,947,413

 

 

$

1,689,301

 

 

 

 

 

 

 

 

 

 

Total Segment EBITDA

 

$

117,165

 

 

$

100,358

 

 

$

325,461

 

 

$

267,725

 

Total non-operating pension benefit

 

 

26

 

 

 

992

 

 

 

2,296

 

 

 

3,121

 

Non-operating pension settlement loss

 

 

954

 

 

 

 

 

 

954

 

 

 

 

Eliminations

 

 

(51

)

 

 

(28

)

 

 

(156

)

 

 

(73

)

Consolidated Adjusted EBITDA (1)

 

 

118,094

 

 

 

101,322

 

 

 

328,555

 

 

 

270,773

 

Depreciation expense

 

 

(11,847

)

 

 

(10,586

)

 

 

(34,443

)

 

 

(31,971

)

Amortization of intangibles

 

 

(10,105

)

 

 

(7,780

)

 

 

(28,099

)

 

 

(22,945

)

Interest expense, net

 

 

(9,883

)

 

 

(16,251

)

 

 

(35,570

)

 

 

(46,632

)

Severance, restructuring, and acquisition integration costs

 

 

(4,560

)

 

 

(4,328

)

 

 

(14,140

)

 

 

(12,539

)

Non-operating pension settlement loss

 

 

(954

)

 

 

 

 

 

(954

)

 

 

 

Amortization of software development intangible assets

 

 

(868

)

 

 

(434

)

 

 

(2,856

)

 

 

(1,165

)

Loss on debt extinguishment

 

 

 

 

 

(5,715

)

 

 

(6,392

)

 

 

(5,715

)

Asset impairments

 

 

 

 

 

(2,288

)

 

 

 

 

 

(9,283

)

Adjustments related to acquisitions and divestitures

 

 

2,023

 

 

 

(177

)

 

 

1,447

 

 

 

4,285

 

Gain on sale of asset

 

 

37,891

 

 

 

 

 

 

37,891

 

 

 

 

Income from continuing operations before taxes

 

$

119,791

 

 

$

53,763

 

 

$

245,439

 

 

$

144,808

 

(1)

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

BELDEN INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

October 2, 2022

 

December 31, 2021

 

 

 

 

 

 

 

(In thousands)

ASSETS

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

547,466

 

 

$

641,563

 

Receivables, net

 

 

436,715

 

 

 

383,444

 

Inventories, net

 

 

351,440

 

 

 

345,203

 

Other current assets

 

 

48,987

 

 

 

58,283

 

Current assets of discontinued operations

 

 

 

 

 

449,402

 

Total current assets

 

 

1,384,608

 

 

 

1,877,895

 

Property, plant and equipment, less accumulated depreciation

 

 

332,458

 

 

 

343,564

 

Operating lease right-of-use assets

 

 

69,940

 

 

 

75,571

 

Goodwill

 

 

848,506

 

 

 

821,448

 

Intangible assets, less accumulated amortization

 

 

243,916

 

 

 

238,155

 

Deferred income taxes

 

 

29,702

 

 

 

31,486

 

Other long-lived assets

 

 

51,366

 

 

 

29,558

 

 

 

$

2,960,496

 

 

$

3,417,677

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

 

 

 

 

Accounts payable

 

$

297,759

 

 

$

377,765

 

Accrued liabilities

 

 

247,743

 

 

 

278,108

 

Current liabilities of discontinued operations

 

 

 

 

 

99,079

 

Total current liabilities

 

 

545,502

 

 

 

754,952

 

Long-term debt

 

 

1,045,348

 

 

 

1,459,991

 

Postretirement benefits

 

 

96,608

 

 

 

120,997

 

Deferred income taxes

 

 

59,124

 

 

 

49,027

 

Long-term operating lease liabilities

 

 

56,333

 

 

 

61,967

 

Other long-term liabilities

 

 

22,907

 

 

