EX-99.1 2 companynewsreleasedatedaug.htm EX-99.1 Document

Exhibit 99.1
 
graphica11.jpg
  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 Second Quarter 2021

St. Louis, Missouri – August 4, 2021 - Belden Inc. (NYSE: BDC), a leading global supplier of specialty networking solutions, today reported fiscal second quarter 2021 results for the period ended July 4, 2021.

Second Quarter 2021

Revenues for the quarter totaled $602.0 million, increasing $177.2 million, or 41.7%, compared to $424.8 million in the year-ago period. Net income was $44.0 million, compared to $3.2 million in the year-ago period. Net income as a percentage of revenue was 7.3% compared to 0.7% in the year-ago period. EPS totaled $0.97, compared to $0.07 in the second quarter 2020.

Adjusted revenues for the quarter totaled $602.8 million. Adjusted EBITDA was $93.4 million, increasing $44.3 million, or 90.2%, compared to $49.1 million in the year-ago period. Adjusted EBITDA margin was 15.5%, compared to 11.6% in the year-ago period. Adjusted EPS was $1.21, compared to $0.46 in the second 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 performed well again this quarter, and I am pleased to report total revenues and EPS that exceeded the high end of our guidance ranges. Demand continued to strengthen across our end markets, with second quarter revenues increasing 42% overall and 28% on an organic basis. Our global teams are executing our strategic plans and successfully navigating the inflationary environment, resulting in meaningful earnings growth, free cash flow growth and margin expansion.”

Outlook

“I am encouraged by our recent order rates and solid execution. We are increasing our full year 2021 guidance to reflect better than expected performance in the second quarter and an improved outlook for the remainder of the year. We are taking bold actions to accelerate organic growth, including aligning our portfolio around growth markets, driving innovation, and enhancing our commercial and solution-selling capabilities. Our strong first half performance is very gratifying, and I am pleased that our strategic growth initiatives are gaining traction,” said Mr. Vestjens.

On a GAAP basis, the Company expects third quarter 2021 revenues to be $589 – $604 million and EPS to be $0.56 - $0.66. For the full year ending December 31, 2021, the Company now expects revenues to be $2.318 - $2.348 billion, compared to prior guidance of $2.130 - $2.180 billion, and EPS to be $2.83 - $3.03, compared to prior guidance of $1.97 - $2.27.

The Company expects third quarter 2021 adjusted revenues to be $590 - $605 million and adjusted EPS to be $1.11 - $1.21. For the full year ending December 31, 2021, the Company now expects adjusted revenues to be $2.320 - $2.350 billion, compared to prior guidance of $2.130 - $2.180 billion, and adjusted EPS to be $4.37 - $4.57, compared to prior guidance of $3.50 - $3.80.

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 800-353-6461, with confirmation code 8744927. 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 EndedSix Months Ended
 July 4, 2021June 28, 2020July 4, 2021June 28, 2020
 (In thousands, except per share data)
Revenues$601,974 $424,811 $1,138,355 $888,337 
Cost of sales(390,439)(274,871)(735,476)(567,896)
Gross profit211,535 149,940 402,879 320,441 
Selling, general and administrative expenses(105,554)(91,703)(204,003)(190,092)
Research and development expenses(30,922)(25,090)(62,422)(51,309)
Amortization of intangibles(9,102)(16,017)(19,049)(32,202)
Operating income65,957 17,130 117,405 46,838 
Interest expense, net(14,878)(14,257)(30,389)(27,581)
Non-operating pension benefit1,445 700 2,129 1,399 
Income from continuing operations before taxes52,524 3,573 89,145 20,656 
Income tax expense(8,552)(400)(16,432)(2,592)
Income from continuing operations43,972 3,173 72,713 18,064 
Loss from discontinued operations, net of tax— (71,054)— (97,164)
Net income (loss) 43,972 (67,881)72,713 (79,100)
Less: Net income (loss) attributable to noncontrolling interest208 24 283 (6)
Net income (loss) attributable to Belden stockholders$43,764 $(67,905)$72,430 $(79,094)
Weighted average number of common shares and equivalents:
Basic44,759 44,557 44,717 44,969 
Diluted45,262 44,665 45,162 45,097 
Basic income (loss) per share attributable to Belden stockholders:
        Continuing operations$0.98 $0.07 $1.62 $0.40 
        Discontinued operations— (1.59)— (2.16)
        Net income (loss)$0.98 $(1.52)$1.62 $(1.76)
Diluted income (loss) per share attributable to Belden stockholders:
        Continuing operations$0.97 $0.07 $1.60 $0.40 
        Discontinued operations— (1.59)— (2.16)
        Net income (loss)$0.97 $(1.52)$1.60 $(1.76)
Common stock dividends declared per share$0.05 $0.05 $0.10 $0.10 



