Belden Reports Strong Results for Fourth Quarter and Full Year 2021 and Announces a Definitive Agreement to Divest Tripwire
St. Louis, Missouri – February 9, 2022 - Belden Inc. (NYSE: BDC), a leading global supplier of specialty networking solutions, today reported fiscal fourth quarter and full year 2021 results for the period ended December 31, 2021. The Company also announced a definitive agreement to divest its Tripwire cybersecurity business (“Tripwire”).
Fourth Quarter 2021
Revenues for the quarter totaled $638.9 million, increasing $140.4 million, or 28%, compared to $498.5 million in the year-ago period. Net loss was ($51.6) million, compared to net income of $15.8 million in the year-ago period. Net loss included a $131.2 million non-cash impairment charge related to Tripwire. Net loss as a percentage of revenue was (8.1%) compared to 3.2% in the year-ago period. EPS totaled ($1.15), compared to $0.35 in the fourth quarter 2020.
Adjusted revenues for the quarter totaled $637.6 million. Adjusted EBITDA was $101.3 million, increasing $27.3 million, or 37%, compared to $74.0 million in the year-ago period. Adjusted EBITDA margin was 15.9%, compared to 14.8% in the year-ago period. Adjusted EPS was $1.32, increasing 47% compared to $0.90 in the fourth 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 with strong growth in total revenues, EPS and cash flow. Our team continues to execute very well in a challenging operating environment, driving 21% organic growth and solid margin expansion. We are prioritizing organic growth while cultivating acquisitions that add innovative new technologies. Subsequent to quarter end, we completed the acquisition of Macmon Secure GmbH for $43 million. Macmon adds important new capabilities to our industry-leading industrial networking solutions.”
Full Year 2021
Revenues for the year totaled $2.408 billion, increasing $545.4 million, or 29%, compared to $1.863 billion in the full year 2020. Net income was $62.5 million, compared to $54.4 million in 2020. Net income as a percentage of revenue was 2.6% compared to 2.9% in 2020. EPS totaled $1.37, compared to $1.21 in 2020.
Adjusted revenues for the year also totaled $2.408 billion. Adjusted EBITDA was $375.5 million, increasing $126.3 million, or 51%, compared to $249.2 million in 2020. Adjusted EBITDA margin was 15.6%, compared to 13.4% in 2020. Adjusted EPS was $4.78, increasing 74% compared to $2.75 in 2020.
Mr. Vestjens remarked, “2021 was an exceptional year for Belden that was highlighted by meaningful recovery in our end markets, significant progress on our organic growth strategies, and successful management of inflationary pressures and supply chain challenges. Full year revenues increased 20% on an organic basis, resulting in robust margin expansion and EPS growth. During the year we generated solid cash flow growth and further strengthened our balance sheet, reducing net leverage from 4.0x to 2.1x.”
1
Tripwire Divestiture
The Company today also announced that it has signed a definitive agreement to divest Tripwire for $350 million in cash. The transaction is expected to close in the first quarter 2022. Under the terms of the agreement, Belden will act as an exclusive reseller of Tripwire’s industrial cybersecurity solutions.
Tripwire’s full year 2021 revenues were $107 million with an EPS contribution of $0.03 excluding asset impairments and amortization of intangibles. Belden had year-end 2021 net leverage of 2.1x, or 1.2x pro forma for this transaction, providing significant financial flexibility.
Roel Vestjens, President and CEO of Belden Inc., said, “This is an important transaction that will enable Belden and Tripwire to more effectively execute their strategic growth plans. We are pleased to monetize the business while maintaining a preferred commercial relationship with Tripwire that will allow us to continue providing integrated cybersecurity solutions to our customers in industrial end markets. I would like to thank the entire Tripwire team for their significant contributions to Belden and wish them every success going forward.”
Outlook
“We entered 2022 with significant momentum in our business. Our strategic growth initiatives are gaining traction, and I am encouraged by our recent order rates and execution. Our transformed portfolio is aligned with the favorable secular trends in industrial automation, broadband & 5G, and smart buildings. I am optimistic about our ability to drive solid and sustainable organic growth, and compelling returns for our shareholders,” said Mr. Vestjens.
