Press Release

Belden Reports Solid Results for Second Quarter 2017

Belden

ST. LOUIS--(BUSINESS WIRE)-- Belden Inc. (NYSE: BDC), a global leader in high quality, end-to-end signal transmission solutions for mission-critical applications, today reported fiscal second quarter 2017 results for the period ended July 2, 2017.


Second Quarter 2017

On a GAAP basis, revenues for the quarter totaled $610.6 million, increasing $9.0 million, or 1.5%, compared to $601.6 million in the second quarter 2016. Net income was $36.0 million, a decrease of $6.1 million compared to the prior-year period, primarily due to a $6.0 million increase in income tax expense. This was the result of discrete incremental benefits from tax planning initiatives in the prior year. Net income as a percentage of revenues was 5.9%, decreasing 110 basis points from 7.0% in the prior-year period. EPS totaled $0.64 compared to $0.99 in the second quarter 2016. The current quarter EPS includes a $0.20 per share dilutive impact from the mandatory convertible preferred stock issued in the third quarter 2016.

 

Revenues for the quarter totaled $610.6 million, increasing $7.2 million, or 1.2%, compared to adjusted revenues of $603.4 million in the second quarter 2016. Adjusted EBITDA margin in the second quarter was 18.3%, increasing 40 basis points from 17.9% in the year-ago period. Adjusted net income was $64.3 million, a decrease of $1.2 million compared to the prior-year period, primarily due to the increase in income tax expense discussed above. Adjusted EPS was $1.29 compared to $1.54 in the second quarter 2016. The current quarter adjusted EPS includes a $0.20 per share dilutive impact from the mandatory convertible preferred stock. 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, “Overall, the business performed in line with our expectations in the second quarter, and our proven Lean enterprise system continues to drive margin expansion in 2017. We were very pleased to complete the Thinklogical acquisition during the quarter, and we remain well-positioned with a number of other attractive inorganic opportunities.”

 

Outlook

“We are increasing our full-year revenue guidance to reflect the Thinklogical acquisition. We are also updating our EPS guidance to reflect the accretive impact of this acquisition and our recent debt refinancing at very favorable terms. We expect double-digit EPS growth in the second half of the year,” said Mr. Stroup.

 

The Company expects third quarter 2017 revenues to be $615 - $635 million. For the full year ending December 31, 2017, the Company now expects revenues to be $2.415 - $2.445 billion, compared to prior guidance of $2.355 - $2.405 billion.

 

The Company expects third quarter 2017 GAAP EPS to be $0.10 - $0.20. For the full year ending December 31, 2017, the Company now expects GAAP EPS to be $2.82 - $3.02, compared to the previously guided range of $3.31 - $3.56.

 

The Company expects third quarter 2017 adjusted EPS to be $1.35 - $1.45. For the full year ending December 31, 2017, the Company now expects adjusted EPS to be $5.35 - $5.55, compared to the previously guided range of $4.95 - $5.20.

 

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. The dial-in number for participants in the U.S. is 888-339-3466; the dial-in number for participants outside the U.S. is 719-325-2360. A replay of this conference call will remain accessible in the investor relations section of the Company’s website for a limited time.

 

 

 

 

 

 

 

BELDEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

July 2, 2017

 

 

July 3, 2016

 

 

July 2, 2017

 

 

July 3, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except per share data)

Revenues

 

 

$

610,633

 

 

 

$

601,631

 

 

 

$

1,162,014

 

 

 

$

1,143,128

 

Cost of sales

 

 

(368,124

)

 

 

(353,418

)

 

 

(697,391

)

 

 

(669,880

)

Gross profit

 

 

242,509

 

 

 

248,213

 

 

 

464,623

 

 

 

473,248

 

Selling, general and administrative expenses

 

 

(117,771

)

 

 

(123,057

)

 

 

(230,357

)

 

 

(245,463

)

Research and development

 

 

(35,144

)

 

 

(36,652

)

 

 

(69,666

)

 

 

(72,785

)

Amortization of intangibles

 

 

(27,113

)

 

 

(26,263

)

 

 

(50,782

)

 

 

(51,795

)

Operating income

 

 

62,481

 

 

 

62,241

 

 

 

113,818

 

 

 

103,205

 

Interest expense, net

 

 

(23,533

)

 

 

(24,049

)

 

 

(47,039

)

 

 

(48,445

)

Loss on debt extinguishment

 

 

(847

)

 

 

 

 

 

(847

)

 

 

 

Income before taxes

 

 

38,101

 

 

 

38,192

 

 

 

65,932

 

 

 

54,760

 

Income tax benefit (expense)

 

 

(2,210

)

 

 

3,741

 

 

 

(4,460

)

 

 

3,531

 

Net income

 

 

35,891

 

 

 

41,933

 

 

 

61,472

 

 

 

58,291

 