BELDEN INC.
OPERATING SEGMENT INFORMATION
(Unaudited)

Enterprise SolutionsIndustrial SolutionsTotal Segments
 (In thousands, except percentages)
For the three months ended July 4, 2021
Segment Revenues$267,528 $335,295 $602,823 
Segment EBITDA35,269 56,731 92,000 
Segment EBITDA margin13.2 %16.9 %15.3 %
Depreciation expense5,365 6,002 11,367 
Amortization of intangibles4,439 4,663 9,102 
Amortization of software development intangible assets20 587 607 
Severance, restructuring, and acquisition integration costs2,460 580 3,040 
Adjustments related to acquisitions and divestitures(32)1,944 1,912 
For the three months ended June 28, 2020
Segment Revenues$203,374 $221,437 $424,811 
Segment EBITDA22,231 26,449 48,680 
Segment EBITDA margin10.9 %11.9 %11.5 %
Depreciation expense5,122 5,210 10,332 
Amortization of intangibles5,354 10,663 16,017 
Amortization of software development intangible assets56 330 386 
Severance, restructuring, and acquisition integration costs2,423 2,049 4,472 
Adjustments related to acquisitions and divestitures105 — 105 
For the six months ended July 4, 2021
Segment Revenues$493,883 $645,321 $1,139,204 
Segment EBITDA63,375 108,094 171,469 
Segment EBITDA margin12.8 %16.8 %15.1 %
Depreciation expense10,715 12,212 22,927 
Amortization of intangibles8,775 10,274 19,049 
Amortization of software development intangible assets52 1,244 1,296 
Severance, restructuring, and acquisition integration costs4,375 3,836 8,211 
Adjustments related to acquisitions and divestitures(6,318)8,851 2,533 
For the six months ended June 28, 2020
Segment Revenues$415,587 $472,750 $888,337 
Segment EBITDA46,943 61,976 108,919 
Segment EBITDA margin11.3 %13.1 %12.3 %
Depreciation expense10,203 10,411 20,614 
Amortization of intangibles10,858 21,344 32,202 
Amortization of software development intangible assets111 605 716 
Severance, restructuring, and acquisition integration costs4,973 3,118 8,091 
Adjustments related to acquisitions and divestitures125 — 125 



BELDEN INC.
OPERATING SEGMENT RECONCILIATION TO CONSOLIDATED RESULTS
(Unaudited)
 
 Three Months EndedSix Months Ended
 July 4, 2021June 28, 2020July 4, 2021June 28, 2020
 (In thousands)
Total Segment Revenues$602,823 $424,811 $1,139,204 $888,337 
    Adjustments related to acquisitions (849)— (849)— 
Consolidated Revenues$601,974 $424,811 $1,138,355 $888,337 
Total Segment EBITDA$92,000 $48,680 $171,469 $108,919 
    Eliminations(15)(238)(48)(333)
    Total non-operating pension benefit1,445 700 2,129 1,399 
Consolidated Adjusted EBITDA (1)93,430 49,142 173,550 109,985 
    Interest expense, net(14,878)(14,257)(30,389)(27,581)
    Depreciation expense(11,367)(10,332)(22,927)(20,614)
    Amortization of intangibles (9,102)(16,017)(19,049)(32,202)
    Severance, restructuring, and acquisition integration costs(3,040)(4,472)(8,211)(8,091)
    Adjustments related to acquisitions and divestitures(1,912)(105)(2,533)(125)
    Amortization of software development intangible assets(607)(386)(1,296)(716)
Income from continuing operations before taxes $52,524 $3,573 $89,145 $20,656 
 
(1)Consolidated Adjusted EBITDA is a non-GAAP measure. See Reconciliation of Non-GAAP Measures for additional information.



















BELDEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 
July 4, 2021December 31, 2020
(Unaudited)
 (In thousands)
ASSETS
Current assets:
Cash and cash equivalents$423,291 $501,994 
Receivables, net386,133 296,817 
Inventories, net304,821 247,298 
Other current assets50,725 52,289 
            Total current assets1,164,970 1,098,398 
Property, plant and equipment, less accumulated depreciation360,338 368,620 
Operating lease right-of-use assets59,509 54,787 
Goodwill1,286,617 1,251,938 
Intangible assets, less accumulated amortization314,283 287,071 
Deferred income taxes30,144 29,536 
Other long-lived assets54,066 49,384 
$3,269,927 $3,139,734 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$299,428 $244,120 
Accrued liabilities283,109 276,641 
Total current liabilities582,537 520,761 
Long-term debt1,527,047 1,573,726 
Postretirement benefits152,080 160,400 
Deferred income taxes43,205 38,400 
Long-term operating lease liabilities49,805 46,398 
Other long-term liabilities41,155 42,998 
Stockholders’ equity:
Common stock503 503 
Additional paid-in capital827,139 823,605 
Retained earnings518,774 450,876 
Accumulated other comprehensive loss(159,391)(191,851)
Treasury stock(319,274)(332,552)
Total Belden stockholders’ equity867,751 750,581 
Noncontrolling interests6,347 6,470 
Total stockholders’ equity874,098 757,051 
$3,269,927 $3,139,734 





BELDEN INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
 
 Six Months Ended
 July 4, 2021June 28, 2020
 (In thousands)
Cash flows from operating activities:
Net income (loss)$72,430 $(79,100)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization43,272 53,533 
Share-based compensation13,513 8,798 
Asset impairment6,995 113,007 
Changes in operating assets and liabilities, net of the effects of currency exchange rate changes, acquired businesses and disposals:
Receivables(90,810)52,602 
Inventories(50,111)(9,769)
Accounts payable50,158 (86,382)
Accrued liabilities227 (13,697)
Income taxes1,474 (46,274)
Other assets(6,924)13,971 
Other liabilities(13,570)(18,819)
Net cash provided by (used for) operating activities26,654 (12,130)
Cash flows from investing activities:
Cash from (used for) business acquisitions, net of cash acquired(73,749)590 
Capital expenditures(30,866)(41,734)
Purchase of intangible assets(3,650)— 
Proceeds from disposal of tangible assets3,249 3,090 
Proceeds from disposal of business, net of cash sold10,798 — 
Net cash used for investing activities(94,218)(38,054)
Cash flows from financing activities:
Cash dividends paid(4,493)(4,572)
Withholding tax payments for share-based payment awards(2,009)(1,058)
Payments under borrowing arrangements(1,841)(100,000)
Debt issuance costs paid(1,728)— 
Other(75)(111)
Payments under share repurchase program— (35,000)
Payment of earnout consideration— (29,300)
Borrowings on revolver— 190,000 
Net cash provided by (used for) financing activities(10,146)19,959 
Effect of foreign currency exchange rate changes on cash and cash equivalents(993)(2,620)
   Decrease in cash and cash equivalents (78,703)(32,845)
Cash and cash equivalents, beginning of period501,994 425,885 
   Cash and cash equivalents, end of period$423,291 $393,040 