For the full year 2021, adjusted revenues and EPS excluding Tripwire were $2.301 billion and $4.75, respectively. The outlook for 2022 represents results from continuing operations, which is expected to exclude Tripwire. The Company expects first quarter 2022 revenues to be $558 - $573 million, EPS to be $0.76 - $0.86 and adjusted EPS to be $1.03 - $1.13. For the full year ending December 31, 2022, the Company expects revenues to be $2.390 - $2.440 billion, EPS to be $4.10 - $4.45 and adjusted EPS to be $5.00 - $5.35.
Earnings Conference Call
Management will host a conference call today at 8:30 am ET to discuss results of the quarter and the Tripwire divestiture. The listen-only audio of the conference call will be broadcast live via the Internet at https://investor.belden.com. The dial-in number for participants is 888-220-8451, with confirmation code 3170682. 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.
2
BELDEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
Twelve Months Ended
December 31, 2021
December 31, 2020
December 31, 2021
December 31, 2020
(In thousands, except per share data)
Revenues
$
638,910
$
498,540
$
2,408,100
$
1,862,716
Cost of sales
(410,703)
(323,284)
(1,553,738)
(1,199,427)
Gross profit
228,207
175,256
854,362
663,289
Selling, general and administrative expenses
(121,652)
(91,059)
(426,335)
(366,188)
Research and development expenses
(29,787)
(25,663)
(124,660)
(107,296)
Amortization of intangibles
(9,601)
(16,089)
(38,346)
(64,395)
Goodwill and other asset impairment
(131,178)
—
(140,461)
—
Operating income (loss)
(64,011)
42,445
124,560
125,410
Interest expense, net
(16,055)
(15,700)
(62,695)
(58,888)
Non-operating pension benefit (cost)
1,355
(2,474)
4,476
(395)
Gain on sale of note receivable
27,036
—
27,036
—
Loss on debt extinguishment
—
—
(5,715)
—
Income (loss) from continuing operations before taxes
(51,675)
24,271
87,662
66,127
Income tax benefit (expense)
102
(8,501)
(25,205)
(11,724)
Income (loss) from continuing operations
(51,573)
15,770
62,457
54,403
Gain (loss) from discontinued operations, net of tax
—
3,882
—
(99,513)
Gain (loss) on disposal of discontinued operations, net of tax
1,860
(12,691)
1,860
(9,948)
Net income (loss)
(49,713)
6,961
64,317
(55,058)
Less: Net income attributable to noncontrolling interest
56
25
392
104
Net income (loss) attributable to Belden stockholders
$
(49,769)
$
6,936
$
63,925
$
(55,162)
Weighted average number of common shares and equivalents:
Basic
44,927
44,620
44,802
44,778
Diluted
45,729
44,848
45,361
44,937
Basic income (loss) per share attributable to Belden stockholders:
Continuing operations
$
(1.15)
$
0.35
$
1.39
$
1.21
Discontinued operations
—
0.09
—
(2.22)
Disposal of discontinued operations
0.04
(0.28)
0.04
(0.22)
Net income (loss)
$
(1.11)
$
0.16
$
1.43
$
(1.23)
Diluted income (loss) per share attributable to Belden stockholders:
Continuing operations
$
(1.15)
$
0.35
$
1.37
$
1.21
Discontinued operations
—
0.09
—
(2.22)
Disposal of discontinued operations
0.04
(0.28)
0.04
(0.22)
Net income (loss)
$
(1.11)
$
0.15
$
1.41
$
(1.23)
Common stock dividends declared per share
$
0.05
$
0.05
$
0.20
$
0.20
3
BELDEN INC.
