8-K
BELDEN INC. (BDC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_____________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 3, 2021
Belden Inc.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
_____________________
| Delaware | 001-12561 | 36-3601505 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
1 North Brentwood Boulevard, 15th Floor
St. Louis, Missouri 63105
(Address of Principal Executive Offices, including Zip Code)
(314) 854-8000
(Registrant’s telephone number, including area code)
n/a
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if this Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, $0.01 par value | BDC | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On November 3, 2021, Belden Inc. (the "Company") issued a press release announcing its financial results for the third quarter 2021. A copy of the press release is attached as Exhibit 99.1 and is incorporated into this current report.
The information in this Item 2.02 and in the press release (attached as Exhibit 99.1 to this current report) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise be subject to the liabilities of that Section or Section 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained in this Item 2.02 and in the accompanying exhibit shall not be incorporated by reference into any filing with the U.S. Securities and Exchange Commission made by the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 9.01. Financial Statements and Exhibits.
| d) Exhibits. | |
|---|---|
| Exhibit Number | |
| 99.1 | Company news release datedNovember 3, 2021, titled "Belden Reports Strong Results for Thirdcompanynewsreleasedatednov.htmQuarter 2021" |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BELDEN INC. | ||
|---|---|---|
| Date: November 3, 2021 | By: | /s/ Brian E. Anderson |
| Brian E. Anderson | ||
| Senior Vice President-Legal, General | ||
| Counsel and Corporate Secretary |
Document
Exhibit 99.1
| 1 North Brentwood Boulevard | Phone: 314.854.8000 |
|---|---|
| 15th Floor | Fax: 314.854.8003 |
| St. Louis, Missouri 63105 | |
| www.Belden.com |
News Release
Belden Reports Strong Results for Third Quarter 2021
St. Louis, Missouri – November 3, 2021 - Belden Inc. (NYSE: BDC), a leading global supplier of specialty networking solutions, today reported fiscal third quarter 2021 results for the period ended October 3, 2021.
Third Quarter 2021
Revenues for the quarter totaled $630.8 million, increasing $155.0 million, or 33%, compared to $475.8 million in the year-ago period. Net income was $41.3 million, compared to $20.6 million in the year-ago period. Net income as a percentage of revenue was 6.5% compared to 4.3% in the year-ago period. EPS totaled $0.91, compared to $0.46 in the third quarter 2020.
Adjusted revenues for the quarter totaled $631.3 million. Adjusted EBITDA was $100.7 million, increasing $35.4 million, or 54%, compared to $65.3 million in the year-ago period. Adjusted EBITDA margin was 16.0%, compared to 13.7% in the year-ago period. Adjusted EPS was $1.31, increasing 82% compared to $0.72 in the third quarter 2020. 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 outstanding quarter. Total revenues and EPS exceeded the high end of our guidance ranges, with revenues increasing 33% overall and 24% on an organic basis. Our teams are navigating the inflationary environment and the global supply chain challenges, yet driving solid growth, margin expansion, and cash flow. We took steps to further strengthen our balance sheet during the quarter, and net leverage of 2.8x is now back within our targeted range for the first time since the outbreak of the pandemic.”
Outlook
“I am encouraged by our order rates and continued solid execution. We are increasing our full year 2021 guidance to reflect better than expected performance in the third quarter and an improved outlook for the fourth quarter. We are executing several strategic growth initiatives, such as enhancing our solution selling capabilities and introducing innovative new products, and our strong results reflect the significant momentum we are gaining with customers. I am optimistic about our future and confident that the Company is well positioned to drive profitable growth and shareholder value,” said Mr. Vestjens.
On a GAAP basis, the Company expects fourth quarter 2021 revenues to be $614 - $629 million and EPS to be $0.77 - $0.87. For the full year ending December 31, 2021, the Company now expects revenues to be $2.383 - $2.398 billion, compared to prior guidance of $2.318 - $2.348 billion, and EPS to be $3.27 - $3.37, compared to prior guidance of $2.83 - $3.03.
The Company expects fourth quarter 2021 adjusted revenues to be $615 - $630 million and adjusted EPS to be $1.21 - $1.31. For the full year ending December 31, 2021, the Company now expects adjusted revenues to be $2.385 - $2.400 billion, compared to prior guidance of $2.320 - $2.350 billion, and adjusted EPS to be $4.67 - $4.77, compared to prior guidance of $4.37 - $4.57.