 

14,661

 

Stockholders’ equity:

 

 

 

 

Common stock

 

 

503

 

 

 

503

 

Additional paid-in capital

 

 

822,488

 

 

 

833,627

 

Retained earnings

 

 

691,722

 

 

 

505,717

 

Accumulated other comprehensive income (loss)

 

 

37,126

 

 

 

(70,566

)

Treasury stock

 

 

(418,029

)

 

 

(313,994

)

Total Belden stockholders’ equity

 

 

1,133,810

 

 

 

955,287

 

Noncontrolling interests

 

 

864

 

 

 

795

 

Total stockholders’ equity

 

 

1,134,674

 

 

 

956,082

 

 

 

$

2,960,496

 

 

$

3,417,677

 

BELDEN INC.

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS

(Unaudited)

 

 

 

Nine Months Ended

 

 

October 2, 2022

 

October 3, 2021

 

 

 

 

 

 

 

(In thousands)

Cash flows from operating activities:

 

 

 

 

Net income

 

$

192,807

 

 

$

114,030

 

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

 

 

 

 

Depreciation and amortization

 

 

65,730

 

 

 

65,028

 

Share-based compensation

 

 

18,438

 

 

 

18,242

 

Loss on disposal of discontinued operations

 

 

9,934

 

 

 

 

Loss on debt extinguishment

 

 

6,392

 

 

 

5,715

 

Asset impairments

 

 

 

 

 

9,283

 

Gain on sale of asset

 

 

(37,891

)

 

 

 

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

 

 

 

 

Receivables

 

 

(42,808

)

 

 

(128,997

)

Inventories

 

 

(11,393

)

 

 

(58,900

)

Accounts payable

 

 

(65,584

)

 

 

73,740

 

Accrued liabilities

 

 

(41,247

)

 

 

17,796

 

Income taxes

 

 

(2,347

)

 

 

5,159

 

Other assets

 

 

4,269

 

 

 

(1,794

)

Other liabilities

 

 

(17,500

)

 

 

(17,383

)

Net cash provided by operating activities

 

 

78,800

 

 

 

101,919

 

Cash flows from investing activities:

 

 

 

 

Proceeds from disposal of businesses, net of cash sold

 

 

334,574

 

 

 

10,798

 

Proceeds from disposal of assets

 

 

43,534

 

 

 

3,249

 

Purchase of intangible assets

 

 

 

 

 

(3,650

)

Capital expenditures

 

 

(50,250

)

 

 

(55,569

)

Cash used for business acquisitions, net of cash acquired

 

 

(104,481

)

 

 

(73,749

)

Net cash provided by (used for) investing activities

 

 

223,377

 

 

 

(118,921

)

Cash flows from financing activities:

 

 

 

 

Payments under borrowing arrangements

 

 

(230,639

)

 

 

(360,304

)

Payments under share repurchase program

 

 

(136,336

)

 

 

 

Cash dividends paid

 

 

(6,762

)

 

 

(6,740

)

Withholding tax payments for share-based payment awards

 

 

(6,534

)

 

 

(2,103

)

Payments under financing lease obligations

 

 

(123

)

 

 

(3,116

)

Debt issuance costs paid

 

 

 

 

 

(7,785

)

Proceeds from issuance of common stock

 

 

3,717

 

 

 

 

Borrowings under credit arrangements

 

 

 

 

 

356,010

 

Net cash used for financing activities

 

 

(376,677

)

 

 

(24,038

)

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

 

 

(21,791

)

 

 

(3,201

)

Decrease in cash and cash equivalents

 

 

(96,291

)

 

 

(44,241

)

Cash and cash equivalents, beginning of period

 

 

643,757

 

 

 

501,994

 

Cash and cash equivalents, end of period

 

$

547,466

 

 

$

457,753

 

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 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

 

Nine Months Ended

 

 

October 2, 2022

 

October 3, 2021

 

