Belden Reports Strong Results for Second Quarter 2022

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.

BELDEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

 

July 3, 2022

 

July 4, 2021

 

July 3, 2022

 

July 4, 2021

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except per share data)

Revenues

 

$

666,551

 

 

$

575,857

 

 

$

1,276,922

 

 

$

1,084,540

 

Cost of sales

 

 

(444,246

)

 

 

(384,503

)

 

 

(845,757

)

 

 

(724,003

)

Gross profit

 

 

222,305

 

 

 

191,354

 

 

 

431,165

 

 

 

360,537

 

Selling, general and administrative expenses

 

 

(105,203

)

 

 

(93,570

)

 

 

(208,269

)

 

 

(174,205

)

Research and development expenses

 

 

(25,989

)

 

 

(22,263

)

 

 

(49,445

)

 

 

(44,875

)

Amortization of intangibles

 

 

(9,177

)

 

 

(7,172

)

 

 

(17,994

)

 

 

(15,165

)

Asset impairments

 

 

 

 

 

 

 

 

 

 

 

(6,995

)

Operating income

 

 

81,936

 

 

 

68,349

 

 

 

155,457

 

 

 

119,297

 

Interest expense, net

 

 

(11,276

)

 

 

(14,870

)

 

 

(25,687

)

 

 

(30,381

)

Loss on debt extinguishment

 

 

 

 

 

 

 

 

(6,392

)

 

 

 

Non-operating pension benefit

 

 

1,070

 

 

 

1,445

 

 

 

2,270

 

 

 

2,129

 

Income from continuing operations before taxes

 

 

71,730

 

 

 

54,924

 

 

 

125,648

 

 

 

91,045

 

Income tax expense

 

 

(13,088

)

 

 

(9,578

)

 

 

(22,910

)

 

 

(16,634

)

Income from continuing operations

 

 

58,642

 

 

 

45,346

 

 

 

102,738

 

 

 

74,411

 

Loss from discontinued operations, net of tax

 

 

 

 

 

(1,374

)

 

 

(3,685

)

 

 

(1,698

)

Loss on disposal of discontinued operations, net of tax

 

 

 

 

 

 

 

 

(4,567

)

 

 

 

Net income

 

 

58,642

 

 

 

43,972

 

 

 

94,486

 

 

 

72,713

 

Less: Net income attributable to noncontrolling interest

 

 

81

 

 

 

208

 

 

 

84

 

 

 

283

 

Net income attributable to Belden stockholders

 

$

58,561

 

 

$

43,764

 

 

$

94,402

 

 

$

72,430

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares and equivalents:

 

 

 

 

 

 

 

 

Basic

 

 

44,252

 

 

 

44,759

 

 

 

44,535

 

 

 

44,717

 

Diluted

 

 

44,782

 

 

 

45,262

 

 

 

45,179

 

 

 

45,162

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Continuing operations

 

$

1.32

 

 

$

1.01

 

 

$

2.31

 

 

$

1.66

 

Discontinued operations

 

 

 

 

 

(0.03

)

 

 

(0.08

)

 

 

(0.04

)

Disposal of discontinued operations

 

 

 

 

 

 

 

 

(0.10

)

 

 

 

Net income

 

$

1.32

 

 

$

0.98

 

 

$

2.12

 

 

$

1.62

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Continuing operations

 

$

1.31

 

 

$

1.00

 

 

$

2.27

 

 

$

1.64

 

Discontinued operations

 

 

 

 

 

(0.03

)

 

 

(0.08

)

 

 

(0.04

)

Disposal of discontinued operations

 

 

 

 

 

 

 

 

(0.10

)

 

 

 

Net income

 

$

1.31

 

 

$

0.97

 

 

$

2.09

 

 

$

1.60

 

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 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 three months ended July 4, 2021

 

 

 

 

 

 

Segment Revenues

 

$

267,528

 

 

$

309,178

 

 

$

576,706

 

Segment EBITDA

 

 

36,001

 

 

 

55,464

 

 

 

91,465

 

Segment EBITDA margin

 

 

13.5

%

 

 

17.9

%

 

 