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 800-367-2403, with confirmation code 6838798. 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 | Nine Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| October 3, 2021 | September 27, 2020 | October 3, 2021 | September 27, 2020 | |||||
| (In thousands, except per share data) | ||||||||
| Revenues | $ | 630,835 | $ | 475,839 | $ | 1,769,190 | $ | 1,364,176 |
| Cost of sales | (407,559) | (308,247) | (1,143,035) | (876,143) | ||||
| Gross profit | 223,276 | 167,592 | 626,155 | 488,033 | ||||
| Selling, general and administrative expenses | (109,963) | (85,037) | (313,966) | (275,129) | ||||
| Research and development expenses | (32,451) | (30,324) | (94,873) | (81,633) | ||||
| Amortization of intangibles | (9,696) | (16,104) | (28,745) | (48,306) | ||||
| Operating income | 71,166 | 36,127 | 188,571 | 82,965 | ||||
| Interest expense, net | (16,251) | (15,607) | (46,640) | (43,188) | ||||
| Loss on debt extinguishment | (5,715) | — | (5,715) | — | ||||
| Non-operating pension benefit | 992 | 680 | 3,121 | 2,079 | ||||
| Income from continuing operations before taxes | 50,192 | 21,200 | 139,337 | 41,856 | ||||
| Income tax expense | (8,875) | (631) | (25,307) | (3,223) | ||||
| Income from continuing operations | 41,317 | 20,569 | 114,030 | 38,633 | ||||
| Loss from discontinued operations, net of tax | — | (6,231) | — | (103,395) | ||||
| Gain on disposal of discontinued operations, net of tax | — | 2,743 | — | 2,743 | ||||
| Net income (loss) | 41,317 | 17,081 | 114,030 | (62,019) | ||||
| Less: Net income attributable to noncontrolling interest | 53 | 85 | 336 | 79 | ||||
| Net income (loss) attributable to Belden stockholders | $ | 41,264 | $ | 16,996 | $ | 113,694 | $ | (62,098) |
| Weighted average number of common shares and equivalents: | ||||||||
| Basic | 44,851 | 44,567 | 44,762 | 44,834 | ||||
| Diluted | 45,425 | 44,709 | 45,242 | 44,968 | ||||
| Basic income (loss) per share attributable to Belden stockholders: | ||||||||
| Continuing operations | $ | 0.92 | $ | 0.46 | $ | 2.54 | $ | 0.86 |
| Discontinued operations | — | (0.14) | — | (2.31) | ||||
| Disposal of discontinued operations | — | 0.06 | — | 0.06 | ||||
| Net income (loss) | $ | 0.92 | $ | 0.38 | $ | 2.54 | $ | (1.39) |
| Diluted income (loss) per share attributable to Belden stockholders: | ||||||||
| Continuing operations | $ | 0.91 | $ | 0.46 | $ | 2.51 | $ | 0.86 |
| Discontinued operations | — | (0.14) | — | (2.31) | ||||
| Disposal of discontinued operations | — | 0.06 | — | 0.06 | ||||
| Net income (loss) | $ | 0.91 | $ | 0.38 | $ | 2.51 | $ | (1.39) |
| Common stock dividends declared per share | $ | 0.05 | $ | 0.05 | $ | 0.15 | $ | 0.15 |
BELDEN INC.