October 2, 2022

 

October 3, 2021

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except percentages and per share amounts)

GAAP revenues

 

$

670,491

 

 

$

604,761

 

 

$

1,947,413

 

 

$

1,689,301

 

Adjustments related to acquisitions

 

 

 

 

 

502

 

 

 

 

 

 

1,351

 

Adjusted revenues

 

$

670,491

 

 

$

605,263

 

 

$

1,947,413

 

 

$

1,690,652

 

 

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

238,646

 

 

$

203,377

 

 

$

669,811

 

 

$

563,914

 

Severance, restructuring, and acquisition integration costs

 

 

2,796

 

 

 

2,943

 

 

 

8,771

 

 

 

4,306

 

Amortization of software development intangible assets

 

 

868

 

 

 

434

 

 

 

2,856

 

 

 

1,165

 

Adjustments related to acquisitions and divestitures

 

 

514

 

 

 

890

 

 

 

1,648

 

 

 

3,701

 

Adjusted gross profit

 

$

242,824

 

 

$

207,644

 

 

$

683,086

 

 

$

573,086

 

 

 

 

 

 

 

 

 

 

GAAP gross profit margin

 

 

35.6

%

 

 

33.6

%

 

 

34.4

%

 

 

33.4

%

Adjusted gross profit margin

 

 

36.2

%

 

 

34.3

%

 

 

35.1

%

 

 

33.9

%

 

 

 

 

 

 

 

 

 

GAAP selling, general and administrative expenses

 

$

(110,478

)

 

$

(95,337

)

 

$

(318,747

)

 

$

(269,542

)

Severance, restructuring, and acquisition integration costs

 

 

1,764

 

 

 

1,385

 

 

 

5,369

 

 

 

8,233

 

Adjustments related to acquisitions and divestitures

 

 

(2,537

)

 

 

(713

)

 

 

(3,095

)

 

 

(7,986

)

Adjusted selling, general and administrative expenses

 

$

(111,251

)

 

$

(94,665

)

 

$

(316,473

)

 

$

(269,295

)

 

 

 

 

 

 

 

 

 

GAAP and adjusted research and development expenses

 

$

(26,306

)

 

$

(23,235

)

 

$

(75,751

)

 

$

(68,110

)

 

 

 

 

 

 

 

 

 

GAAP income from continuing operations

 

$

103,687

 

 

$

43,964

 

 

$

206,425

 

 

$

118,375

 

Income tax expense

 

 

16,104

 

 

 

9,799

 

 

 

39,014

 

 

 

26,433

 

Interest expense, net

 

 

9,883

 

 

 

16,251

 

 

 

35,570

 

 

 

46,632

 

Non-operating pension settlement loss

 

 

954

 

 

 

 

 

 

954

 

 

 

 

Loss on debt extinguishment

 

 

 

 

 

5,715

 

 

 

6,392

 

 

 

5,715

 

Total non-operating adjustments

 

 

26,941

 

 

 

31,765

 

 

 

81,930

 

 

 

78,780

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

10,105

 

 

 

7,780

 

 

 

28,099

 

 

 

22,945

 

Severance, restructuring, and acquisition integration costs

 

 

4,560

 

 

 

4,328

 

 

 

14,140

 

 

 

12,539

 

Amortization of software development intangible assets

 

 

868

 

 

 

434

 

 

 

2,856

 

 

 

1,165

 

Asset impairments

 

 

 

 

 

2,288

 

 

 

 

 

 

9,283

 

Adjustments related to acquisitions and divestitures

 

 

(2,023

)

 

 

177

 

 

 

(1,447

)

 

 

(4,285

)

Gain on sale of asset

 

 

(37,891

)

 

 

 

 

 

(37,891

)

 

 

 

Total operating income adjustments

 

 

(24,381

)

 

 

15,007

 

 

 

5,757

 

 

 

41,647

 

Depreciation expense

 

 