15.9

%

Depreciation expense

 

 

5,372

 

 

 

5,286

 

 

 

10,658

 

Amortization of intangibles

 

 

4,439

 

 

 

2,733

 

 

 

7,172

 

Amortization of software development intangible assets

 

 

20

 

 

 

302

 

 

 

322

 

Severance, restructuring, and acquisition integration costs

 

 

2,464

 

 

 

576

 

 

 

3,040

 

Adjustments related to acquisitions and divestitures

 

 

(32

)

 

 

1,944

 

 

 

1,912

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

For the six months ended July 4, 2021

 

 

 

 

 

 

Segment Revenues

 

$

493,883

 

 

$

591,506

 

 

$

1,085,389

 

Segment EBITDA

 

 

64,292

 

 

 

103,075

 

 

 

167,367

 

Segment EBITDA margin

 

 

13.0

%

 

 

17.4

%

 

 

15.4

%

Depreciation expense

 

 

10,735

 

 

 

10,650

 

 

 

21,385

 

Amortization of intangibles

 

 

8,775

 

 

 

6,390

 

 

 

15,165

 

Amortization of software development intangible assets

 

 

52

 

 

 

679

 

 

 

731

 

Severance, restructuring, and acquisition integration costs

 

 

4,416

 

 

 

3,795

 

 

 

8,211

 

Adjustments related to acquisitions and divestitures

 

 

(6,339

)

 

 

1,877

 

 

 

(4,462

)

Asset impairments

 

 

 

 

 

6,995

 

 

 

6,995

 

BELDEN INC.

OPERATING SEGMENT RECONCILIATION TO CONSOLIDATED RESULTS

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

 

July 3, 2022

 

July 4, 2021

 

July 3, 2022

 

July 4, 2021

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

Total segment revenues

 

$

666,551

 

 

$

576,706

 

 

$

1,276,922

 

 

$

1,085,389

 

Adjustments related to acquisitions

 

 

 

 

 

(849

)

 

 

 

 

 

(849

)

Consolidated revenues

 

$

666,551

 

 

$

575,857

 

 

$

1,276,922

 

 

$

1,084,540

 

 

 

 

 

 

 

 

 

 

Total Segment EBITDA

 

$

109,947

 

 

$

91,465

 

 

$

208,296

 

 

$

167,367

 

Eliminations

 

 

(50

)

 

 

(12

)

 

 

(105

)

 

 

(45

)

Total non-operating pension benefit

 

 

1,070

 

 

 

1,445

 

 

 

2,270

 

 

 

2,129

 

Consolidated Adjusted EBITDA (1)

 

 

110,967

 

 

 

92,898

 

 

 

210,461

 

 

 

169,451

 

Interest expense, net

 

 

(11,276

)

 

 

(14,870

)

 

 

(25,687

)

 

 

(30,381

)

Depreciation expense

 

 

(11,370

)

 

 

(10,658

)

 

 

(22,596

)

 

 

(21,385

)

Amortization of intangibles

 

 

(9,177

)

 

 

(7,172

)

 

 

(17,994

)

 

 

(15,165

)

Amortization of software development intangible assets

 

 

(981

)

 

 

(322

)

 

 

(1,988

)

 

 

(731

)

Loss on debt extinguishment

 

 

 

 

 

 

 

 

(6,392

)

 

 

 

Severance, restructuring, and acquisition integration costs

 

 

(5,857

)

 

 

(3,040

)

 

 

(9,580

)

 

 

(8,211

)

Asset impairments

 

 

 

 

 

 

 

 

 

 

 

(6,995

)

Adjustments related to acquisitions and divestitures

 

 

(576

)

 

 

(1,912

)

 

 

(576

)

 

 

4,462

 

Income from continuing operations before taxes

 

$

71,730

 

 

$

54,924

 

 

$

125,648

 

 

$

91,045

 

(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)

 

 

July 3, 2022

 

December 31, 2021

 

 

 

 

 

 

 

(In thousands)

ASSETS

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

527,682

 

 

$

641,563

 

Receivables, net

 

 

425,553

 

 

 

383,444

 

Inventories, net

 