OPERATING SEGMENT INFORMATION
(Unaudited)
| Enterprise Solutions | Industrial Solutions | Total Segments | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (In thousands, except percentages) | ||||||||||
| For the three months ended October 3, 2021 | ||||||||||
| Segment Revenues | $ | 286,231 | $ | 345,107 | $ | 631,338 | ||||
| Segment EBITDA | 40,156 | 59,582 | 99,738 | |||||||
| Segment EBITDA margin | 14.0 | % | 17.3 | % | 15.8 | % | ||||
| Depreciation expense | 5,270 | 6,000 | 11,270 | |||||||
| Amortization of intangibles | 4,427 | 5,269 | 9,696 | |||||||
| Amortization of software development intangible assets | 20 | 770 | 790 | |||||||
| Severance, restructuring, and acquisition integration costs | 3,381 | 947 | 4,328 | |||||||
| Adjustments related to acquisitions and divestitures | (510) | 2,974 | 2,464 | |||||||
| For the three months ended September 27, 2020 | ||||||||||
| Segment Revenues | $ | 229,097 | $ | 246,742 | $ | 475,839 | ||||
| Segment EBITDA | 26,250 | 38,391 | 64,641 | |||||||
| Segment EBITDA margin | 11.5 | % | 15.6 | % | 13.6 | % | ||||
| Depreciation expense | 5,005 | 5,450 | 10,455 | |||||||
| Amortization of intangibles | 5,408 | 10,696 | 16,104 | |||||||
| Amortization of software development intangible assets | 73 | 456 | 529 | |||||||
| Severance, restructuring, and acquisition integration costs | 1,337 | 20 | 1,357 | |||||||
| For the nine months ended October 3, 2021 | ||||||||||
| Segment Revenues | $ | 780,114 | $ | 990,428 | $ | 1,770,542 | ||||
| Segment EBITDA | 103,531 | 167,676 | 271,207 | |||||||
| Segment EBITDA margin | 13.3 | % | 16.9 | % | 15.3 | % | ||||
| Depreciation expense | 15,985 | 18,212 | 34,197 | |||||||
| Amortization of intangibles | 13,202 | 15,543 | 28,745 | |||||||
| Amortization of software development intangible assets | 72 | 2,014 | 2,086 | |||||||
| Severance, restructuring, and acquisition integration costs | 7,756 | 4,783 | 12,539 | |||||||
| Adjustments related to acquisitions and divestitures | (6,828) | 11,825 | 4,997 | |||||||
| For the nine months ended September 27, 2020 | ||||||||||
| Segment Revenues | $ | 644,684 | $ | 719,492 | $ | 1,364,176 | ||||
| Segment EBITDA | 73,193 | 100,367 | 173,560 | |||||||
| Segment EBITDA margin | 11.4 | % | 13.9 | % | 12.7 | % | ||||
| Depreciation expense | 15,208 | 15,861 | 31,069 | |||||||
| Amortization of intangibles | 16,266 | 32,040 | 48,306 | |||||||
| Amortization of software development intangible assets | 184 | 1,061 | 1,245 | |||||||
| Severance, restructuring, and acquisition integration costs | 6,310 | 3,138 | 9,448 | |||||||
| Adjustments related to acquisitions and divestitures | 125 | — | 125 |
BELDEN INC.
OPERATING SEGMENT RECONCILIATION TO CONSOLIDATED RESULTS
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| October 3, 2021 | September 27, 2020 | October 3, 2021 | September 27, 2020 | |||||
| (In thousands) | ||||||||
| Total Segment Revenues | $ | 631,338 | $ | 475,839 | $ | 1,770,542 | $ | 1,364,176 |
| Adjustments related to acquisitions | (503) | — | (1,352) | — | ||||
| Consolidated Revenues | $ | 630,835 | $ | 475,839 | $ | 1,769,190 | $ | 1,364,176 |
| Total Segment EBITDA | $ | 99,738 | $ | 64,641 | $ | 271,207 | $ | 173,560 |
| Eliminations | (24) | (69) | (72) | (402) | ||||
| Total non-operating pension benefit | 992 | 680 | 3,121 | 2,079 | ||||
| Consolidated Adjusted EBITDA (1) | 100,706 | 65,252 | 274,256 | 175,237 | ||||
| Interest expense, net | (16,251) | (15,607) | (46,640) | (43,188) | ||||
| Depreciation expense | (11,270) | (10,455) | (34,197) | (31,069) | ||||
| Amortization of intangibles | (9,696) | (16,104) | (28,745) | (48,306) | ||||
| Severance, restructuring, and acquisition integration costs | (4,328) | (1,357) | (12,539) | (9,448) | ||||
| Loss on debt extinguishment | (5,715) | — | (5,715) | — | ||||
| Adjustments related to acquisitions and divestitures | (2,464) | — | (4,997) | (125) | ||||
| Amortization of software development intangible assets | (790) | (529) | (2,086) | (1,245) | ||||
| Income from continuing operations before taxes | $ | 50,192 | $ | 21,200 | $ | 139,337 | $ | 41,856 |
(1)Consolidated Adjusted EBITDA is a non-GAAP measure. See Reconciliation of Non-GAAP Measures for additional information.
BELDEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| October 3, 2021 | December 31, 2020 | |||
|---|---|---|---|---|
| (Unaudited) | ||||
| (In thousands) | ||||
| ASSETS | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 457,753 | $ | 501,994 |
| Receivables, net | 421,703 | 296,817 | ||
| Inventories, net | 312,088 | 247,298 | ||
| Other current assets | 48,890 | 52,289 | ||
| Assets held for sale | 27,559 | — | ||
| Total current assets | 1,267,993 | 1,098,398 | ||
| Property, plant and equipment, less accumulated depreciation | 334,407 | 368,620 | ||
| Operating lease right-of-use assets | 57,141 | 54,787 | ||
| Goodwill | 1,283,364 | 1,251,938 | ||
| Intangible assets, less accumulated amortization | 307,186 | 287,071 | ||
| Deferred income taxes | 29,057 | 29,536 | ||
| Other long-lived assets | 56,037 | 49,384 | ||
| $ | 3,335,185 | $ | 3,139,734 | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 321,253 | $ | 244,120 |
| Accrued liabilities | 301,174 | 276,641 | ||
| Total current liabilities | 622,427 | 520,761 | ||
| Long-term debt | 1,492,642 | 1,573,726 | ||
| Postretirement benefits | 144,526 | 160,400 | ||
| Deferred income taxes | 42,867 | 38,400 | ||
| Long-term operating lease liabilities | 47,054 | 46,398 | ||
| Other long-term liabilities | 39,898 | 42,998 | ||
| Stockholders’ equity: | ||||
| Common stock | 503 | 503 | ||
| Additional paid-in capital | 830,368 | 823,605 | ||
| Retained earnings | 557,764 | 450,876 | ||
| Accumulated other comprehensive loss | (131,265) | (191,851) | ||
| Treasury stock | (317,852) | (332,552) | ||
| Total Belden stockholders’ equity | 939,518 | 750,581 | ||
| Noncontrolling interests | 6,253 | 6,470 | ||
| Total stockholders’ equity | 945,771 | 757,051 | ||
| $ | 3,335,185 | $ | 3,139,734 |
BELDEN INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
| Nine Months Ended | ||||
|---|---|---|---|---|
| October 3, 2021 | September 27, 2020 | |||
| (In thousands) | ||||
| Cash flows from operating activities: | ||||
| Net income (loss) | $ | 114,030 | $ | (62,019) |
| Adjustments to reconcile net income (loss) to net cash from operating activities: | ||||
| Depreciation and amortization | 65,028 | 80,620 | ||
| Share-based compensation | 18,242 | 13,650 | ||
| Asset impairment | 9,283 | 113,007 | ||
| Loss on debt extinguishment | 5,715 | — | ||
| Gain on disposal of business | — | (2,743) | ||
| Changes in operating assets and liabilities, net of the effects of currency exchange rate changes, acquired businesses and disposals: | ||||
| Receivables | (128,997) | 35,645 | ||
| Inventories | (58,900) | (9,327) | ||
| Accounts payable | 73,740 | (69,579) | ||
| Accrued liabilities | 17,796 | (11,646) | ||
| Income taxes | 5,159 | (30,416) | ||
| Other assets | (1,794) | 1,860 | ||
| Other liabilities | (17,383) | (20,363) | ||
| Net cash provided by operating activities | 101,919 | 38,689 | ||
| Cash flows from investing activities: | ||||
| Cash from (used for) business acquisitions, net of cash acquired | (73,749) | 590 | ||
| Capital expenditures | (55,569) | (56,809) | ||
| Purchase of intangible assets | (3,650) | — | ||
| Proceeds from disposal of tangible assets | 3,249 | 3,090 | ||
| Proceeds from disposal of businesses, net of cash sold | 10,798 | 50,051 | ||
| Net cash used for investing activities | (118,921) | (3,078) | ||
| Cash flows from financing activities: | ||||
| Payments under borrowing arrangements | (360,304) | (190,000) | ||
| Debt issuance costs paid | (7,785) | — | ||
| Cash dividends paid | (6,740) | (6,800) | ||
| Payments under financing lease obligations | (3,116) | (154) | ||
| Withholding tax payments for share-based payment awards | (2,103) | (1,331) | ||
| Payments under share repurchase program | — | (35,000) | ||
| Payment of earnout consideration | — | (29,300) | ||
| Borrowings under credit arrangements | 356,010 | 190,000 | ||
| Net cash used for financing activities | (24,038) | (72,585) | ||
| Effect of foreign currency exchange rate changes on cash and cash equivalents | (3,201) | 2,586 | ||
| Decrease in cash and cash equivalents | (44,241) | (34,388) | ||
| Cash and cash equivalents, beginning of period | 501,994 | 425,885 | ||
| Cash and cash equivalents, end of period | $ | 457,753 | $ | 391,497 |
For the period ended September 27, 2020, the Condensed Consolidated Cash Flow Statement includes the results of discontinued operations up to the disposal date, July 2, 2020.