OPERATING SEGMENT INFORMATION
(Unaudited)
Enterprise Solutions
Industrial Solutions
Total Segments
(In thousands, except percentages)
For the three months ended December 31, 2021
Segment Revenues
$
294,312
$
343,246
$
637,558
Segment EBITDA
39,705
60,270
99,975
Segment EBITDA margin
13.5
%
17.6
%
15.7
%
Depreciation expense
5,609
6,134
11,743
Amortization of intangibles
4,393
5,208
9,601
Amortization of software development intangible assets
22
792
814
Severance, restructuring, and acquisition integration costs
6,044
5,309
11,353
Adjustments related to acquisitions and divestitures
—
(750)
(750)
Goodwill and other asset impairment
—
131,178
131,178
For the three months ended December 31, 2020
Segment Revenues
$
227,731
$
270,809
$
498,540
Segment EBITDA
26,140
47,259
73,399
Segment EBITDA margin
11.5
%
17.5
%
14.7
%
Depreciation expense
5,447
5,954
11,401
Amortization of intangibles
5,396
10,693
16,089
Amortization of software development intangible assets
61
515
576
Severance, restructuring, and acquisition integration costs
1,410
1,400
2,810
For the twelve months ended December 31, 2021
Segment Revenues
$
1,074,426
$
1,333,674
$
2,408,100
Segment EBITDA
143,236
227,946
371,182
Segment EBITDA margin
13.3
%
17.1
%
15.4
%
Depreciation expense
21,594
24,346
45,940
Amortization of intangibles
17,595
20,751
38,346
Amortization of software development intangible assets
94
2,806
2,900
Severance, restructuring, and acquisition integration costs
13,800
10,092
23,892
Adjustments related to acquisitions and divestitures
(6,828)
1,792
(5,036)
Goodwill and other asset impairment
—
140,461
140,461
For the twelve months ended December 31, 2020
Segment Revenues
$
872,415
$
990,301
$
1,862,716
Segment EBITDA
99,333
147,626
246,959
Segment EBITDA margin
11.4
%
14.9
%
13.3
%
Depreciation expense
20,655
21,815
42,470
Amortization of intangibles
21,662
42,733
64,395
Amortization of software development intangible assets
245
1,576
1,821
Severance, restructuring, and acquisition integrations costs
7,720
4,538
12,258
Adjustments related to acquisitions and divestitures
125
—
125
4
BELDEN INC.
OPERATING SEGMENT RECONCILIATION TO CONSOLIDATED RESULTS
(Unaudited)
Three Months Ended
Twelve Months Ended
December 31, 2021
December 31, 2020
December 31, 2021
December 31, 2020
(In thousands)
Total Segment Revenues
$
637,558
$
498,540
$
2,408,100
$
1,862,716
Adjustments related to acquisitions
1,352
—
—
—
Consolidated Revenues
$
638,910
$
498,540
$
2,408,100
$
1,862,716
Total Segment EBITDA
$
99,975
$
73,399
$
371,182
$
246,959
Total non-operating pension benefit (cost)
1,355
(2,474)
4,476
(395)
Non-operating pension settlement loss
—
3,153
—
3,153
Eliminations
(47)
(78)
(119)
(480)
Consolidated Adjusted EBITDA (1)
101,283
74,000
375,539
249,237
Goodwill and other asset impairment
(131,178)
—
(140,461)
—
Interest expense, net
(16,055)
(15,700)
(62,695)
(58,888)
Depreciation expense
(11,743)
(11,401)
(45,940)
(42,470)
Severance, restructuring, and acquisition integration costs
(11,353)
(2,810)
(23,892)
(12,258)
Amortization of intangibles
(9,601)
(16,089)
(38,346)
(64,395)
Amortization of software development intangible assets
(814)
(576)
(2,900)
(1,821)
Loss on debt extinguishment
—
—
(5,715)
—
Non-operating pension settlement loss
—
(3,153)
—
(3,153)
Adjustments related to acquisitions and divestitures
750
—
5,036
(125)
Gain on sale of note receivable
27,036
—
27,036
—
Income from continuing operations before taxes
$
(51,675)
$
24,271
$
87,662
$
66,127
(1)Consolidated Adjusted EBITDA is a non-GAAP measure. See Reconciliation of Non-GAAP Measures for additional information.