11,847

 

 

 

10,586

 

 

 

34,443

 

 

 

31,971

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

118,094

 

 

$

101,322

 

 

$

328,555

 

 

$

270,773

 

 

 

 

 

 

 

 

 

 

GAAP income from continuing operations margin

 

 

15.5

%

 

 

7.3

%

 

 

10.6

%

 

 

7.0

%

Adjusted EBITDA margin

 

 

17.6

%

 

 

16.7

%

 

 

16.9

%

 

 

16.0

%

GAAP income from continuing operations

 

$

103,687

 

 

$

43,964

 

 

$

206,425

 

 

$

118,375

 

Less: Net income attributable to noncontrolling interest

 

 

27

 

 

 

53

 

 

 

111

 

 

 

336

 

GAAP net income from continuing operations attributable to Belden stockholders

 

$

103,660

 

 

$

43,911

 

 

$

206,314

 

 

$

118,039

 

 

 

 

 

 

 

 

 

 

GAAP income from continuing operations

 

$

103,687

 

 

$

43,964

 

 

$

206,425

 

 

$

118,375

 

Plus: Operating income adjustments from above

 

 

(24,381

)

 

 

15,007

 

 

 

5,757

 

 

 

41,647

 

Plus: Non-operating pension settlement loss

 

 

954

 

 

 

 

 

 

954

 

 

 

 

Plus: Loss on debt extinguishment

 

 

 

 

 

5,715

 

 

 

6,392

 

 

 

5,715

 

Less: Net income attributable to noncontrolling interest

 

 

27

 

 

 

53

 

 

 

111

 

 

 

336

 

Less: Tax effect of adjustments above

 

 

2,121

 

 

 

4,042

 

 

 

10,360

 

 

 

9,360

 

Adjusted net income from continuing operations attributable to Belden stockholders

 

$

78,112

 

 

$

60,591

 

 

$

209,057

 

 

$

156,041

 

 

 

 

 

 

 

 

 

 

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

 

$

2.35

 

 

$

0.97

 

 

$

4.60

 

 

$

2.61

 

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

 

$

1.77

 

 

$

1.33

 

 

$

4.67

 

 

$

3.45

 

 

 

 

 

 

 

 

 

 

GAAP and adjusted diluted weighted average shares

 

 

44,063

 

 

 

45,425

 

 

 

44,810

 

 

 

45,242

 

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

 

Nine Months Ended

 

 

October 2, 2022

 

October 3, 2021

 

October 2, 2022

 

October 3, 2021

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

GAAP net cash provided by operating activities

 

$

87,381

 

 

$

74,982

 

 

$

78,800

 

 

$

101,919

 

Capital expenditures

 

 

(19,240

)

 

 

(24,703

)

 

 

(50,250

)

 

 

(55,569

)

Proceeds from disposal of assets

 

 

42,110

 

 

 

 

 

 

43,534

 

 

 

3,249

 

Non-GAAP free cash flow

 

$

110,251

 

 

$

50,279

 

 

$

72,084

 

 

$

49,599

 

BELDEN INC.

RECONCILIATION OF NON-GAAP MEASURES

2022 Guidance

 

 

 

Year Ended

 

Three Months Ended

 

 

December 31, 2022

 

December 31, 2022

 

 

 

 

 

 

 

(In thousands)

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

 

$5.89 - $5.99

 

$1.27 - $1.37

Amortization of intangible assets

 

0.71

 

0.19

Severance, restructuring, and acquisition integration costs

 

0.37

 

0.11

Loss from debt extinguishment

 

0.11

 

Gain on sale of asset

 

(0.81)

 

Adjustments related to acquisitions and divestitures

 

 

0.03

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

 

$6.27 - $6.37

 

$1.60 - $1.70

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 and any statements made by us concerning the subject matter of this release may contain forward-looking statements, including our expectations for the fourth quarter and full-year 2022. 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 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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