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 and deferred revenue 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 revenues and 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 the purchase accounting effect of recording deferred revenue at fair value in order to reflect the revenues that would have otherwise been recorded by acquired businesses had they remained as independent entities. We believe this presentation is useful in evaluating the underlying performance of acquired companies. Similarly, we adjust for other acquisition-related expenses, such as amortization of intangibles and other 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 3, 2021 | September 27, 2020 | October 3, 2021 | September 27, 2020 | |||||||||
| (In thousands, except percentages and per share amounts) | ||||||||||||
| GAAP revenues | $ | 630,835 | $ | 475,839 | $ | 1,769,190 | $ | 1,364,176 | ||||
| Adjustments related to acquisitions | 503 | — | 1,352 | — | ||||||||
| Adjusted revenues | $ | 631,338 | $ | 475,839 | $ | 1,770,542 | $ | 1,364,176 | ||||
| GAAP gross profit | $ | 223,276 | $ | 167,592 | $ | 626,155 | $ | 488,033 | ||||
| Adjustments related to acquisitions and divestitures | 890 | — | 3,701 | 125 | ||||||||
| Severance, restructuring, and acquisition integration costs | 2,943 | 85 | 4,306 | 222 | ||||||||
| Amortization of software development intangible assets | 790 | 529 | 2,086 | 1,245 | ||||||||
| Adjusted gross profit | $ | 227,899 | $ | 168,206 | $ | 636,248 | $ | 489,625 | ||||
| GAAP gross profit margin | 35.4 | % | 35.2 | % | 35.4 | % | 35.8 | % | ||||
| Adjusted gross profit margin | 36.1 | % | 35.3 | % | 35.9 | % | 35.9 | % | ||||
| GAAP selling, general and administrative expenses | $ | (109,963) | $ | (85,037) | $ | (313,966) | $ | (275,129) | ||||
| Severance, restructuring, and acquisition integration costs | 1,385 | 1,272 | 8,233 | 9,226 | ||||||||
| Adjustments related to acquisitions and divestitures | 1,574 | — | 1,296 | — | ||||||||
| Adjusted selling, general and administrative expenses | $ | (107,004) | $ | (83,765) | $ | (304,437) | $ | (265,903) | ||||
| GAAP and adjusted research and development expenses | $ | (32,451) | $ | (30,324) | $ | (94,873) | $ | (81,633) | ||||
| GAAP income from continuing operations | $ | 41,317 | $ | 20,569 | $ | 114,030 | $ | 38,633 | ||||
| Interest expense, net | 16,251 | 15,607 | 46,640 | 43,188 | ||||||||
| Income tax expense | 8,875 | 631 | 25,307 | 3,223 | ||||||||
| Loss on debt extinguishment | 5,715 | — | 5,715 | — | ||||||||
| Total non-operating adjustments | 30,841 | 16,238 | 77,662 | 46,411 | ||||||||
| Amortization of intangible assets | 9,696 | 16,104 | 28,745 | 48,306 | ||||||||
| Severance, restructuring, and acquisition integration costs | 4,328 | 1,357 | 12,539 | 9,448 | ||||||||
| Adjustments related to acquisitions and divestitures | 2,464 | — | 4,997 | 125 | ||||||||
| Amortization of software development intangible assets | 790 | 529 | 2,086 | 1,245 | ||||||||
| Total operating income adjustments | 17,278 | 17,990 | 48,367 | 59,124 | ||||||||
| Depreciation expense | 11,270 | 10,455 | 34,197 | 31,069 | ||||||||
| Adjusted EBITDA | $ | 100,706 | $ | 65,252 | $ | 274,256 | $ | 175,237 | ||||
| GAAP income from continuing operations margin | 6.5 | % | 4.3 | % | 6.4 | % | 2.8 | % | ||||
| Adjusted EBITDA margin | 16.0 | % | 13.7 | % | 15.5 | % | 12.8 | % | ||||
| GAAP income from continuing operations | $ | 41,317 | $ | 20,569 | $ | 114,030 | $ | 38,633 | ||||
| Less: Net income attributable to noncontrolling interest | 53 | 85 | 336 | 79 | ||||||||
| GAAP net income from continuing operations attributable to Belden stockholders | $ | 41,264 | $ | 20,484 | $ | 113,694 | $ | 38,554 | ||||
| GAAP income from continuing operations | $ | 41,317 | $ | 20,569 | $ | 114,030 | $ | 38,633 | ||||
| Plus: Operating income adjustments from above | 17,278 | 17,990 | 48,367 | 59,124 | ||||||||
| Plus: Loss on debt extinguishment | 5,715 | — | 5,715 | — | ||||||||
| Less: Net income attributable to noncontrolling interest | 53 | 85 | 336 | 79 | ||||||||
| Less: Tax effect of adjustments above | 4,638 | 6,292 | 11,002 | 14,687 | ||||||||
| Adjusted net income from continuing operations attributable to Belden stockholders | $ | 59,619 | $ | 32,182 | $ | 156,774 | $ | 82,991 | ||||
| GAAP income from continuing operations per diluted share attributable to Belden stockholders | $ | 0.91 | $ | 0.46 | $ | 2.51 | $ | 0.86 | ||||
