ST. LOUIS--(BUSINESS WIRE)--Belden Inc. (NYSE: BDC), a leading global supplier of specialty networking solutions, today reported fiscal third quarter 2019 results for the period ended September 29, 2019. The Company also announced two significant outcomes of its comprehensive strategic portfolio review. These include the intent to divest the Live Media business (“Grass Valley”) and a new broad-based cost reduction program that is expected to result in $40 million of annualized savings.
Third Quarter 2019
Revenues for the quarter totaled $620.3 million, decreasing $35.5 million, or 5.4%, compared to $655.8 million in the third quarter 2018. Net loss was $(297.0) million, compared to $85.9 million in the prior-year period. Net loss included a $337.0 million after-tax non-cash impairment charge related to Grass Valley. EPS totaled $(6.70) compared to $1.80 in the third quarter 2018.
Excluding Grass Valley, adjusted revenues totaled $533.1 million, decreasing $20.9 million, or 3.8%, compared to $554.0 million in the third quarter 2018. Excluding Grass Valley, adjusted EPS was $1.18 compared to $1.29 in the third quarter 2018. Adjusted results are non-GAAP measures, and a non-GAAP reconciliation table is provided as an appendix to this release.
John Stroup, President, CEO, and Chairman of Belden Inc., said, “Revenues were near the midpoint of our expected range excluding Grass Valley. Consistent with our expectations, demand trends remained softer in some of our key Industrial markets in the third quarter, but we are encouraged by the improving trends in our Broadband business.”
Intent to Divest Grass Valley
Subsequent to the end of the third quarter, the Company made the decision to pursue the divestiture of Grass Valley. Based on the approval of Belden’s Board of Directors to divest this business and the probability that such divestiture will be consummated, Grass Valley’s financial results will be presented as discontinued operations in our fourth quarter and full year 2019 financial statements and prior periods will be recast for consistency.
Mr. Stroup remarked, “We completed a rigorous strategic review of our portfolio of businesses, and today’s announcement marks an important outcome. We concluded that it is in the best interests of our shareholders, customers, and employees to separate Grass Valley from Belden. This will enable Grass Valley to more effectively execute its strategic plan and pursue growth opportunities. Further, this separation will simplify Belden’s portfolio and improve organic growth and revenue visibility.”
“The remaining Belden portfolio will consist of strong businesses in attractive Industrial and Enterprise markets, each aligned with powerful secular trends. These include industrial automation, cybersecurity, broadband & 5G, and smart buildings. This portfolio, while smaller, offers improved predictability and multiple platforms for accelerating organic growth and margin expansion. In addition, we continue to see numerous opportunities for disciplined capital deployment as we invest in compelling inorganic opportunities in these robust markets,” said Mr. Stroup.
Cost Reduction Program
The divestiture of Grass Valley provides an opportunity for a broad-based organizational recalibration. As a result, the Company announced a cost reduction program that is designed to improve performance and enhance margins, delivering a $40 million annualized reduction in selling, general, and administrative expenses. The Company intends to deliver improvements by streamlining the organizational structure and investing in technology to drive productivity. These actions will begin immediately, with some benefit in 2020, and the full benefit in 2021.
“Belden has a long track record of substantial growth, margin expansion, and shareholder value creation, but we are not satisfied with our recent performance. We are reaffirming our commitment to our stated financial goals, including a total revenue CAGR of 5-7% and EBITDA margins of 20-22%. The Company will be well-positioned to achieve these goals after executing these actions. Importantly, the expected cost savings will more than offset the free cash flow dilution associated with the divestiture of Grass Valley,” said Mr. Stroup.
Outlook
“Near-term demand trends remain challenging, but our simplified portfolio of businesses is aligned with long-term secular trends and positioned for profitable growth. We are updating our expectations of revenue and EPS from continuing operations since Grass Valley will be presented as discontinued operations in our fourth quarter and full year 2019 financial statements,” said Mr. Stroup.
The Company expects fourth quarter 2019 revenues to be $510 - $530 million. For the full year ending December 31, 2019, the Company now expects revenues to be $2.092 - $2.112 billion.
The Company expects fourth quarter 2019 GAAP EPS to be $0.00 - $0.15. For the full year ending December 31, 2019, the Company now expects GAAP EPS of $2.04 - $2.19. This full year 2019 guidance relates to income from continuing operations and excludes Grass Valley, the $337.0 million after-tax non-cash impairment charge related to Grass Valley and an estimated loss of $75 million upon a sale of Grass Valley, primarily related to its accumulated foreign currency translation losses, as these items will be included in income (losses) from discontinued operations.
The Company expects fourth quarter 2019 adjusted EPS to be $1.00 - $1.15. For the full year ending December 31, 2019, the Company now expects adjusted EPS of $4.32 - $4.47.
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 http://investor.belden.com. The dial-in number for participants in the U.S. is 888-599-8686; the dial-in number for participants outside the U.S. is 720-543-0302. 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 net income attributable to Belden and income from continuing operations per diluted share attributable to Belden common 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 http://investor.belden.com.