 

394,346

 

 

 

345,203

 

Other current assets

 

 

61,268

 

 

 

58,283

 

Current assets of discontinued operations

 

 

 

 

 

449,402

 

Total current assets

 

 

1,408,849

 

 

 

1,877,895

 

Property, plant and equipment, less accumulated depreciation

 

 

340,610

 

 

 

343,564

 

Operating lease right-of-use assets

 

 

73,225

 

 

 

75,571

 

Goodwill

 

 

861,131

 

 

 

821,448

 

Intangible assets, less accumulated amortization

 

 

256,207

 

 

 

238,155

 

Deferred income taxes

 

 

33,731

 

 

 

31,486

 

Other long-lived assets

 

 

52,264

 

 

 

29,558

 

 

 

$

3,026,017

 

 

$

3,417,677

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

 

 

 

 

Accounts payable

 

$

349,446

 

 

$

377,765

 

Accrued liabilities

 

 

240,891

 

 

 

278,108

 

Current liabilities of discontinued operations

 

 

 

 

 

99,079

 

Total current liabilities

 

 

590,337

 

 

 

754,952

 

Long-term debt

 

 

1,137,853

 

 

 

1,459,991

 

Postretirement benefits

 

 

107,394

 

 

 

120,997

 

Deferred income taxes

 

 

59,849

 

 

 

49,027

 

Long-term operating lease liabilities

 

 

60,018

 

 

 

61,967

 

Other long-term liabilities

 

 

21,483

 

 

 

14,661

 

Stockholders’ equity:

 

 

 

 

Common stock

 

 

503

 

 

 

503

 

Additional paid-in capital

 

 

820,602

 

 

 

833,627

 

Retained earnings

 

 

595,613

 

 

 

505,717

 

Accumulated other comprehensive loss

 

 

(14,487

)

 

 

(70,566

)

Treasury stock

 

 

(354,029

)

 

 

(313,994

)

Total Belden stockholders’ equity

 

 

1,048,202

 

 

 

955,287

 

Noncontrolling interests

 

 

881

 

 

 

795

 

Total stockholders’ equity

 

 

1,049,083

 

 

 

956,082

 

 

 

$

3,026,017

 

 

$

3,417,677

 

BELDEN INC.

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS

(Unaudited)

 

 

Six Months Ended

 

 

July 3, 2022

 

July 4, 2021

 

 

 

 

 

 

 

(In thousands)

Cash flows from operating activities:

 

 

 

 

Net income

 

$

94,486

 

 

$

72,713

 

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

 

 

 

 

Depreciation and amortization

 

 

42,686

 

 

 

43,272

 

Loss on debt extinguishment

 

 

6,392

 

 

 

 

Share-based compensation

 

 

10,870

 

 

 

13,513

 

Asset impairments

 

 

 

 

 

6,995

 

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

 

 

 

 

Receivables

 

 

(20,699

)

 

 

(90,810

)

Inventories

 

 

(47,305

)

 

 

(50,111

)

Accounts payable

 

 

(23,563

)

 

 

50,158

 

Accrued liabilities

 

 

(58,525

)

 

 

227

 

Income taxes

 

 

163

 

 

 

1,474

 

Other assets

 

 

(2,634

)

 

 

(6,924

)

Other liabilities

 

 

(10,452

)

 

 

(13,853

)

Net cash provided by (used for) operating activities

 

 

(8,581

)

 

 

26,654

 

Cash flows from investing activities:

 

 

 

 

Proceeds from disposal of businesses, net of cash sold

 

 

338,686

 

 

 

10,798

 

Proceeds from disposal of tangible assets

 

 

1,424

 

 

 

3,249

 

Capital expenditures

 

 

(31,010

)

 

 

(30,866

)

Cash used for business acquisitions, net of cash acquired

 

 

(104,123

)

 

 

(73,749

)

Purchase of intangible assets

 

 

 

 

 

(3,650

)

Net cash provided by (used for) investing activities

 

 

204,977

 

 

 

(94,218

)

Cash flows from financing activities:

 

 

 

 

Payments under borrowing arrangements

 

 

(230,639

)