| Adjusted income from continuing operations per diluted share attributable to Belden stockholders | $ | 1.31 | $ | 0.72 | $ | 3.47 | $ | 1.85 | ||||
| GAAP and adjusted diluted weighted average shares | 45,425 | 44,709 | 45,242 | 44,968 |
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 | Nine Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| October 3, 2021 | September 27, 2020 | October 3, 2021 | September 27, 2020 | |||||
| (In thousands) | ||||||||
| GAAP net cash provided by operating activities | $ | 74,982 | $ | 50,819 | $ | 101,919 | $ | 38,689 |
| Capital expenditures, net of proceeds from the disposal of tangible assets | (24,703) | (15,075) | (52,320) | (53,719) | ||||
| Non-GAAP free cash flow | $ | 50,279 | $ | 35,744 | $ | 49,599 | $ | (15,030) |
BELDEN INC.
RECONCILIATION OF NON-GAAP MEASURES
2021 Guidance
| Year Ended | Three Months Ended | |
|---|---|---|
| December 31, 2021 | December 31, 2021 | |
| (In thousands) | ||
| GAAP revenues | $2.383 - $2.398 billion | $614 - $629 million |
| Adjustments related to acquisitions | $2 million | $1 million |
| Adjusted revenues | $2.385 - $2.400 billion | $615 - $630 million |
| GAAP income from continuing operations per diluted share attributable to Belden common stockholders | $3.27 - $3.37 | $0.77 - $0.87 |
| Amortization of intangible assets | 0.73 | 0.18 |
| Severance, restructuring, and acquisition integration costs | 0.47 | 0.25 |
| Loss from debt extinguishment | 0.10 | — |
| Adjustments related to acquisitions and divestitures | 0.10 | 0.01 |
| Adjusted income from continuing operations per diluted share attributable to Belden common stockholders | $4.67 - $4.77 | $1.21 - $1.31 |
Our guidance for income from continuing operations per diluted share attributable to Belden common stockholders 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, purchase accounting effects related to acquisitions, 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.
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 2021 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 lack of certainty as to the duration and magnitude of the impact of COVID-19 and the economic recovery from that impact; the impact of a challenging global economy or a downturn in served markets; 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 cost and availability of raw materials including copper, plastic compounds, electronic components, and other materials, particularly given the recent increase in inflation and the financial impact if we are not able to pass through cost increases to customers; the impact of the recent disruptions in the global supply chain, including the inability to obtain components in sufficient quantities on commercially reasonable terms; the competitiveness of the global markets in which we operate; difficulty in forecasting revenue due to the unpredictable timing of orders related to customer projects as well as the impacts of channel inventory; 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 increased influence of chief information officers on purchasing decisions; the inability to execute and realize the expected benefits from strategic initiatives (including revenue growth, cost control, and productivity improvement programs); the inability to achieve our strategic priorities in emerging markets; the inability to successfully complete and integrate acquisitions in furtherance of the Company’s strategic plan; foreign and domestic political, economic and other uncertainties, including changes in currency exchange rates; 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; the inability to retain key employees; 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 Quarterly Report on Form 10-Q for the period ended July 4, 2021, filed with the SEC on August 9, 2021. 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 a comprehensive product portfolio designed to meet the mission-critical network infrastructure needs of industrial and enterprise markets. With innovative solutions targeted at reliable and secure transmission of rapidly growing amounts of audio, video and data needed for today's applications, Belden is at the center of the global transformation to a connected world. Founded in 1902, the company is headquartered in St. Louis and has manufacturing capabilities in North America, Europe, Asia, and Africa. For more information, visit us at www.belden.com or follow us on Twitter @BeldenInc.
Contact:
Belden Investor Relations
314-854-8054
Investor.Relations@Belden.com