BELDEN INC. |
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
September 29,
|
|
September 30,
|
|
September 29,
|
|
September 30,
|
||||||||
|
|
(In thousands, except per share data) |
||||||||||||||
Revenues |
|
$ |
620,318 |
|
|
$ |
655,774 |
|
|
$ |
1,845,023 |
|
|
$ |
1,929,978 |
|
Cost of sales |
|
(384,916 |
) |
|
(394,917 |
) |
|
(1,143,870 |
) |
|
(1,180,931 |
) |
||||
Gross profit |
|
235,402 |
|
|
260,857 |
|
|
701,153 |
|
|
749,047 |
|
||||
Selling, general and administrative expenses |
|
(120,169 |
) |
|
(132,716 |
) |
|
(365,439 |
) |
|
(396,430 |
) |
||||
Research and development expenses |
|
(31,351 |
) |
|
(33,471 |
) |
|
(100,539 |
) |
|
(107,781 |
) |
||||
Amortization of intangibles |
|
(22,243 |
) |
|
(25,533 |
) |
|
(67,952 |
) |
|
(74,990 |
) |
||||
Goodwill and other asset impairment |
|
(342,146 |
) |
|
— |
|
|
(342,146 |
) |
|
— |
|
||||
Gain from patent litigation |
|
— |
|
|
62,141 |
|
|
— |
|
|
62,141 |
|
||||
Operating income (loss) |
|
(280,507 |
) |
|
131,278 |
|
|
(174,923 |
) |
|
231,987 |
|
||||
Interest expense, net |
|
(14,200 |
) |
|
(14,472 |
) |
|
(42,561 |
) |
|
(46,538 |
) |
||||
Non-operating pension benefit |
|
489 |
|
|
1,356 |
|
|
1,517 |
|
|
824 |
|
||||
Loss on debt extinguishment |
|
— |
|
|
— |
|
|
— |
|
|
(22,990 |
) |
||||
Income (loss) before taxes |
|
(294,218 |
) |
|
118,162 |
|
|
(215,967 |
) |
|
163,283 |
|
||||
Income tax expense |
|
(2,797 |
) |
|
(32,304 |
) |
|
(13,580 |
) |
|
(46,063 |
) |
||||
Net income (loss) |
|
(297,015 |
) |
|
85,858 |
|
|
(229,547 |
) |
|
117,220 |
|
||||
Less: Net income (loss) attributable to noncontrolling interests |
|
(6 |
) |
|
(23 |
) |
|
60 |
|
|
(148 |
) |
||||
Net income (loss) attributable to Belden |
|
(297,009 |
) |
|
85,881 |
|
|
(229,607 |
) |
|
117,368 |
|
||||
Less: Preferred stock dividends |
|
971 |
|
|
8,732 |
|
|
18,437 |
|
|
26,198 |
|
||||
Net income (loss) attributable to Belden common stockholders |
|
$ |
(297,980 |
) |
|
$ |
77,149 |
|
|
$ |
(248,044 |
) |
|
$ |
91,170 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares and equivalents: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
44,444 |
|
|
40,510 |
|
|
41,090 |
|
|
40,960 |
|
||||
Diluted |
|
44,444 |
|
|
47,678 |
|
|
41,090 |
|
|
41,268 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic income (loss) per share attributable to Belden common stockholders: |
|
$ |
(6.70 |
) |
|
$ |
1.90 |
|
|
$ |
(6.04 |
) |
|
$ |
2.23 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted income (loss) per share attributable to Belden common stockholders: |
|
$ |
(6.70 |
) |
|
$ |
1.80 |
|
|
$ |
(6.04 |
) |
|
$ |
2.21 |
|
|
|
|
|
|
|
|
|
|
||||||||
Common stock dividends declared per share |
|
$ |
0.05 |
|
|
$ |
0.05 |
|
|
$ |
0.15 |
|
|
$ |
0.15 |
|
BELDEN INC. |
||||||||||||
OPERATING SEGMENT INFORMATION |
||||||||||||
(Unaudited) |
||||||||||||
|
|
Enterprise
|
|
Industrial
|
|
Total
|
||||||
|
(In thousands, except percentages) |
|||||||||||
|
|
|
|
|
|
|
||||||
For the three months ended September 29, 2019 |
|
|
|
|
|
|
||||||
Segment Revenues |
|
$ |
368,080 |
|
|
$ |
252,238 |
|
|
$ |
620,318 |
|
Segment EBITDA |
|
56,814 |
|
|
44,614 |
|
|
101,428 |
|
|||
Segment EBITDA margin |
|
15.4 |
% |
|
17.7 |
% |
|
16.4 |
% |
|||
Depreciation expense |
|
7,381 |
|
|
4,766 |
|
|
12,147 |
|
|||
Amortization of intangibles |
|
9,780 |
|
|
12,463 |
|
|
22,243 |
|
|||
Amortization of software development intangible assets |
|
1,161 |
|
|
36 |
|
|
1,197 |
|
|||
Severance, restructuring, and acquisition integration costs |
|
4,045 |
|
|
— |
|
|
4,045 |
|
|||
Purchase accounting effects of acquisitions |
|
(186 |
) |
|
— |
|
|
(186 |
) |
|||
Goodwill and other asset impairment |
|
342,146 |
|
|
— |
|
|
342,146 |
|
|||
|
|
|
|
|
|
|
||||||
For the three months ended September 30, 2018 |
|
|
|
|
|
|
||||||
Segment Revenues |
|
$ |
392,080 |
|
|
$ |
266,923 |
|
|
$ |
659,003 |
|
Segment EBITDA |
|
72,210 |
|
|
53,750 |
|
|
125,960 |
|
|||
Segment EBITDA margin |
|
18.4 |
% |
|
20.1 |
% |
|
19.1 |
% |
|||
Depreciation expense |
|
7,092 |
|
|
4,579 |
|
|
11,671 |
|
|||
Amortization of intangibles |
|
12,322 |
|
|
13,211 |
|
|
25,533 |
|
|||
Amortization of software development intangible assets |
|
620 |
|
|
— |
|
|
620 |
|
|||
Severance, restructuring, and acquisition integration costs |
|
9,528 |
|
|
2,160 |
|
|
11,688 |
|
|||
Purchase accounting effects of acquisitions |
|
821 |
|
|
— |
|
|
821 |
|
|||
Deferred revenue adjustments |
|
3,229 |
|
|
— |
|
|
3,229 |
|
|||
|
|
|
|
|
|
|
||||||
For the nine months ended September 29, 2019 |
|
|
|
|
|
|
||||||
Segment Revenues |
|
$ |
1,064,469 |
|
|
$ |
780,554 |
|
|
$ |