5
BELDEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2021
December 31, 2020
(Unaudited)
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents
$
643,757
$
501,994
Receivables, net
412,217
296,817
Inventories, net
345,354
247,298
Other current assets
65,700
52,289
Total current assets
1,467,028
1,098,398
Property, plant and equipment, less accumulated depreciation
349,814
368,620
Operating lease right-of-use assets
79,464
54,787
Goodwill
1,152,472
1,251,938
Intangible assets, less accumulated amortization
301,696
287,071
Deferred income taxes
32,321
29,536
Other long-lived assets
34,882
49,384
$
3,417,677
$
3,139,734
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
384,223
$
244,120
Accrued liabilities
334,316
276,641
Total current liabilities
718,539
520,761
Long-term debt
1,459,991
1,573,726
Postretirement benefits
120,997
160,400
Deferred income taxes
59,990
38,400
Long-term operating lease liabilities
67,225
46,398
Other long-term liabilities
34,853
42,998
Stockholders’ equity:
Common stock
503
503
Additional paid-in capital
833,627
823,605
Retained earnings
505,717
450,876
Accumulated other comprehensive loss
(70,566)
(191,851)
Treasury stock
(313,994)
(332,552)
Total Belden stockholders’ equity
955,287
750,581
Noncontrolling interests
795
6,470
Total stockholders’ equity
956,082
757,051
$
3,417,677
$
3,139,734
6
BELDEN INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
Twelve Months Ended
December 31, 2021
December 31, 2020
(In thousands)
Cash flows from operating activities:
Net income (loss)
$
64,317
$
(55,058)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization
87,988
108,687
Goodwill and other asset impairment
140,461
113,007
Share-based compensation
24,871
20,030
Loss on debt extinguishment
5,715
—
Deferred income tax expense (benefit)
3,575
(19,410)
Changes in operating assets and liabilities, net of the effects of currency exchange rate changes, acquired businesses and disposals:
Receivables
(119,012)
70,707
Inventories
(92,984)
(8,507)
Accounts payable
135,666
(43,567)
Accrued liabilities
61,241
7,374
Income taxes
(6,448)
(22,823)
Other assets
(12,693)
2,018
Other liabilities
(20,642)
906
Net cash provided by operating activities
272,055
173,364
Cash flows from investing activities:
Capital expenditures
(90,982)
(90,215)
Cash from (used for) business acquisitions, net of cash acquired
(73,340)
590
Purchase of intangible assets
(3,650)
—
Proceeds from disposal of tangible assets
30,234
3,161
Proceeds from disposal of businesses, net of cash sold
45,735
54,821
Net cash used for investing activities
(92,003)
(31,643)
Cash flows from financing activities:
Payments under borrowing arrangements
(360,304)
(190,000)
Cash dividends paid
(9,056)
(9,029)
Debt issuance costs paid
(8,173)
—
Withholding tax payments for share-based payment awards
(5,570)
(1,388)
Payments under financing lease obligations
(3,151)
(194)
Payments to noncontrolling interest holders
(2,682)
—
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
(32,926)
(74,911)
Effect of foreign currency exchange rate changes on cash and cash equivalents
(5,363)
9,299
Increase in cash and cash equivalents
141,763
76,109
Cash and cash equivalents, beginning of period
501,994
425,885
Cash and cash equivalents, end of period
$
643,757
$
501,994
For the year ended December 31, 2020, the Condensed Consolidated Cash Flow Statement includes the results of discontinued operations up to the disposal date, July 2, 2020.
7
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.