Less: Net loss attributable to noncontrolling interest

 

 

(86

)

 

 

(99

)

 

 

(192

)

 

 

(198

)

Net income attributable to Belden

 

 

35,977

 

 

 

42,032

 

 

 

61,664

 

 

 

58,489

 

Less: Preferred stock dividends

 

 

8,733

 

 

 

 

 

 

17,466

 

 

 

 

Net income attributable to Belden common stockholders

 

 

$

27,244

 

 

 

$

42,032

 

 

 

$

44,198

 

 

 

$

58,489

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares and equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

42,283

 

 

 

42,085

 

 

 

42,249

 

 

 

42,046

 

Diluted

 

 

42,832

 

 

 

42,533

 

 

 

42,753

 

 

 

42,459

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income per share attributable to Belden common stockholders:

 

 

$

0.64

 

 

 

$

1.00

 

 

 

$

1.05

 

 

 

$

1.39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted income per share attributable to Belden common stockholders:

 

 

$

0.64

 

 

 

$

0.99

 

 

 

$

1.03

 

 

 

$

1.38

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock dividends declared per share

 

 

$

0.05

 

 

 

$

0.05

 

 

 

$

0.10

 

 

 

$

0.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BELDEN INC.

OPERATING SEGMENT INFORMATION

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Broadcast
Solutions

 

 

Enterprise
Solutions

 

 

Industrial
Solutions

 

 

Network
Solutions

 

 

Total
Segments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except percentages)

For the three months ended July 2, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Revenues

 

 

$

188,071

 

 

 

$

160,733

 

 

 

$

159,255

 

 

 

$

102,574

 

 

 

$

610,633

 

Segment EBITDA

 

 

29,610

 

 

 

26,801

 

 

 

31,036

 

 

 

22,780

 

 

 

110,227

 

Segment EBITDA margin

 

 

15.7

%

 

 

16.7

%

 

 

19.5

%

 

 

22.2

%

 

 

18.1

%

Depreciation expense

 

 

4,058

 

 

 

2,695

 

 

 

3,168

 

 

 

1,607

 

 

 

11,528

 

Amortization of intangibles

 

 

13,453

 

 

 

429

 

 

 

640

 

 

 

12,591

 

 

 

27,113

 

Severance, restructuring, and acquisition integration costs

 

 

970

 

 

 

8,141

 

 

 

346

 

 

 

103

 

 

 

9,560

 

Purchase accounting effects related to acquisitions

 

 

1,167

 

 

 

 

 

 

 

 

 

 

 

 

1,167

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended July 3, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Revenues

 

 

$

193,521

 

 

 

$

160,401

 

 

 

$

147,808

 

 

 

$

101,651

 

 

 

$

603,381

 

Segment EBITDA

 

 

29,505

 

 

 

29,575

 

 

 

27,064

 

 

 

22,191

 

 

 

108,335

 

Segment EBITDA margin

 

 

15.2

%

 

 

18.4

%

 

 

18.3

%

 

 

21.8

%

 

 

18.0

%

Depreciation expense

 

 

4,061

 

 

 

3,429

 

 

 

2,709

 

 

 

1,788

 

 

 

11,987

 

Amortization of intangibles

 

 

13,420

 

 

 

432

 

 

 

601

 

 

 

11,810

 

 

 

26,263

 

Severance, restructuring, and acquisition integration costs

 

 

1,319

 

 

 

1,207

 

 

 

2,371

 

 

 

972

 

 

 

5,869

 

Deferred gross profit adjustments

 

 

494

 

 

 

 

 

 

 

 

 

1,256

 

 

 

1,750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the six months ended July 2, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Revenues

 

 

$

356,667

 

 

 

$

306,415

 

 

 

$

305,436

 

 

 

$

193,496

 

 

 

$

1,162,014

 

Segment EBITDA

 

 

55,010

 

 

 

50,901

 

 

 

56,769

 

 

 

40,657

 

 

 

203,337

 

Segment EBITDA margin

 

 

15.4

%

 

 

16.6

%

 

 

18.6

%

 

 

21.0

%

 

 

17.5

%

Depreciation expense

 

 

8,007

 

 

 

5,294

 

 

 

6,374

 

 

 

3,236

 

 

 

22,911

 

Amortization of intangibles

 

 

23,468

 

 

 

853

 

 

 

1,282

 

 

 

25,179

 

 

 

50,782

 

Severance, restructuring, and acquisition integration costs

 

 

1,378

 

 

 

13,014

 

 

 

1,467

 

 

 

301

 

 

 

16,160

 

Purchase accounting effects related to acquisitions

 

 

1,167

 

 

 

 

 

 

 

 

 

 

 

 

1,167

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the six months ended July 3, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Revenues

 

 

$

364,793

 

 

 

$

296,293

 

 

 