1,845,023 |
|
Segment EBITDA |
|
149,855 |
|
|
139,531 |
|
|
289,386 |
|
|||
Segment EBITDA margin |
|
14.1 |
% |
|
17.9 |
% |
|
15.7 |
% |
|||
Depreciation expense |
|
22,655 |
|
|
14,515 |
|
|
37,170 |
|
|||
Amortization of intangibles |
|
29,270 |
|
|
38,682 |
|
|
67,952 |
|
|||
Amortization of software development intangible assets |
|
3,119 |
|
|
87 |
|
|
3,206 |
|
|||
Severance, restructuring, and acquisition integration costs |
|
10,904 |
|
|
— |
|
|
10,904 |
|
|||
Purchase accounting effects of acquisitions |
|
1,845 |
|
|
— |
|
|
1,845 |
|
|||
Goodwill and other asset impairment |
|
342,146 |
|
|
— |
|
|
342,146 |
|
|||
|
|
|
|
|
|
|
||||||
For the nine months ended September 30, 2018 |
|
|
|
|
|
|
||||||
Segment Revenues |
|
$ |
1,142,765 |
|
|
$ |
795,102 |
|
|
$ |
1,937,867 |
|
Segment EBITDA |
|
199,943 |
|
|
153,401 |
|
|
353,344 |
|
|||
Segment EBITDA margin |
|
17.5 |
% |
|
19.3 |
% |
|
18.2 |
% |
|||
Depreciation expense |
|
21,465 |
|
|
14,097 |
|
|
35,562 |
|
|||
Amortization of intangibles |
|
35,301 |
|
|
39,689 |
|
|
74,990 |
|
|||
Amortization of software development intangible assets |
|
1,344 |
|
|
— |
|
|
1,344 |
|
|||
Severance, restructuring, and acquisition integration costs |
|
46,949 |
|
|
10,061 |
|
|
57,010 |
|
|||
Purchase accounting effects of acquisitions |
|
2,359 |
|
|
— |
|
|
2,359 |
|
|||
Deferred revenue adjustments |
7,889 |
— |
7,889 |
|||||||||
| BELDEN INC. | ||||||||||||||||
OPERATING SEGMENT RECONCILIATION TO CONSOLIDATED RESULTS |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
September 29,
|
|
September 30,
|
|
September 29,
|
|
September 30,
|
||||||||
|
|
(In thousands) |
||||||||||||||
Total Segment Revenues |
|
$ |
620,318 |
|
|
$ |
659,003 |
|
|
$ |
1,845,023 |
|
|
$ |
1,937,867 |
|
Deferred revenue adjustments |
|
— |
|
|
(3,229 |
) |
|
— |
|
|
(7,889 |
) |
||||
Consolidated Revenues |
|
$ |
620,318 |
|
|
$ |
655,774 |
|
|
$ |
1,845,023 |
|
|
$ |
1,929,978 |
|
|
|
|
|
|
|
|
|
|
||||||||
Total Segment EBITDA |
|
$ |
101,428 |
|
|
$ |
125,960 |
|
|
$ |
289,386 |
|
|
$ |
353,344 |
|
Eliminations |
|
(343 |
) |
|
(627 |
) |
|
(1,086 |
) |
|
(1,616 |
) |
||||
Total non-operating pension benefit |
|
489 |
|
|
1,356 |
|
|
1,517 |
|
|
824 |
|
||||
Consolidated Adjusted EBITDA (1) |
|
101,574 |
|
|
126,689 |
|
|
289,817 |
|
|
352,552 |
|
||||
Goodwill and other asset impairment |
|
(342,146 |
) |
|
— |
|
|
(342,146 |
) |
|
— |
|
||||
Amortization of intangibles |
|
(22,243 |
) |
|
(25,533 |
) |
|
(67,952 |
) |
|
(74,990 |
) |
||||
Interest expense, net |
|
(14,200 |
) |
|
(14,472 |
) |
|
(42,561 |
) |
|
(46,538 |
) |
||||
Depreciation expense |
|
(12,147 |
) |
|
(11,671 |
) |
|
(37,170 |
) |
|
(35,562 |
) |
||||
Severance, restructuring, and acquisition integration costs |
|
(4,045 |
) |
|
(11,688 |
) |
|
(10,904 |
) |
|
(57,010 |
) |
||||
Amortization of software development intangible assets |
|
(1,197 |
) |
|
(620 |
) |
|
(3,206 |
) |
|
(1,344 |
) |
||||
Purchase accounting effects related to acquisitions |
|
186 |
|
|
(821 |
) |
|
(1,845 |
) |
|
(2,359 |
) |
||||
Loss on debt extinguishment |
|
— |
|
|
— |
|
|
— |
|
|
(22,990 |
) |
||||
Deferred revenue adjustments |
|
— |
|
|
(3,229 |
) |
|
— |
|
|
(7,889 |
) |
||||
Loss on sale of assets |
|
— |
|
|
— |
|
|
— |
|
|
(94 |
) |
||||
Gain from patent litigation |
|
— |
|
|
62,141 |
|
|
— |
|
|
62,141 |
|
||||
Costs related to patent litigation |
|
— |
|
|
(2,634 |
) |
|
— |
|
|
(2,634 |
) |
||||
Consolidated income (loss) before taxes |
|
$ |
(294,218 |
) |
|
$ |
118,162 |
|
|
$ |
(215,967 |
) |
|
$ |
163,283 |
|
| (1) | Consolidated Adjusted EBITDA is a non-GAAP measure. See Reconciliation of Non-GAAP Measures for additional information. |
BELDEN INC. |
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
|
|
September 29,
|
|
December 31,
|
||||
|
|
(Unaudited) |
|
|
||||
|
|
(In thousands) |
||||||
ASSETS |
||||||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
296,742 |
|
|
$ |
420,610 |
|
Receivables, net |
|
460,044 |
|
|
465,939 |
|
||
Inventories, net |
|
290,995 |
|
|
316,418 |
|
||
Other current assets |
|
74,876 |
|
|
55,757 |
|
||
Total current assets |
|
1,122,657 |
|
|
1,258,724 |
|
||
Property, plant and equipment, less accumulated depreciation |
|
384,183 |
|
|
365,970 |
|
||
Operating lease right-of-use assets |
|
78,788 |
|
|
— |
|
||
Goodwill |
|
1,265,006 |
|
|
1,557,653 |
|
||
Intangible assets, less accumulated amortization |
|
471,386 |
|
|
511,093 |
|
||
Deferred income taxes |
|
88,118 |
|
|
56,018 |
|
||
Other long-lived assets |
|
31,857 |
|
|
29,863 |
|
||
|
|
$ |
3,441,995 |
|
|
$ |
3,779,321 |
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