 

 

(1,841

)

Payments under share repurchase program

 

 

(66,559

)

 

 

 

Withholding tax payments for share-based payment awards

 

 

(5,167

)

 

 

(2,009

)

Cash dividends paid

 

 

(4,520

)

 

 

(4,493

)

Payments under financing lease obligations

 

 

(83

)

 

 

(75

)

Debt issuance costs paid

 

 

 

 

 

(1,728

)

Proceeds from issuance of common stock

 

 

3,717

 

 

 

 

Net cash used for financing activities

 

 

(303,251

)

 

 

(10,146

)

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

 

 

(9,220

)

 

 

(993

)

Decrease in cash and cash equivalents

 

 

(116,075

)

 

 

(78,703

)

Cash and cash equivalents, beginning of period

 

 

643,757

 

 

 

501,994

 

Cash and cash equivalents, end of period

 

$

527,682

 

 

$

423,291

 

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.

 

 

Three Months Ended

 

Six Months Ended

 

 

July 3, 2022

 

July 4, 2021

 

July 3, 2022

 

July 4, 2021

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except percentages and per share amounts)

GAAP revenues

 

$

666,551

 

 

$

575,857

 

 

$

1,276,922

 

 

$

1,084,540

 

Adjustments related to acquisitions

 

 

 

 

 

849

 

 

 

 

 

 

849

 

Adjusted revenues

 

$

666,551

 

 

$

576,706

 

 

$

1,276,922

 

 

$

1,085,389

 

 

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

222,305

 

 

$

191,354

 

 

$

431,165

 

 

$

360,537

 

Severance, restructuring, and acquisition integration costs

 

 

4,611

 

 

 

1,103

 

 

 

5,975

 

 

 

1,363

 

Amortization of software development intangible assets

 

 

981

 

 

 

322

 

 

 

1,988

 

 

 

731

 

Adjustments related to acquisitions and divestitures

 

 

1,134

 

 

 

1,995

 

 

 

1,134

 

 

 

2,811

 

Adjusted gross profit

 

$

229,031

 

 

$

194,774

 

 

$

440,262

 

 

$

365,442

 

 

 

 

 

 

 

 

 

 

GAAP gross profit margin

 

 

33.4

%

 

 

33.2

%

 

 

33.8

%

 

 

33.2

%

Adjusted gross profit margin

 

 

34.4

%

 

 

33.8

%

 

 

34.5

%

 

 

33.7

%

 

 

 

 

 

 

 

 

 

GAAP selling, general and administrative expenses

 

$

(105,203

)

 

$

(93,570

)

 

$

(208,269

)

 

$

(174,205

)

Severance, restructuring, and acquisition integration costs

 

 

1,246

 

 

 

1,937

 

 

 

3,605

 

 

 

6,848

 

Adjustments related to acquisitions and divestitures

 

 

(558

)

 

 

(83

)

 

 

(558

)

 

 

(7,273

)

Adjusted selling, general and administrative expenses

 

$

(104,515

)

 

$

(91,716

)

 

$

(205,222

)

 

$

(174,630

)

 

 

 

 

 

 

 

 

 

GAAP and adjusted research and development expenses

 

$

(25,989

)

 

$

(22,263

)

 

$

(49,445

)

 

$

(44,875

)

 

 

 

 

 

 

 

 

 

GAAP income from continuing operations

 

$

58,642

 

 

$

45,346

 

 

$

102,738

 

 

$

74,411

 

Interest expense, net

 

 

11,276

 

 

 

14,870

 

 

 

25,687

 

 

 

30,381

 

Income tax expense

 

 

13,088

 

 

 

9,578

 

 

 

22,910

 

 

 

16,634

 

Loss on debt extinguishment

 

 

 

 

 

 

 

 

6,392

 

 

 

 

Total non-operating adjustments

 

 

24,364

 

 

 

24,448

 

 

 

54,989

 

 

 

47,015

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

9,177

 

 

 

7,172

 

 

 

17,994

 

 

 

15,165

 

Severance, restructuring, and acquisition integration costs

 

 

5,857

 

 

 

3,040

 

 