8
Three Months Ended
Twelve Months Ended
December 31, 2021
December 31, 2020
December 31, 2021
December 31, 2020
(In thousands, except percentages and per share amounts)
GAAP revenues
$
638,910
$
498,540
$
2,408,100
$
1,862,716
Adjustments related to acquisitions
(1,352)
—
—
—
Adjusted revenues
$
637,558
$
498,540
$
2,408,100
$
1,862,716
GAAP gross profit
$
228,207
$
175,256
$
854,362
$
663,289
Severance, restructuring, and acquisition integration costs
7,002
482
11,308
704
Amortization of software development intangible assets
814
576
2,900
1,821
Adjustments related to acquisitions and divestitures
(1,352)
—
2,349
125
Adjusted gross profit
$
234,671
$
176,314
$
870,919
$
665,939
GAAP gross profit margin
35.7
%
35.2
%
35.5
%
35.6
%
Adjusted gross profit margin
36.8
%
35.4
%
36.2
%
35.8
%
GAAP selling, general and administrative expenses
$
(121,652)
$
(91,059)
$
(426,335)
$
(366,188)
Severance, restructuring, and acquisition integration costs
4,351
2,328
12,584
11,554
Adjustments related to acquisitions and divestitures
602
—
(7,385)
—
Adjusted selling, general and administrative expenses
$
(116,699)
$
(88,731)
$
(421,136)
$
(354,634)
GAAP and adjusted research and development expenses
$
(29,787)
$
(25,663)
$
(124,660)
$
(107,296)
GAAP income (loss) from continuing operations
$
(51,573)
$
15,770
$
62,457
$
54,403
Interest expense, net
16,055
15,700
62,695
58,888
Income tax expense (benefit)
(102)
8,501
25,205
11,724
Gain on sale of note receivable
(27,036)
—
(27,036)
—
Loss on debt extinguishment
—
—
5,715
—
Non-operating pension settlement loss
—
3,153
—
3,153
Total non-operating adjustments
(11,083)
27,354
66,579
73,765
Goodwill and other asset impairment
131,178
—
140,461
—
Severance, restructuring, and acquisition integration costs
11,353
2,810
23,892
12,258
Amortization of intangible assets
9,601
16,089
38,346
64,395
Amortization of software development intangible assets
814
576
2,900
1,821
Adjustments related to acquisitions and divestitures
(750)
—
(5,036)
125
Total operating income adjustments
152,196
19,475
200,563
78,599
Depreciation expense
11,743
11,401
45,940
42,470
Adjusted EBITDA
$
101,283
$
74,000
$
375,539
$
249,237
GAAP income (loss) from continuing operations margin
(8.1)
%
3.2
%
2.6
%
2.9
%
Adjusted EBITDA margin
15.9
%
14.8
%
15.6
%
13.4
%
GAAP income (loss) from continuing operations
$
(51,573)
$
15,770
$
62,457
$
54,403
Less: Net income attributable to noncontrolling interest
56
25
392
104
GAAP net income (loss) from continuing operations attributable to Belden stockholders
$
(51,629)
$
15,745
$
62,065
$
54,299
GAAP income (loss) from continuing operations
$
(51,573)
$
15,770
$
62,457
$
54,403
Plus: Operating income adjustments from above
152,196
19,475
200,563
78,599
Plus: Loss on debt extinguishment
—
—
5,715
—
Plus: Non-operating pension settlement loss
—
3,153
—
3,153
Less: Gain on sale of note receivable
27,036
—
27,036
—
Less: Net income attributable to noncontrolling interest
56
25
392
104
Less: Tax effect of adjustments above
13,363
(2,172)
24,365
12,515
Adjusted net income from continuing operations attributable to Belden stockholders
$
60,168
$
40,545
$
216,942
$
123,536
GAAP income (loss) from continuing operations per diluted share attributable to Belden stockholders
$
(1.15)
$
0.35
$
1.37
$
1.21
Adjusted income from continuing operations per diluted share attributable to Belden stockholders
$
1.32
$
0.90
$
4.78
$
2.75
GAAP diluted weighted average shares
44,927
44,848
45,361
44,937
Adjustment for anti-dilutive shares that are dilutive under adjusted measures
802
—
—
—
Adjusted diluted weighted average shares