275,889 |
|
|
$ |
352,646 |
|
Accrued liabilities |
|
301,599 |
|
|
364,276 |
|
||
Total current liabilities |
|
577,488 |
|
|
716,922 |
|
||
Long-term debt |
|
1,403,670 |
|
|
1,463,200 |
|
||
Postretirement benefits |
|
127,090 |
|
|
132,791 |
|
||
Deferred income taxes |
|
75,192 |
|
|
39,943 |
|
||
Long-term operating lease liabilities |
|
73,436 |
|
|
— |
|
||
Other long-term liabilities |
|
40,309 |
|
|
38,877 |
|
||
Stockholders’ equity: |
|
|
|
|
||||
Preferred stock |
|
— |
|
|
1 |
|
||
Common stock |
|
503 |
|
|
503 |
|
||
Additional paid-in capital |
|
807,087 |
|
|
1,139,395 |
|
||
Retained earnings |
|
667,703 |
|
|
922,000 |
|
||
Accumulated other comprehensive loss |
|
(29,111 |
) |
|
(74,907 |
) |
||
Treasury stock |
|
(307,482 |
) |
|
(599,845 |
) |
||
Total Belden stockholders’ equity |
|
1,138,700 |
|
|
1,387,147 |
|
||
Noncontrolling interests |
|
6,110 |
|
|
441 |
|
||
Total stockholders’ equity |
|
1,144,810 |
|
|
1,387,588 |
|
||
|
|
$ |
3,441,995 |
|
|
$ |
3,779,321 |
|
BELDEN INC. |
||||||||
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS |
||||||||
(Unaudited) |
||||||||
|
|
Nine Months Ended |
||||||
|
|
September 29,
|
|
September 30,
|
||||
|
|
(In thousands) |
||||||
Cash flows from operating activities: |
|
|
|
|
||||
Net income (loss) |
|
$ |
(229,547 |
) |
|
117,220 |
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
||||
Goodwill and other asset impairment |
|
342,146 |
|
|
— |
|
||
Depreciation and amortization |
|
108,328 |
|
|
111,896 |
|
||
Share-based compensation |
|
12,115 |
|
|
14,657 |
|
||
Loss on debt extinguishment |
|
— |
|
|
22,990 |
|
||
Changes in operating assets and liabilities, net of the effects of currency exchange rate changes and acquired businesses: |
|
|
|
|
||||
Receivables |
|
6,002 |
|
|
(25,338 |
) |
||
Inventories |
|
32,261 |
|
|
(16,642 |
) |
||
Accounts payable |
|
(78,346 |
) |
|
(81,296 |
) |
||
Accrued liabilities |
|
(70,368 |
) |
|
(29,474 |
) |
||
Income taxes |
|
(19,650 |
) |
|
4,463 |
|
||
Other assets |
|
(9,088 |
) |
|
(13,267 |
) |
||
Other liabilities |
|
(4,336 |
) |
|
(4,350 |
) |
||
Net cash provided by operating activities |
|
89,517 |
|
|
100,859 |
|
||
Cash flows from investing activities: |
|
|
|
|
||||
Capital expenditures |
|
(74,068 |
) |
|
(63,451 |
) |
||
Cash used to acquire businesses, net of cash acquired |
|
(50,951 |
) |
|
(84,580 |
) |
||
Proceeds from disposal of tangible assets |
|
19 |
|
|
1,556 |
|
||
Proceeds from disposal of business |
|
— |
|
|
40,171 |
|
||
Net cash used for investing activities |
|
(125,000 |
) |
|
(106,304 |
) |
||
Cash flows from financing activities: |
|
|
|
|
||||
Payments under share repurchase program |
|
(50,000 |
) |
|
(125,000 |
) |
||
Cash dividends paid |
|
(32,153 |
) |
|
(32,421 |
) |
||
Withholding tax payments for share-based payment awards |
|
(2,063 |
) |
|
(2,004 |
) |
||
Other |
|
(232 |
) |
|
— |
|
||
Payments under borrowing arrangements |
|
— |
|
|
(484,757 |
) |
||
Debt issuance costs paid |
|
— |
|
|
(7,609 |
) |
||
Redemption of stockholders' rights agreement |
|
— |
|
|
(411 |
) |
||
Borrowings under credit arrangements |
|
— |
|
|
431,270 |
|
||
Net cash used for financing activities |
|
(84,448 |
) |
|
(220,932 |
) |
||
Effect of foreign currency exchange rate changes on cash and cash equivalents |
|
(3,937 |
) |
|
(5,704 |
) |
||
Decrease in cash and cash equivalents |
|
(123,868 |
) |
|
(232,081 |
) |
||
Cash and cash equivalents, beginning of period |
|
420,610 |
|
|
561,108 |
|
||
Cash and cash equivalents, end of period |
|
$ |
296,742 |
|
|
$ |
329,027 |
|
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 |
||||||||||||
|
|
September 29,
|
|
September 30,
|
|
September 29,
|
|
September 30,
|
||||||||
|
|
(In thousands, except percentages and per share amounts) |
||||||||||||||
GAAP revenues |
|
$ |
620,318 |
|
|
$ |
655,774 |
|
|
$ |
1,845,023 |
|
|
$ |
1,929,978 |
|
Deferred revenue adjustments |
|
— |
|
|
3,229 |
|
|
— |
|
|
7,889 |
|
||||
Adjusted revenues |
|
$ |
620,318 |
|
|
$ |
659,003 |
|
|
$ |
1,845,023 |
|
|
$ |
1,937,867 |
|
|
|
|
|
|
|
|
|
|
||||||||
Less: Grass Valley adjusted revenue |
|
87,221 |
|
|
104,966 |
|
|
263,434 |
|
|
324,217 |
|
||||
Adjusted revenues excluding Grass Valley |
|
$ |
533,097 |
|
|
$ |
554,037 |
|
|
$ |
1,581,589 |
|
|
$ |
1,613,650 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP gross profit |
|
$ |
235,402 |
|
|
$ |
260,857 |
|
|
$ |
701,153 |
|
|
$ |
749,047 |
|
Amortization of software development intangible assets |
|
1,197 |
|
|
620 |
|
|
3,206 |
|
|
1,344 |
|
||||
Severance, restructuring, and acquisition integration costs |
|
792 |
|
|
4,820 |
|
|
1,777 |
|