 

9,580

 

 

 

8,211

 

Amortization of software development intangible assets

 

 

981

 

 

 

322

 

 

 

1,988

 

 

 

731

 

Asset impairments

 

 

 

 

 

 

 

 

 

 

 

6,995

 

Adjustments related to acquisitions and divestitures

 

 

576

 

 

 

1,912

 

 

 

576

 

 

 

(4,462

)

Total operating income adjustments

 

 

16,591

 

 

 

12,446

 

 

 

30,138

 

 

 

26,640

 

Depreciation expense

 

 

11,370

 

 

 

10,658

 

 

 

22,596

 

 

 

21,385

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

110,967

 

 

$

92,898

 

 

$

210,461

 

 

$

169,451

 

 

 

 

 

 

 

 

 

 

GAAP income from continuing operations margin

 

 

8.8

%

 

 

7.9

%

 

 

8.0

%

 

 

6.9

%

Adjusted EBITDA margin

 

 

16.6

%

 

 

16.1

%

 

 

16.5

%

 

 

15.6

%

 

 

 

 

 

 

 

 

 

GAAP income from continuing operations

 

$

58,642

 

 

$

45,346

 

 

$

102,738

 

 

$

74,411

 

Less: Net income attributable to noncontrolling interest

 

 

81

 

 

 

208

 

 

 

84

 

 

 

283

 

GAAP net income from continuing operations attributable to Belden stockholders

 

$

58,561

 

 

$

45,138

 

 

$

102,654

 

 

$

74,128

 

 

 

 

 

 

 

 

 

 

GAAP income from continuing operations

 

$

58,642

 

 

$

45,346

 

 

$

102,738

 

 

$

74,411

 

Plus: Operating income adjustments from above

 

 

16,591

 

 

 

12,446

 

 

 

30,138

 

 

 

26,640

 

Plus: Loss on debt extinguishment

 

 

 

 

 

 

 

 

6,392

 

 

 

 

Less: Net income attributable to noncontrolling interest

 

 

81

 

 

 

208

 

 

 

84

 

 

 

283

 

Less: Tax effect of adjustments above

 

 

3,692

 

 

 

2,498

 

 

 

8,239

 

 

 

5,318

 

Adjusted net income from continuing operations attributable to Belden stockholders

 

$

71,460

 

 

$

55,086

 

 

$

130,945

 

 

$

95,450

 

 

 

 

 

 

 

 

 

 

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

 

$

1.31

 

 

$

1.00

 

 

$

2.27

 

 

$

1.64

 

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

 

$

1.60

 

 

$

1.22

 

 

$

2.90

 

 

$

2.11

 

 

 

 

 

 

 

 

 

 

GAAP and adjusted diluted weighted average shares

 

 

44,782

 

 

 

45,262

 

 

 

45,179

 

 

 

45,162

 

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.

 

 

Three Months Ended

 

Six Months Ended

 

 

July 3, 2022

 

July 4, 2021

 

July 3, 2022

 

July 4, 2021

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

GAAP net cash provided by (used for) operating activities

 

$

49,374

 

 

$

68,149

 

 

$

(8,581

)

 

$

26,654

 

Capital expenditures, net of proceeds from the disposal of tangible assets

 

 

(18,679

)

 

 

(16,406

)

 

 

(29,586

)

 

 

(27,617

)

Non-GAAP free cash flow

 

$

30,695

 

 

$

51,743

 

 

$

(38,167

)

 

$

(963

)

BELDEN INC.

RECONCILIATION OF NON-GAAP MEASURES

2022 Guidance

 

 

Year Ended

 

Three Months Ended

 

 

December 31, 2022

 

October 2, 2022

 

 

 

 

 

 

 

(In thousands)

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

 

$4.67 - $4.87

 

$1.16 - $1.26

Amortization of intangible assets

 

0.71

 

0.19

Severance, restructuring, and acquisition integration costs

 

0.39

 

0.15

Loss from debt extinguishment

 

0.11

 

Adjustments related to acquisitions and divestitures

 

0.02

 

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

 

$5.90 - $6.10

 

$1.50 - $1.60

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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