$

288,899

 

 

 

$

197,196

 

 

 

$

1,147,181

 

Segment EBITDA

 

 

52,772

 

 

 

53,311

 

 

 

50,051

 

 

 

42,267

 

 

 

198,401

 

Segment EBITDA margin

 

 

14.5

%

 

 

18.0

%

 

 

17.3

%

 

 

21.4

%

 

 

17.3

%

Depreciation expense

 

 

8,023

 

 

 

6,818

 

 

 

5,427

 

 

 

3,382

 

 

 

23,650

 

Amortization of intangibles

 

 

26,351

 

 

 

861

 

 

 

1,192

 

 

 

23,391

 

 

 

51,795

 

Severance, restructuring, and acquisition integration costs

 

 

5,697

 

 

 

1,707

 

 

 

3,236

 

 

 

3,637

 

 

 

14,277

 

Purchase accounting effects related to acquisitions

 

 

195

 

 

 

 

 

 

 

 

 

 

 

 

195

 

Deferred gross profit adjustments

 

 

1,108

 

 

 

 

 

 

 

 

 

2,945

 

 

 

4,053

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BELDEN INC.

OPERATING SEGMENT RECONCILIATION TO CONSOLIDATED RESULTS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

July 2, 2017

 

 

July 3, 2016

 

 

July 2, 2017

 

 

July 3, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

Total Segment Revenues

 

 

$

610,633

 

 

 

$

603,381

 

 

 

$

1,162,014

 

 

 

$

1,147,181

 

Deferred revenue adjustments

 

 

 

 

 

(1,750

)

 

 

 

 

 

(4,053

)

Consolidated Revenues

 

 

$

610,633

 

 

 

$

601,631

 

 

 

$

1,162,014

 

 

 

$

1,143,128

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Segment EBITDA

 

 

$

110,227

 

 

 

$

108,335

 

 

 

$

203,337

 

 

 

$

198,401

 

Income from equity method investment

 

 

2,277

 

 

 

661

 

 

 

3,284

 

 

 

491

 

Eliminations

 

 

(655

)

 

 

(886

)

 

 

(1,783

)

 

 

(1,717

)

Consolidated Adjusted EBITDA (1)

 

 

111,849

 

 

 

108,110

 

 

 

204,838

 

 

 

197,175

 

Amortization of intangibles

 

 

(27,113

)

 

 

(26,263

)

 

 

(50,782

)

 

 

(51,795

)

Depreciation expense

 

 

(11,528

)

 

 

(11,987

)

 

 

(22,911

)

 

 

(23,650

)

Severance, restructuring, and acquisition integration costs

 

 

(9,560

)

 

 

(5,869

)

 

 

(16,160

)

 

 

(14,277

)

Purchase accounting effects related to acquisitions

 

 

(1,167

)

 

 

 

 

 

(1,167

)

 

 

(195

)

Deferred gross profit adjustments

 

 

 

 

 

(1,750

)

 

 

 

 

 

(4,053

)

Consolidated operating income

 

 

62,481

 

 

 

62,241

 

 

 

113,818

 

 

 

103,205

 

Interest expense, net

 

 

(23,533

)

 

 

(24,049

)

 

 

(47,039

)

 

 

(48,445

)

Loss on debt extinguishment

 

 

(847

)

 

 

 

 

 

(847

)

 

 

 

Consolidated income before taxes

 

 

$

38,101

 

 

 

$

38,192

 

 

 

$

65,932

 

 

 

$

54,760

 

 

 

 

(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 2, 2017

 

 

December 31, 2016

 

 

 

(Unaudited)

 

 

 

 

 

 

(In thousands)

ASSETS

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

 

$

670,360

 

 

 

$

848,116

 

Receivables, net

 

 

419,591

 

 

 

388,059

 

Inventories, net

 

 

252,534

 

 

 

190,408

 

Other current assets

 

 

43,623

 

 

 

29,176

 

Assets held for sale

 

 

30,743

 

 

 

23,193

 

Total current assets

 

 

1,416,851

 

 

 

1,478,952

 

Property, plant and equipment, less accumulated depreciation

 

 

319,371

 

 

 

309,291

 

Goodwill

 

 

1,453,993

 

 

 

1,385,995

 

Intangible assets, less accumulated amortization

 

 

600,417

 

 

 

560,082

 

Deferred income taxes

 

 

35,735

 

 

 

33,706

 

Other long-lived assets

 

 

36,303

 

 

 

38,777

 

 

 

 

$

3,862,670

 

 

 

$

3,806,803

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

 

$

280,796

 

 

 

$

258,203

 

Accrued liabilities

 

 

255,092

 

 

 

310,340

 

Liabilities held for sale

 

 

1,803

 

 

 

1,736

 

Total current liabilities

 

 

537,691

 

 

 

570,279

 

Long-term debt