|
21,482 |
|
||||
Deferred revenue adjustments |
|
— |
|
|
3,229 |
|
|
— |
|
|
7,889 |
|
||||
Purchase accounting effects related to acquisitions |
|
(186 |
) |
|
558 |
|
|
532 |
|
|
1,833 |
|
||||
Adjusted gross profit |
|
$ |
237,205 |
|
|
$ |
270,084 |
|
|
$ |
706,668 |
|
|
$ |
781,595 |
|
|
|
|
|
|
|
|
|
|
||||||||
Less: Grass Valley adjusted gross profit |
|
37,709 |
|
|
51,409 |
|
|
114,105 |
|
|
152,624 |
|
||||
Adjusted gross profit excluding Grass Valley |
|
$ |
199,496 |
|
|
$ |
218,675 |
|
|
$ |
592,563 |
|
|
$ |
628,971 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP gross profit margin |
|
37.9 |
% |
|
39.8 |
% |
|
38.0 |
% |
|
38.8 |
% |
||||
Adjusted gross profit margin |
|
38.2 |
% |
|
41.0 |
% |
|
38.3 |
% |
|
40.3 |
% |
||||
Adjusted gross profit margin excluding Grass Valley |
|
37.4 |
% |
|
39.5 |
% |
|
37.5 |
% |
|
39.0 |
% |
||||
|
|
|
|
|
|
|
|
|
||||||||
GAAP selling, general and administrative expenses |
|
$ |
(120,169 |
) |
|
$ |
(132,716 |
) |
|
$ |
(365,439 |
) |
|
$ |
(396,430 |
) |
Severance, restructuring, and acquisition integration costs |
|
3,253 |
|
|
6,341 |
|
|
8,364 |
|
|
30,287 |
|
||||
Costs related to patent litigation |
|
— |
|
|
2,634 |
|
|
— |
|
|
2,634 |
|
||||
Purchase accounting effects related to acquisitions |
|
— |
|
|
263 |
|
|
1,313 |
|
|
526 |
|
||||
Loss on sale of assets |
|
— |
|
|
— |
|
|
— |
|
|
94 |
|
||||
Adjusted selling, general and administrative expenses |
|
$ |
(116,916 |
) |
|
$ |
(123,478 |
) |
|
$ |
(355,762 |
) |
|
$ |
(362,889 |
) |
|
|
|
|
|
|
|
|
|
||||||||
GAAP research and development expenses |
|
$ |
(31,351 |
) |
|
$ |
(33,471 |
) |
|
$ |
(100,539 |
) |
|
$ |
(107,781 |
) |
Severance, restructuring, and acquisition integration costs |
|
— |
|
|
527 |
|
|
763 |
|
|
5,241 |
|
||||
Adjusted research and development expenses |
|
$ |
(31,351 |
) |
|
$ |
(32,944 |
) |
|
$ |
(99,776 |
) |
|
$ |
(102,540 |
) |
|
|
|
|
|
|
|
|
|
||||||||
GAAP net income (loss) attributable to Belden |
|
$ |
(297,009 |
) |
|
$ |
85,881 |
|
|
$ |
(229,607 |
) |
|
$ |
117,368 |
|
Interest expense, net |
|
14,200 |
|
|
14,472 |
|
|
42,561 |
|
|
46,538 |
|
||||
Income tax expense |
|
2,797 |
|
|
32,304 |
|
|
13,580 |
|
|
46,063 |
|
||||
Loss on debt extinguishment |
|
— |
|
|
— |
|
|
— |
|
|
22,990 |
|
||||
Non-controlling interests |
|
(6 |
) |
|
(23 |
) |
|
60 |
|
|
(148 |
) |
||||
Total non-operating adjustments |
|
16,991 |
|
|
46,753 |
|
|
56,201 |
|
|
115,443 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Goodwill and other asset impairment |
|
342,146 |
|
|
— |
|
|
342,146 |
|
|
— |
|
||||
Amortization of intangible assets |
|
22,243 |
|
|
25,533 |
|
|
67,952 |
|
|
74,990 |
|
||||
Severance, restructuring, and acquisition integration costs |
|
4,045 |
|
|
11,688 |
|
|
10,904 |
|
|
57,010 |
|
||||
Amortization of software development intangible assets |
|
1,197 |
|
|
620 |
|
|
3,206 |
|
|
1,344 |
|
||||
Purchase accounting effects related to acquisitions |
|
(186 |
) |
|
821 |
|
|
1,845 |
|
|
2,359 |
|
||||
Deferred revenue adjustments |
|
— |
|
|
3,229 |
|
|
— |
|
|
7,889 |
|
||||
Costs related to patent litigation |
|
— |
|
|
2,634 |
|
|
— |
|
|
2,634 |
|
||||
Loss on sale of assets |
|
— |
|
|
— |
|
|
— |
|
|
94 |
|
||||
Gain from patent litigation |
|
— |
|
|
(62,141 |
) |
|
— |
|
|
(62,141 |
) |
||||
Total operating income adjustments |
|
369,445 |
|
|
(17,616 |
) |
|
426,053 |
|
|
84,179 |
|
||||
Depreciation expense |
|
12,147 |
|
|
11,671 |
|
|
37,170 |
|
|
35,562 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA |
|
$ |
101,574 |
|
|
$ |
126,689 |
|
|
$ |
289,817 |
|
|
$ |
352,552 |
|
|
|
|
|
|
|
|
|
|
||||||||
Less: Grass Valley adjusted EBITDA |
|
12,228 |
|
|
24,260 |
|
|
33,894 |
|
|
63,676 |
|
||||
Adjusted EBITDA excluding Grass Valley |
|
$ |
89,346 |
|
|
$ |
102,429 |
|
|
$ |
255,923 |
|
|
$ |
288,876 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP net income (loss) margin |
|
(47.9 |
)% |
|
13.1 |
% |
|
(12.4 |
)% |
|
6.1 |
% |
||||
Adjusted EBITDA margin |
|
16.4 |
% |
|
19.2 |
% |
|
15.7 |
% |
|
18.2 |
% |
||||
Adjusted EBITDA margin excluding Grass Valley |
|
16.8 |
% |
|
18.5 |
% |
|
16.2 |
% |
|
17.9 |
% |
||||
|
|
|
|
|
|
|
|
|
||||||||
GAAP net income (loss) attributable to Belden |
|
$ |
(297,009 |
) |
|
$ |
85,881 |
|
|
$ |
(229,607 |
) |
|
$ |
117,368 |
|
Operating income adjustments from above |
|
369,445 |
|
|
(17,616 |
) |
|
426,053 |
|
|
84,179 |
|
||||
Loss on debt extinguishment |
|
— |
|
|
— |
|
|
— |
|
|
22,990 |
|
||||
Tax effect of adjustments above |
|
(11,385 |
) |
|
8,776 |
|
|
(22,857 |
) |
|
(17,859 |
) |
||||
Impact of Tax Cuts and Jobs Act enactment |
|
— |
|
|