45,729
44,848
45,361
44,937
9
Three Months Ended
Twelve Months Ended
April 4, 2021
July 4, 2021
October 3, 2021
December 31, 2021
December 31, 2021
December 31, 2020
(In thousands, except percentages and per share amounts)
GAAP revenues
$
536,381
$
601,974
$
630,835
$
638,910
$
2,408,100
$
1,862,716
Adjustments related to acquisitions
—
849
503
(1,352)
—
—
Less: Tripwire revenues
27,698
$
26,117
$
26,074
$
26,951
$
106,840
$
110,524
Adjusted revenues excluding Tripwire
$
508,683
$
576,706
$
605,264
$
610,607
$
2,301,260
$
1,752,192
GAAP gross profit
$
191,344
$
211,535
$
223,276
$
228,207
$
854,362
$
663,289
Severance, restructuring, and acquisition integration costs
260
1,103
2,943
7,002
11,308
704
Amortization of software development intangible assets
689
607
790
814
2,900
1,821
Adjustments related to acquisitions and divestitures
816
1,995
890
(1,352)
2,349
125
Less: Tripwire gross profit
22,441
20,466
20,255
20,678
83,840
88,630
Adjusted gross profit excluding Tripwire
$
170,668
$
194,774
$
207,644
$
213,993
$
787,079
$
577,309
GAAP gross profit margin
35.7
%
35.1
%
35.4
%
35.7
%
35.5
%
35.6
%
Adjusted gross profit margin excluding Tripwire
33.6
%
33.8
%
34.3
%
35.0
%
34.2
%
32.9
%
GAAP selling, general and administrative expenses
$
(91,453)
$
(105,554)
$
(107,676)
$
(121,652)
$
(426,335)
$
(366,188)
Severance, restructuring, and acquisition integration costs
4,911
1,937
1,385
4,351
12,584
11,554
Adjustments related to acquisitions and divestitures
(7,191)
(83)
(713)
602
(7,385)
—
Less: Tripwire selling, general and administrative expenses
(10,819)
(11,984)
(12,339)
(13,142)
(48,284)
(42,629)
Adjusted selling, general and administrative expenses excluding Tripwire
$
(82,914)
$
(91,716)
$
(94,665)
$
(103,557)
$
(372,852)
$
(312,005)
GAAP research and development expenses
$
(31,500)
$
(30,922)
$
(32,451)
$
(29,787)
$
(124,660)
$
(107,296)
Less: Tripwire research and development expenses
(8,888)
(8,659)
(9,216)
(7,670)
(34,433)
(34,276)
Adjusted research and development expenses excluding Tripwire
$
(22,612)
$
(22,263)
$
(23,235)
$
(22,117)
$
(90,227)
$
(73,020)
GAAP income (loss) from continuing operations
$
28,741
$
43,972
$
41,317
$
(51,573)
$
62,457
$
54,403
Interest expense, net
15,511
14,878
16,251
16,055
62,695
58,888
Income tax expense (benefit)
7,880
8,552
8,875
(102)
25,205
11,724
Gain on sale of note receivable
—
—
—
(27,036)
(27,036)
—
Loss on debt extinguishment
—
—
5,715
—
5,715
—
Non-operating pension settlement loss
—
—
—
—
—
3,153
Total non-operating adjustments
23,391
23,430
30,841
(11,083)
66,579
73,765
Goodwill and other asset impairment
6,996
—
2,287
131,178
140,461
—
Severance, restructuring, and acquisition integration costs
5,171
3,040
4,328
11,353
23,892
12,258
Amortization of intangible assets
9,947
9,102
9,696
9,601
38,346
64,395
Amortization of software development intangible assets
689
607
790
814
2,900
1,821
Adjustments related to acquisitions and divestitures
(6,375)
1,912
177
(750)
(5,036)
125
Total operating income adjustments
16,428
14,661
17,278
152,196
200,563
78,599
Depreciation expense
11,560
11,367
11,270
11,743
45,940
42,470
Adjusted EBITDA
80,120
93,430
100,706
101,283
375,539
249,237
Less: Tripwire adjusted EBITDA
3,567
532
(616)
507
3,990
14,875
Adjusted EBITDA excluding Tripwire
$
76,553
$
92,898
$
101,322
$
100,776
$
371,549
$
234,362
GAAP income (loss) from continuing operations margin
5.4
%
7.3
%
6.5
%
(8.1)
%
2.6
%
2.9
%
Adjusted EBITDA margin excluding Tripwire
15.0
%
16.1
%
16.7
%
16.5
%
16.1
%
13.4
%
GAAP income (loss) from continuing operations
$
28,741
$
43,972
$