The Condensed Consolidated Cash Flow Statement for the period ended June 28, 2020 includes the results of discontinued operations, which were sold on 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 EndedSix Months Ended
July 4, 2021June 28, 2020July 4, 2021June 28, 2020
(In thousands, except percentages and per share amounts)
GAAP revenues$601,974 $424,811 $1,138,355 $888,337 
Adjustments related to acquisitions849 — 849 — 
Adjusted revenues$602,823 $424,811 $1,139,204 $888,337 
GAAP gross profit$211,535 $149,940 $402,879 $320,441 
Adjustments related to acquisitions and divestitures1,995 105 2,811 125 
Severance, restructuring, and acquisition integration costs1,103 92 1,363 137 
Amortization of software development intangible assets607 386 1,296 716 
Adjusted gross profit$215,240 $150,523 $408,349 $321,419 
GAAP gross profit margin35.1 %35.3 %35.4 %36.1 %
Adjusted gross profit margin35.7 %35.4 %35.8 %36.2 %
GAAP selling, general and administrative expenses$(105,554)$(91,703)$(204,003)$(190,092)
Severance, restructuring, and acquisition integration costs1,937 4,380 6,848 7,954 
Adjustments related to acquisitions and divestitures(83)— (278)— 
Adjusted selling, general and administrative expenses$(103,700)$(87,323)$(197,433)$(182,138)
GAAP and adjusted research and development expenses$(30,922)$(25,090)$(62,422)$(51,309)
GAAP income from continuing operations$43,972 $3,173 $72,713 $18,064 
Interest expense, net14,878 14,257 30,389 27,581 
Income tax expense 8,552 400 16,432 2,592 
Total non-operating adjustments23,430 14,657 46,821 30,173 
Amortization of intangible assets9,102 16,017 19,049 32,202 
Severance, restructuring, and acquisition integration costs3,040 4,472 8,211 8,091 
Adjustments related to acquisitions and divestitures1,912 105 2,533 125 
Amortization of software development intangible assets607 386 1,296 716 
Total operating income adjustments14,661 20,980 31,089 41,134 
Depreciation expense11,367 10,332 22,927 20,614 
Adjusted EBITDA$93,430 $49,142 $173,550 $109,985 
GAAP income from continuing operations margin7.3 %0.7 %6.4 %2.0 %
Adjusted EBITDA margin15.5 %11.6 %15.2 %12.4 %
GAAP income from continuing operations$43,972 $3,173 $72,713 $18,064 
Less:  Net income (loss) attributable to noncontrolling interest208 24 283 (6)
GAAP net income from continuing operations attributable to Belden stockholders$43,764 $3,149 $72,430 $18,070 
GAAP income from continuing operations$43,972 $3,173 $72,713 $18,064 
Plus: Operating income adjustments from above14,661 20,980 31,089 41,134 
Less: Net income (loss) attributable to noncontrolling interest208 24 283 (6)
Less: Tax effect of adjustments above3,676 3,800 6,364 8,395 
Adjusted net income from continuing operations attributable to Belden stockholders$54,749 $20,329 $97,155 $50,809 
GAAP income from continuing operations per diluted share attributable to Belden stockholders$0.97 $0.07 $1.60 $0.40 
Adjusted income from continuing operations per diluted share attributable to Belden stockholders$1.21 $0.46 $2.15 $1.13 
GAAP and adjusted diluted weighted average shares45,262 44,665 45,162 45,097 



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 EndedSix Months Ended
 July 4, 2021June 28, 2020July 4, 2021June 28, 2020
 (In thousands)
GAAP net cash provided by (used for) operating activities$68,149 $39,922 $26,654 $(12,130)
Capital expenditures, net of proceeds from the disposal of tangible assets(16,406)(19,799)(27,617)(38,644)
Non-GAAP free cash flow$51,743 $20,123 $(963)$(50,774)




BELDEN INC.
RECONCILIATION OF NON-GAAP MEASURES
2021 Guidance

 Year EndedThree Months Ended
 December 31, 2021October 3, 2021
 (In thousands)
GAAP revenues$2.318 - $2.348 billion$589 - $604 million
Adjustments related to acquisitions$2 million$1 million
Adjusted revenues$2.320 - $2.350 billion$590 - $605 million
GAAP income from continuing operations per diluted share attributable to Belden common stockholders$2.83 - $3.03$0.56 - $0.66
Amortization of intangible assets0.720.19
Severance, restructuring, and acquisition integration costs0.560.21
Loss from debt extinguishment0.140.14
Adjustments related to acquisitions and divestitures0.120.01
Adjusted income from continuing operations per diluted share attributable to Belden common stockholders$4.37 - $4.57$1.11 - $1.21

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 third 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; 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 Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 16, 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 and South America, Europe and Asia. 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