4,835 |
|
|
— |
|
|
5,308 |
|
||||
Amortization expense attributable to noncontrolling interest, net of tax |
|
— |
|
|
(17 |
) |
|
— |
|
|
(50 |
) |
||||
Adjusted net income attributable to Belden |
|
$ |
61,051 |
|
|
$ |
81,859 |
|
|
$ |
173,589 |
|
|
$ |
211,936 |
|
Less: Grass Valley adjusted net income |
|
7,227 |
|
|
20,224 |
|
|
20,196 |
|
|
45,799 |
|
||||
Adjusted net income attributable to Belden excluding Grass Valley |
|
$ |
53,824 |
|
|
$ |
61,635 |
|
|
$ |
153,393 |
|
|
$ |
166,137 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP net income (loss) attributable to Belden |
|
$ |
(297,009 |
) |
|
$ |
85,881 |
|
|
$ |
(229,607 |
) |
|
$ |
117,368 |
|
Less: Preferred stock dividends |
|
971 |
|
|
— |
|
|
18,437 |
|
|
26,198 |
|
||||
GAAP net income (loss) attributable to Belden common stockholders |
|
$ |
(297,980 |
) |
|
$ |
85,881 |
|
|
$ |
(248,044 |
) |
|
$ |
91,170 |
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net income attributable to Belden excluding Grass Valley |
|
$ |
53,824 |
|
|
$ |
61,635 |
|
|
$ |
153,393 |
|
|
$ |
166,137 |
|
Less: Preferred stock dividends |
|
— |
|
|
— |
|
|
18,437 |
|
|
26,198 |
|
||||
Adjusted net income attributable to Belden common stockholders excluding Grass Valley |
|
$ |
53,824 |
|
|
$ |
61,635 |
|
|
$ |
134,956 |
|
|
$ |
139,939 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP income (loss) per diluted share attributable to Belden common stockholders |
|
$ |
(6.70 |
) |
|
$ |
1.80 |
|
|
$ |
(6.04 |
) |
|
$ |
2.21 |
|
Adjusted income per diluted share attributable to Belden common stockholders excluding Grass Valley |
|
$ |
1.18 |
|
|
$ |
1.29 |
|
|
$ |
3.27 |
|
|
$ |
3.39 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP diluted weighted average shares |
|
44,444 |
|
|
47,678 |
|
|
41,090 |
|
|
41,268 |
|
||||
Adjustment for assumed conversion of preferred stock into common stock |
|
1,130 |
|
|
— |
|
|
— |
|
|
— |
|
||||
Adjustment for anti-dilutive shares that are dilutive under adjusted measures |
|
166 |
|
|
— |
|
|
209 |
|
|
— |
|
||||
Adjusted diluted weighted average shares |
|
45,740 |
|
|
47,678 |
|
|
41,299 |
|
|
41,268 |
|
||||
BELDEN INC. |
|||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES |
|||||||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||||||
|
|
Three Months Ended |
|
Year Ended |
|
Three Months Ended |
|||||||||||||||||||||
|
|
April 1,
|
July 1,
|
September 30,
|
December 31,
|
|
December 31,
|
|
March 31,
|
June 30,
|
September 29,
|
||||||||||||||||
|
|
(In thousands, except percentages) |
|||||||||||||||||||||||||
GAAP revenues |
|
$ |
605,565 |
|
$ |
668,639 |
|
$ |
655,774 |
|
$ |
655,390 |
|
|
$ |
2,585,368 |
|
|
$ |
587,175 |
|
$ |
637,530 |
|
$ |
620,318 |
|
Deferred revenue adjustments |
|
1,858 |
|
2,802 |
|
3,229 |
|
(1,277 |
) |
|
6,612 |
|
|
— |
|
— |
|
— |
|
||||||||
Less: Grass Valley adjusted revenues |
|
108,708 |
|
110,543 |
|
104,966 |
|
102,061 |
|
|
426,278 |
|
|
87,035 |
|
89,178 |
|
87,221 |
|
||||||||
Adjusted revenues excluding Grass Valley |
|
$ |
498,715 |
|
$ |
560,898 |
|
$ |
554,037 |
|
$ |
552,052 |
|
|
$ |
2,165,702 |
|
|
$ |
500,140 |
|
$ |
548,352 |
|
$ |
533,097 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
GAAP gross profit |
|
$ |
230,594 |
|
$ |
257,596 |
|
$ |
260,857 |
|
$ |
259,365 |
|
|
$ |
1,008,412 |
|
|
$ |
224,728 |
|
$ |
241,023 |
|
$ |
235,402 |
|
Amortization of software development intangible assets |
|
236 |
|
488 |
|
620 |
|
844 |
|
|
2,188 |
|
|
937 |
|
1,072 |
|
1,197 |
|
||||||||
Severance, restructuring, and acquisition integration costs |
|
9,431 |
|
7,231 |
|
4,820 |
|
6,648 |
|
|
28,130 |
|
|
562 |
|
423 |
|
792 |
|
||||||||
Deferred revenue adjustments |
|
1,858 |
|
2,802 |
|
3,229 |
|
(1,277 |
) |
|
6,612 |
|
|
— |
|
— |
|
— |
|
||||||||
Purchase accounting effects related to acquisitions |
|
502 |
|
773 |
|
558 |
|
— |
|
|
1,833 |
|
|
— |
|
718 |
|
(186 |
) |
||||||||
Less: Grass Valley adjusted gross profit |
|
48,496 |
|
52,718 |
|
51,409 |
|
46,565 |
|
|
199,188 |
|
|
39,313 |
|
37,083 |
|
37,709 |
|
||||||||
Adjusted gross profit excluding Grass Valley |
|
$ |
194,125 |
|
$ |
216,172 |
|
$ |
218,675 |
|
$ |
219,015 |
|
|
$ |
847,987 |
|
|
$ |
186,914 |
|
$ |
206,153 |
|
$ |
199,496 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
GAAP gross profit margin |
|
38.1% |
38.5% |
39.8% |
39.6% |
|
39.0% |
|
38.3% |
37.8% |
37.9% |
||||||||||||||||
Adjusted gross profit margin excluding Grass Valley |
|
38.9% |
38.5% |
39.5% |
39.7% |
|
39.2% |
|
37.4% |
37.6% |
37.4% |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
GAAP net income (loss) attributable to Belden |
|
$ |
2,618 |
|
$ |