41,317
$
(51,573)
$
62,457
$
54,403
Less: Net income attributable to noncontrolling interest
75
208
53
56
392
104
GAAP net income (loss) from continuing operations attributable to Belden stockholders
$
28,666
$
43,764
$
41,264
$
(51,629)
$
62,065
$
54,299
10
Three Months Ended
Twelve Months Ended
April 4, 2021
July 4, 2021
October 3, 2021
December 31, 2021
December 31, 2021
December 31, 2020
(In thousands, except percentages and per share amounts)
GAAP income (loss) from continuing operations
$
28,741
$
43,972
$
41,317
$
(51,573)
$
62,457
$
54,403
Plus: Operating income adjustments from above
16,428
14,661
17,278
152,196
200,563
78,599
Plus: Loss on debt extinguishment
—
—
5,715
—
5,715
—
Plus: Non-operating pension settlement loss
—
—
—
—
—
3,153
Less: Gain on sale of note receivable
—
—
—
27,036
27,036
—
Less: Net income attributable to noncontrolling interest
75
208
53
56
392
104
Less: Tax effect of adjustments above
2,688
3,676
4,638
13,363
24,365
12,515
Less: Tripwire adjusted net income (loss)
2,042
(337)
(972)
715
1,448
10,374
Adjusted net income from continuing operations attributable to Belden stockholders excluding Tripwire
$
40,364
$
55,086
$
60,591
$
59,453
$
215,494
$
113,162
GAAP income (loss) from continuing operations per diluted share attributable to Belden stockholders
$
0.64
$
0.97
$
0.91
$
(1.15)
$
1.37
$
1.21
Adjusted income from continuing operations excluding Tripwire per diluted share attributable to Belden stockholders
$
0.90
$
1.22
$
1.33
$
1.30
$
4.75
$
2.52
GAAP diluted weighted average shares
45,045
45,262
45,425
44,927
45,361
44,937
Adjustment for anti-dilutive shares that are dilutive under adjusted measures
—
—
—
802
—
—
Adjusted diluted weighted average shares
45,045
45,262
45,425
45,729
45,361
44,937
11
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
Twelve Months Ended
December 31, 2021
December 31, 2020
December 31, 2021
December 31, 2020
(In thousands)
GAAP net cash provided by operating activities
$
170,136
$
134,675
$
272,055
$
173,364
Capital expenditures, net of proceeds from the disposal of tangible assets
(8,428)
(33,335)
(60,748)
(87,054)
Non-GAAP free cash flow
$
161,708
$
101,340
$
211,307
$
86,310
BELDEN INC.
RECONCILIATION OF NON-GAAP MEASURES
2022 Guidance
Year Ended
Three Months Ended
December 31, 2022
April 3, 2022
(In thousands)
GAAP income from continuing operations per diluted share attributable to Belden common stockholders
$4.10 - $4.45
$0.76 - $0.86
Amortization of intangible assets
0.59
0.16
Severance, restructuring, and acquisition integration costs
0.31
0.11
Adjusted income from continuing operations per diluted share attributable to Belden common stockholders
$5.00 - $5.35
$1.03 - $1.13
Our guidance is based upon information currently available regarding events and conditions that will impact our future operating results. In particular, our results are subject to the factors listed under "Forward-Looking Statements" in this release. In addition, our actual results are likely to be impacted by other additional events for which information is not available, such as asset impairments, adjustments related to acquisitions and divestitures, severance, restructuring, and acquisition integration costs, gains (losses) recognized on the disposal of tangible assets, gains (losses) on debt extinguishment, discontinued operations, and other gains (losses) related to events or conditions that are not yet known.
12
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 first quarter and full-year 2022, the Tripwire divestiture, 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.