28,869 |
|
$ |
85,881 |
|
$ |
43,526 |
|
|
$ |
160,894 |
|
|
$ |
25,202 |
|
$ |
42,200 |
|
$ |
(297,009 |
) |
Interest expense, net |
|
16,978 |
|
15,088 |
|
14,472 |
|
15,021 |
|
|
61,559 |
|
|
14,193 |
|
14,168 |
|
14,200 |
|
||||||||
Income tax expense |
|
4,420 |
|
9,339 |
|
32,304 |
|
13,556 |
|
|
59,619 |
|
|
5,621 |
|
5,162 |
|
2,797 |
|
||||||||
Loss on debt extinguishment |
|
19,960 |
|
3,030 |
|
— |
|
— |
|
|
22,990 |
|
|
— |
|
— |
|
— |
|
||||||||
Non-controlling interest |
|
(48 |
) |
(77 |
) |
(23 |
) |
(35 |
) |
|
(183 |
) |
|
(24 |
) |
90 |
|
(6 |
) |
||||||||
Total non-operating adjustments |
|
41,310 |
|
27,380 |
|
46,753 |
|
28,542 |
|
|
143,985 |
|
|
19,790 |
|
19,420 |
|
16,991 |
|
||||||||
Goodwill and other asset impairment |
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
— |
|
342,146 |
|
||||||||
Amortization of intangible assets |
|
24,418 |
|
25,039 |
|
25,533 |
|
23,839 |
|
|
98,829 |
|
|
23,341 |
|
22,368 |
|
22,243 |
|
||||||||
Severance, restructuring, and acquisition integration costs |
|
20,394 |
|
24,928 |
|
11,688 |
|
11,603 |
|
|
68,613 |
|
|
3,775 |
|
3,082 |
|
4,045 |
|
||||||||
Deferred revenue adjustments |
|
1,858 |
|
2,802 |
|
3,229 |
|
(1,277 |
) |
|
6,612 |
|
|
— |
|
— |
|
— |
|
||||||||
Purchase accounting effects related to acquisitions |
|
502 |
|
1,036 |
|
821 |
|
1,138 |
|
|
3,497 |
|
|
1,313 |
|
718 |
|
(186 |
) |
||||||||
Amortization of software development intangible assets |
|
236 |
|
488 |
|
620 |
|
844 |
|
|
2,188 |
|
|
937 |
|
1,072 |
|
1,197 |
|
||||||||
Loss on sale of assets |
|
94 |
|
— |
|
— |
|
— |
|
|
94 |
|
|
— |
|
— |
|
— |
|
||||||||
Non-operating pension settlement loss |
|
— |
|
— |
|
— |
|
1,342 |
|
|
1,342 |
|
|
— |
|
— |
|
— |
|
||||||||
Costs related to patent litigation |
|
— |
|
— |
|
2,634 |
|
— |
|
|
2,634 |
|
|
— |
|
— |
|
— |
|
||||||||
Gain from patent litigation |
|
— |
|
— |
|
(62,141 |
) |
— |
|
|
(62,141 |
) |
|
— |
|
— |
|
— |
|
||||||||
Total operating income adjustments |
|
47,502 |
|
54,293 |
|
(17,616 |
) |
37,489 |
|
|
121,668 |
|
|
29,366 |
|
27,240 |
|
369,445 |
|
||||||||
Depreciation expense |
|
11,865 |
|
12,026 |
|
11,671 |
|
12,053 |
|
|
47,615 |
|
|
12,723 |
|
12,301 |
|
12,147 |
|
||||||||
Less: Grass Valley adjusted EBITDA |
|
18,803 |
|
20,613 |
|
24,260 |
|
18,804 |
|
|
82,480 |
|
|
11,415 |
|
10,251 |
|
12,228 |
|
||||||||
Adjusted EBITDA excluding Grass Valley |
|
$ |
84,492 |
|
$ |
101,955 |
|
$ |
102,429 |
|
$ |
102,806 |
|
|
$ |
391,682 |
|
|
$ |
75,666 |
|
$ |
90,910 |
|
$ |
89,346 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
GAAP net income margin |
|
0.4% |
4.3% |
13.1% |
6.6% |
|
6.2% |
|
4.3% |
6.6% |
-47.9% |
||||||||||||||||
Adjusted EBITDA margin excluding Grass Valley |
|
16.9% |
18.2% |
18.5% |
18.6% |
|
18.1% |
|
15.1% |
16.6% |
16.8% |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
GAAP net income (loss) attributable to Belden |
|
$ |
2,618 |
|
$ |
28,869 |
|
$ |
85,881 |
|
$ |
43,526 |
|
|
$ |
160,894 |
|
|
$ |
25,202 |
|
$ |
42,200 |
|
$ |
(297,009 |
) |
Operating income adjustments from above |
|
47,502 |
|
54,293 |
|
(17,616 |
) |
37,489 |
|
|
121,668 |
|
|
29,366 |
|
27,240 |
|
369,445 |
|
||||||||
Loss on debt extinguishment |
|
19,960 |
|
3,030 |
|
— |
|
— |
|
|
22,990 |
|
|
— |
|
— |
|
— |
|
||||||||
Tax effect of adjustments above |
|
(12,112 |
) |
(13,577 |
) |
8,776 |
|
(7,979 |
) |
|
(25,838 |
) |
|
(6,419 |
) |
(5,053 |
) |
(11,385 |
) |
||||||||
Impact of Tax Cuts and Jobs Act enactment |
|
(473 |
) |
— |
|
4,835 |
|
4,689 |
|
|
9,997 |
|
|
— |
|
— |
|
— |
|
||||||||
Amortization expense attributable to noncontrolling interests, net of tax |
|
(17 |
) |
(16 |
) |
(17 |
) |
(16 |
) |
|
(66 |
) |
|
— |
|
— |
|
— |
|
||||||||
Less: Grass Valley adjusted net income |
|
12,578 |
|
12,997 |
|
20,224 |
|
19,105 |
|
|
64,904 |
|
|
6,761 |
|
6,208 |
|
7,227 |
|
||||||||
Adjusted net income attributable to Belden excluding Grass Valley |
|
$ |
44,900 |
|
$ |
59,602 |
|
$ |
61,635 |
|
$ |
58,604 |
|
|
$ |
224,741 |
|
|
$ |
41,388 |
|
$ |
58,179 |
|
$ |
53,824 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
GAAP net income (loss) attributable to Belden |
|
$ |
2,618 |
|
$ |
28,869 |
|
$ |
85,881 |
|
$ |
43,526 |
|
|
$ |
160,894 |
|
|
$ |
25,202 |
|
$ |
42,200 |
|
$ |
(297,009 |
) |
Less: Preferred stock dividends |
|
8,733 |
|
8,733 |
|
— |
|
8,733 |
|
|
34,931 |
|
|
8,733 |
|
8,733 |
|
971 |
|
||||||||
GAAP net income (loss) attributable to Belden common stockholders |
|
$ |
(6,115 |
) |
$ |
20,136 |
|
$ |
85,881 |
|
$ |
34,793 |
|
|
$ |
125,963 |
|
|
$ |
16,469 |
|
$ |
33,467 |
|
$ |
(297,980 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Adjusted net income attributable to Belden excluding Grass Valley |
|
$ |
44,900 |
|
$ |
59,602 |
|
$ |
61,635 |
|
$ |
58,604 |
|
|
$ |
224,741 |
|
|
$ |
41,388 |
|
$ |
58,179 |
|
$ |
53,824 |
|
Less: Preferred stock dividends |
|
8,733 |
|
8,733 |
|
— |
|
— |
|
|
34,931 |
|
|
8,733 |
|
— |
|
— |
|
||||||||
Adjusted net income attributable to Belden common stockholders excluding Grass Valley |
|
$ |
36,167 |
|
$ |
50,869 |
|
$ |
61,635 |
|
$ |
58,604 |
|
|
$ |
189,810 |
|
|
$ |
32,655 |
|
$ |
58,179 |
|
$ |
53,824 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
GAAP income (loss) per diluted share attributable to Belden common stockholders |
|
$ |
(0.15 |
) |
$ |
0.49 |
|
$ |
1.80 |
|
$ |
0.87 |
|
|
$ |
3.08 |
|
|
$ |
0.42 |
|
$ |
0.84 |
|
$ |
(6.70 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Adjusted income excluding Grass Valley per diluted share attributable to Belden common stockholders |
|
$ |
0.86 |
|
$ |
1.24 |
|
$ |
1.29 |
|
$ |
1.25 |
|
|
$ |
4.63 |
|
|
$ |
0.82 |
|
$ |
1.25 |
|
$ |
1.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
GAAP diluted weighted average shares |
|
41,633 |
|
40,974 |
|
47,678 |
|
40,031 |
|
|
40,956 |
|
|
39,660 |
|
39,611 |
|
44,444 |
|
||||||||
Adjustment for assumed conversion of preferred stock into common stock |
|
— |
|
— |
|
— |
|
6,857 |
|
|
— |
|
|
— |
|
6,857 |
|
1,130 |
|
||||||||
Adjustment for anti-dilutive shares that are dilutive under adjusted measures |
|
377 |
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
— |
|
166 |
|
||||||||
Adjusted diluted weighted average shares |
|
42,010 |
|
40,974 |
|
47,678 |
|
46,888 |
|
|
40,956 |
|
|
39,660 |
|
46,468 |
|
45,740 |
|
||||||||
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 |
||||||||||||
|
|
September 29,
|
|
September 30,
|
|
September 29,
|
|
September 30,
|
||||||||
|
|
(In thousands) |
||||||||||||||
GAAP net cash provided by operating activities |
|
$ |
67,872 |
|
|
$ |
130,221 |
|
|
89,517 |
|
|
$ |
100,859 |
|
|
Capital expenditures, net of proceeds from the disposal of tangible assets |
|
(23,299 |
) |
|
(23,919 |
) |
|
(74,049 |
) |
|
(61,895 |
) |
||||
Non-GAAP free cash flow |
|
$ |
44,573 |
|
|
$ |
106,302 |
|
|
$ |
15,468 |
|
|
$ |
38,964 |
|
BELDEN INC. |
||||
RECONCILIATION OF NON-GAAP MEASURES |
||||
2019 EARNINGS GUIDANCE |
||||
|
|
Year Ended
|
|
Three Months Ended
|
|
|
|
|
|
Adjusted income per diluted share attributable to Belden common stockholders |
|
$4.32 - $4.47 |
|
$1.00 - $1.15 |
Amortization of intangible assets |
|
(1.69) |
|
(0.48) |
Severance, restructuring, and acquisition integration costs |
|
(0.58) |
|
(0.52) |
Purchase accounting effects of acquisitions |
|
(0.01) |
|
— |
GAAP income per diluted share attributable to Belden common stockholders |
|
$2.04 - $2.19 |
|
$0.00 - $0.15 |
Our guidance for income 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 release may contain forward-looking statements including our expectations for the fourth quarter and full-year 2019, the Grass Valley divestment plan and the results of our restructuring program. Forward-looking statements include 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 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 increased influence of chief information officers and similar high-level executives; the presence of substitute products in the marketplace; the inability of the Company to develop and introduce new products and competitive responses to our products; the increased prevalence of cloud computing; the inability to successfully complete and integrate acquisitions in furtherance of the Company’s strategic plan; the impact of changes in global tariffs and trade agreements; difficulty in forecasting revenue due to the unpredictable timing of orders related to customer projects; foreign and domestic political, economic and other uncertainties, including changes in currency exchange rates; changes in tax laws and variability in the Company’s quarterly and annual effective tax rates; the impact of a challenging global economy or a downturn in served markets; the competitiveness of the global markets in which we operate; volatility in credit and foreign exchange markets; 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; disruptions in the Company’s information systems including due to cyber-attacks; 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 senior management and 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 quarter ended December 31, 2018, filed with the SEC on February 20, 2019. 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 data, audio and video 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.